March 7, 1975

NYC unsuccessfully negotiates for 10 1/2 hrs with banking syndicate, headed by Chem Bank, for sale of $537-million in bond-anticipation notes to meet payroll and 2 loans due Mar 14; talks are to resume; syndicate, shaken by near collapse of NYS Urban Development Corp, seeks assurance that city can legally sell long-term bonds later to redeem notes offered; high city fiscal expert asserts that banking community is 'running scared' because of default by state; Controller Harrison J Goldin's office is conducting negotiations; city suddenly became strapped for cash when Bankers Trust and Chase Manhattan canceled $260-million loan they were to make to city (M)

OPEC nations offer to negotiate with indus nations on stabilization of oil prices but say any such conf would have to deal with issues of raw materials and development of poorer nations, Mar 6 meeting, Algiers; OPEC leaders say value of petroleum must be protected against inflation and monetary depreciation and that this should be done by linking oil prices to prices of mfd goods and services; vow immediate and effective measures to counter any plan or strategy designed for aggression, econ and mil, by grouping of consumer countries against any OPEC member; Algerian Pres Houari Boumediene says before OPEC, commodity-exporting countries had no real bargaining power and their views on internatl econ cooperation were not taken into acct; says this has changed with creation of OPEC (M)

Bank of Amer pres A W Clausen says because Export-Import Bank loans to USSR have been restricted, Bank of Amer has offered to form banking syndicate to lend $500-million to USSR to finance imports from US, speech, US-USSR Trade and Econ Council, Washington; bank says terms of credit have not been determined but describes credit arrangement as short-term; exports to USSR financed through Export-Import, now limited to $75-million a yr, carry interest rate of 7%, and presumably, interest on Bank of Amer credit would be somewhat higher; Bank of Amer says establishment of such credit facility would tend to counteract recession in US econ, improve US balance of payments and help banks make additional loans for productive purposes at time when increase in US production is needed; Izvestia correspondent Vladimir S Alkhimov recently noted that USSR has no objections to use of commercial bank credits to finance trade between 2 countries; Bank of Amer vp William Hurst says USSR expressed keen interest in proposal; emphasizes that proposal is just suggestion that is intended to permit USSR to use Export-Import Bank credits for long-term financing and to use revolving credit arrangement to purchase US wheat and consumer goods; says US Sec William E Simon is expected to receive word from USSR about credit proposal when he visits Moscow in Apr to discuss trade between 2 countries; trade council pres Harold B Scott says he is confident that $500-million credit could be set up (M)

Shah of Iran and Saddam Hussein, Deputy Chmn of Iraq's leftist junta, announce agreement in Algiers to settle border dispute and end subversive infiltration from either side; agreement, contained in joint communique, calls for 'a definitive and durable solution' to all problems between both nations, adding that Persian Gulf region should be kept 'free of all foreign influence'; is announced by Pres Houari Boumediene, who brought Shah and Hussein together for 1st time; agreement is seen as breakthrough in disputes involving Kurdish rebellion in northern Iraq and navigation rights in Shatt al Arab, waterway shared by Iran and Iraq, but blow to hopes of Kurdish rebels seeking to win autonomy; map of contested border area (M)