Evening star., 1937-05-25
D. c. TRUST LAWS
ARE MODERN|zED
Investment in Real Estate
Mortgages of Nearby
Area Permitted.
BY EDWARD C. STONE.

Probably the most important change
Is that the new regulations, known as
equity rule H." will permit invest
ment by f1duciaries in first mortgages
on real estate located within 10 miles
Of the boundaries Of the District.
Heretofore only District realty was
acceptable to the court.
The changes were recommended to
the court by Theodore Cogswell,
register of wills, who has been study
ing the matter for six months with the
cooperation Of special committees
named by the District Bar Association,
District Bankers Association and the
fiduciary section of the Bankers
Association. The three groups were
headed respectively, by Col. Walter
c. Clephane, David Bornet. vice presi-
dent Of the National Savings & Trust
Co.. and Frank NJ Perley, trust in
vestment officer of the American Sc
curity g. Trust Co.
Rules Effective July l.
Court rules governing trust invest
ments in New York, Massachusetts,,
Pennsylvania, Connecticut and New
Jersey were studied with view to
formulating a model rule. The new
rule will become effective July l.
AS in the past, fiduciaries may in
vest funds under their control in Fed
eral, State, county and municipal
bonds, and no material changes are
made in the requirements to be met py
such obligations.
The old requirement concerning
railroad obligations that the company
must have paid per cent dividends
on all It's outstanding capital stock for
i've years next preceding the invest
n1ent was eliminated.
In its stead was written the require
ment that the net income of rail-
road available for payment of fixed
charges must be at least equal to fixed
charges during four out of five of the
preceding fiscal years, and not less
than one and half times the fixed
charges for the Immediately preceding
year.
Other Important Changes.
The new rule also enlarges the field
for investment in equipment trust
obligations of railroads Under the
old rule trust funds might be invested
In public utilities, but only in such
utilities as are located in the District.
Under the new set up investments
may be made in utilities obligations
regardless of location of the COM
panies, excepting street railways.
Gas, electric and water power COM
panies, under the new regulations,
must have gross operating revenues Of
not less than 81 100000 year for the
next preceding four out of five years.
Telephone companies must have taken
in gross revenue of s5,000,0o0 a
year over similar period. A further
requirement Is that for five fiscal years
preceding the investment the net
earnings Of company must average
one and two-thirds times the average
annual interest charges on outstand-
ing obligations and one and three
fourth times such interest during the
last preceding year
Street railway bonds were elm
mated as proper trust investments,
with the exception of consolidated
mortgage per cent bonds of the
Washington Railway g. Electric Co.
and first mortgage per cent bonds
Of the Anacostia & Potomac River
Railroad Co., the principal and inter-
est Of which are guaranteed by the
Washington Railway g. Electric Co.
The field Of permitted real estate
mortgage investments now extends
approximately from Marshall Hall on
the south to Rockville and Olney on
the north and from Falls Church on
the west to Bowie and Upper Marl-
boro on the east.
Institute Presidents Honored.
Past presidents of Washington
Chapter, American Institute of Bank
ing, which was organized in 1901,
were special, honored guests at din
ner last night at the Columbia Coun-
try Club. Paul J. Seltzer, chapter
president, presided. Other speakers
were w. F. D. Heron, first president;
Thomas J. Groom, acting president
D. c. Bankers Association; H. H. Nc
Kee, chairman Clearing House Asso-
citation; DR.. Harold Stonier, educa-
tional director of the institute. Edwin
c.. Stefe, former member, sang sew
eral numbers, accompanied by George
Wilson at the piano, and T. Hunton
Leith was the banquet chairman Past
presidents attending were w. F. D.
Heron, John Poole, w. NICK. Stowell,
e. Percival Wilson, Joshua Evans, jr.;
Ernest E. Herrell, Charles H. Doing,
jr.; Victor B. Deyber, Harold W. Burn
side, Wilmer j. Waller, James c. Du-
lin, jr.: R. Jesse CLANCY, T. Hunton
Leith, l. j. Roberts, James A. Soper,
A. E. Henze, Frank M. Perley, Aubrey
o. Dooley, Richard A. Norris, Robert
H. Lacey, Walton L. Sanderson and
]. Earle McGeary
Special guests, who included many
bank presidents and vice presidents,
were: Corcoran Thorn, j. F. Campbell
M. D. Rosenberg, G. F.. Burton, Frank
J. Stryker. NJ F. Calnan, L. P. Nc
Lachlen, Willard G.. Barker, H. H. Nc
kee, H. P. Galley, George o. Vass
John A. Reilly, Francis G. Addison
jr.; Ord Preston, and George M
Fisher.
William H. Laughlin, the chapter.
incoming president; Joseph R. Fitz.
patrick, new first vice president, anc
Francis E. Robey, second vice presi.
dent, were also present. It was thu
first banquet Of the kind ever held.
Vandoren on Bank Program.
w. T. Vandoren, vice president ant
cashier Of the Liberty National Bank
will address the convention Of the Dis
trict Of Columbia Bankers Associa
ton, which convenes on Thursday o
this week, on 1.-THE Corporate Fidu
ciary."
Paul J. seltzer, president Of tn
Washington Chapter Of the America,
Institute Of Banking, will also ad
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