' : { t i

jase

¢ board's action, the Federal De-|

$0 The Guardian, Charlottetown, Thors., Dec. 9, 1965.

U.S. Long-Range Bombers Scheduled For Drastic Cut

WASHIGTON (AP) —. Offi-| cials plan to reduce the U'S. long - rariBe bomber force to about 250 planes — about one- third of current bomber strength—by 1971, sources indi- cated here.

At the same time, the sources indicated that US. air defences against the Soviet bomber threat also will be scaled down.

Information given*to Congress in connection with Defence Sec retary Robert S. McNamara’s | plan announced Monday to cut |

|will all B-5S2s from the

Currently, the U.S. has about

|680 long-range bombers—about 1600 of them B-52s and about 39

supersonic B-5és. TO CUT OUT B-58és

Congress has been imformed that the B-58s will be out of service by 1971, as apparently Model B through F.

The decision to phase out B-52s and B-5és over the. next five or six years may be tied to a reported inention by the ad- |ministration to propose an ad-

out 149 more military bases | vanced bomber, a version of the

pointed in the direction of a bomber and air defence cut- | back

Details of the planned base closings are expected to be made public today by the de- fence department.

By all signs, the Pentagon in- tends to retain’ a bomber force of some 250 B-52G and B-52H models after 1971. These are the latest versions of the B-52. They have greater vane and more powerful engines than the ear!l- jer models.

|controversial. TFX plane-

It is known that top. defence officials have been considering ordering an adaptation of the TFX, now designed chiefly as a fighter, into a bomber version which would be heavier and longer than the fighter type-

This is regarded as a com promise well short of the air force’s proposal to build an en |tirely new. advanced manned , strategic aircraft which would ‘cost an estimated $10.000,000,- 000.

U.S. Corporations Expand To Meet Consumer Demands

WASHINGTON (AP) — US. corporations have heen spend- ing at a _ constantly-increasing pace to keep up with ers’ demands for goods and services, the government has reported. Another | sharp increase in the rate of invest- ment is scheduled next year.

A government survey showed businesses will spend some $900,000,000 more this year on new plants and equipment than previously expected. Outlays probably will total $51,800,000,-

compared with $50,900,000,- estimated in September.

In addition, spending for new portation and business equip- tacnt will be running at an an- nual rate of $58,900,000,000 in another six months if invest- ments match the projections.

Expenditures this year would be 15 per cent higher than 1964 outlays and would come on top of substantial. increases in the.| three previous years. The mid- 1966 projection would be 70 per cent higher than 1961, when the U.S. was emerging from a re- eession.

The survey, conducted by the U.S. Securities and Exchange Commission and the commerce department, was taken before tis week’s federai reserve board announcement of a higher,) interest rate policy. ANNOUNCE PROBE .

The Senate - House of Repre- sentatives economic committee ennounced i will undertake, starting Monday, an investiga- tion of the reserve board’s de- eision te raise the discount rate and the eeliling on interest rates. jinesses

One” “administration ‘economist faid higher interest rates un- doubtedly will cause some com- panies to reduce or eliminate marginal investment projects. he said there is no way to tell how much the increased costs of borrowing will affect spend-

ing on plants and — He said there is likely to be little immediate effect since) fi- Mancing is planned we in ad- vance of most building projects. In a followup to the reserve

posit. Insurance Corporation au- thorized state - chartered com-

consum.- |

and it also reflects business- men’s confidence in the market \for their goods.

However, a rapid business ex- pansion which outstrips’ demand | can cause a recession. In this, situation, corporations have |money tied up in idle facilities; | the amount of profits and the number of jobs decline and this starts a downward trend. Eco nomists generally agree over- building was a major element in the 1957-58 recession and that there was not enough business investment im the ensuing years. |

Commerce Secretary John T. Connor said spending by corpor- ations has been ‘“‘a mainspring of the current business expan- |

| eion.””

He said the new figures pre-

sent ‘further evidence of the strength of demand ia the months te come.’ However, he added: “Under these circumstances it is essential to stress the im- portance of deliberate and con- stant moderation in wage and jprice decisions in the period |ahead and to reaffirm the gov- ernment’s commitment to a proper balance of fiscal, mone- tary and other. policies.”

DEIDN’T MENTION RATES

‘~ Connor’s statement made no |

mention of the possible effect of | higher interest rates.

In -its Sunday announcement, the federal reserve board said

credit to meet business and con- sumer needs. In effect, the board said credit will continue to be available—but many bus-

sumers, will have to pay more for it.

Almost alt major industries are expected to step up. their outlays for new plants and equipment next year- The larg- est percentage increases will be made by manufacturers of transportation equipment, non- electrical machinery and paper, and by food processors, gas util- ities and airlines.

VIKINGS COULD WRITE The earliest: runic (Viking) script yet found, with 24 letters, dates from 250 AD in Denmark. |

mercial banks Tuesday to pay

5%. percent on-time deposits. iE

The previous maximum ‘vas 4% per_cent- _ oe

Chairman K. A. Randall of the FDIC urged small banks to use utmost caution in raising | their rates, however, saying they should ‘be under no com-

‘pulsion to do so since they op-

erate under different circuen- stances than large banks and | other lending agencies. 4 DOESN’T AFFECT SAVINGS

The FDIC action applies to the maximum interest ‘which the state banks may pay on specified time deposits of more than 30 days. It does not affect conventional savings accounts used by most individuals,

The trend in expenditures for new plants and equipment is @ key economic indicator, An in- crease means more jobs and more profits for the construc- tion and equipment industries, | ore

The Rotary Club of

wolud not be successful

staff, the Charlottetown Legion and their ladies a

THANK YOU

thank everyone. who helped to make our Radio Auction such a success this year. The Auction

public, did not show such interest in this endeay- our. The club wishes to thank most sincerely the donors of cash and merchandise. We also extend our thanks and appreciation to ©FCY Radio and TV, the Guardiau-Patriot news and ad personnel, the Island Telephone Co.

the building and facilities, assembly and disposal headquarters.

| Thanks Again The Rotary Club of Charlottetown

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