Mayors Without Money

Mayors Without Money

Boston's Curley, Milwaukee's Hoan, Houston's Holcombe, New Orleans' Walmsley, Akron's Sparks, Cleveland's Miller. Bridgeport's Buckingham, Elizabeth's Williams. Salt Lake City's Marcus, Providence's Dunne. Newark's Ellenstein, Jersey City's Hague. Rochester's Oviatt. Yonkers' Loehr, Nashville's House, Worcester's Mahoney and a score more mayors of a score more U. S. cities trooped into the Chinese Room of Washington's Mayflower Hotel one sizzling hot day last week. They took off their coats, loosened their collars, lighted cigars, settled dowrn heavily in brocaded chairs. Mayor Curley, with his shirt sleeves rolled up and sweat trickling down his face, presided over what quickly became an experience meeting about the hardships of being a mayor these dark days.

The theme of each mayor was the same: municipal credit with local banks was exhausted. Default on municipal securities loomed.sb Taxpayers were on a silent strike. The cost of unemployment relief continued to soar. Jobs and salaries had been cut and cut again and still the municipal budget would not stay balanced for a week at a time.

This year's Mayors' Conference lacked Detroit's redheaded, vociferous Murphy, now Governor General of the Philippines, who at last year's meeting shouted longest and loudest for a helping hand from the Federal Government. Last week Acting Mayor Couzens had to stay in Detroit to help work out a deal for refunding the city's $352,000,000 debt at lower interest rates with banker-creditors. Nor was New York's O'Brien in the Mayflower's Chinese Room to tell his fellow mayors how he had economized and economized until he thought his heart would break and still his city was constantly leaping from one weekly default crisis to the next on its short-term debt to local bankers. So old and familiar were Chicago's financial woes that Mayor Kelly did not bother to go to Washington to repeat them. Upshot of many a windy speech last week was the drafting by Mayor Walmsley of a tearful resolution of the conference's wants. It was adopted with a hopeful whoop. The mayors wanted: 1) the Government to lend them $1,000,000,000 per year for two years for routine operating expenses; 2) Reconstruction Finance Corp. to buy municipal tax anticipation warrants at 75-c- on $1 ; or 3) the Comptroller of the Currency to issue new money at par against municipal bonds and tax certificates; 4) a Federal advance of 100% on the cost of public works municipalities are expected to undertake under the National Recovery Act, instead of 30%, as provided in that measure. Ad dressed to Congress, the resolution de clared: "A grave crisis threatens. . . . Municipal credit is about to collapse . . . municipal bonds are held by ... widows and orphans . . . the 65.000.000 people who live under our care. . . . We did not cause the depression. . . . We warn you ... city of the government. rapidly . . ." approaching collapse of Mayor Curley put back on his coat, clapped on his hat and, piling into a taxi with Mayors Hoan, Holcombe and Walmsley, ordered: ''To the White House." For 15 minutes President Roosevelt listened sympathetically to his callers, promised them nothing, advised them to go to the Treasury. Thither they drove to see Governor Black of the Federal Reserve Board and Undersecretary Acheson. No, the Federal Reserve had no money to lend them but perhaps the R. F. C. had. Around taxied the four mayors to inter view R. F. C. Chairman Jones. No. R. F. C. had nothing for them either but they might take their appeal to Congress. Up Capitol Hill they chugged, there called on Speaker Rainey and Vice President Garner. Yes, Congress was very busy and, without the President's recommendation it was unlikely that anything could be done but they could present their case to the Senate Finance Committee. They did, without encouragement. Before starting for Boston, Mayor Curley declared: "We feel we are making progress."

sbUp to Feb. 1, 1,120 U. S. municipalities had defaulted on their obligations. Three states have laws whereby such municipalities can be put into receivership like a private corporation. In Massachusetts a commission appointed by the Governor took over Fall River's finances, collected its taxes, controlled its expenditures until it could work its way out of trouble. New Jersey officials were made receivers for North Bergen and Lavallette. Though 150 North Carolina localities have failed to meet their obligations, the State law providing for local receivers has not been invoked on the ground that the default was due to general economic conditions, not to local mismanagement.

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