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"VliY TT 1\Tr..rr T9- C -
YL , ZaAXiN, No. 3-S
ANN ARBOR, MICHIGAN, THURSDAY, AUGUST 9, 1962
SEVEN CENTS
FOUR PAGES
a'vvaa aCMXAAoa
I
Loza Leaves Post!
In Army Uprising
Five Argentine Generals Threaten
Guido Government with Rebellion
BUENOS AIRES (P)-Argentina's War Secretary resigned last
night after an open rebellion of army chiefs threatened new difficul-
ties for the shaky government of President Jose Maria Guido.
Brig. Gen. Juan Bautista Loza told a group of high army officers
his resignation from his dual post of secretary and army commander-
in-chief was the only way to resolve the situation. The resignation
climaxed a day of military upheaval which began when one ranking
Viexo
v
Capital
Eutlay
Fiscal
Upcoming
Perry Rules SWAINSON, ROMNEY MEET:
To Dismiss Candidates Begin First Bout
JOSE GUIDO
.. army threatens government
KATONA:
Cites Need
Of. Tax Cut
Prof. George Katona, director of
the Survey Research Center's
Economic Behavior Program, told
the Joint Economic Committee of
Congress that the recent specula-
tion about a possible income tax
cut may have made tax reduction
a psychological necessity for the
American consumer.
Although erroneous notions still
prevail about taxes and defense
expenditures, the government has
the additional task of informing
and educating the public about
the reasons for its action whether
taxes are cut or not, Prof. Katona
said.
With reference to the regular
national surveys of consumer at-
titudes and willingness to buy
which Prof. Katona's program
conducts, he explained that the
current "sober" mood of the Ame-
rican consumer is based upon
three persistent concerns: the re-
currence of recessions; the rela-
tively high level of unemploy-
ment; and the cold war.
Capable of Forestalling
"The great majority of Ameri-
cans have drawn the conclusion
from the experiences of 1958 and
1960-61 that government and busi-
ness are capable of forestalling a
depression, but can do nothing to
stop the recurrence of short and
nevertheless painful recessions,"
he added. "Given this frame of
mind,, people are sensitive to bad
news. It may be that consumers
will not contribute to a faster
economic growth unless new sti-
muli alter the prospects seen by
them."
In answer to the question,
should taxes be reduced now, Prof.
Katona said, "People feel uncer-
tain and cautious because they are
not aware of any factor that might
be capable of stimulating the eco-
nomy and reducing unemploy-
ment.
"We are not in a recession to-
day, even though the extent of
the recovery is far from satis-
factory. According to available in-
dications there will be no reces-
sion in the consumer sector during
the winter of 1962-63.
New Consideration
"But the last few weeks have
brought forth a new considera-
tion. Probably very many people
have heard about the tax reduc-
tion proposals. There is a risk that
they would view a decision by
Congress not to reduce taxes now
as a disappointment.
"A negative decision about the
tax cut might then represent a
new factor adding to pessimistic
views and making the recurrence
of a recession .more probable than
it has been. What Congress does
is important; how the people in-
terpret what Congress does or
doesn't do is likewise important."
barmy leader, Maj. Gen. Federico
Toranzo Montero, set up a rebel
command post in Northern Argen-
tina and called on Loza to quit,
Branded an Outlaw
Loza branded Toranzo Montero
an outlaw, but within a few hours
four generals had rallied to the
rebel's side.
The rebel leaders accused Loza,
a career soldier, of wielding iron-
fisted one-man rule over the army.
The open strife in the military
hierarchy caused consternation irt
the Guido government, placed in
power by the army last March af-
ter a bloodless coup ousted Presi-
dent Arturo Frondizi, still in cus-
tody on an island in the river
Plate.
Military Very Powerful j
Frondizi was deposed when the
military became increasingly con-
cerned that election victories by
followers of ex-dictator Juan D.
Peron would spark a Peronist re-
surgence.
Defense Minister Jose Luis Can-
tilo was expected to take over
Loza's job temporarily. But there
were indications that the army
commanders who forced Loza out
would not accept Cantilo, even
on a temporary basis. This would
create new confusion.
Guido was in constant confer-
ence with his ministers and mili-
tary chiefs, among them economy
minister Alvaro Carlos Alsogaray,
just returned from an aid-seeking
mission to the United States.
The army general insisted their
quarrel was strictly over Loza's
role as land forces representative
in the Guido government and was
not a political affair.
Stock Market Panic
But the open rebellion caused
panic in the stock market and
brought expressions of grave con-
cern from Economy Minister Al-
vard Alsogarary, who is struggling
to win confidence abroad for his
crisis-beset nation.
The revolt followed days of spec-
ulation that a long-smouldering
feud within the army, Argentina's
strongest military force, was ready
to burst into the open.
The army's internicine struggle
did not bring any repercussions
within the navy and air force, in-
formed sources said.
Navy Won't Help
One admiral stated that the
navy refrained from joining the
army rebels but also rejected
Loza's request for navy support to
put down the revolt by force if
necessary.
The air force also refused a
plea for help against the rebels.
Toranzo Montero is a brother of
Gen. Carlos Toranzo Montero,
former army commander in chief
who forced a reshuffle of the top
military echelons in an uprising
against Frondizi in 1960.
Pass PlanI
For UN Aid
WASHINGTON (P)-The House
Foreign Affairs Committee, after
tying on a few strings, gave pre-
liminary approval yesterday for
President John F. Kennedy to lend
the United Nations $100 million on
easy terms.
This modified version of a con-
troversial measure that passed the
Senate four months ago will be
subject to a formal vote today,
committee chairman Thomas E.
Morgan (D-Pa) said yesterday.
Kennedy asked for the author-
ity to help the world organization
out of a financial jam created by
refusal of several members to pay
special assessments for emergen-
cy operations in the Congo and
the Middle East.
More than Others
Morgan said paid up bond sub-
scriptions so far from other Unit-
ed Nations members total only
$27.45 million.
Kennedy first had requested au-
thority to purchase half the $200-
million issue of 25-year, two per
cent United Nations bonds. The
Senate Foreign Relations Commit-
tee amended this to approve out-
right purchase of $25 million in
bonds and to match other nations'
purchases up to $75 million more.
Compromise Measure
The compromise on a $100-mil-
lion loan for 25 years at two per
cent interest was substituted by
the Senate before it passed the'
measure 70 to 22.
As approved by the Senate, the
measure would forbid use of the
funds loaned by the United States
to relieve other nations from pay-
ment of arrears on special levies
for the Gaza Strip and Congo
peace-making efforts.
The Senate version also would
permit the United States contri-
bution to total up to $25 million
more than the aggregate receiv-
ed from other UN members.
Committee May
Survey Funds Use
By The Associated Press.
LANSING - Senator William
Milliken (R-Traverse City) re-
ports that his Special Senate Com-
mittee is ready to start a survey
of the state's government spend-
ing to assure the taxbuyer that
his money is being used to the
maximum advantage.
JOHN F. KENNEDY
. . . aid bill approval
Union Case
Raiworkers Prepare
For Possible Strike
CHICAGO ()-A major two and
one-half year railroad-labor strug-
gle with vast implications for the
nation's economy surged through
a near-showdown court phase yes-
terday.
Five unions, representing 200,-
000 crewmen who run the trains,
went to a Federal appeals court
in a second try to block sweep-
ing economy work rules which the
railroads have adopted, effective
Aug. 16-a week from today.
Judge Joseph Perry dismissed
the UnitedsStates district court
suit by the unions asking a dec-
latory judgment barring the rules
changes. An emergency appeal was
taken to the 7th United States
Circuit Court of Appeals.
40,000 Lost Jobs
The rules, first proposed by the
carriers Nov. 2, 1959, could lop
40,000 firemen-those who work
on switching and freight diesel
locomotives-from the payrolls.
They also include provisions to get
more work out of train crews, pre-
scribing longer runs for a day's
work and generally eliminating
overlapping of work assignments.
Looming beyond the courtroom
stage is the possibility of a na-
tion-wide walkout of the workers
-the firemen, trainmen, engi-
neers, conductors and switchmen
-if the railroads stick to their
announced intention of tightening
up work rules drastically. '
Such a strike will come auto-
matically with the rules changes,
the union leaders said yesterday
after a conference in Washington.
Instruct Strikers
Members of the unions received
their joint strike instructions sev-
eral days ago, telling them "how
to conduct themselves in the event
a strike is forced upon them by
the railroads," the labor leadersi
said.
But a stoppage earlier than mid-
October appeared unlikely. With
the sounding of a strike call-or,
in its absence, the clear certainty
of a walkout-President John F.
Kennedy could invoke the Railway]
Labor Act to cause postponement
for 60 days.
A White House spokesman said]
the strike threat is "under con-3
stant observation" from there, al-
though not officially. The Presi-
dent's move would be naming of a
fact-finding board to study the
dispute and report to him its sub-
stance within 60 days.
Second Study
Such a study would be the sec-
ond by a presidential panel. A
commission named by former Pres-
ident Dwight D. Eisenhower short-
ly before he left office made its
recommendations for settlement
Feb. 28.n
The commission softened con-]
siderably the carriers' expense-
cuttnig plans, but agreed that 13,-
000 freight and yard firemen would
have to go.
The other 27,000 would not be
replaced when they retire or die.
The commission also recommend-
ed a 2 per cent pay hike for about
75 per cent of the operating em-1
ployes.
IONIA (A) - With ballots from
the primary election barely count-
ed, Gov. John B. Swainson and
George Romney, his Republican
opponent, met face-to-face yes-
terday and engaged in some pre-
liminary sparring in their battle
for Michigan's top political prize.
Romney, doffing his suit coat
in the August heat, intimated in
a talk to more than 500 Ionia Free
Fairgoers that Swainson has done
poorly in his first term as gover-
nor.
The Democratic governor paired
briefly, saving his main ammuni-
tion for a meeting of Ionia County
Democrats. The Republican-con-
trolled Legislature, he said, is re-
sponsible for what he balled "the
mess in Lansing."
Nearly every big star of both
major parties on the state level
crowded into the Ionia High
School gymnasium for the annual
governor's day luncheon, mostly to
compare notes on Tusday's elec-
tion and talk about the big one
Nov. 6.
Shakes Voters' Hands
Romney inched through the
grandstand at the fair grounds,
shaking hands with some of the
crowd of 4,000, then took to the
midway for more of the same.
Swainson assisted by most of
the top Democratic state officials,
gave the crowd the same treat-
ment.
In his prepared speech, Romney
told the bi-partisan gathering that
the governor of Michigan ought to
be "absolutely free from control
or domination by any narrow in-
terest or group of interests." It
was an evident repeat of his con-
tention that labor unions control
Michigan's Democratic party.
Conflict Normal
"Some conflict is normal and
even healthy in any society," he
said, "but the governor must do
everything he can to avoid an
extreme depth of hostility between
the governor and Legislature, be-
tween labor and industry between
urban and rural areas."
Romney also cited "a conscien-
tious and constant concern about
the frugal use and management
of the public funds" as a require-
ment for a good chief executive.
Swainson, though he trailed
Romney in votes in the primary,
took heart in the fact that he
didn't garner as many votes as
Paul D. Bagwell, the GOP guber-
natorial candidate in 1958 and
1960, picked up two years ago.
"It pays to be defeated," Bag-
well joked.
Approve Plan
To Label Drugs
WASHINGTON (P)-The Senate
Judiciary Committee approved in
modified form yesterday President
John F. Kennedy's proposal on
labeling of drugs.
The action marked one more
step in the committee's considera-
tion of recommendations the Pres-
ident made the first of this week
for strengthening of a drug indus-
try control bill.
One of the recommendations was
that the official name of a drug
be printed on the label and that
it be given precedence in position.
FIRST BOUT-Governor John B. Swainson (left) and his prob-
able Republican opposition in the state gubernatorial race, met
yesterday in what promises to be the first of a series of public
debates and discussions concerning the condition of the state.
TAX CUT ISSUE:
Kennedy To Await Data
Before Offering Decision
WASHINGTON (IP)-The White House said yesterday that Presi-
dent John F. Kennedy is still waiting until all the economic data
is in before deciding whether to seek a tax cut this year.
The statement that "no decision has been made" came after
Kennedy was said to have told a. meeting of labor union officials
that he has given up any thought of asking Congress for an imme-
diate reduction. The President was represented as having told the
union leaders he shares their view<
Plan
Year
'U' Requests
$12 llion
For Building
Funds Necessary
For Additional Units
On North Campus
By DENISE WACKER
At their July meeting, the Re-
gents reviewed and gave their ap-
proval to a preliminary report on
the University's capital outlay
budget for next year, John G. Mc-
Kevitt, assistant to the vice-pres-
ident for business and finance,
said yesterday.
All in all the construction and
remodeling requests, which will be
sent to various state agencies early
in September, differ only slightly
from the 1962-63 budget submit-
ted last year.
However, this year's request, to-
talling nearly $13 million, is con-
siderably smaller than the one a
year ago. Of last year's requested
appropriations - $17,841,000-the
state Legislature granted only $3,-
800.000 for construction work dur-
ing the fiscal year which ended
last month.
North Campus Construction
The bulk of the proposed con-
struction work would be done on
North Campus, although the ma-
jority of renovation or reconstruc-
tion work listed would take place
in older laboratories and plant
buildings on the Central Campus.
This year's priority list corres-
ponds exactly to last year's - t
top item is the partially-construct-
ed Physics Astronomy Bldg., which
has been under construction for
the past year. $772,000 was, re-
quested so that the work could be
completed by next spring.
The second item was again the
music school building, which will
incorporate into one structure the
various units now sc at t ere d
throughout the Central Campus
area.
Hydraulics Building
After this, a new building to
house researchers studying hy-
draulic power is listed. It is the
second such unit which will be
built on North Campus. In 1956
the Legislature appropriated $20,-
000 for a study leading to the ac-
tual planning of the strcture,
completed a while ago.
The second unit of the Medical
Science Building follows as fourth
of the priorities. Only $400,000
will be asked this year, but the to-
tal expense of the project-in ex-
cess of $10 million-is the most
costly single item on the budgetary
request.
"It will join the first unit of the
Medical Science Bldg. and would
house various departments now lo-
cated in the East Medical Bldg., as
well as the human genetics section
currently spread over various de-
partments of the Medical Center.
Switch Units
East Medical would become
available for use by other Central
Campus units, and would be par-
ticularly adapted for use by biolog-
ical science units," McKevitt said.
The second list of priority re-
quests, which includes remodeling
of present structures or the con-
struction of annexes, lists first a
request for $750,000 for improve-
ments in the University heating
plant. There is also a request for
additional funds to improve lab-
oratories in West Engineering to
make easier instruction and re-
search in the building.
Priorities Change
The list of priorities and the na-
ture of each project are reviewed
each year by administrators and
Regents. Changes can and are
made, since the prime objective to
capital outlay is to keep it sensi-
tive to change in needs and re-
quirements, McKevitt added.
The state provides about 47 per
cent of the money for capital im-
provements. The remainder is se-
cured from the Federal govern-
ment,, bond issues, and foundation
or private gifts.
that a prompt cut in income taxes
would help stimulate the lagging
economy, but feels Congress would
turn a deaf ear.
Instead of trying for a reduction
now, Kennedy was reported to
have said, he is going ahead with
plans to seek a general revision of
the tax laws next year, including
a cut in. individual and corporation
tax rates.
Kennedy discussed a wide range
of economic problems at a lunch-
eon meeting with members of the
29-man AFL-CIO executive coun-
cil, including AFL-CIO President
George Meany. Meany has been]
one of those advocating an im-
mediate cut in rates for lower in-
come bracket taxpayers as a means
of stepping up consumer buying
power.
Commenting on these reports,;
Asst. White House Press Secretary
Andrew T. Hatcher told reporters
the luncheon was "in the nature
of a social meeting" and "I imag-
ine a tax cut came in" during the
conversation.
Hatcher said he had checked
specifically on whether Kennedy
said he had abandoned the idea
of an immediate tax cut. He re-
minded reporters that the Presi-
dent has said on several occasions
that he would withhold a decision
until all the July economic indi-
cators were available.
Meany said in advance of the
luncheon that even though he still
feels an immediate tax cut is
necessary he would abide by the
President's appraisal of Congres-
sional prospects.
[sion Bill
Court Stalls on Decision
In Anti-Segregation Case
ALBANY -)-The Justice Department joined yesterday in a court
fight against outlawing Negro demonstrations here shortly before
a hearing was adjourned with no indication of when a decision would
be rendered.
United' States District Court Judge J. Robert Elliott adjourned
shortly before 5 p.m. a seven-day hearing on the city's petition to
permanently enjoin anti-segregation marches, boycotting, picketing
and other protest activities. <>
Notes Lag
In 'Economy
WASHINGTON (P-Walter W.
Heller, chief economic adviser to
President John F. Kennedy, said
yesterday there is a possibility the
recent slowdown in the economy
"represents advance warning of an
economic decline."
In response to a question from
a member of the Senate-House
Economic Committee, Heller said
the term "economic decline" was
one way of defining a recession.
While pointing out the possibil-
ity of a recession, Heller said eco-
nomic indicators are mixed.
Short of Potential
There certainly is no doubt, he
said, that "the United States econ-
omy is still operating considerably
short of its potential."
A few months ago Heller had
predicted a strong, virtually unin-
terrupted surge in the economy
this year, with a gross national
product of $570 billion. He told
the committee it was obvious the
GNP would not come close to his
prediction.
Heller, chairman of President
John F. Kennedy's Council of Eco-
nomic Advisers, underwent an aft-
ernoon of questioning by the com-
mittee without dropping any clues
as to Kennedy's decision on a quick
tax cut recommendation.
Defends Kennedy
He defended Kennedy when Sen.
Jacob K. Javits (R-NY) accused
the President of "agonizing inde-
cisiveness."
Heller said Kennedy's decision
to recommend a net income tax
cut across the board effective Jan.
1, 1963, regardless what may be
done meanwhile, "shows a decisive-
ness not seen in many years."
Javits has said Congress should
vote a $5.5 billion tax cut before
it goes home this year.
Reductions Desired
Heller said the permanent re-
duction advocated by the Presi-
dent for next year could be spelled
out in any of several ways, and
added "what he is saying is he
wantstto see reductions from top
to bottom."
"At this moment I'm not sure WORLD NEWS ROUNDUP:
exactly when I will decide thisi
case," said Elliott. "It might be
within a couple of days or within
a week or within a month."
Attorneys for both sides de- Se nate Passes
Veterans' Exten
clined to offer closing arguments,'
apparently hopeful of an early de-
cision. But Elliott said the case
would remain "in the breast of
the court for a decision at such.
time as I get to it."
The judge said he was leaving
the record open in order that both,
n;,q --rl o~r~~lcmari thi ror d
By The Associated Press
WASHINGTON - The Senate
passed arrd sent to the House yes-
terday a bill to extend for a year
the time in which veterans of
World War II and Korea can ap-
ply for government insurance. Sen.
Germany Sept. 4-9. When plans of grace in England last night in}
for the conference were announced a showdown with Israel on getting
July 10, West German Chancellor him out of the country. Soblen's
Konrad Adenauer asserted that lawyers expressed hope President
the talks would strengthen the John F. Kennedy would grant him
Franco-German "wall" against a pardon or amnesty. Soblen is
Communism. under life sentence for spying for
v * the Soviet Union.
UNITED NATIONS - The*
United Nations announced yester- DAMASCUS-An army spokes-
day that acting Secretary-General man reported early yesterday a
11 T T 1a.-h A fr',v,,. i, !- _ + . . I,-
sides could supplement the recorc Russel B. Long (D-La.) said vet-
"if there should be any events erans, including some partially
which develop between t hif s disabled, could get term insur-
moment and when I announce my ance until age 50 and then con-
decisionci io" t it into mnified life nnolies.
I