Old Colony Trust Company Appointed

Trustee

One of the most important trust company appointments on record in this city was the naming of the Old Colony Trust Company as co-trustee under the will of the late Sidney Wilmot Winslow, president of the United Shoe Machinery Company. Mr. Winslow was one of the leading figures in local business and manufacturing circles. He was a director in numerous financial corporations including the Old Colony Trust Company and the First National Bank.

The Old Colony Trust Company is named as one of the trustees, co-operating with two individual trustees, under the will of the late Mr. Winslow leaving an estate aggregating $1,500,000 in real estate and personal property in trust to the children of the deceased. The trust provides that the income goes to the children for a fixed period and the principal is then divided among them. The original will provided for the disposal of $2,500,000 by creation of a trust, but a codicil reduces the amount to $1,500,000.

Governor McCall has appointed a special commission to examine and count the money actually in the vaults of banks in accordance with section 3 of chapter 115 of the revised laws, which provides that no bank shall go into operation until one-half of its capital stock has been paid in gold and silver money, and is in its vaults.

The Norwood National Bank of Norwood, Mass., has been liquidated and its business taken over by the newly chartered Norwood Trust Company.

Excellent Statement by Boston Safe Deposit and Trust Company

In response to the call of the Bank Commissioner for financial statements under date of June 20th the Boston Safe Deposit & Trust Company reported total deposits of $15,375,492 with capital of $1,000,000, surplus fund, $2,000,000 and undivided profits of $1,354,887. Assets aggregate, exclusive of the trust department, $19,730,680 demand and time loans of $14,834,056; cash, $1,256,387; due from Reserve banks, $1,654,444; due from other banks, $56,719; real estate, $1,734,649 and bonds and stock at market value $58,350.

Directors of the Boston Safe Deposit & Trust Company, at their last regular meeting declared an extra $10 a share dividend, in addition to the regular semi-annual 8 per cent. dividend.

Chicago

Special Correspondence

First Real Test for Federal Reserve System Members of the Federal Reserve Board have no further occasion to complain that bankers are holding themselves aloof from the Federal Reserve banks and that they regard the system as an expensive luxury, born of impractical minds, which may be utilized only in time of emergency. The financing of Government war obligations has had the effect of setting the machinery of the Federal Reserve Bank of Chicago in motion as never before and that is most probably true of every one of the twelve Federal Reserve power stations. In fact the system has now become a vital, essential part of daily banking routine, providing ready accommodation when banks are pressed for funds and supplying new sources of credit at a time when such assurance becomes a prime necessity. Instead of criticism one now hears only commendation and the statement that finally, under the spur of extraordinary war-time requirements, the Federal Reserve system is now actually getting into its first real stride.

It is generally conceded that the banks of this city and of the whole country for that matter would have been hard put to it during the past month or six weeks but for the facilities and co-ordination provided by the Federal Reserve banks. The marketing of the 32 per cent. Liberty bonds would have proven a serious task indeed but for the devices created by means of which banks are enabled to convert their investments in Government obligations in their own behalf and for their customers into liquid credit. Although the appeal for Liberty bond subscriptions was focussed upon the individual investor the success of the loan would have been impossible without the aid and support of banks and trust companies. Super-imposed upon this burden were the heavy payments for semi-annual interest and dividend accounts, Red Cross contributions, paying off of corporate and note maturities as well as large transfers to the sub-Treasuries on account of income tax payments.

Rediscounting at the Federal Reserve bank, which had been heretofore conducted on a comparatively insignificant scale and as a matter of gratuitous co-operation, has now become recognized as a regular and valuable function judging. from the marked increase of bills discounted and "bills on hand" reported by the various Federal Reserve banks since the first week in June. Even the small country bankers who seemed mortally afraid of availing themselves of the rediscounting privilege have been emboldened to send their paper to the Federal Re

serve agents. Even the present encumbent of the office of the Comptroller of the Currency appears less dictatorial, due perhaps to the fact that he has ceased to send forth daily "edicts" and annoying, unnecessary demands. The patriotic impulse may have had considerable to do with this big change in the attitude of the bankers but it cannot be denied that the facilities and functions of the Federal Reserve banks now loom up as something more real and serviceable than before war was declared against Germany and this country pledged itself to dedicate its manhood, as well as its industrial and financial forces, for the conduct of colossal warfare.

afforded.

Joining the Federal Reserve System

A number of the important trust companies and State banks of Chicago are preparing to take advantage of the privilege of becoming members of the Federal Reserve system. Boards of directors in a number of instances have voted in favor of giving the officers of their institutions authority to make application for membership. Following the passage of the amendments to the Federal Reserve Act liberalizing and laying down clearly the requirements governing State institutions the Merchants Loan & Trust Company, the oldest trust company in this city, has filed its application and the Union Trust Company is expected to follow shortly.

The advantages of membership to the large trust companies and State banks have been accentuated by the processes in connection with war financing and the fact that State institutions would be at a serious disadvantage as compared with member banks in accommodating their patrons without having recourse to rediscounting operations. At the same time it is recognized that the laws of Illinois should be broadened so as to confer upon trust companies the same privileges, particularly in dealing in domestic and foreign acceptances, which are accorded to National banks.

Trust Powers and National Banks

Nearly all of the large National banks of Chicago conduct "trust company" auxiliaries and the recent decision of the United States Supreme Court regarding Congressional grant of trust powers to National banks will therefore create no appreciable change in the local situation. National banks will continue to operate such trust companies and savings banks instead of cancelling State charters and combining all banking and fiduciary functions in their Federal charters.

The United States Supreme Court decision will have the effect of removing the injunction against exercise of trust powers by National banks in Illinois. It will be recalled that the Supreme Court of this State was the first to hand down a decision to the effect that such exercise of fiduciary powers by a National bank would be in contravention of State law and likewise on the ground that Section 11 (k), was interpreted as unconstitutional. The Illinois

law permits trust companies to engage in banking business and the decision of the United States Supreme Court holds that where such dual powers are granted to a State institution they cannot be withheld from a National bank as a Federal or "foreign" chartered corporation.

Preparing for the Next War Loan Chicago bankers believe that the next Government war loan will not entail so strenuous a campaign and effort as the initial $2,000,000,000 offering. Commenting on the subject Mr. E. D. Hulbert, president of the Merchants Loan and Trust Company of this city is quoted as saying:

"The next loan will be taken more eagerly and more generally. We have found our investment stride. The bond market otherwise is likely to remain dull while the Government financing is worked out. The effect is naturally depressing to mortgage issues, but I do not look for any further appreciable recession in values. It is natural to expect that the amount of the third Government issue, and its terms, will depend a good deal upon the reception of the second."

Mr. Hulbert also pays a high tribute to the leading part played by New York in piling up a huge total of Liberty Loan subscriptions. He

says:

"I cannot speak too highly of the part New York took in this matter. I have never seen any work done more unselfishly than the New York bankers performed this duty. Of course, the bankers and bond men elsewhere did their part, with few exceptions, or they stood ready to do whatever was required to the extent that they understood their respective duties, but New York set the pace with a magnificent patriotism, of the discerning and achieving sort."

Governor Lowden has affixed his signature to the bill which provides for incorporation and effective supervision of private banks in Illinois. The bill must first be adopted by a referendum vote of the people at the November elections in 1918, and if approved it will become effective January 1, 1921.

The bond department of the Continental & Commercial Trust & Savings Bank of Chicago is offering to investors an issue of $6,000,000 Mark Manufacturing Company three year 6 per cent. secured gold notes at 99%, yielding 6.20 per cent.

SEYMOUR H. HOFF, Ass't Cashier FRANK P. KENNISON, Trust Officer

Merchants Loan and Trust Reports Deposit Gains

As compared with the previous March returns the latest official statement of the Merchants Loan & Trust Company of Chicago as of June 21st shows an increase in deposits during that period from $90,365,669 to $92,342,907 with an increase in combined resources of $103,524,390 to $106,953,753. The resources embrace loans and discounts of $55,630,449; customers' liability under letters of credit, $2,817,051; United States bonds, $2,477,850; other bonds and mortgages, $12,929,010; due from banks and bankers, $22,846,341; cash and checks for Clearing House, $10,253,050. Capital stock is $3,000,000; surplus, $8,000,000, and undivided profits, $661,247.

Official Reports of the First National and First Trust

The immense volume of business handled by the First National Bank of Chicago and the allied First Trust and Savings Bank is indiIcated by the combined deposits of both banks aggregating $248,707,030. The First National has deposits of $165,247,589 with paid-in capital of $10,000,000; surplus fund of $10,000,000; other undivided profits of $3,037,843 and total resources of $195,705,718. The cash resources of the First National amount to $58,565,884 with loans and discounts of $114,865,152.

The First Trust and Savings Bank reports time and demand deposits of $83,459,440, capital $5,000,000; surplus and undivided profits, $5,784,094. Total resources of $94,333,394 include bonds, $32,714,348; time loans on collateral, $26,441,661; demand loans on collateral, $19,466,554; cash and due from banks, $15,710,

829.

Deposits in the Central Trust Company of Illinois at the commencement of business June 21st aggregated $53,563,325, and capital, surplus and profits totaled $8,872,114, of which $1,872,114 represents undivided profits. The com

pany's resources total $62,701,235.

Steady Growth of Union Trust Company

of Chicago

A comparative table of the deposits of the Union Trust Company of Chcago reveals an almost unbroken record of annual gains during that period. The June 21st statement shows deposits of $35,205,898 which represents an increase of over one million since the first of this year and a gain of nearly six millions as compared with January 1, 1916. The Union Trust Company, in addition to capital of $1,500,000 has a million and a half surplus, all earned and undivided earnings of $247,516. Resources aggregate $38,553,415 including loans and discounts of $21,864,749; cash on hand and due from banks and bankers, $13,495,180; municipal and other bonds and stocks, $3,189,523. The Union Trust Company has experienced special success in developing its business as the socalled "Bill of lading bank of Chicago."

Northern Trust Company Statement In response to the latest call for financial statements the Northern Trust Company of Chicago reports under date of June 21st total deposits of $33,519,984, consisting of $17,860,108 demand deposits and $15,659,875 time deposits. Capital stock is $2,000,000; surplus fund $2,000,000, and undivided profits $1,097,280. Com

bined resources are $39,020,422 with time loans on security of $7,338,187; demand loans on security, $10,854,768; other loans and discounts, $3,121,244; bonds and stocks, $5,692,141, and cash resources of $10,603,521.

Substantial Deposit Gain by Chicago

Savings and Trust Company

During the period from January 1 to June 21, 1917 the deposits of the Chicago Savings Bank and Trust Company increased over three millions from $10,291,644 to $13,375,091, representing a gain of over five millions since January 1, 1916. Resources total $14,981,917 including cash and due from banks, $5,010,701; time loans, $1,433,450; demand loans, $887,288; loans and discounts, $4,838,248; bonds and securities, $1,970,222. Capital stock is $1,000,000; surplus and undivided profits (net) $325,314.

John A. Lynch, president of the National Bank of the Republic, has been elected president of the Chicago Clearing House Association to fill the vacancy caused by the resignation of Charles G. Dawes, president of the Central Trust Company of Illinois, who has accepted a commission as major of the Seventh Regiment of the United States Reserve Engineer Corps, which is now being recruited at Atlanta for service in France.

Corrected by F. M. Zeiler & Co.

1,980,000 144 128 132 4,113,000 138 210 220 39,805,000 254 270 280 6,065,000 163 270 280 10,350,000 164 280 285 3,935,000 250 225 250 2,334,000 133 160 170 8,436,000 151 160 165 33,309,000 346 415 425 1,528,000 145 145 155 35,205,000 216 300 5,271,000 146 300 325 2,618,000 197 240

88,833 197,029

3,084,681

301,077

322,038

359,305

68,646 515,176

3,688,279

93,072

1,740,680

162,345

193,907