of commercial paper registration by trust companies were discussed at length and a paper was presented at the 1911 meeting of the Trust Company Division of the A. B. A. At that time it was predicted that it would develop into an important field of trust company services. That it has not is no doubt due to the safeguards that have been thrown about commercial paper issues eligible for discount under the Federal Reserve System. A number of comments from trust company officials and commercial paper houses quoted anonymously will serve to picture the present status of this experiment. So far as we know, there is only one corporation which has its notes registered; there is only one trust company which acts as ... It is our impression that two other corporations had their notes registered in the past but have discontinued the practice. Our view is that the service of registration is not a necessary one, and, therefore, is not demanded. Commercial paper houses like our own are responsible for the genuineness of the paper they handle, and banks are, therefore, we believe, willing to purchase the same without registration. ... the matter came up again, in a general way, the early part of this year (1926), but the matter drifted due to the fact that there appeared to be no problem to be overcome by registration. There is, however, some question that registration of commercial paper would make available at a central point, the amount of outstanding notes on any name, even though its paper were handled by several different brokers. . . ... One of the most important things needed to check an open market name is whether open bank lines are sufficient to cover paper in the market-that could not be determined from registration of paper. It is interesting to remark that one official of a large New York bank said: "If by certification you mean the acceptance of bills of exchange this is quite an important function of banks and trust companies. In other words, the commercial paper registration episode is rather obscure. National Banks as Corporate Fiduciaries. An important development in the history of corporate fiduciaries in recent years is the inauguration of national banks as corporate fiduciaries under the Federal Reserve Act. As early as 1906, national banks sought fiduciary powers and the New York State Bankers' Association in that year passed a resolution asking for federal permission for national banks to exercise fiduciary powers.1 In 1908 one of the provisions of the Fowler bill was to grant fiduciary powers to national banks, and in 1911 the Secretary of the Treasury in his annual report recommended that national banks be permitted to do all the things that any bank legitimately does. Finally, the Federal Reserve Act provided that national banks may exercise fiduciary powers under the supervision of the Federal Reserve Board and the state banking authorities in which the bank is located. A bitter controversy on the constitutionality of this provision of the law between trust companies and national banks arose, but it is now settled that the national bank may constitutionally exercise fiduciary powers and they are doing so to an increasing extent. According to the annual report of the Federal Reserve Board for the year 1926, of the 2,103 national banks having permission to exercise fiduciary powers on December 31, 1926, 1,139 were exercising one or more of the powers authorized, acting as executor, administrator, guardian, etc., of trusts having assets aggregating, $1,028,055,444; and in addition 448 of the national banks were handling corporate trusts, such as trustee for collateral trust bond issues aggregating $1,002,615,495 and acting as trustee for other bond and note issues in the sum of $1,460,937,821.3 1 Bankers' Magazine (N. Y.), Vol. 72 (Jan., 1906), p. 40. 2 Annual Report of the Secretary of the Treasury, 1911; Ebersole, J. F., "The Relation of State to National Banks," Proceedings of Academy of Political & Social Science, Jan., 1911, pp. 285-96. * Annual Report of the Federal Reserve Board, 1926, pp. 27-8. |