8.—9.

In times such as the present these advantages are naturally of particular value to the persons beneficially entitled. Although the return has unavoidably been reduced in consequence of the legislation for interest reductions passed by Parliament in the general interests of the community, as well as the economic conditions which made those measures imperative, the Public Trustee rightly points out that the beneficiaries and other persons affected would likewise have had their incomes reduced if in the past their funds had been invested in separate securities outside the Common Fund. Such separate investments would, moreover, have been subject to the possibilities of losses of capital or stoppages of income which have in many such cases actually been experienced during the present times, and from which investments in the Common Fund are protected. 8. Certain difficulties explained in the report were encountered during the past year in consequence of the endeavours of some local authorities to withdraw from the Common Fund sinking funds invested therein by the Public Trustees as their Sinking Fund Commissioner, so that a higher return might be obtained from the funds than the rate of interest credited after the passing of the National Expenditure Adjustment Act, 1932. As the position had been brought about in consequence of the passing of that Act, and the operation of the mortgagors relief legislation had also increased the difficulties of the Public Trustee in meeting the demands of the local authorities, further legislation complementary to these Acts was brought down to afford the Public Trustee a due measure of protection from such demands during the operation of the emergency legislation referred to. Though some opposition was expressed by a few local bodies, the justification for the measure was generally recognized by local authorities, and the legislation was approved and passed into law by Parliament. The Public Trustee rightly claims that, considering the absolute protection afforded by the Common Fund system for the capital moneys and other relevant factors, the local authorities, as well as beneficiaries and clients interested in moneys invested in the fund, are at least in as favourable a position as they would have been if their moneys had in the past been invested in separate securities outside that fund. 9. The readjustment of interest-rates in respect of moneys invested in the Common Fund which was made on the passing of the National Expenditure Adjustment Act, 1932, was set out in the foreword to the report of the Public Trustee for the previous year. The readjustment operated from the Ist April, 1932, and the rates of interest then fixed — i.e., 4 per cent, per annum on moneys held in trust and 2 per cent, per annum on moneys at call — were maintained throughout the financial year. The extension of the programme of legislation directed at achieving a lower level of interest-rates and embodied in legislation passed during the adjourned session at the beginning of the present calendar year, and the conversion of the Public Trustee's holding of Government securities in terms of the scheme for the conversion of the internal indebtedness of the State led to a further reduction of revenue as from the Ist April, 1933, necessitating a revision of the Public Trust Office rates of interest. The trust rate was reduced from 4 per cent, to 3j per cent, per annum as from the Ist April, 1933, the "call" rate remaining unaltered. A readjustment of the rates of interest in respect of moneys invested in the Common Fund on investment agencies was also effected on a basis proportionate to the reduction of gross revenue from the investments occasioned by the developments referred to. This basis of readjustment is explained in paragraph 42 of the Public Trustee's report. 10. The financial and economic conditions prevailing have necessarily led to increased difficulties in the performance of the important fiduciary duties undertaken by the Public Trustee, and have resulted in a large increase in the work entailed. Notwithstanding this, the business of the Office has been performed promptly and efficiently and to the satisfaction of the beneficiaries and clients concerned, and there has been no increase in the commission or other charges for the services. This is a feature which may fairly be regarded with satisfaction both by the Public Trustee and by those whose beneficial interests are in the trusteeship of the Public Trust Office.

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