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Friday October 20, 1978
. . . where the 1970s live forever!

News stories from Friday October 20, 1978


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

  • The Egyptian-Israeli peace talks, their progress clouded by reports of difficulties, were brought to an unexpected halt by the announcement that leaders of Israel's delegation are returning home for consultations on a new U.S. proposal. Everyone involved took great pains to emphasize that the talks were not being broken off and that Foreign Minister Moshe Dayan and Defense Minister Ezer Weizman are expected back in Washington next week to resume the negotiations. The White House, in particular, strove to minimize the implications of the situation. It issued a statement about the progress of the talks that didn't mention the Israelis' impending departure until the end and that tried to make their trip to Jerusalem sound routine.

    The decision to call Israeli peace negotiators home from Washington reflects growing anxiety over the turn the talks with Egypt have taken and political differences within the Israeli government. Prime Minister Menachem Begin acceded to Foreign Minister Moshe Dayan's request to return to report to the cabinet only after first arguing against the recall, partly to avoid generating an atmosphere of crisis and partly to keep strategy firmly in his own control and out of the hands of the 19-member cabinet, government officials said. [Washington Post]

  • A federal grand jury has extended its investigation of the financial affairs of Bert Lance to include the eight months he served as President Carter's budget director. Until now, the inquiry was known only to have covered Lance's tangled bank dealings in the years before he came to Washington in January 1977. But sources close to the case said the grand jury has recently begun to examine what role, if any, Lance played in a hidden 1977 sale of securities that had been pledged as loan collateral. In addition, the Atlanta-based jury is said to be investigating whether Lance, while director of the Office of Management and Budget, was instrumental in obtaining questionable loans and extensions of credit from Georgia banks for his relatives.

    The latest turn in the investigation heightens the potential embarrassment for Carter. A month before Lance resigned on Sept. 24, 1977, Carter went out of his way to underscore his faith in the integrity of his longtime friend, telling reporters with Lance at his side: "Bert, I am proud of you." However, since last April 24, when Carter was briefed on the early stages of the grand jury inquiry by Deputy Attorney General Benjamin Civiletti, Carter has had no known contact with Lance. [Los Angeles Times]

  • President Carter apparently reported vastly different values for some of his peanut warehouse equipment to tax officials in 1975 and 1976, placing a higher value on the machinery for federal tax credit purposes while reporting lower value to local officials for property tax purposes. White House officials today conceded that the discrepancies, first reported Thursday night by ABC television, raised "legitimate questions" for which they had no immediate answers. The White House asked state and local tax officials in Georgia to review the property taxes paid by Carter's peanut warehouse business and to report their findings when the review is completed.

    According to the ABC reports, in his 1975 federal income tax return the president said that a peanut sheller cost $695,000 and he received an investment tax credit based on that amount. But that same year, the warehouse filed at declaration with Sumter County, Ga., tax officials listing the value of the sheller at $375,000. Carter's local property tax on the sheller was based on the lower amount. In 1976, according to the report, the president received an investment tax credit for a new peanut loader and elevator that he said cost $367,040. But when the loader and elevator were listed with local tax officials, they were valued at $50,000. "The broadcast report raises questions to which we do not have answers," White House deputy press secretary Rex Granum said when asked about the different values. [Washington Post]

  • The stock market ended the week with another losing session, suffering the worst 5-day loss in points in the 93-year history of the Dow Jones industrial average. The drop was not limited to the Dow average, which measures the value of stock in 30 of America's greatest corporations. It was spread over a wide variety of stocks; in all, 1,561 issues declined and only 144 gained on the New York Stock Exchange. Today's loss on the Dow was 8.40 points, and the loss for the week totaled 59.08 points.

    The previous record drop for one week occurred almost five years ago when stocks plunged 51.78 points in the week ended Nov. 2, 1973. That occurred in the wake of the Arab oil embargo and the first of the dramatic series of oil price increases initiated by the Organization of Petroleum Exporting Countries. Analysts attributed this week's broad and steep retreat to growing fears by investors that higher interest rates will continue to be the only effective inflation-fighting tool in the government's arsenal, and that rates may have to go much higher before they have any impact. That in turn could trigger a recession. [Washington Post]

  • The Carter administration abandoned the 5.75 percent price guideline it had planned for its new wage-price program, and substituted a complex formula that officials say will ultimately allow prices to rise between 6 and 6.5 percent a year. That development came as, separately, the Commerce Department reported that the nation's economy grew barely fast enough last quarter to keep the unemployment rate from rising -- precisely the pace the administration is seeking to help dampen inflation under its forthcoming wage-price plan.

    The last-minute change in the price guideline came after officials apparently concluded that the original 5.75 percent would be too tough on some businesses. Officials said the existence of already-negotiated wage settlements and cost increases would make it difficult to meet. However, the move is expected to draw fire from organized labor, which consistently has insisted on full parity in treatment of wages and prices as a condition for its participation in the new guidelines program. Labor leaders already are grousing about Carter's new plan. [Washington Post]

  • A new admissions policy giving minority students an edge but avoiding the quotas the Supreme Court threw out has been adopted at the medical school that figured in the landmark Bakke case, the University of California-Davis. [Washington Post]
  • Rhodesian Prime Minister Ian Smith agreed today to a U.S.-British call that Smith meet with his guerrilla foes in an effort to find a way to end Rhodesia's internal strife and bring about majority black rule. At a State Department meeting, Smith and the three black leaders of his transitional government said they will take part in a peace conference involving all parties to the Rhodesia dispute, provided the conference is "well-prepared" and "without preconditions." Their agreement presented U.S. and British policymakers with a victory and a potential problem in their efforts to find a solution to the conflicts between Rhodesia's ruling white minority and repressed black majority.

    The action taken by Smith and his three colleagues marked their first unequivocal commitment to participate in the so-called all-parties conference -- a plan that Washington and London have been pushing for more than a year. By accepting, though, Smith in effect put the United States and Britain in the position of having to win a similar, no-preconditions agreement from Joshua Nkomo and Robert Mugabe, leaders of the Patriotic Front guerrilla forces fighting the Smith government from bases in neighboring Zambia and Mozambique. [Washington Post]

  • The first transplant of a functional gene from one mammal to another -- a rabbit to a monkey -- has been conducted at Stanford University, bringing scientists to the edge of a new frontier in medical technology. Dr. Paul Berg, a prominent biochemist, said the scientific breakthrough will help provide answers that may lead to the successful treatment of certain genetic and hereditary diseases, such as diabetes. [Washington Post]


Stock Market Report

Dow Jones Industrial Average: 838.01 (-8.40, -0.99%)
S&P Composite: 97.95 (-1.38, -1.39%)
Arms Index: 1.12

IssuesVolume*
Advances1443.15
Declines1,56138.40
Unchanged2292.12
Total Volume43.67
* in millions of shares

Arms Index is the ratio of volume per declining issue to volume per advancing issue; a figure below 1.0 is bullish.

Market Index Trends
DateDJIAS&PVolume*
October 19, 1978846.4199.3331.81
October 18, 1978859.67100.4932.97
October 17, 1978866.34101.2637.87
October 16, 1978875.17102.6124.60
October 13, 1978897.09104.6621.93
October 12, 1978896.74104.8830.17
October 11, 1978901.42105.3921.74
October 10, 1978891.63104.4625.47
October 9, 1978893.19104.5919.72
October 6, 1978880.02103.5227.39


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