The tendency toward integration which has influenced the evolution of all lines of "big business" has also affected the development of financial corporations. One method of eliminating competition and securing community of interest has been to appoint the same directors on the boards of the banks over which control is sought. This practice became quite extensive, and finally, in 1914, Congress passed, as part of the general anti-trust legislation of the time, the Clayton Act, which forbade these "interlocking directorates" for certain classes of banks. This statute prohibited any person from acting at the same time as director, officer, or employee in two or more banks or trust companies operating under the laws of the United States and having deposits, capital, surplus, and undivided profits in excess of $5,000,000. The same restriction applied to banks or trust companies located within the same city if it possessed a population over 200,000. In order to observe the provisions of the Act, many persons who held several directorates in large banks withdrew from these offices.

The original Clayton Act caused embarrassment especially to metropolitan banks, and in 1916 its terms were rendered less exacting by the Kern Amendment. The statute thus revised permitted individuals simultaneously to serve two or more banks which were members of the Federal Reserve system provided these institutions were not in "substantial competition." The duty of interpreting the Act was assigned to the Federal Reserve Board. If a person now desires to hold directorships in two or more large banking institutions, he first presents his application to the Federal Reserve Board, which determines whether or not competition is being restrained. In rendering these decisions the board has followed a liberal policy. Comparatively few applications have been rejected, but many changes have occurred through voluntary action of directors.