We legislate to prevent monopolies and for the ostensible purpose of encouraging competition, but the rules of banking are well nigh prohibitive of the creation of new competitive concerns. The president of one of the largest banking institutions in the United States, whose operations extend into every state, told me that he had refused a loan to Phil Armour except upon collateral that could be sold on the stock exchange of any city, and in the same conversation said there was not a loan in his institution except upon listed collateral. Only big concerns can furnish that class of security. Suppose you were to build a packing house costing one million dollars and should make a bond issue of five hundred thousand dollars so as to have collateral. The officers of no bank would care to lend on those bonds. To do so would be to rely upon their judgment, and some little bank examiner would report that the bank had loaned on collateral that had no market value. Thereupon the Banking Department would write criticising the loan and directing that the letter be read to the board and a certain number of directors sign a reply. The course of least resistance is to refuse all loans except to monopolies or upon stock exchange collateral. Not long ago a friend applied to one of the large banking institutions in New York City for a loan upon unlisted securities. The president took from his desk a certificate of stock of a certain railroad and said: “I do not believe this stock worth the paper it is printed on, but I will lend money upon it. I believe your securities are absolutely good but I will not lend a dollar upon them.” The reason was sensible, and the banker was wise when banking laws and the rules of banking departments are considered. The railroad stock was listed and dealt in every hour. Hence the public assumed it had value, and it could be sold on the stock exchange for a price that fluctuated little. Its intrinsic value, if any, was problematic, but it did have a market value. The security offered was not listed. In the opinion of the banker it had abundant intrinsic value, but since it did not have a market value on the stock exchange, he did not feel justified in inviting criticism from the Banking Department by relying upon his judgment. It is difficult for a new concern to get credit and without credit no concern can live. BECAUSE ONE HORSE KICKS SHALL WE HAMSTRING THE WHOLE DROVE? To a greater or less degree, the same policy has been applied to nearly all important branches of business. The rules for the operation of railroads and insurance companies are both complex and conflicting. The books have to be kept to conform to the legislative requirements of every state in which the concern does business.