Trustees' List

In 1936 Trustee Herbert Hoover of Stanford University testified before a California court that some of the university's $24,000,000 in seasoned bonds and first mortgages should be invested in common stocks. Burden of his testimony was what already worried many another custodian of trust funds: devaluation of the dollar and inflation of bank credit had cut the purchasing power of income from fixed-income investments; currency inflation (if it came) might reduce the real value of such trust funds to a trifle.

Because the late great Leland Stanford had wisely willed his trustees great latitude in investment, Herbert Hoover and friends got permission to revise their portfolio. Meanwhile, many another trustee, bound by strict fiduciary laws and without latitude to switch to common stocks, faced an immediate menace: New Deal fiscal policy has reduced interest rates so low that with every refinancing the dollar yield of securities gets closer to the vanishing point.

To help worried trustees, the State of New Jersey two years ago enacted a law broadening the field of investment for trusts. Last week, Newark's Chancery Court upheld the legality of the law, then went further: it issued a list of common stocks in which New Jersey trustees can legally invest.

Chancery's list:

Du Pont, Monsanto, Union Carbide, General Electric, General Motors, Corn Products, American Can, International Nickel, Standard Oil of New Jersey, Texas Corp., National Steel, Liggett & Myers "B," Reynolds Tobacco "B," U. S. Tobacco, American Telephone, Consolidated Edison, Public Service of New Jersey, Eastman Kodak, International Harvester, Procter & Gamble, Sherwin-Williams, Union Tank Car, American Chicle, Beech-Nut, General Foods, J. C. Penney, Sears-Roebuck, Commercial Credit, Commercial Investment Trust, Household Finance, International Business Machines, Allied Chemical, New Jersey Zinc, Homestake, Phelps Dodge, Bristol-Myers.

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