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February 24, 1966 - Image 3

Resource type:
The Michigan Daily, 1966-02-24

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Defense Spending

Threatens Economic Security

By The Associated Press
The impact of the Viet Nam
war on the American economy is
It hasn't reached the propor-
tions of, the Korean War, when
wage and price controls were im-
posed, but it is very real. And it
brings with it the ominous threat
of inflation.
It seemed likely that Johnson's,
Great Society program might be a'
major victim of the war. Increases
in appropriations for the domestic'
war on poverty and other pro-
grams already have been pared.
Further cuts could come if war
expenditures continue to rise.
Labor and material shortages

are occurring and some transpor-
tation is being taxed.
Government officials and busi-
ness executives face problems that
will have to be solved as the Viet
Nam conflict escalates. Liaison be-
tween government and business
has become an every day affair
as the administration seeks co-
operation on prices, balance of
payments and availability of stra-
tegic supplies.
Big orders for airplanes and
helicopters are keeping the air-
craft plants busy. Apparel manu-
facturers are having a hard time
meeting government needs for uni-
forms. Airlines are struggling to
haul vast quantities of materials
and men to the war zone.

The military demands are com-
ing on top of a booming civilian
economy that has pushed factories
to capacity or near capacity pro-
duction. Apprehension about in-
flation is rising.
All forecasts of stock market
and economic activity are hedged
by the uncertainty of the Viet
Nam situation.
The sensitive stock market has
been jolted by talk of war and
talk of peace. Recently a report of
a peace feeler by North Viet Nam
sent it into a brief tailspin.
Secretary of the Treasury Henry
H. Fowler said the Viet Nam es-
calation is pulling gold and dol-
lars out of the United States at
a $700-million-a-year clip. This

outlay goes for troops costs, con-
struction and purchase of supplies
that cannot be obtained in the
United States.
Fowler said the administration
is holding to its goal of trying to
balance the U.S. international
payments position this year but he
warned that a fresh jump in Viet
Nam costs could put the target
out of reach.
Fowler has quoted President
Johnson as saying that the prime
reason for maintaining the sales
of Savings Bonds, on which in-
terest has been raised, is to help
meet the cost of the Viet Nam
war. The secretary also said that
the Savings Bond program could

prove one of the nation's most
valuable weapons in averting in-
In an increasing number of in-
dustries, demand-supply conditions
have reached the point where
manufacturers have had to allo-
cate their products among their
customers to assure a fair distri-
When the Defense Department
has found it necessary to boost-
a military inventory for a product
or to place a large order for equip-
ment, civilian customers have be-
come uneasy and have raced to
place orders to protect future re-
Other fields in which customers
have been trying to buy heavily for

future needs include copper, lead,'
zinc, molydenum, motor trucks,
machine tools, electric motors and
other components.
Unannounced price increases arej
taking place because the demand
for nearby deliveries has suddenly
expanded to levels in excess of
The government put pressure on
the aluminum and copper indus-
tries to rescind price increases,
which it contended were unjus-
tified and unpatriotic.
Sen. A. Willis Robertson (D-
Va) chairman of the Senate-House
Committee on Defense Production,
said there is increasing use of
priority assistance for critical ma-
terials, upward pressure on prices

and increasing demands like those longer stockpiles clothing, bedding,

which led to price controls and
allocations during World War II
and the Korean War.
He said the committee's annual
report "indicates that the econ-
omy is beginning to show the im-
pact of the Viet Nam buildup and
that in areas of heavy defense
production the already short
supply of manpower may get
He added that "some shortages
of capacity have developed and
other industries are operating at or
near capacity."
The National Retail Merchants
Association said the military no


etc., but is on a buy as you use
Stepped-up purchases by the
government for the military
threaten to lead to shortages of
civilian apparel and to delayed
deliveries to retail outlets.
The government has indicated
that in the fiscal quarter ending
next March 31 it plans to purchase
22 million garments, ranging from
dress cotton shirts to raincoats.
The defense supply agency has
increased its buying of off the
shelf items by 40 per cent during
the current fiscal year. It esti-
mates that its purchases will total
about. $4.3 billion in the year
ending next June 30.

British, Viet
Heads Hold
First Parley
Top Soviet Officials
Refuse Wilson Offer
For Geneva Talks
MOSCOW (1) - British Prime
Minister Harold Wilson's govern-
ment made direct contact yester-
day with Communist North Viet
Nam after Soviet leaders refused
to join Britain in promoting a
On Wilson's orders, Lord Chal-
font called on Lee Chang, acting
head of Hanoi's diplomatic mission
here, for a talk on possible moves
4 to end the Viet Nam war. Chal-
font is Britian's disarmament
minister. He accompanied Wilson
on his trip to Moscow.
British sources reported Chal-
font and Lee spent much of the
afternoon together. It was the
first time a British minister had
+ engaged in direct exchanges with
an accredited representative of
President Ho Chi Minh's govern-
ment since large-scale fighting
flared in Viet Nam a year ago.
Few details emerged beyond the
jfact that both Lee and Chalfont
described at length the conflicting
East-West approaches to peace-
making. I
Wilson was portrayed as de-
tecting a glimmer of hope in the
situation. He was encouraged that
Lee had been authorized by Hanoi
to meet Chalfont at all.
He has hope the meeting, which
had the foreknowledge of Soviet
Premier Alexei N. Koskgin, may
be the start of a dialogue that
could lead to better things. Doubt-
less Wilson feels the British pub-
lic, and left wingers within his
own Labor party, will appreciate
his quest for peace.
To some extent, Lee's reception
of Chalfont was a welcome devel-
opment for Wilson, for he had
got just about nowhere in his
attempts to persuade Kosygin and
his top colleagues to join with
Britain in reconvening parties to
the Geneva conference of 1954
to act as a forum for peace.
Kosygin, President Nikolai V.
Podgorny and Communist party
chief Leonid I. Brezhev met Wil-
son's repeated pleas for coopera-
tion with the argument that the
Soviet Union has neither a direct
standing in the crisis nor the right
1k to intervene.
When Wilson sought to assure
them of President Johnson's sin-
cere wish for peace in Viet Nam,
the Soviet leaders suggested the
Americans should prove this by
halting air raids against the
North. At one point, Kosygin was
reported to have asked Wilson how
the British people would react if
their country were to be divided
and invaded as Viet Nam has
On the second day of the three-
day British-Soviet exchanges these
developments emerged:
-Wilson asked the Soviet Union

$5 Million Union Clas
Tax Boost Over Elect
Administration Cites MIAMI BEACH, Fla. ( )-AFL- t
War Costs, Inflation CIO maritime union officials said m
For Withholding Hike sterday that a boycott of all e
foreign flag vessels dealing with M
WASHINGTON (M-The House INorth Viet Nam could start at e
passed 246 to 146 yesterday a $5 any moment. r
b ass x 24btoo4yesteilldoughby !$ Union President George Meany V
billion tax boost bill sought by curtly refused comment on state- I
President Johnson to fight ifla- ments of Secretary of Labor W.Il
ton ations he finace military Willard Wirtz that AFL-CIO "an- t
tagonism" could hurt labor's own t
The House passed the bill after goals in Congress, and that Presi- t
hearing warnings from Democrat- dent Johnson won't bargain poli- a
ic spokesmen that it may not be tically with union leaders. g
the last tax increase if the fight- AFL-CIO political strategists
ing in Viet Nam expands, and de- said they would step up their ft
mands from Republicans that do- political action in this year's con- d
mestic spending be cut back. gressional and state elections "in- s]
If the Senate passes the meas- dependent of any party." n
ure, most wage and salary earn- Affirms Relations
ers will feel its effects in May I ffishRtion s o
whe th wihhodin fiure in In Washington, White House 0
when the wiythholdingefigureshiy press spokesman Bill D. Moyers _
their paychecks change-but they si:" hn h rsdn n
will not be paying any higher in- d I think the President and
coeta iineddMr. Meany get along very well
The billisitne to matcha tgether," and, "I'm sure~ the1
more closely the amount withheld President will meet again with
with the final tax bill to be paid. Meany at the first opportunity."
For some, withholding will in- Tuesday's squabble was over how
crease. The Treasury Department much of a minimum wage increase
says that for many in lower brack- Johnson will propose to Congress.
ets it will go down. On balance , Maritime union leaders con-
more money would come in ear- ferred with Wirtz privately after
lier. Payments of corporate taxes serving notice that their threaten-
also would be speeded. ed boycott which could affect
Thundreds of foreign ships entering
The measure calls for higher US ot ih ei tay
taxes on automobiles and tele- U ports might begin at any
phone service for the next two moment.
years. This section survived an "We wouldn't want to tele-
attack in which opponents must- graph our punches," said President
TnsJnh Ciirrn of the Nn tin l

shes with Johnson
ion, Boycott Plans

ions were that the Johnson ad-
ninistration felt Tuesday's sharp
xchange between Wirtz and
leany had cleared the air and
ased the threat of any imminent
,pture between labor and the
White House.
But an AFL-CIO spokesman said
abor would tal a much closer
ook at all candidates this year in
rying to preserve and increase
he number of both Democratic
nd Republican liberals in Con-
"We're going to be more care-
ul this time to make sure we
on't make any mistakes," the
pokesman said. He declined to
ame any candidates.
AFL-CIO leaders are most angry
ver failure of their attempts in
Dongress to nullify state laws that

ban union shop contracts requir-
ing all employes to join a union.
It had top AFL-CIO priority,
plus a pledge of support in the
1964 Democratic campaign plat-
form, but was blocked by a Re-
publican filibuster.
Union officials also deeply re-
sent the administration's efforts
to limit wage increases as part of
a drive to head off inflation.
There also are reports of wide-
spread rank-and-file political dis-
A source close to Meany added
that the political implications of
a wider breach with the Democrats
had not been fully brought out
and that Meany's sharp criticism
of Johnson on Tuesday was an
effort to get out in front of the
budding labor revolt and control it.

-Associated Press
LEFT WING ARMY OFFICERS overthrew Gen. Amin Hafez, Prime Minister Salah Bitar and De-
fense Minister Maj. Gen. Mohammed Omran (shown left to right) in a Syrian coup staged yesterday.
Syrian Revolution Challenged
By Reactionary Army Leaders

FRIDAY, February 25, Noon Luncheon, 24c
THOMAS F. MAYER, Dept. of Sociology:
"Protest-Revolution; Genesis and Differences"
Friday Evening, 6 P.M. COST DINNER at Guild
Call reservation, 662-5189
-"There is always a little spice and eleganze at
Guild dinners"

BEIRUT, Lebanon ( P) - Army'
units in northern Syria threat-
ened yesterday to smash an upris-
ing by leftist military officers in
Damascus that toppled strong man
Gen. Amin Hafez's government.
Broadcasting from Hafez's home
town of Aleppo, the Northern Mil-
itary Command demanded the
rebels hand back power to the gov-
ernment and warned: "We will
face force with power."
This threatened civil war in
neighboring Syria but no fighting
was reported in broadcasts heard
in Beirut.
The broadcasts gave no definite
indication of how much strength
the rebels in Damascus or the ar-
my forces in the north actually
commanded. Both sides claimed
the support of various military
units throughout the country.
world New
By The Associated Press
WASHINGTON - President
Johnson proposed yesterday a vast
program to wage war on water
and air pollution and to expand
the national parks system so that
future generations can enjoy "a
sane environment" of beauty.
Johnson urged Congress to ap-f
prove steps toward a federal par-
tnership with states and commu-
nities to clear entire river basins.
He proposed greater federal help
in stifling the blight of smoke
and chemicals ,especially near ci-
LONDON-The oil lift for Zam-
bia, started after Rhodesia de-
clared its independence in No-
vember, has cost Britain more
than $3.6 million in transport
alone, Parliament was told yes-
terday. This was the cost as of
Feb. 9 of British civil and Royal

Rebel forces launched the coup a "crime which will lead Syria
-Syria's 15th in 17 years-at 3 to catastrophe, destruction and
a.m. while Damascus slept. They terrible butchery" Aleppo radic
sealed the country's borders near claimed the northern forces had
Damascus and arrested Hafez the support of the garrisons in
chief of state who is chairman of Aleppo and the key central city
the Presidency Council, Premier of Hama, and the Latakia coastal
Salah Bitar, the defense minister region.
Maj. Gen. Mohammed Omran, and The revolutionaries in Damascus
the speaker of Parliament. broadcast messages of support
Communiques broadcast over from key units in central Syria
Damascus radio, interspersed with and from fighting forces along the
blaring military music and pledges Israeli frontier. They also claimed
of support from military units, de- support from Hama and the coast-
clared the new regime would speed al region.
up Syria's march toward socialism Air Force Aid
and state control. The appointment of the air force
Coup Unexplained commander general, Hafez Assad.
It was not clear whether the as chief of defense indicated the
rebels overthrew the government air force also backed the coup. Ra-
by force, or whether the coup was dio Israel, however, claimed it had
staged peacefully. monitored messages from com-
Warning that the rebellion was manders on the Israeli frontier
indicating they opposed the coup.
Damascus radio said the revo-
lution was a shift of power inside
te Arab Baath Socialist party
SR oundup that has ruled Syria since it came
to power in its own coup March
8, 1963.
ned Apollo moon ship. It schedul- The rebel communiques, how-
ed the launching of an "instant ever, and the list of those arrest-
picture" weather satellite for to- ed indicated the old leadership of
day. the Baath party was wiped out
The Apollo firing had been and control was being taken by a
scheduled for yesterday, but was clique of extremist young officers
wiped out by heavy rain and winds and politicians known as "the
that belted Cape Kennedy. Young Turks." They reject Syria's
present Socialist policies as too
WASHINGTON-The U.S. Com- moderate.
mission on Civil Rights urged a The rebel command also arrest-
federal crackdown yesterday on ed Michel Aflak, who founded the
continued segregation and exclu- Baath party together with Bitar
sion of Negroes in Southern hos- 20 years ago, party chief Mounif
pitals and welfare programs re- Razza, and the vice chairman of
ceiving federal money. the Presidency Council.
"There continues to be wide- Claiming they staged the coup
spread segregation or exclusion of to save the Baath party and Sy-
Negroes in federally assisted pro- ria's Socialist revolution, the reb-
grams at the state and local lev- els denounced Hafez and the oth-
el," the commission reported aft- ers as "rightists" who had betray-
er investigating health and wel- ed the party aims, They said the
fare programs in 40 communities leaders would be brought to trial
in 12 Southern and border states. and "crushed."

ered enough strength to make ad-
ministration supporters nervous.
However, the House upheld it 207
to 187.
Chairman Wilbur D. Mills (D-
Ark) of the Ways and Means Com-
mittee, said he thinks it would
have been premature to bring in
a general tax increase bill now.
"We don't know whether this is
the only request this Congress will
be considering in the field of tax-
es," he said. "It depends on what
we do about domestic spending;
what we do in Viet Nam."

dusepn turanuiie Nauunai
Maritime Union. Earlier, President
Paul Hall of the AFL-CIO Mari-
time Trades Department had said
the boycott would not come for
another three weeks.
No Notice
But Wednesday, Hall agreed with
Curran, who said, "We might not
give any notice."
Wirtz declined to comment on
the boycott threat, which raised
serious diplomatic problems for
the Johnson administration.
On the political front, indica-


generation mnagazine presents a
Martha MacNeal Zweig
FRIDAY, FEB. 25, 8:00 P.M.
at the Wesley Foundation
State and East Huron
across from Frieze Building
Admission Without Charge




Opening February 24th,
Meet the Artist: Thursday 6-8 PM.



to cooperate in making the Middle
East a nuclear-free zone where,
even conventional arms should be
controlled. This, if accepted, would,
bar the region to Britain's Cyprus-*
based H bombers, U.S. Strategic
Air Command planes in Libya and
any Polaris submarines the Allies
may choose to deploy in the Medi-
-Wilson affirmed British in-
terest in a disengagement of East-
West ground forces on both sides
of the Iron Curtain and an area
of arms control in middle Europe.
But the precondition would have
to be that the existing balance of
power would have to remain un-
changed. He also talked of ridding
part of Europe of nuclear weapons
and delivery systems provided ar-
rangements could be made to pre-
vent the targeting of nuclear
rackets on any such zone.
Wilson urged Kosygin to re-
lease a British lecturer, Gerald
Brooke, who has been sentenced to
five years' detention for subver-



Air Force planes involved.
weather outlookstill bleak, the
space agency decided yesterday
to wait until tomorrow to at-
tempt to launch the first unman-

TODAY: 4:14 P.M.
Arena Theatre Frieze Building
Two one-act ploys
by Hans Sachs
Dame Truth and

Graduate Student Council


The Wandering Scholar From


Friday, Feb.



Broaden Your Perspectives


314 E. Liberty

I ___






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