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War Economy



In the early war years the availability of shipping for the New Zealand trade was determined largely by the emphasis the United Kingdom chose to place on its bulk purchases of New Zealand farm products.

The New Zealand trade had always been dependent on British shipping and, in the years 1935 to 1939, British shipping represented approximately 77 per cent of the total tonnage of all arrivals in New Zealand. Immediately war began all British shipping was requisitioned and became subject to the direction of the British Ministry of War Transport. Shipping would have to be used where it could make the most effective contribution to wartime needs. This would not necessarily always include using it for the long haul to New Zealand.

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Though New Zealand was spared the immediate interruption of her sea traffic which might have occurred had Japan entered the war from the start, there were losses of shipping as a result of enemy action right from the first months of war. It was this form of attack which brought the war closest to New Zealand shores, when, on 19 June 1940, the liner Niagara, sailing from Auckland to Suva and Vancouver, struck two mines laid by a German raider, and sank in the approaches to Hauraki Gulf.1

Many other ships trading to New Zealand fell victim to enemy action; for example sixty-four ships, representing 631,000 tons gross register, engaged in the New Zealand refrigerated cargo trade were lost.2 However, the most drastic threat to New Zealand's overseas trade was not so much a direct attack on ships carrying her own produce and her own imports as the general depletion of allied shipping, which left an inadequate fleet for all the haulage which had to be done.

The major shipping losses were inflicted in the Atlantic and their importance was stressed by Churchill in a statement on 9 April 1941:3

‘But, after all, everything turns upon the Battle of the Atlantic which is proceeding with growing intensity on both sides. Our losses in ships and tonnage are very heavy, and, vast as are our shipping resources which we control, the losses cannot continue indefinitely without seriously affecting our war effort and our means of subsistence.’

Allied shipping losses were at their highest in the first half of 1942. In that year 1665 allied or neutral ships were sunk, involving nearly eight million gross tons. November 1942 was the worst month of the war. In this month 900,000 tons of allied shipping was sunk.

There were some bad months in the early part of 1943, but by then the Allies were starting to strike back more effectively. By early 1943 the destruction of U-boats was having its effect, and in May 1943 U-boat losses averaged one a day.4 In the second half of 1943 the shipping situation took a marked change for the better.

Losses of merchant shipping under British control had amounted to nearly 11 million gross tons in the war period up to March 1943.

1 She was carrying gold valued at some £21/2 million, most of which was recovered from a depth of 483 feet in a remarkable feat of salvage in 1941. A tribute to the salvage operation is paid by Capt S. W. Roskill, dsc, rn, in The War at Sea, 1939–1945, Vol. I, p. 282.

2 Parliamentary Paper H–30, Report of the Marketing Department (Export Division), 1945, p. 40.

3 Quoted by S. D. Waters in Ordeal by Sea, p. 100.

4 Waters, op. cit., p. 197.

page 374 This was equivalent to over half the shipping under British control in the first year of war. Since September 1940, losses had much more than cancelled out gains from various sources, the net loss being 3 ½ million tons. Shipping under British control was brought to the dangerously low level of under 18 million tons in March 1943. It was to build up to close to 21 million tons in the next two years.

Losses had included refrigerated cargo space which was vital for the long haul of New Zealand perishable produce to the United Kingdom. Refrigerated shipping was difficult to replace when the emphasis was on a quick completion of new vessels to replace losses due to enemy action. This, and the tendency to concentrate available shipping on the shorter Atlantic haul, increased New Zealand's trading difficulties. Her reaction to the reduction in numbers and tonnage of vessels arriving at New Zealand ports was to strive for a more efficient use of cargo space and a quicker turn-around of vessels. Carcasses were telescoped and shipping space was allocated to the most urgent supplies. Early in the war the United Kingdom Government decided that scarce space could not be spared for the shipment of fruit from New Zealand, a decision which created the difficult problem of disposing of surplus fruit on the already well supplied New Zealand market.1 The switch of emphasis in dairy production from butter to cheese, and later back to butter,2 was also considerably influenced by shipping needs and the varying availability of foodstuffs on the shorter haul from North America.

An interesting sidelight on New Zealand's shipping shortage was thrown by the use of the barque Pamir, a Finnish ship which had been seized as a prize of war following her arrival at Wellington in July 1941.3 Pamir, in January 1942, made her first trip under the New Zealand flag to Pacific ports of North America. Her cargo was wool and tallow and she brought back wheat. On later trips she returned laden with coal.

Because of the scarcity of shipping it was not difficult to find cargo, and her first three trips brought a profit of £45,000. The gradual improvement in the shipping position was reflected in the results of the seven remaining voyages. On all except two of them she sailed at a loss.

Pamir under sail was a stirring sight. Her arrivals and departures created considerable public interest. She was eventually handed back to the Government of Finland in 1948.

1 See also p. 216.

2 Chapter 8.

3 This in spite of the fact that there was no formal declaration of war with Finland until December.

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From 1942 United States ship construction was stepped up, a feature being the standardised, rapidly constructed Liberty ships, of which 2700 were produced during the war. In 1943 and 1944 the extensive use of American ships for Lend-Lease supplies considerably eased the shipping problem for New Zealand. Before the war United Kingdom registry tonnages cleared from New Zealand ports were four times the American, but 1943 was unique in that more American than United Kingdom shipping was cleared. By this year United Kingdom tonnages had fallen to less than half the level before the war, while United States tonnages had doubled. This was a reflection of changes in the world shipping situation. United States shipping had not been under intensive attack until later in the war; she was able to recover earlier. A United States history records,1 ‘During the last quarter of 1942, ship production for the first time topped ship destruction by enemy action, and marine casualty.’ On the other hand Churchill wrote,2 ‘During 1943 the curve of new tonnage rose sharply and losses fell. Before the end of that year new tonnage at last surpassed losses at sea from all causes, and the second quarter saw, for the first time, U-boat losses exceed their rate of replacement.’

American tonnages in New Zealand ports were quite high again in 1944, but fell away in 1945, when United Kingdom tonnages started to increase rapidly. By 1946 British ships were arriving in the same tonnages as before the war, but United States tonnages had declined to well below the pre-war level.

1 Samuel Eliot Morison, History of United States Navy Operations in World War II, Vol. I p. 294.

2 The Second World War, Vol. V, p. 4.