12. In your city there is a real estate dealer who often has large sums of money idle for a short time because, when he sells one piece of property, he does not always have another immediately in view. He is not a depositor in your bank. Write to him, inducing him to take out a Certificate of Deposit at such times and telling him that the advantages of such a certificate are that he will get 3% interest on the money deposited and that he may draw out the money at any time.
13. One of your depositors has written to you, asking for a loan of $5,000 for nine months. Write to him, saying that it is not your practice to make time loans for definite periods longer than six months, as it is not a good plan thus to tie up your deposits. Explain that as most of a bank's deposits are payable on demand, you would suggest his taking out a demand loan for $5,000, payable on the demand of the bank. Under ordinary business conditions such a loan might easily run for nine months.
14. R. F. Marsden, President of the Truesdale Cotton Mill, Birmingham, Ala., has written to you, asking whether he can secure a loan next fall on the cotton in the mill as collateral. Reply that you feel certain that satisfactory arrangements could be made if the cotton were stored in an accredited warehouse, so that you could accept the warehouse receipt as collateral.
Exercise 303
Punctuate and paragraph the following letter, which explains one function of a trust company:
Dear sir as you are one of our clients you are familiar with the reputation of this bank for sound banking and conservative investments you may not however be aware that we have a fully equipped trust department prepared to act in any of the numerous capacities in which the services of trust companies have proved of special value at this time we wish to call your particular attention to the service which this department is prepared to render as trustee under agreement it is natural that one who has accumulated property should desire to superintend or direct its disposition formerly this was done by will now however as the complex laws of the various states frequently necessitate the payment of double or triple inheritance taxes it is becoming a more and more common practice for a man during his lifetime to administer his own estate so to speak this may be accomplished through the establishment of a trust with respect to either a part or all of one's property it can be accomplished not only with absolute safety to the donor but with entire secrecy as well the terms of the trust being regarded as absolutely confidential furthermore the donor has the satisfaction of disposing of his property during his lifetime in accordance with his desires the life of a trust company unlike that of any individual is of perpetual duration death does not interfere with its management of the trust estate its financial responsibility and the safeguards thrown around trust estates by the state laws insure the safety of a trust fund if you are interested in this subject let us discuss it with you either in person or by correspondence when this bank is named in a trust capacity no charge is made for service or advice in connection with the drafting of the trust instruments yours truly
Before writing the following, re-read The Richards' Baby Stocking Fund, [page 337].
1. Suppose that you were a newspaper correspondent in Alaska at the time Richards was killed. For your home paper write an account of the finding of the baby stocking. In what ways would this account differ from a magazine article on the same subject?
2. As if you were the United States Commissioner of the Territory of Alaska, write to a Portland bank saying that you are sending the $2,500 to them, and asking them to put the funds in the care of a reliable trust company.
3. The Portland bank writes to the Kansas City Trust Company, asking if the latter will accept the trust. Write the letter.