Thursday, November 21, 1968

Deliberate Refreezing Probable

FiscHett!

A headline writer summarized it like this the other day: Khrushchev Ready to Refreeze Cold War. Indeed it appears so . . . with the blockade of U.S. military traffic along the German Autobahn, searchlight harrassment of U.S. planes in the air corrWor to West Berlin, the arrest of Yale Professor Ferderick Barghoom.

Either of these incidents by itself could strain Soviet-American relations. But all three in the same month? Coincidental? Not a remote chance! Intentional refreezing is going on.

Why should Mr. Khrushchev need a lowering of Cold War teinperature, just when the U.S.-Russian cultural exchange program was beginning to flourish, and good will was still glowing from the recent limited nuclear test ban agreement?

Those questions are reminiscent of 1961 when the Berlin Wall sprang up just in time for the 22nd Soviet Communist Congress. Chairman Khrushchev needed a refreezing of the Cold War then to re-consolidate his position in tie Soviet leadership. Now, with the December 9 meeting of the Communist Party Central Committee in the offing, Khrushchev needs an avenue to divert the spotlight from

Soviet agricultural failures and perhaps other less-known internal difficulties. A focusing of Soviet attention on the Cold War can again strengthen Khrushchev's position.

Then why was Barghoorn released? Why did the searchlight harrassment stop as abruptly as it started? And why was the Army convoy finally allowed to pass? Khrushchev had accomplished a purpose that could have been shattered if the United States had been pushed too far. The Soviet leader learned thatj the Cold War thermometer .can be dropped below freezing without building a Wall. He learned in Cuba that he would not be allowed to build another Wall anyway. On the other hand, he knows that enough isolated incidents of harrassment serve the same purpose without risking war.

The pattern in Soviet behavior indicates strategy leading to a colder Cold War. That is apparently what Khrushchev needs before the December 9 meeting, a very important one for the Soviet premier. With that meeting yet three weeks away, the West may well brace Itself for further unfolding of Khrushchevs plan.Their Positions Made

Comptrollsr Is Possible By ForesightHtmr. mtoR MrRTa>m our*

4 .... .By ART BUCHWALD

f-

!Being 'Assailed.

By WILLIAM A SHIRES

BANKINQ There Is Increasing and undisguised criticism in state banUng circles the policies and recent actions of the U. S. Comptroller of the Currency, James J. Sax-<m.

This criticism is coming chiefly from those concerned with jM^serving the traditiimal dual system (rf banking and maintaining a proper balance between state-chartered and national banks.

It is based on complaints that Saxon, with far-reachi n g powers of his office, has tipped ~ the scales in favor of national banks and seeks to establish a dominant system of uniform national banking across the country.

STATE Criticism comes also from those who have been trying to resolve the conflicts In the state system between big branch banks and small. Independent banks over the question of branching and mergers.

They are saying that Saxons policies have complicated the picture and make a satisfactory solution difficult if not impossible. Their position is that Saxon has fanned the flames. Is spurring a race toward big-nes ness in banking and pitting bankers against each other.

Concern about the role of the Comptroller and his policies Is growing in Raleigh and elsewhere across the state and, in fact, in banking circles across the country. Criticism of Saxons policies Is widespread coming not only from small, Independent banks but from such giant banking insitutions as New York Citys Chase Manhattan.

FORLINES Writing in the current issue of The Independent Banker, John A. ForUnes Jr. of Granite Falls, says we find ourselves being pitted against each other, largely because of this (me ccmtrover-sial man.

Forlines, president of the Bank of Granite and a sp(^es-man or local, independent banks In North Carolina, writes bluntly: 1 think Mr. Saxon is the worst thing that has happened to banking in the last generation, possibly in the last 100 years. . arrogant, dictatorial and a doer and a talker at a time when we desperately need a listener and thinker.

If left tunchecked, in my opinion, Mr. Saxon will see to It that banking will ultimately be concentrated In the hands (rf a few large Institutiooa in North Carolina, Destruction of Independent banking, I fear, will make a sitting duck of the entire banking industry for those who wish to nationalize the industry, ForUnes says.

CRISIS Forlines predicts a banldng crisis. He points out that the branching and merger race which began about five years ago reduced the number of banks In North Car-oUna from 208 to 1958 to 156 in 1963 and that of^the 136 six

are statewide chaiiflfenks hold

ing approximately 80 per cent of the total commercial deposits.

He predicts that if the trend Is allowed the continue, we con-celveably would have only eigth or 10 banks in North Carolina within the next few years. Already, he says, only 20 per cent of total commercial deposits remain with 150 of the 156 banks. While the number of banks is declining, he says, the rapid increase in banking offices has brought a banking office for every 6,000 persons.

Grave concern exists among practically all bankers that we are approaching a serious ov-,er-banked condition, Forlines says.

EFFORTS ForUnes and other independent bankojrs in the state asked the State Banking Commission and saying, in effect, you go ahead and make your laws restrictive; make it harder for state banks to branch and merge as we will do just the opposite as far as national banks are concerned.

ForUnes says Saxon is trying to dominate banking and regulate it as he sees fit. He is causing great unrest among bankers in North Carolina and throughout America.

This unrest has been evident and discmssions may lead to further efforts by the State Banking Commission which finds itself between two pressures. One official says he feels the banking commissitm, with the new state legislation, has displayed admirable restraint and expressed hope that Saxon might also be persuaded to show more restraint.

PROBLEM The state vs. national banks phase of the problem is a fairly recent one, Saxoxn took office only two years ago this m(xith. It also has its roots in Washington and in the power granted by Congress to the ComptroUer of the Currency.

Sources say they believe that North Carolina has taken action to the extent that the legislature is able toward solving the problem and that further scussions must be on the i^ashington level, it least two large Southern Texas and Florida, do permit state bank branching. And whereas these states have not experienced a branching and merger race, sources say their bankers are now feeling pressures Imposed by Saxons poUcies.

s^s^ nbtJ pel

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It is interesting that candidates and pctential candidates for top official posts in North Carolina have been quick to assert they see no need for an increase in state taxes during the next several years.

Such talk j^iakes sweet music for the ears of those who will cast the votes in the next election. And the beauty part of it is that the candidates ate hot just voicing vote-appealing words, so far as the states tax situation is concerned.

Significant steps taken in the past few years to revamp the states tax structure and tie the states revenues more closely to its advancing economy have paved the way for new candidates to take the no-new-tax stands.

Gov. Sanford has been subjected to severe criticism and even abuse in past months for changes he advocated in the states tax structureparticularly the removal of most exemptions from the sales tax. These -moves^ however, have enabled the state to assume a position where its annual increases in revendesreflecting a higher economic level, have

-And What Are You Watching?

been sufficient to meet most of the needs of North Carolina. It is the opinion of most observers that this favorable revenue picture will continue for North Carolina without the necessity for new taxes.

The changes in the tax structure advocated by Gov. Sanford and enacted by the 1961 General Assembly were of a long-range nature that should lighten the revenue burclen that will face administrations and legislatures of North Carolina in the future.

The fact that candidates for high office in the state next year can say there is no need for new taxes is a tribute to the work in this field done by Gov. Sanford and his administration. With continued economic growth expected by the state, and with attention to continuing wise economies in state government operation, there should be no need for North Carolina to have to look for new tax sources during the years immediately ahead.

We have these friends well call the Shaws. The Shaws do not have television. They claim they dont miss It and they get a lot of reading done and listen to records and besides its a great conversation piece when they go out to dinner to say they dont own a television set. But they have a housekeeper and natui-ally they had to '^vide her with a televisicm set or she would have left long ago. The Shaws used to hear great giggling and laughter from their housekeepers room and they assumed she got a lot of enjoyment out of her set.

But one -night the phone rang and the lady on the other end said she was taking a survey and wanted to know what TV program they were watching.

We dont have a set, Mrs. Shaw said.

You mean there isnt a set In your entire house?

Mrs. Shaw started to feel slightly guilty. Well, my housekeeper has a set.

What is she watching?

I dont really know, Mrs. Shaw said.

Would you please find out for me?

Mrs. Shaw told Mr. Shaw to go back to the housekeepers room and find out what Beatrice was vfatchlng.

Mr. Shaw returned in a few moments.

Shes net exactly watching anything, Mr. Shaw said.

But the set is on, Mrs. Shaw said. I can hear it. *Yes, thats true, said Mr. Shaw.

What are you so mysterious about?

I think her boy friend is with her, Mr. Shaw said.

Did you ask her what she was watching? Mrs. Shaw said.

I didnt have the heart to. When I opened the door the room was kind of dark and Beatrice was giggling and laughing. So I just shut the door again.

I better go and see what is going on, Mrs. Shaw said. Here, you speak to the lady on the phone.

The lady on the phone demanded, Have you found out what program your maid is watching?

Were not sure, Mr. Shaw said honestly. As a matter of fact, were not sure she ever has watched anything on television.

Does she have her set on? Yes, Its on. but the reception is rather fuzzy and nothing seems to come through very clearly,

But surely you must know the name of the program. Mr. Shaw was starting to become annoyed with the lady.

Madam, were trying to give you an honest answer. I believe these audience surveys are very Important and I would hate to give you misinformation. This much I can tell you. The set is on, the maid is In the room, but when I was there she wasnt looking at It. What was she doing? Madam, that is not part of your survey. Youre only supposed to ask about television problems. Now if you will kindly wait, perhaps my wife will

have a bulletin for us.'*

Mrs. Shaw returned.

What's she watching? Mr Shaw wanted to know.

Shes watching her boy friend leave, Mrs. Shaw said angrily.

Mr. Shaw repealed on the phone, Our maid is watching her boy friend leave.

I dont believe iere is suob a show, the lady said.

"Well. C(ne on over to our house, Mr. Shaw said, "and 'see for yourself.

A Dilemma For

Oil Industry

BY JOHN CHAMBERLAIN

Copyright, 1963, King Features Syndicate, Inc.

The donkey that starved because it was equi-dlstant between two bales of hay and couldnt make up its mind which way to move hfid a minor dilemma to solve compared to that faced by the American oil industry.

Other Editors Saying...

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1

Viet Nams Rebellion

(The Arizona Daily Star)

Conaress Hones

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BY JAMES MARLOW WASHINGTON (AP) - The Republicans Senate leader, Everett M. Dirksen of Illinois, is completely against any proposed law to compel members of Congress to disclose their incomes and assets.

He gave a very odd reason.

He said he did not come to Congress to be a seocnd-^ class citizen. He didnt say that others who have to reveal their financial interests, like top government officials, are second class.

But Sen. Maurine Neuberger, D-Ore., pointed out:

When Cabinet members and other executive appointments come up for Senate approval, before they can have their new job, they are forced to disclose their investments and we treat them as if we were going to crucify them.

Members of both parties In Congress particularly Dirk-sens fellow-senator from Illinois, Paul Douglas, a Democrat, have repeatedly called on Congress to approve a disclosure law on Itself.

Two days ago so did Dirk-sens opposite number. Mike Mansfield of Montana, leader of the Senate Democrats. But Dirksen said I wont compromise an inch <mi this.

It sifts down to a case of who policies the policeman? since members of Congress vote on measures Involving business interests In which many of them have major or minor holdings.

A number of events in recent m(Hiths, at least (me of'^ them sensational, has given

added attention to the demands for a disclosure law.

But also involved is the question of ethical conduct, which Congress expects and demands from officials in the executive branch of government.

Last months Robert G. Baker,' who began as a Senate page boy and wound up as secretary to the Senate Democrats with a salary of almost $20,000, quit when his Democratic bosses decided to question him.

This happened when a vending machine compsmy sued him and the press not only found out about it but about a lot of Bakers other financial activities which seemed to extend across the country and down to Haiti.

From these stories 'Baker, now 35, looks like a tycoon. A Senate committee is investigating him.

In June former Rep. Prank W. Boykin, D-Ala., and former Rep. Thomas F. Johnson, D-Md., were convicted on conflict of interest and conspiracy charges in connection with a savings and loan c(npany.

This months Rep. John W. Byrnes, R-Wis., a member of the Joint Congressional Committee on internal Revenue Taxati(m. acknowledged he helped a company get a favorable tax ruling from the government and then Invested $2,-300 in the compans stock which is now worth $27,000.

Mpre recently a congressional delegation to a NATO meeting in Paris took the head waiter of the House restaurant (Continued on Page 5)

Ever since the dawn of history there have been rebellions against governments. Whether they have been just or unjust, depends largely on whose ox is being gored. Our own forefathers founded a new government by rebelling. If they had failed, John Hancock, Samuel Adams and George Washington probably would have paid the supreme penalty.

The rebellion in Viet Nam, where some military leaders have seized power, and suni-marily executed President Diem and his police chief, Nhu, is what might be called a natural one. The Diems openly offended many of their people, who are Buddhists. They punished and imprisoned thousands of them for what might be called civil disobedience. When seven Buddhist priests consecutively and publicly burned themselves up in protest, they demonstrated by their dramatic suicides how deep the feeling of persecution was.

H there ever was a justified overthrow of a government by the mUitary this is one. The United States does not have to apologize tor any charges, that might be made against it, on account of the presence of Its military forces in that country, or for its wish to have a government representing the major religion of the country.

If anything, the tJ. S. has been too patient. Not a week has passed In recent months that American soldiers have

not been wounded and killed. The Diem regime has waged war apathetically. That a Buddhist general led the coup detat is significant.

However, this incident should bring an end to that pious, sanctimonious, hypocritical policy that has come to., the fore in recent months, of wailing about ie wickedness of the military coups detat that have taken place in Peru, Honduras and the Dominican Republic, If the new provisional government of Viet Nam deserves recognition, so do those of Honduras and the Dominican Republic. The Peruvians mmiag-ed to set up a permanent government to succeed the provisional one that seized power there two years ago.

Instead of trying to combat an historic trend like that (rf rebellion, our policy should be one of serving our own hiter-ests first. If the new governments that come into power are friendly to us, we should help them, and give them a chance to prove their competence, by free elections. However, there can be cases where no elections can be held for months or even years. The criterion should be friendliness to us; and neither commendation nor condemnation as to how rebel governments come Into power.

'The chanc are that there will be many rebellions and military seizures of power In Latin America during the coming years. We cant sweep a tide back with the broom of mere denunciation.

If you dont believe the donkey was in a comparatively enviable p(wition, you should listen to the perplexity of oil men who attended a recent American Petroleum Institute meeting in Chicago. The industry had been treated to a speech by Thomas S. Gates, President of the Morgan Guaranty Trust Company and former . S. Secretary of Defense, which paid high tribute to the activities of American oil abroad.

Your potential contribution to the progress of the less-developed areas, said Mr. Gates, is In some ways greater than that of any foreign aid program. . .When you send capital into a country, you send with it the powerful multiplier of managerial skiU and technical know-how. Where the climate is receptive, you could carry this far beyond the scope of your own operations into such fields as water supply, agriculture, transportation, education, even finance.

Listening to this, the oil men could have swelled with Justifiable pride. Instead they went out Into the lobby of the Conrad Hilt(m and read the headlines from Argentina, where Averell Harriman, that perennial . S. diplomatic trouble shooter, had failed to persuade President DUa to honor North American oil contracts entered into by the previous Prond-ing government.

Being no fool, Mr. Gates had not skipped blithely over the question of possible expropriation of U. S. oil company investment in foreign lands. Nevertheless, the news from tiie Argentine offered a moet Utter commentary on his speech. North American petroleum companies had done yeoman work in making Argentina self-sufficient in oil. They ha dcarried out effective drilling operations which have resulted In a domestic flow of oil that now

saves the Argentine consumer from kicking up more than (300,000,000 annually in hard foreign currencies to import fuel. Indeed, the Argentinians are even exporting some oil. But President niia refused to promise Averell Harriman any just compensation for an impending conflscatiiMi of Yankee-created property.

Meanwhile, as the oil men were listening , to Mr. Gatesa say that k has been gratifying to note that the United States government is reported to have spoken up in support of the agreements which American companies made in good faith, Brazils President Jan-go Goulart was busy jangling his spurs and figuratively rat-tling a sword. Addressing a conference of the Alliance for Progress, the ineffable Jango informed visiting North Americans that Latiir^ America could solve its own/problems.

As Jangoi self-sufficiency relates to oil, It consists of collecting hard money from foreigners as an import tax and then paying the foreigner for his product in soft Brazilian Cruzeros, which depreciat* almost as fast as ice cream melts in a tropical sun.

With all this going on, tht U. S. lntema|jk)nal oil men could hardly be impressed with Mr. Gatess exhortaUais to get out there and buck the lino with the old schcxjl spirit. They have lived throiigh Mexico and Chiban expr<Hjriati()s; They have willingly submitted to hefting practically the whole Venezuelan economy on their shoulders as the condition of doing business in Venezuela. They have seen the Soviet government steal theii* markets by price-cutting that cann(k be justified economically. It is, of course, the So-^viet Unions own business if it wants to sell its oil in Europe on a state-subsidized basis. But the U. S. oil men have a justifiable right to be outraged by tte proposed wheat deal with the U. S., for the Soviet Union would assuredly bo counting on Its subsidized oil exports to raise foreign exchange to pay for the wheat.

Senator Hickenlooper wants to cut off aid to any foreign nation which expropriates American oil properties.

Will Automation Kill Off Jobs?

Strei'igth For Today

BY EARL L. DOUGLASS SCHOLARS AND STUDENTS

Only a few men In the world have the mental capacity and the opportunity to be scholars. A scholar is (me who by long continued study gains competence in a particular field. He is engaged In advance study acquiring the detail of knowledge and interpreting them for general use. The scholar is usuolly found either on a college faculty or in a scientific laboratory.

Pew people can be scholars, but everyone can be students, for a student Is any(me who studies. A student may take only a few minutes each day to read in some particular field history, languages, Itt-rature, philosophy, politics, 'science, horiculturs, lawn care or wood carving. Such a person has little hope of discovering any underlying principle which will revolutionize

thinking In the field in which he is interested. What he wants to do is acquire certain knowledge. He may want to know more about English literature, or the history (rf his own or other countries. He may be anxious that he wlU have sufficient knowledge to spot and appreciate the worlds greatest paintings when he goes into an art gallery. He may listen a few minutes every day to phonographic records until when be hears a few bars of some famous sjrmphony or concerto he_can immediately name the piece, the composer and the date.

Hobbies are wonderful for us all if we do not spend too much time rldipg them. A few minutes every ^ day given to the study of some particular subject will light up the season of middle life and the years of retirement with a light that will give (tipy real aigfiilUaQC#*

,

By ELMER ROESSNER

Many economists and government officials are whistling as they walk past a graveyard, according to John I. Snyder, Jr., chairman and president of U. S. Industries, Inc.

The gravjyard is the burial place .of thousands of jobe, killed by automation.

Snyder should know whereof he speaks. U. S. Industries is one of the largest manufacturers of automatic equipment.

Some economists say that automation, like the spinning jenny, will create more jobs in the Tong run than it kills off. Gardner Ackley, a member of President Kennedys Council of Economic Advisors, has publicly challenged the Idea that automatl(Hi Is making unemployment unusually difficult. He said nothing io the present situation differs from pervious periods of high unemployment.

Past periods of rapid expansion of total employment have shown that most of these workers can be and are absorbed, he stated. MlSCONfiBPTlONft POINTED

OUT

Snyder, In testimony before Senate Labor subcommittee, %Tirt in an article in the current Management Review detxinked what he called popular coocepti(xis about automar tion. They and ls rejoinders

are;

First is the common argument . .that the problems are essmittally the same as problems we have faced and solved in the past.

PeiMjIe were hurt by the Industrial Revolution because we were breaking out of an agrarian society to build an Industrial society that would create jobe. not take them away. . .With these, new tools we are making obsolete not only our conventional machines but hundreds of thousands of modem men as well.

The next argument is that automatkNi is not going te ett-minate many jobs.

This argument ignores the evidence that automation is-a major actor in eliminating tens of thousands of jobs a week at this moment. R is not only displacing people dlrect-ly, but jndlreotiy through

Isilent flrlngs ai workers who would have been hired had not their Jobs been eliminated by automation. (Snyder told the Senate subcommittee that atomation was wiping out 40,000 jobs a week, not 200,000 a' year as the Labor Department estimated.)

FEW MAINTANANCE JOBS

A third argument is that automation win create jobs for workers aot only in running machines but in malntain-faig and building Hiem.

The hard truth is that automation re<julres very little maintenance.

A fourth argument te that those who hwe their Jobs to automation can be retrained and pot bito other jobs requiri higher skUte and paying more mmey.

Automation te noore likely to reduce than grease the nuinher of jobs requiring high Skills and illtuihto and besides, many peo{ are just not

antomatloB in one part of the country can find Jobs in other arena.

"The truth is that woikera thrown out ri jobs are usually jurt those who are least able to move. They are the lower paid, the older, the un-akllled.

. These misconceptions. . . , aw serving as deep tranquiU*. ers for those who either cannot or Win not (tome forward and grapple with tyhuman problems caused 1^ automa* / tlon.

As David Rockefeller told the International Management Counc: The one thing automation cannot do te to solvt the problem It is creating."

retrainabte because o their levels of tnteOlgence, education and age.

Still another mteeonception \te that worhars papiacad by

HYDROGEN PEROXIDE OKAYED IN MAKING CHAMPAGNE

The FelatUaship betwe i blondes and champagne, as ] has d(xie through history re curs again. The Ihtemal Re venue Service has agreed tha winemakers may use thre< parts of hydrogen peroxide pe million parts of wine to faclh tate secondary fermentation t the producUoa of dumifigr,,

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