TE HEUHEU'S LAST WISH

The 17,620 acres of the Puketapu 3A Block lie between Taumarunui and Tokaanu. Until the second world war, the district was very isolated indeed, so that Puketapu's excellent stands of totara, rimu, matai, kahikatea, miro and tanekaha went unexploited. The building of the Taumaru-

nui-Tokaanu highway suddenly brought the timber within easy reach of a railway town.

In the early forties, timber-cutting grants were made to two private firms who extracted some 18 million H.D. under war regulations.

At this time Mr Pei Jones, and his younger brothers Toriwai and Walter, began to make plans. The two younger men had a great deal of logging experience. They thought the Maori owners could get at least twice as much royalties if they cut their own bush.

The owners of Puketapu 3A are 600 members of the Tuwharetoa tribe whose paramount chief was the late Hoani Te Heuheu, a very ill man at that time. Some of the principal leaders of the tribe met at his home at Waihi and were in favour of forming a timber incorporation. Before Pei Jones left Waihi, the old chief spoke to him in his sick room. He said he was keenly interested in the idea and Pei should go ahead with it.

Hoani Te Heuheu died within a fortnight of this visit. During the tangi the subject of the timber incorporation was raised again. Recalling what Hoani had said on his deathbed, Pei Jones, Paterika Hura and Te Ngaronui Jones set out on a countryside tour to get the written consents of the owners of the majority of the shares.

The government's reaction to this move was not exactly one of wild delight. There had been too many such ventures before which had ended in financial disaster and great loss to the Maori beneficiaries. The government soon came with what seemed then a reasonable offer for the Maoriowned timber in that district. Mr Skinner, the Minister of Forests, made a personal visit to Waihi, the centre of Tuwharetoa, in 1945, offering £100,000 as deposit and royalties of 6/- per 100 H.D. for totara and 3/- for other species. The offer made, the Ministerial party withdrew.

A meeting of owners was then held which rejected the government's offer. The Minister of Forests accepted the rejection with good grace and wished the incorporation well. Shortly afterwards, Judge Dykes made a Maori Land Court order establishing the incorporation.

FIGHTING COMPETITION

Puketapu soon discovered that its greatest difficulty would not be the cutting or carting but the marketing of the timber. Once large stock piles had been established, sawmillers began to object to the log prices and standards of grading were made very stringent. Deliveries of Puketapu logs were curtailed and sales outlets became restricted. The battle had begun.

The incorporation's answer was to build a railway siding to rail the logs to selling points outside Taumarunui, but it turned out even that did not solve the problem, for sawmillers in other districts created the same difficulties.

It was for this reason that the Puketapu Incorporation entered the field of sawmilling. By running their own mills the owners could sell direct to the public.

The fifties were a tricky period for all millers of native timber. Pinus radiata, during this period,

became a strong competitive timber; pre-cutting and pre-fabricating and various forms of timber treatment became widespread. If real profits were to be made out of native timber, the emphasis had to be on all this processing rather than just logging and milling.

To meet competition, the Puketapu Incorporation therefore had to invest much money in mill machinery and started two joinery factories, one at Taumarunui and one at Eltham, as well as a mill at Hawera.

As a result of these developments, the incorporation did very profitable business. In the fifteen years up to 1960, a gross profit of £736,000 was made.

This was a great achievement, especially if one compares it with the government estimate of 1945. Mr Pei Jones says that about 14 ½ million H.D. of other species were cut during this period, which at the government price would have brought £226,000. The difference represents £510,000 gross profits.

SELLOUT WAS PART OF LONG
RANGE PLAN

The unfortunate thing about businesses, even very successful ones, is this: as soon as they get one difficulty solved they run into several others. Towards 1960, Puketapu had two major worries: one was that the timber trade was getting tougher every year. To sell their produce in the future, they would need more and more expenditure: equipment for kiln-drying and dressing timber, and timber-yards in additional towns. Secondly, the easier and more accessible part of their bush was getting cut out so that roading for the logging trucks was becoming an increasingly expensive item.

In fact, it looked as though it would need to invest a further £250,000 or more to keep going.

At the same time Puketapu's timber resources were not unlimited—a further twelve years or so and the bush would be cut out. What would happen then to all the expensive assets? Their disposal value would be only small. The only way to get the money back would be for the incorporation to import timber or to mill pinus radiata—both very competitive fields where today only the very biggest enterprises can hope to succeed.

The Incorporation therefore decided to try and get out while the going was good.

The present-day leaders of Puketapu 3A Block are Hepi Te Heuheu, paramount chief of Ngati Tuwharetoa and chairman of the incorporation, Mr Paterika Hura, deputy chairman, and Mr Pei Te Hurinui Jones, managing secretary. With them on the committee of management are: W. R. Ngahana, H. H. Patena, R. Hemopo, M. Otene, P. Taite, K. P. Mariu, H. Mariu and J. A. Asher.

Most of these men have wide experience in administrative and secretarial work, or have responsible posts in bush work or are experienced farmers.

Their decision was to get out of sawmilling altogether and invest the incorporation's assets in farming instead.

This idea was not new. It had always been the intention to farm the easier part of the block once the bush was cut out. Part of the incorporation's profits had therefore for some years been devoted to land development and of a total farmable area of 6000 acres, 1600 acres are now being run as a fully developed sheepfarm. Ultimately this area will be subdivided for unit farming.

In 1960, the Incorporation began to seek a buyer for the remaining timber in the bush, as well as the sawmills and factories. Again, this was a tricky operation as the buyer would have to pay an enormous sum for all the incorporation's assets—very few firms had money enough to do it.

For this reason no tenders were called but approaches were quietly made to large firms which might be interested. Finally, as is well-known, one of New Zealand's three giant timber enterprises, the Kauri Timber Company, made an acceptable offer.

After much hard bargaining, the chief executives of the incorporation succeeded in selling all mills, factories and other properties—among them some the Kauri Timber Company did not really want very badly—and getting a price of £135,000 for them, not much below the original estimate. Kauri bought them because they needed the bush in order to keep up with their own competitors.

The timber-cutting rights were disposed of for 25/- per 100 H.D. of totara and 14/- other species. The whole deal will realise an estimated £1,135,000.

This money will be ample to develop all the farm lands of the incorporation and settle them as individual farms, as well as distribute a good deal of money from year to year to beneficiaries for a very long time to come.

Immediately after the deal, £107,700 was distributed to owners—at £600 per share—and the rest of the down payment was invested in land development.

To add to its land resources, the owners decided to buy a property in the Awakino East district, called Matai station. This 1600-acre farm, complete with 3823 sheep and 471 cattle, cost them £55,000. The idea behind this buy was to find other assets to replace those which had been sold to the Kauri Timber Company.

Thus the famous £1 million deal has not merely meant the enrichment of the individual shareholders: the incorporation as a tribal business venture has been kept alive on much the same scale as before, with an intended annual investment of £25,000 on land development, out of the royalties paid from year to year by the Kauri Timber Company.

ACHIEVEMENTS OF THE
INCORPORATION

The Puketapu 3A Incorporation has benefited the members of the Tuwharetoa tribe in many ways. First of all, the distributions to shareholders have totalled £380,356, to which the latest distribution of £107,700 should be added.

This money has helped many of the owners to improve their lot. Some have bought logging trucks, timber transport trucks, taxis or farms with their royalties and thus set themselves up in business. Many have used the money to build themselves houses or pay off housing mortgages. As a result of the distributions, most of the owners now live in good conditions and in good financial circumstances.

A second important effect of Puketapu's success has been to encourage the formation of other Maori timber incorporations such as Hauhungaroa 2C, Hauhungaroa 1D2, Hauhungaroa 2D1 and Hautu. These groups naturally benefited from the experience of the Puketapu committee of management.

To some extent the incorporation has also helped the people by providing employment. Two Maori logging companies are working fulltime on the felling of the Puketapu bush. These are the Tamaiwhana Logging Co., run by the Jones brothers, and the Moerangi Logging Co., operated by Paterika Hura. These are independent of the incorporation, but Puketapu owns the excellent workers' houses in the settlement. These were built by arrangement with the State Advances Corporation under a hire purchase agreement specially provided for timbermills; the workers' rentals are very reasonable.

There is however not very much occasion for the incorporation to provide employment for its members, as 80% live outside the district and most of the others have good permanent employment.

Finally, the Puketapu experience has been valuable in the confidence it created in the ability of a Maori corporate body to succeed in a most difficult commercial enterprise. If successful, incorporations have a big part to play in the utilization of Maori land. There is no reason why they shoud not increasingly do so, as long as the leadership is strong and the people are prepared to forego immediate advantage for the sake of long-term benefits.