COLUMBIA LIBRARIES OFFSITE AVERY FINE ARTS RESTRICTED iiiiiiiiin AR01413350 REPORT OF THE TRUSTEES OF THE NEW-YORK LIFE INSURANCE AND TRUST COMPANY ; MADE TO THE CHANCELLOR OF THE STATE OF NEW-YORK, MARCH 29, 1831* ALBANY : PRINTED BY CR03WELL AND VAN BENTHUYSEN. 1831. .M55 TRUSTEES. Wm. Bard, Stephen Van Rensselaer, Isaac Bronson, James Kent, Edw'd. C. Delavan, Gulian C. Verplanck, Abraham Bloodgood, Th's. J. Oakley, __John Jacob Astor, James McBride, John Hone, John Duer, Walter Bowne, Stephen Whitney, E. A. Nicoll, See'y* NATH'L. PRIME y John Mason, Th's. W. Ludlow^ Benj'n. F. Butler, Wm. B. Lawrence, Jonathan Goodhue* Sam'l. Thompson, William James, Peter Remsen, Isaiah Townsend, Benj'n. Knower, John Rathbone, Junior^ Nicholas Devereux. Wm. Bard, Pres 9 'L Avery Architectural and Fine Arts Library Gift of Seymour B. Durst Old York Library &§:sZ^ , . ^ Jjj L REPORT. The Trustees of the New-York Life Insurance and Trust Company, in answer to the Chancellor's order of the 2d of March, exhibit the following statement. The capital of the corporation is a million of dollars, divided in- to shares ol one hundred each. The whole of the said capital is to be invested in bonds and mortgages, on unincumbered real estate within the State of New-York, and at least one half of it is to be constantly invested on real property without the limits of the ci- ty and county of New-York. The real property to secure any investment of capital, in every case, is to be double the sum charged thereon. The books for subscription to the stock were opened uii the 7ch of May, 1830. Ten per cent on the amount subscribed, was paid in on that day. Desirous to leave nothing undone towards the faithful performance of the duty imposed on them by the act of incorporation, of investing their capital on real security, the trus- tees, at a meeting held the 12th of April, 1830, twenty-five days before the money was paid in, appointed Isaac Bronson, Stephen Whitney, Nathaniel Prime, and Thomas W. Ludlow, a committee, the president being a member of all committees, to invest such portion of the moneys as was directed to be paid on the capital stock at the time of subscription. At the same time an informal advice was given to the committee, not only to engage for loans to the amount of $100,000, but to contract for other loans, if good ones should offer, and if necessary, to borrow the money to com- plete them, till the remaining part of the capital should be paid in. The trustees went farther ; and considering that if the stockhold- ers should all take advantage of the permission given them in the charter, to secure their stock by their own bonds and mortgages, on unincumbered real estate, that it would be of little importance to the company what interest the bonds bore, and considering it 4 their duty to invest their capital as rapidly as they could, on the terms the Legislature prescribed, the trustees, at a meeting, held the 7th May, 1830, Resolved : 1st. That the whole amount remaining unpaid on the stock sub- scribed in this company, be paid to the president thereof, at the office of the company, on or before the 1st day of October next, on pain of forfeiting the payments already made thereon, and that due notice be given of this resolution. 2d. That any stockholder may, on or before the said first day of October next, secure the amount to be paid by him in pursu- ance of the foregoing resolution, by his own bond, payable in one year, with interest half yearly, at five per cent, w hich bond shall be secured to the satisfaction of the committee of investments, by mortgage on his own real estate, or by the assignment of other bonds and mortgages, and if the bonds so assigned shall bear a greater interest than five per cent, the surplus of interest shall be refunded, from time to time, to the said stockholders respectively, if any such surplus shall be actually received by the company. The trustees were induced to make the above resolve, from the representations of the loaning committee, who, at a meeting held on the 6 th of May, after mentioning certain loans that had been applied for, go on to say, " Though the committee, in agreeing to loan the above sums, believe the property offered to be ample se- curity for the money advanced on it, and that in each instance it is worth double the amount loaned, yet they have to state, that the proposals they have received, with the above exceptions, have not been such as to encourage them to hope that they will have offered to them, particularly in the city, and of a character per- fectly satisfactory, proposals for loaning their capital at the usual rate of interest, and on the terms the charter permits. The inac- tivity of commerce has made money more than commonly plenty, and the charter requiring not more than one half of its value should be loaned by the company on property, prevents the best proposals being made. It is of the first importance, for the repu- tation of the company and to its security, that its capital should be disposed of in the most unexceptionable manner, and the com- mittee have given their anxious attention to plans for securing ef- fectually this desirable object. The committee recommend the board's offering, as an inducement to the subscribers to the stock, themselves to secure the capital, that they shall be allowed each of them to pay for the stock held by them, in bonds and mortga- 5 ges at five per cent, with the condition that if the bonds and mort- gages are not given by the subscriber himself, he shall secure them by his own guarantee. To enable this to be done according to the terms of the charter, it is recommended that it be ordered that any stockholder, wishing to secure the amount of his stock sub- scribed, shall, before the first day of July next, sign a contract himself, or by his agent, with the company so to do, and that each stockholder shall, in the first instance, have the right to give a bond and mortgage in the city, or in the country, in the order in which he subscribes the above agreement, till $500,000 is secured in the city or in the country, and then in that one of them only in which there shall remain a deficiency." Accordingly, by order of the board, the following notice was published in several of the city papers, and in the state paper. " Notice is hereby given to the stockholders of the New- York Life Insurance and Trust Company, that according to previous notice, each stockholder will be allowed to secure the amount due on his stock on the first day of October next, as stated in the re- solution of May 15th, 1830, and inasmuch as the charter requires that one half of the capital should be invested in the country, further notice is hereby given, that each stockholder will be per- mitted to secure the amount due on his stock, either in town or country, in the order in w hich, after the 16th day of July, he shall declare in writing, at the office of the company, which he will do ; and when a number of stockholders have so declared their inten- tions, sufficient to make the sum secured in the country and what is already so secured, equal to $500,000, then the remaining stock- holders will only be allowed to secure in the city ; and if a number of stockholders first elect to secure in the city what is due by them sufficient to make the amount to be secured, with what is already then secured, equal to $500,000, then the remaining stockholders will be allowed to secure in the country only. And notice is fur- ther given, that each stockholder determining to secure the amount due by him, must, previous to the first day of October, satisfy the committee as to the amount of the security he offers, and the coun- sel of the board as to title, or the bond and mortgage he offers will not be received in payment on that day. "The purchasers of stock after the election is made, will take it subject to the election of the stockholder from whom the purchase was made." 6 This advertisement, and the previous resolutions, induced nine- teen of the stockholders only, to take advantage of the offer made them. Money was so abundant in the market, that even the offer of receiving in payment their bonds and mortgages, at five percent interest, did not afford a sufficient temptation to induce its general acceptance. Ten per cent had been paid on subscription to the stock, In addition to these measures, the trustees, at a meeting, on the 16th June, as soon as they had time to make the proper inquiries, appointed two gentlemen in Onondaga, two in Ontario, one in Tioga, one in Columbia, one in Greene, one in Dutchess, and one in Oneida, through whom applications might be made to the com- pany for loans, and in whose opinion as to the propriety and safety of the loans the trustees had confidence. Since then they have appointed other gentlemen, in several other counties, to act in the same capacity. To all or most of these, it is believed, they stated the desire of the trustees to loan their capital as soon as it could be done safely and securely, and their anxiety to receive advanta- geous and suitable applications. Notwithstanding their exertions, and notwithstanding no loan believed to be sufficiently secured had on the first of March been rejected, that investment is not yet completed, although it is believed it will be, or very nearly so, when all the loans agreed to shall be formally concluded. The following is a statement of all the investments of capital completed on the first day of March, 1831, and of the amounts loaned in each county as nearly as can be ascertained. The loans being generally for one year, with the understanding that they will be continued as long as convenient to the party borrowing, and while the security remains the same it was at the time of making the loan, and the interest regularly paid. Nineteen stockholders secured Cash paid in, $100,000 179,600 720,400 $1,000,000 New-York, $118,400 do to stockholders, 73,650 27,514 78,950 10,000 Albany, do to stockholders, Kings county,. 7 Columbia, $59,019 Ontario, 95,095 Westchester, 11,700 Putnam, 2,000 Oneida, 25,520 Tompkins, about 10,450 Madison, 2,500 Erie, 40,200 Delaware, 600 Monroe, 45,350 Oswego, 12,200 St. Lawrence, 2,300 Saratoga, 18,000 Rensselaer, 3,000 Livingston, 17,650 Steuben, 2,250 Franklin, 5,000 Washington, 4,000 Wayne, 23,229 Cayuga, 8,125 Broome, 1,000 Dutchess, 20,800 Seneca, 12,475 Sullivan, 500 Yates, 11,815 Tioga, 7,150 Montgomery, 9,500 Otsego, 8,000 Herkimer, 9,600 Greene, 3,000 Orleans, t 1,000 Niagara, 4,400 Jefferson, 1,000 Chenango, 1,950 On the first of March, therefore, $785,764 were invested ac- cording to the requirements of the charter; since then a further sum of $36,136.14 has been invested, leaving still $178,099.86 of the capital uninvested. This last sum the trustees believe will also be invested in the course of a short time. They have actually engaged to loan be- 8 yond this sum, but it frequently happens that applicants omit to complete the loans for which they contracted, and it is not im- probable there may be a failure of some of the loans now pro- mised. The trustees have done their best to accomplish the in- vestment of their capital rapidly and securely, and believe that the Chancellor will see in the above detail, that their exertions have been unremitting. In commencing business, and in fixing the rules by which the institution should be governed, the trustees have been anxious to confine their operations to the important objects they had in view when they requested a charter from the Legislature. They had no wish the company should be made use of as a place of deposit for the money employed in the mercantile business of the city or country. It was their object to afford to individuals the means of safely and profitably employing funds destined for the support of children, women, and families ; funds in the hands of trustees, or waiting the decision of courts ; funds placed with them by order of the Court of Chancery ; funds which might be temporarily unem- ployed, and seeking future employment, or placed with them by the wealthy for the purposes of security and income. That they might attract these funds, the trustees adopted at a meeting, the 6th of May, 1830, the following by-law : No sum of money of a less amount than $100 shall be received in deposit, nor paid out, unless as the balance on an account. And at a meeting held June l£th, 1830, the following by-laws: 1st. All moneys deposited in trust for a shorter term than one year, shall be deposited for a certain number of months, not less in any case than two months from the date of the deposit. 2d. Interest at the rate of three per cent per annum will be al- lowed on moneys not deposited for a longer term than four months. Where the term shall exceed four months, and be less than a year, four per cent will be allowed. Where the deposit shall exceed a year, the rate of interest shall be settled by special agreement. 3d. In all cases where the moneys in trust shall not be withdrawn at the expiration of the trust, they shall remain with the company for another period of not less than thirty days, and be allowed the same interest as if originally deposited for the extended period. 9 4th. When the trust shall exceed a year, interest may be made payable before the principal shall become due, aunually, half year- ly, or quarterly, as may be agreed on. 5th. When the trust shall be for a shorter term than a year, no interest will be paid until the principal shall become due. 6th. When moneys so deposited in trust for a period less than a year shall have remained in deposit for sixty days, the same may be withdrawn at any time thereafter, and before the period for which the deposit was originally made ; but in such cases, no inte- rest will be paid on such deposit. 7th. The above conditions shall not extend to moneys deposited by order of the Court of Chancery, or other court, on which mo- neys interest will be paid according to the terms of the charter. Further to induce long deposits, the trustees at their meeting the 4th of January, 1831, determined that they would allow four and one-half per cent for moneys deposited for a year and over. The trustees also resolved at a meeting held on the 1st of Feb- ruary, that no deposit over $1,000 should be withdrawn without three days notice. By the general observance of these rules, the trustees find their deposits are of the character they hoped they would be. On examination of their books, it appears that on the first of March they had in deposit, $197,628 00 67,828 00 20,132 25 24,716 00 320,000 00 16,064 00 74,828 00 22,650 00 2,000 00 Thirteen deposits for children, to accumulate, 4,484 12 5,000 00 Amount carried forward, 2 10 Amount brought forward, $ From individuals not known, and believed, with two exceptions, not to be merchants ; one of those two declaring that he deposited the money to pay for a house in the spring, the other that he deposited it for a friend, . . 157,295 94 $912,626 31 It might be supposed that the above sum of $320,000 deposited by country banks, if not placed in this institution, would have been deposited in the banks of the city ; but this is at least doubtful, many of the city banks, it is believed, refuse to allow any interest on balances in favor of country banks, and the funds in question would have been otherwise employed 7 or would have remained wholly unproductive. The advantages derived both to the banks and to the public from this institution consenting to receive and allow interest on deposits of this character, are too obvious to re- quire to be stated. It is an arrangement which, whilst it is cal- culated to add greatly to the general security of the banking sys- tem, tends not to diminish but to increase its legitimate profits. Another view of these deposits confirms the fact, that none of them are of a mercantile character. Merchants require the com- mand of their money. The nature of business requires that its funds should be forthcoming on demand. Money, therefore, which is put out of the control of its owner for any length of time, cannot be the money of commerce. The books of the company show that the deposits, on the 1st of March, with the company, w ere For sixty days and over, ► $27,012 45 Five months and over, 844,188 38 One year and over, 36,936 36 To accumulate for children, 4,489 21 $912,626 31 A remark may here be made which will account for the large amount deposited for five months and over. The highest interest the company offered in the commencement of its operations, w r hile they were endeavoring to ascertain what their rules ought to be, was four per cent, and to that interest a party had a right who de- II posited for five months. The consequence was, all deposited for five months, retaining the control over their money after that pe- riod. It may be necessary to explain farther why the deposits are for five months and not four. It will be perceived that the rule is, " where the term exceeds four months, and is less than a year, four per cent will be allowed." It is another rule, that " all mo- neys in trust for a shorter period than one year, shall be deposited for a certain number of months." Therefore, to obtain an interest of four per cent, the deposit must be for five months. The in- crease of interest for deposits of a year, has had the effect of in- creasing those deposits, and will, in all likelihood, diminish those of five months in proportion- An evidence of this is, that $330,336 of the deposits of five months, though the period of deposit has expired, have not been withdrawn. They will probably be continued at the rate of four and one-half per cent, when it is more generally understood the company gives that interest : At present they may be withdrawn after thirty days, on demand. On the 1st of January, the deposits for a year amounted to $2,541; on the 1st of March, to $36,936.36. The increase of yearly deposits w ill effect the object intended, and enable the com- pany, with safety, to loan a greater proportion of their funds, both in city and country, on bonds and mortgages. The company's books show that the largest amount of monthly deposits was in the commencement of their business, and that with the exception of deposits from banks, they have gradually decreas- ed since. Whan the company began its operations, considerable funds in the hands of executors and trustees were probably wait- ing an investment. Payments on account of deposits in trust. In June, $ July, August, 3,476 23 September, « , t < e < 19,032 57 October, 30,124 52 November, 29,130 00 December, 27,890 00 January, 43,811 00 February to 1st March, 20,100 00 12 Deposits in trust received. In June, $49,800 00 July, 251,202 52 August, 95,159 45 September, 74,305 65 October, including $50,000 deposited by bank,. . . 147,130 65 November, 86,018 08 December, including $200,000 deposited by bank, . 260,433 47 January, including $70,000 deposited by bank, . . . 1 16,896 94 February to 1st March, 39,401 50 Having thus shown the manner in which they have disposed and are disposing of their capital, and the character and nature of their deposits, the trustees beg leave to show the manner in which they have disposed of those funds which have been placed with them in trust. By their charter, the trustees are authorised to invest the mo- ney received by them in trust, in the public stocks of the United States or of any individual State, or in the stock of any incorpo- rated city, or of the Bank of the United States, or in such other real or personal security as they may deem proper, but the said company shall not hold stock in any private incorporated compa- ny, beyond twenty-five thousand dollars. The most suitable and appropriate security for moneys depo- sited in trust, the trustees Believe to be real security, and it has been the uniform sentiment expressed at the board, that they should invest such proportion of their funds as they could with safety to themselves and to the public, in bonds and mortgages. They accordingly loaned, some months since, a portion of those funds, amounting to $30,300, on bonds and mortgages, and have, for several weeks, been negotiating another loan which, since the first of March, has been completed, amounting to $130,000, $90,000 of which is to be paid in the course of the month of March, and the balance in proportion as a certain building to be erected in the city of New-York advances. If the trustees have not gone farther in disposing of their trust money on real security, it has arisen from the circumstance that their whole exertions have been direct- ed to investing their capital. This was the first great object, and every loan thought worthy of attention, where possible, was ap- plied to capital. In loaning trust moneys upon real security, the trustees have determined, unless where the security is most un- IS doubted, as a general rule, to follow the provisions of their char- ter in relation to the capital, and to require that the property shall be at least double in value the sum advanced. No suitable loans of this description, on the 1st of March, had been rejected, but all that had been made had been absorbed by the capital. Had it been practicable to extend their loans of trust moneys upon bond and mortgage, the trustees would have felt it their du- ty, in the infancy of the institution, to have abstained, in a great measure, from loans of this description. Such loans it is always expected, will be permitted to remain for a considerable period, and they are thus by their character placed out of the control of the trustees, as funds applicable to payments which the company is constantly bound to meet. It is obvious that only that propor- tion of the trust moneys can be invested in permanent loans which can be relied on as a permanent deposit, and what that proportion is, time and experience are requisite to show. The trustees would, therefore, have been restrained from extend- ing their loans of this description, by the fear, whilst the institu^ tion was young, before the character of its deposits was known, while the great proportion of them was for five months, when ex- perience had not taught whether they were intended for longer continuance, nor what might be calculated on as the average of deposits, and while the company was liable to calls at short no- tice, that they might be placed in temporary difficulty, and be obliged to urge their credit for the purpose of meeting the de- mands made on them. It is clearly the interest of the company to invest on bond and mortgage. Beside the better security, a high- er interest is obtained both in city and country for loans on bonds and mortgage, than for loans on personal security in the city, where vast capitals in the hands of individuals, imported capital from Boston and other cities, the funds of insurance offices, banks, and other companies, coming together in the market, create a competition, and reduce interest to the very lowest rate. For these reasons the trustees have been anxious to invest their trust money in bonds and mortgages, and to go as far in doing so as they can with prudence. But were they to do it hastily, and before they had ascertained how far they could go with safety, they might be brought into the necessity of borrowing large sums, which would be injurious to their reputation, or of oppressing 14 their debtors on bond and mortgage, by demands for immediate payment, which they earnestly wish to avoid. In the commencement of its operations, the company had_ thrown upon It a large amount of moneys, which had probably been lying idle for the want of some safe investment. This, com- ing at the same moment when they were engaged in seeking in- vestments for their capital, forced upon the company the necessi- ty of investing a larger proportion of their trust money in personal securities, than it will be their interest or inclination to do in fu- ture. That the investment of a certain proportion of their funds in personal securities, has been, and will at all times be necessary, to the utility and safety of the company, and that its business cannot be conducted without the power to do so, it is scarcely neeessary to show to those acquainted with the operations of a monied in- stitution. The trust company undertakes to allow an interest on all mo- neys deposited with them. To enable them to meet the payment of this interest, the trustees must find an immediate employment for the funds left with them, nor could they afford to wait the slow progress of investment in bonds and mortgages. How slow this is, will be seen by a reference to the statement which has been made of the progress of the company in investing the capital. The deposits in trust amounted, on the first of March, to $912,- 626.31 ; the interest on almost the whole of this allowed to de- positors, is four per cent, and amounted on the 1st of March, to about $12,462.20. What would have been the situation of the company had the trustees allowed this money to lie idle, or had they been forced to wait until they could have disposed of it on landed security ? It is not difficult to see that a dependence on investments in real securities alone, would, without reference to other objections, by the mere operation of an interest accumulat- ing against it, lead to its ruin, The trustees, at one of their earliest meetings, took into consi- deration the subject of investments in personal securities. The first question to be decided was, whether it was prudent for them in the situation in which the stock market then was, to 15 invest in such stocks as they were authorised to invest in, and the trustees decided that it was not. It is well known, that owing to the increased capital of the country, the very low price of every article of commerce and ne- cessary of life, and to the great accumulation in New-York of fo- reign capital from Boston and other cities, as well as from Europe, there has been, ever since the company began its operations, more money in the New- York market than its wants required. The holders of this capital, a great part of it intended for future mer- cantile operations, desirous of finding for it a temporary employ- ment, have contributed, by contending for them, to raise all the stocks of the country to an unusual price, and to one which they will not probably sustain, should there be a favorable change in the commercial concerns of the country. That such a change was not improbable, the trustees determined from the disturbed state of Europe ; nor did they think it impossible that a very short time would elapse before a call might be made for all the resources of our merchants to supply the armies and population of that part of the world with those necessaries which our fertile and happy country would abundantly supply. Should this be the case, it was the opinion of the trustees, that the stocks of the country would be thrown in large quantities into the market, and in the struggle of the mercantile portion of society to realize their capi- tal, that they would necessarily fall. The trustees, on examina- tion found, that what with the expenses of brokerage in the pur- chase and sale, and what with the high price of the best stocks, there were few the purchase of which would enable them to re- alise the interest they were paying to their depositors. That be- sides this, they must run the risk, almost amounting to certainty, of their future fall. They determined it was their duty to be safe, that they were bound to run no risk which they could avoid, and that the reputation of the institution forbade their entering, on any occasion, into the field of speculation. They, therefore, determin- ed not to become the purchasers of stock, excepting in one in- stance, where a whole loan to the city of Albany, amounting to $60,000, bearing an interest of five per cent, was offered to them on the 21st of last July, at an advance of one per cent. This be- ing a stock not in the market, perfectly secure, where the interest, though small, would be paid regularly, and offered nearly on the original terms of the loan, the trustees considered a prudent and safe investment, and therefore took it from the party who had 16 contracted for the loan. With this exception, the trustees have invested none of their money in stocks. Had they done so, it must have been with the intention either of holding the stocks purchased by them as a permanent investment, and then, after having bought when the market was the highest, they must have run the risk of a depreciation, and of the accidents attending that species of property, or they must have done so with the in- tention of watching the rise and fall in the market, of selling, buy- ing, and exchanging, as their judgment or information might di- rect, and of entering upon all the chances and anxieties of stock- jobbers. The first, as has already been shown, would have been opposed to that safe system which it is the wish of the trustees to pursue, and the latter would have been inconsistent with the ob- jects and principles of the institution. That it would be unsafe to invest the whole of their deposits in real securities while they were liable to calls at the end of a few months for the deposits of individuals, and w hile they were liable on demand for deposits made by order of courts or the Chancellor, which they had subjected themselves to for public convenience. The impossibility of investing on real estate rapidly, and the con- sequent ruin if attempted, together with the circumstances which made it imprudent to purchase stocks, rendered it incumbent on the trustees to seek investments on other personal securities. As to their power thus to invest the funds in question, the trus- tees neither did nor could entertain a doubt. The terms of the charter are express and free from all ambiguity. As the section which authorises the trustees to invest the moneys received in trust in real or personal securities, had already given a qualified right of investment in every species of stock, public and private, the personal securities referred to could in their judgment only mean bonds, promissory notes or other evidences of debt, creating a per- sonal liability, and not accompanied by a pledge of real estate. There is no other construction that can give effect to the words, nor (until rumor informed them it had been,) did the trustees sup- pose that either the existence of this powor, or the propriety of its exercise, could ever be drawn in question. The trustees, therefore, took into consideration the safety of loaning on the personal security of individuals, and they came to the conclusion, that the personal security of men of known charac- ter and wealth, especially when the loan was made payable within 17 a moderate period, was among the safest and best which the coun* try afforded, and if not quite equal to the security of real estate, approaching very near to it. On the receipt of money by the company, it has been the prac- tice to find for it an immediate investment, by offering it at a low rate of interest, frequently at four per cent on a note payable on demand, and generally secured by stock. In this situation it has been permitted to remain till an opportunity has offered of dispo- sing of it on more favorable terms. When such opportunity has occurred, the money has been called in, and beside loaning on real estate, the trustees have loaned on the simple bond of the party, or if notes have been offered them, they have taken notes, deduct- ing the interest at the time the note was taken, but without the responsibility of the individual to whom the loan was made. They have also loaned on notes, the interest payable at the end of the term for which the notes were given, taking as collateral security either some stock considerably below its market value, or a num- ber of notes of individuals, or a single note if it was believed to offer an ample and sufficient security. All notes belonging to the com- pany are placed in the Manhattan bank for collection ; if the notes given or the collaterals are paid, the amount is credited to the borrower, and his debt cancelled or returned him. In these, and these modes only, have the company invested in personal securi- ties. In all instances they have been satisfied, provided they ob- tained perfect security with a moderate rate of interest, often four per cent, generally five or five and one-half; nor have they, in any one instance, where they have invested money in personal securi- ties, received beyond six and one-half per cent, and that only on a small amount where the length of the loan was eight and ten months, and the consequent increase of risk warranted them in doing so. That the trustees have not been mistaken in the secu- rity they have taken, is proved by the circumstance that they have not lost a dollar, in any of their transactions, since the commence- ment of their operations. On examining the books of the company, it will be found a large amount has constantly been loaned, payable on demand, secured by stocks which may be considered in the nature of a deposit. Of this class there was loaned in the month of June, July, $8,000 00 126,832 00 3 18 August, $92,874 96 158,675 52 293,729 06 230,879 16 253,543 19 182,168 76 152,100 76 September, October, .. November, December, January, . , February, Besides these, the greatest portions of the company's loans have been made on notes having 4, 5, 6, 7, 8, 9 and 10 months to run. On the 1st of March, the notes to the company were in the fol- lowing proportion : Such long notes, though inconvenient if not unsafe in the opera- tions of banking, are not so in the operations of a trust company, where the deposits are for long and limited periods, where an inte- rest is paid for such deposits, where no notes are issued, where there is no circulation, where nothing can be withdrawn without notice, where there is no risk of sudden demand, and where the capital is not only paid in, but invested on real security ; such notes to such a company have no danger in them, while a bank which deals in them is continually threatened with calls for funds, placed beyond their reach by this disposal of them on long loans. In further reply to the inquiries made by the Chancellor, the trustees answer : 1st. That it is believed that much the greatest portion of the stock is out of the market, and held by individuals who intend holding it as a permanent investment. That the present number of their stockholders is 131, of whom 27 are females, trustees or miners, holding 734 shares ; 25 are residents out of the city, hold- ing 2,638 shares, and the remainder are chiefly, it is believed, resi- Notes of sixty days, $90,558 115,925 123,323 151,082 231,193 146,590 68,707 44,780 6,364 Ninety days, . Four months, Fve months, . Six months, . . Seven months, Eight months, Nine months, Ten months, . dents of the city of New-York, though many are not known ot ascertained to he so. 2d. That the company hold no real estate whatever. 3d. The company had, on the 1st of March, insured 37 lives, and have received for insuring the same, $6, 817. 13; should all the parties die within the period of insurance, they will be liable to pay ninety-seven thousand nine hundred dollars. It will be proper here to mention, that the sum of $6,817.13 is not the an- nual amount paid for the insurance of ninety-seven thousand nine hundred dollars, but includes the full amount paid down on the insurance of the whole lives of two of the parties insured. This branch of the company's business has received the unremitting at- tention of the trustees, and they have been gratified in finding both by the gradual increase of insurance, and the inquiries made at the office that it is attracting more and more public attention. In a subsequent part of this report it will be found that additional lives have been insured since the 1st of March. It cannot be doubted but as the security which insurance offers to families, and the comforts it brings to old age are better understood, the com- pany's utility will be equal in this with what it is in the other branches of its business. It was to be expected that some time would be required before information could be generally extended on a subject so new. The progress of the Equitable Society in London, which now secures comfort and independence to a large population, was not greater in its commencement than that of the New-York Life Insurance and Trust Company. Its actuary, in a short history of that society, published in 1829, states, "that at the first meeting at the White Lion, in Cornhill, only four assuran- ces were made ; and in the course of the first four months, their number did not exceed thirty, nor did the whole of the sums as- sured amount to more than £5, 100." This company has not been in operation a much longer time, has insured more lives and to four times the amount. It has been suggested that the company's tables are higher than the safety of the company requires. The subject is too important a one not to have attracted the serious at- tention of the trustees. If the tables are too high, it prevents in- surance ; upon the number of the insured depends the safety of the company. While it is few, the risk is great It is decidedly the interest, therefore, of the company to encourage insurances by making the tables as low as by any prudent calculation they can be made. The tables by which the company have been governed 20 in their insurances, are the same with those which have been used for fifteen years in Boston and Philadelphia, and for 100 years by the Equitable in London. The insurance of lives was a subject new to the trustees as well as to the State, and in the commence- ment of their operations they were unwilling to vary from what the experience of others deemed prudent in fixing the rate of in- surance. Having been informed that the Philadelphia company proposed to lower their rates, the president of this company has had a correspondence with the actuary of the Philadelphia office on the subject of the rates which it would be prudent to adopt in this country. He has also received from the actuary of one of the offices in Paris, his manuscript calculations and observations on the rates used there. The trustees only wait the fulfilment of the promise of Mr. Ro- berts, the actuary in Philadelphia, to forward to them his views and corrected tables, to decide on the proper alteration in their own, if prudent to make any. The whole subject is at present under the consideration of the board, and of the committee ap- pointed by the following resolve : At a meeting of the trustees held 3d day of September, 1830, Resolved, That the duty of advising the president in relation to the insurance on lives and granting annuities be performed by the committee of trusts, consisting of James Kent, Gulian C. Verplanck, John Duer, and Thomas J. Oakley. 4th. The company has purchased no annuity. 5th. The company has sold an annuity amounting to $150 per annum, and received for the same $1,185. 6th. The company had received on the 1st of March, from the Court of Chancery, its clerks and surrogates, in deposit, $20,132.25, which amount has been blended with the other moneys in trust, is payable on demand, and bears an interest from the day of deposit, and with the other moneys in trust, is secured by the capital of the company. 7th. The company has never drawn a bill of exchange, nor pur- chased a bill, nor taken a foreign bill as security. 8th. The company had invested on stock and personal securities, on the 1st March, $1,155,594.92. The Chancellor has ordered, " that if the trustess shall be able within the time limited for furnishing the statement, that they also 21 specify particularly the amount of each loan made by them, the time when made, the nature of the security taken therefor, and the time when the same becomes payable or will become payable. The trustees believe they have answered all that is material in this order, though they have not added the specific amount of each loan, nor the time when made, nor the time when each will become payable. To make such a statement would require the copying a large portion of one of their books, and considerable time and labor. The trustees will, however, immediately direct it to be done, should the Chancellor still desire it, and not think sufficient the general information that has been given. The trustees further add, that the copy of the by-laws sent with this report, signed by the president, is a complete copy of all their by-laws, and the copy of the resolutions also sent, and signed by the president, is a copy of all the resolutions passed at the board which the trustees think important, or that the Chancellor could wish to have. The trustees intended, before the first year of the company's operations expired, to have requested of the Chancellor his direc- tions as to the manner in which he wished they should make their annual report, and to have solicited from him the appointment of one of his masters, to examine and verify the report when made. With regard to the profits of the company, it is impossible to say what they will be. If the company divide the first year of its operations, six per cent, it will be the extreme of what they will be able to do, and more than they are likely to do. Its perma- nent expenses are more easily ascertained. The expenses of the company are : Cit y tax, $4,000 00 Salary of president, 2 , 500 00 secretary,.... 2,000 00 " cler k, 500 00 Rent of building, unusually and accidentally cheap, 1,000 00 Stationary, fuel, postage, and extra expens- es, may be put down at, 500 00 $10,500 00 22 The counsel and attorneys to the board receive no salary, nor any other compensation than what they receive in the usual course of their professional business. The safety of the company, and the security of its investments on real estate, depends altogether on the title being perfect of the party applying for a loan, to the property he proposes to pledge, and on its value. It has been thought by the trustees, just and reasonable, to adopt the univer- sal practice of the city, and of the country, and to require of the borrower that he should bear the expense necessary to show his title to be perfect, and free from all incumbrance. Besides the pro- priety of this rule, a contrary practice would expose the compa- ny to the imposition of examining a great number of defective ti- tles, and possibly for no purpose but to have their errors ascer- tained that they may be corrected. With regard to the agent of the applicants to the company for loans, whether it be one of those gentlemen whom the trustees have pointed out as persons in whom they have confidence, or whether it be one of the borrower's own choice, the trustees have no means of controlling him in charging for his services, but by their urgent advice to the former, that he will make his charges moderate, and not beyond what a proper remuneration makes ne- cessary, and this the trustees are assured is done. With regard to the counsel of the board, on whose learning, vigilance, and accuracy, the best interests of the company depend, the trustees have been informed and believe, that their charges are below what is usual in the city, and that in no instance have lhey asked or received more than a reasonable and moderate com- pensation for any service rendered by them. It must, the trus- tees believe, occur to others, as it does to them, that whatever .confidence may be due to the talents and learning of the bar of this State, it would be the height of imprudence in them to trust the examination of titles, intricate as they frequently are, to coun- sel selected by the applicant. They have thought it their duty to appoint their own counsel, one in Albany, and one in New- York, and to make them responsible for the titles to the property on which loans are made, and for legal advice in the affairs of the company. That they should pursue this course, the trustees thought they owed to their reputation, to the interests of the stockholders, and still more to the interests of those who have trusted their property with them, and who place confidence not 23 only in the integrity, but in the ability with which the affairs of the company are managed. In selecting their own counsel, and depending for legal advice on them alone, the trustees believe they will meet with the approbation of the Chancellor, and of all prudent and candid men. Desirous of giving every information to the Chancellor within their reach, the trustees venture to state to him the proceedings of the company subsequently to the first, as low down as to the 23d day of March, which on examination is found to be as fol- lows : March 24, 1831. Additional Statement. Deposits of Trust, since 1st instant. By commissioners, $59,500 00 Payments on account of depo- Trustees, 6,600 00 sits in trust, since the 1st in- Master in chance- stant, $53,556 00 ry, 13,000 00 Register in do. . . 5,000 00 Females, 900 00 Individuals believ- ed not to be in bu- siness, 25,222 00 In trust to accu- mulate for chil- dren, 5 deposits, 5,843 70 $116,065 70 Insurance on life by three persons, for $7,000 ; premium rec'd, 158 40 Total amount invested on bond and mortgage, . . . . Loans on stock, payable on demand, Gold in vault, Cash in bank, $1,100,206 07 $821,900 14 108,280 00 12,175 00 157,850 93 The trustees feel their success to depend on public confidence, and on the conviction all their operations are just and prudent. 24 Mystery they avoid ; they solicit examination. And far from de- siring to hide their operations, they are pleased with the opportu- nity of disclosing them, and will at all times be willing, as they feel themselves bound, to answer every inquiry the Chancellor may think proper to make of them. With the greatest respect, By order of the trustees, WM. BARD, President. City and county of Albany, ss. William Bard, president of the New-York Life Insurance and Trust Company, being duly sworn, deposeth and saith, that the facts mentioned in the above report are, to the best of his know- ledge and belief, true. WM. BARD, President. Sworn this 29th day of March, 1831, Before me, R. Hyde Walworth, Chancellor. At a special meeting of the Board of Trustees, of the New- York Life Insurance and Trust Company, held 24th March, 1831 : PRESENT, William Bard, President, Isaiah Townsend, Benjamin Knower, William James, Isaac Bronson, Peter Harmony, Wm. B. Lawrence, John Rathbone, Jun. Thos. W. Ludlow, James Kent, John Hone, James McBride, Thos J. Oakley, Peter Remsen. Samuel Thompson, The president read to the board the report prepared to be for- warded to the Chancellor, in obedience to his order of the 2d March, 1831 : Resolved, on motion of Mr. Hone, seconded by Mr. McBride, that the trustees, having heard the report read, approve the same, and direct the president to sign it in the name of the trustees. Edw. A. NICOLL, Secretary. COPY OF BY-LAWS. 1. There shall be a stated meeting of the trustees on the first Tuesday of every month, to which a report shall be made by the president, of the concerns and business of the company during the past month; stating particularly the contracts that have been made, the sums of money that have been received, and on what account, the manner in which the same shall have been invested, and the amount remaining on hand. 2. The president may call a special meeting of the trustees whenever he may deem it proper. He shall also call a special meeting whenever any three of the trustees shall request him in writing to do so. Every stated or special meeting shall be called by a notice in writing to each trustee. 3. Nine trustees shall be a sufficient number to form a quorum for the transaction of business ; but no by-law shall be adopted, nor any change or alteration made in the by-laws before establish- ed, unless at a meeting at which a majority of the whole number of the trustees shall be present, and upon a report of a committee appointed for that purpose. 4. The president shall preside at all meetings of the trustees. He shall be, ex officio, a member of all standing committees* He shall attend the meetings of any special committee when requir- ed by the chairman. 5. The president shall have the general direction and superin- tendence of the affairs of the company ; and in all cases where the duties of the subordinate officers and agents of the company are not specially prescribed by the by-laws, or by a resolution of the board, they shall obey the orders or instructions of the president. 6. The president and secretary shall have power to make con- tracts of insurance on life, and for granting annuities in the name of the company, and to execute the same, and shall also have power to receive money in trust, where the rate of interest to be allowed shall not exceed four per cent. 7. The seal of the company shall be under the exclusive charge of the president, and shall not be affixed by him to any deed, con- veyance, or instrument whatsoever, except certificates acknow- ledging satisfaction of any mortgages, unless by virtue of a special resolution of the board. 4 26 8. The president shall give a bond for the faithful performance of his trust, with sureties, to be approved by the board, in the pen- alty of twenty thousand dollars, which bond shall be annually re- newed, and new or additional sureties may at any time be required by the board. Every bond, so taken, shall be so drawn as to re- main until another bond be substituted. 9. The following standing committees, to consist each of four trustees, exclusive of the president, which committees shall hold their offices until others are appointed in their room, shall be elected quarterly by ballot, at a meeting at which not less than a majority of the whole number of the trustees shall be present, namely : a committee of finance, a committee of investments, and a committee of trusts. 10. The committee of finance shall superintend and direct all investments that shall be made of the funds of the company other than its capital, in stocks and personal securities, and shall receive and audit all accounts against the company. 1 1 . The committee of investments shall superintend and direct all investments that shall be made of the capital and other funds of the company, in bonds and mortgages, or other real security. 12. The committee of trusts shall have the general superintend- ance of all special trusts ; and no guardianship, receivership, or other special trust shall be accepted by the president in behalf of the committee, without their approbation and concurrence, nor -without their approbation shall any moneys be received in trust on which a greater interest shall be allowed than four per cent. 13. The three standing committees shall form a general standing committee, whose duty it shall be to determine from time to time what funds of the company, other than its capital, shall be invested in bonds and mortgages, and other real securities, and what funds in stocks and other personal securities. 14. Regular minutes of the proceedings and resolutions of each committee shall be kept in books to be provided for that purpose, and each committee shall make a monthly report of its proceedings to the board. 15. No sum of money of a less amount than one hundred dollars shall be received in deposit. 16. Certificates of money received in trust, specifying the dura- tion and terms of the trust, shall be issued when required by the person creating the trust ; but in such case the moneys received 27 shall only be paid when due on the production of the original cer- tificate. 17. Separate books of transfers shall be kept, in which transfers of shares of capital stock and of certificates of trust, where the same are assignable, shall be entered by the person entitled to make such transfer, or his special attorney; but in every such transfer the certificate before issued shall be delivered up, and a new certificate or certificates shall be issued. 18. Every report of a standing or a special committee, shall be in writing, and signed by the members of such committee assenting thereto. WM. BARD, President. r RESOLVES BY THE BOARD. At a meeting held on the 1st of April, 1830. 1st. On motion of Judge Oakley, Resolved, That nine members, including the president, shall constitute a board for the transaction of business, till otherwise ordered. Held June \6th, 1830. All moneys deposited in trust, for a shorter term than one year, shall be deposited for a certain number of months, not less in any case than two months from the date of deposit. In all cases where the moneys deposited in trust shall not be withdrawn at the expiration of the term of deposit, they shall re- main with the company for another period, not less than thirty days, and be allowed the same interest as if originally deposited for the extended period. When moneys so deposited intrust, for a period less than a year, shall have remained in deposit for 60 days, the same may be with- drawn at any time thereafter, and before the period for which the deposit w as originally made, but in such cases, no interest will be paid on such deposit. The above regulations shall not extend to moneys deposited by order of the Court of Chancery, or of any other court. 2d. The president then offered to the board for their examina- tion, a device for the company's seal. The device is two concen- tric circles ; between the two, the following words are engraved : " One million capital ; New- York Life Insurance and Trust Com- pany and within the inner circle, the following words and figures are engraved : " Protection for widows, children, and old age, 1830." The same being examined and approved, on motion of Mr. Bloodgood, the above device was adopted as the seal of the com- pany. so At a meeting held the Sd August. On motion of Judge Oakley, seconded by Mr. Prime, Resolved, That the trustees residing in Albany, have the power of determining on the expediency of making all loans on real se- curity for which application shall be made to the agent of the company, at that place, and that the company will make such loans when in funds, upon the certificate of the agent, and of B. F. But- ler as to title, under such regulations as shall be prescribed by the committee of investments, and it shall always be competent for the committee of investments to determine whether the state of the funds of the company will authorise such loans. At a meeting held 1th September. The committee appointed at the last meeting of this board, to negotiate with the banks of this city, and to ascertain on what terms they will receive deposits from this company, collect their notes and transact the banking business of the company, beg leave respectfully to report : That after taking the necessary measures to fulfil the objects of their appointments, they have ascertained that no bank will agree to pay any interest on deposits; that with re- spect to the collection of monies out of the city of New- York, the United States branch bank, and the Manhattan company, offer greater accommodations than any other institution, and that those banks, as well as most of the others, without specially pledging themselves to any given amount, hold out every assurance that they will at all times afford the company any temporary loans for which they may have occasion. They would further report, that the propositions of each of the banks above mentioned, are found- ed on the supposition, that it shall exclusively do the banking bu- siness of the company. On motion of Judge Oakley, seconded by Mr. Bloodgood, Resolved, That the president be instructed to keep the bank ac- count of the company, with the Manhattan company, and that said account be kept in the name of the company. Resolved, That all moneys deposited, or otherwise, to the credit of the company, in the Manhattan bank, shall be drawn for by checks signed by the president, and countersigned by the secretary. 31 At a meeting held 4th January, 1831. Resolved, In by-law No. 9, that the words " four trustees exclu- sive of the president," in the first and second line, be erased, and the words, " of not less than four, nor more than six," be written in their place. The committee also recommended the following by-law, which was adopted. The president shall, in case of sickness or temporary absence, be authorised to appoint a president pro tern, to do the duties of pre- sident. WM. BARD, President. Filed March 29th, 1831. (Copy.) JAS. PORTER, Register of the Court of Chancery.