Ukiah Daily Journal from Ukiah, California • Page 2

Friday's markets Volcker: Fed can't control inflation PAULVOLKER WASHINGTON (UPI) Contrary to historical trends, Interest rates are running well aboye the Inflation rate and Federal Reserve Board Chairman Paul Volcker says he can't bring them down. "That's a remarkable confession!" Sen. William Proxmire, said Thursday following Volcker's admission during a hearing by the Senate Banking Committee. "The most important banker in the in the and you say you can't control interest rates," Proxmire said. "I think you're right." Although the Fed is one of the major influences on interest rates and its policy of slow monetary growth tends to increase them, Volcker blamed the high rates on concern by the business community about federal deficits.

"There is no logical connection between tight monetary policy and higher interest rates," he told the committee. "Clearly we could lower interest rates with a tight monetary policy and a tight fiscal policy." Volcker said that while the Federal Reserve is "always concerned about interest rates and their impact on the economy, that is different from controlling them." Said Volcker, "Frankly, I don't think we have the power" to control them. "It would be an illusion to think we could push down interest rates," he said. On another front, Volcker said it may be premature to say the economy is in a recession, but, when pressed, conceded it might be in one. President Reagan recently said the nation is in a "light" recession, but since then several economists have debated whether that is true.

Volcker made his remarks during a committee hearing on sweeping banking-reform legislation that includes emergency aid for financial institutions, expanded lending powers for banks and thrifts, interstate banking guidelines and the abolishment of state-set interest rate ceilings on consumer He urged the panel to quickly approve stopgap legislation to allow federal insurance funds to deposit money in ailing thrifts and assist in mergers to prevent default but to hold off on more far-reaching reforms. The House voted 371-46 Wednesday for similar emergency legislation and agreed by voice vote to restrict the bill to savings and loans and mutual savings banks since commercial banks generally do not need help. "We would strongly urge that the debate on longer-tenn'stuctural issues not deter your immediate attention to the provisions of the bill needed to help deal with the current situation in the distressed thrift industry," Volcker told the panel. High interest rates are particularly harmful to savings and loans and mutual savings banks because they are forced to pay high rates to depositors while being saddled with investment portfolios with long-term, low-rate mortgages. The government estimates that 244 savings and loans associations and about a dozen mutual savings banks could be in danger of collapse next year if current interest rates continue.

Stocks struggling higher NEW YORK (UPI) Stocks overcame a rocky start Friday and began moving higher amid investors hopes interest rates would decline as the economy slows down. Trading was fairly active. The Dow Jones industrial average, down more than three points at the outset, as ahead 1.81 points to 834.75 around noon EST. The Dow was operating at a 2.66-point deficit from the start because six of its components were trading minus their dividends. Advances led declines, 747-507, among the 1,636 issues crossing the New York Stock Exchange tape.

Big Board volume at the two-hour mark amounted to about 20,240,000 shares, up from the 17,880,000 traded during the same period Thursday. Brokers said the increased volume was encouraging since it indicated investors were becoming confident short-term interest rates, which began a retreat about three weeks ago, will continue to fall because of the economic slump. There was speculation prior to the money supply report later in the day that the Federal Reserve would reduce either its 14 percent discount or its two point penalty for frequent borrowers. Investors were encourged Continental Illinois Thursday cut its prime rate to percent from the prevailing 18 percent, and Irving Trust and Marine Midland lowered their broker loan rates to percent from 16 percent. Treasury Secretary Donald Regan told the Senate Budget Committee the recession would end soon because the administration's tax-cut program is in place and interest rates are trending lower.

On the trading floor, Marathon Oil, which earlier this week agreed to buy Husky Oil's U.S. operations, was up to In heavy turnover before trading was halted. Prices were higher in moderate trading of American Stock Exchange Issues. Today's stocks 10 A.M. PRICES Industrials 839.13 Transportation UtultW Volume Advances .......872 Declines.

.805 Unchanged i. .375 Uatedaleeks: AfeftaMieraystems Vk -M iof America nvk I'Caicade 32 BATEMAN, EICHLER, HILL RICHARDS 36 V. un -ft 2 General Motors Georgia Pacific I8V4 Homestake Mining Hospital Corp LBJL Louisiana Pacific Masonite Natomas Pacific GfcE Stand. Oil of Cal. Tandy Corp Tetodynelnc United LONDON GOLD 427.00+2.50 SILVER 9.17 -VA V4 un 59 21 A $40 physical exam for president By DONALD A.

DAVIS WASHINGTON (UPI) A team of 14 doctors is giving President Reagan a head-to-toe physical exam for $40. It comes on top of the shot of good medicine he received before reporting to the hospital for the routine checkup. White House chief of staff James Baker says Reagan's winning Senate vote on his plan to sell AW ACS radar planes to Saudi Arabia "was a great tonic for the president." Indeed, as the president escorted his wife Nancy into the National Naval Medical Center in suburban Bethesda, Thursday, they ignored the head colds that had plagued them both for several days. Reagan told reporters he felt "fine" and Mrs. Reagan said things were "lovely." The president was hoarse during a speech in Virginia on Tuesday and was noticeably pale at his desk, speaking with a raspy voice, Wednesday while commenting on the Senate victory.

Aides said the 52-48 vote, which capped two months of dose-quarters work by Reagan, also polished his image as a chief executive. "It shows the president retains his touch with Congress," Baker told reporters. "We would argue forcefully that he is the most effective president since Lyndon Johnson with Congress." Reagan checks out of hospital this afternoon and will spend a weekend at Camp David before turning his attention back to matters other than the AW ACS that have occupied so much of his recent schedule. He will have an immediate chance to find out how the AWACS sale affects Middle East policy on Monday when Jordan's King Hussein arrives for a two-day state visit. The top domestic issue facing the president is still the budget.

Reagan meet next week with Senate Republican Leader Howard Baker and other GOP officials on the prospects of his latest package of budget cuts anid tax increases designed to avoid bigger deficits. Dr. Daniel Ruge, White House physician, said Thursday the health of the 70-year-old president, who was wounded March 30 in an assassination attempt, was "excellent." For their overnight hospital stay, the Reagans were assigned a three- room suite at the sprawling hospital. The suite normally costs $460 a day. Lt.

Cmdr. Ron Arrison, public affairs officer for the medical center, said the president and Mrs. Reagan were not officially "admitted" to the hospital, and therefore would be charged the lower outpatient cost of $40 each. The full 24 hours of tests began with X-rays immediately upon their ar- RONALD REAGAN A 14-doctor checkup rival and continued until they had a dinner prepared by White House stewards. The comfortable suite featured twin hospital beds, a television set and a desk; a sitting room with yellow wallpaper; and a conference room.

News of the nation Ukiah Daily Journal, Ukiah, Calif. Friday, October 30, 1981 Reagan: No bows for AWACS victory, but reassurances for worried Israel By HELEN THOMAS UPI White House Reporter WASHINGTON (UPI) President Reagan, following his dramatic Saudi arms deal victory, is underscoring U.S. commitment to a concerned Israel and is pressing a relieved Saudi Arabia into the Middle East peace process. At the same time, Reagan's staff is hailing the president's ability to get what he wants from Congress, comparing his political prowess on Capitol Hill with that of a former master, President Lyndon Johnson. "We would argue forcefully that he has been the most effective president since Lyndon Johnson with respect to his relationships with the Congress and his ability to get legislation through the Congress," said White House chief of staff James Baker.

Reagan took no bows Thursday and instead sought to mend relations with Israel, which staunchly opposes the $8.5 billion sale, and tried to get Saudi Arabia more active in Middle East peace efforts. The president sent a letter to Israeli Prime Minister Menachem Begin underscoring the U.S. commitment tp maintain Israel's military superiority in the Middle East. He also sent a letter to Saudi King Khalid, stressing the importance the U.S. attaches "to the security and strength" of the oil-rich monarchy and urged "close cooperation" between the two countries in the search for peace.

Begin was not appeased by Reagan's letter, saying the sale poses "a new and serious danger" to his nation's security. Sheik Faisal Alhegelan, Saudi Arabia's ambassador to the United States, was cautious in linking the sale to peace moves. "We are buying these planes to defend our country," he said. The Senate Wednesday, by a vote of 52-48, cleared the way for the sale of AWACS radar planes and other aircraft equipment to Saudi Arabia a deal Reagan billed as vital for Middle East security. Just a few days ago, the sale seemed headed for Senate defeat.

But Reagan, as he did last summer with his budget and tax cuts, managed to use his power of persuasion to turn foes into supporters. Reagan told reporters "the most significant part" of the plan is that it "recognizes that Israel is a nation to be negotiated MENACHEM BEGIN Reassurances from Reagan Navy jet crashes in pasture, killing crew By ROBERT ROUNTREE VIRGINIA BEACH, Va. (UPI) A second cup of coffee may have saved Clinton Midgett and his family from serious injury even death when a flaming Navy EA6B prowler jet plowed into a horse pasture next to his father's house. Three Navy aviators from Whidbey Island, Naval Air Station were killed in the Thursday crash. The Prowler was en route to the aircraft carrier USS John F.

Kennedy off the Virginia coast when the crash occured at 8:40 a.m., 8 minutes after takeoff from Norfolk Naval Air Station. "Normally, our routine would be for us to be on our way to the stable and let the horses out into the pasture," said Midgett, 31, whose father owns the Princess Anne Stables. "We would have been ing right across the Instead, the weather was gray and overcast, and Midgett's mother poured a second cup of coffee before the day's chores began. As they sipped their coffee in the den, near a window overlooking the pasture, the low-flying jet skimmed across the wood-rail fence surrounding the pasture. "I heard the loud swish of a jet very low an explosion, a fireball and then impact," Midgett said.

"We hear jets all the time. We knew it was abnormal for it to be so low. We dived first and then ran toward the other end of the house. As soon as it subsided, we went out the front of the house." Debris and mud rained down on the house, puncturing dozens of grapefruit-sized holes in the roof. The explosion blew flower pots through screens and windows, said Midgett's sister, Pat Murray.

Atlantic Fleet Naval Air Force spokesman Lt. Cmdr. Tom Connor identified the victims as: Lt. James H. Mallory 26, the pilot, of Savannah, Lt.

Cmdr. Jack A. Fisher, age unknown, of Stockton, and Lt. Alfred J. Dupont age unknown, of Belle Vue, Wash.

All three aviators were stationed at Whidbey Island, Naval Air Station and resided in Oak Harbor, Wash. Navy officials had not ascertained the cause late Thursday but speculated the ill-fated plane may have been attempting an emergency landing at Oceana, two miles from the crash site, although air traffic controllers said the crew had made no contact with the tower. Midgett said the pilot appeared to have carefully guided the plane into the pasture, halfway between the house and the stable. "He put it down in the best possible spot if he was going to put it any place," said Midgett. "I don't knovrtf they were riding it to the ground to protect humanity, but if they did, I said a prayer for them." The flaming aircraft, which exploded into thousands of small chunks, plowed a 10-foot-deep crater into the pasture, and debris from the impact scattered for more than a half-mile around.

The Navy said the three crewmen aboard the Prowler were killed, but there were no injuries on the ground, "With all the houses around, It's a miracle nobody else was hurt," said A.C. "Ace" Ewers, spokesman for Oceana Naval Air Station in Virginia Beach. Drug expert tells jury in Elvis' doctor Many doctors supply hard-core addicts with drugs By PAMELA MURPHY MEMPHIS, Tenn. (UPI) It is a widespread practice for doctors to give hard-core addicts like Elvis Presley the same drugs they are booked on, a drug expert testified in the trial of the late rock 'n' roll star's personal physician. "No one likes that concept, but sometimes that's the only thing can do," said Dr.

Forest Searls Tennant a Los Angeles internist who heads a drug abuse research clinic. He called the method of treating addicts wh6 fail to remain drug-free repeated- detoxificatlons "medical maintenance. 1 "We may have 12 million people in the United States just like Elvis Presley and Jerry Lee Lewis," Tennant estimated Thursday. Defense attorney James Neal said he would call two more witnesses before winding up his case Presley bodyguard Joe Esposlto and probably the defendant himself, Dr. George C.

Nichopoulos. Nichopoulos, who marked his 54th birthday Thursday, is charged in an 11 -count indictment of overprescrib- lng thousands of addictive pills to Presley, singer Jerry Lee Lewis and others. He is of writing the prescriptions without a valid medical purpose and in some cases knowing his patients were drug addicts. When the prosecution presented its case to the jury, Assistant District Attorney Generals Jewett Miller and James Wilson called several doctors to testify in no uncertain terms that an addict should never be administered a drug he has abused solely to maintain an addiction. Tennant, however, testified for the defense that it was "ridiculous" to make such a generalization, since many addicts cannot successfully be detoxified.

He told the jury that studies Indicate only 30 percent of the people who become addicted to stimulants, sedatives and narcotics remain drug- free for a year. Studies have not extended beyond a one-year follow-up, be said. MOBILE HOME SERVICE- Awnings skirting 'Furnaces COOLER SERVICE Installation Repair on Campers Trailers 468-9535 STEAK OPEN 7 DAYS A WEEK Banquet Facilities Available TRI CLUB LIONESS ANNUAL "LITTLE RENQ NITE" Nov. 7. 1981 Veteran's Bldg.

Seminary So. Oak Donation: $7.50 and $6.00 Senior Citizens Includes Dinner- Al I you can eat, served to :30 pm ee served on Packet of Play Money for Craps, Bingo etc. Proceeds wil) go to Community Service Projects 1 n..