filling of the conditions or the desire on the part of a corporation to sell the same in compliance with conditions, is held in the treasury of the company as "treasury stock"; stock authorized and issued, but not yet sold. Trial Balance. Taking a "trial balance" of a ledger is the method used to prove the mathematical correctness of the posting" in the ledger. Trial of the Pyx. The English coinage laws provide for the setting apart, from time to time, of specimen coins in order to ascertain whether or not the laws regulating the weight and fineness of the coins are being complied with. Once a year the coins so collected are tested by weight and assay before a jury summoned from the "mystery of goldsmiths of the City of London or other competent persons." As the coins are chosen so as to represent fairly all the coinage of the period since the last test, the trial amounts to a public attestation of the coin as to its standard of purity. The box or chest in which the specimen coins are placed awaiting the trial is the pyx." Triangular Operation. A method, to use an example, by which London pays its debts to Paris through the medium of New York. Really being a shifting of London to our shoulders of the duty of meeting the demands of Paris. True Discount. True Discount of a sum payable at a future time is the amount of interest paid in advance which added to the amount received for use exactly equals the face of the note or draft. This differs from Bank Discount in that interest is figured upon the precise sum of money the borrower receives, whereas, according to the method of Bank Discount the borrower pays interest on an amount larger than he receives for use. True discount is mathematically correct inter est. How to figure True Discount. Example: What is the true discount of $1000 six months note at 6%? First, obtain the present worth. Divide the principal sum by 1 plus the interest for the given time and rate: 1 Present Worth = 1+ I (I = Interest) Thus, present worth $970.87 deducted from $1000 shows the true discount $29.13. Or, using a True Discount Table, multiply the principal sum by the true discount of $1.00 for the given time and rate of interest. Trunk Lines. As commonly understood, the lines of railway connecting the Atlantic Seaboard and the Central West. I See "The Coinage Act, 1870," 33 Victoria, Chapter 10. 66 Trust. There are two meanings commonly attached to the use of this term: the "trust" as popularly known, and the 'legal trust," so-called. In its popular sense, it means a combination of competing industries or businesses for the purpose of monopolistic control, as was, for instance, the Sugar Trust, in its early days, when it was simply the combination of many of the principal refineries for this purpose. Its legal sense is better explained by an illustration than by any process of definition. From 1881 to 1887 many of the whiskey distillers had pooled their interests for the purpose of maintaining prices in about the same way as the sugar refineries already referred to, and this was, also, a trust in the popular sense. But in the spring of 1887 it was deemed advisable to form a "legal trust," and the stocks of the individual distilleries, seeing fit to enter the combination, were exchanged for certificates of the newly formed Distillers' and Cattle Feeders' Trust, commonly known as the "Whiskey Trust." This was managed by trustees, who placed a manager over each distillery, and those not found profitable were immediately discontinued. This is a typical illustration of a "legal trust," namely: "A combination of competing concerns effected through the exchange of the stocks of the constituent companies for certificates of ownership issued by trustees who manage the enterprise." Or, to put it dif ferently: "An organization managed by a board of trustees to whom all the capital stock of the constituent companies is irrevocably assigned; in other words, the original shareholders accept the trustees' certificates in lieu of former evidence of ownership." A generally accepted reason for the creation of a "trust" is to control output and prices for monopolistic purposes. "The replacement of independent enterprises already conducted on a large scale by a single centralized management." Professor Ripley, in his very able book "Trusts, Pools, and Corporations treats upon this subject most completely, the following extracts being from that work: "The vast majority of writers recognize that the Trusts generally attempt to secure a monopoly and actually possess monopolistic features. . . . It is clear, furthermore, that the meaning attached to the term is such a degree of control over the supply of a commodity as enables the person or persons possessing it to control the price, and fix charges at something more than the normal competitive rate. In order to be complete, the monopoly must be able to maintain prices at the point of highest net returns. ... If the tendency towards combination means any. 1 Prof. Wm. Z. Ripley, Harvard University. thing, it means the substitution of centralized and consolidated management for the rivalry of independent concerns; and this may fairly be termed monopoly . . . or that Trusts represent a vast accumulation of productive resources which renders the competition of small concerns hopeless.' 6 Professor Bemis looks upon a trust as virtually a monopoly of large capital,' possessing vast possibilities of social advantage;' but thinks that we cannot pronounce a final judgment until we have first removed all special privileges.' Refer also to "Trust Estate," and "Real Estate Trust." Trust Certificates. See "Stock Trust Certificates." Trust Company. A corporation chartered under State laws and not amenable to Government control as in the case of national banks. Originally formed to perform certain acts in connection with the banking business which were not permissible for national banks. The laws have since been changed enabling national banks to perform almost any act that may be performed by a trust company. Trust companies are allowed to conduct a general banking business, receive deposits subject to check, make loans, collections, etc. Trust companies may join the Federal Reserve System, rediscount notes, but may not issue bank bills which circulate as currency, as can national banks. In some States, trust companies are allowed only one branch unless they are granted more by a special act of the legislature. Trust companies have specialized to a large extent in so-called trust business, that is, acting as executor and trustees under wills and under deeds of trust. This business has increased tremendously with the trust companies, as the advantages of a corporate trustee are becoming better known. One reason why it is becoming more customary to appoint a trust company as executor, trustee, guardian, or administrator, is that such a company is looked upon as a permanent institution, and, therefore, not subject to the annoyances or confusions which might arise from death, incapacity, or unwillingness to serve on the part of one or more individuals. Also it is a state-regulated organization minimizing the possibility of failure or dishonesty; it is widely experienced in legal details of trust administration and taxes; its resources enable it to judge investments more wisely, and the magnitude of its investments enable it to obtain a better yield than the ordinary trustee; in addition it is confidential and impartial. The chief disadvantage is the impersonal oversight of a large organization as against the energetic management of an individual. They also act as trustee under bond mortgages, as agent for registering and transferring shares of stock, and as fiscal agents They often in general for corporations and municipalities. play a prominent part in underwriting syndicates, in reorganization proceedings, and act as assignee and receiver. Most trust companies are equipped with safe deposit vaults and space for receiving silver and other valuables for safe keeping. Many trust companies maintain a savings department and have a securities department through which securities are bought and sold to the public. Trust Company Account. See "Bank Account.' Trust Company Receipts. When a corporation is undergoing re-organization, or when, for any purpose, the deposit of outstanding securities is asked for, a trust company may act as custodian for the same, and issue its receipts which may be traded in upon the stock exchange or used in the form of any other negotiable instrument, as, for all practical purposes, they represent the original securities. Trust Deed. The written or printed instrument which conveys the title of property to some party to be held in trust for others; the instrument which provides for the duties of a trustee of a mortgage, and sets forth the rights of the borrower and the lender. The law finds other uses for "trust deed" than the above, but in investment matters the definition here is what is understood. Trust Estate. An estate which is the property of an individual, but the management of which is vested in a corporate or individual trustee. The income from such an estate is usually distributed to the owner (beneficiary). Bonds held by a Trust Estate should be amortized on a yield basis in order that the principal may be kept intact. Trustee. Used most commonly in reference to an individual, banking house, bank, trust company, etc., acting as "trustee " of a mortgage. When a corporation desires to borrow money by the issuing of bonds there must be some party to act in the common interest of both the lender and the borrower. Trust companies are becoming the most common class of "trustees," and buyers of bonds, nowadays, prefer to have some such institution act as "trustee " of the mortgage securing an issue. The majority of trust companies investigate quite carefully all legal documents in relation to the bonds to be issued; that is, they often investigate the legality of the franchises; ascertain that the mortgage covers the property which it purports to mortgage, and is properly drawn; and that all other legal requirements are duly complied with. They then certify the regularity of the issue and each bond bears the trust company's certificate in some form," which indicates that the bond has been issued under its authority acting as "trustee." Should a default in either interest or principal occur, or the promises of the corporation borrowing money not be fulfilled, then, under certain conditions, it is the "trustee's" duty to enforce these promises or take possession of the property and act for the benefit of the bondholders, in accordance with the terms of the trust deed. One who has the legal custody of money or property (holds it in trust) for others is a trustee." Trust Estate. An estate whose legal possession and benefits are vested in one or more persons, the actual possession and management of it, however, being intrusted to another party or parties sometimes called "trustee," or "trustees." Trust Funds. Money which, under specific conditions, is placed in the hands of an individual, several individuals, trust company, etc., to be cared for and managed accordingly. Investments by a trustee should be made with great care. It may be said that securities legal for investment by both New York and Massachusetts Savings Banks are suitable for trust funds. Trust Receipt. A receipt given by an importing house to a banking house on account of goods imported but against which the "bill of exchange " has not matured and so has not been paid. This gives the importing house the possession, but not the title to the goods. Some receipts provide for a storage of the goods in a warehouse, under a "warehouse receipt." "turn" Turn. "A profitable turn;" a profitable and finished transaction. A" turn " is the selling of a security (or anything) after its purchase, or a purchase to make good a contract to deliver. (See "Short Covering.") Turned Down. Declined to buy; declined to avail oneself of the privilege. Suppose a banking house buys an issue of bonds subject to the usual conditions of investigation, and, upon making its investigation, finds facts not as represented, it ends negotiations, and declines to purchase the issue. In bankers' parlance they are said to have "turned down the issue." Turned Over. To sell; dispose of. "Turned over their stocks at a profit; " sold them at a profit. Turn in the Market. A change in the trend of prices. Twenty-Cent Piece. A silver coin of the United States minted only to the extent of $271,000. This piece of money was found to be unpopular, being near the quarter-dollar in size and liable to be passed as such. Its coinage was discontinued by the Act of May 2, 1878. Legal tender to the extent of $10 in any one payment. |