Mergers of Banking Institutions

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.

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.