Bank Week

Last week there were 15 less banks in the country. This shrinkage was caused by:

Failures. A period of economic stress and strain is always ominously punctuated by bank failures. Ten banks last week closed their doors. Some were small, their failure consequently significant only to the immediate neighborhood. Of more general import were the following:

Cause: heavy withdrawals. Effect: Bank of Bay Biscayne, in Miami, oldest bank in Southern Florida, and three subsidiaries failed to open their doors. The four banks had aggregate deposits of over $19,000,000. To meet possible runs on other Miami banks the Federal Reserve Bank of Atlanta rushed $2,000,000 cash down by airplane, announced that $6,000,000 more was en route.

Cause: Allegedly bad Western loans. Effect: closing by State Banking Department "for inquiry" of Merrimac River Savings Bank, Manchester, N. H., with deposits of $11,000,000.

Cause: Amos W. Shafer. Effect: closing by State Banking Department of Cincinnati's Cosmopolitan Bank & Trust Co. Mr. Shafer broke the bank singlehanded. As district manager of Henry L. Doherty & Co., Cities Service specialists, he used the firm's account to make away with $632,000, which was within $14,000 of the bank's capitalization.

Mergers. Last week eleven banks telescoped themselves into five. Most important mergers were: Central National and Penn National, of Philadelphia, into an institution with $50,000,000 deposits; Beacon Trust and Atlantic National, of Boston, into a bank with $140,000,000 deposits; Pacific Trust and Manufacturers Trust, of New York, into a bank with total deposits of $373,000,000.

The praise of Branch Banking, as potent a reducer of banks as mergers and failures, was sung last week to the House Committee on Banking & Currency by Charles Edwin Mitchell of National City. The small bank, he maintained, is more efficient as part of an ably directed system than as an independent unit. He pooh-poohed the bogey of a financial octopus with: "Banking is not a business which can be monopolized."

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