The Lethbridge Herald (Newspaper) - January 28, 1974, Lethbridge, Alberta
4-THE LtTHMIDQI HERALD Monday, January M, 1174 Sink or swim The- French have done it again. In devalueing the franc by floating it independently they have once more taken unilateral action based on self- interest at the expense of their Common Market partners, and perhaps at the greater expense of European unity itself. The step was taken to increase exports and to help avert a huge balance of payments brought about by the explosive increase in the price of oil. It was taken in spite of France's previous objections to floating currencies and in defiance of solemn monetary agreements among Common Market countries, including a joint float of their currencies which was agreed upon last March. This joint float, known as "the assured that their respective currencies would fluctuate no more than a fixed rate against each other and float as a unit against outside money. The countries still remaining in the joint float, West Germany Belgium, Denmark, Luxembourg, The Netherlands, and the two non-Common Market countries of Norway and Sweden, have determined to carry on, although they have increased the fixed rate of fluctuation from 2.25 to 4.5 per cent. Some are bitterly critical of the withdrawal of the Common Market's monetary leader, viewing it as a severe setback to European economic, political and monetary unity. They suffer the same problem as the French and yet the French solution is really at their expense. The French newspaper, Le Monde, criticizes the decision and brings up the analogy of France's relationship with NATO, from which it has withdrawn while still relying on the security of American protection. Now, it says, France has withdrawn from "what little monetary solidarity it had with its Common Market and yet "counts on its partners not to take any measure which would close markets to it." The West Germans are disappointed because they see the move as a severe blow to a European community they value highly. At the same time, it will give them greater internal economic stability because they will not have to bolster a declining franc within the framework of the snake. In their defence, the French point out that, in floating, the franc has depreciated only about four per cent, whereas if they had obtained permission to devaluate, it would have dropped by twice that rate, greatly increasing the instability and chances of competitive devaluations. The fears expressed by Finance Minister John Turner at the monetary meetings in Rome, regarding futile and predatory trade and financial devices to reduce deficits, no longer seem to be exaggerated. However, while the French move is detrimental to hopes of European unity, there is something optimistic to be said about it. It may prove to France and other adherents of fixed exchange rates that, in a time of turbulence in trade such as the world is now seeing, floating currencies, with agreed rules, is the only way to put to sea in search of genuine international monetary reform. Money talks Businessmen in Canada feel that the division of powers between federal and provincial governments hampers economic development and that more power should be given to the federal government. This is the finding of a survey of 222 executives conducted by the Financial Times. The business leaders felt most strongly about the desirability of federal control in such basic areas as oil, gas and mineral production, and showed less concern for federal control in areas like cable television, farm marketing boards and private pension plans. Sixty-five per cent of those polled felt that oil and gas development should be controlled by Ottawa; 69 per cent thought that pricing of oil and gas should be controlled by the federal government. Sixty-eight per cent of them also thought the Canadian constitution, i.e., the British North American Act, would be revised within the next decade. While this survey seems to show a strongly felt need for centralization of power, it does have a. certain built-in geographical bias. The respondents follow the distribution pattern of the "Financial Times, itself, and of those executives surveyed, 30. per cent came from the western provinces, eight per cent from the Maritimes, and 62 per cent from Ontario and Quebec, which would seem to'explain why they felt most strongly about federal control of oil and gas resources. However, the main point of the report, that economic development hampered by the present division of powers and inevitable dissension over jurisdiction between Ottawa and the provinces, should not be dismissed. Organic food syndrome misleading By Don Oakley, NEA service A poorly educated generation of food buyers may be developing an "organic food warns a nutritionist. Worried about commercially processed food, more and more people want to return to the "good old days" when almost everybody home-processed his food. But frequently, inexperienced home canners expose themselves to botulism, a form of food poisoning. In the past three years, says this nutritionist, because of the return-to-the-land spirit, botulism incidents have doubled every year in the U.S. Currently about 10 people die annually from botulism in foods canned in home kitchens. Roundup of world economic situation By James Greenfield, New York Times foreign news editor NEW YORK No one not even the optimist was willing, as 1973 began, to predict that economically mankind was heading for a good year. But in a world already toughened by endemic inflation and calloused by natural disaster most of the economists thought 1973 would at least be good enough. And while no one was rash enough to view the future of the Third World with optimism, there was hope that if the developing nations did not make halting progress they would, at least, pass through the year holding their own. Then came the energy crisis. Not since 1952, when Iran nationalized her oil fields had the supply of oil so commandeered the attention of nations and frightened them so much. As the price of oil jumped up, Secretary of State Henry Kissinger calculated the extra costs for 1974 and warned that even the industrialized nations would be hard-pressed to find the additional funds. The higher cost, plus inflated costs of manufactured products, would, he warned, bring on a "worldwide depression Equally dire was the Shah of Iran's warning as he led the world's producers to a new high of a barrel for the posted price of Persian Gulf crude. "This is the end of an era for the industrialized he said in Teheran. The world's apprehension varied, but no one felt safe; the economics of the new crisis were clear and simple enough to make them all the more frightening. The industrialized nations might be able to dig up the additional money but only by radical shifts in their economies. Japan, for example, began to quietly cut out welfare provisions in her budget to make up for the billion the country had to find for oil. India brooded, and cut her five-year plan. Financial experts predicted that higher prices would bring as much as billion in 1974 to African and Middle Eastern producers compared with billion in 1972 only half of which, experts estimated, the sup- plier countries could conceiv- ably spend in their own econo- mies. Where the other half will go is worrisome. Experts predicted that a large, and probably floating, sea of surplus oil revenues could swamp the existing monetary system, drowning existing trade surpluses in its wake. World aid programs were another casualty. They will not, in 1974, come even close to keeping pace with the added oil bills. The economists saw all this as the" start of a vicious circle in which a slowdown in the rate of growth in the industrialized worlds result in a drop in the raw materials imported from the developing world and, as an ultimate consequence, a drop in world markets. Although it did nothing to ease the world's worries, the crisis also underlined the fact that the world's growing interdependence made it mutually vulnerable. While some nations partially blunted their supply problem, no one escaped the consequences of the huge price increases. In turn, the higher price raised the cost of such petro chemical-based commodities as fertilizer, which, in turn, raised the price of food. The cost of fertilizer in the Soviet Union and even the weather in the Ukraine became a matter of concern to the farmer in Iowa. Interdependence did not, however, bring co-operation. From the start, most European nations blamed the U.S. mideastern policy, from which they had been largely excluded, for their predicament. Mideastern policy, since the mid-1950s had been primarily an American responsibility, with the British and French roles and presence diminished to almost zero. So why, asked most of America's allies, co-operate with Washington now? With the supply problem, halt a dozen nations, led by France and Japan, rushed off to make their own deals. The Israeli-Egyptian disengagement in the Sinai was a step forward and Secretary of State Kissinger was optimistic that it would lead to at least a relaxation of the Arab embargo. But the gap between disengagement and actual peace was still wide, and the Arabs were bound to keep their hand on the tap in case future bargaining bogged down. A growing awareness on the part of the oil producers that world depression was not to their advantage was a promising development but it was still far from clear if it would force them into backing down on prices. Still, they were far from united on the issue, and the consequences of their pricing action were bringing counter pressures from Africa and Asia. Even so, those happier days when predictions of the world economy were measured in terms of growth in per-capita income and balancing of imports against exports seemed, as 1974 began, to be far, far away. Poor of earth pay heaviest in crises By James Reston, New York Times commentator WASHINGTON One of the bitter tragedies of the present world crisis is that the heaviest blows are falling, as usual, on the poor of the earth. For the rich, inflation, the energy shortage and rising food prices and unemployment are an irritation and at worst an inconvenience, but for the poor they are a disaster. The point is obvious, but it seems to have been missed by the House of Representatives in its recent vote to kill President Nixon's bill to aid the world's poorest countries through the World Bank's International Development Association. This vote tells a lot about the present mood of the Congress .and the state of presidential and democratic leadership. Though the danger of mass starvation in sub- Sahara Africa and in India and Bangladesh is now alarming, the House voted 248-155 against the relief sought by the administration, with 108 Democrats voting for it and 118 against it, and 130 Republicans voting against the president and only 47 Republicans supporting him. Now we are beginning to see the consequences of Vietnam, Watergate, and the turmoil of the Middle East. The House is surly and frustrated, disillusioned with foreign aid and foreign adventures, and hostile to a president who impounds funds for the poor at home while seeking more aid for countries overseas. President Nixon anticipated this mood but he underestimated it. By diligent private negotiating over the last year, and with the help of Robert McNamara, the head of the World Bank, he managed to persuade the other industrial nations of the world to increase, their "soft loans" to the poorest countries from 40 per cent to 66 and two thirds per cent, allowing the United States to reduce its contribution to one- third from 40 per cent. Even at 40 per cent of the total funds contributed by the rich nations through I.D.A. to the poor nations, the United States was putting up less of its gross national product than 14 of the 16 most prosperous countries. Nevertheless, though inflation has reduced the value of I.D.A.'s soft loans by almost 30 per cent in the last few years, and though starvation is an immediate problem in most of the countries concerned, the vote for relief in the House wasn't even close. If this were an isolated case of nationalism, it might be passed over as a regrettable and correctable offense, but the tide of nationalism is running strong in the world again, and there is little doubt that the vote House probably be popular with the; voters in this country. Wherever you look in tke advanced countries today, you will find leaders arguing for a new world order and pointing to the monetary crisis and the energy crisis as evidence that this is an increasingly inter- dependent world, requiring mutual aid and co-operative action between nations. But at the same time, many of these same nations turn protectionist whenever they get in trouble. Europe is trying to form a more co- operative union, but when Holland irritates the Arab oil- producing countries, the Europeans leave the Dutch to fend for themselves. Likewise, though Europe is .engaged in the most delicate monetary negotiations in order to bring stability to its currencies, the French float and devalue the franc on their own. Now it is the House of Representatives that recognizes the danger of world hunger but votes against relief. The leadership on both sides of the aisle was appalling during the debate. A White House preoccupied with its personal and legal problems gave its bill very little support. The situation is particularly awkward now, not only THE CASSEROLE In contrast, the food industry has processed 800 billion cans of food in 20 years with a total of four botulism deaths reported. For those of us who don't want the risk of added chemicals in our food, organically grown foods should be available, Labuza agrees. But an organic label doesn't guarantee freedom from residues. Moreover, he says, the rate of loss of nutrients in unprocessed food is higher than in processed food. Thus the purchaser may actually be getting poorer nutrition than he could get from a supermarket. Japanese technologists are working on a new scheme to make the deserts green. With special plows, a thin film of asphalt would be sprayed at a soil depth of about three feet. This would hold irrigation water from going too deep, and prevent salts rising from the soil depths. The countries of greatest need are frequently heavy oil producers, and the asphalt could be removed before the is exported. The real reason behind the Arab freeze of oil prices for three months is finally becom- ing clear. It's all because of OILBOP, the U.S. department of commerce's computer program to calculate the impact on world economies of the soaring prices of oil. The simple truth is that OILBOP programmers have not been able to keep up with the changes in the price of oil and need the extra time. _____ Southern Alberta residents who head south for winter vacations will be interested to know that, according to the Wall Street Journal, a player can beat the house and make money on blackjack if he pays strict attention to the play and knows the system. It's all in the Journal. The latest bit of American graffiti is a cam- paign button reading, "Agnew and Eagleton in 76" and subtitled, "Nobody's perfect'." THE OF 4-BRIEF SHOULP THEM AT THE DESK because the World Bank will run out of "soft-loan" funds at the end of June, but because no nation is obliged to meet its commitments to I.D.A. if other nations refuse to meet their quotas. Secretary of State Henry A. Kissinger and Secretary of the Treasury George P. Schultz reacted immediately and strongly against the House vote, but the following day, Kissinger was comdemned on Capitol Hill for doing so. Accordingly, they are now turning to the Senate for a more careful reappraisal of the problem. Their aim is to get the decision reversed or at least modified before Feb. 11, when the world oil producers and consumers meet here to discuss co-operative action on the cost and distribution. of fuel. "How can we expect co- operation on oil if we will not co-operate to relieve Kissinger asks. But Congress has its mind on other things and so has the president. LETTERS TO THE EDITOR Contributions arrive The Herald's two cheques totalling a fantastic have arrived. Dr. Hitschmanoya missed the thrill of seeing them by a matter of hours, since she had left on her 1974 overseas survey. I can assure readers, however, that the knowledge of this sum being at her disposal will be a source of delight and gratitude during the tour, as she will now be spared the agony of turning down many desperate appeals calling for immediate action to which the USC could not possibly respond without the funds contributed by the people of Lethbridge and district. We at the USC have a very warm spot in our hearts for all The Herald staff who made this miracle possible. MISS JOAN OLIVER Information Officer. Unitarian Service Committee Ottawa AID promotes peace A new voice of the Indian people is on the move. This relatively new organization is called American Indian Defence or A.I.D. In many ways this American organization is much like a combination of the native court workers and friendship centres in Canada. Providing counselling to the people, teaching them their rights, and many other ways helping the people to help themselves. Like many young organizations A.I.D. has had trouble with people who have tried to make it militant and violent. The charter and bylaws clearly state that A.I.D. is to be a peaceful organization; aiding and assisting Indian people as they request it. Members of A.I D. are mak- ing every effort to show that the needs of the Indian people can be met through unity and brotherhood with all people They realize that only more destruction and hard feelings will result if the Indian and non-Indian do not learn to live together in peace and har- mony. They feel that every ef- fort must be made to live in true brotherhood for the betterment of all who inhabit this world. Indian people have always felt the need to live in close harmony with all that the creator has made. When this continent was first being settled by the White people, Indian and White worked hard helping each other to have a better way of life. The members of A.I.D. are praying for and working for a time when all people in the Americas will have an even greater degree of true brotherhood. Then they feel that this land will once again be blessed by the hand of God as we live in peace together SHIRLEEN HUNTER Cardston The Lethbridge Herald 504 7th St. S Lethbndge, Alberta LETHBRIDGE HERALD CO LTD Proprietors and Publishers Second Class Mail Registration No 0012 CLEO MOWERS. Editor and Publisher DON H PILLING Managing Editor DONALD R DORAM General Manager ROY f MILES Advertising Manager DOUGLAS K WALKER Editorial Page Editor ROBERT M FENTON Circulation Manager KENNETH E BARNETT Business Manager V v 9" 'Jist keep them tkree months overfte as then retain them to the New library and it will be a great help with the "THE HERALD SERVES THE SOUTH"