these institutions are among the leading advertisers. Accordingly, the Advertising Manager of an enterprising company has an important mission to perform, and must be a man of experience in his line, of ideas and of industry in the pursuit of new and attractive ways of drawing public attention to his company. In his work he has the assistance of several stenographers, who prepare and maintain advertising lists and send out advertising matter.

Many companies now include in their regular force an Auditor, who gives his time to auditing all departments, preventing or detecting defalcations, seeing that the orders of the executive officers as to methods of work are carried out, suggesting to employees improvements in their work and devising improved forms, records and systems. He reports directly to the chief executive, or preferably to the Board of Directors, at regular intervals and whenever occasion demands.

An indispensable official in a trust company is an attorney, or firm of attorneys. Sometimes he devotes his whole time to the company, but more often there is a working agreement by which his services are at the disposal of any member of the working force, officers or employees, whenever needed. Some companies have an official known as the Office Attorney. Unless the Trust Officer or other official is an experienced attorney who is capable of passing upon legal or semi-legal questions which are apt to arise at any moment in the work of the trust department, it is of the utmost importance to have a competent attorney within easy reach. The duties of this official are, of course, mainly advisory.

CHAPTER VII.

FORMS AND RECORDS FOR THE TRUST DEPARTMENT.

IT

T is a trite but eminently correct remark to make regarding the books and records of any financial institution, that they ought to be as simple, clear and accurate as skill and experience can make them. The remark applies with special force to the books and records of the trust company, and especially to those of its trust department. Here is need of special care, because of the fiduciary nature of the business, because of the necessity of using the records as the basis of frequent reports to the beneficiaries of the various trusts and to the courts, because the history of business handled in trust for others ought to be complete and selfexplanatory.

The wise trust department manager will therefore see to it that provision is made at the start for books and records that shall approach the golden mean between the two extremes of too great fullness of detail and the unnecessary labor and time required thereby, and of too little fullness and detail, resulting either in fatal omission of facts that may be of the utmost importance, or in the waste of much labor and time in the work of supplying the omitted information.

To attain to such an ideal set of books requires large experience and careful study, together with a liberal endowment of "common sense." The records will be inadequate if they do not contain a complete history of all the essential matters pertaining to the trust; they will be cumbersome and unwieldy if they contain more than such necessary information. Yet it is safer to err on the side of too great fullness, if one must err at all, and it is better for the forms for the records to contain blank spaces for details which the intelligent bookkeeper may omit at his discretion in particular cases, than to make no provision to suggest such details to the careless, lazy or incompetent worker.

The matter of simplicity and clearness is of the greatest importance from many standpoints. The books ought to be simple enough to be understood by any officer or intelligent employee of the company, without the necessity of special experience or explanation. This has been learned by costly experience in many institutions. The writer knows of one case in which a company had a set of books so complex that the man who regularly kept them was the only one in the company, officers included, who could interpret them without much study. When he was out for lunch or away for the day, it was necessary to await his return to ascertain the simplest facts regarding those accounts. The books were devised by an expert accountant, were perfect from the theoretical standpoint, and were beautifully arranged by the printer, but they required an expert to translate them, and were soon discarded. Similar experiences have been

met with by many companies, and there is a distinct trend towards simplicity by the older institutions.

Another consideration is that the bookkeeper on any particular set of books may at any time meet with accident or sickness which may occasion his long absence or death; and it is obviously important that another man be able to take his place without the necessity of a long course of training, or the making of numerous errors in starting the new work.

Where it can be afforded, it is of decided advantage to have the books specially prepared with printed headings for the various columns and spaces. To the man who works on the books daily, these headings may seem unnecessary; he knows what the various spaces are for without the labels. But it is not enough to have the books understood by the man who keeps them; they must be readily understandable by any intelligent person, so that the officers may know the state of things at a glance, and so that a new man may take up the work at any time. This proposition seems clear enough on its face, yet it is astonishing how little it is heeded by some institutions.

Because of the frequent reports required, it is of great advantage to have the records in such form that the stenographer may copy them on the typewriter just as they stand. This precaution saves a great amount of work and many errors.

There should be a general system of accounting, of which each book and record is a part, and through all of them should run a chain of entries that binds them together. This insures accuracy and prevents manipulation. The source of each entry should be readily ascertainable.

Some companies, especially where loose-leaf books are used, consider it of advantage to have all leaves of the same size, thus insuring uniformity in the sizes of all the books and records. This adds much to neatness and general appearance, and is often of convenience. If this is done, the size should be large enough for those records which need considerable space. This requires making some records larger than necessary, but the fault is not a bad one. The size used by one of the best companies is 153 inches high by 137% inches wide. This makes a book of convenient shape and size.

USE OF LOOSE-LEAF BOOKS AND CARDS.

The question of the use of loose-leaf books and records is one on which opinions differ, and the opinions for and against their use are often quite emphatic. That they are convenient is generally conceded. The essential objection urged against them is the ease with which leaves may be removed, and the records be changed or the leaves be lost. This objection is largely removed by the plan of having the keys to the books in the sole charge of one official or trusted clerk, who is held responsible for any irregularities due to removal of leaves. Where there is objection to the general use of loose-leaf records, they may be used only on ledgers and other secondary books, the books of original entry being bound in the

usual way. It argues much for the convenience and safety of the system that few cases are on record where a company has discarded loose-leaf books after having given them a trial.

The use of card records is open to much the same objections as the loose-leaf book, and its advantages are of the same kind, but more pronounced where adapted to the needs. The use of cards for various purposes is steadily growing, and in many institutions has entirely displaced books in some departments.

Of course the cash and securities should not be in the keeping of the ones who keep the records concerning them. Audits should be made at frequent and irregular intervals, and the cash and securities on hand must then agree with the amounts called for on the books kept by another.

However complete and carefully arranged the set of books may be, the matter of accuracy and care in their keeping depends upon the men who do the work day by day. The books of the trust department ought never, even for a day, to be in the charge of novices or incompetents. The best bookkeepers in the institution ought to be in charge of these books. They ought to be well paid and well treated. This is done in most of the best-managed institutions. In others there seems to be a lack of appreciation of the importance of such work. The writer knows of an instance in the metropolis of the country where an unusually competent and painstaking manager of the book-keeping department was informed that, as his department added nothing to the earnings of the company, its expenses must be kept down to the lowest possible figure! The shallowness of such an argument is obvious enough.

The number and kinds of books needed by the trust department depend upon the size of the company and the character of its business. Trust business necessarily accumulates slowly and usually requires years. to reach considerable proportions. The greater part of the business of the average trust company, especially of the small and the new ones, is in the banking department, and what trust records are necessary may often be kept in the general ledger. In the following pages will be given descriptions of the books, records and forms required by companies 'doing considerable trust business. Many of these are not needed at all by the smaller companies, and often two or more of them may be combined in one book. There is such variety of business done by different companies that it is quite impossible to devise sets of books applicable to all, and cach company is under the necessity of devising books suited to its individual needs. To what extent it is desirable to discount the future in a new company, and to provide at once sets of books in anticipation of a large and diversified trust business, will necessarily depend upon the individual prospects of the company.

RELATION OF THE TRUST BOOKS TO THE GENERAL BOOKS.

It is usual for the trust department (or departments) to keep separate records of its own work. For its cash it keeps an account with the bank

ing department just as any customer would; and some companies keep bank accounts for some of their trust funds with other trust companies or banks. Only the totals of such accounts appear on the general or individual books of the company. For example, if at any time the trust department has on hand $300,000 in cash, accumulated or awaiting investment, such sum appears on the books of the banking department as a deposit to the credit of the trust department. Regarding the details of this deposit the banking department has no more to do than with the details of the deposit of any customer.

THE TRUST REGISTER.

When a new trust is taken on by the company, the first book in which record needs to be made is the trust register or register of trusts. The purpose of this book is to give a list of the trusts held by the company, together with a concise history of each trust, its conditions, etc. Some companies use two or more books for this purpose, keeping trusts received

through the probate court in one book, and other trusts in another book. Considerable discussion on the wisdom of this course was brought out at the meeting of the Trust Company Section of the American Bankers' Association at Milwaukee in 1901.70 The best usage seems to be to have but one trust register in which are kept records of all trusts, from whatever source.

In 1900 a committee was appointed by the Trust Company Section of the American Bankers' Association to print a book of trust company forms. In Fig. 1 is given the register of trusts recommended by this committee, with sample entries. When a trust is received, memorandum of same is at once made on this register, and the trust is given the next consecutive number. By this number it is thereafter known, and its papers and securities are filed under that number. This is not only a great convenience when the number of trusts becomes large, but is a decided safeguard in filing documents. It becomes of special importance,

70 Proceedings Trust Company Section American Bankers' Association, 1901, pp. 22-27.