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FRIDAY, MAY 6,196,.

THE MICHIGAN DAILY

PAGE THRES .-',


FRIDAY, MAY 6, l9bL THE MICHIGAN DAILY

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*'GM R
After
Disclosure i
Starts Drop
In Stocks
Production Slowdown
First in Five Years
DETROIT i)--The auto indus-
try was jolted by a drop in April
sales and announcement of a pro-
duction cutback-the first in five
years for inventory reasons-at
General Motors.
Meanwhile, the stock market
took one of its worst one-day loses
in recent years as two waves of
selling battered down prices.
GM's announcement and uncer-
,. tainty over Johnson administra-
tion ax plans set off the tremors,
brokers noted.
Treasury Secretary Henry H.
Fowler said yesterday that the
administration would only raise
taxes if needed to combat infla-
tion. Wednesday Federal Reserve
Board Chairman William Mc-
Chesney Martin Jr. called for a
"simple, clean-cut across-the-
board increase in taxes."
Losses exceeding $2 and $3 a
share were common, and some
issues fell more than $10 a share.
GM stock fell to a 1966 low of $88.
For the first time this year the
Dow Jones average of 30 indus-
trial stocks closed below 900.
Some auto industry sources were
quick to blame the drop on bad
publicity resulting from the auto
safety issue.
GM's brief announcement said
four of its 23 assembly plants
worked short time this week "to
get production schedules in line
with current stocks in the field."
There had been previous slow-
downs or shutdowns in various
GM units, but these were due to
things like supplier strikes or a
railroad strike.
American Motors has been
plagued by such shutdowns in re-
cent months but it worked a reg-
ular five-day week this time while
GM was having difficulties..
Chrysler was on a five day week
and Ford had 10 of its 17 assembly
plants listed for overtime work
this Saturday.
GM spokesmen said there was
no indication whether the short
work week would be repeated next
week. Under terms of its contract
with the United Auto Workers, the
company must notify the union
by Friday if it plans to put any
units on short time next week.
Donald N. Frey, Ford division
general manager, expressed belief
that economic factors, such as
higher prices to housewives in
grocery stores, were an important
part of the sales picture.
There had been virtually unan-
imous belief among Detroit's auto
executives that publicity attending
the auto safety issue was going to
affect sales sooner or later. "The
time may be now," said one offi-
cial who asked not to be quoted by
name.
A breakdown of April sales;
showed all four companies ran
behind their 1965 pace. On a four-
month basis, however, Ford and
Chrysler sales were ahead of last

year while GM and AMC ran be-
4 hind.
Much of GM's sales lag showed!
up in its Chevrolet Corvair line
where April figures, for instance,
showed 7,903 sales compared with
19,764 a year ago. Corvair has
been about the most frequently
mentioned car in auto safety hear-
ings,
GM has denied every charge
made against the car, and GM
spokesmen blamed what they
termed unjustified and unfounded
criticism for the decline.

educes
April

Production.

Sales

Drop

Fowler Says Johnson To Raise
Taxes Only To Fight Inflation

NEW YORK (APi)-Treasury Sec-
retary Henry H. Fowler said yes-
terday the Johnson administration
would resort to a tax increase only
if it becomes apparent that one is
needed to combat inflation.
He said the administration
would act without hesitation if
more restraint is needed on the
nation's economy.
Fowler's speech to the ninth
annual University of Connecticut
Loeb Awards presentation lunch-
eon was in effect an answer to
William McChesney Martin Jr.
Martin, chairman of the Federal

Reserve Board, called Wednesday
night for a "simple, clean-cut,
across - the - board increase in
taxes."
Fowler declined to make any
direct comment on Martin's pro-
posal.
He referred all inquiries to his
speech, which he said simply re-
views the "pros and cons."
In the talk he said: "For the
present, therefore - while the
economy shows no definite pat-
tern-it is essential that we re-
main within the bounds of the
President's budget, and that we

Viet Election Group Meets
As Buddhists Warn Regime

SAIGON OP)-An election com-
mittee representing various Viet-
namese factions met in Saigon
yesterday to draft an electoral law
within 'a month for forthcoming
elections.
The elections are designed to
lead to a civilian government, re-
placing the military regime of
Premier Nguyen.Cao Ky.
Ky's request that the election
commission get quickly to work
seemed to take the edge off his
statement Tuesday that the elec-
tions might be postponed to Oc-
tober. He earlier had promised
elections by September at the lat-
est. U.S. officials said the delay
of elections by several weeks would
not matter.
Buddhists Warn?
But Thich Tam Chau, head of
the Buddhist Institute that is the
main Buddhist organization, de-
clared that if the elections are
not held before September, the
Buddhists "will fight with all the
power at their command."
On a visit to Colombo, Ceylon.
he charged that the Roman Cath-
olic minority in South Viet Nam
is afraid the Buddhists will get a
majority in the elections and are#
trying to disrupt plans for voting.
The military government cut
the election committee from 100 to
30 members. Those remaining are
largely jurists, political represen-
tatives and leaders of religious
groups. The committee will deter-
mine voter eligibility, outline elec-
tion districts and set the voting
machinery into motion.
Ground War
In the ground war, American
troops killed 100 Viet Cong in cen-
tral Viet Nam yesterday and withi
South Vietnamese forces, haveI
forged a double ring around 300,
to 400 more trappel in a valley.
a U.S. spokesman reported. It was
the first heavy fighting in three'
weeks.
Units of the U.S. 1st Cavalry,
Airmobile, Division clashed with
the large enemy force in the Bong
Son area, 280 miles northeast of
Saigon and the scene of major
fighting earlier thisyear.
The battle erupted during the
first rains of the monsoon season
as allied troops were on the alert
for a possible Communist offen-
sive. Whether the Viet Cong near
Bong Son were massing for an at-
tack under cover of the rains was
not known.
Allies Encircle Enemy
Associated Press correspondent
Bob Poos, reporting from the bat-
tle area, said allied forces in the
Bong Son area had seized heights
and thrown two encircling rings
around what is believed to be a
reinforced battalion.
The action continued last night
and there were indications that the
Communists intended to fight it
out to the end.

Digging in, the Communists were
reported fighting back with mor-
tars, machine guns, recoilless rifles
and rifles in heavy exchange of
fire, Poos said. U.S. casualties were
reported to be light, however.
Air War
In the air war, U.S. Air Force
and Navy planes took advantage of
a break in the weather to swarm
over North Viet Nam after a two-
day lull enforced by the monsoon
rains. They attacked bridges and
supply routes but no specific tar-:
gets were listed. Nor was there
any indication of how many mis-
sions were flown.
B-52 heavy bombers from Guam
plastered an enemy arms factory
and troop training area near the
Cambodian border, 75 miles north-
west of Saigon. It was the fifth
straight day of B-52 raids on the
supply areas there at the south
end of the Ho Chi Minh trail.
Despite the three weeks of rel-
atively light action on the ground
U.S. combat deaths last week dou-
bled over those of the previous
week. A U.S.. spokesman reported;
70 Americans killed, 589 wounded
and seven missing compared with
35 killed, 547 wounded and eight
missing the week before. Commu-
nist casualties were given as 456
killed and 98 captured, compared
with 694 killed and 69 captured
the week previously.
Elsewhere, Mayor Willy Brandt
of West Berlin, head of the Ger-
man Socialists, defended the U.S.
position in Viet Nam at the open-
ing of the fourth Socialist inter-
national congress in Stockholm
Sweden. He said an American
withdrawal without a political so-'
lution and security guarantees
would not promote world peace.
In Geneva, UN Secretary-Gen-
eral U Thant told reporters he
saw no hope that any country
or the United Nations could "con-
tribute toward a solution of the
Viet Nam war, at least for the
moment."

continue to keep a close and care-
ful watch over all contingencies
that might occur to require a tax
increase."
The secretary said if the na-
tion's economic growth shows def-
inite signs of laying "the founda-
tions for a strong inflationary
spiral in 1967 . . . a prudent and
preventive tax increase this year
would enhance the dangers of
"overcure."
"Our effort was, and remains.
to apply as much restraint as
necessary-and no more," he said.
"And our conviction was, and
remains, that with economic
trends still unclear and the impact
of the fiscal and monetary changes
still untested, there was some dan-
ger of overcure-some danger of
applying what events would re-
veal as an overdose of economic,
restraint."
Among the factors which Fowler
said must be watched are the psy-
chological impact of increased U.S
activity in. Viet Nam, the effect
of the monetary restraints imposed
by the Federal Reserve Board, the
collection of higher Social Security
taxes begun in January, and what
Congress is likely to do with Presi-
dent Johnson's spending proposals
for fiscal 1967.
He said if these factors get out
of hand "then the President will
ask for further fiscal restraint. He
will have no choice-and, neither,
as he repeatedly declared, will he
have any hesitation."
World News
Roundup
By The Associated Press
PARIS-France will use its new
restrictions on flights of North
Atlantic T r e a t y Organization
planes as a means of pressure in
negotiations over withdrawal of
NATO forces from France, govern-
ment sources made clear yesterday.
France has informed its NATO
partners that as of June 1, per-
mission to use French air space
will be subject to monthly review.
The decision was taken in con-
nection with France's plan to ex-
pel allied forces-mainly Ameri-
can-from France by April 1 of
next year.
WASHINGTON - The Defense
Department issued a call yester-
day for induction of 26,500 men
in July. All the draftees will serve
in the Army.
The July call was 11,500 larger
than June but about 8000 smaller
than the May quota.
The Navy, Marine Corps and Air
Force did not draw on the draft
for July manpower requirements.

Exemptions
From Rights
Bill GrantedI
Small Private Club,
Boarding Houses Not
Included in Measure
WASHINGTON (' - Small
owner-occupied boarding houses
and private clubs apparently will
be exempted from the adminis-
tration's proposed antidiscrimina-
tion housing law.
Atty. Gen. Nicholas Katzenbach
offered no objection to such ex-
emption by Congress yesterday
when he ap eared for another day
of questioning by a House Judi-
ciary subcommittee on President
Johnson's new civil rights bill.
Rep. William C. Cramer (R-
Fla) came to the rescue of "Mrs.
Murphy," the fabled-and ficti-
tious-operator of a small board-
ing house who figured prominently
in debate on the 1964 Civil Rights
Act.
Exemption Given
Congress specifically exempted
the Mrs. Murphy-type operation
from that law, saying its ban on
discrimination in public accommo-
dations did not apply to houses
occupied by the owner, with five
rooms or less for rent.
Cramer said the proposed open
housing law would cover the Mrs.
Murphy-type boarding house, and
Katzenbach agreed.
"But the issue here is different,"
he said, "and if the Mrs. Murphy'
exemption is extended to this act
it wouldn't affect the basic pur-
pose of the act."
The purpose, as outlined by Kat-
zenbach on Wednesday, is to make
all residential housing available
for sale or rent to anyone with
the price to pay for it.
Katzenbach agreed with Cramer
that the proposed language would
cover private clubs used as resi-
dences, which are also exempted
from the public accommodations
law, and once again the attorney
general said if Congress wished
it could continue the exemption
without damaging the basic goal
of the proposed new law.
Omnibus Bill
The proposed new law is an
omnibus measure which seeks to
speed school desegregation, end
discrimination in jury selection
and afford greater protection for
civil rights workers, as well as end
discrimination in housing.
The new school desegregation
provision would authorize the at-
torney general to bring desegrega-
tion suits at his own discretion.
whereas present law requires a
written complaint.
In drafting it, the administra-
tion eliminated language that in
the present law prohibits any U.S.
official from ordering transporta-
tion of school children to correct
racial imbalance.
"Since there is nc thing in the
act that authorizes such action to
achieve racial balance," said Kat-
zenbach, "there seems to be no
point in language that excludes
such action."
When Cramer, who had the pro-
vision inserted in the 1964 bill
persisted with his criticism of the
new language, Katzenbach said if
Congress wanted to reinstate it
it was all right with him.
Harper's
magazne
in May

The
IChanging,
Campus
A SPECIAL REPORT
College
Newspapers:
Trivial;
or Timid?
Can administrators, faculty
and students together
achieve a truly free press?
The
New Direction
for Negro
Colleges
What is their unique advan-
tage over other American
Colleges?
Cheating
in College
Is a hardhanded (but soft-
hearted) policing system
the only practical remedy
for cheating in college?
Students Today
-The Romantic
Generation

By WILLIAM L. RYAN
Associated Press Special Correspondent
Red China may be experiencing
its most serious political crisis
since the 'Communist party took
power on the mainland almost 17
years ago.
The trouble seems to involve
China's monumental economic
problems and whether total regi-
mentation and long-term auster-
ity are the only answers. It may
reflect weariness in China with an
economy of bare subsistence.
Near the top of the list of
purge prospects in what Politburu
propaganda calls a "struggle to
the death" is an official who ques-
tioned total regimentation as the
answer to all problems.
This means Wu Han, historian
and playwright and vice-president
of the Peking City Council -
deputy mayor. He has served as a
propagandist and as head of one
of the innumerable "friendship"
societies, this one involving
"friendship" with neighboring Ne-
pal, where China often exerts pres-
sure.
Policies Questioned
Evidently, Wu once questioned
the wisdom of the 1958 "great leap
forward," and of the subsequent
break with the Soviet Union. He
is being denounced as one whose
writing has a "black anti-Commu-
nist and antipeople thread." He is
accused of spreading "poisonous
influence, on achieving fame and
glorifying the family, an expres-
sion of bourgeois individualism."
Wu is only one of many intel-
0

DISSENT GROWS:

Report Political Crisis
Developing in Red China

lectuals likely to feel the lash of spectacular failures. The break
Politburo anger. A widespread with the Russians became so wide
purge is under way to root out that Moscow cut off economic and
"poisonous weeds." Scholars, writ- military aid and withdrew Soviet
ers and professors are being warn- technicians.
ed not to oppose the official line; China held her own for sev-
not to fall into a trap of "Soviet eral years. But now, suddenly, ideas
revisionism." They are being warn- such as those of Wu Han have,
ed also that China faces austerity retroactively, become great sins.
indefinitely. Throughout China there is an of-
Long Period ficial hue and cry against him.
"A very long period of time is He is accused of having notions
needed to decide who will win in about "an American-type 'free
the struggle between socialism and world'." He is accused of advo-
capitalism," said Liberation Army cating Soviet-brand revisionism
Daily, the armed forces newspa- which would mean more for the
per. "Several decades will not be consumer. He is "anti-socialist and
enough. Anywhere from one to sev- anti-party."
eral centuries will be required for Basically, the purge seems aim-
success." ed at the intellectuals who are
Wu Han is just a symbol, anoth- accused of advocating peaceful in-
er form of warning. He committed stead of violent evolution.
his major sin five years ago and Said the army paper: "It is in-
it is catching up with him. Back deed a tremendous lesson that the
in 1961 he published a play about Soviet Union, the first great So-
the Ming dynasty days. Critic, cialist country, has been going
have just discovered that he por- down the road of capitalist res-
trayed an imperial official not toration through a process of
only as a human, being but one peaceful evolution under the con-
who was decent and popular. Ac- troland manipulation of a hand-
cording to the Politburo's doctrine ful of revisionists who have usurp-
that was impossible. ed the leadership of the party and
Why bring it up now? Probably state."
there is increasing official worry The developing political crisis on
over jnternal affairs. The aging mainland China can also be at-
leaders also worry about the in- tributed to uncertainty over the
flux of younger blood into the whereabouts of Mao Tse-tung, the
leadership as their members pass aging party revolutionary who led
away. the Communists to victory in 1949.
Difficult Period Mao has not been seen publicly
Five years ago, China was in a since late November last year, and
difficult period. The "people's com- there has been growing specula-
munes" and "great leap" had been tion that he may be ill or dying.

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