Vanderbilt Law Review

Article Title

Why the Prudent Man?

First Page



In the law relating to fiduciary investments there has been going on of recent years something very like a revolution. One needs an excuse for adding anything at all to the very considerable volume of comment about the Prudent Man Rule for trust investment. However, failing the hope that anything really new may be said, there does remain a persistent belief that the rationale of what has happened has been somewhat oversimplified.

In the interests of perspective, accordingly, it might be serviceable if we were first (and briefly) to reexamine some of the history of the more dramatic highlights of the revolution, but if next we were to attend somewhat more fully to phases of the Rule in daily practice which we may assert to have had quite as much to do with its wider adoption as have some of the more publicized causes.

The actual trend of events has been dramatic enough, overturning in state after state, as it has in a comparatively few years, the legal embodiments of a trust investment philosophy which had long dominated the greater part of the area and population of the United States.