-•J it'll* Galesburg Regisfer-Mail Showers Tonight Low 65-70 Warmetf Friday High 80'3 A Better Nempaper VOLUME LXXXII 140 GALESBURG, ILLINOIS 6,1401 —* THURSDAY, JUNE 14, 1973 PRICE TEN CENTS netail Prices frozen, Phase IV Will Follow WASHINGTON (UP1) President Nixon froze all consumer prices for 60 days, beginning today, in a tacit admission that his voluntary economic controls,had Med to halt the country's worst round of inflation in a generation. Wages, for the time being, remained unfrozen. Nixon said the freeze would be followed, probably in early August, by "a new and more effective system of controls." — Phase IV — that will be bigger and tougher than the mostly voluntary Phase III stabilization program. The President announced his latest experiment with economic controls, his fourth in two years,- in a nationally televised speech Wednesday night that followed several days of debate at the White House over the nation's economic plight. These were the main points of the new Nixon program: —For the duration of the freeze, a maximum of 60 days, sellers may not charge more than the highest price at which items or services were sold between June 1 and June 8. —Wages will not bo frozen so long as pay increases "continue to be responsible and non-inflationary." —Raw farm products such as raw potatoes or a head of lettuce are exempt from the freeze at the first sale but are covered when they hit the grocery stores. —Rents, which have been increasing at a slower rate in recent months, are also free of the freeze. —Dividends and interest rates remain subject to voluntary regulation. —A beefed-up Internal Revenue Service will conduct a "profit sweep" to determine if price increases since January have violated Phase III guidelines. Congress Asked for Authority —Congress will bo asked to give the President new, authority to limit exports of feed grains and certain other agricultural commodities in short supply that have helped drive up the domestic cost of food. Since neither wages nor interest rates were frozen, and since both affect the cost of housing, it was not immediately clear what impact the new measures would have on that aspect of the economy. At no time in his 15-minute speech did Nixon mention the Watergate scandal. But it was clear that the new economic tactics were at least partially, intended to restore sagging confidence in the value of the dollar, which had slumped beyond the levels Nixon set in his sec ond devaluation because international money traders lacked confidence in his administration. The President also promised that the freeze, which somewhat resembled'.the Aug. 15 Nov. 13, 1971 wage-price freeze that kicked off Nixon's new economic policy, would not lead to permanent controls. "We are not going to put the American economy in a strait jacket . . . ," Nixon said. "We must not let controls become a narcotic, and we must not become addicted." Shultz Against Freeze The decision to freeze prices flew in the face of recent arguments by most administration economists, especially Treasury Secretary George P. Shultz, who counseled that supply-and- demand forces were at least beginning to cut into inflation and that a booming economy with increasing shortages was (he worst time to tighten controls. But demands for action from economic activists such as former Treasury Secretary John B. Connally apparently carried the day. In the five months of Phase III, retail prices rose at an annual rate of 9.2 per cent, about three times the 1972 rise. Wholesale prices went up an alarming 23 per cent in the same January j May period. Nixon also repeated.his threat to veto "budget-busters" — bills passed by Congress that exceed his spending limits. But he coupled this with a request for "quick action" by Congress on a number of price- related measures, including the disposal commodities in government stockpiles and construction of the Alaska oil pipeline. President Outlines Price Freeze Kissinger Briefs Congress on Talks WASHINGTON (UP I) — Henry A. Kissinger indicated to members of Congress today there was little prospect of any let-up •.soon in U.S. bornlbing in Caimboclia" and : Senate Republican Leader Hugh Scott served notice he would stop supporting the bombing policy. Kissinger, President Nixon's chief foreign affairs adviser, held .a. closed meeting with the congressmen to discuss his newly negotiated agreement with North Vietnam to firm up the Indochina cease-fire and was quoted as saying, "The Cambodian situation is pretty much where it was." Soon afterward, Scott, who has been moving since December toward a break with the administration on Indochina, issued a statement saying he would continue to support Cambodian policy only "until the end of this month. "Thereafter my personal decision will have ito be that I can no longer support U.S. bombing of Cambodia or in or over any of the nations of Indochina." Sen. Hubert H. Humphrey, D- Minn., said Kissinger, who also negotiated the original cease fire for President Nixon last January,' told. a closed meeting of senators that "the Cambodian situation is pretty much where it was. "In other words, it is. still a battleground," Kissinger was quoted as saying. Backers of legislation to cut off funds for the bombing, vowed to press anew their effort to pass the measure. j Where To Find It 4 SECTIONS 36 PAGES Abingdon 31 Amusement 6 Bushnell 21 Business News 14 Classified "Ads .. 32-33-34-35 Comics-Radio - 24 Editorial —-— 4 Galva 21 Hospital Notes 9 Knoxville 31 Markets . 26 Monmouth -— 20 Obituary r _ 9 Sports 29-30 Weather — — 3 Women in the News 11-12-13 Magruder: 'Mitchell Approved Bugging' Sky lab Experiment Flops HOUSTON (UPI) - Skylab's astronauts, gradually adjusting to an early bird schedule for their final week in space, tried to make some more ball bearings today but instead turned out some "funny look' ing" metal globules. The experiment, one of several that may lead to manufacturing industries in orbit some day, was the first research operation of the day for Charles "Pete" Conrad, Joseph P. Kerwin and Paul J. Weitz. Conrad said he was having trouble using an electron beam to completely melt small nickel cylinders to make the V-i-inch balls in a small vacuum chamber. "It doesn't melt those balls right," he told mission control. "I'm just not meeting with very good success in making ball bearing type looking devices. There are all kinds of funny looking things." Conrad started the materials processing experiment Wednesday and reported forming one good sphere before the'electron beam welder turned off. The idea of the experiment is to melt the metal completely and then let it float and harden in the weightless chamber. Engineers know from basic physics that a freely suspended liquid will draw up into a perfect sphere. The astronaut s' work schedule today was shortened by two hours to let them go to bed earlier and get used to a new schedule next week. WASHINGTON (UPI) - Jeb Stuart Magruder testified today that John N. Mitchell, the farmer attorney general, personally approved! the Watergate bugging. But he said he believes PrasAdenit Nixon knew nothing about Watergate in advance. In the most explosive testimony to date in the Senate Watergate hearings, Magruder said planning for the espionage operation began under Mitchell's guidance while Mitchell still was attorney general. Final Approval Final approval came on March 30, 1972, he saidr-after Mitchell had left the Justice Department to become Nixon's campaign manager—iat a meeting with Magruder in Key Biiscayne, Fla. "Mr. Mitchell agreed to approve the plan," Magruder testified. In his opening statement, Magruder stressed that as far as he knew, "at no point...from the time of the planning of the Watergate to the time of trying to keep it from the public view" did Nixon have any knowledge of the plot. He said he had routinely sent a copy of the approved proposal to Gordon Strachan, special assistant to White House Chief of Staff H. R. Haldeman—and Haldeman's liaison man at thej campign. Mitchell Denial Mitchell hais repeatedly denied ever approving any electronic surveillance against Democrats. He told the Watergate grand jury April 20 he had sat in on three meetings early in 1972 where such plans were discussed, but that he rejected them each time. Magrudec who was Michell's deputy at the Committee for the Re-Election of the President (CRP), said the bugging master plan contained 1 three targets -4he Democratic National Committee (DNC); the Fontainebleau Hotel in Miami Beach which was the focal point of the Democratic National Convention; and the headquarters of the Democratic presidential nominee, who had not been chosen yet. Only the DNC operation was carried out. Earlier testimony has established that two telephone taps were placed there May 27 last year. Five men, including the Nixon campaign security chief, were arrested there three weeks later, on June 17, when they returned to find out why one of the taps, on the phone of then-Democratic National Chairman Lawrence F. O'Brien, was not working. Promise of Immunity Magruder, testifying under a court-ordered promise of partial immunity from prosecution, said in his brief opening statement that he did not believe Nixon knew in advance of the break-in. Unfortunately, we made some mistakes in the campaign which have led to a major national concern," he said. "For those, for those errors in judgment that I made, I take full responsibility. I am, after all, a mature man, and I am willing to face the consequences of my own acts. These mistakes were made by only a few participants in the campaign. "Thousands of persons assist- Magruder Takes Oath Jeb Stuart Magruder, former deputy director ground, back to the camera, is Sen. Sam of the Nixon campaign, takes his oath before Ervin, D-N. C, committee chairman, the Senate Watergate Committee. In the fore- Freeze Reaction Mixed, Dollar Is Under Pressure ed in the campaign to re-elect the President, and they did nothing illegal or unethical. 'Aides Failed Him' "As far as I know, at no point during this entire period, from the time of the planning of the Watergate to the time of trying 1 to keep it from the public view, " did the President have any knowledge of our errors in this matter. He had confidence in his aides and I must confess that some of them failed him." "I regret that I must today rifline others who participated!not used "strongarm lobbying with me in the Watergate [efforts" to defeat economic By United Press International Many Democrats in Congress said President Nixon's price freeze was "too little and too late." Republicans generally supported it. However, reaction in the money markets of Europe was unfavorable as selling pressure mounted against the dollar. Rep. Wright Patman, D- Texas, chairman of the House Banking Committee, said many of the nation's economic prob- ems "could have been avoided" if the administration had affair," Magruder said. "This is not through any desire to implicate others, but simply to give you the facts to the best of my recollection." Senate committee sources have told UPI that Magruder has informed its investigators controls endorsed by crats last April. Democrats then proposed a return to full, long-term wage- price controls. Patman said Nixon was freezing prices temporarily at "unconscionable[Richardson levels." Congress "standsjnouncement Means Committee. But he added, "I hope I'm wrong." Sen. Henry M. Jackson, D- Wash., said that in suggesting new export controls on foodstuffs, the President "is admitting the mishandling" of last year's agreement to sell grain to Russia. "This is an interesting admission," Jackson said, "as Soviet leader Leonid I. Brezhnev arrives here Monday looking for more of the. same." I House Republican leader Gerald Ford of Michigan called tlio freeze "right on target." Demo- J Senate GOP leader Hugh Scott of Pennsylvania said it "should lead to the stabilization of little loo late" today and selling pressure mounted against the dollar on money markets throughout Europe. Gold prices in London, home of the world's most important bullion market, opened slightly lower, then at midday spurted rapidly forward to $116 an ounce—up from Wednesday's $115.50 close. "Nixon's freeze was too little too late" one London gold dealer said. "And, there is still Watergate and the question whether he has the long-term authority to set the American economy straight." Bankers said the dollar opened fairly strong on most prices of food, gasoline and J major markelS| but tnat skep u other products. | RISM OM . NJ XO11 \J measures quickly developed and its value Attorney General Elliot L called the an"a strong and began to droop. "The reaction to Canoeists Reach Wisconsin President that Mitchell p e r s o n a 11 y!ready to give legislative back-jo f 1'e c t i v e approach," and foil's economic measures, authorized $250,000 for G.jing " to stronger economic [promised, "we will enforce thejquite simply, is that the dollar Gordon Liddy—the campaign finance counsel later convicted A group of Illinois canoeists is in the process of reinacling the Marquette-Joliet Mississippi River Expedition of J 673. They have traveled 400 water miles on Ibo first leg of their 3,000-mile journey, and were photographed near Portage, Wis. The trip began May 17. UN1FAX for Watergate—to use to undertake the bugging and other spying activities. action," lie said. |iaw vigorously and fairly,jf e ll back," a European dealer "It's probably too late.l^ing whatever legal action is I representing a major U.S. tank probably too little," said Rep. (needed against violators." SJ1 y. "That tells this morning 's Dealers called President Nixon's 60-day price freeze 4 'too Wilbur D. Mills, D-Ark., chairman of tlio Houso Ways and story. Thy reaction is negative."
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