The Right Honourable Sir Francis H. D. Bell, P.C., G.C.M.G., K.C.,: His Life and Times
Chapter XXIX. — Out of Office—1928-1936
Out of Office—1928-1936.
Defeat of the Government—United Party takes office— Two parties or three?—Bell's views thereon—Currency problems—Public Debt conversion.
The Coates Government suffered defeat at the election of 1928. It had been faced with falling prices and adverse economic conditions, which compelled the adoption of unpopular measures of economy and retrenchment. The Liberal Opposition went to the election under the new name of the United Party, with a spectacular programme of borrowing and benefits for all.
As a result of the election, no Party had a clear majority, but the Labour Party held the balance of power, and with its support the United Party, under Sir Joseph Ward, took office. But it was obvious that the new Government would be able to remain in office only so long as it could satisfy the Labour Party or, at best, with the grudging support of the official Opposition.
New Zealand was now to experience in full measure the evils of the three-party system, for experience has shown that the parliamentary machine functions satis-page 276factorily only where one Party has a clear majority over all others. We have already seen that, in 1922, Massey was enabled to escape from this quandary by his good fortune in securing the support of two or three Liberals or Independents. But while his fate was still uncertain, he had denounced the three-party system as a menace.
"I am going to predict," he said, "that if this three-party system continues, with vote-splitting almost scientific—and it has been used to a great extent in connection with the recent elections—we may yet find our Socialists sitting on these benches or on those opposite …. So far as the three-party system is concerned, it has been a curse to every country that has tried it."
Massey was right in his denunciation of the three-party system, but his reasons for doing so are not so unimpeachable. His objection seemed to be based on the belief that the existence of three parties would hasten the day when a Labour Government would be inevitable. But is not the real objection that stable government is impossible if no one party holds a clear majority over all other parties? The question of whether the two-party or the three-party system makes it easier for Labour to gain office is of secondary importance.
It is difficult to reconcile Bell's views on this problem as expressed soon after the election of 1928 with the views he expressed at a later date. Writing to his brother, Arthur, in Melbourne on December 28, 1928, he says:
" You wrote me condolences about the election here. page 277 This country was right enough to adhere to the tradition that sixteen years of office is long enough, and that a change of administrators is a constitutional propriety. Your continent wisely sticks to Bruce, to whom the alternative is Labour. If that had been the alternative here, Coates would still be in office, but there was another set available, and so change was the watchword. Personally, I am relieved of office a very little sooner than had been agreed on for my resignation, and am not disturbed. For tuna saevo lacta negotio et ludum insolentem ludere pertinax transmutat incertos honores (Fortune delighting in her cruel business and persistent in playing her wanton tricks changes about her uncertain favours)."
It will be seen that he begins by conceding that after sixteen years a change of Government is in accordance with constitutional propriety, but he ends by stating that the change would not have occurred had the only alternative been a Labour Government. In other words, he seemed at that time to favour the two-party system as a safeguard against a Labour Government; but at a later date his views changed.
The problem became acute in 1930 while Forbes was still in England at an Imperial Conference. The depression had grown steadily worse, and public opinion, alarmed at the lack of a strong Government, was demanding that the Reform Party and the United Party should join forces. Soon after his return, Forbes found the position so intolerable that he offered to resign with all his Cabinet, so that a combined Moderate page 278Party might be formed with the right to choose its own Leader. This offer was rejected by Coates and the Reform Party.
To explain Bell's further letters it is necessary to obtrude my own views to some extent as forming the basis of Bell's comments. Ever since 1914 I had advocated the union of the two moderate parties, and I was now under pressure from all parts of New Zealand to take the platform. The position was rendered difficult and embarrassing by the fact that I was Coates's first lieutenant.
Bell to Stewart, November 27, 1930:
" I think you have given expression to a widespread public opinion, and personally I am glad that you have presented a view less ' a bar and bolt of the door' than Coates's last utterance has been interpreted as creating … I, myself, have never liked fusion, but have come to see how dangerous to peace and order the position is, apart from the incompetence of most of the present gang in administration. I fear that whatever is done Labour will win the election next year, with promises of alleviation of indigence from the pockets of those who have means. The farmers are hopeless, and, as I fear, will vote for any Party offering such promises. But though I believe that Labour will win anyhow, I am impressed with the sense of duty to put up at all events a single battle in each electorate. With you, I wish it were possible to have a Government including Labour representative men, but with you I know that that is impossible by reason of Labour's unchangeable attitude to that suggestion."
Bell to Stewart, December 11, 1930:
" Your statement has produced a concerted utterance to the contrary from official Reform. To you I repeat what I wrote before, that your words expressed a widespread public sentiment. (I do not know that that is well worded—can a sentiment be spread?) And I cannot see the advantage of keeping banging the bolts on the door, nor do I quite see the sense of holding Forbes now responsible for Ward's ludicrous promises. The public distinguish between Ward and the present lot—the distinction is well-founded. If our men took the line that some of the Ministers were an extravagant, useless crew whom Reform would not combine with, I should heartily agree. But what applies to them does not apply to Forbes, Ransom, Masters, and Ngata. Somehow I believe that agreement will come about on the proposal to repeal the Arbitration Act as advocated by the farmers assembled in Wellington yesterday; the granting of power to vary awards, that first; and secondly, rate of relief pay. I think when Forbes returns (he is a farmer to the nth) he will declare for both, and carry the men last-named with him. That defies Labour and brings us behind Forbes. This may be sanguine, indeed is, but that is as it seems probable to me, for if Forbes continues to depend on Labour he must defy the present talent of his own best allies."
So far Bell seemed to have been impressed by the need to combine the moderate parties, but chiefly with the object of creating a common front against the Labour Opposition, whereas my main object was to page 280create a stable Government whichever side the electors might choose.
The next letter shows Bell gradually hardening against the idea of fusion:
Bell to Stewart, May 3, 1931:
" I dare say, nay hope, that you understand that I was avoiding conference with Coates or you in the later part of the session, because I sincerely wished not to let such small influence as my view might have weigh with either of you. You, so it seems to me, accurately gauge the feeling of the country and with you I see the danger of flouting public opinion. I see indeed, and have said, that the danger extends to the possible destruction of our Party as a party.
" On the other hand, I have been a member of a coalition, and you know what conclusion that experience has created. I do not believe that a coalition can effect any useful purpose in times of Peace. I cannot see Stewart listening to [certain Ministers].
" If you ask me which should prevail—whether the danger does not justify the attempt at coalition —I reply that I do not know, and am therefore content to abide by the decision of a majority of Reform members. That is not facing both ways. It is an admission of the truth that years have affected my judgment. Age has withered me and custom staled such variety as I ever possessed. But if you ask me what I would do if I were Leader of the Party, I think I should accept the danger of my Party's extinction at the polls and refuse to join in what my page 281experience tells me means futile discussion in Cabinet with a semblance of union in oublic. Believe that I am still as always desirous to be with you personally and politically, but neither of us would be any damn good if the other could easily persuade him."
Bell to Stewart, June 30, 1931:
" Coates, passing through Wellington, showed me your letter. When I spoke against the 10 per cent. Civil Service business it did not matter. My recalcitrance made no break of the Party. But because I took the bit in my teeth, I can sincerely sympathize with your sense that you have been silent too long. But what you say does matter, as you would understand if you were less modest, and if you publicly declare for fusion you must smash the Party. Can you not wait until Parliament meets this month, and make your severance in the House and not on the platform? As I see things, a declaration by you now and in the Press or on the platform cannot effect your own policy of fusion, for it will harden the insistence of those of the Party who are against it, and your followers must wait till the General Election to effect anything. But if you do it in the House (if do it you must) then it may be that enough members will join you and United to bring it about in the session. This is all my own. I did not see Coates. He simply left your letter for me to read and send it on to him in the north. When you think it necessary to declare for fusion you and I must be in different camps, but you may be sure that on my part, and I am sure on yours, it will make no more personal page 282difference than if we quarrelled about ' Free Trade' or ' deceased wife's sister '."
In the following months the difficulties of the three-party system became increasingly manifest. The Reform Party was strongly tempted to turn out the Government on its Budget proposals, and the Labour Party, which had been incensed on account of the 10 per cent. cut in the salaries of Civil Servants, was eager to lend its assistance. On August 19, 1931, the Prime Minister sent for me and informed me that his position was desperate, and that unless he could secure the support of the Reform Party he would have to go to the country.
It was obvious, however, that if the Reform Party won the election and managed to form a Government, it would be forced to carry out the same policy of retrenchment and economy as Forbes had sought to carry out. It is unnecessary to trouble the reader with details of the long negotiations that followed—more especially as this phase of the story does not directly concern Bell. It will suffice to say that, after some weeks of arduous negotiations, a Coalition Government drawn from the United and Reform Parties, was sworn in on September 22, 1931.
Ostensibly, the Coalition was only to remain in force during the depression. But this depression was still at its height when another election fell due in 1931, and the Coalition Government went to the country as a combined Party.
Bell to Arthur Bell, November 24, 1931:
" Our election takes place three days hence with full hope of a sufficient majority against Labour. Your page 283Federal election takes place not long after, and may you too be saved by the polls from the extravagance of Labour finance."
If it is correct to hold that a strong Government is the first necessity of democracy, the two-party system appears to have justified itself on this occasion, as the Government came back with 50 members, Labour with 24, and 6 Independents. The same thing happened at the 1935 election, although the position was now reersed, as the Labour Party took office with 53 members. But at both elections, the objective of a stable Government was secured. It seems unlikely that New Zealand will revert to the three-party system, unless at some later date a Country Party emerges.
Bell's letters show that, in so far as he acquiesced in the change to two parties, he did so reluctantly. His general view was that the existence of only two parties confined the electors to too hard a choice. In his opinion, they might well wish for a change of administration without being forced to adopt the programme and policy of the Labour Government to achieve that end. In other words, so long as two moderate parties existed, the electors could decree a change of administration without any marked change in policy, but, as we have already seen, adherence to this view involved all the risks attaching to the three-party system of government.
When the Coates Government was defeated in 1928, the Governor-General, Sir Charles Fergusson, wrote to Bell:page 284
" I cannot let you go out of office without writing you a few lines of grateful thanks for all your help and kindness to me in our official relations during the last four years. Your advice, guidance, and support have made my task very easy and pleasant, and I have always felt that when in doubt or difficulty there was always one to whom I could turn, whose advice would be given, and whose discretion and judgment was absolutely safe."
After the creation of the Coalition Government in 1931, Bell continued to take an influential part in Parliamentary debates; but he was no longer Leader of the Council, and he described himself as a non-party man. As months went by he became increasingly dissatisfied with the trend of the emergency legislation designed to cope with the acute depression which had now reached alarming proportions.
To Arthur Bell, May 2, 1930:
" The proposed visit to Australia has been cancelled. I had come to think that seventy-nine years of age did not interfere with travel, but the Psalmist is not so far wrong. Bronchitis follows every cold and I can't face the responsibility of bronchitis away from home.
" I shall stay in the Council for the coming session, but intend to resign then and go out of politics altogether. As one grows old one fancies a responsibility which is illusory—one thinks one is bound to protest though no one cares a d - n for the protest or the protestant. Vixi (as Dido said) et quern dederat cur sum fortuna peregi. (I have had page 285my life and have fulfilled sucli lines as Fortune has allotted me).
" You often grieve that you can do nothing— that is better than going on failing."
When the proposal was put forward that the Government should artificially depreciate the currency, he wrote as follows:
Bell to Stewart:
" With all who said, ' country first,' I am grateful to you for resisting the assault on the Treasury led by interested bankers from Australia. You have held the pass against odds that would have overwhelmed many who might have had the place, and your defence will be justified and the defender thanked later, I valiantly believe. My own tribute is due now."
Early in 1933, Cabinet decided to depreciate the currency in spite of the fact that it had already introduced a Bill to set up a Reserve Bank whose duty it should be to control the Exchange without regard to politics. On this issue I resigned from the Ministry, and Bell wrote as follows:
January 17, 1933.
" Is not raising the Exchange by Government direction a breach of faith under the Ottawa Agreements? What is the use of additional preferential tariff, or reduction of existing tariff, if against sterling we deliberately raise the rate to an extent which heavily charges the purchase from England of any goods? Apart from a policy of raising Exchange by Government, which you are opposed to and there-page 286fore resign, is there not a reason to be added by you for resignation (not in your letter to Forbes necessarily) of even greater weight that you, a New Zealand delegate and personal party to the Ottawa Agreements, would not be party to a policy which ignored the spirit of these agreements and in effect defeated them? Two reasons to the public may not in many cases be better than one. In this instance, I think the second should be added. The second reason may seem to attack Coates; so it does, but it is your status before English statesmen, as well as your position before the New Zealand public, that I am considering, and which I believe it to be your duty to maintain."
It would require a volume to deal with the various aspects of the acute controversy that arose on this question of the depreciation of the currency, but as the step taken is now a fait accompli nothing is to be gained by recalling the details. But the decision of the Government to exercise political control of the Exchange furnished the Labour Party with a cogent precedent for going further along the same lines, and, in due course, it took political control of the Reserve Bank.
In 1933, the Government put through what was called a voluntary conversion of the Public Debt in order to reduce the interest burden on the taxpayer; but, as penalties were imposed by way of higher taxation on those who refused to acquiesce, the conversion was in effect compulsory. In my view the page 287financial position or the Dominion was by no means in such jeopardy as to necessitate so far-reaching a breach o£ faith, and this view was shared by Bell.
Bell to Stewart, March 3, 1933:
" Thanks for your letter. A— disingenuously, in following me, asked where in this Bill is compulsion or penalty. I could not wait, or I would have challenged Masters in his reply to tell A—what the penalty is on dissenters. The penalty on your Disruptors of the 1840's was comparable. Like you I spoke to deaf ears. A corrupt generation seeketh a sign, and will swallow anything that will afford sixpence to its pockets. That New Zealand should follow the scandalous precedent of Australia by pretending that the patriots voluntarily convert, and by concealing up the sleeve what they mean, and have told the patriots what they mean to do to the unconverted heretics, is so distressing to me that I cannot speak or write tolerantly. Let us frankly allow that Barabbas was a gentleman."
In the same way he vigorously criticized the compulsory reduction made in interest on all mortgages and in rents of property. In his view, this step was without precedent in the Parliamentary history of England or New Zealand. He prophesied that such measures as these would be availed of by the Labour Party the moment it got into power, in order to justify further action along the same lines.
On many other questions during the remaining years Bell spoke with his usual independence of thought, and without regard to popular opinion. It is not necessary page 288to argue that he was always right, as, for example, in his opposition to any reduction in the salaries o£ Civil Servants during the depression. The same may be said with reference to his views on the claim of the Government to take over the gold held by the banks at its mint value.
The chief aim of this book has been to place on record his views on wider questions of national and Empire policy, in so far as they may still be a guide to the student of public affairs.
" One wonders if it is well to survive into the eighties," Bell wrote on September 23, 1933, " You remember—Longa Tithonum minuit senectus. (A prolonged old age withered Tithonus)."