The problems of New Zealand in this period are those of a rural economy constantly unsettled by the conditions of the world market for farm products. A few products, wool, butter, cheese, and meat, earned the major part of overseas income; the whole country, and not just the farmers who actually produced, depended upon the conditions affecting the sale of these products overseas. The urban population, indeed, was large and growing, but in the absence of large-scale industry, townsmen were, ultimately, as dependent upon grass and grazing animals as the farmers. Governments based their policies upon these facts; most important measures of the period are designed to strengthen the primary producer, and thus to benefit the whole country. Further, to a major degree, the fate of Governments depended upon the votes of the countryman and small townsman, and in the uncertain climate of the period these votes were apt to be unpredictably cast. Politically, this period is one of three-party flux and realignment, in striking contrast to the simplicity of preceding and following eras.

Farming had prospered during the war, and, thanks to Ward's loan finance, taxation did not bear heavily upon profits. Farming, more than ever, seemed the high road to fortune. Land values, which had been on the increase since the 1890s, appreciated steeply with men's zeal to get on the land. Between 1915 and 1925 over 40 per cent of the occupied land in the country exchanged hands as farmers bought and sold upon a rising market. It has always been a little difficult in New Zealand's history to tell the land speculator from the farmer, but never more so than at this time. The Government, in its well-meant efforts to help the returned serviceman, accelerated the course of the disease by making some £235 million available for land purchase.

Two unhappy results soon became apparent. First, and all over the country, farmers bought land at high prices, borrowing heavily at high rates of interest. They were inevitably embarrassed when prices for farm products fell, as they did from time to time in the twenties and disastrously between 1928 and 1934. Commitments on mortgages, chiefly interest payments owed to Government lending Departments, banks, private credit agencies, and previous owners remained high and ate up an increasing share of the farmer's income. Farmers on good land who had taken over farms as going concerns, were typically able to weather the prolonged storm by cutting down expenses and stepping up production. The “new chum” farmer – and this is the second consequence – was less fortunately placed. Often he was but recently a townsman, normally he had gone on to poor-quality land needing considerable development – clearing, fencing, buildings – before it could bring him a good return. Many returned servicemen were in this category, and a number of them left their farms derelict. Inexperience, poor land, and lack of money augured ill for their future, especially in a period in which farm incomes fluctuated and, over the period as a whole, fell. Such farmers as these, and also better established farmers, were faced above all with a shortage of money, so that the typical appeal from the farming districts at this time is for more abundant and cheaper credit.

Further, farmers' organisations turned to Government to help them market their goods more effectively, in the belief that the farmer was being cheated of his due by avaricious middlemen in London. Finally, when farmers saw, as was readily apparent by the end of the twenties, that their sharply increased output brought a declining income, many were ready to believe themselves victims of an international conspiracy of foreign financiers.