Evening star., 1928-04-17
GREAT MERGERS
IN BANKING PEND
Dozen Possible Unions in
Formative Stages Involve
Hundreds of Millions.
ny J. c. ROYLE.
/ nivnntch 10 The Star.

Special lnspAtCN w lnP star.
NEW YORK. April l7.-There are a
dozen possible bank mergers which may
come to a definite stage Of negotiations
confined to New York. They arc scat
tered from New Orleans to the Brit
ish Columbia boundary and in capital
and assets involve hundreds of millions
OF dollars.
One merger is imminent In New
York which may involve trust COM
panies of the highest standing, Whether
the consultations are perfected imme-
diately or not. the trend is unmistakable
and represents a demand for additional
capital to keep pace with the eXpan-
sion OF the commercial and industrial
needs of the United States and of the
world.
The United States today Is the bank
er nation Of the world and In view of
this fact there are many conservative
ard solid-minded tinancierS who see in
the future not institutions with hun
dredS of millions OF capital and assets
but with billions. They see the pres
ent movement as SNOWFALL process, by
which many small units are being rolled
into one. These magnified Snowballs
are in turn being rolled toward a few
impregnable forts OF capital. just as In
q Schoolboy game.
Similar Process in Steel.
It is recalled by financiers here that
1901 III industrial units which made
America the greatest steel-producing
factor in the world In that period
there was general getting together of
iron and steel companies. and when
the late j, p. Morgan was ready in
1901 10 form the United States Steel
Co, the process had already been great
ly simplified The bankers now are be-
ginning to speak tentatively of some
similar Developments in the banking
groups
In Philadelphia for example. the
formation OF the Philadelphia National
Bank, with resources in excess OF $780,
600 600 has Just been consummatcd The
II members OF the board represent
leading trust companies and savings
societies. railroads and manufacturers.
In the last six years. the average
size Of the American bank has increased
So per cent. There are nearly 5000
fewer banks today than In 1921. Re-
sources. ON the other hand, have In
creased by SlS.500 100000. In the same
period the weaker units have been
shaken out until bank failures have
been reduced In the last year 10 662.
Of which more than two-thirds were
IN villages with a population of less
than 1000, according to the Federal
Reserve Board.
There are still about $1,000 independ-
ent banks in this country. bat this
number is steadily being reduced. The
reason back of the bank consolidation
lies in disinclination 10 split the bust
ness" National banks can loan only
certain percentage of capital and
assets TO single customer. The policy
Of nearly every bank today Is 10 do all
the banking business for each customer
from the cradle TO the grave To ac-
complish this they have had 10 expand
capital, for American business has also
followed the trend to consolidation and
expansion. and the bank which could
supply the needs of q customer 10 years
ago today must Split The business 10
conform TO the law
Some Saw Possibilities.
The possibilities of tlaese bank mer-
gers have become apparent TO some
astute investors. and Ia consequence the
prices of bank stocks with merger pos
sibilities have advanced in a manner
which has almost frightened the lucky
holders of the securities. For example.
tho stock of the Bank Of America. con-
troll Of which recently passed into the
hands OF the Giannini interests, rose
from less than s400 10 si4sS There
rs hardly big city In the United States
but has bank stocks selling at from
81 600 TO $4,000 or more a share
With the forming Of larger banking
concerns has come demand for execu-
tiYes of broad vision and new crop of
financicrs has sprung up who think in
terms that would have left the preaE