July 7, 1971

Mfrs Hanover Trust and at least 28 others raise prime rates to 6% from 5 1/2%; of those banks only 6 are among 20 largest banks in country; Bank of Amer, First Natl City and Chase Manhattan hold 5 1/2% rate; Repr Patman calls on Pres Nixon to use his existing credit control authority to roll back rise, asserting rise is totally unnecessary and inconsistent with econ conditions; says Adm is asking Cong to approve $250-million to guarantee principal and interest to 24 major commercial banks involved in lending to Lockheed Aircraft and rise in interest rates could make these loans substantially more costly; there is some concern among bankers about potential pol backlash and widespread belief that Fed Reserve has been much too generous in adding funds to econ; '69-71 graph

sr Adm officials say US is giving such serious study to Vietcong proposals that formal response is likely to be delayed; say that subsequent clarifications contribute to making it unlikely that response will be delivered at next session of talks; comment on Le Duc Tho statements

Comr Ruskin charges H Zabell and D Leber and various cos they control, which do rehabilitation jobs on slum bldgs for city, have pocketed $300,000 from inflated mortgage under city's Munic Loan Program; suspends further payments to them; also says Housing and Development Adm ex-Deputy Comr W D Clarke is under investigation; says data concerning 3 have been turned over to Dist Atty's office; Ruskin's action follows statement by Councilman Postel accusing Ruskin of suppressing massive evidence of widespread corruption and influence-peddling in program; Ruskin denies charges

NYC Criminal Ct, noting that prostitution contributes significantly to NYC venereal disease epidemic, holds 2 prostitutes without bail in unprecedented case; details

Fed Reserve Bd member A F Brimmer, predicting it will be 'quite some time' before there will be improvement in employment situation for black Amers, says he fears schism developing between unskilled and professional blacks, s, NAACP annual conf