NO CHEAPER MONEY

Sun (Auckland), Volume III, Issue 782, 1 October 1929, Page 10

NO CHEAPER MONEY

PUBLIC TRUST OFFICE’S POSITION MUST PROTECT TESTATORS There is little possibility of a reduction in the rate of loans made by the Public Trust Office as a preliminary to a general reduction in the rate of interest on mortgages, according to the annual report of the public trustee for presentation to Parliament. The special position the trustee

occupies so far as the investment of funds is concerned, which makes this step impossible. is stressed in the report, which continues: “The funds available to the public trustee arc nor Government moneys. Dili represent assets in estates which are entrusted to him for administration. Both in the administration of estates and in the investment of moneys derived from those estates the obligations of the public trustee correspond with those of a private trustee, and include the duty of seeing that the maximum rate of interest is obtained consistent with the security of the trust funds. The amount so derived, after a small deduction made to cover the cost of working-expenses and the provision of the necessary reserves, is made available to the beneficiaries who are entitled to it.

“it will thus be seen that the principles by which the public trustee must be guided in the investment of funds are the general economic conditions prevailing and the extent to which there is a demand for money on mortgage: the special statute law under which the Public Trust Office is established and by which the public trustee is bound: and the general lavgoverning the rights and duties of trustees.

‘A. lowering of the rate of interest on loans by the public trustee in order to make cheaper money available to borrowers would be a grave breach of trust, and, if any grounds existed for the belief that the funds invested by the Public Trust Office were not being invested at the current rate obtain-

able on good trustee securities, confidence in the office would be shaken. A reduction in the present rate charged to borrowers would be followed by a reduction in the income of those persons whose interests the public trustee is bound to safeguard, many of them women and young children alreadj' inadequately provided for and dependent for their living on the income derived from the funds held by the public trustee on their behalf. Anj' reduction in the rate charged by the public trustee must, therefore, follow. and not precede, any general fall in interest rates in the open market.”