The Michigan Daily
Vol. XC. No. 8-S
Ann Arbor, Michigan-Saturday, May 17, 1980
Ten Cents
Sixteen Pages
U.S. allies
back off on
Iranian
sanctions
Stone on campus
Noted journalist I. F. Stone speaks last night in the Union Ballroom on the
need for military restraint on the part of the world's super-powers. See story,
Page 14.
Experts predict still
worse nat'
WASHINGTON (AP)-Downhill
r plunges in factory production and
housing construction reported yester-
day suggest that economic conditions
around the nation-including unem-
ployment-will get much worse before
they get better, economic experts say.
Industrial production last month
slumped 1.9 per cent as recessionary
weakness continued to spread from the
already hard-hit automobile and con-
struction industries to other manufac-
turers.
THE DROP WAS the largest since a
2.2 per cent decline in Febraury 1975,
during the last recession; and followed
dips of 0.7 per cent in March and 0.2 per
cent in February.
Meanwhile, Commerce Department
reported that housing starts fell 2.1 per
cent in April to an annual rate of
1,019,000 units.
It was the seventh consecutive month
of decline, though considerably more
moderate than March's 22 per cent
drop, and left home construction 42 per
cent below its April 1979 pace.
BUILDING PERMITS issued, an in-
dicator of future housing activity, fell a
precipitous 14 per cent to an annual
800,000 units after dropping 18 per cent
in March.
Both construction and permit figures
were the lowest since the spring of 1975,
during the last recession.
An annual-rate figure shows how
many homes would be built in a year if
the construction pattern of a single
month were continued for 11 more mon-
ths.
From AP and UPI
Three key Western foreign ministers
have told Secretary of State Edmund
Muskie the European Common Market
will not impose full economic sanctions
against Iran this weekend, it was lear-
ned last night.
Muskie got the news at breakfast in
Vienna with the ministers, Jean Fran-
cois-Poncet of France, Hans Dietrich
Iranian Foreign Minister Sadegh
Ghotbzadeh said yesterday
economic sanctions against Iran will
do nothing to help free the 53
American hostages.
See story, Page 6.
Genscher of West Germany, and
Britain's Lord Carrington.
THEY DID NOT inform Muskie
precisely how the Common Market will
water down the sanctions they decided
last month to impose against Iran in a
joint effort with the United States to try
to gain the release of American
hostages held since Nov. 4. -
The ministers told Muskie they are
economy
THE CONSTRUCTION drop was not
as bad as home builders had predicted.
Merrill Butler, president of the
National Association of Home Builders,
speculated earlier in the day that home
construction starts in April might have
dropped to a record low of 800,000.
Michael Sumichrast, chief economist
for the home builders, said he did not
See EXPERTS, Page11
not convinced putting off trade will help
gain release of the hostages.
Meanwhile, Muskie also lectured An-
drei Gromyko publicly on the Afghan
occupation yesterday in Vienna, then
held a three-hour inconclusive meeting
with the Soviet foreign minister.
AFTER THEIR private meeting,
with only translators present, the
American secretary of state said he
hoped for further talks and a
"resolution of the differences that
exist." He termed the session "serious"
and said he and Gromyko discussed a
"number of practical problems."
Muskie said he would report to
President Carter before commenting
further.
Last April 22, the market ministers
promised to impose strong economic
sanctions against Iran if, by today, it
showed no signs of being willing to free
the hostages.
THE EUROPEAN governments
pledged themselves to enact sanctions
outlined in a U.N. Security Council
resolution vetoed by the Soviet Union
last January unless "decisive progress
leading to the release of the hostages"
had been made.
At least some current lucrative con-
tracts are likely to be exempted when
the Europeans meet in Naples, Italy,
beginning today to review their April
22nd decision.
The Europeans are known to be
reluctant about losing big business
deals. Italy, for instance, has $3 billion
worth of construction contracts em-
ploying some 2,000 Italian workers, and
Britain does $70 million worth of
business in Iran monthly.
MUSKIE WAS TOLD the Common
Market will support the United States
at least to the extent of barring new
trade with Iran except for food and
medicine. He will try to persuade Car-
ter to accept this asa victory of sorts.
At the top of Muskie's agenda for the
Gromyko meeting-the first high-level
super power talks in eight months-was
a proposal by Afghanistan to negotiate
a settlement of the Soviet intervention.
Muskie dismissed the proposal, but ap-
peared intrigued by the fact that the
pro-Soviet government of Afghanistan
See ALLIES, Page8
New Archives chief
University historian Robert Wagner, currently director of the Bentley
Historical Library, was appointed head of the U.S. National Archives and
Record Service yesterday. See story, Page 3.