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permanent location, gives an impression of stability, and often proves of value as an investment. Frequently it is the only means of getting the exact location desired, or of insuring the most convenient arrangement of the offices.

Whether occupying its own building or rented quarters, the progressive company finds it profitable to maintain offices which are attractive and convenient. The standard of office equipment is such that the public expects a bank or trust company to occupy well furnished quarters, so that the cost of a good equipment is more than repaid in advertising value. The lobby should be provided with all possible conveniences for customers, including writing-desks supplied with good ink, clean pens and blotters, comfortable chairs, etc. The larger companies often provide separate reading and lounging-rooms for customers, with current newspapers and magazines, writing-desks and other conveniences, and committeerooms for the use of customers who wish to meet to arrange details of business. In many cases there are special quarters for women, equipped with numerous conveniences and in charge of a matron who looks after the comfort of patrons.

The quarters of tellers, bookkeepers and other employees should be arranged and equipped with a view to safety, neatness, convenience, saving of time and labor and the health of the workers. Attention to these matters is amply repaid in better service. The matters of light and fresh air are of special importance; when possible the arrangement should be such that the light comes from back of the workers, and a well-considered ventilating system should be adopted. There is economy in the use of up-to-date office furniture and conveniences. Steel is coming to take the place of wood in the construction of filing cases and cabinets for keeping papers and records which are brought out of the yaults during the day.

In the general arrangement of the offices the quarters of the banking and savings departments usually occupy the location most convenient for customers. The trust and other departments having fewer visitors are located at the rear of the room or on other floors if the company occupies more than the ground floor. The safe-deposit department is usually located in the basement, but is sometimes on the ground floor. In the large companies the equipment of this department is expensive and as nearly perfect in the safeguards provided as modern science can make it. Besides being constructed of hardened steel with massive doors opened with time locks, the vaults are protected by watchmen on duty day and night and in many cities by electrical attachments which if tampered with sound an alarm at the offices of detectives who are prepared to investigate at once.

EXCLUSIVE TRUST COMPANY BUILDINGS.

In places where the price of land is not very high, it is generally agreed that it is of more advantage for a trust company to occupy a building devoted exclusively to its use than to have quarters in an office building. In large centres where the price of land is very high and the possibility

exists of large income from the rentals of an office building, there is quite a wide difference of opinion as to whether the advantages gained by an exclusive trust company building offset the giving up of opportunities for revenue from an office building. It is interesting to note that a number of prominent and successful trust companies, as well as banks, in several large cities have had faith enough in exclusive bank buildings to make the investment, and that their success in the instances in which the buildings have stood for several years has justified their faith. Among the companies now occupying such exclusive trust company buildings or having them in course of construction are: The Mississippi Valley Trust Company and the Mercantile Trust Company of St. Louis, both of which were pioneers in this movement; The Illinois Trust and Savings Bank, The Northern Trust Company and the Central Trust Company of Illinois, of Chicago; The Cleveland Trust Company of Cleveland; The Commercial Trust and Savings Bank of New Orleans; The People's Trust Company, The Title Guarantee and Trust Company and the Knickerbocker Trust Company of New York; The New England Trust Company of Boston; The American Security and Trust Company of Washington; The Pennsylvania Company for Insurance on Lives and Granting Annuities, and The Girard Trust Company, of Philadelphia.

Whether such magnificent exclusive trust company buildings as these companies and others have are profitable from the standpoint of the company or not, there is no question that they add very materially to the beauty of the cities in which they are located, and reflect credit upon the public spirit of their builders. They mark a step toward the greater appreciation for art and architecture shown by the older cities of Europe, whose banks in most large centres greatly excel ours in this respect.

CHAPTER XVI.

THE DUTIES AND LIABILITIES OF TRUST COMPANIES ACTING IN VARIOUS CAPACITIES.77

TE of

DUTIES AS TRANSFER AGENT.

HE duty of the transfer agent is to act for the issuing corporation in the matter of making transfers of the ownership of its stock from one holder to another. This involves the passing upon the regularity and legality of the assignment of title; the noting of the transaction upon the transfer books of the corporation; the cancellation of the old certificates and the execution and delivery of new certificates. Incidentally it involves the furnishing to the corporation of a certified list of the stockholders whenever the books are closed for the payment of dividends, and at other times as demanded.

The performance of these duties requires that the transfer agent be the custodian of the stock books and the seal of the issuing corporation and of a supply of blank certificates. The certificates, bound in book form so that each certificate and its stub form one page, and numbered consecutively, are before delivery to the transfer agent signed by the proper officers of the corporation. The face of the certificate usually contains the provision that it is not valid unless countersigned by the transfer agent. On its back is usually printed an assignment of the stock and an irrevocable power of attorney, of which the following is a common form:

"For value received

fer unto ....

......

hereby sell, assign and trans-
.. the shares of capital

stock represented by the within certificate, and do hereby
irrevocably constitute and appoint

....

attorney to transfer the said stock on the books of the with-
in-named company, with full power of substitution in the
premises.

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77 While the duties of trust companies acting in various fiduciary capacities are fairly well established by custom and in some cases by legislative enactment, their exact liabilities, especially in corporate trusts, such as those of transfer agent and registrar, are sometimes undetermined either by statute or by court decisions, and are the subjects of wide differences of opinion among trust company officials and among lawyers. In the following discussion, so far as it relates to liabilities. the writer has endeavored to state the various positions taken by different writers quoted, to whom he wishes to acknowledge his indebtedness

Before making delivery of a certificate, the transfer agent dates it, fills in the name of the new holder and the number of shares represented, affixes the seal of the issuing corporation and attaches the proper signature to the transfer agent's certificate. The form of this certificate recommended by a committee of the Trust Company Section of the American Bankers' Association reads as follows:78

"Countersigned:

Trust Company, as Transfer Agent,
By.
Secretary."

At the time of accepting an appointment as transfer agent, trust companies require certain information from the issuing corporation regarding its organization and the issue of its stock, the exact nature and amount of such information varying according to the policy of the trust company. The following are the requirements published by The Old Colony Trust Company of Boston:

"Corporations desiring the trust company to act in either of these capacities (transfer agent or registrar) should submit the following papers. Additional papers will be called for if required:

(a) Certificate of incorporation of the company, certified by the Secretary of State of the state where the corporation is domiciled.

(b) Minutes of the organization meetings of the stockholders and directors of the company, showing compliance with the necessary formalities to make the incorporation legal, such minutes to be certified by the clerk or secretary of the company.

(c) By-laws, similarly certified.

(d) Copies, similarly certified, of all votes, both of stockholders and directors, authorizing the issue of stock of the company, together with the certificate of the treasurer or other proper officer stating the exact amount of stock outstanding, which was issued under each of such votes. If approval by the state is necessary in any form-e. g., by railroad commissioners-formal evidence of such approval, and generally of compliance with all conditions precedent to the issue.

(e) If the stock is issued as fully paid, evidence that such is the case, either in the form of a certificate of the treasurer to payment in cash at par, or, if the law of the state permits payment to be made otherwise than in cash, then satisfactory proof that payment has been made in compliance therewith.

(f) Copy of the form of stock certificate which is to be issued, and which the trust company is expected to sign. This should be submitted for approval before it is engraved.

for the information given and for many of the opinions advanced. It is perhaps hardly necessary to remark that this discussion is intended merely to show the different views that are current on the subjects treated, and does not pretend to state conclusions ex cathedra, the writer making no claim to expert knowledge in the matter. In any transaction other than one which is absolutely plain and simple, no trust company official or employee should proceed without competent legal advice.

78 Proceedings Trust Company Section, 1905, p. 7.

(g) Vote of directors certified as in (b) approving the form of stock certificate; also vote similarly certified appointing the transfer agent and agent to register transfers of the company.

(h) List similarly certified of the officers and directors of the company, with sample signatures of such as may sign certificates."

The practical work of transferring stock requires a high degree of intelligence and care and a thorough kn wledge of the law governing such The risks involved aside from possible clerical mistakes, errors in bookkeeping, dishonesty or gross carelessness on the part of the employees who actually do the work, include mistakes of law or of fact in making transfers on forged endorsements, or on insufficient authority, or in violation of law, especially in cases of certificates held by persons as trustees for others. Certificates endorsed in blank are often presented for transfer by persons other than the holders of record. The transfer agent must know the signatures of stockholders or otherwise identify them beyond question. Where stock is held in fiduciary capacities, the agent must know the terms and powers under which it is held. When a certificate is presented for transfer, the transfer clerk should know that the certificate itself and the power of attorney accompanying it are genuine; that the transferrer is legally competent to make the transfer; that no notice has been given the company of any outstanding claims against the stock; that, in the absence of direct notice, there is no implied notice of claims, such as the certificate itself may give when standing in the name of a trustee.

LIABILITIES AS TRANSFER AGENT.79

On the subject of the exact liabilities assumed by the transfer agent in agreeing to perform these services, there is a considerable difference of opinion, which is readily accounted for by the fact that there is no statute law covering the case, and very little law in the shape of court decisions, While the office is sometimes undertaken under special contract which details the liabilities to the issuing corporation, the more common method of appointment is by a mere resolution of the directors of the issuing corporation appointing the Blank Trust Company as the transfer agent of its stock, and the acceptance of the appointment by the latter. This method assumes that the duties and liabilities of the position are so well known as to require no definition; an assumption which is justified so far as routine duties are concerned, but which as to liabilities seems inconsistent

79 Readers wishing to consult fuller discussions of this subject and of the liabilities of trust companies acting as registrars are referred to the following articles, some of which are quoted herein: Proceedings Trust Company Section A. B. A. 1896-1903, pp. 59-75, article by Felix Rackemann; pp. 184-199, article by Henry J. Bowdoin and discussion of same. Proceedings Trust Company Section A. B. A. 1904, pp. 28-41, article by Jordan J. Rollins; pp. 85-86, letter from Noble B. Judah, and discussion preceding. Proceedings Trust Company Section A. B. A. 1905, pp. 6-8, Report of Executive Committee. "The Banking Law Journal," Vol. XXII, pp. 717-720, article by C. F. Morris. "Trust Companies" Vol. I, pp. 418-421, 497-503, 609-613, articles by Ross Perry; pp. 989-990, article by E. C. Hebbard; Vol. II, pp. 416-418, article by Willard V. King; Vol. III, pp. 12-14, article by Charles A. Greene.

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