Labour Relations Stagnation and Political Change

The Long Depression of course began before the collapse of the Bank of Glasgow in 1878. Virtually all of the available land in the South was now occupied by run holders. Sheer greed meant that most runholders had overgrazed their land (too many sheep for to long). Continual burn-offs and the rabbit plague had left a lot of land bare and unproductive. There was nowhere left to expand into. Many of the larger stations were also financially stretched having borrowed heavily to expand their operations. Low levels of production and low export prices crippled them. This could only be sustained while incomes (wool prices) remained high.

The drop in world wide wool prices hit the overstretched mortgages of the runholders hard and pushed many to the wall. Bankruptcy hit many and the Banks ended u[ owning many worthless properties. The drop in prices and the collapse of the rural economy led to the depression. We've been through this in class but remember the downward spiral...

The Depression took almost 5 years to be felt in the North. Why? Because, the north was less reliant on sheep, and areas of (Cheap) Maori land continued to come onto the market allowing the northern economy to expand. Eventually the depression did arrive but the advent of refrigeration in the early 1880's also helped to alleviate the economic downturn.

The Government of Atkinson were also stretched because of the enormous debt burden imposed by Vogels Scheme. The 20 million pounds demanded huge interest payments and in order to make them they reduced their spending. This retrenchment policy while sensible thinking at the time actually made things worse. It put more people out of work and increased the downward spiral...

Older Historians (Sinclair, Oliver) have described the period as a depression but Belich has called it a (long) stagnation. Technically a depression is a continual series of regression (prices & wages fall) and this did not necessarily happen - wages did rise albeit slowly. Another effect was in the area of employment.

In the South a lot of money was withdrawn from the sheep stations and needed new investment areas. There was still plenty of wool about and it was cheap. Money that would have been used in Primary production (farming) was pushed towards (secondary) processing the wool in MIlls. Woolen Mills sprang up and were filled with women whose wages and conditions were kept down.

Wages were low and often men were replaced by Women and Children who could be paid even less. The demand for cheap clothing effectively forced wages even lower.

Eventually Reverend Waddell gave his sermon on the 'Sin of Cheapness' and the Sweating Commission was created in the wake of public outrage that Sweating had followed them to this 'Better Britain'.

This possibility struck a raw nerve in the minds of settlers whose aspirations did not include poverty and its attendant problems. The Royal Commission report denied the presence of sweating although many of the 'necessary conditions' existed in Dunedin and other southern towns.

The Tailoresses Union was widely supported and soon other Unions appeared to protect workers and to employ collective bargaining as a bargaining tool. In areas where Unions had similar interests they grouped together, the Maritime Unions - Wharfies, Seamen and Railway workers had common interests (employers) and in 1889 chose to join their equivalent Australian Unions in a strike. There was little support (it was an Australian Strike after all). With little popular support they lost.

However it resulted in an awakening an underlying class consciousness and political awareness in settlers especially those who had recently acquired the vote. Having a say in Government gave many people the belief that their MP's should actually represent them. Until now the it seemed logical that MP's would support the big businesses that had elected them. Now that every man had the vote they looked for fair representation from their MP. The old 'Continuous Ministry' was the Government of the old system... it was this that led to the election of the Liberals.