Life Insurance and Trust Company, but it reported unfavorably on all of the other petitions. Following are some of the comments made by the committee: 1

The petition [of the Farmers' Fire Insurance and Loan Company] represents, that owing to that feature in the act of incorporation which makes the directors to be elected by the stockholders annually, the public has not that confidence in the stability of the institution which is necessary to give the company that amount of business which the extent of the capital and of the powers given to the company, enables it to perform with benefit to community.

The amendment asked for by the petition, is to alter the name of said company to "The New-York Life Insurance and Loan Company," and to change the mode of choosing the directors, and their places of residence, without specifying the manner in which they propose the directors shall hereafter be appointed. From the statement made by the president of the company, the change desired appears to be, to create the present board of directors a permanent board of directors, with powers to fill all vacancies. By the bill which accompanies the papers, it is doubtful whether the present directors or a board of directors hereafter to be appointed, are to possess that power.

Your committee are of opinion that life insurance, trust and loan companies, properly conducted, are highly beneficial to community, and that competition, by a judicious increase of their numbers, will add not only to their usefulness, but to their security. Though at the same time, they believe that such increase should be gradual.

Your committee have therefore determined to ask leave to report by bill, in favor of "The American Life Insurance and Trust Company," with a capital of $1,000,000. Your committee have selected this application, because its petitioners are distributed throughout the State. And your committee offer the following resolution in relation to all the other applications:

Resolved, That the prayers of the several petitions for "The chartering of the Columbia Life Insurance and Trust Company," to amend the charter of "The Farmers' Fire Insurance and Loan Company," and to incorporate "The Long-Island Life Insurance and Trust Company," ought not to be granted.

1

1 Assembly Journal, New York, 1834, pp. 121-2, and New York Assembly Documents, 1834, Vol. I, Doc. No. 40. The Columbian Life Insurance and Trust Company withdrew its petition.

The bill to incorporate the American Life Insurance and Trust Company was passed by the Assembly and appeared in the Senate on March 13, 1834, where it was referred to a committee and reported upon favorably on March 14, 1834.1 It did not pass the Senate, however, and the petition with that of the Farmers' Fire Insurance and Loan Company (revised) again came to life in April, 1834.2 The final outcome was that none of these new companies ever became incorporated; but the Farmers' Fire Insurance & Loan Company was able to put through its petition and had its name changed to the Farmers' Loan & Trust Company, and discontinued the fire insurance business.3

In the period before 1850 there were a number of other trust companies in business in New York (the first four in New York City).1

1. The North American Trust & Banking Company of N. Y., July 18, 1838.

2. The United States Trust & Banking Company of N. Y., Jan. 2, 1839. 3. The Atlantic & Pacific Trust & Banking Company, Jan. 29, 1839. 4. The City Trust & Banking Company of N. Y., Mar. 13, 1839. 5. The Lockport Trust & Banking Company, Lockport, Sept. 6, 1838. Lived until 1848.

6. The Erie Canal Trust & Banking Company, Buffalo, Dec. 29, 1838. 7. The Howard Trust & Banking Company, Troy, Jan. 7, 1839. Lived until 1844.

8. The Farmers' Bank & Trust Company, Livonia, Jan. 11, 1839. 9. The Rochester Trust & Banking Company, Rochester, Jan. 21, 1839. 10. Trust & Banking Company of Buffalo, Feb. 1, 1839.

These companies obtained charters under the Free Banking Law of 1838.5 There is no clue in the state comptroller's

1 New York Senate Journal, 1834, pp. 359-60.

2 New York Assembly Journal, 1834, pp. 666, 712, 787. See also Ibid., pp. 857, 859-60, 838-9, 950 and 1001.

'See Perine, E. T., The Story of the Trust Companies, pp. 37-46.

Ibid., pp. 69-74.

'See New York Assembly Documents, 1839, No. 4 and Laws of New York, 1838, ch. 260.

report of 1839-40 as to why these banks were permitted or desired to have "trust" in their titles, but there is evidence also in these reports that they were incorporated under the Free Banking Law of 1838.1

In Connecticut, the Fairfield Loan & Trust Company was in existence as early as 1837.2 In May, 1833, The Connecticut Life & Trust Company was incorporated with the usual trust powers granted at this period.3

4

The decades of the 1820's and the 1830's had witnessed a new development of inland transportation. The Cumberland Road had been completed which, together with the Lancaster Pike and others, gave transportation facilities between Washington, Baltimore, and the trans-Allegheny region, especially the headwaters of the Ohio-Pittsburgh, and then down the Ohio River to Cincinnati. Canals had been built, and then railroads. The westward movement of population in this country was enabled to take place on a larger scale than ever before, and the western towns began to grow. The towns of Pittsburgh, Cincinnati, Mobile, and New Orleans were the first to become important. Pittsburgh grew into an important manufacturing center and the packing industry and others began at an early date in Cincinnati. Pittsburgh was incorporated as a city in 1816 and Cincinnati in 1819. The importance of New Orleans and Mobile as seaboard outlets increased with the expansion of the interior.

With this development of the interior and growth of towns it would be expected that financial institutions would arise similar to those in the Eastern states. Thus on February 12, 1834, there was incorporated The Ohio Life Insurance & Trust

1 Compiled Annual Report of 1840 (Assembly Document No. 13) Statement Q., also pp. 41-5. The New York Banking Commissioner does not mention these banks in his Annual Report of 1839-40. See also Paine, W. S., The Laws of the State of New York relating to Banks, Banking, Trust Companies, etc., 4th edition 1894, pp. 478-84. Perine mentions The New York Trust & Banking Company (p. 74), but no record of this company can be found.

2 Perine, E. T., The Story of the Trust Companies, p. 61. It was incorporated under Joint-Stock Companies Laws, Oct. 20, 1837.

3 Private Acts of Connecticut, 1833.

4 Hulbert, A. B., Paths of Inland Commerce, pp. 130-3.

Company in Cincinnati. Following are the sections of the charter dealing with trust powers:

Sec. 2. That said company shall have power: 1. To make insurance on lives. 2. To grant and purchase annuities. 3. To make any other contracts involving the interests or use of money and the duration of life. 4. To receive moneys in trust, and to accumulate the same at such rate of interest as may be obtained or agreed on, or to allow such interest thereon as may be agreed on. 5. To accept and execute all such trusts of every description, as may be committed to them by any person or persons whatsoever, or may be transferred to them by order of any court of record whatever. 6. To receive and hold lands under grants, with general or special covenants, so far as the same may be necessary for the transaction of their business, or where the same may be taken in payment of their debts, or purchased upon sales made under any law of this state, so far as the same may be necessary to protect the rights of the said company, and the same again to sell, convey, and dispose of. 7. To buy and sell drafts and bills of exchange.

Sec. 3. In all cases where any court hath jurisdiction for the appointment of a trustee or guardian of any infant lunatic or other person, the annual income of whose estate shall exceed the sum of one hundred dollars, such court shall have power to appoint the said company trustee or guardian of the estate of such infant lunatic or other person: Provided, nothing in this section shall be so construed as to give the said corporation control of the person of any infant lunatic, insane or other person: And provided further, in all cases where the court shall appoint said corporation administrators of any estate, the consent of the widow or next of kin to such deceased person shall first be obtained.

Sec. 4. On any sum not less than one hundred dollars, which shall be collected or received by the said company in its capacity of trustee, guardian, and receiver, an interest shall be allowed by the said company, of not less than at the rate of four per cent. annually, which interest shall continue until the moneys so received shall be duly expended or distributed.

Sec. 5. Where the annual income of an infant, lunatic, or other person, of whose estate the said company shall be trustee or guardian, shall exceed the sum allowed, or which may be sufficient for the education and support of such infant, or support of such lunatic or other person, such surplus income shall be accumulated by the said company

1 Laws of Ohio, 1834, pp. 68-74, 69.

for the benefit of such infant, lunatic, or other person, by adding interest on the whole annually, as a new principal; and the interest so to be allowed and added on such accumulation, shall in no case be less than four per cent.

Sec. 6. No bond or other collateral security shall be required from the said company when appointed trustee, guardian or receiver; but all investments of money received by the said company in either of said characters, shall be at the sole risk of the said corporation, and for all losses of such moneys, the capital stock, property and effects of the said corporation, shall be absolutely liable.

This company was given the power to issue banknotes, and on September 5, 1835, there appeared in Niles Register a vigorous attack upon the institution:1

A "TRUST COMPANY," we learn from the Louisville Journal, is established in Cincinnati. It is familiarly called the Farmers' bank. It lends money upon real estate at half its value, secured by mortgages; and the mortgage is so drawn as to make the mortgagee a mere tenant at sufferance. The loan is not made upon time, but during the pleasure of the lender. By its charter, the corporation has many novel and exclusive privileges never before, as the Journal believes, conferred upon any moneyed institution. It possesses great advantages over ordinary creditors, brokers and money-lenders in the collection of its debts, which are liable to great abuse. Though established in Cincinnati, it is co-extensive in its transactions with the state. It has, or may have, a branch in each county. The Journal predicts much evil from this bank.

And on September 12, 1835, the following appeared in Niles Register: 2

We noticed a sort of bank, in our last, called the "Life Insurance and Trust Company," at Cincinnati . . . the powers and principles of which are of the most dangerous nature and tendency, and fatal to the farmers and other productive classes, seduced into borrowings of money-which they might easily repay, when the Mississippi was

1 Niles Register, Vol. 49, p. 3.

2 Ibid., Vol. 49, pp. 17-8. The Ohio Life Insurance and Trust Company apparently had a very successful career as a banking institution until the panic of 1857. In the forties it had a branch in New York City and advertised in New York papers. But there is no evidence that it did a trust business except its advertising. New York Commercial Advertiser, 1845. Cf. Perine, The Story of the Trust Companies, p. 59.