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

listed in Honolulu since 1898 and have
successfully demonstrated their use
fulness, 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
teTests of our community. -: g.
Many do not appreciate that the
trust company occupies a distinct
field, and has a mission ute 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 greater power in
guarding the wealth of individuals, as
we'll as corporations. than any other.
class of financial institutions.
Over Million.
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 1t is pledged by
them as security to protect the trusts.
that have been conf1ded to them. OF
this figure, the increase during 1912
was $1S1 ,679.7s, or a gain of Fl per
cent
Thirty-fiye Billions.
It 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-fve 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.
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 OF the
people In many states. trust conf.
pany may hold both. but the idea of
separating the business of earring for
funds from that of property is grow
ing.
The laws of some states provide.
that trust companies doing a 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
unduiy 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. 49,.
Many of the leading citizens recog-
nize 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. a.. ~ 4
Widows and orphanse are often
helpless in financial matters, and the
temptation is, therefore, great where
an INSCRIPTIONS person Is placed in
sole charge of an estate asfjtrustee,
executor or administrator, to misuse
funds or property in bis care. In.
Philadelphia recently a prominent citi-
zen committed suicide after an ex-
posture for having appropriated large
amount of property and money left In
bis sole care. In fact, the court rec
ords on the mainland contain great
many proofs to warrant the statement
that every year there are millions OF
dollars worth of estate, funds and
property 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-
ecutors or administrators to make and
file their accounts, which does not en-
list to so great an extent in the case
of trust companies.
roviding Safeguards. -......
1t is in avoiding just such losses
and in providing greater safeguards
than any one individual can give, thai
the trust company fills it's greater
mission. Instead of an estate being in
the hands of only ore person who
may abscond, speculate or even falsify
the accounts. whens- the property is
conveyed to a trust company as truS-
tee, executor or administrator, there
is whole staff of experienced men
taking part and checking each other; |
and board of eminent business mc1 |
who serve as directors; besides many |
other features of protection which arc |
provided. The trust company cannot
commit suicide, it lives from genera |
ton to generation When an indi- !
Vidual trustee dies, the court is apt TO |
appoint someone to manage the estate |
and succeed him who was utterly un |
known to the testator. The trust |
company cannot run away with funds |
in its keeping. 1t cannot go OF a va