One man came in when his baby was a year old and said he wanted to put in a dollar for each year of the baby's age as it grew up, $2 when it was two years old, $3 when it was three years old, $4 when it was four, and so on. He could scarcely believe it when he was told that his deposits alone, not counting any interest, would amount to $231 when the boy was twenty-one, and that this money would be earning money all the time.

Miscellaneous By-products

The foregoing represent only the tangible results in new business to the bank, in the form of accounts that are the best type of accounts to have, because they stay, and are not drawn out to be used in more alluring investments; nor are they of the type and size that are likely to be withdrawn in time of panic when people may become fearful of the safety of larger deposits.

In conclusion I want to point out only a very few of what might be called the intangible results, but which are none the less real or less valuable. Think what it means to have every child in the place with an interest and a confidence in your banking institution. Think of the change in sentiment toward property and capital when even the child of the very poorest laborer-and therefore its parents-has a personal and a financial interest in a so-called "capitalistic" institution.

Nothing that I can think of will do more than such accounts, and the friendships they engender, to bring about the time when an artificially fostered hatred will die away from those institutions that are seeking ehances to serve.

Do you suppose that the right start will not inculcate habits of thrift, and responsibility, and loyalty, and a belief in the rights of others-because the individual has property rights of his own, from his very birth. It ought to raise the level of good citizenship in every community in which it is tried.

More remote, perhaps, but not beyond the realms of possibility, if bankers get interested in the recording and registering of births from a business standpoint, is the likelihood that this increased interest on the part of influential men of every State and community, may put on the statute books, and lead to their enforcement, laws requiring birth registrations everywhere.

But, as I say, these are remote, though not without great value. However, I am willing, if you would have it so, to rest the case of the baby pass-book, with its dollar deposit, on the dollar-and-cents advantage as an advertising business getter which is, as I said in the beginning, one of the best and cheapest methods of bringing new depositors to a bank.

(Copyright applied for 1922.)

A

T the very beginning of our official year we were confronted with the most serious problem and greatest menace the trust companies in this State have ever faced, and it was the opinion of your officers that for the year just ending the attention of the members of the Section should be temporarily diverted from the usual concerns of the trust business and concentrated on the defeat of newly enacted legislation designed to place unnecessary and unwarranted restrictions on the banks and bankers of California. With this thought uppermost in our minds we consented to a halt in our constructive plans and turned from the pleasing task of perfecting our organizations and service to the unpleasant but necessary struggle to preserve our rights and privileges under the law. A referendum on the Sample Bill engaged our early and earnest attention and the same was completed and the force of the objectionable statute was suspended until the issue can be determined by the great jury of California electors in November next. While our contention is meritorious and our efforts are being made in the interest of the public and our success will redound to the good of the people of this State, yet a State-wide campaign in behalf of any measure is difficult and expensive, and in this instance we have arrayed against us the power and influence of the associations of an important and great professional class.

Unwarranted Attack on Trust Companies The trust companies are particularly interested in the outcome of the referendum,

for if the statute sought to be nullified becomes effective, it will seriously affect their business and their usefulness. Moreover, the proponents of the law have directed their attacks mainly toward the trust companies and during the whole of the campaign before the people the trust companies will be the targets for innumerable shafts of criticism, misrepresentation and abuse. Already some of the less temperate members of the legal profession have undertaken to undermine the confidence of the people in the integrity and responsibility of trust companies and have resorted to personalities and abuse which must be shocking to the better element of that honorable profession. It is to be expected that no personalities of any kind will be used as weapons by the members of this association, and that no effort will be made by any one at any time to discredit the members of the legal profession or to destroy to any degree the confidence of the public in that profession and the respect in which its members are now held by the people. The question between the bankers and the lawyers involves an important principle and our constant aim shall be to establish the principle in which we believe, and not to tear down nor destroy those whose interests or beliefs differ from our own.

It is a fact that the people of California will suffer the greater injury from the objectionable legislation and that all we do in sustaining the referendum will be done, not alone for ourselves, but for the public good and welfare.

At the time of our last session the Governor of California had not signed the Sam

ple Bill (Senate Bill No. 21) and resolutions were adopted condemning the bill and urging the Governor to withhold executive approval thereof. In pursuance of the resolution adopted at the last session of the California Bankers' Association, the president of the association appointed a committee of nineteen members to take active charge of the work of sustaining before the voters the referendum that had been perfected, and this committee is now acting and is entitled to and will have the whole-hearted support of the Trust Section. Our attention has been engrossed with this matter during the entire year, and the subject will constitute a considerable part of the deliberations of our present meeting, and further reference thereto in this report is unnecessary.

General Survey of Trust Company Business

A general survey of the business of California trust companies demonstrates that the business is steadily growing and the companies are making substantial progress. The volume of transactions indicates a wider appreciation on the part of the business community of the value of the services performed by the companies and a better knowledge of the operations, capacity, responsibility and permanency of corporate fiduciaries. The trust companies must realize that as the public comes to have a better understanding of their important work they will have a constantly growing volume of tasks and responsibilities, and that they should be fully equipped and prepared to function properly and to perform adequate and skillfully the services they are authorized by law to undertake. We are now entering upon an era of a great growth and expansion of the trust business and our facilities must be provided in advance, else the success for which we have waited will be retarded. The records of the office of the Superintendent of Banks show that at the end of March, 1922, fiftyseven banks were authorized to do trust business. Of these twelve are National banks and thirty-eight are members of this Section. Two of these banks, however, are in process of liquidation and others will probably be merged or consolidated in the near future. No accurate statistics are available as to the amount of court and private trust business transacted by these banks. It is hoped that hereafter it will be made possible to secure and compile information which will clearly indicate the progress which is being made as well as the trend of our work throughout the State. Four trust companies maintain with the State

Treasurer the maximum deposit required to do a trust business and the total of all such deposits amounts to $9,862,875.

Fee Schedule

The standard fee schedule heretofore adopted was the subject of discussion at the session of this Section in 1921, and by resolution it was ordered revised and when approved by the Executive Committee to be printed and distributed. This schedule is now approved and adopted, and has been or will soon be distributed in printed form to the members. In this important work this Section first pioneered the field and was followed by the excellent and exhaustive work of the American Bankers' Association. The larger number of the changes made in our schedule we effected to make it more nearly conform to that prepared by the committee of the Trust Company Section of the American Bankers' Association.

Standard Trust Forms

The standardized trust forms prepared in 1919 by a committee of this Section met with a flattering reception and proved helpful and suggestive to trust officers and lawyer alike. Many commendations were received from institutions, journals and trust men who were qualified to judge the quality of the work done. The demand for the standard form booklets continues, but the edition was long since exhausted. In consideration of the requests already received for these books and those that will come in the future from new or expanding institutions, it is now desirable that a reprint be made or a new edition prepared. Some of the forms in the book should be altered and others should be added to make the work more complete. I, therefore, recommend that a committee be appointed to revise the book of standard forms, and that when revised an edition be printed and distributed.

Code of Ethics

At the last session of the Section a committee, consisting of Messrs. Starbuck, Lathrop and Veenhuysen, was appointed for the purpose of "To gather expressions of opinion throughout the country for a basis of drawing up a code of ethics for the trust companies of California." The committee is not ready at this time to report, but because of the importance of the subject and the benefit that would accrue to the members of the Section from such a code, I recommend that the committee be continued and that it be urged to prosecute its labors, so that we may have a complete report at our next session.

Relations with the Bar

Ever since the organization of the Trust Section it has assiduously endeavored to cultivate friendly and co-operative relations with the members of the Bar. Our spirit in this matter and our good will toward the attorneys should suffer no diminution because of the unfortunate and truly deplorable contest that has been forced upon us by the so-called "Lawyers Bill." No class of business men are in better position to know and understand the lawyer and his professional work than are trust men. We are sensible of the ideals and ethics of the profession and we honor and respect the reputable members of the Bar. We transact much business together, and find our relationships to be mutually advantageous and helpful. We are desirous of developing and extending our friendships and maintaining harmonious relations with all members of the profession. If an insuperable barrier interposed between the lawyer and the trust company it would be unfortunate indeed, but I am sure that the differences between us are due largely to a lack of a clear understanding of the functions and practices of the trust com

panies and the scope of the lawyer's exclusive field of activity. A cursory examination by the lawyers of the methods and operations of the trust companies would suffice to clear away misapprehensions and prevent misrepresentations and unwarranted attacks against the trust companies by the profession.

MERCHANTS LOAN & TRUST COMPANY Notable gains are shown in the June 30th financial report of the Merchants Loan & Trust Company of Chicago. Since May 5th the resources show an increase from $141.179,000 to $151.075,000, with gain in cash resources during that period from $26,968,000 to $33,700,000. Among the resources are loans and discounts of $61,032,000; U. S. bonds and certificates, $5,669,000; other bonds and mortgages, $26,776,000; acceptances, $12,-. 760,000; letters of credit, $2.331,000 and other banks' liability on bills bought, $7,257,000. Deposits aggregate $107.883.000. The capital is $5,000,000 and surplus $10,000.000. Undivided profits shows an increase since May 5th from $1,846,000 to $2,192,000.