conomists Discuss Solution to State Tax Crisi By MICHAEL KRAFT, Daily Editorial Director Revision of Michigan'O~ ax structure and a state income tax emerged as possible.isolutions to the current tax crisis as four econ- omists addressed yesterday's meetings of the University Press Club. Michigan has gone through a tax crisis "periodically every few years" and the financing has been carried out on a crisis basis. As a result, the state has a "patchwork tax structure," Prof. Robert S. Ford, associate dean of the graduate school told the gathering of Michigan newspapermen as he traced the state's recent tax history. "The old structure needs a modernization and overhaul," he said, pointing to the state's rising population and the "greater de- mand for governmental services at all levels." During the dinner session of the club's 41st annual meeting, Prof. Harold Groves of the University of Wisconsin economics department suggested that states pressed for revenue which do not have personal income taxes should give "top priority" to this source of funds. Prof. William D. Ross, Dean of the Louisiana State University of Commerce said "a change is indicated in the composition of state- local tax structures, if they are to serve the economy most effectively. He warned the press club's afternoon meeting that "we cannot continue to impose tax upon tax at each level of government; weI cannot continue to expand the relative size of the public sector of our economy without encountering a serious danger of undermining our private-enterprise economic system and our democratic politi- cal institutions." Low Income Families Hard Hit Prof. Richard A. Musgrave of the University's economics depart- ment said that under the existing structure, low income families pay, in both direct and indirect state taxes, a larger proportion than those in the middle and upper income groups. Prof. Groves described the Michigan tax system as a "hybrid fea- turing sales tax, franchise tax and a levy on gross receipts." In reporting to newsmen "Who Pays Michigan Taxes," Prof. Musgrave said adoption of a flat state income tax with standard ex- emptions would be "highly progressive" at the lower end of the economic scale. This means an increase in the tax load carried by middle income families (those with incomes over three or four thou-' sand dollars.)E Progressive Rates Not Helpful He said progressive, tax rates - rising as incomes rose - would not greatly increase the effective tax burden on upper income fami- lies but might encourage them to move from the state. For this reason, most states have not adopted income taxes with highly pro- gressive rates, he added. Prof. Groves told the newsmen last night that any reform in state tax structure should be rational and equitable for all, so "when one man asks why his taxes are higher than those of another you can give him an answer and a rational one." Proposes Tax Credits To encourage adoption of state income taxes which he had called "top priority" he said Congress might provide that payments up to a certain level (two or three per cent) could be allowed as a federal income tax credit, rather than a simple deduction. Under this pro- posal, taxpayers could deduct state income tax payments (within Congressional limits) from the amount owed to the federal govern- The Wisconsin economist also suggested changes in personal property taxes by reducing or eliminating levies. on inventories and livestock while perhaps adding property taxes on automobiles. Additionally, he said, Michigan should take another look at the sales tax which is its biggest single source of revenue. He -advised more taxes on services, such as automobile repairs and less on tan- gibles, including sales between one business firm and another, ral than the general public,. T b Trouble in Store Prof. roves warned that in the near future, states face "ser and real" financial trouble. Behind the current state tax shueeze, said Dean Ford, are major factors of increasing population, spreading urbanization continuing decline in the value of the dollar. Meanwhile, state expenditures will have to increase in order meet the growing population's needs for public schools and hil education, hospitals and highways, he warned. Dean Ford pointed out that concentration of population in ur areas increases government spending at#an accelerating rate. Urb ization has become the predominant pattern of living today." He traced the state's deficit and tax crises back to the 1946 C stitutional Amendment which diverted more than three-fourths the sales tax revenue to schools and local governments. Dean Ford said the state's general fund deficit as of June 1958 is expected to be about 25 million dolla'rs and it might re ment. See TAX, Page 2 ,I I r _ ._ ,i- _ o - HIGHER EDUCATION AND ALUMNI See Pale 4 Sixty-Eight Years of Editorial Freedom D4ait (iC ll 0~II L .'' -------__ _ - _ _ _17. . ocU' . c F'f'~ .*VF .f !ja.N . SIXK PA ANN ARBOR. MICHIGAN, SATURDAY, UCUTOBER 11, 15 riXrs VMINlM I~ yaua.. a . +[.aw "rr ' XT- 99 Vol,. I.XIXI NO., Z - now" Body in Quebec Revealed as Cary Prof. Price To Remain at Camp, Contjnue Search Efforts for Son By THOMAS HAYDFPN A body recovered last week from Quebec's Nottaway River has been identified as Robert Cary, '58E, one of two University students who disappeared in Canadian bushland six weeks ago. His remains will be buried today at Rupert House outpost on the shores of James Bay. Meanwhile the search for Cary's companion, Alan Price, '59E, is to continue. Price's. father, Burton Tower carillonneur Prof. Percival Price, has arranged to stay another week at James Bay and join Indians in combing the river region. Little hope was given for finding 'Mr In. rid ers Host Navy Toda [op Intersectional SGC Board ToConsder Writing Code The Student Government Coun- cil Human Relations Board yes- terday de'cided to look into the possibility of drawing up an anti- discrimination code. - When and if it is set up, the Board will ask the University to adopt it as a policy statement. Vice-Presioent for Student Af- fairs James A. Lewis recommend- ed the written policy, to be mod-, eled after the Fair Educational Practices Code recently adopted at the University of Illinois. Need Policy Statement Such a statement, he said, would give notice of "ground rules." University policy is not written down anywhere in one place, hednoted,"and I do think we need very much on this cam- pus a statement of exactly what our policy is." Lewis explained that a written code could also serve as a "check- list" for the Human Relations Board. Members of the Board com- mented tpat much of the Illinois statement against discrimination is already in effect at the Univer- sity, 'Would Be Educational' "But," Nan Murrell, '59, point- ed out, "a written policy would be an educational factor. It may not do any good, but it can't do any ha rm." The Illinois code says that the school will not in any way dis- criminate "because of race, creed or national origin." It also en- courages non-discriminatory practices in off-campus accom- modations, services and recrea- tional facilities. It provides that room assign- ments not be made on the basis of race, creed or national origin. It also encourages student social organizations to eliminate re- strictive clauses in their consti- tutions and by-laws. Pope Pius X11 Lies in State At St. Peter's VATICAN CITY M)-- The re-, mains of Pope Pius XII lay in state last night under the tower- ing dome of St. Peter's Cathedral. 2young Price by Corporal J. A. Dowell of the Royal Canadian Mounted Police. May Not Find Price "Just how wide a search it will be, I don't know," he said last night. "But I don't think they're going to find him." He said that although little snow has fallen in the area, tempera- tureslhave been consistently below freezing. McLean Camp, at the mouth of the Nottaway River, is scheduled to close for the winter within ten Lodge Say s Stop Tests Indefinitely UNITED NATIONS, NY. (M- Ambassador Henry Cabot Lodge declared yesterday the United States is ready to suspend nuclear weapons tests indefinitely pro- vided there is reasonable year-to- year progress in other fields of disarmament. But Soviet Deputy Foreign Min- ister Valerian Zorin replied Mos- cow would agree to halt tests only if the United States and Britain accept an immediate ban "for all time." He accused the Western powers of doing all in their power to "barricade and block the. way" toward agreement. Talks May Fail Western sources said the sharp United States-Soviet exchange in the United Nations' 81 - nation Political Committee foreshadowed possible failure of the United States-British-Soviet talks to be- gin in Geneva Oct. 31 on nego- tiating a test ban. Lodge warned that if the Soviet Uion continues its present. tests after Oct. 31 the United States will call off its own one-year test moratorium. Offers To Suspend Tests He asserted the United States offer to suspend tests is not con- ditional on existence of an entire disarmament plan. "We ,will suspend tests for one year without controls unless the Soviet Union continues testing in that period," he said. "And we are ready to extend our suspension indefinitely each year as long as we know that an inspection system is working, and we are making reasonable pro- spects on other aspects of dis- armament." *Challeng / Teamis Plagued BYKeyInjuries All-American Prospect Riefsnydei Michigan's McNitt To Miss Game By SI COLEMAN Asciate Sports Editor Navy will place a 10-game winning streak on the line when opposes Michigan today at 1:30 p.m. in the Michigan Stadium. The game, which promises to be one of the top intersections battles of the year, is the seventh in the series which began in 192 Michigan has won three, Navy two, and there was one tie, Tackle Injured Both teams will not be at full strength. Navy's prospective A American, Bob Reifsnyder, has missed the Midshipmen's first tic games of, the season because of a severely bruised Achille's heel. T outstanding tackle made the trip' -Daily-william Kimball PRE-GAME PREPARATION-Navy's unbeaten football team enjoyed a steak dinner in an Ypsilanti hotel after working out in the Michigan Stadium yesterday. The midshipmen will stay in Ypsilanti until game time and return to Annapolis immediately after the Michigan-Navy football game. U.S. Agrees To Parleys WASHINGTON (P)--The United States agreed yesterday to East- West talks starting Nov. 10 on ways which might be adopted tor guard against surprise attack on any nation. The talks will be technical. If agreement should be reached that it is feasible to set up an effective warning system, political nego- tiations aimed at putting it into effect presumably would follow. This would follow the = pattern set by international negotiations aimed at ordering into effect a ban on nuclear weapons testing under worldwide inspection safe- guards. Scientists meeting at Geneva reached East-West agreement last summer that such a workable con- trol system is technically feasible. Unemployment Decline Continues in September WASHINGTON (IP)-Another recession death pang was recorded yesterday with word that unemployment declined by 588,000 in September. This matched a similar decline in August. The August drop was expected, but the September improvement was twice the customary seasonal change, and the Septem-' ber data showed solid gains in Ca e hard-hit factory employment. Polio Cases President Dwight D. Eisenhower ,, hailed the report as indicating a Rise in Detroit noteworthy improvement in the employment picture at a -time DETROIT O) - Two more when the cost of living has been deaths were attributed to the De- relatively stable. troit area polio epidemic yester- Perhaps with an eye to the day, bringing the total for the November elections, President year to .19. Eisenhower said in a statement The city has reported 561 cases issued at Gettysburg that there while the total for the city and are good reasons to expect con- Wayne County now is 733. At tinuing economic recovery in the this time a year ago Detroit had months ahead. 174 cases. ROBERT CARY . . . found dead days, Dowell disclosed.' Prof. Price may remain at the camp until that time, he added. Cary Drowned A district coroner who flew into the bush last Sunday with the search party, reported Cary had drowned approximately a month and a half ago. Cary's father, Robert Cary of Roselle, Ill., left Moosanie, Ont. yesterday, apparently heading back to the United States, accord- ing to Dowell. He had arrived in Moosanie two days ago. See BODY, page 2 Lawyers Stop Own Motion NORFOLK (P)-Attorneys for 17 Negro pupils yesterday with- drew a motion to reopen Norfolk's six integration-closed schools after a federal judge said he would dis- miss it because "the proper parties" were not made defend- ants. Oliver W. Hill, attorney for the National Association for the Ad- vancement of Colored People, to Ann Arbor but is not expected to even dress for the game. Michigan will definitely be lack- ing the services of sophomore halfback Gary McNitt. The con- dition of two linemen, Willie Smith 'and Tom Jobson, make the possibility of either of them playing very doubtful. Late yes- terday afternoon,. Michigan line coach Jack Blott said, "I doubt very much whether Jobson will play. Smith might see some ac- tion." Navy Undefeated Today's game is the third con- test of the season for both teams.I Navy defeated William and Mary,. 14-0, in its opener, and last week7 easily rolled over Boston U., 28-14. Michigan has won one and tieda one thus far. Predict Defensive Battle Today's game may very well7 turn out to be a defensive battle. Both lines are big. Navy's forward wall, despite the absence of Reif- anyder's 240 pounds, still aver- ages 200. The probable starting lineup for the Midshipmen will have ten let- termen in it. Right tackle Ronald Erchul is the only non-letter win- ner in the starting lineup. Tranchini Stars Navy's offense -willundoubtedly be centered around quarterback Joe Tranchini. Tranchini, in only two games this season, has proved what a capable passer he is. He has completed 21 passes of 36 at-, See WOLVERINES, page 6 lBagwell Backs, Labor Rights Republican candidate for Mich-, igan's governorship Paul D. Bag-{ well said that as governor, "I will never sign any law which does, not fully protect the rights of labor or which attempts to inter- fere with the right to organize and bargain collectively." Speaking to a union convention, West Urges Cease-Fi re Extension. WARSAW (A'-- The Unit States yesterday urged Red Chit to extend the cease-fire at Qu moy, authoritative sources said Whether Red China agreed w a deep secret. The cease-fire ordered by t Peiping government last. weekei is technically due to expire midnight tomorrow. United States Ambassador Z cob Beam andChinese Comm nist Ambassador Wang Ping-Na met for two and one-half hot in a, palace ;here. Afterward, all they would a was that they had agreed to me again next Wednesday. Many diplomats concluded ti continuation of the meetin meant the shootings would not resumed in the meantime. But skeptics pointed out th yesterday's seventh session w the only one the two have he without guns blazing and sa there seemed no reason to belie continuation of the talks depen ed on continuation of the ceas fire. The Chinese Communists we still pressing for an immediE evauation of Uited States mi tary might from the Formc Strait area - which in effe would mean -the abandonment Chiang Kai-Shek. While the two ambasssd were dickering on questions whi could mean= war or peace in tl far Pacific, top directors of t Communist Warsaw Pact we gathering in this Polish capit Quemoy Gets Trann'_ Gjiu~ NUTTING OUTLINES SURVIVAL PROGRAM: West Needs All-Out Political-Econonic Offensive. By JEAN HARTWIG Establishment of a trans-Atlantic free trade area and payment plan combined with an all-out political-economic offensive are neces- sary for the survival of the Western world, according to Britain's ex-foreign minister, The Right Honorable Anthony Nutting. "Russia is out to win the uncommitted nations of the world by selling them its goods and services," he said yesterday in a lecture "Resources for Survival." NATO Machinery 'Inadequate' Calling the present NATO machinery "totally inadequate" for an all-out directed political-economic offensive in Western Europe, he said the free countries must organize, synthesize and cooperate to force the Russians to the defensive. "If the West is to surmount the, Communist challenge, I believe that productive capacities will have to be joined together in a free trade area embracing the whole Western world," Nutting said. Citing such a movement among six countries of Europe, he ex- . . .