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Daily Freeman, The (Newspaper) - October 17, 1975, Kingston, New York THE WEATHER: Cloudy, Rain Temperature: Max. 59, Min. 39 City of Kingston, N.Y, State CSEA Report Praises City Commission Story, Page 5 The Newspaper for Ulster County and the Surrounding Area VOL. CIV-No. 306 FRIDAY EVENING, OCTOBER 17, 1975 PRICE 15 CENTS DAILY, 30 CENTS SUNDAY Only A 'Miracle' Can Save New York NEW YORK (UPI) New York City, battling for months to avoid default, had million in debts due today but not enough money to pay them. "Only a miracle will save said City Council President Paul O'Dwyer. "and I don't expect that miracle." Urgent phone calls were placed to the White House, the Treasury Department and the Federal Reserve Board as Mayor Abraham Beame fought to stave off default. "I called the White House to inform the President of the change of said a weary Beame early today. "He was asleep, but we left a message with the officer on duty." White House officials told Beame that Ford was aware of developments. The crisis worsened Thursday night when the trustees of the city teachers' retirement fund refused to reaffirm a commit- ment to put million in pension funds into a billion state plan aimed at keeping the city from default through the beginning of December. "This action, if not reversed, will place the city in imminent jeopardy of Beame said. Other meetings were scheduled later today in hopes of reversing that decision. The city is unable to raise sufficient cash on its own because major banks, unhappy over the city's fiscal policies, have refused to extend additional loans. After the trustees' vote, the mayor met with city officials and a law firm retained to advise the city on the consequences of default "to implement action if necessary to assure the "continuity of essential city services." City and state officials, in a report prepared several weeks ago, forecast a series of severe consequences of default, including unrest by persons on welfare who failed to receive subsistence checks and strikes by unpaid city employes and, ultimately, a default by New York state. In addition, there have been forecasts of a national and international monetary crisis resulting from a New York City default. 'I CALLED THE PRESIDENT' ABRAHAM BEAME Mayor, New York City Asked about other sources of quick cash, the mayor said, "At this point I don't know of any other sources. Unless that (the trustees' decision) is reversed, the city will be in a defaulting position." In other developments: The executive board of the Central Labor Council, an umbrella group representing 1.2 million union workers in the city, voted unanimously Thursday not to endorse any move by city employe unions for a general strike as a protest against additional envisioned layoffs. Deputy Mayor Kenneth Axelson called the Treasury Department today seeking a 90day. S150 million loan money to make up for the missing teachers' pension investment. Officials of the Municipal Assistance Corp., the state agency created to help the city avoid default, contacted the Federal Reserve Board to advise it of the proceedings. Meanwhile, in Albany, The state's highest court today unanimously upheld the right of the state comptroller to invest million from state employe pension reserves in state notes to help rescue New York City from default. The decision by the Court of Appeals came only hours before the comptroller planned to complete the controversial trans- action. Comptroller Arthur Levitt had proposed the transfer of funds to provide the state with cash to fend off default by New York City on million in maturing notes. A ruling by the Court of Appeals supporting Levitt's right to make the investment was viewed as critical to the success of a billion financial arrangement to provide the city with operating cash through early December However, city officials were trying desperately Thursday to raise another million in private funds needed to trigger the state loan to meet the note obligation. Levitt had previously revealed that the pension funds transaction would be at a record high interest rate of 8.875 percent, with the interest charge to be passed on to the city. The previous high rate for state borrowing was 8.70 percent, negotiated by Levitt on a similar notes sale to an underwriting syndicate of New York banks Sept. 15. "The Court of Appeals argument to block the note sale was offered by a lawyer for the Westchester County chapter of the Civil Service Employees Association. The CSEA local sought to have Levitt removed as trustee of the billion retirement system and barred from making the investment. Arthur H. Grae, attorney for the CSEA chapter, contended that Levitt was placed in a conflict of interest position as both overseer of the pension fund and state comptroller because he served as both buyer and seller of the notes. The Police Conference of New York State Inc had partici- pated in the suit through the Appellate Division stage, but had not appear before the high court because it had failed to file a motion to appeal in time to participate in the final arguments. Area Lottery Sales Reported Down THE NEW YORK GAME OCT 16 75 ACCT. NO. DATE 066537 DBL. TICKET NUMBER By Hugh Reynolds KINGSTON "Some people are not going to buy and some people are going to buy less." That reaction from Norm Sherry, proprietor of the Broadway News Shop, the city's major outlet for lottery tickets, was fairly representative of vendor reaction following revel- ations that the state had in fact been playing with a different set of rules with what it 'calls "The New York Game." It was learned this week that it really didn't matter if all the tickets on any given lottery were sold or not: the state threw them in the hopper anyway with the reported result that "the state" was the winner in 17 major drawings, on million in "winning" tickets that were never sold. "Some of the customers are angry about says Sherry, whose Broadway store sells about tickets a week. "I don't blame he adds. Sherry figures his sales are off "30 maybe 35 percent this week." In Ellenville, it's a some- what different story. "Peo- ple are complaining realiz- ing it's a gyp but they're still buying says Mai Milton of the Ellen- ville Corner Store. See Editorial on Page 6 Milton says he sells about 400 lottery tickets a week (the vendors receive three cents a ticket) although he doesn't see any significant change yet "It's down a little he said. Up in Saugerties, it seems to be business as usual at the Paramount Pharmacy as far as the lottery is concerned. "I don't think there's been any said Don Vourg. "People are still buying them. It might have dropped off a little but it's not any great amount." Paramount sells about 100 lottery tickets a week. Back in Kingston, Jack Williamson, proprietor of Jack's Stationery Store on Broadway (formerly appears philosophical about the whole thing. "We're not getting that many sales says Williamson. "I think I sold four yesterday." he sells an average of 50 a dav. Williamson said he was "really shocked" although he indicated he didn't have a great deal of faith in the system to begin with. "I always thought there was something wrong with he said. "I wasn't sure until I saw it in the paper. With Watergate and all. anything can hap- pen in government." And finally, "1 think it'll be temporary. They'll forget about it just like everyting else." The owner of the Broad- way News Shop thinks dif- ferently. "They have to come up with a new lot- says Sherry. "They have to get some of those characters out of there and get someone who knows what they're doing and give the people what they want. That's it in a nutshell." A Year Later Murder Still Unsolved THE VICTIM SOUGHT By Matt Spireng ELLENVILLE State police are seeking an unidentified young Puerto Rican man for questioning in connection with the grisly slaying nearly one year ago of 16-year-old Diana L. Schoonmaker. The man, who police say was seen in the company of the dead teenager some hours before her body turned up at the Ellenville landfill site, is not necessarily a suspect in the still unsolved murder, according to investigators. "We are attempting to identify the male seen with Diana in an effort to further trace her activiites prior to explained Ellenville State Police Senior BCI Investigator James Fitzgerald. Authorities have released a composite photograph of the man. According to Fitzgerald, the gap between the time Diana's body was found at the landfill site and the time she was last seen alive has been narrowed to hours. It was at about 11 a.m. on Friday, Oct. 18, 1974 that an Ellenville employe working with a bulldozer at the landfill site spotted an arm protruding from a cardboard drum at the bottom of a hill of trash. At first he thought it was a mannequin. It was not. What the workman discovered was the body of the Napanoch teenager. She had been stabbed numerous times and her throat had been cut from ear to ear in what Fitzgerald describes as "one of the most vicious, brutal homicides ever to occur in Ulster County." For nearly a year, state police have poured thousands of man- hours into their attempts to trace Diana's whereabouts prior to the discovery of her body and to identify and capture her killer. According to Fitzgerald, investigators have now traced Diana to Greenfield Park, near Ellenville, where at about p.m. on Oct. 17, 1974, she was seen with the young Puerto Rican male. While finding the man might not bring on an immediate solution to the murder, it apparently could help narrow the time gap police are seeking to close. Police are also still seeking to find the murder weapon and the actual scene of the bloody killing. "We don't believe the dump was the murder scene as there was very little blood there and the body was almost completely drained of one investigator said shortly after the discovery of the body. Investigators have also not been able to trace the drum in which the body was found. One official explained that they are not even certain whether the body was brought to the dump in the drum or placed in the drum at the dump. During the course of the lengthy, demanding investigation there have been several suspects questioned, and numerous polygraph (lie detector) examinations have been conducted. At one point, Paul John Knowles. 28. who has been linked to a cross-country spree of murders that claimed at least 20 'lives, was considered a strong suspect in the Schoonmaker killing. But he has since been virtually ruled out, according to Fitzgerald. Knowles was killed last December during an escape attempt in Georgia. He has been linked to the Oct. 16, 1974 murder ol a Connecticut housewife and her daughter near Hartlord. He was believed to have passed through the Ellenville area between then and Oct. 18, when he was reportedly in Georgia One of the major thrusts of the investigation now is apparently to trace Diana's whereabouts after p.m on Oc t 17, 1974, and toward that end authorities are asking amone with possible information to call Ellenville State Polite at 647- 5410. "We haven't by any means come close, we hope, to eliminating the potential chances of solving this Fitzgerald said. Police Raid Art Cinema HIGHLAND Search warrant in hand, Town of Lloyd Police and state police under the direction of Investigator Robert Ferrigan of the District Attorney's office entered the Highland Art Cinema Thursday night, confiscated two X-rated films and arrested the projectionist and cashier on obscenity charges. First Assistant District Attorney Michael Kavanagh said today that the raid wac'the result of about a month of investigation which he indicated came about as a result of public outcry in the Highland area over the theater and its showing of alleged pornographic films. The search warrant was issued Thursday night by Lloyd Town Justice Gary Palmer who viewed the double feature showing before issuing the warrant. There were about 40 people watching the film when police had the house lights turned up and began con- fiscating film projectors, the and "Sweet and in receipts. Arrested in the raid were the projectionist, Steve Cardinal, 51, of Newburgh, and the cashier, Gordon DePew, 59, of Highland. Both were charged with second degree obscenity, a misdemeanor, and were given ap- pearance tickets for a Saturday date in court. Further arrests are anticipated, according to Kavanagh. THE GRANIT HOTEL TM Meditates Purchase; Granit Leasee Unsure ACCORD A spokesman for the Granit Hotel in Accord said today that it is "doubtful" that the popular Ulster County resort will be sold to the Transcen- dental Meditation (TM) movement. "Negotiations were under- said Miriam Rosenthal, a Granit leasee, "but there appear to be matters that can- not be straightened out. I doubt very much if there will be a sale." Her comments were prompted by reports today that the Students Interna- tional Meditation Society, Inc. guides the worldwide Transcendental Meditation reached a tentaMve agreement with Granit owners to purchase the 320-room hotel. The reports indicated that the facility would be used as an advance instruction! center for the more than TM teachers located in the United States. Mrs. Ronenthal A'ould not elaborate on the details of the negotiations that apparently place between the Granit and TM representatives, nor would she comment on what roadblocks might have been encountered in the proceed- ings "Since some discussions are still underway, it wouldn't be she said. Since the TM movement is listed as a non-profit organiza- tion, its ownership of the hotel would remove the facility from the tax rolls in the Town of Rochester, and would likely reduce revenues raised through Ulster County's sales tax. "There's no doubt that the sale would hurt the tax- said Rochester Su- pervisor Wilfred Neff "We've already had far too many prop- erties taken off the tax rolls." The Gramt's assessed value is The hotel itself paid in property taxes to the town this year. Inside News Bridge........................... 25 Classifieds................. 22-24 Comics............................ 25 Crossword..................... 25 Editorials, Columns........ 6 Life Today.................. 10 19 Obituaries .......19 Sports..........15-18 Stock Market 20 Theaters 12 Weather 2 But Mrs. Rosenthal said :he possibility that thd town would lose tax revenues through the sale of the hotel to a non-profit organization was not a consideration during ne- gotiations The Grunit is currently owned by the New York Busi- ness Development Corpo- ration, a consortium of atate banks that purchased the fa- cility in May for SI.8 million after the former owners had filed for bankruptcy. Mrb Ro- senthal and three partners, all from New Jersey, have a lease agreement to manage the ho- tel In addition to the Granit, it was reported that TM repre- sentatives are also negotiating for the purchase of the 300- room Windsor Hotel in South Fallsburg (Sullivan and that a sale agreement has already been reached. TM already owns the former Waldemere Hotel in Sullivan County, and uses it as an academy for its instructors. The TM movement, led by Maharishi Mahesh Hogi, in- structs persons in the science of meditation, which is said to lead to a more relaxed and peaceful state nt mind and body The maharishi visited hin Waldemere lacilitins this week.
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