TRUSTEES AND " SETTIKYS."
WE hear enough, though by no means too much, of the woes of trustees, but nobody in ordinary times pities those of the persons for whose benefit trustees and the Trustee Laws are supposed to exist. They are, no doubt, contemptible persons ; for while most of them have no votes, they belong, in the great majority of cases, to the " classes," who, being comfortable, are always wrong, rather than to the masses, who, being uncomfortable, are always right. Still, they are human beings, and as such, when they suffer they are entitled to some of the pity which is just now so lavishly poured upon Whitechapel " unfortunates " and the less reputable section of the unemployed. They have not even a name—for the English world, though it laughed, did not adopt Mr. James Payn's humorous suggestion that they should be called the " settikys " (from cestui que)—and that is a grave mis- fortune. You cannot talk or write quickly enough about a class without a name; and even an Irish mob, though it loves hard words, could not shout with enthusiasm for " those who are the objects of beneficial pecuniary trusts." The class, however, exists, and has for some time been rather miserable. The steady paying-off of most solid securities has made its income smaller without any fault of its own, the reduction being usually an eighth, equal to an income- tax of half-a-crown in the pound, while the high price even of " converted " securities has prevented new investments at anything like old rates. It is quite possible for a family of " settikys " which in 1860 was happy on £500 a year, to be now living discontentedly on £310. It was felt to be hard to bear this, even as regards the smaller securities ; but when even Consols themselves succumbed, and those who had put up with 3 per cent. in order to be sure, found themselves reduced to 21, there rose a cry of despair audible even to Chancellors of the Exchequer. Even the steady policy of the Government, which is to refuse facilities for all trust investments, and so force the bulk of all trust money into Consols, gave way ; and a Bill was introduced and passed in the Lords which, under certain restrictions, allows trustees to invest in Colonial Bonds, in Metropolitan Board of Works Stock, in the fixed stock of solvent English railways, and in the loans of English boroughs. This Bill has now only to pass the Commons, and though, like everything else, it is impeded by Irish talk, we trust that, as it cannot be seriously opposed, it may yet, in spite of all probabilities, become law this Session. The limit of investment is very narrow, and one hardly perceives why it should not have been widened, at least so far as to include foreign stocks sanc- tioned from time to time by the Court of Chancery; but still, it will be a great relief not only to " settikys," but to trustees, who are constantly held responsible by beneficiaries for decaying incomes, and implored in the name of friendship to run at least " a little risk." Scolding of that kind is not reasonable ; but widows with perhaps X200 a year who suddenly lose £25 of it, are not always in a reasonable frame of mind. It will be possible, however, under the Bill, with a little management, to obtain 31 per cent. from the new list of stocks without wholly quitting Consols ; and when that is obtained, " settikys " will have perforce to be content. One-half of them, it is true, still think that they are entitled to 5 per cent., and that when they do not get it, their trustees' timidity or selfishness is to blame ; but still, as we said, they usually have no votes, and except when they are driven to despair, as they were by the great Conversion, Chancellors of the Exchequer need not greatly mind what they say, the more so as the reform most of them want, though reasonable enough from one point of view, is wholly unreasonable from another. The majority of " settikys " would like, we believe, that trustees should have power, when all the beneficiaries are competent to execute a release, to close the trust, and hand over the fund ; and there is only one reason against the innovation. Prima facie, the State only does mischief when it prevents grown persons from using funds intended for their benefit at their own discretion; when, for example, it forbids a widow from fitting out her son for India out of her own trust money. That seems not only a needless but a foolish restriction ; but a relaxa- tion in this direction would probably go too far for present opinion. Trusts for competent adults may be abolished altogether some day, as undue limitations on liberty ; but at present the intentions of the testator have to be con- sidered, as well as the necessities of business. Testators are often cynical, and desire that their beneficiary should not be considered competent to think for himself or herself ; and as the money is their own, their wishes must, for a time at least, be more or less exactly respected. More- over, the world has not yet decided that it is inexpedient to allow a man to protect himself, or his wife and family, against the chances of business ; and a large proportion of the trusts in existence are, under one form or another, provisions for a certain salvage in the event of bankruptcy. They would be worthless if competent beneficiaries could always enable trustees to close a trust, and though we think, in the end, opinion will limit trusts to the incom- petent—that is, children and lunatics—there is as yet no chance of an innovation which old lawyers would think so " wild."
We wonder whether there is any chance of Mr. Goschen reconsidering an old proposal of ours, which would slightly benefit the State, and greatly relieve the miseries of propertied mankind. We have never been able to see any argument of principle against a State Trustee which would not also forbid Post Office Savings-Banks, Government Life Annuities, or Post Office Life Insurances. A State Trustee could not, of course, manage a business, and it might not be expedient, for political reason's, to vest him with control over great territorial estates ; but why in the world he should not receive securities and pay their interest as directed for a small per-centage, we cannot even conceive. He would have no more difficulty in doing it than any other trustee, and in several Colonies, we are told, he finds none. He would incur no risk which the Court of Chancery does not incur, and his office might be made not only to pay itself, but to yield a moderate revenue to the State. On the other hand, the existence of such a State officer would be the best conceivable guarantee for the safety of the " settikys," while it would relieve respectable men of one of the most grievous burdens of modern life, the obligation of undertaking trusteeships for friends. No office can be more burdensome, or in many cases more full of risk ; yet we venture to say that nobody ever met or heard of a trustee who was the object of cordial gratitude from his " settikys." They only think he is doing what he con- tracted to do, and doing it, at the best, in a conscientiously disagreeable manner. Folks no more love their trustees, qua trustees, than they love their dentists or their bankers; and very often hate them for the persistence with which they insist on protecting them from ruining themselves. There would be no quarrel with a State Trustee, because he would be expected to be wooden; and if there were, he would mind it no more than a Stipendiary minds a prisoner's abuse. Half the cash fortunes in the country would pass at one time or another through his hands, and every new trust would mean the relief of some exceptionally blameless and decent person who otherwise would have been burdened with a care which in many, perhaps most cases, he accepted only because it was impossible to refuse. The State is taking care of all manner of poor people in all manner of ways ; suppose for once it extends its paternal protection to the well-to-do. They can, it will be argued, look after themselves ; but, as a matter of fact, they can- not, and hardly a month passes without some outrageous case of an innocent man being ruined because he under- took in an hour of fatuity to diminish his neighbour's cares. If there is any argument for the existence of an Inspector of Friendly Societies, there is argument sufficient and to spare for a State Trustee.
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