G.—ll.

On 30th May, 1933, Supervisor Findlay, when supplying his schedule of requirements to the Registrar at Auckland", reported an increase in the quantity of butterfat over the previous season, and stated " As pasture already sown down is showing decided signs of deterioration, a fairly comprehensive top-dressing programme is outlined, covering 932§ acres at 4 cwt. per acre. This is essential if the pastures are to be kept from further deterioration." It was apparent, however, in May, 1933, that the promise, as stated by Mr. Findlay, of further supplies for any new land broken in by the effort of the people was not to be kept. The resolution of the Native Land Settlement Board necessarily prevented it. The Native Land Settlement Board's policy appears to have been sound, for Mr. Findlay said in his letter of 30th May, 1933 : — " I realize that during recent years the grassing of new areas has been pushed on, but it has been at the expense of the maintenance of grass previously sown." Now this policy of developing new areas had constituted a reversal of the policy laid down by the Native Minister himself when he stopped expenditure by Judge Acheson a-bout the end of 1929. We think that part of the present failure of the Te Kao scheme is due to the fact that the Minister did not follow a consistent policy of restricting the area for development. The policy laid down by the Native Land Settlement Board has been continued until the present time. 49. There is no doubt that the present Native Minister took over a very difficult position at Te Kao, and there is no doubt that the Native Land Settlement Board has taken over a very difficult'position from the present Native Minister. A general review of the whole scheme leads us to the conclusion that the root of the trouble lies in the original failure to have a comprehensive plan of development laid down at the commencement of the scheme. In our judgment, the substantial responsibility for the present position rests with the Native Minister in office from 1926 to 1928, with the Under-Secretary at the time, and with the President of the Maori Land Board. The President, by failing to keep a sense of proportion with regard to the needs of the Te Kao Natives, made it difficult for his superiors to discharge the duty of control over him, involved in the approval of advances for a dairy scheme. i 50 The' important question now relates to the policy for the future. There are fifty units in occupation at Te Kao. For the year ended 31st March, 1934, only seven of these were able to meet their interest charge in full from the proportion of their cream cheques retained by the Board, and it appears that the Natives in occupation have few resources beyond the returns received from dairying. To 31st March last twelve units have made repayments of capital expenditure amounting in all to £240. . , ~ We take it to be the case, upon the evidence before us, that without some form of subsidy not more than about 500 acres can be profitably developed at Te Kao. Upon this area about ten units could be profitably settled. That would mean the cessation of dairying operations on part of the land now in pasture. . . . 51. For the purposes of determining future action, we think that the following considerations are relevant: — (i) The condition of tlie Te Kao Natives in 1925 was such, that it appeared that some effort had to be made to help them. This effort actually took the form of a dairy scheme and it did help them. The scheme has given health to the community and has relieved the Health Department of considerable expenditure. (ii) The expenditure of the Tokerau Board has also given work to the Te Kao Natives and has, in the ordinary course of events, relieved — (a) Charitable-aid funds ; (&) Maori unemployment relief funds ; (e) Public-works expenditure. It appears from the evidence of Judge Acheson that at Te Hapua, on the other side of the Parengarenga Harbour, where there is a slightly larger but isolated and poverty-stricken Native settlement, the Public Works Department has spent some £7,000 in road works during the last two or three years with the result of relieving the living conditions of the Natives there. Furthermore, to 31st March, 1934, only £222 10s. had been granted in the form of unemployment-relief subsidies to the Te Kao Natives. , (iii) The Board's cream-lorry service from Te Kao to Awanui has, on Judge Acheson s evidence, enabled some forty European families to take up dairying along the road to Awanui and so has, no doubt, relieved the general unemployment-relief funds. 52. We think that on a reasonable estimate the State has been saved to the present time a very substantial sum by the expenditure of the funds of the Tokerau Maori Land Board. It would be difficult to assess the damage to the Te Kao Scheme caused by the policy of expansion started in June 1932, and then reversed. Taking all the circumstances into consideration, we recommend that as a solution, in part, of the present position the sum of £10,000 should be paid from the Consolidated Fund to the credit of the Tokerau Maori Land Board in reduction of its advances to the Te Kao Natives. . 53 With regard to the future, we think that the dairy-farming scheme ought to be regarded as an experiment in farming with a difficult set of people. That is how the scheme was regarded by the Department of Agriculture in the year 1927 (though not in 1925). The people in an isolated settlement like Te Kao still have great needs—namely, health and some means of work. We think

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