PERPETUAL TRUSTEES COMPANY, LTD.

Otago Daily Times, Issue 26479, 5 June 1947, Page 4

PERPETUAL TRUSTEES COMPANY, LTD.

SIXTY-THIRD ANNUAL MEETING

The sixty-third annual meeting of The Perpetual Trustees Estate and Agency Company of New Zealand. Limited, was held in the board room of the company on Tuesday. Mr Edgar Hazlett, chairman of directors, presided. and he was supported by Messrs James Begg, W. Downie Stewart, C. R. Nicolson (Dunedin), R. J. Gilmour (Invercargill), J. J. Heasley (Timaru). A. R. Turnbull (North Canterbury) H. S. Lawrence (Christchurch), R. K. Ireland (Oamaru), and the general manager (Mr A. Ibbotson). Several apologies were received and the meeting was well attended. Chairman’s Address The chairman, in moving the adoption of the report and balance sheet, said: — “ Since our last annual meeting, Mr William R. Brown has passed away. # He had been a director of this com'pany for a period of six years, and his loss is a very heavy one to his fellow directors. During the period in which he was a member of our board, we received from him valued advice and counsel due to his long experience in the business world. Not- only is his passing a loss to the directors, but also to this company and to, its staff. Legislation “ During the year there has been some important legislation -'affecting our work, and of particular interest to us is ‘ The Trustee Amendment Act, 1946,’ which provides a very useful and much-needed increase in the powers of a trustee to resort to-in-come and, with certain limitations, the capital of trust funds for the maintenance, education, advancement, arid benefit of infant beneficiaries whether their interests in the trust funds are vested or contingent. “Another enactment directly bearing upon our work is ‘The Finance Act (No. 2), 1946,’ which contains a provision that the Minister of Stamp Duties may reduce or remit interest payable on any unpaid death duties where he is satisfied the failure to pay duties was not due to default of the administrator and that because of the nature of the assets, payment of interest would be a cause of hardship. This is amplified by The Death Duties Interest Order, 1946,’ which provides for the rate of interest on unpaid death duties to be 5 per cent, as formerly, but the rate is reduced to 4 per cent, in the case of persons dying after December 11, 1946, if the duty is paid within 15 months of the date of death. Otherwise the rate would be 5 per cent, on duty unpaid after 15 months from the date of death, but this rate may be. reduced to 4 per cent, in exercise of the discretion given to the commissioner by the statute just mentioned.

“ Under * The Land Subdivision in Counties Act, 1946,’ the subdivision of land of less than 10 acres outside a borough or town district is made subject to the control of the Minister of Lands. Building .permits may be refused if the proposed building is prejudicial to a possible future subdivisional 'scheme.

• “‘The Statutes Amendment Act, 1946, contains alterations to the statutory trusts provided in ‘The Administration Amendment Act, 1944,’ for infant beneficiaries in an intestate estate. The former Act also extends the operations* of the Fair Rents Act to premises occupied by several persons for residential purposes and to tenancies where meals or food is provided by the landlord unless the value of such meals and food is a substantial proportion of the rent. “Under ‘The Servicemen’s Settlement and Land Sales Emergency Regulations, 1946,’ consideration paid in contravention of the Land Sales Act may be recovered as a debt. By a further regulation, the date to be treated as the end of the war for purposes of any tenancy agreement has been fixed as at May 1, 1947. “Although, as mentioned in last year’s report, trustee’s income up to £SO has been exempted for income tax purposes, this has not resulted in any decrease in our taxation work, as !The Land and Income Tax Regulations, 1946,’ require trustees to furnish a return setting forth a full statement of income derived by every trust irrespective of whether a profit has been made or a loss incurred. “ Some slight concessions to the taxpayer were made during the year. Income tax on earned income was reduced to the basic rates plus 15 per cent, by ‘The Land and Income Tax (Annual) Act, 1946.’ “ Excess profits tax was abolished by ‘The Land and Income Tax Amendment Act, 1946.’ “The National Security tax was abolished by regulation of February, 1947, and the Social Security charge fixed at Is 6d in the £l. Land Sales Act “ This legislation, which was enacted to stabilise values, has definitely been a factor in doing so, yet it has not by any means brought about consistency or uniformity. “ Houses erected during the year 1947 still sell at their construction cost, while houses of a similar design and construction erected in 1942 or prior thereto, must be sold at their value as “ There is a feeling amongst property owners that the Act should be amended to permit of improvements being valued at a figure that will compare more favourably with current building costs or based on replacement cost at the date of sale less allowance for depreciation .. Investments “ For a variety of reasons, dealings in real estate, consisting of residential, commercial, and farming properties, are under control and subject to some measure of restriction. In such circumstance:., the natural flow of funds required in the financing of such dealings is impeded or slowed down. Much money belonging to both small and large investors is either temporarily idle or marking time at very low rates of interest in trading banks and savings banks. The position is difficult for those who, by reason of their independent spirit, have preferred, through the practice of thrift throughout the years, to accumulate savings for use in their declining years. We look for a greater demand for loan moneys when in due course conditions become more stable and many, if not all, of the present restrictions are eased or lifted as being no longer necessary or advisable. Meanwhile we do the best we can with the investment of trust moneys, remembering that we are limited in our choice of investments by the provisions of the Trustee Act. I am informed there is a feeling that the restrictive conditions of the Act could with advantage be eased somewhat to accord with prevailing conditions and to meet the changing times. Rates of Interest “ Not only in New Zealand, but elsewhere, there seems to be a tendency to indulge in a cheap money policy. The opinion is becoming more widely held that governments and local bodies may perhaps be going a little too far with this policy. Although there will be some saving therefrom in the national interest bill, the benefits thus accruing to the public purse may in the long run be outweighed by the adverse economic effects which unduly low interest rates are likely to have. It is possible to so reduce interest rates as to make the practice of thrift not worth while, and thus to dry up the sources which in the past have contributed much for investment in local body and Government loans. The small saver should be regarded in the main as the backbone of any country’s financial structure, and when his interest return is so low, he may be tempted to spend his surplus earnings and to rely solely upon Social Security benefits when he is no longer able to work. Any large-scale movement toward spending instead of saving must tend to have inflationary effects and especially so when the supply of consumable goods is deficient. We may then find that price controls may have to continue to prevent further depreciation of the currency. Unduly low interest rates penalise those elderly people, many in number, who depend for their livelihood upon returns from savings invested in fixedincome securities, and rising living costs further penalise them. Life assurance companies and superannua-

tion funds are also likely to be adversely affected' by unduly low interest rates, and the result may very well be a reduction in benefits to those relying upon such benefits for use in their declining years. The incomes of church, charitablfe; and educational institutions may. also be reduced. Nevertheless, I am not an advocate of high interest rates, but I think reasonable rates should obtain sp as to encourage the saving habit., .Taxation “Despite the recent .comparatively small easement, .taxation still remains a very serious question for all taxpayers, and more especially for business and trading concern! Increased production is still the vital need, and the incentive to produce is seriously affected by high taxation. Profits as well as wages and salaries, and other persohal' ’ income continue to bear heavy taxation which should be reduced to reasonablevdimensions at the earliest possible date. I feel sure that a substantial reduction in. taxation is the incentive needed to speed up the volume of production. Our primary task is therefore increased production. Its ehemy is high taxation, which reduces the incentive to produce and in many instances makes increased production hardly worth while. I feel we cannot stress this aspect too often. Branches . “Steady progress continues to be made by our branches. We have had our share of staffing and other difficulties and, in common with other businesses, we have had to meet them as best we could. We are still able to say definitely that we have competent and . experienced district managers and staffs at each of our branch establishments. Our thanks are due to them for their work during the year, accomplished under somewhat trying conditions. We also place on record our appreciation of the efforts of those of the members of our board of directors who reside in. our branch districts.” . ■, 1 The chairman • commented upon various aspects of the annual accounts and the increase in the volume of the company’s business, and then moved, the adoption of the report and balance sheet. / t Motion'Seconded 1 \ In 'seconding the motion, Mr W. Downie Stewart said: ,“ Mr Hazlett has covered so clearly the various factors affecting the welfare of the company during the last 12 months that my remarks will be brief. In reference to the legislation he has outlined as having been passed last year, some _ol it relates directly to trust companies and the administration of estates, and I would like to say that the present Attorney-general, Mr Mason, is entitled to credit for the fact that he has • made , beneficial and, 'useful amend-, ments to the law. I have noticed from time to time that he has copied from English law beneficial amendments made in England by reason of their experience there and welded them, into our legislation. Unlike some Ministers who pigeon-hole representations made to them, he does give consideration to them, and if he considers them wise, he gives effect to them, so that in such instances we are indebted to him. “The second point I would like to mention is that I do not think it can, be too often reiterated to clients an assurance that their business or private affairs are entirely confidential in the hands of the staff of this company. I make this remark because I think many clients may strongly resent the idea that the directors are familiar with details of their personal affairs. We directors know nothing of what any person’s individual income is, nor what their income tax is, or any such fact. That assurance is, I think, worth repeating because of -the fact that some people seem disposed to think the directors have a knowledge ox their private affairs. Centenary of Province “The third point I want to mention is that this is the sixty-third annual report and next year will be the centenary of Otago. This company s history goes back a long way, and l would like to suggest that we gather together facts of interest regarding the foundation and history of the Company, these to be placed on record, and I think they should be of extreme interest to shareholders, because our company was founded by some very notable men. I had occasion the other night to look up some reference to Mr Robert Gillies, who was the first chairman of directors. He was a remarkable man and belonged to a remarkable family. Mr Robert Gillies came out to New Zealand in 1852 and settled in Tokomairiro, Milton, and he and his family were extremely successful in everything they did. In public life, they were all successful men. Mr Robert Gillies himself not only helped to found this company, but he was one of the founders of the Otago Daily Times and of the Westport Coal Company, Limited, and also of the first waterworks system in Dunedin. Two of his brothers were in Parliament —one a Minister, one a judge, and his father, Mr John Gillies, was very prominent in the old Provincial Council. I might mention, too, incidentally, that their fame still continues, as the younger son of Mr Robert Gillies is now the famous Sir Harold Gillies, the plastic surgeon, one of the most famous in the world. “As you know,” Mr Stewart added, “ there is a growing tendency now for the State to move in to all affairs and to monopolise various interests, and a company of this sort, which has been managed by private enterprise during all these years, is a standing test of efficiency against State competitive enterprise.” / Directors Re-elected Mr N. Paterson proposed and Mr T. Somerville seconded the confirmation of the appointment of Mr C. R. Nicolson and the re-appointment of the retiring directors, Messrs E. C. Hazlett, R. J. Gilmour, and W. Downie Stewart, all of whom returned thanks. Mr J. Sutherland Ross proposed and Mr A. McMillan seconded the reappointment of the auditors at the various branches. Vote of Thanks Mr J. R. M. Lemon proposed a hearty vote of thanks to the directors and staff, which was replied to by Mr Hazlett, chairman of directors, and Mr Ibbotson, general manager. (Extended report by arrangement.)