U.s. Government Intervenes to Prevent Pay Award

from a U.S. correspondent For the first time, the American Government is directly intervening to stop a@ pay award which it regards as inflationary. Three weeks ago a New Jersey branch of the International Union of Operating Engineers, representing construction workers, secured a settlement which provides for wage increases ranging from 7s to 9% over a three year period, The settlement was agreed and awaited only formal signature. At this stage President Johnson's Council of Economic Advisers intervened and held a series of meetings, described as "heated", with local union officials. With the union remaining adawant, the Government resorted to action of a blackmailing character by threatening to withdraw 200 million dollars in Federal Highway Funds from New Jersey unless the contract is renegotiated. Although a White House spokesman has said only that "no decision has been made“, other officials admit that the threat has been made. Undoubtedly the Administration's main concern is that the New Jersey settlement should lead to other local agreements exceeding the Government's wage guidepo sts. Meanwhile, George Meany, president of the American Federation of Labour and Congress of Industrial Organisations, has urged unions not to worry about the guideposts but to push instead for the maximum they can extract from employers. Mr. Meany was speaking to the leaders of eight unions in preparation for this year's major confrontation between Westinghouse and General Electric, and 180,000 electrical workers. The negotiations are particularly noteworthy as representing the first occasion on which the unions have acted in mison. Previously the companies have been able successfully to play off one union against another. The eight unions have now listed their demands. General Electric have described these as “umreslistic" and"four timesthe Administration's guide posts", and have further hinted that they will not negotiate with the eight-union panel. Following the Government's decision to keep the wage guideposts at last year's low level of 3.2%, these two developments are clear indications of the direct confrontation which is now building up.