Transcript The Long Depression

The Long Depression
“The Hungry 80’s”
The Hungry 80s
Read H/out and add notes
• In 1878, the Bank of G___ went B___ and credit
to NZ was cut by ____
• Prices for our ___ fell in G__ B__ due to over
___ & c___ between ___
• Farmers did not buy which had flow on effects eg_____ this led to increased bankr___
• By 1886 the d___ had spread to the NI and
between 1885- 1892 1___ people left NZ
•
What Caused the Long Depresssion-
Historiography
• Vogel was made scapegoat for the depression by his
contemporaries and by some historians – eg Condiffe (1959) and W
Sutch (1966)- assumed that b____ got ___ and created the d
• R___ D___ (1986) disputes this, she argues that Vogel was just
fulfilling the expectations of the settlers
• Gary Hawke (1985) agreed with Dalziel and argues that Vogel didn’t
create a catastrophe, but instead created an ec__ Infr__ __ ___
opportunities
• Vogel’ borrowing may have made it worse, but there was a world
wide depression
• N Z Suffered because it was vulnerable to___ & dependent on BR
• Major trigger 1878- City of G___ co___
• Bankers also to blame
Symptoms of the Long Depression
p 68 and 284-285
• List the immediate effects and copy the
diagram
• Read the swaggers account
Was it Really and Economic
Depression
• Hawke says- p68
• Income was st___ rather than a decline
• We would now see it more as a recession rather
than a depression
• Hawke argues that 19th c writers used the word
depression to refer toa fall in prices or exports
rather than a the modern sense of a decline in
real incomes
• Today we may even view such an event as a
period of economic restructuring
How Long was the Long
Depression?
• It is usually considered that it lasted from 1879 – 1896,
however there were regional variations. The South Is
was hit hardest because of the collapse of wool prices
and the major lenders to the wool farming sector.
• However the Nth Is timber helped to boost the Auckland
economy through demand for timber for building in Auck
and Well. Quartz mining offered employment and long
term economic growth
• Some areas such as Taranaki and Waikato were
depressed anyway-as a result of war so they didn’t
notice a downturn
• The Nth Is responded readily to opportunities
refrigerated shipping presented in 1882- meat and milk
products could be transported to markets in Grt Britain.
Abolition of the Provinces
1876
• Despite their influence in politics the
provinces were gradually losing their
reason for existence
• Examples– Central govt took over immigration and public
works
– Communications had improved
– - others –add from h-out
Abolition of Provinces- Context
• Six autonomous federal units set up in
1852 were failing to thrive- 3 SI, 3 NI
• 1874- 5 Vogel scheme- increased
immigration and signif development of
infrastructure & communications
• Economic depression in 1860’s – esp in
North I- result of the wars
Factors Contributing to Abolition
• Provinces too small to raise sufficient $ to develop the
colony as a whole
• Provinces failed to deliver on the promises of the
Wakefield scheme, public works, immigation etc
• Provinces became obstructive of cental govt- e.g.
plantations for investment
• It was thought that a united country would be able to
raise loans than provinces
• Vogel scheme depended on united effort to encourage
investment and immigration
• Gold had run out timber was disappearing, wool prices
were low. Central Govt input was necessary to inject
money and labour into the economy
Forest Conservation Scheme
• What did this have to do with the abolition
of the provinces?- See H-out- make notes
Consequences of the Decision
• Improved economy
• Central govt now dominated all aspects of NZ life,
economics, social and political
• Increased borrowing overseas enabled land buying,
surveying and development
• Increased immigration addressed gender imbalance
• Trade business, landholding and mining became more
regulated
• Transport and communication infrastructure improved
(roads, bridges harbours and railways)
• Franchise was extended to all Pakeha men 1879
Contemporary and Historians
Views
• Major Harry Atkinson of Taranaki was critical of
Vogel’s public works policy
• Sir George Grey came of retirement to fight for
the 1852 Constitution- a staunch opponent of
centralised government
• The southern towns opposed centalisation
believing the north would live off the fruits of the
labour of the SI
• Atkinson’s government decentralised
expenditure but centralised borrowing- thus
encouraging ‘porkbarrel politics’ (Bassett 1975)
The impact of the ‘Long Depression’ from 1879 to 1900.
-The nature of the situation
• Depression resulted from the overproduction of
wheat in North America and Australia, which
affected British agriculture, and then in turn the
New Zealand economy because of its
dependence on Britain.
• Bankruptcy, especially amongst big businesses,
and Auckland merchants once the effects of the
depression reached the north
• Drying up of investment capital as investors
moved money to South America
• Suffered particularly because of heavy
borrowing in 1870s
• Did not take up real opportunities of refrigerated
shipping until the 1890s
• Unemployment rose to at least %10 of male
workforce; lead to despondency, migration and
probably an increase in the crime rate
• Migration to Australia exceeded immigration
• Poverty and poor housing
• ‘Larrikinism’/juvenile delinquency
• Drunkenness
• Prostitution
Ways in which the situation changed
over time and influenced people
• Government responses were minimalist apart from
retrenchment (public expenditure was slashed),
introduction of a low tariff to encourage manufacturing,
experiments with Village homestead settlements and
providing easier access to small runs. These efforts were
brought about by the ‘conservative’ Hall and Atkinson
governments.
• Pensions, national insurance and assistance to small
settlers were considered by Atkinson but little was
achieved.
• Stout-Vogel government overhauled welfare policy in
1885 providing limited state assistance
• The Liberals attempted to do much more, especially for
small farmers
• Breaking up of the great estates
• Department of Agriculture set up in 1892 to regulate
agricultural practice
• Advance to Settlers Act (1894) provided cheap credit to
family farmers
• Department of Labour increased control of working
conditions and aimed to reduce unemployment
• Resumed borrowing in 1893 to try to stimulate economic
borrowing
• Improved the legal rights of women eg fairer divorce
laws and franchise bills introduced in the 1880s
• Responses to social issues came more from individuals,
such as Robert Stout’s attempts to deal with Larrikinism,
or from organisations such as the Salvation Army and
Women’s Christian Temperance Union (WCTU).