(c) Trusts performed for corporations, private and public. The trust company is prac tically indispensable to the large corporations of to-day, as well as to many of the smaller ones. It acts as trustee under mortgages or deeds of trust securing bond issues, as transfer agent for stock, as registrar for stock or bonds, as custodian or manager of sinking funds, as fiscal or financial agent for various purposes, for States, municipalities, railroad and indus trial and other corporations. It pays bonds, coupons, interest It may take charge of the disbursement of dividends and interest, attend ing to the publication and mailing of notices, etc. For syndicate managers, voting trusts, etc., it issues and collects calls for instalment payments and computes and distributes to the proper parties the amounts of their participa tions in the proceeds. It acts as depositary of cash and securities under varying condi tions; as depositary and trustee for under writing syndicates; as agent to receive sub scriptions for securities and to deliver same when issued. Its services. are often used in corporate financing and reorganization. It may of course perform for corporations trusts of the kinds already described as undertaken. for individuals under private agreement.
2. Banking Functions.— Trust companies have always transacted a large amount of sav ings banking business, and years ago became formidable rivals of the savings banks in this field. In more recent years they have invaded the field of commercial banlcing. While the laws of many States formerly limited their functions in the field of commercial banking, in particular forbidding them to discount com mercial paper, and although they are still so restricted m some States, the tendency in re cent years has been to remove these restrictions and in many States at present they have all the banking powers of ordinary National or State banks, except the right of note-issue.
3. Safe Deposit Business.— Trust com panies very generally maintain safe deposit de partments, •in which they rent private boxes for the safe-keeping of securities, valuable papers, jewelry, etc., and space for the storage of more bulky valuables.
4. Other Functions.— The three classes of functions above described are those most com monly exercised, in varying proportions, by the average trust company. Some companies maintain bond or investment departments, for the purchase and sale of high-ffrade securities. Trust companies in sorne States formerly transacted fidelity or title insurance business, and a few companies still transact such busi ness; but the tendency, both in legislation and in business practice, is to leave this field to companies organized for this special purpose. In a number of States trust companies transact a real estate agency business. Other functions are sometimes found, the extent of powers being determined by the laws of the different States.
It should be noted that not all trust com panies undertake all of the functions above enumerated. The functions actually performed by corporations • bearing the word "trust" in their titles vary widely. There are some trust companies which devote themselves exclusively to trust business; there are many which do no trust business, and are in fact commercial banks, or savings banks, or both commercial and savings banks. Others transact trust and savings business, but no commercial banking business. In several of the Southern States there are °trust companies" whose business consists solely of dealmg in real estate or in surance or of a combination of the two. There are also some such companies whose business is that of dealers in real estate mortgages or mortgage bonds.
Organization, Regulation and Manage ment.— Trust companies are creatures of State legislation, and are organized under the laws of the State in which they are to be lo cated. Formerly they were chartered in many States only by special act of the legislature and in some States under the general incorporation laws. Most of the States now have general trust company laws, which provide specially for the incorporation, powers, government and regulation of such companies. The general trust company laws in most States contain a number of provisions intended to safeguard the business. The capital stock required is usually much larger than that specified for banks in the same locality, and it is generally required that trust companies apply a portion of earnings each year to the building up of a surplus until it reaches a certain proportion (frequently 20 per cent) of the capital. In many States stockholders are subject to double liability. Restrictions of various kinds are placed on the making of loans and investments and the investments of the trust department are specially restricted. Adequate reserves are required. Practically all of the States stipu late that trust funds must be kept absolutely separate from those of the company and of other departments, and also that securities be longing to specific estates be so marked and recorded as to clearly designate the owner, so that in case of failure of the company the trust funds would not be affected. Many States forbid the transaction of any trust business until the company has made with State author ities a deposit of cash or securities in certain specified amounts as special security for the faithful performance of its fiduciary obliga tions. Practically all of the States require trust companies to make regular reports to State officials, varying in different States from once to five times each year; and to submit to examination by State officials, usually once or twice each year.