Chicago Tribune from Chicago, Illinois • 48

Chitaflo OHfctme Tuesday. March 27. 1979 Section 4 6 Stevenson tells measures to end trade deficit fe Business tJ Ticker 7 4 Kuparuk oil drilling plan told lfi 4. 2. 1-.

7 kif "VAT IS SUCH a geael Idea, bath litWIty and economically, that the real question is not whether we should move toward it, but why we've waited so long. "It would foster capital formation, reduce our trade and payments deficit, promote greater efficiency in business, raise large amounts of revenue, produce stability in revenue, be simple to administer, and avoid taxpayer revolts," be said. VAT Is basically a national sales tu. Walker said it would be applied to about half of the nation's $2 trillion annual economy, because services would probably be exempt. At a hypothetical 10 per cent rate, it would bring in more than $100 billion per year.

WALKER ACKNOWLEDGED criticisms that VAT, like many sales taxes, is regressive, that it is inflationary, and that as a "hidden" tax, it would be undemocratic. He said the regressivity problem could be handled by exempting necessities from VAT or taxing them at a lower rate. But he said a better, simpler way is to grant a refundable income tax credit on VAT payments to offset the regressivity. He agreed that VAT would raise the consumer price index, but said any effect on real income would be offset by a cut in personal income taxes. AND HE ARGUED that VAT should appear clearly on all bills and receipts "in red ink" so it wouldn't be hidden.

Walker said VAT has little chance in Congress before 1981. Given the mood of the country, he said, it probably could not be adopted "without some sort of constitutional or legislative cap on spending or taxes." VAT already is supported by two of the most powerful congressmen Sen. Russell Long La. and Rep. Al Ull-man Ore.

and has received partial support from Treasury Secretary Michael Blumenthal. By R. C. Longworth AMERICAN GOVERNMENT, led-ness, and labor are jointly to blame for Americas' trade deficit. Sen.

Stevenson I1L said Monday, and must adopt entirely new methods to elate it Tbe United States has wandered like Gulliver into the land of Lilliput," the Illinois Democrat wrote In a speech read for him at the 1979 Chicago World Trade Conference. "It is tied down by strands of minutiae, reorganiiation plans, webs of regulation, and sero-based budgets. Tbe growth Industries of America become the laws, firms, and government itself." Stevenson spelled out measures necessary to correct the nation's $31 billion trade deficit and to revitalize Us economy. "We could go all-out to produce food and feed tbe world," he said. "Instead, we pay farmers not to produce food and price it out of foreign markets." SIMILARLY, HE caned fer an aB-eut effort to Increase the world's sources of oil and natural gas, to end the "old adversary relationship between Industry and government," and to stop "subsidizing geriatic industries with Import quotas." "While the Japanese government Is combining and subsidising its electronic data processing industry, the United States is trying to break up IBM," Stevenson said.

Stevenson urged "selective tax concessions" for investment in research and development, closer attention to the economic costs of health and environmental regulations, an export strategy to increase sales abroad, and an easing of antitrust laws to enable firms to form trading companies to cooperate in overseas sales. Stevenson also said the United States should abandon the dollar's reserve role and encourage a new global monetary HP Titwiw Plat I Mir Gtot and A. Robert Abboud, chairman of the board of the First National Bank. The theme of the meeting at the Chicago Marriott Hotel is "Must we have a trade gap?" At the opening of the 1979 Chicago World Trade Conference Monday, a luncheon table was shared by Harvey Kapnick (left), conference chairman; Mayor Bilandic, personal income taxes. But they also have said it will help boost American exports.

Under international trade rules, indirect taxes like VAT can be rebated to exporters, enabling them to cut the price on sales overseas. The European Common Market nations, among others, have VAT now and so enjoy a legal advantage denied to American exporters. For this and many other reasons, Walker called VAT "an idea whose time is coming." system with a new worldwide unit of exchange. THE CONFERENCE opened with a call for an American value-added tax that would, among other things, stimulate exports. "I'm convinced that a value-added tax VAT can be shaped to give us a simpler, fairer, and more viable tax system," said Charls E.

Walker, former deputy Treasury secretary. But Walker said a VAT would be such a "powerful and painless" revenue earner that it would have to be linked to a limit on spending or taxes or "the spenders will take it and run away with it." THE TRADE conference, an annual affair, is based this year on the theme, "Must we have a trade gap?" It is being held at the Chicago Marriott Hotel. Congressional supporters of VAT have pushed it as full or partial substitute for Social Security taxes and corporate and Oil price look hurts market; Dow drops Stock Market March 26, 1979 Composite table Volum M.2S9.0W Issues traded Bell to pay ex-students in a $1.4 million deal with FTC over classes 1311 Unchanged F1 Dow Jones Industrials S54.S2 S.S.P. 500 101.04 N.Y.S.E. Index 66.76 Baud on N.Y.S.E.

trades trials dropped .66 to 112.77, and 500 composite Index was down .56 at 101.04. The session's biggest gainer was Florida Gas, which jumped $8.12 to $36.75. The company said two other concerns had expressed an interest in acquiring it and were studying whether a price of at least $50 a share was warranted. ANALYSTS SAID the market was bracing for more moves toward higher oil prices from the Organization of Petroleum Exporting Countries, meeting in Geneva on production and prices. An Iranian official said his country was backing a 29 per cent price increase.

In addition, brokers said the meeting came at a time when the stock market NEW YORK API-Expectations of higher prices by the oil-exporting countries helped send the stock market into a moderate decline Monday. The volatile gambling issues were among the biggest losers. The Dow Jones Industrial average, which had amassed a gain of 44 points over the last three weeks, fell back 4.93 to 854.82. Trading volume on the New York Stock Exchange dropped off to 23.43 million shares from 33.57 million Friday. Nationwide turnover was 26.28 million.

The daily tally on the NYSE showed about nine issues declining for every five thai advanced, and the NYSE composite index slipped .32 to 56.76. Standard fc Poor's index of 400 indus Atlantic Richfield Co. will develop the Kuparuk Formation, a major oil field discovered in 1969 on Alaska's North Slope immediately west of the Prudhoe Bay field already in production. The drilling and development program will cost about $350 million. The project Is expected to achieve average daily production of 60,000 barrels of oil by 1982, which could be raised to 100 barrels by 1964, the company said.

The oil will be transported through the Trans-Alaska Pipeline to Valdez. Atlantic Richfield's program is the first phase of what could become a $1 billion investment among several companies holding leases. T-bills slip to 9.437 The Treasury said the average return on 2S-week Treasury bills slipped to 9.437 per cent at Monday's auction from 9.483 per cent a week earlier. Banks and savings and loan associations will be able to offer the rate of six-month savings certificates of deposit beginning Thursday. Subscription TV Oak Industries, will license its over -the-air subscription television equipment and technology to UHF stations in the United States and abroad.

Oak said it will offer its licensing service in cities that it doesn't plan to oper-I ate a subscription television business. Mutual fund sales dip Mutual fund net redemptions totaled $96.6 million in February, compared with net sales of $41.4 million in Janu- ary, the Investment Company Institute reported. February sales not counting money market funds fell to $450.9 million from $648 million in January. Total net assets for mutual funds were $45 billion, down from $46.6 billion. Mutual funds purchased $751.3 million common stock in February and sold $1.07 billion.

The securities bought other than common stocks totaled $505.5 million and old $586.6 million. Executive elections i Fred E. Bennett was named president chief executive officer of Dearborn Chemical, subsidiary of Chemed Corp. He had been vice president-sales for Dearborn's eastern region. Contain- 1 er Corp.

of America said R.H. Brown was elected executive vice president and chief operating officer. J.F. Oates was also elected senior vice president of fi- nance and control, and C.A. Smith was elected senior vice president-employe relations.

Gerard F. Herkes was I elected executive vice president and secretary of Pepsi-Cola General Bottlers, Inc. He had been vice president of fl-Yiance and secretary. Hunt withdraws bid 4 Hunt International Resources Controlled by the Hunt family of Dallas, Cnded its tender offer to bm- Sunshine Mining operator of the nation's largest silver mine, for $15 a share. Hunt said six separate suits have been filed against the offer, making the effort 'and expense unjustified.

Sunshine man- agment contended that company shares were worth more than Hunt was offering. Bids for Hudson's Bay George Weston, Toronto-based holding company, is considering making an offer for 51 per cent of Hudson's Bay the big Canadian retailer. Two companies owned by the Thomson family are offering $31 a share for 51 per cent of Hudson Bay's shares. That offer is scheduled to expire April 6. 'Cut money supply' Henry Reuss, chairman of the House Banking Committee, in a speech in London said that Congress approves of the restrictive monetary policy being practiced by the Federal Reserve Board because of inflation.

"The House Banking Committee has just advised the Fed that it would be well to announce publicly that it is going to reduce the growth of the money supply by a percentage point a year until it gets down to a normal level of 3 per cent a year plus a 3 per cent velocity increase in 1982," Reuss said. Tribune Clurt seemed to be vulnerable to a setback after its recent gains. Call option prices were lower in moderate trading on the Chicago Board Options Exchange with losers outpacing gainers 432 to 84. Puts were higher as 34 advanced and 1 declined. Volume fell to 80,276 from 90,821 Friday.

No wheat manipulation: CRT chief that they could take a certified public accountants' examination in their state after completing a course," said David Marx, an FTC attorney." "Others tried to get help from the company by placing long-distance telephone calls and found the line was always busy." BELL HOWELL, In a brief statement, said that the settlement doesn constitute an admission that it violated the law. It also said that the amount of the cash settlement $1.2 million plus accrued interest won't have an impact in current earnings because it was set aside last year from a reserve created in 1976 when the schools were closed. The FTC complaint was filed on May 27, 1977, and legal proceedings began in June, 1978. However, the settlement was reached before Bell Howell presented its defense. "THIS IS the first time the FTC has done this, and it could set the pattern for future cash redress settlements' said Paul Turley, the FTC's Midwest regional director.

"It speeds up consent decree negotiations, which can take a long time and be expensive, but it also means that we can't be sure we'll redress everyone who's eligible," he added. "If there's a message, it's that the FTC will press hard to have the money up front before calling off litigation." The public may comment on the settlement for 60 days before the FTC decides whether to make it final. By Michael Edgerton THE FEDERAL TRADE Commission said Monday it settled its complaint against Bell Howell Co. over the marketing of the home correspondence courses. About $1.4 million of principal and interest, which had been held in escrow by Bell Howell, will be paid to former students by the FTC as part of the settlement.

The settlement was unusual because it marked the first time the FTC gained control of the cash redress funds and asserted the right to decide who's eligible to receive them. In the past, the companies performed those duties. THE FTC ACTION covered about students of accounting and electronics enrolled with Bell Howell Schools, between 1971 and 1976. The home correspondence schools produced about $425 million in revenue for the parent company, located in Lincoln-wood, but they were closed in January, 1976. Electronics courses cost about each and accounting courses about $1,000 each.

The complaint alleged that Bell Howell misrepresented chances of getting jobs after graduation and their earning prospect; the minimum educational background necessary; the difficulty of curse material; and the amount of help available to students. "Some students thought, for instance, chaired by Rep. Ed. Jones Tenn. has scheduled hearings on the wheat controversy for Wednesday.

CBT president Wilmouth and CFTC acting chairman Gary L. Seevers are expected to testify. As demonstrated by Wilmouth's remarks to the Eighth International Commodities Conference sponsored by New York University, the Board of Trade is downplaying its legal victory over the federal agency charged with policing the fast-growing commodities industry. "Federal regulators misperceived the situation this month, a misperception made all the worse by certain press tendencies to magnify it," Wilmouth said. "The steps taken and attempted as a result of that misperception were steps of the most serious sort, which we must hope will never be taken or attempted improperly again," he said.

IN THE WHEAT Incident, four profes-sional speculators including CBT vice chairman Leslie Rosenthal held more than 80 per cent of the open interest, giving them claim to more than four times the amount of wheat available for delivery in Chicago. Open interest represents the number of futures contracts to buy a commodity that have not yet been offset by contracts to sell or by delivery of the commodity. With only four days of trading remaining before the contract expired, the Commodity Futures Trading Commission ordered trading halted March 15 to head off a possible market "squeeze." A federal judge later overruled the CFTC's emergency order, and the contract went "off the board" without incident. A HOUSE agriculture subcommittee, and Terry Atlas IN A WARM UP for his congressional testimony Wednesday, the president of the Chicago Board of Trade said that federal regulators "roisperceived" the situation when they intervened in the exchange's wheat market to head off the "threat" of price manipulation. "The market record, as well as the court record, is bare of evidence of ma-niuplation," CBT president Robert K.

Wilmouth said Monday at a commodities seminar. "Ultimately, the fears of maniupla-tion, well-intentioned though they may have been, rested primarily upon the percentage of open interest held by a few traders and, perhaps, some prejudice because of the individuals Involved," he said. Fields reports 31 pet. hike in earnings for 78 Worker van can cut boss taxes Easy tax tips Angelo R. Arena Fields will add By George Watson Smith TOGETHERNESS.

With the signing of the Energy Tax Act of 1978, consideration might be given for employers to take advantage of a new investment credit Tbe Energy Tax Act allows employers a 10-per-cent investment credit on the purchase of a new van used for employe commuting. To qualify, the van must have a 3-year useful life and seat at least 8 adults plus the driver. At least 80 per cent of its mileage must be for van pooling and for transporting employes to and from work with the van at least half full. The credit is subject to recapture rules if the van fails to meet the 80-per-cent test or is disposed of within the first 18 months of its operation. auuui cj oiuica ill the next 5 years.

1 fi fair market value of automobiles, boats, clocks, toasters, pans, or other property or services received for making long-term deposits or for opening accounts in savings institutions is considered interest income and must be reported as income in the year received. LAST TIME AROUND. If you operate a motorboat, power lawnmower, snowmobile, or similar off-highway equipment, you can claim a credit of $2 for each gallon of fuel used to operate this equipment. The credit for lubricating oil used for nonhighway equipment is 6c per gallon. Just attach your completed Form 4136 to your federal income lax return and you've got the credit.

That's what line 60, page 2, of your federal tax return is all about. Starting in 1979, the Revenue Act of 1978 eliminates this credit for fuels used in non-business off-highway vehicles and for motorboats. Also, the van must have been acquired after Nov. 8. AS IT SEZ.

You may deduct one-half of your medical insurance premiums if you have itemized on Schedule up to a maximum of $150, even if you had no other medical expenses. This includes amounts you paid for hospital, medical, and Part Medicare insurance. Don't forget to check your automobile insurance policy for the medical premium portion if stated separately. LOLLIPOPS ARE FREE. Maybe.

The MARSHALL FIELD Co. reported higher earnings Monday for the fourth quarter and fiscal year, ended Feb. 3. Most of the increase was attributed to a non-recurring gain from a real estate -sale and the acquisition of a western store chain. Earnings for the year rose 31 per cent to $20.8 million, or $2.22 a share, from the year-earlier's $15.9 million, or $1.75.

Sales climbed 15 per cent to $762.6 million from $662.7 million. Figures for the quarter and year were aided by a gain of 26 cents a share from the sale of land in Oak Brook and 9 cents from the Nov. 1 acquisition of 16 John Breuner Co. units in California, Nevada and Arizona. Angelo R.

Arena, chairman, estimated that earnings were penalized by about 10 cents a share as the result of severe blizzard conditions that hurt sales in Chicago in January. FOR THE QUARTER, earnings rose 46 per cent to $13.8 million, or $1.35 a share, from the year-earlier's $9.5 million, or $1.04. Sales increased 30 per cent to $278.2 million from $213.3 million. Arena noted that the year's results also benefited from the reduction of losses from real estate and hotel ventures. Those pre-tax losses amounted to $1.4 million for the year against $4.2 million a year earlier.

Fields began the year with 31 stores and ended it with 63, having added five George Watson Smith i a certiftti public accountant with Smith-Speltnon Enterprises, of Southfield, Mich. Reject plea on antitrust papers stores in its Frederick Nelson Division in the West, the 16 Breuner stores, and one Marshall Field store. ARENA PROJECTED that Fields would add about 20 stores in the next five years. In addition, the company is negotiating to add four Frederick Nelson units in Portland, Salem, Corvallis, and Eugene, Ore. For the year, the Federick Nelso division had the strongest performance, Arena said, and the Chicago division's profits and sales were "below plan" because of the severe winter.

Sales gains at the company's Halle's division in Cleveland and Crescent stores in Spokane were moderate, he added. "The Cleveland stores made further improvement in expense management and the Spokane stores continued at a high level of operating profit," Arena said. MCI's cooperation with the government. The 7th U.S. Circuit Court of Appeals in January upheld Grady's modification.

MCI, a company that competes with sued the huge communications network in 1974 for alleged violations of federal antitrust law. Later that year, the government charged with numerous anticompetitive practices in one of the largest antitrust suits ever filed by the Justice Department 1.5 million documents and depositions of 40 employes reportedly relevant to the antitrust actions. APPEAL argued that Ma should have been prohibited from doing so because the documents had been among those submitted by under a protective order. U.S. District Judge John Grady In Chicago issued the original protective order, but then modified it to permit WASHINGTON AP The Supreme Court rejected American Telephone Telegraph attempt to stop consultations between the government and MCI Communications Corp.

over separate antitrust suits. The justices, without comment, Monday, left intact a lower court ruling that cleared the way earlier this year for uch consultations to begin. Under that order, MCI also turned over to government lawyers copies of "Greetings, all of you out there In stockholderlandl I want to welcome especially those of you who have recently joined our automatic divi-. dend Investment plan. You're a dan-' dan-dandy group!".