Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-07-21
FIFTY BANKS UNITE
IN 3YEAR PERIOD
But II Institutions in New
York Retain Identity in
Consolidation Wave.
Special Dispatch to The star.


NEW YORK, July 20.-Tne rapid and
unprecedented elimination Of independ-
ent banking units in New York City in
the last three years or so is graphically
depicted in tabular summary drawn
up by the bank and insurance stock
house of Clinton Gilbert and made pub
lie today Of so banks absorbed by
larger institutions since April IL, 1926.
when the merger movement got its first
real impetus with the consolidation of
the Mechanics a. Metals National Bank
and the Chase National Bank, the
largest concentration of banking capital
in the history of the financial center
was achieved. representing practically
all of the mergers in this field during
that period and leaving but IT with
their former identity
The aggregate capital represented by
these mergers amounted to sl25, 050, 900.
or within S15.05o.o00 of the present
capital of the National City Bank. con-
ceded to be second only to Barclays
Bank, Ltd, of England, in capitalize
ton.
New Bank Merger Record.
These mergers signify in the aggre-
gate degree of merger activity in the
short space OF about three years never
before enjoyed by the banking fraterni-
ty in a similar period as we'll as a
greater and more effective stimulation
of investment interest that would not
have been rsssible under the previous
diffused conditions with the so bank
ing institutions, State and national,
operating Independently" comments
Clifton Gilbert. Not only have far
stronger institutions been created. but
in the cases Of national banks which
were merged with State banks and trust
companies the field of operations has
been automatically extended and made
more profitable thereby.
1T is of interest to note that there
has been a constant REIMBURSEMENT of
national banking charters in favor of
State charters through these consolida-
lions. thus giving the continuing in
situations the broader powers permitted
them as State banks or State banks and
trust companies. Trust companies oper-
ate under State charter and their trust
business provides substantial per-
centage OF State institutions earn
ings. hence one of the reasons for the
surrender Of the national charter In
favor Of State charter when national
bank merges with State bank.
Seventeen Retain Identity.
"At the present time, out OF all these
institutions which have been merged
with larger ones there are but II which
have retained their old or similar iden-
tity The striking thing about this is
that the competitive phase Of New
York City banking, so far as the mergers
here listed are concerned, has been re-
duced by approximately IS per cent.
This does not, Of course, take into con-
sideration those institutions which have
sprung up in the meantime.
1T is probable" says Mr.. Gilbert,
that this list of merged banks will be
considerably augmented in the next
identical period. the smaller being taken
into the fold of the larger institutions
powered by greater capital. This de-
duction Is made as result of the
present disposition of the national and
State authorities to countenance
mergers when they are in the interest
of greater banking strength"
Only in one instance, it is remarked,
out of all the so consultations, has
national bank linked up with a State
bank and at the same time retained
both national and State charters. This
case is that of the National City Banks
acquisition of a controlling stock inter-
est in the Farmers Loan & Trust Co.
1t is pointed out, however. that this waH
not a merger in the strict sense Of the
word in that the City Bank Farmers
Trust is operating as complete unit
and held in trust for the benefit of the
National City Bank stockholders.