c< *r&.d - eCommons@Cornell - Cornell University

CORNELL UNIVERSITY
Proceedings of the Board of Trustees
FINANCE COMMITTEE.
y*-^r.
New York City, October 18th, 1815.
Present R. B. Williams, chairman, President Schurman, Mr. Shep
ard, Mr. Place, Mr. R. H. Treman, Mr. Ickelheimer.
The following was presented :
To the Finance Committee of the
Gentlemen :
Board of Trustees :
Referring to your request for an opinion respecting the investment
of funds given or bequeathed to Cornell University "intrust"
certain uses and purposes, I beg to submit the following
report :
The charter of the University provides that it may receive real and
personal property by gift, grant, devise or bequest in trust or other
wise, for the use and purposes permitted by its charter and in cases of
trust so created the several trust estates shall be kept distinct, and the
interest or income shall be faithfully applied to the purposes of such
trust in accordance with the provisions of the gift or instrument by
which the respective trusts were created. It will be noticed that the
charter does not direct the character of the securities in which the
trust funds shall be invested. The question therefore naturally arises
"
whether the gift or bequest to the University "in trust shall be
governed by the law relating to ordinary trust funds or not. A dili
gent examination of both text books and reports fails to disclose any
well established rule in regard to the investment of funds of uni
versities and colleges. The question does not seem to have engaged
the attention of the courts of our own State in any definite manner,
and only incidentally and collaterally in some of our neighboring
States. Therefore certain general principles must be invoked for a
determination of the question. It is, of course, well settled that it is
the duty of an ordinary trustee holding
for
trust funds for the benefit of
other persons to invest these funds in such securities as are recognized
by law as trust fund investments, but the question naturally arises
whether funds "given or bequeathed to an educational institution in
trust for certain purposes are so impressed with a trust character that
the ordinary rule relating to investment of trust funds applies. There-
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