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Show T MEW OUT? 127th YEAR 62 PAGES NO. 303 SALT LAKE CITY, UTAH 15 CENTS THURSDAY, Utah territory teas hnoivn as the 'State of Deseret Founded JUNE 2, 1977 METRO White House fumes at FRB tightening - WASHINGTON lAPi Suddenly everything isnt so cozy between the Carter administration and Chairman Arthur Burns of the Federal Reserve Board The President didn't seem to mind when Burns almost the $50 tax rebate plan. Carter said the economy was getting along fine without it. But the administration is making it clear it doesn't like recent actions and the board to increase short-terinterest rates. Bert Lance, Carter's budget director, has been highly critical of banks for raising their prime interest rate twice in recent weeks to 6 percent. He warns their actions could impede economic growth and encourage inflation. While Lance denied he was seeking a confrontation with Burns, sources left little doubt Wednesday that Burns is the target of the criticism because he and the board took the actions that caused banks to raise their interest rates. "They arent going to take Burns head-on- , one White House source said. They are talking to bankers, but they hope other people will listen, with the Arthur Burns may lose his job next January. Fuel pricing powers WASHINGTON The (AP) House began debating creation of a new energy department today and immediately became embroiled in a dispute over how much authority the departments Cabinet secretary should have over energy prices. Although passage of the bill seems assured, a number of major modifications were proposed. The Senate has already-passesimilar legislation, and it reduced the pricing power which the administration had sought for the secretary of energy. President Carter requested creation of the new cabinet agenct, which would pull together scattered energy programs, and has sid he will nominate energy- adviser James R. Schlesinger to head it and carry out a national energy policy. But Rep. John Moss, claimed that the legislation would give Solileainger too much power. He offered an amendment that would deny the energy secretary the right to establish and regulate natural gas prices. Under his approach, an independent commission within the new department would handle this job. Rep. John Conyers, went a step further, proposing an amendment that would establish a new commission outside the to regulate energy department energy prices. House Republicans generally- (UPI) - ol the A-- 6 g debated lined up behind the Moss proposal, although some urged that the measure be returned to committee. The legislation "seeks to vest far too much power m a single individual, Moss said. Although Schlesinger has generally met with congressional approval, Moss noted that this department will long outlast the present administration and present personalities. Noting that many of the Presidents energy policy proposals, which include controversial taxes on gasoline and big cars, appear in trouble in Congress, Rep. William L. Armstrong, told the House: We are creating a new agency purpose to administer a policy that does not yet exist. But Rep. Jack Brooks, floor manager for the bill, said the hew agency is needed to bring together the governments diverse energy programs. And he said while the bill would give the new energy secretary broad powers, it does not give him any authority that does not already exist in government. "What Congress gives, it can take away, Brooks added. Far from creating an energy czar who will have dictatorial powers over our lives and economy, we have created an office with balwith an anced, carefully prescribed powers. U S. Dis- trict Judge John Sirica said today John Mitchell and H.R. Haldeman must begin serving prison terms June 22 for their role in the Watergate cover-up- . Sirica said in an infermal court hearing he was not making an offical ruling because he has not received a Supreme Court order refusing to review the conviction of Richard Nixons former top aides. But, he said, the 22nd of June sounds about right to me. Sirica said the three weeks will give lawyers for the two men a chance to ask the Supreme Court to reconsider its a move rejection of their appeal justices almost never make. It will also give Haldeman and Mitchell the opportunity to put their personnal affairs in order before beginning their sentences of 30 months to 8 years in prison, he said. Haldeman want to attend his daughters graduation from law school. I expect to handle this like any other criminal case, Sirica said. When he receives the Surpeme Court order, the judge said, he will call Haldeman and Mitchell into court and at that time officially set June 22 as the date they go to jail. That date will be five years and five days after the buglary of the Democratic National Committee headquarters in the Watergate the start of the worst political scandal in American history that ultimately led to Nixon's resignation. Mitchell, Haldeman and Nixon aide John Ehrlichman were convicted Jan. 1. 1975, of conspiracy, obstruction of justice and perjury for their part in the cover-up- . Ehrlichman has voluntarily begun serving his sentence and was not involved in todays hearing. The other two defendants were not in court, represented by their attorneys. The Supreme Court in the past 10 Mitchell and Haldeman appeals of their Watergate cover-u- p convictions, then denied their request to have prison terms delayed pending final appeal. days first refused W'atergate prosecuter Charles Ruff. Haldemans lawyer John Wilson, and Mitchells lawyer Plato Cacheris all asked Sirica during the informal prodelay. ceedings for the three-wee- k The defense lawyers both said they were concerned that news of the Supreme Court's decision not to hear an appeal in the case had leaked out in a news report four weeks before the court ruled. Page report "other people." he added. Haldeman, AAitchell free ill June 22 WASHINGTON 1 nient. besides slowing economic growth. Burns, an appointee of former "The American people see high President Richard M. Nixon, is nearing interest rates as synonymous with high the end of his term as chairman of the innation." Lance said. "We need interFederal Reserve Board. Carter has not est rates that are at a reasonable, said whether he intends to reappoint stable level to encourage business him chairman when the term ends in investment." January. A spokesman for Burns said The Federal Reserve has decided to not comment on Lances retighten growth in the money supply out marks. made at a news briefing. of concern that inflation could be Burns warned Congress on May 3 getting out of hand and also out of that inflation casts a cloud on our worry that the money supply was nation's ability to maintain a satisfacgrowing too fast. tory rate of economic growth into 1978 The money supply grew at a record and beyond." Prices increased at a H) annual rate of 19 percent in April, which percent annual rate during the first Burns and the board clearly felt was four months of the year, much worse excessive and inflationary. Its target than expected. for money growth for the year is 1.5 to The Carter administration argues ti.5 percent. that the recent surge in inflation is only When the Federal Reserve tightens temporary, the impact of the winter the money supply, it takes money out of weather on food and fuel supplies. the banking system, which causes a Lance said Wednesday there is no tightening of credit and higher interest economic reason for banks to raise rales. interest rates. He said loan demand is But Lance told reporters Wednesday not high and there is an abundant there is a clear risk that the short-termoney supply. interest increases could result in higher If long-terrates go up. "that is long-terrates, which could discourSee BURNS on and business invest- age home-buyinBurns being one ISoO when BASIC RESEARCH is slowing down in the United States, and the nation's leadership in scientific achievement is in danger, according to a study financed by the National Science Foundation. The study says American science and technology are still strong, but sufficient warning signs to alert policymakers to ensure t" t downward trends don't worsen." Among the factors cited were less money for research, uncertainty of funding, a shift to applied research and an inadequate pool of young scientists. have-arise- FIRE OFFICIALS say the Beverly Hill Supper started in the Zebra Room and say they're "very close" to pinpointing the cause. Arson has been ruled out. Meanwhile, Kentucky Police Commissioner Ken Brandenbergh, heading the investigation, said that autopsies on the 161 victims showed that most died of smoke inhalation, not burns. Club fire TWO LOS ANGELES SUPERVISORS headed north to Soledad Prison today to ask Sirhan Sirhan, convicted of killing Sen. Robert F. Kennedy, why he did it and whether another assassin was involved. The meeting was arranged after Sirhan promised, through his attorney, to break his long silence about the 1968 Kennedy slaying. Sirhan's mother said the meeting may help release her son. She did not elaborate. THE AIR FORCE CLAIMS of success for its $2.9 cruise missile program were questioned who noted today by Sen. William Proxmire, a series of crashes and navigation mishaps. He said such claims of successful tests despite repeated mishaps are "a case study of how to succeed in the weapons business without even flying." billion THE REFRIGERATOR you buy this fall may cost $10 more because of recent pay increases won by steelworkers, the Council on Wage and Price Stability said Wednesday. The nation's largest steel 6. 5 pet. rate of producers would have to increase prices 4 percent iust to pay for higher wages and benefits under the new contract, it said. The steelworkers' contract takes effect Aug. 1. inflation U.S. AND PANAMANIAN negotiators are near agreement on a treaty to phase out U.S. control of the Panama Canal and a separate pact to guarantee neutrality of the waterway, sources close to the talks said today. They said substantial agreement has been reached during the talks that recessed Wednesday in Washington and are to resume in Panama in 10 days. They said a final agreement could be ready by the end of June. forecast WASHINGTON Treasury Secretary (UPI) -- W. Michael Blumenthal said today the rate of inflation will abate this year, although food prices still will be on the upswing until at least the end of summer. In his first Washington news conference, Blumenthal projected the annual rate of inflation would be 6.5 percent by the end of December. That compares with an 8 percent annual rate for the first four months of the year for both consumer and wholesale prices. The upward trend continued last month, when farm prices rose at a 24 percent annual rate. "It's very difficult to forecast the inflation rate with precession," Blumenthal said, but added the inflation rate of "non food items is going to abate, particularly in the second part of the year and will be considerably lower than the first four months." "In the case of food prices, we think they will continue to rise for a little while longer, maybe to the end of the summer." he said. Blumenthal predicted the actual inflation rate will 6.5 percent. "Thatstoo high, but that would certainly be lower than the rate at which it has increased in the first four months because of bad weather and the energy problems that resulted from the weather. AMERICAN AND VIETNAMESE delegations met for three and a half hours today at the start of their second round of talks on the establishment of diplomatic relations between the two countries. Assistant Secretary of State Richard Holbrooke said he and Hanoi's Deputy Foreign Minister Phan Hien would meet again Friday. Holbrooke said the meeting at the U.S. embassy in Paris was useful but declined to comment on how the talks were progressing. PROSPECTIVE PRIME MINISTER Menahem Begin has drawn up a new position on occupied Arab lands that political sources say is an attempt to stance. The moderate the Likud bloc's hard-lin- e document, personally authored by Begin, reiterates the right of the Jewish people to the land of Israel, without specifying the occupied West Bank of the Jordan, the sources said. attempting to forge economic order failed to reach agreement on the key issue of energy today despite an bargaining session. But spokesmen for the industrialized nations said failure to reach an energy accord would not jeopardize agreements reached over the past four days on increased levels of aid to poor nations and creation of a SI billion fund to stabilize commodity prices. RICH AND POOR NATIONS a new world all-nig- STOCK MARKET TODAY A bargainNEW YORK (UPI) hunting rally that gave Wall Street a brief reprieve lost its punch today and prices headed lower in moderate trading of New York Stock Exchange II II J 41 issues- The Dow Jones Industrial Average, up more than three points in the first half hour was off 3.48 points to 903.07 shortly before 1:15 p.m. EDT. It had gained 7.89 points Wednesday, after plunging 43.25 points in a period from May 18. The NYSE common stock index was off 0.17 to 52.80 and the average price of a common share was down 10 cents. Declines led advances, 613 to 556, among the 1,706 issues crossing the tape. The 537 unchanged issues reflected considerable investor uncertainty. turnover amounted to about The three-hou- r 11,010,000 shares, up from the 10,180,000 traded during the same period Wednesday. (Complete New York, American lists on D-- ) two-wee- k "We feel strongly that in the second half of the year, these factors will have abated and the rate of inflation will be on its way down, he said. Blumenthal also said he is concerned about the rise in the the rate that prime rate banks charge their best corporate customers. In the past week, major banks have raised the prime to 63i percent. (See storv above.) Hooded terrorist stands guard at school as local Moluccans deliver food. Moluccan terrorists fire at Dutch observers S. ASSEN. The Netherlands (UPI) South Moluccan gunmen holding more than 50 hostages in a hijacked train for the 11th day opened fire today on a police observation post. A spokesman said the gunmen started shooting after authorities refused to take down two dish-typ- e antennas which were erected earlier for video observation of the train The police post is in a farmhouse a few hundred yards from the train, which is stranded in open pastureland with some 56 passengers under the grip of an estimated 10 terrorists. A spokesman said the gunmen called up the government's crisis center here on a field telephone and demanded the antennas be removed. Authorities explained the devices were a normal part of the police operation, but while they were still talking, the shooting broke out. "The antennas will not bo taken down," the spokesman said, adding. There are some shots every day from time to time, but usually we dont know why they are shooting or what they at." are shooting Earlier a few of the gunmen got out of the train and wandered around taking snapshots, but the authorities did not dare move against them The knowledge that other terrorists were in the train pointing guns at the 56 hostages prevented authorities from taking any action against the gunmen as they strolled near the tracks "taking several pictures." a witness said. the Bovensmilde elementary school, other Moluccan gunmen continued to hold four teachers after releasing more than 100 child captives last Friday, when a mysterious illness felled many of the children. At The children will return to class next Monday at a nearby church school, authorities said. But 15 Moluccan children who wire released on the first day ol the twin sieges will not be going with them, "in their own interest." an official said Mrs. Carter in Ecuador UTAH WEATHER Fair through Friday and a little cooler. Lows mid 50s, with highs upper 80s. .s. UITTO, Ecuador ilPli Kosalynn Carter arrived in this lofty Andean capital to the blare of trumpets Wednesday in what ITS. officials hoped was a sign her visit will reinforce Ecuador's gradual move from military rule to democracy. But they said her goodwill visit could he sidetracked by two touchy issues dividing Eduador and the United States fighter planes and trade policies Mrs. Carter's military jet landed at this capital and soldiers dressed in jungle fatigues snapped to attention as she stepped from the plane. Members of the smartly dressed presidential guard heralded her arrival with trumpets. The wives ol Ecuador's three-mamilitary government greeted Mrs. Carter at the airport. She was to meet their husbands today before dining at the presidential palace. h n fttV Zones (Cache Front, northwestern deserts) Fair but with some cloudiness at times. Probability of measurable rain 10 pet or less thrpugh Friday. Lows 52 in Provo, 55 in Ogden and Salt Lake, 45 in 1, 2, 10 Valley, Wasatch Logan. Flighs Zones 3, 4 (Delta. Milford. Cedar City, Sevier Fair today but a Valley) slight chance of an evening thundershower. Not quite so hot. Lows 46 in Richfield and in Milford. 50 in Delfa and 54 in Cedar City. Hiqhs Zone 5 (Utah's Dixie) -Fair and hot through Friday. St. George low 60. high 99. Zones 6, 8 (Uintah Basin, Carbon County) Fair with slight chance of a thundershower. Lows 5V in Vernal and 50 in Price. National weather map, , Highs Zones 7, 9 (Southeast Utah, Canyonlands, Lake Powell and Flaming Gorge) most of Fair the and hot week with isolated thundershowers. Lows tonight 45 to 55 with 80s at highs Friday the lake. area summary on B-- . |