February 14, 1975

Feb 14: Egyptian officials on Feb 13 declare themselves encouraged by their talks with Sec Kissinger but reiterate that Egypt will not give pledge of nonbelligerency to Israel in exch for Israeli withdrawal in Sinai; say Egyptian Pres Sadat expressed this refusal clearly to Kissinger on Feb 12; indicate that there was discussion of other possible means by which Egypt can make its policy of peaceful intentions more explicit; say, in light of Sadat's recent statements that Egypt would not start war as long as there was reasonable rate of progress toward peace, that new Egyptian assurances will be addressed to US or to Kissinger personally and not to Israel; add that any assurances will be contingent on progress toward over‐all settlement and will be invalid if Israel refuses to follow up with withdrawals on fronts other than in Sinai; say Kissinger's visit raises hopes for breakthrough toward negotiated settlement in Mar, when Kissinger is due to return to Middle East; Egyptian sources stress that Kissinger brought no Israeli proposals or ‘demands’ to Cairo but explored Sadat's view on wide range of issues (M)

Conn Gov Grasso on Feb 13 asks General Assembly to approve increase in state sales tax from 6 to 7%; also asks for increase in corp business tax from 8 to 9%, 4c increase in cigarette tax, increase from 6 to 7% on capital gains tax and that dividends tax, repealed 2 yrs ago, be reinstated at 7%; asks that Assembly impose new taxes in next fiscal yr; Sen Joseph Lieberman says he doubts there are enough votes to revive dividends tax; Sen Lewis B Rome says taxes must be cut; Grasso illus (M)

Soviet leader Brezhnev meets with Prime Min Wilson in Moscow on Feb 13; USSR seems willing to set aside incident that cast chill on relations between 2 countries—expulsion of 105 Soviet diplomats from GB on spying charges in ′71; illus of Brezhnev and Wilson (S)

Fed Reserve Bd preliminary figures show indus production index for Jan dropped to 113.7 (1967100), or 3.6%, indicating econ is in deepest recession since World War II; 1‐mo drop, steepest since ′37, is attributed to decline in consumer buying, slump in housing construction, and widespread effort by business to reduce excessive inventories; some economists believe steep decline in inventories means output will rise as soon as inventories are depleted; chart showing total indus production, by mos, seasonally adjusted, Jan ′71‐Jan ′75 (M)

President Ford announced that he would allow a bill freezing the price of food stamps through 1975 to become law without his signature. Congress had passed it by large margins. Page 12.