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less and less power in the matter, and should have none. The filling of vacancies in the higher positions by promotion from the ranks when possible is demanded alike by justice to the employee and by the best interests of the company, for no one thing so tends to maintain a loyal spirit among the employees as the knowledge that a "square deal" in this matter is assured. This does not mean that every employee should be "moved up one peg" every time a vacancy occurs in one of the higher clerkships; nor does it demand that length of service should be a prime consideration. It means that the man who has shown his capacity and proved his merit in the service of the company should be given the preference over an outsider if he is competent to fill the position which is vacant. It will of course occasionally happen that no one of the employees is capable of filling the position; then and only then should an outsider be brought in.

Fair and liberal treatment of employees in other matters is dictated not only by the principles of justice but by wise policy as well. Salaries should be reasonably liberal, and in their adjustment the ability required, the responsibility assumed and the length of individual service. should be among the matters considered. Vacations should be given to all employees each year as a matter of course. They should be arranged according to a definite plan and not be put off until asked for, and should be announced long enough in advance to enable each one to make his plans. The best-managed companies not only permit but require every employee to take a vacation each year, not only because the vacation will enable the employee to do better work, but because it gives opportunity to judge better the accuracy, faithfulness and integrity shown in his work. The average length of vacation for employees below official rank is about two weeks. In order to care for the work during vacations and during sickness and unavoidable absences for other reasons, one or more general clerks who are able to step in and fill any position should be employed.

In spite of a well-defined prejudice against them on the part of many officials, women have made their way into the ranks of trust company workers and are filling a variety of different positions, and in many cases filling them with exceptional merit. They are most frequently found in the position of stenographer, but there are many women who are capably filling the positions of bookkeeper, teller, clerk, etc.

All employees having any degree of responsibility-and this includes nearly all, if not quite all--should be bonded in reasonable amounts. Except perhaps in the smallest towns, the practice is quite universal to use bonds of surety companies, the premiums for which are paid by the employing company.

Every reasonable opportunity should be given to employees to learn the business in other departments than the one in which their own work lies. Occasional shifting of positions is a help in this direction, and on occasions when the work is especially heavy in any one department,

employees of other departments may be encouraged to help out no one being permitted, of course, to slight his own work. He is a short-sighted official who is not willing to answer questions and explain puzzling problems to ambitious employees who are striving to become masters of different departments of the work. If an employee is lacking in education, he should be encouraged to utilize such opportunities as are offered by the night schools or the classes conducted under the auspices of Young Men's Christian Associations in the cities. An especially valuable medium for the acquirement of knowledge and of training, the strengthening and broadening of character and the stimulation of ambition is found in the work of The American Institute of Banking, of which local organizations or chapters are now found in most of the large cities, and in many smaller ones. This institute, which was organized by and is conducted under the auspices of The American Bankers' Association, is doing a splendid work among bank and trust company employees, both young and old, and should receive the most cordial support from every wide-awake trust company official.

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CHAPTER XV.

SUNDRY TOPICS.

FEES.

XCEPT in the few communities in which trust companies are so well established that there is something approaching a standard schedule of fees, the question of the proper charges to make for services rendered by the trust department is often a difficult one. This is due not only to the fact that in most communities there is no set standard for guidance, but also to the fact that a number of matters must be taken into consideration-the amount of clerical work involved, the knowledge and training, or in other words the professional skill, required, the value of the service to the customer, and most important of all, the degree of responsibility, legal and moral, assumed by the company. The charge may be tempered, too, by the probable incidental profits of the work due to new business obtained thereby.

That there exists considerable difference of opinion among trust company officials regarding the matter of fees has been shown by discussions at the conventions of the Trust Company Section of the American Bankers' Association.76 These discussions also demonstrated that it is quite impossible, even if desirable, to devise a uniform scale of charges for given kinds of services which could be made applicable throughout the country or even throughout a state. Local conditions vary so greatly that a schedule of fees suitable for one locality would be too high for a second and too low for a third. Indeed, the actual value of the service and its cost in labor and in responsibility assumed differ so much that even in two cases of the same kind of services rendered by the same company there may justly be different scales of charges. So far as the service is professional in its character, the matter of fees is subject to about the same considerations as the determination of the fee of the lawyer, and is affected by the customs of the community. The country lawyer expects to receive a smaller fee than the lawyer in the large city, and he often gauges its amount in part by the value of the service to the client, and in some cases takes into consideration the latter's financial ability.

The simplest element of the problem is the amount of clerical labor involved. This is not always easy to determine in advance; as, for example, in the work of transfer agent, in which the amount of work will depend, after the original issue, upon the activity of the stock. When possible, it is wise to defer the matter of fee until enough experience has been gained to form a somewhat reliable estimate of the amount of work required. But even when known with exactness, the amount of clerical labor involved should be a matter of minor importance in the determination of the fee.

76 See Proceedings Trust Company Section, in particular 1904.

The professional ability demanded is a matter of considerable weight, and this factor of the problem should ultimately result in larger fees than are prevalent for certain services. The trust company is held liable for sufficient legal and technical ability and carefulness to do the work correctly, and is entitled to proper compensation therefor.

The value of the service to the customer is an important consideration which should be given careful study; but it is not an exact means of determining the fee. A corporation may require the services of a trust company as a sine qua non, but would hardly consent to pay a fee measured by the necessity of obtaining the service.

The benefit which may accrue to the company in the way of new business resulting from the work is a matter worth consideration, especially by new companies and by companies located where the trust company is not firmly established; but it is evident that this consideration, like the cut-price sales of the merchant, can be operative only in exceptional cases. One can not always do business at less than cost for the sake of new business to be taken on the same terms.

The most important matter of all is the responsibility, both legal and moral, which the company must assume. This is in some cases the hardest thing to determine, owing to the absence of either statutory laws or court decisions which clearly define the liabilities of trust companies acting in certain capacities, and owing to the ignorance of the public, which is apt to hold the trust company morally responsible in case of loss upon any document upon which the trust company's name appears in any capacity.

FEES FOR ACTING AS EXECUTOR, ETC.

Fees for services as executor, administrator, guardian, etc., are in many states fixed by statute, or are determined by the court, and are the same for a trust company as for an individual. In New York the statute fixes the fees at five per cent. upon the first $1,000, 22 per cent. upon the next $10,000, and one per cent. upon all over $11,000 of the principal, with an annual fee on the income at the same rates. No fee is allowed upon the value of the real estate unless same is sold under order of the court. In cases of extraordinary difficulty or responsibility the court may increase such fees. In Ohio the statute fixes the fees of executors and administrators at six per cent. upon the first $1,000, four per cent. upon the next $4,000, and two per cent. upon the excess over $5,000 of personal property. The Missouri statute allows executors and administrators a commission of five per cent. upon disbursements of personal property.

These rates usually serve as the basis for determining fees of testamentary trustees and fees in any trust coming through law or by appointment of the court, and are guides in fixing the charges for the care of estates held in trust from whatever source.

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FEES FOR CARE OF ESTATES UNDER PRIVATE AGREEMENT.

When the trust comes by private agreement, the company is of course at liberty to make the best terms it can as to fees. In one large eastern city, the usual charges are one per cent. on the principal, often payable one-half at the beginning and one-half at the termination of the trust, and an annual fee of 22 per cent. on the income if the funds are invested or to be invested in coupon bonds or stocks. If part is in real estate, some companies make the charge on income five per cent., handling the real estate themselves, while others keep the charge at 22 per cent., first deducting an outside real estate broker's charge for handling the real estate. In another city, common charges are two per cent. on the principal at the termination of the trust, with an annual commission on the income of three per cent. on that part derived from personal securities and five per cent. on that part derived from real estate. In some places the charge is five per cent. on the income without reference to whether the estate owns real property. Another scale of charges employed is a commission of from one-half per cent. to one per cent. for the investment or reinvestment of the principal, payable at the times such investments are made, and from three per cent. to five per cent. on the income according to the proportion of the principal invested in real estate.

FEES OF AN ASSIGNEE OR RECEIVER.

The fees allowed to an assignee or a receiver are fixed by statute or determined by the court. In New York the assignee's fee is five per cent. on the whole sum handled, and the receiver's fee is fixed by the court at a figure not exceeding five per cent. The receiver of a corporation may receive five per cent. on the first $100,000 received and disbursed, and 22 per cent. on the excess over $100,000; but the total fee may not exceed $12,000 for any one year, nor be greater than at the rate of $12,000 per annum for a fraction of a year.

FEES AS TRUSTEE UNDER A BOND ISSUE.

Fees for acting as trustee under a bond issue are generally based on a charge of a certain amount per bond, the amount in many cities being one dollar a bond for small issues and fifty cents a bond for large issues. The terms "large" and "small" are of course relative, and their interpretation differs according to local circumstances. In some places the dividing line is at about $200,000; in others, $500,000 or $1,000,000. Sometimes, especially in small issues, a special counsel fee is added, sometimes not. Some companies make a minimum charge of $100 covering everything. There is a well-defined feeling in many quarters that the prevalent fees for this work are much too small in view of the fact that the legal and moral liabilities assumed are not well determined, and may be much larger than is generally realized.

There is considerable difference of opinion regarding fees for the payment of coupons. In New York, where the use of money for ten

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