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JAPANESE TREATY
See Page 2
r CLOUDY AND COOLER
Latest Deadline in the State
VOL. LXI, No. 2-S ANN ARBOR, MICHIGAN, THURSDAY, JUNE 28, 1951
FOUR PAGES
Senators Rebuke
Control Program
Administration Roll Back Powers
Over Live Beef Prices Limited
r WASHINGTON-(P)-The Sen-
ate dealt a body blow to President
Truman's price control program
last night and powerful Senators
threatened to filibuster if the Ad-
ministration attempts to prolong
the existing economic controls
beyond their expiration date, Sat-
urday night.
In a night session, the Senate
refused, 61 to 26, to strike from
Law School
Tax Institute
Talks To End
The Law School's summer in-
stitute on the "Taxation of Bus-
iness Enterprise" entered its final
two sessions today after a full
day of activities yesterday cli-
maxed by an evening banquet dis-
cussion of tax policies to meet
the current fiscal emergency.
Scheduled for today were a for-
um on the role of taxation in the
organization of business enter-
prises at 9 a.m. and a discussion
of the effect of taxation on com-
pensation plans at 2 p.m. Both
meetings were to be held in Rm.
100, Hutchins Hall.
* * *
AT LAST NIGHT'S banquet ses-
sion, two tax experts tangled over
the methods to be used in meet-
ing the problem of rising infia.
tion, a question which both agreed
was the greatest current danger
facing the U.S.
Harley L. Lutz, professor
emeritus of Prfinceton Univer-
sity and a tax consultant to the
National Association of Man-
ufacturers (NAM), tore into
"sawdust Caesars" who are is-
suing "ineffective, unintelligible
unenforceable control regula-
tions," while advocating the
NAM's program of broad con-
sumption taxes to finance a
pay-as-you-go mobilization pro-
Randolph E. Paul, New York
lawyer and former tax consultant
to the Roosevelt administration,
called for a national economic
controls program which would in-
clude credit measures, allocation
of materials, wage and price con-
trols and even rationing, if nec-
essary, along with a new federal
consumer tax plan, as a means
of "safeguarding our cold war
victories abroad."
BOTH SPEAKERS agreed that
present major sources of federal
revenue (corporate profits tax,
individual income tax, present fed-
eral excise taxes) have about
e ' reached the point of maximum ex-
ploitation.
Lutz wanted to secure the funds
necessary to balance the budget
through a federal consumption
tax which would replace the pres-
ent "discriminatory" system of
federal excises,
He outlined the NAM-support-
ed consumption tax which would
fall on manufactured goods, thus
excluding foods, rents and other
sources. This tax would get at
the major source of presently-
untaxed income - the lower
bracket groups-and would act
to "halt inflation rather than
control it" as the Administra-
tion is trying to do, he said.
Paul argued that taxation has
become less a matter of securing
revenue than of combating infla-
tion. He favored a federal retail
consumer tax as a means of clos-
ing the gap between disposable
income, or the amount of money
people and business have to spend,
its pending controls measure a
provision sharply limiting the Ad-
Sministration's power to roll back
the price of live beef and other
commodities. Thus the chamber
ratified a provision declaring that
the prices must not be reduced
below the level prevailing in the
period Jan. 25 to Feb. 24, 1951.
THE SENATE took its action
in working on a controls bill of
its own to replace the one expiring
Saturday.
But on the House side, leader
made a bipartisan agreement to
extend the existing Defense Pro-
duction Act, under which price-
wage and other controls are
applied, through July as a stop-
gap.
House leaders said they couldn't
get a more permanent bill through
by Saturday. But a stop-gap
would require Senate approval.
And Chairman Maybank (D-S.C.)
of the Senate Banking Committee
served notice on the Senate floor
that "several of us intend to talk
and talk and talk" if any move
develops to push through a stop-
gap.
* * *
SENATOR Douglas (D-Ill.) said
those who oppose a simple reso-
lution extending the present law
30 days were trying to prevent a
manufactu'er's rollback which is
scheduled to go into effect July 2.
What the House leaders would
say to that was not yet evident.
The whole future of the con-
trols program thus was up in
the air. But the Senate intends
to resume work on its own bill
tomorrow and perhaps pass it
in the afternoon.
In the last action of last night's
session, the Senate voted 47 to 33
to approve a proposal by Senator
Butler (R-Neb.) to prevent any
future quotas on livestock slaugh-
tering.
Senator Douglas led the fight to
remove the anti-rollback provision
from the Senate bill. It was con-
sidered a key test of the willing-
ness of the Senate to go along
with Truman on a program of
sterner controls.
Republicans joined Democrats
in the House in supporting a reso-
lution by Chairman Spence (D-
Ky.) of the House Banking Com-
mittee to extend the present con-
trols for 31 days. It is expected to
meet with little opposition when
it comes up in the house tomor-
row.
Senator McFarland of Arizona,
the Democratic floor leader, said
he hoped for a final vote on the
Senate's version of a new controls
bill not later than this afternoon.
Author of the limitation on roll-
backs was Senator Maybank (D-
S.C.).
An attempt by Senator Moody
(D-Mich.) to suspend for 60 days
or until Sept. 1 the effect of the
anti-rollback limitations was de-
feated.
Staid Sabbath
For 985_Seen
BETHLEHEM, N.H. -(P)- The
985 residents of this White Moun-
tain resort town had better be-
have on Sunday or they'll land in
the stocks for breaking an old
blue law.
The town fathers are invoking
the antiquated law for two hours
Sunday afternoon-1 p.m. to 3
p.m.-to remind folk "how much
British Set
To Evacuate
Oil Fields
Iranian Cabinet
HoldsMeeting
TEHRAN, Iran-(P)-The Brit-
ish-owned Anglo-Iranian Oil Com-
pany shut off the pumps in the
Aghajari oil field and started call-
ing the 700 British technicians on
its field staff to the refinery port
of Abadan yesterday for the zero
hour of "operation exodus."
That hour may strike today.
PREMIER MOHAMMED called
a cabinet meeting last night. His
government is checking the possi-
bility of getting other foreign help
in the event the British decline
to continue as employes of the
Iranian National Oil Company, a
government agency Mossadegh has
designated as successor to the
AIOC.
A dispatch from Rome said a
high official of Italy's state
oil monopoly, Count Ettore Car-
affa D'Andria, is visiting Iran
with the approval of the Italian
government. Informed sources
were quoted.
The informants said wiossa-
degh's government wanted to
know about the legal and financial
organization of the Italian com-
pany, known as "Agip," and its re-
lations with foreign oil companies.
* * *
SOME OFFICIALS of the bil-
lion-dollar AIOC expect word from
London in the next 24 hours-un-
less there is an unforeseen break
in the oil nationalization dispute-
to abandon its holdings in this
sun-baked hotspot and go ahead
with the evacuation of the British
staff.
Authorities here say the op-
eration, planned days ago, could
take out all the remaining 2,00
British employees of the AOC
within 72 hours. All have packed
up. The last plane loads of
wives and children of the tech-
nicians left Iran this morning.
In London, Prime Minister At-
tlee, Conservative leader Winston
Churchill and their principal aides
discussed the crisis at a secret
meeting. Churchill proposed in
the House of Commons that such
a session be held on the grounds
there are "some points which, at
this juncture, are better dealt with
in private."
Secretary of State Acheson ap-
pealed urgently to Iran to recon-
sider her stand. He urged con-
tinued production and shipment of
oil.
Call Luciano
'King Pin 'in
Dope Trade
WASHINGTON-()-A Federal
agent yesterday called Charles
"Lucky" Luciano "the king pin"
in a dope trade which investigat-
ing Senators said is ruled by the
threat of death.
The deported vice czar, des-
cribed as running his sinister
kingdom from Italy through gun-
man agents, took top billing in
a televised hearing before the
Senate CrimeeCommittee.
Testimony about Luciano came
from Charles Siragusa, Federal
Narcotics agent.
x
i
yI
I
I
N
I
a
Iece
Talks
rogressrng
Russia Clarifies
Peace Proposals
WASHINGTON-()-Russia is reported to have told the United
States yesterday that moves toward a truce in Korea should take the
form of military negotiations between the North Korean and United
Nations field commanders.
Russia's reported suggestion thus would leave the Chinese Com-
munists out of any impending cease-fire talks, apparently except aa
advisers to the North Koreans.
RED CHINA has contended all along that Chinese Communist4
troops fighting in Korea are simply "volunteers" although they are
* * *
Allies Stall
Unexpected
Red Thrust
TOKYO-(P)-The Communists
made strong probing attacks yes-
terday on the central Korea front.
They were hurled back but Al-
lied patrols stabbing at suspected
Red buildup areas were showered
with mortar and automatic weap-
on fire.
* * *
FIGHTING was bitter. It came
as the Russians reportedly sug-
MAIDEN VOYAGE-A-The S.S. Constitution, newest passenger liner in the United States merchant
fleet, plows its way up New York Bay on delivery voyage from Boston.
;
MAC WRANGLERS UNITE:
I
World News
/".4 WU"T T 'N'1 if
gested that any truce in the fight-
enators W arn Reds ing be negotiated by the com-
manders of the North Korean and
A g ' United Nations forces.
iy The Associated Press
fsocstd Posssionsan
LONDON - The Western Big Associted sre k sorrespon
>Thre-hae-areedthatGer dent Nate Polowetzky said the
WASHINGTON-(IP - Senators Three have agreed that Ger- Russian move caused mild sur-
who quarreled over the firing of record a message from Lieut. Gen. man suggestions for raising an prise at Eighth Army headquar-
Gen. Douglas MacArthur teamed Leslie R. Groves, wartime director army, navy and air force are ters. The offer, he noted, s
up yesterday to warn Russia that o dh tom bomb proec saying unworkabl because the call f startingly similar to the pro-
"ultimatedetuto"a isan he advised President Roosevelt be- too much too soon, informed dip-poabyGnrlDuasMc
destruction awaits any fore the 1945 Yalta Conference lomats reported yesterday.posal by General Douglas Mac-
aggressor who starts war on the th th b 9 Arthur that he meet with Red
mistaken idea that Americans are ( that the bomb was 99 percent cer- American, British and French field commanders to discuss
badly split, tain to work. officials, they said, decided the steps for ending the Korean
"The issues which might divide Germans asked for more armor, war.
our people are far transcended by Eio. L '- U aiircraft and ships than the Atlan-
the things which unite them," said IlL tic Allies could supply under their Neither General Matthew B.
a statement approved by members present rearmament program. Ridgway, UN Supreme Comman-
of the Senate Armed Services and Prizes Offered 4 * lder, nor Lt. Gen. James A. Van
Foreign Relations Committees. NEW YORK -Newsweek says Fleet, Eighth Army Commander,
Fog R Cm te. * SGo Th s . yfN would comment on the reported
THOSE GROUPS, which made Go1Iv. If Yov. TndSen. Dewey ofNew Russian proposal. A spokesman
1nd~~~~Yr and Sen James H. Duff ofproslAsokma
the long study of Far East policy Pennsylvania have assured each for Ridgway said the Supreme
set off by dismissal of the Pacific Eight awards, one of $75 and other they will back Gen. Dwight Commander would have to con-
commander, directly addressed one of $50 in each of the four D. Eisenhower for the Republi- sult with the joint chiefs of staff
their statement to "the Commun- fields of writing-drama, essay, can Presidential nomination in in Washington.
ist world." fiction, and poetry will be awarded 1952. * * *
The statement, proposed by to winning efforts in the summer * * FIFTH AIR FORCE pilots re-
Chairman Russell (D-Ga.) of Hopwood Contest. LANSING - Secretary of State ported sighting heavy southbound
the Armed Services Committee All regularly enrolled students Fred M. Alger, Jr., yesterday an- vehicular traffic on the main
who presided over the hearings, of the summer session who have nounced he would campaign for roads south of Wonsan and
was adopted by a voice vote in been doing work of passing grade the Republican nomination for Yangdok on the east coast.
a closed session. in all their courses up to the time Governor next year. AP correspondent Jim Becker
Not all of the 26 members of the manuscripts must be handed in * said frontline officers expect a
two committees were present but and who are enrolled in one NEW YORK-David Warfield, Red attack in the western sec-
no suggestion has been raised that course in English composition in 84-year-old actor, died last night for by the second week in July.
there is any dissent. the Department of English or in in his Manhattan apartment.
The group adopted a motion the Department of Journalism are He retired in 1924 after a career Allied patrols met stubborn
emphasizing that the statement eligible to compete. Students who that made him one of Broadway's enemy resistance as they moved
does not amount to a report on have already competed three times greatest stars early in the cen- toward Kumsong, suspected hub
the investigation. There will be in summer contests or who have tury. of another Red buildup on the
another meeting to decide what to already won a major award in a * * * central front. Hundreds of dug-
do about a report, which seems Hopwood contest are not eligible. SAN DIEGO, CALIF. - More ! in Reds beat back UN attempts
certain to be a split one if there The judges will be selected from than 1,400 fighting men, marines to move into the area.
are any formal findings at all. the staff of the University. and navy personnel, all veterans On Wednesday, Allied forces
The statement was adopted at Further information may be ob- of major Korean battles, arrived were held to probing advances of
a meeting in which Senator Hick- tained in the Hopwood Room, An- here yesterday aloard the mili- one to three miles along the ir-
enlooper (R-Iowa) put into the gell Hall. tary transport Sylvester Antolak. regular 100-mile front.
the main force fighting the United
Nations.
It was understood that talks
in Moscow yesterday between
U. S. Ambassador Alan G. Kirk
and Soviet Deputy Foreign Min-
ister Andrie Gromyko produced
the Russian "clarification" sug-
gesting that the military ,om-
manders negotiate cease-fire
terms.
There had been considerable
confusion earlier over the meaning
of a cease-fire proposal tossed out
by Soviet U. N. Delegate Jacob
Malik in a radio speech in New
York last Saturday.
* * *
MALIK HAD SAID that "the
belligerents" should discuss an end
to hostilities, but left it up in they
air as to the exact identity of the
"belligerents."
The confusion centred chiefly
on Red China's official pretense
that she is a non-belligerent.
The Kirk-Gromyko talk in Mos:
cow and another approach to Ma-
lik in New York-both ordered by
Secretary of State Acheson-are
regarded here as the first steps in
what may be fairly prolonged
East-West explanatory discus-
sions.
Meanwhile displomats of 16 Uni-
ted Nations countries fighting in
Korea today formally declared
their readiness to end the war un-
der terms designed to bring about
"genuine and enduring peace" in
Korea.
* * *
THE GROUP, meeting at the
State Department, signified their
approval of truce moves as Secre-
tary of State Acheson sketched the
broad outline of possible steps for
peace at a session with lawmakers
on Capitol Hill.
Acheson called on Red China
to pull back her troops into
Manchuria-as evidence of good
faith against further aggression
-if a cease-fire is arranged in
the Korean War.
The 16 U.N. members declared
in a statement:
"The representatives express
their view that their governments
have always been and still are
ready to take part in action de-
signed to bring about a genuine
and enduring peace in Korea."
* * *
SECRETARY ACHESON told
Congress members that if Red
China agreed to pull back her
armies into Manchuria, such a
step would "possibly involve" a
gradual withdrawal of all foreign
troops, including Americans, from
Korea.
But Acheson warned, in es-
timony before a House Commit-
tee, that any trickery or rekind-
ling of hostilities after United
Nations forces had left the
Korean war zone might well ex-
plode World War III.
"If there was a settlement, and
if it was disturbed again in Korea,
CLEAN-UP DRIVE TO CONTINUE:
New Gifts Boost Phoenix otal over $5,000,000
IN LIVING ROOMS across the _
nation, television viewers could T>m
note that addict witnesses, though The $5,000,000 mark set earlier represent more than 75% of the
voluble about many details of the this June in the Phoenix Project $6,500,000 goal set for the na-
sordid business, kept stubborn si- drive has been bolstered by a tionwide appeal. Close to 27,000
lence as to suppliers and sources. $30.000 gift from the Eli Lilly individual gifts have been con-
They wouldn't even say in public Foundation, Indianapolis. tributed for the research and
it was death they feared but Sen- The combined contribution of development project which will
' ! !
phases of nuclear energy including
its social implications.
More than 400 doctors, en-
gineers, physicists and social
scientists will ultimately be en-
gaged in Phoenix research.
future, according to Lang. How-
ever, campaign offices will re-
main open here to assist in
clean-up solicitations among the
University's 130,000 alumni
throughout the country.