Vol. LXXXVIII, No. 49-S
u.C Saturday, July 22, 1978
,m iC -i 9 n Sixteen Pages
Ann Arbor, Michigan Ten Cents
e gGNP tops
$2 trillion;
inflation 10.1%
WASHINGTON (AP) - The nation's
economy grew by the largest amount in
more than two years during the spring
quarter as it reached the $2 trillion
mark, but inflation climbed to an an-
nual rate of 10 per cent, the government
said yesterday.
Although it was the first time in
history that the economy reached $2
trillion, government officials said the
7.4 per cent growth rate in the second
quarter was less than expected.
BECAUSE of this, said Secretary of
Commerce Juanita Kreps, the Carter
administration may be unable to
achieve its goal of 4.1 per cent overall
Daily Photo by JOHN KNOX'
Keep your eye on the ball
These two Art Fairgoers are keeping their eyes on the juggler as he nimbly
tosses three balls back and forth between two hands.
MILITARY CHIEFS ASSUME POWER:
Bolivian president steps down
economic growth for 1978. She said the
target now "looks too optimistic."
The Commerce Department said in-
flation during the second quarter was at
an annual rate of 10.1 per cent, the wor-
st in more than three years since the
nation recorded a 10.7 per cent rate in
the first quarter of 1975.
The latest inflation figure was in line
with recent consumer price statistics
that have shown prices rising at a 10per
cent annual rate during the first five
months of this year. However, the ad-
ministration expects inflation to taper
off and end the year at about seven per
cent.
AT THE White House, presidential
spokesman Jody Powell said the in-
flation figures were "not encouraging."
Powell said President Carter has or-
dered a very tight federal budget for
fiscal 1980. The press secretary also
said the budget, now in the preliminary
stages of preparation, possibly "will
leave very little if any money for new
initiatives."
Powell said Carter has ordered all
federal agencies, including the Pen-
tagon, to find ways to trim their projec-
ted spending levels for fiscal 1980,
which begins on Oct. 1, 1979.
BUT HE WOULD not confirm reports
that Carter is seeking a $15 billion
reduction in projected 1980 spending
levels. "I don't think it's worthwhile for
us to get into specific figures," Powell
said at the regular White House
briefing.
In discussing the economic growth
report at a news conference, Kreps said
the outlook for the remainder of the
year is for expansion in the range of 3.5
per cent to four per cent.
The economy had declined at an 0.1
per cent annual rate in the first three
months of the year, largely because of
the imoact of an unusually severe win-
See GNP, Page 14
LA PAZ, Bolivia (AP) - President
Hugo Banzer resigned last night and
reliable sources said the presidency
would be turned over to air force Gen.
Juan Pereda Asbun, who led a rebellion
after his election as president was an-
nulled by a court.
Banzer said in a statement he had
stepped down and transferred power to
the senior commanders of the three
branches of the armed forces.
THE GENERAL, who came to power
in a bloody coup seven years ago, said
the military chiefs, "will adopt the
decisions most convenient for this
hour."
The sources said the military would
transfer power to Pereda, Banzer's
handpicked candidate in the July 19
presidential election, called to put
Bolivia back on the road to democracy
after 12 years of military rule. _
They said Pereda, the 47-year-old in-
terior minister in the Banzer gover-
nment, flew to La Paz shortly after the
resignation. He came from Santa Cruz,
seat of the rebellion 620 miles east of
here.
BANZER, HIS voice quavering with
emotion, read his resignation
statement over national television from
the presidential palace. The building
was ringed by troops - loyal to the,
president.
"The hour has arrived to leave com-
mand. I believe I have complied with
my duty," Banzer said.
He personally swore in the military
chiefs, asking them to uphold the con-
stitution and laws of the republic.
'You are in possession," he told
them, then hugged each of them.
The resignation appeared to end the
rebellion, which began before dawn
yesterday.
THE GOVERNMENT said the
rebellion was confined to Santa Cruz
but rebel broadcasts claimed the in-
surgents controlled all of eastern
Bolivia. Provincial radio stations had
indicated the uprising was moving
closer to this capital city, in Bolivia's
western mountains.
The only indication of actual fighting
was one radio report saying an army of-
ficer had been killed in a tin-mining
area.
IBanzer
Loeal postal workers
By MICHAEL ARKUSH intense bargaining. Copies of the pact
Local members of the National must now be submitted to all postal
Association of Letter Carriers (NALC) union members for ratification.
are only beginning to analyze the new "We're learning more about the pact
tentative postal contract and have but we need to collect more information
"many questions" before they will before we can really analyze it,"
ratify the pact, an NALC spokesman Schaefer said.
said yesterday. Schaefer indicated members ex-
Jim Schaefer, vice-president of the pressed "confusion" about- the
local NALC branchsaid questions con- proposed cost of living benefits and sick
cerning cost-of-living benefits, sick leave provisions of the new contract.
leave and wage increases of the new
contract were raised at yesterday's HE SAID ANOTHER meeting will be
meeting of union members. held late next week to further evaluate
the pact's implications. He said he ex-.
THF NEW contract was reached pects the ambiguous portions of the
early yesterday morning after hours of contract to be settled within a few
da
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analyze new pact
ays. postal officials in Washington averted a
Schaefer said union members were strike, it may be several weeks before
atisfied with the no-layoff clause in the the new contract is officially approved.
ew agreement. Postal officials Besides the 450 local postal employees,
ationwide had leveled severe pressure over 555,000 workers will receive
n management to retain the clause, ratification ballots in the coming
ocal postal workers were worried last weeks. Schaefer said it would probably
eek that management was planning to be at least six weeks before the pact
y off nearly 100,000 employees, was ratified.
But Schaefer said the proposed wage A source close to the local NALC
crease was less than the employees chapter revealed that heavy opposition
xpected. The three-year contract to the pact has already been recorded in
ould net the workers a 6.5 per cent an- several large metropolitan centers. The
ual increase, slightly less than their source said postal workers in the big
lemand of a sev n per cent rise, cities have more expensive cost-of-
ALTHOUGH THE last-ditch effort by See POSTAL, Page12