The Entry of the State
This legislation marks the direct entry of the State as director of economic affairs: it was no longer just a land seller and a road builder – it split up large estates, it revised tenures, it controlled (though inactively) the largest bank, it lent money to individuals. It also, through the Department of Agriculture, taught the farmer how to farm well, and the time was not far distant when it would help him market his products overseas. The same extension of public authority will be seen in Liberal labour legislation.
All this would have guaranteed no more than subsistence to the farmer had the economic climate not improved. But refrigeration, recovering export prices, the (limited) spread of dairying and fat-lamb production on small farms, had together gone sufficiently far by the end of the century to bring substantial prosperity to the majority of New Zealanders, and would go further in the near future. The dairy factory and the freezing works became the outward signs of a technological revolution in New Zealand farming, as were renewed activity in road and rail construction, a brisk commercial life in the towns, and an increased number of jobs. The Liberals began by legislating for adversity, but their work came to fruition in a wider prosperity than the country had known before.
The spread of prosperity from farm to town was assisted by William Pember Reeves, the major intellectual in the Liberal ranks, a Christchurch political journalist connected with the trade union movement there. In the Ballance ministry he was Minister of Labour, and as such was responsible for an improved factory law (1891) and an Act to settle industrial disputes (1894), as well as legislation abolishing “truck” and regulating working conditions in shops. The Industrial Conciliation and Arbitration Act of 1894 was his most important measure. Reeves was here concerned to reconcile class differences by establishing tribunals where employer and employee might meet and settle their disputes. As the 1890 strike had shown, the dice were loaded against the worker. This Act set up, on the local level, conciliation boards under an impartial chairman to attempt a settlement, and on a national level, an arbitration court under a Supreme Court Judge, to reach a decision if local conciliation failed. The decision of the Court could be made mandatory on the parties concerned.
This measure, blocked at first by the Legislative Council, ushered in an era of trade union expansion and industrial peace. Thus, on the one hand, the trade unions were built up into a permanent pressure group, wedded (initially and in the long run) to the social status quo, for the Act gave them far greater chance of success than strikes could hold out. And on the other, the Act greatly favoured the continuance of Liberal rule, first by giving satisfaction to the town worker, and second by presenting propertied interests with the benefits of industrial peace.
There is little to be said about legislative achievement after the mid-1890s, except to note that old age pensions, a foundation stone of the welfare state, were introduced in 1898, and that votes for women completed the structure of political democracy in 1893 – the three-year parliamentary term had been introduced in 1879, and plural voting had gone in 1889. The decade of Seddon's dominance, ending with his death in 1906, is notable in other respects, not least for the prosperity which kept the country happy. It was characterised by stability rather than change. Economic policy became expansionist again; borrowed money was spent on public works, with two important differences: an increased amount was raised within the country, and the public works were of immediate usefulness to the expanding economy, especially of the North Island. The completion of the Main Trunk railway in 1908 symbolises this aspect of Liberal administration.
Seddon's talents – those of party manager and father figure – were admirably attuned to stability. He succeeded Ballance in 1893 by sleight of hand; Stout, the successor Ballance had designated, was not an M.P. and, before he could return to the House, Seddon seized power and held it grimly against all detractors – who were numerous enough, for Seddon, quite apart from an ingrained crudity, possessed nothing like Stout's prestige. The elections of 1893 and 1896 confirmed the coup d'etat; rivals near the top dropped off one by one. Reeves gladly took refuge in London as Agent-General in 1896; in the same year Ward's resignation followed revelations about his personal financial situation; in 1900 McKenzie resigned, old and exhausted. Their replacements were not of comparable calibre. Seddon assumed many major portfolios and became a one-man cabinet surrounded by sycophants, except for Ward who returned to office in 1899. He dominated the Liberals in the House and the party machine in the country, itself his own creation. He won successive elections (1899, 1902, 1905) which had hardly a solid issue to distinguish them: it was enough to point to the prevailing good times and promise to perpetuate them. The parliamentary opposition – old men unused to the new temper of politics – dwindled and grew dispirited. But under the surface of these constant successes the spirit of the times was changing – substantial men in town and country were turning from the Liberals, but not until after 1908 in electorally significant numbers. Seddon and Ward ruled with the name of “Liberal” but in fact they were conservatives, for good times do not demand change. The left wing elements in the Liberal party – single-tax followers of Henry George, land nationalisers following John Stuart Mill, socialists from the trade unions – continued to exist, but without success. Good prices, roads, bridges, and railways kept the farmers happy; stability and industrial peace continued to commend the Liberal administration to propertied men everywhere.
Ward continued, as Prime Minister, with the politics of stability after 1906, explicitly fighting the 1908 election on a promise to stand still, and winning a substantial victory. It was, however, the Liberals' last victory, for in the next three years the movement of opinion reached the point where it showed electorally; in 1911 the Liberals could not retain enough votes in town and country to avoid a tied result. This led to the first Reform administration, under William Ferguson Massey. The change has an appearance of suddenness, but it was a culmination of a lengthy movement.