News stories from Saturday August 31, 1974

Summaries of the stories the major media outlets considered to be of particular importance on this date:

The White House said that President Ford "has some ideas of his own" about the terms of amnesty for military deserters and draft evaders that would change the recommendations he received today from Attorney General William Saxbe and Defense Secretary James Schlesinger. Their report recommended that deserters and draft evaders earn amnesty by serving up to 18 months in public service and make a "reaffirmation of allegiance to the United States." However, they were asked to provide additional information before the President announced a definite plan. Jerry terHorst, the White House press secretary, said that Mr. Saxbe and Mr. Schlesinger made "some joint proposals," but that they had "proceeded in a two-track way," and that each had made some separate recommendations of his own. [New York Times] President Ford, appealing to "all Americans without exception to make sacrifices in order to hold down wages and prices," proposed in a message to Congress a three-month deferral of the pay increases scheduled to take effect Oct. 1 for all 3.6 million federal employees. The deferral would cut $700 million from the budget for the current fiscal year. Congress has a 30-day period in which it can reject the proposal. Mr. Ford also said he was ordering the elimination of 40,000 of the 1.4 million civilian jobs in the government. This would reduce the current budget by $300 million. [New York Times] In a pre-Labor Day interview, George Meany warned of a possible depression and called for a change in policies that have restricted credit, brought high interest rates and raised the possibility of increasing unemployment. The president of the American Federation of Labor and Congress of Industrial Organizations, in a gloomy assessment of the economic outlook was especially critical of the tight-money policies of Arthur Burns, chairman of the Federal Reserve Board. He said that if there was one person in the economic area he would like to get rid of, it was Dr. Burns. [New York Times] A worldwide shortage of fertilizer, affecting both rich and poor nations, is increasing the possibility that millions may die of starvation in poor countries in the coming year. It was brought about by the doubling and tripling of the prices of fertilizer and fertilizer raw materials during the energy crisis, the exhaustion of inventories by an unprecedented demand from farmers in developed nations and "quasi-embargoes" on fertilizer exports by the United States and Japan last fall. It may be two to four years before there is sufficient fertilizer to meet the demand. Meanwhile, fertilizer mines and factories are being built all over the world, but during the interval the food outlook is gloomy. [New York Times] West Germany agreed to lend Italy $2 billion to help get her out of her financial crisis. The loan was announced jointly by Premier Mariano Rumor of Italy and Chancellor Helmut Schmidt of West Germany after a long meeting in Bellagio, a resort in Northern Italy. West Germany will transfer marks and other hard currencies from the West German Federal Bank to the Bank of Italy. Part of the Bank of Italy's gold reserves will be put up as collateral, Mr. Schmidt said. Mr. Rumor said that only a "small portion" of the gold reserves would be used as collateral. [New York Times] Saudi Arabia and Algeria have agreed not to lower oil prices, the official Algerian news agency announced. The agency said the decision was made following "recent contacts" between the two countries and that it "consolidated the front of the producer countries" against those who believe prices should be sharply reduced. The announcement was made 12 days before the Organization of Petroleum Exporting Countries is to meet in Vienna to consider new price proposals. [New York Times] Prime Minister Norman Kirk of New Zealand, a former railroad engineer who had headed the Labor government since November, 1972, died of a heart seizure in a Wellington hospital at the age of 51. Mr. Kirk, who was also Foreign Minister, announced Wednesday that he was taking six weeks of complete rest on the advice of physicians. Deputy Premier Hugh Watt will head the government until the Labor caucus in Parliament elects a new leader. [New York Times]