TRUSTEES, EXECUTORS, AND AGENCY COMPANY.

Otago Witness, Issue 3611, 29 May 1923, Page 8

TRUSTEES, EXECUTORS, AND AGENCY COMPANY.

VALUE OF TRUSTEE ADMINISTRATION. The forty-second annual meeting of the Trustees, Executors, and Agency Company was held in the company’s office on Wednesday morning. Mr A. Bathgate (cha'nian of directors) presided over a fail attendance of shareholders. CHAIRMAN’S ADDRESS. In the course of his presidential address, the Chairman said that at the company s last annual meeting he had referred to the high rates of interest ruling lor mortgage and other investments, such as municipal debentures. The easing of the rates of interest in London which he had also referred to and the flotations of loans there by the New Zealand Government had had the effect of easing considerably the rate of interest in New Zealand for municipal loans, and this easing of the rate here had been helped by the fact that interest on such loans was subject to a maximum deduction of income tax of 2s 6d in the £. This had encouraged investors to take up that class of investment in preference to mortgages, and consequently mortgage interest had not fallen in the same way. Indeed, there were factors that tended to keep the rate of mortgage from falling. The present rate of' income tax practically prevented the insurance companies and others who used to find mortgages on freehold land a suitable form of investment for their reserves from now investing in this class of security, and therefore drove a certain amount, of money into oilier channels of investment. Mr Massey had promised further reductions of income tax. hut the reduction would have to be considerable before companies subject to the maximum rate of income tax could invest on freehold mortgage. He might say' that this did not affect their company investing on freehold mortgage, because each trust had its separate assessment of income tax according to its income, and as comparatively few incomes reached a high mark, the rate of tax was not a preventive. Mr Bathgate went on to point out again that the Trustees Company had by its constitution, the power to act as executor and trustee and it had by the experience of its directors, manager, and staff, the machinery to carry out the administration of any- estate committed to its care. It was continuous and it was permanent, so that no death or change added any expense to the estate, as was the case in the death of private trustees. The records kept by the company enabled it to keep beneficiaries ported at all times with the position of the trust, and accounts were furnished and remittances made regularly of income earned.

Persons considering the appointment of the company as executor of their will should call and consult the manager and the officers of the company, as their experience in the large number of estates handled by the company made them competent to suggest how the testator’s wishes might be affected by certain contingencies. The company advised, however, that the will should be always drawn by a solicitor. This saved litigation which invariably arose iri the case of wills drawn by laymen. The advantage, however, of a talk with the manager and officials of the company was that a personal touch was established with the testator, who could satisfy himself beforehand that his wishes as expressed by his will were clearly understood. He felt certain that there were still many in the community who had a stake in the dominion. hut who did not yet appreciate to the full the advantages offered bv a company such as the trustees, and there were others who, knowing something of the advantages, deferred acting. Therefore,, he took that opportunity of bringing those advantages again before the public. Since the last balance sheet Mr Charles Holdsworth, owing to the removal of the Union Steam Ship Company’s headquarters to Wellington, had tendered his resignation as a director, a position which he had filled since the retirement of Sir James Mills. The directors had filled the vacancy by the appointment of Mr David Allan, who was well known as a director of Messrs Wright, Stephenson, and Co. (Ltd.). Mr Allan’s knowledge of sheepfarming and agricultural conditions throughout the dominion, and more particularly in Otago and Southland, had proved of great value to the board. Sir John Roberts and Mr Allan were both at present paying a. visit to Great Britain, and in that connec-

tion he would like to remind them that directors, though absent from the dominion, could often perform valuable services to the company, the activities of which extended bevond the dominion. The Chairman said the directors had filled the vacancy caused by Mr Holdsworth’s retirement owing to removal to Wellington by appointing Mr David Allen (a director of Messrs Wright, Stephenson, and Co.) as director. His knowledge of sheep-farming and agricultural conditions had proved of great service. The company’s agent at Timaru was Mr F. A. Raymond, who had represented the Public Trustee for many years in that town. An agency' had been opened at Invercargill, with Mr R. B. Caws as agent, and the Hon. A, F. Hawke as local director. The figures in the balance sheet called for little comment. The net result was that the profit had increased by £336 15s sd. which he thought they would agree was satisfactory. In that connection a comparison of the last few years showed that the company had been going steadily ahead. In 1917 the profit was £2062 7s 4d; in 1918, £1251 10s 7J; in 1919, £2168 18s 10d- in 1920, £2308 12s lOd; in 1921, £2213 2s lid; in 1922, £2321 6s 3d; and in 1923, £2658 Is lOd. He might also add that this was in the face of increased expenses by way of salaries paid to the staff as the members gained experience and became more valuable to the company. • he trust and agency figures were to some extent the most interesting figures, giving as they did some idea of the volume of business entrusted to the company’s care. Mortgages showed an increase to the extent of £23.745; debentures, £74.091: shares, £117,775; landed property, £22,255; other securities, £23.595; balances at debit sundry clients. £10,385; deposits showed a decrease of £5586: cash at the bankers a decrease of £6616 The total figures for the year were £2.966.999 18s 6d, compared with £2,707,254 19s 4d last year, or an increase of £259,744 19s 2d. They would see that the total value of assets in ihe company’s care was now close on £3.000.00-0. and would agree with him that it represented a big responsibility with which to be entrusted. Only those who knew, as the directors did, the amount of detail to be attended to in each estate, the attention to principles of the law governing trustees, the investment of money and consideration of securities, could realise the assiduous attention demanded of the manager and staff. Now that their reserves had grown to rhe amount they had done the board was of opinion that the time was approaching when it would not be inopportune to capitalise part of the reserves, and a proposal to that effect would be submitted at some later date to the shareholders. The funds also of each estate were so dealt with that each received the full amount of income earned in respect of them. He had much pleasure in moving the adoption of the report and balance meet. Mr G. R Ritchie seconded the motion. The report and balance sheet were adopted without further discussion. Mr John Mill moved the re-election of the retiring directors, Sir John Sinclair and Mr P. C. Neill. P. C. Neill. They were men of good standing throughout the dominion, and their presence on the directorate was an important factor in strengthening the company. All along the shareholders had been fortunate in having good men at the head of affairs, and hence the success of the company as disclosed in the balance sheet. —(Applause.) Mr H. S. Fenwick seconded the motion, which was carried. The Chairman referred to the proposal made in the annual report for the appointment of a seventh director, thereby filling a vacancy that had occurred some years ago. He had much pleasure in proposing that Mr G. R. Ritchie be elected to that position, and he thought they would agree that it would bo impossible to find a better tnan. Mr Mill seconded the motion, which was carried. Mr C. R. Smith moved: “That the remuneration of the directors be increased from £250 to £360 per annum, the amount to be divisible as they shall themselves from time to time determine.” Mr Baron seconded the motion, which was earned unanimously. . . The Chairman declared the retiring auditors—Messrs Barr, Hercus, and Co., and Messrs Wm. Brown and Co., reappointed. Mr A. Sinclair moted a very hearty vote of thanks to the directors, manager, and staff, remarking that ho had a special knowledge of the c-norrnoiis amount ot work that was done in the office. The motion was carried. The Chairman, in expressing Ins thanks on behalf of the directors, said that although the members of the board kept an eye °on the affairs of the company tile transaction of tlie business was in the hands of the manager (Mr E. E. Clowes) and ins staff bv whom they were well served Mr Clowes (the manager) returned thanks on behalf of the staff for the vote of thanks proposed bv Mr Sinclair. Although a great deal of responsibility for the conduct of the business of the company rested upon the manager and staff, yet it was the directors who shaped the policy and decided all important questions. This was one of the advantages of appointing the company, as it meant that a testator had the benefit of the experience and business ability of six or seven directors, which was tantamount to having liis estate administered by a group of trustees. He agreed with the remark made by Mr Ritchie that the day of the private trustee was dead.