August 20, 1971

Arab refugee leaders protest razing of houses in refugee camps, Gaza Strip, by Israelis; charge action is collective punishment against refugees for deeds of Arab commandos; Israelis have not made their ultimate intentions clear but claim refugees will be offered better qrs in El Arish, south of Gaza Strip; illus; map

high Adm officials say US hopes to restore soon convertibility of dollar and end its potentially floating status against other currencies, but only when Govt is satisfied that other countries have taken needed actions to restore US financial position in world; note actions must include some combination of substantially higher exch rates for leading currencies against dollar, greater sharing of burden of defense and modification of trade practices regarded as 'unfair'; note dollar could return to normal status before end of yr; say convertibility would almost certainly not take old form of simple promise to pay out gold in return for dollars; note US has no intention of acting itself to change exch rate of dollar; say form that convertibility of dollar will take is matter for negotiations; see normal foreign exch dealings able to proceed in interval before dollar is convertible; note US is not trying to set entirely new direction but hopes for evolution of present system

Gen Duong Van Minh withdraws from pros race, leaving Nguyen Van Thieu unopposed in election set for Oct 3; charges Nguyen Van Thieu rigs election and that all his pleas to end Govt interference had been ignored; withdrawal is blow to US policy‐makers who are apprehensive over repercussions of a one‐man race; Amb Bunker, returned from US, had conferred with Duong Van Minh in effort to persuade him not to withdraw; Gen's aide, Thon That Thien, warns to 'watch the streets in the next few days; there will be trouble'; says US Embassy was at fault for failure to give assurance it would do everything to insure fairness; Gen says he withdrew 'in the service of natl peace'; hopes action will 'arouse the conscience of responsible authorities'; refers to 'terroristic and suppressive acts of the Govt'; new electoral law discussed with which Nguyen Van Thieu hoped to limit number of candidates; US officials, who have privately backed Nguyen Van Thieu, wanted him to win in what appeared to be a dem contest; illus

WASHINGTON, Aug. 19—The Secretary of the Treasury, John B. Connally, and the Secretary of Labor, James D. Hodgson, both said today that the Nixon Administration had already begun pianning actions to prevent further inflation after the President's 90‐day wage‐price freeze expires.

Lynch, in wire to Heath, warns that he will support policy of passive resistance by Ulster's Cath opposition unless GB abandons use of mil solutions to problems there; says events in Ulster in past 10 days demonstrate failure of internment policy; says that if mil solutions were replaced by policy of finding solutions by pol means he would agree to meet with Heath and Faulkner; warning brings Irish Repub closer than ever before to involvement on behalf of Ulster's Cath minority but stops well short of helping militants now engaged in violence; Heath's reply calls wire 'unacceptable' in its attempt to interfere in Brit affairs and says it can in no way contribute to solution of problem; claims Lynch's threat is calculated to worsen situation in Ulster; sharp personal exch brings out in open growing animosity between London and Dublin over Ulster; Heath and Lynch are to meet in Oct but exch puts meeting in doubt; Heath warns threat impairs efforts to maintain good relations between GB and Irish Repub; says mil operations in Ulster are solely for defense of people against armed terrorists whose activities originate or are supported in Repub