CONCENTRATION OF BANKING INTERESTS 413 



gained their greatest reputation and profits from promoting, 

 consolidating, or reorganizing large corporations. In New 

 York city there are private bankers whose capital is counted 

 by the millions, and whose names have become household 

 words. 



In recent years a new class of institutions has forced its 

 way into the field of American banking. Trust companies 

 have existed in the United States for three quarters of a cen- 

 tury, but up to fifteen or twenty years ago their number was 

 small and the scope of their operations was restricted. Origi- 

 nally they were formed to act as trustees of estates and to exe- 

 cute other trusts, while they often conducted a safe deposit 

 business. With the growth of corporations, trust companies 

 began to act as transfer agents, or as trustees under mortgage 

 deeds, executed to secure corporation bonds. Such functions 

 were of great financial importance, but did not carry the earli- 

 er companies into the territory occupied by banks of deposit 

 and discount. Indeed, it not seldom happened that their 

 charters or the general laws of the state prohibited them from 

 receiving ordinary deposits or doing a discount business. 

 Gradually, however, a change was effected in the law or in the 

 practice of these associations, and trust companies began to en- 

 gage in the work of commercial banks. To-day, besides re- 

 ceiving time deposits, they accept deposits that are subject 

 to instant withdrawal by check; and they make extensive 

 loans, generally upon collateral security. To their original 

 business, therefore, they have added the ordinary banking 

 functions; and these are exercised without the restrictions 

 which the law imposes upon banking institutions. The result 

 has been that trust companies have multiplied rapidly, especi- 

 ally in financial centers, and that their competition has been 

 felt severely by the banks. In 1902 there were 727 of these 

 institutions in the United States and their aggregate deposits 

 exceeded $1,500,000,000. 



At the present moment, therefore, there are no less than 

 14,913 associations in the United States that are engaged in 

 commercial banking. In the ordinary discount and deposit 

 business, the national banks still predominate, but their su- 

 premacy is challenged by the competition of other institutions. 



