PUBLIC TRUST OFFICE

Hawke's Bay Herald-Tribune, Volume 81, Issue 59, 2 December 1937, Page 13

PUBLIC TRUST OFFICE

Our Own Correspondent.)

Review oi Past Year's Working REDUCTION IN BUSINESS

(From

WELLINGTON, This Day. The past year's activities of the Public Trust Office are xeviewed by the Public Trustee, Mr. E. 0. Saies, in his annual report which has beeu presented to the House of Represeutatives. During the past year, says .the report, 2770 estates and funds of a total value of £5,968,109 were aceepted for adfainistration, compared with 2719 of a value of £6,675,965 the previous year. N ot withstanding the reduction in values, the new business for the year was satisfactory. The total number of estates and funds under administration at the close of the year was 18,874, of au aggregate value of £60,770,814, as against 19,123, valued at £60,660,310, at the end of the previous year. There was a decline in numbers and a comparatively small increase in total value as compared with the large volume of new business, and this was accountted for mainly by the circumstances Teferred to in last year's report — namely, the effect of the conversion of local-body indebtedness upon the sinking funds held by the Public Trustee and the repayment of existing investment agencies upon maturity. In addition, considerable progress was made during the year with the liquidation of the Investment Executive Trust and related companies. In. the other estates and funds under administration. the aggregate business had shown an increase exceeding*£l,200,000, "In addition to the business referred to," said Mr, Hales, "there are many cases where the Public Trustee is required to supervise the administration by private persons of the estates of mental patients and aged and infirm persons. In other cases the duties are not of an active character — e.g., trusteeships for debenture-holders. By. including these figures the value of the estates and funds under administration at the close of the year would be incrfiased by £1,862,210. "The number appointing the Public Trustee executor or trustee deposited by testators during the year was 4408, representing a substantial increase over the corresponding figure of 4014 for the previous year. The majority Of the wills were. prepared by, .the office. The number .of wills withdrawn during the year through the death of testators or otherwise was 1965. The number of wills on dqposit at the close of the year, 88,321, therefor© shxrwed a substantial increase of 2443 over the corresponding figure at the close of the previous year, which itself constituted a record in the history of the office." Lending Operations. Beferring to lending operations, Mr. Hales said that during the earlier part of the period under review very little lending business was transacted, intending applicants no doubt holding oft until details of the new relief legislation were available. Since the passing of the legislation applications had come in more freely, including a considerable number from existing mortgagors for further advances to enable them to readjust subsequent encumbrances or for improvement of the securities. ^ A new method of lending on a redemptiontable basis had been instituted, under which the rate of interestvwas fixed for the first five years of the term, with provision for a review of the rate at the end of that period and at fiveyeaxly intervals thereafterj the mortgagor having the right to repay the loan at the end of any five-yearly period if the rate fixed for the succeeding period was not acceptable. Except where applications for adjustment aTe pending under the new legislation, the rights and Temedies of mortgagees are now unrestricted; and that had xesulfed in applications being received for xenewal of a large nnmber of mortgages which were running on overdue under the protection afforded by the repealed Mortgagors and Tenants Eelief legislation. Margin of Security.

c'The Public Trustee's powers of lending upon the security of freehold land," he continued, "have been brought into line with those of private trustees by section 20 of the Finance Act (No. 2), 1936. Previously the Public Trustee was not authorised to grant loans exceeding three-fifths of the value of the proffered security, but under the section oientioned he is now empowered to lend an amount not exceeding two-thirds of the value of the security. The practiee'of valuing farm properties ou a produetive basis has resulted in a substantial reduction ot values; and in most cases the amount which the Public Trustee is now authorised to lend on a property is not more than could have been lawfully advanced some years ago when loans were restricted to three-fifths of the amount of the valuation. The statutory margin for loans on Crown anc Native leaseholds has been altered ir the same manner.

"Though by section 34 of the Publie Trust Office Act, 1908, the Public , Trustee- is authorised- to purchase bonds and debentures issued by the Government and certain local bodies, there has hitherto been no authority for granting loans on the security of sueh bonds or debentures to persons who desired to obtain financial assistance without realising their investments. TJnder section 19 of the Finance Act (No. 2), 1936, the Public Trustee is now authorised to grant loans on thia class of security, np to nine-tenths of the nominal value thereof." The report pointed out tliat the total investments completed during the year amounted to £2,077,864, compared with £1,401,151 for the year ended Marr-h 31, 1936. On March 31. 1937, the investments held by the office, including special investments on behalf of estates fend fun&»t totalled £36j311,293.