Opinion of the Court by
Mr. Justice Douglas,
announced by Mr. Justice Black.
This is a civil suit in which the United States charges that the consolidation of First National Bank and Trust Co. of Lexington, Kentucky (First National), and Security Trust Co. of Lexington (Security Trust), to form First Security National Bank and Trust Co. (First Security), constitutes a combination in restraint of trade and commerce in violation of § 1 of the Sherman Act and a combination and an attempt to monopolize trade and commerce in violation of § 2 of that Act. 26 Stat. 209 as amended, 15 U. S. C. §§ 1, 2.
The plan of consolidation was submitted to the Comptroller of the Currency and he, pursuant to the provision of the Bank Merger Act of 1960, 74 Stat. 129, 12 U. S. C. (Supp. IY) § 1828 (c), requested and received reports of the probable competitive effects of the proposed consolidation from the Attorney General, the Federal Deposit Insurance Corp., and the Board of Governors of the Federal Reserve System. Each report concluded that the consolidation would adversely affect competition among commercial banks in Fayette County. Nevertheless, the Comptroller of the Currency approved the consolidation on February 27, 1961; it was effected March 1, and this Sherman Act suit was filed the same day. The District Court, while agreeing that the Comptroller of the Currency’s approval of the consolidation did not render it immune from challenge under the Sherman Act, held that no violation of that Act had been shown. 208 F. Supp. 457. The case is here on direct appeal. 15 U. S. C. § 29. We noted probable jurisdiction. 374 U. S. 824.
We agree with the District Court that commercial banking is one relevant market for determining the § 1 issue in the case. In Fayette County commercial banks are the only financial institutions authorized to receive demand deposits and to offer checking accounts. They are also the only financial institutions in the county that accept time deposits from partnerships and corporations and that make single-payment loans to individuals and commercial and industrial loans to businesses. Moreover, commercial banks offer a wider variety of financial services than the other financial institutions, e. g., deposit boxes, Christmas Clubs, correspondent bank facilities, collection services, and trust department services.
We also agree with the District Court that the consolidation should be judged in light of its effect on competition in Fayette County. The record establishes that here, as in United States v. Philadelphia National Bank, 374 U. S. 321, the “factor of inconvenience” does indeed localize banking competition “as effectively as high transportation costs in other industries.” 374 U. S., at 358. Practically all of the business of the banks in Lexington originates in Fayette County. Only 4.8% of First National’s demand deposit accounts and 4.5% of Security Trust’s were held by depositors who did not maintain offices in Lexington. In dollar volume the percentage was 2.8 for each bank. Apart from large national companies, businesses in the area are restricted to the Fayette County banks for their working capital loans; and commercial banks outside Lexington do a negligible amount of business in the county. There is also a negligible amount of competition from corporate fiduciaries outside Fayette County.
We turn then to the facts relevant to the alleged restraint of trade under the Sherman Act.
Prior to the consolidation the relative size of First National as compared to its five competitors was as follows:
Assets Deposits Loans
First National..... 39.83% 40.06% 40.22%
Citizens Union..... 17.06 16.78 16.41
Bank of Commerce 12.99 13.32 14.46
Security Trust..... 12.87 11.88 13.98
Central Bank...... 9.14 9.66 8.85
Second National... 8.10 8.30 6.09
The bank established by the consolidation was. larger than all the remaining banks combined:
Assets Deposits Loans
First Security.................... 52.70% 51.95% 54.20%
Citizens Union.................... 17.06 16.78 16.41
Bank of Commerce............... 12.99 13.32 14.46
Central Bank..................... 9.14 9.66 8.85
Second National.................. 8.10 8.30 6.09
Prior to the consolidation, First National and Security Trust had been close competitors in the trust department business. Between them they held 94.82% of all trust assets, 92.20% of all trust department earnings, and 79.62% of all trust accounts:
Trust Assets
Trust Dept. Earnings
Number of Trust Accounts
Security Trust..................... 50.55% 46.91% 54.31%
First National.................... 44.27 45.29 25.31
Citizens Union................... 3.41 4.21 16.01
Second National.................. 1.33 .63 2.12
Bank of Commerce.................44 2.96 2.26
There was here no “predatory” purpose. But we think it clear that significant competition will be eliminated by the consolidation. There is testimony in the record from three of the four remaining banks that the consolidation will seriously affect their ability to compete effectively over the years; that the “image” of “bigness” is a powerful attraction to customers, an advantage that increases progressively with disparity in size; and that the multiplicity of extra services in the trust field which the new company could offer tends to foreclose competition there.
We think it clear that the elimination of significant competition between First National and Security Trust constitutes an unreasonable restraint of trade in violation of § 1 of the Sherman Act. The case, we think, is governed by Northern Securities Co. v. United States, 193 U. S. 197, and its progeny. The Northern Pacific and the Great Northern operated parallel lines west of Chicago. A holding company acquired the controlling stock in each company. A violation of § 1 was adjudged without reference to or a determination of the extent to which the traffic of the combined roads was still subject to some competition. It was enough that the two roads competed, that their competition was not insubstantial, and that the combination put an end to it. Id., at 326-328.
United States v. Union Pacific R. Co., 226 U. S. 61, was in the same tradition. Acquisition by Union Pacific of a controlling stock interest in Southern Pacific was held to violate § 1 of the Sherman Act. As in the Northern Securities case the Court held the combination illegal because of the elimination of the inter se competition between the merging companies, without reference to the strength or weakness of whatever competition remained. The Court said:
“It is urged that this competitive traffic was infinitesimal when compared with the gross amount of the business transacted by both roads, and so small as only to amount to that incidental restraint of trade which ought not to be held to be within the law; but we think the testimony amply shows that, while these roads did a great deal of business for which they did not compete and that the competitive business was a comparatively small part of the sum total of all trafile, state and interstate, carried over them, nevertheless such competing trafile was large in volume, amounting to many millions of dollars. Before the transfer of the stock this traffic was the subject of active competition between these systems, but by reason of the power arising from such transfer it has since been placed under a common control. It was by no means a negligible part, but a large and valuable part, of interstate commerce which was thus directly affected.” Id., at 88-89.
United States v. Reading Co., 253 U. S. 26, is the third of the series. There a holding company brought under common control two competing interstate carriers and two competing coal companies. That was held “without more” to be a violation of §§ 1 and 2 of the Sherman Act. Id., at 59.
The fourth of the series is United States v. Southern Pacific Co., 259 U. S. 214, in which the acquisition by Southern Pacific of stock of Central Pacific — a connecting link for transcontinental shipments by a competitor of Southern Pacific — was held to violate the Sherman Act. In reference to the earlier cases the Court said:
“These cases, collectively, establish that one system of railroad transportation cannot acquire another, nor a substantial and vital part thereof, when the effect of such acquisition is to suppress or materially reduce the free and normal flow of competition in the channels of interstate trade.” Id., at 230-231.
We need not go so far here as we went in United States v. Yellow Cab Co., 332 U. S. 218, 225, where we said:
“. . . the amount of interstate trade thus affected by the conspiracy is immaterial in determining whether a violation of the Sherman Act has been charged in the complaint. Section 1 of the Act outlaws unreasonable restraints on interstate commerce, regardless of the amount of the commerce affected.”
The four railroad cases at least stand for the proposition that where merging companies are major competitive factors in a relevant market, the elimination of significant competition between them, by merger or consolidation, itself constitutes a violation of § 1 of the Sherman Act. That standard was met in the present case in view of the fact that the two banks in question had such a large share of the relevant market.
It is said that United States v. Columbia Steel Co., 334 U. S. 495, is counter to this view. There the United States Steel Corp. acquired the assets of Consolidated Steel Corp. Both made fabricated structural steel products, the former selling on a nation-wide basis, the latter in 11 States. The conclusion that the acquisition was lawful was reached after the CourLobserved, inter alia, that because of rate structures and the location oTUmted States Steel’s fabricating subsidiaries, the latter were unable to compete effectively in Consolidated’s market. Id., at 511-518, 529-530. The Columbia Steel case must be confined to its special facts. The Court said:
“In determining what constitutes unreasonable restraint, we do not think the dollar volugnojis^in itself of compelling significance; we look rather to the percentage of business controlled, the strength of the remaining competition, whether the action springs from business requirements or purpose to monopolize, the probable development of the industry, consumer demands, and other characteristics of the market. We do not undertake to prescribe any set of percentage figures by which to measure the reasonableness of a corporation’s enlargement of its activities by the purchase of the assets of a competitor. The relative effect of percentage-command of a market varies with the setting in which that factor is placed.” Id., at 527-528.
In the present case all those factors clearly point the other way, as we have seen. Where, as here, the merging companies are major competitive factors in a relevant market, the elimination of significant competition between them constitutes a violation of § 1 of the Sherman Act. In view of ourcraclusion~ulider § 1 of the Sherman Act, we do not reach the questions posed under § 2.
Reversed.
Mr. Justice Brennan and Mr. Justice White agree with the Court that the elimination of competition between the two banks in the circumstances here presented was a violation of § 1 of the Sherman Act. They would rest the reversal, however, solely on the conclusion that the factors relied on in United States v. Columbia Steel Co., 334 U. S. 495, 527-528, quoted by the Court, as applied to the facts of this case, clearly compel the reversal.
Sections 1 and 2 of the Sherman Act provide in pertinent part:
“Sec. 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. . . .
“Sec. 2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanor. . . .”
That issue was put to rest by United States v. Philadelphia National Bank, 374 U. S. 321, 350-355.
In view of our disposition of the case we find it unnecessary to determine whether trust department services alone are another relevant market.
Small loan companies make personal loans of $800 or less at interest rates higher than those charged by commercial banks. Since commercial banks carry a large volume of demand deposits, their real estate loans are generally of a shorter duration than those offered by savings and loan associations or insurance companies.
The Federal Deposit Insurance Corp. and the Federal Reserve Board used Fayette County as the geographical market, the latter saying that “since there are no concentrations of population in other counties close enough to create competition with other banks, the competitive effects of the proposed consolidation would be confined to the Lexington banks.”
Two of which had been decided after Standard Oil Co. v. United States, 221 U. S. 1, which announced “the rule of reason.”
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