Although the war itself did more than any other event to stimulate manufacturing in New Zealand, the economic circumstances and the trend of events from 1935 to 1939 had raised its importance. The number of factories grew from 5,270 in 1934–35 to 6,146 in 1938–39; factory employment rose from 79,358 to 102,365 in the same years; and the value of output rose from £79,000,000 to £114,000,000. This was the basis for the further development during the war.

The changing circumstances resulting from the war forced New Zealand to aim at maximum practicable self-sufficiency in manufactured goods. But the expanded industrial activity had to be related to the existing type of economy, to the raw materials and capital equipment reasonably available, and to the skills already developed. The following list of goods produced in New Zealand for the armed forces during the war shows the relationship between war and peacetime economy, though the items listed show the rudimentary state of manufacture.

Twelve million yards of serge, woollen, and flannel cloths; thousands of blankets, jerseys, and cardigans; underclothing, hosiery, uniforms, shirts, and footwear; 1 million battledress suits; 1 million or more field-service caps; nearly 300 million rounds of ammunition; trench mortars and bombs; H.E. bombs and fuses; aircraft practice bombs; fuses; grenades; antitank mines; chemical land mines; sten guns; automatic rifles; radios and equipment; earthmoving equipment; hospital beds; field and canteen equipment – water bottles, helmets, and shovels, etc.; boilers, tools, electrical accessories, fire extinguishers; jacks, pumps, lubricators, concrete mixers; about 300 vessels – mine sweepers, 1,000-ton steel barges, 45-ft wooden tugs.

Moreover, unemployment had disappeared, more married women were working, overtime was general, and incomes were high. This, with the shortage of imported consumer goods, led to a heavy demand for New Zealand made civilian goods, on top of the defence production. And though industry benefited, the war brought its own disadvantages: shortage of raw materials, difficulty in hiring enough skilled workers, the need to postpone replacement (or even major repairs) of much of the machinery and equipment and buildings used in manufacturing, and the effect of wartime fiscal policy. Nevertheless, the benefits outweighed the disadvantages. Assured of a large part of the market, some manufacturing industries were able to expand without having first to struggle through a difficult period of competition from established overseas producers. During the six years, 1938–39 to 1945–46, manufacturing output grew by almost one-third, the value of production rising by £81,000,000, from £114,000,000 to £195,000,000. Metals, machinery, apparel, and footwear made the greatest gains and increased their share of total manufacturing production. Except for footwear, these industries processed imported materials, so that the trend of development noted earlier was continued.

The world depression of the early thirties set back the low level of manufacturing that had developed. Export returns fell 40 per cent between March 1929 and March 1931. National income fell from £150 million in 1929 to £100 million in 1932, and for the two years between 1931 and 1933 registered unemployed men over 20 years of age exceeded 70,000, with the record, 79,500 (14 per cent of the labour force) being reached in October 1933. Unemployed men under 20 and unemployed women were not counted, but they were sufficient in number to bring total unemployment to over 20 per cent of all those who wanted to work. It was not surprising, therefore, that the volume of manufacturing output fell between 1929 and 1931, with no measures to sustain internal demand and with decreased prices for competing imported manufactured goods. Manufacturing output did not regain the 1929 volume until 1935.

The following table shows the effect of the depression on employment and on value of manufacturing output (except primary produce processing) in the March years 1930 to 1933.

Because prices fell during these years, the fall in volume of output is not strictly comparable with the fall in the value figures. Between 1930 and 1933 the volume fall was about 20 per cent as compared with a value fall of over 30 per cent. Nevertheless, in most industries the physical volume of production was reduced, often substantially. For example, between 1929 and 1931–32 the number of suits manufactured annually in New Zealand was reduced from 166,000 to 114,400, a fall of 30 per cent; and between 1929–30 and 1932–33 the output of children's boots and shoes fell from 120,000 pairs to 88,000 pairs, a fall of 27 per cent. The output of house-building timber was reduced from 72 million ft to 36 million ft between 1929–30 and 1931–32.

Even during the depression a few new industries were established and some others grew considerably. Among the most important established in the early thirties were the plastics and the rubber-manufacturing industries. Other new industries produced electric batteries, electric ranges, gas meters, lawn mowers, and wooden matches. Considerable expansion took place in proprietary medicines and toilet preparations, radio sets and cabinets, and slipper making and silk-rayon hosiery. It is of interest to note not only the increasing diversification, but also the increasing reliance on imported raw materials in most of the new and the expanding industries. Both trends were later to become more noticeable.

From 1934, with a rise in export prices, New Zealand began to move very slowly out of the depression. The dimensions of the recovery are shown by the following table, which shows employment and output (by value) in manufacturing for the years 1933 to 1935.

The recovery of manufacturing was further assisted after 1935 by increased payments to those who were unemployed, by greater State expenditure on development, and by a more expansionist financial policy. For the depression had shown that many of the old assumptions about the New Zealand economy were no longer valid. It was no longer possible to accept the comfortable belief that an adequate standard of living could be provided for most of the people merely by selling farm products abroad and by importing manufactured goods. People began to realise that manufacturing would have to be developed to keep them employed. Thus the Industrial Efficiency Act of 1936 aimed at promoting “the economic welfare of New Zealand by providing for the promotion of new industries in the most economic form and by so regulating the general organisation, development, and operation of industries that a general measure of industrial efficiency will be secured”. Although the Act was used largely for regulation rather than for industrial development, the importance of the explicit statement of its aims should not be overlooked.

A fall in the country's overseas exchange reserves, which began in 1936–37 and continued during 1938, had a marked effect on local manufacturing. It was caused partly by a fall in export prices, partly by the higher demand for imports brought about by the economic expansion, and partly by capital movements from New Zealand. In November 1938 net overseas assets had fallen to £(N.Z.)8,000,000 (compared with the 1936 average of £(N.Z.)29,000,000) and, in December 1938, import licensing and exchange-control regulations were introduced. Under these regulations economies in import expenditure were made in almost all fields and the manufacturing industries were given the chance of filling the gap. But the Second World War broke out before these measures could themselves influence the course of industrialisation.

After the turn of the century economic conditions continued to favour manufacturing development. Large-scale immigration was resumed and export income rose as a result of the development of refrigeration of farm products for export. This meant a wealthier population as well as a larger one. It numbered 1,200,000 by 1920 – twice what it had been in 1890 – which meant that the demand for goods of all kinds continued to rise. Although this demand was met mainly by imports, it also resulted in an increased demand for the products of local manufacture. The greatest increases came in industries which supplied basic needs – clothing, footwear, furniture – or processed materials for industry, such as tanning and woolscouring, or farm products for export. Most of the industries were still based on New Zealand raw materials. But there were signs of a change in the nature of manufacturing, with industries which processed imported raw materials growing in importance – for example, the making up of imported cotton piece goods, and of imported metals. On the other hand, New Zealand industry failed to develop the manufacture of some New Zealand raw materials, such as leather and wool. Instead, the country imported carpets and leather goods from overseas.

By 1920 there were 4,357 industrial units operating in New Zealand and 2,560 of them had been established in the first 20 years of this century. In all the main industries (except coach building, printing and publishing, woollen milling and tanning, fellmongering and woolscouring) far more than half the units in operation in 1920 were less than 20 years old. This was particularly so of the furniture, tailoring, and dress- and millinery-making industries, all of which had recorded spectacular increases in size. The value of factory production was now £82 million, 10 times what it had been in 1890.

It should be noted that the industries which developed most during the period were those which for many reasons were assured of a partial share of the New Zealand market. Protective tariffs were placed on imports of clothing and textiles, while “natural” conditions protected other industries. The sawmills and sash-and-door factories – whose output rose by almost 500 per cent in the 30 years to 1920 – were protected by the heavy bulk of their products and by the need for the user to be close to the supplier to be sure that his special wants were catered for. The foundries and other engineering works, brick-makers, furniture makers, breweries, aerated-water manufacturers, and coachbuilders were similarly protected. And so were the producers of perishable goods, such as bread. Apart from those processing farm products, it was the industries protected by tariff, geography, or the shortages arising from the First World War that expanded most rapidly in the early years of the century.

Meanwhile, New Zealand's manufacturing industries were advancing technically, even though the main contact with overseas advances was through imported cars and machinery. By 1920 each manufacturing worker had the assistance of 4 horsepower of machinery, compared with the average of only 1 horsepower 30 years before. The growth of the “heat, light, and power” and “carriages and vehicles” servicing industries was another sign of technical change.

From 1920 to 1930 the value of all manufacturing rose by only £9 million, from £82.5 million to £91.9 million, in spite of large increases in the primary processing industries and the servicing industries. The output of most industries, as a proportion of total manufacturing output, fell; and in the textile fabrics and apparel industries the fall was absolute. A few new industries, however, were set up or put on a sound basis in the decade. Tobacco, for example, had been grown in New Zealand in small quantities during most of the nineteenth century. In 1907 Gershon Pezaro began the handmaking of cigars from imported leaf and, in 1924, formed a company to take over the business. In 1923 the National Tobacco Co. Ltd. had been formed in Napier to manufacture cigarettes and tobacco. This stimulated the commercial growing of tobacco in New Zealand. Glass manufacture, which had been carried on by various factories since as early as 1850, did not become economic until the New Zealand Glass Manufacturing Co. began production in Auckland in 1922. Similar advances were made in china and earthenware production. But these developments were exceptional.

Various factors contributed to this fall in manufacturing. There was a major post-war boom in 1920, but fluctuations in export prices were reflected in farm increases and in the economy generally, and thus the demand for goods in New Zealand was unstable. Unemployment lowered the demand for consumer goods. Shortage of manpower during the First World War had prevented any increase in manufacturing. Thus any increase in demand from rising population or rising national income had to be met largely by imports.

All the developments were, of course, taking place within a context of growth and change, but with fluctuations, largely brought about by external factors, greatly affecting the general level of economic activity in the country. As a result of a world depression in the early 1870s, the prices of farm products fell by about 23 per cent between 1874 and 1880. The adverse effect of this was aggravated by the fact that the peak of gold production had been passed by 1870, so that incomes per head in New Zealand were falling. Indeed, from 1865 to 1895, apart from a few years in the 1870s, there was an economic depression in New Zealand. Population, stimulated by immigration, continued to increase. It rose from 267,000 to 501,000 between 1871 and 1881, and this factor helped manufacturing to continue to expand. As labour was largely unorganised, the falling prices had a marked effect on wages, which fell more than prices and quickly adjusted labour costs of production. Thus the internal depression in a sense aided the development of manufacturing in some fields, because industries were better placed to compete with imported goods and even to export some of their products.

In another sense, too, the depression in New Zealand helped the further development of other manufacturing interests. Until the eighties, manufacturing in New Zealand had received little protection. Tariffs and excise duties had been mainly for revenue, although industry had been given some help by admitting certain raw materials free of duty and imposing a tariff on some finished goods, and bounties had been offered by the Government and the provinces for the establishment of new factories. Nevertheless, there was no organised movement or sentiment towards protection. As unemployment became more marked during the eighties, however, the manufacturers and their employees combined in demanding protection against imports. Furthermore, the development of the steamship had reduced New Zealand's isolation from Europe and the natural protection this isolation gave New Zealand industry. A New Zealand Protection Association was formed in 1884; and in 1888 the Government was induced to put a tariff on imports, generally around 20 per cent, which gave protection to footwear, clothing, machinery, manufacturing, and metalworking factories. Nevertheless, protection was still only limited in scope, and free trade with a low tariff continued to be the main characteristics of Government policy.

Improved internal transport was by now assisting development and unifying the market. In 1890 coastal shipping carried more than 4 million tons of goods and there were about 2,000 miles of railway either in use or under construction. The population was becoming more urbanised, which helped to compact the market. In April 1891 the population of urban Auckland was 51,000; Christchurch had almost 48,000 people, with Wellington 34,000, and Dunedin 23,500.

The last decade of the century was not, however, a particularly happy one for manufacturing. After 1890 industrial expansion rather tended to slow down. The Australian financial crash, which started in 1893, forced a good many New Zealand firms into bankruptcy, and unemployment was such a serious problem that Seddon, then Prime Minister, felt impelled to write to the Premier of Victoria asking him to make it public that jobs were hard to find in New Zealand and that immigrants would have to endure hardship and privation. In 1895 there was additional tariff protection provided for the manufacturer, and in 1896 the Liberal-Labour policy of giving contracts to local industry, coupled with State backing of the Bank of New Zealand, helped to stabilise industry. But the expansion of export income from primary produce – North Island dairy produce by this time was growing rapidly in importance – weakened the case for self-sufficiency in manufactured goods, and the 1896 census revealed that unemployment remained severe, particularly for industrial workers.

Nevertheless, recovery from the depression was taking place. This, together with trends over the last 20 years of the century (especially the spectacular development of meat freezing and dairy factories and the rapid settlement of the North Island following the pacification of the Maoris), stimulated manufacturing. Between 1896 and 1900 the rise in value of factory production in some of the more important industries was little short of spectacular. The value of production in iron and brass foundries rose by 187 per cent; in furniture factories, by 184 per cent; in flax mills, by 526 per cent; and in spouting and ridging works, by 374 per cent. Price changes accounted for some of these increases, but, by the end of the century, manufacturing industry was progressing well.

From the first, the double freight costs of sending raw wool to England and then importing manufactured woollen textiles was an incentive to the establishment of local mills in the woolgrowing colonies. Woollen tweed material was first produced from locally spun yarn at Nelson as early as 1848, but the first woollen mill proper was not established until after the Otago Provincial Council had offered a bonus for the first 5,000 yards of woollen cloth produced in the province. The mill was established at Mosgiel in 1871 and, four years later, a further mill was running at Kaiapoi, after a larger bonus had been offered by the Canterbury Provincial Council. By 1882 there were three mills in operation and, by 1886, seven. They were using 2 million lb of local wool yearly in the production of yarns, blankets, rugs, and the like, some of which were exported. The development of the woollen milling industry was no doubt aided by the fact that the mills gave employment of a kind which could be carried out by women and girls whose wages were much lower than men's. Between 1886 and 1891 the number of women employed in the mills increased twice as quickly and the number of girls three times as quickly as the number of men. These mills were also producing hosiery at that time and, before the end of the century, seven stocking-weaving factories had been established.

The first footwear factory (as distinct from the individual bootmaker making boots and shoes to measure) was established by O'Brien in Greymouth in the 1860s to sell boots to the goldminers. Others soon followed and during the 1880s there were 25 footwear factories. In 1885, from locally produced leather, they made about two-thirds of the value of all the colony's needs. In fact, the industries engaged in the manufacture and use of leather, including tanning, saddle-making, and the manufacture of portmanteaux and Gladstone bags, as well as those concerned with footwear, employed over 4,000 workers in 1885 and had about £330,000 capital invested in the fixed assets.

The processing of farm products was important from the beginning, and the preparation of meat and dairy products both for the home and for overseas markets led to the early establishment of meat works and butter and cheese factories throughout the country. The export of preserved meat and of dairy products was limited until 1882, when refrigeration rapidly expanded the exports of these products.

Flourmills were operating early in the 1840s. The manufacture of other products soon followed–fancy biscuits, jams, confectionery, pickles and sauces, beer, cordials. Sugar, their principal ingredient, was at first imported mainly from Java, but after the establishment of a sugar refinery at Auckland in the early eighties, it was produced there from sugar cane grown in Fiji. By 1885 almost all the fancy biscuits, about half the confectionery, more than half of the jams and cordials, and a large proportion of the beer consumed were being supplied by local manufacture.

Since farming was of great importance from the outset of settlement, there was a steady demand for farm implements, which were imported from England. The need for the local blacksmith to carry out repairs to these implements provided the impetus for the development of a local engineering industry. The blacksmith soon became a maker of ploughs, harrows, and more complex farm machinery, and there was plenty of scope for inventiveness. It was far easier, cheaper, and more satisfactory to import the materials, iron bars and sheets, and a few parts, such as hooks, nuts, and bolts, and to manufacture machinery to suit the special needs of the different techniques beginning to be used in the local farming. Equipment designed to save labour was in particular demand and New Zealand patents became well known in many other countries. In spite of high ocean freights, thousands of New Zealand made wool presses were sold to South America, and ploughs, disc harrows, chaff cutters, and seed cleaners were made here and sold in all parts of Australia and, to some extent, in South Africa. Before the end of the century, however, the high freight costs, together with the specialised methods and lower wage rates of the English and American manufacturers, effectively defeated the New Zealand products in overseas markets. Nevertheless, the expansion of farming in this country provided a growing home market for New Zealand made agricultural implements and the industry continued to flourish. The value of output increased from £112,000 to £200,000 between 1885 and 1905 and, in the latter year, about 800 men were employed.

It was the blacksmith and his apprentices, and the later employees of the agricultural equipment manufacturers' who provided many of the skilled workers needed for the development of other branches of the engineering industry. Immigration also contributed many skilled workers. The provision of roading and railways, so necessary in a country being opened up, especially one which was so rugged in parts, called for the building of many bridges and the supply of many simple engineering or metal products which could more conveniently be made in this country. The bridge work was at first fabricated in engineering works owned by private firms, but later it came from State engineering works which were established along the routes of railway lines under construction. From these works developed the railway workshops, which became established in each of the four main centres in the 1880s to build railway equipment and rolling stock of all kinds. Locomotives were first built about 1892 and by the end of the century all the railway rolling stock needed came from these workshops.

Other products of the engineering industry, which were generally being produced by 1880, included land engines of various kinds for mills and mines, water engines, office safes, presses, kitchen ranges, stoves, grates, ornamental castings, brewery plant, steam, water, and gas fittings, and many other small items, such as replacement parts for imported machinery of various kinds.

The Maoris had done some manufacturing before the white settlement, using mainly the flax plant (phormium tenax (q.v.), the fibre of which was pared by hand with the aid of a sharp shell and used to make mats, garments, baskets, nets, and lashings. They made only special and limited use of the rich timber resources. It was the visits of the whalers, warships, and storeships from Australia, that made the Maoris realise the value of the forests. As a result many of them became expert sawyers, supplying the traders with timber as well as flax.

The virtues of the New Zealand flax for rope making led to attempts to develop the preparation of the flax hemp for export. Unfortunately, however, the Maori was unwilling to produce the flax hemp in anything like the quantities which were needed and the European was unable to evolve a satisfactory method for extracting it. As a result, the fluctuating supplies and uneven quality of the fibre that was exported led to the rapid spoiling of the market, and the trade was not fully restored until towards the end of the century.

Probably the first industry which the Pakeha did successfully establish was based on the vast timber resources of the new country. This was the construction of small sea-going boats, mostly brigs, which were used for the colonial trade. Before the main white settlement “Pakeha Maoris”, or whites living in Maori communities, had taught the natives how to build boats and small ships. Shipbuilding was particularly important in the far north and dozens of small vessels were built on the shores of the northern harbours. These travelled as far afield as the Pacific Islands, Australia, the West Coast of America, and even China. By the fifties, the ship-building industry was largely centred on Auckland's Waitemata Harbour. Besides the small sailing vessels being built, attempts were made to build wooden steamboats, but this enterprise met with little success. Somewhat later a small number of iron steamboats were built, but this development did not get very far in the face of the competition of obsolete low-priced vessels from the fleets of the older countries. Nevertheless, up to 1887, 98 iron steamers of sufficient size to be put on the register of shipping had been built in New Zealand and, with few exceptions, their engines had been built here also.

As colonisation grew, the timber industry developed to meet the needs of the new arrivals. Besides spars and planking for ships, there arose a demand for timber for housebuilding and, later, for railway sleepers, telegraph poles, and construction uses generally. By 1876 there were 150 mills in operation cutting 130 million feet of timber a year, and by 1891 there were 250 mills at work.

The early manufacturing industries existed mainly to supply the basic needs of the various small communities that were taking shape and to provide the ropes and spars and repair services for the ships of the visiting traders. Apart from the ship building, which was a capital goods industry, most of the early industries produced consumer goods. Flourmills, flaxmills, fellmongeries, and ropewalks led the way in the early 1840s, followed, in the middle years of the decade, by breweries, brick kilns, and cooperages. In the late forties lime kilns, ship and boat yards, soap and candle works, and tanneries were established. The size of the market–small and local–and the low incomes and living standards of the people, meant that the growth and range of these industries were restricted. There was, of course, no government help to industry, which relied solely on the skills of the artisans employed–the blacksmith, the cooper, the joiner, the sawyer. This work was initially handicraft, but as the settlements grew it became factory based.

Statistics of factory production were first collected in New Zealand in 1867. These show that the industries established included grain mills, biscuit factories, a bone-manure works, coach-building factories, wool-scouring works, cordial and aerated-water factories, engineering workshops, sash and door factories, and a woollen mill, all additional to those which had been in existence by the end of the 1840s. Almost all the factories were still concerned with the supplying of local needs, although the exporting of some products was to follow before long. The agricultural-equipment industry is a good example both of the development from handicraft to factory-based operation and of the establishment of an export trade.

The term “industry” as applied to New Zealand, is open to various interpretations and, in its widest sense, covers almost all economic activity: primary industry (farming, fishing, mining, and forestry); secondary industry (manufacturing or factory production); and tertiary industry (such things as wholesale and retail trade, transport, power supply and water services, personal services, and administrative and professional groups). “Industry” is used here in a narrower sense to mean the manufacturing or factory-based industries, covering the sort of activity which is generally thought of when the word “industrialisation” is used. The statistics quoted are drawn mainly from the official statistics of factory production collected annually by the Department of Statistics. In some cases other statistical sources have been used.

In this modern world New Zealand could not afford to ignore the urge and the necessity to industrialise. The farming sector is of vital importance and will remain so. But it is becoming generally realised that New Zealand cannot rely on too narrow an economic base and at the same time maintain its high standards of education and its rapidly growing population, and keep abreast with developments in other parts of the world. New Zealand is not an industrialised country, but the size of the manufacturing labour force, the wide range of industries, and some recent developments suggest that a mature industrial economy may be within its grasp. The pace of industrialisation has been irregular and very slow in some periods, but it is probable that a self-sustaining rate of growth will be established.

An indictment is a formal allegation to the Supreme Court that a named person has committed a stated crime or crimes. No one can be tried in the Supreme Court except upon an indictment. Formerly a bill of indictment was preferred before the grand jury which, if it found a true bill, presented the indictment. Since the abolition of the grand jury in 1961, indictments are presented directly to the Court by a legal officer of the Crown or by a private prosecutor. A Judge may direct that no indictment be presented or that the accused be not brought to trial.

by Bruce James Cameron, B.A., LL.M., Legal Adviser, Department of Justice, Wellington.

Criminal Law; Juries.