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War Economy

Stocks at the Outbreak of War 1

Stocks at the Outbreak of War 1

In spite of all the delays and hindrances, stocks of some vital raw materials sufficient to last for several months had arrived in New Zealand when war broke out and had been taken into reserve.

Among the major items in reserve were 2000 tons of corrugated roofing iron valued at £60,000. This was imported by the Ministry of Works and specially stored at Trentham. A similar quantity of other stocks was in the country, but the total was below normal holdings.

The import of woolpacks, corn sacks and other jute goods was facilitated by waiving import licences and by specially arranged sterling funds. As a result the stock position was good when war began.

Fertilisers in a primary producing country are vital items in peace or war. Some reserves were laid down. About 80,000 tons of rock phosphate was stored at the eight phosphate works, equivalent to about a quarter of a year's supply. Sulphur and other chemicals to the value of £100,000 were also stored at works throughout the country, and probably represented on average rather less than a quarter's supply.

In anticipation of difficulties in obtaining supplies of cream of tartar2 the principle importers were encouraged to import 200 tons at a cost of £20,000. Arrangements were also made to import and store 15,000 tons of raw sugar valued at £150,000.

The importing of 7000 tons of gypsum rock, essential in the manufacture of cement and plaster, was financed by several cement companies. This was equivalent to about six months' requirements.

The Government arranged that a reserve of rubber and associated chemicals to the value of £35,000 should be laid down, the Government meeting the cost of interest on £25,000. However, because of high ruling prices just prior to the war, only half the reserve had been established before war began and no further purchases were made until about mid-1940.

In the year prior to the outbreak of war the Wheat Committee, on the advice of the National Supply Committee, took precautions to ensure the maintenance of milling and baking facilities in the event of emergency. Arrangements were made with the flour millers to carry additional stocks of wheat at no cost to the Government. Wheat could be bought in Australia during 1939 at the low

1 See also pp. 11117.

2 The raw materials came from Germany, France, Italy and Spain.

page 39 price of 2s. 4d. per bushel1 and it was intended to import as much as could be shipped and handled. This programme was almost completed when war broke out, with the result that the millers had sufficient wheat in store until the end of May 1940 without using any of the 1940 crop.

New Zealand was completely dependent on overseas sources for petrol. Moreover, at the outbreak of war her supplies depended partly on cargoes carried in foreign-owned tankers, the British tanker fleet being unable to supply all New Zealand's needs and meet other requirements.

From 1934 to 1939 the annual consumption of petrol in New Zealand had risen by nearly two-thirds from 64 million gallons to just on 100 million gallons, due mainly to the rapid increase in the number of private motor cars. Requirements for private cars accounted for approximately 53 per cent of all petrol imports in 1939. Because of this high demand it was normal to carry fairly substantial stocks, ranging between 25 and 30 million gallons.

Stocks at the outbreak of war totalled 28 million gallons, equivalent to 31/2 months' usage, which was not much more than a normal stockholding. With expected extra war demands and future supplies uncertain, it is therefore not surprising that petrol was the first commodity to be rationed, control coming into force on the day war was declared.

It must not be imagined from these special arrangements that stocks generally were adequate when war broke out. Shortages of overseas funds had more probably brought the overall level of stocks to well below normal requirements, which for many industries would be a quarter or more of annual usage.

For the most part any specific precautions against a break in supplies were made by importers or manufacturers themselves acting in their own interests and often fighting against the effect of the Government's import controls. Many of the above items are just interesting exceptions and, even where special arrangements were made, they were not always sufficient to bring stocks back to normal levels after they had been run down by importing difficulties.

1 The price of 2s. 4d. per bushel is taken from War History narrative 90/2. The section on wheat and flour control was ‘written in War History Branch and corrected and supplemented by R. McPherson, General Manager, Wheat Committee ….’ The price of wheat from Australia was 4s. 4d. per bushel from November 1937 to March 1938, but then fell progressively to 2s. 6d. in November 1938 and by August 1939 had receded to 2s. 1d. per bushel.—Commonwealth of Australia Official Yearbook, 1940, p. 365.

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