The Cincinnati Enquirer from Cincinnati, Ohio • 1

INCINNAT SINGLE COPY 15c Home Delivered 6 Days 75c 131ST YEAR NO. 129 FINAL EDITION MONDAY MORNING, AUGUST 16, 1971 Surcharge Imposed On Imports 3rice Freeze raers nn Vwtn REM W7- Asks Cut In Income, Car axes AT A GLANCE WASHINGTON President Nixon imposed a 90-day freeze Sunday night on all wages, prices and rents, asked Congress to cut taxes by $6.3 billion this year and acted to permit devaluation of the dollar in some international trade. Calling on the "greatness in a great people" to make his broad program work, Mr. Nixon spelled out his new plan to revitalize the sluggish economy in a hastily arranged radio and television address after a weekend of deliberations with his top advisers in the solitude WASHINGTON UP) Here at a glance Is what President Nixon said Sunday night in his address to the nation: "The time has come for a new economic policy for the United States." He is freezing all prices, wages and rents for at least 90 days. He is inviting the world to devalue the dollar.

Effective at once, the United States for the indefinite future will not buy gold at the $35-an-ounce price fixed in the 1930s, leaving the dollar to find its own level in relation to foreign currencies. He hopes his actions will initiate global consultation and negotiations to reform international monetary arrangements in effect since the mid-1940s. All imports will be subject to a temporary surcharge, generally 10. He is recommending that, effective Sunday, the 7 excise tax on automobiles be repealed so that the average price per American car would be reduced by $200. Urged Congress to advance by one year the increase in personal income tax exemptions that otherwise would not take effect until January 1, 1973.

Asked Congress to grant industry, effective Sunday, an accelerated investment-tax credit of 10 for one year, and a 5 permanent rapid tax writeoff after the first year. He plans to cut federal spending by $4.7 billion this fiscal year, and reduce federal employment by 5. He has ordered a 10 cut in foreign economic aid. of his mountain retreat at Camp David, Md. He said the time had come to act to create "a new prosperity without war" and to eat away at the problems that threatened the nation's prosperity a doggish inflation rate hovering around 6.6 a year, a stubborn unemployment rate of nearly 6 and an international attack on the dollar by those who felt it was over-valued and vulnerable.

"We are going to take that action, not timidly, not half-heartedly and not in piecemeal fashion," the President said. "We are going to move forward to the new prosperity without war as benefits a great people all together and along a broad front." Althougn he did not mention it, Mr. Nixon's actions were designed too, to defuse the issue which Republicans and Democrats alike see as the foremost threat to his reelection next year. In so doing, he reversed policies emphatically spelled out June 29 by Treasury Secretary John B. Connally Jr.

TO THE AVERAGE American, Mr. Nixon's program meant: no increases for at least the next 90 days in wages, even if one was scheduled; no increases in most prices or in rents; an increase of 10, and perhaps more, in the price of most imported goods and if Congress goes along fewer dollars withheld for federal income taxes from paychecks and a 7 cut in the price Text of speech, reactions of bankers, economists, please see page 35. of new cars. Businesses will benefit from other tax cuts designed to stimulate employment. In addition to the wage-price-rent freeze which will go so far as to forbid price and wage increases already decided upon but not put.

into effect, the President: In effect, allowed the value of the U. dollar to float in its relation to other currencies. The effect of this is expected to be a de facto devaluation meaning it will require fewer German marks, French francs or Japanse yen to buy a dollar than It now does. Imposed an immediate 10 surcharge in effect, a duty on about one half of all the goods imported into the country. This step was aimed at bringing reins on the flow of dollars aboard by increasing the prices of imported goods.

The country imports about $45 billion worth of products a year and sells that much abroad. CALLED ON Congress to enact a $6.2 billion tax cut, including a speed up of the income tax cut already scheduled to go into effect January 1, 1973 which will increase the personal exemption to $750 and the standard deduction to a maximum of $2000. It would go into effect next January 1. Included in the proposed tax measures were the elimination of the 7 excise tax on new cars, expected to save the administration will solicit advice from all quarters on how to accomplish a "transition from the temporary freeze to the restoration of free markets without inflation." LARGE WAGE increases negotiated in the copper, steel, and rail industries, among others, which have not yet gone into effect will be blocked during the 90 day period. So will announced price increases not yet put into effect.

But interest rates and farm prices will not be affected by the freeze. Few other exemptions if any were anticipated. The freeze is to be administered Policy Change Averts by the Office of Emergency Preparedness, which has a payroll of only a few hundred, underscoring Mr. Nixon's determination to keep it a short-term operation and to avoid creating a huge bureaucracy comparable to the Office of Price Administration in which he served as a young lawyer during the World War II era. AS FOR THE TAX cut which he will ask Congress to approve, Mr.

Nixon said it was necessary to reduce federal spending by an equal amount "to check the rise of inflation." The tax cuts will stimulate investment that will lead to creation of enough new jobs to meet the demand of young men and women who will be entering the work force in the years ahead, the President said. He said he felt the changes represented "a reordering of our budget priorities." Turning to America's economic troubles overseas, Mr. Nixon said: "We must protect the position of the American dollar as a pillar of stability around the world." The only winners during monetary crises, the President said are "the international money speculators, because they thrive on crises and help to create them." Therefore, Mr. Nixon said he would suspend the convertability of the dollar, except where in the best interests of the United States. Mr.

Nixon discounted the "bugaboo of devaluation" and said domestic prices would be no different for most consumers. The cost of imported goods would be higher, he conceded and the dollar would buy less for tourists traveling abroad as a result of his decision. But the primary effect would be to stabilize the dollar and protect international trading partners and "our friends around the world," he said. "The United States has long been a forward looking and trustworthy trading partner," Mr. Nixon said and called for help from other countries in setting up a new international monetary system.

Rep. Wright Patman action was needed pointed in the wage-price freeze announced by Nixon. "Wages and prices are wymp-toms, not causes of inflation," Friedman said. "They've never done more than repress the symp-tons of inflation. People will find ways whereby wages and prices will be changed." Friedman said he agreed with the tax and spending cuts alth-pugh the 10 surcharge on imports was not desirable.

"I think on the whole Mr. Nixon has done a fine job on the economy, and from my point of view, I think he backslipped i Friedman said. "I realize he is under enormous pressure." The Weather Partly cloudy and cooler today with highs in upper 70s. Weather and Detailed Map, Page 22 Congressmen Give Bipartisan Support Election Year Analysis tend to the cost of supermarket items, which change price so frquently that it would be difficult to determine a fixed level for them. But it probably will affect "big ticket" consumer goods, like automobiles and refrigeratos.

The jHiesiGen also said he would ask Congress to repeal the 7 automobile excise tax and that he would insist that the carmakers pass the savings of about $200 per car along to consumers. The acceleration of the $50 increase in the personal income tax exemption will mean a slightly smaller tax bill for everyone when tax returns are filed before April 15, 1973. The President's decision to suspend temporarily the full converta-bility of the dollar into gold and to permit its value to fluctuate in international money markets is, in effect, a devaluation of the dollar. The dollar has been taking a pounding on foreign money mar AP Wirephoto President Asks Help "prosperity without war" car buyers an average of $200 per car or $2.3 billion a year and give Detroit a shot in the arm and an investment tax credit which will reduce business taxes by $3 billion this fiscal year and somewhat less in future years. Businesses would be permitted to substract 10 from their corporate Income taxes this year and 5 in future years to write off the cost of new equipment or machinery.

The purpose is to induce businesses to modernize and expand thus creating jobs. To offset the government's loss of income from the tax cuts, Mr. Nixon said he would trim the federal bureaucracy by 5, postpone a scheduled $1.3 billion federal pay increase, and ask Congress to delay kets for the last month and already has slipped in value in comparison to the West German mark, the Swiss franc and other "hard" currencies. Mr. Nixon emphasized that this move was a defense against speculators, but it also was an acknowledgement that the dollar at present is overvaluel.

The President noted that his action, coupled with a new 10 import surcharge, means Americans 'will pay higher prices for imports and that the dollars carried by American tourists will not go as far abroad. He also pointed out that the changes will not affect prices for domestic goods. This is certainly true, but with imports making up a farily large percentage of the average individual's purchases, it will mean a lsight increase in the cost of living. The President's decision to cut taxes, combined with a $4.7 billion reduction in federal spending means a further shift in the nation's priorities from public to private spending. "James L.

Hamilton," piloted by Capt. D. M. McMahon. A SECOND TUG.

the "LaSalle," pulled along side the barges at about Coney Island to assist in navigation, Coast Guard Lt. Cmdr. Marvin Bromen said. There were no other boats in the area except for the cruiser, Commander Bromen said. Visabili-ty was good and both the cruiser and the barges were unusually well lighted, the Coast Guardsman said.

"There was nothing to hinder the boats. The cruiser simply veered across the path of the barges," Bromen said. "There was absolutely no action the barge (operator) could take to avoid running over (the cruiser)," Bromen said. "The boat went underneath the barges and came up part way back. The a stopped pretty quickly, and in doing so they were able to rescue three children who otherwise probably would have drowned." Witnesses on shore said McMahon blew the tug's whistle and flashed a searchlight on the cruiser for some time prior to the collision.

McMahon was credited by Bromen with jumping into the water as soon as beached the barges and with saving the life of one child. for a year Mr. Nixon's costly proposals to share federal revenue with the states and cities and his welfare reforms which could make benefits available to up to 12 million people not now eligible for relief. He said these measures would trim $4.7 billion from the current fiscal budget. "The time has come for decisive action, action that will break the vicious spiral of wages and costs," Mr.

Nixon said. But he said his program would not be easy: "It calls for the greatness in a great people." He said his three economic calls are to create more jobs, to halt the inflation which has dogged his administration and to protect the dollar in international trade. Mr. Nixon's most dramatic action, the wage-price-rent freeze, will go into immediate effect and last until November 16, 1971. Administration sources, however, held out the possibility it might be extended if the President felt it was necessary.

They said the administration expected voluntary, co-operative compliance but pointed out that the Economic Stability Act passed by Congress in 1970 provides fines of up to $5000 for violators. Because of the essentially voluntary nature of the proposed freeze program, there were no immediate answers to questions of detail which immediately began flooding into Washington. Some degree of clarification Is expected Monday in a news conference to be held by the Treasury, and in responses to questions to be posed to others officials. But the mechanics of the Nixon freeze program remained largely uncertain Sunday night. While the freeze is in effect, a new committee created by Mr.

Nixon and headed by Secretary Connally, the Cost of Living Council, will consider the next step in the battle against inflation. "We don't know yet" what will follow, an administration official told reporters at the White House. He said during the 90-day period Crash Authorities have not yet determined who was piloting the cruiser or why it veered sharply in front of the barges. LATE SUNDAY, Roy Partin arrived to help the search for the six victims, including his wife and two sons, and quoted his daughter. Terry, as saying Hundley owned the boat and was at the wheel when it crashed.

(He missed the outing because he was en route home in his truck from Pittsburgh when his wife and three children boarded the cruiser for the day.) Scuba divers from New Richmond and Pierce Township began searching for survivors or bodies early Sunday. They left before noon because pleasure boats endangered the divers. CAMPBELL COUNTY and Kentucky State Police underwater teams were reported at the scene Sunday afternoon. Early reports Saturday wrongly indicated two or more pleasure boats had been hit by the barges. Bromen said this probably happened because private boats took survivors to more than one spot on the river bank and police and ambulances were called to more than one location.

ove In WASHINGTON (UPI) President Nixon's bold and sweeping change in economic policy was a tacit admission that his 30-month-old "game plan" had failed to achieve lower unemployment, less inflation and a balanced budget. The wage-price freeze, tax cut, increased import duties and de facto devaluation of the dollar all were steps he had rejected earlier. That he adopted them was an indication of the seriousness of the nation's economic problems. With many Democrats predict ing the economy will be their most potent issue against Mr. Nixon in his expected bid for a second term next year, the President apparently decided it was better to change Course now than to wait until the election campaigns swing into gear.

President did not spell out the enforcement procedure for the wage and price freeze. Since it will last only 90 days, it probably will have little effect on the average wage earner's paycheck. The freeze Is not likely to ex- 1 Dead, By JIM HATTON and JOE PHILLIPS Enquirer Reporters Authorities searched the Ohio River Sunday near New Richmond, Ohio, for six more victims of a cruiser-barge collision that threw three families into the water. Only one body was recovered in the 24 hours since the disaster about fdur miles downstream from the marina at New Richmond where the cruiser anchored. Scuba divers from the Cincinnati Fire Department off-duty volunteers and from Highland Heights, concentrated their probing of the muddy bottom where clothing and other contents of the boat were found.

A Red Cross team from New Richmond brought in searchlights and the hunt for the victims was to continue early today. The collision at 10:10 p. m. Saturday slammed the 26-foot cabin cruiser and two-tug 15-barge tow together head-on as the tow moved toward New Richmond, a Coast Guard official said. The impact shattered the cruiser which popped up like a badly chewed cork in the throbbing wake of the two tugs.

6 Lost In River WASHINGTON (UPI) Senate Democratic Leader Mike Mansfield Sunday night hailed President Nixon's imposition of a wage-price freeze and other steps to combat the nation's economic ills as "harsh but very necessary measures." "I'm deiglhted that his patience has finally run out," Mansfield told a reporter shortly, after Nixon addressed the nation. "I'm pleased he is facing up to the realities of the situation." Mansfield said that' he wished Nixon had taken the steps earlier, "but there's an old saying, 'Better later than Nixon's announcement came during Congress summer recess when nearly all lawmakers were away from Washington. REP WRIGHT PATMAN (D-Tex.) chairman of the House Banking Committee and cochairman of the Joint Economic Committee, said from his home in Texarkana that "I'm certainly glad he is taking some action. "Action was needed and it was needed quickly," Patman said. "Certainly something will be done from this and I think it will be constructive." Sen.

Jacob K. Javits a ranking member of the Joint Economic Committee, said in a statement from Aspen, that Nixon's plan is "bold and welcome." Javits said that without the wage-price-dividend freeze, "we were blindly rushing to national economic disaster." Javits was one of a dozen Republican senators who a week ago last Wednesday introduced legislation that would have set up tough new wage and price guidelines. Sen. Robert C. Byrd No.

2 Democrat in the Senate, said that "something had to be done and the steps being taken by the President represent an attack on a very broad front." Byrd said that he believed Nixon would have, in general, bipartisan support for his program. AMONG ECONOMISTS the reaction was mixed. John Kenneth a 1 a i a member of the Kennedy administration, said the wage-price freeze was "sound policy." he added: "I the government puts Its heart into enforcing the price freeze and goes on to work out permanent controls there's no doubt this will benefit the consumer." Galbralth said, however, that the import tax would reverse the general 30-year tendency to lower tariffs. In Chicago, economist Milton Friedman said he was very disap- One person is known dead; four persons were rescued. INFORMATION about the persons on the cruiser, listed only as OH 5421 NC, was still limited Sunday but authorities had determined the following: Dead is Lawrence Redmond, 29, believed to be from Sharonville.

His w.fe, Donna, is still missing. Mrs. Wilma Hundley, 36, of 7647 Wendell West Chester, Ohio, "ow has right-oway" Coast Guard says, please see page 33. remained in the intensive care unit of Bethesda Hospital. Her husband, Russell, 37, said to be the owner of the cruiser, is missing, as is their son.

Terry, age nine. Two other Hundley children, Gary, 15, and Larry, 11, were treated at Mercy Hospital, Mariemont, and released. Mrs. Mary Partin, 44, of 1008 W. Main Loveland, and her sons, Artie, 15, and Randy, eight, are missing.

A daughter, Terry, 12, was uea.ea at Mercy Hospital and released. Mrs. Partin's husband Roy was not on board. Officials said the American Barge Line barges were being pushed upriver from Evansville, to Pittsburgh, by a tug, the Page Page Action Line 23 Editorials 8 Amuse. 18, 19 Graham 23 Bridge 11 Horoscope 10 Business 59 Horse Sense 11 Classified 35 51 Jumble 10 Columnists 7 Society 26, 27 Comics 16 Sports 53-58 Crossword 8 TV-Radio 29 Dear Abby 25 Women's 25-29 Deaths 35 Word Game 28 Kentucky News 33, 34, 57.