FACING BANKRUPTCY

Otago Daily Times, Issue 21539, 11 January 1932, Page 7

FACING BANKRUPTCY

BIG AMERICAN CITIES , ACUTE BUDGETARY CRISES. NEW YORK, January 9. (Received Jan. 11, at 0.30 a.m.) With the revelation that New York is in grave financial difficulties following an appeal by the Mayor (Mr Walker) to the Federal Government alleging that the banks are “ squeezing ” the municipality, which needs a 90,000,000-dollar loan to meet urgent obligations. Four of America’s largest cities are placing acute budgetary crises, with actual or technical bankruptcy in the offing. Chicago, Detroit, Philadelphia, and this city are those principally affected. The bankers here, in countering the allegations, point to extravagant expenditures and corruption as making it impossible to float any such large loan, even at interest in excess of 6 per cent. Short time loans falling due and unemployment relief are New York’s most pressing requirements, and it is uncertain whether these can be met. Philadelphia, with a 14,000,000-dollar deficit and the banks declining to underwrite a 15,000,000-dollar loan, was compelled to make the last semi-monthly payment of 25,639 employees with scrip. Tax receipts have fallen and there are no prospects of obtaining sufficient revenue to meet the expenditure. Detroit, requiring 44,000,000 dollars, could not get the State authorities to approve any bond issue in excess of 22.000. Meanwhile it has “ extravagantly over-spent” on various unemployment relief measures and is needing 53.000. dollars to refund short time loans.