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ANNUAL ADDRESS BY THE PRESIDENT OF THE TRUST

COMPANY DIVISION
EXPANSION OF TRUST COMPANY SERVICE AND BUSINESS

J. ARTHUR HOUSE
President, The Guardian Savings and Trust Company, Cleveland, Ohio

S

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 fire principal nations of the world to stop the enormous expenditures of money in the ever-increasing demands for better and larger aries. This Conference might well be taken as a pattern for future conferences to consider many of the perplexing problems unsolved which tre 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 there 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 ('ommission 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 Rankers Association has

ness

under consideration and upon which they possible to state, as publication of those fighave given expression of their views at ures is not required in most States, but unlength for the benefit of members of the

doubtedly it is far in excess of the banking Association, and are only mentioned in pass

resources, and it is unquestionably a true ing as some of the problems with which we

statement that the trust companies of the are confronted in our march back to normal

United States hold in their banking and business conditions. The last year has given

trust departments more property than any

other group of banks in our country. us much to be thankful for in the United

The importance of our business is emphaStates. One year ago unemployment was

sized by the provisions of the Federal Revery general throughout the country and

serve Act permitting National banks to esnow practically none exists.

tablish trust departments and transact busiThe adoption of the National Budget through the efforts of President Harding,

under certain conditions. National

banks, in ever-increasing numbers, are takably assisted and administered by one of our own trust company officials, General

ing on trust powers as authorized by the

Act. We welcome them into the field-the Charles G. Dawes, chairman of the Central Trust Company of Illinois, marks an epoch

surface has hardly been scratched and there of far-reaching importance to our govern

is business enough for all. mental affairs.

Danger of Interference in Trust Work The insistence of Congress at this time in passing a Soldiers' Bonus Bill, calling for

Trust business, however, cannot be caran ultimate expenditure of over $4,000,000, ried on as a side line and our concern is that 000, at a time when the country is con

it be conducted in the future as in the past, fronted with the task of meeting within the on the same high plane of service by highly next year the problem of refunding many bil

trained experts. In this tremendous in' lions of dollars of maturing obligations, de

crease in the number of banks qualifying creasing revenue and a deficit in the yeam's to perform trust functions lies a grave danoperations, again draws attention to the ut ger that inexperienced trust men, over-zealter disregard of our lawmakers to the busi

ous for business, may innocently transcend ness side of our“ government.

the principles of trust company service, the We stand for the most liberal treatment

canons of ethics, and the ideals for which of our soldiers and sailors, who, in the dis

this association has stood-every such incharge of their duty to their government and

stanee reflects not alone upon the offending their country in the Great War, have be company but upon all trust companies. come disabled or incapacitated, but the pay

And so we have a problem at home, among ment of a bonus to able-bodied men is wrong

our own profession-a problem of education in principle and cannot be defended in a

-and I earnestly bespeak your consideration country such as ours. The action of Presi

of a program which will bring to every trust dent Harding in vetoing the bill passed by official a comprehensive knowledge of those Congress is to be most highly commended ideals which a quarter century of experience and the country is fortunate in having as

has breathed into the heart and life of this its president a statesman who has the cour Association. age of his convictions, and, seeing his plain

Activities of Trust Company Division duty, does not allow political expedieney to influence him in the discharge of that duty.

The Division has been active and alert

with respect to all matters affecting trust Resources and Fiduciary Holdings of Trust company interests. Through our various Companies

committees every phase of our work is cared Twenty-six years ago, when the Trust Com for. Our Federal Legislative Committee has pany Division of the American Bankers As carefully watched and taken appropriate sociation was organized, there were in the measures for the protection of the interests United States about 251 trust companies hav of our business as far as national legislation ing total resources of about $843,713,741.00. is concerned. There is now most urgent Today there are approximately 2,500 trust need for an amendment to our laws in recompanies with resources in excess of $12, spect to the final determination of the value 000,000,000, as shown by their statements of estates and a closer co-operation between published on June 30, 1921. Just how much government officials and corporate fiduciaries property the trust companies of the l'nited in securing greater service to the public in States hold in their trust departments is im the administration of estates.

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 discussion's came many val. uable suggestions for increasing trust company business, and the banquet was in every way a success. In conclusion, permit me to thank you for the hopor 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.

Following the address of the president a resolution was introduced by Mr. Theodore G. Smith of New York, providing for the appointment of a nominating committee to receive names in writing from the delegates present from which to select five members

I would urge all of our men.bers 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 committen any subjects or situations that may arise during the year in their respective States affecting trust company business.

Growing Appreciation for Trust Service

This year, from the standpoint of trust, companies, has been most satisfactory. Reports 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 sert. 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.

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THEODORE G. SMITH Vice-Presid'nt, Central Union Trust Co. of N. Y., who was elected President of the Trust

Company Division, A. B. A.

to serve on the Executive Committee of the total resources of the trust companies of Trust Company Division for the term ending the United States, as compiled by the United 1925, such names, to be reported back to the States Mortgage and Trust Company, for convention for action. President House ap the year ending June 30, 1922. These figpointed as members of the nominating com ures are from 2,372 trust companies, pracmittee the following: Uzal H. McCarter, tically the same number that reported in president Fidelity-Union Trust Company of 1921, and the total resources of those trust Newark, N. J.; Francis H. Sisson, vice-presi- companies are $12,739,000,000, an increase dent Guaranty Trust Company of New York; during the year of $416,000,000 in resources Thomas C. Hennings, vice-president Mercan -about three and three-tenths per cent.., tile Trust Company of St. Louis; F. H. The greatest increases were in the State of Fries, president Wachovia Bank and Trust New York, $227,700,000; Illinois, $109,800,Company of Winston-Salem, N. C., and Lu 000; in the State of California, $77,200,000 ; cius Teter, president Chicago Trust Com in New Jersey, $53,300,000; Maryland, $34,pany.

100,000; Massachusetts, $33,200,000. Pennsyl

vania showed a decrease of $72,000,000, and Gain in Trust Company Resources

Texas of $40,000,000. The net increases by President House then presented some in territory are approximately as follows: In teresting figures showing the growth in re the New England territory the resources insources of the trust companies of the United creased $53,000,000; North Atlantic, $250,States as compiled in advance from the 200,000; Southern territory, $26,300,000; Pa1922 book to be published by the United cific Coast, $63,100,000; North Central, $104,States Mortgage & Trust Company of New 000,000, and the Plains, $8,600,000. I thought York, based upon returns as of June 30, those figures might be of interest in view of 1922. Mr. House said:

the statements in the report. “Since I have read my report, some figures "We are all interested in a proper and have been handed to me with respect to the just solution of the European question. It

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