U.S. Race Riots Hit Taxpayers Heavily

Press, Volume CVII, Issue 31441, 7 August 1967, Page 10

U.S. Race Riots Hit Taxpayers Heavily

(N.ZPjI. -Reuter—Copyright)

NEW YORK, August 6. The American taxpayer is likely to bear the brunt of the staggering repair bills resulting from racial riots in 80 United States cities this year. Insurance companies face a massive bill, but the man in the street looks like being the ultimate loser through increased insurance rates and mounting expenditure of public funds.

Insurance companies will pay millions of dollars, but their settlements will probably only account for a fraction of the actual losses since most damaged property was not insured.

In Detroit alone the most destructive riot in American history caused property damage in excess of $5OO million. This includes the 1300 homes and businesses destroyed or damaged by fire. It does not include the full losses resulting from the looting of 2000 shops. In Newark the damage has been estimated at $l5 million and for the whole nation the total is in the region of $6OO million.

The cost of meeting claims will be evenly distributed among American companies, and through reinsurance British firms face a bill of between $5 and $lO million. A general increase of fire insurance rates is the almost certain consequence, according to American insurance industry sources. Hardest hit in Detroit were the hundreds of small businessmen and shopkeepers who saw their livelihoods go up in flames. Through the Small Business

Administration the Federal Government has started pouring millions of dollars into the city in long-term, lowinterest loans to help them start again from scratch. Rehousing Problem The city faces the immediate problem of rehousing 5000 homeless people, and the long-term task of rebuilding devastated districts. It has been estimated that the rebuilding of the city could take a decade and require a large infusion of State and Federal funds. Both Detroit and Newark look hopefully to the private sector to help in rebuilding

the ruins. But the outlook is bleak. Forty businesses were destroyed during the six bloody days of rioting in Watts in 1965. Two years later only, three have been rebuilt and only five new businesses have moved into the area. The same fear that drove white and Negro businessmen out of Watts is evident in Detroit and Newark, and the cities face the alternatives of pouring millions of dollars into public rebuilding programmes or leaving the ghettos as a wasteland of burned out ruins and boardedup shops. t