Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1913-04-11
Present Banking and Trust
Laws Have Worked Sue
CeSsfully = Statistics
Show Worth of
=..... System +. r.

fSted IN Honolulu since 1873 ana nave
successfully demonstrated their use
fitness, yet the average citizen has a
somewhat indefinite impression as to
the character of the service which
they offer. and the important place
they occupy in advancing financial in
teIests of our community. -
Many do not appreciate that the
trust company. occupies a distinct
field, and has mission quite different
from that of the banks, both CONNER
cial and saving. Because of the va
ried character of its functions, the
trust company has. been styled the
most modern mechanism in american
financial development; and as such
il has become a greater power in
guarding the wealth of individuals, as
we'll as corporations, than any other
class of financial institutions.
Over a Million. 49,. .
1t will surprise many familiar with
local affairs to state the fact that on
January / last, the combined capital
and surplus of the five trust COM
panies was $1,042,93S.75. This large
sum represents the amount of wealth
which composed the assets of these
companies, and all of it is pledged by
them as security to protect the trusts
that have been confided to them. OF
this figure, the increase during 1912
was sS1S1, 679.7S, or gain of q per
cent. =.
Thirty-five Billions. -. K -.
1t will stagger the imagination to
state the fact. that the trust COM
panies of the United States have in
their control, wealth to the value of
thirty-ffve billion dollars, which is
more than one-fourth the total wealth
of the nation, and fourteen billions of
dollars more than the combined bank
ing power of all the national banks
and state banks reporting to the
'.comptroller' of the currency.
Banking Laws. +. H..
The banking laws of most states
have been framed with the single pur-
pose in view of making the banks and
trust companies the safest deposita-
ries of the funds and property or the
people. In many states, trust conf
pany fmay hold both, but the idea of
separating the business of caring for
funds from that of property is grow
ing.
The laws of some states provide,
that trust companies doing banking
business must operate two distinct de-
partments. and they prohibit the min
Cling of their funds. They recognize
that there is always, in such cases. the
temptation to use one department to
unduly support the other. In Hawaii,
the laws so far, have confined the
business of trust companies to that
of handling property rather than
funds.
A Sacred DUTY.
Many of the leading citizens reeog-
rize the Importance Of providing for
their families or heirs when they pass
away. The civil, criminal and pro-
bate records of Hawaii, before the es-
Enlistment of trust companies and in
some instances since, offer eloquent
testimony as to the careless manner
in which wills are sometimes drawn
up, and the loss, waste or misuse of
trust funds, particularly where the
management has been placed in the
hands of incompetent or careless in
dividuals.
Widows and orphans are often
helpless in financial matters, and the
temptation is, therefore, great where
an INSCRIPTIONS person is placed in
sole charge of an estate as trustee,
executor or administrator, to misuse
funds or property in his care. In
Philadelphia recently prominent citi-
zen committed suicide after an ex-
posure for having appropriated large
amount of property and money left in
his sole care In, fact, the court rec
ords on the mainland contain a great
many proofs to warrant the statement
that every year there are millions OF
dollars worth of estate, funds and
wasted. or diverted, because
Of the irresponsible stewardship. The
officials of our own courts testify to
the fact, that there is constant neces-
sity of urging individual trustees ex-l
eeutors or administrators to make and
file their accounts, which does not ex
list to sokgreat an extent in the case
of trust companies, -. T.. .,s..s.4
Providing Safeguards. " ~ = IL.
1t is in avoiding just such losses
and in providing greater safeguards
than any one individual can give, tina:
the. trust company fills its greater
Instead of an estate being in
the hands of only one person who
may abscond. speculate or even falsify
the accounts, when the property is
conveyed to trust company as trus-
tee, executor or adminfstr htor, there
is whole staff of experienced men
taking part and checking each other;
and a beard Of eminent business men
who serve as directors; besides many
other features of protection which arc
provided The trust company canuct
commit suicide, it lives from genera
ton to generation. When an indi-
yidual trustee dies. the court is apt to
appoint someone to manage the estate
md succeed him who was utterly I'M
known to the testator Tho trust
cannot run away with funds
in its keeping. Il cannot go on va
cation, become the victim Of bad hak