CBS Evening News for Friday, Aug 22, 1975
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(Studio) New York City pays $741 million of $12 billion debt. Bankers don't see how they can sell bonds for next month's payment.
REPORTER: Roger Mudd
(Fall River, Massachusetts) Fall River run by finance board between 1931-41 due to default on debt. [Ex-mayor William GRANT - says many laid off. Finance board collected money, paid bills and city sadly neglected.] If New York City defaults, National Guard might take place of police and firemen. Disorder could break out if welfare checks stopped. National economy might be affected.
REPORTER: Robert Schakne
(NYC) [Executive Vice President Morgan Guaranty Trust Frank SMEAL - says this must be avoided.] 1,500 sanitation workers, 3,000 police, 900 firemen, and 8,500 teachers fired to avoid default. 30,000 city jobs to be abolished and wages to be frozen. July 31, 1975, film shown. [Mayor Abraham BEAME - announces freeze.] Sanitation workers did strike; teachers threaten strike. [President United Federation of Teachers Albert SHANKER - wonders why bankers should get paid by cutting salary of worker.] Austerity measures demanded by Municipal Assistance Corporation "Big MAC's" plan to bail city out with sale of bonds is in trouble. [SMEAL - advocates optimism.] [New York City comptroller Harrison J. GOLDIN - says fall of New York City could have domino effect.] [BEAME - wants guarantee of lower interest rates.] Admin. says no fed help. [Treasury Secretary William SIMON - won't bail out those who refuse to make tough choices.] "Wall Street Journal" reports federal reserve system to lend money as last resort. Fiscal collapse seems unreal.
REPORTER: Robert Schakne
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