REPORTS OF LEADING TRUST COMPANIES OF
NEW YORK STATE

REPORT OF THE CONDITION OF

THE SECURITY TRUST COMPANY
OF TROY

at the close of business on the 9th day of Sep-
tember, 1912:

Trust Companies

A MONTHLY MAGAZINE DEVOTED TO TRUST COMPANY, BANKING AND FINANCIAL INTEREST OF THE UNITED STATES

Endorsed by the Executive Committee of the Trust Company Section, American Bankers' Association

Bol. XV.

T

THE WILSON ADMINISTRATION-ITS OBLIGATIONS AND
RESPONSIBILITIES

"Our hope and purpose is now to bring all the free forces of
the Nation into active and intelligent co-operation and to give to our
prosperity a freshness and spirit of confidence such as it has not
had in our time."-President-elect Woodrow Wilson.

HROUGHOUT the land, and especially among the men who are carry

ing upon their shoulders the real burden of industrial and economic progress, regardless of their political faith, there is a brave, buoyant feeling that President-elect Woodrow Wilson will rise above partisan clamor and be guided solely by the highest conceptions of justice and righteousness in the administration of the National Government. He will be called upon to exercise a greater degree of moral courage and clarity of vision than any former tenant of the Executive Mansion since the fateful days of Abraham Lincoln. In the mind of every intelligent, loyal American citizen the one query is uppermost, "Will he have the strength to resist the tremendous pressure which will be brought to bear against him, particularly from the radical, biased members of his own political party?" No President has ever been confronted with such splendid opportunities to foster and preserve the welfare of the country, either from industrial, social or civic standpoints, as Woodrow Wilson will face next March. It is equally true that no administration has been charged with such grave responsibilities, such power to destroy business confidence, interrupt natural growth and plunge the country into treacherous currents of experimental legislation or untried, partisan policies.

If we may rely upon platform and campaign pledges it is fair to assume that the Wilson administration, with the assistance of a Democratic Senate and House of Representatives, will, first of all, direct their militant efforts against "special privilege." This can mean nothing else than revision of the tariff. The Democratic platform promised "immediate relief" and the new Congress will probably be called into extra-session next Spring. The various revised schedules which received Democratic endorsement at the last session of Congress and which were held up by the Republican coalition in the Senate, will doubtless be brought forward. Nor is it the evident purpose of the ruling party to favor the revision of tariff schedules through a non-partisan commission. The orators and

standard bearers of the party which made such a clean sweep on November 5th directed their attention mainly to the alleged evils of protection, and the nourishment of "trusts" by high tariff walls.

Under the principles of protective tariff this country has attained the highest measure of its industrial development and material prosperity. It has become one of the strongest competitors in the "world markets" and its foreign trade has expanded to enormous proportions. The success' of the Wilson administration will depend upon the caution and foresight with which it will insist upon gradations in tariff schedules so as to provide proper safety for domestic commerce and at the same time keep open the channels for the exportation of surplus products. The past few years and especially the results of the last election have shown how general consideration of fairness and equality has broken down party lines. The Democratic party, as steward of the nation's wealth and resources, will either fall or command public favor by the manner in which they interpret the unmistaken demand of the people for fair dealing toward corporations as well as individuals.

But the incoming administration is confronted with other problems which also demand freedom from party bias or radical tendencies. It cannot be denied that the Bryan wing of the Democratic party will be a source of peril or at least of irritation. It is this element which would destroy constitutional safeguards, recklessly undertake new theories of government or invent laws that would create panic or encroachment of property rights. "Will Wilson yield to the blandishments of these dangerous theorists or dreamers?" is the serious question which every good American asks himself today. There is assurance in the dignified, the conservative and just attitude which the President-elect has manifested during the campaign and since the election.

One of the most serious problems which must engage the attention of the Wilson administration and Congress is that relating to national currency and banking reform. In his public speeches President-elect Wilson has exhibited some signs of sharing in that unfair prejudice against any reforms which are advocated or preferred by bankers themselves. On the other hand he has not denied the statements which have appeared in print from time to time that he is "a Central Bank man." Unless given a new lease of life, which is very improbable, the Emergency Currency Act which is intended to provide temporarily against any repetition of such conditions as existed in the fall of 1907, will expire within eighteen months. The splendid manner in which the banks and trust companies provided the funds this fall for the financing of the greatest crop in our history, reflected high credit upon them, but at the same time emphasized the primitive character of our currency laws. The Democratic party has an exceptional opportunity of demonstrating that it can rise above prejudice and enact new laws which shall solve the problem in a scientific manner.

President-elect Wilson should use his influence without delay in putting an end to the manner in which the so-called Congressional inquiry into the alleged "Money Trust" is being conducted. The methods of this committee and its counsel, who has a most unsavory record as a stock promoter, have been such as to create feelings of disgust among Democrats, Republicans and Progressives alike. It should be one of the first acts of the new administration to call a halt in the prosecution of this so-called "inquiry" and to have a committee appointed which shall investigate the subject of banking and currency reform from an intelligent and unbiased standpoint.

A NEW OPPORTUNITY FOR TRUST COMPANIES
Establishment of Mortgage Bank Departments

GEORGE WOODRUFF

President Woodruff Trust Company, Joliet, Ill.

(Editor's Note: In view of the general demand and necessity for the extension of better credit facilities to agricultural interests in this country, which was voiced in the platforms of all the leading political parties, the article herewith presented is of special interest and timely. The Woodruff Trust Company was the first trust company in this country to adopt the European system of negotiating farm mortgage loans and its methods embody the most practical features of the successful mortgage banks and land credit associations of Germany and France. The author of this article recently visited Europe and obtained valuable information at first hand from leading authorities. As explained by Mr. Woodruff there exists a special opportunity, especially for trust companies located in the center of the farming regions, to provide the needed facilities.)

TH

HE present discussion in America in regard to agricultural credit has led to a better appreciation of the need in our country for mortgage banks modeled after the plans of the great European institutions, and this fact opens up new opportunities for trust companies and other similar institutions.

Practically any trust company has the power under our existing laws to operate along the lines of the European mortgage banks and by taking advantage of this opportunity, trust companies can not only introduce a much more convenient, modern and popular form of mortgage, but they can also furnish a new standard investment to the investment public.

A trust company desiring to go into this line of business should create a separate department for this purpose and all mortgage loans made through this department should be on an amortization basis. Such loans as are made on farm lands should not exceed 50 per cent. of the value of the land and should be made for a period of thirty years, while such loans as are made on property other than farm land should run for a somewhat shorter period. Each loan should be made subject to an amortization plan in order to compel the repayment of the principal in small semi-annual payments, and as the loan would never have to be renewed but would continue to run until the semi-annual payments had cleared the property of debt, the owner would never be compelled to pay the frequent commissions, expenses of bringing down abstracts and legal charges which he is now compelled to pay every few years when the loan is renewed.

In many parts of our country the interest rate alone amounts to at least 8 per cent. per annum, but any trust company located in those sections, by adopting this amortization plan could easily afford to loan money on farms for thirty years requiring an annual payment or annuity of but 8 per cent. which would cover not only the interest but also the payment of the principal and the expenses and profits of the company. The payments made each year would always be the same in amount and would equal 8 per cent. on the principal of the loan; viz., 6 per cent. for interest, 1.227 per cent. for amortization or payments on the principal, 773 per cent. for expenses and profits-total 8 per cent.

For a loan of $1,000, the transaction would work out as follows: Amount of Loan, $1,000. Semi-Annual Payment, $40.

(This example applies proportionately to a loan of any amount whatever.)