Loan and trust companies may, with propriety, be termed American institutions. They had their birth in this country. Charters under which some are working today date back sixty to seventy years. One corporation in Philadelphia, doing a loan and trust business, was organized in 1812, and another in 1832. In New York one was granted a charter in 1822, and another in 1830. But the great majority have come into existence within the past twenty years. Twenty-five years ago but few of the loan and trust companies now doing business were in existence; hence it may be said that they are a modern institution. In many of the larger cities one or more may now be found. In New York there are eleven, in Philadelphia nine, in Boston eight, and in Chicago four, while in many prominent commercial centers there are none.

The original design of the early corporations was that of insuring lives and granting annuities. The business of holding trusts and procuring capital for various enterprises was a secondary consideration. Life insurance with some of the older companies was looked upon as the chief source of revenue. But the tendency of business toward specialization has had its influence upon these great financial corporations, as it has upon almost every department of business and social life. The business of life insurance has become a gigantic enterprise of itself, far surpassing in financial importance the operations of loan and trust companies. It is one, however, which does not come for consideration within the limits of this treatise.

The usefulness in the financial world of loan and trust companies is well understood. In some respects they are similar to banks; in others they are widely different. They receive deposits and make loans, but they do not issue currency nor undertake the general collection of commercial paper. The purposes for which they are organized and the services they perform are numerous. The scope of their business has broadened to correspond with their growth of capital and to keep pace with the vast sums of money they have charge of. By the great breadth of their charters they accept and execute all kinds of trusts. They act as registrars and agents for the transfer of stocks and bonds, as trustees for corporations, and as executors, administrators, guardians, and receivers of money for courts in complicated litigations. They do a general financial business for bankers and others, make investments, collect interest, and perform many other financial services. They are organized under special charters granted by the legislatures of the respective States in which they are located.