432 WILLIAM P. GEST 



seem to be too general, I will pause for a moment to show that 

 all of its operations come within these terms. 



Money deposits; These are for the conservation of capi- 

 tal. 



Loans are for the employment of capital. 



Safe deposits are for the conservation of capital, such as 

 gold, jewelry, bullion, or its evidences, such as stocks, bonds, 

 etc. 



Trusts: These are for the conservation of capital under 

 certain special conditions. Trusts also involve investment, 

 resolving themselves thus into a means for the employment of 

 capital, because it is the duty of a trustee, like the holder of the 

 talents, to lend out the funds and make them productive by 

 investment. This may be either in certain restrictive forms 

 of loan or in various kinds of securities. A trust fund is, there- 

 fore, free capital, though less free than bankers' funds. The 

 other functions of a trust company, such as the registration of 

 stocks, the transfer of stocks and loans, corporate trusteeships 

 (as of mortgages, car trusts, etc.), the insurance of titles, the 

 insurance of fidelity, and various other forms of activity, may 

 all be classed as methods of insuring the conservation or regu- 

 lating the transfer of capital. 



It may be well here to distinguish between a trust com- 

 pany and a bank. These words cannot be defined exclusively 

 of each other; they can only be distinguished by description. 

 For some of their functions are alike, and trust companies differ 

 among themselves in the class of business which they execute. 

 In general, there are three kinds of banks — banks of deposit, 

 banks of issue and banks of discount. National banks, at 

 present, fulfill all of these functions. Now, receiving deposits 

 of cash is common both to banks and trust companies, but the 

 issue of notes and the discount of bills are distinct features of 

 banking. They do not pertain to the preservation of capital, 

 but to the creation of credit. They are entirely different func- 

 tions and are not normally a part of a trust company's 

 business. We may distinguish, therefore, banking from a trust 

 company business by saying that while the trust companies 

 deal in capital, banks create and deal in credits. Both the issue 

 of notes and the discounting of bills belong to the credit busi- 



