Tony -

I guess I am not making myself clear on this matter.

When an automobile is first sold as a new car, a CAR TITLE (actual
official piece of paper) is issued by the state where it is sold.
The car title is FILED OF RECORD with the state's motor vehicle
registration agency. When you buy a car and make a note, the lien in
favor of the lienholder is RECORDED on the CAR TITLE and filed of
record at your state's motor vehicle registration agency. The
presence of a lien on the title makes the lender secure that he will
be repaid before the car is sold. When you sell the car, you need to
produce the TITLE or a certified duplicate thereof, to have the TITLE
transferred (by the state) to the new owner. The title will indicate
whether there is a lien on the car, and is NOTICE to any prospective
purchaser that the title is not CLEAR until the lien is released by
the holder. A similar system of title is required for aircraft and
boats.

Nothing of this sort has EVER been available for freight cars or
other railroad rolling stock. Ever. Never has a freight car builder
created "title documents" for railroad equipment. Never have
equipment titles been recorded in a central location - because titles
do not exist for freight cars.

The "trust plates" and painted statements on the car serve as the
notice to purchasers that the collateral (freight car) is encumbered
by a lien in favor of whomever. Sure the individual railroads have
mortgage agreements and paperwork out the kazoo, but there is no
central location to determine whether there is a lien on a freight
car. You have to realize that this system originated in a different
time (before phones, computers, etc.), when it was difficult to
determine where to check on the existence of a lien on, say, a car
owned by a private company. The placing of plates on the actual
collateral evolved for this type of collateral. Banks felt secure
enough for 100+ years to lend money based on this type of notice to
the world that their collateral (the freight car) had a lien on it.

This may all seem like semantics, but, in reality, it is a very
different method of securitization of collateral from what we are
used to here in the U.S.A.

Thanks for pointing out that painted trust statements were used as
far back as the 1930's. I guess that the lender felt secure enough
not to require a metal plate!

A.T. Kott

--- In STMFC@..., Anthony Thompson <thompson@...> wrote:

A.T. Kott wrote:

Trust plates are to rolling stock as automobile titles are to

cars.

Let's see, my auto title is a piece of paper which is not

bolted

to my car. I strongly suspect there was plenty of paper backing up

the

equipment trusts too. Therefore, I would suggest (tongue planted
firmly, etc.) a rephrase: trust plates are to rolling stock as

paint is

to automobiles.

If a freight car does not have a plate or painted statement of
lienholder identity, it is presumed owned "free and clear" by the
railroad whose reporting marks are on the car.

I strenuously doubt this is true. Documentation was

extensive at

the railroad and I feel certain at least equally extensive at the
lienholder.

In STMFC times, the lienholder was usually identified by a cast

or

stamped metal plate affixed to the side or centersill of each

side of

the car . . . When paid, the bank retrieved the trust

plates . . . the

reason for the metal plates was that the lienholder could

(usually!)

be identified after a wreck and accounts settled for that piece

of

equipment.

Several SP documents of which I have copies clearly state

that

trust plates are bank requirements, and that when the trust is
eventually fulfilled, plates are to be removed and scrapped. There

is

no indication of returning plates to the lienholder. This of course
possibly specific to SP, but certainly constitutes at least one
exception.

I think that painted trust statements were only used starting in

the

early 1960's - not sure, though.

A few SP classes built in 1937-1940 had stenciled trust

legends.

Tony Thompson Editor, Signature Press, Berkeley, CA
2906 Forest Ave., Berkeley, CA 94705 www.signaturepress.com
(510) 540-6538; fax, (510) 540-1937; e-mail, thompson@...
Publishers of books on railroad history