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Reflecting the growing worries of Americans, the stock market fell more than 46 points in last week's first two trading days, the worst back-to-back plunge since 1929. The market was probably overreacting, and it is badly oversold. Indeed, it rallied a bit at week's end, but the Dow Jones Industrials closed the week at 854 down 133 points in the past three weeks. Shares of General Motors reached a twelve-year low because gasoline shortages and price boosts will slow down car sales and lead to a shift away from the biggest, highest-profit cars. Shares of Walt Disney Productions, McDonald's and other companies that depend on the motoring public were mauled. The anticipation of lower consumer spending sent down such blue chips as Eastman Kodak, Procter & Gamble, Goodyear and General Foods.
Beyond its effects on American pocketbooks, the energy emergency will also change American political life. To meet the shortage, the President, the Congress and the Governors will be given more and more power to regulate private business and the personal lives of Americans.
The growing authority of Government was underscored by the President's new bundle of energy conservation measures. Using powers granted him under the Eagleton Amendment to the Economic Stabilization Act, which allows him to allocate fuels to wholesalers and distributors, the President ordered roughly a 20% reduction in the amount of heating oil that fuel companies can sell to distributors. The Government will advise but still lacks the power to order retailers on how to divide up the limited supply among their customers. Suggested allotments to households will be cut by as much as 20% depending on the region's average temperatures; in addition a big reduction in allotments will be asked for factories, stores, offices, bowling alleys and the like. The reduction in fuel will require that thermostats in private homes be turned to an average 68°, and to 64° in offices, stores and factory buildings.
Again using powers granted under the Eagleton Amendment, the President ordered a 10% reduction from 1972 levels in the amount of gasoline that suppliers sell to wholesalers and retailers. Station owners will then be left to work out their own formulas for limiting the amount of gas that they will sell to their customers. In this way, the Administration aims to reduce private driving by 30%. The President also ordered a substantial slash in fuel sold to private and corporate planes.
Until Congress passes the Energy Emergency Bill, which has been ap proved by the Senate and is now before the House, the Administration lacks the authority to go much further in decreeing conservation regulations. Nonetheless, the President urged service stations to refuse to sell gas from 9 p.m. Saturday to midnight Sunday. The Administration claims that this step alone could reduce the nation's driving by one quarter.
In addition, the President asked for a nationwide driving speed limit of 50 miles per hour for cars and 55 miles per hour for trucks and buses. He urged a blackout of all ornamental outdoor lighting except for business identification lighting. This would reduce energy usage in an amount equal to 30,000 bbls. of oil a day and ease the strain on supplies of dangerously low residual oil used by electric power companies.