A Fair Share of Trouble

The theme of the New York World's Fair, displayed on everything from the memo pads of its officers to the Unisphere, is "Peace Through Understanding." But peace and understanding theoretically begin at home, and there has been precious little of either among the fair's top officials. Last week five of the nine Manhattan bankers in the fair's finance committee resigned, charging that they were kept ill-informed about the fair's finances and implying that the fair is in financial trouble.

"By remaining on the committee," said Committee Chairman George Moore, president of the First National City Bank, "we would permit the implication that the fair is in satisfactory financial condition." Actually, said Moore, whose bank has a $6,000,000 stake in the fair, the fair will need "several million dollars" to pay expenses before it can even reopen on April 21. Moore was joined in his walkout by a prestigious cast: David Rockefeller, president of the Chase Manhattan Bank; William S. Renchard, president of the Chemical Bank New York Trust Co.; Dale E. Sharp, vice chairman of Morgan Guaranty Trust Co.; and William H. Moore, chairman of Bankers Trust Co.

Through Different Lenses. In a blistering, six-page letter of rebuttal, that longtime master of invective Robert Moses, president of the World's Fair Corp., defended the fair's financial soundness: he also accused George Moore of "sabotaging" the fair, of lacking "understanding" of its problems and of having advocated the very policies he criticized. Obviously, Moses and the bankers who differed with him saw the fair through different lenses--but then the World's Fair Corp. is an unorthodox corporation. Formed in 1959 by five New Yorkers as a nonprofit corporation, it runs the first fair in history that aims to earn a surplus on its investment; most of the others have lost money.

The World's Fair Corp. got started by floating $30 million worth of 6% notes to 400 U.S. companies and banks, later got an advance loan of $24 million from the City of New York to improve the Flushing Meadow fair site. Counting on accumulating in the fair's two years a surplus of more than $53 million from admissions, concessions and leases (after paying its debts, the fair would donate any remainder to education), its officers were disappointed when the first year's surplus proved to be only $12.6 million. Worse yet, the finance committee suspected that even this figure was inflated, called in an independent financial consultant. The information he compiled increased the committee's suspicions and led to its demand for certified financial data. Last week Moses admitted that the fair will have to raise $3.5 million before opening day. This year he plans to hike the admission fee from $2 to $2.50.

High Prices. Moses is taking a chance. The major cause of the fair's financial problems was that 1964's paid attendance of 27 million was fully 13 million less than fair officials had predicted. Exaggerated reports of New York hotel-room shortages and racial disturbances during the summer discouraged some out-of-towners, but most of the fault lay with the fair itself. Many exhibits were still under construction when the fair opened. Prices for food, transportation and entertainment were often too high, a fact that served to increase the size of the mile-long lines in front of free exhibits. Moses' commandments decreed high rents, high maintenance costs. Four shows, the Top of the Fair restaurant and the Transportation Pavilion went bankrupt, and many exhibits sank deeply into the red.

Moses is collecting $100,000 each year for seven years for his presidency of the World's Fair Corp., and three of his top aides draw between $35,000 and $45,000 annually--salaries reasonable enough for the officers of a large corporation. But Moses allowed the fair staff to burgeon unrealistically, and costs skyrocketed. Moses tacitly admitted the situation last October by slashing the permanent payroll. He promises a "new and brighter show in 1965," says of the present crisis that "we have survived worse weather." Nonetheless, the forecast for the fair in 1965 remains cloudy.

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