HomeMy WebLinkAboutReport From Tompkins Trust Company as Executor for E. Stewart's Will and Assets - March 1954 1
As: requested by the Common Council in its resolution of March 24, 1954,
the Tompkins County Trust Company, Trustee for Stewart Park under the Will of Edwin
C. Stewart, presents the following facts as a supplement to the report made to the
Council on April 7, 1954, for the information of the members of the Council.
The Resolution of March 24, 1954, requested the Directors of Tompkins
County TXU . CcPpanr *to repot,, advise, and interpret the Stewart Will, the his-
tory of the Trust Fund, the improvements, expenditures, and investments made over
the years and the present balance thereof." At its meeting of April 7, 1954, the
Common Council was given a report showing the present balance of the Raid, a de-
tailed listing of the securities now held in the Trust, book and market valuations
of these securities as of April 1, 1954, and an estimate of the annual income to be
received from the assets now held.
HISTORY
A history of the Stewart Park Trust Fund must start with the death of the
late Senator Stewart on Sune 15, 1921. He left a Last Will and Testament, dated
June 9, 1921, which is recorded in the Tompkins County Surrogate's Office in Book
LL of Wills at page 515. Since this Will was executed only six days before Senator
Stewart's death, it clearly asserts his final intention for the distribution of his
Estate. The Will was admitted to probate on August 9, 1921, and Letters Testamen-
tary were issued on that date to Annie L, Stewart, the Testator's widow, and Ithaca
Trust Company as Executors. Although Mrs. Stewart qualified as Exeoutor, 'her poor
health during the six months that she survived Senator Stewart (she died December
12, 1921) prevented her from ever participating actively in the administration of
the Estate,
In his Will, Senator Stewart provided for bequests of cash and securities
to a number of designated individuals,. and then, by the terms of paragraph TWELFTH,
he gave to his wife the use for life of all property remaining in the Estate, and
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the right to use AMY additional sum from the principal of his Estate that Night be
necessary to maintain her in the comfort she then eaniaved, aecauee of her early
death, the provisions of paragraph TWELIM of tie Will, giving her authority to use
principal, did riot become effective. Attention should be called to the last sen-
tence of paragraph TWELFTH, which prow dca as follows: "I request soy wife, Annie L.
Steyerb, from the said income of u estate, to give annually, a SUM sufficient in
her judgment for the maintenance of my cousin, Grace L. Ely, of West Allenhurst,
New Jersey."
The inventory of the Estate was filed January 26, 1922, showing an asset
value of 001,460.07 for the gross estate, On December 31, 1923, the Tompkins
County Surrogate signed a Decree judicially settling the account of Ithaca Trust
Company, as surviving Executor. The accounting shows that the Executor was charged
with total assets of $575,597.91, the increase of $74,137.84 over the original in-
ventory value of the Estate having resulted from increases of principal and income
during the administration of the Estate by the Executor. In the accounting the
Executor is credited with
Payment$ to beneficiaries in the amount of $373,668.04,
payments to creditors totaling $18,124,89, administration and funeral expenses of
$9,989.57, commissions to the Ithaca Trust Company and the Estate of Annie L.
Stewart totaling $11,065.34, and adjustments of inventory of $3,121.55. From the
balance, the sum of $19,600.92 was available for distribution to the residuary lega-
tee less the expenses of the final accounting, and securities and other property
with a value of $140,027.60 were directed to be turned over to the Ithaca Trust
Company, as Trustee for Stewart Park,
The Decree of December 31, 1923, is interesting for several reasons. It
indicates that Riley H. Heath, attorney for the City of Ithaca, appeared on behalf
of the City, and approved the account and the Decree, his approval being noted on
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the final Decree. Furthermore, the Trustee was directed to report from time to
time progress in the matter of the sale or other disposition of the securities
which were then non-legal for trust fund investment. The disposition of these se-
curities will be referred to in more detail later in this report.
The Decree of December 31, 1923, further provided as follows:
"IT IS FURTHER ORDERED AND DECREED that the Ithaca
Trust Company, as Trustee, continue the payments
of Fifty Dollars (050.00) per month as heretofore
made, for the residue of the life of Grace L. Ely."
Miss Ely lived to be eighty-eight years of age and died in September,
1952, some twenty-nine years after the signing of the Decree. Apparently, this
provision for Miss Ely was made in response to a notarized statement to Annie L.
Stewart, dated August 9, 1921, addressed to the Ithaca Trust Company stating that
it was her "opinion and judgment that Grace L. Ely should receive Fifty Dollars
MO.) per month and not less, and that there should be a suitable increase as age
and infirmity may require." This provision of the Decree obviously carries out the
expressed wishes of Senator Stewart and his wife that the income from the Stewart
Park Fund should be the means of caring for Grace L. Ely during her lifetime, and
particularly during her' old age.
The EIGHTEECNITH paragraph of the Stewart Will provides for the so-called
"Stewart Park Fund" and reads as follows:
"From the balance of my estate at the death of my wife, I give unto the
Ithaca Trust Company, of Ithaca, New York, IN TRUST NEVERTHELESS, all the rest,
residue and remainder of my estate, to invest and re-invest as it deems for the
best interest of this Trust, the interest to be paid semi-annually for a period of
ten years, for the improvement of Renwick Park, Ithaca, New York, and at the end
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of said ten years, the balance of my estate not hereinbefore specifically expended
or otherwise trusteed, I direct to be expended for the permanent improvement of
said Renwick Park, under the direction of the Directors of the Ithaca Trust Company,
as they in their judgment shall deem best."
To carry out this provision of Senator Stewart's Will, the Stewart Park
Committee (known since June) 1928, as the Stewart Park Commission) was set up. The
records of this Commission are contained in a minute book which is maintained by,
cnd is in the custody of the City Clerk, and is a matter of public record. These
records show that the Stewart Park Committee held its first meeting July 27, 1922,
just over a year after Senator Stewart's death and a year and a half before the
signing of the Decree settling the accounts of the Trust Company, as Executor.
The first entry in the record of the proceedings of the Stewart Park
Committee states that the Committee was "created and appointed for the purpose of
considering and formulating plans for the improvement and development of Stewart
Park under the bequest therefor by the late Mayor Edwin C. Stewart." The following
persons constituted the Committee: Robert H. Tremens Franklin C. Cornell, Mynderse
Van Cleef, and Sherman Peer, representing the Ithaca Trust Company as Trustee of the
bequest; Lawrence C. Rumsey, Will M. Sawdon, Martin Conlon, and Mayor Louis P.
Smith, representing the Board of Public Works and the City of Ithaca. Although
there have been changes in the personnel of the Stewart Park Committee, and the
Stewart Park Commission as it has been known since June, 1928, it has always been
made up of four representatives of the Board of Directors of the Trust Company, and
of the Mayor and three members of the Board of Public Works, representing the City
of Ithaca.
In the original development of the Park, when lands were being acquired
and plans drawn for the ultimate development of the Park, Messrs. 0. H. Waltz,
Warren H: Manning, Carl Crandall, Dean A. W. 'Smith of the College of Engineering at
Cornell University, and Dr. Arthur A. Allen, of Cornell's Laboratory of Ornithology,
were consultants to the Stewart Park Committee as technical experts in their re-
spective fields: From the very early years of the development of the .Park, the
City Superintendent, City Forester, and the City -Engineer have attended the
Commission meetings, and their advice, -counsel and recommendations have been of in-
estimable value in bringing tho 'Park to its present stage of development. It
should, moreover, be stressed that from the first meetingoof the Stewart Park
Committee -on July-27, 1922, 'Until the present time, the representatives .of the City
of 'Ithaca and'the'Board of Directors of the Trust Company have participated equally
in the decisions relative to the development and use of the Park, and.that they have
depended'to a very 'great extent on the competent CitTofficials .who.have through the
'years served in the capacities- of superintendent, forester, and. engineer. ' While the
Commission has- not reported directly--and officially to'the. Coamon .Council, the Mayor
of the City of Ithaca has always 'been a member of the- Stewart.Park'Commission, and
has been in a position to report' to'the Common'CouncilfromAime to:.time any action
taken by the Commission.
The Commission elects its own chairman-from its membership. Since the
Will of Senator Stewart:'gives t6 the'Directors_.of the Ithaca Trust.Company the sole
' responsibility for the trusteeship-of the Stewart Park'Fund, the three chairman of
the Stewart Park Commission have quite properly been elected from those members of
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the Commission who were representatives of the Trust' Company. • Mr. Robert H.. Treman
was elected the first Chairman of the'Stewart Park Committee on August 4, 1922,
upon motion` of Mayor Smith. He served until March a, 1932,. when he resigned be-
cause of the pressure of other duties and was succeeded by Sherman Peer. The pres-
ent Chairman, Allan E. 'Treman, succeeded Mr. Peer.in 1938 and has served since that
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time as Chairman of the Commission.
At the second meeting of the Committee, held August 4, 1922, Mr. 0. H.
Waltz consulting architect, was requested to prepare a map of the lands, drives,
buildings, etc. making up Renwick Park, together with adjoining private properties.
This was presented to a meeting of the Commission held August 14, 1922, at which
time it was decided to invite Mr. Warren H. Manning, a nationally known landscape
architect of Boston, to visit Ithaca immediately for the purpose of consultation in
the preliminary study for the development and improvement of the Park property.
The first ten years of the Commissionts efforts were concerned primarily
with the acquisition of land in the vicinity of the original boundaries of the Park,
and with major improvements to the enlarged area of the Park. The purchases of ad-
ditional parcels of land were approved by the Stewart Park Commission and paid for
from the income of the Trust Fund. No expenditures of principal for permanent im-
provements to the Park were made until the end of the ten-year period referred to in
the controlling paragraph of Senator Stewart's Will and until a policy governing the
future improvement and development of the Park through the use of the Stewart Park
Fund was established by an agreement between the Common Council and the Board of
Directors of the Trust Company.
During the first ten years, various tracts of land were purchased from the
Cascadilla School Association, the Withburn Corporation, Herman Bergholtz, and oth-
ers. A total of $37,862.00 was expended from the income of the Stewart Park Fund
for the acquisition of these parcels. In addition, substantial sums were expended
from income for filling, grading, landscaping, and the many other improvements re-
quired to make Stewart Park as useful to the community as possible. During this
period there was the highest degree of cooperation between the Stewart Park
Committee, the consulting professional experts, the City's administrative officials
concerned with Park development, the Board of Public Works, and other civic boards.
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On January 16, 1929, a joint meeting of the Stewart Park Commission and
the City Plan ping Commission was held in order that the two Commissions might co- .
operate on plans for the future development of the Park. At that meeting, Mayor'
Fred B. Howe stated that in his opinion whatever development work the two
Commissions might decide on ':could best be carried out by the Board of Public Works,
since they had the organization and equipment to most efficiently and satisfactorily
carry on such work." By joint resolution of both Commissions, the Mayorts sugges-
tion that the improvement work be done by the Board of Public Works was approved,
On February 4, 1931) an important special meeting of the Commission was
held. It was attended by Messrs. R. H. Treman, Peer, Van Cleef, and Cornell, rep-
resenting the Trust Company, and Messrs. Lawrence C. Runsey, Fred C. Evans, George
S. Tarbell (Senator Stewart's attorney who drew the Stewart Will), and Mayor
Bergholtz, representing the City; also present were Superintendent Feller, Engineer
Eustance, Forester Baker, Warren H. Manning, landscape architect, and Professor A. A.
Allen, who was present to give expert advice on the development of the Bird Sanctuary.
Chairman Treman explained that this special meeting had been called because in 1931,
the ten-year period specified in Senator Stewart's Will would end and the principal
of the Trust Fund would be available for the improvement of the Park.
The records of the Stewart Park Commission show that at that meeting Mayor
Bergholtz suggested that the major portion of the Fund should remain intact and that
only the income should be used for the maintenance of the Park. The record also
shows that in the discussion which followed City Engineer Eustance questioned the
advisability of setting aside a major portion of the Fund, arguing that, if the
Park was ever to be properly improved and put in good condition, a considerable sum
would have to be expended. He argued that such a sums could not be realized from the
tax levy and would therefore have to come from the Stewart Fund. He recognized that
the exhaustion of the principal sum of the Fund in this way would require the City
to provide from taxation for the annual care and maintenance of the Park. With the
exception of Engineer Eustance himself, not a single person present at this meeting,
either among the Commissioners or among the consulting experts, was recorded as op-
posing Mayor Bergholtz' suggestion or supporting the position taken by Engineer
Eustance. Tho following resolution was moved by Commissioner Lawrence C. Rumsey,
seconded by Commissioner Van Cleef, and carried: "RESOLVED: That the Stewart Park
Commission recommends to the Ithaca Trust Company, as Trustees of the Stewart Park
Fund, that for the present and until such time as they may decide otherwise, they
retain 0100,000.00 as a Trust Fund, the income only to be used for the Permanent
Improvement of Stewart Park, and that the balance of said Fund be made available
for the permanent improvement of Stewart Park this year." The book value of the
Fund at that time was about $135,000.00.
At.•a meeting of the Common Council held that same day, February 4, 1931,
it was reported that the Stewart Park Commission had passed the foregoing resolution
and had requested the Clerk to submit it to the Common Council for its approval.
The Common Council then referred the motion to the Finance Committee and the City
Attorney for investigation and report. At the Common Council meeting held April 1,
1931, Alderman Causer, on behalf of the Finance Committee recommended approval of
the recommendation of the Stewart Park Commission, and on motion of Alderman Lowe,
seconded by Alderman Gill, the Common Council passed the following resolution:
"RESOLVED: That the resolution of the Stewart Park Commission, requesting the
Ithaca Trust Company to set aside 0100,000. of the Stewart Park Fund, the income
from which to be used for the improvement of the Park, and the balance of the prin-
cipal to be used for the improvement of the Park this year, be and the same is here-
by approved." This resolution was unanimously approved by the full membership of
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the Common Council, all ton Aldermen being present at the meeting and voting in the
affirmative.
In compliance with this resolution of the Common Council, the Stewart Park
Commission took immediate steps to expend substantial sums of principal during 1931
for the permanent improvement of the Park. A total of $34000.00 was paid to the
City of Ithaca for work performed under the supervision of the Board of Public
Works; this sum was charged to the principal of the Fund, 'leaving a balance of ap-
proximately 0100,000.00 in the Fund.
At a meeting of the Stewart Park Commission held April 26, 1932, Sherman
Peer, then serving as Chairman of the Commission, stated that the Commission had
completed what might be called the first stage of the development of Stewart Park
through the acquisition of lands and the making of major improvements in the prop-
erty. He stated that in his opinion "the Commission might well establish a policy
to at least guide it through the second stage of development." He then submitted
for discussion a memorandum defining such a policy, In substance, this policy con-
sisted of three sections, as follows:
Section 1. In defining the Stewart Park area as bounded on the west by
Fall Creek, on the north by the Lake, on the east by Cayuga Street and Lake Street,
and on the south by the south line of the Bird Sanctuary, "expenditures outside of
the Stewart Park area . . . . should not be made unless and until adequate finan-
cial arrangements have been made for the maintenance and scheduled development of
the Park."
Section 2. "The Stewart Park Trust Fund should be maintained as follows:
At approximately its present level instead of expending the principal in Park de-
velopments for the following reasons:
a. Capital expended in the Park in any considerable quantity will
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result in building up an overhead which the City will be required to carry and it is
not at all certain that the City would be willing to carry this overhead in future
years or even be able to do so and the Park might deteriorate.
t The Fund invested if producing an income of approximately
$5,000.00 will insure over a long period of years additional developments as the
future may justify and thereby insure that the improvements made with a part of the
Stewart money will be maintained and supplemented in a way which would meet the
wishes of the late Senator Stewart.
c. No large development should be undertaken at the Park with the
income from this Fund without an understanding and approval of the Common Council
because of possible carrying charges saddled on the City and all major projects
should be of a character which are partially self-sustaining."
Section 3. "The Commission might well make a study of introducing minor
attractions at the Park for people who don't get their recreation out of scenery
alone., The attractions should not consist of roller-coasters, merry-go-rounds and
other like concessions that bring an undesirable element and atmosphere, but might
well consist of adding materially to the wild fowl exhibit and to the outdoor rec-
reational facilities, such as games, boating, and acquatic sports."
By three separate resolutions, the three sections of W. Peer's definition
of policy were adopted by the Commission, and have since been the general policy for
the administration of the Stewart Trust Fund. The policy of maintaining the prin-
cipal of the Stewart Fund at approximately $100,000.00 has been somewhat liberally
interpreted, and its application has been flexible enough to permit some substantial
expenditures of principal which at the time drew down the value of the Fund to less
than $100,000.00. When this has occurred, the Commission has recommended to the
Trust Company that excess income should be used to restore the principal account to
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$100,000.00. By the wise interpretation of the original statement of policy, the
so-called Bcrgholtz Tract was purchased in 1938 at a cost of $8,500.00, the Club
House at the Newman Thmicipal Golf Course was constructed for approximately
$7,400.00, additional lands were purchased to round out the area in the neighbor-
hood of the Borgholtz Tract and the athletic fiolde to the south, and substantial
improvements made to the many recreational areas embraced by the Park. At meetings
of the Commission held March 26, 1940, May 8, 1947, and May 20, 1952, the Commission
wont on record in favor of maintaining the principal of the Fund at approximately
$100,000.00, and of using excess income to restore invasions of principal axpn ovod
by tho Commission from time to time.
Special mention should be made of the purchase of the Bcrgholtz Tract in
Soptombor, 1938, for $8,500.00. This tract of land was owned by the Truett Company
at the time, having boon taken over by foreclosure of the mortgage hold by the bank.
For a long time the Bcrgholtz Tract had been included in the onlargod Stewart Park
area visualized by the Commission. For several years before the purchase, tho Board
of Education had shown interest in purchasing a portion of the tract, which was ad-
jacent to their athletic playground, as an extension of their playing fields. On
July 18, 1938, a meeting of the Stewart Park Commission was called at the request
of two members of the Board of Public Works to discuss the advisability of pur-
chasing the Borgholtz Tract. Prior approval of the purchase was given by the City
Planning Commission at a meeting hold Juno 24, 1938, and by tho Board'of Public
Works on July 5, 1938. The Stewart Park Commission likewise approved the purchase
of Bcrgholtz Tract from the Trust Company for $8,500.00, with the purchase price to
be paid from the Stewart Park Fund. Thus, the three Commissions and Boards most
concerned with the development of Stewart Park approved of the purchase. The rec-
ord further shows that, on the recommendation of the Board of Public Works, the
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Common Council considered the contemplated purchase of the Bergholtz Tract. They
passed no resolution stating their approval of the purchase because, as Alderman
Barns pointed out, it was not necessary for the Common Council to record their ap-
proval, but no opposition to the purchase was expressed at the meeting.
During the past twenty-two years of what might be called the second stage
of development of the Park, improvements to the Park have, in general, resulted from
recommendations received from the City Superintendent, Engineer, and Forester. It
has been considered by the Commission that maximum use should be made of the ser-
vices of these men because of their familairity with the Park and its needs, and be-
cause they are considered to provide the best technical advice readily available to
the Commission. Each year the Commission considers projects suggested by these con-
sultants and usually follows their recommendations as to the priority which should
be allocated to each project. This procedure has resulted in an orderly, steady
improvement of the Park through the years.
IMPROVEANTS ,AND EXPENDITURES
Improvements to Stewart Park fall into three general classifications:
(1) Acquisition of lands in the vicinity of Renwick Park, (2) improvements to the
Park area to make it more useful as a recreation area, and (3) construction of
buildings and recreational facilities to permit a wider use of the Park by the
citizens of Ithaca.
In the first ton-year period, the sum of $37,862.00 of income from the
Fund was spent to acquire land in the vicinity of Renwick Park which was deemed
necessary by the Commission in the long-range development of the Park area. The
late Herman Bergholtz owned substantial lands which were acquired at a cost of
$14,392.00. The Cascadilla School Association lake front property was considered
vital- te the development of the Park, and was acquired at a cost of $15,470.00.
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Two parcels of land were purchased from the Withburn Corporation for a total of
35,500.00, and two other small pieces were acquired at a cost of $2,500.00.
No additional land was purchased until 1938 when the Commission agreed to
acquire the Borgholtz Tract and other small parcels lying immediately north and east
of the high school playing fields. A total of $10,672.30 was required to purchase
these additional lands and the cost thereof was charged to the principal account.
Thus, a total of 348,534.00 was expended to acquire the large area now included in
Stewart Park.
Throughout the entire administration of the Stewart Park Fund, substantial
sums have been spent to improve the lands acquired for the Park. In the early years
following Senator Stewart's death, it was necessary to fill a large portion of the
Park area to bring it substantially above the lake level and to eliminate swampy
areas... Dredging of channels and lagoons, removal of unsightly piling in the lake
immediately north of the Park, seeding, grading, planting, landscaping, curbing, and
road construction required large expenditures. The Louis Agassiz Fuertes Bird
Sanctuary was developed with funds raised by popular subscription supplemented by
funds appropriated by the Commission. Since these improvements were largely accom-
plished under the direction of the Board of Public Works, and paid for as the
Stewart Park Fund was billed by the City, the exact amounts expended for each of
these improvements is not readily available to the Trustee but are shown in records
maintained by the City.
The third classification of improvements to the Park is made up of the con-
struction of recreational facilities. In 1940, the Club House at the Newman
Municipal Golf Course was constructed with Stewart Park funds at a total cost of
37,471.19. Substantial sums were spent in the construction of a bandstand in 1947
and a steel swimming dock in 1950. The construction and maintenance of tennis courts
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has been costly, the most recent expenditure for this purpose being in 1950 when
03,678.45 was required to resurface and fence the courts. In 1952, toilet, lavatory
and storage facilities were provided for the playing fields on the Bergholtz Tract
at a cost of 02,490.93, and in the sane year repairs to the pavilion were authorized
at an expenditure over ';.,000.00. To finance these projects, it has sometimes been
necessary to use principal of the Fund. When principal has dropped somewhat below
0100,000.00, it has been the policy of the Commission to request the Trustee to
transfer income to the principal account in line with the policy of the Commission
to maintain the Fund at approximately $100,000.00.
INVESTMENTS
In its resolution of March 24, 1954, the Common Council requested a report
on the investments made for the Fund over the years. By the Decree of December 31,
1923, the Court directed the Trust Company to turn over to itself as Trustee, prop-
erty with an original appraised value of 0140,027.60. It further directed the Trust
Company to report from time to time the progress in the sale or other disposition of
the securities which were non-legal for trust fund investment. Included in the prop-
erty were United States Government securities and Savings & Loan Shares in the amount
of 019,833.00. These were legal for trust fund investment. In addition, there were
seventeen mortgages, with a total value of $46,454.60, which may or may not have met
the standards required of a legal trust fund investment. There was an assortment of
stocks and bonds, represented by sixteen issues, totaling 021,990.00, which were un-
questionably non-legal for trust fund investment, and there were six stock purchase
agreements for the purchase of D. B. Stewart & Company stock, totaling 036,550.00,
and a small interest in land and a land contract, together amounting to 015,200.00,
which did not qualify as legal investments. All of the non-legal investments have
been disposed of and the proceeds reinvested in legal securities with the exception
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of four issues with a total book value of $3,310.00 which were found to have no
value... These securities were as follows:
Book Value
050.,00 Epsilon Chapter of the Legal Fraternity $ 10.00
of Gamma Eta Gamma 5% Bonds
10 shs. Tye River Timber Company Common 700.00
800 sloe. Bing Ledge Copper Company Common 200.00
30 she. Ithaca Holding Corporation. Common 2.400,00~
To...tal $303107.00
Senator-Stewart died in 1921 worth a half million dollars; it is not surprising that
during his lifetime he acquired a few securities which proved of little or no value.
It is the belief of the Executor and Trustee of his Estate that at no time during
the administration of the Stewart Park Trust Fund would it have been possible to
dispose of those securities at any price.
Since the Decree of December 31, 1923, the Trust Company, as Trustee, has
invested and reinvested the Fund. The transactions have been so numerous that it
would not serve any useful purpose to erxumeratQ, then in detail in a report of this
kind. A formal, detailed accounting of all principal and income transactions is
being prepared by the Trustee and will be filed with the Tompkins County Surrogate
when completed. The results of all such investment transactions over a period of
thirty years have been a total realized profit of 017,496.83 and a total realized
loss of $17,277.35 exclusive of the werthles,s securities previous], mentioned. In
connection with the investments made during tko period of the Fund, it should be re-
membered that until July 1, 1950, by New York State Law investments .were restricted
to so-called legal securities. Those included high-grade bonds and mortgages but not
preferred and common stocks. Thus the Fund was not in a position to benefit from the
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long period of rising stock prices dating from the early war periods Furthermore,
this Trust Fund has been administered through the two periods of most violent econ-
omic change in the history of the country, the wild inflation of the late twenties
and the deep depression of the early thirties. The legal list of securities during
that period was a very narrow list and did not offer a Trustee much opportunity to
diversify risk or types of investment. For example, in June, 1931, there were 709
corporate bonds on the approved New York legal list of which 556, or 78%, were rail-
road obligations. Railroad obligations bulked thus large on the legal list because
financial analysts had up to that time believed them among the securest forms of in-
vestment for trust funds. But a glance at the financial journals of the early thir-
ties will offer ample proof of the financial weakness of many of our largest rail-
roads at that time. Nevertheless the trustee, restricted as he was by the narrow
legal list, had very little chance to avoid the consequences of this weakness.
INTERPRETATION
The Council resolution of March 24, 1954, requested an interpretation of
the Stewart Will. The Surrogate of Tompkins County has jurisdiction over the ad-
ministration of the Trust Fund, and a final judicial interpretation of the provi-
sions can be obtained only through a petition to the court of proper jurisdiction:
It ought, however, to be pointed out at this time that since December 31,
1923, the Trust Co ipany, as Trustee, has been subject to the terms of an order of
the Tompkins County Surrogate directing it to pay to Senator Stewartts cousin, Miss
Grace L. Ely, the sum of •$50,00 per month for the residue of her life. Furthermore,
before her death in 1921, Senator Stewards wife submitted a notarized statement to
the Trust Company stating that in her opinion Miss Ely should receive $50.00 per
month and not less, and that this sum should be suitably increased as age and in-
firmity required. As stated earlier in this report, Miss Ely lived to be eighty-
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eight years of age and died in September, 1952. In complying with the terms of the
Surrogate's Order, the Trust Company, as Trustee, paid a, total of $17,600.04 to Miss
Ely from the income of the Fund, thus reducing by that amount the income available
for the improvement of Stewart Park. It is hard to see how the entire principal of
the Fund could have been expended at the end of the ten years following Senator
Stewart's death without violating the terms of the Surrogate's Order and completely
disregarding the expressed wishes of Senator Stewart and his wife.
It should also be noted that before the expiration of the ten-year period
referred to in Senator Stewart's Will, the Common Council, recently referred to so
often as the duly elected representative of, and the only body qualified to speak
for the citizens of Ithaca, unanimously passed a resolution requesting the Trust
Company to set aside $100,000.00 of the Stewart Park Fund., the income to be used for
the improvement of the Park, and the balance over $ 00,000.00 to be used for the im-
provement of the Park during the year 1931. The Directors of the Trust Company con-
sider that such unanimous action represented the expressed wishes of the citizens
of Ithaca (who are the beneficiaries of Senator Stewart's beneficence) and that this
action aught to constitute one of the guiding considerations in their management of
the Trust until they are advised of action by the Common Council which rescinds or
modifies the original resolution of April 1, 1931. The decision to retain the sum
of $100,000.00 has made it possible to continue the improvement and development of
the Park without cost to the taxpayers for such improvements.
A third point which should be considered is the wording of paragraph
EIGHTEENTH of Senator Stewart's Will which directed that the principal be expended
for the permanent improvement of Renwick Park. The Will directed that at the end
of ten years after the death of his wife the principal should be expended "under
the direction of the Directors of the Ithaca Trust Company, as they in their judg-
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ment shall deem best." There is no time element specified in the Will as to when
such improvements shall be completed, and no individual citizen or civic body can ex-
ercise tha discretion which is solely vested in the Board of Directors of the Trust
Company.
Finally, it might be well to outline the cost of the administration of the
Fund by the Trust Company since 1923. Commissions payable to a testamentary trustee
are specified by the Statutes of the State of New York, and are beyond the control
of the trustee. During the thirty-year period from 1924 through 1953, the Trust
Company has received commissions for serving as Trustee of the Fund totaling
$6,024.86, or an average annual commission of $200.83. Since the compensation re-
<
ceived by the Bank is computed as a fixed percentage of the income received by the
Trustee, and investment income has declined sharply with the decline in interest
rates during the past twenty years, the commissions received by the Trust Company
for handling the Stewart Fund have declined, although the costs of operation of
banks, as well as of governments and other businesses, have increased sharply.
Gentlemen, the average annual fee received by the Trust Company during the past ten
years is $158.19, or $13.18 per month, for assuming the responsibility of adminis-
tering the Stewart Trust Fund. These figures and the past history of the Fund should
indicate that the Trust Company has not refrained from expending the principal of the
Fund for reasons of gain or profit, but on the contrary has given generously of the
time and efforts of its Directors and staff in cooperation with the proper city of-
ficials in the development of Stewart Park for the benefit of the entire community.
In conclusion, the Trustee would like to reiterate the statement of April
7, 1954, that the Tompkins County Trust Company welcomes public interest in the
Stewart Park Fund and in the planning of the Park for the benefit of the citizens of
Ithaca. It hopes that this informal report will cintribtte to a clearer deiitand-
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ing of the true facts surrounding the administration of this "public" Trust, and
promote a sound program for the future development of the beautiful park area pro-
vided by Senator Stewartrs generosity.
May 5, 1954 WILLIAM H. BURNS, PRESIDENT
TOMPKINS COUNTY TRUST COMPANY