FEBRUARY 11, 1975 By EDWARD COWAN
Special to The New York Times
WASHINGTON, Feb. 10
A 300,000 federally financed study has concluded that the Government should adopt new techniques to make certain that the behavior of the international oil companies "will be consistent with the national interest of the United States."
The study by a Los Angeles lawyer, Robert B. Krueger, and his associates found that customary government-oil industry relationships, including those now in effect, "do not assure" that national interests will be protected by the companies.
Accordingly, Mr. Krueger concluded, "there appears to be a need for monitoring and for the establishment of a sufficient number of control points within the system to insure that the national interests are independently protected by the United States Government.
The Krueger study was commissioned by the Federal Energy Administration nearly a year ago in the wake of the Government's difficulties in handling the 1973-74 Arab states' embargo on oil shipments to this country. Although still not published -- the agency is about to release it -- the study had reportedly caused uneasiness in the oil industry and in the State Department.
Mr. Krueger's text runs to almost 400 pages, with about 400 pages of appendixes. A 122 page summary has been circuIating among Federal agencies, a copy of which was obtained by The New York Times.
The study said that the Government, in establishing a new role for itself in international petroleum affairs, needed the power to approve or disapprove "transactions where they may affect significant aspects of the national interest." That was a reference to transactions between companies or between a company and a foreign oil exporting government, such as Libya or Iran.
The study cautioned that "such massive power" could be abused, to the detriment of oil companies and the nation. Therefore, it said, "an entity with the stature and independence of the Federal Reserve Board, for example, would be necessary."
It suggested that other approaches might also be useful, including greater disclosure to the Government and public of information about what the international oil companies ·pay for oil, continued cooperation among consumer countries and a continuing, long-term dialog between consumer and producer countries.
However, the usefulness of all these approaches, the study warned, is subject to a ''major qualification." "It is very unIikely that any effective progress can be made in dealing with the major producer countries until the ongoing Arab-Israeli dispute has been settled," it said.
The idea of greater government "monitoring" of the international oil companies has already found widespread support in Congress, notably among moderates and liberals. However, some of the other Kruger study findings go against the general liberal view.
"It is clear beyond any doubt that they benefitted from the oil price increase of 1973-74, the report said, "but it serves no purpose to perpetuate the myth that they brought it about. They did not and do not have the power to cause such an event. The producer countries have that power and ..."
LOS ANGELES -- (AP) -- Los Angeles Police Chief Ed Davis has launched a major crowd control training program among his officers because ·of concern over possible food riots in a depressed economy. Cmdr. Frank Brittell says, "Frankly, I'm afraid of food riots ...We've tried to analyze it, but it's a little different because the guy across the line from you that you're opposing is your neighbor, or your brother."
Brittell said in an interview yesterday that more than 500 police supervisors have undergone extensive training on civil disturbances.
The supervisors are in turn instructing line officers and more seminars for higher officers are planned, said Brittell. who is in charge of the program.
He stressed that the 7,200-member department is neither predicting nor expecting food riots. He said part of the reason for the training is that "it's been a long time since we've had any problems and we're trying to bring back our expertise.
"A lot of the officers on the streets now weren't here during the 1965 Watts riots; there's been a tremendous change in personnel and we're trying to update our material."
The Miami News, Jan. 23, 1975
By A.H. RASKIN
Unemployment insurance has become the country's fifth biggest growth industry, a somber measure of the severity of the worst business slump since the Great Depression.
With a million new jobless persons registering for benefits in a single week and with two brand-new supplemental programs about to start making payments, the Federal-state Insurance system.is expected to pump $17-billion into the spending stream this year, triple the pre-recession flow.
Yet even this huge cushion for the living standards of those jolted out of their jobs and the additional support provided by many labor-management agreements are proving inadequate to shield thousands of workers and their families against what many have long regarded as the ultimate indignity, the necessity for going on welfare.
The humiliations that millions of relief recipients in New York and other metropolitan centers have learned to live with come as such a shock to many recession victims that.union officials end welfare authorities alike fear an explosion if the rolls keep growing.
'Those who have been on welfare for a long time become rigorized to the slowness of bureaucracy", says James A. Dumpson, New York City's Human Resources Administrator. "Many now coming to us for the first time start with disdain for welfare. They are full of anger at the long delays in establishing eligibility, at the need for filling out the 12 page application form the state won't let us change."
Under orders from City Hall to cut his administrative staff by 700 just when this new flood of applicants is engulfing the welfare offices, Mr. Dumpson foresees social unrest here and elsewhere akin.to that which engendered ''Coxey's army" -- a populist march on Washington for economic reform in 1894.
"We are likely to see the militant tactics of the old National Welfare Rights Organization revived by a quite different group," warns the city relief chief.`
The New York Times, Jan 23, 1975
The following excerpts from various bourgeois publications demonstrate the ruling-class position on war and fascism.
Only a serious reduction in consumption (of oil) by industrialized nations will impel oil-producing nations to negotiate lower prices, Kissinger said. Otherwise, "we face further and mounting worldwide shortages, unemployment, poverty and hunger" imperiling international order.
further on in the article:
Kissinger warned the oil nations not to raise prices while the West struggles for a position. He said such an effort "would be disruptive and dangerous.''
Seattle P-I
, 11/3/74, Article by Kingsbury Smith, European Director and Chief Foreign Writer. The Hearst Newspapers, titled: "Threat of New War in Mideast."Another Arab-lsrael conflict is likely to bring the United States and Russia to the brink of nuclear holocaust that could imperil survival of the human race.
and further on in the article:
Sen. J. W. Fulbright, D-Ark., also said there is acute danger of a nuclear war in the Middle East.
Before 12 months have passed, the United States may well be facing military action in the Gulf to counter another oil embargo.
and further on in the article:
Yet another Middle Eastern war, plus another anti-United States oil embargo, Plus all the rest that now threatens in that area, will fatally upset the world's balance of power. And that was the real trouble in the 1930's.
If is reassuring to be told that there will be no war this week, but most observers here think the problem is not to minimize the dangers of war there (the Middle East) but to prepare quickly for a situation that is very likely to get out of control in the next six or nine months.
and further on in the article:
"The Soviets," he (George Ball) concludes, "have continued to compete directly with us for influence in the Arab World and to frustrate all of.our moves toward peace. And the danger that the Middle East might become another Balkans involving the superpowers in a nuclear confrontation should never be lightly dismissed. "
State Department strategists have warned grimly that a resumption of the Middle East war almost certainly would lead to another Arab oil embargo. This would be a disastrous blow, in their opinion, to the U.S. economy -- an economic Pearl Harbor that would plunge the United States into a severe recession.
and further on in the article:
But as we reported in an earlier column, a new oil crisis could cause the United States to change its policy. The United States will take military action, if necessary, to protect its "vital interests" and some strategists have suggested privately that another oil embargo would affect the nation's "vital interests. "
BW:
How long do you think the economies of Italy the United Kingdom, and France can go
without serious trouble because of the strains imposed by the oil deficits?
Kissinger:
All West European economies, with the exception of the Federal Republic of Germany, are
going to be in more or less serious trouble within the next 18 months. Which is another
reason for striving for a much closer coordination of economic policies.
BW:
Can this economic trouble lead to politicaI trouble ?
Kissinger:
Without any question. Every government is judged not only by its performance but
whether it is believed to be trying to master the real problems before it will erode. F.D.
Roosevelt could go along for several years without a great improvement in the economic
conditions because the Public believed he was dealing with the problems. The danger of
purely national policies is that they are patently inadequate for dealing with economic
problems -- especially in Europe -- and, as the sense of impotence magnifies, the whole
political base will erode.
As it is, the Communist vote in Italy, and to some extent in France, has remained constant regardless of economic conditions. A substantial proportion of the population has felt sufficiently disaffected with the system, even when the system was performing well, that they voted Communist in order to keep the pressure on. As the Communist vote grows, the flexibility of the political system diminishes. Economic decline in Europe would therefore have serious political consequences.
BW:
There appears to be a rise in enthusiasm for the far right, too, a feeling that what is
needed is an authoritative man that can cope with these labor problems, these inflation
problems, etc.
Kissinger
If you have a major economic crisis, the emergence of authoritarian governments of the
left or the right is a distinct possibility.
Earlier in the interview Kissinger gives his statement on military action in the Middle East:
BW:
One of the things we also hear from businessmen is that in the long run the only answer
to the oil cartel is some sort of military action. Have you considered military action on
oil?
Kissinger:
Military action on oil prices?
BW:
Yes.
Kissinger.
A very dangerous course. We should have learned from Vietnam that it is easier to get
into a war than to get out of it. I am not saying that there's no circumstance where we
would not use force. But if is one thing to use it in the case of a dispute over price,
it's another where there's some actual strangulation of the industrialized world.
President Ford has personally backed up Secretary of State Henry Kissinger, saying the United States might use force if the industrialized world were strangled -- "just about on your back '' -- for want of oil, but not just to lower prices.
and further on in the article:
In Brussels, Joseph Luns, secretary general of the North Atlantic Treaty Organization
(NATO) agreed with Mr. Ford. "I would say any nation, faced with strangulation, is
likely to consider the use of.force," Luns, who is Dutch, said yesterday. "it
has rarely been in history that a country accepts being strangled without taking some
counter-measures. "
Forty-five years ago the Great Depression began with a crash on Wall Street and by the time it staggered to its halt the whole world had been shaken out of fat-dripping illusions. Now we appear to be on or over the brink of a similar collapse although -- as in 1929 -- few leaders are willing to admit it and even the prissy word "recession" is disliked.
and further on in the article:
Let us not forget that the great depression of the I930's produced in Roosevelt's New
Deal radical social reform that saved American democracy-and also Hitler's Nazism which
wrecked the world.
It is accurate to say that the great industrial countries of the Northern hemisphere are no longer lords of creation. The time is long since past when London, Paris and Berlin could dominate the affairs of the world. The time may be passing in which most initiatives in the world began either in Washington or Moscow.
J. William Fulbright, D-Ark., ended 30 years in the Senate last week convinced that industrial nations, including the United Stares, face economic and political collapse unless they can gain a substantial reduction in oil prices in the next few years. "It's very serious, this continued erosion of the economic base of the non-communist world, " he said in a farewell interview with UPI. "It's no small matter. I think it is much more serious than the administration seems to think." Fulbright said if was crucial to persuade oil producing countries within the next five years to lower their prices from $10 or more a barrel to a "reasonable price" of $7 or $8 a barrel. "Otherwise, we are all going broke, " he said. "And when I say broke, I mean the system -- I mean the non-communist economic system -- is very likely to collapse and with it the individual countries." "As you know, the political system usually goes with it, and you get a trend towards authoritarianism, and everything else. "
Chou's speech called on people of all countries to prepare for war.
further on in the article:
Meanwhile, barring military intervention, the industrialized world has to go on buying
cartel oil at cartel prices, and money galore will keep flowing to the exporting
countries.
further
on in the article:
I think now that if a secret poll were taken of the most admired officials having to do
with this country's dealings with the rest of the world, an actual majority would prove to
be pessimists about the American future. And here, mind you, I am not even speaking of the
kind of economic, monetary and financial difficulties that have suddenly begun to loom
almost as large as they did in the 1930's, when I first went to work.