New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1877-12-17
DUIiES AND EESr0NS.BILIIIES or 1EUS-
TELS

DTIiES AND HESIUNS.BILIIIES or 7EUS-
TELS.
The failure of a savings bank which had pat
It's funds into speculative ventures ike the
Chesapeake aud OHIO Railroad, and the failure
OF a trust company whose investments were OF
nature still less defensiJie, are among the
most recent local circumstances freshly call
ING attention t. the whole subject Of
rust funds, and especially to the duties
iud responsibilities Of the trustees themselves.
Few persons holding positions of trust, such
as trustees, guardians, OF executors. make
themselves acquainted with the limited poVccs
allowed them 10y the laws of this State. The
developments OF Last -piing relative to the ca
chuugIugof 500, 0O0Of Goycmmentbondspr
scented to the New York University, lOrtnc bonds
If Inc Central Railroad OF New-Jcrsry furnished.
an illustration OF the wisdom of or laws.
Another instance was furnished in September,
1876, by " \ Trustee" of Il large estate, VINO
appeared in print to give statement OF the
affairs and value Of the Delaware, Lackawanna
and Western Company, AID Who was Endorsed by
tho Editor OF The Post as follows: his trustee
" IS personally known to Us as gentleman OF
" high character, Of large experience in rail-
road management and affairs, and as one
" who is entirely competent to judge OF tn"
e value of railroad property and the correct
" ness Of railroad accounts. If We had author
IS ity TO mention his name, Ina al2I" would
- be sufficient to command confidence This
trustee had invested $2J0,O00 OF trust funds
under his control IN the securities Of the Dcla-
ware. Lackawanna and Western Company, ana
hence. after an examination, he presented the
public with mass of figures, and gave his
conclusions a. follows:
Ihave looked into the affairs OF th, company solely IN
regard TO these trust funds which have invested. can
SEQ no possible danger to creditors. The margin ol
900 900 s ample for any rel nIle duration Of the
cent low prices of coal and 1t docs seem to me con-
c.syc that the shareholders Of this property, whc,
l.cI SD r. luciye 20 tncm Tor many years have no
,ause for alarm. looking at the limited amouut OF il,
debt and at The fact that Its capital J. not in
creased or swollen in any by cxtrayasaut cxpcud
lures The capital account Of the railway oubcay
down 10 figures which fully correspond the value Of
the railway and coal lands. under the present
dition OF things.
Yet the stock of Delaware, Lacllawanna and
Western has since declined from about - to
3O7z and of its obligations, Morris and Essex
= per cent shares from 80 to 51l2. The argu-
mrpt Is not yitia.cd by the fact that thcs.
stock, are now speculatively held at 20
or % per cent above their yet low
est prices. Without stopping to ask
whether the trustees of the university are
posscssed of special powers Is virtue Of
particular charter, the two instances offer an
opoortunity of calling attention to the response
blifies assumed by trustees, who in their
anxiety TO manage trust properties to the
hest advantage, and realize the greatest posi-
bic interest and profit, 20 beyond the linita-
tiops prescribed by law. This happens oftcncst
with generous, cnterprising, and Jealous trns-
ices. acting in absolute honor and good faith.
IF taking the risk be attended with profit, The
trustee usually receives little or no thanks ;
if with loss, he receives consure, and in many
cases has to pocket the loss himself. In cases
of improper inye,tmont,-that is, in other than
Government or real estate securities-which
are diyisble, the ccsiU que trust is not limited
10 the rejection Of all or none of Them but
may accept such as are profitable and reject
the others.
In the case Of the trustee who had invested
in the securities Of the Delaware, Lackawama
and Western Company, it may be pertinent to
ask, First: In what class of the company's
securities did he invest the $4,000 of
Crust funds ?p Did the investment include
any of the stock Of the company, or was it con-
fined to the obligations of the company; and if
SO, what class of obligationsi Second: by what
authority was he justified in making such IN