Economic nationalism cartoon
Because the New Zealand Legion was such a catch-all movement for various ideas and grievances, it was inevitable that its inherent contradictions would surface. The first, and most important, crack appeared during the movement’s first official National Council in July 1933. After reaffirming that it would not adopt any formal policy until it was vetted by every Centre, the Council heard the report of the Economic Research Council from its Chairman, Evan Parry.
A planned economy?
Parry was very much a man of his times. Influenced by President Roosevelt’s New Deal in the United States and other Keynesian experiments around the globe, he believed that the only answer to the Depression was a planned economy. Despite the opposition of many within the National Council and his own Committee, Parry proved convincing, and a commitment to a planned economy was formally adopted by the Legion.
For an organisation supposedly wedded to laissez-faire capitalism, this was a radical decision. It soon filtered down into almost every aspect of Legion activity, culminating in the adoption of an Economic Council as its official policy. This council, composed of key individuals from every major industry, would advise the government on all matters relating to the economy and the planning of production and consumption. This policy alienated many Legionnaires who were advocates of laissez-faire, and resignations soon piled up.
Social crediters and single taxers
The Legion’s economic policy also borrowed heavily from Douglas Social Credit. A Stamped Scrip Scheme proposed in July 1933 suggested the creation of a State Credit Board responsible for issuing ‘scrip stamps’ to the unemployed to facilitate greater consumption. Social Crediters within the movement praised the plan, and the letters pages of National Opinion, the Legion’s journal, contained an ongoing debate between them and the remaining adherents of laissez-faire. In March 1934 the Legion adopted state control of the currency as official policy.
The letters pages of National Opinion were also the stomping ground of another faction within the Legion – the single taxers. Led by E.W. Nicolaus, a member of the Commonwealth Land Party, this faction pushed for a simplified economic policy that abolished all taxation except for a single tax on the value of unimproved land. Despite Nicolaus’s prominent role on the Economic Research Council, they were unsuccessful, and the Legion continued to favour a planned economy.
Another contentious policy was the so-called Begg Plan – a proposal by President Campbell Begg to eliminate the government’s financial debt to Great Britain by agreeing to absorb several million of its unemployed. By settling unemployed British citizens on undeveloped land, Begg hoped to increase the size of the domestic market, thus facilitating economic recovery. Begg’s unilateral adoption of this policy attracted considerable criticism within the Legion, with one member of the Otane Centre claiming it would ‘frighten some members away.’
