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PHILADELPHIA

Is the greatest collection center in the East, and one of the best equipped Banks in that city

is

The Girard National Bank

WITH RESOURCES OF OVER

$70,000,000

Have You a Philadelphia Reserve Account?

You need one to properly handle your business

LIVE BANKING QUESTIONS DISCUSSED AT PENNSYLVANIA
BANKERS' ASSOCIATION CONVENTION

Animated debate and forceful addresses on the banking problems which confront bankers today made the 22d annual convention of the Pennsylvania Bankers' Association at Philadelphia, May 18th and 19th, one of the most interesting in the history of that organization.

As president of the Pennsylvania Bankers' Association Mr. E. P. Passmore, vice-president of the Franklin National Bank of Philadelphia, in his annual address presented an able and comprehensive review of general financial and economic conditions. On the subject of payment of interest rates Mr. Passmore said:

"On account of the very low rates prevailing in most parts of the country, the net earnings of our banking institutions as a whole, during the past year have not been in reasonable proportion to the enormous volume of business. However, there is another reason beside low discount rates, and more serious because it is not merely temporary, to which I desire to direct your attention, i. e., the steadily increasing cost of deposits. Each succeeding year brings a larger percentage of all deposits under the interest-bearing class and this is a natural tendency which we cannot hope to escape, but surely we should see to it that only reasonable rates are paid and that such rates

bear some proper ratio to the rates obtainable upon money loaned. The mad race for large figures, without regard to interest cost, the unhealthy competition which prompts some banks to send out runners to collect deposits, to assume the risk of delivering pay rolls to distant factories, to furnish special and expensive books of checks and drafts without charge, and to perform almost any sort of unusual and uncalled for service, in order to secure some temporary advantage over other institutions in an effort to get business should be discouraged by the officers of all well-managed banks. Save for the abnormal year of 1907, in which very high rates resulted in correspondingly large profits, the ratio of net earnings to capital and surplus of National Banks, as shown by the annual reports of the Comptroller of the Currency, has steadily decreased during the last fifteen years from 10 per cent. in 1901 to 8.39 per cent. in 1914 and to 7.08 per cent. in 1915. It it fair to assume that a somewhat similar condition exists with state institutions. Is it not high time for us to reduce the cost of securing new business and to confine our competition to the old-fashioned and saner lines of excellence of service and substantial strength as exhibited in our resources?"

HALF CENTURY OF STEADY PROGRESS BY THE PROVIDENT LIFE & TRUST COMPANY OF PHILADELPHIA HOMOGENEITY IN DEVELOPING TRUST AND LIFE INSURANCE BUSINESS

A study of the early history of the "trust company movement" in this country shows that the first corporations to be endowered with fiduIciary powers by special legislative grant were primarily chartered to engage in the business of life insurance, including the granting of annuities. While it is generally acknowledged that the idea of conferring trust powers upon a corporation was originally suggested by the success of the old Agency Houses of India the "trust company" as known today is distinctly an American product. It was the logical outgrowth of the fiduciary obligations assumed by the senior institutions in exercising their charter functions. In Philadelphia, particularly, there was a close analogy in the development of life insurance and trust business, involving the same high standard of trust relationship. It was also quite natural for the widows and orphans who were the beneficiary under life insurance contracts to turn to such corporations in

regard to the investment and management of funds. Because of the subsequent development of life insurance and trust company business along more highly specialized lines most of the old trust companies gradually retired from the insurance field in order to devote exclusive attention to the rapidly increasing volume of trust business.

The Provident Life & Trust Company of Philadelphia, which recently completed its first half century since organization, is one of the few "old line" trust companies which have continued to exercise their charter powers to conduct life insurance, concurrent with the development of the trust departments, although the business, accounts and investments are kept entirely separate. Notwithstanding the many changes during the past fifty years in the methods of conducting life insurance business the Provident has been successful in demonstrating that there is a homogeneous relationship, in the performance of trust

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duties and in life insurance. This is principally due to the fact that this company has persistently adhered to the ultra conservative methods in issuing life insurance policies. In fact one department has been a "feeder" to the other because of the confidence inspired among policy-holders or beneficiaries and trust clients. The record of the past fifty years also shows that the growth of trust business has kept pace with that reported by the insurance department.

The history of the Provident Life & Trust Company is unique in respect to the continuity of management and the relatively few changes in the personnel of executive control. The company has had only two presidents during the half century of its existence. The first president, Samuel R. Shipley, was destined to guide the affairs of the institution continuously in that capacity from the time of organization in 1865 to 1906, two years prior to his death in 1908. His successor, as president, was Asa S. Wing, the present encumbent of that office who also dates his association with the Provident since 1867. While alert to new and changed requirements President Wing has given abundant proof of his ability to keep the company true to the principles of the founders.

Another interesting characteristic of the Provident Life & Trust Company is the strong "family spirit" which prevails among officers and members of the staff. Many of the men who became associated with the company as mere lads have grown grey in the service. The merit system has been strictly observed and advancement has been the invariable reward of faithful performance

of duty. The same code of co-operation and recognition of merit has been observed both in connection with the home office and the large staff of agents. The latter hold frequent meetings for discussion, and uniformity of method as well as stimulation to renewed cffort has been obtaind through the General Agents' Association which convenes periodically at the home office. In order to cement still further the cordial relations and promote efficiency between officers and employees a "Get Together" movement was inauguratd in 1911. The company also issues a quarterly paper called "Between Ourselves" through which valuable information and papers are disseminated.

The Provident Life & Trust Company was organized at a time in the financial and political

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HOME OF THE PROVIDENT LIFE AND TRUST COMPANY

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history of this country when real courage was necessary for launching any new business enterprise. The company was incorporated eighteen days after Lee surrendered at Appomattox. It had its origin in the minds of several Philadelphians who were members of the Society of Friends, who, while traveling in England, had been attracted by the success of the Friends' Provident Institution of Bradford. This institution, established in 1832, had confined its operations to insurance on lives of birthright Friends and had experienced a surprisingly low mortality owing to the exceptional longevity among members of that Society. It was decided to establish in Philadelphia, for the benefit of American Friends, a somewhat similar company on a mutual plan. In order to enable the company to do business beyond the borders of the State of Pennsylvania it was found necessary to organize a joint stock company. The charter, in addition to the authority to insure lives, conferred the right to act as executor, administrator, guardian, etc. The relations of the two departments were fixed by the provisions of the charter. It was provided that the entire surplus in the insurance department was to accumulate for the benefit of the policy-holders, so that the only advantage, direct or indirect, which the stockholders could at any time have from the union of the two features of the business, would result from the fact that the management of the trust business, from which they derived their profit, would be done for them without charge. It was shown by experience that the additional cost of conducting the trust business jointly with life insurance was incorsiderable in view of the advantages obtained. It is conceded that the Provident is one of the most economically managed companies in the United States. Organization of the company was completed June 28, 1865, with the election of directors and subsequently of the officers with Samuel R. Shipley as president. The first office of the company was in the basement at 247 South 3d, and shortly after the building at III South 4th street was leased. Rowland Parry was elected Actuary and Dr. Thomas Wistar the examining physician-the latter serving the company until 1904. The first General Agent was Joseph Ashbrook, who became vice-president in 1905. Another important member of the executive staff was William C. Longstreth, who was elected vice-president in 1867. As legal advisor Joseph

VAULTS OF THE PROVIDENT LIFE AND TRUST COMPANY

B. Townsend served the company until the time of his death in 1896. In 1873, Asa S. Wing, who is now president, was elected assistant actuary having been with the company since 1867. He succeeded the late William C. Longstreth as president in 1881, continuing with that office the duties of Actuary and in 1906, when Mr. Shipley declined re-election, he was elected president. The history of the Provident shows that it was unaffected by the "Black Friday" panic of 1869 when the gold market was cornered. It passed successfully through the trying period brought on by the failure of the Philadelphia firm of Jay Cooke & Co., in 1873. There was no interruption either during the depressed financial conditions attending the resumption of specie payment by the Government in 1879.

Perhaps the most notable chapter in the history of the Provident is that which deals with its rigid adherence to sound life insurance methods during the insurance panic of the early seventies and in paying dividends to policyholders annually despite the general adoption of the deferred-dividend plan which resulted in, the evils leading up to the Armstrong investigation in 1906 in New York. Following that investigation deferred dividends were forbidden

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by law and it is interesting to note that the Armstrong Committee specifically named the Provident as a company which, as a matter of good practice, had always voluntarily kept its expenses within the limitations sought to be made compulsory by law.

In 1871, the capital of the company was increased from $150,000 to $500,000. The first dividend on capital stock was declared in June, 1866. In 1883 the capital was further increased to $1,000,000. From the beginning the company had been exceptionally successful in the execution of trusts and administration of estates. In 1881 the title of trust officer was conferred upon

DIRECTORS' ROOM OF THE PROVIDENT LIFE AND TRUST COMPANY

J. Roberts Foulke, who has continued as head of that department to the present time. In 1884 T. Wistar Brown, who had been largely responsible for the organization of the company and had rendered valuable service as chairman of the Committee on Finance and Accounts, was elected vice-president in which office he has continued to this day. Associated with President Wing and Vice-president Brown of the Committee on Finance and Accounts are the following directors: Robert M. Janney, John B. Morgan, Joseph B. Townsend, Jr., Levi L. Rue and George Wood. This committee meets weekly to supervise the general investment policy.

In commemoration of the fiftieth anniversary of the Provident Life & Trust Company the history of the institution has been faithfully recorded in book form by William S. Ashbrook, Agency Secretary. The volume is handsomely illustrated and the author presents a comprehensive survey of development of the 'company. The official staff, as composed at the present time consists of the following.

Asa S. Wing, president; T. Wistar Brown, vice-president; J. Barton Townsend, vice-president and asst. trust officer; J. Roberts Foulke, trust officer; David G. Alsop, actuary; Samuel H. Troth, treasurer; C. Walter Borton, secretary; Matthew Walker, acting manager ins. dept.; John Way, assistant treasurer; J. Smith Hart, insurance supervisor; Wm. C. Craige, asst. trust and title officer; William S. Ashbrook, agency secretary; Dr. Charles H. Willets, medical director; N. Albert Linton, associate actuary; Franklin C. Morse and Thomas R. Hill, superintendents of agencies. The direc

tors are: T. Wistar Brown, Asa S. Wing, Robert M. Janney, Marriott C. Morris, Joseph B. Townsend, Jr., John B. Morgan, Frederic H. Strawbridge, John Thompson Emlen, Morris R. Bockius, Henry H. Collins, Levi L. Rue, George Wood, Charles H. Harding, J. Whitall Nicholson, Parker S. Williams.

The last official statement of financial condition rendered by the Provident under date of March 30, 1916, in response to the call of the Pennsylvania Commissioner of Banking shows combined resources, (exclusive of trust funds) of $102,996,529, in which is included $82,852,215 ledger assets of the Insurance Department of the company. The capital stock of the company is $1,000,000, surplus fund apart from insurance, $5,000,000 and undivided profits, $548,301. Individual deposits subject to check amount to $12,968,251, with total deposits over $13,590,359. Trust funds amount to $57,716,003, with corporate trusts aggregating in excess of $50,802,000.

The Provident occupies its own home covering a large frontage on the northwest corner of Chestnut street and extending along Fourth street. The building is one of the architectural landmarks of Philadelphia situated as it is within a stone's throw of the historic Independence Hall. The main lobby with its high vaulted ceiling and great depth is suggestive of that stability and roominess which is typical of the quarters occupied by the "old line" trust companies of Philadelphia. A feature of the equipment is a special dining hall for the exclusive use of employees, the Provident being one of the first institutions of the kind to introduce this innovation.

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