New York: A Painful Step Toward Solvency

Whatever the immediate peril — pow er failure or transit strike, water short age or race riot — New York City, like Pauline, invariably manages a third-reel deliverance before crisis turns to catas trophe. The city's latest ordeal, a dearth of funds that has threatened imminent, crippling reduction of municipal services, was averted last week as usual at disaster's doorstep.

For years, the nation's biggest city has followed a Micawberish routine of using reserves and loans to meet ever-rising operating costs. When Republi can John Lindsay took office in January on a clean-up-the-mess platform (TIME cover, Nov. 12), he immediately...