August 18, 1971

OEP announces that policy guidelines on wage-price controls will be issued before end of wk; office spokesman discloses that question of whether Nixon's exec order applies to state and local govts is undecided; says Cost of Living Council will meet throughout wk until comprehensive pkg of guidelines is ready for pub; office issues interim guidance on most frequently raised questions from businessmen, labor leaders and public; office Cong and Pub Affairs Dir Pattison notes that none of statements will be official and binding until they had been approved by council and published by OEP; also says that guidance coming from various Govt depts will not be valid until approved by council; A R Weber, who was formerly in Mgt and Budget Office, is named council exec dir

atmosphere of turmoil and uncertainty continues in Eur (A Lewis rept); EEC Monetary Com meets to discuss idea of floating rates; cautions that no firm decisions have been reached; is reptd to have discussed idea of all EEC members floating currencies as bloc against dollar; EEC Eur Comm meets to discuss plan; makes no proposal to its Council of Mins for common position on monetary crisis but is expected to meet again later in day; issues communique emphasizing need for common Eur position in world crisis; invites countries applying to join EEC to concert actions with EEC; says comm is convinced that member countries will adopt common positions enabling them to maintain their cohesion, reinforce solidarity and contribute to new progress in internatl econ relations; criticizes Nixon's comment in s charging other countries are treating US 'unfairly' in monetary and trade relations; denies that EEC has practiced unfair competition toward US or any other country; GB is said to be considering idea of float; IMF sets Washington meeting in effort to reach broad agreement among Eur powers, US and Japan; Volcker says he anticipates no large conf at meeting; all leading foreign exch mkts except Zurich remain closed; vol of transactions on Eur mkts is reptd to be too light to draw conclusions that prices paid will likely persist

NY Times series on use and control of land in NYC suburbs finds that job opportunities are increasing but that relative unavailability of housing entails that majority of region's labor force must endure long and expensive commuting to reach jobs

Nixon, in White House conf with Cong leaders, is apparently successful in convincing them of merits of tax reduction proposals in econ program; reptdly says he does not expect Cong to 'rubber stamp' them but urges Cong not to turn them into 'Christmas tree package'; stresses cuts are essential component of new econ strategy and are not merely stimulative, citing investment credit expected effects; pleads for bipartisan approach; compliments Mills on his contribution to program; says he kept planned wage-price freeze secret to keep from prompting rush of price and wage increases; Connally explains why freeze was not imposed on interest rates; Nixon, in conf, links prosperity and peace; Mansfield predicts Cong approval of tax program; Repr Ford, Repr Byrnes, Sen Long among those present commenting on discussion; list of others present; Nixon illus with Mills, Mansfield and Ellender

Nixon Adm calls on estimated 150,000 workers now involved in more than 350 strikes throughout nation to return to work during 90-day wage-price freeze imposed by Pres; FMCS Dir Counts, who makes request, also asks organized labor not to start new strikes during freeze, news conf; says Adm believes that it has legal power to order all strikers back to work during period but that it prefers voluntary cooperation; asserts Adm is not going to 'hold a club over them' but adds that there is possibility of $5,000 fine if union strikes during freeze; law under which Nixon was able to impose wage-price freeze gives him authority to ban strikes as long as emergency econ measures are in effect; under law, ct injunctions can be sought against strikers; AFL-CIO spokesman has no comment on request but says that exec council will discuss it

Nixon cites Amer's 'competitive spirit' in appealing for support for new econ program, s, Knights of Columbus dinner

high US officials say Nixon imposed 10% surcharge on imports as form of leverage that can be retained until other countries make appropriate upward changes in their currencies' exch rate; note Nixon proclaimed surcharge as temporary but set no time limit; Connally says surcharge was imposed on imports because of uncertainty over reaction to new monetary plan

Postmaster Gen Blount repts rise in bulk mail rates scheduled for Sept 15, will be delayed until after Pres Nixon's recent wage-price freeze is lifted

Auto issues lead 2d day of rally at NYSE; are expected to be among prime beneficiaries of Nixon's new econ program; GM stock shoots up $9 a share, Ford $6, Chrysler and Amer Motors $2

Illus

Amer officials note Communist China's new emphasis on improved relations with parts of Africa; see effort to challenge USSR there as well as undermine US influence

Iran officially recognizes Peking as 'sole legal Govt of China,' says 2 nations will soon exch ambs, communique made public simultaneously in Teheran and Peking; Chinese Nationalist Amb Shih Ying-woo flies to Taipei for consultations