7
should very much have preferred to avoid the necessity for any interference by Government
with'the administration of banking. But on a careful review of all the above considerations,
we are forced to the conclusion that the possible dangers resulting from further large amal-
gamations are material enough to outweigh the arguments against Government interference,
and that,in view of the exceptional extent to which the interests of the whole community
depend on banking arrangements, some measure of Government control is essential. Our
conclusions on this point were confirmed by the resolution passed at the recent annual
meeting of the Association of Chambers of Commerce, in which it was proposed that steps
should be taken to guard against amalgamations, &e., shown to be injurious to commercial
= StS.
a 3 We therefore recommend that legislation be passed requiring that the prior approval of
= fovernment must be obtained before any amalgamations are announced or carried into
1 + And, in order that such legislation may not merely have the effect of producing hidden
|_zamations instead, we recommend that all proposals for interlocking directorates, or for
{# ments which in effect would alter the status of a bank as regards its separate entity and
+ ol, or for purchase by one bank of the shares of another bank, be also submitted for the
sf [approval of the Government before they are carried out.
+ As general principles to be acted upon at present by the Government at its discretion,
i ould suggest that a scheme for amalgamating or absorbing a small local bank, or any
i ne of amalgamation designed to secure important new facilities for the publie or a
1 1 considerable and material extension of area or sphere of activity for the larger of the
„banks affected, should normally be considered favourably, but that if an amalgamation
+ ne involves an appreciable overlap of area without securing such advantages, or would
{ t in undue predominance on the part of the larger bank, it should be refused.
+ ideration should also, in our opinion,-be given to the question of the clerical labour—
+ lly very large—involved by amalgamations during the war, and to the undesirability of
sf litting an unusual aggregation of deposits without fully adequate capital and reserves.
M ia
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1-9. It only remains to make a suggestion as to which Government department or depart-
| is should be charged with the responsibility of approving or disapproving amalgamation
; mes, &c., under our proposal above. On the whole, we think that the approval both of
f l'reasury and of the Board of Trade should be obtained and that legislation should be
i ed requiring the two departments to set up a special Statutory Committee to advise
Zu jj the members of which should be nominated by the departments from time to time,
nm i such period as may seem desirable, and should consist of one commercial representative
+ one financial representative, with power to appoint an arbitrator, should they disagree.
M.
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=i
1 10. We desire to place on record our deep sense of the obligations which we are under to
+ Secretary, Mr. C. L. Stocks, for the very valuable assistance he has rendered to us in our
{ Derations and in the preparation of our report.
= Bs COLWYN.
d ES ' CUNLIFFE.
8 7 R. E. BECKETT.
8S B HERBERT C. GIBBS.
2 = : ARTHUR A. HAWORTH.
a iH | R. V. VASSAR-SMITH.
s E J. S. PURCELL.
A S HENRY KESWICK.
E à : H. McGOWAN.
29 M E. MANVILLE.
Ps A JOHN RAE.
® > AC. L Srocrs, DOUGLAS VICKERS.
g 9 3 Secretary,
i9 |} lst?Masy 1918.
Q2. ty 1
8 ©
2
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