Mills proposing revision on taxes OPINION PAGE SATURDAY, AUGUST 24, 1974 EdilorUH written by J>mK Gray Ktd ChKI« Undtrwooa Editorial Who's isolated— Cuba or United States? Sometimes it's useful to state basic principles, even though these may seem so obvious as to be not worth mentioning. Consider, for example, a basic principle of international diplomacy. This is that governments do not grant recognition to each other because they necessarily admire each other's form of government, or even like it. Rather, they exchange ambassadors for the simple reason that it is much easier to carry on diplomatic intercourse that way. The U.S. has been acting on that principle by negotiating for an exchange of embassies with East Germany, the Communist government that put up the Berlin Wall in 1961. The other day, negotiations were broken off because of interference with traffic from West Germany to West Berlin. But the East Germans have been looking for suitable quarters in Washington, it is said, and one of these days you can expect the nomination of an American ambassador behind the Wall. Meanwhile, however, the U.S. mountains its own wall against diplomatic intercourse with Castro's Cuba. The policy seems to remain essentially as Sec. of State Henry Kissinger stated it last December in a letter to Sen. J. WUliam Fullbright — that "it is important to our national interest and the security of the hemisphere to seek the isolation of Cuba in cooperation with other American republics." As it happens, other American republics are not cooperating with the U.S. in this matter. Some of them, Mexico for instance, never did break off diplomatic relations with Cuba after 1961, when as one of its last acts the Eisenhower Administration broke diplomatic ties with Cuba. Lately, six of our Latin neighbors have opened embassies in Havana. Who, then, is being isolated? If Castro was once perceived as a threat, he is no longer so perceived. The Castro government is no more admirable than the East German government, but there it is, and more than 13 years of nonrecognition have not made it go away. WASHINGTON (AP) Chairman Wilbur D. Mills, D- Ark., of the tax-writing House Ways and Means Committee, is trying to spread some cheer along a gloomy Wall Street with a reminder that tax revision may be on the way. After the stock market closed Thursday at Its lowest since July 14, 1970, Mills' office released a statement that noted the sagging market. It said the tax revision bill to "be given final consideration by the committee beginning Sept. 11 will include a number of provisions in the area of capital gains and losses, which should be of material benefits to taxpayers and investors across the nation." Among these provisions will be a reduction in the capital gains tax for assets held more Ag Department offering grocery price estimate What others say . . . DAILY PROGRESS, SCOTTSDA1.E, ARIZ. A BETTER WAY IS FOUND The government is initiating the first phase of a program which demonstrates sound thinking and good administration. Social Security recipients will be given the option of having their checks deposited directly in their checking or savings accounts. Congress authorized the program as a means of saving money, a commendable goal. Even more praiseworthy is the fact that the recipients will gain from the new procedure. The checks will be the same, but for those who choose direct deposits the possibility of loss will be minimized. Social Security checks, arriving at predetermined dates, are too often prey for unscrupulous persons who intercept the checks or rob the elderly who cash them. Eventually transfer of funds will be made electronically, a quick and efficient operation that heads off thievery. It's an excellent idea that benefits the retirees and speeds up government's work as well. Business analyst views jawboning By STEPHEN R MILLER AP Business News Editor NEW YORK (AP)-General Motors Corp. gave ground this past week under one of the first uses of the jawbone in the new administration of President Gerald R. Ford. President Ford had criticized GM for announcing plans to hike prices an average of $500 on its 1975 models, declaring himself "very disappointed." Not long before, GM officials had taken their case to Washington. One of the officials who listened was White House economic coordinator Kenneth Rush, who painted a low-key picture of that private session. "I didn't bargain or try to exact promises or anything like that," said Rush later. "We tried to let them see all the the points of view." The end result of what Ford administration officials were depicting as fairly gentle persuasion was agreement by GM to trim its price hike plans by $54, "We did feel some response was desirable," said GM Chairman Richard C. Gerstenberg. "We felt this strong sense of responsibility and we acted." GM had announced its original price plans on the day of President Richard M. Nixon's resignation and had later said it planned to stick by that announcement. Its change of heart came shortly after Ford Motor Co. announced this past week it expected prices on 1975 models to go higher than the average of HIS it had announced earlier. Ford wasn't specific about just how much its prices would rise but it was expected the hikes would be close to those eventually settled upon by GM. Chrysler and American Motors haven't announced their price plans, but they too are expected to gear their moves to those of GM. For their part, both Ford and GM indicated that prices could go higher still. Ford has argued that its own costs are rising at $60 per car per month—up from $36 one month ago. The Labor Department said this past week that the consumer price index for July had gone up only 0.8 per cent, an easing from June's one per cent level largely linked to a slight decline in retail food prices. Government economists warned that food prices are expected to rise again, taking the index along with them as they react to crop damage from drought in the Midwest. They noted that the wholesale price index for July had jumped 7.8 per cent—an annual rate of 93.6 per cent. Pan American World Airways, the nation's biggest international airline, said at week's end that it could run out of cash to meet its obligations unless the government gives it a subsidy. Pan Am asked the Civil Aeronautics Board to give it a temporary subsidy as quickly as possible while considering the request for a "final" arrangement. Pan Am had lost money for the past five years. WASHINGTON (AP) - A load of groceries that cost $17.24 two years ago probably will cost $23 or more by the end of the year, Agriculture Department economists are saying. By last month, one index showed, the hypothetical batch of groceries already cost $22.58. That unpleasant note for food-buyers came on Friday when official predictions of the final 1974 average food prices were revised upward, to about 15 per cent above the 1973 average. Last year's increase in the retail average, the highest since World War II, was 14.5 per cent. For the last nine months, the department had been predicting a 1974 rise of "probably 12 per cent" in the average, with most of the boost coming before June. Friday's new analysis by the Outlook and Situation Board, based on mid-August supply, demand and price assessments, gave a range of 13 to 17 per cent for the year. The report said that instead of remaining steady during the third quarter and declining slightly in the fall, prices for major farm goods hit by unfavorable weather over much of the nation "are now expected to rise about 3 per cent during the third quarter and a little more in the fourth quarter." The key to the range is the weather, from the heavy spring rains to the Midwest's midsummer drought. The retail price hikes will be closer to 17 per cent if crop production falls much more or if demand from consumers, Today in history By The Associated Press Today is Saturday, Aug. 24, the 236th day of 1974. There are 129 days left in the year. . Today's highlight in history: On this date in 1814, British troops invaded Washington, D.C., and burned the Capitol building and the White House. On this date: In 79 a.d., an eruption of Mount Vesuvius in Italy buried the ancient cities of Pompeii and Herculaneuin. In 1777, Gen. George Washington led his Revolutionary War army into Philadelphia. In 1862, a Confederate army under Gen. Braxton Bragg invaded Kentucky during the Civil War. In 1891, Thomas Edison applied for a patent for a motion picture camera. In 1932, Amelia Earhart became the first woman to make a non-stop air flight across the U.S. She flew from Los Angeles to Newark, N.J., in 19 hours and five minutes. In 1939, Nazi Germany and the Soviet Union signed a 10- year non-aggression pact. livestock feeders or exporters increases. The department also released Friday its July figures for the Economic Research Service marketbasket survey, showing the first rise in prices paid to farmers and the first drop in retailers' and wholesalers' share of the grocery shopper's dollar since February. It worked out to a 0.3 per cent decline in July in the retail value of a year's marketbasket of 61 U.S. farm-produced foods bought by a hypothetical urban wage-earning family of 3.2 persons. The new annual cost of $1,726 for that marketbasket still was 12.9 per cent higher than midsummer 1973. The farmers' share was 2.6 per cent below a year ago and 3.8 per cent more than in June. The share representing the costs and profits of processors, wholesalers and retailers fell 3 per cent from June's market- basket but still was 26.7 per cent larger than July 1973 and 1.7 per cent above March. Publicist appointed WASHINGTON (AP) President Ford has named Paul A. Theis, a long-time Republican party publicist, as executive editor of the White House speechwriting staff. Theis has served since 1960 as public relations director of the Republican Congressional Campaign Committee. In announcing the appointment on Friday, White House Press Secretary Jerald F. ter- Horst said Theis would not be a speechwriter himself but would supervise "the preparation of speeches and public statements other than on legal matters." Business News Ten years ago, a fireworks explosion in AUatahuca, Mexico, during a religious celebration killed 45 persons and injured 33. Five years ago, Iraq executed 15 persons on charges of spying for the United States and Israel. One year ago, it was disclosed that three high-ranking foreign service officers were among 13 government officials whose telephones were tapped on President Nixon's order between 1969 and 1971. Today's birthdays: Physicist Ralph Lapp is 57. Argentine poet Jorge IAU'S Borges is 75. Thought for today: Impropriety is the soul of wit- Novelist Somerset Maugham, 1874-1965. FERGUS JOURNAL COMPANY Established 1873 Charles Underwood, Publisher George Marotteck, Business Mgr.-James Gray, News Ed. Glenn E. Olson, Advertising Mgr. P^si y efl bv fcrg j e«c(-c* Sv^a^sa'x: s ;ojri-^i Co at «1« E Cnar HO' sacs Sfcond ciassocv s Fa':i. v rn 54537. c Sctiroeders attend breeders convention Mr. and Mrs. Herb Schroeder of Fergus Falls joined 700 delegates from 37 states, six provinces and three other countries last week at the annual convention of the National Association of Animal Breeders at Toronto. The progress of artificial insemination over the past three years was traced by William Durfey, executive secretary. Sales of dairy bull semen last year in the United States totaled over 12 millior units, up six per cent since 1971. Beef bull semen sales were over three million units, an increase of 37 per cent over 1971. Family Insurance agent Busche named American Doug Busche, who has been manager of the Bob Fritz Sporting Goods Store in Fergus Falls the past 15 months, has been named a representative of the American Family Insurance Company and is joining Herman Teberg as an agent. His office will be located at 120 W. Lincoln. Busche has completed the insurance company's training program and he wUl specialize in auto, fire, health and life insurance. A native of Lakota, N. D., Busche is a graduate of the State School of Science at Wahpeton and Concordia College, Moorhead. His wife, Lana, is a registered nurse and is employed at Lake Region Hospital. Dillerud accepts position at Plymouth Charles Dillerud, son of Mr. and Mrs. Elder Dillerud of Fergus Falls, who has been city planning director at Winona the past six years, has moved to Plymouth with his wife and two children where he has accepted the position of director of planning and development. Plymouth, west of Minneapolis, covers 36 square miles and has a population of 25,000. An ultimate population of 125,000 to 150,000 is projected, Dillerud said. He began his new duties Aug. 19. Mel Kimbers meet Chuck Connors Mr. and Mrs. Mel Kimber of Kimber Awning Company, Fergus Falls, met actor Chuck Connors of television'? "Rifleman" fame at the Scorpion regional dealer meeting held at the Radisson South, Minneapolis, recently. The meeting, held for Scorpion dealers from throughout Minnesota, North and South Dakota, featured Scorpion spokesman Chuck Connors and the introduction of the new line of snowmobiles for 1975. Pizza Hut opens 1600th restaurant Pizza Hut Inc. has announced the opening of its 1600th restaurant. That number includes units in Australia, Canada, Costa Rica, England, Germany, Guatemala, Japan and Mexico. The company's net sales for the three month period ending June 30 increased 43 per cent to $30,556,000. Net income rose 44 per cent to $1,752,000. Earnings per share increased 42 per cent over the same period last year. than five years so that no more than 30 per cent of the gain on the sale of the assets would be subject to tax. The bill also would give all homeowners the relief now afforded to taxpayers over 65 on the sale of a personal residence. If enacted, the amendment would allow any gain on the sales price of a residence up to $35,000 to escape taxation. On amounts above that, a pro rata reduction would be provided. Mills also said the bill would increase the investment tax credit—from 4 per cent to 7 per cent—for property used mainly for supplying electricity or gas to local distribution systems. That would put it at the level already available for other industries. He said he expects his committee "to resume work promptly on the final draft of tax legislation" on Sept. 11 and to swiftly send a bill to the House, where "I believe that (it) will be passed promptly ... in time for the Senate to act favorably on it before adjournment." The bill also contains a new minimum tax proposal to take away from the wealthy an estimated $400 million more each year. In place of various miscellaneous but popular deductions, such as the one for state gasoline taxes, the average itemizing taxpayer would find a so-called "simplification deduction" letting him claim up to $650. Average taxpayers also would find a boost in the maximum standard deduction used by those who do not itemize, rising from $2,000 to $2,500. There also would be a hike in the minimum standard deduction that helps low-income taxpayers, increasing from $1,300 to $1,400 for singles and $1,500 for couples filing jointly. Oilmen would see their 22 per cent depletion allowance, which saves them between $2 billion and $3 billion annually in federal taxes, phased out over three years, with the first cut going into effect retroactively to the start of this year. There also would be a new temporary excise tax on windfall profits of the petroleum industry. But tied to this would be a plan giving energy-seeking oilmen a way to escape paying much of this new levy. •Merry-Go-Round' Warhorses fight reform By Jack Anderson De vffeo b/ ca'r er. II 30 per no By -a I in aa.ave r 12900 tr-.t^. ,' . SHOC. ssoc VEV.BEBCF THE ASSOC'tTEOPSESS TELEPHONE *3 lltisn Peric-.a' erl S:r.g. Wanr Ads. Subscr plr Soosi Nevii 734/601 An estimated 14.3 million futures contracts worth $181 billion were traded on regulated commodity exchanges in 1972. Dear Minnie, Ever think about the word "park"? Remember when it used to mean lovemaking in a parked car? Well, it seems any kind of lovemaking that went on between the county and the city is kaput for a while at least. And it's all because of parking or no parking. You may have read that the city council held a hearing on the matter of allowing parking across the railroad tracks from the court house where there are now two houses. The city council did what the planning commission recommended and did not allow it. The county commissioners are not very happy. They had bought the two houses and were planning to go ahead with making a parking lot. They did that after talking to some of the councilmen and other city officials who thought it was a good idea. Well, the people living in that neighborhood didn't think so. They believe it would reduce the value of their homes and make for more traffic problems and dangers for their kids. Quite a number of them showed up at the hearings and spoke their minds. What should the city council have done? That's kind of hard to say. It seems there was no way to make a decision without riling up the neighbors or the county board. Parking is a problem around the court house and the commissioners wanted to find a place for court house workers to park their cars. The city has owned a couple of buildings where Worners and the Larson welding shop used to be for quite a while. They were bought to make way for more parking but the city says it doesn't have the money to tear down the buildings and make a parking lot kitty-corner across the street from the court house. The city has a few other problems, too, connected with parking lots. Otter Tail Power Company has offered to make a trade of property across from the post office for part of the Washington Avenue lot and I guess that has not been settled. And now the county board has a problem with the two houses it bought on Court Street. What should they do with them? I guess there are a few idea, like selling them. Or making one of them another half-way house and the other one a home for mothers with dependent children. Our new President Ford may help solve the parking problems in Fergus Falls. If the gasoline tax is raised another ten cents a gallon there won't be so many car drivers looking for a place to park. They'll hoof it to work, ride bicycles or pool rides. There are other kinds of parks in Fergus Falls, thanks to both the city and the county. Both the city hall grounds and the court house lawn are something to be proud of. And there is even a little beauty in spots in the city's parking lots as well as in other lovely parks. Didn't I do well sticking to one topic this time? There's time for me to get a picnic lunch together if Ed can be talked into going to Roosevelt Park. As ever, Sadie WASHINGTON - Last month we set up a special "Reform Watch" to keep the public posted on what Congress is doing to put its own House in order. Here is our latest report: No issue is more despised on Capitol Hill than congressional reform. When plans to reorganize the House surface, even the most antagonistic congressmen often combine to club them down. A workable plan with Rep. Richard Boiling, D-Mo., submitted to run the House more efficiently is now getting a bruising. The bill would abolish some outdated committees and streamline others. It would break the stranglehold of the seniority system which keeps bright young members out of leadership positions. National problems, from health, to energy, to inflation, to tax reform, could be handled faster. Committees would be required to oversee the programs they pass instead of simply whelping and forgetting them. But the old warhorses who control the House are fighting reform. If their committees are sliced up like watermelons, they will be left in some cases with nothing but the seeds. Here are three typical case histories of how the Old Guard is protecting itself: — Decent old Rep. Car Carl Perkins, D-Ky., would have his Education and Labor Committee cut in half by reform. So a few days ago, he quietly organized a bloc of committee chairmen and met with House leaders Carl Albert, D-Okla., and Thomas O'Neill, D-Mass. Perkins' posse, made up of Reps. Wilbur Mills, D-Ark., Wayne Hays, IXIhio, Rep. Lenore Sullivan, D-Mo., Harley Staggers, D-W.Va., and incoming chairman David Henderson, D-N.C., wants to postpone the Boiling Bill until after the November elections. So far, Albert and O'Neill are backing the reforms. — Mills, chairman of Ways and Means, would also suffer a power loss under the Boiling Bill. So he helped sidetrack it to a study committee chaired by Rep. Julia Hansen, D-Wash. Ms. Hansen has her own weaker version of the bill, but it is disliked by most Republicans and it probably would be killed on the floor. Mills, in effect, was trying to pigeonhole the Boiling Bill. — Hays, whose House Administration Committee would be leashed by the Boiling Bill, threatened to hold up election campaign reform until the Boiling report was squashed. Earlier, the capable but cantankerous Hays suggested to at least one House member that a vote for Boiling might affect the contributions the member received from the Democratic Congressional Campaign Committee, which Hays heads. Even some of Congress' most productive members have joined to defeat the Boiling Bill. While they publicly insist they are afraid the reforms will lead to corrupt concentrations of power, they privately concede that they don't want to give up their cake any more than the Old Guard. Respected Rep. Frank Thompson, D-N.J., for instance, has pulled out of the fight for reform. "The public got what they wanted this year — campaign reform," he told us. Thompson, a ranking member of the Education and Labor Committee, loves the education side of .the committee, but he did receive $21,024 from labor union contributors for his 1972 campaign. Dividing the committee could divorce Thompson's love from his labor contributions. A tiger on behalf of con- sumers and conservationists, Rep. John Dingell, D-Mich., would have two key committee assignments hatcheted by the Boiling Bill. Dingell candidly told our reporter Jim Moorhead: "I think the Boiling report stinks and I want to kill it any way I can." Though less vocal than Dingell, several other opponents of the bill are equally helpful to the poor, the ailing and idealistic. Yet they, too, have drawn the line when it comes to loss of power. Thus, Reps. Jack Brooks, D- Tex., Phil Burton, D-Cal., and Jim O'Hara, D-Mich., all scarred from long battles on behalf of the people, are now joining forces with special interests champions as Armed Services Chairman F. Edward Herbert, D-La. We will keep watch on the reforms and report to the voters before November on which of their elected representatives still drag their feet on overhauling the lawmakirig machinery. OILY RULING: Five giant oil companies have been able to hide their far-flung foreign operations from the public with the active cooperation of the Securities and Exchange Commission. The five are Shell, Standard Oil of California, Exxon, Texaco and Mobil. For a time, it appeared that Rep. John Moss, D-Calif., would be able to drag the information out through his House SEC subcommittee. But Standard, Exxon, Texaco and Mobil, all part of the Aramco group in Saudi Arabia, speedily raised the tattered banner of "national security" to hide their foreign dealings. They argues that being forced to report separately their profitable overseas operations instead of lumping them in with their overall report could endanger a conference with secretive foreign oil-producing nations called by Secretary of State Henry Kissinger. By invoking the magic name of Kissinger and claiming that the foreign figures would only mislead investors anyway, they won SEC approval to keep the facts in the closet. Amazingly, however, SEC strictly required separate disclosures for foreign and domestic operations for 11 smaller oil firms. Meanwhile, the public has little information to determine whether Big Oil's overseas profits should be applied to bringing down the price of gasoline at the pump. They'll Do It Every Time IHEW THE. PARAPfc ] MAE MALOO 10025 $0 rtWW*U CHICAGO, ILL. Sadat sets U.S. visit CAIRO (AP) - President Anwar Sadat will visit the United States in November for a week to 10 days, Egypt's ambassador in Washington is quoted as saying. Reporting from Washington, Cairo newspapers said on Friday that Ambassador Ashraf Ghorbal was consulting with American officials to make arrangements for the visit. Newspapers quoted Ghorbal as saying Sadat's trip is expected to coyer a number of cities in various parts of the United States. Ghorbal said Sadat and President Ford would sign a number of agreements aimed at broadening cooperation between the two nations. Emmigration plan viewed WASHINGTON (AP) - The United State; and the Soviet Union are getting close to agreement on a plan to allow Soviet Jews to emmigrate freely, Sen. Henry M. Jackson, D-Wash., says. Jackson linked the progress to what he said was the Soviet Union's deteriorating economy, on the one hand, and the prospect that the Senate would approve most-favored-nation trading status to the Soviets if Jewish emmigration restrictions were eased. President Ford and Secretary of State Henry A. Kissinger have been involved in the negotiations, Jackson said, and the talks are approaching the stage where Soviet officials and the State Department might exchange documents or letters outlining a form of agreement. On another matter, Jackson asserted that consumers would pay about $20 billion more in higher oil prices and taxes if the Ford administration agrees to decontrol prices of so-called "old oil" and places a new 10- cent-a-gallon tax on gasoline. "Oldoil," about 75 per cent of domestic production, refers to that amount equal lo or below 1972 produclion levels.
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