Lethbridge Herald (Newspaper) - February 14, 1973, Lethbridge, Alberta
4 - THE LETHBRIDGE HERALD - Wednesday, February 14, 1973 The dollar crisis In December 1971, little more than a year ago, a protocol known as the Smithsonian Agreement realigned the U.S. dollar with other world currencies, particularly the German mark and the Japanese yen. This is a polite way of saying the U.S. dollar was devalued. At the time, this agreement was hailed by the economic movers and shakers - including President Nixon - as the beginning of a new era of monetary stability throughout the world. Within six months, Britain was forced to opt out of the agreement, and allow the pound to float to its own level among world currencies. The Swiss, too, have had to let their franc float free, and other "special" arrangements have been found necessary as various financial emergencies have arisen. Now, with the U.S. decision to devalue their dollar, the Smithsonian Agreement is a thing of the past. At the time of writing, it is not known how other currencies will react to the U.S. move. It seems clear, though, that another international agreement will be attempted. Recent experience does little to bolster confidence in such agreements. This latest crisis was precipitated by attacks on the U.S. dollar, as was the case in 1971. The technique was the same, too; holders of massive quantities of U.S. dollars disposed of them to acquire currencies they thought were better investments' notably marks, yen and - in smaller measure - Swiss francs. The reason was simple. They believed the American dollar was not worth its quoted price and that a further devaluation was inevitable. When that occurred, those whose wealth was being switched out of U.S. dollars planned to repurchase them at a lower price, and so increase their holdings. It worked in 1971, and now it has worked again. If anyone doubts that the mighty U.S. dollar -? or any other national currency - can be so manipulated, they need only consider the colossal amounts of U.S. money that exist outside the U.S. In Europe alone, by current estimates, more than 80 billions of dollars are in the hands of governments, banks, industrial corporations and wealthy speculators. That much wealth can exert enormous pressure on governments or on cur* rencies. There are a number of reasons for the lack of confidence in the once supreme dollar. The first is the most obvious. The 1971 devaluation was triggered, in very large measure, by the occurrence of the first U.S. trade deficit ($2.7 billion) in this century. Instead of a reversal following devaluation, or at least the appearance of some likelihood of an improvement, an even greater deficit ($6.5 billion) occurred in 1972. While economists had not expected the 1971 realignment to produce an immediate turnaround, they certainly were not prepared for such a drastic move in the other direction. A second cause of concern in European money markets is what the experts read into current U.S. fiscal policy, particularly President Nixon's decision to ease wage and price controls, his so-called Phase Three. While the White House insists this does not betoken any lessening of anti-inflationary fervor, money-wise Europeans are not reassured. Nor are they enthusiastic about the new U.S. budget, which will set a new spending record of something like $268 billion, including an added $4.2 billion for the military, notwithstanding withdrawal from Vietnam. To some, this seems to herald a continuation of the profligate attitude - s they regard it - that got the U.S. dollar into. trouble in the first place, and reflects no intention of taking those steps that are needed to reverse inflationary trends. There may be another factor, too, though it is much less tangible; hopefully, it may not even exist. Going back to the 1971 crisis, Canadians especially will remember the strong-arm tactics employed by American ''negotiators," for example the cavalier manner in which one John Con* nally dismissed all Canadian protests at the draconian measures ap- plied against Canadian trade. This was typical of the American attitude throughout the discussions, as they bulldozed their way to the Smith* sonian Agreement. While wealthy bankers and corporation executives are seldom very sensitive about such matters, it has to be remembered that much of the pressure now being applied to the U.S. dollar comes from government-held funds, and while politicians may have (conveniently) short memories, few would fail to go back to the end of 1971. There is something ironic about this whole thing. Not too long ago, the value and strength of a national currency was a matter of intense pride; governments could be shaken, even thrown out of office, by a threat to the pound, the franc or whatever. As late as the 1960's, a Labor govern* ment in Britain risked national bankruptcy to "defend" the pound. In the recent past France, too, has taken the most heroic measures to maintain the value of the franc. But in 1971 devaluation of the U.S. dollar was widely hailed as a triumph of U.S. diplomacy, a splendid and welcome vindication of Nixonian economics. The most recent devaluation is no less welcome, in U.S. business and government circles. ? * ? The seriousness of the present situ* ation may go considerably beyond a dislocation of world money markets or even world trade. There is more than a little evidence that the interests of the U.S., Japan and Europe may be on a collision course. What the Americans want is quite simple. They would like to see a new understanding, including currency levels, that will result in more American exports, less foreign goods brought into the U.S. The imports they want cut back are Japanese, Canadian and European, in that order; Japan, Canada and Europe are the sources of their trade deficit. With a less expensive U.S. dollar, in terms of the yen, the mark and the Canadian dollar, their goods will fall in price and thus become more saleable, while Japanese, German and Canadian goods will rise in price, and become less attractive in terms of competing American - made goods, both within the U.S. and on world markets. Such an arrangement would be especially serious for Canada, because of the implications for employment. Curbing imports into the U.S. and exporting more U-S. commodities will certainly create more jobs in the U.S., but have the reverse effect in other countries. The loss of U.S. markets would cost many Canadians their jobs, and importing more U.S. goods will worsen the situation. This "export of unemployment," as it is termed, is only one of the effects of devaluing the U.S. dollar. There are others. Any international agree* ment made to improve the economy of one country cannot help but hurt others. A better U.S. trade balance can only come about if that of some other country becomes worse. Any international monetary arrangement that suits the U.S. interests, then, is not likely to be popular elsewhere, especially with those who firmly believe the U.S. problems are brought upon themselves by self-indulgent insistence on the highest standard of living in the world, the consumption of 40 per cent of the world's resources by three per cent of its people, to say nothing of such adventures as the Vietnam war, of which the great majority of the world disapproved most heartily. To demand that they make sacrifices to maintain the U.S. standard of living at a higher level than they can afford for themselves, to relinquish profits to ensure the continued profitability of U.S. business, is not going to sit too well on other nations, particularly the Europeans. ? ? + But the alternatives are not attractive, either. More and more, under the Nixon regime, there has been a tendency to imply links between American politics, economics and trade policy, and American military interests. In short, to many Europeans the choice may well appear to be the simple, even crude, one of either agreeing to once again realign world currencies to U.S. advantage or face the possibility that U.S. troops - and the U.S. atomic shield - may be withdrawn from Europe. (Just as there are Canadians who relate mut-terings from Washington about the "need" to reimpose the surcharge on Canadian imports to Canadian reluc* tance to collaborate in a continental energy policy.) This is not a claim that the Americans are saying they will take their marbles home if the other nations don't get in line. Rather, it is intended to illustrate the kinds of concern that exist. . -There are many who have little love for America and Americans. This is why worried observers have expressed very serious fears for the present reasonably amicable partnerships that exist between the U.S. and Japan, in one direction, and between the U.S. and Europe, in the other. , "Wow! our own little peace dividend!" Whither the U of L? (3) Jeanne Beaty What is a university? It is a widely observable, and paradoxical, maxim that people make great sacrifices to build schools and to educate their children but distrust the product of the educated mind. If a local industry with an annual payroll of more than $4 million and a staff of 340 per-- sons let. it be known that action by the provincial government threatened its well-being, it is likely that both the city council and the chamber of commerce would be knocking on the premier's door in Edmonton to protest. But a university, in spite of its payroll and staff, is not an industry, and it is left, mainly, tp fight its battles alone. Local reaction is apt to bs summed up in the attitude that univer* sity administrators don't know what they're talking about and-or "Edmonton knows best." What is a university then? What are its purposes? What is its essential nature? What makes it different from the industry which would command immediate support, as the university did in its founding days when it was probably looked upon as an industry? The number of books, reports, articles and speeches which have been concerned with these questions in recent years is overwhelming. Universities ev* erywhere are going through a state of reappraisal, following more than a decade of crisis in which enrolments burgeoned, new universities were built, and old ones became multi-versities -to meet the demands from in* dustry, commerce, the profes* sions, and students themselves for a college education. The University, Society and Government; Quest for the Optimum; University Government in Canada; New Universities in the Modem World; Canadian Higher Education in the Seventies; The Liberal University: An Institutional Analysis; Universities Facing the Future -*� to mention a few - indicate the depth of concern over these questions. "A university has something in its nature that distinguishes it from all other institutions whatsoever: its intellectual commitment," J. Percy Smith, vice-president of Guelph Uni* versify, wrote in A Place of Liberty, a collection of essays by prominent Canadian educators. The book's title came from a quotation from Disraeli, "A university is a place of light, of liberty and of learning." "T h e university exists," Smith wrote, "because of a deep conviction in the community that an institution whose sole essential function is an intellectual one is necessary to the well-being of that community." He added the warning note that "Whenever a university or community loses sight of the prime fact about the nature of the university . . . both the in* stitution and the community will suffer." (A local university administrator called this book, "My refuge at times of crisis and adversity.") J. Douglas Brown, provost and dean of faculty, emeritus, of Princeton University, made essentially the same points in his book, The Liberal University. "the justification for the ex* jstence of an expensive, inter* active kind of higher educ'ion here termed 'Liberal education' is that it is an effective and socially beneficial means of en- hancing the flow of leaders for the society it serves." He added that the appeal of a liberal university is to men of vision. "In our climate of bigness, diversity and specialization, it is not likely that such universities will receive widespread support." In an address to a recent British conference on mass higher education, Sir Eric Ash-by, masier o; Clare College, Cambridge University, and a member' of the Carnegie commission on higher education in the United States, made the remark, widely - quoted since then, that "hand-made" education, as opposed to mass education, is needed to produce the "thin clear stream of excellence on which society depends for innovation and statesmanship." It was an echo of A. N. Whit* head, from 1929, "Of course, they are not the only agencies, but it is a fact that today the progressive nations are those in which the universities flourish." What is a university's essential nature? "If a university is alive and productive it is a place where colleagues are in constant dispute," according to Kingman Brewster, jr., president of Yale University. "Poor universities composed of craven men are invariably very orderly places and bad universities' have the silence and tranquility of the desert," John Kenneth Galbraith wrote. "A university is not a place designed to make peonle "nc v fortable," said Dr. David R. Goddard, retired provost of the university of Pennsylvania. And Frank J. Underbill, dean of Canadian historians, likened modern universities to a collective Socrates in modern society. "Their function," he wrote, "is to seek new knowledge and new understand1 ig about nature and society, and to keep asking questions, often very embarrassing ones, about established beliefs and conventional wisdom. "This means," he continued, "there will always be a certain amount of tension between the university and the local community in which it functions." This collection of opinions will be of interest to those who have had' the mistaken impression that a university was supposed to be a serene cloister of academics. It will not reassure those who feel that things are too quiet on the west bank of' the Oldman River. The most pertinent definition of a university, for the purpo-ves , of this series, came from Dr. William Beckel, on being in* stalled officially as president of 'Crazy Capers' Letters Penal sytsem scored On December 29, 1972 it was reported that three armed robbers smashed the door of the Imperial Bank of Commerce in Virginiatown, Ontario, robbed the bank of $60,000 and escaped in a stolen police car with the bank manager as hostage. One robber was carrying a machine gun and some shots were fired. One of the alleged robbers was caught the same day and charged and believe it or not, he was then released on $500 bail. Finding the bail money was probably not too much of a problem with $60,000 in the kitty. . On Feb- 8, The Lethbridge Herald reported that a convicted murderer, who was serving a life sentence, was caught on an impaired driving charge. The lifer was apparently study* .1 should start again with the safety straps, Mrs. Cope! the University of Lethbridge, in September, 1972. With the dry wit which is a Beckel trademark, he prefaced his speech with the comment that in looking for a theme he had discarded a remark by Alice in Wonderland, "Oh! I'm not particular as to size, only one doesn't like changing so often, you know," for what he termed its "faint whiff of non-Canadian influence." He had chosen, instead, he said, the last two lines of "The Wreck of the Julie Piante," by Canadian poet William Henry Drummond, "You can't get drown on Lac St. Pierre so long you stay on shore." His speech outlined the lim* its of what a university like Lethbridge could and should do. "The university must shelter and develop thinkers, experimenters, inventors, teachers, and students, who without responsibility for action, will explore the phenomenon of life and endeavour to understand it . . . "The university cannot and should not do everything. There was a time in the 50's and 60's when there seemed to be only one place where any education beyond the schools could occur. The universities were asked to do almost everything and the universities responded in an incredible manner growing to encompass all demands and in so doing left the shore and almost drowned. "Society has fortunately made possible the resuscitation of the nearly drowned university by the nature and development of other agencies to do the many important things needed by men and women that should not be done by the uni* versity. For example, we have excellent systems of vocational and post-professional training and special education on the job, or in the community colleges and institutions of technology. "When the university con* serves knowledge, creates new knowledge and makes this available to its students it is engaging in the most valuable public service. If it adds to this dissemination of its knowledge to as wide an audience as will listen beyond its specially in* volved students, then it has done all it should within the mandate to conserve, to create, to teach . . ." Another Canadian university president of a new institution made the same point in an interview with the Vancouver Sun- Dr. Patrick McTaggart-Cowan, first president of Simon Fraser University and now secretary to the Science Cpun* oil of Canada, pointed out that under increasing demands from society, universities in the 1960's had become virtually trade schools and that this thinking still persists. "The real purpose of a university is to train people to think," he emphasized, adding; that such people will be among the most useful members of society in the future because of the growing complexity of the World. An MLA in Edmonton put it more eloquently in an interview when he said, of the need for universities, "It is a much more uncertain, challenging world we're moving into and we need to give our people the knowledge, the b r o a d e n-ing experiences to meet this more sophisticated, thought-provoking challenge." ing psychology at Queens Uni-veristy during the day and boarding in the jail during the night, which seems to be quite a cozy arrangement. If this man gets paroled on graduation from university, he might well become our next minister of justice. It is futile to ponder over the convicted murderer who gets time off to get married and have ' a long honeymoon in Spain, or the child molester and murderer, who gets time off to go out and molest and murder another child. It's all too weird . . � and it takes an expert to understand our new penal reform system. NIELS E. KLOPPENBORG Lethbridge Going in a circle Recently there was an article in the Lethbridge Herald regarding the nearly double cost of transporting children to school from 1961 to 1971, an increase of nearly $10,000,000. At a meeting in Sunnyside School in December, 1972 (when there was talk of closing the school and busing the children to other schools in the country to keep attendance up in these schools), it was stated by our school board authority that Edmonton officials were in favor of parents transporting children the first four miles to school as this would reduce transportation costs. I wish Edmonton officials would give the increase in mileage from transporting students the many miles to centralized schools and then the taxpayer would know why the cost has doubled. School bus operators leave the impression that they get no more money than they did years ago. In 1933, 1934 and 1935 I went to Coaldale High School by saddle horse. This fall my little boy will probably be going to school in Coaldale. We five only four miles from Coaldale. If the department of education has its way I'll have to trans* port him myself, as was the case 40 years ago. Doesn't this make a big circle? A PERPLEXED TAXPAYER Lethbridge. Boosting oitoi ego I recently heard the announcement that Canadian National was building a tower in Toronto that would be the largest structure in the world. The CN representaitve who made the official announcement said that "the tower would house TV, radio and police band antennae but the main purpose would be as a landmark for the city of Toronto." I wonder what this fantastic structure will mean to the homeless refugee in Vietnam or, more to home, the people who live in the lower class areas of Toronto who find every trip ot the grocery store a problem. Closer to the point, what about the old age pensioner living 600 miles from his family who can't get home to visit because of the exorbitant rates charged by companies like these, spending multi millions, of dollars to boost their own ego. It makes me wonder how great it is to be a Canadian. Look at the Rocky Mountains. They didn't cost anybody anything, and they will always give Canadians more enjoyment than 10 multi-million dollar towers. LORNE E. BECKER Taber. On the Hill By Bctt Hargrave, MP for Medicine Hat Perhaps the most newsworthy event on the Hill last week was the eleventh hour passage of Bill C-124 on the financing of the outstanding accounts of the Unemployment Insurance Commission. The Conservatives questioned with considerable vigor the method used to ob* tain the additional $454,000,000 by governorrgeneral warrants - just prior to the election when they could have been properly appropriated by Parliament before the end of the last session. In addition, the $800 million ceiling was removed - again over protests that this clause was a necessary total spending check recommended earlier by the government. Bill C-125 is still on the withdrawn status. This is the proposed amendment to the UIC to remove the obvious abuses of the program- As a price for their support the NDP have now demanded the removal of a proposal that would deny UIC benefits to people fired for misconduct or quitting without "just cause." The NDP are also questioning the government's proposal that UIC applicants for benefits should not have the sole right to decide when they can reject work and still collect unemployment insurance. Conservatives have been accused of withholding benefit payments. This is not true, We stated early in the debate that we would support imme* diate payment of proper outstanding accounts. We quite properly questioned the legality, the tactics and the political methods used by the government prior to the passage of this bill. A week ago I was able to leave Ottawa long enough to at' tend the Western Stock Growers' Association at Banff. With a good market and price year just finished, cattlement, had very few production problems on thejr minds. However, there was considerable debate and some concern about the possibility of a single cattle commodity association of producers for Alberta. A second area of con-cern was over land use with particular reference to the ever increasing attention by recreational and sports interests in range lands - both crown grazing leases and privately owned agricultural lands. Last week in Ottawa I was able to attend the annual meet* ing of the Canadian Federation of Agriculture. I have felt for sometime now that the single most important agricultural is* sue across Canada is the feed grains controversy. This feeling was certainly confirmed at this meeting when the entire Quebec delegation walked out in . protest over the feed grain pol* icy debate in the meeting. Dur* ing the meeting, Mr. Lang as wheat board minister, sug* gested new throne speech legislation might . . . "include the removal of the present restric* tions on the interprovincial movement of grain and the use of a secondary quota and pricing mechanism hi the wheat board's designated area". This, would indeed be a very significant development. The Lethbridge Herald 504 7th St. S., Lethbridge, Alberta LETHBRIDGE HERALD ^O. LTD., Proprietors and Publisbert Published 1905 -1954, by Hon. W. A. BUCHANAN Second Class Mall Registration No. 0012' Member of The Canadian Press and the Canadian Dally Newspaper Publishers' Association and the Audit Bureau of Circulation* CLBO w. MOWERS, Editor and Publisher THOMAS H. ADAMS, General Manager BON PIU-ING WILLIAM HAY Managing Editor _ Associate Editor BOY F. MILES Advertising Manager DOUGLAS, K, WALKIH editorial Page Editor "THE HERALD SERVES THE SOUTH"