The Portland daily press., 1884-12-31

The doors OF this institution will be opened
for business this morning, and it being the
first Trust Company in Maine, we propose to
give our readers general idea of the business
of such companies as distinguished from
banks.
To the question, What is Trust Company,
We reply it is bank and something more; it is
authorized to do general banking business
but has powers granted embracing other
branches of finance, more or less directly con-
nectsd with banking. A bank, Whether pri-
waite, State or national, is an institution which
receives deposits and loaus money. This is the
essential requisite of a bank. Whether or
not it issues circulating notes, makes collec-
tions, and buys and sells exchange is inmate
rial; for, although common, these are not
essential.
Trust Company, chartered by the State
Legislature, is authorized to receive deposits
and loan money. There is no reason why it
should not Issue its bills, if there was any
profit in it. The 10 per cent. practically pro-
hibits this Equally well CAN'T make collee-
tions and deal in exchange, but the nature of
its especial features, which We are about to
explain, is such that little or none of this is
done by trust companies.
Thus far it is a bank in sll its powers, al
though it may choose not to exercise them all.
For the sake of devotiHg itself to business ne
culiar to such Institutions, IL gives up collec-
ton, exchange, and In most CASES declines ac-
counts strictly mercantile, with consequent de-
mands for discounts To offset this, IL receives
the deposits of professional and retired men,
aud those engaged 10 business of such ma
ture 8s to allow them to use collaterals ia af-
fecting loans. This includes dealers in flour,
grain, molasses, bonds, stocks, etc., etc. Such
deposits with those OF banks, municipalities
corporations, courts of law and equity, admin
istrators and others acting in any official or
trust capacity, constitute the bulk of its depos-
its, and in loaniDg it makes a speciality of
loans secured by staple, marketable collater-
ais, rather than discounts of mercantile paper
From the above statement our readers will see
that trust company has practically all the
powers OF bank, many of which it refuses to
exercise, not only from the desire not to conn.,
pete with other banks but also to devote it.
self to certain specialties.
The latter are briefly as follows: A trust
company is authorized to act as agent for cor.
porations IN registering and transferring the
capital stock of the latter. This, for various
reasons, Is largely done by such companies. 1t
is also authorized to countersien bonds of COR
porations as trustee. That is to say, the mort.
gage Is made out TO the trust company for the
bent fit of the bondholders, and the company
testiies by its signature each bond that all
the provisions of the mortgage, such as record.
ing and the like, have been complied with, aud
the interest OF the bondholdeTs. For these
services as agent and trustee it receives COM
pensation. The company can also be appoint
ed by you, executor Of your will, or, by the
court, administrator of your estate, or guardi-
an of your children, OF become receiver of a
railroad; for all of shiloh services it is paid
like private person, but offers its paid in CAP
ital, its double liaoility OF stockholders and
the standing of its board of trustees as guar
antee for its acts. In this respect it is similar
to com panies, Instead of individuals, acting as
sureties on bonds. The company can, in like
manner, act as agent for the care of property
during absence, ETC., the great advantage Dos
sessed by it over individuals in all these cases
being its corporate, and not private existence
From this brief outline il will readily be seen
that these special features OF trust companies
are entirely without the province of national
banks.
One word with reference to interest on de-
posis. An ordinary business account will not
usually receive interest on balances, in fact
such an account is not desired. But 10 rate,
graduated by the amount time, ETC., will be
paid TO persons or corporations whose accountg
are not Liable TO frequent and sudden haetu-
atons; for money in other words, too large in
amount for savings banks, aud for which ma
tional banks allow no compensation. Thus the
depositor is better off, and by proper manage
ment the company is perfectly secure, making
money by the operation.
The management of Trust Companies is in
the han0e of a Board of Trustees and an Ex-
ecutive Committee, the latter meeting more
frequently than the Trustees and correspond
ing to the directors of a National Bank. Their
charters drawn with great care embodyine
all the essential features OF the national bank
ing laws, and, in the strongest companies re-
curing larger reserves and greater security to
depositors than National Banks are obliged to
keep,