The Two World Wars and the Great Depression
When Great Britain declared war on Germany in 1914，New Zealand was also automatically war as a Dominion of the British Empire.The country entered the war with great enthusiasm.New Zealand had always supported British foreign policy.From 1897 on，it gave￡20，000 a year to the British Royal Navy，and the sum was increased to￡100，000 in 1908.The government had implemented a policy of compulsory military training in 1909，so when World WarⅠstarted，the country was relatively prepared.In August 1914，the government sent troops to occupy Samoa，a German colony in the South Pacific.In October of the same year，New Zealand troops were sent overseas to fight.
All together，more than 120，000 New Zealanders served in the military，of whom 117，000 served overseas.They fought bravely and distinguished themselves at the Battle of Gallipoli in Turkey，in France and in Palestine.New Zealand’s contribution to the war won recognition from the Allies，and after the war，it signed the Treaty of Versailles as an independent member of the League of Nations.
In addition to enhancing New Zealand’s international standing，the war also stimulated economic production and economic prosperity.Throughout the conflict，the British government bought all of the main products New Zealand produced at high and stable prices.
However，the prosperity did not last long after the war.Sheep ranchers felt the pinch when wool prices fell in the international market in 1921 and 1926.When the Great Depression began after 1929，it hit New Zealand hard as its economy depended heavily on international markets and foreign capital.Exports fell by a third and national income dropped 40 percent by 1931.To cope with the situation，the government at first tried to cut wages and government expenses.Later，it devalued the New Zealand currency in order to stimulate exports，and established the Reserve Bank of New Zealand to protect farmers from foreclosure.
After 1935，the Labor government of the time carried out more reforms to combat the Depression.It converted the Reserve Bank of New Zealand into a state⁃owned institution to implement monetary policy.It introduced minimum wages and reduced the working week to 40 hours.In addition，the government created jobs by building more railways，highways，and houses.In 1936，secondary education was made free for all people under the age of 19.In 1938，the Social Security Act was passed，which provided for free universal healthcare，extended the pension system，and stabilized the system of unemployment compensation.To protect farmers from fluctuations in market prices，the government took over the export and domestic trade of pastoral products and set guaranteed prices for farmers’produce.
In foreign policy，the Labor government began to assume some autonomy from Britain.It disagreed with the British policy of appeasement toward Japan and Italy and insisted on the principle of collective security.It urged the League of Nations to support China in its war against Japan and was one of the first countries to stop selling scrap iron to Japan.
But for the most part，New Zealand still aligned itself with Great Britain in its foreign policy.When Great Britain declared war against Germany，New Zealand’s Prime Minister declared that“Where Britain goes，we go!Where Britain stands，we stand!”Soon，the second New Zealand Expeditionary Force was formed and sent overseas to fight in the western theater.Early in 1940，the government formed a War Cabinet to manage military and related affairs while the ordinary Cabinet dealt with matters of purely domestic concern.The War Cabinet controlled the production and marketing of important products，implemented price and wage controls，and rationed food.
When New Zealand itself was threatened with Japanese invasion in 1942，it did not withdraw troops from abroad as Australia did.Instead，it raised more troops at home by implementing conscription.Altogether，about 200，000 men were enrolled in the military out of a total population of 1.5 million;this was the highest rate of mobilization among all Allied countries except Britain.Out of the 200，000 troops，about 120，000 served overseas，of whom 11，600 were killed and 15，700 more wounded.In addition，New Zealand also mobilized its natural and financial resources to the highest degree.It produced huge amounts of food for Allied forces，and constructed barracks and repaired factories，hospitals and other facilities for the more than 100，000 American troops stationed in New Zealand between 1942 and 1944.The New Zealand government also implemented food rationing until 1949 in order to send more food to Britain.
While most New Zealanders continued to have a strong attachment to Britain，the fact that it was the Americans rather than the British who had provided the sole defense against Japanese invasion caused some changes in New Zealand’s foreign policy.