New-York tribune., 1910-10-06
TRUST COMPANY METHODS
William C. PoiIIon Against Loans
on Personal Credit.
AT BANKERS CONVENTION
Edward o. Stanley Speaks In
Favor Of Charge for the Care
of Small Accounts.

Los Angeles. oct. 5.-The advantage TO
the trust company in making loans upon
marketable collateral rather than upon per
soual credit vas discussed to-day by Will
sam c. Poiuon. vice-president Of the Mer-
camille Trust Company, Of New York, be-
FORE tie trust company section Of the
American Bankers Association Mr. Poll
Jon said, in part
We arc al familiar with the claim Of
srsuv years standing that no class OF bank
loans is SO safe and desirable as good,
double named. commercial paper, and TINS
as almost universally accepted as true by
she bankers Of the country.
Nevertheless. / am Of the opinion thar
wear By year a larger percentage OF Ihe
sotal loans Of the banking institutions OF
fhe United States VIII be made upon mar
ketable collateral rather than upon unse-
cured personal credit. - =
In the term marketable collateraF' 1
sDrIude loans upon commodities, such as
Grain. cotton, livestock. coal ores an1
r,o-aIS as wen as bonds and stocks or
municipalities and corporations
n IS true that only small percentase. OF
sf7e large amount Of commercial paper dis
counted by banks is defaulted upon- yet the
,-sl,se OF the failure of hundreds OF bank
s-- institutions in the United states has
,-,Saor1tedlv been the inability Of these IN
sfitIlrions to realize upon their discounts 10
customers at maturity. even in times OF no
-,arricl.lar monetary strlnge1cy: whereas j
rrri,- nsrr of these loans had been secured
r. marketable collateral. payment would
have been made at maturity IN most cases
when required
Edward o. Stanley. vice-president Of the
Title Guarantee and Trust Company, New
York. spoke on Shall Trust Companies
charge for the Care Of Small Accounts -
lie said IN part:
The privileges which a bank extends 70
S. customers are Of q positive Nalle. Ihey
F-e costly 70 the banker and must in some
~sv be paid for by the depositor II al
snalySis Of an account shows Jhal- ueuuCA-
tng the checks ont for collection sna ne lls
percentage required by the state law 20 oe
maintained as reserve. there Il ieEI 10 De
loaned q balance small as 70 ne OF bCl
little value TO the banker, Il : quite est- sa
cent that he must in some way seek L LoL
remuneration II he Is TO continue 10 ceiL ,
such accounts IN his institution Halher
shan 10 require the Withdrawal OF alL a. a.
counts Of this class we believe II 10 be me
letter rkoIicy 70 continue the account ana
10 make = small monthly or quarterly
oil5'E - sr -'a socount be small and also very
r--ive requiring much bookkeeping anu
Truch tellers and correspondence VOTE IN
rsying the debts and collecting the creolls,
with a very small actual ha1ancer II Il
clearly improbable. ,,-- -.
Among the small accounts viii usually be
found nearly all OF the IIls4llSL1Soti a. 20
s-oublesou ne customers Il the aCoptIou O. o.
shis policy shall result in the elIrl!naIlo--
Il some OF them. we think that the hankeT
viii welcome the release from this TouDls
rather than regret rrelr departure
Absolutely Cuiet accounts. giving no
trouble with but little bookkeeping or
either side Of the ledger accounts hopeLI -
uf growth. and especially those "leIe " "
dealers NAV have other dno larger
Couuts sho1ld not be included IN lle hs'
- be charged Tor -
n the absence Of Il. ?. Mcintosh, presl'
rent Of the trust company section Vice
PRESIDENT Fuller read Mr.. 1TcIntosh's an
--,zl address. NTr. Mcintosh devoted his
s7aper chiefly TO recommendations among
which were these:
The appointment Of Il committee 70 Pro
mote uniform system OF accounting lot
trust companies.
IN organized movement TO bring ABOUT
legislation permitting, = not making com
.sulsorv the certifCaton cot municipal
bonds by trust companies.
TusfStenCe upon state examination O.
s-uS- comDantes in every state
The liquidation Of inSOlvent trust com
y7anies BIZ state superiut endents Of banks
sugres6 OF b- receivers appointed bS
courts. as Is the general practice.
Y. ". Baldwin. assistant treasurer Of
ERE Citizens Savings and Trust Company
Cf Cleveland spoke on The advisabllity
srF z trust company maintaining an audit
s-e 6epartueut, rather than having audits
from the outside
The report Of the executive committee
-~as read by Lawrence /. Gillespie, chair
nan.