The Hays Daily News from Hays, Kansas on December 16, 1976 · Page 8
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The Hays Daily News from Hays, Kansas · Page 8

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Hays, Kansas
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Thursday, December 16, 1976
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Page 8
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December 16, 1976 PAGE 8 HAYS DAILY NEWS New York Tries To Reduce Debt NEW YORK (UPI) - The city has come up with a four- point plan to pay off its $1 billion debt, but one of the principal creditors involved Is clearly not happy with it. The ll-month payment plan, revealed Wednesday at a crowded City Hall news conference, involves a voluntary "Strectout" of some of the city's debt, two methods of floating more bonds, and cash from the city treasury. Mayor Abraham Beame said the plan is contingent on the levels of state and federal aid next year. But he added that in the event that any of the four elements fails to generate enough cash, the difference can be made up with more bonds from the Municipal Assistance Corp., created by the state last year to help market bonds for the city. The plan now must be submitted to the state Court of Appeals, which on Nov. 19 overturned a three-year moratorium on repayment of the $1 billion debt. Arthur Richenthal, a lawyer for the Flushing National Bank, which successfully sued to unfreeze the debt, said he accepts the repayment timetable, but he is uncomfortable with the contingencies, particularly the MAC bond switch, which was a feature of the illegal moratorium. He said he will file a counterproposal Thursday with the high court as city attorneys submit the city plan. This would postpone any action on repaying the loan by at least another month. To pay back the $1 billion, Beame said, the city will raise: — $206 million through a "stretchout" of the payment of principal for certain MAC bonds held by banks and city pension funds; — $250 million to $300 million through placement of new MAC bonds in the private market to institutional investors; — $250 million to $300 million through a new public offering of MAC bonds; — And about $250 million in cash from the city treasury, which is expected to accumu- late through a favorable turn in its cash flow situation. Beame and Felix Rohatyn, chairman of MAC, said the city's underwriters predict a "favorable" atmosphere for rtew MAC paper. The timetable involves a 20 per cent payment in principal by Jan. 1, another 30 per cent by Feb. 1 and the remainder by next Nov. 19, the first anniversary of the court decision. Study Council Appointments Made GARDEN CITY, Kan. (UPI) — Gov. Robert Bennett Thursday said he will appoint Economic Development Secretary Ed Bruske, Kansas Water Resources Board Chairman Dale Williams of Garden City, and Rep. Keith Farrar, R-Hugoton, to the High Plains Study Council. The council, composed of governors and representatives from six midwestern states is being organized to study economic problems created by depleted water supplies. The panel's principal responsibility will be to study alternatives for prolonging irrigation and to identify alternatives where irrigation is no longer possible due to groundwater depletion. "I am extremely concerned about our state's groundwater supplies," Bennett said. "Water without doubt is our greatest natural resource and its depletion has serious consequences he has been a member of the House Energy and Natural Resources Committee and has advised the governor on water matters in southwesfKansas. "Each of these three individuals is intimately familiar with the importance of water to agriculture and the Kansas economy," Bennett said. "I am confident they will well represent the interests of Kansas on this new council." Other states expected to join the federally funded council are Texas, Oklahoma, New Mexico, Colorado and Nebraska. Lonely Search Jack Thum the Clown, 51, Chicago, who for 17 years has brightened children's wards and orphanages with his antics, surveys damage to his fire-damaged belongings after he was released from Edgewater Hospital Tuesday. Although penniless and homeless, Thum planned to work Wednesday evening, entertaining children. Clue To Legionnaires Disease Discovered HARRISBURG, Pa. (UPI) — Pennsylvania health officials say the possible link between phosgene gas and the "Legionnaires' Disease" is the "the first really solid clue" in more than four months of searching for the cause of the mysterious illness. State Health Secretary Dr. Leonard Bachman said Wednesday a special toxicological research team will examine the theory that the lethal gas could have been produced by Fll, a chemical refrigerant used in air conditioning systems, coming into contact with other substances or heat. A Health Department spokesman said investigators were aware of a leak in the air conditioning system' at the Bellevue Stratford Hotel where all the victims stayed or visited during^ ! a state American Legion convention in late July. ^^^^•^^^^^^•^•^ « M , • 77 Steak your claim today! T-BONE • K.C. STRIP • TOP SIRLOIN * BACON WRAPPED FILLETS • RIBEYE Xmas Gift Steak Boxes feature a delicious line of USDA Choice Steaks. All steaks are select cuts, vacuum sealed and packaged in a decorative box. C Gift Certificates Available ) - RETAIL SPECIALS Red Snapper S 1.42p.m, CoMH«rci«l 8 01. 85 C M. Ribeye Steak «..65 C PLUS! With the purchase of any USDA Choice Retail Steak Box, get a one or two pound package of delicious, sugar-cured bacon at HALF PRICE! % OPEN 9 A.M. - 5: Plains Foods, Inc. Southwest Kansas Farming Facing Financial Squeeze BY JOHN MARSHALL HUTCHINSON (HNS), Southwest Kansas bankers and the industry they finance agriculture now face a financial squeeze unparalleled in decades. Demands for farm loans have soared. Cash is running low. The cost to produce raw agricultural products increase daily. The market price of farm products is down, down. "It is bleak in the country," says one banker. "We are looking at the hardest times for the farmer and agriculture here since the 1930s. They are here because of depressed prices and increased operating costs. "Simply, nothing makes a profit." The story is not new. The latest chapters began to unfold late last summer, when wheat prices began to drop. Growers seemed unalarmed, holding their grain for price increases. Prices dropped further. Still no sales. With no sales, the crunch had begun. In a normal season, the sale of wheat creates deposits for banks to work with money needed for future loans. By not selling, wheat growers failed to create the large deposits for banks to work with. Yet, farmers with unsold wheat need more money to continue operating. The money supply has shrunk. One angry metropolitan banker with extensive interest in rural banks says, "I don't know why they (rural bankers) don't face the fact that they don't ha»e any money and can't loan it." The effects of this shriveled Southwest Kansas money supply chiefly are fourfold: 1. Most rural banks with Each depends upon deposits for money to loan. Officers of more than six major banks with hundreds of correspondent accounts In rural Kansas agree generally that most rural banks have reached "acceptable loan limits" the informal ratio of total loans compared with a bank's deposits. A general rule is that a bank's total loans should be a maximum 65 percent of total deposits. This is to assure adequate reserves for depositors and other borrowers. In Southwest Kansas that is no longer a rule; it is the exception. Some banks have loaned more than 80 percent of their deposits. Most have committed at least 70 percent. But demands for more loans increase, despite higher loan rates. On the farm, pressures increase especially on the smaller farms. "Last week I talked to one farmer who showed me his natural gas costs for fueling irrigation pumps had increased 400 percent during the last growing season. He simply can't make it under current conditions. And those conditions aren't likely to change," says one banker with 80 correspondent banks' accounts. A prime factor in this squeeze is the Kansas surplus of wheat at low prices. The Kansas Wheat commission reports that on Oct. 1, nearly 440 /million bushels of wheat remained in storage in Kansas elevators and on farms. This is up nearly 100 million bushels (from 349 million bushels) on the same date a year ago and more than 130 million bushels from the same date in 1974. There is a severe problem," says John Dukelow, the commission's marketing specialist. "And I'm not sure what the answer is perhaps sales forced, even at a dollar below production costs. "This is awful ...but a bad crop year might be the farmer's only hope for a better price," he says. The drought is worse than the farmer's need for money, says one south Kansas banker. "The situation will end in inflation," he says. "Poor crops, reduced beef and feed production will lower supplies. If demand increases we can hope for inflation. "Meanwhile, watch small farms be liquidated." Refinancing farmland mortgages for cash to pay debts may not solve the Kansas money crunch for long, says Raymond Doll, senior vice president and director of research for the Federal Reserve Bank of Kansas City. "This could mean looking to long-term finance for short- term problems, and that could be very expensive. There are big costs .in that kind of finance finder's fees, prepayment penalties and so forth. I don't think that's the answer," Doll says. The worst rub is to the farmer who owns little if any land to appreciate, to be refinanced for cash. "If he isn't solvent now, he's out of luck," says a Hutchinson banker. A Central Kansas banker with 60 correspondents in Western Kansas says the farm finance plight contains a large puzzle: proposed farm policies of the Jimmy Carter Administration. "And we don't know what it will be," he said. "Who'll be the new agriculture secretary? What will be state department policies, especially regarding International market policies ... those are big unknowns." One Southwest Kansan, whose bank has loaned nearly $6 million to farmers 90 percent of all loans outstanding says the institution will increase farm loan rates to one-half percent to 10 percent and prime business loan rates the same amount to 9 >/2 percent. "It's bad here," he said. "We're feeling the effects. Equipment sales are down, business in general is down. We live by the farm dollar what there is left of it." A banker says it's "getting near impossible to advance money against crops that are blowing away, or cattle whose prices do not even meet production costs. "The government loan rate increase helped, but not enough; $2.25 is a myth. Out here many prepay freight or storage costs on wheat. That drops the figure to a net of about $1.90 a bushel," he says. Another banker, who/has $17 million in farm loans outstanding, says short-term agricultural loan rates at his institution may go as high as •13 percent; a colleague says 12 percent. "Out here we live or die by agriculture. Right now it looks like we're...well I better not say," one banker in southwest Kansas says. loan rates some are as high as 13 percent or have drafted plans to increase prime lending rates and rates on agricultural operating loans. An average increase so far appears to be one-half percent, to 9 '/2 percent for prime loans and to 10 percent for agricultural operating loans. 2. Some banks already have forced farmers to sell wheat, or obtain government loans, to pay or refinance mounting debts. Other banks may soon consider similar action. 3.'Farmers increasingly are asked to refinance mortgages on land that has increased in value, trading equity for cash and higher interest payments. 4. Farmers also have begun to talk about cutting expenses on crop production to reduce the costs of their business. Example: Less corn may be planted for irrigation, producers instead turning to milo and planting seed quantities that require only one early-season irrigation. More dryland wheat may be planted for less yield. Tillage will be reduced; costly fertilizer, herbicide and pesticide purchases may be cut. Another aspect of this complex issue: Rural banks the direct financiers of Southwest agriculture do business with larger banks, called "correspondents banks", in which they have deposited cash reserves. Ohio Woman Had No Idea Husband Had Two Wives . COLUMBUS, Ohio (UPI) — "I had no idea at all about any of this," said Helen Sharp of suburbann Gahanna after learning her late husband had two wives and possibly four. "It's all news to me." Franklin County Prosecutor George Smith, said Joseph Gordon Sharp, a computer specialist for the Docutel Co., a Dallas, Tex., based computer firm, was married to Helen Sharp and to Mary Louise Sharp of Grosse Point Park, Mich. Smith said Sharp had two children by his wife in Gahanna and two more by his wife in Grosse Point Park. "We have confirmed at least two families and we are investigating the reports of two more," said Smith. Smith said Sharp, believed to be 51, worked out of Docutel's Columbus office but was employed by the firm's marketing division in Toledo. He said two women, one from Chicago and one from Montreal called Docutel Tuesday to inquire about Sharp. He said the woman from Montreal identified herself as Wendy Sharp and claimed to be Sharp's wife. The woman from Chicago said only that Sharp's marriage to the Gahanna woman would "cause some serious problems." "I just don't know what's going on," said Helen Sharp after attending her husbands funeral in St. Paul, Minn. Her family lives in St. Paul and Mrs. Sharp said she would stay there until after the holidays. Authorities in Grosse Point Park said Mary Louise Sharp was "stunned" when informed of the man's death. ' Virginia DiLuigi who lives near the Sharp family in Grosse Point Park said she knew Mary Louise Sharp and her children well. When told of Sharp's apparent double marriage, she said she was shocked but "not really surprised. "He never came home except maybe four to six times a year," she said. "It was a very strange setup." Mrs. Sharp was not available for comment. Sharp died in the crash of a private plane Friday in Indiana. Federal Aviation Agency officials and Indiana State troopers sifted through the wreckage and found Michigan and Ohio driver's licenses both bearing Sharp's picture and two Social Security cards bearing Sharp's name but different numbers. Smith also said that Sharp was under indictment for charges of theft by deception and using the mails to obtain money. Search On Ml As May Continue 718 IA$f 7fh $IRKT (913) 628)2425 HAYS, KANSAS Golden Plains Youth For Christ * Presents "A Stranger In My Forest" 7:30 p.m. Saturday, Dec. 18 Hays High Auditorium • FREE OF CHARGE • The movie "A Stranger In My Forett" bringi together all the qualities synonymous with a suspenseful adventure story as It follows Terry Jensen, a man running from a mysterious past. When Terry Is befriended by the Hansens, each member of the family offers him a valuable gift. From young Robby and his pet bear, Luke, come warmth and humor. Susan gives Terry a desire for a stable future through her love, and Grandma shows Terry where to find the solution to his problems. WASHINGTON (UPI) Agitation for additional information on Americans still missing in Indochina seemed certain Thursday despite findings o a special House committee that the men probably are dead. After' a 15-month investigation here and across Indochina, the select House committee concluded Wednesday "no Americans are still being held as prisoners as a result of the war in Indochina." The committee recommended the Defense Department review the status of 728 American MIAs, reclassifying them to killed-inaction. This would result in a significant reduction of benefits to their wives and dependents. Carol Bates of the National League of Families of American Prisoners and Missing in Southeast Asia promptly called the report "inept" and "incompetent," and said it was insensitive to release the report just before Christmas. Sen. Robert Dole, R-Kan., promised to introduce a "sense of Congress" resolution on the first day of the 95th Congress to establish a presidential task force on MIAs when any blanket pardon is issued for Vietnam draft evaders — as President- elect Jimmy Carter has promised. REWARD $100 reward for information leading to the arrest and con* viction of persons guilty of vandalism to Christmas decorations within the city of Victoria, Governing Body of Victoria

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