The Columbus journal., 1908-01-22

ties or without becoming . spomsoE
for them. In . word, the trust com.
pany may engage to act as an escrow
agent to see that = certain technical
transaction is completed and nothing
more. That means this: The trust
company consents to hold the stakes
between two parties but without the
slightest responsibility a. to the value
OF those stakes or what may be done
with them after the stipulations a. to
the conditions precedent to delivery
have been fulfilled. Because q trust
company acts as the trustee Of . Ger
tain bond issue there is no warrant for
q prospective investor to feel that the
resources OF the trust company are
In any sense behind those bonds as q
guarantee Of value. There are almost
as many different kinds of trusts" cs
there are different transactions: the
trust company undertakes the respou-
sfbflity of doing a certain definite and
particular thing and nothing more:
1t may be to foreclose IL . mortgage
Is not paid. or 1t may be to issue 90
many shares Of certain stock to q
certain person whez a stipulated mum.
Der OF shares of another issue are
surrendered.
But there are very few men even
fairly familiar with business routine
WHO do not form an impression that.
somehow. the big trust company Is
behind the stocks for which It acts a.
transfer agent or perform any other
act OF trustship. It is almost impossi.
bio to drive this idea out of the minds
OF me1 who are not really familiar
With corporation matters from an in.
side viewpoint. They will insist upon
attaching to . limited service an un.
limited moral and financial responsi.
bility that does not exist.
1t is. therefore. of the highest possi.
BILE importance II you find yourself
tempted to 60 into an investment. that
you learn from the trust company
mentioned In the literature of the ven.
ture exactly what trust It has un.
dertaken to perform. II it is q really
reliable and established trust com.
pany with . genuine financial stand.
ing 1t viii make the limitations of fts
trust very cieA-' e yOI: n Wlil take
special pains to make you understand.
for example. that its only function
in the matter in question and in con.
nection with tie company concerned,
is the purely technical one of seeing
that a certain issue of bonds is
made in form" when the technical
preliminaries have been complied
with and that 1t does not give an
ounce of its prestige or moral support
to the bonds themselves or stand le.
gally bound for a penny of responsi.
bility in connection with them. An
other word of caution: Whenever
you see the name of an educator. q
pastor or a popular politician or any
other leader having hold on the SEN
timent of community, used in connec-
tion with an investment Offering, look
into it carefully and take no step until
the person mentioned has been ques.
toned directly by you.
I know of an instance where the
poor people of a parish were victim.
lied because the INSCRIPTIONS agent
had attached to his prospectuses and
circulars the name of a popular priest
of that region. These poor victims. in
stead Of going to the reference" sim
ply said: IF the fathers In It, sure
it's all right" and they were relieved
of their savings before the father
learned of the use of his name-which
was wholly without his knowledge.
The solicitors for this swindle had
played q bold game and banked on
their knowledge Of human nature to
the effect that most persons will take
a reference" for granted instead of
1lsing it for the purpose of seeking in
formation. There are very few of the
lists of men and business or financial
houses named as references in the lit
erature of scaly investment concerns.
which do not contain some unauthor.
lied names-names of some persons
who. il questioned, would have given
a warning instead of an endorsement
Copyright. by Joseph b. Bowles.)