Public Policy: Block That Merger!

• Share

What merger-minded U.S. bankers regard as malicious harassment continued to be Department of Justice policy last week. Undeterred by the refusal of a Federal court fortnight ago to bar absorption of Chicago's City National Bank & Trust Co. by the Continental Illinois National Bank, Attorney General Robert Kennedy's trustbusters raced into New York in an attempt to block the merger of the Hanover Bank (assets: $2 billion) and the Manufacturers Trust Co. (assets: $3.7 billion).

The proposed combine would create the third largest bank in New York City and the fourth largest in the nation,* but both the New York Superintendent of Banks and the Federal Reserve Board had ruled there would be no harm to the public interest. Thus encouraged, the banks prepared to join forces as Manufacturers Hanover Trust Co., but 15 minutes after the merger technically went into effect, Justice Department lawyers arrived in a New York Federal court demanding a temporary restraining order. Among their charges was the somewhat odd argument that when the two banks began to talk merger last January, they automatically engaged in restraint of interstate trade. Because the merger was officially, though not actually, in force, Federal Judge John M. Cashin refused Justice its temporary injunction. But this was cold comfort to Manufacturers Hanover Trust, for first thing this week the Justice Department, with Judge Cashin's consent, will be back in court requesting annulment of the merger.