June 8, 1979

A refusal to lift sanctions against Zimbabwe Rhodesia was announced by President Carter. He said he believed that the United States would be “seriously damaged” in its foreign relations if it acted alone to remove sanctions now and that he would do his utmost to win over a majority in Congress to his position. [Page Al, Column 6.]

The Producer Price Index moved up four‐tenths of 1 percent in May, the Government reported, providing the first sign that inflation may be abating. The moderate gain largely reflected a substantial decline in food prices. The report appeared to support the Carter Administration's prediction that the rate of inflation would slow later in the year. W. Michael Blumenthal, the Treasury Secretary, noted that the producer index, excluding the energy components, actually declined during the month. [Page Al.]

An article in Metropolitan Report Tuesday reported incorrectly the total salary increase won by the Suffolk County police through arbitration. The base pay will rise to a maximum of $24,681 by the end of 1980 if the New York area cost‐of‐living index goes up 3⅓ percent from January to May of this year, and 7.5 percent from November 1978 through November 1979. If the index rises more slowly, the raise will be proportionately smaller.

Article profiles company; discusses company's purchasing program, which has been central element in cost-cutting strategy that has figured largely in company's recent improvement in profitability; chmn and chief executive officer McCardell says cost cutting has resulted in savings of $110 million in fiscal year ended last Oct 31, and expects it to yield over $200 million more in current fiscal year; vice chairman Keith R Potter and vice president Robert C Parker comment; McCardell por; market performance chart; graphs show company's reducing debt exposure from '75 to '79 and increasing profitability from '77 to '79 (L)

Energy Sec James Schlesinger says gasoline supplies should improve slightly in coming weeks as refiners begin increasing production and US begins to receive larger share of world supplies; says availability of oil products will remain tight for rest of year; says US has reached its target of reducing consumption of oil by 1 million bbls a day--roughly 5%--in accordance with agreement in International Energy Agency; concedes that conservation is chiefly the result of shortages; says heating oil inventories are expected to total 231 million bbls by Oct; Administration's target of 240 million bbls was regarded as excessive by some experts; Schlesinger illus (M)