Kennedy's Power Intertie Plan DealtStaggering Blow
MEDFOHD MAIL TRIBUNE. MEDFORD, OREGON
By A. ROBERT SMITH
Mail Tribune
Washington CorrponcUn4
Washington - The private
electric utility industry has
come up with a powerful one-
. IWO fUUI.ll
this past week
I that has all
I b u t knocked
out the Ken.
i nedy adminis'
tration's plan
I for building a
O. federal lone
distance POW'
er Intertie be-
smith iwcen the Fa-
cific Northwest and southern
California
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I The most telling punch was
landed in Los Angeles when
that city's Department of Wa
ter and Power announced that
it considered the best deal for
its millions of consumers to
be that offered by a group of
four private power companies
headed by Pacific Gas and
Electric Co., the West's larg
est utility, which is anxious
to build a private intertie
from the Northwest into its
own territory.
The city of Los Angeles Is
sued a statement of its confi
dence that the private intertie
proposed by PG&E "will pro
vide to us and to our custom
ers the greatest value per dol
lar of cost and the greatest as
surances of continuity of serv
ice." The significance of this dec
laration hit government and
congressional officials here
with considerable force, be
cause Los Angeles is the big
gest potential market for sur
plus Northwest power. There
has been a working assump
tion among private and public
power groups that the eco
nomic feasibility of any inter
tie rested on serving this
mushrooming market.
Several Years To Build
Reportedly, the private util
ities made Los Angeles the
kind of deal it couldn't turn
down, agreeing to start pro
viding power soon (long be
fore the intertie is actually
built) at a rate comparable
to what the federal govern
ment would charge. Since a
federal intertie would take
several years to build, this
would be a better deal than
Your Money's
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PAYMENTS PROBLEM LIKE A 'LIVER AILMENT'
(This is the last in a series of three columns
on Balance of Payments Crisis)
"You Americans have finally discovered you have a pay
ments problem much as a person discovers he has a liver
ailment. When you have a liver ailment, you have to follow
nmn Mn, of diet. It mieht very well be necessary," said
Dirr.pu,,i Srhwpllznr. for the U. S. to follow a diet to
nnii-ni its h;ilun'p nf navnicnta ailment.
This pointed comment was made publiciy for all the
world to hear a few days ago by the new managing director
nf tho Infnrnatlnnnl Monetary Fund - the nuge worm or
ganization created to maintain the stability of the currencies
of ils 85 member nations, including uie u. a.
Yes, Mr. Schweitzer, we discovered our grim ailment
back in 1HB0 when our foreign creditors came dangerously
close lo staging a run on our gold hoard, and in the fan
the then Treasury Secretary Anderson and Undersecretary
of State Dillon went on a mission to Bonn lo ask the West
Germans to lake over some of the cost of keeping U. S.
defense troops in Germany.
We realize that the stability of the dollar is in peril
because year after year, we are spending billions more
abroad than we are earning abroad, and as a result our
foreign creditors have built up Immense claims against
our gold reserves. We know that once war-devastated
foreign nations are now booming and have become
fierce competitors in our home market as well as else
where. We recognise that we cannot Indefinitely carry
the burden of defending and developing the free world
unless we grow a lot faster than we are now.
We are awake. On Monday, July 8, Sen. Paul Douglas
(D-Ill.) chairman of the Joint Economic Committee, will open
major hearings lo probe again into the problem and remedies.
"Soon," says Rep. Wright Patman (D-Tcxas), chairman of the
House Banking Committee, his committee also will hold hear
ings on this. What will the committees find out? What are
we doing to control our "ailment"?
Although we already export $4.5 billion more goods a
year than we Import, we are pushing a major drive lo ex
pand our Imports - by tax incentives and Insurance guar
antees to exporters, by educating U. S. firms on the oppor
tunities in the export field, by lough bargaining on tariff
walls, by world-wide promotion campaigns. The big pbslacle,
though, is the pathetic indifference of U. S. firms to selling
in foreign markets. Progress has been painfully slow.
Wc are trying to close tho great gap between what U. S.
tourists spend abroad and what foreign tourists spend here.
The record trek of American tourists abroad this year, how
ever, suggests we'll retreat before we advance on this front.
We are "tieing" 75 lo 80 per cent of our non-military for
eign aid lo purchases of U. S. goods and services-meaning
these dollars come right back to us. All overseas spending
programs are being scrutinized to see where we might cut
back. Another slow process.
We aro urging foreign countries lo open their own capital
markets so foreign borrowing in our market won't draw oi't
so many dollars, A long-term project Indeed.
We are creating an elaborate technical defense sys
tem for the dollar. The defenses are working, are
keeping speculators under wraps.
We are making a determined effort lo hold down
costs and prices here so that we remain competitive in
the world markets. Prices and wages abroad are rising
at a much faster pace than in the U. S.
We aro putting a floor under short-term interest rules lo
discourage the outflow of funds seeking higher earnings and
trying to stimulate our economy (via tax cuts) to the point
where our monclury authorities dare try the classical cure
for a balance of payments problem - high enough interest
rates to keep domestic funds at home and lo attract foreign
funds here as well.
We have made an unequivocal pledge, through President
Kennedy, not to devalue the dollar, and so far our creditors
believe him.
We arc acting. But as, the payments report in mid-August
will dramatize, our ailment goes deep. Controlling it will
take unrelenting concentration and a tougher "diet" than we
are on now.
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Los Angeles could get from
the federal government.
The second blow to the ad
ministration was a resounding
23 to 9 vote in the House In
terior committee in favor of
a proposal strongly pressed
by the utilities requiring the
Interior Department to re
frain from building any inter
tie outside the Pacific North
west unless it gets a special
bill through Congress to au
thorize such a project. The
implication of the proposal
was to make it impossible for
Bonneville Power Administra
tion and the Bureau of Recla
mation to execute their plans
for a federal line linking the
two regions without this com
mittee's consent - and since
the prevailing mood of that
committee evidently favors
private utility-built inlcrties,
it would compel BPA to ac
cept the private utility offers
to build the line.
tins action came on an
amendment sponsored by Rep.
Jack Westland (R-Wash.). Re
portedly the utility industry
got the coal industry and the
United Mine Workers to join
in lining up votes for the
Westland amendment, which
was attached to the pending
bill designed lo give the
Northwest first priority on
use of its own power.
Politics Involved
There is more California
polities than Northwest poli
tics involved in these devel
opments. California's local
public power agencies, such
as the cities of Sacramento,
Pasadena, Redding, Santa Cla
ra, Palo Alto, want a federal
intertie rather than one con
trolled by the private utilities
in order to be certain of get
ting a share of surplus North
west power at a modest rate.
Gov. Edmund (Pat) Brown
wants a federal line running
all the way to Los Angeles;
and California's Sens. Clair
Engle and Thomas Kuchel,
plus a number of northern
congressmen, want a federal
line at least into northern Cal
ifornia where local public
agencies could have access to
it.
The Northwest's chief in
terests in the whole question
of an interlie with California
are not seriously jeopardized
by these developments. The
chief objective is to secure
markets for surplus Columbia
river power, to sell that ener
gy in order to diminish or
wipe out recent Bonneville
deficits and thereby avoid the
necessity of Bonneville in
creasing its prevailing power
rates for all Northwest cus
tomers. A private intertie to
Los Angeles can serve that
objective aboul as well as a
federal interlie, and certainly
with greater dispatch.
Minimum Wage
Policy in Effect
Portland -' (UPD - ivliniuium
wage standards for Oregois
hospitals and homes caring for
convalescents, the aged, and
children have been increased.
The increase, adopted recent
ly by the Wage and Hour
Commission, went into effect
Monday.
The minimum for experi
enced workers in hospitals and
nursing homes will advance
from 65 cents lo 90 cents an
hour. Homes for the aged and
child care agencies will have
a wage floor of 85 cents an
hour.
Workers with less than 200
hours experience will be paid
a minimum of 70 cents an
hour in hospitals and nursing
homes, and 65 cents in homes
for the aged and children.
There will be an increase to
75 cents for the second 200
hours of work experience in
hospitals, nursing homes and
aged and child care homes.
Duncan To Be One Of Dunes Visitors
Washington-JUPD - Six mem
bers of the Senate Public
Lands Subcommittee will visit
..!. Oregon Dunes area Satur
day, according for the com
mittee. Rep. Robert Duncan (D
Ore.) also is scheduled to go
with the group.
Committee members mak
ing the trip are expected to
be Sens. Alan Bible (D-Nev.),
the subcommittee chairman;
Frank E. Moss (D-Utah), Quen
tin N. Burdick (D- N. D.), Er
nest Gruening (D-Alaska), Len
Jordan (R-Idaho) and Milward
Simpson (R-Wyo.).
The group will arrive in
Portland aboard an Air Force
plane Thursday evening and
fly to the Coos Bay area on
the next day for an all-day
inspection of the proposed
Oregon Dunes National Seashore.
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JJIUILY 4ttM
Nvw U IW'U.laMlt II
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Watch for Advertisement in Mail Tribune of July 4th for This Week't
List of Food Buys
PEN
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