FINANCIAL CRISIS

Southland Times, Issue 21607, 20 January 1932, Page 5

FINANCIAL CRISIS

CITY OF NEW YORK 58,000,000 DOLLARS DUE FOR PAYMENT POSSIBILITY OF DEFAULT (United Press Assn.—By Telegraph—Copyright.) (Rec. 7 p.m.) New York, January 18. Despite desperate struggles during the past few days by the Board of Estimate to find a way out of New York’s financial distress, it is now feared that an unavoidable crisis has been reached and default upon notes totalling 58,500,000 dollars is feared to-morrow. In addition to these notes, which are simply those considered most immediately pressing, the city is considerably worried about its ability to continue daily running expenses aside from salaries.

An examination of the City Record, New York’s official organ of civic affairs, disclosed that the city had paid no bills since January 1. Salaries had been paid to date, but had taken every available dollar. A lengthy conference was held by the Mayor, the City Comptroller and other officials at the home of the president of the National City Bank, Mr Mitchell, but was apparently without results, for the bankers appear to be unwilling to advance funds to enable the city to meet its obligations. Despite large retrenchments already made, or promises, these are still regarded as insufficient.

One prominent banker stated: “We are not particularly impressed by the fact that the Board of Estimate placed approximately 120,000,000 dollars in projects ‘on the shelf.’ Many of those projects as a matter of fact have been ‘on the shelf’ for many years and were likely to have stayed there whether the city had money or not.” Among the day’s outstanding bankruptcies were the Hudson River Navigating Corporation and Spreckle’s Sugar Company. The banks closed include the First National and Commercial of Champaign (Illinois) with combined total deposits of 6,500,000 dollars, and the First National of Durham (Carolina) with deposits on record on Saturday totalling 3,500,000 dollars. 'The directors of the latter bank asserted that closure was due to withdrawals of deposits since January 10 of 4,000,000 dollars. CHICAGO BANK CLOSES. (Rec. 7.45 p.m.) New York, January 18. The Chicago Depositors’ State Bank with deposits totalling 3,000,000 dollars has closed owing to the recent withdrawal of an additional 3,000,000 dollars in deposits.