son, and who rendered invaluable work at the economic conference in Paris following the signing of the Armistice. Under Mr. Davis' administration the Trust Company of Cuba gained steadily in volume of business and prestige, serving to cultivate also closer financial relations between Cuba and the United States. Following Mr. Davis' retirement to accept appointment at Washington, Mr. O. A. Hornsby was elected president, who was also one of the original organizers of the company.

The Trust Company of Cuba occupies one of the most attractive and substantial banking homes in Havana. The design is of the Greek Ionic style and the construction fireproof throughout. A feature of the company's home building is the vault equipment which is one of the best and most complete in Cuba. In assuming his new duties as president, Mr. Muirhead has the best wishes of the trust company fraternity.

New capital issues in England during the first five months of this year, exclusive of British Government loans for national purposes, aggregated £146,157,136 as compared with £90,301,727 for the same period last year, according to statistics compiled by the London Joint City and Midland Bank, Limited.

T

O make this paper brief, I start with the short, bald statement that the idea herein presented is, I think, one of the best and cheapest methods yet devised for getting new depositors for a trust company.

This statement is not based on mere theory, but upon proved practice during three years in the city of Ithaca. Ithaca has 17,000 inhabitants. Yet the development of the plan there proves that it is workable in any city of whatever size larger or smaller.

The plan, in brief, is the issuance of a baby pass-book, and no novelty is claimed for this idea. The new part of it is the issuance of the pass-book, with a one dollar deposit, within a few days, at most, of the birth of every baby in the town. Note that every baby is included regardless of race, creed, sex, color or nationality. The mother, in the hospital or at home, receives along with the flowers and congratulations from intimate friends, a congratulatory letter from the Ithaca Trust Company, enclosing a special pass-book bearing the baby's name in which is shown a deposit dated the day of the baby's birth, and in the amount of one dollar. So it can be fairly said that while many babies in Ithaca may be born without the proverbial silver spoon, not one can enter the world penniless.

The Financial Side

As men used to dealing in facts and figures, you are primarily interested in the financial aspects of the plan; and also, because money affairs touch life in its most personal phases, you will be fascinated with the human interests involved. A few of these will be presented after you have had the dry statistics.

The plan was started in the Ithaca Trust Company on the first of February, 1919, or a

(Address delivered June 19, 1922. before Trust Company Section, New York State Bankers Association.)

little more than three years ago; so it has had time to prove itself. Since then you might suppose that at least one hundred accounts a year would accrue from the plan. Ithaca's birthrate is not especially high, and the place has been described as a city of old folks. But without going deeply into the question of local birthrate, it must be said that the average Ithaca family seems average one baby every four years. bank has opened 880 of these baby accounts since that February day three years ago when the plan was started.

to

The

The total cost of opening these accounts, including the initial dollar furnished by the trust company has been $1,057.20, of which the deposits made $880; pass-books, $70,40; postage, $52.80; stationery, $10.00, and clerk hire, $44.00. The average cost of each account including the original dollar, has been $1.20. Of course, some accounts have been closed because of deaths or removals of the families from Ithaca; these have amounted to 44, or only five per cent. In other words, 836 of these accounts, or 95 per cent., are still growing.

Growth of Accounts

That these accounts have grown is indicated by the fact that the deposits are more than ten times as large as they were originally or, put in another way, the original dollar has become, on the average, $11.76, and all accounts aggregate $9.831.36. The largest account is $275 and nine accounts have gone to more than $100 in the three years.

Several questions have occurred to most of you as I have given these figures. One is: Against what does the trust company charge the original dollar deposit? The answer is: Against advertising. And it is the cheapest advertising that the bank obtains, with the additional advantage that there is an absolute and undeniable return. Newspaper and magazine advertising for banks may have

a dubious value; there is no sure way to check the returns, nor to tell how much-if any-new business is brought in by such advertising, nor how much such announcements cost for each new account. Letters to adults, whose banking habits are formed, do not produce much in tangible results. We know in Ithaca that we have been asked to pay solicitors three dollars for each new account brought in, and some of these accounts are of doubtful worth and of undependable duration.

But with the baby accounts the growth of new deposits is sure. If the average of 260 or more accounts a year keeps up, there will be 2,600 at the end of the first ten years after the plan started, and 5,200 in twenty years. The limitations of growth are largely the limitations of the growth of the city. Of course, it would be a fallacy to assume that the rate of increase would keep up, because on an average of 20 years the original account would be likely to be closed out. This is because the account in the name of the child, controllable in the name of the mother, is urged as a heritage account to be available when the child is of age 18 years in the case of a girl, and 21 years for boys, with the idea that the savings may then appropriately be used for a college course, or for starting in business, or for a marriage portion.

Additional Advertising Value

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An additional advertising value is quite as sure, though not as readily checked, in the new accounts that come to the bank as the result of the baby accounts; and on careful, conservative estimate, one-third, or 33 per cent. of the baby accounts bring new accounts to the bank as the result of the publicity that accrues to the baby pass-book idea.

What can be said as to novelties, blotters, fountain pens, calendars, bill-folds, and the like as to effectiveness in getting returns such as these? Our experience seems to indicate that the cheaper advertising novelties are worthless, and represent money thrown away, and that the more expensive one, while somewhat more effective, are too costly.

You may ask: How do the baby accounts bring new ones? No, there is no claim that any given family is going to plan on a new baby for the sake of getting a financial start in life for it from the trust company. But a discussion of this topic does bring us close, to some human interest stories. In one instance the trained nurse at the bedside in the

hospital where the pass-book came, remarked that any bank that was as thoughtful and up-and-coming as the one that sent the book and the letter of congratulations to the mother, could get her savings. And it got them, and they amounted to a tidy little sum. In another case a mother changed her account to the trust company because she was making periodic deposits for the baby, and it was more convenient to do ali her banking in one place.

The Human Interest Element

One day a small Miss, about five years of age, came into the bank with a complaint. Her eyes were below the level of the teller's window, but she lisped out her grievance to the effect that her little brother Wallie, who was only six months old, had a bank account, and she couldn't see why she, who was ever so much older, shouldn't have one also. It was only a matter of a few moments to send her away happy with a pass-book, showing a dollar deposit, a special letter to her mother, and a card for the mother to sign and return.

These and others represent specific cases that could be multiplied at length. The idea makes talk wherever it is mentioned, because this personal publicity reaches out in ever widening circles; and even crusty old bachelors are interested in babies.

Some other personal episodes are interesting. One mother said that the baby passbook had proved to her and her husband that they could save money, though they had previously thought that they could not, on his small salary.

In another instance the baby pass-book had not been long issued when the proud grandfather of the newly arrived infant came to the bank with $100 in gold that had been contributed to the account by him and other equally proud relatives.

How Accounts Grow

Many persons lack the initiative to start accounts. Some, indeed, are literally afraid to go into a bank. Its polished marble and shining brass are overwhelming to those who are used to more humble surroundings. But these persons have enough curiosity about the first dollar to want to come in and find out what it really means. Met with a kindly, tactful, sympathetic courtesy, they go out with a new air, and a feeling of confidence and friendship where they had before had only timidity and distrast. They begin to come in to make deposits because they like the sensation; and this feeling is a real stimulus to the growth of deposits and to habits of thrift.