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‘Page 4, The Herald, Tuesday, November 29, 1573

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losing steam
SOPTAWA (CP) — The
épuntry’s economy leat some
« its steam in the third
quarter of this year and
Chbinet and opposition
H earn alike said
londay they do not expect
réal growth to meet the
government’s four-per-cent

target,
-:Statlatics Canada reported
Monday that output of goods
and services, as measured
ty the gross national product
aes grew jin real terms
.6 ent on an annua
tesla during the months July
to September.
“This compares with ex-
pansioata4.4-per-centrate A.S.
in the second quarter and 2.8 Sinclair Stevens, the
per cent in the first quarter. Progressive Conservative
Increased personal finance critic, said growth
ipending asd more in- would have to hit a real
yestment in business and annual rate of 12 per cent in
machinery and the final quarter for the
equipment accounted for country to average four per
much of the expansion. But cent this year.
the th was weakened by But, he added, prospects
declines in government for the last three months of
operating expenditures, 1978 appear dim and the
other investment in con- government seems to be
struction and business in- preparing the country for the
ventories, worst in 1979 by continually
The total output of goods pointing to the slowdown in
and services In annualterms the U.S. economy.
was valued at$235.9billionin statistics Canada said
the third quarter, up froo growth in the third quarter
$229.8 billion in the second effected a return to the
quarter. . weak pattern of consumer
Statistics Canada said the and business demand in the
economic growth in the economy that has been
quarter = represen apparent since early 1977,
‘“eontinuation of the ts same y

‘7 with the exception of the
moderate advances begun second quarter this year.
late in 1977. Last year, the = personal spending on
annual growth was 4% goods and services rose at an
relativelypoor 2.6 per cent. annual rate of 3.6 per cent in

The federal agency also the third quarter, in part
anid there was a moderation reflecting the impact of a
of domestically-produced temporary cut in retail sales
inflation, with prices rising taxes in most provinces.
at an annual rate of 6.8 per That cut ended in most
cent in the third quarter, provinces in October.
down from 6.8 per centinthe = The strength in consumer
gecoml three-month period. demand was largely in

The figures were released purchases in durable and
just after Finance Minister gemi-durable goods, such aa
Jean Chretien told a federal. gutomobiles, major home
provincial premiers’ con- appliances, furniture and

nce on the economy that clothing and recreational
real growth this year will be equipment.
at best four per cent, At the Some of the increased
outset of 1978, Chretien had spending may have reflected
been predicting five-per-cent consumer decisions to buy
expansion. while sales taxes were dawn.

Shegresataageias

Later, Robert Andras, ap-
pointed last Friday to head a
cabinet council on economic
development, said ihe
growth rate this year will be
below four per cent.

But he expressed op-
timism for 1979, while adding
a word of caution that
forecasts are “always im-
precise as hell.” Improved
exports and more business
investment should brighten
the outlook next year, An-
dras said.

Chretien has predicted ex-
pansion next year of between
four and 4.5 per cent despite
an economic slowdown in the

EDITOR'S JOURNAL

By Greg Middleton

Do you have any favorite records, discs you

really like? If you do then the best advice is not to
y them.

I had coffee the other day with a record
distributor's sales manager. He said that if you
really like a record, you shouldn’t play it because
by playing it you wear it out. He toid me that
records weren’t really made to be played much,
After sixty or seventy times on the turntable the
average record has lost its clarity.

Ina way, it makes sense. After all, when you
play a record you are dragging a rock over it.
Your stylus, the needle, is a jewel but it is still a
stone and it wears down the fine variations in the
grooves from which the music is reproduced.

That doesn’t mean you should sit in silence
though. This fellow suggested that taping a
record as soon as you buy it and then playing the
tape would both preserve the recc:d and allow
you to listen to the music. An ad<e¢ svantage is
that you get a little better sound as the
rerecording should take out a iew of the almost
imperceptible flaws in the record.

There are distortions in your records ara
North American recordings don’t hold a candie
to the better European records as any real music
buf will attest.

And what of the direct to disc records? Unless
you have a good system, one that set you hack
better than a grand, don’t waste your money.

You won't be able to hear the difference. lf you
do have a good sound set up, then try direct to
disc, but if you really want the best sound ther
remember not to play the record. Direct to aisc
gives you superior sound because it eliminates
the initia] taping and rerecording. As the extra
quality of the sound is there, it will also disap-
pear as the record deteriorates through playing.

“My son Michel threw my copy of the budget proposals into. the fireplace —
_ [didn’t even know he could read!”

“$tt:

THOMAS ATRILL THINKS

We should buy Canadiat ie

inducement to buy Iron-Curtain; quality is
inferior, workmanship is reminiscent of our
early days hand. manufacturing and |
shudder to think about the availability of
parts. Looking over the several sizes of

Did you know that we buy tractors from

Russia?

A few years ago, we imparted our first
Russian tractors. They were slow to catch
on and were baught mostly in the prairie
provinces. They are now available at your

tocal dealer's establishment.

1 do not buy Communist-miade goods.
have my reasons and | am firm in that
decision, However, { am intrigued by this

evidence of increased trade with Iron
Curtain countries. Why, for example, do we
buy a product that is produced in abundance
in Canada? Is the quality better; or the
price? How do such goods compare with,
say, Japanese or West German products?
The (limited) Atrill. report follows:

Price seems to be the biggest inducement
to buy Communist. Prices on all products,
whether shirts or machines, are usually 30
per cent below prices of Canadaian-made

_ goods. | have been able to observe no other

tractors, | was amazed at the combination.,.,....|
. of.old and new. Hand painting of parts, for *:..,.}
example, and a modern diesel engine. Tires--- -

were accidentally painted with yellow and
then repainted black, by hand. Castings
were generally unfinished. Thick paint is
used to cover imperfections. Sheet metal is

poorly fitted.

One of my brothers drove a large Russian
tractor tor an Alberta farmer. He monkey: .
wrenched and awaited parts and fought
with it for several weeks, finally refusing to
use it. By contrast, | have a Massey-Harris
that is stil! in top running condition after 25

years of use.

Anyone who buys a Communist-made

product, deserves it.

Se Cab cece

1 flew.

_ QE CAPITALIST BASE

Americans losing control

WASHINGTON (CP) —
Americans, long the
world’s premier
capitalists, are
to feel thay are being
bought out by foreigners.

It shows in disgruntled
comments from farmers
whose land is being
purchased by Japanese
interests, the concern by

some senators about Arab -

ownership in U.S. airlines

and federal government

resolve to crack down on
foreign banking.
Foreigners now control
such products a5
Erylcreem, Pepsodent
toothpaste, Libby’s beans
ard SOS pads, German

investors own the highest -

building in Houston,
Texas, and the Beak of
Montreal is takin over
most of the rvtail be .iaes
of Banke. "cus:
Gelling os wedle on
eaaelly regis e Dilioms
nf dalle. oct pouring into
the CLiied oes is dif-
Newsweek
magaiins recently
estimated that Canadians
alone have put $450 billion
into Florida real estate.
A government estimate
soys foreigners probably
own leas than one per cent

cf U.S, farmland, but the

House agriculture
committee feels they are
buying up many of the

farms now changing
hands.
A government survey of

direct foreign investment
in industry and securities
shows foreign holdings

ped to $911 billion in
1977 from $175 billion five
years earlier. Morgan
Guaranty Trust Co. of
New York, a leading
broker helping the
foreigners invest, says
current investments from
abroad are. about five
times the rate in the
10008.

Last week, a Morgan
Guaranty executive told
the Senate subcommittee
of citizens’ and
shareholders’ righta that
three Arab oil companies
used the firm to put $2.2
billion into American

a

Abu Dhabi, the tiny, oil-
rich Middle East nation,
mow owns between one
and 2.5 per cent of the
common shares in four
U.S. airlines. Because of
their scattered ownership
among thousands of

investors, a one-
per-cent holding can

represent a significant
ence,

(Dem.
Ohio), subcommittee
chairman, expressed
concern over foreign
holdings and said in-
vestigations will con-

a

The Arabs are the most
visible investura but
aren't the leaders.
Newaweek identifies the
Dutch, operating throug)
such giant multinationals
as Royal Dutch-Shell, 23
the biggest. Then come

the British, the
Canadians, the Germans,
the Swiss, the French and
the Japanese,

It shows in such
products as Nestle of
Switzerland, Seayrams of
Canada and BASF of
Germany, as well as
through immense per-
sonal holdings by in-
dividuals, such aa ‘the
baron Guy de Rothschild
of France,

New York City, after
losing corporate
headquarters by the
dozens in recent years,
has now become the site
for nearly 70 branches of
foreign banks.

The devalued dollar,
which makes it cheaper
for foreigners to buy into
the United States, is the
most obvious reason for
the influx of forelgu In-
vestment. But potitical
uncertainty in Europe
and a feeling that the
United States ig still the
world's strongest
economy, despite
problems, sre potent
influences.

Generally, fereign
investors are welcomed
by the U.S. government,
although their activities
are aboul fo come under
closer scrutiny.

Through a waiver in -

iramigration lays,
anyone with $40,000 to
invest ean enter the caun-

Bui farmers are
critical, As therr land +s

bought, they complain
about everything from
possible future enemy
appropriation of food
aupplies to escalating
land prices that ‘hurt
young farmers. .

A case in point Is Queen
Anne's County, in
Maryland, just outside
Was on. About $6.2
million in forelgn money
has poured in this year to
buy the county's best
wheat, soybean and
cornfields.

In a county where even
the parking meters are
inted red, white and
lue, people are uneasy.

“The land is disap
pearing,’ says Robert
Wilson, president of the
Queen Anne’s Farm Bu-
reau. “It’s creating 6
problem for younger
farmers to ever be able to
buy land.”

Concern like this led
President Carter to signa
bill this fall requiring
disclosure of farm
lwldings by toreign in-
terests. If the proportion
is significant, it could
lead to the imposition of
restraints by Congress.

In addition, Carter has
signed an international
banking act which will
permit the government to
supervise foreign banka—
financiers for many for-
eign interests—and set
reserve requirements for
all foreign bank branches
operating in the United
States.

Lott

OTTAWA OFFBEAT

BY RICHARD JACKSON

The Budget presented im
the House of Commons on
Nov, 16 contains very good
news for ous area of nor-

thwestern B.C. .
4 Finance Minister, Jean

| Chretien has done an ex-

cellent job of balancing the
need for stimulation of the
economy — particularly in
areas outside of “central
4 Canada” — with the equally
+] pressing need to keep the lid
“on inflationary pressures.

i The goal of the Budget is to
fF cuntain cost increases in this

period following the removal
of wage and price controls
and to allow Canadians to
take full advantage of .the
A recent improvements in our
international competitive
position,

the regions.

There are a number of
3 Budget measures
specifically designed to
a promote economic diver-

B developed areas of our
A country, and some of these
have particular importance
for Skeena. =. s.,
S Perhaps the single‘'most

important measure -for “our
area is the allowing ‘of costs
related to the development of
new mines to be 100 percent
tax deductible. This is up
from the previous level of 30
percent, and should be a
major incentive to the
development of a number of
mines in our area which are
currently of a marginal
nature.

Another important
measure is the allowance of
the costs of social assets and
townsite facilities to be

| partigily tax deductible. My

informatich on this subject is
only preliminary at this
early date, but 1 am hopeful
that {tams: such as satellite
telecommunications
facilities may be included in
the category of ‘‘social
assets’.

The mining incentives,
along with other tax changes
such as incentives for in-
vestment in pollution control
equipment, tax credits for
expenditures on  tran-

; sportation equipment, ,.and

Ae

e ingreage of. the .in-
We tment lak. ore shiuld
aid in our efforts to expand
and diversify our northern
B.C. economy.

. The Budget should mean
an increase in economic

It is above alla Budget for,

sification into the lesser -

activity inourarea, andl am
hopeful that other measures,
such ss the ' special
provisions for small
businesses and assistance
available through the
Department of Regional
Economic Expansion, will
produce more locally based
and locally controlled in-
dustries. Such companies,
particularly in secondary
industries, create the jobs
and give us the economic
stability that encourage
community development as
weil.

One aspect of Mr.
Chretien's speech, while not
directly a part of the Budget,
was the report he tabled
comparing the tax systems
af Canada and the United
States. This study was
conducted, in consultation
with American officials, in
response to recent reports
about comparative tax rates
in the two countries.

The strong conclusion is
that the Canadian personal
tax system compares moat
favourably with that of the
U.S. It also shows that our
business taxes are fully
competitive with their
American counterparts.

To cite one statistic, the
study shows that in Canada
personal taxes equal 15.17
percent of personal income,
whereas in the U.S. personal
taxes equal 15.99 percent of
personal income,

There are other Bdget
measures of benefits to in-
dividual taxpayers, such as
the lower U.LC. premiums, a
doubling of the employment
expense ‘allowance to $500,
and reduced prices for many
consumer goods ‘(including
cars, televisions and ap-
pliances) through the
reduction in the federal sales
tax, There are also st
which will be of specific
interest to certain groups.
These include the removal of
the 10 percent excise tax on
marine engines and small
aircraft, as well as changes
affecting some owners of
Registered Retirement
Savings Plans.

For further information on
any of thé proposals con-
tained. in the new federal
Budget,"or to provide me
with your comments, please
‘write to me care of the House
of Commons, Ottawa, On-
tario (K1A 0X2), No postage
is required.

Air space battle
a childish game

' SINGAPORE (Reuter) —  thorities are not prepared to

A row over air traffic bet-
ween Singapore and
Malaysia has all the over-
tones of a deep-seated family
feud.

Many outsiders are baffled
over the public display of
mutual mistrust between the
two countries: whose
economic welfare and
security have been closely
linked since they ended their
political union 13 years ago.

But Singapore and
Malaysian officials say the
trouble is only part of a hard
bargaining process and that
the two states will never
allow the problem to mar
their friendly relations.

The quarrel over revision
of their air services
agreement is the latest and
the most serious row in
recent years between the two

» countries that once were
considered indivisible,

Although the civil avialion
talks have reached an im-
passe, officials here and in
Kuala Lumpur are confident

. that it is only a question of
time before the problem is
settled,

’ . The néw. ations on the air
pact, signed by Malaysia and
Singapore when they dis-
mantled their jolnt airline in
1972, began almost 30 months
ago.

The sixth round of talks
between the iwo countries,
which naw operate separate
national carriers, ended last
month without agreement
but they decided to meet
again in January,

At one stage, Singapore is-
sued an ultimaliuim to cut the
number of Malaysian Airline
Syateins (MAS) flights to the
island republie starting Nov,
1, if a solution wor rot

reached. Malaysia
threatened counter-
measures.

Only a last-minute com-
promise to leave things as
they were until a final
solution was found avoided
an Immediate crisis.

Singapore seeks more
flights to Malaysia as a

means of correcting the -

disparity in earnings of MAS
and Singapore Airlines

““ER1A}, but the Malaysian au-

meet all its requests.

Malaysia wants to use a

widebodied, 250-seat airbus
.on the MAS flights to and
from Singapore—a point
Which Singapore does not
want to concede without
reciprocal benefits.

Aviation sources estimate
that the earnings gap this
year could reach about $18
Taillion in favor of MAS.

Singapore expects to earn
about $15 million, against
MAS's $32 million.

“It is not feasible to expect
Singapore to put itself at an-
other commercial disad-
vantage without any com-
pensating advantages being
given,” says the influential
English-language Straits
Times

“There should now be a
fresh look at the whole
spectrum of civil aviation
relations between the two
countries,”

Malaysian Transport

Minister Tan Sri
Manickavasagam told
parliament recently that
Malaysia would be
reasonable | in the
negotiations. Singapore

team leader Sim Kee Boon
also toned down his earlier
Temarks and said that his
country Is willing to accept
Teality and allaw MAS to
operate airbuses.

“Now we want to see in
what other areas we can
trade off, We can do a deal,'’.
Sim says,

SIA earlier suffered a
setback when a new London-
Singapore Concorde service,
operated jointly with British
Airweys, had to be cancelled
following Malaysta’s refusal
io allow the aircraft to fly
over its air space,

Malaysia cites en-
vironmental reasons for its
objection. But it is widely
believed that Kuala Lumpur
withheld permission for
Concorde in an attempt to
gain more flights into
London for its natianal
carrier. ;

Negotiations between
British Airways ‘ and
Malaysian authorities are
‘continuing.