March 29, 1974

Atty Gen W B Saxbe, in his 1st intervention in a Watergate lawsuit, asks US Appeals Ct to sustain Pres Nixon's refusal to turn over 5 White House tapes to Sen Watergate com; request conflicts with position taken by special prosecutor Leon Jaworski, who filed his own legal memo with ct but declined to advise ct on what to do with tapes; Justice Dept officials say dept has submitted its own brief because it wants to ‘protect the principles of exec privilege and the integrity of the criminal justice system'; Sen Watergate com Chmn Sen S J Ervin Jr contends Saxbe acted improperly in filing his friend‐of‐the‐ct brief and that he violated his agreement to leave all matters related to Watergate to Jaworski; Asst Atty Gen Irving Jaffe defends Justice Dept's action; dept's chief spokesman Jack W Hushcn says Solicitor Gen Robert H Bork advised Saxbe earlier of what he called necessity of ‘ensuring that dept's position regarding separation of powers’ be ‘included in the record’ (M)

A jury in the Bronx convicted Robert Hayes, reputed to be a member of the Black Liberation Army, of the murder of a transit policeman last June. Page 27.

Common Cause study shows business, labor and special interest groups have $14.2‐million on hand to give to ‘74 Cong candidates; largest single amt is Associated Milk Producers’ $1.4‐million; $11.6‐million of total is set aside in coms formed by special interest groups; Common Cause chmn John W Gardner claims figures in study prove that old system of financing elections will not reform itself voluntarily; attacks Dem leadership in HR for ‘stalling’ on campaign reform bills; figures are also released on spending for HR and Sen races in ‘72, showing $14‐million in contributions made after Apr 7 ‘72 effective date of campaign finance disclosure law; also shows business groups heavily favored incumbents and Repubs while dairy and labor groups favored Dem candidates; breakdown of group donors and list of Sen and HR candidates who received most contributions from business and labor groups (L)

Concern of investors over higher interest rates sent the stock market yesterday into its biggest decline in almost two months. The Dow‐Jones industrial average slumped 16.82 points. After the market closed, the Bankers Trust Company announced it was raising its prime lending rate by half a point to 91½ per cent. Details on Page 47.

Analysis of effect of Watergate affair on Sec Kissinger's talks in Moscow, ending Mar 27, with L I Brezhnev; for 1st time in 2 yrs, affair has made discernible impact on important Soviet‐Amer negotiations; both sides went out of their way publicly to stress need to improve ties despite Watergate, indicating how much affair is on mind of Moscow as well as Washington; one Soviet official, in unprecedented irreverence, joked about ‘Pres Ford’ instead of Pres Nixon’ coming to Moscow; affair has also given Soviet officials new respect for power and autonomy of Cong; seen obviously affecting Kissinger failure to make advances on arms limitation; wariness of Defense Min Marshal Andrei A Grechko on arms talks and improvement in gen ties noted; Soviet leadership, as if recognizing Nixon's impotence on trade issue, reptdly offered some slight flexibility on Jewish emigration question, presumably to see of Cong can be swayed on related most‐favored‐nation trade status; USSR seen waiting on key issues possibly because Nixon, in his present position at home, may be willing to compromise for a successful visit to Moscow (M)