laid out. But prosperity brought on a feverish land speculation; prices of wool and wheat fell in 1879 and went on falling. Faulty banking ended in a crisis, and 1879 proved to be the first of sixteen years of almost unbroken depression. Still, eight prosperous years had radically changed the colony. Peace, railways, telegraphs (including cable connexion with Europe), agricultural machinery and a larger population had carried New Zealand beyond the primitive stage. The provincial councils had been swept away in 1876, and their functions divided between the central authority and small powerless local bodies. Politics, cleared of the cross-issues of provincialism and Maori warfare, took the usual shape of a struggle between wealth and radicalism. Sir George Grey, entering colonial politics as a Radical leader, had appealed eloquently to the work-people as well as to the Radical “intellectuals,” and though unable to retain office for very long he had compelled his opponents to pass manhood suffrage and a triennial parliaments act. A national education system, free, non-religious and compulsory, was established in 1877. The socialistic bent of New Zealand was already discernible in a public trustee law and a state life insurance office. But the socialistic labour wave of later years had not yet gathered strength. Grey proved himself a poor financier and a tactless party leader. A land-tax imposed by his government helped to alarm the farmers. The financial collapse of 1879 left the treasury empty. Grey was manœuvred out of office, and Sir John Hall and Sir Harry Atkinson, able opponents, took the reins with a mission to reinstate the finances and restore confidence.
Roughly speaking, both the political and the industrial history of the colony from 1879 to 1908 may be divided into two periods. The dividing line, however, has to be drawn in different years. Sixteen years of depression were followed, from 1895 to 1908, by thirteen years of great prosperity. In politics nearly twelve years of Conservative government, or at least capitalistic predominance in public affairs, were succeeded by more than seventeen years of Radicalism. Up to January 1891 the Conservative forces which overthrew Sir George Grey in 1879 controlled the country in effect though not always in name, and for ten years progressive legislation was confined to a mild experiment in offering crown lands on perpetual lease, with a right of purchase (1882), a still milder instalment of local option (1881) and an inoffensive Factories Act (1886). In September 1889, however, Sir George Grey succeeded in getting parliament to abolish the last remnant of plural voting. Finance otherwise absorbed attention; by 1880 the public debt had reached £25,000,000, against which the chief new asset was 1300 m. of railway, and though the population had increased to nearly half a million, the revenue was stagnant. A severe property-tax and an increase of customs duties in 1879 only for a moment achieved financial equilibrium. Although taxation was seconded by a drastic, indeed harsh, reduction of public salaries and wages (which were cut down by one-tenth all round) yet the years 1884, 1887 and 1888 were notable for heavy deficits in the treasury. Taxation, direct and indirect, had to be further increased, and as a means of gaining support for this in 1888 Sir Harry Atkinson, who was responsible for the budget, gave the customs tariff a distinctly protectionist complexion.
During the years 1879–1890 the leading political personage was Sir Harry Atkinson. He, however, withdrew from party politics when, in December 1890, he was overthrown by the Progressives under John Ballance. Atkinson’s party never rallied from this defeat, and a striking change came over public life, though Ballance, until his death in April 1893, continued the prudent financial policy of his predecessor. The change was emphasized by the active intervention in politics of the trade unions. These bodies decided in 1889 and 1890 to exert their influence in returning workmen to parliament, and where this was impossible, to secure pledges from middle-class candidates. This plan was first put into execution at the general election of 1890, which was held during the industrial excitement aroused by the Australasian maritime strike of that year. It had, however, been fully arranged before the conflict broke out. The number of labour members thus elected to the general assembly was small, never more than six, and no independent labour party of any size was formed. But the influence of labour in the Progressive or, as it preferred to be called, Liberal party, was considerable, and the legislative results noteworthy. Ballance at once raised the pay of members from £150 to £240 a year, but otherwise directed his energies to constitutional reforms and social experiments. These did not interfere with the general lines of Atkinson’s strong and cautious finance, though the first of them was the abolition of his direct tax upon all property, personal as well as real, and the substitution therefor of a land-tax of 1d. in the £ on capital value, and also of a graduated tax upon unimproved land values, and an income-tax also graduated, though less elaborately. The graduated land-tax, which has since been stiffened, rises from nothing at all upon the smaller holdings to 3d. in the £ upon the capital value of the largest estates—those worth £210,000 and upwards. Buildings, improvements, and live stock are exempted. In the case of mortgaged estates the mortgagor is exempted from ordinary land-tax in proportion to the amount of his mortgage. On that the mortgagee pays at the rate of 34d. in the £. In 1896 municipal and rural local bodies were allowed to levy rates upon unimproved land values if authorized to do so by a vote of their electors, and by the end of 1901 some sixty bodies, amongst them the city of Wellington, had made use of this permission. The income-tax is not levied on incomes drawn from land. In 1891 the tenure of members of the legislative council or nominated Upper House, which had hitherto been for life, was altered to seven years. In 1892 a new form of land tenure was introduced, under which large areas of crown lands were leased for 999 years, at an unchanging rent of 4% on the prairie value. Crown tenants under this system had no right of purchase. In the same year a law was also passed authorizing government to repurchase private land for closer settlement.
On Ballance’s sudden death in April 1893 his place was taken by Richard Seddon, minister of mines in the Ballance cabinet, whose first task was to pass the electoral bill of his predecessor, which granted the franchise to all adult women. This was adopted in September 1893, though the majority for it in the Upper House was but two votes. In 1893 was enacted the Alcoholic Liquor Control Act, greatly extending local option. In 1894 was passed the Advances to Settlers Act, under which state money-lending to farmers on mortgage of freehold or leasehold land was at once begun. The money is lent by an official board, which deals with applications and manages the finance of the system. In thirteen years the board lent out over five millions and a half, and received repayment of nearly two millions of principal as well as over one million in interest at 5%. Borrowers must repay 12% of their principal half-yearly, and may repay as much more as they choose. Profits are paid over to an assurance fund. No losses were incurred during the thirteen years above mentioned. The net profit made by the board in 1906 was £45,000. The same year also saw the climax of a series of laws passed by the Progressives affecting the relations of employers and workmen. These laws deal with truck, employers’ liability, contractors’ workmen, the recovery of workmen’s wages, the hours of closing in shops and merchants’ offices, conspiracy amongst trade unionists, and with factories, mines, shipping and seamen. In 1895 a law controlling servants’ registry offices was added. In 1897 all shipowners engaging in the coasting trade of the colony were compelled to pay the colonial rate of wages.
Meanwhile the keystone of the regulative system had been laid by the passing of the Industrial Conciliation and Arbitration Act, under which disputes between employers and unions of workers are compulsorily settled by state tribunals; strikes and lock-outs are virtually prohibited in the case of organized work-people, and the conditions of employment in industries may be, and in many cases are, regulated by public boards and courts. The years 1896, 1897 and 1898 were marked by struggles over the Old Age Pensions Bill, which became law in November 1898. In 1898 the divorce law was amended on the lines of the Stephen Act of New South Wales, a change which helped to treble the number of petitions for divorce in the next seven years. In 1898 also the
