Imágenes de páginas



President,yWachovia Bank and Trust Company, Winston-Salem, North Carolina

(EDITOR'S NOTE: The importance which Col. Fries attaches, in the following article, t efficiency of administration and observance of the highest ideals in fiduciary management cannot be too strongly impressed upon the trust company fraternity, and upon banks ichich exercise trust powers. The responsibilities and possibilities inherent in trust business calls for qualifications of exceptional type and for a spirit that acknowledges the superior claim of service rather than profit.) To the Editor of Trust COMPANIES :

made, property can be so devised that it HAVE seen Monticello today, the famous

will safeguard to others the advantages home of Thomas Jefferson, and have vis

which the testator or benefactor has enited the great university which he was

joyed or wishes others to enjoy. He can instrumental in founding. My thoughts

even provide for the conduct of his business

after he can no longer attend to it himself, linger upon these evidences of President Jefferson's superior culture and remarkable

and there are many instances where the foresight. Thorough and higher education was to his mind the safeguard of the new republic's future and it must be the source and inspiration for the development of the many higher ideals that have become a part of the nation's development since his day.

As I ponder over these things I am reminded of my promise to write for you an article on "The Trust Company.In the light of present day conditions and the knowledge of the many developments that have taken place under our Constitution, which Mr. Jefferson wrote, declaring the inalienable rights of man, the trust company occupies a unique and important place. It is the instrument through which is perpetuated to others the rights he refers to and our forefathers secured for us. Through it the individual can work on after he has passed away and by will or created trust can direct how the fruits of his efforts can be made a blessing to those who may follow after him, building perhaps upon the very foundations laid by Ur. Jefferson in adding to the endowment of the University, which stands as a lasting monument to his memory.

In contemplation of law the trust company is a legal person or entity clothed with special powers to act for persons or corporations in matters where they cannot or do not wish to act for themselves. Through be


President, Wachovia Bank and Trust Company of quests or trusts, carefully or specifically

Winston-Salem, N. C.


change has been most satisfactory and bene tant trust wants able, efficient and unselfisn ficial.

service in the administration of his affairs Exacting Qualifications

and is willing to pay for such service, he is The executor or trustee must be qualified

even suspicious of those who cut their fees in every way to fulfill the responsible posi

for the sake of securing business. tions that may be contemplated ; few individ

The testator and the trust company both uals are but every trust company should

want a legal will or instrument ably conmeasure up to the most exacting require

ceived and carefully drawn, so that both will ments. The trust company is designed espe

know and appreciate what is wanted and so cially to meet these demands and should be

safeguarded that no subsequent legal quesqualified in every way for the service which

tions can arise. Neither the testator nor the is growing in importance and exactitude

trust company should draw the actual paper,

but after full consideration and agreement each year. The highest type of service is essential, in ability, legal knowledge, in busi

as to what is wanted or necessary each

should submit it to counsel for proper prepaness acumen and experience, in character

ration. If the real interests are appreciated above reproach, in financial responsibility to meet every need and in devotion to the

there will be no question as to the ethics best interest of the trust down to the small

about writing the will, for both parties will

need and require the services of a lawyer. est detail.

These ideals are not too high, they are Capable Administration the Essence of attainable and should be reached. What

Success troubles the mind of conscientious trust com The administration of an estate or trast pany officials is the consciousness that so few is quite a different matter from the settletake these ideals 'seriously. The difficulties ment of an estate. Any one, even an inexlie largely in the efforts of trust companies perienced wife, can settle an estate, but to and banks to obtain profits and growth properly administer an estate requires skill rather than superior service, when service is and ability. To conserve the best interests the real thing, in fact almost the only thing of heirs and beneficiaries a trust company the trust company has to offer its patrons. is almost a necessity; one large enough to

protect the estate by needful advances or Measuring Up to Requirements

payments, with a correct accounting departIt is difficult to understand how National ment, under a trust officer of known ability banks can expect to fulfill these ideals with and experience, and carefully supervised to simply a Trust Department as an adjunct to assure safe investments. their banking business. It is equally diffi How can such a trust company be found? cult to imagine how a small institution of

"By their fruit shall ye know them." any kind can hope to successfully handle the The trust company that handled success, large and rapidly growing estates and trusts fully the difficulties that are present in most of the present day, to say nothing of the estates and shows by its able administration future. The larger trust companies are con of estates that it can meet all requirements scious of the fact that they cannot do all naturally reveals to thoughtful men the kind lines of fiduciary business under one and of service it can render and that character the same charter; they are dividing their of executor, administrator, trustee or agent business into separate companies, the trust it will be for others. business is left with the trust company pure

Ethics of Publicity and Advertising and simple, a bank is organized to do banking and a security company created for the

The question still remains as

to proper purpose of handling investments and securi advertising and the ethics of setting forth in tie, all closely allied, yet distinctly sepa cold type the appeal for patronage. Truthful rated.

advertising is in keeping with good service

and no institution should be barred from Real Trust Company of the Future

stating facts or calling public attention to The real trust company of the future will the character of their business, or referring be an institution of this character, and when to what has been done by them. The quesproperly functioning will be sought after by tion is doubtful only when the nature of the thoughtful business men for the administra advertisement makes it so-extravagant tion of their affairs, and with its develop statements, unfair and untrue comparisons ment will disappear the often discussed ques or reflections, offering to write wills with. tions of commissions and legal service. The out charge or consultations of a legal charthoughtful business man creating an impor acter without consideration.

Satisfied patrons become the best advertisement possible.

Many questions now being agitated by trust company officials or banks trying to build trust departments would be minimized if the trust company idea permeated the work or dominated their policy.

Public Enlightenment Seeing the conditions and appreciating the difficulties and dangers we naturally turn to the cultivation of higher ideals as the remedy. Like Mr. Jefferson we think that better education is the safeguard of the future. The trust company was formed for a purpose and has developed marvelously in recent years and has a high destiny to fulfill. Institutions of higher education can do 'a most excellent work by teaching the true functions of each class of financial institution and presenting the lofty ideals that surround the trust company and its peculiar field.

In some States the differentiation is a matter of legal enactment and this in a measure controls the respective business done by each class of fiduciary institution. It may be necessary ultimately to handle this question by legislation, but if it can come about by gradually inculcating higher ideals and better service it would be better, for in this way the springs are made pure and the waters flowing from them must be sweet.

Referring again to the University of Virginia the thought persists, that if the trust company, and what it does and should do, were made a part of the course of study there and in the other universities, it would be a great thing for the institutions themselves, and it would be a blessing to the States in which they are located and in which they are destined to do such noble and necessary work.

SUCCESSFUL RECORD OF TRUST COMPANIES OF CANADA A compilation of the individual state Royal Trust

172,949,581 189,671,802 ments of forty-three trust companies operat Stan. Trust

12,244,615 13,134,100 ing in the various provinces of Canada Tor. Gen'l

100,248,237 107,596,746 shows aggregate assets of $576,869,000 at Tr. & Guar.

16,383,751 17,734,258 the close of the last year. This total is ex Union Trust

6,432,505 6,430,324 clusive of the assets of the Montreal Trust Western Trust

7,862,390 7,168,094 Company which includes in its total estates and trust assets the amount of bond issues Totals

$448,104,000 $489,522,000 under which it acts as trustee. The statements reveal marked growth during the past

It will be seen from the above table that year, particularly of the senior trust com

the largest volume of estates and trusts is panies which have built up a reputation for

reported by the Royal Trust Company of efficient administration of estates and execu

Montreal with a total of $189,671,000. Next tion of trusts.

comes the Toronto General Trusts CorporaThe following table gives a comparison of

tion with $107,596,000. Then follows the Nacapital and guaranteed accounts of all trust

tional Trust Company of Toronto with $93,companies for 1920 and 1921 :

400,000; then the Eastern Trust Company

of Halifax with $27,919,000; the Northern 1920

1921 Capital paid up.

Trusts Company of Winnipeg with $17,067,-$23,070,107 $25,401,185

000; the Trusts and Guarantee Company of Reserve 11,148,461 11,776,371

Toronto with $17,734,000 and the Standard Capital assets 44,757,458 49,109,331 Guaranteed acc'nts. 42,463,926

Trusts Company of Winnipeg with $13,134,40,380,427

000. Most of the trust companies also reThe following table shows the aggregate

port larger net profits during 1921 as comestate and trust assets, exclusive of business

pared with the previous year. held as trustees under bond issues, of trust companies having paid-up capital of $1,000,000 or over, exclusive of Montreal Trust GUARANTY TRUST CO. OF NEW YORK Company:

: . The condensed statement of the Guaranty Estates, Trusts, Etc.

Trust Company of New York as of June 1920


30th, shows deposits of $517,642,055.12, as Can. Perm.

$1,914,690 $2,786,612 compared with $479,148,463.76 on March Can. Trust

5,064,237 6,613,613 10th, the date of the last published stateEast. Trust

24,298,424 27,919,146 ment. Total resources of the company show Nat'l Trust

84,726,290 93,400,117 an increase from $575,513,679.39 to $630,351,North. Trust

15,979,709 17,067,100 351.92 over the same period.


New Business Department, Continental and Commercial Trust and Savings Bank of Chicago



(EDITOR'S NOTE: The following is an address delivered recently before the Financial Advertisers' Association convention in Milwaukee, and discusses the subject of cultivating sound and harmonious relations between trust companies and lawyers in regard to "legal practice" from the standpoint of the publicity manager.) ECAUSE trust companies think, that 100 years—not so long as lawyers—and in

lawyers control and can direct more the last 18 years, their growth has been phetrust business than any other single

nomenal. We now have approximately 2,400 agency, they regard the lawyers' attitude trust companies, with resources representing toward them of vast importance, It seems over 30 per cent. of the banking power of that trust companies have always approached

this nation and doing billions of trust busithis subject of “Wills and Lawyers” in an attitude of mind as though the lawyer had We have armies of lawyers, mostly with them licked at the very outset. They have no resources, doing all the business they can assumed that it is the lawyers' inalienable -amount not recorded. right to draw wills. They have invested the That trust companies have made heavy inlegal profession with rights, privileges and roads into the administrative work of the powers to such a degree that the lawyers in turn have given trust companies consider. able trouble and worry. The problem, therefore, is to that extent a problem of the trust companies' own creation.

Now it is bad policy to antagonize the lawyers. It is bad policy to have them as active enemies and only less bad to have them as passive enemies. It is good policy to bring about, if possible, a feeling of friendliness and co-operation between them and the trust companies.

The advertising manager is a "repairer of , the breach.” It is his job to prevent new outbreaks of war and mitigate their severity. He must be instigator and peacemaker, diplomat and harmony promoter. But he must not surrender one jot or tittle of his company's. position. Hence discussion of "Wills and Lawyers."

Regarded as a Divine Right Lawyers of some kind and in some form, have existed for a long, long time. They have been accustomed to doing the legal work in regard to wills and trusts. They haye also been accustomed to doing the administrative work connected therewith-so long that they have come to look upon it as their divine right.

SAMUEL WITTING Trust companies have existed for about

Continental & Commercial Trust & Savings Bank, Chicago



lawyers is freely admitted, but this is not certain things which in the past were gen. the first invasion into what the lawyers have erally considered to be wholly within the regarded as their private territory.

province of the lawyer. This state of facts Fifty years ago we had the complicated led to the prosecution i and acquittal of a fields of substantive law, such as negotiable New York corporation. In this case, "People instruments, sales of personal property, bills 18. Title Guarantee and Trust Company," of lading, etc. Most of these complexities the facts are typical of what is being done have now all be ironed out and simplified by by most title and trust companies today. In the codifier for the layman. Fifty years ago the ordinary course of business, the comthe examination of titles to real estate was pany drew a bill of sale and a chattel mortalmost exclusively done by lawyers. Today gage. it is largely performed by title and trust New York has a penal statute which in. companies.

hibits corporations from practicing law or Corporations which have sprung up, de rendering legal services of any kind. One veloped and expanded during the past 50 of the arguments of the prosecution was years, have installed their own legal de- that the drafting of a bill of sale and a partments, which do practically all the legal chattel mortgage, together with the advice work and draft all papers incidental to the which necessarily had to be given as to the corporation's business.

filing of these instruments, was practicing

law because it was work usually done by the Economic and Social Changes

lawyers. Custom ruled in the Trial Court Due to the development of the trust companies in the last half century, the settle

and in the Supreme Court, but not in the

Court of Appeals. The Title and Trust Comment of estates has emerged from an expen

pany was acquitted. sive and unbusinesslike situation to something approaching at least a well ordered

Chief Justice Hiscock, of the Court of Ap

peals in rendering his decision, said, “In this method. All of these changes and many

inquiry, I do not regard it as decisive that others have diminished the income of the

an act is one which is commonly performed lawyer from these sources; hence his hos

by an attorney. That might be a matter of tility. But progress in business demands improved business methods and the lawyer has

habit or convenience. The inquiry is rather,

whether it is one which might be lawfully proven himself to be a notoriously poor busi

performed by a layman. This is to be deness man,

cided by the nature of the act and not the Almost every labor-saving invention and

identity of the individual who most fre: improved method of distribution has met

quently performs it." with opposition, but society has soon settled and adapted itself to new conditions, and in Broad Interpretation of Legal Service each of the foregoing cases, the lawyers have Legal history shows that the notary pubbeen compelled to have recourse to more lic in England, who never was admitted to profitable and specialized services of their the Bar, was allowed to prepare deeds, draw profession.

wills and other papers relating to real and As society is developing toward higher personal property. In fact, during the early standards of service in all lines, the lawyers days of the legal profession the advocate are discovering that originally they took never did the work of the conveyancer. The in too much territory. They have claimed preparation and execution of instruments to too much ground for the legitimate field of alienate land was not open to attorneys and their professional services, and the develop solicitors in London until 1760. The Scriv. ment of almost every institution during the eners Company had a strict monopoly on all past 50 years has lopped off some of the ter this business, and not until that year were ritory which they originally claimed, and in the members of the legal profession given this way, the Bar also is being helped to be the right also to draw such instruments. come a specialized profession.

Stronger than this historical proof that All of these economic and social changes, the drafting of these instruments is not the or inroads into the field of professional serv exclusive privilege of the legal profession is lees, as the lawyer regards them, evoked, as the fact that in the New York case just much hostility from the Bar as trust com cited, which, by the way, was decided in panies do at the present time.

1919, the court took judicial notice of the Before we had trust companies, the indi practice bylaymen who had been accusvidual title examiner or trustee was usually tomed to draw such instruments for their a lawyer, and it logically follows that the friends and neighbors, not only as a matter title and trust companies are today doing of accommodation, but for pay.

« AnteriorContinuar »