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War Economy

Disposal of War Assets

Disposal of War Assets

In May 1944 the War Assets Realisation Board was set up, ‘to undertake the orderly disposal of all buildings, materials, equipment and stores held in New Zealand or elsewhere which are declared by the services and Government Departments to be surplus to their requirements.’

Disposal of assets realised some £33 million, but, more important, an orderly method was found to bring as much as possible of the surplus material into peacetime use without delay, at a time when supplies of many lines were still very scarce.

Originally the Board had nine ex-officio members,4 but the Minister of Finance could appoint other members. In 1946 there were fourteen members.

Government departments were to have first call on the surplus assets. An attempt was made to avoid dumping stores at bargain prices. On the other hand, it was necessary to push ahead with realisations to avoid deterioration or obsolescence of large stocks.

For commercial goods, trade channels were used where possible; otherwise goods were disposed of by tender or, failing that, by auction. Private treaty might be used where other methods failed.

Apart from assets declared surplus by New Zealand government departments, the Board purchased for disposal certain United Kingdom goods located in New Zealand, disposed, on a commission basis, of surpluses declared by the United States Joint Purchasing Board, and dealt with machinery, plant, and machine tools

4 This included the Minister of Finance, as Chairman, but he did not usually attend.

page 522 received as reparations. It was disposal agent for the Linen Flax Corporation, when linen flax factories were closed down. The Board was also required to find the best use for the special Government purchase of surplus United States equipment which was arranged at the time when the Mutual Aid Agreement was concluded.1

Most sales were made in New Zealand, but overseas organisations took goods valued at over £500,000. Food to the value of £1 million was sent as a gift to the British Government.2

Surplus buildings and motor vehicles played a most important part in tiding over supply shortages in New Zealand. Many of the larger buildings were taken over by Government departments, others by local authorities. The Government had inaugurated a transit housing scheme in September 1945, and, for this purpose, buildings were provided free to local authorities. Prefabricated steel buildings, which had been used by the United States Forces in the Pacific, became classrooms and dormitories in schools and universities, office accommodation for Government departments and so on. One was even erected as a church.3 Smaller wooden huts, after a short period when their large numbers saturated the market, sold readily for a wide variety of purposes.

By May 1948, 21,800 motor vehicles had been disposed of,4 apart from the American vehicles mentioned below. Government departments, which bought 3100, and returned servicemen, who bought 5000, received preference. The general public bought 13,600. These vehicles realised nearly £5 million.

In 1946, because of allegations that the sale of damaged motor vehicles, made available by the United States Joint Purchasing Board and purchased by the New Zealand Government for disposal, had been carelessly handled, a Royal Commission was set up. The Board had had a difficult task in disposing quickly of large collections of vehicles in varying states of repair, which were so jammed together in small areas as to make adequate inspection most difficult.5

On most counts, the Commission found that the Board had acted properly, but found it to be at fault in not insisting on at least a rough valuation of certain of the vehicles before dealing with tenders.6

1 See also pp. 51920.

2 See also p. 526.

3 H–27, 1947, p. 8.

4 Including 1000 Bren-gun carriers. The figures which follow do not add exactly, due to rounding.

5 The vehicles were awaiting repair in New Zealand when hostilities ceased, many of them needing a major overhaul. The government-to-government purchase of these vehicles was arranged in December 1945.

6 Parliamentary Paper H–27A, dated 23 September 1946, p. 18.

page 523

The Commission, however, made a more important observation. It said:1

‘I have the honour to report that I consider that in its present constitution the Board is too cumbersome a body for the effective discharge of its functions in a businesslike manner. The larger the number of members the more is the sense of personal responsibility dissipated. The evidence showed a too-ready acquiesence in the recommendations of the General Manager—the Deputy Chairman could not recall an instance where the Board had disagreed with the General Manager's recommendations—and the failure to give time to due consideration of important matters. The official members have not necessarily the qualifications to deal with business matters. The Board should be organised on a businesslike basis, as it would be in the commercial world. If the members are too numerous, there can be no adequate discussion of business in a reasonable time.’

Response to this comment was quick and effective. The 1947 report of the Board said:2

‘Experience has shown that the Board as originally constituted and added to from time to time, a total of fourteen members, was too cumbersome a body for the effective discharge of its function. It was therefore recently decided to considerably reduce the size of the Board and as now constituted it consists of three members only….’

By 1948 the bulk of the Board's work was done. Assets had realised £3·5 million in 1944–45, over £11 million in both of 1945–46 and 1946–47, and £5·4 million in 1947–48. At this stage the Board estimated that revenue for the ensuing period would not exceed £2 million.

Up to March 1948 ammunition had realised £4·5 million, buildings and land £4·5 million, foodstuffs £3·9 million, motor transport vehicles and parts £6·1 million, textiles and clothing £2·9 million and other items £9·4 million.

From the economic viewpoint, the cash realised was not so important as the fact that vast quantities of surplus war materials had been distributed through the peacetime economy in a reasonably orderly fashion. Above all, they had been distributed speedily and with comparatively little waste at a time when many materials needed to assist in post-war recovery and development were in very short supply.

1 Parliamentary Paper H–27A, p. 35.

2 p. 1.