Trust Companies

Trust Companies, corporations formed to act as trustees according to the terms of contracts known as trust agreements, particularly prevalent in the United States. The trust company exists in various forms and combines with its trustee business numerous other types of banking—for instance, the private savings-bank business, mortgage investment, and title-guarantee and other insurance; and, more recently, a general banking business similar in most respects to that of the ordinary deposit bank.

The trust company is an American business innovation first begun in the early 19th century, when the Farmer's Fire Insurance and Loan Company was incorporated in New York. Other trust operations were soon started in New York, Boston, and Philadelphia, and a steady increase in their numbers followed. A century later, almost 2,000 trust companies were in existence in the United States.

Modern trust companies perform many regular banking functions, and large banks usually have their own trust departments or affiliated trust companies. Among the specific functions of a trust company are the following: to receive deposits of trust moneys, securities, and other personal property from any person or corporation and to lend money on real or personal securities; to lease, hold, purchase, and convey any real property necessary in the transaction of its business; to act as trustee under any mortgage bond issued by a municipality or corporation; to act under the order of a court of record as guardian, receiver, or trustee of the estate of a minor; to take charge of and manage commercial or personal property, as directed by a court, an individual, or a corporation (including the collection of rent, interest, or dividends due on the property); to purchase, invest in, and sell stocks, bills of exchange, bonds and mortgages, and other securities; and to accept, according to the terms of a last will and testament, the appointment as executor or trustee of the estate of any deceased person.