Politics Shapes the Politics Shapes the EconomyEconomy

Investing In The EconomyInvesting In The Economy Close relationship between politics and the Close relationship between politics and the economy during the 19economy during the 19thth century. century.A major concern of Pakeha politics was to A major concern of Pakeha politics was to facilitate economic growth and development for facilitate economic growth and development for the settler population.the settler population.One of the main ways was through investment One of the main ways was through investment in public works, immigration schemes and most in public works, immigration schemes and most importantly, providing land for settlers.importantly, providing land for settlers.

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Gubernatorial System of Government Under Gubernatorial System of Government Under Hobson and FitzroyHobson and Fitzroy

Needed to acquire land to sell to settlers.Both proved unsuccessful at this because:Britain expected NZ to be self-supporting

using the profit from selling land to promote economic development.

However, Maori rarely offered large areas of land for sale.

Created a cyclical effect: shortage of land resulted in a shortage of funds and high land prices.

In response to this Fitzroy suspended the

Crown’s right of pre-emption and imposes a high tax on lands sales as a way of obtaining funds.

Largely unsuccessful and is one of the reasons why settlers wanted to replace the Gubernatorial system with settler self-government and a Constitution.

Gubernatorial System of Government Under Gubernatorial System of Government Under Hobson and Fitzroy cont’dHobson and Fitzroy cont’d

Late 1845- Governor Grey succeeded in Late 1845- Governor Grey succeeded in acquiring land for settlersacquiring land for settlers

British Colonial Office abandoned policy of self-supporting colonies and provided funds to purchase land.

Grey acquired Maori land through the “wasteland” principle. i.e. He assumed, without payment, ownership of any land not occupied or cultivated by Maori.

Through this method and purchases he acquired 30 million acres of the South Island and 3 million acres of the North Island. Thus providing the basis of the Pakeha economy.

There are 66.5 million acres in NZ.

The Provincial Councils 1852-1876The Provincial Councils 1852-1876Initially 6 provinces-Auckland, Taranaki,

Wellington, Nelson, Canterbury and Otago.Hawkes Bay, Marlborough, Westland and Southland added after 1858.

Became a powerful part of new Govt.Assumed responsibility for regional

colonisation and development.Funded by a share of revenue from land

sales within a province and a part share of the nations custom revenues.

They could initially arrange loans in Britain.

Provinces established in the New Provinces established in the New Zealand Constitution Act of 1852Zealand Constitution Act of 1852

Economic development under the Economic development under the Provincial CouncilsProvincial Councils

Regional variation a striking feature.Responsible for

(1) land distribution,

(2) public works,

(3) immigration and services

(4) education and

(5) hospitals within their province

Some provinces were far more successful than others.

Canterbury Provincial Council BuildingCanterbury Provincial Council Building

Land DistributionLand Distribution

Vital to facilitate land sales to Pakeha as this provided a large part of a provinces income and future economic growth through development of the land.

Some provinces had slow land sales, therefore, slower economic growth and a strong dependence on central govt for funds. Eg Taranaki.

In contrast, most of the land in the Sth Island had already been purchased by Grey

and was well on its way to being developed and providing a solid economic base for the provinces to grow i.e. wool, grain and gold.

Most Nth Island provinces were forced to offer assistance such as deferred payment, liberal credit and, in Auckland, free land grants to particularly desirable settlers like SCHOOL TEACHERS!!!!!!!

Public WorksPublic Works

Public works schemes organised by individual provinces for the most part.

For example, roads, harbours and tunnels etc.However, as a consequence of the variations in

economic development between provinces, the level, standard and extent of public works varied greatly between provinces. i.e. there was no national roading plan to link different regions so transport was a big problem for goods etc within regions.

ImmigrationImmigration

New settlers were regarded as vital by provinces for economic growth.

Provincial councils actively recruited immigrants mainly from Australia and Great Britain.

Used paid immigration agents as well as offering assisted or free passages to desirable immigrants.

Often targeted certain groups of immigrants depending on needs of a province, e.g. in the 1850s and 1860s Canterbury and Otago targeted single women to redress a gender imbalance, domestic servant shortage and to marry and have children. Chinese miners were also targeted to work the gold fields.

EducationEducation

Was the responsibility of individual provincial councils.

However, most provided little in the way of funding so the standard of education was low along with the attendance rates.

The Role of Central Government in The Role of Central Government in Fostering Economic DevelopmentFostering Economic Development

Within 2 decades of its creation, central government’s role changed from occupying a position secondary to that of the provincial councils to being the major mechanism driving the nation’s economic development.

Race Relations has been traditionally seen by many historians as being the major concern of central government until the late 1960s.

However, the passing of the NZ Settlements Act of 1863 and the Native Land Act of 1865 can also be viewed as an economic initiatives of central govt.

Directly or indirectly these 2 Acts ensured that the major economic resource in 19th century NZ could be more readily transferred from Maori to Pakeha control irrespective of which province settlers resided in.

By the late 1860s…..By the late 1860s…..

underlying economic problems combined with recession and the NZ Wars challanged even Canterbury and Otago’s ability to manage economic development on a regional basis.

As a result, in 1868, central government was forced to terminate the provinces’ power to raise loans which opened the way for greater central government involvement in the economy.

Abolition of the ProvincesAbolition of the Provinces

In 1870, Julius Vogel launched a programme of large scale borrowing to fund national public works and immigration schemes thereby ensuring that the central government became the major player in the economic development of the nation.

Political change was enacted in 1876 when the provincial tier of government was abolished resulting in the central government becoming responsible for economic development nationally.

ReferencesReferences

• Northcott, D., & Sheryll Ofner (1995), In Pursuit of Prosperity. Economic and political change in nineteenth century New Zealand: A textbook and workbook, Auckland: White Ribbon

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