Pa£e 2
THE BATTALION
Friday, Novemb'er 9,1951
College Investments Not Risky
By TOM ROUNTREE
Battalion Editorialist
In a letter to the editor appearing in the Houston Post
of Oct. 31, certain objections were raised to the proposed
constitutional amendments which will be voted upon Nov. 13.
The main objections to the amendment which would
change the method used to invest the funds of the Perman
ent University Fund were:
“The fact that the spending and taxing power of the
Federal government may be exercised in a manner that will
reduce both the value of the stocks and the income from
them.” Another objection is “the value of stocks will go
down during a deflation and by taking chances in the stock
market more can be lost to this fund in value in a day than
the increase in income from stocks as compared with the
income from bonds would amount to in years.”
The first objection or danger cited is a two-edged possi
bility as although the government may increase their taxes,
bonds, with the exception of certain municipal bonds are
not exempt from Federal Income taxes. With this in mind,
when the question of stocks being taxed is raised, it must re
member that bonds are also susceptible to taxation.
When a person “speculates” on the stock market there
can be no question that there is an ever present danger of
stock losses within one day. The reason for this is that a
speculator, for the most part, is concerned primarily with
the stock appreciating. In along range investment program,
the object is to receive the largest dividend possible that is
comensurate with safety and you are not primarily con-
Eisenhower Gains
Truman’s Support
Nov. 8 — The New York
Times said today that President
Truman offered to support Gen.
Dwight D. Eisenhower as a pres
idential candidate next year when
the two conferred in Washington
this week.
The General did not accept the
offer, the Times said, nor did he
“specifically reject it.”
Arthur Krock, the Washington
correspondent of the Times, re
ported that the offer “necessarily
concerned only the Democratic
nomination.”
Similar Offer
The offer, Krock said, repeated
“H similar offer with respect to
1948” which Mr. Truman made to
Eisenhower at the Potsdam con
ference in 1945.
The published account was denied
early today by the White House.
Asked for comment, presidential
press secretary Joseph Short said
the dispatch “is not true” Short dc
dined to elaborate.
There was no immediate com
ment from Eisenhower.
Krock’s story said Eisenhower
“strongly implied” rejection of the
offer “by suggesting that great
. difficulties were presented by his
„ fundamental disagreement with
the administration on labor politics.
Proposed amendments to the Taft-
Hartley act and other policies and
programs in the domestic field
that have been sponsored by Mr.
Truman.
Taking into account several pos
sible developments in both parties,
Krock said that eventually Eisen-
Lower “might just possibly be ab
le to make a platform accommo
dation with the Democrats.”
Krock wrote that he was assured
yesterday by a person whom he be
lieves to be “thoroughly reliable
and informed” that “such was the
exchange between the two . . .
that the matter was left in status.”
Krock mentioned the possibili
ties that Eisenhower might be the
Republican candidate for president,
or might support Sen. Robert A.
Taft of Ohio for the nomination.
Truman Sponsorship
The story said sponsorship by
President Truman would be cer
tain to win Eisenhower the Demo
cratic nomination if he would ac
cept.
The story ynight be followed by
“categorical 'and even angry de
nials,” Ki’ock said. He reported
that he tried without success to
submit the account to Mr. Truman
and ask for comment.
Krock said Eisenhower — now
back in Europe—does not know
whether President Truman will be
the Democratic candidate next year
if the General is not, “or whether
the prior nomination of Gen. Eis
enhower by the Republican con
vention would influence Mr. Tru
mans decision or how.”
“And the President does not
know,” the story added, “what the
General’s ultimate decision will be.
He knows only, as a result of the
conversation, that some of his ma
jor acts and policies—which the
Democratic convention traditional
ly would be expected to endorse—
are opposed by Gen. Eisenhower'.”
Democrat?
Krock said that if Eisenhower
could not agree with the Democrat
ic platform it would be “most
unlikely” that he would be offered
the nomination or could accept it.
The story mentioned the possi
bility that Eisenhower might “an
nounce himself a Republican” be
fore the GOP National Convention,
and become that party’s nominee
Krock reported, however, that
some of Eisenhower’s intimates say
he “intends to try in advance of
the Republican convention to dis
cover whether he and Sen. Robert
A. Taft of Ohio can agree on cer
tain policies for platform endorse
ment, and on eliminating the in
fluence of both reactionaries and
left-wingers in the party.”
If the two men can agree, Eis
enhower will support Taft as the
nominee, Krock said. “If this
agreement cannot be made,” the
story added, the General “does not
yet know whether he would become
Mr. Taft’s rival candidate, or de
cline to support the Republicans.”
Should the General make this
attempt, and it fails, he might just
possibly be able to make a plat
form accommodation with the Dem
ocrats. And there is plenty of
time,” Krock wrote.
cerned with the short term appreciation or depreciation of
the stocks.
The investment program of the Board of Regents of
the University of Texas is definitely a long range program
and is not concerned with short term speculation.
The letter to the Post advances the idea that in one day
as much could be lost with bonds as could be made with
stocks as compared with the income from bonds would
amount to in years. If it is true that that much could be
lost in a single day, and it is highly improbable with present
day security control both by the government and the ex
changes, if that amount could be lost in a day then it is
also possible to realize a profit that would be more than the
income which could be realized from bonds in years.
However, the thing to remember is that if such a loss
or profit occurred it would only be a paper loss as the pur
chase of stocks would be an investment and not a speculation.
Again the differentation is not only in the degree of risk in
volved but in the period of time involved. For the loss or
profit to be anything but a paper loss or profit in the long
run it would be necessary for the issuing companies to be
come almost non-existent. Even during the so called Great
Depression the major companies didn’t disappear. The peo
ple who held stocks in such firms as RCA, General Electric,
General Motors and some of the others, would realize a rath
er large appreciation if they decided to sell their stocks today.
Of course there is some element of risk in the pro
posed plan but, it is of paramount importance to remember
that there is an element of risk involved in any investment
regardless of whether it is in bonds, stocks, or what have
you. The risk involved is minimized as the only stocks that
would be eligible for purchase would be those which have
paid dividends for ten consecutive years and are listed upon
an exchange which is registered with the Securities and
Exchange Commission.
This proposed amendment will allow A&M and the
University of Texas to realize a much greater return on
their investment in a manner that is almost identical to a
system that has been used with a high degree of success for
years by such colleges and universities as Harvard, Yale,
Princeton, Cornell, California, and MIT just to mention a few.
The success of the plan has been shown by the fact
that colleges and universities that use the plan have real
ized returns of 4 to 6 per cent on their endowment funds.
It is the duty of every citizen of Texas to go to the polls
Nov. 13 and show the other people of the country that Texas
is not only the largest state in the Union but one of the more
progressive.
US, Russia
In Circles:
Running Around
Will It Ever End?
By JAMES MARLOW
Washington, Nov. 9—(A 1 )—This
is where we came in, not once but
many times.
The United States denounces
Russia in the United Nations; Rus
sia denounces the U. S. in the same
place.
The U. S. offers a peace plan
which the Russians spit on; the
Russians offer a peace plan which
we spurn.
And it’s while both sides are
talking peace, suggesting how it
can be brought about, that they
denounce each other hardest.
And the net result is more bitter
ness between the two than there
was before, if that’s possible.
Which seems to add up to
this: peace is no nearer than
it was more than a year ago
when the Korean war started;
and the arms race continues.
All this happens in the United
Nations where the nations are sup
posed to work together but where
the U. S. and Russia work against
each other.
When Secretary of State Ache-
son made his pitch for peace in
the U. N. in Paris yesterday he
at the same time took the skin off
the Russians and their foreign min
ister, Andrei Yishinsky.
Yishinsky in turn heaped scorn
on the U. S., telling the delegates
that during the night he almost
died laughing when he) thought of
the American peace proposal.
This makes a pretty spectacle
for the people of the world who in
the end, if there is a war, will
have to do the dying.
In the space of a, piece like this
there’s no room to examine in de
tail the plans offered by either
side.
But one point in the American
plan — mentioned by President
Truman in his nationwide broad
cast Tuesday night—can illus
trate how tough it would be to
work out a peace plan and how
long it would take.
After the armaments of all the
nations were known, through the
investigations of U. N. inspection
teams, and after the nations agreed
their
Mr.
NATO To Change
European Defense
The Battalion
Lawrence Sullivan Ross, Founder of Aggie Traditions
"Soldier, Statesman, Knightly Gentleman”
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nnder the Act of Con
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JOHN WHITMORE Editor
Joel Austin Managing Editor
Bill Streich News Editor
Allen Pengelly Assistant News Editor
Bob Selleck Sports News Editor
Pat Morley Women’s Editor
T. H. Baker, E. R. Briggs, A1 Bruton, Norman Campbell,
Mickey Cannon, Monte Curry, Dan Dawson, Bob Fagley,
Benny Holub, Howard Hough, Jon Kinslow, Bryan Spencer,
Ide Trotter, John Robards, Carol Vance, Edgar Watkins,
Berthold Weller, Jerry Wizig, Raymond York News and Feature Writers
Bob Cullen, Jack Brandt Cartoonists
Frank Scott Quarterback Club Director
Jim Jenson Photographer
Pat LeBlanc, Hugli Phillips, F. T. Scott, Chuck Neighbors,
Gus Becker, Joe Blanchette, Ed Holder Sports News Writers
John Lancaster Chief Photo Engraver
y** 6 ® 8 Advertising Manager
Sobert Haynie,Advertising Representative
Washington, Nov. 9 — (A 3 ) — Ad
ministration officials said today the
North Atlantic Treaty Organiza
tion (NATO) most likely will be
called on to scale down its West
ern European defense plan along
lines recommended here this week
by Gen. Dwight D. Eisenhow'er.
Because of the financial difficul
ties of Britain a,nd other Allies,
these officials said, it is almost
certain that a 12-nation “wise men”
group will propose the downward
revision during the NATO Council
meeting opening Nov. 24 at Rome.
The committee headed by Am
bassador W. Averell Harriman is
due to submit its interim report at
this session. Named at the Ottawa
meeting in September, and there
given the “wise men’ delegation, it
is making a country by country
survey of the ability of the NATO
allies to bear the arms burden im-
Flights of Future
May Seem Strange
San Antonio, Nov. 9—(A 5 )—You
may wear heavy clothes to keep
cool in the rocket planes of the
future. And you will need a
breeze in the cabin in order to
light your cigarette.
These are unexpected results of
flying where, because of your
speed, there is no gravitation.
They were described toy Dr. K.
Buettner of the Aviation School of
Medicine to the airforefe symposium
here on physics and medicine of
the upper atmosphere.
American rocket planes already
fly so high that in their maneuvers
the pilots at times have no weight.
Ships of the future are expected
to fly that way for long periods.
Not only the pilot but the air
inside the pressurized cabin will
lose all weight. Dr. Buettner said
that when air has no weight, it
will no longer circulate, unless
driven by fans. If the fans stop
there will be no air movement to
cool your skin.
Furthermore the sun’s direct
rays are so hot on the ship that
if the air circulation inside breaks
down, the air may get dangerous
ly hot. In that case, Dr. Buettner
said, heavy clothing may be the
best protection. He has made lab
oratory experiments with heat that
a person can just barely stand.
Heavy clothes lengthen that period.
The point in such a circulation
accident in a rocket ship is to
stay conscious long enough to re
pair the air system.
Another risk would be suffoca
tion. The weightless air you
breathe would not move far enough
away from your face to keep you
from breathing it over and over.
posed by the 1950 “middle term”
master plan.
Go By ’54
This calls for a defense force
of more than 90 divisions by mid-
1954, which with air and naval
backing was deemed sufficient by
military planners to cope with a
full scale invasion of Western Eu
rope. The prospective downward
revision means on its face fewer
divisions by the target date, but,
under General Eisenhower’s rec
ommendations, a force ready for
action in the meantime.
In the light of inflationary
troubles of France, Italy, and
neighbor nations, and Prime Min
ister Winston Churchill’s warning
that Britain faces the threat of
national bankruptcy, American au
thorities are convinced a realistic
shakedown is inescapable. Involv
ed in this is the proposal pressed
by Eisenhower for a speedup of
arms deliveries aimed at assuring
an integrated fighting force-in-be
ing of up to 30 divisions some time
next year.
All the original and revised plan
ning reportedly is based on the
expectation that West Germany
soon will be able and willing to
start making a contribution.
Officials who have a direct role
in top level arms planning indi
cated to a reporter that there is
less worry in the administration
over the risk of trimming the long
range defense program than over
the current economic troubles of
the NATO allies.
The recent effect of the arms
buildup on Western European econ
omies is viewed as the threat of a
genuine new crisis. Extent of the
buildup was indicated by a State
Department prediction yesterday
that the rate of military production
in Europe next year will be double
what it was at the time of the at
tack on Korea.
British Buyers
Discount Tray'
Main Block
Washington, Nov. 9—(/P)—
The dispute over what dis
count might be offered Brit
ish buyers of Iranian oil was
reported today as one of the
main stumbling blocks to possible
settlement of the Anglo-Iranian
oil controversy.
Reliable informants said Iran has
offered to sell Britain up to 70 per
cent of its oil production at a price
about 15 peg cent below the world
market level.
Britain was reported holding out
for a discount of around 40 to 50
per cent before it consents to rec
ognize Dan’s decision to national
ize the billion dollar Anglo-Iranian
Oil Company.
The state department is contin
uing intensive efforts to persuade
both sides to compromise their dif
ferences so they can work out a
long-range purchasing and selling
arrangement.
Prime Minister Mohammed Mos
sadegh of Iran, who has been
conferring here with American
mediators for the past two weeks,
is reported anxious to reach an
understanding with Britain before
he returns to Tehran.
Mossadegh has been criticized by
some pro-government newspapers
at home, and apparently fears pol
itical and economic repercussions
if he returns without definite plans
to unblock the flow of Iranian oil
to the world market.
to cul down "ii
Truman said:
“As the facts are revealed, prog
ress can be made toward working
out by mutual agreement the exact
amounts and kinds of armaments
and armed forces which each coun
try will finally be permitted to
have.
“It might be possible, for exam
ple, to agree that each country
would have armed forces propor
tionate to its population, with a
ceiling beyond which no country
could go. Furthermore, each coun
try might be limited to using no
more than a fixed portion of its
national production ’for military
purposes.”
Russia and its satellites have a
population of about 800,000,000.
The U.S. and the non-Communist
countries of Western Europe
have a population of about 400,-
000,000.
So if nations were permitted
arms according to population, the
Communists would outnumber us
two to one. Congress would hard
ly approve that. You can imagine
now the fight.
And if all the other points in the
U. S. program met Russian ap
proval — inspection and count of
arms and agreement to disarm—
the whole business after months
or years of haggling might break
down on this point of arms accord
ing to population.
But Mr. Truman suggested a
country might be limited in its
arms in accordance with its pro
duction ability. If that were the
formula, the Chinese, who have no
production, would have no arms.
They’d hardly go along on that,
particularly since we lead in pro
duction.
No, peace isn’t simple. And the
solution won’t come tomorrow.
Congressman Will
Speak Here Nov. 23
Cong. W. R. Poage of Waco, will
address the Fifth Annual Training
and Safety Conference for the
Rural Electric Cooperatives of
Texas, here Nov. 23-24.
The address will be given at a
banquet session of the conference
Nov. 23 at 7 p. m.
Top-flight men in the electric
cooperative field will attend and
take part in the conference, spon
sored by the Texas Engineering
Extension Service in cooperation
with the Texas Rural Electric
Cooperatives, and the Texas Edu- .
cational Agency, Vocational Divi- <
sion.
—
“M UMS”
THE WORD FOR
FOOTBALL
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Allied Warplanes
Bag Three MIGs
U.S. Eighth Army Headquarters,
Korea, Nov. 9—(A*)—Allied war
planes sent three Communist jets
crashing to the ground in flames
today, U. S. Fifth Air Force re
ported.
Two other Russian-made MIG-
15s were damaged. The air force
said all Allied planes returned safe
ly to base.
Two aerial duels were fought
over northwest Korea, with 52
American jets pitted against about
50 Communist planes. It was one
of the few times the two sides have
met on near-even terms.
On the ground, Chinese forces
threw a series of small attacks be
fore daylight at Allied positions
near Yonchon and Kumsong.
By A1 Capp
SO SHES TH'ONE WHICH
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