Winnipeg Free Press

Winnipeg Free Press (Newspaper) - March 18, 1968, Winnipeg, Manitoba Winnipeg free press monday March 18, 1968 business finance May heat of inflation scorch consumer by John Cunniff new York the bather who stayed too Long in the Sun and got burned the american consumer is really going to be scorched soon if not Given some Protection from the heat of inflation. This is a Well known fact there is no mystery to it. With few exceptions logical people such As president Johnson and . Congressmen and Bankers and workers recognize the Dan Ger. The mystery is How so Many can agree on the danger and not on the Relief. While americans Bond offer made Ottawa up the govern ment today offered to Exchange a new kind of special savings Bonds for up to Worth of 1959 Canada savings Bonds which mature this fall. Finance minister Sharp said in a statement the government would give holders of the 1959 Bonds new 10-year Bonds paying an average yield of 6.88 per cent a year and with a special double your Money feature which has been used with recent issues of regular savings Bonds. The new replacement Bonds will not be sold to anyone but offered Only in Exchange for the 1959 savings Bonds. The 1959 Bonds mature nov. 1, 1968. The new replacement Bonds will be offered March 26 and the Exchange can be made anytime before May 15, 1968. The new Bonds will be dated May 1, and mature on oct. 1 1978. They will pay six per cent interest on May 1, 1969, seven per cent for each of the follow ing nine years and per face value for the period be tween May 1, 1978 and oct. 1, 1978. Or. Sharp said that a feature of the replacement Bonds will be similar to that contained in the last two regular savings Bond issues. Holders who do no1 Cash interest coupons but retain them can double their Money in 10 years and five months. Good anytime the new Bonds will have the same features As regular Sav Ings at an time at full face value plus earned interest. The Exchange for new Bond can be arranged by registered holders of the old Bonds at All chartered Bank branches Anc authorized investment dealers Trust and loan companies. All o any part of holdings of the Oil Bond Issue May be exchanged a the owner s option. Or. Sharp said in his announcement that the govern ment this year faces a Large amount of maturing Bond obligations requiring refinancing. The Exchange is being made Early in the year in order to Pace the balance of the govern ment s demands for the rest of the year. The average yield to maturity on the 1959 Canada savings Bond Issue was 4.98 per cent including a three per cent non taxable Premium. It is being paid to those who convert to the new special Issue. Have been exposed to inflation Many months beyond the limits of safety nobody in authority has even raised a parasol. While inflation now is running Between three and four per cent a Means that inter est and salary increases Are wiped inflationary pressures May be building up. First escalation of the Viet Nam War already has thrown government estimates out of line. Defence costs now May run much higher than the increase foreseen a few months ago. This spending must be paid for either by a tax increase or through inflation. Next farm prices have recently begun to Rise meaning retail food prices might soon move higher. This would mean a pain Ful inflation. While Consumers were saving an unusually High portion of their take Home pay the econ omy was spared a certain mount of inflationary pressure. But there Are signs that people May step up their spending a bit. In the business sector of the Economy spending for Plant expansion has been running a bit below projections. But a govern ment Survey shows that businessmen Are planning to invest More than in slants this year a total much higher than had been forecast a Short while ago. A similar condition prevails in regard Hough were lower than had been sex to factory orders. Al orders Early this year petted a Commerce department Survey shows that manufacturers now expect big gains before the end of the year. In Washington the debate goes on. Congress says the administration should Cut spend ing. The Johnson administration says Congress should raise taxes. Either method would help Cool the Economy. But neither is being pursued. If taxes were raised As pro posed by the Johnson people then Money would flow to government coffers enabling it to pay its Bills while reducing the spending Power of the civilian Economy. If government spending were Cut As advocated by members of Congress then the govern ment s ability to put pressure on the Economy would be reduced. Fuel would be taken from the inflation Furnace. The Economy would lose heat. Congressmen naturally Are hesitant to see More Money pass into the hands of the Feder Al government for a tax in crease not Only reduces the Power of the private or civilian Economy but automatically enlarges the Public Economy. Will two Price Gold ease speculation photographer Randy Hill of the Calgary albertan went up 600 feet to get this Bird s Eye View of Calgary from the downtown husky Tower which is now under construction in the Foothills City. Saks seen replacing Gold by Ken Smith Canadian press business editor whatever the outcome of the current International currency crisis there is a growing body of opinion which feels it Marks the last big fling of Gold As a monetary value. In its place As backing for the International Exchange of pay ments for Trade Many people lbs figures show shipments up 4.6% by James Nelson Ottawa ing shipments got off to a flying Start for 1968 in january with traditional patterns of activity being reinforced. The Dominion Bureau of statistics reports that shipments for All Canada were 6.4 per cent higher than in january 1967. But a province by province breakdown of the figures shows that Only Ontario was above the country Wida average gains made in other and the parts of Canada were severely offset by Slack activity in the Atlantic provinces. The Only provinces to show a decline was Newfoundland where shipments were Down 23.5 per cent in january from a year previous. Severe Winter weather and the effects of Britain s devaluation of the Pound on newfound land s important newsprint exports were believed the Princi pal causes. New Brunswick made the narrowest of Gams with an in crease of half of one per cent. Total manufacturers ship ments for All Canada in Janu Ary were com pared with in Jan uary last year. Compared with this gain of 6.4 per cent Ontario s shipments Rose 7.9 per cent to from in january 1967. Ontario s whole gain for the year 1967, however was Only 2.6 per cent Over 1966 shipments. Quebec next Ontario Quebec s o f manufactured ent to from Alberta up 2.6 per cent to from manufacturers shipments for r i e Edward Island the Fukon and the Northwest Ter stories Are too same to be counted for separately by the statistics Bureau. They Are in lured in the All Canada total however. Next to shipments products in january totalled Law revision proposals could change Trudeau Ottawa up the govern ment still has an open mind on its proposed revision of Laws on abortion firearms and lotteries Justice minister Trudeau said in a formal statement Friday. He issued a special clarification of several of the criminal produced code amendments in in the commons 12 weeks ago. The omnibus Bill incorporating the amendments has received first Reading. Or. Trudeau said there has been considerable Public confusion nver some of the proposed changes. In most instances he defended contentious Points in the Legisla Tion. But he said he had always intended to make any changes that appeared necessary As a result of Public representations. In the subject of abortion the minister s statement said there is much confusion about the in tent of the existing Law. It would be More helpful if representations talk about what the Law should be rather than objecting to amending the exist ing Law the new Law As proposed would permit a Hospital com Mittee to approve an abortion in circumstances where Continua Ion of the pregnancy would endanger the life or health of Thi Mother. Or. Trudeau said some experts claim that under the exist no legislation there is no de Fence whatever to a charge o procuring a miscarriage based upon medical considerations. Others argue that a miscarriage May be procured if it i necessary to preserve i woman s life. Still others main Tain that the Law is not Bein amended in substance by the new proposals but merely Bein codified and that the Bill re fleets Only what is being Don now in responsibly manage hospitals. Whatever the views of the Public May be there is a Nee for clarification or. Trudea said. He also referred to a limit on the value of prizes Rel pious and charitable organizations May award in running to teries and games of Chance. The Justice minister said h will recommend to Cabinet higher limit or no limit because he has Learned that such game of Chance As Bingo finance very useful and sometimes be Essary Community for a 5.9-per-cent in Rease Over january 1967. British Columbia was third nth shipments totalling up 5.4 per cent from a ear earlier. These figures Are All ship ends by manufacturing plants each province and Are not mixed to shipments out of the province. The increases in manufacturers shipments for the other provinces Nova Scotia up 3.4 per cent from Manitoba up four per cent to from Saskatchewan up three per now think will come sooner or later some new unit. Because of the fears which re Liance on Gold has created Dur ing the last few months they believe the change will come sooner rather than later. The most Likely unit will be the special drawing rights under the International monetary fund they say. These rights would be some thing like a person s chequing account with a except countries would draw on the re sources As needed instead of individuals. Such rights would have a greater real value As a Mone Ary backing than Gold since they would be supported by countries True out put of goods and services sup porters say. Their value could expand As the world s wealth grows with out causing any of the complications that now come with using old As an International Backer. Since the value attached to Gold is set arbitrarily there is no flexibility built into its ing. As has been shown re c e n 11 a tremendous pressure can be generated through Gold against the currencies it is sup posed to by speculators who bet on a change in its artificial value. While there Are plenty of divergent views on the question of Saks versus Gold one economist who has argued for an end to the monetary use of Gold says probably the strongest argument in favor of doing away with this mysticism that sur rounds Gold is the crisis we re now in. Any solution that keeps Gold will not really be a. Solution at All. The same problems will re main but they la just be shunted off into the future. And five 10 or maybe 20 years from now the world will get itself into the same bind unless it throws Gold out the win Dow now and turns to a new International Standard that can move with the another says the shift won t come about easily. Don t forget that Gold has been used As an almost absolute Standard of value practically since recorded history began. That s a lot of tradition to Over come. You be seen the strength of that tradition in the last couple of weeks in Canadian Banks when people bought Gold with out really understanding at All what this crisis is All about. But they hear that paper currencies May be facing devaluation so they think right away about he feels however that the step by the United states Senate last week in voting to end the 25-per-cent Gold backing for . Domestic currency is a big step toward a change. It Means that the . Has taken the psychological step of admitting that there is no magi Cal Quality about Gold that gives it an immutable value. It s a lot smaller step for a country to decide Gold has no special significance internationally once it has made the same decision by George Taylor new York a seven of the leading Western industrialized countries approved sunday in Washington a two priced system for Gold. What is the system How will it work will it Stop the . Loss of Gold Here Are some of the questions and answers about the system is the two Price system for Gold Means a Price of an ounce would be maintained in transactions Between Cen trial Banks of different coun tries. Prices in the private Market would be determined by demand and Supply Esti mated at around and an ounce. Was a two Price system set up was designed to Stop the wild speculative buying of Gold Bullion at an ounce which swamped the London Gold Market. Speculators were buying on the Assumption it would increase in Price. Now Gold on the free Market will sell at whatever Price people Are willing to pay without affecting the Price of Gold used for settling transactions among nations. Was the old Price system United states and seven other Western countries France which the London Gold Pool in 1961 to stabilize the Price of Gold at an ounce. This is the Price at which the United states since 1934, has said it will pay in Gold for other countries Dol Lars. The two Price sys tem solve the u a. Gold prob Lem say it stops. The loss of Gold immediately but the underlying the balance of payments Defi Steps such As a tax increase and spending cuts must be taken to reduce the deficit economists say. New York basement has the most Gold Are the seven nations which agreed to this two Price system addition to the United states they Are Belgium West Germany Italy the Netherlands Switzerland and Britain. Much Gold do the seven nations have these seven nations now Supply Gold to any mar Ket their sunday communique the Central Banks said they decided no longer to Supply Gold to the London Gold Market or any other Gold they said they Felt the existing Stock of monetary in governmental would prevent the Central Banks from acquiring Gold at an ounce and re Selling it for a profit at a higher Price in the private mar Ket seven n a t i o n s agreed that they would not sell Gold to other countries to replace Gold sold in the Pri vate Market. Long will the higher private Market prices last Paris Gold dealer said As soon As All the speculators try to sell Gold and take their profit you will have too much Gold around and the Price would drop. Q Here will the Gold come from for the private Market Gold and Gold held by individuals will be the sources. A what s the Long Range prospects for the two Price system say it is a Stop Gap measure. One said the plan will work for a while if the free Market Price rises up to an ounce. If it gets higher the Central Banks will see to make a by George Taylor new York a seventy five feet below the crowded streets of new York s financial District lies the largest single pile of Gold in the free world. The Gold rests on the Bedrock of Manhattan Island in an air tight vault with Waus eight and 10-feet thick. A 90-ton steel door set in a 140-ton-Frame controls the Entrance. The Gold is stacked neatly in from the United states in trans actions which move it from the Treasury s assay office a few blocks away to the Federal re serve Bank. While statesmen and Finan Ciers the world Over debate the role of Gold in International pay ments workmen routinely weigh and shift the Gold in the new York Bank. Is it a temptation you d have to be nuts to try bars in the basement of the s a y s Corradon govt. Urged to relax charter flight rules Edmonton up Maxwell w. Ward president of Ward air Canada ltd., has urged the Canadian government to relax to rules governing charter flights. The Canadian transport com Mission reserved decision in Ottawa after a hearing into allegations that Ward air Vio ated regulations governing overseas group charter flights. In a statement or. Ward said charter flight rules in Anada Are those of the inter National air transport association which he described As the world s largest Price fixing the statement accused Mem Ber airlines of Iata of employ ing investigators to enforce their rules discredit the charter airlines and harass groups and organizations conducting flights with charter counsel for Ward air alleged at the Ottawa hearings that four of the five complaints of violations brought before the Board arose from visits by employees of major airlines to Ward air offices specifically in Quiring about charter flights and dealing with inexperienced Ward air staff. Or. Ward s statement said Many canadians taking charter flights could not otherwise afford to travel abroad. With such a positive Indica Tion that charter flights Are in the Public interest Why is the Canadian government being a party to ruthlessly enforcing rules established by a Cartel and opponents of charter carriers when the government should be relaxing its rules governing charter flights in keeping with the Public interest and Federal Reserve Bank of new York. Here 50 feet below sea level is in Gold about More than the Gold Stock in fort Knox by. The remainder of the . Gold Stock is in other mints and assay offices. Unlike the fort Knox Gold virtually All of the new York Gold belongs to foreign govern ments foreign Central Banks comparable to the . Federal Reserve system or International institutions. Part of the Gold came by ship on the eve of the second world War. Some has been bought Sepe of Bloomfield n.j., chief of the Bank s vault division. Kept in jail cells in the vault Are 121 separate 10-foot-High floor to ceiling compartments of varying s izes resembling barred jail cells hold ing the Gold of some 70 foreign accounts. Each compartment is numbered and contains the Gold of a foreign nation or Bank. The identity is known Only to the Federal Reserve Bank. The largest account totals Over and contains More than Gold bars. The Federal Reserve Bank acts As a go Between for nations settling debts with each other in the universally accepted medium of Gold. For instance a country with Gold in compartment 38 tells the Federal Reserve Bank to pay of its Gold to a coun try with Gold in compartment nine. Federal Reserve Bank workmen actually move of Gold bars from compartment 38 to compartment nine. If compartment .38 country wants its Gold shipped Home the Federal re serve Bank takes the Gold from the compartment packs it four bars at a a commercially made Pine Box nails it together and binds it with wire straps and sends the Bullion on its Way. The country withdrawing the Gold makes All the Security and shipping arrangements once the Gold leaves the Bank. The coun try pays All the handling charges but the. Bank does t charge storage. Trading in outstanding Securi ties Between Canada and other countries in november resulted in an extraordinarily Large net Purchase balance of Mil lion. Geographically there were net outflows to the United states and the United kingdom of about million and million respectively while there was a million net inflow from other foreign countries. Uranium agreement inked Tokyo Reuters an agreement on joint development of uranium resources in Canada has been initialled Here Between the american Kerr Mcgee corp. And a group of japanese electric Power and mining companies the federation of elec tric Power companies said today. The american firm earlier this month reopened negotiations with nine electric Power companies and six mining firms Here on the proposed joint development project of uranium mines in the Elliot Lake District it said. The negotiations were suspended in september be cause of disagreement on Shar ing expenses necessary for the uranium development. The federation however re fused to divulge details of the agreement. Montreal Industrial Index both the Toronto and Montreal Industrial indexes showed Little change last week. The Toronto Exchange closed Friday at 148.03 compared with 148.64 the week before. Montreal Exchange experienced a slight Rise to 153.76 from 153.34. Gray urges using port Churchill Regina up delegates to the 63rd annual convention of the Saskatchewan association of Rural municipalities were told thursday night sizeable savings in Grain shipping costs could be realized if proper use was made of the Northern Manitoba port of Churchill. Jim Gray of Saskatoon presi Dent of the Hudson Bay route association said the Prairies had at their door a first class seaport which sits Idle most of the year because of selfish Eastern interests. Or. Gray said it Cost 13.2 cents to ship a Bushel of wheat from Scott sask., Midway Point Between the Lakehead and Van Couver to Churchill compared with a total of 28.8 cents to ship it from Scott to Montreal. He said both Churchill and Mont real were the same sea distance from Liverpool. But despite this potential Sav ing he said there is great reluctance to use the Northern port. Or. Gray said he disagreed with insurance companies who said the Northern route was unsafe and said reports from ships captains proved other Wise. It is every bit As Safe As the St. Lawrence he said. Deaths Andreyko mrs. Wasyl 80, of 694 red Wood Avenue. Basz John 68, of 549 St. Catherine Street St. Boniface. Beggs William Ewart 71, of 259 Inkster Boulevard. Conway mrs. Rose 74, of 1086 Corydon Avenue. Crabtree mrs. Fox Flor 57, of 514 Oxford Street. Dueck mrs. Herman wheel 75, of 398 Home Street. Edwards mrs. Amy Wyatt 89, formerly of 601 Broadway. Gerrie mrs Agnes 68, of Chilliwack b.c., formerly of Winnipeg and Letellier Man. Golinsky Egnat 83, of 221 Burrin Avenue West Kil Don an Hannesson 95, of Gimli Man., formerly of Arborg Man. Herwig mrs. Gerhard Ruth ,37, of 616 Greenwood place. Jennings Douglas Wallace 48, of 44 Carmen Avenue Krawchuk Steve 48, of Stead Man. Kushnir Van mrs. Mike 44, of 657 Magnus Avenue. Kyle Joseph Willis 89, of Carman Man. Lytle John Stanley 65, of 651 King Sway. Morwick Alexander 85, of 460 Sherbrook Street. Olver Roland 76, of off Lar Ney Man. Peterson mrs. Krist Bjornt 73, of 425 Mclean Avenue Charlesw Ood formerly of Sel Kirk Man. Phipps Elizabeth Maggie 88, formerly of 92 Maryland Street a retired Northern knitting factory employee. Potocky mrs. Mary 75, of Manitoba Avenue. Sigurson Paul Roy 33, of 886 Alverstone Street. Smith mrs. Eleanor 86, of Gunton Man. Stockan James if Flam 42, of 502 Madeline Street trans Cona. Sullivan Harry Phillip 58, Winnipeg postal employee. Walker Arthur 53, of 1595 Alexander Avenue. Whalley mrs. James Bertha of 501 Montrose Street. Ziemanski Joseph 83, of Man. Please see classified death notices by the Canadian press Washington Henry h. Tim Ken jr., 61, Board chairman of the Timken roller bearing co. Of a heart attack. Fay 55, for Mer London editor of the Man Chester guardian and Well known columnist and reviewer. Los Angeles actress june Collyer 61, widow of actor Stu Art Bevin of pneumonia. Wilmington . Mrs. Sarah Kenan 92, heiress of the stand Ard Oil millions. Livonia Mich. Or. Ira Alt Shuler 74, internationally known psychiatrist in an Auto Accident. Hollywood composer Mario Castelnuovo Tedesco 72 of a heart attack. Houston Johnny Iron lips Fischer 61, big time trumpeter during the big band Era ;