Following are some of the comments made on the general policy of giving investment advice:

No investment advice given except to our trust beneficiaries. Give no investment advice except in cases where we are acting as agent or co-trustee.

The officers of this institution regard investment advice as undesirable. We do not solicit customers to come to us for this purpose. If such advice is asked we obtain the customers' own views and if the bonds or stocks they suggest are safe we let them decide. If we consider them unsafe or undesirable we decide against the investment.

Profits of Corporate Fiduciaries and Fees for Services. One of the questions on the trust company questionnaire requested the respondent to indicate the percentage that profits from specified services bear to total profits, as follows:

Many of the corporate fiduciaries found it impossible to reply to this question, and some of them did not want to; but there were some which did reply-in all 35 answers were received, including

5 national banks and 30 trust companies. There were others which made partial replies to the question, but their data could not be included in the summary due to the fact that the replies were incomplete. Table I shows in detail the replies received from the five national banks and nine of the trust companies. All of these corporate fiduciaries reported only for trust department earnings-i. e., total trust department earnings are considered 100%, and no information was given to indicate what portion of total earnings are attributable to trust department earnings.

TABLE I

PROPORTION OF PROFITS FROM SPECIFIED FIDUCIARY SERVICES COMPARED TO TOTAL PROFITS FROM THE TRUST DEPARTMENT

(Total profits from fiduciary services is 100% in each case-This table contains the separate replies of individual fiduciaries.)

Proportion of Trust Department Profits from

*13% of this is due to investment trust service.

† Total trust department profits constitute but 5% of profits of the entire financial institution.

Total trust department profits constitute but 10% of profits of the entire financial institution.

This is further illustrated, by way of summary, in Graph I.

GRAPH I

AVERAGE PROPORTION OF PROFITS FROM SPECIFIED FIDUCIARY SERVICES COMPARED TO TOTAL PROFITS FROM TRUST DEPARTMENT

Table II is presented to show in detail the replies to this question which take into consideration profits from other departments as well as the trust department and show what part of total profits in such cases are attributable to earnings from fiduciary services. This table contains the replies of 23 of the trust companies. (See page 476.)

To further illustrate this in summary form, Graph II is presented showing how much of total earnings on the average is due to corporate fiduciary services.

GRAPH II

AVERAGE PROPORTION OF PROFITS FROM TRUST DEPARTMENT
COMPARED TO TOTAL PROFITS

In the interpretation of the significance of these figures, there are two things which must be borne in mind in connection with the large relative amount of profits from banking services:

1.-The question as to how costs have been distributed between the fiduciary services and the banking services of the institution, particularly when it is considered that much of the cost of advertising fiduciary

TABLE II

services might properly be apportioned to the other departments of service.1

2. The profits of the banking department usually include the profits on the investment of the institution's own capital, surplus, and undivided profits as indicated on one of the replies. [See Table II, items 23 and 23a.]

3.-By reason of the existence of the trust department large volume of other business is brought to the institution which otherwise would not be forthcoming; thus the trust department helps swell the profits of the other departments.

Even making allowance for these, however, it is likely that there are fundamental causes for the relatively small proportion of profits from fiduciary services. In the first place, the corporate fiduciary is still in the developmental stage in many respects. The field of service is known to be large and profitable but the corporate fiduciary has not yet been able to completely overcome the competition of individuals as fiduciaries. Second, the corporate fiduciary is in a state of extremely active competition. The trust company is like a railroad in that it has a large and expensive plant to maintain if it goes into fiduciary work at all, especially corporate trust service, and once the plant is established it is likely to cut prices below actual cost of production of the service in order to give the plant something to do and to help meet overhead expenses.

Individuals vs. Trust Companies as Fiduciaries. The complexities and liabilities involved in connection with corporate trusts and agencies has resulted in the delegation of these functions almost exclusively to corporate fiduciaries. This is amply illustrated by the history of the development of these services. But it is not clear that the corporate fiduciary holds such a great advantage over the individual fiduciary in matters of personal administration of property. In this field the individual as fiduciary is still an active competitor of the corporate fiduciary, and there are very plausible arguments for the continu

1"... trust advertising can be used as the torch to bear the standard of the whole institution." Weldon, Theo. T., "Advertising and Publicity Factors in Promoting Life Insurance Trust Business," Trust Companies, Vol. 43 (Nov., 1926), pp. 671–2.