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Lethbridge Herald, The (Newspaper) - January 15, 1975, Lethbridge, Alberta 4 THE LETHBRIDGE HERALD Jtnuwry 15, The Kissinger A transcript of the Kissinger Business Week interview has been dis- tributed widely by the U.S. Information Service and it is apparent, on reading the questions and answers, that this was done not to broadcast any blunt warning to the Arabs about the use of force in connection with oil supplies but to put the U.S. Secretary's remarks in their proper context. Whether Kissinger's remarks about military force can be called a blunt warning is questionable. They seem more like a brief recognition, in passing, of a remote possibility that cannot be eliminated. They were elicited by two questions mid way in the interview in which Kissinger had already said, "The only chance to bring oil prices down im- mediately would be massive political warfare that is too high a price to pay even for an immediate reduction in oil prices." Following this early remark, the secretary spent considerable time spell- ing out action which could begin, in two or three years, to reduce oil prices. He listed four necessary conditions: A degree of consumer solidarity, a systematic effort at energy conser- vation, institutions of financial solidarity, and bringing in alternative sources of energy. If, indeed, the secretary's subsequent, remarks about the use of military force in "the gravest emergency" can be con- sidered a blunt warning, then, by the same standard he had blunt warnings for others, too. He had a blunt warning for consumer countries: "We will not go to a consumer producer conference without prior agreement on consumer co operation." He had a blunt warning for the U.S. Congress in a series of questions regarding the trade bill: "A president who has only million of credit flex- ibility over four years is forced in a crisis more and more to rely on diplomatic or military pressures. He has no other cards. The economic card has been effectively removed from his hand." He had a blunt warning for his own ad- ministration: "We have to announce our conservation plans more concretely before we will have an effective, negotiating position with the Europeans." And in discussing the world food supply, wherein he also.stressed the need for a systematic approach, he had a blunt warning for the American public on the question of whether allocating food abroad would drive up food prices at home: "We have to be prepared to pay some domestic price for our inter- national position." In short, in such an interview, anything taken out of context seems blunt. The over all impression is one of scholarly objectivity (which Kissinger" comes by honestly) about the need for a collective, systematic approach to economic problems, with occasional diplomatic lapses, as when he commented, "The whole western world, with the exception perhaps of the United States, is suffering from political malaise, from inner un- certainty and a lack of direction." Regardless of Kissinger's personal position, the United States cannot, of course, be exempted from this criticism. ON THE HILL Ityjou Clark, Ml'fur Rocky Moitniuin "Mom! Why is daddy writing a thank-you note to the Canadian Transport Stating the obvious By Tom Wicker, New York Times commentator Reprieve for school Both federal and provincial authorities involved in the possible closing of the Cow Camp school near Brooks are probably acting strictly according to the law. Sometimes that is not the right thing to do; sometimes a bit of flexibility is called for. Federal immigration authorities feel they have no alternative but to deport the key figure in the school as well as some of the students unless provincial authorities will give the school an en- dorsement. The facilities and program of the school do not meet provincial re- quirements for licensing under the Welfare Homes Act. Consequently the provincial authorities have been unwill- ing to give either formal or informal sup- port to the school. Standards exist for the protection of people. Ordinarily it would be right to ex- pect a project such as the Cow Camp school to conform to the standards set by law. This project, however, may warrant some leniency during a trial period. The concept of shaping character through roughing it as frontiersmen is not really new, but this particular manifestation of it is new and should not have too heavy a demand for conformism placed on it too soon. All the answers for dealing creatively with those who do not fit into existing moulds have not yet been found. Those with the concern and the courage re- quired to try something different ought at least to have consent to steer their course until their concept has had a fair chance. Some sort of reprieve for the Cow Camp school experiment could surely be possible even if provincial authorities cannot give a full endorsement. The reprieve would Tightly be made con- tingent on the school being kept under observation and being under obligation to meet certain standards in a reasonable time. THE CASSEROLE At least one organization has finally broken out of the Christmas card routine. This year, instead of mailing the usual several hundred cards, the officers and several senior members each took a list of names and delivered the holiday messages in person, thereby saving considerable money, lighten- ing the post office's burden and, incidentally, doing the job a whole lot better. With each succeeding enquiry providing a new view on Canada's oil reserves, people hardly know whether to let their car engines warm up thoroughly, which was the proper way when oil was plentiful, or drive off im- mediately, as they were urged to do when oil was supposed to be scarce. A rather posh British school for girls has placed advertisements for two male employees it describes as "housemen." The job calls for a 44-hour week, pays a decent wage, and provides all meals. The ad says lit- tle about fringe benefits, but it does contain one intriguing line: "Protective clothing supplied." (No, it's not St. Trinian's; it's Rodean, one of the most exclusive in all Britain.) WASHINGTON Secretary of State Kissinger, backed by President Ford, has made the obvious but probably necessary point that in certain circumstances "where there's some actual strangulation of the in- dustrialized world" the United States would consider military intervention in the Middle East to break the oil cartel. Whatever the Ford ad- ministration might say or do, of course, the military option would continue to exist, at least for some other ad- ministration. And the oil countries could never be positive it'would not be used. On the other hand, nothing Kissinger and Ford have now said makes the use of force any the less a remote and un- likely course a failure of policy rather than a rational policy in itself. Still, it seems useful that the matter has been overtly raised because, raised or not, the possibility of force un- derlies the bargaining and game playing between the consuming and producing nations. The predictable defiance voiced by the Shah and other Middle Eastern leaders was, in effect, a recognition of that root fact, and President Sadat's promise that the Arab nations would blow up their oil wells in the event of intervention only threatened what any rational Western planner would have to expect. There is a subtle but vital distinction, however, between the threat of force, now raised by the United States and recognized by the oil producers, and the actual use of force. The threat must play its role in the international bargaining, not because might makes right, but because military power or the lack of it are realities in the world, just as much as oil reserves, embargoes and. price struc- tures. Many Americans for ex- ample, deplored the immense and immoral waste of American lives and resources in Indochina not only because of the unwarranted political interference there and the havoc wreaked, but also because the nation was diverted from its real interests at home and elsewhere in the world. Only the most foolish consistency would extend that view of the Indochina war into a willingness to permit the "ac- tual strangulation of the in- dustrialized world" by the oil cartel. That point has the more force because the leaders of the oil producing countries are scarcely acting out of altruism or with humanitarian intent. But for their own relatively narrow political purposes. In such cir- cumstances, our ultimate reality military power must be as much a part of the bargaining as their ultimate reality the oil reserves needed by the industrialized world. All this is a long way from quick or mindless use of force itself. Military intervention, for instance, to restore the status quo ante the 1973 em- bargo, when the industrial nations particularly the United States exploited and wasted cheap Middle Eastern oil almost at will, would be indefensible. Force is not merely a last resort but a last resort against "strang- ulation." Not against discomfort or austerity. There are obvious practical difficulties that support mor- al imperatives against hair trigger military action. The Middle East is a big territory, for one thing. In his celebrated commentary arti- cle on the force option, Robert W. Tucker of John Hopkins University points to the Per- sian Gulf coast of Saudi Arabia as the best target; but military men interviewed by Drew Middleton of the New York Times saw greater ad- vantages in a Mediterranean operation against Libya. This difference suggests that no minor enterprise is being dis- cussed here; and no small is possible. Nor will most who ponder the matter dismiss as con- fidently as Tucker does the possibility of Russian counter- moves. Particularly if the Soviets' interests in the Per- sian Gulf and the Indian Ocean is as great as their naval buildup seems to suggest, they would not lightly suffer American military operations on the Arabian coast even aside from their commitments to and interests in the Arab nations. Even if an oilfield sufficient to break the cartel could be seized, rebuilt and put into production without super- power war, the other conse- quences of such an operation are intimidating nationalistic opposition throughout the world to an open' act of imperialism (however justified in Western and the guerrilla war- fare, sabotage and inter- national terrorism that would result and go on indefinitely. Even nations that might benefit economically India, or instance could well be driven by political pressures into condemnation, by word or deed, of the American intervention. Surely the persisting Arab hostility to Israel suggests how long such conflict would last; and one thinks of that nameless, never ending war somewhere on the far side of the earth that dominates the drably autocratic Western society envisioned in Orwell's 1984. The threat of force, therefore, does not really suggest an option easily open to the United States. Rather it reminds the oil producing nations that they must choose, too that past the point of raising their peoples' stan- dards of living and achieving their justified political and economic places in the world, trying to "strangle" the in- dustrial world can only bring disaster for all. As we start 1975, the great "energy issue" is back where it should have stayed at a negotiation between the premiers and the prime minister. As most Canadians now know, both Ottawa and the provinces have rights over resources. The provinces control production within a province; Ottawa controls transport between provinces, and exports to other Countries. Although both have rights, it has long been accepted that the provinces' rights are stronger. That was symboliz- ed by the explicit transfer to Alberta and Saskatchewan of authority over resources in the Resources Transfer Acts of 1930. In the past, conflicts have been worked out quietly, in negotiation. Then two things changed. First, energy became more important. Its price went up in the world, and producing provinces realized they had an asset which could let them build their long term in- dustrial strength. Second, Ot- tawa decided that it should rule on energy questions, breaking the practice of the past. Ottawa's first act was to impose unilaterally and without consultation with producing provinces a very high export tax. Next, Ottawa introduced a bill the Petroleum Administration Act which would give the federal government the uni- lateral power to set petroleum prices in Canada. Previously, those had been set by agreement, now Ottawa sought the power to act alone. Finally, Finance Minister Turner proposed to tax royalties as income. Although disguised as a tax measure, that is really a political move, designed to demonstrate the federal power to rule (or ruin) the resource industry. Mr. Turner added another thrust when he threatened to tax provincial Crown cor- porations which deal with resources, despite the tradi- tion that one level of govern- ment doesn't tax the other. Public opinion was usually with Ottawa because most Eastern Canadians had been persuaded that producing provinces were greedy, and wanted the East to "freeze in the dark." However, public opinion began to change, when Conservative MPs pointed out that the struggle between governments was drying up exploration, and threatening supply. In addition, other provinces began to worry that a federal raid on control oyer petroleum could be followed by federal raids on control over other resources. That concern became particuarly acute when Mr. Turner proposed to tax provincial Crown corporations because Ontario Hydro and Quebec Hydro are provincial Crown corporations, in the resource field. The government had intend- ed to force the Petroleum Ad- ministration Act through Parliament before Christmas. However, it faced sustained resistance in Parliament, led by Bob Stanfield, and opposi- tion in the provinces. So Ot- tawa drew back, and agreed to hold that measure until first ministers could meet. No one knows what the future holds. At least, we seem to have ended the period where Ottawa acted uni- laterally, and the governments are back at the negotiating table. Letters Inventory tax relief Once again we are given a clear display of the government's feeling toward justice. In the latest budget proposed by Mr. Turner, tax relief was given to the trans- portation industry and to ma- jor industrial equipment, but there was no relief for inven- tories which have already paid the federal sales tax. The government now has given tax relief to the transportation in- dustry for inventories but refuses to allow the same privilege to those of us in the industrial equipment area. Phone calls to Ottawa have, produced no concern over this inequity, to the contrary, a statement that this is the firm policy of the finance department. A retail dealer has very lit- tle control over what he receives or when he receives it, especially in the supply situation we are in now. We tried to get industrial units in inventory all year, but the cupboards were bare until just prior to the budget release, when our supplier shipped us two carloads of industrial equipment. We are now faced with passing this on to the buyer or absorbing it. It is im- possible to pass it to the buyer as this would price us out of competition and legislation now states they do not have to pay federal sales tax. For a new and struggling business, absorption of this amount of money is very close to finan- cial suicide. One major reason for the lack of sound legislation is the fact that legislators are primarily made up of people with professional and academic qualifications instead of successful people from the free enterprise area of business. Mr. Trudeau's just society is based on who has the biggest political clout. D. P. DALKE Lethbridge Winter games admission The new economic sharing requires a different attitude By Dian Cohen, syndicated commentator MONTREAL The Queen, the governor general and the prime minister all told us the same thing this New Year: we must learn to share more with others. A noble sentiment, but one more easily said than done. 'May I go to the union meeting making a determined stand against our tyrannical employers." "Sharing" in Canada has always meant widespread agreement that poorer Canadians deserve to improve their position more than richer Canadians. That's what progressive income tax and unemployment insurance and social assistance are all about all these schemes redistribute income from peo- ple who have it to those who don't. "Sharing" has also meant sending a slice of our economic pie overseas to developing countries. 1975-style sharing will mean something far different. Until now, the solution to the problem of people demanding more was simply to bake a larger pie. By ex- panding the output of goods and services, lower and mid- dle income earners could have more, but upper income earners didn't have to give up more. For example, in 1973, the government, found itself with a billion dollars it hadn't anticipated. Instead of giving the money back to the people who had contributed it to the tax coffers, the government used it to finance a new family allowance scheme. The 20 dollars a month each child in the country gets is now tax- able. But because of our progressive tax system, families in lower income tax brackets keep more of the "Baby bonus" than families in upper .brackets. Everyone gets something extra, but lower and middle income groups improve their relative positions in terms of sharing, the pie. In 1974, the pie or the economic wealth of the country was worth about J140 billion. Compared with 1973's 120 billion dollar pie, that looks like a much bigger pie. In fact, three quarters of the 16 per cent increase was eaten by inflation, leaving us to share a real gain of only about 4 per cent. For the past nine months, the pie hasn't (frown at all. All indications are that the solu- tion of expanding production rapidly is out for the next few years, if not forever. Even the finance minister is convinced, or so he said in his November budget speech, that we must reach a Consen- sus on who's going to get what. Under these circumstances, continued improvement in the positions of lower and middle income earning Canadians can be met only by freezing or even diminishing the absolute incomes of the upper group. In this connection, we are not talking about merely dis- mantling a few vast fortunes, although one can imagine how politically difficult that would be. One enters the upper 20 per cent of income earners in Canada with an income of about a year. These 20 per cent enjoy about 45 per cent of the national wealth. To eliminate the advantage these people have over the "average" Canadian, the "rich" would have to give up a quarter or a third of their in- comes. Just to narrow the gap between the rich and the poor, the rich would have to give up a sizeable chunk. That in itself would create enormous political strains. What makes it even more difficult is the present world environment, in which in- comes and resources are be- ing redistributed among nations. Canada's per person national wealth is some FORTY TIMES greater than India's or Malawi's. If it turns out that, for humanitarian or other less altruistic reasons, more resources are transferred to the developing countries, then affluent countries like Canada, which are expanding slowly or not at all, may find themselves for a period of time with declining physical output per person. Up to'now, sharing has meant dividing up an increas- ing number of cars and homes and TV sets. Now it means trying to divide up the same number of cars and homes and TV sets. For the immediate future it may mean dividing up a shrinking number of them. The Canadian economic system works on the principle of competitive self-interest. It seems likely that each of us will struggle to maintain our relative shares. In doing so, we will build in more inflation as