Page 4 article text (OCR)
Jlortfjtoegt Editorial-Opinion Page The Public Interest Is The First Concern Of This Newspaper 4 Â· TUESDAY, APRIL 23, 1974 Jaworski His Own Man, Connally Finds For Educations Sake.... A couple of straws in the political wind in recent days would seem to reflect a minimum of good news for Fayetteville's Sen. Bill Fulbright. First of all, a poll of voter sentiment from Bella Vista to Fort Smith, down the western edge of Northwest Arkansas, shows no particular edge for the incumbent, even though this IS his home turf. At about the same time, the state Political Action Committee for Education (PACE) fell short of an expected endorsement of Mr. Fulbright. PACE didn't have enough votes to endorse Gov. Bumpers, either, but the lack of endorsement for Fulbright is an unkind cut, it seems to us, for an enormous amount of services rendered. Of the two developments, we find the latter much the more inexplicable. Practically speaking, the Northwest Arkansas poll discloses little more than the fact that an existing pattern of conservative, Republican and independent voters, who never have been overwhelming in their support of Sen. Fulbright, is still intact. Bella Vista, on one end of the sample area, is heavily salted with residents from Republican parts of the Midwest; retirees of a substantially conservative bent. Meanwhile, Sebastian County and Fort Smith, on the other end of the sample area, are traditionally among the leading conservative, rightwing strongholds in the state. (The pollsters say they find strength for Sen. Fulbright strongest here in' the Fayetteville area, and that is pretty much exactly the way it has always been.) The PACE decision is something else, aga'n. The 15 delegates voting are reported to have mustered eight or nine for Fulbright, with 10 needed, for official endorsement. The Committee, after failing to obtain a two- thirds vote, even on compromise, issued a statement saying that while it recognizes Sen. Fulbright's near perfect record in support of education, it also must acknowledge Gov. Bumpers' interest in the subject, too. YVhat disturbs us here, is the fact that Fulbright -- a former president of the University of Arkansas and virtually a professional in the educational field (having taught at several colleges), and with a "near perfect voting re'cord" -- still can't win official endorsement from school people constituents. This is a difficult response to devine. The Fulbright record, in educational matters, is probably the best in Congress. It certainly is head and shoulders ahead of that of most Arkansas congressman, in history. It is sprinkled with momentous contributions, beginning with legislation creating the Fulbright scholarships, and continuing through such items as: --Sponsorship of the Elementary and Secondary Education Act, which is the major legislation in the field; --Sponsorship of the National Defense Act, which provides aid for teaching science, language and math; --Sponsorship of federal aid for areas impacted by federal projects (there are 66 in Arkansas); --A leading backer of occupational, vocational and adult education programs; --A leading supporter of legislation to grant federal aid for higher educational capital improvements (programs which benefited Arkansas by more than $12 million last year); --Sponsorship of the federal College Housing Loan Program; --An original sponsor for the Library Services and Construction Act; --And ad infinitum... The case is clear enough. PACE admits that. What then, is the curious climate surrounding the Senate race that forestalls recognition by education of perhaps the best friend it has? It's a puzzle that needs clearer thinking between now and May 28. For education's 'sake! From The Readers' Viewpoint Depletions To the Editor: As an economist teaching In the area of resources, I would like t o - m a k e a few'comments about the percentage depletion allowance, as it applies to oil. The headline in your April 3 paper which said "Oil Depletion Allowance To Be Abolished" was misleading. The story only reported that the House Ways and Means Committee had approved such a bill. The measure still requires approval by the House, a Senate committee, the Senate, probably a joint House-Senate committee, maybe a veto by the President, and attempts to over-ricle the veto. Thus, committee approval of (he bill to abolish the percentage depletion allowance is a long way from an accomplished fact. And I hope, for the nation's sake, that it ,doÂ«8 not occur--for several reasons. Abolititipn of the 22 per cent d e p l e t i o n allowance, t h e Committee says, will increase federal tax revenues by $2 billion a year. That sounds like a real windfall for the government; but how will it help the American consumer? The Chase Manhattan Bank has estimated that the domestic oil industry must raise $1 trillion between now and 1980, if this country is to remove its dependence on foreign sources of crude oil and meet demand for energy. If the industry is From Oar Files; How Time Fliesl 10 YEARS AGO A new Washington County Grand Jury will be assembled and sworn in at 9 a.m. next Tuesday to succeed the current panel which conducted its final sessions Ms week. It is expected that the new jury will take 50 YEARS AGO The British consul to St. Louis, Godfrey E.V. Herlslet, who will attend the Northwest Arkansas Apply Blossom Festi- 100 YEARS AGO Instead of the termination of war, it has broken out afresh. At 5 o'clock King White, in charge of the colored t r o o p s , marched onto Scott street and were a d d r e s s e d by Gov. Baxter, after which White up where the otiier one left off. A light plane piloted by a Fayetteville man landed safely at Decatur last night during a heavy rain after being long overdue on a flight from Springfield, Mo. to Fayetteville. val in Rogers, April 25. in company with Sen. Joe T. Robinson, will arrive Friday morning. made them an inflammatory harangue Col. Rose attempted to break up the corwd, and King's men fired, killing David Shell, a real estate dealer and wounding one of Baxter's officers. They'll Do It Every Time THE NEWEST ARISTOCRACY NOZZLE, THE FELW WHO RUNS THE KLAXON STATION-- HEY,30SE,(X: PAL- Howeoesir, BUPCV? euy THE/RE MAKW'THe BKJ FUSS ovsz? STICK TO66THER, ; AMXJO? WHATteASOOO TIME TO STOP OVER AN 1 6W HELLQ, CHUM? SINCE 6AS fS HARP TO Set HIM UKE WES SAKTA CUDS.' to make up the los of $2 billion a year that it now saves t h r o u g h t h e percentage depletion allowance, the- money must be obtained elsewhere. The added tax burden could be shifted backward to labor as Â· lower wages (unlikely), shifted to shareholders or independent owners in lower returns (undesirable), shifted to society as some other subsidy (unexpected), or shifted forward as higher prices (undoubtedly). If the burden is shifted forward, it is estimated lhat gasoline prices will need to rise at least another 114 cents a gallon to make up the loss. The increased gasoline price would not be a burden lo consumers if they realized an off-setting $2 billion tax saving from the action. But the federal govern- menl will keep the $2 billion, to spend on some "worthwhile" project, while consumers will pay another $2 billion at the gasoline pumps--in effect, an indirect gasoline tax increase! It is estimated that the percentage depletion allowance saving to the oil industry could pay for 5,000 or more additional exploratory wells a year (if f o r c e d into exploration)-something lhat is badly needed if this country is to increase its domestic sourles of enegry. We saw the adverse impact that this nation suffered a few years ago. when this exploration incentive was reduced from 2714 per cent lo 22 per cent. Now, some of our politicians want to take slill another step along the lines of least intelligence. Abolition of the percentage depletion allowance will be least damaging to the major oil companies--which can make up the loss in some other area (refined products, chemicals, real estate, etc.). In fact, some majors have wished for a long lime that they could rid themselves of this "albatross" that has brought them more criticism than profits. They will suffer the least in the end! It is the independent operator who will take the beating immediately. (The consumer--you and I--will catch it in the long r u n , ) The 1970s have seen more t h a n 70 per cent of the domestic new oil and gas exploration undertaken by so called independents-- relatively smaller operators. They have been the ones who risked Iheir capital on wildcat endeavors, with the majors generally being content to buy up the new discoveries a f t e r production is proved. The energy problem can only be f u r t h e r aggravated if Ihc recent cormittee action ever makes its way into law. Even the threat of such action can have a dampening effect on venture capital into the industry. What this new action by Ihe House Ways and Means Commiltcc amounts to in another drain on the consumer--in his gas t a n k and in his pockctbook. Have you ever seen a better case of a group of politicians pretending to pat the consumer on the hack, while looking for a sofl spot to knife h i m ? f/. D, Rclzung (Professor of Economics) Fayetteville By JACK WASHINGTON -- Former T r e a s u r y Secretary John Connnlly tried lo head off n Justice Deportment investigation of J n k o Jncohsen, the dairy lobbyist, who hns now confessed to Ihe Wnlergnle pro- .seculars thai lie delivered a $10.000 pay-off lo Connnlly from Ihe dairy industry. We have eclahlished (hat Connnllv last vear telephoned Richard Klcindicnst. then Ihe attorney general, and asked him lo intervene in Ihe Jacobsen cnse. The Justice Department, nevertheless, went ahead with a double-barreled Investigation of Jacobsen's role in the milk scandal and in an unrelated savings-anrl-loan case. Jacobsen was called before a grand jury where he swore Connally had rejected the $10,000. Trie dairy lobbyist testified that he had stashed the money is a safe deposit box and hadn'l louclicd il until the FBI opened Iho box. The FBI found evidence lo the contrary and the Watergate prosecutors began preparing a case against Jacobsen for ner- j u r y . Connnlly, inevitably, became involved in Ibe investigation. This was about the time that Archibald Cox was fired as the special Watergate prosecutor. The Washington Merry-Go-Round S u d d e n l y . Connally begun pulling strings lo name Cox's successor. Connally's choice WHS I,con jHWoi'skl, whom Pro- sidenl Nixon had once me I at a piirly for Texas dignllarles al Connally's rnnch. While House sources toll us that Connally urged Jaworskt'i appointment 1 upon Hie President. Connally also snctke to Ilia President's staff chief, Alexander Haig. nbonl Jnworskl. The appoinlmcnt of Jaworski. therefore, pill Conimlly in the h a p p y position of helping to choose Ihe special prosecutor who would now Investigate him. But if Connally expected a whitewash, he had misjudged Jaworski's character. The new special prosecutor, a mini of solid integrity, Immediately removed himself from all decisions affecting his friend Connally. In n private memo to Deputy Prosecutor Henry Ruth. Jaworski gave his deputy responsibility for the milk case, with full authority to direct'the investigation of Connally. On February 6, Jacobsen was indicted in the savings-and-loan case. Two weks later, he was indicted again for lyinff tn the grand jury about the $10.000. This confronted Jacobsen. say his friends In Texas, with an a n n u l l i n g h m n n n dilemma Ho considered Connally probnhly his best friend and might even have been willing lo go to prison for him. But Jacobsen's wife is in poor honllh and needs his constant attention. He was forced to choose, we were lold, between his wife and his best friend. After considerable soul wrenching, lie offered to cooperate with Ihe prosecutors in a bid for leniency. He told them he had delivered the $10,000 to Connnlly nt the Treasury Department. After the milk scandal broke into Ihe headlines, Connally returned the money mid they agreed upon a cover story, Jacobsen said. Jncobscii promised lo say he had not delivered the $10,000 to Connally but had kept it in a safe deposit box. Later, Connally brought a second $10,000 bundle to exchange for the first, because he became apprehensive that the First bills could he traced, Jacobsen told the prosecutors. Connally lias flatly tlnnied Jacobsen's story. Tie told us that Jacobsen told the truth the first time. We couldn't reach Connallv for comment rm the latest developments related in "It's Called The Saxbephone" State Of Affairs The Haves And The Have Nots By CLAYTON FRITCHEY WASHINGTON - Since the oil-producing nations launched their successful embargo last fall, there has been much loose alarmist talk about other "developing" countries also organizing themselves into commodity cartels in order to put the squeeze on the rich, consuming, industrial powers. It is largely an idle threat, for there is little danger that the poor, underdeveloped nations will ever get together and gang up on the powerful developed i n d u s t r i a l world. Even if they did there is little practical chance of it being effective. Oil is one t h i n g ; other, Iras unique, commodities are another. Nevertheless, it could well be that Secretary of Stiite Henry Kissinger, speaking at the special U.N. conference on raw materials and development, served a constructive purpose in f r a n k l y cautioning against any use of "the politics of plessure and threats." ' ' L a r g o price increases coupled with production restrictions." Dr. K i s s i n g e r ' t o l d the U.N. General Assembly, "involve potential disaster: global infaltion followed by global recession, from which no nation could esc;ipe." Regardless of ideology or social structure, he noted, "no nation or block of n a t i o n s cnn unilaterally d e t e r m i n e t h e shape of the- world." The great issues of development, he added, "can no longer be realistically perceived in terms of confrontation between the haves and havc-nols." CONSIDKRINO THAT the present special session of the Gpner,i| Assembly hart originally been called by the have- nnts lo necdl the hitvcs. Dr. Kissinger's views were surprisingly well received, perhaps because his warnings were accompanied by acknowledgment t h a t the haves ought to e l i m i n a t e the temptation or need for the havn-noh lo consider resorting In commodity blackmail. On behalf of P r e s i d e n t Nixon, the secretary of slain pledged the United 'States "lo a major e f f o r t io support of development," i n c l u d i n g a contribution t o t h e W o r l d D u n k . E a r l i e r this year. Congress killed a $1.5 billion contribution to the bank's soft- loan agency, the International Development Assn. If this decision is not reversed, the have- nots won't be much impressed by Kissinger's promises. Meanwhile, however, the spokesmen for the poorer nations at the U.N. conference are speaking more temperately t h a n they were a few months ago when some of them were calling for the creation of cartels, like the petroleum one, to push up sharply the price of raw materials needed by the i n d u s t r i a l nations. Raw material access has acquired a new importance for America. Columbia University Prof. Richard Gardner, a very knowledgeable - lawyer-economist and former State Department official, recently lold the Senate Finance Committee that by 1985 the United Slates, even if it achieves energy s e l f - s u f f i - ciency, will be primarily dependent on i m p o r t s for nine of the 13 basic minerals required by a modern industrial economy. Another authority, Lester Brown, also points out lhat between 1D70 and 1985 "we w i l l have made the transition from being an essentially self-sufficient country lo -- at least in terms of raw materials -- a have not country." We do not yet appreciate, he says, "the economic, social and political consequences of this historically abrupt transition." THAT MAY HE, hut il is reassuring to hear Dr. Kissinger tell tho U.N. General Assembly lhat [he United .States recognizes that its own future prosperity is linked to the development of the underdeveloped countries, and hence appreciates the need to help Ihe pnor nations get to their feet. The immediate problem Is t h a t the Administration has so alienated Congress by the impoundment of funds for domestic social needs lhat m a n y senators ,iml representatives have turned against White House proposals for foreign economic assistance. A c t u a l l y , such aid hns been on thn wane fnr years. Back in Ihe days of former President Harry S. T r u m a n and the Marshall Plan, American foreign aid reached 2.79 per cent of the country's gross national product (GNP). If it were still at that level, American aid in 1974 would exceed $30 billion, instead of a mere $1.4 billion of economic assistance last voted by Congress. That amounts to less than two-tenths of 1 per cent of the current GNP. Of the 25 major donors to the World Bank's International Development Assn.. the U.S. contribution, in relation to the GNP, was smaller than all the others except Austria and Italy. Western fear that higher raw material prices may cause a wor'd depression, says Allen Mathcws, the former editor of Mineral Yearbook, "actually is apprehension that rich countries will have lo share more equitably with that world majority w h i c h has seldom known anything but economic depression." Wou'd it be such a terrible world, he asks, "if we were only 10 t i m e s as rich as almost everybody Hse instead of 20 times?" (O 1071, Los Angeles Times NEW FEAT OF CLAY A West Palm Beach. Fla.. potter has been in business for about a year "immortalizing" dearly departed lovetl ones in vessels made from the ashes of (heir cremated bones, mixed with clay. Armand Henaull. the potter, said Ihe business grew out of a pact he made with a fellow pollcr that if cither died, the survivor would use the other's ashes to make a pot, The worrl got out about the pact and since then hn has "immortalized" RO deceased relatives of people who share Hcnault's idea of a fitting way to honor the dead. All Ihis i.i very nice if such a practice suits you. nut it does seem lo be a slrange wnv to urn a living. - Birming'hom (Ala.) News PAY SCAf.KS Failles are paid less than nklnnics, according tn a New York employment agency's survey of 15,000 executives judged by height, weight, n n d paycheck. What's become of tho employe who was world his weight in gold - Norfolk (Va.) Virginian-Pilot this column. WASHINGTON WHirtl,: VlcÂ« President Gerald Kord h a promised Kepublicnn lenders ho will nut loyalty to the purly ahead of loyalty to the President, one of Ihe lenders has told us . . 'A week before tho latest Republican loss In Michigan, GOP strategists estimated secretly they would lose 30 House seals In November. The day after, they revised the estimate, tu (i2..,Sources close to the impeachment inquiry tell us Iho House should be ready to vole around July 15 whether to impeach President Nixon...Tho bill of particulars, our sources say.wiil definitely include allegations lhat the President was invovcd in the Watergate cover-up and the ITT affair. The staff is still investigating whellier to include charges or tax fraud... The political animosity bet- wet n the presidential staff and the House impeachment staff hns failed lo break up a friendship between Dick Hauser, an attorney on President Nixon's defense team, and Tim Oliphant. a lawyer preparing impeachment charges against the President . . . We r c c c n t I y reported that the slaughter of rare Australian kangaroos was encouraged by the Interior Department's failure to ban the importation of their skins. Within 10 days, the department moved lo protect the furry marsupials...A jurisdicional dispute between the Interior and Conimercc Departments, meanwhile, is holding up Ihe protection of sea turtles. They have dwindled from 50 million to a mere 10,000 in the Caribbean and may soon become extinct. A Bullisk Market For Inflation NEW YORK (ERR) -- Thoss who think that the current rate of inflation is unacceptable had better brace themselves for worse to come. The Phase IV program of federal wage and price controls will be phased out for good on April 30, and the next day will bring a 25 per cent increase in the federally mandated m i n i m u m wage. Both developments are bound to have inflationary consequences. On the subject of controls, the Nixon administration has been a house divided. Outgoing Treasury Secretary George P. Shultz recently told Hobart Rowen of The Washington Post that he "didn't agree at all" with Phase IV, and submitted his resignation shortly after it was announced. President Nixon prevailed upon Shultz to stay on the job, but now he f i n a l l y , is stepping down in favor of federal energy chief William E. Simon. The administration's position was that most controls should be allowed to expire on April 30 along with the Economic Stabilization Act that authorized them. However, it sought extension of the Cost of Living Council (CLC) as a monitoring agency and continuation of controls over the construction and health-care industries. But the Senate and House banking committees refused to go along. JOHN T. DUNLOP, the CLC chairman, believes Congress made a mistake. "In my judgment." he lold U.S. News World Report, "controls have had favorable effects on wages and prices for health care and construction. It is only in those two areas -- aside from petroleum, which is covered by another law -- that the administration has sought authority from Congress to continue controls. I t h i n k it is demonstrable that in those two areas (he absence of controls will lead lo appreciably more serous inflation t h a n we've had." The forthcoming increase in Ihe price of steel products will h a v e wide ramifications throughout most American i n d u s I r i e s , construction and health care included. The United Stcelworkcrs of America and the major steel companies agreed April 12 on a new three- year contract that will raise total labor costs by approximately $3.25 an hour per worker. ' ' M o s t companies won't divulge Iheir post-April 30 price plans, ' The Wall Street Journal reported. "But even before the labor pact was reached..., Allegheny Lucllum Industries Inc 's stcelmaking unil had already disclosed that il expects cost increases totaling 18 per cent in the six months ending July 31. Thus, company officials say it would t a k e a 25 per cent lo 28 per cent price increase to get Ihe company's rclurn on sales back lo fi per ccnl." THE INFLATIONARY cffccl of Ihe increased minimum wage is more d i f f i c u l t lo guage. but it no doubt will he substantial. The current rate of Sl.fiO nn hour will go to $2 on May 1. to $2.10 on Jan. 1. 1075 and to $2.30 on Jan. I , l!)7fi' In addition, between 7 and (i million Americans never before covered by the m i n i m u m wage nw will now he proleclcd. Tin- law also will extend provisions' requiring payment nf overtime In excess of 40 hours a week lo B million workers nnt now covered -- Ihose employed In hotels. r c s l H U r n u l s , n u r s i n g homes, howling alleys, and so on. These establishments, like the sleol industry, will Iry to recoup t h e i r increased Inhor cosls through hlglvir prices. IWorc long, ihn new m i n i m u m wage will have n puicruising power not much belter -- and mnybo wnrse -- t h a n the present one.