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Ninety Years of Editorial Freedom _
Vol. XC, No. 129
Ann Arbor, Michigan-Saturday, March 15, 1980
Ten Cents
Eight Pages plus Supplement
r
Carter seeks
drastic
budget cuts
Inflation plan to create surplus
From AP and UPI
WASHINGTON-President Carter
announced yesterday he plans to battle
inflation by creating the largest federal
budget surplus in more than 30 years,
limiting consumer credit and raising
gasoline prices by 10 cents a gallon.
Carter invoked an existing unused
authority to impose a $4.62 fee on each
barrel of imported oil. The fee will
result in a 10-cent-per-gallon increase
in gasoline prices, effective May 15.
In an unprecedented action, he
announced what amounts to a complete
revision of the $616 billion budget for
fiscal 1981 he submitted to Congress
just six weeks ago.
In a White House speech, Carter said
the inflation rate, which was 18 per cent
in January on an annual basis, is a
"dangerous situation that calls for
urgent measures." The 1979 inflation
rate was more thin 13 per cent.
"WE MUST REMOVE any doubt
tighten credit
Daily Photo by DAVID HARRIS
STATE REP. PERRY BULLARD (D-Ann Arbor) speaks to spectators about the draft in a Diag rally yesterday
afternoon. Bullard's speech was one of many given during the day-long teach-in.
U.S.S.R., registration key
Sics o peace teac -1n
Hundreds of students and faculty members took time
out from the regular routine of classes yesterday to
participate in the first day of a three-day-long, campus-wide
* teach-inon peace and politics in the 1980's.
Numerous activities and lectures, sponsored by an
assemblage of campus organizations called the Coalition
Against War, were held throughout the day and lasted late
,into the night.
The event is aimed at raising campus-wide inquiry into
the implications of recent events in Iran and Afghanistan,
U.S. foreign policy, and the current status of U.S.-Soviet
relations, according to spokepersons for the coalition.
AT NOON A CROWD of more than 250 persons turned out
on the Diag to express their sentiments either against or, for
a minority of those attending, in favor of proposed draft
registration. Many of those present said they were
participating in the one-day class boycottcalled for by the
anti-war coalition.
"One of my teachers cancelled class today because she
felt that learning about war was more important than
learning about Shakespeare, at least for the day," said LSA
junior Rob MacKenzie.
"I think everyone should learn," said LSA freshwoman
Caroline Goodman of the teach-in, "so they don't make
ignorant decisions."
Jim Bristol, a conscientious objector jailed during WWII,
told the crowd that it was "phony to insist that it will be
registration only" and said that there has "never been
registration in this country without the draft."
HE ADDED THAT "some things are not worth dying for,
like the Pax Americana and oil, and draft registration is a
giant step in that direction."
Members of the Collegiate Association for the Research of
Principles, an organization affiliated with the Unification
Church that supports draft registration, were the targets of
cat-calls and a few snowballs. One observer was prompted to
comment that the actions aimed against the pro-draft group
were "ironic, seeing that they are coming from so-called
passive resisters."
Howard Simon, president of the Michigan chapter of the
American Civil Liberties Union (ACLU), told a small group
in the Kuenzel Room of the Union early in the day that
President Carter's call for draft registration was "the most
dastardly and deceitful act committed"
See PEACE, Page 2
From AP and UPI
WASHINGTON - The Federal
Reserve Board moved yesterday to
discourage bank lending by setting, for
the first time in-history, a surcharge on
its key interest rate.
The board also announced a series of
measures intended to make less credit
available to consumers and businesses
as part of the Carter administration's
new anti-inflation attack.
THE ACTION by the Federal
Reserve on its key interest rate will, in
essence, create a two-tier discount rate.
The discount rate is the interest
commercial banks pay on loans from
Federal Reserve banks.
The basic rate will remain at the 13
per cent effective since Feb. 15.
But the nation's 270 largest banks will
have to pay a penalty, or surcharge, of 3
additional percentage points if they
borrow from the Federal Reserve
"more than one week in a row or more
than four weeks in any calendar
quarter."
Theaction, which effects only those
Federal Reserve member banks with
deposits of $500 million or more, could
result in some banks paying as much as
16 per cent on money borrowed from
the Federal Reserve.
T HIS WOULD FORCE them to
increasethe rate they charge when
lending the money to their business
customers, thus reducing demand for
loans.
The prime rate-the interest banks
charge their most credit-worthy
business customers-rose to a record-
shattering 18.5 per cent at many major
banks yesterday before the Federal
Reserve's announcement. Several
market analysts predicted it could rise
further next week after the central
bank acted.
Citibank. the nation's second largest
bank, raised its prime rate-the rate
charged for loans to top corporate
customers-to 18.5, per cent,
leapfrogging an increase to 18.25 per
cent by the Chase ManhattanBank on
Thursday.
Several of the Federal Reserve
actions were taken under the Credit
Control Act of 1969, which gives the
president authority to declare that
controls are needed because of
inflationary problems. It was only the
fourth time in the nation's history that
such credit controls were invoked.
In order to tighten credit, the Federal
Reserve took a number of actions
requiring banks to keep greater
reserves of cash on hand.
Tightening credit has an indirect
effect on inflation. As loan money gets
scarce and. expensive, people and
businesses slow down their borrowing.
And they cut down on spending. This
helps depress the economy as a whole
and, hopefully, prices do not go up as
much.
about this nation's will to take the
painful steps needed to control
inflation," Carter said. However, he
said his program will not bring "a quick
victory" and warned that inflation is
likely to remain high for several
months.
Government officials said the new
package would have no immediate
impact on inflation.
Consumer price increases would
remain high for the next few months, at
least, the officials said.
Carter proposed cuts of $13 billion to
$14 billion in 1981 spending. Revenues
would total between $624 billion and
$625 billion.
Instead of the $15.8 billion deficit
proposed originally, the new. budget
will show a surplus of between $10
billion and $12 billion, administration
officials said.
The federal government has not had a
budget surplus of that amount since
1948, when there was a surplus of
revenue over spending of $12 billion.
The nation has not had a balanced
budget since 1969.
CARTER SAID THERE will be
reductions in spending virtually across
the board, including at least temporary
elimination of revenue-sharing for the
states, which alone will save $1.7
billion.F
Carter also announced a temporary.
scrapping of his 'welfare reform'
proposals, which will save $859 million,'
and cuts in jobs programs, urban
programs and airport and highway
construction funds.
The president also plans to cut $265.
million in mass transit capital grants,
$212 million for a new Economic
Development Administration financing
program, and $76 million for a solar and
conservation bank.
The president left defense spending
virtually untouched, although he said
some efficiences may be possible.
IN HIS ADDRESS to, congressional
See CARTER, Page 8
Polish airliner crashes, kills all 87 aboard;
passengers included 14 U.S. amateur boxers
From AP and UPI
WARSAW, Poland-A Polish airliner
carrying a team of 14. young American
amateur boxers to fights in Poland
crashed into an old military fort near
Warsaw's airport yesterday, killing all
S7 persons aboard.
It was the worst foreign air crash
involving American athletes.
The LOT Ilyushin 62 jet, on a
scheduled 3,700-mile flight from New
York, was attempting to make an
emergency landing on a foam-covered
runaway at Warsaw's domestic airport
after reporting trouble in one of its four
engines.
IT FELL TWO miles
hort-plummeting into the sprawling
grounds of a century-old fortress
surrounded by 25-foot-high earthen
walls at 5 a.m. Detroit time and
exploding on impact.
Dead were a crew of 10 and 77
passengers, including 14 fighters with
the U.S. amateur boxing team-most of
them teenagers-and eight persons
accompanying them to two Poiish
matches, the official news agency PAP
said.
The airline's New York office said the
others aboard included six more
Americans, 42 Polish passengers and 10
Polish crew members, four Russians
and three Germans.
Among the team members reportedly
aboard were two of the country's top
amateur fighters, Lemuel Samuels of
St. Louis and Andre McCoy of New
Bedford, Mass., and Tom "Sarge"
Johnson of Indianapolis, coach of the
AAU's national team and former
trainer of the 1976 American Olympic
team, which won five gold medals.
Witnesses reported hearing an
explosion just before the plane hit and
came to rest within the fort-now used
as a rifle range and army storage
depot-and soldiers rushed to help. But
"nobody survived," said a policeman who
turned away reporters. "It's a terrible
mess."
Bo: Suspension period indefinite
By ALAN FANGER
The five Michigan football players
whose alleged involvement with
narcotics was in violation of a team
training rule have not been
permanently dismissed from the team,
head coach Bo Schembechler said
yesterday.
In his -second statement concerning
the suspensions, Schembechler had the
following to say:
"It has always been my policy to
have disciplinary actions in our football
program be strictly private team
matters.
"HOWEVER, BECAUSE of the
ridiculous rumors, accusations, and
speculations concerning my most
recent actions, I am making the
following statement:
"The suspensions invoked this past
week are for violations of team rules.
The players were not suspended for any
criminal acts. Their suspensions are for
an indefinite period."
Assistant Sports Information
Director Bruce Madej said the
statement was the last Schembechler
would make in conjunction with the
suspensions.
Speaking for Schembechler, Sports
Information Director Will Perry said
the Wolverine coach "could review
those suspensions any time he wanted.
And I think you could read into that
statement that they could play at some
See SCHEMBECHLER, Page 7
- Doily Photo by JOHN HAGEN
Kneeling bus
This hydraulic-lift bus, designed to accommodate handicapped riders, is
one of the four new buses introduced by the Ann Arbor Transportation
Authority. See story, page 3.
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every individual would send in information on cards," he
said, "but now it is being taken directly from data tapes of
University personnel records. We went to an outside
typesetter in Dayton, Ohio and he had problems in the
conversion." Gifford said despite the delay, the switch from
soliciting individual listing information to taking it directly
from University computer tapes will have the additional
benefit of providing over 2,000 listings that were previously
unavailable using the old system. Q
UFO update
Two private UFO investigators yesterday verified the
sighting of an unidentified flying object north of Gladstone,
police officers from three different agencies which made
the report very valid," said Mazola, a full-time New York
undercover police officer. The six Michigan police
officers-two each from the Gladstone and Escanaba
departments and two from the Delta County Sheriff's
Department-described the UFO as having flashing red
and green lights and a bright solid white light.
Buzzard day
Every March 15, along with the Ides of March, comes the
Return of the Buzzards. No, it's not a movie, or a plane, but
rather a flock of ugly, smelly buzzards. The birds, who
Hinckley residents say the buzzards, who eat dead animals,
are ugly, bad smelling, and vermin infested. But Buzzard,
Day attenders make the yearly pilgrimage donned with
buzzard T-shirts, buzzard mating horns, and maps to
buzzard roosts. However, there is no mention of buzzard
hats to protect the heads of onlookers as the buzzards fly
over Hinckley. ri
on the inside
Sports has an analysis of Thursday's Basketball loss
to Virginia . . . The 16mm Film Festival in the Arts
section. . . And a look at President Carter's recent U.N.
blunder on the editorial page. H
Faculty directories available soon
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