There are many motives for the consolidation of banks. One no doubt is to allay competition. Another is to be able to offer a more varied service, as the combination of trust companies and national banks since the law has permitted national banks to do trust business not only cuts down the overhead of conducting two institutions but also lets the consolidated institution offer its customers a more diversified service than before. Sometimes the motive for consolidation is simply the desire for enlargement. Mere size is a real factor in the success of banks, and concentrated control is much better than mere affiliation with other institutions. Our bankers are finding large size necessary, in the first place, to enter the foreign field in competition with the gigantic banks abroad, and in the second place, to handle the constantly increasing scale of domestic business, inasmuch as domestic industries are increasing in size and are operated on a higher price basis.

In England and other European countries there has been a marked tendency for banking houses to consolidate, one bank gradually absorbing others until finally enormous institutions with world-wide connections are formed. During the war the English public became alarmed at the concentration of the money power, and to allay criticism further combinations were forbidden by the government. In Canada, also, the process of consolidation is marked. In the United States during the last two years many large consolidations have taken place, particularly in New York City. To date no protest has arisen against this, but bankers realize that their consolidated control over capital must not be abused lest an aroused public put intolerable burdens upon them.