The actual division of assets in any one account may vary substantially from the aggregates shown above. This is due to differences in basic investment objectives and, in many cases, investment instructions or directions from authorized persons outside the bank. Each account is governed by its own authorization document, is a completely separate and distinct legal and investment entity and has a beneficiary or beneficiaries ranging from one individual to many thousands of people in the case of a large pension trust. 20 Largest Holdings (Market Value on December 31, 1973) of Common Stocks Represented on Trust Department Working List

The preceding table shows the 20 largest common stock holdings from the Trust Department's Working List. The Working List is comprised of those common stocks that have been approved for broad use in accounts where the Trust Department has investment responsibility.

In each case, these holdings are spread among a large number of separate accounts including one or more commingled funds. For instance, stock of International Business Machines is held in 1,444 accounts and four commingled funds in which 2,300 additional accounts participate. The number of shares held and the market value of such holdings are constantly changing because of individual investment decisions relating to separate accounts and because of daily changes in security prices.

Most of the stock holdings mentioned in this report are registered in the names of these Trust Department nominees: Act & Co., Donson & Co., Emp & Co., Gale & Co., Hap & Co., Hit & Co., Ord & Co. and Wait & Co. A nominee is used to improve service and minimize customer costs by reducing paper work involved in completing sales, effecting transfers and collecting dividends.

Not included in the above data is the principal amount outstanding of debt securities for which the bank serves as corporate trustee. These securities amounted to approximately $7.5 billion at year end.

Outside political factors continue to have an impact on Trust Department activity. In April 1973, the Illinois Supreme Court construed the November 3, 1970 Constitutional Amendment as leaving personal property owned by a trustee or other fiduciary for the benefit of an individual subject to the personal property tax (pension and profit sharing trusts are exempt by statute). On the other hand, such property directly owned by the same individual is clearly exempt from the tax. Important steps are being taken through litigation brought on behalf of both corporate fiduciaries and individual beneficiaries to have this serious inequity remedied.

Nationally, Congress continues to study proposals for changes in income, estate and gift tax laws. Pending Federal pension legislation may combine constructive changes with new limitations on the tax deductibility of contributions that would irreparably harm the private retirement system, particularly profit sharing plans.

Chalkley J. Hambleton, President of Harris Bankcorp and Harris Bank, is currently serving as the President of the Trust Division of the American Bankers Association. This is a demanding position of leadership in the rapidly developing, increasingly complex and sometimes misunderstood trust industry.