CONTROL OF £6,000,000

Evening Star, Issue 19893, 15 June 1928, Page 8

CONTROL OF £6,000,000

PtBPETUIL TRUSTEES SU.

REMARKABLE YEAR'S BUSINESS REVIEWER SURVEY OF DOMINION'S POSITION During the past year estates, trusts, and agencies of various kinds of a value exceeding £BOO,000 have come into our hands for administration, while in the same period the estimated value of new business iu wills in respect of which the company has knowledge is over £3,100,000. The actual total must largely exceed this amount. . . . Tho total , of business controlled is £5,915,000 . . . and the increase during the three last years amounts to no less a sum than £1,605,000. :• With these words, in the course of his address at the forty-fourth annual meeting to-day of the Perpetual Trustees, Estate, and Agency Company of New Zealand, Ltd., Sir George Fenwick (chairman of directors-) summarised the remarkable growth of the company. His address, in addition to fully exploring the position for' the benefit of shareholders, provided a wise and interesting commentary on dominion affairs. “ It is with' regret,” said Sir George at tho outset, “ that I begin my address to-day with a reference to the death of the company’s late general manager, Mr James A. Park. Mr Park joined the company as manager in Slay, 1909. in succession to the late sfr Walter Hislop. Although the foundations of tho company’s business had been well and truly laid, Mr Park did much to advance and extend the company’s operations during the fourteen and a-half years of his management. In December, 1923, he relinquished for time being his duties owing to jndisposition, and in July, 1924, continued ill-health necessitated his retirement. Our condolences have already. been conveyed to Mrs Park and family. “ Because of the fact that our business has grown into one of the largest in New Zealand and that our interests are not only doibinion-wi.de, but extend to Great Britain and to other parts of the world, I propose to refer shortly to several matters of more or less genera] interest before dealing with the annual accounts of the company. THE DOMINION’S TRADE. “It will be remembered that the year 1926-27 closed with an adverse trade balance and fluctuating prices, and with business in n somewhat stagnant condition generally. Since then we have hoped for and have striven successfully to obtain better results, and it is very gratifying to learn that for the twelve months ended March 31 last there is an excess in vaTue of exports over imports amounting to £lO,542,674. Such a. result speaks volumes For New Zealand’s extraordinary recuperative power. It is a most gratifying ending to a year’s, trading, and indicates that the dominion is steadily getting back to stable conditions of trade and finance; and, further, that we are gradually being freed from the fluctuations and unprecedented conditions brought about largely by the Great War According to Customs returns for the year ended March 31 last our total exports increased in value by £9,279,693, while our imports decreased to the extent of £3,773,313, making a total gain of £13,053,006. It must, however, be noted that more than half the increase in value of our exporta for the year was duo to tho increased value of one product alone —viz., wool. It is true latest advices from Great Britain indicate that, prices for wool remain good, and even show a tendency to harden slightly: but I think it should bo generally recognised that, our wool growers have received very remunerative prices of late years, and that these cannot continue at present levels indefinitely. Even a moderate fall in present prices for wool would seriously reduce the dominion’s wool cheque, and as such a fall must he expected to take place sooner or later—is indeed probably expected by those who handle and market this particular product—it behoves our wool growers, in both their own and the dominion’s interests, to endeavour to make up in quantity and quality what may be lost by a fall in prices. By putting into practice tho latest methods for improvement of pastures by scientific topdressing the carrying capacity of our sheep-grazing lands can be considerably increased all round. “Regarding our export of dairy produce. it is interesting and satisfactory to note that, in quantity as well as in value, the export of hatter and cheese for the year 1927-23 exceeded that of 1926-27, and the same may be said regarding tho export of wool from the dominion. Regarding the reduction in the amount of our imports, a study of the figures discloses tho fact that a great deal of the fall is found in tho figures for motor vehicles. The value of these declined during the year just ended by no less than £1.306,474. In 1925-26 the dominion imported motor vehicles to the value .of £4,229,799. In 1926-27 the importations dropped to £3,181,287, and tho year 1927-28 disclosed a further substantial drop—viz., to £1,874.813. or a total decrease in two years of £2,354,936. ft is also satisfactory to find that, while wo have reduced our imports by slightly over three and threequarter millions'pounds in all, the rate of fall has been much less in the imports from the United. Kingdom than from other countries. Of tho total reduction of three and threequarter millions one and three-quarter million pounds represents the value of decreased importations from the United States of America, alone, and less' than half a million pounds represents the reduction in our imports from Great Britain. These figures go to show that we aro coming to recognise more forcibly tho fact that wc must support the Home Country (our best customer) if we expect her to support us by taking the great bulk of our primary products. STATE INTERFERENCE AND UNFAIR STATE AND PUBLIC BODY COMPETITION WITH PRIVATE ENTERPRISE. “In the opinion of a great many of the dominion’s leaders in industry and commerce there has been for some considerable time past a hastening of the trend of legislation which is harmful to private enterprise, and an acceleration of the interference of Government departments in the conduct of our various business activities. Tho contention is put forward by some that it is the heads of departments who are running the country, and that while the Government of the day agrees that there should be-‘ less Government in business,’ it is not causing this principle to be put into practice. I agree that wo ought not to be subject to unfair competition from Government departments, but the whole subject is for various reasons a very difficult and complicated one, due very largely to unprecedented conditions resulting from the Great War and its aftermath. Wo have, I think, both individually and collectively, to shoulder a great deal of responsibility ourselves for the present condition of affairs. We appear to have largely lost those outstanding and commendable qualities of sturdy self-re-liance and independence, and that concern for and interest in the government and welfare of our country as n whole, until, in the words of Herbert Spencer, ‘ The more numerous public

instrumentalities become, the more, is there generated-in citizens the notion that everything,is to bo done for them and nothing don© by them. Each generation is made less familiar with the attainment of desired ends by individual aetjons or private combinations, and more familiar with the attainment of them by governmental agencies, until eventually governmental agencies come to be thought of as tlie only available agencies.’ The Prime Minister has, I know, expressed himself in the past, and again quite recently, as being definitely in favour of private enterprise in preference to State trading; and so also have tho Minister of Finance and other members of Cabinet; and wbc-i they give effect to the opinions they hold in.this important matter, affecting as it does tho welfare of a large section of tho dominion’s population, it is manifest it will have an appreciable effect on. the ability of people to bear the heavy taxation which seems to be unavoidable under present conditions of public finance. RATE OF INTEREST. “The current,ruling rate of interest for first mortgages in Otago and Southland districts has remained stationary at 6 per cent, right through tho year. Whilst to-day it stands firm at that rate in the two. above-mentioned districts. our experience of late has been that in the North, where the rate has always been a little higher, flic tendency is for it to ease, and in the whole of the South Island at any rate to stabilise at about G per cent. This movement is,. 1 think, attributable partly to tho fact that money for mortgage purposes is a little more plentiful now than it was twelve months ago, and .partly because the business community expects an early reduction in the bank rate of interest on overdrafts and bank deposits. In this connection it should be noted that while at March 31, 1927, there was a serious excess of over £5,000,000 in bank advances over deposits, tho position at March 31, 1928, had changed to an excess of deposits over advances of not less than £4,000,000, a most satisfactory recovery of no less than £9,000,000. Wo have the assurance, of the Minister of Finance that he is closely watching tiie position, and I Teel wc may safely leave the matter in his capable hands and to the good sense and fair judgment of the banking authorities. LAND VALUES. “A year ago I made reference under this heading to the downward tendency iu the market value of most farm lands. During the course of our lending operations throughout the past year it has been increasingly evident to the board and management that the process of deflation in values has been steadily taking place. This process has been welcomed by our company, and by all who desire to see farmers’ finance placed on a sound basis. It will bo easily understood that it is a matter of considerable importance to an institution such as ours, seeing that we deal so largely in mortgage investments and have the custody of mortgage securities totalling £2,000,000. It is satisfactory to bo able to report that only in comparatively few instances, when arranging loan renewals, have wo had to ask for reductions in the amounts of existing advances. This fact is, I think, an indication of tho soundness of our mortgage -investments generally, and a tribute to the care of our valuers and the company’s management in the selection of sound cecurities in good districts. LEGISLATION, “Tho last session of Parliament, although. not fruitful in legislation of a class affecting our immediate interests, nevertheless enacted Jaws both useful and timely. The policies known as mortgagees’ indemnity policies, which mortgagees required borrowers, to take out to protect them, but which have always seemed to tho borrowers’ to bo incomprehensible and even mysterious things, have been abolished, and a small stamp duty of Is has now been imposed on now mortgages to establish a fund, under the control of the Government., to meet cases where mortgagees might suffer by reason of accidents occurring on the mortgaged promises.

“Two amendments io flic Property Law Act, 1908, are interesting. One of these alters the old presumption of our law known as comraorientes —i.c., dying together—the effect of which was to treat the deaths of two or more persons dying as the result of a. common calamity to have occurred simultaneously, unless there was some evidence to the contrary. In these days, when one of tho principal ambitions of man’s existence appears to be the desire to annihilate time and space by means of bis motor cars and aerial machines, accidents are painfully common, and it is often impossible to deckle- the order or survivorship of the persons involved in a common calamity. Tho Act referred to now provides that in such circumstances the law 'will presume that the younger shall bo deemed to have survived tho elder lor purposes relating to the succession of property. “The other amendment gives to property owners rights to create easemerits -as to the access of light and air to their respective premises. For over thirty-five years these rights have been very restricted, twenty-one years being the limit of their duration. “The Rent Restriction Act will.unless it is given an extended life by the Legislature, expire on January 1 next. In this city the Act is now an anachronism, for the demand for houses has been fully met,, and the ordinary economic laws nf supply and demand are prevailing, rentals generally being more reasonable. “It has recently been suggested that this country is definitely, lagging behind England and Australia m its laws as to the succession of property on intestacy and in those concerning executors, administrators, and trustees. A good sign of the times, however, is that the law profession of New Zealand p, arranging to hold annual conferences at which, no doubt, such matters as these will be discussed from time to time, and the necessity for appropriate legislation on these and other matters be° brought, to the notice of the proper authorities. The deliberations and criticisms of these conferences should, in certain respects, bo extremely useful to Parliament in devising now legislation. THE YEAR’S BUSINESS.

“ I am sure that our shareholders all look forward with in forest to bearing an account of the progress made by" the company during tbc year. It has been so rapid in the past, and particularly during recent years, that I must -say your, directors often ask themselves the interesting question, Can the present rate of progress continue? You -will. I feel, once again recognise in the figures 1 now present to you, that not only, is the rate of advance being maintained, but it is being steadily increased. During the past year estates, trusts, and agencies of various kinds of a value exceeding £300,000 have come into, our hands for administration, while in the same period the estimated value of new business in wills, in respect of which tho copipany has knowledge, is over £2,100,000. The actual total must largely exceed this amount. CLIENTS’ BUSINESS UNDER CONTROL AMOUNTS TO £5,915,000. “When addressing you last year I gave some arresting figures connected with the total value of the business then under the control of the company. The following figures will not only give a better idea, of the phenomenal increase, especially of late years, in the volume of the company’s business, but will forcibly indicate the great measure of public confidence reposed in tbc Perpetual Trustees Company 3925; Business controlled, £4,250,000. . 3928; -Business controlled, £5,935,000.

“From the foregoing, figures you will gather that the-increase "during -the three years (1926, 1927, 1928) amounts to no legs a sum than £l,665,000, which is equivalent ■ to an average yearly increase' of well over half ft million , pounds. Of the total for the year 1928 slightly over two million pounds is invested in sound first mortgages over city and country securities. In respect to those wo claim to have extended to both busi ness men and farmers a substantial measure of help in the matter of finance. Tho balance is made up of investments in debentures, bank do posits, shares, and lands and business properties, etc. Tho responsibility for the proper control and efficient management of what is now tho largest purely trustee company business in the dominion is fully recognised by the Board of Management, and, as may well lie conceived, is no light task. “ I have on previous occasions referred to the fact that our clients in many parts of the world speak highly of the treatment received in their business relationships with the company. Tho activities of tho company roach into almost every corner of New Zealand, and we are widely represented abroad. Only a week ago in a. loiter received with our Homo correspondence the question is asked, “Does your company have an agency, in Dublin?” Tho answer was readily sent in the affirmative. It is, ol course, very necessary that a company with a business the dimensions of ours should be in touch with trustee companies and legal firms and bankers of standing in tho principal world centres. It can, I feel, he truthfully said that the spirit underlying the words of the old motto ‘Put not your trust in money, but put your money in trust ’ has not gone unheeded in our community, seeing, as I. have just stated, that our company is in control of trust property of a value of close on six millions. BRANCHES. ” It is pleasing to be able, to report that good progress continues to be made at the company’s branches at Invercargill, Timaru, Oaniarn, and Christchurch. These branch offices are now well and firmly established. The rate of progress made at our most recently established branch at Christchurch* is better than we had at first hoped for, and additions arc steadily being made to the clients ol the company in Christchurch and North Canterbury. During tho year advantage was taken of the erection by the A.M.P. Society of new and up-to-dato business premises in Stafford street, Timaru, to secure good office accommodation in portion of the ground lloqr space. The society has fitted up this portion to suit the requirements of our business. Our Timaru staff will bo better and more comfortably _ housed than heretofore, and in a position to handle business more efficiently and expeditiously. In addition, we now have the advantage there of first-class strong room accommodation, which is a most important consideration where a trustee company is concerned. Tho support afforded to all oi our brandies, and the trust and confidence reposed in onr branch managers and staffs by members of the public, are in themselves very gratifying features, which go far to confirm tho wisdom of tho decision of the board and the general manager to open such branch establishments throughout the principal centres of the South Island. Regarding these extensions of our business, wo have always been definitely of the opinion that the establishment of branch offices is much preferable to the appointment of local agents. The business of a. trustee company is of a technical, intricate, and private nature, and as such its performance demands constant care and skilful attention, combined with personality and tact. In order, therefore, to fully and efficiently perform the duties for which our company was formed in the year 1884 by special Act of .Parliament, nothing short of properly established and fully staffed branch offices under the control of trained and experienced branch managers, with competent staffs boused in our own office premises, would, in the opinion of the board and management, suffice. Having such branch organisations, wo are able to give service of a kind that to tho fullest extent meets the requirements of our clients. Moreover, the large and over-increasing volume of trust and agency business now controlled by our bra noli offices is convincing evidence of the fact that tho public generally fully recognises the many facilities, saleguards, and advantages that a company such as ours affords in flic intricate and highly technical work of administering deceased estates, long-con-tinuing trusts ami settlements, the investment of trust and private funds, and the efficient control and expert supervision of properties forming part of deceased estates, and belonging to private clients. Needless to say, the company is extending to its branches the same full measure of efficiency, economy, and security that has been a feature of its many activities and business operations throughout the last forty-four years. From my knowledge and experience, gained through daily contact with our officers, 1 can, as chairman of directors, unhesitatingly say that from our general manager downwards the constant endeavour of each member of our staff is to give service, efficient:, courteous, and constant, to all who entrust their business to tho company’s care. THE BALANCE-SHEET.

“ Tljo directors’ report, balancesheet, and statement of profit and loss having boon in the shareholders’ hands for the past ten days or more, ■ I pronoso in take them as read. Before dealing shortly with the items they embrace, 1 should, perhaps, first say that the figures for the Invercargill, Oamaru, Tiinani, and Christchurch branches arc incorporated thnre.in. The paid-up capital'stands as formerly at £20,000, and the reserve fund at, £17,500. It is now proposed <o add a sum of £1.500 fo the reserve fund, which will increase that fund (o £19,000. Coming to the principal items on the assets side, it will lie noted that the cash in hank and on deposit amounts to £20,10-1 0s fid. At the balancing period several large estates were under realisation, and in certain cases the amounts lying at the credit of such estates have since been paid over. Mortgage money repaid, as well as new money received from dints for investments, also helped to swell this total at balancing period. Since the balance date suitable investments have been found for the money available for that' purpose. The result is that the bulk of the money shown in the balance-sheet has now either been distributed to beneficiaries, or else invested on behalf of estates or clients. There is no change in the debenture bolding of the company, while the mortgage investments of its own funds now amount to £23.100 ISs 4d. Coining to the profit and loss account, it is again gratifying to note that the gross income from all sources is a record for the company, and reaches the substantial sum of £2-1,464 17s, Sd, an increase over last year’s figures of £994 7s 3d. The net, - profit for the year just closed amounts to £7,357 10s 3d, which slightly exceeds' last year’s figure, arid it is proposed to deal,with the available balance of £9,006 11s 24 as shown in the directors’ report already referred to. I now move the adoption of the report and balancesheet. - “"We must all have listened with great interest to the. valuable and comprehensive address from our chairman, and, in rising to second tho motion for the adoption of the report and balancesheet, I desire to congratulate the shareholders on their good fortune in having such a chairman as Sir George Fenwick to preside at the board of directors,” said Air D. E. Theoinin. “ In addressing myself to the, report, 1 echo the chairman’s note of warning that wc must, not commit the folly of

believing htat because our wool has brought such a large amount of money into the dominion our efforts in other directions may he relaxed. Our eggs must not all be placed in one basket. There is no sound reason why almost every other primary industry should not bo cared for and made profitable, ft is most satisfactory : that tho fall in our imports from the United Kingdom is much less rateably than that from tho United States, but I am convinced that there is room for a far greater consumption of locally-produced articles of daily use, thereby still further reducing the total sum of imports.” Mr Theomin referred to the industrial effort of next week, and said it was fitting that' everyone should do his little bit by carrying into effect the theories to which so many of them had given voice. When making purchases they should remember that the welfare of tho public of New Zealand depended largely on the growth of internal trade. Whether prices were good or bad, there was a steady demand for goods of daily use. In Australia the slogan “Buy Australian Goods.” was widely advertised and supported, and he hogged that Otago should do all it could to back up the efforts of those who were advancing Otago Week to bring grist to the mill of the producers and the workers in the secondary industries, so enabling wages to be paid and tho money to lie kept as par as'possible in the country. “Regarding State competition with private enterprise, interference of tbo State, in addition to its gross injustice, cannot possibly foster self-reliance on the part of the population,” said Mr Theomin. “Self-reliance should over be a marked characteristic in the people of a young and democratic country'such as ours. Herbert Spencer emphasised the danger that is almost bound to arise from tho development of Government agencies, and when we observe how a leaning post will attract loaners, we may well ask ourselves whether tho so-called ‘State enterprise ” will not eventually react injuriously, inasmuch as it not only cripple* individual action, but at the same time makes those who’have an inclination to lean more willing than ever (o continue leaning. “ Tliel’rime Minister and the members The Prime Minister and the members of his Cabinet may justly be expected, and should bo continually urged, to giro effect to the opinion they hold and have publicly expressed in favour of private enterprise. An ounce of practice is worth a pound of precept. The steady advance in the volume of bus’mess transacted by the company is indisputable evidence that onr clients have been and are well satisfied with tho treatment accorded to them. I am of opinion that many of them have acted ns unpaid agents, and have recommended the company to their friends. No amount of advertising can bring about such satisfactory results as are achieved by recommendations, and so long as the same careful administration is pursued as now obtains so long will our figures grow, and a reasonable but steady profit be made. It is with much pleasure that 1 now second tho motion for tho adoption of. the report and balance-sheet.” RESEARCH WORTH MILLIONS. At the invitation of the chairman, Mr Charles H, Hewlett, local advisory director at Christchurch, rose to speak. Flo remarked that the company’s business had greatly progressed since the last annual meeting, as the company was becoming better known. The Christchurch manager was 'very energetic, giving considerable time to the company’s affairs, and the money lent was on sound security. Canterbury bad experienced a good year as to primary production, and the Agricultural Department had shown that enormous increases could be obtained by using the knowledge that came from research work. The plant-breed-ing station was of special value. He felt satisfied that millions of pounds could he gained per annum by tbo results of research and study at our agricultural colleges. No questions were asked. The motion for the adoption of the. report was therefore put and carried. DIRECTORS RE-ELECTED. Air Alex. Lindsay moved tbo reeled ion of Mr W. H. Reynolds and Mr George Black as directors. Both, bo remarked, were well known. Mr Reynolds was one of the founders, ami Mr Black, who recently joined the board, was a tower of strength. Coming from Canterbury, lie (Mr Lindsay) could say that tho business there, was prospering, and that tho Timaru branch had exceeded all the expectations formed when it was established. Mr 0. G. Smith seconded tbo motion, and it was carried. Mr Reynolds (banked .shareholders very sincerely. He considered it no little honour to bo a. director of tbo company. The hearty way in which shareholders supported tbo company, not only in entrusting their own basinets to it, but in encouraging others to do likewise, hud a groat deal to do with tbo success achieved. The harmony between shareholders, directors, and staff was another distinctive feature of the company. All concerned recognised that in Air Ibbotson it had a worthy manager.

Air Black aUo acknowledged the vote, thanking shareholders for tho mark of confidence in him. Tie would continue to serve to the best of his ability. The Chairman observed that the two newly-elected directors were extremely valuable members of the board. Mr Reynolds knew' tho company’s history from beginning to end, and Air Black's vast knowledge of country affairs was very valuable. On tho motion of Mr .1. G. Patterson, seconded by Mr W. Easton, the meeting rc-clccied as auditors Messrs Win. Brown and Co., Messrs G, Blyth and Co. (Dunedin), Mr E. A. Webb (Invercargill), Air D. Revoil (Timarn), and Messrs W. E. Best and Wilkinson (Christchurch i VOTE OF THANKS.

Mr J. Sutherland Ross, in moving a hearty vote of thanks to the directors and the staff, said that in recent times the fluctuations in the value of property o) all sorts had been very great, making tlie job ol director anything but a bed of roses. In a company like this, not a, trading concern, but a trust company, each .shareholder had a responsibility to clients, and the board, ns representing the shareholders, was the guardian o) their consciences, and he fell lie was voicing the opinion ot -shareholders generally in saying they were perfectly sure that tho men on the board were well cjualiiicd to guide the ship on an even keel. A debt of gratitude was also owed to the staff, ft was of paramount importance that the company was served by men in whom absolute trust could be placed. Mr Rots went on to say that ho thought the dominion’s seven lean years were now’ over, and that scientific research was going to be of great help. He knew of one concern which was saying £20,0(40 a year by adopting IDo fruits of industrial research. Tho motion was carried with heartiness.

Sir George Fenwick responded on behalf of the directors, and look occasion to emphasise the duty lying upon every person in the community to help our secondary industries by prefering New Zealand goods when shopping. Air Alfred Ibbotson. speaking for ihe estall, said that the members were carefully chosen, the appointments being of men who through study and training and experience were thoroughly efficient not only for individual effort, but also for team work. Whatever means had been achieved was, he thought, owing to the selection of its staff and to the hearty support of the directors. Air Tbfiotson also called attention to the. fact that large sums of money had been and were being placed with the company for the relief of the aged and distressed, such monies to be distributed practically at the discretion o* the directors. That was a tribute to the company and an honour to onr city.