Lethbridge Herald, The (Newspaper) - July 24, 1970, Lethbridge, Alberta
SCATTERED SHOWERS HIGH FORECAST SATURDAY 75 The Lethbtidge Herald VOL. LX1II No. 188 LETHBR1DGE, ALBERTA, FRIDAY, JULY 24, 1970 i'HICE NOT OVER 10 CENTS TWO SECTIONS 20 PAGES Full-Scale Depression Ruled Out By PETER G. NEWMAN OTTAWA Out of the profound distress caused by this year's stock market decline the most severe since 1929 has come a wave of dour predictions that North America is on the verge of a major de- pression like the one that blighted the thirties and ruined the financial well-being of a generation. John Kenneth Galbraith, the Harvard economist- diplomat, has flatly forecast that "we are reliving the dismal history of 1929." Cyrus Eaton, another Ca- nadian export who is now a leading Cleveland indus- trialist, recently told the U.S. Senate committee on economic affairs that "the U.S. is on the verge of a depression that will go deeper than 1929 did." Describ- ing himself as "a concerned Eaton ac- cused the Nixon administration of failing to recognize "the. portents of impending economic doom." While both men were talking about the American economy, nothing Canada could do would prevent a U.S. depression from washing over the border. If such predictions turned true for the U.S., the Canadian economy would also suffer its worst decline in 40 years. But the fact is that no such prospect is in view. Neither the ministers who occupy Ottawa's economic portfolios, nor, even more significantly, the senior bureaucrats whose daily task it is to sift and project all of the available indicators that determine the na- tion's economic health, foresee the coming- of an eco- nomic apocalypse. At the moment, no one in a responsible position is predicting a depression a state of business col- lapse which economists generally define as a 20 per cent drop in ithe gross national product and a cor- responding rise in unemployment statistics. No Storm Signals The basic elements of serious imbalance in the economy that might trigger a full-scale depression simply do not exist. In attempting to assess our economic future, it is essential to differentiate between a stock market collapse and a full-scale depression. One interpreta- tion of this year's grievously poor stock market per- formance is that it was a healthy and necessary ad- justment to the overheated economic book of the six- ties, placing the market within manageable and realis- tic bounds, reducing its potential to drag down tha economy. There have been 10 major stock market de- clines since 1945, and none of them set off a de- pression. This. spring, when the Dow-Jones average dropped 160 points to 630 between early April and late May, saw the worst decline of the 10, but even though market trends remain uncertain, most analysts are now predicting a slow and erratic climb. The great depression that did take place in the thirties was preceded by wild stock market specula- tion which drove Dow Jones averages down to 198 a drop of 48 per cent in nine weeks1. But the stock market crash did not cause the de- pression. Certainly, there was a business downturn in mid-1929, caused largely by the production of indus- trial goods outrunning consumer and investment de- mands. More deep-seated factors were at work to turn what was a fairly minor inventory recession into a devastating depression. These included: the maldistribution of income, with five per cent of the U.S. population earning one-third of aU personal incomes; weak corporate structures, winch meant that the loosely-held investment trusts could not survive the pressures of a business down- turn; a poorly policed banking structure, which prompted many bank failures as over-extended cus- tomers were unable to pay off their debts; and prob- ably most important of all, the poor state of business intelligence, which meant that no one, especially gov- ernments, knew exactly what was happening to the economy or how to react. None of this is true in the seventies. Ottawa's eco- nomists are continuously watching every business in- dicator for weak spots. In the 1920s, most govern- ment statistics were collected and published only once or twice a year. Since 1945, the Dominion Bureau of Statistics has been keeping a daily watch on Can- ada's economic progress. The DBS figures also help businessmen make sounder decisions, so they don't saw off too many limbs behind them. Market Stronger The stock market itself is in a much stronger position today. In 1929, the amount of cash necessary to buy stock was decided by the broker or his bank- ing connections'. Ten per cent was usually enough. Now, Canadian investors need at least 50 per cent cash. In 1929, there were virtually none of today's restrictions on pool operations a method nimble traders used to drive up the price of a stock by selling shares to one another. Other forms of investment are also much more firmly based. Mortgages are now drawn up for 25 and 30 years, to be paid off in monthly installments. Before 1933, mortgages rarely ran beyond five years and mainly fall due in a lump sum. Pay- ment was demanded after the 1929 and a wave of foreclosures resulted. Income distribution is not nearly so lopsided now as it was in 1929. Provincial securities commissions keep tabs on the investment trusts; our banking sys- tem errs on the side of caution rather than foolish risk-taking. Despite all of the safeguards, the stock market could still go on a speculative rampage; but as of this moment, it docs not possess the potential to drag the economy down to anything like the great depression of the thirties. Tomorrow: Canada's Economic Outlook (Copyright 1910. Toronto Star LimlteB) Canada Record Turnout Reviews Jams Grounds Arms Policy OTTAWA (CP) The Cana- dian government is reviewing its policy of permitting the sale of spare parts for military air- craft to South Africa, it was an- nounced today. The decision was taken in light of a United Nations Secu- rity Council resolution Thursday which called for an uncondi- tional embargo on all arms to the white-supremacist republic. Canada has banned the sale of military equipment to South Af- rica since 1863. However, it has permitted the sale of spare parts, including piston engines, for aircraft sold to the republic before that time. Each individual sale of en- gines has required government clearance before being allowed to take place. The total value of all such spares sold to South Africa last both civilian and mili- tary Spare parts for civilian planes would not be affected by the new review. Thursday's Security Council resolution was stronger than a 1963 UN resolution providing for an arms embargo. It calls on all states to "strengthen the arms embargo" and to refrain from selling arms ot South Africa "unconditionally and without reservations what- ever." It specifically urges that all sales of spare parts for vehicles and military equipment used by South African armed forces and paramilitary organizations be terminated. At the .UN earlier this week, Ambassador Richard Akwei of Ghana criticized Canada for supplying spare parts for South Africa military aircraft. A record crowd attended Whoop-Up Days 1970 Thursday as people packed into tire more than the previous record set in 1968. Total attendance to dale is less than short of the 1966 exhibition officials say they are confident a new attendance figure will be set this year. A capacity crowd was out for the first night of the Whoop-Up Hodeo last evening, filling the gi'andstand and spilling out into the standing room only area below. The rodeo continues tonight and Saturday, with about 000 in prize money up for grabs. Chuckwagon racing ended Wednesday, so the rodeo ev- ents start at p.m. BET More than was bet at Whocp Up Downs Wednesday, bringing the total for the six- day meet to well-over A full card is offered for the windup Saturday afternoon, ivith post time at 2 p.m. Pari-mutuels have been a success their first time offered at Whoop-Up Days and are likely to be continued next year. Midway activities continue to attract large crowds, with 18 thrill rides, 12 kiddie rides and 65 concessions and games to occupy the faifgoer. Exhibitors' booths under the grandstand and in the Youth-a- rama ara popular, displaying the latest in many businesses' products. The Kaleidarts display, con- nected to the Youth-a-rama has daily demonstrations of a num- ber of artistic endeavors, in- cluding painting, pottery, sculpture and lapidary. The weather man forecasts some showers this afternoon and Saturday afternoon, but adds that they are daytime phenomena, and the evenings should be dry and warm. Exhibition officials suggest that rain shouldn't matter: most of the Whoop-Up displays and activities are covered or inside buildings, and many of the midway activities offer1 pro- tection from showers. UofL Residence Loan Approved Uranium Industry Gets New Deal OTTAWA federal government will continue aid to the Canadian uranium-mining industry only if it can be con- Captain Blamed OTTAWA (CP) An investi- gation by a Nova Scotia judge has blamed the ship's captain for the Feb. 4 oil tanker sinking that polluted 125 miles of Nova Scotia shoreline. Mr. Justice G. L. S. Hart of the provincial Supreme Court said in his post-investigation re- port that the system of naviga- tional aids in and aroimd Cheda- bucto Bay where the sinking oc- curred was perfectly adequate. Cause of the sinking must rest with Gsorge Anastassopoulos, who was accused of "improper navigation" of the tanker, regis- tered in Liberia, but owned in Greece, the judge said. The nub of the judge's conclu- sions was contained in a brief press release issued by the transport department, which re- ceived the investigation report Thursday. A copy of the full re- port was to be released today. The tanker want down after running up on Cerberus Rock. A program to clean up the oil that has fouled the Nova Scotia shoreline is still under way. vinced that financial help is necessary, Resources Minister J. J. Greene said today. He said the government will consult the uranium producers and independent auditors and consulting engineers on the form of continued help, replac- ing the stockpiling programs which started in 1963 and ex- pired last June 30. The govern- ment has built up a stockpile of uranium. An aide to Mr. Greene, at- tending the news conference, said that Denison Mines contin- ued to pay dividends out of profits while it was selling large quantities of uranium to the government stockpile. He said that was anomalous, and it "could be" that government help should only be enough to maintain a company in exist- ence without sufficient'profit to pay dividends. Mr. Greene did not demur. Mr. Greene said it is in the public interest to maintain a Ca- nadian uranium-producing in- dustry, but this should be done "at the minimum cost to the public purse." Stockpiling was costly, and might bedevil the industry in fu- ture if it were continued, he added. When a large stockpile overTiangs the market it sup- presses any price rise that might occur. The Canadian gov- ernment now has tons of uranium stockpiled. The U.S. government has tons. ROUGH RIDE Darryi Brown of Deer Park, Wash, earned lop points of 76 for this rough ride aboard Chuck- wagon. Brown led all competitors in the first night of Whoop-Up Days rodeo action. The action continues tonight at 7 o'clock with the finals set to go Saturday. Mail Chess Game Hits Lethbridge The postal chess game struck Lethbridge today as postal workers walked off the job. Post offices meanwhile were closed down in Ontario, Mani- toba and British Columbia points. Man Looking For Bathroom Falls 100 Feet Into Gorge NIAGARA FALLS, Ont. (CP) A man looking for a place to go to the bathroom accidentally jumped over a retaining wall Thursday night and fell 100 feet Into the Niag- ara Gorge. William Bertrand, 27, of Campbellford, Ont, is in fair condition in hospital with head Driver Killed At Redcliff MEDICINE HAT vid Oulette, 36, of Redcliff, was lulled today in a two-vehicle collision on the Trans-Canada Highway at Redcliff, four miles west of here. injuries and multiple frac- tures of arms, legs and one hip. Mr. Bertfand told rescuing firemen he and his wife were riding their motorcycle through Queen Victoria-Park when he decided he had to go to. the bathroom. After parking the motorcy- cle, he asked a man where to go and the man suggested Mr. Bertrand hop over the retain- ing wall in front of the Niag- ara Parks Commission build- ing. Mr. Bertrand vaulted over the wall and fell 100 feet on to the rock below. Firemen and police spent an hour getting the injured man out of the gorge, using an aerial ladder truck and a basket stretcher. A routine walk out of Leih- bridge union member's began at midnight Thursday and will continue until Friday, in sup- port of the. rotating strikes across the country. The lock box lobby in the main post office will remain open today, but all other facili- ties will be closed. There will be no mail pick up and no mail delivery in the Lethbridge area throughout the 24 hour strike. Unbss further disruption o( service is ordered, 'Union of- ficials state that normal ser- vice will be restored Saturday. Other Alberta'points'struck: Calgary stations D and E, Ed- monton station E, Edson, Jas- per and Hinton. In British Columbia, North Vancouver and two points in Vancouver were struck. A post office spokesman in Ottawa said today's walkout will mean a delay in. the de- livery of pension cheques for retired defence department employees and veterans, Can- ada Pension Plan and some widows' cheques. Sparwood-Fernie Pipeline Proposed TORONTO (CP) The com- panies studying a proposal to transport coking coal across southern British Columbia by pipeline believe they have a breakthrough in the develop- ment. The proposal, sponsored jointly by Canadian Pacific Railway Co. and Shell Canada Ltd., is for a 490-mile pipeline from Sparwood, B.C., north of Fernie, to the new Roberts Bank coal-loading facility near Vancouver. The coal would be ground into powder, flushed Uirough the line suspended in water and recon- stituted at the receiving end. A. F. Joplio of Montreal director of development plan- ning for CPR, said in a tele- phone interview that developing a process to reconstitute the coal has been the main obsta- cle. He said groups of Japanese businessmen, representing com- panies that would buy tire coal, will visit Canada in August and September. They will tour a pilot plant in Edmonton which was set up to test the reconsti- tuting process. Mr. Joplin said CPR will try to convince the Japanese group to take a sample load of the coal, which he said "looks just like black and test it in Japanese mills. Tire engineering planning for the project is being done by ShelPac Research and Develop- ment Ltd., Toronto, a company owned 50-50 by CPR and Shell. If the pipeline is built, construc- tion would be by Cascade Pipe Line Co., a wholly-owned sub- sidiary of CPR. L. F. Bolger, ShelPac general manager, said tbay believe the reeonstitution process is both technologically and economi- cally feasible. Other pipelines have been built for transporting solids, but none for celling coal. If built, tha B.C. project would be the longest solids pipeline in the world. Mr. Joplin estimated it would take about three years to com- plete tire pipeline after approval by regulatory authorities. He said the line would not cross provincial boundaries and only approval from B.C. authorities would be needed. CPR has announced it is mak- ing investments in new rolling stock to bring coal to the Rob- erts Bank deep-sea port. "We view these two tilings as he said. A pipeline would have a fixed capacity, he said, and rail cars would be needed to adjust for variations in demand. And not all customers would want the reconstituted coal. Exhibition Program FRIDAY fashion show House enter- tainment SATURDAY 12 Casino pari-mu- luels A federal loaa has been approved for construction of the residence portion of the University of Lethbridge West Lethbridge campus. The money will build 271 resi- dence units to house 391 stu- dents in the fall of 1971 when the rest of the 516 million cam- pus will also be complete and occupied by about stu- dents. Initially the money was ap- proved several months ago by the Urban Housing and Re- newal Authority in Edmonton, which was asked by the Cen- tral Mortgage and Housing Corporation to divide up the million made available by CMHC for Alberta campuses this year. The U of L was placed sec- ond on the UHHA's list, follow- ing the University of Calgary. SITUATION CRITICAL While university officials greeted the news with enthu- siasm here, the U of L's hous- ing office says the accommoda- tion situation for students is still critical, especially if view- ed with the added needs of the Lethbridge Community College. Tlie combined projected en- rolment for the two institutions for this fall is students. Of this 750 will be city students at the university and 920 will be out of city students. Projected for the college is 250 city students and 450 out of city. The calculations show out of city students will be at- tending university and college this fall. Of the total only 105 can live in residence. This leaves who will be attend- ing school from out of the city and will require some kind of accommodation. City council is to meet in spe- cial session at 5 p.m. Monday to give additional review to the situation. In special demand are. basement suites. Projections are that by tha fall of 1971 nearly stu- dents will be attending univer-' sity and college here. Seen and Heard ABOUT TOWN 'TRUE father and son ex- change as Bernie Sim- mons wheeled off on a real estate call on his son's bike, while his son had the car at the fair Casey Wisitcrke spending so many hours barking at the Jaycee bar of gold booth at Whoop Up Days that he's losing his ac- cent a big shaggy dog on 13th Ave. N., who. waits .every morning for the post- man, broken hearted this morning when the postal strike kept his friend at home. Union Defies Laws House enter- tainment Bar of Gold and Kinsmen car draw. VANCOUVER (CP) Ignor- ing provincial labor laws, pulp and paper workers threw picket lines around seven British Col- umbia mills today. The walkout by some members of the Pulp and Paper Workers of Canada shattered the relative calm that prevailed for 24 hours in the continuing la- bor-management crisis in B.C. and faced the Social Credit ad- ministration of Premier W. A. C. Bennett with its second di- rect challenge from labor within a week. The pulp workers, claiming the move was unwarranted in- terference with their right to strike, set up picket lines at 8 a.m. today, the hour they had established as a strike deadline earlier In the week. Mills affected are the B.C. Forest Products plant at Crof- ton, the Mac.Millan Bloedel plant at Harniac and the Tahsis mill at Gold River, all on Van- couver Pulp and Paper Ltd., at Skooku- chiik in Hie East Kootenay area; the Rayonier Canada Ltd., plant at Wo'odfibre, north of Vancouver: and the adjoining plants of Prince George Pulp and Paper and Intercontinental Pulp Co. Ltd. at Prince George.