DUCKLINGS wo $18), 99° EMPRESS. PEANUT BUTTER $369 SNOW STAR ICE CREAM 4293" BEL-AIR ORANGE JUICE Save 57¢. Frezea Concentrate. 355 ml (12% fi. oz.) Container Canadian against its U.S. While the dollar — wr down 19-100 at 80.10 cents US. at close of trading Tuesday — hae lost ground against the U.S. currency, it has held its own against most European currencies on foreign Some money traders’ even tout it ab the second- currency. “It's extremely strong compared with other cur- rencies,” says Mike Manford, chief economist with Merrill Lynch Canada In. “I think people are getting much too concerned about its performance.” And while exporters are bemoaning a high Canadian currency, which. reduces demand for the country’s products, recent figures show exporters also are holding their own. The dollar has lost strength against the U.S. dollar for about a month, slipping finally to 79.78 cents U.S. on Jan. 16, a 17-month low. But the Canadian dollar has stood up well against most other mojor currencies. For example, one British pound in 1970 was worth $2.50 Canadian. It was worth $2.19 in 1978, $2.16 in 1982, and fell to its current level of $1.76 Tuesday. The dollar's value in 1983, compared with 1982, rose about 11 per cent over the West German mark and the Swiss franc and 11" per cent over the British pound, said Manford. YEN INCREASES ‘The Japanese yen has increased fractionally against the dollar since 1982, but has been worth roughly half a Canadian cent since about 1978. Manford said he is optimistic that by March, inflation in Canada, which has fallen to 4.2 per cent, will match the U.S. rate, which stands at 3.2 per cent, but is expected to rise. “The lower your inflation rate, the higher the cur. rency,” he said. monthly surplus, the first since April, will start an upward trend. Johnson fears November's exception rather than a rule. He anticipates that for the first six months of this year, exports will because Canadians will) have trouble compet markets abroad, where currencies have fallen deeper. But he said exports should pick up toward the latter start half of 1984 when may be an lecrease with at Canada’s rate and their currencies start to rise. Jim Moore, secretary of the Canadian Export Asso- ber'’s figures are ciation, says When the economy abroad recovers at a faster pace, there is greater demand for goods and more markets are created. ‘And the market in the United States, which accounts for close to 70 per cent of Canada's exports, is growing at a rate of an estimated five to six per cent in 1984. But while the dollar remains high against most major currencies, exporters will have to cope with trimmed prices. Johnson said the Bank of Canada has increased its trend-setting interest rate the last two weeks only marginally because it is not alarmed about the dollar's slide. Three weeks ago, the central bank raised its rate to 10.04 per cent, the highest rate of the year, when the dollar slipped below the 80-cent U.S. mark. Higher interest rates attract investment to the country, boosting demand for the currency and increasing its value. EDWARDS COFFEE $1.30. tage or Fine, 907 £2 b) Te Pulp industry faces shutdown VANCOUVER (CP) — British Columbia's pulp and paper industry faces a shut- down next week in a contin- uing contract dispute. The Pulp and Papere In- dustrial announced at a news con- ference Monday it will lock out the 9,000 members of the Canadian Paperworkers Union and the 5,500 members of the Pulp, Paper and PARTY PRIDE POTATO CHIPS LUCERNE rae . $128 MRS. WRIGHT'S — _CAKE MIXES of Canada Feb. "Here's GUITAR HEADQUAR RTE: OF THE KOOTENAYS ns Pa 840 ante Ave, Trail Carol Magaw Dianna Kootnikoff ADVERTISING SALES CASTLEGAR NEWS 70 ORAWER 3007 CASTUGAR. AC iN ad OFFICE 365-5210 (FALCON PAINTING & DECORATING 2649 CASTLEGAR FOURTH - AVENUE B.c ORANGES 3..99° Senkist. California Grown. : Size 138s. kg 73¢... Prices effective Jan. 26, 27 & 28 IN THE CASTLEGAR STORE SALES IN RETAIL ‘QUANTITIES ONLY 365-3563 AN mit So MIKE’S RADIATOR REPAIR 2 if they refuse to resume contract negotiations by next Monday. Leaders of the two uniors replied there is no way the unions will return to the bar- gaining table at that time. A lockout would involve 14 pulp and paper companies and 20 mills that produce 25. per cent of Canada's news- print and negtly two-thirds of the “country’s pulp produc- tion. Negotiations had already been going on for seven months when the companies made an offer the unions subsequently rejected, and Saunders said the uncertain- ty is making a lot of the cus- tomers uneasy. No customers have actual- ly cancelled contracts, but Saunders said they are look- ing to other suppliers par- ticularly since there is a glut of pulp and paper products in the world market. He said the worst thing that could happen to the in- dustry is to allow the uncer- tainty to continue. The sec- ond worse thing, Saunders said, is a lockout. Saunders said none of the 14 companies wants to have to lock out employees and shut down the mills that now are running at more than 85- per-cent capacity in the re- covery that is just starting. Replied Art Gruntman, B.C. president of the Cana- dian Paperworkers Union: “One thing the industry had better understand, I think it is utterly irrespon- sible with its sabre-rattling. It is arrogant of them to think that they can dictate the schedule for collective bargaining.” Gruntman, in Montreal for national union meetings, said his union never intended to resume talks in January. He said he told the industry's chief negotiator, Dick Lester, that union delegates had been called to a meeting Feb. 13 to determine where to go with the negotiations. Jim Sloan, president of the Pulp, Paper and Woodwork- ers, said the industry officials are assuming that the Inter- national Woodworkers of America will accept the con- tract. recommended by its negotiators. gfe TORONTO (CP) ~ Canada’s major banks are ural penal tba io aabocta end Yo clod tha affability. One, dably, is Dome the Calgary oil company that can't repay. the “$4 billion it owes them. ‘The other is government deficits and what they're doing to the economy. ‘The debate over deficits is the central economic issue of our time. The heads of four of the Big Five banks used the forum of their recent annual meetings to blame deficits for high interest rates and inflation, They urged Finance Minister Mare Lalonde to eut spending in his forthcoming budget or to fight pecan The Canadian national debt, the accumulated total of annual deficits and the interest costs of paying for them, is more than $180 billion — more than $5,000 for every man, woman and child in the country. In the U.S. the national debt will hit $1.5 trillion this year, equivalent to more than $6,500 for every American. The usual argument about the depressing effects of a large deficit is big deficits create big demand by government for money, crowding out private borrowers from capital markets, thereby pushing up interest rates and forcing governments to print more money, leading to surging inflation. DEPRESSES ECONOMY ‘That prevents people from spending money on consumer goods, housing and business investment, sending the economy hurtling downwards. That argument sounds logical, except that current trends suggest the opposite. Ottawa’s budget deficit soared in 1982 and again last year, but Canadian inflation dropped to 4 12-year low of around five per cent. The U.S. had a ‘similar experience. And even though there's been an increase in govern- ment demand for money in capital markets, the supply of money has also grown, with the overall impact on interest rates small. The main reason rates are high in Canada is that the central bank keeps them that way to protect the value of the dollar by preventing an outflow of money to the U.S. Ina report on deficits released this week by the Ontario Economic Council, U.S. economist Franco Modigliani argues that deficits don't cause inflation. Instead, they're caused by inflation. It's inflation that pushes up interest rates and increases the costs of paying off debt. Modigliani argues that industrial countries finance deficits by selling bonds, not by printing money. Some anti-deficit crusaders argue that while one or two * annual deficits won't hurt the economy, a series of them will undoubtedly cause severe inflation and other disasters. That's the argument Toronto-Dominion Bank chairman Richard Thomson gave approving shareholders this week. He said it’s time the government took note of the “storm signals” and focused all its attention on reducing the deficit, which was revised d earlier to an d $28.8 billion for the current fiscal year. DRIES UP MARKETS Modigliani argues the same thing, saying that in the long run a series of deficits will dry up capital markets. But even this long-term theory has its opponents. Reuben Bellan, an economics professor at St. John's College in Winnipeg, says that from 1931 to 1936, the Canadian government ran an unbroken string of deficits that averaged nearly five per cent of the gross national product, equivalent today to yearly deficits of more than $15 billion. But in that six-year period, at the height of the Depres- sion, the general price level fell by about 20 per cent. Between 1942 and 1945, to finance the war effort, Ottawa borrowed at a rate equivalent to about $75 billion a year today. Consequently, the national debt was four times higher in 1946 than it was in 1942. But inflation, influenced by wartime price controls, increased less than five per cent. INTEREST REIMBURSEMENT PROGRAM FARM OPERATORS: J You will receive your 1983 PARTIAL INTEREST iW REIMBURSEMENT under the Agricultural Credit Act if you are eligible and apply not later than MAY 31, 1984 Application £ forms are available at offices of the British Columbia Ministry of Food, Sr Faderet ail forms together. Note mailing. credit unions, Farm Credit Corporation ( D Bank, The Director, Veterans’ Land Act, ‘and The Western Indian Agricuttural Corporation Limited. Farroperstors who intend to aubrrit more Sen 8 a Mineral industry grows OTTAWA (CP) — The Canadian mineral industry saw a sustained but moder- ate growth in 1983 with the total value of mineral pro- duction up by $2.2 billion from the previous year, the Energy Mines and Resources Department said. After the sharpest down- turn in its history, production » in the industry's four Sectors — metallics, nonmetallics, structural materials fuels — reached almost $36 billion, up from $33.8 billion in 1982. The metallic sector, which ceived. oe isra arin be vert by regitered mailto provide proot ‘The reimbursement level for the 1983 Program is to 10.25%. The amount of by an will be ded a 20-per-cent drop in value in 1982, reached $7.2 billion in 1988 while the production value of nonmet- by “ceiling allies and structural materi- rates” For details of the ‘The maximum benefitis $10, poataraachisparsten hout the als reached a total of $3.6 billion, down slightly from the previous year. or other dit Branch, Victoria 387-5121 {local 212 or 224), Mail applications postmarked no later than May 31, 1984. contact the Agi Cre- MINOR SPORTS Sure, we're interested! Phone the Castlegar News for details on how to get reports of your organization onto the Sports pages. 365-3517 His gon, who attended much of the preliminary hearing in November, wept in the public Besulne's ruling follows a week-long preliminary hearing which often sounded more like TV cops and robbers than the day-to-day work of Canada’s counter-espionage service. ¥ Past and present RCMP officers identified Morrison in court as the high-living Mountie code-named Long Knife who sold the Soviets the name of a double agent to help cover his ever-mounting personal debts. AGENT RECALLED The double agent, code-named Gideon, was recalled tq Moscow and presumably killed since he hasn't been heard from since. Evidence at the preliminary hearing, which could not be printed until today because of a publication ban, indicated the RCMP first discovered their top-secret omer had been ‘sabotaged in 1957 when Morrison approached the: But they did not prosecute him under the Official Sec. rets Act at the time. Charles Sweeny, an RCMP.corporal in 1957 who rose to become assistant commissioner, said the national police force was more concerned st the time with protecting national security and determining what infor- mation may have been passed to the Soviets. Several wi said that made month to pay for equipment used to monitor ctaverstios within the Soviet Embassy. But he kept two months’ cheques to pay for his one * debts. He was allowed to repay the money, but was them / TRMES yi _ . Sweeny, who retired in 1978, became Gideon's case officer dnd the two men were to meet many times between 1968 and 1955, posing as a photographie equipment supplier 80 he could visit Soboloff at his studio outsidé Montreal. Sweeny Gideon as a “back: torn between his family in the Soviet Union, yet hopelessly entangled with the wife of a Canadian armed forces officer in Kingston, Ont. It was a constant battle to keep Gideon in line, appearing to work for the Soviets, Sweeny said. Gideon often had to be pulled into Ottawa for pep talks. On one occasion Morrison was asked to chauffeur Gideon back to Montreal. In the spring of 1955, Gideon announced hé was being called back to Moscow. The RCMP wasn't worried because it was normal practice to recall Western agents for reindoe- trination and training in the latest spy techniques. They fully expected Gideon to return to Canada or another Western country. But the last the RCMP ever heard of him was a p d transferred out of the security service. Sweeny and Morrison met at an Ottawa hotel where Morrison's confusing story began to unfold. Sweeny said Morrison first told him the Soviets approached and tried to recruit him while he was still working in Ottawa. Sweeny and Len Higgitt, head of B branch; him, but said they were suspicious that an RCMP officer, Sened in security work, could withhold such a story-for so ra However, they went along and allowed Morrison to arrange a meeting, with Soviet officials. Neither that meeting, nor a backup meeting, ever took place, Sweeny and Higgitt told the court. : Morrison was hauled into RCMP headquarters, detained under RCMP regulations and interrogated for several days. Eventually, the RCMP got what they felt was the real story — their prize operation had been scuttled by-one ‘of their own men. Sweeny stressed the interrogation was never aimed at from Paris, one of his last stops before returning to Moscow and the KGB. ‘The story then jumps to a private party in Ottawa and the early morning hours of Dec. 8, 1957, when Sweeny, now “Our objective ‘was to confuse the Russians, he told the court. “Security service looks for information which can be used against the Russians.” “BUY NOW" while selection Is Ot its Best, or wait until the discount Increases, Jan. 23-Jan. 31 All Fabrice ..... 30 — INSTOCK — DRAPERY 20% Off FABRIC FOR THE MONTH OF JANUARY CARTER’S SINGER ove SS SEWING CENTRE Castleaird Plaza 365-3810 Waneta Pic 364.1744 during intense ing at RCMP di ters in 1958 would have been labelled an involuntary confession and tossed out of court. Instead, Morrison was charged and convicted of writing bad cheques and was dismissed from the national police foree. FILE REOPENED First evidence the government felt could lead to a conviction on spy charges came not through police work but investigative journalism. The government ordered the Long Knife file re-opened in late 1962 after journalist John Sawatsky published a book about RCMP security service operations, For Services Rendered. Chapters on Long Knife and Gideon came from inter- views Sawatsky conducted with past and present RCMP officers and Long Knife himself. Just before his book was to be published, Sawatsky ar- ranged for Long Knife to be interviewed, wearing an ill-fitt- ing disguise, by Eric Malling of the CBC current affairs program, The Fifth Estate. And, after reading excerpts from Sawatsky's book, Winnipeg Free Press reporter Mike Ward tracked Morrison down at his Prince Rupert home and for the first time Morrison publicly admitted he was Long Knife. It wastoo good an opportunity for the government to pass up. Joep Hod Stamler of the RCMP’s narestice divietee Bes assigned to investigate the case. Morrison was arrested last June and pleaded not guilty. Tis un saleaoed ca $80,000 bail. But the story, as told to the court, begins in the early 19608, when Morrison was a constable, later corporal, in the socurlty —_— new counter-espionage unit, part of a ponsible for sur of Soviet bloc Seung prrosanal ta Otiaws. Witnesses painted Morrison as a man with champagne tastes on a beer income. He was a flashy dresser, drove spiffy new-model cars with all the options, smoked cigars — the bigger the better — and lived in a fashionable home in one of Ottawa's new subdivisions. He was constantly in debt and one of the first things new recruits were told was not to lend him money. One day in late 1953, Sweeny received a from the RCMP’s A Division, responsible for nCuP operations in the national capital. A Division wanted to know whether “special branch,” as, the security service was then called, was running a secret CESS FIREPLACE BUT TE eAUSES HEARTH BURN. This is one in a series of advertisements designed to explain how CP Rail is working today to meet Canada's transportation needs of the future. “GRAVITY AND COMPUTERS TEAM UP FOR IMPROVED RAIL SERVICE.” Harold E. McAlee is: general yardmaster at ‘CP Rail’s Alyth Yard i Calgary. A CP Rail employee for $7 years, he heeds @ team of = into trains, with the help of Newton's law of gravity, a computer — and binoculars. Isaac Newton would have been proud. For years, CP Rail has been putting his apple idea to work, using gravity to sort up to 140 trains a day at key railway yards across Asa matter of fact, we've tedmed computers with Newton's discovery of gravity to make car sorting and train assembly in our classification yards even more efficient and faster. _ Gravity is put to work § simply by building a little hill - which we call a hump - on the receiving end of classification n tracks. Sorting and assembling trains istbasical ya simple process. ‘Trains pull into our classification yard with freight Canada. Most cars are pushed to 1 with hel velo saduanetae mead tine nine car, it calculates in milliseconds, how fast the car Cn 73 nilencl beck ase Rais Ath Yard in Calgary, up to. investment has allowed the Alyth Yard, witha 5. in North America. cars already there» an 18,000 FREIGHT CARS RTED EACH DAY ‘The final step in the process of sorting cars is to pull groups of carsto a departure yard. There they bre made up itto Dew trains or delivered to their local destination. Up to 18,000 oars ere sorted every day in CP Rail’s pines Resp wcnm es mer ‘They carry goods coming Sade aah elocwen termine as well as pepe verrminals fez trans. php ny ar Bee oe a i tecueh anaes eaprem waine and and solid for bi Together they give CP Rail the capability of moving he ieion See eee Safely, Cost. For Canada’s shippers, they mean improved. Service - getting things from where they are to where they are needed. Upto CP Rail yards across Canada: Tee yer aro vial lids in the 18.500 in ro a ce Da jolewe ae move to market. Grey af ore. A simple idea and high