TRUSTEES EXECUTORS & AGENCY COMPANY, LTD.

Otago Daily Times, Issue 22903, 10 June 1936, Page 6

TRUSTEES EXECUTORS & AGENCY COMPANY, LTD.

SUCCESSFUL YEAR EXPERIENCED CONTINUED EXPANSION OF BUSINESS

A large increase in the volume of business conducted during the past year was revealed at the annual meeting of shareholders of the Trustees Executors and Agency Company of New Zealand, Ltd., held at the company’s office yesterday. This expansion of the company’s activities was regarded as an indication of public confidence in the institution and in the faithfulness with which it carried out the responsibilities 'entrusted to it. The chairman of directors (Mr G. R. Ritchie) presided.

CHAIRMAN’S ADDRESS

Moving the adoption of the annual report and balance sheet, the chairman said:

Before proceeding to the annual report I have to apologise for the absence of Mr S. C. Sutherland Mr W. E. C. Reid, who are both abroad at the present time, and also for the absence of Sir James Allen, who is detained in Wellington by his parliamentary duties. In moving the adoption of the report and balance sheet, I would make some observations which will doubtless be of interest to shareholders and incidentally to our large clientele in connection with the numerous estates administered by the company.

VALEDICTORY First of all, I am sure you will all sympathise with me in the loss the community has suffered by the death of Mr P. C. Neill, one of the founders of this company and a director for more than 60 years. I have referred on more than one occasion during the past few years to the late Mr Neill’s connection with this company, and I would only say on this occasion that Mr Neill took the greatest interest in the affairs of this company during the long period of his directorate. We could always rely upon his sound judgment and advice, and from my own experience I know that ho was always ready to listen to suggestions and proposals from the younger members of the board were they to the advantage of the company. He lived a long and useful life, and not only will he be missed by the members of this company, but by the whole community. He had high ideals of citizenship and watched the growth of this Dominion, and incidentally this city, with pride and pleasure. I have also to refer to the loss sustained by the death of Sir James Mills. Sir James was one of the original directors and for 40 years the company bad the benefit of his time and undoubted business ability in the administration of the affairs of its clients. After taking up his residence in England Sir James retired from the board, but maintained a very close interest in the company right up to the time of his death. With the passing of Mr Neill, Sir James Mills and. Sir John Roberts, whose death I referred to last year, the last links with the company’s inauguration and its foundation so many years ago have been severed, and the thought occurs to me that they represented an age and a spirit in the history of New Zealand that we may all look back on with pride and gratitude. They were pioneers in the truest sense of the word, and their names will for ever be associated with great enterprises that had their origins in the vision and driving power of men such as these, who were prepared to throw all their resources into the building of a young country. These lines might well have been written for them:—

We men, who in our morn of youth defied The elements, must vanish—be it so! Enough, if something from our hands have power To live, and act, and serve the future hour Aud if as towards the silent tomb we go Through love, through hope, and faith’s transcendent dower We feel that we are greater than we know. PROFIT AND LOSS ACCOUNT You will notice from the profit and loss account that the results for the year are very satisfactory. Net profit at £3632 5s 4d is an improvement of £1241 4s 4d compared with 1935, and this is entirely due to an increased volume of business. ■ The gross receipts for the year from commissions and other sources were actually £2399 9s greater, but part of this was absorbed in increased expenses. We have made liberal provision for depreciation —office furniture and freehold premises—both of which items are worth considerably more than .the figures at which they stand in the balance sheet. We also recommend that the item Timaru Branch Establishment Account, which makes its appearance in the balance sheet this year, should be entirely written off out of the year’s profits. After providing for these items the balance remaining is £2900 9s 2d out of which an interim dividend of 3 per cent, absorbing £6OO was paid to shareholders in November, and the directors have pleasure in recommending a further dividend of 5 per cent., making a return to shareholders of 8 per cent, for the year, which is 2 per cent, greater than last year’s distribution. This requires £IOOO and leaves a balance to be added to the carry forward (subject, of course, to the income tax liability) of £I3OO 9s 2d. The carry forward in profit and loss account (subject to tax) will then stand at £10,045 lls lid. BALANCE SHEET The composition of our assets is very much the same as a year ago, but there has been some variation in the individual items and you will note that whereas funds invested in debentures have fallen by some £I7OO our mortgage investments have on the other hand increased by over £SOOO. I may say that all our investments are first-class trustee risks and give the board no concern whatever. The funds with our bankers stand nt the unusually large figure of £16,730, which is £IO,OOO greater than a year ago, but this is due to the fact that realisation for duty payments and estate distributions were in progress at the balancing date. TRUST AND AGENCY FIGURES These continue to show improvement and the prospects for the future are brighter than they have been for some years past. The total assets under the company's charge at March 31 amounted to £4306 10s, which is the highest figure yet reached in the company’s history. ADVANTAGES OF TRUSTEE COMPANY I have referred on previous occasions to the great benefits companies such as ours confer upon the community and perhaps it would not be out of place on the present occasion to refer to some of these advantages. The administration of estates and the carrying out of the attendant duties of

executor and trustee impose no light burden on the officers of the company. The advantage of the continuity in a company as trustee in place of a private individual has been more and more recognised in later years. It was recognised in 1881, when the company was formed, but it has taken time for the vision of those who foresaw the possibilities of a company such ns ours to prove itself in actual fact. The operations of the company _ are based on service to its clients, and it is the constant aim of the directors and staff to deal with problems effecting beneficiaries in a sympathetic and helpful manner. It is a source of gratification to the company to receive as it does from time, to time spontaneous expressions of appreciation from clients who in some cases have frankly admitted that they were at first inclined to resent the intrusion of the company into their affairs. The company has been through difficult times in more ways than one dffring the past few years, but, notwithstanding, we have emerged, I consider, in a stronger position than we have ever been in and with brighter prospects than has been the case for very many years. PURCHASE OF SHARES Tt may be fitting here that I should refer to the purchase from the Public Trustee of the parcel of shares which had been acquired by agents of the Executive Investment Trust. Your hoard considered that it was imperative that we should acquire these shares, for while companies such as ours are now protected by Act of Parliament against any similar attempt in the future, nevertheless the board felt it was undesirable that the block of shares in question should fall into the hands of an outside concern. The individual members of the board pledged themselves to the purchase of the shares at a price which was in excess of what the open market then valued them at, and it was, they felt, the proper thing to give shareholders the first opportunity of taking the shares up in proportion to their 'Existing holdings at the cost price, and a circular was sent to all shareholders along these lines. The bulk of the shares have now been disposed of, but there is still a balance remaining, and any shareholder who would like a further opportunity of acquiring his quota at the game price is invited to get in touch with Mr Smellio. I feel certain that you will agree with mo that the directors completed this purchase at some inconvenience to themselves solely in the interests of the shareholders and indeed more particularly in the interests of the large clientele of the company. lam sure I need not enlarge on this except to remind you that it was stated that this company was capable of great expansion, as it had some four millions and a-hnlf of assets. Whether trust assets to bo carefully administered in terms of various wills can be considered assets of the company is open to question. We prefer to regard such so-called assets as sacred trusts which require to be administered With the greatest care in terms of the different wills. This transaction finally rings down the curtain on this episode, and with the legislative protection now afforded I say without hesitation the standing of the company is better to-day than ever it has been in the past.

ECONOMIC CONDITIONS

I want to touch briefly on one or two aspects of the country’s trade, during the past year. It has been stated from this chair on many occasions that our prosperity depends on our overseas trade, and if prices for our primary products rise or fall, then our standard of living must fluctuate similarly. It is pleasing to note, therefore, that for the year ended March 31, 1936, the national trading account is a satisfactory one. The excess of exports over imports was £12,236,000 New Zealand currency as compared with £12,350,000 for 1935, a surplus sufficient to provide for our annual interest and other commitments in London and leave a balance to be added to the already large reserve of sterling funds. Although the surplus for the year is slightly less than tho previous year the figures for 1936 actually represent a much larger volume of trade per head of population inasmuch as the exports are £3,915,000 greater in value, but the greater realisation was used in the purchase of more overseas goods, which showed an increase for the year of £4,872,000. These figures represent an increase of approximately £6 per head of the population in external trade during the year, but in addition to this factory production for local consumption has increased step by step with the improvement in overseas trading, the last figures available being for the year ended 30/6/1935, which stood at £57,000,000, as compared with £49,700,000 in the previous year. These figures indicate in a striking way the benefit which the whole community derives from an improvement in our export trade, and gives point to what I have already said regarding our dependence on world markets. The primary producer has more income, which goes into circulation immediately, and is followed by a rise in purchasing power throughout the economic structure. This in turn is followed by increased taxation returns and an casing of the Government’s budgetary problems, by greater railway revenue, increased building activity, rising deposits in the Tost Office and private savings banks, a reduction in tho ratio of advances to deposits in the trading banks and a reduction in unem ploymcnt. I do not propose to weary you with the figures in detail, but a comparison of the figures under each of these heads at March 31, 1936, with those of a year ago discloses a faithful and invariable trend right through the available statistics towards a more prosperous state of affairs. I would mention only one reliable indicator as evidence of that trend —viz., the returns from sales tax. For the year 1935-36 this yielded £2,467,060, ns compared with £2,171,235 in 1934-35 and £1,847,273 in 1933-34, and it should be noted that the increased yield has been accomplished despite a widening of the list of exempted commodities. These figures bear witness to the steady advance towards economic prosperity. If any further proof is needed of the sound position the country is in it is amply provided by, first, the low ratio of bank

advances to deposits—.viz., 05 per cent, at March 30, 1930; and, secondly, the very large holdings of sterling funds, which stood at £14,000,000 sterling at that date.

The national Budget for the year has again been balanced with a small surplus. Money for capital development is plentiful and cheap and, provided prices hold externally and nothing occurs internally to destroy the equilibrium so far attained, wo should make further steady progress along the road to prosperity on sound lines. When one goes back to the state of affairs existing in the years following 1930, when our export trade dropped in the short space of two years from 49.2 millions to 24.0 millions, it is a remarkable tribute to the recuperative powers of the country that we have been able in a few years to get the economic machine back into balance again. It has not, of course, been achieved without a great deal of disturbance and readjustment, and all classes of the community have suffered in the process, not the least being the large numbers of widows and elderly people dependent entirely on income from investments who bad to face not only the compulsory reductions in interest rates, but also increased tax demands. This class of people is unfortunately not able to make its hardships heard and suffers in silence, but they represent a not inconsiderable section of the community. TIMARU BRANCH OPENED On October 1 last year, the company opened its first branch at Timaru. The agents there, Mr Innes Jones in earlier years and latterly Mr J. M. Jenkins, gave us good service, but our business in South Canterbury had grown to such an extent that the board decided the time was opportune to maiie a step forward. We were fortunate in securing the services of Mr Jenkins as local manager. He is well known in Timaru and South Canterbury, and we confidently look to further development .of our business there as an outcome of the better service which a branch can offer. We are also fortunate in having as advisory directors in South Canterbury Mr Norman Orbell and Mr Herbert Elworthy, and I take this opportunity of expressing the board’s appreciation for their assistance and support in the formation of the branch and their good work in fostering the company’s business and assisting in an advisory capacity in the administration of estates. AGENTS Our agents in Invercargill, Messrs Reid and Jones, and Mr D. V. G. Smith, of Oamaru, have also served us well during the year, and we have had encouraging indications of the steady development of our business in these territories. During the past year a number of estates have fallen in in the Oamaru district, and 'we have had to call on Mr Smith’s services to a greater extent than ever before to attend to matters arising there. In the Otago Central Mr A. C. Scoular as our advisory director has helped in many ways to further our business in that territory. I have also to express our appreciation to Mr Sheppard as our farm valuer. We have not had the occasion to use his services as often as we would have liked during the past year, as mortgage applications have fallen away considerably, but it is a great advantage to the board to have a reliable and practical valuer to turn to when investing clients’ moneys on broad acres. STAFF I think the year’s accounts give ample testimony to the work and efficiency of our staff without any further comment from me. A greater volume of work has been' handled and the board knows that it can rely on the staff from the manager down to give of its best in carrying out the ideals of service in an efficient, courteous and tactful manner. Your board during the past year has given careful thought to the question of a staff superannuation scheme, and I am able to advise shareholders that a scheme has been drafted and approved of by all parties and will shortly be put into operation. It will mean* an increase in our expenses by some £4OO a year, but I am sure that shareholders will approve of the initiative taken by the board in this direction. CONCLUSION We are not a political body, and at all times our desire is to keep clear of politics. Some years ago I made this criticism that I thought the less the Government interfered with private enterprise the better, and I quoted words written by Lord Macaulay over 100 years ago, which I think will bear repetition. Lord Macaulay said: — Our rulers will best promote the improvement of the people by strictly confining themselves to their own legitimate duties, by leaving capital to find its more lucrative course, commodities their fair price, industry and intelligence their natural reward, idle ness and folly their natural punish*, ment, by maintaining peace, by defending property', by diminishing the price of law and by observing strict economy in every department of the State. Let the Government do this, the people will assuredly do the rest. Four years ago, when we were in the throes of the slump, I said that he would indeed be a rash man who could prophesy the future, and that I did not intend to attempt to do so. I pointed out, however, that there was a silver lining to all clouds even if we could see it only dimly and that we intended to go forward with courage and confidence, seared a little, perhaps, by the ordeal of tlie first year of the slump, but richer by the experience. Those remarks hold equally to-day, and while we have had one or two considerably improved years during the past four, it is still difficult to say what the future is going to bring forth, but we certainly are richer in the experience we have had during that period and we are in a position to face the future with even more confidence.

SHAREHOLDERS’ SATISFACTION

Mr J. G. Patterson said that he had pleasure in seconding the motion which had been so ably moved by the chairman both in regard to the affairs of the company and the larger matters appertaining to the national welfare. He would like also, on behalf of the shareholders, to join with the chairman in the tributes which he had paid to Sir James Mills and Mr P. C. Neill, who had been true pioneers in respect of the Dominion as a whole i\nd the company in particular. There were two reasons why the shareholders should have more satisfaction than usual in receiving the annual report. The first was in regard to the year’s operations. The profit was particularly satisfactory and was the highest for a number of years, but perhaps the most satisfactory feature was the increase in , the business entrusted to the company. This showed that the company possessed the full confidence of the people. Another special reason why the shareholders should be grateful to the directors was because of the manner in which an extraordinary occurrence which could be described as an underground attack had been overcome. This had involved a tremendous amount of work by the directors and the staff, and the shareholders had every reason to be grateful to those concerned for the manner in which the company had won through. The fine action which they had taken in regard to the position had shown the strength of the company, and the fact that the outcome had been of great benefit to the company was shown by the increased business. Out of misfortune success would ensue, and the company was stronger than ever. As the chairman had said, the assets of the company were a sacred trust, and this placed a big responsibility upon all concerned. In regard to the position of the country as a whole, the chairman spoke with special authority. The posi-

tion as he had it showed that belief in the great recuperative powers of the country was justified. Legislation of a special kind had been passed, and more would bo passed. They hoped that this would stimulate recovery and not stille it. In conclusion, Mr Patterson expressed appreciation of the work of the manager (Mr P. O. Smellie) and the staff during the year. The motion was carried. DIRECTORS RE-ELECTED

Moving the re-election of the retiring directors—-Sir James Allen and Sir John Sinclair—Mr C. W. Rattray said that he need say no more than that he was sure shareholders would agree in expressing deep appreciation to these gentlemen for the services they had rendered the company over a great many years. — (Applause.) The motion was seconded by Mr Alexander Sinclair, and was carried. Sir John Sinclair, returning thanks on behalf of Sir James Allen and himself, assured shareholders that the position of a director was no sinecure. The chairman had put fully before the shareholders the operations of the past year, and it must bo satisfactory to all to know that the position of the company had never been stronger than it was today. Messrs Willigm Brown and Co. and Messrs Barr, Burgess and Stewart were nominated as auditors and were declared elected. DIRECTORS’ REMUNERATION Mr L. Deans Ritchie stated that he had noticed from the published accounts that the directors’ fees for the past year had been £322 17s lOd. He desired to know how this amount had been fixed. The chairman explained that the last resolution passed with respect to directors’ fees was in 1923, when the amount had been fixed at £360. A few years ago the directors had taken a 10 per cent, cut on that amount. Mr L. Deans Ritchie said that shareholders might remember that on two previous occasions he had referred to the directors’ fees, which he regarded as entirely inadequate. Ho had said this quite voluntarily, and he still thought that the amount was ridiculously small. One had to remember that the duties of directors of trust companies were more onerous than those of other companies, the business of which ran on more or less easily while the directors acted as watchdogs. He understood that the directors of their comnanv had weekly meetings. Not only was a great deal of time occupied in the signing of cheques, but the directors had to have knowledge of what they were signing. Every loan that the company made came under the scrutiny of the directors, the realisation of assets and distributions to beneficiaries was also part of their duty and responsibility. It had been pointed out that, the assets of the company were over £4,000.000, and there again one saw that the task of the directors was a heavy and difficult one. If any further proof of the loyalty of the directors was required it was to be found in the fact that they had voluntary imposed upon themselves a cut of 10 per cent. That, he thought, was quite unnecessary in these times. If the company was to have the services of directors they should bo properly paid. They had made themselves responsible for a larsre sum of money (a circular to shareholders had said £14.000) to prevent a block of shares falling into outside hands. In view of the immense amount of work done, the special responsibilities of the directors, and the fees paid by oilier companies in the city and throughout Now Zealand, he. thought an increase of 50 per cent, quite reasonable. Ho moved; “ That unless otherwise determined by a general meeting of shareholders, the directors’ fees be £550 per annum, plus travelling expenses, to be divided as the directors think fit.” The motion was seconded by Mr Rattray, who said that the reasons for an increase were so obvious ns to require no further argument. When one saw how small the return to the directors had been in late years and the amount of work they had done, it was clear that they had been controlling the company practically without reward. Surely it was time that they received reasonable remuneration for their services. Even on the figure suggested the amount would still be moderate, and from what he knew of companies not a bit more important than this the fees would be laughed at by other directors. While the directors might be satisfied with what was suggested, he hoped that it would not be long before their services were more highly rewarded. The motion was put to the meeting by Mr Ritchie, and was declared to have been carried unanimously. The chairman thanked the speakers for the kind manner in which they had referred to the work of the directors, and the shareholders for the practical interest shown in the resolution. Perhaps he should make it clear that 1m and Mr L. D. Ritchie were not related. Personally one would like to see notice of such a change sent out to shareholders, but, as the amount was to be divided among seven directors, he did not think that absent shareholders would criticise unduly the proposal that had been carried. The work of the directors required one hour and a-half of their time each week, and sometimes more was demanded of them. The directors, however, were very interested in the work of the company.

VOTE OF THANKS

A vote of thanks to the directors, manager, and staff was moved by Mr 15. J. Calder, who said that all must realise how difficult had been the times thron'd) which they had come. The work of the company was different from that of an industrial concern. Each ease must be considered on its merits, and the intricacy of the work which the staff carried out was generally realised. He trusted that the directors and staff would be able to continue to carry on in such a satisfactory manner. The chairman returned thanks on behalf of the directors and Mr Smellic replied on behalf of the staff. Mr Sinellie said that shareholders would see from the report that the company had had a very full year. The last two or three years had each had their special difficulties, but they seemed now to be in calm water again, and the course was now set for further progress in widening the company’s business. Mr Smellie expressed his appreciation of the support which he had received from every member of the staff, and added that the members of the staff were all imbued with faith in the future of the company. They felt that they were doing a service that was worth while and that the future of the company was assured, and should be bright and prosperous. He would like to express gratitude to the board for the step that it had taken in inaugurating a superannuation scheme. The matter had been placed before the staff, and all were grateful for an action which would improve the good feeling already existing among the employees. lie felt that the directors were also members of the staff. The work of tho hoard was different from that of other directors. The staff saw them once a week, and they kept closely in contact with what went on.

PROGRESS OF BUSINESS

Mr Norman Orbell (advisory director for South Canterbury) congratulated the directors and the slaff on the successful year that the company had experienced. He had been very pleased, he added, when the directors had decided to open a branch in Timaru. He thought that this was a good move, for there was room for an extension of the company’s business in the district. He would like also to congratulate the company on having such a good staff in Timaru. The local manager (Mr Jenkins) had his heart and soul in the

work, as did the other members of the staff. The movement to obtain new offices in the building now being erected by the Bank of Australasia in Timaru was wise. The company would be brought more prominently before_ the public, and he was sure that business would increase. The Oamaru agent (Mr D. V. G. Smith) also congratulated the company on emerging from a most successful year. The trials through which the company had come had in no way impaired its standing in the North Otago district, and he knew of no instance iil which the action taken had been to the company’s detriment. Business in North Otago had increased, and at present the company had more estates under administration there than ever before in his 10 years in Oamaru. That was surely an indication of what the future would be. Mr Smith expressed appreciation of the encouragement and assistance that he had received from Mr Smellie and the staff in Dunedin. The company was being kept prominently before the people of North Otago, and he had every faith in its future. Mr S. W. Jones, on behalf of the Invercargill agency, said he would like to congratulate the company on the fine showing that it had made. He also stressed the fact that developments during the year had not affected the goodwill of the public towards the company. Ho was pleased to be able to say again that the agency was in a strong position in Invercargill. Last year was the best that it had experienced. The estates which came into the agency were large, and, while they had not been so great this year, the company was progressing, and he was sure that Invercargill would be one of the best agencies of the company in the future. With the assistance of Mr Smellie and the staff, the work of the Invercargill agency had been faithfully done.