EPTEMBER 17, 1963 THE MICHIGAN DAILY
PA
Create Malaysia;
Indonesians Mob
British Embassy
JAKARTA, Indonesia (P)-Echoing President Sukarno's opposi-
tion to Malaysia, Indonesian demonstrators mobbed the embassies of
Malaya and Britain in Jakarta yesterday, hours after the four-member
federation took its place as the world's youngest nation.
After stoning the Malayan embassy, a crowd of 5000 stormed the,
British embassy compound, smashed nearly 1000 panes of window glass,
ripped down an iron grill fence, burned the ambassador's Rolls Royce
and tore up the British flag.
Lodges Protest
Britain lodged a formal protest with the Indonesian government.
In London, the foreign office summoned Indonesian Ambassador
B. M. Diah, presumably to register a protest against the attack on the
nembassy as well as a report that
the British consulate in Medan,
eveals P la onthe northern Indonesia island
Revealsof Sumatra, had been sacked.
GEORGE ROMNEY
... willing to meet
For Change ,
A blueprint designed to soften
the economic impact of a cut in
arms spending was unveiled re-
cently by Sen. George McGovern
(D-SD).
Shortly to be introduced as a
mill, his plan sets up a National
Economics Conversion Commission
headed by the secretary of- com-
merce. The commission would be
charged with making a study of
the effect of various kinds of arms
cuts on jobs, incomes and invest-
mnent.
Encourages Local Studies
It would encourage studies at the
local level and make recommen-
dations for programs to relieve the'
problems of conversion.
In addition, the measure would
require defense contractors to set
up their own planning staffs when-
ever they received a contract tying
up 25 per cent or more of their
workers. These planning staffs,
whose expenses could be charged
to the government, would study
civilian tasks their employers
might undertake when their mili-
tary contracts ran out.
Congress Concerned with Cut
McGovern's move coincides with
growing congressional interest in
the problems flowing from a fu-
ture reduction in mlitary outlays.
He plans to introduce the bill
after the Senate votes on the test
ban treaty. The treaty of itself
will not reduce military spending.
But partly because of the less war-
like climate it might generate and
partly because of technological ad-
vances in weapons, there is a grow-
ing belief that military spending
will be lessened at some point.
Among the many proposals
made to ease the shift are stand
by authority for an offsetting tax
cut, and a supply of public works
projects that could be started im-
mediately.
In Kuala Lumpur, capital of
Malaysia, officials expressed con-
cern at the Indonesian outbursts,
as well as a cold shoulder from the
Philippines. But they vowed to
stand their ground even if it meant
the sacrifice of lives.
Undemocratic Union
Meanwhile, Moscow Radio charg-
ed that Malaysia was established
over opposition of the people of
Sarawak and British North Bor-
neo and said the people of Malaya
and Singapore were not consulted.
Meeting Suet
By Romney
On Taxes t
Amid praise and criticism deal-;
ing with Gov. George Romney's
recently announced 12-point fis-
cal reform program, the governor
has scheduled a meeting with
Berkley Mayor George Kuhn and
is expected to accept an invitation
for a similar meeting with De-
troit's Mayor Jerome P. Cavanagh.
Kuhn, head of the Vigilance Tax
Committee and long time foe of
city income taxes, said he received
a letter from Romney agreeing to
meet with his committee Sept. 27
in Warren.
Cavanagh, who issued a state-
ment last week saying Romney's
program would cost Detroit ap-
proximately $10 million if passed
by the Legislature, has sent a
telegram to Romney requesting a
meeting.
Visits Office
Romney visited Cacanagh's of-
fice Friday, but the mayor was
out to lunch. He left a message
with Cavanagh's secretary saying
"I'd be glad to meet any time."
Cavanagh stated a personal
meeting would "avoid the inher-
ent dangers of long-distance dis-
cussion.""
Over the weekend Romney cri-
ticized the mayor, charging Cav-
anagh wants special treatment for
Detroit when the Legislature acts
in its current special fiscal reform
session.
Attacks Proposal
qavanagh had previously stated
that\ Romney's proposal centered
on personal and corporate income
levies and "does not meet the glar-
ing areas of need of the state or
local governments."
Meanwhile, the tax program
drew criticism from Paul Silver, a
UAW local president and treasurer
of the Wayne County Democratic
organization. The union leader also
blasted Democratic Party leaders
for expressing qualified endorse-
ments to the tax plan.
Doesn't Understand
"I just don't understand some
of the enthusiastic Democratic
statements about the governor's
program," Silver said yesterday.
Democratic Party Chairman Zol-
ton A. Ferency, It. Gov. T. John
Lesinski and former Gov. John B.
Swainson are the major leaders
who voiced approval, though some
with reservations.
A statement issued by Ferency
and Lesinski called Romney's pro-
posals a "well rounded program"
that "generally deserves the sup-
port of the Legislature."
Silver took an opposing stand
similar to Michigan AFL-CIO
President August Scholle who call-'
ed the plan a "soak the consumer"
tax program.
Soviet Union,
Canada Make
Wheat Trade
OTTAWA ()A-Canada yester-
day sold the Soviet Union $500
million worth of wheat, the big-
gest wheat deal in its history. '
Of this, $33 million worth will
be shipped directly to Cuba, and
Russia also is expected to divert
an undisclosed amount to the
Eastern European countries it nor-
mally supplies.
Canada's second best customer
is Communist China, which has
bought $400 million worth of
wheat in the past and ordered
$300 million more for delivery in
the next three years.
Trade Minister Mitchell Sharp
said Canadian handling capacity
was the only limiting factor in,
yesterday's deal and Russia might
take more if Canada could deliver
it before next July 31, when the
contract expires.
Fare Shortage
Soviet First Deputy Foreign
Trade Minister S. A. Borisov said
the Soviet Union normally grows
enough wheat for its own needs
and to export, but that bad
weather had hurt the crop this
year.
He added that trade is a two-
way street and Canada must buy
some Russian goods..Sharp said
no hard agreements had bee
reached on this.
The Russian order is for 198
million bushels of wheat and
wheat flour equivalent to 29.5
million bushels. This is more flour
than Canada has ever exported
in one year.
Installment Plan
The deal calls for the Soviet
Union to pay 25 per cent cash for
each shipment and the balance
over 18 months.
Sharp said shipping the wheat,
most of which will move through
the St. Lawrence Seaway, will put
a tremendous burden on the farm-
to-port railways but he was sure
they could handle it.
He said the Soviet Union was
confident it could find the deep
water shipping to take the wheat
from St. Lawrence ports to its des-
tinations.
The Soviet Union was keeping
its own population in the dark
about the wheat purchase. There
was a virtual news blackout on
'harvest news.
World News
roundup
By The Associated Press
RIO DE JANEIRO-Leftist lab-
or leaders bowed to a threat of
extreme measures by President
Joao Goulart yesterday and scrap-
pe.d plans for a nationwide gen-
eral strike in sympathy with 536
air force and marine sergeants
who launched a revolt in Brasilia
Thursday.
The army warned leaders of the
Communist-dominated labor high
command that it would reply with
force to any call from Goulart to
break the strike. The leaders had
planned the strike for yesterday.
WASHINGTON-President John
F. Kennedy will speak to the na-
tion over television and radio on
his tax bill at 7 p.m. Wednesday,
the White House announced yes-
terday.z
Press Secretary Pierre Salinger
said the White House asked the
radio and TV networks for time,
which was granted.
Salinger said he expects the
President to speak for more than
15 minutes but less than the half
hour made available.
NEW YORK - Prices on the
New York Stock Exchange were
mixed yesterday, with the Dow
Jones averages showing 30 indus-
trials down 1.67, 20 rails up .15,
15 utilities up .09 and 65 stocks
down .25.
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WASHINGTON-President John
F. Kennedy has ordered a policy
of severe restraint in preparing
the budget for the fiscal year f
1965, the New York Times and
the Wall Street Journal reported r
yesterday.
Kennedy has virtually banned
any new programs not alreadyt
submitted to Congress in order to1
keep his promise that the deficitf
for the fiscal year starting next
July 1 will be smaller than the
$9.2 billion figure anticipated for
the current year.1
There are two principle ways#
the administration hopes to ac-
complish this reduction.1
The first is a prediction that tax
revenues will greatly, increase be-1
cause of the expected Congression-
al tax cut.
The second wvould involve some
fancy footwark to make spending
increases look smaller than they
are.
Aid Passage
Kennedy made his promise to
hold the line on the budget def-
will probably enact tris year, such
as grants for higher education, aid
for medical and dental schools
and aid for new facilities for the
mentally retarded.
Cuts in Spending
Cuts in spending will be harder
to come by. The administration
hopes they will primarily come
from:
1) Trimming the postal deficit
$250-$300 million.
2) Slashes in spending by the
Atomic Energy Commission and
foreign aid expenditures.
3) A saving of up to $640 mil-
lion in agriculture spending,
4) A decrease in the cost of the
public works program.
The administration may also re-
sort to gimmicks to deliver on its
smaller-deficit pledge.
TIGHT BUDGET:
President Orders
Policy of Restraint
L
w
U
JOHN F. KENNEDY
... cuts in spending
SUKARNO
. . .no new friend
In a broadcast beamed for Brit-
ish listeners, the Soviet radio said
that "it is only British rubber, oil,
tin and bauxite monopolies that
are interested in this neo-colonial
scheme. They fear that they will
lose their profits of the movement
for real independence in Malaya,
Sarawak, Singapore and North
Borneo continues to grow."
In Washington, the United
States recognized the new state.
icit in an effort to aid the passage'
of his tax-cut program in Con-
gress.
Also, some of his economic ad-
visors felt that a large tax cut
combined with another big rise in
spending would be, 'as one official
put it, "pouring the coals on the
economy too fast."
Kennedy may also sense a feel-
ing of alarm in the country that
federal spending has been rising
too fast.
The problem of keeping the rise
in the budget to modest propor-
tions is formidable. The bulk of
each year's spending is largely
determined before the budget-
making process starts, stemming
from laws on the books and ex-
penditures that result from com-
mitments made in previous years.
Built-In Increases
The built-in increases next year
include, the following:
1) An increase of as much as $1
billion in the space program.
2) A rise of several hundred
million dollars in interest on the
national debt.
3) A $500 pay increase for gov-
ernment employees. ,
4) The annual increases in such
programs as welfare grants to the
states and veterans' pensions.
5) The first-year effect of sev-
eral new programs that Congress
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