Test Penn Treebank Tokenizer

PennTreeBankTokenizerTest.php

<?php

namespace NlpTools\Tokenizers;

/**
 *
 * @author Dan Cardin
 */
class PennTreeBankTokenizerTest extends \PHPUnit_Framework_TestCase
{
    
    public function testTokenizer()
    {
        $tokenizer = new PennTreeBankTokenizer();
        $tokens = $tokenizer->tokenize("Good muffins cost $3.88\nin New York.  Please buy me\ntwo of them.\nThanks.");
        $this->assertCount(16, $tokens);
    }

    public function testTokenizer2()
    {
        $tokenizer = new PennTreeBankTokenizer();
        $this->assertCount(7, $tokenizer->tokenize("They'll save and invest more."));
    }
    
    public function testTokenizer3()
    {
        $tokenizer = new PennTreeBankTokenizer();
        $this->assertCount(4, $tokenizer->tokenize("I'm some text"));
    }
    
    public function testAgainstOriginalSedImplementation()
    {
        $tokenizer = new PennTreeBankTokenizer();
        $tokenized = new \SplFileObject(TEST_DATA_DIR."/Tokenizers/PennTreeBankTokenizerTest/tokenized");
        $tokenized->setFlags(\SplFileObject::DROP_NEW_LINE);
        $sentences = new \SplFileObject(TEST_DATA_DIR."/Tokenizers/PennTreeBankTokenizerTest/sentences");
        $sentences->setFlags(\SplFileObject::DROP_NEW_LINE);

        $tokenized->rewind();
        foreach ($sentences as $sentence) {
            if ($sentence) // skip empty lines
            {
                $this->assertEquals(
                    $tokenized->current(),
                    implode(" ",$tokenizer->tokenize($sentence)),
                    "Sentence: '$sentence' was not tokenized correctly"
                );
            }
            $tokenized->next();
        }
    }
}

sentences

Pierre Vinken, 61 years old, will join the board as a nonexecutive director Nov. 29.
Mr. Vinken is chairman of Elsevier N.V., the Dutch publishing group. 
Rudolph Agnew, 55 years old and former chairman of Consolidated Gold Fields PLC, was named a nonexecutive director of this British industrial conglomerate. 
A form of asbestos once used to make Kent cigarette filters has caused a high percentage of cancer deaths among a group of workers exposed to it more than 30 years ago, researchers reported. 
The asbestos fiber, crocidolite, is unusually resilient once it enters the lungs, with even brief exposures to it causing symptoms that show up decades later, researchers said.
Lorillard Inc., the unit of New York-based Loews Corp. that makes Kent cigarettes, stopped using crocidolite in its Micronite cigarette filters in 1956. 
Although preliminary findings were reported more than a year ago, the latest results appear in today's New England Journal of Medicine, a forum likely to bring new attention to the problem. 
A Lorillard spokewoman said, "This is an old story.
We're talking about years ago before anyone heard of asbestos having any questionable properties.
There is no asbestos in our products now." 
Neither Lorillard nor the researchers who studied the workers were aware of any research on smokers of the Kent cigarettes. "We have no useful information on whether users are at risk," said James A. Talcott of Boston's Dana-Farber Cancer Institute.
Dr. Talcott led a team of researchers from the National Cancer Institute and the medical schools of Harvard University and Boston University. 
The Lorillard spokeswoman said asbestos was used in "very modest amounts" in making paper for the filters in the early 1950s and replaced with a different type of filter in 1956.
From 1953 to 1955, 9.8 billion Kent cigarettes with the filters were sold, the company said. 
Among 33 men who worked closely with the substance, 28 have died -- more than three times the expected number.
Four of the five surviving workers have asbestos-related diseases, including three with recently diagnosed cancer.
The total of 18 deaths from malignant mesothelioma, lung cancer and asbestosis was far higher than expected, the researchers said. 
"The morbidity rate is a striking finding among those of us who study asbestos-related diseases," said Dr. Talcott. 
The percentage of lung cancer deaths among the workers at the West Groton, Mass., paper factory appears to be the highest for any asbestos workers studied in Western industrialized countries, he said.
The plant, which is owned by Hollingsworth & Vose Co., was under contract with Lorillard to make the cigarette filters. 
The finding probably will support those who argue that the U.S. should regulate the class of asbestos including crocidolite more stringently than the common kind of asbestos, chrysotile, found in most schools and other buildings, Dr. Talcott said. 
The U.S. is one of the few industrialized nations that doesn't have a higher standard of regulation for the smooth, needle-like fibers such as crocidolite that are classified as amphobiles, according to Brooke T. Mossman, a professor of pathlogy at the University of Vermont College of Medicine.
More common chrysotile fibers are curly and are more easily rejected by the body, Dr. Mossman explained. 
In July, the Environmental Protection Agency imposed a gradual ban on virtually all uses of asbestos.
By 1997, almost all remaining uses of cancer-causing asbestos will be outlawed. 
About 160 workers at a factory that made paper for the Kent filters were exposed to asbestos in the 1950s.
Areas of the factory were particularly dusty where the crocidolite was used.
Workers dumped large burlap sacks of the imported material into a huge bin, poured in cotton and acetate fibers and mechanically mixed the dry fibers in a process used to make filters.
Workers described "clouds of blue dust" that hung over parts of the factory, even though exhaust fans ventilated the area. 
"There's no question that some of those workers and managers contracted asbestos-related diseases," said Darrell Phillips, vice president of human resources for Hollingsworth & Vose. "But you have to recognize that these events took place 35 years ago.
It has no bearing on our work force today." 
Yields on money-market mutual funds continued to slide, amid signs that portfolio managers expect further declines in interest rates. 
The average seven-day compound yield of the 400 taxable funds tracked by IBC/Donoghue's Money Fund Report eased a fraction of a percentage point to 8.45% from 8.47% for the week ended Tuesday.
Compound yields assume reinvestment of dividends and that the current yield continues for a year. 
Average maturity of the funds' investments lengthened by a day to 41 days, the longest since early August, according to Donoghue's.
Longer maturities are thought to indicate declining interest rates because they permit portfolio managers to retain relatively higher rates for a longer period.
Shorter maturities are considered a sign of rising rates because portfolio managers can capture higher rates sooner. 
The average maturity for funds open only to institutions, considered by some to be a stronger indicator because those managers watch the market closely, reached a high point for the year -- 33 days. 
Nevertheless, said Brenda Malizia Negus, editor of Money Fund Report, yields "may blip up again before they blip down" because of recent rises in short-term interest rates.
The yield on six-month Treasury bills sold at Monday's auction, for example, rose to 8.04% from 7.90%. 
Despite recent declines in yields, investors continue to pour cash into money funds.
Assets of the 400 taxable funds grew by $1.5 billion during the latest week, to $352.7 billion. 
Typically, money-fund yields beat comparable short-term investments because portfolio managers can vary maturities and go after the highest rates.
The top money funds are currently yielding well over 9%.
Dreyfus World-Wide Dollar, the top-yielding fund, had a seven-day compound yield of 9.37% during the latest week, down from 9.45% a week earlier.
It invests heavily in dollar-denominated securities overseas and is currently waiving management fees, which boosts its yield.
The average seven-day simple yield of the 400 funds was 8.12%, down from 8.14%.
The 30-day simple yield fell to an average 8.19% from 8.22%; the 30-day compound yield slid to an average 8.53% from 8.56%. 
J.P. Bolduc, vice chairman of W.R. Grace & Co., which holds a 83.4% interest in this energy-services company, was elected a director.
He succeeds Terrence D. Daniels, formerly a W.R. Grace vice chairman, who resigned.
W.R. Grace holds three of Grace Energy's seven board seats. 
Pacific First Financial Corp. said shareholders approved its acquisition by Royal Trustco Ltd. of Toronto for $27 a share, or $212 million. 
The thrift holding company said it expects to obtain regulatory approval and complete the transaction by year-end. 
McDermott International Inc. said its Babcock & Wilcox unit completed the sale of its Bailey Controls Operations to Finmeccanica S.p.
A. for $295 million. 
Finmeccanica is an Italian state-owned holding company with interests in the mechanical engineering industry. 
Bailey Controls, based in Wickliffe, Ohio, makes computerized industrial controls systems.
It employs 2,700 people and has annual revenue of about $370 million. 
The federal government suspended sales of U.S. savings bonds because Congress hasn't lifted the ceiling on government debt. 
Until Congress acts, the government hasn't any authority to issue new debt obligations of any kind, the Treasury said. 
The government's borrowing authority dropped at midnight Tuesday to $2.80 trillion from $2.87 trillion.
Legislation to lift the debt ceiling is ensnarled in the fight over cutting capital-gains taxes. 
The House has voted to raise the ceiling to $3.1 trillion, but the Senate isn't expected to act until next week at the earliest.
The Treasury said the U.S. will default on Nov. 9 if Congress doesn't act by then. 
Clark J. Vitulli was named senior vice president and general manager of this U.S. sales and marketing arm of Japanese auto maker Mazda Motor Corp.
In the new position he will oversee Mazda's U.S. sales, service, parts and marketing operations.
Previously, Mr. Vitulli, 43 years old, was general marketing manager of Chrysler Corp. 's Chrysler division.
He had been a sales and marketing executive with Chrysler for 20 years. 
When it's time for their biannual powwow, the nation's manufacturing titans typically jet off to the sunny confines of resort towns like Boca Raton and Hot Springs. 
Not this year. 
The National Association of Manufacturers settled on the Hoosier capital of Indianapolis for its fall board meeting.
And the city decided to treat its guests more like royalty or rock stars than factory owners.
The idea, of course: to prove to 125 corporate decision makers that the buckle on the Rust Belt isn't so rusty after all, that it's a good place for a company to expand. 
On the receiving end of the message were officials from giants like Du Pont and Maytag, along with lesser knowns like Trojan Steel and the Valley Queen Cheese Factory. 
For starters, the executives joined Mayor William H. Hudnut III for an evening of the Indianapolis Symphony Orchestra and a guest pianist-comedian Victor Borge.
Champagne and dessert followed. 
The next morning, with a police escort, busloads of executives and their wives raced to the Indianapolis Motor Speedway, unimpeded by traffic or red lights.
The governor couldn't make it, so the lieutenant governor welcomed the special guests.
A buffet breakfast was held in the museum, where food and drinks are banned to everyday visitors.
Then, in the guests' honor, the speedway hauled out four drivers, crews and even the official Indianapolis 500 announcer for a 10-lap exhibition race. 
After the race, Fortune 500 executives drooled like schoolboys over the cars and drivers.
No dummies, the drivers pointed out they still had space on their machines for another sponsor's name or two. 
Back downtown, the execs squeezed in a few meetings at the hotel before boarding the buses again.
This time, it was for dinner and dancing -- a block away. 
Under the stars and moons of the renovated Indiana Roof ballroom, nine of the hottest chefs in town fed them Indiana duckling mousseline, lobster consomme, veal mignon and chocolate terrine with a raspberry sauce.
Knowing a tasty -- and free -- meal when they eat one, the executives gave the chefs a standing ovation. 
More than a few CEOs say the red-carpet treatment tempts them to return to a heartland city for future meetings.
But for now, they're looking forward to their winter meeting -- Boca in February. 
South Korea registered a trade deficit of $101 million in October, reflecting the country's economic sluggishness, according to government figures released Wednesday. 
Preliminary tallies by the Trade and Industry Ministry showed another trade deficit in October, the fifth monthly setback this year, casting a cloud on South Korea's export-oriented economy. 
Exports in October stood at $5.29 billion, a mere 0.7% increase from a year earlier, while imports increased sharply to $5.39 billion, up 20% from last October. 
South Korea's economic boom, which began in 1986, stopped this year because of prolonged labor disputes, trade conflicts and sluggish exports.
Government officials said exports at the end of the year would remain under a government target of $68 billion. 
Despite the gloomy forecast, South Korea has recorded a trade surplus of $71 million so far this year. 
From January to October, the nation's accumulated exports increased 4% from the same period last year to $50.45 billion.
Imports were at $50.38 billion, up 19%. 
Newsweek, trying to keep pace with rival Time magazine, announced new advertising rates for 1990 and said it will introduce a new incentive plan for advertisers. 
The new ad plan from Newsweek, a unit of the Washington Post Co., is the second incentive plan the magazine has offered advertisers in three years.
Plans that give advertisers discounts for maintaining or increasing ad spending have become permanent fixtures at the news weeklies and underscore the fierce competition between Newsweek, Time Warner Inc. 's Time magazine, and Mortimer B. Zuckerman's U.S. News & World Report. 
Alan Spoon, recently named Newsweek president, said Newsweek's ad rates would increase 5% in January.
A full, four-color page in Newsweek will cost $100,980.
In mid-October, Time magazine lowered its guaranteed circulation rate base for 1990 while not increasing ad page rates; with a lower circulation base, Time's ad rate will be effectively 7.5% higher per subscriber; a full page in Time costs about $120,000.
U.S. News has yet to announce its 1990 ad rates. 
Newsweek said it will introduce the Circulation Credit Plan, which awards space credits to advertisers on "renewal advertising." The magazine will reward with "page bonuses" advertisers who in 1990 meet or exceed their 1989 spending, as long as they spent $325,000 in 1989 and $340,000 in 1990. 
Mr. Spoon said the plan is not an attempt to shore up a decline in ad pages in the first nine months of 1989; Newsweek's ad pages totaled 1,620, a drop of 3.2% from last year, according to Publishers Information Bureau. "What matters is what advertisers are paying per page, and in that department we are doing fine this fall," said Mr. Spoon. 
Both Newsweek and U.S. News have been gaining circulation in recent years without heavy use of electronic giveaways to subscribers, such as telephones or watches.
However, none of the big three weeklies recorded circulation gains recently.
According to Audit Bureau of Circulations, Time, the largest newsweekly, had average circulation of 4,393,237, a decrease of 7.3%.
Newsweek's circulation for the first six months of 1989 was 3,288,453, flat from the same period last year.
U.S. News' circulation in the same time was 2,303,328, down 2.6%. 
New England Electric System bowed out of the bidding for Public Service Co. of New Hampshire, saying that the risks were too high and the potential payoff too far in the future to justify a higher offer. 
The move leaves United Illuminating Co. and Northeast Utilities as the remaining outside bidders for PS of New Hampshire, which also has proposed an internal reorganization plan in Chapter 11 bankruptcy proceedings under which it would remain an independent company. 
New England Electric, based in Westborough, Mass., had offered $2 billion to acquire PS of New Hampshire, well below the $2.29 billion value United Illuminating places on its bid and the $2.25 billion Northeast says its bid is worth.
United Illuminating is based in New Haven, Conn., and Northeast is based in Hartford, Conn.
PS of New Hampshire, Manchester, N.H., values its internal reorganization plan at about $2.2 billion. 
John Rowe, president and chief executive officer of New England Electric, said the company's return on equity could suffer if it made a higher bid and its forecasts related to PS of New Hampshire -- such as growth in electricity demand and improved operating efficiencies -- didn't come true. "When we evaluated raising our bid, the risks seemed substantial and persistent over the next five years, and the rewards seemed a long way out.
That got hard to take," he added. 
Mr. Rowe also noted that political concerns also worried New England Electric.
No matter who owns PS of New Hampshire, after it emerges from bankruptcy proceedings its rates will be among the highest in the nation, he said. "That attracts attention . . . it was just another one of the risk factors" that led to the company's decision to withdraw from the bidding, he added. 
Wilbur Ross Jr. of Rothschild Inc., the financial adviser to the troubled company's equity holders, said the withdrawal of New England Electric might speed up the reorganization process.
The fact that New England proposed lower rate increases -- 4.8% over seven years against around 5.5% boosts proposed by the other two outside bidders -- complicated negotiations with state officials, Mr. Ross asserted. "Now the field is less cluttered," he added. 
Separately, the Federal Energy Regulatory Commission turned down for now a request by Northeast seeking approval of its possible purchase of PS of New Hampshire.
Northeast said it would refile its request and still hopes for an expedited review by the FERC so that it could complete the purchase by next summer if its bid is the one approved by the bankruptcy court. 
PS of New Hampshire shares closed yesterday at $3.75, off 25 cents, in New York Stock Exchange composite trading. 
Norman Ricken, 52 years old and former president and chief operating officer of Toys "R" Us Inc., and Frederick Deane Jr., 63, chairman of Signet Banking Corp., were elected directors of this consumer electronics and appliances retailing chain.
They succeed Daniel M. Rexinger, retired Circuit City executive vice president, and Robert R. Glauber, U.S. Treasury undersecretary, on the 12-member board. 
Commonwealth Edison Co. was ordered to refund about $250 million to its current and former ratepayers for illegal rates collected for cost overruns on a nuclear power plant. 
The refund was about $55 million more than previously ordered by the Illinois Commerce Commission and trade groups said it may be the largest ever required of a state or local utility. 
State court Judge Richard Curry ordered Edison to make average refunds of about $45 to $50 each to Edison customers who have received electric service since April 1986, including about two million customers who have moved during that period.
Judge Curry ordered the refunds to begin Feb. 1 and said that he wouldn't entertain any appeals or other attempts to block his order by Commonwealth Edison. "The refund pool . . . may not be held hostage through another round of appeals," Judge Curry said. 
Commonwealth Edison said it is already appealing the underlying commission order and is considering appealing Judge Curry's order. 
The exact amount of the refund will be determined next year based on actual collections made until Dec. 31 of this year.
Commonwealth Edison said the ruling could force it to slash its 1989 earnings by $1.55 a share.
For 1988, Commonwealth Edison reported earnings of $737.5 million, or $3.01 a share. 
A Commonwealth Edison spokesman said that tracking down the two million customers whose addresses have changed during the past 3 1/2 years would be "an administrative nightmare." 
In New York Stock Exchange composite trading yesterday, Commonwealth Edison closed at $38.375, down 12.5 cents. 
The $2.5 billion Byron 1 plant near Rockford, Ill., was completed in 1985.
In a disputed 1985 ruling, the Commerce Commission said Commonwealth Edison could raise its electricity rates by $49 million to pay for the plant.
But state courts upheld a challenge by consumer groups to the commission's rate increase and found the rates illegal.
The Illinois Supreme Court ordered the commission to audit Commonwealth Edison's construction expenses and refund any unreasonable expenses.
The utility has been collecting for the plant's construction cost from its 3.1 million customers subject to a refund since 1986. 
In August, the commission ruled that between $190 million and $195 million of the plant's construction cost was unreasonable and should be refunded, plus interest.
In his ruling, Judge Curry added an additional $55 million to the commission's calculations.
Last month, Judge Curry set the interest rate on the refund at 9%. 
Commonwealth Edison now faces an additional court-ordered refund on its summer/winter rate differential collections that the Illinois Appellate Court has estimated at $140 million.
And consumer groups hope that Judge Curry's Byron 1 order may set a precedent for a second nuclear rate case involving Commonwealth Edison's Braidwood 2 plant.
Commonwealth Edison is seeking about $245 million in rate increases to pay for Braidwood 2.
The commission is expected to rule on the Braidwood 2 case by year end. 
Last year Commonwealth Edison had to refund $72.7 million for poor performance of its LaSalle I nuclear plant. 
Japan's domestic sales of cars, trucks and buses in October rose 18% from a year earlier to 500,004 units, a record for the month, the Japan Automobile Dealers' Association said. 
The strong growth followed year-to-year increases of 21% in August and 12% in September.
The monthly sales have been setting records every month since March. 
October sales, compared with the previous month, inched down 0.4%. 
Sales of passenger cars grew 22% from a year earlier to 361,376 units.
Sales of medium-sized cars, which benefited from price reductions arising from introduction of the consumption tax, more than doubled to 30,841 units from 13,056 in October 1988. 
Texas Instruments Japan Ltd., a unit of Texas Instruments Inc., said it opened a plant in South Korea to manufacture control devices. 
The new plant, located in Chinchon about 60 miles from Seoul, will help meet increasing and diversifying demand for control products in South Korea, the company said. 
The plant will produce control devices used in motor vehicles and household appliances. 
The survival of spinoff Cray Computer Corp. as a fledgling in the supercomputer business appears to depend heavily on the creativity -- and longevity -- of its chairman and chief designer, Seymour Cray. 
Not only is development of the new company's initial machine tied directly to Mr. Cray, so is its balance sheet.
Documents filed with the Securities and Exchange Commission on the pending spinoff disclosed that Cray Research Inc. will withdraw the almost $100 million in financing it is providing the new firm if Mr. Cray leaves or if the product-design project he heads is scrapped. 
The documents also said that although the 64-year-old Mr. Cray has been working on the project for more than six years, the Cray-3 machine is at least another year away from a fully operational prototype.
Moreover, there have been no orders for the Cray-3 so far, though the company says it is talking with several prospects. 
While many of the risks were anticipated when Minneapolis-based Cray Research first announced the spinoff in May, the strings it attached to the financing hadn't been made public until yesterday. 
"We didn't have much of a choice," Cray Computer's chief financial officer, Gregory Barnum, said in an interview. "The theory is that Seymour is the chief designer of the Cray-3, and without him it could not be completed.
Cray Research did not want to fund a project that did not include Seymour." 
The documents also said that Cray Computer anticipates needing perhaps another $120 million in financing beginning next September.
But Mr. Barnum called that "a worst-case" scenario. 
The filing on the details of the spinoff caused Cray Research stock to jump $2.875 yesterday to close at $38 in New York Stock Exchange composite trading. 
Analysts noted yesterday that Cray Research's decision to link its $98.3 million promissory note to Mr. Cray's presence will complicate a valuation of the new company. "It has to be considered as an additional risk for the investor," said Gary P. Smaby of Smaby Group Inc., Minneapolis. "Cray Computer will be a concept stock," he said. "You either believe Seymour can do it again or you don't." 
Besides the designer's age, other risk factors for Mr. Cray's new company include the Cray-3's tricky, unproven chip technology.
The SEC documents describe those chips, which are made of gallium arsenide, as being so fragile and minute they will require special robotic handling equipment.
In addition, the Cray-3 will contain 16 processors -- twice as many as the largest current supercomputer. 
Cray Computer also will face intense competition, not only from Cray Research, which has about 60% of the world-wide supercomputer market and which is expected to roll out the C-90 machine, a direct competitor with the Cray-3, in 1991.
The spinoff also will compete with International Business Machines Corp. and Japan's Big Three -- Hitachi Ltd., NEC Corp. and Fujitsu Ltd. 
The new company said it believes there are fewer than 100 potential customers for supercomputers priced between $15 million and $30 million -- presumably the Cray-3 price range. 
Under terms of the spinoff, Cray Research stockholders are to receive one Cray Computer share for every two Cray Research shares they own in a distribution expected to occur in about two weeks.
No price for the new shares has been set.
Instead, the companies will leave it up to the marketplace to decide.
Cray Computer has applied to trade on Nasdaq. 
Analysts calculate Cray Computer's initial book value at about $4.75 a share.
Along with the note, Cray Research is transferring about $53 million in assets, primarily those related to the Cray-3 development, which has been a drain on Cray Research's earnings. 
Pro-forma balance sheets clearly show why Cray Research favored the spinoff.
Without the Cray-3 research and development expenses, the company would have been able to report a profit of $19.3 million for the first half of 1989 rather than the $5.9 million it posted.
On the other hand, had it existed then, Cray Computer would have incurred a $20.5 million loss. 
Mr. Cray, who couldn't be reached for comment, will work for the new Colorado Springs, Colo., company as an independent contractor -- the arrangement he had with Cray Research.
Regarded as the father of the supercomputer, Mr. Cray was paid $600,000 at Cray Research last year.
At Cray Computer, he will be paid $240,000. 
Besides Messrs.
Cray and Barnum, other senior management at the company includes Neil Davenport, 47, president and chief executive officer; Joseph M. Blanchard, 37, vice president, engineering; Malcolm A. Hammerton, 40, vice president, software; and Douglas R. Wheeland, 45, vice president, hardware.
All came from Cray Research. 
Cray Computer, which currently employs 241 people, said it expects a work force of 450 by the end of 1990. 
John R. Stevens, 49 years old, was named senior executive vice president and chief operating officer, both new positions.
He will continue to report to Donald Pardus, president and chief executive officer.
Mr. Stevens was executive vice president of this electric-utility holding company.
Arthur A. Hatch, 59, was named executive vice president of the company.
He was previously president of the company's Eastern Edison Co. unit.
John D. Carney, 45, was named to succeed Mr. Hatch as president of Eastern Edison.
Previously he was vice president of Eastern Edison.
Robert P. Tassinari, 63, was named senior vice president of Eastern Utilities.
He was previously vice president. 
The U.S., claiming some success in its trade diplomacy, removed South Korea, Taiwan and Saudi Arabia from a list of countries it is closely watching for allegedly failing to honor U.S. patents, copyrights and other intellectual-property rights. 
However, five other countries -- China, Thailand, India, Brazil and Mexico -- will remain on that so-called priority watch list as a result of an interim review, U.S. Trade Representative Carla Hills announced.
Under the new U.S. trade law, those countries could face accelerated unfair-trade investigations and stiff trade sanctions if they don't improve their protection of intellectual property by next spring. 
Mrs. Hills said many of the 25 countries that she placed under varying degrees of scrutiny have made "genuine progress" on this touchy issue.
She said there is "growing realization" around the world that denial of intellectual-property rights harms all trading nations, and particularly the "creativity and inventiveness of an {offending} country's own citizens." 
U.S. trade negotiators argue that countries with inadequate protections for intellectual-property rights could be hurting themselves by discouraging their own scientists and authors and by deterring U.S. high-technology firms from investing or marketing their best products there. 
Mrs. Hills lauded South Korea for creating an intellectual-property task force and special enforcement teams of police officers and prosecutors trained to pursue movie and book pirates.
Seoul also has instituted effective search-and-seizure procedures to aid these teams, she said. 
Taiwan has improved its standing with the U.S. by initialing a bilateral copyright agreement, amending its trademark law and introducing legislation to protect foreign movie producers from unauthorized showings of their films.
That measure could compel Taipei's growing number of small video-viewing parlors to pay movie producers for showing their films. 
Saudi Arabia, for its part, has vowed to enact a copyright law compatible with international standards and to apply the law to computer software as well as to literary works, Mrs. Hills said. 
These three countries aren't completely off the hook, though.
They will remain on a lower-priority list that includes 17 other countries.
Those countries -- including Japan, Italy, Canada, Greece and Spain -- are still of some concern to the U.S. but are deemed to pose less-serious problems for American patent and copyright owners than those on the "priority" list. 
Gary Hoffman, a Washington lawyer specializing in intellectual-property cases, said the threat of U.S. retaliation, combined with a growing recognition that protecting intellectual property is in a country's own interest, prompted the improvements made by South Korea, Taiwan and Saudi Arabia. "What this tells us is that U.S. trade law is working," he said.
He said Mexico could be one of the next countries to be removed from the priority list because of its efforts to craft a new patent law. 
Mrs. Hills said that the U.S. is still concerned about "disturbing developments in Turkey and continuing slow progress in Malaysia." She didn't elaborate, although earlier U.S. trade reports have complained of videocassette piracy in Malaysia and disregard for U.S. pharmaceutical patents in Turkey. 
The 1988 trade act requires Mrs. Hills to issue another review of the performance of these countries by April 30.
So far, Mrs. Hills hasn't deemed any cases bad enough to merit an accelerated investigation under the so-called special 301 provision of the act. 
Argentina said it will ask creditor banks to halve its foreign debt of $64 billion -- the third-highest in the developing world. 
The declaration by Economy Minister Nestor Rapanelli is believed to be the first time such an action has been called for by an Argentine official of such stature.
The Latin American nation has paid very little on its debt since early last year. 
"Argentina aspires to reach a reduction of 50% in the value of its external debt," Mr. Rapanelli said through his spokesman, Miguel Alurralde. 
Mr. Rapanelli met in August with U.S. Assistant Treasury Secretary David Mulford.
Argentine negotiator Carlos Carballo was in Washington and New York this week to meet with banks. 
Mr. Rapanelli recently has said the government of President Carlos Menem, who took office July 8, feels a significant reduction of principal and interest is the only way the debt problem may be solved.
But he has not said before that the country wants half the debt forgiven. 
(During its centennial year, The Wall Street Journal will report events of the past century that stand as milestones of American business history.) 
THREE COMPUTERS THAT CHANGED the face of personal computing were launched in 1977. 
That year the Apple II, Commodore Pet and Tandy TRS-80 came to market.
The computers were crude by today's standards.
Apple II owners, for example, had to use their television sets as screens and stored data on audiocassettes.
But Apple II was a major advance from Apple I, which was built in a garage by Stephen Wozniak and Steven Jobs for hobbyists such as the Homebrew Computer Club.
In addition, the Apple II was an affordable $1,298. 
Crude as they were, these early PCs triggered explosive product development in desktop models for the home and office. 
Big mainframe computers for business had been around for years.
But the new 1977 PCs -- unlike earlier built-from-kit types such as the Altair, Sol and IMSAI -- had keyboards and could store about two pages of data in their memories.
Current PCs are more than 50 times faster and have memory capacity 500 times greater than their 1977 counterparts. 
There were many pioneer PC contributors.
William Gates and Paul Allen in 1975 developed an early language-housekeeper system for PCs, and Gates became an industry billionaire six years after IBM adapted one of these versions in 1981.
Alan F. Shugart, currently chairman of Seagate Technology, led the team that developed the disk drives for PCs.
Dennis Hayes and Dale Heatherington, two Atlanta engineers, were co-developers of the internal modems that allow PCs to share data via the telephone. 
IBM, the world leader in computers, didn't offer its first PC until August 1981 as many other companies entered the market.
Today, PC shipments annually total some $38.3 billion world-wide. 
F.H. Faulding & Co., an Australian pharmaceuticals company, said its Moleculon Inc. affiliate acquired Kalipharma Inc. for $23 million. 
Kalipharma is a New Jersey-based pharmaceuticals concern that sells products under the Purepac label. 
Faulding said it owns 33% of Moleculon's voting stock and has an agreement to acquire an additional 19%.
That stake, together with its convertible preferred stock holdings, gives Faulding the right to increase its interest to 70% of Moleculon's voting stock. 
Oil production from Australia's Bass Strait fields will be raised by 11,000 barrels a day to about 321,000 barrels with the launch of the Whiting field, the first of five small fields scheduled to be brought into production before the end of 1990. 
Esso Australia Ltd., a unit of New York-based Exxon Corp., and Broken Hill Pty. operate the fields in a joint venture. 
Esso said the Whiting field started production Tuesday.
Output will be gradually increased until it reaches about 11,000 barrels a day.
The field has reserves of 21 million barrels.
Reserves for the five new fields total 50 million barrels. 
The Perch and Dolphin fields are expected to start producing early next year, and the Seahorse and Tarwhine fields later next year.
Esso said the fields were developed after the Australian government decided in 1987 to make the first 30 million barrels from new fields free of excise tax. 
R.P. Scherer Corp. said it completed the $10.2 million sale of its Southern Optical subsidiary to a group led by the unit's president, Thomas R. Sloan, and other managers. 
Following the acquisition of R.P. Scherer by a buy-out group led by Shearson Lehman Hutton earlier this year, the maker of gelatin capsules decided to divest itself of certain of its non-encapsulating businesses.
The sale of Southern Optical is a part of the program. 
The White House said President Bush has approved duty-free treatment for imports of certain types of watches that aren't produced in "significant quantities" in the U.S., the Virgin Islands and other U.S. possessions. 
The action came in response to a petition filed by Timex Inc. for changes in the U.S. Generalized System of Preferences for imports from developing nations.
Previously, watch imports were denied such duty-free treatment. 
Timex had requested duty-free treatment for many types of watches, covered by 58 different U.S. tariff classifications.
The White House said Mr. Bush decided to grant duty-free status for 18 categories, but turned down such treatment for other types of watches "because of the potential for material injury to watch producers located in the U.S. and the Virgin Islands." 
Timex is a major U.S. producer and seller of watches, including low-priced battery-operated watches assembled in the Philippines and other developing nations covered by the U.S. tariff preferences. 
U.S. trade officials said the Philippines and Thailand would be the main beneficiaries of the president's action. 
Imports of the types of watches that now will be eligible for duty-free treatment totaled about $37.3 million in 1988, a relatively small share of the $1.5 billion in U.S. watch imports that year, according to an aide to U.S. Trade Representative Carla Hills. 
Magna International Inc. 's chief financial officer, James McAlpine, resigned and its chairman, Frank Stronach, is stepping in to help turn the automotive-parts manufacturer around, the company said. 
Mr. Stronach will direct an effort to reduce overhead and curb capital spending "until a more satisfactory level of profit is achieved and maintained," Magna said. 
Stephen Akerfeldt, currently vice president finance, will succeed Mr. McAlpine. 
An ambitious expansion has left Magna with excess capacity and a heavy debt load as the automotive industry enters a downturn.
The company has reported declines in operating profit in each of the past three years, despite steady sales growth. 
Magna recently cut its quarterly dividend in half and the company's Class A shares are wallowing far below their 52-week high of 16.125 Canadian dollars (US$13.73).
On the Toronto Stock Exchange yesterday, Magna shares closed up 37.5 Canadian cents to C$9.625. 
Mr. Stronach, founder and controlling shareholder of Magna, resigned as chief executive officer last year to seek, unsuccessfully, a seat in Canada's Parliament. 
Analysts said Mr. Stronach wants to resume a more influential role in running the company.
They expect him to cut costs throughout the organization. 
The company said Mr. Stronach will personally direct the restructuring, assisted by Manfred Gingl, president and chief executive.
Neither they nor Mr. McAlpine could be reached for comment. 
Magna said Mr. McAlpine resigned to pursue a consulting career, with Magna as one of his clients. 
Lord Chilver, 63-year-old chairman of English China Clays PLC, was named a nonexecutive director of this British chemical company. 
Japanese investors nearly single-handedly bought up two new mortgage securities-based mutual funds totaling $701 million, the U.S. Federal National Mortgage Association said. 
The purchases show the strong interest of Japanese investors in U.S. mortgage-based instruments, Fannie Mae's chairman, David O. Maxwell, said at a news conference.
He said more than 90% of the funds were placed with Japanese institutional investors.
The rest went to investors from France and Hong Kong. 
Earlier this year, Japanese investors snapped up a similar, $570 million mortgage-backed securities mutual fund.
That fund was put together by Blackstone Group, a New York investment bank.
The latest two funds were assembled jointly by Goldman, Sachs & Co. of the U.S. and Japan's Daiwa Securities Co. 
The new, seven-year funds -- one offering a fixed-rate return and the other with a floating-rate return linked to the London interbank offered rate -- offer two key advantages to Japanese investors.
First, they are designed to eliminate the risk of prepayment -- mortgage-backed securities can be retired early if interest rates decline, and such prepayment forces investors to redeploy their money at lower rates.
Second, they channel monthly mortgage payments into semiannual payments, reducing the administrative burden on investors. 
By addressing those problems, Mr. Maxwell said, the new funds have become "extremely attractive to Japanese and other investors outside the U.S." 
Such devices have boosted Japanese investment in mortgage-backed securities to more than 1% of the $900 billion in such instruments outstanding, and their purchases are growing at a rapid rate.
They also have become large purchasers of Fannie Mae's corporate debt, buying $2.4 billion in Fannie Mae bonds during the first nine months of the year, or almost a tenth of the total amount issued. 
James L. Pate, 54-year-old executive vice president, was named a director of this oil concern, expanding the board to 14 members. 
LTV Corp. said a federal bankruptcy court judge agreed to extend until March 8, 1990, the period in which the steel, aerospace and energy products company has the exclusive right to file a reorganization plan. 
The company is operating under Chapter 11 of the federal Bankruptcy Code, giving it court protection from creditors' lawsuits while it attempts to work out a plan to pay its debts. 
Italian chemical giant Montedison S.p.
A., through its Montedison Acquisition N.V. indirect unit, began its $37-a-share tender offer for all the common shares outstanding of Erbamont N.V., a maker of pharmaceuticals incorporated in the Netherlands. 
The offer, advertised in today's editions of The Wall Street Journal, is scheduled to expire at the end of November. 
Montedison currently owns about 72% of Erbamont's common shares outstanding. 
The offer is being launched pursuant to a previously announced agreement between the companies. 
Japan's reserves of gold, convertible foreign currencies, and special drawing rights fell by a hefty $1.82 billion in October to $84.29 billion, the Finance Ministry said.
The total marks the sixth consecutive monthly decline. 
The protracted downturn reflects the intensity of Bank of Japan yen-support intervention since June, when the U.S. currency temporarily surged above the 150.00 yen level. 
The announcement follows a sharper $2.2 billion decline in the country's foreign reserves in September to $86.12 billion. 
Pick a country, any country. 
It's the latest investment craze sweeping Wall Street: a rash of new closed-end country funds, those publicly traded portfolios that invest in stocks of a single foreign country. 
No fewer than 24 country funds have been launched or registered with regulators this year, triple the level of all of 1988, according to Charles E. Simon & Co., a Washington-based research firm. 
The turf recently has ranged from Chile to Austria to Portugal.
Next week, the Philippine Fund's launch will be capped by a visit by Philippine President Corazon Aquino -- the first time a head of state has kicked off an issue at the Big Board here. 
The next province? "Anything's possible -- how about the New Guinea Fund?" quips George Foot, a managing partner at Newgate Management Associates of Northampton, Mass.
The recent explosion of country funds mirrors the "closed-end fund mania" of the 1920s, Mr. Foot says, when narrowly focused funds grew wildly popular.
They fell into oblivion after the 1929 crash. 
Unlike traditional open-end mutual funds, most of these one-country portfolios are the "closed-end" type, issuing a fixed number of shares that trade publicly. 
The surge brings to nearly 50 the number of country funds that are or soon will be listed in New York or London.
These funds now account for several billions of dollars in assets. 
"People are looking to stake their claims" now before the number of available nations runs out, says Michael Porter, an analyst at Smith Barney, Harris Upham & Co., New York. 
Behind all the hoopla is some heavy-duty competition.
As individual investors have turned away from the stock market over the years, securities firms have scrambled to find new products that brokers find easy to sell.
And the firms are stretching their nets far and wide to do it. 
Financial planners often urge investors to diversify and to hold a smattering of international securities.
And many emerging markets have outpaced more mature markets, such as the U.S. and Japan.
Country funds offer an easy way to get a taste of foreign stocks without the hard research of seeking out individual companies. 
But it doesn't take much to get burned.
Political and currency gyrations can whipsaw the funds.
Another concern: The funds' share prices tend to swing more than the broader market.
When the stock market dropped nearly 7% Oct. 13, for instance, the Mexico Fund plunged about 18% and the Spain Fund fell 16%.
And most country funds were clobbered more than most stocks after the 1987 crash. 
What's so wild about the funds' frenzy right now is that many are trading at historically fat premiums to the value of their underlying portfolios.
After trading at an average discount of more than 20% in late 1987 and part of last year, country funds currently trade at an average premium of 6%.
The reason: Share prices of many of these funds this year have climbed much more sharply than the foreign stocks they hold. 
It's probably worth paying a premium for funds that invest in markets that are partially closed to foreign investors, such as South Korea, some specialists say.
But some European funds recently have skyrocketed; Spain Fund has surged to a startling 120% premium.
It has been targeted by Japanese investors as a good long-term play tied to 1992's European economic integration.
And several new funds that aren't even fully invested yet have jumped to trade at big premiums. 
"I'm very alarmed to see these rich valuations," says Smith Barney's Mr. Porter. 
The newly fattened premiums reflect the increasingly global marketing of some country funds, Mr. Porter suggests.
Unlike many U.S. investors, those in Asia or Europe seeking foreign-stock exposure may be less resistant to paying higher prices for country funds. 
"There may be an international viewpoint cast on the funds listed here," Mr. Porter says. 
Nonetheless, plenty of U.S. analysts and money managers are aghast at the lofty trading levels of some country funds.
They argue that U.S. investors often can buy American depositary receipts on the big stocks in many funds; these so-called ADRs represent shares of foreign companies traded in the U.S.
That way investors can essentially buy the funds without paying the premium. 
For people who insist on jumping in now to buy the funds, Newgate's Mr. Foot says: "The only advice I have for these folks is that those who come to the party late had better be ready to leave quickly." 
The U.S. and Soviet Union are holding technical talks about possible repayment by Moscow of $188 million in pre-Communist Russian debts owed to the U.S. government, the State Department said. 
If the debts are repaid, it could clear the way for Soviet bonds to be sold in the U.S. However, after two meetings with the Soviets, a State Department spokesman said that it's "too early to say" whether that will happen. 
Coincident with the talks, the State Department said it has permitted a Soviet bank to open a New York branch.
The branch of the Bank for Foreign Economic Affairs was approved last spring and opened in July. 
But a Soviet bank here would be crippled unless Moscow found a way to settle the $188 million debt, which was lent to the country's short-lived democratic Kerensky government before the Communists seized power in 1917. 
Under a 1934 law, the Johnson Debt Default Act, as amended, it's illegal for Americans to extend credit to countries in default to the U.S. government, unless they are members of the World Bank and International Monetary Fund.
The U.S.S.R. belongs to neither organization. 
Moscow has settled pre-1917 debts with other countries in recent years at less than face value. 
The State Department stressed the pre-1933 debts as the key to satisfying the Johnson Act.
But the Soviets might still face legal obstacles to raising money in the U.S. until they settle hundreds of millions of dollars in additional debt still outstanding from the World War II lend-lease program. 
In another reflection that the growth of the economy is leveling off, the government said that orders for manufactured goods and spending on construction failed to rise in September. 
Meanwhile, the National Association of Purchasing Management said its latest survey indicated that the manufacturing economy contracted in October for the sixth consecutive month.
Its index inched up to 47.6% in October from 46% in September.
Any reading below 50% suggests the manufacturing sector is generally declining. 
The purchasing managers, however, also said that orders turned up in October after four months of decline. 
Factories booked $236.74 billion in orders in September, nearly the same as the $236.79 billion in August, the Commerce Department said.
If not for a 59.6% surge in orders for capital goods by defense contractors, factory orders would have fallen 2.1%. 
In a separate report, the department said construction spending ran at an annual rate of $415.6 billion, not significantly different from the $415.8 billion reported for August.
Private construction spending was down, but government building activity was up.
The figures in both reports were adjusted to remove the effects of usual seasonal patterns, but weren't adjusted for inflation. 
Kenneth Mayland, economist for Society Corp., a Cleveland bank, said demand for exports of factory goods is beginning to taper off.
At the same time, the drop in interest rates since the spring has failed to revive the residential construction industry. 
"What sector is stepping forward to pick up the slack?" he asked. "I draw a blank." 
By most measures, the nation's industrial sector is now growing very slowly -- if at all.
Factory payrolls fell in September.
So did the Federal Reserve Board's industrial-production index. 
Yet many economists aren't predicting that the economy is about to slip into recession.
They cite a lack of "imbalances" that provide early warning signals of a downturn. 
Inventories are closely watched for such clues, for instance.
Economists say a buildup in inventories can provoke cutbacks in production that can lead to a recession.
But yesterday's factory orders report had good news on that front: it said factory inventories fell 0.1% in September, the first decline since February 1987. 
"This conforms to the `soft landing' scenario," said Elliott Platt, an economist at Donaldson, Lufkin & Jenrette Securities Corp. "I don't see any signs that inventories are excessive." A soft landing is an economic slowdown that eases inflation without leading to a recession. 
The department said orders for nondurable goods -- those intended to last fewer than three years -- fell 0.3% in September to $109.73 billion after climbing 0.9% the month before.
Orders for durable goods were up 0.2% to $127.03 billion after rising 3.9% the month before.
The department previously estimated that durable-goods orders fell 0.1% in September. 
Factory shipments fell 1.6% to $234.4 billion after rising 5.4% in August.
Shipments have been relatively level since January, the Commerce Department noted. 
Manufacturers' backlogs of unfilled orders rose 0.5% in September to $497.34 billion, helped by strength in the defense capital goods sector.
Excluding these orders, backlogs declined 0.3%. 
In its construction spending report, the Commerce Department said residential construction, which accounts for nearly half of all construction spending, was off 0.9% in September to an annual rate of $191.9 billion.
David Berson, economist for the Mortgage Bankers Association, predicted the drop in interest rates eventually will boost spending on single-family homes, but probably not until early next year. 
Spending on private, nonresidential construction was off 2.6% to an annual rate of $99.1 billion with no sector showing strength.
Government construction spending rose 4.3% to $88 billion. 
After adjusting for inflation, the Commerce Department said construction spending didn't change in September. 
For the first nine months of the year, total construction spending ran about 2% above last year's level. 
The government's construction spending figures contrast with a report issued earlier in the week by McGraw-Hill Inc. 's F.W. Dodge Group.
Dodge reported an 8% increase in construction contracts awarded in September.
The goverment counts money as it is spent; Dodge counts contracts when they are awarded.
The government includes money spent on residential renovation; Dodge doesn't. 
Although the purchasing managers' index continues to indicate a slowing economy, it isn't signaling an imminent recession, said Robert Bretz, chairman of the association's survey committee and director of materials management at Pitney Bowes Inc., Stamford, Conn.
He said the index would have to be in the low 40% range for several months to be considered a forecast of recession. 
The report offered new evidence that the nation's export growth, though still continuing, may be slowing.
Only 19% of the purchasing managers reported better export orders in October, down from 27% in September.
And 8% said export orders were down last month, compared with 6% the month before. 
The purhasing managers' report also added evidence that inflation is under control.
For the fifth consecutive month, purchasing managers said prices for the goods they purchased fell.
The decline was even steeper than in September. 
They also said that vendors were delivering goods more quickly in October than they had for each of the five previous months.
Economists consider that a sign that inflationary pressures are abating.
When demand is stronger than suppliers can handle and delivery times lengthen, prices tend to rise. 
The purchasing managers' report is based on data provided by more than 250 purchasing executives.
Each of the survey's indicators gauges the difference between the number of purchasers reporting improvement in a particular area and the number reporting a worsening. 
For the first time, the October survey polled members on imports.
It found that of the 73% who import, 10% said they imported more in October and 12% said they imported less than the previous month.
While acknowledging one month's figures don't prove a trend, Mr. Bretz said, "It does lead you to suspect imports are going down, or at least not increasing that much." 
Items listed as being in short supply numbered only about a dozen, but they included one newcomer: milk and milk powder. "It's an odd thing to put on the list," Mr. Bretz noted.
He said that for the second month in a row, food processors reported a shortage of nonfat dry milk.
They blamed increased demand for dairy products at a time of exceptionally high U.S. exports of dry milk, coupled with very low import quotas. 
Pamela Sebastian in New York contributed to this article. 
Here are the Commerce Department's figures for construction spending in billions of dollars at seasonally adjusted annual rates. 
Here are the Commerce Department's latest figures for manufacturers in billions of dollars, seasonally adjusted. 
Judging from the Americana in Haruki Murakami's "A Wild Sheep Chase" (Kodansha, 320 pages, $18.95), baby boomers on both sides of the Pacific have a lot in common.
Although set in Japan, the novel's texture is almost entirely Western, especially American.
Characters drink Salty Dogs, whistle "Johnny B. Goode" and watch Bugs Bunny reruns.
They read Mickey Spillane and talk about Groucho and Harpo.
They worry about their careers, drink too much and suffer through broken marriages and desultory affairs.
This is Japan? 
For an American reader, part of the charm of this engaging novel should come in recognizing that Japan isn't the buttoned-down society of contemporary American lore.
It's also refreshing to read a Japanese author who clearly doesn't belong to the self-aggrandizing "we-Japanese" school of writers who perpetuate the notion of the unique Japanese, unfathomable by outsiders.
If "A Wild Sheep Chase" carries an implicit message for international relations, it's that the Japanese are more like us than most of us think. 
That's not to say that the nutty plot of "A Wild Sheep Chase" is rooted in reality.
It's imaginative and often funny.
A disaffected, hard-drinking, nearly-30 hero sets off for snow country in search of an elusive sheep with a star on its back at the behest of a sinister, erudite mobster with a Stanford degree.
He has in tow his prescient girlfriend, whose sassy retorts mark her as anything but a docile butterfly.
Along the way, he meets a solicitous Christian chauffeur who offers the hero God's phone number; and the Sheep Man, a sweet, roughhewn figure who wears -- what else -- a sheepskin. 
The 40-year-old Mr. Murakami is a publishing sensation in Japan.
A more recent novel, "Norwegian Wood" (every Japanese under 40 seems to be fluent in Beatles lyrics), has sold more than four million copies since Kodansha published it in 1987.
But he is just one of several youthful writers -- Tokyo's brat pack -- who are dominating the best-seller charts in Japan.
Their books are written in idiomatic, contemporary language and usually carry hefty dashes of Americana. 
In Robert Whiting's "You Gotta Have Wa" (Macmillan, 339 pages, $17.95), the Beatles give way to baseball, in the Nipponese version we would be hard put to call a "game." As Mr. Whiting describes it, Nipponese baseball is a "mirror of Japan's fabled virtues of hard work and harmony." "Wa" is Japanese for "team spirit" and Japanese ballplayers have miles and miles of it.
A player's commitment to practice and team image is as important as his batting average.
Polls once named Tokyo Giants star Tatsunori Hara, a "humble, uncomplaining, obedient soul," as the male symbol of Japan. 
But other than the fact that besuboru is played with a ball and a bat, it's unrecognizable: Fans politely return foul balls to stadium ushers; the strike zone expands depending on the size of the hitter; ties are permitted -- even welcomed -- since they honorably sidestep the shame of defeat; players must abide by strict rules of conduct even in their personal lives -- players for the Tokyo Giants, for example, must always wear ties when on the road. 
"You Gotta Have Wa" is the often amusing chronicle of how American ballplayers, rationed to two per team, fare in Japan.
Despite the enormous sums of money they're paid to stand up at a Japanese plate, a good number decide it's not worth it and run for home. 
"Funny Business" (Soho, 228 pages, $17.95) by Gary Katzenstein is anything but.
It's the petulant complaint of an impudent American whom Sony hosted for a year while he was on a Luce Fellowship in Tokyo -- to the regret of both parties. 
In sometimes amusing, more often supercilious, even vicious passages, Mr. Katzenstein describes how Sony invades even the most mundane aspects of its workers' lives -- at the regimented office, where employees are assigned lunch partners -- and at "home" in the austere company dormitory run by a prying caretaker. 
Some of his observations about Japanese management style are on the mark.
It's probably true that many salarymen put in unproductive overtime just for the sake of solidarity, that the system is so hierarchical that only the assistant manager can talk to the manager and the manager to the general manager, and that Sony was chary of letting a young, short-term American employee take on any responsibility.
All of this must have been enormously frustrating to Mr. Katzenstein, who went to Sony with degrees in business and computer science and was raring to invent another Walkman. 
But Sony ultimately took a lesson from the American management books and fired Mr. Katzenstein, after he committed the social crime of making an appointment to see the venerable Akio Morita, founder of Sony.
It's a shame their meeting never took place.
Mr. Katzenstein certainly would have learned something, and it's even possible Mr. Morita would have too. 
Ms. Kirkpatrick, the Journal's deputy editorial features editor, worked in Tokyo for three years. 
More and more corners of the globe are becoming free of tobacco smoke. 
In Singapore, a new law requires smokers to put out their cigarettes before entering restaurants, department stores and sports centers or face a $250 fine.
Discos and private clubs are exempt from the ban, and smoking will be permitted in bars except during meal hours, an official said.
Singapore already bans smoking in all theaters, buses, public elevators, hospitals and fast-food restaurants. 
In Malaysia, Siti Zaharah Sulaiman, a deputy minister in the prime minister's office, launched a "No-Smoking Week" at the Mara Institute of Technology near Kuala Lumpur and urged other schools to ban on-campus smoking. 
South Korea has different concerns.
In Seoul, officials began visiting about 26,000 cigarette stalls to remove illegal posters and signboards advertising imported cigarettes.
South Korea has opened its market to foreign cigarettes but restricts advertising to designated places. 
A marketing study indicates that Hong Kong consumers are the most materialistic in the 14 major markets where the survey was carried out.
The study by the Backer Spielvogel Bates ad agency also found that the colony's consumers feel more pressured than those in any of the other surveyed markets, which include the U.S. and Japan.
The survey found that nearly half of Hong Kong consumers espouse what it identified as materialistic values, compared with about one-third in Japan and the U.S.
More than three in five said they are under a great deal of stress most of the time, compared with less than one in two U.S. consumers and one in four in Japan. 
The Thai cabinet endorsed Finance Minister Pramual Sabhavasu's proposal to build a $19 million conference center for a joint meeting of the World Bank and International Monetary Fund two years from now.
The meeting, which is expected to draw 20,000 to Bangkok, was going to be held at the Central Plaza Hotel, but the government balked at the hotel's conditions for undertaking necessary expansion.
A major concern about the current plan is whether the new center can be built in such a short time. 
Yasser Arafat has written to the chairman of the International Olympic Committee asking him to back a Palestinian bid to join the committee, the Palestine Liberation Organization news agency WAFA said.
An official of the Palestinian Olympic Committee said the committee first applied for membership in 1979 and renewed its application in August of this year.
The PLO in recent months has been trying to join international organizations but failed earlier this year to win membership in the World Health Organization and the World Tourism Organization. 
A Beijing food-shop assistant has become the first mainland Chinese to get AIDS through sex, the People's Daily said.
It said the man, whom it did not name, had been found to have the disease after hospital tests.
Once the disease was confirmed, all the man's associates and family were tested, but none have so far been found to have AIDS, the newspaper said.
The man had for a long time had "a chaotic sex life," including relations with foreign men, the newspaper said. 
The Polish government increased home electricity charges by 150% and doubled gas prices.
The official news agency PAP said the increases were intended to bring unrealistically low energy charges into line with production costs and compensate for a rise in coal prices.
In happier news, South Korea, in establishing diplomatic ties with Poland yesterday, announced $450 million in loans to the financially strapped Warsaw government. 
In a victory for environmentalists, Hungary's parliament terminated a multibillion-dollar River Danube dam being built by Austrian firms. 
The Nagymaros dam was designed to be twinned with another dam, now nearly complete, 100 miles upstream in Czechoslovakia.
In ending Hungary's part of the project, Parliament authorized Prime Minister Miklos Nemeth to modify a 1977 agreement with Czechoslovakia, which still wants the dam to be built. 
Mr. Nemeth said in parliament that Czechoslovakia and Hungary would suffer environmental damage if the twin dams were built as planned. 
Czechoslovakia said in May it could seek $2 billion from Hungary if the twindam contract were broken.
The Czech dam can't be operated solely at peak periods without the Nagymaros project. 
A painting by August Strindberg set a Scandinavian price record when it sold at auction in Stockholm for $2.44 million. "Lighthouse II" was painted in oils by the playwright in 1901 . . . After years of decline, weddings in France showed a 2.2% upturn last year, with 6,000 more couples exchanging rings in 1988 than in the previous year, the national statistics office said.
But the number of weddings last year -- 271,124 -- was still well below the 400,000 registered in 1972, the last year of increasing marriages. 
BRAMALEA Ltd. said it agreed to issue 100 million Canadian dollars (US$85.1 million) of 10.5% senior debentures due Nov. 30, 1999, together with 100,000 bond purchase warrants.
The Toronto-based real estate concern said each bond warrant entitles the holder to buy C$1,000 principal amount of debentures at par plus accrued interest to the date of purchase.
The warrants expire Nov. 30, 1990.
The issue will be swapped into fixed-rate U.S. dollars at a rate the company said is less than 9%; a spokesman declined to elaborate.
Lead underwriters for the issue are Scotia McLeod Inc. and RBC Dominion Securities Inc., both Toronto-based investment dealers.
Bramalea said it expects to complete the issue by the end of the month. 
As an actor, Charles Lane isn't the inheritor of Charlie Chaplin's spirit.
Steve Martin has already laid his claim to that. 
But it is Mr. Lane, as movie director, producer and writer, who has been obsessed with refitting Chaplin's Little Tramp in a contemporary way.
In 1976, as a film student at the Purchase campus of the State University of New York, Mr. Lane shot "A Place in Time," a 36-minute black-and-white film about a sketch artist, a man of the streets.
Now, 13 years later, Mr. Lane has revived his Artist in a full-length movie called "Sidewalk Stories," a poignant piece of work about a modern-day tramp.
Of course, if the film contained dialogue, Mr. Lane's Artist would be called a homeless person.
So would the Little Tramp, for that matter. 
I say "contained dialogue" because "Sidewalk Stories" isn't really silent at all.
Composer Marc Marder, a college friend of Mr. Lane's who earns his living playing the double bass in classical music ensembles, has prepared an exciting, eclectic score that tells you what the characters are thinking and feeling far more precisely than intertitles, or even words, would. 
Much of Mr. Lane's film takes a highly romanticized view of life on the streets (though probably no more romanticized than Mr. Chaplin's notion of the Tramp as the good-hearted free spirit).
Filmed in lovely black and white by Bill Dill, the New York streets of "Sidewalk Stories" seem benign.
On Wall Street men and women walk with great purpose, noticing one another only when they jostle for cabs.
The Artist hangs out in Greenwich Village, on a strip of Sixth Avenue populated by jugglers, magicians and other good-natured hustlers. (This clearly is not real life: no crack dealers, no dead-eyed men selling four-year-old copies of Cosmopolitan, no one curled up in a cardboard box.) 
The Artist has his routine.
He spends his days sketching passers-by, or trying to.
At night he returns to the condemned building he calls home.
His life, including his skirmishes with a competing sketch artist, seems carefree.
He is his own man. 
Then, just as the Tramp is given a blind girl to cure in "City Lights," the Artist is put in charge of returning a two-year-old waif (Nicole Alysia), whose father has been murdered by thugs, to her mother.
This cute child turns out to be a blessing and a curse.
She gives the Artist a sense of purpose, but also alerts him to the serious inadequacy of his vagrant life.
The beds at the Bowery Mission seem far drearier when he has to tuck a little girl into one of them at night. 
To further load the stakes, Mr. Lane dreamed up a highly improbable romance for the Artist, with a young woman who owns her own children's shop and who lives in an expensive high-rise apartment building.
This story line might resonate more strongly if Mr. Lane had as strong a presence in front of the camera as he does behind it. 
Mr. Lane's final purpose isn't to glamorize the Artist's vagabond existence.
He has a point he wants to make, and he makes it, with a great deal of force.
The movie ends with sound, the sound of street people talking, and there isn't anything whimsical or enviable in those rough, beaten voices. 
The French film maker Claude Chabrol has managed another kind of weird achievement with his "Story of Women." He has made a harsh, brilliant picture -- one that's captivating -- about a character who, viewed from the most sympathetic angle, would seem disagreeable. 
Yet this woman, Marie-Louise Giraud, carries historical significance, both as one of the last women to be executed in France and as a symbol of the Vichy government's hypocrisy.
While Vichy collaborated with the Germans during World War II in the deaths of thousands of Resistance fighters and Jews, its officials needed a diversionary symbolic traitor.
Marie-Louise, a small-time abortionist, was their woman. 
She became an abortionist accidentally, and continued because it enabled her to buy jam, cocoa and other war-rationed goodies.
She was untrained and, in one botched job killed a client.
Her remorse was shallow and brief.
Although she was kind and playful to her children, she was dreadful to her war-damaged husband; she openly brought her lover into their home.
As presented by Mr. Chabrol, and played with thin-lipped intensity by Isabelle Huppert, Marie-Louise (called Marie Latour in the film) was not a nice person.
But she didn't deserve to have her head chopped off. 
There is very little to recommend "Old Gringo," a confused rendering of the Carlos Fuentes novel of the Mexican Revolution.
Most of the picture is taken up with endless scenes of many people either fighting or eating and drinking to celebrate victory.
I mention the picture only because many bad movies have a bright spot, and this one has Gregory Peck, in a marvelously loose and energetic portrayal of an old man who wants to die the way he wants to die. 
Video Tip: Before seeing "Sidewalk Stories," take a look at "City Lights," Chaplin's Tramp at his finest. 
Boeing Co. said it is discussing plans with three of its regular Japanese suppliers to possibly help build a larger version of its popular 767 twin-jet. 
The discussions are still in preliminary stages, and the specific details haven't been worked out between the Seattle aerospace company and Kawasaki Heavy Industries Ltd., Mitsubishi Heavy Industries Ltd. and Fuji Heavy Industries Ltd. 
The three Japanese companies build the body sections of the 767, accounting for a combined 15% of the aircraft.
Japanese press reports have speculated that the Japanese contribution could rise to between 20% and 25% under the new program. 
If Boeing goes ahead with the larger 767, the plane could hit the market in the mid-1990s. 
This is the year the negative ad, for years a secondary presence in most political campaigns, became the main event. 
The irony is that the attack commercial, after getting a boost in last year's presidential campaign, has come of age in an off-off election year with only a few contests scattered across the country. 
But in the three leading political contests of 1989, the negative ads have reached new levels of hostility, raising fears that this kind of mudslinging, empty of significant issues, is ushering in a new era of campaigns without content. 
"Now," says Joseph Napolitan, a pioneer in political television, "the idea is to attack first, last and always." 
A trend that started with the first stirrings of politics, accelerated with the dawn of the television age and became a sometimes-tawdry art form in 1988, has reached an entirely new stage. 
"To get people's attention these days," says Douglas Bailey, a political consultant, "your TV ad needs to be bold and entertaining, and, more often than not, that means confrontational.
And, unlike a few years ago, you don't even have to worry whether the ad is truthful." 
In 1989, as often as not, the principal fights in the major campaigns are prompted by the ads themselves. 
Take a look, then, at the main attack commercials that set the tone for Tuesday's elections in New York City, New Jersey and Virginia: 
New York City: The screen fills with a small, tight facial shot of David Dinkins, Democratic candidate for mayor of New York City. "David Dinkins failed to file his income taxes for four straight years," says a disembodied male voice. 
And then this television commercial, paid for by Republican Rudolph Giuliani's campaign and produced by Roger Ailes, the master of negative TV ads, really gets down to business.
Mr. Dinkins, the ad charges, also failed to report his campaign contributions accurately, hid his links to a failing insurance company and paid a convicted kidnapper "through a phony organization with no members, no receipts and no office." 
"David Dinkins," says the kicker, "Why does he always wait until he's caught?" 
"Nasty innuendoes," says John Siegal, Mr. Dinkins's issues director, "designed to prosecute a case of political corruption that simply doesn't exist." 
Stung by the Giuliani ads, Mr. Dinkins's TV consultants, Robert Shrum and David Doak, finally unleashed a negative ad of their own.
The screen shows two distorted, unrecognizable photos, presumably of two politicians. "Compare two candidates for mayor," says the announcer. "One says he's for banning cop-killer bullets.
The other has opposed a ban on cop-killer bullets.
One claims he's pro-choice.
The other has opposed a woman's right to choose." 
"Funny thing," says the kicker, "both these candidates are named Rudolph Giuliani." 
Who's telling the truth?
Everybody -- and nobody.
It's a classic situation of ads that are true but not always fully accurate. 
Mr. Dinkins did fail to file his income taxes for four years, but he insists he voluntarily admitted the "oversight" when he was being considered for a city job.
He was on the board of an insurance company with financial problems, but he insists he made no secret of it.
The city's Campaign Finance Board has refused to pay Mr. Dinkins $95,142 in matching funds because his campaign records are incomplete.
The campaign has blamed these reporting problems on computer errors.
And, says Mr. Dinkins, he didn't know the man his campaign paid for a get-out-the-vote effort had been convicted of kidnapping.
But, say Mr. Dinkins's managers, he did have an office and his organization did have members. 
Mr. Giuliani's campaign chairman, Peter Powers, says the Dinkins ad is "deceptive." The other side, he argues, "knows Giuliani has always been pro-choice, even though he has personal reservations.
They know he is generally opposed to cop-killer bullets, but that he had some reservations about the language in the legislation." 
Virginia: Democratic Lt. Gov. Douglas Wilder opened his gubernatorial battle with Republican Marshall Coleman with an abortion commercial produced by Frank Greer that analysts of every political persuasion agree was a tour de force.
Against a shot of Monticello superimposed on an American flag, an announcer talks about the "strong tradition of freedom and individual liberty" that Virginians have nurtured for generations.
Then, just as an image of the statue of Thomas Jefferson dissolves from the screen, the announcer continues: "On the issue of abortion, Marshall Coleman wants to take away your right to choose and give it to the politicians." 
That commercial -- which said Mr. Coleman wanted to take away the right of abortion "even in cases of rape and incest," a charge Mr. Coleman denies -- changed the dynamics of the campaign, transforming it, at least in part, into a referendum on abortion.
The ad prompted Mr. Coleman, the former Virginia attorney general, to launch a series of advertisements created by Bob Goodman and designed to shake Mr. Wilder's support among the very women who were attracted by the abortion ad. 
The Coleman counterattack featured a close-up of a young woman in shadows and the ad suggested that she was recalling an unpleasant courtroom ordeal.
A voice says, "C'mon, now, don't you have boyfriends?" Then an announcer interjects: "It was Douglas Wilder who introduced a bill to force rape victims age 13 and younger to be interrogated about their private lives by lawyers for accused rapists.
So the next time Mr. Wilder talks about the rights of women, ask him about this law he tried to pass." 
Mr. Wilder did introduce such legislation 17 years ago, but he did so at the request of a constituent, a common legislative technique used by lawmakers.
The legislation itself noted that it was introduced "by request," and in 1983 Mr. Wilder introduced a bill to protect rape victims from unfounded interrogation. 
"People have grown tired of these ads and Coleman has gotten the stigma of being a negative campaigner," says Mark Rozell, a political scientist at Mary Washington College. "Wilder has managed to get across the idea that Coleman will say anything to get elected governor and -- more important -- has been able to put the onus for all the negative campaigning on Coleman." 
Mr. Coleman said this week that he would devote the remainder of the political season to positive campaigning, but the truce lasted only hours.
By Tuesday night, television stations were carrying new ads featuring Mr. Coleman himself raising questions about Mr. Wilder's sensitivity to rape victims. 
New Jersey: The attacks began when Democratic Rep. James Florio aired an ad featuring a drawing of Pinocchio and a photograph of Mr. Florio's rival, Republican Rep. Jim Courter. "Remember Pinocchio?" says a female voice. "Consider Jim Courter." 
And then this commercial, produced by Bob Squier, gets down to its own mean and dirty business.
Pictures of rusted oil drums swim into focus, and the female voice purrs, "That hazardous waste on his {Mr.
Courter's} property -- the neighbors are suing for consumer fraud." And the nose on Mr. Courter's face grows. 
The only fraud involved, cry Mr. Courter's partisans, is the Florio commercial itself, and so the Courter campaign has responded with its own Pinocchio commercial, produced by Mr. Ailes.
In this one, the screen fills with photographs of both candidates. "Who's really lying?" asks a female voice. "Florio's lying," the voice goes on, because "the barrel on Courter's land . . . contained heating oil, was cleaned up and caused no pollution." 
Mr. Courter's long nose shrinks while Mr. Florio's grows. 
Who's telling the truth?
Stephen Salmore, a political scientist at New Jersey's Eagleton Institute, says it's another example of an ad that's true but not fully accurate.
Barrels were dumped on the Courter property, a complaint was made, but there is no evidence the barrels were a serious threat to the environment. 
Even so, according to Mr. Salmore, the ad was "devastating" because it raised questions about Mr. Courter's credibility.
But it's building on a long tradition.
In 1966, on route to a re-election rout of Democrat Frank O'Connor, GOP Gov. Nelson Rockefeller of New York appeared in person saying, "If you want to keep the crime rates high, O'Connor is your man." 
A seat on the Chicago Board of Trade was sold for $350,000, down $16,000 from the previous sale last Friday. 
Seats currently are quoted at $331,000, bid, and $350,000, asked. 
The record price for a full membership on the exchange is $550,000, set Aug. 31, 1987. 
Japanese investment in Southeast Asia is propelling the region toward economic integration. 
Interviews with analysts and business people in the U.S. suggest that Japanese capital may produce the economic cooperation that Southeast Asian politicians have pursued in fits and starts for decades.
But Japan's power in the region also is sparking fears of domination and posing fresh policy questions. 
The flow of Japanese funds has set in motion "a process whereby these economies will be knitted together by the great Japanese investment machine," says Robert Hormats, vice chairman of Goldman Sachs International Corp. 
In the past five years, Japanese companies have tripled their commitments in Asia to $5.57 billion.
In Thailand, for example, the government's Board of Investment approved $705.6 million of Japanese investment in 1988, 10 times the U.S. investment figure for the year.
Japan's commitment in Southeast Asia also includes steep increases in foreign assistance and trade. 
Asia's other cash-rich countries are following Japan's lead and pumping capital into the region.
In Taiwan and South Korea, rising wages are forcing manufacturers to seek other overseas sites for labor-intensive production.
These nations, known as Asia's "little tigers," also are contributing to Southeast Asia's integration, but their influence will remain subordinate to Japan's. 
For recipient countries such as Thailand and Malaysia, the investment will provide needed jobs and spur growth.
But Asian nations' harsh memories of their military domination by Japan in the early part of this century make them fearful of falling under Japanese economic hegemony now. 
Because of budget constraints in Washington, the U.S. encourages Japan to share economic burdens in the region.
But it resists yielding political ground.
In the coming decade, analysts say, U.S.-Japanese relations will be tested as Tokyo comes to terms with its new status as the region's economic behemoth. 
Japan's swelling investment in Southeast Asia is part of its economic evolution.
In the past decade, Japanese manufacturers concentrated on domestic production for export.
In the 1990s, spurred by rising labor costs and the strong yen, these companies will increasingly turn themselves into multinationals with plants around the world.
To capture the investment, Southeast Asian nations will move to accommodate Japanese business. 
These nations' internal decisions "will be made in a way not to offend their largest aid donor, largest private investor and largest lender," says Richard Drobnick, director of the international business and research program at the University of Southern California's Graduate School of Business. 
Japanese money will help turn Southeast Asia into a more cohesive economic region.
But, analysts say, Asian cooperation isn't likely to parallel the European Common Market approach.
Rather, Japanese investment will spur integration of certain sectors, says Kent Calder, a specialist in East Asian economies at the Woodrow Wilson School for Public and Internatonal Affairs at Princeton University.
In electronics, for example, a Japanese company might make television picture tubes in Japan, assemble the sets in Malaysia and export them to Indonesia. 
"The effect will be to pull Asia together not as a common market but as an integrated production zone," says Goldman Sachs's Mr. Hormats. 
Countries in the region also are beginning to consider a framework for closer economic and political ties.
The economic and foreign ministers of 12 Asian and Pacific nations will meet in Australia next week to discuss global trade issues as well as regional matters such as transportation and telecommunications.
Participants will include the U.S., Australia, Canada, Japan, South Korea and New Zealand as well as the six members of the Association of Southeast Asian Nations -- Thailand, Malaysia, Singapore, Indonesia, the Philippines and Brunei. 
In addition, the U.S. this year offered its own plan for cooperation around the Pacific rim in a major speech by Secretary of State James Baker, following up a proposal made in January by Australian Prime Minister Bob Hawke. 
The Baker proposal reasserts Washington's intention to continue playing a leading political role in the region. "In Asia, as in Europe, a new order is taking shape," Mr. Baker said. "The U.S., with its regional friends, must play a crucial role in designing its architecture." 
But maintaining U.S. influence will be difficult in the face of Japanese dominance in the region.
Japan not only outstrips the U.S. in investment flows but also outranks it in trade with most Southeast Asian countries (although the U.S. remains the leading trade partner for all of Asia).
Moreover, the Japanese government, now the world's largest aid donor, is pumping far more assistance into the region than the U.S. is.
While U.S. officials voice optimism about Japan's enlarged role in Asia, they also convey an undertone of caution. "There's an understanding on the part of the U.S. that Japan has to expand its functions" in Asia, says J. Michael Farren, undersecretary of commerce for trade. "If they approach it with a benevolent, altruistic attitude, there will be a net gain for everyone." 
Some Asian nations are apprehensive about Washington's demand that Tokyo step up its military spending to ease the U.S. security burden in the region.
The issue is further complicated by uncertainty over the future of the U.S.'s leases on military bases in the Philippines and by a possible U.S. troop reduction in South Korea.
Many Asians regard a U.S. presence as a desirable counterweight to Japanese influence. 
"No one wants the U.S. to pick up its marbles and go home," Mr. Hormats says. 
For their part, Taiwan and South Korea are expected to step up their own investments in the next decade to try to slow the Japanese juggernaut. 
"They don't want Japan to monopolize the region and sew it up," says Chong-sik Lee, professor of East Asian politics at the University of Pennsylvania. 
Cathryn Rice could hardly believe her eyes.
While giving the Comprehensive Test of Basic Skills to ninth graders at Greenville High School last March 16, she spotted a student looking at crib sheets. 
She had seen cheating before, but these notes were uncanny. "A stockbroker is an example of a profession in trade and finance. . . . At the end of World War II, Germany surrendered before Japan. . . . The Senate-House conference committee is used when a bill is passed by the House and Senate in different forms." 
Virtually word for word, the notes matched questions and answers on the social-studies section of the test the student was taking.
In fact, the student had the answers to almost all of the 40 questions in that section.
The student surrendered the notes, but not without a protest. "My teacher said it was OK for me to use the notes on the test," he said. 
The teacher in question was Nancy Yeargin -- considered by many students and parents to be one of the best at the school.
Confronted, Mrs. Yeargin admitted she had given the questions and answers two days before the examination to two low-ability geography classes.
She had gone so far as to display the questions on an overhead projector and underline the answers. 
Mrs. Yeargin was fired and prosecuted under an unusual South Carolina law that makes it a crime to breach test security.
In September, she pleaded guilty and paid a $500 fine.
Her alternative was 90 days in jail. 
Her story is partly one of personal downfall.
She was an unstinting teacher who won laurels and inspired students, but she will probably never teach again.
In her wake she left the bitterness and anger of a principal who was her friend and now calls her a betrayer; of colleagues who say she brought them shame; of students and parents who defended her and insist she was treated harshly; and of school-district officials stunned that despite the bald-faced nature of her actions, she became something of a local martyr. 
Mrs. Yeargin's case also casts some light on the dark side of school reform, where pressures on teachers are growing and where high-stakes testing has enhanced the temptation to cheat.
The 1987 statute Mrs. Yeargin violated was designed to enforce provisions of South Carolina's school-improvement laws.
Prosecutors alleged that she was trying to bolster students' scores to win a bonus under the state's 1984 Education Improvement Act.
The bonus depended on her ability to produce higher student-test scores. 
"There is incredible pressure on school systems and teachers to raise test scores," says Walt Haney, an education professor and testing specialist at Boston College. "So efforts to beat the tests are also on the rise." And most disturbing, it is educators, not students, who are blamed for much of the wrongdoing. 
A 50-state study released in September by Friends for Education, an Albuquerque, N.M., school-research group, concluded that "outright cheating by American educators" is "common." The group says standardized achievement test scores are greatly inflated because teachers often "teach the test" as Mrs. Yeargin did, although most are never caught. 
Evidence of widespread cheating has surfaced in several states in the last year or so.
California's education department suspects adult responsibility for erasures at 40 schools that changed wrong answers to right ones on a statewide test.
After numerous occurrences of questionable teacher help to students, Texas is revising its security practices. 
And sales of test-coaching booklets for classroom instruction are booming.
These materials, including Macmillan/McGraw-Hill School Publishing Co. 's Scoring High and Learning Materials -- are nothing short of sophisticated crib sheets, according to some recent academic research.
By using them, teachers -- with administrative blessing -- telegraph to students beforehand the precise areas on which a test will concentrate, and sometimes give away a few exact questions and answers.
Use of Scoring High is widespread in South Carolina and common in Greenville County, Mrs. Yeargin's school district. 
Experts say there isn't another state in the country where tests mean as much as they do in South Carolina. 
Under the state's Education Improvement Act, low test scores can block students' promotions or force entire districts into wrenching, state-supervised "interventions" that can mean firings.
High test scores, on the other hand, bring recognition and extra money -- a new computer lab for a school, grants for special projects, a bonus for the superintendent. 
And South Carolina says it is getting results.
Since the reforms went in place, for example, no state has posted a higher rate of improvement on the Scholastic Aptitude Test than South Carolina, although the state still posts the lowest average score of the about 21 states who use the SAT as the primary college entrance examination.
Critics say South Carolina is paying a price by stressing improved test scores so much.
Friends of Education rates South Carolina one of the worst seven states in its study on academic cheating.
Says the organization's founder, John Cannell, prosecuting Mrs. Yeargin is "a way for administrators to protect themselves and look like they take cheating seriously, when in fact they don't take it seriously at all." 
Paul Sandifer, director of testing for the South Carolina department of education, says Mr. Cannell's allegations of cheating "are purely without foundation," and based on unfair inferences.
Partly because of worries about potential abuse, however, he says the state will begin keeping closer track of achievement-test preparation booklets next spring. 
South Carolina's reforms were designed for schools like Greenville High School.
Standing on a shaded hill in a run-down area of this old textile city, the school has educated many of South Carolina's best and brightest, including the state's last two governors, Nobel Prize winning physicist Charles Townes and actress Joanne Woodward.
But by the early 1980s, its glory had faded like the yellow bricks of its broad facade. 
"It was full of violence and gangs and kids cutting class," says Linda Ward, the school's principal. "Crime was awful, test scores were low, and there was no enrollment in honors programs." 
Mrs. Ward took over in 1986, becoming the school's seventh principal in 15 years.
Her immediate predecessor suffered a nervous breakdown.
Prior to his term, a teacher bled to death in the halls, stabbed by a student.
Academically, Mrs. Ward says, the school was having trouble serving in harmony its two disparate, and evenly split, student groups: a privileged white elite from old monied neighborhoods and blacks, many of them poor, from run-down, inner city neighborhoods. 
Mrs. Ward resolved to clean out "deadwood" in the school's faculty and restore safety, and she also had some new factors working in her behalf.
One was statewide school reform, which raised overall educational funding and ushered in a new public spirit for school betterment.
Another was Nancy Yeargin, who came to Greenville in 1985, full of the energy and ambitions that reformers wanted to reward. 
"Being a teacher just became my life," says the 37-year-old Mrs. Yeargin, a teacher for 12 years before her dismissal. "I loved the school, its history.
I even dreamt about school and new things to do with my students." 
While Mrs. Ward fired and restructured staff and struggled to improve curriculum, Mrs. Yeargin worked 14-hour days and fast became a student favorite.
In 1986-87 and 1987-88, she applied for and won bonus pay under the reform law.
Encouraged by Mrs. Ward, Mrs. Yeargin taught honor students in the state "teacher cadet" program, a reform creation designed to encourage good students to consider teaching as a career.
She won grant money for the school, advised cheerleaders, ran the pep club, proposed and taught a new "Cultural Literacy" class in Western Civilization and was chosen by the school PTA as "Teacher of the Year." 
"She was an inspirational lady; she had it all together," says Laura Dobson, a freshman at the University of South Carolina who had Mrs. Yeargin in the teacher-cadet class last year.
She says that because of Mrs. Yeargin she gave up ambitions in architecture and is studying to become a teacher.
Mary Beth Marchand, a Greenville 11th grader, also says Mrs. Yeargin inspired her to go into education. "She taught us more in Western Civilization than I've ever learned in other classes," says Kelli Green, a Greenville senior. 
In the classroom, students say, Mrs. Yeargin distinguished herself by varying teaching approaches -- forcing kids to pair up to complete classroom work or using college-bowl type competitions.
On weekends, she came to work to prepare study plans or sometimes, even to polish the furniture in her classroom. 
"She just never gave it up," says Mary Marchand, Mary Beth's mother. "You'd see her correcting homework in the stands at a football game." 
Some fellow teachers, however, viewed Mrs. Yeargin as cocky and too yielding to students.
Mrs. Ward says she often defended her to colleagues who called her a grandstander.
Pressures began to build.
Friends told her she was pushing too hard.
Because of deteriorating hearing, she told colleagues she feared she might not be able to teach much longer. 
Mrs. Yeargin's extra work was also helping her earn points in the state's incentive-bonus program.
But the most important source of points was student improvement on tests.
Huge gains by her students in 1987 and 1988 meant a total of $5,000 in bonuses over two years -- a meaningful addition to her annual salary of $23,000. 
Winning a bonus for a third year wasn't that important to her, Mrs. Yeargin insists.
But others at Greenville High say she was eager to win -- if not for money, then for pride and recognition.
Mary Elizabeth Ariail, another social-studies teacher, says she believed Mrs. Yeargin wanted to keep her standing high so she could get a new job that wouldn't demand good hearing.
Indeed, Mrs. Yeargin was interested in a possible job with the state teacher cadet program. 
Last March, after attending a teaching seminar in Washington, Mrs. Yeargin says she returned to Greenville two days before annual testing feeling that she hadn't prepared her low-ability geography students adequately.
When test booklets were passed out 48 hours ahead of time, she says she copied questions in the social studies section and gave the answers to students. 
Mrs. Yeargin admits she made a big mistake but insists her motives were correct. "I was trying to help kids in an unfair testing situation," she says. "Only five of the 40 questions were geography questions.
The rest were history, sociology, finance -- subjects they never had." 
Mrs. Yeargin says that she also wanted to help lift Greenville High School's overall test scores, usually near the bottom of 14 district high schools in rankings carried annually by local newspapers.
Mostly, she says, she wanted to prevent the damage to self-esteem that her low-ability students would suffer from doing badly on the test. "These kids broke my heart," she says. "A whole day goes by and no one even knows they're alive.
They desperately needed somebody who showed they cared for them, who loved them.
The last thing they needed was another drag-down blow." 
School officials and prosecutors say Mrs. Yeargin is lying.
They found students in an advanced class a year earlier who said she gave them similar help, although because the case wasn't tried in court, this evidence was never presented publicly. "That pretty much defeats any inkling that she was out to help the poor underprivileged child," says Joe Watson, the prosecutor in the case, who is also president of Greenville High School's alumni association.
Mrs. Yeargin concedes that she went over the questions in the earlier class, adding: "I wanted to help all" students. 
Mr. Watson says Mrs. Yeargin never complained to school officials that the standardized test was unfair. "Do I have much sympathy for her?" Mr. Watson asks. "Not really.
I believe in the system.
I believe you have to use the system to change it.
What she did was like taking the law into your own hands." 
Mrs. Ward says that when the cheating was discovered, she wanted to avoid the morale-damaging public disclosure that a trial would bring.
She says she offered Mrs. Yeargin a quiet resignation and thought she could help save her teaching certificate.
Mrs. Yeargin declined. "She said something like `You just want to make it easy for the school. ' I was dumbfounded," Mrs. Ward recalls. "It was like someone had turned a knife in me." 
To the astonishment and dismay of her superiors and legal authorities -- and perhaps as a measure of the unpopularity of standardized tests -- Mrs. Yeargin won widespread local support.
The school-board hearing at which she was dismissed was crowded with students, teachers and parents who came to testify on her behalf.
Supportive callers decried unfair testing, not Mrs. Yeargin, on a local radio talk show on which she appeared. 
The show didn't give the particulars of Mrs. Yeargin's offense, saying only that she helped students do better on the test. "The message to the board of education out of all this is we've got to take a serious look at how we're doing our curriculum and our testing policies in this state," said the talk-show host.
Editorials in the Greenville newspaper allowed that Mrs. Yeargin was wrong, but also said the case showed how testing was being overused. 
The radio show "enraged us," says Mrs. Ward.
Partly because of the show, Mr. Watson says, the district decided not to recommend Mrs. Yeargin for a first-time offenders program that could have expunged the charges and the conviction from her record.
And legal authorities cranked up an investigation worthy of a murder case.
Over 50 witnesses, mostly students, were interviewed. 
At Greenville High School, meanwhile, some students -- especially on the cheerleading squad -- were crushed. "It's hard to explain to a 17-year-old why someone they like had to go," says Mrs. Ward.
Soon, T-shirts appeared in the corridors that carried the school's familiar red-and-white GHS logo on the front.
On the back, the shirts read, "We have all the answers." Many colleagues are angry at Mrs. Yeargin. "She did a lot of harm," says Cathryn Rice, who had discovered the crib notes. "We work damn hard at what we do for damn little pay, and what she did cast unfair aspersions on all of us." 
But several teachers also say the incident casts doubt on the wisdom of evaluating teachers or schools by using standardized test scores.
Says Gayle Key, a mathematics teacher, "The incentive pay thing has opened up a can of worms.
There may be others doing what she did." 
Mrs. Yeargin says she pleaded guilty because she realized it would no longer be possible to win reinstatement, and because she was afraid of further charges.
Mrs. Ward, for one, was relieved.
Despite the strong evidence against Mrs. Yeargin, popular sentiment was so strong in her favor, Mrs. Ward says, that "I'm afraid a jury wouldn't have convicted her." 
Since chalk first touched slate, schoolchildren have wanted to know: What's on the test?
These days, students can often find the answer in test-coaching workbooks and worksheets their teachers give them in the weeks prior to taking standardized achievement tests. 
The mathematics section of the widely used California Achievement Test asks fifth graders: "What is another name for the Roman numeral IX?" It also asks them to add two-sevenths and three-sevenths. 
Worksheets in a test-practice kit called Learning Materials, sold to schools across the country by Macmillan/McGraw-Hill School Publishing Co., contain the same questions.
In many other instances, there is almost no difference between the real test and Learning Materials.
What's more, the test and Learning Materials are both produced by the same company, Macmillan/McGraw-Hill, a joint venture of McGraw-Hill Inc. and Macmillan's parent, Britain's Maxwell Communication Corp. 
Close parallels between tests and practice tests are common, some educators and researchers say.
Test-preparation booklets, software and worksheets are a booming publishing subindustry.
But some practice products are so similar to the tests themselves that critics say they represent a form of school-sponsored cheating. 
"If I took {these preparation booklets} into my classroom, I'd have a hard time justifying to my students and parents that it wasn't cheating," says John Kaminski, a Traverse City, Mich., teacher who has studied test coaching.
He and other critics say such coaching aids can defeat the purpose of standardized tests, which is to gauge learning progress. 
"It's as if France decided to give only French history questions to students in a European history class, and when everybody aces the test, they say their kids are good in European history," says John Cannell, an Albuquerque, N.M., psychiatrist and founder of an educational research organization, Friends for Education, which has studied standardized testing. 
Standardized achievement tests are given about 10 million times a year across the country to students generally from kindergarten through eighth grade.
The most widely used of these tests are Macmillan/McGraw's CAT and Comprehensive Test of Basic Skills; the Iowa Test of Basic Skills, by Houghton Mifflin Co.; and Harcourt Brace Jovanovich Inc. 's Metropolitan Achievement Test and Stanford Achievement Test. 
Sales figures of the test-prep materials aren't known, but their reach into schools is significant.
In Arizona, California, Florida, Louisiana, Maryland, New Jersey, South Carolina and Texas, educators say they are common classroom tools. 
Macmillan/McGraw says "well over 10 million" of its Scoring High test-preparation books have been sold since their introduction 10 years ago, with most sales in the last five years.
About 20,000 sets of Learning Materials teachers' binders have also been sold in the past four years.
The materials in each set reach about 90 students.
Scoring High and Learning Materials are the best-selling preparation tests. 
Michael Kean, director of marketing for CTB Macmillan/McGraw, the Macmillan/McGraw division that publishes Learning Materials, says it isn't aimed at improving test scores.
He also asserted that exact questions weren't replicated.
When referred to the questions that matched, he said it was coincidental. 
Mr. Kaminski, the schoolteacher, and William Mehrens, a Michigan State University education professor, concluded in a study last June that CAT test versions of Scoring High and Learning Materials shouldn't be used in the classroom because of their similarity to the actual test.
They devised a 69-point scale -- awarding one point for each subskill measured on the CAT test -- to rate the closeness of test preparatives to the fifth-grade CAT. 
Because many of these subskills -- the symmetry of geometrical figures, metric measurement of volume, or pie and bar graphs, for example -- are only a small part of the total fifth-grade curriculum, Mr. Kaminski says, the preparation kits wouldn't replicate too many, if their real intent was general instruction or even general familiarization with test procedures.
But Learning Materials matched on 66.5 of 69 subskills.
Scoring High matched on 64.5. 
In CAT sections where students' knowledge of two-letter consonant sounds is tested, the authors noted that Scoring High concentrated on the same sounds that the test does -- to the exclusion of other sounds that fifth graders should know. 
Learning Materials for the fifth-grade contains at least a dozen examples of exact matches or close parallels to test items. 
Rick Brownell, senior editor of Scoring High, says that Messrs.
Kaminski and Mehrens are ignoring "the need students have for becoming familiar with tests and testing format." He said authors of Scoring High "scrupulously avoid" replicating exact questions, but he doesn't deny that some items are similar. 
When Scoring High first came out in 1979, it was a publication of Random House.
McGraw-Hill was outraged.
In a 1985 advisory to educators, McGraw-Hill said Scoring High shouldn't be used because it represented a "parallel form" of the CAT and CTBS tests.
But in 1988, McGraw-Hill purchased the Random House unit that publishes Scoring High, which later became part of Macmillan/McGraw.
Messrs.
Brownell and Kean say they are unaware of any efforts by McGraw-Hill to modify or discontinue Scoring High. 
Alleghany Corp. said it completed the acquisition of Sacramento Savings & Loan Association from the H.N. & Frances C. Berger Foundation for $150 million. 
The Sacramento-based S&L, which has 44 branch offices in north central California, had assets of $2.4 billion at the end of September.
New York-based Alleghany is an insurance and financial services concern.
The purchase price includes two ancillary companies. 
The Department of Health and Human Services plans to extend its moratorium on federal funding of research involving fetal-tissue transplants. 
Medical researchers believe the transplantation of small amounts of fetal tissue into humans could help treat juvenile diabetes and such degenerative diseases as Alzheimer's, Parkinson's and Huntington's.
But anti-abortionists oppose such research because they worry that the development of therapies using fetal-tissue transplants could lead to an increase in abortions. 
James Mason, assistant secretary for health, said the ban on federal funding of fetal-tissue transplant research "should be continued indefinitely." He said the ban won't stop privately funded tissue-transplant research or federally funded fetal-tissue research that doesn't involve transplants. 
Department officials say that HHS Secretary Louis Sullivan will support Dr. Mason's ruling, which will be issued soon in the form of a letter to the acting director of the National Institutes of Health.
Both Dr. Mason and Dr. Sullivan oppose federal funding for abortion, as does President Bush, except in cases where a woman's life is threatened. 
The controversy began in 1987 when the National Institutes of Health, aware of the policy implications of its research, asked for an HHS review of its plan to implant fetal tissue into the brain of a patient suffering from Parkinson's disease.
The department placed a moratorium on the research, pending a review of scientific, legal and ethical issues. 
A majority of an NIH-appointed panel recommended late last year that the research continue under carefully controlled conditions, but the issue became embroiled in politics as anti-abortion groups continued to oppose federal funding.
The dispute has hampered the administration's efforts to recruit prominent doctors to fill prestigious posts at the helm of the NIH and the Centers for Disease Control. 
Several candidates have withdrawn their names from consideration after administration officials asked them for their views on abortion and fetal-tissue transplants.
Antonio Novello, whom Mr. Bush nominated to serve as surgeon general, reportedly has assured the administration that she opposes abortion.
Dr. Novello is deputy director of the National Institute of Child Health and Human Development. 
Some researchers have charged that the administration is imposing new ideological tests for top scientific posts.
Earlier this week, Dr. Sullivan tried to defuse these charges by stressing that candidates to head the NIH and the CDC will be judged by "standards of scientific and administrative excellence," not politics. 
But the administration's handling of the fetal-tissue transplant issue disturbs many scientists. "When scientific progress moves into uncharted ground, there has to be a role for society to make judgments about its applications," says Myron Genel, associate dean of the Yale Medical School. "The disturbing thing about this abortion issue is that the debate has become polarized, so that no mechanism exists" for finding a middle ground. 
Yale is one of the few medical institutions conducting privately funded research on fetal-tissue transplants.
But Dr. Genel warns that Dr. Mason's ruling may discourage private funding. "The unavailability of federal funds, and the climate in which the decision was made, certainly don't provide any incentive for one of the more visible foundations to provide support," he said. 
Despite the flap over transplants, federal funding of research involving fetal tissues will continue on a number of fronts. "Such research may ultimately result in the ability to regenerate damaged tissues or to turn off genes that cause cancer" or to regulate genes that cause Down's syndrome, the leading cause of mental retardation, according to an NIH summary.
The NIH currently spends about $8 million annually on fetal-tissue research out of a total research budget of $8 billion. 
Rekindled hope that two New England states will allow broader interstate banking boosted Nasdaq's bank stocks, but the over-the-counter market was up only slightly in lackluster trading. 
The Nasdaq composite index added 1.01 to 456.64 on paltry volume of 118.6 million shares.
In terms of volume, it was an inauspicious beginning for November.
Yesterday's share turnover was well below the year's daily average of 133.8 million.
In October, the busiest month of the year so far, daily volume averaged roughly 145 million shares. 
The Nasdaq 100 index of the biggest nonfinancial stocks gained 1.39 to 446.62.
The index of the 100 largest Nasdaq financial stocks rose modestly as well, gaining 1.28 to 449.04.
But the broader Nasdaq bank index, which tracks thrift issues, jumped 3.23 to 436.01. 
The bank stocks got a boost when Connecticut Bank & Trust and Bank of New England said they no longer oppose pending legislation that would permit banks from other regions to merge with Connecticut and Massachusetts banks.
The two banks merged in 1985.
Bank of New England's shares are traded on the New York Stock Exchange. 
The stocks of banking concerns based in Massachusetts weren't helped much by the announcement, traders said, because many of those concerns have financial problems tied to their real-estate loan portfolios, making them unattractive takeover targets. 
But speculators, anticipating that Connecticut will approve a law permitting such interstate banking soon, immediately bid up shares of Connecticut banks on the news. "A lot of the stocks that have been under water finally saw a reason to uptick," said George Jennison, head trader of banking issues in Shearson Lehman Hutton's OTC department. 
The biggest beneficiary was Northeast Bancorp, which surged 7 3/4 to 69.
The Stamford, Conn., concern has agreed to a buy-out by Bank of New York in a transaction with an indicated value of about $100 a share that expires next August.
Ed Macheski, a Wilton, Conn., money manager who follows bank stocks, said the announcement effectively gives the deal "the green light." 
Mr. Jennison said Northeast Bancorp also fared well because takeover stocks have returned to favor among investors.
Another OTC bank stock involved in a buy-out deal, First Constitution Financial, was higher.
It rose 7/8 to 18 1/4.
First Constitution has signed a merger agreement with WFRR L.P. and GHKM Corp., under which all of its common shares will be acquired for $25 each, or $273.5 million. 
Among other Connecticut banks whose shares trade in the OTC market, Society for Savings Bancorp, based in Hartford, saw its stock rise 1 3/4 to 18 1/4.
Centerbank added 5/8 to 8 3/4; shares of NESB, a New London-based bank holding company, rose 5/8 to 5 7/8. 
Among other banking issues, Pennview Savings Association leapt more than 44% with a gain of 6 5/8 to 21 5/8.
The Pennsylvania bank agreed to be acquired in a merger with Univest Corp. of Pennsylvania for $25.50 a share.
Valley Federal Savings & Loan, a California thrift issue, gained 1 to 4 1/4 after reporting a third-quarter loss of $70.7 million after an $89.9 million pretax charge mostly related to its mobile home financing unit. 
Dan E. Nelms, Valley Federal's president and chief executive officer, said the one-time charge substantially eliminates future losses associated with the unit.
He said the company's core business remains strong.
He also said that after the charges, and "assuming no dramatic fluctuation in interest rates, the company expects to achieve near-record earnings in 1990." 
Weisfield's surged 6 3/4 to 55 1/2 and Ratners Group's American depositary receipts, or ADRs, gained 5/8 to 12 1/4.
The two concerns said they entered into a definitive merger agreement under which Ratners will begin a tender offer for all of Weisfield's common shares for $57.50 each. 
Also on the takeover front, Jaguar's ADRs rose 1/4 to 13 7/8 on turnover of 4.4 million.
Since the British auto maker became a takeover target last month, its ADRs have jumped about 78%. 
After troubled Heritage Media proposed acquiring POP Radio in a stock swap, POP Radio's shares tumbled 4 to 14 3/4.
Heritage Media, which already owns about 51% of POP Radio, proposed paying POP Radio shareholders with shares of a new class of Heritage Media preferred stock that would be convertible into four shares of Heritage Media's common. 
Rally's lost 1 3/4 to 21 3/4.
The restaurant operator said it has redeemed its rights issued Monday under its shareholder rights plan. 
The fast-food company said its decision was based on discussions with a shareholder group, Giant Group Ltd., "in an effort to resolve certain disputes with the company." 
Giant Group is led by three Rally's directors, Burt Sugarman, James M. Trotter III and William E. Trotter II, who earlier this month indicated they had a 42.5% stake in Rally's and planned to seek a majority of seats on Rally's nine-member board. 
SCI Systems slipped 7/8 to 10 on volume of 858,000 shares.
The Huntsville, Ala., electronic products maker said it expects to post a "significant" loss for its fiscal first quarter ended Sept. 30.
In the year-earlier period, SCI had net income of $4.8 million, or 23 cents a share, on revenue of $225.6 million. 
The Internal Revenue Service has threatened criminal sanctions against lawyers who fail to report detailed information about clients who pay them more than $10,000 in cash. 
The warnings, issued to at least 100 criminal defense attorneys in several major cities in the last week, have led to an outcry by members of the organized bar, who claim the information is protected by attorney-client privilege. 
The IRS warnings stem from a 1984 law that requires anyone who receives more than $10,000 in cash from a client or customer in one or more related transactions "in the course of trade or business" to report the payment on a document known as Form 8300.
The form asks for such details as the client's name, Social Security number, passport number and details about the services provided for the payment. 
Failure to complete the form had been punishable as a misdemeanor until last November, when Congress determined that the crime was a felony punishable by up to 10 years in prison. 
Attorneys have argued since 1985, when the law took effect, that they cannot provide information about clients who don't wish their identities to be known.
Many attorneys have returned incomplete forms to the IRS in recent years, citing attorney-client privilege.
Until last week, the IRS rarely acted on the incomplete forms. 
"This form forces a lawyer to become, in effect, a witness against his client," said Neal R. Sonnett, president of the National Association of Criminal Defense Lawyers. "The IRS is asking lawyers to red-flag a criminal problem to the government," added Mr. Sonnett, a Miami lawyer who has heard from dozens of attorneys who received letters in recent days and has himself received the computer-generated IRS forms sent by certified mail. 
Mr. Sonnett said that clients who pay cash may include alleged drug dealers who don't have domestic bank accounts.
These individuals may not necessarily be under investigation when they hire lawyers.
Mr. Sonnett said there also may be other circumstances under which individuals wouldn't want the government to know they had retained criminal defense lawyers.
Filling out detailed forms about these individuals would tip the IRS off and spark action against the clients, he said.
The defense lawyers' group formed a task force this week, chaired by New York attorney Gerald Lefcourt, to deal with the matter. 
The American Bar Association's House of Delegates passed a resolution in 1985 condemning the IRS reporting requirement.
Michael Ross, a New York lawyer who heads the ABA's grand jury committee, said that lawyers are prohibited by the ABA's code of ethics from disclosing information about a client except where a court orders it or to prevent the client from committing a criminal act that could result in death. 
Mr. Ross said he met with officials of the IRS and the Justice Department, which would bring any enforcement actions against taxpayers, to discuss the issue last May.
At that meeting, he said, the Justice Department assured him that enforcement procedures wouldn't be threatened against attorneys without further review and advance notice.
Mr. Ross said IRS officials opposed the Justice Department's moderate stance on the matter. 
But in the letters sent in recent days, Christopher J. Lezovich of the IRS computing center in Detroit, told attorneys that "failing to voluntarily submit the requested information could result in summons enforcement action being initiated." In some cases, the IRS asked for information dating back to forms it received in 1985. 
A spokesman for the IRS confirmed that "there has been correspondence mailed about incomplete 8300s," but he declined to say why the letters were sent to lawyers now.
Individuals familiar with the Justice Department's policy said that Justice officials hadn't any knowledge of the IRS's actions in the last week. 
Lawyers worry that if they provide information about clients, that data could quickly end up in the hands of prosecutors.
Prosecutors need court permission to obtain the tax returns of an individual or a business.
But they have obtained 8300 forms without court permission and used the information to help develop criminal cases. 
Some criminal lawyers speculated that the IRS was sending the letters to test the issue.
In a number of recent cases, federal courts have refused to recognize attorneys' assertions that information relating to fees from clients should be confidential. 
THE WAR OVER FEDERAL JUDICIAL SALARIES takes a victim. 
Often, judges ease into more lucrative private practice with little fanfare, but not federal Judge Raul A. Ramirez in Sacramento, Calif.
On Tuesday, the judge called a news conference to say he was quitting effective Dec. 31 to join a San Francisco law firm.
The reason: the refusal of Congress to give federal judges a raise. 
"A couple of my law clerks were going to pass me in three or four years, and I was afraid I was going to have to ask them for a loan," the judge quipped in an interview.
Federal judges make $89,500 annually; in February, Congress rejected a bill that would have increased their pay by 50%. 
Judge Ramirez, 44, said it is unjust for judges to make what they do. "Judges are not getting what they deserve.
You look around at professional ballplayers or accountants . . . and nobody blinks an eye.
When you become a federal judge, all of a sudden you are relegated to a paltry sum." 
At his new job, as partner in charge of federal litigation in the Sacramento office of Orrick, Herrington & Sutcliffe, he will make out much better. 
The judge declined to discuss his salary in detail, but said: "I'm going to be a high-priced lawyer." 
DOONESBURY CREATOR'S UNION TROUBLES are no laughing matter. 
Cartoonist Garry Trudeau is suing the Writers Guild of America East for $11 million, alleging it mounted a "campaign to harass and punish" him for crossing a screenwriters' picket line. 
The dispute involves Darkhorse Productions Inc., a TV production company in which Mr. Trudeau is a co-owner.
Mr. Trudeau, a Writers Guild member, also was employed as a writer for Darkhorse, which was covered by a guild collective-bargaining agreement. 
The guild began a strike against the TV and movie industry in March 1988.
In his lawsuit, Mr. Trudeau says the strike illegally included Darkhorse, and the cartoonist refused to honor the strike against the company.
A spokesman for the guild said the union's lawyers are reviewing the suit.
He said disciplinary proceedings are confidential and declined to comment on whether any are being held against Mr. Trudeau. 
Mr. Trudeau's attorney, Norman K. Samnick, said the harassment consists mainly of the guild's year-long threats of disciplinary action.
Mr. Samnick said a guild disciplinary hearing is scheduled next Monday in New York.
Mr. Samnick, who will go before the disciplinary panel, said the proceedings are unfair and that any punishment from the guild would be unjustified. 
In addition to the damages, the suit seeks a court order preventing the guild from punishing or retaliating against Mr. Trudeau. 
ABORTION RULING UPHELD: A federal appeals court upheld a lower court ruling that the U.S. can bar the use of federal funds for family-planning programs that include abortion-related services.
A Department of Health and Human Services rule adopted in 1988 prohibits the use of so-called Title X funds for programs that assist a woman in obtaining an abortion, such as abortion counseling and referrals.
The rule also prohibits funding for activities that "encourage, promote or advocate abortion." Title X funds are the single largest source of federal funding for family-planning services, according to the opinion by the Second U.S. Circuit Court of Appeals in New York.
The panel ruled that the restrictions don't violate the freedom of speech of health care providers and that the limits on counseling services don't violate the rights of pregnant women. 
INQUIRY CLEARS TEXAS JUDGE of bias in comments on homosexual murder victims. 
Dallas District Judge Jack Hampton had sparked calls for a judicial inquiry with his remarks to the press last December, two weeks after sentencing an 18-year-old defendant to 30 years in state prison for killing two homosexual men in a city park.
The judge was quoted as referring to the victims as "queers" and saying they wouldn't have been killed "if they hadn't been cruising the streets picking up teenage boys." 
But Robert R. Murray, a special master appointed by the Texas Supreme Court, said Judge Hampton didn't breach any judicial standards of fairness, although he did violate the state's judicial code by commenting publicly on a pending case.
Observing that the judge "has never exhibited any bias or prejudice," Mr. Murray concluded that he "would be impartial in any case involving a homosexual or prostitute" as a victim.
Mr. Murray also said Judge Hampton's comments didn't discredit the judiciary or the administration of justice. 
The report is subject to review by the State Commission on Judicial Conduct, which is empowered to impose sanctions. 
GAF TRIAL goes to round three.
Attorneys in the third stock-manipulation trial of GAF Corp. began opening arguments yesterday in the Manhattan courtroom of U.S. District Judge Mary Johnson Lowe.
In an eight-count indictment, the government has charged GAF, a Wayne, N.J., specialty chemical maker, and its Vice Chairman James T. Sherwin with attempting to manipulate the common stock of Union Carbide Corp. in advance of GAF's planned sale of a large block of the stock in November 1986.
The first two GAF trials ended in mistrials earlier this year.
This trial is expected to last five weeks. 
SWITCHING TO THE DEFENSE: A former member of the prosecution team in the Iran/Contra affair joined the Chicago firm of Mayer, Brown & Platt.
Michael R. Bromwich, a member since January 1987 of the three-lawyer trial team in the prosecution of Oliver North, became a partner in the Washington, D.C., office of the 520-lawyer firm.
He will specialize in white-collar criminal defense work.
Mr. Bromwich, 35, also has served as deputy chief and chief of the narcotics unit for the U.S. attorney's office for the Southern District of New York, based in Manhattan. 
Cooper Tire & Rubber Co. said it has reached an agreement in principle to buy buildings and related property in Albany, Ga., from Bridgestone/Firestone Inc. Terms weren't disclosed. 
The tire maker said the buildings consist of 1.8 million square feet of office, manufacturing and warehousing space on 353 acres of land. 
Fujitsu Ltd. 's top executive took the unusual step of publicly apologizing for his company's making bids of just one yen for several local government projects, while computer rival NEC Corp. made a written apology for indulging in the same practice. 
Meanwhile, business and government leaders rebuked the computer makers, and fretted about the broader statement the companies' actions make about Japanese cutthroat pricing. 
Fujitsu said it bid the equivalent of less than a U.S. penny on three separate municipal contracts during the past two years.
The company also disclosed that during that period it offered 10,000 yen, or about $70, for another contract. 
But Fujitsu, Japan's No. 1 computer maker, isn't alone.
NEC, one of its largest domestic competitors, said it bid one yen in two separate public auctions since 1987.
In both cases, NEC lost the contract to Fujitsu, which made the same bid and won a tie-breaking lottery.
All the contracts were for computer-system-design contracts and involved no hardware or software. 
The Ministry of International Trade and Industry summoned executives from the companies to "make sure they understood" the concern about such practices, according to a government spokesman. "These cases lead to the loss of the firms' social and international credibility," a ministry statement said. 
Japan's Fair Trade Commission has said it is considering investigating the bids for possible antitrust-law violations. 
"We would like to apologize for having caused huge trouble," Fujitsu President Takuma Yamamoto, read from a prepared statement as he stood before a packed news conference at his company's downtown headquarters.
The bids, he added, were "contrary to common sense." 
NEC released a statement saying, "We feel sorry for having caused trouble to society," a form of apology common in Japan for companies caught in embarrassing situations. 
Japanese companies have long had a reputation for sacrificing short-term profits to make a sale that may have long-term benefits.
But the growing controversy comes as many practices historically accepted as normal here -- such as politicians accepting substantial gifts from businessmen or having extramarital affairs -- are coming under close ethical scrutiny. 
The fire is also fueled by growing international interest in Japanese behavior.
So far there have been no public overseas complaints about the issue.
But in one of the auctions in question, International Business Machines Corp. made a bid substantially higher than the Fujitsu offer, according to the municipality.
The low-ball bids touch on issues central to the increasingly tense trade debate. 
Foreigners complain that they have limited access to government procurement in Japan, in part because Japanese companies unfairly undercut them.
The U.S. government in recent years has accused Japanese companies of excessively slashing prices on semiconductors and supercomputers -- products Fujitsu and NEC make. 
Asked whether the bidding flap would hurt U.S.-Japan relations, Mr. Yamamoto said, "this will be a minus factor." 
The "one-yen" controversy first came to a head last week when the city of Hiroshima announced that Fujitsu won a contract to design a computer system to map its waterworks.
The city had expected to pay about 11 million yen ($77,000), but Fujitsu essentially offered to do it for free. 
Then Wednesday, Fujitsu said it made a similar bid to win a library contract in Nagano prefecture two weeks earlier.
It also said that in July, it bid 10,000 yen to design a system for the Saitama prefectural library, and two years ago, it bid one yen to plan the telecommunications system for Wakayama prefecture. 
The company said it has offered to withdraw its bids in Hiroshima and Nagano.
The municipalities said they haven't decided whether to try to force the company to go through with the contracts. 
Fujitsu and NEC said they were still investigating, and that knowledge of more such bids could emerge.
Mr. Yamamoto insisted that headquarters hadn't approved the bids, and that he didn't know about most of the cases until Wednesday. 
Other major Japanese computer companies contacted yesterday said they have never made such bids. 
"One yen is not ethical," Michio Sasaki, an official at Keidanren, the Japan Federation of Economic Organizations, said. "Profit may be low, but at least costs should be covered." 
PAPERS: Backe Group Inc. agreed to acquire Atlantic Publications Inc., which has 30 community papers and annual sales of $7 million.
Terms weren't disclosed.
Backe is a closely held media firm run by former CBS Inc. President John Backe. 
TV: Price Communications Corp. completed the sale of four of its TV stations to NTG Inc. for $120 million in cash and notes, retaining a 10% equity stake in the new concern.
NTG was formed by Osborn Communications Corp. and Desai Capital. 
Michaels Stores Inc., which owns and operates a chain of specialty retail stores, said October sales rose 14.6% to $32.8 million from $28.6 million a year earlier. 
Sales in stores open more than one year rose 3% to $29.3 million from $28.4 million. 
Furukawa Co. of Japan said it will acquire two construction machinery plants and a sales unit in France formerly belonging to Dresser Industries Inc. of the U.S. 
The company said it made the purchase in order to locally produce hydraulically operated shovels. 
Last October, the company also bought a wheel-loader manufacturing plant in Heidelberg, West Germany, from Dresser. 
Furukawa said the purchase of the French and German plants together will total about 40 billion yen ($280 million). 
Structural Dynamics Research Corp., which makes computer-aided engineering software, said it introduced new technology in mechanical design automation that will improve mechanical engineering productivity. 
@ Money Market Deposits-a 6.21% 
a-Average rate paid yesterday by 100 large banks and thrifts in the 10 largest metropolitan areas as compiled by Bank Rate Monitor. 
b-Current annual yield.
Guaranteed minimum 6%. 
LSI Logic Corp. reported a surprise $35.7 million third-quarter net loss, including a special restructuring charge that reflects a continuing industry-wide slowdown in semiconductor demand. 
In September, the custom-chip maker said excess capacity and lagging billings would result in an estimated $2 million to $3 million net loss for the third quarter.
But company officials said yesterday that they decided to take a $43 million pretax charge for the period to cover a restructuring of world-wide manufacturing operations, citing extended weakness in the market as well as a decision to switch to more economical production techniques. 
"Over the summer months, there has been a slowing in the rate of new orders from the computer sector, our primary market," said Wilfred J. Corrigan, chairman and chief executive officer. "In addition, recent industry forecasts for 1990 indicate a slow environment, at least until midyear." As a result, the company said it decided to phase out its oldest capacity and "make appropriate reductions" in operating expenses. 
The $35.7 million net loss equals 86 cents a share.
Not counting the extraordinary charge, the company said it would have had a net loss of $3.1 million, or seven cents a share.
A year earlier, it had profit of $7.5 million, or 18 cents a share.
Revenue rose 42% to $133.7 million from $94 million. 
The charge partly reflects a switch from older five-inch to more-efficient six-inch silicon wafers with which to fabricate chips.
Related to that decision, the company said it was converting its Santa Clara, Calif., factory to a research and development facility.
A spokesman declined to speculate about possible reductions in force. 
"This is a company that has invested in capacity additions more aggressively than any other company in the industry and now the industry is growing more slowly and they are suddenly poorly positioned," said Michael Stark, chip analyst at Robertson, Stephens & Co. "I think the stock is dead money for a while." Yesterday's announcement was made after markets closed. 
U.S. chip makers are facing continued slack demand following a traditionally slow summer.
Part of the problem is that chip buyers are keeping inventories low because of jitters about the course of the U.S. economy. 
INGERSOLL-RAND Co. (Woodcliff Lake, N.J.) -- William G. Kuhns, former chairman and chief executive officer of General Public Utilities Corp., was elected a director of this maker of industrial and construction equipment, increasing board membership to 10. 
The dollar posted gains against all major currencies yesterday, buoyed by persistent Japanese demand for U.S. bond issues. 
While market sentiment remains cautiously bearish on the dollar based on sluggish U.S. economic indicators, dealers note that Japanese demand has helped underpin the dollar against the yen and has kept the U.S. currency from plunging below key levels against the mark. 
At the same time, dealers said the U.S. unit has been locked into a relatively narrow range in recent weeks, in part because the hefty Japanese demand for dollars has been offset by the mark's strength, resulting in a stalemate. 
Jay Goldinger, with Capital Insight Inc., reasons that while the mark has posted significant gains against the yen as well -- the mark climbed to 77.70 yen from 77.56 yen late Tuesday in New York -- the strength of the U.S. bond market compared to its foreign counterparts has helped lure investors to dollar-denominated bonds, rather than mark bonds. 
"Dollar-yen {trade} is the driving force in the market," said Tom Trettien, a vice president with Banque Paribas in New York, "but I'm not convinced it will continue.
Who knows what will happen down the road, in three to six months, if foreign investment starts to erode?" 
In late New York trading yesterday, the dollar was quoted at 1.8500 marks, up from 1.8415 marks late Tuesday, and at 143.80 yen, up from 142.85 yen late Tuesday.
Sterling was quoted at $1.5755, down from $1.5805 late Tuesday. 
In Tokyo Thursday, the U.S. currency opened for trading at 143.93 yen, up from Wednesday's Tokyo close of 143.08 yen. 
Douglas Madison, a corporate trader with Bank of America in Los Angeles, traced the dollar's recent solid performance against the yen to purchases of securities by Japanese insurance companies and trust banks and the sense that another wave of investment is waiting in the wings. 
He contends that the perception in Japan of a vitriolic U.S. response to Sony Corp. 's announcement of its purchase of Columbia Pictures Entertainment Inc. has been temporarily mollified.
He cites the recent deal between the Mitsubishi Estate Co. and the Rockefeller Group, as well as the possible white knight role of an undisclosed Japanese company in the Georgia-Pacific Corp. takeover bid for Great Northern Nekoosa Corp. as evidence. 
The forthcoming maturity in November of a 10-year Japanese government yen-denominated bond issue valued at about $16 billion has prompted speculation in the market that investors redeeming the bonds will diversify into dollar-denominated instruments, according to Mr. Madison. 
It remains unclear whether the bond issue will be rolled over. 
Meanwhile, traders in Tokyo say that the prospect of lower U.S. interest rates has spurred dollar buying by Japanese institutions. 
They point out that these institutions want to lock in returns on high-yield U.S. Treasury debt and suggest demand for the U.S. unit will continue unabated until rates in the U.S. recede. 
The market again showed little interest in further evidence of a slowing U.S. economy, and traders note that the market in recent weeks has taken its cues more from Wall Street than U.S. economic indicators. 
Dealers said the dollar merely drifted lower following the release Wednesday of the U.S. purchasing managers' report.
The managers' index, which measures the health of the manufacturing sector, stood at 47.6% in October, above September's 46%, and also above average forecasts for the index of 45.3%. 
Some dealers said the dollar was pressured slightly because a number of market participants had boosted their expectations in the past day and were looking for an index above 50, which indicates an expanding manufacturing economy.
But most said the index had no more than a minimal effect on trade. 
On the Commodity Exchange in New York, gold for current delivery settled at $374.20 an ounce, down 50 cents.
Estimated volume was a moderate 3.5 million ounces. 
In early trading in Hong Kong Thursday, gold was quoted at $374.19 an ounce. 
"The Cosby Show" may have single-handedly turned around ratings at NBC since its debut in 1984, and the Huxtable family still keeps millions of viewers laughing Thursday night on the network. 
But some of the TV stations that bought "Cosby" reruns for record prices two years ago aren't laughing much these days.
The reruns have helped ratings at many of the 187 network affiliates and independent TV stations that air the shows.
But the ratings are considerably below expectations, and some stations say they may not buy new episodes when their current contracts expire. 
Meanwhile, stations are fuming because, many of them say, the show's distributor, Viacom Inc., is giving an ultimatum: Either sign new long-term commitments to buy future episodes or risk losing "Cosby" to a competitor.
At the same time, Viacom is trying to persuade stations to make commitments to "A Different World," a spin-off of "Cosby" whose reruns will become available in 1991. 
Viacom denies it's using pressure tactics. "We're willing to negotiate," says Dennis Gillespie, executive vice president of marketing. "We're offering this plan now because we feel it's the right time." 
But, says the general manager of a network affiliate in the Midwest, "I think if I tell them I need more time, they'll take `Cosby' across the street," 
Viacom's move comes as the syndication market is being flooded with situation comedies that are still running on the networks.
One station manager says he believes Viacom's move is a "pre-emptive strike" because the company is worried that "Cosby" ratings will continue to drop in syndication over the next few years. "Cosby" is down a full ratings point in the week of Oct. 2-8 over the same week a year ago, according to A.C. Nielsen Co. 
Mr. Gillespie at Viacom says the ratings are rising. 
And executives at stations in such major markets as Washington; Providence, R.I.; Cleveland; Raleigh, N.C.; Minneapolis, and Louisville, Ky., say they may very well not renew "Cosby." Dick Lobo, the general manager of WTVJ, the NBC-owned station in Miami, for example, says the show has "been a major disappointment to us." "At the prices we were charged, there should have been some return for the dollar.
There wasn't." 
Neil Kuvin, the general manager of WHAS, the CBS affiliate in Louisville, says "Cosby" gets the station's highest ratings and he's "pleased." But he adds, "I feel pressured, disappointed, uncomfortable and, frankly, quite angry with Viacom." 
The Life Insurance Co. of Georgia has officially opened an office in Taipei. 
David Wu, the company's representative in Taiwan, said Atlanta-based Life of Georgia will sell conventional life-insurance products. 
Life of Georgia is part of the Nationale Nederlanden Group, based in the Netherlands. 
In this era of frantic competition for ad dollars, a lot of revenue-desperate magazines are getting pretty cozy with advertisers -- fawning over them in articles and offering pages of advertorial space.
So can a magazine survive by downright thumbing its nose at major advertisers? 
Garbage magazine, billed as "The Practical Journal for the Environment," is about to find out. 
Founded by Brooklyn, N.Y., publishing entrepreneur Patricia Poore, Garbage made its debut this fall with the promise to give consumers the straight scoop on the U.S. waste crisis.
The magazine combines how-to pieces on topics like backyard composting, explanatory essays on such things as what happens after you flush your toilet, and hard-hitting pieces on alleged environmental offenders. 
Garbage editors have dumped considerable energy into a whirling rampage through supermarket aisles in a bid to identify corporate America's good guys and bad boys.
In one feature, called "In the Dumpster," editors point out a product they deem to be a particularly bad offender.
From an advertising standpoint, the problem is these offenders are likely to be some of the same folks that are major magazine advertisers these days. 
With only two issues under its belt, Garbage has alienated some would-be advertisers and raised the ire of others.
Campbell Soup, for one, is furious its Souper Combo microwave product was chastised in the premiere "In the Dumpster" column.
The magazine's editors ran a giant diagram of the product with arrows pointing to the packaging's polystyrene foam, polyproplene and polyester film -- all plastic items they say are non-biodegradable. "It's precisely the kind of product that's created the municipal landfill monster," the editors wrote. 
"I think that this magazine is not only called Garbage, but it is practicing journalistic garbage," fumes a spokesman for Campbell Soup.
He says Campbell wasn't even contacted by the magazine for the opportunity to comment.
Modifications had been made to the Souper Combo product at the time the issue was printed, he says, making it less an offender than was portrayed.
He admits, though, it isn't one of Campbell Soup's better products in terms of recyclability. 
Campbell Soup, not surprisingly, doesn't have any plans to advertise in the magazine, according to its spokesman. 
Some media experts question whether a young magazine can risk turning off Madison Avenue's big spenders. "You really need the Campbell Soups of the world to be interested in your magazine if you're going to make a run of it," says Mike White, senior vice president and media director at DDB Needham, Chicago. "The economics of magazine publishing pretty much require that you have a pretty solid base" of big-time ad spenders, he adds. 
The first two issues featured ads from only a handful of big advertisers, including General Electric and Adolph Coors, but the majority were from companies like Waste Management Inc. and Bumkins International, firms that don't spend much money advertising and can't be relied on to support a magazine over the long haul. 
A Waste Management spokeswoman says its ad in the premiere issue was a one-time purchase, and it doesn't have any plans to advertise in future issues. "We don't spend much on print advertising," she says. 
But Ms. Poore, the magazine's editor and publisher, contends Garbage can survive, at least initially, on subscription revenues.
Individual copies of the magazine sell for $2.95 and yearly subscriptions cost $21. (It is, of course, printed on recycled paper.) 
According to Ms. Poore, Old-House Journal Corp., her publishing company, printed and sold all 126,000 copies of the premiere issue.
The first and second issues sold out on newsstands, she says, and the magazine has orders for 93,000 subscriptions. 
Asked whether potential advertisers will be scared away by the magazine's direct policy, Ms. Poore replies: "I don't know and I don't care.
I'm not saying advertising revenue isn't important," she says, "but I couldn't sleep at night" if the magazine bowed to a company because they once took out an ad. 
Ad Notes. . . . 
INTERPUBLIC ON TV: Interpublic Group said its television programming operations -- which it expanded earlier this year -- agreed to supply more than 4,000 hours of original programming across Europe in 1990.
It said the programs, largely game shows, will be provided by its E.C. Television unit along with Fremantle International, a producer and distributor of game shows of which it recently bought 49%.
It said that volume makes it the largest supplier of original TV programming in Europe.
Interpublic is providing the programming in return for advertising time, which it said will be valued at more than $75 million in 1990 and $150 million in 1991.
It plans to sell the ad time to its clients at a discount.
NEW ACCOUNT: CoreStates Financial Corp., Philadelphia, named Earle Palmer Brown & Spiro, Philadelphia, as agency of record for its $5 million account.
The business had been handled by VanSant Dugdale, Baltimore. 
AT&T FAX: American Telephone & Telegraph's General Business Systems division, New York, awarded the ad account for its Fax product line to Ogilvy & Mather, New York, a WPP Group agency.
Billings weren't disclosed for the small account, which had been serviced at Young & Rubicam, New York. 
FIRST CAMPAIGN: Enterprise Rent-A-Car Inc. breaks its first national ad campaign this week.
The St. Louis firm specializes in replacement-car rentals, those provided by insurance companies for cars damaged in accidents.
Developed by Avrett, Free & Ginsberg, New York, the $6 million campaign pitches Enterprise's consumer-driven service and its free pick-up and drop-off service. 
LANDOR ASSOCIATES: Young & Rubicam said it completed its acquisition of Landor Associates, a San Francisco identity-management firm. 
ACQUISITION: Ketchum Communications, Pittsburgh, acquired Braun & Co., a Los Angeles investor-relations and marketing-communications firm.
Terms weren't disclosed. 
Sea Containers Ltd. said it might increase the price of its $70-a-share buy-back plan if pressed by Temple Holdings Ltd., which made an earlier tender offer for Sea Containers. 
Sea Containers, a Hamilton, Bermuda-based shipping concern, said Tuesday that it would sell $1.1 billion of assets and use some of the proceeds to buy about 50% of its common shares for $70 apiece. 
The move is designed to ward off a hostile takeover attempt by two European shipping concerns, Stena Holding AG and Tiphook PLC.
In May, the two companies, through their jointly owned holding company, Temple, offered $50 a share, or $777 million, for Sea Containers.
In August, Temple sweetened the offer to $63 a share, or $963 million. 
Yesterday, Sea Containers' chief executive officer, James Sherwood, said in an interview that, under the asset-sale plan, Sea Containers would end up with a cash surplus of approximately $620 million.
About $490 million of that would be allocated to the buy-back, leaving about $130 million, he said. 
That $130 million, Mr. Sherwood said, "gives us some flexibility in case Temple raises its bid.
We are able to increase our price above the $70 level if necessary." He declined to say, however, how much Sea Containers might raise its price. 
Mr. Sherwood speculated that the leeway that Sea Containers has means that Temple would have to "substantially increase their bid if they're going to top us." 
Temple, however, harshly criticized Sea Containers' plan yesterday, characterizing it as a "highly conditional device designed to entrench management, confuse shareholders and prevent them from accepting our superior cash offer." 
A spokesman for Temple estimated that Sea Containers' plan -- if all the asset sales materialize -- would result in shareholders receiving only $36 to $45 a share in cash.
The lower figures, the spokesman said, would stem from preferred shares being converted to common stock and the possibility that Sea Containers' subsidiaries might be required to place their shares in the open market. 
Temple added that Sea Containers is still mired in legal problems in Bermuda, where the Supreme Court has temporarily barred Sea Containers from buying back its own stock in a case brought by Stena and Tiphook. {The court has indicated it will rule on the case by the end of the month.} 
Temple also said Sea Containers' plan raises "numerous legal, regulatory, financial and fairness issues," but didn't elaborate. 
Mr. Sherwood said reaction to Sea Containers' proposal has been "very positive." In New York Stock Exchange composite trading yesterday, Sea Containers closed at $62.625, up 62.5 cents. 
The Transportation Department, responding to pressure from safety advocates, took further steps to impose on light trucks and vans the safety requirements used for automobiles. 
The department proposed requiring stronger roofs for light trucks and minivans, beginning with 1992 models.
It also issued a final rule requiring auto makers to equip light trucks and minivans with lap-shoulder belts for rear seats beginning in the 1992 model year.
Such belts already are required for the vehicles' front seats. 
"Today's action," Transportation Secretary Samuel Skinner said, "represents another milestone in the ongoing program to promote vehicle occupant safety in light trucks and minivans through its extension of passenger car standards." 
In September, the department had said it will require trucks and minivans to be equipped with the same front-seat headrests that have long been required on passenger cars. 
The Big Three auto makers said the rule changes weren't surprising because Bush administration officials have long said they planned to impose car safety standards on light trucks and vans. 
Safety advocates, including some members of Congress, have been urging the department for years to extend car-safety requirements to light trucks and vans, which now account for almost one-third of all vehicle sales in the U.S.
They say that many vehicles classed as commercial light trucks actually carry more people than cargo and therefore should have the same safety features as cars. 
They didn't have much luck during the Reagan administration. "But now, there seems to be a fairly systematic effort to address the problem," said Chuck Hurley, vice president of communications for the Insurance Institute for Highway Safety. "We're in a very different regulatory environment." Sen. John Danforth (R., Mo.) praised the department's actions, noting that rollover crashes account for almost half of all light-truck deaths. "We could prevent many of these fatalities with minimum roof-crush standards," he said. 
Sen. Danforth and others also want the department to require additional safety equipment in light trucks and minivans, including air bags or automatic seat belts in front seats and improved side-crash protection. 
The department's roof-crush proposal would apply to vehicles weighing 10,000 pounds or less.
The roofs would be required to withstand a force of 1.5 times the unloaded weight of the vehicle.
During the test, the roof couldn't be depressed more than five inches. 
In Detroit, a Chrysler Corp. official said the company currently has no rear-seat lap and shoulder belts in its light trucks, but plans to begin phasing them in by the end of the 1990 model year.
He said Chrysler fully expects to have them installed across its light-truck line by the Sept. 1, 1991, deadline.
Chrysler said its trucks and vans already meet the roof-crush resistance standard for cars. 
John Leinonen, executive engineer of Ford Motor Co. 's auto-safety office, said Ford trucks have met car standards for roof-crush resistance since 1982.
Ford began installing the rear-seat belts in trucks with its F-series Crew Cab pickups in the 1989 model year.
The new Explorer sport-utility vehicle, set for introduction next spring, will also have the rear-seat belts.
Mr. Leinonen said he expects Ford to meet the deadline easily. 
Consolidated Rail Corp. said it would spend more than $30 million on 1,000 enclosed railcars for transporting autos. 
The multilevel railcars, scheduled for delivery in 1990, will be made by Thrall Manufacturing Co., a Chicago Heights, Ill., division of closely held Duchossois Industries Inc., Elmhurst, Ill.
This year, the railroad holding company acquired 850 such railcars. 
Sir Peter Walters, 58-year-old chairman of British Petroleum Co. until next March, joins the board of this cement products company on Dec. 1.
Sir Peter will succeed Sir John Milne, 65, who retires as Blue Circle nonexecutive chairman on June 1. 
Bank of New England Corp. said it has held talks with potential merger partners outside New England, although it added that nothing is imminent and it hasn't received any formal offers. 
The discussions were disclosed as the bank holding company said that it has dropped its longstanding opposition to full interstate banking bills in Connecticut and in Massachusetts.
Later yesterday, a Massachusetts senate committee approved a bill to allow national interstate banking by banks in the state beginning in 1991. 
Currently, both Massachusetts and Connecticut, where most of Bank of New England's operations are, allow interstate banking only within New England. 
Richard Driscoll, vice chairman of Bank of New England, told the Dow Jones Professional Investor Report, "Certainly, there are those outside the region who think of us prospectively as a good partner.
We have, and I'm sure others have, considered what our options are, and we've had conversations with people who in the future might prove to be interesting partners." He added, "There's nothing very hot." 
Mr. Driscoll didn't elaborate about who the potential partners were or when the talks were held.
A bank spokeswoman also declined to comment on any merger-related matters, but said the company decided to drop its opposition to the interstate banking legislation because "prevailing sentiment is in favor of passage." 
Bank of New England has been hit hard by the region's real-estate slump, with its net income declining 42% to $121.6 million, or 61 cents a share, in the first nine months of 1989 from the year-earlier period.
The company recently said it would sell some operations and lay off 4% of its work force, altogether reducing employment to less than 16,000 from about 18,000.
It recently signed a preliminary agreement to negotiate exclusively with the Bank of Tokyo Ltd. for the sale of part of its leasing business to the Japanese bank. 
GOODY PRODUCTS Inc. cut its quarterly dividend to five cents a share from 11.5 cents a share.
The reduced dividend is payable Jan. 2 to stock of record Dec. 15.
The Kearny, N.J.-based maker of hair accessories and other cosmetic products said it cut the dividend due to its third-quarter loss of $992,000, or 15 cents a share.
In the year-ago quarter, the company reported net income of $1.9 million, or 29 cents a share.
The company also adopted an anti-takeover plan. 
Michael Henderson, 51-year-old group chief executive of this U.K. metals and industrial materials maker, will become chairman in May, succeeding Ian Butler, 64, who is retiring.
Mr. Butler will remain on the board as a nonexecutive director. 
Rally's Inc. said it has redeemed its rights outstanding issued Monday in its shareholder rights plan.
The company said holders of stock of record Nov. 10 will receive 1/10th of one cent a share as the redemption payment. 
The fast-food company said its decision was based upon discussions with a shareholder group, Giant Group Ltd., "in an effort to resolve certain disputes with the company." 
Giant Group is led by three Rally's directors, Burt Sugarman, James M. Trotter III and William E. Trotter II, who last month indicated they hold a 42.5% stake in Rally's and plan to seek a majority of seats on Rally's nine-member board. 
When Warren Winiarski, proprietor of Stag's Leap Wine Cellars in Napa Valley, announced a $75 price tag for his 1985 Cask 23 Cabernet this fall, few wine shops and restaurants around the country balked. "This is the peak of my wine-making experience," Mr. Winiarski declared when he introduced the wine at a dinner in New York, "and I wanted to single it out as such." 
It is in my estimation the best wine Stag's Leap has produced, and with fewer than 700 cases available, it is sure to sell quickly.
The price is a new high for California Cabernet Sauvignon, but it is not the highest.
Diamond Creek 1985 Lake Vineyard Cabernet weighed in this fall with a sticker price of $100 a bottle. 
One of the fastest growing segments of the wine market is the category of superpremiums -- wines limited in production, of exceptional quality (or so perceived, at any rate), and with exceedingly high prices.
For years, this group included a stable of classics -- Bordeaux first growths (Lafite-Rothschild, Latour, Haut-Brion, Petrus), Grand Cru Burgundies (Romanee-Conti and La Tache) deluxe Champagnes (Dom Perignon or Roederer Cristal), rarefied sweet wines (Chateau Yquem or Trockenbeerenauslesen Rieslings from Germany, and Biondi-Santi Brunello Riserva from Tuscany).
These first magnitude wines ranged in price from $40 to $125 a bottle. 
In the last year or so, however, this exclusive club has taken in a host of flashy new members.
The classics have zoomed in price to meet the competition, and it almost seems that there's a race on to come up with the priciest single bottle, among current releases from every major wine region on the globe. 
France can boast the lion's share of high-priced bottles.
Bordeaux's first growths from 1985 and 1986 are $60 to $80 each (except for the smallest in terms of production, Chateau Petrus, which costs around $250!).
These prices seem rather modest, however, in light of other French wines from current vintages.
Chateau Yquem, the leading Sauternes, now goes for well over $100 a bottle for a lighter vintage like 1984; the spectacularly rich 1983 runs $179. 
In Champagne, some of the prestige cuvees are inching toward $100 a bottle.
The first Champagne to crack that price barrier was the 1979 Salon de Mesnil Blanc de Blancs.
The '82 Salon is $115.
Roederer Cristal at $90 a bottle sells out around the country and Taittinger's Comtes de Champagne Blanc de Blancs is encroaching upon that level.
The great reds of the Rhone Valley have soared in price as well.
E. Guigal's 1982 Cote Rotie La Landonne, for example, is $120. 
None of France's wine regions can steal a march on Burgundy, however.
The six wines of the Domaine de la Romanee-Conti, 72 of the most precious acres of vineyard anywhere in the world, have commanded three-digit price tags for several years now.
With the 1985 vintage, they soared higher: La Tache, $195; Richebourg, $180; Romanee-Conti, $225.
Another small Burgundy estate, Coche-Dury, has just offered its 1987 Corton-Charlemagne for $155. 
From Italy there is Angelo Gaja Barbaresco at $125 a bottle, Piero Antinori's La Solaia, a $90 Cabernet from Tuscany, and Biondi-Santi Brunello at $98.
Spain's Vega Secilia Unico 1979 (released only in its 10th year) is $70, as is Australia's Grange Hermitage 1982. 
"There are certain cult wines that can command these higher prices," says Larry Shapiro of Marty's, one of the largest wine shops in Dallas. "What's different is that it is happening with young wines just coming out.
We're seeing it partly because older vintages are growing more scarce." 
Wine auctions have almost exhausted the limited supply of those wines, Mr. Shapiro continued: "We've seen a dramatic decrease in demand for wines from the '40s and '50s, which go for $300 to $400 a bottle.
Some of the newer wines, even at $90 to $100 a bottle or so, almost offer a bargain." 
Take Lake Vineyard Cabernet from Diamond Creek.
It's made only in years when the grapes ripen perfectly (the last was 1979) and comes from a single acre of grapes that yielded a mere 75 cases in 1987.
Owner Al Brownstein originally planned to sell it for $60 a bottle, but when a retailer in Southern California asked, "Is that wholesale or retail?" he re-thought the matter.
Offering the wine at roughly $65 a bottle wholesale ($100 retail), he sent merchants around the country a form asking them to check one of three answers: 1) no, the wine is too high (2 responses); 2) yes, it's high but I'll take it (2 responses); 3) I'll take all I can get (58 responses).
The wine was shipped in six-bottle cases instead of the usual 12, but even at that it was spread thin, going to 62 retailers in 28 states. 
"We thought it was awfully expensive," said Sterling Pratt, wine director at Schaefer's in Skokie, Ill., one of the top stores in suburban Chicago, "but there are people out there with very different opinions of value.
We got our two six-packs -- and they're gone." 
Mr. Pratt remarked that he thinks steeper prices have come about because producers don't like to see a hit wine dramatically increase in price later on.
Even if there is consumer resistance at first, a wine that wins high ratings from the critics will eventually move. "There may be sticker-shock reaction initially," said Mr. Pratt, "but as the wine is talked about and starts to sell, they eventually get excited and decide it's worth the astronomical price to add it to their collection." 
"It's just sort of a one-upsmanship thing with some people," added Larry Shapiro. "They like to talk about having the new Red Rock Terrace {one of Diamond Creek's Cabernets} or the Dunn 1985 Cabernet, or the Petrus.
Producers have seen this market opening up and they're now creating wines that appeal to these people." 
That explains why the number of these wines is expanding so rapidly.
But consumers who buy at this level are also more knowledgeable than they were a few years ago. "They won't buy if the quality is not there," said Cedric Martin of Martin Wine Cellar in New Orleans. "Or if they feel the wine is overpriced and they can get something equally good for less." Mr. Martin has increased prices on some wines (like Grgich Hills Chardonnay, now $32) just to slow down movement, but he is beginning to see some resistance to high-priced red Burgundies and Cabernets and Chardonnays in the $30 to $40 range. 
Image has, of course, a great deal to do with what sells and what doesn't, and it can't be forced.
Wine merchants can't keep Roederer Cristal in stock, but they have to push Salon le Mesnil, even lowering the price from $115 to $90.
It's hardly a question of quality -- the 1982 Salon is a beautiful wine, but, as Mr. Pratt noted, people have their own ideas about value. 
It's interesting to find that a lot of the expensive wines aren't always walking out the door.
In every major market in the U.S., for instance, you can buy '86 La Tache or Richebourg, virtually all of the first growth Bordeaux (except Petrus), as well as Opus One and Dominus from California and, at the moment, the Stag's Leap 1985 Cask 23. 
With the biggest wine-buying period of the year looming as the holidays approach, it will be interesting to see how the superpremiums fare.
By January it should be fairly clear what's hot -- and what's not. 
Ms. Ensrud is a free-lance wine writer in New York. 
Signs of a slowing economy are increasing pressure on the Federal Reserve to cut short-term interest rates, but it isn't clear whether the central bank will do so. 
A survey by the Fed's 12 district banks shows economic growth has been sluggish in recent weeks, while upward pressures on prices have moderated. "The economy is clearly slowing," says Robert Black, president of the Richmond Federal Reserve Bank. 
"If you look at the third quarter as posting roughly 2.5% growth, I do see some slowing in the fourth quarter," agrees Kansas City Fed President Roger Guffey. 
Nevertheless, both Mr. Guffey and Mr. Black say the slowdown so far is no cause for concern. "We're coming closer to achieving the stated objective of slowing the economy to a point where hopefully some downward trend in prices will occur," said Mr. Guffey. 
Bush administration officials are looking to the Fed to bring down rates, and financial markets seem to be expecting easier credit as well. "I think the market had been expecting the Fed to ease sooner and a little more than it has to date," said Robert Johnson, vice president of global markets for Bankers Trust Co. 
The Fed cut the key federal funds interest rate by about 0.25 percentage point to 8.75% after the Oct. 13 stock market plunge, but has shown no sign of movement since. 
The report from the Fed found that manufacturing, in particular, has been weak in recent weeks.
The Philadelphia Fed, for instance, reported that manufacturing activity "continues to decline" for the fourth month in a row.
And in the Chicago district, the report said, "a manufacturer of capital goods noted slower orders for some types, including defense equipment, petroleum equipment, food packaging machinery and material handling equipment." Retail sales also were reported slow in most districts, particularly "for discretionary, big-ticket items such as furniture, home appliances and consumer electronics." And construction also was described as slow in most areas. 
Despite the economic slowdown, there are few clear signs that growth is coming to a halt.
As a result, Fed officials may be divided over whether to ease credit.
Several Fed governors in Washington have been pushing for easier credit; but many of the regional Fed presidents have been resisting such a move. 
Mr. Black said he is "pleased" with the economy's recent performance, and doesn't see "a lot of excesses out there that would tilt us into recession." 
"There is always a chance of recession," added Mr. Guffey, "but if you ask me to put a percentage on it, I would think it's well below a 50% chance." 
Integra-A Hotel & Restaurant Co. said its planned rights offering to raise about $9 million was declared effective and the company will begin mailing materials to shareholders at the end of this week. 
Under the offer, shareholders will receive one right for each 105 common shares owned.
Each right entitles the shareholder to buy $100 face amount of 13.5% bonds due 1993 and warrants to buy 23.5 common shares at 30 cents a share.
The rights, which expire Nov. 21, can be exercised for $100 each. 
Integra, which owns and operates hotels, said that Hallwood Group Inc. has agreed to exercise any rights that aren't exercised by other shareholders.
Hallwood, a Cleveland merchant bank, owns about 11% of Integra. 
Copperweld Corp., a specialty steelmaker, said 445 workers at a plant in Shelby, Ohio, began a strike after the United Steelworkers Local 3057 rejected a new contract on Tuesday. 
The previous contract between Copperweld's Ohio Steel Tube division and the union expired at midnight Tuesday.
The union vote to reject the proposed pact was 230-215. 
Copperweld said it doesn't expect a protracted strike.
It said it has taken measures to continue shipments during the work stoppage. 
The Treasury said it plans to sell $30 billion in notes and bonds next week, but said the auctions will be postponed unless Congress acts quickly to lift the federal debt ceiling. 
Michael Basham, deputy assistant secretary for federal finance, said the Treasury may wait until late Monday or even early Tuesday to announce whether the autions are to be rescheduled.
Unless it can raise money in financial markets, Mr. Basham said, the federal government won't have the cash to pay off $13.8 billion in Treasury bills that mature on Thursday. 
Without congressional action, the Treasury can't sell any new securities -- even savings bonds.
But despite partisan bickering over the debt ceiling, which has become entangled in the fight over cutting capital-gains taxes, Congress is almost certain to act in time to avoid default. 
"Each day that Congress fails to act . . . will cause additional disruption in our borrowing schedule, possibly resulting in higher interest costs to the taxpayer," Treasury Secretary Nicholas Brady said in a speech prepared for delivery last night to a group of bankers. "To avoid these costs, and a possible default, immediate action is imperative." 
The securities to be sold next week will raise about $10 billion in cash and redeem $20 billion in maturing notes. 
The new securities, part of the federal government's regular quarterly refunding, will consist of: 
-- $10 billion of three-year notes, to be auctioned Tuesday and to mature Nov. 15, 1992. 
-- $10 billion of 10-year notes, to be auctioned Wednesday and to mature Nov. 15, 1999. 
-- $10 billion of 30-year bonds, to be auctioned Thursday and to mature Aug. 15, 2019.
The Treasury also said it plans to sell $10 billion in 36-day cash management bills on Thursday.
They will mature Dec. 21. 
None of the securities will be eligible for when-issued trading until Congress approves an increase in the debt ceiling, clearing the way for a formal offering, Mr. Basham said. 
The Treasury said it needs to raise $47.5 billion in the current quarter in order to end December with a $20 billion cash balance.
Auctions held in October and those scheduled for next week will raise a total of $25.6 billion. 
The remaining $21.9 billion could be raised through the sale of short-term Treasury bills, two-year notes in November and five-year notes in early December, the Treasury said. 
In the first three months of 1990, the Treasury estimates that it will have to raise between $45 billion and $50 billion, assuming that it decides to aim for a $10 billion cash balance at the end of March. 
Lancaster Colony Corp. said it acquired Reames Foods Inc. in a cash transaction.
Terms weren't disclosed. 
Reames, a maker and marketer of frozen noodles and pre-cooked pasta based in Clive, Iowa, has annual sales of about $11 million, Lancaster said. 
Investors took advantage of Tuesday's stock rally to book some profits yesterday, leaving stocks up fractionally.
Bond prices and the dollar both gained modestly. 
The Dow Jones Industrial Average finished less than a point higher to close at 2645.90 in moderate trading.
But advancing issues on the New York Stock Exchange were tidily ahead of declining stocks, 847 to 644.
Long-term bond prices rose despite prospects of a huge new supply of Treasury debt this month.
Continuing demand for dollars from Japanese investors boosted the U.S. currency. 
Analysts were disappointed that the enthusiasm investors showed for stocks in the wake of Georgia-Pacific's $3.18 billion bid for Great Northern Nekoosa evaporated so quickly.
The industrial average jumped more than 41 points Tuesday as speculators rushed to buy shares of potential takeover targets.
But with the end of the year in sight, money managers are eager to take profits and cut their risks of losing what for many have been exceptionally good returns in 
Economic news had little effect on financial markets.
As expected, a national purchasing managers' report indicated the nation's manufacturing sector continues to contract modestly.
The Federal Reserve's Beige Book, a summary of economic conditions across the country, indicated that the overall economy remains in a pattern of sluggish growth. 
In major market activity: 
Stock prices rose fractionally in moderate trading.
Big Board volume totaled 154.2 million shares.
Bond prices were up.
The Treasury's benchmark 30-year bond gained about a quarter of a point, or $2.50 for each $1,000 of face amount.
The yield fell to 7.88%. 
The dollar rose.
In late afternoon New York trading the currency was at 1.8500 marks and 143.80 yen compared with 1.8415 marks and 142.85 yen. 
Mitsui Mining & Smelting Co. posted a 62% rise in pretax profit to 5.276 billion yen ($36.9 million) in its fiscal first half ended Sept. 30 compared with 3.253 billion yen a year earlier. 
Net income more than tripled to 4.898 billion yen from 1.457 billion yen a year earlier. 
Eaton Corp. said it sold its Pacific Sierra Research Corp. unit to a company formed by employees of that unit.
Terms weren't disclosed. 
Pacific Sierra, based in Los Angeles, has about 200 employees and supplies professional services and advanced products to industry.
Eaton is an automotive parts, controls and aerospace electronics concern. 
Investor Harold Simmons and NL Industries Inc. offered to acquire Georgia Gulf Corp. for $50 a share, or about $1.1 billion, stepping up the pressure on the commodity chemicals concern. 
The offer follows an earlier proposal by NL and Mr. Simmons to help Georgia Gulf restructure or go private in a transaction that would pay shareholders $55 a share.
Georgia Gulf rebuffed that offer in September and said it would study other alternatives.
However, it hasn't yet made any proposals to shareholders. 
Late yesterday, Georgia Gulf said it reviewed the NL proposal as well as interests from "third parties" regarding business combinations.
Georgia Gulf said it hasn't eliminated any alternatives and that "discussions are being held with interested parties, and work is also continuing on other various transactions." It didn't elaborate. 
Analysts saw the latest offer as proof that Mr. Simmons, an aggressive and persistent investor, won't leave Georgia Gulf alone until some kind of transaction is completed. "He has clamped on their ankle like a pit bull," says Paul Leming, a vice president with Morgan Stanley & Co. "He appears to be in it for the long haul." Mr. Simmons and NL already own a 9.9% stake in Georgia Gulf. 
Mr. Simmons owns 88% of Valhi Inc., which in turn owns two-thirds of NL. NL is officially making the offer. 
Mr. Leming wasn't surprised by the lower price cited by NL, saying he believes that $55 a share is "the most you can pay for Georgia Gulf before it becomes a bad acquisition." 
Georgia Gulf stock rose $1.75 a share yesterday to close at $51.25 a share, while NL shares closed unchanged at $22.75 and Valhi rose 62.5 cents to $15, all in New York Stock Exchange composite trading. 
J. Landis Martin, NL president and chief executive officer, said NL and Mr. Simmons cut the price they were proposing for Georgia Gulf because they initially planned a transaction that included about $250 million in equity and a substantial amount of high-yield subordinated debt.
However, the junk-bond market has collapsed in recent weeks, lessening the likelihood that such a transaction would succeed. 
Now, he said, the group plans to put in "several hundred million" dollars in equity and finance the remainder with bank debt.
He also said that the group reduced its offer because it wasn't allowed to see Georgia Gulf's confidential financial information without agreeing that it wouldn't make an offer unless it had Georgia Gulf's consent. 
In a letter to Georgia Gulf President Jerry R. Satrum, Mr. Martin asked Georgia Gulf to answer its offer by Tuesday. 
It wasn't clear how NL and Mr. Simmons would respond if Georgia Gulf spurns them again.
Mr. Martin said they haven't yet decided what their next move would be, but he didn't rule out the possibility of a consent solicitation aimed at replacing Georgia Gulf's board.
In other transactions, Mr. Simmons has followed friendly offers with a hostile tender offer. 
Although Georgia Gulf hasn't been eager to negotiate with Mr. Simmons and NL, a specialty chemicals concern, the group apparently believes the company's management is interested in some kind of transaction.
The management group owns about 18% of the stock, most purchased at nominal prices, and would stand to gain millions of dollars if the company were sold. 
In the third quarter, Georgia Gulf earned $46.1 million, or $1.85 a share, down from $53 million, or $1.85 a share on fewer shares outstanding.
Sales fell to $251.2 million from $278.7 million. 
A licensing company representing the University of Pennsylvania added Johnson & Johnson to its lawsuit challenging a university faculty member over rights to Retin-A acne medicine. 
University Patents Inc., based in Westport, Conn., said it seeks Johnson & Johnson's profits from sales of Retin-A, estimated at $50 million, a similar amount of punitive damages and the right to license Retin-A elsewhere. 
In May, University Patents filed a suit in federal court in Philadelphia against Albert M. Kligman, a researcher and professor at the University of Pennsylvania School of Medicine who developed Retin-A in the 1960s to combat acne.
Dr. Kligman patented the medicine while employed by the University, but later licensed the Retin-A to a division of Johnson & Johnson. 
In New Brunswick, N.J., a Johnson & Johnson spokesman declined comment. 
Criticism in the U.S. over recent Japanese acquisitions is looming ever larger in the two countries' relations. 
Officials from both nations say the U.S. public's skittishness about Japanese investment could color a second round of bilateral economic talks scheduled for next week in Washington.
Not that Washington and Tokyo disagree on the Japanese acquisitions; indeed, each has come out in favor of unfettered investment in the U.S. 
Where they disagree is on the subject of U.S. direct investment in Japan.
The U.S. wants the removal of what it perceives as barriers to investment; Japan denies there are real barriers.
The heated talk stirred up by recent Japanese investments in the U.S. is focusing attention on the differences in investment climate, even though it's only one of many subjects to be covered in the bilateral talks, known as the Structural Impediments Initiative. 
The Japanese "should see this rhetoric as a signal of the need for a change in their own economy," says Charles Dallara, U.S. assistant Treasury secretary, who has been in Tokyo this week informally discussing the impending negotiations with government and business leaders. 
"We have a long history of maintaining an open direct-investment policy," Mr. Dallara says. "U.S. investors should have a greater opportunity at direct investment" in Japan. 
The Japanese fret openly about the U.S. public's rancor.
One clear sign of Japan's nervousness came this week, when a spokesman for Japan's Foreign Ministry devoted nearly all of a regular, half-hour briefing for foreign journalists to the subject of recent Japanese investments in the U.S. 
"We believe that it is vitally important for those Japanese business interests {in the U.S.} to be more aware of the emotions and concerns of the American people," said the spokesman, Taizo Watanabe.
At the same time, though, he chastised the media for paying such close attention to Japanese investment when other foreign countries, notably Britain, are acquiring more American assets. 
Fears that Japanese investors are buying up America have escalated sharply in the past several weeks, with Sony Corp. 's purchase of Columbia Pictures Entertainment Inc. from Coca-Cola Co. and Mitsubishi Estate Co. 's acquisition of a 51% holding in Rockefeller Group, the owner of some of midtown Manhattan's most exclusive real estate. 
Even before those moves added fuel, the fires of discontent had been well stoked by the highly publicized experience in Japan of one U.S. investor, T. Boone Pickens Jr.
The Texas oilman has acquired a 26.2% stake valued at more than $1.2 billion in an automotive-lighting company, Koito Manufacturing Co.
But he has failed to gain any influence at the company.
Koito has refused to grant Mr. Pickens seats on its board, asserting he is a greenmailer trying to pressure Koito's other shareholders into buying him out at a profit. 
Mr. Pickens made considerable political hay with his troubles in Japan.
The Senate Finance Committee, chaired by a fellow Texan, Democratic Sen. Lloyd Bentsen, last month urged U.S. Trade Representative Carla Hills to use Mr. Pickens's experience in talks with Tokyo "to highlight this problem facing Americans who seek access to the Japanese capital markets." 
While Mr. Dallara and Japanese officials say the question of investors' access to the U.S. and Japanese markets may get a disproportionate share of the public's attention, a number of other important economic issues will be on the table at next week's talks.
Among them are differences in savings and investment rates, corporate structures and management, and government spending.
Each side has a litany of recommendations for the other. 
The U.S. says it is anxious for results. "We feel very strongly that we really need action across the full range of issues we've identified, and we need it by next spring," Mr. Dallara says. 
Both sides have agreed that the talks will be most successful if negotiators start by focusing on the areas that can be most easily changed.
But they haven't clarified what those might be. 
After the first set of meetings two months ago, some U.S. officials complained that Japan hadn't come up with specific changes it was prepared to make.
The Japanese retort that the first round was too early to make concessions. 
"Just to say the distribution system is wrong doesn't mean anything," says a Ministry of International Trade and Industry official. "We need to clarify what exactly is wrong with it." 
That process of sorting out specifics is likely to take time, the Japanese say, no matter how badly the U.S. wants quick results.
For instance, at the first meeting the two sides couldn't even agree on basic data used in price discussions.
Since then, a team of about 15 MITI and U.S. Commerce Department officials have crossed the globe gauging consumer prices.
By Monday, they hope to have a sheaf of documents both sides can trust. 
"Little by little, there is progress," says the MITI official. "Both sides are taking action." 
Elisabeth Rubinfien contributed to this article. 
While worry grows about big Japanese investments in the U.S., Japan's big trading companies are rapidly increasing their stake in America's smaller business. 
For Japan, the controversial trend improves access to American markets and technology.
But for small American companies, it also provides a growing source of capital and even marketing help. 
Take the deal with Candela Laser Corp., a Wayland, Mass., manufacturer of high-tech medical devices, which three years ago set its sights on Japan as an export market.
Partly to help clear the myriad obstacles facing any overseas company trying to penetrate Japan, tiny Candela turned to Mitsui & Co., one of Japan's largest trading companies, for investment. 
In a joint-venture deal, Mitsui guided Candela through Tokyo's bureaucratic maze.
It eventually secured Ministry of Health import approval for two Candela laser products -- one that breaks up kidney stones and another that treats skin lesions.
At last count, Candela had sold $4 million of its medical devices in Japan. 
The deal also gave Mitsui access to a high-tech medical product. "They view this as a growth area so they went about it with a systematic approach," says Richard Olsen, a Candela vice president.
Indeed, for many Japanese trading companies, the favorite U.S. small business is one whose research and development can be milked for future Japanese use. 
The Japanese companies bankroll many small U.S. companies with promising products or ideas, frequently putting their money behind projects that commercial banks won't touch.
Japanese companies have financed small and medium-sized U.S. firms for years, but in recent months, the pace has taken off. 
In the first half of 1989 alone, Japanese corporations invested $214 million in minority positions in U.S. companies, a 61% rise from the figure for all of 1987, reports Venture Economics Inc.
The Needham, Mass., concern tracks investments in new businesses.
In addition, of course, some of the Japanese investments involved outright purchase of small U.S. firms. 
Heightened Japanese interest in American small business parallels an acceleration of investments giving Japanese companies control of large, highly visible U.S. corporations, such as Columbia Pictures Entertainment Inc. Only this week, it was announced that Mitsubishi Estate Co. had acquired a 51% stake in Rockefeller Group, which owns New York's prestigious Rockefeller Center. 
While the small deals are far less conspicuous, they add to Japanese penetration of the U.S. market.
As the deals also improve Japanese access to American technology and market knowledge, they feed American anxieties in this area, too. 
Even a low-tech product like plate glass can catch a trading company's fancy if there's a strategic fit.
Free State Glass Industries of Warrenton, Va., a small fabricator of architectural glass, was foundering under its original management.
Last year, Mitsubishi International Corp., the New York-based arm of Mitsubishi Corp., bought controlling interest in the glass company in a joint venture with Ronald Bodner, a glass industry executive and Mitsubishi consultant. 
The deal is chiefly designed to give Mitsubishi a window on the U.S. glass industry, says Ichiro Wakui, an executive in Mitsubishi's general merchandise department in New York. "It's not just a simple investment in a small company," Mr. Wakui says. "We want to see the glass market from the inside, not the outside." 
Mitsubishi's investment in Free State is "very small . . . less than $4 million," Mr. Wakui says.
Mr. Bodner declines to comment on the arrangement. 
Trading companies such as Mitsubishi, Mitsui, C. Itoh & Co. and Nissho-Iwai Corp., which make many of the Japanese investments in small U.S. concerns, have no U.S. counterpart.
These vertically integrated combines, some of which got their start in Japan's feudal period, deal globally in commodities, construction and manufacturing.
They operate ships and banks. 
"All the "sogo-shosha" are looking for new business," says Arthur Klauser, adviser to the president of Mitsui, U.S.A., using the Japanese term for the largest of the global trading houses. 
Adds Takeshi Kondo, senior vice president of C. Itoh America Inc.: "We have a great interest in making investments, particularly in new ventures." 
A host of electronics firms in California's Silicon Valley were financed with trading-company venture capital.
Profit, at least in the short term, is usually a secondary goal. "Strategic objectives, not financial return, drive many of the deals," says a Venture Economics spokesman. 
In investing on the basis of future transactions, a role often performed by merchant banks, trading companies can cut through the logjam that small-company owners often face with their local commercial banks. "It's the classic problem of the small businessman," says Malcolm Davies, managing director of Trading Alliance Corp. of New York. "People are queuing at the door to take his product but he doesn't have the working capital to make the thing and commercial banks are very unsympathetic.
They want assets, they want a balance sheet, which has no relation to the business a company can generate." 
Adds Mitsui's Mr. Klauser: "Unlike corporations in this country, trading companies aren't so much interested in a high return on investment as they are on increasing trade flows.
To the extent they can do this, they're quite content to get a return on investment of 1% to 2%." 
Mr. Klauser says Mitsui has 75 U.S. subsidiaries in which it holds 35% interest or more and the trading company hopes to double the number of its U.S. affiliates in 1990.
Sales by these subsidiaries in the fiscal year ending last March were more than $17 billion.
A 1% to 2% return on $17 billion "ain't hay," Mr. Klauser says. 
Hudson General Corp. 's president and chief executive officer, Alan J. Stearn, resigned. 
Mr. Stearn, 46 years old, couldn't be reached for comment.
A company spokesman declined to elaborate on the departure. 
Hudson General, which provides maintenance, fueling and other services to airlines and airports, reported a loss for its most recent fiscal year and last month omitted the semiannual dividend on its common shares. 
Mr. Stearn, who had been with the company more than 20 years and had been president since 1984, will act as a consultant to Hudson General.
His duties as chief executive will be assumed by Chairman Jay B. Langner. 
For 10 years, Genie Driskill went to her neighborhood bank because it was convenient.
A high-balance customer that banks pine for, she didn't give much thought to the rates she was receiving, nor to the fees she was paying. 
But in August, First Atlanta National Bank introduced its Crown Account, a package designed to lure customers such as Ms. Driskill.
Among other things, it included checking, safe deposit box and credit card -- all for free -- plus a good deal on installment loans.
All she had to do was put $15,000 in a certificate of deposit, or qualify for a $10,000 personal line of credit. 
"I deserve something for my loyalty," she says.
She took her business to First Atlanta. 
So it goes in the competitive world of consumer banking these days.
For nearly a decade, banks have competed for customers primarily with the interest rates they pay on their deposits and charge on their loans.
The competitive rates were generally offset by hefty fees on various services. 
But many banks are turning away from strict price competition.
Instead, they are trying to build customer loyalty by bundling their services into packages and targeting them to small segments of the population. 
"You're dead in the water if you aren't segmenting the market," says Anne Moore, president of Synergistics Research Corp., a bank consulting firm in Atlanta. 
NCNB Corp. of Charlotte, N.C., recently introduced its Financial Connections Program aimed at young adults just starting careers.
The program not only offers a pre-approved car loan up to $18,000, but throws in a special cash-flow statement to help in saving money. 
In September, Union Planters Corp. of Memphis, Tenn., launched The Edge account, a package designed for the "thirtysomething" crowd with services that include a credit card and line of credit with no annual fees, and a full percentage point off on installment loans.
The theory: Such individuals, many with young children, are in their prime borrowing years -- and, having borrowed from the bank, they may continue to use it for other services in later years. 
For some time, banks have been aiming packages at the elderly, the demographic segment with the highest savings.
Those efforts are being stepped up.
Judie MacDonald, vice president of retail sales at Barnett Banks Inc. of Jacksonville, Fla., says the company now targets sub-segments within the market by tailoring its popular Seniors Partners Program to various life styles. 
"Varying age, geography and life-style differences create numerous sub-markets," Ms. MacDonald says.
She says individual Barnett branches can add different benefits to their Seniors Partners package -- such as athletic activities or travel clubs -- to appeal to local market interests. "An active 55-year-old in Boca Raton may care more about Senior Olympic games, while a 75-year-old in Panama City may care more about a seminar on health," she says. 
Banks have tried packaging before.
In 1973, Wells Fargo & Co. of San Francisco launched the Gold Account, which included free checking, a credit card, safe-deposit box and travelers checks for a $3 monthly fee. 
The concept begot a slew of copycats, but the banks stopped promoting the packages.
One big reason: thin margins.
Many banks, particularly smaller ones, were slow to computerize and couldn't target market niches that would have made the programs more profitable.
As banks' earnings were squeezed in the mid-1970s, the emphasis switched to finding ways to cut costs. 
But now computers are enabling more banks to analyze their customers by age, income and geography.
They are better able to get to those segments in the wake of the deregulation that began in the late 1970s.
Deregulation has effectively removed all restrictions on what banks can pay for deposits, as well as opened up the field for new products such as high-rate CDs.
Where a bank once offered a standard passbook savings account, it began offering money-market accounts, certificates of deposit and interest-bearing checking, and staggering rates based on the size of deposits. 
The competition has grown more intense as bigger banks such as Norwest Corp. of Minneapolis and Chemical Banking Corp. of New York extend their market-share battles into small towns across the nation. "Today, a banker is worrying about local, regional and money-center {banks}, as well as thrifts and credit unions," says Ms. Moore at Synergistics Research. "So people who weren't even thinking about targeting 10 years ago are scrambling to define their customer base." 
The competition has cultivated a much savvier consumer. "The average household will spread 19 accounts over a dozen financial institutions," says Michael P. Sullivan, who runs his own bank consulting firm in Charlotte, N.C. "This much fragmentation makes attracting and keeping today's rate-sensitive customers costly." 
Packages encourage loyalty by rewarding customers for doing the bulk of their banking in one place.
For their troubles, the banks get a larger captive audience that is less likely to move at the drop of a rate.
The more accounts customers have, Mr. Sullivan says, the more likely they are to be attracted to a package -- and to be loyal to the bank that offers it.
That can pay off down the road as customers, especially the younger ones, change from borrowers to savers/investors. 
Packaging has some drawbacks.
The additional technology, personnel training and promotional effort can be expensive.
Chemical Bank spent more than $50 million to introduce its ChemPlus line, several packages aimed at different segments, in 1986, according to Thomas Jacob, senior vice president of marketing. "It's not easy to roll out something that comprehensive, and make it pay," Mr. Jacob says. 
Still, bankers expect packaging to flourish, primarily because more customers are demanding that financial services be tailored to their needs. "These days, banking customers walk in the door expecting you to have a package especially for them," Ms. Moore says.
Some banks are already moving in that direction, according to Alvin T. Sale, marketing director at First Union Corp. in Charlotte.
First Union, he says, now has packages for seven customer groups.
Soon, it will split those into 30. 
Says Mr. Sale: "I think more banks are starting to realize that we have to be more like the department store, not the boutique." 
IRAs. 
SHAREDATA Inc. said it will amend a registration statement filed with the Securities and Exchange Commission to delete a plan to sell 500,000 newly issued common shares.
The Chandler, Ariz., company said it will resubmit the registration to cover only the 2.3 million warrants, each exercisable for the purchase of one common share.
Currently, ShareData has about 4.1 million common shares outstanding.
ShareData develops and markets low-cost software, peripheral equipment and accessories for computers. 
Five things you can do for $15,000 or less: 
1.
Buy a new Chevrolet. 
2.
Take a Hawaiian vacation. 
3.
Send your child to a university. 
4.
Buy a diamond necklace. 
5.
Make a lasting difference in the regulatory life of an American savings-and-loan association through the Foster Corporate Parents Plan. 
Americans today spend $15,000 like pocket change -- they don't think much about it.
But for an ailing savings-and-loan association -- teetering on insolvency -- it can lead to safety from imminent demise and to a future full of promise. 
Your $15,000 will help keep a needy savings and loan solvent -- and out of the federal budget deficit. 
As a Foster Corporate Parent, you'll be helping a neighborhood S&L in areas crucial to its survival.
Like healthy regulatory capital.
A steady deposit base.
Performing loans.
At the same time, you'll give your Foster Savings Institution the gift of hope and freedom from the federal regulators who want to close its doors -- for good. 
As a Foster Corporate Parent, you will experience the same joy felt by Robert Bass, Lewis Ranieri, William Simon and others, who find ways to help troubled savings institutions and their employees help themselves.
That builds confidence, self sufficiency, not to mention critical regulatory net worth. 
Don't wait -- a savings institution needs your help now! 
Every day you delay, a savings institution's health -- and the federal budget deficit -- grows worse.
Think about the good you can do for just $15,000 a month, about the cost of a mid-size Chevrolet or two semesters at a state university.
Then send your support to a savings institution that has taken a bad rap in the press and on its bottom line.
Every $15,000 you send will go a long way to boost sagging net worth and employee morale -- and keep your Foster Savings Institution off the federal budget deficit! 
Mr. Baris is a lawyer in New York. 
The Chicago Mercantile Exchange said it plans to institute an additional "circuit breaker" aimed at stemming market slides. 
Separately, John Phelan told a closed House subcommittee meeting in Washington that he would support Securities and Exchange Commission halts of program trading during market emergencies.
But the New York Stock Exchange chairman said he doesn't support reinstating a "collar" on program trading, arguing that firms could get around such a limit. 
The Chicago Merc said a new one-hour price limit would take effect in its Standard & Poor's 500 stock-index futures pit once S&P 500 futures fell 20 index points -- the equivalent of about a 150-point drop in the Dow Jones Industrial Average.
If the 20-point limit is triggered after 1:30 p.m. Chicago time, it would remain in effect until the normal close of trading at 3:15 p.m. 
With the limit in effect, members would be able to execute trades at the limit price or at higher prices, but not below it. 
The exchange said it decided a new circuit breaker was needed following a review of the tumultuous trading in stocks and stock-index futures on Friday Oct. 13, when the Dow Jones industrials plunged 190 points and stock-index futures prices skidded as well.
Late that afternoon the S&P 500 stock-index futures contract fell a total of 30 index points, hitting a Merc circuit breaker limit that remained in effect for the rest of the trading session. 
The Merc said that its existing 30-minute, 12-point limit on S&P 500 stock-index futures trading (equal to about 100 points on the Dow Jones industrials), which was triggered Oct. 13, will remain in effect. 
Leo Melamed, Merc executive committee chairman, said that the 12-point limit appeared to lessen the selling panic Oct. 13.
But when the contract reopened, the subsequent flood of sell orders that quickly knocked the contract down to the 30-point limit indicated that the intermediate limit of 20 points was needed to help keep stock and stock-index futures prices synchronized. 
Several traders maintained that the Merc's 12-point circuit-breaker aggravated the market slide Oct. 13 by directing additional selling pressure to the floor of the New York Stock Exchange. 
All of the changes require regulatory approval, which is expected shortly. 
The exchange also said that the 30-point circuit breaker, which currently provides only a one-hour respite during market sell-offs, will become the maximum one-day limit for the S&P 500 stock-index futures contract; the one-day limit now is 50 index points. 
A final modification was made to the five-point opening limit for the contract.
The Merc said that five-point limit will remain in effect for the first 10 minutes of trading.
The limit lapses under current exchange rules if contracts trade above the limit price during the opening 10 minutes of trading. 
In Washington, House aides said Mr. Phelan told congressmen that the collar, which banned program trades through the Big Board's computer when the Dow Jones Industrial Average moved 50 points, didn't work well.
He said that firms could get around the collar by executing trades manually. 
In a post-hearing news conference, Mr. Phelan, who has publicly expressed concern about market volatility, said he told the House finance and telecommunications subcommittee that he would support the program-trading halt proposal "providing the SEC would be comfortable with the language" in a bill. 
The program-trading issue is heating up on Capitol Hill as it is on Wall Street, and several legislators want to grant the SEC the power to shut off the programs when trading becomes too volatile.
SEC Chairman Richard Breeden has said he would be willing to consider circuit breakers that have preset trigger points, but he doesn't want discretionary power to stop programs. 
A House aide suggested that Mr. Phelan was so "vague and mushy" that it was the kind of meeting where people of all viewpoints could "come out feeling good." At one point, Mr. Phelan angered the subcommittee's chairman, Rep. Edward Markey (D., Mass.), by not going much beyond what already had been reported in the morning newspapers. 
"Markey said we could have done this in public" because so little sensitive information was disclosed, the aide said.
Mr. Phelan then responded that he would have been happy just writing a report to the panel, the aide added. 
At another point during the hearing, Rep. Markey asked Mr. Phelan what would be discussed at a New York exchange board meeting today.
Mr. Phelan said the Big Board is likely to study the program-trading issue.
That response annoyed Rep. Markey, House aides said, and the congressman snapped back that there had been enough studies of the issue and that it was time for action on the matter. 
Fifteen of the 26 subcommittee members attended the hearing, most notably Rep. John Dingell (D., Mich.), the full House Energy and Commerce Committee chairman, who has been willing to let Mr. Markey carry the legislation in recent months. 
Mr. Dingell expressed concern, sources said, about jurisdictional problems in regulating program trading, which uses futures to offset stock trades.
The futures industry is regulated by the Commodity Futures Trading Commission, which reports to the Agriculture committees in both houses. 
The art of change-ringing is peculiar to the English, and, like most English peculiarities, unintelligible to the rest of the world. 
-- Dorothy L. Sayers, "The Nine Tailors" 
ASLACTON, England -- Of all scenes that evoke rural England, this is one of the loveliest: An ancient stone church stands amid the fields, the sound of bells cascading from its tower, calling the faithful to evensong. 
The parishioners of St. Michael and All Angels stop to chat at the church door, as members here always have.
In the tower, five men and women pull rhythmically on ropes attached to the same five bells that first sounded here in 1614. 
But there is also a discordant, modern note in Aslacton, though it can't be heard by the church-goers enjoying the peal of bells this cool autumn evening. 
Like most of the other 6,000 churches in Britain with sets of bells, St. Michael once had its own "band" of ringers, who would herald every Sunday morning and evening service.
Now, only one local ringer remains: 64-year-old Derek Hammond. 
The others here today live elsewhere.
They belong to a group of 15 ringers -- including two octogenarians and four youngsters in training -- who drive every Sunday from church to church in a sometimes-exhausting effort to keep the bells sounding in the many belfries of East Anglia. 
"To ring for even one service at this tower, we have to scrape," says Mr. Hammond, a retired water-authority worker. "We've tried to train the youngsters, but they have their discos and their dances, and they just drift away." 
Mr. Hammond worries that old age and the flightiness of youth will diminish the ranks of the East Anglian group that keeps the Aslacton bells pealing.
History, after all, is not on his side.
According to a nationwide survey taken a year ago, nearly a third of England's church bells are no longer rung on Sundays because there is no one to ring them. 
It is easy to see why the ancient art is on the ropes.
The less complicated version of playing tunes on bells, as do the carillons of continental Europe, is considered by the English to be childish, fit only for foreigners.
Change-ringing, a mind-boggling exercise the English invented 380 years ago, requires physical dexterity -- some bells weigh more than a ton -- combined with intense mental concentration. 
Proper English bells are started off in "rounds," from the highest-pitched bell to the lowest -- a simple descending scale using, in larger churches, as many as 12 bells.
Then, at a signal, the ringers begin varying the order in which the bells sound without altering the steady rhythm of the striking.
Each variation, or change, can occur only once, the rules state.
Ringers memorize patterns of changes, known as "methods," which have odd-sounding names like Kent Treble Bob Major or Grandsire Caters.
A series of 5,000 or so changes is a "peal" and takes about three hours. 
A look at a Thursday night practice at St. Mary Abbot church in the Kensington district of London gives an idea of the work involved.
Ten shirt-sleeved ringers stand in a circle, one foot ahead of the other in a prize-fighter's stance, each pulling a rope that disappears through a small hole in the high ceiling of the ringing chamber.
No one speaks, and the snaking of the ropes seems to make as much sound as the bells themselves, muffled by the ceiling.
Totally absorbed, the ringers stare straight ahead, using peripheral vision (they call it "rope-sight") to watch the other ropes and thus time their pulls. 
Far above in the belfry, the huge bronze bells, mounted on wheels, swing madly through a full 360 degrees, starting and ending, surprisingly, in the inverted, or mouth-up position.
Skilled ringers use their wrists to advance or retard the next swing, so that one bell can swap places with another in the following change. 
In a well-known detective-story involving church bells, English novelist Dorothy L. Sayers described ringing as a "passion {that} finds its satisfaction in mathematical completeness and mechanical perfection." Ringers, she added, are "filled with the solemn intoxication that comes of intricate ritual faultlessly performed." 
"Ringing does become a bit of an obsession," admits Stephanie Pattenden, master of the band at St. Mary Abbot and one of England's best female ringers. 
It is a passion that usually stays in the tower, however.
More often than not, ringers think of the church as something stuck on the bottom of the belfry.
When their changes are completed, and after they have worked up a sweat, ringers often skip off to the local pub, leaving worship for others below. 
This does not sit well with some clerics.
With membership of the Church of England steadily dwindling, strong-willed vicars are pressing equally strong-willed and often non-religious ringers to attend services.
Two years ago, the Rev. Jeremy Hummerstone, vicar of Great Torrington, Devon, got so fed up with ringers who didn't attend service he sacked the entire band; the ringers promptly set up a picket line in protest. "They were a self-perpetuating club that treated the tower as sort of a separate premises," the Vicar Hummerstone says. 
An entirely new band rings today at Great Torrington, several of whom are members of the congregation.
But there still aren't enough ringers to ring more than six of the eight bells. 
At St. Mary's Church in Ilminster, Somerset, the bells have fallen silent following a dust-up over church attendance.
The vicar, W.D. Jones, refuses to talk about it, saying it would "reopen the wound." But C.J.B. Marshall, vicar of a nearby church, feels the fault is in the stairs from the bell tower that are located next to the altar. "So crunch, crunch, crunch, bang, bang, bang -- here come the ringers from above, making a very obvious exit while the congregation is at prayer," he says. 
Vicar Marshall admits to mixed feelings about this issue, since he is both a vicar and an active bell-ringer himself. "The sound of bells is a net to draw people into the church," he says. "I live in hopes that the ringers themselves will be drawn into that fuller life." 
The Central Council of Church Bell Ringers, a sort of parliament of ringing groups, aims to improve relations with vicars, says John C. Baldwin, president.
It hopes to speak to students at theological colleges about the joys of bell ringing and will shortly publish a booklet for every vicar in the country entitled, "The Bells in Your Care." Says Mr. Baldwin, "We recognize that we may no longer have as high a priority in church life and experience." 
Mr. Baldwin is also attacking the greater problem: lack of ringers.
One survey says that of the 100,000 trained bellringers in England today, only 40,000 of them still ring.
Also, ringers don't always live where the bells need to be rung -- like in small, rural parishes and inner-city churches. 
But the council's program to attract and train ringers is only partly successful, says Mr. Baldwin. "Right now, we're lucky if after five years we keep one new ringer out of 10," he adds. 
One bright sign is that a growing number of women have entered the once male-dominated field; more than a third of the ringers today are women.
They aren't accepted everywhere, however.
The oldest bell-ringing group in the country, the Ancient Society of College Youths, founded in 1637, remains male-only, a fact that's particularly galling to women because the group is the sole source of ringers for Britain's most prestigious churches, St. Paul's Cathedral and Westminster Abbey. 
This being Britain, no woman has filed an equal-opportunity suit, but the extent of the problem surfaced this summer in a series of letters to "The Ringing World," a weekly newspaper for ringers.
One writer, signing his letter as "Red-blooded, balanced male," remarked on the "frequency of women fainting in peals," and suggested that they "settle back into their traditional role of making tea at meetings." 
In the torrent of replies that followed, one woman ringer from Solihull observed that "the average male ringer leaves quite a lot to be desired: badly dressed, decorated with acne and a large beer-belly, frequently unwashed and unbearably flatulent in peals." Another women wrote from Sheffield to say that in her 60 years of ringing, "I have never known a lady to faint in the belfry.
I have seen one or two men die, bless them." 
Investors unsettled by the stock market's gyrations can take some comfort in the predictable arrival of quarterly dividend checks.
That has been particularly true this year with many companies raising their payouts more than 10%. 
But don't breathe too easy: Those dividend increases may signal trouble ahead for stock prices, some analysts warn. 
In the past, they say, the strongest dividend growth has often come at times when the stock-market party was almost over. 
That can be a trap for unwary investors, says Richard Bernstein, senior quantitative analyst at Merrill Lynch & Co. Strong dividend growth, he says, is "the black widow of valuation" -- a reference to the female spiders that attract males and then kill them after mating. 
Stephen Boesel, president of T. Rowe Price Growth and Income Fund, explains that companies raise their payouts most robustly only after the economy and corporate profits have been growing for some time. "Invariably, those strong periods in the economy give way to recessionary environments," he says. "And recessionary environments aren't hospitable to the stock market." 
Indeed, analysts say that payouts have sometimes risen most sharply when prices were already on their way down from cyclical peaks.
In 1976, for example, dividends on the stocks in Standard & Poor's 500-stock index soared 10%, following much slower growth the year before.
The S&P index started sliding in price in September 1976, and fell 12% in 1977 -- despite a 15% expansion in dividends that year. 
That pattern hasn't always held, but recent strong growth in dividends makes some market watchers anxious.
Payouts on the S&P 500 stocks rose 10% in 1988, according to Standard & Poor's Corp., and Wall Street estimates for 1989 growth are generally between 9% and 14%.
Many people believe the growth in dividends will slow next year, although a minority see double-digit gains continuing. 
Meanwhile, many market watchers say recent dividend trends raise another warning flag: While dividends have risen smartly, their expansion hasn't kept pace with even stronger advances in stock prices.
As a result, the market's dividend yield -- dividends as a percentage of price -- has slid to a level that is fairly low and unenticing by historical standards. 
Put another way, the decline in the yield suggests stocks have gotten pretty rich in price relative to the dividends they pay, some market analysts say.
They are keeping a close watch on the yield on the S&P 500.
The figure is currently about 3.3%, up from 3.2% before the recent market slide.
Some analysts say investors should run for the exits if a sustained market rebound pushes the yield below 3%. 
A drop below that 3% benchmark "has always been a strong warning sign that stocks are fully valued," says Mr. Boesel of T. Rowe Price. 
In fact, "the market has always tanked.
Always.
There's never been an exception," says Gerald W. Perritt, a Chicago investment adviser and money manager, based on a review of six decades of stock-market data. 
The last time the S&P 500 yield dropped below 3% was in the summer of 1987.
Stockholders who took the hint and sold shares escaped the October debacle. 
There have been only seven other times -- in 1929, 1933, 1961, 1965, 1968, 1971 and 1972 -- when the yield on the S&P 500 dropped below 3% for at least two consecutive months, Mr. Perritt found.
And in each case, he says, a sharp drop in stock prices began within a year. 
Still, some market analysts say the current 3.3% reading isn't as troublesome as it might have been in years past. "It's not a very meaningful indicator currently because corporations are not behaving in a traditional manner," says James H. Coxon, head of stock investments for Cigna Corp., the Philadelphia-based insurer. 
In particular, Mr. Coxon says, businesses are paying out a smaller percentage of their profits and cash flow in the form of dividends than they have historically.
So, while stock prices may look fairly high relative to dividends, they are not excessive relative to the underlying corporate strength. 
Rather than increasing dividends, some companies have used cash to buy back some of their shares, notes Steven G. Einhorn, co-chairman of the investment policy committee at Goldman, Sachs & Co.
He factors that into the market yield to get an adjusted yield of about 3.6%.
That is just a tad below the average of the past 40 years or so, he says. 
What will happen to dividend growth next year?
Common wisdom suggests a single-digit rate of growth, reflecting a weakening in the economy and corporate profits. 
PaineWebber Inc., for instance, is forecasting growth in S&P 500 dividends of just under 5% in 1990, down from an estimated 11% this year.
In other years in which there have been moderate economic slowdowns -- the environment the firm expects in 1990 -- the change in dividends ranged from a gain of 4% to a decline of 1% , according to PaineWebber analyst Thomas Doerflinger. 
The minority argument, meanwhile, is that businesses have the financial wherewithal this time around to declare sharply higher dividends even if their earnings weaken. 
Dividend growth on the order of 12% is expected by both Mr. Coxon of Cigna and Mr. Einhorn of Goldman Sachs.
Those dividend bulls argue that corporations are in the unusual position of having plenty of cash left over after paying dividends and making capital expenditures. 
One indicator investors might want to watch is the monthly tally from Standard & Poor's of the number of public companies adjusting their dividends.
A total of 139 companies raised dividends in October, basically unchanged from 138 a year ago, S&P said Wednesday.
That followed four straight months in which the number of increases trailed the year-earlier pace. 
While the S&P tally doesn't measure the magnitude of dividend changes, a further slippage in the number of dividend increases could be a harbinger of slower dividend growth next year. 
In any case, opinion is mixed on how much of a boost the overall stock market would get even if dividend growth continues at double-digit levels.
Mr. Einhorn of Goldman Sachs estimates the stock market will deliver a 12% to 15% total return from appreciation and dividends over the next 12 months -- vs. a "cash rate of return" of perhaps 7% or 8% if dividend growth is weak. 
But Mr. Boesel of T. Rowe Price, who also expects 12% growth in dividends next year, doesn't think it will help the overall market all that much. "Having the dividend increases is a supportive element in the market outlook, but I don't think it's a main consideration," he says.
With slower economic growth and flat corporate earnings likely next year, "I wouldn't look for the market to have much upside from current levels." 
Your Oct. 13 page-one story on the renewed plight of Western Union says that Western Union had lost its chance to be in the telephone business by turning down Alexander Graham Bell's offer to it of his invention, because it supposedly felt that voice communication would never replace the telegraph. 
Such is hardly the case.
Bell's father-in-law, Gardner G. Hubbard, wealthy and well-connected, obtained financing to start the American Bell Telephone Co. in Boston, which even had a subsidiary in New York called the Telephone Co. of New York.
This is where Bell's patents went. 
Western Union indeed wanted to get into the telephone business.
It acquired Thomas Edison's microphone patent and then immediately sued the Bell Co. claiming that the microphone invented by my grandfather, Emile Berliner, which had been sold to Bell for a princely $50,000, infringed upon Western Union's Edison patent.
When Bell established that the Berliner patent caveat was registered 10 days before Edison's application, Western Union dropped the lawsuit and agreed never to enter the telephone business -- the basis for the company's current plight. 
Oliver Berliner 
Beverly Hills, Calif. 
Troubled NBI Inc. said it fired more than half its work force and is discontinuing its hardware business to focus on its software and service operations. 
The ailing company, which has reported net losses for 16 consecutive quarters, said it won't manufacture network computer systems any more and will greatly reduce its costly direct sales force. 
Altogether, NBI said it will eliminate 266 jobs at its Boulder headquarters, 176 field sales jobs and 50 jobs at its Canadian and United Kingdom headquarters.
The company's work force will fall to about 400 people. 
Stephen G. Jerritts, president and chief executive officer, said customers weren't willing to commit to an expensive NBI hardware systems because of the company's financial troubles.
Further, he said, the company doesn't have the capital needed to build the business over the next year or two. 
"We flat ran out of financing resources," Mr. Jerritts said. "We had to do something structurally and radically different." 
As a result, he said NBI will focus on servicing its installed base of systems, trying to provide maintenance for other manufacturers and expanding its software business, using some of the applications it developed for its hardware.
The company currently offers a word-processing package for personal computers called Legend. 
The company, which recently said it lacked the profits and capital to pay dividends on its Series A convertible preferred stock, said it has hired an investment banker to help it raise additional cash. 
In New York Stock Exchange composite trading yesterday, NBI common closed at 93 cents a share, up 31 cents. 
It was Richard Nixon's first visit to China in 1972 that set in motion the historic rapprochement between Beijing and Washington.
But the former U.S. president's sixth visit to China, during which he spoke at length with Chinese leaders, was nowhere near as successful at easing strains that have recently afflicted the Sino-U.S. relationship. 
Mr. Nixon, the most prominent American to come to China since Beijing's bloody suppression of pro-democracy demonstrators in June, harped on international outrage over the massacre.
The Chinese, in turn, took aim at American "interference" in China's domestic affairs. 
One official newspaper, Legal Daily, even directly criticized Mr. Nixon, who is normally referred to here as an "old friend." The paper accused him of being a leading proponent of "peaceful evolution," a catch phrase to describe what China believes is the policy of Western countries to seduce socialist nations into the capitalist sphere. 
The tension was evident on Wednesday evening during Mr. Nixon's final banquet toast, normally an opportunity for reciting platitudes about eternal friendship.
Instead, Mr. Nixon reminded his host, Chinese President Yang Shangkun, that Americans haven't forgiven China's leaders for the military assault of June 3-4 that killed hundreds, and perhaps thousands, of demonstrators. 
"Many in the United States, including many friends of China, believe the crackdown was excessive and unjustified," Mr. Nixon told Mr. Yang, who was directly involved in ordering the attack. "The events of April through June damaged the respect and confidence which most Americans previously had for the leaders of China." 
The Chinese responded in an equally undiplomatic fashion.
In talks with Mr. Nixon, Chinese leaders expressed no regret for the killings, and even suggested that the U.S. was prominently involved in the demonstrations this spring.
In a meeting Tuesday, supreme leader, Deng Xiaoping, told Mr. Nixon, "Frankly speaking, the U.S. was involved too deeply in the turmoil and counterrevolutionary rebellion which occurred in Beijing not long ago.
China was the real victim and it is unjust to reprove China for it." 
Despite the harsh exchanges, the U.S. and China still seem to be looking for a way to mend relations, which have deteriorated into what Mr. Nixon referred to as "the greatest crisis in Chinese-American relations" since his initial visit to China 17 years ago.
In his return toast to Mr. Nixon, Mr. Yang said the relationship had reached a "stalemate." 
Relations between China and the U.S. have been tense since June 7, when Chinese dissident Fang Lizhi and his wife, Li Shuxian, took refuge in the U.S. Embassy in Beijing.
Shortly afterwards, Mr. Bush imposed a series of anti-China sanctions, including suspension of most high-level talks, which could be codified in U.S. congressional legislation in the coming weeks. 
Mr. Nixon is traveling in China as a private citizen, but he has made clear that he is an unofficial envoy for the Bush administration.
Mr. Nixon met Mr. Bush and his national security adviser, Brent Scowcroft, before coming to China on Saturday.
And he plans to brief the president at the end of the week, U.S. sources said.
Mr. Nixon was to leave China today. 
According to an American member of the Nixon party, the former president raised a number of controversial issues in his 20 hours of talks with top-level Chinese officials.
These included China's economic policies, human rights and the question of Mr. Fang.
Mr. Nixon also proposed that China restore its participation in the Fulbright Program, a U.S. government-funded academic exchange.
China pulled out of the program in July. 
In his talks, the former president urged China's leaders to acknowledge that their nation is part of the world community and welcome the infusion of outside contacts and ideas. "Ideas are going over borders, and there's no SDI ideological weapon that can shoot them down," he told a group of Americans at the U.S. Embassy on Wednesday. 
There are no signs, however, of China's yielding on key issues.
But in one minor matter, Mr. Nixon appears to have gained a concession.
In a meeting with Premier Li Peng on Monday, Mr. Nixon said that he hoped he wouldn't encounter guards with machine guns during his visit to the U.S. Embassy. 
Sure enough, when he arrived at the embassy two days later, the machine-gun-toting guards were gone -- for the first time in five months.
A few blocks away, at the U.S. ambassador's residence, the guards encircling the compound also had discarded their Uzi-model arms for the first time since early June. 
But the guards there retained their pistols, and a large contingent of plainclothes police remained nearby in unmarked cars.
Moreover, police and soldiers continue to harass Americans, who have filed several protests with the Foreign Ministry in the past week.
Several times, Chinese guards have pointed their automatic rifles at young children of U.S. diplomats and clicked the trigger.
The rifles weren't loaded. 
Your Oct. 6 article "Japan's Financial Firms Lure Science Graduates" states, "Industrial companies are accusing financial institutions of jeopardizing Japan's economy by raising the salary stakes for new employees." The Japanese industrial companies should know better.
They are barking up the wrong tree, because it is basically their fault they can't attract new employees. 
Takuma Yamamoto, president of Fujitsu Ltd., believes "the `money worship' among young people . . . caused the problem." He is just passing the buck to young people.
What's wrong with asking for more money?
Money is not everything, but it is necessary, and business is not volunteer work.
It is not unethical to choose a higher-salaried job. 
Unfortunately, Japanese manufacturers have neither good working conditions nor good compensation packages.
I get the impression that some Japanese managers believe working harder for less money is beautiful.
I visited a lot of major Japanese manufacturers, but I never felt I would want to be employed by any of them. 
Many of them recently have been spending a lot of money on public relations and advertising to improve their images, but they should realize that the most important thing is real change, not changing people's perceptions. 
If the Japanese companies are seriously considering their survival, they could do at least three things to improve the situation: raise salaries higher than those of financial institutions; improve working conditions (better offices and more vacations, for example); accept and hire more labor from outside Japan. 
Hiroshi Asada 
Washington 
In reference to your Oct. 9 page-one article "Barbara Bush Earns Even Higher Ratings Than the President," it is regrettable that you must continually define blacks by our negatives: "Among liberals, 60% have positive views of her, while 50% approve of the president's job performance.
In part, this may reflect the fact that `she speaks a more progressive language' than her husband, as Columbia's Prof. {Ethel} Klein puts it.
Among professionals, 76% have a favorable opinion of her, compared to 62% who approve of her husband's performance.
While a quarter of black voters disapprove of Mr. Bush's handling of his job, only 15% have a negative view of his spouse." 
The statistics imply that three-quarters of blacks approve of Mr. Bush's job performance and 85% of blacks approve of Mrs. Bush.
If the assumption is that it is surprising that so few blacks find Mr. and Mrs. Bush distasteful, the positive view is even more newsworthy.
Such an editorial point of view perpetuates an insidious, stereotyped perspective.
Why are we blacks continually defined by our minority and the lowest common denominator. 
Preston G. Foster 
Birmingham, Ala. 
The National Association of Securities Dealers, the self-regulatory organization for the over-the-counter securities markets, disciplined a number of firms and individuals for alleged violations of industry rules. 
Two firms were expelled from the NASD, three were suspended or barred and nine were fined. 
First Securities Group of California and a principal of the firm, Louis Fernando Vargas of Marina del Rey, Calif., were jointly fined $15,000 and expelled for alleged violations of reporting requirements on securities sales.
Also, Mr. Vargas was barred from association with any NASD member.
Neither First Securities, of Beverly Hills, nor Mr. Vargas could be reached for comment.
A telephone-information operator had no listing for either party. 
J.L. Henry & Co., Miami, and a principal of the firm, Henry I. Otero of Miami, were jointly fined $30,000 and expelled, for alleged improper use of a customer's funds, among other things.
Also, Mr. Otero was barred from association with any NASD member.
J.L. Henry hasn't any Miami telephone listing, an operator said.
Mr. Otero, who apparently has an unpublished number, also couldn't be reached. 
Biscayne Securities Corp., of Lauderhill, Fla., and a principal of the firm, Alvin Rosenblum of Plantation, Fla., were jointly fined $20,000 and given 10-day suspensions for allegedly selling securities at unfair prices.
Biscayne hasn't any telephone listing, an operator said.
Mr. Rosenblum, who apparently has an unpublished phone number, also couldn't be reached. 
Triton Securities, of Danville, Calif., and a principal of the firm, Delwin George Chase, also of Danville, were jointly fined $10,000 and given 30-day suspensions as part of a settlement.
While neither admitting nor denying wrongdoing, Triton and Mr. Chase consented to findings of violations in connection with limited-partnership sales.
Officials of Triton couldn't be reached for comment.
Mr. Chase didn't return a telephone call to his office.
Crane & Co. Securities Inc., of Mount Clemens, Mich., and its president, Glenn R. Crane, of Sterling Heights, Mich., consented to a joint fine of $10,000.
Without admitting or denying wrongdoing, they consented to findings of violations of escrow and record-keeping rules.
Mr. Crane didn't return a call seeking comment. 
First Commonwealth Securities Corp., of New Orleans, and its president, Kenneth J. Canepa, also of New Orleans, consented to a $10,000 fine.
Also, Mr. Canepa received a two-week suspension "in a principal capacity." Without admitting or denying wrongdoing, they consented to findings that they had inaccurately represented the firm's net capital, maintained inaccurate books and records, and made other violations.
Mr. Canepa confirmed he had consented to the sanctions but declined to comment further. 
Weatherly Securities Corp., New York, and three of its principals -- Dell Eugene Keehn and William Northy Prater Jr., both of Mercer Island, Wash., and Thomas Albert McFall, of Red Bank, N.J. -- consented to a fine of $20,000.
Without admitting or denying wrongdoing, they consented to findings that they failed to return funds owed to customers in connection with a limited-partnership offering. 
Reached at his office, Mr. McFall, currently chairman, said, "An implication that we failed to return investor funds is inappropriate and inaccurate." He described the situation as "an escrow problem, a timing issue," which he said was rapidly rectified, with no losses to customers. 
W.N. Whelen & Co., of Georgetown, Del., and its president, William N. Whelen Jr., also of Georgetown, were barred from transacting principal trades for 90 days and were jointly fined $15,000.
The firm and Mr. Whelen allegedly sold securities to the public at unfair prices, among other alleged violations. 
Mr. Whelen denied the firm had sold securities at unfair prices and suggested that the examination practices of the NASD need improvement.
The firm and the NASD differ over the meaning of markup and markdown, he added. 
Shearson Lehman Hutton Inc., New York, which is 62%-owned by American Express Co., consented to a $10,000 fine.
Without admitting or denying wrongdoing, the firm consented to findings that it failed to respond "in a timely manner" to the NASD's requests for information in connection with a customer complaint.
A Shearson spokesman had no comment. 
The following individuals were fined as indicated and barred from association with NASD members, or, where noted, suspended.
Except where noted, none of these people could be reached for comment or had any comment. 
Andrew Derel Adams, Killeen, Texas, fined $15,000; John Francis Angier Jr., Reddington Shores, Fla., $15,000; Mark Anthony, Arlington Heights, Ill., $10,000 and 30-day suspension; William Stirlen, Arlington Heights, Ill., $7,500 and 30-day suspension; Fred W. Bonnell, Boulder, Colo., $2,500 and six-month suspension; Michael J. Boorse, Horsham, Pa.; David Chiodo, Dallas, $5,000, barred as a principal; Camille Chafic Cotran, London, $25,000; John William Curry, fined $5,000, ordered to disgorge $30,000, one-year suspension.
John William Davis, Colonsville, Miss., fined $200,000; Jeffrey Gerard Dompierre, Valrico, Fla., $5,000 and 10-day suspension; Eugene Michael Felten, La Canada, Calif., fined $25,000, ordered to disgorge $16,072 and suspended one year; Marion Stewart Spitler, La Canada, fined $15,000, ordered to disgorge $18,444 and suspended six months. 
Mr. Felten said, "We got what amounted to a parking ticket, and by complaining about it, we ended up with a sizable fine and suspension." The matter "didn't involve anybody's securities transactions," he added. 
Victor Stanley Fishman, Longwood, Fla., fined $25,000; William Harold Floyd, Houston, $100,000; Michael Anthony Houston, Bronx, N.Y., $15,000; Amin Jalaalwalikraam, Glenham, N.Y., $60,000; Richard F. Knapp, London, $10,000 and 30-day suspension; Deborah Renee Martin, St. Louis, $15,000; Joseph Francis Muscolina Jr., Palisades Park, N.J., $15,000; Robert C. Najarian, Brooklyn Park, Minn., $15,000; Edward Robert Norwick, Nesconset, N.Y., $30,000. 
Charles D. Phipps Sr., Hermitage, Pa., fined $10,000; David Scott Rankin, Lake St. Louis, Mo., $15,000; Leigh A. Sanderoff, Gaithersburg, Md., fined $45,000, ordered to disgorge $12,252; Sandra Ann Smith, Ridgefield, N.J., $15,000; James G. Spence, Aloha, Ore., $5,000 and six-month suspension; Mona Sun, Jamaica Estates, N.Y., $60,000; William Swearingen, Minneapolis, $15,000 and six-month suspension; John Bew Wong, San Francisco, $25,000; Rabia M. Zayed, San Francisco, $50,000. 
The following were neither barred nor suspended: Stephanie Veselich Enright, Rolling Hills, Calif., fined $2,500 and ordered to disgorge $11,762; Stuart Lane Russel, Glendale, Calif., fined $2,500 and ordered to disgorge $14,821; Devon Nilson Dahl, Fountain Valley, Calif., fined $82,389.
Mr. Dahl, a registered representative in the insurance business, said he "screwed up" because he didn't realize he was breaking securities laws. "Insurance agents have been forced by their companies into becoming registered reps," he said, "but they are not providing compliance and security-type training so that we can avoid stupid mistakes." 
The following were barred or, where noted, suspended and consented to findings without admitting or denying wrongdoing: Edward L. Cole, Jackson, Miss., $10,000 fine; Rita Rae Cross, Denver, $2,500 fine and 30-day suspension; Thomas Richard Meinders, Colorado Springs, Colo., $2,000 fine, five-day suspension and eight-month suspension as a principal; Ronald A. Cutrer, Baton Rouge, La., $15,000 fine and one-month suspension; Karl Grant Hale, Midvale, Utah, $15,000 fine; Clinton P. Hayne, New Orleans, $7,500 fine and one-week suspension; Richard M. Kane, Coconut Creek, Fla., $250,000 fine; John B. Merrick, Aurora, Colo., $1,000 fine and 10-day suspension; John P. Miller, Baton Rouge, $2,000 fine and two-week suspension; Randolph K. Pace, New York, $10,000 fine and 90-day suspension; Brian D. Pitcher, New Providence, N.J., $30,000 fine; Wayne A. Russo, Bridgeville, Pa., $4,000 fine and 15-day suspension; Orville Leroy Sandberg, Aurora, Colo., $3,500 fine and 10-day suspension; Richard T. Marchese, Las Vegas, Nev., $5,000 and one-year suspension; Eric G. Monchecourt, Las Vegas, $5,000 and one-year suspension; and Robert Gerhard Smith, Carson City, Nev., two-year suspension. "I wasn't ever actively engaged in any securities activities," said Mr. Cutrer. "I never had any clients at all.
It was just a stupid mistake to get the license," he said, adding, "I'd just as soon not get into" details of the settlement. 
Program traders are fond of predicting that if they are blocked in the U.S., they will simply emigrate to foreign stock markets.
But in London and Tokyo, where computer-driven trading now plays a small but growing role, traders say a number of hurdles loom. 
Government officials, especially in Japan, probably would resist any onslaught of program trading by players trying to shrug off the U.S. furor over their activities and marching abroad with their business.
Japan is "very concerned" about the possible effects of program trading, a senior Japanese official said after the Oct. 13 stock plunge in New York. 
U.S. stock-index futures aren't even traded in Japan now.
And because of the time difference, the Japanese and the U.S. markets' trading hours don't overlap.
It all adds up to a barrier to American-style index arbitrage, the most popular form of U.S. program trading that seeks to exploit brief differences between prices of stocks in New York and the price of a futures contract in Chicago based on those stocks. 
About 11.6% of all program trading by New York Stock Exchange firms in September took place in foreign markets, according to Big Board data. 
Yet it is difficult to imagine Japan racing to introduce Chicago-style stock-index futures.
Japan's Finance Ministry already is scrutinizing institutional investors' activity to see whether policy changes are needed to cope with the current level of program trading, said Makato Utsumi, vice minister for international finance. 
Program trading has taken off in Japan since last year's introduction of home-market stock-index futures trading on the Tokyo and Osaka stock exchanges.
But regulators are wary.
They haven't forgotten the leap in share prices last Dec. 7, when the first bout of foreign-led index arbitrage drove stocks skyward in the last half-hour of trading, startling regulators who thought they had written enough rules to prevent such a swing.
Japan's Finance Ministry had set up mechanisms to limit how far futures prices could fall in a single session and to give market operators the authority to suspend trading in futures at any time. "Maybe it wasn't enough," a Finance Ministry official noted after the Dec. 7 surge.
Japan's regulators have since tightened controls on index-related stock purchases. 
Tokyo's leading program traders are the big U.S. securities houses, though the Japanese are playing catch-up.
Some U.S. firms, notably Salomon Inc. and Morgan Stanley Group Inc., have reaped a hefty chunk of their Japanese earnings from index arbitrage, both for customers and for their own accounts. (Morgan Stanley last week joined a growing list of U.S. securities firms that have stopped doing index arbitrage for their own accounts.) 
Both Deryck C. Maughan, who heads Salomon in Tokyo, and John S. Wadsworth, who heads Morgan Stanley there, ascribe a good part of their firms' success in Tokyo to their ability to offer sophisticated, futures-related investment strategies to big institutional clients.
They don't have plans to cut back. 
"It has not been disruptive in the markets here," Mr. Maughan said. "The real difference seems to be that the cash market here . . . is big enough and liquid enough that the futures market isn't having the same impact it does in America." 
The British also are scrutinizing program trades.
Index-arbitrage trading is "something we want to watch closely," an official at London's Stock Exchange said. "We don't think there is cause for concern at the moment." 
London serves increasingly as a conduit for program trading of U.S. stocks.
Market professionals said London has several attractions. 
First, the trading is done over the counter and isn't reported on either the U.S. or London stock trading tapes.
Second, it can be used to unwind positions before U.S. trading begins, but at prices pegged to the previous session's Big Board close.
In addition to the extra privacy of these trades, the transactions can often be less expensive to execute, because the parties don't have to pay a floor brokerage fee or a specialist's fee. 
Still, "Much less {index-arbitrage activity} is done over here than in the U.S." said Richard Barfield, chief investment manager at Standard Life Assurance Co., which manages about #15 billion ($23.72 billion) in United Kingdom institutional funds. 
Britain has two main index-arbitrage instruments.
A Financial Times-Stock Exchange 100-share index option contract is traded on the London Stock Exchange's Traded Options Market.
And an FT-SE futures contract is traded on the London International Financial Futures Exchange.
Both contracts have gained a following since the 1987 global market crash. 
The average number of FT-SE option contracts traded on the London exchange has surged nearly tenfold since the contract's launch in 1984.
This year, the average of daily contracts traded totaled 9,118, up from 4,645 a year earlier and from 917 in 1984. 
But a survey early this summer indicated that the volume of index-options trading was only 15% of the size of the underlying equity market, exchange officials said.
This compares with estimates that the U.S. "derivatives" market is perhaps four times as large as the underlying domestic market. 
The House voted to boost the federal minimum wage for the first time since early 1981, casting a solid 382-37 vote for a compromise measure backed by President Bush. 
The vote came after a debate replete with complaints from both proponents and critics of a substantial increase in the wage floor.
Advocates said the 90-cent-an-hour rise, to $4.25 an hour by April 1991, is too small for the working poor, while opponents argued that the increase will still hurt small business and cost many thousands of jobs. 
But the legislation reflected a compromise agreed to on Tuesday by President Bush and Democratic leaders in Congress, after congressional Republicans urged the White House to bend a bit from its previous resistance to compromise. 
So both sides accepted the compromise, which would lead to the first lifting of the minimum wage since a four-year law was enacted in 1977, raising the wage to $3.35 an hour from $2.65.
Under the measure passed yesterday, the minimum wage would rise to $3.80 next April. 
The Senate plans to take up the measure quickly and is expected to pass it. 
"There are no smiles about this bill," Rep. Pat Williams (D., Mont.) said during House floor debate yesterday.
But "because it's all we've got, I'm going to vote for it." 
While the minimum wage had traditionally been pegged at half the average U.S. manufacturing wage, the level of $4.25 an hour in 1991 will still be less than 35% of average factory pay, Mr. Williams said. 
But Rep. Marge Roukema (R., N.J.) instead praised the House's acceptance of a new youth "training" wage, a subminimum that GOP administrations have sought for many years.
Adopting a training-wage policy means "getting beyond the nickel and diming of the minimum wage," Mrs. Roukema said. 
Policy makers regard the youth wage as helping to limit the loss of jobs from an increase in the minimum wage, but they have lately touted it as necessary to help impart job skills to entrants into the work force. 
Labor unions and Democrats long fought the idea, but recently acceded to it in the face of Bush administration insistence.
The compromise sets the training wage at $3.35 an hour next April, and at $3.61 an hour, or 85% of the minimum wage, in April 1991. 
Employers can pay the subminimum for 90 days, without restriction, to workers with less than six months of job experience, and for another 90 days if the company uses a government-certified training program for the young workers.
The training wage covers only workers who are 16 to 19 years old. 
The White House previously insisted on an unrestricted six-month training wage that could be paid any time a worker of any age took a new job. 
The U.S. Chamber of Commerce, still opposed to any mininum-wage increase, said the compromise plan to lift the wage floor 27% in two stages between April 1990 and April 1991 "will be impossible for many employers to accommodate and will result in the elimination of jobs for American workers and higher prices for American consumers." 
Zenith Data Systems Corp., a subsidiary of Zenith Electronics Corp., received a $534 million Navy contract for software and services of microcomputers over an 84-month period. 
Rockwell International Corp. won a $130.7 million Air Force contract for AC-130U gunship replacement aircraft. 
Martin Marietta Corp. was given a $29.9 million Air Force contract for low-altitude navigation and targeting equipment. 
Federal Data Corp. got a $29.4 million Air Force contract for intelligence data handling. 
For six years, T. Marshall Hahn Jr. has made corporate acquisitions in the George Bush mode: kind and gentle.
The question now: Can he act more like hard-charging Teddy Roosevelt? 
Mr. Hahn, the 62-year-old chairman and chief executive officer of Georgia-Pacific Corp. is leading the forest-product concern's unsolicited $3.19 billion bid for Great Northern Nekoosa Corp. Nekoosa has given the offer a public cold shoulder, a reaction Mr. Hahn hasn't faced in his 18 earlier acquisitions, all of which were negotiated behind the scenes. 
So far, Mr. Hahn is trying to entice Nekoosa into negotiating a friendly surrender while talking tough. "We are prepared to pursue aggressively completion of this transaction," he says. 
But a takeover battle opens up the possibility of a bidding war, with all that implies.
If a competitor enters the game, for example, Mr. Hahn could face the dilemma of paying a premium for Nekoosa or seeing the company fall into the arms of a rival. 
Given that choice, associates of Mr. Hahn and industry observers say the former university president -- who has developed a reputation for not overpaying for anything -- would fold. 
"There's a price above which I'm positive Marshall has the courage not to pay," says A.D. Correll, Georgia-Pacific's executive vice president for pulp and paper.
Says long-time associate Jerry Griffin, vice president, corporate development, at WTD Industries Inc.: "He isn't of the old school of winning at any cost." 
He also is a consensus manager, insiders say.
The decision to make the bid for Nekoosa, for example, was made only after all six members of Georgia-Pacific's management committee signed onto the deal -- even though Mr. Hahn knew he wanted to go after the company early on, says Mr. Correll.
Associates say Mr. Hahn picked up that careful approach to management as president of Virginia Polytechnic Institute.
Assuming that post at the age of 35, he managed by consensus, as is the rule in universities, says Warren H. Strother, a university official who is researching a book on Mr. Hahn.
But he also showed a willingness to take a strong stand.
In 1970, Mr. Hahn called in state police to arrest student protesters who were occupying a university building. 
That impressed Robert B. Pamplin, Georgia-Pacific's chief executive at the time, whom Mr. Hahn had met while fundraising for the institute.
In 1975, Mr. Pamplin enticed Mr. Hahn into joining the company as executive vice president in charge of chemicals; the move befuddled many in Georgia-Pacific who didn't believe a university administrator could make the transition to the corporate world. 
But Mr. Hahn rose swiftly through the ranks, demonstrating a raw intelligence that he says he knew he possessed early on.
The son of a physicist, Mr. Hahn skipped first grade because his reading ability was so far above his classmates.
Moving rapidly through school, he graduated Phi Beta Kappa from the University of Kentucky at age 18, after spending only 2 1/2 years in college.
He earned his doctorate in nuclear physics from the Massachusetts Institute of Technology. 
Mr. Hahn agrees that he has a "retentive" memory, but friends say that's an understatement.
They call it "photographic". 
Mr. Hahn also has engineered a surprising turnaround of Georgia-Pacific.
Taking over as chief executive officer in 1983, he inherited a company that was mired in debt and hurt by a recession-inspired slide in its building-products business.
Mr. Hahn began selling non-core businesses, such as oil and gas and chemicals.
He even sold one unit that made vinyl checkbook covers. 
At the same time, he began building up the pulp and paper segment of the company while refocusing building products on home repair and remodeling, rather than materials for new-home construction.
The idea was to buffet building products from cycles in new-home construction. 
The formula has paid off, so far.
Georgia-Pacific's sales climbed to $9.5 billion last year, compared with $6 billion in 1983, when Mr. Hahn took the reins.
Profit from continuing operations has soared to $467 million from $75 million.
Mr. Hahn attributes the gains to the philosophy of concentrating on what a company knows best. 
"The record of companies that have diversified isn't all that impressive," he says. 
Nekoosa wouldn't be a diversification.
It would be a good match, Mr. Hahn and many analysts say, of two healthy companies with high-quality assets and strong cash flows.
The resulting company would be the largest forest-products concern in the world with combined sales of more than $13 billion. 
But can Mr. Hahn carry it off?
In this instance, industry observers say, he is entering uncharted waters.
Says Kathryn McAuley, an analyst at First Manhattan Co.: "This is the greatest acquisition challenge he has faced." 
A House-Senate conference approved major portions of a package for more than $500 million in economic aid for Poland that relies heavily on $240 million in credit and loan guarantees in fiscal 1990 in hopes of stimulating future trade and investment. 
For the Agency for International Development, appropriators approved $200 million in secondary loan guarantees under an expanded trade credit insurance program, and total loan guarantees for the Overseas Private Investment Corp. are increased by $40 million over fiscal 1989 as part of the same Poland package. 
The conference approved at least $55 million in direct cash and development assistance as well, and though no decision was made, both sides are committed to adding more than $200 million in economic support funds and environmental initiatives sought by the Bush administration. 
The agreement on Poland contrasts with the major differences remaining over the underlying foreign aid bill, which has already provoked veto threats by the White House and is sharply confined under this year's budget.
These fiscal pressures are also a factor in shaping the Poland package, and while more ambitious authorizing legislation is still pending, the appropriations bill in conference will be more decisive on U.S. aid to Eastern Europe. 
To accommodate the additional cash assistance, the House Appropriations Committee last week was required to reallocate an estimated $140 million from the Pentagon.
And though the size of the loan guarantees approved yesterday is significant, recent experience with a similar program in Central America indicates that it could take several years before the new Polish government can fully use the aid effectively. 
The action on Poland came as the conference separately approved $220 million for international population planning activities, an 11% increase over fiscal 1989.
The House and Senate are divided over whether the United Nations Population Fund will receive any portion of these appropriations, but the size of the increase is itself significant. 
In a second area of common concern, the world environment, an additional $15 million will be provided in development assistance to fund a series of initiatives, related both to global warming and the plight of the African elephant. 
The sweeping nature of the bill draws a variety of special interest amendments, running from an import exemption for a California airplane museum to a small but intriguing struggle among sugar producing nations over the fate of Panama's quota of exports to the profitable U.S. market. 
Panama was stripped of this right because of U.S. differences with the Noriega regime, but the Central American country would have received a quota of 30,537 metric tons over a 21-month period ending Sept. 30, 1990.
About a quarter of this share has already been reallocated, according to the industry, but the remaining 23,403 tons are still a lucrative target for growers because the current U.S. price of 18 cents a pound runs as much as a nickel a pound above the world rate. 
The potential sales are nearly $9.3 million, and House Majority Whip William Gray (D., Pa.) began the bidding this year by proposing language that the quota be allocated to English-speaking countries of the Caribbean, such as Jamaica and Barbados.
Rep. Jerry Lewis, a conservative Californian, added a provision of his own intended to assist Bolivia, and the Senate then broadened the list further by including all countries in the U.S. Caribbean Basin initiate as well as the Philippines-backed by the powerful Hawaii Democrat Sen. Daniel Inouye.
Jamaica, wary of upsetting its Caribbean Basin allies, has apparently instructed its lobbyist to abandon the provision initially drafted by Mr. Gray, but the greater question is whether Mr. Inouye, who has strong ties to the sugar industry, is able to insert a claim by the Philippines. 
In separate floor action, the House waived budget restrictions and gave quick approval to $3.18 billion in supplemental appropriations for law enforcement and anti-drug programs in fiscal 1990.
The funding is attached to an estimated $27.1 billion transportation bill that goes next to the Senate and carries with it a proposed permanent smoking ban on virtually all U.S. domestic airline flights. 
The leadership hopes to move the compromise measure promptly to the White House, but in recent days, the Senate has been as likely to bounce bills back to the House.
The most recent example was a nearly $17.3 billion fiscal 1990 bill funding the State, Justice and Commerce departments.
And after losing a battle Tuesday night with the Senate Foreign Relations Committee, appropriators from both houses are expected to be forced back to conference. 
Beauty Takes Backseat 
To Safety on Bridges 
EVERYONE AGREES that most of the nation's old bridges need to be repaired or replaced.
But there's disagreement over how to do it. 
Highway officials insist the ornamental railings on older bridges aren't strong enough to prevent vehicles from crashing through.
But other people don't want to lose the bridges' beautiful, sometimes historic, features. 
"The primary purpose of a railing is to contain a vehicle and not to provide a scenic view," says Jack White, a planner with the Indiana Highway Department.
He and others prefer to install railings such as the "type F safety shape," a four-foot-high concrete slab with no openings. 
In Richmond, Ind., the type F railing is being used to replace arched openings on the G Street Bridge.
Garret Boone, who teaches art at Earlham College, calls the new structure "just an ugly bridge" and one that blocks the view of a new park below. 
In Hartford, Conn., the Charter Oak Bridge will soon be replaced, the cast-iron medallions from its railings relegated to a park. 
Compromises are possible.
Citizens in Peninsula, Ohio, upset over changes to a bridge, negotiated a deal: The bottom half of the railing will be type F, while the top half will have the old bridge's floral pattern. 
Similarly, highway engineers agreed to keep the old railings on the Key Bridge in Washington, D.C., as long as they could install a crash barrier between the sidewalk and the road. 
Tray Bon?
Drink Carrier 
Competes With Cartons 
PORTING POTABLES just got easier, or so claims Scypher Corp., the maker of the Cup-Tote. 
The Chicago company's beverage carrier, meant to replace cardboard trays at concession stands and fast-food outlets, resembles the plastic loops used on six-packs of beer, only the loops hang from a web of strings.
The new carrier can tote as many as four cups at once. 
Inventor Claire Marvin says his design virtually eliminates spilling.
Lids aren't even needed.
He also claims the carrier costs less and takes up less space than most paper carriers.
A few fast-food outlets are giving it a try. 
The company acknowledges some problems.
A driver has to find something to hang the carrier on, so the company supplies a window hook.
While it breaks down in prolonged sunlight, it isn't recyclable.
And unlike some trays, there's no place for food. 
Spirit of Perestroika 
Touches Design World 
AN EXCHANGE of U.S. and Soviet designers promises change on both sides. 
An exhibition of American design and architecture opened in September in Moscow and will travel to eight other Soviet cities.
The show runs the gamut, from a blender to chairs to a model of the Citicorp building. 
The event continues into next year and includes an exchange program to swap design teachers at Carnegie-Mellon and Leningrad's Mutchin Institute. 
Dan Droz, leader of the Carnegie-Mellon group, sees benefits all around.
The Soviets, who normally have few clients other than the state, will get "exposure to a market system," he says.
Americans will learn more about making products for the Soviets. 
Mr. Droz says the Soviets could even help U.S. designers renew their sense of purpose. "In Moscow, they kept asking us things like, `Why do you make 15 different corkscrews, when all you need is one good one? '" he says. "They got us thinking maybe we should be helping U.S. companies improve existing products rather than always developing new ones." 
Seed for Jail Solution 
Fails to Take Root 
IT'S A TWO BIRDS with one stone deal: Eggers Group architects propose using grain elevators to house prisoners.
It would ease jail overcrowding while preserving historic structures, the company says. 
But New York state, which is seeking solutions to its prison cell shortage, says "no." 
Grain elevators built in the 1920s and '30s have six-inch concrete walls and a tubular shape that would easily contain semicircular cells with a control point in the middle, the New York firm says.
Many are far enough from residential areas to pass public muster, yet close enough to permit family visits. 
Besides, Eggers says, grain elevators are worth preserving for aesthetic reasons -- one famed architect compared them to the pyramids of Egypt. 
A number of cities -- including Minneapolis, Philadelphia and Houston -- have vacant grain elevators, Eggers says.
A medium-sized one in Brooklyn, it says, could be altered to house up to 1,000 inmates at a lower cost than building a new prison in upstate New York.
A spokesman for the state, however, calls the idea "not effective or cost efficient." 
The Labor Department cited USX Corp. for numerous health and safety violations at two Pennsylvania plants, and proposed $7.3 million in fines, the largest penalty ever proposed for alleged workplace violations by an employer. 
The department's Occupational Safety and Health Administration proposed fines of $6.1 million for alleged violations at the company's Fairless Hills, Pa., steel mill; that was a record for proposed penalties at any single facility.
OSHA cited nearly 1,500 alleged violations of federal electrical, crane-safety, record-keeping and other requirements. 
A second citation covering the company's Clairton, Pa., coke works involved more than 200 alleged violations of electrical-safety and other requirements, for which OSHA proposed $1.2 million in fines. 
Labor Secretary Elizabeth Dole said, "The magnitude of these penalties and citations is matched only by the magnitude of the hazards to workers which resulted from corporate indifference to worker safety and health, and severe cutbacks in the maintenance and repair programs needed to remove those hazards." 
OSHA said there have been three worker fatalities at the two plants in the past two years and 17 deaths since 1972.
Gerard Scannell, the head of OSHA, said USX managers have known about many of the safety and health deficiencies at the plants for years, "yet have failed to take necessary action to counteract the hazards." 
"Particularly flagrant," Mrs. Dole said, "are the company's numerous failures to properly record injuries at its Fairless works, in spite of the firm promise it had made in an earlier corporate-wide settlement agreement to correct such discrepancies." That settlement was in April 1987. 
A USX spokesman said the company hadn't yet received any documents from OSHA regarding the penalty or fine. "Once we do, they will receive very serious evaluation," the spokesman said. "No consideration is more important than the health and safety of our employees." 
USX said it has been cooperating with OSHA since the agency began investigating the Clairton and Fairless works.
He said that, if and when safety problems were identified, they were corrected. 
The USX citations represented the first sizable enforcement action taken by OSHA under Mr. Scannell.
He has promised stiffer fines, though the size of penalties sought by OSHA have been rising in recent years even before he took office this year. 
"The big problem is that USX management has proved unwilling to devote the necessary resources and manpower to removing hazards and to safeguarding safety and health in the plants," said Linda Anku, OSHA regional administrator in Philadelphia.
USX has 15 working days to contest the citations and proposed penalties, before the independent Occupational Safety and Health Review Commission. 
Before the USX case, OSHA's largest proposed fine for one employer was $4.3 million for alleged safety violations at John Morrell & Co., a meatpacking subsidiary of United Brands Co., Cincinnati.
The company is contesting the fine. 
Due to an editing error, a letter to the editor in yesterday's edition from Frederick H. Hallett mistakenly identified the NRDC.
It should be the Natural Resources Defense Council. 
(See "Letters to the Editor: Ozone Dangers Aren't Up in the Air" -- WSJ Nov. 1, 1989) 
Your Oct. 6 editorial "The Ill Homeless" referred to research by us and six of our colleagues that was reported in the Sept. 8 issue of the Journal of the American Medical Association.
Your comments implied we had discovered that the "principal cause" of homelessness is to be found in the large numbers of mentally ill and substance-abusing people in the homeless population.
We have made no such statement.
It is clear that most mentally ill people and most alcoholics do not become homeless.
The "causes" of homelessness are poorly understood and complex in any individual case. 
In quoting from our research you emphasized the high prevalance of mental illness and alcoholism.
You did not note that the homeless people we examined had a multitude of physical disorders in addition to their psychiatric problems and substance abuse.
They suffered from malnutrition, chest diseases, cardiovascular disorders, skin problems, infectious diseases and the aftereffects of assaults and rape.
Homeless people not only lack safety, privacy and shelter, they also lack the elementary necessities of nutrition, cleanliness and basic health care.
In a recent report, the Institute of Medicine pointed out that certain health problems may predispose a person to homelessness, others may be a consequence of it, and a third category is composed of disorders whose treatment is difficult or impossible if a person lacks adequate shelter.
The interactions between health and homelessness are complex, defying sweeping generalizations as to "cause" or "effect." 
If we look to the future, preventing homelessness is an important objective.
This will require us to develop a much more sophisticated understanding of the dynamics of homelessness than we currently possess, an understanding that can be developed only through careful study and research. 
William R. Breakey M.D. 
Pamela J. Fischer M.D. 
Department of Psychiatry 
Johns Hopkins University 
School of Medicine 
Baltimore 
A study by Tulane Prof.
James Wright says homelessness is due to a complex array of problems, with the common thread of poverty.
The study shows that nearly 40% of the homeless population is made up of women and children and that only 25% of the homeless exhibits some combination of drug, alcohol and mental problems. 
According to Dr. Wright, homelessness is "simultaneously a housing problem, an employment problem, a demographic problem, a problem of social disaffiliation, a mental health problem, a family violence problem, a problem created by the cutbacks in social welfare spending, a problem resulting from the decay of the traditional nuclear family, and a problem intimately connected to the recent increase in the number of persons living below the poverty level." 
Leighton E. Cluff M.D. 
President 
Robert Wood Johnson Foundation 
Princeton, N.J. 
To quote the highly regarded director of a privately funded drop-in center for the homeless in New York: "If you're homeless, you don't sleep for fear of being robbed or murdered.
After your first three weeks of sleep deprivation, you're scarcely in touch with reality any more; without psychiatric treatment, you may well be unable to fend for yourself ever again." 
Some of the homeless, obviously, had pre-existing mental illness or addiction.
But many others have fallen through cracks in the economy into the grim, brutal world of our city streets.
Once there, what ways of escape are open to them other than drink, drugs or insanity? 
Maxwell R.D. Vos 
Brooklyn, N.Y. 
You dismiss as "sentimental" the view that the reduction of federal housing-assistance programs by 77% might have played a significant role in the increased number of men and women sleeping on our city streets during the Reagan-Bush years.
There is no sign that you bothered to consider the inverse of your logic: namely, that mental illness and substance abuse might be to some degree consequences rather than causes of homelessness.
Your research stopped when a convenient assertion could be made. 
Robert S. Jenkins 
Cambridge, Mass. 
Of the approximately 200 sponsors of the recent march in Washington for the homeless, you chose to cite such groups as the National Association of Home Builders and the International Union of Bricklayers and Allied Craftsmen, insinuating that the march got its major support from self-serving groups that "know a good thing when they see it," and that the crusade was based on greed or the profit motive.
But isn't the desire for profit the driving force behind those who subscribe to, and advertise in, your paper?
Why didn't you mention the YMCA or the YWCA or Catholic Charities USA or a hundred other nonprofit organizations that participated in the march? 
As for the findings on the 203 Baltimore homeless who underwent psychiatric examinations, I suggest you conduct your own survey.
Choose 203 business executives, including, perhaps, someone from your own staff, and put them out on the streets, to be deprived for one month of their homes, families and income.
I would predict that within a short time most of them would find Thunderbird a satisfactory substitute for Chivas Regal and that their "normal" phobias, anxieties, depressions and substance abuse would increase dramatically. 
Ruth K. Nelson 
Cullowhee, N.C. 
ROGERS COMMUNICATIONS Inc. said it plans to raise 175 million to 180 million Canadian dollars (US$148.9 million to $153.3 million) through a private placement of perpetual preferred shares.
Perpetual preferred shares aren't retractable by the holders, the company said.
Rogers said the shares will be convertible into Class B shares, but that the company has the option to redeem the shares before a conversion takes place.
A spokesman for the Toronto cable television and telecommunications concern said the coupon rate hasn't yet been fixed, but will probably be set at around 8%.
He declined to discuss other terms of the issue. 
The House passed legislation designed to make it easier for the Transportation Department to block airline leveraged buy-outs. 
The final vote came after the House rejected Republican efforts to weaken the bill and approved two amendments sought by organized labor.
The Bush administration has threatened to veto such a bill because of what it views as an undesirable intrusion into the affairs of industry, but the 300-113 vote suggests that supporters have the potential to override a veto. 
The broader question is where the Senate stands on the issue.
While the Senate Commerce Committee has approved legislation similar to the House bill on airline leveraged buy-outs, the measure hasn't yet come to the full floor. 
Although the legislation would apply to acquisitions involving any major airline, it is aimed at giving the Transportation Department the chance to review in advance transactions financed by large amounts of debt. "The purpose of the bill is to put the brakes on airline acquisitions that would so load a carrier up with debt that it would impede safety or a carrier's ability to compete," Rep. John Paul Hammerschmidt, (R., Ark.) said. 
The bill, as it was approved by the House Public Works and Transportation Committee, would give the Transportation Department up to 50 days to review any purchase of 15% or more of the stock in an airline.
The department would be required to block the buy-out if the acquisition is likely to financially weaken a carrier so that safety would be impaired; its ability to compete would be sharply diminished; it would be put into foreign control; or if the transaction would result in the sale of airline-related assets -- unless selling such assets had an overriding public benefit. 
The House approved an amendment offered by Rep. Peter DeFazio (D., Ore.) that would, in addition to the previous criteria, also require the department to block the acquisition of an airline if the added debt incurred were likely to result in a reduction in the number of the carrier's employees, or their wages or benefits. 
Rep. James Traficant (D., Ohio), said the amendment, which passed 271-147, would "let the American worker know that we consider them occasionally." But Rep. Hammerschmidt said that the provision, which he dubbed a "special interest" amendment, was likely to make the bill even more controversial. 
On Tuesday, the House approved a labor-backed amendment that would require the Transportation Department to reject airline acquisitions if the person seeking to purchase a carrier had run two or more airlines previously that have filed for protection from creditors under Chapter 11 of the federal Bankruptcy Code. 
The provision, called the "two-time-losers" amendment by its supporters, apparently was aimed at preventing Texas Air Corp. Chairman Frank Lorenzo from attempting to take over another airline. 
Follow-up report: 
You now may drop by the Voice of America offices in Washington and read the text of what the Voice is broadcasting to those 130 million people around the world who tune in to it each week.
You can even take notes -- extensive notes, for the Voice folks won't look over your shoulder -- about what you read.
You can do all this even if you're not a reporter or a researcher or a scholar or a member of Congress. 
And my newspaper can print the text of those broadcasts. 
Until the other day, you as an ordinary citizen of this democracy had no right to see what your government was telling your cousins around the world.
That was the law.
And I apparently had no right to print hither what the Voice was booming to yon. 
It was censorship.
It was outrageous.
And it was stupid. 
The theory was that the Voice is a propaganda agency and this government shouldn't propagandize its own people.
That sounds neat, but this government -- any government -- propagandizes its own people every day.
Government press releases, speeches, briefings, tours of military facilities, publications are all propaganda of sorts.
Propaganda is just information to support a viewpoint, and the beauty of a democracy is that it enables you to hear or read every viewpoint and then make up your own mind on an issue. 
The restrictions on viewing and dissemination of Voice material were especially absurd: An agency in the information business was not being allowed to inform. 
In June 1988, I wrote in this space about this issue.
Assuming it wasn't one of those columns that you clipped and put on the refrigerator door, I'll review the facts. 
The Voice of America is a government agency that broadcasts news and views -- some might say propaganda -- in 43 languages to 130 million listeners around the world.
It does a first-rate job.
Its budget$184 million -- is paid for by you.
But a 1948 law barred the "dissemination" of that material in the U.S.
The law let scholars, reporters and researchers read texts of VOA material, only at VOA headquarters in Washington, but it barred them from copying texts.
And, of course, there's that word "dissemination." 
How's that again? "You may come by the agency to read but not copy either manually or by photocopying," a Voice official explained when I asked.
What if I tune in my short-wave radio, transcribe an editorial or program, and print it in my newspaper? "Nor are you free to reprint such material," I was advised. 
That sounded a lot like censorship, so after years of letters and conversations that went nowhere, I sued. 
A couple of weeks ago, I lost the case in federal district court in Des Moines.
At least, that's the way it was reported.
And, indeed, the lawsuit was dismissed. 
But I -- I like to think of it in terms of we, all of us -- won the point. 
For a funny thing happened on the way to the ruling: The United States Information Agency, which runs the Voice, changed its position on three key points. 
-- The USIA said that, on reflection, of course I could print anything I could get my hands on.
The word dissemination, it decided, referred only to itself. "The USIA officially and publicly declared the absolute right of everyone except the USIA to disseminate agency program materials in the United States," my lawyer, the scholarly Mark McCormick of Des Moines, said in a memo pointing out the facts and trying to make me feel good after the press reported that I had lost.
The court noted the new USIA position but, just in case, officially found "that Congress did not intend to preclude plaintiffs from disseminating USIA information domestically." 
-- The USIA said that, on reflection, anyone could view the VOA materials, not just the reporters, scholars, researchers and congressmen who are mentioned in the statute. "The USIA publicly and officially stated in the litigation that all persons are allowed access to the materials, notwithstanding the statutory designations, because the USIA has determined that it will not check the credentials of any person appearing and requesting to see the materials," Mr. McCormick noted. 
-- And the USIA said that all of us could take extensive notes. "The agency publicly and officially declared in the lawsuit that persons who examine the materials may make notes and, while the agency position is that persons may not take verbatim notes, no one will check to determine what notes a person has taken," Mr. McCormick reported. 
I had sought, in my suit, the right to print Voice material, which had been denied me, and I had sought a right to receive the information, arguing in effect that a right to print government information isn't very helpful if I have no right to get the information. 
But the court disagreed. "The First Amendment proscribes the government from passing laws abridging the right to free speech," Judge Donald O'Brien ruled. "The First Amendment does not prescribe a duty upon the government to assure easy access to information for members of the press." 
So now the situation is this: You have a right to read Voice of America scripts if you don't mind traveling to Washington every week or so and visiting the Voice office during business hours.
I have a right to print those scripts if I go there and laboriously -- but no longer surreptitiously -- copy them out in long hand.
But neither of us can copy the material on a Xerox machine or have it sent to us. 
In an era when every government agency has a public-relations machine that sends you stuff whether you want it or not, this does seem odd. 
Indeed, Judge O'Brien ruled that "it would be easy to conclude that the USIA's position is `inappropriate or even stupid, '" but it's the law.
So the next step, I suspect, is to try to get the law changed.
We (I assume you're in this with me at this point) need to get three words -- "for examination only" -- eliminated from the law. 
Section 501 of the United States Information and Educational Exchange Act of 1948 says Voice material shall be available to certain of us (but now, thanks to the USIA's new position, all of us) "for examination only." If those words weren't there, the nice people at the Voice would be able to send you the information or, at the very least, let you photocopy it. 
This is not a trivial issue. 
"You have . . . raised important questions which ought to be answered: What does USIA say about America abroad; how do we say it; and how can American taxpayers get the answers to these questions?" a man wrote me a couple of years ago.
The man was Charles Z. Wick.
At the time, he was director of the 
He had no answers then. 
Now there are some. 
This democracy is suddenly a little more democratic. 
I feel pretty good about it. 
Mr. Gartner is editor and co-owner of the Daily Tribune in Ames, Iowa, and president of NBC News in New York. 
R. Gordon McGovern was forced out as Campbell Soup Co. 's president and chief executive officer, the strongest evidence yet of the power that Dorrance family members intend to wield in reshaping the troubled food company. 
Herbert M. Baum, the 53-year-old president of the company's Campbell U.S.A. unit, and Edwin L. Harper, 47, the chief financial officer, will run Campbell as a team, dividing responsibilities rather evenly until a successor is named.
The board already has been searching for strong outside candidates, including food-industry executives with considerable international experience. 
Wall Street reacted favorably to Mr. McGovern's departure and its implications.
In heavy trading on the New York Stock Exchange, Campbell's shares rose $3.375 to close at $47.125. 
"The profit motive of the major shareholders has clearly changed for the better," said John McMillin, a food industry analyst for Prudential-Bache in New York.
Mr. McGovern was widely seen as sales, and not profit, oriented. "New managers would think a little more like Wall Street," Mr. McMillin added.
Some of the surge in the stock's price appeared to be linked to revived takeover speculation, which has contributed to volatility of Campbell shares in recent months. 
Campbell's international businesses, particularly in the U.K. and Italy, appear to be at the heart of its problems.
Growth has fallen short of targets and operating earnings are far below results in U.S. units. 
For example, Campbell is a distant third in the U.K. frozen foods market, where it recently paid 24 times earnings for Freshbake Foods PLC and wound up with far more capacity than it could use.
Similarly, Campbell's Italian biscuit operation, D. Lazzaroni & Co., has been hurt by overproduction and distribution problems. 
Such problems will require considerable skill to resolve.
However, neither Mr. Baum nor Mr. Harper has much international experience. 
Mr. Baum, a seasoned marketer who is said to have a good rapport with Campbell employees, will have responsibility for all domestic operations except the Pepperidge Farm unit.
Mr. Harper, a veteran of several manufacturing companies who joined Campbell in 1986, will take charge of all overseas operations as well as Pepperidge. 
In an joint interview yesterday, both men said they would like to be the company's next chief executive. 
Mr. McGovern, 63, had been under intense pressure from the board to boost Campbell's mediocre performance to the level of other food companies.
The board is dominated by the heirs of the late John T. Dorrance Jr., who controlled about 58% of Campbell's stock when he died in April.
In recent months, Mr. Dorrance's children and other family members have pushed for improved profitability and higher returns on their equity. 
In August, the company took a $343 million pretax charge against fiscal 1989 earnings when it announced a world-wide restructuring plan.
The plan calls for closing at least nine plants and eliminating about 3,600 jobs.
But analysts said early results from the reorganization have been disappointing, especially in Europe, and there were signs that the board became impatient. 
Campbell officials said Mr. McGovern wasn't available yesterday to discuss the circumstances of his departure.
The company's prepared statement quoted him as saying, "The CEO succession is well along and I've decided for personal reasons to take early retirement." 
But people familiar with the agenda of the board's meeting last week in London said Mr. McGovern was fired. 
Mr. McGovern himself had said repeatedly that he intended to stay on until he reached the conventional retirement age of 65 in October 1991, "unless I get fired." Campbell said Mr. McGovern had withdrawn his name as a candidate for re-election as a director at the annual shareholder meeting, scheduled for Nov. 17. 
For fiscal 1989, Mr. McGovern received a salary of $877,663.
He owns about 45,000 shares of Campbell stock and has options to buy more than 100,000 additional shares.
He will be eligible for an annual pension of more than $244,000 with certain other fringe benefits. 
During Mr. McGovern's nine-year term as president, the company's sales rose to $5.7 billion from $2.8 billion and net income increased to $274 million from $130 million, the statement said. 
Mr. Baum said he and Mr. Harper both advocated closing some plants as long ago as early 1988. "You've got to make the restructuring work," said Mr. Baum. "You've got to make those savings now." 
Mr. Harper expressed confidence that he and Mr. Baum can convince the board of their worthiness to run the company. "We look upon this as a great opportunity to prove the fact that we have a tremendous management team," he said.
He predicted that the board would give the current duo until early next year before naming a new chief executive. 
Mr. Baum said the two have orders to "focus on bottom-line profits" and to "take a hard look at our businesses -- what is good, what is not so good." Analysts generally applaud the performance of Campbell U.S.A., the company's largest division, which posted 6% unit sales growth and a 15% improvement in operating profit for fiscal 1989. "The way that we've been managing Campbell U.S.A. can hopefully spread to other areas of the company," Mr. Baum said. 
In the interview at headquarters yesterday afternoon, both men exuded confidence and seemed to work well together. "You've got two champions sitting right before you," said Mr. Baum. "We play to win." 
Wednesday, November 1, 1989 
The key U.S. and foreign annual interest rates below are a guide to general levels but don't always represent actual transactions. 
PRIME RATE: 10 1/2%.
The base rate on corporate loans at large U.S. money center commercial banks. 
FEDERAL FUNDS: 9 1/2% high, 8 3/4% low, 8 3/4% near closing bid, 9% offered.
Reserves traded among commercial banks for overnight use in amounts of $1 million or more.
Source: Fulton Prebon (U.S.A.) Inc. 
DISCOUNT RATE: 7%.
The charge on loans to depository institutions by the New York Federal Reserve Bank. 
CALL MONEY: 9 3/4%.
The charge on loans to brokers on stock exchange collateral. 
COMMERCIAL PAPER placed directly by General Motors Acceptance Corp.: 8.55% 30 to 44 days; 8.25% 45 to 59 days; 8.45% 60 to 89 days; 8% 90 to 119 days; 7.90% 120 to 149 days; 7.80% 150 to 179 days; 7.55% 180 to 270 days. 
COMMERCIAL PAPER: High-grade unsecured notes sold through dealers by major corporations in multiples of $1,000: 8.65% 30 days; 8.575% 60 days; 8.50% 90 days. 
CERTIFICATES OF DEPOSIT: 8.07% one month; 8.06% two months; 8.04% three months; 7.95% six months; 7.88% one year.
Average of top rates paid by major New York banks on primary new issues of negotiable C.D.s, usually on amounts of $1 million and more.
The minimum unit is $100,000.
Typical rates in the secondary market: 8.60% one month; 8.55% three months; 8.35% six months. 
BANKERS ACCEPTANCES: 8.50% 30 days; 8.48% 60 days; 8.30% 90 days; 8.15% 120 days; 8.07% 150 days; 7.95% 180 days.
Negotiable, bank-backed business credit instruments typically financing an import order. 
LONDON LATE EURODOLLARS: 8 3/4% to 8 5/8% one month; 8 13/16% to 8 11/16% two months; 8 3/4% to 8 5/8% three months; 8 5/8% to 8 1/2% four months; 8 1/2% to 8 7/16% five months; 8 1/2% to 8 3/8% six months. 
LONDON INTERBANK OFFERED RATES (LIBOR): 8 3/4% one month; 8 3/4% three months; 8 1/2% six months; 8 7/ 16% one year.
The average of interbank offered rates for dollar deposits in the London market based on quotations at five major banks. 
FOREIGN PRIME RATES: Canada 13.50%; Germany 9%; Japan 4.875%; Switzerland 8.50%; Britain 15%.
These rate indications aren't directly comparable; lending practices vary widely by location. 
TREASURY BILLS: Results of the Monday, October 30, 1989, auction of short-term U.S. government bills, sold at a discount from face value in units of $10,000 to $1 million: 7.78% 13 weeks; 7.62% 26 weeks. 
FEDERAL HOME LOAN MORTGAGE CORP. (Freddie Mac): Posted yields on 30-year mortgage commitments for delivery within 30 days. 9.82%, standard conventional fixed-rate mortgages; 8.25%, 2% rate capped one-year adjustable rate mortgages.
Source: Telerate Systems Inc. 
FEDERAL NATIONAL MORTGAGE ASSOCIATION (Fannie Mae): Posted yields on 30 year mortgage commitments for delivery within 30 days (priced at par) 9.75%, standard conventional fixed-rate mortgages; 8.70%, 6/2 rate capped one-year adjustable rate mortgages.
Source: Telerate Systems Inc. 
MERRILL LYNCH READY ASSETS TRUST: 8.64%.
Annualized average rate of return after expenses for the past 30 days; not a forecast of future returns. 
Robert L. Bernstein, chairman and president of Random House Inc., announced his resignation from the publishing house he has run for 23 years. 
A successor wasn't named, which fueled speculation that Mr. Bernstein may have clashed with S.I. Newhouse Jr., whose family company, Advance Publications Inc., owns Random House.
Abrupt departures aren't unheard of within the Newhouse empire. 
In an interview, Mr. Bernstein said his departure "evolved out of discussions with Si Newhouse and that's the decision I reached." He declined to elaborate, other than to say, "It just seemed the right thing to do at this minute.
Sometimes you just go with your gut." Mr. Bernstein said he will stay until Dec. 31 and work with his successor, who is to be named soon. 
Mr. Newhouse, meanwhile, insisted that he isn't unhappy with Mr. Bernstein or the performance of Random House, the largest trade publishing house in the U.S.
The company said the publisher's annual sales volume increased to $800 million from $40 million during Mr. Bernstein's tenure. "Bob has handled the extraordinary growth of the company quite brilliantly," said Mr. Newhouse. "The company is doing well, it's stable, it's got good people.
Bob has an agenda and this seemed like the natural time." 
Publishing officials believe that while Random House has enjoyed spectacular growth and has smoothly integrated many acquisitions in recent years, some of the bigger ones haven't been absorbed so easily.
Crown Publishing Group, acquired last year, is said to be turning in disappointing results.
As a private company, Random House doesn't report its earnings. 
Mr. Bernstein, who succeeded Bennett Cerf, has been only the second president of Random House since it was founded in 1925.
Speculation on his successor centers on a number of division heads at the house.
Possible candidates include Susan Petersen, president of Ballantine/Del Rey/ Fawcett, Random House's huge and successful paperback division.
Some say Anthony Cheetham, head of a recently acquired British company, Century Hutchinson, could be chosen. 
There is also speculation that Mr. Newhouse could bring in a powerhouse businessman or another Newhouse family member to run the business side, in combination with a publishing executive like Robert Gottlieb, who left Random House's Alfred A. Knopf to run the New Yorker, also owned by the Newhouse family. 
Not included on the most-likely-successor list are Joni Evans, recruited two years ago to be publisher of adult trade books for Random House, and Sonny Mehta, president of the prestigious Alfred A. Knopf unit.
When Ms. Evans took her job, several important divisions that had reported to her predecessor weren't included partly because she didn't wish to be a full-time administrator.
Mr. Mehta is widely viewed as a brilliant editor but a less-than-brilliant administrator and his own departure was rumored recently. 
Mr. Bernstein, a tall, energetic man who is widely respected as a publishing executive, has spent much of his time in recent years on human rights issues. 
Congress learned during the Reagan administration that it could intimidate the executive branch by uttering again and again the same seven words: "Provided, that no funds shall be spent. . . ." This phrase once again is found throughout the many appropriations bills now moving through Congress.
It signals Congress's attempt, under the pretext of guarding the public purse, to deny the president the funding necessary to execute certain of his duties and prerogatives specified in Article II of the Constitution. 
This species of congressional action is predicated on an interpretation of the appropriations clause that is erroneous and unconstitutional.
The appropriations clause states that "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law. . . ." The prevailing interpretation of the clause on Capitol Hill is that it gives Congress an omnipresent veto over every conceivable action of the president through the ability to withhold funding.
This interpretation was officially endorsed by Congress in 1987 in the Iran-Contra Report. 
As partisans of congressional power understand, a "power of the purse" so broadly construed would emasculate the presidency and swallow the principle of separation of powers.
It is not supported by the text or history of the Constitution. 
The framers hardly discussed the appropriations clause at the Constitutional Convention of 1787, according to Madison's notes.
To the extent they did, their concern was to ensure fiscal accountability.
Moreover, the framers believed that the nation needed a unitary executive with the independence and resources to perform the executive functions that the Confederation Congress had performed poorly under the Articles of Confederation.
It would contradict that objective if the appropriations clause (technically a limitation on legislative power) could be read as placing the president on Congress's short leash, making the executive consist of the president and every member of Congress. 
As it went to the conference panel now deliberating, the appropriations bill for the executive office of the president for fiscal 1990 contained some breathtaking attempts by Congress to rewrite the Constitution under the pretext of protecting the public's money.
During the coming weeks, President Bush must decide whether to veto the bills containing them -- or, alternatively, to sign these bills into law with a statement declaring their intrusions on executive power to be in violation of Article II, and thus void and severable. 
The 1990 appropriations legislation attempts to strip the president of his powers to make certain appointments as provided by Article II. Article II places on the president the duty to nominate, "and by and with the Advice and Consent of the Senate" appoint, ambassadors, judges, and other officers of the U.S.
It also empowers the president to make recess appointments, without Senate approval: "The President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session." 
Yet Section 605 of the appropriations bill for the executive office provides: "No part of any appropriation for the current fiscal year contained in this or any other Act shall be paid to any person for the filling of any position for which he or she has been nominated after the Senate has voted not to approve the nomination of said person." Thus, with one brief passage in an appropriations bill, Congress repeals the president's power to make recess appointments under Article II. 
Section 605 also imposes unconstitutional conditions on the president's ability to nominate candidates of his choosing.
The language of the appropriations rider implies that any nomination to any position of a rejected nominee will result in the president being denied funding to pay that person's salary.
The president could probably not avoid this restriction by choosing people willing to serve without pay, because the Anti-Deficiency Act prohibits voluntary service to the government. 
The 1990 appropriations bills also contain a number of "muzzling" provisions that violate the recommendation clause in Article II of the Constitution.
Muzzling provisions, which might be called "blindfold laws" as well, prevent the executive branch from even looking at certain policy options, let alone from recommending them to Congress.
Such laws violate the provision in Article II that requires the president to make recommendations to Congress, but which gives the president the discretion to select the subject matter of those recommendations. 
Typically, these laws seek to prevent executive branch officials from inquiring into whether certain federal programs make any economic sense or proposing more market-oriented alternatives to regulations.
Probably the most egregious example is a proviso in the appropriations bill for the executive office that prevents the president's Office of Management and Budget from subjecting agricultural marketing orders to any cost-benefit scrutiny.
There is something inherently suspect about Congress's prohibiting the executive from even studying whether public funds are being wasted in some favored program or other. 
Perhaps none of the unconstitutional conditions contained in the appropriations bills for fiscal 1990 better illustrates Congress's attempt to usurp executive power than Section 609 of the executive-office bill: "None of the funds made available pursuant to the provisions of this Act shall be used to implement, administer, or enforce any regulation which has been disapproved pursuant to a resolution of disapproval duly adopted in accordance with the applicable law of the United States." 
This provision amounts to a legislative veto over the president's execution of the law, since a one-house resolution could be said to be "duly adopted" even though it would require neither bicameral action in Congress nor presentation to the president for his signature or veto.
The Supreme Court's decision in INS v.
Chadha held that legislative vetoes are unconstitutional. 
President Bush should veto appropriations acts that contain these kinds of unconstitutional conditions on the president's ability to discharge his duties and exercise his prerogatives.
If President Bush fails to do so in his first year, he will invite Congress, for the remainder of his presidency, to rewrite Article II of the Constitution to suit its purposes.
What becomes custom in the Bush administration will only become more difficult for future presidents, including Democrats, to undo. 
President Reagan learned that lesson.
By 1987, then-Speaker Jim Wright was discussing arms control in Moscow with Mikhail Gorbachev and then attempting to direct the president, through an appropriations rider, to treat the Soviets as though the Senate had ratified SALT II. 
If a veto is unworkable because it would leave part of the executive branch unfunded, the president could sign the appropriations bills into law and assert a power of excision, declaring the rider restricting his Article II powers to be unconstitutional and severable.
The Constitution does not expressly give the president such power.
However, the president does have a duty not to violate the Constitution.
The question is whether his only means of defense is the veto. 
Excision of appropriations riders that trespass on the president's duties and prerogative under Article II would be different from the line-item veto.
As discussed in the context of controlling federal spending, the line-item veto is characterized as a way for the president to excise perfectly constitutional provisions in a spending bill that are objectionable merely because they conflict with his policy objectives.
The excision of unconstitutional conditions in an appropriations bill would be a power of far more limited applicability.
One could argue that it is not an assertion of a item veto at all for the president, by exerting a power of excision, to resist unconstitutional conditions in legislation that violate the separation of powers. 
There is no downside if the president asserts a right of excision over unconstitutional conditions in the fiscal 1990 appropriations bills.
If Congress does nothing, President Bush will have won.
If Congress takes the dispute to the Supreme Court (assuming it can establish standing to sue), President Bush might win.
In that case, he might receive an opinion from the court that is a vindication of the president's right to perform the duties and exercise the prerogatives the framers thought should be entrusted to the executive. 
If President Bush loses at the court, it might be disappointing, as Morrison v.
Olson was for the Reagan administration.
But the presidency would be no worse off than it is now.
Moreover, the electorate would have received a valuable civics lesson in how the separation of powers works in practice. 
As it stands now, Congress presumes after the Reagan administration that the White House will take unconstitutional provisions in appropriations bills lying down.
President Bush should set things straight.
If he does not, he will help realize Madison's fear in The Federalist No. 48 of a legislature "everywhere extending the sphere of its activity and drawing all powers into its impetuous vortex." 
Mr. Sidak served as an attorney in the Reagan administration.
His longer analysis of executive power and the appropriations clause is to appear in the Duke Law Journal later this year. 
Despite one of the most devastating droughts on record, net cash income in the Farm Belt rose to a new high of $59.9 billion last year. 
The previous record was $57.7 billion in 1987, according to the Agriculture Department. 
Net cash income -- the amount left in farmers' pockets after deducting expenses from gross cash income -- increased in 33 states in 1988, as the drought cut into crop yields and drove up commodity prices, the department's Economic Research Service reported yesterday.
Most of those states set farm income records. 
The worst crop damage occurred in the Midwestern Corn Belt and the northern Great Plains.
What saved many farmers from a bad year was the opportunity to reclaim large quantities of grain and other crops that they had "mortgaged" to the government under price-support loan programs.
With prices soaring, they were able to sell the reclaimed commodities at "considerable profit," the agency's 240-page report said. 
In less parched areas, meanwhile, farmers who had little or no loss of production profited greatly from the higher prices. 
To the surprise of some analysts, net cash income rose in some of the hardest-hit states, including Indiana, Illinois, Nebraska and the Dakotas.
Analysts attributed the increases partly to the $4 billion disaster-assistance package enacted by Congress. 
Last year's record net cash income confirms the farm sector's rebound from the agricultural depression of the early 1980s.
It also helps explain the reluctance of the major farm lobbies and many lawmakers to make any significant changes in the 1985 farm program next year. 
Commodity prices have been rising in recent years, with the farm price index hitting record peaks earlier this year, as the government curtailed production with land-idling programs to reduce price-depressing surpluses.
At the same time, export demand for U.S. wheat, corn and other commodities strengthened, said Keith Collins, a department analyst.
Farmers also benefited from strong livestock prices, as the nation's cattle inventory dropped close to a 30-year low. 
"All of these forces came together in 1988 to benefit agriculture," Mr. Collins said. 
California led the nation with $6.5 billion in net cash income last year, followed by Texas, $3.9 billion; Iowa, $3.4 billion; Florida, $3.1 billion; and Minnesota, $2.7 billion.
Iowa and Minnesota were among the few major farm states to log a decline in net cash income. 
Despite federal disaster relief, the drought of 1988 was a severe financial setback for an estimated 10,000 to 15,000 farmers, according to the department.
Many lost their farms. 
Department economists don't expect 1989 to be as good a year as 1988 was.
Indeed, net cash income is likely to fall this year as farm expenses rise and government payments to farmers decline.
At the same time, an increase of land under cultivation after the drought has boosted production of corn, soybeans and other commodities, causing a fall in prices that has been only partly cushioned by heavy grain buying by the Soviets. 
Last year, government payments to farmers slipped to less than $14.5 billion from a record $16.7 billion in 1987.
Payments are expected to range between $9 billion and $12 billion this year. 
After years of struggling, the Los Angeles Herald Examiner will publish its last edition today, shut down by its parent, Hearst Corp., following unsuccessful efforts to sell the venerable newspaper. 
The demise of the 238,000-circulation Herald, once the nation's largest afternoon newspaper with circulation exceeding 700,000, turns the country's second-largest city into a one-newspaper town, at least in some senses.
The Los Angeles Times, with a circulation of more than 1.1 million, dominates the region.
But it faces stiff competition in Orange County from the Orange County Register, which sells more than 300,000 copies a day, and in the San Fernando Valley from the Los Angeles Daily News, which sells more than 170,000.
Nearby cities such as Pasadena and Long Beach also have large dailies. 
In July, closely held Hearst, based in New York, put the paper on the block.
Speculation had it that the company was asking $100 million for an operation said to be losing about $20 million a year, but others said Hearst might have virtually given the paper away. 
An attempted buy-out led by John J. McCabe, chief operating officer, never materialized, and a stream of what one staff member dismissed as "tire-kickers and lookee-loos" had filed through since.
The prospective buyers included investor Marvin Davis and the Toronto Sun. 
The death of the Herald, a newsstand paper in a freeway town, was perhaps inevitable.
Los Angeles is a sprawling, balkanized newspaper market, and advertisers seemed to feel they could buy space in the mammoth Times, then target a particular area with one of the regional dailies.
The Herald was left in limbo. 
Further, the Herald seemed torn editorially between keeping its old-time Hearst readership -- blue-collar and sports-oriented -- and trying to provide a sprightly, upscale alternative to the sometimes staid Times.
Hearst had flirted with a conversion to tabloid format for years but never executed the plan. 
The Herald joins the Baltimore News-American, which folded, and the Boston Herald-American, which was sold, as cornerstones of the old Hearst newspaper empire abandoned by the company in the 1980s.
Many felt Hearst kept the paper alive as long as it did, if marginally, because of its place in family history.
Its fanciful offices were designed by architect Julia Morgan, who built the Hearst castle at San Simeon.
William Randolph Hearst had kept an apartment in the Spanish Renaissance-style building. 
Analysts said the Herald's demise doesn't necessarily represent the overall condition of the newspaper industry. "The Herald was a survivor from a bygone age," said J. Kendrick Noble, a media analyst with PaineWebber Inc. "Actually, the long deterioration in daily newspapers shows signs of coming to an end, and the industry looks pretty healthy." 
Founded as the Examiner in 1903 by Mr. Hearst, the Herald was crippled by a bitter, decade-long strike that began in 1967 and cut circulation in half.
Financially, it never recovered; editorially, it had its moments.
In 1979, Hearst hired editor James Bellows, who brightened the editorial product considerably.
He and his successor, Mary Anne Dolan, restored respect for the editorial product, and though in recent years the paper had been limping along on limited resources, its accomplishments were notable.
For example, the Herald consistently beat its much-larger rival on disclosures about Los Angeles Mayor Tom Bradley's financial dealings.
The Herald's sports coverage and arts criticism were also highly regarded. 
Robert J. Danzig, vice president and general manager of Hearst Newspapers, stood up in the paper's newsroom yesterday and announced that no buyers had stepped forward and that the paper would fold, putting more than 730 full-time employees out of work. 
Hearst said it would provide employees with a placement service and pay them for 60 days.
Some long-tenured employees will receive additional benefits, the company said.
Hours after the announcement, representatives of the Orange County Register were in a bar across the street recruiting. 
The reaction in the newsroom was emotional. "I've never seen so many people crying in one place at one time," said Bill Johnson, an assistant city editor. 
"So Long, L.A." was chosen as the paper's final headline. 
"I'm doing the main story, and I'm already two beers drunk," said reporter Andy Furillo, whom the Times hired away several years ago but who returned to the Herald out of preference.
His wife also works for the paper, as did his father. 
Outside, a young pressman filling a news box with an extra edition headlined "Herald Examiner Closes" refused to take a reader's quarter. "Forget it," he said as he handed her a paper. "It doesn't make any difference now." 
Olympia Broadcasting Corp. said it didn't make a $1.64 million semiannual interest payment due yesterday on $23.4 million of senior subordinated debentures. 
The radio-station owner and programmer said it was trying to obtain additional working capital from its senior secured lenders and other financial institutions.
It said it needs to make the payment by Dec. 1 to avoid a default that could lead to an acceleration of the debt. 
In September, the company said it was seeking offers for its five radio stations in order to concentrate on its programming business. 
If you'd really rather have a Buick, don't leave home without the American Express card. 
Or so the slogan might go.
American Express Co. and General Motors Corp. 's beleaguered Buick division are joining forces in a promotion aimed at boosting Buick's sales while encouraging broader use of the American Express card. 
The companies are giving four-day vacations for two to Buick buyers who charge all or part of their down payments on the American Express green card.
They have begun sending letters explaining the program, which began Oct. 18 and will end Dec. 18, to about five million card holders.
Neither company would disclose the program's cost. 
Buick approached American Express about a joint promotion because its card holders generally have a "good credit history" and are "good at making payments," says a spokeswoman for the division.
American Express also represents the upscale image "we're trying to project," she adds. 
Buick has been seeking for the past few years to restore its reputation as "the doctor's car" -- a product for upscale professionals.
Sales were roughly flat in the 1989 model year compared with a year earlier, though industry sales fell.
But since the 1990 model year began Oct. 1, Buick sales have plunged 33%. 
For American Express, the promotion is part of an effort to broaden the use of its card for retail sales, where the company expects to get much of the future growth in its card business.
Traditionally, the card has been used mainly for travel and entertainment expenses. 
Phillip Riese, an American Express executive vice president, says the promotion with Buick is his company's first with an auto maker, but "hopefully {will be} the first of many" in the company's effort to promote its green card as "the total car-care card." To that end, American Express has been signing up gasoline companies, car repair shops, tire companies and car dealers to accept the card. 
Many auto dealers now let car buyers charge part or all of their purchase on the American Express card, but few card holders realize this, Mr. Riese says. 
Until now, however, buyers who wanted to finance part of a car purchase through General Motors Acceptance Corp. couldn't put their down payment on a charge card because of possible conflicts with truth-in-lending and state disclosure laws over finance rates, says a spokesman for the GM finance arm.
But GMAC approved the Buick program, he says, because the American Express green card requires payment in full upon billing, and so doesn't carry any finance rates. 
Mr. Riese says American Express considers GM and Buick "very sophisticated direct-mail marketers," so "by joining forces with them we have managed to maximize our direct-mail capability." In addition, Buick is a relatively respected nameplate among American Express card holders, says an American Express spokeswoman.
When the company asked members in a mailing which cars they would like to get information about for possible future purchases, Buick came in fourth among U.S. cars and in the top 10 of all cars, the spokeswoman says. 
American Express has more than 24 million card holders in the U.S., and over half have the green card.
GMAC screened the card-member list for holders more than 30 years old with household incomes over $45,000 who hadn't "missed any payments," the Buick spokeswoman says.
Some 3.8 million of the five million who will get letters were preapproved for credit with GMAC.
These 3.8 million people also are eligible to get one percentage point off GMAC's advertised finance rates, which start at 6.9% for two-year loan contracts. 
A spokesman for Visa International's U.S. subsidiary says his company is using promotions to increase use of its cards, but doesn't have plans for a tie-in similar to the American Express-Buick link. 
Three divisions at American Express are working with Buick on the promotion: the establishment services division, which is responsible for all merchants and companies that accept the card; the travel division; and the merchandise sales division. 
The vacation packages include hotel accommodations and, in some cases, tours or tickets to local attractions, but not meals.
Destinations are Chicago; Honolulu; Las Vegas, Nev.; Los Angeles; Miami Beach, Fla.; New Orleans; New York; Orlando, Fla.; San Francisco; and Washington, D.C.
A buyer who chooses to fly to his destination must pay for his own ticket but gets a companion's ticket free if they fly on United Airlines. 
In lieu of the vacation, buyers can choose among several prizes, including a grandfather clock or a stereo videocassette recorder.
Card holders who receive the letter also are eligible for a sweepstakes with Buick cars or a Hawaii vacation as prizes.
If they test-drive a Buick, they get an American Express calculator. 
This isn't Buick's first travel-related promotion.
A few years ago, the company offered two round-trip tickets on Trans World Airlines to buyers of its Riviera luxury car.
The promotion helped Riviera sales exceed the division's forecast by more than 10%, Buick said at the time. 
The United Kingdom High Court declared illegal a variety of interest-rate swap transactions and options deals between a London borough council and commercial banks. 
The ruling could lead to the cancellation of huge bank debts the London Borough of Hammersmith and Fulham ran up after losing heavily on swap transactions.
As many as 70 U.K. and international banks stand to lose several hundred million pounds should the decision be upheld and set a precedent for other municipalities.
An appeal is expected. 
In response to the ruling, gilt futures swiftly plunged more than a point yesterday before recovering much of the loss by the end of the session.
Gilts, or British government bonds, which also fell sharply initially, retraced some of the losses to end about 3/8 point lower. 
The council, which is alleged to have engaged in over 600 deals valued at over #6 billion ($9.5 billion), lost millions of pounds from soured swap deals.
At one point, Hammersmith is reported to have accounted for as much as 10% of the sterling market in interest-rate swap dealings. 
When two parties engage in an interest-rate swap, they are betting against each other on future rates.
Thus, an institution obligated to make fixed-rate interest payments on debt swaps the payments with another making floating-rate payments.
In most of the British transactions, the municipalities agreed to make floating-rate payments to banks, which would make fixed-rate payments.
As interest rates rose, municipalities owed the banks more than the banks were paying them. 
The court hearing began in early October at the request of Anthony Hazell, district auditor for Hammersmith, who argued that local councils aren't vested with constitutional authority to engage in such capital-markets activities.
The council backed the audit commission's stand that the swap transactions are illegal.
Although the Hammersmith and Fulham council was by far the most active local authority engaging in such capital-markets transactions, the court decision could set a precedent for similar transactions by 77 other local councils. 
"While this court ruling was only on Hammersmith, it will obviously be very persuasive in other cases of a similar nature," a solicitor representing one of the banks said. 
Already, 10 local councils have refused to honor fees and payments to banks incurred during various swaps dealings.
Other financial institutions involved include Barclays Bank PLC, Midland Bank PLC, Security Pacific Corp., Chemical Banking Corp. 's Chemical Bank, Citicorp's Citibank and Mitsubishi Finance International. 
If the banks exhaust all avenues of appeal, it is possible that they would seek to have the illegality ruling work both ways, some market sources said.
Banks could seek to recover payments to local authorities in instances where the banks made net payments to councils. 
Officials from the various banks involved are expected to meet during the next few days to consider other arrangements with local authorities that could be questionable.
The banks have 28 days to file an appeal against the ruling and are expected to do so shortly. 
In the aftermath of the stock market's gut-wrenching 190-point drop on Oct. 13, Kidder, Peabody & Co. 's 1,400 stockbrokers across the country began a telephone and letter-writing campaign aimed at quashing the country's second-largest program trader. 
The target of their wrath?
Their own employer, Kidder Peabody. 
Since October's minicrash, Wall Street has been shaken by an explosion of resentment against program trading, the computer-driven, lightning-fast trades of huge baskets of stocks and futures that can send stock prices reeling in minutes. 
But the heated fight over program trading is about much more than a volatile stock market.
The real battle is over who will control that market and reap its huge rewards.
Program trading itself, according to many academics who have studied it, is merely caught in the middle of this battle, unfairly labeled as the evil driving force of the marketplace.
The evidence indicates that program trading didn't, in fact, cause the market's sharp fall on Oct. 13, though it may have exacerbated it. 
On one side of this power struggle stand the forces in ascendency on Wall Street -- the New Guard -- consisting of high-tech computer wizards at the major brokerage firms, their pension fund clients with immense pools of money, and the traders at the fast-growing Chicago futures exchanges.
These are the main proponents of program trading. 
Defending their ramparts are Wall Street's Old Guard -- the traditional, stock-picking money managers, tens of thousands of stock brokers, the New York Stock Exchange's listed companies and the clannish floor traders, known as specialists, who make markets in their stocks. 
So far, Wall Street's Old Guard seems to be winning the program-trading battle, successfully mobilizing public and congressional opinion to bludgeon their tormentors. 
The Chicago Mercantile Exchange, a major futures marketplace, yesterday announced the addition of another layer of trading halts designed to slow program traders during a rapidly falling stock market, and the Big Board is expected today to approve some additional restrictions on program trading. 
Stung by charges that their greed is turning the stock market into a gigantic crapshoot, almost all the big investment banking houses have abandoned index arbitrage, a common form of program trading, for their own accounts in the past few days.
A few, such as giant Merrill Lynch & Co., now refuse even to do index arbitrage trades for clients. 
The Old Guard's assault on program trading and its practitioners has been fierce and broad-based, in part because some Old Guard members feel their very livelihood is at stake.
Some, such as traditional money manager Neuberger & Berman, have taken out national newspaper advertisements demanding that market regulators "stop the numbers racket on Wall Street." 
Big Board stock specialists, in a bold palace revolt, began shortly after Oct. 13 to telephone the corporate executives of the companies whose stock is listed on the Big Board to have them pressure the exchange to ban program trading. 
Charles Wohlstetter, the chairman of Contel Corp. who is rallying other CEOs to the anti-program trading cause, says he has received "countless" letters offering support. "They said universally, without a single exception: Don't even compromise.
Kill it," he says. 
Wall Street's New Guard isn't likely to take all this lying down for long, however.
Its new products and trading techniques have been highly profitable.
Program trading money managers have gained control over a big chunk of the invested funds in this country, and the pressures on such money managers to produce consistent profits has wedded them to the ability to move rapidly in and out the market that program trading gives them.
What's more, the last time major Wall Street firms said they were getting out of program trading -- in the aftermath of the 1987 crash -- they waited a few months and then sneaked back into it. 
Even some members of the Old Guard, despite their current advantage, seem to be conceding that the future belongs with the New Guard.
Last week, Robert M. Bradley, one of the Big Board's most respected floor traders and head of a major traders' organization, surrendered.
He sold his exchange seat and wrote a bitter letter to Big Board Chairman John J. Phelan Jr. in which he said the Big Board is too focused on machines, rather than people.
He said the exchange is "headed for a real crisis" if program trading isn't curbed. 
"I do not want my money invested in what I consider as nothing more than a casino," Mr. Bradley wrote. 
The battle has turned into a civil war at some firms and organizations, causing internal contradictions and pitting employee against employee.
At Kidder, a unit of General Electric Co., and other big brokerage firms, stockbrokers battle their own firm's program traders a few floors away.
Corporations like Contel denounce program trading, yet Contel has in the past hired pension fund managers like Bankers Trust Co. that are also big program traders. 
The Big Board -- the nation's premier stock exchange -- is sharply divided between its floor traders and its top executives.
Its entrenched 49 stock specialists firms are fighting tooth and nail against programs.
But the Big Board's leadership -- over the specialists' protests -- two weeks ago began trading a new stock "basket" product designed to facilitate program trading. "A lot of people would like to go back to 1970," before program trading, Mr. Phelan said this week. "I would like to go back to 1970.
But we are not going back to 1970." 
Again and again, program-trading's critics raise the "casino" theme.
They say greedy market manipulators have made a shambles of the nation's free-enterprise system, turning the stock market into a big gambling den, with the odds heavily stacked against the small investor. "The public didn't come to the market to play a game; they can go to Off-Track Betting for that," says A. Brean Murray, chairman of Brean Murray, Foster Securities, a traditional money management firm. 
The program traders, on the other hand, portray old-fashioned stock pickers as the Neanderthals of the industry.
Critics like Mr. Murray "are looking for witches, and people who use computers to trade are a convenient boogieman," says J. Thomas Allen, president of Advanced Investment Management Inc., a Pittsburgh firm that runs a $200 million fund that uses index arbitrage. "Just a blind fear of the unknown is causing them to beg the regulators for protection." 
For all the furor, there is nothing particularly complex about the concept of stock-index arbitrage, the most controversial type of computer-assisted program trading.
Like other forms of arbitrage, it merely seeks to take advantage of momentary discrepancies in the price of a single product -- in this case, a basket of stocks -- in different markets -- in this case the New York Stock Exchange and the Chicago futures markets. 
That divergence is what stock index traders seek.
When it occurs, the traders place orders via computers to buy the basket of stocks (such as the 500 stocks that constitute the Standard & Poor's 500 stock index) in whichever market is cheaper and sell them in the more expensive market; they lock in the difference in price as profit. 
Such program trades, which can involve the purchase or sale of millions of dollars of stock, occur in a matter of seconds.
A program trade of $5 million of stock typically earns a razor-thin profit of $25,000.
To keep program-trading units profitable in the eyes of senior brokerage executives, traders must seize every opportunity their computers find. 
The speed with which such program trades take place and the volatile price movements they can cause are what program trading critics profess to despise. "If you continue to do this, the investor becomes frightened -- any investor: the odd lotter, mutual funds and pension funds," says Larry Zicklin, managing partner at Neuberger & Berman. 
But many experts and traders say that program trading isn't the main reason for stock-market gyrations. "I have not seen one iota of evidence" to support restrictions on program trading, says a Vanderbilt University finance professor, Hans Stoll, an authority on the subject.
Says the Big Board's Mr. Phelan, "Volatility is greater than program trading." 
The Oct. 13 plunge was triggered not by program traders, but by news of the unraveling of the $6.79 billion buy-out of UAL Corp. Unable to unload UAL and other airline shares, takeover-stock speculators, or risk arbitragers, dumped every blue-chip stock they had.
While program trades swiftly kicked in, a "circuit breaker" that halted trading in stock futures in Chicago made some program trading impossible.
Susan Del Signore, head trader at Travelers Investment Management Co., says critics are ignoring "the role the {takeover stock} speculator is taking in the market as a source of volatility." Many arbs are "overleveraged," she says, and they "have to sell when things look like they fall apart." 
Like virtually everything on Wall Street, the program-trading battle is over money, and the traditionalists have been losing out on bundles of it to the New Guard in recent years.
Take the traditional money managers, or "stock pickers," as they are derisively known among the computer jockeys.
Traditional stock managers like to charge 50 cents to 75 cents for every $100 they manage for big institutional investors, and higher fees for smaller investors.
Yet many such managers consistently fail to even keep up with, much less beat, the returns of standard benchmarks like the S&P 
Not surprisingly, old-style money managers have been losing clients to giant stock-index funds that use computers to juggle portfolios so they mirror the S&P 500.
The indexers charge only a few pennies per $100 managed.
Today, about $200 billion, or 20% of all pension-fund stock investments, is held by index funds. 
The new Wall Street of computers and automated trading threatens to make dinosaurs of the 49 Big Board stock-specialist firms.
These small but influential floor brokers long have earned fat returns of 30% to 40% a year on their capital, by virtue of their monopoly in making markets in individual stocks.
The specialists see any step to electronic trading as a death knell. 
And they believe the Big Board, under Mr. Phelan, has abandoned their interest.
The son of a specialist and once one himself, Mr. Phelan has nonetheless been striving -- with products like the new stock basket that his former colleagues dislike so much -- to keep index funds and other program traders from taking their business to overseas markets. 
Meanwhile, specialists' trading risks have skyrocketed as a result of stock-market volatility. "When the sell programs hit, you can hear the order printers start to go" on the Big Board trading floor, says one specialist there. "The buyers walk away, and the specialist is left alone" as the buyer of last resort for his stable of stocks, he contends. 
No one is more unhappy with program trading than the nation's stockbrokers.
They are still trying to lure back small investors spooked by the 1987 stock-market crash and the market's swings since then. "Small investors are absolutely dismayed that Wall Street is stacking the deck against them, and these wide swings are scaring them to death," says Raymond A. Mason, chairman of regional broker Legg Mason Inc. in Baltimore.
Stockbrokers' business and pay has been falling.
Last year, the average broker earned $71,309, 24% lower than in 1987. 
Corporate executives resent that their company's stock has been transformed into a nameless piece of a stock-index basket.
Index traders who buy all 500 stocks in the S&P 500 often don't even know what the companies they own actually do, complains Andrew Sigler, chairman of Champion International Corp. "Do you make sweatshirts or sparkplugs?
Oh, you're in the paper business," is one reaction Mr. Sigler says he's gotten from his big institutional shareholders. 
By this September, program traders were doing a record 13.8% of the Big Board's average daily trading volume.
Among the top practitioners were Wall Street blue bloods: Morgan Stanley & Co., Kidder Peabody, Merrill Lynch, Salomon Brothers Inc. and PaineWebber Group Inc.
But then came Oct. 13 and the negative publicity orchestrated by the Old Guard, particularly against index arbitrage.
The indexers' strategy for the moment is to hunker down and let the furor die. "There's a lynch-mob psychology right now," says the top program-trading official at a Wall Street firm. "Wall Street's cash cow has been gored, but I don't think anyone has proven that index arbitrage is the problem." 
Too much money is at stake for program traders to give up.
For example, stock-index futures began trading in Chicago in 1982, and within two years they were the fastest-growing futures contract ever launched.
Stock futures trading has minted dozens of millionaires in their 20s and 30s.
Now, on a good day, Chicago's stock-index traders trade more dollars worth of stock futures than the Big Board trades in stock. 
Now the stage is set for the battle to play out.
The anti-programmers are getting some helpful thunder from Congress.
Program traders' "power to create total panic is so great that they can't be allowed to have their way," says Rep. Edward Markey, a Massachusetts Democrat. "We have to have a system that says to those largest investors: `Sit down! You will not panic, you will not put the financial system in jeopardy. '" 
But the prospects for legislation that targets program trading is unlikely anytime soon.
Many people, including the Big Board, think that it's too late to put the genie back in the bottle.
The Big Board's directors meet today to approve some program-trading restrictions, but a total ban isn't being considered, Big Board officials say. 
"You're not going to stop the idea of trading a basket of stocks," says Vanderbilt's Prof.
Stoll. "Program trading is here to stay, and computers are here to stay, and we just need to understand it." 
Short of a total ban, some anti-programmers have proposed several middle-ground reforms, which they say would take away certain advantages program traders currently enjoy in the marketplace that other investors don't. 
One such proposal regarding stock-index futures is an increase in the margin requirement -- or the "good-faith" payment of cash needed to trade them -- to about the same level as the margin requirement for stocks.
Currently, margins on stock futures purchases are much lower -- roughly 7% compared with 50% for stocks -- making the futures market much faster and potentially more speculative.
Program trading critics also want the Federal Reserve Board, rather than the futures industry, to set such margins. 
Futures traders respond that low margins help keep their markets active.
Higher margins would chase away dozens of smaller traders who help larger traders buy and sell, they say. 
Another proposed reform is to have program traders answer to an "uptick rule"a reform instituted after the Great Crash of 1929 that protects against stocks being relentlessly beaten downward by those seeking to profit from lower prices, namely short sellers.
The Big Board's uptick rule prevents the short sale of a stock when the stock is falling in price. 
But in 1986, program traders received what amounted to an exemption from the uptick rule in certain situations, to make it easier to link the stock and futures markets.
A reinstatement of the uptick rule for program traders would slow their activity considerably.
Program traders argue that a reinstatement of the rule would destroy the "pricing efficiency" of the futures and stock markets. 
James A. White contributed to this article. 
Fundamentalists Jihad .START 
Big Board Chairman John Phelan said yesterday that he could support letting federal regulators suspend program trading during wild stock-price swings.
Thus the band-wagon psychology of recent days picks up new impetus. 
Index arbitrage is a common form of program trading.
As usually practiced it takes advantage of a rather basic concept: Two separate markets in different locations, trading basically the same widgets, can't trade them for long at prices that are widely different.
In index arbitrage, the widget is the S&P 500, and its price is constantly compared between the futures market in Chicago and the stock markets largely in New York.
To profit from an index-arbitrage opportunity, someone who owns the S&P 500 widget in New York must sell it and replace it with a cheaper S&P 500 widget in Chicago. 
If the money manager performing this service is being paid by his clients to match or beat the return of the S&P 500 index, he is likely to remain fully invested at all times. (Few, if any, index-fund managers will risk leveraging performance by owning more than 100% exposure to stocks, and equally few will want to own less than a 100% position should stocks rise.) 
By constantly seeking to own the cheapest widget, index-arbitrage traders hope to add between 1% and 3% to the annual return of the S&P 500.
That represents a very thin "excess" return, certainly far less than what most fundamental stock pickers claim to seek as their performance objective.
The fact that a vast majority of fundamentalist money managers fail to beat the S&P 500 may contribute to the hysteria surrounding the issue. 
As more managers pursue the index-arbitrage strategy, these small opportunities between markets will be reduced and, eventually, eliminated.
The current opportunities arise because the process for executing a buy or sell order in the actual stocks that make up the S&P 500 is more cumbersome than transacting in the futures market.
The New York Stock Exchange's attempt to introduce a new portfolio basket is evidence of investors' desires to make fast and easy transactions of large numbers of shares. 
So if index arbitrage is simply taking advantage of thin inefficiencies between two markets for the same widget, how did "program trading" evolve into the evil creature that is evoking the curses of so many observers?
All arguments against program trading, even those pressed without fact, conclude with three expected results after "reforms" are implemented: 1) reduced volatility, 2) a long-term investment focus, and 3) a level playing field for the small investor.
But many of these reforms are unneeded, even harmful. 
Reducing volatility.
An index-arbitrage trade is never executed unless there is sufficient difference between the markets in New York and Chicago to cover all transaction costs.
Arbitrage doesn't cause volatility; it responds to it.
Think about what causes the difference in prices between the two markets for S&P 500 stocks -- usually it is large investors initiating a buy or sell in Chicago. 
A large investor will likely cause the futures market to decline when he sells his futures.
Arbitrage simply transfers his selling pressure from Chicago to New York, while functioning as a buyer in Chicago.
The start of the whole process is the key-someone must fundamentally increase or decrease his ownership in widgets to make widget prices move. 
Why does this large hypothetical seller trade in Chicago instead of New York?
Perhaps he is willing to sacrifice to the arbitrage trader some small profit in order to get quick and certain execution of his large trade.
In a competitive market, this investor has many ways to execute his transactions, and he will have more alternatives (both foreign and domestic) if his volume is profitable for an exchange to handle.
If not Chicago, then in New York; if not the U.S., then overseas. 
Volatility surrounding his trades occurs not because of index arbitrage, but because his is a large addition or subtraction to a widget market with finite liquidity.
Eliminate arbitrage and liquidity will decline instead of rising, creating more volatility instead of less.
The speed of his transaction isn't to be feared either, because faster and cleaner execution is desirable, not loathsome.
If slowing things down could reduce volatility, stone tablets should become the trade ticket of the future. 
Encouraging long-term investing.
We must be very cautious about labeling investors as "long-term" or "short-term." Policies designed to encourage one type of investor over another are akin to placing a sign over the Big Board's door saying: "Buyers welcome, sellers please go away!" The ultimate goal of any investor is a profit motive, and regulators should not concern themselves with whether investors are sufficiently focused on the long term.
A free market with a profit motive will attract each investor to the liquidity and risks he can tolerate. 
In point of fact, volatility as measured by the annualized standard deviation of daily stock price movements has frequently been much higher than it is today.
Periods before the advent of futures or program trading were often more volatile, usually when fundamental market conditions were undergoing change (1973-75, 1937-40, and 1928-33 for example).
It is interesting to see the fundamental stock pickers scream "foul" on program trading when the markets decline, while hailing the great values still abounding as the markets rise.
Could rising volatility possibly be related to uncertainty about the economics of stocks, instead of the evil deeds of program-trading goblins? 
Some of the proposed fixes for what is labeled "program-trading volatility" could be far worse than the perceived problem.
In using program trading as a whipping boy, fundamentalist investors stand to gain the high ground in wooing small investors for their existing stock-selection products.
They may, however, risk bringing some damaging interference from outside the markets themselves.
How does a nice new tax, say 5%, on any financial transaction sound?
That ought to make sure we're all thinking for the long term. 
Getting a level playing field.
This argument is perhaps the most interesting one for abolishing program trading -- not because of its merits, but because of the firms championing the cause.
The loudest of these reformers are money managers who cater to smaller investors.
They continually advise their clients on which individual stocks to buy or sell, while their clients continue to hope for superior performance.
Even with mutual funds, the little investor continues to tolerate high fees, high commissions and poor performance, while index-fund managers slowly amass a better record with lower fees, lower commissions and less risk.
Yet our efforts are somehow less noble than those of an investment expert studiously devouring press clippings on each company he follows. 
Almost all new regulation is introduced in the interests of protecting the little guy, and he invariably is the one least able to cope with its consequences. 
If spreads available from index arbitrage are so enormous, surely any sizable mutual-fund company could profit from offering it to small investors.
The sad reality is that the retail investor continues to pursue stellar performers first, while leaving institutions to grapple with basis points of performance on large sums of money quarter by quarter.
Cost-effective index funds just aren't sexy enough to justify the high fees and commissions that retail customers frequently pay, and that institutional customers refuse to pay. 
Each new trading roadblock is likely to be beaten by institutions seeking better ways to serve their high-volume clients, here or overseas.
Legislating new trading inefficiencies will only make things harder on the least sophisticated investors. 
So what is next for program trading?
Left to its own devices, index arbitrage will become more and more efficient, making it harder and harder to do profitably.
Spreads will become so tight that it won't matter which market an investor chooses -- arbitrage will prevent him from gaining any temporary profit. 
If government or private watchdogs insist, however, on introducing greater friction between the markets (limits on price moves, two-tiered execution, higher margin requirements, taxation, etc.), the end loser will be the markets themselves.
Instead, we ought to be inviting more liquidity with cheaper ways to trade and transfer capital among all participants. 
Mr. Allen's Pittsburgh firm, Advanced Investment Management Inc., executes program trades for institutions. 
Some Democrats in Congress are warning that a complicated new funding device for the two federal antitrust agencies could result in further cutbacks in a regulatory area already reduced sharply in recent years. 
The funding mechanism, which has received congressional approval and is expected to be signed by President Bush, would affect the antitrust operations of the Justice Department and the Federal Trade Commission. 
As a part of overall efforts to reduce spending, Congress cut by $30 million the Bush administration's request for antitrust enforcement for fiscal 1990, which began Oct. 1.
To offset the reduction, Congress approved a $20,000 fee that investors and companies will have to pay each time they make required filings to antitrust regulators about mergers, acquisitions and certain other transactions. 
Some Democrats, led by Rep. Jack Brooks (D., Texas), unsuccessfully opposed the measure because they fear that the fees may not fully make up for the budget cuts. 
But Justice Department and FTC officials said they expect the filing fees to make up for the budget reductions and possibly exceed them. "It could operate to augment our budget," James Rill, the Justice Department's antitrust chief, said in an interview. 
Under measures approved by both houses of Congress, the administration's request for $47 million for the Antitrust Division would be cut $15 million.
The FTC budget request of $70 million, about $34 million of which would go for antitrust enforcement, would also be cut by $15 million.
The administration had requested roughly the same amount for antitrust enforcement for fiscal 1990 as was appropriated in fiscal 1989. 
The offsetting fees would apply to filings made under the Hart-Scott-Rodino Act.
Under that law, parties proposing mergers or acquisitions valued at $15 million or more must notify FTC and Justice Department antitrust regulators before completing the transactions.
Currently, the government charges nothing for such filings. 
Proponents of the funding arrangement predict that, based on recent filing levels of more than 2,000 a year, the fees will yield at least $40 million this fiscal year, or $10 million more than the budget cuts. "When you do that, there is not a cut, but there is in fact a program increase of $5 million" each for the FTC and the Justice Department, Rep. Neal Smith (D., Iowa) said during House debate. 
But Rep. Don Edwards (D., Calif.) responded that a recession could stifle merger activity, reducing the amount of fees collected.
The antitrust staffs of both the FTC and Justice Department were cut more than 40% in the Reagan administration, and enforcement of major merger cases fell off drastically during that period. "Today is not the time to signal that Congress in any way sanctions the dismal state into which antitrust enforcement has fallen," Mr. Edwards argued. 
Any money in excess of $40 million collected from the fees in fiscal 1990 would go to the Treasury at large. 
Corporate lawyers said the new fees wouldn't inhibit many mergers or other transactions.
Though some lawyers reported that prospective acquirers were scrambling to make filings before the fees take effect, government officials said they hadn't noticed any surge in filings. 
FALL BALLOT ISSUES set a record for off-year elections. 
Odd-year elections attract relatively few ballot issues.
But the 1989 fall total of 80, while well below 1988 activity, shows "a steady ratcheting up in citizen referenda and initiatives," says Patrick McGuigan, editor of Family, Law and Democracy Report.
He says the 10 citizen-sparked issues on state ballots this fall represent the most in any odd-year this decade.
Ballot questions range from a Maine initiative on banning Cruise missiles to a referendum on increasing the North Dakota income tax. 
Ballot watchers say attention already is focused on the 1990 elections.
In California, two petition drives for next year's election are "essentially finished," says David Schmidt, author of "Citizen Lawmakers." Mr. McGuigan cites three completed efforts in Oklahoma.
Hot ballot topics are expected to be abortion, the environment and insurance reform. 
Taking a cue from California, more politicians will launch their campaigns by backing initiatives, says David Magleby of Brigham Young University. 
PHOTOGRAPH COLLECTING gains new stature as prices rise. 
Price records are being set at auctions this week.
At Christie's, a folio of 21 prints from Alfred Stieglitz's "Equivalents" series sold for $396,000, a single-lot record.
Other works also have been exceeding price estimates.
In part, prices reflect development of a market structure based on such variables as the number of prints.
This information used to be poorly documented and largely anecdotal, says Beth Gates-Warren of Sotheby's. "There is finally some sort of sense in the market," she says. 
Corporations and museums are among the serious buyers, giving greater market stability, says Robert Persky of the Photograph Collector. "When I see prints going into the hands of institutions, I know they aren't going to come back on the market." Most in demand: classic photographs by masters such as Stieglitz and Man Ray.
But much contemporary work is also fetching "a great deal of money," says Miles Barth of the International Center of Photography. 
DIALING 900 brings callers a growing number of services. 
Currently a $300 million-a-year business, 900 telephone service is expected to hit $500 million next year and near $2 billion by 1992 as uses for the service continue to expand, says Joel Gross of Donaldson, Lufkin & Jenrette Inc.
The service -- which costs the caller from 30 cents to $25 a minute -- currently is dominated by celebrity chatter, horoscopes and romance lines.
But more serious applications are in the wings, and that is where the future growth is expected. 
"I'm starting to see more business transactions," says Andrea West of American Telephone & Telegraph Co., noting growing interest in use of 900 service for stock sales, software tutorials and even service contracts.
Colleges, she says, are eyeing registration through 900 service.
Charities test the waters, but they face legal barriers to electronic fund raising. "The thing that will really break this market right open is merchandising," Ms. West says. 
Much of the 800 service will "migrate to 900," predicts Jack Lawless, general manager of US Sprint's 900 product. 
FAMILY PETS are improving recovery rates of patients at Columbia Hospital, Milwaukee.
Patients who receive canine or feline visitors are found to have lower blood pressure and improved appetite and be more receptive to therapy, says Mary Ann O'Loughlin, program coordinator. 
TIRED OF TRIMMING?
Hammacher Schlemmer & Co. offers a fiber-optic Christmas tree that eliminates the need to string lights.
The $6,500 tree is designed to send continuously changing colored light to dozens of fiber-end bunches. 
MEDICINE TRANSPLANT: Growth of Japanese trade and travel prompts Beth Israel Medical Center, New York, to set up a bilingual medical practice.
Funded by a $1 million gift from Tokio Marine & Fire Insurance, the service will follow Japanese medical protocols, including emphasis on preventative medicine. 
DIAPER SERVICES make a comeback amid growing environmental concerns. 
Concerned about shrinking landfills and the safety of chemicals used in super-absorbent disposables, parents are returning to the cloth diaper.
Tiny Tots Inc., Campbell, Calif., says business is up 35% in the past year. "We're gaining 1,200 new customers each week," says Jack Mogavero of General Health Care Corp., Piscataway, N.J.
In Syracuse, N.Y., DyDee Service's new marketing push stresses environmental awareness.
Among its new customers: day-care centers that previously spurned the service. 
The National Association of Diaper Services, Philadelphia, says that since January it has gotten more than 672 inquiries from people interested in starting diaper services.
Elisa Hollis launched a diaper service last year because State College, Pa., where she lives, didn't have one.
Diaper shortages this summer limited growth at Stork Diaper Services, Springfield, Mass., where business is up 25% in 
Also spurring the move to cloth: diaper covers with Velcro fasteners that eliminate the need for safety pins. 
BRIEFS: Only 57.6% of New Yorkers watch the local news, the lowest viewership in the country, says a new study by Impact Resources Inc., Columbus, Ohio. . . . FreudToy, a pillow bearing the likeness of Sigmund Freud, is marketed as a $24.95 tool for do-it-yourself analysis. 
Program trading is "a racket," complains Edward Egnuss, a White Plains, N.Y., investor and electronics sales executive, "and it's not to the benefit of the small investor, that's for sure." But although he thinks that it is hurting him, he doubts it could be stopped. 
Mr. Egnuss's dislike of program trading is echoed by many small investors interviewed by Wall Street Journal reporters across the country.
But like Mr. Egnuss, few expect it to be halted entirely, and a surprising number doubt it should be. 
"I think program trading is basically unfair to the individual investor," says Leo Fields, a Dallas investor.
He notes that program traders have a commission cost advantage because of the quantity of their trades, that they have a smaller margin requirement than individual investors do and that they often can figure out earlier where the market is heading. 
But he blames program trading for only some of the market's volatility.
He also considers the market overvalued and cites the troubles in junk bonds.
He adds: "The market may be giving us another message, that a recession is looming." 
Or, as Dorothy Arighi, an interior decorator in Arnold, Calif., puts it: "All kinds of funny things spook the market these days." But she believes that "program trading creates deviant swings.
It's not a sound thing; there's no inherent virtue in it." She adds that legislation curbing it would be "a darned good idea." 
At the Charles Schwab & Co. office in Atlanta's Buckhead district, a group of investors voices skepticism that federal officials would curb program trading.
Citing the October 1987 crash, Glenn Miller says, "It's like the last crash -- they threatened, but no one did anything." A. Donald Anderson, a 59-year-old Los Angeles investor who says the stock market's "fluctuations and gyrations give me the heebie-jeebies," doesn't see much point in outlawing program trading.
Those who still want to do it "will just find some way to get around" any attempt to curb it. 
Similarly, Rick Wamre, a 31-year-old asset manager for a Dallas real-estate firm, would like to see program trading disappear because "I can't see that it does anything for the market or the country." Yet he isn't in favor of new legislation. "I think we've got enough securities laws," he says. "I'd much rather see them dealing with interest rates and the deficit." 
Peter Anthony, who runs an employment agency in New York, decries program trading as "limiting the game to a few," but he also isn't sure it should be more strictly regulated. "I don't want to denounce it because denouncing it would be like denouncing capitalism," he explains. 
And surprising numbers of small investors seem to be adapting to greater stock market volatility and say they can live with program trading. 
Glenn Britta, a 25-year-old New York financial analyst who plays options for his personal account, says he is "factoring" the market's volatility "into investment decisions." He adds that program trading "increases liquidity in the market.
You can't hold back technology." And the practice shouldn't be stopped, he says, because "even big players aren't immune to the rigors of program trading." 
Also in New York, Israel Silverman, an insurance-company lawyer, comments that program trading "increases volatility, but I don't think it should be banned.
There's no culprit here.
The market is just becoming more efficient." Arbitraging on differences between spot and futures prices is an important part of many financial markets, he says.
He adds that his shares in a company savings plan are invested in a mutual fund, and volatility, on a given day, may hurt the fund.
But "I'm a long-term investor," he says. "If you were a short-term investor, you might be more leery about program trading." 
Jim Enzor of Atlanta defends program trading because he believes that it can bring the market back up after a plunge. "If we have a real bad day, the program would say, `Buy, '" he explains. "If you could get the rhythm of the program trading, you could take advantage of it." 
What else can a small investor do? 
Scott Taccetta, a Chicago accountant, is going into money-market funds.
Mr. Taccetta says he had just recouped the $5,000 he lost in the 1987 crash when he lost more money last Oct. 13.
Now, he plans to sell all his stocks by the first quarter of 1990. 
In October, before the market dropped, Mrs. Arighi of Arnold, Calif., moved to sell the "speculative stocks" in her family trust "so we will be able to withstand all this flim-flammery" caused by program trading.
She believes that the only answer for individuals is to "buy stocks that'll weather any storm." 
Lucille Gorman, an 84-year-old Chicago housewife, has become amazingly immune to stock-market jolts.
Mrs. Gorman took advantage of low prices after the 1987 crash to buy stocks and has hunted for other bargains since the Oct. 13 plunge. 
"My stocks are all blue chips," she says. "If the market goes down, I figure it's paper profits I'm losing.
On the other hand, if it goes way sky high, I always sell.
You don't want to get yourself too upset about these things." 
Young's Market Co., a wholesaler of spirits, wines and other goods, said it will merge with a new corporation formed by the Underwood family, which controls Young's. 
Under terms of the agreement, shareholders other than the Underwoods will receive $3,500 a share at closing, which is expected in December.
The Underwood family said that holders of more than a majority of the stock of the company have approved the transaction by written consent. 
Researchers at American Telephone & Telegraph Co. 's Bell Laboratories reported they raised the electrical current-carrying capacity of new superconductor crystals by a factor of 100, moving the materials closer to commercial use. 
The scientists said they created small changes in the crystal-lattice structures of the superconductors to raise the amount of current that single crystals could carry to 600,000 amps per square centimeter in a moderately strong magnetic field.
The scientists said they made the advance with yttrium-containing superconductors cooled to liquid-nitrogen temperature, or minus 321 degrees Fahrenheit.
Their report appears in today's issue of the journal Nature. 
The finding marks a significant step in research on "bulk" superconductors, which are aimed at use in wires for motors, magnets, generators and other applications.
Scientists had obtained even higher current-carrying capacity in thin films of the new superconductors, but have had problems increasing the amount of current that bulk crystals could carry. 
Superconductors conduct electricity without resistance when cooled.
A family of ceramic superconductors discovered during the past three years promise new technologies such as cheaper electrical generation -- but only if their current-carrying capacity can be raised. 
The AT&T advance shows how one aspect of the current-carrying problem can be overcome.
But "it won't lead to imminent use" of new superconductors, cautioned Robert B. van Dover, one of the AT&T researchers.
He added that the current-carrying capacity of multi-crystal samples of superconductors remains too low for most practical uses because of so-called weak links between crystals.
Such multi-crystal materials will probably be needed for commercial applications. 
Mr. van Dover said the AT&T team created the desired crystal changes by bombarding superconductor samples with neutrons, a process that creates some radioactivity in the samples and may not be feasible for large-scale commercial use. 
Still, scientists breathed a collective sigh of relief about the finding, because it demonstrates how to overcome the "flux pinning" problem that earlier this year was widely publicized as undercutting new superconductors' potential.
The problem involves the motion of small magnetic fields within superconductor crystals, limiting their current-carrying capacity.
Mr. van Dover said the crystal changes his team introduced apparently pins the magnetic fields in place, preventing them from lowering current-carrying capacity. 
Mr. van Dover added that researchers are trying to determine precisely what crystal changes solved the problem.
Determining that may enable them to develop better ways to introduce the needed crystal-lattice patterns.
The AT&T team also is trying to combine their latest superconductor process with "melt-textured growth," a process discovered earlier at Bell Laboratories.
The combined processes may significantly raise the current-carrying capacity of multi-crystal samples. 
William C. Walbrecher Jr., an executive at San Francisco-based 1st Nationwide Bank, was named president and chief executive officer of Citadel Holding Corp. and its principal operating unit, Fidelity Federal Bank. 
The appointment takes effect Nov. 13.
He succeeds James A. Taylor, who stepped down as chairman, president and chief executive in March for health reasons.
Edward L. Kane succeeded Mr. Taylor as chairman. 
Separately, Citadel posted a third-quarter net loss of $2.3 million, or 68 cents a share, versus net income of $5.3 million, or $1.61 a share, a year earlier. 
The latest results include some unusual write-downs, which had an after-tax impact of $4.9 million.
Those included costs associated with the potential Valley Federal Savings and Loan Association acquisition, which was terminated on Sept. 27, 1989.
In addition, operating results were hit by an increase in loan and real estate loss reserves. 
In American Stock Exchange composite trading, Citadel shares closed yesterday at $45.75, down 25 cents. 
The following were among yesterday's offerings and pricings in the U.S. and non-U.S. capital markets, with terms and syndicate manager, as compiled by Dow Jones Capital Markets Report: 
International Business Machines Corp. -- $750 million of 8 3/8% debentures due Nov. 1, 2019, priced at 99 to yield 8.467%.
The 30-year non-callable issue was priced at a spread of 57 basis points above the Treasury's 8 1/8% bellwether long bond.
Rated triple-A by both Moody's Investors Service Inc. and Standard & Poor's Corp., the issue will be sold through underwriters led by Salomon Brothers Inc.
The size of the issue was increased from an originally planned $500 million. 
Detroit -- $130 million of general obligation distributable state aid bonds due 1991-2000 and 2009, tentatively priced by a Chemical Securities Inc. group to yield from 6.20% in 1991 to 7.272% in 2009.
There is $81.8 million of 7.20% term bonds due 2009 priced at 99 1/4 to yield 7.272%.
Serial bonds are priced to yield from 6.20% in 1991 to 7% in 2000.
The bonds are insured and triple-A-rated. 
Santa Ana Community Redevelopment Agency, Calif. -- $107 million of tax allocation bonds, 1989 Series A-D, due 1991-1999, 2009 and 2019, tentatively priced by a Donaldson Lufkin & Jenrette Securities Corp. group to yield from 6.40% in 1991 to 7.458% in 2019.
The 7 3/8% term bonds due 2009 are priced at 99 1/2 to yield 7.422%, and 7 3/8% term bonds due 2019 are priced at 99 to yield 7.458%.
Serial bonds are priced at par to yield from 6.40% in 1991 to 7.15% in 1999.
The bonds are rated single-A by S&P, according to the lead underwriter. 
Maryland Community Development Administration, Department of Housing and Community Development -- $80.8 million of single-family program bonds, 1989 fourth and fifth series, tentatively priced by a Merrill Lynch Capital Markets group to yield from 6.25% in 1992 for fourth series bonds to 7.74% in 2029 for fifth series bonds.
There is $30.9 million of fourth series bonds, the interest on which is not subject to the federal alternative minimum tax.
They mature 1992-1999, 2009 and 2017.
Fourth series serial bonds are priced at par to yield from 6.25% in 1992 to 7% in 1999.
The 7.40% term bonds due 2009 are priced to yield 7.45%, and 7.40% term bonds due 2017 are priced to yield 7.50%.
There is $49.9 million of fifth series bonds, which are subject to the federal alternative minimum tax.
They mature in 2005, 2009 and 2029.
Bonds due in 2005 have a 7 1/2% coupon and are priced at par.
The 7 5/8% bonds due 2009 are priced to yield 7.65%, and 7 5/8% bonds due 2029 are priced at 98 1/2 to yield 7.74%.
The underwriters expect a double-A rating from Moody's. 
Heiwado Co. (Japan) -- $100 million of Eurobonds due Nov. 16, 1993, with equity-purchase warrants, indicating a 3 7/8% coupon at par, via Daiwa Europe Ltd.
Each $5,000 bond carries one warrant, exercisable from Nov. 30, 1989, through Nov. 2, 1993, to buy shares at an expected premium of 2 1/2% to the closing price when terms are fixed Tuesday.
Fees 2 1/4. 
Svenska Intecknings Garanti Aktiebolaget (Sweden) -- 20 billion yen of 6% Eurobonds due Nov. 21, 1994, priced at 101 3/4 to yield 6.03% less full fees, via Mitsui Finance International.
Guaranteed by Svenska Handelsbanken.
Fees 1 7/8. 
Takashima & Co. (Japan) -- 50 million Swiss francs of privately placed convertible notes due March 31, 1994, with a fixed 0.25% coupon at par via Yamaichi Bank (Switzerland).
Put option March 31, 1992, at a fixed 107 7/8 to yield 3.43%.
Each 50,000 Swiss franc note is convertible from Nov. 30, 1989, to March 16, 1994 at a 5% premium over the closing share price Monday, when terms are scheduled to be fixed.
Fees 1 3/4. 
Mitsubishi Pencil Co. (Japan) -- 60 million Swiss francs of privately placed convertible notes due Dec. 31, 1993, with a fixed 0.25% coupon at par via Union Bank of Switzerland.
Put option on Dec. 31, 1991, at a fixed 106 7/8 to yield 3.42%.
Each 50,000 Swiss franc note is convertible from Dec. 5, 1989, to Dec. 31, 1993, at a 5% premium over the closing share price Tuesday, when terms are scheduled to be fixed.
Fees 1 5/8. 
Koizumi Sangyo Corp. (Japan) -- 20 million Swiss francs of 6 1/2% privately placed notes due Nov. 29, 1996, priced at 99 1/2 via Dai-Ichi Kangyo Bank (Schweiz).
Guarantee by Dai-Ichi Kangyo Bank Ltd. Fees 1 3/4. 
Although his team lost the World Series, San Francisco Giants owner Bob Lurie hopes to have a new home for them.
He is an avid fan of a proposition on next week's ballot to help build a replacement for Candlestick Park.
Small wonder, since he's asking San Francisco taxpayers to sink up to $100 million into the new stadium.
As San Francisco digs out from The Pretty Big One, opponents say the last thing the city can afford is an expensive new stadium. 
A stadium craze is sweeping the country.
It's fueled by the increasing profitability of major-league teams.
Something like one-third of the nation's 60 largest cities are thinking about new stadiums, ranging from Cleveland to San Antonio and St. Petersburg. 
Most boosters claim the new sports complexes will be moneymakers for their city.
Pepperdine University economist Dean Baim scoffs at that.
He has looked at 14 baseball and football stadiums and found that only one -- private Dodger Stadium -- brought more money into a city than it took out.
Stadiums tend to redistribute existing wealth within a community, not create more of it. 
Voters generally agree when they are given a chance to decide if they want to sink their own tax dollars into a new mega-stadium.
San Francisco voters rejected a new ballpark two years ago.
Last month, Phoenix voters turned thumbs down on a $100 million stadium bond and tax proposition.
Its backers fielded every important interest on their team -- a popular mayor, the Chamber of Commerce, the major media -- and spent $100,000 on promotion.
But voters decided that if the stadium was such a good idea someone would build it himself, and rejected it 59% to 41%. 
In San Francisco, its backers concede the ballpark is at best running even in the polls.
George Christopher, the former San Francisco mayor who built Candlestick Park for the Giants in the 1960s, won't endorse the new ballpark.
He says he had Candlestick built because the Giants claimed they needed 10,000 parking spaces.
Since the new park will have only 1,500 spaces, Mr. Christopher thinks backers are playing some fiscal "games" of their own with the voters. 
Stadium boosters claim that without public money they would never be built.
Miami Dolphins owner Joe Robbie disagrees, and he can prove it.
Several years ago he gave up trying to persuade Miami to improve its city-owned Orange Bowl, and instead built his own $100 million coliseum with private funds.
He didn't see why the taxpayers should help build something he would then use to turn a healthy profit. "This stadium shows that anything government can do, we can do better," Mr. Robbie says. 
But to Moon Landrieu, the former New Orleans mayor who helped build that city's cavernous, money-losing Superdome, questions of who benefits or the bottom line are of little relevance. "The Superdome is an exercise in optimism, a statement of faith," he has said. "It is the very building of it that is important, not how much of it is used or its economics." 
An Egyptian Pharaoh couldn't have justified his pyramids any better.
But civilization has moved forward since then.
Today taxpayers get to vote, most of the time, on whether they want to finance the building schemes of our modern political pharaohs, or let private money erect these playgrounds for public passions. 
Reed International PLC said that net income for the six months ended Oct. 1 slipped 5% to #89.7 million ($141.9 million), or 16 pence a share, from #94.8 million ($149.9 million), or 17.3 pence a share. 
The British paper, packaging and publishing concern, said profit from continuing lines fell 10% to #118 million from #130.6 million. 
While there were no one-time gains or losses in the latest period, there was a one-time gain of #18 million in the 1988 period.
And while there was no profit this year from discontinued operations, last year they contributed #34 million, before tax. 
Pretax profit fell 3.7% to #128 million from #133 million and was below analysts' expectations of #130 million to #135 million, but shares rose 6 pence to 388 pence in early trading yesterday in London. 
Reed is paying an interim dividend of 4.6 pence, up 15% from 4 pence a year earlier. 
Sales fell 20% to #722 million. 
Earnings were hurt by disposal of operations in its restructuring, Reed said. 
Wall Street's big securities firms face the prospect of having their credit ratings lowered. 
The reason: Risks from the firms' new "merchant banking" activities are rising as revenue from the industry's traditional business erodes. 
The downgrading of debt issued by CS First Boston Inc., parent of First Boston Corp., by Moody's Investors Service Inc., coupled with a Moody's announcement that Shearson Lehman Hutton Holdings Inc. is under review for a possible downgrade, sent shivers through the brokerage community this week.
With the shudders came the realization that some of Wall Street's biggest players are struggling to maintain the stellar credit standing required to finance their activities profitably. 
Securities firms are among the biggest issuers of commercial paper, or short-term corporate IOUs, which they sell to finance their daily operations.
The biggest firms still retain the highest ratings on their commercial paper. 
But Moody's warned that Shearson's commercial paper rating could be lowered soon, a move that would reduce Shearson's profit margins on its borrowings and signal trouble ahead for other firms.
Shearson is 62%-owned by American Express Co. 
"Just as the 1980s bull market transformed the U.S. securities business, so too will the more difficult environment of the 1990s," says Christopher T. Mahoney, a Moody's vice president. "A sweeping restructuring of the industry is possible." Standard & Poor's Corp. says First Boston, Shearson and Drexel Burnham Lambert Inc., in particular, are likely to have difficulty shoring up their credit standing in months ahead. 
What worries credit-rating concerns the most is that Wall Street firms are taking long-term risks with their own capital via leveraged buy-out and junk bond financings.
That's a departure from their traditional practice of transferring almost all financing risks to investors.
Whereas conventional securities financings are structured to be sold quickly, Wall Street's new penchant for leveraged buy-outs and junk bonds is resulting in long-term lending commitments that stretch out for months or years. 
"The recent disarray in the junk bond market suggests that brokers may become longer-term creditors than they anticipated and may face long delays" in getting their money back, says Jeffrey Bowman, a vice president at S&P, which raised a warning flag for the industry in April when it downgraded CS First Boston. 
"Wall Street is facing a Catch-22 situation," says Mr. Mahoney of Moody's.
Merchant banking, where firms commit their own money, "is getting riskier, and there's less of it to go around." In addition, he says, the buy-out business is under pressure "because of the junk bond collapse," meaning that returns are likely to decline as the volume of junk-bond financings shrinks. 
In a leveraged buy-out, a small group of investors acquires a company in a transaction financed largely by borrowing, with the expectation that the debt will be paid with funds generated by the acquired company's operations or sales of its assets. 
In a recent report, Moody's said it "expects intense competition to occur through the rest of the century in the securities industry, which, combined with overcapacity, will create poor prospects for profitability." It said that the "temptation for managements to ease this profit pressure by taking greater risks is an additional rating factor." 
Both Moody's and S&P cited First Boston's reliance in recent years on merchant banking, which has been responsible for a significant portion of the closely held firm's profit.
The recent cash squeeze at Campeau Corp., First Boston's most lucrative client of the decade, is proving costly to First Boston because it arranged more than $3 billion of high-yield, high-risk junk financings for Campeau units.
In addition, a big loan that First Boston made to Ohio Mattress Co. wasn't repaid on time when its $450 million junk financing for a buy-out of the bedding company was withdrawn. 
"These two exposures alone represent a very substantial portion of CS First Boston's equity," Moody's said. "Total merchant banking exposures are in excess of the firm's equity." CS First Boston, however, benefits from the backing of its largest shareholder, Credit Suisse, Switzerland's third largest bank. 
Shearson also has been an aggressive participant in the leveraged buy-out business.
But its earnings became a major disappointment as its traditional retail, or individual investor, business showed no signs of rebounding from the slump that followed the October 1987 stock market crash.
In addition, Shearson's listed $2 billion of capital is overstated, according to the rating concerns, because it includes $1.7 billion of goodwill.
Shearson "really only has $300 million of capital," says Mr. Bowman of S&P. 
A Shearson spokesman said the firm isn't worried. "A year ago, Moody's also had Shearson under review for possible downgrade," he said. "After two months of talks, our rating was maintained." Drexel, meanwhile, already competes at a disadvantage to its big Wall Street rivals because it has a slightly lower commercial paper rating. 
The collapse of junk bond prices and the cancellation of many junk bond financings apparently have taken their toll on closely held Drexel, the leading underwriter in that market.
The firm also has been hit with big financial settlements with the government stemming from its guilty plea to six felonies related to a big insider-trading scandal.
Drexel this year eliminated its retail or individual customer business, cutting the firm's workforce almost in half to just over 5,000. 
Recently, Drexel circulated a private financial statement among several securities firms showing that its earnings performance has diminished this year from previous years.
The firm's capital, moreover, hasn't grown at the same rate as in the past, officials at these firms say. 
Drexel remains confident of its future creditworthiness. "We're well positioned with $1.7 billion of capital," a Drexel spokesman said. "And as a leading investment and merchant banking firm, the fact that we are no longer subject to the uncertainties and vicissitudes of the retail business is a major plus in our view.
Moreover, we've probably been the most aggressive firm on the Street in reducing costs, which are down around 40% over the last six months." 
Lewis C. Veraldi, the father of the team that created the highly successful Ford Taurus and Mercury Sable cars, retired early after experiencing recent heart problems. 
Most recently, Mr. Veraldi, 59 years old, has been vice president of product and manufacturing engineering at Ford Motor Co.
But he is best known in the auto industry as the creator of a team car-development approach that produced the two midsized cars that were instrumental in helping the No. 2 auto maker record profits in recent years and in enabling the company's Ford division to eclipse General Motors Corp. 's Chevrolet division as the top-selling nameplate in the U.S. 
Under the so-called Team Taurus approach, Mr. Veraldi and other Ford product planners sought the involvement of parts suppliers, assembly-line workers, auto designers and financial staff members from the initial stages of the development cycle. 
The concept's goal was to eliminate bureaucracy and make Ford's product development more responsive to consumer demands.
It was later applied to other new-car programs, including those that produced the Ford Thunderbird and Mercury Cougar. 
Ford Chairman Donald E. Petersen said yesterday that Mr. Veraldi has "helped to change the world's perception of American-made cars." Mr. Veraldi worked at Ford for 40 years, holding a variety of car and parts-engineering positions. 
The limits to legal absurdity stretched another notch this week when the Supreme Court refused to hear an appeal from a case that says corporate defendants must pay damages even after proving that they could not possibly have caused the harm.
We can understand and share the compassion that makes judges sometimes wish to offer a kind of Solomonic aid to those who've been hurt.
But this case is a stark lesson in how the failures of the traditional policy-making process have left the courts as the only forum this country has to debate risk, technology and innovation.
Too often now, a single court decision becomes the precedent for other, less compelling cases. 
From the 1940s until 1971, some two million women took the synthetic hormone diethylstilbestrol (DES) to prevent miscarriages and morning sickness.
The drug was approved by the Food and Drug Administration and marketed by some 300 pharmaceutical companies, often under generic labels.
In the 1970s, scientists reported cancer cases among the daughters of DES users. 
The cases quickly went to court, but the mothers of several thousand DES plaintiffs couldn't recall whose brand they used.
Beginning in 1980, courts in several states including California and New York decided to suspend the common-law rule that plaintiffs must prove that the defendants are the ones who are liable.
Courts made the assumption that all DES pills were essentially the same, and created a market-share test so that damages would be assessed against drug makers in the proportion of their share of the original sales. 
This has some logic.
Drug makers shouldn't be able to duck liability because people couldn't identify precisely which identical drug was used.
But courts quickly tumbled down a slippery slope.
Just as all plaintiffs are not alike, it turns out that DES defendants marketed the drugs differently and may have offered different warranties.
The ultimate result came in Hymowitz v.
Lilly, where the highest New York court expanded the market-share approach for the first time to say that drug makers that could prove Mindy Hymowitz's mother didn't use their pill must still pay their share of any damages. 
But as Duke University law professor William Van Alstyne notes, by this reasoning a defendant could be held liable in New York for a bad apple even if he sold all his apples in California.
Despite the Supreme Court's refusal to hear the case, there are serious constitutional issues of due process and uncompensated takings from the defendants.
The big problem, however, is that there's no guarantee that this reasoning will be limited to DES or to drugs. 
The problem here goes well beyond twisting legal doctrine.
The California Supreme Court last year reversed direction to make it much harder to win DES cases because the justices saw how all the pharmaceutical litigation has chilled the introduction of new drugs.
The court rejected strict liability for prescription drugs, citing the huge, hidden social costs. "Public policy favors the development and marketing of beneficial new drugs, even though some risks, perhaps serious ones, might accompany their introduction because drugs can save lives and reduce pain and suffering," the unanimous court said.
The California justices noted that the fear of litigation already forced the only remaining anti-morning-sickness drug, Bendectin, off the U.S. market. 
This raises the key issue: What to do about people who suffer serious injuries from beneficial drugs?
We now know that holding drug makers liable where there's no evidence that they or anyone else knew of any risks only means the drugs won't be available to anyone.
As liability expert Peter Huber tells us, after the Hymowitz case, if any drug maker introduces an anti-miscarriage drug "it's time to sell that company's stock short." We also know that the tort system is a lousy way to compensate victims anyway; some win the legal lottery, others get much less and contingency-fee lawyers take a big cut either way. 
DES daughters and other victims of drugs would be better off if their cases were taken out of the courts.
Congress could create a compensation program to help such victims while protecting the national interest in encouraging new drugs.
But a 1986 law that supposedly replaced lawsuits over children's vaccines with a compensation fund has predictably led to even more litigation. 
Everyone by now understands that Congress is utterly incapable of writing legislation to help deserving people without its becoming some billion-dollar morass.
We have no doubt this is one reason judges in New York and justices on the Supreme Court are willing to trash the law in the DES cases.
They must figure that justice has to get done by somebody, but know it won't be done by Congress. 
Odyssey Partners Limited Partnership, an investment firm, completed the purchase of May Department Stores Co. 's Caldor discount chain for $500 million plus the assumption of $52 million in debt. 
Caldor, based in Norwalk, Conn., operates 118 stores in the Northeast; it reported revenue of $1.6 billion last year.
May Stores, St. Louis, runs such well-known department stores as Lord & Taylor. 
N.V. DSM said net income in the third quarter jumped 63% as the company had substantially lower extraordinary charges to account for a restructuring program. 
The Dutch chemical group said net income gained to 235 million guilders ($113.2 million), or 6.70 guilders a share, from 144 million guilders, or 4.10 guilders a share, a year ago. 
The 32% state-owned DSM had eight million guilders of extraordinary charges in the latest quarter, mainly to reflect one-time losses in connection with the disposal of some operations.
The charges were offset in part by a gain from the sale of the company's construction division. 
Last year, DSM had 71 million guilders of extraordinary charges for the restructuring program and other transactions. 
The earnings growth also was fueled by the company's ability to cut net financing spending by half to around 15 million guilders.
Also, substantially lower Dutch corporate tax rates helped the company keep its tax outlay flat relative to earnings growth, the company added. 
Sales, however, were little changed at 2.46 billion guilders, compared with 2.42 billion guilders. 
Allergan Inc. said it received Food and Drug Administration approval to sell the PhacoFlex intraocular lens, the first foldable silicone lens available for cataract surgery. 
The len's foldability enables it to be inserted in smaller incisions than are now possible for cataract surgery, the eye care and skin care concern said.
Cataracts refer to a clouding of the eye's natural lens. 
Allergan was spun off in July from SmithKline Beckman Corp. as part of the merger of SmithKline and Beecham Group 
A man from the Bush administration came before the House Agriculture Committee yesterday to talk about the U.S.'s intention to send some $100 million in food aid to Poland, with more to come from the EC.
The committee's members are worried what all this free food might do to the economic prospects of Poland's own farmers.
Rep. Gary Ackerman noted that past food aid had harmed farmers in El Salvador and Egypt.
However well intentioned, food transfers have the habit of growing larger and wrecking the market incentives for the recipient country's own farmers.
The First World has for some time had the bad habit of smothering other people's economies with this kind of unfocused kindness.
It should be constantly stressed that Poland's farmers mostly need a real market for their products. 
Elco Industries Inc. said it expects net income in the year ending June 30, 1990, to fall below a recent analyst's estimate of $1.65 a share. 
The Rockford, Ill., maker of fasteners also said it expects to post sales in the current fiscal year that are "slightly above" fiscal 1989 sales of $155 million.
The company said its industrial unit continues to face margin pressures and lower demand. 
In fiscal 1989, Elco earned $7.8 million, or $1.65 a share.
The company's stock fell $1.125 to $13.625 in over-the-counter trading yesterday. 
Oshkosh Truck Corp., Oshkosh, Wis., estimated earnings for its fourth quarter ended Sept. 30 fell 50% to 75% below the year-earlier $4.5 million, or 51 cents a share. 
The truck maker said the significant drop in net income will result in lower earnings for the fiscal year.
In fiscal 1988, the company earned $17.3 million, or $1.92 a share, on revenue of $352.9 million. 
Oshkosh Truck attributed the downturn in its earnings to higher start-up costs of its new chassis division, a softer motor-home market and higher administrative costs of compliance with government contractor regulations. 
The company said it is in the process of phasing out John Deere, its current source of production for midsized motor home chassis.
In anticipation of the start-up of its new factory, the company said a larger-than-normal chassis supply has been built to carry it through the transition period. 
Tokyo stocks edged up Wednesday in relatively active but unfocused trading. 
London shares finished moderately higher. 
At Tokyo, the Nikkei index of 225 selected issues, which gained 132 points Tuesday, added 14.99 points to 35564.43. 
In early trading in Tokyo Thursday, the Nikkei index fell 63.79 points to 35500.64. 
Wednesday's volume on the First Section was estimated at 900 million shares, in line with Tuesday's 909 million. 
Declining issues slightly outnumbered advancing issues, 454 to 451. 
Investors switched trading focus quickly as they did Tuesday, reflecting uncertainty about long-term commitments to any issue or sector, traders said. 
Speculation, on the other hand, sparked buying in certain incentive-backed issues, though rumors underlying such shares eventually proved untrue.
The development, traders said, showed that there is more than ample liquidity available for investment despite the market's recent directionless trend. 
Dealers led the market Wednesday by actively trading for their own accounts, observers said. 
Institutions mostly remained on the sidelines because of uncertainty regarding interest rates and the dollar. 
The Tokyo Stock Price Index (Topix) of all issues listed in the First Section, which gained 16.05 points Tuesday, was down 1.46 points, or 0.05%, at 2691.19. 
The Second Section index, which added 6.84 points Tuesday, was up 5.92 points, or 0.16%, to close at 3648.82. 
Volume in the second section was estimated at 18 million shares, up from 14 million Tuesday. 
Akio Yamamoto, managing director of Nomura Investment Trust Management, said that if the U.S. federal funds rate declines to around 8.5%, institutions would acquire a clearer idea regarding the direction of the market and thus more comfortably participate in active buying.
Tokyu Group, Mitsubishi Estate and Bridgestone/Firestone, which advanced Tuesday, declined on profit-taking.
Wednesday's dominant issue was Yasuda Fire & Marine Insurance, which continued to surge on rumors of speculative buying.
It ended the day up 80 yen (56 cents) to 1,880 yen ($13.15). 
Due to continuingly high gold prices tied to uncertainty about the U.S. currency, investor interest was directed toward oil and mining shares, which traders called a "defensive" action frequently taken when the dollar is expected to fall or during times of inflation. 
Teikoku Oil, also stimulated by rumors of speculative buying, advanced 100 yen to 1,460.
Showa Shell gained 20 to 1,570 and Mitsubishi Oil rose 50 to 1,500. 
Sumitomo Metal Mining fell five yen to 692 and Nippon Mining added 15 to 960. 
Among other winners Wednesday was Nippon Shokubai, which was up 80 at 2,410. 
Marubeni advanced 11 to 890. 
London share prices were bolstered largely by continued gains on Wall Street and technical factors affecting demand for London's blue-chip stocks. 
The Financial Times-Stock Exchange 100-share index closed 17.5 points higher at 2160.1.
It rose largely throughout the session after posting an intraday low of 2141.7 in the first 40 minutes of trading.
The index ended the day near its session high of 2163.2, which was posted within the last half-hour of trading. 
Dealers said most investor interest was focused on defensive blue-chip stocks, particularly those with limited U.K. exposure.
Also, several key blue chips were pushed higher in thin volume because of a technical squeeze among market makers. 
Sterling's firm tone, combined with a steady opening on Wall Street, also tempted some investors to come back to the market, dealers said.
There were concerns early in the day that Wall Street's sharp gains on Tuesday were overdone and due for a reversal. 
The FT 30-share index settled 16.7 points higher at 1738.1.
Volume was 372.9 million shares, up from 334.5 million on Tuesday. 
Dealers said institutions were still largely hugging the sidelines on fears that the market's recent technical rally might prove fragile.
They cited Wall Street's recent volatility and the lack of a clear indication over the market's short-term direction as factors in the institutional caution. 
Jaguar, a U.K. luxury auto maker being pursued by Ford Motor and General Motors, gained 10 pence (16 cents) a share to close at 879 pence ($13.90).
It shed about 7 pence, however, after dealers said the market was disappointed that Ford didn't move to tender a bid for control of the company. 
Dealers said the U.K. government's decision Tuesday to waive its protective "golden share" in the auto maker raised prospects of a bidding war between the two U.S. auto giants. 
But the waiver also was seen as a signal that Ford, a major U.K. auto industry employer, was able to gain government acceptance of its bid for control of Jaguar.
Dealers said that interpretation sparked expectations of an imminent bid by Ford. 
B.A.T Industries, which is being pursued by Sir James Goldsmith's Hoylake Investments, rose 9 to 753 on speculation that Hoylake will sweeten its bid, dealers said.
Like Jaguar, B.A.T also eased off its highs in afternoon dealings. 
Reed International, a U.K. publishing group, gained 15 to 397 despite reporting a 3.7% drop in interim pretax profit. 
Analysts said the fall in pretax profit was due to the group's recent restructuring and sale of peripheral units, and that its remaining businesses are performing well.
Dealers said the market agreed. 
Stocks boosted by market-makers shopping to cover book requirements in FT-SE 100 shares included Carlton Communications, which climbed 32 to 778. 
Drug companies in the key index also notched gains as market-makers searched for stock in anticipation of demand due to the sector's defensive qualities.
Wellcome gained 18 to 666 on a modest 1.1 million shares.
Glaxo, the U.K.'s largest pharmaceutical concern, advanced 23 to #14.13. 
Stock prices closed higher in Stockholm, Amsterdam and Frankfurt and lower in Zurich.
Paris, Brussels, and Milan were closed for a holiday.
South African gold stocks closed marginally lower. 
Elsewhere, share prices closed higher in Singapore, Taipei and Wellington, were mixed in Hong Kong, lower in Seoul and little changed in Sydney.
Manila markets were closed for a holiday. 
Here are price trends on the world's major stock markets, as calculated by Morgan Stanley Capital International Perspective, Geneva.
To make them directly comparable, each index is based on the close of 1969 equaling 100.
The percentage change is since year-end. 
The following issues were recently filed with the Securities and Exchange Commission: 
Intermec Corp., offering of 1,050,000 common shares, via Goldman, Sachs & Co. and Piper, Jaffray & Hopwood Inc. 
Middlesex Water Co., offering of 150,000 shares of common stock, via Legg Mason Wood Walker Inc. and Howard, Weil, Labouisse, Friedrichs Inc. 
Midwesco Filter Resources Inc., initial offering of 830,000 common shares, to be offered by the company, via Chicago Corp. 
Nylev Municipal Fund Inc., offering of five million common shares. 
Occidental Petroleum Corp., shelf offering of $1.5 billion in senior debt securities. 
Prime Motor Inns Inc., offering of up to $300 million zero coupon convertible debentures, via Drexel Burnham Lambert Inc. and Montgomery Securities. 
Service Fracturing Co., proposed offering of 1.2 million shares of common stock, via Lovett Mitchell Webb & Garrison, Inc., and Blunt Ellis & Loewi Inc. 
Western Gas Resources Inc., initial offering of 3,250,000 shares of common stock, of which 3,040,000 shares will be sold by the company and 210,000 shares by a holder, via Prudential-Bache Capital Funding, Smith Barney, Harris Upham & Co., and Hanifen, Imhoff Inc. 
Hold the Putty! 
With lipsticks, liners, lotions 
and creams, 
There are still beauty plans 
left to tackle: 
But as the years go by, it 
seems 
That before I paint, I should 
spackle. 
-- Pat D'Amico. 
Criminal charges were filed against Diceon Electronics Inc. and two company officials alleging waste disposal violations in its Chatsworth, Calif., facility. 
The Los Angeles County district attorney's office filed seven felony and five misdemeanor counts charging that late last year and early this year the Irvine, Calif.-based circuit-board manufacturer illegally disposed of acid, caustic and heavy metals into the sewer system, and stored hazardous materials in leaky, unlabeled or open-top containers. 
Named as defendants were Roland Matthews, president, and Peter Jonas, executive vice president and chief financial officer, as well as a former plant manager.
The company said local authorities held hearings on the allegations last spring and had returned the plant to "routine inspection" in August. "The company does not feel that it or any of the individuals violated any criminal statute and the company expects full vindication in court." Arraignments are scheduled for Nov. 14. 
Consumer confidence stayed strong in October, despite the unsettling gyrations of the stock market. 
"The sharp stock market decline in late October appears to have had little or no effect on consumers," said Fabian Linden, executive director of the Conference Board's consumer research center. "Survey returns received after the drop in the Dow Jones average were about the same as the views expressed prior to that event." 
The nonprofit, industry-supported group said its Consumer Confidence Index was 116.4 in October, barely changed from a revised 116.3 in September.
The index was 116.9 in October 1988 and in the past year has ranged from a low of 112.9 to a high of 120.7.
It uses a base of 100 in 1985. 
In October, more people said that present business conditions were "good" than in September.
An equal number in each month said that employment conditions were good. 
And 19.6% of consumers contacted believed business conditions will improve in the coming six months, compared with 18.3% in September.
Also, more people said conditions will worsen in the period. (Fewer said conditions won't change.) In October 1988, 21.1% said business conditions would improve. 
In October 1989, 16.9% said more jobs will be created in the coming six months, compared with 17.4% in September and 18.6% in October 1988.
Only 26.8% in October, compared with 28.5% in September and 26.8% in October 1988, said income would increase. 
"The sustained level of confidence can be attributed to the continued favorable circumstances which affect the consumer's day-to-day economic life," said Mr. Linden. "Unemployment continues at a relatively low level, providing a sense of job security, and a low inflation rate has kept the purchasing power of the weekly paycheck reasonably strong." 
The consumer confidence survey, covering 5,000 U.S. households, is conducted in the first two weeks of each month for the Conference Board by National Family Opinion Inc., a Toledo, Ohio, market researcher.
Buying plans were mixed in October, with fewer households indicating plans to buy cars and more saying they will buy homes and appliances in the coming six months. 
In October, 6.7% of respondents said they will buy a car, easing from September when 8.1% anticipated a purchase.
In October 1988, 7.3% said they would buy a car. 
Home purchase plans increased to 3.3% from 3.1% in the two recent months.
In October 1988, 3.7% said they would buy a house.
In 1989, home purchase plans have ranged monthly from 2.9% to 3.7% of respondents.
In October, 30.6% said they will buy appliances in the coming six months, compared with 27.4% in September and 26.5% in October 1988. 
Despite a deluge of economic news, the Treasury market remained quiet but the corporate market was abuzz over International Business Machines Corp. 's huge debt offering. 
"There were so many economic reports but the market didn't care about any of them," said Kathleen Camilli, a money market economist at Drexel Burnham Lambert Inc. "So the focus turned to other fixed-income markets, corporate and mortgages in particular," she said. 
IBM, the giant computer maker, offered $750 million of non-callable 30-year debentures priced to yield 8.47%, or about 1/2 percentage point higher than the yield on 30-year Treasury bonds. 
The size of IBM's issue was increased from an originally planned $500 million as money managers and investors scrambled to buy the bonds. 
In the investment-grade corporate market, "it's rare that you get an opportunity to buy a name that has such broad appeal and has such attractive call features," said James Ednie, a Drexel industrial bond trader. 
Money managers ranked IBM's offering as the most significant investment-grade sale of the year because large issues of long-term debt by companies with triple-A credit are infrequent.
Syndicate officials at lead underwriter Salomon Brothers Inc. said the debentures were snapped by up pension funds, banks, insurance companies and other institutional investors.
In the Treasury market, investors paid scant attention to the day's economic reports, which for the most part provided a mixed view of the economy. 
"Whether you thought the economy was growing weak or holding steady, Õyesterday'så economic indicators didn't change your opinion," said Charles Lieberman, a managing director at Manufacturers Hanover Securities Corp. 
The government reported that orders for manufactured goods were essentially unchanged in September while construction spending was slightly lower.
Both indicators were viewed as signs that the nation's industrial sector is growing very slowly, if at all. 
A survey by the Federal Reserve's 12 district banks and the latest report by the National Association of Purchasing Management blurred that picture of the economy.
In a monthly report prepared for use at the Fed's next Federal Open Market Committee meeting on Nov. 14., the nation's central bank found that price increases have moderated and economic activity has grown at a sluggish pace in recent weeks. 
Among other things, the survey found that manufacturing activity varied considerably across districts and among industries.
The Philadelphia and Cleveland districts, for example, reported declines in manufacturing activity while the Boston, Dallas and San Francisco banks noted that business expanded. 
The purchasing managers index of economic activity rose in October, although it remains below 50%.
A reading below 50% indicates that the manufacturing sector is slowing while a reading above 50% suggests that the industry is expanding. 
Mr. Lieberman said the diverse showing in yesterday's reports "only enhances the importance of the employment data." The employment report, which at times has caused wide swings in bond prices, is due out tomorrow.
The average estimate of 22 economists polled by Dow Jones Capital Markets Report was that non-farm payrolls expanded by 152,000 in October.
The economists forecast a 0.1% rise in the unemployment rate to 5.4%. 
Treasury Securities 
In a surprise announcement, the Treasury said it will reopen the outstanding benchmark 30-year bond rather than create a new one for next week's quarterly refunding of the federal debt. 
The Treasury will raise $10 billion in fresh cash by selling $30 billion of securities, including $10 billion of new three-year notes and $10 billion of new 10-year notes. 
But rather than sell new 30-year bonds, the Treasury will issue $10 billion of 29year, nine-month bonds -- essentially increasing the size of the current benchmark 30-year bond that was sold at the previous refunding in August. 
Credit market analysts said the decision to reopen the current benchmark, the 8 1/8% bond due August 2019, is unusual because the issue trades at a premium to its face amount.
Some dealers said the Treasury's intent is to help government bond dealers gauge investor demand for the securities, given uncertainties about when the auction will occur. 
The Treasury said the refunding is contingent upon congressional and presidential passage of an increase in the federal debt ceiling.
Until such action takes places, the Treasury has no ability to issue new debt of any kind. 
Meanwhile, Treasury bonds ended modestly higher in quiet trading.
The benchmark 30-year bond about 1/4 point, or $2.50 for each $1,000 face amount.
The benchmark was priced at 102 22/32 to yield 7.88% compared with 102 12/32 to yield 7.90% Tuesday.
The latest 10-year notes were quoted at 100 22/32 to yield 7.88% compared with 100 16/32 to yield 7.90%. 
The discount rate on three-month Treasury bills was essentially unchanged at 7.79%, while the rate on six-month bills was slightly lower at 7.52% compared with 7.60% Tuesday. 
Corporate Issues 
IBM's $750 million debenture offering dominated activity in the corporate debt market. 
Meanwhile, most investment-grade bonds ended unchanged to as much as 1/8 point higher. 
In its latest compilation of performance statistics, Moody's Investors Service found that investment-grade bonds posted a total return of 2.7% in October while junk bonds showed a negative return of 1.5%.
Moody's said those returns compare with a 3.8% total return for longer-term Treasury notes and bonds.
Total return measures price changes and interest income. 
For the year to date, Moody's said total returns were topped by the 16.5% of longer-term Treasury issues, closely followed by 15% for investment-grade bonds.
Junk bonds trailed the group again. "Even the 7.2% return from the risk-free three-month Treasury bill has easily outdistanced the 4.1% return from junk bonds," wrote Moody's economist John Lonski in yesterday's market report. "Little wonder that buyers for junk have been found wanting," he said. 
Moody's said the average net asset value of 24 junk-bond mutual funds fell by 4.2% in October. 
Mortgage-Backed Issues 
Mortgage securities ended slightly higher but trailed gains in the Treasury market. 
Ginnie Mae's 9% issue for November delivery finished at 98 5/8, up 2/32, and its 9 1/2% issue at 100 22/32, also up 2/32. 
The Ginnie Mae 9% securities were yielding 9.32% to a 12-year average life. 
Activity was light in derivative markets, with no new issues priced. 
Municipal Issues 
Municipal bonds were mostly unchanged to up 1/8 point in light, cautious trading prior to tomorrow's unemployment report.
A $114 million issue of health facility revenue bonds from the California Health Facilities Financing Authority was temporarily withdrawn after being tentatively priced by a First Boston Corp. group. 
An official for the lead underwriter declined to comment on the reason for the delay, but market participants speculated that a number of factors, including a lack of investor interest, were responsible.
The issue could be relaunched, possibly in a restructured form, as early as next week, according to the lead underwriter. 
A $107.03 million offering of Santa Ana Community Redevelopment Agency, Calif., tax allocation bonds got off to a slow start and may be repriced at lower levels today, according to an official with lead underwriter Donaldson Lufkin & Jenrette Securities Corp.
The Santa Ana bonds were tentatively priced to yield from 6.40% in 1991 to 7.458% in 
Bucking the market trend, an issue of $130 million general obligation distributable state aid bonds from Detroit, Mich., apparently drew solid investor interest.
They were tentatively priced to yield from 6.20% in 1991 to 7.272% in 
Foreign Bond 
West German dealers said there was little interest in Treasury bonds ahead of Thursday's new government bond issue. 
So far, they said, investors appear unenthusiastic about the new issue which might force the government to raise the coupon to more than 7%.
It is generally expected to be the usual 10-year, four billion mark issue.
Rumors to the contrary have been that it would be a six billion mark issue, or that the last Bund, a 7% issue due October 1999, would be increased by two billion marks. 
Elsewhere: 
-- In Japan, the benchmark No. 111 4.6% issue due 1998 ended on brokers screens unchanged at 95.09 to yield 5.435%. 
-- In Britain, the benchmark 11 3/4% bond due 2003/2007 fell 14/32 to 111 2/32 to yield 10.19%.
The 12% notes due 1995 fell 9/32 to 103 3/8 to yield 11.10%. 
Standard & Poor's Corp. lowered to double-C from triple-C the rating on about $130 million of debt.
The rating concern said the textile and clothing company's interest expense exceeds operating profit "by a wide margin" and it noted United's estimated after-tax loss of $24 million for the year ended June 30. 
Travelers Corp. 's third-quarter net income rose 11%, even though claims stemming from Hurricane Hugo reduced results $40 million. 
Net advanced to $94.2 million, or 89 cents a share, from $85 million, or 83 cents a share, including net realized investment gains of $31 million, up from $10 million a year ago.
But revenue declined to $3 billion from $3.2 billion. 
Travelers estimated that the California earthquake last month will result in a fourth-quarter pre-tax charge of less than $10 million. 
The insurer's earnings from commercial property/casualty lines fell 59% in the latest quarter, while it lost $7.2 million in its personal property/casualty business, compared with earnings of $6.1 million a year ago. 
Travelers's employee benefits group, which includes its group health insurance operations, posted earnings of $24 million, compared with a loss of $3 million last year. 
In the first nine months, net was $306 million, compared with a loss of $195 million in the 1988 period.
The year-ago results included a $415 million charge in the 1988 second quarter for underperforming real estate and mortgage loans. 
The British Department of Trade and Industry ordered an investigation of the competitive impact of Michelin Tyre PLC's planned acquisition of National Tyre Service Ltd. 
The department said it referred the takeover to the Monopolies and Mergers Commission because of the purchase's possible effects on the U.K. market for distribution of replacement tires. 
BTR PLC, a U.K. industrial conglomerate, said in June it had sold its National Tyre Service business to Michelin Investment Ltd., a U.K. unit of the tire maker, for #140 million ($221.4 million).
Michelin Tyre is a unit of France's Michelin S.A. 
Michelin officials couldn't immediately comment on the referral, but they noted the purchase from BTR has already been concluded. 
National Tyre, which has 420 branches throughout the U.K., had 1988 pretax profit of #8.5 million. 
Rep. John Dingell, an important sponsor of President Bush's clean-air bill, plans to unveil a surprise proposal that would break with the White House on a centerpiece issue: acid rain. 
The Michigan Democrat's proposal, which is expected today, is described by government sources and lobbyists as significantly weaker than the Bush administration's plan to cut utility emissions that lead to acid rain.
The administration's plan could cost utilities, mainly those that use coal, up to $4 billion a year. 
The proposal comes as a surprise even to administration officials and temporarily throws into chaos the House's work on clean-air legislation.
As chairman of the House Energy and Commerce Committee, Mr. Dingell has almost single-handed control over clean-air legislation. 
People close to the utility industry said Mr. Dingell's proposal appears to guarantee only an estimated seven-million-ton cut in annual sulfur-dioxide emissions that lead to acid rain, though additional cuts could be ordered later.
Mr. Bush's legislative package promises to cut emissions by 10 million tons -- basically in half -- by the year 2000. 
Although final details weren't available, sources said the Dingell plan would abandon the president's proposal for a cap on utilities' sulfur-dioxide emissions.
That proposal had been hailed by environmentalists but despised by utilities because they feared it would limit their growth.
It also would junk an innovative market-based system for trading emissions credits among polluters. 
In addition, it is believed to offer a cost-sharing mechanism that would help subsidize the clean-up costs for the dirtiest coal-fired utilities in the country, sparing their customers from exorbitant jumps in their electric bills.
The administration, sticking to its vow of avoiding tax increases, has staunchly opposed cost-sharing. 
Mr. Dingell's staff was expected to present its acid-rain alternative to other committee members, apparently in an attempt to appease Midwestern lawmakers from high-polluting states who insist on cost-sharing.
It isn't clear, however, whether support for the proposal will be broad enough to pose a serious challenge to the White House's acid-rain plan. 
While the new proposal might appeal to the dirtiest utilities, it might not win the support of utilities, many in the West, that already have added expensive cleanup equipment or burn cleaner-burning fuels.
Lawmakers representing some of the cleaner utilities have been quietly working with the White House to devise ways to tinker with the administration bill to address their acid-rain concerns. 
American City Business Journals Inc. said its president, Michael K. Russell, will resign rather than relocate to new headquarters in Charlotte, N.C. 
Mr. Russell, who co-founded the Kansas City, Mo.-based local business publications concern here, said he would have a five-year consulting agreement with the company, which recently underwent an ownership change. 
Earlier this year Shaw Publishing Inc., Charlotte, acquired 30% of American City and has an agreement to acquire a further 25% from E.W. Scripps Co. next year.
Ray Shaw, chairman of American City, said he would assume Mr. Russell's responsibilities if a successor isn't found this month. 
A nickname for measures to stop the market from plunging too far too fast.
Several moves were taken following the October 1987 crash to coordinate -- and sometimes deliberately disconnect -- the stock and futures markets in times of heightened volatility.
On the Big Board, a "side car" is put into effect when the S&P futures rise or fall 12 points.
The side car routes program trades into a special computer file that scans for imbalances of buy and sell orders.
On the Chicago Mercantile Exchange, S&P 500 futures are not allowed to fall further than 12 points from the previous day's close for half an hour.
If, when trading resumes, the S&P futures fall 30 points from the previous day's close, a one-hour trading halt takes effect.
Also, the reforms allow the Big Board to halt trading for one hour if the Dow Jones Industrial Average falls 250 points, and for two more hours if the Dow slides an additional 150 points on the same day. 
DOT System -- The "Designated Order Turnaround" System was launched by the New York Stock Exchange in March 1976, to offer automatic, high-speed order processing.
A faster version, the SuperDot, was launched in 1984.
Used by program traders and others to zip orders into the exchange, SuperDot handles about 80% of all orders entered at the exchange. 
Futures Contracts -- Obligations to buy (for those who have purchased a contract) or deliver (for those who sold one) a quantity of the underlying commodity or financial instrument at the agreed-upon price by a certain date.
Most contracts are simply nullified by an opposite trade before they come due. 
Indexing -- Many investors, mainly institutions, follow an investment strategy of buying and holding a mix of stocks to match the performance of a broad stock-market barometer such as the S&P 500.
Many institutional index funds are active program traders, swapping their stocks for futures when profitable to do so. 
Program trading -- A wide range of computer-assisted portfolio trading strategies involving the simultaneous purchase or sale of 15 or more stocks. 
Quant -- Generally, any Wall Street analyst who employs quantitive research techniques.
The newest breed, also called "rocket scientists" because of their backgrounds in physics and mathematics, devise the complex hedging and trading strategies that are popularly known as program trading. 
Stock-index arbitrage -- Buying or selling baskets of stocks while at the same time executing offsetting trades in stock-index futures or options.
Traders profit by trying to capture fleeting price discrepancies between stocks and the index futures or options.
If stocks are temporarily "cheaper" than futures, for example, an arbitrager will buy stocks and sell futures. 
Stock-index futures -- Contracts to buy or sell the cash value of a stock index by a certain date.
The cash value is determined by multiplying the index number by a specified amount.
The most common program-trading vehicles are futures contracts on Standard & poor's 500-stock index (traded on the Chicago Mercantile Exchange); the Major Market Index, a 20-stock index that mimics the Dow Jones Industrial Average (traded on the chicago Board of Trade); and the S&P 100 options (traded on the Chicago Board Options Exchange, and based on 100 stocks selected from the S&P 500). 
Stock-index options -- Options give holders the right, but not the obligation, to buy (a call) or sell (a put) a specified amount of an underlying investment by a certin date at a preset price, known as the strike price.
For stock indexes, the underlying investment may be a stock-index futures contract or the cash value of a stock index.
For example, there are options on the S&P 500 futures contract and on the S&P 100 index. 
Uptick -- An expression signifying that a transaction in a listed security occurred at a higher price than the previous transaction in that security. 
(See related story: "Balance of Power: Program-Trading War Masks Deeper Battle For Market Supremacy --- `Old Guard' Seizes Offensive, But Rivals Are Bigger, Richer and High-Tech --- Civil War at the Big Board" -- WSJ Nov. 2, 1989) 
New York financier Saul Steinberg sought federal permission to buy more than 15% of United Airlines' parent, UAL Corp., saying he might seek control of the nation's second-largest airline. 
Although takeover experts said they doubted Mr. Steinberg will make a bid by himself, the application by his Reliance Group Holdings Inc. could signal his interest in helping revive a failed labor-management bid. 
Such an application for federal antitrust clearance is necessary for any investor that might seek control.
But some investors have used such filings to boost the value of their stock holdings, which -- without buying more stock -- they then sold. 
Takeover stock traders were puzzled by the Reliance filing and cautioned that it doesn't mean Mr. Steinberg will definitely seek control. "Maybe he just wants to make something happen," said one takeover expert. 
One investment banker said Mr. Steinberg may be trying to position himself as a friendly investor who could help UAL Chairman Stephen Wolf revive a failed labor-management bid.
Mr. Steinberg, he suggested, could replace British Airways PLC, which has withdrawn from the buy-out group. 
Reliance had already bought and sold UAL stock at a big profit without making an antitrust filing before the collapse Oct. 13 of the $6.79 billion, $300-a-share labor-management buy-out.
Reliance acquired a 7% UAL stake early this year at an average cost of $110 a share, and reduced its stake to 4.7% after UAL accepted the bid at prices higher than $282 a share. 
Market sources said Reliance has already sold its entire UAL stake, and thus wouldn't have any reason to file the application simply to boost the value of its stock.
But the exact amount of Reliance's current holding hasn't been formally disclosed. 
The filing adds a new twist to market speculation that Coniston Partners, a New York money manager, has bought more than 5% of UAL stock and may challenge the UAL board's decision last week to remain independent.
Speculation about Coniston has caused the stock to rebound from a low of $145. 
UAL's announcement came after the market closed yesterday.
In composite New York Stock Exchange trading, the shares closed at $177, up $1.50.
UAL wouldn't elaborate on a statement that it had been notified of the filing by Reliance.
Reliance confirmed the filing but wouldn't elaborate. 
Some takeover experts were skeptical, saying it was possible that Mr. Steinberg made the filing only to help boost the value of any remaining Reliance stake in UAL. 
Mr. Steinberg is thought to be on friendly terms with UAL's Mr. Wolf.
The investor was instrumental in tapping Mr. Wolf to run the air cargo unit of Tiger International Inc. Mr. Wolf's success in that job helped him land the top job with UAL in December 1987. 
But any potential acquirer must attempt to reach some kind of accord with the company's employees, primarily its pilots and the powerful machinists' union, which has opposed a takeover. 
A.L. Williams Corp. was merged into Primerica Corp., New York, after a special meeting of Williams shareholders cleared the transaction, the companies said. 
Primerica, which had owned nearly 70% of Williams, will pay about 16.7 million shares, currently valued at almost $472 million, for the rest of Williams.
The financial-services company will pay 0.82 share for each Williams share. 
Williams shares, which were to be delisted from the New York Stock Exchange after the close of composite trading yesterday, closed at $23.25, off 12.5 cents.
Primerica closed at $28.25, down 50 cents. 
Williams, Duluth, Ga., is an insurance and financial-services holding company.
Its subsidiaries' services are marketed by closely held A.L. Williams & Associates.
Primerica, as expected, also acquired certain assets of the agency and assumed certain of its liabilities.
Terms weren't disclosed. 
Intelogic Trace Inc., San Antonio, Texas, said it bought 2.7 million shares, or about 18%, of its common stock from an unaffiliated shareholder for $3.625 a share, or $9.9 million. 
The move boosts Intelogic Chairman Asher Edelman's stake to 20% from 16.2% and may help prevent Martin Ackerman from making a run at the computer-services concern.
Mr. Ackerman already is seeking to oust Mr. Edelman as chairman of Datapoint Corp., an Intelogic affiliate. 
The action followed by one day an Intelogic announcement that it will retain an investment banker to explore alternatives "to maximize shareholder value," including the possible sale of the company. 
In New York Stock Exchange composite trading yesterday, Intelogic shares rose 37.5 cents to close at $2.75. 
Mr. Edelman declined to specify what prompted the recent moves, saying they are meant only to benefit shareholders when "the company is on a roll." He added, "This has nothing to do with Marty Ackerman and it is not designed, particularly, to take the company private." 
But Mr. Ackerman said the buy-back, and the above-market price paid, prove that Mr. Edelman is running scared. 
Dow Jones & Co. said it extended its $18-a-share offer for Telerate Inc. common stock until 5 p.m. EST Nov. 9. 
The offer, valued at about $576 million for the 33% of Telerate that Dow Jones doesn't already own, had been set to expire Nov. 6. 
Dow Jones, which owns about 64 million of Telerate's 95 million common shares outstanding, said that about 24,000 shares have been tendered under its offer. 
Telerate's two independent directors have rejected the offer as inadequate.
In composite trading on the New York Stock Exchange, Telerate shares closed at $19.50, up 12.5 cents. 
Telerate provides an electronic financial information network.
Dow Jones publishes The Wall Street Journal, Barron's magazine, and community newspapers and operates financial news services and computer data bases. 
Rockwell International Corp. reported flat operating earnings for the fourth quarter ended Sept. 30. 
The aerospace, automotive supply, electronics and printing-press concern also indicated that the first half of fiscal 1990 could be rough. 
In an interview, Donald Beall, chairman, said first-half profit certainly would trail the past year's, primarily because of weakness in the heavy-truck and passenger-car markets.
Still, he added, if the industrial sector remains relatively stable, Rockwell should be able to recover in the second half and about equal fiscal 1989's operating profit of $630.9 million. 
For fiscal 1989's fourth quarter, Rockwell's net income totaled $126.1 million, or 50 cents a share.
That compares with operating earnings of $132.9 million, or 49 cents a share, the year earlier. 
The prior-year period includes a one-time favorable tax adjustment on the B-1B bomber program and another gain from sale of the industrial sewing-machine business, which made net $185.9 million, or 70 cents a share.
Sales rose 4% to $3.28 billion from $3.16 billion. 
Mr. Beall said that he was generally pleased with the latest numbers and cited a particularly strong showing by the company's electronics segment. 
Overall, pretax electronics earnings soared 12% to $107.9 million from $96.4 million.
All four areas had higher revenue for the three months ended Sept. 30. 
For the year, electronics emerged as Rockwell's largest sector in terms of sales and earnings, muscling out aerospace for the first time. 
The graphics business, which also was singled out by the chairman as a positive, saw its operating earnings for the quarter jump 79% to $42.1 million from $23.5 million.
For the year, bolstered by the introduction of the Colorliner newspaper-printing press, graphics earnings almost doubled. 
Aerospace earnings sagged 37% for the quarter and 15% for the year, largely due to lower B-1B program profit; the last of the bombers rolled out in April 1988.
That was partially offset by the resumption of space shuttle flights and increased demand for expendable launch-vehicle engines. 
The company also took hits in the fourth quarters of 1989 and 1988 on a fixed-price weapons-modernization development program -- probably the C-130 gunship, according to analysts. 
For fiscal 1989, the company posted net of $734.9 million, or $2.87 a share, down from $811.9 million, or $3.04 a share, in fiscal 1988.
Excluding one-time additions to profit in each year, earnings per share were $2.47, up 7.4% from $2.30 in fiscal 1988.
Sales for the year rose 5% to $12.52 billion from $11.95 billion in fiscal 1988. 
Dell Computer Corp. said it cut prices on several of its personal computer lines by 5% to 17%. 
The Austin, Texas-based company, which specializes in the direct sale of personal computers and accessories, said its price cuts include a $100 reduction on its System 210 computer with 512 kilobytes of memory, a 40-megabyte hard disk and a color monitor.
That package now sells for about $2,099.
A computer using the more-advanced Intel Corp. 386 microprocessor, with four megabytes of memory and a 100-megabyte hard disk now sells for $5,699, down from $6,799. 
Personal computer prices for models using the Intel 286 and 386 microprocessors, which the Dell models use, generally have been coming down as chip prices have fallen. 
World sugar futures prices soared on rumors that Brazil, a major grower and exporter, might not ship sugar this crop year and next. 
Prices also were boosted by another rumor that Mexico, usually a large producer and exporter, might have to buy a large quantity of sugar. 
Although traders rushed to buy futures contracts, many remained skeptical about the Brazilian development, which couldn't be confirmed, analysts said. 
The March and May contracts rose to fresh life-of-contract highs of 14.54 cents and 14.28 cents at their best levels of the day.
The March delivery, which has no limits, settled at 14.53 cents, up 0.56 cent a pound.
The May contract, which also is without restraints, ended with a gain of 0.54 cent to 14.26 cents.
The July delivery rose its daily permissible limit of 0.50 cent a pound to 14.00 cents, while other contract months showed near-limit advances. 
According to reports carried by various news services, the Brazilian government told its sugar producers that they won't be allowed to export sugar during the current 1989-90 season, which began May 1, and the 1990-91 season so that it can be used to produce alcohol for automobile fuel. 
One analyst, Arthur Stevenson, of Prudential-Bache Securities, New York, estimated that 65% or more of Brazil's newly made automobiles run on alcohol and can't use gasoline. "This is a demand that must be met, regardless of the price of oil," said Mr. Stevenson. 
Brazil is the third-largest producer and the fifth-largest exporter of sugar in the world.
A shift to producing more alcohol and less sugar had been expected, but the latest news, if true, indicates a more drastic shift than had been anticipated. 
During the current crop year, Brazil was expected to produce 6.9 million tons of sugar, a drop from 8.1 million tons in 1988-89.
Its 1989-90 exports were expected to total 645,000 tons in contrast to shipments of 1.5 million tons in 
"It is these 645,000 tons that are in question for this crop year," explained Judith Ganes, analyst for Shearson Lehman Hutton, New York. "Producers were granted the right earlier this year to ship sugar and the export licenses were expected to have begun to be issued" yesterday. 
As a result, Ms. Ganes said, it is believed that little or no sugar from the 1989-90 crop has been shipped yet, even though the crop year is six months old.
More than a half of all sugar produced in Brazil goes for alcohol production, according to Ms. Ganes.
Also, there has been a switch in the past decade to planting of orange trees in areas that were previously used for cane, and this change is being felt now, she said. 
Most important, Ms. Ganes noted, "Brazilian officials said that no decision has as yet been made on the suspension of exports." 
Thomas Oxnard, sugar analyst for PaineWebber in Hackensack, N.J., said: "I am highly skeptical that Brazil will curtail sugar exports, particularly with the price of sugar at over 14 cents a pound." 
Above all, Mr. Oxnard noted, the situation is extremely confused. "Professional sugar people here who have strong contacts with the Brazilian sugar industry have been unable to confirm the reports or get enough information to clarify the situation," he said. "It's the type of nervous atmosphere in which a report can be put out, such as the one saying exports will be suspended, and no one can confirm it." 
Mr. Oxnard observed that the situation in Brazil is also very complicated.
On the one hand, Brazil started an ethanol program about 15 years ago to fuel a huge portion of its national fleet of cars and is now committed to this program. 
"It has to weigh, on the other hand, the relatively high price of sugar it can earn on the export market in making decisions as to whether to produce sugar or alcohol," Mr. Oxnard said. 
Mexico, which is normally a sugar exporter, has had production problems in the past two years, analysts said.
Last year, it had to buy sugar on the world market to meet export commitments, they noted.
This year it is expected to be a net importer and is said to be seeking to buy about 200,000 tons of sugar to meet internal needs, analysts said. 
In other commodity markets yesterday: 
ENERGY: Petroleum futures were generally higher with heating oil leading the way.
On the New York Mercantile Exchange, heating oil for December delivery increased 1.25 cents to settle at 60.36 cents a gallon.
Gasoline futures were mixed to unchanged.
But the strength in heating oil helped push up crude oil.
West Texas Intermediate crude for December delivery rose 13 cents a barrel to settle at $20.07.
The firmness in heating oil was attributed to colder weather in parts of the U.S. and to the latest weekly report by the American Petroleum Institute, which showed a decline in inventories of the fuel. 
GRAINS AND SOYBEANS: Prices closed mostly higher in relatively light trading as farmers continued to withhold their crops from the marketplace in the hope of higher prices to come.
Trading was muted in part because of the observance of All Saints' Day across much of Europe.
Continued export demand also supported prices.
As an indicator of the tight grain supply situation in the U.S., market analysts said that late Tuesday the Chinese government, which often buys U.S. grains in quantity, turned instead to Britain to buy 500,000 metric tons of wheat.
Traders said prices also were supported by widespread rumors that the Soviet Union is on the verge of receiving most favored nation status from the U.S.
That designation would, among other things, provide more generous credit terms under which the Soviets could purchase grain.
The Soviets are widely believed to need additional supplies, despite running up record one-month purchases of 310 million bushels of corn in October. 
COPPER: Futures prices rose, extending Tuesday's gains.
The December contract advanced 2.50 cents a pound to $1.1650.
Buying for the most part carried over from the previous session, and traders apparently ignored reports that a Chilean mine strike may have ended almost before it began, an analyst said.
According to news service reports, most workers at the Disputado mines owned by Exxon Corp. agreed to a new two-year wage contract that includes a 5% increase and other benefits.
However, some workers haven't yet accepted the new contract and are continuing negotiations, the analyst said.
Separately, Reuter reported that the Papua-New Guinea government urged its Parliament to extend a state of emergency in copper-rich Bougainville Island for two months.
The Bougainville copper mine has been inoperative since May 15 because of attacks by native landowners who want Bougainville to secede from Papua-New Guinea. 
The parent of Younkers, after failing to find a buyer for the chain of Midwestern department stores, said it will sell a stake in the chain to management and take other steps to reduce its investment in retailing. 
Equitable of Iowa Cos., Des Moines, had been seeking a buyer for the 36-store Younkers chain since June, when it announced its intention to free up capital to expand its insurance business.
But Equitable said it was unable to find a buyer willing to pay what it considers "fair value" for Younkers because of recent turmoil in the bond and stock markets and in retailing. 
Younkers rang up sales in 1988 of $313 million.
It operates stores mostly in Iowa and Nebraska. 
Younkers management is likely to buy a 10% to 20% interest in the chain in January, said Fred S. Hubbell, Equitable's president and chief executive officer.
He said Equitable hopes to eventually reduce its stake in Younkers to less than 50%. 
Tony Lama Co. said that Equus Investment II Limited Partnership has proposed changing the offer for the company to $13.65 in cash and stock from an all-cash transaction. 
Under terms of the new proposal, Equus, managed by Equus Capital Corp., Houston, would pay $12 cash and one new preferred share with a liquidation preference of $1.65 a share for each of Tony Lama's 2.1 million shares outstanding.
Previously, it offered $13.65 a share in cash, or $29 million. 
The El Paso, Texas, maker of Western boots and leather accessories said the preferred stock would accrue dividends at a 12% rate, but wouldn't be paid for the first two years.
The stock would be redeemed in five years, subject to terms of the surviving company's debt. 
Neither Equus nor Tony Lama gave a reason for the changed offer and Tony Lama couldn't be reached for comment.
However, Tony Lama said it would promptly submit the offer to a special committee of the company's board. 
Reuters Holdings PLC said Michael Reupke resigned as general manager to pursue unspecified interests, a move the news organization termed an "amicable separation." 
Mr. Reupke, 52 years old and a 27-year Reuters veteran, had been the information-services company's general manager for only six months.
His appointment to that post, which has senior administrative, staff and policy responsibilities, followed a several-year tenure as Reuters's editor in chief.
No successor was named, and Mr. Reupke's duties will be split among three other senior Reuters executives, the company said. 
In a telephone interview, Mr. Reupke said his departure was for "personal reasons," which he declined to specify. "There is no business reason for my departure," nor any disagreement over policy, he added.
He also rejected reports that his departure stemmed from disappointment the general manager's post hadn't also led to a board directorship at the London-based news organization. 
Mr. Reupke was one of three executives on Reuters's eight-person executive committee who didn't also serve on the company's board of directors. "If I were choosing the people of tomorrow, I would have chosen the people who are now on the board," he said. 
A Reuters spokesman said the departure reflects "no change in strategy or profits." Mark Shepperd, an analyst at UBS Phillips & Drew in London, said, "I suspect (the departure) will be fairly irrelevant for the company.
I would be very surprised if his departure signals any change in strategy or change in profit expectations." On London's Stock Exchange, Reuters shares rose five pence to 913 pence ($14.43).
In the U.S. over-the-counter market, American depositary shares for Reuters, each representing three shares in the London market, closed unchanged at $43.875. 
The senior of the three executives who will assume Mr. Reupke's duties is Nigel Judah, 58, finance director and a Reuters board director.
Peter Holland, 45, deputy general manager, becomes director of corporate affairs.
And Patrick Mannix, 46, international technical manager, becomes director of group quality programs. 
DD Acquisition Corp., a partnership of Unicorp Canada Corp. 's Kingsbridge Capital Group and Cara Operations Ltd., extended to Nov. 20 its $45-a-share offer for all Dunkin' Donuts Inc. shares outstanding. 
The offer, which was due to expire yesterday, is conditional on 50.1% of Dunkin' common shares, on a fully diluted basis, being tendered and on the withdrawal of the company's poison pill rights plan. 
DD Acquisition has launched a suit in a Delaware court seeking the withdrawal of Dunkin's poison pill rights and employee stock ownership plans, which it claims were put in place to deter bidders. 
DD Acquisition said 2.2 million shares, or about 38.5% of the shares outstanding, have been tendered under its offer.
The partners said they already hold 15% of all shares outstanding. 
Dunkin' has set Nov. 10 as the deadline for the receipt of any competing bids.
DD Acquisition said the extension is to allow this process to be completed.
Dunkin' is based in Randolph, Mass.
Cara, a food services chain operator and Unicorp, a holding company, are based in Toronto. 
Savin Corp. reported a third-quarter net loss of $35.2 million, or 31 cents a share, compared with year-earlier profit of $3.8 million, or one cent a share. 
A spokesman for the Stamford, Conn.based company said operations had a loss of $5.5 million for the quarter; in addition, the loss was magnified by nonrecurring charges totaling $23.5 million and $8.2 million in asset-valuation adjustments that he described as "unusual." The charges were partly offset by a $2 million gain on the sale of investments of two joint ventures, he said. 
Revenue declined 8% to $85.7 million, from $93.3 million a year earlier.
Savin cited "a general softening in the demand for office products in the market segments in which Savin competes." 
Hadson Corp. said it expects to report a third-quarter net loss of $17 million to $19 million because of special reserves and continued low natural-gas prices. 
The Oklahoma City energy and defense concern said it will record a $7.5 million reserve for its defense group, including a $4.7 million charge related to problems under a fixed-price development contract and $2.8 million in overhead costs that won't be reimbursed. 
In addition, Hadson said it will write off about $3.5 million in costs related to international exploration leases where exploration efforts have been unsuccessful. 
The company also cited interest costs and amortization of goodwill as factors in the loss. 
A year earlier, net income was $2.1 million, or six cents a share, on revenue of $169.9 million. 
A lack of enthusiasm with the latest economic data hampered the stock market's bid to extend Tuesday's sharp gains, as prices closed slightly higher in sluggish trading. 
While renewed optimism about the outlook for takeover activity boosted several so-called deal stocks, traders said profit-taking weighed on the market, with blue-chips bearing the brunt of the selling. 
The Dow Jones Industrial Average, which had jumped 41.60 points on Tuesday, drifted on either side of its previous close and finished with a gain of just 0.82 at 2645.90. 
Standard & Poor's 500-Stock Index added 0.84 to 341.20; the rise was equivalent to a gain of about six points in the industrial average.
The Dow Jones Equity Market Index gained 0.99 to 319.75 and the New York Stock Exchange Composite Index went up 0.60 to 188.84. 
Advancing stocks led decliners on the New York Stock Exchange by 847 to 644.
Big Board volume amounted to 154,240,000 shares, down from 176.1 million Tuesday. 
The October survey of corporate purchasing managers, as expected, provided evidence that economic growth remains subdued.
An index of economic activity drawn from the survey stood last month at 47.6%; a reading above 50% would have indicated that the manufacturing sector was improving. 
But with the index proving somewhat better than expected and the widely anticipated report on October employment scheduled to arrive tomorrow, stock prices firmed only modestly in response to the report and then faltered. 
"This market's still going through its pains," said Philip Puccio, head of equity trading at Prudential-Bache Securities. "The psychology is still: `We want (stocks) up, but if they don't carry we're going to sell them. '" 
Uncertainty about the prospects for further action to curtail stock-index arbitrage, a form of program trading blamed for recent volatility in the market, also contributed to its lack of direction, Mr. Puccio said. 
Arbitrage-related trading during the session was confined largely to a round of buy programs near the close, which helped offset the impact of profit-taking among blue chips. 
Trading is expected to remain subdued as the market awaits tomorrow's release of the jobs data with the hope that it will point toward a decline in interest rates. "I sense that some people are reluctant to stick their necks out in any aggressive way until after the figures come out," said Richard Eakle, president of Eakle Associates, Fair Haven, 
Campbell Soup jumped 3 3/8 to 47 1/8 as the resignation of R. Gordon McGovern as president and chief executive officer sparked a revival of rumors that the company could become a takeover target.
Prudential-Bache Securities boosted the stock's short-term investment rating in response to the departure; analyst John McMillin said he believes the company will turn to new management "that's more financially oriented." 
Other rumored takeover and restructuring candidates to attract buyers included Woolworth, which went up 1 3/4 to 59 1/2; Avon Products, up 1 3/4 to 29 1/4; Paramount Communications, up 2 to 57 7/8, and Ferro, up 2 5/8 to 28 3/4. 
Upjohn, a rumored target within the drug industry, advanced 7/8 to 38 7/8.
The company said it plans a fourth-quarter charge, which it didn't specify, for an early-retirement program. 
AMR climbed 1 3/4 to 73 1/8 amid rumors that New York developer Donald Trump was seeking financing to mount a new, lower offer for the parent company of American Airlines.
Mr. Trump withdrew a $120-a-share bid last month. 
UAL rose 1 1/2 to 177.
Drexel Burnham Lambert analyst Michael Derchin said he sees a 70% chance that the parent of United Airlines, the target of a failed $300-a-share offer from a labor-management group, will be acquired or restructured within six months. 
Georgia Gulf added 1 3/4 to 51 1/4 after NL Industries, controlled by Dallas investor Harold Simmons, offered to acquire the stock it doesn't already own for $50 a share.
NL, which closed unchanged at 22 3/4, has a stake of just under 10%. 
Great Northern Nekoosa, which surged 20 1/8 Tuesday after Georgia-Pacific launched a $3.18 billion offer for the company, dropped 1 3/8 to 61 1/2 in Big Board composite trading of 5.1 million shares.
Georgia-Pacific, which went down 2 1/2 Tuesday, lost another 1/2 to 50 3/8. 
Other paper and forest-products stocks closed mixed.
Mead rose 3/4 to 39 1/2, Federal Paper Board added 1/2 to 24 3/8 and Scott Paper gained 1/2 to 48 3/8, while International Paper> fell 7/8 to 48 7/8,>< Champion In< ternational lost 3/8 to 31 1/2 and Louisiana-Pacific dropped 1/8 to 40 1/4. 
Texaco rose 3/4 to 53 3/8 as 4.4 million shares changed hands.
Most of the volume came from trades designed to capture the stock's next dividend; Texaco has a yield of 5.6% and goes ex-dividend today. 
Santa Fe Pacific dropped 1 1/8 to 17 3/4.
The company's proposal to sell a 20% stake in its real-estate unit for around $400 million has caused analysts to consider whether to cut their estimates of Santa Fe's asset value. 
GenCorp tumbled 2 to 14.
The company forecast that fourth-quarter income from continuing operations would be "significantly" lower than a year earlier. 
Allergan went up 1/2 to 19 3/8.
The Food and Drug Administration allowed the company to begin marketing a new lens for use in cataract patients. 
The American Stock Exchange Market Value Index gained 1.56 to 372.14.
Volume totaled 11,390,000 shares. 
Old Spaghetti Warehouse rose 1 to 16 1/8.
Its net income for the September quarter rose about 41% from a year ago. 
Freeport-McMoRan Inc. said it will convert its Freeport-McMoRan Energy Partners Ltd. partnership into a publicly traded company through the exchange of units of the partnership for common shares.
The company said the restructuring isn't expected to have any impact, adverse or otherwise, on its financial results. 
Freeport-McMoRan, a New Orleans-based diversified energy conglomerate, said the partnership will exchange its assets for common shares of a yet-to-be-formed entity.
Freeport-McMoRan Energy Partners will be liquidated and shares of the new company distributed to the partnership's unitholders. 
Unitholders will receive two additional 55 cents-a-unit distribution payments before the trust is liquidated in early 1990, the company said.
It is expected that common shares equal to the number of units outstanding -- about 108 million on Sept. 30 -- will be issued during the first quarter of 1990.
Freeport-McMoRan, the parent company, holds roughly 80% of the units outstanding. 
Nissan Motor Co., Japan's second-largest car maker, announced Wednesday that the parent concern's pretax earnings in the first half ended last Sept. 30 rose 14% to 88.32 billion yen ($618.1 million) from 77.6 billion yen a year earlier.
Nissan cited strong domestic sales against the backdrop of continuous economic expansion. 
Profit surged 42% to 40.21 billion yen, or 16.09 yen a share, from 28.36 billion yen, or 11.72 yen a share. 
Sales totaled 1.916 trillion yen, climbing 17% from 1.637 trillion yen in the year-earlier period. 
Nissan scheduled a seven-yen interim dividend payment, unchanged. 
Atsushi Muramatsu, executive vice president and chief financial officer of Nissan, said, "The company has experienced a remarkable turnaround in terms of profitability since the fiscal year ending March 1987, when the sharp and rapid appreciation of the yen caused many difficulties. 
"It can be said that the trend of financial improvement has been firmly set," he added. 
Heritage Media Corp., New York, said it offered to buy the shares of POP Radio Corp. it doesn't already own in a stock swap. 
Heritage, which owns 51% of POP's 3.6 million shares outstanding, said it will exchange one share of a new preferred stock for each POP common share it doesn't already own.
Depending upon how many warrants and options are exercised prior to completion of the transaction, Heritage would issue between 1.8 million and 2.35 million preferred shares, a Heritage spokesman estimated.
In national over-the-counter trading yesterday, POP plunged $4 to $14.75. 
The preferred stock, which would have a dividend rate of $1.76 a year, would be convertible into Heritage common at a rate of four common shares for each preferred.
New York-based POP Radio provides, through a national, in-store network, a customized music, information and advertising service which simulates live radio.
Heritage owns and operates television and radio stations and in-store advertising and promotion programs. 
GenCorp Inc., hurt by a plant accident and other unexpected costs, said it expects to report that fiscal fourth-quarter profit from continuing operations will be significantly below last year's $25 million. 
The Fairlawn, Ohio-based company also said that full-year profit from continuing operations will be far below last year's $148 million. 
Last year's figures include a one-time loss of $12 million for restructuring and unusual items. 
But the automotive parts and aerospace concern expects that net for the year ending Nov. 30 will exceed last fiscal year's net of $70 million, or $2.19 a share, primarily because of $200 million in gains from sales of discontinued operations. 
Harry Millis, an analyst at McDonald & Co. in Cleveland, said GenCorp's unanticipated losses come largely from an accident at a government-owned assembly plant in Kansas, run by a private subcontractor, that makes cluster bombs for GenCorp's Aerojet Ordnance business. 
.START 
Transamerica Corp., San Francisco, said third-quarter profit was essentially flat despite a large one-time gain a year earlier. 
The insurance and financial services concern said profit for the quarter rose 1.1% to $93.9 million, or $1.19 a share, compared with $92.9 million, or $1.18 a share, the year earlier.
The results reflected a 24% gain in income from its finance businesses, and a 15% slide in income from insurance operations. 
Transamerica said third-quarter investment gains were $10.2 million, compared with $6.4 million the year earlier.
It said insurance profit reflected a $6 million loss from Hurricane Hugo.
It also estimated that losses from the Oct. 17 earthquake in California would be no more than $6 million, and would be included in fourth-quarter results. 
RMS International Inc., Hasbrouk Heights, N.J., facing a cash-flow squeeze, said it is seeking other financing sources and waivers from debenture holders. 
The company said that because of softening sales it isn't in compliance with requirements that it maintain $3 million in working capital.
RMS distributes electronic devices and produces power supplies and plastic literature displays. 
RMS said it had a loss of $158,666, or 10 cents a share, in the third quarter, compared with a year-earlier loss of $26,956, or two cents a share.
Sales rose to $3 million from $2.9 million. 
For the nine months, the company reported a net loss of $608,413, or 39 cents a share, compared with year-earlier net income of $967,809, or 62 cents a share.
Sales rose to $9.8 million from $8.9 million. 
Meridian National Corp. said it sold 750,000 shares of its common stock to the McAlpine family interests, for $1 million, or $1.35 a share.
The sale represents 10.2% of Meridian's shares outstanding. 
The McAlpine family, which operates a number of multinational companies, including a London-based engineering and construction company, also lent to Meridian National $500,000.
That amount is convertible into shares of Meridian common stock at $2 a share during its one-year term.
The loan may be extended by the McAlpine group for an additional year with an increase in the conversion price to $2.50 a share. 
The sale of shares to the McAlpine family along with the recent sale of 750,000 shares of Meridian stock to Haden MacLellan Holding PLC of Surrey, England and a recent public offering have increased Meridian's net worth to $8.5 million, said William Feniger, chief executive officer of Toledo, Ohio-based Meridian. 
Ratners Group PLC, a fast-growing, acquisition-minded London-based jeweler, raised its price for Seattle-based specialty jeweler Weisfield's Inc. to $57.50 a share, or $62.1 million, from $50 a share, or $55 million, after another concern said it would be prepared to outbid Ratners's initial offer.
The other concern wasn't identified. 
Ratners's chairman, Gerald Ratner, said the deal remains of "substantial benefit to Ratners." In London at mid-afternoon yesterday, Ratners's shares were up 2 pence (1.26 cents), at 260 pence ($1.64). 
The sweetened offer has acceptances from more than 50% of Weisfield's shareholders, and it is scheduled for completion by Dec. 10. 
The acquisition of 87-store Weisfield's raises Ratners's U.S. presence to 450 stores.
About 30% of Ratners's profit already is derived from the U.S. 
Carnival Cruise Lines Inc. said potential problems with the construction of two big cruise ships from Finland have been averted. 
Last week, Miami-based Carnival disclosed that Waertsilae Marine Industries, the Finnish shipyard that is building Carnival's new cruise ships, planned to file for bankruptcy. 
Yesterday, Carnival said a new company has been formed in Finland that will carry on Waertsilae's shipbuilding operations.
Carnival said it will be an 11% shareholder in the new company. 
Carnival said the Fantasy, a 2,050-passenger ship that was slated to be delivered this month, will be delivered in January. 
A second ship is now expected to be delivered late next year or early in 1991.
Carnival had expected that ship to be delivered next fall.
A planned third ship still may be built in the Finnish shipyard, or may be built elsewhere, Carnival said. 
Valley Federal Savings & Loan Association took an $89.9 million charge as it reported a third-quarter loss of $70.7 million, or $12.09 a share. 
The Van Nuys, Calif., thrift had net income of $132,000, or three cents a share, a year ago. 
The bulk of the pretax charge is a $62 million write-off of capitalized servicing at the mobile home financing subsidiary, which the company said had been a big drain on earnings.
The company said the one-time provision would substantially eliminate all future losses at the unit.
Valley Federal also added $18 million to realestate loan reserves and eliminated $9.9 million of good will. 
The thrift said that "after these charges and assuming no dramatic fluctuation in interest rates, the association expects to achieve near record earnings in 1990." 
Valley Federal is currently being examined by regulators.
New loans continue to slow; they were $6.6 million in the quarter compared with $361.8 million a year ago.
The thrift has assets of $3.2 billion. 
First of America Bank Corp. said it completed its acquisition of Midwest Financial Group Inc. for about $250 million.
First of America, which now has 45 banks and $12.5 billion in assets, announced an agreement to acquire the Peoria, Ill., bank holding company in January. 
Midwest Financial has $2.3 billion in assets and eight banks.
The Midwest Financial subsidiary banks will continue to operate under their current names until early 1990, when each will adopt the First of America name. 
Kalamazoo, Mich.-based First of America said it will eliminate the 13 management positions of the former Midwest Financial parent company.
First of America said some of the managers will take other jobs with First of America.
But it said that severance payments to those executives not staying with the company will reduce First of America's operating results for 1989 by $3 million to $4 million, or 15 cents to 20 cents a share. 
Coleco Industries Inc., a once high-flying toy maker whose stock peaked at $65 a share in the early 1980s, filed a Chapter 11 reorganization plan that provides just 1.125 cents a share for common stockholders. 
Under the plan, unsecured creditors, who are owed about $430 million, would receive about $92 million, or 21 cents for each dollar they are owed.
In addition, they will receive stock in the reorganized company, which will be named Ranger Industries Inc.
After these payments, about $225,000 will be available for the 20 million common shares outstanding. 
The Avon, Conn., company's stock hit a high in 1983 after it unveiled its Adam home computer, but the product was plagued with glitches and the company's fortunes plunged.
But Coleco bounced back with the introduction of the Cabbage Patch dolls, whose sales hit $600 million in 1985.
But as the craze died, Coleco failed to come up with another winner and filed for bankruptcy-law protection in July 1988. 
The plan was filed jointly with unsecured creditors in federal bankruptcy court in New York and must be approved by the court. 
ORTEGA ENDED a truce with the Contras and said elections were threatened. 
The Nicaraguan president, citing attacks by the U.S.-backed rebels, suspended a 19-month-old cease-fire and accused Bush of "promoting death." While he reaffirmed support for the country's Feb. 25 elections, Ortega indicated that renewed U.S. military aid to the Contras could thwart the balloting.
He said U.S. assistance should be used to demobilize the rebels.
A White House spokesman condemned the truce suspension as "deplorable" but brushed off talk of renewing military funding for the insurgents. 
The Contra military command, in a statement from Honduras, said Sandinista troops had launched a major offensive against the rebel forces. 
East German leader Krenz called the protests in his country a "good sign," saying that many of those marching for democratic freedoms were showing support for "the renovation for socialism." The Communist Party chief, in Moscow for talks with Soviet officials, also said East Germany would follow Gorbachev's restructuring plans. 
Thousands of East Germans fled to Czechoslovakia after the East Berlin government lifted travel restrictions.
The ban on cross-border movement was imposed last month after a massive exodus of emigres to West Germany.
Also, a Communist official for the first time said the future of the Berlin Wall could be open to discussion. 
Health officials plan to extend a moratorium on federal funding of research involving fetal-tissue transplants.
The assistant HHS secretary said the ban "should be continued indefinitely." While researchers believe such transplants could help treat diseases like Alzheimer's, anti-abortionists oppose the research. 
Rep. Dingell of Michigan plans to unveil today a proposal that would break with Bush's clean-air bill on the issue of emissions that lead to acid rain.
The Democrat's proposal is described by government sources and lobbyists as significantly weaker than the president's plan to cut utility emissions. 
House-Senate conferees approved major portions of a package for more than $500 million in economic aid for Poland.
The plan relies heavily on $240 million in credit and loan guarantees in fiscal 1990 in hopes of stimulating future trade and investment. 
South Africa accused armed Namibian nationalist guerrillas of crossing from bases in neighboring Angola, violating U.N.-supervised peace plans for the territory's independence from Pretoria.
South African troops were placed on alert.
Guerrilla leaders said Pretoria was attempting to sabotage next week's elections in Namibia. 
Gunmen in Lebanon assassinated a Saudi Arabian Embassy employee, and the pro-Iranian Islamic Jihad took responsibility for the slaying to avenge the beheading of 16 terrorists by Riyadh's government in September.
Also in Beirut, a Moslem group vowed to kill Americans if the U.S. implements a policy to seize suspects abroad. 
Nixon concluded five days of private talks with Chinese leaders in Beijing, but apparently failed to ease strains in Sino-U.S. ties caused by China's crackdown against pro-democracy protesters in June.
Beijing's rulers complained to the former president about U.S. "interference" in China's domestic affairs. 
Mexico's President Salinas said the country's recession had ended and the economy was growing again.
In his first state of the nation address, Salinas pledged to continue his program of modernization and warned opposition politicians that impeding progress could cost them popular support. 
Pakistan's Bhutto defeated the first no-confidence motion in the nation's 42-year history, surviving the vote that could have brought down her 11-month-old government.
The prime minister's opponents claimed the balloting, 12 votes short of a majority in Islamabad's 237-seat assembly, was rigged. 
The White House said the shipboard meetings next month between Bush and Soviet leader Gorbachev will take place in the waters off Malta.
The location was disclosed as the U.S. began planning the issues to be discussed at the Dec. 2-3 tete-a-tete. 
Bush unveiled a package of trade initiatives to help establish "economic alternatives to drug trafficking" in the Andean nations of South America.
The president's plan includes a commitment to help negotiate a new international coffee agreement. 
Pan Am has subpoenaed several government agencies, including the CIA and FBI, to determine whether they were warned that a bomb had been planted aboard a jet that exploded over Scotland last December, killing 270 people.
The airline is attempting to show that Israel and West Germany warned the U.S. about the impending attack. 
Died: James A. Attwood, 62, retired chairman and president of Mutual Life Insurance Co. of New York, Tuesday, in New York City, of an acute anemic condition. 
Sony Corp. completed its tender offer for Columbia Pictures Entertainment Inc., with Columbia shareholders tendering 99.3% of all common shares outstanding by the Tuesday deadline. 
Sony Columbia Acquisition Corp., formed for the Columbia deal, will formally take ownership of the movie studio later this month, a spokesman said.
Sony is paying $27 a share, or $3.55 billion, cash and is assuming $1.4 billion of long-term debt. 
Still unresolved is Sony's effort to hire producers Jon Peters and Peter Guber to run the studio.
Sony's planned acquisition of Guber/Peters Entertainment Co. for $200 million is scheduled to close Monday.
Guber/Peters has been locked in litigation with Warner Communications Inc. in an attempt to get out of an exclusive production contract with Warner.
Both sides are in talks to settle the dispute. 
Xerox Corp. has told employees in its Crum & Forster personal insurance operations that it is laying off about 300 people, or 25% of the staff. 
A spokeswoman for Crum & Forster said employees were told early this week that numerous staff functions for the personal insurance lines were going to be centralized as a cost-cutting move. 
She said the move would result in a after-tax charge of less than $4 million to be spread over the next three quarters.
By comparison, for the first nine months, Xerox earned $492 million, or $4.55 a share, on revenue of $12.97 billion. 
Earnings at Xerox's financial-services operations actually rose slightly, but that was largely because capital gains at Crum & Forster offset Hurricane Hugo payments and the reserves set up to cover future payments. 
Property/casualty insurance has been a tough business in recent quarters, as pricing has been cutthroat and natural disasters such as Hurricane Hugo and the California earthquake have resulted in huge payments. 
Komatsu Ltd., a large integrated maker of construction machinery, posted a 32% unconsolidated gain in first-half pretax profit.
For the period ended Sept.30, it earned 16.68 billion yen, (US$116.7 million) up from 12.68 billion yen the year before. 
Sales rose 11% to 292.32 billion yen from 263.07 billion yen.
Net income surged 31% to 7.63 billion yen from 5.82 billion yen.
Per-share net rose to 7.84 yen from 6.53 yen. 
Brisk domestic demand due to increasing capital investment pushed up sales sharply in construction and industrial machinery divisions. 
Domestic sales of construction machinery, such as power shovels and bulldozers rose to 142.84 billion yen from 126.15 billion yen.
Demand from Europe and Southeast Asia also grew, but due to increasing production at local plants, overseas sales edged down 2.8%. 
Komatsu predicted that for the fiscal year ending March 31 sales will climb to 600 billion yen from 566.54 billion yen; pretax profit was forecast at 35 billion yen, up from 28.53 billion yen in fiscal 1989.
Net is expected to rise to 17 billion yen from 12.82 billion yen a year earlier. 
ECONOMIC GROWTH APPEARS to be leveling off, latest reports suggest.
Factory orders and construction outlays were largely flat in September, while purchasing agents said manufacturing shrank further in October.
Still, many economists aren't predicting a recession anytime soon. 
The Fed is coming under pressure to cut short-term interest rates due to the apparent slowing of the economy.
But it isn't clear yet whether the central bank will make such a move. 
Campbell Soup forced out its president and chief executive, R. Gordon McGovern, the strongest indication yet that the Dorrance family plans to take charge of reshaping the troubled food company.
Campbell's stock rose $3.375, to $47.125, in reaction. 
The Chicago Merc plans an additional "circuit breaker" to stem sharp drops in the market.
Also, Big Board Chairman Phelan said he would support SEC halts of program trading during market crises but not any revival of a "collar" on trading. 
Georgia Gulf received a new takeover bid from investor Harold Simmons and NL Industries of $50 a share, or about $1.1 billion.
The offer, which follows a $55-a-share bid that was rejected in September, steps up pressure on the chemicals concern. 
The minimum-wage bill worked out by Congress and Bush won easy approval in the House.
The compromise plan, which boosts the minimum wage for the first time since 1981, is expected to clear the Senate soon. 
Steinberg sought clearance to buy more than 15% of United Air's parent, saying he may seek control.
Takeover experts said they doubted the financier would make a bid by himself. 
An airline buy-out bill was approved by the House.
The measure would make it easier for the Transportation Department to block leveraged buy-outs in the industry. 
USX was cited by OSHA for several health and safety violations at two Pennsylvania plants and may face a record fine of $7.3 million. 
Random House Chairman Robert Bernstein said he is resigning from the publishing house he has run for 23 years.
A successor wasn't named. 
Cray Research indicated that the survival of a spinoff company, which is developing a new supercomputer, depends heavily on its chairman and chief designer, Seymour Cray. 
Light trucks and vans will face the same safety requirements as automobiles under new proposals by the Transportation Department. 
The Treasury plans to sell $30 billion in notes and bonds next week but will delay the auction unless Congress quickly raises the debt ceiling. 
U.S. farmers' net income rose to a record $59.9 billion last year despite one of the worst droughts ever. 
Two antitrust agencies may face further cutbacks because of a complicated new funding device, some Democrats in Congress are warning. 
Markets -- 
Stocks: Volume 154,240,000 shares.
Dow Jones industrials 2645.90, up 0.82; transportation 1206.26, up 1.25; utilities 220.45, up 1.26. 
Bonds: Shearson Lehman Hutton Treasury index 3436.58, up 
Commodities: Dow Jones futures index 129.91, up 0.28; spot index 131.01, up 1.17. 
Dollar: 143.80 yen, up 0.95; 1.8500 marks, up 0.0085. 
Junk-bond markdowns, an ongoing Securities and Exchange Commission investigation, a Drexel Burnham Lambert connection, a fizzled buy-out rumor. 
All this has cast a pall over Columbia Savings & Loan Association and its high-rolling 43-year-old chairman, Thomas Spiegel, who built the $12.7 billion Beverly Hills, Calif., thrift with high-yield junk bonds.
Bears have targeted Columbia's stock because of the thrift's exposure to the shaky junk market.
And some investors fault Mr. Spiegel's life style; he earns millions of dollars a year and flies around in Columbia's jet planes. 
Columbia stock recently hit 4 1/8, after reaching 11 3/4 earlier this year on rumors that Mr. Spiegel would take the thrift private.
Moreover, junk professionals think Columbia's huge third-quarter markdown of its junk portfolio to $4.4 billion wasn't enough, meaning another markdown could be coming. 
But in recent days, Columbia has edged up, closing at 5 1/4, up 3/8, yesterday on revived speculation that the thrift might restructure.
Mr. Spiegel's fans say Columbia's Southern California branches are highly salable, and the thrift has $458 million of shareholders equity underlying its assets.
That's almost $10 of equity for each Columbia share, including convertible preferred shares, though more junk markdowns would reduce the cushion. 
Columbia has only about 10 million common shares in public hands.
The Spiegel family has 25% of the common and 75% of the votes.
Other big common holders are Carl Lindner's American Financial, investor Irwin Jacobs and Pacific Financial Research, though the latter cut its stake this summer. 
While many problems would attend a restructuring of Columbia, investors say Mr. Spiegel is mulling such a plan to mitigate Columbia's junk problems.
Indeed, Columbia executives recently told reporters they were interested in creating a separate unit to hold Columbia's junk bonds and perhaps do merchant banking. 
Columbia won't comment on all the speculation.
But like other thrifts, it's expected to seek regulators' consent to create a distinct junk-bond entity.
Plans to do this are due to be filed in a week or so. 
New rules force thrifts to write down their junk to market value, then sell the bonds over five years.
That's why Columbia just wrote off $130 million of its junk and reserved $227 million for future junk losses.
But if Columbia could keep its junk bonds separate from the thrift till they mature -- at full value, unless the issuer goes bust or restructures -- the junk portfolio might do all right. 
Columbia, a longtime Drexel client, won't provide current data on its junk.
But its 17 big junk holdings at year end showed only a few bonds that have been really battered.
These were Allied Stores, Western Union Telegraph, Gillett Holdings, SCI Television and Texas Air, though many other bonds in Columbia's portfolio also have lost value.
Possibly offsetting that, Columbia recently estimated it has unrealized gains on publicly traded equity investments of more than $70 million.
It also hopes for ultimate gains of as much as $300 million on equity investments in buy-outs and restructurings. 
One trial balloon Mr. Spiegel is said to have floated to investors: Columbia might be broken up, as Mellon Bank was split into a good bank and a bad bank.
But Columbia's good bank would be a regulated thrift, while the bad bank would be a private investment company, holding some of Columbia's junk bonds, real estate and equity investments. 
Some think Columbia's thrift, which now is seeking a new chief operating officer, might be capitalized at, say $300 million, and shopped to a commercial bank that wants a California presence.
The thrift surely could be sold for more than the value of its equity, financial industry executives say. 
Meanwhile, the bad bank with the junk bonds -- and some capital -- might be spun off to Columbia shareholders, including Mr. Spiegel, who might then have a new career, investors say. 
It isn't clear how much a restructuring would help Columbia stockholders.
But "the concept is workable.
You sell the good bank as an ongoing operation and use some of the proceeds to capitalize the bad bank," says thrift specialist Lewis Ranieri of Ranieri Associates in New York. 
Mr. Spiegel's next career move is a subject of speculation on Wall Street.
Few people think Mr. Spiegel wants to run a bread-and-butter thrift, which current rules would force Columbia to become. 
"They aren't really a thrift," says Jonathan Gray, a Sanford C. Bernstein analyst. 
Of course, regulators would have to approve Columbia's reorganization.
And some investment bankers say a restructuring isn't feasible while the SEC still is scrutinizing Mr. Spiegel's past junk-bond trades. 
Pauline Yoshihashi in Los Angeles contributed to this article. 
Columbia Savings & Loan 
(NYSE; Symbol: CSV) 
Business: Savings and loan 
Year ended Dec. 31, 1988: 
Net income: $65 million; or $1.49 a share 
Third quarter, Sept. 30, 1989: 
Net loss: $11.57 a share vs. net income: 
37 cents a share 
Average daily trading volume: 
83,206 shares 
Common shares outstanding: 19.6 million 
Note: All per-share figures are fully diluted. 
Genetics Institute Inc., Cambridge, Mass., said it was awarded U.S. patents for Interleukin-3 and bone morphogenetic protein. 
The patent for Interleukin-3 covers materials and methods used to make the human blood cell growth factor via recombinant DNA technology.
Sandoz Ltd. has licensed certain manufacturing and marketing rights for Interleukin-3 from Genetics Institute and is conducting preclinical studies with it.
Interleukin-3 may help in treating blood cell deficiencies associated with cancer treatment, bone marrow transplants and other blood-cell disorders, Genetics Institute said. 
The second patent describes bone morphogenetic protein-1, a substance that can induce formation of new cartilage.
The patent covers BMP-1 type proteins and pharmaceutical compositions and methods for treating bone or cartilage defects, Genetics Institute said.
The company added that it has filed patent applications "on a large number of different BMP proteins" and the patent on BMP-1 is the first it has received.
BMP products may be useful in fracture healing and in treating bone loss associated with periodontal disease and certain cancers, the company said. 
The Bush administration's nomination of Clarence Thomas to a seat on the federal appeals court here received a blow this week when the American Bar Association gave Mr. Thomas only a "qualified" rating, rather than "well qualified." 
People familiar with the Senate Judiciary Committee, which will vote on the nomination, said some liberal members of the panel are likely to question the ABA rating in hearings on the matter.
Mr. Thomas, currently chairman of the Equal Employment Opportunity Commission, would add another conservative voice to the closely divided court.
Groups have accused him of advocating policies that narrowed rights of older workers and of ignoring discrimination by large companies.
Fourteen members of the House with jurisdiction over the EEOC have said they oppose Mr. Thomas's nomination because of "serious questions about his judgment {and} respect for the law." 
A senior Justice Department official, however, said the administration isn't worried about the ABA rating. "We're pleased the ABA rated him qualified," David Runkel, the department's chief spokesman, said in an interview. 
The ABA gives a "qualified" rating to nominees it believes would perform "satisfactorily" on the bench.
In contrast, the lawyers' association gives a "well qualified" rating to those "regarded as one of the best available for the vacancy." 
Metallgesellschaft AG said it agreed to acquire 51% of Lentjes AG from the Ferdinand Lentjes Foundation.
Terms weren't disclosed. 
Metallgesellschaft, a diversified Frankfurt, West Germany-based metals group, said it is buying the stake in the specialized engineering company to expand its production of environmental supplies for power plants.
Lentjes' product mix of specialized boilers and pipes provides a good fit with its own Lurgi G.m.b.
H. plant engineering unit, the company said. 
The move is part of a strategy to focus on its core metals trading, processing and plant engineering activities while shedding peripheral units, the company said. 
Lentjes had 1988 sales of 800 million marks ($434.4 million) and has a current order backlog of 2.5 billion marks. 
The sale comes in place of a planned initial public offering of Lentjes stock.
A plan to bring the stock to market before year end apparently was upset by the recent weakness of Frankfurt share prices. 
The U.S. International Trade Commission issued preliminary rulings under the U.S. anti-dumping act that imports of sweaters from Hong Kong, Taiwan and South Korea may be injuring a domestic industry. 
Because of the rulings, the Commerce Department will continue to investigate complaints by U.S. sweater makers that the imports are reaching the U.S. at unfairly low prices in violation of the U.S. anti-dumping act.
The law defines unfairly low prices as ones below the cost of production or below prices in an exporter's home market. 
ITC officials said final Commerce Department and ITC rulings won't come until next March or later.
If both agencies find violations of the U.S. trade law, the U.S. would assess penalty duties on the imports, which already are subject to import quotas under bilateral textile and apparel trade agreements. 
Imports of manmade-fiber sweaters in 1988 totaled about $405 million from Taiwan, $400 million from South Korea and $125 million from Hong Kong, according to the ITC. 
In another action, the ITC dismissed anti-dumping act complaints filed by Du Pont Co. of Wilmington, Del., against imports of neoprene, a type of synthetic rubber, from France and West Germany.
These imports totaled about $17 million last year. 
Upjohn Co. said it will offer an early retirement package to as many as 1,100 employees in a cost-cutting move expected to result in a fourth-quarter charge. 
Upjohn officials said they couldn't estimate the size of the charge until they determine which employees, and how many, will participate in the retirement plan.
But the pharmaceutical company said it "anticipates the long-term savings resulting from the plan's implementation will more than offset short-term costs." 
The program, available to Upjohn employees 55 years old or older, could increase an individual's retirement benefits 10% to 20%.
In addition, Upjohn is offering a one-time retirement bonus equal to six months of base pay. 
Chairman Theodore Cooper called the program part of the company's two-year strategy to implement budget constraints and "an effective headcount-control program." 
But some analysts questioned how much of an impact the retirement package will have, because few jobs will end up being eliminated. "It's a cosmetic move," said Jonathan S. Gelles of Wertheim Schroder & Co. 
According to Upjohn's estimates, only 50% to 60% of the 1,100 eligible employees will take advantage of the plan.
Upjohn further estimated that about 50% of the employees who leave for early retirement may be replaced.
As a result, Upjohn will likely trim only about 275 to 350 of its more than 21,000 jobs world-wide. 
In composite trading on the New York Stock Exchange yesterday, Upjohn shares rose 87.5 cents to $38.875 apiece. 
An Upjohn spokesman said he had "heard nothing" to suggest the early retirement package was spurred by shareholder pressure or a potential bidder for the company, which occasionally has been the target of takeover speculation.
The company earlier this year adopted a shareholder-rights plan to ward off unwanted suitors. 
The spokesman said it is the first early retirement plan offered under its two-year cost-control strategy.
Earlier staff-reduction moves have trimmed about 300 jobs, the spokesman said. 
INTER-TEL Inc. (Chandler, Ariz.) -- Jerry Chapman, managing director of WayMar Associates, was elected a director of this business telecommunications software and systems concern.
He increases the board to seven. 
"Feeding Frenzy" (Henry Holt, 326 pages, $19.95), a highly detailed account of the Wedtech scandal, begins on a reassuring note. 
Right up front in the preface, co-author William Sternberg gives us an example of his own integrity.
When offered a free trip from the Bronx, Wedtech's home, to Washington, D.C., by one of Wedtech's principals, he tells the reader, "mindful of accepting anything of value from those I was writing about, I declined." 
Any question as to why an author would believe this plaintive, high-minded note of assurance is necessary is answered by reading this book about sticky fingers and sweaty scammers.
Bribe by bribe, Mr. Sternberg and his co-author, Matthew C. Harrison Jr., lead us along the path Wedtech traveled, from its inception as a small manufacturing company to the status of full-fledged defense contractor, entrusted with the task of producing vital equipment for the Army and Navy. 
The book revolves around John Mariotta, the founder of the company, and Fred Neuberger, who became his partner soon after Wedtech's creation.
Although started in 1965, Wedtech didn't really get rolling until 1975, when Mr. Neuberger discovered the federal government's Section 8(A) minority business program.
This is a Johnson-era, Great Society creation that mandates certain government contracts be awarded noncompetitively to minority businesses.
Mr. Neuberger realized that, although of Italian ancestry, Mr. Mariotta still could qualify as a minority person since he was born in Puerto Rico.
The two partners merely had to falsify the true ownership of the corporation.
Instead of 50/50 it became, on paper only, two-thirds Mariotta, one-third Neuberger, and they were in the program and off to the races. 
Besides being a "minority-owned company" Wedtech was located in the South Bronx, a blighted area, made famous by Jimmy Carter in his 1976 presidential campaign.
The company plugged itself right into Carter campaign rhetoric about rebuilding the South Bronx and kept using the minority -- South Bronx angle through the Reagan '80s. 
Starting with Congressman Mario Biaggi (now serving a jail sentence), the company began a career of bribing federal, state and local public officials and those close to public officials, right up to and including E. Robert Wallach, close friend and adviser to former Attorney General Ed Meese.
Wedtech didn't just use old fashioned bribery.
It made ample use of the modern techniques of influence peddling, retaining politically connected "respectable" law firms, investment bankers and political consultants, including Reagan confidant Lyn Nofzinger.
When necessary, it sought and received assistance from organized crime. 
Sometimes the bribed became partners in the company.
Wedtech management used the merit system.
If you were especially helpful in a corrupt scheme you received not just cash in a bag, but equity.
If you were not an effective crook, you found yourself out in the cold, a fate that eventually befell Mr. Mariotta, the firm's semiliterate "minority" person. 
But despite the sensational nature of the revelations and the breezy, easy-to-read tabloid writing style, "Feeding Frenzy" often falls short of gripping reading.
None of the scams show much ingenuity: Auditors found crookery the first day on the job.
Wedtech's scammers simply bribed them to shut up. 
The scammers themselves were garden-variety low lifes, conspicuous consumers who wanted big houses, Mercedes cars, beautiful women, expensive clothes.
Among the lot of them, not one is wrestling with good and evil, or especially intelligent or even temporarily insane.
The one character at least somewhat interesting was Irving Louis Lobsenz, a pediatrician who changed his name to Rusty Kent London and became a master gambler and author of a book on blackjack.
He enters the story toward the end, just in time to get arrested. 
Absorbed in doling out "Feeding Frenzy's" tidbits, the authors gloss over the root causes of Wedtech, namely the Section 8(A) federal program under whose auspices the scandal took place.
They do at least come around to saying that the courts might want to end "rigid affirmative action programs." Programs like Section 8(A) are a little like leaving gold in the street and then expressing surprise when thieves walk by to scoop it up.
Numerous other scandals, among them the ones at HUD, have the same characteristics as Wedtech.
They take place in government programs that seem tailor-made for corruption. 
Why are programs like this not eliminated? "Feeding Frenzy" does provide a few clues.
In and around all levels of government in the U.S. are groups of people who can best be described as belonging to a political insider commercial party.
They know that whenever government is redistributing wealth, regulating commerce or maintaining a large defense establishment, there is big money to be made in influencing, brokering or selling the processes and decisions of government.
They are our version of the East bloc's Nomenklatura and they have absolutely no wish to see anything change.
How many government programs and policies exist because they line the pockets of political insiders?
This is the real issue raised by the Wedtech scandal. 
Mr. Stern was chairman and chief executive officer of the New York State Urban Development Corp., 1983-85. 
The Finnish government and major creditors of bankrupt shipyard Waertsilae Marine Industries Oy agreed in principle to form a new company to complete most of the troubled shipyard's backlog of 15 ships. 
The new company will attempt to limit the shipyard's losses, participants said. "The situation is that the bankruptcy court will get out of the shipbuilding business.
Everything will be taken over by the new company," said Christian Andersson, executive vice president of Oy Waertsilae, former parent of Waertsilae Marine. 
Once its ownership is finalized, the new company will open talks with state-appointed receivers to buy or lease Waertsilae Marine's shipyard facilities.
Subcontractors will be offered a settlement and a swift transition to new management is expected to avert an exodus of skilled workers from Waertsilae Marine's two big shipyards, government officials said. 
Under an accord signed yesterday, the government and Union Bank of Finland would become major shareholders in the new company, each injecting 100 million Finnish markkaa ($23.5 million).
Oy Waertsilae is to contribute 200 million markkaa, most of it as subordinated debt, and take a minority stake in the new company. 
Customers holding contracts for Waertsilae Marine's undelivered ships are expected to subscribe most of the remaining 170 million markkaa in share capital, government officials said. 
Waertsilae Marine's biggest creditor is Miami-based Carnival Cruise Lines Inc. Carnival, which has three ships on order from Waertsilae Marine, presented claims for $1.5 billion damages in the bankruptcy court this week. 
Waertsilae Marine's bankruptcy proceedings began Tuesday in a Helsinki court. 
Its plans to be acquired dashed, Comprehensive Care Corp. said it plans to sell most of its psychiatric and drug abuse facilities in California and some other assets to pay its debt and provide working capital. 
In all, the company hopes to repay $45 million in debt through the sales, which will completely discharge its secured debt, the company said. 
In addition, the company has replaced its president and chief executive, naming W. James Nichol, head of the company's contract health services, to succeed B. Lee Karns.
Mr. Nichol said he was "extremely disappointed in the continuing deterioration of the company's operations while it attempted to conclude the reorganization during the past four months." Concurrent with Mr. Nichol's appointment, Comprehensive Care moved its corporate headquarters from Irvine, Calif., to St. Louis, where the company maintained its contract services offices. 
Mr. Karns continues as chairman. 
Comprehensive Care had agreed to be acquired by closely held First Hospital Corp. of Norfolk, Va., but the sale sputtered almost from the beginning and finally collapsed last week. 
In composite trading on the New York Stock Exchange yesterday, Comprehensive Care closed at $3.75 a share, up 12.5 cents. 
Ralston Purina Co. reported a 47% decline in fourth-quarter earnings, reflecting restructuring costs as well as a more difficult pet food market. 
The St. Louis company earned $45.2 million, or 65 cents a share, compared with $84.9 million, or $1.24 a share, a year earlier.
Sales in the latest period were $1.76 billion, a 13% increase from last year's $1.55 billion. 
For the year ended Sept. 30, Ralston earned $422.5 million, or $6.44 a share, up 8.9% from $387.8 million, or $5.63 a share.
This year's results included a gain of $70.2 million on the disposal of seafood operations.
Sales for the full year were $6.6 billion, up 13% from $5.8 billion. 
Ralston said its restructuring costs include the phase-out of a battery facility in Greenville, N.C., the recent closing of a Hostess cake bakery in Cincinnati and a reduction in staff throughout the company.
The battery plant, which makes rechargeable nickel cadmium and carbon zinc products, will be closed over the next year or so, a spokesman said. 
Ralston attributed its fourth-quarter slump partly to higher costs of ingredients in the pet food business as well as competitive pressures, which required higher advertising spending.
For the year, pet food volume was flat, the company said. 
Its cereal division realized higher operating profit on volume increases, but also spent more on promotion.
The Continental Baking business benefited from higher margins on bread and on increased cake sales, it added. 
Ralston said its Eveready battery unit was hurt by continuing economic problems in South America. 
Ralston shares closed yesterday at $80.50, off $1, in New York Stock Exchange composite trading. 
Companies listed below reported quarterly profit substantially different from the average of analysts' estimates.
The companies are followed by at least three analysts, and had a minimum five-cent change in actual earnings per share.
Estimated and actual results involving losses are omitted. 
The percent difference compares actual profit with the 30-day estimate where at least three analysts have issues forecasts in the past 30 days.
Otherwise, actual profit is compared with the 300-day estimate. 
Source: Zacks Investment Research 
First Chicago Corp. said it completed its $55.1 million cash-and-stock acquisition of closely held Ravenswood Financial Corp., another Chicago bank holding company. 
The record corn-buying binge by the Soviet Union is causing serious bottlenecks in the U.S. grain pipeline. 
The Soviet purchases are so massive that exporters are struggling to find enough river barges and trains to move the recently harvested Midwest crop to ports for loading onto Soviet ships. 
River barge rates have soared 40% this fall from a year earlier.
Railroad companies and some ports are reaping a sudden windfall of business.
And some grain analysts are predicting that corn prices might gyrate this month as exporters scrounge to find enough of the crop to meet their obligations to the Soviets. 
The Soviet Union bought roughly 310 million bushels of U.S. corn in October, which is the most ever sold to the Soviet Union in one month from the U.S.
The Soviet Union wants much of it delivered by January, which would be a strain in most years. 
But it is particularly difficult this autumn because of low water levels on the Mississippi River, on which flows much of the U.S. corn that is shipped overseas. 
"We are shipping the most corn in that short of time period to one customer on record," said William Dunton, a U.S. Agriculture Department transportation expert. "It is going to be real tight." 
Because of persistent dry weather in the northern Plains, the water level on the upper section of the Mississippi River is so low that many river operators are already trimming the number of barges their tows push at one time. 
In a few weeks, many barges probably won't be able to operate fully loaded south of St. Louis because the U.S. Army Corps of Engineers is beginning to reduce the flow of the Missouri River, which feeds into the Mississippi River.
The Army Corps is cutting the flow of the Missouri River about two weeks earlier than normal because of low water levels in the reservoirs that feed it. 
Barge rates on the Mississippi River sank yesterday on speculation that widespread rain this week in the Midwest might temporarily alleviate the situation. 
But the Army Corps of Engineers expects the river level to continue falling this month.
At St. Louis, the water level of the Mississippi River is already 6.5 feet below normal and it could drop an additional 2.5 feet when the flow of the Missouri River is slowed, an Army Corps spokesman said.
Similar levels hamstrung barge shipments last year in the wake of the worst drought in 50 years. 
So far, the grain industry's budding logistical problems haven't been a major factor in the trading of corn contracts at the Chicago Board of Trade.
Many grain processors and exporters use the price of the corn futures contracts traded there to calculate the price they offer to buy corn from farmers. 
At the Board of Trade yesterday the price of the corn contract for December delivery slipped 3.5 cents a bushel to settle at $2.375 a bushel. 
Corn prices have been sluggish this fall despite the huge Soviet orders because the harvest has allowed farmers to rebuild the stockpiles depleted by the 1988 drought.
With the harvest winding down, however, some analysts are speculating that prices might jump in some regions as U.S. exporters try to gather the corn they are obligated to deliver. 
Farmers are in the best position of many years to push up corn prices.
Because the drought reduced U.S. stockpiles, they have more than enough storage space for their new crop, and that permits them to wait for prices to rise. 
In parts of Iowa, for example, some grain elevators are offering farmers $2.15 a bushel for corn.
Many farmers probably wouldn't sell until prices rose at least 20 cents a bushel, said Lyle Reed, president of Chicago Central & Pacific Railroad Co. of Waterloo, Iowa. 
It isn't clear, however, who would win a waiting game.
Although U.S. corn stockpiles shrank by roughly half in the wake of the drought, the Agriculture Department projects that nearly one-fifth of the harvest will still be in storage before the 1990 corn harvest begins. 
Some analysts are worried that reports of the grain industry's problems might spark investors to begin buying corn futures contracts -- only to see little appreciation. "The public is buying the market when in reality there is plenty of grain to be shipped," said Bill Biedermann, Allendale Inc. research director. 
Although much of this country's export corn goes to New Orleans by barge, it is possible for exporters to sidestep the Mississippi River by shipping a larger-than-normal amount of corn by train to the port. 
Ports in the Great Lakes and Atlantic Coast can also relieve pressure on New Orleans.
One railroad, for example, is already increasing its grain hauling service from Indiana to Baltimore. 
And it isn't clear that the Soviet Union will stay on its record buying pace.
The Soviet orders were compressed into the month of October because of delays.
The Soviet Union usually begins buying U.S. crops earlier in the fall.
But its purchases apparently were delayed by a reorganization of its agricultural bureaucracy as well as budget problems. 
In other commodity markets yesterday: 
ENERGY: Crude oil futures prices increased in moderate trading, but much of the action was in heating oil.
Prices rose on the news that a sizable West German refinery was damaged in a fire, tightening an already tight European market.
Heating oil for November delivery ended at 58.64 cents a gallon, up one cent on the New York Mercantile Exchange.
West Texas Intermediate for December delivery advanced 22 cents to $19.94 a barrel.
Gasoline futures continued a sell-off that began Monday. 
PRECIOUS METALS: Futures prices eased as increased stability and strength came into the securities markets.
December delivery gold fell $3.20 an ounce to $377.60.
December silver declined 6.50 cents an ounce to $5.2180.
January platinum was down $5.70 an ounce at $494.50.
Precious metals, gold in particular, currently are being influenced more by stock market gyrations than the dollar as traders seek greater investment stability, according to William O'Neill, vice president of research at Elders Futures in New York. "The recent rally in precious metals was a result of uncertainty and volatility in equities," he said.
Yesterday, the stock market rose strongly, creating a more defensive attitude among precious metals traders, he said.
Silver and platinum, which have more of an industrial nature than gold, were even weaker, he said.
Silver is also under pressure of "extremely high" inventories in warehouses of the Commodity Exchange, he said.
Yesterday, these stocks rose by 170,262 ounces to a record of 226,570,380 ounces, according to an exchange spokesman. 
COPPER: Futures prices partially recovered Monday's declines because Chilean miners voted to strike.
The December contract rose 1.20 cents a pound to $1.14.
In Chile, workers at two copper mines, Los Bronces and El Soldado, which belong to the Exxon-owned Minera Disputada, yesterday voted to begin a full strike tomorrow, an analyst said.
Reasons for the walkout, the analyst said, included a number of procedural issues, such as a right to strike.
The analyst noted that also inherent in all metal markets was a sympathetic reaction to stocks.
In the case of copper, he said, the upbeat mood of stocks was reflected in demand for futures contracts because a stronger economy means greater buying interest for the metal.
Also contributing to the firmness in copper, the analyst noted, was a report by Chicago purchasing agents, which precedes the full purchasing agents' report that is due out today and gives an indication of what the full report might hold.
The Purchasing Management Association of Chicago's October index rose to 51.6% after three previous months of readings below 50%.
The September index was 47.1%.
A reading below 50% generally indicates a slowing in the industrial sector of the economy, while a reading above 50% points to expansion.
The Chicago report raised the possibility that the October survey of the National Association of Purchasing Management would also show a reading above 50%. 
NCR Corp. unveiled two models of its Tower line of midrange computers and introduced advanced networking software to allow the Tower family to operate as a central hub in a network of computers. 
The new software is based on Novell Inc. 's NetWare network operating system software. 
USX Corp. posted a 23% drop in third-quarter profit, as improved oil results failed to offset weakness in steel and natural gas operations. 
The nation's largest steelmaker earned $175 million, or 62 cents a share, compared with the year-earlier $228 million, or 80 cents a share.
The recent quarter includes pretax gains of $98 million from asset sales, while like gains in the year-earlier quarter totaled $61 million.
In the 1988 period, USX also had a $71 million after-tax gain from a tax dispute settlement.
Sales rose 5% to $4.4 billion from $4.2 billion. 
The earnings drop appears particularly steep in comparison with last year's unusually strong third quarter, when the company was riding an industrywide boom in demand and pricing.
However, third-quarter operating profit fell 14%, as USX sold sizable chunks of its diversified and steel segments, eliminating income from those operations. 
Among segments that continue to operate, though, the company's steel division continued to suffer from soft demand for its tubular goods serving the oil industry and other markets.
Peter Marcus, an analyst with PaineWebber Inc., said that a downturn in the appliance industry, coupled with sluggish automotive sales, hurt USX results.
Moreover, USX exports more than other steelmakers, and the overseas market has been under more severe pricing pressure. 
The company attributed lower sales and earnings for the steel segment to the loss of results from the Lorain, Ohio, plant, which now is a 50-50 joint venture with Japan's Kobe Steel Ltd. 
In the steel division, operating profit dropped 11% to $85 million.
Profit per ton of steel shipped dropped to about $33 a ton from $42 a ton last year and $53 a ton in the second quarter, analysts said.
Still, USX fared better than other major steelmakers, earning more per ton of steel shipped than either Bethlehem Steel Corp., which posted a 54% drop in net income, or Inland Steel Industries Inc., whose profit plummeted 70%. 
In New York Stock Exchange composite trading yesterday, USX shares closed up $1.25, at $34.625, as the reported earnings exceeded projections by some analysts who hadn't expected as great a volume of asset sales.
The rise in the stock's price may also reflect the fact that USX's steel segment fared better than some other steelmakers'. 
Charles Bradford, an analyst with Merrill Lynch Capital Markets, said USX may have received orders lost by competitors who were involved in labor contracts earlier this year.
He said USX also appeared to sell a richer mix of steel products, such as the more profitable pipe and galvanized coated sheet, than lower-priced structural goods. 
The energy segment, with a 15% rise in operating profit, is clearly the company's strongest.
Higher crude oil prices helped boost operating profit for the Marathon Oil Co. unit to $198 million from $180 million.
The Texas Oil & Gas division continues to operate in the red, although losses narrowed to $9 million from $15 million.
USX announced in October that it was soliciting bids to sell TXO's oil and gas reserves. 
Proceeds of that sale are to be used to reduce debt and buy back shares.
The company noted that it has reduced debt by $1.6 billion since the end of 1988 and bought back about 15.5 million shares of common stock since the fourth quarter of 1987.
USX has about $5.5 billion in long-term debt and 257 million shares outstanding. 
The announced sale of the reserves was followed by news that investor Carl Icahn had increased his stake in USX to 13.1% and threatened a takeover or other business combination.
Mr. Icahn has said he believes USX would be worth more if broken up into steel and energy segments. 
Profit for the nine months jumped 21% to $721 million, or $2.62 a share, from $598 million, or $2.07 a share.
Sales rose 10% to $13.8 billion from $12.5 billion. 
John F. Barrett, 40, formerly executive vice president and chief financial officer, was named president and chief operating officer, posts which had been vacant. 
Leon J. Level, vice president and chief financial officer of this computer services concern, and F. Warren McFarlan, a professor at Harvard University's Graduate School of Business, were elected directors, increasing board membership to nine. 
David A. DiLoreto, president of metal container division, was named to the additional post of group vice president, packaging products, at this packaging, industrial and aerospace products concern, succeeding Delmont A. Davis, who was named president and chief operating officer in August. 
Two leading constitutional-law experts said President Bush doesn't have the legal authority to exercise a line-item veto. 
Professors Philip Kurland of the University of Chicago and Laurence Tribe of Harvard Law School said any effort by President Bush to claim authority for a line-item veto would contradict the text of the Constitution and the intent of its authors, as well as the views of previous presidents. 
A line-item veto is a procedure that would allow a president to veto part of a big congressional spending bill without having to scuttle the entire measure.
Mr. Bush has said he would like to be able to use this procedure.
A White House spokesman said last week that the president is considering declaring that the Constitution implicitly gives him the authority for a line-item veto to provoke a test case. 
But the two legal experts, responding to an inquiry by Sen. Edward Kennedy (D., Mass.), wrote in a joint letter that the president "lacks the constitutional authority to exercise a line-item veto." The two professors represent different ends of the political spectrum -- Mr. Kurland is a conservative and Mr. Tribe is a liberal. 
The two professors said the Constitution authorizes the president to veto entire bills, not partial measures.
Moreover, they said the first appropriations bill passed 200 years ago covered many different items, and there was no discussion of a line-item veto.
They also said that more than a dozen presidents have called for line-item veto authority since the Civil War, and "all have shared the view that such lawmaking power is beyond the reach" of the president. 
Sen. Kennedy said in a separate statement that he supports legislation to give the president line-item veto power, but that it would be a "reckless course of action" for President Bush to claim the authority without congressional approval. 
Trinity Industries Inc. said it reached a preliminary agreement to sell 500 railcar platforms to Trailer Train Co. of Chicago.
Terms weren't disclosed. 
Trinity said it plans to begin delivery in the first quarter of next year. 

tokenized

Pierre Vinken , 61 years old , will join the board as a nonexecutive director Nov. 29 .
Mr. Vinken is chairman of Elsevier N.V. , the Dutch publishing group .
Rudolph Agnew , 55 years old and former chairman of Consolidated Gold Fields PLC , was named a nonexecutive director of this British industrial conglomerate .
A form of asbestos once used to make Kent cigarette filters has caused a high percentage of cancer deaths among a group of workers exposed to it more than 30 years ago , researchers reported .
The asbestos fiber , crocidolite , is unusually resilient once it enters the lungs , with even brief exposures to it causing symptoms that show up decades later , researchers said .
Lorillard Inc. , the unit of New York-based Loews Corp. that makes Kent cigarettes , stopped using crocidolite in its Micronite cigarette filters in 1956 .
Although preliminary findings were reported more than a year ago , the latest results appear in today 's New England Journal of Medicine , a forum likely to bring new attention to the problem .
A Lorillard spokewoman said , '' This is an old story .
We 're talking about years ago before anyone heard of asbestos having any questionable properties .
There is no asbestos in our products now . ''
Neither Lorillard nor the researchers who studied the workers were aware of any research on smokers of the Kent cigarettes. '' We have no useful information on whether users are at risk , '' said James A. Talcott of Boston 's Dana-Farber Cancer Institute .
Dr. Talcott led a team of researchers from the National Cancer Institute and the medical schools of Harvard University and Boston University .
The Lorillard spokeswoman said asbestos was used in '' very modest amounts '' in making paper for the filters in the early 1950s and replaced with a different type of filter in 1956 .
From 1953 to 1955 , 9.8 billion Kent cigarettes with the filters were sold , the company said .
Among 33 men who worked closely with the substance , 28 have died -- more than three times the expected number .
Four of the five surviving workers have asbestos-related diseases , including three with recently diagnosed cancer .
The total of 18 deaths from malignant mesothelioma , lung cancer and asbestosis was far higher than expected , the researchers said .
``The morbidity rate is a striking finding among those of us who study asbestos-related diseases , '' said Dr. Talcott .
The percentage of lung cancer deaths among the workers at the West Groton , Mass. , paper factory appears to be the highest for any asbestos workers studied in Western industrialized countries , he said .
The plant , which is owned by Hollingsworth & Vose Co. , was under contract with Lorillard to make the cigarette filters .
The finding probably will support those who argue that the U.S. should regulate the class of asbestos including crocidolite more stringently than the common kind of asbestos , chrysotile , found in most schools and other buildings , Dr. Talcott said .
The U.S. is one of the few industrialized nations that does n't have a higher standard of regulation for the smooth , needle-like fibers such as crocidolite that are classified as amphobiles , according to Brooke T. Mossman , a professor of pathlogy at the University of Vermont College of Medicine .
More common chrysotile fibers are curly and are more easily rejected by the body , Dr. Mossman explained .
In July , the Environmental Protection Agency imposed a gradual ban on virtually all uses of asbestos .
By 1997 , almost all remaining uses of cancer-causing asbestos will be outlawed .
About 160 workers at a factory that made paper for the Kent filters were exposed to asbestos in the 1950s .
Areas of the factory were particularly dusty where the crocidolite was used .
Workers dumped large burlap sacks of the imported material into a huge bin , poured in cotton and acetate fibers and mechanically mixed the dry fibers in a process used to make filters .
Workers described '' clouds of blue dust '' that hung over parts of the factory , even though exhaust fans ventilated the area .
``There 's no question that some of those workers and managers contracted asbestos-related diseases , '' said Darrell Phillips , vice president of human resources for Hollingsworth & Vose. '' But you have to recognize that these events took place 35 years ago .
It has no bearing on our work force today . ''
Yields on money-market mutual funds continued to slide , amid signs that portfolio managers expect further declines in interest rates .
The average seven-day compound yield of the 400 taxable funds tracked by IBC/Donoghue 's Money Fund Report eased a fraction of a percentage point to 8.45 % from 8.47 % for the week ended Tuesday .
Compound yields assume reinvestment of dividends and that the current yield continues for a year .
Average maturity of the funds ' investments lengthened by a day to 41 days , the longest since early August , according to Donoghue 's .
Longer maturities are thought to indicate declining interest rates because they permit portfolio managers to retain relatively higher rates for a longer period .
Shorter maturities are considered a sign of rising rates because portfolio managers can capture higher rates sooner .
The average maturity for funds open only to institutions , considered by some to be a stronger indicator because those managers watch the market closely , reached a high point for the year -- 33 days .
Nevertheless , said Brenda Malizia Negus , editor of Money Fund Report , yields '' may blip up again before they blip down '' because of recent rises in short-term interest rates .
The yield on six-month Treasury bills sold at Monday 's auction , for example , rose to 8.04 % from 7.90 % .
Despite recent declines in yields , investors continue to pour cash into money funds .
Assets of the 400 taxable funds grew by $ 1.5 billion during the latest week , to $ 352.7 billion .
Typically , money-fund yields beat comparable short-term investments because portfolio managers can vary maturities and go after the highest rates .
The top money funds are currently yielding well over 9 % .
Dreyfus World-Wide Dollar , the top-yielding fund , had a seven-day compound yield of 9.37 % during the latest week , down from 9.45 % a week earlier .
It invests heavily in dollar-denominated securities overseas and is currently waiving management fees , which boosts its yield .
The average seven-day simple yield of the 400 funds was 8.12 % , down from 8.14 % .
The 30-day simple yield fell to an average 8.19 % from 8.22 % ; the 30-day compound yield slid to an average 8.53 % from 8.56 % .
J.P. Bolduc , vice chairman of W.R. Grace & Co. , which holds a 83.4 % interest in this energy-services company , was elected a director .
He succeeds Terrence D. Daniels , formerly a W.R. Grace vice chairman , who resigned .
W.R. Grace holds three of Grace Energy 's seven board seats .
Pacific First Financial Corp. said shareholders approved its acquisition by Royal Trustco Ltd. of Toronto for $ 27 a share , or $ 212 million .
The thrift holding company said it expects to obtain regulatory approval and complete the transaction by year-end .
McDermott International Inc. said its Babcock & Wilcox unit completed the sale of its Bailey Controls Operations to Finmeccanica S.p .
A. for $ 295 million .
Finmeccanica is an Italian state-owned holding company with interests in the mechanical engineering industry .
Bailey Controls , based in Wickliffe , Ohio , makes computerized industrial controls systems .
It employs 2 , 700 people and has annual revenue of about $ 370 million .
The federal government suspended sales of U.S. savings bonds because Congress has n't lifted the ceiling on government debt .
Until Congress acts , the government has n't any authority to issue new debt obligations of any kind , the Treasury said .
The government 's borrowing authority dropped at midnight Tuesday to $ 2.80 trillion from $ 2.87 trillion .
Legislation to lift the debt ceiling is ensnarled in the fight over cutting capital-gains taxes .
The House has voted to raise the ceiling to $ 3.1 trillion , but the Senate is n't expected to act until next week at the earliest .
The Treasury said the U.S. will default on Nov. 9 if Congress does n't act by then .
Clark J. Vitulli was named senior vice president and general manager of this U.S. sales and marketing arm of Japanese auto maker Mazda Motor Corp .
In the new position he will oversee Mazda 's U.S. sales , service , parts and marketing operations .
Previously , Mr. Vitulli , 43 years old , was general marketing manager of Chrysler Corp. 's Chrysler division .
He had been a sales and marketing executive with Chrysler for 20 years .
When it 's time for their biannual powwow , the nation 's manufacturing titans typically jet off to the sunny confines of resort towns like Boca Raton and Hot Springs .
Not this year .
The National Association of Manufacturers settled on the Hoosier capital of Indianapolis for its fall board meeting .
And the city decided to treat its guests more like royalty or rock stars than factory owners .
The idea , of course : to prove to 125 corporate decision makers that the buckle on the Rust Belt is n't so rusty after all , that it 's a good place for a company to expand .
On the receiving end of the message were officials from giants like Du Pont and Maytag , along with lesser knowns like Trojan Steel and the Valley Queen Cheese Factory .
For starters , the executives joined Mayor William H. Hudnut III for an evening of the Indianapolis Symphony Orchestra and a guest pianist-comedian Victor Borge .
Champagne and dessert followed .
The next morning , with a police escort , busloads of executives and their wives raced to the Indianapolis Motor Speedway , unimpeded by traffic or red lights .
The governor could n't make it , so the lieutenant governor welcomed the special guests .
A buffet breakfast was held in the museum , where food and drinks are banned to everyday visitors .
Then , in the guests ' honor , the speedway hauled out four drivers , crews and even the official Indianapolis 500 announcer for a 10-lap exhibition race .
After the race , Fortune 500 executives drooled like schoolboys over the cars and drivers .
No dummies , the drivers pointed out they still had space on their machines for another sponsor 's name or two .
Back downtown , the execs squeezed in a few meetings at the hotel before boarding the buses again .
This time , it was for dinner and dancing -- a block away .
Under the stars and moons of the renovated Indiana Roof ballroom , nine of the hottest chefs in town fed them Indiana duckling mousseline , lobster consomme , veal mignon and chocolate terrine with a raspberry sauce .
Knowing a tasty -- and free -- meal when they eat one , the executives gave the chefs a standing ovation .
More than a few CEOs say the red-carpet treatment tempts them to return to a heartland city for future meetings .
But for now , they 're looking forward to their winter meeting -- Boca in February .
South Korea registered a trade deficit of $ 101 million in October , reflecting the country 's economic sluggishness , according to government figures released Wednesday .
Preliminary tallies by the Trade and Industry Ministry showed another trade deficit in October , the fifth monthly setback this year , casting a cloud on South Korea 's export-oriented economy .
Exports in October stood at $ 5.29 billion , a mere 0.7 % increase from a year earlier , while imports increased sharply to $ 5.39 billion , up 20 % from last October .
South Korea 's economic boom , which began in 1986 , stopped this year because of prolonged labor disputes , trade conflicts and sluggish exports .
Government officials said exports at the end of the year would remain under a government target of $ 68 billion .
Despite the gloomy forecast , South Korea has recorded a trade surplus of $ 71 million so far this year .
From January to October , the nation 's accumulated exports increased 4 % from the same period last year to $ 50.45 billion .
Imports were at $ 50.38 billion , up 19 % .
Newsweek , trying to keep pace with rival Time magazine , announced new advertising rates for 1990 and said it will introduce a new incentive plan for advertisers .
The new ad plan from Newsweek , a unit of the Washington Post Co. , is the second incentive plan the magazine has offered advertisers in three years .
Plans that give advertisers discounts for maintaining or increasing ad spending have become permanent fixtures at the news weeklies and underscore the fierce competition between Newsweek , Time Warner Inc. 's Time magazine , and Mortimer B. Zuckerman 's U.S. News & World Report .
Alan Spoon , recently named Newsweek president , said Newsweek 's ad rates would increase 5 % in January .
A full , four-color page in Newsweek will cost $ 100 , 980 .
In mid-October , Time magazine lowered its guaranteed circulation rate base for 1990 while not increasing ad page rates ; with a lower circulation base , Time 's ad rate will be effectively 7.5 % higher per subscriber ; a full page in Time costs about $ 120 , 000 .
U.S. News has yet to announce its 1990 ad rates .
Newsweek said it will introduce the Circulation Credit Plan , which awards space credits to advertisers on '' renewal advertising. '' The magazine will reward with '' page bonuses '' advertisers who in 1990 meet or exceed their 1989 spending , as long as they spent $ 325 , 000 in 1989 and $ 340 , 000 in 1990 .
Mr. Spoon said the plan is not an attempt to shore up a decline in ad pages in the first nine months of 1989 ; Newsweek 's ad pages totaled 1 , 620 , a drop of 3.2 % from last year , according to Publishers Information Bureau. '' What matters is what advertisers are paying per page , and in that department we are doing fine this fall , '' said Mr. Spoon .
Both Newsweek and U.S. News have been gaining circulation in recent years without heavy use of electronic giveaways to subscribers , such as telephones or watches .
However , none of the big three weeklies recorded circulation gains recently .
According to Audit Bureau of Circulations , Time , the largest newsweekly , had average circulation of 4 , 393 , 237 , a decrease of 7.3 % .
Newsweek 's circulation for the first six months of 1989 was 3 , 288 , 453 , flat from the same period last year .
U.S. News ' circulation in the same time was 2 , 303 , 328 , down 2.6 % .
New England Electric System bowed out of the bidding for Public Service Co. of New Hampshire , saying that the risks were too high and the potential payoff too far in the future to justify a higher offer .
The move leaves United Illuminating Co. and Northeast Utilities as the remaining outside bidders for PS of New Hampshire , which also has proposed an internal reorganization plan in Chapter 11 bankruptcy proceedings under which it would remain an independent company .
New England Electric , based in Westborough , Mass. , had offered $ 2 billion to acquire PS of New Hampshire , well below the $ 2.29 billion value United Illuminating places on its bid and the $ 2.25 billion Northeast says its bid is worth .
United Illuminating is based in New Haven , Conn. , and Northeast is based in Hartford , Conn .
PS of New Hampshire , Manchester , N.H. , values its internal reorganization plan at about $ 2.2 billion .
John Rowe , president and chief executive officer of New England Electric , said the company 's return on equity could suffer if it made a higher bid and its forecasts related to PS of New Hampshire -- such as growth in electricity demand and improved operating efficiencies -- did n't come true. '' When we evaluated raising our bid , the risks seemed substantial and persistent over the next five years , and the rewards seemed a long way out .
That got hard to take , '' he added .
Mr. Rowe also noted that political concerns also worried New England Electric .
No matter who owns PS of New Hampshire , after it emerges from bankruptcy proceedings its rates will be among the highest in the nation , he said. '' That attracts attention . . . it was just another one of the risk factors '' that led to the company 's decision to withdraw from the bidding , he added .
Wilbur Ross Jr. of Rothschild Inc. , the financial adviser to the troubled company 's equity holders , said the withdrawal of New England Electric might speed up the reorganization process .
The fact that New England proposed lower rate increases -- 4.8 % over seven years against around 5.5 % boosts proposed by the other two outside bidders -- complicated negotiations with state officials , Mr. Ross asserted. '' Now the field is less cluttered , '' he added .
Separately , the Federal Energy Regulatory Commission turned down for now a request by Northeast seeking approval of its possible purchase of PS of New Hampshire .
Northeast said it would refile its request and still hopes for an expedited review by the FERC so that it could complete the purchase by next summer if its bid is the one approved by the bankruptcy court .
PS of New Hampshire shares closed yesterday at $ 3.75 , off 25 cents , in New York Stock Exchange composite trading .
Norman Ricken , 52 years old and former president and chief operating officer of Toys '' R '' Us Inc. , and Frederick Deane Jr. , 63 , chairman of Signet Banking Corp. , were elected directors of this consumer electronics and appliances retailing chain .
They succeed Daniel M. Rexinger , retired Circuit City executive vice president , and Robert R. Glauber , U.S. Treasury undersecretary , on the 12-member board .
Commonwealth Edison Co. was ordered to refund about $ 250 million to its current and former ratepayers for illegal rates collected for cost overruns on a nuclear power plant .
The refund was about $ 55 million more than previously ordered by the Illinois Commerce Commission and trade groups said it may be the largest ever required of a state or local utility .
State court Judge Richard Curry ordered Edison to make average refunds of about $ 45 to $ 50 each to Edison customers who have received electric service since April 1986 , including about two million customers who have moved during that period .
Judge Curry ordered the refunds to begin Feb. 1 and said that he would n't entertain any appeals or other attempts to block his order by Commonwealth Edison. '' The refund pool . . . may not be held hostage through another round of appeals , '' Judge Curry said .
Commonwealth Edison said it is already appealing the underlying commission order and is considering appealing Judge Curry 's order .
The exact amount of the refund will be determined next year based on actual collections made until Dec. 31 of this year .
Commonwealth Edison said the ruling could force it to slash its 1989 earnings by $ 1.55 a share .
For 1988 , Commonwealth Edison reported earnings of $ 737.5 million , or $ 3.01 a share .
A Commonwealth Edison spokesman said that tracking down the two million customers whose addresses have changed during the past 3 1/2 years would be '' an administrative nightmare . ''
In New York Stock Exchange composite trading yesterday , Commonwealth Edison closed at $ 38.375 , down 12.5 cents .
The $ 2.5 billion Byron 1 plant near Rockford , Ill. , was completed in 1985 .
In a disputed 1985 ruling , the Commerce Commission said Commonwealth Edison could raise its electricity rates by $ 49 million to pay for the plant .
But state courts upheld a challenge by consumer groups to the commission 's rate increase and found the rates illegal .
The Illinois Supreme Court ordered the commission to audit Commonwealth Edison 's construction expenses and refund any unreasonable expenses .
The utility has been collecting for the plant 's construction cost from its 3.1 million customers subject to a refund since 1986 .
In August , the commission ruled that between $ 190 million and $ 195 million of the plant 's construction cost was unreasonable and should be refunded , plus interest .
In his ruling , Judge Curry added an additional $ 55 million to the commission 's calculations .
Last month , Judge Curry set the interest rate on the refund at 9 % .
Commonwealth Edison now faces an additional court-ordered refund on its summer/winter rate differential collections that the Illinois Appellate Court has estimated at $ 140 million .
And consumer groups hope that Judge Curry 's Byron 1 order may set a precedent for a second nuclear rate case involving Commonwealth Edison 's Braidwood 2 plant .
Commonwealth Edison is seeking about $ 245 million in rate increases to pay for Braidwood 2 .
The commission is expected to rule on the Braidwood 2 case by year end .
Last year Commonwealth Edison had to refund $ 72.7 million for poor performance of its LaSalle I nuclear plant .
Japan 's domestic sales of cars , trucks and buses in October rose 18 % from a year earlier to 500 , 004 units , a record for the month , the Japan Automobile Dealers ' Association said .
The strong growth followed year-to-year increases of 21 % in August and 12 % in September .
The monthly sales have been setting records every month since March .
October sales , compared with the previous month , inched down 0.4 % .
Sales of passenger cars grew 22 % from a year earlier to 361 , 376 units .
Sales of medium-sized cars , which benefited from price reductions arising from introduction of the consumption tax , more than doubled to 30 , 841 units from 13 , 056 in October 1988 .
Texas Instruments Japan Ltd. , a unit of Texas Instruments Inc. , said it opened a plant in South Korea to manufacture control devices .
The new plant , located in Chinchon about 60 miles from Seoul , will help meet increasing and diversifying demand for control products in South Korea , the company said .
The plant will produce control devices used in motor vehicles and household appliances .
The survival of spinoff Cray Computer Corp. as a fledgling in the supercomputer business appears to depend heavily on the creativity -- and longevity -- of its chairman and chief designer , Seymour Cray .
Not only is development of the new company 's initial machine tied directly to Mr. Cray , so is its balance sheet .
Documents filed with the Securities and Exchange Commission on the pending spinoff disclosed that Cray Research Inc. will withdraw the almost $ 100 million in financing it is providing the new firm if Mr. Cray leaves or if the product-design project he heads is scrapped .
The documents also said that although the 64-year-old Mr. Cray has been working on the project for more than six years , the Cray-3 machine is at least another year away from a fully operational prototype .
Moreover , there have been no orders for the Cray-3 so far , though the company says it is talking with several prospects .
While many of the risks were anticipated when Minneapolis-based Cray Research first announced the spinoff in May , the strings it attached to the financing had n't been made public until yesterday .
``We did n't have much of a choice , '' Cray Computer 's chief financial officer , Gregory Barnum , said in an interview. '' The theory is that Seymour is the chief designer of the Cray-3 , and without him it could not be completed .
Cray Research did not want to fund a project that did not include Seymour . ''
The documents also said that Cray Computer anticipates needing perhaps another $ 120 million in financing beginning next September .
But Mr. Barnum called that '' a worst-case '' scenario .
The filing on the details of the spinoff caused Cray Research stock to jump $ 2.875 yesterday to close at $ 38 in New York Stock Exchange composite trading .
Analysts noted yesterday that Cray Research 's decision to link its $ 98.3 million promissory note to Mr. Cray 's presence will complicate a valuation of the new company. '' It has to be considered as an additional risk for the investor , '' said Gary P. Smaby of Smaby Group Inc. , Minneapolis. '' Cray Computer will be a concept stock , '' he said. '' You either believe Seymour can do it again or you do n't . ''
Besides the designer 's age , other risk factors for Mr. Cray 's new company include the Cray-3 's tricky , unproven chip technology .
The SEC documents describe those chips , which are made of gallium arsenide , as being so fragile and minute they will require special robotic handling equipment .
In addition , the Cray-3 will contain 16 processors -- twice as many as the largest current supercomputer .
Cray Computer also will face intense competition , not only from Cray Research , which has about 60 % of the world-wide supercomputer market and which is expected to roll out the C-90 machine , a direct competitor with the Cray-3 , in 1991 .
The spinoff also will compete with International Business Machines Corp. and Japan 's Big Three -- Hitachi Ltd. , NEC Corp. and Fujitsu Ltd .
The new company said it believes there are fewer than 100 potential customers for supercomputers priced between $ 15 million and $ 30 million -- presumably the Cray-3 price range .
Under terms of the spinoff , Cray Research stockholders are to receive one Cray Computer share for every two Cray Research shares they own in a distribution expected to occur in about two weeks .
No price for the new shares has been set .
Instead , the companies will leave it up to the marketplace to decide .
Cray Computer has applied to trade on Nasdaq .
Analysts calculate Cray Computer 's initial book value at about $ 4.75 a share .
Along with the note , Cray Research is transferring about $ 53 million in assets , primarily those related to the Cray-3 development , which has been a drain on Cray Research 's earnings .
Pro-forma balance sheets clearly show why Cray Research favored the spinoff .
Without the Cray-3 research and development expenses , the company would have been able to report a profit of $ 19.3 million for the first half of 1989 rather than the $ 5.9 million it posted .
On the other hand , had it existed then , Cray Computer would have incurred a $ 20.5 million loss .
Mr. Cray , who could n't be reached for comment , will work for the new Colorado Springs , Colo. , company as an independent contractor -- the arrangement he had with Cray Research .
Regarded as the father of the supercomputer , Mr. Cray was paid $ 600 , 000 at Cray Research last year .
At Cray Computer , he will be paid $ 240 , 000 .
Besides Messrs .
Cray and Barnum , other senior management at the company includes Neil Davenport , 47 , president and chief executive officer ; Joseph M. Blanchard , 37 , vice president , engineering ; Malcolm A. Hammerton , 40 , vice president , software ; and Douglas R. Wheeland , 45 , vice president , hardware .
All came from Cray Research .
Cray Computer , which currently employs 241 people , said it expects a work force of 450 by the end of 1990 .
John R. Stevens , 49 years old , was named senior executive vice president and chief operating officer , both new positions .
He will continue to report to Donald Pardus , president and chief executive officer .
Mr. Stevens was executive vice president of this electric-utility holding company .
Arthur A. Hatch , 59 , was named executive vice president of the company .
He was previously president of the company 's Eastern Edison Co. unit .
John D. Carney , 45 , was named to succeed Mr. Hatch as president of Eastern Edison .
Previously he was vice president of Eastern Edison .
Robert P. Tassinari , 63 , was named senior vice president of Eastern Utilities .
He was previously vice president .
The U.S. , claiming some success in its trade diplomacy , removed South Korea , Taiwan and Saudi Arabia from a list of countries it is closely watching for allegedly failing to honor U.S. patents , copyrights and other intellectual-property rights .
However , five other countries -- China , Thailand , India , Brazil and Mexico -- will remain on that so-called priority watch list as a result of an interim review , U.S. Trade Representative Carla Hills announced .
Under the new U.S. trade law , those countries could face accelerated unfair-trade investigations and stiff trade sanctions if they do n't improve their protection of intellectual property by next spring .
Mrs. Hills said many of the 25 countries that she placed under varying degrees of scrutiny have made '' genuine progress '' on this touchy issue .
She said there is '' growing realization '' around the world that denial of intellectual-property rights harms all trading nations , and particularly the '' creativity and inventiveness of an { offending } country 's own citizens . ''
U.S. trade negotiators argue that countries with inadequate protections for intellectual-property rights could be hurting themselves by discouraging their own scientists and authors and by deterring U.S. high-technology firms from investing or marketing their best products there .
Mrs. Hills lauded South Korea for creating an intellectual-property task force and special enforcement teams of police officers and prosecutors trained to pursue movie and book pirates .
Seoul also has instituted effective search-and-seizure procedures to aid these teams , she said .
Taiwan has improved its standing with the U.S. by initialing a bilateral copyright agreement , amending its trademark law and introducing legislation to protect foreign movie producers from unauthorized showings of their films .
That measure could compel Taipei 's growing number of small video-viewing parlors to pay movie producers for showing their films .
Saudi Arabia , for its part , has vowed to enact a copyright law compatible with international standards and to apply the law to computer software as well as to literary works , Mrs. Hills said .
These three countries are n't completely off the hook , though .
They will remain on a lower-priority list that includes 17 other countries .
Those countries -- including Japan , Italy , Canada , Greece and Spain -- are still of some concern to the U.S. but are deemed to pose less-serious problems for American patent and copyright owners than those on the '' priority '' list .
Gary Hoffman , a Washington lawyer specializing in intellectual-property cases , said the threat of U.S. retaliation , combined with a growing recognition that protecting intellectual property is in a country 's own interest , prompted the improvements made by South Korea , Taiwan and Saudi Arabia. '' What this tells us is that U.S. trade law is working , '' he said .
He said Mexico could be one of the next countries to be removed from the priority list because of its efforts to craft a new patent law .
Mrs. Hills said that the U.S. is still concerned about '' disturbing developments in Turkey and continuing slow progress in Malaysia. '' She did n't elaborate , although earlier U.S. trade reports have complained of videocassette piracy in Malaysia and disregard for U.S. pharmaceutical patents in Turkey .
The 1988 trade act requires Mrs. Hills to issue another review of the performance of these countries by April 30 .
So far , Mrs. Hills has n't deemed any cases bad enough to merit an accelerated investigation under the so-called special 301 provision of the act .
Argentina said it will ask creditor banks to halve its foreign debt of $ 64 billion -- the third-highest in the developing world .
The declaration by Economy Minister Nestor Rapanelli is believed to be the first time such an action has been called for by an Argentine official of such stature .
The Latin American nation has paid very little on its debt since early last year .
``Argentina aspires to reach a reduction of 50 % in the value of its external debt , '' Mr. Rapanelli said through his spokesman , Miguel Alurralde .
Mr. Rapanelli met in August with U.S. Assistant Treasury Secretary David Mulford .
Argentine negotiator Carlos Carballo was in Washington and New York this week to meet with banks .
Mr. Rapanelli recently has said the government of President Carlos Menem , who took office July 8 , feels a significant reduction of principal and interest is the only way the debt problem may be solved .
But he has not said before that the country wants half the debt forgiven .
( During its centennial year , The Wall Street Journal will report events of the past century that stand as milestones of American business history . )
THREE COMPUTERS THAT CHANGED the face of personal computing were launched in 1977 .
That year the Apple II , Commodore Pet and Tandy TRS-80 came to market .
The computers were crude by today 's standards .
Apple II owners , for example , had to use their television sets as screens and stored data on audiocassettes .
But Apple II was a major advance from Apple I , which was built in a garage by Stephen Wozniak and Steven Jobs for hobbyists such as the Homebrew Computer Club .
In addition , the Apple II was an affordable $ 1 , 298 .
Crude as they were , these early PCs triggered explosive product development in desktop models for the home and office .
Big mainframe computers for business had been around for years .
But the new 1977 PCs -- unlike earlier built-from-kit types such as the Altair , Sol and IMSAI -- had keyboards and could store about two pages of data in their memories .
Current PCs are more than 50 times faster and have memory capacity 500 times greater than their 1977 counterparts .
There were many pioneer PC contributors .
William Gates and Paul Allen in 1975 developed an early language-housekeeper system for PCs , and Gates became an industry billionaire six years after IBM adapted one of these versions in 1981 .
Alan F. Shugart , currently chairman of Seagate Technology , led the team that developed the disk drives for PCs .
Dennis Hayes and Dale Heatherington , two Atlanta engineers , were co-developers of the internal modems that allow PCs to share data via the telephone .
IBM , the world leader in computers , did n't offer its first PC until August 1981 as many other companies entered the market .
Today , PC shipments annually total some $ 38.3 billion world-wide .
F.H. Faulding & Co. , an Australian pharmaceuticals company , said its Moleculon Inc. affiliate acquired Kalipharma Inc. for $ 23 million .
Kalipharma is a New Jersey-based pharmaceuticals concern that sells products under the Purepac label .
Faulding said it owns 33 % of Moleculon 's voting stock and has an agreement to acquire an additional 19 % .
That stake , together with its convertible preferred stock holdings , gives Faulding the right to increase its interest to 70 % of Moleculon 's voting stock .
Oil production from Australia 's Bass Strait fields will be raised by 11 , 000 barrels a day to about 321 , 000 barrels with the launch of the Whiting field , the first of five small fields scheduled to be brought into production before the end of 1990 .
Esso Australia Ltd. , a unit of New York-based Exxon Corp. , and Broken Hill Pty. operate the fields in a joint venture .
Esso said the Whiting field started production Tuesday .
Output will be gradually increased until it reaches about 11 , 000 barrels a day .
The field has reserves of 21 million barrels .
Reserves for the five new fields total 50 million barrels .
The Perch and Dolphin fields are expected to start producing early next year , and the Seahorse and Tarwhine fields later next year .
Esso said the fields were developed after the Australian government decided in 1987 to make the first 30 million barrels from new fields free of excise tax .
R.P. Scherer Corp. said it completed the $ 10.2 million sale of its Southern Optical subsidiary to a group led by the unit 's president , Thomas R. Sloan , and other managers .
Following the acquisition of R.P. Scherer by a buy-out group led by Shearson Lehman Hutton earlier this year , the maker of gelatin capsules decided to divest itself of certain of its non-encapsulating businesses .
The sale of Southern Optical is a part of the program .
The White House said President Bush has approved duty-free treatment for imports of certain types of watches that are n't produced in '' significant quantities '' in the U.S. , the Virgin Islands and other U.S. possessions .
The action came in response to a petition filed by Timex Inc. for changes in the U.S. Generalized System of Preferences for imports from developing nations .
Previously , watch imports were denied such duty-free treatment .
Timex had requested duty-free treatment for many types of watches , covered by 58 different U.S. tariff classifications .
The White House said Mr. Bush decided to grant duty-free status for 18 categories , but turned down such treatment for other types of watches '' because of the potential for material injury to watch producers located in the U.S. and the Virgin Islands . ''
Timex is a major U.S. producer and seller of watches , including low-priced battery-operated watches assembled in the Philippines and other developing nations covered by the U.S. tariff preferences .
U.S. trade officials said the Philippines and Thailand would be the main beneficiaries of the president 's action .
Imports of the types of watches that now will be eligible for duty-free treatment totaled about $ 37.3 million in 1988 , a relatively small share of the $ 1.5 billion in U.S. watch imports that year , according to an aide to U.S. Trade Representative Carla Hills .
Magna International Inc. 's chief financial officer , James McAlpine , resigned and its chairman , Frank Stronach , is stepping in to help turn the automotive-parts manufacturer around , the company said .
Mr. Stronach will direct an effort to reduce overhead and curb capital spending '' until a more satisfactory level of profit is achieved and maintained , '' Magna said .
Stephen Akerfeldt , currently vice president finance , will succeed Mr. McAlpine .
An ambitious expansion has left Magna with excess capacity and a heavy debt load as the automotive industry enters a downturn .
The company has reported declines in operating profit in each of the past three years , despite steady sales growth .
Magna recently cut its quarterly dividend in half and the company 's Class A shares are wallowing far below their 52-week high of 16.125 Canadian dollars ( US $ 13.73 ) .
On the Toronto Stock Exchange yesterday , Magna shares closed up 37.5 Canadian cents to C $ 9.625 .
Mr. Stronach , founder and controlling shareholder of Magna , resigned as chief executive officer last year to seek , unsuccessfully , a seat in Canada 's Parliament .
Analysts said Mr. Stronach wants to resume a more influential role in running the company .
They expect him to cut costs throughout the organization .
The company said Mr. Stronach will personally direct the restructuring , assisted by Manfred Gingl , president and chief executive .
Neither they nor Mr. McAlpine could be reached for comment .
Magna said Mr. McAlpine resigned to pursue a consulting career , with Magna as one of his clients .
Lord Chilver , 63-year-old chairman of English China Clays PLC , was named a nonexecutive director of this British chemical company .
Japanese investors nearly single-handedly bought up two new mortgage securities-based mutual funds totaling $ 701 million , the U.S. Federal National Mortgage Association said .
The purchases show the strong interest of Japanese investors in U.S. mortgage-based instruments , Fannie Mae 's chairman , David O. Maxwell , said at a news conference .
He said more than 90 % of the funds were placed with Japanese institutional investors .
The rest went to investors from France and Hong Kong .
Earlier this year , Japanese investors snapped up a similar , $ 570 million mortgage-backed securities mutual fund .
That fund was put together by Blackstone Group , a New York investment bank .
The latest two funds were assembled jointly by Goldman , Sachs & Co. of the U.S. and Japan 's Daiwa Securities Co .
The new , seven-year funds -- one offering a fixed-rate return and the other with a floating-rate return linked to the London interbank offered rate -- offer two key advantages to Japanese investors .
First , they are designed to eliminate the risk of prepayment -- mortgage-backed securities can be retired early if interest rates decline , and such prepayment forces investors to redeploy their money at lower rates .
Second , they channel monthly mortgage payments into semiannual payments , reducing the administrative burden on investors .
By addressing those problems , Mr. Maxwell said , the new funds have become '' extremely attractive to Japanese and other investors outside the U.S . ''
Such devices have boosted Japanese investment in mortgage-backed securities to more than 1 % of the $ 900 billion in such instruments outstanding , and their purchases are growing at a rapid rate .
They also have become large purchasers of Fannie Mae 's corporate debt , buying $ 2.4 billion in Fannie Mae bonds during the first nine months of the year , or almost a tenth of the total amount issued .
James L. Pate , 54-year-old executive vice president , was named a director of this oil concern , expanding the board to 14 members .
LTV Corp. said a federal bankruptcy court judge agreed to extend until March 8 , 1990 , the period in which the steel , aerospace and energy products company has the exclusive right to file a reorganization plan .
The company is operating under Chapter 11 of the federal Bankruptcy Code , giving it court protection from creditors ' lawsuits while it attempts to work out a plan to pay its debts .
Italian chemical giant Montedison S.p .
A. , through its Montedison Acquisition N.V. indirect unit , began its $ 37-a-share tender offer for all the common shares outstanding of Erbamont N.V. , a maker of pharmaceuticals incorporated in the Netherlands .
The offer , advertised in today 's editions of The Wall Street Journal , is scheduled to expire at the end of November .
Montedison currently owns about 72 % of Erbamont 's common shares outstanding .
The offer is being launched pursuant to a previously announced agreement between the companies .
Japan 's reserves of gold , convertible foreign currencies , and special drawing rights fell by a hefty $ 1.82 billion in October to $ 84.29 billion , the Finance Ministry said .
The total marks the sixth consecutive monthly decline .
The protracted downturn reflects the intensity of Bank of Japan yen-support intervention since June , when the U.S. currency temporarily surged above the 150.00 yen level .
The announcement follows a sharper $ 2.2 billion decline in the country 's foreign reserves in September to $ 86.12 billion .
Pick a country , any country .
It 's the latest investment craze sweeping Wall Street : a rash of new closed-end country funds , those publicly traded portfolios that invest in stocks of a single foreign country .
No fewer than 24 country funds have been launched or registered with regulators this year , triple the level of all of 1988 , according to Charles E. Simon & Co. , a Washington-based research firm .
The turf recently has ranged from Chile to Austria to Portugal .
Next week , the Philippine Fund 's launch will be capped by a visit by Philippine President Corazon Aquino -- the first time a head of state has kicked off an issue at the Big Board here .
The next province ? '' Anything 's possible -- how about the New Guinea Fund ? '' quips George Foot , a managing partner at Newgate Management Associates of Northampton , Mass .
The recent explosion of country funds mirrors the '' closed-end fund mania '' of the 1920s , Mr. Foot says , when narrowly focused funds grew wildly popular .
They fell into oblivion after the 1929 crash .
Unlike traditional open-end mutual funds , most of these one-country portfolios are the '' closed-end '' type , issuing a fixed number of shares that trade publicly .
The surge brings to nearly 50 the number of country funds that are or soon will be listed in New York or London .
These funds now account for several billions of dollars in assets .
``People are looking to stake their claims '' now before the number of available nations runs out , says Michael Porter , an analyst at Smith Barney , Harris Upham & Co. , New York .
Behind all the hoopla is some heavy-duty competition .
As individual investors have turned away from the stock market over the years , securities firms have scrambled to find new products that brokers find easy to sell .
And the firms are stretching their nets far and wide to do it .
Financial planners often urge investors to diversify and to hold a smattering of international securities .
And many emerging markets have outpaced more mature markets , such as the U.S. and Japan .
Country funds offer an easy way to get a taste of foreign stocks without the hard research of seeking out individual companies .
But it does n't take much to get burned .
Political and currency gyrations can whipsaw the funds .
Another concern : The funds ' share prices tend to swing more than the broader market .
When the stock market dropped nearly 7 % Oct. 13 , for instance , the Mexico Fund plunged about 18 % and the Spain Fund fell 16 % .
And most country funds were clobbered more than most stocks after the 1987 crash .
What 's so wild about the funds ' frenzy right now is that many are trading at historically fat premiums to the value of their underlying portfolios .
After trading at an average discount of more than 20 % in late 1987 and part of last year , country funds currently trade at an average premium of 6 % .
The reason : Share prices of many of these funds this year have climbed much more sharply than the foreign stocks they hold .
It 's probably worth paying a premium for funds that invest in markets that are partially closed to foreign investors , such as South Korea , some specialists say .
But some European funds recently have skyrocketed ; Spain Fund has surged to a startling 120 % premium .
It has been targeted by Japanese investors as a good long-term play tied to 1992 's European economic integration .
And several new funds that are n't even fully invested yet have jumped to trade at big premiums .
``I 'm very alarmed to see these rich valuations , '' says Smith Barney 's Mr. Porter .
The newly fattened premiums reflect the increasingly global marketing of some country funds , Mr. Porter suggests .
Unlike many U.S. investors , those in Asia or Europe seeking foreign-stock exposure may be less resistant to paying higher prices for country funds .
``There may be an international viewpoint cast on the funds listed here , '' Mr. Porter says .
Nonetheless , plenty of U.S. analysts and money managers are aghast at the lofty trading levels of some country funds .
They argue that U.S. investors often can buy American depositary receipts on the big stocks in many funds ; these so-called ADRs represent shares of foreign companies traded in the U.S .
That way investors can essentially buy the funds without paying the premium .
For people who insist on jumping in now to buy the funds , Newgate 's Mr. Foot says : '' The only advice I have for these folks is that those who come to the party late had better be ready to leave quickly . ''
The U.S. and Soviet Union are holding technical talks about possible repayment by Moscow of $ 188 million in pre-Communist Russian debts owed to the U.S. government , the State Department said .
If the debts are repaid , it could clear the way for Soviet bonds to be sold in the U.S. However , after two meetings with the Soviets , a State Department spokesman said that it 's '' too early to say '' whether that will happen .
Coincident with the talks , the State Department said it has permitted a Soviet bank to open a New York branch .
The branch of the Bank for Foreign Economic Affairs was approved last spring and opened in July .
But a Soviet bank here would be crippled unless Moscow found a way to settle the $ 188 million debt , which was lent to the country 's short-lived democratic Kerensky government before the Communists seized power in 1917 .
Under a 1934 law , the Johnson Debt Default Act , as amended , it 's illegal for Americans to extend credit to countries in default to the U.S. government , unless they are members of the World Bank and International Monetary Fund .
The U.S.S.R. belongs to neither organization .
Moscow has settled pre-1917 debts with other countries in recent years at less than face value .
The State Department stressed the pre-1933 debts as the key to satisfying the Johnson Act .
But the Soviets might still face legal obstacles to raising money in the U.S. until they settle hundreds of millions of dollars in additional debt still outstanding from the World War II lend-lease program .
In another reflection that the growth of the economy is leveling off , the government said that orders for manufactured goods and spending on construction failed to rise in September .
Meanwhile , the National Association of Purchasing Management said its latest survey indicated that the manufacturing economy contracted in October for the sixth consecutive month .
Its index inched up to 47.6 % in October from 46 % in September .
Any reading below 50 % suggests the manufacturing sector is generally declining .
The purchasing managers , however , also said that orders turned up in October after four months of decline .
Factories booked $ 236.74 billion in orders in September , nearly the same as the $ 236.79 billion in August , the Commerce Department said .
If not for a 59.6 % surge in orders for capital goods by defense contractors , factory orders would have fallen 2.1 % .
In a separate report , the department said construction spending ran at an annual rate of $ 415.6 billion , not significantly different from the $ 415.8 billion reported for August .
Private construction spending was down , but government building activity was up .
The figures in both reports were adjusted to remove the effects of usual seasonal patterns , but were n't adjusted for inflation .
Kenneth Mayland , economist for Society Corp. , a Cleveland bank , said demand for exports of factory goods is beginning to taper off .
At the same time , the drop in interest rates since the spring has failed to revive the residential construction industry .
``What sector is stepping forward to pick up the slack ? '' he asked. '' I draw a blank . ''
By most measures , the nation 's industrial sector is now growing very slowly -- if at all .
Factory payrolls fell in September .
So did the Federal Reserve Board 's industrial-production index .
Yet many economists are n't predicting that the economy is about to slip into recession .
They cite a lack of '' imbalances '' that provide early warning signals of a downturn .
Inventories are closely watched for such clues , for instance .
Economists say a buildup in inventories can provoke cutbacks in production that can lead to a recession .
But yesterday 's factory orders report had good news on that front : it said factory inventories fell 0.1 % in September , the first decline since February 1987 .
``This conforms to the `soft landing ' scenario , '' said Elliott Platt , an economist at Donaldson , Lufkin & Jenrette Securities Corp. '' I do n't see any signs that inventories are excessive. '' A soft landing is an economic slowdown that eases inflation without leading to a recession .
The department said orders for nondurable goods -- those intended to last fewer than three years -- fell 0.3 % in September to $ 109.73 billion after climbing 0.9 % the month before .
Orders for durable goods were up 0.2 % to $ 127.03 billion after rising 3.9 % the month before .
The department previously estimated that durable-goods orders fell 0.1 % in September .
Factory shipments fell 1.6 % to $ 234.4 billion after rising 5.4 % in August .
Shipments have been relatively level since January , the Commerce Department noted .
Manufacturers ' backlogs of unfilled orders rose 0.5 % in September to $ 497.34 billion , helped by strength in the defense capital goods sector .
Excluding these orders , backlogs declined 0.3 % .
In its construction spending report , the Commerce Department said residential construction , which accounts for nearly half of all construction spending , was off 0.9 % in September to an annual rate of $ 191.9 billion .
David Berson , economist for the Mortgage Bankers Association , predicted the drop in interest rates eventually will boost spending on single-family homes , but probably not until early next year .
Spending on private , nonresidential construction was off 2.6 % to an annual rate of $ 99.1 billion with no sector showing strength .
Government construction spending rose 4.3 % to $ 88 billion .
After adjusting for inflation , the Commerce Department said construction spending did n't change in September .
For the first nine months of the year , total construction spending ran about 2 % above last year 's level .
The government 's construction spending figures contrast with a report issued earlier in the week by McGraw-Hill Inc. 's F.W. Dodge Group .
Dodge reported an 8 % increase in construction contracts awarded in September .
The goverment counts money as it is spent ; Dodge counts contracts when they are awarded .
The government includes money spent on residential renovation ; Dodge does n't .
Although the purchasing managers ' index continues to indicate a slowing economy , it is n't signaling an imminent recession , said Robert Bretz , chairman of the association 's survey committee and director of materials management at Pitney Bowes Inc. , Stamford , Conn .
He said the index would have to be in the low 40 % range for several months to be considered a forecast of recession .
The report offered new evidence that the nation 's export growth , though still continuing , may be slowing .
Only 19 % of the purchasing managers reported better export orders in October , down from 27 % in September .
And 8 % said export orders were down last month , compared with 6 % the month before .
The purhasing managers ' report also added evidence that inflation is under control .
For the fifth consecutive month , purchasing managers said prices for the goods they purchased fell .
The decline was even steeper than in September .
They also said that vendors were delivering goods more quickly in October than they had for each of the five previous months .
Economists consider that a sign that inflationary pressures are abating .
When demand is stronger than suppliers can handle and delivery times lengthen , prices tend to rise .
The purchasing managers ' report is based on data provided by more than 250 purchasing executives .
Each of the survey 's indicators gauges the difference between the number of purchasers reporting improvement in a particular area and the number reporting a worsening .
For the first time , the October survey polled members on imports .
It found that of the 73 % who import , 10 % said they imported more in October and 12 % said they imported less than the previous month .
While acknowledging one month 's figures do n't prove a trend , Mr. Bretz said , '' It does lead you to suspect imports are going down , or at least not increasing that much . ''
Items listed as being in short supply numbered only about a dozen , but they included one newcomer : milk and milk powder. '' It 's an odd thing to put on the list , '' Mr. Bretz noted .
He said that for the second month in a row , food processors reported a shortage of nonfat dry milk .
They blamed increased demand for dairy products at a time of exceptionally high U.S. exports of dry milk , coupled with very low import quotas .
Pamela Sebastian in New York contributed to this article .
Here are the Commerce Department 's figures for construction spending in billions of dollars at seasonally adjusted annual rates .
Here are the Commerce Department 's latest figures for manufacturers in billions of dollars , seasonally adjusted .
Judging from the Americana in Haruki Murakami 's '' A Wild Sheep Chase '' ( Kodansha , 320 pages , $ 18.95 ) , baby boomers on both sides of the Pacific have a lot in common .
Although set in Japan , the novel 's texture is almost entirely Western , especially American .
Characters drink Salty Dogs , whistle '' Johnny B. Goode '' and watch Bugs Bunny reruns .
They read Mickey Spillane and talk about Groucho and Harpo .
They worry about their careers , drink too much and suffer through broken marriages and desultory affairs .
This is Japan ?
For an American reader , part of the charm of this engaging novel should come in recognizing that Japan is n't the buttoned-down society of contemporary American lore .
It 's also refreshing to read a Japanese author who clearly does n't belong to the self-aggrandizing '' we-Japanese '' school of writers who perpetuate the notion of the unique Japanese , unfathomable by outsiders .
If '' A Wild Sheep Chase '' carries an implicit message for international relations , it 's that the Japanese are more like us than most of us think .
That 's not to say that the nutty plot of '' A Wild Sheep Chase '' is rooted in reality .
It 's imaginative and often funny .
A disaffected , hard-drinking , nearly-30 hero sets off for snow country in search of an elusive sheep with a star on its back at the behest of a sinister , erudite mobster with a Stanford degree .
He has in tow his prescient girlfriend , whose sassy retorts mark her as anything but a docile butterfly .
Along the way , he meets a solicitous Christian chauffeur who offers the hero God 's phone number ; and the Sheep Man , a sweet , roughhewn figure who wears -- what else -- a sheepskin .
The 40-year-old Mr. Murakami is a publishing sensation in Japan .
A more recent novel , '' Norwegian Wood '' ( every Japanese under 40 seems to be fluent in Beatles lyrics ) , has sold more than four million copies since Kodansha published it in 1987 .
But he is just one of several youthful writers -- Tokyo 's brat pack -- who are dominating the best-seller charts in Japan .
Their books are written in idiomatic , contemporary language and usually carry hefty dashes of Americana .
In Robert Whiting 's '' You Got ta Have Wa '' ( Macmillan , 339 pages , $ 17.95 ) , the Beatles give way to baseball , in the Nipponese version we would be hard put to call a '' game. '' As Mr. Whiting describes it , Nipponese baseball is a '' mirror of Japan 's fabled virtues of hard work and harmony. '' '' Wa '' is Japanese for '' team spirit '' and Japanese ballplayers have miles and miles of it .
A player 's commitment to practice and team image is as important as his batting average .
Polls once named Tokyo Giants star Tatsunori Hara , a '' humble , uncomplaining , obedient soul , '' as the male symbol of Japan .
But other than the fact that besuboru is played with a ball and a bat , it 's unrecognizable : Fans politely return foul balls to stadium ushers ; the strike zone expands depending on the size of the hitter ; ties are permitted -- even welcomed -- since they honorably sidestep the shame of defeat ; players must abide by strict rules of conduct even in their personal lives -- players for the Tokyo Giants , for example , must always wear ties when on the road .
``You Got ta Have Wa '' is the often amusing chronicle of how American ballplayers , rationed to two per team , fare in Japan .
Despite the enormous sums of money they 're paid to stand up at a Japanese plate , a good number decide it 's not worth it and run for home .
``Funny Business '' ( Soho , 228 pages , $ 17.95 ) by Gary Katzenstein is anything but .
It 's the petulant complaint of an impudent American whom Sony hosted for a year while he was on a Luce Fellowship in Tokyo -- to the regret of both parties .
In sometimes amusing , more often supercilious , even vicious passages , Mr. Katzenstein describes how Sony invades even the most mundane aspects of its workers ' lives -- at the regimented office , where employees are assigned lunch partners -- and at '' home '' in the austere company dormitory run by a prying caretaker .
Some of his observations about Japanese management style are on the mark .
It 's probably true that many salarymen put in unproductive overtime just for the sake of solidarity , that the system is so hierarchical that only the assistant manager can talk to the manager and the manager to the general manager , and that Sony was chary of letting a young , short-term American employee take on any responsibility .
All of this must have been enormously frustrating to Mr. Katzenstein , who went to Sony with degrees in business and computer science and was raring to invent another Walkman .
But Sony ultimately took a lesson from the American management books and fired Mr. Katzenstein , after he committed the social crime of making an appointment to see the venerable Akio Morita , founder of Sony .
It 's a shame their meeting never took place .
Mr. Katzenstein certainly would have learned something , and it 's even possible Mr. Morita would have too .
Ms. Kirkpatrick , the Journal 's deputy editorial features editor , worked in Tokyo for three years .
More and more corners of the globe are becoming free of tobacco smoke .
In Singapore , a new law requires smokers to put out their cigarettes before entering restaurants , department stores and sports centers or face a $ 250 fine .
Discos and private clubs are exempt from the ban , and smoking will be permitted in bars except during meal hours , an official said .
Singapore already bans smoking in all theaters , buses , public elevators , hospitals and fast-food restaurants .
In Malaysia , Siti Zaharah Sulaiman , a deputy minister in the prime minister 's office , launched a '' No-Smoking Week '' at the Mara Institute of Technology near Kuala Lumpur and urged other schools to ban on-campus smoking .
South Korea has different concerns .
In Seoul , officials began visiting about 26 , 000 cigarette stalls to remove illegal posters and signboards advertising imported cigarettes .
South Korea has opened its market to foreign cigarettes but restricts advertising to designated places .
A marketing study indicates that Hong Kong consumers are the most materialistic in the 14 major markets where the survey was carried out .
The study by the Backer Spielvogel Bates ad agency also found that the colony 's consumers feel more pressured than those in any of the other surveyed markets , which include the U.S. and Japan .
The survey found that nearly half of Hong Kong consumers espouse what it identified as materialistic values , compared with about one-third in Japan and the U.S .
More than three in five said they are under a great deal of stress most of the time , compared with less than one in two U.S. consumers and one in four in Japan .
The Thai cabinet endorsed Finance Minister Pramual Sabhavasu 's proposal to build a $ 19 million conference center for a joint meeting of the World Bank and International Monetary Fund two years from now .
The meeting , which is expected to draw 20 , 000 to Bangkok , was going to be held at the Central Plaza Hotel , but the government balked at the hotel 's conditions for undertaking necessary expansion .
A major concern about the current plan is whether the new center can be built in such a short time .
Yasser Arafat has written to the chairman of the International Olympic Committee asking him to back a Palestinian bid to join the committee , the Palestine Liberation Organization news agency WAFA said .
An official of the Palestinian Olympic Committee said the committee first applied for membership in 1979 and renewed its application in August of this year .
The PLO in recent months has been trying to join international organizations but failed earlier this year to win membership in the World Health Organization and the World Tourism Organization .
A Beijing food-shop assistant has become the first mainland Chinese to get AIDS through sex , the People 's Daily said .
It said the man , whom it did not name , had been found to have the disease after hospital tests .
Once the disease was confirmed , all the man 's associates and family were tested , but none have so far been found to have AIDS , the newspaper said .
The man had for a long time had '' a chaotic sex life , '' including relations with foreign men , the newspaper said .
The Polish government increased home electricity charges by 150 % and doubled gas prices .
The official news agency PAP said the increases were intended to bring unrealistically low energy charges into line with production costs and compensate for a rise in coal prices .
In happier news , South Korea , in establishing diplomatic ties with Poland yesterday , announced $ 450 million in loans to the financially strapped Warsaw government .
In a victory for environmentalists , Hungary 's parliament terminated a multibillion-dollar River Danube dam being built by Austrian firms .
The Nagymaros dam was designed to be twinned with another dam , now nearly complete , 100 miles upstream in Czechoslovakia .
In ending Hungary 's part of the project , Parliament authorized Prime Minister Miklos Nemeth to modify a 1977 agreement with Czechoslovakia , which still wants the dam to be built .
Mr. Nemeth said in parliament that Czechoslovakia and Hungary would suffer environmental damage if the twin dams were built as planned .
Czechoslovakia said in May it could seek $ 2 billion from Hungary if the twindam contract were broken .
The Czech dam ca n't be operated solely at peak periods without the Nagymaros project .
A painting by August Strindberg set a Scandinavian price record when it sold at auction in Stockholm for $ 2.44 million. '' Lighthouse II '' was painted in oils by the playwright in 1901 . . . After years of decline , weddings in France showed a 2.2 % upturn last year , with 6 , 000 more couples exchanging rings in 1988 than in the previous year , the national statistics office said .
But the number of weddings last year -- 271 , 124 -- was still well below the 400 , 000 registered in 1972 , the last year of increasing marriages .
BRAMALEA Ltd. said it agreed to issue 100 million Canadian dollars ( US $ 85.1 million ) of 10.5 % senior debentures due Nov. 30 , 1999 , together with 100 , 000 bond purchase warrants .
The Toronto-based real estate concern said each bond warrant entitles the holder to buy C $ 1 , 000 principal amount of debentures at par plus accrued interest to the date of purchase .
The warrants expire Nov. 30 , 1990 .
The issue will be swapped into fixed-rate U.S. dollars at a rate the company said is less than 9 % ; a spokesman declined to elaborate .
Lead underwriters for the issue are Scotia McLeod Inc. and RBC Dominion Securities Inc. , both Toronto-based investment dealers .
Bramalea said it expects to complete the issue by the end of the month .
As an actor , Charles Lane is n't the inheritor of Charlie Chaplin 's spirit .
Steve Martin has already laid his claim to that .
But it is Mr. Lane , as movie director , producer and writer , who has been obsessed with refitting Chaplin 's Little Tramp in a contemporary way .
In 1976 , as a film student at the Purchase campus of the State University of New York , Mr. Lane shot '' A Place in Time , '' a 36-minute black-and-white film about a sketch artist , a man of the streets .
Now , 13 years later , Mr. Lane has revived his Artist in a full-length movie called '' Sidewalk Stories , '' a poignant piece of work about a modern-day tramp .
Of course , if the film contained dialogue , Mr. Lane 's Artist would be called a homeless person .
So would the Little Tramp , for that matter .
I say '' contained dialogue '' because '' Sidewalk Stories '' is n't really silent at all .
Composer Marc Marder , a college friend of Mr. Lane 's who earns his living playing the double bass in classical music ensembles , has prepared an exciting , eclectic score that tells you what the characters are thinking and feeling far more precisely than intertitles , or even words , would .
Much of Mr. Lane 's film takes a highly romanticized view of life on the streets ( though probably no more romanticized than Mr. Chaplin 's notion of the Tramp as the good-hearted free spirit ) .
Filmed in lovely black and white by Bill Dill , the New York streets of '' Sidewalk Stories '' seem benign .
On Wall Street men and women walk with great purpose , noticing one another only when they jostle for cabs .
The Artist hangs out in Greenwich Village , on a strip of Sixth Avenue populated by jugglers , magicians and other good-natured hustlers. ( This clearly is not real life : no crack dealers , no dead-eyed men selling four-year-old copies of Cosmopolitan , no one curled up in a cardboard box . )
The Artist has his routine .
He spends his days sketching passers-by , or trying to .
At night he returns to the condemned building he calls home .
His life , including his skirmishes with a competing sketch artist , seems carefree .
He is his own man .
Then , just as the Tramp is given a blind girl to cure in '' City Lights , '' the Artist is put in charge of returning a two-year-old waif ( Nicole Alysia ) , whose father has been murdered by thugs , to her mother .
This cute child turns out to be a blessing and a curse .
She gives the Artist a sense of purpose , but also alerts him to the serious inadequacy of his vagrant life .
The beds at the Bowery Mission seem far drearier when he has to tuck a little girl into one of them at night .
To further load the stakes , Mr. Lane dreamed up a highly improbable romance for the Artist , with a young woman who owns her own children 's shop and who lives in an expensive high-rise apartment building .
This story line might resonate more strongly if Mr. Lane had as strong a presence in front of the camera as he does behind it .
Mr. Lane 's final purpose is n't to glamorize the Artist 's vagabond existence .
He has a point he wants to make , and he makes it , with a great deal of force .
The movie ends with sound , the sound of street people talking , and there is n't anything whimsical or enviable in those rough , beaten voices .
The French film maker Claude Chabrol has managed another kind of weird achievement with his '' Story of Women. '' He has made a harsh , brilliant picture -- one that 's captivating -- about a character who , viewed from the most sympathetic angle , would seem disagreeable .
Yet this woman , Marie-Louise Giraud , carries historical significance , both as one of the last women to be executed in France and as a symbol of the Vichy government 's hypocrisy .
While Vichy collaborated with the Germans during World War II in the deaths of thousands of Resistance fighters and Jews , its officials needed a diversionary symbolic traitor .
Marie-Louise , a small-time abortionist , was their woman .
She became an abortionist accidentally , and continued because it enabled her to buy jam , cocoa and other war-rationed goodies .
She was untrained and , in one botched job killed a client .
Her remorse was shallow and brief .
Although she was kind and playful to her children , she was dreadful to her war-damaged husband ; she openly brought her lover into their home .
As presented by Mr. Chabrol , and played with thin-lipped intensity by Isabelle Huppert , Marie-Louise ( called Marie Latour in the film ) was not a nice person .
But she did n't deserve to have her head chopped off .
There is very little to recommend '' Old Gringo , '' a confused rendering of the Carlos Fuentes novel of the Mexican Revolution .
Most of the picture is taken up with endless scenes of many people either fighting or eating and drinking to celebrate victory .
I mention the picture only because many bad movies have a bright spot , and this one has Gregory Peck , in a marvelously loose and energetic portrayal of an old man who wants to die the way he wants to die .
Video Tip : Before seeing '' Sidewalk Stories , '' take a look at '' City Lights , '' Chaplin 's Tramp at his finest .
Boeing Co. said it is discussing plans with three of its regular Japanese suppliers to possibly help build a larger version of its popular 767 twin-jet .
The discussions are still in preliminary stages , and the specific details have n't been worked out between the Seattle aerospace company and Kawasaki Heavy Industries Ltd. , Mitsubishi Heavy Industries Ltd. and Fuji Heavy Industries Ltd .
The three Japanese companies build the body sections of the 767 , accounting for a combined 15 % of the aircraft .
Japanese press reports have speculated that the Japanese contribution could rise to between 20 % and 25 % under the new program .
If Boeing goes ahead with the larger 767 , the plane could hit the market in the mid-1990s .
This is the year the negative ad , for years a secondary presence in most political campaigns , became the main event .
The irony is that the attack commercial , after getting a boost in last year 's presidential campaign , has come of age in an off-off election year with only a few contests scattered across the country .
But in the three leading political contests of 1989 , the negative ads have reached new levels of hostility , raising fears that this kind of mudslinging , empty of significant issues , is ushering in a new era of campaigns without content .
``Now , '' says Joseph Napolitan , a pioneer in political television , '' the idea is to attack first , last and always . ''
A trend that started with the first stirrings of politics , accelerated with the dawn of the television age and became a sometimes-tawdry art form in 1988 , has reached an entirely new stage .
``To get people 's attention these days , '' says Douglas Bailey , a political consultant , '' your TV ad needs to be bold and entertaining , and , more often than not , that means confrontational .
And , unlike a few years ago , you do n't even have to worry whether the ad is truthful . ''
In 1989 , as often as not , the principal fights in the major campaigns are prompted by the ads themselves .
Take a look , then , at the main attack commercials that set the tone for Tuesday 's elections in New York City , New Jersey and Virginia :
New York City : The screen fills with a small , tight facial shot of David Dinkins , Democratic candidate for mayor of New York City. '' David Dinkins failed to file his income taxes for four straight years , '' says a disembodied male voice .
And then this television commercial , paid for by Republican Rudolph Giuliani 's campaign and produced by Roger Ailes , the master of negative TV ads , really gets down to business .
Mr. Dinkins , the ad charges , also failed to report his campaign contributions accurately , hid his links to a failing insurance company and paid a convicted kidnapper '' through a phony organization with no members , no receipts and no office . ''
``David Dinkins , '' says the kicker , '' Why does he always wait until he 's caught ? ''
``Nasty innuendoes , '' says John Siegal , Mr. Dinkins 's issues director , '' designed to prosecute a case of political corruption that simply does n't exist . ''
Stung by the Giuliani ads , Mr. Dinkins 's TV consultants , Robert Shrum and David Doak , finally unleashed a negative ad of their own .
The screen shows two distorted , unrecognizable photos , presumably of two politicians. '' Compare two candidates for mayor , '' says the announcer. '' One says he 's for banning cop-killer bullets .
The other has opposed a ban on cop-killer bullets .
One claims he 's pro-choice .
The other has opposed a woman 's right to choose . ''
``Funny thing , '' says the kicker , '' both these candidates are named Rudolph Giuliani . ''
Who 's telling the truth ?
Everybody -- and nobody .
It 's a classic situation of ads that are true but not always fully accurate .
Mr. Dinkins did fail to file his income taxes for four years , but he insists he voluntarily admitted the '' oversight '' when he was being considered for a city job .
He was on the board of an insurance company with financial problems , but he insists he made no secret of it .
The city 's Campaign Finance Board has refused to pay Mr. Dinkins $ 95 , 142 in matching funds because his campaign records are incomplete .
The campaign has blamed these reporting problems on computer errors .
And , says Mr. Dinkins , he did n't know the man his campaign paid for a get-out-the-vote effort had been convicted of kidnapping .
But , say Mr. Dinkins 's managers , he did have an office and his organization did have members .
Mr. Giuliani 's campaign chairman , Peter Powers , says the Dinkins ad is '' deceptive. '' The other side , he argues , '' knows Giuliani has always been pro-choice , even though he has personal reservations .
They know he is generally opposed to cop-killer bullets , but that he had some reservations about the language in the legislation . ''
Virginia : Democratic Lt. Gov. Douglas Wilder opened his gubernatorial battle with Republican Marshall Coleman with an abortion commercial produced by Frank Greer that analysts of every political persuasion agree was a tour de force .
Against a shot of Monticello superimposed on an American flag , an announcer talks about the '' strong tradition of freedom and individual liberty '' that Virginians have nurtured for generations .
Then , just as an image of the statue of Thomas Jefferson dissolves from the screen , the announcer continues : '' On the issue of abortion , Marshall Coleman wants to take away your right to choose and give it to the politicians . ''
That commercial -- which said Mr. Coleman wanted to take away the right of abortion '' even in cases of rape and incest , '' a charge Mr. Coleman denies -- changed the dynamics of the campaign , transforming it , at least in part , into a referendum on abortion .
The ad prompted Mr. Coleman , the former Virginia attorney general , to launch a series of advertisements created by Bob Goodman and designed to shake Mr. Wilder 's support among the very women who were attracted by the abortion ad .
The Coleman counterattack featured a close-up of a young woman in shadows and the ad suggested that she was recalling an unpleasant courtroom ordeal .
A voice says , '' C'mon , now , do n't you have boyfriends ? '' Then an announcer interjects : '' It was Douglas Wilder who introduced a bill to force rape victims age 13 and younger to be interrogated about their private lives by lawyers for accused rapists .
So the next time Mr. Wilder talks about the rights of women , ask him about this law he tried to pass . ''
Mr. Wilder did introduce such legislation 17 years ago , but he did so at the request of a constituent , a common legislative technique used by lawmakers .
The legislation itself noted that it was introduced '' by request , '' and in 1983 Mr. Wilder introduced a bill to protect rape victims from unfounded interrogation .
``People have grown tired of these ads and Coleman has gotten the stigma of being a negative campaigner , '' says Mark Rozell , a political scientist at Mary Washington College. '' Wilder has managed to get across the idea that Coleman will say anything to get elected governor and -- more important -- has been able to put the onus for all the negative campaigning on Coleman . ''
Mr. Coleman said this week that he would devote the remainder of the political season to positive campaigning , but the truce lasted only hours .
By Tuesday night , television stations were carrying new ads featuring Mr. Coleman himself raising questions about Mr. Wilder 's sensitivity to rape victims .
New Jersey : The attacks began when Democratic Rep. James Florio aired an ad featuring a drawing of Pinocchio and a photograph of Mr. Florio 's rival , Republican Rep. Jim Courter. '' Remember Pinocchio ? '' says a female voice. '' Consider Jim Courter . ''
And then this commercial , produced by Bob Squier , gets down to its own mean and dirty business .
Pictures of rusted oil drums swim into focus , and the female voice purrs , '' That hazardous waste on his { Mr .
Courter 's } property -- the neighbors are suing for consumer fraud. '' And the nose on Mr. Courter 's face grows .
The only fraud involved , cry Mr. Courter 's partisans , is the Florio commercial itself , and so the Courter campaign has responded with its own Pinocchio commercial , produced by Mr. Ailes .
In this one , the screen fills with photographs of both candidates. '' Who 's really lying ? '' asks a female voice. '' Florio 's lying , '' the voice goes on , because '' the barrel on Courter 's land . . . contained heating oil , was cleaned up and caused no pollution . ''
Mr. Courter 's long nose shrinks while Mr. Florio 's grows .
Who 's telling the truth ?
Stephen Salmore , a political scientist at New Jersey 's Eagleton Institute , says it 's another example of an ad that 's true but not fully accurate .
Barrels were dumped on the Courter property , a complaint was made , but there is no evidence the barrels were a serious threat to the environment .
Even so , according to Mr. Salmore , the ad was '' devastating '' because it raised questions about Mr. Courter 's credibility .
But it 's building on a long tradition .
In 1966 , on route to a re-election rout of Democrat Frank O'Connor , GOP Gov. Nelson Rockefeller of New York appeared in person saying , '' If you want to keep the crime rates high , O'Connor is your man . ''
A seat on the Chicago Board of Trade was sold for $ 350 , 000 , down $ 16 , 000 from the previous sale last Friday .
Seats currently are quoted at $ 331 , 000 , bid , and $ 350 , 000 , asked .
The record price for a full membership on the exchange is $ 550 , 000 , set Aug. 31 , 1987 .
Japanese investment in Southeast Asia is propelling the region toward economic integration .
Interviews with analysts and business people in the U.S. suggest that Japanese capital may produce the economic cooperation that Southeast Asian politicians have pursued in fits and starts for decades .
But Japan 's power in the region also is sparking fears of domination and posing fresh policy questions .
The flow of Japanese funds has set in motion '' a process whereby these economies will be knitted together by the great Japanese investment machine , '' says Robert Hormats , vice chairman of Goldman Sachs International Corp .
In the past five years , Japanese companies have tripled their commitments in Asia to $ 5.57 billion .
In Thailand , for example , the government 's Board of Investment approved $ 705.6 million of Japanese investment in 1988 , 10 times the U.S. investment figure for the year .
Japan 's commitment in Southeast Asia also includes steep increases in foreign assistance and trade .
Asia 's other cash-rich countries are following Japan 's lead and pumping capital into the region .
In Taiwan and South Korea , rising wages are forcing manufacturers to seek other overseas sites for labor-intensive production .
These nations , known as Asia 's '' little tigers , '' also are contributing to Southeast Asia 's integration , but their influence will remain subordinate to Japan 's .
For recipient countries such as Thailand and Malaysia , the investment will provide needed jobs and spur growth .
But Asian nations ' harsh memories of their military domination by Japan in the early part of this century make them fearful of falling under Japanese economic hegemony now .
Because of budget constraints in Washington , the U.S. encourages Japan to share economic burdens in the region .
But it resists yielding political ground .
In the coming decade , analysts say , U.S.-Japanese relations will be tested as Tokyo comes to terms with its new status as the region 's economic behemoth .
Japan 's swelling investment in Southeast Asia is part of its economic evolution .
In the past decade , Japanese manufacturers concentrated on domestic production for export .
In the 1990s , spurred by rising labor costs and the strong yen , these companies will increasingly turn themselves into multinationals with plants around the world .
To capture the investment , Southeast Asian nations will move to accommodate Japanese business .
These nations ' internal decisions '' will be made in a way not to offend their largest aid donor , largest private investor and largest lender , '' says Richard Drobnick , director of the international business and research program at the University of Southern California 's Graduate School of Business .
Japanese money will help turn Southeast Asia into a more cohesive economic region .
But , analysts say , Asian cooperation is n't likely to parallel the European Common Market approach .
Rather , Japanese investment will spur integration of certain sectors , says Kent Calder , a specialist in East Asian economies at the Woodrow Wilson School for Public and Internatonal Affairs at Princeton University .
In electronics , for example , a Japanese company might make television picture tubes in Japan , assemble the sets in Malaysia and export them to Indonesia .
``The effect will be to pull Asia together not as a common market but as an integrated production zone , '' says Goldman Sachs 's Mr. Hormats .
Countries in the region also are beginning to consider a framework for closer economic and political ties .
The economic and foreign ministers of 12 Asian and Pacific nations will meet in Australia next week to discuss global trade issues as well as regional matters such as transportation and telecommunications .
Participants will include the U.S. , Australia , Canada , Japan , South Korea and New Zealand as well as the six members of the Association of Southeast Asian Nations -- Thailand , Malaysia , Singapore , Indonesia , the Philippines and Brunei .
In addition , the U.S. this year offered its own plan for cooperation around the Pacific rim in a major speech by Secretary of State James Baker , following up a proposal made in January by Australian Prime Minister Bob Hawke .
The Baker proposal reasserts Washington 's intention to continue playing a leading political role in the region. '' In Asia , as in Europe , a new order is taking shape , '' Mr. Baker said. '' The U.S. , with its regional friends , must play a crucial role in designing its architecture . ''
But maintaining U.S. influence will be difficult in the face of Japanese dominance in the region .
Japan not only outstrips the U.S. in investment flows but also outranks it in trade with most Southeast Asian countries ( although the U.S. remains the leading trade partner for all of Asia ) .
Moreover , the Japanese government , now the world 's largest aid donor , is pumping far more assistance into the region than the U.S. is .
While U.S. officials voice optimism about Japan 's enlarged role in Asia , they also convey an undertone of caution. '' There 's an understanding on the part of the U.S. that Japan has to expand its functions '' in Asia , says J. Michael Farren , undersecretary of commerce for trade. '' If they approach it with a benevolent , altruistic attitude , there will be a net gain for everyone . ''
Some Asian nations are apprehensive about Washington 's demand that Tokyo step up its military spending to ease the U.S. security burden in the region .
The issue is further complicated by uncertainty over the future of the U.S. 's leases on military bases in the Philippines and by a possible U.S. troop reduction in South Korea .
Many Asians regard a U.S. presence as a desirable counterweight to Japanese influence .
``No one wants the U.S. to pick up its marbles and go home , '' Mr. Hormats says .
For their part , Taiwan and South Korea are expected to step up their own investments in the next decade to try to slow the Japanese juggernaut .
``They do n't want Japan to monopolize the region and sew it up , '' says Chong-sik Lee , professor of East Asian politics at the University of Pennsylvania .
Cathryn Rice could hardly believe her eyes .
While giving the Comprehensive Test of Basic Skills to ninth graders at Greenville High School last March 16 , she spotted a student looking at crib sheets .
She had seen cheating before , but these notes were uncanny. '' A stockbroker is an example of a profession in trade and finance. . . . At the end of World War II , Germany surrendered before Japan. . . . The Senate-House conference committee is used when a bill is passed by the House and Senate in different forms . ''
Virtually word for word , the notes matched questions and answers on the social-studies section of the test the student was taking .
In fact , the student had the answers to almost all of the 40 questions in that section .
The student surrendered the notes , but not without a protest. '' My teacher said it was OK for me to use the notes on the test , '' he said .
The teacher in question was Nancy Yeargin -- considered by many students and parents to be one of the best at the school .
Confronted , Mrs. Yeargin admitted she had given the questions and answers two days before the examination to two low-ability geography classes .
She had gone so far as to display the questions on an overhead projector and underline the answers .
Mrs. Yeargin was fired and prosecuted under an unusual South Carolina law that makes it a crime to breach test security .
In September , she pleaded guilty and paid a $ 500 fine .
Her alternative was 90 days in jail .
Her story is partly one of personal downfall .
She was an unstinting teacher who won laurels and inspired students , but she will probably never teach again .
In her wake she left the bitterness and anger of a principal who was her friend and now calls her a betrayer ; of colleagues who say she brought them shame ; of students and parents who defended her and insist she was treated harshly ; and of school-district officials stunned that despite the bald-faced nature of her actions , she became something of a local martyr .
Mrs. Yeargin 's case also casts some light on the dark side of school reform , where pressures on teachers are growing and where high-stakes testing has enhanced the temptation to cheat .
The 1987 statute Mrs. Yeargin violated was designed to enforce provisions of South Carolina 's school-improvement laws .
Prosecutors alleged that she was trying to bolster students ' scores to win a bonus under the state 's 1984 Education Improvement Act .
The bonus depended on her ability to produce higher student-test scores .
``There is incredible pressure on school systems and teachers to raise test scores , '' says Walt Haney , an education professor and testing specialist at Boston College. '' So efforts to beat the tests are also on the rise. '' And most disturbing , it is educators , not students , who are blamed for much of the wrongdoing .
A 50-state study released in September by Friends for Education , an Albuquerque , N.M. , school-research group , concluded that '' outright cheating by American educators '' is '' common. '' The group says standardized achievement test scores are greatly inflated because teachers often '' teach the test '' as Mrs. Yeargin did , although most are never caught .
Evidence of widespread cheating has surfaced in several states in the last year or so .
California 's education department suspects adult responsibility for erasures at 40 schools that changed wrong answers to right ones on a statewide test .
After numerous occurrences of questionable teacher help to students , Texas is revising its security practices .
And sales of test-coaching booklets for classroom instruction are booming .
These materials , including Macmillan/McGraw-Hill School Publishing Co. 's Scoring High and Learning Materials -- are nothing short of sophisticated crib sheets , according to some recent academic research .
By using them , teachers -- with administrative blessing -- telegraph to students beforehand the precise areas on which a test will concentrate , and sometimes give away a few exact questions and answers .
Use of Scoring High is widespread in South Carolina and common in Greenville County , Mrs. Yeargin 's school district .
Experts say there is n't another state in the country where tests mean as much as they do in South Carolina .
Under the state 's Education Improvement Act , low test scores can block students ' promotions or force entire districts into wrenching , state-supervised '' interventions '' that can mean firings .
High test scores , on the other hand , bring recognition and extra money -- a new computer lab for a school , grants for special projects , a bonus for the superintendent .
And South Carolina says it is getting results .
Since the reforms went in place , for example , no state has posted a higher rate of improvement on the Scholastic Aptitude Test than South Carolina , although the state still posts the lowest average score of the about 21 states who use the SAT as the primary college entrance examination .
Critics say South Carolina is paying a price by stressing improved test scores so much .
Friends of Education rates South Carolina one of the worst seven states in its study on academic cheating .
Says the organization 's founder , John Cannell , prosecuting Mrs. Yeargin is '' a way for administrators to protect themselves and look like they take cheating seriously , when in fact they do n't take it seriously at all . ''
Paul Sandifer , director of testing for the South Carolina department of education , says Mr. Cannell 's allegations of cheating '' are purely without foundation , '' and based on unfair inferences .
Partly because of worries about potential abuse , however , he says the state will begin keeping closer track of achievement-test preparation booklets next spring .
South Carolina 's reforms were designed for schools like Greenville High School .
Standing on a shaded hill in a run-down area of this old textile city , the school has educated many of South Carolina 's best and brightest , including the state 's last two governors , Nobel Prize winning physicist Charles Townes and actress Joanne Woodward .
But by the early 1980s , its glory had faded like the yellow bricks of its broad facade .
``It was full of violence and gangs and kids cutting class , '' says Linda Ward , the school 's principal. '' Crime was awful , test scores were low , and there was no enrollment in honors programs . ''
Mrs. Ward took over in 1986 , becoming the school 's seventh principal in 15 years .
Her immediate predecessor suffered a nervous breakdown .
Prior to his term , a teacher bled to death in the halls , stabbed by a student .
Academically , Mrs. Ward says , the school was having trouble serving in harmony its two disparate , and evenly split , student groups : a privileged white elite from old monied neighborhoods and blacks , many of them poor , from run-down , inner city neighborhoods .
Mrs. Ward resolved to clean out '' deadwood '' in the school 's faculty and restore safety , and she also had some new factors working in her behalf .
One was statewide school reform , which raised overall educational funding and ushered in a new public spirit for school betterment .
Another was Nancy Yeargin , who came to Greenville in 1985 , full of the energy and ambitions that reformers wanted to reward .
``Being a teacher just became my life , '' says the 37-year-old Mrs. Yeargin , a teacher for 12 years before her dismissal. '' I loved the school , its history .
I even dreamt about school and new things to do with my students . ''
While Mrs. Ward fired and restructured staff and struggled to improve curriculum , Mrs. Yeargin worked 14-hour days and fast became a student favorite .
In 1986-87 and 1987-88 , she applied for and won bonus pay under the reform law .
Encouraged by Mrs. Ward , Mrs. Yeargin taught honor students in the state '' teacher cadet '' program , a reform creation designed to encourage good students to consider teaching as a career .
She won grant money for the school , advised cheerleaders , ran the pep club , proposed and taught a new '' Cultural Literacy '' class in Western Civilization and was chosen by the school PTA as '' Teacher of the Year . ''
``She was an inspirational lady ; she had it all together , '' says Laura Dobson , a freshman at the University of South Carolina who had Mrs. Yeargin in the teacher-cadet class last year .
She says that because of Mrs. Yeargin she gave up ambitions in architecture and is studying to become a teacher .
Mary Beth Marchand , a Greenville 11th grader , also says Mrs. Yeargin inspired her to go into education. '' She taught us more in Western Civilization than I 've ever learned in other classes , '' says Kelli Green , a Greenville senior .
In the classroom , students say , Mrs. Yeargin distinguished herself by varying teaching approaches -- forcing kids to pair up to complete classroom work or using college-bowl type competitions .
On weekends , she came to work to prepare study plans or sometimes , even to polish the furniture in her classroom .
``She just never gave it up , '' says Mary Marchand , Mary Beth 's mother. '' You 'd see her correcting homework in the stands at a football game . ''
Some fellow teachers , however , viewed Mrs. Yeargin as cocky and too yielding to students .
Mrs. Ward says she often defended her to colleagues who called her a grandstander .
Pressures began to build .
Friends told her she was pushing too hard .
Because of deteriorating hearing , she told colleagues she feared she might not be able to teach much longer .
Mrs. Yeargin 's extra work was also helping her earn points in the state 's incentive-bonus program .
But the most important source of points was student improvement on tests .
Huge gains by her students in 1987 and 1988 meant a total of $ 5 , 000 in bonuses over two years -- a meaningful addition to her annual salary of $ 23 , 000 .
Winning a bonus for a third year was n't that important to her , Mrs. Yeargin insists .
But others at Greenville High say she was eager to win -- if not for money , then for pride and recognition .
Mary Elizabeth Ariail , another social-studies teacher , says she believed Mrs. Yeargin wanted to keep her standing high so she could get a new job that would n't demand good hearing .
Indeed , Mrs. Yeargin was interested in a possible job with the state teacher cadet program .
Last March , after attending a teaching seminar in Washington , Mrs. Yeargin says she returned to Greenville two days before annual testing feeling that she had n't prepared her low-ability geography students adequately .
When test booklets were passed out 48 hours ahead of time , she says she copied questions in the social studies section and gave the answers to students .
Mrs. Yeargin admits she made a big mistake but insists her motives were correct. '' I was trying to help kids in an unfair testing situation , '' she says. '' Only five of the 40 questions were geography questions .
The rest were history , sociology , finance -- subjects they never had . ''
Mrs. Yeargin says that she also wanted to help lift Greenville High School 's overall test scores , usually near the bottom of 14 district high schools in rankings carried annually by local newspapers .
Mostly , she says , she wanted to prevent the damage to self-esteem that her low-ability students would suffer from doing badly on the test. '' These kids broke my heart , '' she says. '' A whole day goes by and no one even knows they 're alive .
They desperately needed somebody who showed they cared for them , who loved them .
The last thing they needed was another drag-down blow . ''
School officials and prosecutors say Mrs. Yeargin is lying .
They found students in an advanced class a year earlier who said she gave them similar help , although because the case was n't tried in court , this evidence was never presented publicly. '' That pretty much defeats any inkling that she was out to help the poor underprivileged child , '' says Joe Watson , the prosecutor in the case , who is also president of Greenville High School 's alumni association .
Mrs. Yeargin concedes that she went over the questions in the earlier class , adding : '' I wanted to help all '' students .
Mr. Watson says Mrs. Yeargin never complained to school officials that the standardized test was unfair. '' Do I have much sympathy for her ? '' Mr. Watson asks. '' Not really .
I believe in the system .
I believe you have to use the system to change it .
What she did was like taking the law into your own hands . ''
Mrs. Ward says that when the cheating was discovered , she wanted to avoid the morale-damaging public disclosure that a trial would bring .
She says she offered Mrs. Yeargin a quiet resignation and thought she could help save her teaching certificate .
Mrs. Yeargin declined. '' She said something like `You just want to make it easy for the school. ' I was dumbfounded , '' Mrs. Ward recalls. '' It was like someone had turned a knife in me . ''
To the astonishment and dismay of her superiors and legal authorities -- and perhaps as a measure of the unpopularity of standardized tests -- Mrs. Yeargin won widespread local support .
The school-board hearing at which she was dismissed was crowded with students , teachers and parents who came to testify on her behalf .
Supportive callers decried unfair testing , not Mrs. Yeargin , on a local radio talk show on which she appeared .
The show did n't give the particulars of Mrs. Yeargin 's offense , saying only that she helped students do better on the test. '' The message to the board of education out of all this is we 've got to take a serious look at how we 're doing our curriculum and our testing policies in this state , '' said the talk-show host .
Editorials in the Greenville newspaper allowed that Mrs. Yeargin was wrong , but also said the case showed how testing was being overused .
The radio show '' enraged us , '' says Mrs. Ward .
Partly because of the show , Mr. Watson says , the district decided not to recommend Mrs. Yeargin for a first-time offenders program that could have expunged the charges and the conviction from her record .
And legal authorities cranked up an investigation worthy of a murder case .
Over 50 witnesses , mostly students , were interviewed .
At Greenville High School , meanwhile , some students -- especially on the cheerleading squad -- were crushed. '' It 's hard to explain to a 17-year-old why someone they like had to go , '' says Mrs. Ward .
Soon , T-shirts appeared in the corridors that carried the school 's familiar red-and-white GHS logo on the front .
On the back , the shirts read , '' We have all the answers. '' Many colleagues are angry at Mrs. Yeargin. '' She did a lot of harm , '' says Cathryn Rice , who had discovered the crib notes. '' We work damn hard at what we do for damn little pay , and what she did cast unfair aspersions on all of us . ''
But several teachers also say the incident casts doubt on the wisdom of evaluating teachers or schools by using standardized test scores .
Says Gayle Key , a mathematics teacher , '' The incentive pay thing has opened up a can of worms .
There may be others doing what she did . ''
Mrs. Yeargin says she pleaded guilty because she realized it would no longer be possible to win reinstatement , and because she was afraid of further charges .
Mrs. Ward , for one , was relieved .
Despite the strong evidence against Mrs. Yeargin , popular sentiment was so strong in her favor , Mrs. Ward says , that '' I 'm afraid a jury would n't have convicted her . ''
Since chalk first touched slate , schoolchildren have wanted to know : What 's on the test ?
These days , students can often find the answer in test-coaching workbooks and worksheets their teachers give them in the weeks prior to taking standardized achievement tests .
The mathematics section of the widely used California Achievement Test asks fifth graders : '' What is another name for the Roman numeral IX ? '' It also asks them to add two-sevenths and three-sevenths .
Worksheets in a test-practice kit called Learning Materials , sold to schools across the country by Macmillan/McGraw-Hill School Publishing Co. , contain the same questions .
In many other instances , there is almost no difference between the real test and Learning Materials .
What 's more , the test and Learning Materials are both produced by the same company , Macmillan/McGraw-Hill , a joint venture of McGraw-Hill Inc. and Macmillan 's parent , Britain 's Maxwell Communication Corp .
Close parallels between tests and practice tests are common , some educators and researchers say .
Test-preparation booklets , software and worksheets are a booming publishing subindustry .
But some practice products are so similar to the tests themselves that critics say they represent a form of school-sponsored cheating .
``If I took { these preparation booklets } into my classroom , I 'd have a hard time justifying to my students and parents that it was n't cheating , '' says John Kaminski , a Traverse City , Mich. , teacher who has studied test coaching .
He and other critics say such coaching aids can defeat the purpose of standardized tests , which is to gauge learning progress .
``It 's as if France decided to give only French history questions to students in a European history class , and when everybody aces the test , they say their kids are good in European history , '' says John Cannell , an Albuquerque , N.M. , psychiatrist and founder of an educational research organization , Friends for Education , which has studied standardized testing .
Standardized achievement tests are given about 10 million times a year across the country to students generally from kindergarten through eighth grade .
The most widely used of these tests are Macmillan/McGraw 's CAT and Comprehensive Test of Basic Skills ; the Iowa Test of Basic Skills , by Houghton Mifflin Co. ; and Harcourt Brace Jovanovich Inc. 's Metropolitan Achievement Test and Stanford Achievement Test .
Sales figures of the test-prep materials are n't known , but their reach into schools is significant .
In Arizona , California , Florida , Louisiana , Maryland , New Jersey , South Carolina and Texas , educators say they are common classroom tools .
Macmillan/McGraw says '' well over 10 million '' of its Scoring High test-preparation books have been sold since their introduction 10 years ago , with most sales in the last five years .
About 20 , 000 sets of Learning Materials teachers ' binders have also been sold in the past four years .
The materials in each set reach about 90 students .
Scoring High and Learning Materials are the best-selling preparation tests .
Michael Kean , director of marketing for CTB Macmillan/McGraw , the Macmillan/McGraw division that publishes Learning Materials , says it is n't aimed at improving test scores .
He also asserted that exact questions were n't replicated .
When referred to the questions that matched , he said it was coincidental .
Mr. Kaminski , the schoolteacher , and William Mehrens , a Michigan State University education professor , concluded in a study last June that CAT test versions of Scoring High and Learning Materials should n't be used in the classroom because of their similarity to the actual test .
They devised a 69-point scale -- awarding one point for each subskill measured on the CAT test -- to rate the closeness of test preparatives to the fifth-grade CAT .
Because many of these subskills -- the symmetry of geometrical figures , metric measurement of volume , or pie and bar graphs , for example -- are only a small part of the total fifth-grade curriculum , Mr. Kaminski says , the preparation kits would n't replicate too many , if their real intent was general instruction or even general familiarization with test procedures .
But Learning Materials matched on 66.5 of 69 subskills .
Scoring High matched on 64.5 .
In CAT sections where students ' knowledge of two-letter consonant sounds is tested , the authors noted that Scoring High concentrated on the same sounds that the test does -- to the exclusion of other sounds that fifth graders should know .
Learning Materials for the fifth-grade contains at least a dozen examples of exact matches or close parallels to test items .
Rick Brownell , senior editor of Scoring High , says that Messrs .
Kaminski and Mehrens are ignoring '' the need students have for becoming familiar with tests and testing format. '' He said authors of Scoring High '' scrupulously avoid '' replicating exact questions , but he does n't deny that some items are similar .
When Scoring High first came out in 1979 , it was a publication of Random House .
McGraw-Hill was outraged .
In a 1985 advisory to educators , McGraw-Hill said Scoring High should n't be used because it represented a '' parallel form '' of the CAT and CTBS tests .
But in 1988 , McGraw-Hill purchased the Random House unit that publishes Scoring High , which later became part of Macmillan/McGraw .
Messrs .
Brownell and Kean say they are unaware of any efforts by McGraw-Hill to modify or discontinue Scoring High .
Alleghany Corp. said it completed the acquisition of Sacramento Savings & Loan Association from the H.N. & Frances C. Berger Foundation for $ 150 million .
The Sacramento-based S & L , which has 44 branch offices in north central California , had assets of $ 2.4 billion at the end of September .
New York-based Alleghany is an insurance and financial services concern .
The purchase price includes two ancillary companies .
The Department of Health and Human Services plans to extend its moratorium on federal funding of research involving fetal-tissue transplants .
Medical researchers believe the transplantation of small amounts of fetal tissue into humans could help treat juvenile diabetes and such degenerative diseases as Alzheimer 's , Parkinson 's and Huntington 's .
But anti-abortionists oppose such research because they worry that the development of therapies using fetal-tissue transplants could lead to an increase in abortions .
James Mason , assistant secretary for health , said the ban on federal funding of fetal-tissue transplant research '' should be continued indefinitely. '' He said the ban wo n't stop privately funded tissue-transplant research or federally funded fetal-tissue research that does n't involve transplants .
Department officials say that HHS Secretary Louis Sullivan will support Dr. Mason 's ruling , which will be issued soon in the form of a letter to the acting director of the National Institutes of Health .
Both Dr. Mason and Dr. Sullivan oppose federal funding for abortion , as does President Bush , except in cases where a woman 's life is threatened .
The controversy began in 1987 when the National Institutes of Health , aware of the policy implications of its research , asked for an HHS review of its plan to implant fetal tissue into the brain of a patient suffering from Parkinson 's disease .
The department placed a moratorium on the research , pending a review of scientific , legal and ethical issues .
A majority of an NIH-appointed panel recommended late last year that the research continue under carefully controlled conditions , but the issue became embroiled in politics as anti-abortion groups continued to oppose federal funding .
The dispute has hampered the administration 's efforts to recruit prominent doctors to fill prestigious posts at the helm of the NIH and the Centers for Disease Control .
Several candidates have withdrawn their names from consideration after administration officials asked them for their views on abortion and fetal-tissue transplants .
Antonio Novello , whom Mr. Bush nominated to serve as surgeon general , reportedly has assured the administration that she opposes abortion .
Dr. Novello is deputy director of the National Institute of Child Health and Human Development .
Some researchers have charged that the administration is imposing new ideological tests for top scientific posts .
Earlier this week , Dr. Sullivan tried to defuse these charges by stressing that candidates to head the NIH and the CDC will be judged by '' standards of scientific and administrative excellence , '' not politics .
But the administration 's handling of the fetal-tissue transplant issue disturbs many scientists. '' When scientific progress moves into uncharted ground , there has to be a role for society to make judgments about its applications , '' says Myron Genel , associate dean of the Yale Medical School. '' The disturbing thing about this abortion issue is that the debate has become polarized , so that no mechanism exists '' for finding a middle ground .
Yale is one of the few medical institutions conducting privately funded research on fetal-tissue transplants .
But Dr. Genel warns that Dr. Mason 's ruling may discourage private funding. '' The unavailability of federal funds , and the climate in which the decision was made , certainly do n't provide any incentive for one of the more visible foundations to provide support , '' he said .
Despite the flap over transplants , federal funding of research involving fetal tissues will continue on a number of fronts. '' Such research may ultimately result in the ability to regenerate damaged tissues or to turn off genes that cause cancer '' or to regulate genes that cause Down 's syndrome , the leading cause of mental retardation , according to an NIH summary .
The NIH currently spends about $ 8 million annually on fetal-tissue research out of a total research budget of $ 8 billion .
Rekindled hope that two New England states will allow broader interstate banking boosted Nasdaq 's bank stocks , but the over-the-counter market was up only slightly in lackluster trading .
The Nasdaq composite index added 1.01 to 456.64 on paltry volume of 118.6 million shares .
In terms of volume , it was an inauspicious beginning for November .
Yesterday 's share turnover was well below the year 's daily average of 133.8 million .
In October , the busiest month of the year so far , daily volume averaged roughly 145 million shares .
The Nasdaq 100 index of the biggest nonfinancial stocks gained 1.39 to 446.62 .
The index of the 100 largest Nasdaq financial stocks rose modestly as well , gaining 1.28 to 449.04 .
But the broader Nasdaq bank index , which tracks thrift issues , jumped 3.23 to 436.01 .
The bank stocks got a boost when Connecticut Bank & Trust and Bank of New England said they no longer oppose pending legislation that would permit banks from other regions to merge with Connecticut and Massachusetts banks .
The two banks merged in 1985 .
Bank of New England 's shares are traded on the New York Stock Exchange .
The stocks of banking concerns based in Massachusetts were n't helped much by the announcement , traders said , because many of those concerns have financial problems tied to their real-estate loan portfolios , making them unattractive takeover targets .
But speculators , anticipating that Connecticut will approve a law permitting such interstate banking soon , immediately bid up shares of Connecticut banks on the news. '' A lot of the stocks that have been under water finally saw a reason to uptick , '' said George Jennison , head trader of banking issues in Shearson Lehman Hutton 's OTC department .
The biggest beneficiary was Northeast Bancorp , which surged 7 3/4 to 69 .
The Stamford , Conn. , concern has agreed to a buy-out by Bank of New York in a transaction with an indicated value of about $ 100 a share that expires next August .
Ed Macheski , a Wilton , Conn. , money manager who follows bank stocks , said the announcement effectively gives the deal '' the green light . ''
Mr. Jennison said Northeast Bancorp also fared well because takeover stocks have returned to favor among investors .
Another OTC bank stock involved in a buy-out deal , First Constitution Financial , was higher .
It rose 7/8 to 18 1/4 .
First Constitution has signed a merger agreement with WFRR L.P. and GHKM Corp. , under which all of its common shares will be acquired for $ 25 each , or $ 273.5 million .
Among other Connecticut banks whose shares trade in the OTC market , Society for Savings Bancorp , based in Hartford , saw its stock rise 1 3/4 to 18 1/4 .
Centerbank added 5/8 to 8 3/4 ; shares of NESB , a New London-based bank holding company , rose 5/8 to 5 7/8 .
Among other banking issues , Pennview Savings Association leapt more than 44 % with a gain of 6 5/8 to 21 5/8 .
The Pennsylvania bank agreed to be acquired in a merger with Univest Corp. of Pennsylvania for $ 25.50 a share .
Valley Federal Savings & Loan , a California thrift issue , gained 1 to 4 1/4 after reporting a third-quarter loss of $ 70.7 million after an $ 89.9 million pretax charge mostly related to its mobile home financing unit .
Dan E. Nelms , Valley Federal 's president and chief executive officer , said the one-time charge substantially eliminates future losses associated with the unit .
He said the company 's core business remains strong .
He also said that after the charges , and '' assuming no dramatic fluctuation in interest rates , the company expects to achieve near-record earnings in 1990 . ''
Weisfield 's surged 6 3/4 to 55 1/2 and Ratners Group 's American depositary receipts , or ADRs , gained 5/8 to 12 1/4 .
The two concerns said they entered into a definitive merger agreement under which Ratners will begin a tender offer for all of Weisfield 's common shares for $ 57.50 each .
Also on the takeover front , Jaguar 's ADRs rose 1/4 to 13 7/8 on turnover of 4.4 million .
Since the British auto maker became a takeover target last month , its ADRs have jumped about 78 % .
After troubled Heritage Media proposed acquiring POP Radio in a stock swap , POP Radio 's shares tumbled 4 to 14 3/4 .
Heritage Media , which already owns about 51 % of POP Radio , proposed paying POP Radio shareholders with shares of a new class of Heritage Media preferred stock that would be convertible into four shares of Heritage Media 's common .
Rally 's lost 1 3/4 to 21 3/4 .
The restaurant operator said it has redeemed its rights issued Monday under its shareholder rights plan .
The fast-food company said its decision was based on discussions with a shareholder group , Giant Group Ltd. , '' in an effort to resolve certain disputes with the company . ''
Giant Group is led by three Rally 's directors , Burt Sugarman , James M. Trotter III and William E. Trotter II , who earlier this month indicated they had a 42.5 % stake in Rally 's and planned to seek a majority of seats on Rally 's nine-member board .
SCI Systems slipped 7/8 to 10 on volume of 858 , 000 shares .
The Huntsville , Ala. , electronic products maker said it expects to post a '' significant '' loss for its fiscal first quarter ended Sept. 30 .
In the year-earlier period , SCI had net income of $ 4.8 million , or 23 cents a share , on revenue of $ 225.6 million .
The Internal Revenue Service has threatened criminal sanctions against lawyers who fail to report detailed information about clients who pay them more than $ 10 , 000 in cash .
The warnings , issued to at least 100 criminal defense attorneys in several major cities in the last week , have led to an outcry by members of the organized bar , who claim the information is protected by attorney-client privilege .
The IRS warnings stem from a 1984 law that requires anyone who receives more than $ 10 , 000 in cash from a client or customer in one or more related transactions '' in the course of trade or business '' to report the payment on a document known as Form 8300 .
The form asks for such details as the client 's name , Social Security number , passport number and details about the services provided for the payment .
Failure to complete the form had been punishable as a misdemeanor until last November , when Congress determined that the crime was a felony punishable by up to 10 years in prison .
Attorneys have argued since 1985 , when the law took effect , that they an not provide information about clients who do n't wish their identities to be known .
Many attorneys have returned incomplete forms to the IRS in recent years , citing attorney-client privilege .
Until last week , the IRS rarely acted on the incomplete forms .
``This form forces a lawyer to become , in effect , a witness against his client , '' said Neal R. Sonnett , president of the National Association of Criminal Defense Lawyers. '' The IRS is asking lawyers to red-flag a criminal problem to the government , '' added Mr. Sonnett , a Miami lawyer who has heard from dozens of attorneys who received letters in recent days and has himself received the computer-generated IRS forms sent by certified mail .
Mr. Sonnett said that clients who pay cash may include alleged drug dealers who do n't have domestic bank accounts .
These individuals may not necessarily be under investigation when they hire lawyers .
Mr. Sonnett said there also may be other circumstances under which individuals would n't want the government to know they had retained criminal defense lawyers .
Filling out detailed forms about these individuals would tip the IRS off and spark action against the clients , he said .
The defense lawyers ' group formed a task force this week , chaired by New York attorney Gerald Lefcourt , to deal with the matter .
The American Bar Association 's House of Delegates passed a resolution in 1985 condemning the IRS reporting requirement .
Michael Ross , a New York lawyer who heads the ABA 's grand jury committee , said that lawyers are prohibited by the ABA 's code of ethics from disclosing information about a client except where a court orders it or to prevent the client from committing a criminal act that could result in death .
Mr. Ross said he met with officials of the IRS and the Justice Department , which would bring any enforcement actions against taxpayers , to discuss the issue last May .
At that meeting , he said , the Justice Department assured him that enforcement procedures would n't be threatened against attorneys without further review and advance notice .
Mr. Ross said IRS officials opposed the Justice Department 's moderate stance on the matter .
But in the letters sent in recent days , Christopher J. Lezovich of the IRS computing center in Detroit , told attorneys that '' failing to voluntarily submit the requested information could result in summons enforcement action being initiated. '' In some cases , the IRS asked for information dating back to forms it received in 1985 .
A spokesman for the IRS confirmed that '' there has been correspondence mailed about incomplete 8300s , '' but he declined to say why the letters were sent to lawyers now .
Individuals familiar with the Justice Department 's policy said that Justice officials had n't any knowledge of the IRS 's actions in the last week .
Lawyers worry that if they provide information about clients , that data could quickly end up in the hands of prosecutors .
Prosecutors need court permission to obtain the tax returns of an individual or a business .
But they have obtained 8300 forms without court permission and used the information to help develop criminal cases .
Some criminal lawyers speculated that the IRS was sending the letters to test the issue .
In a number of recent cases , federal courts have refused to recognize attorneys ' assertions that information relating to fees from clients should be confidential .
THE WAR OVER FEDERAL JUDICIAL SALARIES takes a victim .
Often , judges ease into more lucrative private practice with little fanfare , but not federal Judge Raul A. Ramirez in Sacramento , Calif .
On Tuesday , the judge called a news conference to say he was quitting effective Dec. 31 to join a San Francisco law firm .
The reason : the refusal of Congress to give federal judges a raise .
``A couple of my law clerks were going to pass me in three or four years , and I was afraid I was going to have to ask them for a loan , '' the judge quipped in an interview .
Federal judges make $ 89 , 500 annually ; in February , Congress rejected a bill that would have increased their pay by 50 % .
Judge Ramirez , 44 , said it is unjust for judges to make what they do. '' Judges are not getting what they deserve .
You look around at professional ballplayers or accountants . . . and nobody blinks an eye .
When you become a federal judge , all of a sudden you are relegated to a paltry sum . ''
At his new job , as partner in charge of federal litigation in the Sacramento office of Orrick , Herrington & Sutcliffe , he will make out much better .
The judge declined to discuss his salary in detail , but said : '' I 'm going to be a high-priced lawyer . ''
DOONESBURY CREATOR 'S UNION TROUBLES are no laughing matter .
Cartoonist Garry Trudeau is suing the Writers Guild of America East for $ 11 million , alleging it mounted a '' campaign to harass and punish '' him for crossing a screenwriters ' picket line .
The dispute involves Darkhorse Productions Inc. , a TV production company in which Mr. Trudeau is a co-owner .
Mr. Trudeau , a Writers Guild member , also was employed as a writer for Darkhorse , which was covered by a guild collective-bargaining agreement .
The guild began a strike against the TV and movie industry in March 1988 .
In his lawsuit , Mr. Trudeau says the strike illegally included Darkhorse , and the cartoonist refused to honor the strike against the company .
A spokesman for the guild said the union 's lawyers are reviewing the suit .
He said disciplinary proceedings are confidential and declined to comment on whether any are being held against Mr. Trudeau .
Mr. Trudeau 's attorney , Norman K. Samnick , said the harassment consists mainly of the guild 's year-long threats of disciplinary action .
Mr. Samnick said a guild disciplinary hearing is scheduled next Monday in New York .
Mr. Samnick , who will go before the disciplinary panel , said the proceedings are unfair and that any punishment from the guild would be unjustified .
In addition to the damages , the suit seeks a court order preventing the guild from punishing or retaliating against Mr. Trudeau .
ABORTION RULING UPHELD : A federal appeals court upheld a lower court ruling that the U.S. can bar the use of federal funds for family-planning programs that include abortion-related services .
A Department of Health and Human Services rule adopted in 1988 prohibits the use of so-called Title X funds for programs that assist a woman in obtaining an abortion , such as abortion counseling and referrals .
The rule also prohibits funding for activities that '' encourage , promote or advocate abortion. '' Title X funds are the single largest source of federal funding for family-planning services , according to the opinion by the Second U.S. Circuit Court of Appeals in New York .
The panel ruled that the restrictions do n't violate the freedom of speech of health care providers and that the limits on counseling services do n't violate the rights of pregnant women .
INQUIRY CLEARS TEXAS JUDGE of bias in comments on homosexual murder victims .
Dallas District Judge Jack Hampton had sparked calls for a judicial inquiry with his remarks to the press last December , two weeks after sentencing an 18-year-old defendant to 30 years in state prison for killing two homosexual men in a city park .
The judge was quoted as referring to the victims as '' queers '' and saying they would n't have been killed '' if they had n't been cruising the streets picking up teenage boys . ''
But Robert R. Murray , a special master appointed by the Texas Supreme Court , said Judge Hampton did n't breach any judicial standards of fairness , although he did violate the state 's judicial code by commenting publicly on a pending case .
Observing that the judge '' has never exhibited any bias or prejudice , '' Mr. Murray concluded that he '' would be impartial in any case involving a homosexual or prostitute '' as a victim .
Mr. Murray also said Judge Hampton 's comments did n't discredit the judiciary or the administration of justice .
The report is subject to review by the State Commission on Judicial Conduct , which is empowered to impose sanctions .
GAF TRIAL goes to round three .
Attorneys in the third stock-manipulation trial of GAF Corp. began opening arguments yesterday in the Manhattan courtroom of U.S. District Judge Mary Johnson Lowe .
In an eight-count indictment , the government has charged GAF , a Wayne , N.J. , specialty chemical maker , and its Vice Chairman James T. Sherwin with attempting to manipulate the common stock of Union Carbide Corp. in advance of GAF 's planned sale of a large block of the stock in November 1986 .
The first two GAF trials ended in mistrials earlier this year .
This trial is expected to last five weeks .
SWITCHING TO THE DEFENSE : A former member of the prosecution team in the Iran/Contra affair joined the Chicago firm of Mayer , Brown & Platt .
Michael R. Bromwich , a member since January 1987 of the three-lawyer trial team in the prosecution of Oliver North , became a partner in the Washington , D.C. , office of the 520-lawyer firm .
He will specialize in white-collar criminal defense work .
Mr. Bromwich , 35 , also has served as deputy chief and chief of the narcotics unit for the U.S. attorney 's office for the Southern District of New York , based in Manhattan .
Cooper Tire & Rubber Co. said it has reached an agreement in principle to buy buildings and related property in Albany , Ga. , from Bridgestone/Firestone Inc. Terms were n't disclosed .
The tire maker said the buildings consist of 1.8 million square feet of office , manufacturing and warehousing space on 353 acres of land .
Fujitsu Ltd. 's top executive took the unusual step of publicly apologizing for his company 's making bids of just one yen for several local government projects , while computer rival NEC Corp. made a written apology for indulging in the same practice .
Meanwhile , business and government leaders rebuked the computer makers , and fretted about the broader statement the companies ' actions make about Japanese cutthroat pricing .
Fujitsu said it bid the equivalent of less than a U.S. penny on three separate municipal contracts during the past two years .
The company also disclosed that during that period it offered 10 , 000 yen , or about $ 70 , for another contract .
But Fujitsu , Japan 's No. 1 computer maker , is n't alone .
NEC , one of its largest domestic competitors , said it bid one yen in two separate public auctions since 1987 .
In both cases , NEC lost the contract to Fujitsu , which made the same bid and won a tie-breaking lottery .
All the contracts were for computer-system-design contracts and involved no hardware or software .
The Ministry of International Trade and Industry summoned executives from the companies to '' make sure they understood '' the concern about such practices , according to a government spokesman. '' These cases lead to the loss of the firms ' social and international credibility , '' a ministry statement said .
Japan 's Fair Trade Commission has said it is considering investigating the bids for possible antitrust-law violations .
``We would like to apologize for having caused huge trouble , '' Fujitsu President Takuma Yamamoto , read from a prepared statement as he stood before a packed news conference at his company 's downtown headquarters .
The bids , he added , were '' contrary to common sense . ''
NEC released a statement saying , '' We feel sorry for having caused trouble to society , '' a form of apology common in Japan for companies caught in embarrassing situations .
Japanese companies have long had a reputation for sacrificing short-term profits to make a sale that may have long-term benefits .
But the growing controversy comes as many practices historically accepted as normal here -- such as politicians accepting substantial gifts from businessmen or having extramarital affairs -- are coming under close ethical scrutiny .
The fire is also fueled by growing international interest in Japanese behavior .
So far there have been no public overseas complaints about the issue .
But in one of the auctions in question , International Business Machines Corp. made a bid substantially higher than the Fujitsu offer , according to the municipality .
The low-ball bids touch on issues central to the increasingly tense trade debate .
Foreigners complain that they have limited access to government procurement in Japan , in part because Japanese companies unfairly undercut them .
The U.S. government in recent years has accused Japanese companies of excessively slashing prices on semiconductors and supercomputers -- products Fujitsu and NEC make .
Asked whether the bidding flap would hurt U.S.-Japan relations , Mr. Yamamoto said , '' this will be a minus factor . ''
The '' one-yen '' controversy first came to a head last week when the city of Hiroshima announced that Fujitsu won a contract to design a computer system to map its waterworks .
The city had expected to pay about 11 million yen ( $ 77 , 000 ) , but Fujitsu essentially offered to do it for free .
Then Wednesday , Fujitsu said it made a similar bid to win a library contract in Nagano prefecture two weeks earlier .
It also said that in July , it bid 10 , 000 yen to design a system for the Saitama prefectural library , and two years ago , it bid one yen to plan the telecommunications system for Wakayama prefecture .
The company said it has offered to withdraw its bids in Hiroshima and Nagano .
The municipalities said they have n't decided whether to try to force the company to go through with the contracts .
Fujitsu and NEC said they were still investigating , and that knowledge of more such bids could emerge .
Mr. Yamamoto insisted that headquarters had n't approved the bids , and that he did n't know about most of the cases until Wednesday .
Other major Japanese computer companies contacted yesterday said they have never made such bids .
``One yen is not ethical , '' Michio Sasaki , an official at Keidanren , the Japan Federation of Economic Organizations , said. '' Profit may be low , but at least costs should be covered . ''
PAPERS : Backe Group Inc. agreed to acquire Atlantic Publications Inc. , which has 30 community papers and annual sales of $ 7 million .
Terms were n't disclosed .
Backe is a closely held media firm run by former CBS Inc. President John Backe .
TV : Price Communications Corp. completed the sale of four of its TV stations to NTG Inc. for $ 120 million in cash and notes , retaining a 10 % equity stake in the new concern .
NTG was formed by Osborn Communications Corp. and Desai Capital .
Michaels Stores Inc. , which owns and operates a chain of specialty retail stores , said October sales rose 14.6 % to $ 32.8 million from $ 28.6 million a year earlier .
Sales in stores open more than one year rose 3 % to $ 29.3 million from $ 28.4 million .
Furukawa Co. of Japan said it will acquire two construction machinery plants and a sales unit in France formerly belonging to Dresser Industries Inc. of the U.S .
The company said it made the purchase in order to locally produce hydraulically operated shovels .
Last October , the company also bought a wheel-loader manufacturing plant in Heidelberg , West Germany , from Dresser .
Furukawa said the purchase of the French and German plants together will total about 40 billion yen ( $ 280 million ) .
Structural Dynamics Research Corp. , which makes computer-aided engineering software , said it introduced new technology in mechanical design automation that will improve mechanical engineering productivity .
@ Money Market Deposits-a 6.21 %
a-Average rate paid yesterday by 100 large banks and thrifts in the 10 largest metropolitan areas as compiled by Bank Rate Monitor .
b-Current annual yield .
Guaranteed minimum 6 % .
LSI Logic Corp. reported a surprise $ 35.7 million third-quarter net loss , including a special restructuring charge that reflects a continuing industry-wide slowdown in semiconductor demand .
In September , the custom-chip maker said excess capacity and lagging billings would result in an estimated $ 2 million to $ 3 million net loss for the third quarter .
But company officials said yesterday that they decided to take a $ 43 million pretax charge for the period to cover a restructuring of world-wide manufacturing operations , citing extended weakness in the market as well as a decision to switch to more economical production techniques .
``Over the summer months , there has been a slowing in the rate of new orders from the computer sector , our primary market , '' said Wilfred J. Corrigan , chairman and chief executive officer. '' In addition , recent industry forecasts for 1990 indicate a slow environment , at least until midyear. '' As a result , the company said it decided to phase out its oldest capacity and '' make appropriate reductions '' in operating expenses .
The $ 35.7 million net loss equals 86 cents a share .
Not counting the extraordinary charge , the company said it would have had a net loss of $ 3.1 million , or seven cents a share .
A year earlier , it had profit of $ 7.5 million , or 18 cents a share .
Revenue rose 42 % to $ 133.7 million from $ 94 million .
The charge partly reflects a switch from older five-inch to more-efficient six-inch silicon wafers with which to fabricate chips .
Related to that decision , the company said it was converting its Santa Clara , Calif. , factory to a research and development facility .
A spokesman declined to speculate about possible reductions in force .
``This is a company that has invested in capacity additions more aggressively than any other company in the industry and now the industry is growing more slowly and they are suddenly poorly positioned , '' said Michael Stark , chip analyst at Robertson , Stephens & Co. '' I think the stock is dead money for a while. '' Yesterday 's announcement was made after markets closed .
U.S. chip makers are facing continued slack demand following a traditionally slow summer .
Part of the problem is that chip buyers are keeping inventories low because of jitters about the course of the U.S. economy .
INGERSOLL-RAND Co. ( Woodcliff Lake , N.J. ) -- William G. Kuhns , former chairman and chief executive officer of General Public Utilities Corp. , was elected a director of this maker of industrial and construction equipment , increasing board membership to 10 .
The dollar posted gains against all major currencies yesterday , buoyed by persistent Japanese demand for U.S. bond issues .
While market sentiment remains cautiously bearish on the dollar based on sluggish U.S. economic indicators , dealers note that Japanese demand has helped underpin the dollar against the yen and has kept the U.S. currency from plunging below key levels against the mark .
At the same time , dealers said the U.S. unit has been locked into a relatively narrow range in recent weeks , in part because the hefty Japanese demand for dollars has been offset by the mark 's strength , resulting in a stalemate .
Jay Goldinger , with Capital Insight Inc. , reasons that while the mark has posted significant gains against the yen as well -- the mark climbed to 77.70 yen from 77.56 yen late Tuesday in New York -- the strength of the U.S. bond market compared to its foreign counterparts has helped lure investors to dollar-denominated bonds , rather than mark bonds .
``Dollar-yen { trade } is the driving force in the market , '' said Tom Trettien , a vice president with Banque Paribas in New York , '' but I 'm not convinced it will continue .
Who knows what will happen down the road , in three to six months , if foreign investment starts to erode ? ''
In late New York trading yesterday , the dollar was quoted at 1.8500 marks , up from 1.8415 marks late Tuesday , and at 143.80 yen , up from 142.85 yen late Tuesday .
Sterling was quoted at $ 1.5755 , down from $ 1.5805 late Tuesday .
In Tokyo Thursday , the U.S. currency opened for trading at 143.93 yen , up from Wednesday 's Tokyo close of 143.08 yen .
Douglas Madison , a corporate trader with Bank of America in Los Angeles , traced the dollar 's recent solid performance against the yen to purchases of securities by Japanese insurance companies and trust banks and the sense that another wave of investment is waiting in the wings .
He contends that the perception in Japan of a vitriolic U.S. response to Sony Corp. 's announcement of its purchase of Columbia Pictures Entertainment Inc. has been temporarily mollified .
He cites the recent deal between the Mitsubishi Estate Co. and the Rockefeller Group , as well as the possible white knight role of an undisclosed Japanese company in the Georgia-Pacific Corp. takeover bid for Great Northern Nekoosa Corp. as evidence .
The forthcoming maturity in November of a 10-year Japanese government yen-denominated bond issue valued at about $ 16 billion has prompted speculation in the market that investors redeeming the bonds will diversify into dollar-denominated instruments , according to Mr. Madison .
It remains unclear whether the bond issue will be rolled over .
Meanwhile , traders in Tokyo say that the prospect of lower U.S. interest rates has spurred dollar buying by Japanese institutions .
They point out that these institutions want to lock in returns on high-yield U.S. Treasury debt and suggest demand for the U.S. unit will continue unabated until rates in the U.S. recede .
The market again showed little interest in further evidence of a slowing U.S. economy , and traders note that the market in recent weeks has taken its cues more from Wall Street than U.S. economic indicators .
Dealers said the dollar merely drifted lower following the release Wednesday of the U.S. purchasing managers ' report .
The managers ' index , which measures the health of the manufacturing sector , stood at 47.6 % in October , above September 's 46 % , and also above average forecasts for the index of 45.3 % .
Some dealers said the dollar was pressured slightly because a number of market participants had boosted their expectations in the past day and were looking for an index above 50 , which indicates an expanding manufacturing economy .
But most said the index had no more than a minimal effect on trade .
On the Commodity Exchange in New York , gold for current delivery settled at $ 374.20 an ounce , down 50 cents .
Estimated volume was a moderate 3.5 million ounces .
In early trading in Hong Kong Thursday , gold was quoted at $ 374.19 an ounce .
``The Cosby Show '' may have single-handedly turned around ratings at NBC since its debut in 1984 , and the Huxtable family still keeps millions of viewers laughing Thursday night on the network .
But some of the TV stations that bought '' Cosby '' reruns for record prices two years ago are n't laughing much these days .
The reruns have helped ratings at many of the 187 network affiliates and independent TV stations that air the shows .
But the ratings are considerably below expectations , and some stations say they may not buy new episodes when their current contracts expire .
Meanwhile , stations are fuming because , many of them say , the show 's distributor , Viacom Inc. , is giving an ultimatum : Either sign new long-term commitments to buy future episodes or risk losing '' Cosby '' to a competitor .
At the same time , Viacom is trying to persuade stations to make commitments to '' A Different World , '' a spin-off of '' Cosby '' whose reruns will become available in 1991 .
Viacom denies it 's using pressure tactics. '' We 're willing to negotiate , '' says Dennis Gillespie , executive vice president of marketing. '' We 're offering this plan now because we feel it 's the right time . ''
But , says the general manager of a network affiliate in the Midwest , '' I think if I tell them I need more time , they 'll take `Cosby ' across the street , ''
Viacom 's move comes as the syndication market is being flooded with situation comedies that are still running on the networks .
One station manager says he believes Viacom 's move is a '' pre-emptive strike '' because the company is worried that '' Cosby '' ratings will continue to drop in syndication over the next few years. '' Cosby '' is down a full ratings point in the week of Oct. 2-8 over the same week a year ago , according to A.C. Nielsen Co .
Mr. Gillespie at Viacom says the ratings are rising .
And executives at stations in such major markets as Washington ; Providence , R.I. ; Cleveland ; Raleigh , N.C. ; Minneapolis , and Louisville , Ky. , say they may very well not renew '' Cosby. '' Dick Lobo , the general manager of WTVJ , the NBC-owned station in Miami , for example , says the show has '' been a major disappointment to us. '' '' At the prices we were charged , there should have been some return for the dollar .
There was n't . ''
Neil Kuvin , the general manager of WHAS , the CBS affiliate in Louisville , says '' Cosby '' gets the station 's highest ratings and he 's '' pleased. '' But he adds , '' I feel pressured , disappointed , uncomfortable and , frankly , quite angry with Viacom . ''
The Life Insurance Co. of Georgia has officially opened an office in Taipei .
David Wu , the company 's representative in Taiwan , said Atlanta-based Life of Georgia will sell conventional life-insurance products .
Life of Georgia is part of the Nationale Nederlanden Group , based in the Netherlands .
In this era of frantic competition for ad dollars , a lot of revenue-desperate magazines are getting pretty cozy with advertisers -- fawning over them in articles and offering pages of advertorial space .
So can a magazine survive by downright thumbing its nose at major advertisers ?
Garbage magazine , billed as '' The Practical Journal for the Environment , '' is about to find out .
Founded by Brooklyn , N.Y. , publishing entrepreneur Patricia Poore , Garbage made its debut this fall with the promise to give consumers the straight scoop on the U.S. waste crisis .
The magazine combines how-to pieces on topics like backyard composting , explanatory essays on such things as what happens after you flush your toilet , and hard-hitting pieces on alleged environmental offenders .
Garbage editors have dumped considerable energy into a whirling rampage through supermarket aisles in a bid to identify corporate America 's good guys and bad boys .
In one feature , called '' In the Dumpster , '' editors point out a product they deem to be a particularly bad offender .
From an advertising standpoint , the problem is these offenders are likely to be some of the same folks that are major magazine advertisers these days .
With only two issues under its belt , Garbage has alienated some would-be advertisers and raised the ire of others .
Campbell Soup , for one , is furious its Souper Combo microwave product was chastised in the premiere '' In the Dumpster '' column .
The magazine 's editors ran a giant diagram of the product with arrows pointing to the packaging 's polystyrene foam , polyproplene and polyester film -- all plastic items they say are non-biodegradable. '' It 's precisely the kind of product that 's created the municipal landfill monster , '' the editors wrote .
``I think that this magazine is not only called Garbage , but it is practicing journalistic garbage , '' fumes a spokesman for Campbell Soup .
He says Campbell was n't even contacted by the magazine for the opportunity to comment .
Modifications had been made to the Souper Combo product at the time the issue was printed , he says , making it less an offender than was portrayed .
He admits , though , it is n't one of Campbell Soup 's better products in terms of recyclability .
Campbell Soup , not surprisingly , does n't have any plans to advertise in the magazine , according to its spokesman .
Some media experts question whether a young magazine can risk turning off Madison Avenue 's big spenders. '' You really need the Campbell Soups of the world to be interested in your magazine if you 're going to make a run of it , '' says Mike White , senior vice president and media director at DDB Needham , Chicago. '' The economics of magazine publishing pretty much require that you have a pretty solid base '' of big-time ad spenders , he adds .
The first two issues featured ads from only a handful of big advertisers , including General Electric and Adolph Coors , but the majority were from companies like Waste Management Inc. and Bumkins International , firms that do n't spend much money advertising and ca n't be relied on to support a magazine over the long haul .
A Waste Management spokeswoman says its ad in the premiere issue was a one-time purchase , and it does n't have any plans to advertise in future issues. '' We do n't spend much on print advertising , '' she says .
But Ms. Poore , the magazine 's editor and publisher , contends Garbage can survive , at least initially , on subscription revenues .
Individual copies of the magazine sell for $ 2.95 and yearly subscriptions cost $ 21. ( It is , of course , printed on recycled paper . )
According to Ms. Poore , Old-House Journal Corp. , her publishing company , printed and sold all 126 , 000 copies of the premiere issue .
The first and second issues sold out on newsstands , she says , and the magazine has orders for 93 , 000 subscriptions .
Asked whether potential advertisers will be scared away by the magazine 's direct policy , Ms. Poore replies : '' I do n't know and I do n't care .
I 'm not saying advertising revenue is n't important , '' she says , '' but I could n't sleep at night '' if the magazine bowed to a company because they once took out an ad .
Ad Notes. . . .
INTERPUBLIC ON TV : Interpublic Group said its television programming operations -- which it expanded earlier this year -- agreed to supply more than 4 , 000 hours of original programming across Europe in 1990 .
It said the programs , largely game shows , will be provided by its E.C. Television unit along with Fremantle International , a producer and distributor of game shows of which it recently bought 49 % .
It said that volume makes it the largest supplier of original TV programming in Europe .
Interpublic is providing the programming in return for advertising time , which it said will be valued at more than $ 75 million in 1990 and $ 150 million in 1991 .
It plans to sell the ad time to its clients at a discount .
NEW ACCOUNT : CoreStates Financial Corp. , Philadelphia , named Earle Palmer Brown & Spiro , Philadelphia , as agency of record for its $ 5 million account .
The business had been handled by VanSant Dugdale , Baltimore .
AT & T FAX : American Telephone & Telegraph 's General Business Systems division , New York , awarded the ad account for its Fax product line to Ogilvy & Mather , New York , a WPP Group agency .
Billings were n't disclosed for the small account , which had been serviced at Young & Rubicam , New York .
FIRST CAMPAIGN : Enterprise Rent-A-Car Inc. breaks its first national ad campaign this week .
The St. Louis firm specializes in replacement-car rentals , those provided by insurance companies for cars damaged in accidents .
Developed by Avrett , Free & Ginsberg , New York , the $ 6 million campaign pitches Enterprise 's consumer-driven service and its free pick-up and drop-off service .
LANDOR ASSOCIATES : Young & Rubicam said it completed its acquisition of Landor Associates , a San Francisco identity-management firm .
ACQUISITION : Ketchum Communications , Pittsburgh , acquired Braun & Co. , a Los Angeles investor-relations and marketing-communications firm .
Terms were n't disclosed .
Sea Containers Ltd. said it might increase the price of its $ 70-a-share buy-back plan if pressed by Temple Holdings Ltd. , which made an earlier tender offer for Sea Containers .
Sea Containers , a Hamilton , Bermuda-based shipping concern , said Tuesday that it would sell $ 1.1 billion of assets and use some of the proceeds to buy about 50 % of its common shares for $ 70 apiece .
The move is designed to ward off a hostile takeover attempt by two European shipping concerns , Stena Holding AG and Tiphook PLC .
In May , the two companies , through their jointly owned holding company , Temple , offered $ 50 a share , or $ 777 million , for Sea Containers .
In August , Temple sweetened the offer to $ 63 a share , or $ 963 million .
Yesterday , Sea Containers ' chief executive officer , James Sherwood , said in an interview that , under the asset-sale plan , Sea Containers would end up with a cash surplus of approximately $ 620 million .
About $ 490 million of that would be allocated to the buy-back , leaving about $ 130 million , he said .
That $ 130 million , Mr. Sherwood said , '' gives us some flexibility in case Temple raises its bid .
We are able to increase our price above the $ 70 level if necessary. '' He declined to say , however , how much Sea Containers might raise its price .
Mr. Sherwood speculated that the leeway that Sea Containers has means that Temple would have to '' substantially increase their bid if they 're going to top us . ''
Temple , however , harshly criticized Sea Containers ' plan yesterday , characterizing it as a '' highly conditional device designed to entrench management , confuse shareholders and prevent them from accepting our superior cash offer . ''
A spokesman for Temple estimated that Sea Containers ' plan -- if all the asset sales materialize -- would result in shareholders receiving only $ 36 to $ 45 a share in cash .
The lower figures , the spokesman said , would stem from preferred shares being converted to common stock and the possibility that Sea Containers ' subsidiaries might be required to place their shares in the open market .
Temple added that Sea Containers is still mired in legal problems in Bermuda , where the Supreme Court has temporarily barred Sea Containers from buying back its own stock in a case brought by Stena and Tiphook. { The court has indicated it will rule on the case by the end of the month . }
Temple also said Sea Containers ' plan raises '' numerous legal , regulatory , financial and fairness issues , '' but did n't elaborate .
Mr. Sherwood said reaction to Sea Containers ' proposal has been '' very positive. '' In New York Stock Exchange composite trading yesterday , Sea Containers closed at $ 62.625 , up 62.5 cents .
The Transportation Department , responding to pressure from safety advocates , took further steps to impose on light trucks and vans the safety requirements used for automobiles .
The department proposed requiring stronger roofs for light trucks and minivans , beginning with 1992 models .
It also issued a final rule requiring auto makers to equip light trucks and minivans with lap-shoulder belts for rear seats beginning in the 1992 model year .
Such belts already are required for the vehicles ' front seats .
``Today 's action , '' Transportation Secretary Samuel Skinner said , '' represents another milestone in the ongoing program to promote vehicle occupant safety in light trucks and minivans through its extension of passenger car standards . ''
In September , the department had said it will require trucks and minivans to be equipped with the same front-seat headrests that have long been required on passenger cars .
The Big Three auto makers said the rule changes were n't surprising because Bush administration officials have long said they planned to impose car safety standards on light trucks and vans .
Safety advocates , including some members of Congress , have been urging the department for years to extend car-safety requirements to light trucks and vans , which now account for almost one-third of all vehicle sales in the U.S .
They say that many vehicles classed as commercial light trucks actually carry more people than cargo and therefore should have the same safety features as cars .
They did n't have much luck during the Reagan administration. '' But now , there seems to be a fairly systematic effort to address the problem , '' said Chuck Hurley , vice president of communications for the Insurance Institute for Highway Safety. '' We 're in a very different regulatory environment. '' Sen. John Danforth ( R. , Mo. ) praised the department 's actions , noting that rollover crashes account for almost half of all light-truck deaths. '' We could prevent many of these fatalities with minimum roof-crush standards , '' he said .
Sen. Danforth and others also want the department to require additional safety equipment in light trucks and minivans , including air bags or automatic seat belts in front seats and improved side-crash protection .
The department 's roof-crush proposal would apply to vehicles weighing 10 , 000 pounds or less .
The roofs would be required to withstand a force of 1.5 times the unloaded weight of the vehicle .
During the test , the roof could n't be depressed more than five inches .
In Detroit , a Chrysler Corp. official said the company currently has no rear-seat lap and shoulder belts in its light trucks , but plans to begin phasing them in by the end of the 1990 model year .
He said Chrysler fully expects to have them installed across its light-truck line by the Sept. 1 , 1991 , deadline .
Chrysler said its trucks and vans already meet the roof-crush resistance standard for cars .
John Leinonen , executive engineer of Ford Motor Co. 's auto-safety office , said Ford trucks have met car standards for roof-crush resistance since 1982 .
Ford began installing the rear-seat belts in trucks with its F-series Crew Cab pickups in the 1989 model year .
The new Explorer sport-utility vehicle , set for introduction next spring , will also have the rear-seat belts .
Mr. Leinonen said he expects Ford to meet the deadline easily .
Consolidated Rail Corp. said it would spend more than $ 30 million on 1 , 000 enclosed railcars for transporting autos .
The multilevel railcars , scheduled for delivery in 1990 , will be made by Thrall Manufacturing Co. , a Chicago Heights , Ill. , division of closely held Duchossois Industries Inc. , Elmhurst , Ill .
This year , the railroad holding company acquired 850 such railcars .
Sir Peter Walters , 58-year-old chairman of British Petroleum Co. until next March , joins the board of this cement products company on Dec. 1 .
Sir Peter will succeed Sir John Milne , 65 , who retires as Blue Circle nonexecutive chairman on June 1 .
Bank of New England Corp. said it has held talks with potential merger partners outside New England , although it added that nothing is imminent and it has n't received any formal offers .
The discussions were disclosed as the bank holding company said that it has dropped its longstanding opposition to full interstate banking bills in Connecticut and in Massachusetts .
Later yesterday , a Massachusetts senate committee approved a bill to allow national interstate banking by banks in the state beginning in 1991 .
Currently , both Massachusetts and Connecticut , where most of Bank of New England 's operations are , allow interstate banking only within New England .
Richard Driscoll , vice chairman of Bank of New England , told the Dow Jones Professional Investor Report , '' Certainly , there are those outside the region who think of us prospectively as a good partner .
We have , and I 'm sure others have , considered what our options are , and we 've had conversations with people who in the future might prove to be interesting partners. '' He added , '' There 's nothing very hot . ''
Mr. Driscoll did n't elaborate about who the potential partners were or when the talks were held .
A bank spokeswoman also declined to comment on any merger-related matters , but said the company decided to drop its opposition to the interstate banking legislation because '' prevailing sentiment is in favor of passage . ''
Bank of New England has been hit hard by the region 's real-estate slump , with its net income declining 42 % to $ 121.6 million , or 61 cents a share , in the first nine months of 1989 from the year-earlier period .
The company recently said it would sell some operations and lay off 4 % of its work force , altogether reducing employment to less than 16 , 000 from about 18 , 000 .
It recently signed a preliminary agreement to negotiate exclusively with the Bank of Tokyo Ltd. for the sale of part of its leasing business to the Japanese bank .
GOODY PRODUCTS Inc. cut its quarterly dividend to five cents a share from 11.5 cents a share .
The reduced dividend is payable Jan. 2 to stock of record Dec. 15 .
The Kearny , N.J.-based maker of hair accessories and other cosmetic products said it cut the dividend due to its third-quarter loss of $ 992 , 000 , or 15 cents a share .
In the year-ago quarter , the company reported net income of $ 1.9 million , or 29 cents a share .
The company also adopted an anti-takeover plan .
Michael Henderson , 51-year-old group chief executive of this U.K. metals and industrial materials maker , will become chairman in May , succeeding Ian Butler , 64 , who is retiring .
Mr. Butler will remain on the board as a nonexecutive director .
Rally 's Inc. said it has redeemed its rights outstanding issued Monday in its shareholder rights plan .
The company said holders of stock of record Nov. 10 will receive 1/10th of one cent a share as the redemption payment .
The fast-food company said its decision was based upon discussions with a shareholder group , Giant Group Ltd. , '' in an effort to resolve certain disputes with the company . ''
Giant Group is led by three Rally 's directors , Burt Sugarman , James M. Trotter III and William E. Trotter II , who last month indicated they hold a 42.5 % stake in Rally 's and plan to seek a majority of seats on Rally 's nine-member board .
When Warren Winiarski , proprietor of Stag 's Leap Wine Cellars in Napa Valley , announced a $ 75 price tag for his 1985 Cask 23 Cabernet this fall , few wine shops and restaurants around the country balked. '' This is the peak of my wine-making experience , '' Mr. Winiarski declared when he introduced the wine at a dinner in New York , '' and I wanted to single it out as such . ''
It is in my estimation the best wine Stag 's Leap has produced , and with fewer than 700 cases available , it is sure to sell quickly .
The price is a new high for California Cabernet Sauvignon , but it is not the highest .
Diamond Creek 1985 Lake Vineyard Cabernet weighed in this fall with a sticker price of $ 100 a bottle .
One of the fastest growing segments of the wine market is the category of superpremiums -- wines limited in production , of exceptional quality ( or so perceived , at any rate ) , and with exceedingly high prices .
For years , this group included a stable of classics -- Bordeaux first growths ( Lafite-Rothschild , Latour , Haut-Brion , Petrus ) , Grand Cru Burgundies ( Romanee-Conti and La Tache ) deluxe Champagnes ( Dom Perignon or Roederer Cristal ) , rarefied sweet wines ( Chateau Yquem or Trockenbeerenauslesen Rieslings from Germany , and Biondi-Santi Brunello Riserva from Tuscany ) .
These first magnitude wines ranged in price from $ 40 to $ 125 a bottle .
In the last year or so , however , this exclusive club has taken in a host of flashy new members .
The classics have zoomed in price to meet the competition , and it almost seems that there 's a race on to come up with the priciest single bottle , among current releases from every major wine region on the globe .
France can boast the lion 's share of high-priced bottles .
Bordeaux 's first growths from 1985 and 1986 are $ 60 to $ 80 each ( except for the smallest in terms of production , Chateau Petrus , which costs around $ 250 ! ) .
These prices seem rather modest , however , in light of other French wines from current vintages .
Chateau Yquem , the leading Sauternes , now goes for well over $ 100 a bottle for a lighter vintage like 1984 ; the spectacularly rich 1983 runs $ 179 .
In Champagne , some of the prestige cuvees are inching toward $ 100 a bottle .
The first Champagne to crack that price barrier was the 1979 Salon de Mesnil Blanc de Blancs .
The '82 Salon is $ 115 .
Roederer Cristal at $ 90 a bottle sells out around the country and Taittinger 's Comtes de Champagne Blanc de Blancs is encroaching upon that level .
The great reds of the Rhone Valley have soared in price as well .
E. Guigal 's 1982 Cote Rotie La Landonne , for example , is $ 120 .
None of France 's wine regions can steal a march on Burgundy , however .
The six wines of the Domaine de la Romanee-Conti , 72 of the most precious acres of vineyard anywhere in the world , have commanded three-digit price tags for several years now .
With the 1985 vintage , they soared higher : La Tache , $ 195 ; Richebourg , $ 180 ; Romanee-Conti , $ 225 .
Another small Burgundy estate , Coche-Dury , has just offered its 1987 Corton-Charlemagne for $ 155 .
From Italy there is Angelo Gaja Barbaresco at $ 125 a bottle , Piero Antinori 's La Solaia , a $ 90 Cabernet from Tuscany , and Biondi-Santi Brunello at $ 98 .
Spain 's Vega Secilia Unico 1979 ( released only in its 10th year ) is $ 70 , as is Australia 's Grange Hermitage 1982 .
``There are certain cult wines that can command these higher prices , '' says Larry Shapiro of Marty 's , one of the largest wine shops in Dallas. '' What 's different is that it is happening with young wines just coming out .
We 're seeing it partly because older vintages are growing more scarce . ''
Wine auctions have almost exhausted the limited supply of those wines , Mr. Shapiro continued : '' We 've seen a dramatic decrease in demand for wines from the '40s and '50s , which go for $ 300 to $ 400 a bottle .
Some of the newer wines , even at $ 90 to $ 100 a bottle or so , almost offer a bargain . ''
Take Lake Vineyard Cabernet from Diamond Creek .
It 's made only in years when the grapes ripen perfectly ( the last was 1979 ) and comes from a single acre of grapes that yielded a mere 75 cases in 1987 .
Owner Al Brownstein originally planned to sell it for $ 60 a bottle , but when a retailer in Southern California asked , '' Is that wholesale or retail ? '' he re-thought the matter .
Offering the wine at roughly $ 65 a bottle wholesale ( $ 100 retail ) , he sent merchants around the country a form asking them to check one of three answers : 1 ) no , the wine is too high ( 2 responses ) ; 2 ) yes , it 's high but I 'll take it ( 2 responses ) ; 3 ) I 'll take all I can get ( 58 responses ) .
The wine was shipped in six-bottle cases instead of the usual 12 , but even at that it was spread thin , going to 62 retailers in 28 states .
``We thought it was awfully expensive , '' said Sterling Pratt , wine director at Schaefer 's in Skokie , Ill. , one of the top stores in suburban Chicago , '' but there are people out there with very different opinions of value .
We got our two six-packs -- and they 're gone . ''
Mr. Pratt remarked that he thinks steeper prices have come about because producers do n't like to see a hit wine dramatically increase in price later on .
Even if there is consumer resistance at first , a wine that wins high ratings from the critics will eventually move. '' There may be sticker-shock reaction initially , '' said Mr. Pratt , '' but as the wine is talked about and starts to sell , they eventually get excited and decide it 's worth the astronomical price to add it to their collection . ''
``It 's just sort of a one-upsmanship thing with some people , '' added Larry Shapiro. '' They like to talk about having the new Red Rock Terrace { one of Diamond Creek 's Cabernets } or the Dunn 1985 Cabernet , or the Petrus .
Producers have seen this market opening up and they 're now creating wines that appeal to these people . ''
That explains why the number of these wines is expanding so rapidly .
But consumers who buy at this level are also more knowledgeable than they were a few years ago. '' They wo n't buy if the quality is not there , '' said Cedric Martin of Martin Wine Cellar in New Orleans. '' Or if they feel the wine is overpriced and they can get something equally good for less. '' Mr. Martin has increased prices on some wines ( like Grgich Hills Chardonnay , now $ 32 ) just to slow down movement , but he is beginning to see some resistance to high-priced red Burgundies and Cabernets and Chardonnays in the $ 30 to $ 40 range .
Image has , of course , a great deal to do with what sells and what does n't , and it ca n't be forced .
Wine merchants ca n't keep Roederer Cristal in stock , but they have to push Salon le Mesnil , even lowering the price from $ 115 to $ 90 .
It 's hardly a question of quality -- the 1982 Salon is a beautiful wine , but , as Mr. Pratt noted , people have their own ideas about value .
It 's interesting to find that a lot of the expensive wines are n't always walking out the door .
In every major market in the U.S. , for instance , you can buy '86 La Tache or Richebourg , virtually all of the first growth Bordeaux ( except Petrus ) , as well as Opus One and Dominus from California and , at the moment , the Stag 's Leap 1985 Cask 23 .
With the biggest wine-buying period of the year looming as the holidays approach , it will be interesting to see how the superpremiums fare .
By January it should be fairly clear what 's hot -- and what 's not .
Ms. Ensrud is a free-lance wine writer in New York .
Signs of a slowing economy are increasing pressure on the Federal Reserve to cut short-term interest rates , but it is n't clear whether the central bank will do so .
A survey by the Fed 's 12 district banks shows economic growth has been sluggish in recent weeks , while upward pressures on prices have moderated. '' The economy is clearly slowing , '' says Robert Black , president of the Richmond Federal Reserve Bank .
``If you look at the third quarter as posting roughly 2.5 % growth , I do see some slowing in the fourth quarter , '' agrees Kansas City Fed President Roger Guffey .
Nevertheless , both Mr. Guffey and Mr. Black say the slowdown so far is no cause for concern. '' We 're coming closer to achieving the stated objective of slowing the economy to a point where hopefully some downward trend in prices will occur , '' said Mr. Guffey .
Bush administration officials are looking to the Fed to bring down rates , and financial markets seem to be expecting easier credit as well. '' I think the market had been expecting the Fed to ease sooner and a little more than it has to date , '' said Robert Johnson , vice president of global markets for Bankers Trust Co .
The Fed cut the key federal funds interest rate by about 0.25 percentage point to 8.75 % after the Oct. 13 stock market plunge , but has shown no sign of movement since .
The report from the Fed found that manufacturing , in particular , has been weak in recent weeks .
The Philadelphia Fed , for instance , reported that manufacturing activity '' continues to decline '' for the fourth month in a row .
And in the Chicago district , the report said , '' a manufacturer of capital goods noted slower orders for some types , including defense equipment , petroleum equipment , food packaging machinery and material handling equipment. '' Retail sales also were reported slow in most districts , particularly '' for discretionary , big-ticket items such as furniture , home appliances and consumer electronics. '' And construction also was described as slow in most areas .
Despite the economic slowdown , there are few clear signs that growth is coming to a halt .
As a result , Fed officials may be divided over whether to ease credit .
Several Fed governors in Washington have been pushing for easier credit ; but many of the regional Fed presidents have been resisting such a move .
Mr. Black said he is '' pleased '' with the economy 's recent performance , and does n't see '' a lot of excesses out there that would tilt us into recession . ''
``There is always a chance of recession , '' added Mr. Guffey , '' but if you ask me to put a percentage on it , I would think it 's well below a 50 % chance . ''
Integra-A Hotel & Restaurant Co. said its planned rights offering to raise about $ 9 million was declared effective and the company will begin mailing materials to shareholders at the end of this week .
Under the offer , shareholders will receive one right for each 105 common shares owned .
Each right entitles the shareholder to buy $ 100 face amount of 13.5 % bonds due 1993 and warrants to buy 23.5 common shares at 30 cents a share .
The rights , which expire Nov. 21 , can be exercised for $ 100 each .
Integra , which owns and operates hotels , said that Hallwood Group Inc. has agreed to exercise any rights that are n't exercised by other shareholders .
Hallwood , a Cleveland merchant bank , owns about 11 % of Integra .
Copperweld Corp. , a specialty steelmaker , said 445 workers at a plant in Shelby , Ohio , began a strike after the United Steelworkers Local 3057 rejected a new contract on Tuesday .
The previous contract between Copperweld 's Ohio Steel Tube division and the union expired at midnight Tuesday .
The union vote to reject the proposed pact was 230-215 .
Copperweld said it does n't expect a protracted strike .
It said it has taken measures to continue shipments during the work stoppage .
The Treasury said it plans to sell $ 30 billion in notes and bonds next week , but said the auctions will be postponed unless Congress acts quickly to lift the federal debt ceiling .
Michael Basham , deputy assistant secretary for federal finance , said the Treasury may wait until late Monday or even early Tuesday to announce whether the autions are to be rescheduled .
Unless it can raise money in financial markets , Mr. Basham said , the federal government wo n't have the cash to pay off $ 13.8 billion in Treasury bills that mature on Thursday .
Without congressional action , the Treasury ca n't sell any new securities -- even savings bonds .
But despite partisan bickering over the debt ceiling , which has become entangled in the fight over cutting capital-gains taxes , Congress is almost certain to act in time to avoid default .
``Each day that Congress fails to act . . . will cause additional disruption in our borrowing schedule , possibly resulting in higher interest costs to the taxpayer , '' Treasury Secretary Nicholas Brady said in a speech prepared for delivery last night to a group of bankers. '' To avoid these costs , and a possible default , immediate action is imperative . ''
The securities to be sold next week will raise about $ 10 billion in cash and redeem $ 20 billion in maturing notes .
The new securities , part of the federal government 's regular quarterly refunding , will consist of :
-- $ 10 billion of three-year notes , to be auctioned Tuesday and to mature Nov. 15 , 1992 .
-- $ 10 billion of 10-year notes , to be auctioned Wednesday and to mature Nov. 15 , 1999 .
-- $ 10 billion of 30-year bonds , to be auctioned Thursday and to mature Aug. 15 , 2019 .
The Treasury also said it plans to sell $ 10 billion in 36-day cash management bills on Thursday .
They will mature Dec. 21 .
None of the securities will be eligible for when-issued trading until Congress approves an increase in the debt ceiling , clearing the way for a formal offering , Mr. Basham said .
The Treasury said it needs to raise $ 47.5 billion in the current quarter in order to end December with a $ 20 billion cash balance .
Auctions held in October and those scheduled for next week will raise a total of $ 25.6 billion .
The remaining $ 21.9 billion could be raised through the sale of short-term Treasury bills , two-year notes in November and five-year notes in early December , the Treasury said .
In the first three months of 1990 , the Treasury estimates that it will have to raise between $ 45 billion and $ 50 billion , assuming that it decides to aim for a $ 10 billion cash balance at the end of March .
Lancaster Colony Corp. said it acquired Reames Foods Inc. in a cash transaction .
Terms were n't disclosed .
Reames , a maker and marketer of frozen noodles and pre-cooked pasta based in Clive , Iowa , has annual sales of about $ 11 million , Lancaster said .
Investors took advantage of Tuesday 's stock rally to book some profits yesterday , leaving stocks up fractionally .
Bond prices and the dollar both gained modestly .
The Dow Jones Industrial Average finished less than a point higher to close at 2645.90 in moderate trading .
But advancing issues on the New York Stock Exchange were tidily ahead of declining stocks , 847 to 644 .
Long-term bond prices rose despite prospects of a huge new supply of Treasury debt this month .
Continuing demand for dollars from Japanese investors boosted the U.S. currency .
Analysts were disappointed that the enthusiasm investors showed for stocks in the wake of Georgia-Pacific 's $ 3.18 billion bid for Great Northern Nekoosa evaporated so quickly .
The industrial average jumped more than 41 points Tuesday as speculators rushed to buy shares of potential takeover targets .
But with the end of the year in sight , money managers are eager to take profits and cut their risks of losing what for many have been exceptionally good returns in
Economic news had little effect on financial markets .
As expected , a national purchasing managers ' report indicated the nation 's manufacturing sector continues to contract modestly .
The Federal Reserve 's Beige Book , a summary of economic conditions across the country , indicated that the overall economy remains in a pattern of sluggish growth .
In major market activity :
Stock prices rose fractionally in moderate trading .
Big Board volume totaled 154.2 million shares .
Bond prices were up .
The Treasury 's benchmark 30-year bond gained about a quarter of a point , or $ 2.50 for each $ 1 , 000 of face amount .
The yield fell to 7.88 % .
The dollar rose .
In late afternoon New York trading the currency was at 1.8500 marks and 143.80 yen compared with 1.8415 marks and 142.85 yen .
Mitsui Mining & Smelting Co. posted a 62 % rise in pretax profit to 5.276 billion yen ( $ 36.9 million ) in its fiscal first half ended Sept. 30 compared with 3.253 billion yen a year earlier .
Net income more than tripled to 4.898 billion yen from 1.457 billion yen a year earlier .
Eaton Corp. said it sold its Pacific Sierra Research Corp. unit to a company formed by employees of that unit .
Terms were n't disclosed .
Pacific Sierra , based in Los Angeles , has about 200 employees and supplies professional services and advanced products to industry .
Eaton is an automotive parts , controls and aerospace electronics concern .
Investor Harold Simmons and NL Industries Inc. offered to acquire Georgia Gulf Corp. for $ 50 a share , or about $ 1.1 billion , stepping up the pressure on the commodity chemicals concern .
The offer follows an earlier proposal by NL and Mr. Simmons to help Georgia Gulf restructure or go private in a transaction that would pay shareholders $ 55 a share .
Georgia Gulf rebuffed that offer in September and said it would study other alternatives .
However , it has n't yet made any proposals to shareholders .
Late yesterday , Georgia Gulf said it reviewed the NL proposal as well as interests from '' third parties '' regarding business combinations .
Georgia Gulf said it has n't eliminated any alternatives and that '' discussions are being held with interested parties , and work is also continuing on other various transactions. '' It did n't elaborate .
Analysts saw the latest offer as proof that Mr. Simmons , an aggressive and persistent investor , wo n't leave Georgia Gulf alone until some kind of transaction is completed. '' He has clamped on their ankle like a pit bull , '' says Paul Leming , a vice president with Morgan Stanley & Co. '' He appears to be in it for the long haul. '' Mr. Simmons and NL already own a 9.9 % stake in Georgia Gulf .
Mr. Simmons owns 88 % of Valhi Inc. , which in turn owns two-thirds of NL. NL is officially making the offer .
Mr. Leming was n't surprised by the lower price cited by NL , saying he believes that $ 55 a share is '' the most you can pay for Georgia Gulf before it becomes a bad acquisition . ''
Georgia Gulf stock rose $ 1.75 a share yesterday to close at $ 51.25 a share , while NL shares closed unchanged at $ 22.75 and Valhi rose 62.5 cents to $ 15 , all in New York Stock Exchange composite trading .
J. Landis Martin , NL president and chief executive officer , said NL and Mr. Simmons cut the price they were proposing for Georgia Gulf because they initially planned a transaction that included about $ 250 million in equity and a substantial amount of high-yield subordinated debt .
However , the junk-bond market has collapsed in recent weeks , lessening the likelihood that such a transaction would succeed .
Now , he said , the group plans to put in '' several hundred million '' dollars in equity and finance the remainder with bank debt .
He also said that the group reduced its offer because it was n't allowed to see Georgia Gulf 's confidential financial information without agreeing that it would n't make an offer unless it had Georgia Gulf 's consent .
In a letter to Georgia Gulf President Jerry R. Satrum , Mr. Martin asked Georgia Gulf to answer its offer by Tuesday .
It was n't clear how NL and Mr. Simmons would respond if Georgia Gulf spurns them again .
Mr. Martin said they have n't yet decided what their next move would be , but he did n't rule out the possibility of a consent solicitation aimed at replacing Georgia Gulf 's board .
In other transactions , Mr. Simmons has followed friendly offers with a hostile tender offer .
Although Georgia Gulf has n't been eager to negotiate with Mr. Simmons and NL , a specialty chemicals concern , the group apparently believes the company 's management is interested in some kind of transaction .
The management group owns about 18 % of the stock , most purchased at nominal prices , and would stand to gain millions of dollars if the company were sold .
In the third quarter , Georgia Gulf earned $ 46.1 million , or $ 1.85 a share , down from $ 53 million , or $ 1.85 a share on fewer shares outstanding .
Sales fell to $ 251.2 million from $ 278.7 million .
A licensing company representing the University of Pennsylvania added Johnson & Johnson to its lawsuit challenging a university faculty member over rights to Retin-A acne medicine .
University Patents Inc. , based in Westport , Conn. , said it seeks Johnson & Johnson 's profits from sales of Retin-A , estimated at $ 50 million , a similar amount of punitive damages and the right to license Retin-A elsewhere .
In May , University Patents filed a suit in federal court in Philadelphia against Albert M. Kligman , a researcher and professor at the University of Pennsylvania School of Medicine who developed Retin-A in the 1960s to combat acne .
Dr. Kligman patented the medicine while employed by the University , but later licensed the Retin-A to a division of Johnson & Johnson .
In New Brunswick , N.J. , a Johnson & Johnson spokesman declined comment .
Criticism in the U.S. over recent Japanese acquisitions is looming ever larger in the two countries ' relations .
Officials from both nations say the U.S. public 's skittishness about Japanese investment could color a second round of bilateral economic talks scheduled for next week in Washington .
Not that Washington and Tokyo disagree on the Japanese acquisitions ; indeed , each has come out in favor of unfettered investment in the U.S .
Where they disagree is on the subject of U.S. direct investment in Japan .
The U.S. wants the removal of what it perceives as barriers to investment ; Japan denies there are real barriers .
The heated talk stirred up by recent Japanese investments in the U.S. is focusing attention on the differences in investment climate , even though it 's only one of many subjects to be covered in the bilateral talks , known as the Structural Impediments Initiative .
The Japanese '' should see this rhetoric as a signal of the need for a change in their own economy , '' says Charles Dallara , U.S. assistant Treasury secretary , who has been in Tokyo this week informally discussing the impending negotiations with government and business leaders .
``We have a long history of maintaining an open direct-investment policy , '' Mr. Dallara says. '' U.S. investors should have a greater opportunity at direct investment '' in Japan .
The Japanese fret openly about the U.S. public 's rancor .
One clear sign of Japan 's nervousness came this week , when a spokesman for Japan 's Foreign Ministry devoted nearly all of a regular , half-hour briefing for foreign journalists to the subject of recent Japanese investments in the U.S .
``We believe that it is vitally important for those Japanese business interests { in the U.S. } to be more aware of the emotions and concerns of the American people , '' said the spokesman , Taizo Watanabe .
At the same time , though , he chastised the media for paying such close attention to Japanese investment when other foreign countries , notably Britain , are acquiring more American assets .
Fears that Japanese investors are buying up America have escalated sharply in the past several weeks , with Sony Corp. 's purchase of Columbia Pictures Entertainment Inc. from Coca-Cola Co. and Mitsubishi Estate Co. 's acquisition of a 51 % holding in Rockefeller Group , the owner of some of midtown Manhattan 's most exclusive real estate .
Even before those moves added fuel , the fires of discontent had been well stoked by the highly publicized experience in Japan of one U.S. investor , T. Boone Pickens Jr .
The Texas oilman has acquired a 26.2 % stake valued at more than $ 1.2 billion in an automotive-lighting company , Koito Manufacturing Co .
But he has failed to gain any influence at the company .
Koito has refused to grant Mr. Pickens seats on its board , asserting he is a greenmailer trying to pressure Koito 's other shareholders into buying him out at a profit .
Mr. Pickens made considerable political hay with his troubles in Japan .
The Senate Finance Committee , chaired by a fellow Texan , Democratic Sen. Lloyd Bentsen , last month urged U.S. Trade Representative Carla Hills to use Mr. Pickens 's experience in talks with Tokyo '' to highlight this problem facing Americans who seek access to the Japanese capital markets . ''
While Mr. Dallara and Japanese officials say the question of investors ' access to the U.S. and Japanese markets may get a disproportionate share of the public 's attention , a number of other important economic issues will be on the table at next week 's talks .
Among them are differences in savings and investment rates , corporate structures and management , and government spending .
Each side has a litany of recommendations for the other .
The U.S. says it is anxious for results. '' We feel very strongly that we really need action across the full range of issues we 've identified , and we need it by next spring , '' Mr. Dallara says .
Both sides have agreed that the talks will be most successful if negotiators start by focusing on the areas that can be most easily changed .
But they have n't clarified what those might be .
After the first set of meetings two months ago , some U.S. officials complained that Japan had n't come up with specific changes it was prepared to make .
The Japanese retort that the first round was too early to make concessions .
``Just to say the distribution system is wrong does n't mean anything , '' says a Ministry of International Trade and Industry official. '' We need to clarify what exactly is wrong with it . ''
That process of sorting out specifics is likely to take time , the Japanese say , no matter how badly the U.S. wants quick results .
For instance , at the first meeting the two sides could n't even agree on basic data used in price discussions .
Since then , a team of about 15 MITI and U.S. Commerce Department officials have crossed the globe gauging consumer prices .
By Monday , they hope to have a sheaf of documents both sides can trust .
``Little by little , there is progress , '' says the MITI official. '' Both sides are taking action . ''
Elisabeth Rubinfien contributed to this article .
While worry grows about big Japanese investments in the U.S. , Japan 's big trading companies are rapidly increasing their stake in America 's smaller business .
For Japan , the controversial trend improves access to American markets and technology .
But for small American companies , it also provides a growing source of capital and even marketing help .
Take the deal with Candela Laser Corp. , a Wayland , Mass. , manufacturer of high-tech medical devices , which three years ago set its sights on Japan as an export market .
Partly to help clear the myriad obstacles facing any overseas company trying to penetrate Japan , tiny Candela turned to Mitsui & Co. , one of Japan 's largest trading companies , for investment .
In a joint-venture deal , Mitsui guided Candela through Tokyo 's bureaucratic maze .
It eventually secured Ministry of Health import approval for two Candela laser products -- one that breaks up kidney stones and another that treats skin lesions .
At last count , Candela had sold $ 4 million of its medical devices in Japan .
The deal also gave Mitsui access to a high-tech medical product. '' They view this as a growth area so they went about it with a systematic approach , '' says Richard Olsen , a Candela vice president .
Indeed , for many Japanese trading companies , the favorite U.S. small business is one whose research and development can be milked for future Japanese use .
The Japanese companies bankroll many small U.S. companies with promising products or ideas , frequently putting their money behind projects that commercial banks wo n't touch .
Japanese companies have financed small and medium-sized U.S. firms for years , but in recent months , the pace has taken off .
In the first half of 1989 alone , Japanese corporations invested $ 214 million in minority positions in U.S. companies , a 61 % rise from the figure for all of 1987 , reports Venture Economics Inc .
The Needham , Mass. , concern tracks investments in new businesses .
In addition , of course , some of the Japanese investments involved outright purchase of small U.S. firms .
Heightened Japanese interest in American small business parallels an acceleration of investments giving Japanese companies control of large , highly visible U.S. corporations , such as Columbia Pictures Entertainment Inc. Only this week , it was announced that Mitsubishi Estate Co. had acquired a 51 % stake in Rockefeller Group , which owns New York 's prestigious Rockefeller Center .
While the small deals are far less conspicuous , they add to Japanese penetration of the U.S. market .
As the deals also improve Japanese access to American technology and market knowledge , they feed American anxieties in this area , too .
Even a low-tech product like plate glass can catch a trading company 's fancy if there 's a strategic fit .
Free State Glass Industries of Warrenton , Va. , a small fabricator of architectural glass , was foundering under its original management .
Last year , Mitsubishi International Corp. , the New York-based arm of Mitsubishi Corp. , bought controlling interest in the glass company in a joint venture with Ronald Bodner , a glass industry executive and Mitsubishi consultant .
The deal is chiefly designed to give Mitsubishi a window on the U.S. glass industry , says Ichiro Wakui , an executive in Mitsubishi 's general merchandise department in New York. '' It 's not just a simple investment in a small company , '' Mr. Wakui says. '' We want to see the glass market from the inside , not the outside . ''
Mitsubishi 's investment in Free State is '' very small . . . less than $ 4 million , '' Mr. Wakui says .
Mr. Bodner declines to comment on the arrangement .
Trading companies such as Mitsubishi , Mitsui , C. Itoh & Co. and Nissho-Iwai Corp. , which make many of the Japanese investments in small U.S. concerns , have no U.S. counterpart .
These vertically integrated combines , some of which got their start in Japan 's feudal period , deal globally in commodities , construction and manufacturing .
They operate ships and banks .
``All the '' sogo-shosha '' are looking for new business , '' says Arthur Klauser , adviser to the president of Mitsui , U.S.A. , using the Japanese term for the largest of the global trading houses .
Adds Takeshi Kondo , senior vice president of C. Itoh America Inc. : '' We have a great interest in making investments , particularly in new ventures . ''
A host of electronics firms in California 's Silicon Valley were financed with trading-company venture capital .
Profit , at least in the short term , is usually a secondary goal. '' Strategic objectives , not financial return , drive many of the deals , '' says a Venture Economics spokesman .
In investing on the basis of future transactions , a role often performed by merchant banks , trading companies can cut through the logjam that small-company owners often face with their local commercial banks. '' It 's the classic problem of the small businessman , '' says Malcolm Davies , managing director of Trading Alliance Corp. of New York. '' People are queuing at the door to take his product but he does n't have the working capital to make the thing and commercial banks are very unsympathetic .
They want assets , they want a balance sheet , which has no relation to the business a company can generate . ''
Adds Mitsui 's Mr. Klauser : '' Unlike corporations in this country , trading companies are n't so much interested in a high return on investment as they are on increasing trade flows .
To the extent they can do this , they 're quite content to get a return on investment of 1 % to 2 % . ''
Mr. Klauser says Mitsui has 75 U.S. subsidiaries in which it holds 35 % interest or more and the trading company hopes to double the number of its U.S. affiliates in 1990 .
Sales by these subsidiaries in the fiscal year ending last March were more than $ 17 billion .
A 1 % to 2 % return on $ 17 billion '' ai n't hay , '' Mr. Klauser says .
Hudson General Corp. 's president and chief executive officer , Alan J. Stearn , resigned .
Mr. Stearn , 46 years old , could n't be reached for comment .
A company spokesman declined to elaborate on the departure .
Hudson General , which provides maintenance , fueling and other services to airlines and airports , reported a loss for its most recent fiscal year and last month omitted the semiannual dividend on its common shares .
Mr. Stearn , who had been with the company more than 20 years and had been president since 1984 , will act as a consultant to Hudson General .
His duties as chief executive will be assumed by Chairman Jay B. Langner .
For 10 years , Genie Driskill went to her neighborhood bank because it was convenient .
A high-balance customer that banks pine for , she did n't give much thought to the rates she was receiving , nor to the fees she was paying .
But in August , First Atlanta National Bank introduced its Crown Account , a package designed to lure customers such as Ms. Driskill .
Among other things , it included checking , safe deposit box and credit card -- all for free -- plus a good deal on installment loans .
All she had to do was put $ 15 , 000 in a certificate of deposit , or qualify for a $ 10 , 000 personal line of credit .
``I deserve something for my loyalty , '' she says .
She took her business to First Atlanta .
So it goes in the competitive world of consumer banking these days .
For nearly a decade , banks have competed for customers primarily with the interest rates they pay on their deposits and charge on their loans .
The competitive rates were generally offset by hefty fees on various services .
But many banks are turning away from strict price competition .
Instead , they are trying to build customer loyalty by bundling their services into packages and targeting them to small segments of the population .
``You 're dead in the water if you are n't segmenting the market , '' says Anne Moore , president of Synergistics Research Corp. , a bank consulting firm in Atlanta .
NCNB Corp. of Charlotte , N.C. , recently introduced its Financial Connections Program aimed at young adults just starting careers .
The program not only offers a pre-approved car loan up to $ 18 , 000 , but throws in a special cash-flow statement to help in saving money .
In September , Union Planters Corp. of Memphis , Tenn. , launched The Edge account , a package designed for the '' thirtysomething '' crowd with services that include a credit card and line of credit with no annual fees , and a full percentage point off on installment loans .
The theory : Such individuals , many with young children , are in their prime borrowing years -- and , having borrowed from the bank , they may continue to use it for other services in later years .
For some time , banks have been aiming packages at the elderly , the demographic segment with the highest savings .
Those efforts are being stepped up .
Judie MacDonald , vice president of retail sales at Barnett Banks Inc. of Jacksonville , Fla. , says the company now targets sub-segments within the market by tailoring its popular Seniors Partners Program to various life styles .
``Varying age , geography and life-style differences create numerous sub-markets , '' Ms. MacDonald says .
She says individual Barnett branches can add different benefits to their Seniors Partners package -- such as athletic activities or travel clubs -- to appeal to local market interests. '' An active 55-year-old in Boca Raton may care more about Senior Olympic games , while a 75-year-old in Panama City may care more about a seminar on health , '' she says .
Banks have tried packaging before .
In 1973 , Wells Fargo & Co. of San Francisco launched the Gold Account , which included free checking , a credit card , safe-deposit box and travelers checks for a $ 3 monthly fee .
The concept begot a slew of copycats , but the banks stopped promoting the packages .
One big reason : thin margins .
Many banks , particularly smaller ones , were slow to computerize and could n't target market niches that would have made the programs more profitable .
As banks ' earnings were squeezed in the mid-1970s , the emphasis switched to finding ways to cut costs .
But now computers are enabling more banks to analyze their customers by age , income and geography .
They are better able to get to those segments in the wake of the deregulation that began in the late 1970s .
Deregulation has effectively removed all restrictions on what banks can pay for deposits , as well as opened up the field for new products such as high-rate CDs .
Where a bank once offered a standard passbook savings account , it began offering money-market accounts , certificates of deposit and interest-bearing checking , and staggering rates based on the size of deposits .
The competition has grown more intense as bigger banks such as Norwest Corp. of Minneapolis and Chemical Banking Corp. of New York extend their market-share battles into small towns across the nation. '' Today , a banker is worrying about local , regional and money-center { banks } , as well as thrifts and credit unions , '' says Ms. Moore at Synergistics Research. '' So people who were n't even thinking about targeting 10 years ago are scrambling to define their customer base . ''
The competition has cultivated a much savvier consumer. '' The average household will spread 19 accounts over a dozen financial institutions , '' says Michael P. Sullivan , who runs his own bank consulting firm in Charlotte , N.C. '' This much fragmentation makes attracting and keeping today 's rate-sensitive customers costly . ''
Packages encourage loyalty by rewarding customers for doing the bulk of their banking in one place .
For their troubles , the banks get a larger captive audience that is less likely to move at the drop of a rate .
The more accounts customers have , Mr. Sullivan says , the more likely they are to be attracted to a package -- and to be loyal to the bank that offers it .
That can pay off down the road as customers , especially the younger ones , change from borrowers to savers/investors .
Packaging has some drawbacks .
The additional technology , personnel training and promotional effort can be expensive .
Chemical Bank spent more than $ 50 million to introduce its ChemPlus line , several packages aimed at different segments , in 1986 , according to Thomas Jacob , senior vice president of marketing. '' It 's not easy to roll out something that comprehensive , and make it pay , '' Mr. Jacob says .
Still , bankers expect packaging to flourish , primarily because more customers are demanding that financial services be tailored to their needs. '' These days , banking customers walk in the door expecting you to have a package especially for them , '' Ms. Moore says .
Some banks are already moving in that direction , according to Alvin T. Sale , marketing director at First Union Corp. in Charlotte .
First Union , he says , now has packages for seven customer groups .
Soon , it will split those into 30 .
Says Mr. Sale : '' I think more banks are starting to realize that we have to be more like the department store , not the boutique . ''
IRAs .
SHAREDATA Inc. said it will amend a registration statement filed with the Securities and Exchange Commission to delete a plan to sell 500 , 000 newly issued common shares .
The Chandler , Ariz. , company said it will resubmit the registration to cover only the 2.3 million warrants , each exercisable for the purchase of one common share .
Currently , ShareData has about 4.1 million common shares outstanding .
ShareData develops and markets low-cost software , peripheral equipment and accessories for computers .
Five things you can do for $ 15 , 000 or less :
1 .
Buy a new Chevrolet .
2 .
Take a Hawaiian vacation .
3 .
Send your child to a university .
4 .
Buy a diamond necklace .
5 .
Make a lasting difference in the regulatory life of an American savings-and-loan association through the Foster Corporate Parents Plan .
Americans today spend $ 15 , 000 like pocket change -- they do n't think much about it .
But for an ailing savings-and-loan association -- teetering on insolvency -- it can lead to safety from imminent demise and to a future full of promise .
Your $ 15 , 000 will help keep a needy savings and loan solvent -- and out of the federal budget deficit .
As a Foster Corporate Parent , you 'll be helping a neighborhood S & L in areas crucial to its survival .
Like healthy regulatory capital .
A steady deposit base .
Performing loans .
At the same time , you 'll give your Foster Savings Institution the gift of hope and freedom from the federal regulators who want to close its doors -- for good .
As a Foster Corporate Parent , you will experience the same joy felt by Robert Bass , Lewis Ranieri , William Simon and others , who find ways to help troubled savings institutions and their employees help themselves .
That builds confidence , self sufficiency , not to mention critical regulatory net worth .
Do n't wait -- a savings institution needs your help now !
Every day you delay , a savings institution 's health -- and the federal budget deficit -- grows worse .
Think about the good you can do for just $ 15 , 000 a month , about the cost of a mid-size Chevrolet or two semesters at a state university .
Then send your support to a savings institution that has taken a bad rap in the press and on its bottom line .
Every $ 15 , 000 you send will go a long way to boost sagging net worth and employee morale -- and keep your Foster Savings Institution off the federal budget deficit !
Mr. Baris is a lawyer in New York .
The Chicago Mercantile Exchange said it plans to institute an additional '' circuit breaker '' aimed at stemming market slides .
Separately , John Phelan told a closed House subcommittee meeting in Washington that he would support Securities and Exchange Commission halts of program trading during market emergencies .
But the New York Stock Exchange chairman said he does n't support reinstating a '' collar '' on program trading , arguing that firms could get around such a limit .
The Chicago Merc said a new one-hour price limit would take effect in its Standard & Poor 's 500 stock-index futures pit once S & P 500 futures fell 20 index points -- the equivalent of about a 150-point drop in the Dow Jones Industrial Average .
If the 20-point limit is triggered after 1 : 30 p.m. Chicago time , it would remain in effect until the normal close of trading at 3 : 15 p.m .
With the limit in effect , members would be able to execute trades at the limit price or at higher prices , but not below it .
The exchange said it decided a new circuit breaker was needed following a review of the tumultuous trading in stocks and stock-index futures on Friday Oct. 13 , when the Dow Jones industrials plunged 190 points and stock-index futures prices skidded as well .
Late that afternoon the S & P 500 stock-index futures contract fell a total of 30 index points , hitting a Merc circuit breaker limit that remained in effect for the rest of the trading session .
The Merc said that its existing 30-minute , 12-point limit on S & P 500 stock-index futures trading ( equal to about 100 points on the Dow Jones industrials ) , which was triggered Oct. 13 , will remain in effect .
Leo Melamed , Merc executive committee chairman , said that the 12-point limit appeared to lessen the selling panic Oct. 13 .
But when the contract reopened , the subsequent flood of sell orders that quickly knocked the contract down to the 30-point limit indicated that the intermediate limit of 20 points was needed to help keep stock and stock-index futures prices synchronized .
Several traders maintained that the Merc 's 12-point circuit-breaker aggravated the market slide Oct. 13 by directing additional selling pressure to the floor of the New York Stock Exchange .
All of the changes require regulatory approval , which is expected shortly .
The exchange also said that the 30-point circuit breaker , which currently provides only a one-hour respite during market sell-offs , will become the maximum one-day limit for the S & P 500 stock-index futures contract ; the one-day limit now is 50 index points .
A final modification was made to the five-point opening limit for the contract .
The Merc said that five-point limit will remain in effect for the first 10 minutes of trading .
The limit lapses under current exchange rules if contracts trade above the limit price during the opening 10 minutes of trading .
In Washington , House aides said Mr. Phelan told congressmen that the collar , which banned program trades through the Big Board 's computer when the Dow Jones Industrial Average moved 50 points , did n't work well .
He said that firms could get around the collar by executing trades manually .
In a post-hearing news conference , Mr. Phelan , who has publicly expressed concern about market volatility , said he told the House finance and telecommunications subcommittee that he would support the program-trading halt proposal '' providing the SEC would be comfortable with the language '' in a bill .
The program-trading issue is heating up on Capitol Hill as it is on Wall Street , and several legislators want to grant the SEC the power to shut off the programs when trading becomes too volatile .
SEC Chairman Richard Breeden has said he would be willing to consider circuit breakers that have preset trigger points , but he does n't want discretionary power to stop programs .
A House aide suggested that Mr. Phelan was so '' vague and mushy '' that it was the kind of meeting where people of all viewpoints could '' come out feeling good. '' At one point , Mr. Phelan angered the subcommittee 's chairman , Rep. Edward Markey ( D. , Mass. ) , by not going much beyond what already had been reported in the morning newspapers .
``Markey said we could have done this in public '' because so little sensitive information was disclosed , the aide said .
Mr. Phelan then responded that he would have been happy just writing a report to the panel , the aide added .
At another point during the hearing , Rep. Markey asked Mr. Phelan what would be discussed at a New York exchange board meeting today .
Mr. Phelan said the Big Board is likely to study the program-trading issue .
That response annoyed Rep. Markey , House aides said , and the congressman snapped back that there had been enough studies of the issue and that it was time for action on the matter .
Fifteen of the 26 subcommittee members attended the hearing , most notably Rep. John Dingell ( D. , Mich. ) , the full House Energy and Commerce Committee chairman , who has been willing to let Mr. Markey carry the legislation in recent months .
Mr. Dingell expressed concern , sources said , about jurisdictional problems in regulating program trading , which uses futures to offset stock trades .
The futures industry is regulated by the Commodity Futures Trading Commission , which reports to the Agriculture committees in both houses .
The art of change-ringing is peculiar to the English , and , like most English peculiarities , unintelligible to the rest of the world .
-- Dorothy L. Sayers , '' The Nine Tailors ''
ASLACTON , England -- Of all scenes that evoke rural England , this is one of the loveliest : An ancient stone church stands amid the fields , the sound of bells cascading from its tower , calling the faithful to evensong .
The parishioners of St. Michael and All Angels stop to chat at the church door , as members here always have .
In the tower , five men and women pull rhythmically on ropes attached to the same five bells that first sounded here in 1614 .
But there is also a discordant , modern note in Aslacton , though it ca n't be heard by the church-goers enjoying the peal of bells this cool autumn evening .
Like most of the other 6 , 000 churches in Britain with sets of bells , St. Michael once had its own '' band '' of ringers , who would herald every Sunday morning and evening service .
Now , only one local ringer remains : 64-year-old Derek Hammond .
The others here today live elsewhere .
They belong to a group of 15 ringers -- including two octogenarians and four youngsters in training -- who drive every Sunday from church to church in a sometimes-exhausting effort to keep the bells sounding in the many belfries of East Anglia .
``To ring for even one service at this tower , we have to scrape , '' says Mr. Hammond , a retired water-authority worker. '' We 've tried to train the youngsters , but they have their discos and their dances , and they just drift away . ''
Mr. Hammond worries that old age and the flightiness of youth will diminish the ranks of the East Anglian group that keeps the Aslacton bells pealing .
History , after all , is not on his side .
According to a nationwide survey taken a year ago , nearly a third of England 's church bells are no longer rung on Sundays because there is no one to ring them .
It is easy to see why the ancient art is on the ropes .
The less complicated version of playing tunes on bells , as do the carillons of continental Europe , is considered by the English to be childish , fit only for foreigners .
Change-ringing , a mind-boggling exercise the English invented 380 years ago , requires physical dexterity -- some bells weigh more than a ton -- combined with intense mental concentration .
Proper English bells are started off in '' rounds , '' from the highest-pitched bell to the lowest -- a simple descending scale using , in larger churches , as many as 12 bells .
Then , at a signal , the ringers begin varying the order in which the bells sound without altering the steady rhythm of the striking .
Each variation , or change , can occur only once , the rules state .
Ringers memorize patterns of changes , known as '' methods , '' which have odd-sounding names like Kent Treble Bob Major or Grandsire Caters .
A series of 5 , 000 or so changes is a '' peal '' and takes about three hours .
A look at a Thursday night practice at St. Mary Abbot church in the Kensington district of London gives an idea of the work involved .
Ten shirt-sleeved ringers stand in a circle , one foot ahead of the other in a prize-fighter 's stance , each pulling a rope that disappears through a small hole in the high ceiling of the ringing chamber .
No one speaks , and the snaking of the ropes seems to make as much sound as the bells themselves , muffled by the ceiling .
Totally absorbed , the ringers stare straight ahead , using peripheral vision ( they call it '' rope-sight '' ) to watch the other ropes and thus time their pulls .
Far above in the belfry , the huge bronze bells , mounted on wheels , swing madly through a full 360 degrees , starting and ending , surprisingly , in the inverted , or mouth-up position .
Skilled ringers use their wrists to advance or retard the next swing , so that one bell can swap places with another in the following change .
In a well-known detective-story involving church bells , English novelist Dorothy L. Sayers described ringing as a '' passion { that } finds its satisfaction in mathematical completeness and mechanical perfection. '' Ringers , she added , are '' filled with the solemn intoxication that comes of intricate ritual faultlessly performed . ''
``Ringing does become a bit of an obsession , '' admits Stephanie Pattenden , master of the band at St. Mary Abbot and one of England 's best female ringers .
It is a passion that usually stays in the tower , however .
More often than not , ringers think of the church as something stuck on the bottom of the belfry .
When their changes are completed , and after they have worked up a sweat , ringers often skip off to the local pub , leaving worship for others below .
This does not sit well with some clerics .
With membership of the Church of England steadily dwindling , strong-willed vicars are pressing equally strong-willed and often non-religious ringers to attend services .
Two years ago , the Rev. Jeremy Hummerstone , vicar of Great Torrington , Devon , got so fed up with ringers who did n't attend service he sacked the entire band ; the ringers promptly set up a picket line in protest. '' They were a self-perpetuating club that treated the tower as sort of a separate premises , '' the Vicar Hummerstone says .
An entirely new band rings today at Great Torrington , several of whom are members of the congregation .
But there still are n't enough ringers to ring more than six of the eight bells .
At St. Mary 's Church in Ilminster , Somerset , the bells have fallen silent following a dust-up over church attendance .
The vicar , W.D. Jones , refuses to talk about it , saying it would '' reopen the wound. '' But C.J.B. Marshall , vicar of a nearby church , feels the fault is in the stairs from the bell tower that are located next to the altar. '' So crunch , crunch , crunch , bang , bang , bang -- here come the ringers from above , making a very obvious exit while the congregation is at prayer , '' he says .
Vicar Marshall admits to mixed feelings about this issue , since he is both a vicar and an active bell-ringer himself. '' The sound of bells is a net to draw people into the church , '' he says. '' I live in hopes that the ringers themselves will be drawn into that fuller life . ''
The Central Council of Church Bell Ringers , a sort of parliament of ringing groups , aims to improve relations with vicars , says John C. Baldwin , president .
It hopes to speak to students at theological colleges about the joys of bell ringing and will shortly publish a booklet for every vicar in the country entitled , '' The Bells in Your Care. '' Says Mr. Baldwin , '' We recognize that we may no longer have as high a priority in church life and experience . ''
Mr. Baldwin is also attacking the greater problem : lack of ringers .
One survey says that of the 100 , 000 trained bellringers in England today , only 40 , 000 of them still ring .
Also , ringers do n't always live where the bells need to be rung -- like in small , rural parishes and inner-city churches .
But the council 's program to attract and train ringers is only partly successful , says Mr. Baldwin. '' Right now , we 're lucky if after five years we keep one new ringer out of 10 , '' he adds .
One bright sign is that a growing number of women have entered the once male-dominated field ; more than a third of the ringers today are women .
They are n't accepted everywhere , however .
The oldest bell-ringing group in the country , the Ancient Society of College Youths , founded in 1637 , remains male-only , a fact that 's particularly galling to women because the group is the sole source of ringers for Britain 's most prestigious churches , St. Paul 's Cathedral and Westminster Abbey .
This being Britain , no woman has filed an equal-opportunity suit , but the extent of the problem surfaced this summer in a series of letters to '' The Ringing World , '' a weekly newspaper for ringers .
One writer , signing his letter as '' Red-blooded , balanced male , '' remarked on the '' frequency of women fainting in peals , '' and suggested that they '' settle back into their traditional role of making tea at meetings . ''
In the torrent of replies that followed , one woman ringer from Solihull observed that '' the average male ringer leaves quite a lot to be desired : badly dressed , decorated with acne and a large beer-belly , frequently unwashed and unbearably flatulent in peals. '' Another women wrote from Sheffield to say that in her 60 years of ringing , '' I have never known a lady to faint in the belfry .
I have seen one or two men die , bless them . ''
Investors unsettled by the stock market 's gyrations can take some comfort in the predictable arrival of quarterly dividend checks .
That has been particularly true this year with many companies raising their payouts more than 10 % .
But do n't breathe too easy : Those dividend increases may signal trouble ahead for stock prices , some analysts warn .
In the past , they say , the strongest dividend growth has often come at times when the stock-market party was almost over .
That can be a trap for unwary investors , says Richard Bernstein , senior quantitative analyst at Merrill Lynch & Co. Strong dividend growth , he says , is '' the black widow of valuation '' -- a reference to the female spiders that attract males and then kill them after mating .
Stephen Boesel , president of T. Rowe Price Growth and Income Fund , explains that companies raise their payouts most robustly only after the economy and corporate profits have been growing for some time. '' Invariably , those strong periods in the economy give way to recessionary environments , '' he says. '' And recessionary environments are n't hospitable to the stock market . ''
Indeed , analysts say that payouts have sometimes risen most sharply when prices were already on their way down from cyclical peaks .
In 1976 , for example , dividends on the stocks in Standard & Poor 's 500-stock index soared 10 % , following much slower growth the year before .
The S & P index started sliding in price in September 1976 , and fell 12 % in 1977 -- despite a 15 % expansion in dividends that year .
That pattern has n't always held , but recent strong growth in dividends makes some market watchers anxious .
Payouts on the S & P 500 stocks rose 10 % in 1988 , according to Standard & Poor 's Corp. , and Wall Street estimates for 1989 growth are generally between 9 % and 14 % .
Many people believe the growth in dividends will slow next year , although a minority see double-digit gains continuing .
Meanwhile , many market watchers say recent dividend trends raise another warning flag : While dividends have risen smartly , their expansion has n't kept pace with even stronger advances in stock prices .
As a result , the market 's dividend yield -- dividends as a percentage of price -- has slid to a level that is fairly low and unenticing by historical standards .
Put another way , the decline in the yield suggests stocks have gotten pretty rich in price relative to the dividends they pay , some market analysts say .
They are keeping a close watch on the yield on the S & P 500 .
The figure is currently about 3.3 % , up from 3.2 % before the recent market slide .
Some analysts say investors should run for the exits if a sustained market rebound pushes the yield below 3 % .
A drop below that 3 % benchmark '' has always been a strong warning sign that stocks are fully valued , '' says Mr. Boesel of T. Rowe Price .
In fact , '' the market has always tanked .
Always .
There 's never been an exception , '' says Gerald W. Perritt , a Chicago investment adviser and money manager , based on a review of six decades of stock-market data .
The last time the S & P 500 yield dropped below 3 % was in the summer of 1987 .
Stockholders who took the hint and sold shares escaped the October debacle .
There have been only seven other times -- in 1929 , 1933 , 1961 , 1965 , 1968 , 1971 and 1972 -- when the yield on the S & P 500 dropped below 3 % for at least two consecutive months , Mr. Perritt found .
And in each case , he says , a sharp drop in stock prices began within a year .
Still , some market analysts say the current 3.3 % reading is n't as troublesome as it might have been in years past. '' It 's not a very meaningful indicator currently because corporations are not behaving in a traditional manner , '' says James H. Coxon , head of stock investments for Cigna Corp. , the Philadelphia-based insurer .
In particular , Mr. Coxon says , businesses are paying out a smaller percentage of their profits and cash flow in the form of dividends than they have historically .
So , while stock prices may look fairly high relative to dividends , they are not excessive relative to the underlying corporate strength .
Rather than increasing dividends , some companies have used cash to buy back some of their shares , notes Steven G. Einhorn , co-chairman of the investment policy committee at Goldman , Sachs & Co .
He factors that into the market yield to get an adjusted yield of about 3.6 % .
That is just a tad below the average of the past 40 years or so , he says .
What will happen to dividend growth next year ?
Common wisdom suggests a single-digit rate of growth , reflecting a weakening in the economy and corporate profits .
PaineWebber Inc. , for instance , is forecasting growth in S & P 500 dividends of just under 5 % in 1990 , down from an estimated 11 % this year .
In other years in which there have been moderate economic slowdowns -- the environment the firm expects in 1990 -- the change in dividends ranged from a gain of 4 % to a decline of 1 % , according to PaineWebber analyst Thomas Doerflinger .
The minority argument , meanwhile , is that businesses have the financial wherewithal this time around to declare sharply higher dividends even if their earnings weaken .
Dividend growth on the order of 12 % is expected by both Mr. Coxon of Cigna and Mr. Einhorn of Goldman Sachs .
Those dividend bulls argue that corporations are in the unusual position of having plenty of cash left over after paying dividends and making capital expenditures .
One indicator investors might want to watch is the monthly tally from Standard & Poor 's of the number of public companies adjusting their dividends .
A total of 139 companies raised dividends in October , basically unchanged from 138 a year ago , S & P said Wednesday .
That followed four straight months in which the number of increases trailed the year-earlier pace .
While the S & P tally does n't measure the magnitude of dividend changes , a further slippage in the number of dividend increases could be a harbinger of slower dividend growth next year .
In any case , opinion is mixed on how much of a boost the overall stock market would get even if dividend growth continues at double-digit levels .
Mr. Einhorn of Goldman Sachs estimates the stock market will deliver a 12 % to 15 % total return from appreciation and dividends over the next 12 months -- vs. a '' cash rate of return '' of perhaps 7 % or 8 % if dividend growth is weak .
But Mr. Boesel of T. Rowe Price , who also expects 12 % growth in dividends next year , does n't think it will help the overall market all that much. '' Having the dividend increases is a supportive element in the market outlook , but I do n't think it 's a main consideration , '' he says .
With slower economic growth and flat corporate earnings likely next year , '' I would n't look for the market to have much upside from current levels . ''
Your Oct. 13 page-one story on the renewed plight of Western Union says that Western Union had lost its chance to be in the telephone business by turning down Alexander Graham Bell 's offer to it of his invention , because it supposedly felt that voice communication would never replace the telegraph .
Such is hardly the case .
Bell 's father-in-law , Gardner G. Hubbard , wealthy and well-connected , obtained financing to start the American Bell Telephone Co. in Boston , which even had a subsidiary in New York called the Telephone Co. of New York .
This is where Bell 's patents went .
Western Union indeed wanted to get into the telephone business .
It acquired Thomas Edison 's microphone patent and then immediately sued the Bell Co. claiming that the microphone invented by my grandfather , Emile Berliner , which had been sold to Bell for a princely $ 50 , 000 , infringed upon Western Union 's Edison patent .
When Bell established that the Berliner patent caveat was registered 10 days before Edison 's application , Western Union dropped the lawsuit and agreed never to enter the telephone business -- the basis for the company 's current plight .
Oliver Berliner
Beverly Hills , Calif .
Troubled NBI Inc. said it fired more than half its work force and is discontinuing its hardware business to focus on its software and service operations .
The ailing company , which has reported net losses for 16 consecutive quarters , said it wo n't manufacture network computer systems any more and will greatly reduce its costly direct sales force .
Altogether , NBI said it will eliminate 266 jobs at its Boulder headquarters , 176 field sales jobs and 50 jobs at its Canadian and United Kingdom headquarters .
The company 's work force will fall to about 400 people .
Stephen G. Jerritts , president and chief executive officer , said customers were n't willing to commit to an expensive NBI hardware systems because of the company 's financial troubles .
Further , he said , the company does n't have the capital needed to build the business over the next year or two .
``We flat ran out of financing resources , '' Mr. Jerritts said. '' We had to do something structurally and radically different . ''
As a result , he said NBI will focus on servicing its installed base of systems , trying to provide maintenance for other manufacturers and expanding its software business , using some of the applications it developed for its hardware .
The company currently offers a word-processing package for personal computers called Legend .
The company , which recently said it lacked the profits and capital to pay dividends on its Series A convertible preferred stock , said it has hired an investment banker to help it raise additional cash .
In New York Stock Exchange composite trading yesterday , NBI common closed at 93 cents a share , up 31 cents .
It was Richard Nixon 's first visit to China in 1972 that set in motion the historic rapprochement between Beijing and Washington .
But the former U.S. president 's sixth visit to China , during which he spoke at length with Chinese leaders , was nowhere near as successful at easing strains that have recently afflicted the Sino-U.S. relationship .
Mr. Nixon , the most prominent American to come to China since Beijing 's bloody suppression of pro-democracy demonstrators in June , harped on international outrage over the massacre .
The Chinese , in turn , took aim at American '' interference '' in China 's domestic affairs .
One official newspaper , Legal Daily , even directly criticized Mr. Nixon , who is normally referred to here as an '' old friend. '' The paper accused him of being a leading proponent of '' peaceful evolution , '' a catch phrase to describe what China believes is the policy of Western countries to seduce socialist nations into the capitalist sphere .
The tension was evident on Wednesday evening during Mr. Nixon 's final banquet toast , normally an opportunity for reciting platitudes about eternal friendship .
Instead , Mr. Nixon reminded his host , Chinese President Yang Shangkun , that Americans have n't forgiven China 's leaders for the military assault of June 3-4 that killed hundreds , and perhaps thousands , of demonstrators .
``Many in the United States , including many friends of China , believe the crackdown was excessive and unjustified , '' Mr. Nixon told Mr. Yang , who was directly involved in ordering the attack. '' The events of April through June damaged the respect and confidence which most Americans previously had for the leaders of China . ''
The Chinese responded in an equally undiplomatic fashion .
In talks with Mr. Nixon , Chinese leaders expressed no regret for the killings , and even suggested that the U.S. was prominently involved in the demonstrations this spring .
In a meeting Tuesday , supreme leader , Deng Xiaoping , told Mr. Nixon , '' Frankly speaking , the U.S. was involved too deeply in the turmoil and counterrevolutionary rebellion which occurred in Beijing not long ago .
China was the real victim and it is unjust to reprove China for it . ''
Despite the harsh exchanges , the U.S. and China still seem to be looking for a way to mend relations , which have deteriorated into what Mr. Nixon referred to as '' the greatest crisis in Chinese-American relations '' since his initial visit to China 17 years ago .
In his return toast to Mr. Nixon , Mr. Yang said the relationship had reached a '' stalemate . ''
Relations between China and the U.S. have been tense since June 7 , when Chinese dissident Fang Lizhi and his wife , Li Shuxian , took refuge in the U.S. Embassy in Beijing .
Shortly afterwards , Mr. Bush imposed a series of anti-China sanctions , including suspension of most high-level talks , which could be codified in U.S. congressional legislation in the coming weeks .
Mr. Nixon is traveling in China as a private citizen , but he has made clear that he is an unofficial envoy for the Bush administration .
Mr. Nixon met Mr. Bush and his national security adviser , Brent Scowcroft , before coming to China on Saturday .
And he plans to brief the president at the end of the week , U.S. sources said .
Mr. Nixon was to leave China today .
According to an American member of the Nixon party , the former president raised a number of controversial issues in his 20 hours of talks with top-level Chinese officials .
These included China 's economic policies , human rights and the question of Mr. Fang .
Mr. Nixon also proposed that China restore its participation in the Fulbright Program , a U.S. government-funded academic exchange .
China pulled out of the program in July .
In his talks , the former president urged China 's leaders to acknowledge that their nation is part of the world community and welcome the infusion of outside contacts and ideas. '' Ideas are going over borders , and there 's no SDI ideological weapon that can shoot them down , '' he told a group of Americans at the U.S. Embassy on Wednesday .
There are no signs , however , of China 's yielding on key issues .
But in one minor matter , Mr. Nixon appears to have gained a concession .
In a meeting with Premier Li Peng on Monday , Mr. Nixon said that he hoped he would n't encounter guards with machine guns during his visit to the U.S. Embassy .
Sure enough , when he arrived at the embassy two days later , the machine-gun-toting guards were gone -- for the first time in five months .
A few blocks away , at the U.S. ambassador 's residence , the guards encircling the compound also had discarded their Uzi-model arms for the first time since early June .
But the guards there retained their pistols , and a large contingent of plainclothes police remained nearby in unmarked cars .
Moreover , police and soldiers continue to harass Americans , who have filed several protests with the Foreign Ministry in the past week .
Several times , Chinese guards have pointed their automatic rifles at young children of U.S. diplomats and clicked the trigger .
The rifles were n't loaded .
Your Oct. 6 article '' Japan 's Financial Firms Lure Science Graduates '' states , '' Industrial companies are accusing financial institutions of jeopardizing Japan 's economy by raising the salary stakes for new employees. '' The Japanese industrial companies should know better .
They are barking up the wrong tree , because it is basically their fault they ca n't attract new employees .
Takuma Yamamoto , president of Fujitsu Ltd. , believes '' the `money worship ' among young people . . . caused the problem. '' He is just passing the buck to young people .
What 's wrong with asking for more money ?
Money is not everything , but it is necessary , and business is not volunteer work .
It is not unethical to choose a higher-salaried job .
Unfortunately , Japanese manufacturers have neither good working conditions nor good compensation packages .
I get the impression that some Japanese managers believe working harder for less money is beautiful .
I visited a lot of major Japanese manufacturers , but I never felt I would want to be employed by any of them .
Many of them recently have been spending a lot of money on public relations and advertising to improve their images , but they should realize that the most important thing is real change , not changing people 's perceptions .
If the Japanese companies are seriously considering their survival , they could do at least three things to improve the situation : raise salaries higher than those of financial institutions ; improve working conditions ( better offices and more vacations , for example ) ; accept and hire more labor from outside Japan .
Hiroshi Asada
Washington
In reference to your Oct. 9 page-one article '' Barbara Bush Earns Even Higher Ratings Than the President , '' it is regrettable that you must continually define blacks by our negatives : '' Among liberals , 60 % have positive views of her , while 50 % approve of the president 's job performance .
In part , this may reflect the fact that `she speaks a more progressive language ' than her husband , as Columbia 's Prof. { Ethel } Klein puts it .
Among professionals , 76 % have a favorable opinion of her , compared to 62 % who approve of her husband 's performance .
While a quarter of black voters disapprove of Mr. Bush 's handling of his job , only 15 % have a negative view of his spouse . ''
The statistics imply that three-quarters of blacks approve of Mr. Bush 's job performance and 85 % of blacks approve of Mrs. Bush .
If the assumption is that it is surprising that so few blacks find Mr. and Mrs. Bush distasteful , the positive view is even more newsworthy .
Such an editorial point of view perpetuates an insidious , stereotyped perspective .
Why are we blacks continually defined by our minority and the lowest common denominator .
Preston G. Foster
Birmingham , Ala .
The National Association of Securities Dealers , the self-regulatory organization for the over-the-counter securities markets , disciplined a number of firms and individuals for alleged violations of industry rules .
Two firms were expelled from the NASD , three were suspended or barred and nine were fined .
First Securities Group of California and a principal of the firm , Louis Fernando Vargas of Marina del Rey , Calif. , were jointly fined $ 15 , 000 and expelled for alleged violations of reporting requirements on securities sales .
Also , Mr. Vargas was barred from association with any NASD member .
Neither First Securities , of Beverly Hills , nor Mr. Vargas could be reached for comment .
A telephone-information operator had no listing for either party .
J.L. Henry & Co. , Miami , and a principal of the firm , Henry I. Otero of Miami , were jointly fined $ 30 , 000 and expelled , for alleged improper use of a customer 's funds , among other things .
Also , Mr. Otero was barred from association with any NASD member .
J.L. Henry has n't any Miami telephone listing , an operator said .
Mr. Otero , who apparently has an unpublished number , also could n't be reached .
Biscayne Securities Corp. , of Lauderhill , Fla. , and a principal of the firm , Alvin Rosenblum of Plantation , Fla. , were jointly fined $ 20 , 000 and given 10-day suspensions for allegedly selling securities at unfair prices .
Biscayne has n't any telephone listing , an operator said .
Mr. Rosenblum , who apparently has an unpublished phone number , also could n't be reached .
Triton Securities , of Danville , Calif. , and a principal of the firm , Delwin George Chase , also of Danville , were jointly fined $ 10 , 000 and given 30-day suspensions as part of a settlement .
While neither admitting nor denying wrongdoing , Triton and Mr. Chase consented to findings of violations in connection with limited-partnership sales .
Officials of Triton could n't be reached for comment .
Mr. Chase did n't return a telephone call to his office .
Crane & Co. Securities Inc. , of Mount Clemens , Mich. , and its president , Glenn R. Crane , of Sterling Heights , Mich. , consented to a joint fine of $ 10 , 000 .
Without admitting or denying wrongdoing , they consented to findings of violations of escrow and record-keeping rules .
Mr. Crane did n't return a call seeking comment .
First Commonwealth Securities Corp. , of New Orleans , and its president , Kenneth J. Canepa , also of New Orleans , consented to a $ 10 , 000 fine .
Also , Mr. Canepa received a two-week suspension '' in a principal capacity. '' Without admitting or denying wrongdoing , they consented to findings that they had inaccurately represented the firm 's net capital , maintained inaccurate books and records , and made other violations .
Mr. Canepa confirmed he had consented to the sanctions but declined to comment further .
Weatherly Securities Corp. , New York , and three of its principals -- Dell Eugene Keehn and William Northy Prater Jr. , both of Mercer Island , Wash. , and Thomas Albert McFall , of Red Bank , N.J. -- consented to a fine of $ 20 , 000 .
Without admitting or denying wrongdoing , they consented to findings that they failed to return funds owed to customers in connection with a limited-partnership offering .
Reached at his office , Mr. McFall , currently chairman , said , '' An implication that we failed to return investor funds is inappropriate and inaccurate. '' He described the situation as '' an escrow problem , a timing issue , '' which he said was rapidly rectified , with no losses to customers .
W.N. Whelen & Co. , of Georgetown , Del. , and its president , William N. Whelen Jr. , also of Georgetown , were barred from transacting principal trades for 90 days and were jointly fined $ 15 , 000 .
The firm and Mr. Whelen allegedly sold securities to the public at unfair prices , among other alleged violations .
Mr. Whelen denied the firm had sold securities at unfair prices and suggested that the examination practices of the NASD need improvement .
The firm and the NASD differ over the meaning of markup and markdown , he added .
Shearson Lehman Hutton Inc. , New York , which is 62 % -owned by American Express Co. , consented to a $ 10 , 000 fine .
Without admitting or denying wrongdoing , the firm consented to findings that it failed to respond '' in a timely manner '' to the NASD 's requests for information in connection with a customer complaint .
A Shearson spokesman had no comment .
The following individuals were fined as indicated and barred from association with NASD members , or , where noted , suspended .
Except where noted , none of these people could be reached for comment or had any comment .
Andrew Derel Adams , Killeen , Texas , fined $ 15 , 000 ; John Francis Angier Jr. , Reddington Shores , Fla. , $ 15 , 000 ; Mark Anthony , Arlington Heights , Ill. , $ 10 , 000 and 30-day suspension ; William Stirlen , Arlington Heights , Ill. , $ 7 , 500 and 30-day suspension ; Fred W. Bonnell , Boulder , Colo. , $ 2 , 500 and six-month suspension ; Michael J. Boorse , Horsham , Pa. ; David Chiodo , Dallas , $ 5 , 000 , barred as a principal ; Camille Chafic Cotran , London , $ 25 , 000 ; John William Curry , fined $ 5 , 000 , ordered to disgorge $ 30 , 000 , one-year suspension .
John William Davis , Colonsville , Miss. , fined $ 200 , 000 ; Jeffrey Gerard Dompierre , Valrico , Fla. , $ 5 , 000 and 10-day suspension ; Eugene Michael Felten , La Canada , Calif. , fined $ 25 , 000 , ordered to disgorge $ 16 , 072 and suspended one year ; Marion Stewart Spitler , La Canada , fined $ 15 , 000 , ordered to disgorge $ 18 , 444 and suspended six months .
Mr. Felten said , '' We got what amounted to a parking ticket , and by complaining about it , we ended up with a sizable fine and suspension. '' The matter '' did n't involve anybody 's securities transactions , '' he added .
Victor Stanley Fishman , Longwood , Fla. , fined $ 25 , 000 ; William Harold Floyd , Houston , $ 100 , 000 ; Michael Anthony Houston , Bronx , N.Y. , $ 15 , 000 ; Amin Jalaalwalikraam , Glenham , N.Y. , $ 60 , 000 ; Richard F. Knapp , London , $ 10 , 000 and 30-day suspension ; Deborah Renee Martin , St. Louis , $ 15 , 000 ; Joseph Francis Muscolina Jr. , Palisades Park , N.J. , $ 15 , 000 ; Robert C. Najarian , Brooklyn Park , Minn. , $ 15 , 000 ; Edward Robert Norwick , Nesconset , N.Y. , $ 30 , 000 .
Charles D. Phipps Sr. , Hermitage , Pa. , fined $ 10 , 000 ; David Scott Rankin , Lake St. Louis , Mo. , $ 15 , 000 ; Leigh A. Sanderoff , Gaithersburg , Md. , fined $ 45 , 000 , ordered to disgorge $ 12 , 252 ; Sandra Ann Smith , Ridgefield , N.J. , $ 15 , 000 ; James G. Spence , Aloha , Ore. , $ 5 , 000 and six-month suspension ; Mona Sun , Jamaica Estates , N.Y. , $ 60 , 000 ; William Swearingen , Minneapolis , $ 15 , 000 and six-month suspension ; John Bew Wong , San Francisco , $ 25 , 000 ; Rabia M. Zayed , San Francisco , $ 50 , 000 .
The following were neither barred nor suspended : Stephanie Veselich Enright , Rolling Hills , Calif. , fined $ 2 , 500 and ordered to disgorge $ 11 , 762 ; Stuart Lane Russel , Glendale , Calif. , fined $ 2 , 500 and ordered to disgorge $ 14 , 821 ; Devon Nilson Dahl , Fountain Valley , Calif. , fined $ 82 , 389 .
Mr. Dahl , a registered representative in the insurance business , said he '' screwed up '' because he did n't realize he was breaking securities laws. '' Insurance agents have been forced by their companies into becoming registered reps , '' he said , '' but they are not providing compliance and security-type training so that we can avoid stupid mistakes . ''
The following were barred or , where noted , suspended and consented to findings without admitting or denying wrongdoing : Edward L. Cole , Jackson , Miss. , $ 10 , 000 fine ; Rita Rae Cross , Denver , $ 2 , 500 fine and 30-day suspension ; Thomas Richard Meinders , Colorado Springs , Colo. , $ 2 , 000 fine , five-day suspension and eight-month suspension as a principal ; Ronald A. Cutrer , Baton Rouge , La. , $ 15 , 000 fine and one-month suspension ; Karl Grant Hale , Midvale , Utah , $ 15 , 000 fine ; Clinton P. Hayne , New Orleans , $ 7 , 500 fine and one-week suspension ; Richard M. Kane , Coconut Creek , Fla. , $ 250 , 000 fine ; John B. Merrick , Aurora , Colo. , $ 1 , 000 fine and 10-day suspension ; John P. Miller , Baton Rouge , $ 2 , 000 fine and two-week suspension ; Randolph K. Pace , New York , $ 10 , 000 fine and 90-day suspension ; Brian D. Pitcher , New Providence , N.J. , $ 30 , 000 fine ; Wayne A. Russo , Bridgeville , Pa. , $ 4 , 000 fine and 15-day suspension ; Orville Leroy Sandberg , Aurora , Colo. , $ 3 , 500 fine and 10-day suspension ; Richard T. Marchese , Las Vegas , Nev. , $ 5 , 000 and one-year suspension ; Eric G. Monchecourt , Las Vegas , $ 5 , 000 and one-year suspension ; and Robert Gerhard Smith , Carson City , Nev. , two-year suspension. '' I was n't ever actively engaged in any securities activities , '' said Mr. Cutrer. '' I never had any clients at all .
It was just a stupid mistake to get the license , '' he said , adding , '' I 'd just as soon not get into '' details of the settlement .
Program traders are fond of predicting that if they are blocked in the U.S. , they will simply emigrate to foreign stock markets .
But in London and Tokyo , where computer-driven trading now plays a small but growing role , traders say a number of hurdles loom .
Government officials , especially in Japan , probably would resist any onslaught of program trading by players trying to shrug off the U.S. furor over their activities and marching abroad with their business .
Japan is '' very concerned '' about the possible effects of program trading , a senior Japanese official said after the Oct. 13 stock plunge in New York .
U.S. stock-index futures are n't even traded in Japan now .
And because of the time difference , the Japanese and the U.S. markets ' trading hours do n't overlap .
It all adds up to a barrier to American-style index arbitrage , the most popular form of U.S. program trading that seeks to exploit brief differences between prices of stocks in New York and the price of a futures contract in Chicago based on those stocks .
About 11.6 % of all program trading by New York Stock Exchange firms in September took place in foreign markets , according to Big Board data .
Yet it is difficult to imagine Japan racing to introduce Chicago-style stock-index futures .
Japan 's Finance Ministry already is scrutinizing institutional investors ' activity to see whether policy changes are needed to cope with the current level of program trading , said Makato Utsumi , vice minister for international finance .
Program trading has taken off in Japan since last year 's introduction of home-market stock-index futures trading on the Tokyo and Osaka stock exchanges .
But regulators are wary .
They have n't forgotten the leap in share prices last Dec. 7 , when the first bout of foreign-led index arbitrage drove stocks skyward in the last half-hour of trading , startling regulators who thought they had written enough rules to prevent such a swing .
Japan 's Finance Ministry had set up mechanisms to limit how far futures prices could fall in a single session and to give market operators the authority to suspend trading in futures at any time. '' Maybe it was n't enough , '' a Finance Ministry official noted after the Dec. 7 surge .
Japan 's regulators have since tightened controls on index-related stock purchases .
Tokyo 's leading program traders are the big U.S. securities houses , though the Japanese are playing catch-up .
Some U.S. firms , notably Salomon Inc. and Morgan Stanley Group Inc. , have reaped a hefty chunk of their Japanese earnings from index arbitrage , both for customers and for their own accounts. ( Morgan Stanley last week joined a growing list of U.S. securities firms that have stopped doing index arbitrage for their own accounts . )
Both Deryck C. Maughan , who heads Salomon in Tokyo , and John S. Wadsworth , who heads Morgan Stanley there , ascribe a good part of their firms ' success in Tokyo to their ability to offer sophisticated , futures-related investment strategies to big institutional clients .
They do n't have plans to cut back .
``It has not been disruptive in the markets here , '' Mr. Maughan said. '' The real difference seems to be that the cash market here . . . is big enough and liquid enough that the futures market is n't having the same impact it does in America . ''
The British also are scrutinizing program trades .
Index-arbitrage trading is '' something we want to watch closely , '' an official at London 's Stock Exchange said. '' We do n't think there is cause for concern at the moment . ''
London serves increasingly as a conduit for program trading of U.S. stocks .
Market professionals said London has several attractions .
First , the trading is done over the counter and is n't reported on either the U.S. or London stock trading tapes .
Second , it can be used to unwind positions before U.S. trading begins , but at prices pegged to the previous session 's Big Board close .
In addition to the extra privacy of these trades , the transactions can often be less expensive to execute , because the parties do n't have to pay a floor brokerage fee or a specialist 's fee .
Still , '' Much less { index-arbitrage activity } is done over here than in the U.S. '' said Richard Barfield , chief investment manager at Standard Life Assurance Co. , which manages about # 15 billion ( $ 23.72 billion ) in United Kingdom institutional funds .
Britain has two main index-arbitrage instruments .
A Financial Times-Stock Exchange 100-share index option contract is traded on the London Stock Exchange 's Traded Options Market .
And an FT-SE futures contract is traded on the London International Financial Futures Exchange .
Both contracts have gained a following since the 1987 global market crash .
The average number of FT-SE option contracts traded on the London exchange has surged nearly tenfold since the contract 's launch in 1984 .
This year , the average of daily contracts traded totaled 9 , 118 , up from 4 , 645 a year earlier and from 917 in 1984 .
But a survey early this summer indicated that the volume of index-options trading was only 15 % of the size of the underlying equity market , exchange officials said .
This compares with estimates that the U.S. '' derivatives '' market is perhaps four times as large as the underlying domestic market .
The House voted to boost the federal minimum wage for the first time since early 1981 , casting a solid 382-37 vote for a compromise measure backed by President Bush .
The vote came after a debate replete with complaints from both proponents and critics of a substantial increase in the wage floor .
Advocates said the 90-cent-an-hour rise , to $ 4.25 an hour by April 1991 , is too small for the working poor , while opponents argued that the increase will still hurt small business and cost many thousands of jobs .
But the legislation reflected a compromise agreed to on Tuesday by President Bush and Democratic leaders in Congress , after congressional Republicans urged the White House to bend a bit from its previous resistance to compromise .
So both sides accepted the compromise , which would lead to the first lifting of the minimum wage since a four-year law was enacted in 1977 , raising the wage to $ 3.35 an hour from $ 2.65 .
Under the measure passed yesterday , the minimum wage would rise to $ 3.80 next April .
The Senate plans to take up the measure quickly and is expected to pass it .
``There are no smiles about this bill , '' Rep. Pat Williams ( D. , Mont. ) said during House floor debate yesterday .
But '' because it 's all we 've got , I 'm going to vote for it . ''
While the minimum wage had traditionally been pegged at half the average U.S. manufacturing wage , the level of $ 4.25 an hour in 1991 will still be less than 35 % of average factory pay , Mr. Williams said .
But Rep. Marge Roukema ( R. , N.J. ) instead praised the House 's acceptance of a new youth '' training '' wage , a subminimum that GOP administrations have sought for many years .
Adopting a training-wage policy means '' getting beyond the nickel and diming of the minimum wage , '' Mrs. Roukema said .
Policy makers regard the youth wage as helping to limit the loss of jobs from an increase in the minimum wage , but they have lately touted it as necessary to help impart job skills to entrants into the work force .
Labor unions and Democrats long fought the idea , but recently acceded to it in the face of Bush administration insistence .
The compromise sets the training wage at $ 3.35 an hour next April , and at $ 3.61 an hour , or 85 % of the minimum wage , in April 1991 .
Employers can pay the subminimum for 90 days , without restriction , to workers with less than six months of job experience , and for another 90 days if the company uses a government-certified training program for the young workers .
The training wage covers only workers who are 16 to 19 years old .
The White House previously insisted on an unrestricted six-month training wage that could be paid any time a worker of any age took a new job .
The U.S. Chamber of Commerce , still opposed to any mininum-wage increase , said the compromise plan to lift the wage floor 27 % in two stages between April 1990 and April 1991 '' will be impossible for many employers to accommodate and will result in the elimination of jobs for American workers and higher prices for American consumers . ''
Zenith Data Systems Corp. , a subsidiary of Zenith Electronics Corp. , received a $ 534 million Navy contract for software and services of microcomputers over an 84-month period .
Rockwell International Corp. won a $ 130.7 million Air Force contract for AC-130U gunship replacement aircraft .
Martin Marietta Corp. was given a $ 29.9 million Air Force contract for low-altitude navigation and targeting equipment .
Federal Data Corp. got a $ 29.4 million Air Force contract for intelligence data handling .
For six years , T. Marshall Hahn Jr. has made corporate acquisitions in the George Bush mode : kind and gentle .
The question now : Can he act more like hard-charging Teddy Roosevelt ?
Mr. Hahn , the 62-year-old chairman and chief executive officer of Georgia-Pacific Corp. is leading the forest-product concern 's unsolicited $ 3.19 billion bid for Great Northern Nekoosa Corp. Nekoosa has given the offer a public cold shoulder , a reaction Mr. Hahn has n't faced in his 18 earlier acquisitions , all of which were negotiated behind the scenes .
So far , Mr. Hahn is trying to entice Nekoosa into negotiating a friendly surrender while talking tough. '' We are prepared to pursue aggressively completion of this transaction , '' he says .
But a takeover battle opens up the possibility of a bidding war , with all that implies .
If a competitor enters the game , for example , Mr. Hahn could face the dilemma of paying a premium for Nekoosa or seeing the company fall into the arms of a rival .
Given that choice , associates of Mr. Hahn and industry observers say the former university president -- who has developed a reputation for not overpaying for anything -- would fold .
``There 's a price above which I 'm positive Marshall has the courage not to pay , '' says A.D. Correll , Georgia-Pacific 's executive vice president for pulp and paper .
Says long-time associate Jerry Griffin , vice president , corporate development , at WTD Industries Inc. : '' He is n't of the old school of winning at any cost . ''
He also is a consensus manager , insiders say .
The decision to make the bid for Nekoosa , for example , was made only after all six members of Georgia-Pacific 's management committee signed onto the deal -- even though Mr. Hahn knew he wanted to go after the company early on , says Mr. Correll .
Associates say Mr. Hahn picked up that careful approach to management as president of Virginia Polytechnic Institute .
Assuming that post at the age of 35 , he managed by consensus , as is the rule in universities , says Warren H. Strother , a university official who is researching a book on Mr. Hahn .
But he also showed a willingness to take a strong stand .
In 1970 , Mr. Hahn called in state police to arrest student protesters who were occupying a university building .
That impressed Robert B. Pamplin , Georgia-Pacific 's chief executive at the time , whom Mr. Hahn had met while fundraising for the institute .
In 1975 , Mr. Pamplin enticed Mr. Hahn into joining the company as executive vice president in charge of chemicals ; the move befuddled many in Georgia-Pacific who did n't believe a university administrator could make the transition to the corporate world .
But Mr. Hahn rose swiftly through the ranks , demonstrating a raw intelligence that he says he knew he possessed early on .
The son of a physicist , Mr. Hahn skipped first grade because his reading ability was so far above his classmates .
Moving rapidly through school , he graduated Phi Beta Kappa from the University of Kentucky at age 18 , after spending only 2 1/2 years in college .
He earned his doctorate in nuclear physics from the Massachusetts Institute of Technology .
Mr. Hahn agrees that he has a '' retentive '' memory , but friends say that 's an understatement .
They call it '' photographic '' .
Mr. Hahn also has engineered a surprising turnaround of Georgia-Pacific .
Taking over as chief executive officer in 1983 , he inherited a company that was mired in debt and hurt by a recession-inspired slide in its building-products business .
Mr. Hahn began selling non-core businesses , such as oil and gas and chemicals .
He even sold one unit that made vinyl checkbook covers .
At the same time , he began building up the pulp and paper segment of the company while refocusing building products on home repair and remodeling , rather than materials for new-home construction .
The idea was to buffet building products from cycles in new-home construction .
The formula has paid off , so far .
Georgia-Pacific 's sales climbed to $ 9.5 billion last year , compared with $ 6 billion in 1983 , when Mr. Hahn took the reins .
Profit from continuing operations has soared to $ 467 million from $ 75 million .
Mr. Hahn attributes the gains to the philosophy of concentrating on what a company knows best .
``The record of companies that have diversified is n't all that impressive , '' he says .
Nekoosa would n't be a diversification .
It would be a good match , Mr. Hahn and many analysts say , of two healthy companies with high-quality assets and strong cash flows .
The resulting company would be the largest forest-products concern in the world with combined sales of more than $ 13 billion .
But can Mr. Hahn carry it off ?
In this instance , industry observers say , he is entering uncharted waters .
Says Kathryn McAuley , an analyst at First Manhattan Co. : '' This is the greatest acquisition challenge he has faced . ''
A House-Senate conference approved major portions of a package for more than $ 500 million in economic aid for Poland that relies heavily on $ 240 million in credit and loan guarantees in fiscal 1990 in hopes of stimulating future trade and investment .
For the Agency for International Development , appropriators approved $ 200 million in secondary loan guarantees under an expanded trade credit insurance program , and total loan guarantees for the Overseas Private Investment Corp. are increased by $ 40 million over fiscal 1989 as part of the same Poland package .
The conference approved at least $ 55 million in direct cash and development assistance as well , and though no decision was made , both sides are committed to adding more than $ 200 million in economic support funds and environmental initiatives sought by the Bush administration .
The agreement on Poland contrasts with the major differences remaining over the underlying foreign aid bill , which has already provoked veto threats by the White House and is sharply confined under this year 's budget .
These fiscal pressures are also a factor in shaping the Poland package , and while more ambitious authorizing legislation is still pending , the appropriations bill in conference will be more decisive on U.S. aid to Eastern Europe .
To accommodate the additional cash assistance , the House Appropriations Committee last week was required to reallocate an estimated $ 140 million from the Pentagon .
And though the size of the loan guarantees approved yesterday is significant , recent experience with a similar program in Central America indicates that it could take several years before the new Polish government can fully use the aid effectively .
The action on Poland came as the conference separately approved $ 220 million for international population planning activities , an 11 % increase over fiscal 1989 .
The House and Senate are divided over whether the United Nations Population Fund will receive any portion of these appropriations , but the size of the increase is itself significant .
In a second area of common concern , the world environment , an additional $ 15 million will be provided in development assistance to fund a series of initiatives , related both to global warming and the plight of the African elephant .
The sweeping nature of the bill draws a variety of special interest amendments , running from an import exemption for a California airplane museum to a small but intriguing struggle among sugar producing nations over the fate of Panama 's quota of exports to the profitable U.S. market .
Panama was stripped of this right because of U.S. differences with the Noriega regime , but the Central American country would have received a quota of 30 , 537 metric tons over a 21-month period ending Sept. 30 , 1990 .
About a quarter of this share has already been reallocated , according to the industry , but the remaining 23 , 403 tons are still a lucrative target for growers because the current U.S. price of 18 cents a pound runs as much as a nickel a pound above the world rate .
The potential sales are nearly $ 9.3 million , and House Majority Whip William Gray ( D. , Pa. ) began the bidding this year by proposing language that the quota be allocated to English-speaking countries of the Caribbean , such as Jamaica and Barbados .
Rep. Jerry Lewis , a conservative Californian , added a provision of his own intended to assist Bolivia , and the Senate then broadened the list further by including all countries in the U.S. Caribbean Basin initiate as well as the Philippines-backed by the powerful Hawaii Democrat Sen. Daniel Inouye .
Jamaica , wary of upsetting its Caribbean Basin allies , has apparently instructed its lobbyist to abandon the provision initially drafted by Mr. Gray , but the greater question is whether Mr. Inouye , who has strong ties to the sugar industry , is able to insert a claim by the Philippines .
In separate floor action , the House waived budget restrictions and gave quick approval to $ 3.18 billion in supplemental appropriations for law enforcement and anti-drug programs in fiscal 1990 .
The funding is attached to an estimated $ 27.1 billion transportation bill that goes next to the Senate and carries with it a proposed permanent smoking ban on virtually all U.S. domestic airline flights .
The leadership hopes to move the compromise measure promptly to the White House , but in recent days , the Senate has been as likely to bounce bills back to the House .
The most recent example was a nearly $ 17.3 billion fiscal 1990 bill funding the State , Justice and Commerce departments .
And after losing a battle Tuesday night with the Senate Foreign Relations Committee , appropriators from both houses are expected to be forced back to conference .
Beauty Takes Backseat
To Safety on Bridges
EVERYONE AGREES that most of the nation 's old bridges need to be repaired or replaced .
But there 's disagreement over how to do it .
Highway officials insist the ornamental railings on older bridges are n't strong enough to prevent vehicles from crashing through .
But other people do n't want to lose the bridges ' beautiful , sometimes historic , features .
``The primary purpose of a railing is to contain a vehicle and not to provide a scenic view , '' says Jack White , a planner with the Indiana Highway Department .
He and others prefer to install railings such as the '' type F safety shape , '' a four-foot-high concrete slab with no openings .
In Richmond , Ind. , the type F railing is being used to replace arched openings on the G Street Bridge .
Garret Boone , who teaches art at Earlham College , calls the new structure '' just an ugly bridge '' and one that blocks the view of a new park below .
In Hartford , Conn. , the Charter Oak Bridge will soon be replaced , the cast-iron medallions from its railings relegated to a park .
Compromises are possible .
Citizens in Peninsula , Ohio , upset over changes to a bridge , negotiated a deal : The bottom half of the railing will be type F , while the top half will have the old bridge 's floral pattern .
Similarly , highway engineers agreed to keep the old railings on the Key Bridge in Washington , D.C. , as long as they could install a crash barrier between the sidewalk and the road .
Tray Bon ?
Drink Carrier
Competes With Cartons
PORTING POTABLES just got easier , or so claims Scypher Corp. , the maker of the Cup-Tote .
The Chicago company 's beverage carrier , meant to replace cardboard trays at concession stands and fast-food outlets , resembles the plastic loops used on six-packs of beer , only the loops hang from a web of strings .
The new carrier can tote as many as four cups at once .
Inventor Claire Marvin says his design virtually eliminates spilling .
Lids are n't even needed .
He also claims the carrier costs less and takes up less space than most paper carriers .
A few fast-food outlets are giving it a try .
The company acknowledges some problems .
A driver has to find something to hang the carrier on , so the company supplies a window hook .
While it breaks down in prolonged sunlight , it is n't recyclable .
And unlike some trays , there 's no place for food .
Spirit of Perestroika
Touches Design World
AN EXCHANGE of U.S. and Soviet designers promises change on both sides .
An exhibition of American design and architecture opened in September in Moscow and will travel to eight other Soviet cities .
The show runs the gamut , from a blender to chairs to a model of the Citicorp building .
The event continues into next year and includes an exchange program to swap design teachers at Carnegie-Mellon and Leningrad 's Mutchin Institute .
Dan Droz , leader of the Carnegie-Mellon group , sees benefits all around .
The Soviets , who normally have few clients other than the state , will get '' exposure to a market system , '' he says .
Americans will learn more about making products for the Soviets .
Mr. Droz says the Soviets could even help U.S. designers renew their sense of purpose. '' In Moscow , they kept asking us things like , `Why do you make 15 different corkscrews , when all you need is one good one ? ' '' he says. '' They got us thinking maybe we should be helping U.S. companies improve existing products rather than always developing new ones . ''
Seed for Jail Solution
Fails to Take Root
IT 'S A TWO BIRDS with one stone deal : Eggers Group architects propose using grain elevators to house prisoners .
It would ease jail overcrowding while preserving historic structures , the company says .
But New York state , which is seeking solutions to its prison cell shortage , says '' no . ''
Grain elevators built in the 1920s and '30s have six-inch concrete walls and a tubular shape that would easily contain semicircular cells with a control point in the middle , the New York firm says .
Many are far enough from residential areas to pass public muster , yet close enough to permit family visits .
Besides , Eggers says , grain elevators are worth preserving for aesthetic reasons -- one famed architect compared them to the pyramids of Egypt .
A number of cities -- including Minneapolis , Philadelphia and Houston -- have vacant grain elevators , Eggers says .
A medium-sized one in Brooklyn , it says , could be altered to house up to 1 , 000 inmates at a lower cost than building a new prison in upstate New York .
A spokesman for the state , however , calls the idea '' not effective or cost efficient . ''
The Labor Department cited USX Corp. for numerous health and safety violations at two Pennsylvania plants , and proposed $ 7.3 million in fines , the largest penalty ever proposed for alleged workplace violations by an employer .
The department 's Occupational Safety and Health Administration proposed fines of $ 6.1 million for alleged violations at the company 's Fairless Hills , Pa. , steel mill ; that was a record for proposed penalties at any single facility .
OSHA cited nearly 1 , 500 alleged violations of federal electrical , crane-safety , record-keeping and other requirements .
A second citation covering the company 's Clairton , Pa. , coke works involved more than 200 alleged violations of electrical-safety and other requirements , for which OSHA proposed $ 1.2 million in fines .
Labor Secretary Elizabeth Dole said , '' The magnitude of these penalties and citations is matched only by the magnitude of the hazards to workers which resulted from corporate indifference to worker safety and health , and severe cutbacks in the maintenance and repair programs needed to remove those hazards . ''
OSHA said there have been three worker fatalities at the two plants in the past two years and 17 deaths since 1972 .
Gerard Scannell , the head of OSHA , said USX managers have known about many of the safety and health deficiencies at the plants for years , '' yet have failed to take necessary action to counteract the hazards . ''
``Particularly flagrant , '' Mrs. Dole said , '' are the company 's numerous failures to properly record injuries at its Fairless works , in spite of the firm promise it had made in an earlier corporate-wide settlement agreement to correct such discrepancies. '' That settlement was in April 1987 .
A USX spokesman said the company had n't yet received any documents from OSHA regarding the penalty or fine. '' Once we do , they will receive very serious evaluation , '' the spokesman said. '' No consideration is more important than the health and safety of our employees . ''
USX said it has been cooperating with OSHA since the agency began investigating the Clairton and Fairless works .
He said that , if and when safety problems were identified , they were corrected .
The USX citations represented the first sizable enforcement action taken by OSHA under Mr. Scannell .
He has promised stiffer fines , though the size of penalties sought by OSHA have been rising in recent years even before he took office this year .
``The big problem is that USX management has proved unwilling to devote the necessary resources and manpower to removing hazards and to safeguarding safety and health in the plants , '' said Linda Anku , OSHA regional administrator in Philadelphia .
USX has 15 working days to contest the citations and proposed penalties , before the independent Occupational Safety and Health Review Commission .
Before the USX case , OSHA 's largest proposed fine for one employer was $ 4.3 million for alleged safety violations at John Morrell & Co. , a meatpacking subsidiary of United Brands Co. , Cincinnati .
The company is contesting the fine .
Due to an editing error , a letter to the editor in yesterday 's edition from Frederick H. Hallett mistakenly identified the NRDC .
It should be the Natural Resources Defense Council .
( See '' Letters to the Editor : Ozone Dangers Are n't Up in the Air '' -- WSJ Nov. 1 , 1989 )
Your Oct. 6 editorial '' The Ill Homeless '' referred to research by us and six of our colleagues that was reported in the Sept. 8 issue of the Journal of the American Medical Association .
Your comments implied we had discovered that the '' principal cause '' of homelessness is to be found in the large numbers of mentally ill and substance-abusing people in the homeless population .
We have made no such statement .
It is clear that most mentally ill people and most alcoholics do not become homeless .
The '' causes '' of homelessness are poorly understood and complex in any individual case .
In quoting from our research you emphasized the high prevalance of mental illness and alcoholism .
You did not note that the homeless people we examined had a multitude of physical disorders in addition to their psychiatric problems and substance abuse .
They suffered from malnutrition , chest diseases , cardiovascular disorders , skin problems , infectious diseases and the aftereffects of assaults and rape .
Homeless people not only lack safety , privacy and shelter , they also lack the elementary necessities of nutrition , cleanliness and basic health care .
In a recent report , the Institute of Medicine pointed out that certain health problems may predispose a person to homelessness , others may be a consequence of it , and a third category is composed of disorders whose treatment is difficult or impossible if a person lacks adequate shelter .
The interactions between health and homelessness are complex , defying sweeping generalizations as to '' cause '' or '' effect . ''
If we look to the future , preventing homelessness is an important objective .
This will require us to develop a much more sophisticated understanding of the dynamics of homelessness than we currently possess , an understanding that can be developed only through careful study and research .
William R. Breakey M.D .
Pamela J. Fischer M.D .
Department of Psychiatry
Johns Hopkins University
School of Medicine
Baltimore
A study by Tulane Prof .
James Wright says homelessness is due to a complex array of problems , with the common thread of poverty .
The study shows that nearly 40 % of the homeless population is made up of women and children and that only 25 % of the homeless exhibits some combination of drug , alcohol and mental problems .
According to Dr. Wright , homelessness is '' simultaneously a housing problem , an employment problem , a demographic problem , a problem of social disaffiliation , a mental health problem , a family violence problem , a problem created by the cutbacks in social welfare spending , a problem resulting from the decay of the traditional nuclear family , and a problem intimately connected to the recent increase in the number of persons living below the poverty level . ''
Leighton E. Cluff M.D .
President
Robert Wood Johnson Foundation
Princeton , N.J .
To quote the highly regarded director of a privately funded drop-in center for the homeless in New York : '' If you 're homeless , you do n't sleep for fear of being robbed or murdered .
After your first three weeks of sleep deprivation , you 're scarcely in touch with reality any more ; without psychiatric treatment , you may well be unable to fend for yourself ever again . ''
Some of the homeless , obviously , had pre-existing mental illness or addiction .
But many others have fallen through cracks in the economy into the grim , brutal world of our city streets .
Once there , what ways of escape are open to them other than drink , drugs or insanity ?
Maxwell R.D. Vos
Brooklyn , N.Y .
You dismiss as '' sentimental '' the view that the reduction of federal housing-assistance programs by 77 % might have played a significant role in the increased number of men and women sleeping on our city streets during the Reagan-Bush years .
There is no sign that you bothered to consider the inverse of your logic : namely , that mental illness and substance abuse might be to some degree consequences rather than causes of homelessness .
Your research stopped when a convenient assertion could be made .
Robert S. Jenkins
Cambridge , Mass .
Of the approximately 200 sponsors of the recent march in Washington for the homeless , you chose to cite such groups as the National Association of Home Builders and the International Union of Bricklayers and Allied Craftsmen , insinuating that the march got its major support from self-serving groups that '' know a good thing when they see it , '' and that the crusade was based on greed or the profit motive .
But is n't the desire for profit the driving force behind those who subscribe to , and advertise in , your paper ?
Why did n't you mention the YMCA or the YWCA or Catholic Charities USA or a hundred other nonprofit organizations that participated in the march ?
As for the findings on the 203 Baltimore homeless who underwent psychiatric examinations , I suggest you conduct your own survey .
Choose 203 business executives , including , perhaps , someone from your own staff , and put them out on the streets , to be deprived for one month of their homes , families and income .
I would predict that within a short time most of them would find Thunderbird a satisfactory substitute for Chivas Regal and that their '' normal '' phobias , anxieties , depressions and substance abuse would increase dramatically .
Ruth K. Nelson
Cullowhee , N.C .
ROGERS COMMUNICATIONS Inc. said it plans to raise 175 million to 180 million Canadian dollars ( US $ 148.9 million to $ 153.3 million ) through a private placement of perpetual preferred shares .
Perpetual preferred shares are n't retractable by the holders , the company said .
Rogers said the shares will be convertible into Class B shares , but that the company has the option to redeem the shares before a conversion takes place .
A spokesman for the Toronto cable television and telecommunications concern said the coupon rate has n't yet been fixed , but will probably be set at around 8 % .
He declined to discuss other terms of the issue .
The House passed legislation designed to make it easier for the Transportation Department to block airline leveraged buy-outs .
The final vote came after the House rejected Republican efforts to weaken the bill and approved two amendments sought by organized labor .
The Bush administration has threatened to veto such a bill because of what it views as an undesirable intrusion into the affairs of industry , but the 300-113 vote suggests that supporters have the potential to override a veto .
The broader question is where the Senate stands on the issue .
While the Senate Commerce Committee has approved legislation similar to the House bill on airline leveraged buy-outs , the measure has n't yet come to the full floor .
Although the legislation would apply to acquisitions involving any major airline , it is aimed at giving the Transportation Department the chance to review in advance transactions financed by large amounts of debt. '' The purpose of the bill is to put the brakes on airline acquisitions that would so load a carrier up with debt that it would impede safety or a carrier 's ability to compete , '' Rep. John Paul Hammerschmidt , ( R. , Ark. ) said .
The bill , as it was approved by the House Public Works and Transportation Committee , would give the Transportation Department up to 50 days to review any purchase of 15 % or more of the stock in an airline .
The department would be required to block the buy-out if the acquisition is likely to financially weaken a carrier so that safety would be impaired ; its ability to compete would be sharply diminished ; it would be put into foreign control ; or if the transaction would result in the sale of airline-related assets -- unless selling such assets had an overriding public benefit .
The House approved an amendment offered by Rep. Peter DeFazio ( D. , Ore. ) that would , in addition to the previous criteria , also require the department to block the acquisition of an airline if the added debt incurred were likely to result in a reduction in the number of the carrier 's employees , or their wages or benefits .
Rep. James Traficant ( D. , Ohio ) , said the amendment , which passed 271-147 , would '' let the American worker know that we consider them occasionally. '' But Rep. Hammerschmidt said that the provision , which he dubbed a '' special interest '' amendment , was likely to make the bill even more controversial .
On Tuesday , the House approved a labor-backed amendment that would require the Transportation Department to reject airline acquisitions if the person seeking to purchase a carrier had run two or more airlines previously that have filed for protection from creditors under Chapter 11 of the federal Bankruptcy Code .
The provision , called the '' two-time-losers '' amendment by its supporters , apparently was aimed at preventing Texas Air Corp. Chairman Frank Lorenzo from attempting to take over another airline .
Follow-up report :
You now may drop by the Voice of America offices in Washington and read the text of what the Voice is broadcasting to those 130 million people around the world who tune in to it each week .
You can even take notes -- extensive notes , for the Voice folks wo n't look over your shoulder -- about what you read .
You can do all this even if you 're not a reporter or a researcher or a scholar or a member of Congress .
And my newspaper can print the text of those broadcasts .
Until the other day , you as an ordinary citizen of this democracy had no right to see what your government was telling your cousins around the world .
That was the law .
And I apparently had no right to print hither what the Voice was booming to yon .
It was censorship .
It was outrageous .
And it was stupid .
The theory was that the Voice is a propaganda agency and this government should n't propagandize its own people .
That sounds neat , but this government -- any government -- propagandizes its own people every day .
Government press releases , speeches , briefings , tours of military facilities , publications are all propaganda of sorts .
Propaganda is just information to support a viewpoint , and the beauty of a democracy is that it enables you to hear or read every viewpoint and then make up your own mind on an issue .
The restrictions on viewing and dissemination of Voice material were especially absurd : An agency in the information business was not being allowed to inform .
In June 1988 , I wrote in this space about this issue .
Assuming it was n't one of those columns that you clipped and put on the refrigerator door , I 'll review the facts .
The Voice of America is a government agency that broadcasts news and views -- some might say propaganda -- in 43 languages to 130 million listeners around the world .
It does a first-rate job .
Its budget $ 184 million -- is paid for by you .
But a 1948 law barred the '' dissemination '' of that material in the U.S .
The law let scholars , reporters and researchers read texts of VOA material , only at VOA headquarters in Washington , but it barred them from copying texts .
And , of course , there 's that word '' dissemination . ''
How 's that again ? '' You may come by the agency to read but not copy either manually or by photocopying , '' a Voice official explained when I asked .
What if I tune in my short-wave radio , transcribe an editorial or program , and print it in my newspaper ? '' Nor are you free to reprint such material , '' I was advised .
That sounded a lot like censorship , so after years of letters and conversations that went nowhere , I sued .
A couple of weeks ago , I lost the case in federal district court in Des Moines .
At least , that 's the way it was reported .
And , indeed , the lawsuit was dismissed .
But I -- I like to think of it in terms of we , all of us -- won the point .
For a funny thing happened on the way to the ruling : The United States Information Agency , which runs the Voice , changed its position on three key points .
-- The USIA said that , on reflection , of course I could print anything I could get my hands on .
The word dissemination , it decided , referred only to itself. '' The USIA officially and publicly declared the absolute right of everyone except the USIA to disseminate agency program materials in the United States , '' my lawyer , the scholarly Mark McCormick of Des Moines , said in a memo pointing out the facts and trying to make me feel good after the press reported that I had lost .
The court noted the new USIA position but , just in case , officially found '' that Congress did not intend to preclude plaintiffs from disseminating USIA information domestically . ''
-- The USIA said that , on reflection , anyone could view the VOA materials , not just the reporters , scholars , researchers and congressmen who are mentioned in the statute. '' The USIA publicly and officially stated in the litigation that all persons are allowed access to the materials , notwithstanding the statutory designations , because the USIA has determined that it will not check the credentials of any person appearing and requesting to see the materials , '' Mr. McCormick noted .
-- And the USIA said that all of us could take extensive notes. '' The agency publicly and officially declared in the lawsuit that persons who examine the materials may make notes and , while the agency position is that persons may not take verbatim notes , no one will check to determine what notes a person has taken , '' Mr. McCormick reported .
I had sought , in my suit , the right to print Voice material , which had been denied me , and I had sought a right to receive the information , arguing in effect that a right to print government information is n't very helpful if I have no right to get the information .
But the court disagreed. '' The First Amendment proscribes the government from passing laws abridging the right to free speech , '' Judge Donald O'Brien ruled. '' The First Amendment does not prescribe a duty upon the government to assure easy access to information for members of the press . ''
So now the situation is this : You have a right to read Voice of America scripts if you do n't mind traveling to Washington every week or so and visiting the Voice office during business hours .
I have a right to print those scripts if I go there and laboriously -- but no longer surreptitiously -- copy them out in long hand .
But neither of us can copy the material on a Xerox machine or have it sent to us .
In an era when every government agency has a public-relations machine that sends you stuff whether you want it or not , this does seem odd .
Indeed , Judge O'Brien ruled that '' it would be easy to conclude that the USIA 's position is `inappropriate or even stupid , ' '' but it 's the law .
So the next step , I suspect , is to try to get the law changed .
We ( I assume you 're in this with me at this point ) need to get three words -- '' for examination only '' -- eliminated from the law .
Section 501 of the United States Information and Educational Exchange Act of 1948 says Voice material shall be available to certain of us ( but now , thanks to the USIA 's new position , all of us ) '' for examination only. '' If those words were n't there , the nice people at the Voice would be able to send you the information or , at the very least , let you photocopy it .
This is not a trivial issue .
``You have . . . raised important questions which ought to be answered : What does USIA say about America abroad ; how do we say it ; and how can American taxpayers get the answers to these questions ? '' a man wrote me a couple of years ago .
The man was Charles Z. Wick .
At the time , he was director of the
He had no answers then .
Now there are some .
This democracy is suddenly a little more democratic .
I feel pretty good about it .
Mr. Gartner is editor and co-owner of the Daily Tribune in Ames , Iowa , and president of NBC News in New York .
R. Gordon McGovern was forced out as Campbell Soup Co. 's president and chief executive officer , the strongest evidence yet of the power that Dorrance family members intend to wield in reshaping the troubled food company .
Herbert M. Baum , the 53-year-old president of the company 's Campbell U.S.A. unit , and Edwin L. Harper , 47 , the chief financial officer , will run Campbell as a team , dividing responsibilities rather evenly until a successor is named .
The board already has been searching for strong outside candidates , including food-industry executives with considerable international experience .
Wall Street reacted favorably to Mr. McGovern 's departure and its implications .
In heavy trading on the New York Stock Exchange , Campbell 's shares rose $ 3.375 to close at $ 47.125 .
``The profit motive of the major shareholders has clearly changed for the better , '' said John McMillin , a food industry analyst for Prudential-Bache in New York .
Mr. McGovern was widely seen as sales , and not profit , oriented. '' New managers would think a little more like Wall Street , '' Mr. McMillin added .
Some of the surge in the stock 's price appeared to be linked to revived takeover speculation , which has contributed to volatility of Campbell shares in recent months .
Campbell 's international businesses , particularly in the U.K. and Italy , appear to be at the heart of its problems .
Growth has fallen short of targets and operating earnings are far below results in U.S. units .
For example , Campbell is a distant third in the U.K. frozen foods market , where it recently paid 24 times earnings for Freshbake Foods PLC and wound up with far more capacity than it could use .
Similarly , Campbell 's Italian biscuit operation , D. Lazzaroni & Co. , has been hurt by overproduction and distribution problems .
Such problems will require considerable skill to resolve .
However , neither Mr. Baum nor Mr. Harper has much international experience .
Mr. Baum , a seasoned marketer who is said to have a good rapport with Campbell employees , will have responsibility for all domestic operations except the Pepperidge Farm unit .
Mr. Harper , a veteran of several manufacturing companies who joined Campbell in 1986 , will take charge of all overseas operations as well as Pepperidge .
In an joint interview yesterday , both men said they would like to be the company 's next chief executive .
Mr. McGovern , 63 , had been under intense pressure from the board to boost Campbell 's mediocre performance to the level of other food companies .
The board is dominated by the heirs of the late John T. Dorrance Jr. , who controlled about 58 % of Campbell 's stock when he died in April .
In recent months , Mr. Dorrance 's children and other family members have pushed for improved profitability and higher returns on their equity .
In August , the company took a $ 343 million pretax charge against fiscal 1989 earnings when it announced a world-wide restructuring plan .
The plan calls for closing at least nine plants and eliminating about 3 , 600 jobs .
But analysts said early results from the reorganization have been disappointing , especially in Europe , and there were signs that the board became impatient .
Campbell officials said Mr. McGovern was n't available yesterday to discuss the circumstances of his departure .
The company 's prepared statement quoted him as saying , '' The CEO succession is well along and I 've decided for personal reasons to take early retirement . ''
But people familiar with the agenda of the board 's meeting last week in London said Mr. McGovern was fired .
Mr. McGovern himself had said repeatedly that he intended to stay on until he reached the conventional retirement age of 65 in October 1991 , '' unless I get fired. '' Campbell said Mr. McGovern had withdrawn his name as a candidate for re-election as a director at the annual shareholder meeting , scheduled for Nov. 17 .
For fiscal 1989 , Mr. McGovern received a salary of $ 877 , 663 .
He owns about 45 , 000 shares of Campbell stock and has options to buy more than 100 , 000 additional shares .
He will be eligible for an annual pension of more than $ 244 , 000 with certain other fringe benefits .
During Mr. McGovern 's nine-year term as president , the company 's sales rose to $ 5.7 billion from $ 2.8 billion and net income increased to $ 274 million from $ 130 million , the statement said .
Mr. Baum said he and Mr. Harper both advocated closing some plants as long ago as early 1988. '' You 've got to make the restructuring work , '' said Mr. Baum. '' You 've got to make those savings now . ''
Mr. Harper expressed confidence that he and Mr. Baum can convince the board of their worthiness to run the company. '' We look upon this as a great opportunity to prove the fact that we have a tremendous management team , '' he said .
He predicted that the board would give the current duo until early next year before naming a new chief executive .
Mr. Baum said the two have orders to '' focus on bottom-line profits '' and to '' take a hard look at our businesses -- what is good , what is not so good. '' Analysts generally applaud the performance of Campbell U.S.A. , the company 's largest division , which posted 6 % unit sales growth and a 15 % improvement in operating profit for fiscal 1989. '' The way that we 've been managing Campbell U.S.A. can hopefully spread to other areas of the company , '' Mr. Baum said .
In the interview at headquarters yesterday afternoon , both men exuded confidence and seemed to work well together. '' You 've got two champions sitting right before you , '' said Mr. Baum. '' We play to win . ''
Wednesday , November 1 , 1989
The key U.S. and foreign annual interest rates below are a guide to general levels but do n't always represent actual transactions .
PRIME RATE : 10 1/2 % .
The base rate on corporate loans at large U.S. money center commercial banks .
FEDERAL FUNDS : 9 1/2 % high , 8 3/4 % low , 8 3/4 % near closing bid , 9 % offered .
Reserves traded among commercial banks for overnight use in amounts of $ 1 million or more .
Source : Fulton Prebon ( U.S.A. ) Inc .
DISCOUNT RATE : 7 % .
The charge on loans to depository institutions by the New York Federal Reserve Bank .
CALL MONEY : 9 3/4 % .
The charge on loans to brokers on stock exchange collateral .
COMMERCIAL PAPER placed directly by General Motors Acceptance Corp. : 8.55 % 30 to 44 days ; 8.25 % 45 to 59 days ; 8.45 % 60 to 89 days ; 8 % 90 to 119 days ; 7.90 % 120 to 149 days ; 7.80 % 150 to 179 days ; 7.55 % 180 to 270 days .
COMMERCIAL PAPER : High-grade unsecured notes sold through dealers by major corporations in multiples of $ 1 , 000 : 8.65 % 30 days ; 8.575 % 60 days ; 8.50 % 90 days .
CERTIFICATES OF DEPOSIT : 8.07 % one month ; 8.06 % two months ; 8.04 % three months ; 7.95 % six months ; 7.88 % one year .
Average of top rates paid by major New York banks on primary new issues of negotiable C.D.s , usually on amounts of $ 1 million and more .
The minimum unit is $ 100 , 000 .
Typical rates in the secondary market : 8.60 % one month ; 8.55 % three months ; 8.35 % six months .
BANKERS ACCEPTANCES : 8.50 % 30 days ; 8.48 % 60 days ; 8.30 % 90 days ; 8.15 % 120 days ; 8.07 % 150 days ; 7.95 % 180 days .
Negotiable , bank-backed business credit instruments typically financing an import order .
LONDON LATE EURODOLLARS : 8 3/4 % to 8 5/8 % one month ; 8 13/16 % to 8 11/16 % two months ; 8 3/4 % to 8 5/8 % three months ; 8 5/8 % to 8 1/2 % four months ; 8 1/2 % to 8 7/16 % five months ; 8 1/2 % to 8 3/8 % six months .
LONDON INTERBANK OFFERED RATES ( LIBOR ) : 8 3/4 % one month ; 8 3/4 % three months ; 8 1/2 % six months ; 8 7/ 16 % one year .
The average of interbank offered rates for dollar deposits in the London market based on quotations at five major banks .
FOREIGN PRIME RATES : Canada 13.50 % ; Germany 9 % ; Japan 4.875 % ; Switzerland 8.50 % ; Britain 15 % .
These rate indications are n't directly comparable ; lending practices vary widely by location .
TREASURY BILLS : Results of the Monday , October 30 , 1989 , auction of short-term U.S. government bills , sold at a discount from face value in units of $ 10 , 000 to $ 1 million : 7.78 % 13 weeks ; 7.62 % 26 weeks .
FEDERAL HOME LOAN MORTGAGE CORP. ( Freddie Mac ) : Posted yields on 30-year mortgage commitments for delivery within 30 days. 9.82 % , standard conventional fixed-rate mortgages ; 8.25 % , 2 % rate capped one-year adjustable rate mortgages .
Source : Telerate Systems Inc .
FEDERAL NATIONAL MORTGAGE ASSOCIATION ( Fannie Mae ) : Posted yields on 30 year mortgage commitments for delivery within 30 days ( priced at par ) 9.75 % , standard conventional fixed-rate mortgages ; 8.70 % , 6/2 rate capped one-year adjustable rate mortgages .
Source : Telerate Systems Inc .
MERRILL LYNCH READY ASSETS TRUST : 8.64 % .
Annualized average rate of return after expenses for the past 30 days ; not a forecast of future returns .
Robert L. Bernstein , chairman and president of Random House Inc. , announced his resignation from the publishing house he has run for 23 years .
A successor was n't named , which fueled speculation that Mr. Bernstein may have clashed with S.I. Newhouse Jr. , whose family company , Advance Publications Inc. , owns Random House .
Abrupt departures are n't unheard of within the Newhouse empire .
In an interview , Mr. Bernstein said his departure '' evolved out of discussions with Si Newhouse and that 's the decision I reached. '' He declined to elaborate , other than to say , '' It just seemed the right thing to do at this minute .
Sometimes you just go with your gut. '' Mr. Bernstein said he will stay until Dec. 31 and work with his successor , who is to be named soon .
Mr. Newhouse , meanwhile , insisted that he is n't unhappy with Mr. Bernstein or the performance of Random House , the largest trade publishing house in the U.S .
The company said the publisher 's annual sales volume increased to $ 800 million from $ 40 million during Mr. Bernstein 's tenure. '' Bob has handled the extraordinary growth of the company quite brilliantly , '' said Mr. Newhouse. '' The company is doing well , it 's stable , it 's got good people .
Bob has an agenda and this seemed like the natural time . ''
Publishing officials believe that while Random House has enjoyed spectacular growth and has smoothly integrated many acquisitions in recent years , some of the bigger ones have n't been absorbed so easily .
Crown Publishing Group , acquired last year , is said to be turning in disappointing results .
As a private company , Random House does n't report its earnings .
Mr. Bernstein , who succeeded Bennett Cerf , has been only the second president of Random House since it was founded in 1925 .
Speculation on his successor centers on a number of division heads at the house .
Possible candidates include Susan Petersen , president of Ballantine/Del Rey/ Fawcett , Random House 's huge and successful paperback division .
Some say Anthony Cheetham , head of a recently acquired British company , Century Hutchinson , could be chosen .
There is also speculation that Mr. Newhouse could bring in a powerhouse businessman or another Newhouse family member to run the business side , in combination with a publishing executive like Robert Gottlieb , who left Random House 's Alfred A. Knopf to run the New Yorker , also owned by the Newhouse family .
Not included on the most-likely-successor list are Joni Evans , recruited two years ago to be publisher of adult trade books for Random House , and Sonny Mehta , president of the prestigious Alfred A. Knopf unit .
When Ms. Evans took her job , several important divisions that had reported to her predecessor were n't included partly because she did n't wish to be a full-time administrator .
Mr. Mehta is widely viewed as a brilliant editor but a less-than-brilliant administrator and his own departure was rumored recently .
Mr. Bernstein , a tall , energetic man who is widely respected as a publishing executive , has spent much of his time in recent years on human rights issues .
Congress learned during the Reagan administration that it could intimidate the executive branch by uttering again and again the same seven words : '' Provided , that no funds shall be spent. . . . '' This phrase once again is found throughout the many appropriations bills now moving through Congress .
It signals Congress 's attempt , under the pretext of guarding the public purse , to deny the president the funding necessary to execute certain of his duties and prerogatives specified in Article II of the Constitution .
This species of congressional action is predicated on an interpretation of the appropriations clause that is erroneous and unconstitutional .
The appropriations clause states that '' No Money shall be drawn from the Treasury , but in Consequence of Appropriations made by Law. . . . '' The prevailing interpretation of the clause on Capitol Hill is that it gives Congress an omnipresent veto over every conceivable action of the president through the ability to withhold funding .
This interpretation was officially endorsed by Congress in 1987 in the Iran-Contra Report .
As partisans of congressional power understand , a '' power of the purse '' so broadly construed would emasculate the presidency and swallow the principle of separation of powers .
It is not supported by the text or history of the Constitution .
The framers hardly discussed the appropriations clause at the Constitutional Convention of 1787 , according to Madison 's notes .
To the extent they did , their concern was to ensure fiscal accountability .
Moreover , the framers believed that the nation needed a unitary executive with the independence and resources to perform the executive functions that the Confederation Congress had performed poorly under the Articles of Confederation .
It would contradict that objective if the appropriations clause ( technically a limitation on legislative power ) could be read as placing the president on Congress 's short leash , making the executive consist of the president and every member of Congress .
As it went to the conference panel now deliberating , the appropriations bill for the executive office of the president for fiscal 1990 contained some breathtaking attempts by Congress to rewrite the Constitution under the pretext of protecting the public 's money .
During the coming weeks , President Bush must decide whether to veto the bills containing them -- or , alternatively , to sign these bills into law with a statement declaring their intrusions on executive power to be in violation of Article II , and thus void and severable .
The 1990 appropriations legislation attempts to strip the president of his powers to make certain appointments as provided by Article II. Article II places on the president the duty to nominate , '' and by and with the Advice and Consent of the Senate '' appoint , ambassadors , judges , and other officers of the U.S .
It also empowers the president to make recess appointments , without Senate approval : '' The President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate , by granting Commissions which shall expire at the End of their next Session . ''
Yet Section 605 of the appropriations bill for the executive office provides : '' No part of any appropriation for the current fiscal year contained in this or any other Act shall be paid to any person for the filling of any position for which he or she has been nominated after the Senate has voted not to approve the nomination of said person. '' Thus , with one brief passage in an appropriations bill , Congress repeals the president 's power to make recess appointments under Article II .
Section 605 also imposes unconstitutional conditions on the president 's ability to nominate candidates of his choosing .
The language of the appropriations rider implies that any nomination to any position of a rejected nominee will result in the president being denied funding to pay that person 's salary .
The president could probably not avoid this restriction by choosing people willing to serve without pay , because the Anti-Deficiency Act prohibits voluntary service to the government .
The 1990 appropriations bills also contain a number of '' muzzling '' provisions that violate the recommendation clause in Article II of the Constitution .
Muzzling provisions , which might be called '' blindfold laws '' as well , prevent the executive branch from even looking at certain policy options , let alone from recommending them to Congress .
Such laws violate the provision in Article II that requires the president to make recommendations to Congress , but which gives the president the discretion to select the subject matter of those recommendations .
Typically , these laws seek to prevent executive branch officials from inquiring into whether certain federal programs make any economic sense or proposing more market-oriented alternatives to regulations .
Probably the most egregious example is a proviso in the appropriations bill for the executive office that prevents the president 's Office of Management and Budget from subjecting agricultural marketing orders to any cost-benefit scrutiny .
There is something inherently suspect about Congress 's prohibiting the executive from even studying whether public funds are being wasted in some favored program or other .
Perhaps none of the unconstitutional conditions contained in the appropriations bills for fiscal 1990 better illustrates Congress 's attempt to usurp executive power than Section 609 of the executive-office bill : '' None of the funds made available pursuant to the provisions of this Act shall be used to implement , administer , or enforce any regulation which has been disapproved pursuant to a resolution of disapproval duly adopted in accordance with the applicable law of the United States . ''
This provision amounts to a legislative veto over the president 's execution of the law , since a one-house resolution could be said to be '' duly adopted '' even though it would require neither bicameral action in Congress nor presentation to the president for his signature or veto .
The Supreme Court 's decision in INS v .
Chadha held that legislative vetoes are unconstitutional .
President Bush should veto appropriations acts that contain these kinds of unconstitutional conditions on the president 's ability to discharge his duties and exercise his prerogatives .
If President Bush fails to do so in his first year , he will invite Congress , for the remainder of his presidency , to rewrite Article II of the Constitution to suit its purposes .
What becomes custom in the Bush administration will only become more difficult for future presidents , including Democrats , to undo .
President Reagan learned that lesson .
By 1987 , then-Speaker Jim Wright was discussing arms control in Moscow with Mikhail Gorbachev and then attempting to direct the president , through an appropriations rider , to treat the Soviets as though the Senate had ratified SALT II .
If a veto is unworkable because it would leave part of the executive branch unfunded , the president could sign the appropriations bills into law and assert a power of excision , declaring the rider restricting his Article II powers to be unconstitutional and severable .
The Constitution does not expressly give the president such power .
However , the president does have a duty not to violate the Constitution .
The question is whether his only means of defense is the veto .
Excision of appropriations riders that trespass on the president 's duties and prerogative under Article II would be different from the line-item veto .
As discussed in the context of controlling federal spending , the line-item veto is characterized as a way for the president to excise perfectly constitutional provisions in a spending bill that are objectionable merely because they conflict with his policy objectives .
The excision of unconstitutional conditions in an appropriations bill would be a power of far more limited applicability .
One could argue that it is not an assertion of a item veto at all for the president , by exerting a power of excision , to resist unconstitutional conditions in legislation that violate the separation of powers .
There is no downside if the president asserts a right of excision over unconstitutional conditions in the fiscal 1990 appropriations bills .
If Congress does nothing , President Bush will have won .
If Congress takes the dispute to the Supreme Court ( assuming it can establish standing to sue ) , President Bush might win .
In that case , he might receive an opinion from the court that is a vindication of the president 's right to perform the duties and exercise the prerogatives the framers thought should be entrusted to the executive .
If President Bush loses at the court , it might be disappointing , as Morrison v .
Olson was for the Reagan administration .
But the presidency would be no worse off than it is now .
Moreover , the electorate would have received a valuable civics lesson in how the separation of powers works in practice .
As it stands now , Congress presumes after the Reagan administration that the White House will take unconstitutional provisions in appropriations bills lying down .
President Bush should set things straight .
If he does not , he will help realize Madison 's fear in The Federalist No. 48 of a legislature '' everywhere extending the sphere of its activity and drawing all powers into its impetuous vortex . ''
Mr. Sidak served as an attorney in the Reagan administration .
His longer analysis of executive power and the appropriations clause is to appear in the Duke Law Journal later this year .
Despite one of the most devastating droughts on record , net cash income in the Farm Belt rose to a new high of $ 59.9 billion last year .
The previous record was $ 57.7 billion in 1987 , according to the Agriculture Department .
Net cash income -- the amount left in farmers ' pockets after deducting expenses from gross cash income -- increased in 33 states in 1988 , as the drought cut into crop yields and drove up commodity prices , the department 's Economic Research Service reported yesterday .
Most of those states set farm income records .
The worst crop damage occurred in the Midwestern Corn Belt and the northern Great Plains .
What saved many farmers from a bad year was the opportunity to reclaim large quantities of grain and other crops that they had '' mortgaged '' to the government under price-support loan programs .
With prices soaring , they were able to sell the reclaimed commodities at '' considerable profit , '' the agency 's 240-page report said .
In less parched areas , meanwhile , farmers who had little or no loss of production profited greatly from the higher prices .
To the surprise of some analysts , net cash income rose in some of the hardest-hit states , including Indiana , Illinois , Nebraska and the Dakotas .
Analysts attributed the increases partly to the $ 4 billion disaster-assistance package enacted by Congress .
Last year 's record net cash income confirms the farm sector 's rebound from the agricultural depression of the early 1980s .
It also helps explain the reluctance of the major farm lobbies and many lawmakers to make any significant changes in the 1985 farm program next year .
Commodity prices have been rising in recent years , with the farm price index hitting record peaks earlier this year , as the government curtailed production with land-idling programs to reduce price-depressing surpluses .
At the same time , export demand for U.S. wheat , corn and other commodities strengthened , said Keith Collins , a department analyst .
Farmers also benefited from strong livestock prices , as the nation 's cattle inventory dropped close to a 30-year low .
``All of these forces came together in 1988 to benefit agriculture , '' Mr. Collins said .
California led the nation with $ 6.5 billion in net cash income last year , followed by Texas , $ 3.9 billion ; Iowa , $ 3.4 billion ; Florida , $ 3.1 billion ; and Minnesota , $ 2.7 billion .
Iowa and Minnesota were among the few major farm states to log a decline in net cash income .
Despite federal disaster relief , the drought of 1988 was a severe financial setback for an estimated 10 , 000 to 15 , 000 farmers , according to the department .
Many lost their farms .
Department economists do n't expect 1989 to be as good a year as 1988 was .
Indeed , net cash income is likely to fall this year as farm expenses rise and government payments to farmers decline .
At the same time , an increase of land under cultivation after the drought has boosted production of corn , soybeans and other commodities , causing a fall in prices that has been only partly cushioned by heavy grain buying by the Soviets .
Last year , government payments to farmers slipped to less than $ 14.5 billion from a record $ 16.7 billion in 1987 .
Payments are expected to range between $ 9 billion and $ 12 billion this year .
After years of struggling , the Los Angeles Herald Examiner will publish its last edition today , shut down by its parent , Hearst Corp. , following unsuccessful efforts to sell the venerable newspaper .
The demise of the 238 , 000-circulation Herald , once the nation 's largest afternoon newspaper with circulation exceeding 700 , 000 , turns the country 's second-largest city into a one-newspaper town , at least in some senses .
The Los Angeles Times , with a circulation of more than 1.1 million , dominates the region .
But it faces stiff competition in Orange County from the Orange County Register , which sells more than 300 , 000 copies a day , and in the San Fernando Valley from the Los Angeles Daily News , which sells more than 170 , 000 .
Nearby cities such as Pasadena and Long Beach also have large dailies .
In July , closely held Hearst , based in New York , put the paper on the block .
Speculation had it that the company was asking $ 100 million for an operation said to be losing about $ 20 million a year , but others said Hearst might have virtually given the paper away .
An attempted buy-out led by John J. McCabe , chief operating officer , never materialized , and a stream of what one staff member dismissed as '' tire-kickers and lookee-loos '' had filed through since .
The prospective buyers included investor Marvin Davis and the Toronto Sun .
The death of the Herald , a newsstand paper in a freeway town , was perhaps inevitable .
Los Angeles is a sprawling , balkanized newspaper market , and advertisers seemed to feel they could buy space in the mammoth Times , then target a particular area with one of the regional dailies .
The Herald was left in limbo .
Further , the Herald seemed torn editorially between keeping its old-time Hearst readership -- blue-collar and sports-oriented -- and trying to provide a sprightly , upscale alternative to the sometimes staid Times .
Hearst had flirted with a conversion to tabloid format for years but never executed the plan .
The Herald joins the Baltimore News-American , which folded , and the Boston Herald-American , which was sold , as cornerstones of the old Hearst newspaper empire abandoned by the company in the 1980s .
Many felt Hearst kept the paper alive as long as it did , if marginally , because of its place in family history .
Its fanciful offices were designed by architect Julia Morgan , who built the Hearst castle at San Simeon .
William Randolph Hearst had kept an apartment in the Spanish Renaissance-style building .
Analysts said the Herald 's demise does n't necessarily represent the overall condition of the newspaper industry. '' The Herald was a survivor from a bygone age , '' said J. Kendrick Noble , a media analyst with PaineWebber Inc. '' Actually , the long deterioration in daily newspapers shows signs of coming to an end , and the industry looks pretty healthy . ''
Founded as the Examiner in 1903 by Mr. Hearst , the Herald was crippled by a bitter , decade-long strike that began in 1967 and cut circulation in half .
Financially , it never recovered ; editorially , it had its moments .
In 1979 , Hearst hired editor James Bellows , who brightened the editorial product considerably .
He and his successor , Mary Anne Dolan , restored respect for the editorial product , and though in recent years the paper had been limping along on limited resources , its accomplishments were notable .
For example , the Herald consistently beat its much-larger rival on disclosures about Los Angeles Mayor Tom Bradley 's financial dealings .
The Herald 's sports coverage and arts criticism were also highly regarded .
Robert J. Danzig , vice president and general manager of Hearst Newspapers , stood up in the paper 's newsroom yesterday and announced that no buyers had stepped forward and that the paper would fold , putting more than 730 full-time employees out of work .
Hearst said it would provide employees with a placement service and pay them for 60 days .
Some long-tenured employees will receive additional benefits , the company said .
Hours after the announcement , representatives of the Orange County Register were in a bar across the street recruiting .
The reaction in the newsroom was emotional. '' I 've never seen so many people crying in one place at one time , '' said Bill Johnson , an assistant city editor .
``So Long , L.A. '' was chosen as the paper 's final headline .
``I 'm doing the main story , and I 'm already two beers drunk , '' said reporter Andy Furillo , whom the Times hired away several years ago but who returned to the Herald out of preference .
His wife also works for the paper , as did his father .
Outside , a young pressman filling a news box with an extra edition headlined '' Herald Examiner Closes '' refused to take a reader 's quarter. '' Forget it , '' he said as he handed her a paper. '' It does n't make any difference now . ''
Olympia Broadcasting Corp. said it did n't make a $ 1.64 million semiannual interest payment due yesterday on $ 23.4 million of senior subordinated debentures .
The radio-station owner and programmer said it was trying to obtain additional working capital from its senior secured lenders and other financial institutions .
It said it needs to make the payment by Dec. 1 to avoid a default that could lead to an acceleration of the debt .
In September , the company said it was seeking offers for its five radio stations in order to concentrate on its programming business .
If you 'd really rather have a Buick , do n't leave home without the American Express card .
Or so the slogan might go .
American Express Co. and General Motors Corp. 's beleaguered Buick division are joining forces in a promotion aimed at boosting Buick 's sales while encouraging broader use of the American Express card .
The companies are giving four-day vacations for two to Buick buyers who charge all or part of their down payments on the American Express green card .
They have begun sending letters explaining the program , which began Oct. 18 and will end Dec. 18 , to about five million card holders .
Neither company would disclose the program 's cost .
Buick approached American Express about a joint promotion because its card holders generally have a '' good credit history '' and are '' good at making payments , '' says a spokeswoman for the division .
American Express also represents the upscale image '' we 're trying to project , '' she adds .
Buick has been seeking for the past few years to restore its reputation as '' the doctor 's car '' -- a product for upscale professionals .
Sales were roughly flat in the 1989 model year compared with a year earlier , though industry sales fell .
But since the 1990 model year began Oct. 1 , Buick sales have plunged 33 % .
For American Express , the promotion is part of an effort to broaden the use of its card for retail sales , where the company expects to get much of the future growth in its card business .
Traditionally , the card has been used mainly for travel and entertainment expenses .
Phillip Riese , an American Express executive vice president , says the promotion with Buick is his company 's first with an auto maker , but '' hopefully { will be } the first of many '' in the company 's effort to promote its green card as '' the total car-care card. '' To that end , American Express has been signing up gasoline companies , car repair shops , tire companies and car dealers to accept the card .
Many auto dealers now let car buyers charge part or all of their purchase on the American Express card , but few card holders realize this , Mr. Riese says .
Until now , however , buyers who wanted to finance part of a car purchase through General Motors Acceptance Corp. could n't put their down payment on a charge card because of possible conflicts with truth-in-lending and state disclosure laws over finance rates , says a spokesman for the GM finance arm .
But GMAC approved the Buick program , he says , because the American Express green card requires payment in full upon billing , and so does n't carry any finance rates .
Mr. Riese says American Express considers GM and Buick '' very sophisticated direct-mail marketers , '' so '' by joining forces with them we have managed to maximize our direct-mail capability. '' In addition , Buick is a relatively respected nameplate among American Express card holders , says an American Express spokeswoman .
When the company asked members in a mailing which cars they would like to get information about for possible future purchases , Buick came in fourth among U.S. cars and in the top 10 of all cars , the spokeswoman says .
American Express has more than 24 million card holders in the U.S. , and over half have the green card .
GMAC screened the card-member list for holders more than 30 years old with household incomes over $ 45 , 000 who had n't '' missed any payments , '' the Buick spokeswoman says .
Some 3.8 million of the five million who will get letters were preapproved for credit with GMAC .
These 3.8 million people also are eligible to get one percentage point off GMAC 's advertised finance rates , which start at 6.9 % for two-year loan contracts .
A spokesman for Visa International 's U.S. subsidiary says his company is using promotions to increase use of its cards , but does n't have plans for a tie-in similar to the American Express-Buick link .
Three divisions at American Express are working with Buick on the promotion : the establishment services division , which is responsible for all merchants and companies that accept the card ; the travel division ; and the merchandise sales division .
The vacation packages include hotel accommodations and , in some cases , tours or tickets to local attractions , but not meals .
Destinations are Chicago ; Honolulu ; Las Vegas , Nev. ; Los Angeles ; Miami Beach , Fla. ; New Orleans ; New York ; Orlando , Fla. ; San Francisco ; and Washington , D.C .
A buyer who chooses to fly to his destination must pay for his own ticket but gets a companion 's ticket free if they fly on United Airlines .
In lieu of the vacation , buyers can choose among several prizes , including a grandfather clock or a stereo videocassette recorder .
Card holders who receive the letter also are eligible for a sweepstakes with Buick cars or a Hawaii vacation as prizes .
If they test-drive a Buick , they get an American Express calculator .
This is n't Buick 's first travel-related promotion .
A few years ago , the company offered two round-trip tickets on Trans World Airlines to buyers of its Riviera luxury car .
The promotion helped Riviera sales exceed the division 's forecast by more than 10 % , Buick said at the time .
The United Kingdom High Court declared illegal a variety of interest-rate swap transactions and options deals between a London borough council and commercial banks .
The ruling could lead to the cancellation of huge bank debts the London Borough of Hammersmith and Fulham ran up after losing heavily on swap transactions .
As many as 70 U.K. and international banks stand to lose several hundred million pounds should the decision be upheld and set a precedent for other municipalities .
An appeal is expected .
In response to the ruling , gilt futures swiftly plunged more than a point yesterday before recovering much of the loss by the end of the session .
Gilts , or British government bonds , which also fell sharply initially , retraced some of the losses to end about 3/8 point lower .
The council , which is alleged to have engaged in over 600 deals valued at over # 6 billion ( $ 9.5 billion ) , lost millions of pounds from soured swap deals .
At one point , Hammersmith is reported to have accounted for as much as 10 % of the sterling market in interest-rate swap dealings .
When two parties engage in an interest-rate swap , they are betting against each other on future rates .
Thus , an institution obligated to make fixed-rate interest payments on debt swaps the payments with another making floating-rate payments .
In most of the British transactions , the municipalities agreed to make floating-rate payments to banks , which would make fixed-rate payments .
As interest rates rose , municipalities owed the banks more than the banks were paying them .
The court hearing began in early October at the request of Anthony Hazell , district auditor for Hammersmith , who argued that local councils are n't vested with constitutional authority to engage in such capital-markets activities .
The council backed the audit commission 's stand that the swap transactions are illegal .
Although the Hammersmith and Fulham council was by far the most active local authority engaging in such capital-markets transactions , the court decision could set a precedent for similar transactions by 77 other local councils .
``While this court ruling was only on Hammersmith , it will obviously be very persuasive in other cases of a similar nature , '' a solicitor representing one of the banks said .
Already , 10 local councils have refused to honor fees and payments to banks incurred during various swaps dealings .
Other financial institutions involved include Barclays Bank PLC , Midland Bank PLC , Security Pacific Corp. , Chemical Banking Corp. 's Chemical Bank , Citicorp 's Citibank and Mitsubishi Finance International .
If the banks exhaust all avenues of appeal , it is possible that they would seek to have the illegality ruling work both ways , some market sources said .
Banks could seek to recover payments to local authorities in instances where the banks made net payments to councils .
Officials from the various banks involved are expected to meet during the next few days to consider other arrangements with local authorities that could be questionable .
The banks have 28 days to file an appeal against the ruling and are expected to do so shortly .
In the aftermath of the stock market 's gut-wrenching 190-point drop on Oct. 13 , Kidder , Peabody & Co. 's 1 , 400 stockbrokers across the country began a telephone and letter-writing campaign aimed at quashing the country 's second-largest program trader .
The target of their wrath ?
Their own employer , Kidder Peabody .
Since October 's minicrash , Wall Street has been shaken by an explosion of resentment against program trading , the computer-driven , lightning-fast trades of huge baskets of stocks and futures that can send stock prices reeling in minutes .
But the heated fight over program trading is about much more than a volatile stock market .
The real battle is over who will control that market and reap its huge rewards .
Program trading itself , according to many academics who have studied it , is merely caught in the middle of this battle , unfairly labeled as the evil driving force of the marketplace .
The evidence indicates that program trading did n't , in fact , cause the market 's sharp fall on Oct. 13 , though it may have exacerbated it .
On one side of this power struggle stand the forces in ascendency on Wall Street -- the New Guard -- consisting of high-tech computer wizards at the major brokerage firms , their pension fund clients with immense pools of money , and the traders at the fast-growing Chicago futures exchanges .
These are the main proponents of program trading .
Defending their ramparts are Wall Street 's Old Guard -- the traditional , stock-picking money managers , tens of thousands of stock brokers , the New York Stock Exchange 's listed companies and the clannish floor traders , known as specialists , who make markets in their stocks .
So far , Wall Street 's Old Guard seems to be winning the program-trading battle , successfully mobilizing public and congressional opinion to bludgeon their tormentors .
The Chicago Mercantile Exchange , a major futures marketplace , yesterday announced the addition of another layer of trading halts designed to slow program traders during a rapidly falling stock market , and the Big Board is expected today to approve some additional restrictions on program trading .
Stung by charges that their greed is turning the stock market into a gigantic crapshoot , almost all the big investment banking houses have abandoned index arbitrage , a common form of program trading , for their own accounts in the past few days .
A few , such as giant Merrill Lynch & Co. , now refuse even to do index arbitrage trades for clients .
The Old Guard 's assault on program trading and its practitioners has been fierce and broad-based , in part because some Old Guard members feel their very livelihood is at stake .
Some , such as traditional money manager Neuberger & Berman , have taken out national newspaper advertisements demanding that market regulators '' stop the numbers racket on Wall Street . ''
Big Board stock specialists , in a bold palace revolt , began shortly after Oct. 13 to telephone the corporate executives of the companies whose stock is listed on the Big Board to have them pressure the exchange to ban program trading .
Charles Wohlstetter , the chairman of Contel Corp. who is rallying other CEOs to the anti-program trading cause , says he has received '' countless '' letters offering support. '' They said universally , without a single exception : Do n't even compromise .
Kill it , '' he says .
Wall Street 's New Guard is n't likely to take all this lying down for long , however .
Its new products and trading techniques have been highly profitable .
Program trading money managers have gained control over a big chunk of the invested funds in this country , and the pressures on such money managers to produce consistent profits has wedded them to the ability to move rapidly in and out the market that program trading gives them .
What 's more , the last time major Wall Street firms said they were getting out of program trading -- in the aftermath of the 1987 crash -- they waited a few months and then sneaked back into it .
Even some members of the Old Guard , despite their current advantage , seem to be conceding that the future belongs with the New Guard .
Last week , Robert M. Bradley , one of the Big Board 's most respected floor traders and head of a major traders ' organization , surrendered .
He sold his exchange seat and wrote a bitter letter to Big Board Chairman John J. Phelan Jr. in which he said the Big Board is too focused on machines , rather than people .
He said the exchange is '' headed for a real crisis '' if program trading is n't curbed .
``I do not want my money invested in what I consider as nothing more than a casino , '' Mr. Bradley wrote .
The battle has turned into a civil war at some firms and organizations , causing internal contradictions and pitting employee against employee .
At Kidder , a unit of General Electric Co. , and other big brokerage firms , stockbrokers battle their own firm 's program traders a few floors away .
Corporations like Contel denounce program trading , yet Contel has in the past hired pension fund managers like Bankers Trust Co. that are also big program traders .
The Big Board -- the nation 's premier stock exchange -- is sharply divided between its floor traders and its top executives .
Its entrenched 49 stock specialists firms are fighting tooth and nail against programs .
But the Big Board 's leadership -- over the specialists ' protests -- two weeks ago began trading a new stock '' basket '' product designed to facilitate program trading. '' A lot of people would like to go back to 1970 , '' before program trading , Mr. Phelan said this week. '' I would like to go back to 1970 .
But we are not going back to 1970 . ''
Again and again , program-trading 's critics raise the '' casino '' theme .
They say greedy market manipulators have made a shambles of the nation 's free-enterprise system , turning the stock market into a big gambling den , with the odds heavily stacked against the small investor. '' The public did n't come to the market to play a game ; they can go to Off-Track Betting for that , '' says A. Brean Murray , chairman of Brean Murray , Foster Securities , a traditional money management firm .
The program traders , on the other hand , portray old-fashioned stock pickers as the Neanderthals of the industry .
Critics like Mr. Murray '' are looking for witches , and people who use computers to trade are a convenient boogieman , '' says J. Thomas Allen , president of Advanced Investment Management Inc. , a Pittsburgh firm that runs a $ 200 million fund that uses index arbitrage. '' Just a blind fear of the unknown is causing them to beg the regulators for protection . ''
For all the furor , there is nothing particularly complex about the concept of stock-index arbitrage , the most controversial type of computer-assisted program trading .
Like other forms of arbitrage , it merely seeks to take advantage of momentary discrepancies in the price of a single product -- in this case , a basket of stocks -- in different markets -- in this case the New York Stock Exchange and the Chicago futures markets .
That divergence is what stock index traders seek .
When it occurs , the traders place orders via computers to buy the basket of stocks ( such as the 500 stocks that constitute the Standard & Poor 's 500 stock index ) in whichever market is cheaper and sell them in the more expensive market ; they lock in the difference in price as profit .
Such program trades , which can involve the purchase or sale of millions of dollars of stock , occur in a matter of seconds .
A program trade of $ 5 million of stock typically earns a razor-thin profit of $ 25 , 000 .
To keep program-trading units profitable in the eyes of senior brokerage executives , traders must seize every opportunity their computers find .
The speed with which such program trades take place and the volatile price movements they can cause are what program trading critics profess to despise. '' If you continue to do this , the investor becomes frightened -- any investor : the odd lotter , mutual funds and pension funds , '' says Larry Zicklin , managing partner at Neuberger & Berman .
But many experts and traders say that program trading is n't the main reason for stock-market gyrations. '' I have not seen one iota of evidence '' to support restrictions on program trading , says a Vanderbilt University finance professor , Hans Stoll , an authority on the subject .
Says the Big Board 's Mr. Phelan , '' Volatility is greater than program trading . ''
The Oct. 13 plunge was triggered not by program traders , but by news of the unraveling of the $ 6.79 billion buy-out of UAL Corp. Unable to unload UAL and other airline shares , takeover-stock speculators , or risk arbitragers , dumped every blue-chip stock they had .
While program trades swiftly kicked in , a '' circuit breaker '' that halted trading in stock futures in Chicago made some program trading impossible .
Susan Del Signore , head trader at Travelers Investment Management Co. , says critics are ignoring '' the role the { takeover stock } speculator is taking in the market as a source of volatility. '' Many arbs are '' overleveraged , '' she says , and they '' have to sell when things look like they fall apart . ''
Like virtually everything on Wall Street , the program-trading battle is over money , and the traditionalists have been losing out on bundles of it to the New Guard in recent years .
Take the traditional money managers , or '' stock pickers , '' as they are derisively known among the computer jockeys .
Traditional stock managers like to charge 50 cents to 75 cents for every $ 100 they manage for big institutional investors , and higher fees for smaller investors .
Yet many such managers consistently fail to even keep up with , much less beat , the returns of standard benchmarks like the S & P
Not surprisingly , old-style money managers have been losing clients to giant stock-index funds that use computers to juggle portfolios so they mirror the S & P 500 .
The indexers charge only a few pennies per $ 100 managed .
Today , about $ 200 billion , or 20 % of all pension-fund stock investments , is held by index funds .
The new Wall Street of computers and automated trading threatens to make dinosaurs of the 49 Big Board stock-specialist firms .
These small but influential floor brokers long have earned fat returns of 30 % to 40 % a year on their capital , by virtue of their monopoly in making markets in individual stocks .
The specialists see any step to electronic trading as a death knell .
And they believe the Big Board , under Mr. Phelan , has abandoned their interest .
The son of a specialist and once one himself , Mr. Phelan has nonetheless been striving -- with products like the new stock basket that his former colleagues dislike so much -- to keep index funds and other program traders from taking their business to overseas markets .
Meanwhile , specialists ' trading risks have skyrocketed as a result of stock-market volatility. '' When the sell programs hit , you can hear the order printers start to go '' on the Big Board trading floor , says one specialist there. '' The buyers walk away , and the specialist is left alone '' as the buyer of last resort for his stable of stocks , he contends .
No one is more unhappy with program trading than the nation 's stockbrokers .
They are still trying to lure back small investors spooked by the 1987 stock-market crash and the market 's swings since then. '' Small investors are absolutely dismayed that Wall Street is stacking the deck against them , and these wide swings are scaring them to death , '' says Raymond A. Mason , chairman of regional broker Legg Mason Inc. in Baltimore .
Stockbrokers ' business and pay has been falling .
Last year , the average broker earned $ 71 , 309 , 24 % lower than in 1987 .
Corporate executives resent that their company 's stock has been transformed into a nameless piece of a stock-index basket .
Index traders who buy all 500 stocks in the S & P 500 often do n't even know what the companies they own actually do , complains Andrew Sigler , chairman of Champion International Corp. '' Do you make sweatshirts or sparkplugs ?
Oh , you 're in the paper business , '' is one reaction Mr. Sigler says he 's gotten from his big institutional shareholders .
By this September , program traders were doing a record 13.8 % of the Big Board 's average daily trading volume .
Among the top practitioners were Wall Street blue bloods : Morgan Stanley & Co. , Kidder Peabody , Merrill Lynch , Salomon Brothers Inc. and PaineWebber Group Inc .
But then came Oct. 13 and the negative publicity orchestrated by the Old Guard , particularly against index arbitrage .
The indexers ' strategy for the moment is to hunker down and let the furor die. '' There 's a lynch-mob psychology right now , '' says the top program-trading official at a Wall Street firm. '' Wall Street 's cash cow has been gored , but I do n't think anyone has proven that index arbitrage is the problem . ''
Too much money is at stake for program traders to give up .
For example , stock-index futures began trading in Chicago in 1982 , and within two years they were the fastest-growing futures contract ever launched .
Stock futures trading has minted dozens of millionaires in their 20s and 30s .
Now , on a good day , Chicago 's stock-index traders trade more dollars worth of stock futures than the Big Board trades in stock .
Now the stage is set for the battle to play out .
The anti-programmers are getting some helpful thunder from Congress .
Program traders ' '' power to create total panic is so great that they ca n't be allowed to have their way , '' says Rep. Edward Markey , a Massachusetts Democrat. '' We have to have a system that says to those largest investors : `Sit down ! You will not panic , you will not put the financial system in jeopardy. ' ''
But the prospects for legislation that targets program trading is unlikely anytime soon .
Many people , including the Big Board , think that it 's too late to put the genie back in the bottle .
The Big Board 's directors meet today to approve some program-trading restrictions , but a total ban is n't being considered , Big Board officials say .
``You 're not going to stop the idea of trading a basket of stocks , '' says Vanderbilt 's Prof .
Stoll. '' Program trading is here to stay , and computers are here to stay , and we just need to understand it . ''
Short of a total ban , some anti-programmers have proposed several middle-ground reforms , which they say would take away certain advantages program traders currently enjoy in the marketplace that other investors do n't .
One such proposal regarding stock-index futures is an increase in the margin requirement -- or the '' good-faith '' payment of cash needed to trade them -- to about the same level as the margin requirement for stocks .
Currently , margins on stock futures purchases are much lower -- roughly 7 % compared with 50 % for stocks -- making the futures market much faster and potentially more speculative .
Program trading critics also want the Federal Reserve Board , rather than the futures industry , to set such margins .
Futures traders respond that low margins help keep their markets active .
Higher margins would chase away dozens of smaller traders who help larger traders buy and sell , they say .
Another proposed reform is to have program traders answer to an '' uptick rule '' a reform instituted after the Great Crash of 1929 that protects against stocks being relentlessly beaten downward by those seeking to profit from lower prices , namely short sellers .
The Big Board 's uptick rule prevents the short sale of a stock when the stock is falling in price .
But in 1986 , program traders received what amounted to an exemption from the uptick rule in certain situations , to make it easier to link the stock and futures markets .
A reinstatement of the uptick rule for program traders would slow their activity considerably .
Program traders argue that a reinstatement of the rule would destroy the '' pricing efficiency '' of the futures and stock markets .
James A. White contributed to this article .
Fundamentalists Jihad .START
Big Board Chairman John Phelan said yesterday that he could support letting federal regulators suspend program trading during wild stock-price swings .
Thus the band-wagon psychology of recent days picks up new impetus .
Index arbitrage is a common form of program trading .
As usually practiced it takes advantage of a rather basic concept : Two separate markets in different locations , trading basically the same widgets , ca n't trade them for long at prices that are widely different .
In index arbitrage , the widget is the S & P 500 , and its price is constantly compared between the futures market in Chicago and the stock markets largely in New York .
To profit from an index-arbitrage opportunity , someone who owns the S & P 500 widget in New York must sell it and replace it with a cheaper S & P 500 widget in Chicago .
If the money manager performing this service is being paid by his clients to match or beat the return of the S & P 500 index , he is likely to remain fully invested at all times. ( Few , if any , index-fund managers will risk leveraging performance by owning more than 100 % exposure to stocks , and equally few will want to own less than a 100 % position should stocks rise . )
By constantly seeking to own the cheapest widget , index-arbitrage traders hope to add between 1 % and 3 % to the annual return of the S & P 500 .
That represents a very thin '' excess '' return , certainly far less than what most fundamental stock pickers claim to seek as their performance objective .
The fact that a vast majority of fundamentalist money managers fail to beat the S & P 500 may contribute to the hysteria surrounding the issue .
As more managers pursue the index-arbitrage strategy , these small opportunities between markets will be reduced and , eventually , eliminated .
The current opportunities arise because the process for executing a buy or sell order in the actual stocks that make up the S & P 500 is more cumbersome than transacting in the futures market .
The New York Stock Exchange 's attempt to introduce a new portfolio basket is evidence of investors ' desires to make fast and easy transactions of large numbers of shares .
So if index arbitrage is simply taking advantage of thin inefficiencies between two markets for the same widget , how did '' program trading '' evolve into the evil creature that is evoking the curses of so many observers ?
All arguments against program trading , even those pressed without fact , conclude with three expected results after '' reforms '' are implemented : 1 ) reduced volatility , 2 ) a long-term investment focus , and 3 ) a level playing field for the small investor .
But many of these reforms are unneeded , even harmful .
Reducing volatility .
An index-arbitrage trade is never executed unless there is sufficient difference between the markets in New York and Chicago to cover all transaction costs .
Arbitrage does n't cause volatility ; it responds to it .
Think about what causes the difference in prices between the two markets for S & P 500 stocks -- usually it is large investors initiating a buy or sell in Chicago .
A large investor will likely cause the futures market to decline when he sells his futures .
Arbitrage simply transfers his selling pressure from Chicago to New York , while functioning as a buyer in Chicago .
The start of the whole process is the key-someone must fundamentally increase or decrease his ownership in widgets to make widget prices move .
Why does this large hypothetical seller trade in Chicago instead of New York ?
Perhaps he is willing to sacrifice to the arbitrage trader some small profit in order to get quick and certain execution of his large trade .
In a competitive market , this investor has many ways to execute his transactions , and he will have more alternatives ( both foreign and domestic ) if his volume is profitable for an exchange to handle .
If not Chicago , then in New York ; if not the U.S. , then overseas .
Volatility surrounding his trades occurs not because of index arbitrage , but because his is a large addition or subtraction to a widget market with finite liquidity .
Eliminate arbitrage and liquidity will decline instead of rising , creating more volatility instead of less .
The speed of his transaction is n't to be feared either , because faster and cleaner execution is desirable , not loathsome .
If slowing things down could reduce volatility , stone tablets should become the trade ticket of the future .
Encouraging long-term investing .
We must be very cautious about labeling investors as '' long-term '' or '' short-term. '' Policies designed to encourage one type of investor over another are akin to placing a sign over the Big Board 's door saying : '' Buyers welcome , sellers please go away ! '' The ultimate goal of any investor is a profit motive , and regulators should not concern themselves with whether investors are sufficiently focused on the long term .
A free market with a profit motive will attract each investor to the liquidity and risks he can tolerate .
In point of fact , volatility as measured by the annualized standard deviation of daily stock price movements has frequently been much higher than it is today .
Periods before the advent of futures or program trading were often more volatile , usually when fundamental market conditions were undergoing change ( 1973-75 , 1937-40 , and 1928-33 for example ) .
It is interesting to see the fundamental stock pickers scream '' foul '' on program trading when the markets decline , while hailing the great values still abounding as the markets rise .
Could rising volatility possibly be related to uncertainty about the economics of stocks , instead of the evil deeds of program-trading goblins ?
Some of the proposed fixes for what is labeled '' program-trading volatility '' could be far worse than the perceived problem .
In using program trading as a whipping boy , fundamentalist investors stand to gain the high ground in wooing small investors for their existing stock-selection products .
They may , however , risk bringing some damaging interference from outside the markets themselves .
How does a nice new tax , say 5 % , on any financial transaction sound ?
That ought to make sure we 're all thinking for the long term .
Getting a level playing field .
This argument is perhaps the most interesting one for abolishing program trading -- not because of its merits , but because of the firms championing the cause .
The loudest of these reformers are money managers who cater to smaller investors .
They continually advise their clients on which individual stocks to buy or sell , while their clients continue to hope for superior performance .
Even with mutual funds , the little investor continues to tolerate high fees , high commissions and poor performance , while index-fund managers slowly amass a better record with lower fees , lower commissions and less risk .
Yet our efforts are somehow less noble than those of an investment expert studiously devouring press clippings on each company he follows .
Almost all new regulation is introduced in the interests of protecting the little guy , and he invariably is the one least able to cope with its consequences .
If spreads available from index arbitrage are so enormous , surely any sizable mutual-fund company could profit from offering it to small investors .
The sad reality is that the retail investor continues to pursue stellar performers first , while leaving institutions to grapple with basis points of performance on large sums of money quarter by quarter .
Cost-effective index funds just are n't sexy enough to justify the high fees and commissions that retail customers frequently pay , and that institutional customers refuse to pay .
Each new trading roadblock is likely to be beaten by institutions seeking better ways to serve their high-volume clients , here or overseas .
Legislating new trading inefficiencies will only make things harder on the least sophisticated investors .
So what is next for program trading ?
Left to its own devices , index arbitrage will become more and more efficient , making it harder and harder to do profitably .
Spreads will become so tight that it wo n't matter which market an investor chooses -- arbitrage will prevent him from gaining any temporary profit .
If government or private watchdogs insist , however , on introducing greater friction between the markets ( limits on price moves , two-tiered execution , higher margin requirements , taxation , etc. ) , the end loser will be the markets themselves .
Instead , we ought to be inviting more liquidity with cheaper ways to trade and transfer capital among all participants .
Mr. Allen 's Pittsburgh firm , Advanced Investment Management Inc. , executes program trades for institutions .
Some Democrats in Congress are warning that a complicated new funding device for the two federal antitrust agencies could result in further cutbacks in a regulatory area already reduced sharply in recent years .
The funding mechanism , which has received congressional approval and is expected to be signed by President Bush , would affect the antitrust operations of the Justice Department and the Federal Trade Commission .
As a part of overall efforts to reduce spending , Congress cut by $ 30 million the Bush administration 's request for antitrust enforcement for fiscal 1990 , which began Oct. 1 .
To offset the reduction , Congress approved a $ 20 , 000 fee that investors and companies will have to pay each time they make required filings to antitrust regulators about mergers , acquisitions and certain other transactions .
Some Democrats , led by Rep. Jack Brooks ( D. , Texas ) , unsuccessfully opposed the measure because they fear that the fees may not fully make up for the budget cuts .
But Justice Department and FTC officials said they expect the filing fees to make up for the budget reductions and possibly exceed them. '' It could operate to augment our budget , '' James Rill , the Justice Department 's antitrust chief , said in an interview .
Under measures approved by both houses of Congress , the administration 's request for $ 47 million for the Antitrust Division would be cut $ 15 million .
The FTC budget request of $ 70 million , about $ 34 million of which would go for antitrust enforcement , would also be cut by $ 15 million .
The administration had requested roughly the same amount for antitrust enforcement for fiscal 1990 as was appropriated in fiscal 1989 .
The offsetting fees would apply to filings made under the Hart-Scott-Rodino Act .
Under that law , parties proposing mergers or acquisitions valued at $ 15 million or more must notify FTC and Justice Department antitrust regulators before completing the transactions .
Currently , the government charges nothing for such filings .
Proponents of the funding arrangement predict that , based on recent filing levels of more than 2 , 000 a year , the fees will yield at least $ 40 million this fiscal year , or $ 10 million more than the budget cuts. '' When you do that , there is not a cut , but there is in fact a program increase of $ 5 million '' each for the FTC and the Justice Department , Rep. Neal Smith ( D. , Iowa ) said during House debate .
But Rep. Don Edwards ( D. , Calif. ) responded that a recession could stifle merger activity , reducing the amount of fees collected .
The antitrust staffs of both the FTC and Justice Department were cut more than 40 % in the Reagan administration , and enforcement of major merger cases fell off drastically during that period. '' Today is not the time to signal that Congress in any way sanctions the dismal state into which antitrust enforcement has fallen , '' Mr. Edwards argued .
Any money in excess of $ 40 million collected from the fees in fiscal 1990 would go to the Treasury at large .
Corporate lawyers said the new fees would n't inhibit many mergers or other transactions .
Though some lawyers reported that prospective acquirers were scrambling to make filings before the fees take effect , government officials said they had n't noticed any surge in filings .
FALL BALLOT ISSUES set a record for off-year elections .
Odd-year elections attract relatively few ballot issues .
But the 1989 fall total of 80 , while well below 1988 activity , shows '' a steady ratcheting up in citizen referenda and initiatives , '' says Patrick McGuigan , editor of Family , Law and Democracy Report .
He says the 10 citizen-sparked issues on state ballots this fall represent the most in any odd-year this decade .
Ballot questions range from a Maine initiative on banning Cruise missiles to a referendum on increasing the North Dakota income tax .
Ballot watchers say attention already is focused on the 1990 elections .
In California , two petition drives for next year 's election are '' essentially finished , '' says David Schmidt , author of '' Citizen Lawmakers. '' Mr. McGuigan cites three completed efforts in Oklahoma .
Hot ballot topics are expected to be abortion , the environment and insurance reform .
Taking a cue from California , more politicians will launch their campaigns by backing initiatives , says David Magleby of Brigham Young University .
PHOTOGRAPH COLLECTING gains new stature as prices rise .
Price records are being set at auctions this week .
At Christie 's , a folio of 21 prints from Alfred Stieglitz 's '' Equivalents '' series sold for $ 396 , 000 , a single-lot record .
Other works also have been exceeding price estimates .
In part , prices reflect development of a market structure based on such variables as the number of prints .
This information used to be poorly documented and largely anecdotal , says Beth Gates-Warren of Sotheby's. '' There is finally some sort of sense in the market , '' she says .
Corporations and museums are among the serious buyers , giving greater market stability , says Robert Persky of the Photograph Collector. '' When I see prints going into the hands of institutions , I know they are n't going to come back on the market. '' Most in demand : classic photographs by masters such as Stieglitz and Man Ray .
But much contemporary work is also fetching '' a great deal of money , '' says Miles Barth of the International Center of Photography .
DIALING 900 brings callers a growing number of services .
Currently a $ 300 million-a-year business , 900 telephone service is expected to hit $ 500 million next year and near $ 2 billion by 1992 as uses for the service continue to expand , says Joel Gross of Donaldson , Lufkin & Jenrette Inc .
The service -- which costs the caller from 30 cents to $ 25 a minute -- currently is dominated by celebrity chatter , horoscopes and romance lines .
But more serious applications are in the wings , and that is where the future growth is expected .
``I 'm starting to see more business transactions , '' says Andrea West of American Telephone & Telegraph Co. , noting growing interest in use of 900 service for stock sales , software tutorials and even service contracts .
Colleges , she says , are eyeing registration through 900 service .
Charities test the waters , but they face legal barriers to electronic fund raising. '' The thing that will really break this market right open is merchandising , '' Ms. West says .
Much of the 800 service will '' migrate to 900 , '' predicts Jack Lawless , general manager of US Sprint 's 900 product .
FAMILY PETS are improving recovery rates of patients at Columbia Hospital , Milwaukee .
Patients who receive canine or feline visitors are found to have lower blood pressure and improved appetite and be more receptive to therapy , says Mary Ann O'Loughlin , program coordinator .
TIRED OF TRIMMING ?
Hammacher Schlemmer & Co. offers a fiber-optic Christmas tree that eliminates the need to string lights .
The $ 6 , 500 tree is designed to send continuously changing colored light to dozens of fiber-end bunches .
MEDICINE TRANSPLANT : Growth of Japanese trade and travel prompts Beth Israel Medical Center , New York , to set up a bilingual medical practice .
Funded by a $ 1 million gift from Tokio Marine & Fire Insurance , the service will follow Japanese medical protocols , including emphasis on preventative medicine .
DIAPER SERVICES make a comeback amid growing environmental concerns .
Concerned about shrinking landfills and the safety of chemicals used in super-absorbent disposables , parents are returning to the cloth diaper .
Tiny Tots Inc. , Campbell , Calif. , says business is up 35 % in the past year. '' We 're gaining 1 , 200 new customers each week , '' says Jack Mogavero of General Health Care Corp. , Piscataway , N.J .
In Syracuse , N.Y. , DyDee Service 's new marketing push stresses environmental awareness .
Among its new customers : day-care centers that previously spurned the service .
The National Association of Diaper Services , Philadelphia , says that since January it has gotten more than 672 inquiries from people interested in starting diaper services .
Elisa Hollis launched a diaper service last year because State College , Pa. , where she lives , did n't have one .
Diaper shortages this summer limited growth at Stork Diaper Services , Springfield , Mass. , where business is up 25 % in
Also spurring the move to cloth : diaper covers with Velcro fasteners that eliminate the need for safety pins .
BRIEFS : Only 57.6 % of New Yorkers watch the local news , the lowest viewership in the country , says a new study by Impact Resources Inc. , Columbus , Ohio. . . . FreudToy , a pillow bearing the likeness of Sigmund Freud , is marketed as a $ 24.95 tool for do-it-yourself analysis .
Program trading is '' a racket , '' complains Edward Egnuss , a White Plains , N.Y. , investor and electronics sales executive , '' and it 's not to the benefit of the small investor , that 's for sure. '' But although he thinks that it is hurting him , he doubts it could be stopped .
Mr. Egnuss 's dislike of program trading is echoed by many small investors interviewed by Wall Street Journal reporters across the country .
But like Mr. Egnuss , few expect it to be halted entirely , and a surprising number doubt it should be .
``I think program trading is basically unfair to the individual investor , '' says Leo Fields , a Dallas investor .
He notes that program traders have a commission cost advantage because of the quantity of their trades , that they have a smaller margin requirement than individual investors do and that they often can figure out earlier where the market is heading .
But he blames program trading for only some of the market 's volatility .
He also considers the market overvalued and cites the troubles in junk bonds .
He adds : '' The market may be giving us another message , that a recession is looming . ''
Or , as Dorothy Arighi , an interior decorator in Arnold , Calif. , puts it : '' All kinds of funny things spook the market these days. '' But she believes that '' program trading creates deviant swings .
It 's not a sound thing ; there 's no inherent virtue in it. '' She adds that legislation curbing it would be '' a darned good idea . ''
At the Charles Schwab & Co. office in Atlanta 's Buckhead district , a group of investors voices skepticism that federal officials would curb program trading .
Citing the October 1987 crash , Glenn Miller says , '' It 's like the last crash -- they threatened , but no one did anything. '' A. Donald Anderson , a 59-year-old Los Angeles investor who says the stock market 's '' fluctuations and gyrations give me the heebie-jeebies , '' does n't see much point in outlawing program trading .
Those who still want to do it '' will just find some way to get around '' any attempt to curb it .
Similarly , Rick Wamre , a 31-year-old asset manager for a Dallas real-estate firm , would like to see program trading disappear because '' I ca n't see that it does anything for the market or the country. '' Yet he is n't in favor of new legislation. '' I think we 've got enough securities laws , '' he says. '' I 'd much rather see them dealing with interest rates and the deficit . ''
Peter Anthony , who runs an employment agency in New York , decries program trading as '' limiting the game to a few , '' but he also is n't sure it should be more strictly regulated. '' I do n't want to denounce it because denouncing it would be like denouncing capitalism , '' he explains .
And surprising numbers of small investors seem to be adapting to greater stock market volatility and say they can live with program trading .
Glenn Britta , a 25-year-old New York financial analyst who plays options for his personal account , says he is '' factoring '' the market 's volatility '' into investment decisions. '' He adds that program trading '' increases liquidity in the market .
You ca n't hold back technology. '' And the practice should n't be stopped , he says , because '' even big players are n't immune to the rigors of program trading . ''
Also in New York , Israel Silverman , an insurance-company lawyer , comments that program trading '' increases volatility , but I do n't think it should be banned .
There 's no culprit here .
The market is just becoming more efficient. '' Arbitraging on differences between spot and futures prices is an important part of many financial markets , he says .
He adds that his shares in a company savings plan are invested in a mutual fund , and volatility , on a given day , may hurt the fund .
But '' I 'm a long-term investor , '' he says. '' If you were a short-term investor , you might be more leery about program trading . ''
Jim Enzor of Atlanta defends program trading because he believes that it can bring the market back up after a plunge. '' If we have a real bad day , the program would say , `Buy , ' '' he explains. '' If you could get the rhythm of the program trading , you could take advantage of it . ''
What else can a small investor do ?
Scott Taccetta , a Chicago accountant , is going into money-market funds .
Mr. Taccetta says he had just recouped the $ 5 , 000 he lost in the 1987 crash when he lost more money last Oct. 13 .
Now , he plans to sell all his stocks by the first quarter of 1990 .
In October , before the market dropped , Mrs. Arighi of Arnold , Calif. , moved to sell the '' speculative stocks '' in her family trust '' so we will be able to withstand all this flim-flammery '' caused by program trading .
She believes that the only answer for individuals is to '' buy stocks that 'll weather any storm . ''
Lucille Gorman , an 84-year-old Chicago housewife , has become amazingly immune to stock-market jolts .
Mrs. Gorman took advantage of low prices after the 1987 crash to buy stocks and has hunted for other bargains since the Oct. 13 plunge .
``My stocks are all blue chips , '' she says. '' If the market goes down , I figure it 's paper profits I 'm losing .
On the other hand , if it goes way sky high , I always sell .
You do n't want to get yourself too upset about these things . ''
Young 's Market Co. , a wholesaler of spirits , wines and other goods , said it will merge with a new corporation formed by the Underwood family , which controls Young 's .
Under terms of the agreement , shareholders other than the Underwoods will receive $ 3 , 500 a share at closing , which is expected in December .
The Underwood family said that holders of more than a majority of the stock of the company have approved the transaction by written consent .
Researchers at American Telephone & Telegraph Co. 's Bell Laboratories reported they raised the electrical current-carrying capacity of new superconductor crystals by a factor of 100 , moving the materials closer to commercial use .
The scientists said they created small changes in the crystal-lattice structures of the superconductors to raise the amount of current that single crystals could carry to 600 , 000 amps per square centimeter in a moderately strong magnetic field .
The scientists said they made the advance with yttrium-containing superconductors cooled to liquid-nitrogen temperature , or minus 321 degrees Fahrenheit .
Their report appears in today 's issue of the journal Nature .
The finding marks a significant step in research on '' bulk '' superconductors , which are aimed at use in wires for motors , magnets , generators and other applications .
Scientists had obtained even higher current-carrying capacity in thin films of the new superconductors , but have had problems increasing the amount of current that bulk crystals could carry .
Superconductors conduct electricity without resistance when cooled .
A family of ceramic superconductors discovered during the past three years promise new technologies such as cheaper electrical generation -- but only if their current-carrying capacity can be raised .
The AT & T advance shows how one aspect of the current-carrying problem can be overcome .
But '' it wo n't lead to imminent use '' of new superconductors , cautioned Robert B. van Dover , one of the AT & T researchers .
He added that the current-carrying capacity of multi-crystal samples of superconductors remains too low for most practical uses because of so-called weak links between crystals .
Such multi-crystal materials will probably be needed for commercial applications .
Mr. van Dover said the AT & T team created the desired crystal changes by bombarding superconductor samples with neutrons , a process that creates some radioactivity in the samples and may not be feasible for large-scale commercial use .
Still , scientists breathed a collective sigh of relief about the finding , because it demonstrates how to overcome the '' flux pinning '' problem that earlier this year was widely publicized as undercutting new superconductors ' potential .
The problem involves the motion of small magnetic fields within superconductor crystals , limiting their current-carrying capacity .
Mr. van Dover said the crystal changes his team introduced apparently pins the magnetic fields in place , preventing them from lowering current-carrying capacity .
Mr. van Dover added that researchers are trying to determine precisely what crystal changes solved the problem .
Determining that may enable them to develop better ways to introduce the needed crystal-lattice patterns .
The AT & T team also is trying to combine their latest superconductor process with '' melt-textured growth , '' a process discovered earlier at Bell Laboratories .
The combined processes may significantly raise the current-carrying capacity of multi-crystal samples .
William C. Walbrecher Jr. , an executive at San Francisco-based 1st Nationwide Bank , was named president and chief executive officer of Citadel Holding Corp. and its principal operating unit , Fidelity Federal Bank .
The appointment takes effect Nov. 13 .
He succeeds James A. Taylor , who stepped down as chairman , president and chief executive in March for health reasons .
Edward L. Kane succeeded Mr. Taylor as chairman .
Separately , Citadel posted a third-quarter net loss of $ 2.3 million , or 68 cents a share , versus net income of $ 5.3 million , or $ 1.61 a share , a year earlier .
The latest results include some unusual write-downs , which had an after-tax impact of $ 4.9 million .
Those included costs associated with the potential Valley Federal Savings and Loan Association acquisition , which was terminated on Sept. 27 , 1989 .
In addition , operating results were hit by an increase in loan and real estate loss reserves .
In American Stock Exchange composite trading , Citadel shares closed yesterday at $ 45.75 , down 25 cents .
The following were among yesterday 's offerings and pricings in the U.S. and non-U.S. capital markets , with terms and syndicate manager , as compiled by Dow Jones Capital Markets Report :
International Business Machines Corp. -- $ 750 million of 8 3/8 % debentures due Nov. 1 , 2019 , priced at 99 to yield 8.467 % .
The 30-year non-callable issue was priced at a spread of 57 basis points above the Treasury 's 8 1/8 % bellwether long bond .
Rated triple-A by both Moody 's Investors Service Inc. and Standard & Poor 's Corp. , the issue will be sold through underwriters led by Salomon Brothers Inc .
The size of the issue was increased from an originally planned $ 500 million .
Detroit -- $ 130 million of general obligation distributable state aid bonds due 1991-2000 and 2009 , tentatively priced by a Chemical Securities Inc. group to yield from 6.20 % in 1991 to 7.272 % in 2009 .
There is $ 81.8 million of 7.20 % term bonds due 2009 priced at 99 1/4 to yield 7.272 % .
Serial bonds are priced to yield from 6.20 % in 1991 to 7 % in 2000 .
The bonds are insured and triple-A-rated .
Santa Ana Community Redevelopment Agency , Calif. -- $ 107 million of tax allocation bonds , 1989 Series A-D , due 1991-1999 , 2009 and 2019 , tentatively priced by a Donaldson Lufkin & Jenrette Securities Corp. group to yield from 6.40 % in 1991 to 7.458 % in 2019 .
The 7 3/8 % term bonds due 2009 are priced at 99 1/2 to yield 7.422 % , and 7 3/8 % term bonds due 2019 are priced at 99 to yield 7.458 % .
Serial bonds are priced at par to yield from 6.40 % in 1991 to 7.15 % in 1999 .
The bonds are rated single-A by S & P , according to the lead underwriter .
Maryland Community Development Administration , Department of Housing and Community Development -- $ 80.8 million of single-family program bonds , 1989 fourth and fifth series , tentatively priced by a Merrill Lynch Capital Markets group to yield from 6.25 % in 1992 for fourth series bonds to 7.74 % in 2029 for fifth series bonds .
There is $ 30.9 million of fourth series bonds , the interest on which is not subject to the federal alternative minimum tax .
They mature 1992-1999 , 2009 and 2017 .
Fourth series serial bonds are priced at par to yield from 6.25 % in 1992 to 7 % in 1999 .
The 7.40 % term bonds due 2009 are priced to yield 7.45 % , and 7.40 % term bonds due 2017 are priced to yield 7.50 % .
There is $ 49.9 million of fifth series bonds , which are subject to the federal alternative minimum tax .
They mature in 2005 , 2009 and 2029 .
Bonds due in 2005 have a 7 1/2 % coupon and are priced at par .
The 7 5/8 % bonds due 2009 are priced to yield 7.65 % , and 7 5/8 % bonds due 2029 are priced at 98 1/2 to yield 7.74 % .
The underwriters expect a double-A rating from Moody 's .
Heiwado Co. ( Japan ) -- $ 100 million of Eurobonds due Nov. 16 , 1993 , with equity-purchase warrants , indicating a 3 7/8 % coupon at par , via Daiwa Europe Ltd .
Each $ 5 , 000 bond carries one warrant , exercisable from Nov. 30 , 1989 , through Nov. 2 , 1993 , to buy shares at an expected premium of 2 1/2 % to the closing price when terms are fixed Tuesday .
Fees 2 1/4 .
Svenska Intecknings Garanti Aktiebolaget ( Sweden ) -- 20 billion yen of 6 % Eurobonds due Nov. 21 , 1994 , priced at 101 3/4 to yield 6.03 % less full fees , via Mitsui Finance International .
Guaranteed by Svenska Handelsbanken .
Fees 1 7/8 .
Takashima & Co. ( Japan ) -- 50 million Swiss francs of privately placed convertible notes due March 31 , 1994 , with a fixed 0.25 % coupon at par via Yamaichi Bank ( Switzerland ) .
Put option March 31 , 1992 , at a fixed 107 7/8 to yield 3.43 % .
Each 50 , 000 Swiss franc note is convertible from Nov. 30 , 1989 , to March 16 , 1994 at a 5 % premium over the closing share price Monday , when terms are scheduled to be fixed .
Fees 1 3/4 .
Mitsubishi Pencil Co. ( Japan ) -- 60 million Swiss francs of privately placed convertible notes due Dec. 31 , 1993 , with a fixed 0.25 % coupon at par via Union Bank of Switzerland .
Put option on Dec. 31 , 1991 , at a fixed 106 7/8 to yield 3.42 % .
Each 50 , 000 Swiss franc note is convertible from Dec. 5 , 1989 , to Dec. 31 , 1993 , at a 5 % premium over the closing share price Tuesday , when terms are scheduled to be fixed .
Fees 1 5/8 .
Koizumi Sangyo Corp. ( Japan ) -- 20 million Swiss francs of 6 1/2 % privately placed notes due Nov. 29 , 1996 , priced at 99 1/2 via Dai-Ichi Kangyo Bank ( Schweiz ) .
Guarantee by Dai-Ichi Kangyo Bank Ltd. Fees 1 3/4 .
Although his team lost the World Series , San Francisco Giants owner Bob Lurie hopes to have a new home for them .
He is an avid fan of a proposition on next week 's ballot to help build a replacement for Candlestick Park .
Small wonder , since he 's asking San Francisco taxpayers to sink up to $ 100 million into the new stadium .
As San Francisco digs out from The Pretty Big One , opponents say the last thing the city can afford is an expensive new stadium .
A stadium craze is sweeping the country .
It 's fueled by the increasing profitability of major-league teams .
Something like one-third of the nation 's 60 largest cities are thinking about new stadiums , ranging from Cleveland to San Antonio and St. Petersburg .
Most boosters claim the new sports complexes will be moneymakers for their city .
Pepperdine University economist Dean Baim scoffs at that .
He has looked at 14 baseball and football stadiums and found that only one -- private Dodger Stadium -- brought more money into a city than it took out .
Stadiums tend to redistribute existing wealth within a community , not create more of it .
Voters generally agree when they are given a chance to decide if they want to sink their own tax dollars into a new mega-stadium .
San Francisco voters rejected a new ballpark two years ago .
Last month , Phoenix voters turned thumbs down on a $ 100 million stadium bond and tax proposition .
Its backers fielded every important interest on their team -- a popular mayor , the Chamber of Commerce , the major media -- and spent $ 100 , 000 on promotion .
But voters decided that if the stadium was such a good idea someone would build it himself , and rejected it 59 % to 41 % .
In San Francisco , its backers concede the ballpark is at best running even in the polls .
George Christopher , the former San Francisco mayor who built Candlestick Park for the Giants in the 1960s , wo n't endorse the new ballpark .
He says he had Candlestick built because the Giants claimed they needed 10 , 000 parking spaces .
Since the new park will have only 1 , 500 spaces , Mr. Christopher thinks backers are playing some fiscal '' games '' of their own with the voters .
Stadium boosters claim that without public money they would never be built .
Miami Dolphins owner Joe Robbie disagrees , and he can prove it .
Several years ago he gave up trying to persuade Miami to improve its city-owned Orange Bowl , and instead built his own $ 100 million coliseum with private funds .
He did n't see why the taxpayers should help build something he would then use to turn a healthy profit. '' This stadium shows that anything government can do , we can do better , '' Mr. Robbie says .
But to Moon Landrieu , the former New Orleans mayor who helped build that city 's cavernous , money-losing Superdome , questions of who benefits or the bottom line are of little relevance. '' The Superdome is an exercise in optimism , a statement of faith , '' he has said. '' It is the very building of it that is important , not how much of it is used or its economics . ''
An Egyptian Pharaoh could n't have justified his pyramids any better .
But civilization has moved forward since then .
Today taxpayers get to vote , most of the time , on whether they want to finance the building schemes of our modern political pharaohs , or let private money erect these playgrounds for public passions .
Reed International PLC said that net income for the six months ended Oct. 1 slipped 5 % to # 89.7 million ( $ 141.9 million ) , or 16 pence a share , from # 94.8 million ( $ 149.9 million ) , or 17.3 pence a share .
The British paper , packaging and publishing concern , said profit from continuing lines fell 10 % to # 118 million from # 130.6 million .
While there were no one-time gains or losses in the latest period , there was a one-time gain of # 18 million in the 1988 period .
And while there was no profit this year from discontinued operations , last year they contributed # 34 million , before tax .
Pretax profit fell 3.7 % to # 128 million from # 133 million and was below analysts ' expectations of # 130 million to # 135 million , but shares rose 6 pence to 388 pence in early trading yesterday in London .
Reed is paying an interim dividend of 4.6 pence , up 15 % from 4 pence a year earlier .
Sales fell 20 % to # 722 million .
Earnings were hurt by disposal of operations in its restructuring , Reed said .
Wall Street 's big securities firms face the prospect of having their credit ratings lowered .
The reason : Risks from the firms ' new '' merchant banking '' activities are rising as revenue from the industry 's traditional business erodes .
The downgrading of debt issued by CS First Boston Inc. , parent of First Boston Corp. , by Moody 's Investors Service Inc. , coupled with a Moody 's announcement that Shearson Lehman Hutton Holdings Inc. is under review for a possible downgrade , sent shivers through the brokerage community this week .
With the shudders came the realization that some of Wall Street 's biggest players are struggling to maintain the stellar credit standing required to finance their activities profitably .
Securities firms are among the biggest issuers of commercial paper , or short-term corporate IOUs , which they sell to finance their daily operations .
The biggest firms still retain the highest ratings on their commercial paper .
But Moody 's warned that Shearson 's commercial paper rating could be lowered soon , a move that would reduce Shearson 's profit margins on its borrowings and signal trouble ahead for other firms .
Shearson is 62 % -owned by American Express Co .
``Just as the 1980s bull market transformed the U.S. securities business , so too will the more difficult environment of the 1990s , '' says Christopher T. Mahoney , a Moody 's vice president. '' A sweeping restructuring of the industry is possible. '' Standard & Poor 's Corp. says First Boston , Shearson and Drexel Burnham Lambert Inc. , in particular , are likely to have difficulty shoring up their credit standing in months ahead .
What worries credit-rating concerns the most is that Wall Street firms are taking long-term risks with their own capital via leveraged buy-out and junk bond financings .
That 's a departure from their traditional practice of transferring almost all financing risks to investors .
Whereas conventional securities financings are structured to be sold quickly , Wall Street 's new penchant for leveraged buy-outs and junk bonds is resulting in long-term lending commitments that stretch out for months or years .
``The recent disarray in the junk bond market suggests that brokers may become longer-term creditors than they anticipated and may face long delays '' in getting their money back , says Jeffrey Bowman , a vice president at S & P , which raised a warning flag for the industry in April when it downgraded CS First Boston .
``Wall Street is facing a Catch-22 situation , '' says Mr. Mahoney of Moody 's .
Merchant banking , where firms commit their own money , '' is getting riskier , and there 's less of it to go around. '' In addition , he says , the buy-out business is under pressure '' because of the junk bond collapse , '' meaning that returns are likely to decline as the volume of junk-bond financings shrinks .
In a leveraged buy-out , a small group of investors acquires a company in a transaction financed largely by borrowing , with the expectation that the debt will be paid with funds generated by the acquired company 's operations or sales of its assets .
In a recent report , Moody 's said it '' expects intense competition to occur through the rest of the century in the securities industry , which , combined with overcapacity , will create poor prospects for profitability. '' It said that the '' temptation for managements to ease this profit pressure by taking greater risks is an additional rating factor . ''
Both Moody 's and S & P cited First Boston 's reliance in recent years on merchant banking , which has been responsible for a significant portion of the closely held firm 's profit .
The recent cash squeeze at Campeau Corp. , First Boston 's most lucrative client of the decade , is proving costly to First Boston because it arranged more than $ 3 billion of high-yield , high-risk junk financings for Campeau units .
In addition , a big loan that First Boston made to Ohio Mattress Co. was n't repaid on time when its $ 450 million junk financing for a buy-out of the bedding company was withdrawn .
``These two exposures alone represent a very substantial portion of CS First Boston 's equity , '' Moody 's said. '' Total merchant banking exposures are in excess of the firm 's equity. '' CS First Boston , however , benefits from the backing of its largest shareholder , Credit Suisse , Switzerland 's third largest bank .
Shearson also has been an aggressive participant in the leveraged buy-out business .
But its earnings became a major disappointment as its traditional retail , or individual investor , business showed no signs of rebounding from the slump that followed the October 1987 stock market crash .
In addition , Shearson 's listed $ 2 billion of capital is overstated , according to the rating concerns , because it includes $ 1.7 billion of goodwill .
Shearson '' really only has $ 300 million of capital , '' says Mr. Bowman of S & P .
A Shearson spokesman said the firm is n't worried. '' A year ago , Moody 's also had Shearson under review for possible downgrade , '' he said. '' After two months of talks , our rating was maintained. '' Drexel , meanwhile , already competes at a disadvantage to its big Wall Street rivals because it has a slightly lower commercial paper rating .
The collapse of junk bond prices and the cancellation of many junk bond financings apparently have taken their toll on closely held Drexel , the leading underwriter in that market .
The firm also has been hit with big financial settlements with the government stemming from its guilty plea to six felonies related to a big insider-trading scandal .
Drexel this year eliminated its retail or individual customer business , cutting the firm 's workforce almost in half to just over 5 , 000 .
Recently , Drexel circulated a private financial statement among several securities firms showing that its earnings performance has diminished this year from previous years .
The firm 's capital , moreover , has n't grown at the same rate as in the past , officials at these firms say .
Drexel remains confident of its future creditworthiness. '' We 're well positioned with $ 1.7 billion of capital , '' a Drexel spokesman said. '' And as a leading investment and merchant banking firm , the fact that we are no longer subject to the uncertainties and vicissitudes of the retail business is a major plus in our view .
Moreover , we 've probably been the most aggressive firm on the Street in reducing costs , which are down around 40 % over the last six months . ''
Lewis C. Veraldi , the father of the team that created the highly successful Ford Taurus and Mercury Sable cars , retired early after experiencing recent heart problems .
Most recently , Mr. Veraldi , 59 years old , has been vice president of product and manufacturing engineering at Ford Motor Co .
But he is best known in the auto industry as the creator of a team car-development approach that produced the two midsized cars that were instrumental in helping the No. 2 auto maker record profits in recent years and in enabling the company 's Ford division to eclipse General Motors Corp. 's Chevrolet division as the top-selling nameplate in the U.S .
Under the so-called Team Taurus approach , Mr. Veraldi and other Ford product planners sought the involvement of parts suppliers , assembly-line workers , auto designers and financial staff members from the initial stages of the development cycle .
The concept 's goal was to eliminate bureaucracy and make Ford 's product development more responsive to consumer demands .
It was later applied to other new-car programs , including those that produced the Ford Thunderbird and Mercury Cougar .
Ford Chairman Donald E. Petersen said yesterday that Mr. Veraldi has '' helped to change the world 's perception of American-made cars. '' Mr. Veraldi worked at Ford for 40 years , holding a variety of car and parts-engineering positions .
The limits to legal absurdity stretched another notch this week when the Supreme Court refused to hear an appeal from a case that says corporate defendants must pay damages even after proving that they could not possibly have caused the harm .
We can understand and share the compassion that makes judges sometimes wish to offer a kind of Solomonic aid to those who 've been hurt .
But this case is a stark lesson in how the failures of the traditional policy-making process have left the courts as the only forum this country has to debate risk , technology and innovation .
Too often now , a single court decision becomes the precedent for other , less compelling cases .
From the 1940s until 1971 , some two million women took the synthetic hormone diethylstilbestrol ( DES ) to prevent miscarriages and morning sickness .
The drug was approved by the Food and Drug Administration and marketed by some 300 pharmaceutical companies , often under generic labels .
In the 1970s , scientists reported cancer cases among the daughters of DES users .
The cases quickly went to court , but the mothers of several thousand DES plaintiffs could n't recall whose brand they used .
Beginning in 1980 , courts in several states including California and New York decided to suspend the common-law rule that plaintiffs must prove that the defendants are the ones who are liable .
Courts made the assumption that all DES pills were essentially the same , and created a market-share test so that damages would be assessed against drug makers in the proportion of their share of the original sales .
This has some logic .
Drug makers should n't be able to duck liability because people could n't identify precisely which identical drug was used .
But courts quickly tumbled down a slippery slope .
Just as all plaintiffs are not alike , it turns out that DES defendants marketed the drugs differently and may have offered different warranties .
The ultimate result came in Hymowitz v .
Lilly , where the highest New York court expanded the market-share approach for the first time to say that drug makers that could prove Mindy Hymowitz 's mother did n't use their pill must still pay their share of any damages .
But as Duke University law professor William Van Alstyne notes , by this reasoning a defendant could be held liable in New York for a bad apple even if he sold all his apples in California .
Despite the Supreme Court 's refusal to hear the case , there are serious constitutional issues of due process and uncompensated takings from the defendants .
The big problem , however , is that there 's no guarantee that this reasoning will be limited to DES or to drugs .
The problem here goes well beyond twisting legal doctrine .
The California Supreme Court last year reversed direction to make it much harder to win DES cases because the justices saw how all the pharmaceutical litigation has chilled the introduction of new drugs .
The court rejected strict liability for prescription drugs , citing the huge , hidden social costs. '' Public policy favors the development and marketing of beneficial new drugs , even though some risks , perhaps serious ones , might accompany their introduction because drugs can save lives and reduce pain and suffering , '' the unanimous court said .
The California justices noted that the fear of litigation already forced the only remaining anti-morning-sickness drug , Bendectin , off the U.S. market .
This raises the key issue : What to do about people who suffer serious injuries from beneficial drugs ?
We now know that holding drug makers liable where there 's no evidence that they or anyone else knew of any risks only means the drugs wo n't be available to anyone .
As liability expert Peter Huber tells us , after the Hymowitz case , if any drug maker introduces an anti-miscarriage drug '' it 's time to sell that company 's stock short. '' We also know that the tort system is a lousy way to compensate victims anyway ; some win the legal lottery , others get much less and contingency-fee lawyers take a big cut either way .
DES daughters and other victims of drugs would be better off if their cases were taken out of the courts .
Congress could create a compensation program to help such victims while protecting the national interest in encouraging new drugs .
But a 1986 law that supposedly replaced lawsuits over children 's vaccines with a compensation fund has predictably led to even more litigation .
Everyone by now understands that Congress is utterly incapable of writing legislation to help deserving people without its becoming some billion-dollar morass .
We have no doubt this is one reason judges in New York and justices on the Supreme Court are willing to trash the law in the DES cases .
They must figure that justice has to get done by somebody , but know it wo n't be done by Congress .
Odyssey Partners Limited Partnership , an investment firm , completed the purchase of May Department Stores Co. 's Caldor discount chain for $ 500 million plus the assumption of $ 52 million in debt .
Caldor , based in Norwalk , Conn. , operates 118 stores in the Northeast ; it reported revenue of $ 1.6 billion last year .
May Stores , St. Louis , runs such well-known department stores as Lord & Taylor .
N.V. DSM said net income in the third quarter jumped 63 % as the company had substantially lower extraordinary charges to account for a restructuring program .
The Dutch chemical group said net income gained to 235 million guilders ( $ 113.2 million ) , or 6.70 guilders a share , from 144 million guilders , or 4.10 guilders a share , a year ago .
The 32 % state-owned DSM had eight million guilders of extraordinary charges in the latest quarter , mainly to reflect one-time losses in connection with the disposal of some operations .
The charges were offset in part by a gain from the sale of the company 's construction division .
Last year , DSM had 71 million guilders of extraordinary charges for the restructuring program and other transactions .
The earnings growth also was fueled by the company 's ability to cut net financing spending by half to around 15 million guilders .
Also , substantially lower Dutch corporate tax rates helped the company keep its tax outlay flat relative to earnings growth , the company added .
Sales , however , were little changed at 2.46 billion guilders , compared with 2.42 billion guilders .
Allergan Inc. said it received Food and Drug Administration approval to sell the PhacoFlex intraocular lens , the first foldable silicone lens available for cataract surgery .
The len 's foldability enables it to be inserted in smaller incisions than are now possible for cataract surgery , the eye care and skin care concern said .
Cataracts refer to a clouding of the eye 's natural lens .
Allergan was spun off in July from SmithKline Beckman Corp. as part of the merger of SmithKline and Beecham Group
A man from the Bush administration came before the House Agriculture Committee yesterday to talk about the U.S. 's intention to send some $ 100 million in food aid to Poland , with more to come from the EC .
The committee 's members are worried what all this free food might do to the economic prospects of Poland 's own farmers .
Rep. Gary Ackerman noted that past food aid had harmed farmers in El Salvador and Egypt .
However well intentioned , food transfers have the habit of growing larger and wrecking the market incentives for the recipient country 's own farmers .
The First World has for some time had the bad habit of smothering other people 's economies with this kind of unfocused kindness .
It should be constantly stressed that Poland 's farmers mostly need a real market for their products .
Elco Industries Inc. said it expects net income in the year ending June 30 , 1990 , to fall below a recent analyst 's estimate of $ 1.65 a share .
The Rockford , Ill. , maker of fasteners also said it expects to post sales in the current fiscal year that are '' slightly above '' fiscal 1989 sales of $ 155 million .
The company said its industrial unit continues to face margin pressures and lower demand .
In fiscal 1989 , Elco earned $ 7.8 million , or $ 1.65 a share .
The company 's stock fell $ 1.125 to $ 13.625 in over-the-counter trading yesterday .
Oshkosh Truck Corp. , Oshkosh , Wis. , estimated earnings for its fourth quarter ended Sept. 30 fell 50 % to 75 % below the year-earlier $ 4.5 million , or 51 cents a share .
The truck maker said the significant drop in net income will result in lower earnings for the fiscal year .
In fiscal 1988 , the company earned $ 17.3 million , or $ 1.92 a share , on revenue of $ 352.9 million .
Oshkosh Truck attributed the downturn in its earnings to higher start-up costs of its new chassis division , a softer motor-home market and higher administrative costs of compliance with government contractor regulations .
The company said it is in the process of phasing out John Deere , its current source of production for midsized motor home chassis .
In anticipation of the start-up of its new factory , the company said a larger-than-normal chassis supply has been built to carry it through the transition period .
Tokyo stocks edged up Wednesday in relatively active but unfocused trading .
London shares finished moderately higher .
At Tokyo , the Nikkei index of 225 selected issues , which gained 132 points Tuesday , added 14.99 points to 35564.43 .
In early trading in Tokyo Thursday , the Nikkei index fell 63.79 points to 35500.64 .
Wednesday 's volume on the First Section was estimated at 900 million shares , in line with Tuesday 's 909 million .
Declining issues slightly outnumbered advancing issues , 454 to 451 .
Investors switched trading focus quickly as they did Tuesday , reflecting uncertainty about long-term commitments to any issue or sector , traders said .
Speculation , on the other hand , sparked buying in certain incentive-backed issues , though rumors underlying such shares eventually proved untrue .
The development , traders said , showed that there is more than ample liquidity available for investment despite the market 's recent directionless trend .
Dealers led the market Wednesday by actively trading for their own accounts , observers said .
Institutions mostly remained on the sidelines because of uncertainty regarding interest rates and the dollar .
The Tokyo Stock Price Index ( Topix ) of all issues listed in the First Section , which gained 16.05 points Tuesday , was down 1.46 points , or 0.05 % , at 2691.19 .
The Second Section index , which added 6.84 points Tuesday , was up 5.92 points , or 0.16 % , to close at 3648.82 .
Volume in the second section was estimated at 18 million shares , up from 14 million Tuesday .
Akio Yamamoto , managing director of Nomura Investment Trust Management , said that if the U.S. federal funds rate declines to around 8.5 % , institutions would acquire a clearer idea regarding the direction of the market and thus more comfortably participate in active buying .
Tokyu Group , Mitsubishi Estate and Bridgestone/Firestone , which advanced Tuesday , declined on profit-taking .
Wednesday 's dominant issue was Yasuda Fire & Marine Insurance , which continued to surge on rumors of speculative buying .
It ended the day up 80 yen ( 56 cents ) to 1 , 880 yen ( $ 13.15 ) .
Due to continuingly high gold prices tied to uncertainty about the U.S. currency , investor interest was directed toward oil and mining shares , which traders called a '' defensive '' action frequently taken when the dollar is expected to fall or during times of inflation .
Teikoku Oil , also stimulated by rumors of speculative buying , advanced 100 yen to 1 , 460 .
Showa Shell gained 20 to 1 , 570 and Mitsubishi Oil rose 50 to 1 , 500 .
Sumitomo Metal Mining fell five yen to 692 and Nippon Mining added 15 to 960 .
Among other winners Wednesday was Nippon Shokubai , which was up 80 at 2 , 410 .
Marubeni advanced 11 to 890 .
London share prices were bolstered largely by continued gains on Wall Street and technical factors affecting demand for London 's blue-chip stocks .
The Financial Times-Stock Exchange 100-share index closed 17.5 points higher at 2160.1 .
It rose largely throughout the session after posting an intraday low of 2141.7 in the first 40 minutes of trading .
The index ended the day near its session high of 2163.2 , which was posted within the last half-hour of trading .
Dealers said most investor interest was focused on defensive blue-chip stocks , particularly those with limited U.K. exposure .
Also , several key blue chips were pushed higher in thin volume because of a technical squeeze among market makers .
Sterling 's firm tone , combined with a steady opening on Wall Street , also tempted some investors to come back to the market , dealers said .
There were concerns early in the day that Wall Street 's sharp gains on Tuesday were overdone and due for a reversal .
The FT 30-share index settled 16.7 points higher at 1738.1 .
Volume was 372.9 million shares , up from 334.5 million on Tuesday .
Dealers said institutions were still largely hugging the sidelines on fears that the market 's recent technical rally might prove fragile .
They cited Wall Street 's recent volatility and the lack of a clear indication over the market 's short-term direction as factors in the institutional caution .
Jaguar , a U.K. luxury auto maker being pursued by Ford Motor and General Motors , gained 10 pence ( 16 cents ) a share to close at 879 pence ( $ 13.90 ) .
It shed about 7 pence , however , after dealers said the market was disappointed that Ford did n't move to tender a bid for control of the company .
Dealers said the U.K. government 's decision Tuesday to waive its protective '' golden share '' in the auto maker raised prospects of a bidding war between the two U.S. auto giants .
But the waiver also was seen as a signal that Ford , a major U.K. auto industry employer , was able to gain government acceptance of its bid for control of Jaguar .
Dealers said that interpretation sparked expectations of an imminent bid by Ford .
B.A.T Industries , which is being pursued by Sir James Goldsmith 's Hoylake Investments , rose 9 to 753 on speculation that Hoylake will sweeten its bid , dealers said .
Like Jaguar , B.A.T also eased off its highs in afternoon dealings .
Reed International , a U.K. publishing group , gained 15 to 397 despite reporting a 3.7 % drop in interim pretax profit .
Analysts said the fall in pretax profit was due to the group 's recent restructuring and sale of peripheral units , and that its remaining businesses are performing well .
Dealers said the market agreed .
Stocks boosted by market-makers shopping to cover book requirements in FT-SE 100 shares included Carlton Communications , which climbed 32 to 778 .
Drug companies in the key index also notched gains as market-makers searched for stock in anticipation of demand due to the sector 's defensive qualities .
Wellcome gained 18 to 666 on a modest 1.1 million shares .
Glaxo , the U.K. 's largest pharmaceutical concern , advanced 23 to # 14.13 .
Stock prices closed higher in Stockholm , Amsterdam and Frankfurt and lower in Zurich .
Paris , Brussels , and Milan were closed for a holiday .
South African gold stocks closed marginally lower .
Elsewhere , share prices closed higher in Singapore , Taipei and Wellington , were mixed in Hong Kong , lower in Seoul and little changed in Sydney .
Manila markets were closed for a holiday .
Here are price trends on the world 's major stock markets , as calculated by Morgan Stanley Capital International Perspective , Geneva .
To make them directly comparable , each index is based on the close of 1969 equaling 100 .
The percentage change is since year-end .
The following issues were recently filed with the Securities and Exchange Commission :
Intermec Corp. , offering of 1 , 050 , 000 common shares , via Goldman , Sachs & Co. and Piper , Jaffray & Hopwood Inc .
Middlesex Water Co. , offering of 150 , 000 shares of common stock , via Legg Mason Wood Walker Inc. and Howard , Weil , Labouisse , Friedrichs Inc .
Midwesco Filter Resources Inc. , initial offering of 830 , 000 common shares , to be offered by the company , via Chicago Corp .
Nylev Municipal Fund Inc. , offering of five million common shares .
Occidental Petroleum Corp. , shelf offering of $ 1.5 billion in senior debt securities .
Prime Motor Inns Inc. , offering of up to $ 300 million zero coupon convertible debentures , via Drexel Burnham Lambert Inc. and Montgomery Securities .
Service Fracturing Co. , proposed offering of 1.2 million shares of common stock , via Lovett Mitchell Webb & Garrison , Inc. , and Blunt Ellis & Loewi Inc .
Western Gas Resources Inc. , initial offering of 3 , 250 , 000 shares of common stock , of which 3 , 040 , 000 shares will be sold by the company and 210 , 000 shares by a holder , via Prudential-Bache Capital Funding , Smith Barney , Harris Upham & Co. , and Hanifen , Imhoff Inc .
Hold the Putty !
With lipsticks , liners , lotions
and creams ,
There are still beauty plans
left to tackle :
But as the years go by , it
seems
That before I paint , I should
spackle .
-- Pat D'Amico .
Criminal charges were filed against Diceon Electronics Inc. and two company officials alleging waste disposal violations in its Chatsworth , Calif. , facility .
The Los Angeles County district attorney 's office filed seven felony and five misdemeanor counts charging that late last year and early this year the Irvine , Calif.-based circuit-board manufacturer illegally disposed of acid , caustic and heavy metals into the sewer system , and stored hazardous materials in leaky , unlabeled or open-top containers .
Named as defendants were Roland Matthews , president , and Peter Jonas , executive vice president and chief financial officer , as well as a former plant manager .
The company said local authorities held hearings on the allegations last spring and had returned the plant to '' routine inspection '' in August. '' The company does not feel that it or any of the individuals violated any criminal statute and the company expects full vindication in court. '' Arraignments are scheduled for Nov. 14 .
Consumer confidence stayed strong in October , despite the unsettling gyrations of the stock market .
``The sharp stock market decline in late October appears to have had little or no effect on consumers , '' said Fabian Linden , executive director of the Conference Board 's consumer research center. '' Survey returns received after the drop in the Dow Jones average were about the same as the views expressed prior to that event . ''
The nonprofit , industry-supported group said its Consumer Confidence Index was 116.4 in October , barely changed from a revised 116.3 in September .
The index was 116.9 in October 1988 and in the past year has ranged from a low of 112.9 to a high of 120.7 .
It uses a base of 100 in 1985 .
In October , more people said that present business conditions were '' good '' than in September .
An equal number in each month said that employment conditions were good .
And 19.6 % of consumers contacted believed business conditions will improve in the coming six months , compared with 18.3 % in September .
Also , more people said conditions will worsen in the period. ( Fewer said conditions wo n't change. ) In October 1988 , 21.1 % said business conditions would improve .
In October 1989 , 16.9 % said more jobs will be created in the coming six months , compared with 17.4 % in September and 18.6 % in October 1988 .
Only 26.8 % in October , compared with 28.5 % in September and 26.8 % in October 1988 , said income would increase .
``The sustained level of confidence can be attributed to the continued favorable circumstances which affect the consumer 's day-to-day economic life , '' said Mr. Linden. '' Unemployment continues at a relatively low level , providing a sense of job security , and a low inflation rate has kept the purchasing power of the weekly paycheck reasonably strong . ''
The consumer confidence survey , covering 5 , 000 U.S. households , is conducted in the first two weeks of each month for the Conference Board by National Family Opinion Inc. , a Toledo , Ohio , market researcher .
Buying plans were mixed in October , with fewer households indicating plans to buy cars and more saying they will buy homes and appliances in the coming six months .
In October , 6.7 % of respondents said they will buy a car , easing from September when 8.1 % anticipated a purchase .
In October 1988 , 7.3 % said they would buy a car .
Home purchase plans increased to 3.3 % from 3.1 % in the two recent months .
In October 1988 , 3.7 % said they would buy a house .
In 1989 , home purchase plans have ranged monthly from 2.9 % to 3.7 % of respondents .
In October , 30.6 % said they will buy appliances in the coming six months , compared with 27.4 % in September and 26.5 % in October 1988 .
Despite a deluge of economic news , the Treasury market remained quiet but the corporate market was abuzz over International Business Machines Corp. 's huge debt offering .
``There were so many economic reports but the market did n't care about any of them , '' said Kathleen Camilli , a money market economist at Drexel Burnham Lambert Inc. '' So the focus turned to other fixed-income markets , corporate and mortgages in particular , '' she said .
IBM , the giant computer maker , offered $ 750 million of non-callable 30-year debentures priced to yield 8.47 % , or about 1/2 percentage point higher than the yield on 30-year Treasury bonds .
The size of IBM 's issue was increased from an originally planned $ 500 million as money managers and investors scrambled to buy the bonds .
In the investment-grade corporate market , '' it 's rare that you get an opportunity to buy a name that has such broad appeal and has such attractive call features , '' said James Ednie , a Drexel industrial bond trader .
Money managers ranked IBM 's offering as the most significant investment-grade sale of the year because large issues of long-term debt by companies with triple-A credit are infrequent .
Syndicate officials at lead underwriter Salomon Brothers Inc. said the debentures were snapped by up pension funds , banks , insurance companies and other institutional investors .
In the Treasury market , investors paid scant attention to the day 's economic reports , which for the most part provided a mixed view of the economy .
``Whether you thought the economy was growing weak or holding steady , Õyesterday'så economic indicators did n't change your opinion , '' said Charles Lieberman , a managing director at Manufacturers Hanover Securities Corp .
The government reported that orders for manufactured goods were essentially unchanged in September while construction spending was slightly lower .
Both indicators were viewed as signs that the nation 's industrial sector is growing very slowly , if at all .
A survey by the Federal Reserve 's 12 district banks and the latest report by the National Association of Purchasing Management blurred that picture of the economy .
In a monthly report prepared for use at the Fed 's next Federal Open Market Committee meeting on Nov. 14. , the nation 's central bank found that price increases have moderated and economic activity has grown at a sluggish pace in recent weeks .
Among other things , the survey found that manufacturing activity varied considerably across districts and among industries .
The Philadelphia and Cleveland districts , for example , reported declines in manufacturing activity while the Boston , Dallas and San Francisco banks noted that business expanded .
The purchasing managers index of economic activity rose in October , although it remains below 50 % .
A reading below 50 % indicates that the manufacturing sector is slowing while a reading above 50 % suggests that the industry is expanding .
Mr. Lieberman said the diverse showing in yesterday 's reports '' only enhances the importance of the employment data. '' The employment report , which at times has caused wide swings in bond prices , is due out tomorrow .
The average estimate of 22 economists polled by Dow Jones Capital Markets Report was that non-farm payrolls expanded by 152 , 000 in October .
The economists forecast a 0.1 % rise in the unemployment rate to 5.4 % .
Treasury Securities
In a surprise announcement , the Treasury said it will reopen the outstanding benchmark 30-year bond rather than create a new one for next week 's quarterly refunding of the federal debt .
The Treasury will raise $ 10 billion in fresh cash by selling $ 30 billion of securities , including $ 10 billion of new three-year notes and $ 10 billion of new 10-year notes .
But rather than sell new 30-year bonds , the Treasury will issue $ 10 billion of 29year , nine-month bonds -- essentially increasing the size of the current benchmark 30-year bond that was sold at the previous refunding in August .
Credit market analysts said the decision to reopen the current benchmark , the 8 1/8 % bond due August 2019 , is unusual because the issue trades at a premium to its face amount .
Some dealers said the Treasury 's intent is to help government bond dealers gauge investor demand for the securities , given uncertainties about when the auction will occur .
The Treasury said the refunding is contingent upon congressional and presidential passage of an increase in the federal debt ceiling .
Until such action takes places , the Treasury has no ability to issue new debt of any kind .
Meanwhile , Treasury bonds ended modestly higher in quiet trading .
The benchmark 30-year bond about 1/4 point , or $ 2.50 for each $ 1 , 000 face amount .
The benchmark was priced at 102 22/32 to yield 7.88 % compared with 102 12/32 to yield 7.90 % Tuesday .
The latest 10-year notes were quoted at 100 22/32 to yield 7.88 % compared with 100 16/32 to yield 7.90 % .
The discount rate on three-month Treasury bills was essentially unchanged at 7.79 % , while the rate on six-month bills was slightly lower at 7.52 % compared with 7.60 % Tuesday .
Corporate Issues
IBM 's $ 750 million debenture offering dominated activity in the corporate debt market .
Meanwhile , most investment-grade bonds ended unchanged to as much as 1/8 point higher .
In its latest compilation of performance statistics , Moody 's Investors Service found that investment-grade bonds posted a total return of 2.7 % in October while junk bonds showed a negative return of 1.5 % .
Moody 's said those returns compare with a 3.8 % total return for longer-term Treasury notes and bonds .
Total return measures price changes and interest income .
For the year to date , Moody 's said total returns were topped by the 16.5 % of longer-term Treasury issues , closely followed by 15 % for investment-grade bonds .
Junk bonds trailed the group again. '' Even the 7.2 % return from the risk-free three-month Treasury bill has easily outdistanced the 4.1 % return from junk bonds , '' wrote Moody 's economist John Lonski in yesterday 's market report. '' Little wonder that buyers for junk have been found wanting , '' he said .
Moody 's said the average net asset value of 24 junk-bond mutual funds fell by 4.2 % in October .
Mortgage-Backed Issues
Mortgage securities ended slightly higher but trailed gains in the Treasury market .
Ginnie Mae 's 9 % issue for November delivery finished at 98 5/8 , up 2/32 , and its 9 1/2 % issue at 100 22/32 , also up 2/32 .
The Ginnie Mae 9 % securities were yielding 9.32 % to a 12-year average life .
Activity was light in derivative markets , with no new issues priced .
Municipal Issues
Municipal bonds were mostly unchanged to up 1/8 point in light , cautious trading prior to tomorrow 's unemployment report .
A $ 114 million issue of health facility revenue bonds from the California Health Facilities Financing Authority was temporarily withdrawn after being tentatively priced by a First Boston Corp. group .
An official for the lead underwriter declined to comment on the reason for the delay , but market participants speculated that a number of factors , including a lack of investor interest , were responsible .
The issue could be relaunched , possibly in a restructured form , as early as next week , according to the lead underwriter .
A $ 107.03 million offering of Santa Ana Community Redevelopment Agency , Calif. , tax allocation bonds got off to a slow start and may be repriced at lower levels today , according to an official with lead underwriter Donaldson Lufkin & Jenrette Securities Corp .
The Santa Ana bonds were tentatively priced to yield from 6.40 % in 1991 to 7.458 % in
Bucking the market trend , an issue of $ 130 million general obli