BANKING The Urge to Unrmerge
No cases have been pursued more vigorously by the Justice Department than its six current antitrust suits against bank mergers, which have been growing steadily in popularity in recent years. Last week Justice dealt with two of the cases in dissimilar ways, but in both sought to chop off a major portion of recently merged banks.
In Washington, Attorney General Nicholas Katzenbach announced a com promise agreement to settle the Government's suit against the 1961 consolidation of Manhattan's Manufacturers Trust Co. and the Hanover Bank into the Manufacturers Hanover Trust Co. -a merger declared illegal in Federal court earlier this year (TIME, March 19). Although Katzenbach revealed no details, the $7 billion, 135-branch Manufacturers Hanover Trust has reportedly agreed to shed as many as 40 branches by selling them to smaller competitors or forming them into a new, completely independent New York bank.
In San Francisco, where a 1963 merger of San Francisco's Crocker-Anglo National Bank and Los Angeles' Citizens National Bank into the CrockerCitizens National Bank is under attack in Federal court, the Justice Department proposed a more unusual remedy. If the merger is ruled illegal, it suggested, the Transamerica Corp. -a $400 million holding company that initiated the merger and now owns 11% of Crocker-Citizens stock -should be ordered to establish a new statewide banking system that could compete with Crocker-Citizens, then to sell its interest in the new system to an independent third party.
The Justice Department's best-laid plans, however, may yet go astray. The Senate has already passed and the House is considering a bill that would exempt from antitrust action the banks involved in the six current cases. The bill would also make it vastly more difficult for Justice to bring antitrust suits against other U.S. banks, which many Congressmen feel are already amply regulated by federal agencies.
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