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.