Important Trust Company Merger

The stockholders of the Trust Company of North America are considering a proposal to seal the assets of that institution and to merge with the Commercial Trust Company. The plan is to exchange twentyfour shares of Commercial Trust Company stock for one hundred shares of the Trust Company of North America stock. The agreement provides that the building occupied by the Trust Company of North America at 305 Chestnut street shall be sold for the benefit of the stockholders of that institution, independent of the exchange of shares. This was the method adopted in the merger of the Western National Bank and the Girard National. By this merger the Commercial Trust Company will increase its resources from $14.303.383 to $18,586,264. The deposits will be increased to about $14,000,000 and the surplus will reach $2,300,000.

Prevention of Forgeries

In an address before the Pennsylvania Bankers' Convention at Bedford Springs. Mr. L. W. Gammon made the following valuable suggestions looking toward the prevention of forgeries and bogus check operations.

"There is another matter I wish to take up, where the banks and bank officers can limit the amount of forgeries and bogus check operations to a minimum. That is, not to allow counter checks, so-called, to lie loose around the bank, where anybody can come in and pick them up and walk out with them. It is not only a dangerous practice, but it is an inducement to the beginner to see what he can do in the way of drawing a check and putting it over. There is one city in the State of Pennsylvania today, where a crook went into three different banks and took supply of checks. He has been drawing checks on these banks ever since. They are supposed to be certified. He has a certification stamp of his own, can change it, and certify it on any bank in a few seconds. None of those checks, however, have been passed on bank members, nor has the attempt been made, but they have been on individuals. If those banks had marked on the checks in red ink,

a

counter check," the crook would not have done such a thing. Why? When he would take a check and go to some other city and try to pass it on anybody, they would

say, "Why that check is no good; where is your regular check? That is only good at the counter."

In New York City today it is impossible to get a check from any bank; there are none lying loose. If you want a check you must go to the teller's window and identity yourself before you will get even a single check. That is the way it should be with every bank in the United States. If that is done, the cases will be reduced to a minimum.

Through the detective department at the present time we are taking in practically all the lithographing establishments throughout the country, calling on them personally, and asking for samples of their drafts or checks, stating we wished to have some printed. In each place we explain to the manager the importance of marking these checks "sample." So far we have succeeded in having every one of the lithographing establishments that have been seen agree to have all samples that they even give to salesmen, or that they send out in the mail to different banks, or to individuals, marked or perforated, "sample."

Philadelphia Brevities

The Girard Trust Company has been selected as trustee by holders of the Central Loan & Steel Company's first mortgage 5 per cent. bonds, succeeding, as trustee, the Harrisburg Trust Company which recently resigned.

No concerted policy has been adopted by the banks and trust companies of this city in regard to the schedule of questions submitted by the Pujo committee. A number of banks and trust companies have answered the questions, some in extenso, others in abbreviated form. Then there are quite a number of banking institutions which have thus far made no replies and take the position that this Congressional committee has no statutory power to demand the information in question.

Thomas M. Scanlan has been elected secretary and treasurer of the Wayne Junction Trust Company,

Basil S. Walsh has been elected a director of the Haddington Title & Trust Company.

June interest disbursements on bonds of railroads and other corporations in this city amounted to $4,419,330. During the six months ending June, the interest payments in Philadelphia aggregated over $31,000,000.

Boston

Special Correspondence

Statutory Safeguards for Trust Companies

In view of the appointment of a special committee of the Trust Company Section, American Bankers' Association, which has been instructed to draft a set of "model trust company laws," it is of interest to direct attention to the excellent and effective character of the laws in Massachusetts governing corporate fiduciaries. The fact that this State has been foremost in providing statutory safeguards of this kind is clearly proven by the very small percentage of trust company failures during the past twenty years, and in truth since trust companies were first organized. In other States the latter development of the trust company movement has been attended by mushroom growths. by extension of functions which cannot be properly classed as belonging to trust companies and by promotions of various characters. Indeed, if any criticism could be made of Massachusetts trust company laws, it might be said that, in some respects, they are ultra-conservative and restrictive. But in regard to the general management, supervision, examination, reserves, etc., the laws are such that they might well serve as models for other States to copy. Massachusetts was the first State to adopt a cash reserve provision for trust companies, and the present reserve requirements are such as to place the trust companies of this State upon a stronger basis than exists in perhaps any other jurisdiction. The trust companies of this city, for example, possess reserve resources which render them more liquid, from the standpoint of assets, than National banks.

While it may be questioned if the laws applying to trust management are designed to make this department either successful or profitable, in view of excessive tax burdens imposed upon trust funds, it may be deemed that from the standpoint of general management and supervision, Massachusetts is in advance of most other States. There is no opportunity for the professional bank or trust company organizer to ply his trade in this State. There can be no cheap hawking about of trust company shares by promoters or establishment of new enterprises where it would inject unwholesome competition. No "trust companies" obtaining "wide-open" charters in Delaware, Maine, or in other States under general incorpora

tion laws, can open offices in Massachusetts and solicit deposits or conduct trust company business. The internal conduct of each established trust company is governed by clearly defined statutory limitations. Independent examinations must be conducted by a committee of the board of directors, in addition to the very rigid examination applied by the State banking department. In time, doubtless, the legislature will also realize the necessity of devising amendments which will afford the trust companies the opportunities now denied them, in securing fiduciary business. In all other respects, however, the Massachusetts laws are model and provide the highest standards which now exist.

Boston as a Convention City

With the approach of the next annual convention of the American Bankers' Association in Detroit, interest attaches to the selection of the convention city in 1913. It is common report among the active spirits in the American Bankers' Association that Boston can secure the designation if the banking fraternity of this city display a "get-together" spirit. Thus far no concerted effort has been made to encourage the Association to regard Boston as the logical and most available convention city for 1913. Unless a co-operative spirit is manifested, it may be stated on good authority, that the convention will go elsewhere.

With but a little missionary work, the selection of Boston for 1913 could be assured. There is the State Bankers' Association, the National Bank Cashiers' Association and the Association of Trust Companies of Massachusetts, through which the necessary preliminaries could be arranged. The outlay on the part of local banks and trust companies for entertainment, etc., would be many times repaid by the valuable connections, renewed interest and appreciation of banking facilities, which such annual conventions signify. These returns may appear to some to be intangible and indefinite in quantity. But Boston bankers owe it to themselves to dispel a certain misapprehension which exists in regard to the provincialism of this city. As a banking and financial center, Boston is making greater strides just now than at any other period. The assembling of many bankers from all sections of the country in 1913 would be a distinct factor in stimulating this development.

Co-operation Among Bank and Trust Company Employees

The article in the June issue of TRUST COMPANIES relative to the pension, profitsharing and savings insurance systems established by banks and trust companies in behalf of employees, emphasizes the excellent work which is being accomplished along these lines by Boston institutions. The pension systems provided for the employees of the New England Trust Company and the National Shawmut Bank have been the di1ect means of creating a spirit of co-operation and unity in action, which is bound to be reflected in the greater growth of these institutions. The "savings fund plan" inaugurated by the Old Colony Trust Company is also an assured success and meets with the hearty support of all employees.

But the managements of the leading banks and trust companies of this city do not confine themselves to pension or mutual savings fund plans in stimulating employees to loyal effort. The management of the American Trust Company, for example, recently tendered a dinner to its employees, including all officers, at which the keynote of the discussion was "Successful Co-operation." President R. G. Fessenden laid down the principles which spell success in trust company management and his utterances met with appreciative response. Vice-President Arthur B. Chapin, former Commissioner of Banking, announced the plans for the summer camp which the American Trust Company has provided for the benefit and recreation of its employees. It is precisely this broad-minded and liberal interest in the personal welfare of employees which is frequently responsible for success in trust company management.

Financial interests have been stirred by the resignation of President Edmund H. Billings and eleven directors of the Paul Revere Trust Company. Never before has there occurred so great a change in the directorate of a large banking institution. The retiring officers claim that their resignations signify nothing more than a change of policy in the company. It is said that there has been no personal feeling in the matter and the move is not made for the intention of merging the Paul Revere Trust Company with other institutions.

The Federal Trust Company, organized six years ago, shows an increase in deposits from $9.954, on November 1, 1906, to $581,600 on May 1, 1912.

State Street Trust Company

The State Street Trust Company is reporting exceptional growth. At the recent annual meeting the following were added to the board of directors: Herbert W. Masar of S. D. Warren & Company; Frederick C. McDuffie, treasurer of York & Everett Mills, and Stanwood G. Wellington of Wellington, Sears & Company.

The policy of the State Street Trust Company is recognized as eminently conservative. The officers are: Moses Williams, chairman of the Board; Allan Forbes, president; Ashton L. Carr, vice-president and treasurer; Frederic J. Stimson, vice-president; Joseph B. Russell, vice-president and Charles F. Allen, secretary. Special attention is given to out-of-town accounts and collections.

Growth of Liberty Trust Company

The Liberty Trust Company of Boston has had a remarkable growth. The company opened for business in September, 1907, with a capital of $200,000, and at the close of business in April, 1912, it had earned a surplus of $176,000, with deposits of over $3,000,000. The officers of the company are: George B. Wason, president; Melvin O. Adams, vice-president; Allan H. Sturges, vice-president and treasurer; William H. Sumner and J. Heney Miley, assistant

treasurers.

Boston Brevities

E. Elmer Foye, vice-president of the Old Colony Trust Company, retired as president of the Massachusetts Bankers' Association at the meeting in Springfield. He has been succeeded by Frank A. Drury of Worcester. Mr. Foye was a capable and energetic leader for the bankers of the State and made a place for himself among the leading financial men.

The Guarantee Trust Company has been granted a charter to establish a trust company in Cambridge. The new company will have a capital of $200,000 and $50,000 surplus.

The Boston Safe Deposit & Trust Company has increased its dividend rate from 14 to 15 per cent. per annum. This indicates the tendency of Boston trust companies toward higher dividend payments, justified by increase in their growth and develop

ment.

Security Trust Company Organized in Gal

veston, Texas

With exceptional prospects and the cooperation of leading financial interests, the organization of the Security Trust Company of Galveston, Texas, has been practically completed. The shareholders have formally approved the plans of the organization committee. Arrangements have also been made for the guarantee of deposits in accordance with the State law, although the company will not conduct an active banking business, but confine itself largely to trust business and negotiation of real estate loans. Organization has been completed without expense and formal opening for business wili take place as soon as necessary formalities have been attended to.

The following officers and board of directors have been elected:

F. G. Pettibone, president; W. S. Keenan, vice-president; Malcolm Graham, secretary and treasurer; and W. L. Moody, Jr., chairman of the board of directors. The board of directors consists of F. G. Pettibone, Galveston; W. L. Moody, Jr., Galveston; Maco Stewart, Galveston; Fred C. Pabst, Galveston; W. S. Keenan, Galveston; Jos. Lobit, Galveston; W. B. Wallis, Galveston; J. C. Womble. Caldwell; Ed. Hall, Bryan; Rhodes S. Baker, Dallas; E. E. Paramore, St. Louis, Mo.; Gust Heye, Galveston; H. Mosle. Galveston; J. H. Keefe, Galveston; W. B. Key, St. Louis, Mo.; J. P. McDonough, Galveston; Dr. William Gammon, Galveston; John W. Hopkins, Galveston; Malcolm Graham, Galveston. The execu

tive committee was appointed to consist of W. L. Moody, Jr., F. G. Pettibone, Fred C. Pabst, W. S. Keenan, J. Lobit, Maco Stewart. The auditing committee consists of W. B. Wallis and John W. Hopkins.

Today and Tomorrow

The Union Trust & Savings Bank of Spokane, Washington, is distributing to its clients and prospective patrons a very ably written pamphlet entitled "Today and Tomorrow." This title is suggested by the quotation "Today we own our property; tomorrow death works a transmission to others." The booklet brings straight home to every reader the moral and economical necessity of making wills which will hold aiter death and of appointing executors or trustees who will faithfully and honestly discharge trusts created under will.

A New Trust Company in Portland, Oregon

Homer N. Tinker, formerly identified with the organization and management of several banks and trust companies in Texas. is the leading promoter of a new trust company enterprise in Portlar d, Oregon. The new institution is to be known as the First Trust Company and will have a capital of $500,000. It is not intended to compete with existing banks and trust companies but will confine itself more strictly to fiduciary business. In order to popularize the enterprise it is announced that a certain amount of stock will be distributed to persons desiring irom one to one hundred shares.