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INCE the meeting of our Division at Los Angeles in October of last year, many important things have taken place in the world at large and in our country, all having a bearing upon the financial situation, both nationally and internationally.

In the international field might be mentioned the Limitation of Armaments Conference held in Washington last Winter, called by President Harding, so ably carried to a successful conclusion through the efforts of the President and Secretary of State Hughes, It is almost impossible at this time to estimate the effect of this important step in bringing together the five principal nations of the world to stop the enormous expenditures of money in the ever-increasing demands for better and larger navies. This Conference might well be taken as a pattern for future conferences to consider many of the perplexing problems unsolved which are troubling this whole world of ours.

The failure of the Genoa and Cannes Conferences to accomplish the purpose for which they were called was most disappointing to those of us who had hoped that out of those gatherings might come a solution of some of the grave problems with which Europe is confronted.

Our Prosperity Depends Upon Reconstructed Europe

The almost total collapse of the European exchanges the unsettled German reparations situation, the failure of the European nations to balance their budgets, the enormous issuance of paper money by those nations, the jealousies and lack of harmony among the European countries-all create a most difficult situation and one which will require the utmost patience. diplomacy and highest type of statesmanship to deal with.

We can no longer say to ourselves that we

are not interested in the proper and just solution of the European situation; we are, for whether or no, our future prosperity is dependent upon a reconstructed and normal Europe, and not only Europe, but a normal condition in every country in the world with which we are doing business and in which we can find markets for our surplus of manufacture, of food and agricultural products. Our farmer is interested in the price at which wheat sells in London, Paris and Berlin, for the price established ther fixes the price at home. Likewise we are interested in knowing what they have to dispose of.

The question of the settlement of the debts of European nations to us has a very important bearing upon many of the questions referred to and it is hoped that the Commission appointed by President Harding to study this important problem will make a recommendation which will settle and solve the question. So much for the international phase of the situation.

Vital Domestic Problems

In our own country we have experienced a gradual return to normal business, interrupted unfortunately by industrial disputes and strikes of more or less magnitude, notably the coal and railroad strikes, both of which have tied up many industries, causing factories to close, throwing men out of employment and causing suffering and loss difficult to estimate. The hard and soft coal strikes fortunately have been settled and the railroad disputes bid soon to be a thing of the past. Whether we agree with the manner in which they are settled or not, the fact that they are settled tends to help the business situation of the country.

The tariff and immigration question might well be given consideration, but those are questions the Economic Policy Commission of the American Bankers Association has

under consideration and upon which they have given expression of their views at length for the benefit of members of the Association, and are only mentioned in passing as some of the problems with which we are confronted in our march back to normal business conditions. The last year has given us much to be thankful for in the United States. One year ago unemployment was very general throughout the country and now practically none exists.

The adoption of the National Budget through the efforts of President Harding, ably assisted and administered by one of our own trust company officials, General Charles G. Dawes, chairman of the Central Trust Company of Illinois, marks an epoch of far-reaching importance to our governmental affairs.

The insistence of Congress at this time in passing a Soldiers' Bonus Bill, calling for an ultimate expenditure of over $4,000,000,000, at a time when the country is confronted with the task of meeting within the next year the problem of refunding many billions of dollars of maturing obligations, decreasing revenue and a deficit in the year's operations, again draws attention to the utter disregard of our lawmakers to the business side of our government.

We stand for the most liberal treatment of our soldiers and sailors, who, in the discharge of their duty to their government and their country in the Great War, have become disabled or incapacitated, but the payment of a bonus to able-bodied men is wrong in principle and cannot be defended in a country such as ours. The action of President Harding in vetoing the bill passed by Congress is to be most highly commended and the country is fortunate in having as its president a statesman who has the cour age of his convictions, and, seeing his plain duty, does not allow political expediency to influence him in the discharge of that duty.

Resources and Fiduciary Holdings of Trust Companies

Twenty-six years ago, when the Trust Company Division of the American Bankers Association was organized, there were in the United States about 251 trust companies having total resources of about $843,713,741.00. Today there are approximately 2,500 trust companies with resources in excess of $12.000,000,000, as shown by their statements published on June 30, 1921. Just how much property the trust companies of the United States hold in their trust departments is im

possible to state, as publication of those figures is not required in most States, but undoubtedly it is far in excess of the banking resources, and it is unquestionably a true statement that the trust companies of the United States hold in their banking and trust departments more property than any other group of banks in our country.

The importance of our business is emphasized by the provisions of the Federal Reserve Act permitting National banks to establish trust departments and transact business under certain conditions. National banks, in ever-increasing numbers, are taking on trust powers as authorized by the Act. We welcome them into the field-the surface has hardly been scratched and there is business enough for all.

Danger of Interference in Trust Work

Trust business, however, cannot be carried on as a side line and our concern is that it be conducted in the future as in the past, on the same high plane of service by highly trained experts. In this tremendous increase in the number of banks qualifying to perform trust functions lies a grave danger that inexperienced trust men, over-zealous for business, may innocently transcend the principles of trust company service, the canons of ethics, and the ideals for which this association has stood-every such instance reflects not alone upon the offending company but upon all trust companies.

And so we have a problem at home, among our own profession-a problem of education --and I earnestly bespeak your consideration of a program which will bring to every trust official a comprehensive knowledge of those ideals which a quarter century of experience has breathed into the heart and life of this Association.

Activities of Trust Company Division The Division has been active and alert with respect to all matters affecting trust our Through various company interests. committees every phase of our work is cared for. Our Federal Legislative Committee has carefully watched and taken appropriate measures for the protection of the interests of our business as far as national legislation is concerned. There is now most urgent need for an amendment to our laws in respect to the final determination of the value of estates and a closer co-operation between government officials and corporate fiduciaries in securing greater service to the public in the administration of estates.

I would urge all of our members to watch legislation affecting trust companies in their own States during the coming year when so many State legislatures will meet. In some States legislation very adverse to trust company interests has been enacted or proposed and it will be well for our membership to cultivate the acquaintance and friendship of State legislators so that they may frankly discuss with them any measures which may arise for consideration affecting trust company or banking interests in their respective States.

Most excellent results have come from the work and activities of the Committee on Publicity in the forwarding of the National Publicity Campaign and the sale of the trust company idea to millions of people throughout the country during the past two years. This pioneer work, undertaken and accomplished on a broader scale than ever before, merits the support of every member of the Trust Company Division. During 1921 and 1922 about $110,000 has been secured for this work, and from the most careful and conservative estimates which I made. personally I am of the belief that business already secured and written will bring to the trust companies of the United States earnings representing large dividends on the amount expended:

Our various other standing committees have been active, such as the Committee on Community Trusts, Committee on Standardization of Forms and Charges, Committee on Staff Relations, etc.

I want to call the attention of the State vice-presidents to the responsibilities of their office and to suggest that they keep in close touch with all matters relating to trust company affairs, and to bring to the attention of the officers or members of the committe any subjects or situations that may arise during the year in their respective States affecting trust company business.

Re

Growing Appreciation for Trust Service This year, from the standpoint of trust. companies, has been most satisfactory. ports coming in from our members from all sections of the country indicate that business is reviving and that our members are sharing in its revival. Trust company serv ices are coming to be better understood by the public. generally through personal contact and skillful handling of trust estates. Judging from the great strides being made in my own city by our trust companies, the next ten years promise still greater success than in the past.

In February of this year was held our usual Midwinter Conference and Eleventh Annual Banquet, which was probably the largest attended in the history of the Division. Out of the discussions came many valuable suggestions for increasing trust company business, and the banquet was in every way a success. In conclusion, permit me to thank you for the honor you conferred upon me in electing me president of the great Trust Company Division of the American Bankers Association and for the many courtesies which have been shown me during my administration of this office. My appreciation is especially due to the officers of the Division and to the members of the committees who have performed the real tasks and who have made the work of the year so successful and so pleasant.

to serve on the Executive Committee of the Trust Company Division for the term ending 1925, such names. to be reported back to the convention for action. President House appointed as members of the nominating committee the following: Uzal H. McCarter, president Fidelity-Union Trust Company of Newark, N. J.; Francis H. Sisson, vice-president Guaranty Trust Company of New York; Thomas C. Hennings, vice-president Mercantile Trust Company of St. Louis; F. H. Fries, president Wachovia Bank and Trust Company of Winston-Salem, N. C., and Lucius Teter, president Chicago Trust Company.

Gain in Trust Company Resources

President House then presented some interesting figures showing the growth in resources of the trust companies of the United States as compiled in advance from the 1922 book to be published by the United States Mortgage & Trust Company of New York, based upon returns as of June 30, 1922. Mr. House said:

"Since I have read my report, some figures have been handed to me with respect to the

total resources of the trust companies of the United States, as compiled by the United States Mortgage and Trust Company, for the year ending June 30, 1922. These figures are from 2,372 trust companies, practically the same number that reported in 1921, and the total resources of those trust companies are $12,739,000,000, an increase during the year of $416,000,000 in resources -about three and three-tenths per cent.. The greatest increases were in the. State of New York, $227,700,000; Illinois, $109,800,000; in the State of California, $77,200,000; in New Jersey, $53,300,000; Maryland, $34.100,000; Massachusetts, $33,200,000. Pennsylvania showed a decrease of $72,000,000, and Texas of $40,000,000. The net increases by territory are approximately as follows: In the New England territory the resources increased $53,000,000; North Atlantic, $250,200,000; Southern territory, $26,300,000; Pacific Coast, $63,100,000; North Central, $104,000,000, and the Plains, $8,600,000. I thought those figures might be of interest in view of the statements in the report.

"We are all interested in a proper and just solution of the European question. It