Ohinemuri Regional History Journal 56, September 2012
In its infancy Paeroa was divided by a low hill, from which the town derived its name, into two townships, Paeroa and Ohinemuri and there was jealously between the two sectors.
By the 1860s, with the discovery of gold at Rotokohu and Karangahake, more and more settlers were moving into the area, which was fast becoming a bustling river port to service the goldfields.
In 1869 Edward Wood leased some 167 acres of land for 21 years from the local Maori on which he established the township. In the early 1870s he assigned the lease to Messrs Jackson and Russell, who survey the area into allotments and leased these to incoming settlers, both commercial and residential.
Jackson and Russell almost run out of time when renewing their lease in 1889 for another 21 years. They then sold the lease to Cassrells and Bennett, who had established themselves with the Criterion Hotel and later the Criterion Theatre. They also leased allotments to incoming settlers.
Many of the lease-holders wanted to freehold their allotments but their approaches were declined. They then turned to the Government, which after receiving several deputations purchased the leasehold area from the its Maori owners and continued the lease to Cassrells and Bennett until 1908 when the leased sections were auctioned.
An editorial in the Ohinemuri Gazette of August 25, 1893, stated:
"The purchase by the Government of the Paeroa township from the Natives is now an accomplished fact. And a very good bargain, indeed, the Government has got. The price paid for the equity of redemption of the block, which contains 167 acres in all, is £2000 ($4000).
"Etu Paaka, who held a share and a half, receives £1,000 ($2000); Morehu te Putu, one share, £650 ($1300); and a minor—a girl named Moho Puna, £350 ($700) for her half share. We presume that the rental of £75 ($150) per annum, which the present lessees have been paying to the Natives, will now go to the Government, who will then get at least a fair interest for their money during the 17 years currency of the lease, and will have a property worth quite £5,000 ($10,000) at the expiry of that time.
"It is to be hoped that Government will not stop at this, but will buy out the present lease, held by Cassrells and Bennett, as soon as possible. In a case such as this, the perpetual lease system might be tried with good effect should the Government have the whole thing in their hands.
"Much has been made of an alleged jealousy between the two townships—Paeroa on the eastern side of the lower hill in the middle of the settlement and Ohinemuri on the western side. We fail to see where it comes in; the good of one must be the good of the other—indeed, the two flats scarcely make up a decent sized township.
"We trust that now matters are more satisfactory in this connection that steps will be taken to effect the better paving, drainage and road system of the township, not to make mention of the much desired water supply, etc.
"As we often said, these things, to be properly carried out, required the constitution of borough. Every day brings us nearer to that consummation, which we prophesy is now within measurable distance."