Chap. 46.—An ACT to amend and re-enact section 5431 of the Code of Virginia,
as heretofore amended, relating to securities in which fiduciaries may invest

or exchange. [S. B. 11]
Approved September 11, 1933

1. Be it enacted by the General Assembly of Virginia, That section
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 in-
terest.

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, in-
cluding 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 pre-
ceding 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 1s 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 population
as shown by the Federal census next preceding such investment of not
less than ten thousand inhabitants, and (b) that the net indebtedness of
such city (including the issue in which such investment 1s 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 pre-
ceding the making of such investment, and (c) that the bonds in which
such investment is made are the direct obligation 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 or collaterally secured
by a first lien on real estate in the State ot 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 reputable and disinterested persons.

Seventh. In bonds and negotiable notes directly or collaterally se-
cured 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 in-
vestments, as ascertained by an appraisal thereot made by two reputable
and disinterested 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.

Tenth. In the mortgage bonds and secured interest-bearing direct
obligations of any railroad corporation (except street railroads) whose
‘ailroad is located wholly or in part in the State of Virginia, provided
hat, preceding such investment (a) such railroad has been in continuous
yperation for at least ten years, and (b) has not during such period re-
yudiated or defaulted in the payment of any part of either princtpal or
nterest on any of its mortgage or other fixed interest indebtedness, and
n addition thereto (c) has paid dividends out of income, to the holders
>f 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, nineteen
hundred and thirty-three, in exchange for bonds or negotiable notes
secured by lien on real estate held by such fiduciaries pursuant to sec-
Hions sixth or seventh of this act, 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. ,

2. An emergency existing, this act shall be in force from its passage.