Title: War Economy

Author: Baker, J. V. T.

Publication details: Historical Publications Branch, 1965, Wellington

Part of: The Official History of New Zealand in the Second World War 1939–1945

This text is the subject of: ‘Something of Them Is Here Recorded’: Official History in New Zealand

Conditions of use

Difficulties in Non-Essential Industries

As wartime pressures increased, reducing the availability of manpower, and still further restricting the range of imported materials and equipment, it became increasingly difficult for those industries which were engaged in making luxury or non-essential lines to maintain their production.

An indication of increasing wartime difficulties, especially in non-essential industries, was given by the Department of Industries and Commerce in its 1941 annual report:¹

‘To some extent the quantity of goods produced has been conditioned not by the consumer demand, but by the adequacy of the supply of raw materials required in the processes of manufacture. As regards the demand for domestically manufactured goods, under the operation of the Import Control Regulations this has shown an increasing tendency as stocks of similar lines of previously imported goods have become non-existent. On the production side, manufacturers appear to have received reasonable supplies of raw materials, although in some cases these have been inadequate to enable the demand for finished goods to be fully met. On the other hand, certain other factors affect production, the chief of which is the shortage of skilled and even casual labour, so that in some cases the reduced staffs now available would be unable to cope with greater quantities of raw materials.

‘Production has been limited to some extent by the amount of sterling or dollar funds available, which is unavoidable. Certain luxury trades have felt this restriction most. In general, the effects have not proved unduly severe.

‘Unfortunately, as the year progressed, the shipping position deteriorated, and the non-delivery of orders placed by manufacturers has affected production. This difficulty, combined with the difficulty involved in obtaining export licences from overseas countries, has placed a limit on expansion through resulting shortages in supplies of raw materials. Overseas prices of most raw materials continue to show substantial increases. Plant for expansion purposes is limited, as the emergencies of the war situation make it imperative that plant of a nature essential to the maintenance of output in non-luxury lines only is imported. Factories engaged in the production of military requirements for the most part worked extended hours. In industries not directly concerned with the war effort output, having regard to existing conditions, has been surprisingly well maintained.’

defence construction
Levelling the site at Waiouru Camp in August 1940

camp buildings
Carpenters at work on a dormitory at Waiouru in September 1940

aircraft engines
Assembling engines for training aircraft

aircraft assembly
Assembly of De Havilland training aircraft in a Wellington factory

munitions making
Modern small-arms were produced in considerable quantities

war production
Production of Bren carriers in a motor-car assembly plant

special war industries
A 100-ton press stamping out steel helmets for the Home Guard and E.P.S.

manufacture of war equipment
Trailer fire pumps for the Far East forces

One of the failings of import discrimination against goods regarded as non-essential is the tendency for local production to fill the gaps and to concentrate unduly on the very non-essential goods against which import restrictions discriminate. The imposition of import controls does nothing to change the demand; it merely cuts back supply, and, if demand has enough money backing, local industry will try to fill the resulting supply shortage. Demand may then be frustrated at another stage, if materials and equipment to make the non-essential lines become in their turn restricted imports. Under war conditions, non-essential production may also become short of labour, but, if demand is still high, it often remains strong enough financially to bid successfully for labour, unless direction of labour is invoked in favour of essential industries. Even then, the non-essential industry may find ways to carry on if demand raises the price for its products high enough.

Essential and non-essential are not clearly defined concepts. Tobacco processing, for example, was one of the industries declared essential.¹ The whole process of selection in fact tended to be short-term and arbitrary in its application, but was no doubt justifiable under the extreme pressures of war conditions.

Dealing with industries not declared essential, the National Service Department gives the following list:²

Of these industries the Department wrote:

Many non-essential industries were persuaded to convert all or part of their capacity to the production of war stores or other goods or services regarded as essential. Much was achieved, and the Department of Industries and Commerce was able to write in its 1943 report:¹

‘Shortages of raw materials and skilled labour have raised serious difficulties in the case of industries not on war work, or to a limited extent only, but the fact that many have been able to employ their surplus productive capacities on the manufacture of new lines, either wholly themselves or in cooperation with other firms, is a tribute to the resourcefulness and adaptability of New Zealand's manufacturing industies.’

Where persuasion was not sufficient, the Factory Controller had full powers to require factories to convert to war production. In cases where conversion was not possible, most non-essential industries ultimately suffered severe losses of manpower, which went to the armed services or to augment production in essential industries.