INTERLOCKING DIRECTORATES AND CONTROL OF CORPORATIONS: THE THEORY OF BANK CONTROL

Abstract

SOCIAL argued in banks, ANALYSTS that and control that FROM an over important BRANDEIS corporations mechanism TO FITCH in American AND of such OPPENHEIMER society control is centered is interHAVE SOCIAL argued that control over corporations in American society is centered in anks, and that an important mechanism of such control is interlocking directorates.2 Although these analysts have interpreted interlocks between banks and other corporations as evidence of control, they have not conducted systematic studies of the over-all pattern of interlocks. Conversely, systematic studies of interlocking directorates have been conducted without regard to the theory of bank control. This paper attempts to bridge the gap between these two bodies of literature by systematically examining corporate interlocks among major U.S. corporations from the standpoint of the theory of bank control.3 Fitch and Oppenheimer have produced the latest major restatement of this theory and, for this reason, this discussion will focus on their formulation.4 Resting much of their case on data provided by the Patman Report5 Fitch and Oppenheimer argue that through the concentration of banking and the convergence of interests among banks, the stockholdings of bank trust departments, the dependence of non-financial corpora-

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