Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-02
BIG BANK MERGER
OK. D BY DIRECTORS
National City and Bank of
America Assets to Total
$2,329,000,OOO.
~ the Associated Press.

Ey the Associated Press,
NEW YORK, October 1.-THE Ma
t!onal City Bank, second largest in the
United States, and the Bank of Amer
lea, National Association, awaited to-
day only the fulfllment of certain con-
Citions to become a merged institu-
tion-the second largest bank in the
country
Directors of both banks approved the
merger plans yesterday. The actua
consolidation was made conditional
upon the deposit of IS per cent of the
shares Of the Bank of America stock
with a special committee before Octo-
Der II. As 60 per cent Of the stock
is controlled by the Transamerica Cor
poration. directors Of which approved
the plan yesterday, the deal is re-
garded as assured of consummation.
Quotations Sent Upward.
Advance reports of the contemplated
consolidation sent bank stock quota
lions upward in the closing hours OF
yesterdays stock market.
The combined assets of the National
City Bank and the Bank of America
ere approximately $500 900 900 less
than the S2429 900. 900 assets of the
the world.
Charles E Mitchell, chairman of the
board of the National City Bank. is
expected to head the larger organiza-
ton
1t was explained that the consolida-
ton plan was in continuity with pro-
gram announced last week by the
Transamerica Corporation, which holds
SO per cent interest in Bank of Amer
;,l,
to divest itself of controlling interests
in banks
The Bank of America, which on june
80 reported resources of 1898 800 .313
has been the second most important
unit in the Transamerica Corporation
group of companies. Transamerica has
operated since formation as a holding
company for the properties assembled
by A. P. Giannini of California. anc
its chief property is the Bank of Amer
lea National Trust & Savings Bank Of
Elisha Walker. chairman, said thai
there was no plan under consideration
AT this time for deposition of contro
of that institution.
One Sixth in Size.
The Bank of America is only about
one-siXth the size OF the National City
sources of S1.973 140595. but it has 81
branches, in New York City. which will
substantially augment National City:
system now comprising 81 branches.
The plan contemplateS the exchange
Of National City stock for Bank oil
! America stock on the basis of l share
of the former for pa of the latter, so
that Transamerica Corporation will be-
come an important minority stakeholder
in National City. Transamerica holds
63 per cent of Bank of America stock
and the adoption of the plan is con-
tingent upon its approval by sufficient
minority stockholders to make total
OF IS per cent in favor of it. If by
October II, that percentage has ap-
proved, the plan will be submitted tc
National City stockholders.
When completed, this will be the first
large bank merger in New York City
since the Chase National Bank alb
sorbed the Equitable Trust Co. early in
1880. through which it eclipsed the
National City to become the worlds
largest bank. s
Among Oldest in City.
Both the Bank of America and
National City are among Wall Streets
oldest banking institutions Both were
founded in 1872 National City, from
time to time, has absorbed other New
York City banks, and for several years
was the largest bank in the United
States. 1t has been anxious to extend
its branch system in New York City
for some time. In the Autumn of 1929
its directors approved a plan to acquire
the $500, 900 900 Corn Exchange Bank,
which has an extensive branch system,
but the plan was drawn up just before
the 1929 crash in the securities markets
and by the time the National City
stockholders met to act upon it the
values of the stocks of the two insti
tutions had been SO altered that it was
decided that the plan was inequitable
and it was abandoned.
A P Giannini first became a factor
In New York banking through acqusi-
ton of control of the Bank of America
in 1923, which he purchased through
the Bancitaly Corp, predecessor to
Transamerica. Giannini had previously
acquired the Bowery and East River
National Bank and the Commercial EX-
change National Bank, which were
merged with Bank of America.
DR. A. H Giannini, A. P. Giannini's
brother, is chairman of the Bank Of
America 1t is understood that his
status under the merger is as yet unde-
cided.
Smaller Bank Sound.
In discussing the proposal. Chairman
Mitchell of the National City Bank, said
that the Bank of America was in very
sound and liquid condition, and had an
equipment of city branches which could
we'll be combined with that of the Ma
tional City, and it was believed that the
union would be beneficial in every way
Mr.. Walker pointed out that the
plan would give his company a sub
stantial interest in one of the largest
banks of the country, instead of con-
trolling interest in a smaller institu-
ton, he said that the directorate had
no present intention of disposing of the
National City stock which it would
receive. Y
1t WASH explained that the merged
institutions would continue under the
present name of the National City
Bank, and the corporate title of the
smaller institution would disappear.
The Bank of America has outStand-
ing 1,47l OH shares of capital stock of
S25 par value OF the exchange basis
of one and tWo-thirds of these shares
for each share of National City the
latter institution will have to issue
1872, 6O7 shares of its stock of $50 par
value, which will neceSsitate an in
s &c