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NOTE BY THE EDITOR.
THE experiment of nearly half a century has not produced all the beneficial results, which were anticipated by Dr. Franklin, from his bequest to Boston and Philadelphia. The following is an extract from a printed Report of the Com mittee of Legacies and Trusts, made in the Common Council of Philadelphia April 27th, 1837, by Mr. John Thomason, chairman of the Committee.
"From official returns," says the Report, "it appears, that up to the 1st of January, 1837, the fund has been borrowed by one hundred and ninetythree individuals, in sums mostly of $260 each. At that date, the fund was in the hands of one hundred and twelve beneficiaries, of whom nineteen have paid neither principal nor interest, although the accounts of some of them have been open for a period of thirty-four years. Ninety other persons stand indebted in sums from $21 to $ 292; and three, having borrowed with in the year, were not, at the last-mentioned date, liable to any demand by the trustees. Of these one hundred and nine cases of non-compliance with the terms of the will, fifty-eight bonds may be subject to a plea of the statute of limitation, and the rest are still valid. In this condition of the fund, it becomes difficult to estimate its present value. Should all the debts be recovered, the amount of the fund would be $23,627-09; but, from the length of time elapsed since the date of many of those bonds, such a result is hopeless; and even this latter sum, large as it is, is below the amount it would have attained at this time, had the intentions of the testator been fully carried out. The original bequest of $4,444-44, at compound interest for forty-five years, would be $39,833-29; and, although the immediate conversion of interest into principal, as the former becomes due, is not always practicable, yet it is believed, that, with careful management, the fund would, at this time, have lacked but little of that amount. How far the fund falls short, may be partly judged from the actual receipts on account of this legacy for the last ten years. During that time the sum of $16,191-92 has been paid in. As this period included the term for lending out, and receiving back with interest, the whole fund, the receipts within that term may be taken as a safe approxi mation to its real value; to which must be added the sum to be obtained through the enforcing of payment, by legal process, from such securities as may be good at this late day. Had the fund been placed at simple interest, it would have amounted to the last-mentioned sum by this time.
"Had the requirements of the will been, in former years, fully complied with, the operation of the fund, at this day, would be sensibly felt by the mechanics of Philadelphia. Passing from one borrower to another, and increasing in a compound ratio, its effect would be to stimulate useful industry, which, without such capital, would have remained unproductive. It would have increased the number of those who do business on their own stock. It would be a standing lesson on the immutable connexion between capital and productive industry, thus constantly inciting to economy and prudence. It would have become the reward of every faithful apprentice, who could look forward to a participation in its benefit. It is deeply to be regretted, that this state of things, which had so captivated the imagination of Franklin that he devoted a portion of his hard-earned wealth to realize it for the mechanics of Philadelphia, should, in the emphatic language of his will, prove a vain fancy."
By this statement it would seem, that there had been at some time a remarkable want of fidelity in administering the trust, especially in allowing so large
a number of bonds to become worthless by the statute of limitation, and neg. lecting to make seasonable demands upon the sureties.
Appended to the same report is a letter from Mr. William Minot, treasurer of the Franklin Fund in Boston, dated December 23d, 1836, which contains the following state of the fund in that city.
"The whole number of loans from this Fund," Mr. Minot says, " from May, 1791, to the present time, has been 255, in sums varying from $70 to $266 up to the year 1800, since which time they have usually been $ 200.
"From July, 1811, to the present time, the number of loans has been 91, of which 50, at least, have been repaid (in whole or in part) by sureties, and on four of these are balances which cannot be collected, both principals and sureties being insolvent.
"Dr. Franklin's donation was £1,000 sterling. The present value of the Fund, is as follows;
"Estimate of 13 bonds, considered good,
"Amount deposited, on interest, in the office of the Massachusetts
Hospital Life Insurance Company, "Cash in the hands of the Treasurer
"It is apparent, from these facts, that the benevolent intentions of the donor have not been realized, and that, in the present condition of our country, it is not advantageous to married mechanics, under the age of twentyfour years, to borrow money to be repaid in easy instalments, at a low rate of interest; and the improvidence of early marriages, among that class of men, may fairly be inferred.
"The great number of instances, in which sureties have been obliged to pay the loans, has rendered it not so easy, as formerly, for applicants to obtain the required security. This is proved by the small number of loans from the fund, averaging for the last five years, not more than one a year.
"Until within the last twenty years, no great care was taken in accumu lating the fund. It is now carefully attended to; and money not required for actual use is placed in the Life Insurance Company, where it increases at the rate of about five and one-third per cent a year.
"The loans are made at the rate of five per cent, but, on instalments past due, six per cent is charged, from the time they were payable, and the bonds of delinquents are put in suit after reasonable notice. Two sureties, at least, are required on each bond."
22,739-00 158 15 $24,325-83
According to the treasurer's return on the 1st of January, 1840, the amount of the fund in Boston was at that time as follows.
Deposited in the Life Insurance office,
END OF VOL. I.
STEREOTYPED AND PRINTED BY FOLSOM, WELLS, AND THURSTON,
PRINTERS TO THE UNIVERSITY.