November 9, 1974

Nov 9: Palestine Liberation Orgn (PLO) leader Yasir Arafat says on Nov 8 that peace in Middle East will 'remain distant' until US recognizes right of Palestinian people to statehood and ceases arming Israel for another war, int; says US recognition of PLO as party in peace negotiations 'would be helpful'; avoids making any commitment that future Palestinian state would recognize Israel or renounce belligerency; recalls development of guerrilla group Al Fatah, which he founded; says Palestinian govt in exile will soon be formed as step toward establishment of Palestinian sovereignty over west bank and Gaza Strip territory; says such state would be 'nucleus' of future Palestinian state, including present territory of Israel; calls on US to stop providing Israel with mil, econ and pol support; rejects accusation by Israelis that PLO is 'criminal' orgn dedicated to terrorism; says 5 Palestinian guerrillas who killed more than 30 persons in attack on Pan Am World Airways jet in Rome on Dec 17, '73, are being held for trial by PLO; attack was carried out by splinter group, reptdly led by Abou Mahmoud, former treas of Al Fatah; Mahmoud was killed in Beirut in Sept by 4 unidentified gunmen; Arafat, responding to question about attitude of PLO toward 8 guerrillas who killed US Amb Cleo A Noel Jr, US charge d'affaires George C Moore and Belgian charge d'affaires Guy Eid in Khartoum, Sudan in Mar, '73, notes Sudanese Govt turned guerrillas over to Egypt after they were convicted; says 'this is not my business, it is something between the Sudanese and the Egyptians'; Arafat illus (L)

Mayor Beame, responding to what he calls 'emergency' and 'totally unheard of situation,' is ordering new round of budgetary belt-tightening that will cut NYC payrolls and services by $330-million; had earlier ordered reductions of $100-million; holds austerities affecting every dept of city govt are needed to keep his $11.1-billion fiscal '75 expense budget from drifting into deficit; says basic arithmetic of situation is that higher costs of $280-million and revenue shortfalls of $150-million are building up potential deficit of $430-million by June 30 '75; outlines position at Gracie Mansion luncheon with Estimate Bd and City Council leaders and at City Hall news conf later; declares current situation is worst fiscal crisis NYC has suffered; notes that $330-million reduction will have to come out of $4-billion of expense budget that is under his direct control and not out of parts supported by Fed and state programs; asserts that if cuts were applied across the bd, there would be 8.5% reduction of spending by all depts; cites as examples $62.2-million less for Police Dept, $74.1-million less for Educ Bd, $26.9-million less for Health and Hosps and equal amt less for Environmental Protection Adm, which includes Sanitation Dept; hopes to raise $70-million to offset part of $430-million deficit by means of $15-million from increased parking violations collections, $25-million in additional interest income on city's investments and $30-million in projected interest costs to be saved by cutting borrowing in anticipation of Fed and state aid; promises to do everything he can to avoid need to impose new or higher taxes (L)

US Army Sec Howard H Callaway announces that former Lt William L Calley Jr, convicted in connection with '68 My Lai 4 massacre and subsequently sentenced to 10-yr prison term, will be paroled on Nov 19 after serving 33% of sentence; announcement follows deliberations by 14-judge panel of Circuit Ct of Appeals in New Orleans ordering that Calley be freed promptly on bail; case revd; illus (L)

NYC Budget Dir Melvin N Lechner, in latest of several moves brought on by city's fiscal plight, announces 30-day 'hold' on $316-million worth of munic construction projects on which work was ready to begin, news briefing; NYC Controller Harrison J Goldin and Lechner during 30-day period will rev degree of necessity of each project, nearly half of which are schools, and decide which ones they should recommend that Estimate Bd rescind; Lechner says no city agency can accept bids for any new project until after rev; declines comment on whether city adm has set specific figure by which fiscal '75 budget will be cut; says aim will be to rearrange priorities in light of growing squeeze on city treas; implies that money saved on projects deferred or dropped will be reallocated to others next in priority; 49 of 102 projects affected are schools, accounting for $258-million of $316-million total; Lechner says that remodeling and upgrading of existing schools will take precedence over building of new ones; Parks Dept's projects under 'hold' total $13.3-million and are 2d in magnitude to school projects; among Health Dept's projects being held are $5.3-million renovation at Harlem Hosp and $3-million major rebuilding of Bird S Coler Memorial Hosp, Roosevelt Island (L)

Amer delegation source at World Food Conf discloses that possible new source of food aid has been identified at meeting of grain-producing nations, when Canadian repr reptd that Canada has been left with 3-million tons of wheat that cannot be used by developed countries but might be suitable for wheat cakes in India; another official, commenting on proposal for increased Amer aid to hungry nations, says Ford Adm is making decisions on qr-by-qr basis and intends to refrain from vol projections because of possible impact on grain prices (M)