The Greenville journal. [volume] (Greenville, Ohio) 1850-1918, 1908-01-23

bANbNAAy VI SSGuIltleSs WITHOUT really
assuming any general financial or
moral responsibility for those securl.
ties or without becoming a sponsor
for them. In a word, the trust com.
pany may engage to act as an escrow
agent to see that a 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 as to the value
OF those stakes or what may be done
WIN them after the stipulations as to
the conditions precedent to delivery
nave been fulfilled. Because a trust
company acts as the trustee of a Ger.
tain bond issue there is no warrant for
a prospective investor to feel that the
resources of the trust company are
IN any sense behind those bonds as a
guarantee of value. There are almost
as many different kinds of trusts" IS
there are different transactions. the
trust company undertakes the respon.
Sloillty OF doing a certain definite and
particular thing and nothing more:
II may be to foreclose if a mortgage
Is not paid, or it may be to issue so
many shares of a certain stock tn a
certain person wher a stipulated mum.
Der of shares of another issue are
surrendered.
But there are very few men even
falrly familiar with business routine
WAo do not form an impression that,
somehow, the big trust company is
Dehlnd the stocks for which it acts as
transfer agent or perform any other
act OF trustship. 1t is almost impossi.
Dle to drive this idea out of the minds
OF men who are not really familiar
with corporation matters from an in.
side viewpoint. They will insist upon
attaching to a limited service an un.
limited moral and financial responsi.
bility that does not exist.
1t is, therefore, of the highest possi.
Bile Importance if you find yourself
tempted to go into an investment that
you learn from the trust companv
mentioned in the literature of the ven.
lure exactly what trust" it has un.
dertaken to perform. If it is a really
reliable and established trust com.
pany with a genuine financial stand.
ing it will make the limitations of its
trusC very ciea4' IC Jud; IL Will TAKE
special pains to make you understand.
for example, that it's only function
in the matter in question and in con.
nection with the 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 it does not give an
ounce of its prestige or moral support
to the bonds themselves or stand lie.
gally bound for penny of responsi.
bility in connection with them An.
other word of caution: Whenever
you see the name of an educator, a
pastor or popular politician or any
other leader having hold on the sen.
timent of community, used in connec.
ton with an investment offering, look
into it carefully and take no step until
the person mentioned has been cues.
toned directly by you.
l 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 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 a bold game and banked on
their knowledge of human nature to
the effect that most persons will take
a reference" for granted instead Of
using 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, if questioned, would have given
a warning instead of an endorsement
Copyright, by Joseph B. Bowles)