Story: Ashwin, Bernard Carl

Page 1 - Biography

Ashwin, Bernard Carl

1896–1975

Senior public servant, economist

This biography was written by Brian Easton and was first published in the Dictionary of New Zealand BiographyVolume 4, 1998

Bernard Carl Ashwin played a key role in transforming the New Zealand government's approach to economic management in the 1930s and 1940s. He was born in Paeroa on 22 September 1896, the second of eight children of Manley John Ashwin, a storekeeper, and his wife, Clara Elizabeth Foy. Ashwin left Cambridge District High School after two years, working initially for a local lawyer and a bank before becoming a cadet in the Department of Education in Wellington in 1912. By his own account his late adolescence was a time of sport rather than earnest endeavour. It was ended by the First World War, in which, as a sapper and driver in the New Zealand Divisional Signal Company, he was wounded shortly before the cessation of hostilities.

Ashwin returned to New Zealand in March 1919, 'older than my years as a result of my experiences'. He decided he wanted to be more than an ordinary clerk and began to study part time at Victoria University College. He resumed work at the Department of Education and transferred to the National Provident Fund in 1920. Ashwin qualified as a professional accountant in 1921. Realising that many others were gaining similar qualifications, he decided to take papers in economics as well, and graduated master of commerce with honours in 1925. He married Rachel Robinson Turnbull (also known as Rachel Robinson Bennett) at Wellington on 18 February 1926.

Ashwin had joined the Treasury Department in 1922, becoming chief inspector in 1926, assistant accountant in 1930 and, eventually, assistant secretary in 1935. He was already de facto secretary from the mid 1930s, partly because the secretary, G. C. Rodda, was often overseas, but also because of his economic skills: for much of the 1930s he was the only Treasury official with advanced economic training, and this was reinforced by his considerable academic ability. He enjoyed mathematics, was a lucid writer, and had a formidable memory.

In the 1930s Ashwin was the Treasury official assigned to deal with major economic issues, thereby becoming the department's link with the minister of finance, Gordon Coates, and his 'brains trust'. Ashwin was involved in the development of the social security system, and the establishment of the Reserve Bank of New Zealand. An early indication of his promise was the publication of a paper on 'Banking and currency in New Zealand' in the Economic Record and papers prepared within the Treasury which presaged the changes in the New Zealand monetary regime in the 1930s.

Ashwin became secretary to the Treasury when Rodda retired in February 1939. The department had been a bookkeeping agency, handling the receipts and payments of government; under Ashwin's leadership, its power and influence were considerably strengthened. As a result of the exigencies of the Second World War, it focused increasingly on economic management, particularly after Ashwin was appointed director of stabilisation in December 1942. He chaired the Economic Stabilisation Commission from July 1943. Its role in overseeing the economy was absorbed by the Treasury in the late 1940s and early 1950s.

Ashwin became increasingly influential as a member of a number of government organisations. By 1945 he was a director of the Reserve Bank, a director of the State Advances Corporation of New Zealand, chairman of the Local Government Loans Board, chairman of the executive committee of the Organisation for National Development, and deputy chairman (to the minister) of the New Zealand Supply Council. He held a seat on the various government investment boards and in 1947 became a member of the New Zealand Dairy Products Marketing Commission. This list underestimates his influence. The minister of finance, Walter Nash, headed New Zealand's legation in Washington from 1942 to 1944, which left Ashwin 'to control financial matters largely on my own initiative', including writing all the budgets. Of Nash's input he claimed, 'I let him play with a few words to make him feel that he had contributed to the Budget'. Ashwin worked closely with Prime Minister Peter Fraser, whom he saw almost every day during the war. According to Ashwin they often talked until the early hours of the morning, with Fraser seeking his opinion of new proposals. He accompanied Fraser on most of his overseas trips.

Ashwin's travelling included attending, in July 1944, the Monetary and Financial Conference at Bretton Woods, which established the post-war international monetary regime, and negotiating in London the long-term bulk purchase contracts for New Zealand's pastoral exports. An often-told anecdote recalls the time he and the British disagreed by a farthing on the price of butter. The dispute was reputedly settled by the outcome of a snooker match.

Following the election of the National government in 1949, there was apparently some initial antagonism from the new prime minister, Sidney Holland, towards the public service. The official papers, however, show Ashwin as attentive to the party manifesto, if discouraging of what he saw as impracticable. Thus Ashwin was closely involved in the cautious dismantling of controls in the early 1950s. But he was also instrumental in establishing the paper mill at Kawerau, in which the government was a shareholder. Shortly before his retirement he gave extensive evidence to the Royal Commission on Monetary, Banking, and Credit Systems.

Ashwin, although still not 60, retired from the Treasury in June 1955, after 43 years as a public servant. He became a director of several prominent companies, including the Tasman Pulp and Paper Company, while remaining for a while a government appointee to various boards. He was knighted in 1956. He died in Wellington on 12 February 1975, survived by his wife, two daughters and a son.

Bernard Ashwin played a key role in placing the Treasury at the centre of New Zealand's economic policy making. His energy was prodigious, while to his staff he was 'very accessible'. He was personable and charming, his dry sense of humour indicating shrewdness. He was also skilled at defusing the requests of pressure groups for favourable treatment.

On monetary policy Ashwin was conservative, vigorously opposing the social credit supporters in the Labour caucus in the later 1930s, while his view of macroeconomics was dominated by the recognition of New Zealand as a small open economy exposed to external shocks, and always, it would seem, short of foreign exchange. Because he was trained before the new welfare economics, he does not seem to have been concerned with economic efficiency. He was, nevertheless, acutely aware of the power of the market, arguing against trying to borrow at below market interest rates. He was continually worried about the budget deficit and tended to discourage subsidisation and spending. Although a conservative in the social security reform debate, he was not blind to issues of social justice, advocating interest rate subsidies to borrowers in some circumstances. A pragmatic interventionist, his approach was based on a thorough understanding of (and respect for) both markets and people. His sure grasp of economic issues, administrative ability and political skills made him one of the most influential public servants of his era.