PUBLIC TRUST INVESTMENTS

Hawke's Bay Tribune, Volume XVII, 10 December 1927, Page 4

PUBLIC TRUST INVESTMENTS

- r £HE little discussion that took place at this week’s meeting of the Hastings Borough Council on the Public Trust Office suggests a reversion to an aspect of this institution which has already been the, subject of remark in this column. What prompted the occupant of the chair at the council meeting to bring the matter forward can only be guessed, and for our present purpose really does not matter. From the reports of the meeting, however, it would seem that he made reference to resolutions passed byseveral other local bodies in praise of the Public Trust Office. The passing of these resolutions is readily understood, for there can be no doubt as to the funds under its administration being very liberally placed at local bodies’ disposal, the Hastings Borough Council being among those to participate. But it is on this very point that some exception may perhaps be taken to the general proposition that the Public Trust Office has been of nothing but benefit to the community as a whole.

The latest balance-sheet issued by the Public Trust Office shows that, as at 31st March last, it had some 18| million invested upon outside securities. Of this amount something like 1{ million was invested in Government loans of one kind and another, and nearly million in local body debentures —a figure which easily accounts for the resolutions of approbation to which allusion was made. This leaves somewhere about 10J million that has been lent out on mortgage. The question which interests the public, and particularly the borrowing public, outside the local bodies is as to whether, had the funds in the hands of the Public Trustee been in the hands of separate private trustees there would have been anything like this allocation of them to the different classes of securities mentioned. We fancy that to this question a negative answer may be given without hesitation. Even allowing that the private investor is much more given than he was before the war to find an outlet for his money in the subscription to public loans, we cannot think that, in the aggregate, private trustees handling the whole of the loanable fun Is now in the Public Trust Office would have invested, as it has done, something like 42 per cent of them in Government and loctl body securities. The conclusion to be drawn is that, as the result of these funds going into the general

“pot” of the Public Trust Office, a very considerable proportion of them that would have been available for private borrowers has been lent to the Government and local bodies. To pretty nearly the whole of this extent the funds have been lost to producers, and traders, antj homebuilders. Pursuing the subject a little further, three other questions arise. These are, first, as to how the mortgage investments are distributed over the country, second, as to the allocation of them between town and country securities, and, third, as to whether they represent big, or moderate, or small loans. These are points upon which, so far as our own observation has gone, no information is afforded in the published returns of the office. In the hands of private trustees funds for mortgage investment would be almost exclusively lent out in the respective districts from which they arose. Has the Public Trust Office in making its investments seen to it that no district has suffered in this respect from its handling of the funds! Then, in some districts private trustees favour town securities, while in others they prefer broad acres—the latter, we fancy, being the case in Hawke’s Bay. How are the Public Trust mortgages apportioned between town and country? Finally, does the Public Trustee cater to the same extent as private trustees would have done with the same funds for the small borrower, or does he not rather look to place his immense body of lendable capital in big sums? These are all questions of very serious concern to the people of the cduntry. They are questions that, over the last six or seven years, we have more than once asked should be put in the House of Representatives, but so far without any response. There may be perfectlv satisfactory answers to them. but. even if so. the public are entitued to have them.