Prime Minister Michael Savage addressing a meeting at the Orakei Pa. 6 January 1936.
Prime Minister Michael Savage addressing a meeting at the Orakei Pa. 6 January 1936.
Wally Hicks (August 29) is correct in one thing; in fact I believe he understated it. The first Labour government, elected in this country in 1935, could well be classed as the best one to take office ever, anywhere.
But it did not work by nationalising "the means of production,distribution and exchange" as per the definition of socialism.
It used Reserve Bank credit to break the slump here and to get unemployed people working. It used it to build much-needed houses, to finance some infrastructure and to subsidise some important primary industries. This allowed it to succeed where other socialist governments failed.
It didn't turn farms into state-owned disasters but helped the dairy industry with loans at 1 per cent and provided a guaranteed price for butterfat. Many farms of various types had remained just solvent enough by switching to some extent to dairying.
It provided milk daily for school children and apples during their season, which helped restore health to many city children and expanded the market for growers by that extent. I have been told, authoritatively, that there were 14 monetary reformers in the first Labour caucus. Michael Savage had obtained thousands of votes for his party with his statement that "Labour had no difference with Social Credit".
He had support also from Social Credit MPs outside his party such as Rushworth, Country Party, Bay of Islands and Atmore, Independent, Nelson.
However, Minister of Finance Nash attended the Bretton Woods conference that set up the World Bank and International Monetary Fund and came back so indoctrinated that he claimed, as reported then in the Herald, that he "no longer belonged to New Zealand, but to the world".
During wartime, the socialist wing of the party threw out the monetary reformers, by one vote, and the party began its decline to its present totally ineffective state.
It is sad that, these days, the strongest blocks to desperately-needed monetary reform seem to come from the socialist movement. Which also has played a strong part in writing our history, which is why these facts are little-known.
