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Mergers of Banking Institutions

April 29, 1929

Report Outline
Merger to Promote Balanced Banking
Mergers to Meet the Needs of Big Business

More than one hundred bank mergers during the first quarter of 1929, of which 42 involved total assets of 12 billion dollars or about one-sixth of the total resources of all banks in the United States, have directed public attention to significant changes in the field of banking and finance. The merger movement in this field began about five years ago. During 1927 and 1928 it gained rapid headway, but the scope of this year's mergers is without precedent in financial history.1

The United States today has fewer banks than it had in 1914, notwithstanding the steady increase during the last fifteen years in population and the more rapid increase in the country's wealth. Down to 1922 the number of banking institutions continued to increase, but since the beginning of that year it has fallen by 4600, or nearly 15 per cent. The initial decline was due in part to bank failures, of which there were 855 during the years 1922-23. The subsequent decline has resulted mainly from acquisitions, consolidations and banking mergers.

Year Number of banks Capital & surplus Total resources (thousands of dollars) Resources of average bank
1914 26,765 3,846,600 26,971,400 1,007.7
1919 29,123 4,619,359 47,615,447 1,644.0
1920 30,139 3,132,985 53,079,108 1,761.1
1921 30,812 5,445,993 46,671,390 1,612.1
1922 30,389 5,641,359 50,425,367 1,659.3
1923 30,178 5,851,861 54,034,911 1,790.5
1924 29,348 6,081,562 57,144,690 1,947.1
1925 23,841 6,343,045 62,057,037 2,151.7
1926 28,146 6,745,271 64,893,362 2,305.6
1927 27,061 7,141,025 68,132,558 2,517.7
1928 26,213 7,671,051 71,574,328 2,730.5

The foregoing table includes all classes of banking institutions. A separate table given at the head of the following page shows that the decline in numbers of state commercial banks began in 1922 and of national banks in 1923. The number of loan and trust companies continued to increase down to 1926, but has since declined. The numbers of savings and private banks have shown a steady decline since 1921, when their numbers were smaller than before the war.

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Sep. 03, 1935  The Decline of Commercial Banking
Dec. 11, 1934  Proposals for a Government-Owned Central Bank
Sep. 12, 1934  Bank Reserves and Credit Inflation
Nov. 27, 1933  Bank Credit in Depression and Recovery
Aug. 12, 1933  Closed Banks and Banking Reform
Apr. 04, 1933  Unified Control of Banking
Apr. 09, 1932  The Glass Banking Bill
Mar. 24, 1932  The Guaranty of Bank Deposits
Apr. 17, 1930  The International Bank and the Gold Standard
Feb. 08, 1930  Branch Banking and Chain Banking
Apr. 29, 1929  Mergers of Banking Institutions
Oct. 28, 1927  The Federal Reserve Rate Controversy
May 21, 1927  Labor Banking and Finance Since 1920
Jan. 31, 1924  The Northwestern Bank Failures and the Attack on Treasury Savings Certificates
Dec. 01, 1923  Why State Banks Do Not Join the Federal Reserve System, the Effect on the System and the Issues Involved
Nov. 23, 1923  Branch Bank Controversy
BROWSE RELATED TOPICS:
Antitrust and Monopolies
Financial Institutions
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