NEW ZEALAND: Savage Trouble

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One day in 1932 a mob of unemployed New Zealanders poured down Queen Street, Auckland, smashing windows, looting and hooting. Three hundred were arrested, 130 wounded, $500,000 worth of property ruined. One day last week a less unruly but no less discontented mob—this time, businessmen—poured into Auckland to apply pressure in their own ways. The 1932 mob wanted things they had no money for; last week's mob wanted the right to buy things they had money for. In that turnabout was summarized the New Zealand revolution of the last three years.

New Zealand is not only breathtakingly beautiful but socially remarkable. Her history has been marked by long and clear-cut periods of alternate radicalism and conservatism. Between 1890 and 1912 a progressive Government passed graduated income taxes, woman suffrage, labor regulation and old-age pension acts, and other laws which were models for liberal legislators elsewhere. The way the Maoris were treated—today they are the only Polynesian people who are increasing—was and is a criterion for other governments with native problems to follow.

In 1912, riding in on a wave of prosperity, conservatives took over New Zealand, and though the Labor Party periodically showed its head (there were serious strikes in 1913, 1916, 1921-22), dominated politics and policies for the next 23 years.

At the head of New Zealand's Government when the world depression hit bottom in 1931 was Prime Minister George William Forbes, whose favorite cry was "Stabilize the Budget." He helped to stifle the 1932 Auckland riot with British bluejackets from H. M. S. Philomel and with 1,200 special constables swinging brand-new truncheons. His helplessness in the face of continued depression made him unpopular, and in 1935 the Laborites got a majority and a Prime Minister—a stocky, alert, pudgy-faced farmer's son named Michael Joseph Savage. Before becoming Prime Minister he had been a messenger boy, dam-laborer, miner; after he became Prime Minister, other things shook New Zealand besides earthquakes.

Under Michael Savage the Government took over, by a series of socialistic laws, direct control of railroads, broadcasting, reserve banking, iron and steel output. Wages were jacked up, hours cut. Unionism was made compulsory. Rising prices were checked. Last September Prime Minister Savage said there was plenty more to be done if New Zealanders wished to do it. An October election gave him the mandate, whereupon he at once originated the program which had businessmen so perturbed last week: exchange control.

In effect, the plan was to improve the balance of trade (difference between exports and imports) by reducing imports. Applied in practice for the first time fortnight ago, exchange control appeared virtually to bar all imports from Japan (perhaps in retaliation for Japan's refusal to buy New Zealand wool), and cut other imports from 20% to 80%. British imports were cut least. The policy had the same effect as extremely high tariffs, except that restraining pressure was put on local importers rather than on foreign businesses.