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Lethbridge Herald, The (Newspaper) - April 2, 1973, Lethbridge, Alberta 4 THE LETHBRIOGE HERALD Monday, April 2, Storm signals on trading horizon By Maurice Western, Herald Ottawa commentator Police-community interaction A police force exists to serve a community. In order to improve its service a force needs to hear from the people it seeks to serve. Accord- ing to Lethbridge Police Chief Ralph Michelson, communication is all one way. Almost no reaction is registered publicly to what the police do or fail to do. Some time ago letters were mailed to Lethbridge citizens who had registered a complaint with the police. The recipients were asked to report on whether they were satis- fied with the way their concern had been handled and to offer suggestions for improvement. Only one person re- plied. Not much guidance can be gained from that kind of a response. The suggestion that a cross-section of the community meet in conference with members of the police force for an exchange of ideas could have merit. Already an exploratory meet- ing in this direction has been held in Lethbridge under the sponsorship of The Canadian Council of Christians and Jews. This is the organization responsible for the promotion of Brotherhood Week each year and which is interested in fostering good community relations in every possi- ble way. It should be noted that the CCCJ ex- ploration takes in a broader spec- trum than just the police force. The focus is on the administration of jus- tice which means that lawyers, judges, law makers, and people from a variety support services should be involved. Whether further exploration on this kind of conference will take place and the form of the interchange, if it does take place, is as yet undeter- mined. The police chief, for one, would welcome something of this nature. It could give him some of the feedback that he wants and which has been so hard to get to date. Meanwhile an interesting experi- ment has been going on, probably almost unnoticed by the citizens of Lethbridge. Policemen, individually, are walking leisurely through resi- dential areas- By being out of the pa- trol cars and thus accessible to peo- ple it is hoped conversations might take place which could be fruitful for the force. This is an opportunity for people to visit over a cup of cof- fee in the kitchen or while leaning on a rake in the yard. The police are thus indicating an openness to the community; reaction from the community is warranted. The price of fashion Bowing to fashion trends can be an expensive practice especially if the latest fad is leather. Prices of many leather goods rose between 40 and 80 per cent this past year and are expected to rise as much again in the next few months. Manufacturers are paying for boot leather that sold for 58 cents per square foot a year ago. Garment leather during the same period rose from S1.25 per square foot to Increased leather costs result from a diminished export market in Ar- gentina and Brazil, suppliers of one- third of the world's hides, where ex- ports have been cut to build up herds by hoof-and-mouth epide- to develop their own pro- cessing industries. The trend-setters who brought full- length leather coats and knee high boots into vogue are creating the de- mand for leather at a time when an effort is being made to hold the line. Fashion trends demanding Canadian and U-S. hides have created sharp price increases at the pre-tanning level in the industry. In one variety of hide the price rose from 11 cents to 38 cents per pound in three months. Manufacturers and wholesalers who must catalogue their goods months in advance are reluctant to place large orders for leather with tanners re- quired to buy hides on a week-to-week basis. While these prices persists they will keep their inventory to a mini- mum. Not all leather products have in- creased in price as rapidly. Wallets and purses, in which labor costs more than material, have remained rea- sonably stable. Replacing leather with synthetic fabrics in luggage and its use in women's and children's shoes is helping to hold prices down. Continued development of synthetic products, plus rapidly changing fash- ions is expected to bring the ram- pant price of leather under control. But it's too far away to help the con- sumer this year. In this age of affluence people de- mand leather over synthetic products because they like its genuineness, its durability and its texture. It is ex- pensive, but leather is available if people will pay for it and it looks as if they will. ART BUCHWALD Binding the ivounds WASHINGTON After every war you must have someone to bind the coun- try's The man in the Nixon ad- ministration in charge of binding wounds is Dr. Friedrich Feldkamp who has his of- fices and operating room in the basement of the White House. Dr. Feldkamp was gracious enough to see me between operations. "How are you doing, "It's very he said. "I would have no trouble binding the wounds if it weren't for 'Them.' "Who are "You know very well who 'They' are." Dr. Feldkamp said. "The ones who wanted us to bug out in Vietnam. The ones who refuse to give the president credit for achieving a peace with honor. The ones who are demanding amnesty for the draft- dodgers and deserters. How can I bind the wounds of the country when 'They1 keep attacking "You're a I said. "Surely you can figure twt sosie way of binding the wounds of the country in spite of the dif- ferences of opinion.'" "It takes two parties to heal wounds. Why should we bind the wounds if 'They' won't" Dr. Feldkamp replied angrily. "Frankly, everyone in the Wiite House is sick and tired of Them' saying the presi- dent should bind the wounds of the coun- try. If 'They want io say they're sorry, and arc willing be punished for Iheir mistakes, then we'll be happy to bind their wounds. But v-c MX; nt reason to waste band- ages and Mcronochrome on those who are always complaining about what's wrong with this country, and never standing up for the Flag." "I am very sympathetic with your po- I said, "but it seems to roe the binding of wounds after a war has to come from the top. If you people refuse to bind the wounds, they will still be there." "I would like to remind you." Dr. Feld- kamp said, "that we didn't make those wounds. If They' had kept their mouths shut, the war would have been over four years ago. 'They' opened the wounds so, by gosh, let them suffer for a while." "If you're not willing to bind those wounds, what wounds are you willing to "We'll bind any wounds in the country providing 'They' say we -were right in what v.ie were doing that there rn other way of it tnd if we had to do it again, these who disagreed with us would support us. That's what the president calls 'going exlra mile." The dcor opened and the nurse rushed in. "Doctor, we have a bad wound outside. It has to do with reparations for North Viet- nam. The people want to know why sending blood to.Vietaar.. when so many people are bleeding at home." "I can't bind tr-a! the doctor said, "unless we raise taxes, and we're not about to do that." The nurse walked out and Dr. Feldkamp said to me. "Everyone exports miracles." "Doctor, thrrc are some poopfe who feel that rather than bind wounds, the White House is openins a lot of them to keep the country divided. Is there any truth to The doctor slammed his fist on the table. "That's typical of what defeatist, anti-bombing bug-outers would say. And un- they publicly apologize for "this slan- der, we're not going to heal any more wounds around here." "That's a strange altitude for a medical doctor to I said. "Who said Tm a medical Feld- kamp replied. "I'm an electrical engineer on Ifjan torn Uf Comrmltce for the Ke- Elcdion ol Use OTTAWA Canada, as a trading nation, is heading into an extended period of thor- oughly unsettled weather. This is the general reading of the Trade Minister, Alastair Gil- lespie, as it emerges from his interesting speech last week to the Montreal branch of the Ca- nadian Chamber of Commerce. Although our convetitive po- sition has been improved for the moment by the recent changes in monetary values, Mr, Gillespie recognizes some rather ominous storm, signals. In respect to the European Eco- nomic Community, he has two particular concerns; the com- mon agricultural policy, which effectively limits our exports, and the proliferation of special trading arrangements with Afri- can and Mediterranean coun- tries, which weaken the "Most Favored Nation" port i n g non-discriminatory trade. On this side of the Atlantic we are threatened by an unwel- come growth of U.S. protection- ism. Mr. GiDespie fears that the two trends may reinforce each other; that is to say U.S. pro- tectionist sentiment will become "stronger and more respect- able" if the Americans fail to gain access to the European agricultural market and1 con- tinue to run huge merchandise deficits in trade with Japan. In this none-too-encouraging situation, the Canadian Govern- ment is pinning its best hopes on the GATT negotiations, to begin this year. Preparatory work has been going on since 1988; much of it concerned with the identification of non-tariff barriers. More than 800 have been listed, of which over 100 are impediments to our own ex- ports. A GATT committee has been assigned to set guidelines for negotiations, such as the depth of tariff cuts and the non- tariff barriers to be tackled. Mr. Gillespie could not be ex- pected, at this time, to forecast the shape of the U.S. Trade Bill as it will eventually emerge from the Congress. For that matter we do not yet know what the Canadian position in negotiations will be although the Minister does say that the Government is seeking a bal- ance, with the emphasis partly on tariffs and partly on non-tar- iff barriers. Commenting on the earlier Kennedy round, Mr. Gillespie observes that this resulted in "a major across-the-board reduc- tion in industrial tariffs of de- veloped countries." Evidently we had not reached that status in the '60s for Mitchell Sharp, then our Minister, successfully insisted that our position is uni- que and won the right to negoti- ate on a different basis. It will be of interest to see whether our attitude in this regard has changed and whether, if it has not, our peculiar problems con- tinue to be regarded with un- derstanding by the trading world. There is bound to be some cu- riosity in this matter for there is a certain ambivalence in the outlook of Mr. Gillespie's de- partment which seems to be re- flected in the Minister's speech. Among the items of good news reported to the Chamber is, as already noted, an improvement in our competitive position. Mr. Gillespie, spelling this out, says "Well, we did conclude unanimously that the reason for high food costs is exorbitant prices The demise of the almighty dollar By Dr. I. J. Adel-CzlowiekowsH The recent devaluation of the American dollar and the float- ing of major European curren- cies revealed an acute and by no means temporary crisis in the international economic rela- tions. As a matter of fact, be- ginning with the scramble for gold in Marchh 1968, the in- ternational monetary system went through a series of minor and major tremors af increas- ing violence and frequency. It is rather surprising, that not- withstanding its glaring defi- ciencies, it is still operating without a fundamental overhaul which has been long overdue. Whenever the crisis occurs the international bankers, those sinister gnomes from Zurich, and a cohort of monetary ex- perts hurriedly get together to rescue the dollar, or the pound sterling, as the case may be, from utter collapse. They ar- range for monetary swaps, or issue new batches of the SDKs they adopt crawling pegs or suspend convertibility into gold and invent various other most ingenious devices which only bewilder the lay public, but ac- tually solve very little. Despite the aura of secrecy de- liberately heightened by the use of atrocious jargon, under- standable only by the initiated few. there is nothing particu- larly mysterious about the ternational monetary system, that could not be grasped by a person of normal intelligence. Let us try to dispel a little the obnoxious petty-fogging that ob- fuscates the subject and see clearly the issue as it really is. The foundation of the present monetary order had been laid by a conference at Bretton Woods held in 1944. This con- ference established the Inter- national Monetary Fund, which is a pool made up of gold and various national currencies to provide a stock of international 'An fw kidding? We want o 'tfogff bog'. At Jfcesc prices, we'll bare a 'PtOPlf reserves on which member coun- tries might draw, when in need. It also devised a mechanism for maintaining stable exchange rates of national currencies in relation to the American dol- lar, whose value was in turn fixed in terms of its gold con- tent. If a certain country suf- fered from a persistent deficit in its foreign accounts, it was allowed to adjust the rate of exchange of its money with- in the 10 per cent limits: an al- teration beyond this figure re- quired approval of the IMF. In this way the fund helped main- tain exchange rate stability by preventing frequent and unjus- tifiable exchange rate changes which upset the flow of inter- national trade. As long as there was no per- sistent disequilibrium in the balance of payments of the trading countries, Uie Bretton Woods system operated relative- ly well. This, however, has not been the case. There were first massive trade deficits between Europe and the United Stales which caused a severe dollar shortage. By the end of the 1950s the dollar shortage gave way to the dollar glut as in turn the United States experi- enced balance of payments de- ficit caused by the considerable outflow of capital investments to Western Europe and Canada. At first it was believed that the unbalance would SOOT dis- This was of course an illusion, because, contrary to the countless assurances of 1he American government, the U.S. balance of payments remained in the red ever since 3958. In recent years the deficit, grew from bad Jo worse. Between 1965 and 1970 the deficit aver- aged 4 billion, jumjxxi to W.7 trillion HI J970 and then reached the total of over billion in 1971 when the U.S. ircurred a deficit in its mer- chandise trade for lime since Last year this commercial deceit far Ircm ds- cneasing has considerably aug- mented lo reach billion, des- pite the devaluation of the dol- lar in December 3973. Alarmed by this inaijspicioiis ricvc.opmcnt Ihc American Con- gress nas recognized what for a long time obvious to ev- erybody that the U.S. dollar had been overvalued. Thereup- on President Nixon suspended the convertibility of the U.S. dollar into gold and imposed a 10 per cent surcharge on im- ports. This action was of little nelp. In December 1971 a Smithsonian agreement was concluded in Washington in which the dollar was devalued by nine per cent by an increase in the price of gold from to per ounce, while the cur- rencies of West Germany and Japan were revalued upward by 13 to 17 per cent respective- ly. This, however, was not the end of the U.S. dollar descent into, the limbo. Last February the dollar was still more devalued, and a massive flight front the dollar to gold and other cur- rencies took place, which forc- ed the closure of the interna- tional money markets. In the wake of this new crisis six West European countries aban- doned fixed exchange rates, and. like Canada in 1970 decid- ed to float their currencies in relation to the U.S. dollar. This scries of moves seems to be siniply a stop-gap an ad hoc arrangement. They did not and could not resolve the more fundamental and long-term problem of reform of the ailing international monetary system. What remains to be settled is the future rote of the U.S. dol- lar as a key reserve currency, UTC role of gold and the status of the International Monetary Fund. These questions will be ait the centre of the cpmmg in- ternational commercial and monetary conference. that imported automobiles from Germany have "increased sub- stantially in that "ear- lier increases in the prices of Japanese cars will no doubt be followed by further increases; and that, in his expectation, "cars made overseas for dis- tribution by the "Big Three' North American manufacturers will also go up in price." Thus continental manufacturers, who are not to increase prices for the 1973 model year, will have a larger share of the American market and this will contribute to the objectives of the Canada- U.S. automotive agreement. It may be noted in passing that this is not news with ob- vious appeal for small car pur- chasers, who considerably out- number the fortunate manufac- turers. Nor will their tempers be improvad by a calculation of Ken Remain in the business col- umns of The Globe and Mail. la contrast to the protectionist United States, which taxes im- ports about 3.5 per cent of the retail price, our Government exacts levies to about 30 per cent. Part of the difference re- sults from U.S. repeal of the federal excise (which was lower than But there are other differences; here, taxes pyra- mid and import duty is levied en the wholesale price to a dis- tributor overseas whereas the American duty is on the manu- facturer's price with no mark- up. If the theory behind this is protectionist, it has been re- spectable in Canada for a very long time. In respect to Europe our grievance concerns agriculture; in respect to Japan, it is the op- posite. While there has been re- markable growth in shipments across the Pacific, Mr. Gillespie notes sombrely that "in quali- tative terms developments have been much less satisfac- tory." Only three per cent of our exports are finished goods. This is quite true and many of the complaints against Japa- nese practice are supported in the very objective, recent study of the Canada-Japan Trade Council. But there are also faults on the Canadian side and the prospects, as revealed in that report, are far from dis- couraging. Japan, growing at an incredible rate, is expected to achieve the status of an eco- nomic super-power by 1984. Imp- orts are expected to at a very high rate with a pro- nounced shift in the mix of commodities purchased. The study includes both optimistic and pessimistic projections. On favorable assumptions, the Japanese import market for manufactures would reach billions by 1985, with Canada's share about billion. Even on the conservative forecast, it should exceed S3 billion. Any actions on our part which would jeopardize such develop- ments would be most unwise. Mr. Gillespie foresees that an issue of "safeguards" will emerge as a troublesome ele- ment in GATT negotiations. What rules should prevail? It is an area, he suggests, with which trade negotiators are largely unfamiliar; unexplored territory. Perhaps there is a de- g r e e of over-simplification here; certainly Parliament in recent weeks has heard a great deal about the "safeguards" in the automobile agreement But many of the questions posed by the Minister are highly per- tinent; for example, should gov- ernments be entitled to make unilateral judgments that safeguard measures are neces- sary or should they accept the rulings of some international body? For the great advantages of trade liberalization, there will be a price, Mr. Gillespie warns, "in terms of reduced projection for thwe industries which are not internationally com- petitive." What he offers, in this regard, is a set ol policies to militate adverse impacts. The Government might also minimize future problems by adopting a more critical alti- tude towards (he subsidization of new (IT expanding: industries offering various short-term ben- efils but likely Jo become inter- nationally and thus candidates for further and endless mitigatory subsidies. This has not been a popular subject of study in Ottawa but it certainly sihould be in view of the accumulaliif! problems which Mr. Gillespie discerns on Ibe trading horizon. The Lethbridge Herald SM 7th St. S., tettfflndgc. Alberta LETHBRIDGE HERALD CO. LTD Proprifiors and Published 1905 1954, by Hon. W. A. BUCHANAN Second Class WWl RegJstreiicm No 0012 Csngsian Press ana Oslty TNl AwJH Bureau of OLEO W MOWERS, Editor PUblls-hw THOMAS H, ADAMS, Msnsoe-r OOH P1U.1NS WIL1.1AW HAY Editor AtsocWs tatter Mvrrtlstnj Manager KdHcrig) Etfrtur "THE HERALD SWVES THE SOUTH" ;