Money: A Clash of Interest

The cost of money—the most influential cost in the U.S. economy—soared last week to a peak not seen since 1929.

Led by Chemical Bank New York Trust Co., the nation's fifth largest, commercial banks from coast to coast boosted their prime rate—the minimum interest charged for loans to their biggest customers— from 5½% to 5¾% . With unusual speed, major banks in such money centers as New York, Chicago, San Francisco, Boston, Atlanta and Houston fell in line with the increase, which was the third since last December. At that time, banks lifted their prime rate from 4½% to 5%...

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