Vogel’s public works and immigration scheme

In 1869 William Fox's ministry defeated Edward Stafford's government, and Julius Vogel, a London-born former goldfields journalist who had helped establish the Otago Daily Times in Dunedin, became colonial treasurer. Vogel had begun as an Otago provincialist, but by the late 1860s he believed New Zealand needed a strong central government. He took office at a time of economic stagnation: Te Ara notes that in 1870, with wool prices down and gold production declining, New Zealand was in depression, and the New Zealand Wars had created negative impressions overseas. The colony had just 74 km of railway, all on the plains of the South Island; the North Island had none, and most people travelling any distance went by ship.

In his Financial Statement of 28 June 1870 Vogel proposed financing development with money borrowed on overseas markets. The 1966 Encyclopaedia of New Zealand gives the sum proposed as £10 million; NZHistory says the borrowing reached £10 million by 1876 and £21 million by 1881. The money was for assisted (government-subsidised) immigration and for public works: roads, bridges, ports, telegraph lines and, as the centrepiece, more than 1000 miles (1600 km) of railway in nine years, built to a cheap narrow 3 ft 6 in gauge. The Immigration and Public Works Act 1870 created the post of agent-general in London, and Isaac Featherston was appointed in March 1871. The engineering firm John Brogden and Sons was contracted to build railways and bring out labourers (navvies); Te Ara gives 2,712 labourers in 1871, while NZHistory gives 2200 immigrants in 1872–3. From 1873 passages from the United Kingdom were free. NZHistory notes that the policy's success hinged on the rapid and cheap acquisition of Māori land, and Vogel dramatically sped up Crown purchasing.

By 1880 the government's railways ran almost 2000 km. Christchurch and Dunedin were linked in 1878, and within 18 months of Auckland's first railway opening in 1873 the South Auckland line had reached the Waikato basin, opening about a million acres of recently confiscated Māori land to Pākehā settlement. NZHistory states that the government assisted 100,000 migrants in the 1870s, and the European population rose from 256,000 in 1871 to 490,000 ten years later; the net gain of more than 38,000 immigrants in 1874 was the largest annual increase until 2002. In 1874 Vogel concluded that his policy demanded the abolition of at least the northern provinces; in the end all the provinces were abolished in 1876. Te Ara notes there was some economic growth, but it reflected population growth more than higher output per head. The collapse of the City of Glasgow Bank in 1878 tightened credit in London, and with landowners heavily over-borrowed and wool prices falling, the colony slid into a long depression. Assisted immigration tailed off after 1874 and was stopped altogether in 1890.

During his lifetime Vogel was often blamed for the recession of the 1880s; as prosperity returned in the 1890s he was again praised as far-sighted, and historians have generally been kind to him. NZHistory also records the scheme's costs. Public works spending concentrated power in central government, and roads and railways drove forest clearance, swamp drainage and the spread of pastoral farming. For Māori the impact was massive: the rail lines gradually opened the central North Island to the state and settlers. Writing in 1893, Vogel said: 'The Public Works Policy seemed to the Government the sole alternative to a war of extermination with the natives.' NZHistory describes the completion of the North Island main trunk line in 1908, nine years after his death, as the realisation of his 1870 vision.