The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-09-27
TRUST COMPANIES.

Ap interesting evidence of the rapid
growth of wealth in this country and the
development of high commercial conditions
is found in the multiplication of trust COM
panies. These must not be COMPOUNDED with
trusts. The latter are combinations in re-
straint Of trade or production, or for the
purpose of controlling markets or prices.
Trust companies are interpretations of capt.
tai for the purpose of engaging in certain
lines of business which cannot be success
fully handled by individuals and which are
outside of the field of legitimate banking
such, for instance. as large receiverships
handling and investing trust funds, admin
istering large estates, etc. A trust COM
pany may do banking business, and many
of them do. but it also does many things a
bank cannot do. They are very useful in
situations.
The Financier, paper devoted exclusive
iy to financial and commercial matters
publishes a list of trust companies of
the United States showing the number IN
each State, their deposits as compared with
those of national and state banks, and the
ton of the information must have involved
much labor and every effort seems to have
been used to make it trustworthy. In COM
menting on it the Financier says:
To compile s. list Of the actual trust COM
panieS of the United States has been a mat
ter of no small magnitude. The laws of the
different States are so widely divergent on
the subject of incorporation and privileges
that it was found rather difficult at times to
company. and bank. While no invariable
rule was followed, it is believed that our
classification is as accurate as could be
hoped under the circumstances. While there
may be names on the list which appear on
their face to belong in another category
and others have been omitted which first
thought might have ordered differently, a
more careful view will show that judgment
has been impartially exercised In every
case. In all instances, with half dozen
exceptions the figures relating to capital
and surplus have been verified by the COM
panies at our special request.
The total number of trust companies in
the United States is ASS, representing forty
two States and the District of Columbia.
AS might be expected of institutions rep
resenting large aggregations Of capital, they
are found chiefly in money centers and are
most numerous in the old and wealthy
States. Pennsylvania heads the list with
total of seventy-eight companies; New York
follows with thirty-eight, ssachusetts
has thirty-two, Illinois twenty-five. New
Jersey twenty-one and Iowa twenty. The
other States range from one to nineteen
each. In respect OF capital New York
heads the list, her trust companies aggre
eating 500 800, OOO as against Pennsylvania
$27 S4e,O 0O Illinois's $15,275 900 and Massachu-
sets $1O,575, 600. The total capital Of all the
companies in the United States is Sal, 27S,OO0
Most persons will be surprised to learn of
the large deposits they carry. The deposits
of the national banks, private banks and
savings banks are SO enormous that one
might suppose there was not much left
for the trust companies. Their total de-
posits are s697, 10000. the New York COM
panies leading with $34SOO0.0OO followed by
those of Pennsylvania with 500, $50, 900, Mas
sachusetts $53, 400 600, Rhode Island 49, ,O0O
The companies in twenty-one other States
have deposits ranging from $1,0OO,OOO to
SIS. OOO,0 0O The national banks greatly out
number the trust companies, 1876 to 45S, but
the latter outclass the banks in the average
capital, $20S, 500, against 400, and also in
their average deposits, s1,517,Ooo. against
s551, 600 In the matter of surplus the trust
companies make better showing than the
national banks. their average percentage
Of surplus and profits to capital being SO
per cent, against the national banks 81 per
cent. This refutes the common idea that ma
tional banks are highly favored institutions,
since the trust companies, organized under
state laws, show much larger percentage
of surplus and profits. They are also de-
cideily ahead of national banks in divi-
dends. If national banking were as profit
able as many persons imagine there would
not be so much capital going into other
lines of permanent investment. But banks
and trust companies are both national
outgrowth Of commercial conditions, and
are both equally necessary and useful in
their respective lines.