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September 10, 1996 - Image 14

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The Michigan Daily, 1996-09-10

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14 - The Michigan Daily - Tuesday, September 10, 1996

- JU I I-A ltv 11ir%,

IHUIIMJI vvj' W aJBLLF
Hurricane Fran leaves significant crop damage in N.C..

U Tobacco, corn were
ready for harvest
when Fran hit
'F
FAYETTEVILLE, N.C. (AP) - Bill
H3ubbard looked at the 100-acre swath
Zf flattened, soggy cornstalks, his
X50,000 loss a fraction of the crop dam-
Zge caused by Hurricane Fran as it cut
fike a scythe across North Carolina.
"This just makes you sick, said
Hubbard, whose field should have
:ielded 10,000 bushels. "When you
farm, you always fight Mother Nature,
and she's got the upper hand this year."
in July, Hurricane Bertha inflicted
$179 million in damage to North
Carolina's crops, and state Agriculture
Commissioner Jim Graham said
Hurricane Fran - which mostly flat-
tened rather than soaked - could top
that.
, "What Bertha left, Fran got," said

Graham, who joined U.S. Agriculture
Secretary Dan Glickman on a flyover of
the state's damaged corn and cotton
fields. "And we hope Hortense takes
the long way around."
There were no immediate overall
estimates of Fran's crop damage in
North Carolina. The state, the nation's
No. I tobacco producer, had already
harvested most of its tobacco crop, but
some leaves rotted in the barn when
blackouts cut power to curing fans.
North Carolina's comparatively small
corn crop, mostly hog feed, was ready
for harvest just when Fran hit, while
most of the state's $800 million cotton
crop was in the middle of its growing
season.
With some of their cotton knocked to
the ground, growers mostly feared
infestation by the boll weevil.
Flooding persisted across Fran's
wake, and Federal Emergency
Management Agency teams delivered

portable generators to provide emer-
gency power to isolated residents and to
any hospitals and sewage plants that
might have exhausted their backup
power supplies.
Doug Culbreth of the state's Energy
Division said 477,000 customers
remained without power yesterday
afternoon. State troopers directed traf-
fic at blacked-out intersections and
helped utility crews.
Gov. Jim Hunt asked that 18 of the 34
counties already declared disaster areas
be given additional federal help. He
also asked state cleanup crews to pick
up the pace.
"This is the worst disaster that we've
had in this century,' he said. "Everybody
has been hurt by it."
Fran rolled through late last week,
walloping the Carolina coast before
turning north, slapping around the
inland and breaking up into heavy rains.
At least 28 people died, 17 in North

Carolina, and a 17-year-old boy
remained missing two days after going
swimming in a swollen Raleigh creek.
Other states hit by Fran - mostly
with flooding - also worked to recover:
In Virginia, rivers began receding
after driving hundreds of people from
homes and closing scores of roads and
businesses. Flooding along the
Potomac River closed commuter routes
outside Washington. In the mountains,
National Guard all-terrain vehicles
were used to reach flooded hollows
where people remained without elec-
tricity and drinking water.
In West Virginia, hundreds
remained without electricity or water,
mostly in rural eastern regions along
branches of the Potomac and the river
itself.
0 In Washington, the Potomac began
to recede, but not before flooding
formed traffic bottlenecks around the
National Mall.

AP PHOTO
Scottie Teach of Williamsport, Md., motors his boat past flooded homes along the
Potomac River on Sunday. The river rose above Its banks, evacuating homeowners.:

1~

Fed interest rate hike considered likely

- . - a --.,.

The Michigan League Board of Governors is
accepting applications from students for
two at-large seats on the Board.
Serving on the Board offers:
rvBoard experience working with students, faculty, staff, & alumni
" The opportunity to help set future direction for the League
" Serve as liaison with other students to the League
" Gain valuable leadership experience
Applications are available at the following locations:
* Michigan League Manager's Office
" Campus Information Center at the Union
- North Campus Information Center at the Commons
- or E-mail YECKER@UMICH.EDU
Applications are due on September 13 in
the Michigan League Manager's Office.

WASHINGTON (AP) - The likeli-
hood that the Federal Reserve will
increase interest rates has jumped dra-
matically following a steep decline in
the unemployment rate, in the view of
many top economists.
That position was bolstered by com-
ments from Fed Governor Laurence
Meyer, who pointed to Friday's unem-
ployment report and various other sta-
tistics that showed the economy has
developed "considerable momentum."
"We are in a circumstance in which a
prudent central bank must exercise
heightened surveillance of the inflation-
ary risks and stand ready to respond if
necessary;' Meyer told the National
Association of Business Economists in
Boston on Sunday night.
Meanwhile, a prominent group of
economists known as the Shadow Open
Market Committee that closely moni-
tors Fed policy said yesterday that the
Fed should move to tighten credit con-
ditions. The members said the action
was likely to occur at the central bank's
next meeting in two weeks.
"We believe it is appropriate now to
take a slight pre-emptive tightening
action," said Allan Meltzer, head of the
group and a professor at Carnegie
Mellon University.
Other private economists said they
believed central bank policymakers

themselves were preparing financial
markets for a rate increase, the first
such move since February 1995.
In addition to Meyer's remarks, they
said a number of Fed governors and
regional bank presidents who serve on
the 12-member Federal Open Market
Committee, the group that sets interest
rate policy, have spoken about the need
for increased vigilance given the econo-
my's surprising
strength in
recent months. ItIn
Fed Chair
A I a appropria
delivering the take as5
Fed's midyear
economic emptivet
report to
Congress in action. !!
July, pledged
that the central
bank would Carneg
move quickly
to increase
interest rates "should the weight of
incoming evidence persuasively sug-
gest an oncoming intensification of
inflation pressures."
While Fed officials passed up oppor-
tunities to raise interest rates at their
July and August meetings, believing the
economy was beginning to slow, a

m
sie

string of reports since then have called
that view into question. Factory orders
and housing sales took unexpectedly
big jumps in recent reports and then
Friday's report showed unemployment
dropping in August to its lowest level in
seven years, 5.1 percent, down from 5.4
percent in July.
"I think the unemployment report is

I

the straw that breaks the camel's back;'
said David Jones,
an economist at
Aubrey G.
Lanston & Co. in
e now to New York. "We
have reached the
lit pre- point where we
are likely to see
'hteni0 ng accelerating wage
and price pres-
sures and that is
what Meyer was
Allan Meltzer hitting at in his
Mellon Prof. remarks."
The Fed would
prefer to keep
policy unchanged in the closing months
of a presidential campaign to avoid
charges that it is trying to influence the
election, but analysts said a rate move
now would not be unprecedented.
The Fed cut rates in September
1992, a move that the Bush adminis-
tration complained came too late to

help their candidate win a second
term. And it raised rates in August
1988, when Bush was running against
Michael Dukakis.
"The history of election years shows
clearly that the Fed will move if they
think there is a need to do so," said Lyle
Gramley, a former Fed governor and
now economic consultant for the
Mortgage Bankers Association.
Many analysts said they believed t
Fed will feel the need for only two IF
three modest quarter-point tightening
moves that would drive the federal
funds rate, the interest that banks
charge each other on overnight loans,
from 5.25 percent currently to 5.75 per-
cent or 6 percent.
That would be far different that the
last string of rate hikes from February
1994 to February 1995 when the funds
rate was doubled, up from 3 percent ts
6 percent.
Because of this more moderate out-
look for rate hikes, economists contin-
ued to forecast economic growth and no
recession in the coming two years.
The National Association of
Business Economists in their latest
quarterly forecast predicted yesterday
that the gross domestic product will rise
by 2.3 percent this year and by the same
rate in 1997, up from growth of 2 per
cent in 1995.

Climate of reason in Chechnya

BRAND NEW LOCATION

Los Angeles Times
GROZNY, Russia - One stroll
through the destruction of what were
once majestic houses, one glimpse of
the sorrowful eyes of the widowed and
the wounded, one thought about the bil-
lions squandered in wrecking and
killing, and there would, seem no hope
here for peace and reconciliation.
Yet in the cluttered courtyard where
yesterday's combatants are training to
be today's police officers, a surreal
atmosphere of camaraderie has swiftly
replaced wartime contempt between
black-hooded Chechen rebels and a
fresh contingent of Russian troops.
"We are celebrating peace together,"

Grand

in, i U

of the
WORLD'S thREST
University of Michigan
CLOTHING ST0ORE (14 ,000 sq. feet)
PLUS!

Seed of Abraham
Congregation
Zera Avraham
A Messianic Jewish
Synagogue
Believing that Yeshua is
The Promised Messiah
Meeting at University Reformed Church

proclaims rebel fighter Aslanbek
Iliasov, congenially shouldering his
Kalashnikov machine gun before hook-
ing the nearest Russian soldier into a
comradely embrace. "Isn't that so,
Volodya?"
The lanky, blond Russian smiles
shyly and nods.
While the spirit of cooperation
sparked by an Aug. 31 peace accord
seems incongruous after more than 20
months of horror in this secessionist
republic, the Chechen people's exhaus-
tion and disgust with the bloodshed
have induced an unexpected climate of.
reason.
Spent of anger and hate over their
staggering losses in lives and property,
people in Chechnya say they are now
simply too tired to nurture hostility or a
desire for revenge.
Just a month ago, Khasmad
Magomirov was shot to death by
Russian soldiers at a roadblock as he
tried to lead his wife and younger chil-
dren to safety as the last battle against
federal troops was raging in Grozny.
"They killed my father, right before
the eyes of his wife and children, and I
cannot forgive them for that, at least not
now," says 22-year-old Gulzhana
Musayev, the oldest of Magomirov's
eight children, who now helps support
the family by selling medicines from a
market stand. "But if we want peace to
last, I cannot dwell on this. I need to be
tolerant and think of all the others who
will be spared if the war has really
ended"
The thirst for calm and order is inten-
sified by the approach of winter in this
capital city, where 80 percent of the
housing has been destroyed and those
still scratching out an existence do so
without income, electricity or running
water.
In the first weeks of the war
unleashed by Russian President Boris
N. Yeltsin in December 1994, Grozny
was transformed from a leafy provin-
cial city into a nightmarish wasteland of
charred rubble, splintered trees and
fleeing hordes of agonized people.
Estimates of the dead run as high as

pleads with a patrolling foursome of
blue-bereted Russian and Chechen
forces, pressing on them a photocopi
picture and the last known whereabout.
of her missing brother.
Outside the five regional command
posts now jointly controlled by
Chechens and Russians, hundreds of
people loiter around the closed gates
throughout the day in hopes of learning
what steps are in store to solidify the
peace pact and make this capital habit-
able again.
The slow, painful process of recover-
ing trust in the future and in each oth
has been helped by the dogged involve-
ment of Russian security chief
Alexander I. Lebed, who has made half
a dozen visits to Chechnya over the past
month to first stop the fighting and then
patch together the peace agreement.
Lebed's bold concession that the bat-
tered Russian army could no longer
afford the "luxury" of waging war
effectively threw in the towel for tl
wrung-out federal forces, signaling &
end to the conflict for many of the bat,
tie-weary Chechen people.
"I think Lebed is great. God willing,
he should become president of Russia,"
says Musayev, who holds Yeltsin
responsible for the conflict that killed
her father.
The peace brokered by Lebed and
Chechen negotiator Asian
Maskhadov, the chief of staff of
Chechen rebel forces, got around tl
most daunting obstacle of Chechnya s
declared independence by putting off
for as long as five years any resolu-
tion of this breakaway region's rela-
tionship with Russia.
By then, federal authorities hope,
Chechens caught up in the charismatic
independence quest of the late sepa-
ratist leader Gen. Dzhokar M. Dudayev
will see the logic in remaining at least
nominally tied to Russia, whose terri
ry surrounds them.
In the meantime, Grozny is to be
patrolled jointly by Russian and
Chechen forces until relations are sta-
ble and Moscow's troops can with-
draw.

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