THE PUBLIC TRUST.

Star (Christchurch), Issue 10753, 26 April 1913, Page 8

THE PUBLIC TRUST.

ROYAL COM M [SSFOX'S REPORT. UNDER-STAFFED AND OVERWOK lv ED. BOARD SHOI'LD UK STRENGTHEN Ki). " TOUTTN'G " FOR. IirSTNEKS DKPREC.'ATKD. ['Picii T;tKS» Association'. | WJIL LFX(J TO N, April 25.

Tho ri-oyal Commi.">siuuers (I\!.r J. 11. Hosking, K.C.. and Mr A. M.'lrtosh) appointed to inquire into and report on tho working oi tho Public r l ruyt Office have submitted their report to his Excellency the Governor. The following i.s a aimnmry of its main features

All trust moneys which come into the Public Trustee's hands, unless expressly forbidden to ho so invested, form one blended fund, and are invested indiscriminately. This common fund earns interest at, say, from -J i to 5-i per cent per finuuai, and the estates whose money mako it lip are paid at a somewhat lower rate without ;i break for any interval of lion-invest-nient. If trust moneys are to go into the common i'mid they are guaranteed by the State, but if they are specially invested neither the Public Trustee nor tho State, is responsible for any failure of or deficiency in the security, provided tho Public Trustee has acted as a trustee night, in making and looking after the investment-. » It is necessary to emphasise that a good supply of skilled officers must be kept to ensure effective working. The Commissioners express tho opinion that the administration with respect to tho methods adopted in making investments and the collection of the income and revenue therefrom is eminently efficient. The number of well-founded complaints received is exceedingly small in comparison with the 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 backblocks for small estates the local policeman is the realising agent). They cannot say that the administration is as efficient as ft could .be made. Subject to these remarks, they found that the office system and methods provide with the greatest care for safeguarding, controlling and scrupulously accounting for any estate pieced m its charge. O'ti this subject the Commissioners find that the head office and its various agencies are fully and anxiously alive to the various business considerations, combined with trustees' duties t-o he taken into account with respect to the realisation of estates. INVESTMENTS.

By far the greater portion of tho moneys controlled by the Public Trustee is invested on mortgage of freehold security. The position of tho funds as at September 30 last, was:—Total for which the office was liable to account, £5,407,356; less funds specially invested, £173,948. Of this amount £-1,411,893 was invested in mortgages, £122,758 in Government securities, £260,925 in local bodies' debentures and £153,136 in Land Settlement Finance Act debentures. From March 31, 1912, until January 21, 1913, the uniform rate asksd by the office on all investments on mortgage was 5 per cent. This was raised to oi per cent on the date last mentioned.

Generally the report speaks favourably of the methods followed in making investments, but the Commissioners remark that the Public Trustee did not take as early as he might Kave done advantage of the higher market rate of interest which has prevailed, during the last twelve months or more.

A STRONGER BOARD. The Commissioners express the opinion that the Board should be strengthened by the addition of the ValuerGeneral 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 of the additional members one should bo a person who is experienced in matters relating to farming and stock. It also will bo necessary to attach seme remuneration to the position held by the additional outside members. They add: " The desirability of appointing to the Board members from outside would not operate with the same degree of force. It might indeed in a Government institution be put aside if the Public Trustee himself were one who has had good business training and experience, as he undoubtedly should have, or one who had graduated through the office; for we regard the experience gained by long service in the Public lVust Office, conjoined with a capacity to take advantage of it, as affording as sound a basis for appointment as that of business experience gained outside." NATIVE RESERVES. Generally the Commissioners report that trusts of "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 rent-receiving landlord, or is to be encouraged and helped to become a successful cultivator and useful member of the community, or whether any and what effort should be made to settle the stall unleasod portion of various reserves. They consider that the administration of 'reserves should be in touch with the Native and La-nds Departments, so that a policy consistent with the operations of those Departments as regards Natives generally should be maintained. In connection with reserves other than 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 Governor. This Board, they say, is a mere farce. It meets infrequently, and its last meeting was over a year ago. As the Native Minister has never attended, and the Under-Secretary for Lands is not a ine;nber_ of the Board, it is plain that the Public Trustee altogether ought to be in touch with the Departments that are most interested in his They think that the foregoing coJisiderations point to the necessity for some change in the administration of Native reserves. The Public and those members of the office staff who gave evidence held the view that the office should be relieved of Native work. NEW BODY SUGGESTED.

The Commissioners also express the opinion that it would be in the interests of .Natives if, by means of the revenue from these reserves, their own property, they could bo assisted to better themselves as agriculturists and otherwise. 1 o tins end they are of opinion that the whole of the Native reserves and their administration should be vested in en independent body, and they therefore suggest that a Native Reserves Trustees should be created with a Board consisting of himself, tho Under-Secretary for Native Affairs or isorao other export in the Native Affairs Department, the linder-ypcre-tarv for Lands and two other members appointed by tho Governor, of whom oiie .should lie a Native and the other a European who had experience of agricultural matters. The Native Trustee, acting under the Board, should be endowed with tho iuain functions of a Maori Land Board, except that he would not be authorised to sell in cases where tho Public Trustee is not now authorised to do t>o. All existing; trusts

should lie maintained so that the chango < c luili not nlLer tho nglits oi beiicfieiarios. STT 0 R.T-ST A F FED.

The Commissioners liiul that the offfco staff it; undermanned and overworked. There woro 10,552 hours' overtime worked for the twelve months ended May 31 last., to which may bo added 5000 hours for which no payment v.-as made. Ono officer worked sixteen mouths' time, counting; by hours, in a period of twelve months. The undermanning particularly applies to tho skilled staff. They are of opinion that tho salaries of the staff require readjnnbmoiit; that promotion in slaked Departments should be made according to fitness for the post, not on grounds of seniority in ago and service unless accompanied by equality of ability. Tho staff is inadequate, and, while it continues so, overtime must be worked. The staff should bo augmout-d by at least twentv cadets, to bo specially trained in skilled Departments. One rernodv proposed for the congestion is that "of decentralisation. On this subject the Commissioners si>gjrest that regulations which, the 1 üblic Tmsteo introduces for the delegation of ids functions should safeguard as largely as possible control on the part of the head office, and that the regulations should receive the approval of tho Government. The Commissioners make recommendations in regard to building up a stronger reserve fund and the subject of gratuitous work imposed upon the Public Trustee bv legislation. They state that there should be greater control of country agencies, that no person should he appointed to take 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 Public Trustee." LEGAL WORK. On the subject of the Jegal work of the office, the Commissioners recommend : (1) that tho 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 bo charged to the estate to which the matter belongs, otherwise the work is being done for that estate at the expense of the beneficiaries as n whole through tho 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 vears. The causes for this were set forth from all parts of the dominion, and it 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 the 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 foi" the Public Trustee, now that his attention has been called to the causes of the hostile feeling referred to, to determine, with due regard to the interests of his office, upon the best 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 a trust.

METHODS OF BUSINESS. "It may be taken for granted," say the Commissioners in conclusion, '' that the indubitable advantage 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 tho 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 clearly manifested in the course of our investigations, a tendency to unduly force the growth of business." In a " rider" attached to the report Mr M'lntosh says: "As a lay member of the Commission I desire to add as my personal expression of opinion that the 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 a very questionable and rash experiment, and involves serious responsibilities that it would be prudent to avoid. The discretion of testators or beneficiaries should not be interfered with as regards the disposition of their legal business, and it would be well to abstain from conspicuously presenting alluring conditions in the direction of oheap law, synonymous perhaps with faulty law. In my opinion the publio and the Department itself would be better served from outside as regards much of the extraneous legal work now undertaken by practitioners comparatively inexperienced in outside or general business."

Commenting on the report, the Hon A. L. Herdman spoke of it as full of valuable suggestions, which will receive immediate consideration by the Cabinet and that he proposed to advise it to introduce legislation next session to give effect to such proposals as require ft. Some of the questions > as to the increase of staff and salaries had already been raised and partly dealt with before the Commissioners reported, and will be attended to by the Public Service Commissioners.