[Origins of the working class in New Zealand, Part Four]
The big capitalist farmer-land-speculators, dislodged from their position of dominance in the New Zealand parliament by the Maritime strike in 1890, remained, unloved, in political isolation for the next two decades. The Liberal Party of the urban manufacturing capitalists dominated political life in the form of its swaggering Prime Minister Richard Seddon, politically supported by broad layers of the working class and petty bourgeoisie.
However, the landowning class lost none of its economic power during this time. In fact, the landowners profited handsomely from the Liberal moves to ‘burst up the big estates.’ As the government purchased a part of their land at favourable prices, they were able to diversify their investments beyond the farm. The main fields of investment they chose were the new industries processing farm products such as woollen mills, meat freezing works and dairy processing factories, as wells as rural credit and trading. The key rural credit institutions at the time were the stock and station agents, initially traders who sold livestock, seed and farm implements on credit, but whose operations soon expanded to include buying farm produce, insurance brokering, real estate sales, and most of the functions of banks.
Frederick Williams, eldest son of the Church Missionary Society missionary (and land owner) William Leonard Williams, co-founded the Napier-based stock and station agency of Williams and Kettle in 1891. This venture had full Williams family support, backed with financial guarantees based on the family landholdings. It soon achieved a position of dominance in the Hawkes Bay-East Coast region. Williams collaborated closely with William Nelson, founder of the Tomoana meat freezing works in 1883, and together they also invested in coastal shipping, which was the main form of transport between scattered coastal farms and settlements and the cities prior to the expansion of roads and railways in the early twentieth century. Later, Williams and Nelson bought an interest in a shipping line taking farm produce to Britain.1
George Gould, son of a leading Canterbury landowner, founded a rural financial agency around the same time. Following a further series of mergers, Pyne Gould, Guinness emerged as the leading stock and station agent in the South Island.2
Such enterprises brought the interests of the landowners closer together with those of the urban capitalists, and the political rift that had divided the urban bourgeoisie from its rural counterpart in 1890 slowly healed.
The Maritime Strike of 1890 marked the birth of the working class, and one of the demands of this class had been land for the landless. The Liberal government took steps to enable some of these workers to take up land. Prior to that time, capitalist farming in New Zealand had been dominated by extensive sheep farms, producing wool, owned by a very small number of landed families and worked by itinerant rural wage-workers. That began to change during the 1890s. The technology of refrigeration made it possible to export both frozen meat and dairy products to Britain. Dairy farming in particular required closer settlement of the land. The rapid expansion of dairying brought another exploited class into existence: the class of family farmers. Dairying opened up regions of higher rainfall, where the land was thickly forested. Clearing the forest cover and planting pasture grasses was slow and laborious; a job that only the small farmers could undertake.
The new dairy farmers settled on small farms under the Liberal ‘closer settlement’ policies were generally not exploiters of the labour of others. They worked their own land, hiring no labour beyond their own family members. As petty-bourgeois producers, they were themselves exploited, although the forms of exploitation differed from the wage workers. Whereas the workers were wage-slaves of the employers, the small farmers were debt-slaves of the stock and station agents and the banks. They were also subject to the capitalist monopoly of trading and processing of farm products.
At the start of the 1890s, these small farmers were drawn from the ranks of the workers, and were little different from workers in their living standards and political sympathies. Often they continued to work for wages for several years, building roads and other public works, while they developed their land. Over the next twenty years, this slowly changed; a greater differentiation grew between small farmers and workers, as well as within the class of small farmers. At its upper end, a new layer of capitalist farmers emerged, increasingly wealthy and increasingly reliant on hired wage labour, which identified its interests with the landowners of old. It was one of these new capitalist famers who assumed the leadership of the capitalist class in the counter-offensive against the labour movement that began in 1912.
William Massey was not a member of the pre-1890 landed oligarchy. Nor was he one of the small farmers who owed their holding to the Liberal government. Born into a landowning Protestant Irish farming family, Massey emigrated to New Zealand in 1870. He leased a 100-acre farm in south Auckland six years later,3 soon becoming a leader of the Mangere Farmers Club and the Agricultural and Pastoral Association. It was in this role as a ‘farmers leader’ that he became vice-president of the National Association of New Zealand, a political group formed to gather together the dispirited forces of opposition to the Liberal government of 1891. He entered Parliament in 1894.
Deeply hostile to the fighting labour movement that emerged after 1907, Massey worked hard to win the small farmers into a rural alliance against the working class. His rallying cry was the freehold, and it was an effective slogan.
Most of the new family farmers settled since 1890 obtained their land under long-term leases from the state. This was the means by which the Liberal government broke the monopoly of the big estate owners. The Russian revolutionary Vladimir Lenin, writing about nationalisation of the land in 1907, wrote that “we see something similar to it [i.e. nationalisation – JR] in New Zealand, a young capitalist democracy, where there is no evidence of highly developed agricultural capitalism. Something similar to it existed in America when the government passed the Homestead Act and distributed plots of land to small farmers at a nominal rent.”4
The leasehold tenure enabled landless workers with little savings to obtain land to work on their own account. It barred the land from being used as collateral against loans, thus preventing traders and mortgagees from evicting the farmer and claiming the land for payment of debts. Low-interest state loans were made available under the Advances to Settlers Act, another key element in the Liberal land reform. This was a programme for the rapid development of capitalist farming, and that was precisely its result.While the state lease gave the leaseholders some security in land, by the same token it prevented them from engaging in another form of enrichment that their capitalist-farmer neighbours enjoyed: trading and speculating in land. This was the lure of Massey’s slogan of the freehold: it held out to the small farmer the prospect of joining the bourgeoisie and enjoying its privileges.
Under the capitalist mode of production, land is private property that can be traded in the market. The price of commodities in the capitalist market is ultimately determined by the amount of labour needed to make them. Land, however, is not a commodity, because it is not a product of human labour. The price of rural land is a capitalised rent, and is ultimately determined by the income that could be gained by farming the land.
When farming shifts to more intensive use of the land, as it did when small-holder dairy farming became economic in New Zealand in the 1890s, the price of the land increases in proportion to the increased income obtainable from a given area. The seller of the land gains a windfall profit from the buyer, who essentially pays the seller an advance on the future income from the land in question. Such windfall profits accrued to the estate owners who sold part of their land to the state in the 1890s and later. The windfall continued as long as prices for agricultural produce remained relatively high, which in this case meant right through the years of the Great War and beyond, during which time the British government continued to pay guaranteed prices for meat, wool and dairy products.
(A similar process played out with the conversion of former grazing lands to horticulture and viticulture in the 1980s, and more recently with irrigation schemes that turned the dry Canterbury Plains into intensive dairy farming land. The Ruataniwha Dam project being promoted by some farmers in the Hawkes Bay today is another example: the existing owners of dry land stand to make windfall profits through converting a part of their land to more intensive irrigated dairying and then selling it on. It only works in this way while price of the agricultural commodity remains high: when the price of the commodity falls, so does the price of the land on which it is produced, the most recent buyers then find themselves insolvent, and the land sales go into reverse. The big capitalists can then buy back their land, with improvements, at low prices.)
By 1910, the coalition that had kept the Liberal Party in power for nearly twenty years had worn itself out. Its capacity for progressive reforms was exhausted. Seddon was in his grave. A class-struggle union movement had grown up that openly defied the Arbitration system and rested on the organised strength of labour. Against this open defiance, the Liberal government seemed powerless to enforce its legal penalties; in consequence it rapidly lost the support of the manufacturing capitalists.
On the other hand, Massey’s agitation around the freehold had eroded the Liberals’ support in the countryside. After its long period in the wilderness, the conservative opposition was finally able to assemble its forces in a stable political party: the Reform Party, founded in 1909 with Massey at the helm. In 1912, Reform defeated the Liberals in Parliament and Massey became prime minister.
The political basis of Massey’s Reform Party was a political alliance between family farmers and the capitalist farmers and creditors who exploited them. This alliance had been built through years of work in organisations which claimed to speak for all farmers, such as the Agricultural and Pastoral Associations, and above all the Farmers’ Union, founded in 1902 under the leadership of Manawatu landowner and former Parliamentarian James Wilson. Wilson declared that he wanted to “deal not with party politics but with farmers’ politics.”
The Farmers’ Union campaigned aggressively for the freehold tenure. “There are many Crown tenants who have taken up land on the only tenure possible to them — the leasehold — but whose circumstances I have changed so that they are able now to acquire the freehold, and they desire to do so. Under proper conditions as to adjustment of values we see no reason why they should not… There is in most cases very little unearned increment…The aggregation of large estates is nothing more than a threat put forward by land nationalisers to prejudice the people against the freehold,” read a petition circulated by the Farmers Union in 1904. (In 1945 the Farmers’ Union merged with the Sheepowners’ Federation to form Federated Farmers, which continues this political role today.)
The rural newspapers, meanwhile, fanned the flames of resentment of the country-dwellers towards the city. The Wairarapa Daily Times wrote, for example, in June 1904: “Farmers for many generations have been employed in the task of producing the necessaries of life cheaply, in order that the non-farming classes may live in comparative ease and comfort… The professional politician who skims the pages of socialistic books or panders to the prejudices of city agitators, knows absolutely nothing of the lives of the majority of our landowners. He confounds the worst kinds of city landlords and speculators, with industrious settlers, and would mete out to men who are turning waste lands into productive farms, the same treatment that he would give to the rack-renters of slums and the owners of unimproved allotments. There are abuses under the present system of land ownership, but they are nearly entirely confined to cities and their environments.
“….[Liberal Premier] Mr Seddon is artisan and not agricultural in his instincts; still he ought to know that the bulk of the freeholders in New Zealand, instead of waxing rich and prosperous through unearned increment, work longer hours and harder for less returns than the average wage-earner, and that where freeholders do prosper they cannot help benefiting the whole community and enriching the State. There are thousands of men willing to pay dearly for the privileges of the freehold, but there are very few who will pay for the sake of farming land in the interests of the State, or rather for the benefit of those who dwell in cities, and enjoy the pleasure and conveniences of what they call civilisation. Some of our City agitators are very much afraid of the settler benefiting by public works, in the shape of increased land values, but increased land values are anything but a blessing to the genuine farmer…
“History has proved again and again that it is the land-owner who can be depended upon to fight for and work for his country… It will be a bad day for New Zealand when the freehold is done away with, if an enemy appears at our gates, and the nation has to struggle for its existence…”
From 1912, Massey’s Reform government consolidated the alliance by moving quickly to grant crown tenants the right to purchase freehold on generous terms. Massey also energetically promoted the politics of freeholder-militarism alluded to in the Wairarapa Daily Times article. Two days after becoming Prime Minister, he was appointed honorary commandant of the Legion of Frontiersmen, an ultra-patriotic paramilitary outfit set up throughout the British Empire in the early years of the twentieth century. The Bay of Plenty Times reported Commandant Allen Bell telling the meeting “the Legion of Frontiersmen was not by any means a new idea. The Forest Rangers in the Maori War excelled the Imperial troops, and beat the Maoris at their own game. (Applause).”
The first test of the alliance came in 1913, and the ‘enemy at the gates’ was the working class at home. Strikes began on the Wellington waterfront and in the Huntly coal mines in late 1913, quickly spread to other ports and mines, and took on the dimensions of a general strike in Auckland. Massey responded to the challenge by mobilising the countryside against the town: thousands of farmers, farm workers and others (including some from the city) were organised to march on the waterfront in Auckland, Wellington and elsewhere. Many were mounted on horseback and carried their own firearms and stock whips. They were enrolled as “Special Constables” with the task of crushing the strike, together with the police and armed forces.
It was a development for which the labour movement was ill-prepared.
- Anderson, Len, Throughout the East Coast, The Story of Williams and Kettle Ltd, Pictorial Publications Ltd, Hastings, 1974. p31-39
- Geoffrey W. Rice. ‘Gould, George‘, from the Dictionary of New Zealand Biography. Te Ara – the Encyclopedia of New Zealand, updated 1-Oct-2013 URL: http://www.TeAra.govt.nz/en/biographies/4g16/gould-george
- Gustafson, Barry, ‘Massey, William Ferguson‘, from the Dictionary of New Zealand Biography. Te Ara – the Encyclopedia of New Zealand, updated 13-Nov-2013 http://TeAra.govt.nz/en/biographies/2m39/massey-william-ferguson
- Lenin, Vladimir Ilyich, Agrarian Programme of Social Democracy, in Lenin Collected Works, Progress Publishers, Moscow 1978, Vol 13, pp319-20. See also https://www.marxists.org/archive/lenin/works/1907/agrprogr/ch03s7.htm
Earlier articles in this series:
1. Origins of the Working Class in New Zealand