THURSDAY, SEPTEMBER 22,1966
THE MICHIGAN DAILY
'Attorney General Seen As Possible Rusk Suc
AP News Analysis
Washington: President Johnson
is reinforcing the State Depart-
ment's high command with a new
No. 2 man he clearly regards as
capable of succeeding Secretary
Dean Rusk if and when Rusk
leaves the Cabinet.
Since there has long been specu-
lation on the possibility of Ar-
thur J. Goldberg, ambassador to
the United Nations, as a possible
secretary of State, Johnson is in
effect doubling his backup re-
sources for the top Cabinet job
with the appointment of Atty.
Gen. Nicholas Katzenbach.
There is nothing to indicate
that Rusk's departure is imminent.
The new lineup at the state de-
partment, also including law Prof.
Eugene Rostow and Ambassador
Foy D. Kohler, does not portend
real policy changes, high admini-
stration officials asserted.
Katzenbach, Rostow and Koh-
ler, who is leaving the position of
ambassador to the Soviet Union,
are all considered in the admini-
stration to be middle-of-the-road
men on the overriding current pol-
icy issue-the Vietnamese war.
Katzenbach said in a commence-
ment speech at Seton Hall, South
Orange, N.J., last June 4: "Our
duty in Viet Nam is inescapable.
The steps we have taken have been
carefully calculated and measured.
They are founded neither on the
illusions of omnipotent power nor
of quick cure."
George W. Ball, also a lawyer
and retiring undersecretary of
state, is known to have served for
the last 18 months or more as "the
devil's advocate" in arguments on
new Vietnamese policy moves be-
fore Johnson made decisions.
Ball, generally known as a "Eu-
rope-first" man, marshaled before
the President and Rusk the argu-
ments against expanding the war
and the reason for closing it out
if an honorable formula could be
found. Johnson is reported to have
welcomed his warning voice.
There is nothing on the face of
Katzenbach's appointment to sug-
gest he would play such a role.
Administration insiders do expect,
however, that his advice will fall
on the side of moderation.
Rostow, brother of Johnson's
chief of staff aide on foreign af-
fairs, Walt Rostow, is known as a
man with a special interest in Eu-
ropean affairs which will to some
degree compensate for Ball's de-
parture and balance Rusk's pre-
occupation with Far Eastern prob-
Rostow, 53, is an economist as
well as lawyer, and has been con-
cerned with European economic
and legal problems throughout his
Rostow will be the No. 3 man
as undersecretary for economic
affairs, a position which has been
vacant for several months. He will
get $28,500 a year, in contrast
with Katzenbach's $30,000 as un-
dersecretary and Rusk's $35,000.
The third member, Kohler, is at
58 a career diplomat of many
years experience in U.S.-Soviet
He is known to the President as and later at the University of
an excellent technician in inter- Chicago.
national relations and is said to
have been chosen primarily for
that reason. He will succeed U.
Alexis Johnson as deputy under-
secretary of state for political af-
fairs, thus becoming the highest
ranking professional in the foreign
policy chain of command.
Katzenbach has served in the
past as an advisor on various for-
eign policy questions and when he
was a law professor, first at Yale,
Johnson is reported to have
asked him some weeks ago wheth-
er he would take the State Depart-
ment's No. 2 position, which John-
son considers a "work horse" as-
signment and one of the most dif-
ficult jobs connected with govern-
"I told you a long time ago,"
Katzenbach reportedly replied,
"that I would do anything in this
government you wanted me to."
Katzenbach ts Cabinet;
M Voves to1 State Department
5 PER CENT:
Lower Interest Rate Ceiling
To Fight Inflationary Trend
Rostow, Kohler Also
Given Posts; Johnson
Comments on Taxes
WASHINGTON (P) - President
Johnson made a surprise an-
nouncement yesterday that Atty.
Gen. Nicholas Katzenbach is leav-
ing the Cabinet and taking a
$5,000-a-year pay cut to become
the No. 2 man in the State De-
Johnson made the disclosure' at
a Cabinet Room news conference
in which he also announced two
other appointments to top State
Department posts and left the
door' open for a possible tax in-
crease in the months ahead.
The selection of Katzenbach to
succeed George W. Ball, who re-
signed Tuesday as undersecretary
of state, stunned the President's
Many men had been mentioned
in speculation for the job-but
not Katzenbach, who was a protege
of Sen. Robert F. Kennedy, (D-
N.Y.), when Kennedy was attorney
Johnson also said he will nomi-
nate°Eugene Rostow, professor and
former "dean of the Yale Law
School, to fill another undersecre-
tary vacancy at the State Depart-
% ment. This post, ranking just be-
low that to be filled by Katzen-
bach, formerly was held by Thom-
as C. Mann.
In still another shift, Johnson
said he .wil nominate Foy Koh-
ler, now ambassador to. Moscow,
to be deputy undersecretary of
state-a position vacant since U.
Alexis Johnson became ambassador
In response to questions,.John-'
son said he has not yet decided
on a new attorney general or on
a replacement for Kohler in Mos-
In discussing apossible tax-in-
crease, Johnson insisted, 'I haven't
Once again he said he won't
make a decision until Congress
completes action on this year's
money bills and he gets new esti-
mates of war costs in Viet Nam.
Continuation of Fight
To Keep Issue Alive
WASHINGTON UP)-The Senate
rejected 49 to 37 Wednesday a con-
stitutional amendment to permit
voluntary prayers in the public
This was nine votes short of the
required two-thirds majority.
Republican Leader Everett M.
Dirksen of Illinois, chief sponsor
of the proposed amendment, vowed
to keep fighting for it even if it
failed to win approval initially.
"This amendment is not going
to die," he told newsmen. "I'm
not going to let it die."
Earlier, the Senate also rejected,
52 to 33, a resolution declaring it
is the sense of Congress that noth-
ing in the Constitution or Supreme
Court decisions 'prohibits local,
school officials "from permitting
individual students to engage in
silent, voluntary prayer or medi-
This was offered by Sen. Birch
Bayh, (D-Ind.), as a substitute
for Dirksen's proposal and would
have required only a simple ma-
jority. But Dirksen opposed it as
"absolutely meaningless" and said
the only way to come to grips with
the court's ban on prayers in pub-
lic schools is to amend the Con-,
Such a change would be the
first in the Constitution's bill of
In talking to reporters before
the voting, Dirksen noted that
even if he got the required two-
thirds Senate mapority the pro-
posed constitutional amendment
would still need a two-thirds ma-
jority of the House to send it to
the states for ratification.
Approval of two-thirds of the 50
states would then be required to
put it into the Constitution.
WASHINGTON MP)-The gov-
ernment clamped tighter interest
rate controls on banks and sav-
ings and loan associations yester-
day almost before the ink dried
on a new law granting this anti-
In signing the bill aimed at
cooling the hot interest rate war
for savings between banks and
savings and loan associations,
President Johnson again left the
door open to a possible tax in-
crease to stem inflation should it
The President called the new
law-which gives the federal bank
regulatory agencies power to fix
interest rate ceilings based on size
of deposits and economic condi-
tions--a "new weapon to preserve
the strength of our economy."
It is designed to make more
money available for home mort-
gages and the slumping home
building industry. It will prevent
further escalation of interest
Less than an hour after the
signing, the three regulatory
agencies fixed new interest rate
ceilings for the more than 18,000
financial institutions under their
control. The ceilings go into effect
One source said the ceilings
might affect upwards of $5 billion
in time deposits held by com-
mercial banks alone.
5 Per Cent Ceiling
The Federal Reserve Board and
the Federal Deposit Insurance
Corp., fixed a 5 per cent ceiling
on certificates of deposit of less
than $100,000 but left unchanged
the 4 per cent ceiling on passbook
savings and the 51/2 per cent ceil-
ing on certificates of more than
The ceilings won't affect time
deposits already outstanding.
The Federal Reserve's action
will apply to 6,183 commercial
banks, while the FDIC has inter-
est rate control over 7,327 com-
mercial banks which are not mem-
bers of the Federal Reserve, and
329 mutual savings banks..
The Home Loan Bank Board
previously had no direct authority
to fix maximum interest rates
for savings and loan associations.
Chairman John E. Horne of the
Iome Loan Bank Board said at
a news conference he doesn't an-
ticipate any major rollbacks in
rates since most associations al-
ready pay less than the ceilings.
The FDIC said no more than
40 to 50 banks under its super-
vision are likely to be affected,
but the Federal Reserve Board
estimated that several hundred of
its member banks would feel the
Travelers Report Red Guard
Fighting in Shanghai Area
HONG KONG () - Travelers
from Red China reported Wednes-
day new clashes between young
militant Red Guards and farmers
in .the Shanghai area, while Com-
munist China hinted there was
discord and opposition in its "Peo-
ple's Liberation Army."
In a related development, Mos-
cow published accusations that
Red China and the United States
have entered into a secret deal
over Viet Nam. This was a switch.
The Chinese contend there is a
U.S.-Soviet deal on Viet Nam.
The new clashes between the
Red Guards and farmers were de-
scribed as "intense and bloody."
The returning visitors said Mrs.
Mao Tse-tung, first deputy leader
of Red China's cultural revolu-
tion, had to come to Shanghai to
restrain the Red Guards. She is
the wife of the Chinese leader.
streets, shouting: "I am a capi-
In Moscow, the Soviet govern-
ment newspaper Izvestia carried
stories from the foreign press say-
ing that Peking and Washington
had agreed to avoid a military
clash. It appeared that the Krem-
lin was seeking to offset charges
by Red China that there is U.S.-
Soviet collaboration in the war.
Izvestia also quoted the French
weekly Tribune de Nation as say-
ing that Washington had been
given to understand there was lit-
tle danger of serious Chinese in-
tervention in Viet Nam and this
has played a big part in President
Johnson's decision to bomb the
Hanoi and Haiphong areas.
Something To Swap?
. Rent, Buy, Sell ,Trade
Try Daily Classifieds
ATTORNEY GENERAL Nicholas Katzenbach is shown at his desk at the Justice Department after
President Johnson announced that he would quit the Cabinet post to assume the No. 2 job in the
State Department. He will replace George Ball who resigned yesterday.
[ ord ew RoundupI
were seen parading in
By The Associated Press
NEW YORK-The stock market
was hit Wednesday by its worst
loss in three weeks. Trading was
The Dow Jones average of 30
industrials fell 12.42 points to
793.59. The Associated Press 60-
stock average dropped 3.7 points
This was the third straight los-
ing session after the market ,rang
up a big gain last week. '
Brokers said the selling surge
was due in part to word of Presi-
dent Johnson's plan to issue a
new form of government savings
bond because many believe this
would-aggravate the tightness of
.* * *
SAIGON-Gia Binh fell to U.S.
Marines yesterday, a U.S. spokes-
man announced. North Viet Nam's
regulars thus lost another foot-
hold beside the frontier demili-
The Marine conquest of Gia
Binh, a heavily fortified village
300 yards from the southern edge
of the six-mile-wide zone, came
after four days of air and ground
assaults. The Leathernecks, trying
to root out Hanoi's infiltrated 324
B division, had overrun the village
of An Ninh on Monday.
NEW YORK - A three-man
panel of judges yesterday granted
the plea of several smaller rail-
roads and temporarily restrained
the impending merger of the
Pennsylvania and New York Cen-
The judges said, however, that
they wanted to make it plain their
action does not mean that they
will issue a temporary injunction
against the merger.
The two railroads were to have
formally merged Sept. 30 into one
huge operation. The merger was
approved by the Interstate Com-
merce Commission last April.
* * *
PASADENA-Surveyor 2 streaked
toward the moon yesterday roll-
ing uncontrolled. Scientists said
that unless they can stabilize the
craft it will crash instead of land-
ing gently to photograph potential
astronaut landing areas.
The three-legged robot camera-
man began. spinning Tuesday
night when a routine midcourse
maneuver went awry. One of three
small control rockets failed to fire.
Friday, September 23
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