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War Economy

The Need for Reserve Stocks

The Need for Reserve Stocks

Some wartime relief on the supply side was given by reserve stocks of essential materials built up before the war. However, this effect was comparatively small, most attempts to accumulate reserve supplies being frustrated by shortages of overseas funds in the immediate pre-war years. Moreover, stocks generally tended to be below normal when war was declared. In the circumstances, it was particularly fortunate for New Zealand that the expected severe interruption of overseas shipping did not in fact occur.

As early as August 1936 the National Supply Committee, in issuing its first industrial questionnaire to manufacturers, had said:1 ‘… we are working on the assumption that if a war occurs in Europe, or in the Pacific, the minimum effect will be severe interruption to our overseas shipping for at least three months. Our main problems are concerned with the essential imports and with the keeping up of the even flow of our exports in primary products. Prolonged interruption of seaborne trade would obviously have serious repercussions.’ Neither this survey nor the one which followed it in September 1938 yielded accurate information. Probably their main value was to keep manufacturers aware of the problem and to encourage them to build up their own stocks—to the extent that the Government's import and exchange controls would permit them to do so. Indeed, at its third meeting in October 1937, the National Supply Committee had decided that ‘the best way of keeping the question of the needs for adequate reserves of stocks before manufacturers is for the Department of Industries and Commerce to maintain a constant personal contact; and this duty should be definitely assigned to that Department.’2

Certainly the questionnaires do not seem to have been of much direct use for any other purpose. They did not lead to any substantial remedial action by the Government and, in wartime, when page 109 the Factory Controller came to place orders for production, he found the manufacturers' replies to the surveys unsatisactory as a basis for the allocation of orders. New inquiries had to be made in each case.

1 Copy on Industries and Commerce file 55/8.

2 Quoted in memorandum from Permanent Head, Industries and Commerce Department, to Secretary, Public Service Commission. On Industries and Commerce file 55/8.