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Lethbridge Herald Newspaper Archives

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Lethbridge Herald {Newspaper} - 1974-01-07,Lethbridge, Alberta ALl^Big business controls disturbing Persian strategy The Shah oí iran is being credited, by some diplomats in Tehran, with statesmanlilte motives, even altruistic ones, in leading the latest price rise in Middle East oil. They are convinced that he was motivated by a long-held desire to force development of alternative sources of energy, to conserve oil and to put the energy problems of the world on a rational basis. One diplomat referred to this idea as the Shah’s "grand scheme.” It fits the observation of others that Mohammed Reza Pahlevi sees himselt as a responsible leader in the gulf area and a statesman to be taken seriously. Iran is not a part of the Arab block and has not joined in the oil embargo. A slightly less generous version of the Shah’s motives has it that he simply wants to develop a market price for oil based on the cost of other forms of Beautiful Norway In the world’s mad rush for oil. reflected in budgets showing that major oil companies may be almost doubling the amount of money to be spent on exploration, Norway’s controlled development of the greatest oil potential in Europe is amazing. The amount of gas and oil that lie under Norway’s coastal waters is unknown. Thus far only four per cent of its continental shelf has been licensed for ex-., ploralion and production. This includes the huge Ekofisk field which lies 170 miles off the southwestern tip and is expected to produce one million barrels a day in oil and its equivalent in gas by 1977. The accent in development is on the quality of life, rather than on profits. The country has a tightly planned economy and sudden injection of money would trigger inflation and a wage spiral which would be disastrous to local industries and to the rather unique culture of this beautiful country. Norwegians are said to look with horror on Dallas and Houston and the hustle, bustle and pressure of the oil industry. Any unchecked structural change in their society is felt to outweigh the .sheer economic benefits of oil. There is certainly much to be envied about life in a country whose king takes the public tram on Sunday, not to impress the voters or meet the public, but because he wants to go skiing and all road traffic is halted on that day. Once again — The Bow-Tie Blues The bow tie is back. More men are walking about with what looks like a debauched butterfly clinging to their Adam’s apple. It may mean the end of civilization as we know it. Like the seven-year locust, the bow tie emerges from underground at long invervals, surviving only long enough to mate. I have owned but one bow in my life — it now sits in a glass case with a pin through its thorax but that was enough. I bought the tie in order to travel first class on a P & O liner, it being my understanding that “white tie” was a requisite part of formal dress for dinner, for the captain's cocktail party, and for burial at sea. (1 am not a good sailor.) I did not intend to be omitted from any of these events just because 1 had nothing to wear around my neck except the dead albatross. The bow tie was of the clip-on type. It was supposed to attach itself to the shirt collar, eliminating the need both to tie the bow and to throttle the windpipe — a double whammy in equatorial waters. The trouble was that my bow tie was weak in the clip. Its favorite ploy was to wait till I was standing in the middle of a group of distinguished persons, then suddenly release its hold, vanishing into my dinner jacket. Once it made a clean drop down the front of my trousers. The reaction of those who witnessed this act was mixed. Some people asked to see it done again, apparently under the impression that it was a Canadian way of enlivening a social gathering. Others merely moved away from me, as quickly as traffic allowed, before something else dropped off. I tried gluing the bow tie to my shirt collar. This made no difference whatever to the bow's taking the plunge, but inhaling the mucilage made my eyeballs revolve. The total effect on other passengers pretty well cancelled out the value (several million dollars) of equipping the ship with stabilizers. The captain vibrated audibly when he strode past me on deck. My dining room steward, who was also having trouble with his bow tie, -quietly warned me not to accept any invitations to visit the bridge after dark. The last occasion on which I wore the bow tie was a moonlight dance on shipboard at Suva. This time I had secured the bow tie by means of a len^ of wire around my neck, the wire becoming exposed during the evening and being mistaken for a new type of hearhig aid by the people who felt obliged to raise their voices when addressing me. The white bow attracted several species of giant tropical moths, oversexed and out for a bit of a flutter. The moths became hostile when a br;sk breeze sprang up and the bow tie whirled as a propellor. Nobody asked me to dance except the engineer officer, who seemed to have a professional interest in the drive mechanism of the dreamboat. That trip ended my experience with what a department store ad hails as “high flying bows — wild patterns, heady colors, ex-hilirating ways to tie it all together." I know that Mike Pearson wore the bow tie for most of his political career, and managed to remain a man of peace. But few of us have Mike's ability to keep both feet on the ground when the high flying bow runs into turbulence.    . On most men — and I say this as a seasoned wearer of the low flying turtleneck — the bow tie fails to inspire confidence. 1 would not buy a used car from a man wearing a bow tie, even if he had other clothes on as well. -Besides, if you’ve got bow legs, why overdo? Unwelcome voice By Doug Walker iilspeih reported that a mutual lady ac-([uaintance ol our vintage had been described by a gentleman as "an attractive young liidv " I ungallantty remarked that said lady was indeed quite attractive in her more youthful days but that she had faded a bit. Haven't we all." Elspeth said ruefully. “Mother was faded from the beginning," interjected nasty boy Paul. By Bnice Whitestone, syndicated commentator energy because he needs a financial base of power to hold his own in the Middle East i If this is true, it is good news In the long run. The new posted price for a barrel of Persian Gulf oil is now $11,65. But the Wall Street Journal, in discussing the fact ihat alternate forms of energy become economic as oil prices rise, suggests that over the years the price of oil, taking these alternative sources into account, cannot be held much above $7 a barrel. It’s a little difficult to credit someone with benevolence when he is charging $11.65-for a barrel of oil that costs $3,09 to produce. However, whatever the Shah’s motives, the oil crisis has certainly guaranteed that .the rest of the world will join in his “rational view” of its energy problems and start looking elsewhere. In the last few years, wmie governments were finding themselves more closely involved with industry, they were also discovering some new limitations on that relationship. In particular, governments found that they were not checking the huge growth of the multinatioial corporations which were operating across national boundaries. These mysterious organisms, the so<called mul* tinationals, which are now a very fashionable subject for study, were hardly thought about ten years ago. It can be argued that there is nothing really new about them and their revolution can be traced back as far as the East Indian Company or Hudson’s Bay more than three hundred years ago. Certainly, there are many big companies like Ford or Shell which for decades have been producing, buying and selling in scores of countries, with international staffs. But the development of c«nplex technologies and of quick communication by telephone, computer and jet planes has enormously increased the scope for big companies to operate abroad; Europeans became increasingly aware of this new fact of life with the massive extension of United States companies into Eurtqie during the Sixties. What was new about these operations was not so much their internationalism as their control; all operations, regardless of how wide -spread may be the various parts, are co-ordinated in one centre. It is their remote control, together with their size and resources, which makes tbem so alamning to national govenunenta. These corporations are able to export products from one subsidiary to another, to link up their factories across the continents, to make hwses in one country and profits in another, all in a way that completely outdates the old theories of trade between nations. Because these companies are not committed to a single nation, they are less responsive to national control. Like Dr. Jeckyll and Mr, Hyde, these multinational enterprises appear to have two personalities. One is benign, reflecting their contribution to intematimial economic growth and enterprise; the other is malignant, rooted in a policy of ruthless selfaggrandizement that may upset the delicate economic balances among the nations of the world. - Most parts of the world can benefit from the operation of multinationals. They exploited the new career markets world-wide. In many cases the multinationals have become industry leaders often by developing new businesses from scratch. This was in large part a result of managerial techniques, which, it is now becoming ob--vious, are at once a source of weakness and strength. The managers themselves became a new kind of crossbreed, with different allegiances as a result of their changeable migratory patterns. The multinational managers move around from country to country, inhabiting company houses or living in an expatriate society. The alRAb terrorist Multinational companies criticized By Anthony Sampson, London Observer commentator WASHINGTON - "What I'm really dreading" explained a vice - president of one of the major American oil companies, “is the middle of the winter; the American public will be shivering, and we will be declaring far bigger profits than ever before." He was reflecting, perhaps more sensitively than most, the problem facing all the American oil companies in the next months, of extreme unpopularity as a result of the energy crisis. Already before the crisis, the big oil corporations were declaring exceptional profits (partly it is true because the previous year had been a bad one). In the third quarter of 1973, Gulf Oil declared profits up 91 per cent over the year before, and Exxon, the biggest oil company, jumped by 80 per cent. Now the profits will take another big eap; the Cost of Livit^ Council in Washington has just allowed an Increase of a dollar a barrel in the controlled price of crude oil, which will raise the price of ordinary gas for cars from 42,3 cents to 44.6 cents. The “Thanks, Gvv’ner — 1 do*'l smoke. I jist wanted to warm nte 'ands!” Council explains that the increase is necessary to narrow the gap between the expensive Arab crude oil and domestic supplies, and also to stimulate extra exploratim and research. It is true that President Nixon has, at the same time, proposed a new “windfall profits tax” to cut off some of the benefits to the oil companies, which is expected to yield between |3,000 million ^ and $5,000 million in the first year of operation. But the tax is mild compared to the expected extra profits, and It will certainly come under fierce criticism for its leniency when it comes before Congress. But the complaint against oil companies is not only that they are making too much money. More seriously, it is that they failed to foresee the energy crisis, that they preferred to make quick and easy profits from Arab oil to developing American oil fields, and that they are politically irresponsible, becoming the passive tax-collectors for the Arab suppliers, and their willing agents for the oil boycott since the Middle East war. It is the political attack on the oil companies which is likely to cause them their greatest embarrassment. Probably the most formidable leader of this attack is the eloquent young Senator from Idaho, Frank Church, who heads the Senate subcommittee on multinational corporations. The subcommittee was set up after the revelations early last year about the intervention of the giant corporation ITT (International Telephone and Telegraph) in the politics of Chile, and since holding hearings about ITT in Chile earlier this year, Frank Church and his subcommittee have turned their attention to the oil companies, to try to discover how far they influence United States foreign policy. The sut>committee is planning to hold hearings into the oil companies this month, when it will subpoena heads of the industry and gomnment officials: the hearinp are ex pected to show some startlUig evidence of connivance between the companies and acquiescence by the government; and already Senator Church has let off a first broadside, in an outspoken speech in Iowa. He complained that the oil companies, which had long been regarded as “our companies” — including Exxon, Gulf and Mobil — “have in fact become policing agents of the Arabs’ boycott against the United States", and he concluded that “we must reexamine the premise upon which American energy policy in the international sphere has apparently been based; that what's good for the oil companies is good for the United States.” Frank Church is sometimes attacked as a Mid-Western isolationist, with the horizons of Idaho potato-fields; but he is in fact a sophisticated internationalist, and he insists that he does not wish to abolish the multi-national corporations, merely to ensure that they do not improperly influence the government's foreign policy. And others in his subcommittee, including Senator Edmund Muskie, Senator Clif- , ford Case and (sometimes) Senator Charles Percy, share his basic concerns. It is easy to exaggerate the omnipotence of the oil companies, Increasingly they are caught between the demands of the producing countries and the consuming countries, and as more foreign oilfields are nationalized, they will increasingly become diS' tributors and marketers, rather than owners of oil. Diplomatically the companies are thus in an ugly situation. As world distributors they must aspire to the greatest possible neutrality; but the Arab producers pull them towards discriminatory policies, while their owners are being pressed to become increasingly accountable to their home government — usually the American government. The American oil lobby, which has Iwd a successicn of triumphs in the past, will cer-Ulnly fight back toughly, throigh its friends in Congress and the administration. But their political exposure as a result of the energy crisis and the Middle East war is likely to cost them dearly in the long run — however spectacular their immediate profits. For there has been a very sudden awakening to the belief that oil has become too important to be left to the oilmen. BEimY’S WORLD Multinationals indulge in many practices, which irritate national govenunents. For example, they use intercompany transfers to make profits appear mainly in countries with low tax rates. Also, some of these enterprises do not train or utilize locaK inhabitants for top level posts and the senior executive positi(His often are held by imported personnel. The leading multinationals with more than |2S billion in cash, move their spare assets across national boundaries because of expected currency changes. When such currency movements occur, exchange parties of various currencies are affected. The recent international monetary instability was caused in part by mul> ^nationals’ movement of their assets. Much of the hostility towards multinationals could be countered by the companies themselves through disclosing, voluntarily, much more about their operations and the reasons for specific decisions on personnel or the balance of payments. Multinationals may complain that this would be a burden not shared by their “national” rivals but they will always tend to be judged more harshly. More will be asked of them and it is better for them to respond voluntarily rather than with harsh rules to be imposed on them. The Canadian government has pursued its own antimultinational course. Multinationals based here are now subject to a tax even on earnings not remitted to Canada. Also, after 1975 Canada is proposing to tax the dividends received from multinationals operating in a country that does not have a tax treaty with it. These kinds of measures penalize multinational cor^rations and make us an inhospitable haven for multinationals. Yet, none of these moves gets at the potentially harmful side effects of multinationals operating in Canada. It behooves multinational corporations to pay attention to local views and defuse as many relevant issues as possible. Domestic talent and sensitivity on many Issues must receive greater recognition. Behind the rising emotional tide against multinationals there is a great deal of substance. International business appears to be riding roughshod over national interests. Perhaps an inter* national agreement by many nations will be necessary to ensure enforcement of a fair practices code. Until that day, the multinationals should show restraint and consideration. After all, multinational business is among the most dynamic forces in the world and can, with proper controls, provide higher living standards everywhere. & WA Dy NEA Inc "Forget it, man! Thanks to the energy crisis they're all wearing long underwear!” The Lethbridge Herald S04 7th St S. Lfltnnridg«. AltMrit . LETHBRIDGE HERALD CO. LTD . Propriitort «nd Publlilwi Secoro Ci«aa Mail ft«aistr«t<on No Mi2 ( CLE-OW MOAERS.EailOranrJ Publisher    , OOh H. pillino Mcntgmo Editor DONALO R. [XJRAM G«iw«i M*nag«r ROYF. MILES A(lv«ni«in0 Mans0«r DOUGLAS K. WALKER Editorial Psg« Editor ROBERT U FENTON Circulation Manager KENNETH E BARNETT Bu»n«K Managar "THE HERALD SERVES THE SOUTH” ;