Repository: UIHistories Project: Board of Trustees Minutes - 1926 [PAGE 107]

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104

board of t r u s t e e s

[October 25,

Bonds secured by first lien on portion of company's properties and preceded by underlying bonds on other portions. This can be sold now without loss. W e think bond market rather high and recommend selling this and investing proceeds under general policy. 15. Public Service Company of Northern Illinois, 25 shares preferred capital stock, $2500. 6%. Purchased in 1917 at 102; present market about 92. W e are now offered "Rights" to purchase 5 shares 7 % cumulative preferred stock of this company at par. W e do not recommend the purchase of the rights. Excellent company serving territory around Chicago, under management of Samuel Insull and associates. This is not what would be called a "Trust Fund Investment." W e recommend retaining the 25 shares we now hold until stocks recuperate a little. W e would sell at 95 to 100 and reinvest proceeds under general policy. 16. Southern Pacific Company, 335 shares capital stock, #33,500. 6%. Present market 100. Would sell at par or better, and reinvest proceeds under general policy. 17. Central Illinois Public Service Company, 3 shares preferred stock, $300. 6%. This was purchased April 3, 1917, for $255. Present market about 86. W e recommend selling and reinvesting proceeds under general policy. 18. Champaign County, Illinois, Highway Bond, $1000. 5 % . Retain. As a general policy for investment of the University Trust Funds, we suggest as follows, to-wit: I. First choice. Farm loans secured by first trust deed on only Ai farms in vicinity of Urbana and Champaign; all loans subject to following conditions: (a) Loans should not exceed 5 0 % of conservative value of land without buildings. (b) Loans should be secured by trust deeds running to "David Kinley, President, University of Illinois, or his successor, as Trustee." (c) Notes secured by trust deeds should be payable to "Board of Trustees of the University of Illinois." (d) Abstract must be submitted to University legal counsel and have his written opinion thereon that title is good and merchantable, and that loan applied for is a first lien, before loan is made. (e) Trust Deed provides that grantors carry fire and tornado insurance on buildings in a good and standard fire insurance company for their reasonable insurable value, and that policies contain a clause in substance: "Loss, if any, payable to David Kinley, President, University of Illinois, or his successors, as Trustee, for the benefit of the holders of the notes secured hereby, as their interest m a y appear." 2. Second choice. Loans secured by first trust deeds on good residence properties in Urbana and Champaign, subject to the following conditions, to-wit: (a) Location must be good, in advancing part of city. (b) Abstract must be submitted to University legal counsel and have his written opinion thereon that title is good and merchantable before loan is made. (c) Loan should not exceed 5 0 % of conservative value; no loan to exceed $6000. (d) Loan should be secured by a trust deed running to "David Kinley, President, University of Illinois, or his successor, as Trustee." (e) Notes secured by trust deed should be payable to "Board of Trustees, University of Illinois." (f) Trust deed should require that grantors carry insurance on buildings for at least amount of loan, and insurance clause therein should provide in substance: "Loss, if any, payable to David Kinley, President, University of Illinois, or his successor, as Trustee, for the benefit of the holders of the notes secured hereby, as their interest m a y appear." 3. Third choice. (a) Conservative municipal bonds issued by municipalities and not overburdened with debt, and in locations where industrial prosperity is usual.