Listener: 5 October, 1996.
Keywords: Political Economy & History;
Bernard Ashwin was born on the banks of the Waikato, just a hundred years ago. He became one of the most powerful men in New Zealand. Keith Sinclair bracketed him with Prime Minister Peter Fraser, Minister of Finance Walter Nash, and the Federation of Labour (F.P. Walsh) in the 1940s. Ashwin’s influence continued for a quarter of a century after he retired. Yet he is hardly remembered in comparison to the other three.
Bernie, the eldest of seven, left school early, and squeaked into a cadetship in the Ministry of Education in 1912. By his own account – we are fortunate he left some memoirs – his adolescence was a time of sport rather than earnest endeavour, ended by the First World War, where as a sapper in the Signals Company in France, he twice diced with death. Coming back “older than my years as a result of my experiences” he decided he “wanted to be more than an ordinary clerk”. Initially he studies to qualify as a professional accountant “but accounting was becoming so popular … it was clearly advisable to go further”, to degrees in economics. The transfer to Treasury shortly after led to rapid promotion, becoming Secretary to the Treasury in 1939, at the age of 45.
I was asked to write a biographical essay on Sir Bernard – he was knighted in 1956 shortly after his retirement – for the fourth volume of The Dictionary of New Zealand Biography, due out in 1998. Fortunately there was enough information to do this, but there are some gaps in the record. What was he doing in the late 1920s, other than getting married and playing tennis? By the early 1930s, he appears as a historical figure in the memoirs of some key men of the time, in the official records, and in some taped recollections. He tells, for instance, how he was with Minister of Finance Gordon Coates when he was humiliated by the privately owned Bank of New Zealand, and how as they drove back he advised the minister to establish a reserve bank in order to control the banking system. Later Justice Tyndall was to describe him as “the father and mother and everything else of the [Reserve Bank] Act.” (Ashwin demurred “that may be going a little too far.”) It was he who turned the Treasury from a bunch of bookkeepers to the powerful institution we know today.
Previously I had been aware of Ashwin as the “Treasury man” who got in the way of the social security legislation of 1938. Indeed as probably the only competent economist in Treasury in those days he seemed to be everywhere.
He was a fiscal conservative, reluctant to spend government monies, a very understandable stance for someone who went through the horrors of the early 1930s, when the government finances were in chaos, like everything else. He was also a political conservative too, but loyally served the Labour government – and wrote most of the budget speeches, with Nash adding a few theatrical flourishes. Ashwin worked with Prime Minister Fraser, whom he saw “almost every day during the war. For some reason he liked me and often asked me to call to see him. On my way home from work – usually around midnight – we would sit and talk through the early hours of the morning. He would give me an idea of some of his new proposals and seek my opinion of then.”
Ashwin was an economic nationalist, like politicians Coates, Fraser, Nash, and public servants such as Clarence Beeby, James Fletcher, Joe Heenan, Alistair McIntosh, and Bill Sutch. They had gone through the depression and resolved not to let it happen again, creating the Reserve Bank, the marketing boards, the infrastructure, the manufacturing which gave New Zealand so much prosperity in the first half of the post-war era.
I am especially intrigued by Ashwin’s role in the development of the pulp mill at Kawerau, based on the huge Kaiangaroa forest as a depression relief work. The first record on it I have seen bearing his signature turns down the project because the government could not afford it. (It also turned down a proposal for an Auckland harbour bridge.) Later he became a key advocate of the first, and surely most successful, “Think Big” project, resigning early to take up a directorship with the Tasman company. Such diversification was seen as a way of avoiding the over-dependence on farming which had been one of the causes of the severity of the depression downturn. In those days one could be an interventionist, a conservative, and even the Secretary of the Treasury, and be successful as each.
Reflecting shortly after he was married, but before his distinguished career was to be evident, the 30 year old economist wrote that in early adolescence “I acquired a desire which I did not entirely abandon for many years to be an engineer and build bridges and tall buildings.” Instead Bernard Ashwin became a social engineer, and built the mid-century New Zealand economy.