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War Economy

The First Few Days of War

The First Few Days of War

NEW ZEALAND declared war just before midnight on 3 September 1939 and ‘in the early hours of Monday morning, 4 September, the Organisation for National Security and its associates had the strenuous, but rather satisfying, task of operating the newly finished War Book’.1

Already a state of emergency had been proclaimed on 1 September and the first group of emergency regulations had been made on 1 and 2 September. Included with the most urgent military and security powers were economic measures to prevent profiteering.2

A quick succession of regulations followed, giving the Government wide powers of economic control. Emphasis is placed in this volume on regulations of particular economic significance. A more general picture of the flush of emergency regulations is given by Professor F. L. W. Wood in a companion volume.3

Of the War Book and its use, Wood writes: ‘Under test the machine worked well. There were enough loose ends to provide a moral for the future: contingencies inadequately provided for on the one hand, and on the other, the inveterate tendency of Ministers and departments to work independently of one another and to appeal direct to cabinet, thus imperilling a hard-won co-ordination.’4

While pre-war economic action was, in many directions, inadequate, the very short time needed to make a wide range of regulations affecting the whole economy was a measure of the

2 The Price Stabilisation Emergency Regulations 1939.

3 The New Zealand People at War: Political and External Affairs.

4 Ibid., p. 97.

page 55 effectiveness of pre-war economic thinking. In fact some excellent inter-departmental committee work had been done in assessing economic requirements in the event of war, but pre-war action was held back, particularly on the manpower and supply sides, by the Government's failure to give any decisive lead.

It has been said that, ‘In its simplest and most abstract terms the general economic problem of war is one of securing the necessary supplies’.1 This applied with particular emphasis to New Zealand, where wartime disruption of shipping might easily accentuate supply difficulties. If there was to be a complete shipping blockage, as many people expected, the measures taken to safeguard existing stocks of vital materials would determine the number of weeks the economy could continue to function without a major disruption. Control of supply was, therefore, a very high priority, and on 4 September it received attention.2 Provision was made for Controllers, under a Minister of Supply, with wide powers to restrict or direct the movement of goods. On the same date oil fuel, one of the most vital commodities in war or peace, was rationed,3 while detailed supply arrangements were made for sugar, wheat and flour.

Powers over supply and use of materials were also to be given to other Controllers, whose primary interest was in production in specified groups of industries—a dual control of supply which was inevitably to lead at times to confusion and clashes.

New Zealand was to suffer wartime shortages which were in many cases aggravated by failure to make early or adequate provision before the war for the accumulation of vital reserves. On the other hand, in those cases where stocks had been built up, the relief provided by their judicious wartime use amply justified any pre-war sacrifices involved.

1 Elliott and Hall, The British Commonwealth at War, p. 257.

2 The Supply Control Emergency Regulations 1939.

3 The Oil Fuel Emergency Regulations 1939.