THE PUBLIC TRUST

Taranaki Daily News, 18 December 1933, Page 7

THE PUBLIC TRUST

INVESTMENT OF FUNDS. THE POSITION STATED. The Prime Minister (the Rt. Hon. G. W. Forbes), in a statement recently issued, referred to a misapprehension which had arisen regarding the investment of funds by the Public Trust Office. “A certain trade and financial journal,” said Mr. Forbes, "follows the practice of publishing details of the assets and liabilities in bankrupt estates, and in some cases recently, where the Public Trustee has been shown as the secured creditor in respect of land, the amounts owing represented a substantial proportion of the value of the land. From this it has been wrongly assumed by some readers of the journal that investments of Public Trust Office funds have been made on a narrow margin of security, whereas the true position is that the mortgages were the assets of estates entrusted to the Publi6c Trustee for administration, and represented either investments made by deceased persons in their lifetime or the unpaid purchase money owing under contracts for the sale of land entered into by such persons. The Public Trustee has not been concerned as the actual lender of the moneys, but is merely acting as the administrator of assets entrusted to his .care.

"In point of fact, the investments of Public Trust . Office funds have been made on a prudent and conservative basis. Advances have been confined to an amount exceeding in no case threefifths of the amount of a special Government valuation of the land proffered as security, and generally an amount less than that which the valuation on this basis would sustain has been granted. This compares with the general practice of private trustees of advancing up to two-thirds of valuations made by private valuers. An additional precaution adopted by the Public Trustee has been the practice’ of obtaining check valuations by independent valuers where the amount involved is £lO,OOO or over. Loans made by the Public Trustee in recent years have also been granted mainly on an instalment table basis, with the result that the conservative advances originally made have in many instances been substantially reduced.” The Prime Minister concluded by stating that arrangements, which have the full co-operation of the publishers of the paper, are at present in train for the purpose of avoiding any such misunderstandings in the future. •