TRUST FUNDS.

Press, Volume LIII, Issue 15896, 9 May 1917, Page 6

TRUST FUNDS.

TO THE EDITOR of ''tite rnF.ss." Sir, —In regard to trust accounts or sums placed in the hands of either coinpanics or solicitors lor investment, there seems to be a great want of control orer such, in as far as the present system generally in vogue works out to the insecurity" of such funds. I point out the many cases that have occurred during the history of this piovincc and, in fact,. New 'Zealand generally. Mind, I .am not throwing stones at the order of solicitors or others ontrusted with funds for investment, but I take exception to the system of trust that lies in the thing itself. Of course, there arc plenty of firms or solicitors of exemplary "business capacity and probity ana hbnesty that with whom no fault can bo found as to the safety of funds entrusted to their carc for investment, but that does not leaven the system of trust matters. Could not tho solicitors or others entrusted with such funds be formed into a body -whereby, if a fraud is perpetrated by any member of such trust funds, that body would be made responsible for the act of any individual member, and such or any loss incurred through the acts of such be made good to those who have sustained a loss through trusting their funds to one of ' a profession -who are in all ways a definitely closc union as a 1 body. I suggest that a Public {Jovernment Receiver should be appointed, to whom •should be given the authority to hold all trust funds from all sources, and it should be that before any trust funds arc invested he should* satisfy himself and be responsible for such investment. That the system- now in sucJi matters of trust and investment is faulty there is no doubt. The question is, what is the remedy? Ts the present individual trust to remain, with the constantly recurring cases that occur and which are recounted by tho Press under tlic name of defaulters or worse titles? "Would it not, therefore. be for the safety ol the genera! pubiir if some system "were established by which trust funds could only be in\>ested by the scrutiny or advice of a superior authority, and that ofticer or authority, to hold the trust funds, as it were, in his control, and no individual use could be made of such or through such until that officer was satisfied as to the destiny of such funds and the security of such investment? I am perfectly aware that this is a big question. But so many people have been ruined by entrusting tlieir accounts or funds to the individual authority and trust of others that are not responsible for i.he outcome of their transactions any further than loss of position or perhaps expulsion from their profession or a term of imprisonment, which to their ruined clients is ver v small satisfaction for their lo«t property and solid cash an { | their probable ruin. Probably some system of satotr could bp found whereby a guard against, dishonesty or faulty business cai>aeity could he arranged, whereby such funds would be safe, entirely so, and not as now, just left to the amount of the individual honesty of a faulty system, as is now the case.—Yours, etc., OBSERVER.