H.—lla

SECTION 11. MAIN CURRENTS OF POLICY, APRIL, 1944, TO MARCH, 1945 (i) The Maintenance of New Zealand's Overseas Contribution 45. Although by April of 1944 it had been decided to recall the bulk of the 3rd (Pacific) Division, this implied no change in the basic policy of maintaining the maximum overseas man-power contribution. It but recognized three inescapable facts. The first of these was that it would be impossible to maintain both the Middle East and Pacific Divisions together with Navy and Air Force establishments by calling up fit men reaching military age and by combing out Category " A " men held in industry under appeal. The second was that the Pacific Division was for the most part engaged in non-combatant service which was not likely to give way to continuous active service for the whole division, while the Middle East Division was playing a vital part in the Middle East campaign. The third and final fact was that the production of foodstuffs and other supplies for Great Britain and for the Allied Forces in the south-west Pacific area was becoming increasingly important. 46. These three facts thus provided the environment in which the policy of maintaining the overseas contribution had to be pursued. The return of the bulk of the 3rd Division and the direction of its personnel to the high-priority vacancies in essential industry was thus a phase in the policy of reinforcing the Middle East Division and building up the Air Force in the Pacific. 47. Had matters rested there, this policy would not have been very difficult to pursue, but just as industry was starting to gain from the influx of 3rd Division personnel, the introduction of the Middle East (2nd) Division replacement scheme threw a new strain on. the man-power resources of the Dominion. This is dealt with in some detail in a following Subsection. 48. Replacement of these men was necessary if the Division was to continue in action, and, since the number of fit young men reaching military age was inadequate, it became necessary once again to draw off from industry large numbers of Category " A " men held under appeal, including members of the 3rd (Pacific) Division. 49. Maintenance of the Middle East Division and Air Force and naval establishments during the last twelve months has thus been achieved, but only with some difficulty and at the expense of industrial man-power, which has therefore had to be conserved all the more discriminately. Factors which have accentuated the difficulty have been the partial application of long-service release schemes to the Air Force and the Navy, and the impossibility of directly replacing combed-out Category " A " men with long-service repatriates from the Middle East Division. (ii) The Intensification of New Zealand's Industrial War Effort and the Return of the Pacific (3rd) Division 50. Even before 1944 the question was being raised whether New Zealand could continue to support her large overseas contribution and at the same time succeed with the production programme, which was considered by Great Britain and the United States to be of extreme importance. 51. Early in 1944 further consideration was given to the industrial problems, and the following aspects were revealed : — (a) Despite the importance of foodstuffs to the allied cause, butterfat production had fallen steadily since 1941, while in the 1943-44 season there was a decline in the output of meat from works. Man-power difficulties were a factor which had combined with pour seasonal conditions, in successive years, and the reduced supply of fertilizer, to bring about a decline in butterfat production since 1941. (Note. —The production of ivool and crops had actually been considerably increased, although some decline in crop production was anticipated for the 1944 season.) (b) The defence and other essential construction programmes for 1944 lagged, from the outset, and with the existing labour force alone there was no prospect of completing projects on schedule. (c) The engineering, footwear, woollen, clothing, and foodstuff manufacturing industries were also lagging in output and there was little hope of substantially increasing their production with the man-power available. (d) New Zealand was being urgently requested by Great Britain to expand her exports of foodstuffs, while the requirements of the American Forces in the Pacific were making increasing calls on food and other products. To this insatiable demand for foodstuffs was added the imminent necessity of still better equipping New Zealand to play a full part in the food relief of war-torn countries, which were even then on the verge of being freed from Germany. 52. As had been foreseen for some time, the stage was being reached when New Zealand could not at the same time meet the growing pressure on her industrial man-power and support the Army Division in the Middle East (at that time 35,000 strong), the Air Force in the Pacific and elsewhere (then totalling 13,000), the Navy in all theatres (then almost 10,000), and the 3rd Army Division in the Pacific (then numbering approximately 18,000 officers and men). Indeed, the maintenance of even the existing industrial output was incompatible with the maintenance of the overseas Forces, as reinforcements could only have been provided at the expense of the man-power in industry. 53. At this point the decision to repatriate the bulk of the 3rd (Pacific) Army Division for direction into essential industry was made. Between April and November of 1944, some 9,500 men who had volunteered for essential work were repatriated and directed thereto. The industrial disposal of these men is dealt with at some length in Section VIII of Part 111 of the report. 54. Contemporaneously with the return of the 3rd Division and the direction of its personnel to essential industry, the industrial mobilization procedure of the Department, in concert with the activities of Armed Forces Appeal Boards and Industrial Man-power Appeal Committees, was contributing substantially to improvement in the overall industrial position. This also is dealt with in detail in Section VIII of Part 111 of the report.

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