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October 21, 1979 - Image 4

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The Michigan Daily, 1979-10-21

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Page 4-Sunday, October 21; 1979-The Michigan Daily

Mexico City faces preview of the urban crisis o f2000

MEXICO CITY-Three world leaders
-Jimmy Carter, Pope John Paul II and
French President Giscard
d'Estaing-hve come to this sprawling
capital over the past year seeking an-
swers to urgent problems. So have tens
of thousands of Mexican peasants.
But unlike the world leaders, who
posed their solutions and left, the
peasants remain, and so do their
problems. Their daily migration,
coupled with Mexico City's high natural
birth rate, is expected to raise the
population' of this already un-
manageable city of 13 million to 30
million by the year 2000. By then, it will
be the world's biggest city. But the
numbers can be understood best by
viewing the mess that Mexico City is
today, and then trying to imagine the
city with twice as many people.
EVERY MORNING, from the cor-
ners of newly oil-rich Mexico, peasants
board diesel buses that are so full men
stand for hours in aisles to make the
trip to the land of opportunity-the
capital.
It is a. scene being repeated
throughout Latin America, where,
population growth and urbanization
have resulted often in capital cities
holding a third or more of the nation's
population. Ringed by slums and
pressed to provide the most basic of
necessities, many Latin American
capitals are already on the verge of
chaos.
In Mexico City, the only difference is
that the problems are much wor-

se-worse even than in Sao Paulo,
Brazil, its nearest population com-
petitor.
"IT'S THE SPEED of growth that's
the problem," said one official, "the
speed of the demands for housing, jobs
and services."
Already in Mexico City:
the unemployment rate is widely
believed to be at least 20 per cent,
despite the government's seven per
cent figure;
" four million people live in illegal
squatter settlements;
" fresh water has to be pumped in,
and sewage pumped out, because the
city is at an altitude of 7,300 feet with no
rivers nearby.
"This city doesn't want to commit
suicide, said Eduardo Rincon Gallar-
do, the capital's director of public
works. "We don't want to be the Latin
Calcutta, where every morning a cart
goes around to pick up those who have
died in the streets."
LIMITING GROWTH and funneling*
the inevitable population increase to
smaller Mexican cities is one solution,
though it would also create similar
problems elsewhere. The cities of Mon-
terrey and Guadalajara, with one and
two million residents respectively, are
expected to jump to around six million
by 2000. Oil boom towns like Villaher-
mosa, which had only a few hundred
thousand people three years ago, will
then also approach six million, say
government officials.
But even their potential problems,

By Al Goodman

while vast by current standards, are
only a faint reflection of the nightmare-
facing the capital. With more than one
third of the nation's industry located
here, it is no wonder that the rural poor,
and especially the young, stream like a
mighty river into this urban basin. Due
to the influx of youth, the birth rate now
hovers around 3.2 per cent.
As the population soars, the urban in-
frastructure problem intensifies. Ur-
ban researcher Gustavo Garza of the
College of Mexico, claims there are
already 500 illegal squatter settlements
on public and private property, with
poor housing and few services. They
may cover 40 per cent of the sprawling
512-square-mile urban area. No one
knows how much tax money is being
lost as a result.
SEVERAL AGENCIES have been
trying to settle conflicting land claims
and make residency legal. The gover-
nment then slowly steps in with water,
sewage and electrical service-but
rarely with housing.
"Mexico is a poor country and
housing will be in line with the resour-
ces," said Fernanda Speulveda, direc-
tor of the Central Urbanization Com-
mission which is trying to'coordinate
the planning efforts.;
By one university research estimate,
the city is in need of no less than 550,000
housing units. Gallardo states, "The

money to build these houses doesn't
exist."
HOUSING AND LAND frustrations
have frequently led to violence. In the
city's socialist Second of October En-
campment, I recently saw 35 policemen
wield nightsticks battling about 250
angry slum residents over a tract of
land that developers wanted to use for
high-rise middle-class apartment
buildings.
"After .five years here, we have the
right to be owners of this land. The
government still doesn't recognize us,"
said Francisco de la Cruz Velasco, 53, a
lawyer and leader of the 32,000-member
squatter settlement. "If you think it's
bad here," added De la Cruz, who was
an illiterate peasant until age 33.
"imgaine what it's like in the country."'
These problems, however, are rarely
seen downtown. There, on the famous
tree-lined Reforma Boulevard,
crowded with skyscrapers, or near the
Alameda plaza, surrounded by outdoor
cafes, world-class hotels and expensive
shops, the city is thriving as an inter-
national market.
YET TO GET TO the downtown from
most residential areas inevitably in-
volves massive traffic jams that make
average commuter time one-and-a-half
hours in each direction.
A $900 million subway project, in-
cluding three new lines and extension of

one of the three existing routes, may
help. The first 16 of a planned 32 in-
tracity highways are also being built, at
a cost of more than $1 billion. But even
with special lanes for buses, critics
argue they will be hopelessly
inadequate in a few years. Says Tran-
sportation Director Francisco Norena,
"The projections are terrible for cars.
There are now between L5 and 2 million
cars and there's a 10 per cent increase
each year."
Pollution from cars and factories set-
tles in the surrounding valley to
produce Mexico City's legendary smog.
"POLLUTION LEVELS are frequen-
tly four to five times above the inter-
national health organizatiors'
maximum security level," said British
researcher Allen Lavell, on the College
of Mexico faculty. "There's never a day
when there's a safe limit."
Meanwhile, the bill for plumbing un-
derneath the city is soaring. The cen-
tral line alone of a new sewage system
will cost $1.5 billion. Drinking water,
now coming from sources only 40 miles,
away, will soon be pumped from sub-
tropical rivers 200 miles away. The,
government, however, hopes to
provide 20 per cent of the city's needs'
from massive rainwater collection and
filtration centers which have been star-
ted in the mountains surrounding the
capital.
Paying for these huge public works
projects is another matter, says Tran-
sportation Director Norena. "If the
population-continues to increase as it is

doing, we will always be behind.".The
new oil money now beginning to roll in
may help, but it will also be needed out-
side the capital. Mexico's. total
population of 64 million is expected to
swell to over 110 million by the year
2000.
EVEN. WITH THE money *no
available in the city, there are charges
it is not being put to the bestse.
Historic Coyocan square, only a,:few
blocks from President Jose Lopez Por-
tillo's private home, was recently
remodeled for $750,000. "Not 'far
away," said one observer, "people.-are
living without drainage."
"There ark technical limits to, run-
ning a city;" said the Central,'Ur-
banization Commission's Sepulveda.
"There will be a moment wherthe
people will say there is too nhuch
pollution, crime and social sickness and
they will leave for another city."
But others think it might not hajipen
that easily. "Who knows what will hap-
pen in the year 2000 if there isn't a
revolution before then," said Second of
October's De la Cruz. "All the rtin-
tains may be covered with houses:"K
"Are we going to be strong enough to
afford freedom in the year 2000?" asked
public works director Rincon Galla'rio.
"We will be a society of masses "
Al Goodman, on assignment for a
year inLatin America for a nf'urAer
of publications, wrote this piece'for
the Pacific Ne ws Service. ' -.

1 1

i

Ninety Years of Editorial Freedom

A few Memories
of the Crash of '29

v }

V l LXXXX No. 40,

News Phone: 764-0552

Edited and managed by students at the'University of Michigan

From Soweto to 'U' to

a
9
TfHE STRIU
in SouthA
)extended fron
;o the college
ajor univer
IWestern M
Salamazoo,
ere arrested
1 That the,
enerally pea
tration for ti
leard is in' it
back for the
WMU trustee
tacticsto si
:jniversity re
and April whe
der to make
veetings Act.
The WMU t
dame old line
tompanies tha
in order to us
'lub to force
reasoning indi
Western Mic
taking 1essons
our own Unive
hoards stu
acknowledge
livestiture is
for bringing
bear on the w
that a stock p
provides a m
with one of t
pressive gover
But there re
protests a redi
who recogniz
legitimate cou
body. First, t.
has now encor
campus so cla
serve notice u
University tha
(he state and it
movement tha
with token effo
The Western I
fect, opens as

.CL4LWI I(LLAlJt.

J/ YC ~.LV.L l lwl lL

debategoson
JGGLE for black rights against South African investments by
kfrica, which has already state-supported, public institutions.
m the ghettos of Soweto Secondly, the protesters at WMU add
campuses of America's an air of legitimacy to the divestiture
sities, has now engulfed proponents. The leader of the protest
ichigan Univesity in there is a reverend, and the 70
where eleven persons protesters included professors and tax-
last week. paying citiizens as well as concerned
arrests followed the students. The Washtenaw County
ceful and orderly demon- Coalition Against Apartheid may well
he legitimate right to be learn a lesson here, and attempt to
self an unfortunate set- broaden their own base to include
divestiture cause. The more faculty and staff members as
s resorted to the same well as more representatives from the.
lence dissent that the voting, tax-paying community.
'gents used last March Third, the WMU protest tends to
n they sought a court or- provide a certainvindication for the
a mockery of the Open WCCAA's controversial tactic of
disrupting meetings in pursuit of their
rustees also invoked the cause. Such a strategy in general
about staying invested in should not be condoned, but in the
at deal with South Africa case of University holdings that help
e the proxy power as a prop up a murderous regime, the end
e social change. That outweighs the means. By using the
cates that the trustees of same tactic at Western, the divestiture
higan must have been proponents have demonstrated that,
s in intransigence from under these extreme circumstances
rsity Regents, since both and the justness of the cause, meeting
bbornly refuse to disruptions have become an unfor-
basic facts-that tunate last resort that will be used here
the most direct course and in Kalamazoo and on other cam-
economic pressure to puses until the cause is won.
white racist regime, and Last, the WMU divestiture protests
ortfolio by a University are most important because they
easure of identification provide divestiture proponents here
he most racist and op- with an important ally. The two groups
'nments in the world. here and in Kalamazoo must pool their
mains in the Kalamazoo resources and information, must con-
eeming victory for those fer on strategy and tactics, and must
ze divestiture as the now approach the divestiture dialgoue
arse of any responsible as a united front spanning two college
he fact that the debate campuses. And, if met by the same in-
npassed another college transigence and hardline positions, the
se to our shown should two groups that gather information
pon the Regents of this. together must not hesitate to protest
t there is a movement in together and, yes, disrupt meetings
n the country, and it is a together. That is the only course, until
at will not be satisfied all university students and taxpayers
rts and empty gestures. can cleanse their hands of the blood of
Michigan protest, in ef- South Africa's oppressed black
second front in the war majority.

NEW YORK (AP)-Arnold
Bernhard was worried.
The young Wall Street analyst
knew that his mother, like so
many other people in that heady
summer of 1929, was playing the
stock market.
HIS FIRM HAD just issued a
negative report on a stock in
which she had invested her
modest nest egg, and Bernhard
called her to let her know. "Ar-
nold, you have negative thoughts,"
she told him.
Those negative thoughts, as it
turned out, were nothing com-
pared to the economic disaster
that was soon to wipe out her
savings and thoseof countless
others, the Great Crash on Wall
Street, which ushered in a
Depression that would last nearly
a decade.
"The euphoria of the '20s is
hard to recapture. We really
believed we were going into a
new era of prosperity," recalls
Bernhard, who today, at 77,
heads a company that operates
the nation's largest investment
advisory service, the Value Line
Investment Survey.
"PEOPLE WHO thought they
were building their fortunes sud-
denly found out it was all an
illusion."
The next few days will mark
the 50th anniversary of some of
the landmark dates of that finan-
cial debacle:
-Oct. 24, "Black Thursday."
As John Kenneth Galbraith, in his
book "The Great' Crash 1929,"
described it, "the first of the days
which history-such as it is on the
subject-identifies with the panic
of 1929."
"MEASURED BY disorder,
fright and confusion, it deserves
to be so regarded. That day,
12,894,650 shares changed hands,
many of them at prices which
shattered the dreams and the
hopes of those who owned them."
-The following Monday, Oct.
28, when the Dow Jones industrial
average fell 38.33 points to set a
record that still stands.
-Oct. 29, when trading volume
on the New York Exchange
reached 16.41 million shares, a
staggering total in an era of

brokerage clerks working with
fountain pens at stand-up desks.
"TH1E- MOST devastating day
in the history of the New York
stock market," wrote Galbraith,
"and it may have been the most .
devastating day in the history of
Recalled today, the crash is,
commonly thought of as having
occurred within that brief
period-a sudden, unexpected
wave that transformed Wall
Street into a disaster area almost
overnight.
In fact, the 1929 decline was
spread over several weeks, and it
represented only a fraction of a
three-year slide that was to
obliterate 90 per cent of the value
of common stocks in this country.
FROM A SEPTEMBER 1929
peak of 386, the Dow Jones in-
dustrial average fell to just above
40 at its worst level in 1932.
A second big myth-the picture
of mass suicides by ruined finan-
ciers and speculators hurling
themselves from the skyscrap-
ters of southern Manhattan-also
fails to square competely with the
record.
As several writers on the sub-
ject have noted, government
figures on suicides for the period
show only a gradual continuation
of a rising trend that had begun
some years before.
Butythere were some grim
cases, given headline treatment
by the newspapers of the day.
"I SAW THREE suicides,"
remembers Henry M. Watts Jr.,
who bought his seat on the: New
York Stock Exchange in the
spring of 1929 and still commutes
almost daily from Philadelphia to
-hisoffice on Broad Street next to
the exchange. "I saw one guy
land on top of a cab, and it wasn't
very pretty."
What caused the Crash? Afiter
half a century the debate is still
going strong.
Some theorize that investors
somehow began to foresee, in the
waning days of 1929, the collapse
of business, the bank failures and

the bread lines that were in store
for the country in the 1930s.
The stock market, after all, has
a long-standing reputation as a
mechanism that anticipates what
will happen in the economy
before even the best professional
forecasters cai figure it out.
BUT THERE had been signs of
softening business conditions for
several months before the crash,
and throughout the summer that
bull market raged on anyway.
Even after the crash was well,
in progress, there were many
people who were convinced it was
only .a temporary interruption,
like numerous other "shake-
outs" that had hit the market on
the way up.
Bernard readily acknowledges
today, "I shared the feeling at the
time that this was a panicky
reaction that would soon pass."
WATTS NOTES that at first it
was an "exciting, exhilarating
experience" for-. a young,
newcomer to Wall Street. "Even
the wisest of us in those- days
didn't know how bad it was going
to get."
In the book "Only Yesterday,"
which is regarded as basic
reading for any student of the
crash, Frederick Lewis Allen
concludes that it was a huge
buildup of speculative stock
market credit-margin loans
piled on margin'* loans-that
created what came to be known
as Black Thursday.
"Where on earth was this
torrent of selling orders coming
from? The exact answer to this
question will probably never be-
known.
"BUT IT SEEMS probable that
the principal cause of the break
in prices during that first hour on
Oct. 24 was not fear. Nor'Was it
short selling. It was forced
selling.
"It was the dumping on the
market of hundreds of thousands
of shares of stock held in the
name of miserable traders whose
margins were exhausted or about
to be exhausted. The gigantic

By Chet Currier

editice of prices was honeycombe
with speculative credit and was
now breaking under its own
weight.
"Fear, however, did not togg
delay its coming. As the price
structure crumbled there was a
sudden stamped to get outfrom
under."
FIFTY YEARS later, the stork
market still seems to be is
creature of ilternating waves'I
fear and greed. Ea'rly this month,
the Dow Jones industrial average
soared to its highest level in more
than a year, then took a nasty
drop of more than 58 points in ,a
week.
Thought that decline was ar-
ple compared to the wave that
swept over the market 50 years
ago, 'it had peple -asking a
;familiar question: Coul
something like the 'Great Crash
happen again?
Measures have been taken, Of
course, to try to prevent
recurrence of anything like it ln
1929, there was almost no
regulation of margin loans; little
disclosure by companies of in
portant financial informatir,
and a free wheeling atmosphere
in which organized pools of
market players routinely
maniupulated stocks,
Today the Federal Reserve
regulates and limits 'margiO
borrowing, and the Securities anrd
Exchange Commission, whiq
did not exist in 1929, is charged
with the task of overseeiql
proper disclosure and keeping
manipulators out. '
"The exchange in .4929 was
glub, in which five to 10 men did
tated to Wall Street exactly wha
would happen," Watts says
"Today the policies are set
elsewhere, and it is not a clubit
any sense.
With all those differences, he
was asked, could the Great Cras
repeat itself?
'It's been my, experience tha
these things happen in some wav
you don't expect," he replieT
"Things have been set up so tha
1929 won't happen again. But
maybe someday we're going t
discover that there's hell to pa
for some entirely differeli
reason."

Letters to

The Dail y

i

To the Daily:

Mr. Hayden espoused the

for a more feasible alternative

9
was in the sneaker's vocabulary.

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