The Economy: A Strategic Withdrawal

"I turned on the television set and almost fell out of my chair," said a senior officer of the powerful First National Bank of Boston. What caused such consternation was the news of Lyndon Johnson's admonition to the nation's bankers not to increase their loan interest rates. In response to the rise in the Federal Reserve Board's own discount rate, the big Boston bank had just the day before become the third U.S. bank to hike its own prime rate, but Johnson's pressure changed all that. Said the First National officer: "By...

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