Los Angeles herald., 1905-10-15
BANK MERGER IS
SIGN OF TIMES
w. C. PATTERSON DISCUSSES
CONDITIONS
Head of Southwestern and Vice Presi-
dent of New Institution Says Los
Angeles Needs Powerful
Financial House

Los Angeles mas redCneu IT'S udy VI
big things. We needed a financial in
stitution here that could handle them.
Hitherto it has been necessary for us TO
go away from home to finance our big
deals. The consolidation of the three
banks here into one will afford us such
an institution as we require. Ihat IS
why ii was done"
w. c. Patterson, president of the Los
Angeles National bank, soon to become
vice president of the enlarged First Ma
tional. was dealing with the coming
amalgamation of the First, the south
western National (Which has already
taken place. and his own banks, ana
was in a way outlining the reasons for
the change. Mr.. Patterson has had his
finger on the financial pulse of Los An
geles for years past, and has risen to
proud position here i'm the world of
money That he would lay aside the
absolute reins of government of one
of the city's greatest banks to assume
lower poSition-albeit it is lower
merely in name--in the new one, be-
speaks his civic pride and loyalty. as
well as the clear sighted reasoning that
there is need of the larger concern.
And it was setting forth of the rea-
sons for this enlargement that was
sought from him. Busy as he reces-
sarily is he gladly gave the time for it.
City Needs Big Bank
"Ios Angeles is a big city now" he
resumed, as he stroked his iron grey
mustache, leaning back in his luxurious
office chair. I'VE handle things in
large way. and great sums of money
are needed to care for them. ma
tionaI bank is limited by law in its
dealings: it can lend only certain
proportion of its capital to any one en-
terprise The consequence has been
1,I tn a1c
where to float some OF its most worthy
plans, which by reason of their very
bigness could not be handel here.
"Thus the necessity of n very large
and strong financial institution was
seen to care for this business at home.
No weakness of any Of the factors in
this consolidation existed; none what
ever. 1t was simply that none alone
was big enough for the purposes of the
bigger city. SO a union was formed,
and the combined bank will have Capi-
tai and resources for the largest enter
prise that may be launched here; as
much aid can be rendered as would ever
be safe under any circumstances.
For. beside the bank ITSELF it will
virtually control two trust companies,
which operate under state laws, and are
thus permitted rights and privileges
which are not allowed a national bank.
Through all three, a S l say, any prOpO-
sition can be handled that may arise,
here at home, and Los Angeles will
be in a position to do anything legiti
mate in the financial world"
"How, Mr.. Patterson, will the Consoli-
dation affect the clearing house re-
ports, which are considered the city's
trade barofleter?"
Il do not think they will be affected;
/ have not figured that out. Possibly,
if one of the banks retains the bust
ness hitherto enjoyed by the three it
will slightly reduce the volume of
clearances between the banks in the
organization, as that part therefore
handled by three separate institutions,
will now be in the hands of one, and
there will be a consequent lessening
of clearance items. But l do not think
that will amount to much. Our clear
ings increased fOrty-three per cent this
year over last years, and while this
may cause a slight proportional shrink
age, l think it will be fully offset by
the volume of business done. Then,
not all of our banks are in the clearing
house, and probably some more will
come in, which will have a tendency
to equalize results, again. I do not
think the clearing house reports will
suffer"
Trade Barometer
"Are they the real trade barometer
that they are COnsidered?"
ooh, I don't know some think they
are. The volume of exchanges between
banks is supposed to indicate the
amount of general business stirring, but
I do not rely so much on them as do
some others"
Are they always handled on the
same basis in every city? Or do some
cities make a business of increasing
them, to gain a higher standard in the
tables published?"
Il have heard that certain cities
manipulated their clearings for this
purpose: 1 have heard that Seattle had
a method of swelling the clearings to
increase it rank; l don't know. Oh.
it doesn't make much difference if it
does; we are so far ahead of Seattle
that we needn't worry. But [ rather
doubt if the clearing reports are the
value that some believe, i'm indicating
business status"
"Then any effect that this may have
on the clearings, as such, will be more
than offset by the increase in the value
of great strong bank to the city?"
Most decidedly. You see when a
city becomes as large as this is. and
needs accommodations such as we re-
quire, it must either have an institu-
ton to handle them or go elsewhere
to acquire the funds needed. We have
not had such an institutions; now, we
viii have one. That surely indicates
more for the city than a statement of
its clearings"
"Then you think Los Angeles is
going to need such a bank more in the
future than it does now, or has in the
past2'
Most certainly. Los Angeles has
not cloud in its sky. I believe the
city is going ahead steadily; there is
nothing to indicate anything else"
How about this panic that Mr..
Rockefeller is said to have predicted
for 1907, and then denied?"
Il don't think there is anything in
t. Mr.. Rockefeller doesn't know any
more about when a panic is coming
than does any other man. He couldn't
predict that of 1893 and didn't; no one
could. Panic5 come up out of night;
no one can tell when they come nor
why
Always Forewarned
1--WE are particularly fortunate in
that respect" Mr.. Patterson went on.
earnestly, because we usually have
warning of them out here. Periods of
depression there will be from time to
time, though l can see no indication
of any now. They usually start in the