The Boston Globe from Boston, Massachusetts • 3

The Boston Globe Thursday, November 14, 1974 world card Cash customers get a break in credit 3Ii If use credit cards, as a borrowing device, or to avoid carrying large amounts of cash when traveling extensively, will continue to use them. "A lot of merchants may give up credit cards," Harrison said. "It's difficult to measure the precise effect of this thing." Any substantial drop in the use of credit cards would pose a serious threat to agencies which collect commissions on goods and services purchased through use of cards they issue. In the New England area, for in- stance, merchants who accept Master Charge pay the bank handling the service between 2 Vt and 3 percent on total purchases, depending on volume and other factors. Unless Master Charge customers use their cards for cash advances that are in effect loans, they pay no Merest as long as they settle up within 25 days.

However, the usual interest rate on purchases that are not paid for Within 25 days of the billing is Wz percent a month or 18 percent a year. "What it all boils down to is a pricing system that discriminates against the cash purchaser," Schuck said. The logical effect of widespread credit card use is that the consumer who cannot qualify for, or does not wish to use a credit card, is underwriting the convenience afforded those who do use the cards. Under the credit card system, Schuck said, the cash purchaser pays prices adjusted upward to enable the merchants to deal through credit cards. In the long run, the person who pays cash underwrites the overhead By James Stack Globe Staff The cash customer fs getting a break in credit card world.

A national consumer protection organization has finally won a long fight for legislation barring, effective next year, agreements between merchants and credit card companies that prohibit direct discounts to cash customers. The one who looms as the big winner in the fight -is the consumer who either by choice or necessity pays cash for everything he buys. Under existing agreements, merchants charge a 2 to 8 percent commission on merchandise to cover credit card handling costs. Consumer groups, now planning a vast program to educate consumers to the change in the law, claim the cash customer has long been discriminated against because of such agreements. ''We're getting out a special booklet for distribution to consumer groups around the country," said Peter Schuck, counsel for Consumers Union, publisher of Consumer Reports magazine.

"The idea is to let consumers know they will soon be eligible for cash discounts from merchants who deal in credit cards, and to generate as much competition as possible to bring about maximum benefit to those who pay cash." The new legislation, signed by President Ford on Oct. 29, will take effect a year from the date of its signing. It was part of a financial industry package attached as a rider to a bill expanding protection of bank deposits by the Federal Deposit Insurance Corp. "It's not going to help the credit State drops murder case, lacks witness card industry at all," said Dean Harrison, counsel for the State Street Bank and Trust Co. of Boston, holder of the large New England franchise for BankAmericard.

"How much it's going to hurt is another question," Harrison said. "I think we have to concede it's bound to have some kind of impact on the spending habits of people." BankAmericard and American Express were singled out from all major credit card firms by Consumers Union as targets of separate Federal court suits charging violation of antitrust laws. The actions were filed in Federal District Court for the District of Columbia. Carte Blanche and a number of regional credit card agencies agreed to eliminate "discriminatory clauses" before the suits were filed, Schuck said. The suit against American Express was dropped when the New York-based credit card agency agreed to settle out of court, Schuck said.

Jess Gregory, manager of public "The merchant simply won't give up the business for the sake of a couple of points if he knows it's going to a competitor down the street." Harrison, the State Street Bank's lawyer, said it was his understanding that officials at BankAmeri-card's national headquarters in San Francisco are studying the question of whether to follow the lead of American Express. "Obviously, the new legislation appears to make the question moot, except possibly as it involves cases preceding the President's signing of the bill," Harrison said. Harrison agreed the legislation permitting cash discounts as an alternative to the use of credit cards will have an inevitable impact on the industry. "My personal opinion is that those who use credit cards as a convenience and pay their bills quickly to avoid interest charges may not use them at all, or at least use them less." Harrison said he felt others who of Dedham and her mount leada pony of credit card agencies, including losses resulting from delinquencies. "This is why we brought the suit," Schuck said, "but it's all overshadowed now by passage of this new legislation which invalidates any agreement prohibiting discounts for cash." Schuck stressed that the new law in no way requires merchants who accept credit cards to offer cash discounts, but cited the obvious competitive advantage for those who decide to do so.

"It will stimulate a competitive mechanism that cannot help but benefit the consumer once he is educated to the idea of shopping around for the discount," Schuck said. He said freedom from the no-discount clause is also expected to encourage merchants to offer such discounts as an alternative to the higher expense and bookkeeping that credit card sales entail. Schuck said the Federal Reserve Board is still preparing guidelines for use by store owners and others operating in the sale of goods and services. Even airlines, now prohibited by the Civil Aeronautics Board (CAB) from offering cash discounts, may feel the impact of the new law, Schuck said. "We're considering bringing the matter up with the CAB in an effort to get them to change this policy," he said.

"Obviously, if one major airline were to offer cash discounts as an alternative to credit card use, others would have to go along or suffer a passenger drop on routes connecting the same cities, and this would be another plus for consumers." clerk Housing Court, which pays $4000 more than a district court clerk job, and at the Chicopee and Holyoke District courts. On Tuesday, Sargent appointed Paul Walsh, his campaign coordinator for Southeastern Massachusetts, to the new full-time job as chairman of the state Racing Commission for an eight-year term at an annual salary of $27,500. The Sargent Committee, which Zuchero presided over for. five years, was responsible for raising funds for the governor while he was in office. Zuchero said he doesn't know whether a successor will be named for him, but noted that a Sargent fund-raiser "is in the works." Sargent said several days ago that he is "$200,000 in the hole" from his reelection campaign, and Zuchero said it is the committee's responsibility to "wipe out any debt." letters solicited from parents as to the personal strengths and weaknesses of their Harvard-bound offspring.

i One former employee of the registrar's office at Harvard College said many of these letters "would offer an unscrupulous person a terrific opportunity to practice blackmail." Silverglate's position Is that once a student has claimed a right to see what's in his files, Harvard would be acting illegally to change the status quo by stripping his file nf nnv materials wmlo his rlaim is S- -J affairs for American Express, said: "Our posture now is that any service establishment may offer a discount for cash if il; does so clearly and conspicuously to all customers." He said the thrust of a prior agreement was that no merchant could discriminate against a credit card customer by offering discounts to cash customers. "Our new agreement," Gregory said, "makes it clear that no merchant can discriminate against any customer, cash or credit. "We believe this will eventually involve clearly-worded advertising on credit practices, merchandise pricing or even sign posting to make it clear that the alternative was available to all customers." Gregory said American Express has already sent notices to clients making its stand clear. One Boston banker explained that a person will now "be able to walk into a store and, if he spends enough, will be able to get a discount equal to or exceeding what the merchant would pay the credit card company. In a statement released late yesterday, Dukakis said the appointment is "especially troubling in light of the strong community support for the appointment of the acting clerk of the Chelsea District Court, who has served for 15 years as assistant clerk." Dukakis said that throughout his election campaign he had "stressed the need to restore people's confidence in our court system" and noted the need for a judicial screening process "that will finally put capable people in the court room and take politics out." He said he was disturbed last week when the governor would not agree to set up a screening process for lame duck judicial appointments.

"I am very troubled by this latest appointment," he said. Sargent was in Washington last night and unavailable for comment. As he continued to fill vacancies will no longer be part of the students' records" and hence not covered by the law, General Counsel George Steiner said. The university's assurances that the documents will be kept safe were conveyed by Steiner's office to Atty. Harvey Silverglate, a former Harvard Law School teacher who represents four Harvard students seeking access to their files.

Silverglate said the university's promises made it unnecessary for him to seek an injunction against disposal of. the confidential materials, a course he had previously said With the setting sun painting the autumn sky, 17-year-old Roberta Rutko to the warm th of a friendly barn. (Photo by Angela Kaloventzos) Sargent names fund raiser Chelsea court By Alan Sheehan Globe Staff A first degree murder indictment against Stephen J. Flemmi, who was sought for, more than four years in connection with a 1967 gangland style murder, was dismissed yesterday in Suffolk Superior Court by Judge Paul Tamburello. First Asst.

Dist. Atty. John T. i Gaffney informed the court that the prosecution's sole witness, Robert Daddieco, has been missing for more than a year and, therefore, he could not proceed to trial. Flemmi, 40, formerly of Dorches-.

ter, was indicted in 1969 with three other men for the slaying of William (Billy) Bennett of Mattapan, in De-' cemberl967. Flemmi disappeared shortly after the indictments were returned by a Suffolk County grand jury. He sur-rendered to authorities in early May 1974. Of the three others charged in connection with Bennett's murder, two, Hugh Shields of South Boston and William Stuart, then a Boston Police detective went to trial. Shields was acquitted of first de-'? gree murder charges and Stuart was t.

4 found innocent of being an accessory after the fact of murder after a 1970 trial. Daddieco was the chief cution witness. The fourth man involved in the case, Francis P. Salemme, 40, for- merly of Sharon, also disappeared when the indictments were an-1 nounced. He was apprehended in New York in December 1972, and was charged with the Bennett mur-I der and the bombing of Everett Atty.

John Fitzgerald in 1968, which resulted in the loss of Fitzgerald's I leg. i- I Salemme was convicted in June, 1973 in Middlesex Superior Court of armed assult with intent to murder and assault and battery by means of a dangerous weapon in the Fitzge- raid case. He received terms of 19- 20 years and 9-10 years. By Rachelle Patterson Globe Staff Gov. Francis W.

Sargent yesterday named the executive director of his campaign fund-raising committee as clerk of Chelsea District Court, a job that pays $21,117 a year and which may be held until mandatory retirement age of 70. Victor F. Zuchero of 50, executive director of the Sargent Committeee since 1969 and former appointments secretary to the governor, real estate broker and coin laundry owner, was named to the clerkship. His nomination must be confirmed by the Executive council. The appointment drew harsh criticism from governor-elect Michael S.

Dukakis, who said: "What are Zuchero's particular qualifications? Is this the type of appointment that we can expect over the next two months?" on boards, commissions, and the judiciary, Sargent yesterday swore in his appointments secretary, Stanley F. Lapon of Wellesley, a Republican, to an job as a member of the Alcoholic Beverages Control Commission, a job he held until August of this year. Lapon, a Cambridge lawyer and a nonpaid trustee of Lowell Techno-, logical University, resigned the commission seat to become the governor's appointments secretary. As such, he was responsible for scheduling visits with the governor and handling all his public appearances. The commission vacancy was held open until yesterday, and Lapon will will fill the unexpired term which ends next year.

Sargent also appointed two special justices, Henry A. Tempone of Melrose, a Republican, to the Som-erville District Court, and John C. Ligotti of Lynnf ield, a Democrat, to he might follow on behalf of his clients. He said, however, he will go into US District Court in Boston Monday with a petition for a declaratory judgment a ruling by the court "as to whether Harvard's right or I'm right on this." The university's position is that the new law does not prohibit withholding of letters of recommendation and other documents submitted to the university under an explicit understanding that the university would keep them confidential Steiner said the removal does not violate either the letter or the the First District Court of Eastern Middlesex in Maiden. Tempone now serves as special justice in Maiden, and Ligotti is clerk of East Boston Municipal Court.

Special justice are parttime jobs which pay at the rate of $100 a day. Sargent's chief counsel, William Young, interviewed the nominees and the select committee of the bar associations also reviewed their qualifications, a procedure that has been followed by Sargent in judicial appointments. All judicial appointments must be confirmed by the Executive Council. Still to be filled are the jobs of associate justice of the Superior Court, special justice of the First District Court of Northern Worcester at Gardner, and presiding justice of the Great Barrington District Court. Three vacant court clerk posts also expected to be filled by Sargent.

They are at the Boston spirit of the law, which was sponsored by Sen. James Buckley, New York Conservative, as an amendment to the 1974 Elementary and Secondary Education Act. He said the university has a moral obliga-gation "not to allow the students access to the files. "The problem we faced here was that we made explicit commitments to the senders of those communications that what they wrote would be held confidential" Steiner said Tuesday. One "large class" of such documents, Steiner said last night, consists of "frank and confidential" Harvard says it won't destroy data removed from student files The key witness in the case was Daddieco who then was being held in protective custody by Federal au- thorities in the western part of the i country.

On April 22, First Asst. Dist. Atty. Lawrence L. Cameron the prosecutor in the Bennett case until his appointment as judge to South Boston District Court informed Chief Justice Walter H.

McLaughlin i that Daddieco could not be found. Judge McLaughlin dismissed the murder indictment against Salemme after a motion for a speedy trial was entered by Atty. Joseph Balliro. Two weeks after the charge against Salemme was dismissed, Flemmi arranged to surrender to j. Boston Police through Atty.

Robert Dinsmore. By Anson Smth Globe Staff Harvard University officials said yesterday that conffdential communications, removed from student files in anticipation of the effective date next Tuesday of a Federal open-files law, will neither be destroyed nor removed from university premises. The university stood fast on its contention that removing the confidential materials from the files and segregating them elsewhere is legal. "The parts that are segregated pending adjudication..