United States v. Philadelphia Nat'l Bank

United States v. Philadelphia Nat'l Bank

Opinion

 [*323]  [***921]  [**1720]    MR. JUSTICE BRENNAN delivered [****5]  the opinion of the Court.

The United States, appellant here, brought this civil action in the United States District Court for the Eastern District of Pennsylvania under § 4 of the Sherman Act, 15 U. S. C. § 4, and § 15 of the Clayton Act, 15 U. S. C. § 25, to enjoin a proposed merger of The Philadelphia National Bank (PNB) and Girard Trust Corn Exchange Bank (Girard), appellees here. The complaint charged violations of § 1 of the Sherman Act, 15 U. S. C. § 1, and  [***922]  § 7 of the Clayton Act, 15 U. S. C. § 18. ¹ From a judgment for appellees after trial, see 201 F.Supp. 348, the United States appealed to this Court under § 2 of the Expediting Act, 15 U. S. C. § 29. Probable jurisdiction was noted. 369 U.S. 883. We reverse the judgment of the District Court. We hold that the merger of appellees is forbidden by § 7 of the  [*324]  Clayton Act and so must be enjoined; we need not, and therefore do not, reach the further question of alleged violation [****6]  of § 1 of the Sherman Act.

 [****7]  I. THE FACTS AND PROCEEDINGS BELOW.

A. The Background: Commercial Banking in the United States.

Because this is the first case which has required this Court to consider the application of the antitrust laws to the commercial banking industry, and because aspects of the industry and of the degree of governmental regulation of it will recur throughout our discussion, we deem it appropriate to begin with a brief background description. ²

 [****8]  [*325]   Commercial  [**1721]  banking in this country is primarily unit banking. That is, control of commercial banking is  [***923]  diffused throughout a very large number of independent, local banks -- 13,460 of them in 1960 -- rather than concentrated in a handful of nationwide banks, as, for example, in England and Germany. There are, to be sure, in addition to the independent banks, some 10,000 branch banks; but branching, which is controlled largely by state law -- and prohibited altogether by some States -- enables a bank to extend itself only to state lines and often not that far. ³ It is also the case, of course, that many banks place loans and solicit deposits outside their home area. But with these qualifications, it remains true that ours is essentially a decentralized system of community banks. Recent years, however, have witnessed a definite trend toward concentration. Thus, during the decade ending in 1960 the number of commercial banks in the United  [*326]  States declined by 714, despite the chartering of 887 new banks and a very substantial increase in the Nation's credit needs during the period. Of the 1,601 independent banks which thus disappeared,  [****9]  1,503, with combined total resources of well over $ 25,000,000,000, disappeared as the result of mergers.

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