Banner Graphic, Greencastle, Putnam County, 27 November 1974 — Page 4

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William Buckley Tax on oil imports, crisis solution

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OPINION PAGE

THE PUTNAM COUNTY BANNER-GRAPHIC, WEDNESDAY, NOVEMBER 27,1974

Letter to the editor

Puzzled by letter

To the editor: It is not in my habit to write letters to the paper, but I have been bothered by the commentary- of Mr. Eshelman on the recent play at Greencastle High School. I find myselt in the reiauveiy objective position of not knowing Mr. Eshelman or of his dramatic knowledge and of never having seen a production directed by Ms. Wharton (I have, however, recently become acquainted with her). Though not an authority on dramatic critiques, I am a theatre major and am bothered by some discrepancy in the article . First of all it puzzles me that Mr. Eshelman would express his pleasure in attending the show, saying, “It was truly deserving of the standing ovation it

received,” giving credit of the production to Ms. Wharton and then turning around and say how poor the play was and citing Ms. Wharton as not only the cause of this but derogatory to the students. It is questionable as to what is meant by his comment/‘when I see what appears to me, to be a community eyesore.” Is this in reference to the play, that was a “great pleasure” to attend? If not, I am sincerely hopeful that Mr. Eshelman would not be so unprofessional as to personally insult Ms. Wharton and lower his caliber of critique. Elizabeth Ogilvie Pi Beta Phi

Helpfulness goes noticed

To the editor: My friend and I just had to tell you what wonderful people there are in Greencastle and what an outstanding emergency room you have at Putnam County Hospital. Thursday afternoon my friend was following me from Greencastle to Indianapolis in a station wagon. When we turned onto the entrance ramp to 1-70 from 23 at the Cloverdale exit, my friend hit the corner of the intersection island where it jets out into the line of traffic. The point is allworn off and it looks like a pile of loose gravel there, but believe us, it is solid! She spun around and finally buried the front of the wagon in the embankment and the car was a total loss. Almost before I could get back to here, two men I had never seen were there to help us. The car was from the Murphy Bros, garage and when I got her back to town the

Murphy’s themselves and Ron Branham couldn’thavtbeen more wonderful or more helpful. The hospital was just unbelievable. Instead of waiting forever while they worried about their money, as we would have in most emergency rooms, they immediately went towork on her injuries. The staff in the emergency and Dr. Schauwecker couldn’t have done more for us in and in such a helpful way. State trooper R.E. Hunt even came to the hospital to help and a woman I don’t even know got me a cup of coffee while I waited and worried. Such helpfulness and friendliness in the world today just can’t go unnoticed and un-thanked. We are both so greateful and warmed by everyone’s kindness. Mrs. Bob Endly, Mrs. Bertie Hamedy Indianapolis.

Herewith my long-awaited solution to crude was about a dollar a barrel more the oil crisis. expensive than Persian Gulf crude before First, a little perspective. As recently as all the excitement. That differential was 1970, producers were paying the Persian owing to import controls. These were Gulf States about a dollar a barrel for oil. justified on the grounds that for the sake By 1973, before the embargo, this had of national defense, we had to encourage risen in response to what one might call local production. Those controls, needless natural economic forces, to $1.75. At that to say, have been anachronized. Now we point came first the embargo, then the charge a flat 18 cents per barrel on imhuge administered rise - to the present ported oil, a trifle, level of about $9.50. It is, under the circumstances, Meanwhile, on the home front, there is reasonable to assume that in the absence what they call “old oil,” and new oil. The of political manipulation, crude would be old oil was discovered before the embargo selling for about $5 a barrel. Let us accept and the price of it was controlled at $5.25, that figure for the sake of analysis, to which it had recently risen from $4. Congress should proceed to levy a tax on Figure a buck to transport a barrel from imported oil as follows. For every dollar the Persian Gulf to the east coast of the an American importer pays in excess of United States, and you note that U.S. the $5 per barrel, a tax should be levied of

one dollar. Thus, an importer paying the sumption of oil. price currently charged by Saudi Arabia, Ninety-five per cent of our imported oil which is $11.25 per barrel, would have to comes from the following countries at the pay a tax of $6.25 per barrel. This means following rate. From Canada, 25 per cent ( that Saudi Arabian oil would cost about 300 million barrels per year). From American importers $17.50 per barrel, Nigeria, 20 per cent. From Iran, 20 per which means that they would search cent. From Indonesia, 9 per cent. From frantically for cheaper oil. And that, of Saudi Arabia, 9 per cent. From course, is the purpose of the exercise: to Venezuela, 8 per cent. From Algeria, 5 per break down the cartel by exaggerating the cent. Canada is not a member of OPEC, cartelized price - by doing one’s best to but might as well be. She has slapped a price it out of the market. The objective, $5.25 per barrel export charge on oil, so as obviously, is to put a premium on to cash in on the bonanza. Very well, let’s cheapness. Those exporting countries that make that $10.50 - in effect, desire a large share in the American The point need not be elaborated. To the market will in effect have to bid for it. At extent that the consuming public abthe same time, the tax, which will be solutely has to have the oil, it will pay the passed on - necessarily - to the con- increased price for it. But the demand will sumer, discourages the profligate con- slacken, and when that happens, you will find Canada reducing its export tax. And you will find Nigeria's representative meeting a big American buyer on a part bench and whispering out a proposed deal The best wav to combat a cartel is to force it to go beyond the economic limit it is itself careful not to traverse. And supply a quick inducement to those who will break away from it in order to maximize income. There isn't an alternative that combines the effectiveness, and the sense of fairness, of this one. By now- we have come to terms with out extra-military incapacity to solve the problem. The suggestion that we should embargo the shipment of grain to the Arab States breaks down under scrutiny: they don’t need that much, and could get what they want easily, paying hard cash, from a fugitive exporter. No embargo of machine goods is likely to bind the west: someone will trade. Moreover, although it would be all the more effective if England and France and Italy and Japan joined us in adopting the identical approach, it is unnecessary that they should do so in order to make it effective: we import over a billion barrels of oil per year, so we are ourselves big enough to have an effect. As usual, the market system provides an elegant reply - even to the pressures of oligopoly.

Russell Baker

The corporals of industry

(c) 1974 New York Times News Service WASHINGTON --The idea that Americans might buy fewer cars if prices rose an average of $900 per machine apparently crossed no important minds in Detroit when the 1975 models were contemplated. It is an astounding fact, but what else can we make of the car tycoons’ surprised cries of dismay at discovery that their new models are selling like mink coats in Calcutta? The goose can be plucked only so thoroughly, and then you have to settle for pinfeathers. Instead, the car makers tried

for another mattress load. It makes you wonder what ever happened to good old American know-how up there in the board

room.

One hesitates to speak slightingly of high business, for its bishops tell us the corporate world is a place of mysteries impenetrable to the layman, and yet here they were, the leaders of the most quintessentially dynamic American industry, automobiles, unaware that you can’t pluck a naked goose. On the other hand, people who don’t understand goose plucking shouldn't be so quick to laugh at people who do.

Well, they have their reasons. Costs.had risen. Ijabor was more expensive, and raw materials, and pollution suppressors had to be paid for, and so forth. The old Detroit standards couldn't be brought in at an appealing price. So they brought

them in anyhow.

Did it occur to anyone to bring in something new, something less than the old standards? What about something basic? Why not a re-issue of the model T? Such questions make tycoons smile, and not without contempt. They betray a naive ignorance of retooling time, planning procedure, testing delays, design lag,

James Res ton

Ford’s premature summit

(C) 1974 New York Times News Service The Ford-Brezhnev meeting at Vladivostok was arranged - primarily at the urging of Moscow - at a particularly awkward time for the United States. It may be useful in introducing Ford to the mysteries of Soviet diplomacy, but there are at least three reasons why it is not likely to make much progress. First, the United States, Europe, and Japan have not agreed on a common policy toward the oil states of the Middle East or Soviet policy in that region. Second, the United States and the Soviet Union are deeply divided on the meaning of the U.N. Security Council Resolution 242, which was designed to esbtablish peace in the Middle East. Third, the U.S. government itself is divided on what it intends to do and what it expects the Soviet Union to do under the so-called policy of “detente.” There is very little chance that the Soviet Union will implement the noble principles of the last summit meeting between Nixon and Brezhnev unless the major non Communist nations stand

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together in the present economic and political crisis of the Middle East. Secretary of State Kissinger said as much in his brutally frank and brilliant speech at the University of Chicago before he left for the Far East. Lacking a common policy by the major oil consumers in North America, Europe, and Japan, he said, “even the hopeful process of easing tensions with our adversaries could suffer, because it has always presupposed the political unity of the atlantic nations and Japan.” “If current economic trends continue,’ Kissinger observed, “we face further and mounting world-wide shortages, unemployment, poverty, and hunger ... an economic crisis of such magnitude would inevitably produce dangerous political consequences. “Mounting inflation and recession... will fuel the frustration of all whose hopes for economic progress are suddenly and cruelly rebuffed. This is fertile ground for social conflict and political turmoil...” But the European nations and Japan, while agreeing on the principle of unity, have been doing very little about it, and the Soviet Union, despite its verbal support of detente and peaceful coexistence, still seems to feel that mounting inflation and recession, shortages?unemployment, poverty, and hunger weaken and divide the non-communist nations to the strategic and political advantage of the U.S.S.R. This situation is made worse by the Soviet interpretation of the U.N. peace and withdrawal resolution in the Middle East. The clear intent of that Resolution (242 Mas that the peace agreement and the withdrawal of Israel from occupied Arab territory should go hand-in-hand. Once agreement ivas reached on the problems of security, free passage through international waters, a just settlement of the refugee problem, and ^ the establishment of secure and recognized frontiers, Israel would then be obliged to withdraw roughly to the bor-

ders in existence before the Six Day War of 1967. But the Arabs, with Soviet backing, are insisting that Israel must withdraw first and try to negotiate later, and they are now supporting the Palestine liberation Organization in its demands for the creation of a secular, Palestinian state, which would mean the end of Israel as an Independent Jewish nation. In the face of these Soviet policies it is scarcely surprising that some influential members of President Ford’s own cabinet are wondering whether Moscow's terms fro detente are really leading to a new and better world order or actually encouraging disorder throughout the major non-Communist countries. There has been a tendency in Washington to assume that any agreement with the Soviet Union is better than no agreement at all. In support of this, it is noted that by holding up trade agreements and technology arrangements with the Soviet Union, Washington was able to persuade the Soviet government to release tens of thousands of Soviet Jews who wanted to emigrate to Israel. On humanitarian grounds this was obviously a gain, but the question is whether the United States should not have been insisting on a genuine and secure peace in the Middle East as a condition of its trade and technology, which Moscow obviously needs. Maybe Ford and Brezhnev will be able to demonstrate that they really got down to these basic questions at Vladivostok, but the chances are that they will not. The Soviets cannot be unhappy with the present drift of world events, particularly with the political and economic disarry in Europe. They have established the rule that all Communist or Socialist countries are off-limits for the U.S., but that the rest of the world from Southeast Asia to Cuba is an open hunting grpund for them.

marketing psychology. People who don’t understand the business shouldn’t ask dumb questions. If the car industry's troubles were an isolated failure of business skill, we might write it off as a misfortune in a quirky economy and pass on, but the landscape is becoming littered with corporate ruins, and one develops the uneasy feeling that good old American know-how is turning into don’t-know-how. On the Penn Central we had management that didn’t know how to run a railroad, and at Pan American a management that didn’t know how to run an airline. At Lockheed they didn’t know how to run an aircraft company even with the Pentagon’s sweetheart subsidy. At Franklin National we had banking don’t-know-how so vast it produced history’s biggest bank failure. Wall Street turned out to be lined with

brokerage houses that didn’t know how to run a brokerage house. At the Curtis Publishing Company they didn’t knowhow to run a magazine, and at equity funding they didn’t even know how to run a financial swindle. What has become of the businessman who had imagination? In most of these disasters we see executives meet trouble by plodding head-down along the predetermined courses that carried them into trouble in the first place. They seem frozen in immobility, shackled by corporate habit, capable of loud complaint, quick to charge the public more for less, eager to ask Washington for a bailout, and utterly empty of imagination. Thus the electric-power companies like Consolidated Edison are very good at the glum face and at telling us to expect only blood, toil, sweat and tears, but if anyone

in the industry has had an idea for stopping the rise in the price of electricitybefore it exceeds the monthly mortgage payment on the house, it is a secret well kept. Ideas may be stifled at birth somewhere in the lower reaches of corporate hierarchies. The only ones that seen to survive these days are very old indeed, for business’s response to hard times continues to be complaint, higher prices and government bailout, either through direct handout or tax relief. If this sounds churlish toward the boardroom captains they must understand that a person who has to pay more for their goods, and then pay more to the government to support their failures, and then sit still for advice that he will have to payeven more next year, and deserves to, because he won’t practice more selfdenial, is not a person likely to cheer his tormentors as heroes of industry.

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