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)