1890–1919 The Liberal Era
The period that begins with the 1890 election and ends with the Great War in 1914 is the most formative in New Zealand's history. At this time her characteristic economic activities developed, the tone and system of her political life was shaped, major pressure groups, such as trade unions and farmers' bodies, grew to maturity, and national feeling achieved a certain definition. This “Liberal era” was, of course, shaped by the past, but it imposed upon its inheritance a pattern which is that of twentieth century New Zealand. In Maori affairs and external affairs the same vital reshaping is, though less emphatically, discernible. To a degree the robust figure of Richard John Seddon, premier from 1893 to his death in 1906, may be taken as symbolical; certainly his qualities impressed themselves upon all these developments. But Seddon was a symbol rather than a creator; other individuals, and movements of interest and opinion-swaying multitudes, in fact give shape to the period.
The 1880s had been dominated by depression and by arguments about appropriate governmental action. 1887 saw the end of an ancient remedy, borrowing and spending, and the first signs of another, industrial protection, land settlement, and governmental economy. These are the themes of the victors of 1890 – the Liberals proposed to make depression tolerable by helping the town worker, by “bursting up” the great estates and settling small farmers, by governing cheaply. They continued in this spirit till the mid-1890s, when better prices for exports brought prosperity. Refrigeration, as early as 1884, had heralded better times by opening the English market to the New Zealand food producer, but its effects were delayed first by the low level of prices, and secondly by the fact that it first facilitated mainly meat exports, the product of the sheep farmer, normally a large owner. Only in the later 1890s were butter and cheese exports, the products of the small dairy farmer, becoming significant. After these changes, the Liberals turned to the more agreeable duty of administering prosperity – it is this later period in particular that Seddon symbolises so eloquently.
The Liberal majority of 1890, the foundation of Ballance's administration of 1891, was a coalition of anti-Atkinson groups, and initially not an entirely happy one. Their main electoral support came from the depressed of town and country – from farm labourers who wanted to become farmers, from small holders who farmed for food rather than profits, from townsmen who saw in a farm an avenue to future security, from industrial workers oppressed by low wages and smarting under a recent crushing industrial defeat.
Two events, just before the election, assisted the cause of the Liberals among the poorer townsmen. The “sweating” scandals in urban industry evoked humanitarian indignation with which the Liberals associated themselves by promising effective action. Secondly, the maritime strike, beginning with the seamen and spreading to most transport workers (organised by J. A. Millar into the Maritime Council), had ended with the defeat of the strikers, the cautious advocacy of their cause by Liberals (prompted by the government's involvement through the railways), and direct union participation in the election on the Liberal side. Many Liberal members received union endorsement, and six Labour M.P.s were elected to support Ballance.
The first Liberal term produced more proposals than accomplishments. In the dying days of his ministry (between the election and his resignation) Atkinson had secured the appointment of himself and a number of his sympathisers to the Legislative Council, thereby increasing its existing conservative majority. It proceeded to block many Liberal reforms, notably in land and labour policy. This was fair ground for a constitutional struggle. Ballance demanded additional Liberal appointees to redress, in a modest way, the balance; his demands were rejected by the Governor. The ensuing campaign against entrenched vested interests (Legislative Councillors enjoyed life appointments) and alleged autocracy ended with a Liberal victory when the Colonial Office instructed the Governor to yield. In 1891 the emasculation of the Council was effected by a seven-year term for new appointees, a sure guarantee of docility. During the struggle the Liberals seem to have grown more unified; temporary frustration acted as a party cement. Once this struggle was past, the 1893 election (held just after Ballance's death) gave an emphatic mandate to the semi-frustrated Liberals, so that 1894 became the annus mirabilis of Liberal reform.
Land measures were introduced chiefly by John McKenzie, Minister of Lands and Agriculture from 1891 to 1900. In 1891 a land tax, mildly graduated to strike at large estates, replaced the property tax; an Act of 1894 enabled the state power to repurchase lands for closer settlement, compulsorily, if need be. The graduated tax had little effect, apart from the case of the great Cheviot estate of 84,000 acres in North Canterbury. Repurchase proceeded to the extent of £250,000 annually. In 1894, too, the Bank of New Zealand, under unsound management, and the largest landowner in the country thanks to foreclosures during the depression, was faced with collapse and rescued by swift government action. One consequence was effective government control in the future; another was the disposal of its property, and that of associated companies, by a partly governmental board. So, especially in the North Island, a great quantity of land became available for closer settlement. Many large landowners, in fact, would have happily subdivided their estates, if they could get a good price. This became the case once prosperity set in, so that private and state subdivision proceeded together. Finally, closer settlement was accelerated by renewed government purchases of Maori land (over 2 ½ million acres in the 1890s), and its distribution to farmers.
Farmers went on the land either as outright purchasers, or as occupiers with a right of purchase after 10 years, or as “lease in perpetuity” tenants. This final tenure, in fact a 999-year lease, had many advantages: the tenant had absolute security; his rent could not be increased by revaluation; and he could devote all his own money to improvements. This was the poor man's way to the land; one which he ceased to value when he ceased to be poor.
The crucial land measure came from Joseph Ward, the Treasurer, in 1894. On the one hand he reverted to a previous model by borrowing modestly in London; on the other he broke new ground by using the money not (initially) for public works, but to help settlers buy land. State advances, at a lower interest rate than advances from private lenders, became a permanent feature of New Zealand life.