Chap. 394.—An ACT to amend and re-enact section 5431 of the Code ot Virginia,
as heretofore amended, relating to securities in which fiduciaries may invest

funds. [H B 265]
Approved March 30, 1934

1. Be it enacted by the General Assembly of Virginia, That sec-
tion fifty-four hundred and thirty-one of the Code of Virginia, as
heretofore amended, be amended and re-enacted so as to read as
follows:

Section 5431. In what securities fiduciaries may invest——Executors,
administrators, trustees, and other fiduciaries may invest the funds
held by them in a fiduciary capacity in the following securities, which
are and shall be considered lawful investments:

First. In the bonds or interest-bearing notes or obligations of the
State of Virginia, or those for which the faith of the State of Vir-
ginia is pledged to provide for the payment of the principal and
interest.

Second. In the bonds or interest-bearing notes or obligations of
the United States, or those for which the faith of the United States
is pledged to provide for the payment of the principal and interest,
including the bonds of the District of Columbia, and farm loan bonds
issued under an Act of Congress, approved July seventeenth, nineteen
hundred and sixteen, known as the Federal Farm Loan Act.

Third. In the bonds or interest-bearing notes or obligations of any
state of the United States which has not, within twenty years next
preceding the making of such investment, repudiated or defaulted in the
payment of any part of either principal or interest of any debt author-
ized by the legislature of such state to be contracted.

Fourth. In the legally authorized bonds of any county, city or
town in Virginia, provided the said bonds are the direct obligation of
the county, city or town issuing the same, and for which the faith and
credit of the issuing county, city or town is pledged.

Fifth. In the legally authorized bonds of any city, situated in any
one of the states of the United States, which has been an incorporated
city at least twenty years and has not, within ten years next preceding
the making of such investment, repudiated or defaulted in the payment
of any part of either principal or interest of any bond, note, or other
evidence of indebtedness, and provided such city (a) has a popu-
lation as shown by the Federal census next preceding such investment
of not less than ten thousand inhabitants, and (b) that the net indebted-
ness of such city (including the issue in which such investment is
made) after deducting the amount of its water bonds and bonds issued
for other self-sustaining public utilities, does not exceed ten per centum
of the value of the taxable property in such city, to be ascertained by
the valuation of such property therein for the assessment of taxes
next preceding the making of such investment, and (c) that the
bonds in which such investment is made are the direct obligations of
the city issuing the same, and for which the faith and credit of the
issuing city is pledged.

sixth. In bonds and negotiable notes directly secured by a first lien
on real estate in the State of Virginia, not to exceed sixty per centum
of the fair market value of said real estate at the time of making such
investment, as ascertained by an appraisal thereof made by two repu-
table and disinterested persons.

Seventh. In bonds and negotiable notes directly secured by a first
lien on improved real estate situated in any incorporated city in any
other of the states which comprise, wholly or in part the Fifth Federal
Reserve District of the United States, as now constituted (pursuant to
the Act of Congress of December twenty-third, nineteen hundred and
thirteen, known as the Federal Reserve Act, as amended), not to
exceed sixty per centum of the fair market value of said real estate,
with the improvement thereon, at the time of making such investments,
as ascertained by an appraisal thereof made by two reputable and dis-
interested persons, and provided that such city has a population, as
shown by the Federal census next preceding such investment, of not
less than five thousand inhabitants.

Eighth. In the bonds of any of the educational institutions of the
State of Virginia, which have been or may be authorized to be issued
by the General Assembly of the State of Virginia.

Ninth. In the stocks, bonds or other securities of the Richmond,
Fredericksburg and Potomac Railroad Company, including bonds or
other securities guaranteed by the Richmond, Fredericksburg and
Potomac Railroad Company.

Tenth. In the mortgage bonds and secured interest-bearing direct
obligations of any railroad corporation (except street railroads) whose
railroad is located wholly or in part in the State of Virginia, provided
that, preceding such investment (a) such railroad has been in con-
tinuous operation for at least ten years, and (b) has not during such
period repudiated or defaulted in the payment of any part of either
principal or interest on any of its mortgage or other fixed interest in-
debtedness, and in addition thereto (c) has paid dividends out of
income, to the holders of all classes of its issued and outstanding
capital stock, for at least two years next preceding such investment.

Eleventh. And such fiduciaries may accept bonds of the Home
Owners’ Loan Corporation, a corporation created pursuant to an Act
of the Congress of the United States, approved June thirteenth, nine-
teen hundred and thirty-three, in exchange for bonds or negotiable notes
secured by lien on real estate held by such fiduciaries pursuant to sub-
sections sixth or seventh of this section, in any case in which such bonds
or negotiable notes are subject to such exchange under the provisions
of said Act of Congress; provided, further, that before accepting any
such bonds, any such fiduciary shall first obtain the written consent of
the beneficiaries under the trust, and provided, further, that when any
of such beneficiaries are infants or other persons under legal disability,
said fiduciary shall obtain the approval of the court in which he quali-
fied, in proceedings conforming as nearly as practicable to those con-
tained in section fifty-three hundred and twenty-one of the Code of
Virginia. In the event hereafter the Congress of the United States
shall provide by law that the United States guarantees both the prin-
cipal and interest of said bonds of the Home Owners’ Loan Corpora-
tion, then thereafter said bonds shall also be considered lawful in-
vestments for fiduciaries, and in such event the consent of the bene-
ficiaries under the trust, as provided in this paragraph of this section,
shall not thereafter be necessary.

Twelfth. Any such fiduciary may invest funds in his hands in cer-
tificates of deposits of, or savings accounts in, any bank, banking insti-
tution, or trust company, whose deposits are insured by the Federal
Deposit Insurance Corporation, at the prevailing rate of interest on
such certificates or savings accounts; provided, however, no such fidu-
ciary shall invest more than twenty-five hundred dollars of any fund
in such certificates of, or deposits in, any one bank, banking institu-
tion or trust company, nor shall the guardian of any minor so invest
any funds in his hands as such, for a longer period than six months
unless the same be first approved by the court by which he was ap-
pointed, by an order entered of record in the common law order book
of said court.

Provided, however, that the provisions of this act shall not apply
or affect investments of trust funds heretofore made by fiduciaries or
now held by such fiduciaries.