Evening star., 1940-05-12

| Is, the banks-never got around to fore
closing. Large budgetary deficits were
accumulating as an aftermath Of Jimmy
Walkers regime In City Hall. Carrying
the city from month to month to prevent
complete financial collapse, syndicate
of bankers demanded interest of 5 per
cent and more. The mounting cost of
relief was being added to the citys debt.
In six years La Guardia has worked
wonders. Relief is on a pay-as-you-go
basis. The interest rate is down to one
quarter Of per cent on short term credit
and per cent on long term. The ex-
pense budget has been balanced, al
though with what strainings and striv-
ings and groanings only the Mayor him.
self can appreciate. A recent change
provides that the debt limit shall be fixed
at 10 per cent of the average assessed
valuation for the previous five years in
stead of the valuation Of the preceding
year, as 1t had been before. This is some
protection against an abrupt drop in
values.
Face Major Adjustment.
Proud of the fact that big banking
firms today speak well of the city's
credit. Mr.. McGoldrick does not pretend
that the city's financial problems have
been solved. A severe depression would
produce highly critical situation. The
city today Is collecting taxes on vast
reaches of blighted property in areas that
must some day, and that soon, be put
through process of major adjustment.
One Of these areas is Wall Street and
its environs, where in the 20s building
was out of all proportion to sober needs.
Offlce rentals in downtown skyscrapers
have dropped to fraction Of what they
were 10 years ago. There are thousands
Of for rent signs. In many buildings
revenue from rents Is hardly more than
enough to meet operating costs and
taxes, leaving nothing for investors.
The Empire State Building is one Of
was when the management kept lights
burning in windows at odd places to
create the illusion that there were more
tenants than showed on the rolls. Now
it is plain to the most casual observer
that huge section of the building is
untenanted. The life insurance COM
panies holding the mortgage have had
to scale down their interest demands.
Another area is the loft section IN the
vicinity of Greenwich Village. Here,
there has been serious deterioration.
Likewise on the upper East side, in the
fashionable COS, 70s and 80s, there is q
problem with respect to the big man
sions of another era which now go
begging on the real estate market. No
one today wants a house that requires
seven to twelve servants to run.
Slum Areas Major Problem
But the major problem for the future
lies in the great slum areas Of the lower
East Side Here land is assessed at 81
to $40 square foot-which is one reason
why New York has been able to build.
even with Federal subsidies. only six
housing projects with room for about
10000 families. Four more are in process
Of construction. With land assessed at
this price, Federal subsidy is more than
ever necessary. Without it there could
be virtually no slum clearance. AS a
magnanimous gesture when the housing
program was just starting, Vincent Astor,
who holds more New York real estate
than any other individual, allowed a
parcel to be sold for $3.50 square foot.
But even with the assessed value halved
it proved difficult without Federal sub
sidy to do an adequate job Of construc-
ton.
In recent years several prophets have
preached the inevitable decline of the
great city. That gloomy German philo-
sopher, Oswald Spengler, prophesied the
doom of city civilization in his Decline
of the West" seeing in the deterioration
of cities the end of cycle of growth and
decay such as has marked the history of
every metropolis from the time of the
Pharaohs. More recently and more thor
oughly Lewis Mumford an American
Cities" the elements, economic and
otherwise, which were contributing to
ultimate breakdown.
Controller McGoldrick, scholar and a
teacher, knows his Spengler and his
Mumford. But this stout-hearted de-
fender of the city's towering financial
structure insists that their gloom should
be tempered by little optimism, If only
because the decline they prophesy is
likely to come about much more slowly
than they suggest. New York, Mr.. Nc
Goldrick believes, has a good chance to
hold its own, for the time being at least.