PERPETUAL TRUSTEES.

Otago Daily Times, Issue 18896, 23 June 1923, Page 17

PERPETUAL TRUSTEES.

ANNUAL MEETING UF COMPANY. A SUCCESSFUL YEAR. f I he thirty-ninth annual meeting of shareholders in the Perpetual Trustees, Estate, and Agency Company of New Zealand was held yesterday and was attended by between 20 and 30 shareholders. The chairman of directors (Sir Geobge FehiivJck) presided. CITA IftMAIL’S ADDRESS, y In moving the adoption of the report (already published), the Chairman said: THE YEAR’S BUSINESS. Last year I had the pleasure of congratulating shareholders on the steady progress of

the company’s business. Similar progress has marked the year which has just closed, both at head office and at'the branches in Invercargill iind Timaru.. At ..Oaniam also a forward movement has been made in the appointment of a local director—Mr R. Milligan, a prominent and progressive business man, having accepted the position. The continued expansion of the business has rendered necessary the extension of (he office accommodation by making use of part of the upper floor of the company's premises. The bookkeeping and typing departments have now more convenient and comfortable ."quarters. Tluswill materially facilitate the work of this important, section of the office staff. INVERCARGILL AND TIMARU BRANCHES.

Since last annual meeting changes in the management have been made at Invercargill and Tiraaru. In the former town the board carried out an intention it had in view for some time previously and sent a member of its head office staff to assume control as manager of the company’s Southland business. It felt that the time had arrived when (his important section of its bold of operations should be placed under more immediate control and supervision as a fully organised branch of the business. The necessary arrangements were all the more easily made through the hearty cooperation of Messrs Rout and Stewart, who had for a great many years been agents for the company in Invercargill, and through whose hands a largo amount of business had come. The directors recognised that Messrs Rout and Stewart had served the company with great fidelity, and, after discussing the terms of the proposed change with them. an agreement was come to under which the company should retain a portion of Messrs Rout and Stewart’s office premises, and have the ad-

vantage of their co-operation in carrying on the business. In accordance with these arrangements, Mr Leslie, of the company’s staff, was appointed to the position of Southland district manager, and assumed his duties in February last. In connection with the South Canterbury branch, Mr Ibbotson, the company's chief accountant, who was sent to Timaru to open the branch about two years ago, having successfully accomplished that work, was transferred to the head office about four months since. Mr P. B. Foote having been appointed district manager at Timaru. Since Mr Foote took up his duties in February business in Timaru has continued to lie very good, and the wisdom of opening a branch for South Canterbury is more and more demonstrated. The business of the office in Timaru has had added to it a new feature through the company having arranged that it shall act as chief agent, for the Standard Insurance Company in that centre. Reports from Mr Foote show that, satisfactory progress is being made in both Timaru and the prosperous district of which it is the centre. The directors now feel that, in the arrangements I have just * referred to they have satisfactorily provided for the extension of the company’s business, on a sound and permanent footing, not only in Otago and Southland, but in the large and progressive area of South Canterbury, and they confidently look forward lo the time when these, branch establishments will -ba-'profit-able adjuncts to head office business. MORTGAGE AND OTHER ' -SECURITIES. The total value of business now controlled by tbo company amounts lo well

over £5.000,000. During: the past year, estates, trusts, and agencies have come into the company's hands for actual admitlist ration of a total value of approximately £252.500, while-the number of wills -lodged with the dbfhjwiny during tho past, year shows a very decided increase over its predecessor. For tho year 1921-192?. it was estimated that wills representing estates of well over £1,000,000 had been made in favour of the company, and it is estimated that tho value of estates represented by (ho wills obtained last year amounted to £1.200.000. a total of almost two and a-quar-ter millions fop th? (wo .years., .ft is, of course,! not possible to estimate the value of estate* represented in wills executed in favour, of. the company and held by solicitors, but the aggregate value must also bo very large. It is right that I should say that notwithstanding these forward movements your directors have exercised a conservative policy in tho control of the company’s business during the past few trying years. Both directors and staff have at times had anxious hours, and have given their deep attention to many problems with which they have been faced. Some mortgage securities have required careful handling in the interests of both mortgagee and mortgagor, and with respect to these the policy of- assisting the mortgagor to surmount his difficulties has proved to be a sound one. As I mentioned last year, in considering applications for loans on mortgage your directors restricted themselves to those in the South Island, although higher interest ruled for advances required in the north. They have been fully convinced of the wisdom of their decision. It will, I think, be of interest to you to know that the value of the properties situated in Dunedin and its alone, which are now under the company s care and management, amounts to slightly over half a million pounds. Naturally the handling of such a largo connection necessitates great, care and expert attention. WORLD FINANCE AND COMMERCE. It may not bo without interest if I briefly refer to the present chaotic state Of ,ae commerce, industry, and finance of the world. There is an alarming unrest everywhere, and the position on the Continent is of the gravest. As to the state of affairs in Great Britain, the statement contained in Mr Lloyd George’s pregnant, remarks in London in April last makes the thoughtful ponder. In referring to Mr Snowden’s amendment in the House of Commone, and to Mr Ramsay MacDonalds statement that he (Mr MacDonald) " knew I,hat the Independent Labour members favoured nationalisation and-a capital levy, and that, nearly one-half of the British electorate is already prepared to assent,’’ Mr Lloyd George pointed out how, in his judgment, the trouble may be averted—viz., “in two ways—the systematic inculcation of sound doctrines of economic truth into the minds of the workers, and tho rooting out of the social evils which furnish the revolutionary with striking and indisputable object-lessons of the failure of the capitalistic system as an agent of human happiness.” It is not necessary we should follow Mr Lloyd George to the conclusion he has apparently arrived at. as to the “failure of the capitalistic system as an agent, of human happiness.” No doubt there are evils resultant from the relations of capital and labour that require redressing, but. tho position of great independence that Labour has attained in tho commonwealth and New Zealand is ample demonstration that in these young southern nations at any rate tho so-called “ wagosiavcry” of the labour extremist has not the remotest foundation in fact. On the contrary, the much-abused capitalistic system in these southern lands has placed the worker in a splendid position in relation to capital. Tho truth is that the great factor required at the present time for the establishing of happier and more stable conditions is a World Peace, and it is comforting to know (hat a nation which has held aloof from taking her share in the endeavour to bring this about is beginning to realise that she cannot permanently isolate herself from participation in an endeavour to secure this, as witness the pronouncement of President Harding, published a few weeks ago. An examination of the profound questions-involved-in a consideration of tins world subject is, however, not. permissible at the annual meeting of a company held to look into its own special affairs, although it is undoubtedly the case that these great nuestions affect all public and -private business indirectly or directly. As bearing on (he subject, I may just refer in passing to the opinion expressed bv the Hon. W. Downie Stewart, Minister of Internal Affairs, at the annual meeting of the Wellington Chamber of Commerce recently. He said that certainly we had reason for congratulation for the brighter position in New Zealand compared with that of a few years ago, hut that it was scarcely permissible to say that we are yet “out of the wood.” Others with him consider the outlook very unsettled, and that the 1924-25 season will bo fairly serious. Mr

Stewart advised everyone to as far ns they can make everything snug and shipshape in case trouble comes. This opinion, coning from an economist of Mr dlewart s standing, shows that he has been watching carefully not only our local conditions, but the unrestful state of the world at the present time, and the disturbance of trade and finance which these conditions involve. THE POSITION IN NEW ZEALAND.

New Zealand has, however, every reason to be proud of her standing in the commercial and financial world, and it must be admitted that she has made a satisfactory recovery and is certainly in a very much stronger position from a financial point of view. The high estimation in which the dominion is held in England is shown by the readiness with which her £4,090,000 loan was taken up last month, the Financial Times remarking that “as trustee investment stock the loan may bo recommended with confidence.’’ Doubtless Mr Massey was justified in going on the market for the full amount of the loan, but there is a feeling abroad among those who take deep interest in the dominion's future that further borrowing should be restricted as severely as possible in view of our enormous indebtedness and the tremendous interest bills we have to pay. The Prime Minister and the Chairman of the Bank of New Zealand have both recently dealt, with the finance of the dominion. Mr Massey especially is satisfied that we have turned the corner, and 'that it only requires the exercise of ordinary prudence on the part of the trading and other classes in the community to redeem the promise of bettor times in the near future that has been preached during tho past 12 months. Mr Massey’s optimism was naturally reflected in the Governor-General s speech delivered at the opening of Parliament last week, and we are entitled to share tiie belief therein expressed that the economies effected in the public expenditure, and the gratifying improvement in the revenue, should Ire regarded as extremely satisfactory. It is the more so when it is recognised that these improved conditions have justified the Government m deciding to reduce the burden of taxation which has pressed so heavily on trading firms and companies, and especially the latter. Inis fact alone has been the means of putting heart into the conductors of many of our important company enterprises, and must have an immediate effect in improving trade throughout the dominion. It, is unnecessary that I should do more than refer thus briefly

to the Prime Minister’s view that the outlook is distinctly brighter. With respect to the address delivered oy Sir George Elliot, at the annual meeting ot the Bank of New Zealand, it will have been noted that he dealt at soma leng h with two questions that bear intimately on the welfare of many people in the dominion—the moratorium and 1 the rate ot interest charged by banks to their customers. The latter I will refer to later on. In holding the view that there should be no further extension of the moratorium, tne chairman of the Bank of New Zealand is no doubt right. It will have fully served its purpose at the end of 1924, when it ceases to operate, but that it was a ■ justifiable and a necessary enactment when it was brought into force, and that it. jprob-. ably saved the dominion from heavy financial trouble, I do not think can be doubted If there is still serious embarrassment ahead for some of the larger co-operative concerns which hold huge sums of deposit moneys, it cannot be pleaded that they, did not receive generous treatment while things were at their worst. OUR STAPLE INDUSTRIES.

The expansion of some of our principal primary industries is particularly gratitying after the serious condition in which the traders and producers found themselves a year or more ago. The great expansion of the dairying industry in the dominion is gratifying and, remarkable, and, while there are occasional fluctuations in prices in the overseas markets, it may, I think, be reasonably assumed that this groat industry of the dominion will continue to hold its own and prove a source of increasing wealth. So likewise with our wonderful frozen meat industry. We have obtained a reputation for the quality of ■our mutton that we are not likely to have wrested from us. Certainly the- trade in beef that we were endeavouring to establish bn a sound footing -has sustained a check, nor can it bo expected that in it we shall ever be able to compote wilh the enormous trade between Britain and the Argentine. Then as to wool, the production and prices have been phenomenal, and have added greatly to the return of confidence and prosperity. The remarks made by the Alinister of Agriculture (the Hon. Mr Nosworthy) at the opening of the Winter Show were most--impressive,- particularly his reference to the fact that 95 per cent, of the riches of the dominion came from the soil. It would he interesting to know if it could possibly be ascertained what percentage of this wealth went to the producer. THE FLOODS. The disastrous floods which took place in Dunedin and suburbs towards the clpse of

April, , and vvhich wej;e .. s.upceeded., ’.by. ..a,: second visitation' some three weeks later, 1 Caused great loss to many citizens, -ami will 'involve the City Corporation in, heavy expenditure. The most sern-ns feature of the phenomenal rainfall was, however, in ail probability the disastrous flooding of the Taieri Plain., The waters of the first flood had no time to escape or be absorbejl before this tortile plain was subjected, to La further inundation that caused very great loss to many worthy settlers. The relief measures that were so promptly under-' taken, and generous subscriptions to (he Flood Relief Funds by the community and tiie Government, did much to mitigate, (he position in Dunedin and suburbs, and it is fair to assume that some portion of the money that lias been raised will be apportioned to country losses. These have not seriously affected clients of this company, but. a great calamity such as this must tell more or less on the whole community, and the sufferers have naturally received sincere sympathy in their misfortune. The visit paid to the Taieri Plain by Mr Massey recently cave him an impressive insight into the deplorable state of this fertile district. and his sympathy with the unfortunate settlers whose prospects have been so sadly changed was so genuine and heartfelt that he at once recognised it to be the, duty of the Government, to help them in their efforts to restore the productiveness of their farms.

RATE OF INTEREST. In previous years in addressing you I have more than once made reference to the price of money, which ro s e from 5Jr per cent, and 5| per cent, in 1919 (at which time it was fairly nlentiful) to no less than 7 per cent, in 1951. In the early part of last year money remained dear on account of the offer by a, number of public companies of 7 per cent, and 8 per cent, debentures free of income (ax to investors. A great, deal of money was absorbed by (he debenture issues of fho.se companies, but notwithstanding this the rate of interest fell to per coni, about twelve months ago, and again six months back it fell to 6 per cent., at which rate it remains.

The Moratorium Act fixed the rate of 6.1 per cent.—unwisely I think. T hold the view that the moratorium rate should have been fixed every six months in accordance with any fluctuations in the interest rate that might take place. In connection with interest rates, it is a recognised fact that the lower the price of money the more prosperous a country is. As to the bank rate on advances I do not think Sir George Elliot is on firm ground when ho argues that it should be maintained at the present high figure. There seems to me to be no adequate or sustainable reason why banks should not be amenable to the law that, cheap money tends to a prosperous condition of trade in a community, and I consider that they are not acting in the common interest in maintning such a high minimum rale as 65 per cent. Nor can I agree with Sir George Elliot’s statement when defending the bank’s 6i per cent rate on advances that it is “still difficult to borrow on fixed mortgage, even on a 50 per cent, margin, at less "than hi per cent., and that therefore it must be recognised that their borrowing customers had little to complain of since they had the advantage of paying on their daily balances only.” As a matter of fact, so far from that being the true position in the South Island at any rate, it is the case that large sums are being constantly , lent out on approved securities and with a twofifths margin at 6 per cent., and that may bo considered the normal rate at the present; moment. It is pleasant to read the expressed opinion of the bank’s chairman that “the vast majority of our settlers arc in a thoroughly sound position.” He expresses that belief because the bank authorities “are in a most favourable position to form an accurate estimate of the actual financial condition of the country, for nearly 50 per cent, of the banking business of the dominion is transacted by embank,” and this knowledge leads him “to look forward with confidence fo the future of the dominion and to expect that the years to come will witness steady progress.” THE BALANCE SHEET. Liabilities.—The paid-up capital remains at last year’s figures—namely, £15,000. Your directors, after due consideration, decided the time had arrived to increase the

paid-up value of the shares from 12s to 14s, and for that purpose recently set aside out of the profits a sum of £2500. 11ns action was taken in accordance with the power given to your directors under Clause 120 of the Company’s Articles Association. This is the third step towards restoring some portion of shareholders’ capital which many years ago under stress of circumstances had to be written off. Reserve Fund.—There is no alteration here, the fund still standing at £13,000. It is proposed to increase the reserve by £IOOO out of the past year’s profits, which will then bring the amount up to £14,000. Balance Due by Company.—The figures for the year just ended are almost double those for the preceding year, the totals being for April, 1922, £50.441 16s 3d; and for April, 1923, £99,682 15s 2d. At the balancing period a larger number than usual of estates were under realisation, many of them having considerable credit balances owing to realisations being almost completed. These moneys will be paid out to the beneficiaries or invested, as per wills, immediately. Mortgage moneys repaid, as well as new moneys received from clients for investment, help to swell the total at the balancing period. Suitable investments for most of these moneys have been found, and the mortgages are m course of preparation. The increase is also indicative of the ever-increasing volume of the company’s business. Assets.—Debentures show no change, the figures remaining at £19,550. Deposits.—These amount to £25.000. This sum represents moneys temporarily placed on deposit pending in some instances the final closing of estates and the paying out of the proceeds of realisation, and in other cases the finding of suitable permanent mortgage investments for private clients and for estates where there are continuing trusts.

Mortgages and Accrued Interests and Leasehold and Buildings.—There is very little difference in the figures here. For April 30, 1922, they were £16,279 3s Id, while on Anril 30, 1923, they stood at £16,010 16s 9d. Balances Due to Company.—At April 30, 1922, the figures stood at £47,973 17s 9d. and for the corresponding period in 1923 at £62.103 ' 15s sd, an increase of £14,131 17s 8d in favour of 1923. Owing to 1 the exceptionally large number of estates under administration considerable sums have had to be paid out for death duties on deceased estates and for debts, etc., while in many instances advances on account, have been made to beneficiaries. Profit and Loss Account.—Balance brought forward from previous year was £6.665 10s 3d. which was reduced by payment of dividend and other appropriations shown in the balance sheet. The balance left at profit and loss account and brought to account this year amounts to £4,510 4s 9d. Add to this tho net profit for the year just closed, £4.683 12s sd, and the balance is £9,193 17s 2d. Tho dividend paid in November last absorbed £1125. leaving £8,068 17s 2d now available for appropriation, subject to payment of income tax for the year.

Gross Income.—This amounts to £14,666 9s 7dj which is £B6l 19s 8d in excess of the previous year.

/ Expenses.,—Expenses for previous year, £9114 Os 9d, and for this year £9,982 17s 2d, an .increase of £BOB 16s sd. This increase has been more than covered by the increase in income in spite of the extra outlay for Southland and South Canterbury branches. The past year’s expenditure -includes £42 8s 2d written, off office furniture- to cover depreciation. I now move the adoption of the report and balance sheet. . , THE REPORT ADOPTED,

The motion was seconded by Captain Sundstmm, who referred to the address by the chairman as interesting and educative. Ho was sure that there wore many others who, like himself, looked forward to the ■feature of The chairman’s remarks at the .annual meeting with keen' anticipation.From it they got such information, as they often desired in a condensed and practical form. It touched on many matters of importance to them and the commercial life of the community and its financial position in a very illuminating way. They were very glad to have those reports, and, in the present case, he could assure the chairman that he agreed with all he said, especially in regard-to the moratoriiini..; Jr .w as patent to the speaker that (he company .was> on the right lines, and the financial siatement spoke eloquently for the way the business had been carried on, not only on the part of the directors, but by the general manager and his staff. —(Applause.) Mr R. J. Gilmour (Southland director) said that some references had been made to his district. It was largely due to Messrs Rout, ami Stewart, who had had a ■ long connection"with the company, that so well established in Southland. Messrs Rout and Stewart had done very good work for the company, and the business, as a result of (heir assistance, had assumed very substantial dimensions. But, after all, (he business of the company was only part of the business of Messrs Rout and Stewart, and it was now the whole business of Mr ..Leslie; Ho had. nothing to detract-his-attem., ; tion from the business of the company, and. from the short experience of Mr Leslie they had had in Invercargill, he (Mir Gilmour) thought the general manager had made a very good choice when he selected Air Leslie for (he position. The number of wills and the value ot the estates handled represented a very large increase in the com- , pany’s business, and a much bigger sum was ; represented than the company had ever "obtained in the. same time before.. From ■what bad been done so far,..he felt that (ho company could look forward with confidence to a very rapid and satisfactoryexpansion in Southland. The most cordial and harmonious relations still existed between the company and Messrs Rout anti Stewart, anr( ( their assistance and advice .were still of very great value. The company, he proceeded, mush have a very largo • sum invested in Southland, and it, continued to make very substantial advances from time to time. As mast people knew, land values in the southern part of the dominioii were as sound to-day as in past years, and there was no Southland security occasioning any anxiety to the manager and his staff or to the directors. He thought, (bat. having taken h move forward, they should now aim at a branch of their own in Invercargill,' Thev had been doing business there that was very satisfactory from the shareholders’ point of view, and he hoped that, as in Otago, they would continue to do it in a way that would be ns satisfactory to their clients as to the company.—(Applause.) Mr E. G. Kerr (South Canterbury director), supporting the motion, said that it wag two years and three months since the company had commenced business in South Canterbury, and in that time it had done splendidly! They had had two most efficient officers in Messrs Ibhotscn and Foote. The former had had no easy task opening up branches", htlt he had been very successful. and much of the company’s success in that part was due to him. Mr Foote, who had followed, was doing famousjy, and he (Mr Kerr) could see nothing But a, great future for the company in South Canterbury.-(Applause.) The motion was then put and carried unanimously. DIRECTORS RE-ELECTED.

Mr It. Miligan (Oamaru) moved the reelection of Messrs James Begg and R. ,1. Gilmour. the' retiring directors. He said that, he thought the company had done very wisely in extending its business to South, Canterbury and Southland. A progressive poliev would bo of very considerable benefit to the company as time went on. It would take lime to get companies such as theirs widely known and to impress a people who had been in the past in tile habit of looking on the appointment of private trustees as the correct thing that the day of the private trustee should be over. There could be no question that a company such as theirs, composed largely of men who understood business and who knew how to administer estates, was very much preferable to n private trustee. So far as North Otago was concerned, he wn s very pleased to he able to say that a fair amount, of business w»s going the wav of the company, but the district was a rich one. and there were very substantial enatcs that, one could only hope, would he put in the hands of the company for administration. It would be for tbe directors to consider how to advance the interests of the company there, and. if the opportunity offered, he would be prepared to make seme suggestions to the directors. In conclusion, he said that the work of the directors had been so successful in the past, that he had much pleasure in moving the motion. On being seconded by Mr W. Forrester the motion was carried. The directors re-elected briefly returned thanks. AUDITORS. M essrs Brown and Co. and Messrs George Blyth and Co. were re-appointed auditors at the same salary as last year. APPRECIATION. A motion of tiianks to the directors and staff was proposed by Mr R, Gilkison, who said that, the directors had shown a great, amount of foresight and bad given a lot of earnest attention to the affairs of the company.' This had resulted in remarkable. progress. A remarkable feature, that had especially impressed the speaker was that the capital, should have been paid: up as it had been! In 1916 his shares, had been paid up to 7s 6d. from that they had been paid up to 10s, then to 12s, arid now to

14s. So. in the space of seven years the capital of shareholders had been, almost doublet:). The Chairman reminded Mr Gilkison that 15s had been written off the shares in the early stages of the company. Mr Gilkison said that that was so, but the achievement ho mentioned was a remarkable one He went on to remark that, if the directors had done so well in the last few years, what would they do in the next 10 years? Tire next problem would be what to do with the surplus money.— (Laughter.) Mr N. Paterson seconded the motion, and referred particularly to the courteous and tactful manner in which clients were treated by the company’s officers. This, ho said, must be of great value to the company.— (Applause.) . The motion having been carired. Sir George Fenwick briefly returned thanks on behalf of the directors. They had lad some anxious times during the past three or four years, but it was always a very great pleasure to serve a company like the Perpetual Trustees. It was a company that deserved well of the community, as it wtts an undoubted beneficial element in the community life. That was one reason why the directors took special pleasure in

the work. , Mr J, A. Park (general manager) thanked the meeting for the motion. He added that, if the company was going to extend its operations, he did not know where it was going to get the men because he was determined that a man who was sent to open a branch should be possessed of gloat experience, wide knowledge, tact, and patience. The idea of extending was in the right direction, but tho difficulty was certainly in getting the men. On a flying visit to the North Island he had been asked repeatedly why the company did not open there, and in Wellington ho had gathered a largo amount of business in a short time. A trust company should have men at its disposal who had a proper realisation of estates and possessed education and experience. Fortunately, the company possessed several men with that capacity, but to train the young on the same lines was a difficult problem. He noticed that the manager of tho Trustees Executors had raised the same point. “I

should like to point out.” said Mr Park, “that the question of obtaining and training a staff consisting of men of high mental and moral standing is one that gives the management of a company of this nature a great deal of serious attention. The scope of the work dealt with by trustee companies is becoming more and more enlarged, and, while specialisation is to some extent necessary, a sound, all-round training is becoming increasingly necessary. The difficulty with the younger men seems to be that the training they are receiving in their classes or at the University is either defective or extremely limited, and no desire seems to be created by some of them for ail acquaintanceship with subjects that would increase their general culture and make them more useful citizens. It may be that a chair of commerce with a wider curriculum might be established at our University, but whatever is (he cause the young men one is coming in touch with do not seem to. have the high ideals that ought to possess them.” It was the man he had described who was wanted by a trust company. There was not any difficulty in getting suitable men for the ordinary course of business or even’for the professions, but the trust company needed one of greater and wider attainments. The Rhodes Scholar was the class of man wanted, and they could not get him.— (Laughter and applause). The meeting then terminated.