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Lethbridge Herald, The (Newspaper) - July 25, 1970, Lethbridge, Alberta Canada Seen In Stretched Recession By PETER C. NEWMAN (Special To The Herald) OTTAWA For a nation that has during most of the past 25 years taken prosperity for granted, Canada at the moment seems to be in a curiously perilous eco- nomic state. Unemployment is at a nine-year high; corporate profits are falling fast; the stock market has suffered its worst price slide since the Second World War; hous- ing construction across Canada is running between 20 and units below minimum requirements, Prairie wheat farmers have slashed acreages by half, their smallest planting since 1914. Most Canadians have been aware for the past nine months or so that our economy has been treading the precariously narrow path between inflation and reces- sion, a fact "which lias produced a fretful national mood, bordering on fear. Many people are anxiously asking what's ahead? What are likely to be the long-term ef- fects of this perverse situation that finds us simultan- eously experiencing serious prices increases and dan- gerously high unemployment diverse economic trends that customarily help to balance each other out? What's gone wrong, how serious is the ailment, and how can it be fixed? Economics is an inexact science and the number of diagnoses you get depends on the number of economists whose opinions you seek. But what consensus exists indicates that Canada is currently in what's described as "a stretched recession." The domestic slowdown probably started sometime late last fall; it wil get worse before it gets better; but we should turn to some sort of normal economic health sometime in 1971. The Postwar Period To appreciate the context of Canada's current eco- nomic outlook, it's necessary to trace briefly the pat- tern of our development since the Second World a quarter of a century that has' irrevocably altered the financial geography of this country, and with it the character and quality of Canadian life. Back in 1946, not even the optimists thought the Canadian economy could maintain the momentum of its wartime development and the pessimists were sure that another depression would soon close in. The end of the Second World War automatically cancelled billion in defence orders and threw nearly a million people into the civilian labor market. Serious unemployment was expected and many make-work projects were planned. J. D. Dean, a London financier, arrived in Ottawa with a scheme for converting Canadian shipyards into float- ing whale factories which would give employment to former naval personnel. Pockets of unemployment did1 develop, but Cana- dians never found time to go whale hunting. Canadian industry, its capacity boosted by the billion wartime investment in new machinery, rushed its conversion to civilian production, and Canadian consumers, with a war accumulated backlog of billion in personal sav- ings, set off the first postwar boom. The economic ex- pansion began to gather momentum in late February of 1946, and by the middle of 1947, unemployment was down to two per cent. The first wave of prosperity was just slowing down (there was a brief recession between October, 1948, and September, 1949) when the impetus of the Korean War and its accompanying demand for raw materials launch- ed another gush of investment. Meanwhile, domestic demand for consumer goods was kept at peak levels by the high rate of immigration from Europe. Following another year-long May, 1953, to June, 1954, the influx of foreign capital seeking a profitable habitat in Canada led the way into Hie third wave of postwar prosperity. lips And Downs The fact that the resource boom of the fifties failed to provide enough permanent employment, along with the simultaneous slowdown in world demand: for Can- ada's raw materials and some questionable management of federal fiscal affairs, eventually produced a sharp recession between April, 1957, and April, 1958. This was followed by 60 months of relative prosperity, but by March of 1961, the number of Canadians unemployed had reached or 11.3 per cent of the labor force; welfare payments to the jobless were running at million a week. But the pace of economic growth rapidly picked up again. The 103 months of uninterrupted prosperity that followed (until October of 1969) marked the'longest per- iod of economic expansion in Canada's history. Most of today's problems are a reaction to this phenomenally long record of economic growth. Between 1963 and 1968, for example, Canadian industry created one million new jobs. This was a frantic pace no econ- omy could maintain, and now we are paying the con- sequences. Not All Is Bleak But not all is bleak. The Gross National Product, which represents the sum total of the nation's economic activity, for the first three months of the year was billions up billions from the first quarter of 1969. For the year as a whole, economists are predict- ing a 6.5 per cent jump in GNP from 1969 although more than half of the increase will probably be account- ed for by price rises. Significantly, all of the increase during the first months was accounted for by ex- ports, which were 15.3 per cent higher than for the com- parable period of 1969. This gave Canada a trace sur- plus of billion, as against million last year. Some of this surplus will be dissipated by the higher (floating) exchange rate for the Canadian dollar, but the general export outlook remains strong. Vessel Rammed PORT ALBERNI, A 40-fcot Canadian fishing boat Is being towed to Port Alberni after it wfas rammed early today by a Soviet trawler in international waters off the west coast of Vancouver Is- land-. The Canadian fisheries patrol boat Tanu went to the scene after a call for help from Barry Robinson of Bart Alberni, Skipper cf the Dease Isle. Mr. Robinson had his wife and two children on board during the incident but no injuries were reported. Driver Demerit Plan Changes In Offing Lethbridge Fair In Final Hours Attendance at Lethbridge's Whoop-Up Days Friday beat the figure by close to per- sons, bringing the record six- day mark of into striking distance as the big show head- ed into its final hours Satur- day. A total of persons ERIC KIERANS Post Office Shutdown May Be Next Move By IAN PORTER OTTAWA (CP) Friday was "the worst day so far" in the postal dispute with close to men off the job, Postmes- ter-General Eric Kierans said in a statement critical of both union and treasury board nego- tiators. "I don't know how much longer we can go on like Mr. Kierans told a news confer- ence. "We're getting very close to the point wher'e I may have to propose a complete shutdown to the cabinet." He said the post office man- agement is anxious for a settle- ment and there is evidence that postmen are beginning to feel the same way. The-trouble, he said, is at the bargaining table and he spared neigher side from blame. The union system of rotating strikes began June 3 and more recently the post office has been locking up post offices on grounds they are made idle by the rotating shutdowns. NO CHANGE SUGGESTED Mr. Kierans did not, however, suggest that Treasury Board President C. M. Drury should change the government's offer to the unions. Mr. Drury is re- sponsible for all contract nego- tiations with government em- ployees. Mr. Kierans plays no role at all in negotiations. On strike Friday were men at 79 offices, postal offi- cials said. The main centres hit included Ottawa, the Montreal area, Vancouver', Winnipeg and Hamilton. A total of 49 tributary offices were shut down by postal au- thorities and men were sent home without pay. Negotiations, meanwhile, are not to resume until Monday. Mr. Kierans's statements about the dispute were later de- scribed by a spokesman for the Council of Postal Unions as fur- thef evidence of a bullying atti- ude toward employees. REVENUES DROP "The only mail the govern- ment is interested in is black- the spokesman said. The minister said postal reve- nues in July .will fall short by from original esti- mates for the month. About one-fifth of the loss will be re- covered in the form of pay lost by the men an the one-amd too-day strikes, ne said. The job of the post office, meanwhile, is being taken over to an increasing extent by pri- vate mail delivery firms' Mr. Kierans said. He counted 585 have gone into business only since the strike began. Toronto had 95 private operations, Mont- real 55, Vancouver 40, and even Moncton had three. Mr. Kieans said the proposed' transformation of the post office into a ci'own corporation might eliminate some of the bargain- ing difficulties. There is no pos- sibility of such a change rescu- ing the present situation, he said. He also forecast a postal rate increase, following upon the last one in 1968, saying Britain has announced its intention of a fur- ther increase and predicting the U.S. will also step up mailing costs. Breakfast Cereals Pass The Tests OTTAWA (CP) A food and drag directorate official says three Canadian dry cereals plus so-called hot cereals and those manufactured for infants con- tain the quantity of protein that provides adequate breakfast nu- trition. Dr. A, B. Morrison, deputy director-general of the directo- rate, made Hie statement in an interview, commenting further on critisism made before a U.S. congressional subcommittee about American dried cereals in general The milk involved helps, he said. The American criticism hit most of the brand-name dry the government verifies all claims made by cereal manu- facturers concerning nutritional value. Seen and Heard ABOUT TOWN TfORMER Lethbridge resi- dent Bus Murdoch wear- ing a back brace following surgery and getting tha "in- evitable" long. time no see back slaps from friends Joyce Haraga wonder- ing if rodeo bull dogging has something to do wiht a "funny looking dog" Linda Skclding upset after winning a large dog at the fairgrounds and later finding out the stuffed animal had a "broken neck." But Dr. Morrison said, in his selection of the three dry cer- eals that rank best here, that it was a "meaningless numbers game" because the evidence to the U.S. committee did not give the protein content involved. Proteins are among the most important dietary constituents. Dr. Morrison had said earlier that Canadian requirements laid down by the consumer affairs department, governing cereal advertising and package labell- ing, are much stricter than in the U.S. He had said Canada's tests were done 12 years ago. Dr. Morrison said one ounce of Kellogg's Special K, or of Na- bisco Shredded Wheat or Gen- eral Mills Cheerios, or any of the home-prepared, whole-grain cereals eaten with four ounces of milk, would provide adequate breakfast nourishment. Shredded Wheat and Cheerios ranked nutritionally low on the American report but testing of their Canadian counterparts showed them to be adequate sources of protein. In addition, all brands of in- fant cereal, served with or with- out milk, were also acceptable. Canadian consumers, Dr. Morrison said, may be sure that s t r e a med through admission gates, raising attendance for the first five days of the fair to about short of the record mark. Exhibition officials are look- ing for clear- weather to attract that number and more to the final proceedings today, which will close with tie drawing for the Bar of Gold of- fered by Lethbridge Jaycees, and a 1970 Mustang and Ca- maro, with a total value of 000, by the Lethbridge Kinsmen Club. DRAWING The drawing of tickets1 for the gold bar and two cars will take place at p.m. at the Kinsmen and Jaycees booths on the midway. First ticket drawn gets the choice of cars. An innovation at this year's Whoop-Up Days, horse racing and pari-mutuel betting, wound up this afternoon. About was bet at Whoop-Up Downs Friday, slightly lower than Thursday's The five- day total is about Another innovation, the Whoop-Up casino in the pa- vilion, was crammed to capac- ity Friday night. The rodeo, starting at 8 p.m., is expected to draw a capacity crowd, similar to the who packed in the grandstand Thursday, the show's first night. The youth exhibition board's coffeehouse features local tal- ent tonight. Top attractions are Point of Interest, We and Tear and a Smile from Letti- bridge, plus other folk-rock groups. And at 9 p.m. Calgary's rock group, Gainsborough Gallery, will headline a dance at the pavilion. About midnight a huge fire- works' display will bring to an end the 1970 edition of Whoop- Up Days. APPOINTED Anthony Barber, above, was named Great Britain's new chancel- lor of the exchequer, Satur- day, by Prime Minister Ed- ward Heath. He succeeds Iain Macleod who died sud- denly of a heart attack last Monday. Israel Studies Move Try one of these. They're handy for internal disorders.' U.S. Cuts Forces In Philippines WASHINGTON (AP) The defence department announced Friday plans to withdraw more than United States mili- tary personnel from the Philip- pines. said the action is part of the Nixon administra- tion's drive to save money and to reduce the U.S. forces in overseas bases. It will reduce the U.S. presence in the Philip- pines to about men. Cambodia's Queen Mother Booted Oul Of Palace PHNOM PENH (AP) Under cover of darkness, Queen Mother Slsowatch Kos- samak Nearireath left the Cambodian royal palace Fri- day night to take up residence in a small house that had been a museum for her son, ousted Prince Norodom Sihan- ouk. The queen mother was evicted from the beautiful and spacious palace by the gov- ernment of Premier Lon Nol, which cut off operating funds for the palace staff. Relations between the monarchy and the government which over- threw Sihanouk in March have been in decline for sev- eral weeks over the issue of proclaiming Cambodia a re- public. The. queen mother left the palace at 7 p.m., accompanied by her granddaughter, Prin- cess Norodom Buppha Devi, prima ballerina of the appar- ently now defunct Royal Bal- let company. By THE ASSOCIATED PRESS Political figures in Israel called on the government today to accept the U.S. Middle East peace proposals in fie wake of Egypt's assent b'nt they cau- tioned against a hasty reply. In a series of radio inter- views, Israeli politicians warned that the nation must not allow itself to become isolated n the diplomatic arena. But they advised Prime Min- ister Golda Heir's coalition re- gime to take time in framing its response to the Washington pro- posal. Israel Galali.. a close adviser to Mrs. Meir, declared Egypt's acceptance of the U.S. plan was "an attempt to prevent Israel from getting the arms neces- sary for its defence." In Cairo. Presidrent Gamal Abdel Nasser said his accept- ance was a tactic to keep Israel from obtaining additional arms. Two members of the Israeli parliament, who stand on oppos- ite sides of the political fence, agreed on the need to accept the proposals, despite Israel's fear that a limited ceasefire- one cf the plan's major ele- allow Nasser to strengthen his position along the Suez Canal prior to renewing the batfle. The cabinet meets Sunday to consider the situation. Observ- ers feel that the coalition make-up of Mrs. Heirs govern- ment will be put to a severe test in answering the Soviet and Egyptian challenge. Canadian Colt Wins Easily ASCOT, England (CP) Nl- jinsky, the unbeaten Canadian- bred colt owned by American millionaire Charles Engelhard, easily won the King George VI and Queen Elizabeth Stakes run over 1% miles today. Compulsory Insurance On Way CALGARY (CP) The Al- berta driver demerit system probably will be changed to legislation from regulations at the next sitting of the legisla- ture, Highways Mnister Gor- don Taylor said Friday. The demerit point system, in effect since April 1, was ruled invalid in magistrate's court June 30, partially because it was a regulation which could be changed by the cabinet without legislature approval The ruling is not binding on other courts. If the system is switched to legislation, only the legislature can alter its secttans. COMPULSORY INSURANCE The minister said the system was enacted as regulations so the plan could be in operation a year before taking its final form as law. It probably would be changed little before going to the legislature. The scheme provides specific demerit points for specific traf- fic violations. When lii points are collected by a driver, ha loses his licence for one month; Mr. Taylor said the govern- ment is also drafting a plan for compulsory auto insurance, based on an outline prepared by a special legislative commit- tee after a year of study. Once the highways depart- ment has a plan with which it is "completely the scheme will be presented to cabinet, he said. It would then be circulated in the .insurance industry to test- reaction and eliminate othej difficulties before presentatioj to Uie legislature. Repeats Truce Call SAIGON (AP) Ten South Vietnamese newspapers re- ported today that President Nguyen Van Thieu has renewed proposals for a ceasefire and in- ternationally controlled elec- tions in which the Communists would participate. Thieu repeated these points at a dinner in Independence Pal- ace Thursday night for publish- ers of the 10 Vietnamese-lan- guage newspapers. The newspapers said Thieu called for a stand-still ceasefire followed by "serious negotia- tions" to end the war. The cease- fire, it was reported, should not be merely a period of res- pite for Communist-led forces. Exhibition Program SATURDAY House enter- tainment Bar of Gold and Kinsmen car draw. Pilots Strike ROME (AP) Italy's na- tional airline, Alitalia, cancelled more than 50 international flights today because of a 24- hour pilots' strike. Engineer Held In Onassis Kidnap Case LONDON (Reuters) A 58- year-old British electronics en- gineer was ordered today held in custody until a court hearing July 31 on charges of threaten- ing to kidnap Greek shipping magnate Aristotle Onassis and his wife, Jacqueline. Tokyo Skies Filled With Smog Residents Stay Indoors TOKYO (Reuters) Tokyo's top public-hazards expert warned today that gas masks would become a necessity for tlie city's more than residents if effective measures are not taken immediately against air pollution. The warning from, Michitaki Kaino, director of the metropoli- tan government's public haz- ards research institute, came as photochemical smog and a sul- phurous acid mist settled over the city for the third succesive day. The metropolitan government warned residents to stay indoors to avoid eye and throat irrita- tions associated with the smog. The mixture of oxidants and acid, formd by sunlight acting on chemicals in vehicle exhaust gases and factory smoke, topped the government's danger level of 0.15 parts per this morning to reach 0.17. Kaino told a meeting of the Tokyo metropolitan assembly's anti-public- hazards committee that if (he consumption of oil in Japan continues at the present rate, the skies over Tokyo will be contaminated in about 10 years with smog five times as thick and poisonous as at present. His institute says tons of sulphurous acid gas is currently being dumped an- nually on Japan from consump- tion of tons of oil, one-fifth of which is used in Tokyo and its neighboring in- dustrial areas. It predicted Japan's oil con- sumption will reach to or tans a year by 1980. Another smog warning was is- sued today in southern Tokyo and the neighboring industrial area of Kawasaki, where the acid mist was reported to have reached a level of more than 0.2 parts Friday, the metropolitan gov- ernment asked 78 major facro- ries using heavy oil to switch to oil with low sulphur content. ;