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War Economy

State Ownership of Mines

State Ownership of Mines

When war broke out, the State owned and was operating three underground mines, all situated on the West Coast. When it ended there were eleven underground state mines, and, in addition, eight open-cast mines. The latter had all been developed by the State during the six war years. For the year ended March 1940 the state mines produced less than one-tenth of the total output of coal, but in the following year state mines, excluding state open-cast mines, were producing 873,000 tons out of a total of 2,794,000 tons, or nearly a third. This considerable extension of state enterprise in underground mining was not brought about by opening up and developing new mines but almost entirely by the acquisition of existing mines.

Some of the underground mines which were taken over had reached a stage where the companies working them were unable to continue operations because of severe financial loss or inability to carry out development work to increase production. On the other hand, some mines were taken over as a means of settling disputes between owners and miners. The most notable instance was the Waikato mines, which were taken over after sentences of one month's imprisonment imposed on 182 strikers had been suspended on the condition that they worked diligently and refrained from striking. It was this action which led to the withdrawal of National Party members from the War Administration in September 1942.1

State ownership of the Waikato mines resulted in an immediate spurt to a record level of production in 1943, but this achievement was short-lived. Output fell successively in 1944, 1945 and 1946, until in the last year it was sixteen thousand tons less than it had been in 1939. Altogether, the taking over of the Waikato mines was a very costly state venture.

1 See also Wood, p. 236.