House & Hall

The House of Morgan last week pulled the Hall of Tammany out of a bad financial hole. It was a rescue of civic necessity, not political love.

Tammany's political strength derives in large measure from oversized municipal payrolls, fat public contracts, personal relief for the faithful. Slim, slick little Mayor James John Walker, whose salary is $40,000, refused to economize. In 1929 the municipal budget was $520,000,000; in 1931, $605,000,000. For this year Mayor Walker put through a budget of $631,000,000 while his critics screamed themselves hoarse about his extravagance. Fortnight after New Year's the city treasury found it had only about $13,000,000 in cash on hand and close to $150,000,000 in short term obligations to meet before May 1 when municipal taxes are due. Money could not be raised in the public market where city bonds were selling as low as 78. For a week "Jimmy" Walker went through a series of elaborate political contortions, in an attempt to frighten the bankers with a club called Humanity. Then he calmed himself. And then Thomas William Lamont, Morgan partner, Charles Edwin Mitchell of National City Bank and Winthrop Williams Aldrich of Chase National Bank entered into a series of private discussions. Mayor Walker met them in a variety of places including Mr. Mitchell's home on Fifth Avenue. The Mayor struck $110,000,000 worth of public works off the city's construction program. When that left the bankers still unmoved, he airily ordered all his department heads to find new economies. Mr. Lamont & Colleagues began to be satisfied. First they let the city have $12,500,000 for eleven days at 6% to tide it over. Then after the Legislature had hastily amended the city charter and Governor Roosevelt had signed the amendment shortly before midnight. Mr. Lamont announced that a syndicate of 46 banks and bond houses headed by J. P. Morgan & Co. would raise $100,000,000 for New York on its corporate stock notes. In addition, a revolving banking credit of $151,000.000 would be placed at the city's disposal. Last September the Municipal treasury was able to borrow for 1 3/8%. Last week, thanks to what Tammany had done to its credit, it had to pay 6%, on its stock notes, the highest rate in its history. For floating this loan which the investing public fairly gobbled up. the syndicate charged not one single cent for commissions or services, took its reward in a sense of civic duty well done. Temporarily rescued, Tammany's Walker remarked: "Talk about the market! My blood pressure dropped seven points today to 103, a new low!"* In Chicago where municipal credit has long been at rock bottom, financial relief also came into sight last week when the Illinois Legislature passed a bill to revamp Cook County's taxing machinery. A non-political taxing board, under this measure, will replace elective assessors whose lopsided and unfair assessments have been the root of Chicago's tax troubles.

*Normal blood pressure for a man of Mayor Walker's age (50): 150.

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