new government's opposition to militant unionism probably made an industrial confrontation inevitable, the outgoing Labour government's earlier decision to hold a referendum on compulsory military service in August 1949 had been seen by many trade unionists, who opposed conscription, as a betrayal of their socialist beliefs. In April 1950 the Waterside Workers' Union led a walk out of the FOL and set up their own Trade Union Congress, unwittingly isolating themselves from the general union movement. Shortly afterwards severe stoppages on the wharves occurred, infuriating most of the general population. In early September, Wellington watersiders refused to work a cargo of lamp-black, this dispute eventually lead to watersiders at all ports stopping work. On 19 September, the government warned it would declare a state of emergency the following day, if watersiders did not return to work the next morning. Late that evening, Labour Party leader Peter Fraser intervened and a deputation of union leaders met with Prime Minister Holland. Although a state of emergency existed between 20 September and 4 October, while negotiations took place, this meeting had opened the way to a settlement. On 31 January 1951 the Arbitration Court issued a general wage order to increase wages by 15% for workers covered by the industrial arbitration system. The order took effect on 15 February 1951 but was backdated to awards as they stood at 7 May 1950 and also cancelled a 5% interim wage order the court had previously issued in June 1950, that had taken effect from 8 May 1950. Awards for freezing workers and two other unions that had recently received "substantial increases" were excluded. In reaching its decision the Arbitration Court said it had to consider equity for workers, the stability of the New Zealand economy, terms of trade with Britain, as well as inflationary pressure. The compromise decision was recognised as inadequate by the unions' representative, while the employers' representative dissented, considering it inflationary. This increase did not apply to waterside workers, whose employment was controlled by the Waterfront Industry Commission. The shipping companies that employed the watersiders instead offered 9%, the difference between the 6% wage increase that had previously been awarded to the watersiders after the interim wage order and the general wage order. The watersiders then refused to work overtime in protest, and the employers placed the men on a two-day penalty. The men said it was a lock-out, the employers