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Tuesday, January 19, 1971
Ann Arbor, Michigan
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news briefs
By The Associated Press
SEN. GEORGE McCOVERN formally announced yesterday
that he will be a candidate for the Democratic presidential
Inomination.
McGovern, the first candidate to officially enter the presidential
race, said at a news conference, "The most painful new phrase in
the American political vocabulary is 'credibility gap' - the gap
between rhetoric and reality. Put bluntly, it means that people no
longer believe what their leaders tell them."
THE U.S. GOVERNMENT placed a 12-month ban on aircraft
sales and ship repair credits for Ecuador yesterday.
The action was in retaliation for this country's seizure of Ameri-
can fishing vessels on what the United States considers to be the high
seas.
Secretary of State William Rogers also threatened action against
$25.5 million of economic assistance for the South American country,
warning the ambassador that it is under review.
In addition, a State Department spokesman said, Rogers declared
"other possible measures are being reviewed urgently and further
action by this government" cannot be ruled out.
THE PENTAGON confirmed yesterday that U.S. air power is
playing a full-scale role in the Cambodian fighting.
American planes are flying South Vietnamese troops and supplies
into battle and protecting them with helicopter gunships.
A pentagon spokesman broadened considerably grounds for using
.American aircraft in Cambodia saying that the planes have free reign
to operate anywhere in Cambodia as long as no U.S. ground-forces or
advisors are involved, and their actions are beneficial to U.S. troops in
South Vietnam.
* *
POLISH WORKERS walked off their jobs yesterday, de-
manding further political and economic changes from their
nation's new leaders.
The workers demanded the removal of a Communist party
official who ordered the shooting of the demonstrators during the
riot last month and who called workers "hooligans" in a television
broadcast.
The workers returned to their jobs yesterday after being
promised that management directors and worker's delegates could
go to Warsaw to present the demands.
* * *
THE TRIAL of Lt. William Calley Jr. recessed indefinitely yes-
terday to allow a psychiatric examination of the defendant.
The action was taken after a defense psychiatrist raised the issue
of Calley's sanity during the alleged My Lai massacre.
Without the jury present, the psychiatrist testified that Calley
"acted as a robot, a slave to the orders of his company commanderI
during the My Lai sweep."
ECOLOGICAL DAMAC
By The Associatedyress
Bethlehem Steel Corp. bowed to White House and com-
petitive pressure yesterday and halved its price increases for
'some major steel products.
Bethlehem said the cut from its announced increase of
12.5 per cent to a 6.8 per cent increase on prices of steel used
in shipbuilding and construction was done in order to be com-
petitive with other producers.
President Nixon called Bethlehem's increases enormous
last week, and raised the threat of permitting greater steel
I
Page Three
Be thlehem cuts
rates, yields to
U.S. pressure.
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-Associated Press
PRESIDENT NIXON meets with construction leaders at the White
House yesterday to discuss last week's steel price increases and
other inflationary pressures. With him is Labor Secretary
James D. Hodgson (left).
drops in 1970;
discount rate slashed
WASHINGTON (R) -The Commerce Department announced yes-
terday that the nation's Gross National Product (GNP) for 1970
dropped below 1969's GNP, the first annual decrease since 1958. The
shrinkage was accompanied by inflation, which made its sharpest
advance since 1951.
Reacting to the decrease, the Federal Reserve Board yesterday
trimmed its discount rate for the fourth time since November.
The government said that the "real" GNP-the output of goods
and services-fell 3.3 per cent during the final three months of the
year. White House spokesmen said the declining fourth-quarter GNP
figures reflected the General Motors strike.
The Federal Reserve Board shaved the interest rate charged
member banks of the Federal Reserve System from five and one-
quarter to five per cent.
The drop in real output and the
r + price rise reflected a slack in the
E? economy and strong inflationary
pressures that Nixon is trying to
"f0. correct.
C isio n Sen. William Proxmire (D-
Wis.), who will be chairman of the
Senate-House Economic Commit-
and advised the Arizona Stand- tee in the new Congress, said the
ard there was another vessel GNP decline represents "a tragic
nearby, failure of the Nixon game plan."
A spokesman said the Oregon "This is bad enough in itself,"
Standard apparently was n o t he added, "but it is made far
warned. worse by the sharp jump in unem-
The Oregon Standard had ployment. The rate of unemploy-
sailed from Richmond with ment is now six per cent, the high-
about 4.5 million gallons, or est level in nine years."
110,000 barrels, of bunker oil "The planned slowdown in the
economy, intended to slow the ac-
The Arizona Standard w a s celerating rise in prices", he con-
inbound from Esteros Bay, tinued "has been singularly un-
Calif., with 115,000 barrels of successful',
crude oil.
The previous largest oil spill In reducing the discount rate
in the bay region was about the Federal Reserve Board said it
12,000 gallons, or 300 barrels, acted only to reflect recent re-
which spread 12 miles from a ductions in short-term interests.
Norwegian ore carrier in a Generally, it was a clear indica-
pumping accident near Pitts- tion the board has shifted to the
burgh, Calif., more than 40 easier money policies advocated
miles inland from the Golden by the Nixon administration.
Gate, on Jan. 8. President Nixon has set an ex-
The Coast Guard reported pansionist economic policy for
that spill was cleaned up in 1971 to get the economy moving
five days with no apparent ecol- and tackle a high unemployment
ogical damage, rate.
imports as a means of push-
ing down domestic prices.
The White House expressed
some gratification o v e r Bethle-
hem's pullback to the U.S. Steel
range of increases.
"We are pleased Bethlehem
Steel does not intend to go ahead
with the increase they had ini-
tially announced," said presiden-
tial press secretary Ronald Zieg-
ler.
But, he said, the administra-
tion wasn't happy over the 6.8 per
cent boost announced by U.S.
Steel.
Nixon also called on labor and
management leaders of the na-
tion's construction industry yes-
terday to take "early action to at-
tack the wage and price spiral"
that caused sharp accelerating
wage trends in that industry.
At a White House meeting, re-
ported on later by Secretary of
Labor James Hodgson, Nixon de-
scribed the problem as "a crisis
situation" and asked the construc-
tion industry leaders to report
their recommendations to him
within 30 days.
Price boosts were expected in
the steel industry but their size--
the largest for major items in a
decade -- was surprising. Stewart
Cort, chairman of Bethlehem, and
Edward G o t t, chairman of U.S.
Steel, had said recently that
higher prices were necessary be-
cause of rising operating costs and
slumping profits.
Meanwhile, the Cabinet Com-
mittee on Economic Policy, chair-
ed by Vice President Spiro Agnew
launched its first meeting to pro-
vide Nixon with a study of the
steel price situation and ways to
stabilize that industry.
The hassle over Bethlehem's
original boost was another in a
series of confrontations between
the government and the steel in-
dustry over prices.
In 1962, President Kennedy
forcedamajor steelmakers to re-
scind a general $6-a-ton increase
which had been initiated by U S.
Steel. In 1968, President Johnson
assailed a price boost by Bethle-
hem. On that occasion U.S. Steel
halved Bethlehem's increase, and
Bethlehem fell back.
The Michigan Daily, edited and man-
aged by students at the University of
Michigan. News phone : 764-0552. Second
Class postage paid at Ann Arbor, Mich-
igan, 420 Maynard St., Ann Arbor,
Michigan 48104. Published daily Tues-
day through Sunday' morning Univer-
sity year. Subscription rates: $10 by
carrier, $10 by mail.
Summer Session published Tuesday
through Saturday morning. Subscrip-
tion rates: $5 by carrier, $5 by mail.
N.Y. hit by
Hew labor
stoppages
NEW YORK (P) -- The prob-
lems confronting New Yorkers es-
calated yesterday when housing
and transit patrolmen joined the
five-day-old walkout of 20,000 po-
licemen and, at the same time, the
city's supply of fruit and vege-
tables dwindled because of a
Teamsters strike.
Telephone systems remained un-
repaired for a second week, with
almost 5,000 craftsmen on strike
against the Bell System in t h e
city and around New York state.
Moreover, in midafternoon the
giant Consolidated Edison com-
pany was forced to the unusual
midwinter necessity of cutting
back electric power by 5 per cent
because of a statewide power
shortage caused by cold weather.
Edward Kiernan, president of
the Patrolmen's Benevolent Asso-
ciation, ordered patrolmen to re-
turn to work, but the command
was having little effect on the re-
bellious patrolmen. The patrol-
men refused to discuss a new con-
tract until they receive $2,700 in
retroactive pay.
A skeleton force of uniformed
officers, detectives and probation-
ary patrolmen, working 12-hour
shifts without days off, have pro-
vided emergency services since
Thursday, when a state court rul-
ed the pay dispute would have to
be settled by a jury trial.
The latest back-to-work plea
was accompanied by a promise
that the trial would start imme-
diately.
About a t h i r d of the city's
Transit a n d Housing Authority
patrolmen, who guard the sub-
ways and housing projects, joined
the police job action.
The strike of 1,500 Teamster
drivers left the Hunt's Point Mar-
ket, largest in the city, a "ghost
town." The drivers, who m o v e
fresh and frozen produce into the
city, began the strike Sunday af-
ter being offered a $35-a-week pay
raise - $15 less than they sought.
Union leaders said the city had
only a day's normal supply Sun-
day and severe shortages would
develop by the end of the week.
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OR .CALL "764-0558
10 a.m.-4 p.m.
Oil1spilled
SAN FRANCISCO WP - Two T
tankers collided under the Gold- mi
en Gate Bridge in dense fog gon
early yesterday and spilled an cho
estimated 500,000 to 1.5 million the
gallons of bunker oil in San T
Francisco Bay. we:
The Coast Guard would not Sta
guess as to eventual environ- T
mental or other damage but in- slig
dicated guarded optimism. line
Standard Oil Co. of Califor- tan
nia, owners of both vessels, said edt
the inbound Arizona Standard be
rammed into the outbound Ore- -12,0
gon Standard at about 1:45 a.m. oft
A slick spread slowly Toward B
Alcatraz Island, 11 /2m i 1 e s shi
from the San Francisco water- T
front, and eastward towards un- ha
inhabited Angel Island. scre
The ships kept together to
rimize leakage until the Ore-
n Standard was able to an-
or in the bay. The Arizona
en proceeded to the pier.
The company reported there
ire no injuries and the Arizona
andard appeared undamaged.
The Oregon Standard h a d
ght damage below the water-
e in addition to two ripped
aks, the company said. It add-
that the two tanks known to
damaged contained about
000 barrels, or 500,000 gallons
bunker oil.
Bunker oil is used as fuel for
ps.
The Coast Guard reported it
d both ships on its radar
een just before the collision
}
n Calif.
fill
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