Compromise, But Also Independence

If you are a "Wizard Of Oz" fan then you will know that to stand up to the Wicked Witch of the West takes heart, brains and courage. It is the same with Western capitalism. Labour leader Walter Nash had heart and brains aplenty but, like most Labour political leaders when it came to standing up to the wicked witch, he was inclined to compromise. The times when he stepped outside the mould intrigue me because they show an independence of thought and action that could well be studied by today's Labour leaders.

By 1935 Walter Nash was no longer the pacifist he had been in his youth. However, unlike wartime Prime Minister Peter Fraser, he did not become a post-war Cold War warrior. Perhaps a contributing factor was that he had been the victim of anti-Communist laws in 1921. He was prosecuted and fined for unwittingly bringing in banned pamphlets in his luggage. The magistrate said that the pamphlets which included Bukharin's "Programme Of The World Revolution" were as "dangerous as putting typhoid germs in the city reservoir". Nash later discovered that the incendiary pamphlet was on the shelves of the Parliamentary Library.(1)

I met Walter Nash in the early 1960s when I was on one of the Easter Campaign for Nuclear Disarmament (CND) peace marches and he called in to our overnight stop - if memory serves - in Lower Hutt. He was then the Leader of the Opposition Labour Party and I was impressed by his supportive gesture.

In recent times I come across accounts of Walter Nash a lot thanks to my research interests and the hours I spend in the National Archives perusing Ministry of Foreign Affairs files. He only served one term as Prime Minister (1957-1960) but he was Minister of Finance for 14 years, until Labour went out of office in 1949. He was also New Zealand's Washington Minister (in today's terms Ambassador) in 1942 and 43.

WB Sutch On Nash

More recently, I have been thinking about Walter Nash and his role in the first and second Labour Governments - that time of dramatic change in the second half of the 1930s. Economist Dr William Sutch was a close contemporary observer of Labour's social, economic and foreign policy reforms, so I am drawing heavily on his analysis in his "The Quest For Security In New Zealand: 1840-1966". (2)

As an aside I find it deeply distressing that Dr Sutch's amazing contribution to New Zealand is still being overshadowed by spy stories. Fellow economist Brian Easton describes him as a "nation-builder" and it is a terrible irony that he should be suspected of some kind of disloyalty given how strong a critic he was of New Zealand's dependency on imperial political and economic ties. Sutch was a member of Walter Nash's staff on his long trip abroad in 1936-37 when Nash sought support from the international finance machine for New Zealand's change of economic direction. At the time New Zealand had only one overseas diplomat - the High Commissioner in London, William Jordan.

As Sutch describes it, Nash achieved much in London, particularly in securing continued access for our meat and dairy exports - free of levies. Nash's hectic schedule of international meetings and trade lobbying "did a great deal to increase the status of New Zealand in economic discussions in World War 11 and after".(3) But the British financial system was not willing to accept all of Nash's proposals, especially those that related to helping New Zealand protect her developing industries.

Nash's critics on the Left pointed out that Labour had, in 1936, already conceded much to the traditional financial machine. It nationalised the Reserve Bank in 1936 but was reluctant to nationalise the Bank of New Zealand, despite this having been a clear part of Labour's pre-1935 policy. John A Lee wanted New Zealand to move away from being "the Empire's dairy farm, a distributing store for overseas manufacturers".(4) Sutch suggests that Labour could have taken control of foreign exchange and adjusted it to fit the needs of New Zealand development.

It could have also have set up an industrial finance corporation. These measures would have enabled New Zealand to shed its "its colonial economic status".(5) In 1939 the clash between Lee and his caucus supporters and the Labour Cabinet escalated over whether or not to challenge the international banking system. The critics lost when Nash succeeded in negotiating a loan which favoured the position of local investors at the expense of local body rates and thereby earned Nash brownie points on his next trip to London. London conceded that it would not raise "objection in principle" to New Zealand import controls. (6)

Sutch believed that Nash and Fraser were overly influenced by ties of loyalty to Britain and by the contemporary doctrine of free trade. They wanted to keep onside with the press and influential opinion-makers such as the merchants, bankers, importers and farmers. They were "prisoners of the past".(7) John A Lee had support in caucus but when his critical article in the independent journal Tomorrow also attacked Savage's leadership he was expelled from the Party.

A 2013 United Nations' assessment states that the global value chains (inter-firm and intra-firm) controlled by transnational corporations account for some 80% of global trade.(8) So, looking back, even the "conservative" tactics of Walter Nash and Peter Fraser succeeded in a degree of import control that seems remarkable.

The import licensing of the late 1930s ensured that local manufacturers produced goods that would otherwise have been imported. New manufacturing businesses did well during World War 11. Think Fisher and Paykel whiteware and Masport lawnmowers. Unfortunately, the increased production was not reflected in the wages of the workers whose labour produced the new goods. Wartime rationing of basic goods which continued after the war was also a source of resentment.

Enlisting In The Cold War

Nash and Prime Minister Fraser were held in good standing by Western leaders at the end of the war. Unsurprisingly, since New Zealand had made a disproportionately generous contribution to the war effort in terms of personnel mobilised, food supplies, military clothing, ammunition and much more. Nash contributed as the first post-war chairman of the International Labour Conference and at international financial meetings he promoted full employment and the rights of underdeveloped nations.

US President Truman's determination to reduce Soviet influence in Europe and contain the "Communist threat" throughout the world impacted on the humanitarian initiatives, supported by New Zealand. The United Nations Relief and Rehabilitation Administration fell victim to the US and British withdrawal of financial support, and the United Nations International Children's Emergency Fund (UNICEF) came close to succumbing to the same fate. New Zealand and Australia helped its survival.(9)

New Zealand enlisted in the Cold War with strong resistance from militant unions and independent minded church and academic figures. Sutch believed it was Labour's acceptance of "social amelioration", as opposed to a more thoroughgoing change in the colonial economy, that eased the way for New Zealand's acceptance of anti-Communist and anti-Soviet views.

Matters were not helped by the fact that Prime Minister Peter Fraser was, from the start, a firm Truman supporter and the trade unions were led by arch-conservative Fintan Patrick Walsh, Vice President of the Federation of Labour.(10) According to Sutch, Walsh, who was against State intervention in the economy, "was the economic justification for the cautious Nash". (11)

Labour's retreat from earlier principles is illustrated by Sutch with this amusing quote from Minister of Social Security Parry, in late 1947. He was replying to some gentle criticism: "I don't understand you young blokes. Labour has achieved the programme it battled for. The family benefit to all is the coping stone. We have the best social security in the world. Everybody has a job. We have the protection of the Arbitration Court. Everything is done". (12)

The wartime regulation banning strikes and lockouts was not rescinded after the war and the Government assumed the power to deregister unions. In the post-war years a cosy partnership with the Federation of Labour and its conservative leaders enabled Labour to resist any suggestion of worker control, collective bargaining outside the arbitration system or even improved pay for women workers. The Carpenters Union was deregistered for demanding travel pay. The watersiders had no support from the Government when they struggled to improve their conditions of work which included handling dangerous substances with totally inadequate protection.

1951: "Neither For Nor Against" Locked Out Wharfies

The 1951 waterfront lockout is probably the best-known industrial dispute in our history. It is remembered for the staunch union loyalty of the waterside workers over 151 days, but also as a period of vicious State-imposed repression under emergency regulations. Effectively, the country was turned into a Police State: it was illegal to support the locked-out workers in word or deed and the Police were given unbridled powers including arrest without warrant. The dispute took place under a National government but the seeds of the conflict were planted in the Labour years.

Mr Nash was pilloried for the statement he made at a public meeting in the Auckland Domain in May 1951, four months into the dispute. Nash had been championing free debate about the dispute and calling for the National government to convene Parliament. But when his chance came to address a crowd of some 8,000, he said he was "neither for nor against" the wharfies.

At that point the audience called for charismatic Watersiders' Union President Jock Barnes to speak but Nash stopped him. Barnes later wrote: "Nash's performance was indicative of the spineless and despicable attitude of the Labour Party". With one or two exceptions "the Labour seat-warmers didn't have the guts of a disembowelled whitebait". (13)

Sutch suggested that if Nash had allied himself with the watersiders and the Trade Union Congress (the TUC was the progressive rival to the compliant Federation of Labour) "he might have got the Labour movement and many of the public behind him".(14) He could, for example, have accompanied TUC leaders to protest at the severity of the emergency regulations. When the stakes were high Nash was resting on the law and prospect of a compulsory conference on the issue. He believed that, as a politician, he should be neutral so as not to prejudice the conference, a correct position according to Sutch. But one that played out badly with his critics on both Right and Left.

Prioritised International Diplomacy

When we fast-forward to Nash's term as Prime Minister, what stands out is the importance he accorded to international diplomacy. Jacinda Ardern would do well to take note! George Mallaby, who was British High Commissioner during Nash's time as Prime Minister, observed that New Zealanders were proud to have Nash representing them. Other world leaders listened to him because "his views were well-informed and liberal and, although occasionally he seemed to be lost in visionary speculations, he arrived in the end at a practical, hard-headed and courageous attitude".(15)

The accounts of Nash's officials are not quite so generous: they said that Nash spoke too long when he was at foreign government functions, he made statements without conferring first and sometimes his words needed to be retracted later. But those jibes can be read as confirmation that Nash was not content to rely solely on the advice of his officials.

Keith Sinclair, Nash's biographer, says that by 1958, Nash regarded world affairs and peace and disarmament as the great moral issues to which New Zealand should make a contribution. New Zealand could stand back from the superpower confrontation and speak for the smaller powers. Nash saw the security threat in Asia as more about poverty and hunger than about political ideologies. During the 1959 crisis in Laos the US-backed Government accused North Vietnam of supporting insurgents.

Nash dared to question the US about the extent of its economic and political backing for the Government of Laos, and he insisted that the South East Asia Treaty Organisation (SEATO) allies should hold back from intervention while the situation was unclear. In later years during the Vietnam War, according to Sinclair, Nash "considered that his resistance to American pressure had been one of his most important deeds".(16) Walter Nash persistently lobbied for the diplomatic recognition of China and for its inclusion in the United Nations - meeting strong resistance from US President Eisenhower when he brought that up! But he backed away from New Zealand acting unilaterally to initiate diplomatic ties.

Supported Independent West Papua, United New Guinea

In my recent book "See No Evil: New Zealand's Betrayal Of The People Of West Papua" I refer to Nash's position on Indonesia in 1958, a period when the US and Britain were both involved in covert intervention in support of dissident elements. George Mallaby, the British High Commissioner called on him in December 1957 to sound him out about New Zealand's attitude to backing this so-called "Outer Islands Rebellion".

US Central Intelligence Agency (CIA) Chief, Allen Dulles, had met with NZ diplomats in Washington around the same time. Nash said that efforts from outside to help one element of a nation against another generally became publicly known. He subsequently opposed US open intervention - indeed he considered the prospect "quite horrifying".(17) He was right about covert intervention becoming public - in May 1958 a US pilot, Allen Pope, was shot down while flying a B26 for the rebels and the CIA. He carried enough incriminating material with him for there to be no doubt of who he was serving.

I also considered Walter Nash's 1960 initiative towards a solution of the building crisis in West Papua, then known as West Irian. In essence, Nash's idea was built around the idea that both halves of the New Guinea island - the eastern Australian-governed territory (today's Papua New Guinea) and western Dutch-ruled territory should be brought to independence and supported to found a new nation.

He wanted the people to be consulted and he was not dismayed when the Indonesian Ambassador based in Canberra came over to remonstrate with him. He said independence might take time to achieve but the people of New Guinea "like everyone else, would want independence".(18) The proposal did not fly - New Zealand diplomats found no support in London, Canberra or Ottawa.

However, the call for a united New Guinea "from Sorong to Samarai" remains strong today. Samarai is at the eastern tip of Papua New Guinea and Sorong the western tip of West Papua and the phrase is a play on the Indonesian nationalist slogan which describes the unitary state as extending "from Sabang to Merauke". Sabang is at the northern extremity in Aceh and Merauke is in the southernmost part of West Papua.

In 1960 Walter Nash visited the Soviet Union where he met senior leaders and had an audience with Premier Nikita Khrushchev at his Black Sea villa. They discussed disarmament and Nash tried to persuade Khrushchev to be more open to Western disarmament proposals in the ongoing Geneva negotiations.

Humanitarian & Egalitarian Ideals

Nash spoke approvingly to the media of the progress he had seen in the Soviet Union since an earlier visit back in 1937. He was accused of bending too far towards the Soviet state. But there were limits to Nash's disarmament initiatives. When the British government asked for help monitoring conditions for the British nuclear tests on Christmas Island, traditional ties won. In 1958 Nash authorised a New Zealand frigate to take part in weather reporting.

Equally puzzling was Nash's position during the "no Maoris, no tour" campaign of 1960. Nash was a critic of apartheid and New Zealand voted against it at the UN. One of New Zealand's largest petitions called for the abandonment of the All Blacks' tour, but still Nash supported the Rugby Union. He thought it was in the interest for Maori to be excluded and thus avoid undignified treatment in South Africa. According to biographer Sinclair only the Security Intelligence Service (SIS) was formally advising Nash against supporting the No Tour campaign because it was too dominated by Communists! The tour went ahead.

With the wonderful benefit of hindsight, I look back on the misjudgements and the compromises, but I remain impressed that Nash was a leader who sought out independent views and weighed the issues for himself. His initiatives both at home and abroad were based on humanitarian and egalitarian ideals:

"all men and women, of whatever colour, whatever creed, whatever class" should have "an opportunity to live the abundant life rendered possible by the Creator of all good things"(19)

Endnotes

1. Keith Sinclair, "Walter Nash" (Auckland University Press, 1976), p.59 and Note on p.375.
2. William Sutch, "The Quest For Security In New Zealand: 1840-1966" (Oxford University Press, London, 1966).
3. Ibid. p211.
4. Ibid. p176.
5. Ibid. p231.
6. Ibid. p214.
7. Ibid. p235.
8. "Global Value Chains And Development: Investment And Value-Added Trade In The Global Economy", United Nations Conference on Trade and Development, https://unctad.org/en/PublicationsLibrary/diae2013d1_en.pdf
9. Ibid. p331-332.
10. Walsh was elected to the position of President in 1953, but it is commonly agreed that he was the driving force during the Presidency of his predecessor, AW Croskery.
11. Sutch, p337
12. Ibid. p341.
13. Jock Barnes, "Never A White Flag: The Memoirs Of Jock Barnes" (Victoria University Press, Wellington, 1998) p203.
14. Sutch, p381.
15. Keith Sinclair, "Walter Nash" (Auckland University Press, 1976) p321
16. Sinclair, p324.
17. Maire Leadbeater, "See No Evil: New Zealand's Betrayal Of The People Of West Papua" (Otago University Press, Dunedin, 2018) p60.
18. Ibid. p67.
19. Walter Nash, "New Zealand A Working Democracy" (JM Dent and Sons, London, 1944) p282.