party upon the performance of a contract, the payment of a certain sum in money or the fulfillment of some other provision determined by the parties to the agreement.

Sometimes estates which have been improvidently managed are placed in the hands of trust companies in the hope that they may be freed from incumbrances and put upon an income-producing basis. In some notable cases the superior facilities of trust companies have enabled them to preserve and make valuable estates that would have been worthless in the hands of the owners.

A new field of business is now being taken up by the trust companies, in the form of trust agreements relating to life insurance. The policies are made payable, or assigned, to the trust company as trustee, and at the death of the assured the company collects the proceeds of the policies, of which it has meantime been the custodian, and applies such proceeds according to the trust agreement. Many insurance companies do not write policies allowing stated payments to beneficiaries, and this plan therefore furnishes the opportunity not otherwise open for the insured to have such disposition made of the proceeds of his insurance.

Trust agreements are also made by which beneficiaries may be paid stated annuities out of the proceeds of life-insurance policies. This arrangement is specially valuable where a man is not able to carry an amount of insurance such that the income alone will support the family. The trust company can so invest the proceeds that a small portion of the principal may be used each year while the balance is kept profitably invested. The fund may thus be made to provide a sufficient income during the probable life of the widow or during the minority of the children. One of the leading companies of the central States advertises that by this plan it is possible to pay an annuity of $500 for forty years out of $10,000 insurance, of $1,000 for forty years out of $20,000 insurance,

etc.

It is customary in appointing the trust company trustee to have the fees of the company made a part of the contract, and it may thus be known in advance just how much the expense will be.

While the trust company is a corporation, it has usually succeeded on account of its wide powers and the character of the men in control in maintaining a degree of personality which adds to its attractiveness to customers. The confidential nature of many of its duties brings it into close touch with those whose affairs it handles.

It is customary for trust companies to keep all trust funds entirely separate from their general assets; and, indeed, this is required by law in many States. This means that in case of the failure of the company the funds belonging to a particular trust cannot be mingled with the general assets of the company nor levied upon in any way by the creditors of the company. In addition to this, the trust becomes, in case its funds are not intact, a creditor of the company, protected as are its other creditors by its general assets. Trust funds are thus doubly safeguarded.

Securities and other property held in trust stand in the name of the company as trustee (etc.) for So-and-so, and thus show on their face that they are not the property of the company.

PROBATE BUSINESS.

The statutes of many States give to trust companies the power to accept and execute duties entrusted to them by will or by appointment of court as administrator, etc. In such capacities the company has the same powers and duties that an individual would have if acting in the same capacity. The manifest advantages which the trust company has over an individual for the performance of such trusts are steadily drawing to it a large portion of this business; and it is safe to prophesy that it will ultimately become the usual practice to entrust the execution of wills and the administration of the estates of the dead to trust companies rather than to individuals.

Business of this kind includes services as executor, administrator, trustee, guardian, committee, conservator.

An executor is a person appointed by the testator in his will to take charge of his estate and dispose of it as directed in the will.

An administrator is an officer appointed by the court having such jurisdiction in the several States to take charge of the estate of one who dies without leaving a will, and to dispose of the same in accordance with the inheritance laws of the State.

An administrator-with-the-will-annexed is appointed by the court to take charge of the estate of a deceased person when no executor has been named in the will, or when the executor named refuses to act or dies.

Acting in any one of these capacities, the trust company assumes entire charge of the estate, subject to the supervision of the court, and after a period varying in the several States, but usually eighteen or twentyfour months, makes a final distribution, according to the terms of the will or the laws of inheritance, as the case may be, and files with the proper public official an itemized statement of all receipts and expenditures under the trust. In winding up the affairs of an estate, the executor or administrator frequently finds it necessary to turn a portion of it over to a trustee appointed to manage it for the beneficiaries or to a guardian appointed to look after the estates (and in some States the persons) of heirs who are minors, or to a committee or conservator appointed to have charge of an estate for heirs who are insane, idiots, habitual drunkards, spendthrifts or incapable for any reason of looking after their own affairs. In any of these capacities the trust companies may act, and it often happens that a given company acting as executor turns over a part of the estate to itself as trustee, guardian, etc., thus gaining for the estate the advantage of continuous management by the same trustee. It may also receive such trusts from other executors or administrators, whether individuals or trust companies.

In any of these capacities the trust company may, and often does, act in conjunction with individuals appointed to share the responsibility with it.

In probate business of all kinds the company is accountable to the court for the faithful performance of its duties, and must render complete statements, which become part of the public records. The fees charged do not exceed those of individuals acting in similar capacities, and often are much less. The laws of the several States specify the fees allowed to executors, administrators, etc.

It is common practice for a trust company to tender the services of its officers for the drawing of wills, and to act as custodian of wills until the death of the testator, when it files the will with the proper court; all these services being performed without charge in cases where the company is appointed executor.

Testamentary trusts may be created for any lawful purpose. In acting as trustee under appointment by will, the duties of trust companies do not differ materially from their duties when acting in the same capacity under appointment by private agreement. In any probate capacity it may be necessary to make advances of money in order to save the estate, and this the trust company will do if the circumstances justify it.

Trust companies are generally legal depositaries for others acting aз executors, administrators, guardians, etc., and for court funds.

The officer making such deposits with a trust company is, in most States, relieved from any responsibility in case of the loss of the funds through the failure of the trust company. He usually cannot escape this responsibility in case the funds are in his own keeping or deposited with an ordinary bank.

By the appointment of a trust company as agent or trustee during one's life, and its selection as executor and trustee under will, the trustee work of a family may be kept in the same hands from generation to generation.

INVESTMENT BUSINESS.

In the performance of its other trust work of various kinds, the trust company is often called upon to invest or reinvest trust funds in securities that are safe and that yield as great returns as are consistent with safety. In addition to such demands, and to its needs for the investment of its own funds, many companies find so great a field for dealings in high-grade securities as to justify the establishment of a bond or investment department to handle such business. The operations of this department, aside from its use for the customers of the other departments, do not as a rule differ greatly from those of a first-class bond house that deals exclusively in high-grade securities.

The business of this department touches that of the trust department at many points. Trust funds must be invested as soon as possible after

being received. Reinvestments must be made from time to time, for mortgages become due and are paid, bonds mature or are called in for redemption, and the funds thus set free must not be allowed to remain as mere deposits too long, although interest at regular savings rates is allowed on such funds during the interim. The large trust company has excellent facilities for this service. The amount of securities that it must purchase for various interests is so great that it can buy on the best terms, and its opportunities for accurate and immediate knowledge of the securities market are of the best. Often one of its trust estates needs to dispose of securities at the same time that another needs to buy. A large mortgage is often divided among several estates.

Special forms of investment are provided by some companies, the most common form being in the way of bonds secured by real estate mortgages. The company loans on mortgages, sometimes exclusively on property located in its own city, sometimes on property in several carefully-selected cities. The amount loaned varies from forty to sixty per cent. of the appraised value of the property. The protection of title insurance and fire insurance policies is added. The company then issues a series of bonds secured by these mortgages, deposits the latter in trust with some other company, and replaces each mortgage as it matures or is paid by another mortgage for like amount, keeping the total of live mortgages always equal to or greater than the total of the series of bonds. The bonds usually bear four per cent. interest.

Instead of issuing bonds, some companies simply sell the mortgages, giving the purchaser the benefit of the company's experience and judgment in the selection of the mortgages, but assuming no responsibility for the payment of same. Such companies sometimes have allied institutions which will guarantee the payment of the mortgages for a small fee.

Some companies handle investments for customers under investment deposit agreements. The aggregate of the deposits received for such purpose is invested in securities selected by the company's trust committee, and these are held in trust for the depositors, each owning an interest in same determined by the ratio that his deposit bears to the total sum so invested. The income is collected by the company, and the net amount after deducting its fees is remitted pro rata to the depositors at stated intervals.

Customers may purchase securities outright, as they would of any dealer. Or they may appoint the company agent for the investment of moneys, and for the care of securities and the collection of income on same. Savings depositors whose savings have accumulated to a sufficient amount frequently take advantage of the opportunity thus afforded to increase the earnings on their money.

Investments may stand in the name of the company as trustee, thus securing a privacy to their investments which many customers consider an advantage.

REAL-ESTATE BUSINESS.

Reference has already been made to the services that trust companies render in the care of real estate committed to their charge by private agreement or by will or by appointment of court. The equipment which the company has to maintain in order to do such work satisfactorily often places it in an advantageous position for undertaking a general real-estate agency business. It engages in the purchase and sale and renting of real estate, improved or unimproved, on commission. Like the other departments of its work, this business is frequently of great use to its trust department. Many trust estates have rentable property for which the company must find tenants. Sometimes trust agreements provide that a portion of the funds of the trust must be invested in real estate.

The company is often of assistance to prospective buyers who wish to borrow money in order to complete a purchase of real estate. Its experience and reliability cause it to be called upon to act as appraiser of real property.

INSOLVENCY BUSINESS.

Under the head of insolvency business are included the duties of assignee, trustee in bankruptcy and receiver. Trust companies are, in many States, authorized to act in these capacities.

The enactment of the last National Bankruptcy Law in 1898 largely suspended the operation of the State insolvency laws, with the result that assignments have become less frequent than formerly. The duties of an assignee and of a trustee in bankruptcy are similar, and consist in securing a just distribution of the assets of an insolvent person, firm or corporation among the creditors. For this purpose the trust company assuming such duties takes charge of the property of whatever kind, if necessary converts it into cash, pays preferred claims, and distributes the remainder pro rata among the creditors, acting all the time under the direction and authority of the court having jurisdiction in the case.

The duties of a receiver may be of quite a different character. A receiver is a person or corporation appointed by a court of equity to take charge of property in dispute. Such appointment does not necessarily imply insolvency. It may be made necessary on account of dissatisfaction on the part of stockholders with the management of the company, on account of any dispute which the partners of a firm or the stockholders of a corporation cannot settle between them, on account of a serious tangle or temporary embarrassment in the affairs of the concern, as well as on account of actual insolvency. It frequently happens that the affairs of concerns become temporarily embarrassed, or that there is such friction between the managers that it becomes necessary to have a receiver to adjust matters. For such duties, as well as for those of assignee or trustee, the trust company is specially fitted, and this