Evening star. [volume] (Washington, D.C.) 1854-1972, 1918-10-02
LARGER TRUST POWERS
GIVEN NATIONAL BANKS
BY, I. A. FLEMING

John Shelton Williams. controlh.r of
the currency, has just made pablo a
circular letter calling attention. to a
recent amendment to the federal re-
serve law which has received the ap-
prevail of the President ani is there
fore part Of the financial pleasure.
By the amendment enlarged powers
are granted to national banks. They
may now open trust departments. act
as trustee. executor, administrator,
registrar of stocks and bonds. guar
dian of estates. assignee, receiver,
committee of estates and lunaticS. and
act lin any other fl iuciary capacity in
which state banks. trust companies or
other corporations which come into
permitted to act under the laws of the
state in which the national bank is
located"
Permit Is Needed.
AS preliminary to the exercise Of
these new powers it is necessary to
obtain a srmi, from the Federal Re
serve Boa rd. National banks obtain
ing such permits must have a capital
and surplus required by state law
govern ng state banks, trust COM
panies and other corporations exer-
cislng such powers.
This means that banks exercising
these functions in the District of Co
!umb IA must have capital of $1,000
o00' The requirement of a trust COM
panJ capitalization.
Among other conditions it is pro-
vl'led that national banks exercising
ire functions indicated shall not re-
ceive in it's trust department deposits
subject to check, drafts or bills Of
exchange or other items for collec-
! ton: funds deposited or held in trust
awaiting investment shall be carried
in separate account and shall not
be used by the bank in the conduct
of its business. unless it shah first
set aside. in the trust department,
United States bonds or other securi-
ties approved by the Federal Reserve
Board.
May Execute Bonds.
In the event of failure of a bank
acting in these capacities, the own
ers of the funds held for invest
the securities SO deposited in addi-
ton to their claims against the estate
of the bank. When the laws of a
state require a state bank acting as
in f1duciary capacity to deposit Sc
curities with the state authorities for
=
trusts the national bank so acting
must obey the law National banks
are Empowered to execute such bonds
when so required by the laws of
state.
Loans to officers and directors of
funds held in trust are unlawful.
The amended laws will be taken. ad-
vantage of by many national banks
having the needed capital, and there
are d number of banks in the Dis
trict that could, with small effort, in
crease their capitalization so as to be
able to take full advantage of the
privileges conferred.
Some Big Figures.
At the annual meeting Of the New
York Clearing House Association the
clearings for the year were given as
S174.524,170,02S. and the balances be-
tween banks as $17,235,O62,671.
The regular quarterly dividend of
"a per cent has been declared on the
common stock of the United Cigar
Stores Company.
On the Stock Exchange.
Transactions on today's session of
the local stock exchange included
Capital Traction SIS at 80 and Wash
ington Gas 5s at 95. In the stock list
ten shares of Mergenthaler sold at
113, and after the call ten shares
brought 1133s. Railway preferred sold