Seventy-Third Year
EDrTED AND MANAGED IT STUDENTS OF THE UNIYERSrMT OF MJCH!GAN
UNDER AUTHORITY OF BOARD IN CONTROL OF STUDENT PUL3CATIoNS
ere Opinions Are F'ree STUDENT PUBLICATIONS BLDG., ANN ARBoE, MICH., PHONE No 2-3241
Truth will Prevail"

FISCAL REFORM PLAN:
Franchise, Activities Tax Unfair

I AT THE STATE:

Editorials printed in The Michigan Daily express the individual opinions of stafl writers
or the editors. This must be noted 'in all reprints.





AY, SEPTEMBER 20, 1963

NIGHT EDITOR: GAIL EVAN'


Imperialist Sukarno
Disregards the Rules'

ND ONCE AGAIN from the depths of the
swirling Pacific we glimpse the wrath of
a's Little Napoleon-none other than Indo-
ian President Ahmed Sukarno, the last of
red-hot Imperialists.
'he other day that whimsical little fellow
st have desired a marshmallow roast or
iething. At any rate, he used the British
bassy in Jakarta for. fuel.
'or all practical purposes, one must agree
t the state of affairs in Indonesia has gone
enough. Perhaps we must concede that
:arno himself didn't set fire to the British

Ceremony

['HE UNIVERSITY witnessed a new and sig-
nificantly different type of demonstration
esterday when a protest meeting was held in
empathy for the deaths of six young victims
Birmingham's racial strife.
Although the grief over the destruction of
uman life lent a great deal to the uniquely
istere mood, the event generated its own
uiet dignity.
The participants were not the usual homo-
eneous group of guitar-wielding liberals; there
ere faculty members and students, upper-
assmen and freshmen, affiliates and non-
filiates, conservatives and liberals, All types
University people were represented.
'VERYONE WAS THERE to listen and to
participate, not to gawk, question and jeer.
he demonstration had an almost ceremonious
ne. It was a simple ceremony; there were four
'lef speeches, the group sang "We Shall
vercome," and.it was over.
There was one other feature: the group was
ked to send telegrams to federal, state and
by officials, urging continued progress in civil
ghts and telegram blanks were distributed.
Actually, soliciting for the telegrams was the
iy real utilitarian political accomplishment
the meeting. All the rest was emotion. But
the context of the situation the telegrams
ere adequate and in very good taste.
)NE CANNOT HELP but feel emotion in that
context. The Ann Arbor Police had plain-
)thesmen present in case the emotion got
t of hand. But it did not. There were no
olent threats; not so much as a voice was
ised in emotion.
Yesterday's meeting was a strong emotional
perience, tempered with' rational action. It
this synthesis of humanity and practical
ason that is our hope for an ultimate solu-
in in civil rights. ROBERT GRODY

Embassy in his capital, but it would seem a
safe assumption that he didn't first read of it
in the newspapers. After all, the man is a com-
plete dictator with full control of all major
events-such as burning embassies and seizing
territory.
IF WORLD OPINION could become enraged
at the arrogant actions of the Nhus in Viet
Nam for beating the Buddhists, it should cer-
tainly become equally upset with Sukarno for
burning out the British and thwarting the
Malaysians.
Things were bad enough when the United
Nations, with the open-hearted support of the
Unted States, all but forced the Dputch to turn
over New Guinea to Sukarno. Indonesia had
no claim on New Guinea except that it was
next door (which is like saying the United
States should take over Bermuda because it's so
close to Florida.)
But ridiculous as that maneuver was, it pales
in comparison to Sukarno's latest wrinkle (in
which The Philippines is not entirely blame-
less either).
NOW ASIA'S ANSWER to Sukarno is clearly
sticking his nose into a matter 'which does
not concern him. He is upset that the United
Kingdom proposed to allow the formation of
the new, state of Malaysia, the anti-Communist
federation of Malaya, Singapore, Sarawak,
North Borneo and Brunei (sometimes).
What must upset him even more is that the
five countries involved actually want to feder-
ate and don't want his counsel in the matter.
Clearly Ahmed Sukarno has gone too far this
time. To suggest he has the slightest say in
the formation of Malaysia is like suggesting
that the United States should have been in-
strumental in the determination of the recent
federation of Trinidad and Tobago, just be-
cause they happened to be in the neighborhood.
IT IS TIME that the United Nations stepped
into this matter and took Sukarno to task.
If the United States or France or Belgium were
acting this way, there would be no end to the
hullabaloo. Sukarno, being a newcomer, hopes
to get away with monkeyshines that wouldn't
be tolerated in older nations.
But there is a penalty in stepping into the
International Major Leagues: one has to play
by the major league rules and not try to use
the same ones that prevail in the minors.
Sukarno wants to be a Big Man in Asia and
environs. Fine, but he is simply going to have to
stop pushing the minor leagues around.
Time is now to put this little man in his place
before he becomes thoroughly unmanageable.
Perhaps we can start by billing for the British
Embassy .- M ICHAEL HARRAH

(EDITOR'S NOTE: This is the
fourth in a series of articles investi-
gating Gov. Romney's proposed fis-
cal reform program.)
By STEVEN HALLER
WITH THE FOURTH and fifth
specific legislations included
in Gov. George Romney's 12-part
plan, we come to two proposals
geared toward business: repeal of
the business activities tax and re-
vision of the corporation franchise
tax.
Both of these plans are worthy
of separate consideration by their
very nature. On the other hand,
both deal with a similar situation:
competition between newly incor-
porated businesses and old, es-
tablished firms.
* * * ,
THE CORPORATION franchise
fee is a. license fee paid by a firm
for the privilege of doing business
in Michigan. It amounts to a levy
of five mills on the dollar, or .005
per cent, based onideclared capital
evaluation. The tax essentially de-
pends upon how much a given
corporation is worth.
Romney's proposal would revise
the current corporation franchise
fee to exempt newly incorporated
businesses for the first two years
of existence, which he notes "us-
ually are the most hazardous for
a struggling young enterprise."
Since "the state must do what it
can to help young business prosper
in Michigan," this tax revision
falls into the category of what
Romney calls "tax justice."
Likewise "tax justice, which will
help to create jobs," would result
from the repeal of the business ac-
tivities tax, the governor notes.
This tax is based on a company's
gross income-that is,' the total in-
come of a firm before expenses
are deducted-and comes to 7.5
mills, or .0075 per cent.
* * *
THE major consideration where
both the corporation franchise fee
and the business activities tax are
concerned is the fact that they
affect new and old businesses
alike. The tax bill falls due reg-
ularly for a corporation which has
just come into existence and is
struggling to compete with more
experienced companies. It falls due

just as regularly for an older
corporation, even if that firm has
run into a year of financial hard-
ship.
Or, as Romney puts it, the taxes
"must be paid by all corporations
alike, regardless of their age or the
color of the ink on their balance
sheets." In effect, the taxes pen-
alize new businesses by treating
them the same as highly prof it-
able ones.
Romney takes pains to deny
that whether or not a plant de-
cides to locate in Michigan is
totally dependent upon the tax
situation it will find when it gets
here. Labor costs, materials and
other factors are just as impor-
tant, if not more so, so that a firm
wil generally consider these com-
modities before it looks closely into
the matter of how it may expect to
be taxed.
AND YET it would be danger-
ously ridiculous to discount the
business tax structure altogether.
Romney notes that "every study of
Michigan taxes made in recent
years agree-the Conlin study, the
Yntema study, the Citizens for
Michigan studies and all others-
that Michigan's state and local tax
levels and systems deter location
of new business in this state.
"All of these studies are neatly
summarized by one conclusion of a
tax study by the Indiana Chamber
of Commerce, published in 1963,
which stated:
'Taxwise, Michigan probably is
the least competitive for indus-
trial development among Indiana's
five neighbors.'"
Romney also cites the case of a
national corporation which re-
cently decided to sell its Detroit
location and move to Cleveland
"because all other factors were
substantially equal-except taxes."
* "
OF COURSE, a large share of
business taxation falls under the
heading of property and corporate
income taxes; these will be con-
sidered in a later article. When we
turn to the business activities tax
and the corporation franchise fee,
we are concerned more with two
levies which share the common
fault of inequity.
Repeal of the corporation fran-
chise fee will cost the state $500,-

000, which is not a frantastic sum
when compared to the $78 million
that the state will lose from re-
pealing the business activities tax.
In fact, the state would probably
not lose a great deal of money
even if it abolished the franchise
fee altogether.
In view of the exceedingly slight
difference it will make whether
the fee is retained or not, Rom-
ney's proposal merely to revise it
does not seem like a great deal to
ask.
* * *
SIMILARLY, the business ac-
tivities tax could easily prove to
be expendable. This tax has long
been a source of problems to cor-
porations, new and old. A firm
faces "complicated methods to es-
tablish tax liability and
mountains of forms to fill out" in
order to have the dubious privilege
of paying this tax, as Romney
points out.
In addition, businesses are faced
with the paradox that the cost of
materials can be deducted from
the activities tax while that of
labor is not exempted. The reason
for this is that all concerned gen-
erally assume that the materials
have already undergone taxation
elsewhere and should not undergo
"double taxation."
Such a system can understand-
ably discriminate against a firm
which has high labor costs com-
pared to their expenditures for
materials. Research firms fall into
this category, as exemplified by
Parke-Davis, which must pay its
business activities tax right along,
whether or not its research ac-
tivities yield anything that can be
put to a profitable use.
Such problems will be readily
and easily solved if Romney's pro-
posal to abolish the business ac-
tivities is followed. -
MENTION should be made of
one objection that has been made
against Romney's proposals: the,
idea that such plans will allow
undue competition with establish-
ed firms and thus actually en-
danger the state's economy.
It cannot be denied that a cor-
poration that has had a bad year
will not favor some "young up-
start" coming in and competing
without having to pay any taxes.
But in the first place, to force a
young company to take its chances
against a more experienced' firm
on the same tax basis is to imperil
the very idea of free enterprise at
the outset.
At the same time, the needs of
an otherwise successful business
cannot be discounted. The ideal
situation would be to allow such
an exemption for new businesses
and struggling ones alike, based
on a report of profits incurred by
the corporations involved.
One should also recall that if
the governor's proposals are pass-
ed, there will be only a fraction
of the former franchise tax to
worry about, with the business ac-
tivities tax totally removed. This
will amount to a sum too small to
make that much difference.
* * *
THE PASSAGE of these two
proposals is in for much disagree-
ment in the Legislature, and the
outcome is hardly assured. If
new businesses are to locate in
Michigan and if they are to flour-
ish here in competition with busi-
nesses that have been around for
many years, Romney's legislations
should be passed. If they serve to
bring more new business to this
state at a time when such ex-
pansion is greatly welcomed, they
will be a necessary form of "tax
justice."

IN EVALUATING a film like the
David Lean-Robert Bolt collab-
oration "Lawrence of Arabia," the
temptation to bring in historical
material is a strong one. Beyond
the obvious necessity for dramatic
compression, what limitsrshould
the artist respect in approaching
historical fact? This question is
difficult but one that I am not
sure it is necessary to answer. In
the end, the most rewarding dis-
cussion of a film such as "Law-
rence" will turn° on a more basic
question: how successful is the
work of art within its own terms?
This is not a critical evasion, but
shows an equally basic. esthetic
commitment.

understand. Perhaps the weakness
of the Deraa sequence can be ex-
plained in terms of someone's --
Lean's or someone's-attempt to
have things both ways.
ADMITTEDLY, the whole ques-
tion of Lawrence's sexuality is far
from clear. One ,alternative in a
fictional treatment, therefore,
would be to leave it alone and
work convincingly in different
terms. This, Lean has failed to do
fully.
Another alternative, and more
difficult, would be to face up to the
sexual issue. If the fact of sexual
abuse were made clear in the De-
raa sequence, then it would bear
its own weight. But Lean only
hints at this in a bit of embar-
rassingly facile symbolism. Before
Lawrence charges down on the re-
treating Turkish garrison, yelling
"No prisoners," the camera cuts
to a pair of ladles swinging under
a wagon. Where statement is re-
quired, Lean offers only a very
weak suggestion.
DESPITE ITS FLAWS, "Law-
rence" remains technically master-
ful. The desert is eloquent. But as
Peter Brook has noted, the cam-
era set-ups for some of those beau-
tiful long shots were probably con-
ditional on so many purely physi-
cal factors that the director's pos-
sibility, of choice could scarcely
have existed. "Lawrence" could
have been made by any of eight or
nine top directors in the American-
British industry under the given
conditions. This is not so much a
criticism of Lean as of the idiom.
"Lawrence" is certainly the most
intelligent of the epic-spectaculars.
But can aapersonal cinema be
created -at all within the narrow
spectrum of choices allowed to the
director by this idiom?
-David Zimmerman
LETTERS
Ito the
EDITOR ~

I

Fine but Flawed

TODAY AND TOMORROW:
The. WaitingGame:
A Good Policy


THIE LIAISON

-,-:. . , .
,_
r -'__ °-
' . t~ , i t s
-- , *t .

Gait Evans, Associate City Editor



OOD THINGS don't always come in threes.
Three membership judges to implement Stu-
lent Government Council's proposed member-
hip selection practices regulation will only de-
ay Council's enforcement of the University
ion-discrimination policy.
At the Wednesday meeting, SGC should not
lave scrapped Prof. Robert Harris's proposal
or a single membership judge in favor of the
)ffice of Student Affairs tribunal plan.
A tribunal system with a student, an admin-
strator from the OSA and a faculty represen-
ative is unrealistic in terms of SGC's past ex-
erience with a joint-membership committee.
Council has no assurance that it will be able
o fill the faculty slot on the tribunal and
recedent is against it.
IHE FUNCTION and make-up of this new
three-man body differs little from that of
hie old membership committee-the one that
asn't met in almost a year because the Stu-
ent Relations subcommittee of the University
enate refused to nominate new faculty mem-
era for the body.
SRC Chairman Richard Cutler indicated
ast fall that the group withheld the nomina-
ons because faculty members felt that SGC
oes not have the right to establish a "Univer-
ty-wide committee"-one in which the facul-
y, holding only one or two seats, must take
esponsibility for a report or recommendation
pith which they might not agree.
The SRC also noted that since Council clear-
r has the authority to implement the Univer-
.ty regulations prohibiting discrimination in
;udent organizations, it should make decisions
i this area without the support of the faculty
r administration.
HE PARALLEL between the old committee
and the tribunal is clear. The SRC should
ike the same position toward the three-man
ommittee as toward the old membership
roup.
Under the tribunal the faculty member might
so be forced into a situation in which he
ssented from the prevailing decision but still

The faculty's other objection is still valid.
Certainly SGC's authority over membership
practices has not diminished since last Novem-
ber. It has, in fact, increased in assurity since
the Regents reiterated its delegation of author-
ity to SGC last spring. There is no reason why
Council must have the influence of faculty and
administrators on its side.
CERTAINLY the advantages of the single
membership judge, hopefully to be chosen
by SGC from the vast resources of the Law
School, are clear. The decision-making process
would be direct. There would be little chance
of outside pressures, delay and diffusion of
power.
On the other hand, it is easy to see one po-
tential reason why the OSA prefers the three-
man committee rather than the single judge.
The OSA wants an in into the decision-making
process.
If Council were to take severe action against
a student group, as it did in 1958 when it re-
moved recognition from Sigma Kappa social
sorority, there is a good chance that the vice-
president for student affairs would have again
to reverse Council action.
Such a veto would cause quite a ruckus. It
would be a lot quieter to squelch any action
which might provoke a veto within the tri-
bunal.
THE STUDENT would be the key to the three-
man body. Pressures would be brought to
bear upon the student member by peers who
might be members of the organization involved;
by the liberal faculty members who want to see
discrimination removed from the campus and
by administrators who don't want to face a, veto
situation. Such pressures would obviously im-
pair the impartiality of the student-member
and the effectiveness of the tribunal itself.
Certainly if the vice-president of student af-
fairs wished to exercise his veto, it would be
much easier to rationalize the move, if he could
point to a split-decision on the part of the tri-
bunal.

By WALTER LIPPMANN
AFTER A NUMBER of false
starts and altogether too much
talking, the administration seems
to have come to the conclusion
that in Viet Nam the only prac-
tical policy is to wait and see. It
is a sound conclusion. No dra-
matic solution is possible.
There is no way to make over
Diem's government in Saigon or
to produce a new government
which will be so beloved by the
people that they will fight and die
for it. There is at the same time
no way in which Washington could
disentangle itself in South Viet
Nam and continue to subsidize and
support Diem's government, exer-
cising such influence as we can.
And so, while I have always
thought it was a mistake to be-
come engaged in Southeast Asia,
while it is evident that we have
made many mistakes in dealing
with Diem, we must, I believe, stay
with him and his family for the
indefinite future.
The United States cannot re-
nounce unilaterally our commit-
ment. We must hold on and wait-
wait, I should imagine, until there
is a fundamental change in the
power politics of Southern Asia.
IF I MAY VENTURE to say more
specifically what it is that we
must wait for, it would be the
opening up of the rift, which al-
ready exists, between North Viet
Nam and Red China, between Mao
Tse-Tung and Ho Chi Minh. In
other words, just as the security
and peace of the Balkan peninsula
in Europe became possible after
Tito's break with Stalin, so the
pacification of the Indo-Chinese
peninsula depends on some simi-
lar development in North Viet
Nam.
For if ever North Viet Nam be-
comes, like Yugoslavia, no longer
the satellite and agent of a great
Communist power, there will be
opened up possibilities of a nego-
tiated settlement in Southeast
Asia.
Quite evidently, there has been
no such break between Mao Tse-
Tung and Ho Chi Minh. But such
a break is possible. There is an
historic fear in Viet Nam of Chi-
nese occupation based on the ex-
perience of many centuries. Such
ancient national feelings can at
times prove to be more potent than
the rather recent ideological bonds.
It is an important interest of the
whole non-Chinese world, not only
ourselves, but also the Russians,
the French, the British and the In-
dians, to do what we can-but to
do it very discreetly-to induce a
change of front in North Viet Nam.
OF ALL FORMS of prophecy,
the most foolish that a newspaper-

against India. For this would pre-
cipitate a military adventure
which would leave Peking with
little surplus energy and power to.
hold Viet Nam in line.
It may well be, indeed it is prob-
able, that China, though it is pre-
paring to invade India as Mr. Jo-
seph Alsop has reported so circum-
stantially, may pause. For it must
be known that the United States,
and possibly the Soviet Union, too,'
would intervene. But as long as
Red China is mobilized and poised
for a large attack on India, the
other border states, including
North Viet Nam, have a certain
freedom of maneuver.
* * *
WE MUST NOT expect too much
too soon, and in the meantime we.
had better go on holding not only
President Diem's, hand, but also
that of Madame Nhu. While this
may not be a very satisfying or at-
tractive thing to be doing, we must
leave it to the historians to de-
cide how we got there and whether
the trip was necessary.
(c) 1963, The Washington Post Co.

PETER O'TOOLE
' .. enacts Lawrence
In its idiom, "Lawrence" is a
very good, but seriously flawed,
film that could perhaps have been
great. The fault is not in the act-
ing. Lean gets fine performances
from Alec Guiness (Feisal), Jack
Hawkins (Allenby), and Anthony
Quayle (Brighton), and an espe-
cially perceptive one from Peter
O'Toole in the almost impossibly
difficult title role.
O'Toole combines a proper sense
of self-consuming messianism with
the image of the British public
school boy. He creates a character
believable both as a figure who.
wants to put his own scar on the
historical map and one who is con-
scious of the fact that he has be-'
come a tool of British imperialism.
Also, Omar Sherif is perfect as
Lawrence's Arab companion. This
role is vital in terms of Lawrence's
character. It is through All that
we are finally convinced of Law-
rence's stature, and are made sen-
sitive to the antinomies of his na-
ture.
THE FLAWS in "Lawrence" are
not in characterization. but in
structure. Throughout the film,
Lean concentrates on Lawrence's
tolerance for physical pain and his
attitude toward killing. Therefore,
when he is forced to execute Gas-
sem, the focus should be entirely
on the effect of this act on Law-
rence. That the condemned should
be a man Lawrence had heroically
saved from the desert only blurs
this focus. It is a needless contriv-
ance.
More' seriously, the Deraa se-
quence does not carry its weight in
the film. Lawrence's tolerance for
pain has been well-established by
this point. As a result, it is diffi-
cult to believe that a simple beat-
ing, even a brutal one, could cause
the sharp break in his character
after the Deraa incident. Lean, in
other words, has not adequately
prepared us for this break - a
break which we should be able to

"What's Our Firm, Unswerving Asia Policy This Week?"

To the Editor:
PETER STEINBERGER'S points
casting doubt on the integrity
of Monday night's sit-i4 at City
Hall are'intelligent and well taken,
but not unanswerable. One of the
reasons that I did not participate
in these sit-ins prior to Monday
evening was that I was also con-
cerned with the questions which
Steinberger has raised, but after
a great deal of thought two con-
clusionsbecame clearto me:
I. The guarantee of the' indi-
vidual's right to the "pursuit of
happiness," which certainly does
apply equally to landlord and
renter, bigot and free-thinker, is
not itself a premise. It is a con-
clusion derived from the prior
premise that "all men are created
equal."!
Unless it is first assumed that
all men are equal, there can be no
reason for claiming that all are
entitled to the pursuit of happi-
ness. The first premise, equality,
must be fulfilled before the second
can, in justice, be upheld.
2. Ann Arbor's loitering law is
not a Jim Crow law, true enough.
But legal history shows that this
country has wisely recognized that
the law consists not only of the
words of a written statute, but
must also be interpreted accord-
ing to intent, and according to the
changing conditions of society.
Ann Arbor's loitering law was
not intended to prevent peaceful
political expression. Modern par-
lance in the United States regards
the "sit-in." as, a form of political;
expression. Therefore, by syllogism
again, Ann Arbor's loitering law
was not intended to prevent a
sit-in, however this case may now
be decided.
These tv o points have satisfied
me. I hope that they may satisfy
Steinberger and the many other
individuals who, like myself, have
had legitimate doubts concerning
Monday night's form of protest.
-Martha MacNeal, '64
Protest . .
To the Editors:
W E ARE WRITING this letter
from the Washtenaw County
Jail. On Tuesday, Sept. 17, we
were arrested, with 50 others, for
sitting-in at the city council
chambers in city hall.
At this time, we have chosen
not to pay bond, which was set
at $25 apiece. We have also been
fasting since we came to Jail; we
intend to continue to do so for
the duration of our stay here.
These actions may be interpreted
by some as a "publicity stunt."
Our true purpose is to protest
what we feel is a gross injustice
to this community.
* * *
WE MAY or may not be quilty
of the loitering charge against us.
The major issue at stake, how-
ever, is a moral rather than a
legal one. On Monday evening,
the city council passed what they
termed a fair housing ordinance.
It is hardly fair; it prohibits dis-
crimination in less than one-
third of the housing in Ann Arbor.
* * *

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