The Birmingham age-herald., 1914-05-11
CONSO[|DAT|ONOF BANKS IS TENDENCY |NF|NANCE CENIERS Indicates Institutions Expect to be Called on for Great
 Undertakings SEVERAL NEW YORK
 BANKS AFFECTED All Cities Beginning to Realize Few Very Strong Banks Better Than
 Large Number of
 Small Ones
nv HOLLAND.


 New York May 10.-(Special.)-H has been assumed by some of those who have been greatly interested in the organiza- ton of the new national banking system that the contemplated consolidation of several national banks in New York city as well as the recent consolidation in Bos- ton reflect certain tendencies which are likely to be created by the new system when 1t is in operation. This assumption, however, is not accurate and may be en- tirely wrong. It does seem to be sis- nificant that in several of the larger cities of the United States bank combinations have recently been perfected and others are now in contemplation. Boston by re- cent banking transaction secured na- tional bank with total deposits approxi- mating $50,0000OO. Consolidation which have recently been perfected in Baltimore and Washington cannot be attributed to the influence of the new national banking system. The Baltimore consolidation was of state-chartered institutions. In Wash ington there was something like enforced liquidation of one institution in which an- other participated.
 There is no doubt that preparations for certain bank consultations in New York city are now practically completed If they are perfected the result will be the creation of two national banks, made very strong through assimilation or purchase of other banks. carrying deposits consid- erably in excess of s6O0 600 each.
 The chances are strong that consolida- tions of this kind would have been at l., 1 hoe mn change in our national banking law. For that reason they undoubtedly reflect a modern tendency which has been observed elsewhere than in New York city. They illustrate the magnitude of modern financ- ing. They make it clear that banks with large resources and that carry heavy lines of deposits are better able to participate in great undertakings, and, if they be commercial banks exclusively, are better able to secure a large and very profitable line of commercial business.
 Some years ago it was the common un- derstanding that the Fourth National bank of this city was looked upon as a desir- able acquisition for another national bank whose place of business Is only few steps distant from the Fourth National. At that time J. Edward Simmons was the executive authority of the Fourth Ma , tOHdl. MT. summons ndu SdlHeu u Wei- deserved reputation as banker and his institution was conspicuous because 1t was never associated with important under writing syndicates and maintained stead fly strictly commercial business
 That there was an attempt to secure this bank by the purchase of it's stock is unquestioned. MT. Simmons, however, made a personal appeal to some of those who were in authority in the institution whose officers sought to obtain control of the Fourth National. He ventured to go so far as to say that not always could purchasing bank take over the deposit line of the purchased bank. He made reference to one or two consultations made some years ago in Boston, which were presumed to have been disappointing because the purchasing bank found that the deposits of the purchased bank were not secured. His appeal was successful and the plan was abandoned.
 A Proposed Consolidation
 Now banking institution, the Mechan- ics and Metals National bank, which within the past eight or 10 years has gained great strength, is understood to be in negotiation for the purchase of the Fourth National If the plans now in con- temptation work out then the enlarged institution will carry deposits of approx imately $10o.0oO.0O0. There certainly can be no reasonable connection between this contemplated plan and the speedy estab- 1ishment of the new national banking sys- tenn. It represents the belief that as soon as normal business conditions have re- turned so that there may be an abund- ance of capital for investment in large propositions. such as railway expansion or the exploiting of national resources, the banks which have large capital and resources and heavy lines of deposits will s be in better position to take advantage Ifof these opportunities than any of the so- escalled little banks.
 Another Proposition
 It is significant that at the very time when the consolidation of two national banks or the absorption of one by an- other whereby a large line of deposits and great resources can be obtained is in ne- gotiation another proposition similar to this is under discussion. It Is informally announced that the Irving National bank