=8 a O lU J3 H MH o QS 6 o a a to - c .1?l^c .. i. i. J a 3 •S I •9 2 ^^ o '^ o O J3 o -^ 00 - *^ a< C o C CO .2 i-> = H (L> a t-i o u The Story I of the Trust Companies By Edward Ten Broeck Ferine Illustrated G. P. Putnam's Sons New York and London ^be Ifcnlcfierbocftec press 1916 /^ Copyright, 1916 BY EDWARD TEX BROECK FERINE "Cbe "Rnlchcrbocfcer press, •ftcw IBorft UHivmnY OF SOUTHERN cAL:roRr:!A librarb MY FRIEND OF MANY YEARS JAMES HERBERT CASE FOREWORD Trust companies are a modern development. Their literature, as revealed in the bibliography at the close of this volume, has been of limited scope, although statistics have now been avail- able for some years and the legal aspects and technical methods of operating the companies have had bestowed upon them a considerable degree of attention. The present book is intended, with an avoidance of technicalities, to sketch the beginnings and advances of the older companies, and to bring the individual narratives of a number of the largest institutions down to 191 6, — a point within one hundred years of the original announcement by an American corporation of an intention to trans- act a trust business. In most localities there are well defined differences between banks and trust com- panies. The former serve their clients as depositories and extend credit in proportion vi Foreword to the accounts thus handled, the general rule being not to pay interest on deposits belonging to those who are borrowers. Many trust companies, particularly in the smaller com- munities, follow the same practice, but their usual function is as the holders of moneys not actively employed for commercial purposes; on these sums interest is paid; when they are withdrawn it is frequently for permanent investment. Their so-called trust powers com- prise the registering and transferring of stock, the certification of corporate bonds, appoint- ment to act as executor, administrator, trustee, committee, agent, and in almost every ca- pacity in which individuals might act with the more limited ability of individuals. One author has said of the trust companies that they are the department stores of finance. It is an apt metaphor, for the service they ren- der in these times, and the skill and common sense demanded of their managements are exact- ing to a degree greater than in almost any other line of business activity. Their history de- serves to be written, and although it has been necessary to omit references to many hun- Foreword vii dreds of institutions of less size than those whose names have been woven into the following text, it is, nevertheless, due them to say that each has its honorable part in a line of endeavor in which the test is not merely dollars piled up, but a good name. The author owes much to the other writers mentioned herein. Thanks are also due for the generous help given by trust company officials everyivhere who have aided in gather- ing and assembling specific facts, figures, and illustrations. Of the last named, those which serve as a reminder of the old days when trust companies put out their own circulating notes have been furnished from a splendid collection of paper money made by Mr. David Proskey of the New York Coin & Stamp Company. This is true of each of the facsimile notes, except the little Fairfield Loan & Trust Com- pany's half-dollar of scrip, which has been kindly loaned by Mr. Wayte Raymond of the United States Coin Company of New York. E. T. P. New York, September 30, 19 16. CONTENTS PAGB FOREWORD V CHAPTER I Events prior to and during 1812; An address from the President and Trustees, Pennsylvania Company for Insurances on Lives and Granting Annuities; Farmers Fire Insurance «S: Loan Company, the first incorporation with trust powers . . 1-17 CHAPTER II Events following 1822; New York Life Insurance & Trust Company, the first incorporation with "trust" in title; Its organization; Early reports 1 8-3 1 CHAPTER III Banking expansion; Warnings in the public prints; Re-incorporation of Farmers' ; Re-incorporation of Pennsylvania Company ; Incorporation of Girard . 32-52 CHAPTER IV Bank statistics of 1835; Ohio Life Insurance & Trust; Southern Life Insurance & Trust; Fairfield, Con- necticut Loan & Trust Company; Panic of 1837; First convention of American bankers . . 53"65 is Contents CHAPTER V PAGB New York State Free Banking Act and its consequen- ces; New York State trust companies incorporated under Free Banking Act; Invasion of Wall Street by- out-of-town concerns; "The Wall Street Chorus"; Supervision by Comptroller at Albany; Office of Superintendent of Banks established at Albany; Buffalo and Philadelphia trust companies; Early litigation; Magazine comment of 1854 . . . 66-82 CHAPTER VI Incorporation of United States Trust of New York, 1853; Test of constitutionality of its charter; Early reports; An auction sale of property held under a receivership; American Bible Society Trusteeship . . . ... 83-94 CHAPTER VII Failure of Ohio Life Insurance & Trust; Panic of 1857; Incorporation of Merchants' Loan & Trust of Chicago .... . . . 95-106 CHAPTER VIII Six pioneers described since 1865: Farmers'; New York Life; Pennsylvania Company; Girard; United States Trust; Merchants' of Chicago; Some functions and illustrative appointments. .... 107-121 CHAPTER IX Union of New York; Provident Life & Trust of Phila- delphia; Fidelity of Philadelphia; Brooklyn Trust; Rhode Island Hospital Trust; A Bankers Directory of 1868 122-138 Contents xi CHAPTER X PAGB Citizens Savings & Trust of Cleveland; New England of Boston; Philadelphia Trust; Union of Chicago; Illinois Trust & Savings; Panic of 1873; Boston Safe Deposit & Trust; Central of New York . 139-152 CHAPTER XI Supervisory legislation; Lack of early figures; Report by- New York State Superintendent of Banks; First Tabulation by Comptroller of the Currency; Real Estate Loan and Trust of Washington, D. C; Inactivity from 1876 to 1880 . , . 153-165 CHAPTER XII Metropolitan of New York; Title Guarantee & Trust of New York; Land Title & Trust of Philadelphia; Lawyers Title Insurance of New York; Fidelity of Newark; Industrial of Providence; Franklin of Brooklyn ...... 166-182 CHAPTER XIII New York Trust; Union of Pittsburgh; Security Trust & Savings of Los Angeles; Continental and Com- mercial of Chicago; Old Colony of Boston; Alissis- sippi Valley of St. Louis .... 183-194 CHAPTER XIV Guaranty of New York; Contrast of 1896 and 1916 aggregates; Panic of 1893; United States ]\Iort- gage & Trust of New York; Union of San Francisco; Cleveland Trust; Canal Bank & Trust of New Orleans; Mercantile of St, Louis; Commercial of Jersey City 195-214 xii Contents CHAPTER XV PAGE Growth In the new century; "Trust Companies" — Magazine; Equitable of New York; Empire of New York; Central of Chicago; First Trust and Savings of Chicago; Bankers of New York; Baltimore and San Francisco fires .... 215-230 CHAPTER XVI Panic of 1907; Re-opening of Knickerbocker Trust; Columbia Trust of New York; Astor Trust of New York; Foreign companies . . . 231-241 CHAPTER XVII Savings Union Bank & Trust of San Francisco; Los Angeles Trust & Savings; German American Trust & Savings of Los Angeles; Commerce of Kansas City; Plibernia Bank & Trust of New Orleans; Northern of Chicago; Harris Trust of Chicago; Chicago Title & Trust; Hibernian Bank- ing Association of Chicago; Guardian Savings & Trust of Cleveland; Union Savings Bank & Trust of Cincinnati; Fidelity Title & Trust of Pittsburgh; Colonial of Pittsburgh; Mercantile Trust & Deposit of Baltimore; Commercial of Philadelphia; Roches- ter Trust & Safe Deposit; Security of Rochester; Trust & Safe Deposit of Onondaga, Syracuse; Hudson Trust of Hoboken; Trust Company of New Jersey, Hoboken; Broadway Trust of New York; Peoples of Brooklyn; Kings County of Brooklyn; American of Boston; State Street of Boston; Commonwealth of Boston . . 242-262 Contents xiii CHAPTER XVIII PAGB Trust Company Section, American Bankers Associ- ation, Origin; Annual meetings; Recent accomplish- ments; Social features; OfiScial arrangements . 263-275 CHAPTER XIX Personnel, men In public life; Merchants and manu- facturers; Professional men; Private bankers and capitalists; Corporate bankers . . . 276-287 CHAPTER XX Suspensions and failures; The reserve question in New York; Admission of trust companies to New York Clearing House ; Statistics of recent years . 288-299 APPENDIX "A" Aggregate resources and liabilities of seventy Leading Companies, shown comparatively for 1906 andi9i6 300-307 APPENDIX "B" Bibliography 308-312 Index 313 ILLUSTRATIONS PAGE Corner of Wall and 7/1111301 Streets, 1800. No. 34 (old number) in center, first home of The Farmers' Loan and Trust Com- pany, the oldest loan and trust institution in America .... Frontispiece Handwritten Index of "Political Pamphlets." A collection made by Thomas Jefferson about 1 8 15, containing (No. 4) a reference to the first literature issued by The Pennsylvania Company for Insurances on Lives and Granting Annuities . . 8 The earliest announcement of a company with power "to execute trusts" in a cor- porate capacity. From the New York Evening Post, Avigvist 6, 1^22 ... 14 A circular issued about 1836, describing Benefits of Life Insurance ... 46 An interest bearing note for 50 cents. Issued in Connecticut, 1837 .... 60 A one dollar bill of a New York trust com- pany. Issued in 1841, under the "Free Banking" Act 68 XV xvi Illustrations PACB Stock certificate issued in Mobile under a charter dated early in 1836 ... 72 Specimen of unissued circulation as originally held in the custody of the Comptroller of New York State ..... 78 The first home of The Merchants' Loan & Trust Company. Corner of La Salle and South Water Streets, Chicago . .104 The New York Stock Exchange, and office of the New York Guaranty & Indemnity Company, Broad Street, 1866 . .108 No. 408 Chestnut Street, Philadelphia. Office of the Girard Trust Company, 1850 to 1872. From original in Historical Society of Pennsylvania. . . .114 Broadway, New York, 1834, from Cortlandt Street to Wall Street. The site occupied later by the Union Trust Company, at No. 73 Broadway, was directly below Trinity Church . . . . .124 Bond issued in 1876 by the Real Estate Loan & Trust Company of Washington, D. C. . 164 Growth of the Guaranty Trust Company of New York, June 30, 1892- June 30, 1916, inclusive . . . . . . 199 Illustrations xvii FAGS The old Sugar House and Middle Dutch Reformed Church (occupied as Post Office 1845-1877), Nassau and Liberty Streets, New York, 1830. Site of the Mutual Life Building and home of the United States Mortgage & Trust Com- pany ....... 204 Wall Street, about 1834, looking east from a point opposite the site of present Bankers Trust Company Building. Merchants' Exchange (with dome) at the right . . 224 State Street, Boston, 1849. From original print in the main office of the State Street Trust Company ..... 260 A Modern Building. Home of America's largest trust institution, the Guaranty Trust Company of New York. South- east corner of Broadway and Liberty Street ...... 298 The Story of The Trust Companies CHAPTER I THE BEGINNINGS. 1 822. FARMERS FIRE INSURANCE & LOAN COMPANY Corporate banking in the United States dates back to the days of the Continental Congress. In 1781 that body granted a charter to the Bank of North America. This institu- tion, now with the powers of a National Bank- ing Association, is still in business in Phila- delphia, having reached the one hundred and thirty-fifth anniversary of its incorporation on May 26, 1916. We are accustomed to consider that the earliest establishment of trust companies oc- curred many years after the founding of the 2 Story of Trust Companies first banks. This is so, but in point of corporate age several State banks which have been re- organized as trust companies in comparatively recent years are nearly as old as America's earliest bank. The best illustration of this is the Union Bank & Trust Company of New London, Connecticut, claiming existence in both financial fields since 1792; while eight years thereafter, in 1800, the present Wash- ington Trust Company of Westerly, Rhode Island, was organized, also as a State bank, and in 18 10 the Farmers Bank of Lancaster, Pennsylvania, started a business which even- tually, almost a century later, came to bear the name Farmers Trust Company of Lancaster. Two years afterwards, on March 10, 18 12, a decade before the vital statistics of the trust companies might be said to have begun. Gover- nor Simon Snyder approved the charter of The Pennsylvania Company tor Insurances on Lives and Granting Annuities. Trust powers were not at once conferred upon this Phila- delphia institution, but it was the first of several prominent concerns destined later to broaden into the business of full-fledged trust companies. Early Nineteenth Century Events 3 Before chronicling the circumstances of this, and of subsequent incorporations in the same field of financial activity, a gHmpse should be had of current conditions and events. By 1 8 12, twenty- three years had elapsed since Washington was inaugurated as the first Presi- dent of the United States. He had then been dead twelve years, but John Adams, Thomas Jefferson, and eight other signers of the Declara- tion of Independence were still living, while James Madison was serving his first term as Chief Magistrate of the Nation. In those remote days there were living thirteen suc- ceeding Presidents, down to and including Lin- coln and Johnson. The same was true of certain other Civil War figures, like Jefferson Davis and Robert E. Lee, but Generals Grant, Sherman, Sheridan, and McClellan, as well as most of the other heroes of that war, had not yet been bom. Only four States, Kentucky, Vermont, Tennessee, and Ohio, had been joined to the original thirteen. The population of these seventeen was approximately seven mil- lions of people. Such were some of the political conditions 4 Story of Trust Companies of the Republic in 1812, when this forerunner of a Philadelphia trust company was formed for purposes of "insurances on lives and grant- ing annuities." In the same city, in 1793, the United States Mint had been established, less than twenty years before; in 1800, Congress had met there for the last time before removing to Washington; in 181 1, the charter of the first Bank of the United States had just expired; and during May, 18 12, Stephen Girard opened his celebrated "Banking House." Five years previous to this time, New Yorkers had seen the Clermont embark on her maiden trip up the Hudson, while in the year 18 12 was witnessed the completion of their new City Hall. At this period New York's banks numbered less than ten, including the City Bank, char- tered in the year mentioned. Louisiana had been purchased in 1803, nine years before; only in 1809 had St. Louis become an incorpo- rated town; and during 1812 the first rolling mill in Pittsburgh was erected. But the event which bore most upon the fortunes of the newly founded "Pennsylvania Company" was the breaking out of hostilities Outbreak of War in 1 8 12 5 between the United States and Great Britain. Six days before its charter was signed, that is on March 4, 18 12, Jonathan Russell, our charge d'affaires at London wrote to Secretary of State Monroe: "I no longer entertain a hope that we can honorably avoid war." In the same month Congress authorized a 6 per cent, loan of $11,000,000; on June 12th war was declared; by July ist customs duties were doubled; on August 19th the American frigate Constitution met and vanquished the British Guerriere. Stirring days indeed were these in which The Pennsylvania Company for Insurances on Lives and Granting Annuities came into being. Its aims and activities were naturally subjected to immediate handicaps. Not until June 10, 1 8 13, did the newly formed company open its doors for business, and only in the following year was any substantial progress made upon its plans. In a lengthy circular, issued in 18 14, undoubt- edly the first piece of literature over the name of any company now engaged in trust business, the management presented 6 Story of Trust Companies A71 Address From The President and Trustees Of The Pennsylvania Company For Insurances 07i Lives and Granting Annuities To the Inhabitants of the United States Upon the Subject of The Beneficent Objects of that Institution. Philadelphia. Printed by J. Maxwell & Company 1814. The opening words of the circular are : "Fellow Citizens: "Among the various modes of alleviating the misfortunes and calamities of life, which have been adopted by the inhabitants of Europe, none has more deservedly engaged the attention of the enlightened and benevo- lent, than the establishment of institutions for Insurances on Lives and Granting An- nuities.^' Farther along, life insurance, annuities, and An Address on Insurance 7 reversions are defined and illustrated, and the business of London companies is described as being "so extensive that in thirty- three years, from January, 1768, to January, 1801, they made 83,201 insurances on single lives alone, which is more than an average of 2500 per annum." After presenting various rules, rates, and arguments the address announces: "The office of the Company is open daily between the hours of 9 and 3 o'clock, at No. ']2 South Second Street, in the City of Phila- delphia, where a Committee of the Directors sit three times a week to consider and decide upon the proposals which may be made to them. Letters directed to the President, post paid, will be expeditiously attended to and answer given to any inquiries which may be made respecting the terms and rates upon which the Company will transact business." The list of directors is also presented, con- sisting of the following names: President, Samuel Yorke; John Bohlen, Joseph Peace, John Claxton, Jacob Sperry, Cadwallader Ev- ans, Jeremiah Warder, Jr., Joshua Longstreth, 8 Story of Trust Companies Condy Raguet, Charles N. Bancker, John Welsh, James Hemphill, William Schlatter, and Jacob Shoemaker, the last named bearing the title of Actuary. Among the treasures of the New York Public Library a copy of this quaint "Address" has reposed for many years. An added interest attaches to it from the fact that it was origi- nally a valued belonging of Thomas Jefferson. Sometime during 1815 the "Sage of Monticello," always interested in mathematical matters and himself the founder of America's decimal system of currency, gathered and had bound together a collection of eleven so-called Political Pam- phlets. Under this title, in handsome calf binding, the "Address to the Inhabitants of the United States" has lain for a full century. Amongst its companions are to be found titles like, "Cooper on Political Arithmetic," "IngersoU on the Loan Bill, 1814," and "Thorn- ton on a Constitution for North and South America." The flyleaf of this volume contains an index of the pamphlets made in Jefferson's own handwriting. Under his eye were reviewed the Pennsylvania Company's "Tables," showing 7 // . Handwritten index of *' Political Pamphlets." A collection made by Thomas Jefferson about 1815, containing (No. 4) a reference to the first literature issued by The Pennsylvania Company for Insurances on Lives and Granting Annuities. Close of the War of 1 8i 2 9 the expectation of life at ages one to ninety, as computed on six different experience bases, per calculations both in America and abroad, its "Rates" for $100 of insurance at different ages and for annuities based upon the lives of adults and children. By him in his library in Monticello was read, doubtless with studious care, the message set forth in the text of the "Address," including a pointed reference by the Company's founders to the problems of the year 18 12. For it would appear that little had been accomplished during that and the following year, the explanation being offered that — "at that period some untoward circumstances, among which was the expectation of a war, depressed, ior the moment, the disposition of capitalists to embark in new enterprises, and the subsequent declaration of hostiHties against Great Britain, rendered it advisable to withhold, for a time, any extraordinary exertions." General Jackson won his great victory at New Orleans in January, 18 15, and soon there- 10 Story of Trust Companies after, on February nth, the second war with England was concluded by the arrival in New York harbor of the British sloop of war Favorite, bearing a treaty of peace. A period of reconstruction ensued throughout the entire country. On April lo, 1816, the Act of Congress establishing the second Bank of the United States was passed and specie payments were resumed. At once numerous other banks sought charters and commercial business began to flourish. By 18 19, however, a depression had set in. In that year the Government's expenditures, largely in reduc- tions of some thirty-six millions of dollars of war loans, proved to be in excess of receipts. Credit now began to contract, employment became insecure, and the country experienced its first panic. In 1820, a measure of recovery from these embarrassments was enjoyed, but in 1 82 1 customs receipts fell to thirteen millions of dollars, a sum ten millions less than the annual average of the previous five years, and business affairs again became greatly unsettled. These conditions naturally affected New York bankers and individuals, and the depression The First Trust Company ii was marked in degree as the city had recently outstripped Philadelphia and grown to be the wealthiest and most populous American munici- paHty. Nevertheless a group of business men there was not deterred, in 1822, from establish- ing the first company in the city, state, and nation ever to be clothed with legal authority to "execute any or all trusts in their corporate capacity." This was the Farmers Fire Insurance & Loan Company, chartered February 28, 1822, now The Farmers' Loan & Trust Company of New York. The word "Farmers" as a part of the corporate title was availed of primarily for the reason that under the charter a business in rural mortgage loans was contemplated. It was a charter provision that the "corpora- tion shall have authority to make loans on the security of bonds and mortgages, or convey- ances of improved farms, houses, manufacto- ries, or other buildings." Moreover, Section 9 of the charter provided for the choosing of twenty-one directors in the City and County of New York, with out-of-town representation on the board by six others, "one of whom, at least, 12 Story of Trust Companies shall be selected resident in each of the great districts of this State." As time elapsed the Company was enabled through these up-state connections to have an important part in certain real estate developments which sought financial assistance from New York City. Back in the year 1794, Robert Morris, the financier of the American Revolution, just beginning a series of struggles to regain his lost personal fortunes, had disposed of the title to nearly four million acres of land in Western New York, known thereafter as the Holland Purchase. This title ran to the Holland Land Company, which established its noted Land Office where the settlement bearing the good old Dutch name of Batavia was created. As the years went by, early troubles with Indian chiefs like Red Jacket, Com Planter, and others who had originally owned the land were suc- ceeded by dissatisfaction on the part of the farmers, and other settlers, whose contracts of purchase and mortgages, held by the Holland Land Company, proved to be more burdensome than the makers had anticipated. Finally these contracts and mortgages passed into A Business in Farmers' Loans 13 other hands and the farmers in the western part of the State found that they would have to deal thereafter with a group of New York investors. Among the latter, the Farmers Fire Insiir- ance & Loan Company came into possession of a large number of the obligations named, and encountered no little diflSculty in securing their enforcement. For many years after the reor- ganization of the Company under its new title, in 1836, communication was almost constant between the institution and various attorneys in the western counties. Only in comparatively recent times have the problems attending title searches in that part of the State ceased to require extended attention by the officers of the Farmers' Loan & Trust Company, of old an actual and important holder of farmers* loans. The Company's first public announcement appeared in the New York Evening Post of August loth, in the same year, and read: "The Farmers Fire Insurance & Loan Company. Incorporated with a capital of 14 Story of Trust Companies $500,000 — Office at No. 34 Wall-street, ad- joining the Bank of New York — open from 9 o'clock A.M. to sunset. "This Company is now ready to receive proposals for insuring property of every description against loss or damage by fire. The terms will be as favorable as those of any other company in this city, allowing liberally for circumstances tending to diminish the risk. "This Company also has power granted to them, 'to receive, take, possess, and stand seized of any and all property that may be conveyed to them in trust, and to execute any and all such trust or trusts in their corporate capacity and name, in the same manner and to the same extent as any other trustee or trustees might or could lawfully do.' The TRUST property will be kept, as their charter prescribes, wholly separate from all other concerns of the Company, and cannot, in any event, be made liable for its losses or engagements. Any property so committed to them in trust, will be in- vested in such manner as the grantors may chuse [sic] to direct. "The public will readily perceive, that the advantages of this Company to protect pro- perty for the benefit of infajits or others, or to THE FARMERS FIRE UfSURjI/fCE AKD LOAN COMPANY. INCORPORATED with a capital of |f500,- O00-Otfic« at No 34 Wali-street^ adjoining the bank of New-York— open from 9 o'doek, A. M. to sunset This Company is now ready to receive propo- sab for insuring property of every description ^instlossor oamage by fire. The terms will be as lavorable as those of any other company in this cKy, allowing Lberally for circumstances tending to diminish the risk. This Company also have power granted to them, " to receive, take, possess, and stand seized of auy and all property that may be conveyed to them in trust, and to execute any aad ail such TRUST or TRUSTS in their corporate capacity and name, in the same manner, amd to the same ex- tent as any other tbpstee or trustees mi-ht or could lawfully do." The trust propehti will be kept, aa their charter prescribes, wholly separate from the other concerns of the company, and cannot, in any event, he made liable for its losses or engagements. Any property so commit^ ted to them in trust, will be invested in such manner as the grantors (rmy chuse to direct. The public will readily perceive, that Uie ad- vantages of this Company to prolett property for the benefit of infants oe others, or to answer any specitU purposes, either of a public or pncate na • ture, are far ^eater than those of individual ex- ecutors or oilier trustees, who are alwavs liable to casualties, which no foreeiight can guard against or prevent ; as the numerous and frequent appli- cation? to the court of chancery for filling up of vacancies occasioned by death, insolvencies, or other causes, most incontestably show ; and the expenses of such proceedings often swallow/ up a great part of the Trust Estate. By placing such property in the charge of this company, who hare continued successi/ n, there can be no danger whatever of any such casualties, as all such pro- perty will be invested either at discretion in the mo I beneficial manner, for the sole advantage of ihe party conveying the same, or invested as the party may direct, wiOun the strict provisions of any such trust. The Company refer, for further information upon this subject, to their cliarter, a copy of which may be had by appHcatioa at the office, where also the terms for any trust estate may be known. DIRECTORS. James M'Bride RESIDENT Richard Han on James Magee George Griswold Benjam'n Marshall C. C. Cambrdcng James D'WoIf, Jun. Hpnry Wheatort Gabriel L- Lewis Henry Ma<;tier A. H. Lawrence Benjamin Bailey Thomas Franklin John Johnston Thomas S. Townscnd Francis Saltus William VV. Russel Frederick A. Tracy NON-RESIDENT DIRECTORS. Southern District— Jamet TallmaJgc, Pough- keepsfe; Christian Schell, Rhinebeck. Middle District — William James, Albany. EasUrn District— Jphn L. Viele, Waterfbrd. Western District— George Andrus, Adams, Jetltrson county ; David White, Palmyra On|a- no county. JOHN T. CHAMPLIN, President. >irchibafd Mchityre, Secrtlary, ane fi Earliest announcement of a company with power " to execute trusts " in a corporate capacity. From the New York " Evening Post," August 6, 1822. The First Advertisement 15 answer any special purposes, either of a public or private nature, are far greater than those of individual executors or other trustees, who are always liable to casualties, which no fore- sight can guard against or prevent; as the numerous and frequent applications to the court of chancery for filling up of vacancies occasioned by death, insolvencies, or other causes, most incontestably show; and the expenses of such proceedings often swallow up a great part of the Trust Estate. By placing such property in the charge of this Company, who have continued succession, there can be no danger whatever of any such casualties, as all such property will be invested either at discretion in the most beneficial manner, for the sole advantage of the party conveying the same, or invested as the party may direct, within the strict provisions of any such trust. "The Company refer, for further informa- tion upon this subject, to their charter, a copy of which may be had by application at the office, where also the terms for any trust estate may be known." Appended to this advertisement were the names of eighteen Resident Directors, as i6 Story of Trust Companies follows: "Richard Hanson, James Magee, George Griswold, Benjamin Marshall, C. C. Cambreleng, James D'Wolf, Jr., Henry Whea- ton, Gabriel L. Lewis, Henry Mactier, James M'Bride, A. H. Lawrence, Benjamin Bailey, Thomas Franklin, John Johnston, Thomas S. Townsend, Francis Saltus, William W. Russel, Frederick A. Tracy." This list was augmented by the names of six out-of-town directors, and those of the Presi- dent and the Secretary. These were: "James Tallmadge, Poughkeepsie ; Christian Schell, Rhinebeck; William James, Albany; John L. Viele, Waterford; George Andrus, Adams, Jefferson County; David White, Palmyra, Ontario County; John T. Champlin, President; and Archibald Mclntyre, Secretary." This advertisement was continued day by day during the greater part of August, 1822, but before the end of that month a violent epi- demic of yellow fever was raging in lower New York. The result was an exodus of business concerns from the region affected. On Au- gust 27th the papers contained a notice reading : " Trust " as Part of a Title 17 "Farmers Fire Insurance & Loan Company "The office of this Company is removed for the present from No. 34 Wall Street to No.. 15 Park Place. Applications through the medium of the Post Office, or otherwise, will receive prompt attention." Three days later another announcement appeared stating that the Company's quarters had again been removed, still farther uptown, the new address being given as "618 Broadway, two doors above the Branch Bank." The continuing fortunes of this pioneer among trust institutions in the United States will be narrated in subsequent chapters, but the read- er's attention is next invited to an account of the first company to be formed with the word "trust" included as part of a corporate title. CHAPTER II 1830. NEW YORK LIFE INSURANCE & TRUST COMPANY The years just preceding and following 1822 witnessed numerous developments of importance in the country and many of its political subdi- visions. The population had growTi by 1820 to upwards of nine millions and a half; its center, however, was no farther west than a point within the State of Virginia. Louisiana was admitted to statehood in 18 12, Indiana in 1816, Missis- sippi, Illinois, Alabama, Maine, and Missouri in the successive years from 181 7 to 1821. The State last named brought the total in the Union up to twenty-four. In the spring of 1 81 6, Pittsburgh was incorporated a city; on July 4, 18 1 7, ground was broken for the Erie Canal; and in the same year the first line of packet ships was established between New York and Liverpool, while a steam ferryboat had 18 Some Contemporary Events 19 first plied the East River between New York and Brooklyn three years earlier. In 181 8, the steamboat Walk-in-the-Water, sailing from Buffalo, arrived at Detroit; 1819 saw steam navigation undertaken between New Orleans and St. Louis, and in the same year came a slowly reported account of the safe passage across the Atlantic of the steamship Savannah. Also, in 18 19 Cincinnati became a city, and in 1820 petroleum springs were first discovered in the State of Ohio. In New York City the first savings institu- tion, the Bank for Savings, was opened on July 3, 1 819, and so entered that field three years before the Farmers Fire Insurance & Loan Company was organized for trust business. New York's only theater, the Park, was de- stroyed by fire and rebuilt in 1821. Shortly afterward, in 1824, a great celebration took place in New York on the occasion of General La- fayette revisiting America. The year 1825 was notable for the completion and opening of the Erie Canal ; also the first railroad, the Mohawk and Hudson, was chartered, and, as illustrations of other developments following close upon the 20 Stoiy of Trust Companies beginnings of trust company operations in the Metropolitan City, it may be noted that in 1825 the Gothamites, as they had been dubbed by Washington Irving eighteen years before, first made use of illuminating gas, first attended Italian opera, and enjoyed the innova- tion of a Sunday newspaper. Within the ten years following 1820 such private institutions were organized as Bloomingdale Asylum, the Hebrew Benevolent and Orphan Asylum, the Eye and Ear Infirmary, the New York Bible Society, the American Tract Society, the National Academy of the Arts of Design, the Seamen's Friend Society, and the American Institute. During 1829 the first railroad locomotive was run and in the following year came another innovation in the form of an institution styling itself a "trust company." Similarly to all such enterprises begun within the early years, this concern cautiously laid plans with more than one string to its bow and, whereas the "Farmers Fire" had already estab- lished itself in the field of both underwritings and trust undertakings, the founders of this The Second Incorporation 21 newer concern set out to perform a dual func- tion as well, calling their institution the "New York Life Insurance and Trust Company." The charter was secured on March 9, 1830, after a considerable amount of heated debate had occurred at Albany involving the pros and cons of so unusual an enterprise. The author- ized capital was one million dollars and the trust powers conferred upon the company were very similar to those heretofore shown for the Farmers Fire Insurance & Loan Company. The charter constituted thirty trustees as a board, and an inspection of their names will show how representative a group of New York business men was thus identified with the new Company. The trustees were: William Bard, Stephen Van Rensselaer, Isaac Bronson, James Kent, Gulian C. Verplanck, Abraham Blood- good, Edward R, Jones, John Jacob Astor, Saul Alley, John Duer, Robert Lenox, Walter Bowne, Nathaniel Prime, Philip Hone, Peter Augustus Jay, John Mason, Peter Lorillard, Thomas W. Ludlow, William B. Lawrence, Jonathan Goodhue, Samuel Thompson, William James, Peter Remsen, Isaiah Townsend, Ben- 22 Story of Trust Companies jamin Knower, Stephen Whitney, Benjamin F. Butler, Thomas J. Oakley, Edward C. Delavan, and Garrit Storm. An organization meeting of these trustees was held on April 12, 1830, at the Merehants' Exchange and William Bard was chosen Presi- dent. Notice was shortly afterward given that a committee would open the books and receive subscriptions for the stock. This latter event occurred on the 7th of May. A resolu- tion was passed providing that the incorpora- tors, those named above with thirty-one others, might subscribe in each case for one hundred shares of the stock of the Company, which consisted of ten thousand shares, each of a par value of one hundred dollars, making a total of one million dollars. It was further stipu- lated that no person would be allowed to sub- scribe for more than one hundred shares and that the incorporators' subscriptions should be given first consideration, after which a distri- bution to outsiders should be made by lot, that is, "by drawing the letters," meaning letters of application. In this respect no thought seems to have been given to the modern Advertisements of 1830 23 method of stock allotments in the discretion of committees, with the frequently availed of privilege of "rejecting any or all applications." On April 226. an advertisement appeared informing the public that the Company's busi- ness would be conducted in the East Room of the City Bank, opposite the Merchants' Ex- change. Calls were made for 10 per cent, of the stock subscriptions and notice was given that, according to the seventh section of the charter, "the whole of the capital is to be invested in bonds and mortgages on unencumbered real estate within the State of New York, and at least one-half thereof shall be con- stantly invested on real property within the limits of the City and County of New York." This advertisement concluded with the words: "N. B. The Editors of Country papers who may think the above important to their subscribers, may, if they think proper, insert the above in their papers. Letters to the President must be post paid." On Saturday, May 8th, the New York Even- ing Post gave the Company a lengthy editorial 24 Story of Trust Companies notice, undoubtedly the first of its kind ever to appear. Among other things set forth in this article was the fact that the sixty-one incorporators had each taken his allotment of stock, making a total at par of $610,000. The editorial continued: "Applications were received for about $12,000,000, against which only $390,000 could be 'distributed this morning by lot- tery,' and as five per cent, premium was offered for it by the Brokers yesterday, there was great anxiety manifested to ascer- tain who were the fortunate persons who had drawn prizes. The result was made known about 12 o'clock by posting the names in the different bulletin offices. There were about thirty-one blanks to a prize. The stock was sold this day at the Board of Brokers for six per cent, advance." The editor of the Post completed his descrip- tion of these transactions by inquiring: "Does the eagerness with which this stock has been sought for indicate anything but a disposition for speculation? Or is it an evi- dence of money being plenty in our market Stock Quotations 25 and of a desire to make investments which will yield a fair interest?" Two days later, on May loth, there were local stock-exchange quotations published, cov- ering seven different issues. Save for 150 shares of United States Bank, ranging from 1303^ to 130^:4, no other stock was reported at as high a price as 255 shares of "Life Insurance and Trust Company" at 106^. On June 28th, a lengthy statement was published in the name of the trustees who gave "notice to the public that they are ready to commence the business which by their charter they are author- ized to transact." The features of the pro- posed business were described as follows : II I 'They will insure Hves and purchase and sell annuities. They will receive money in trust, pay interest thereon and accumulate the same. A third branch of business will extend to the acting as trustees under last wills and testaments, as guardians of estates of infants, as receivers of the property and effects of insolvents and dissolved or sus- pended corporations, as the committee of 26 Story of Trust Companies the estates of lunatics and as assignees for the benefit of creditors." Curiously enough the management laid out, from the very beginning, a policy of paying interest on deposits, a practice which in years to come was to involve the banks and trust companies of the entire country in a question of conflicting opinion as to their respective functions. Probably the thought of these early trust company founders was not directed to- ward competition with the banks, but their notice of the early summer of 1830 distinctly specified that — "The Company will receive money in trust, and issue certificates therefor, on the following conditions. No deposite shall be received imder one hundred dollars, nor shall any sum less than that amount be drawn un- less as the balance of an account. All moneys deposited in trust for a shorter time than one year shall be deposited for a certain number of months, not less in any case than two months from the date of the deposite. Interest at the rate of three per cent, per annum will be allowed on moneys not de- Interest on " Deposites " 27 posited for a longer term than four months. Where the term shall exceed four months and be less than a year, four per cent, will be allowed. Where the deposite shall exceed a year, the rate of interest shall be settled by special agreement. In all cases where the moneys in trust shall not be withdrawn at the expiration of the period for which they were deposited in trust, they shall remain with the Company for another period of not less than thirty days, and be allowed the same interest as if originally deposited for the extended period. Where the trust shall exceed a year, interest may be made payable before the principal shall become due, annu- ally, half yearly, or quarterly, as may be agreed on. Where the trust shall be for a shorter period than a year, no interest will be paid until the principal shall become due." Such were the beginnings of the second Ameri- can trust company. Its charter contained several unusual requirements. One of these provided that the trustees shall elect their suc- cessors, another that the trustees must in all instances be citizens of the State of New York. In 1830 the City Bank purchased the site 28 Story of Trust Companies of the old United States Bank at No. 40, now 52, Wall Street, erected in 1791. Here the trust company took up its quarters, and in the trustees' room there is still preserved to-day the cornerstone of the former bank building. An order was issued by the Chancellor of the State of New York under date of Novem- ber 19, 1 83 1, requiring the trustees to pre- sent a statement from year to year showing their "situation and affairs." The Company's answers from year to year comprise a set of the earliest trust company reports extant. Eight years after the charter was given, on January i, 1838, several interesting facts re- garding the Company's progress were recorded. Their $1,000,000 of capital was loaned out on bond and mortgage, none of which was in suit or judgment on which prosecution had been ordered. The Company had no other loans on bond and mortgage, aside from loans to moneyed corporations, or to their officers or agents, which amounted to $4,740,742,55. The total number of loans was 4079, of which thirty- two were being foreclosed, representing prin- cipal amounting to $57,307. The Company Loans on Stocks of Sister Companies 29 had collateral loans amounting to $481,268.41, and in a list of collaterals showed, among the rest, some shares of three sister trust companies of which mention is to be made farther along. The lists contained these particulars : Name of Stock Amount Loaned Number of Shares Market Value American Life Insur- ance & Trust Co. Farmers' Loan & Trust Co. Ohio Life Insurance & Trust Co. $31,679-56 24,423-51 25,250.00 764 553 280 I50 50 100 6% discount 6% premium 2% discount At this time the Bank of New York was quoted at 22 per cent, premium, the Man- hattan Company at 25 per cent, premium, and the Chemical Bank at 10 per cent, premium. Many of the fire insurance companies were at a discount, but the stock of the Utica Railroad Company was listed at 19 per cent, premium. It was stated that, "In the Company are the owners of the following stocks." Here followed a Hst of ten New York City banks showing that 30 Story of Trust Companies the holdings of these investors were $i 1 1,442.96. The Company was said to own three farms taken under foreclosure, two in Oswego, and one in Erie County. The "deposites" held in trust were $3,194,- 466.77. Although this was long before the days of reserve requirements, it seems a little strange to read that "the whole amount of money on hand the first day of January, 1838, was $35.56, being the balance laying in the Manhattan Bank, in which all the deposites of the Company are made." On this same date there was cash due from country banks, etc., amounting to $80,092.97. The books and office furniture were valued at two hundred dollars It was stated that : "the Company have received no money in trust to be invested at the risk and for the benefit of the persons for whom such moneys were received; all moneys which have hitherto been received in trust are at the risk of the Company and under their management; 1410 life insurance policies have been issued, of which 706 remain in force; the youngest Other Developments of the Thirties 31 age is twelve and the oldest seventy-one; the face of the policies represent $2,385,570; the officers and their salaries are : William Bard, President I5000 per annum Edward A. Nicoll, Secretary 4000 " " Chas. C. Palmer, Assistant Secretary 2000 " " Philip R. Kearney, Clerk 1800 " " Joseph R. Kearney, Clerk 250 " " and the Company have surplus and undivided profits of $311,714.88." The later growth of the New York Life Insurance & Trust Company, continuing down to present times, will be hereinafter sketched. Next in our story, however, are to be related some facts respecting other developments of the thirties in the fields of banking, trust company, and related affairs. CHAPTER III 1836. farmers' loan & TRUST COMPANY. THE "PENNSYLVANIA COMPANY," AND THE GIRARD The decade beginning 1830 was marked by several interesting events. In the spring of 1 83 1 the New York and Harlem Railroad, the country's first street railway system, was incor- porated. During the summer the Mohawk and Hudson Railroad was opened as a freight and passenger line; the launching of the famous steamship Great Western occurred in 1837; and in the same year a beginning was made in the line of express business. But as reminders of how early a period it was in which the trust companies were beginning to establish themselves, it should be stated that not until 1832 was Buffalo chartered as a city, and that Chicago only became an incorporated town in 1833. A year later, New York held 32 Expansion in Banking Affairs 33 its first election of a mayor by the people, and in 1834 s-i^d 1836 city governments were estab- lished for Brooklyn and Cleveland respec- tively while in 1838, Morse's invention, the telegraph, was being first exhibited and daguer- reotypes were being introduced in the United States. Despite the progress of these years, however, many grave financial problems were arising, and these came to a culmination in the disastrous failure of the Second Bank of the United States. President Jackson's controversies with Con- gress, and with the management of the Bank, began in 1829, and continued until the outbreak of the panic of 1837. The panic itself was preceded by a period of widespread expansion in the banking world. Governor Marcy of New York, in his message transmitted to the Legislature in 1834, reported that during the previous four years nine mil- lion dollars had been added to the banldng capital of the State; also that 105 new banks had published notices of intention to organ- ize with aggregate capital of fifty-six million dollars. 34 Story of Trust Companies He remarked: "Banks are now regarded as necessary establishments; but I cannot believe they are required to the extent now asked for. Banking privileges, not only as they are granted by this State, but as they exist in almost every country, are a monopoly which ought not certainly to be increased beyond the actual exigencies of the public." In the same message he advanced a theory which, to our modern view, sounds like an absurdity but which was probably not so utterly impractical in those days of over- extension of banking facilities. He said: "If any means could be devised to cause the stock to go into the hands of those to whom it is distributed, worth only its par value, I think there would be much less so- licitude for the increase of banks. Whatever value is given to the stock above the sum paid for it, in consequence of the franchise or peculiar privileges granted to the corpora- tion, may, upon any princi^Dles of justice, be withheld from the subscribers, and right- fully claimed by the State; and it is a cause Warnings Against Inflation 35 of regret that some provision to effect this object had not long since been adopted." While admitting some objections to this plan — for example, that former applicants would have received advantages now to be denied to others of equal merit, he suggested that an effective mode of curbing the evils would be by withholding from the original owners the premium on bank stock, by making offers of the latter at public sale, and reserving to the State the advance above the par value. Against this the drawback was presented that such an arrangement would facilitate the concentra- tion of stock in the hands of a few wealthy individuals, while the desire of supplying the wants of an exhausted treasury, or of increasing a favorite fund, might possibly operate as an inducement to grant applications which would not be sustained on the ground of public utility ; with the added objection that combinations by speculators at the sale might also prevent fair competition and engross the stock. Other suggestions by the Governor were a general reduction of interest on all loans and other 36 Story of Trust Companies contracts, so as to make banking business less attractive, and the limitation in amount of circulating notes to a sum equal to the capital of each bank. The newspapers of 1836 were filled with headlines of warning against the inflation then taking place in the creation of new moneyed corporations. Some of these read "Banks! Banks!" and one editorial writer began an article by inquiring: "Are the people of this country really becoming bank mad?" Never- theless within this era of over- development there were several new departures in the line of trust business, and some of these, although they embarked upon a tempestuous sea, were fated to outride the perils of the thirties and sail prosperously on during all the years to come. That the Farmers Fire Insurance & Loan Company was prospering is to be seen from an advertisement published early in 1831, which announced : "The Board of Directors of this company have this day declared a dividend of three and a half per cent, on the capital stock, Opinion Against ''Farmers Fire" 37 payable at their office on and after the third day of January next. The Transfer Book will be closed from the 24th inst." Its charter had been granted for a period of fifteen years, dating from 1822. Early in the year 1836, action was taken looking toward securing a renewal with a change of title to include the word "trust." Before this was accomplished a large amount of discussion took place regarding the doubted wisdom of trust company activities in general, and of the Far- mers' in particular. The public prints were opened to the debate; scathing denunciations appeared alleging the illegality of corporate appointments as receiver or guardian, when exercised by a "fire insurance company"; po- litical influences were complained of; the un- righteousness of most forms of current trust company enterprise was dwelt upon in a long series of protests and appeals addressed to the reading public. An article which appeared during this period over the signature "A Stockholder" is here copied from the New York Times (not however 38 Story of Trust Companies the present daily, established some fifteen years later) . It read : "Farmers Fire Insurance Company "A writer in the Journal of Commerce of Saturday last is guilty of a most impertinent interference in the affairs of this company. He takes, substantially, the ground that because the Farmers Fire Insurance Com- pany have the right to insure against fire, they are bound to continue that business against their own interests. This company has very large trust powers. They may 'execute any trusts to the same extent and in the same manner as any trustee, ' says the chapter expressly. This and other powers in the charter enables the company to receive money in deposite and to issue their bonds or certificates therefor redeemable years hence. This kind of business is much more profitable to the stockholders than the dan- gerous business of Fire Insurance and the directors of the company are entitled to the thanks of the stockholders for having dis- continued that branch of business, and developed the hitherto latent or dormant powers of the company to the great benefit of the publick. The Company has power to Protest Against Re-incorporating 39 insure lives, though but little, if any, of this business has been transacted, on account of the charter's expiring next winter. The institution is so useful to the publick, and the managers of it so highly respectable and wealthy, and have so much political influ- ence, that there is no doubt the charter will be renewed and made perpetual this winter, and the name of 'Fire Insurance' stricken out. Now, is it not reasonable that a com- pany possessing these powers should not lay them aside, and go on with a Fire Insurance business? It is to be remembered that the Fire Insurance business is wholly incompati- ble with the business now carried on by the Company. "Who would deposite money with the Company, who would buy their bonds (and they have a half a million of dollars of bonds now in circulation, and as much more is soon to be out, redeemable in twenty years) if the Company continues the Fire Insurance business ? "Who if the Company is liable to be ruined in a single night by fire risks would take their grant of annuity for a term of years? ' ' Who would sell the Company an annuity and take their bonds or other evidences of debt in payment ? 40 Stoi*)^ of Trust Companies "Other Companies for Fire risks can be created, and this Company left to pursue the business most profitable to the owners of the stock and quite as useful to the publick." This called forth an attack upon the Com- pany, then and now the oldest of its kind in the country, in the form of the following letter to the Evening Post : ' ' From the tenor of this argument (quoting ' Stockholder's ' letter) I presume it comes from the pen of some one of the managers of the institution who are stated to be so highly re- spectable, a?id wealthy, and to have so much POLITICAL INFLUENCE that there is no doubt the charter will be renewed and made perpetual this winter and the name of 'Fire Insurance* stricken out. Some of these most respectable, wealthy, and influential managers of this insti- tution have been suspected of having some- thing to do with the management of the able journal in which the communication of 'A Stockholder' appears. "The New York Life Insurance & Trust Company was chartered in 1830, with a capital of 07ie million dollars, and who is there now in this community, except the Political Influence Charged 41 persons interested in that institution, that does not regret it. The Farmers Fire Insurance and Loan Company, with a capital of two millions oj dollars, claims substantially the same powers as the Trust Company, but they only want the legislature to be so kind as to grant them further privileges. As I am one of these unfortunaJ;e men who are opposed to all monopolies of this description, and happen to know something of this insti- tution, I feel disposed to make some little examination into its actual powers, and its claims to the favor and kindness of the repre- sentatives of the people. "The Farmers Fire Insurance & Loan Company was chartered for fifteen years on the 28th of February, 1822. On the 17th of April, 1822, an amendment to the charter was enacted conferring on the Company certain limited trust powers. For thirteen years the Company was content with the ample profits secured by their legitimate busi- ness of fire insurance, but after the N. Y. Life and Trust Company sprung into exist- ence, clothed with immortality and perfect freedom of action, the Farmers Fire Insurance and Loan Company began to feel the spirit of avarice and gain stirring within them. Three ineffectual attempts were subsequently 42 Story of Trust Companies made by the President of the Company to prevail upon the legislature to amend the charter by striking out the name of 'Fire Insurance,' and making it a close corporation, the directors having power to perpetuate their own succession and existence in office independent of the stockholders, and accord- ing to the example of the New York Life In- surance and Trust Company. Within the last year, and since the death of that gentle- man, and with a view to the operations this winter in the legislature, much pains have been taken to select from the mo7iopoly democrats throughout this state and city, such persons to share the plunder contem- plated to be seized in the name of this corpo- ration, as from their political standing with the democratick party were supposed to be most able to procure the legislation sought for in aid of the charter. Simultaneously with this measure of securing pubHc influence, the capital has been increased to two mil- lion dollars, their legitimate business of fire insurance has been discontinued by a bye- law of the company, and fancying that an amendment of the 17th April, 1822, confers ample authority, all the energies of the company are now devoted to that description of business indicated by the published bye- A ** Charmed" Corporation 43 laws and advertisements of the Company; their main business being however the re- ceiving of money on deposit at a low rate of interest, issuing therefor ^certificates^ of deposit, another name for post notes and bonds transferable and bearing interest, the whole operation being nothing else, substan- tially, than a revival, under the sanction of imposing names, of the reprobated business of the Bond Companies of the memory of 1826. Application is now made, or soon will be, to the legislature to get rid of the name which the legislature gave the Company as a fire office, and for other material amend- ments in aid of the financial operations and brokerage now carried on by them. "Since the late calamitous fire, the mer- chants and other citizens of New York are destitute of insurance offices, except two or three companies with small capitals, and calculated only for the up-town business where they are located. The consequence is, that premiums of insurance to a large amount are now sent abroad, seeking policies in other cities, in the villages in all parts of the United States, and with the agents of a British Fire Company at Norfolk. Three times the amount of the former rates of insurance are now required to be paid by our 44 Story of Trust Companies citizens, and to strange companies, of whose solvency they can know but Httle. Under these circumstances, the citizens naturally looked to the Farmers Fire Insurance Com- pany for relief, and it was for many days believed that in this dilemma that the Com- pany would not refuse to answer the end for which it was created, but keeping in view the object of their existence, would resume the business of fire insurance on fair and usual terms, to the manifest accommodation and benefit of the city. With a capital of two millions of dollars this company might supply, to a great extent, the wants of the city in respect to fire insurance. But dealing in money, stocks, and other securities, and issuing 'certificates' for the payment of money, proves so profitable that this corpora- tion is charmed away from its publick duty, and they shut the door in the face of citizens who ask for fire policies, and tell them 'the Company has declined that business.' This conduct on the part of the Farmers Fire Insurance and Loan Company has induced an examination of their charter, and an inquiry has been instituted as to the power of the company to carry on the business they propose to do in their advertisements, and which it appears by their bye-laws they are Re-incorporation of Farmers 45 now transacting. But as this communica- tion might be inconveniently long, if you should think proper to publish it, I will defer the comments upon the charter and present them in another communication. Those comments will be founded upon the reasoning of opinions of two of the most able counsellors in this city. These opinions I have had an op- portunity to examine with care. If they were under my control I would present them en- tire ; and I shall not fail to give them as nearly and literally as I can recollect their terms. These opinions, I have been informed, have been examined and sanctioned by one of the ablest lawyers in the United States, and for- merly of this State. With these aids I pledge myself to show, that not one of the powers specifically claimed by *A stockholder' for the company is found in their charter, — that if such latent and dormant powers be exercised, it is in violation of the charter and of the laws of this State; and that the advertisement of the company bears on its face statements calculated to mislead the publick. " (Signed) Amos.' »f Notwithstanding this and like disputes, and denials of the consistency with which the 46 Story of Trust Companies Farmers' managers had adhered to original charter provisions, the appeals to the "pubHck" and the attacks upon the monopolists of the " democratick " party came shortly to an end, and in 1836, on April 30th, the Company ob- tained its new charter and by virtue thereof assumed as its new title "The Farmers' Loan & Trust Company." The business was continued in Wall Street the capital was increased to two million dollars and was constantly advertised during the summer and fall of the year named as being "the largest of any similar institution in this State" and as "principally invested In bond and mortgage of real estate." The President of the reorganized institution was Henry Seymour; and its function of insuring fire risks now disappeared; an Actuary and a Physician were named upon the ofificial list, and some life insurance business was transacted. As a matter of fact the only curtailment of powers under the new charter was a provision whereby the Company was no longer permitted to engage in the business of fire risks. But life policies were written in the early years LIFE INSURANCE. TO THOSE WHO, IN THE EVENT OF THEIR DEATH, WOULD MAKE PROVISION FOR THE SUPPORT OF THEIR FAMILIES. FARMERS' LOAN AND TRUST COMPANY, or the City of IVew-York, -WITH A CAPITAI. or 2,000,000 Z>OU:.ARS, IS ENGAGED, INDEPENfcENT OF ITS OTHER BUSINESS, I.N THAT OF The objects and benefits of which are, to afford mutual relief and maintenance to the widows, children, or iriends of deceased in- dividuals, and to all who ar.3, or may be, dependant upon the lives of others for a support. This Company will insure in sums not less than SlOO, nor exceeding ^5,000, and for ony term, whether it be for one or more years, or for the duration of life ; the prcmiuni to be paid to tTie Company, depending upon the term and tlie age of the party insured. For example ; — A person aged thirty years, v^ishing to secure to his wife or family, or friend, or any other person, a certain sum of money, to be paid them after his death, say a sum of $100, may do so by paying to the Company a premium of $2^^ every year during his life. Should he die immediately after effecting the insurance, the Company would pay the amount insured. Should the party wish the insurance to continue for a term of years only, say for seven years, the annual premium would only be .'sl,?i. Should the term be for one year, tlie premium would be $1^- Should the age be less than thirty years, the premium would be less; if over thirty years, the premium would be greater. An individual may also insure the life of another person, pro- vided he has an interest in that life to the amount insured : by which means a debt or any sum of money dependant upon the life of the insured may be secured. Life insurance, in addition to the benefits derived from those ex- cellent institutions. Savings Banks, is another and more effectual method of providing for the future welfare of relatives and friends: the advantages to be derived from it are attained with ease and certainty, and at a trifling cost. Money is also received by this Company in deposite, in trust, for any period over thirty days, and mterest allowed on the same. Office of the Company, ) R. K. DELAFIELD, No. 34 Wall Strekt, } Artniary and Secretary. New York. \ Circular issued about 1836, describing Benefits of Life Insurance. An Early Insurance Policy 47 following 1836, and one of the oldest of these, v/hich was also the last to be surrendered and its amount paid to beneficiaries, hangs to-day in a frame on the wall of the Directors* Room. It bears date, "Thursday the 15th day of February, 1838." In the application which forms a part of the policy it was stated that the "sum to be assured is $2000." Among questions and answers incident to the work of the medical examiner was set forth the printed query: "Has the party had the gout?" with the response written in: "He has not"; again, "Has the party had the smallpox?" the answer being: "He has not"; but to the query, "Has the party had the cowpox?" the reply was, "He has." The assured lived to be over ninety years of age, and paid his semi-annual premiums until a few years ago when, upon proofs of his death furnished the Company, a remittance was made to his heirs of two thousand dollars in full settlement of the above described contract. During the same spring of 1836 two notable events occurred in Philadelphia trust company history. On February 25th the charter of 48 Story of Trust Companies The Pennsylvania Company for Insurances on Lives and Granting Annuities was supplemented by a grant of authority to enter into the busi- ness of executing trusts. Plans for this enlarge- ment had been in contemplation as far back as 1 83 1, and Harrison S. Morris in his admirable Sketch of the Pennsylvania Company relates that the directors had regard to "the great success of what in India at this time were called agency houses, — concerns organized to transact busi- ness for trustees or individuals, to receive moneys on deposit, and to administer estates." His narrative shows that a committee early in 1 83 1 reported favorably upon the plan of engaging in the new form of business, and that the Board of Directors had on January nth resolved "to enter into the business of trusts," directing "that the President, in conjunction with Horace Binney, John Sergeant, and C. S. Miller, be requested to prepare the forms of documents that may be required for conducting the business." But, as explained by Mr. Morris — "it was not the fashion of our grandfathers Re-incorporation of "Pennsylvania" 49 to enter upon an untrodden field even after so much deliberation as this. There seems to have been cause for hesitation and delay. Perhaps, as has been suggested, there were rumors of financial trouble among the parent concerns in India; or, more likely still, as is indicated by the subsequent action of the Board, the right of the Company to embark in the new order of business without enlarged powers from the Legislature was, in spite of exalted legal advice, held in doubt ; for, at an adjourned meeting of the Board, held on November 3, 1832, the promising ventin"e was, for the time, put off by a resolu- tion to the effect 'that it is inexpedient for the Company to go into the trust business, and that the subject be indefinitely post- poned.'" However, the needful plans were consum- mated by the later date already mentioned, and the new undertaking proceeded under the Presidency of Thomas Astley. At this time the Company was lodged in a dwelling house at No. 72, now 138, South Third Street. From 1837 to 1857, Hyman Gratz served as President, the Company removing in May, 1840, to Wal- nut Street above Third — then No. 66, now 304. 4 50 Story of Trust Companies These premises had been occupied by the Philadelphia Saving Fund Society and the Pennsylvania Company's lease was originally for ten years at an annual rental of twelve hundred dollars. The second Philadelphia company to engage in trust business was also granted its charter by the Pennsylvania Legislatiire of 1836. It, like the two institutions in New York, and its contemporary in Philadelphia, began opera- tions in the insurance field, and like them sub- ordinated, at least in the form of its corporate title, the new and undeveloped idea of trust business. This institution was incorporated under an act approved March 17, 1836, as The Girard Life Insurance, Annuity and Trust Company of Philadelphia. On May 19th of the previous year some Philadelphia citizens who had been members of the Girard Savings Association, held a meeting at which it was voted to amend the corporate title to the Girard Beneficial Association. Toward the end of the year the managers, seemingly with an eye upon experiments being tried in other directions, decided to enlarge the scope of this Incorporation of the Girard 51 association's business by the addition of a department to be devoted to life insurance operations. The Legislature was memorialized with the result above described. On March 26th an organization meeting of the managers was held at which Benjamin W. Richards was chosen President. The Company's first office was in rented quarters on the first floor of No. 159 Chestnut Street (old number), the upper portion of the building being occupied as a dwelling. The amount of capital subscribed was $300,000, payable in instalments spread over a two-year period and the charter conveyed a privilege within two years of the incorpora- tion to increase the stock to $500,000. This increase was effected in 1838, but the addi- tional funds were apparently not needed and the stock was repurchased later, although the Company's books continued to show nominal capital of $500,000, with $300,000 paid in, until 1856, when authority was given for can- celing the $200,000 of excess capital, as recorded on the general ledger. The Company's cor- porate powers were those of the other early trust companies and it appears to have been 52 Story of Trust Companies the first concern to do a business of receiving money on deposit "subject to cheque or on time." The official and clerical force of the Company at the time of its inception was made up of four members, these being a president, treasurer, actuary, and runner. The President, Mr. Richards, remained as the Company's head until his death in July, 1851, and with his as- sociates witnessed many stirring events both before and during the panic days of 1837. Something of the current scope of banking affairs and some of the ill effects of over-develop- ment on the part of trust company promoters will next be described. CHAPTER IV BANKING DEVELOPMENTS. OHIO LIFE INSUR- ANCE & TRUST COMPANY. PANIC OF 1 837 In 1837, just before the outbreak of the great panic of that year, Levi Woodbury, Secretary of the Treasury, made a special report to the House of Representatives at Washington on the subject of the number, capital, and "de- posites" of banks throughout the country. Some of his figures were admittedly based upon incomplete returns from certain States, and there would seem to be some inaccuracies, particularly in the light of statistics prepared forty years later and published in the annual report of Comptroller of the Currency, John J. Knox, in 1876. But by combining both sets of figures, and including as deposits the amounts due to banks, the aggregates for 1835 are found to have been : 53 54 Story of Trust Companies Number of STATE (in order of size) batiks (includ- ing branches, mostly in tJie Southern States) Capital Deposits (including due tj banks) New York 86 $31,581,460 $36,640,526 Massachusetts 105 30,410,000 16,411,799 Louisiana 41 26,422,145 11,104,295 Pennsylvania 43 17,958,444 12,767,453 Maryland 14 7,542,639 5,268,746 Rhode Island 61 8,75o.5«i 1,888,575 Ohio 29 6,390,741 2,758,007 Virginia 5 5,840,000 3,265,964 Connecticut 31 7,350,766 1,282,703 Mississippi 10 5,890,162 2,569,749 Georgia 23 6,783,308 1,514,501 Alabama ' 5 5,607,623 2,256,504 Kentucky 9 4,898,685 2,265,387 Maine 36 3,785,000 1,651,224 New Jersey 24 3,970,090 1,139,827 District of Columbia 7 2,613,985 1,463,299 South Carolina 4 2,288,030 1,600,956 Tennessee 7 2,890,381 783,797 North Carolina 4 2,464,925 867,015 New Hampshire 26 2,655,008 441,189 Michigan 7 658,980 702,179 Delaware 3 730,000 500,848 Vermont 17 921,815 182,874 Indiana I 800,000 131,221 Missouri 1 Branch 582,125 Illinois 2 278,739 129,434 Florida 2 603 114,320 73,656 189,597,827 110,243,853 Add Bank of United States I 604 35,000,000 16,322,129 Total for Country $224,597,827 $126,565,982 Banking Totals of 1835 55 These two money totals are exclusive of some 123 odd millions of dollars of outstanding circulating notes and miscellaneous liabilities. The aggregate liabilities of the country's banks appear, therefore, to have been a matter of something less than 475 millions of dollars, on or about January i, 1835. The significance, or rather insignificance, of these early aggregates of capital, deposits and circulation as contrasted with those of to-day will be made apparent in later chapters, but, in passing, the reader should have in mind one marked aspect of the foregoing totals. Our ancestors of eighty odd years ago conducted their banks with contributions to capital equal to nearly double the volume of deposits; while to-day twenty-seven thousand odd banks, private bankers, and trust companies, combined, throughout the country, with about twenty- six billions of dollars of total resources and liabilities, have approximately seventeen per cent, of capital and undivided profits against eighty-three per cent, of other liabilities. Also, we may take just a moment to grasp an amazing fact, before which even modern minds, accus- 56 Story of Trust Companies tomed to big things, must marvel. The un- dreamed of result accomplished since the days of 1835, when America's banking wealth aggre- gated less than five hundred millions of dollars, is that the total has gone through a doubling and redoubling process nearly six times over; that the ratio of 191 6 to 1835 is as 50 to i ; that to-day a single New York bank, the National City, shows 615 millions of dollars of total resources, and a single New York trust com- pany, the Guaranty, is not far behind with 520 millions. Next and before returning to the subject of trust company developments, a little picture is to be drawn of the New York State banks of the period. The eighty-six banks mentioned in the preceding tabulation had numbered four years earlier, in 1831, only forty-nine. Of these, thirty-four were up-state institutions and fifteen were in what is now New York City, including the Bank of Long Island. The State Banking Commissioners in their first report, as of January i, 1831, showed the capital of these fifteen metropolitan banks to be $14,301,200. This sum did not include, how- Condition of New York City Banks 57 ever, any part of the capital of the Bank of the United States, with its three branches in New York City, The commissioners showed in this report the amount of each bank's stock owned by non-residents of the State, the quantity of bank notes in circulation, of specie on hand, of directors' liability, and of stock owned by the directors. But the report was silent on the question of other assets and liabilities; in fact, the explanation was made that "a statement of assets and deposits is not shown because publicity might be the cause of affecting the comparative reputation of some injuriously." Practically all of the banks were paying divi- dends at this time ranging from 2 to 8 per cent, per annum, and the Mechanics Bank, after twenty years of operations, was disburs- ing as much as $140,000 a year, being 7 per cent, on its $2,000,000 of capital. Five years later, in 1836, this institution's balance sheet was the largest in New York, showing footings of $9,035,500. On the other hand, the City Bank showed total resources of only $2,571,844. Its capital was $720,000; its undivided profits $160,805; its circulation $345,659; its "depo- 58 Story of Trust Companies sites" $498,799; during 1835, it had paid $50,400 in dividends, 7 per cent, on its capital. New York's two trust companies, the old Farmers Fire and the N. Y. Life Insurance & Trust, had a western rival fully two years before the two Philadelphia companies, as already described, acquired trust powers. This was a Cincinnati concern, of ample proportions but destined less than a quarter of a century afterward to come to an unfortunate ending. Its title was The Ohio Life Insurance & Trust Company, and it was granted a perpetual charter on February 12, 1834, with authority to issue $2,000,000 of capital. It had permis- sion to issue notes, until 1843, "for not more than twice the amounts of deposits allowed to remain for not less than a year, and for not more than half the paid-up capital invested in loans on real estate"; the charter was to be forfeited if it should suspend for more than thirty days. Its first President was Micajah T. Williams. Four years after the Company was organized, a voluminous report was issued showing that there were nine trustees in Cincinnati, two in An Ohio Company 59 Columbus, one in Dayton, two in New York, one in Boston, one in Philadelphia, and one in New Orleans. The Company's banking de- partment loans amounted to $1,123,780.21. It had notes in circulation in the sum of $433,765, and owned $5,000,000 of stock of the State of Ohio, redeemable in 1856 and i860 and bearing 6 per cent, interest. That the Company inclined more to banking than insurance business was revealed by the statement that the Company had received nothing upon the sale of annuities. Its life insurance premiums, covering only twenty lives, had amounted during the four years to only $4921.75. But that trust company func- tions were either not yet understood or else not particularly exploited, would seem to be indicated by a brief admission contained in the report that "nothing had been received in trust to be invested at the risk of the depositor," and that "the Company is not liable for any amount as receiver." The Company had a branch office in New York by 1839. This was opened at No. 62 Wall Street and the location changed frequently 6o Story of Trust Companies during the next eighteen years which preceded the Company's suspension. In 1835, the Southern Life Insurance & Trust Company was chartered. It claimed privileges of the most extensive and diversified character. Shortly afterward it was described in Sumner's History of Baftking, as follows: "Its capital is $2,000,000.00, with the privilege of increasing it to $4,000,000.00. It is directed to report to the Court of Appeals annually, which report is made to Council. No such report has ever been made, or any other. The capital stock of said bank is to be taxed at the same rate as all other personal property of the Territory, but the tax is not to exceed $5,000.00. The Territorial guaranty is to be given on the bonds of the corporation under certain con- ditions. This bank claims to be located at St. Augustine, but, it is said, is chiefly con- ducted in New York, and has an agency at Appalachicola." In spite of the mysteries surrounding this institution it seems to have continued in busi- ness until at least 1839, and in fact did have 00 o o o U a V 3 CO w d a> o o o o *c a> (a d A Connecticut Institution 6i an agency in New York, at No. 12 Wall Street. Shortly afterward it disappeared from the city directory and is to be remembered no further in our story. Connecticut had its own little trust insti- tution as early as 1837. It was known as the Fairfield Loan & Trust Company, and although its operations were of short duration, the reader may be interested to see a copy of one of the Company's fifty-cent currency notes, as reproduced herewith. This interest-bearing obHgation was a forerunner of the "shinplas- ters" soon to make their appearance and serve for a single generation in substitution for minor coin as a part of our circulating media. For several years preceding 1837 financial affairs throughout the nation had been greatly disarranged. In 1832 President Jackson vetoed the rechartering of the Second United States Bank. In 1836 the Legislature of Pennsyl- vania granted a charter to the United States Bank of Pennsylvania for thirty years. Nicho- las Biddle, the President, viewed the new charter as more favorable than the one ori- 62 Story of Trust Companies ginally obtained from Congress, but Horace White relates in his book, Money and Banking: "An enormous bonus was paid, or pro- mised, to the State, two millions in cash, and one hundred thousand dollars per year for twenty years, besides various subscriptions to the stock of railroads, canals, and turn- pikes in the State. Benton said that every circumstance of its enactment betokened bribery of the members who passed it, and an attempt to bribe the people by distribut- ing the bonus among them. There is too much reason to agree with him. The Gov- ernment was still a shareholder in the Bank to the par value of $7,000,000 and there was some trouble in getting this money out, but it was paid in four annual install- ments. "When the Bank found itself, with its enormous capital, rcs;tricted to Philadelphia and the neighboring country, it gradually turned itself into a financial company. Hitherto it had confined itself to the banking business as strictly as banks usually do, discounting commercial paper, buying bills of exchange, and dealing in coin and bullion. Now it advanced money largely on stocks. The Panic of 1837 63 Before March, 1836, it had twenty millions thus invested. The country was now in the fever of speculation which culminated in the panic of 1837." In May of that year suspensions occurred everywhere. In New York there were riots, and placards appeared reading : NO RAG MONEY GIVE GOLD AND SILVER DOWN WITH THE CHARTERED MONOPOLIES During the year eight banks failed in Massa- chusetts, nearly all in Boston, or the immediate neighborhood. They represented capital of about four million dollars. The panic con- tinued with great severity until the resumption of specie payments, which occurred in New York during May, 1838. The banks in Pennsylvania and the Southern States resumed in August, but again suspended a month later, and this con- dition prevailed during many months thereafter, only the New York banks continuing to deal on a basis of specie payments during the year 1840. Finally in 1841, following suspensions 64 Story of Trust Companies by the Bank of the United States in 1837 and 1838, there was a third and complete collapse of that institution, but shortly afterwards financial conditions again righted themselves and by degrees general business proceeded on more normal lines. The panic of 1837 has usually been regarded as the most severe depression ever experienced by the country, unless perhaps the greater scope of the railroad failures of 1893 and the banking troubles of 1907 may be said to have covered wider areas of commercial and financial distress. Nevertheless, it appears that such few trust companies as were then doing busi- ness in New York, Philadelphia, Cincinnati, and the South, w^ere not in a single instance driven out of business during the acuteness of the troubles of that period. Toward the close of the year 1837, ^^i^ after some little recovery had been made from the depression of the summer of that year, an in- teresting event occurred in New York City. On November 27th there was convened, in the City Hall, the first banking convention of im- portance to be held in the country. This An Early Bankers' Convention 65 was composed of 142 delegates representing nineteen different States. One of these came from as far south as Georgia, three were from Kentucky, and what was then the extreme west was represented by one delegate from Indiana. The purpose of this gathering was to take measures looking toward an early resumption of specie payments. William Meredith, Presi- dent of the Schuylkill Bank of Philadelphia, acted as chairman. Albert Gallatin, George Newbold, and Cornelius Heyer were appointed a committee to publish the views of the con- vention. The last named was President of the Bank of New York, and one of the other an- cients in attendance at the time was a well- known banker of the period. President of the Tradesmen's Bank and one of the incorpora- tors of the New York Life Insurance & Trust Company, by name Preserved Fish! CHAPTER V 1838. FREE BANKING ACT. IRRESPONSIBLE COMPANIES IN NEW YORK AND THE INTERIOR Financial corporations in New York State, prior to 1838, consisted of branches of the Bank of the United States, the older commercial and savings institutions enjoying special charters, and safety fund banks, created under the laws of that year, together with the trust companies, as heretofore described. The plan of the safety fund banks was a required deposit with the State equal to one-half of one per cent, of their capital stock during each of six years. This 3 per cent, of the capital of the banks consti- tuted a fund for the redemption of circulating notes and other indebtedness of any of the banks becoming insolvent. In April, 1838, the so-called free banking system was estab- lished. Its methods and results were de- 66 Operations of Free Banking Act 67 scribed eleven years later by Millard Fillmore, then State Comptroller, in the following terms : "There was nothing in the act that re- quired individual bankers to deposit any particular amount of securities before they commenced banking. The country was then flooded with stocks from almost every State and the consequence was that numerous banks sprang into existence under this law. Repudiation soon followed, many States that did not repudiate failed to meet their obligations, confidence was impaired, credit was shaken, and stocks generally depreciated in the markets, the consequence was that many banks failed and the Legislature par- tially retrieved its error, in 1840, by exclud- ing all stocks except those issued by this State, and required those to be, or to be made, equal to a five per cent, stock. "Finding the small banks unsafe, the Legislature in 1844 required individual bank- ers to deposit securities to the amoimt of at least $50,000 ; and associations to the amount of $100,000 before they were entitled to any notes for circulation. The stringency of the money market in 1847, admonished the 68 Story of Trust Companies Legislature that the security of these banks was not sufficient; and in 1848 they required the stocks deposited to be stocks of this State, and equal to six per cent, stock; and the bonds and mortgages to bear an interest of seven per cent, per annum, and that they should not be for an amount exceeding two- fifths of the value of the land covered by the mortgage. This is the free bank system, as it now stands, and it takes its name from the fact that all are freely permitted to embark in it who comply with the rules prescribed. It is no monopoly — no exclusive right granted by the Legislature to a favored few, but it is open to all who can give the requisite security." In an earlier State Comptroller's report, transmitted to the Legislature in the first week of January, 1839, a list was presented of fifty- three banks which had filed certificates at Albany during the eight and one-half months following the passage of the Free Banking Act. Among some strange old figures contained in this report were the totals of property values as they existed at the time in New York County and State. These were: u < a pq u 03 +^ u CI 3 00 73 3 a o< S o u +-> i-i •♦-> •a o ^u'^-ji:- -T- ''S--2'' '•' "''"■ •"'"■ "'■" ''^" ""' ^'*^ ''^- '"'■ ^- ^-^ 00 l-i a> a> at , O -M M 3 u a> J3 2 j:5 "3d to O 3 u T3 a> 3 to to C 3 O a o Remarkable Bank Growth 79 $400,000 to complete their building, by the creation of a large number of bonds in the name of one person, to whom a mortgage had in turn been given. The legal battle over these ques- tions was bitter and prolix. Apparently the Court had not before had to deal with problems involving rights under corporate mortgages securing bonds, but the decision finally reached was that no fraud had been intended and that the bonds were valid instruments. Throughout the country the growth of the state banks during the four years from 1850 to 1854 '^^s remarkable. Twenty years later Federal Comptroller Knox prepared statistics showing that within those five years there had been gains of approximately fifty per cent, both in the number of these institutions and in their capitaHzation, circulation, and deposits. The actual figures were: Number of State banks Capital stock Circulating notes Deposits, including due banks to 1850 824 $217,317,211 131,366,526 146,304,046 1854 1208 $301,376,071 204,689,207 238,510,906 8o Story of Trust Companies Of the 384 new banks established during this short period New York State contributed 123. The Bankers Magazine of November, 1854^ devoted considerable space to the subject of trust company affairs. It showed that on July 31st of that year the New York Life Insurance & Trust Company had a little over $6,200,000 of total resources and liabilities, including $1,000,000 of capital and $422,000 of surplus. The United States Trust Company on the same date, and after one year of opera- tions, showed $1,000,000 of capital, $480,000 of deposits, and $46,000 of surplus. Not unnaturally the writer of the article seemed to find it wellnigh impossible to sepa- rate the two theories of Hfe insurance and trust company business. He declared: "The Mutual Life is in effect and sub- stantially so a trust company and a very important trust too. It embodies the savings of at least 7834 persons, to whom (or for whom) policies have been issued and are now in force, of which 6720 are for life, 946 for the term of seven years, and 168 for shorter periods." Editorial Comment in 1854 81 He remarked also that it had long been a custom for executors, administrators, and trus- tees to invest trust funds in bank stocks, and that this in the course of time had come to be regarded as an unsound practice, the State of Pennsylvania having in 1853 decreed that such investments were invalid and made at the personal risk of such trustees. He concluded his observations by saying: "At present in New York State the trustee can only protect himself from risk when he invests the trust funds in real estate or government securities, or invests by order of the Court." This was a period in which little substantial progress was made in the way of sound trust company development. Their plans and ulti- mate purposes were not very clearly defined and fell far short of being understood by the public. It would seem that both the panic of 1837 and the subsequent outcropping of irresponsible state banks, some of them calling themselves trust companies, must have discouraged the more conservative class of business people from 82 Story of Trust Companies launching new enterprises in the trust company field, at least on a scale, or in any instance having a personnel, to be compared with the companies founded down to 1836. From this year onward, during the seventeen years which elapsed until 1853, no American trust company, of those we know to-day, took out a charter. In 1853, the same year in which the New York Clearing House was formed, a new company appeared in New York City, the first to bear a title without an indication of any insurance functions whatever. This was the United States Trust Company, which began business at No. 40 Wall Street during the early summer of that year. Some of its first efforts and accomplishments will be narrated in the chapter which follows. CHAPTER VI 1853. UNITED STATES TRUST COMPANY OF NEW YORK The United States Trust Company of New York was chartered on April 12, 1853. Among its incorporators were Peter Cooper, John J. Phelps, Erastus Corning, Shepherd Knapp, and Wilson G. Hunt. The charter was the basis of all special charters of a similar character sub- sequently granted in New York, as well as of the general law for the incorporation of trust companies which, upon its adoption thirty-four years later, terminated the plan of granting special charters to New York trust companies. The first office was located at No. 40 Wall Street where Joseph Lawrence, the first Presi- dent, was elected at a meeting of the trustees held June 14, 1853. Mr. Lawrence held office until May, 1865, when on account of failing health he became obliged to surrender his important duties and was succeeded by John 83 84 Story of Trust Companies A. Stewart, whose services as President con- tinued for nearly forty years thereafter. Early in the Company's existence a contro- versy arose involving the question of whether the corporation, in its capacity as receiver for the Knickerbocker Savings Institution, was not indirectly conducting a banking business. In 1854 the Knickerbocker had made a small loan on some bank stock which was questioned as being a possible violation of its charter or of the 1853 savings bank law. The New York State Court of Appeals decreed that the insti- tution had been within its right, the law being only a prohibition against the loaning of saving institution funds on mere personal securities, but the trust company found itself in the posi- tion of being challenged as to its right to con- duct a banking business in so far as this might be required in the course of administering the receivership. Finally after due deliberation, the same Court ruled in favor of the trust com- pany by declaring: "The duties of this Company are prescribed by the second section of its charter which do not include banking powers." Reporting to Supreme Court 85 Adding, as the Court's opinion: "The charter of the United States Trust Company is not unconstitutional. It is not a corporation created for banking purposes within the meaning of Section 4 of Article 8 of the constitution." The charter of the Company contained a provision (Section 20) that: "The Board of Trustees shall exhibit annually to the Supreme Court, on such day as said Court shall appoint, a full statement of their affairs, in such form, and verified in such manner as the Court shall direct. The Court, should it be deemed proper, may refer such statement to a referee, with direction to make a full and thorough investigation into the affairs and management of the Company, and to report his opinion in relation to the abiHty and integrity with which its affairs are conducted, the prudence and safety of its investments, the security afforded to those by whom its engagements are held, and the advantage derived by the public from its operations. The expenses of every investiga- tion so made shall be defrayed by the Com- pany in such sums as the said Court shall certify to be reasonable and just." 86 Story of Trust Companies Agreeably to the foregoing, annual reports were made for a number of years by referees of the Supreme Court. Their findings were the result of elaborate examinations and some of the facts and circumstances set forth in the report of 1855 are sufficiently of interest to be here related. It was a document of seventy- three pages and showed among other things that there had been 260 original subscribers to the stock two years earlier, of which number 113 continued to hold their shares, but that 147 had sold their stock and that the Company had never made any loan upon security consisting of its own shares. It was also reported that as many as 1343 shares had been transferred during the year 1854. The officers of the Company were three in number: Salary Joseph Lawrence, President $5000 per annum John A. Stewart, Secretary 3000 " " G. P. HiNMAN, Bookkeeper 1200 " " The Referee described how both the Presi- dent and the Secretary were each required to keep a record book showing in duplicate the Precautions in Early Management 87 details of each day's business transactions. He said: "The precautions taken by the Company bring every transfer of stock under the im- mediate inspection of its President, and the book which he himself keeps, and in which he enters every certificate that is surren- dered, and every one that is issued, is an additional check upon his subordinates, and imposes upon him primarily the responsibility for any error. This practice is a wise one, and the labor being voluntarily assumed by the President, shows how prudently and cautiously his position is filled." But he offered a criticism of the manner in which the record books were kept, pointing out that as they related to cash on hand at the end of each day they were not quite in agreement. This criticism went on to relate: "The disagreement is in the detail trans- actions, wherein money actually passes. Thus, in one case where a party was entitled to draw out a deposit of the sum of |i6oo he actually drew out in cash only $900 and took a certificate of trust for $700. The 88 Story of Trust Companies payments-receivable book showed the whole transactions, while the Secretary's record book showed only the payment of the $900. Thus Section 4 says, the President shall keep a 'daily record of all monies received,' etc., not of monies paid also. Yet the very next sentence says, 'his record of payments and receipts shall be compared daily with the record kept by the Secretary.' Why compare it with the record kept by the Secre- tary, unless both are to keep a record of payments as well as receipts? And why call it ' his record of payments, ' unless he is required to keep something more than a record of receipts?" However, in a "Conclusion" appended to the report an unqualified bill of good health was offered, in the following words: "My opinion as to the prudence and safety of the investments of the Company, the security offered to its dealers, and the ad- vantages flowing to the public from its opera- tions is already manifest from the foregoing pages, and I have but to add in conclusion that the prudence, care, ability, and integrity with which its affairs have been conducted are eminently deserving the public confidence." An Auction Sale of Assets 89 As late as 1856 it seems to have been the practice to hold public sales of the miscellane- ous assets of failed financial institutions. An illustration of this is an old catalogue, issued from the presses of William C. Bryant & Com- pany at No. 41 Nassau Street, announcing the offering of certain property covered by A List of Overdrafts, Judgments, Notes and Balances Due on Notes to be sold by P. R. Wilkins, Auctioneer, for The United States Trust Company of New York Receiver of the Knickerbocker Bank In the City of New York On Monday, October 2^], 1856, at Twelve O'clock, At the Merchants' Exchange, in the City of New York. 90 Story of Trust Companies In this pamphlet long schedules of overdrafts, judgments and notes were set up, and as to the property first mentioned, the trust company- was particular to specify: "The amounts of overdrafts are as shown on the ledgers of the bank and are supposed to be correct, but are sold without recourse to the Receiver." According to a resolution passed in the State Senate on January 7, 1857, the several trust companies were required to report to certain members of the Legislature "on their present condition and to submit a summary of their transactions during the year 1856." The re- port of the committee stated that the special charters granted to these institutions conveyed great powers, and that "it has always been the policy of the State to keep a watchful eye upon them and guard the community from those evils and losses which could result from improper or unwise use of the power conveyed. The reports herein made show that the confidence of the State of New York has not been misplaced, but that those institutions arc prosecuting An 1857 Statement 91 a prudent and successful business, beneficial to the community at large, and profitable to the stockholders concerned." Included among the figures presented was a "summary" of trust companj^ deposits, on January i, 1857, as subjoined: United States Trust Company of New York $1,614,450.73 New York Life Insurance & Trust Company 3,833,317.61 Buffalo Trust Company 185,738.23 Total $5,633,506.57 These three companies had 1837 depositors, the average balance of each depositor being $3066.68. This Legislative Committee appears to have given considerable attention to the affairs of the three companies shown above, but for some reason entirely overlooked the duty of reporting upon the Farmers' Loan & Trust Company, or upon any of its activities, although it was a fully qualified institution which had been engaged in the same line of business no less than thirty-five years previous to the making of the report. As illustrating a later and most interesting 92 Story of Trust Companies appointment of a trust company to act as trustee on behalf of a great benevolent society, something may here be interpolated regarding the American Bible Society and the United States Trust Company. For many years pre- vious to 1 9 10 the Society had managed for itself some millions of dollars' worth of property acquired under the wills of individuals, which provided that the income should be devoted to the purposes of the Society. In that year, by resolution of the Board of Managers of the So- ciety, the securities representing these trusts were turned over to the United States Trust Com- pany, and that Company was also appointed Assistant Treasurer of the Society. When the change was made it was in recognition of the fact that although the Society, by virtue of its charter, was perpetual, the safeguarding and administering of its possessions might well be left to the discretion of a financial body skilled in the intricacies of modern investment. The trust thus established was of rather a different character from those created in the ordinary routine of corporate and individual business transactions. It might be properly said that American Bible Society Trusteeship 93 it was a trust affecting far more than the material side of human life. The American Bible Society is in this year, 1 91 6, celebrating the one hundredth anniver- sary of its founding. A century of good works is behind this organization, which has for its object "the encouragement of a wider circula- tion of the Holy Scriptures without note or comment." Since those early beginnings the activities of the Society have been felt at the uttermost ends of the earth, as well as at home, and the Scriptures issued since then, either at the Bible House in New York City, or under the Society's supervision in foreign lands, have totaled over one hundred million copies. Either alone, or in collaboration with others, this organization has translated the Bible, in whole or in part, into not less than one hundred and seventy-five languages. European socie- ties have translated it into some three hundred more, and it has been stated that "versions are now available in which seven out of every ten human beings may read or hear at least the full Gospel narrative in the words of Holy Scripture." 94 Story of Trust Companies Thus is to be had a glimpse of how, in the evolution of trust company affairs, the business side of one of our largest benevolent under- takings has come to have its part in a sphere where almost every dealing is on the side of commerce, finance, or other interests in which the prevailing test must needs be material gain, not spiritual advancement. CHAPTER VII 1857. FAILURE OF THE OHIO LIFE. FOUNDING OF merchants' loan & TRUST, CHICAGO Both financial and political historians seem well agreed that the suspension of the Ohio Life Insurance & Trust Company on August 24, 1857, was the first bolt to fall in the storm of disaster that overtook the country during that memorable panic year. The Company had not been altogether pros- perous for some years. In 1854 the Cincinnati Commercial had taken the view that the institu- tion was being "taxed out of existence." It described the law of two years earlier which had imposed about $100,000 burden of taxes on $3,000,000 of bond and mortgage loans. Speaking of the hardship that it worked upon the Company, this newspaper said: 95 96 Story of Trust Companies "We are most decidedly in favor oi free trade i?i money, but we have at least that amount of anxiety for the public welfare which would induce us to prefer to spare the lives of a few wicked bankers, rather than to involve the community in pecuniary dis- tress, and press thousands into the Golgotha of bankruptcy." On August 25, 1857 the New York Tribune published a news article in the following words : "The Stock market was very active to-day, the aggregate sales in and out of the Board exceeding 25,000 shares. Some parties at the First Board had knowledge of the impend- ing suspension of the Ohio Trust Company and sold freely on the anticipated effect. After the suspension was made public the market, as will be seen by the transactions of the Second Board, exhibited a quasi panic, most marked in Cleveland and Pittsburgh which sold down to 20, having been 29 J^ on Saturday. At the close a sale was made at 22. The decline in Pittsburgh was occasioned by the apprehension that the Trust Co. held a large amount of the stock as collateral, which would be thrown upon the market. . . . The announcement between the boards Outbreak of Panic in 1857 97 that the Ohio Life Insurance & Trust Com- pany had been obliged to suspend payment threw the street into great excitement and it became at once the engrossing subject of conversation. The magnitude of the opera- tions of this institution throughout the West renders its suspension one of the most im- portant financial events since the Schuyler fraud, and fears are expressed that it may produce further commercial disasters. The house is by far the most important banking institution in Cincinnati, and the locking up, even temporarily, of its large deposits must prove very embarrassing to its dealers in that city. The amount of its liabilities is not stated, but they are estimated at from five to seven millions. The annexed card has been received from the President: " 'Office of the Ohio Life & Trust Co. New York, August 24, 1857. <( Directors of Eminence 105 when a change was made to the Dickey Build- ing, at the southwest corner of Lake and Dear- born Streets. While still here, in 1871, the great fire occurred and business was temporarily transacted at the residence of Solomon A. Smith, then President of the Company, until the spring of 1872 when quarters were taken in the Manierre Building. In 1881 the Company moved to the Portland Block, from which in 1900 it changed to its present location, The Merchants' Loan & Trust Building at Adams and Clark Streets. The Presidents have been, in succession: J. H. Dunham, 1857-1862; Henry Farnam, 1862- 1863; Solomon A. Smith, 1863-1879; John Tyrell, 1879-1884; J. W. Doane, 1884-1898; and Orson Smith, 1898-19 16. The last named is now Chairman of the Board and Edmund D. Hulbert is President. The Company has been happy in its relations with a number of men of commanding genius and influence who have helped to guide its affairs. On the same board of directors sat Marshall Field, Cyrus H. McCormick, George Armour, and George M. Pullman. On the io6 Story of Trust Companies death of Marshall Field in 1906, his estate was bestowed in trust with the Company, a testa- mentary trust the size and importance of which had never to that time been equaled. Four years later, upon the death of Chief Justice Melville W. Fuller, of the United States Supreme Court, it was found that he too had named the Company to be the executor of his will. The growth of this important central western institution during late years, with some com- parisons of growth on the part of the older trust companies of the East, will be recorded in the next chapter. An event of world-wide moment occurred in 1858, when the first Atlantic cable message passed between Queen Victoria and President Buchanan, its wording, "Glory to God in the highest, and on earth peace, goodwill toward men." Small indeed was the glimpse then to be had by business people, including the trust company men of that period, into the coming years when this invention was, by conjoining two great continents, to afford instantaneous intercourse regarding the million- dollar affairs of modern days. CHAPTER VIII 1865. SIX PIONEER COMPANIES. GROWTH SINCE THE CIVIL WAR The story of the trust companies down to the time of the Civil War has been told. Of the concerns organized before 1865 with original trust powers and destined to survive until our own times, there were six great pioneers, the Farmers', the New York Life, the Pennsylvania Company, the Girard, the United States, and the Merchants' of Chicago. These stand alone, for no record appears of any other trust com- pany which now survives having been char- tered, as such, between the years 1848 and 1864 inclusive. In their beginnings, marked mainly by timid efforts to unite fire and life insurance undertakings with a business as fiduciaries, the ground work was laid for the great futures of each, as well as of their later imitators. From now on, however, most of the quaint- 107 io8 Story of Trust Companies ness and much of the public misapprehension which so long existed fades away as we come to some individual narratives of how the com- panies have grown and thrived during the half century just passed. On June 30, 191 5, there were seventy trust companies in the United States, each of which had upwards of fifteen millions of dollars of total resources. The pages which follow will be generally devoted to accounts of their marvelous accomplishments since 1865. Of the sextette of pioneers, the Farmers* Loan & Trust Company, the oldest in point of privilege to execute trusts, has always main- tained first place, although to-day, 191 6, there are three other companies, the balance sheets of which present larger aggregates. These are the Guaranty (New York Guaranty & In- demnity Company, 1864- 1890), the Bankers, and the Central, all sister institutions in the great city of New York. Some of their achieve- ments will be related farther along, but the reader's attention is now invited to the stories of the original six institutions chartered for trust business between the years 1822 and 1857. New York Stock Exchange and office of the New York Guaranty & Indemnity Company, Broad Street, 1866. Growth of the Farmers' 109 The Farmers' Loan & Trust Company re- mained in Wall Street until 1868. During almost fifty years since, it has occupied a building of its own at the comer of Exchange Place and William Street. The Presidents of the institution since 1836 have been: Robert C. Cornell, 1843; Dow D. Williamson, 1846; Rosewell G. Rolston, 1865; and Edwin S. Marston from 1898 to date. As the first of the trust companies it has had identified with it many other names of promi- nent New Yorkers, among which may be men- tioned Thomas Tileston, Shepherd Knapp, Moses Taylor, Daniel Drew, and CorneHus Vanderbilt. A forty-year comparison of its balance-sheet totals shows an ever increasing volume of assets. They have been: In 1876, June 30th $ 6,922,679.79 In 1886, December ist 23,320,041.73 In 1896, June 30th 35,930,609.00 In 1906, June 30th 79,876,966.98 In 1916, June 30th 173,001,686.14 This last total, which also appears at the conclusion of this volume, made the Company no Story of Trust Companies in the summer of 191 6 the fourth in size in the country. The Farmers' of to-day is an institution of $1,000,000 of capital, and with nearly eight times that amount held in surplus and undivided profits. It employs more that three hundred officers and clerks, has a local branch in Fifth Avenue, and takes care of foreign commitments with agencies in London, Paris, and Berlin. Its annual dividends are at the rate of fifty per cent, paid upon stock now quoted at $1600 per share, which quotation is the highest in the list of New York City trust companies. It is America's oldest trust company; there is none better known or more widely respected. The New York Life Insurance & Trust Company remained under William Bard as President until 1843. In succession came Stephen Allen and John R, Townsend, until 1846. For twenty-five years thereafter David Thompson was the Company's head, and from 1 87 1 to 1916 Henry Parish has made a record of the longest executive administration of affairs ever enjoyed by any trust company. As it is, Mr. Parish continues his labors as Growth of '' New York Life " iii Chairman of the Board. In 191 6, after forty- five years of untiring service, a new incumbent, Walter Kerr, succeeded to the presidency. The Company has prospered since the days of 1830. Witness total resources, since the dates already accounted for, as follows: In 1876, thirteen millions; in 1886, nineteen mil- lions; in 1896, twenty-eight millions; in both 1906 and 1916, forty milHons. Among its present HabiHties are $1,000,000 of capital stock, $4,000,000 of surplus and undivided profits, and annuity and Ufe insurance funds, maintained as of old but now amounting to nearly $3,000,000. The stock now pays 45 per cent, dividends annually. Down to July I, 191 6, the aggregate dividends paid had amounted to $20,280,000, or 2028 per cent, upon the Company's $1,000,000 of capitaliza- tion. The present bid price of the stock is $970 per share. This splendid old institution "accepts only private trusts and declines all corporation or other public trusts." It has numbered among its trustees one generation after another of eminent New Yorkers. As an example, be it 112 Story of Trust Companies remembered that three Astors have sat upon the board, beginning with the original John Jacob, one of the sixty-one incorporators. Since 1830 the Company has always made Wall Street its home. In 1871 the address became No. 52, and there to-day, although scorning some modern devices, even registry in the telephone book, the offer is publicly made of "Protection for Widows, Children, and Old Age," while the days of old are kept in memory by announcements that even in 1916 the institu- tion "allows interest on deposites." Like its New York confreres, the Pennsyl- vania Company for Insurances on Lives and Granting Annuities has progressed during all the years since its reorganization with trust powers in 1836. Its presidents since 1857 have been but four: Charles Dutilh, until 1873; Lindley Smyth, until 1893; Henry N. Paul, until 1899, and C. S. W. Packard to date. The offices since 1890 have been at No. 517 Chestnut Street. In that year a site was obtained opposite the State House. On the spot where the old American Hotel had stood a massive building "Pennsylvania Company " 113 was erected containing what was then famous as "the largest banking room in the world." There the "Pennsylvania Company" has thrived, enjoying a substantial trust business and showing during thirty years past a growth in resources and liabilities of from fourteen millions in 1896 to twenty- three millions in 1906, with a grand total in the summer of 191 6 of forty- three millions of dollars. The capital is now $2,000,000, the surplus and un- divided profits, $5,300,000. The shareholders receive regularly twenty-eight per cent, divi- dends on their holdings. The fourth of our pioneer companies, the Girard of Philadelphia, after the death of Mr. Richards, the first President, in 1851, continued an uneventful but thrifty business during some years. From the beginning of the 1857 panic to the end of the Civil War, its dividends were never less than seven and one- half per cent. In 1 86 1, responding to a call from the Com- mittee of Public Safety, organized to raise funds for the defense of Philadelphia, the Company contributed its pro rata share; in 114 Story of Trust Companies 1862, a subscription was made to the Bounty Fund for Volunteers, and in 1863 another to the fund for raising troops. The offices were removed from time to time upwards on Chestnut Street, and after several such moves, owing to the need for enlarged quarters, the institution in 1908 took up its home in the beautiful building it still occupies at the northwest corner of Broad and Chestnut Streets. Philadelphia experienced some little financial depression for a year or two following the closing of the Centennial Exposition, but after this anxiety was removed the Company entered upon a period of steady and pronounced growth. In 1878 the business of life insurance was discontinued; by 1887 the Company's deposits subject to check amounted to about one million of dollars and its trust estates to about ten millions of dollars; these figures to-day are $47,000,000 and $188,000,000 respectively. The capital was increased to $1,000,000 in 1886, and to $2,000,000 in 1899, when the present title was adopted, Since 1901 it has been $2,500,000, and the present surplus is nearly N t^ 00 w O -i-> o lO c» M »» >> a nJ a* fi • o ot o 01 ^ 3 H a •o 13 ^ l-f «M O O >> 0) -C»^ 5 a> •3 U-l o O (O a> ^H o (tf 5fi o T, O 6 +* (A •v4 ta » •t-( XI a a, •5 at 1—1 bfl j:3 a Oi o •*-> a 0) o o «H i3 In CO -M d c; -♦-» u> tt> J3 O 00 o ■<*■ • o Jz; Girard Trust 115 ,000,000. The Girard Trust Company in recent years has paid thirty-six per cent, divi- dends ($900,000 per annum) on its capital and in this respect divides honors with one other great institution of that city, hereinafter to be described, the Provident Life & Trust Com- pany of Philadelphia, which annually distri- butes $360,000 to the holders of its $1,000,000 of share capital. It is worthy of special note that the Girard, immediately after its incorporation, paid a first dividend in 1837, and that notwithstanding panics and financial upheavals in the country there has been only one break in the dividend record — that of a semi-annual disbursement in 1842. The figures of total assets twenty years ago, ten years ago, and in 191 6 have been $12,000,000, $43,000,000, and $54,000,000 re- spectively. Only three Presidents have succeeded Mr. Richards, namely, Thomas Ridgway, 1851- 1883; John B. Garrett, 1 883-1 887; and Effing- ham B. Morris, during whose incumbency of almost thirty years the Company's notable growth has been achieved, and to whose wise ii6 Story of Trust Companies foresight was due the erection of the first imposing financial building in Philadelphia in a section which, largely on that account, has become the financial center of the city. The United States Trust Company of New York, as has been shown, started business at No. 40 Wall Street. From 1858 to 1865 it was at No. 48 Wall Street; until 1887 it was at No. 49 Wall Street, opposite; and since then its home has been in the building known as No. 45 Wall Street. From 1868 to 1903 John A. Stewart served as President. In the latter year, which was the Company's fiftieth anniversary, he was appointed Chairman of the Board of Trustees. This was a relief from arduous and confining services without, however, depriving the Com- pany of his knowledge and experience and the benefit of his counsel and advice. To-day, 19 1 6, Mr. Stewart, after having entered the Company's service sixty-three years ago and with but a single interruption, while he acted as Assistant Treasurer of the United States, during the Civil War, is still to be found at his desk each day attending as of old to the re- ''United States" and "Merchants' " 117 sponsible affairs of the Company. After 1903, Lyman J. Gage, who had been Secretary of the Treasury, took up the duties of President, being succeeded three years later by Edward W. Sheldon. The Company's growth during forty years past will be seen from the following tabulation of resources and liabilities: 1876 June 30 $26,050,641.61 1886 December 14 41,058,004.94 1896 December 31 48,650,127.26 1906 June 30 70,918,857.64 1916 June 30 80,955,731.66 Included in the present liabilities are $2,000,000 capital stock and $14,400,000 of surplus and undivided profits. The annual dividend rate is fifty per cent, and the stock is quoted at $1035 per share. The sixth of the pioneer companies, The Merchants' Loan & Trust Company of Chicago, was sketched in the previous chapter. A word must be added, however, regarding its growth since 1896, when the Company's balance sheet showed a total of $16,000,000, increasing in 1906 to $58,000,000, and in 1 916 to $84,000,000. ii8 Story of Trust Companies It is in order here to show one or two illus- trations of the sort of services which trust companies render. At this period, issues of securities and investments therein were natu- rally on a most limited scale, as compared with present-day issues and investment holdings. But from about this time it became the practice, less as an experiment and more with recogni- tion of the fitness of the trust companies to act in representative capacities, for corporations, associations, and individuals to avail of the facilities now to be described. Modern practice requires that a railroad or industrial corporation desiring to issue bonds shall execute a deed of trust, conveying the property, securing the bonds to a trustee, who upon the face of the bonds certifies that the property has been so pledged, that the issue is on certain terms, and that each bond is one of the total number issued. This duty is now almost invariably performed by a trust com- pany, which arranges also, when desired, to register the ownership of the bond, paying interest thereon by check instead of upon the presentation of coupons. In a similar manner Functions Illustrated 119 a trust company will act as registrar of an issue of stock, another company recording transfers of ownership of the shares; this leads to the certification of stockholders' lists for dividend purposes; and all of these services are performed in consideration of regular fees, which contribute largely to the gross income of the company. Among other services rendered may be mentioned the duty of acting under appointments as executor, administrator, guar- dian, and as committee. Corporate and indi- vidual trusts are also undertaken involving the deposit of money and securities, the prin- cipal and income of which are to be devoted to specific purposes. Sometimes these deposits are made until reorganization arrangements can be effected. Occasionally they are subject to distribution under escrow agreements, and almost always the trust company is asked, and consents, to assume responsibilities involving the safeguarding of property, or to exercise discretion in its management to a degree beyond that which individuals would care to employ, or would be warranted in having entrusted to them. 120 Story of Trust Companies Among thousands of commitments of this character one or two modem appointments of the trust companies already described will be made to serve as outlining these functions. The Farmers' Loan & Trust Company now registers some $30,000,000 of capital stock of the Delaware, Lackawanna, and Western Rail- road and over $170,000,000 of capital stock of the New York, New Haven, and Hartford Rail- road. Since 1896 it has been trustee under an issue of Northern Pacific Railway General Lien and Land Grant Gold three per cent, bonds. The authorized issue is $190,000,000 and this trust will continue until the maturity of the bonds in the year 2047. In the late summer of 1916 the United King- dom of Great Britain and Ireland turned to the United States for financial aid, arranging a two-year five per cent, loan of $250,000,000, secured by some $300,000,000 of stocks of American corporations and bonds of the Domin- ion of Canada and other foreign governments. In appointing a trustee, as custodian for this vast gathering of wealth from abroad, under a pledge agreement executed by the Government A Notable Modern Trusteeship 121 of the United Kingdom, the choice fell upon The Farmers' Loan & Trust Company. With- out describing the great volume of labor re- quired in the handling of these securities, it will be possible to judge somewhat of the magni- tude of such a transaction when it is stated that the mere task of certifying the bonds issued under this agreement has lately, and within the space of a few days of time, required the officers of the Farmers' to affix their names to bonds containing no less than 165,000 signatures. CHAPTER IX INCORPORATIONS FROM 1 865 TO 1 868 As we look back to the dark days of 1864 in the Nation's history, it is worthy of special mention that one great American trust com- pany should have been started at such a time. This was the Union Trust Company of New York, incorporated April 23, 1864, and opened for business in 1865 at No. 73 Broadway. This first address was at the corner of Rector Street, where the Company was domiciled for nearly twenty years. Its first President was I. H. Frothingham. Toward the end of this period the building became famous as the scene of an attempt upon the life of Russell Sage, who was there attacked by the insane bomb thrower, Norcross. Mr. Sage was one of the Company's early Trustees. The boards in the early years also included a number of 122 Union of New York 123 other prominent financiers, among whom may be mentioned David Dows, Robert Goelet, Abiel A. Low, James S. Wadsworth, and Cor- neHus and WilHam H. Vanderbilt. In 1876 the Company's total assets amoimted to nearly $11,000,000; in 1886 they were $26,- 000,000; in 1896, $39,000,000; in 1906, $53,000,- 000; and in 191 6, $95,000,000. Throughout the thirty-five years ended 1908 Edward King served as President. During the following year John W. Castles acted in that capacity. Since 19 10 Edwin G. Merrill has been President. In 1886 the Company received an appoint- ment as trustee under a deed of trust which has been, and will long continue to be, famous for the length of term of the bonds secured thereby. This covered the issue by the West Shore Railroad of $50,000,000 of first mortgage four per cent, bonds, due 475 years after their date, that is in the year 2361. The Union Trust Company made it a rule, long before the days of statutory reserves being compulsory, to keep large sums of cash on hand to secure deposits. This fund was mostly in 124 Story of Trust Companies gold and was maintained from 1884 onward in an amount which never fell below $3,000,000, and was sometimes larger. This voluntary practice was always deemed, both within and without the Company, to be on lines of the utmost of prudence and conservatism. The Company to-day has $3,000,000 of capital and $5,500,000 of surplus and undivided profits. Dividends were paid in 19 15 at the rate of seventeen per cent. The stock sells at $380 per share. The offices for years have been in the Com- pany's own building at No. 80 Broadway. Recently there have been two uptown branches established, one at Thirty-eighth Street and Fifth Avenue; the other on the same Avenue, fronting Central Park at Sixtieth Street. On Third month 22-, 1865, eighteen days before Lee's army laid down their arms before General Grant and the Union forces at Appo- mattox, a charter was bestowed upon the Provi- dent Life & Trust Company of Philadelphia. This was the third great institution to be formed in the City of Brotherly Love. The organiza- tion was brought about by a few members of in 3 o 'S ID XI >. ,Q i-i "^ ,: •^ >> '-' .ti <-> 3 o .5 0) o -^ "71 c« -S cS CIS ^ ^. o >I -►^ cij ■^ te '^ -a •-I 2 — • o *^ eS J- o fo 6 00 o o s) O n Provident Life of Philadelphia 125 the Society of Friends. Thirty-three years previously some members of that Society had estabHshed the Friends' Provident Institution of Bradford, England. Its operations were confined to insurance of the lives of birthright Friends, and its experience had shown a re- markably low mortality, owing to the excep- tional longevity among the members of that sect. Accordingly, these Friends of a genera- tion later, attracted by the success of the earlier institution, felt drawn to the idea of life insur- ance, and since a capital stock was a legal requirement for that business, had the charter include the authority to transact a trust busi- ness also, the profit from which should remune- rate the stockholders, it being provided that the entire surplus in the insurance department should accumulate for the benefit of the policy holders, so that the only advantage, direct or indirect, which the stockholders could at any time have from the union of the two features of the business would result from the fact that the management of the trust business, from which they derive their profit, would be done for them without charge. 4 126 Story of Trust Companies The proposed business was not, however, to be confined to Friends, but dealings were to be had with "others of like careful habits," The Company's first President was Samuel R. Shipley. It began business in a basement at No. 247 South Third Street, and the records show that on Tenth month i^-, 1865, the build- ing at No. Ill South Fourth Street was leased. The very early records contain many quaint facts, as viewed in the light of larger develop- ments in later years. For example, on Tenth month 9—, 1865, the minutes recorded: "The engagement on trial of Joseph R. Smith as City Canvasser," and a month later that he had "given up the position, for physical disability after a trial of one and a half weeks." That the Company was provident in practice as well as in name, is shown in the record of "the pur- chase on very favorable terms from the North American Transit Insurance Company of the desks and office furniture required for the new office at No. iii South Fourth Street." The capital was increased in 1871, by sub- scription, to $500,000, and two years later the Company moved into its own building at No. A Half Century of Service 127 108 South Fourth Street, The Company's President at the present time is Asa S. Wing, who has been in its service since 1867, first as assistant actuary, later, and until 1906, as vice-president and actuary. The Provident Life & Trust in 1879 took up quarters in its own building at No. 409 Chest- nut Street, where it still continues to transact an insurance and trust business. It is one of the very few life insurance institutions having both life insurance and trust departments. In 1866 the deposits were reported at $78,109.69. By 1875, the total resoiuces were about $2,6cd,- 000. In 1885, they were a shade over $9,000,000. Ten years later, in 1896, the aggregate had increased to approximately $40,000,000. The totals for 1906 and 191 6 were $73,000,000 and $105,000,000, respectively, the figures for the latter year composing insurance assets of $83,960,190.51 and assets apart from insur- ance of $21,354,620.13. On June 30th of the year last named the Company's capital was $1,000,000 and its surplus and undivided profits upwards of $5,500,000. The annual dividend rate is thirty-six per cent. 128 Story of Trust Companies Again in Philadelphia, in 1866, was seen the birth of a new trust company known as the Fidelity Insurance Trust & Safe Deposit Company. As will be seen from the Company's title, insurance, fidelity and trust plans were supplemented by authority "to receive upon deposit for safekeeping, jewelry, plate, stocks, bonds, and valuable property of every kind." In all the early advertisements of the Company great stress was laid upon this function. It was the first concern to be known as a safe deposit company in Philadelphia and its objects were stated in the first prospectus in the following words: "The great wealth of the country, the vast amount of Government and other Loans, transferable by delivery, and held by the uncertain tenure of possession, the injury and inconvenience resulting from the loss of these and registered securities, demand a means of protecting such property from the risks of Fire, Accident, Robbery and Theft, which no arrangements hitherto existing have afforded. A place of absolute safety FOR ALL SUCH SECURITIES has bccomc a pressing necessity. It is to supply this that Fidelity of Philadelphia 129 the present Institution has been founded. It is the purpose of the Managers to provide for their depositors every security against fire, depredation, or accident, which archi- tectural and mechanical skill can combine in the structure and material of their building, VAULTS, and safes. The location of their building — between the First National Bank and the Bank of North America — is in itself a GUARANTEE OF SECURITY difficult tO sur- pass. The internal police of the office has been organized with special care, and there will be A CONSTANT NIGHT-WATCH INSIDE THE premises; AND TO THIS IS TO BE SUPER- ADDED THE PROTECTION OF A LARGE CAPITAL." The interest with which the enterprise was at first received, was largely increased by the frequency of burglaries of banks and of offices, which occurred before the incorporation and for a few years afterwards. Among these may be mentioned the robbery of the Common- wealth Bank of Philadelphia in 1865, and of a ninety thousand dollar loss from the same cause by Cochran & Co., wine merchants on Walnut Street. This occurred in 1866, and in the same year the Hartford Bank experienced 130 Story of Trust Companies similar troubles. Other alarming robberies occurred at about the same time, sixty thousand dollars from the Mechanics Fire Insurance Co. of New York and large sums from the Ocean Bank of New York, the Boyleston Bank of Boston, the Third National Bank of Baltimore, and the Consolidated Bank of Louisiana. In 1869 a large robbery occurred in Philadelphia at the Beneficial Savings Fund Society, Twelfth and Chestnut Streets, and two years later another took place at the Kensington National Bank. Of all these great thefts the most sensational was that at the Kensington National Bank, which occurred in February, 1871; it was re- ported that $120,000 of bonds were taken. The burglars obtained an entrance into the Bank upon the pretense of being police sent by the authorities to prevent an alleged intended robbery, and in this case, as in the others, it was determined that the Bank had not been guilty of such negligence as would render it liable. The effect of the feeling of insecurity caused by these depredations was that safe deposit Fifty Years of Progress 131 companies sprang up in various parts of the country, the Fidelity being the second to appear, one in New York having preceded it by but a short time. Similar companies were started in Cincinnati, Baltimore, and other cities. Emphasis upon this branch of the Company's business from its inception down to the present year, has made the clause "Security from loss by burglary and robbery, fire or accident" a most effective feature of publicity. The Company was opened for business on September i, 1866. Its first President was Clarence H. Clark, who was succeeded by N, B. Browne and then by Stephen A. Caldwell, who in turn was followed by John B. Gest in 1890. For fifteen years following 1900, Rudulph Ellis was President, being succeeded in 19 15 by WilHam P. Gest, who had been Vice-Presi- dent since 1900. The Company's offices to-day are at No. 325 Chestnut Street, the title having been short- ened to read Fidelity Trust Company. Since the time half a century ago, when a modest beginning was made with $250,000, of capital, gradual increases of the stock have occurred 132 Story of Trust Companies until the outstanding shares now amount to $4,000,000, with surplus of over $13,000,000. The dividend rate in recent years has been twenty-four per cent. The total resources have been in round numbers: 1876, $12,000,000; 1886, $18,000,000; 1896, $19,000,000; 1906, $42,000,000; and 1 916, $47,000,000, without including trust funds. Among numerous important testamentary- trusts which have been committed to the Com- pany the best known, perhaps, has been an appointment dating back to 1894 by Richard Smith who died in that year. Under its terms a sum not exceeding $500,000 was devoted to the erection in Fairmount Park, of a monumen- tal granite memorial containing statues of a number of distinguished Civil War generals and admirals, of which the most conspicuous are Generals Hancock, McClellan, Meade, and Reynolds. This magnificent memorial was duly erected in Fairmount Park under the trusteeship of the Fidelity Trust Company, which was directed further to spend $50,000, in the erection of a proper building and the enclosing of a children's playground in the Brooklyn Trust Company 133 Park. This worthy undertaking was duly established in 1899, and has since that date been continuously maintained under the di- rection of the trustee. The companies hereinbefore described — that is, the ones which have endured down to the present — were all New York, Philadelphia, or Chicago companies. In 1866 a charter was taken out by a Brooklyn institution. At that period the population of what is now Manhat- tan Borough was less than nine hundred thou- sand, while Brooklyn was an independent city of about three hundred and fifty thousand. This new undertaking was known as the Brook- lyn Trust Company. It has had a phenomenal growth in total resources. These amounted in 1876 to less than $2,000,000; in 1886, $9,500,000; 1896, $12,000,000; in 1906, $20,- 000,000. The statement of June 30, 191 6, shows upwards of $47,000,000. Ripley Ropes was President during the early years and was succeeded by General C. T. Christensen, who, upon his death in 1903, was in turn succeeded by Theodore F. Miller. Edwin P. Maynard has been President since 134 Story of Trust Companies 19 1 3. The Company has for many years made its home at No. 177 Montague Street, adjoining CHnton Street, where on a plot run- ning through to Pierrepont Street a handsome modern building is at the time of this writing about completed. The Company's capital stock twenty years ago was $300,000. In 19 13, the Long Island Loan & Trust Company was absorbed, itself one of the prominent institutions of Brooklyn. The capital at this time is $1,500,000, with surplus and undivided profits of approximately $4,000,000. The stock pays dividends at the rate of twenty percent., and, in addition, extra dividends from time to time, and commands a price of $520 per share. Among developments of recent years may be mentioned the estab- lishment of a branch office at Fulton Street and Bedford Avenue, Brooklyn, and a Manhattan office at the corner of Wall Street and Broadway. First in the New England field, mingling the ideas of preservation of life and conservation of wealth, the Rhode Island Hospital Trust Company began its career in 1868. As to the origin of its name, one of the original Rhode Island Hospital Trust 135 » incorporators in speaking of the early history of the Company, stated: "It owed its existence to the desire of a few pubHc-spirited men to create what should be a financial institution of high credit and powerful resources, and at the same time prove a pecuniary helper to the Rhode Island Hospital, a benevolent institution then in its infancy." Under a section of its charter the Company was required: "To pay over, annually, to the 'Rhode Island Hospital,' for its use, one-third part of all the net profit upon the capital stock of said corporation over and above six per cent, thereon. This obUgation shall continue so long as no similar act of incorpora- tion shall be granted by the legislature of this State to other parties than the corporators herein." By mutual agreement and under a subse- quent settlement with the Rhode Island Hos- pital, this section became inoperative. The early association of the two institutions was helpful to both and the friendly relations of 136 Story of Trust Companies the early years have continued to the present time. The story of this Providence institution is one of constant growth in both banking and trust undertakings. As far back as 1876 the balance sheet footed $7,000,000; by 1896 this aggregate had more than doubled to over $15,000,000; in 1906 the total was approxi- mately $30,000,000. In that year an important local bank was acquired, the American National, and since 1909 when the capital (shares $1000 each) was increased from $1,000,000 to $2,000,000, and in 191 1 to $2,500,000, the Company has moved steadily onward. To-day its reported surplus and undivided earnings amount to over $3,500,- 000 (inclusive of $330,000 of guaranty and improvement funds), while its total resources and liabilities have risen to the sum of $55,630,- 437.74, making it the third company in size in New England. Herbert J. Wells has acted as President during more than thirty years past. An important Cleveland institution, estab- lished in 1868, will be next in order of considera- The Bankers Almanac of 1868 137 tion, but before describing it in the succeeding chapter a word or two will be of interest as showing how little the trust company idea was understood, and how small a part the several companies were deemed to have in the country's entire banking affairs even as late as the year 1868. A glance at some of the features of a financial directory published in that year, the Merchants and Bankers Almanac of 1868, reveals the names and some of the particulars regarding no less than 1650 national banks, 270 State banks, and 1400 private and savings banks. To these a list was appended of 600 fire, marine, and life insurance companies. Statistics were shown for fluctuations in the price of gold, English consols for 135 years, and iron, cotton, hops, and molasses, the two last-named articles being priced for over forty years previous. The only reference, however, to a trust com- pany was a one page advertisement of the National Trust Company, then at No. 336 Broadway and fated within the next few years to disappear from the Httle group of trust corpora- tions which might then have been given a place in such a reference book, but which were not 138 Story of Trust Companies until many years later inserted in the "blue books" and cyclopedias, along with their con- temporaries, the banks. As far along as the early nineties it was the exception, not the rule, to find references made in such publications to trust company directorates. CHAPTER X PROGRESS FROM 1 868 TO 1 873 We come now in ovir story to the founding in 1868 of one of the greatest financial institu- tions in the Central West. This was the Citi- zens Savings & Loan Association which, as the result of various mergers has become the Citizens Savings & Trust Company, the oldest and largest trust company in Ohio. It was in 1903 that three of Cleveland's best known financial institutions, the Citizens Savings & Loan Association, the Savings & Trust Company, and the American Trust Com- pany, were consolidated under the title of the Citizens Savings & Trust Company, each con- tributing a large measure of financial strength, and each bringing its quota of depositors and patrons. The Citizens Savings & Loan Association 139 140 Story of Trust Companies began business in temporary offices in the Wed- dell House Building on lower Superior Street. Some time later it moved to the Wade Building at No. 1 08 Superior Street where it remained until 1894, when it moved to larger offices on the ground floor of the Case Building, the site of which is now in part occupied by the Post- Office Building. The institution remained in its location in the Case Building until the consolidation above referred to, when a magnificent new fourteen- story building, the Company's present home, was erected. Among those comprising the first directorate of the Citizens Savings & Loan Association were such well-known names as Jeptha H. Wade, who was President until his death in 1890, U. S. Senator Henry B. Payne, and George Worth- ington. From 1878 to 1881, President James A. Garfield was a member of the Board and Secretary of State John Hay served as a Director from 1883 to 1893. The Savings & Trust Company was the first trust company organized in the State of Ohio. It opened for business in May, 1883, in the Citizens' of Cleveland 141 Benedict Building on Euclid Avenue and sub- sequently purchased the property on Euclid Avenue now occupied by the Union National Bank, in which building it remained until the consolidation in 1903. The American Trust Company commenced business in 1898 in the American Trust Build- ing on the west side of the Public Square and occupied these quarters until the consolidation five years later. The Citizens Savings & Trust Company conducts its business along the most conserva- tive yet at the same time thoroughly efficient lines. Its loans are made exclusively on real estate first mortgages or on approved collat- eral. It maintains a Foreign Exchange De- partment and conducts an extensive safe deposit business. It is well known throughout this country, and in many places abroad, as the Home of Banking by Mail, and in this department it handles many hundreds of thousands of dollars. Its Trust Department has charge of trust estates amounting to many millions. Among the many trusteeships which have been handled 142 Story of Trust Companies by the institution may be cited one or two special cases. The late Benjamin Rose left an estate valued in excess of $3,000,000 to the Citizens Savings & Trust Company, as trustee in perpetuity, and directed the trustee to organize and superintend an institution for the purpose of distributing the entire net income of the estate to deserving old men and women. By this arrangement monthly payments are made to many people, enabling them to remain in their own home instead of having to go to some charitable institution. The late Robert R. Rhodes left an estate valued at $2,000,000 the bulk of which was left to the trust company, as trustee in perpetuity, and the income is to be paid to various hospitals and charitable organizations in Cleveland. From an institution of about $8,000,000 of resources twenty years ago, the Citizens Sav- ings & Trust Company has grown until its latest statement, issued on the last day of June, 1916, showed total resources of $70,661,825.82, with capital of $4,000,000, surplus and undi- vided profits of $3,498,823, and deposits of $62,962,790.32. New England Trust Company 143 J. H. Wade, son of the original President of the Citizens Savings & Loan Association is Chairman of the Board of Directors. H. R. Newcomb, who was President from the time of the consolidation in 1903 until his death in 19 10, was succeeded at that time by D. Z. Norton. Boston entered the trust company field in 1 87 1, presenting for instant public approval the New England Trust Company, which had been chartered two years previously. The Company's offices were at No. 76 Devonshire Street, later at No. 85, almost directly across the street, and in 1906 a handsome building was erected at the corner of Milk and Devon- shire streets. The early Presidents were Amos A. Lawrence and Otis Norcross, followed by Wm. Endicott, Jr., and David R. Whitney. Since 19 12 James R. Hooper has acted in that capacity, and in 191 5 George Wigglesworth became Chairman of the Board. The growth of the Company has been con- stant and the progression of total assets since 1876 shows: in that year, $6,000,000; in 1886, $12,000,000; in 1896, $15,000,000; in 1906, $18,000,000; in 19 16, $29,000,000. 144 Story of Trust Companies The present capital is $1,000,000, the surplus and undivided profits $2,992,786.32. Entirely in line with earlier endeavors in the same city, the Philadelphia Trust, Safe Deposit & Insurance Company came into corporate existence in 1869. As indicated by the title, several distinct functions were contem- plated, and not until 191 5 was the name Philadelphia Trust Company adopted. The early Presidents were J. Livingston Er- ringer and W. L. DuBois. This office was held by Roland L. Taylor in 1910 and 191 1, by Samuel L. Heebner in 19 12, and since 1913 Thos. S. Gates has been the Company's head. The institution is a strong one. Its capital of $1,000,000 now carries with it surplus and un- divided profits of $5,000,000, and the growth in assets since 1906 has been from a total of $I2,- ooo,ooo to a present volume of over $30,000,000. The year 1869 also saw a new incorporation in Chicago. This was the Union Trust Com- pany which during late years has been domiciled at No. 7 South Dearborn Street, corner Madison Street, its earlier home having been at No. 145. Back in 1896, under the presidency of S. W. Illinois Trust & Savings 145 Ransom, it was a modest concern of $500,000 capital, $900,000 surplus and undivided profits, and $4,500,000 of total resources and liabilities. Since 1905, Frederick H. Ransom has been President and the corresponding figures for June, 1916, are $1,500,000, $1,600,000, and $34,500,000, respectively. The great Chicago fire of October 9, 1871, played sad havoc with the city's financial possessions. Most of the banks and trust companies there were equipped with vaults of old-fashioned types of construction, and the losses in cash securities and records were, in some instances, complete. For many days after the conflagration was ended there was an entire suspension of financial activities, and not until months after was business resumed on anything like a normal basis. In 1873, however, the newly created metro- polis of the West saw the corporate foundation laid for a great institution known as the Illinois Trust & Savings Bank. This concern has always held high rank among the trust companies of the country. As far back as 1896 its report showed footings of no 10 146 Story of Trust Companies less than $30,000,000; in 1906 the extraordi- nary total of $106,000,000 was reached, at that time the largest sum of resources of any trust company; to-day, 1916, with $5,000,000 of capital, $11,000,000 of surplus and undivided profits, and $128,000,000 of total liability, it is the seventh company in size in the country. The present offices are in a substantial banking house at No. 233 South La Salle Street, where for over twenty years past John J. Mitchell has devoted himself to the duties of President of the institution. In the late summer of 1873 came a severe panic which both interrupted existing trust company arrangements and offered many dis- couragements to new undertakings. The troubles of that period were precipitated by public distrust of the Government's financial policies ; there had been reckless over-extensions among the railroads and other corporations; speculative tendencies had developed to a degree previously unheard of. When the crash came in Wall Street, the chief scene of the difficulties, it was not unnatural that some of the trust companies should be affected. Panic of 1873 147 During that summer two institutions in what is now Greater New York were forced to suspend for short periods. In one instance it was claimed that the management was lack- ing in diligence in the handling of certain city funds, the newspapers asserting that it had not acted in good faith in the surrender to out- siders of some large quantities of securities. At least two of these newspapers had libel suits filed against them before matters quieted down and the company was able to resume business. In SeptemJDer, 1873, began a series of Stock Exchange failures which greatly unsettled public confidence. Fisk & Hatch of New York and Jay Cooke & Company of Philadelphia were among the many great brokerage houses to go to the wall. The closing months of the year witnessed many stirring events in New York, a notable instance being the trial and conviction of the city boss, William M. Tweed. The period was one of great financial distress and of constant accusations and recriminations among persons high in public authority, but the trust company embarrassments of 1873 were short-lived and seem now, in the light of 148 Story of Trust Companies minutes and other records which have been pre- served, to have been considerably exaggerated in the press accounts of that year's happenings. Returning now to the New England field, the story of the Boston Safe Deposit & Trust Company illustrates the want of co-operation on the part of the investing public which the founders of many prominent trust and safe- deposit companies had to experience and over- come. Originally incorporated in 1867 by special act of the Legislature, under the title Boston Safe Deposit Company, it was author- ized, by amendment in 1874, to assume the present corporate name, to conduct a banking business, and to act as registrar of stocks and bonds and as transfer agent. Yet it was not until June i, 1875, that the Company began business, confining itself to safe-deposit transactions until July 2, 1876, when a banking department was established. It is recorded that Edward P. Bond, who ob- tained the charter, actually carried the docu- ment about in his pocket for eight years trying to interest investors in the possibilities which he foresaw in a safe-deposit business. Boston Safe Deposit & Trust 149 The original capital of the Company was $200,000, which was doubled in 1876 after one year's business; in 1890 it was increased to $1,000,000, which remains the capital at the present time. In 1877 the Company was given authority by the Legislature to act as trustee under will, and in 1899 it was appointed by the Bank Com- missioner as executor under wills, as adminis- trator of estates and as guardian of minors and incompetents. These were the first instances of such powers being granted to trust companies in the Commonwealth. The Company at pres- ent holds in trust over $30,000,000, the largest amount so held by any trust company in Mas- sachusetts, and the deposits of its banking department have increased from $500,000 in 1877, to $16,000,000, without the absorption of any other institution. The ojSices and vaults of the Company are located in its own modem building, No. 100 Franklin Street, the former and original quar- ters having been at No. 87 Milk Street. The Presidents have been Francis M. John- son, 1875 to 1877; Frederick M. Stone, 1877 ^o II 150 Story of Trust Companies 1897; William E. Putnam, 1897 to 1905; Charles E. Rogerson, 1905 to date. The growth of resources: 1876—$ 935,281.94 1896— I 9,034,758.94 1886— 4,539,618.48 1906— 15,695,909.86 1916 — $20,833,008.01 The present capital is $1,000,000, the surplus and undivided profits $3,216,378.13. Chartered in 1873, opened for business in 1875, the Central Trust Company of New York, always among the most progressive of trust companies, is in 191 6 the third largest in the United States. In the beginning, Henry F. Spaulding was elected to the presidency and offices were opened at No. 14 Nassau Street, which were occupied until 1884. The Com- pany then removed to the building directly opposite, at No. 15 Nassau Street. It was at about this time that Frederic P. Olcott, former Comptroller of New York State ( 1 878-1 879), became President of the Company. In 1887 the quarters at No. 15 Nassau Street were outgrown and a new location was chosen at No. 54 Wall Street in the shadow of the old Central of New York 151 Custom House. This building is to-day almost as intimate a landmark of lower New York as its venerable neighbor across the street, and it has been the home of the Central Trust Company from 1887 to the present time. In 1876, one year after commencing business, the Company reported resources of $5,263,302.50 and about the time of removal to the present address, in July, 1887, the figures were $22,- 521,975.59, a growth of over seventeen millions of dollars. From 1896 to 1906 the surplus and undivided profits grew from $6,242,995 to $15,214,974.99, while the total resources reached $83,004,867.52, in striking testimony of the methods and poli- cies of Mr. Olcott. Upon his being elected Chairman of the Board of Trustees in 1905, the present incumbent, James N. Wallace, was elected President. Mr. Olcott continued as Chairman of the Board of Trustees until his death in 1909. The capital stock, which had been $1,000,000 since the inception of the Company, was in 1909 increased to $3,000,000 by means of a dividend of $2,000,000. In July, 191 6, a dividend of 152 Story of Trust Companies $2,000,000 was paid to the shareholders, at which time the capital stock was increased to $5,000,000. As of June 30, 1916, the Company reported surplus and undivided profits of $18,258,793.74 and total resources of $175,484,519, Its present holding of this vast aggregate of wealth makes the Company third in size in New York City as well as in the United States. The Central Trust Company has been distin- guished at all times as an institution composed of prominent financiers. The late J. Pierpont Morgan served some years as a Trustee. The late John S. Kennedy was also a Trustee until his death. The Company is famous for the liberal treatment it shows its officers and employees, old and new; the annual Christmas gifts are fifty per cent, of the year's salaries. Since 19 14, an uptown branch has been main- tained at Forty-second Street and Madison Avenue. CHAPTER XI 1874 TO 1876. FIRST SUPERVISION. EARLIEST STATISTICS A LULL ensued between 1872 and 1881, so far as new trust incorporations were concerned, but within this period two notable events oc- curred. One was the first administering any- where of a law compelling examinations by State authorities, the other a gathering for the first time of any figures for trust companies worthy the name of statistics. Prior to the year 1872 there was practically no State supervision of trust companies. Some of the companies, in compliance with their charters, reported to the courts, while others, by virtue of their character, reported with the insurance companies. In the year mentioned Connecticut enacted a supervisory law and soon afterwards the 153 154 Story of Trust Companies functions of the trust companies, as well as the differences between them and the State banks began everywhere to be better understood. During 1874, New York passed laws whereby trust companies came under the supervision of the Banking Department (existing since 1851), were compelled to make annual reports to the Superintendent, and were subjected to yearly examinations. Ohio enacted a trust company law three years later but annual examinations were not authorized until 1908. It was also as late as 1908 before the Superin- tendent in New York State could take charge of an unsound trust company. Vermont first required reports in 1878, and Louisiana and Maine, in 1882 and 1883 re- spectively, were the next to take the step. Of the larger States, Illinois followed in 1887. Some of the Massachusetts companies, under provisions of their charters, reported to the bank commissioners as early as 1870, although the Legislature did not require this until 1888. Pennsylvania's Legislature was as late as 1 89 1 in passing regulative laws. Such had the confusion been in this State that back in 1852 Need of Control 155 and 1853 only one of the State's two companies had reported, apparently to the Legislature; while as late as 1878, six reported to the Auditor General, three to the Superintendent of Insur- ance, and one independently of any department. In California, West Virginia, and Colorado, trust company supervision was contemporaneous with that of Pennsylvania. Thirty- three years after the legislation in New York, that is in 1907, a count of the States showed that forty-five of them had passed trust company laws, though in the majority of cases these laws were almost identical with those governing State banks, some prescribing more, some fewer, requirements. The searcher of public documents cannot fail to be impressed with the inconsistency of all this. Until a date nearly a hundred years after the Nation's birth the trust companies were really so many free lances. How valu- able would the record be now if we could look back to complete figures by States during the early years. There are elaborate old docu- ments relating to almost every subject, from legislative junkets on the River Nile to the 156 Story of Trust Companies most approved methods of oyster cultivation along our own shores; there have been governors' messages printed in foreign languages, and great illustrated tomes have now and then appeared on subjects like pomology, piscato- logy and paleontology; but scientific control of trust companies by the State governments was an unheard-of study as lately as forty-five years ago. In the seventies the abuses of the earlier years began over again. In New York State, Governor Cornell ruled in a veto message, as late as 1881, that the Bankers' Life Insurance & Trust Company of New York, incorporated by special charter in 1871, was not entitled to change its title by eliminating the word "Trust " therefrom. He remarked: "Diligent inquiry among bankers, trust companies and commercial agencies in New York has afforded no information as to the existence or operations of the Company. It would seem that a corporation which has been so prolific of legislation should not be permitted to occupy an additional space in the statutes of the State, at least until it New York Companies in 1874 157 shall have made for itself a local habitation and a name by which it can, upon inquiry, be found. The failure to report to the Bank- ing Department, as required by its charter, is another reason why the change of name should not be assented to at this time." Just how a condition like this could have existed is not clear, for under Chapter 324 of the Laws of 1874 of New York State, which was entitled: "An act relative to moneyed corpora- tions, other than banks, institutions for savings, and insurance companies," it had been pro- vided that every trust, loan, mortgage security, guaranty or indemnity company or association, having the power and receiving money, was required semi-annually on June 30th and December 31st in each year to make a report to the Banking Department. This statute, as already stated, compelled the Superintendent of Banks to make a visit once each year at the offices of the corpora- tions thus placed under his authority, and to examine their condition. As of the end of the same year the Superintendent was able to report what was then a very imposing 158 Story of Trust Companies aggregate of capital and deposits for the Empire State. He said: "Under the law passed at the last session of the Legislature, reports were made on the 30th of June last by twelve moneyed corpora- tions, variously styled trust, or loan, or indemnity or guaranty, or mortgage com- panies. These reports show that the com- panies have an aggregate capital of $11,752,- 040. Their deposits amounted to $38,479,764, a sum which is nearly three-fifths as much as the entire deposits held by the State banks. "In the endeavor to procure reports from this class of companies, it was discovered that many of them which have been incor- porated during the last few years have made no organization, while some others which have been organized have languished and failed in the end. It is believed that every company which is subject to the provisions of the law mentioned, is embraced in the re- ports which are elsewhere given. They show the several companies to be apparently in a sound condition, although the statement of one of them exhibits an impairment of capital. "During the present year the examination of these companies will be made as the law provides." Views of Federal Comptroller 159 That methods of supervision were needful, and had long been so, was clearly pointed out by the Comptroller of the Currency at Wash- ington, at the beginning of 1874. Commenting upon his report issued at that time, the Bankers Magazine presented the fol- lowing interesting remarks on the subject of supervision : "The Comptroller alludes to the trust and loan companies which have grown up in late years and now assume a large space in New York City and in various cities of New Eng- land. Properly managed, these institutions are not only useful but necessary. They were intended as repositories for trust funds, for accumulation of deposits to be loaned on mortgage, and for investments in government loans, in other words as Savings Banks on a large scale. Recently they have been con- verted into stock-jobbing concerns, appar- ently for the benefit of stock operators and in large sums ; thereby defeating their original objects and contributing to the demoraliza- tion of stock speculators. Call loans are among the active causes of a panic, and bank- ers handle them at a great risk. The Comp- troller's views are as follows: i6o Story of Trust Companies "'These companies are actually organized by special State Statutes in the large cities. Their capitals, deposits, and business are quite large in amount. Generally, if not always, they are not required to report to the State authorities, but under the orders of one or other of the courts. Some of these occur at long intervals and are probably published in the newspapers, but even when so published they are by no means full, and furnish but little available information. For instance, one of the largest of these institu- tions, has published but one report in a year and that report contains only a statement of its assets, without any mention of the amount due to its depositors or any of its liabilities. The bank Superintendent of New York in reply to an inquiry in reference to these institutions says (Under date of 31st July, 1873) : " '"The trust companies of New York are peculiarly situated. Some are under the supervision of the bank department; some are under the control of the Comptroller of the State, but the great majority of them are under no sort of supervision. This class of corporation (meaning the last described) has multiplied rapidly during the last few years. I am not able to furnish a copy of the charter of any of these companies.'"" First Comprehensive Statistics i6i The New York Superintendent's report for 1874 may be said to have constituted the first public showing ever made by a banking depart- ment of the aggregate position of a group of trust companies. It was only a forerunner, however, of some most interesting figures soon to be presented by Comptroller of the Currency, John J. Knox, than whom no person in public life has ever contributed more to the complete- ness of enduring bank statistics. In the Comptroller's report to Congress for 1875-1876, was set forth the following: Table of Aggregate Resources and Liabilities of Trust and Loan Companies Resources: 1874-1875 3S "banks" Loans and discounts $65,900, 1 74 Overdrafts 16,883 United States bonds 2,086,842 Other stocks, bonds, etc 37,323,062 Due from banks 1,837,605 Real estate 3,733.357 Other investments 2,880,342 Expenses 92,894 Cash items 5,186,004 Cash — legal — tenders, bank-notes, etc 3,833,012 Total $122,890,175 II i62 Story of Trust Companies Liabilities: 1874-1875 35 "banks'^ Capital stock $21,854,020 Surplus fund 6,967,693 Undivided profits 582,867 Dividends unpaid 1 8,92 1 Deposits 85.025,371 Due to banks 121,441 Other liabilities 8,319,862 Total $122,890,175 Accompanying this exhibit the same accounts were shown in detail by States, the aggregates being: Massachusetts 5 "banks" $ 9,033,335 Rhode Island i " 6,694,862 Connecticut 10 " 5,711,438 New York 12 " 69,654,948 Pennsylvania 7 " 31.795. 592 Total $122,890,175 In a footnote was added the fact that: "The financial editor of the Chicago Tribune states that the liabilities of five trust com- panies in the City of Chicago on June 30, 1875, were: Capital $2,500,000; surplus, $725,000; deposits, $5,688,574. But this statement, being unaccompanied by the 1875 Aggregates 163 resources of these banks could not be made available for the purpose of this report." It was also explained that in New York State the deposits were inclusive of "$3,696,344 of money in trust." The Comptroller discussed the figures of the trust companies with care and explained that: "among the States from which either no reports were received, or such as could not be utilized, are the great States of Illinois, Ohio, Virginia, Louisiana, Missouri, and many others." • At this point, forty years ago the little story of thirty-five reporting trust companies must have made small reading, in contrast with the Comptroller's showing of other kinds of institu- tions, of which there were: 2086 National Banks footing for 51,823,000,000 674 Savings Banks footing for 896,000,000 551 State Banks footing for 272,000,000 reporting altogether almost three billions of dollars, or about twenty-five times the modest 122 millions of trust company resources. 164 Story of Trust Companies The Comptroller made no mention of a con- cern located in the District of Columbia having the title of "Real Estate Loan & Trust Com- pany." This institution seems to have existed in Washington from 1877 to 1880. Its capital was $100,000, and it issued "real estate bonds secured by deeds of trust" on property as far away as Tennessee. A specimen "bond" is here shown in fac- simile. Readers familiar with the appearance of national bank currency in years gone by will detect a similarity. In fact, the size, form and texture of these "bonds " were all strikingly in keeping with Uncle Sam's own demand bank obligations of the same period. During the five years following the issuance of the report above described the growth of the companies, as stated by the Comptroller of the Currency, came almost to a standstill. The Rhode Island Hospital Trust Company, which has been previously sketched, continued to appear in the Comptroller's tabulations, but in every other State, between 1876 and 1880, there were decreases in the numbers of the companies and even a slight falling off in the ^\k' "N;'- \ a Si^ X vi >■ \ esi2« v^ ;^ ^ V ■1^ ^ t?t fi- ' ^ ^ 'n Q a o -t-> to B o +j w 3 u H c o ►-1 en W 0) \o 00 73 (U 3 CO o o A Slowing Down in Activities 165 summaries of their aggregate resources. The items and totals thereof were: 1876 38 companies $127,646,179 1877 39 " 123,612,499 1878 35 " 110,843,603 1879 32 " 111,809,936 1880 30 " 126,869,673 The Federal Comptroller's reports were not, of course, based upon complete information from all State sources, but a searching of current and modern records would make it appear that during the years 1877 and 1878, not a single trust company incorporation was effected in the entire United States. It seems strange that directly upon the ad- ministering of the new law at Albany, and the issuance of some live figures at Washington, there should have been displayed such inactivity among the old concerns, with an utter lack of interest in the formation of new ones. Yet it is a fact that at this period trust company activities hesitated, and the tide of their progress ran at a very low ebb. CHAPTER XII 1881 TO 1888. INCREASING NUMBERS OF COMPANIES The onward march was resumed in the early eighties, new incorporations occurring in many- quarters. The next of the very large companies arose in New York City, when on December i, 1 88 1, the Metropolitan Trust Company of the City of New York opened modest quarters at No. 41 Pine Street. The first president of the Company was General Thomas Hillhouse, who had been serv- ing as Assistant Treasurer of the United States, with headquarters at the New York Sub- Treasury. General Hillhouse had a notable career as a banker and State and Government ofhcial. Previous to assuming his duties at the Sub-Treasury, he had served as Adjutant- General under Governor E. D. Morgan during 166 Metropolitan of New York 167 the troublous times of the Civil War, and had a term as Comptroller of the State of New York. He had also been a member of the New York State Senate. The Company at its formation had an author- ized capital stock of $ 1,000,000 with authority to increase to $2,000,000. It continued to operate under the smaller capitalization, how- ever, until January 30, 1903, when following the successful termination of a series of important negotiations, the Atlantic Trust Company, which in former years had been one of the strongest of Wall Street institutions, was merged into the Metropolitan Trust Company. In order to bring about this union, the capital stock of the Metropolitan Trust Company was increased to $2,000,000 and in the merger two shares of Atlantic Trust Company stock were exchanged for one share of Metropolitan Trust Company Stock. Shortly after its beginnings on Pine Street, the offices of the Metropolitan were moved to No. 17 Nassau Street, on the site of the present Equitable Life Building, and thence a removal occurred afterwards when a change was made i68 Story of Trust Companies to a more advantageous location in the Mills Building at No. 35 Wall Street. The banking quarters at the latter address were continued until the Company went to its own building at No. 37 Wall Street, in 1888. The location of the offices was once more changed in 1904, to the Atlantic Mutual Insurance Company Build- ing at the corner of Wall and William streets, where they are now maintained. Upon the retirement of General Hillhouse in 1898, General Brayton Ives was chosen presi- dent, and served until 19 12, when George C. Van Tuyl, Jr., took office. Mr. Van Tuyl was formerly president of the Albany Trust Com- pany and had been appointed Superintendent of Banks under Governor Dix, in 191 1. During his term at the head of the Banking Department, Governor Dix appointed the Van Tuyl Com- mission which was charged with the responsible duty of revising the State's banking laws. The growth of total assets of this Company has been steady and consistent. In 1886 there were reported $5,787,174.20; in 1896, $10,763,- 138.50; in 1906, $35,470,279.90; and in 1916, $80,584,022.85, while surplus and undivided Title Guarantee & Trust 169 profits show an increase of over five millions of dollars from 1896 to date. In 1883 appeared the Title Guarantee & Trust Company of New York. Its beginnings were on the eighth floor of No. 2 Wall Street, using two hundred feet of floor space. In a recent magazine article, Clarence H. Kelsey, who has been President of the Company almost from the beginning, says of those early days: "Our address was all that could be desired, but the elevators stopped running shortly after six o'clock, and if my work required me to return after dinner, I had to climb seven flights of stairs. When I compare these Spartan beginnings with the facilities of the ten story building on Broadway now owned and occupied by us, I am satisfied that we have accomplished the thing we set out to do • — to create a business by providing a title- insurance service of a type which would be accepted as indispensable in local real estate transactions. "When our fight began, we had many hard problems to solve. The Register's office contained deeds, mortgages, and other I/O Story of Trust Companies real estate instruments covering a period of more than three hundred years. These were recorded chronologically and indexed under the names of the parties to the in- struments." Accordingly, the Company set out to abstract the essential portions of all recorded instruments and to separate and index them according to locality. Antagonism developed from the first on the part of the great law firms which then controlled the real estate conveyancing busi- ness, and of the Register and the official search- ers who drew large incomes from their plants, and from their personal knowledge of the very confused sets of records which existed in public offices. Years of diplomacy, litigation, and hard work ensued but as time went by the records were copied, indexed, and ready to use. By degrees standard rates w^ere made covering the examination of titles, all searches, and poli- cies of title insurance. These rates were well below the fees previously charged by the law offices. Later the organization was made to cover a business getting department; clients Expertness in Title Work 171 were furnished with purchase money mortgages to help them complete their purchases; an energetic band of young attorneys was gathered and trained to expertness in the matter of title examination and closing; speed was developed to the point of cutting down the time of exam- ining a title, which before the days of the Com- pany had taken from perhaps thirty to sixty days, so that now the claim is made that the Company can take care of almost any new title in a week or less and of a re-examination in twenty-four hours. Eventually the important business of selling guaranteed mortgages was developed to a degree unequaled by the record of any other similar concern. The Company from the beginning has been a firm believer in publicity. To-day it is without doubt the most widely advertised trust company in the country, using newspaper space, pamphlets, cards in the trolley cars, elevators, and subway trains, and annually distributing 150,000 copies of an attractive calendar. The Company's total resources in 1886 were less than $800,000. In 1896, they amounted to $5,877,352.78, and on June 30, 1906, to $46,675,307.69, while on 1/2 Story of Trust Companies the same day ten years later they were reported at $51,890,767.66. In 1903, the Company absorbed the Manu- facturers Bank of Brooklyn, which is to-day one of the Company's branches. In 1896, the capi- tal stock was $2,500,000; it is now $5,000,000. The surplus and undivided profits have grown in the last ten years from less than $7,000,000 to upwards of $12,000,000. With about $33,000,000 of deposits, the Company has recently made the impressive statement that: "For each $100 of our customers' money, we have in addition more than $50 of our own." Philadelphia's leading title company dates from 1885, although the recording system for deeds has existed in Pennsylvania since 1682, when the first act on the subject was passed. Among the acts and laws of the General Assembly of the Province of Penn- sylvania, 1 7 14-17 15, "being the First Year of the Reign of His present Majesty King George over Great Britain, France and Ire- land, etc.," was the Recording Act of May 28, 1715: Pennsylvania Title Records 173 "There shall be an office of record in each county of this province, which shall be called and styled the Office for Recording Deeds, and the Recorder shall provide parchment, or good large books of royal or other large paper, well bound and covered, wherein he shall record, in a fair and legible hand, all deeds and conveyances which shall be brought to him for that purpose." Other subsequent acts provided that recorded deeds and mortgages should be indexed, and that such entry "shall be notice to all persons." The above provisions have been continuously carried out to the present day, the only innova- tion being that the prescribed "fair and legible hand" has been supplanted by the legible typewriter. It was not until 1874, that the Pennsylvania Legislature authorized, by its general "Corpora- tion Act," the incorporation of companies for "the insurance of owners of real estate, mort- gages, and others interested in real estate, from loss by reason of defective titles, liens, and incumbrances." Prior to this Act (from 1836 to 1874), a few Philadelphia companies had been 174 Story of Trust Companies chartered with trust powers, but without title insurance powers. The first title company chartered under this act was The Real Estate Title Insurance & Trust Company, chartered in 1876. Gradually overcoming the local conservatism and opposi- tion of conveyancers and conveyancers' counsel, the system of insurance of titles made its way by inherent merit, and in 1885, a second com- pany was incorporated, The Land Title & Trust Company. It began business in 1885, in a rented room at No. 621 Chestnut Street, and within three years erected a large office building at No. 608 Chestnut Street. Within ten years the increase of its business, and the j)revision that business would in the future invade the neighborhood of the new City Hall, at Broad and Market Streets, resulted in the purchase by the Company of a new central site at the southwest corner of Broad and Chestnut Streets, and the erection of offices, with ample plant and safe deposit facilities. In 1903, this building was supple- mented with an adjoining big brother of twenty- two stories, into the entire first floor of which Land Title of Philadelphia 175 the Company's offices have overflowed. That more than 182,250 title policies, and over 155,000 certificates of search have been issued by The Land Title & Trust Company down to August, 1916, is evidence of the extent of the business. The losses by payment of indemnity for defects in title, undiscoverable or undiscov- ered at the time of issuing the guarantees, while a small percentage, are in the aggregate a multitude. During the first ten years of the Company's existence, the banking department was some- what subordinated to that of title insurance, and in 1896, the resources were less than $4,000,000. In the next decade, how- ever, broadening activities in the former field were evidenced by assets of $15,226,529.04, and at the time of this writing, $21,184,939.52 are shown. To care for this expanding volume of business the original capital of $1,000,000 was doubled in 1904, and the surplus was gradually increased until it is now $5,000,000. The Company has had three presidents, Charles Richardson, August, 1885 to November, 176 Story of Trust Companies 1887; Nathaniel E. Janney, to November, 1 891; and William R. Nicholson, serving since that time. Another important undertaking in the field of title insurance and trust business in New York occurred four years later, in 1887, when the Lawyers Title Insurance Company was or- ganized and, as the name implied, undertook a business of title insurance with lawyers, until 1900, when its scope was extended to cover the entire field of title examination and insurance. The original capital was $500,000. In 1905, trust company powers were acquired, the Central Realty Bond & Trust Company was absorbed and the name was changed to Law- yers Title Insurance & Trust Company; it so remained until 191 5, when upon taking over the Home Trust Company of Brooklyn, the present name. Lawyers Title & Trust Company, was adopted. The first offices of the Company were located in the old Equitable Building, No. 120 Broad- way, and afterwards in larger quarters at No. 37 Liberty Street, from w^hich in 1908 the Company moved to its new building at No. Fidelity of Newark 177 160 Broadway. There are branch offices at No. 44 Court Street, and No. 188 Montague Street, Brooklyn. The founder and first president was Edwin W. Coggeshall, who continues to guide the prosperous course of the Company as Chairman of the Board of Directors, having in 191 5 been succeeded in the presidency by Louis V. Bright. The capital stock in 191 6 was reported at $4,000,000; the surplus and undivided profits at $5,263,000, and the total resources at $31,135, 000. This last figure was a growth of nearly $12,000,000 during ten years past. New Jersey had for years been the home of several important trust companies, when in 1887 a new institution appeared in Newark. Its able and progressive management soon gave it a conspicuous position, and for years it has been conceded to be the largest and strongest of such institutions in the State. It began business under the name of the Fidelity Title & Deposit Company which, however, was soon changed to Fidelity Trust Company. The institution was opened on May i, 1887, under a charter granted February 14th 178 Story of Trust Companies of the same year. Its original capital was $200,000, which has since been increased to $3,000,000, in addition to which the institution has a surplus of $2,000,000, and undivided profits of over $1,000,000. In 1901, its total resources were about $8,000,000, while at the present time, 191 6, the Company reports more than $30,000,000. There have been two presidents, the first, Thomas T. Kinney, and the present incumbent, Uzal H. McCarter. During the last ten years, the Fidelity has acquired the following insti- tutions: Newton Trust Company, Newton N. J.; Essex County Trust Company, and its branch. East Orange, N. J.; Union County Trust Company, Elizabeth, N. J.; New Bruns- wick Trust Company, New Brunswick, N. J.; and Red Bank Trust Company, Red Bank, N. J. The bid price of the Company's stock in 1906 was 750, and dividends of thirty per cent, were declared. With $2,000,000 capital, and $7,500,000 in surplus and undivided profits, the Fidelity's capitalization was readjusted in 1915. After special cash and stock dividends amounting to $7,500,000 had been declared Industrial of Providence 179 and paid, the capital was increased to $3,000,000, upon which the institution now pays 20 per cent, dividends. This year, 19 16, it also paid an extra dividend of 10 per cent. At the present time its new stock is quoted at 450. Rhode Island's largest trust company was incorporated under the title Industrial Trust Company, on June 9, 1886, and formally opened for business in Providence in August of the following year. Rooms in Custom House Street were occupied until the completion of pennanent quarters in the Exchange Bank Building, Westminster and Exchange Streets and in December, 1887, the Company took possession. Colonel Samuel P. Colt was the first Presi- dent, succeeded after twenty years of service, in 1907, by Cyrus P. Brown. Colonel Colt, since 19 13, has been Chairman of the Board. In 1912, Colonel H. Martin Brown, the present managing executive became President. The Company has since 1894 occupied its own build- ing, a nine story structure erected partly on the site of the old Atlantic Insurance Building, at Westminster and Exchange Streets. It now i8o Story of Trust Companies sustains eight branches in adjoining cities and towns. The original capital of $500,000 has been increased from time to time and now stands at $3,000,000, with surplus and undivided profits of $4,700,000, as against $326,000 in 1896. The Company's total resources have grown from $6,416,573 in 1896, and $50,514,749 in 1906, to $65,438,423.59 at the present time. Among some prominent New Yorkers who have served on its directorate may be mentioned Levi P. Morton, James Stillman, George F. Baker, Thomas F. Ryan, Elbridge T. Gerry, and Jacob H. Schiff. The Franklin Trust Company was organized by the late Abicl Abbot Low and a group of other prominent Brooklyn men, and commenced business at No. 186 Remsen Street, Brooklyn, on August I, 1888, with a capital of $500,000, increased a year later to $1,000,000. In 1892 the Company moved to the hand- some office building which it had erected at the comer of Montague and Clinton Streets, and also established the Franklin Safe Deposit Company which it controls. The Franklin of Brooklyn i8i In 1904 the control of the Safe Deposit Company of New York was obtained, and a branch of the Trust Company was started over the office of the Safe Deposit Company at No. 140 Broadway. This branch is now located at No. 46 Wall Street. Besides the main office at No. 166 Montague Street the Trust Company now maintains three Brooklyn branches, one at No. 569 Fulton Street, near Flatbush Avenue, one in the Walla- bout Market, and one in the Navy Y. M. C. A. Building on Sands Street, the last having been opened for the convenience of sailors in the United States Navy. In 191 1 the Company was elected to full membership in the New York Clearing House Association. The Company has a large individual trust business in Brooklyn and has acted as executor and trustee for many of Brooklyn's prominent citizens. The institution has always been progressively advertised, and its frequent quoting of the maxims of Benjamin Franklin has been an effective, because humanly interesting, scheme of publicity. On December 31, 1896, nine years after the 1 82 . Story of Trust Companies Company's inception, the total resources were $7,000,000; ten years ago the aggregate was $18,000,000; on June 30, 1916, the $25,000,000 mark was passed. Edwin Packard, was the first President, serving until 1891, when he was succeeded by George H. Southard. In 1908, Arthur King Wood, the present incumbent, was elected. The mention of Mr. Wood's name is a re- minder of another trust company official whose term of service began almost one hundred years ago. This was his great-grandfather, John King, Assistant Secretary of the old Farmers Fire Insurance & Loan Company, in the early twenties of the past century. Later he became the Company's Secretary and labored in that capacity for many years. Mr. King was a strict Quaker; he always objected to having his por- trait painted, and no likeness of him is known to exist. About the year 1835 he had a premoni- tion that he was about to die and as the result resigned his office and settled up his affairs, passing away in December of that year, just at the time when the great fire in New York was raging. CHAPTER XIII 1889 TO 1890. ADDITIONAL NEW COMPANIES There were several important incorpora- tions during the year 1889. In a description of these, two immense institutions of the present day make their entry into our story; one in New York, the other in Pittsburgh. In that year the New York Trust Company began business under the title of New York Security & Trust Company. The offices were at No. 46 Wall Street, when, in 1904, the Continental Trust Company of the City of New York was absorbed. This latter institution, whose President was Otto T. Bannard, had, at the time of the merger, total resources of over $20,000,000, its share capital being $1,000,000. The New York Security & Trust Company's President, In 1904, was Charles S. Fairchild 183 184 Story of Trust Companies who had formerly held the high office of Secre- tary of the Treasury under President Cleve- land. At this time the total resources were $35,000,000. The enlarged Company had $3,000,000 of capital stock thereafter and Mr. Bannard became the President. The commo- dious offices of the former Continental Trust Company at No. 26 Broad Street were then chosen as the home of the merged institutions. In 1906, two years after the events described above, the New York Trust Company had assets of $59,730,496.58, and the surplus and undivided profits were $10,552,011.16. In 1916 the totals were $94,457,922.23 and $11,372,284.- 16 respectively. Mortimer N. Buckner is now President of the Company, having been elected in January, 1916. Twenty-seven years ago a group of Pitts- burgh men, headed by A. W. Mellon, subscribed $125,000 of trust company capital and opened an institution for business in the Fidelity Building, No. 121 Fourth Avenue. Two years later the capital was doubled, but by 1896 the aggregate of capital, surplus, and deposits of Union of Pittsburgh 185 the young institution, known as the Union Trust Company of Pittsburgh, was less than half a million of dollars. Where, imless in a city of such achievements as that in which this enterprise began, would it be expected to find at the end of twenty years an accumulation of more than two hundred times the amount of wealth reported after seven years of initial operations? For the Union Trust Company, on June 30, 191 6, was one of eleven concerns in the country having over one hundred milhons of dollars of resources. Upon its directorate are such well-known nam.es as those of Henry C. Frick and Philander C. Knox. With the tremendous growth of Pittsburgh's industries, the Company has thrived and en- larged during all the years, its one hundred and one millions of dollars of resources being about double the sum reported ten years ago, and representing at the present time over one seventh of the total bank and trust company resoiu"ces of Pittsburgh. The present capital stock is $1,500,000, the surplus and undivided profits $34,000,000. 1 86 Story of Trust Companies The shares are one hundred dollars par, their present book value about $2375 each, and the market quotation much higher. The various dividends paid during the past year, down to June 30, 1 91 6, have amounted in the aggregate to 146 per cent, upon the capital. The Company's offices at this writing are at No. 335 Fourth Avenue, where since 1900 H. C. McEldowney has been President, having at that time succeeded J. S. McKean. Back in 1889, when Los Angeles was a city of fifty thousand inhabitants, the Security Trust & Savings Bank was started upon an eventful career. Its organizers subscribed to $29,000 of capital and established headquarters for the new project in one small room in the Wiel Building at No. 148 South Main Street. The bank was organized by J. F. Sartori who still directs its affairs as President; M. S. Hellman, Vice-President, and W. D. Longyear, Cashier, became affiliated with the institution soon after its organization. In 1896, under the name of the Security Savings Bank, the office was moved to the corner of Main and Second Streets, with an enlargement of these quarters A Los Angeles Institution 187 following in two years. Its remarkable growth was partly due to the great progress of the West about this time. By 1900 the resources were $2,000,000, in 1902 almost $4,000,000, and in 1904 over $10,000,000. One of the factors in the institution's growth was its absorptions of various other concerns. In 1904 the Main Street Savings Bank was acquired, it having been started the same year as the Security. Along with a change to the Hellman Building in the same year, came the absorption of the Los Angeles Savings Bank, founded in 1887. At the time of the 1907 panic the Security took over the interests of the Southern California Savings Bank, a large institution founded in 1885, and in the following December another change in location was made to the comer of Fifth and Spring Streets. A further acquisition was made in 19 12 when it took over the Equitable Savings Bank, the founders of which were W. J. Washburn and Willis Booth. Shortly afterward the Southern Trust Company was acquired, and the institution from this period may be said to have entered upon a trust company business in the fullest sense. i88 Story of Trust Companies The reports of 1909 showed resources of $20,000,000 and 48,000 deposit accounts. On June 30, 1916, the capital was $1,800,000, the surplus and undivided profits $2,045,000, the entire balance sheet showing an aggregate of assets of $51,000,000, making it, in this respect, the strongest concern engaged in trust company business west of Chicago. One of Chicago's leading institutions, the American Trust & Savings Bank, organized in 1889, for a time having as its President G. B. Shaw, and later Edwin A. Potter, was taken over by the stockholders of the Continental National Bank in August, 1909. Under the arrangement then effected, all of the stock was acquired by the stockholders of the Continen- tal & Commercial National Bank, and the title changed to Continental & Commercial Trust & Savings Bank. The institution is allied with the present great Continental & Commercial National Bank of Chicago, both companies being presided over by George M. Reynolds as President. The concern is fourth in point of size among trust companies in the Central West. It occupies quarters in the New England's ''Foremost" 189 Continental & Commercial Bank Building at No. 208 South La Salle Street, and reported, on June 30, 1916, $3,000,000 capital, $2,114,000, of surplus and undivided profits, and $50,845,000 of total resources. We come now to the story of New England's foremost trust company development. This bears the name of the Old Colony Trust Com- pany of Boston. On the 14th of June, 1890, it began a business destined to become the largest of its kind in New England. The story of that first day's transactions as carried on in a small back office at No. 50 State Street was graphically told in a sketch published by the Company twenty-five years later. This is how it reads: "Business was not particularly brisk, and when the closing hour arrived the cus- tomers of the youngest banking institution in Boston numbered two, both of whom were officers of the company. The office force consisted of three, Messrs. T. Jefferson Coolidge, Jr., Charles S. Tuckerman, and George E. Stickney, assisted by an office boy, name unknown, who vanished before the 190 Story of Trust Companies day ended. Mr. Tuckerman was the first de- positor, opening an account for himself and another as trustee. The third and final de- posit for the day was made by Mr. Coolidge. Thus it was sort of a family affair — that first day's business — and it offered no sug- gestion of the surprising change which the ledgers were to reveal after twenty-five years : open accounts, 32,625; customers resident in forty-three out of forty-eight States, in Hawaii, Porto Rico, and the Philippines, and also in Canada, Mexico, the West Indies, Central America, South America, England, France, Switzerland, Italy, Germany, Syria, China, Japan, and Australia; resources more than one hundred millions of dollars; fifth largest trust company in America." In 1892 the Company removed to the Ames Building at the corner of Washington and Court Streets. Until that time accounts were added slowly; in fact, a year later, the record of customers' accounts was being kept in a book of two hundred pages having spaces for only 2400 names. In 1902 the Temple Place branch was opened, and in 1909 the site at No. 17 Court Street was purchased, and the Company's The ''Old Colony" 191 present home erected thereon, being first occupied in December of that year. The Company grew without consoHdation until its deposits were in excess of $40,000,000 in 1 910. In this latter year it was consolidated with the City Trust Company and its deposits increased to approximately $75,000,000. In 1 9 14 the Bay State Trust Company with about $6,500,000 of deposits was conaoHdated into the Old Colony Trust Company. This former company had long been controlled by stock ownership, and through this consolidation the Old Colony Trust Company acquired a second branch office on Boylston Street. In 1903 Gordon Abbott succeeded Mr. Cool- idge as President and served until 1910 when Philip Stockton, the present incumbent, was chosen at the time of the consolidation with the City Trust Company. In 1913 Mr. Abbott became Chairman of the Board and Francis R. Hart, Vice-President, was made Vice-Chair- man. The story of the growth of this huge concern, as expressed in figures, contrasts strikingly with the piquant account of that "first day," and is 192 Story of Trust Companies of more than passing significance. In 1896 the Company had total resources of $11,772,302.74 and capital of $1,000,000. By 1906 the total resources were $40,019,005.63 and the capital stock had been increased to $1,500,000, while the surplus and undivided profits were over $5,500,000. During the past ten years, within which time most of the mergers referred to were con- summated, the capital stock has been further increased to $6,000,000. The surplus and undivided profits on June 30, 1916, were $6,932,062.29, the deposits $126,820,621.31, and the total resources, as of the same date, $140,- 235,869.34, making the Old Colony now the sixth largest trust company in America. Of trust institutions in St. Louis which have endured down to this time, the Mississippi Valley Trust Company is one of the oldest. It was incorporated under the laws of Missouri in 1890 when St. Louis was a city of 460,000 people; to-day there are 800,000. Then only two bridges spanned the Mississippi River where now there are four, and in this space of twenty-six years the city's banks have Mississippi Valley Trust Co. 193 doubled in number while their wealth has been increased sixfold. Six years after the Company was established, its total resources were reported at a little more than $4,600,000. The precise total in June, 1906, was $25,647,603.53; in June, 1916, the figure was $30,002,168.57. Its first President, Julius S. Walsh, is now Chairman of the Board of Directors, having been succeeded in the presidency by Breckin- ridge Jones, the Company's first Secretary. The Company is located at the northwest corner of Fourth and Pine streets where the regular appointments incidental to banking and trust company business are maintained, in- cluding a real estate, a bond, a farm loan, and a safe deposit department. The first office was in a single room on the third floor of the old Laclede Building. After a year the Company moved to No. 303 North Fourth Street, expecting to occupy those quarters for some time, but the rapid growth of the busi- ness soon necessitated another change and the fine white stone building it now occupies was erected. The capital stock, originally $1,300,000, has 13 194 Story of Trust Companies been increased at intervals and now stands at $3,000,000, while surplus and undivided profits of over half a million of dollars in 1896 are reported at $5,307,470.16 for 1916. The Company has had the administration of some very large trust estates. Four of these, amounting in each case to upwards of a million dollars, are in the names of the late James T. Drummond, tobacconist, Eugene F. WilHams, shoe manufacturer, and Charles Clark and Auguste B. Ewing, capitalists. Among numerous enterprising features of m.anagement should be mentioned a bi-monthly periodical entitled Service addressed to "those who are, and those who might be, patrons of the Mississippi Valley Trust Company." The Company's steady growth has been that of a single institution without absorption of, or consolidation with, any other corporation. CHAPTER XIV 1 89 1 TO 1900. THE LARGEST TRUST COMPANY OF PRESENT TIMES AND SOME LATER ORGANIZATIONS We come now to the recounting of some achievements by a single trust company during the past quarter century, the scope and volume of which have been upon an imrivaled scale. This is the story of the Guaranty Trust Company of New York, a comparatively young concern, yet now the largest trust company in America. The institution, like some others in the earlier years, sprang from an older cor- poration with fiduciary powers of a very differ- ent character from those embraced in trust operations. This forerunner was the New York Guaranty & Indemnity Company, dating back to 1864. From then until 1891 a business in guarantees was transacted in line with the 195 196 Story of Trust Companies title, but in limited proportions. The accom- panying illustration shows the old Company's home in Broad Street adjoining the former Stock Exchange. About 1890 it occurred to the minds of a group of prominent New York financiers that there would be possibilities in a plan of broad- ening out into a regular trust business, including the receiving of deposits. This was per- missible under its charter, the Company always having been under the supervision of the State Banking Department. In 1891, the capital was increased from $100,000 to $2,000,000, with a paid-in surplus of $500,000. The institution then began business as a full-fledged trust company at No. 59 Cedar Street, in the Mutual Life Building. This was under the presidency of Edwin Packard, who was succeeded by Walter G. Oakman in 1894. Tw^o years later the title was shortened to read Guaranty Trust Company of New York. John W. Castles succeeded Mr. Oakman in 1900, and Alexander J. Hemphill be- came President in 1908. The last named is now Chairman of the Board, Charles H. Sabin hav- ing succeeded to the presidency in 191 3. Modern Organization 197 The directorate of the Company from the first has been made up of names synonymous with great things in the financial world. Dur- ing the early years the Board comprised, among others, George F. Baker, August Belmont, Edward H. Harriman, Levi P. Morton, Alex- ander E. Orr, and Frederick W. Vanderbilt. In 1 910, the Morton Trust Company and the Fifth Avenue Trust Company, each of them old-established institutions, were merged with the Guaranty, and in 1912 the Standard Trust Company, another representative institution, was absorbed. The growth of the Company soon necessi- tated increased office space on the first floor of the Mutual Life Building, but these quarters were shortly outgrown and in 1913 a new build- ing was erected and occupied at No. 140 Broad- way, comer of Liberty Street. It is one of the most impressive bank buildings in the world, containing every known appliance to faciHtate work and to insure the comfort of customers and employees. In its modern vaults repose some billions of dollars' worth of holdings in trust. Pneumatic tubes give instant communi- 198 Stoiy of Trust Companies cation between different parts of the building, which contains over eight hundred employees. On the upper floors there are conference rooms for the use of visitors and customers, and these afford transient headquarters for out-of- town guests. There is also maintained one of the most comprehensive business and financial libraries in the country. The spirit of co-operation and companion- ship is highly developed among Guaranty Trust Company officers and employees, whether at work or at play. There are efficiency prizes, a debating society, and bowling and baseball teams belonging to the trust company leagues. Outings occur each summer and in winter the Guaranty Club holds banquets. There is a liberal pension system administered by an official board of managers appointed by the Board of Directors. The Guaranty Company's uptown office has been at Fifth Avenue and Forty-third Street in offices formerly occupied by the Fifth Avenue Trust Company. In the fall of 1 91 6 it moved into new quarters directly across the street on the southeast corner, occupying (J) z o _l _l J 1,373, 582.77 12,536,541.17 CO CD CO m CO CO T- CD CO CD -^ CD in o O irT in d CD CD oo" CO CO in q CD in h-_ in CM _35,005,909.35 31,256,107.47 40,575,949.95 45,928,677.93 49,686,722.65 48.473.899.89 _75,879,278.29 49,590,874.66 o o CO CJ Tj- CO c^4_ in ci CD CO in "L ° co" co' LOl CO CO CD CO in co' q cn a. 183,632,228.90 217,370,274.83 239,676,686.19 234,639,804.27 295,840,415.11 385,036,878.84 520,744,575.24 I i , ; i ! 1 o o in 1 o o +-■ Q. - 00 CO -"l- 00 CO incD h-|COcD o *- CJ CO Tt-iin to r- oo cd o ■»-cnj co -tt^^ C^ CD| CD CD CD O: O O O O Oi O O O O i-i -^ ■»-| t~ , t- 1 ■»" CO CO 00 00 CO j a> CD CD CD CD, CD, CD. CD CD, O^, 0>[ CDj Qlj CD| CD' <^ 1 " " " ^1 "■ " " " "i " ' "1 "1 "1 ", "1 ^i ^i " CO A Significant Comparison 199 four floors of an impressive new building. An- other up-town office is being built at Madison Avenue and Sixtieth Street. There is an office in London and there are resident representatives in Paris and Buenos Aires. The capital was increased to $5,000,000 in 1910, again to $10,000,000 in 1912, and on November 8, 1915, was brought up to a total of $20,000,000. There is upwards of $20,000,000. of surplus and undivided profits at the present time, and with over half a billion of total resources, deposits in the neighborhood of $400,000,000, and a foreign department trans- acting an annual business of approximately six billions and a half of dollars, the institution stands to-day first among trust companies and is exceeded in size by only one bank, the Na- tional City. The growth of the Company in aggregate resources, during the past twenty- five years, is graphically shown on the oppo- site page. Some appreciation of what the Guaranty Trust Company's present $520,000,000 of total resources and liabilities signify is to be had when a country- wide glance is taken backwards 2C0 Story of Trust Companies to a point twenty years ago. The Bankers Encyclopedia of 1896 contained a reasonably complete showing of trust compan}^ figures even though these were unofficial. A tabulation shows that there were then forty-one companies in New York State having liabilities of 387 millions of dollars. The aggregate for Pennsyl- vania's eighty- two companies was 183 millions. These 123 companies in the two leading States, as regards trust company development, amounted at that time to but 50 millions of dol- lars more than the total now shown by this one New York company. The tabulated totals for 509 American companies showed capital 152 millions, surplus and undivided profits 96 millions, deposits 709 millions, grand total 957 millions, a sum equal to just 184 per cent. of the Guaranty's 520 millions, as shown in 1916. The assertion has been recently and authori- tatively made that the "turnover" of this great institution, — its aggregate of funds annu- ally handled, including securities and foreign exchange — is greater than that of any other banking corporation in the world. Panic of 1893 201 A few words should here be said regarding the financial crisis of 1893. Early in that year a country-wide business disturbance occurred. There was a series of distressing railroad fail- ures, including the Erie, Reading, Northern Pacific, Union Pacific, and Atchison. In New York the deposits of the Clearing House banks fell from 431 millions of dollars to 370 millions in less than three months. During August a premium was demanded everywhere upon all kinds of currency. The business collapses of the year numbered over fifteen thousand. Among these were 598 financial institutions made up of National, State, and savings banks, private bankers and loan and trust companies. But a remarkable thing to be noted regarding the banking troubles of 1893 was the stability of the loan and trust companies. For if any proof were needed that by now these trust institutions had established themselves on a firm foundation, and had come to stay, it is to be seen in the insignificance of the number of suspensions, which out of 598 banking failures of all kinds amounted to only 14. It is a fact, too, that almost without exception the 202 Story of Trust Companies companies to close were small concerns, as a rule located in unimportant fields. The United States Mortgage Company, established in 1871, first undertook a trust and deposit business in January, 1893. Among the names of the incorporators are found those of J. Pierpont Morgan, Abiel A. Low, Charles G. Landon, David Dows, and other men who were large factors in the financial and business life of the city, state, and nation. In common with the Guaranty Trust Company, its expan- sion was promoted by Mutual Life interests. After two years of operations under the old title its name was altered in 1895 to United States Mortgage & Trust Company. The "Mortgage Company," as it has been familiarly known, has continued to carry a large line of conservative real-estate loans, placed mostly in the larger cities of the West and South. Charles R. Henderson was the first Presi- dent, and the order of succession has been: George W. Young, 1894; George M. Gum- ming, 1905; Arthur TurnbuU, 1908; Cornelius C. Cuyler, 1909; and John W. Platten, since 1910. The ''Mortgage" Company 203 The capital prior to 1893 was $1,000,000. Since that time it has been $2,000,000. In 1903, the writer of the present volume, who was at that time Treasurer of the Company, recommended to its Board a plan of annually publishing a book of trust company statements. These figures, with other data and the names of the officers and directors of all American companies, first appeared as of June 30th that year. The idea has been availed of every summer since under the title, "Trust Com- panies of the United States." Each issue has been presented to the financial public as com- plimentary on the part of the "Mortgage Company." The collected volumes form a sub- stantial compendium of facts and statistics, covering thirteen years past, the usefulness of which in preparing this work is gratefully acknowledged. The present strength of the Company has been gained through a gradual and steady accretion of business without mergers or con- solidations of any kind; while thoroughness, dependability, and trustworthiness have char- acterized the administration of its affairs. 204 Story of Trust Companies Twenty years ago the Company's total resources were $13,000,000; ten years ago they were $49,000,000; in 19 16, they reached the one hundred million mark, making it one of the eleven trust companies in the country having total resources of this amount, or upwards. The United States Mortgage & Trust Company's main offices have always been in Cedar Street, in the Mutual Life Building. There are two uptown branches. There are a number of important trust com- panies on the Pacific Coast to-day, and of the very large ones the Union Trust Company of San Francisco is the oldest. It was established in 1893 under Isaias W. Hellman, as President, who continued in that office until 191 6, when he became Chairman of the Board and was succeeded, as President, by his son, I. W. Hell- man, Jr. Three years after this organization was effected, the Company had $750,000 capi- tal, $100,000 of surplus, and a shade less than $3,000,000 of total resources. The capital to- day is $1,200,000; the surplus is $1,847,000; the total resources are, approximately, $30,000,000. Cleveland Trust Company 205 The offices in the early years were at the junction of Post, Montgomery, and Market Streets. Since 191 1 the Company has been at the intersection of Market and O'Farrell Streets and Grant Avenue. The par of shares of stock is $1000 each, and these are now quoted at $2350 per share. The Cleveland Trust Company was organized in 1894 ^^^ began its career in a small room on the ninth floor of the Garfield Building with a capital of $500,000 and a paid-in surplus of $100,000 and no deposits. In the face of all kinds of impediments it went to work and after the lapse of half a year the secretary reported deposits of $62,000 and a trust business that consisted of the certifying of an issue of bonds. On September 10, 1895, the Company moved into the basement of the Garfield Building where it had purchased the vaults of the re- cently organized Security Safe Deposit & Trust Company, the latter going out of busi- ness and the Cleveland Trust Company taking its place and equipment. From this point the progress of the institution has been un- checked. Before the close of 1896 the deposits 2o6 Story of Trust Companies passed the million-dollar mark. Inside of two years additional space was required and a ground-floor office was rented. On January 6, 1903 a consolidation was effected with the Western Reserve Company, which brought the capital of the Cleveland Trust Company up to $1,750,000 and the sur- plus to $1,050,000. J. G. W. Cowles was President until 1903. Calvary Morris succeeded Mr. Cowles and retained the presidency until 1908. He was followed by Frederick H. Goff, who is President at this time. The Cleveland Trust Company has absorbed a number of other trust companies and banks in and near Cleveland during the past twenty- one years, many of these institutions having formed the basis of the present system of Cleveland Trust Company branches. The branch bank idea is only one of the num- ber of innovations for which the Cleveland Trust Company is noted. It was the first bank to adopt advertising as a direct influence for the increase of its business. It was the first bank to advertise nationally for savings deposits by mail. It was the first bank in Distinctive Policies 207 Cleveland to have a separate department for women, and it was also the pioneer in the establishment of a number of distinctive policies for the greater safeguard of its depositors' and, in general, of its patrons' interests. Four fundamental principles, widely an- nounced as characterizing the Cleveland Trust Company, are: 1. No loans to directors or officers; 2. Joint control of securities and cash; 3. Continuous daily audit; and 4. Directors who direct, all of these policies having been fully consum- mated during Mr, Goff's presidency. Starting with four employees in an up-stairs room, smaller than any of its present branches, the Cleveland Trust Company now has nearly four hundred employees, a monumental office building at the corner of Euclid Avenue and East Ninth Street, a five-story annex to the main building, and fifteen branches m addition to the main building. It serves a geographical territory of about sixty miles in length and twenty miles wide. It has over 122,000 ac- counts; the present capital and surplus is more 2o8 Story of Trust Companies than $5,200,000, and its total resources on June 30, 1916, were $49,071,447.24. In addition to its phenomenal growth and its unimpeachable stability as a savings bank, it has made great progress in its trust and estates departments. It has perfected a num- ber of unusual types of trust agreements among which may be mentioned the "Living Trust" agreement. It is also trustee for the funds and estates brought together under the denomina- tion of the Cleveland Foundation, which is a community trust, comprising a union of gifts from different estates or parts of estates contri- buted by the people of Cleveland and managed for them for the benefit of the community. This plan, originated by Mr. Goff, is now nearly two years old and has been copied in no less than thirteen other American cities. Mention is next to be made of a great south- ern institution, organized as a trust company in New Orleans in 1895. This was the year in which the Canal Bank & Trust Company acquired the assets of the old Canal Bank. Nine years later the Louisiana National Bank was also absorbed. Canal Bank & Trust Company 209 The story of the Can?l Bank dates back to 1 83 1, when, as the first of a series of what were then known as improvement banks, it secured a charter for the purpose of financing the con- struction of a navigation canal connecting the then American port of the City of New Orleans, Faubourg St. Mary, with Lake Pontchartrain. Under this charter extensive banking privileges were allowed, and during the vicissitudes of over eighty-five years, the Bank has always served the communit}^ remaining open during the three wars and numerous panics that have intervened, and is to-day occupying its own ten-story building located within a hundred- yard radius of the sites of the four banking houses which it has erected and outgrown during the three generations of its existence. Accordingly this modern trust company makes the proud claim of being the oldest insti- tution amongst more than ten thousand bank- ing corporations in the Mississippi Valley. In 1904 R. M. Walmsley, who had been Presi- dent of the Louisiana National Bank, assumed the same title in the trust company. The com- bined assets of the two institutions were then 14 210 Story of Trust Companies a matter of about $11,000,000. In 1916, with capital of $2,000,000 and surplus and undivided profits of $636,000, the total resources and liabilities have grown to an aggregate of $19,400,000. W. R. Irby acts as President at this time, and W. P. Burke is Chairman of the Board of Directors. The Company's building is attractively located at Camp and Gravier Streets. One St. Louis trust company, the Mercan- tile, had its beginning in a real-estate office on the first floor of the Columbia Building in that city. This was in 1899 and one clerk acted as Paying, Receiving, Discount, and Note Teller, answering the telephone and helping with the correspondence. On that day, seventeen years ago, Festus J. Wade, then and now the Presi- dent, witnessed deposits with the Company of about $17,000. In the meantime he has seen the Company expand to an institution with over $40,000,000 total resources. The Mercantile now has a capital of $3,000,000 and $6,800,000 of surplus and undivided profits. The Company has eleven departments including a department with safe-deposit vault ca- The Mercantile of St. Louis 211 pacity of seventeen thousand boxes. The Cor- poration Department, although comparatively recently organized, has charge of over fifty corporations, many representing very large St. Louis interests in the field of incorporated estates, realty and similar operations, and which leave to the Trust Company the entire management of their affairs. The Real Estate Department, instituted some years ago, when the Anderson Wade Realty Company was absorbed, is responsible as agent for the erection and financing of many promi- nent buildings in St. Louis, including the Jeffer- son Hotel, the Planters' Hotel, the Hargardine McKittrick, the Grand Leader, Union Electric Light Buildings, Jefferson Theatre, and other business structures. The Mercantile also has a Foreign Exchange Department which had its inception at the time of the World's Fair at St. Louis, and it issues its own travelers* checks. In 1904 the Mercantile Trust Company acquired the goodwill and assets of the Ameri- can Central Trust Company. In the same year an alarming run occurred in St. Louis and, 212 Story of Trust Companies with disconcerted customers clamoring at the doors, a quick remedy had to be provided. The directors met and created a joint pledge of their personal fortunes, estimated as worth about fifty millions of dollars. Very naturally the run subsided as quickly as it had begun. The Mercantile Trust Company is a member of the Federal Reserve Bank and is the only trust company in the eighth federal reserve district having membership in this system. The Mercantile was the first trust company in St. Louis to join the St. Louis Clearing House Association, and was for a number of years the only trust company member. The institution is under the supervision of four governing bodies, the only institution in St. Louis so supervised. These are the Federal Reserve Bank, the State Bank Department of Missouri, the State Bank Department of Illinois, and the St. Louis Clearing House. The Company has had many large trusts, a comparatively recent one being that under the will of James Campbell of St. Louis, This estate of nearly twenty millions of dollars is being administered by the Company for the Commercial of New Jersey 213 benefit of the wife and daughter during their lifetime, after which the entire trust estate goes to the St. Louis University. The Mercantile National Bank is affiliated with the Mercantile Trust Company, both being under the same management. The capi- tal of the Mercantile National Bank is $1,500,- 000, the surplus and undivided profits over half a million dollars, and total resources over nine million dollars. The Mercantile Trust Company has occupied the very attractive building at Eighth and Locust Streets, adjoining the Mercantile Na- tional Bank building, for a period of over fourteen years. An addition will shortly be built, and will occupy the half block north of the present building. A final word is to be said regarding nine- teenth century incorporations, on behalf of the Commercial Trust Company of New Jersey, es- tablished in 1900. It is located at No. 15 Ex- change Place, Jersey City and has been under the management of John W. Hardenbergh since its beginning. Having absorbed the Third National Bank of Jersey City in 1915, this 214 Story of Trust Companies institution has a number of prominent New York names represented on its directorate, and the trustworthy nature of its operations is wxll illustrated by the following figures showing growth : Capital Surplus Total Resources igoj $1,000,000.00 1,851,256.27 11,025,312.84 1Q06 $1,000,000.00 2,197,460.27 12,523,886.78 igi6 $1,000,000.00 2,517.249-54 25,082,369.83 CHAPTER XV NEW COMPANIES IN THE TWENTIETH CENTURY The early years of the twentieth century were marked by ever increasing numbers of new organizations in the trust company field. For example, during 1903 there were 373 new com- panies established throughout the country. Of these nearly one hundred were in Pennsyl- vania; more than twenty were in Pittsburgh; New York City had an increase of fifteen, not including six in Brooklyn; the single State of Texas reported eighteen new companies. During the next few years, until 1907, there was continued activity in forming new com- panies. In a chart prepared by Clay Herrick, of Cleveland, being one of his many excellent contributions to the literature of the companies, it has been shown that during that year no less than 150 new companies came into being. 215 2i6 Story of Trust Companies In March, 1904, a distinct departure was announced in the field of trust company litera- ture. In that month appeared the first number of a monthly magazine of which the New York Press remarked under date of March 15th: " Trust Companies is a new monthly publi- cation which enters a hitherto unoccupied territory in the field of journalistic enterprise. There are half a hundred periodicals devoted to news of the banks, but by some accident the news of the trust companies has been neglected. . . . Trust Companies should en- joy great success. In fact, the first number shows that its success has begun." The editor and publisher of this enterprising periodical was Christian A. Luhnow, who had been previously associated with the editorial force of the New York Commercial. His magazine was well received from the first, and continues to-day to be an authority both as to news and the best thought regarding institu- tional practice and progress. Returning now to the individual narratives of companies formed since 1900, a new develop- ment of 1902 is to be recorded. The Equitable Equitable Trust Company 217 Trust Company of New York had been estab- lished in 1 87 1 by a special act of the Legislature, under the name of the Traders' Deposit Company. This was changed in 1895 to the American Deposit & Loan Company. The principal business of the Company from that time until 1902 was that of making loans on Hfe- insurance policies. The Company's affairs were managed largely by interests identified with the Equitable Life Assurance Society, the owner of a controlHng stock interest. In 1902 the name was changed to the Equitable Trust Company of New York, and its field of activity was extended to include all banking and trust functions. The BowHng Green Trust Com- pany was absorbed in 1909 and the Trust Company of America in 191 2, the latter having itself previously taken over the Colonial Trust Company, the North American Trust Company, and the City Trust Company. As a result of the insurance investigations in 1905, and the legislation which soon followed, it became necessary for the Equitable Life Assurance Society to dispose of its stock invest- ments. At that time President Alvin W. 2i8 Story of Trust Companies Krech bought the entire Equitable Life holdings and distributed them to a number of influential interests. By this distribution the Equitable Trust Company of New York was made an entirely independent company — that is to say, not controlled by any single interest, or number of interests, to be identified or classed as particular financial groups. Under President Krech, the Equitable has grown to remarkable proportions. Its capital is $3,000,000; its present surplus and undivided profits are over $10,000,000. The Company's balance sheet of ten years ago footed about $55,000,000, as compared with an aggregate of over $170,000,000 on June 30, 191 6, thus making the Company fifth in size in New York City as well as the United States. The increase of the business of the Trust Department has kept pace with the deposits, and the Company now holds securities for account of others, or under its trusts, aggregating more than $1,250,000,000 of face value. Its Foreign Exchange Department has grown with remark- able rapidity and ranks third in the city for annual turnover during 191 5. Empire Trust Company 219 Prior to 1 912 the offices of the Company were at No. 15 Nassau Street, from which location it was driven by the Equitable Building fire in January of that year. The Company's business was not even halted by this serious conflagra- tion. Through the good offices of its depository banks, the tellers of the Equitable Trust met that day's checks on schedule time and the Company was established and doing business in temporary quarters at No. 115 Broadway before noon. It now occupies its own building at No. 37 Wall Street and the banking floor in the connecting building at No. 43 Exchange Place. Its New York branches are located at No. 618 Fifth Avenue and No. 222 Broadway, the latter having been the home of the former Colonial Trust Company. Branches are also maintained in London and Paris. The Empire State Trust Company, later known as the Empire Trust Company, was established in 1902. The first office of the Company was at No. 88 Wall Street. After 1904 its location was changed to No. 42 Broad- way where it continued until 1915 when the Company occupied a beautiful suite of offices 220 Story of Trust Companies in the new Equitable Building, No. 120 Broad- way. In 1 913 two smaller trust companies were acquired, namely the Windsor and Guardian. The President is LeRoy W. Baldwin under whose management the Company has grown from seven millions of dollars of total resources in 1906 to an aggregate in 1916 of $44,160,94742. The original capital was $500,000, subsequently increased to $1,500,000. The Central Trust Company of Illinois is a splendid illustration of modern banking growth in the great city of Chicago. Formed in 1902 with four millions of dollars of capital and one million of surplus, it reported one year later $200,000 of undivided profits and nearly $6,500,000 of deposits. By 191 6 the capital was $4,500,000, the surplus and undivided profits $1,750,000, and the total of these and other liabilities $56,558,000. The President of the Company from the beginning has been Charles G. Dawes, formerly Comptroller of the Currency at Washington. The offices since 1910 have been at No. 125 West Monroe Street. One j^ear after this date "First Trust and Savings" 221 the Company absorbed the Metropolitan Trust & Savings Bank. This was an institution in the five-milhon-doUar class at the time of its acquirement. An important company was established in Chicago in December, 1903, under the title of the First Trust & Savings Bank, the stock being owned by the stockholders of the First National Bank of Chicago. James B. Forgan acted as President of both institutions until 191 5, when Emile K. Boisot assumed that title, upon Mr. Forgan's election as Chairman of the Board. The First Trust & Savings Bank began business originally at No. 11 1 West Monroe Street, on the first floor of the First National Bank building, and now occupies the entire ground floor of that building. The original capi- tal was $1 ,000,000 which has since been increased to $5,000,000. The present surplus and undi- vided profits amount to $5,400,000. The great growth of the institution, since its first statement appeared in 1904, is to be seen by a comparison of the figures in that year with those of 1906 and 19 16. As of June 30th, in each of the three years the total figures were 222 Story of Trust Companies $11,186,982.73, $30,854,781.21 and $84,730.- 256.98 respectively. This growth has occurred without the absorption of any other institution. The Bankers Trust Company opened its doors for business on March 31, 1903, at No. 143 Liberty Street, New York. Press notices of that date stated: * "Since the news was first given out after the formation of this new financial institu- tion, its plans have developed rapidly, and its success, judging from comments in banking circles, is already beyond dispute." The reporter who wrote those lines was a good prophet; the Company's history has justified the prophecy. Beginning with a capital of $1,000,000, which was twenty times over- subscribed, and a surplus of over $500,000, the Company has had a vigorous and consistent growth, and on June 30, 19 16, thirteen years after its organization, its statement showed capital $10,000,000, surplus and undivided profits $15,498,791.32, and total resources $292,078,527.26. The Company grew out of the idea held by The ''Bankers" 223 a number of prominent bankers who were accustomed to dealing with one another, that there was room for a trust company which could take care of business which came within the knowledge of those bankers in the regular course of business, but which they could not accept at their own institutions because of the limitations of their charters. That the insti- tution would be substantial from the outset was to be seen from the Hst of original direc- tors whose names and corporate connections are here appended: Stephen Baker, President, Bank of the Man- hattan Co., N. Y. ; Samuel G. Bayne, President, Seaboard National Bank, N. Y. ; James G. Cannon, Vice-President, Fourth National Bank, N. Y. ; Edmund C. Converse, President, Liberty National Bank, N. Y.; Henry P. Davison, Vice-President, First National Bank of New York; James H. Eckels, President, Commercial National Bank, Chicago; Granville W. Garth, President, Mechanics' National Bank, N. Y. ; A. Barton Hepburn, Vice-President, Chase National Bank, N. Y. ; William Logan, Cashier, Hanover National Bank, N. Y. ; Edgar L. 224 Story of Trust Companies Marston, Blair & Co., Bankers, N. Y. ; Gates W. McGarrah, President, Leather Manufacturers National Bank, N. Y.; William H. Porter, Vice-President, Chemical National Bank, N. Y.; George W. Perkins, J. P. Morgan & Co., Bankers, N. Y. ; Daniel G. Reid, Vice-President, Liberty National Bank, N. Y. ; Edward F. Swinney, President, First National Bank, Kan- sas City; Francis H. Skelding, Cashier, First National Bank, Pittsburgh; John F. Thompson, Vice-President, Bankers Trust Co.; Albert H. Wiggin, Vice-President, National Park Bank, N. Y. ; Samuel Woolverton, President, Gallatin National Bank, N. Y. ; Robert Winsor, Kidder, Peabody & Co., Boston; and Edward F. C. Young, President, First National Bank, Jersey City, N. J. The rise in total resources between the dates June 30, 1903, and September 7, 1905, was, in the order of progression: June 30, 1903 $ 5,748,174.87 December 31, 1903 10,085,557.31 June 30, 1904 15,304,064.48 December 31, 1904 18,497,504.50 June 7, 1905 24,899,785.18 September 7, 1905 25,436,229.50 a pq i-i CO a> -4-> +-» 0) o c a .a S O ** Commonwealth " of Boston 261 capital stock and $1,638,000 in surplus and undivided profits. Its total resources on Octo- ber 31, 1896, were $1,524,67348. By June 30, 1906, they amounted to $9,535,781.73. The growth of the Company down to June 30, 191 6, is evidenced by a volume of total resources amounting to $28,803,374.87. IMoses Williams was the first President and has been Chairman of the Board since 1913, Allan Forbes having succeeded to the presidency in 1911. The Commonwealth Trust Company began doing business in Boston at its offices, No. 88 Summer Street, in 1904, with a capital of one million dollars. The Colonial National Bank of Boston was absorbed by this institution during the first year of its existence and the growth has been in marked degree at all times, it now having four separate offices doing busi- ness in different parts of the city. The assets have doubled within the past ten years and to-day amount to the sum of $22, 787,949.36. The capital has always been $1 ,000,- 000 and there is a present surplus fund, with additions of undivided profits, of $729,203.12. 262 Story of Trust Companies The Company has absorbed two other institu- tions in recent years, the New England National Bank in 1909, and the Hamilton Trust Com- pany in 1914. David J. Lord was the Com- pany's President until 1909; since then George S. Mumford has served in that capacity. CHAPTER XVIII the trust company section of the american bankers' association Prior to the year 1896 there had been no distinctive organization of trust company offi- cials. Many of the companies had, indeed, been members of the American Bankers' Asso- ciation, some of them almost from its beginning in 1875, ^^d had regularly sent representatives to the annual conventions of that body, the proceedings of which, always interesting to financial minds, bore at times directly on trust company affairs. But as the years went by, each furnishing evidence of the great and ever broadening scope of trust company interests, the desirability of an organization, allied with the Association, but having an individual entity and recognized aims, was increasingly felt. The first step toward the realization of this 263 264 Story of Trust Companies project was taken in 1895 when the Executive Council of the American Bankers' Association was requested so to amend its by-laws as to permit of a Trust Company Section being formed; the application was refused on the ground that no precedent for such a course existed. The next year, however, early in September, a letter was addressed to the trust companies calling attention to the want of adequate organization, and suggesting that representatives be sent to discuss the matter at the convention of the American Bankers* Association to be held in St. Louis on Septem- ber 22d. This letter was sent out through the Mississippi Valley Trust Co., and had to it appended the following names: Boston— Old Colony Trust Co., by T. Jefferson Coolidge, Jr., President. New York — Continental Trust Co. of the City of New York, by Otto T. Bannard, President. United States Mortgage & Trust Co., by G. W. Young, President. Brooklyn — Franklin Trust Co., by Geo. H. Southard, President. Chicago — The Northern Trust Co. Bank, Founders of the "Section" 265 by Arthur Heurtley, Secretary. Security Title & Trust Co., by Peter Dudley, Trust Officer. Title Guarantee & Trust Co., by Frank H. Sellers, Trust Officer. Indianapolis — The Union Trust Co., by John H. Holiday, President. St. Louis — Mississippi Valley Trust Co., by Breckinridge Jones, second Vice-President. St. Louis Trust Co., by John D. Tilley, Secretary. Union Trust Co. of St. Louis, by C. Tompkins, Treasurer. Lincoln Trust Co.,byA.A. B. Woerheide, Secretary. Louisville — Columbia Finance & Trust Co., by Attila Cox, President. Fidelity Trust & Safety Vault Co., by John Stites, Vice- President. Denver — The International Trust Co., by F. B. Gibson, Secretary. In response, seventeen representatives of trust companies were present at the convention which was held at the Planters' Hotel, and on the evening of the first day a meeting was called with Henry M. Dechert presiding and Breck- inridge Jones acting as secretary. As a result of the deliberations and subsequent action of this body the by-laws of the American Bankers' 266 Story of Trust Companies Association, by unanimous vote on September 24, 1896, were amended to include, among others, the following clauses: "A section of the Association to be known as 'Section of Trust Companies' is hereby established which shall meet annually in connection with the meeting of this Associa- tion. "The scope of the section shall embrace matters of interest to trust companies in so far as such matters are distinct from bank- ing. It may report to the Association, and affairs relating to trust companies may be referred to it." Such was the origin of the Trust Company Section which, in its growth and importance, has amply justified the foresight and initiative of its founders. The membership in 1897, when the first annual meeting was held, num- bered 114, which figure had grown to 253 in 1900, and has been constantly increasing until to-day it is well over 1400. The annual meeting places of the Section, with the names of the Chairmen (Presidents, since 1905), are here given: Presidents and Meeting Places 267 1897. Detroit, Henry M. Dechert, Common- wealth Title Insurance & Trust Company, Philadelphia; 1898. Denver, Francis S. Bangs, State Trust Company, New York City; 1899. Cleveland, Breckinridge Jones, Missis- sippi Valley Trust Company, St. Louis; 1900. Richmond, Anton G. Hodenpyl, Michi- gan Trust Company, Grand Rapids; 1 90 1. Milwaukee, Wm. G. Mather, American Trust Company, Cleveland; 1902. New Orleans, John Skelton Williams, Richmond Trust & Safe Deposit Company ; 1903. San Francisco, John E. Borne, Colonial Trust Company, New York City; 1904. New York, Breckinridge Jones; 1905. Washington, D. C, E. A. Potter, Ameri- can Trust & Savings Bank, Chicago; 1906. St. Louis, Clark WilHams, Columbia Trust Company, New York City; 1907. Atlantic City, Festus J. Wade, Mercan- tile Trust Company, St. Louis; 1908. Denver, Philip S. Babcock, Trust Com- pany of America, New York City ; 1909. Chicago, A. A. Jackson, Girard Trust Company, Philadelphia; 268 Story of Trust Companies 1910. Los Angeles, H. P. Mcintosh, Guardian Trust Company, Cleveland; 191 1. New Orleans, Oliver C. Fuller, Wiscon- sin Trust & Security Company, Milwaukee ; 1912. Detroit, Col. F. H. Fries, Wachovia Loan & Trust Company, Winston- Salem, N. C. 1913. Boston, William C. Poillon, Bankers Trust Company, New York City; 1914. Richmond, F. H. Goff, Cleveland Trust Company; 19 1 5. Seattle, Ralph W. Cutler, Hartford Trust Company; 1 91 6. Kansas City, John H. Mason, Commer- cial Trust Company, Philadelphia. In the years 1898, 1900, 1903, and 1904, in the absence of the regular Chairmen, and in 1907 of the President, the meetings were pre- sided over by Breckinridge Jones, William G. Mather, E. A. Potter, Clark Williams, and Philip S. Babcock, respectively. The order of business at the meetings, after the customary preliminaries, has generally been as follows: Address of Welcome; Reply to Address of Welcome; Secretary's Report; The "Standard Oil Trust" 269 Report of the Executive Committee; Report of Committee on Protective Laws; Reports of Special Committees; Addresses; Addresses of Vice-Presidents of the Section from the various States; Election of Officers; Adjournment. In retracing the story of the Trust Company- Section, its present magnitude and its progress duiing twenty years, consideration should be given to the conditions which antedated its inception. There were in the entire country, according to the report of the National Mone- tary Commission in 1894, only 228 institutions that, having regard to the functions they per- formed, could rightly be described as trust companies. But owing to the looseness, or the absence, of laws governing such activities there were many concerns which, for reasons decidedly under suspicion, flaunted the word "trust" in their titles, and found a fruitful soil for their operations in the general misconception of what a true trust company should be. Nor was such ignorance of the matter confined to the masses of the people. Breckinridge Jones, the reputed "father " of the Section, has amusingly recounted his experiences when he attempted to discover 270 Story of Trust Companies and collate the laws of the various States referring to trust companies. He wrote for information to the proper authorities through- out the country and, in the case of several States, learned that there was nothing in the laws bearing on the subject. The state officials in other instances proved by their responses, and the material supplied, that their notion of a trust company might be represented fairly by the definition, "a combination in restraint of trade"; while one Attorney General, on its being pointed out that he had in this manner misunderstood the purport of the query, sought to rectify his mistake by stating that the only trust company of which his department had knowledge was the Standard Oil Trust! Among the trust companies themselves there had been, in general, scarcely any attempt at cooperation, and little uniformity of ideals and practice. The promoters of the Section, aware of the need of thorough and constructive propa- ganda, proceeded to "lay the foundation for a recognized literature, standardize the business, and promote acquaintance and social inter- course among trust company men." There Addresses before the Section 271 had been, previously, almost no literature on the trust company; in fact it has been stated that all the printed information on the subject, scattered and inaccessible as it was, might be contained in the space of fifty pages. With the publication of the Proceedings of the Trust Company Section for the inaugural year 1897, a beginning was made on what has become an extensive and valuable accumulation of special knowledge. As meeting after meeting took place addresses were delivered, and in due course published, on the different phases of trust company work. Prominent trust com- pany officials stood forth ready to impart, for the benefit of the cause, the information and opinions which they had gained by interested study and long experience. In these endeavors they were ably seconded by the bankers them- selves, who, once the scope of the Section was defined, saw in its activities only the promise of a friendly rivalry, mutually beneficial, be- tween their institutions and the trust companies. Moreover, in addition to those whose efforts, however praiseworthy, might be ascribed to naturally interested motives, there were found 272 Story of Trust Companies prominent men in other walks of life, Federal and State officers, lawyers, public accountants, and statisticians, who, seeing in the work of the Section the hope of a broader and more orderly system of national finance, willingly helped to further the movement by preparing and de- livering appropriate addresses before the meet- ings. A few of these may be mentioned as indicating the range of subjects presented: 1903, address on "The Problem of Wealth and the Trust Company as Trustee," by Hon. Lyman J. Gage, ex-Secretary of the Treasury; 1906, "Defalcations: what Can be Done to Decrease them," by Hon. Pierre Jay, then Bank Commissioner of Massachusetts, now Federal Reserve Agent in New York City; 1907, "Confusion of Meaning of Trust Com- panies," by Hon. Charles Emory Smith, former Postmaster General and United States Ambas- sador; 1912, "Some Unscheduled Liabilities of Trust Companies," by Dean Henry M. Bates, University of Michigan; 1913, "The Relation of the Government to the Trust Company," by Hon. Samuel W. McCall, Governor of Massa- chusetts; 1914, "Future of State Institutions Social Side 273 under the Federal Reserve," by H. Parker Willis, Secretary, Federal Reserve Board. Those responsible for the progress of the Section have not, however, depended alone on the educational influence of the meetings, in- spiring and far reaching though it has been. From time to time there has been published and circulated carefully compiled matter of practical value to trust company officers, such as the Digest of Trust Company Laws in the States and Territories, and Forms for Trust Companies. Many folders and booklets, con- taining brief articles on trust company services, have also been prepared and distributed in large quantities for general information. In assemblages of business men, however engrossing the occasion that has brought them together, the social and recreative instincts are usually, as a matter of course, taken into account. In this respect the Trust Company Section, so far as the annual meetings are con- cerned, is relieved of initiative through its affiliation with the American Bankers' Associa- tion, whose plans for social enjoyment are heartily availed of, and include banquets, 18 274 Story of Trust Companies receptions, balls, trips to interesting points, etc. Among the memorable events of this nature may be recalled the Grand Ball given at the Auditorium in Chicago in 1909, when President Taft and General Frederick D. Grant were present. Previously, in 1904, when the convention was held in New York, the local members of the Section provided special enter- tainment for their associates in the form of a luncheon, followed by a trip through the newly completed subway. Reference will later on be made to the ban- quet given in 191 1, on the eve of the admission of trust companies to full membership in the New York Clearing House. The occasion proved so interesting and instructive that there was a general demand for its repetition in the year following, and the next, and so on until it has become an established event among trust company men throughout the country. The arrangements are under the direction of the Trust Com.pany Section, which, however, makes no appropriation of funds towards the ex- penses, these being met by the subscriptions of the guests. From the first the scene of the Secretarial Duties 275 banquets has been the famous Waldorf-Astoria Hotel. The Section has its office in New York with the American Bankers' Association, which occu- pies the twelfth floor of the Hanover Bank Building, with entrances at No. 11 Pine and No. 5 Nassau streets. In these spacious and refined quarters is to be found equipment in keeping with the importance and country-wide influence of the Association. The library is remarkably rich in its stores of financial and commercial Hterature. For some years the Secretary of the American Bankers' Association acted in like capacity for the Trust Company Section, until 1908, when Philip S. Babcock was elected Secretary. He had formerly been Vice-President of the Trust Company of America, and by his experience, courtesy, and tact has contributed much toward the continuous growth of the Section. Upon his resignation, in September, 191 6, Leroy A. Mershon, formerly PubHcity Manager of the United States Mortgage & Trust Co., became Secretary. CHAPTER XIX PERSONNEL What has been narrated in the preceding chapters has of necessity been a recounting of events and developments almost entirely de- void of credit for the achievements of individ- uals. Had space permitted, the stories of the separate companies would have had woven in with them a record of the names and something of the individual deeds of the host of men in public, professional, and business life through whose efforts each of these corporate successes have been accomplished. It seems fitting, therefore, to include a roster of trust company notables, other than the names of the presiding officers heretofore mentioned. With an occasional repetition of some few of the latter, and of the names of some of the very early founders, such a list is here presented. It 276 Men in Public Life 2^^ is not offered as a complete collection of names, but will serve to illustrate how splendidly the trust companies have been manned and built up and safeguarded through all the years. The subjoined names are those of some persons who either as incorporators or directors of institu- tions, years ago or in our own times, have lent their time, their means, and their reputations to the upbuilding of one or more companies. First we have the Citizens Savings & Trust Company of Cleveland, presenting the distin- guished name of President James A. Garfield. Of Vice-Presidents there have been several trust company men, namely, Levi P. Morton, Adlai E. Stevenson, and James S. Sherman. Among members of Cabinets are found : WilHam M. Evarts, Richard Olney, John Hay, EHhu Root, Robert Bacon, Philander C. Knox, Daniel Manning, Charles S. Fairchild, John G. Car- lisle, Lyman J. Gage, LesHe M. Shaw, William G. McAdoo, Robert T. Lincoln, Stephen B. Elkins, Daniel S. Lamont, Russell A. Alger, Judson Harmon, John W. Griggs, William F. Vilas, John Wanamaker, George von L. Meyer, William C. Whitney, Benjamin F. Tracy, 278 Story of Trust Companies John D. Long, Paul Morton, Truman H. New- berry, David R. Francis, and Cornelius N. Bliss. The country's diplomatic service has been represented by a number of notables who at home have served on the boards of trust com- panies. Among these may be mentioned White- law Rcid, William Walter Phelps, Joseph H. Choate, Myron T. Herrick, and Henry Morgen- thau. Many United States Senators' names have appeared on trust company directorates. A few names by way of example of this are: Marcus A. Hanna, Nelson W. Aldrich, William A. Clark, John Kean, Clarence W. Watson, and William Murray Crane. Comptrollers of the Currency have frequently served on trust company boards. Some of the names of these in recent years have been William L. Tren- holm, James H. Eckels, Charles G. Dawes, Law- rence 0. Murray, and John Skelton Williams. Occasionally military celebrities have lent their names to trust undertakings. As witness of this we find on the list : Generals Franz Sigel, James S. Wadsworth, Stewart L. Woodford, and Wager Swayne. An extended schedule might be made of Merchant Directors 279 trust company connections on the part of governors of various States. As a single illus- tration of this, six of the chief executives of the Empire State are found to have had trust com- pany affiliations: Edwin D. Morgan, Samuel J. Tilden, Roswell P. Flower, Horace White, John A. DLx, and Martin H. Glynn. The same is true of mayors, and the list for New York City is made up of the names of Edward Cooper, William R. Grace, Abram S. Hewitt, Hugh J. Grant, William L. Strong, and WilHam J. Gaynor. Among the names of the older mer- chants of New York, and some of the other large cities, such well-known persons are found to have had a place in various of the directorates as: John Jacob Astor, Peter Cooper, Moses Taylor, William E. Dodge, Marshall 0. Roberts, Eugene Kelly, Samuel D. Babcock, Charles L. Tiffany, Robert Hoe, Charles Scribner, William Steinway, WilHam H. Appleton, Wil- liam H. Aspinwall, Jordan L. Mott, Abiel A. Low, William Turnbull, Eugene G. Blackford, Charles A. Schieren, William H. Macy, Morris K. Jesup, John S. Kennedy, Erastus Corning, and Marshall Field. 28o Story of Trust Companies A casual search of lists of directors who have been prominent in the industrial affairs of later days reveals a number of names of well-known men. Standard Oil interests have been represented by William Rockefeller, Henry H. Rogers, Henry M. Flagler, Charles M. Pratt, Edward T. Bedford, and Orville T. Waring. Steel and allied interests comprise names like Henry C. Frick, Henry Phipps, Charles M. Schwab, Elbert H. Gary, Daniel G. Reid, Charles A. Deere, Hugh McMillan, John Ste- venson, Jr., Cyru§ H. McCormick, F. N. Hoff- stott, and Cleveland H. Dodge. Among manufacturers of recent and current times are to be mentioned, Henry 0. Have- meyer, Theodore A. Havemeyer, Glaus Spreck- els, John Arbuckle, Frederick G. Bourne, William Barbour, Marcellus Hartley, Eberhard Faber, Charles C. Coffin, George Crocker, George Westinghouse, Jr., Harrison E. Gawtry, George Eastman, James B. Duke, Samuel P. Colt, Charles H. Nettleton, Seth E. Thomas, Daniel M. Ferry, William Wrigley, Jr., Fred- erick E. Weyerhauser, Emerson McMillin, Transportation Heads 281 Charles W. McCutchen, William Ziegler, John D. Larkin, Adolphus Busch, John F. Betz, William Disston, Albert A. Pope, Sidney W. Winslow, Edward Mallinckrodt, Joy Morton, and T. Coleman DuPont. In mercantile lines during recent years some names are : Alexander E. Orr, Francis H. Leggett, Thomas F. Victor, William D. Sloane, William A. Jamison, Carl Schefer, Augustus D. JuilHard, Isidor Straus, Jesse I. Straus, Louis Stern, John J. Riker, Isaac H. Clothier, David Dows, Jr., Frank Tilford, Stephen Farrelly, Robert Olyphant, Frank W. Wool worth, Thomas B. Wanamaker, Edwin J. Berwind, Patrick Cud- ahy, J. Ogden Armour, Patrick A. Valentine, Levi Z. Leiter, Alexander H. Revell, A. Mont- gomery Ward, and E. C. Simmons. A search of trust company lists shows many notables in the field of transportation business. Some of these are, or have been : Cornelius Van- derbilt (the Commodore), William H. Vander- bilt, Daniel Drew, Robert Garrett, Austin Corbin, George M. Pullman, Samuel Sloan, John Taylor Johnston, Chauncey M. Depew, James J. Hill, Loms K. Hill, Stuyvesant Fish, 282 Story of Trust Companies Collis P. Huntington, Edward H. Harriman, George J. Gould, Edwin Hawley, Robert Mather, George F. Baer, Alexander J. Cassatt, James McCrea, Samuel Rea, N. Parker Short- ridge, Sir William C. Van Home, Eben B. Thomas, Samuel Spencer, Leonor F. Loree, Arthur E. Stilwell, Sir Thomas G. Shaughnessy, Lucius Tuttle, Marvin Hughitt, Julius Krutt- schnitt, William H. Baldwin, Jr., Charles S. Mellen, Howard Elliott, Anthony N. Brady, Theodore P. Shonts, Russell Robb, William B. Leeds, Frank Trumbull, Edward P. Ripley, Ben- jamin F. Yoakum, William G. Besler, Henry Tatnall, Frank J. Gould, and Samuel Thomas. Cable, telegraph, and telephone business contributes a group of names, such as Cyrus W. Field, Henry L. Hotchkiss, Thomas T. Eckert, Robert C. Clowry, Clarence H. Mackay, Theodore N. Vail, and Union N. Bethell. Among life, fire, and marine insurance com- pany heads mention is to be made of Richard A. McCurdy, Charles A. Peabody, Henry B. Hyde, James H. Hyde, John A. McCall, George E. Ide, Elbridge G. Snow, John F. Dryden, Henry Evans, and Anton A. Raven. Professional Men 283 The bench and bar have contributed these among other names: Charies P. Daly, Elbridge T. Gerry, Lispenard Stewart, Hugh J. Jewett, Charles Francis Adams, 2d, Charlton T. Lewis, Lewis Cass Ledyard, William Bayard Cutting, John W. SterHng, Frederic R. Coudert, Julien T. Davies, Joseph S. Auerbach, Paul D. Cravath, Henry W. De Forest, DeLancey NicoU, Joseph Larocque, B. Aymar Sands, Frank R. Lawrence, George B. Case, and Frederick Geller. Journalism has been represented by names Hke Salem H. Wales, Oswald G. Villard, Frank A. Munsey, George Harvey, and William J. Arkell; mining business contributes names like Daniel Guggenheim, Isaac Guggenheim, and Adolph Lewisohn; among hotel managers well- known names in the trust company field have been George C. Boldt and James H. Breslin; even medicine and literature are dignified by the name of Dr. S. Weir Mitchell; and the eminent educator, Harry A. Garfield, has in the past been an interested participant in trust company operations. But beyond all these, the logical and essential class of men of whom might be expected ability 284 Story of Trust Companies and discretion as honorary officers or directors has always been the country's private and cor- porate bankers. Of the class first named, coming from early days down to the present, mention is to be made of Russell Sage, Thomas Tileston, Shepherd Knapp, George vS. Bow- doin, A. Gracie King, Edmund D. Randolph, Joseph W. Drexel, J. Picrpont Morgan, Sr., Charles Steele, Edward T. Stotesbury, George W. Perkins, Henry P. Davison, William H. Porter, August Belmont, Jacob H. Schiff, Mor- timer L. Schiff, Otto H. Kahn, Paul M. War- burg, Alexander Brown, John Crosby Brown, Charles D. Dickey, Thomas Maitland, George Coppell, James Speyer, Adrian Iselin, Jr., Isaac N. Seligman, Luther Kountze, Charles Lanier, Ernst Thalmann, Henry L. Higginson, Gardiner M. Lane, E. Rollins Morse, George C. Clark, Jr., Robert H. McCurdy, Arthur Tumbull, Oscar L. Gubelman, William L. Bull, James Talcott, Elverton R. Chapman, Evans R. Dick, Henry S. Redmond, Henry Rogers Winthrop, Grant B. Schley, Allen B. Forbes, Henry R. Ickelheimer, and James Imbrie. To these should be added a list of private Banker Directors 285 capitalists such as: John S. Kennedy, William Waldorf Astor, Vincent Astor, Darius O. Mills, Ogden Mills, W. Emlen Roosevelt, Thomas F. Ryan, George G. Haven, Robert W. Goelet, Cornelius Vanderbilt (the younger), Alfred G. Vanderbilt, Harry Payne Whitney, Edwin Gould, August Heckscher, Charies R. Flint, John D. Crimmins, H. Clay Pierce, Peter A. B. Widener, Clement A. Griscom, Thomas Dolan, Morton F. Plant, and Norman B. Ream. To enumerate the presidents and other offi- cials of national, state, and savings banks who have taken part in trust company activities would be a task of no small magnitude. It will be fitting, however, to show a few repre- sentative names, most of which will be readily recognized as being those of leaders in the realm of corporate banking. Without repeating the names of the original directors of the Bankers Trust Company, all of which were set forth in an earlier chapter of this volume, a partial list of New York bank presidents who have served on trust company directorates shows the names of James Stillman, Frank A. Vanderlip, Valentine P. Snyder, James S. Alexander, 286 Story of Trust Companies William A. Nash, Walter E. Frew, George F. Baker, Francis L. Hine, Thomas W. Lamont, Henry W. Cannon, Dumont Clarke, Lewis L. Clarke, Richard Delafield, George G. Williams, Joseph B. Martindale, J. Edward Simmons, James T. Woodward, Robert M. Galloway, Phineas C. Lounsbury, Rollin P. Grant, Joseph C. Hendrix, Edward Townsend, John Harsen Rhoades, and Lewis E. Pierson. A similar, though correspondingly incomplete, list for Philadelphia reveals the names of James R. McAllister, Philip Doerr, Samuel S. Sharp, Harry B. Michener, C. Stuart Patterson, Levi S. Rue, William T. Elliott, Lewis R. Dick, James F. Sullivan, J. S. McCulloch, Edward A. Schmidt, and G. Colesberry Purves. In Chicago we find: James B. Forgan, David R. Forgan, George M. Reynolds, John C. Black, Helge A. Haugan, S. R. Flynn, William H. Brintnall, Edwin L. Wagner, Ernest A. Hamill, Leroy A. Goddard, and William A. Tilden. In Boston these names, among others, ap- pear: Robert F. Herrick, Andrew W. Preston, George W. Moses, Wilmot R. Evans, C. Minot Weld, Henry C. Jackson, Charles O. L. Dillo- The Modern Tendency 287 way, William A. Gaston, and Eugene V. R. Thayer. All over the United States the tendency in recent years has been for bank presidents to affiliate themselves with the boards of directors of the trust companies. The list of names which points this fact would be incomplete with- out speaking of some representative bank executives in cities other than those already mentioned. A few of these follow: Michael F. Docley, of Providence; Robert C. Pmyn, of Albany; Robert L. Fryer, of Buffalo; George T. Smith, of Jersey City; Wilham Scheerer, of Newark; Douglas H. Thomas, of Baltimore; Oliver J, Sands, of Richmond ; Robert J. Lowry, of Atlanta; T. H. Given, of Pittsburgh; Emory W. Clark, of Detroit; Fred Vogel, Jr., of Alil- waukee; F. M. Prince, of IMinneapolis, Edwards Whitaker, of St. Louis; H. J. Alexander, of Denver; M. F. Backus, of Seattle; D. W. Twohy, of Spokane; Wilham M. Ladd, of Portland, Ore- gon; Frank B. Anderson, of San Francisco; and J. M. EUiott, of Los Angeles. CHAPTER XX .. SUSPENSIONS AND FAILURES. CLEARING HOUSE ARRANGEMENTS. RECENT GROWTH Our story is to conclude with some account of the numbers and aggregate size of the com- panies everywhere during recent years. Before presenting these facts, however, and telHng of the modem growth and general success of the companies as a class of institutions, some- thing ought properly to be related by way of showing the other side of the picture. In 1908, a compilation was made by "Brad- street's" of bank and trust company suspen- sions during the sixteen years from 1893 to 1908, inclusive. This showed that the sus- pensions of 1893 numbered 598, as compared with only eighty-nine in the panic year of 1907 (mostly from October on), and 132 in the course of the year 1908. 288 Failures 289 Listed by the different classes of institutions the items and totals for the sixteen years were: National banks 359 State banks 559 Savings banks 167 Private bankers 686 Loan and trust companies 84 A total of 1855 On the face of this statement, it would ap- pear that the trust companies had been singu- larly free from insolvency troubles. But it should be remembered that they numbered considerably fewer than the banks and that whereas the savings banks which had suspended represented 93/iooths per cent, of all the insti- tutions of that class throughout the country, the element of trust company suspensions re- presented 70/iooths per cent, of the entire number, while the percentages of the state banks and national banks were only 6i/iooths per cent, and 49/iooths per cent, respectively. Early in 191 1 a particularly disastrous failure occurred in New York City. This was when the Carnegie Trust Company at No. 115 Broadway was closed by order of the State 19 290 Story of Trust Companies Superintendent of Banks. This concern had been permitted in 1907 to bear the honored name of the iron master of Pittsburgh, but Mr. Carnegie had never been upon the directorate and, when troubles overtook the Company, was interested only to the extent of considering plans whereby those difficulties might be averted. Appeals were made to him and to others at the close of 1910, but internal condi- tions were too insecure and the institution, reported in the summer of that year as having over eleven and one half millions of dollars of resources, went to the wall and was never rehabilitated. Another suspension in New York, back in 1904, was that of the Trust Company of the Republic, which became involved in difficulties connected with the unfortunate affairs of the " Shipbuilding Company." A serious failure also occurred in 19 14 when the La Salle Street Trust & Savings Bank of Chicago was forced to suspend, carrying down with it a large num- ber of affiliated banks. The so-called Lorimer- Munday difficulties which began in the early spring of that year have made a series of tangles The Reserve Question 291 which have continued to engage the attention of the courts even down to the time of this writing. Previous failures had taken place in 1903 when the Federal Trust Company of Cleveland, a concern then two years old, got into difficulties; while in the same year the Union Trust Com- pany of Boston was forced to suspend. Gen- erally speaking, however, the record of solvency among these institutions has been as satis- factory as might be expected in a field in which such tremendous strides have been made within a short period of time. The greatest trust company problem of the past decade has certainly been the question of maintenance by them of proper cash reserves against deposits. Naturally this loomed large in the affairs of New York City financial ar- rangements. Until June i, 1903, trust com- panies taking advantage of the privileges of the New York Clearing House had not been re- quired to carry such reserves against deposits. The matter was first made a sharp issue in April, 1902, by the action of the Clearing House Association in adopting a regulation to the effect that trust companies affiHated with it 292 Story of Trust Companies should be called upon to maintain "such cash reserves on deposits as the Clearing House Committee may determine." Much discussion in financial circles followed, from which it appeared that there was consider- able difference of opinion among the institutions concerned, some of them, such as the Title Guarantee & Trust Company, and the Van Norden Trust Company, declaring that the proposed regulation was just and necessary, and announcing that they had provided, of their own accord, for reserves approximating or equaling the fifteen per cent, reserve required of state banks. A few of the largest trust companies, on the other hand, asserted that the action of the Clearing House Association was unnecessary and officious, inasmuch as all conservative and successful companies did voluntarily provide their own reserves. The majority of the smaller companies appeared willing to abide by the eventual ruling of the Association; but on one point practically all the trust companies were agreed, namely, that there should be a distinction made between active and inactive accounts, that is, between Withdrawal from Clearing House 293 accounts subject to check at sight and those designated trust funds or time deposits. It would be unwise and absurd, they argued, to withdraw from circulation so great an amount of money as would be represented by even a moderate reserve on funds which, of their nature, were virtually permanent or of long and fixed duration. It was contended further that the banks holding trust company deposits would be the real sufferers because of the withdrawals necessary to meet the requirements of reserves. The eagerly anticipated ruling of the Clearing House Association was announced on February II, 1903, and definitely required the establish- ment and maintenance by trust companies of a 5 per cent, cash reserve by June i, 1903, of 7>^ per cent, by February i, 1904, and of 10 per cent, after June i, 1904. It became ap- parent at once that several of the most promi- nent trust companies would withdraw from the Clearing House, and for a time there seemed a likelihood that an independent clearing organization would be formed for the transac- tion of trust company business. This project, however, was finally abandoned as impractica- 294 Story of Trust Companies ble, and upon the new reserve rule going into effect on June i , 1903, it was found that seventeen trust companies continued to be represented at the Clearing House, and that these held in their vaults as a 5 per cent, cash reserve, $5,266,450, or about one fourth the amount which would have been required as reserves had the ten seced- ing trust companies also submitted to the rule. On February i , 1904, the date on which the ']% per cent, reserve requirement became effective, two or three additional companies retired rather than carry such a "burdensome reserve," and on June I, 1904, when the full 10 per cent, cash re- serve was required, so many further secessions had occurred that there remained only two trust companies of the twenty-seven that had been originally affiliated with the Clearing House. For about two years the trust companies were allowed to shape their own course, but on April 2'j , 1906, the first trust company reserve law ever enacted in New York went into effect. It required New York City companies to carry 5 per cent, of deposits in cash, 5 per cent, in bank, and 5 per cent, in bonds, and appeared to work satisfactorily until the panic of 1907, when The Huf^hcs Committee 295 *& "over the counter" clearings, and want of a clearing organization, resulted in serious compli- cations. Early in 1908 the Legislature enacted the present reserve law which requires trust com- panies in Manhattan to carry, at all times, a cash reserve of 15 per cent, of all demand deposits. Back in 1907 a special committee of bankers had been appointed by Governor Hughes. In a report submitted by them in December of that year, it was stated that their deliberations had been to the end of determining "what, if any, changes are advisable in the law of the State relating to the incorporation, conduct, and super- vision of banks and trust companies." The personnel of the committee was partly repre- sentative of banks and partly of trust compa- nies. Its members were A. Barton Hepburn, Edwin S. Marston, Edward W. Sheldon, Alger- non S. Frissell, Stephen Baker, and Andrew Mills. Their findings were not at all harmoni- ous on the subject of what reserves ought to be maintained by the trust companies, and not until 191 1 were there signs of mutual overtures between these institutions and the management of the New York Clearing House. 296 Story of Trust Companies On May 6th occurred the first annual dinner given by the trust companies. This took place at the Waldorf-Astoria, and it was evident, from the interchange of opinions between the six hundred bankers who attended, that a satis- factory settlement might be looked for. Three days later the Clearing House Committee acted, and, by almost unanimous vote, agreed to accept for full membership any trust company capital- ized at $1,000,000 or more, on condition that it carry the 15 per cent, reserve required by law and, further, that it maintain 10 per cent, of its deposits with a member bank. Of a total of forty-three trust companies, twenty-nine were eligible under the capitalization require- ment and, of these, eighteen were duly admitted to full membership, thus happily ending a controversy and estrangement which for nine years had been marked at times by extreme bitterness on both sides. On June 30, 191 6, the total deposits of the bank and trust company members of the New York Clearing House amounted to nearly three and one half billions of dollars. The portion of this representing holdings of trust Recent Progress 297 company members was approximately one and one half billions of dollars, and it is not too much to claim that the full fellowship estab- lished five years earlier is now upon a footing of permanency and mutual advantage which will forever do away with the jealousies of years gone by. Everywhere during recent years there has been concentration in the numbers of com- panies through mergers and absorptions equal almost to the increase in new organizations. For example, from 1903 to 19 16 the number of companies in Greater New York has shown a net decrease from forty-seven to twenty-nine. Except for the two important suspensions pre- viously commented upon, and a few minor insolvencies, all of this contraction has been due to mergers, the greater number of which have been alluded to in the separate sketches of the New York companies. As to the numbers and size of all American companies, statistics since 1875, when Comp- troller Knox reported 35 concerns as compiled by him, exclusive of eight Chicago companies, had never been really complete until the advent 298 Story of Trust Companies in 1903 of the United States Mortgage & Trust Company's annual book, Trust Companies oj the United States. Previously, in 1889, the Comptroller's report mentioned 120 companies; in 1895 the American Bank Reporter showed that there were 569 with total resources of 962 milHons of dollars. On an earlier page of the present volume it has been shown that the Ba?ikers Encyclopedia contained only 509 trust companies for the year 1896. Summaries shown in the United States Mortgage & Trust Company's book from 1903 to 1915, inclusive, reveal the following remarkable totals : Year ended Number Total Resources in June 30th Millions of Dollars 1903 912 2910 1904 994 3138 1905 1115 3802 1906 1304 3944 1907 1480 4221 1908 1470 3917 1909 1504 4610 1910 1527 4610 1911 1616 5168 1912 1579 5490 1913 1732 5475 1914 1812 5924 1915 1777 6328 'i^^^'^^mm"^ A Modern Building. Home of America's largest trust institution, the Guaranty Trust Company of New York. Southeast corner of Broadway and Liberty Street. A 1 91 6 Ag-gregate 299 An interesting article written by Clay Her- rickin the Bankers Magazine in 191 1 shows that on June 30th of that year there were 39 com- panies each reporting over $25,000,000 of re- sources and that there were no less than 165 companies each of which had over $5,000,000 of the same. The growth of five years past has, however, ecHpsed over and again all pre- vious records. In the tabulation, which now follows, it is shown that as of June 30, 191 6, there were 52 companies having over $25,000,000 of resources each, and that these with the 18 other largest companies had, in the summer of 1916, a grand total of $4,309,756,442.80 of resources. Here we will leave these and the host of other fiduciary concerns bearing the honored name of trust company. It would be idle to predict the possibiUties of continued growth. . Whatever this may show, it is not too much to claim on behalf of the trust companies of 191 6 that generations to come, looking back, will say of some, if not all, of these modem money powers that, indeed, "there were giants in the earth in those days." 300 Story of Trust Companies X I— I fin PL, < Q o On a) j3 +-> 0^ g 50 O O a, c o o G , ^ o I . o (h^ O rf ^ •-1 m N m 00 o in M ro Oi 1> •* ^ O m *» M O f1 ^ o ^ t- Ov W O •^ Tl- O -1 cT m 1 fn \0 rt-O 00 O »Ort vo r>. cj a^ rpvO rj 0 1/) lood 3 r^>o CO 'i- O CI -I •-) oq^t-; ro ^ Tt'O O cT pT ci" >o N w \0 On rO 'O -h Tj-VO >0 lOaD O CN in rOOO 0-+ VO vO t^vT) Tt CS <0 M N 1-1 Tf ^ c c a! rt +-> -)J •+J -tJ a a ?S a c3 ,••-» f*^ rt S S S vw 00 O; o t^ 000 00 Jt^ o o» 6 00 o oo" in invo VO in vd fo Tl-VO On Tj »? O rO !>• rooo VO O JC>. cOl^ K. 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Trust • o o (/3 St Co. y Trus c3 ntile Trust jOuri-Linco ►Sc^^.^ca c5>.-^1^>> 3 2:^ New York Life The Guardian Harris Trust & Astor Trust Co Union Trust C( Lawyers Title ^ Fidelity Trust Essex Count New Bruns\^ Newton Tru Union Coun: H a, eoples T sippi Va in ^ 13 0) (/I Appendix A 305 000 t^t* t^i^i> 00 ro vO-O 1 ■o 00 Tf "^ '^ *i ,j. 00 111 ci 00 ■^ fo 6\ po o> O, -^S^ \ vO ro r^oo *0 Tl- M \0 TT M 1 cT t^ fo 0\ N «^ 10 10 00 t> '^ fO 00 TT 1 1> 10 lO Tf-* 1 S (N N N .CO rf) rfi IH 00 00 ^ !^ iP 00 Tj-ts. q f? T K* 00 M q vo vd VO M ti N. MOO !>. pj fJ w HI pj 00 in 10 N t^- NO VO fOlO 1 0000^ r>. i>. "^ ■^ "^ 10 M \0 M ff 1-^ 10 cT i-T (^ o» fO o> fO r^vo •<*■ Tj- M T^ 00 PO »-i r» '^ in-o^ iooo_ f^ rj^ t>. N M M^ fS 0. f^oo" dl ^ 10 -* n" oo" . ro 8 S 4-rO vd >o ffi Cl 00 t^ •^ "t 00^ (N^ XO <0 fO >o fO « " (N invo_ ^« «^ 55 a +5 a -w -4-> *i >> Cj c8 •-< j3 <5 J3 ^ c 5> isco f Man 2S f Broo lia 05 «4-l a >. 3 ►-I VJ 9 >» a> "^l rH cj ^ -J-1 *^ l>-J an Fram oston oston orough ( OS Ange orough ' hiladelp and Br 2rsey Ci 1 i'l s -1 tXO 2 cfi cq cq cq J ra c^ CQ >— ) 1-1 p^ >, CO a 5? M (S 00 1 St & Savin n Americ 0. Francisc vings Ba Trust C 8 <3 ■a. 5 of San ust Co. St Co. Co. st&Sa Bank & •ust Co. St Co. « St Co. rust Co. an Trui Germa ank) Trust C c3 dH2t^2c h2 2H meric k erly ngs B tle& ^•oHSHc^ >,H 3 i4 H >, on Trust V Englan te Street adway T: Angeles letropoli gs Count nmercial mercial rsey Cit H German A Ban (Form Savi Fidelity Tr a .3 g Mu 2 fa 3o6 Story of Trust Companies t^ I^ Vil^O w ^ in N M fo v:i t^ O 0\ Tj- ro vo 00 ■«i- lo q M H 0\ 00 »0 M M On M lO M 6\o6 t^ Kh O M VO (S ■* ro VO O ro O ro M Ov lO IH 0^ ro O^ lO On q^ lO O 0\ o fnoo r^ \o o I> ■^ ro hT "^ CO 11 OnO CO t^ Tt lOOO ro ro m vo 00 00 t^ t! ^ f>J^ 1-^00^ >o S •* IT) ro pj Tj-vO vO vo ■>!■ q 00 vq m t;. qoo vq tC lo M vd t>. \d 00 dv 6i M fs o in \o o» t^ Tf M o o M HI ■<*• ro ^ t q\ lo q\ q^ t^ NOO o t^ \o" oo'vd~>o lo o ^ 2. t^ ■* o 00 r< O M <3 On "^ t "1. O; 1 i> ■^ 1^ "^ o ^ M lO o 00 pT 'f lO lO fO o> M « •-' H HI M HI H M IH ►-( <« o" ■^ O >0 00 Oi jc^q i~- 3 dsco cc XO lO -1- S O t-; MO loco cP VO ON ro West West i-T ^ T3 T3 (J a c " t..O rt C3 nJ ^ -) oston ochester] ew Orlean ansas Cit; oston incinnati lis 1 mc>i ^Mcqo ffi .^ ^^ K cum fq +-> *-■ -t--> - <*-« t Co. 3t & Safe Deposi & Trust Co. 3tCo. ealth Trust Co. ings Bank & Trus rsey •ust Co. & Trus Co. rust Co. sit Co. : & Trust ( jposit & T st & Depo of New fayette ; Depos Co. ^ merican Trus ochester Tru; Co. jbemia Bank ommerce Tru; he Commonw he Union Sav O H-l crt 05 The Land Title Boston Safe D( Mercantile Tru Balto. Co. he Trust C Bergen & Peoples Si Co. [udson Tru <« reuHH H n Appendix A 307 M in M fO N M M Tj- PO t^ 00 Xi .... . ►-I 100 M t^ N (S 0, Tf lo (N in Tt Kl i>moo ■* M Tj- .« t^vO M cj 00 VO CO t^ t>. fO in 00 N Tj-oo 00 fO m CO mo 00 \o Tj- (N o> »o oq_oa 0|in ■"J ^ olo M tC M o» M N H VO N «© ro ^ rf m fn o> q 8 in 6 a M S $6,068,8 1,000,0 ^ o> N A 5^ s ^i ew Orlea y^racuse ittsburgh ochester hicago Approxi] ►-1 Z rha, .q OHHCZJU 1 APPENDIX B BIBLIOGRAPHY BOOKS AND MANUALS Trust Companies of the United States [Statements, Officers, Directors, etc., 1903 to 1916]. United States Mortgage & Trust Company, New- York. The Modern Trust Company. New York, 1906. F. B. KiRKBRiDE and J. E. Sterrett. The Trust Company Idea and its Development. Toronto, 1904. Ernest Heaton. Trust Companies in the United States. Baltimore, 1902. George Cator. Trust Companies, their Organization, Growth, and Management. New York, 1909. Clay Herrick. History of Banking in the United States. New York, 1896. William GRiVHAM Sumner. Statutory Revision of Laws of New York Affecting Banks, Banking and Trust Companies, Enacted in i8g2 and Amended i8pj and igoo. Andrew Hamilton. Digest of Trust Company Laws relating to Trust 308 Appendix B 309 Companies of the United States. New York, 1905. Benjamin J. Downer. Taxation of Trust Companies. Madison, Wis., 1906. Margaret Anna Schaffner. The Investment of Trust Funds. San Francisco, 1909. Frank C. AIortimer. Legal Investments for Trust Funds. New York, 1914. Frank C. McKinney. Forms for Trust Companies, Selected and A rranged by a Committee of the Trust Company Section. New York, 1910. The Rise and Business of the Modern Trust Company. Philadelphia, 1905. William P. Gest. The Trust Company Day by Day. Philadelphia, 1911. A. A. Jackson. The Problem of Wealth and the Trust Company as Trustee. San Francisco, 1903. Lyman J, Gage. The Management of Trust Property. Boston, 1914. The New England Trust Company. Concerning Wills. St. Louis. Mercantile Trust Company of St. Louis. Statement of the Growth and Present Status of Trust Companies in the United States. New York, 1905. Edward T. Ferine. American Trust Companies, their Growth and Present Wealth. New York, 1909. Edward T. Ferine. periodicals Trust Companies, Monthly Magazine, New York, 1904 to 1916. 310 Story of Trust Companies Bankers Magazine, New York, 1846 to 1916. New York Evening "Post'' — Saturday Financial Supplements. 1903 to 1916. Banking Law Journal, New York. Commercial ayid Financial Chronicle, New York. United States Investor, New York. The Financier, New York. Review of Reviews, New York. The Nation, New York. Rand-McNally Bankers' Monthly. Service, St. Louis, Mississippi Valley Trust Co. Guaranty News, Guaranty Trust Co., New York. REPORTS AND BULLETINS American Bankers Association, Trust Company Section, Proceedings of Anfiual Meetings. 1895 to 1916. American Bankers Association, Library Collection of card index references to Trust Company literature, and traveling loan collection on Trust Company subjects (available only to member institutions). National Monetary Commission. State Banks and Trust Companies since the Passage of the National Bank Act. Washington Government Printing Office, 191 1. George E. Barnett. Reports of Comptroller of the Currency. Washington 1876 to 1916. New York State Banks' and Trust Companies* Spe- cial Committee. Report submitted to Governor Hughes, 1907. Appendix B 311 Bulletins of the American Institute of Banking. Publications of the American Academy of Political and Social Science. Reports of Superintendents of Batiks, various States. MONOGRAPHS A Sketch of the Pennsylvania Company for Insur- a7ices on Lives and Granting Annuities. Phila- delphia, 1896. Harrison S. Morris. One Hundredth Anniversary of the Pennsylvania Company for Insurances on Lives and Granting Annuities. Philadelphia, 191 2. Historical Sketch of the Essex Trust Company, Lynn, for its Centennial Year. 1914. Ellen Mudge Burrill. Memorandum of Seventy-five Years. Girard Trust Company. Philadelphia, 1911. Edward Sydenham Page. The Fiftieth Anniversary of the Founding of the United States Trust Company of New York. 1903- Fifty Years of Banking in Chicago. Merchants* Loan & Trust Company. Chicago, 1907. William Hudson Harper and Charles H. Ravell. Fifty Years. Philadelphia, 1865-1915. The Provi- dent Life & Trust Company. William S. ASHBROOK. Fidelity Trust Company. Philadelphia, 1866-1916. Title Insurance and Trust Companies. Philadelphia 1889. The Land Title & Trust Co. 312 Story of Trust Companies Famous Title and Trust Companies. Lawyers Title Insurance & Trust Company. New York, 1909. F. B. VOGEL. Citizens Savings & Trust Company. Cleveland, 1908. Old Colony Trust Company. Boston, 1915. State Street Events. Twenty-fifth Anniversary of the Founding of the State Street Trust Com- pany. Boston, 1916. An Epitome of the Past, A Chronicle of the Present, A Promise of the Future. The Cleveland Trust Company. Cleveland, 1908. Eighty-fifth Anniversary. Canal Bank & Trust Company. New Orleans, 1916. Souvenir of Twenty-fifth Anniversary. The Me- chanics Trust Company of New Jersey. Bayonne, 191 1. INDEX Abbott, Gordon, 191 Adams, Charles Francis, 2d, 283 Alabama Life Insurance & Trust Co., 71 Albany Trust Co., 168 Aldrich, Nelson W., 278 Alexander, H. J., 287 — James S., 285 Alger, Russell A., 277 Allen, Stephen, no Alley, Saul, 21 American Bankers Associa- tion, 227, 263, 264, 266 — Bible Society, The, 92, 94; United States Trust Co. Appointed Trustee, 92 — Life Insurance & Trust Co., Baltimore, 29, 71 — Trust & Savings Bank, Chicago, 188, 267 — Trust Co., Boston, 259, 260, 306 — Trust Co., Cleveland, 267 Anderson, Frank B., 287 Andrus, George, 16 Aonual Reports by Referees of the Supreme Court, 86-88 Appleton, William H., 279 Arbuckle, John, 280 Arkell, WilHam J., 283 Armour, George, 105 — J. Ogden, 281 Ashbrook, William S., 311 Aspinwall, William H., 279 Assets, Auction Sale of, 89 Astley, Thomas, 49 Astor, John Jacob, 21, 112, 279 — Trust Co., New York, 239, 240, 304 — Vincent, 285 — WilUam Waldorf, 285 Atlantic Cable, Opening of, 106 — Trust Co., 167 Auerbach, Joseph S., 283 Avery, M. N., 245 B Babcock, Philip S., 267, 275 — Samuel D., 279 Backus, M. F., 287 Bacon, Robert, 277 Baer, George F., 282 Bailey, Benjamin, 16 Baker, Ezra H., 259 — George F., 180, 197, 286 — • Stephen, 223, 295 Baldwin, LeRoy W., 220 — William H., Jr., 282 Baltimore Fire of 1904, 228, 229 Bancker, Charles N., 8 Bangs, Francis S., 267 Bank for Savings, 19 " — Note Reporters," 102 — of Commerce, 74 — of New York, 29, 65 — of North America, i 313 314 Index Bank of the State, The, Ohio, 75 — of the United States, 66 Bankers Trust Co., io8, 222, 227, 228, 268, 300 Banking Convention, First Important, 64 Banking System, Free, 66-68 Banks, early criticism of, 34- 36 — Safety Fund, 66 — Statistics of, 53-56 Bannard, Otto T., 183, 184, 264 Barbour, WilUam, 280 Bard, WiUiam, 21, 31, 1 10 Barnes, George, 255 Barnett, George E., 310 Barry, WiUiam C, 254 Bates, Dean Henry M., 272 Bay State Trust Co., Boston, 301 Bayne, Samuel G., 223 Bedford, Edward T., 280 Belmont, August, 197, 284 Bergen & Lafayette Trust Co., Jersey City, 256, 306 Berwind, Edwin J., 281 Bcsler, Williain G., 282 Bethell, Union N., 282 Betz, John F., 281 Biddle, Nicholas, 61 Binney, Horace, 48 Black, John C, 286 Blackford, Eugene G., 279 BHss, ComeHus N., 278 Bloodgood, Abraham, 21 Bohlen, John, 7 Boisot, Emile K., 221 Boldt, George C, 283 Bond Companies, Early, 43 — Edward P., 148 Boody, Charles A., 258 Booth, Willis, 187 Borne, John E., 267 Borough Bank of Brooklyn, 234 Boston Safe Deposit & Trust Co., 148-150, 306 Bourne, Frederick G., 280 Bowdoin, George S., 284 Bowling Green Trust Co., New York, 217, 301 Bownc, Walter, 21 Bradley, Robert S., 238 Brady, Anthony N., 282 Breslin, James H., 283 Bright, Louis V., 177 Brintnall, William II., 286 Broadway Trust Co., New York, 257, 305 Bronson, Isaac, 21 Brooklyn Bank, 234 — Trust Co., 133, 134, 257, 303 Brown, Alexander, 284 — Cyrus P., 179 — H. Martin, 179 — John Crosby, 284 Browne, N. B., 131 Buckner, Alortimer N., 184 Buffalo Trust Co., The, 75, 91 Bull, WiUiam L., 284 Burke, W. P., 210 BurriU, Ellen Mudge, 311 Busch, Adolphus, 281 Butler, Benjamin F., 22 Caldwell, Stephen A., 131 California vSafe Deposit & Trust Co., 230 Cambreleng, C. C., 16 Campbell, Felix, 258 Campbell, James, 212 Canal Bank & Trust Co., 208-210, 247, 307, 312 Cannon, Henry W., 286 — James G., 223 Carlisle, John G., 277 Carnegie Trust Co., New York, 289, 290 Carteret Trust Co., 256 Index 315 Case, George B., 283 Cassatt, Alexaiider J., 282 Castles, John W., 123, 196, 236, 247 Cator, George, 308 Centennial Exposition, 114 Central Bank of Hatch & Langdon, 100 — Trust Co. of Illinois, Chi- cago, 220, 221, 302 — Trust Co., New York, 108, 150-152, 301 Champlin, John T., 16 Chapman, Elverton R., 284 Charleston Insurance & Trust Co., 70 Chemical Bank, 29 Chicago Fire of 1871, 104, 145, 228 — Title & Trust Co., 249, 307 Choate, Joseph H., 278 Christensen, General C. T., 133 Citizens Bank (Smead, Col- lard & Hughes), loi — Savings & Trust Co., Cleveland, I39-I43. 277, 302, 312 City Bank, New York, 23, 27 — Trust & Banking Co., New York, 70 — Trust Co., Boston, 301 — Trust Co., New York, 217 Claflin, John, 281 Clark, Clarence H., 131 — Emery W., 287 — George C, Jr., 284 — William A., 278 Clarke, Dumont, 286 — Lewis L., 286 Claxton, John, 7 Clearing House, New York, 82, 227, 236 — Admission of Trust Com- panies to Full Member- ship, 274, 296 — Certificates, Issuance of, 233 — Forming of, 82 — 1 91 6 Holdings of Trust Company Members, 296, 297 — Withdrawal of Trust Com- panies from, 293 Cleveland Trust Co., 205- 208, 268, 303, 312 Clothier, Isaac H., 281 Clowry, Robert C, 282 Coffin, Charles C, 280 Coggeshall, Edwin W., 177 Colonial Trust & Savings Bank, Chicago, 302 — Trust Co., New York, 217, 219, 267 — Trust Co., Pittsburgh, 252 307 Colt, Samuel P., 179, 280 Columbia Finance & Trust Co., Louisville, 265 Columbia Trust Co., New York, 238, 239, 267, 301 Commerce Trust Co., Kansas City, 246, 247, 306 Commercial Trust Co. of New Jersey, Jersey City, 213, 214, 305 — Trust Co., Philadelphia, 253, 268, 305 Committee of Public Safety, 113 Commonwealth Trust Co., Boston, 261, 306 Continental & Commercial Trust & Savings Bank, Chicago, 188, 189, 303 — Trust Co., Baltimore, 228 — Trust Co., New York, 183, 264 Converse, Edmund C, 223, 225, 240 Coolidge, T. Jefferson, Jr., 189-191, 264 3i6 Index Cooper, Edward, 279 — Peter, 83, 279 Coppell, George, 284 Corbin, Austin, 281 Cornell, Robert C, 109 Corning, Erastus, 83, 279 Coudert, Frederic R., 283 Cowles, J. G. W., 206 Cox, Attila, 265 Crane, William Murray, 278 Cravath, Paul D., 283 Crimmins, John D., 285 Crocker, George, 280 Cudahy, Patrick, 281 Culbertson, Townlcy, 246 Cumming, George AL, 202 Cutler, Ralph W., 268 Cutting, William IBayard, 283 Cuyler, Cornelius C, 202 — Thomas De Witt, 253 D Daly, Charles P., 283 Davies, Julicn T., 283 Davison, Henry P., 223, 284 Dawes, Charles G., 220, 278 Dechert, Henry M., 265, 267 Deere, Charles A., 280 De Forest, Henry W., 283 Delafield, Richard, 286 Delavan, Edward C, 22 Depew, Chauncey M., 281 Deposits of Bank and Trust Company Members of New York Clearing House, 296, 297 Dick, Evans R., 284 — Lewis R., 286 Dickey, Charles D., 284 Digest of Trust Company Laws in the Stales and Territories, 273, 308 Dilloway, Chas. O. L., 286 Disston, William, 281 Dix, John A., 168, 279 Doane, J. W., 105 Dod, S. Bayard, 256 Dodge, Cleveland H., 280 — William E., 279 Doerr, Philip, 286 Dolan, Thomas, 285 Donnell, James J., 251 Dooley, Michael F., 287 Downer, Benjamin J., 309 Dows, David, 123, 202 — David, Jr., 281 Drake, J. C, 245 Drew, Daniel, 109, 281 Drexel, Joseph W., 284 Drum, John S., 244 Dryden, John F., 282 Du Bois, W. L., 144 Dudley, Peter, 265 Duer, John, 21 Duke, James B., 280 Dunham, J. H., 105 Du Pont, T. Coleman, 281 Dutilh, Charles, 112 D'Wolf, James, Jr., 16 E Eastman, George, 280 Eckels, James H., 223, 278 Eckert, Thomas T., 282 Elkins, Stephen B., 277 Elliott, Howard, 282 — J. M., 287 — Wm. T., 286 Ellis, Rudulph, 131 Empire Trust Co., New York, 219, 220, 303 Endicott, Wm., Jr., 143 Equitable Trust Co., New York, 217-219, 301 Erie Canal Trust & Banking Co. of Buffalo, The, 69 Erringcr, J. Livingston, 144 Essex County Trust Co., East Orange, 178, 304 Evans, Cadwalladcr, 7 — Hcnrv, 282 — Wilmot R., 286 Index 317 Evarts, Wm. M., 277 Events, Early, 18-20, 32, 33 Faber, Eberhard, 280 Failures, 237 Fairchild, Charles S., 183, 277 — Julian D., 258 Fairfield Loan & Trust Co. of Connecticut, 61 Farmers Fire Insurance & Loan Co. (sec below) Farmers' Loan & Trust Co., The, New York, 11-17, 19-21, 29, 32, 36-47, 58, 71, 75, 91, 107-110, 121, 301 Farmers Trust Co. of Lan- caster, Pa., 2 Farnam, Henry, 105 Farrelly, Stephen, 281 Federal Reserve Bank, 212, 225, 260 Federal Trust Co., Cleveland, 250, 291 Ferry, Daniel M., 280 Fessenden, Russell G., 259 Fidelity Title & Trust Co., Pittsburgh, 251, 252, 305 — Trust & Safety Vault Co., Louisville, 265 — Trust Co., Newark, 304 — Trust Co., Philadelphia, 128-132, 177-179. 303, 311 Field, Cyrus W., 282 — Marshall, 105, 279 Fifth Avenue Trust Co., New York, 197, 300 Fillmore, Millard, 67 First National Bank, Brook- lyn, 233 — Trust & Savings Bank, Chicago, 221, 222, 301 Fish, Preserved, 65 Fish, StuyA^esant, 281 Fitzgerald, Louis, 226 Flagler, Henry M., 280 Flint, Charles R., 285 Flower, Roswell P., 279 Flynn, S. R., 286 Forbes, Allan, 261 — Allen B., 284 Forgan, David R., 286 — James B., 221, 286 Francis, David R., 278 Franklin, Thomas, 16 — Trust Co., Brooklyn, 180- 182, 264, 305 Free Banking Act, 68, 69, 73 " — Money Banks," 70 Frew, Walter E., 286 Frick, Henry C, 185, 280 Fries, Col. F. H., 268 Frissell, Algernon S., 295 Frothingham, L H., 122 — Thomas, 253 Fryer, Robert L., 287 Fuller, Melville W., 106 — Oliver C, 268 Gage, Lyman J., 117, 272, 277, 309 Gallatin, Albert, 65 Gallaway, Robert M., 286 Gannon, John J., 247 Garfield, Harry A., 283 — James A., 140, 277 Garrett, John B., 115 — Robert, 281 Garth, Granville W., 223 Gary, Elbert H., 280 Gaston, William A., 287 Gates, Thos. S., 144 Gawtry, Harrison E., 280 Gaynor, William J., 259, 279 Geller, Frederick, 283 Georgia Insurance and Trust Co., 71 3i8 Index German-American Trust & Savings Bank, Los An- geles, 245, 246, 305 Gerry, Elbridge T., 180, 283 Gest, Jolin B., 131 — William P., 131, 309 Gibson, F. B., 265 Gill, John, of R., 252 Girard Trust Co., Philadel- phia, 50-52, 76, 107, 113-115, 267, 302 Given, T. H., 287 Glynn, Martin H., 279 Goddard, Leroy A., 286 Goelet, Robert, 123 — Robert W., 285 Goff, Frederick H., 206, 268 Goodhue, Jonathan, 2i Gould, Edwin, 285 — Frank J., 282 — George J., 282 Grace, William R., 279 Grant, Frederick D., 274 — Hugh J., 279 — RoUin P., 286 Gratz, Hyman, 49 Gray, Cyrus S., 251 Griggs, John W., 277 Griscom, Clement A., 285 Griswold, George, 16 Guaranty Trust Co., New York, 108, 195-200, 202, 247. 300, 310 Guardian Savings & Trust Co., Cleveland, 250, 251, 268, 304 — Trust Co., New York, 220, 303 Gubelman, Oscar L., 284 Guggenheim, Daniel, 283 — Isaac, 283 H Hamill, Ernest A., 286 Hamilton, Andrew, 308 Hamilton Trust Co., Boston, 262 Hanna, Marcus A., 278 Hardenbergh, John W., 213 Harison, Richard, 16 Harmon, Judson, 277 Harper, William Hudson, 311 Harriman, Edward H., 282 Harris, Albert W., 248 — Edward, 254 — Norman W., 248 — Trust & Savings Bank, Chicago, 248, 249, 304 Hart, Francis R., 191 Hartford Trust Co., 268 Hartley, Marcellus, 280 Harvey, George, 283 Haugan, Hclge A., 286 Havemeyer, Henry O., 280 — Theodore A., 280 Haven, George G., 2^5 Hawlcy, Edwin, 282 Hay, John, 140, 277 Heaton, Ernest, 308 Heckscher, August, 285 Heebner, Samuel L., 144 Hellman, Isaias W., 204 — I. W., Jr., 204 — M. S., 186 Hemphill, Alexander J., 196 — James, 8 Henderson, Charles R.. 202 Hendricks, Francis, 255 Hendrix, Joseph C, 286 Hepburn, A. Barton, 223, 295 Heppenhcimer, General Wil- liam C, 256 Herrick, Clay, 215, 299, 308 — Myron T., 278 — Robert F., 286 Heurtley, Arthur, 265 Hewitt, Abram S., 279 Heyer, Cornelius, 65 Hibernia Bank & Trust Co., New Orleans, 247, 306 Hibernian Banking Associa- tion, Chicago, 249, 250 Index 319 Higginson, Henry L., 284 Hill, James J., 281 — Louis K., 281 Hillhouse, Thomas, 166, 168 Hine, Francis L., 286 Hinman, G. P., 86 Hodenpyl, Anton G., 267 Hoe, Robert, 279 Hoffstott, P. N., 280 Holiday, John H., 265 Holland Purchase, 12 Hone, Philip, 21 Hooper, James R., 143 — Wm., loi Hotchkiss, Henry L., 282 Howard Trust & Banking Co., Troy, 70 Hudson Trust Co., Hoboken, 256, 306 Hughes, Charles E., 310 — Committee, 295 Hughitt, Marvin, 282 Hulbert, Edmund D., 105 Hunt, Wilson G., 83 Huntington, CoUis P., 282 Hyde, Henry B., 282 — James H., 282 Ickelheimer, Henry R., 284 Ide, George E., 282 Illinois Trust & Savings Bank, Chicago, 145, 146, 301 Imbrie, James, 284 Industrial Trust Co., Provi- dence, 179, 180, 302 International Trust Co., Den- ver, 265 — Trust Co., New York, 234 Irby, W. R., 210 IseHn, Adrian, Jr., 284 Ives, General Brayton, 168 Jackson, A. A., 267, 309 — Henry C, 286 — John B., 251 James, William, 16, 21 Jamison, William A., 281 Janney, Nathaniel E., 176 Jay, Peter Augustus, 21 — Pierre, 272 Jennings, E. H., 252 Jersey City Trust Co., 305 Jesup, Morris K., 279 Jewett, Hugh J., 283 Johnson, Edward, 258 — Francis M., 149 Johnston, John 16 — John Taylor, 281 Jones, Breckinridge, 193, 265, 267, 269 — Edward R., 21 Jordan, Noah W., 259 Juilliard, Augustus D., 281 K Kahn, Otto H., 284 Kean, John» 278 Keep, Charles H., 238 Kelly, Eugene, 279 Kelsey, Clarence H., 169 Kemper, W. T., 246 Kennedy, John S., 152, 279, 285 Kent, James, 21 Kerr, Walter, iii King, A. Gracie, 284 — Edward, 123, 235 — John, 182 — Willard v., 238 Kings County Trust Co., Brooklyn, 258, 259, 305 Kinney, Thomas T., 178 Kirkbride, F. B., 308 Knapp, Shepherd, 83, 109, 284 Knickerbocker Savings Insti- tution, 84 320 Index Knickerbocker Trust Com- pany, New York, 231, 237, 238, 301 Knowcr, Benjamin, 22 Knox, John J., 53, 79, 161, 297 — Philander C, 185, 277 Kountze, Luther, 284 Krech, Alvin W., 218 Kruttschnitt, Julius, 282 Ladd, William M., 287 Lament, Daniel S., 277 — Thomas W., 286 Land Title & Trust Co., Philadelphia, 172, 174- 176, 306, 311 Landon, Charles G., 202 Lane, Gardiner M., 284 Lanier, Charles, 284 Larkin, John D., 281 Larocque, Joseph, 283 La Salle Street Trust & Sav- ings Bank, Chicago, 290 Lawrence, A. H., 16 — Amos A., 143 — Frank R., 283 — Joseph, 83, 86 — William B., 21 Lawyers Title & Trust Co., New York, 176, 177, 304 Leavitt, David, 76 Ledyard, Lewis Cass, 283 Leeds, William B., 282 Leggett, Francis H., 281 Leiter, Levi Z., 281 Lenox, Robert, 21 Lewis, Charlton T., 283 — Gabriel L., 16 Lewisohn, Adolph, 283 Life Policy, Old "Farmers," 46, 47 Lincoln, Robert T., 277 Lincoln Trust Co., New York, 232 — Trust Co., St. Louis, 265 Lloyd, Horatio G., 253 Loasby, Arthur W., 255 Lockport Bank & Trust Co., 69, 70 Logan, William, 223 Long, John D., 278 Long Island Loan & Trust Co., Brooklyn, 303 Longstreth, Joshua, 7 Longyear, W. D., 186 Lord, David J., 262 Loree, Leonor F., 282 Lorillard, Peter, 21 Los Angeles Trust & Savings Bank, 244, 245, 305 Lounsbury, Phineas C, 286 Low, Abiel A., 123, 180, 279, 202 Lowry, Robert J., 287 Ludlow, Thomas W., 21 Luhnow, Christian A., 216 M McAdoo, William G., 277 McAllister, Jas. R., 286 McBride, James, 16 McCall, John A., 282 — Samuel W,, 272 McCarter, Uzal H., 178 McCormick, Cyrus H., 105, 280 McCrea, James, 282 McCulloch, J. S., 286 McCurdy, Richard A., 282 — Robert H., 284 McCutchen, Charles W., 281 McEldowney, H. C, 186 McGarrah, Gates W., 224 Mcintosh, H. P., 250, 268 Mclntyre, Archibald, 16 McKean, J. S., 186 McKinney, Frank C, 309 McLucas, W. S., 246 ^TcMillan, Hugh, 280 ATcMilHn, Emerson, 280 Mackay, Clarence H., 282 Index 321 Mactier, Henry, 16 Macy, William H., 279 Magee, James, 16 Maitland, Thomas, 284 Mallinckrodt, Edward, 281 Manhattan Company, Bank of the, 29, 30 — Trust Co., New York, 226, 300 Manning, Daniel, 277 Marshall, Benjamin, 16 Marston, Edgar L., 224 — Edwin S., 109, 236, 295 Martindale, Joseph B., 286 Mason, John H., 21, 268 Mather, Robert, 282 — Wm. G., 267 Maynard, Edwin P., 133 Mechanics Bank, 57 — Trust Co. of New Jersey, Bayonne, 312 Mellen, Charles S., 282 Mellon, A. W., 184 Menefee, R. C, 246 Mercantile Trust & Deposit Co., Baltimore, 252, 253, 306 — Trust Co., New York, 226, 300 — Trust Co., St. Louis, 210- 213, 267, 304, 309 — Trust Co., San Francisco, 230 Merchants and Bankers Al- manac of 1868, 137 Merchants Exchange Co., 78, 79 — Loan & Trust Co., The, Chicago, 103-107, 117, 302 Meredith, William, 65 Merrill, Edwin G., 123 Mershon, Leroy A., 275 Metropolitan Bank & Trust Co. , Los Angeles, 244, 305 — Trust & Savings Bank, Chicago, 221, 302 21 Metropolitan Trust Co., New York, 166, 167, 302 Meyer, George von L., 277 Michener, Harry B., 286 Michigan Trust Co., Grand Rapids, 267 Miller, C. S., 48 — Theodore F., 133 Mills, Andrew, 295 — Darius O., 285 — Ogden, 285 Mississippi Valley Trust Co., St. Louis, 192-194, 264, 265, 267, 304, 310 Missouri-Lincoln Trust Co., St. Louis, 304 Mitchell, John J., 146 — Dr. S. Weir, 283 Morgan, Edwin D., 166, 279 — J. Pierpont, 152, 202, 232, 236, 238, 284 — J. P. & Co., 232 Morgenthau, Henry, 278 Morris, Calvary, 206 — Effingham B., 115 — Harrison S., 48, 311 Morse, E. Rollins, 284 Mortimer, Frank C, 309 Morton, Joy, 281 — Levi P., 180, 197, 277 — Paul, 278 — Trust Co., New York, 197, 300 Moses, George W., 286 Mott, Jordan L., 279 Mumford, George S., 262 Munsey, Frank A., 283 Murray, Lawrence O., 278 Murtha, Wilham H., 258 Mutual Life Insurance Co., The, 80 N Nash, William A, 286 National Bank of Commerce, New York, 231 322 Index National Banking Act, 103 — City Bank, New York, 56, 57 — Safety & Trust Co., 76 Nettleton, Charles H., 280 Newberry, Truman H., 278 Newbold, George, 65 New Brunswick Trust Co., N. J., 178, 304 Newcomb, H. R., 143 New England Trust Co., ..Boston, 143, 144, 305, 309 Newton Trust Co., N. J., 178,304 New York Life Insurance & Trust Co., 18-31, 40-42, 58, 65, 71, 75, 80, 91, 107, 110-112, 304 — Security & Trust Co., The, 183 — Trust Co., The, 183, 184, 301 — Trust & Banking Co., 74 Nicholson, William R., 176 NicoU, De Lanccy, 283 Norcross, Otis, 143 North American Trust & Banking Co., 69, 74, 76-78 — Trust Co., 217 Northern Trust Co., Chicago, 247, 248, 264, 303 Norton, D, Z., 143 Oakley, Thomas J., 22 Oakman, Walter G., 196 Ohio Life Insurance & Trust Co., 29, 58-60, 74, 75, 95-100 Olcott, Frederic P., 150, 151 Old Colony Trust Co., Bos- ton, 189-192, 264, 301, 312 Olney, Richard, 277 Olyphant, Robert, 281 Orr, Alexander E., 197, 281 Packard, C. S. W., 112 — Edwin, 182, 196 Page, Edward Sydenham, 311 Panic, of 1819, 10 — of 1837, 33, 63,64, 81 — of 1857, 97, 98, 99, loi, 102 — of 1873, 146, 147, 148 of 1893, 201 — of 1907, 231-236; Govern- ment Relief Plan, 234; Statement of Comp- troller of the Currency, 235 Parish, Henry, no Paul, Henry N., 112 Patterson, C. Stuart, 286 Paul Revere Trust Co., 260 Payne, Henry B., 140 Peabody, Charles A., 282 — S. Endicott, 259 Peace, Joseph, 7 Pennsylvania Co. for Insur- ances on Lives and Grant- ing Annuities, The Phila- delphia, 2, 4-9, 48-50, 76, 107, 112, 113, 303, 311 People's Safe Deposit & Trust Co., Jersey City, 256, 306 — Trust Co., Brooklyn, 257, 258, 304 Perine, Edward T., 203, 309 Perkins, George W., 224, 284 Phelps, Dudley B., 255 — John J., 83 — William Walter, 278 Philadelphia Trust Co., 144, 304 Index 323 Phipps, Henry, 280 Pierce, H. Clay, 285 Pierson, Lewis E., 286 Plant, Morton F., 285 Platten, John W., 202 Poillon, William C, 226, 268 Political Events, Early, 3-5, 10, 18, 19 Pope, Albert A., 281 Porter, William H., 224, 284 Post, A. H. S., 252 Potter, Edwin A., 188, 267 Pratt, Charles IM., 2 So Preston, Andrew W., 286 Prime, Nathaniel, 21 Prince, F. M., 287 Prosser, Seward, 225 Provident Life & Trust Co., Philadelphia, 124-127, 301 Pruyn, Robert C, 287 Pullman, George AI., 105, 281 Purves, G. Colesberry, 286 Putnam, William E., 150 Raguet, Condy, 8 Randolph, Edmund D., 284 Ransom, Frederick H., 145 - S. W., 145 Ravell, Charles H., 31 1 Raven, Anton A., 282 Rea, Samuel, 282 Real Estate Title & Trust Co., Chicago, 307 Ream, Norman B., 285 Red Bank Trust Companv, 178 Redmond, Henry S., 284 Reid, Daniel G., 224, 280 — Whitelaw, 278 Remsen, Peter, 21 Reserves, Trust Company, 291-296 Revell, Alexander H., 281 Reynolds, George M., 188, 250, 286 Rhoades, John Harsen, 286 — Joshua, 252 Rhode Island Hospital Trust Co., Providence, 134, 135. 164, 302 Richards, Benjamin W., 51, 113,115 Richardson, Charles, 175 Riclimond Trust & Safe Deposit Co., 267 Ridgway, Thomas, 115 Riker, John J., 281 Riley, Harrison B., 249 Ripley, Edward P., 282 Robb, Russell, 282 Robberies, 129, 130 Roberts, Marshall O., 279 Rochester Trust & Safe De- posit Co., 253, 306 Rockefeller, William, 280 Rogers, Henry H., 280 Rogerson, Charles E., 150 Rolston, Rosewell G., 109 Roosevelt, W. Emlen, 285 Root, EHhu, 277 Ropes, Ripley, 133 Rue, Levi S., 286 Russel, William W., 16 Ryan, Thomas F., 180, 285 Sabin, Charles H., 196 Safe Deposit & Trust Co., Baltimore, 228 — California, 230 Sage, Russell, 122, 284 St. Louis Trust Co., 265 Saltus, Francis, 16 Sands, B. Aymar, 283 — Oliver J., 287 San Francisco Fire of 1906, 229, 230 Sartori, J. F., 186 Satterlee, Herbert L., 238 324 Index Savings & Loan Society, San Francisco, 243 — Union Bank & Trust Co., San Francisco, 243, 244, 303 Scarborough, W. W., loi Schaflner, Ivlargarct Anna, 309 Scheerer, Wm., 287 Schcfer, Carl, 281 Schell, Christian, 16 Schieren, Charles A., 279 SchifF, Jacob H., 180, 284 — Mortimer L., 284 Schlatter, William, 8 Schley, Grant B., 284 Schmidlapp, J. G., 251 Schmidt, Edward A., 286 Schwab, Charles M., 280 Scribner, Charles, 279 Security Title & Trust Co., Chicago, 265 — Trust & Savings Bank, Los Angeles, 186-188, 302 — Trust Co. of Rochester, 254. 307 Seligman, Isaac N., 284 Sellers, Frank H., 265 Sergeant, John, 48 Seymour, Henry, 46 Sharp, Samuel S., 286 Shaughnessy, Sir Thomas G., 282 Shaw, G. B., 188 — Leslie M., 277 Sheldon, Edward W., 117, 236, 295 Sherman, James S., 277 Shipley, Samuel R., 126 Shoemaker, Jacob, 8 Shonts, Theodore P., 282 Shortridge, N. Parker, 282 Sigel, Franz, 278 Simmons, E. C, 281 — J. Edward, 286 Skelding, Francis H., 224 Sloan, Samuel, 281 Sloaiie, William D., 281 Smith, Charles Emory, 272 — Byron L., 248 — George T., 287 — J. Moreau, 254 — Orson, 105 — Solomon A., 105, 248 — V. Moreau, 254 Smyth, Lindley, 112 Snow, Elbridge G., 282 Snyder, Valentine P., 285 Southard, George H., 1S2, 264 Southern Life Insurance & Trust Co., St. Augustine, 60, 61, 71 — Trust Co., Los Angeles, 302 Spaulding, Henry F., 150 Specie Payments Suspended, 10, 63, 65, 102, 237 Spencer, Samuel, 282 Sperry, Jacob, 7 Speycr, James, 284 Spreckels, Claus, 280 Standard Trust Co., New York, 300 State Banks, Growth of, 79 — Street Trust Co., Boston, 260-261, 305, 312 — Trust Co., New York, 267 Steele, Charles, 284 Stein wav, William, 279 Sterhng," John W., 283 Stern, Louis, 281 Sterrett, J. E., 308 Stetson, C., 98 Stevenson, Adlai E., 277 — John, Jr., 280 Stewart, John A., 84, 86, 116 — Lispenard, 283 Stickney, George E., 189 Stillman, James, 180, 285 Stilwell, Arthur E., 282 Stites, John, 265 Stockton, Philip, 191 Stone, Frederick M., 149 Index 325 Storm, Garrit, 22 Stotesbury, Ldward T., 204 Straus, Isidor, 281 — Jesse I., 281 Strong, Benjamin, Jr., 225 Strong, William L., 279 Sullivan, James F., 2S6 Sumner, William Graham, 308 Superintendent of Banks, Oirice Established at Al- bany, 75 Suspensions and Failures, 288-290 Swayne, Wager, 278 Swinney, Edward F., 224 Taft, Wm. H., 274 Talcott, James, 284 Tallmadge, James, 16 Tatnall, Henry, 2S2 Taylor, Moses, 109, 279 — Roland L., 144 Testamentary Trusts, Not- able, 106, 132, 133, 142, 194, 212, 258 Thalmann, Ernst, 284 Thayer, Eugene V. R., 287 Thomas, Douglas H., 287 — Eben B., 282 — Samuel, 282 — Seth E., 280 Thompson, David, no — John, 99 — John F., 224 -— Samuel, 21 Tierney, Myles, 256 Tiffany, Charles L., 279 Tilden, Samuel J., 279 — William, A., 286 Tileston, Thomas, 109, 284 Tilford, Frank, 281 Tilley, John D., 265 Title Guarantee & Trust Co., New York, 169-172, 265, 292, 302 Title Insurance & Trust Co., Philadelphia, 267 Tompkins, C, 265 Townsend, Edward M., 286 — Isaiah, 21 — John R., no — Thomas S., 16 Tracy, Benjamin F., 277 — Frederick A., 16 Tradesmen's Bank, 65 Trenhokn, William L., 278 Trumbull, Frank, 2S2 Trust and Banking Co., Troy, 70 Trust & Deposit Co. of Onon- daga, Syracuse, 255, 307 Trust Companies, Chart of, 1907, 215 — Earliest Reports, 28 — Early Decisions on, 84, 85 — First Reliable Statistics of, 153, 161-164 — Reports of Federal Comp- troller, 159, 160, 165 — Reports on, Ordered by State Senate, 90 — State Superintendent's Re- port (1S74), 158, 161 — State Supervision of, 153- 158 — StabiUty of (1893), 201 — Statistics (since 1875), 297-299 — Suspensions of, 147 Trust Companies, Forms for, 273> 309 Trust Companies of the United States, 203, 242, 298, 30S Trust Companies — Magazine, 216, 22S Trust Company Committee, New York, 235-237 — Figures, Bankers Encyclo- pedia (1896), 200 326 Index Trust Company, Functions, 118-121, 208 — Plan in Other Countries, 240, 241 — Section, 263-275; Presi- dents and Meeting Places, 267, 268 — Proceedings, 271 — Suspensions, 235 — of America, 217, 232, 267, 301 — of New Jersey, Hoboken, 256, 306 — of the Republic, New York, 290 Tuckerman, Charles S., 189 TurnbuU, Arthur, 202, 284 — William, 279 Tuttle, Lucius, 282 Twohy, D. N., 287 Tyrell, John, 105 U Union Bank & Trust Co., of New London, Conn., 2 — County Trust Co., Eliza- beth, 178, 304 — Savings Bank & Trust Co., Cincinnati, 251, 306 Union Trust Co., Boston, 291 — Chicago, 144, 304 — Indianapolis, 265 — New York, 122-124, 247, 301 — Pittsburgh, 184-186, 301 — Providence, 235 — St. Louis, 265 — San Francisco, 204, 205, . 305 United States, Bank of the, 25, 28, 57, 64; Second, 33, 61 — Bank of Pennsylvania, 61- 63 — Mortgage & Trust Co., New York, 202-204, 264, 301, 308 United States Trust and Banking Co., 69 — Trust Co., 80, 82-92, 107, 116, 117, 302,311 Vail, Theodore N., 282 Valentine, Patrick A., 281 Vanderbilt, Alfred G., 285 — Commodore Cornelius, 109, 123, 281 — Cornelius, 285 — Frederick, W., 197 — William H., 123, 281 Vanderlip, Frank A., 285 Van Home, Sir William C, 282 Van Norden Trust Co., 292 Van Rensselaer, Stephen, 21 Van Tuyl, George C, Jr., 168 Verplanck, Gulian C, 21 Viele, John L., 16 Victor, Thomas F., 281 Vilas, William F., 277 Villard, Oswald G., 283 Vogel, F. B., 312 — Fred, Jr., 287 W Wachovia Loan & Trust Co., Winston-Salem, N. C, 268 Wade, Festus J., 210, 267 — Jeptha H., 140, 143 Wadsworth, James S., 123, 278 Wagner, Edwin L., 286 Wales, Salem H., 283 "Wall Street Chorus, The," 72 Wallace, James N., 151, 236 Walmsley, R. M., 209 Walsh, Julius S., 193 Wanamaker, John, 277 — Thomas B., 281 Index 327 Warburg, Paul M., 284 Ward, A. Montgomery, 281 Warder, Jeremiah, Jr., 7 Waring, Orville T., 280 Washburn, W. J., 187 Washington Trust Co., Wes- terly, R. I., 2 Waterbury, John I., 226, 236 Watson, Clarence W., 278 — James S., 254 — Robert C, 254 Weld, C. Minot, 286 Wells, Herbert J., 136 Welsch, John, 8 Westinghouse, George, Jr., 280 Weyerhauser, Frederick E., 280 Wheaton, Henry, 16 Whitaker, Edwards, 287 White, David, 16 — Horace, 279 Whitelaw, John P., 250 Whitney, David R., 143 — Harry Payne, 285 — Stephen, 22 — William C, 277 Widener, Peter A. B., 285 Wiggin, Albert H., 224 Wigglesworth, George, 143 Williams, Clark, 267 — George, G., 286 — John Skelton, 267, 278 — Micajah T., 58 — Moses, 261 Williamsburg Trust Co., 234 Williamson, Dow D., 109 Willis, H. Parker, 273 Windsor Trust Co., New York, 220, 303 Wing, Asa S., 127 Winslow, Sidney W., 281 Winsor, Robert, 224 Winthrop, Henry Rogers, 284 Wisconsin Trust & Security Co., Milwaukee, 268 Woerheide, A. A. B., 265 Wood, Arthur King, 182 Woodbury, Levi, 53 Woodford, Stewart L., 278 Woods, Dr. W. S., 246 Woodward, James T., 286 Woolverton, Samuel, 224 Woolworth, Frank W., 281 Worthington, George, 140 Wright, Clifford B., 251 Wrigley, William, Jr., 280 Yoakum, Benjamin F., 282 Yorke, Samuel, 7 Young, Edward F. C, 224 — George W., 202, 264 Ziegler, William, 281 ONIVERSllY OF SOUTHERN CALIFORNIA USm^' A History of Modem Banks of Issue By Charles A. Conant Author of " Wall Street and the Country," etc 8°. 5th Edition^ Revised and Enlarged. $3.50 " No better volume can be recommended to the general reader who wishes to famiharize himself not only with the theory of banking, but with the history and actual experience of this great agency of industrial progress." — Chicago Eve, Post. " We can only express our hearty appreci- ation of the book as a whole. It is extremely interesting. It cannot but be useful, and to us it is very cheering. Mr. Conant's book, from beginning to end, is a proof that sound currency is evolved necessarily from the progress of an 'industrial and commercial people.' "— iV. Y. Times, G. P. Putnam's Sons New York London Capital To=Day A Study of Recent Economic Development By Herman Cahn 12°. $1.50 The following study has been written with special reference to the present economic situation in the United States, the essential features of which have been developed since the Civil War. But as the law underlying the capitalist mode of production and its tendencies are the same everywhere, such special reference to one country partakes of the character of an illustration of conditions obtaining or shaping themselves to-day in all advanced industrial countries. The most momentous developments during this period are the centralization of control of capital and the modification of the money system. The latter is by far the more por- tentous. Yet it is the former which occupies public attention, while silence reigns concern- ing the menacing money question. Partial List of Contents Economics a Science — Marxian Theory of Value Briefly Stated — Functions of Money — The Handicaps of the Money System — Money Tokens — Money of Account — Totality of Money System in U. S. — The Cycle of In- dustrial Capital — The Mystery of Capitalism — Fictitious Capital — The Concentration of Industrial Capital — The Concentration of Money Capital — Unified Capital. G. P. Putnam's Sons New York London A Brief History of Panics And their Periodical Occurrence in the United States By Clement Juglar Translated, Edited, and with an Introduction By DeCourcy W. Thom 12°. $1.00 This third edition of a decidedly im- portant work has received a valuable addition in the material by DeCourcy W. Thom, former member of the Baltimore Stock Exchange and of the N. Y. Con- solidated Exchange, which brings the book from 1889 down to date. G. P. Putnam's Sons New York London The Theory and History of Banking By Charles F. Dunbar Revised, Enlarged, and Brought to Date by 0. M. Sprague This important volume by the late Professor of Political Economy in Har- vard University was first published in 1 89 1. At the time of the author's death, in 1900, he was engaged in revising and enlarging the work. The comple- tion was intrusted to Mr. Sprague, and a second edition appeared in 1901. Over 25,000 copies have been sold. 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