Julius Vogel and his Scheme.

Vogel is an important figure in our history and yet the bread is better known than he is. He arrived as a Gold miner, was editor of the ODT and became a local politician in Otago, championing the idea of secession when southerners became irate at the idea that their taxes were paying for the northern war. When he moved to central Government he would champion the rights of the Government over the Provinces, eventually having them abolished when they got in his way.

His scheme which he proposed as Treasurer in 1869 was simple. Borrow some money, use some of it to pay for Migrants to come to New Zealand and the rest to build the infrastructure needed to support the larger population as well as opening up more of the country to settlement. The migrants would expand the economy and generate more income, paying for both the interest and the loans themselves.

Initially the scheme was received well. Almost universally it was seen as a way of boosting the colony and making many people rich. Vogel wanted to borrow 10m pounds but ended up lending 20m, a liability that would weigh heavily on the Government for many years. The road and rail networks were built and a lot of land opened up to settlers.

Areas like the Wairarapa (70 Mile Bush) were opened up, and the population was doubled. new towns like Dannevirke appeared and prospered. The economy expanded but the Depression pushed down commodity prices so that the economy stagnated with real incomes reducing despite wages increasing. (ie Inflation was higher that wages). The population now included a more diverse ethnicities, including the more well known Scandanavians, but also Italians and French settlers arrived.

The scheme was poorly run, money was squandered, road and rail networks were not always built where they were needed - often favouring well placed politicians and their favourites. Few of the 100,000+ people were suited to the type of work expected of them, and many preferred to stay closer to towns or cities, ignoring the opportunities in the rural areas. This created a new (but old) phenomenon, slums. An evil many settlers thought they had left behind in Europe. Older colonists viewed them as 'scum' who were a liability and a hinderance to progress, they were angry when the expected benefits - improved wages, higher land values did not always eventuate. This was not helped as the depression hit in the latter part of the decade.

Politicians who had supported Vogel abandoned him and he eventually left for London.

Ensure you read the Vogel handout!