THE LAST DAYS OF THE CLUB

Surely you've gotten a whiff of this expose already, with a cabal of bankers picking over the Penn Central carcass, gouging the airlines, buying up oil interests, dictating the ""credibility"" of New York City and otherwise getting their fingers into every financial pot from credit cards and mutual funds to underwriting, insurance and savings and loan. . . . Welles' massive analysis of the crises and trends of the last five years among the big money men charts the gradual replacement of the New York Stock Exchange as the linchpin of American capitalism by the ongoing consolidation and growth of commercial banking. The greater part of the book is devoted to a somewhat smug account of the reasons behind Wall Street's collapse. Welles details abuses' of ""the public interest"" you've probably never dreamed of; and traces the Big Board's losing battle for ""self-regulation,"" which only this spring resulted in the termination, after 180 lucrative years of monopoly price-fixing, of non-competitive commission rates. The crunch began around 1969-70 when the old boys found themselves so overextended and backed up with paperwork that millions in securities were lost, embezzled or stolen in delivery. Badly managed companies suffering from redundancies and inefficiencies, crippled by family rule and faith in their divine right to control the NYSE floor, they fell like dominoes. By the time the NYSE realized modernization was inescapable, ""it was a little like an aborigine trying to command a space capsule."" Sic transit gloria, which is as nothing compared to the unassailable power of the new, far more exclusive banking cartel--a bulwark of unregulated capital with interlocking directorates and the right to make policy for their corporate debtors. ""Banks, of course, actually thrive on such economic problems as inflation, high interest rates, and capital shortages. . . ."" Although he is often technical and sometimes prolix, Welles, as an editor of Institutional Investor, is right on the scene and has made a valuable initial assessment of the financial upheaval of the '70's and the potential for economic stranglehold. It deserves consideration.