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Graphic: An Encyclopaedia of New Zealand 1966.


This information was published in 1966 in An Encyclopaedia of New Zealand, edited by A. H. McLintock. It has not been corrected and will not be updated.

Up-to-date information can be found elsewhere in Te Ara.



The Early Trade Pattern

It is a matter of opinion, and of definition, at what date a “New Zealand economy” can fairly be said to have emerged. Production for the market had reached a considerable level, in comparison with the total European population, before the country became a British colony in 1840; on the other hand the European population was scattered along the extended coastline in a number of tiny settlements more closely linked with the outside world than they were with each other. The provincialism which gives the political historian one of his chief themes during the first half century or so of the colony's history reflects not only the differing origins of the various provinces, but also the inadequacy of internal communications between many of them and the fact that for many years their economic destiny and interests were not obviously identical.

Prior to 1840, Europeans and Americans (other than the missionaries) had come to New Zealand primarily to exploit resources which promised quick profits without the necessity for permanent settlement. “Exploit” is the significant word; for this early period saw a repetition of the short-sighted plunder of limited resources which has occurred again and again in the history of European expansion. The seals were the first to be indiscriminately slaughtered; most of the mainland herds were virtually exterminated by the end of the first decade of the century. In the north, particularly from bases at the Bay of Islands – the most populous European settlement in the early years – whalers were active; and those who settled in the locality, including the missionaries, as well as the local Maoris, produced food for victualling these whaling ships. A not inconsiderable quantity was exported, too, to Australia. The Maoris soon learnt European methods of agriculture, and before long were prominent in this early production of agricultural exports. Flax was another commodity which proved attractive to early traders, the Maoris providing the dressed fibre in exchange for guns and other goods. This trade declined in the 1830s as the market weakened, but timber, especially that of the kauri, remained one of New Zealand's staple exports as long as accessible trees remained to be felled. These activities, however, were for the most part essentially of a predatory character, and they could not provide an assured living for the settlers whom the New Zealand Company brought out in the early years of British annexation. For some years, indeed, the prospects for these men and women appeared far less favourable than they had been led to expect; Wakefield's plan for a community of self-sufficient farmers, cultivating mixed farms with the help of hired labour, was uncongenial not only to the temper of a majority of the settlers, but also to the climate and the terrain. Difficulties and uncertainties over the title to land were an added source of embarrassment in the early years, though these were somewhat alleviated after Sir George Grey assumed his first period of office as Governor in 1845. Grey was able to win the confidence of many Maoris, and to buy from them considerable areas of the North Island, and almost all the South (where, owing to the colder climate, there had never been a substantial number of Maoris). With access to land assured at least for the time being, and currency stabilised and law and order restored, the colony in the later 1840s gradually became more prosperous. A more positive impulse to prosperity – the first perhaps, other than migration, to reach the country from the outside world – came when gold was discovered in Victoria shortly after the mid-century. The rise of prices and inadequacy of Australian production of foodstuffs as men rushed to the diggings gave an opportunity to the New Zealand farmers which they did not miss. By the middle of the 1850s thriving exports of foodstuffs had grown up, and vegetables and grain ranked with wool as the three chief exports of the day. Even when these agricultural exports tapered off in the later 1850s with the decline of the Australian gold rushes, wool from the rapidly growing flocks of Merinos, which had been imported in quantity from Australia as early as the late 1840s and put to pasture on the native grasses of the eastern South Island, was rising quickly enough to take its place and ensure the economy against any major downturn.


John Dennis Gould, B.A.(LOND.), M.A.(BRISTOL), Professor of Economic History, Victoria University of Wellington.