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 <: .. _.