• Short Summary

    New York City had its closest brush yet with outright bankruptcy.....but at the eleventh hour?

  • Description

    New York City had its closest brush yet with outright bankruptcy.....but at the eleventh hour the city's teachers saved the city by loaning their 150 million dollars (about 75 million pounds sterling ) pension fund.

    New York State gave the city a further loan to pay off 453 million dollars (about 230 million pounds sterling) in debts.

    The loan from the teacher' union ended hours of mounting tension and uncertainty.

    New York City officials had already placed an embargo on regular Friday payments to dustmen, and a committee of legal and financial experts were standing by to decide the best method of keeping essential services operating if the City had to default on its debts.

    Less than an hour before the debts reached the stage of default, the President of the militant teachers' union, Mr. Albert Shanker, announced that he had dropped his previous opposition to the use of 150 million dollars of the teachers' multi-million dollar pension fund to save the City.

    New York City still faces difficult hurdles....payment time on the biggest debt expires on 11 December when the City must redeem about 437 million dollars. The Mayor of New York, Abraham Beame said the City will face the prospect of inevitable default on that date if it receives no external help.

    The prospects of Mayor Beame and his city receiving assistance from the Federal Government look remote...On Friday night Mayor Beame attempted to telephone President Ford to inform him of the result of the day's negotiations to try to keep the City from default. When he asked to speak to the president he was met with a frosty rebuff from a presidential aide, who informed the Mayor that the President was in bed and could not be disturbed.

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    Reuters - Source to be Verified
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