incorporated in 1842 in Pennsylvania, later changed its name to the National Safety Insurance & Trust Company, 1851. Reliance Insurance & Trust Company, incorporated in Pennsylvania in 1841. Pittsburgh Trust Company, incorporated in 1845 as the Pittsburgh Trust & Savings Company. Miner's Life Insurance & Trust Company of Pottsville (1850), which was originally the Schuylkill Haven Mutual Life & Health Insurance Company. American Life Insurance & Trust Company, of Philadelphia, 1850. American Life Insurance & Trust Company, of Baltimore, Maryland, incorporated in 1834. Charleston Insurance & Trust Company, South Carolina, 1836. Savannah Insurance & Trust Company, Georgia, 1836. Oglethorpe Insurance & Trust Company, Georgia, 1836. Western Insurance & Trust Company of Columbus, Georgia, 1836. Brunswick Life Insurance & Trust Company, Georgia, 1838. Southern Life Insurance & Trust Company, of Florida, 1835. Alabama Life Insurance & Trust Company, 1835. Wetumpke Insurance & Trust Company, Alabama, 1840. 2.-ATTEMPTS WERE MADE TO ORGANIZE OTHERS AS FOLLOWS. American Life Insurance & Trust Company, New York 1833 and 1834. Columbian Life Insurance & Trust Company, New York, 1834. Long Island Life Insurance & Trust Company, New York, in the "village" of Brooklyn, 1834. Farmers' Fire Insurance & Loan Company tried in 1834 to have its name changed to "The New-York Life Insurance and Loan Company" and to give up its fire insurance business in order to profit by its trust powers; but the legislature refused the petition. Later, as has been seen, it changed its name to the Farmers' Loan & Trust Company. The New Jersey Trust & Commission Company, New Jersey, 1836, which furnished valuable documents relative to the early history of corporate fiduciaries in the United States but failed to become incorporated. There were no doubt other attempts made during the period, but these serve as evidence which is on record of the nature of the early movement in the direction of building up the corporate fiduciary. An attempt will now be made to summarize in an outline form the outstanding features of corporate fiduciary development before 1850: 1. The corporate fiduciary originated as a collateral feature of a.-Life insurance business. b.-Fire insurance business. c.-Banking. d.-Canal construction. 2. The earliest development of the corporate fiduciary was in the form of an investment trust. 3. The personal trust services only were developed to any considerable extent during this period. The following features of personal trust business for corporate fiduciaries are evident in this period: a.-Trusts inter vivos in general, specific trusts as well as the trust deposit type. b.-Investment trusts. c.-Executorships and administratorships. d.-Guardianships, committee of lunatic, etc. e.-Receiverships, assignments, etc. 1 4. The trusteeship was very largely concerned with personalty as distinguished from real property: 1 and the trust, inter vivos, was not clearly distinguished from: a.-Life insurance business, particularly the writing of endowments annuities, etc. b.-Savings bank business, or time deposits and certificates of deposit. 1 The early trust business of the Farmers' Loan & Trust Company is a notable exception, for the early trust business of that company was almost entirely in the field of real property. The modern real estate trust services and escrow services are clearly seen in embryo in the early trust services of the Farmers' Loan & Trust Company. For a description of these services see The Farmers' Loan and Trust Company and others v. Carroll and others, 5 New York (Barbour), 613; and Lanier, H. W., A Century of Banking in New York, pp. 300-8. 2 As late as 1850 the New York Banking Commissioner describes the functions of savings banks and insurance companies as trust services. Cf. Bankers' Magazine, Vol. 9 (1856), p. 964. 5. There were laid the bare foundations for corporate trust, services: The Girard Trust Company of Philadelphia became trustee of s corporate trust deed in 1839 and again in 1841. 6. The function of the corporate fiduciary as a reservoir of long-time credit is clearly seen to be recognized-especially in the cases where the trust powers were granted for the purpose of attracting funds to build canals, etc. Examples of this are the Morris Canal and Banking Company, and the attempt to organize the New Jersey Trust and Commission Company. 7. The modern state supervision of trust companies was clearly forecast by the jealous regard with which state legislatures watched the development of the institutions during this period. CHAPTER XIII CORPORATE FIDUCIARIES IN THE UNITED STATES, 1850-1900 Just as the early development of the personal trust business by corporate fiduciaries was found to be correlated with increasing individual capital and complexity of economic life, so during the period now to be considered the growth of a variety of corporate trust services will be found to correlate with the increasing use of the corporate form of enterprise and an everincreasing complexity of corporate financial organization. Prior to 1850 comparatively few trust companies were organized so that the treatment of their history is largely the story of outstanding individual institutions, whereas after 1850 corporate fiduciaries came into existence in such numbers that the treatment of their history must necessarily be collective for the most part. The beginning of the second half of the 19th century is a logical turning point in the history of trust companies by reason of the fact that corporate trust services and other varieties of trust and agency functions began to develop, while in the period up to 1850 practically the only trust business was in the field of personal trust services; and such services as were performed for corporations were of the same nature as those performed for persons. Corporate financing began to be done on a much larger scale after 1850 than before-there was more mileage of new railroads constructed during the decade of the fifties than had been constructed during the entire period up to 1850. The consolidation of railroads into systems had its beginnings in this decade.1 The method of financing construction, 1 The Pennsylvania Company was incorporated in 1846, but the building of the system did not commence until some years later. In 1849 the partnership Winslow, Lanier & Co. of N. Y. formed to float railroad bonds for the purpose of reorganizing and consolidating railroads throughout the country. Lanier, A. W., A Century of Banking in New York, pp. 210-1. consolidation, and system-building by bond issues under a corporate trust deed became the practice in this decade. The California gold discoveries helped to produce a boom period which resulted in the launching of large and numerous enterprises, commercial and manufacturing, to supply the ever-expanding market. It gave impetus to the ever-increasing westward movement of population, accompanied by the growth of inland commerce and mid-western and western cities. Then came the panic of 1857 and a period of reorganization, requiring new adjustments in the financial structure of railroads and other corporate enterprise. In the decade of the fifties, moreover, the financial and banking mechanism of the country began to evolve into a national system. The New York Clearing House was established in 1853; the Boston Clearing House in 1856; the Philadelphia Clearing House in 1858; and the Chicago Clearing House in 1865. In 1861, the National Banking System and a national currency were established. By the year 1850 the territorial empire of the United States had expanded practically to its present proportions. By that time the stage was set for the period of phenomenal agricultural, commercial, and industrial growth of the country which was to take place during the next half-century—particularly after 1870. The steam railroad was here and had but to be extended to accommodate the needs of the new era. By 1850 nineteen states and the District of Columbia had been added to the original thirteen, and territorial governments were established in Minnesota, Utah, and New Mexico. Before the end of the century all but three of our present forty-eight states had been added to the Union.2 It is well to recall some of the outstanding features of economic growth of the country before proceeding to describe the development of corporate fiduciaries from 1850 to 1900. From a population of 23 million in 1850, the continental United States grew to a population of nearly 76 million by 1900. 1 By 1865, the Commercial & Financial Chronicle has two large pages of railroad bond quotations and an equal or perhaps larger number of stock quotations. 2 Oklahoma was added in 1907 and New Mexico and Arizona in 1912. Statistical Abstract of the United States, 1925, p. 1. |