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Globe-Gazette (Newspaper) - January 27, 1966, Mason City, Iowa The newspaper that makes all North lowans neighbors HOME EDITION UOc a Section One MASON CITY IOWATHURSDAY JANUARY 27 19M PMM ruU LMM Wlru VOL 10S 301 isarm plan offered Economics ataglance WASHINGTON ffl Here are the major facts and figures in President Johnsons eco nomic report sent to Congress Thursday INCOME Demand and production booms should add billion to fiscal 1967 gross na tional income swelling it to a record billion EMPLOYMENT 25 million more Amer icans at work in 1965 unemployment rate dropped to 41 per cent by end of year pay of average man ufacturing worker gained 4 per cent last year total personal income in December was running at annual rate of billion up per cent over January 1965 rate profits after taxes were up 29 per cent last year and 67 per cent over 1969 earnings farm income rose record 23 per cent and smallbusiness profits were up per cent FEDERAL RECEIPTS billion in 1965 state receipts were up billion BALANCE OF PAYMENTS Reduced to less than half of that in 1964 and 1963 LBJ Keep pay hikes at 32 By NEIL GILBR1DE WASHINGTON UP President Johnson warned business and labor Thursday that irresponsible wage price hikes would jeopardize the nations strong econ omy and possibly lead to stiff federal restrictions He said in his economic message to Congress that it is vitally important that both unions and industry To reduce portion of tax bite Johnson Economy is bright Miracle will remain in 1966 WASHINGTON AP Presi dent Johnson said Thursday the nation has achieved the ability to ward off recessions hold booms in bounds and keep an American economic miracle going in 1966 Johnson attached a condition to this glowing outlook Wage and pricedecisions by labor and business must be sound and responsible just as I am de termined that public decisions will be fully responsible Rest Korean If they are the President said the American economic miracle will remain in 1966 the single most important force in the economic progress of man This was in an 8000word message he sent to Congress along with the annual report of his Council of Economic Advis ers The report was a bit less exu berant in language than the message But sprinkled through hew to the line of White House guideposts limiting wage raises to 32 per cent with no price hikes A blow to labor leaders hopes in Johnsons message accom panied by a report of his Council of Economic was the failure to boost the guidepost figure to 36 per cent in line with latest national pro duction figures Im sure it has been and will Pholofax Members of the Korean 3rd Marine Battalion who had been battling the Viet Cong for several weeks near Tuy Hoa along the South Viet Nam central coast engage in a funpacked wres tling mixup in a rest and recreation break at their base camp They had been granted leave a few days before the lunar new year which also is a Korean holiday were both phrases of mism qualified here and sentences unvarnished and opti there be described rules in the as changing the middle of game said council Chairman Gardner Ackley in defending the administration for sticking to the 32 per cent figure We dont regard it that way at all he said at a briefing on the Presidents economic re port The guideposts are based on the increase of productivity per man hour which averaged per cent the past five years 32 The guideposts state that wages can be raised 32 per cent without price increases or larg er profit margins for industry While conceding that the wage guidepost would be 36 per cent if 1965 figures were added and I960 figures dropped Ackley said We have never been wed ded to the fiveyear rolling av erage He also conceded that pre vious council reportshad used charts based on a moving five year productivity average but argued the text of the reports did not state them as a firm pol icy He said productivity gains cannot continue upward indef initely with tion nearing WASHINGTON AP Presi dent Johnsons proposal for graduated withholding of per sonal income taxes probably will be modified to reduce the bite on middleand upperbrack et paychecks before the legisla tion goes to the House floor This was the outlook Thursday as the House Ways and Means Committee resumed hearings on Johnsons tax pack age of which graduated with holding is a part Major compo nents of it are a reimposition for two years of automobile and telephone excise taxes that had dropped Jan 1 and a speedup in corporate tax collections Graduated withholding like the corporate tax speedup does not increase the amount of tax industrial produc full capacity and that 32 per cent was more in line with expected 1966 gains The administrations action appeared to grow directly out of a fear of adding inflationary pressures if the guidelines were revised upward Weather still in frigid zone Mason Cityans awoke Thurs clay after the citys llth night straight with a below zero mini mum The GlobeGazette instru ments in southeast Mason City and KGLOs downtown instru ments both recorded 10 degrees below zero at 8 a m Thursday The Mason City Municipal Air port instruments recorded 11 degrees below zero at 8 a m the minimum for the night North Iowa Weather outlook Mostly clear and colder Thursday night lows 13 to M below zero Friday partly cloudy and continued cold highs 2 below fo 6 above Weather on 2 paid It is designed to pvit col lections more nearly on a pay as you go basis so that fewer makeup payments would be required at the end of the year However the schedule pre pared by the Treasury and writ ten into the bill has come under fire on the ground it calls for too much withholding from higherincome taxpayers with the result that many of thesi wouldhave to apply for refund and would have money tied uj without earning interest Republican members of th committee first raised this ob jection A check Thursday ind cated substantial sentiment o the Democratic side also for ac TAX Please turn to Page 2 wjth a word of restraint or cau tion The forecasts are for more business more jobs more prof its more spendingand wha Johnson called a strong thrus of progress The President said Our na tions industries shops and farms our workers owners of business professional men and prosper today far be yond the dreams of any people anytime anywhere The President made some ther points Recessions are not inevita le We have learned how to chicve prosperity Our prosperity does not de end on our military effort Our defense needs are great Ut our growth is far greater In only seven other countries f the world is TOTAL output in year as large as the IN JREASE in our output last fear I am unwilling to declare a moratorium on our progress ovard the Great Society Expansion need not generate nflation Throughout the message and he economic report neverthe ess there was repeated empha Allies kill 91 Viet Cong SAIGON South Viet Nam Allied forces reported Thurs day 91 and at least 123 captured in their first sizable clashes since the end of the lunar New Year truce four days ago The South Vietnamese armys 9th Division struck the hard est single blow in a surpriseat tack on a Viet Cong training camp in the upper reaches of the Mekong Delta near the Cambodian border A government spokesman said 14 hardcore guerrillas were killed and 114 captured includ ing a training chief The govern ment troops also seized 117 sus pects many of them thought to be new recruits and a batch of weapons and ammunition The 9th Division carried off the strike Wednesday morning by sending a regiment of in fantrymen into the camp 80 miles southwest of Saigon while another regiment in armored persoaueLcaraarti UaakjatUjUfcC c n e m y retreat Government casualties were reported light A South Korean platoon pa trolling Route 1 the mainnorth southhighway bumped into a force of about 70 Reds Wednes day night hear Bong Son 275 miles northeast of Saigon In the fight 35 Viet Cong were killed two captured and two carbines seized while the Kore ans took only light casualties a spokesman said The US 1st Cavalry Airmo bile Division operating in the same coastal plains as the Ko reans reported 27 Viet Cong killed and 78 suspects and eight tons of Communist rice stores seized US Marines on similar mis sions outside the sprawling Da Nang military complex 380 miles northeast of Saigon counted seven Viet Cong dead anri thjpp Throo of the guerrillas were hit when the Leathernecks exploded gre nades in a large tunnel which also yielded three Soviet and two American rifles to 30 guerrillas caught a Leatherneck squad waiting in ambush 5 miles northwest of Chu Lai another Marine coastal base 50 miles south of Da Nang and inflicted heavy casualties a spokesman said Two Marines manning a checkpoint failed to return Wednesday night A patrol sent after them found they had been killed by the Viet Cong Several other Marines were wounded by Communist smallarms fire and mines in other patrols near Da Nang and Chu Lai The US 1st Infantry Division closed out an operation called Quick Kick 30 miles north of Saigon It reported one Viet Cong killed and four captured but said its big was the discovery of a primitive mine factory and arms dump The haul included seven Clay moretype mines which scatter shrapnel quantities of casing a 500pound bomb gunpowder and other explosives used for terror ist devices US air attacks concentrated on the Meking Delta Air Force pilots said their bombs set off three large explosions that shot flames and black smoke hundreds of feet into the air 85 miles southwest of Can Tho indicating a hit on a fuel storage dump The lunar New Year holiday Hanoi Radio announced that the Viet Cong had released 15 South Vietnamese officers cap tured last year sis on holding the line against nflation Johnson told labor and indus ry repeatedly and in various ways that it is vitally import ant for them to follow guide osts set out by the threeman Council of Economic Advisers leaded by Gardner Ackley Designed to keep wage and price increases with noninfla tionary limits the guidelines are pegged to increased produc tivity The council and it gets some arguments on this figures that increase at 32 per cent a year It specifically recommends sticking to that percentage and holding all boosts within that boundary Bar burial of war vet Communist WASHINGTON AP The Defense Department Thursday barred convicted Communist party leader Robert G Thomp son a decorated veteran of World War II from burial in Arlington National Cemetery The action was disclosed in a terse statement which said The decision followed a review Hughes to question tax commissioner DBS MOINES AP Gov Harold Hughes said Thursday he will talk to Tax Commission Chairman Lynn Potter about 3otter helping his wife ax service she operates in Cres Hughes said he didnt know if ic could meet with Potter some confirmed Tuesday has prepared lax re CO Potter that he turns for private customers as part of that service but said his wife is the one finally responsi ble lor completed returns Asked about Potters state ment the covernor told news men I fully intend to talk to Mr Potter talked with and him after I will I have have a statement Not before ime Thursday I dont think he is going to run off with the state treasury jefore I talk to him the gov ernor said Potter said he established and owns Potters Accounting Ser vice in Cresco but turned the business over to his wife when he was appointed to the Tax Commission in 1962 becauseit would not be legal for him to own the business while a mem ber of the commission Potter said there is nothing in the law that prohibits a tax commissioner from working for a private tax service ROBERT G THOMPSON His ashes are barred of the facts including an opin ion from the attorney genera of the United States The Pentagon said Thomp son who won the Distinguishei Service Cross for valor in th New Guinea campaign of Worl War II will not be interred i Arlinglon ccmelery Disclosure last week b Thompsons wife that he woiil be buried in Arlington Jan 3 caused a wave of protests from veterans organizations and in dividuals Two days ago the Penlago ordered the burial delaye pending a legal opinion from th Juslice Department Thompson died last at Ihe age of 50 He was en THOMPSON Please Torn to Page 2 Gen Taylor Wo reason to continue lull Thnlofax HOMES EVACUATED Firemen battle a series of fires which erupted in southwest Indian apolis forcing evacuation of a twoblock area The preclawn fires triggered by gas explosions de stroyed four homes and injured at least seven The area was evacuated after individual explosions in homes ruptured gas mains WASHINGTON AP Gen laxwell D Taylor a top advis r to President Johnson says reasons for continuing the ull in the bombing of North Viet targets are exhausted and we must keep the pressure n His declaration was viewed as ne of the strongest indications el that the United States soon vill resume its air strikes Taylor former ambassador to aigon who now is a presiden ial consultant on Viet Nam vas at the Presidents side night during a toplevel White House meeting with congressional leaders Less than 24 hours later Tay or told a New York news con erence that he felt the bombing jause was justified in spite o he obvious military disadvan lages We have shown friends and foes the sincerity of our peace ful purposes he said But the reasons for contin uing it are exhausted He said We must keep th pressure on unlil the olher sid decides that there is no chance of our breaking Earlier in Washington Secre tary of State Dean Rusk said o Capitol Hill that the Unitec States has carried its peace ef forts from A to Z and almos through Z Democratic Senate Lcadc Mike Mansfield who has op posed renewal of air attacks o North Viet Nam largets credit d Ihe President with having ccompiished at the Tuesday ight meeting the kind of con ultation with Congress that ome critics have bceri demand ng Sen JW Fulbright DArk hairman of the Senate Foreign MAXWELL TAYLOR keep pressure on 7 points to LBJ proposal Urges end to nuclear race GENEVA AP President Johnson fa r m a 11 y proposed Thursday a sevenpoint program to halt the spread of nuclear weapons The President acted in the face of escalating war in South east Asia and the possibility of acquiring atomic weapons by at least 10 nations in addition to the existing atomic powers In a message to the 17nation disarmament conference open ing in Geneva Johnson urged that the atomic arms race be stopped and that existing stock piles eventually be eliminated PopePaul VI also sent an ur gent appeal to the conferees to do their utmost to erase the spectre of war Johnson pledged to work for peace and disarmament even while our own nation is en gaged in necessary resistance to aggression in Southeast Asia We must press onwith our work in Geneva the Presi dents message said It is true that our meeting is shadowed by continuing aggression against the people and govern ment of South Viet Nam There are differences among the members of this conference on Viet Nam but these differ ences make our common inter est in preventing nuclear spread and curbing the nuclear arms race all the more im portant to pursue Johnson said he had instruct ed US delegate William C Foster to seek a wideranging program that eventually would pave the way to nuclear dis armament The sevenpoint pro gram calls for a treaty to halt the spread of nuclear weapons to nonnuclear countries de mands international safeguards over peaceful nuclear activi ties calls for the strengthening of international security organ ization and the establishment of asystem of inspections The Johnson proposal also seeks an international agree ment not to increase and in deed to reduce nuclear ma terials in weapons stockpiles It calls for a freeze on offen sive and defensive strategic bombers and missiles designed to carry nuclear weapons Finally ifsuggests explor ation of ways for nations to limit competition among them selves for costly weapons often sought for reasons of illusory prestige UN SecretaryGeneral U Thants representative deliv ered the Popes message at the resumption of the negotiations here Thursday It is becoming more and more obvious that no lasting peace can be established until there has been an effective general and controlled reduc tion in armament the mes sage said The talks resumed with a flicker of hope The United States and the So viet Union cochairmen and ma jor antagonists in the 4yearold discussions seem to have moved a bit closer to each oth er during the fourmonth re cess of the conference delations Committee who wants the bombing pause ex ended and Senate Republican Deader Everett M Dirksen who has taken no position on the matter have urged such consul tations Everyone present was ed and encouraged to give views Mansfield said in interview This was consulta tion in the best sense notjust briefing The President took under consideration everything that was said We were in at the takeoff in the formulation of a vital decision Dirksen added in a separle interview that it was the kind of consultation he advocates and we should have them more often Inside The Globe Editorials 4 Society news 67 Sports 910 CubGazette H Latest markets 12 Mason City news 1213 Clear Lake news 15 North Towa news 18 SAME
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