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ried down to economic ruin. The .wreck living costs, a hopeful ray is afforded by its age would pave the way for an aggressive provision authorizing the Tariff Commission German-Russian alliance, which is not so and the President to apply the principle of remote a probability as some people think elasticity in the adjustment of schedules -a contingency that France above all na and valuation. This year's bountiful crops tions would wish to avoid.

promise an estimated return of $6,600,Harrowing as this picture may seem, 000,000 to the farmers, an increase of it is not overdrawn when we bear in mind $1,250,000,000 over last year's valuation. the fragile structure upon which the Ger Increased steel orders, the buoyancy disman and Austrian governments rest; the played in security and investment markets, stealthy efforts of the Russian Soviet to resumption of textile mills, and numerous spread the doctrine of Bolshevism; the other business barometrics contribute to racial antipathies and jealousies which the brighter setting. Above all there is divide practically all of the newly created the potential strength of our banking sysCentral European states and the sad con tem, with unused borrowing facilities of clusion that Europe, in general, has profited great magnitude. very little from the bitter lessons of the There is one grave flaw in the ointment. last war. The prospect is gloomy, but it Except for the obtuse and blundering attihas not yet reached a stage when the tude of Congress and of the Administration patient fails to respond to proper restor in failing to approve a constructive foreign atives. Nearly four years have passed since the policy, the United States would today be

in a better position than it has ever been to World War came to an end. Today, again capitalize our tremendous surplus resources the cry comes to us across the water, from and productive capacity to incalculable millions of distressed people with their advantage. The best economic and business backs to the wall, who look to America judgment is in agreement that the change with a faith that is pathetic, not because of this country's position from a debtor to this is the strongest and most powerful the leading creditor nation demands a among nations, but because of the great scientific tariff policy which shall invigorate part we played in the war; because our the international circle of trade. The erecleadership, our motives and impartial judg tion of a high Chinese protective tariff wall, ment and moral guidance are not ques which the Fordney-McCumber law creates, tioned. No greater opportunity was ever not only stifles our trade, but renders it thrust upon a nation than is now presented impossible for our foreign debtors to make to the United States to help guide dis payment in the only way that is available, tracted nations and peoples back to poli- namely, by payment in goods and service. tical and economic sanity by taking the With real activity in European factories, vacant seat at the European council table. and populations again resuming work, there

would be absorption of our surplus copper, EFFECT OF NEW TARIFF ON

rubber, agricultural and other raw products. TRADE AND BUSINESS

By enacting the Fordney-McCumber

tariff bill, Congress has made much more T initiative and genuine revival of busi. difficult a reasonable and businesslike ad

ness and industry. The railroad and justment of allied and floating foreign incoal strikes—the most serious obstacles debtedness to the United States. Parhave been practically removed. With ad mentier, the French delegate, has made journment of Congress the country gains a clear to the Refunding Commission how respite from stupid legislative interference. impossible it is for years to come to expect Thanks to the courage of our Executive, the France to pay any interest, much less any soldiers' bonus bill, which would have part of the principal of the French debt. added $4,000,000,000 to the national debt, England, which is sending over a debt has been rejected. The new Fordney funding delegation headed by Sir Horne, McCumber tariff law went into effect Sep Chancellor of the Exechequer, is the only temter 22nd, and although threatening to country that has been able to make prorestrict foreign trade and encourage higher vision for beginning interest payment.

GROWTH OF THE STATE BANK

ING SYSTEM
I striking proof of banking stability

during the period of unprecedented post-war liquidation and deflation, are shown in a table of the aggregate resources of all state banking institutions and trust companies in the United States compiled by Secretary R. N. Sims of the National Association of Supervisors of State Banks. This compilation is generally accepted as the most complete and reliable summary of resources and liabilities held by banks and trust companies operating under state jurisdictions. Figures for national banks are also appended, by way of comparison, as of March 10th, 1922, while the summary of state bank and trust company returns is based upon reports rendered on approximately corresponding dates.

The tabulation shows there are 30,499 banks in operation in the United States, of which 22,302 are under state charter and 8,197 are national banks. The combined resources of national and state banks aggre

Mrs. WARREN G. HARDING gated on March 10th, 1922, to $48,658,000,

"First lady of the land," who is recovering from 000 and deposits $38,901,000,000 with capital, surplus and undivided profits of $6,534,000,000. From June 30th, 1920, to March cent in deposits of all banks between June 10, 1922, state banks increased 379 in num- 30, 1920, and March 10, 1922, and a shrinkber and national banks 167. Total resources age in state banks of only one and fourof state banks and trust companies aggre- tenths per cent. The highest point reached gated $28,808,000,000 while those of na in combined banking power of national and tional banks totalled $19,850,000,000, show state banks was that recorded in the stateing state bank resources 45 per cent in ments of June 30, 1920, when the total excess of national banks. Combined de reached $51,388,192,000. The total for posits of state banks amounted to $23,510,- last year was $49,720,308,000. How re000,000 as compared with $15,390,000,000 markably banking resources have increased deposits of the national banks, giving state in this country since the beginning of the banks 52 per cent in excess of national war is evident from the fact that June 30, banks. Capital, surplus and undivided 1914, the Comptroller of the Currency reprofits of state banks amounted to $3,700,- ported aggregate state and national bank 000,000 and of national banks $2,834,000, resources at $26,971,000,000. 000, giving state banks an excess of 30 per These figures and comparisons emphasize cent over national banks.

that national and state banks are performAlthough state banks and trust compan- ing equally useful and necessary functions ies show considerably larger resources, de- in the economic and financial life of the posit and capitalization, the national banks nation. The best service which legislatures, have made relative gains in these various therefore, can render to the American people items during the period under review. and the banking fraternity is to avoid Both national and state banks withstood legislation that would be discriminatory or the enormous liquidation in business fol- impede the natural growth of either one or lowing the inflation period, the aggregate the other divisions of banking. figures showing a shrinkage of only 5 per

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a grave illness

RECORD OF CONGRESS AND of agricultural interests. A fleet of mercanHARDING ADMINISTRATION

tile ships, costing $3,500,000,000 lies practiT HE session of Congress which has just cally idle because of failure to enact ship

come to a close displayed lamentable ping legislation.

lack of legislative and economic in The one outstanding achievement of the telligence. The record of broken pledges, Republican Congress is the enactment of of political chicanery, supine leadership and the national budget system. The credit neglected opportunity, which has charac- for its effective operation must be given to terized the law-making body at Washing- President Harding in supporting the vigorton, must make even the most uncom- ous changes in administrative economies promising Republican feel ashamed of the introduced by former Director Charles G. low estate to which his party has fallen. Dawes. Notwithstanding these economies Practically the whole session was consumed and the reduction of government expendiin debating a tariff bill which is offensive tures from $6,560,000,000 during the fiscal to common sense and attempting to pass year 1920 to $3,795,302,000 for the fiscal bonus legislation.

year of 1922, the current year's Treasury The country still waits in vain for relief operations threaten to leave a deficit of from the crushing weight of war-time taxes $650,000,000. which diverts capital from productive Despite the shortcomings of Congress channels into hiding or into tax-exempt the electorate must recognize and appreciate securities, thus encouraging public ex- the wisdom and ability with which Presitravagance. Instead of responding to sound dent Harding and his Cabinet have adleadership, Congress resolved itself into ministered the executive affairs of the “blocs” in support of class legislation. country. The total gross debt of the nation The "dirt farmer" bill added another mem- has been reduced almost three billions since ber to the Federal Reserve Board for no May, 1919. To the great credit of the Harother reason than to subordinate the re- ding Administration there is also the Arms sources of the credit system to the demands Limitation Conference.

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FIRST MEETING OF AMERICAN CONSULS GENERAL, AT LARGE To improve our consular administrative work a conference of Consuls General, at large, was conducted recently

at the State Department, presided over by Secretary of State Hughes

TEXT BOOK ON TRUST PRACTICE the refunding or crediting of any Internal

JEMAND for a text book dealing ex- Revenue tax alleged to have been errone

cedure has become more widespread to the Commissioner of Internal Revenue in view of the rapid increase in number of within four years after payment of such tax. trust departments conducted by trust companies and banks as well as the need of CRUX OF BRANCH BANKING securing trained men for fiduciary work.

CONTROVERSY The lack of a text book, suitable for bank IN the final analysis the controversy employees or students , was emphasized in I

over branch banking is a question the discussions at the recent Conference on

which not only Congress but also the Trust Functions held in connection with state legislatures must decide. No question the annual convention of the American

of constitutional law is involved. It is Institute of Banking. It was decided to within the power of Congress as well as communicate with the Educational Com of the state legislatures to decide whether mittee of the Institute and to urge the prep the principle of branch banking is to be aration of a course on Trust Practice and approved or rejected. If Congress and Procedure for use of Chapters.

the state assemblies are governed by votes 'Trust COMPANIES Magazine has also

there is no question but that they would received numerous inquiries from colleges rule against branch banking. If they are and universities in regard to available text governed by expert banking opinion as to books for students desiring to take up the

economy of management and safety—that practical study of corporate and individual

is a question which can only be decided by
trusts dealing with the law as well as pro- experience.
cedure. A number of colleges have estab Those opposed to branch banking tell us
lished special courses on trusts and, the that experience in Canada and in Europe,
interest of students is growing.

where branch banking is legalized, proves
that the independent banking system is

five times safer than branch banking. They
ESTATE TAX CLAIMS present statistics to support their claim.

If these statistics are true there is but one TRUST companies are interested in

Service to the public and the Trulings of the Treasury Department safety of the depositor is, after all, the fore

which make it necessary for tax most consideration. payers who are entitled to a resund of estate Since the First National Bank of St. taxes to make formal claims therefor. Louis "started the rumpus”—to quote the Decisions of the United States Supreme words of Comptroller Crissinger-national Court in the cases of Union Trust Company banks have opened or announce the opening et al., executors, vs. Wardell, Collector, and

of branches in nearly all of the important Shwab, executor, vs. Doyle, Collector, dis large cities in the United States. The cussed conditions under which refunds Comptroller of the Currency has granted would be due if estate taxes. A state

applicatior.s consistent with his announcement was published at that time that it ment that he would grant such permission would not be necessary to file claims for in every one of the 22 states in the Union refunds under those decisions, but this does which allow branch banking. The fact, not seem to be the rule under existing however, that the First National Bank of regulations.

St. Louis took matters in its own hands, in Formal claim should be made on form 843

a state which strictly forbids branch bankand should be filed with the Collector for ing, places the advocates of branch banking the district wherein the tax was paid for on the defensive. The decision at the forthtransmittal to the officer of the Commis- coming annual convention of the American sioner of Internal Revenue. Section 3228, Bankers Association-if any is arrived atRevised Statutes of the United States, as

will help a great deal to determine the issue amended by Section 1316 of the Revenue in principle if not in law. Act of 1921, provides that all claims for

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PROBATE RECORDS—A RICH FIELD FOR TRUST

COMPANY RESEARCH WORK
WHERE PROOF OF THE SUPERIOR SERVICES OF TRUST COMPANY

ADMINISTRATION IS OBTAINED

L. H. ROSEBERRY
Vice-President, Security Trust and Savings Bank of Los Angeles, California, and Chairman

Committee on Research Work of the Trust Company Division, A. B. A.

T

(EDITOR'S NOTE: The recent appointment of a special Committee on Research Work by the Trust Company Division of the American Bankers' Association, opens up a fertile field for intensive and systematic study of probate court records to actually show the results of fiduciary administration as conducted by trust companies and by individual fiduciaries. The writer of the following article is chairman of this committee and he touches upon the remarkable results already obtained by independent coamination of probate court records as indicative of what may be accomplished by a national survey in substantiating the excellence of trust company management of estates and trusts as contrasted with the inevitable handicaps and dangers that attend individual administration.)

HE proof of a claim is not only 'more coming from its search. While it may be interesting, but laden with far more true that the "living" or "voluntary" trust

fruit than the claim itself. At least archives of the American trust companies a portion of the more or less interested spec contain a veritable gold mine of material tators of trust company development and service have doubtless become somewhat calloused, if not skeptical of the oft-repeated claims of the superiority of trust company service over like service performed by individuals. Intelligent customers who have dealt with these companies know, through experience, that this is true, but do the vast body of prospective customers? Trust officers themselves have keenly felt the lack of positive knowledge of facts relating to many of the phases of their business.

The time has arrived for some constructive help in searching out and presenting in simple and intelligent form some of the facts which the public and the trust companies themselves are entitled to know in their field of operations. This subconscious demand is beginning to rise to the surface, and has prompted the Executive Committee of the Trust Company Section of the American Bankers' Association to appoint a special eommittee to conduct a preliminary survey of the feasibility of establishing a permanent bureau of research and statistics. The undertaking will be both constructive and interesting and in a field of investigation which promises to be most fruitful. Alert trust men all over the country will

L. H. ROSEBERRY watch the work of this committee with keen interest and faith in the benefits ultimately

Vice-President, Security Trust & Savings Bank of Los

Argeles, Cal.

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