October 8, 1971

Nixon announces that present wage-price freeze will be followed by indefinite period of close Govt supervision of econ to limit wages, prices and rents without direct controls on profits, nationwide TV s; describes new machinery, effective when wage-price freeze expires Nov 13, that will allow for some wage-price increases; machinery will include bds to limit wage, price and rent increases; wage-earners whose pay increases were blocked by freeze will not be able to regain lost income; Nixon states that to ensure victory in his fight against inflation he will ask Cong for 1-yr extension of Econ Stabilization Act, from which his authority to control wages and prices derives; Nixon plan does not include specific guidelines covering amt by which wages will be permitted to rise but given Nixon objective of holding price increases to 2% or 3% it is conjectured that wage increases averaging 5 or 6% might be granted without creating econ need for businesses to raise prices more than 2% or 37%; difference between percentage wage increases and percentage price increases would be made by rising productivity, which has recently averaged 3% yrly; Nixon stresses that success of wage-price freeze was due to voluntary cooperation by Amer people and that success of phase 2 will also depend on voluntary compliance; announces his intention to establish expanded control machinery backed by legal sanctions to set wage-price standards, to rev wage-price increases in light of standards and to punish offenders; declares that various interest groups in econ--including labor and business--will participate intimately in machinery but asserts that ultimate authority for establishing long-range goals, coordinating wage-price standards and imposing penalties to insure compliance will rest with Cost of Living Council, which will continue to operate under Connally; Nixon, in addition to emphasizing need for voluntary cooperation, asserts that a major purpose of program is not only to restrain specific wages and prices but to create whole new climate in nation; contends nation has lived too long with inflationary psychology; pledges not to continue controls longer than necessary; illus

Comr Murphy discloses that 'dozens of acts of misconduct' will be made pub soon and that many of these will will result in criminal indictment of members of force; also criticizes Dillon's charges of widespread bribery among policemen and narcotics dealers; while dept would not provide details on Murphy's statement, other law enforcement officials say that at least 6 narcotic detectives who worked in Harlem had been subpoenaed to appear before Fed grand jury in Manhattan and that additional detectives are still being called; many of grand jury investigations mentioned by Murphy are believed to have grown out of leads provided by Knapp Comm; details

Gromyko suggestion that completion of Big-4 accord on Berlin be coupled with W Ger ratification of treaties with USSR and Poland seen threatening to delay preliminary talks on proposed Eur security conf

MEET COOKIE. The year's most unlikely heroine $6.?? your bookstore—Advt.

Sec Connally accepts HR decision to repeal 7% auto excise tax, Sen Finance Com hearing