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War Economy



For most of the early years of the war New Zealand was hopelessly short of munitions. The reluctance of the Labour Government before the war to indulge in warlike preparations, accentuated, from page 135 1938, by shortage of funds, gave her a most unfortunate start. By about 1938, also, it was becoming difficult to find munitions suppliers in the United Kingdom, as producers there became preoccupied with orders from their own Government. The rapidly expanding Australian productive capacity filled a few gaps, but, here again, there was considerable pressure of domestic requirements, leaving little over for a neighbouring country. Some early assistance was obtained from the United States, but imports from this source had to be restricted as dollar funds ran short. Ultimately, from late in 1942, United States Lend-Lease arrangements enabled imports to be stepped up.

In the meantime New Zealand manufacturers had demonstrated their ability to provide a substantial portion of the requirements of some types of munitions. In the main, however, New Zealand remained dependent on overseas sources. The fact was that, while New Zealand was in a position to train troops and to send them overseas in uniform, if it could be assumed that most munitions would then be supplied to them from other sources, she was not in a position, either from her own manufactures or from what she could import, to supply adequate munitions for her own armed forces either overseas or in New Zealand.

Speaking of the position in March 1942, Wood says:1

‘At this stage New Zealand was pressing primarily for aircraft and for equipment for the army…. It was painfully clear … that New Zealand was utterly dependent on her overseas friends for equipment. Quite apart from her basic industrial weakness, the deliberate policy in the early days of the war had been to rely on overseas supplies.’

Nevertheless the contribution made to munitions production by New Zealand manufacturing must not be under-emphasised and Wood recognises it. An interesting outside viewpoint on this contribution is given in the following extract from a United Kingdom war history:2

‘In volume, New Zealand's total munitions production was only a fraction of Australia's, and its character and function were altogether different. The aim was not self-sufficiency in a wide variety of equipment, which would have been quite impracticable, but rather a surplus of a few stores selected as particularly suitable for production in a country with very limited industrial experience or equipment. In New Zealand there were no government ordnance factories, and the nearest approach to a specialised munitions firm was the Colonial Ammunition Company, which

2 H. Duncan Hall and C. C. Wrigley, Studies of Overseas Supply (United Kingdom Civil Series, History of the Second World War), p. 484.

page 136 made .303-inch ball cartridges. Apart from this, munitions production was made possible only by the fact that the General Motors, Ford and Dominion Motor Companies had established automobile plants which could be used to assemble components made in the various small workshops that constituted New Zealand's manufacturing industry. This, incidentally, was a system which called for very skilled direction at the centre. The problem for the Dominion Government, the Eastern Group Supply Council and the United Kingdom Government was to make full use of New Zealand's assets, especially her very intelligent and adaptable labour, without using too much shipping space in the bringing in of raw materials, components and machinery and without setting the country to do what could be done elsewhere more economically. In other words it was necessary to find stores, the manufacture of which was within New Zealand's capabilities and which would yet be of real value to the Commonwealth as a whole.

‘Unfortunately, during the first eighteen months of war the solution of this problem was left almost entirely to the New Zealand authorities, who made arrangements for the production of small arms ammunition, tracked carriers, mortars, mortar bombs and hand grenades. This was unfortunate, not because the selection was unsuitable or because any opportunity of securing supplies for the United Kingdom was lost—during this period New Zealand was fully occupied in meeting her own requirements—but because this production was not at first fitted into the general scheme of Commonwealth supply. The Ministry of Supply did not take full cognisance of New Zealand capacity until the spring of 1941, when the country was visited by a section of the Roger Mission, and by that time an adequate supply of many of the stores which New Zealand could produce had been arranged elsewhere. Hand grenades were a case in point. At the time of the Mission's visit the initial New Zealand Government order for 200,000 grenades was nearing completion, and in default of external orders the makers would soon have had to be allowed to revert to civil production. But there appeared to be no general scarcity of grenades, and the most London could offer was an order for the negligible quantity of 25,000. As it happened, however, the difficulty was solved by an unforeseen increase in War Office requirements later in the year, which enabled the Ministry of Supply to keep New Zealand grenade makers busy for years to come; and much the same applied to the other stores mentioned above, in each of which New Zealand became one of the leading Eastern Group producers. Dependence on imported components, however, page 137 made the manufacture of any but the simplest munitions a precarious business. For instance, once the production of Universal carriers had developed in North America, there was clearly very little to be said for shipping components thence to be assembled on the far side of the Pacific, and New Zealand production accordingly came to an end in 1943. Similarly, a venture into the radio field proved somewhat unfruitful. In December 1943, the Ministry of Supply asked New Zealand authorities to supply 15,000 sets, but owing to delays in the supply of American components only 7,170 were ever produced,1 and those so late that no outlet could be found for them.

‘It was no mean achievement on the part of New Zealand to have produced a sizeable export surplus of carriers, 2-inch mortars, mortar bombs, hand grenades and small arms ammunition in addition to meeting her own needs of these and some other stores, including 3-inch mortars and Sten guns. Still more remarkable, however, were her achievements in aircraft production, though limited to propellers,2 and in shipbuilding, which resulted in the completion of a dozen minesweeping trawlers and a number of smaller craft. Many things were done in New Zealand during the war which had never been done before, such as the production of precision instruments and the operation of the complex automatic machines used in the manufacture of fuses.’

New Zealand's main economic contribution to the allied war effort was as a supplier of food. Though she remained, throughout the war, dependent on overseas supplies for most of the munitions she needed, it was no small achievement for the country, with food production to keep up and with so little munitions production before the war, to have made the contribution she did to allied supplies of war equipment.3

1 Sic. According to New Zealand records 14,589 sets were delivered to the Defence Service Provision Office for shipment.—War History narrative 90/2, p. 39, and Industries and Commerce file 48/8/78. See also p. 168, note 1.

2 Not limited to propellers. See also Chapter 7.

3 Munitions making is also discussed in Chapter 7.