of any member bank of a Federal Reserve bank until sufficient time has elapsed for the items to get into the hands of the member bank on which they are drawn. If checks or drafts on any member banks are collected for the accounts of members, the cost of collection and the exchange charged thercon should be assessed against the members endorsing the items to the Federal Reserve banks, and these charges should be passed down the line to the parties who draw such checks and drafts. Under no conditions should a member bank be permitted to absorb the cost and exchange charges incurred in collecting, through the Federal Reserve bank, checks and drafts that are drawn on non-members. It is not only desirable but imperative that every possible effort should be made to improve the collection systems in the commercial banks throughout the country and to establish and maintain a country clearing house in every city that has sufficient business to justify the maintenance of such an organization; also to co-operate with the Federal Reserve Board and the Federal Reserve banks in their efforts to work out a plan of clearing along the above lines. The development of these three channels for liquidating cash items can be carried on harmoniously. They can be dovetailed and the volume of business will naturally flow into the channel that affords the best service at the lowest cost, whether that channel be the country clearing house, the regularly organized commercial banks or the Federal Reserve banks. Sweeping Away the Cobwebs of Tradition In an address on "Helping the Bank Grow" delivered before the Florida Bankers' Association at Daytona by Mr. Fred W. Ellsworth, publicity manager of the Guaranty Trust Company of New York, presented some illuminating and candid views as to the kind of publicity which develops new business for a bank or trust company. He dwelt upon the need of commanding the confidence of the community and of enlisting in the work of building up business the efforts of stockholders, directors, officers, employees and finally the customers themselves. He said in part: "There are comparatively few banks in our country today that do not possess strength and character. A portion of these banks are making their facilities known to the public by means of advertising, and are experiencing more or less development and growth. Such of the others as are hiding their lamp under a bushel, because ethically opposed to advertising, will not be able to attain their maximum growth until they have swept the cobwebs of tradition from their walls, brushed from their windows the dust of 'we-must-do-it-this-waybecause-our-forefathers-did-it,' and fling out to the breeze the twentieth century banner of conservative, sensible, logical, continuous publicity. When they have done this, they will have fortified themselves against commercial mildew, and will have prepared themselves for successful, aggressive action in building the business of the bank." INDIANA: BICKNELL.-The Bicknell Trust & Savings Company is organizing in this city, with a capital of $25,000. COLUMBUS.-The Farmers Trust Company is organizing with a capital of $75,000. Bankers' Convention Calendar TEXAS-Houston, May 2-4. FLORIDA-Daytona, May 7-8. EXECUTIVE COUNCIL, A. B. A.-Briarcliff, May 8-10. RESERVE CITY BANKERS-Detroit, May 11-12. TENNESSEE-Chattanooga, May 18-19. NEW YORK-Atlantic City, N. J., June 8-9. NEW ENGLAND BANKERS' ASSOCIATION-Swampscott, Mass., June 16-17. MASSACHUSETTS-Swampscott, June 16-17. RHODE ISLAND-Swampscott, Mass., June 17. SOUTH CAROLINA-Kanuga Lake, N. C., June 19-21. IOWA-Waterloo, June 20-21. MINNESOTA-Minneapolis, June 22-23. A. I. B.-Cincinnati, September 20-22. KENTUCKY-Paducah, October 10-11. Trust Company Service Means the Saving of Money It is important to realize that the naming of a Trust Company to serve as Executor under Will means the saving of money as well as of time and trouble. Owing to the fact that Trust Companies, such as the First Trust & Savings Company The Guardian Savings & Trust Company. The Superior Savings & Trust Company. The Citizens Savings & Trust Company and The Cleveland Trust Company are thoroughly experienced and equipped to handle every problem the moment it calls for attention, the danger of expensive delays or neglect is eliminated, thus making certain the most economical and satisfactory management possible The fees allowed by law to Executors are identical regardless of who may be selected Therefore the cost of Trust Company management is never higher than any other form of management, while the work is always performed in the most systematic and accurate manner, avoiding many incidental expenses that might otherwise arise through lack of knowledge, experience or facilities to cope with the situation in the most efficient manner A Concrete Example of Trust Company Service The very practical benefit of Trust Company protection is well illustrate in the following case: A business man who died recently left the funds derived from his insurance policies in charge of a Trust Company. The income is 10 be paid to a son and daughter until they reach the age of thirty, when they are to have the right to dispose of half the principal. The other half of the principal remains in 1 rust, yielding them a life income with the power to dispose of the principal by Will. Such a Trust is an exceedingly practical and sensible arrangement and a similar one can be created by naming any one of the following Trust Companies as Trustee-The Citizens Savings & Trust Company. The Clewland Trust Company. The First Trust & Savings Company. The Guardian Savings & Trust Company. The Superior Savings & Trust Company The experience and knowledge of the Officers of these Trust Companies guarantee the most satisfactory service in trusts of this kind and the expense is under no circumstances any greater than it an individual was appointed Consultations cordially muted The Age of Standardized Service Nowadays people appreciate the importance and economy of engaging service that is thoroughly standardized because such service is a guarantee against wastefulness and general inefficiency. In appointing an Executor of your estate it is well to remember that by naming a Trust Company you obtain all the advantages of standardized service Your estate is assured economical and efficient management, there is no possibility of interruption, unnecessary expenses are never incurred and furthermore, undinded attention is always given when required to the interests of your estate and of your beneficiaries. For these reasons Trust Company service is growing steadily in favor and successful business men are more and more making a point of naming a Trust Company as Executor under their Wills The Officers of The Cleveland Trust Company The First Trust & Savings Company. The Guardian Savings & Trust Company. The Superior Savings & Trust Company and The Citizens Saving & Trust Company will apprec late the opportunity of explaining the standardized and efficient service which these institutions render as Executors under Will THERE IS A SECOND DUTY THAT A MAN OWES TO HIS FAMILY or to those dependent upon him which is very nearly as important as the first duty of providing for them during his lifetime This second duty is to make definite provision -leaving nothing to chance-that his estate shall be property administered and that his heirs and beneficiaries shall derive the greatest possible benefit from the assets he leaves. No greater mistake could he made than indefinitely postponing the writing of a Will and the naming of un Executor By appointing a Trust Company such as The Superior Savings & Trust Company. The Citizens Savings & Trust Company. The Cleveland Trust Company. The First Trust & Savings Company or The Guardian Savings & Trust Company to act as Executor or Trustee, the testator performs his second duty efficiently. for every one of these Trust Companies, by reason of its successful experience, complete equipment and the strict laws under which it operates is thoroughly qualified to afford the mast satisfactory service obtainable. Consultations are cordially invited regard ing the appointment of any one of the above named Trust Companies as Executor or Trustee. The above are reduced fac-similes of newspaper advertisements used in connection with the joint publicity campaign now being conducted by the five leading trust companies of Cleveland. These advertisements are intended to appeal especially to the man who has a moderate estate as well as to men of wealth and who are interested in making proper provision for the custody and management of their estates after death. The preparation of these advertisements is in the hands of Mr. Francis R. Morison. SHOULD STATE BANKS HAVE A NATIONAL ORGANIZATION? NECESSITY FOR CLOSER CO-OPERATION GEORGE T. MCDERMOTT (NOTE: The following extract from an address delivered on April 18th, before the Kansas State Bankers' Association is of timely interest in view of the movement to organize a new Section of the American Bankers' Association at the forthcoming convention in Kansas City, to be composed exclusively of State banks engaged in commercial banking. The prime purpose of the proposed State Bankers' Section is to bring about greater unification in State banking laws and to crystallize sentiment as well as to unite the influence of State bankers in safeguarding their own interests in connection with the operation of the Federal Reserve system. The total membership of the American Bankers' Association is over 15,000, of which number 6,200 comprise State bankers. It is also likely that the proposal for a State Bankers' Section was also suggested by the fact that the National banks organized a separate Section at the last convention.) More and more we are becoming a nation rather than a union of States. The power of Congress is infinitely wider than our forefathers dreamed. The constitution has become a very elastic document. Within the last two years Congress has made sweeping changes in our financial system. Every bank is affected by it. Congress could have enacted provisions in that law that would have made it difficult for State banks to compete on even terms with their friends across the street who have a National charter. That law will probably be amended, and those amendments may affect you even more vitally than the original law. There is a multitude of other matters which may or should affect your interests at Washington. How much Government money do you have on deposit in your bank? What reason is there why you should not have your share? Do not your stockholders pay as much National tax as the stockholders of the National bank on the other corner? Are you not citizens of the United States? This is as much your money that is being deposited as any one else's. Why shouldn't you have your share? Do you want it? If so, what are you doing to get it? Do you want the Government to enable National banks to set up branches, so that a Kansas City bank, its capital and money there, can ship an old safe and a wire wicket to your town and run as a National bank with a capital and surplus of ten million? That measure is pending before Congress. Have you taken steps to see that the Committee on Banks and Banking hears your side of the case? Safety in Nation-Wide Co-operation Do you want to continue forever sending your customers down the street to get a cashier of a National bank to attest their signature on a transfer of Government bonds? Isn't there some danger of your losing business by this, to say nothing of the humiliation it must be to you? Do you want the opportunity to present your side of the matter when the reserve law is up for amendment? Do you ever want any recognition in Congress or before the departments at Washington? If you don't want these things, then you don't need a national association. There are two courses that lay open before the State bankers. They can form a national association and have their interests guarded and furthered in an intelligent manner; or they can roll over in bed and trust their affairs at Washington to the Lord; but in doing this, they should remember that the Lord helps those who help themselves. Of course, without an association, you may write in a desultory manner to your Congressman, and that helps some. But you have no cohesive power-no national organization that can tell your Congressman the facts, and also tell him that there are two hundred State banks in his district, that they will soon learn that he has been told the facts, and that they will know if he votes against them; and that's what smokes the 'possum out of the tree. The national association will see that no member votes wrong through ignorance; and if he votes wrong for any other reason they will see that the boys out home find out about it. Powerful Influence Wielded by State Banks And what a tremendous power it is that lies dormant and untouched within your very grasp. Seventeen thousand engaged State banks and trust companies, and many times that many men engaged in the business. Leaders in their community, all of them, and scattered into every nook and cranny of this great country. Commanding over seventy per cent. of the deposits of the country, their officers come in daily contact with more men and women than any other class of men in all this country. What a pitiful thing that such tremendous opportunity for good should be wasted and dissipated through lack of organized effort. Now you are unknown at Washington; organized you would be, in my opinion, the most powerful influence that operates at the National Capital. It is not necessary, in order to form such an association that your allegiance should be divided. The associations in the various States can maintain the National body; delegates can be apportioned to the States according to the size of their respective associations, and expenses defrayed in a similar manner. It is not for me to suggest details of a plan of organization, but it occurs to me that the most efficient and cohesive body is one built upon and supported by the State associations. With such an organization you will gain recognition where now you have none. You can see that bad laws are not passed through ignorance or because of haste, and that is the source of most poor legislation. You will have a means of securing legislation that you need, and most of such legislation is lost because there is no one to look after it. And you will also be protected against political legislation. For when Congress gets ready, just before election, to pass some laws for home consumption, they'll pause before they fleck their whips at the State banks, and will say to themselves, "We'd better not; they're organized." Profit-Sharing Coupons in Connection with Banking by Mail System The Putnam Trust Company of Greenwich, Conn., has in preparation a profit sharing coupon which it proposes to issue in connection with its banking by mail system. The coupon is to be sold to merchants to be given to their cash customers in the same way that the gift coupon is utilized. It is thought that it will be popular because it represents a specific percentage of the customers' purchase. There will be two denominations; one-fifth of one cent and one cent. Both denominations will represent 4 per cent. of the customer's purchase. One-fifth of one cent is 4 per cent. of a five cent purchase and one cent is also 4 per cent. of a twenty-five cent purchase, so that the merchants can advertise the slogan: "Four per cent. on what you spend and four per cent. on what you save." By its terms as set forth in the coupon itself, it is redeemable at the issuing bank only in the form of a credit in a savings account when presented by the individual; in cash only when sent to it for collection by other institutions that have given credit for it to their own depositors. A clause in the coupon states that banks are requested to receive the coupon for credit only with withdrawal privilege not less than thirty days. Under these terms the coupon will be applicable for deposit in any bank throughout the country. The banks giving credit are reimbursed by the issuing institutions. The Putnam Trust Co. is now permitting the use of its banking by mail certificate to other institutions under arrangement with them for the actual printing of the certificate so that its form shall be the same by whoever issued to conform with the terms of the patent. Arrangements will also be made with a limited number of institutions in widely separated sections who will issue the coupon in connection with the mail certificate. LIABILITY OF A BANK OR TRUST COMPANY IN PAYING OR CERTIFYING A FORGED CHECK COMPREHENSIVE REVIEW OF JUDICIAL DECISIONS AND RULINGS BY ENGLISH AND AMERICAN COURTS F. THULIN, LL. B. With Union Trust Company of Chicago, Ill. SECOND INSTALLMENT (SYNOPSIS: The preceding installment dealt with the cases in which the holder was not the payee and was not prejudiced by the action of the drawee in paying or certifying the forged check. The early English cases were noted and their significance was traced down to date. Furthermore the relationship existing between the English rule and the law of the various commonwealths in America was shown, and reference was also had to the effect of the Negotiable Inst. Act on the case law)': . Cases in Which the Holder is Not a Payee of the Check, But did Change His Position (i. e. was Prejudiced) on the Faith of the Certi fication or Payment of the Instrument The question whether a bona fide holder had altered his position because of the certification or payment by the drawee is a question of practically no moment in those jurisdictions, which either by statute or judge made law have adopted the ruling laid down by Price vs. Neal. The whole purpose of the rule is to obviate that inquiry. If the holder be a bona fide one it is a matter of indifference whether he has changed his position or not. Any jurisdiction which purports to follow the So. Carolina case of Ford vs. Bank (ante) would logically be compelled to ignore this question. An unqualified indorsement warrants the genuineness of the drawer's signature, unless the holder threw the burden on the drawee, or satisfied himself of the genuineness of the signature. Such a rule has no element of reliance on the action of the drawee. Negligence of the Drawee It is likewise true, that the negligence of the drawee in honoring the instrument is of no moment except possibly in those jurisdictions which would follow the ruling of the McKleroy case. As the whole reasoning of that case is based on equitable consideration, it would seem that to allow a drawee to recover or to successfully resist payment, he must not have contributed to his predicament by his own carelessness. However in those jurisdictions which follow the law of McKleroy vs. The Southern Bank, the question of change of position is the one determining the liability of the drawee. Change of position usually analyzes as follows: (a) The positive reliance by the bona fide holder on the payment or certification by the drawee. (b) The change of position due to negative reliance. Usually the fact of positive reliance would arise when the instrument at the time of the receipt by the holder was in a certified state, for no jury or court would probe into a man's mind to weigh what importance the holder attached to the certification on the check, but would give the holder the benefit of the doubt. (3 Cent. L. Journal 220.) Positive reliance can be shown more clearly, as the holder not advancing any money or value until he had received payment or had procured the certification of the check. The negative change of position arises, where the holder had received the instrument not on the faith of any certification, but had already advanced value at the time of the certification or payment by the drawee. The change of position is the inability of the holder to have as ready a recourse against the person or persons from whom he received it, as he would have had had the drawce discovered the forgery at the time of the presentation (or even later) of the check. An illustration of the above would be the insolvency of the person from whom the holder received the instrument, subsequent to the payment of the check, and prior to the notification of the forgery. In the case of Canadian Bank of Commerce vs. Bingham (Washington 1907) the court said: |