The Washington herald., 1918-03-07
MADE
BY TRUST COS.
Giant N. Y. Financial Insti-
tutions Combine to Make
Larger, Says Holland.

Die. It not infrequently happened.
however. that the trust institutions
we're compelled to carry the stocks
Which they underwrote. So grad
ially these institutions expanded
heir business until they became to
greater extent commercial bank in
Itttutions than those occupied with
business Of trusteeship. At last
some of them ventured into the
Held OF foreign exchange and one
Of them in a single year recently
handled considerably more than
one-half of all the foreign exchange
which Represented our cotton ex-
ports to Europe.
There occasionally arose suspicion
that some of the trust company
managers were tempted to venture
Into speculation not on their own
account but for gaining large pro-
tits for the institution Gradually
but steadily the trust institutions
ire accepting membership in the
Federal Reserve system. and an as
sociation OF that kind while it Is
likely to increase the safe and prof
table. business of the trust insti-
tutions who otherwise might be
/
that 1t would prove favorable and
yield large profits to the institution.
II has been observed that those who
have been seeking railroad transpor-
lation to the South. especially to Flor
Ida, and also to other Southern re-
4 sorts, have had less difficulty in Sc
I curing transportation than was the
N,ase last year. 1t often happened in
Ihe early winter of 1917 that those who
sought transportation were obliged to
secure reservations at least two weeks
ahead Of the day set for their de-
parture from New York. This year IL
mas been found easier to secure reser-
vations, and, Furthermore, reports
have come from those who have gone
South that the trains are running
more regularly and are not so inva-
riably behind time as was the case last
year. Travel TO the Southern resorts
Is very heavy. To some Of them Of
hcers OF the government or business
men who have been aiding the gov
ernment have resorted for a few days
rest, as for instance, Gen. Squier. the
chief ofiicer Of the Signal Bureau. who
has been almost overwhelmed with
work and responsibilities. found it ex-
pediept, even necessary, to obtain such
recreation and rest as a sotourn OF a
week or so at Miami would make pos
sible. He was fortunate in meeting
there Glen Curtiss, who also sought a
few days rest The meeting was
especially gratifying since IL was with
Mr.. Curtiss that Gen. Squier took his
first ride in the air in one OF the Cur
tiss machines.
The belief is commonly held that
the mS=gsr OF the Central Trust
Company with the Union Trust
Company will be followed by other
cancellations which. when perfect
ed. will Fconsiderably reduce the
number Of trust institutions in New
York and in place Of them will es-
tablish four or Ave new and very
strong institutions. One of the
reasons given for the growth of
this tendency is the behef that syeh
before the close of the war and Ger
:ainly after the war is ended, the
7eadjustments in the Industrial and
business life of the United States
and also the readjustment of the
relation OF the railroads to the .peo-
pie, will entail such vast changes
rs to make it inevitable that strong
institutions. with sufficient capital
and large resources, be established.
This belief is reflected In the sup
port given by a majority of the
bankers to the plan for. creating a
great banking institution control
led by the government with capital
Of $500, 100000 and with the privi-
lege OF issuing notes up to $4,000
OOO.0OO.t
The changes in the management and
methods OF the trust institutions of
New York that have taken place in
the past twenty years are so great as
almost to revolutionlze the kind OF
banking which was at Arst carried on
by the! trust companies. Originally
these companies were organized sole
y for the. purpose OF acting as trus-
tees for estates. for mortsages and
for like purposes. They did not seek
a large deposit line. They transacted
little OF. no commercial business. For
some years it was the custom of the
trust Institutions which acted as
trustees for railroad mortgages or
which held securities in escrow to
charge a certain fixed rate propor-
tionate to the size Of the transaction
for this service. For instance the
rust Institutions were accustomed to
-harge at the rate OF 81 for each bond
,or coantersigning the bonds. The
aggregate OF these transactions in the
course Of a year represented a con-
hderable revenue. Nobody thought
The price was excessive. It was an
established custom.
The Arst trust institution to break
Tway from this custom was the Cen
.ral Trust which Is about to complete
4 merger with the Union Trust. To
F@L
trust institutions the announcement
was made that the Central Trust
would thereafter exact no more than
80 cents for countersigning a bond.
subsequently this price was reduced
The example was followed and was
even exceeded by a Boston trust in
stitution which fixed the price for
countersigning bonds at 10 cents per
|. bond.
The belief Is growing stronger and
q stronger and has been confirmed by
sthe experiences of this winter that
after the war Is ended. those who have
the means and the time for a few
weeks recreation or even for a CON-
siderable sojourn at places remote
from the North will substitute the
Southern resorts for the trips which
before the war they were accustomed
to make to Europe. The South
especially Fiorida-and to some ex-
tent Cuba, are hereafter to be the
pleasure resorts OF many thousand
Who, had there been no war, would
have turned their faces towards En-
rope. Moreover the number of busi-
ness men IN the North who are estab-
fishing for themselves private homes
in the south Is rapidly increasing
and the time IL not distant when
great colonies, so to speak. Of blIsi-
ness men and their families will be