New Zealand and the War


By HON. WALTER NASH, Minister of New Zealand

Delivered before the Bond Club, New York City, October 27, 1942

Vital Speeches of the Day, Vol. IX, pp. 230-236.

THE Honorable Walter Nash: Mr. President, I first want to thank you for the opportunity of being here and for the honor that you have conferred on me by allowing me to be the first New Zealander to address a gathering of this type in New York.

I come to speak with some pleasure and I think with some pride about a small country. I hope you will forgive me if at any time the statistics that I may use should appear to exaggerate the possibilities of a little country and if I may seem to be boasting. I have an elemental right toboast because of the fact that I can say something of New Zealanders (there is one at least in this audience, the son of one of the most distinguished legislators that we have ever had in our country) from probably a slightly different angle. It was the country of England that gave me birth. I don't know whether a lot of people in the place that I come from at the present time would thank England for giving me birth (laughter) but there are one or two points in connection with that that I will be able to say a word or two about later. I will not touch on finance of course, because income tax at the present time is not finance, it is another science altogether (laughter). I think however it might be well if I did try and explain where New Zealand is, what her people do and also their contribution in connection with the needs of the present war.

New Zealand is in the South Pacific; the nearest land area to the south is the South Pole. It was from New Zealand that Admiral Byrd twice set out on his Polar expeditions and I have the privilege of having with me today and on my staff at Washington one of the Admiral's colleagues. New Zealand is 6,000 miles from Chile on the east. It is 1,200 miles from Australia to the west, and if you look to the north you will find the nearest large area of land is Siberia. That is one form of isolation that can be justified, because you have got no control over it (laughter).

One other point in connection with New Zealand is that in area it is slightly larger than the country we call Great Britain. It is about 104,000 square miles and Britain is something over 90,000 square miles. New Zealand's population is ninety-four per cent of British stock, five per cent Maoris, the best of the Polynesians, a magnificent type of people, in many cases better than the Pakeha. Less than one per cent of the population, therefore, consists of people from countries other than the British Commonwealth.

Its trade is the largest per capita in the world. Its birth rate declined steadily every year from 1920 until in 1935 it was 16.17 per 1,000 of mean population. Since 1935 it has gone up every year and last year it was 22.81. I will tell you why later. New Zealand has the lowest death rate in the world and the lowest infant mortality rate in the world. Might I interpolate at this point to mention the fact that New Zealand contended for many years with Holland for pride of place as the country with the lowest death rate in the world, and Holland, I think, for the years 1935-39, beat it by about 0.3; that is, our death rate was 9 and Holland's was 8.7 per 1,000 of population. I mention that because of the fact that only yesterday I picked up the record that the Dutch themselves have compiled since the occupation and saw that the death rate among children in Holland has gone up thirty to forty per cent since the occupation and the ordinary death rate has gone up by seventeen per cent. And the tuberculosis rate has gone up by 47 per cent since their country has been occupied by the Germans.

To go back to my own country, the expectancy of life, as determined by actuaries (who sometimes are correct) is greater than in any other country in the world. Life expectancy as recorded by the Insurance Actuaries in New Zealand is 65 1/2 years for males, 68 1/2 for females. I don't know why women should live longer than men but they apparently do in New Zealand (laughter).

New Zealand has an independent government. It is a complete government with entire sovereignty. There is no outside control of any type over the Government of that country. There is no better example of the freedom that can be experienced inside what we call the British Commonwealth of Nations. London can't interfere. If it did, itwould do harm—and because Britain does not interfere, there is no country in the world whose people love England more than the people of New Zealand love England; and Britain is worthy of that love and respect because of what she has been and what she is.

If I were going to thoroughly examine the powers of government I would say that there is more sovereignty in the little country that I represent than there is in your own United States. The reason is, quite logically, that the sovereignty of your Federal Government is limited by the sovereignty of your States and the sovereignty of your States is limited by the powers of the Federal Government. That is so in every other English-speaking country. Canada has its sovereignty limited by its provinces; South Africa to a certain extent by its provinces; Australia by its States. England has its sovereignty limited by a little place called Northern Ireland (laughter); Ireland (that is to say, the Free State) has its sovereignty limited by the same area (laughter). So that it is entirely correct to say that there is no country that has a greater sovereignty than the country I am privileged to represent here in the United States.

In New Zealand, every man when reaching the age of 60, and every woman, automatically becomes entitled to a sum which, according to the cost of living figures, will buy all the normal essentials of life and leave a little margin, too. The recipients are qualified to own their own home. They can receive payment even if they have five hundred pounds (or Twenty-five hundred dollars) in any savings institution or in any trust account, and they can also have in addition to that, a pound a week of their own. That is twenty dollars a week if you measure the dollar by five to the pound. (No one knows what it really is today in terms of relative purchasing-power.) There is nothing that determines the real value of any currency except what you can buy with it. Taking that as the measure, all the things that are necessary for a normal life are available to everyone in New Zealand when they reach the age of sixty.

Every widow is cared for in like manner. She is also paid 25/- per week with a further ten shillings a week (two and a half dollars) for every child that she has until the child last born to her reaches the age of sixteen. If she desires to keep the children at school, the payments on account of the children last until the age of eighteen. After the last child reaches the age of 16 (or 18 if at school) the mother may qualify to receive a benefit in her own right of one pound a week. The guardian of any child that has lost both its parents is entitled to receive three and three-quarters dollars or fifteen shillings every week.

All maternity attention is free. The doctor is paid by the government for attention given to all mothers. That is one of the reasons for that high birth rate I mentioned a short time ago. A nurse is provided for fourteen days for every mother just before childbirth and for a time after the child has been delivered. All medicines are free. All general practitioner treatment is free except that we haven't yet got a majority of the doctors working under the scheme. There is some justification for that because of the fact that more than half the doctors in New Zealand are engaged in war services either overseas or in New Zealand. One half of them are now in the forces.

In addition to that, service in all public hospitals is entirely free. If persons desire to go into a private hospital, they may do so, and the average cost of maintaining a person in a public hospital is paid to the owner of the private hospital. The patient then pays any difference between that sum and the amount the private hospital might charge. The majority of hospitals, however, are public hospitals.

Every mother of every child, provided the income of thehome does not exceed five guineas per week, qualifies to receive in her own right six shillings a week for every child until that child passes the age of sixteen. This goes on until eighteen if the mother keeps the child at school.

I am sure, with my knowledge of a place called England and my knowledge of working-class conditions in other countries that one of the reasons—(only one, because there is much more than economics involved)—but one of the reasons why many more children are not born is because the parents do not know where they are going to get the money from to pay the doctor's bills when the mother is delivered of the child. A second reason is that the parents wonder how they are going to feed an extra child, because the incomes they have previously received may not always have been sufficient even to get all the things they required prior to the coming of the child. That is provided for as far as we can in New Zealand by these two facilities; (1) the payment of all doctors and nursing charges by the whole of the community; (2) special payment in the form of a Family Allowance made to the mother for each child.

We also give every child in every school half-a-pint of milk every morning at eleven o'clock. During the apple season and for as long as supplies are available we give each child an apple a day—that is for the purpose of keeping the doctor away and saving the payment in the other direction that I have mentioned (laughter).

Irrespective of all politics, ours was the first country in the world to introduce old age benefits. Fifty years ago, we were the first country in the world to give women, as far as voting is concerned, the same rights as men. And there is this to be said for New Zealand, that anyone unable to care for themselves through disabilities beyond their control, is cared for collectively, and the cost is met with a five per cent charge on everybody's income. Even the man with five pounds a week has to pay five shillings per week into the Social Security fund. If he gets a hundred pounds a week, then he has to pay five pounds. It is a flat charge of five per cent on everybody's income for the purpose of meeting those charges that I have just mentioned.

Last year this Social Security tax brought in eleven million pounds, or fifty-five million dollars, and we had to contribute from the consolidated fund (the ordinary revenue account to the Government) something like three and three-quarter million pounds to make up the balance of the money needed.

I have gone a long way into that because I think, Mr. Chairman, that it is in a real sense one of the things that New Zealand is fighting for. We have a magnificent, free country, collectively organised for individual responsibility, —a country that has bred, to my knowledge, not a regimented, machine-type of individual, but men and women with a co-operative outlook combined with a sturdy independence.

I have seen some of these men of ours from time to time here in the United States, and I say that nothing has contributed to the work that I have had to do—nothing has helped me so much—as the decent orderliness, good behavior and natural courtesy of the New Zealand boys who are being sent over here from time to time from New Zealand to train under the Empire Air Training Scheme in Canada and to whom you have been so hospitable in New York and other cities of the United States. They have done New Zealand a tremendous lot of good by being so naturally decent and orderly.

Now, may I come to the war for a moment? Personally, we think it is an "all-in" war. It is not an ordinary war between nations. This is a world war of ideas; its outcome will determine whether the world will progress thenext hundred or two hundred years or whether we are to go back a hundred or two hundred years and maybe more.

We had no doubt about what to do when war was declared by Britain—New Zealand followed—at half past nine on Sunday morning, September 3, 1939. The thought of war had been in our minds for a long time. We had made long preparations. Since 1935, when the present government took office, we have spent tremendous sums on these preparations. Each succeeding year practically we have increased the expenditure from the defence point of view. We have been ardent opponents in every possible way of appeasement. We believe in compromise where practicable, but you cannot appease a tiger. The more you feed him on food that he likes, the more he demands, and that is what we felt all through. When they fed Italy on Abyssinia, we strongly opposed it. It may not seem important, but our attitude towards sanctions meant that our trade with Italy was brought down to practically nothing at all. We had to go without some of the things that they produced and which we rather liked, but we felt we would sooner go without those things than aid in any way the forces of aggression that were gradually coming into being at that time.

In 1936, we put an embargo on scrap going to Japan. We imposed an embargo because we felt that it had to be done. It meant this, though that if we didn't break what we call the most favored nation treaties we had to put an embargo on the export of scrap to every country in the world. As a result we did put an embargo on scrap iron going to any country in the world. As it turned out, it was fortunate for us that we did this because now we have got nearly all of it there in New Zealand and we badly needed it.

We opposed the Italians going into Albania. We felt that if there was a League of Nations and there was a Covenant of the League of Nations, the articles of that Covenant ought automatically be applied and ought not be fiddled around with. We asserted, as far as we could, that the League principles ought to apply for the protection of the members of the League. We were one of only two who took that position, when we affirmed that the League and all the nations belonging to the League should come in 1939 to the defense of China, in accordance with the League's principles.

The other one at that time was a country called Russia. New Zealand, the smallest of the whole lot, and Russia, the largest of the whole lot, voted that we ought to keep agreements that we had made.

Then in 1939 we called a conference in April of all the British countries interested in the South Pacific because we were satisfied that if war did break out, Japan would be in it. We agreed with the other countries assembled there that we would take charge of the defense of Fiji. In October, 1940, fourteen months before the Japanese came into the war, we sent troops to Fiji. We felt that the Japanese would endeavour to occupy Fiji for the purpose of using it as a base from which to attack New Zealand or Australia.

Then, when your people came into the war, we built airdromes in the island. We had a fairly good force there. Now your men are there.

The United States coming into the war meant that Fiji, with other places that I don't need to mention, were the main places through which the supplies going to the southwest and the South Pacific had to go.

We had built nearly 200 airdromes in New Zealand before the end of 1939. Now our country is fairly well equipped and is being used for the training of large numbers of airmen. In addition to that we have a cadet air-trainingscheme associated with our secondary schools under which boys from 16 to 18 years of age are taken through preliminary courses in meteorology, flight theory, airmanship, wireless, navigation, etc., so that when later they come into ordinary training they will have the solid background that enables them to become thoroughly proficient in the type of job they are to do.

We have got a strong air base in New Zealand, near Auckland—I think the best air base in the South Pacific zone, and we have also got facilities in a number of other places.

We had, prior to the war, set up what we call "The Organisation for National Security," under which at the outbreak of the war the various Government Agencies, not only those associated with the Army or the Navy, or the Air force, but all Government Agencies, took all steps that were necessary to ensure that nothing was done that would be advantageous to the enemy at that time. Every enemy ship, for instance, inside our shores on the outbreak of war was immediately seized by a Customs Officer. All facilities which would in any way help the enemy were immediately taken control of and no information or enemy agents could get away.

The political party to which I belong had from its inception been strongly opposed to conscription or the draft, as you call it here. In July 1940 we realised that this was not an ordinary war, or imperialist war, or capitalist war or any war of that type, but that this was a war of ideas and ideologies, and the world, as I said before, was lost for a century or more unless we won. We felt that all was at stake and if all was at stake all should take part in it. It is an all-in war and we are all-out to do everything that we can from our part of the world to make sure that whatever small contribution we make is made to the full.

We arranged for the setting up of a War Cabinet, consisting of three members of the Government Party, the Prime Minister, the Minister of Finance and the Minister of Defense and two representatives of what was then known as the Opposition Party. These five men, since 1940, have run the war in its entirety. They have nothing whatever to do with revenues or ordinary civil Government or civil controls, but they have everything to do with the expending of the money in connection with the running of the war.

In December, 1939, we started to send away an Expeditionary Force to the Middle East. The Division that we promised to send was, in normal strength, between sixteen and eighteen thousand. We have already lost more than the original Division that was sent—already lost more. They have done, as I said, a magnificent job. We have had something like 65,000 men overseas in the army, navy and air forces. We have had 3,000 in Canada engaged in the Empire training scheme. We have sent thousands of pilots, gunners and air observers to Britain. A thousand of our airmen have been killed over Europe. There are several thousand New Zealand airmen in Britain now. We have a thousand in Canada training under the air training scheme to take their places as pilots and observers and gunners and radio men in the planes that go over Germany and which are doing much more than any of us realise to break the morale of the people of Germany.

There is nothing at the present time—and I don't want to argue one form of strategy against another—that is doing more damage to the German morale and the German people than the raids that go on consecutively almost night after night. And there is generally a New Zealand squadron in every sortie that goes over.

Could I tell one simple story with regard to these airmen of ours in England? I was there in August. I spent a day

going around three of the air fields at which our boys were stationed. I went to one where the New Zealand Bomber Squadron was working. The man in charge of the station said, "You would be interested in this, Mr. Nash. You remember the raid on Hamburg about ten days ago?" "Yes."

"Well, your boys went over in full, in a full squadron. I think about sixteen planes went with New Zealand crews. Eight of them were lost in the one night—eight complete planes and crews. The next day the boys who had come back, the eight other crews, were asked how they felt—and seeing that half of their number were gone, maybe forever, perhaps they would like to ease off and go away for a time." The station commander then said to me, "they sat quiet for a time and then one said, 'I am going on, Sir.' And then they all went out again on the next raid after they had had just the usual break."

I was particularly proud at that time. It seemed to me a splendid thing that these young men were willing to give so much to make the world better than it had been and were willing to risk all that they had. I felt there was nothing that we could do, nothing that I could do, by way of talking or working long hours that could compare with those boys who were quietly willing to risk all so we may continue to enjoy the type of life that we have in New Zealand—the type of life enjoyed also by those in the other countries of the world where there are free forms of government.

Those New Zealanders who went to Greece have also done a magnificent job. They went into Greece because of the fact that the Greeks had been urged by us to fight the Italians and to stand against the menace of the German hordes that were on the borders of Bulgaria and the other places. Even though we felt at that time that there wasn't much chance of the Greeks holding the Germans it would have been a betrayal of the worst possible type and would have destroyed our morale and would have rendered us unworthy of winning if we had said to the Greeks, "No, we cannot come. You are likely to lose. You can't hold the Germans."

So our boys with others went in, some sixteen thousand of them, among them the Maori battalion, just 800 Maoris, and they held the passes. The Maori did a magnificent job at that time. He is as fine a type as you could find anywhere. But we lost heavily. Many of the survivors went on to Crete. We lost over 4,000 men there. But by their magnificent action with the Australians and the British and the Greeks, they succeeded in holding up the German plans. If the Germans had not been held for the period of the Greek campaign and the Crete campaign, we might have lost Iran, we might have lost Iraq. Indeed I think it is pretty certain that we would have lost them.

You remember that rebellion broke out in Iraq at that time, but that it was quickly put down. If the Germans had been closer, there wouldn't have been much chance to crush the rebels. That would have meant that Syria also would have gone.

Following on that, after coming out of Crete, the New Zealand Division rested for a time, and they then went into Libya, there they had a bad time with Rommel, but gave him a bad time too. The Fifth Brigade Headquarters in its completeness was captured after very hard fighting. The headquarters of the whole New Zealand Division was practically surrounded. General Freyberg, the New Zealand commander, a magnificent type of man, when it looked as if it was all over, broke through the German lines. Part of the Division fought through towards Egypt and part got to Tobruk. They joined the besieged men there, and ultimately fought their way out again.

That doesn't mean that the New Zealanders won the battle, but it does mean that if you talked with any of those who had been charged with the leadership of that campaign, they will say that those magnificent boys, with a wonderfully fine type of leader, did a splendid job. The Germans were within 200 yards of them when they broke clear outside Tobruk and yet they got through.

The stand they had made had the effect of turning the tide of battle in Libya. In that battle too we lost three to four thousand more. We have, however, sent reinforcements and kept the numbers up.

The New Zealand Division went then to Syria and rested. Then you remember Rommel coming through, and the terrible disaster of Tobruk falling. We lost tanks, we lost motor lorries, we lost supplies, we lost ammunition, we lost guns and everything, untold quantities, at that time. The disaster of Tobruk is not yet fully understood, either the why of it or the extent of it.

The New Zealanders were then brought down from Syria with the Australians and the British and they were told to go into position at El Alamein. They went in and they lost three thousand men, but they held the ridge. I should like to read you what Churchill had to say about that. It is a magnificent testimonial, and he is probably one of the ablest writers of words that we have known. Here is what Churchill said about them when he was in Egypt the last time: "I am very glad to have this opportunity of visiting the desert army, and I certainly would not dream of going away without seeing the New Zealanders, commanded by my old friend of many years' standing, General Freyberg. In England, not long before I left, I heard someone say that the New Zealanders were 'a ball of fire.' It was said by someone quite impartially who had the great opportunity of assessing your work. You have played a magnificent part, notably and even decisively in stemming a great retreat which might have been most detrimental to the whole cause of the British Empire and to the United Nations.

"I know that on the other side of the world," so Churchill said, "in your own homes in New Zealand, all eyes are fixed upon you, but even more eyes in England are watching the fighting here with equal solicitude. I wish you good luck in the great days that lie ahead, perhaps not so far ahead of you. We share the pride that your Dominion feels in the great service you are rendering and in the contribution you have made in this war, as in the last, to the pages of British history. You will be cherished by future generations who through your exertions and sacrifices will go forward to a better, a fairer and a brighter world."

Our men are in Egypt now, and they are engaged in the fighting that is on now. There has been a terrific toll taken of our young life. It is possible that we have lost more proportionately, not excepting Germany, than any country in the world.

But in addition to the work of the army there is the work of the airmen—in connection with the airmen I could emphasize this—one out of three of every man between the age of twenty and thirty has volunteered for the air force and one out of six is already serving in the air force. We have an air force now in New Zealand exceeding 20,000 in addition to those who are in Canada, and in addition to those who are in the United Kingdom and in other places.

We have a Forestry unit in Britain and we have a railway construction unit there also. We have a small navy of three cruisers and smaller craft. One of the cruisers took part in the battle of the River Plate when the Achilles, which is a New Zealand cruiser manner by New Zealanders, with the Exeter and the Ajax, defeated the German pocket battleship, the "Graf Spee."

I mention all these things just to give you some idea of the type of boys that we have there. But I would be wrong if I confined what I have to say about my country to what the boys in the fighting forces are doing—I would be wrong entirely. It is correct though to say this, that there is one out of two of the total population of military age under arms. Of the men between the ages of 16 and 60 one out of two is under arms. (Applause.) One out of six of the total population is under arms. We have so many men under arms that we were beginning to hinder our productive capacity for essential things. As a result we have taken some thousands back to the farms again to do the farm work, and also some industrial work and some coal mining work. After that job is done they will go back again to the army and take up their military duties.

We have got one hundred thousand men organised in what is known as the Home Guard. They live at home. They have to guard the shores of New Zealand. They have to work the forty hours that you were good enough to refer to, Mr. Chairman, but in addition to that, on nights and on Saturdays and on Sundays they have to be on the spot so that if danger does come they can defend the particular part of our shores assigned to them. That applies to the farmers, the industrial workers in our cities and in our rural towns too. One hundred thousand of those are under arms, in uniform, not paid unless they are ordered on continuous duty for more than 24 hours. Then they get what we call the territorial rate of pay, one and three-quarter dollars per day, and they also get their food—and other things.

I mention this because I think that it is an all-out war, it is an all-out battle that we are in and we ought not only to talk of soldiers and sailors and airmen. Unless the whole population of the United Nations countries gets into this war we cannot win! We can win if they all get in!

We ought not, Mr. Chairman, to allow those soldiers, sailors and marines and airmen to give their lives so that we could be better off by staying behind. We must try to affirm with all the diffidence that we might have in our makeup that no soldier shall be worse off because he went away to fight for his country and nobody shall be better off because they stayed behind. In addition, too, when the soldier comes back we should try to so arrange things that he can experience some of the pleasures and comforts of civil life that he did not experience during the days of fighting. That means hard work for those that stay behind.

I did say something about production. The volume of production in New Zealand has gone up by fifteen per cent from 1940 to '41. In the years 1940 and 1941, we sent 550 million pounds of butter to England. We sent 500 million pounds of cheese to England. We sent 1400 million pounds of meat to England. We also sent 600 million pounds of wool to England.

We have cut our imports down by thirty per cent since the war started. Nothing that is not essential can either go into New Zealand or come out of it. We do thank you for what you have done to help us in the past maintain and make our defenses what they are today. We are strong! I believe we are prepared for any invasion that might come! But that is not all. It isn't defence that we are thinking of. With all the gratitude that we might express to you I think I could rightly say that we don't want American soldiers or marines or sailors to come down there to defend our country. Let them come down there as they have come and as they are there today, to train, so that they, and we with them, can go forward to attack the enemy where it is hardest for him, whether that is on the plains of Libya or whether it is on the waters of the Solomon Islands or in New Guinea or the other areas. We are ready, training quietly andsedulously day after day with your men down our way so that when the time comes we can do what has got to be done. We know the road is hard. Of that there hasn't been a shadow of doubt in New Zealand since this war started. Political differences of course there are, but what do they matter? The people understand what we are fighting for and they understand what is merely a little bit of political propaganda, wherever it may come from, and they give it its true value. But they are united as far as it is possible for a body of people in a small area to be united with one single purpose, one complete and single purpose. To the extent that they have life in their bodies, they will devote that life to make this world of ours a better world than it was when this war started.

To confine my remarks to the men only wouldn't be enough. All the services associated with the Army, the Navy or the Air Force that can be done by women and were previously done by men are now being done by women. They have done an amazing job with regard to lifting the production. Hundreds of women today are in the jobs which their husbands previously filled. That is one of the procedures that we have operating. If the husband volunteers to go away and fight the wife has a right, if she is capable, of taking over his job. Then he in turn, when he comes back goes into his job and his wife goes home.

I wonder if I could say one thing with regard to the actual figures of what we have done? All single males in New Zealand between the ages of eighteen and 45 and all married men 18 to 37 have been called up. This month we are calling up those married men who are thirty-eight, thirty-nine and forty years of age for service. Everybody between the ages of eighteen and fifty-one who is not qualified to go into either the permanent forces for service inside or outside New Zealand must join the Home Guard that I have mentioned. If they are not qualified for the Home Guard, if they are not qualified for the forces overseas, air, navy or army, if they are not qualified to serve permanently in New Zealand then they still must register for war work if they are between the ages of eighteen and sixty-six. Those over fifty-one to sixty-six must take the work that is assigned to them in what—you call the OCD—and we call the Emergency Precautions Scheme. They must do their part there so far as their health and physique will allow them.

In addition to that, no one can be transferred from an essential job to a non-essential job. Women must remain at their jobs if they are doing essential jobs—that is, women between twenty and thirty—and go to jobs that are essential if they are not already doing essential work. The boys that are on holidays and the teachers and masters of schools during their holiday period must go to work either on farms or in other places to insure that our production is maintained.

Rationing is applied fairly thoroughly. We don't go short of food. There is no need to in a country like ours. We get 10 ounces of sugar a week. With regard to petrol and tires no person can get a tire for pleasure purposes. You can get enough petrol to run your car for forty miles a month—forty miles a month only! The only reason for the forty miles is to keep the car in order because we might want it for war purposes later on. (Laughter) There is some procedure in connection with the rationing of clothing but it does not involve any great hardship. We are fortunate in general.

The Government purchases all the main primary products, purchases all the butter produced by the farmer and the cheese, the apples, the meat and the wool. The Government purchases the lot and sells it to countries where it; is required, but mainly to what we call the United Kingdom. Taxation is high. There is five per cent already men-

tioned for social security but in addition to that everybody pays seven and one half per cent of their income for national security. In addition to these two levies, there is ordinary Income Tax, payable on incomes in excess of a thousand dollars. A further allowance is made of another two hundred and fifty dollars for each dependent of the tax payer, that is, the wife and the youngsters. But after these exemptions are taken account of, income-tax commences at a rate of 12 1/2 per cent on the first £100, increasing by one and one-quarter per cent for every subsequent hundred pounds (or five hundred dollars) until it reaches twelve thousand dollars. At the twelve thousand dollar point every dollar earned after that is taxed at the rate of 90%. So you see, the people have to pay. That is the best way to run a war.

We have paid two-thirds of the cost of our war out of taxation so far and if we could pay more and still keep our economy going we would. We have only borrowed one-third so far and with the exception of some thirty-five million dollars or seven million pounds sterling, we have up to the present paid the total cost of our war overseas. The overseas sum represents the maintenance of our airmen, our own Navy and those men that have gone to Egypt and other places. Loans have been raised within New Zealand at approximately two and one-half per cent but one provided for a compulsory subscription with no interest for three years and 2 1/2% afterwards.

This year the war budget in New Zealand is one hundred and thirty-three million pounds—six hundred and sixty-five million dollars. That is more in one year and not much short of twice the total cost which we incurred in the last war, 1914-18.

May I just recapitulate one aspect of my talk and then I will sit down. New Zealand is in the heart of the South Pacific. It is the keystone of the supply routes. If New Zealand was to be occupied by an enemy power I question whether you will get anything through to the Southwest Pacific. It has got the best naval base in a little city—you call it a town probably—Auckland.

Prior to December 1941, we had continuously strengthened our defense, and continued to get ready for attack. We have supplied our forces with materials. For your forces we have built two major hospitals with an enormous number of beds. We have taken over many large private houses and are using those as subsidiary small hospitals. We are supplying your forces in the South Pacific with food and we have converted every industrial manufactory that is worthwhile, anything from a mechanic or a machine, into making commodities that are useful in war. We make universal carriers, we make hand grenades, we make all our own cartridges, we make bombs and many other things.

Your General Motors plant that has been down there for some years, and the Ford Motor Plant are entirely and completely engaged in making munitions. We assemble airplanes at the rate of about a hundred a year for our own training purposes. So we are doing a job that is really worth while down below. Your men down there are taking part with us in the training. They are working on our beaches with our men; they are working in the bush; they are learning jungle warfare in the bush. They have just started a scheme under which they are learning jungle warfare by chasing the wild deer, which incidentally is helping get rid of a menace that we have had there for many years.

Your marines and soldiers there are a magnificent lot. They have done the United States splendid credit. There is a feeling of natural homeliness between the people of our country and those men and the few women you have sent down there.

We have had heavy losses. We don't think the price is too heavy provided we do understand that all countries are in this war for the purpose that I mentioned.

We are not asking the United States to defend us. That is not what your men are down there for. We know that they will fit in with any such defence with us, if the time should come, and we are glad to have them there. But we want them to go forward to something bigger and something better, to drive the enemy back to his own shores and to attack his cities.

It has been an all-out battle for an all-in objective. If some of you read a "small" paper published in New York called the New York Times, magnificent in its integrity on most occasions, worthwhile reading by everybody who wants

to find out the facts, you will find a story there with an account of something being said by a man named Beveridge, Sir William Beveridge in England, in which he affirmed that they are working out plans in England to insure a minimum income to all when the war is over, so that they would have the right to the good things of life from the world that they are now fighting to save. We have already done that in New Zealand. This scheme is operating in New Zealand. Everyone who works is assured of an income. Everyone who cannot work is assured that the things that are necessary for their well being will be provided collectively.

It is an all-out battle for an all-in security, and we are trying to do our part.