Of late many commercial banks, especially National, have established trust departments. Through their trust departments banks frequently act as stock registrars so as to insure that when stock is transferred from the name of one to that of another, the old stock is cancelled and that no more new stock has been issued than authorized. They also act as transfer agents; that is, they fill out the new stock certificates in the name of the new holder in exchange for the old certificates which are turned in. They act as corporate trustees under reorganization agreements; this involves their handling all the old and new bonds issued, and the work of changing denominations from small to large. They act as trustees for individuals; that is, they hold in trust or for the benefit of others. They receive trust deposits of trust funds. And they hold securities for beneficiaries, collecting the income on them and crediting the beneficiaries' accounts or remitting, as the case may require. Many trust departments also maintain safe-keeping vaults in which are kept customers' securities and other valuables, and they perform various tax services, especially under income tax law. The foregoing is intended only as a brief indication of trust functions. The trust fund ledger might well be explained. It is usually a rather large record with loose-leaf sheets devoted to the various estates, the funds of which are being held in trust for beneficiaries. A typical form of trust fund ledger sheet is the following:

The deposit of funds received for a given estate are entered in the money column headed "principal" on the credit side of the sheet for that estate. Interest credits are entered under "income," also on the credit side. Reductions of the funds of the trust of either principal or income are entered on the debit side in the proper column, either principal or income. The sum total of net credits of all funds in the trust fund ledger must equal at any time the trust fund account on the general ledger of the bank. In determining the net balance due under a trust, the debit "principal" and "income" columns are deducted from the credit columns.

Trust Department Income

Here again the income would be determined by the nature of the business transacted, but the common forms of income are charges made for income tax reports rendered, service charges for the safe keeping of securities, commission charges for registration of stocks, commissions for the service of coupon payment, and so on. These items would be credited to trust fund commission account kept on the general ledger of the bank. It should be observed that the trust funds received through a trust department go to increase the available funds of the bank reflected in cash and reserve.