"Rat Hole"

Wide was the wonder throughout the land last week as Chicago, the Second City, floundered deeper into its spectacular mire of public debt. Rarely before has a full-grown municipality made such a financial exhibition of itself. There was no money in the City Treasury, none in Cook County Treasury, none in the School Board Treasury. The 23 park boards were penniless, the largest, South Park, abandoning its preparations for the Centennial Fair until it could sell a bond issue. The credit of city and county agencies was practically exhausted.

The School Board owed $500,000 for coal; dealers were disinclined to deliver more. Some 13,000 teachers had not been paid this year, some longer. Cook County owed 3,862 employes $1,133,000 in back pay, in addition to a debt of $7,035,000 to provision merchants supplying food to its institutions. The City Government owed 18,000 employes $4,160,000. Altogether these municipal units were $11,000,000 in debt to 40,000 workers, none of whom had been paid since Jan. 1.

Cause. No taxes have been paid in the city or county in 20 months, as the result of the 1928 rebellion of property owners against discriminatory assessments. While new assessments have been prepared, the city has starved. Customarily Chicago anticipates its tax revenue by issuing warrants up to 75% of its estimated income. After taking over $189,000,000 worth of these tax warrants, Chicago bankers refused to advance any more cash.

Effects. The city was threatened with the closing of schools where even unpaid teachers could not work without heat. Provision merchants talked of cutting off the supply of food to the county's charitable institutions unless back bills were paid. Civil employes drew on their small savings, borrowed on their property, went to moneylenders for cash at 10% interest per month. The police department announced that it would take no steps to compel its men to repay such usurers. City and county paymasters pondered the idea of paying off employes with the tax warrants, which the banks would cash only at large discounts.

Cures. For immediate relief State Tax Commissioner William H. Malone suggested the sale of $50,000,000 tax warrants to Chicago railroads, industries, large landed corporations. Samuel Insull, Chicago's prime public utilitarian, protested that the city already owed his company $2,000,000 for gas and electricity.

Similar but less ambitious was the city-rescue plan of Silas Hardy Strawn, organizer of a Citizens' Committee of 76. His purpose last week was to induce big taxpayers to buy $20,000,000 worth of tax warrants, on the condition that it be economically expended by City and County authorities. Mr. Strawn saw as clearly as anyone the desperate straits into which Chicago politicians had worked their city. Said he:

"Everyone stays asleep. . . . They talk politics, of getting somebody out of office. . . . They saw they would be putting their money down a rat hole with the present politicians in office. . . . We [the committee] have the organization to cooerdinate and direct efforts of the people to save their city, but there are no efforts for us to cooerdinate. . . . We will be fortunate to get $20,000,000 together. We have canvassed many large taxpayers but they feel they do not want the money they put up wasted. . . ."

Mayor William Hale ("Big Bill") Thompson was in no mood to cooeperate with the Strawn plan, to relinquish control over city finances. He talked grandly about selling tax warrants in New York and Europe if Chicago would not buy them. He blamed "reformers" and Chicago newspapers for the City's troubles. The city's newspapers long ago decided that the best way to get rid of the Mayor was to ignore him, have consistently done so through the present crisis. However they did not fail to print this message delivered last week by Mr. Strawn's committee of 76 and aimed directly at the Mayor:

"Nero fiddled while Rome burned, but he had nothing on what certain politicians are now doing. Big Bill is attempting to get a campaign platform out of the muddle. He is posing as a friend of the poor people against the inroads of the rich. He thinks it will be more effective than promising to biff King George on the snoot when he comes sailing down Lake Michigan toward Chicago."

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