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The Timber Industries Encouragement Act, 1927

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The Forestry Commission started managing harvests in the South Arthur in the late 1960s, after the completion of Tayatea Bridge (the first one). When I tell people that nearly the whole South Arthur had been given to a private forestry company 40 years earlier, for their exclusive use for 50 years, I get skeptical looks. Well, the proof is in the accompanying Act of Parliament, and the background is below...

Hard times

Tasmanian sawmillers had a very rough time in the late 1920s, with their troubles beginning well before the collapse of the blackwood boom. Hardwood from Tasmania had long competed in mainland markets with Scandinavian softwood, and Bass Strait, then as now, was expensive to cross. It cost 5s. to 7s. per 100 super feet to ship sawn boards from Stanley to Melbourne (overnight), compared with just 3s. 10d. per 100 from Baltic ports to Melbourne (seven weeks). Labour costs had been rising, too, with sawmillers paying some 50% more in millhand wages than they had before the War.

But the squeeze began in earnest when cheap overseas hardwoods like Japanese oak, Manchurian oak, Pacific maple and Borneo cedar began flooding the Australian market. In 1925-26, Australia imported an additional 2.2 million super feet of Japanese oak, but paid £40,000 less for it. Australian sawmillers lobbied hard for protection against these imports. The Commonwealth Government was sympathetic but favoured free trade, and only limited tariffs were imposed, and only on selected timber imports.

Tasmanian sawmills began laying off workers and closing. By the end of 1927, 102 of the State's 178 sawmills had stopped operating. The sawmill workforce had dropped from 2825 to 1145. Desperate sawmillers pressed the State Government, unsuccessfully, to temporarily waive the royalties owed by the millers to the Forestry Department.

Laughton's scheme

Kenric Laughton was a well-known and respected lawyer in Stanley, and Master Warden of the Circular Head Marine Board. During the timber boom of the early 1920s he became a sawmiller, and when hard times arrived he proposed a remedy for the local industry's woes. Instead of competing with one another for sales to increasingly rapacious mainland buyers, local sawmills could amalgamate. There would be efficiency gains in the bush, where each sawmiller was laying his own tramlines, and in the processing plants, where there was duplication across the district in management staff and other overheads. The amalgamated millers would have the commercial strength to demand better prices from mainland timber merchants. They could offer better products as well, such as kiln-dried boards and pre-cut furniture pieces. The new company could even open its own timber yards in Melbourne and Adelaide, to sell Tasmanian wood directly and cut out the middlemen.

Laughton succeeded in persuading Smithton sawmillers E.H. Fenton and J.S. Lee and Sons to support the scheme. The group would raise the necessary start-up capital by offering shares and by recruiting mainland investors. Potential investors, however, told the millers that before the new company could be started, it would need to have a guaranteed timber resource, and not just on the short-term Crown-land leases the sawmillers had been getting from the Forestry Department. To attract investment, a big sawmilling company would need a big resource, and the guarantee of a long time over which to harvest it.

By the mid-1920s, most of the North Arthur had been picked over, and the remaining high-quality timber resource in those forests was scattered. The promoters of the amalgamation scheme therefore looked to the unlogged forests over the Arthur River. Their scouts reported that there was good hardwood south of the Arthur, and even some virgin blackwood. Access would be a problem. The only existing bridge was on the Balfour Track. However, there was a line of rail that had been surveyed for a proposed Stanley-Balfour electric railway, and if that line was extended from 'Trowutta' (Roger River) to just over the Arthur, a line following the river and running up the tributary valleys would tap most of the timber.

Roughing it out

By late 1926, the promoters had a detailed plan. Local sawmills interested in the scheme would sell their assets to a new company, Tasmanian Timbers Ltd., with a nominal share capital of £1,000,000. The Government would grant the company an exclusive forest permit covering up to 150,000 acres in the South Arthur, and lasting 99 years. Tasmanian Timbers would not only cut and process timber, but within a few years would build a furniture-making factory at Stanley or Smithton. The company would extend the rail line from Trowutta to the Arthur River, and would carry freight from new settlements in the area at the same rate as charged by the Government line. There might even be a paper pulp works using harvest and mill residues.

The plan sounded good to the State Government of the day, which drafted a Timber Industry Encouragement Bill to enable it. In mid-December, 1926, the House of Assembly approved the appointment of a joint committee of the House and Legislative Council to investigate the proposal. The select committee took evidence in Hobart and Smithton in February, 1927. It was the Smithton sitting that rang the alarm bells, and for the rest of the year the 'timber concession' had the Circular Head community talking – and arguing.

Leading the opposition were Circular Head Councillors G. Acheson and A.J. Waters, with vocal help from the District Surveyor, K.M. Harrisson. There were four principal concerns about the scheme:

Council's position

Circular Head Council passed a resolution in March, 1927 that flatly opposed the scheme. Laughton and his co-promoters talked to Council in mid-April, arguing their case and asking Council to rescind its resolution at a special meeting before the select committee reported to Parliament. Council agreed to have the special meeting.

On 20 April, the Warden (Dan Brown) convened a ratepayers' meeting in Smithton to discuss the issue. The meeting was held in the Soldiers' Hostel and overflowed. Laughton moved that the meeting be adjourned to a larger venue at a date before the next ordinary Council meeting, and that the special Council meeting be postponed as well. The meeting agreed to an adjournment but not to postponement of the special Council meeting. Ironically, that special meeting was never held. On the scheduled date in April, Council could not muster a quorum.

A series of well-attended ratepayers' meetings were then held at Stanley, Irishtown and Smithton between 29 April and 4 May. To the dismay of Acheson, Waters, Harrisson and other objectors, all three meetings voted in favour of the scheme. At its May meeting, Council rescinded its motion of opposition.

Finalising the bill

The Parliamentary committee, which had been re-appointed on 24 May, reported on 27 July:

That, as the committee is unable to obtain any definite information as to the extent and quality of milling timber or first-class land in the area mentioned in the bill, it does not, in the absence of such information, favour the granting of the concessions asked for, and recommends that the Government should take the necessary steps to have a comprehensive survey made of the area concerned, from the point of view of forestry, mining, grazing, and agriculture, in order to ascertain the value to the State of the proposed concessions, and the desirability or otherwise of granting the same.

Laughton and his fellow sawmillers regarded the committee's report as a catastrophe, and announced at the beginning of August that they would be forced to lay off workers. The Government accepted the committee's recommendation and sent a Forestry Department party on a timber survey of the South Arthur, under the leadership of North-West Divisional Forester Melville Garrett. The story of that expedition will be the subject of another section of this website, but the results of Garrett's survey became quickly and widely known. There was very little suitable agricultural land in the South Arthur, and not all that much blackwood.

Parliament debated a revised version of the Timber Industry Encouragement Bill at the end of 1927. The concession area was reduced to 130,000 acres (see map at top of page) and the term of the exclusive forest permit to 50 years. Provisions were included (see the Act) to allow cut-over land to be selected, and to allow the State hydro-electric authority to dam the Arthur. (A plan had been drawn up earlier to dam the river to power the Stanley-Balfour railway.) More importantly, the Act included safeguards to protect the public interest from delays or failures on the part of the scheme's promoters.

The Act did not hand over the 130,000 acres to Tasmanian Timbers Ltd., because that company did not yet exist. Parliament instead made Roland Hellyer Atkinson 'and his assigns' the beneficiary of the timber concession. Atkinson was a Circular Head public accountant who acted as secretary to Laughton and his co-promoters.

Roland Hellyer Atkinson was respected and well-connected. His father was the Rev. H.D. Atkinson ('H.D.A.'), an Englishman and keen naturalist who became a friend of Truganini and other Aboriginal Tasmanians. H.D.A. was based at Stanley's Anglican church from 1877 to 1890, and as 'Woodpecker' wrote numerous short pieces about the natural history of Circular Head (republished by Mary Hume in 2001). Roland's brother H.E. Atkinson became an Anglican Archdeacon in Tasmania. During the 1930s Roland Atkinson worked for J.S. Lee and Sons, and he later became Circular Head's Coroner.

All for nothing

Even before the share market collapse of 1929 and the start of the global Depression, the amalgamation scheme struggled to find investors. The promoters asked for and were granted a six months' extension of the deadlines in the Act. On 3 April 1930, one day before the extension expired, Laughton, Fenton and two Lees called on the Minister for Lands and Works and asked for another extension.

The Minister, in reply, said that while he realised their difficulties, he felt that the Premier, who was Minister for Forests, and the new Conservator of Forests (Mr. S. W. Steane) should have an opportunity of expressing their views on the matter. The arguments the sawmillers had advanced were very similar to those placed before him when they were granted six months' extension of time. Since then their difficulties had not improved, but had become even greater. There were certain features about the Timber Industry Encouragement Act which did not appeal to him very much. He pointed that out at the time that the Act went through. He appreciated the difficulties of the company, but he did not feel disposed to take the responsibility of granting an extension of time. He suggested that in order to allow the Premier and the Conservator of Forests to confer on the matter and arrive at some definite opinion, he would extend the period of their leases for one month. Mr. Laughton intimated that that would overcome their present difficulties, and the Minister agreed to the extension.

The Government did not press the issue during the Depression, and all that happened in the 1930s was that a company named Tasmanian Timbers Ltd. was officially registered. Nothing was harvested south of the Arthur, no sawmills or other plants were built and none of the obligations specified in the Act were met. The Timber Industries Encouragement Act of 1927 was quietly repealed by the Tasmanian Parliament in 1953. Kenric Laughton died the following year at the age of 83.