With the knowledge that the native timber-producing trees were dwindling, and the growing realisation that administration had not been successful and that protection of the forest was essential, the 1913 Royal Commission on Forestry began its work. It was charged with the examination of existing indigenous forest land to determine which of it ought to be retained for purposes of soil protection, water conservation, and scenic purposes. Those areas not required for such purposes were to be examined for classification, for settlement, or sawmilling. Other questions were the administration of milling; the management of beech forest; and the desirability of wholly or partially prohibiting the export of white pine timber because it is excellent for making butter boxes.

Further, the Commission was to examine the probable future demand for timber and to what extent the State plantations should be supplemented and expanded. Other matters of inquiry concerned the question of State aid for private and local body planting, for forestry education, through legislation.

The findings of the Commission are of considerable moment. Although the First World War delayed action being taken, plans were implemented almost immediately afterwards. Under the able guidance of Sir Francis Dillon Bell, who was appointed the first Commissioner of State Forests, separate from the office of Minister of Lands, the kaleidoscopic events of the previous 100 years or more rapidly took on an orderly shape. Dillon Bell acted upon one of the main recommendations of the Royal Commission and in 1920 set up a separate Department, the State Forest Service. The new Department was placed in the hands of a professional forester who very quickly produced proposals for a New Zealand forest policy. A new Act followed, the Forests Act 1921–22, and the stage was then set for the development of forestry along the lines we witness today.