IN-the absence of specific instructions in .deeds oí trust or wills, those charged with the administration of trust funds are required by the laws of the State of New York to invest in:
Ca) Bonds and mortgages on unincumbered real property in this State worth 50% more than the amount·loaned thereon.,
(b) Bonds which are legal investments for savings banks in New York State.
The latter class of investments, on account of the nature of the security, commonly commands a premíum, which is lost if the bonds are held until maturity. This loss must be charged either against principal or income. If charged against income, it should not be written off at one time, but should be ab-
. sorbed by amortization.
Amortization, as herein discussed, is the gradual charging off and extinction of the premium paid for a bond, by setting aside at each interest period a certain amount 'of the fixed interest the bond bears, the amounts set aside being so calculated that at the maturity of the bond they will equal the premium " paid.