Evening star., 1933-02-18
Murphy of Detroit, as Spokes.
man, Cites Necessity for
Debt Relief.
TAX DELINQUENCIES
36 PER CENT THIS YEAR
Curley of Boston Compares Bur-
den of Charity-Proposal Prevent
ed-Murphy Made President.

The plea Of the mayors of 40 Ameri-
can cities that the Reconstruction Cor
poration be allowed to make loans to
them today was formally put before
the Senate Banking Committee.
Mayor Frank Murphy of Detroit, act
Ing as spokesman for committee rep
resenting the mayors, was the first to
appear.
He read resolution adopted and made
public by the mayors at a conference
here yesterday, urging loans to the
cities as well as States.
He told the committee that debts
built up (by the cities) in the over
expansion period will continue for some
years.
Tax delinquencies ranged upward of
80 per cent in the larger cities and
were SO per cent in Detroit this year,
51e added.
Against this, he said, "For debt
charges, out of the tax dollar next year
67 cents will be taken"
.,. Detroit Needs S35, 5,ooo, 900.
Asked by Senator Fletcher, Demo-
crat, of Florida how much Detroit
would apply for if loans were author
tzed, Murphy said:
Probably $35,0OO,0oO to $37, 900 00O."
Senator Reynolds, Democrat, of North
Carolina asked Murphy how much
would go to bond holders.
"An of It," Murphy replied.
None OF 1t would go to the unem-
ployed?" persisted Reynolds. Murphy
said he felt none would.
We have a right to come to the
Federal Government" he asserted. "If
the Reconstruction Finance Corporation
ceases to make loans to private con-
Germs all well and good, but SO long
as the door is open the large municipal
governments should come first"
also spoke in behalf of the R. F. C.
loans for cities. Compared with 81
100000 in normal times, he said, Boston
spent $12,000,000 on relief last year.
unless some industrial activity comes"
ne added, this year We must spend
$14,000,000.
$4,000, 100000 Cost Set.
One vast construction project Curley
proposed would make navigable all
tributaries of the Mississippi and other
great waterways reaching into the farm
regions. He estimated the cost at
$4,000, ,00o, 900.
II the project were carried out, he
said, the money center would be trans
1erred from New York to Chicago.
Mayor Dan w. Hoan, Socialist mayor |
OF Milwaukee, warned of the possibil- |
1ty OF default on municipal debts and |
said If this occurred all credit would be |
suspended.
Hoan said Milwaukee had done as
much as any other city for relief, but
mot one dollar can be spent this year
1or construction, because we are in
debted to the limit
There is no way to solve the situation
locally or by State action, he said.
A $4,000, 100000 construction pro-
gram and making eligible municipal
tax anticipation warrants as security
Tor. r. F. G. loans. he said, would re
lease money in the banks and in stock
hgs and put the wheels of industry
Ia motion"
Urges Bond Issue.
Hoan recommended issuance of 81
b00,000,000 in Federal non-interest
bearing bonds with the circulation
privilege.
This. he said. would provide money
for the cities at no cost to the Gov
ernment except the printing bill
1t would provide an honest dollar"
he asserted
NJ. S. Szymczak, controller of Chi
cago, reviewed the city's tax situation
and said what we need is more con-
fdence," in its securities
If We can sell them as we have in
the past" he said, everything will be
all right"
He said the city had sold over s15,-
oo0,000 in refunding bonds to banks,
but needed a market for its millions
Of dollars Of tax anticipation warrants.
II we can pay our school teachers,
police and fremen,' he added, that
Will increase business and help conSid-
erably."
Proposal for Legislation.
The proposal, drawn up by mayors
and other officials at an all-day confer
enee yesterday at the Mayhower Hotel,
was presented The United States
Congress of Mayors, which was formed
as permanent organization at yester-
days meeting.
The r. F. c. loans are sought on Sc
curity for which the municipalities
have no private market-refunding OBJ
legations tax anticipation warrants and
paper issued on delinquent taxes. Aid
also Is sought for public-owned utilities,
where needed. The r. F. C. amend
Inent proposed would authorize pur-
chase of the securities at par, whether
or not other obligations of the munich
pality are at par, and would hold the
interest to maximum of 6 per cent
It would be provided also that liberal
construction" be put on the pending
amendment.
Public Works Pressed.
The resolution embodying the pro-
posal sets out that in making such
loans the Reconstruction Finance Cor
poration may take into consideration
whether such municipality has been ef-
fciently conducted, what economies
have been made effective since January
j, 1881, and may suggest as condition
precedent to any loans such other econ
omies or efflciencies as the Reconstruc-
tion Finance Corporation shall deem
necessary
In addition to the loan features the
city heads also were prepared to ask
that the Government spend SIS 900 ,000,-
900 for major construction projects for
unemployment aid
Mayor Curley, head Of the commit
tee which formulated the program,
said they were convinced the legis-
lation is absolutely necessary" He
declared that, at a conservative
estimate, every city in the coun-
try had 20 per cent unpaid taxes
last year and that the figure was prob
ably nearer 80 per cent. This year, the
Boston mayor continued, 80 per cent
delinquency is anticipated.
Curley charged the failure of the
Government to launch huge construc-
tion program last year had intensified
the depression, explaining that he had
urged such action on President Hoover
Called Palliative.
While the proposed loaning program
was pending before the conference,
after presentation by the Resolutions
hEal, 80
st. Paul vehemently described it as only
@ palliative and declared he would
like to see something more fundamen-
tai"
Recalling conditions that had been
outlined by a succession of speakers,