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which exported and those which supplied the local markets at the prescribed price. 1

In June 1918 the Board of Trade arranged with the Colonial Sugar Co. for the supply of sugar (No. zA) from Fiji to the New Zealand market at a price of 21 per ton f.o.b. Auckland till June 30 1917. The price was afterwards increased to 22 ics. and remained at that figure till the end of the war. Even after a later increase had brought the price up to 23 155. for the nine months ending March 31 1920, it was believed to be the lowest then being paid anywhere.

In its report issued in Sept. 1917 the Board of Trade expressed the opinion that probably 90% of the population had benefited to some extent by the prevalence of war-prices, even after allow- ing for depreciations in the purchasing power of the sovereign. The extra millions that poured into the Dominion through the appreciation of its produce were, of course, a great boon to the country as a whole, but the rise in retail prices was naturally more clearly perceived. The increase % in the prices of the three principal food groups for the month of July in each of the six years over the prices prevailing in July 1914 is officially estimated as follows: 1915, 12-15; 1916, 19-25; 1917, 26-82; 1918, 39-35; 1919, 43-85; 1920, 67-38. The rapid advance between July 1919 and July 1920, which almost equalled that of the first three years combined, was fully maintained during the following five months, the figure for Dec. 1920 being 78-97, but there was afterwards a slight decline. On Feb. 15 1921 the increase of food prices over the level of July 1914 was 75-05%, as against 149% for the United Kingdom on March i. During the six months ended Feb. 1921 the cost of living, as measured by the prices of food, rent, fuel and light combined, showed a rise of 59-S2% above those of the six months before the war (Jan.- July 1914). There was little economy during these years except what was involuntary. The amount invested by the public on the totalizator at the race meetings rose from 3,538,188 in the racing year 1012-3 to 8,788,788 in 1919-20. The expenditure on alcoholic liquor, which was 4,137,653 in 1913, amounted to 7,587,229 in 1920.

Another of the instruments by which the Government sought to deal with the cost of living was the Court of Arbitration. Established for the purpose of adjudicating upon industrial disputes which the machinery of conciliation had failed to com- pose, this tribunal had tended more and more to the position of a court of first instance dealing with questions of wages. It was at first suspected by the employers and afterwards hated by a large section of the workers, and in recent disputes it has sometimes been ignored by the Government itself in favour of special tribunals. The war kept the Arbitration Court busy with applications for increased wages, but it did not always pass the whole burden of increased prices on to the employers, and the miners, who stood outside the Arbitration Act, could boast of a 27% increase in wages, while unions which relied on the court had to be content with 10 to 15%. The president (Mr. Justice Stringer) said that " the court raised wages in sympathy with the cost of living and after a year found that the wages were farther off than ever from being in correspondence with the increased cost of living. The court also realized that there must be a limit to the amount paid in wages, especially in a community competing with other countries." Nevertheless an Act passed in Dec. 1918 empowered the court to review cur- rent awards and directed it in so doing to take into consideration any increase in the cost of living since its last award. This enactment the court accepted as a mandatory instruction, in the absence of any countervailing consideration, to raise wages in correspondence with the cost of living, and the subsequent applications for bonuses have been determined on figures sup- plied by the Government statistician. In short, " as has been said, the court now considers that its main function is the main- tenance of real wages." Parliament passes on to the Arbitra-

1 In 1920, when the Imperial Government had offered 2s. 6d. per Ib. for the coming season's butter, Parliament voted 600,000 to enable the producers to supply the local market at the retail price of 2s. 3d.

tion Court a task which is beyond its power and the court won- ders that Parliament, which has the necessary power, does not take on the work itself. In 1920 Parliament withdrew its man- date and gave the court a discretion in the matter, but it has not yet found the cure for profiteering.

End of Coalition Government, igig. Mr. Massey and Sir Joseph Ward, who had left the Dominion on Dec. 12 1918 in order to represent New Zealand at the Peace Conference, re- turned on Aug. 6 1919. Parliament had been summoned for the 28th. The question about the coming session, which had excited the keenest interest, was determined a week in advance by the resignation of Sir Joseph Ward, promptly followed by that of all his Liberal colleagues. Formed on Aug. 12 1915, the National Government had come to an end on Aug. 21 1919. The news was received with deep regret by independent men, who feared that the division of the constitutional forces and the general unrest and discontent would give revolutionary la- bour a unique opportunity. But the enthusiasm of the Liberals, whose fighting men had long been chafing under the restraints of the Coalition, was unmistakable. The fulfilment of the pur- pose for which the National Government was formed was the reason given by Sir Joseph Ward for his action, but he also complained that he had not been properly consulted.

Mr. Massey's position was one of great difficulty. Within a week of the session and within four months of the general elec^ tion he had to form a new party Cabinet and, with no assured majority, make a start with the work of reconstruction. But he faced the position boldly, and emerged from the session not only with his new Cabinet unbeaten but with a large number of useful measures to its credit and with his own prestige as a leader much enhanced. Apart from this personal success, the striking features of the 1919 session were, first, Sir James Allen's budget (Sept. 23), which provided for an ordinary ex- penditure of 22,441,057 and loans totalling 30,325,000, all but 1,000,000 being for the benefit of discharged soldiers and which gave a genuine earnest of economy by reducing depart- mental expenditure outside the Education Department by 400,000; and, secondly, the unfortunate party competition of which the soldiers' gratuities became the subject. The Govern- ment proposal amounted to is. 6d. per day, the Liberal leader proposed 25., and the Labour party 45. The competition illus- trated in a striking way the dangers which a non-party control had averted during the war, but the fear that it would be re- newed on the hustings was not realized. The Government's proposal, which involved an expenditure of 6,050,000, was carried, and the question was not reopened.

In the campaign which followed the rising of Parliament on Nov. 5 1919 the dividing line between the Reform party and the Liberals appeared to be more arbitrary than ever. Except that the Liberals advocated a state bank, 'the nationalization of coal-mines and flour-mills, and proportional representation subjects in which the electors displayed no great interest there was little in the generalities of either programme that might not as well have been in the other. Labour, on the other hand, was in the field with a thorough-going programme of nationalization and socialism, and under leadership which in- spired more distrust and alarm than the programme itself.

The Rise of Labour. For the first time since it had helped the Liberals to victory at the general election of 1890, Labour had become a really formidable force in New Zealand politics, and it was now both independent and revolutionary. In July 1913 negotiations for reconciling the antagonism between the old trade-union ideals and methods and those of direct action and class warfare had resulted in the prefixing of " United " to the title of the Federation of Labour, with a constitution which left the burning question of registering under the Arbitration Act to the option of each union. But the result was in the main a triumph for the revolutionaries, nor was their power more than temporarily checked by the crushing defeat of their policy in the great strike of 1913. Through varying phases of organization they gained steadily throughout the war at the expense of the moderate elements. A notable development on the industrial