ginning based on the needs of the insurance company,
which needs it is hard to define and limit, and accordingly
hard to say just where the provision for them becomes more
of an advantage to the trust company than to the insurance
company. Standards will differ, and change, too. But here,
let us say, is a great insurance company with over
$50,000,000 of assets which it has collected from its
policy-holders, and which are needed for carrying out their
contracts, and which safety requires shall be held in sound
investments. Such an insurance company has to have a large
and active bank account. It must deposit checks and all
forms of paper promises or orders for collection, and for
the payment of expenses and claims must have a large sum of
ready money. This is the absolute need; but the directors
are not bound by any legal requirements to limit their
deposits to just what will reasonably suffice as a margin to
pay current claims and expenses, nor are they required to
patronize any particular banks. They conclude, let us say,
that 'it will be safer' to take some banking institution for
such depository which they 'know about,' and of which,
perchance, some of them are directors, or in which, at all
events, they are stockholders. If no such trust company is
at hand, it is very easy to start one, and easy for the
directors of the insurance company to be in 'on the ground
floor.' The insurance company then begins to bestow its
patronage. The trust company, which is thus supplied with
funds, begins to feel the effects of this attention; by the
use of its big deposits large dividends are earned. A 'boom'
begins, and the director who 'had the sagacity' to invest in
the stock of the trust company when it was around about par,
sees his holdings advance by rapid strides until he is
offered perhaps ten times as much for his stock as its par
value. He has seen this stock advance in value in proportion
to the amount of funds of the insurance company which the
trust company had at its command. It has been worth much to
him 'to be on the inside,' and will be worth much in the
future for him to be on the inside if any new trust company
is to be a depository; the bigger the deposit, the more it
will be worth to him."

All thinking people, after readi