416 CHARLES J. BULLOCK 



deposits to $1,057,000,000. It is evident, therefore, that the 

 rapid expansion of the business conducted in New York city 

 has stimulated the growth of larger institutions than the coun- 

 try has known since the days of the Second Bank of the United 

 States which, it will be remembered, employed a capital of 

 $35,000,000. It should be observed that our largest bank, 

 the National City, with its capital of $25,000,000, is smaller 

 than the great banks of other countries. The capital of the 

 bank of England is $72,000,000; that of the bank of France 

 amounts to $36,000,000 ; while the bank of the empire of Ger- 

 many has a capital of $30,000,000. 



The increased capital of the larger banks has been se- 

 cured in many instances by subscriptions from the existing 

 stockholders, but in other cases it has come from the consol- 

 idation of two or more institutions. The national banking 

 laws do not authorize explicitly the combination of banking 

 associations, yet one section relating to voluntary liquidation 

 seems to contemplate such an occurrence. Mergers are some 

 times effected through the purchase of the assets and the as- 

 sumption of the liabilities of the institution that is to be ab- 

 sorbed. In other cases one bank increases its capital and sells 

 the new shares to the stockholders of the liquidated associa- 

 tion for the cash that they receive in payment for their original 

 holdings. Occasionally both banks are placed in liquidation, 

 and their assets are bought by a new institution which also 

 assumes their liabilities. The comptroller of the currency 

 recommends that the law should be amended in such a man- 

 ner as to simplify the process of consolidation. 



In New York city these bank mergers have attracted 

 great attention, and the First National bank, the National 

 City, the Bank of Commerce, the Hanover National, and many 

 others have figured in such transactions. But in Boston, 

 Philadelphia, Pittsburg, Baltimore, Cincinnati, Cleveland, De- 

 troit, Chicago, St. Louis, and Omaha, the process has been re- 

 peated; so that reports of bank consolidations have become 

 quite the order of the day. In 1901 twenty one national banks 

 were absorbed by other national associations, while six were 

 merged with state banks or trust companies; in 1902 there 

 were forty six consolidations of the former class, and eleven 



