8.—9

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Collection of Interest. 146. Needless to say, the interest earned on investments for the year just closed reached a very considerable total. Interest on local-body debentures is collected by the Head Office, but the primary responsibility for the collection of all mortgage interest rests primarily with the District Public Trustees, who are required, however, to report to Head Office all amounts in arrear after a certain period, and also to submit for approval applications by mortgagors for extensions of time in which to pay their interest. Though the interest due has not come to account quite so readily as in the previous year, when conditions, especially for the farming community were much more favourable, yet the collection has received good attention, and the result has been satisfactory. In appropriate cases, where good cause could be shown, temporary extensions of time for payment of interest have been granted to farmers on reasonable terms to permit of their liquidating the indebtedness from the proceeds of their season's produce. Supervision op Securities. 147. In the supervision of country properties mortgaged to the Public Trustee the District Public Trustees have the assistance of the staff of Farm Inspectors, whose knowledge of farming conditions and problems is of great benefit. Where country properties are mortgaged under the long-term system periodical inspections are carried out, usually at five-yearly intervals, by the Farm Inspectors, to ensure that the properties are being efficiently farmed and adequately maintained. In special cases inspections are carried out at shorter intervals. In the comparatively few cases where the Public Trustee has been compelled to enter into possession of a mortgaged property, or to acquire it by sale through the Registrar of the Supreme Court, it has generally been possible to dispose of the property subsequently either by sale or by lease. The number of instances in which the Public Trustee has been compelled to farm the property through inability to dispose of it is very small, and in those cases the properties are worked by competent managers under the control of the District Public Trustee concerned and with the supervision of one or other of the Farm Inspectors. Repayment op Mortgages prior to Maturity. 148. In the earlier months of the past year, when moneys for investment were everywhere plentiful, a considerable number of mortgagors made application to the Public Trustee to accept repayment of their mortgages prior to maturity date, these requests being occasioned not so much by the possibility of obtaining loans at a lower rate than that charged by the Office — viz., 6 per cent. — but because in certain cases mortgagors were able to obtain larger advances from outside the Office, thus enabling them to reduce subsequent encumbrances, often bearing high rates of interest. Each application was treated on its merits in the light of the existing financial position, and where it was shown that hardship would result from refusal to accept repayment arrangements were generally made to take the moneys back on payment of premium interest for a period conditioned by the state of the Office funds at the time. To meet the needs of those applicants who at the time of taking up the loan desired a definite right of interim repayment to be embodied in the mortgage-deed, it has been decided to grant such a right provided that the mortgagor covenants to pay an additional \ per cent, above the interest-rate then current. It is of interest to record that a number of mortgagors have already availed themselves of this arrangement. Legal Charges for Mortgage Work. 149. I have also made reference earlier in the report to the fact that during the year amending regulations were issued under the Public Trust Office Act, 1908, prescribing a new scale of charges for the preparation, release, renewal, extension, or rearrangement of Common Fund, Special Fund, or estate mortgages. As I have indicated, in fixing the new scale the principle has been adopted of lessening as much as possible the expense incurred in raising loans by borrowers in moderate circumstances. Thus the maximum reduction affects loans up to £100, a slightly smaller reduction is conferred on borrowers of amounts over £100 and up to £500, and the reduction lessens by successive steps on loans over £500 and up to £1,000 and on loans over £1,000 and up to £2,000. The former scale