PRESIDENT CLINON and his assistant attorney general for civil rights, Deval Patrick, are following in the footsteps of King Charles I. If history is our guide, they can look forward to losing their heads - though figuratively at the ballot box rather than to the executioner's axe.

Like Charles I, Clinton and his minion are violating a principle dating from the reign of Edward III that "loans against the will of a subject are against reason and the liberty of the land."Like Charles, Clinton cannot get the Legislature to appropriate as much money as he would like for distribution to favored clients.

Like King Charles, Clinton has turned to coercing loans to meet his needs. He has begun with the banks and has plans to extend the coercion to pension funds, mutual funds and insurance companies.

In 1626, King Charles, desperate for money, turned to coercing loans from the upper classes. There was no basis in law for Charles' demands, but the price for refusing was too costly for individuals: imprisonment or involuntary servitude in the navy. Most submitted, but some refused. Among the latter were five knights who sued the king for imprisoning them in violation of habeas corpus.

The judiciary, however, failed to uphold this constitutional principle dating from the Magna Carta. Eventually, Charles, to his discomfort, had to recall Parliament, which passed a habeas corpus statute. Charles' efforts to assert his purposes above the law ultimately got him beheaded.

Today President Clinton cannot get Congress to appropriate as much money as he wants for redistribution as inner city housing subsidies. Therefore, he has set his Justice Department upon the banks. In the crudest acts of extortion ever witnessed, the Justice Department forces the banks to subsidize risky loans by threatening them with "civil rights" lawsuits and by withholding regulatory permits that the banks need in order to conduct and expand their business.

There is no legal basis for the Justice Department's demands, but, as with Charles' extorted subjects, it is safer for the banks to give in than to stand on the law. It is expensive to defend against government lawsuits funded by taxpayers' money. Moreover, the government holds the bank's business hostage until it settles, thus giving competitors a leg up.

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The Justice Department has found that it can safely practice extortion behind charges of "racial discrimination," because the media take such charges at face value and look no further. The Department has already successfully extorted the Shawmut Bank in New England, Chevy Chase in Maryland and smaller banks in Atlanta, South Dakota and Mississippi.

Now it has set its sights on Florida's largest bank, Barnett Banks Inc. Deval Patrick has told Barnett that it can hand over some money or be sued.

This ill-considered policy imposes costs not only on the banks' shareholders but also on black neighborhoods. Studies show that heightened credit risks result in failures of mortgage payments, foreclosures and vacant houses that lead to the deterioration of the neighborhoods. Moreover, sudden credit flows inflate housing prices, further raising the default rate.

By knocking off the banks one at a time with their own consent, the Justice Department is creating a law of credit allocation that is not on the books. This should alarm the American Bankers Association and generate a concerted defense of the industry. It should also alarm Congress which, by refusing to defend our rights, is losing its own right to make the laws.

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