The MacNeil/Lehrer NewsHour

INTRO

ROBERT MacNEIL: Good evening. New figures out today point to the lowest wholesale inflation rate in 20 years. We'll have a roundup of economic news and examine a growing dispute over the rates banks are charging small business. If you're here at the end, we have an unusual look at that rare individual, the real working American cowboy. Jim Lehrer is off; Judy Woodruff's in Washington. Judy?

JUDY WOODRUFF: And tonight, Robin, we update the continuing developments in the Lebanon story -- a new ceasefire but some shelling anyway, and two ships are on their way to evacuate Yasir Arafat and his fighters. And we have election news -- not Campaign '84, but Vote '83, In Japan, where we get a preview of Sunday's vote from a Tokyo reporter, and in Jamaica, where a politician's dream of an unopposed election might turn into a prime minister's headache. We'll find out from victorious Edward Seaga.

MacNEIL: The government had more good news on prices today. In November, wholesale prices fell by two-tenths of a percent. It was the first drop in eight months. It means that for all of 1983 the wholesale price inflation will probably stand at less than 1%, the best performance in two decades. In 1980, wholesale prices were rising by close to 12% a year. Private economists use adjectives like "fantastic" and "amazing" while the White House said it was remarkable news that indicates we're well on target for sustaining economic growth with lower inflation. Lower food and energy prices were largely responsible for the wholesale drop. For most Americans the more meaningful measurement of inflation is the consumer price index, due out next Wednesday, which measures a broader range of items, including housing and medical care. So far this year, consumer prices have risen at an annual rate of 3.9%. We'll have more economic news later in the program.

Judy?

WOODRUFF: In Lebanon the warring factions agreed again today to stop shooting, and immediately President Gemayel ordered the airport open to traffic. First, the runways had to be cleared of rubble, and a call went out for Lebanese teenage volunteers. Here is a report from Brian Stewart of the CBC.

BRIAN STEWART (CBC) [voice-over]: Beirut civil defense rescue workers made a dash for the city's airport today, but for once they weren't out to pick through rubble for shattered bodies, their normal duty. Instead, they were given brooms and were told to sweep. Sweep they did, all the bits of shrapnel and stone cast about through 18 days of fighting. This is how Beirut's much-battered airport came back to life as another truce began. The excitement was contagious. Government officials told the airport, "Get it open. This truce looks like it will hold for weeks." Airport officials said, "Give us four hours, then bring on the planes." All the teenage volunteers worked for free; they don't see many good sights in Beirut but today they had fun.

1st VOLUNTEER: Because every day bombs came and they came --

2nd VOLUNTEER: I think it's better. I think it's better because we work for -- we work for family, for everybody. That's what's I think.

STUART: This stretch of runway is often the main target of the Druse gunners in the hills just behind, but as this cleanup operation continues there has been no fire at all coming from their positions. The Druse are up there watching this spectacle, but today at least watching is all they're doing.

[voice-over] And tonight, sure enough, Beirutis had their windows shaken by the roar of planes landing and departing; the volunteers had done it. No one here complains about noise pollution. This roar means that enemies are talking and the guns aren't, possibly not for long, but at least for tonight and just maybe tomorrow.

Brian Stewart, CBC News, Beirut.

WOODRUFF: It didn't last until tomorrow. Within hours, six shells exploded near one of the runways, but they caused no damage and the planes kept coming in and going out. This Sunday the foreign ministers of Lebanon, Syria and Saudi Arabia are scheduled to meet in Damascus to set a date and place to reconvene the national reconciliation conference, the body that first met in November to try to work out the political, economic and social reform that would end eight years of civil warfare.

Fifty miles to the north of Beirut in Tripoli, Israeli gunboats staged their fourth assault in a week against PLO Chairman Yasir Arafat and some 4,000 loyalists. Reports were that Arafat's troops returned fire to the Israelis, who had slipped, with lights out, into firing positions near Tripoli. There were no casualties reported on either side. The shooting came as Arafat and his men are waiting for five Greek ships to pick them up beginning on Monday. Here is a report from Denise Erickson of Viznews.

DENISE ERICKSON (Viznews) [voice-over]: They first ship to leave Athens is the 5,000-ton Vergina. She and four other passenger liners will arrive in Tripoli by Monday so the 4,000 Arafat supporters and their families can begin boarding at first light. The ships will then set sail for Tunisia and for North Yemen. The Greek government says that it has the necessary guarantees for the vessel's safety. There has been consultations with the government of Lebanon, Syria, Israel and the four powers in the Beirut peace force. All but Israel have guaranteed the safety of the vessels, but she has refused to say publicly that the Israelis will not bombard ships evacuating Arafat's men.

WOODRUFF: Donald Rumsfeld, the U.S. Middle East Envoy, is in Tel Aviv for meetings with Israeli Prime Minister Yizhak Shamir and Defense Minister Moshe Arens. Yesterday Rumsfeld talked in Damascus with Syria's President Hafez Assad.

And another American will be heading for the Middle East early next week. Bob Hope will entertain American troops stationed in Lebanon over the Christmas holidays. He won't actually land in Lebanon, but will perform on ships offshore, and troops will be ferried back and forth. The 80-year-old entertainer will be continuing a tradition he began during World War II of visiting American servicemen abroad during. Christmas. Hope's entourage will include Brooke Shields, Vic Damone and the current Miss USA, Vickie Hayek.

Robin? Small Businesses and the Prime Rate

MacNEIL: Returning now to economic news, besides the drop in wholesale prices there were these developments today. Gold prices fell and the U.S. dollar soared to a new record high against the British, French and Italian currencies. Dealers said the dollar was buoyed by expectations of high U.S. interest rates and continued concern over the situation in the Middle East as well as fears of a sharp rise in the money supply here. The money supply figure was announced late today and showed a weekly increase of $5.5 billion, an amount that had been anticipated. On Wall Street the Dow Jones average of 30 industrial stocks closed for the week at 1242.17, nearly 20 points below last week. The fears of foreign currency dealers that interest rates would go up have been echoed in similar rumblings here. Two days ago, one of Wall Street's most influential forecasters, Henry Kaufman of Salomon Brothers, predicted that the prime rate -- the rate banks charge their best customers for loans -- would go up from the current 11% to 12 or 12 1/2 percent next year and even higher in 1985. The prime rate not only affects Wall Street and big corporations, but small businesses around the country. That's because the interest rates they pay on their loans are pegged to the prime. The level of interest rates charged small businesses has ignited a major debate and a fight in the courts, and that's what we examine next. Judy?

WOODRUFF: With us tonight is a lawyer, Mr, Jackie Kleiner, who is suing several banks around the country. He argues that the banks have been unfairly charging small businesses higher interest rates than those charged big business. Mr. Kleiner, just how much of a difference is there between the rates that are being charged to the big businesses and the small ones?

JACKIE KLEINER: Approximately 4 1/4% per annum. In other words, the smaller businesses are being charged about 4 1/4% per year more than the larger businesses.

WOODRUFF: Now, is this widespread? Is this all over the country?

Mr. KLEINER: Oh, yes. It's everywhere from East Coast, West Coast, north and south.

WOODRUFF: Why are the banks doing this?

Mr. KLEINER: Well, the banks will tell you that small businesses are not as good risks as large businesses. I have found that to be a myth. The examination of the banks' lending rate policies determines that a small business is a higher risk mainly because it has less capital. But we have a self-fulfilling prophecy here, Judy. . What happens is the bank qualifies a small business to get a higher rate, thereby forcing the small business to pay more for interest than a larger business and being put at a competitive disadvantage.

WOODRUFF: Well, now, you are in the process of suing 20-some banks right now. You have already arrived at settlements with, what? about 15 others?

Mr. KLEINER: That's correct.

WOODRUFF: What exactly are you saying that the banks have done? What law have they broken?

Mr. KLEINER: The law that they have broken is simply breach of contract and fraud. Putting it in simple language, when you have a bank that says its prime rate is its best rate, the rate that it's supposed to give its most credit-worthy corporate borrowers on unsecured short-term loans, and then the bank adds on to that, which it's entitled to, for the small businesses and yet it doesn't use the barometer that it says it should be using, that is basically a deception.

WOODRUFF: Well, what's an example of that? I mean, can you give us an example?

Mr. KLEINER: Oh, of course. I'll give you an example right in Atlanta where Coca-Cola was getting loans at five points below the stated prime rate when I personally was paying one point over the prime rate. My particular loan had $100,000 certificate of deposit as security so it was absolutely risk-free. Coca-Cola's was unsecured. I don't claim to be Coca-Cola, but there's tremendous disparity between giving Coca-Cola up to $15 million unsecured at five points below prime when the prime is supposed to be the best rate.

WOODRUFF: Well, so what are you saying? Are you saying that the rate should be the same charged small businesses and big ones?

Mr. KLEINER:I'm saying that if the banks won't recognize that small businesses are good risks, which they are, but say they're bad risks -- which they're not -- even if they do that, they should give full disclosure that the barometer that they're using, the prime rate, is not their best rate. In fact, the prime rate is only one rate that banks use.

WOODRUFF: Well, it sounds as if you're saying that the prime rate is meaningless --

Mr. KLEINER: Yes.

WOODRUFF: -- as its applied by many banks around this country.

Mr. KLEINER: Worse than meaningless. It's an outright fraud. The prime rate has no relationship to the cost of funds of any bank in the United States. It's an administered rate which is meant to increase the profits of the banks --

WOODRUFF: How -- go ahead.

Mr. KLEINER: The small businesses are really subsidizing the large businesses. Good illustration: $3.5 billion of International Harvester's debt rewritten by 200 banks in the United States.

WOODRUFF: Well, how did we arrive at this situation? Has it always been like this?

Mr. KLEINER: No. Beginning in 1933, when the prime rate first began, it was 1 1/2 points. In other words, an interest rate of 1 1/2%. That was the truly best rate that the most credit-worthy corporate borrower would get. The prime rate gradually moved upwards. In 1977, foreign banks invaded the United States en masse to compete with big corporations and started making loans below the prime rate. That's not a problem for foreign businesses. Foreign corporations have that right; foreign banks have that right. But American banks don't.

WOODRUFF: And you're saying that's what instigated all this?

Mr. KLEINER: Yes. It was competitive.

WOODRUFF: All right, thank you. Robin?

MacNEIL: In the light of Mr. Kleiner's lawsuit, we were unable to get any bankers to respond. Instead, we have David Cates, who runs his own financial consulting firm in New York specializing in the banking industry. Mr. Cates was formerly manager of the bank stock department at Salomon Brothers and Shearson-American Express. Do you agree that there is a big difference, as Mr. Kleiner charges, between the rates given big business and small business?

DAVID CATES: Yes, there is, just exactly as he says.

MacNEIL: And how do you explain that?

Mr. CATES: Well, I think that the magnitude of the difference has to be examined in several ways. There is a certain amount, in fact a large amount, of sub-prime lending; that is, lending at rates lower than the prime rate to companies like Coca-Cola, but that is almost always for overnight lending and in large amounts. And there is an enormous market of overnight lending. Banks lend to one another and sell funds to one another at this overnight rate, and today that's about 1% lower than the prime rate. So I think that's basically irrelevant to the issue that we're talking about, which is corporate loans at the prime rate with premiums added on top of that for the different kinds of credit risk among businesses and also for the administrative costs of delivering the banking service.

MacNEIL: Is there a justification for this bank practice?

Mr. CATES: I think in general there's a justification for it, but I can't say that every loan at two or three points over the prime rate is justified. I just can't say that. But in general there is a justification.

MacNEIL: What about Mr. Kleiner's charge that in effect small business is subsidizing big business?

Mr. CATES: I don't think there is enough data from the cost-accounting practices of banks to support that in general.

MacNEIL: If one could look more closely at those practices could that data be found -- those data be found, do you think?

Mr. CATES: Well, we're engaged right now in helping banks survey and analyze the costs of lending to small businesses as well as to retail customers. And we're finding that it is difficult for these banks to summarize their costs in a truly accurate way, and we're also finding that the cost methods of one bank will be different from those of other banks, so it's hard to compare them. I think it's just very difficult to generalize ablut that.

MacNEIL: What about his point that banks' assuming or continuing the practice of regarding small business as a worse risk than big business, helps to create a self-fulfilling prophecy in that it puts small business at a competitive disadvantage by charging it so many points on its loans?

Mr. CATES: Interest on loans is tax-deductible to business so the premium that a smaller business, presumably a less credit-worthy business, pays for borrowings is not quite as great as it would appear by looking at the face amount because interest is deductible.

MacNEIL: Right. So you're saying you dont't agree with his point here. It doesn't put it at a disadvantage because it can simple deduct or pass on to its customers all the --

Mr. CATES: I think he's exaggerating the point.

MacNEIL: That point.

Mr. CATES: And being small is a cost of doing business. I'm a small business. I have relations with banks like Mr. Kleiner describes, but I accept that as a cost of being a small business. MacNEIL: But should you accept it? I mean, do you regard yourself in your business as being fairly dealt with by the banks?

Mr. CATES: Yes, I do. I look at myself through the bank's eyes. I understand the process of bank credit analysis. I've never been a bank credit analyst, but I understand how they do that. I help banks analyze the credits of other banks, and I appreciate the risk factors that they take into account. I appreciate something which he didn't mention, which is also the sheer cost of administering a loan. It takes money to be able to lend to a market, and the small business is a costly market to lend to. A lot of calls, a lot of visits, an extra burden in interpreting financial statements because these financial statements of small businesses are not usually as well audited, and there's lots more behind the numbers. It's more costly business and a more risky business to lend to.

MacNEIL: Well, thank you. Judy?

WOODRUFF: Mr. Kleiner, what about that? He's making the point over and over again that it is more expensive to do business with a smaller business, that it is a riskier proposition, and therefore the banks are justified in charging the smaller businesses higher rates.

Mr. KLEINER: Well, I believe Mr. Cates is sincere in what he says. Unfortunately, I think it comes from being brainwashed. You get conditioned to a certain way of borrowing. You believe that you are a higher risk and therefore you have to pay more. There was a very interesting study done in 1977 through 1979. The Small Business Administration sponsored below-prime-rate loans for small businesses and over 100 banks signed up to do that. The banks found that the small businesses who had below-prime-rate loans were doing very well indeed. They were paying it back; they were excellent credit risks. This program has died. I think the reason it has died is the banking industry doesn't want the public to believe that a small business is as good a risk if not better than a big business.

WOODRUFF: All right, what about his other point that these extra interest-rate points that the smaller businesses are paying are tax deductible and therefore the businesses aren't hurt as much as you say they are?

Mr. KLEINER: It's very hard to justify a tax deduction when you have to pay it out of cash and the extra cash forces you into bankruptcy. Tax deductions are a myth. The big corporations are the ones who pay very little in taxes because they know how to avoid paying taxes. The smaller businesses pay a disproportionate share of taxes, but that's another issue.

WOODRUFF: All right, Mr. Cates, first of all, Mr. Kleiner says you've been brainwashed. Have you? He says you're so accustomed now to paying these higher rates that you don't object to them anymore?

Mr. CATES: I don't borrow very much. I speak in some way as a customer of banks and even a borrowing customer of banks, but I think the reason I'm here is not because I'm a customer of banks but because I understand something of how banks work and how they put their costs and their profits together and what the different risks are in the various businesses that they lend to.

WOODRUFF: That's right, and I appreciate that clarification, but what about his point, that small businesses have grown so accustomed to paying the higher rates that they've just stopped complaining about them?

Mr. CATES: Maybe they've come to see that it's reasonable for them to pay more.

WOODRUFF: All right, what -- Mr. Kleiner, let me ask you this. What if you win these suits? What do you think the result will be?

Mr. KLEINER: Well, we have been winning. We've had 15 settlements. We've had only one case that's gone to trial, which we won, and we have others that are scheduled for trial. I think the result, unfortunately, won't be very much at this point unless the small business community organizes effectively and convinces the Congress of the United States that they're being discriminated against. It's, to me, price discrimination.

WOODRUFF: So you're saying they haven't organized. Are you kind of a one-man crusade on this issue?

Mr. KLEINER: Well, I hate to think of myself as a crusader or a martyr. I got into it because in happened to me personally. Now I've become, I guess, a spokesperson for a number of independent businesses. I would imagine there will be other people who will speak for business.

WOODRUFF: Mr. Cates, what do you think will happen if Mr. Kleiner wins his suit or suits, and what do you think the result will be? Do you think it'll have an effect?

Mr. CATES: Well, I don't think he will. I don't think his evidence is good enough, and I think that the juries and courts will recognize the realities of lending to different sizes of business. But if he is successful, I predict that much of the lending capacity, which is now focused by not only banks but savings and loans and foreign banks and others who really want to lend to small business and are dong so in every-increasing amounts. If he's successful I think banks will withdraw from that market because they simply will not be able to cover their operating costs and their losses and earn a profit. And, after all, it's a privately owned business, and the stockholders must make a reasonable return from it.

WOODRUFF: Well, Mr. Kleiner, that's not what you want, is it?

Mr. KLEINER: No, and I doubt if that will happen. What has happened is most of your poor loans have been made to very large corporations who can't afford to pay them back and to very large countries who can't afford to pay them back. Once you have an extremely large loan from a bank, the bank in effect becomes your partner. They can't afford to put you out of business. I don't think the banking community, once the message is clear that small-business people will not tolerate price discrimination, will simply go out of the lending business to small businesses. They didn't go out of the lending business in automobile loans; they didn't go out of the lending business in home mortgages. And it's ironic. Whether you are rich or poor, your loan on an automobile, your loan on a home has nothing to do with your financial statement, and yet the complaint is that small businesses are undercapitalized, poorly managed, and therefore we have to charge them more.

WOODRUFF: All right, thank you, Mr. Kleiner and Mr. Cates again. Robin?

MacNEIL: A British medical journal reported today that women who take birth control pills before the birth of a first child are three times more likely to contract breast cancer than those who do not. Reporting in the magazine Lancet, a British research team said the risk of breast cancer is related to the number of years during which a woman takes the pills before bearing her first child.

In this country a study published today in the journal of the American Medical Association says that chest X-rays most doctors order before surgery are not useful unless the patient is in danger of heart or lung disease. The study said that in other cases the routine chest X-rays are not likely to contribute to the health of the patient or the success of the operation.

The Environmental Protection Agency today relaxed some of the standards to control industrial leaks of benzine, a chemical that causes a form of cancer. The agency said that if the standards set by the Carter administration were agreed to or adhered to, only one case of leukemia, a form of blood cancer, would be avoided every 13 years at the current rate of benzine leaks. So the agency proposed to drop regulations at hundreds of storage tanks and several specialized chemical plants. It will still seek to control the emission of benzine fumes from chemical plants.

In the courts, the EPA lost a case in which it was asking for power to order auto manufacturers to recall cars for repair of exhaust leaks, even if the cars are more than five years old or have been driven more than 50,000 miles. The circuit court of appeals in Washington said the EPA was trying to exceed its authority.

Judy?

WOODRUFF: A California judge today denied a severely disabled woman's request that she be allowed to starve herself to death in a local hospital. Superior Court Judge John Hughes said although Elizabeth Bouvia has a "fundamental right to end her life," she could not demand that society help her do it. The judge refused to grant an injunction that would have prevented Riverside General Hospital from force feeding her. Mrs. Bouvia, a 26-year-old quadriplegic and victim of cerebral palsy, had testified that she did not want to continue a life of pain and total dependence on others. She checked herself into the hospital in September intending to refuse food, but requesting pain killers. Because she needs round-the-clock care she said she could not take her own life at home without putting friends and relatives at risk of prosecution for aiding in a suicide. The judge, in making his ruling, said, "Our society values life. The plaintiff is not terminal, and her life will be preserved by this decision. Granting her death wish," he said, "would have a devastating effect on other patients and other handicapped people in the nation." Mrs. Bouvia's lawyer, Richard Scott, told us today that she was upset by the ruling, which he said gives her the right to commit suicide but not the remedy. He said they will appeal the decision.

We'll be back in a moment.

[Video postcard -- Duluth, Minnesota]

MacNEIL: The last American combat troops left Grenada last night, when 80 members of the 82nd Airborne Division were flown back to the U.S. Here's a report from Martin Bell of the BBC.

MARTIN BELL (BBC) [voice-over]: The rifles are unloaded and cleared; the bags are packed. The American adventure on Grenada is over for the main force which took part in it. The airlift has been off and running all week, with nine flights a day of the droopwinged C-141s. They have returned 1,200 men and women of the 82nd Airborne at its support units back to base in North Carolina. The souvenirs include American flags given to them by new friends on Grenada. The point of departure has been the airfield so obligingly made ready by the Cubans in time for the American intervention. With most of the Americans gone, responsibility for security now rests with the Caribbean force under command of a Jamaican, Colonel Delroy Ormsby.

Col. DELROY ORMSBY, commander, Caribbean force in Grenada: The Americans have left a support package, which will be assisting us to do the job, and based on the current assessment of things and how things have been over the past month, we hope that we can keep our hands on things and keep it fairly quiet.

BELL [voice-over]: The support package includes helicopters and 300 Americans, mostly military policemen, but no front-line units. The separate American command on Grenada ended with the departure of the commander, General Jack Farris.

Gen. JACK FARRIS, commander, American force in Grenada: Well, I think all of us leave with very mixed emotions; we have become very attached to the Grenadian people. But I also leave here with a great deal of confidence that things are going to be good in Grenada. We wouldn't be leaving here if we didn't think the security situation was good.

BELL [voice-over]: So good that something like peacetime conditions have now been restored. No incidents of resistance to the provisional authorities have been reported for more than two weeks, but all this has been achieved at a cost, and the Americans before they left issued the definitive casualty figures. It cost the lives of 71 Grenadians, 27 Cubans and 18 Americans. Even at that cost, the clamor against the operation outside is not reflected here at all on the island, where it's widely held that the Americans arrived at the right time and left at the right time before their welcome wore out. Edward Seaga Interview

MacNEIL: Meanwhile, one of the leading Caribbean backers of the Grenada invasion, Jamaica's prime minister, Edward Seaga, has won total control of all 60 seats in his parliament. Yesterday's elections were boycotted by the opposition headed by former Prime Minister Michael Manley, who claimed that the use of outdated voter lists would permit massive fraud. Last night, Manley called the results bogus.

MICHAEL MANLEY, former prime minister of Jamaica: I do not recognize the members of this parliament. I do not recognize this government. I do not recognize the prime minister. They are all bogus.

MacNEIL: Manley was caught off-guard by Seaga's call for elections and refused to put candidates into the field. Manley has now challenged Seaga to hold new elections as soon as the revised voter list is ready. The parliamentary system allows a prime minister to call elections any time he wishe, so, paradoxically, Edward Seaga, the restorer of capitalist democracy in Jamaica, will now be running a one-party state. Charlayne Hunter-Gault has more. Charlayne?

CHARLAYNE HUNTER-GAULT: Edward Seaga first took office as prime minister in 1980. For six years prior to that, as leader of the opposition, he had been a constant critic of the Manley government, its program for socialism and its "close ties to Cuba." Mr. Seaga assumed office during a time of economic discontent and political violence. A fiscal conservative born in Boston and educated at Harvard, Mr. Seaga immediately set about dismantling Mr. Manley's socialist programs. He also severed ties with Cuba and bagan building ties with the United States. Within the next two years, Mr. Seaga managed to turn the severely feltering economy around, but the Jamican economy is once again in trouble with inflation at 18.5% and employment at some 26%. How that fits into Mr. Seaga's early election call is one of the things we'll be discussing with him now from Jamaica. Mr. Prime Minister, welcome. How do you respond to Mr. Manley's charge that this is a bogus election because reforms you agreed upon were not in place?

EDWARD SEAGA: I recognize that Mr. Manley is an authority on anything bogus. Nonetheless, this election was called constitutionally. The prime minister has the right to call an election whenever he deems it fit, and we consider that this was an appropriate time, for reasons which I believe are known, to go to the people for a new mandate. The fact of the matter is that Mr. Manley's party did not contest it because his party is not ready. It has no funds because no one trusts this party sufficiently to fund it. It had only 12 candidates ready out of 60 up to two months ago. It had myths in its own documentation that it is disorganized in more than 50 of the 60 constituents. It is afraid to face the people because of what happened in Grenada, which brought back memories of what took place here in the 1970s. And, clearly, he was not prepared to take another beating.

HUNTER-GAULT: Well, just to press the point for a moment on why you held the elections now when, as I understand it, the reforms would have been ready within the next few weeks. Why did you not want to wait?

Prime Min. SEAGA: That's not true. The new lists will not be ready until the middle of next year. Secondly, even if they were ready before, which is not so, we would not have wanted to hold an election during the tourist season. That would have been irresponsible.

HUNTER-GAULT: You don't --

Prime Min. SEAGA: Thirdly --

HUNTER-GAULT: I'm sorry.

Prime Min. SEAGA: Thirdly, the reason why we are going to elections is because the PNP made a charge that I deceived the nation in respect of the outturn of the performance tests in the IMF agreement, which is a palpable lie, and they undermined my moral authority to run the country, and I considered it necessary for the people to renew our mandate by determining whether they accepted the PNP charge or not. One couldn't postpone that for six months.

HUNTER-GAULT: By PNP you mean Mr. Manley's party?

Prime Min. SEAGA: Yes.

HUNTER-GAULT: That's right. I understand that only 45% of the voters who were eligible to vote turned out and that some, maybe 15% of the people are on that list that hasn't been compiled yet. Do you feel you have the mandate now, given those numbers?

Prime Min. SEAGA: Do you have more than 45% turning out in your elections? The fact of the matter is that 55% of the people who voted for us in the last elections turned out on this occasion. Now, in an election that is contested, there is usually a high voter turnout because there is a great deal of election interest. When an election is not being contested in a manner that the people consider to be a close contest, then naturally the election fever is low and the interest is low, and for 55% a turnout is a creditable response in those circumstances.

HUNTER-GAULT: The National Council of Churches in Jamaica has called for early elections, a new set of elections in early 1984 when the reforms are in place. Do you plan to call for an election that soon?

Prime Min. SEAGA: One set of churches have called for new elections. That set of churches is better known as the PNP at prayer. They continually ape the PNP in all their lines. They were the only churches to have followed the Manley line insofar as Grenada was concerned. All other churches took the line that the military operation in Grenada was correct, and other churches have since disassociated themselves from the call of the Jamaica Council of Churches.

HUNTER-GAULT: So are you saying, Mr. Prime Minister, that you are not going to call for another election any time soon?

Prime Min. SEAGA: Under our system elections are not telegraphed. When elections are due they are called by the prime minister and there is no telegraphing. The last prime minister to have telegraphed elections was Mr. Manley. He gave nine months' forewarning because he virtually had no choice, and in that nine months 700 Jamaicans died. This election was not telegraphed. No one died.

HUNTER-GAULT: Do you -- I'm sorry. Do you see any problems on the horizon not having an opposition party in place in the government? For example, do you see -- Jamaica has a long history of political violence. In the absence of any parliamentary opposition, are you concerned that opposition will lead to violence?

Prime Min. SEAGA: No, I'm not concerned about that because so long as Manley's party has an interest in continuing to contest elections, they will have to behave according to how the voters would like them to conduct themselves. And Mr. Manley himself has taken many steps to indicate that he intends to run his campaign until the next elections are held on a responsible basis so that he can win voter confidence. The voters of this country would not wish to see any political confrontation. We had enough of that in the 1970s and there is no intention -- there would be nothing to be gained by any party from following a line of confrontation. They will lose votes. Consequently it wouldn't be to the benefit of Mr. Manley's party to advocate confrontation.

HUNTER-GAULT: Mr. Manley charged that one of the reasons you called for this early election was the economic troubles that Jamaica is going to face trying to comply with the International Monetary Fund's strict austerity measures that it will put on its loans and agreements with Jamaica. How troubled are you by what looms in the Jamaican economy -- the high unemployment, the inflation and so on?

Prime Min. SEAGA: We have had in this past year, or this year 1983, a difficult time, but let me tell you what a difficult time means in our circumstances. We have still shown positive growth. Projections are that we will show more than 1% growth, which is the third consecutive year of positive growth as against eight consecutive years of negative growth under Mr. Manley. We continue to show a boom in investments with a new project being implemented every four days on the average, which is a far cry from the 1970s when there were no new projects, virtually, coming in. We have now reached a record level in tourism inflows. We have just this last few days received the 750,000th tourist to come to Jamaica, which is 50% more than when we took over in 1980. Construction is booming again. The one sector of the economy that is sick is mining. This is where the recession hit us -- that and that sector only. All other sectors are showing positive growth and are in virtual boom conditions.

HUNTER-GAULT: Well, Mr. Seaga, I --

Prime Min. SEAGA: Now, that sector happens to be our great foreign exchange earner and revenue earner, and it is that area that has caused us to have to go to the IMF because that's where one can get foreign exchange resources. The worst of the problem is behind us. This year we absorbed higher prices. We absorbed higher foreign exchange rate of exchange, and as a result of that the worst of the problem is over.

HUNTER-GAULT: All right, Mr. --

Prime Min. SEAGA: This coming year we adjusted --

HUNTER-GAULT: Excuse me, Mr. --

Prime Min. SEAGA: -- the rate of exchange in 1984. We will be able to reap the benefits of the new rate of exchange in a stimulation that will give to export earnings and the extent to which this will induce new foreign exchange influence.

HUNTER-GAULT: All right, Mr. Seaga, I appreciate your explanations. Thank you very much. Robin? Japanese Elections

MacNEIL: Now another election story half the world away in Japan. On Sunday Japanese voters go to the polls for what many see as a referendum on the ambitious foreign and military policies of Prime Minister Yatsuhiro Nakasone. Unlike his predecessor, Nakasone is pushing Japan towards closer ties with its Western allies and towards a greater defensive role in the region. He insists that it is time for Japan, with the second-largest economy in the free world, to make its rightful place on the international stage, something postwar Japan has been reluctant to do. Corruption involving Nakasone's political mentor, Kakuei Tanaka, is also a major issue. Last month when President Reagan visited Japan, Taro Kimura, the evening anchorman for the Japan Broadcasting Corporation, reported for us on his country's preparations. Tonight, he gives us a preview of Sunday's elections.

TARO KIMURA, Japan Broadcasting Corporation: The 15-day campaign for the general election of the House of Representatives will be over soon, and we will know by Monday morning whether or not Prime Minister Nakasone will keep his leadership in Japanese politics. This is the chamber of House of Representatives, the lower house of the Parliament, where President Reagan made his speech just over a month ago. In Japan, it is the lower house that has more legislative power than the upper house, the Senate. As you see, there are 511 seats in the chamber, of which 285 of them have been held by ruling Liberal Democrats. All the seats from row over there to the far left end of the chamber -- it was a stable majority. The main campaign issue is whether Liberal Democrats can maintain this majority. Eight-hundred and fifty candidates of Liberal Democrats and various opposition parties are campaigning hard in their constituencies right now.

[voice-over] In Japan, strict election laws limit campaigning. Candidates are not allowed to buy TV time. Instead, they are given five minutes each in an official TV campaign program. Even the timing of zooming in and out and the panning of the camera are uniform. Within this limitation the candidates must appeal to the viewers, selling themselves with all their means. Candidates and their workers are not allowed to campaign door-to-door as they do in the United States. So there is not much choice left for the candidates. They have to go out on the streets to appeal directly to the voters. The huge corsage shows the people that he is the candidate. The white cloth sash from the shoulder with the candidate's name on it is almost a uniform. And, of course, powerful loudspeakers blare the candidate's message.

But there is always a genius who finds loopholes in any restriction. If the campaign staff is restricted in its activities, why not recruit somebody who is beyond the reach of law? This candidate has asked R2D2 to give him a little help. The election administration committee is considering whether or not this "Star Wars" veteran is violating the election law. But by the time it reaches a conclusion, voting will be over and R2D2 will be rteturned to his world, light years away.

This candidate, who was probably frustrated by having no chance to visit homes and appeal personally to the voters, came up with this invention. [scissor-lift platform with loudspeakers] In this way he can talk to the voters without violating the law. But voters seems to find it rather uncomfortable, and so do some of the campaign staff who have acrophobia.

And this is the candidate who triggered the present election. He is Mr. Kakuei Tanaka, a former prime minister and member of Parliament. Mr. Tanaka was recently sentenced to four years in prison for accepting bribes from Lockheed Aircraft Company while he was prime minister. Since his conviction, Mr. Tanaka has refused demands that he resign from Parliament. Mounting criticism forced Prime Minister Nakasone to dissolve the Parliament. Mr. Tanaka is out on bail, seeking another term to prove he can be purified by receiving a vote of confidence from this constitutency. It is most likely he will be re-elected since people believe no one can match Tanaka in bringing pork-barrel projects to his district.

The campaign has not been easy for Prime Minister Nakasone. The controversy over Tanaka has become the main issue of the election. One leading newspaper even headlined "Tanakasone Election," indicating Tanaka is the shadow shogun of the Nakasone government. So the prime minister in his campaign has been stressing more of his diplomatic achievement such as establishing smooth relations with the United States, which was demonstrated a month ago when President Reagan visited this country. But a poll by Japan Broadcasting shows that only 15% of the total voters feel diplomacy is the essential factor in deciding their voting attitude. Defense and trade issues were not all that important to them either. But more than half of those who were questioned said that the moral issue -- namely, the Tanaka issue -- is the factor what will decide their votes, and 10% of those people said they have shifted their support from the Liberal Democratic Party to the opposition parties. If the results of Sunday's election reflect this tendency, Mr. Nakasone will really be in trouble.

REI SHIRATORI, political scientist, Dokkyo University: If LDP cannot get the number of, say, 256, the simple majority, then Nakasone's position will be immediately challenged by the anti-main current factions. And if LDP can get more than 270, Nakasone's position will be strengthened, and if LDP can get between 256 and 270, then Nakasone's position will be weakened. This is the situation.

KIMURA: During the campaign, Mr. Nakasone said that he feels as if he's riding a bicycle against the north winds. As winter deepens, the chilly north winds blow stronger these days in Japan.

This is Taro Kimura in Tokyo.

MacNEIL: A late poll released today by the mass-circulation newspaper Asahi Shimbun predicted that the Liberal Democratic Party would win at least 270 seats, giving Nakasone the stable majority he needs to govern.By the way, we inquired why the candidates all wear white gloves. We're told it's a long-standing tradition, a symbol of purity and cleanliness. Like the corsage and the sash, it also helps the candidate stand out in a crowd. The gloves are removed when the candidate shakes hands. Judy?

WOODRUFF: In Poland, the smallest response to a call by the Solidarity union in two years. In the face of massive numbers of police deployments around the country, few Poles turned out to honor workers killed in food riots 13 years ago. About 40 people gathered on a street corner in Gdansk, shouted "Solidarity" several times and then dispersed before the police intervened. Lech Walesa's wife Danuta passed through a cordon of police at the Gdansk shipyard and quietly laid a wreath at the monument to the workers. She was standing in for her husband who decided against appearing for fear of losing his job at the shipyard. In Warsaw, about 2,000 people marched silently along the main downtown street until police warned over loudspeakers they were authorized to detain people.

And now a recap of today's top stories:

The wholesale price index drops, pointing the lowest rate of wholesale inflation in 20 years.

Elizabeth Bouvia, the disabled California woman, lost her fight in court to be allowed to starve herself to death in a hospital.

A new ceasefire in Beirut is almost immediately broken, and off Tripoli, Lebanon, Greek ships are gathering to evacuate PLO leader Yasir Arafat.

British medical research points to higher breast cancer rates in women who take birth control pills before their first pregnancy.

The EPA relaxes tough controls on industrial emissions of the cancer-causing chemical benzine.

Robin? A Cowboy Photographer

MacNEIL: Finally tonight we have a story that almost seems from a different time and a different place.

[voice-over] This photograph of a working cowboy feels as though it might have been taken 100 years ago. Actually it was taken only a year ago on a ranch in Nevada.It was taken by this man, Jay Dusard. By profession, Dusard is a well-known photographer. In his fantasies he's a cowboy. We caught up with him as he was pursuing both his profession and his fantasies in a remote corner of the vast Yavapi Ranch in northern Arizona's Juniper Mountains.

JAY DUSARD [talking to horses]: Good morning, boys. I guess you could use some groceries.

[voice-over] I started cowboying 20, maybe 21, 22 years ago. When I was in the Army they sent me to Fort Hood, texas, and I sort of fell in with the wrong crowd. Fort Hood, Texas, is really one of the biggest cow outfits in the United States when you consider all the leases out there that the cattlemen -- surrounding area cattlemen have. And I ended up becoming friends with some of these guys. I bought a horse, I bought a saddle from them, and I started riding with them whenever I could on the Fort Hood Reservation. I'd go into the little town of Killeen, Texas, and try to learn how to rope calves and just -- that's where it got started back in, oh, '61 or '62.

Joe has cowboyed just about everywhere. He's a young guy. I think he's only about 25.

[on camera] Stay with 'er, Joe!

[voice-over] But he's cowboyed from Texas to Oregon and lots in Arizona. He's just been around. He wants to see the country and experience what it's like cowboying all over the West. And Joe really typifies the kind of person that I want to photograph -- somebody that's really independent and wants to have an interesting life.

When I photograph these cowboys and go around to these ranches, my custom is to -- I take my saddle along, I take all my cowboying gear as well as my photographic equipment, and I've found the best way to get to know these people is to try and help them with their ranch work. And I'm sure that there's that selfish part of me that is going around and having this wonderful adventure of cowboying all over the West. I'm not qualified to do it under professional conditions, but the fact that I'm photographing kind of gives me a wonderful excuse to get in there and get into the game.

[on camera] Joe, don't you wish you were making eyes -- don't you wish you were making eyes out here?

JOE, cowboy: Yeah, I wish I had a shoot to do that. This gosh-danged horse bite stuff just -- you know how it is. Son of a buck, they mechanized everything so much they don't need cowboys anyway.

DUSARD: It's easy to have a little jeep or little jeep or tricycle or something.

[voice-over] I think there's real payoff. The people know me better and maybe they open up a little bit more. Maybe they're more willing to get involved in the photograph. But nevertheless I've had the chance to try and pay 'em back a little bit with what work that I can do for the outfit, and it's a lot of fun.

I began to photograph the cowboys with the 8X10 camera because it was the camera I was most familiar with, and I'd seen that most of the photographs of cowboys were being done with a hand camera -- 35 millimeter, very portable, very easy to use, and I thought, well, 100 years ago they were photographed with cameras on tripods. That was all that was available then.

[on camera] Joe, you been getting around the country pretty good. How many places did you work since I first run into you in Montana?

JOE: Having fun, I hope.

DUSARD: Well, I'm going to have to trade hats now if I'm going to work under that cloth. You can have this for cowboying when we get done here, if you want it, Joe.

JOE: I probably need a couple of them.

DUSARD [voice-over]: Somewhere between the romantic connection with the past and the fact that I know the big camera better than the little camera, I just started it that way.

[on camera] Hey, Joe, is that noise coming from above [unintelligible]?

JOE: Looked like it. Maybe I ought to put that bugger to work.

DUSARD [greeting other cowboys]: Hey, Ross, good to see you.

ROSS, cowboy: How you doing?

DUSARD: Good to see you. Been awhile.

ROSS: Thought I'd come over for a cup of coffee.

DUSARD: Looks like you grew something on your face.

ROSS: Wintertime.

DUSARD: I've been trying to grow mine for a year or two now.

ROSS: Well, we're going to have to go gather the mares and colts, got to work some horses real quick; won't take but a minute. You want to help me? You got to pay your way.

DUSARD: You could earn that cup of coffee.

[voice-over] I would say a cowboy would be best defined by the job that he does. You could -- a cowboy is somebody that works cattle horseback. I mean, a reasonable variation would be if it's a horse outfit he would work horses horseback, but he still is a cowboy, nevertheless. And my definition of the cowboy would certainly exclude the urban cowboys and any of the pretenders. I'm talking about the real thing, the guy that does that real line of work seriously for a living, tries to do it well. If it was possible for me to just pick and choose my dream situation in life, what I would really prefer to be doing right now, I can tell you this. I'd sure like to be doing quite a bit of cowboying. I'm not professional cowboy caliber, but I would sure like to be able to spend more time at it than I am right now.

MacNEIL: More of Jay Dusard's cowboy portraits can be seen in his book, The North American Cowboy: A Portrait.

Good night, Judy.

WOODRUFF: Good night, Robin. That's our NewsHour for tonight. I'm Judy Woodruff. Have a good weekend.