The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1911-08-27
THE BANK MERGER CASE.

THE BANK MERGER CASE.
It appears that there is difference
of opinion between the two chief cab
met officers interested in The legality
of the proposed bank merger. The Ma
tional City Bank of New York organ.
lied what it called the National City
company. This company is holding
concern similar to the holding company
in the Northern Securities case. This
Northern Pacific merger, as 1t was
called, or holding company, was to hold
the stock Of the Northern Pacific and
Great Northern companies; it was de-
clared illegal by the Federal courts.
The case of the National City company,
which is to hold the stock Of the Ma
tional City Bank of New York, and to
acquire stock and holdings in other Ma
tional Banks, would allow the National
City Bank in New York, which controls
the National City company, to hold and
control through that holding company,
stock in other National Banks, which
the law prohibits it doing as a bank.
That is. the National City Bank of New
York could, by this means, absorb stock
and gain control Of other National
Banks, which the law forbids it to do
direct
Not long ago the attention Of At
torney General Wickersham was called
to this form of bank merger through
thu bo1d;pp oouoo1u pa oop,o ~ +ba
conclusion that such holding was pre-
cisely the same as that which the court
declared to be illegal in the Northern
Securities case.
But, Secretary MacVeagh, In whose
department National Banks are super
vised, disagrees. He thinks that the
holding company organized by the
National City Bank of New York is
perfectly legal, and that it may prop
erly hold the stock of the creating
bank, and also stock in other banks,
without limit.
Here is clear and marked opposi,
tion. 1t is question Of law chiefly,
and the law officer of the government
ought to be right about it. We should
think that he is, since the principle
of the holding concerns seems to be
identical in both cases. Secretary Mac
Veagh is not a lawyer, but very able
business man. He understands the
business propositions, and undoubtedly
as to this particular matter has been
advised by the Comptroller of the Cur.
rency, Mr.. l.. o. Murray, who is well
informed in the law, and is a sound
man. In this disagreement the natural
thing to do, is to refer the question first
of all to the President, and this the
dispatches say is to be done Pres
ident Taft is great lawyer himself,
and would naturally be inclined to agree
with the Attorney General. If he does,
as it is likely he will, undoubtedly
will be notified, and if it does not at
once discontinue it's holding company,
proceedings will be begun to invalidate
the holding company which it has ere
ated.
The question is a very important one.
and we should think, as we have said
heretofore, that thes best thing to do
is not to get up contention about
this, but to have the holding companies
expressly authorized by law for the
panies created by the banks would
amount to the same thing as the re-
serve associations provided for in the
Vreeland bill. but would be more bank
like, more buslnesslike, and would be
more in the nature of an outgrowth of
business conditions than the arbitrary
and impractical provisions in the Vree
land law, which, to some extent. are
transferred to one National Reserve AS,
ISOLATION provided in the Aldrich re-
port. We urge this because it is always
better TO follow reasonable business
lines in the working out Of business
or banking proposition than it is to
undertake to force upon the banks the.
oretical provisions got up by politicians
who have no real knowledge of the
working conditions Of banking, OF of the
broad general lines upon which consol-
dation ought to be effected The Vree-
land law provides for such consolida-
tions, number Of them in the differ
ent sections of the country, but in
different way, and through forms
which the National Banks rejected
But. if the banks have found way
among themselves to do practically the
same thing as the law provides, but
IN more businesslike way, what is the
objection to letting them do ita If