European Stars and Stripes (Newspaper) - September 8, 1967, Darmstadt, Hesse                              Page 4 the stars and stripes no help to ., official says Friday september 8, 1967 Gem Swap loses glitter by Robert Gray Washington a in complicated Trade to acquire $24 million of uranium it did need the  Government swapped surplus foods for $27million Worth of Industrial Dia monds it did t need either the comptroller general has told Congress. In a report on the dealing Elmer b. Staats disagreed with the claim of executive Branc agencies that the transactions helped ease the Dollar Drain. He argued it had the opposite effect. Figuring in varying degree sin the arrangements in late 1965 were the balance of payment Issue foreign policy the nation Al stockpile of strategic mate rials agricultural surpluses South african uranium Dia mond smuggling in the Congo the atomic Energy commission and the agriculture state Treasury Justice and defens departments. Just a simple business Deal a spokesman for the comptroller general commented tuesday in providing additional details. It began when the govern ment concerned about the Dol Lar Drain stemming from a Long term contract to Purchase uranium from South Africa decided to shift to a barter arrangement. In such transactions a government Agency purchases sur plus foods from the commodity credit corporation. Private con tractors sell the foods abroad. The foreign Exchange realized is then used to finance  Pur chases without spending Dol Lars thus easing the Drain on  Gold supplies. The United states agreed in1953 to Purchase the uranium when it was Short of that mate rial. By 1962, it had developed reserves and no longer needed uranium being produced abroad the comptroller Gener Al said. But the Purchase contract was still enforced. After extended discussions including revisions to meet jus t i c e department complaint about a Lack of Competition on bidding a package plan was arranged. Eight contractors would takeover enough surplus food to raise foreign Exchange for $30.7million Worth of defense department needs in Europe $24.7million Worth of uranium and $27.7 million in Industrial Dia monds from the South african National stockpile. The comp troller general s office said the contractors were basically Diamond dealers. The Treasury department approved anticipating a favourable effect on the balance of pay ments. The state department suggested if diamonds were to be acquired they be bought in the Congo to help that country s Economy. The International Dia mond Syndicate had reduced its purchases there on the ground that a lot of diamonds had been smuggled out and sold through other organizations. But the comptroller general Aid there were already too Many Industrial diamonds in . Stockpile of strategic mate rials and there was no need forbore. The $27.7 million in Agri culture commodities that eventually financed the Diamond Purchase could have been use to barter for goods actually needed the report continued. The Over All result of the transaction was to deprive the United states of an Opportunity to favourably affect its balance of payments position by an additional $27.7 million Staats wrote. The agriculture department agreed with Staats View that each Dollar of the barter that went to acquire unneeded strategic materials tended to de crease balance of payments , we Are limiting strategic material barter Tovery exceptional cases the department said. S tax plan nearly ready by Joseph Washington a the Johnson administration is near ing completion of a tax Reform package incorporating the first overhaul of estate and gift taxes in a Quarter Century. But the re vision is unlikely to touch the27 per cent Oil depletion allow Ance. Viet Winner and family celebrating election Victory with South Vietnam s president elect Nguyen Van Thieu Are his wife Mai Ann daughter Tuan Ann 14 and son Loc 6.thieu introduced his family to newsmen in the Garden of their Saigon Home. A photo president s hat Campaign threatens health Aid Bui by Carlp Leubsdorf Washington a the administration s controversial proposal for a new Federal rat extermination program rejected once by the House now threatens to delay a $1 billion health Aid Bill. Two congressmen plan to add the rat measure to the health Bill but the administration opposing this wants to set up a rat killing program in the department of housing and Urban development Hud. The rat Bill which would have authorized Hud to spend $40 million Over two years was turned Down 207 to 176 in july when the democratic leadership sought to bring it up for House debate. Most republicans an Southern democrats opposed it. A major objection was that i would be wasteful to Start a new program when the funds could be put into one of the govern ment s existing programs. This argument was made Byre. Henry s. Reuss d-wis., a Liberal and usually a Strong administration supporter in views filed with the banking commit tee s report on the measure. However when debate last Julyon whether to even take up the Bill became heated and parti san Reuss backed the demo cratic leadership s attempt to bring it to the floor. Republicans eager to explain to their constituents Why they opposed the rat Bill in the Wake of critical editorial comment about their actions quickly too to quoting Reuss on the waste Issue. Two weeks ago Reuss Andrea. Charles Mathias of Mary land a Liberal Republican who supported the rat Bill in july announced they would seek Todd $20 million for rat extermination to the authorization for development of health services when the so called partnership for health measure is consid ered in the House. This Bill an expansion fan existing program which gives Block Grants to the state for health programs would authorize the spending of an additional $950 million through fiscal 1971 plus some $157 million previously authorized for this year. Despite the Large amount of Money it is a relatively uncontroversial Bill except for a $58million emergency Aid program for overcrowded hospitals which Commerce committee democrats added to the Bill Over re publican objections. The Reuss Mathias proposal would undoubtedly get Strong bipartisan support several re publicans who opposed the sep Arate rat Bill have made it Clear they would Back such an amendment. But the administration insists the proper place for a major Campaign against rats is in Hud because rats Are primarily an Urban problem. A Senate banking subcommittee has already included the rat Bill in a comprehensive housing measure and the administration Hopes to bring it up this Way in the House too. Mean while the administration is hold ing up the health Bill. R. Coyne As now contemplated Theta reforms would apparently result in no tax Windfall for the Treasury department but would basically represent a shifting of tax burdens. This would run counter to sup porters of a congressional drive to tighten exemptions and Spe Cial preferences in the present tax Law to reduce or even eliminate the need for a tax increase. One of the targets is the Oil depletion allowance which some critics want lowered to 15 percent. The depiction allowance is portion of the income from producers sales of Petroleum which is exempt from taxes. The theory behind it is that the sales represent disposal of Capi Tal assets rather than net gain. Opponents of the allowance have tried unsuccessfully for years to lower it. Present Indi cations Are that they la get no help from the administration this year. Instead the Reform programs expected to cover estate and gift taxes Industrial , Tak exempt foundation s and churches and the multiple. Exemptions corporations sometimes claim by set Ting up paper subsidiaries. Officials Are also discus sing but Yio decisions have been made the possibility of including the changed tax treatment of the elderly which the House ways and Means committee rejected in approving an increase in social Security  this system the exclusions for tax purposes of social Security benefits the retire ment income credit and the extra $600 personal exemption foraged by a Flat exempt tion$2,300 for single persons and $4,000 for married  program would not affect the tax free status of 16 million elderly who pay no tax. About 2.8 million would enjoy tax cuts the Treasury said. The taxes of the remaining one million elderly would be raised. President Johnson Hassid he will Send his tax Reform message to Congress this year not for immediate action but to get the package in line for next year. The administration did no couple tax reforms with its re quest for a 10 per cent tax sur charge for fear of delaying the surcharge and because the Bill for higher taxes is considered temporary. Tax Reform would be permanent and Likely to pro Duce extended debate in con Gress. The so european edition col. James w. Campbell Usa editor in chief it. Col. F. 8. Michael jr., Usan Deputy editor in chief Arnold Burnett managing editor Elmer d. Frank production manager Henry s. Epstein circulation manager an unofficial newspaper of and for the  Armed Forcet printed Dally at Darmstadt Germany under the auspices of the office of the chief of Public affair. He Usa eur. Military address the 8tar and stripes Apo 09175. International mall the stars and stripes Postrach 1034, 61-Darmstadt, Germany. Tell Gale Shell c prefix 06155 �071 m Darmstadt air strip prefix 2376 741. New York office 641 Washington st., new York 10014, Tel area code 212 620-5771. Second Cla postage paid at new York . ". The United states is an open society in which the people s right to know is cherished and  president Lyndon b. Johnson