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.