Arizona Republic from Phoenix, Arizona • Page 2

Nixon, Japanese to discuss economies CITY" 4 Th Arizona Republic EO Phoenix, Sept 1, 1J71 Delay school tax session until 1972, Reagan asks United Tress International 1 Japanese goods more expensive when sold in the United States. The dollar's value edged up slightly yesterday on the Tokyo market, but still represented a devaluation of more than 6 per cent since the yen was floated free of an officially pegged value. On other foreign money markets, the dollar value had dropped about 3.9 per cent under the French franc, 2.3 per cent below the Swiss franc, nearly 8 per cent below the West German mark and 2.4 per cent less in relation to the British pound. While still declining to hint at the Nixon administration's plans after the wage-price freeze expires Nov. 13, Director George Shultz of the Office of Management and Budget emphasized the report on productivity as representing part of the administration's thinking.

The report outlined the traditional economic components of productivity-labor, natural resources, capital Investment, education, research and development and added another "The unique resource-the American spirit." Productivity, the rate at which goods are produced with a given amount of labor and financial investment, had declined the last two years from a long-term 3 per cent annual rate of increase, Schutz said. He noted, however, the figures for the first quarter of 1971 showed it rising again at a 3.5 per cent rate. The report said greater growth in productivity would mean more solid gains in wages without infaltion, a better competitive position for American goods versus foreign imports, and greater ability of the United States to deal with social problems such as pollution, poverty and hunger. "Every effort made to Increase American productivity will be repaid many times over in a higher standard of living and a better quality of life," it said. "The real pot Is only as big as our productivity makes it," Shultz said, in speaking of the nation's overall output and how it is divided up among labor, capital and government "That's all there is, there ain't any more." Associated Press WASHINGTON-President Nixon meets tomorrow with a U.S.-Japanese trade delegation In his quest for support for his new economic policies.

Nixon met for two hours yesterday with Cabinet officials who will field expected Japanese objections to Nixon's new 10 per cent surtax on imports. The White House also released a report of the National Commission on Productivity that said, "We must rekindle this American spirit" to produce more goods at less cost to become more competitive in foreign trade. The report by the commission of business, labor, public and government members echoed Nixon's Labor Day radio broadcast calling on the nation to revive the American competitive spirit. Organized labor, claiming the new policy favors big business over workers, has served notice it will lobby hard against Nixon's request for a 10 per cent business investment tax credit, but will support his proposal to repeal the 7 per cent excise tax on U.S.-made automobiles. Labor and some Democrats plan to fight in Congress to speed up proposed cuts in individual income taxes.

And labor unions have demanded that profits and interest rates be included in any new economic restraints after the freeze. White House press secretary Ronald L. Ziegler said Nixon discussed with his Cabinet Committee on International Economic Policy the need for encouraging investment in new industrial plants and equipment to make this country more competitive in international trade. Ziegler said the discussion included the scheduled meeting tomorrow and Friday of the U.S.-Japanese Cabinet ministers on trade and economic affairs. Japanese officials, whose country does much of its foreign trade with the United States, have objected to the 10-percent tax on their exports to this country, and also reluctantly let their currency float upward in relation to its value to the dollar.

The floating of the yen had the result of making SACRAMENTO Gov. Ronald Rca-Can said yesterday the state Supreme Court's school finance decision probably will require a sizable increase in taxes, but he indicated the legislature should delay action' on that issue until next year. The governor said the lawmakers, in the remaining weeks of the session, should grant as much relief as possible to property taxpayers and deal with financing schools in January. At a wide-ranging news conference, Reagan also renewed his opposition to large-scale busing to integrate California classrooms. And he denounced as "demagogues" labor leaders who attacked President Nixon's wage-price freeze.

Assembly Speaker Bob Moretti, D-Van Nuys, told newsmen later he favored moving ahead now with legislation to "reform" the tax structure and indicated he endorsed postponing until next year legislation implementing the court decision. Democrats are pressing a $1 billion tax shift program. The stale Supreme Court last week struck down California's property tax-based system of financing schools and returned the case to a lower court. "I don't think the matter of Implementing the Supreme Court decision should go forward at this time," the governor said. But he added property tax relief legislation should proceed.

The school decision will force the legislature and Reagan to devise another way of paying for local education and make the financing of schools more of a state responsibility. Some officials have talked of increasing sales and income taxes to help pay for schools. There also is support for instituting a statewide property tax under which local revenue would be fun-neled to Sacramento and redistributed to school districts on a more equal basis. Reagan told reporters the state already has "taxed just about everything." And, as for state financing of local schools, "I would think that it would consist of an increase in existing taxes. And it would certainly be a sizable increase." In his tax reform programs for the past two years, the Republican governor has advocated a statewide property tax, which would raise about $00 million from wealthy school districts and distribute it equally to the poor districts.

As California children returned for the start of school, the governor repeated his opposition to busing but said he'd favor it if "it improves educational qual-ty for all students." "I just personally think that where it has been it apparently has caused more Ronald Reagan trouble, more Ill-feeling than can be matched by any solution to the problem." He said some labor leaders, which he didn't identify, engaged in "cheap dema-goguery" when they criticized President Nixon's wage price freeze as beneficial to the wealthy and a punishment for the wage-earner and poor. The governor, a former president of the Screen Actors Guild, said he long had felt many labor leaders were "out of step with the rank and file membership of the unions, and if I have to choose between (them), I'll put my faith in the rank and file." Six firms queried in Washington about dividends LA 4" "just a fact finding" discussion. When asked if the office machine company would roll back the increase if asked to by the council, Blank said, "I will wait" until the council rules. But Louis Pozez, president of the Topeka-based Volume Shoe said his firm had not raised its dividend. "Our lu cents a share has been the same for the last four quarters," he told reporters.

He said his being called to Washington was a Officials of the Florida Telephone Corp. said they did not raise the third quarter payout, but had raised by 1 cent the utility's fourth quarter dividend, payable on Dec. 20. The freeze is scheduled to end on Nov. 12.

Executives said after the meeting there had been no pressure from the four officials in attendance. Besides McCracken, Treasury Undersecretary Charles Walker, Commerce Secretary Maurice Stans, and council executive director Arnold R. Weber met with officials from the six firms. All six firms were medium to small sized. The other three firms called to Washington were Briggs and Strat-ton Milwaukee; Selas Corp.

of America, Dreshcr, and National Propane New Hyde Park, N.Y. In a related development, Citizens and Southern Corp. of Columbia, S.C., said it was rolling back a cent increase in its quarterly dividend in support of the wage-price freeze. we initiative Washington Post Service WASHINGTON Government officials met yesterday with executives of six firms, which allegedly raised their dividends above those paid before Aug. 15.

None of the companies rolled back its pay-outs. However, there was no indication the government asked for dividend reductions. Paul W. McCracken, chairman of the Council of Economic Advisers and vice chairman of the Cost of Living Council, said the two-hour discussion with the six firms had been fact finding in nature and would be "reported to the full council meeting shortly." While the President docs not have the authority to freeze dividends, in his Aug. IS address be called on corporations to hold dividends to a level no higher than those paid before the freeze.

Friday, the Cost of Living Council sent telegrams to six firms saying it had heard the firm "has declared dividends exceeding the rate that was in effect prior to Aug. 15." The wire said the council "takes a serious view of any change in dividend rates that would be inconsistent with the President's program." After the meeting. Yale A. Blank, president of Martin Yalcs Industries, Chicago, said the meeting was U.S. plans food drop in E.

Pakistan Associated Press DACCA, East Pakistan American sources said yesterday that the United States is prepared to mount a food airdrop in East Pakistan to avert a major famine and an exodus of hungry refugees to India. They said i i a 1 are working on a plan to get food grains to parts of this predominantly Bengali province that have been hardest hit by fighting which broke out six months ago. Authorities fear a famine would swell the ranks of the eight million refugees who have fled to India since an army crackdown March 25 on the independence movement in East Pakistan. Officials say this might spark a war in which India would seek to occupy East Pakistan and return the refugees to their homes in the province of more than 70 million persons. The American aid plans call for helicopters and port planes to -1 food into areas isolated by the fighting.

Nixon takes about Continued from Page 1 which have left President Nguyen Van Thieu unopposed in next month's South Vietnamese presidential elections may Del E. Webb Gene Autry Tom Chauncey More nlioul Channel 10 faces challenge Continued from Page 1 ning document to the Foreign Relations Committee, a move that could hold up further the panel's consideration of the foreign aid authorization bill and lead to a sharp slash in its military aid conio-ncnt. Welfare reform. The Senate Finance Committee will resume its hearings later this month on the House-passed bill combining a Social Security increase and the welfare program, which President Nixon asked be delayed a year as part of his economic reform program. Appropriations.

Senate-House conferees expect quick agreement on the public-works money bill leaving four others for action, once necessary authorization measures are passed: defense, foreign aid, military construction and District of Columbia. bolster opposition to the two-year draft extension. After the Senate finishes with the draft bill, it will get into the $21-billion military procurement authorization bill, which contains funds for the C5A super transport, the Bl advanced manned bomber and the Safeguard missile defense system. Other issues before the Congress include: Foreign aid. President Nixon last week invoked executive privilege to prevent the Pentagon from having to turn over a five-year military aid plan- broadcasting group, said the application was filed under FCC regulations which allow any qualified group to challenge a radio or TV station's privilege to broadcast at every three-year license renewal review time.

Technically, it requests permission from the FCC to construct a new commercial television broadcast station to be operated on Channel 10 in Phoenix. Effect of such permission, if granted, would be to put the present licensee out of business. "A group of local citizens formed the Valley of the Sun Broadcasting Co. for a number of reasons, one of which was to bring ownership of Channel 10 back to rhoenix," Dahlberg said. "With its (the new company's) broad base of citizens we feel qualified to operate the station in the public interest, and we also think that the television viewing public will be best served by competition between the licensee (KOOL) and the applicant," he said.

Dahlberg declined to discuss whether the present Channel 10 ownership has been remiss in meeting various FCC broadcasting requirements in any way, but he said: "Win, lose or draw, the competing application will assist the FCC in determining whether the licensees are meeting or not meeting their Dahlberg, asked about the divergent business and political makeup of the new broadcasting firm, said he didn't think anyone "should read anything into that that doesn't exist. It is a cross-section, and a cross-section on purpose, to represent all the thinking of all groups represented, rather than a single ownership." The legal notice in yesterday's Republic stated that the application had been filed with the FCC Sept. 1, the deadline for any challenging applicant. It was understood that under federal regulations KOOL-TV had filed its three-year renewal documents by a July 1 deadline. Dahlberg said he expected the first hearing on his group's application to be held by the FCC in about one month, probably in Washington, but perhaps in Phoenix.

He explained in answer to a question that "no one person (among the stockholders and directors listed in the legal notice) owns as much as 25 per cent" of the new broadcasting company. "There Isn't any one tycoon among the group," he added. He said it had not been determined yet whether the new broadcasting corporation would later offer its stock to the public. Now your Mercedes-Benz passenger car dealer is also a sales and service dealer for the Mercedes-Benz 0309D Bus. PHOENIX MOTOR CO.

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