Lethbridge Herald, The (Newspaper) - August 23, 1971, Lethbridge, Alberta
4 THE LETHBRIDGE HERALD Monday, August 23, 1971 Joscpli. Krtifl Weep for them, too lii'iore Canadians jji'L I'uinplulcly can-in! away in bi'wuiliiif! llu; delc- Icrmus cfl'ocl of I he-, mmomic mea- sures rm'iilly laUcn by U.S. Presi- dent KiL-liard Nixon, Him- should be some consideraliiin .qivcn lo Hmsc arc uoinu I" be hurt (he the people ofthc developing nations. Some tears should be shed lor them, too. The 10 per cent siii'diarge on im- ports which C a n a ci i a n s arc most alarmed about also applies to the. developing nations. In fact, the ex- tent of Ilic impact of the surehage on them will be even greater, Ap- proximately 75 per cent of Canadian export trade to Hie U.S. will be ex- empt from the surcharge. Most cle- countries do not engage in the kind of I ratio for which the ex- emptions are provided. An added blow was given the de- veloping countries in that part of 1'residenl Nixon's prescription for the dollar crisis which calls for a cut of 10 per cent in U.S. foreign economic aid. Tins could have dras- tic effects on the poorest nations. Dollars are essential for the continu- ation of crucial aspecls of develop- ment programs which arc not ade- quately funded in many instances now, that is. before the new econo- mic measures were announced. Increasingly it has become appar- ent that national economies are sen- sitively related so that decisions made "in one place have ramifica- tions throughout Ihe whole interna- tional scene and especially when the decisions arc made by Ihe giants such as Ihe United Stales. l''or health in one place I here needs lo be rela- tive good hfiillli everywhere. More sickness in Ibe developing countries could have had effects on the U.S. economy jusl as would delibilitation of the Canadian economy winch is so closely tied with that of the U.S. The wealth of the Western World has in part come as a result of the exploitation of the so called De- veloping World. Even today, when most of the colonized nations have gained independence, there is a con- tinuation of the draining of their nat- ural resources to feed the voracious appetites of the consumer societies. The possibility that developing na- Hons might force out foreign inter- ests entirely has to be considered, with consequent reduction in stan- dard of living for people in the West follow ing. Provoc a 1 i o n for laking such action might well be found in the desperation that accompanies such dampening of economies as the U.S. has decreed for the developing world. Canadians are almost certain to experience a setback as a result of President Nixon's economic mea- sures. It will not be as severe as the shock that will come lo some other nations. But if some kind of uphea- val was lo take place in the develop- ing world, there could be a setback of unimaginable proportions. Summer time (in August 30 each Albeita citizen will be able lo pick up and mark two ballots, one for the election of his representative and the other on the matter of daylight saving time The fact that almost all the rest of North America uses summer fast time is not a compelling reason for Alberta to do Ihe same, although it is certainly an important considera- tion. The main reason for voting yes is simply one of convenience. The bes.t time 'of day in most of Alberta, al- most every day from April lo Octo- ber, is in the early hours of daylight. By the simple device of changing the clock, as the rest of the continent does. Albcrlans would enjoy one more hour of the dawn period, at the ex- pense of one hour of darkness Standard time is not made in hea- ven. It is a human device designed for the public convenience. Daylight saving time adds to the convenience. The human community lives by the clock. It must, at this stage in so- ciety's evolution. Daylight saving time, like standard time, is simply a lilJIc trick that enhances the con- venience so much. ART BUCHWALD Nothing like a club rrHK latest thing in flying is group dis- cuunt economy fares. It seems thai il you're a member of any kind of club which consists of 25 people or more, you get a group discount which can save you as much as a person on a trip lo Paris. Tn qualify for group your club must have been in existence for six months before your departure dale. It doesn't make any difference what the club is all about. Tliis latest, sales scheme 10 sell airline tickets is bound to make everyone even mere club-conscious than they are now, and many new clubs will be fornred just for the sake of taking advantage of the low fare. But because of this there can also be complicalions. Let us say some people in Hollis, N.Y, where I used to live, form a club called the Public School 35 Alumni Assn., and they get 25 members to join. They meet faithfully every week for six months, and now the day before their de- parture htia arrived. Everyone is very ex- cited, everyone, Dial is, except Dix- on. who has just informed the others thai, he has decided not to po A dclcfinli'iu is .sonI Hiuzy's hou.se, where he's sitting in the living room. "Buzzy, what's happened? Why aren't you "I don't like Sheldon." "For heaven's sake' N'obody likes Shel- don, but that's no reason to cancel out now." "Sheldon's always making fun of me at the meetings. In fact he always made fun of me even when 1 w as in Public School 35." "Bui. Buzzy, (.he whole idea of the club Ls to go', ;m airfare ic'lucl.inn can't. let personal get involved." "That's what you say. But il, so happens I joined the club because I always want- ed lo belong lo a club. I believe in this club. It could hecnmr .something wonder- ful. But not with Shrldon in it." "Don't you understand, If you don't RO willi us we can't go. You're Hi" 25th member. We've worked and slaved for six months just tomorrow. You can't let Ibe rest of us down.'1 "Thai's Ihe trouble with all of you. You think more about your trip than you do abcul the club. Bui Ihe club means more lo me than the trip. Sheldon knows thai. That's why he hates mo.'1 doesn't hate you." ''Well, he's always knocking down my ideas. I thought il would be nice if we had a clubhouse where we could meet, and maybe even a golf course, and we could have dinner dances every week and really be a club." "Maybe v.c can, Buzzy, after we all come back from Europe. We could talk about it then." we ean lalk about il. but Sheldon will veto it. He's always against every- thing I'm for." "But you don't have lo travel with him. All yen have lo do is lake the same plane him. Once you gt-i lo Pans you're on uv.n." "You mean we wun'l travel as a "Vo. We flnn'l have Lo. We jusl have Lo be n club Ifi gfi, the fare reduction." v.bat gofifl is if jou've got a club end don't wanl ID .sec each oilier when you go abroad? What's llic sense of a club? I thought we had some ideals. That's why I joined. 1 thought we believed in the same tilings. Bui apparent- ly I was wrong. I don'l uarit to lie on the same plane with people who don'L put the club first." "You're right. absolutely right. The rest of us have selfish, think- ing of ourselves instead of Llic club. Shel- don Is Ihe one who has blinded us to the I'll Irll von win I. we'll do. As ,voon fis we grt. hack we'll vote Sheldon out of Iho club." "lie won't like it." "Too bad for Sheldon. We have lo think of Ihe club iiot of any individual in The club i-. bigger Ihan all of us." "You can .say that again." (Tni'Diilo Tclrgrnm News Srrvirr) He's an inspiration n.v Dons; Waikrr rrilf; Konor.il mai'np-r at. TV. lloralrl, Turn Adnms, gram! my hiimblr of- fice willi hi.s presence1 one niorninfi and llic opposition won low for win, .ind tin Tlirro snmclhinp in- In'Chting in ir.ost of Ihe detcals on live Second thoughts on economic measures WASHINGTON The bulls are bellowing in Wall Slrcc't and il is hard not to bo swi'jjL up in the heady Uilk of leverage and margin and a 13 per cent rise in the Dow liy year's end. Bill in fact (his is Hie timo for sober sci'iind 1 hough Is about President KLxon's new economic mea- sures. 1'. though they have gener- ated great confidence, more than a burst o[ confidence is required. There is also neces- sary a discriminating, long- term strategy for dealing with the truly difficult problems of inflation, unemployment and in- ternational money. Inflation, to begin can be curtailed only by joint re- straint on the part of business and labor. Presumably Iho president's new Council on Liv- ing Costs will i.'sc (lie freeze In strike a durable bar- gain for stabilizing wages olid prices. The aim .should be an annual increase in living costs of about 2 per cent, against the present figure of more than 5 -icr cent annually. GeLUiig the help of business is not going to be any problem. The goodies in Ibe president's package (wage freeze, removal of auto excise tax, investment credit, and curtailment of gov- ernment spending) more than compensate for the price in- crease industry is asked to fore- go. The more so as it would have been very bard lo make the price increase slick. But precisely because the package is so heavily weighted in favor of business profits as against personal income, labor is bound lo be sticky' It was probably a mistake on the presi- dent's part not to have assured himself of labor support in ad- vance. Fortunately, be can still win co-operation from George Meany and Co. on inflation by doing the right thing when it comes Lo unemployment. Unemployment, of course, is a short-hand term for a slug- gish economy. At present with about G pei- cent unemployment, the country is producing every year some billion less in goods and services than it would at the 'I per cent figure which is usually lakcn to sig- nify full employment. Absent the billion, if has proved impossible to generate the fi- nancial resources we all know are necessary to meet the problems of flic cities and the environment. The administration's n e w package, apart from the con- fidence factor, does nothing to "We've civilized them faster than I'd anticipated they've just had their first mass murder, 12 muggings and an ulcer." expand demand in order lo stimulate Uie economy. To bal- ance the lax cuts, the presi- dent has promised reductions in government spending, ft is symbolic that the two new pro- grams most important for put- ting money into the hands of people in I rouble the family- assislamr. program for reform and the revenue-sharing plan ;ire both deferred. With inflation running at more than 5 per cent, it can be strongly argral that the lime is not ripe for stimulating de- mand. But that argument no longer holds after inflation is brought under control, as it should be during the 90-day freeze. Unless consumer de- mand breaks loose on its own accordingly, the president should be coming in with a new stimulative package when the 00-day freeze is over. This stimulative p a c k age should be built around using the added revenues of a boom- ing economy to effect changes in distribution of the national product. A far larger amount than previously budgeted should go lo family assistance. Some kind of revenue-sharing should direct much more money into the cities. And in exchange for lifting the 7 per cent tax on Mr. Nixon should be getting from Detroit not more cars which we don't exactly need in the worst way but cars that do less barm to the environment. Changes of a similarly sweep- ing nature need to be made in the international monetary sys- tem. Revaluation of the Japan- ese yen and some of the major European currencies is only the most immediate priority. Arter that a more flexible sys- tem of changing exchange rates is required. And in the next year or two the world will need a new unit of exchange pre- sumably some variant of the Special Drawirg Rights now in effect to replace gold and dollars ss the medium for ad- justing accounts between the major intcrnationa" trading sys- tems. No doi'bt there are many ways to achieve these goals. But the point is that the goals do not achieve themselves. Fol- low-up action of a difficult and sustaircd kind is required. And without it what the president now so glowingly describes as A w economic policy" will be tin1, a 3D- iv wonder. Knlerprisr.s, Inc.) .s Cninicross What the U.S. economic crisis really means I ONDON President Rich- ard Nixon's announce- ment lhat the I nilcd Stales' will no longer exchange dollars for gold look Lhe world by sur- prise. Few people had expect- ed the U.S. to take anv diaslic aclion to change the dollar sit- uation before the Inlernutional Monetary Fund IMF) meet- ing at tlic end of September. Cut the surprise was caused by the suddenness of the deci- sion rather than b> the deci- sion itself. For it bad been ob- vious for a long time that tho U.S. would have to do some- thing radical about the dollar's relationship with gold, and it has been equally obvious that there were really only two al- ternatives open to il. The roots of the present crisis go back lo (he nml-1950s when the U.S. began to run a balance of ments deficit. Because most countries in Ibe world weie prepared to bold U.S. dollars as part of their re- servc.s, to settle Ihcir interna- tional transact ions, the U S. was able I" give the counlrict. with which il ua.s in dcficil Hol- lars lo hold. If Ihc eoimlrics did not like holding dollars Ihc U.S. could swap them for gold from its vast reserves at an ounce. Rut with lime Lhe U.S. deficit got worse, and more and more c o u n 1 r i e s became restless about holding dollars. The def- icil got worse for a number of reasons: the main ones being the burden of U.S'. military spending abroad and the steady deterioration in Ihe U.S. balance of trade. For the Uni- ted States bad long partly off- set a deficit on capital account is, essentially an excess of long-term investment ovei- s e a s over foreign investment. in Ihe United States by sell- ing more than it bought. What made the holders of dollars restless was the sight of Lhe steady erosion of Am- erica's gold reserves. Between Lhe devaluation of sterling in November 1907 and March 1968, there was widespread speculation that the U.S. was about to raise the dollar price of gold from an ounce. The result was a rush to swap dol- lars for gold, which seriously depleted the U.S. gold slock. In .March 19GJ1, after a meet- ing of the main Western Indus- Irir.l countries in Washington, a now arrangement was mado which can be seen, in rctro- .spccf, lo be the first step In- wards Mr. Nixon's recent an- nouncement. The gold market was split into two Private companies and individuals could no longer rely upon swapping their dollars [or gold at an ounce. If they wanted gold they had to buy it on Lho The space inventory Ilv Don Oakley, NICA service engaged me in a serious discussion abniil golf. Tom's n-mnl in play up lo Inal dale ua.s an unimpressive eight losses, one the evening and twice the opposition won low net Tin- (Miirliismn drawn by Tom was that lie brings out the hest in others! counting anything nvnrlmard by Apolln the IT. are presenlly some 2.-I27 man-made objects in or- bil around the earth satel- hlcs, rocket bodies and of rocket hndie.s and various other items of debris. This compares uilh l.fl-H) ob- jects in orbit at this lime last year. The difference is mainly accounted for by VI U.S. and -in Soviet launchings, wilh as- sociated ilomn of drbns, ho- t.wcon June mid Juno 71. IH71. Olhrr nations, Imurvrr, brRinninp lo mnlribule lo llm .space traffic problem. France, for example, can claim seven payloads and 34 ilems of debris for a total of objects in earth orbit. Sincn Ihe October -1, hunching of Sputnik I, objects liavp. put into or- bit. A. ralnlogue of lhr.se ob- jects maintained by the joint U.S.-Canadian North American Air Defense Command Space Defense Cen- tre shows that of these have decayed fallen into Ihe atmosphere and burned up. The Air Defense Command does not maintain Ibis .space waIt'll and catalogue localise it is intrigued by satellites or so thai people can click their tongues and Fay. "Imagine tlwl." Tl, has a deadly f-eriouj, pur- pose. All these thousands of ob- jects in oi-bit must he cat- alogued and watched lest in Hie confusion that would oth- erwise prevail, nothing is ovpr lamifhod afiainst tvs space unawares. free markeL, where the price quickly rose above MO an ounce. Only governments could still convert their dollars for gold from the American re- serves at tiie official price of 535 an ounce. Now this row over the gold price may sound irrelevant to the current crisis. But in facl il is very closely linked lo- il. For the dollar has now become Ihe standard against which oth- er currencies quole their ex- change rales. The value of Ihe dollar is, in Lhcoiy, tied to gold: 35 U.S. dollars will buy or ralhcr would buy, until lasl weekend an ounce of fine gold. Bui in fact the value of the dollar is tied only to its pur- chasing power in the United Stales. If a dollar would once buy five hamburgers and Loday will buy only four, it has de- preciated, and so have all Ihe other currencies which quote their exchange rales in terms of dollars. It has been clear for some lime that the dollar needs In be devalued. One of the main reasons why I lie U.S. of payments h a s deteriorated is that costs and prices in Am- erica have got out of line with those in the rest of Ihe world. Hamburgers in America are more expensive, in dollar terms, than those in London's King's Hoacl. But because of the relationship of the dollar to Hie world's monetary system there are only two ways lo "de- value" the dollar. One is lo in- duce Ihe major industrial couu- Irirs of Ihr world lo rovalun I heir currencies against the dollar. And the !u raise the price of gold. If America had chosen lo raise the price of gold Ihe first country lo benefit would have boon ihc United still has bigger reserves of gold than any oilier country in Ihc world. Tho oilier major gainers would have Item Mm world's l.wo main gold pro- ducers, Iho Soviet Union and .South Afrira hardly the countries In whirl] America wants In give a free hand-out. With the official dollar price of gold raised lo, say, an ounce, Ihc other countries of Ihc world would have hern fared with a choice. K i t h o r they could havo kept tho amount of dollars that then- currency would buy un- changed by keeping Lheir dollar exchange rale the same which would mean devaluing with the dollar. Or they could have kept the amount of gold Lheir currency would buy un- changed which would auto- matically revalue their ex- change rale against the dollar. Eul Ihe U.S. has not chusen this alternative. The Nixon ad- ministration c 1 e a r ly believes that the monetary role of gold should disappear as soon as possible, and that it should be- come one more useful indus- trial metal, as silver lias be- come. So the Nixon administra- tion has gone for Ihe other al- ternative, of persuading other countries to revalue their cur- rencies in terms of Ihe dollar. Again, the rest of the world has a choice. A counLi'y could try lo maintain its present ex- change rale with the dollar, and ignore the fact that its dol- lars could no longer be swap- ped for gold. This is whal Jap- an has been Irving to do, and it should be clear by now what happens lo Ihe countiy (bat goes for this alternative. Spec- ulators d o u h t its chances of succeeding and buy its cur- rency hand over fist, in the hope that il will be forced to re- value Ultimately sheer specu- lative pressure may drive the counliy that chooses this alter- native to give up and revalue against Hie dollar. But the second alternative is the one which most countries are likely lo accept. It is to ac- cept that dollars no longer buy gold, and to revalue or float against the dollar straight away. The U.S. has been Iry- mg lo talk the rest of the world into doing tills for a good two years; but shock tactics are Letter than all the talk in the world: "In this as Paul Volcker, the under secretary of (ho United Slates treasury, said in London, "it takes two lo tango." (Written Tor Tlie Herald mid Tlic (Hiscrvcr, Lrunlon) Looking backward Through the Herald There has been a tem- porary lull in the export of lo Ihe United Slates. Canadian hcer is plentiful in the road- houses in the vicinity of Detroit where it sells for fifly cents a bottle. lift I IU. Hon Ramsey Mac- Donald's government resigned lodny in Ihe face of a national financial crisis in Brilain. Mr. MacDonrild was asked by King (icoi'Ht1 lo form a lemporary national non-party government who's first duly will be lo bal- ance (he budget. The Royal Canadian Air Force announced lodav tho immediate need of Ihe estab- lishment of the Canadian Wo- men's Auxiliary Air Force for 150 women who will undergo strenuous and intensive train- ing to lest their fitness lo be- come officers and non-commis- sioned officers. Premier Mohammed Mossadegh announced today a break in the Anglo-Iraniar, oil talks. It is becoming increasing- ly difficult lo reach any aprcc- mci'l with rc.spccl In British management. Construction plans for a -SI .210.000 motel in downtown Lelhbridgc were announced to- day by Western Motor Hotels of Calgary. The Lethbndge Herald 504 7lh St. S., Lcthbridge, Alberta LETHBRfDGE HERALD CO. LTD., Proprietors and Publishers Published by Hon. W. A. BUCHANAN Srronrl AAnll RrriKtrallnn No 01117 Mcml-er nf The Canadian Press find llio Cftnndinn Daily Nrwinnpor Publiihcrs' Associtinon and the Audit Durtnu ol Clrculalions CLEO W. MOWERS, Editor find Publisher THOMAS H. ADAMS, General Mnnacipr JOE DALLA WILLIAM HAY Mrinnriinti Fdilor A'srci.ilp Eililor (JOY r'V.lir.S DOUGLAS K WAI KER AdverliMfin. Mf.natier Cdironiii P.inc- Editor "THE HERALD SERVES THE SOUTH"