ULTIMATUM TO MEW YORK

Poverty Bay Herald, Volume LIX, Issue 17945, 24 November 1932, Page 12

ULTIMATUM TO MEW YORK

MONEY BINS EMPTY CAPITALISTS REFUSE LOAN £28,000,000 UNCOLLECTABLE TAXES NEW YORK, Oct. 17. Mr. Charles E. Mitchell, chairman of the National City Bank, appeared before the Board of Estimates to-day and laid down an ultimatum that brought the tangled fiscal affairs of America’s largest city to a dramatic crisis. Mr. Mitchell, representing himself and the powerful banking group that has supplied the city with funds on taxanticipation loans, said that no further credit would bo forthcoming until the city effected drastic economies. "ON PRECIPICE QF A CRISIS’’ Delivering a lecture on finance, Mr. Mitchell said the city’s fiscal situation was on the "precipice of a crisis.” _ He insisted that the "already crumbling” investment market for city securities would disappear unless pity expenses are drastically reduced. Mr. Mitchell revealed that the comptroller, Mr. Charles W. Berry, faced by the possibility that the November payrolls would not be met, had applied for a loan of £7,000,000 last week-end and had been refused. Mr. Berry went to Wall Street shortly after the Tammany controlled Board of Estimate rejected the plan of the acting-Mayor, Mr. Joseph V. McKee, for a £17,000,000 reduction in the 1933 budget. The day on which the piper must be paid has rolled around for New York City. The municipal money bins are empty and the fate of future pay cheques for the policemen, firemen and school teachers lies in the hands of the city's budget makors. Their actions in curbing municipal extravagance, bankers warned, will decide whether or not New York is to join the growing list of bankrupt American cities. The showdown with the moneylenders came to-day. The first default in payment of city workers may come when the November payrolls fall due. If it does not come then (it seems incrediblo on the eve of a mayoralty election), bankers and leading taxpayers say, bankruptcy is certain within six months to a year under the present tentative budget of £123.000,000. The budget makers have to-day and Tuesday to cut at least £16,000,000 from that total. >So far they have given no indication that such wholesale reductions will be made. REVENUES SHOW DECLINE

As a further indication of the reduction of anticipated income, Mr Anton Jj. Trunk, president of the New York Real Estate Board, said there would be £29,000.000 uncollectable in taxes this year out of the approximately £104,000,000 expected from taxes on real estate. The city’s income from the State—directly and indirectly—-which amounted to about £18,000,000 this year, has been mostly received and expended. Its only other source of revenue—pier leases, licenses, concessions and the like, netted under £20.000,000 this year, and will bo considerably less y® a &.