THE MICHIGAN DAILY
Thursday, February 8, 1973
Pooe Two
.
I
Us.
By the UPI and Reuters
BONN - Speculators drove the dol
down to its crisis point yesterdaya
the German Central Bank defended
with emergency purchases that will sw
the estimated $2.5 billion the bank
ready holds.
The West German Bundesbank p
chased a record $1.5 billion in less tf
three hours yesterday. And as Bonn w
so went Europe. Dollar prices fell
Paris, Brussels, Amsterdam and Londo
all key money markets-before a mod
rise before the markets closed.
. The rush, financial experts said,
parently is tied to the record U. S. bud
and trade deficits, but no one coulde
any specific reason for the sudden a
lanche of dollars that poured into
tional banks.
The reason European banks bought
dollar was to maintain its level agai
their own currencies, which were ret
ued or devalued in a 1971 agreem
meant to defeat speculators.
Under this agreement, Germany is cc
mitted to make such purchases when
dollar's value falls to the 3.15 mark r
on the free market. So is Japan.
Bonn was the key to the action,
financial sources said other Europ
dollar q
banks purchased $400 million while in
lar Tokyo, dollar dealings reached $104 mil-
and lion by noon yesterday.
it The pandemonium in Europe did not
hell end until Franfurt financial sources said
al- the Bundesbank, acting on direct govern-
ment orders, was supporting the dollar.
?ur- That quieted the market somewhat.
han During the morning, sources on the
ent, Frankfurt Bourse said, the Centrat Bank
n ducked in and out of the market in a
est push-pull contest with speculators. The
profit-seeking money men would shove
the dollar's value down to 3.15 marks
ap- with heavy sales and the bank would
giet
cite force it back up to about 3.1530 marks
iva- with purchases.
na- The closing price was 3.1515 marks -
about 31.7 cents. This fall-and-rise pat-
the tern was repeated elsewhere in Europe
inst as word of the Bonn decision moved
val- around the continent.
lent The Bonn program, as announced by
the Bundesbank last night specifies that
om- commercial banks may in future use only
the 60 per cent of the credit open to them
ate at the central bank.
The extra money which the commer-
but cial banks now have available to lend out
ean as a result of selling unwanted dollars
uivers
to the central bank will thus be effective-
ly frozen.
This cuts back commercial banks' ac-
cess to central bank credit lines, and
insures that private customers will be
able to borrow less from their banks.
The goal is to reduce record inflationary
levels.
For the moment, Prime Minister Ka-
kuei Tanaka flatly ruled out another re-
valuation of the yen, Japan's national
currency.
Instead, his government was working
out a series of measures to maintain the
present parity of the yen.
Influential Chairman of the House Ways
and Means Committee, Wilbur Mills, said
Tuesday night that further attacks on
the dollar could lead to a very serious
situation for the United States and pos-
sibly result in another dollar devaluation.
Mills suggested that if there was con-
tinued widespread selling of the dollar,
another meeting of the group of 10 lead-
ing industrial nations might be needed
to revamp the world's currencies. The
last such meeting, in December, 1971, led
to a devaluation of the dollar against
other currencies by an average of 11
percent.
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how to read and write.
We teach them
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us-
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The American Red Cross.
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a
i
t
Nichols and Recorders Court
square off over drug dispute
AP Photo
U.S. Ambassador to Malaysia J. W. Lyndman (left) gives Vice
President Spiro Agnew the 50 cent tour of Kuala Lumpur yesterday.
The vice president has been cruising around Southeast Asia for the
last few days, assuring the nations there of continued U.S. support.
SENATOR CHARGES:
Fuel supplies withheld
so price would increase
DETROIT (UPI) - Police Com- jury probe of
missioner John Nichols took the I drugs. Nichols]
gloves off yesterday and said he is ports such an
involved in a "no-holds-barred as the court al
fight" with criminal court judges In earlieri
who persist in pecking away at took issue with
his Police Department's record. Crockett: "Run
Nichols was responding primar- complicity with
ily to recent insinuations by personnel in ille
some Recorder's Criminal Court rife in the comn
judges that police have failed to Nichols respo
make progress in their attempts ask 5,600 men
to stem drug traffic in the city, streets and alle
prosecuting minor offenders while when by inneu
big-time operators remain on the cused of beingt
loose. He defendedt
Judge George Crockett, the aying, "I thin
rjudges' main spokesman, went as police departme
'far as to call for a one-man grand they have devote
crime involving
has said he sup-
action - as long
so is investigated.
remarks, Nichols
this statement by
-mors of criminal
law enforcement
gal drug traffic are
munity."
nded, "How can I
to go into the
eys to fight crime
ndo they are ac-
thieves and liars?"
the department by
k the recordof the
Lnt shows whether
ted their full atten-
g problem.
en I took on the
be in a no-holds-
he said. "No one
s. I'm in the posi-
kinese that bit the
bulldog on the ankle. I'm doing
this because I can't afford to have
my department villified."
N i c h o 1 s accused Recorders'
Court judges of laxity - particu-
larly in murder cases - and said
they often have been responsible
for unleashing "potential killers"
on society.
LONDON (3) - The village of
Bradley, population 207, wants the
British government to protect a
hole in a wall by banning heavy
trucks from a country lane that
goes through the middle of a build-
ing which once was a gatehouse
for a mansion.
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BACH CLUB
FEATURING
TONY CECERE,
French Horn
FRANK NEZWAZKY
Piano
MOZART, BEETHOVEN,
POULENC, DUKAS
REFRESHMENTS AFTERWARDS
Thurs., Feb. 8,8 p.m.
E. Quad, Greene Lounge
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WASHINGTON (UPI) - A New ment to force the government to1
England senator charged today ' grant price increases," McIntyre aThe MichiganDaily, edited and man-
that major oil companies deliber- said, aged by students at the University of
ately allowed home heating oild Michigan. News phone: 764-0562. Second
"There were supplies of home class postage paid at Ann Arbor, Mich-
shortages this winter to force the heating oil but this country's oil gan. 420 Maynard Street, Ann Arbor,
anto . Michigan 48104. Published daily Tues-1
government granting price policy did not make them avail- day through Sunday morning Univer-
increases, able to the domestic consumer.' sity year. Subscription rates: $10 by
Sen. Thomas McIntyre, (D-N.H.) At carrier (campus area): $11 local mail
tol aCot o Lvig ounilher- As a last-ditch measure, McIn- (in Mich. or Ohio); $13 non-local mail
told a Cost of Living Council hear- eh(other states and foreign).
ing on fuel price increases that a tyre also said the Office of Summer Session published Tuesday
combination of forces - including Emergency Preparedness "is now through Saturday morning. Subscrip-
lack of true competition and an in a process of developing a na-i tion rates: $5.50 by carrier (campus
unla i of otqoa ytm area) ; $6.50 local mail (in Mich. orj
unrealistic import quota system-- tional rationing program for pe- Ohio); $7.50 non-local mail (other
was responsible for the recent ,, astates and foreign).
crippling Middle West and East troleum products.
Coast fuel oil shortages.
tion to the drub
"I knew wh
courts I would
barred fight,"
beats the court
tion of the Pe
"What we have just witnessed
within the past few months is a
tragic example of the complete
failure of our federal oil policy,"
McIntyre said in testimony pre-.
pared for delivery to the hearing.
". .The actions taken by the
major oil companies in this coun-
try, in my opinion, indicate that
they totally failed to assume their
responsibility and simply allowed
shortages to develop as an induce-
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