CHAIRMAN'S ADDRESS

Evening Star, Issue 20509, 13 June 1930, Page 2

CHAIRMAN'S ADDRESS

The Chairman, in moving tho adoption of the annual report and bal-ance-sheet, said: In coming before you at the annual meeting of shareholders of tho_ company as chairman for the first time, i. am sure vou will appreciate the dilhcult task set mo in attempting to m any wav adequately express the sense of loss wo all must feel this company has sustained by tho passing to the “ Beyond ” of our co-dircctor, fellowcitizen, and friend, Sir George benwick. All of you are aware how many and how varied were his activities and interests in our city—by no means the least of which was his care of, and regard for, tho success of this company. For seventeen years a director, the late Sir George Fenwick occupied the chair for fourteen of those years, with results which you have already been made conversant with, and which themselves declare the value of his guiding hand and the ability he displayed throughout his term of office. If consolation there be, it must he in the fact that it was vouchsafed to him to live to a ripe age, and to be able to sustain a vigorous interest in all his activities to the last. It is now beyond our power to do more than revere and cherish tho memory of one who was so accurate in his. work, indefatigable in endeavour, moderate in his opinions, and full of consideration for everyone, whether great or small. For myself I can only add, it.will be my humble endeavour to follow closely in tho footsteps of my predecessor in my desire to ensure a continuance of tho success this company has so long merited and enjoyed. Tho central aim of those who ( have gone before has been to make this business’ a fraternity more than a company to ensure the personal caro and consideration of those left in our charge, as well as tho financial security of tho estate, and also tho attention necessary for the well-being of tho testator’s own business—if any. And hero may I say that no time or care will bo spared by either tho present board or management in dealing similarly with all trusts reposed in them. It is at such a time as this, one may be pardoned for becoming in some measure retrospective and bringing to the front onco again the names of those who have so ably assisted in placing the company on the solid foundations upon which it stands today. It is thirty-one years last January since I was elected a director in lieu of tho late VV. Downie Stewart, and upon the retirement. of the late W. H. Reynolds, and may I say in passing that the problems which faced us at that time were not one, but many; Amongst one of the first things done was to call the late Keith Ramsay to the board. I will ever appreciate tho great assistance he was to tho board, while it was through his instrumentality that, some four years later, tho late James Hazlett and the late Robert Glendining became members. Both served with zeal in the company's interests, the farmer for ten years and tho latter for some fourteen years, until, in fact, ill-health made further service impossible. Mr Ramsay was taken from us in 1906, and it was then tuac tho. late T. W, Kempthorne and tho late John Mill joined forces wth us. Mr Kempthorne was nine years a. member, nearly all the time in rho capacity of chairman —as already recorded in the late Sir George Fomvhk’s address of 191'5while Mr Mill was with us for twenty years, ever vigorous and consistent in his endeavour on behalf 'of our company and its clients. It was in 1912 that Sir George took office, followed very soon after by the late Donald Reid, sen. As already stated, Sir George served for fourteen yours as chairman and seventeen j’oars in all. Mr Reid’s term with us was short—some five years only—while his interest in tho company was real and his influence considerable. v

Is it any wonder, gentlemen, in tho face of the foregoing, that tho foundations upon which this company stands were “ well and truly laid?” Personally, I feel I have been fortunate in being privileged to associate for so long a period with so many “Accurate Builders.”

The directors of the present hour you know, and I am sure I am voicing the wish of each one of them when I say it will be their individual and collective endeavour ever to adhere to: tho foundation principles upon which this company has been built by those who have preceded us. Nor can 1 pass on without a word regarding our managers. The !ato Walter Hislop, who held tho position of manager from the inception of tho company in 1884 till his retirement owing to ill-health in 1909, was ono who inspired confidence and was greatly appreciated throughout the length and breadth of Otngo. During the greater part of this time Mr Hislop was also managing director. On his retirement the company was lortunato in securing the sendees of tho late James A. Park. He, as well as being an efficient. organiser, was one specially gifted with the faculty ot meeting both young and old, and con-

sequently did muck for the company during the fifteen years lie was with us. Mr lbbotson, who joined the company during Mr Hislop r s management, has been thirty-two years in its service;. He succeeded Mr Park, and for the past six years has had the full confidence of the Board of Directors in his capacity of general manager, as well as the confidence and assistance of our executive officers, all. of whom have had lengthy experience in our class of business. •••••. May I ask you to note, gentlemen, that'not oue amongst all the names mentioned has retired for reasons other than those of failing health resulting in incapacity to servo , further. Surely a record, and one which, 1 think, all connected with this company may justly be proud of. INANCE. Turning now to financial matters generally, and in so far as they may affect the operations of this coinpny, 1 may at onco say I feel the subject to be so vast—and the aspects so many and varied—that to attempt to deal with it would carry one quite beyond the scope of an address of this nature. I may, however, say—and I am sure it will readily be the financial world has been subject to considerable disturbances for some years past, culminating in very serious unrest during recent months. I think the cause must bo apparent to any clear-thinking mind—viz., a steadily growing tendency on the part of all classes of the community to live more and more on one another—in other words, the ever-growing tendency to deviso means of making money without working for it. This is invariably the cause of undue and irresponsible speculation, which seems ever to eventually result in gambling, bringing in its train many cases of disaster, seriously involving the more or lead legitimate investor. At the beginning of the year our local papers reported one of authority as saying—concerning the crash in the" United States—that '' business. has slumped .terrifically, and prefects for the coming year or so aro not at all encouraging/' The same papers also published a cable from London stating that " the depreciation of stock and share values must be upwards of £50,000,000," and that " the. public has lost at least £20,000,000 on wildcat industrial shares." Coming nearer home, wo have seen Australia being drawn into the storm, and no on o can yet say how. tar she has won through her difficulties. Wo have unquestionably suffered to some extent through our neighbours troubles, while wo deplore them and sympathise with her in them. And it I" have any object in saying what 1 have said it is.that wo may individually and collectively more readily recognise our possible difficulties and responsibilities, and set our house in order accordingly, so that if any storm should come our way wo may not bo found with sails uutrimmed. and consequently have to plunge badly arid suiter accordingly before wo can right ourselves again. ~ ' » „.. I am pleased to be able to say that so far this company has not been, adversely affected; at the samo time the serious drop in the value of almost, it not all, our natural .products must ot necessity give concern to all who really have tho welfare of the Dominion at heart. THE MAKING OF WILLS. The occasion of tho annual meeting seems to bo an appropriate time to refer to a few matters which the experience of the company has proved to be of importance to testators and thoso persons who are proposing to make their wills. This experience shows that usually the estate can be best administered when ample powers and discretions affecting management of estates, retention of good shares, choice of investments, incidence of expenditure out of capital or income, are given to an executor or trustee. If a trustee's discretions and powers aro too limited, much trouble and worry are caused, and costly applications to the court aro sometimes necessary to rectify tho neglect or omission of a testator. It even happens that an application to the court will not produce the necessary relief on account of tho very wise principle that the court should not, speculate arbitrarily on what the testator intended to, but did not, insert in his will. The contention I am striving to bring before the testators' notice is that if they are prepared to put all their faith and confidence in the executor and trustee of their wills, they should give such executor and trustee wide powers. The present state of trustee law has certainly made very large advances in this direction of recent years, but thero are very many useful powers which will not bo read into a will without special or express mention by tho testator in his final document. These remarks are perhaps more pertinent when applied to strong, popular, and well-tried trusteo companies, such as this company, rather than to private individuals, but, while the low should be jealous of extending the powers of trustees arbitrarily, yet your directors and management think legislation containing certain of tho powers given to tho Public Trusteo in the Public Trust Acts oould, without detriment to a testator's estate, be given to trusteo companies. However, until such legislation is passed, your directors trust that testators will, when instructing their solicitors to prepare wills appointing this company as their executor and trustee, give us the widest powers consistent with their wishes. Examples of powers very frequently left out of wills aro the following:—Power to trustees to buy a trust house for a widow while enjoying a life estate, and power to resell same, etc.; power to trustees to grant an allowance out of capital to a widow

nr life tenant in cases of serious illness or other sufficient reasons, if the estate is not a largo one; power to trustees to determine what moneys;, income, or profits are to be treated as capital or income, and what expenses are to be paid out of capital and income respectively ; power to treat all income, rents, and profits accruing at date of death as income, without the necessity of apportionment. Wo know of testators who thought all these powers were as a matter of course granted ; to trustees by law, but on learning they were not, quickly instructed their solicitors to make "fresh wills including such powers, thereby helping their widows and families, and, incidentally, saving much expense and worry. Shareholders and the public generally perhaps fail to realise how judicial a company of this kind can be. and so often is called on to be. Since I joined the board, innumerable have been the small difficulties and dissensions raised concerning and between beheficiaries. vet I do not remember one case which has not been amicably adjusted. Tho directors elected by the .shareholders arc independent of any legatee or beneficiary, and therefore every point brought before them is dealt With impartially. In some cases the decisions arrived at have required the concurrence of the court, and such decisions have been invariably upheld. I assure' you, gentlemen, the one thing I have marvelled at since joining this board is the wonderful power a trustee company has for settling and adjusting little differences which, in tho hands of private trustees, would often end iti the courts. The matter is, to my mind, of great importance, and I commend it to your consideration, and. as before stated, making the powers in the'will as broad as possible. Tilings happen after death that one cannot possibly foresee or have any anticipation of, and with broad powers in its hands you can depend upon a board like this board never failing you in adjusting the apportionment reasonably and satisfactorily.

It is pleasing to note that the Family Protection Act has exercised and is exorcising a bonefipient influence in this country. Its influence over testators is guite marked, and now one finds that justice is usually meted out in wills to a wife and children where formerly grave injustices were perpetrated. As a trustee company with a large experience wo can confidently state that testators are recognising their responsibilities more and more in their wills, and are not leaving it to the law to do iustico to _ their nearest relatives. I refer to this Act, as its effect saves our officers a great deal of worry and anxiety in the course of; their arduous and onerous duties. Perhaps I should * again draw attention) to the remarks made by the chairman jat the annual meeting in 1920, when ‘ho stated, in order to remove any misapprehension that the directors of such a company as the Perpetual Trustees have an opportunity of knowing all about a client’s affairs. “It will be useful if I state that the directors of 1 this company know nothing of these matters; and, further, ever since I hav;e been a director I do not remember the contents of a will being placed before the Board of Directors by the general manager. There are instances where a clause of a will, in the opinion of the general manager, is not consistent, and this clause is brought before the directors for consideration and direction, but bevond this their duties as directors are more particularly in connection with cmestions of policy, finance, and investments, and not to pry into the contents of anyone’s will cither during his life or after his death. The company’s general manager is the confidential adviser of testators when they arc preparing theifi wills, and he is the confidential and trusted officer of the board. Estates falling in for active management are realised, and it is only when nuuortant matters connected with estates require the combined consideration of the board and general manager that; the directors are brought into acouaintanco with some of the detailed provisions of any will in the company’s hands.” Though perhaps unnecessary. I might emphasise the fact that all matters placed in the company’s hands are treated as strictly confidential, the directors and all members of the staff being bound under bond to observe the strictest secrecy. RATE OF INTEREST. When the present Government came into office and announced its intention to prosecute,, a vigorous! policy of State lending, at a lower rate of interest than that then ruling, lending institutions such as ours experienced a slackening in the demand for mortgage investment ifionoys. l,n consequence funds commenced to accumulate, ' and private lenders were warned to expect a slight fall in the mortgage interest rate. To any Government’s operations in this direction there are always definite limits, and when at a Inter period the present Goverrimonj) found it necessary to offer the increased rate of 5i per cent, for its new [loan issues, the easing tendency ceased and interest rates hardened a littleJ For the time being the interest rate for first mortgage investments is firm at 6 per cent, in the South and 6|,per cent, in the North, and for some months past money for such investments has not been over-plentiful. The banks have found it necessary to again raise their overdraft rates, and also to very materially increase their rates of exchange. It is to bo hoped the new rates will not have to bo kept in force for any lengthy period, as they are undoubtedly a heavy burden on our industry and commerce. LEGISLATION. With the exception of a renewal of the Rent Restriction ;Act, 1916, until August I of this year, no legislation of any importance to our business was enacted during last session. It was, of course, not to be expected that the first session of a new parliament would be productive of any . fresh legislation affecting trustee or administration law, and the present state; of the country’s affairs certainly renders it almost impossible to expect early action in this direction. There is, hhwever, no reason why such well-known [ Acts as The Administration Act, The Trustee Act. The Settled Land Act, The Property Law Act, and The Companies Act should not be completely revised in the near future and brought more into line with the enlightened legislation, on the respective matters dealt with by such Acts in England and in some 'of the Australian States. • CLIENTS' BUSINESS UNDER CONTROL AMOUNT TO £6,528,033. It is, i am sure, always interesting to shareholders to hear something of tho progress made from year to year by the company, because by such progress is measured tola very large extent tho great meagijre of public confidence which is now reposed in The Perpetual Trustees Company, In 1929 the business controlled, taken at market valjucs, amounted to £6,241,136, while fpr■ 1930 tho amount has risen to £6,528,6(33; but owing to tho recent temporary drop in the market value of assets, s'uch as shares and debentures, tho total for 1930 is not as large as it 'would otherwise have been. Tho increase for the year 1930 over its predecessor is therefore £286,897, and tho total comprises many and varied assets, such as Government and local body debentures, bank deposits t fixed and current), mortgages, shares, farm lands, business'properties, debenture trusteeships, anti other assets.

That these figures are impressive you will I am sure, agree, and you will readily understand tho amount of care and attention, as well as responsibility, which the direction and management of a business tho size of ours calls for on tho part of both the directorate and management and tho staff of the company. BRANCHES. It is gratifying to be able to report that satisfactory progress lias been made by all of the company’s branches. Our aim is always to give efficient service together with courteous attention to the company’s clients wherever they may be, and wo have evidence on record that our efforts in these directions are appreciated. Trustee coluoames such as ours are in a position to provide facilities and safeguards which cannot be expected of most private trustees, and because of our organisation and long experience we find testators more willing than ever to entrust the administration of their estates to our care, whilst many estates m which private trustees had been appointed are being handed over to the care of our company. Clients who have business interests in other centres or who have gone to reside elsewhere have expressed their appreciation of the attention bestowed upon them add the care taken of their affairs by our branch managers and staffs. I should like here to express our thanks to our branch advisory directors, Messrs Hewlett and Ronaldson, of Christchurch, and Mr Joseph Preston, of Oamaru, whose services aro appreciated by both ourselves and our clients. As has been said before, our best advertisement is the goodwill of our present and past clients, and this fact has been demonstrated to us time and time again. THE BALANCE-SHEET.

The directors’ report, balance-sheet, and statement of profit and loss having been in the shareholders’ hands tor the past ten days or more, i propose to take them as read. On referring to the balance-sheet shareholders will see that the paid-up capital is shown at £22,500, and they will no doubt recollect that provision for tho increase to that amount from £20,000 —making the paid-up value of tho shares 18s each—was made last year. The reserve fund is shown as £19,000, and it is now proposed to add a sum of £2,000, thus increasing the reserve fund to £21,000. On balancing date there was a temporary bank overdraft of £3,222 18s 2d. This was caused by clients’ money not being wholly in hand for investments which had been arranged for them in advance. On the assets side of the balance-sheet there is little variation in the items. The chief variation is the balances due to the company, Which is shown at £99,830 17s 2d ns against £76,434 17s lOd for the previous year. This increase is chiefly due to the increase in the volume of our business and to greater financial assistance rendered to estates under our administration. About the balancing period the market was not too favourable for the realisation of securities, and consequently the assistance given to new estates has been much greater than usual. The profit and loss account discloses that tho gross income from all sources amounts of £27,412 8s lOd, an increase over the previous year of £1,051 3s lid, while the net profit for the year amounts to £7,912 17s id, and it is proposed to deal with the available balance of £9,547 2s Id as shown in the . directors’ report already referred to. V I now move the adoption of tho report and balance-sheet.