I N V I S I B L E   C O N T R A C T S

                         George Mercier

                         [Pages 480-481]

[Certain conventions  have  been  used  in  converting  INVISIBLE
CONTRACTS to  an electronic  medium.   For an  explanation of the
conventions used,  please  download  the  file  INCONHLP.ZIP  for
further illumination.   Other  background information  as well is
contained in  INCONHLP.ZIP.   It is  advisable to  EXIT this file
right now and read the contents of INCONHLP.ZIP before proceeding
with your study of this file.]

By experiencing  the direct  benefits  of  Commercial  enrichment
acquired through  a Federal license program, such as being an SEC
registered  stockbroker,  or  an  ATF  licensed  manufacturer  of
fireworks, which  is an obvious pursuit of federally participated
profit  or  gain.    Several  federal  monopolies  were  designed
specifically  for   the  existing   participants  to   experience
intensive Commercial  enrichment in,  as  the  net  effect  of  a
regulatory jurisdiction  is to  discourage potential  new  market
entrants from  competing with  established corporate  titans.  In
any market  there are only so many potential customers available,
and excluding new upstarts allows existing Grandfathers to have a
bigger slice of the pie they would not otherwise be experiencing.
For example,  the creation  of National  Banks by  the  Congress,
through the  Comptroller of  the Currency,  is one  such monopoly
designed to  enrich existing  market participants, while shutting
out new  banks and  damaging  the  end  consumer.    In  any  one
demographic banking  district, there  is only so much business to
be had;  cutting out  new entrants  keeps a  bigger slice  of the
banking pie for the owners.  [634]

For example,  in 1967,  F.W. Pitts wanted to bring a new National
Bank into  the Hartsville,  South Carolina area.  He submitted an
application to  the Comptroller  of the  Currency for  a  license
certificate, and the request was denied.  Reason:

     "... we  were unable  to reach  a favorable conclusion as to
     the need factor."

     -    CAMP v. PITTS, 411 U.S. 138, at 139 (1973).

That is  correct:  The Comptroller denied the application because
the community  was already  adequately served by other banks, and
there was  no "need,"  seemingly, for  the new  proposed national
bank.   In this  way, the existing banks in Hartsville shut out a
new impending  competitor.   The letter  from the Comptroller, in
turning down the License request, listed the banks already in the
Hartsville area  and the  deposits they  carried [CAMP,  id.,  at
139].    The  Comptroller  seemed  to  be  very  concerned  about
enhancing the  financial enrichment of the existing banks; and at
no time  was there  any discussion about the improved service the
end consumer  would be  experiencing, or  of the very competitive
rates of  interest on  loans  that  new  upstarts  searching  for
business charge.   But  like the  tightly regulated  issuance  of
local Television  Station licenses by the FCC, the Comptroller of
the Currency  is on  a mission:   To make sure that the owners of
existing banks  are very  well fed,  and so throwing Torts at the
public is nothing they are going to concern themselves with.  For
a summary  of the  laws creating  obstacles for  new  prospective
banks to  go into  business, see  the Editor's  Notes called BANK
COMPETITION FRUSTRATED in 71 Yale Law Journal 592 (1962).


The secondary  consequences of  restraining  the  number  of  new
market entrants  politically are elevated prices the end consumer
winds up  paying, constricted services and retarded technological
innovations.  [635]


The telephone  companies have  exclusive  geographical  districts
assigned to  them with  no competitors -- a pure monopoly; and if
the FCC  had not  intervened to  allow third party telephones and
other equipment to be connected to local telephone company lines,
you would  never have  been able  to have  automatic redialing on
your phones  -- such  nice little effort savers are the result of
competition, and  not your  local phone  company, who  could care
less.    Computers  have  been  used  extensively  for  telephone
switching since  the middle 1960's, and the continuing refusal of
the phone  company to  assign  a  few  byte  locations  in  their
computer's memory  to remember  your last dialed number, occurred
for just  one reason:   They  have a  monopoly, they  have  their
enrichment pipeline  set up, and they don't care about you at all
[a relative  statement that  will be  viewed as being excessively
harsh by  those  who  never  bothered  to  give  any  thought  to
evaluating, comparatively,  the service  attitude  manifested  by
businessmen in  a competitive  operating atmosphere,  with  those
businessmen who don't need to concern themselves with competitive
pressures.]     Yes,  MINIMALISM   rules  in   all  uncompetitive
environments, Commercial and otherwise.

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George Mercier