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War Economy

The People at War

The People at War

It was inevitable in time of war that freedoms would be lost and people would have to suffer a reduction in living standards. The much reduced supply of goods would be distributed equitably only if very great care was taken.

The surprising thing was the smoothness with which sweeping economic adjustments were made, and the readiness with which they were usually accepted. A number of exceptions have been noted, for example the scrambles, on occasions, to get possession of scarce supplies of a particular commodity. These were usually of short duration, and the practice of queueing for supplies did not reach unreasonable proportions in New Zealand. These facts, put against the background of increased incomes, a large reduction in the per head availability of goods, and comparatively stable prices, must stand as a tribute to those who were responsible for the organisation of rationing and marketing in New Zealand. They are a tribute, also, to the tolerance of the New Zealand consumer.

Services as well as goods tended to be in short supply. Electricity and gas shortages were discussed in Chapter 16. Delivery services of bread and other commodities were eliminated.2 Most other civilian services were hampered by shortage of labour.

Apart from the effect of petrol rationing on private motoring, travel became more difficult. Train services were restricted from May 1940 and, when the coal shortage worsened, permits were required for a time to travel more than a certain distance.3 The problems created for the railways by uncertain coal supplies, and the extra military load they carried were discussed in Chapter 15.

Most health services had been newly taken under the social security scheme, and were used more intensively than before the war. Hospital and maternity benefits had been introduced in 1939. page 480 Some medical benefits followed in March 1941, pharmaceutical benefits in May 1941 and a general scheme of medical benefits in November 1941. At this stage, most people received free medical attention, hospitalisation and prescriptions. Some hospitals and doctors might charge the patient more than the fee allowed under the social security scheme, but, in the early years, few people were asked for these extra charges. With the resulting increase in use of hospitals, coupled with the increasing shortage of labour of all kinds, hospital staffing became one of the most difficult manpower problems.

Many people who, because of wartime shortages, were unable to buy the things they wanted, set aside their money for use when goods and services became available. Savings bank deposits had changed surprisingly little in the twenty years 1921 to 1941. In the former year there was £43 million to the credit of depositors and in March 1941 £63 million. Then savings began to increase rapidly, and the amount to the credit of depositors had doubled by 1945–46. During the war years some £65 million of funds was transferred from private to government use through Post Office Savings Bank accounts. In addition, the people had, by March 1946, contributed as savings nearly £27 million through National Savings accounts which first became available in 1940, together with £11 million invested in National Savings Bonds, quite apart from contributions to War Loans.1

Thus did the people accept reduced living standards. Many other wartime sacrifices were required of them. Even conscription and direction into industry were widely accepted, when the time showed them to be necessary. Reasonable equality of sacrifice was all that was asked by most people, and, apart from one or two groups which seemed to be naturally militant, it was only when major inequities seemed to be emerging that any large body of people showed reluctance to meet the demands of a war economy.

2 Milk deliveries continued but were zoned.

3 Over 100 miles in the North Island from July 1942 to January 1943 and over 50 miles in either island from January 1944 to September 1944.

1 See also Chapter 10.