The Bank Merger Act a Decade After: Reply to Reid

• DOI: 10.1177/0003603X7401900208
• Published date: 01 June 1974
• Date: 01 June 1974
• Author: Bernard Shull,Paul M. Horvitz
• Subject Matter: Article

THE BANK MERGER ACT A DECADE

AFTER:

REPLY

TO

REID

by

PAUL

M.

HORVITZ·

and

BERNARD

SHULL··

Reid has expressed the belief

that

the bank regulatory

agencies, as a group, have undermined Congressional

intent

and fostered monopoly in banking. This blanket

and

largely

unsupported indictment seems to be the principal basis

for

his criticism of

our

contrary

findings

that

Congressional

purpose in passing the Bank Merger Act was largely effected

in the 1960's. We will discuss first Reid's views

regarding

the regulatory authorities and then some of the specific

criticisms of the

data

we have presented.'

Reid's view is

that

"a

complete prohibition on bank mer-

gers would be the

appropriate

legislative mandate." Reid

is entitled to his view on this

matter

(though we think

it

is

one totally without

merit),

but

this is not the legislative man-

date

that

exists,"

His

view is

irrelevant

to

our

objective of

•Director of Research,

Federal

Deposit Insurance Corporation,

Washington, D. C.

UProfessor,

Department

of Economics,

Hunter

College of the

City University of New York.

1B. Shull

and

P. M. Horvitz, "The Bank Merger Act of 1960:

A Decade After," The

Antitrust

Bulletin, Vol.

XVI,

No.4,

Winter

1971, pp. 859-889. S. R. Reid,

"'The

Bank

Merger Act of 1960: A

Decade

After':

Comment," The Antit1'ust Bulletin, Vol.

XVIII,

No.

3,

Fall

1973, pp. 449-462.

2Donald

Turner

has pointed out

that

economic welfare is signifi-

cantly served by limiting prohibitions of mergers

and

maintaining

relatively free markets for capital assets. Cf. "Conglomerate Mergers

and

Section 7 of the Clayton Act," Harvard Law Review, Vol. 78,

No.7,

May 1965, p. 1313.

321