Se lf-Liqui ating Plan Finances Residence
Hal
(EDITOR'S NOTE: This is the first of a series of three articles on resi-
dence halls. The second will alpear tomorrow and will discuss the admin-
istration of the University's residence hal system.)
seldom run out their entire terms, however, since it is more economi-
cal to pay off the principle after a ceratin period and float another
bond issue.
Precise Moment to Refinance Tricky
By RALPH LANGER ' The precise moment to pay off the bonds is tricky and the
Daily Contributing Editor University's financial directors must pick and choose their time with
Paying for large residence halls, like West Quadrangle or Mosher- care.
Jordan, isn't easy but the University has a way to finance the con- If, for example, $5.5 million was needed, as it was in 1950 for
struction of buildings "at no cost to the taxpayers except for the the construction of South Quadrangle, it might not be possible to
nominal expense of utilities n" crefinance West Quad. If the principle on the bonds is paid off before
This "miraculous" method really isn't so astounding. It's called the term of the bonds runs out a penalty payment is acquired. The
1This "m-idacunglogrmethdrhisntsostuding.It's nalled amount of the penalty decreases, however, usually in five year steps,
the self-liquidating program and through it buildings are financed and after a given length of time it costs less to pay off the principle
by bonds' which are paid off from the proceeds of operating the plus the penalty and refloat the bonds, than it would be to attempt
building. trof rafinanoinarni4...
',.'b' ge ''k-ial' el~ .Sewher Th L1 Jtim.AL jJJii t.I f fi 1iAii J. i '±
Residents Pay For Building
In other words, the inhabitants of a residence hall pay for the
residence hall. It would seem logical then that West Quadrangle,
which was built in 1937-39, and which should undoubtedly be paid
for, would have lower board and room costs than the newly-
constructed South Quadrangle.
West Quad was paid off but it was promptly put back in debt
to finance other buildings. The crux of the self-liquidation program
lies in this refinancing. When existing structures are close enough
-Daily-Fred Shippey to being paid for they serve as security yon loans which finance other
WEST QUAD-From the operating revenues of this building came construction.
security for loans which financed ... The bonds run for varying periods, usually 20 to 40 years. They
4vrbuiie.eiee. ide upuum po~nT oI reimancing is some-
where between 40 and 50 per cent of retirement. Less than 40 per
cent retirement is usually not economically sound.
Need About Half Total Cost for Construction
In general the University must have slightly less than half of
the necessary funds on hand because only up to about 60 per cent
of the total cost of building a residence hall can be borrowed.
The real foundation for the self-liquidating program was given
to the University in the late 1930's by the federal government as a
grant from the Public Works Administration.
The grant represented about 45 per cent of the construction costs
of West and East Quads, Stockwell and Victor Vaughan. It was these
See SELF-LIQUIDATING, Page 2
-Daily-Fred Shippey
... Mary Markley. From this building's revenues the tradition of
the self-liquidation program will be continued.
'U' DIVIDED
IN THREE PARTS
Sixty-Eight Years of Editorial Freedom
4bp
IddL
:43 1
FAIR, MILD
See Page 4
VOL. LXIX, No. 150
PanamaInvaders
Set Peace Talks
Surrender Terms To Be, Discussed,
At U.S Canal Zone Meeting Today
PANAMA (R')-Four members of a force that invaded Panama's
Caribbean coast were flown here last night amid indications that they
were ready to talk surrender terms.
They went into a meeting with representatives of the Organization
of American States at an undisclosed site in the United States-run
Canal Zone.
No details were disclosed on what turn the negotiations were
taking.
Ask Surrender
A Panama government spokesman was asked about reports that
the invasion force wanted to surrender without a fight. His reply was
ANN ARBOR, MICHIGAN, FRIDAY, MAY 1, 1959
FIVE CENTS
EIGHT PA
i ___ Iwrr w i i wrwwr w n ir.r w rwwruwnw.wi w ww ww
Faculty I
Foreseen
oss,
iii'
Halt
of
Supplies
LI
Financial
C risi
WHITE HOUSE
_ ,
Ike's Veto }
Maintained
By Congress
WASHINGTON (Ar) -- By four
votes, House Democrats failed yes-
terday in an all-out bid to break
President Dwight D. Eisenhower's
six-year record of never having a
veto overridden by Congress.
President Eisenhower promptly
voiced deep -gratification for the
~' 280-146 vote by which the House
sustained his veto of a bill that
would have taken from Secretary
of Agriculture Ezra Taft Benson
the power to pass on rural electri-
fication and telephone loans. Ben-
son said he was pleased.,
With an exceptionally heavy to-
tal of 426 votes, the Democrats
needed 284 votes to pass the bill
over President Eisenhower's veto.
But they fell four votes short of the
two-thirds majority required by
the Constitution. Two days ago,
the Senate voted to override, 64-29.
Democrats, with their heaviest
Senate and House majorities in
years, decided the rural-electrifica-
tion bill provided a vehicle to
break the President's string of sus-
tained vetos.
And the Democrats figured that
by showing they could override
President Eisenhower's veto, they
might pave the way for similar
action later if the President turns
down key Democratic-backed leg-
islation carrying spending au-
thority bigger than he is willing
to accept.
U Students
o .{Give iews
At Hyde Park
A third Hyde Park will be held
at 2:30 p.m. today on the Diagonal
sponsored by the League and the
International Students' Associa-
tiOne of the topics of discussion is
generally, planned to be academic
freedom, Ahmed Belkhodja, Grad.,
said, but the discussion can take
the form the stu dent gsire.
' Six different student groups
'4...f... ~ ~ ~ ~ ~ - I:- -44 A , rai +,n v .u
hat, the only terms Panama will
accept are unconditional surren-
der.
The four members of the Cuba-
based invasion force were brought
to Panama City by observers of the
OAS who flew to the coastal inva-
sion area earlier yesterday in .an'
effort to bring a halt to the dis-
pute.
The four were identified as two
Cubans-Cesar Vega, named by
Panama as the leader of the inva-
sion party, and Manola Becerra, a
parliament member from Cuba's.
Autentico Party-and two Puerto
Ricans.
Vallarino Returns
Meanwhile Col. Bolivar Vallar-
ino, commander of Panama's na-
tional guard, returned from a for-
ward post on the Caribbean coast.
where troops are deployed for ,at-
tack on the Cuban-based invaders.
"I think everything is going to
be settled," Vallarino said.
Ricardo Riano, Cuba's Charge
d'Affaires here, echoed that senti-
ment, saying he felt a solution
is imminent.
IFC Outlines
Pedge Plan
A pledge orientation program,
consisting of a series of meetings
between fraternity pledges and
University educators, was sug-
gested at last night's Interfra-
ternity Council meeting.
The proposal, which would go
into' effect on an experimental
basis next fall, was outlined by Jon
Trost, '61, scholarship committee
chairman. It will be discussed at
Tuesday's Fraternity Presidents'
Assembly,
Academic counseling, reading
improvement, mental hygiene and
job opportunities would be among
topics studied through the pro-
gram.
The possibility, of foreign stu-
dents boarding in local fraternities
next fall was also brought up. The
program, which will also be dis-
cussed Tuesday, would be worked
out with the International Center.
In other action, the executive
committee turned down a proposal
to recommend a movie of frater-
nity living, to be paid for by fra-
ternities. High cost and limited
use were chief reasons for the
proposal's defeat.
YT7 nrr
.ask .Dillon
As Herter's
Assistant
WASHINGTON () - C. Doug-
las Dillon, New York investment'
banker,,was .nominated by Presi-
dent Dwight D. Eisenhower yes-
terday to be the number two man
in the State Department.
The White House also an-
nounced that legislation will be
sought authorizing Dillon to con-
tinueto handlerthe international
economic matters which hereto-
fore have been his particular field
and clearing the way for Robert
Murphy to be the number three
department officer.
The changes arise from Chris-
tian A. Herter's stepping up from
Under Secretary of State to sec-
retary as successor to cancer-
stricken John Foster Dulles.
Dillon Replaces Herter
Dillon moves into Herter's old
spot.
The plan is for Murphy, who is
now Deputy Under Secretary for
Political Affairs, to, be given the
title of Under Secretary for Poli-
tical Affairs.
Legislation will be introduced to
permit President Eisenhower, to
designate the Under Secretary for
Political Affairs or the Under Sec-
retary for Economic Affairs as the
State Department's third ranking
officer.
Murphy To Get Post
The spot will go to Murphy be-
cause it is contemplated that Dil-
lon will continue to handle the
economic matters.
The White House said Herter
has advised President Eisenhower
that he wants Dillon to continue
to exercise the same authority in
the field of economic affairs as he
has been exercising.
State. Money C-risis
Causing Probblem~s'
Salary Uncertainty Makes New Mei
Hard To Obtain for Faculty-Stirtoi
By ROBERT JUNKER
Clouds crossed the University's financial horizon yes
terday as the effects of the state cash crisis were made know
by officials.
"We have lost some of our top faculty men," Vice
President in Charge of Business and Finance Wilbur Pierpor
said. "Delivery of some supplies and materials may be 'c1
off if payments aren't made
CONFERENCE-Left to right are Heinrich von Brentano of West Germany, Selwyn ydof Britain,
Christian Herter of the United States and Maurice Couve de Murville of France.
Western Powers Agree on Cold War Plan
PARIS (iP)-Four Western for-
eign mini ster n ter 2. German reunification would up military security measures dur-
pre-Geneva steeeting in unexpec- be achieved in a series of steps ing the transition period.
tedly quick time, proclaimed full over a period of two to three years. 3. A subcommission made up of
agreement yesterday on a plan t The Russians, British, French and
break down cold war tensions inAmericans would smooth the way representatives fromn West Ger-
Europe. by creating a commission to set many and Communist East; Ger-
enpthreeof themUtmany would develop, contacts be-
Thentre oftat- United e i- tween the two Germanys. It would
States Secretary of State Christian ' j.also draft a law to set up reunifi-
A. Herter, British Foreign Secre- H old C enter cation onthe basisof free all-Ger-
tary Selwyn Lloyd and West Ger- man elections at the end of the
man Foreign Minister Heinrich period. The subcommission would.
von Brentano - met for an hour iiscussionbe weighted on a population basis.
in a secret meeting at the United This would favor West Germany.
States Embassy.
- Agree on Package Plan - If the Dearborn Center is opened Controls Included
The ministers announced they "with money for full operations" 4. A British plan for controls,
had agreed on all parts of a sweep- S inspection and limitation of armed
ing package plan in their 'formal September, the literary college forces in a tension-ridden area
talks, including a reiteration of will offer 36 to 40 courses per roughly embracing the two Ger-
Western rights in Berlin, for pres- quarter, Prof. Karl Litzenberg of manys, Poland and Czechoslovakia
entation to the Soviet Union at the the English department said yes- was watered down and linked with
East-West Foreign Ministers Con- terday. the German reunification program.
ference in Geneva. ' Allied critics had expressed' fear
Unofficial informants gave an Addresing students at an in- inal plan would put
outlineofficial what was the plan. formation muting on the Center the West at a disadvantage mili-
The outline contained no surprises . In the afternoon, Prof. Litzenberg, tarily.
Acoring othe nformans, said when the Center reaches full Reliable informantssaid - the
According to the mnformants, capacity there Will be "as much Rlal frat adte
these were the critical points: caity there as m uch Western'ministers also talked
1. Berlin's status would remain couldiwant " courses as most students about alternative proposals. Some
unchanged until a final German c reported the ministers were pre-
accord is reached and implemented He added that when the liberal pared to discuss a separate Berlin
by a treaty with a reunified Ger- arts division opens, it will prob- settlement if the over-all package
man nation. See DISCUSS, Page 2 is turned down.
soon," he added,
"The situation is certainly a de-
terring factor in attracting new
faculty men to the campus," Vice-
President W. illiam Stirton de-
clared.
"There is- no -place left .to cut
expenses," Vice-President and
Dean of Faculties Marvin L. Nie-
huss affirmed.
. s Fails in Payments
Pierpont reported early yester-
day that the University, which
has been saving cash in its trea-
sury by delaying payments to ven-
dors and suppliers, has fallen be-
hind $1 million in such payments.
Delivery stoppage has been
threatened by some suppliers.
Although the University has
met every payroll and now has'
cash to meet its payrolls until the
end of May, publicity of the crisis
has had a bad effect upon poten-
tial faculty men in other states,
Stirton said.
"The state's financial crisis is
magnified as you get away from
the state," he said. "The cri'sis is
a 'more serious factor in attract-
ing faculty to the University than
in keeping them here."
Morale Good
Both Niehuss and Stirton said
faculty mroale throughout the un-
certain payday period has been
good. "The partisan issues caus-
ing the delay are not reflecting on,
the University," Stirton declared.
Stirton said there has been "no
official discussion" of what the
University would do -in the event
it did not receive statefunds in
time to meet the end-of},ay pay-
roll.
. However, Niehuss said operat-
ing expenses cannot be cut furth-
er to save for such an eventuality.
"We won't cut salaries; this is the
equivalent of missing a payroll,"
he said. "We will not eliminate
teaching positions." He said these
are on yearly contracts which can-
not be cancelled.
"The hourly-rated employes
(maintenance men, for example)
have already been reduced to the
minimum for onerating the Uni-
Republican.
Use TaBill
Faces Vote
LANSING W) - Senate Repub
licans rammed ahead yesterda
with a tax plan called a "black
jack" by Democratic Gov. G. Men
nen Williams while Michigan san
deeper into a financial quagmire
They pushed up for. a passag
vote today the four cent use ta
bill, equivalent to a one cent sale
tax increase, firm in resolve t
tie it to a beleaguered propose
for emergency state treasury re
lief.
Tackle Problems
The State Administrative Boar
tackled a batch of perplexing nev
problems flowing from a deartl
Realities
LANSING W) -- Somebody
took about $10 in coins from a
soft drink machine in an ante-
room adJoining the House
chamber.
Yesterday was the fit pay-
less payday for state legislators.
"I'm sure there's no connee-
tion," House Speaker Don R.
Pears (9-Buchanan) grinned.
of usable treasury cash and prior
ities for spending it hastil
blocked out Wednesday.
In order to clear the decks, tb
priority resolution knocked ou
further payment of all regular ob
ligations without specific Ad Boar
approval, excepting only welfare
school and a few other categories
Minority Democrats in the Sen
ate tried in vain once more to un
freeze the treasury relief bil
which would permit immediat
sale- of Vterns Trust Find se
GOMEZ VICE-PRESIDENT:
ISA Elects Shah as New President
By JOAN KAATZ
M. A. Hyder Shah, Grad., and Amilcar Gomez, '61E, have been
elected president and vice-president respectively of the International
Students' Association.
Shah and Gomez were elected by 108 votes while their opponents,
George Haniotis, Grad., and Barbara Ann Miller, '61, had 93 votes. The
results were announced yesterday at the International Center tea by
Robert Arnove, '59, outgoing president.
Shah, a student in the school of public health from Pakistan, said
one of the first things he will do is study the ISA constitution and see'
if the election procedures could be changed. .
Advocates Separate Ballots
N . :: ., R M
<: .. _.