4 
kind, but that, like other institutions, each has also the defects of its qualities. Some 
districts—notably Lancashire and Yorkshire—have clung to their local banks. But in most 
instances amalgamation schemes have been carried out without serious difficulty, and if 
material hardship had resulted to the trade generally in the distriets affected, there would no 
doubt have been greater local opposition to subsequent absorption schemes, and new local 
banks would even have been opened. 
THE NEW TYPE OF AMALGAMATION—UNION OF ONE LARGE JOINT STOCK 
BANK WITH ANOTHER SIMILAR BANK. 
6. As regards the new type of amalgamation, the main arguments laid before us in 
support of the policy of amalgamation are as follows :— 
(a) The convenience and gain to Trude secured by an extension of Bank areas —Just 
as the large banks of the past secured certain advantages to trade by collecting deposits from 
parts of the country where they were not required, and placing them at the disposal of other 
parts which stood in need of advances, so it is claimed that this process can be carried still 
further with advantage by amalgamating large banks with one another. 
This is no doubt true, though, of course, the degree to which an extension of area is in 
fact secured by amalgamating banks differs considerabl y in each case. The following table is 
an analysis of two recent amalgamations and one proposed amalgamation in this respect ;— 
TABLE I. 
NuuBERS IN 1918 (iN Rouxp FiGunzs). . 
  
| | Provincial Branches | 
| (excluding Sub- 
  
I | London Branches Branches and Foreign: Agencies 
m - | including only one held. 
| Branch in each 
Place). 
| | 
(a) ( National Provineial - - - - 26 251 | 31 
Union of London and Smith’s - - 5 31 78 150 
(5b) | London County and Westminster - - 110 | 180 400 
| Pars - - - - - zd 35 | 160 35 
(c) { London City and Midland - t. - 107 419 850 
London Joint Stock - - - - 41 | 109 70 
Note.—In London an amalgamation ean secure no material extension of area, and usually means a net 
reduction in the number of competing banks in the City, as all other important competitors are already 
represented there and eannot therefore, as is sometimes the case in other distriets, add a new element of 
competition to counterbalance the amalgamation. Should no such new element arise, there will be a similar 
net reduction in the number of competing banks in nearly all the most important towns outside London at 
wbich the second of the two banks was represented in cases (a) and (c) above, as the first bank in each case 
was established at most of them already. As regards the provinces generally, excluding sub-branches and 
sub-agencies, in the above cases the first bank in each ease secured the following number of new places out 
of the total number taken over, viz., (a) 51 (out of 78), (b) 152 (out of 160), (c) 54 (out of 109). In cases 
(a) and (c) very few of the new places secured were in towns of importance. The 55 overlapping places in 
case (c) include such towns as Barnsley, Barrow, Darlington, Doncaster, Gateshead, Grimsby, Hull, Leeds, 
Middlesbrough, Neweastle, Portsmouth, Sheffield, West Hartlepool and York ; and in case (a) the 27 
overlapping places included Bath, Birmingham, Bournemouth, Bradford, Brighton, Bristol, Derby, Doncaster, 
Exeter, Grimsby, Huddersfield, Hull; Leeds, Lincoln, Nottingham, Plymouth, Sheffield, Southampton and 
York. 
It should be added that, in ease (c), in addition to the branches shown above, the Joint Stock Bank have 
106 sub-branches in small places where they have no branch, and that in only about nine of those places are 
the City and Midland represented. Similarly, the Union of London and Smith's had a number of sub-branches 
in small places, at most of which the National Provincial were not represented. 
  
  
There must come a point when the policy of substituting one large bank for two will 
usually mean a very small extension of area, if any, and some reduction of competition. "That 
point has already been reached in London, and is being approached in a few of the largesttowns 
where most of the important competing banks are already established. 
It should be added that if both the amalgamating units have, before amalgamation, lent up 
to their full resources, home trade as a whole cannot gain any increase in accommodation as a 
result of the amalgamation. Except at the expense of smaller traders, large trade combines 
could not obtain larger advances in all from the combined resources of the amalgamation than 
they obtained from the separate banks before. 
(b) The argument from size.—Numerous representations have reached us to the effect that 
large banks are better for traders, and particularly for large traders, than small banks because, 
with their larger resources, they can safely make individual advances on a more generous scale. 
And it is argued that banks 1nust grow now to keep pace with the growth in size of business 
houses generally, and to enable them to deal with the demands of after-the-war trade both at 
^home and abroad. '