Wellsville Daily Reporter from Wellsville, New York • Page 1

Isiellsville er Serving Allegany and Potter Counties Copyright 1975, by The W.H. Grwnhow Company All rights reserved Ninety-Fifth Year Wellsville, New York, Friday Afternoon, August 22, 1975 10 Cents Per Copy Kissinger reveals 'attitude of hope' PARADE DRESS-Wellsville Volunteer Fire Department marches down Main Thursday night at the annual inspection parade. pageS. (Reporter Photo). More pictures on Government officials show surprise at inflation rate By United Press International Government officials were surprised at the sharp rise of inflation last month, but they contend the July Consumer Price Index figures do not represent a long term trend.

However, the figures do bring into question the extent of recovery from the country's worst post-World War II recession, specifically whether further increases in the price of bread and gasoline will blunt the fledgling economic upturn. Consumer prices in July rose a whopping 1.2 per cent equal to an annual rate of 14.4 per cent after a 0.8 increase in June. The CPI in the first five months of this year increased only 0.5 per cent. In July, it cost $16.23 to buy what cost $10 eight years ago, according to the figures released Thursday. But government economists point to special factors causing July's price increase: the Independence Day gasoline price increase, the anticipated sale of grain to Russia and wholesale price rises for aluminum and steel.

And one reason for optimism, they say, is that the end of recession means there is some slack in the economy factory idleness, a large pool of unemployed and relatively low demand which tends to work against rising prices. The signs of recovery, as expressed in the 1.6 per cent rise in the Gross National Product for the second quarter, point to an increase in employment. Economists generally believe the CPI will stabilize in coming months, though a wheat price increase, for instance, could affect a wide range of products from birthday cakes to meat loaves and the end of domestic oil controls could raise gasoline from three to seven cents a gallon. Treasury Department economist Sidney Jones said while inflation remains "a very serious problem," the trend will be reversed soon. White House spokesman Ron Nessen said the CPI was "somewhat higher than anticipated," but he said, "the early evidence is that the CPI will drop back when the August figures come out next month." Assistant Commerce Secretary James L.

Pate said the GNP, which registered its first growth Thursday in 15 months, proved the recession ended in April or May and that the higher than expected CPI was caused mainly by gasoline and food prices. "It's very difficult to say precisely when the recession ended, but certainly by June and July we have seen an abundance of evidence to suggest that recovery is under way," Pate said. Agriculture Department economist Dawson Ahalt blamed the highest surge in food prices in 11 months on bad weather and lingering effects of a small 1974 corn crop. Agriculture Secretary Earl Butz said food price estimates, originally targeted for a 6 to 8 per cent rise this year, would actually rise about 9 per cent. He said most of this year's rise has already occurred and that effects of the Soviet grain purchases will have little impact on food prices this year.

Food prices rose 14.5 per cent in each of the past two years. Gasoline prices are certain to rise starting next month when controls on the price of domestic oil expire. The Ford administration, which is lifting a $2-a-barrel fee on imported oil, says the result will be a three-cent-a-gallon increase in gasoline, in addition to the three-cent increase last month. But Gulf Oil Co. president James E.

Lee said the price of "old" oil could rise seven to eight cents a gallon. He did not say, however, what the effect would be for consumers at Gulf pumps next month. By United Press International JERUSALEM (UPI) Secretary of State Henry Kissinger came away today from a four and a half hour meeting with Israeli leaders expressing an "attitude of hope" that agreement can be reached between Israel and Egypt on a new Sinai pact. But hopes for an overall Middle East settlement received a jolt today in Damascus when Syria and Jordan announced formation of a joint command to coordinate their armies against Israel and called on the Arab world to reject any new Israel- Egyptian settlement arranged by Kissinger. Syria and Jordan are among stops on the current Kissinger tour.

Kissinger's visit to Israel his 10th mission to the Middle East was marred by violent demonstrations in Tel Aviv and Jerusalem. Asked by reporters if the demonstrations caused nun concern, Kissinger replied, "You forget, I come from Harvard and I'm used to them." Before Kissinger met with Prune Minister Yitzhak Rabin demonstrators in Tel Aviv protesting a new Israeli- Egyptian pact blocked traffic at a major intersection where soldiers argued vehemently with police. A policeman fired two warning shots in the air. In Jerusalem thousands of protestors surrounded his hotel and shouted anti-Kissinger slogans. Kissinger flew to Tel Aviv's Ben- Gurion Airport aboard an army helicopter to avoid any possible demonstrations along the motorcade route used on previous shuttles and departed for Alexandria at 3:09 p.m.

(8:09 a.m.EDT). Kissinger met for four and a half hours with Rabin and his negotiating team in the first business session of his renewed shuttle mission designed to avert another Arab-Israeli war. "We clarified some outstanding points," he told reporters. "I am going to Egypt and plan to return tomorrow night and to continue the discussions with an attitude of hope." The length of the session delayed for half an hour his departure for Alexandria, where he will meet with Egyptian President Anwar Sadat. He flies to Damascus on Saturday and returns to Israel Saturday night, and probably will return to Alexandria Sunday and Monday before visiting Saudi Arabia and Jordan.

"We spoke as friends about all aspects of the agreement and all aspects of our bilateral relations," Kissinger said. The talks on bilateral relations apparently referred to the U.S.-Israeli section of the accord in which the United States has pledged to give Israel at least $2 billion in economic aid, guaranteed oil supplies and advanced weaponry. The site of the Kissinger-Rabin meeting was switched at the last minute to avoid more demonstrations. Syria, Jordan join command DAMASCUS, Syria (UPI) Syria and Jordan announced today they had established a joint command to coordinate their armies against Israel and called on the Arab world to reject any compromise settlement worked out by Secretary of State Henry A. Kissinger.

The two countries issued a joint communique in which they asked all Arab nations to marshal their military machine against and reject partial peace settlements. They sharply criticized Kissinger's attempt to negotiate a Sinai agreement between Egypt and Israel and said "events have shown there is no alternative except military force and preparedness" in confronting Israel. The announcement of the Jordanian- dan. Hussein and Syrian President Hafez Assad rejected the notion that the Sinai settlement Kissinger is now trying to seal between Egypt and Israel will help promote peace in the Middle East. They said only an Israeli withdrawal from occupied Arab territories on their fronts as well as Egypt's could do that.

They said only a militarily strong Arab nation" could guarantee such a withdrawal. "The two leaders attach special importance to the mobilization of the resources of the Arab nation to mass them in battle against the Zionist enemy," the communique said. It said the Arabs have no choice but to "build up their military power Syrian Supreme Command Council, as because events have shown that there 1 1111 a fnrno it will be named, and the sharp criticism of Kissinger's current shuttle mission came at the end of a four-day is no alternative except military force and preparedness to confront the intransigence and maneuvers of the visit to Syria by King Hussein of Jor- enemy. Prison guards subdue 400 inmates Model production stepped up; longterm auto layoffs drop DETROIT (UPI) Longterm layoffs will drop below 90,000 by the end of next week as U.S. automakers step up production of the 1976 models they are counting on to pull the industry out of a 23-month slump.

With only 89,560 workers off the job at the end of August, the unemployment rolls will be the shortest since before Christmas, when massive layoffs began in reaction to nearly empty auto showrooms. By late March, more than 40 per cent of the industry's 700,000 bluecollar workers were off the job. All but 16 of the 57 U.S. car and truck assembly plants will be turning out the new models as September begins. Observers predict indefinite layoffs, which peaked at 212,000 in March, will be below 80,000 by mid-September.

The trade publication Automotive Portuguese Reds on way out LISBON, Portugal (UPI) -Political sources say Army Chief of Staff Carlos Fabiao, a little-known moderate, will replace Communist-backed Prime Minister Vasco Goncalves and head Portugal's sixth government in 16 months. President Francisco da Costa Gomes, bowing to demands by moderates in Portugal's armed forces, was reportedly working behind the scenes to line up a new government free of Communist domination. Political sources Thursday Gen. Goncalves seemed nearly certain to lose his post as prime minister despite strenuous, last-minute efforts to cling to power. They said Gen.

Fabiao would likely head Portugal's sixth cabinet since the April 25, 1974. coup that ended a'half- century of right-wing dictatorship. The sources said the 45-year-old general has stayed out of the limelight, but the little information available indicated he was a moderate, anti- Communist. He has held a number of commands in Portugal's former African colonies and was commander-in-chief in Guinea- Bissau when the territory achieved independence. Fabiao and Military Security Chief Otelo Saraiva de Carvalho Thursday went to Coimbra, 130 miles north of Lisbon, to confer with Brig.

Francisco Charais, commander of the central military region and a political moderate. A statement from Carvalho's office said they discussed "routine matters concerning the army as well as the political and military situation." But political informants said the meeting was the first of a series aimed at gaining support from military units throughout the country for a new government excluding the Communists. Military sources said the moderates may take a week canvassing barracks across the country before they make any move to form a new cabinet. A wave of anti-Communist violence has hit Portugal's conservative north in the past five weeks, leaving seven dead, 225 injured and dozens of Communist party offices in ruins. Goncalves, who serves on the ruling junta with Costa Gomes and Carvalho, has been under pressure to resign for several weeks but managed to stay in power with the help of the Communists.

Cuban ban lifted WASHINGTON (UPI) The United States is moving obliquely toward improved relations with Cuba. The first cautious diplomatic steps Thursday triggered criticism from Cubans in exile in America and set up a test of Congress' mood toward the communist government of Fidel Castro. The U.S. moves were related to indirect commercial relations with Cuba and other Latin countries: The State Department lifted its ban on sales to Cuba by overseas subsidiaries of U.S. manufacturing firms.

But the ban will continue on direct exports to the island from the United States. The U.S. government will now allow ships calling on Cuban ports to refuel in U.S. ports. A third decision requires Congressional approval, which will set up a test of Congress' attitude toward relaxing tensions in the Caribbean.

The State Department will ask Congress to resume certain types of food assistance to countries that trade with Cuba. Only a few nations, including Chile and Haiti, will be affected. Castro, who took power in a 1959 coup, has sought better relations with the United States in recent months. This month he returned nearly $2 million in hijack ransom money to Southern Airlines. Sen.

George McGovern, DS.D., a recent visitor to Cuba, expressed delight with the shift in U.S. policy. He called it "unquestionably a major step forward on the path toward renewed relations between Cuba and the United States." McGovern said "the Ford administration has come a long way in a short time, and I commend the President for an historic contribution." News estimated car production this week climbed 20 per cent from last week with the startup of new models at 12 General Motors plants, though the year's output just shy of 4 million cars still trails last year's sluggish pace by 15 per cent. GM Thursday said Supplemental Unemployment Benefits would be paid to eligible laidoff workers for a sixth straight week. "It's kind of a stroke of luck that SUB lasted through the entire model changeover," one GM spokesman commented.

GM's long-term layoffs, which peaked at 137,500 at the end of March, will drop to 63,000 by the end of August and could be below 60,000 by mid- September. Only three GM plants all of them affected by a strike at the company's Fischer Body plant in Ohio will close next week, idling 10,100 workers. The Ford Motor Co. will close its Kentucky truck plant next week, idling 3,400 workers for inventory adjustment, but will have 16 of its 23 plants producing 1976 models, reducing long-term layoffs to 15,500 down by 250. American Motors, the first company to complete the switch, has just 560 of its 24,000 hourly workers on indefinite layoff the lowest in the industry and they may be back to work on stepped-up production of the Pacer next month.

IONIA, Mich. (UPI) Prison guards used tear gas Thursday to subdue more than 400 inmates of the maximum security Michigan Reformatory who went on a rampage and took over prison buildings in a protest against prison conditions. The prison guards carried shotguns but no shots were fired. Two inmates suffered injuries in what State Corrections Director Perry Johnson called "a pretty serious disturbance." "Everything is secured now," Johnson said. "We have the men back in their cells." At one point the rebellious inmates took over buildings containing the prison's kitchen, dining room and auditorium.

Johnson said they damaged kitchen equipment but that food service would be restored quickly. Prison officials said the inmates were protesting a wide range of conditions and policies of the prison including the cancellation of inmate activities due to inadequate numbers of personnel to supervise them. The prison has about 1,025 inmates. "The basic grievance was a resentment over the curtailment of activities because of staff shortages from time to time," Johnson said. The disorders began in the prison yard.

Prisoners had gathered in the yard for their recreation period Weather Clearing this afternoon. High in mid 70s. Partly cloudy and cooler tonight. Low about 55. Saturday, considerable sunshine, high in upper 70s.

Southwest winds 10 to 20 miles per hour today, becoming northerly tonight and Saturday. The precipitation probability is 30 per cent today and 10 per cent tonight and Saturday. HIGH 74 LOW 63 The high occurred at noon and the low at 4:30 a.m. There was .10 inches of rain, and the barometer at 10:30 a.m. was 30.24 and falling.

Temperatures were: p.m., 70; 6 p.m., 70; midnight, 70; 3 a.m., 70; 6 a.m., 70; 9 a.m.,69; and 10:30 a.m., 72. COLD AND TIRED, balloonist Bob Sparks is interviewed by newsmen noon, 74; 3 late Thursday after he stepped from a Coast Guard helicopter after he 9 p.m., 67; had been rescued from the ocean some 125 miles sougheast of Cape Cod where he ditched his balloon. Looking on at right are his daughters, Susan, 13 and Vicki, 11. (UPI).