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War Economy

CHAPTER 16 — Fuel, Power, and Services for Production

page 423

Fuel, Power, and Services for Production

New Sources of Power

WARTIME shortages of fuel and power were by no means restricted to the transport industry. Production, especially in manufacturing industries, was for a time hampered in meeting the demands of war by inadequate supplies of coal and electric power.

The war was but part of an era when manufacturing was increasing in importance relatively in the New Zealand economy and when motive power for manufacturing industries was tending to move over more and more to electricity. Steam engines, as sources of motive power in factories, decreased from 51,000 horsepower in 1937–38 to 37,000 horsepower in 1947–48. They provided 20 per cent of all factory horsepower in 1937–38 but less than 9 per cent a decade later. Though probably accelerated by wartime shortages of coal, the decline in the importance of steam power was already well under way when the war started.

In factories, oil was also starting to take the place of coal as a fuel for engines; 5 per cent of factory horsepower came from oil engines in 1937–38 and 11 per cent in 1947–48.

Thé waning importance of the steam engine as a source of motive power in factories did not cause a proportionate fall in the demand for coal. Many industries required large quantities of heat. Here coal could usually retain its place against electricity, though it tended to find a more serious rival in oil.

In the decade up to 1947–48 electric motors, which by 1937–38 were providing 72 per cent of the power available in factories, moved up to 80 per cent. Meantime the volume of output of factories had increased by over half, aided by a much increased overall use of power and an associated rise of 13 per cent in the volume of output per person engaged.

There is no statistical record of the electric power used by factories alone, but electric power used for all commercial and page 424 industrial purposes increased by two-thirds in the ten years. This very rapid rate of growth in the use of electric power seems to be necessary as part of the conditions for the steady increase in production per labour unit1 so often found in modern industry. The mobility, instant availability and general convenience of electric power have enabled manpower to be used more and more effectively.

Apart from wartime or depression interferences, the long-term trend for New Zealand has been, in general terms: labour force increasing 2 per cent a year, electric power usage increasing 8 per cent a year, production per head of labour increasing 2 per cent a year, and volume of production increasing 4 per cent a year. These growth rates are not independent of one another.

In the decade 1937–38 to 1947–48, the number of electric motors used on farms approximately doubled, tending to take over work done by internal combustion engines, which increased in number only 11 per cent in the decade. Agricultural tractors were also coming into their own. There were under 7000 in use in 1937; over 23,000 in 1947. Many tractors were supplied by the United States of America under Lend-Lease, and helped New Zealand farming to play its part in feeding United States forces in the Pacific.

This was the age of mechanisation of farming, with the horse being steadily replaced by the tractor. Better methods and better equipment were becoming generally available and, in spite of rising farm production, there was a slow but progressive decline in the numbers of men required to work on farms.

Meantime household demands for electric power were increasing by leaps and bounds. Households took nearly half of all power sold in 1939 and were increasing in relative importance as power users. Their demand for power had almost doubled by 1946. In households the extra convenience of electric power was increasing its popularity for lighting, cooking, and heating, while new gadgets using electric power were creating their own demand.

Wartime difficulties in obtaining sufficient coal to meet all the demands for it were discussed in Chapter 15. It is probable that uncertainties in the supply of coal played some part in bringing about the movement towards electricity in factories and elsewhere. However, in the main, the movement was part of a longer term tendency for electric power to increase in relative importance.

page 425

1 Production per labour unit is commonly called productivity. It is normally increased by better equipment, more power in the hands of each worker, and better methods of work. Productivity is sometimes measured per unit of capital used or per unit of some combination of labour and capital used.

Coal for Industry

Coal consumption at the outbreak of war was running at about 2,400,000 tons a year. It increased, by 1943, to rather more than 2,800,000 tons a year, at which level it was to remain until it declined in the early 1950s.

Coal used in factories1 increased from 540,000 tons in 1939 to 750,000 tons in 1945. A good deal of this extra coal was used for heating rather than for generation of steam power. As we have seen,2 horsepower of steam engines in factories decreased considerably over this same period. In 1939 nearly two-thirds of all coal used in factories was required for dairy factories, meat works, lime crushing and cement making. These industries increased their coal consumption 14 per cent over the war years. The diversity of new manufacturing industries which sprang up during the war brought new demands for all forms of power and, in spite of the tendency to swing to electricity and oil, the demand for coal for factories increased by 39 per cent between 1939 and 1945. In the same period electric power consumption by factories and commercial undertakings increased by 55 per cent.

The bulk of New Zealand's electric power was water generated, 77 per cent of the horsepower of the electric supply installations being of this type in 1937–38. Even here, coal-burning installations were tending to lose position relatively. The steam powered generators accounted for 18 per cent of the horsepower of all electric supply installations in 1937–38, but for only 10.5 per cent by 1947–48. In the latter year 96 per cent of electric power was generated in hydro-electric units.

1 Excluding electricity and gas generation.

2 p. 423.

Domestic Cooking and Heating

For domestic use, electricity was tending to push aside gas and coal. Electric ranges for cooking were gaining in popularity at the expense of gas ranges; electric heaters were taking over from gas heaters and open fires. Nevertheless, gas production increased by a quarter between 1939 and 1945.

Use of coal in gasworks increased from 226,000 tons in 1939 to 300,000 tons in 1945. Gasworks were the main users of imported coal; they took 78,000 tons in 1939, but had to be content with smaller quantities in the later war years as coal imports declined. In 1944 they used 41,000 tons of imported coal and in 1945 only 800 tons.3

page 426

Inadequacy of stocks held by gasworks, and irregularity in supplies of suitable coal from the West Coast, led to shortages and interruptions in gas supplies in 1945.

The increase of 25 per cent in gas production over the war years seems quite fast until it is compared with the 67 per cent increase in electricity generation.1 The slower rate of increase in production of gas was due partly to inadequacy of coal supplies and partly to the continuing tendency for electricity to take over from gas for domestic cooking and other purposes.

chart of energy statistics

Chart 72

3 Presumably taken from stocks. No imported coal arrived in 1944 or 1945. See also p. 410.

1 As a further comparison, manufacturing output increased 36 per cent.

Coal Supplies

The repeated shortages of coal for railways use and the restriction of less essential railway services were discussed in Chapter 15. Because of its key position in the transport industry, and the extremely heavy extra wartime load it had to carry, the Railways Department needed a high priority for available coal. Nevertheless page 427 its coal supplies continued to be uncertain. After the war, it was to convert many of its locomotives to oil burners, but during the war the Department remained predominantly dependent on coal.

Coal used for ships bunkering decreased over the war years from 159,000 tons in 1939 to 118,000 tons in 1945. It was to continue to decrease after the war. There was an increasing tendency for ships to burn oil instead of coal.

Supplies of coal remaining for civilian and other purposes fluctuated around 1,000,000 tons from about 1934 right through until well after the war; this in spite of the fact that the population increased by nearly one-fifth between 1934 and 1948. There were recurring shortages of coal for domestic use, but electricity, because of its extra convenience, was steadily being substituted for coal for space heating, in spite of the fact that some authorities considered electricity to be less economical than coal for this purpose.

Irregularities in coal production, as well as the extra convenience of electricity for heating and power, encouraged the growing tendency for electricity to take over. There were shortages of electricity, too, in the war years, but supplies were more reliable than coal supplies. Up to 1945, coal production increased each year. However, it could not keep pace with the demand from railways, factories and gasworks, all of which were hampered by inadequate stocks and uncertain arrivals of coal.

Electricity on the Upsurge

Electricity generation in New Zealand was by no means new in the pre-war decade. As far back as 1885 a hydro-electric power plant had been installed in Otago.1 Electric power development was essentially a government undertaking. In 1903, the Water Power Act had reserved to the Crown the sole right to use water for generating electricity.

Electricity was rapidly moving into new uses in the pre-war years and, in the five years up to 1939, electric power generation increased by 65 per cent. This rapid expansion in supply was not to satisfy demand for long. Demand increases of 9 per cent or more a year were usual and any hesitation for a few years in the expansion of generating plant would see demand ahead of supply.

Electric power shortages developed in the North Island in the war years, a misfortune which hampered the war effort and should have been avoided. Efficient production requires, above all, adequate power in convenient form.

page 428

Wartime shortages of electric power cannot be explained entirely in terms of an unexpected increase in demand, although domestic and manufacturing uses were expanding rapidly, and difficulties in getting adequate coal supplies tended to switch demand to other sources of heat and power. The real cause of the difficulty was that hydro-electric development had been neglected before the war. From 1936 to 1938 expenditure on hydro-electric development was far less than it had been at any time during the depression. Indeed, it was not until the war was well under way that depression expenditure was exceeded.

From 1930 to 1935, under the influence of the depression, power consumption in New Zealand had increased by only about 5 ½ per cent a year. It was, no doubt, this comparatively slow rate of growth in consumption which influenced the very conservative estimates which were then made about future power requirements, and led to the curtailment of development.

From 1935 to 1941, however, the increase in consumption averaged over 12 per cent a year. With curtailed expenditure on hydro-electric development, demand soon overtook generating capacity.

1 By the Phoenix Quartz Mining Company on the Shotover River. The first government hydro-electric station was at Lake Coleridge in 1915.

Faulty Pre-war Power Estimates

The reduced pace of hydro-electric power development in the pre-war years was no doubt attributable initially to faulty judgment of the 1932 National Expenditure Commission, which counselled strenuous opposition to any move for the commencement of further works.1

However, not all the blame can be placed on the National Expenditure Commission. In its 1935–36 annual report, the Electric Power Boards and Supply Authorities Association, in estimating requirements up to 1943–44, said:

‘The position in the North and South Islands respectively in regard to available generating capacity, installed plant and maximum demand for 1943–44 is set out in attached figures. From these figures it appears that the necessity for developing an entirely new (hydro-electric) scheme is remote.’2

Power supplies seem to have been sufficient at the outbreak of war, but with inadequate provision for expansion. By 1940 there were signs of impending shortages in the North Island, and in the following year rationing was frequently under consideration.

1 See also p. 47.

2 See also NZPD, Vol. 273, p. 99.

page 429

In March 1941 a Wellington daily paper reported:

‘The unlikelihood of electricity being rationed during the coming winter was mentioned by the Minister of Public Works, Mr Armstrong, during his visit to Napier when on his way to the Wairoa, Gisborne, and the Cambridge districts. He said the Minister of Mines, Mr Webb, was of the opinion that all the coal necessary for industrial and domestic purposes could be produced in New Zealand.

‘The rapid extension of secondary industries had created a demand for electric power that had never been anticipated, said Mr Armstrong. Only in years to come, when complete electrification of industry was accomplished, would the wisdom of the Government's decision to continue the Tuai1 scheme be appreciated.

‘Discussing Public Works policy generally, Mr Armstrong said that only works of national importance would be continued during the war. Manpower was the chief factor to be considered.’2

It is true that wartime requirements expanded manufacturing needs, but it is also true that hydro-electric expansion was not pushed forward fast enough in the pre-war years, especially when the possibility of war was apparent.3 When the danger was finally realised, it was too late.

A good picture of the overbalancing of surplus into shortage of power was given after the war by the Hon. John Robertson in a debate in the Legislative Council. He said:4

‘… We have made tremendous advances, but if we look at consumption since 1935 we find there has been an increase of 152 per cent. Why? Well, since 1935 the number of electric ranges has grown from thirty-nine thousand to one hundred and thirty-five thousand; the figures for water heaters are fiftythree thousand and one hundred and sixty thousand; milking machines with electricity as their motive power have increased from seventeen thousand to thirty-two thousand; and so it goes on. The total units generated have reached unprecedented heights, but that does not get rid of the fact that we are still up against a shortage. In the period 1938 to 1939 the demand for electric power jumped very appreciably, but it is fair to all parties to point out that at that time the number of generators that were in service to carry the increased load were quite ample, and, at

1 In 1939 a third generator of 20,000 kilowatt capacity was added to bring the capacity of the station to 52,000 kilowatts. Tuai was to be the control centre for the three stations of the Waikaremoana scheme, Kaitawa, Tuai and Piripaua. The Minister probably referred to the Tuai scheme in this broader sense. (Author's footnote.)

2 Dominion, 31 March 1941.

3 See also p. 46.

4 NZPD, Vol. 273, p. 99, 27 June 1946.

page 430 the same time, more plant was on order for the years ahead, for it takes some four years to construct a generating station. However, with the outbreak of war it became impossible to get that plant into the country, and with the demand for power all the time going onwards and upwards the State Hydro-electric Department was driven to every possible shift in order to increase its generation.’

As could have been expected, it was difficult enough during the war years to provide new plant for normal expansion, let alone to catch up on neglected pre-war expansion and to provide for special war needs at the same time. The first warning of pending power shortages had come in 1936, when the rate of increase in power consumption stepped up. Much of the wartime difficulty arose from tardiness in heeding this warning. A war had been threatening, but generating capacity had not been pushed far enough ahead of power needs to cope with the interruptions in hydroelectric development which war was likely to bring.

Wartime difficulties in power development should not be underestimated. The only criticism is that they were not foreseen. A recent writer1 said of the Cobb power station, ‘… Cobb did not come into operation until mid-1944, mainly owing to the shortage of men and materials during the war.’ Of Kaitawa he wrote, ‘Owing to delays in the delivery of machinery from overseas, due to the war, the Station did not commence operation until 1948’, and of ‘Tekapo, ‘Construction of the tunnel to convey water from the lake to the power station began in 1938 but was discontinued during the war and did not resume until 1946.’

1 N. M. Speer, The Electrical Supply Industry in New Zealand.

Early Restraints on the Use of Power

The need for restraint in the use of electric power became apparent in 1940 in the North Island. Demand, at times of peak loads, threatened to exceed generating capacity. Demand, moreover, was increasing rapidly with no prospect of any adequate increase in generating capacity.

In March 1941 the Electricity Controller asked supply authorities in the North Island to regulate their loads so as to keep their weekly use of energy to not more than 4 per cent above 1940. In the meantime, restraint on consumers would be by persuasion rather than rationing, but the Controller made it clear that whether rationing would be necessary or not depended on the amount of rain.

page 431

‘… However, this could not be foretold. The balance of power required above that produced by hydro-stations would come from steam-operated plants at King's Wharf, Auckland, and Evans Bay, Wellington.

‘Big problems were presented in the operation of these plants, particularly when running to full capacity, said Mr Kissel. An undertaking had already been given that the Evans Bay plant would be supplied with its needs of coal. King's Wharf operated on Waikato or Southland slack coal. A request had been made for an increase in slack coal production from 40,000 to 180,000 tons yearly. This was a great increase for any industry to face.

‘Though the Coal Controller made valiant efforts last winter and was able to meet the demand, Mr Kissel was a little apprehensive that he might not be able to do so in the coming winter. However, instead of 180,000 tons as estimated 6 months ago it was now believed that 130,000 tons might be sufficient. The rate of increase in the demand for electricity might still further drop. A 7 ½ per cent increase in the demand would mean that 127,000 tons would be required for King's Wharf. The Coal Controller, while giving no guarantee, said he could deliver this.’1

As a measure to save electric power, daylight saving, which normally concluded on the last Sunday in April, was extended throughout the winter, starting in 1941; and in May of this year the Electricity Controller arranged a radio campaign to persuade the public to economise in the use of power. By these means the supply authorities struggled through the 1941 winter without any serious breakdown.

In May 1942, following a spell of cold weather, the power situation in the North Island became serious, requirements being too high during the peak hours of 4 p.m. to 6 p.m., which took the brunt of the normal cooking load. This brought about the first statutory enactment against users, the Electricity Control Order 1942, which forbade the use of electric radiators and space heaters in business premises or places of amusement during these peak hours.2 To back up this measure the Factory Controller, on 24 June, issued an Order prohibiting the manufacture and sale of radiators and of practically all domestic electrical appliances.3

A ministerial statement on 11 June 19424 summed up the circumstances leading to these restrictions:

1 Reported in Evening Post, 7 March 1941.

2 The restrictions applied from Mondays to Fridays, in the North Island only.

3 The Electrical Appliances Control Notice, 1942.

4 Evening Post, 12 June 1942.

page 432

‘… In a joint statement issued last night the Minister of Supply (Mr Sullivan) and the Minister of Public Works (Mr Armstrong) said that the present position with regard to the supply of electricity from the Government system in the North Island had become critical. Due to the colder weather and the shorter days, demand for electricity had suddenly increased, and the generating stations in the North Island were working to full capacity. In addition to the hydro-stations, the fuel stations, large and small, were fully loaded at peak times, which at this time of the year were between 4 p.m. and 6 p.m.

‘“… It is also necessary that economy be practised in the use of electricity at all times,” added the Ministers. “A very large amount of oil is being used to generate electricity and this has to be imported, and this means the use of ships.1 Coal, which is required for industries and householder use is also being used at the rate of hundreds of tons a week. It is, therefore, incumbent on every user of electricity to avoid waste, and thereby help to avoid irksome rationing and interruptions in the supply of electricity, so assisting New Zealand's national economy under wartime conditions.”‘

For the winter of 1943, prospects for electrical supply were somewhat improved by the installation of the first generating unit of 20,000 kilowatts at Piripaua in December 1942.2 Despite a number of difficulties it was decided to allow supply authorities an increase in allocation of 4 per cent on their 1942 usage. But demand moved inexorably upwards and, with all stations becoming overloaded, further restrictions were soon necessary.

On the occasion of a temporary breakdown of one of the generating units at the Arapuni Station,3 the Minister of Works, Mr Semple, and the Minister of Supply and Munitions, Mr Sullivan, joined in saying, in June 1943: ‘The whole electrical generating system has been working under a severe strain, producing a very much higher level than the system could be expected to carry continuously. An appeal is made to everybody to economise in the consumption of electric power to the utmost extent possible so as to avoid the only alternative, which is the complete stoppage of

1 For example, the steam generating plant at Evans Bay used 26,000 tons of coal and 10,000 tons of oil in 1942. (Author's footnote.)

2 A second unit was installed in 1943, bringing the station to its full capacity of 40,000 kilowatts.

3 Arapuni had six units at the outbreak of war. Two more were added to cope with increasing demand during the war. In these years Arapuni was generating over half the North Island power supply.

page 433 power in some districts during certain periods of the day….’
black and white photograph of launching ship

the controller of shipbuilding speaks at a launching
Outstanding among the wartime economic controllers was Mr (later Sir) James Fletcher, Commissioner of Defence Construction and later Controller of Shipbuilding

black and white photograph of timber delivery

kauri for shipbuilding
A coastal scow delivers a cargo of kauri and other New Zealand timber

black and white photograph of ship construction

prefabrication speeds shipbuilding
Prefabricated keels of tow-boats ready for transport to an Auckland shipyard

black and white photograph of new tug boats

ships for the united states forces
Launching New Zealand built tow-boats, Auckland, August 1943

black and white photograph of pensioner working

plugging the manpower gaps
Many older and retired people returned to industry. An 83-year-old cutting metal for Army buckets

black and white photograph of woman working lathe

women in men's jobs
Engineering industries made munitions and a variety of essential

black and white photograph of dam

wartime hydro-electric development
The Karapiro Station, commenced in 1940, was continued under considerable difficulties during the war, but did not begin generating until 1947

black and white photograph of crowd

fund-raising campaigns
£242 million was raised by loans in New Zealand for war purposes

Restrictions imposed in 1943 and 1944 included reduction of radio broadcasting hours, metering of water heaters, and restrictions on non-essential lighting in shop windows and under verandahs.

Power shortages became progressively worse over the war years and in due course threatened to restrict the productive capacity of industry.

Chart 73 shows the increase in use of electric power for various purposes from 1939 to 1946.

chart of electricity sales

Chart 73
INDEX NUMBERS: BASE 1938-39 = 1000

Power Difficulties for Manufacturers

As shortages of electric power became more serious, it was necessary to restrain the increasing demands for power for industry. This was a ticklish problem of control. The war effort required increasing production and the establishment of new industries. It would be stultified if producers were starved for power. From 1943 the Factory Controller worked with the Electricity Controller, giving advice on priorities for the supply of power to new industrial page 434 machinery. Power Boards were required by an Electricity Control Order1 to get approval before connecting electricity to plant extensions or to new equipment. The position became especially difficult in Auckland, where the faster rate of expansion of population and industry aggravated supply shortages. It became necessary to weigh up the need for each new product against the competing needs for the scarce power the new installation would consume.

Increasing power shortage led to a very restrictive application of the Electricity Control Order, and the position became so serious as to lead, in April 1945, to a direct conflict between the Factory Controller's policy of increasing essential production and the Electricity Controller's efforts to conserve power. The Factory Controller complained that ‘Under existing conditions critical production is being hampered by the non-supply of power.’2

As a result of this clash, War Cabinet fixed an order of priority, with critical civilian production following immediately after New Zealand forces' requirements. However, the Factory Controller was still unable to get sufficient electric power and, on 26 June 1945, he asserted that ‘power is not available for some very important and critical civilian production which War Cabinet has directed should be regarded as second priority.’

As a result of the Factory Controller's representations, a rather more liberal policy was adopted towards the supply of electric power for those industries which were concerned with ‘critical civilian production’.

The centralised control over supply of power to factories ceased in November 1945, when the local supply authorities were authorised to issue permits for industrial installations at their own discretion.3

Restriction of power to domestic users was to continue in varying degrees until 1959 in the North Island and there would be restriction in the South Island from 1947 until 1957.

1 Amendment Order No. 1 of 22 November 1943 to the Electricity Control Order 1943 forbade Supply Authorities in the North Island, subject to any special directions given by the Electricity Controller, to issue permits for new or extended electrical installations for a number of specified uses.

2 Factory Controller to Minister of Supply, 12 April 1945. Copy on Industries and Commerce file 54/11.

3 Amendment Order No. 1 of 7 November 1945 to the Electricity Control Order 1945.

Belated Hydro-Electric Development

Deferred hydro-electric development showed its effects at a most awkward time. Some of the difficulties in extending and completing existing schemes have already been mentioned. The worsening supply position for electric power forced the Government to give page 435 priority to the development of new hydro-electric schemes during the war, when it was most difficult to find sufficient resources for even a fraction of normal development work.

In October 1943, the Government outlined a ten-year plan for electrical development, involving four new stations, to use almost the whole of the fall in the Waikato River from Lake Taupo to Cambridge. The four new stations were to be developed within the next seven or eight years. However, it was too much to hope that rapid development would be possible in wartime. Expenditure was stepped up after 1943, but not until 1952 would the addition of the giant Maraetai to the chain of Waikato stations enable many of the restrictions to be removed.

In the event, hydro-electric development was one of the few aspects of Government construction expenditure, apart from actual defence works, which showed a higher rate of expenditure in the war years than before the war. Even this high level of wartime expenditure was soon to appear moderate as the full impact of the accumulating demand for power made itself felt. What had appeared to be high expenditures in wartime were doubled, tripled, and quadrupled before generating capacity, in the late fifties, showed any sign of getting ahead of demand.

Government Administrative and Other Services

The task of administering the war effort and bringing about the necessary diversion of resources away from civilian use fell almost entirely on state servants who were responsible for carrying out the Government's policy.

Special wartime control procedures, rationing, manpower direction, bulk purchasing arrangements on behalf of the United Kingdom Government, defence construction, supply and a host of other new functions were administered by government departments during the war.

The Government became very active in promoting new industries which could produce supplies for war or manufacture essential civilian goods previously imported. Much war production was arranged on a contract basis, but the Government often supplemented this by actual participation. For example, the Department of Agriculture grew vegetables for the Services Vegetable Production Scheme and the railways workshops made munitions.

Formidable volumes of administrative work were involved in the defence construction programme, the shipbuilding programme, and the making of munitions by industries normally engaged in civilian production.

The greatest part of the burden of administering the stabilisation scheme fell on public servants, who advised on financial policy page 436 and carried out price, wage and cost controls.

Special war taxation, war loans and war expenditure all placed an extra load on government departments.

The intensity of the war effort necessitated government participation or influence in most economic activities, and comment on one or other government department is included in every chapter of this book.

In April 1939, 17,200 people were employed by the Government, apart from those in the Railways Department and the Post and Telegraph Department.1 Under pressure of extra wartime responsibilities, the number rose to 30,600 by April 1945. Long hours were often worked, and in many departments the regular working week had been increased to 44 or 48 hours by the end of 1942.

Over these years there was a very marked change in the quality of staff employed in the public service. In spite of several years of quite rapid expansion before the war to cope with the Labour Government's public works, housing, and welfare programmes, the public service was, in 1939, still predominantly a staff of permanent officers who had been recruited as cadets in their teens.

In 1930 a fifth of the staff had been temporary employees, but the need for rapid recruitments to cope with increasing government functions after 1935 had raised the proportion of temporaries to over a third by 1939. A much more sweeping change was to come. After six years of war, temporaries would outnumber permanents and make up 56 per cent of the staff.

Recruitment for the armed forces created difficulties in public service staffing, as it did in many other activities. By April 1942 6000 were serving, and the number rose to a maximum of 7400 in May 1943, when it represented more than a quarter of the total staff.

Extra staff had to be found, to make good losses to the services and for the wartime expansion of government activities. Generally the policy was to make temporary appointments as replacements for men in the services. The intention was to release these temporaries at the end of the war, together with those who had been required for the special wartime agencies. However, with the continued expansion of state activities, a fair proportion of them were retained.2

page 437

1 The staff in the latter two Departments were outside Public Service Commission control. Railways Department staffing was discussed in Chapter 15. Post and Telegraph Department staffing is discussed later in this chapter.

2 One of the problems facing the Public Service after the war was to find a satisfactory basis for absorbing into the permanent staff large numbers of temporary public servants who had been recruited during the war.

Women in the Public Service

The temporary staff included large numbers of women, many of whom had sought wartime jobs in the public service. The numbers of women in the public service, excluding a few on the permanent staff, reached a maximum of over 7000 in 1944. Some 5000 were clerical workers, the majority engaged to fill wartime vacancies. Many of these women had never before been in regular employment, and fewer still had experience in the type of work required of them in the public service. Generally speaking, they adapted themselves well. The incidence of sickness and other absences from work was much greater among wartime appointees than among other women employed in the public service, but this was in part explained by the fact that their average age was comparatively high and many were married with considerable domestic responsibilities.

Wartime experience, combined with the changed general employment situation, was to have a profound effect on attitudes to the employment of women in the public service. In 1939, 5 per cent of the clerical workers were women; by 1947 the proportion of women was to be 25 per cent.


In New Zealand almost all communications are the responsibility of the Government, and are administered by the Post and Telegraph Department. This Department also operates a Post Office Savings Bank and, because of its many branches, acts as agent for a variety of government transactions.

The Post and Telegraph Department lost some 6000 men to the armed forces, out of a total staff of 12,000. These losses were partly offset by the engagement of 4000 women for clerical work, telegram, parcel and letter delivery, driving and light manual work. In wartime the Department was called upon to provide communications facilities for New Zealand and United States military installations in New Zealand. Post offices also administered national savings accounts and handled a variety of other special war work, but there was a marked decline in some of the Department's normal activities. For example, the number of letters carried fell by 14 per cent from 1939 to 1945.

Local Authority Services

A general impression of the reduction in local authority activities during the war is given by the fall in numbers engaged. By March 1943, the numbers employed by the various local authorities had fallen to well under two-thirds of the March 1939 totals. Particularly hard hit were counties, which lost over half page 438 their staff in this four-year period. Boroughs lost over a third of theirs. Much of the county and borough staff had been required for road work, which tended to be deferred during the war.

Counties and boroughs were the most voracious users of government subsidies before the war and were, in consequence, most seriously affected by the Government's determination to divert a maximum of funds and manpower to the war effort. In 1938–39 local authorities received £2·4 million from employment promotion funds: £0·6 million of this went to counties and £1·4 million to boroughs. By 1943–44 only £110,000 was paid over to all local authorities, and, though counties and boroughs received the lion's share, their expenditures had to be severely pruned.

Commenting on these changes, a Local Government Committee wrote in 1944: 1 ‘The very large amount of these subsidies, particularly to territorial local authorities, is evident…. The falling off in recent years is due to war conditions. During this latter period, however, local authority capital works and much maintenance work have been at a standstill. The question of finance will emerge when the time arrives for recommencement both of capital and maintenance works.’

From another angle, this change in subsidy payments has already been discussed in Chapter 5. As was noted there, men previously in subsidised employment were absorbed into the armed forces or into normal employment; and there was a certain amount of criticism from those who thought the process was too slow.

Counties were also very dependent on main highways funds from motor spirits taxation, of which they received well over 90 per cent. Payments were by way of subsidy, normally at the rate of £3 for each £1 spent by the local authority. Receipts from this source fell from £884,000 in 1939–40 to £399,000 in 1943–44.

For development work on back-country roads, grants had been made from the Public Works Fund. Here again curtailment was severe. £1·3 million was paid over in 1938–39, mostly to counties; only £128,000 in 1942–43.

Chart 74 shows changes in local authority employment.

Compared with counties and boroughs, most other local authorities were comparatively well off for staff during the war. Electric power boards, for example, had 86 per cent of their 1939 staff still with them in 1943, and 82 per cent in March 1944, which was their lowest point. Power boards, however, carried an increasing load as the demand for power increased and it became necessary to administer rationing schemes to consumers.

Urban transport boards also carried an increasing load, as petrol page 439 rationing restricted the use of the private motor car and forced more people to use public transport. Their staffs had been reduced by only 7 per cent at their lowest point, in 1942.

Harbour boards, by 1943, had just a little over three-quarters of their pre-war staffs. Some of the effects of this on the supervision of waterfront work were discussed in Chapter 15.

chart of employment statistics

Chart 74

1 Parliamentary Paper I–15, Report of the Local Government Committee, p. 131.

Levels of Production

In spite of exceptions, such as railway transport and electricity supply, the general tendency was for services to the public and to industry to be reduced during the war, while the rate of production of commodities increased more slowly than in normal times.

Apart from hospitals and some of the special services already discussed, most services received comparatively low priority for manpower purposes during the war and, since service industries tend to be labour intensive,1 this usually curtailed their activities fairly effectively.

A number of service industries were declared essential, but

1 That is, they require a comparatively large amount of labour (and often a comparatively small amount of capital) to produce a given output.

page 440 generally they did not receive the degree of protection which was accorded to farming, coal mining, manufacturing and many other industries. There is no year to year record of the effects of manpower policy on the servicing industries, but an indication of their comparative lack of protection can be derived from records of the numbers withheld from service on occupational grounds.

In August 1945 there were still 21,600 Grade I men1 aged under 36 who were withheld from military service on occupational grounds.2 Only 7 ½ per cent of these men were in servicing industries,3 but these same industries normally employed no less than a quarter of the entire male labour force.

The National Service Department listed wholesale and retail trade, land and estate and other agencies, finance and insurance among industries which were not declared essential. Of the non-essential industries the Department wrote:4

‘These industries and services all play their part in the economy of the Dominion and in the life of our people, and have varying degrees of importance. It was not necessary, however, to grant them the protection of a declaration of essentiality, as in practically all cases the production or service could be curtailed if necessary without impeding the war effort. It was the aim of the Department throughout, in the administration of manpower controls in these industries and services to permit them, as far as possible, to maintain sufficient staff to continue to function economically and thus be in a position, after the war, to rehabilitate employees who had entered the Forces. The Department assisted these industries and services from time to time by arranging the release of home servicemen and home servicewomen from the Forces where such action was deemed to be warranted. Armed Forces Appeal Boards in dealing with appeals, also permitted the retention from military services of limited numbers of Category “A” men holding key positions and a more substantial proportion of non-Category “A” men.5 The engagement of part-time labour, married women, and elderly persons was a prominent feature of the employment situation in these industries and services during the war period.’

In spite of shortages of fuel and power, and the tendency for most services to be curtailed during the war years, an increased

1 Men medically fit for service.

2 Parliamentary Paper H–11a, Report of the National Service Department, 1946, p. 126.

3 For purposes of this comparison, electricity supply and transport and communications are excluded from services.

4 H–11a, 1946, p. 57.

5 Category ‘A’ men were those who satisfied the age, fitness and other requirements for overseas service. (Author's footnote.)

page 441 volume of goods was produced with the depleted civilian labour force.

Chart 75 shows changes in the volume of production of goods.

chart of production statistics

Chart 75

Production changes in particular industries have been discussed in other chapters. Manufacturing–production, supported by an increasing labour force, rose progressively from year to year, but farm production fluctuated and, though tending to increase, was largely responsible for the occasional downturns in total production of goods. Building and other production also fluctuated.

Between 1938–39 and 1944–45 manufacturing output increased at an average rate of 4 3/4 per cent a year, farm production increased at 2 1/4 per cent a year,1 while building and other production declined.2 Production of all commodities increased 2 1/4 per cent a year on average.

At first glance these rates of growth look poor by comparison

1 Dairy factories, freezing works and other industries processing farm products are included with farming, for purposes of this analysis. On pp. 177–80 they were left with manufacturing.

2 The building and construction industry lost ground, in spite of wartime pressure for defence construction work. See also Chapter 9, especially pp. 244–5, dealing with manpower.

page 442 with other periods. As indicated,1 the long-term rate of growth of volume of production of goods in New Zealand is close to 4 per cent a year. However, wartime production increases were achieved with a depleted civilian labour force; some types of materials and equipment were at times unprocurable, fuel and power tended to be in short supply, and many other services were restricted because of manpower scarcity. Taking these influences into consideration, the rate of increase in production was remarkably good.

1 p. 424.