Business: The Credit Vise Tightens

Consumers and businessmen feel the 20% pinch

Is there economic life after a 20% prime rate? That was the question in the nation's business and financial community last week, as banks hiked their best corporate interest rate to 20%, the ninth increase in the prime since the first of the year. The latest rise pushed the country's basic price for business borrowing money to its highest level in 141 years. The alltime record holder: 36% interest in 1839 during the Martin Van Buren Administration, when overextended land speculators and merchants set off financial panic, one-quarter of the young nation's banks failed, and...

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