gages, countersigning issues of bonds of railroads and other corporations large and small; to act as registrar and as transfer agent of is sues of stock, countersigning the stock certificates; to act as agent for the payment of coupons, and pay dividends in behalf of corporations which also employ the trust company as transfer agent; to pay interest upon deposits,in so far as the funds may not need to be invested under the requirements of any trust, to depositors who lodge their money with the trust company for long or short periods, a minimum rate of interest being paid, of course, on demand deposits subject to withdrawal by check. The larger and more conservative of the trust companies, however, particularly in the cities, do not pay interest on the deposit balances of those who are also commercial borrowers, while many trust companies decline entirely to discount notes, holding that this is a feature of commercial banking and should not be practised by trust companies.

In addition to the foregoing, it should be stated that under ordinary or special charter rights in certain of the States, trust companies are empowered to insure titles; to undertake, in the capacity of agent, the purchase, sale, and management of real estate; to insure fidelity risks; to receive valuables for safekeeping; to act as surety in legal causes; to become security for the faithful performance of any contract or individual act; to purchase and sell bonds and foreign exchange; to issue domestic and foreign travelers' letters of credit; to prepare and take the custody of wills; to issue debenture bonds against mortgage loans by the trust companies; to receive savings deposits, generally as a regularly prescribed power, but sometimes, in States where mutual savings banks also exist, the criticism has arisen that trust companies ought not to engage in this branch of banking business. In reply to this the financial strength and continued success of the trust companies are pointed to as arguments in favor of permitting the companies to engage even more generally in the receiving of savings accounts, always provided, however, that there be no conflict with the savings bank laws of the particular State.

Limitations of Trust Companies.-During recent years branch bank methods have been imitated by the trust companies. This has occurred in a few large cities only, and notably in New York. The main business at such branches is the receiving of deposits, but sometimes loans are granted and the less important matters of trusts, real estate management and other trust company operations are undertaken by this means, always, however, with general

control from the home office.

Trust companies, by virtue of such powers as have been described, wider, as they are, than those of any other class of American moneyed institutions, have been given the appellation "the department stores of financial business." There are, however, numerous restrictions. They do not issue circulating notes, as do national banks, and as it was formerly the right of state banks to do. In some of the States they may not make investments beyond a certain percentage of their capital in any one issue of securities, usually 10 per cent. The same applies to loans to any one person. In some States loans are not made to directors, officers, agents,

and employees, and the general rule is that trust companies are debarred from making loans upon their own stock. In some States deposits of some portion of the trust company's capital are required to be lodged with the State authorities, and specific investment of a portion of the capital funds is prescribed. In others deposits may not be received by a trust company to an amount exceeding 10 times its paid-up capital and surplus. In some States the stockholders are subject to double liability, as are stockholders of the national banks. In certain States, and often according to the clearing house regulations of many large cities, the trust companies are compelled to keep a cash reserve against deposits, usually equal to the percentage of reserve carried by banks clearing through the same clearing house. In recent years much controversy has existed as to the question of sufficiency of trust company reserves, the contention of the banks being that trust companies, particularly in large cities like New York, ought to maintain a more substantial measure of reserve than at present, even if not the percentages required of national and state banks, and the trust companies replying that, because so much of their deposit money is lodged with them in trust or under other conditions of inactivity, also because such large sums of cash are deposited by them with the banks, the reserve requirements imposed upon the trust companies ought to be much less than those asked of the banks. Growth and popularity of trust companies have given added value to the word "trust" as a part of a corporate title, and in some States within very recent years a wise prohibition has been enjoined against foreign business corporations using this word as part of their title. The law in New York State since 1904, for instance, has been that in the use of such a title, whenever the name shall be written, printed, engraved, or displayed, there shall be added to it in legible characters the words "Not a moneyed corporation."

amount

with State

of capitalization and the number of directors Organization Arrangements.-The naturally varies in accordance laws, but generally, of course, larger cap000 being employed by one company in New ital is required in the cities, as much as $4,375,York city, and the minimum of requirements that city being $500,000. In Chicago one comunder present laws for companies organizing in pany has $5,000,000, and rarely, except in smal the average throughout the country being about towns, is less than $100,000 of capital permitted, $300,000 per company. In New York city as many as 30 directors serve upon some boards, but from 5 to 15 is the customary number in most cities. From the larger boards of directors committees are chosen, with interim powers, exercised, as a rule, at weekly meetings, whereas the full board may assemble only monthly or quarterly.

The modern practice of forming trust companies almost invariably involves, as a safeguard, the payment into the companies' hands by the stockholders of an amount of paid-in surplus, the paid-in amount sometimes being equal to as much as 50 per cent of the paid-in par of the stock.

History and Growth.--Historically considered, we find trust companies appearing about

In New York city the oldest trust company, the Farmers' Loan and Trust Company, dates from February 1822, and this corporation seems to have been the first formed specifically for acting as trustee. Ohio trust companies date from 1834; Illinois companies from 1855: Massachusetts companies from 1869; New Jersey companies from 1875. About 1872 agitation arose as to whether this class of institutions ought not to be brought under some kind of stricter supervision than had previously obtained. The result was that in 1874 the New York State trust companies were brought under the direct supervision of the State superintendent of banking. Most of the States have since come to require periodical reports, and to-day in many States the trust companies are rigidly and regularly investigated, annually or oftener, by State examining authorities, the system being fully as thorough in some States as though the examinations were conducted by the comptroller who supervises the national banks.

In the early '80's a sudden and marked increase took place in the number of trust companies, about 200 organizations being effected during the 10 years ended with 1890, about 300 in the succeeding 10 years, more than 100 during 1901, about 150 in 1902, and 300 during 1903, until at the end of 1904, according to an unofficial compilation made early in the succeeding year, the total number of incorporated trust companies amounted to 1,441. Of these the notable numbers, by States, are: Pennsylvania, 290; New York, 85; Illinois, 69; Indiana, 65; Ohio, 62; New Jersey, 62; Tennessee, 54; California, 50; Massachusetts, 47; Iowa, 42; Texas, 41; while in every State, Territory, and island possession, except Alaska and Porto Rico, there is some form of trust company organization.

Incidental to this great growth many charters were obtained which have not been availed of, although there has by no means been a marked lessening in the popularity of this form of financial_organization.

Comprehensive trust company statistics for the whole country had never been gathered until 30 June 1903, when, in New York, the United States Mortgage and Trust Company published and distributed gratuitously a collection of 912 companies' statements, with the names of officers, directors, and other data never before gathered as a whole, or even available in detail except in State reports.

In June 1910 the 1.091 companies had com

bonds, $2,256,572,911 in loans and notes, $260,129,891 in cash on hand and in bank, $467,643,271 due from banks, and $80,379,723 in other resources. Among the liabilities were $3,073,122,706 of deposits, while the companies had aggregate capital stock of $367,333,556 and surplus funds and undivided profits of $498,166,836. With an aggregate of $4,200,000,000 of funds, they equaled in volume very nearly 50 per cent of the total funds held by the country's 7,173 national banks. Trust company resources in the city of New York exceeded $1,000,000,000 on the date named, as compared with national bank resources of $1,664,767,465. In certain cities there were more trust companies than national banks, and in a few, like Cleveland, Ohio, Newark and Jersey City, N. J., and Providence, R. I., trust company resources were in excess of those of the national banks.

The banking power of the world was estimated in 1904, by the comptroller of the currency at Washington, at $33,608,000,000, of which about $13,826,000,000 is banking power of the United States. With trust company resources of $3,000,000,000, on that date it will be seen that these institutions comprised about 9 per cent of the world's and about 22 per cent of this country's banking power.

Suggested Control by Federal Government.— Seeing the growth of these institutions, and the diversity of their powers, the question has, during recent years, arisen as to whether the Federal government might not with advantage assume the control of the trust companies. A reason why this probably may not be possible of accomplishment during many years to come is that because of the breadth of powers, as hereinbefore described, when compared with the rather restricted character of business done by the national banks, it would be very difficult to establish even a uniformity of legal requirements. Some uniformity of laws as regards supervision has been much sought for, however, by the trust companies themselves, and the results which will eventually follow in this connection will doubtless be measured only by the skill and amount of organization existing in the banking departments of the different State governments. One solution which has been suggested, regarding the idea of national control, is that the national banks be permitted to broaden their scope so as to administer trusts, make_real estate loans, and have other powers such as have always been granted to trust companies but not to national banks.

The payment of interest on deposit balance by the national banks, and on the other hand the receiving of savings deposits and other forms of miscellaneous banking operations by trust companies, both illustrating the growth and broadening of American banking methods in the last quarter of the 19th and the beginning of the present century, are proofs of successful achievements by the trust companies, and make the problem of broader powers for other banking institutions one requiring settlement in the near future, without involving that the main features of trust company onerations need necessarily be curtailed.

Strength and Success of Trust Companies. -It is a curious and noteworthy fact that al