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Rh 2% for small accounts, and 3% for large accounts; for time deposits it is sometimes more.

In the administration of estates for private individuals, the trust company has taken the place to a large extent of individual attorneys. The trust company has the advantage of corporate responsibility, which involves continuous life, and of proper offices, fire-proof safes, and special employees in each department devoting their time and attention exclusively to their special functions. Investments for estates are limited by law, like savings bank investments, to certain classes of securities, and a trust company has little temptation to violate such laws. It is customary, moreover, for investments of trust funds to be made by authority of the board of directors, thus protecting the estate against the uncertainties of individual judgment.

The trust company has found a special field in America as agent of railway and industrial corporations in the issue, transfer and exchange of securities. For these purposes it has an organized system, tested by experience, more perfect in its operation and less expensive than each corporation could organize for itself separately. As trustee for the bondholders under a railway mortgage, for instance, it becomes the duty of the trust company, in case of default in payment of interest on the bonds, to take steps to foreclose the mortgage and protect the bondholders. Trust companies have sometimes been named as receivers of failed banks.

The big industrial combinations in America have contributed to the business of the trust companies as registrars or transfer agents for capital stock, agents for the issue of bonds and payment of interest thereon, agents for underwriting and distributing new securities, and depositories of securities and cash under plans of reorganization or while held in escrow. In the case of the reorganization of the tobacco companies, in the autumn of 1904, securities aggregating about $600,000,000 passed through the hands of the trust company charged with the work; and while this was the largest single operation of its kind, it is typical of many similar operations resulting from the activity in the creation of new companies in America which bring business to trust companies.

The attractions offered by the trust company to the non-commercial depositor by the payment of interest on his deposit built up the deposit balances of trust companies rapidly after 1896. Their competition in this respect with national banks soon led to an effort to compel trust companies to keep cash reserves against their deposits. This demand was resisted for a while, but in 1903 a rule was made by the New York Clearing House requiring trust companies to keep certain reserves. The alternative was to withdraw from the Clearing House, and this all but a few did. The New York legislature, however, at the session of 1906, passed an act requiring trust companies in New York city to establish within fixed dates reserves of 15% of their deposits, of which only 5% was required to be currency, 5% might be on deposit in another banking institution, and 5% might be kept in certain classes of bonds.

The experience of the panic of 1907 developed several weaknesses in the position of the trust companies, and in New York led a special commission appointed b Governor Hughes to recommend much stronger reserves. The fact that the trust companies relied upon the national banks to meet the heavy demands upon them for currency doubled the strain imposed on the national banks of New York city, and the isolation of the trust companies through their withdrawal from the Clearing House in 1903 made it difficult to bring about co-operation in support of those which were subjected to severe runs. Between the 22nd of August and the 19th of December 1907 the deposits of the trust companies of New York declined by the sum of more than $275,000,000 while deposits in national banks increased about $50,000,000.

The number, resources and activities of trust companies have shown a rapid development. In New York the general law under which companies can be formed without a special act dates only from 1887, but several companies ante-date this law. The following figures from reports made to the comptroller of the currency speak for themselves:—

Approximately half of the deposits in United States trust companies are in the state of New York, the number of such companies in New York about the 30th of June 1907, being 88, with a capital of $67,850,000, and deposits of $1,020,678,220. The next highest states in amount of deposits were Pennsylvania, with 328 companies, with capital of $103,953,067 and deposits of $381,397,305; and Massachusetts, with 46 companies, with capita of $16,677,000 and deposits of $179,278,436.

See Kirkbride and Sterrett, The Modern Trust Company (New York, 1905).

TRUST and TRUSTEES, in the law of equity. In Roman and English law alike that legal relation between two or more persons implied in the word trust was of comparatively late growth. The trust of English law is probably based upon a combination of the Roman conceptions of usus and fideicommissum. To usus is perhaps due the name as well as the idea of that right over property, co-ordinate with the right of the nominal owner, possessed by the person having the use. To fideicommissum appears to be due the name as well as the idea of that confidence reposed in another which is the essence of the modern trust. Usus was in Roman law a personal servitude, or right of one person over the land of another, confined to his personal wants and without the right to the produce and profits which ususfructus carried. It has little in common with the use of English law but the name and the conception of a dual ownership. The fideicommissum is more important (see ). By the legislation of Justinian the law of legata was practically assimilated to that of fideicommissa. The only thing that distinguished the one from the other was the mode in which the gift was made: if by words of direct bequest it was a legatum, if by precatory words, a fideicommissum. It may be noticed, as an illustration of the course afterwards taken by the law in England, that fideicommissa in favour of the Church were so far favoured over others that if paid over by mistake they could not be recovered. In addition to usus and fideicommissum, the Roman division of ownership into quiritary and bonitary (to use words invented at a later time) may perhaps to some extent have suggested the English division into legal and equitable estate. The two kinds of ownership were amalgamated by Justinian. The gradual manner in which the beneficiary became subject to the burdens attaching to the property of which he enjoyed the benefit was a feature common to both the Roman and the English system.