The Kraus plan also includes contributions from parental and spouse income before figuring student need. The Union's official demand opposes any contributions from these sources, but an explanation in the organization's leaflet circulated last week indicated some flexibility on the issue. "Some Union members would accept an aid plan which required contributions from truly wealthy parents: some are opposed in principle to any parental contributions," the statement said. Nonetheless, the statement said all Union members agree the plan as presently formulated over-taxes the parents of lower-and middle-income GSAS students, and it called upon the Administration to demonstrate that significant numbers of truly rich students are enrolled in the School. Because the plan equates the expenses of married and single students without recognizing what the Union calls significant differences, the Union opposes figuring spouse income in any way.

The Union's opposition to the merit-based $1000 differential is based on a slightly different analysis. It does not oppose this type of grant in principle, but argues that in a time when everyone is tightening his financial belt, need comes before merit and all students should be funded up to full need.

The Administration and the Faculty oppose these demands. The Administration argues, in principle, that parents and spouses should shoulder part of the burden of support for graduate students, and bolsters this argument by turning its empty pockets inside out. The financial crisis is the overriding fact facing the entire University, the argument goes, and all groups in the community must reduce their demands accordingly.

Many Faculty members favor merit-based grants. Department chairman, in fact, objected to the Kraus plan because it afforded them little leeway in granting this type of award. They say such grants are necessary to insure that the most capable students decide to come here for graduate work, and explain that if Harvard drops the grants the GSAS will be at a bidding disadvantage with other universities.

This disagreement can be decided on the merits of the two positions, but the argument that Harvard is financially strapped has drawn return fire from the Union.

Does Harvard have the money?

The Union does not deny that the University has financial problems, but argues that they stem more from its investment policy than any real shortage of funds. The Union leaflet called the policy "extraordinarily conservative," and argued that more interest from the mammoth endowment could be diverted to provide for the needs of graduate students. The Union says that Harvard received $60 million income on its investment portfolio, but only $45 million of this income and none of the capital gains were funneled into operating expenses. The endowment, therefore, grew 8 per cent last year, far out-stripping the 3.5 per cent inflation rate, the Union says. Some of this income could be applied toward the pressing needs of the University, including graduate students, the Union reasons.

Harvard takes the opposite position. It maintains that the problems of graduate students must be seen in the context of a financial crisis which is besetting the entire University, and which was recently exacerbated by the Nixon fund cutbacks. Last year, the Administration says, it channeled all $55 million of net investment income to the various Faculties. (The Union's $60 million figure does not account for various amortization and investment service charges, it says.)

Because some of the money could not be applied for the purposes for which the capital was bequeathed, it was re-invested, but for the first time, all available income was used for operating expenses. The Administration therefore denies that any large pool of funds is available.

Capital gains in the endowment are similarly restricted, the Administration says. Hale Champion, Financial vice president, yesterday estimated that in an emergency Harvard could only liquify $100 million of its $1.6 billion endowment. The rest of the endowment is restricted as to what the money can be spent for or how it can be spent.

Moreover, the Administration argues, a strong and growing endowment has enabled Harvard to weather the financial crisis thus far without resort to drastic measures, such as reducing faculty sizes. Graduate students are not the hardest hit by the crisis, and they should be willing to hold their demands in abeyance for the time being.

What will happen?

Just about anything can happen. The Union claims its back is to the wall, and says it will strike indefinitely until its demands are met, or until its membership votes to go back to work. The Administration is likely to play a waiting game for several days to see how the strike is progressing. If the work stoppage considerably slices class attendance, informal Administration overtures will probably be made to Union leaders. If, on the other hand, the strike fizzles, the Administration will wait it out, proclaiming all is well, and urging the handful of recalcitrants to return to class.

The success of the strike depends on several variables. Although the Union has called on all members of the community to neither teach nor attend class, it is expected that different groups will heed the strike call in different degrees. The overwhelming majority of the Faculty will continue to teach. Although Faculty opinion about the Union and its demands ranges from sympathetic to haughtily remote. Faculty members share a common commitment to orderly process and an abhorrence of anything that interrupts their teaching and scholarship. A handful of liberal-to-left junior Faculty will call off class, but most will not. Some conservative Faculty members, if they follow last year's pattern, may even re-schedule hour exams to penalize students observing the strike. The Union will not get any help from this quarter.

Teaching fellows are one of the keys to the strike's success. Other graduate students who support the strike will refuse to attend class, but teaching fellows will give the cause added leverage. By refusing in large numbers to teach sections, they can cripple large and middle-sized lecture courses and bring the Administration to the bargaining table. As of last week, the Union claimed that between 200 and 300 of its 600 members were teaching fellows. This figure will have to grow and most of the teaching fellows will have to stay out if the strike is to have a chance.