January 26, 1974

US State Dept spokesman John F King says, Jan 25, China repts holding US aide Gerald Emil Kosh, US observer reptd missing during Chinese‐S Vietnamese battle in Paracels; says China repts also taking more than 100 S Vietnamese prisoners; says Kosh may be released soon; some US officials note that N Vietnam is silent on dispute, not wanting to endorse Chinese seizure of island traditionally claimed by Vietnamese and hesitant to criticize China

group of 5 ins cos and 7 banks on Jan 25 files suit in Fed ct, Phila, challenging constitutionality of Rail Reorganization Act, which they say represents illegal seizure of property without compensation to stockholders; plaintiffs hold $800‐million in Penn Central securities (S)

George P. Shultz reportedly has finally decided to resign as Secretary of the Treasury sometime after President Nixon's economic and budget proposals go to Congress. Details on Page 16.

White House deputy press sec Gerald L Warren announces that Pres Nixon has suspended import restrictions for 5 mos to provide ‘stabilizing effect’ on wheat prices; denies that action signals impending grain shortage; says Adm has no intention of complying with Amer bakers’ request to limit exports; agr experts outside Govt say that wheat prices will rise substantially before stabilizing if foreign wheat is used to stabilize prices; hold wheat supplies could be much tighter than expected; Deputy Asst Agr Sec Richard E Bell and agr expert John A Schnittker comment (M)

UN Emergency Force spokesman Rudolf Stajudhar says that 1st Israeli forces to pull back under Egyptian‐Israeli disengagement accord were those at Adabiya, area that commands access to Suez city; notes that 600‐man Finnish battalion stationed in area was strengthened by cos of Indonesians and Swedes for period of 1st Israeli withdrawals (S)