inancial Experts View ichigan By HARVEY MOLOTCH The most significant aspect; of Michigan's financial crisis lies neither in its complexity nor extensiveness, but rather in the fact that its solution has been outlined so often. Reiterating this conclusion is a 167 page volume, "Taxes and Economic Growth in Michigan," released here yesterday by the W. E. Upjohn Institute for Employment Research, Although the work consists of nine separate articles, each written by an out-of-state expert, and approaches the tax problem from the specific standpoint of growth, the authors' conclusions were consistent with- the results of the numerous previous studies, Articles Agree The collected articles, edited by former economic advisor to the Eisenhower administration, Prof. Paul W. McCracken of the busi- ness administration school, agreed that Michigan's indecisiveness is its biggest tax problem. "If a state has gained a reputation for mutdling through from one fiscal crisis to the next, disregarding analyses made at its own request and yielding to pressure groups . .. then the business firm may be expected to count the tax climate as a negative factor in, deciding on location or expansion, Prof. Carl S. Shoup of Columbia University pointed out.. Michigan will need 900,000 new jobs by 1970 to attain reason- ably lull employment, Prof. McCracken noted. This will necessitate industrial growth to provide job increases at the rate of three per cent per year, or twice the national average. Next, Michigan' suffers from "constitution-itis," Prof. Mc. Cracken Indicated.' Long Constitution The state's 1908 document is approximately four times the length of the federal constitution and has been amended 67 times. Fiscal legislation is "frozen" into the constitution. Thus, only one-sixth of sales tax revenues end up in the state's general fund, gasoline taxes are earmarked solely for highway construction, and the state debt is limited to $250,000. Although business taxes were considered by McCracken of relatively little importance to an industry, panel members shared the belief that Michigan business taxes are generally heavy. Iri particular, the current corporation franchise tax of four mills on capital and surplus was viewed with the least enthusiasm, both in terms of its administration and in terms of its fairness on different tryes of business. ' The Business Activities Tax which taxes companies on total revenue received, also drew fire from the panel. Tax Regressive "A tax on gross receipts without any deductions is one of the most vicious and regressive taxes there is," Loe Mattersdorf, a senior partner of a New York accounting firm, said. In urging the replacement of the activities tax, with one measured by net income, Mattersdorf added that the present struc- ture discourages investment in equipment and machinery and places unfair burdens on an organization with a low profit margin. The experts agreed that Michigan needs another broad-based source of revenue to supplement the sales tax. They generally en- dorsed moderately graduated personal income tax as a measure wich would not only provide additional revenue, but would temper the extreme regressiveness of the present system. A "regressive tax" which places the greatest ,tax burden on those most unable to pay was contrasted with the "more equitable progressive tax" which uses "ability to pay" as its index. Income Return Although an individual with an annual income under $2,000 must spend 19 per cent for state and local taxes, he ultimately receives 58.5 per cent for his income back in the form of benefits. "The evidence pretty strongly indicates that when benefits received and taxes paid are both taken into account, the state and local fiscal structure in Michigan is already progressive," Prof. McCracken noted. All the panelists supported the voter's Nov. 8 decision to re- move the three per cent sales tax limitation from the constitution. Some of Prof. McCracken's "blue ribbon" panelists favored_ an increase in the present rate, but recommended exemption of food and drug purchases. The most frequently made suggestion was to extend the tax to cover services in addition to products. A disproportionately large number of students taught in public institutions has required Michigan to rank fifth among the states in expendiures for higher education. SFAC ILLUSTRATES CAMPUS NEED See Page 4 YI rL Seventy Years of Editorial Freedom VOL. LXIM, No.62 ANN ARBOR, MICHIGAN, SUNDAY, DECEMBER 4, 1960 UNION CONFERENCE: Dispute Functions of Council By RALPH KAPLAN "The student is a unique part of the University community and a student governing body exists as a body which is the organized expression of the student's voice," John Feldkamp, '61, president of the Student Government Council, said yesterday. Feldkamp spoke at the student government discussion section of the Student-Faculty-Administra- tion Conference. The conference was jointly sponsored by Student Government Council and the Michigan Union and was held at the Union. Feldkamp explained that all functions of a student government are derived from the basic fact that it does exist as the organized student voice. Student Voice "The governing body is the or- ganized voice of student opinion in all three of its functions-adminis- tration of campus affairs, legis- lation of expressions of student opinion and leadership of the stu- dent body," Feldkamp said. President Clark Kerr of the University of California has is- sued a statement, labeled the Kerr Directives," which says that the student government at the university may not take a position on off-campus issues. Alumni Relations Seminar Debates Student Obligation By CAROLINE DOW The problem of making the student aware of the University Image and this responsibility to the educational system was dis- cusped in the Alumni Relations seminar of the Student Faculty Ad-! ministration Conference in the Union yesterday. Chaired by Union Executive Vice-President John Ross, '61, the seminar was divided on whether the University, with one-third of its total budget of over $100 million supplied by the state should be considered as a public or private institution. It was pointed out that ,much of the budget and the state Commenting on this action Dan Rosmergy, '61, said "I believe the Kerr directives are a fine thing and I think there ought to be a 'Hatcher directive' at the Univer- sity which would put the Student Government Council in its place. "More important than the Coun- cil's function as a group which voices student opinion is its need on campus as a body which co- ordinates the various organizations which are working on University problems. "While students should think about other problems in their ex- perience at the University, it should not be a function of the eighteen member Student Govern- ment Council to seek to represent and express this opinion to the world." Seder Disagrees James Seder, '61, disagreed with this viewpoint and said a student government has broader concerns than its administrative function. He listed those concerns as educa- tion of the student body, intellec- tual freedom and specific student responsibilities. He said specific student responsibilities included peace, student movements all over the world and discrimination. "In considering these areas, SGC has the responsibility to lead cam- See SGC, Page 2 Soviet Base E es China LONDON am? - Russia is build- ing a missile base commanding+ targets in Communist China, the London Sunday Times said yester- day. The paper said in a Tokyo dis- patch from Far East Correspon- dent Richard Hughes the base was going up on the Kamchatka Pen-1 insula in North East Siberia. It will equipped with missiles capable of striking at targets 3,0004 miles away, Hughes said. Hughes claimed aerial photo- graphic evidence of the project was in possession of Japanese in- telligence authorities. He said the1 project was known as "K-1" and differed sharply from the known pattern of other Soviet missile bases in Siberia in its site, range and command of Chinese targets. Interviews Considered By Odiorne By GEORGE LEVIN A student who is applying for a job through a company recruiter has to be able to select the com- pany which best suits him and whose requirements he best fills. To aid the student in his choice, companies publish brochures des- cribing their organization. Inter- views function in a similar way. However, besides telling the stu- dent about the company, they give the recruiter a chance to find out about the student. Interviews as they stand now are too short for effective judging of the quality of the students, Prof. George Odiorne of the business administration school and one of the authors of a report on re- cruiting for industry at the Uni- versity said. Interview Insufficient He said that in a 30 minute in- terview, the recruiter does not get to know the student. There is no personal interest involved. The student becomes "a collection of attributes to the recruiter and the recruiter becomes a method for getting a job." The most effective part of the interview, the personal factor, is lost, Odiorne said. He recommend- ed a one hour interview. Since the interview is short, the student must be able to impress the recruiter if he is to get the job. He has to know what the interviewer is looking for. Students Improve Most students, Odiorne said, do not do as well in their first or second interview. With each suc- cessive interview, students learn the correct answers. Because of this, most students should count on a large number of interviews, he said. Students should not concentrate on one company. Recruiters look for mature people. Seventy four of 93 inter- viewers questioned rated social maturity as very important while only two said it was of low im- portance. Ambition Important The level of ambition of the student was rated very important by 85 of the interviewers while none thought it was of low im-i portance. The least important things in; these recruiters minds were mari- See PROFESSOR, Page 2 Red Summit Agrees War Unnecessary WARSAW (M---Wladysla* Go- mulka said yesterday the world's top Communist leaders unani- mously agreed 'at their Moscow summit conference that "in our epoch world war has ceased to be an inevitable phenomenon."Th oihCmuitcif who returned from the top-secret conference Thursday, said the participants signed two docu- ments confirming the correctness of Soviet Premier' Nikita S. Khrushchev's peaceful coexistence policies. Gomulka spoke at a miners' celebration in Katowice. Indicates Win His stateenrts indicated Khrushchev had won at the three- w&eek parley over a reported co- existence and insisted capitalism will only be destroyed by war.. Gomulka said the conference 1was devoted to an analysis of the international situation. He said the 81 delegations unanimously adopted the two documents, which he described as a statement and an appeal to the, nations Involved. Peaceful Competition "The Communist and workers parties of the world adhere to the principle that the fight between socialism and capitalism, between the new and the old world, can and should be decided not by means of a new world war but by means of peaceful competition be- tween both social systems," Go- mulka said. Red China's President lu Shao-Chi said yesterday Soviet- Chinese Communist friendship,; "steeled and tested" for 40 years --is a cornerstone of the world Socialist (Communist) move- mnent. The Chinese leader made these remarks, carried in a dispatch of the Soviet news agency Tlass, on his arrival by train in Leningrad. Kennedy As Conu Debate Role For PreSs By JUDITH OPPENHEIM The responsibility of a campus newspaper and its staff formed the{ basis for discussion of the studentj press workshop of the Student' Faculty Administration Confer- ence yesterday. The major focal point of the discussion was whether a college newspaper should reflect campus concern as it really exists or as it ought to exist. Daily Editor Thomas Hayden, '81, felt that a newspaper editor has an obligation to determine what ought, to be of main con- cern to the university community. No Obligation Hayden added that a college newspaper is not obligated to re- present its campus in the same way a legislature is obligated to represent its constituents. Prof. Palmer Throop of the his- tory department pointed out that regardless of a newspaper's at- titude toward representing its campus, the public generally con- siders the paper more or less an official mirror of the college. No Censorship "If the editor makes a major mistake we should have his head - See STUDENT, Page 2 .. Yugoslav Aide Woos Vatcan ROME () - Yugoslav Minister -Roca Popovic said last night Presi- dent Marshall Tito's Communist government would like to resume diplomatic relations with the' Vatican and West Germany. Yugoslavia also wants to im- actually supplies much more of the money needed to operate each year than the basic figures indi- cate. Dean of State-Wide Education Harold M. Dorr said we are a great state University with the threefold but interrelated func- tion of teaching, research and service. The problem of a Univer- sity is to maintain the balance of these three in reality and also in the public image of the Uni- versity, which may or may not be reality, he said. It was suggested that the serv- ice and education function be stressed to the Legislature, the education to the public and the research to corporations for best results in fulfilling the budget. No matter what the University's image, it was decided that the educated person has a responsibil- ity to the educational system which should be manifested in willingness to help the University. The lack of this spirit was attri- buted to the student tendency to consider himself not a part of the University but a helpless victim of it. Betsy Carroll, '62, suggested that student' organizations and the faculty stress the student's active role in and understanding of the University to the point that stu- dents be asked to attend lectures stressing their responsibility to and the image of the University. Paul Carder, '62, pointed out that the Student Relations Board (the student adjunct of the De- velopment Council) and the board of student governors (the student adjunct of the Alumni Associa- tion) were working directly in the area of making the role of an alumni real to the student. The S.R.B. had found that first they must make him relate to the University and expand the per- sonal view to an understanding of toie whole aims of a higher "good defense" as the reason for the improvement over Friday's opening encounter. "The defense- men played a good game and the forwards came back up ice fast to help out," Renfrew said. Friday night the Wolverines had trouble clearing the puck from their own zone, but they experi- enced no such trouble last night and were able to keep pressure on the Toronto goalie for minutes at a time. Strategy Change . Renfrew changed his strategy Just before the game when he put 'erenson's line opposite the line of Ev Rush, Don Fleming and Bill --is a cornerstone of the world Sncialist (Communist) move- ment., A participant in the Commu- nist summit conference, Liu ex- pressed belief that his visit to the DAVE BUTTS . ,. first varsity game Soviet Union "will undoubtedly contribute to further strengthen- ing and development of the soli- darity and friendship between our two countries." Kennedy which had scored three of Toronto's goals Friday night. The move payed off with Beren-, son, Hinnegan and Larry Bab- cock outscoring their counterparts 3-0. The first period was fast and furious with Michigan applying See SOPHOMORE, Page 6 PALM BEACH, Fa. ( -P dent-elect John F. Kennedy terday tapped North Carolina Luther H. Hodges, one-time tile industrialist, to be his S tary of Commerce. Hodges, standing by Kenne s id e for, the announcem promptly expressed concern a the economy of the United SI under the outgoing Republi administration. He promised to make the C merce Department a vital, c lenging force for the nation. Second Selection Kennedy, announced Hoi appointment to some 50 repo: and cameramen crowded on flagstone patio at his fam ocean-front home here. It the President-elect's second 4 inet selection. Thursday he na Gov. Abraham Ribicoff of C necticut to be Secretary Health, Education and Welfa Kennedy said the 62-year Hodges, a Democrat, "will i to his new position experienc both business and governmen Announcement Late Hodges, whose appointment nouncement was an hour late cause of the delay of his overr train from North Carolina, newsmen he is concerned the economic position of the t ed States is "not at the top.'?' was in reply to a query on wb er he thought the nation wa the edge of an economic re sion. He declared the economy n a new stimulation, "which I 1 we can get beginning Jan. 20 a rebirth ofconfidence." Kennedy headquarters repoe last night that the next Cab announcement will be made W nesday when the Senator wil in New York City, A spokes: said - the appointment would be Secretary of State. REGENT MURPHY: Shows Head Count Problem Bid for Outer Mongolia Seat In UN Refused Consideration, UNITED NATIONS (P - The Soviet Union failed last night to get the Security Council to take up the 14-year-old United Nations membership application of Communist Outer Mongolia. The Soviets raised the issue at a meeting called to consider Mauritania's 5-day-old application, The Council rejected 7-4 the proposal to list the applications on the agenda in that order, with only the Soviet Union, Poland, Ceylon - and Tunisia voting for. Then, in "The University has the equi- valent of 70,000 heads," Regent Irene Murphy said yesterday to the Student - Faculty - Adminis- tration Conference. For the group assembled for the conference, jointly sponsored by the Michigan Union and Student Government Council, Regent Mur- phy used a many-headed man to illustrate the problems involved in the head count of all students de- sired by the Legislature. Regent Murphy pointed out that it costs twice as much to educate upperclassmen as underclassmen. Cuban Exiles Plan Invasion MIAMI (M)-A newly-organized coalition of Cuban exile groups last night announced plans to wage a shooting war against the Fidel Castro regime. The coalition, called the United Front of National Liberation, said it opposes plans to send Cuban a separate decision on a United States motion, the Council voted 9-2 to list Mauritania's application on the agenda and 5-4 against list- ing Outer Mongolia's.- Before the voting, Soviet Deputy Foreign Minister Valerian A. Zorin hinted that he would veto Mauritania's bid for membership unless Outer Mongolia's was ap- proved. He accused the Council majority of. "an old policy of discrimina- tion." Unit TO St Federal Ai1 A national advisory of college administrator ed this week to study of federal funds in high tion will be headed by Ivey, consultant to the of Michigan State Unix The 11-member grout ed by United States Co -er of Education Lawrenc thick will work with ti of Federal Programs i ... Y 5 / J :.:,., . ..r ". J"J f. s $tY is '' rrrd . Jr III i SIR Agi