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.