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 14th day of June,
1912:

Trust Companies

A Monthly Magazine devoted to TRUST COMPANY, BANKING and

FINANCIAL Interests of the United States

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

Hol. XV.

August, 1912

Number Two

THE POSSIBILITIES OF CORPORATE ADMINISTRATION OF TRUSTS

T

O any one who is familiar with the methods and increasing influence of trust companies, who is also in position to sense the effect upon the public mind of the many recent instances of defalcations and betrayal of trusts by individuals, the possibilities of corporate administration of estates or execution of wills must be readily recognized. At no time have the court and criminal records offered such abundant and pathetic proof of the dangers which encompass the handling of estates or disposition of trust funds by individuals. Many millions are diverted and squandered thus by the faith placed in irresponsible men by those who pass away and leave their property in the hands of some "trusted" friend or advisor. Many more millions have been lost to rightful heirs by the incompetence, bad judgment and negligence of individual trustees, executors, administrators and guardians.

The lessons conveyed by recent flagrant violations of trust cannot be brought home too forcibly to the father, husband or man of means who fails or refuses to recognize the sacred obligation of taking all proper precautions against death in providing for those who are left behind. It is always the old story of yielding to temptation, of speculation and the lure of big profits. But a short time ago there came exposure of embezzlement of the funds of the late Roscoe Conklin's estate by the trustee. Following closely upon the heels of this revelation came the suicide of an officer in the Pennsylvania National Guard who had wasted $107,000 of estate funds.

Lamentable as these cases may be they nevertheless serve a useful purpose of impressing the public with the perils which attend individual administration of trusts. The question then presents itself as to what trust company managements can do to awaken the public to the superior advantages of corperate administration of trusts. Some trust companies endeavor to solve the problem by issuing literature, by booklets and advertising. But a study of successful trust company management leads to the conclusion that the most effective method is to interpret such management on higher grounds than merely to derive profits and large dividends. Because of its sacred relations with its clients the trust company is more than a money making agency. Adherence to such policy will do more than anything else to convert the public to the trust company cause.

PROTECTING BANKS AND TRUST COMPANIES AGAINST
BURGLARS, PROFESSIONAL FORGERS AND THIEVES

WILLIAM J. BURNS

Of the William. J. Burns National Detective Agency

[EDITOR'S NOTE: The following article has been written for TRUST COMPANIES Magazine by William J. Burns, of the Wm. J. Burns National Detectice Agency, who has contributed more than any other man toward the exposure of municipal graft and of bringing professional criminals to the bar of justice. Mr. Burns brought about the exposure and conviction of the McNamara brothers in the famous Los Angeles dynamite outrage. He unearthed evidence of bribery and rendered effective the campaigns against municipal corruption in San Francisco, Atlantic City and Detroit as well as in the Illinois Central “graft” investigation. More recently he has been called upon to assist in the investigation of the New York police system as the result of the Rosenthal murder. He tells in the following article how banks and trust companies are safeguarded against burglary, forgery and professional crooks.]

T is only within the past two years that the managements of banks and trust companies throughout this country have come to realize the advantages of applying systematic, expert and up-to-date methods in the protection of their institutions against burglars, the safe-blower, the professional forgers and crooks of all kinds. The records will show that prior to the establishment of the present protective features the banking institutions of the country were the favorite prey of the burglar and thief, both professional and amateur. This was due to the fact that the robbing of the bank and the capture of the thief was regarded as purely police work and it was consequently handled that way. But since the William J. Burns National Detective Agency has taken up the protective work for the American Bankers' Association, these crude, ineffective efforts have been supplanted by a system of protection which not only embraces the most modern methods in running down those who prey upon banks but the agencies have been so developed that every city, town and hamlet is covered by the extensive and elaborate machinery of protection, which is not only designed to afford detection of crimes against banks but likewise to prevent them. We not only capture the criminal after he has committed the depredation but we provide every possible safeguard and I am free to say that the banks of the country have adopted our suggestions in the proper spirit and have tendered us their intelligent co-operation. By means of such a comprehensive system of protection the losses due to burglary, forgery or theft have been reduced to a minimum. We made a careful study of the conditions to be met with and evolved methods and devices which are being employed with excellent effect. For example, we acquainted banks with the advantages of a so-called "buzzer system" which we have installed in connection with safe deposit vaults and bank safes. Some of the largest banks in the country are now using this device.

In connection with recovering over a million dollars' worth of valuables stolen from safe deposit boxes we made a special study of the requirements which would guard the treasures placed in safe deposit boxes.

Since the Standing Protective Committee of the American Bankers' Association entrusted the protection of the 13,000 member banks to the William J. Burns National Detective Agency there has been a complete revolution in the system of protecting banks and trust companies. Today the banks throughout the country are recognizing the fact that the American Bankers' Association acted wisely when the officers insisted on securing the very best talent available for the protection of their members. The line of investigation and procedure is clearly defined. On receipt of notification to the Protective Department of the American Bankers' Association, or the nearest office of its detective agents, of an attempt to defraud, or of a successful perpetration of a robbery or fraud upon a member of the Association, an investigation is immediately started and every possible agency is set to work to apprehend the criminal and bring him to justice.

The rules of the Standing Protective Committee require that before an investigation is taken up of an attempted or successful fraud or crime against a member by an offender not an officer or employee of the bank in question, that member must give immediate notification, and once a case is reported to the Association it cannot be taken out of its hands or the offence condoned or compromised. Also a member must agree to swear out a warrant for the criminal as soon as his identity has been established. It is shown by the records of the Protective Department of the American Bankers' Association that professional criminals are confining their operations more and more to individuals, business firms and banks that are not members of the American Bankers' Association. The professional crook realizes that the Protective Department of the American Bankers' Association, through its detective agents, pursues relentlessly any criminal that operates against a member and expense is not spared to effect his arrest and conviction. They appreciate the fact that the chances for escape are very remote when they commit a crime against a member. Consequently, professional criminals are learning to avoid those institutions where the small sign of the “A. B. A.” is displayed. There are many records and instances which I night recite to show that the name of the William J. Burns National Detective Agency acts as a deterrent. The statistics of protective work also show the marked falling off in depredations or attempted frauds against members of the American Bankers Association. The same satisfactory condition does not apply to banks which are not members and are not within its protective system. It is freely admitted that the protective advantages now offered members of the American Bankers' Association is a great factor in encouraging all banking institutions to tecome members. I will cite a single instance of the wholesome influence exerted over the bank criminals in avoiding member banks of the Association.

At Waterville, Kansas, there are three banks. Only one of these is a member of the American Bankers' Association. One night during the past winter burglars blew the safe and robbed the two non-members. The member of the American Bankers' Association felt so strongly that his bank was overlooked because he had the American Bankers' sign displayed, that he wrote a letter to Colonel Fred Farnsworth, Secretary of the Association, giving an account of the robberies and expressing his belief that the American Bankers' Association sign saved his bank.