PUBLIC TRUST OFFICE.

Otago Witness, Issue 3085, 30 April 1913, Page 31

PUBLIC TRUST OFFICE.

ROYAL COMMISSIONERS’ REPORT. VALUABLE SUGGESTIONS. STAFF UNDERMANNED AND OVERWORKED. HOSTILITY OF LEGAL PROFESSION. WELLINGTON, April 25. The Royal Commission r (Messrs J. H. Hosking, K.C., and A. Macintosh) appointed to inquire into and report on the working of the Public Trust Office has submitted its report to his Excellency the Governor. The following is a summary of its main features : All trust moneys which come into the Public Trustee’s hands, unless expressly forbidden to bo ,so invested, form one blended fund, and are invested indiscriminately. This common fund earns interest at, say, from 41 to per cent, per annum, and estates whoso money make it up are paid at a somewhat lower rate without a break for any interval of noninvestment, If trust moneys axe to go into the common fund they are guaranteed by the State, but if they are specially invested neither the Public Trustee nor the State is responsible for any failure of or deficiency in the security, provided the Public Trustee has acted as a trutsee ought in making and looking after the investment. It is necessary to emphasise that the good supply of skilled officers must be kept up to ensure effective working- . . , . . The commissioners express the opinion that the administration with respect to the methods adopted in making investments and the collection of income and revenue therefrom is eminently efficient. The number of well-founded complaints received is exceedingly small in comparison with tire. number of estates administered or in course of administration, and the variety of factors to be dealt with. At the same time, having regard to the insufficiency'of the staff and to the varying business capacities of the agents (in the back-blocks, for small estates, the local policeman is the realising agent), they cannot say that the administration is as efficient as it could bo made. Subject to these remarks they found that the office system and methods provide with the greatest care for the safeguarding, controlling, and scrupulously accounting for any estate placed in its charge. On this subject tire commissioners find that the head office and its various agencies are fully and anxiously alive to the various business considerations combined with the trustee’s duties to be taken into account with respect to the realisation of estates. By far the greater portion of moneys controlled by the trustee is invested on mortgage of freehold security. The position of the funds as at 30th September last was as follows : —Total for which the office was liable to account, £5,407,356, less funds specially invested, £173,948. Of this amount £4,411,893 was invested in mortgages, £122,758 in Government securities, £260,925 in the local bodies’ debentures, and £153,136 in the Land Settlement Finance Act debentures. From March 31, 1912, until January 21, 1913. the uniform rate asked by the office on all investments on mortgage was 5 per cent. This was raised to per cent, on the date last mentioned. Generally the report speaks favourably of the methods followed in making the investments, but the commissioners remark that the Public Trustee did not take as early as he might have done advantage of the higher market rate of interest which has orevailed for the last 12 months and more. ■ The commissioners express the opinion that the board should be strengthened by the addition of a valuer-general and two members of wide business knowledge and experience, who shall deal not only with such important matters as advances, investments, and acceptance of trusts, but with questions of difficulty and general policy. The Solicitor-general, they think, may*well be omitted, and they strongly recommend that one of the additional members should be a person who is experienced in matters relating to farming and stock, it would also be necessary to attach some remuneration to the position held by the additional outside members. Generally the commissioners report that the trusts of the West Coast settlement reserves and other reserves are carefully and satisfactorily performed. They consider, however, that the Public Trustee should not have to deal with the question of whether a Native owner is to be relegated to the mere position of an idle rentreceiving landlord or is to be encouraged and helped to become a successful cultivator and a useful member of the oommunitv, or whether any and what efforts should be made to settle the still unleased portion of the various reserves. They consider that tho administration of reserves should be in touch with the Native and Lands Departments, so that a policy consistent with the operations of those departments as regards Natives generally should be maintained. In connection with the reserves other than the West Coast settlement, there is a special board constituted under the Native Reserves Act consisting of the Public Trustee and other members of the Public Trust Board and two Natives appointed by the Government. This board, they say, is a mere farce. It meets infrequently, and its last meeting was held over a year ago. As the Native Minister has never attended a meeting, and the Under-secretary of Lands "is not a member of the board, it is plain that the Public Trustee is altogether out of touch with the departments that are most interested in his administion. They think that the foregoing considerations point to the necessity for some change in the administration of Native reserves. The Public Trustee and those members of the office staff who gave evidence held the view that the office should be relieved of Native work. The commissioners also express the opinion that it would be in the interests of the Natives if by means

of the revenue from these reserves, their own property, they would be assisted to better themselves as agriculturists and otherwise To this end they are of opinion the whole of the Native reserves and their administration should be vested in an independent body. They therefore suggest that a Native reserves trustee should be created, with a board consisting of himself, the Under-secretary of Native Affairs or some other expert in Native Affairs, the Under-secretary of Lands, and two other members appointed by the Governor, one of whom should be a Native and the other a European who has had experience in agricultural matters. The Native Trustee, acting under the board, should be endowed with the main functions of a Maori land board, except that he should not be authorised to sell in cases where the Public Trustee is not now authorised to do eo. All the existing trusts should be maintained so that a change shall not alter the rights of beneficiaries. The commission finds that the office staff is under-manned and overworked. 10,552 hours’ overtime were worked for the 12 months ended May 31 last, to which may be added 5000 hours for which no paymeht was made. One officer worked sixteen months’ time, counting by hours, in a period of 12 months. The under-manning particularly applies to the skilled staff. They are of opinion that the salaries of the staff require readjustment; that promotion in the skilled departments should be made according to fitness for the post and not on the grounds of seniority in age and service unless accompanied by equality of ability. The staff is inadequate, and while it continues so overtime must be worked. The staff should be augmented by at least 20 cadets, to be specially trained in the skilled departments. One remedy proposed for the congestion is that of decentralisation. On this subject the commissioners suggest that the regulations which the Public Trustee introduces for the delegation of his functions should safeguard as largely as possible the control on the part of the head office, and that the regulations should receive the approval of the Government. The commissioners make recommendations in regard to the building up of a stronger reserve fund, and the subject of gratuitous work imposed upon the Public Trustee; that there should be greater control of the country agencies; that no person, should be appointed to the charge of a country agency without the Public Trustee being consulted, “ and certainly not in the face of a protest on the part of the Trustee.” On the subject of the legal work of the office the commissioners recommend : —(1) That the office solicitor and his staff should be confined to the indoor work of the office. (2) That third parties and others requiring legal advice should not be allowed to seek it from the office staff at the expense of the common fund. (3) That the office solicitor’s appearance in court should be confined to separate matters originating in his office, and for these an adequate fee should be a charge to the estate to which the matter belongs. Otherwise the work is being done for that estate at the expense of the beneficiaries as a whole through the common fund. (4) That legal work should be decentralised instead of being more and more concentrated at Wellington. It was demonstrated to us further, report the commissioners, and indeed it is frankly acknowledged by the Public Trustee, that a spirit of hostility has sprung up between the Public Trustee and the legal profession during the past two or three years. The causes for this were set forth from all parts of the dominion, and was brought by us under the notice of the Public Trustee. Without going into them in detail, it is sufficient to say that they have arisen out of the zeal’ of tho Public Trustee and his agents to attract business to the office without, perhaps, a realisation of the extent to which such zeal might bring about a reaction. It is for the Public Trustee, nov« that his attention has been called to the causes and the hostile feeling referred to, to determine, with due regard to the interests of the office, upon the bast method of arriving at a better understanding. The commissioners recommend an amendment of the Act to allow of the appointment of one or more persons as advisory trustees, whom the Public Trustee may consult on all questions affecting the administration of the trust funds. It may be taken for granted, say the commissioners in conclusion, that the indubitable advantages derived from such an institution are by this time sufficiently well known to the community, thus rendering it quite unnecessary to resort to questionable or undignified methods of attracting business by unduly encroaching on the prerogatives of others. It should be the object of the department not to arouse antagonism by overt acts of irritation and aggression, but to cultivate the best relations with all sections of the public, and thereby enlarge its scope of usefulness in an amicable and legitimate manner. We cannot, therefore, too strongly condemn what has been dearly manifested in the course of our investigations : a tendency to unduly force the growth of business. In a “rider” attached to tho report Mr Macintosh says : “ As lay member of the commission I desire to add as- my personal expression of opinion that an attempt to set up a legal bureau, for so it may be described, in such a department as that of the Public Trustee, to undertake outdoor work, is very questionable and a rash experiment, and involves serious responsibilities that it would be prudent to avoid. The discretion of testators or beneficiaries should not he interfered with as regards the disposition of their legai business, and it would bo well to abstain from conspicuously presenting alluring conditions in the direction of cheap law, synonymous, perhaps, with faulty law. In my opinion the public and the department itself would be better served from out-

side as regards much of the extraneous legal work now undertaken by the prac-* titioners comparatively inexperienced in outside or general business.” Commenting on the report, the Hon, Mr ' Hexdman spoke of it as full of valuable suggestions which will receive the immediate consideration of Cabinet, and that he proposed to advise it jo introduce legislation next session to give effect to such proposals as require it. Some of the questions as to the increase of staff and salaries had already been raised and partly dealt with before the commis* sioners reported, and would be attended to by the Public Service Commissioners.