1893 - 1961
In the early 1940s an urban
businessman masquerading as a farmer united a wide variety of right-leaning
political groups into the modern National party.
Earlier, the political
climate of the 1930s had produced, in very general terms, three distinct
groupings: the working class, the wealthy urban business class, and farmers. The
Labour party, established in 1916, was secure with its natural demographic of
workers, unions and less wealthy urban dwellers; Reform was set up in 1919 to
serve the farming and rural community almost exclusively; and the United party
burst on the scene in 1928 to provide a home for the professional sector, urban
businessmen and what remained of old-style Liberal supporters.
In 1935 the Reform and
United parties were battered and bruised. Shackled together in a coalition
government of convenience they had endured the country’s worst economic
depression and then faced a humiliating election loss to Labour. It was now time
to take stock and consider their options. A meeting was held in Wellington with
the aim of bringing all right-wing and centre-right groupings together into a
single unit capable of challenging Labour’s large majority. The meeting was
called by the National Political Federation – the body which had run the
unsuccessful United/Reform re-election campaign in 1935. It was attended by more
than 200 delegates, including most of the re-elected non-Labour MPs together
with other disparate groups whose dislike of socialism was the one thing held in
common. The meeting was left in no doubt that a fresh start was needed and a
clean break made from the United/Reform coalition, discredited by their handling
of the depression. The meeting resolved to establish a new party called
National. Among those present was Sidney Holland, a new coalition MP and one of
only two new opposition members elected against the Labour landslide.
Sidney Holland had stood in
the Christchurch North electorate in 1935 as a late replacement for his father
Henry Holland who had held the seat since 1925. Henry Holland was a reluctant
convert to the Reform cause. His first (unsuccessful) foray into national
politics was in 1919 as a “Progressive Independent Liberal”. Only he knew what
that meant but when he tried again in 1925 he put himself on the Reform ticket
after reassurance from party leader Gordon Coates that he would not be tied hand
and foot to the party line and could “use his common sense”. He was elected, and
was successful again in 1928 and 1931. An injury prevented him from standing for
a fourth term in 1935 and his son Sidney took over the seat, holding it until
his resignation in 1957.
While the younger Holland
detested socialism, he was not a natural fit in the coalition opposition –
certainly not the Reform wing of it. He appealed to his upper-crust electorate
(renamed Fendalton in 1946) simply by being strongly anti-Labour and a believer
in protectionism and tariffs. He won the seat in 1935 by 971 votes, a creditable
result when his fellow coalition candidates were falling like flies and the
caucus was reduced from having a governing majority to a paltry nineteen
members. His confidence was high and he relished the chance to be part of the
new National party.
Holland was not a cerebral,
well-read man like Peter Fraser but he had boundless energy and enthusiasm, He
was a good debater – upfront, brash and fearless. His entry into parliament on
27 November, 1935 was his first step on the way to the prime minister’s office.
Sidney Holland was born in
Greendale, 50 km south-west of Christchurch on 18 October, 1893. At school he
hated reading and learned principally by listening and doing. Sport came more
naturally and he eventually played hockey for Canterbury, later becoming an
international referee. He secured jobs in hardware and engineering firms and
volunteered for war service in France before being invalided home with a serious
disease which resulted in the removal of one lung. He recovered and went into a
business partnership with his brother Stanley, manufacturing spray pumps and by
the late 1920s had moved into vehicle sales. The business was adversely affected
by Coates’ 1933 decision to devalue the NZ currency and he lost faith somewhat
in the governing coalition. Coates was also opposed to tariffs as a means of
protecting manufacturing – his was a free trade policy which, like devaluation,
was favoured by farmers. Holland briefly joined the NZ Legion, a right-wing
protest movement made up of urban manufacturing interests who felt abandoned by
the coalition which they thought gave undue priority to the farming sector.
While campaigning for the
1935 election Holland declared himself to be a “straight-out supporter of the
coalition government”, then proceeded to condemn or disagree with nearly
everything they had done. His maiden speech, delivered on 21 April, 1936 was
dedicated largely to the support needed for the manufacturing industry. He
believed that anything that could be produced economically in New Zealand should
be given tariff protection, and proceeded to list car parts, fruit canning and
confectionery as wide-ranging examples of industries that could be undertaken in
New Zealand. Opposition Labour MPs thought they were hearing a speech from their
own side of the aisle. But manufacturers were delighted to finally have a
champion voicing their concerns in a right-wing party. Gordon Coates and Adam
Hamilton (National’s first leader, elected in October) both showed little
enthusiasm for Holland’s reasoning but times were changing and it would be
Holland who established a broader-based party that could retain rural votes and
also attract the ever-growing business interests that had been looking for a
political home since the death of Massey in 1925.
The fledgling National party
embarked on a growth strategy and by 1938 claimed 100,000 members. Holland
accepted invitations to speak at some of the new branches and as one of the
party’s few young faces he built up a following. As well as parading his own
policies he was scathingly critical of the ruling Labour party’s. He believed
the social security bill was unworkable as it committed expenditure before the
requisite income could be reasonably assured. National was also warning voters
that Labour would soon be taking control of newspapers and farms. But none of
this made even the slightest dent in Michael Joseph Savage’s persuasive
re-election campaign. His party retained power in 1938 with an increased
majority. Holland’s own winning margin was reduced from 971 to 492.
Morale dropped within
National. The aftermath of the election saw the emergence of the People’s
Movement (yet another brainchild of the ubiquitous entrepreneur AE Davy,
referred to in articles on Ward and Coates) and other more extreme right-wing
factions. National, alarmed at the loss of members to these groups, took a hard
look at the leadership of Adam Hamilton. Paradoxically it was the People’s
Movement itself that expressed the need for the anti-Labour groups to show some
solidarity and that they could look at merging with National – but only if there
was a leadership change. In November, 1940 the 21-strong National caucus
discussed the issue and Hamilton was advised to stand down. He insisted on a
secret ballot. Sidney Holland was one of two caucus members whose name had been
circulated for some time when the question of leadership arose. The other was
the more experienced Keith Holyoake who, as a farmer, had the support of the
rural wing. But Holyoake had lost his seat in 1938 and, with several ex-United
urban businessmen now in the caucus, Holland became the obvious favourite. He
won the “secret” ballot by 13 votes to 8. Another step on his way to the prime
minister’s office.
In terms of uniting the
disparate right-wing groups Holland’s impact was immediate. In 1941 the People’s
Movement, the New Liberal Party and a soldiers’ party had all merged with
National following Holland’s personal negotiations and his much more aggressive
attacks on Labour. Within several more years other splinter groups had made
peace with National. Substantial numbers of disaffected, mainly urban
anti-Labour voters, many of them Ward supporters from 1928, now knew the
National party could accommodate them.
This still left Holland the
task of making peace with the party’s original support base – the rural sector.
Remembering the National leader’s 1936 maiden speech, farmers feared he would
tilt the party towards manufacturers with his staunch support for tariffs, a
policy despised by farmers. His somewhat artificial response was to purchase a
sheep and cattle farm, install a manager and create photo opportunities by
bustling about the property seemingly engaged in work on the land. Rather more
pragmatically, he appointed William Polson, a former Farmers Union president, as
his unofficial deputy. Holland was now a “farmer”, a businessman, and the leader
of a political party which had drawn a wide range of anti-Labour groups into a
single entity.
His next job was to try and
win an election. The war postponed the scheduled 1941 ballot and it was further
postponed after the establishment of a war administration and war cabinet
involving both parties. Prime minister Peter Fraser eventually, and somewhat
reluctantly, called an election for 25 September, 1943. Holland’s wide-ranging,
vague and ambiguous campaign message was “economic prosperity and social welfare
plus individual freedom and less bureaucracy.” He also promised “to maintain and
expand manufacturing with full protection against products from low-standard
countries” without over-stressing it for fear of a backlash from farmers. He was
also scathing over the performance of the Labour government. The campaign failed
and Labour was re-elected, but with a reduced majority. It was too securely
entrenched and had managed the economy and the war effort extremely well after
having pulled the country out of the depression. It was a major disappointment
for Holland.
There was a bright side. The
1943 election brought in seventeen new National MPs and the return of Keith
Holyoake who had moved from marginal Motueka to the safer seat of Pahiatua.
Things were looking up. Better still, the next election in 1946 saw Labour’s
majority reduced to only four (the four Maori seats) and a further infusion of
new National MPs including future high-fliers John Marshall, Ralph Hanan and Tom
Shand.
It was taking a long time
but National was on the move. And Labour was drifting. As noted in the previous
article, Peter Fraser and his cabinet were suffering post-war weariness. In
power since 1935 and with the cabinet largely unchanged throughout, the party
now belonged to the past. A new outlook was required for post-war reconstruction
and a likely post-war boom. For the first time since 1936 National had become a
viable government-in-waiting. But Holland walked a tightrope. The economy had
recovered largely thanks to Labour’s high government spending and tight import,
wage and price controls along with tariffs. National’s objective was less
government involvement and greater stimulus for private enterprise but with its
broad support base now encompassing the manufacturing sector it was aware of the
risks involved with any rapid removal of controls. It thus campaigned rather
vaguely in these areas in the 1949 election but promised reduced government
spending and the reining in of inflation. Any conflict within the party’s
double-pronged support base (urban and rural) over import control was softened
by the appointment of Keith Holyoake to the now official position of deputy
leader. William Polson had retired following the 1946 election. Bill Sullivan
would have been Holland’s first choice for deputy but he passed him over and
appointed Holyoake specifically on account of his farming background. Farmers
would probably have voted National anyway as they saw no alternative but knew
Holland’s “farming” was a sham and he was not one of them. It was the urban wing
of the party that was assiduously promoting him. Farmer Holyoake’s elevation was
a clear recognition of the continuing importance of the rural base to the party.
National finally won its way
into government in 1949 with 46 seats out of a parliament of 80. Labour lost 8
seats. Sidney Holland was now prime minister.
He quickly earned a reputation as a tough,
even autocratic leader. His cabinet was a mix of experience and youthful
enthusiasm and they hit top gear immediately. Controls on real estate prices
were eliminated and war-time rationing was removed from many items in 1950.
Import control was relaxed only very gradually and tariffs to protect many
locally made items, though not all, were maintained. Building controls were
scrapped and there was a surge in construction. Attempts to reduce government
spending by removing food subsidies resulted in rapidly rising prices as this
lifted the lid from previously suppressed inflation. The Korean war and its
demand for wool stoked domestic inflation still further and subsidies on
household essentials crept back.
Along with high inflation
comes demand for high wages. Under Fraser’s economic stabilisation legislation
the waterside workers union saw little point in pushing too hard for a wage
increase but once Holland had abolished the stabilisation commission they
guessed (wrongly) that in a “freer” wage bargaining environment they could now
make their move.
They did, and it caused New
Zealand’s biggest and longest industrial confrontation. Compulsory arbitration
remained on the statute books and when the union refused to accept it after
launching a nationwide “go-slow” in their quest for a wage increase deemed
excessive by the government, they were either locked out or legally on strike
depending on one’s point of view. A state of emergency was declared under the
1932 public safety conservation act and all emergency powers to keep the ports
operating were implemented by Holland’s government with labour minister Bill
Sullivan showing a particularly strong hand. The union was de-registered and 26
smaller unions registered in its place. The confrontation began in February,
1951 and lasted 151 days, ending only when the union finally relented under
government, public and media pressure. The dispute not only caused industrial
disruption (miners and other workers joined the action), but also social
hardship, economic loss, political division and bitter hatred.
Holland and Sullivan were
generally applauded for their tough stance. Holland recognised that deep
division remained throughout the country and decided to seek a mandate for his
action by calling a snap election later in 1951. It was the right call. His
party gained a further four seats after Labour’s new leader (Walter Nash,
appointed after Fraser’s death in 1950) had equivocated over his party’s
position during the strike and then campaigned rather weakly.
Holland saw the 1951
election victory as more significant than 1949. The cold war was now raging and
he, rightly or mistakenly, detected communist elements infiltrating the union
movement. It now seemed that a centre-right party was the natural party for New
Zealand. National was cementing its place and felt that it had, only now,
assumed full power.
Any euphoria felt by the
government was short-lived however as they found several of their election
promises could not be met. Price controls, subsidies and compulsory unionism all
remained much as they were. High taxes continued to impede growth and fuel
inflation. Holland had earlier expressed his wish to divest the government of
some of its commercial operations but his attempts to sell the National Airways
Corporation (promised as early as 1946) were unsuccessful. He also promised to
involve the private sector in infrastructure but, with the exception of private
participation in the huge Tasman pulp and paper mill in Kawerau, the
bureaucratic public works department retained all the major jobs. State house
building was eased back and tenants were encouraged to buy their own homes. This
brought work to small building firms who benefitted from the need for more
rental houses.
The government’s popularity
received a boost with the royal tour of 1953/54 throughout which the prime
minister placed himself conspicuously in the spotlight alongside the royal
couple for the entire visit. But by 1954 some outside observers had questioned
Holland’s performance as prime minister. With no obvious, or willing,
alternative Holland led National into the 1954 election, complicated by the
surge in popularity of the new Social Credit Political League. While National
saw the new party as a threat, it was Labour that claimed to have lost votes to
it and would otherwise have won the election. In any event, National narrowly
held on to office despite Labour outpolling them in the popular vote.
It was a close call and
Holland wisely rejuvenated his cabinet. He had held finance himself since
becoming PM but now passed it to Jack Watts. Ralph Hanan, John McAlpine, Tom
Shand and Dean Eyre all entered cabinet.
The 1950s was a decade of
contradictions. There was a high standard of living; consumer goods
(refrigerators, etc) were in demand and wages were high. But so too was
inflation and productivity was low by international standards. Tariffs and
import controls remained in place. A balance of payments crisis would confront
the next government in 1958. Holland was slow to recognise that it was also a
decade of unprecedented social change, remaining almost Victorian in his
outlook.
And by 1956 his health was
showing signs of decline. With an election due in 1957 ministers were seriously
thinking about replacing him as leader. Bill Sullivan, a stalwart since the
party was launched, was considered but didn’t have the numbers and in February,
1957 resigned suddenly for family reasons. Attempts by Marshall and Watts to
gauge Holland’s future intentions resulted in the prime minister feeling hurt –
remaining convinced the party and the country not only wanted him but needed
him. He remained in office but an observer described him as becoming “selfish,
forgetful, incompetent and, in some ways, detestable.”
Massey, Ward and Savage had
all held onto power beyond the point where poor health had rendered them unfit
for office and clearly Holland was no longer the energetic man who had drawn the
right-wing groups together and led NZ’s first National government. But it wasn’t
until the party conference in August, 1957 that he finally announced he would
resign at the end of the current parliamentary session, a date for which had not
yet been determined. He endorsed Holyoake as his successor but only after five
more weeks and further pressure from his exasperated colleagues did he finally
hand over the leadership.
He lived on for four more
years - his mind deteriorating with Alzheimer’s disease. He died on 5 August,
1961 aged 67.
There was no doubt that
Sidney Holland was inferior intellectually to many other New Zealand prime
ministers. But he came to the house as a formidable impromptu debater whose
bluff ebullience, arrogance, tenacity and use of ridicule against the Labour
government brought new life to the opposition benches. He became popular with
MPs and voters alike. Beneath his gruff public persona was a man of considerable
personal warmth and humour. And he filled a demographic niche in the electorate.
He represented the growing number of conservative voters who became homeless
after the Liberal party disintegrated and the Reform party resolutely pointed
its face towards the rural sector. Holland was able to make this group feel at
home in the new more broadly representative National party.
Once in power, National tried to jettison the
interventionist measures and controls they had criticised so vehemently when
Labour ruled. In his speeches Holland had stressed individual freedom,
initiative, opportunity, enterprise, responsibility and reward. He disliked
bureaucratic regulation and state ownership. But, remaining committed to
Keynesian economics National continued with high government spending in order to
maintain full employment. Although there were signs of the economy freeing up,
many of the controls instituted by Labour remained in place. Nonetheless, Sidney
Holland is regarded as a significant New Zealand politician and not only because
of his twenty-two years as an MP, seventeen as party leader and eight as prime
minister. His major contribution was undoubtedly the role he played in building
the National party and expanding its voter base. National governed for 38 of the
last 50 years of the twentieth century.
Goto next Prime Minister: Walter Nash