FRIDAY, JANUARY 27, 1967 THE MICHIGAN DAILY
Cultural Revolution CreatesDireEconomi
PAGE THRES
c Crisis
EDITOR'S NOTE: The "cultural
revolution"s in mainland China pre-
sents a picture of Communism wres-
tling itself. One side has backing in,
the army and in "Mao Tse-tung's
thinking";, the other claims strength
drawn front an apparatus developed
over the years at grass roots and
factory gate levels. Important ele-
uents of the struggle are analyzed
in this article by an AP special-
ist, the fourth in a series of five
backgrounding the upheaval in that
nation of 700-plus millions.
By WILLIAM L. RYAN
AP Special Correspondent ,
Mao Tse-Tung's "great prole-
tarian cultural revolution," spear-
headed by hysterical teenagers,
has stormed through China's cities,
creating wild and violent confu-
sion. It has reached into the trade
unions and the factories. And now
it is reaching out to China's 500
million peasants.
Although most China-watchers'
agree that the danger of a shoot-
ing civil war has diminished,
China remains in dire peril.
The economy of the cities has
suffered severe wrenches from the
riotous confusion, and now there
is a prospect that the farms are
threatened.
China's spring sowing must be-
gin around April. If there is an
interruption in that, the country
is in trouble. It already has a
problem feeding 750 million people
and food is rationed. Despite of-
ficial reports to the contrary from
Peking, experts have reason to be-
lieve the last harvests were poor.
A new crop failure would be a
major calamity.
But the "great proletarian cul-
tural revolution" goes on anyway.
This is more than a power
struggle of conflicting personal-
ities, although that is part of it.
It is evidently a clash of funda-
mental conceptions of China's
economic, social and political fu-
ture. Recent announcements of
what has been going on in China's
cities reveal the depth of this
clash.
Defense Minister Lin Piao, the
man who seems to have the ad-
vantage, at least temporarily, has
turned all the terrifying power of
his "cultural revolution" appara-
tus at the power bases of his op-
ponents, who seem to be led by
President Liu Shao-chi and the
party secretary-general, T e n g
Hsiao-ping.
Much of the opposition's power
has rested with the urban labor-
ing class in the party-dominated
All China Federation of Trade
Unions. Lin now has succeeded in
abolishing that organization-as
he had eliminated another oppo-
sition power base before by abol-
ishing the eight-million-strong
Young Communist League.
The Young Communist League
was replaced by the teen-age Red
Guards-the Hung Wei Ping. The Lin Piao's power bases are the
trade unions federation now is to people's liberation army-where
be replaced by the "rebel revolu- he evidently now enjoys the ma-
tionaries"-Tsao Fan. jority support of the officer corps
Lin's forces, claiming the bless- -and the government apparatus
ing of "Mao Tse-tung's thinking," under the durable Premier Chou
moved in on the factories with En-Lai.
disastrous results. Production was
stopped in many. Enemies were ac-
cused of fomenting strikes. The
wheels of industry are being
slowed, even stopped in some
cases, by endless rallies and forced
mass discussions of Mao's thought.
Each side is accusing the other of
sabotaging production.
Lin's forces joinned the battle
for the laboring class with a de-
claration of war on "economism,"'
a Communist sin which suggests;
trying to buy the loyalty of work-
ers with promises of better wages,
welfare and living standards. Lin's
forces say this is "bribery of 'the
workers," and that it "corrupts the
masses."
Lin's paper, Liberation Army
Daily, has been the instigator all
along of the upheaval, and now
talls the army "the pillar of prole-
tarian dictatorship and defender
of the great proletarian cultural
revolution."
Powerful f i g u r e s sometimes
change sides, occasionally with
disastrous results to themselves.
One who seemed to change sides
was Taro Chu, the able and ruth-
less boss of south-central China.
During this upheaval, he rose
to fourth place in the Politburo.
Now it seems clear he has fallen.
His job as chief of the Central
Committee's propaganda depart-
ment has, according to a Peking
announcement, been given to
Wang Li. Wang, not long ago, was
occupying the chairmanship of
the Peking party committee, which
had belonged to the once powerful
Peng Chen, the first prominent
victim of the purge.
So the indications are that the
cultural revolution has reached a'
new stage. At least a dozen high-
ranking, once powerful Chinese
leadership figures are under ar-
rest, and the Red Guards are
howling that opponents of Mao's
thinking should be "burned to
death."
The time of decision may be
close-although it will likely be
a long time before Red China re-
covers from the shock of this ti-
tanic struggle.
To informed watchers, the crit-
ical question is not which person-
ality wins out, but which line wins:
Whether China will continue bel-
ligerently isolated from her neigh-
borse, and whether she can re-
cover from all the shocks of the
past year and a half.
President Lui, party Secretary-
General Teng Hsiao-ping and Vice
Premier Po I-po, who is also chair-
man of the state economic com-
mission, all appear to be in grave
danger. Yet there is always the
chance of a compromise in which
President Liu and his alllies can
be shunted off into some honorary
positions which will render them
harmless from the Lin-Mao stand-
point.
A hint of what is going on comes
from foreign correspondents based
in China who read each latest wall
poster put up by the Red Guards.
Other information comes from the
many Chinese documents which
become available outside the coun-
try, and from the reports of Soviet
and European Communists based
in Peking.
Soviet reports, for example, de-
tect "mounting opposition" to the
Lin-Mao combine among the
laboring classes. They have told of
bloody clashes in such important
industrial cities as Shanghai and
Nanking. They reported the forcible
seizure of papers in many areas of
China by Red Guards elements
who attacked "responsible offi-
cials" of the Communist party.
If even part of this is true, the
indications are that the latest
phase of the great cultural revo-
luion-possibly the decisive phase
-has been unfolding since the
turn of the year.
The European and Soviet press
report that tension is high in Pe-
king as Red Guards blare out
their demands for a final settling
of accounts with President Liu and
party Secretary Teng.
LBJ
Outlines
Program
SENATE REPORT:
McNamara Requests Cutback
In Missile, ABM Production
F or Con tinued Pros perity
To Prevent
Post-War
Recession
Predicts $47 Billion
Increase in GNP,
4 Per Cent Growth
WASHINGTON (R) - President
Johnson said yesterday the nation
must, walk an economic tightrope
between recession and inflation
during 1967 if "sound and reward-
ing" progress is to continue.
And he called for an accelera-
tion of economic plans to prevent
possible recession and to insure
continued prosperity should the
Vietnam war suddenly end. Tax
reductions and increased federal
spehding would be part of the pro-
gram.
"After Vietnam Policy"
"I cannot predict when it will
end," Johnson said of the war in
a 26-page economic message to
Congress. "Thus our plans must
assume its long duration. But
peace will return-and it could re-
turn sooner than we dare expect."
The message contained few sur-
prises except for Johnson's out-
line of his "after Vietnam policy"
a contigency plan designed to
soften the economic impact of an
eventual cessation of hostilities in
Asia.
No Mention of Guidelines
He renewed his appeal to labor
and management for restraint in
wage and price increases but
avoided mention of a firm 3.2 per
cent wage-price guideline for 1967.
That was the undeclared guideline
used in the early months of last
year, but which faded in later
months.
Johnson predicted continued
prosperity during 1967 but with-
out the inflationary price increases
of last year-although he said
some increases are expected, be-
cause stability "cannot be re-
stored overnight."
Johnson said his economic pro-
gram this year is designed to pro-
duce a $47 billion increase in the
Gross National Product-and a
real expansion of 4 per cent. His
prediction of GNP is $787 billion.
The President said the admin-
istration will move toward solu-
tion this year of other major prob-
lems of poverty, tight money, high
interest rates and the continuing
international dollar drain.
The President indicated that his
proposed 6 per cent surtax on in-
come taxes which he has proposed
go into effect July 1 is designed
not only to raise funds for Viet-
nam but also to restrain any new
inflationary pressures.
*
*
*
*
*
*
DISRUPT SINKIANG:
Field Army of Ex-Soldiers
I Fights Mao Purge Forces,
TOKYO - Peking wall posters
said yesterday 10,000 ex-soldiers in
far-off Sinkiang, Province had
formed a "field army" to fight
the Mao Tse-tung purge forces
and warned that "anyone opposing
our rebellion will be shot."
As unrest spread across the land,
Radio Peking admitted the civil
strife had caused serious setbacks
in industry and agriculture. It
called for the arrest of all those
responsible-the foes of Mao.
Mao Calls on Army
These foes apparently are im-
bedded in the government and
party apparatus in. most of the
provinces and Mao has called on
the 2.5-million-man army to root
them out, with the gun if neces-
sary.
The Peking correspondent of the
Tokyo paper Mainichi quoted wall
posters as saying the center of
resistance in Sinkiang Province
was at Urumchi, the capital, and
Shihotzu, a new city built nearby.,
The reports indicated that the
ex-soldiers had sided with Pres-
ident Liu Shao-chi in his struggle
for power with party Chairman
Mao, referring to the field army3
as pro-Liu.
There were no further reports
from Inner Mongolia in the north,
where Ulanfu, the political boss,
turned the autonomous regions
army against Mao. But in Tibet in
the far west, fighting between pro-
and anti-Mao groups was reported.
"Zomiuri's Peking correspondent
reported "several thousands of
Red Guards and Woriers" demon-
strated before the Soviet Embassy
last night. He quoted one demon-
strator as saying, "we are demon-
strating to protest against the
beating of Chinese students by
mobs in the Soviet Union." The
incident was reported Wednesday
but the Russians denied any stu-
dents were beaten.
Radio Peking in Chinese and
foreign language broadcasts ac-
knowledged these economic revers-
als:
-In Manchuria's Heilungkiang
Province, some farm communes
were in a "state of paralysis" be-
cause of the tactics of counter-
revolutionaries in authority.
Large Bank
Announces
Interest Cut
Washington Approves
Chase Manhattan
Move To Ease Credit'
NEW YORK (AP) - Chase
Manhattan, the notion's second-
largest bank, said yesterday it is
slicing its prime interest rate to
51/2 from 6 per cent. The cut,
effective today, could trigger lower
interest costs across the country.
The prime rate is that charged!
borrowers of the highest credit'
standing, usually large corpora-'
tions. Other interest rates are
scaled up from it.
Chase Chairman George Cham-
pion and President David Rocke-
feller noted that last September
they had said their'bank would
be alert to cutting lending rates.'
"We believe that the time for
adjustment has now arrived,"
they said yesterday.
Loosbr Money
They added that an increase in
the availablility of money in re-
cent weeks has caused a broad
decline in the rate structure.
"While loan demand is still
strong, it is less so than it was
a year ago," they said. "In view of
WASHINGTON (1P) -Secretary
of Defense Robert S. McNamara
said last night the Soviet anti-
missile deployment has compelled
billion-dollar improvements in
U.S. missile forces. He warned a
further push in the arms race
by the Soviets would be "danger-
ous and expensive."
McNamara spelled out for Con-
gress his case against building an
antimissile defense at this time,
but indicated one might be desir-
able later for protection of U.S.
landbased missiles.
Await Soviet Decision
President Johnson has said he
is withholding a decision to build
a costly antimissile system, which
would be designed to fend off on-
coming enemy warheads, pending
talks with the Soviet Union on
possible limitations.
McNamara's annual military
posture report, just made public,
laid out heretofore secret figures
on Soviet-American m is s i le
strength, and emphasized that the
United States will rely on offen-
sive weapons, not defensive, to
prevent nuclear war.
McNamara's remarks came in a
210-page censored version of his
voluminous report, presented be-
fore the Senate Armed Services
Committee and Defense Appropri-
ation subcommittee.
The document, possibly one of
Top Viet Generals Meet;
Junta Shakeup Predicted
the most significant. government
papers in years, was cleared by
the State Department with full
knowledge it will be carefully stu-
died by the Soviet Union.
In-Depth Missile
Besides repeating the top-level
decision to deploy the new mul-
tiple-warhead, submarine-launched
Poseidon and the 6,000-mile Min-
uteman 3 as countermeasures, Mc-
Namara said the United States
has started a "very comprehen-
sive" study of a possible new mis-
sile program.
The Pentagon chief said the
United States could spend up to
$40 billion in 10 years on a mis-
sile defense and still suffer mil-
lions of deaths if a nuclear at-
tacker chose to saturate selected
targets with many warheads.
As a hedge against a possible
Soviet refusal to halt anti-missile
work, the administration has in-
cluded $375 million in the fiscal
1968 budget for production of
Nike X antimissiles and radar
components. In addition, $421 mil-
lion has been earmarked to con-
tinue advanced development of the
system.
Counting funds left over from
last year, the United States could
spend nearly a billion dollars on
an antimissile system in fiscal
1968-and the matter is certain to
get heated congressional study.
Soviet Innovations
McNamara said two significant
changes have occurred in the
Soviet Union the past year-con-
struction of the antimissile and
a stepup in building hardened mis-
sile silos which could withstand
attack.
But he also disclosed officially
for the first time that the Soviets
are deploying a second type of
defensive system-although "the
weight of the evidance at this time
suggests this system is not in-
tended primarily for antiballistic
missile defense."
West's Non-War Shipments
To North Vietnam Increase
WASHINGTON ()-Non-Com-
munist exports to North Vietnam
climbed during 1965, but in 1966
the number of Western ships call-
ing at North Vietnamese ports'
dropped sharply, the State De-
partment reported yesterday eve-
ning.
"None of this trade is in stra-
tegic goods," the department told
Congress in its annual report on
operations under the Battle Act,
the law controlling strategic trade
with the Reds.
Cuban Sugar Trade
Non-Communist trade with Cuba
went down considerably in 1966
mainly because of the drop in the
price of sugar, the Castro regime's
main source of foreign exchange,
the report added. It said fewer
west world vessels called there.
Toward most other Communist
countries, the Johnson admin-
istration favors increased peace-
ful trade as one means of building
bridges across the East-West gulf.
The report reaffirmed administra-
tion desire for congressional pas-
sage of legislation to give the
President authority to extend more
favorable tariff treatment to Sov-
iet bloc nations.
East-West Totals Up
East-West trade generally con-
tinued to rise during 1965, the
report said. It said Western ex-.
ports to the Reds totaled $7.6
billion, up 11 per cent from 1964;
while imports came to $7.9 billion,
up 11.8 per cent.
U.S. exports to Communist coun-
tries were ,up from $139.4 million
ary-October 1966. Imports rose
from $141.5 million in 1965 to
$150.6 million in January-October
1966, the latest figures given.
West world exports to Cuba, in-
cluding Canadian wheat paid for
by the Russians, dropped by more
than one-fourth to a total of $208
million in 1965 and imports
slumped by more than one-third
to $185 million, the report said.
in 1965 to $152.5 million in Janu-
Worl d New
By The Associated Pressj
WASHINGTON - James R.
Hoffa told the Supreme Court
yesterday a trained FBI wiretap-
per "bugged" the rooms of jurors
who convicted him of jury tam-1
pering.+
In a new bid to stay out of+
jail, the Teamsters Union presi-
dent submitted 57 pages of affi-
davits, including one from the al-1
,leged wiretapper.
WASHINGTON-Closing argu-
ments in the income tax evasion
trial of former Senate aid Bobbyj
Baker will start at 12:30 p.m.
today in United States District
Court, and the case will go to1
the jury tomorrow.
This schedule was set yesterday
after attorneys for both sides
spent eight hours in legal argu-
ment in the closed chambers of
Judge Oliver Gasch, who has
-In the northern province of present money market conditions,
Shansi, where Maoists were sup- we believe that a reduction in
posed to be in control, with army our basic lending charge is ap-
help, since Jan. 12, "despicable propriate."
swine" loyal to Liu had thrown The action by Chase is the
10,000 workers into the struggle, first step toward easier money by
one of the, banking giants since
President Johnson called for low-
er interest rates in his Jan. 10
State of the Union message.
s R ou d p Thursday, the President told
Congress in his annual economic,
report: "The burden., of tight
presided over the trial since it money is b'eing lifted."
began almost three weeks ago. In Washington, the immediate
* * reaction to the rate cut was fa-
WASHINGTON - Harold Howe vorable. A spokesman for the
II, U.S. commissioner of educa- Council of Economic Advisers said
tion, said, yesterday he is deter- he was pleased. The Treasury De-
mined to press ahead against any partment said it welcomed the
discriminatory school practices in action "as a sign of a desirable
the North but doubts that the further easing of credit avail-
effort this year will involve cut- ability and interest rate levels."
ting off federal funds. The department said the Chase
Howe said the Office of Edu- cut was in the spirt of the five-
cation will concentrate on aiding nation finance ministers meet-
Northern cities in identifying the ing last weekend at the country
problems and will "provide them estate of British Prime Minister
funds to find solutions." Harold Wilson.
But if these voluntary efforts Ministers from Great Britain,
fail, he emphasized in an inter- Italy, the United States, West
view, "we would have the obliga- Germany and France met to seek
tion to bring formal processes to ways of easing world interest
bear." rates.
NOW SHOWING IN DETROIT
speed .....
speel/ide!
e fe
PRESENTS
S 4prueuI'm
SAIGON, South Vietnam (AP)
- A shakeup in Premier Nguy-
en Cao Ky's 19-month-old mili-
tary government is expected to
follow a round of top-secret meet-
ings of the ruling generals today.
The premier said yesterday he
would have something definite to
say later "on the reshuffle and
reorganization of my govern-
ment."
"You must understand that I
am but onedmember of the gov-
erment and I must consult with
the other members," Ky told
newsmen on his return from a
trip to thank Australia and New
Zealand for their military help
in the war.
He returned amid heavy secu-
rity precautions. The capital was
calm, however, and the regime
appeared to be in solid control.
The central figure in the up-
heaval is Lt. Gen. Nguyen Huu
Co, dismissed by the junta as
defense minister and, deputy pre-
mier this week under a decision
taken at a meeting which Ky at-
tended before leaving for Austral-
ia Jan. 17.
Vietnamese sources said Co was
advised by telegram Sunday, while
he was on an official visit to
Taipei, that he should stay away
Ifrom Vietnam.
ciizi
fiU1
TONIGHT
Louisiana
Story
dir. Rt. Flaherty, 1948
Classic American
documentary of
a Cajun family.
SATURDAY, SUNDAY
JAN. 28, 29
Zero de
Conduite
(Zero for Conduct)
French subtitles
An ambassadorship was offer-
ed him, these sources said, and
he was warned he would face
corruption charges before a mili-
tary tribunal if he insisted on re-
turning to. Saigon. He headed
back by air, but was met by Viet-
namese security officers in Hong
Kong.
Co's post as deputy premier
likely will be left vacant. A ci-
vilian, Nguyen Luu Vien, holds
the same title and acted as the
chief of government in Ky's ab-
sence.
The chief of staff, Lt. Gen.
Coa Van Vien, offered the de-
fense portfolio. He agreed to take
it if only he could combine it
with his present assignment.
A number 'of officials in the De-
fense Ministry received quick
transfers this week. In what ap-
peared to be precautionary moves,
about 30 army officers were
placed under strict surveillance
which in some cases amounted to
house arrest.
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