tal and such money as is received from persons or associations for investment, "in good securities; and it shall be lawful for such association to make investments of its capital and of funds accumulated by its business, and moneys received from other persons and associations, for investment as aforesaid, or any part thereof, in bonds and mortgages on unincumbered real estate and chattel property worth at least double the amount loaned, and also in any and all warrants and bonds of this State or any other State or Territory or of the United States, or the bonds and warrants of any county, city, town, or school district of this State legally authorized to issue such warrants or bonds."

Such companies must maintain a reserve of twenty-five per centum of their liabilities to depositors, which reserve shall consist of cash on hand or on demand deposit with State or National banks approved by the State Examiner as reserve agents. Such a corporation may mortgage its real or personal property and pledge or hypothecate its notes, mortgages and other securities, and guarantee payment of the same, to persons or corporations furnishing it money. Stockholders are subject to double liability. A section of the statutes which forbade such companies to receive deposits subject to check, and to buy commercial paper, etc., was repealed in 1903.

(Revised Statutes, 1899, division 2, title 4, chapter 2, §§ 3085, 3086, 3128-3139. Laws of 1903, page 59, Act of February 20, 1903. Laws of 1905, chapter 78; Laws of 1907, chapter 78.)

IT

CHAPTER VI.

ORGANIZATION OF THE WORKING FORCE.

T is difficult to find two trust companies the scope of whose business is exactly the same; and because of this fact, and because these institutions are still in the formative period, the plans under which the working forces of trust companies are organized are nearly as numerous as the companies themselves. There is some variety in the titles given to different officers and employees, and great variety in the duties which such officers and employees are called upon to perform. It is therefore quite out of the question to treat the subject as one might write of banks, where the names given the several workers, and the duties which they perform, are, within certain limits, pretty well defined. The average trust company worker, outside of the banking department, is usually called upon to do service of a more varied nature than that of the average bank employee.

The organization of the working force depends, in the first instance, upon the character and amount of the company's business. If it is practically a bank operating under the name of a trust company, as is often the case, its working force will be organized in a manner differing little from that of an ordinary bank. Its active head, where the President or a Vice-President is not an active official, is apt to be called the Secretary and Treasurer, or the Treasurer, rather than the Cashier; although the latter title is frequently used in the South and in the West. Where the business of the company is large and diversified, requiring a considerable number of officers, the titles most commonly given are President, VicePresidents, Treasurer, Secretary (or Secretary and Treasurer), Assistant Secretaries and Assistant Treasurers. Among other titles found are Attorney, Trust Officer, Auditor, Advertising Manager, Manager of the Bond Department, Manager of the Safe-Deposit Department, and Manager of the Real Estate Department.

DUTIES OF THE VARIOUS OFFICERS.

The titles given trust company officials do not necessarily convey any idea of their duties. While the President is sometimes the active head of the company, he is more often not active, devoting to the company's affairs only so much time as is necessary to preside at directors' meetings, serve on certain committees, and act in an advisory capacity. In such case, the active management devolves sometimes upon a Vice-President, sometimes upon the Treasurer, occasionally upon the Secretary, but most often upon the Secretary and Treasurer. Where the Secretary and the Treasurer are not the same man, the duties of the Treasurer are apt to be connected with the banking department, and those of the Secretary

with the trust department, but instances are numerous where no attention is paid to titles in the assignment of the duties of the different officers. The titles of other officers, like that of Trust Officer, are more descriptive of their duties.

The accompanying chart is designed to show the general organization of the working force of a trust company doing a considerable business in trust, banking and kindred lines of business. It represents no particular company, but the attempt has been made to incorporate the arrangements most common among a number of companies examined, the type of company represented being that in the large cities of the Middle States. Of course the various lines of work will be combined so as to be done by fewer workers if the company be smaller than the one for which the chart is designed, and will be distributed among more workers if the company be larger. The assignment of responsibilities among the Assistant Secretaries and Treasurers is purely arbitrary, and in a given company may be quite different from that shown in the chart; such assignments usually and properly depending more upon the personal fitness and experience of the various officers than upon their titles. A newly-organized company is apt to pay more attention to the relationship of titles and duties than an old company, where the different men have grown to their titles, their duties having been well established before the titles were given.

Reading horizontally, the arrangement of the chart is designed to show the superior officer to whom each worker is responsible. Reading vertically, no effort has been made to show the relative standing of the officers and employees. Thus, each worker in the column beginning "Assistant Treasurer" is responsible directly to the Secretary and Treasurer. Reading horizontally, one may see the special department of which each officer or worker is in charge, and the various employees who report directly to him. The question as to which of the under officers is in direct line of promotion depends upon the man rather than upon the position.

Whatever title be given the official who has active charge of the company, he is the man who is immediately responsible to the directors, and through them to the stockholders, for the general conduct of the institution. Upon his shoulders rests the general supervision of the affairs of the company; to him the lesser officials report, and under his general direction they administer the business of their several departments. Matters of detail are as a rule not brought to his attention, but his strength and time should be reserved for the consideration and determination of general policies. He is, of course, the one upon whom rests the responsibility for the safe and profitable investment of the funds of the company and of the funds which the company holds in trust. Such investments, however, especially those of trust funds, are not usually made upon his sole responsibility, but are determined by an investment committee, of which he is the most influential member. The laws of many of the States

Might Watchman

Manager Bond Department - Assistant

Advertising Manager - Stenographers
Auditor - Examines all departments

Attorney

Consulted by officers and employees in all departments

Chart D, showing the organization of the working force of a trust company.

prescribe the classes of investments permitted for trust funds, and for the general funds of the trust companies; and within the limits allowed by law, many companies by by-law or resolution of the board of directors prescribe the classes of investments in which their different funds shall be placed. These limitations, if wisely made, tend towards safety and lessen the responsibility of the chief executive of the company. If unwisely made, their effect is quite the reverse. In the matter of loans, the chief executive is usually the man who decides, but the loans made are regularly and frequently reported to the finance committee or executive committee, by whom large loans are ordinarily authorized in advance. This officer is responsible for the records of the directors' meetings, and of the meetings of the executive committee.

ant.

In a large institution the Secretary-Treasurer will hardly have time and strength to look after all the general executive work of the company, and another officer is apt to be named to act as his general assistIn the chart this officer is an Assistant Treasurer. He decides those matters of general management with which he thinks it unnecessary to trouble the Secretary-Treasurer. He has charge of the general correspondence, himself dictating such letters as he sees fit, and distributing, through an office boy, the other letters to the heads of the various departments. He has general charge of the loans, carrying out the orders of the executive committee, and taking a varying amount of responsibility in decisions on loans of small amounts. He has charge of the collaterals given for loans, and of the investments made by the company; a frequent arrangement being that he shall have access to the latter only in company with another officer or trusted employee. Upon him rests the responsibility of seeing that coupons and other forms of income on investments are collected at maturity. He approves and initials expense vouchers, exercises general supervision over the expenditures of the company, and places orders for supplies needed as such needs are reported to him by the Stores Clerk.

The Loan Clerk has direct charge of the details involved in the handling of loans. Through his window he meets the customers whose applications for loans have been approved, sees that their notes are properly made out, signed, endorsed, etc.; that they are accompanied by the proper collateral, if collateral loans, and that such collateral is correctly transferred to the company; and, if mortgage loans, that the mortgage is in correct form and accompanied by an abstract of title or title insurance policy correctly describing the property and showing clear title, and by insurance policies properly assigned, if needed. He figures interest, sends notices of and collects same. He receives payments on loans, either partial or complete, and endorses same on the notes or cancels and delivers the notes. He keeps records showing all necessary information regarding the loans, including the balance on each loan and the interest payments. He keeps line cards or records, showing the total loaned on each particular collateral, and keeps track of daily quotations