charles t. russell used to play trombone in pittsburgh burlesque houses and with big bands in the southeast . he gave it up for banking , but he still knows how to attract a crowd . mr. russell , the president of visa international , a bank - owned credit - card association , recently urged members to consider halting sales of american express co. services in retaliation for the financial - service giant's recent decision to begin offering a new cut - rate credit card . consumer groups denounced the plea as an illegal restraint of trade , and congress is considering an inquiry . but mr. russell is resolute . " banks need to realize that there is a fox in the henhouse , " he declares . visa and the - year - old mr. russell , who enjoys riding a harley - davidson motorcycle , have collided with consumers and congress before . critics have long alleged that visa member banks and other card issuers inflate interest rates . as in past years , congress is currently considering imposing rate ceilings , and some consumer groups think such a law would be an appropriate response to mr. russell's recent harangue . " he is more vociferous , but his statements probably reflect the general thought of the leading card issuers , " says pete hart , a first interstate bancorp executive vice president . forewarned , first interstate , which offers american express gold cards and travelers checks , is " reevaluating our relationship " with american express , according to mr. hart . nothing rash is planned , he says , but the new card -- optima -- is " without question an intrusion into our business . " american express and the banks are used to being allies rather than adversaries . american express cards generally don't offer revolving credit , and banks have marketed them alongside their visa and mastercard cards , which do . but optima will compete head - on . the card will cost a year , in addition to the that american express charges for its regular card . but it will extend credit . the average visa card also carries a annual fee , but it has a stiffer rate , and several big banks charge even more . american express says only a limited number of existing customers will be offered the new card . it doesn't expect to issue many more than two million of them by , compared with about million current visa card holders . " we are not basically in the credit business , " says an american express spokesman . " we're going after a select market . " but the elite group that american express is targeting has been a major source of bank credit card earnings . banks also believe that the american express estimates are too modest , and some fear a plastic rate war . " they aren't going to fail , " says mr. russell . " i don't admire their ethics , but i certainly respect their knowledge . " he thinks american express is misleading consumers , arguing that the optima rate is closer to when the tie - in with the regular card is considered . the flap comes at a time when visa and its members have few other reasons to complain . there are more visa card holders world - wide than there were two years ago . the group , which furnishes members with new products , system support and other services , is developing computerized cards and new links with automated teller machines . for the banks , credit cards have been a growing source of profits , although tax changes and a growing consumer debt load portend possibly slower future growth . two years ago , he led the opposition against a merger proposal from rival mastercard , an idea that some bank issuers of both cards thought would cut costs for them and consumers . mr. russell says that the benefits were overrated and that a merger raises possible antitrust problems . instead , he has backed joint efforts , but some question his interest in cooperating . visa and mastercard have been studying a national network to process retail store debit card transactions . last fall , however , visa agreed to manage a large similar operation in california , and some mastercard officials worried that the joint venture had been doomed . mr. russell denies this . his comments about american express also have some precedent . last summer , as part of a campaign to blunt another budding competitor , visa encouraged members to refuse to honor sears , roebuck & co.'s discover card in their automated teller machines . along the way , critics believe consumers have been cheated . card rates haven't fallen nearly as sharply as other interest rates since . current rates also reflect a jump in write - offs of bad credit card loans , which some banks have brought upon themselves through aggressive marketing . he also says critics ignore administrative costs in their rate attacks . the steeper write - offs , he contends , stem more from " lax " bankruptcy laws and heavy unemployment in the major oil - producing states than indiscriminate card marketing . while mr. russell faces possible congressional and justice department investigations into his american express comments , he says visa welcomes the attention . " we've nothing to hide , never had , " adds the executive , who joined visa in . like scores of musicians , he put down his horn when television arrived in the s . while hunting for a music - store job one day in , a rainstorm forced him to take cover at a branch of what is now pnc financial corp . the bank hired him as a collector in its installment loan department . he married a former pittsburgh radio singer who he used to back up in the band . weather permitting , mr. russell commutes every day from his novato , calif. , home in his single - engine airplane . the - minute flight helps him forget his troubles . " you can't think about anything else when you're flying , " he says . " when i fly home , i don't have a problem anymore . " a soviet official said the u.s. is attempting to scuttle an arms pact . kremlin arms - control official viktor karpov said u.s. demands over short - range nuclear missiles and concern over moscow's conventional forces may be aimed at blocking a u.s. - soviet agreement on the elimination of medium - range weapons from europe . karpov said a u.s. proposal made at the geneva arms talks included a plan to convert u.s. midrange weapons into shorter - range arms rather than destroy them . white house chief of staff baker said in an abc - tv interview that " it would be likely " that gorbachev and reagan will hold another summit . aquino ordered the philippine military to crush the opposition . speaking from a bomb - damaged grandstand at the philippines military academy , aquino said her peace policy had failed and she directed the armed forces to " end all threats to freedom " by the country's communist rebels and rightist plotters . at least people have been killed since a - day truce with the communist insurgents ended feb. , including four people in last week's bomb explosion at the academy . concern mounted over the cost of a prescription drug for aids . the fda gave approval friday to burroughs - wellcome co. to market the drug , azt , for the treatment of aids and its related pneumonia . the drug's price -- a year wholesale and retail -- has alarmed physicians and consumer advocates , and unanswered questions about insurance and other coverage have prompted some to say the drug is beyond the reach of many aids patients . in a six - month controlled trial last year , azidothymidine prolonged survival for aids patients . the drug's major side effects include severe anemia . howard baker said that he didn't expect any " new , devastating development " in the iran - contra affair , and that he was convinced reagan " is telling the truth " about his knowledge of the initiative . meanwhile , contra leader alfonso robelo said north arranged for two nicaraguan exile groups to receive about in private funds . a pentagon official denied that a planned military exercise in central america in may was timed to coincide with what u.s. officials have called a spring offensive by anti - government rebels in nicaragua . weinberger warned tehran that despite iran's installation of new missile batteries along the persian gulf , the u.s. was prepared to use force to keep the waterway open . the defense secretary , in an nbc - tv interview , said the pentagon was assessing whether more ships should be sent to join a navy battle group in the region . iraqi president hussein said baghdad had foiled iran's pledge of a decisive victory in the persian gulf war , but that iraqi casualty figures during the past year were high . he said a peace treaty is the only way to end the six - year - old conflict . italian authorities expressed concern about a new wave of internationally coordinated guerrilla attacks following friday's murder of an air force general in rome . the interior ministry said police had uncovered italian links to terrorist groups in france and west germany , and that the assassination may have been ordered from abroad . former president carter met twice with syrian president assad , a day after he urged officials in damascus to use their influence to help free eight americans held hostage in lebanon . anglican archbishop tutu said he had urged black anti - apartheid leaders to halt their armed struggle against south africa . tutu , who spent the weekend in zambia for talks with oliver tambo and other leaders of the african national congress , held out little hope of a cease - fire . pretoria has refused to hold talks with the anc . congress cleared a five - year , billion highway bill and sent it to the white house , where reagan has vowed to veto it as too costly . the senate voted friday to allow states to raise the speed limit to mph from mph on most rural interstate highways . nasa officials are expected to approve a launch - pad test firing of the space shuttle discovery's main engines before it is cleared for blastoff next february , space agency sources said . the test would delay the shuttle flight by at least a month . yugoslavia's prime minister said the belgrade government would use " all means " available , including the army , to defend the country's political system . chad's government said its troops captured libya's air base of ouadi doum in northern chad . western intelligence sources said the air base was libya's most important military installation in chad . died : robert preston , , actor , saturday , in santa barbara , calif. , of cancer . genex corp. said it recruited gary e. frashier as president and chief executive officer in an effort to " improve the image " of the struggling biotechnology concern . mr. frashier , years old , has been chairman and chief executive officer of continental water systems corp. , a san antonio , texas - based unit of olin corp. , which produces ultra - pure water for scientific use . he succeeds j. leslie glick , , who resigned in january at the behest of genex's chairman and largest stockholder , robert f. johnson . genex hopes mr. frashier can restructure the company by shedding some lackluster operations and pushing for new products . " he has the kind of commercial savvy we need , " said a company official . " he understands the industrial markets we serve . " under mr. glick , genex had pinned most of its hopes on proto , an enzyme - based drain cleaner that isn't corrosive . that proto strategy had been to build a broad customer base among hospitals , colleges , restaurants and various other institutions . but mr. frashier considers that approach too fragmented to be effective . " i don't think cleaning products are the future for genex , " he said . genex has held talks with several companies about selling the proto license , mr. frashier said , but he declined to identify any prospective buyers . sales to searle had accounted for of genex's annual revenue . the loss of the contract forced genex to dismiss of its work force and post a million loss that year . for the first nine months of , genex reported a loss of million . earlier this month , the company arranged a million line of credit with four venture - capital groups . mr. frashier is betting that genex's new " affinity " proteins still under development will have greater commercial success . these proteins bind tightly to specific molecules , offering the prospect of such applications as the diagnosis and treatment of cancer and the separation and purification of materials . in addition , mr. frashier will push for development of a line of protein - based adhesive and coating products . " i think our chances of commercial success are greater in these areas ( than in cleaning products ) , though we have to do it carefully and thoroughly , " mr. frashier said . in , he organized a management buyout of one of those divisions , continental water systems , which olin acquired recently . mr. frashier , who also was named a director at genex , doesn't expect any quick fixes at the company . " i wouldn't call myself a turnaround specialist , " he said . " i plan to be here for the long haul . " most interest rates drifted slightly higher yesterday in another lethargic session . the federal funds rate hovered around / most of the day . the rate on funds , which are reserves that banks lend each other overnight , has averaged around / in the past few weeks . in the bond market , prices of long - term treasury issues edged lower . some - year issues fell about a quarter of a point , or around for each face amount , after hovering in a tight range all day . corporate and municipal bond prices also slipped . " the treasury market is absolutely dead in the water , " said richard h. suttmeier , a managing director of l.f. rothschild , unterberg , towbin . " there isn't even a breeze blowing to get it moving . this is one of the quietest periods i've seen in years . " a salomon brothers inc. report confirms this view . " by some measures , bond market volatility has now fallen to its lowest levels since the mid - s , " according to the report in salomon's " comments on credit " publication . " the diminishing volatility of interest rates probably reflects a strong and growing consensus regarding the economic outlook . " many corporate executives also expect interest rates to remain stable . " i think they probably are going to stay about where they are , " said burnell r. roberts , chairman and chief executive officer of mead corp. mr. roberts , who also is chairman of the american paper institute , added that rates " perhaps may go down a little but not a great deal . " the bond market has been listless since the end of last year . since then , there have been only three days on which prices of - year treasury bonds have swung more than one point in either direction . the most recent was feb. , when some treasury issues surged / points . an index of long - term treasury bonds compiled by shearson lehman brothers inc. fell points to close at . it ranged between and . the treasury's / bonds due fell to a price of / from friday . the yield rose to from . the government's / notes due fell to / from / friday , as the yield increased to from . rates on short - term treasury bills yesterday rose from friday's closing levels . the average rate on new - week bills sold yesterday fell to from at last week's sale , while the average rate on new - week treasury bills slipped to from . the south carolina public service authority offered about million of revenue bonds . the issue was priced after auction to yield from in to in , according to donaldson lufkin & jenrette securities corp . the unsold balance among the underwriters late yesterday was about million . the issue is rated single - a - by moody's investors service inc. and single - a - plus by standard & poor's corp . separately , underwriters led by shearson lehman brothers priced an offering by the western minnesota municipal power agency . yields on the issue of million of refunding bonds range from on bonds due to on bonds due . the bonds are rated single - a by moody's and single - a - minus by s&p . underwriters led by smith barney , harris upham & co. priced an offering of about million of refunding bonds by the suffolk county , n.y. , southwest sewer district . yields ranged from on bonds due to on bonds due and . the / bonds , due in years , were priced at par . here are details of the government's auction yesterday of short - term treasury bills : . rates are determined by the difference between the purchase price and face value . thus , higher bidding narrows the investor's return while lower bidding widens it . the percentage rates are calculated on a - day year , while the coupon equivalent yield is based on a - day year . lawrence g. rawl , new chairman and chief executive officer of exxon corp. , spots a visitor admiring john d. rockefeller's roll - top desk outside the company's executive dining room . " that may be up for sale next , " he says . he jests , of course . but while the founder's desk seems safe on display on the rd floor of exxon's manhattan tower , the building itself was recently purchased by a japanese company . in many ways , the oil giant that uses a tiger to promote its gasoline but is often described as an elephant is smaller than it used to be . it recently sold its electric - motor and nuclear businesses . oil - refining capacity has been cut million barrels a day , more than the operating ability of many oil companies . capital and exploration spending is down from . the world - wide staff has been reduced to employees from the peak of . " the elephant , " says mr. rawl , " is a lot slimmer . " the downsizing has accomplished pretty well what the company set out to do , according to mr. rawl and lee r. raymond , the new president , in their first interview since assuming their posts jan. . but it has raised concerns among shareholders and industry analysts about how the company is investing its large cash flow at a time when some of its bigger competitors appear to be more aggressive in acquisitions and in exploring for new oil fields . the shrinking may be over . no further asset sales are pending at the moment , the exxon officers suggest , though mr. raymond says the company eventually may close two more refineries , including one in france . " we used to be the world's greatest seller of heavy fuel oil , " he says , " but i don't get a lot of fun out of selling fuel oil and not making any money . " despite the shrinking , exxon remains the world's largest and most prestigious oil company . it operates in more than countries , and its revenue -- billion last year -- approaches the value of all oil sold by the members of the organization of petroleum exporting countries . no other corporation matches its profits -- billion in , despite last year's oil - price collapse . its projected cash flow -- billion to billion this year -- exceeds that of many governments . yet , some industry executives and analysts question whether exxon may be growing stagnant . the takeover - minded t. boone pickens jr. of mesa petroleum co. says that like many other american oil companies , " exxon is liquidating . " an oil company is assumed to be in liquidation when it isn't replacing reserves as fast as it is using them up . " why hasn't it made a successful pass at another big company ? " asks one retired exxon executive . " the perception is that exxon is being liquidated by not doing exploration and by not buying properties . " exxon's officers say such complaints don't take into account the narrowing of profit margins or dilution of earnings if the company got into a bidding race for oil properties or plowed yet more money into exploration . " if you are talking to explorers , to geologists , they shoot craps , " says mr. rawl . " they don't worry about the bottom line . " though down sharply from , exxon's capital and exploration expenditures exceeded billion in . this year , billion is budgeted . " we've taken a lot of heat since we reduced our capital and exploration expenditures , " says mr. rawl . " the fact is , though , that we still spend more in this country and foreign than any other non - government oil company . " the exxon officers say , nonetheless , that the company was more than just a bystander in the industry's big mergers and probably would have made a major acquisition if the bidding hadn't gotten so spirited . " we looked at them all , " says mr. raymond , " but we had in mind a pretty firm standard of what was attractive and what wasn't . " adds mr. rawl : " we didn't think they ( the takeover targets ) were good deals at a high oil - price forecast . as it turned out , though , the price didn't stay high , and therefore we were lucky . " also , he says , many bidders were in much more need of oil reserves than exxon . " we were coming from a very strong resource base , trying to compete with people who were not sure where their next development well was coming from , " he says . " they were willing to bet the farm , and we weren't . " but the plunge in above - ground prices didn't result in as many depressed sales of oil reserves as might have been expected . banks that held such reserves as collateral for loans to oil companies wouldn't permit sales until they were repaid . also , most holders of oil properties felt that the price of petroleum would rebound , and their asking prices remained relatively high . unlike many oil companies , exxon didn't have big write - downs on its reserves last year . its proven oil and gas reserves held remarkably stable , in fact -- down only marginally at year - end to billion barrels , as measured in the oil equivalent , from billion barrels a year earlier . mr. rawl notes exxon also has billion oil - equivalent barrels of probable and " static " reserves -- discoveries that aren't currently being developed because of transportation , economic or technology reasons . " we've got as much out there in the bank as we have in the pipeline , " he says . this comfortable reserves position is a major reason exxon officials say they don't worry about what to do with their cash flow . exxon's outlook was and remains that the real value of hydrocarbons will rise substantially over time and its strategy is to make the right long - term investments . while not predicting , the exxon officials say their planning is based on the price remaining flat -- around a barrel in dollars -- for several years and then rising faster than inflation . " one day we are going to wake up , and the price will be up " significantly , says mr. raymond . " the technical answer in our planning basis is that the ' knee ' in the curve is in plus or minus two years . " exxon will be one of the few companies " in a position to ' lever up ' with an increase in price -- both in its near - term earnings impact and its longer - range investment opportunities . " company officials say exxon still seeks " suitably priced " oil properties but is conservative in the search . that is for antitrust and other reasons , but chiefly because they believe they have other options for their investments , such as the future development of their own static resources . total price paid was billion , acquiring for exxon oil in the ground at an average cost of a barrel . mr. rawl doesn't rule out further big acquisitions , such as the million purchase in of a stake in hunt oil co.'s interest in a production - sharing agreement with the yemen arab republic , including the prolific alif oil field . but he insists the company isn't helping shareholders if it substantially boosts assets only to get a modest earnings increase . even as it shops for properties , however , exxon has spent several times as much buying back of its own stock . since the repurchases began in , exxon has acquired million shares for billion -- far exceeding the billion four - year buyback recently announced by general motors corp. exxon paid an average price of a share ; in new york stock exchange composite trading yesterday , exxon closed at , down cents . the cost of repurchasing shares so far means that , in effect , they are buying oil at a barrel , which " is a lot better than spending , or a barrel looking for it , " says mr. rawl . the figure is arrived at by dividing shares into the company's proven reserves . mr. rawl cites other buyback benefits as well . earnings are spread across fewer shares . in , while exxon's total net income was up to billion , per - share earnings rose to because of fewer shares outstanding . though " modest " share repurchases continue on a month - to - month basis , company officials say they don't necessarily think this the best investment they can make . " sound development investments are obviously better , " says jack f. bennett , senior vice president and chief financial officer . " we are always on the prowl for those . " san francisco museum of modern art : " pattern and process : nature and architecture in the work of paul klee " -- twenty - six drawings , prints , oils and watercolors from the years - . highlights include " garden of passion " ( ) and the cubist - inspired " reflections in a window " ( ) . van ness ave . through nov. . baltimore museum of art : " danny lyon : conversations with the dead -- " sixty - eight photographs taken between october and february of prison inmates in texas . mr. lyon said at the time he hoped the project would " strike a blow at all our prisons . " art museum drive . through april . smith college museum of art : " the french etching revival : la societe des aquafortistes ( - ) " -- two dozen etchings -- from landscapes to interiors -- by members of the society of etchers , which launched a revival of the medium by producing original etchings at reasonable prices . works by manet , corot and dutch painter johan barthold jongkind are included . elm street at bedford terrace , northampton , mass . through march . new york public library : " floral follies : broadway revue costumes - " -- original designs and documents from the " golden age " of broadway extravaganzas , depicting everything from flowers to a turkey - trotting turtle , whatever that is . fifth avenue and nd street . through may . hungarian state folk ensemble : one hundred performers in colorful regional costumes present a hungarian rhapsody of music , dance and song , including csardas , folk tunes and a little liszt -- youngstown , ohio ( stambaugh auditorium ) , tonight ; cleveland ( state theatre ) , march ; detroit ( music hall ) , march ; battle creek , mich. ( kellogg auditorium ) , march ; ann arbor , mich. ( power center , university of michigan ) , march ; utica , n.y. ( stanley performing arts center ) , march ; schenectady , n.y. ( proctor's theater ) , march ; philadelphia ( academy of music ) , march . greenvale , n.y. ( tilles center for the performing arts , long island university - c.w . post campus ) , march ; north branch , n.j. ( college theater ) , march ; washington ( kennedy center concert hall ) , march ; worcester , mass. ( worcester memorial auditorium ) , march ; amherst , mass. ( fine arts center concert hall , university of massachusetts ) , april ; new bedford , mass. ( zeiterion theater ) , april ; boston ( symphony hall ) , april ; brooklyn ( walt whitman auditorium , brooklyn college ) , april - . multicolored laser beams -- from curlicues and triangles to trains and pears -- boogie to the beat. st street and central park west . every friday and saturday during this unlimited engagement. ( ) - . metropolitan opera : eva marton aims her laserlike soprano at puccini's " turandot " when she sings the role of the puzzle - posing princess of ice in a new production by franco zeffirelli . placido domingo has the answers as prince calaf ; leona mitchell commits suicide as little liu . lincoln center , th and broadway , manhattan . tonight , march , , , ; april , and . ( ) - . chamber orchestra of europe , conducted by lorin maazel , opens an - city u.s. tour on march at miami's dade county auditorium . the program includes beethoven's " symphony no. , " mozart's " violin concerto no. " and tchaikovsky's " serenade for strings . " also : palm beach , fla. ( society of the four arts auditorium ) , march ; sarasota , fla. ( van wezel performing arts hall ) , march ; atlanta ( glenn memorial auditorium , emory university ) , march ; boston ( symphony hall ) , march ( matinee ) ; new haven , conn. ( woolsey hall , yale university ) , march ; philadelphia ( academy of music ) , april ; new york ( carnagie hall ) , april ; ann arbor , mich. ( hill auditorium ) , april ; greenvale , n.y. ( tilles center , long island university - c.w . post campus ) , april ; new york ( avery fisher hall ) , april . music hall , elm st. march and . ( ) - . ned gillette's friends think he is crazy . his partner quit and the winds and ice were against him , yet he spent two months recently at the southern tip of chile hoping to row to antarctica . that's right , row . he and three companions were poised to brave miles of storm - tossed sea and ice in a - foot craft named sea tomato for its shape . the feat would have been a first , but the brief antarctic summer is fading without the wind they hoped for . so mr. gillette , who hails from stowe , vt. , ski country , called off the trip until next year and , just for fun , went ski - touring on the frozen continent . true , a boat trip to the antarctic isn't the same as conquering mount everest , but achieving firsts is what counts to professional adventurers , and all the firsts on everest seem to have already been achieved . seekers of the limelight have even hang - glided from the mountain and kayaked down it . in fact , mr. gillette himself has conquered everest : too late to beat sir edmund hillary and tenzing norkay to the - foot summit , he became the first to ski and hike around it . his girlfriend , jan reynolds , circled it by balloon . paul schurke and six friends last year mushed dog sleds to the north pole from canada's ellesmere island . without resupply , they hauled gear over countless ice ridges and floated it across stretches of open water in temperatures as low as degrees below zero . their achievement duplicated the feat of adm. robert peary , but they ran into more passers - by than peary did . on their way across the moving ice pack , they bumped into french physician jean - louis etienne , who was skiing to the pole . returning , they met a pair of frenchmen trying to fly there on ultralight aircraft -- basically hang gliders with motors. ( one crashed ; bad weather blocked the other. ) . clearly the icecaps are beginning to crawl with people . one canadian tried riding a motorcycle to the north pole , but his dirt bike couldn't climb the ice ridges . it stands permanently parked in the snow of ellesmere island , facing north . the handlebars are said to be stuffed with president reagan's favorite emergency rations : jellybeans . australian millionaire dick smith prefers posher vehicles . once his navigation instruments froze , and the second time a generator gave out . this month arctic temperatures grounded two pilots trying to make the first pole - to - pole circle of the earth by single - engine prop plane . " everything froze , " a spokeswoman explains . pam flowers , a - pound veteran of alaska's - mile iditarod dog - sled race , hopes this spring to become the first woman to make a solo mush to the north pole . but the title of the world's most polarized people goes to the japanese . the late naomi uemura was the first to reach the north pole alone by dog sled . he inspired mitsuro oba , a rice and chicken farmer , to make the first round - trip hike to the magnetic north pole , about miles south of the geographic pole . actress masako izumi roared off for the geographic pole by snowmobile , but an early thaw forced her back . polar popularity brings an annual migration to the tiny village of resolute bay , canada ( population ) . " every spring it is teeming with crazies , " says outfitter barton lewis . another outfitter in resolute bay , bezal jesudason , says the local eskimos view the expeditions with bemusement . " they're practical people , " he says , so when a group of adventurers walks off for the pole , " they wonder why they would do that when they could go by snowmobile . " as the arctic grows more crowded , many adventurers are gravitating to the opposite pole . mr. schurke and his partner , will steger , hope to be the first to cross antarctica by dogsled . and since teams from germany and idaho have similar ambitions , a race may ensue . " it's one of the last true adventures that haven't been done , other than doing it by pogo sticks , " says mr. lewis , the outfitter . the toughest obstacle may not be the temperature but cold , hard cash . mr. lewis calculates that the steger - schurke expedition , supplied by aircraft , will cost million . antarctic logistics make the arctic seem accessible by comparison . last year a british group walked to the south pole but had to be rescued by the u.s. national science foundation after ice crushed the boat that was to have been used for the return voyage . just last month , a team led by norwegian monica kristensen kept the nsf's antarctic staff on pins and needles . the team failed to reach the south pole by dog sleds or to arrange a rescue flight . but it finally straggled back to the bay of whales just in time to meet a ship . the foundation is unhappy in its role as the continent's rescuer of last resort , a role that diverts equipment , time and money from scientific research . peter wilkniss , the nsf's polar - programs director , talks of making expeditions post a rescue bond before setting out . the search for the unusual is drawing even tourists to the poles . adventure - travel agencies now take well - heeled travelers to antarctica to view coastal wildlife and climb - foot vinson massif . several agencies fly people to the north pole for champagne breakfast , hosted in one case by edmund hillary and astronaut neil armstrong . like the expeditions , these trips aren't for tight budgets . the price of a planned visit to the south pole is per person . chris bonnington , a british climber who has led several everest expeditions , plans an assault on an - foot side of a peak in antarctica's remote ellsworth mountains , but the peak itself has already been scaled by another route . and italian reinhold messner , who was first to climb everest without oxygen , conquered vinson massif last year in hopes of claiming the title of first to scale the tallest peaks on seven continents , but two rival climbers assert they beat him to the title . when it comes to conjuring up " firsts , " few have shown more imagination than mr. gillette , who remains determined to row his sea tomato to antarctica . antarctic rowing isn't entirely new . explorer ernest shackleton and his crew rowed and sailed a small boat to one of the falkland islands from antarctica in , after their ship endurance was crushed by ice . but no one has rowed to antarctica or reached it in such a small boat , mr. gillette says . in today's competitive adventure business , he explains , " you have to differentiate yourself . " when it comes to hamstringing the contras , house democrats never seem to sleep . after nearly five years of staying up late , thinking of new ways to block u.s. support for the democratic resistance fighting the sandinistas , they are now trying to turn the fate of the nicaraguan people over to accountants . tomorrow the house will vote on a democratic proposal to place a six - month moratorium on million in contra aid -- aid congress voted for last year but that hasn't yet been delivered . the aid would be held in escrow while the reagan administration prepared a full accounting of how all previous aid had been spent . of course the delay would effectively disarm the contras and cement into place the first soviet - client state on the american mainland . maybe the reasons the house democrats won't let the contras stand and fight for what they believe in is because the democrats themselves no longer stand and fight for their beliefs . moratorium supporters cite irregularities in the disbursement of past u.s. humanitarian aid to the contras . charges of corruption have been raised . it may be true that some money has gone astray , and investigators should pursue the issue . but the security interests of the u.s. in keeping a second neighboring country out of the communist orbit shouldn't have to wait for a congressional foreign - policy team that won't act until it gets the good housekeeping seal of approval from the general accounting office . declaring a " moratorium " on nicaragua's civil war would if little else allow the country's junta to consolidate its power and position the military materiel being shipped in from the soviet union and the warsaw pact countries . nicaragua's economic needs , meanwhile , are being ministered to by , incredibly , some of the nato allies . west european countries , including several nato members , last year sent tens of millions of dollars in economic aid to the contras' enemies -- the sandinista junta . norway sent million worth of fertilizer , paper , machines and technical assistance while denmark granted nicaragua million in soft loans . last month , more than members of european parliaments wrote a joint letter to members of congress , opposing aid to the contras fighting what the europeans called , " the democratically elected government of nicaragua . " when rep. jim courter ( r. , n.j. ) wrote back to object , a spokesman for the embassy of the netherlands said that attempts to convince his government to end its own aid program were seen as " interference in the internal affairs of a sovereign nation . " sweden's ambassador to the u.s. , wilhelm wachtmeister , coolly replied that his country was increasing its annual assistance from million to million . " given the severe constraints nicaragua is facing , it would seem premature to conclude that these efforts { to bring democracy } in nicaragua will not be successful , " he wrote . at least the europeans have a plausible excuse for this preposterousness : much of their junta aid is no doubt a sop to the left in their own countries . it's harder to see what excuse the house democrats have for declaring a " moratorium " on u.s. foreign policy . it won't of course . if the sandinistas remain in power , they will surely carry out their promise to spread revolution throughout central america . the u.s. will have no choice but to invoke the monroe doctrine and spend more of its defense budget securing its southern flank by blockading or finally invading communist nicaragua . the house democrats know this , and we suspect that even the ambassador from sweden knows this . but when the day of reckoning comes , they no doubt also assume that someone else , possibly even a democratic u.s. president , will bear full , personal responsibility for cleaning up their mess . individual investors have filed at least eight lawsuits against arbitragers and investment bankers implicated in wall street's insider - trading scandal , and more are expected to follow . the plaintiffs in these cases sold stocks just before their prices surged on takeover news . the suits argue , in effect , that certain buyers -- who have admitted or been charged with using illegally obtained inside information -- took unfair advantage of the plaintiffs . securities lawyers are divided on the plaintiffs' prospects . moss vs . morgan stanley , a insider - trading suit in which no damages were awarded , presents an obstacle . but some lawyers say that decision was too narrow to serve as a precedent for many of the current cases . the moss suit involved trading in deseret pharmaceutical co. stock before a warner - lambert co. tender offer for the company became public . in that case , the trading involved a tip from an employee of morgan stanley & co. , which was advising warner - lambert on the offer . michael moss sued in federal court in manhattan on behalf of himself and others who sold deseret stock on the same day that the defendants were buying shares . plaintiffs' lawyers in the current insider - trading lawsuits say these cases differ in important ways from the moss case . in many of the suits , the lawyers say , defendants or people who leaked them information worked for advisers to the target concern in a takeover situation , and thus the parties breached a fiduciary duty to the company and its shareholders . michael asimow makes this argument in a suit in federal court in manhattan . the class action seeks unspecified damages on behalf of people who sold stock in bendix corp. , carnation co. , continental group inc. , getty oil co. , natomas inc. , storer communications corp. and unocal corp. on certain dates in , and . in the case of carnation , the suit alleges that kidder , peabody & co. , the financial adviser to carnation , and martin a. siegel , then a kidder peabody investment banker , breached their fiduciary duty to mr. asimow and other carnation stockholders when mr. siegel allegedly leaked word to ivan f. boesky of a pending takeover offer by nestle s.a. of switzerland . one such suit is a class action brought by richard c. goodwin and three other plaintiffs against mr. boesky , dennis b. levine , and several others , including drexel burnham lambert inc. , which employed mr. levine . in federal court in manhattan , the plaintiffs are seeking unspecified damages on behalf of investors who sold shares of any of six firms -- american natural resources co. , fmc corp. , general foods corp. , houston natural gas corp. , nabisco brands inc. and union carbide corp. -- on certain dates in and early . messrs . boesky and levine bought those stocks on those dates , allegedly using inside information from mr. levine . " my concept is that this was more than just insider trading , " says david berger , a partner in the philadelphia law firm of berger & montague and a lawyer for the plaintiffs . " this was a tremendous racket . i don't think moss was ever intended to cover this kind of massive fraud . " most of the other current suits involve trading in one or more of the stocks cited in the asimow and goodwin cases . robert m. romano , a partner at the new york office of the law firm morgan , lewis & bockius , says plaintiffs may have good chances in cases where they can clearly establish that a tip came from someone with a fiduciary duty to the target firm . but mr. romano , a former securities and exchange commission official and a former merrill lynch & co. official , says the recent trend in rico cases has been to narrow , not expand , the applicability of the rico statute . some judges , he says , believe that rico is being overused . the best hope for individual investors , mr. romano says , may lie in applying to administrators of " disgorgement pools " being set up by the sec to compensate investors . these pools contain funds put into escrow accounts by defendants under settlements with the sec -- million in the boesky case , for example . the funds will be distributed under plans to be proposed by the sec and approved by a court . joy manufacturing co. said it completed the previously reported sale of its petroleum equipment business to cooper industries inc. , houston , for about million in cash and the assumption of certain liabilities by cooper . joy , which plans to go private in a previously announced leveraged buyout valued at million , also said that all directors but one have resigned . joy said the remaining director , robert dickey iii , chairman , president and chief executive officer of dravo corp. , will be one of five members of the new joy board . the other four directors will be roy wennerholm jr. , chairman , president and chief executive of ecolaire inc. , who will be joy's chairman , president and chief executive ; edmund j. freeman , vice president and controller of ecolaire , who will be joy's vice president and chief financial officer ; leonard p. shaykin , and john g. quigley . messrs . shaykin and quigley are partners in adler & shaykin , a new york investment firm , which on feb. completed the purchase of about million joy common shares through a tender offer that began dec. . the changes in the joy board had been anticipated . closely held ecolaire is a malvern , pa. - based maker of equipment for utilities and other industries . in a leveraged buyout , a group of investors acquires a company in a transaction financed largely by borrowing . the debt ultimately is paid through the acquired company's operations or sale of its assets . allegis corp. directors today are expected to consider a response to a takeover threat by coniston partners . an allegis spokesman confirmed that the board will discuss the new york investment firm's announcement that it owns of allegis's shares and plans to seek control of the board . " a fight is inevitable , " a company official said . meanwhile , allegis shares soared again in heavy trading on the new york stock exchange . the price jumped a share to . as reported , coniston said it plans to solicit shareholder consent to remove of allegis's directors . if successful , it said it would consider breaking up the company's assets , which include united airlines , hertz corp. and its chain of westin and hilton international hotels , or selling allegis whole . responses from directors could range from a public statement to a lawsuit to more drastic measures . earlier this month , the company wove an anti - takeover defense into an aircraft financing pact with boeing co. , and there have been reports that allegis may consider similar arrangments with other companies . coniston officials , meanwhile , said they had preliminary talks with representatives of the united pilots union , which is seeking to buy the airline . raymond j. donovan's construction company said it plans to revive a dormant civil - rights lawsuit accusing the bronx district attorney of making improper statements about the former labor secretary's fraud case . a state - court jury on monday acquitted mr. donovan and other defendants of fraud and larceny charges . the indictment resulted in a long , bitter and expensive legal battle . the company that mr. donovan co - owns , schiavone construction co. , said it will likely pay as much as million in legal fees and other costs incurred in the trial by itself , mr. donovan and the other defendants . the federal civil - rights lawsuit , besides asking for undetermined punitive damages , demands that bronx district attorney mario merola pay the fee that schiavone owes to a public relations firm owned by jwt group inc. schiavone maintains it was forced to hire the firm to counter mr. merola's public statements about the case in newspapers , on cbs's " minutes " program and elsewhere . mr. merola vigorously denies making improper statements . it has been almost three years since mr. donovan became the first sitting cabinet member to be indicted , leading to his resignation from the reagan administration . at the time he was charged , mr. donovan told reporters the indictment was so " baseless " that it wasn't " worth the paper it's written on . " he claimed the charges were timed to hurt president reagan's reelection campaign , a claim that state prosecutors here vigorously deny . a state judge refused to dismiss the case in march . schiavone is paying million to million in legal fees on behalf of itself , co - owner mr. donovan and six other co - defendants who were acquitted monday , according to a schiavone attorney . the eight - month trial , which schiavone sought to paint as more of an accounting case than a fraud case , cost defense lawyers a week in transcripts , according to the attorney . in addition , it was necessary to hire college students to catalog hours of tapes secretly recorded by the federal bureau of investigation , the attorney said . last month , the presiding judge , new york supreme court justice john p. collins , reduced the number of felony counts against mr. donovan , schiavone and the other co - defendants from the original to only in order to " simplify " the jury's deliberations . jurors said after the verdict monday afternoon that the case was simple to them : there was too little evidence of wrongdoing , and some appeared to agree with defense attorneys that the charges were politically motivated . district attorney merola rejects that claim . before the transit - authority case , mr. donovan had been dogged by allegations of underworld connections , although an investigation by special prosecutor leon a. silverman in found " insufficient credible evidence " to prosecute mr. donovan on charges of criminal corruption and links to organized crime . mr. maceda is a " collector " for an illegal numbers racket called jueteng . it is the lowest form of graft in a country where corruption still flourishes , months after filipinos ousted ferdinand marcos and set out to reform the government . finance secretary jaime ongpin , who oversees the bureau of customs , says customs officials still connive at widespread smuggling . the head of the philippine constabulary , which controls the police , recently complained that many of the new government's local officials are involved in illegal gambling . the police aren't prize - winners either . a manila resident whose wife was stabbed to death early this month says detectives took statements , dusted for fingerprints and asked for a payoff to pursue the investigation -- more than most filipinos earn in a month . the government of president corazon aquino has halted the big - time graft , the " crony capitalism " that distinguished the marcos regime . she doesn't give government monopolies to favored businessmen or underwrite multimillion - dollar projects to enrich friends . but mrs. aquino has done little to halt the pervasive grass - roots corruption that is far more visible to ordinary citizens . failure to deal with the problem could affect stability . " corrupt judges and the corrupt police , that's why you join the npa . it's because someone in your family got a raw deal , " says a diplomat who studies the communist guerrillas called the new people's army . jueteng seems a relatively harmless game , and mr. maceda seems a harmless family man . he has his wife's name tattooed on his shoulder and relishes his job security . " in this business the capitalist won't go bankrupt , " he says , smiling through a pancho villa mustache . but the numbers racket involves enormous sums of money by philippine standards . one published report puts monthly wagers at million . " this is the one source that corrupts the law enforcers , " says ruther batuigas , the country's bestknown crime reporter . " they get spoiled , they get involved in bigger corruption . " says neptali gonzales , a leading member of the newly elected philippine senate , " it is a matter of common knowledge that jueteng can't be played in any town without a tie - up with elements of the military and the local police . " a kabo is the next step up in the jueteng industry , supervising about a dozen collectors like mr. maceda . he reports to the " second owner , " who in turn fronts for the " financer " or " capitalist " who actually owns the local jueteng operation . protection allows the jueteng game to operate with remarkable openness . if a really big bet is laid in his area , the kabo says the second owner will come there to draw the winning number before a crowd of neighbors . the neighborhood record for a jueteng win is , by a local policeman . to publicize the event , the syndicate also gave the policeman a television set " as a promotion , " the kabo says . mr. ongpin , the finance secretary , says mrs. aquino is " very serious " about reducing corruption and requires a progress report on the subject each month from her cabinet members . but in practice , the government has done little besides seize property from mr. marcos's former cronies . nobody of note has gone to jail . " they keep defining corruption and studying corruption but they haven't made a stab at it. . . . and mr. ongpin concedes that " nobody is going to believe us until we nail one of the big fish and put him in jail . " mr. ongpin was plunged into almost a year of frustration and lawsuits when he tried to clean up the customs service , where he says corruption loses " billions " of pesos in government revenue ( the peso currently trades at to the dollar ) . most of the drain comes through falsifying documents to make imports appear less valuable , thus reducing the import duty . to beat this problem , mr. ongpin early last year hired societe generale de surveillance , a swiss cargo surveyor , to inspect philippine - bound goods before they left nine foreign ports . " in the one month we had sgs working , they found of documents were under - declared , misclassified " or otherwise faulty , he says . but the customs commissioner got a court order to stop the inspections . it was seven months before mr. ongpin could begin a new contract with sgs , covering only three foreign ports . there seem to be three main reasons for the aquino government's feeble approach to corruption : . -- mrs. aquino is indecisive . she lets her appointees make policy , then fails to intervene when they disagree . the standoff over sgs is an example . -- she is reluctant to offend the armed forces , which control the police . " in the fight against corruption , against lawlessness , the government can't rely on the military to enforce law and order because the military is itself very tainted and has so many skeletons in its closet , " a diplomat says . -- corruption is so ingrained , so necessary to feed the family of a - a - month policeman , that many filipinos don't see it as a punishable offense . " we don't want to break somebody's rice bowl and put the breadwinner in jail ; it isn't christian , " says mr. paterno , the senate candidate . mrs. aquino's failure to use her powers against conventional corruption , or to jail even marcos - era thieves , sets a poor example for the new philippine congress . mr. marcos didn't invent crony capitalism , he centralized a system of handouts and favors that flourished under previous congresses . there will be temptation for the new congressmen , eager to oil their political machines , to revive the practice . the test will come when the government disposes of billions of dollars in assets seized from the old cronies or held by government corporations . " i think i can insulate myself from the pressure and so can my colleagues , " says senator - elect rene saguisag . but he says there may be " a hell of fight as to who gets what bone . " as the iran - contra hearings rivet washington's attention , the revelations about white house policy in central america are causing little fuss in the nicaraguan capital . most nicaraguans say they are bewildered by the complexity of u.s. law and of a scandal that includes covert operations across central america and the middle east . government officials are matter - of - fact about the hearings : " this simply reflects and confirms what we've been saying all along , " says vice foreign minister victor tinoco . " by logic , this hearing should lower the possibility of an invasion . but you still can't rule that out . you still don't know how the executive branch will react . " while sandinista government comment has been scant , sarcastic barbs published in the official press seem to be aimed at capitol hill as much as at the reagan white house . last sunday , a cartoon in the sandinista party newspaper barricada depicted three confused american legislators trying to find their way through a black void with inadequate flashlights . barricada has usually played down the hearings , even when testimony shed light on important contra developments . in contrast , follow - up stories on the contras' slaying of american volunteer benjamin linder have received more - prominent display . some evenings , sandinista television news broadcasts don't mention the hearings at all . analysts speculate that the sandinistas aren't taking full advantage of the scandal's propaganda potential so that citizens aren't given a false sense of security that the contra war will soon end . the war offers a handy excuse for food shortages and inflation . and what does the man in the street say ? " the investigation has no value , " says javier sanchez , years old , a cereal - factory worker , " because the whole world already knows reagan's role supporting the contras . " moises mendoza , a - year - old supermarket manager , believes that " it's good they investigate " but that " the united states government will always defend its interests , which are based on imperialistic plans to exploit the people of the third world . " berta estrada , , a market woman who is nearly illiterate , says she doesn't have an opinion . she adds : " only reagan knows what he's doing . " a stake in texaco has been acquired by australian financier robert holmes a court , prompting speculation he will try to influence any settlement of texaco's billion legal battle with pennzoil . texaco's president said the firm's " options are open " if holmes a court decides to attempt a takeover . burlington industries agreed to a leveraged buyout by a morgan stanley - backed group for a share , or billion , sources said . the accord is likely to end a month - long bid by asher edelman and dominion textile to acquire the textile concern . big u.s. banks are expected to follow citicorp and sharply boost reserves for doubtful foreign loans . the action could mean higher interest rates and banking fees , particularly for consumers and small businesses . bankamerica may face some big obstacles in its recovery effort . brazil reacted calmly to citicorp's move . britain urged its banks to boost reserves for third world debt . alexander & alexander services' stock rose sharply on news that fireman's fund has bought a stake in the big insurance broker and will seek more . but fireman's fund denied it had any takeover plans . oil prices had been rising amid expectations of an opec price boost . crazy eddie received a buyout proposal of a share from a group consisting of the electronics retailer's founder , eddie antar , and a firm controlled by the belzberg brothers . beatrice cos. plans an initial public offering for its remaining non - food businesses and some of its smaller specialty - food lines . chrysler cleared the major hurdles in its bid to acquire american motors , in part by sweetening its proposal to the equivalent of a share from . chrysler also reached an accord to buy renault's stake in amc . boeing will produce a smaller version of its twin - jet airliner . the firm said it already has orders and options for of the new planes with a total value of billion . japan is preparing to settle a prickly trade issue by allowing both japanese and u.s. aerospace companies to participate in a multibillion dollar jet - fighter project . ernst & whinney was sued by the fdic for an allegedly faulty audit of four failed tennessee banks owned by the butcher brothers . warner communications put off its annual meeting after failing to agree on terms for buying back a stake held by chris - craft industries , its largest holder . meanwhile , chriscraft's chairman sued warner . argentina reached an accord with the paris club of creditor nations to reschedule billion of debt owed to foreign governments and receive million in new loans , officials said . stocks : volume shares . dow jones industrials , off ; transportation , off ; utilities , off . bonds : shearson lehman treasury index , up . commodities : dow jones futures index , off ; spot index , up . dollar : yen , up ; marks , up . and bob and carol and ted and alice thought they knew all the angles ? ( we borrow the familiar names to relate a gift - tax scam involving brothers. ) . one may give a year each to any number of people , free of gift tax . so , in through , bob and carol each gave to each of their two children and ted and alice's three children ; ted and alice each gave to each of the five children . also in , ted and alice each gave ( over the limit ) to each of bob and carol ; in and , ted and alice each gave to each of bob and carol . in the next episode , the irs audited the foursome , who claimed that only the excesses of were subject to gift tax . but in private ruling , the irs takes the couples to task and tax : the reciprocal transfers between families were related and generally equal . they doubled what each child got . ted's and alice's gifts to bob and carol in effect repaid gifts to ted and alice's third child . the irs found that each parent should be treated as having given each of his or her own children a year -- twice the exempt sum . u.s. judge neese in nashville , tenn. , found that mid - south music corp. promoted illegal shelters . but in , he also ordered the irs to pay damages for illegally revealing company tax information to investors ; irs letters , sent before it took public action against mid - south , warned investors that they risked audits and penalties if they claimed the shelter deductions . the irs turned to the sixth - circuit appeals court . now a three - judge panel has held that the irs's pre - filing notices didn't violate the confidentiality of mid - south's returns and has reversed the damage award . judge norris said the notices identified mid - south as a shelter promoter , not a taxpayer , and gave " no indication " that its returns were being audited or investigated . anon. writes another hit : the official tax - act handbook . the " general explanation of the tax reform act of , prepared by the staff of the joint committee on taxation , " or " blue book , " is a best seller for the government printing office . some copies of the first printing of have been sold at , mailing included . experts peruse the pages , especially notes on probable technical corrections , to see how far the anonymous authors have advanced understanding of what congress really meant . commerce clearing house offers a one - pound , - ounce facsimile at , plus mailing . both publishers report brisk sales above the tens of thousands of copies given to their regular subscribers . two publishers resell the gpo book - bureau of national affairs for , tax notes magazine for plus mailing . just out is a separate , - page explanation of technical corrections to past acts ; gpo price , . after their divorce , louise stayed on with billy in indianapolis to look after their seven kids . he paid all her expenses ; they later had another child . she wasn't just employed as a housekeeper , as the irs argued , the tax court decided . it let billy claim his ex - wife as a dependent . moving on : roger olsen , resigning june as assistant attorney general for tax , will join the los angeles office of fried , frank , harris , shriver & jacobson aug. . john murray is retiring as deputy assistant attorney general for tax this week to join an unidentified law firm . new irs rules say failure to comply will subject a payer to penalties for failing to file the reports at all . royalties may be costly for software corporations that chose " s " status . tax revision created incentives for a closely held regular corporation to become an s corporation , taxed like a partnership . but many computer - programming concerns that get passive income -- royalties -- from licensing software fell unawares into a trap , says charles medallis of arthur andersen & co. , cpas . they are successful concerns that ploughed profits into expansion and so had large earnings and profits on their books when they converted to s status . the companies have run afoul of two s - corporation rules , medallis says : first , if an s concern holds earnings and profits from its regular - corporation days , and over of gross receipts is passive income ( royalties ) , the excess passive income is taxable to the company ( instead of only to its owners ) at the highest corporate rate . second , if that happens for three straight years , the company's s status is canceled . briefs : the irs created an award plaque for law - enforcement people who make significant contributions to its criminal investigations. . . . the irs issued instructions for the required reporting of real - estate transactions on form - b. . . . the house ways and means oversight panel plans hearings in the week of june on exempt entities' taxable business activities . the senate labor committee approved a bill that would require employers to give workers as much as six months advance notice of plant closings or layoffs . the vote was - , with all the panel's democrats and two republicans in favor . the measure has drawn sharply conflicting views from companies and unions . while many employers say that employees should be notified of plans to close factories or lay off workers , business groups say a federal requirement would rob them of flexibility , especially in furloughing workers when sales slump . unions , however , say that government rules are needed to ensure that workers have time to begin the adjustment needed to find and qualify for new employment . labor groups complain that many employers have given little or no notice of closings or layoffs in the past . unions have campaigned in recent months to persuade the democrat - controlled congress to enact a raft of labor - oriented bills , and the plant - closings measure is high on that list . other portions of the bill have widespread support among both business and labor groups , as well as within the reagan administration . the house education and labor committee plans to consider its own plant - closings and layoff - notification bill june . the house narrowly defeated a similar measure in . while employers insist they're ready to give adequate closing notice voluntarily , a recent general accounting office study showed that many companies give notice of only a week to two weeks . under the senate committee's bill , the advance notice of closing or layoffs would range from a minimum of days for small companies with to workers to days for companies with or more employees . but the time limit wouldn't apply if management didn't know that far in advance that it would have to close a plant or furlough workers . business groups say that exemption would likely lead to numerous court battles . the notice requirement wouldn't apply to companies with fewer than workers . the national association of manufacturers and other groups also object to a provision of the bill that would require employers to open their books to unions so the unions could know what information underlies companies' layoff and shutdown plans . the lawmakers eliminated a provision that would have required employers to consult with unions before closing factories or laying off workers ; business groups contended that could delay or frustrate the moves , or at least make them more costly . even with the changes , the bill involves " pure labor - management locking horns , " says renee reymond , an national association of manufacturers labor - relations staff aide . cenergy corp.'s two largest shareholders said they plan to team up to try to take control of the company . in a joint statement , snyder oil partners l.p. and bryson oil & gas plc said they agreed to cooperate in their effort to acquire control of cenergy but the two companies said they haven't decided on their next move . snyder said it wants to negotiate a purchase with cenergy management but if that fails it would consider a proxy fight or a tender offer . cenergy , an oil and natural gas company based here , said it wouldn't have any immediate comment . last week , as previously reported , it turned over its shareholder list to bryson in line with a federal court order . cenergy's annual meeting is scheduled for july . both companies hold stakes in cenergy totaling , including a cenergy share purchase made by bryson monday . bryson , a belfast , northern ireland - based energy company , told the securities and exchange commission that it paid a share for the latest purchase . it said it now holds cenergy shares . cenergy currently has about million shares outstanding . bryson's chairman is delo h. caspary , a rockport , texas , investor who owns a stake in bryson . mr. caspary has been involved in the energy business with an offshore rig servicing business . in , he unsuccessfully led a group of dissident shareholders of louisiana land & exploration co. , new orleans , in a proxy fight aimed at replacing louisiana land's board because of poor earnings and exploration results . snyder , a fort worth , texas - based energy exploration and development limited partnership , said it holds cenergy shares , or a stake . snyder said it previously proposed to acquire all the cenergy shares it doesn't already own for at least a share . cenergy never responded to the bid because it didn't consider it a definite proposal , james w. hunt , cenergy's chairman , president and chief executive officer , said . meantime , cenergy has said it would consider formal offers from snyder , bryson and others . as previously reported , cenergy hired first boston corp. for financial advice . cenergy stock closed yesterday in new york stock exchange composite trading at a share , up cents . the nation's charities are becoming expert at doing good by doing well . but their for - profit competitors are crying foul . the profit motive is stronger than ever in the nonprofit sector as institutions , some of them trying to compensate for cuts in federal spending , expand their money - making sidelines . hospitals sell hearing aids and operate commercial laundries and pharmacies . universities organize tours and run catering services . ymcas start profit - making exercise centers . some planned parenthood groups even market their own brand of condoms . most of those sidelines , however , are also tax - exempt . according to the u.s. tax code , charities are required to pay federal income taxes on profits from commercial endeavors only if such activity is unrelated to their charitable purpose . but the code doesn't define what is " unrelated . " small - business owners contend that the law is far too vague and that -- coupled with other privileges such as lower postal rates and access to public - service advertising -- it gives charity businesses an unjust edge . meanwhile , tax officials say they are waiting for legislative guidelines on what constitutes unrelated business activities for nonprofit groups . mr. applebaum figures that his business , which takes in about million annually , has lost more than in business a year to hospital laundries charging as much as less . " i just want them to live by the same rules that i live by , pay the same taxes , have the same cost of capital , " he says . charity officials counter that their business ventures deserve a tax break . " the principal motivation of nonprofits is service rather than profits , " argues a position paper issued by the independent sector , a coalition of voluntary organizations , foundations and corporations . " nonprofit organizations are special because they serve the public interest . " despite the surge in commercial activity , nonprofit groups still generate the largest part of their income from services they have always provided , says lester salamon , director of the institute for policy research at johns hopkins university . he estimates that commercial sales account for less than of all nonprofit groups' income . still , some groups' dependence on profitable sidelines is increasing . at one such building , revenues from a nautilus center help pay for scholarships to a private school housed in the same facility . although tuition is just a year , half the school's moderate - income students need financial aid . " we have to be able to earn a modest margin to fund the charitable works we need to do , " says richard l. betts , president of the philadelphia ymca . for gerald ostrow , the issue cuts both ways . as president of a commercial laundry in pittsburgh , mr. ostrow successfully argued that a tax - exempt laundry run by several nonprofit hospitals wasn't part of the hospitals' charitable mission . yet as a board member of the local jewish community center , mr. ostrow voted for the construction of a tax - exempt health club that will compete with a racquet club owned by a friend . while acknowledging the inconsistency , mr. ostrow says the health - club revenues will replace federal funds that once subsidized community services . in pullman , wash. , gerald brong , a computer store owner , says he nearly went bankrupt after washington state university began to sell computer products . " but they shouldn't get it at the expense of small business . " arguments on both sides have aroused congressional interest . a house ways and means subcommittee has scheduled hearings on the issue later this year . meanwhile , legislation that would limit the tax - exempt activities of nonprofit groups is pending in at least a dozen states . " this back - door approach of forming businesses is what's bothering me , " says ida stabinski , research director for the pennsylvania legislature's small - business committee . " i don't believe a nonprofit in pennsylvania can wear two hats . either you're a nonprofit or a for - profit . " the answer may not be that simple . charitable organizations have been stung by government cutbacks , and increased donations have only partly taken up the slack . charities say they have no choice but to earn more of their own way . some charities have even set up separate profit - making subsidiaries for their most ambitious ventures . last year , for example , magee - womens hospital in pittsburgh opened mothers work , a dress shop and mail - order catalog for pregnant executives . " we thought it was a natural extension of the services we provide , " says a hospital spokeswoman . the increased activity is attracting the attention of the internal revenue service . in -- the last year for which the irs has full data -- nonprofit groups reported total revenues from all sources of about billion . the irs plans to audit groups that filed unrelated business income - tax forms in . some states are moving to restrict untaxed entrepreneurialism . in arizona , for example , state agencies are prohibited from entering markets already served by commercial business . other states are challenging charities to prove that they deserve an exemption . eighteen months ago , the tax assessor for oregon's multnomah county placed the local ymca on the tax rolls when he determined it spent just of its budget on charitable activities . " charities don't have to be limited to serving the poor , but there has to be some element of giving , " says michael j. morris , an attorney for a local health - club owner . the ymca is appealing . even when charities pay taxes , businessmen say it is tough to compete against them . " the halo effect is on their heads and the mantle of goodness is around their shoulders . they have the image that they're not in there for the money but for the public good . " dr. alan berger , a michigan veterinarian , discovered the perils of taking on a nonprofit group when he challenged the tax - exempt status of animal clinics run by two local humane societies . the irs ruled against the vet , although one humane society later decided to convert its clinic into a profit - making -- and tax - paying -- subsidiary anyway . though dr. berger's practice , which had dropped , has recovered , he still remembers how humane - society supporters picketed his office . some even called him an animal - hater . as our own daily drama unreels in the caucus room of the senate office building , we should not forget that our cousin democracy britain is struggling with a scandal of its own . both scandals , theirs and ours , arise from excessive reliance by democratic governments on that most overrated and uncontrollable of all agencies of the state , the secret services . our scandal deals with the question of whether president reagan authorized or permitted illegal acts by members of his administration and especially of his own white house staff . the british scandal deals with allegations by peter wright , a former officer of mi , the british counterintelligence agency , that between and an mi group conspired treasonably to undermine and overthrow the elected british government headed by harold wilson , now lord wilson of rievaulx . this would seem an even worse scandal than ours since , if it took place , it involved an attack not just on the laws but on democracy itself . the president has promised full cooperation with the official investigations . prime minister margaret thatcher has thus far done her best to hush the british scandal up . she is trying to prevent the publication of " spycatcher , " the memoir in which peter wright makes his charges . several london newspapers , especially that excellent new daily the independent , have reprinted the allegations ; instead of being thanked by a grateful country for exposing a possible threat to british democracy , five newspapers are facing legal proceedings instituted by the attorney general ( and members of the house of commons are forbidden by the speaker even to discuss these proceedings ) . newspapers and members of parliament are calling for an official investigation to prove or disprove mr. wright's extraordinary charges . " there can be no cover - up of treason , " said david steel , the leader of the liberal party , " and the secret services cannot be allowed to operate as a state within a state . " but present indications are that mrs. thatcher will succeed in denying parliament and the british people knowledge of whether the grave accusations made against mi are true . according to the independent , the investigation was " instigated " by the notorious james angleton , then chief of the central intelligence agency's counterintelligence branch . the observer says that mr. angleton had a kgb source code - named " oatsleaf " who identified lord wilson as a kgb agent . mr. angleton himself told the sunday times , " we were asked by your mi to supply information about wilson " ( since mr. angleton sees kgb agents everywhere -- he once floated the theory that i was a soviet mole in the kennedy white house -- i have less than total faith in his common sense. ) . mi noted that in the s , as a representative of a firm of timber merchants , lord wilson had made visits to the soviet union . a former mi officer , james miller , told the sunday times that his case officer has assured him that lord wilson was a " soviet agent . " a group of mi zealots undertook -- apparently on their own -- to drive him from office . not many people here believe for a moment that harold wilson was a soviet agent . consequently , the anti - wilson line has been modified . the present mi line is that lord wilson was ok and that the object was not to overthrow him but to protect him from close associates deemed sympathetic to the kgb . the claim is even made that lord wilson granted mi permission to launch a thorough investigation of his somewhat dubious circle . all this naturally increases curiosity about what in the world mi was really doing back in . but mrs. thatcher initially responded to all requests for an official inquiry by citing as sufficient an inquiry made by the labor government in when james callaghan was prime minister . in fact , the investigation was addressed to the narrow question of the alleged bugging of no. downing street and of the prime minister's room in the house of commons and not at all to the wider questions raised by mr. wright's charges . subsequently she claimed that a recent internal investigation by the director general of mi has refuted mr. wright's accusations . mrs. thatcher further argues that she has no ministerial responsibility for events before her own government came to office and that therefore she cannot discuss them . yet in the past she has not hesitated to hold forth to parliament regarding espionage scandals taking place before her government came to office , making statements about anthony blunt ( ) , roger hollis ( ) , and maurice oldfield ( ) . roy jenkins , a social democratic leader , has asked her to repudiate " the extraordinary constitutional doctrine . . . that the activities of a permanent government agency , however monstrous they might be alleged to be , could not be inquired into once there was a change of government . " mrs. thatcher , dodging the question as so often happens during question hour in the commons , replied that she had nothing further to add to the replies she had already given on the subject . oddly enough , the labor party displays little zeal for an official inquiry . it could devote one of its regular opposition debates to the question , but neil kinnock , the labor leader , has reportedly decided to leave mi to his backbenchers . one reason for this bipartisan diffidence is that both parties may feel threatened by an inquiry . the conservative leadership may not want the world to know about the ties of some of its own members to mi and to the cia . the labor leadership may not want the world to know about its own occasional use of mi to combat communist penetration of the labor party nor about some of lord wilson's more unsavory associates . a few mps , notably roy jenkins and merlyn rees , both former home secretaries ( the minister to whom mi very nominally reports ) , are pursuing the question but not getting very far . what most surprises the visiting american is the absence of both parliamentary and public indignation . one can imagine the explosion in washington if it were plausibly charged that an fbi or cia group had set out to overthrow an american administration . on march , i noted in this space mr. rees's cry of frustration : " if it was the united states there would be a proper investigation . there would be hell to pay . " the british reaction is indeed different . after all , as peregrine worsthorne writes in the conservative sunday telegraph , the " plotting was harebrained enough and never got anywhere ; more low comedy than high tragedy " -- so why take it seriously ? why stir things up , injure reputations , demoralize the secret services , shake the people's faith in their masters ? cover - ups are in the british tradition . " they help to prevent unnecessary picking - off of scabs that protect wounds , the re - infection of which could all too easily poison the body politic , " mr. worsthorne says . americans would seem -- from time to time , anyway -- to have a more stringent sense of the accountability of government to congress and to the people . through a written constitution , a bill of rights and the separation of powers , accountability is built into our system as it is not built into the british system . proponents of reform of the constitution , like my esteemed friends of the committee on the constitution system , look askance at the separation of powers and with sentimental enthusiasm on the parliamentary system . as old sam ervin put it so splendidly a decade ago , " one of the great advantages of the three separate branches of government is that it's difficult to corrupt all three at the same time . " mr. schlesinger is albert schweitzer professor of the humanities at the city university of new york and a winner of pulitzer prizes in history and biography . don f. gaston , alan n. cohen and paul r. dupee will go down in sports history for rolling up one of the biggest scores ever . not as athletes , but as controlling partners of the boston celtics , the reigning champions of the national basketball association . messrs . gaston , cohen and dupee sold of the team to the public last december through an offering of limited partnership units listed on the new york stock exchange . they grossed million from the sale -- not bad , considering they paid just million for the team in -- and they still control the franchise . the stock sale looked so sweet that other sports - franchise owners started consulting their financial advisers . but a wave of public offerings may not be in the offing . one damper : public ownership of sporting ventures poses considerable problems for professional leagues and franchises . at the same time , investors may not jump at other offerings as they did at the celtics' . that's because financial analysts increasingly question the investment value of stock in sports franchises . " i don't see them as much of an investment unless you're talking about the greater - fool theory , " says dennis forst , a vice president and leisure - industry analyst for seidler amdec securities . some of the skepticism stems from sport's skimpy track record as an investment . the baltimore orioles were publicly traded until , cbs inc. owned the new york yankees from to , and the seattle supersonics were part of publicly held fni inc. until . currently , green bay packers stock is owned by local residents , and several horse racing or breeding outfits trade publicly . three large companies might be considered sports plays of sorts : gulf & western inc. owns madison square garden , the nba's new york knicks and the new york rangers of the national hockey league . turner broadcasting system inc. owns baseball's atlanta braves and the nba's atlanta hawks . and tribune co. owns the chicago cubs . but the stock market hasn't been comfortable with those sports - related issues that have traded publicly . the franchise sold in for million , almost triple its market value . but mr. hamper notes that it would have been risky to cling to orioles stock in the hope that the club would be sold for more than its market value . the celtics' management insists that stock in their club will win long - term market acceptance . " there's a good return for unit holders , no different than for cable television or anything else , " says mr. gaston , the celtics' chairman . " we just need some history . " the stock is " an attractive investment opportunity " with a good dividend yield -- at yesterday's closing price -- and some growth potential , says edward atorino of smith barney , harris upham & co. , the celtics' underwriter . he cites the team's strong franchise name , ticket demand and broadcast revenue , its potential as a pay - per - view television vehicle and its share of payments by four new nba franchises . the latter could boost the dividend to a share by from the expected this year , he says . the celtics could diversify into other sports properties . but some analysts question whether the team's shares will hold up . the market greeted the celtic units less enthusiastically than the underwriter had expected , offering up only a share -- down from a projected to -- even after the expected first - year distribution was sweetened . since the offering , the shares have dropped to each . christopher melvin of bear , stearns & co. , who helps sports franchises with public financing issues , wonders : " how can there be enough return on equity to justify an investment at these inflated dollars ? " at yesterday's stock price , the franchise has a paper value of million , roughly double the value many industry sources had put on the franchise just before the public offering . even if the investment proves sound , there probably aren't many other sports organizations that could match boston's financial strengths -- or its timing . " you have the legendary team in pro basketball coming off its best financial year ever in a hot stock market , with ownership ties to wall street and new tax law changes that make it even more appealing , " says alan rothenberg , president of the nba's los angeles clippers . many owners are likely to shy away from public offerings because they simply don't want to share control of their franchises . " it's tough enough to have a zillion fans , but to have them as shareholders , that's beyond comprehension , " says norman braman , owner of the national football league's philadelphia eagles . league rules and interests also present barriers . the nfl flatly prohibits public offerings , although it is reviewing the issue . edwin m. durso , executive vice president of major league baseball , fears that publicly held teams might be more likely to relocate , for instance , because their first responsibility would be to shareholders , not to baseball . for the nba , a more immediate concern is the possibility that windfalls from public offerings might stiffen the players union's resolve in current labor talks to eliminate the salary cap . owners credit the cap -- a ceiling on each team's total player payroll -- for much of the league's resurgence in recent years . despite the hurdles , some organizations may push on . the nba's denver nuggets plan offerings ; basketball's los angeles lakers and hockey's edmonton oilers are seriously considering stock sales . the lakers could offer a tempting package , if owner jerry buss includes his other sports - related holdings : hockey's los angeles kings ; the forum , where both teams play ; and a stake in prime ticket , a regional cable tv sports service . the three - year - old summer league hasn't exactly shattered attendance records , but the owner says it will eke out its first profit , of to , this year . he also plans to develop or acquire other leagues and affiliated companies ( one possibility is a t - shirt maker ) . " what you buy with the celtics is the best - run mcdonald's ( franchise ) , " he explains . " with the usbl , you're buying mcdonald's corp . " that hardly seems the case -- at least not yet . mr. meisenheimer was frustrated in a previous attempt to take the usbl public . he withdrew an offering in after receiving pages of comments from regulators on his filing . wheat rallied on rumors the soviets offered to buy one million metric tons of wheat , and soybeans rose on forecasts of dry weather . some wheat contracts on the chicago board of trade and the kansas city board of trade soared to life - of - contract highs as traders reacted to the rumor that the soviets were offering to buy the wheat at a ton . still , at current market prices , such a sale would require a u.s. subsidy of a ton , or million , said richard loewy , an analyst at prudential - bache securities inc. in new york . the size of the subsidy should be a " negative feature , " mr. lowey said . a metric ton is equal to u.s. short tons , or pounds . a soviet offer wouldn't be a big surprise in light of last week's announcement by the agriculture department that the soviets agreed to buy four million tons of subsidized wheat by sept. , analysts said . " but the market took off anyway , " said victor lespinasse , a floor broker with dean witter reynolds inc. in chicago . before the agriculture department announcement , the market fluctuated on rumors that a pact was in the offing . projections that as many as million tons of soviet grain may have been damaged by harsh winter temperatures also boosted the markets , as did predictions of dry weather in the u.s . meanwhile , soybeans for delivery after the harvest reached life - of - contract highs . they could climb as high as a bushel if the long - range forecast for dry weather in june and july proves true , says jim roemer , a weather forecaster with freese - notis weather inc./weather trades inc. in des moines , iowa . the latest six to - day forecast predicts dry and clear weather through much of the midwest , and planting for some crops is ahead of schedule . " it's nice to get it planted fast , but you still have to make it grow , " said mickey luth , an analyst at shearson lehman brothers inc. in chicago . in other futures markets yesterday : . interest rates : prices surged on talk that japanese investors were big buyers in the third and final leg of the treasury's refinancing . short - covering is the buying back of contracts . at the cbot , bonds for june delivery rose / to , after trading as low as / . jeffrey priest , head of fixed income trading at miller tabak hirsch & co. in new york , said bond futures also were boosted by rumors that a large brokerage house didn't buy enough bonds in the auction to fill customer orders and had to make up the difference with purchases elsewhere in the cash market . energy : prices were relatively steady despite a new view that the oil cartel's recent discipline many be softening in spots . tightness in u.s. heating oil supplies and north sea brent crude oil in europe again were the supporting factors , an analyst said . at the new york mercantile exchange , crude oil and oil products closed with slight declines despite a report published in the middle east that the organization of petroleum exporting countries' april output exceeded the agreed quota by barrels , said william o'neill , research director at elders futures inc. in new york . meanwhile , dow jones news service reported the united arab emirates will seek an increase in its quota when opec next meets june . however , dow jones news service said private estimates put uae daily output at million barrels to million a day last month , up from an estimated million to million a day in march . the report of the planned uae request led to speculation that other opec members will seek increases , mr. o'neill said . the uae's daily production capacity is put at four million barrels , he said . copper : tight supplies for near - term delivery continued to support prices , which closed higher . at the commodity exchange in new york , july copper rose cent a pound to cents . it traded as high as cents before profit - taking trimmed the advance . traders were watching the widening " backwardation , " or premium of near months over later months , in both new york and london as a possible indicator of the trend of prices , an analyst said . usually , later prices are higher , partly reflecting the cost of money . as much as of a contract's cost may be borrowed . in new york , though , the may contract traded cent more than july , which in turn traded about cent more than september . and that contract traded cent more than december . the london backwardation may mean tightness in near - term supplies , considered mostly a u.s. condition , also exists in europe , he said . architects and interior designers are skirmishing over who will plan offices , stores and other indoor spaces . until a decade ago , architects had the field pretty much to themselves ; interior designers weren't much more than decorators , choosing draperies and wall colors . but today interior designers are coming closer to doing what architects do . they not only specify fabrics and finishes but also lay out space , divide interiors with nonstructural partitions , plan lighting systems , solve acoustical problems and arrange budgeting , fire - code compliance and project management . where once interior designers may have been regarded as consultants to architects , most now see themselves as independent professionals . now interior designers have begun a national campaign to win licensing . and architects are fighting them . both sides say they have no wish to prevent the other from continuing to practice as it has . and both insist that their main concern is public safety and welfare . but below the surface is a struggle for status and turf that , according to beverly russell , editor in chief of interiors magazine , is " rooted in economics . " for at least the next decade , ms. russell says , the emphasis will be not on erecting new buildings but on renovating existing ones . the struggle began in earnest a year and a half ago , when the american society of interior designers , a professional group with members , committed for a state - by - state drive to lobby legislatures to pass title - registration laws covering interior designers . under such laws , only people who have met certain qualifications -- in this case involving education , experience and a written examination -- may call themselves interior designers . since then , some chapters have decided to press for the more - restrictive practice acts , which set standards to legally perform the service . asid's motivation , says jean richmond , director of governmental and legal relations , is consumer protection . with people practicing interior design , she says , " there are no standards by which the public can judge who's qualified . " the group paints a grim picture of what can happen if unqualified designers get loose in a space . with some billion spent annually on interior - design products and services , there's plenty of room for error . use of flammable and toxic materials threatens lives . poor lighting and acoustics diminish effectiveness . inappropriate furniture gives backaches . the handicapped find access barred . bills are in committee in florida , new york and texas , and are being considered by legislatures in a half - dozen other states . tough as the task of winning state - by - state approval is , it will be tougher because of the architects' vigorous opposition . they too hoist the safety and welfare banner , arguing that interior designers are seeking authority that far exceeds their training and for which only architects and engineers are qualified . they also say the laws would prevent architects from practicing interior design . randolph r. croxton , president of the new york chapter of the american institute of architects , argues that an architect's license assures better judgment by requiring more schooling , more experience and a longer examination than the proposed interior - design license would . he adds : " the innocent projection of the word ' interior ' conjures up the selection of furniture , finishes and accessories that most people assume is the role of the interior designer . mr. croxton says his firm has encountered and corrected illegal work done previously by interior designers . " mechanical and structural deficiencies which have been clearly visible were covered over and in some cases grossly nonconforming ( to safety codes ) work was added . there can be no more eloquent argument for not reducing the standards of licensing . " besides lobbying , architects have been pressing building inspectors not to allow any exceptions to codes requiring an architect's stamp on building permits . asid officials profess to be perplexed . joy adcock , president , says an interior designer " would of course consult an architect " if a situation arose that was beyond his or her competence . " i think the problem is that these architects think we want to become architects , and we don't . i don't know why they're so upset . we just want to keep out those who aren't qualified . " she adds that a " grandfather clause " or other exemption would be provided so that architects could practice interior design . john robinson , an asid member in houston , suggests it may be the architects , not the designers , who are low on qualifications . " most architectural curriculums have no required interiors courses , and those that are offered are limited at best , " he wrote in design west magazine . some architects are at least ambivalent about the licensing . michael mass , managing principal at the new york architectural firm of haines lundberg waehler , says : " the first reaction of some architects who had casually heard about the licensing effort was that it intruded into what they felt was their area . on the other hand , since the interior designers are going to be there anyway , some sort of control in the form of licensing might not be altogether a bad idea . " and some people wonder what all the fuss is about . " hairdressers are licensed and electricians are licensed , " says ritasue siegel , president of ritasue siegel agency inc. , a new york - based design personnel and executive search firm . " all licensing does is set a minimum standard . it doesn't tell you much beyond that . " canadian prime minister brian mulroney achieved a major political breakthrough by negotiating an agreement that settles the longstanding constitutional grievances of quebec . the agreement was hailed by all major political parties . john turner , opposition liberal party leader , termed it " a very significant accomplishment . " the unexpected settlement was reached at a meeting near ottawa of mr. mulroney and the leaders of the country's provinces . quebec's premier robert bourassa said the agreement was " an historic breakthrough " for his province . quebec has boycotted constitutional discussions for the past five years as a protest against constitutional changes that failed to meet the quebec government's demands for special protection for the province's french culture . quebec has had to abide by the constitutional changes , which included a bill of rights , even though it refused to give its assent to them . in a major concession to quebec , mr. mulroney and the provincial premiers recommended that future constitutional interpretations recognize that " quebec constitutes within canada a distinct society . " mr. mulroney had made a constitutional settlement for quebec a major political goal of his conservative government . some analysts said the agreement is the biggest achievement to date of the mulroney administration , which was elected in september . it is expected to boost the morale of the conservative party , which in recent months has been last in political polls . the prospects for an agreement had appeared highly uncertain because of the objections of some provinces to the idea of special constitutional status for quebec . mr. mulroney was able to win broad support for his initiative by agreeing to also take up the constitutional concerns of other provinces on such issues as reforming the senate , the upper chamber of the federal parliament , whose members are appointed . the prime minister agreed that until senate reforms are carried out , future senators will be appointed from lists of candidates provided by provinces . the appointments are currently the prerogative of the prime minister . mr. mulroney received a prolonged ovation from members of parliament friday when he made a statement on the agreement in the house of commons . the changes require the approval of federal and provincial legislatures . prof. peter leslie of queen's university said the agreement was more far reaching than he had expected . he predicted that the provision recognizing quebec as a " distinct society " will involve extensive interpretation by the courts . the pact was made possible partly because of more harmonious relations between quebec and the federal government in recent years . in the late s and early s , mr. trudeau's liberal government quarreled frequently on constitutional issues with the separatist parti quebecois government of rene levesque . mr. leslie predicted that a proposed provision covering federal spending power would oblige the government to enter into extensive negotiations with individual provinces before introducing new programs . the provision stipulates that , subject to conditions , the federal government must provide " reasonable compensation " to any province that doesn't participate in a future national shared - cost program in an area of exclusive provincial jurisdiction . the conditions for compensation require a province to undertake its own program " compatible with national objectives . " an " independent prosecutor " is a constitutional oxymoron , we've argued , because the device infringes on the executive branch's authority to enforce the laws . congress is now starting to sense that independent prosecutors also infringe on its oversight function . lawrence walsh's criminal investigations are proving to be a big barrier to disclosing the truth . with congressional testimony about to begin next week , this conflict is rapidly surfacing . " there are too many important issues facing the country for the american people to wait while { walsh's } investigation goes on ad nauseam , " sen. warren rudman ( r. , n.h. ) , the vice chairman of the senate panel investigating iranamok , told the washington post . " the train is leaving the station , " he said . " we're ready to roll and judge walsh has to understand that . " mr. walsh's first accomplishment only serves to underline the concern . he got carl channell to cop a plea on internal revenue code section ( c ) ( ) . the criminal information mr. walsh filed charged that mr. channell " caused to be filed with the irs a return of organization exempt from income tax . " can the iranamok fuss be reduced to violating the tax code ? this is certainly not to say that possible abuse of tax - exempt status is not a legitimate issue . indeed , we'd be interested in an irs investigation of the organizations that collect funds to help the sandinistas , the marxist - leninist government of ethiopia and other such regimes that can hardly be termed charitable . whether middlemen pocketed money intended for the contras is certainly a valid subject for mr. walsh to pursue , but we doubt that ollie north and john poindexter were out to enrich themselves . the larger point is that a violation of the tax code for charities is unquestionably a penny - ante violation in the wider context of iranamok . in his recent report to congress mr. walsh wrote that his " primary responsibility " is not " to develop for the public a knowledge of what occurred . " instead , " the process requires the identification of individuals and proof beyond a reasonable doubt of the participation of each . in some cases it is not sufficient merely to prove an act , it is also necessary to prove intent . the investigation of this complex series of transactions must be extensive . " he has said it could be mid - before any trials begin . sen. rudman , a former new hampshire attorney general , says the evidence he's seen indicates that the only significant crime that could posibly arise from iranamok is some obstruction of justice claim arising from destroying documents . " if they go with some grand , wild conspiracy case , you're going to have a hell of a time proving it . " so what we have is a criminal investigation that is unlikely to find any crimes the justice department couldn't handle as routine business , but that has prevented the president , congress and the normal political process from exposing the facts to the public . why ? mostly because while the independent prosecutor is independent in name and perhaps in his person , his appointment is a political weapon in intent . the liberals lost the political debate on whether to fund the contras . now they're delighted to have contra supporters dragged through the morass of the legal system . the beginning of any solution is for ronald reagan to look in the mirror and admit that this was a mistake . caesars world inc. said its board " vigorously opposes " martin t. sosnoff's solicitation of holder consent to remove four inside directors . separately , caesars plans to build a million shopping complex at its caesars palace hotel - casino in las vegas , nev . in a letter to holders , caesars chairman henry gluck and president j. terrence lanni said the board believes that " mr . sosnoff's ultimate objective is to buy the company as cheaply as possible . in furtherance of this goal , we believe that mr. sosnoff's ' consent ' proxy fight is intended primarily to cause uncertainty and chaos among our shareholders . " last week , the new york investor said in a letter to holders that he seeks to remove from caesars's nine - member board messrs . gluck and lanni ; philip ball , senior vice president and general counsel ; and m. peter schweitzer , vice chairman . as reported previously , mr. sosnoff is waging a - a - share , or million , takeover battle for the operator of casino - hotels . to fend off his advances , caesars earlier this month unveiled a recapitalization plan that offers holders a share and stock in a more highly leveraged caesars . caesars said it would incur about million of new debt under the recapitalization . the cost of the las vegas project will be borne by gordon co. of los angeles , a developer of retail properties , caesars said . gordon will operate the facility and lease the property from caesars palace . the complex , which will have a roman theme , will include square feet of retail space , parking facilities for more than cars , and a / - acre open - air " roman village bazaar , " caesars said . the first phase of the shopping complex is scheduled for completion in august . as part of the new development , caesars said it plans its own additional million expansion to add square feet of casino space , a - seat restaurant and various food and beverage outlets . caesars will finance that expansion and expects to complete it in early . the european community commission proposed banning insider trading in its member states . the proposal , which could run into member opposition , also calls for increased cooperation among financial authorities to prevent the practice . it would require ec nations to outlaw insider trading but is sufficiently general to allow member states to decide how to prevent it , commission officials said . given the trend toward international trading , " it is essential that the european investor has the same degree of protection against illegal practices on all european stock markets , " the commission said in a statement . the move is one of several commission initiatives aimed at creating a common market in financial services by . the proposal defines inside information as confidential knowledge that if made public would " have a significant effect on the price of a stock . " it covers those who pass inside information as well as those who receive it . the proposal says traders with inside information should be banned from profiting by selling or buying stock based on their knowledge , passing their information to a third party , and recommending that a third party buy or sell stocks based on inside information . belgium , ireland and the netherlands expect to introduce measures on the issue . west germany has a series of voluntary rules under which stock traders agree not to use inside information . however , the other five ec countries -- italy , luxembourg , spain , portugal and greece -- have no rules on the matter . it's unlikely that the rivalry between anderson , s.c. , and bangor , maine , will ever have the epic allure of that between sparta and athens . but then again , it's a safe bet that the two greek cities used artillery somewhat stronger than long johns and a dirty wool hat . that's what anderson sent recently to the folks in bangor as part of its " beat bangor " campaign , which since february has spawned a lively exchange of taunts , letters and strange gifts . what sparked the drive was anderson's distress at finding itself ranked in rand mcnally & co.'s latest " places rated alamanc , " a comparison of metropolitan areas . charles mcfall , president of anderson's chamber of commerce , says the city was searching for a way to boost morale when a local reporter who'd moved down from maine " just showed up and said , 'hey , wait a minute ! the quality of life here in anderson is much better than in bangor.' . " bangor had rated a relatively lofty . ( no. was pittsburgh ) . things escalated quickly after anderson fired off the first challenge . because the gifts are worthless to anderson , mr. mcfall says , the city plans to auction them off . the proceeds , along with raised last month at a beat bangor bash , will go toward financing a hoped - for visit by rand mcnally , so that the area can be reevaluated . mr. mcfall says anderson also has gifts for bangor , including a " fanny warmer " and a moose brush " because bangor's promotional material has a moose wading in a lake ( and we want to ) make him look better . " rand mcnally says it has no intention of visiting anderson , since the study is done strictly by statistics . but anderson may get some company , anyway : mr. mcfall says the cities plan to exchange delegations this fall . bangor is " really quite anxious for them to see why we did rate so well , " says elizabeth scottie stowell , president of the greater bangor chamber of commerce . bangor's climate , however , may put a chill on things . " we're having trouble finding long - sleeved shirts down here , " says mr. mcfall . state utility regulators are chipping away at the ceilings that historically have been placed on phone - company earnings . recently , a few states have approved cuts in the price of phone service that will let companies earn more than their allowed rate of return . as a result , phone - company shareholders could be in for larger rewards than in the past . at the same time , customers are getting big reductions in their phone bills , and there is the promise of stabilized prices for basic phone service for at least the rest of the decade . in new york earlier this month , utility regulators , politicians , consumer groups and nynex corp.'s new york telephone co. unit were the first to reach such a milestone agreement . wisconsin , where an ameritech unit operates , proposed a similar plan last week . another proposal is working its way through the vermont state legislature . the move to this type of agreement began last year in california , when pacific telesis group proposed a plan that would let it earn above its allowed rate and retain some of the excess . for several reasons , the pacific telesis plan was withdrawn , but it could be resubmitted this year . " most state regulators realize that traditional regulation doesn't work well in the phone industry anymore , " says louise mccarren , chairman of the vermont public service board . the new rate plans are emerging from regulatory reviews of phone - company earnings levels following the adoption of the nation's new tax structure . the regional bells are paying a lower tax rate than previously , which is producing an earnings windfall . for half a century or longer , regulators have pursued " rate - based " regulation . under that approach , they decided what the return on equity should be for the phone companies , and expenses were then estimated . regulators then could determine the revenue the phone company needed to collect to earn its allowed rate of return . regulators and academicians " have been talking about alternatives to rate - base regulation for years , " says john bain , an analyst with shearson lehman brothers inc . " the existing process is costly , time consuming and probably not accurate . " the phone company's rate of return remains at . but it may keep half of any profit that exceeds that level while sharing the other half with customers . heretofore , the company might have been ordered to return the full amount to customers . after reading of the new york plan , the chairman of the wisconsin public service commission proposed a similar plan for wisconsin bell , an ameritech unit . the regulators reduced the allowed rate of return to from . however , the plan allows the phone company to retain all profit it earns up to . it must share - any profit from to . the plan represents " a loosening of some of the strict constraints of rate - base regulation , " says richard witte , wisconsin's division staff manager for regulatory affairs . because some phone companies are already earning their allowed rate of return , profit growth has slowed . so , any opportunity for the companies to exceed the allowed rate could be a boon for shareholders . vermont dubs its alternative the " social contract " approach . under the proposed legislative measure , the price of basic local phone service basically would remain stable for a certain period . prices of all other services would be deregulated . she says the approach places the maximum amount of competitive tension on the phone company . because there is no regulated ceiling on profit , the company has the incentive to provide new services and products and to operate efficiently . at the same time , ms. mccarren adds , the company can no longer count on regulators to rescue it through price increases on basic phone service if its competitive ventures don't pay off . many industry analysts concur that such plans provide an incentive for the phone companies to become more efficient and to offer new products and services . but some don't believe all state utility regulators will embrace the trend . robert morris iii , an analyst with prudential - bache securities inc. , contends the proposals will be restricted to the northeast and midwest . henry gluck was in las vegas hosting a lavish , televised celebration of the th anniversary of caesars palace hotel - casino last month when he first learned of investor martin t. sosnoff's hostile tender offer for his company . the caesars world inc. chairman didn't want to spoil the fun or tip off anyone that there was serious business to deal with . so instead of walking off the banquet hall platform to take telephone calls from mr. sosnoff and caesars officials , the tuxedo - clad , normally reserved chief executive officer crawled on his hands and knees behind the dais to get to a phone . " the people around me must have thought i had a weak bladder , " he jokes . fighting off an unfriendly takeover bid while trying to convince colleagues , customers and shareholders that a company is still alive and well can be a difficult balancing act for a chief executive . but mr. gluck is determined not to let the battle bring caesars world to its knees . the effort to maintain a focus on ongoing operations while dealing with the tender offer has been a test of stamina for the - year - old mr. gluck . the plan was announced the day before the heavily publicized middleweight boxing match between sugar ray leonard and marvin hagler in the parking lot at caesars palace -- by far the company's biggest special event of the year . the timing may not have been coincidental . " i felt if we had something meaningful to offer shareholders , we should present it when there was more publicity and notoriety about caesars than any other time , " mr. gluck says . that wasn't an easy task . mr. gluck had a marathon week leading up to the monday , april , fight . he led a three - day corporate strategic planning meeting , attended the drexel burnham lambert inc. junk bond conference in beverly hills , calif. , and juggled meetings in between with caesars' financial advisers . ( mr. gluck also had been scheduled to give a speech at the bond conference , but bowed out because " the company i had planned to talk about might be a different - looking company soon " ) . sorry , mr. gluck responded . the weekend was even more intense . mr. gluck began it in los angeles with an all - day meeting with lawyers saturday , traveled to new york for an emergency powwow with caesars directors to present the recapitalization plan , did telephone interviews with financial reporters , then flew back to las vegas late sunday night to do a television interview to promote the leonard - hagler match . by then , mr. gluck had been working nonstop for almost hours , and the fatigue was beginning to show . he considered not doing the televison spot , but caesars' public relations director convinced mr. gluck it was important to show he was in command of the situation ; the executive was even persuaded to let a celebrity makeup artist hide the circles under his eyes in time for the p.m. news . working long hours is nothing new for mr. gluck , who says he's never been able to balance his career with personal pursuits very well . but mr. gluck did force himself to take one big chunk of time off during his career . he was a millionaire at age when he retired as president of monogram industries inc. , a los angeles - based industrial products conglomerate , in . " i'd worked all my life and i'd never stopped to smell the flowers , " says mr. gluck , who began his career holding down jobs as a waiter and launching a small advertising specialty business while he was a student at the wharton school at the university of pennsylvania . in the years between monogram and caesars world , mr. gluck says he did almost everything he intended to do when he retired , including learning to ski , improving his tennis game , taking extended vacations to europe with his wife and children , and serving on various educational committees . his one regret is that he never finished writing a satirical novel about business , although he still has the manuscript and hopes to complete it someday . mr. gluck initially was seen as an odd choice to head caesars , although he had been a director of the gambling concern for a year . mr. gluck was approached for the job because of his good reputation in the business community and strong ties with banks and other financial institutions . he quickly shook up the company by firing many executives ; others quit in protest at what they viewed as mr. gluck's meddling . the executive also restructured the company's finances . despite his initial unease about being in the gambling business , mr. gluck appears to enjoy it thoroughly now . for a few hours after the television interview on the eve of the leonard - hagler match , and despite his being up for hours , mr. gluck seemed almost rejuvenated as he strolled the casino floor greeting the high rollers and celebrities in town for the big fight . " the toughest challenge in all of this . . . is to run the company the way it's been running , " he says . niagara mohawk power corp. and four other utilities , hurt by months of delay in opening the nine mile nuclear power plant , filed a million suit against three companies alleged to be responsible for safety - valve design flaws . niagara and its partners filed suit in new york state supreme court alleging breach of contract and engineering negligence on the part of gulf & western inc. ; wickes manufacturing co. and crosby valve & gage co . niagara said the million claim is a preliminary estimate of the added cost -- reportedly at million a month -- of replacing the supposedly faulty valves and opening the plant later than expected . the nuclear plant had been slated to open in september , but the safety valves failed testing for the fourth time last month . that prompted the suit from the plant's five co - owners , which by new york public service commission rules aren't allowed to raise customer utility rates to fund the excess costs . a spokesman for gulf & western , a new york entertainment and financial - services concern , denied any liability . " niagara mohawk appears to be trying to shift their responsibilities to others , " he said . the g&w spokesman said the valves underwent " substantial modifications by others " since then . in santa monica , calif. , wickes cos. , parent of wickes manufacturing , said it doesn't believe it has any " responsibility in this matter , even if there is a problem " with the valve system . wickes said that the unit of gulf & western involved in the claim was sold by g&w prior to wickes's purchase in september of the gulf & western consumer and industrial products group . crosby valve & gage is a wrentham , mass. , unit of moorco international inc. company officials couldn't be reached for comment . niagara mohawk's stake in the nine mile plant near oswego , n.y. , makes it the biggest partner in the venture . long island lighting co. and new york state electric & gas corp. each own an stake ; rochester gas & electric corp. owns of the plant and central hudson gas & electric corp.'s stake is . the original valves are said to have failed to meet contract specifications and licensing requirements in part because they leak water more quickly than federal rules allow . international paper co.'s shareholders rejected a major challenge to the company's " poison pill " anti - takeover provision . separately , the paper company reported first - quarter earnings more than tripled to million , or a share , from the year earlier million , or cents a share . sales rose to billion from billion . the latest quarter includes results of hammermill paper co. , which international paper acquired in late . john georges , chairman and chief executive officer , predicted there would be more " favorable year - to - year comparisons " in the second quarter . meanwhile , international paper's directors approved a - for - stock split . international paper's annual meeting was the first of more than companies who plan to place a challenge to poison pill measures before their shareholders this spring . some big institutional investors are campaigning against this common anti - takeover provision , arguing that it can hurt shareholder value . in general , poison pills work by giving shareholders rights to buy other securities at cut - rate prices if a hostile takeover bid arises . these rights , which can be redeemed for a token price if management wishes , effectively make hostile takeovers prohibitively expensive . the challenge was brought by the college retirement equities fund , a large pension fund that owns more than international paper shares . allowing for shares that didn't vote , about of shares voting sided with the big retirement fund . both the fund and international paper claimed victory after the vote . " we're very comfortable with the vote , " said james melican , international paper's general counsel . but richard schlefer , a fund investment official , said his group's proposal attracted far more votes than the to that outside shareholders usually get . " we got more than we solicited , " he added . still , proxy solicitors said international paper was able to rally more holders to its side than they had expected . " a lot of institutions were expected to vote with ( the retirement fund ) and that could have been a substantial problem , " said john gavin , an executive vice president at d.f. king & co. , a proxy firm . " but management did a good job of getting its side across . " mr. gavin predicted that future poison - pill votes would " probably stay around this range . the number of votes ( against management ) shouldn't increase , and it might decline , " he added . so cref's proposal specifically asked international paper to put its poison pill to a shareholder vote at a later date . it was unclear whether international paper would have been obliged to take any action if the majority of holders had voted with cref . both companies and big institutional investors have attached considerable importance to the poison - pill battle . in international paper's case , top executives wrote to more than other companies , asking them for voting support on any international paper shares that their pension plans owned . meanwhile , cref fought a six - month legal battle with international paper , just to get its proposal on the shareholder ballot of the paper company's annual meeting yesterday . boston five cents savings bank and neworld bank for savings agreed to merge in a stock swap valued at more than million . the merger , which will result in the largest savings bank in massachusetts , adds a twist to the takeover phenomenon that has swept new england banking since mid - . " unlike many recent combinations , this merger has no acquisition premium associated with it , " said peter j. blampied , boston five's president . in what both banks term a " merger of equals , " the combined bank will keep the name boston five cents savings bank and operate under a new holding company , boston five bancorp . the combined firm will have assets of billion and a market value of roughly million , based on current share prices . officials said the merger could take six months to be cleared by regulators . under the merger agreement , for each share of existing stock , neworld shareholders will receive one share of the new holding company and boston five holders will receive shares . in addition , in a move to discourage unfriendly suitors , each institution issued an option to the other to purchase as much as of its stock . boston five's stock closed yesterday at a share , down . neworld shares closed at , down . the price decline evidently reflected disappointment among investors who had regarded the thrifts as likely acquisition targets of bigger banks , according to james moynihan , banking industry specialist at moseley securities corp . robert j. spiller , the - year - old chairman and chief executive officer of boston five , will become chairman of the new boston five bancorp . james m. oates , , president and chief executive of neworld bank , will become president and chief executive , and peter j. blampied , , president of boston five , will become vice chairman and chief operating officer . in a news conference , the executives cited a " natural fit " of boston five's strength in real estate lending and neworld's emphasis on commercial lending . mr. oates said it is likely that neworld's headquarters building in boston will be sold after the merger . according to your page - one story " dissimilar debtors " ( march ) mexico is about to fall into total economic and political collapse . the population has lost all confidence in the future of the country . poverty and desperation reign in a nation whose political system is worn out . these are only some of the sophisms that your prestigious newspaper has been insistently publishing in many articles through the years of the mexican financial crisis . at the same time , persistently disproving the mistaken predictions of many of your reporters , mexico has maintained its political stability , and has persuaded the international financial community as well as private investors to continue channeling money into a country that , according to you , has no future . moreover , notwithstanding the earthquake and the drop in oil prices , the mexican people continue to work successfully toward the solution of their problems . as a result , private investors , bankers and foreign governments are supporting with new resources the mexican government's realistic program of adjustment , economic restructuring and growth . the investors have undoubtedly arrived at their decision after a careful analysis of medium- and long - term mexican economic trends . your reporter writes about a country he does not seem to understand . practicing medicine these days can bring more aggravation than satisfaction . alan zelicoff , an internist in albuquerque , n.m. , spends much of his - hour workweek fighting with bureaucrats and administrators . he has been practicing five years but still has about of medical - school loans and related debts to repay . he is miserable and depressed . " i feel deceived , " says the - year - old doctor . " if someone had told me that this is what it would be like , i never would have done it . " roberta berrien , , a physician in northampton , mass. , still believes in making house calls . but she often gets yelled at by patients . " i'm standing on my head for them , but i don't feel appreciated , " she says . she won't put up with it much longer ; she has just accepted a job effective in july as the head of a university health service . richard e. stiles sr. , , of winchester , mass. , quit in frustration after more than years as a urologist . he had become so distrustful that he was often ordering lab studies and x - rays for legal documentation rather than for diagnosis . he had expected to end his urology practice gradually , then consult with younger doctors on their cases . but , fed up , he retired two years ago . " once , being a doctor was a noble profession , " he says . " but in the last years , it became just a job . " many doctors besides these three have become disenchanted with their calling . for them , medicine as an art is vanishing and the paper work is suffocating . disputes with insurers and government agencies eat up time and energy . malpractice suits are a constant threat . the once - sacred relationship between doctor and patient has deteriorated in many cases into an impersonal -- and often adversarial -- business transaction . doctors feel reduced to the role of vendors . certainly , the changes that produce this feeling have produced benefits as well -- a wider choice of providers , for example , and a tighter rein on medical bills . legislators and consumer advocates note , too , that many of the regulations were prompted by physicians' misconduct and refusal to regulate themselves . and they contend that the threat of malpractice liability helps to ensure better care . even some doctors find little merit in their colleagues' complaints . they note that physicians' incomes , which average annually , are still far above most people's . despite the attendant hardships , they say , it is still a privilege to be a doctor . dr. zelicoff finds that he and his colleagues are meeting several hours a week to discuss such things as purchasing , marketing strategies and new income sources . " not only am i uninterested in this task ; i am completely unprepared for it , " dr. zelicoff says . " yet if we aren't aggressive in the marketplace , we will be unable to practice the skills we spent eight years perfecting . " no one knows exactly how many doctors are disaffected . comprehensive statistics aren't available , but there are many indications that the disillusionment is widespread . more young doctors are quitting their practices , and more middle - aged and older doctors are switching careers or retiring early . the american college of obstetricians and gynecologists says that one - eighth of its members dropped the obstetrics side of their specialty in , a rise from the dropout rate two years earlier . officials of the organization attribute the departures to frustration over rising malpractice - insurance premiums and greater liability risks . obstetrics is the specialty hardest hit by malpractice suits . a member of the insurer's board calls the retirements a response to stricter malpractice - policy terms and other frustrations . the massachusetts medical society says an informal survey of physicians found that recently decided to retire early or leave medicine or make serious changes in their practices . nationally , the physician executive management center , which counsels doctors who want to switch to other careers , says the number of doctors seeking its advice has quadrupled over the past five years . similarly , membership in the american academy of medical directors , an organization of physicians who are getting involved in the business of health - care management , has risen to this year from three years ago . " i can't remember a time when there's been more discomfort and soul - searching , " says arnold relman , who travels around the country speaking to thousands of physicians every year as editor of the new england journal of medicine . doctors now compete for patients with hmos , or health - maintenance organizations , and other group practices . also , practitioners are subject to more regulations than before , another erosion of their autonomy . throughout the country , the government's medicare guidelines called drgs , for diagnosis - related groups , dictate how much hospitals are paid to treat medicare patients for most illnesses . these guidelines determine , in effect , how long patients are hospitalized . doctors view the rules as a desecration of the standard of individual care . " it becomes a matter of treating arthritis in general , rather than arthritis in mrs. smith , and doctors don't like that , " says leon eisenberg , professor of social medicine at harvard medical school . some in the profession worry that the quality of care will decline if large numbers of doctors leave at the height of their talent or if the brightest students choose other professions because of the burdens of practicing medicine . " we can't continuously clip at the ankles of the profession and pretend that it doesn't have consequences , " says paul batalden , a retired doctor and former government health official who now works for hospital corp. of america . reforms in medical care , he says , can't be allowed to " destroy the morale of those responsible for providing it . " dr. stiles , the retired urologist , recalls a happier era . thirty years ago , during what he considers " the golden days of medicine , " one of his patients had bladder cancer . techniques for treatment weren't well developed then , so dr. stiles and his colleagues decided to try something experimental : they burned the inside of the bladder to destroy the tumor . at the time , dr. stiles thought the patient's prognosis was poor . but she survived the operation and is still alive today . " she sends me a christmas card every year , " dr. stiles says proudly . " that sort of outcome is tremendously satisfying and exciting for a doctor . " in more recent years , dr. stiles wouldn't have dreamed of taking such a bold step . although he was sued only once in his entire career , he came to feel that he was at the mercy of his patients and his insurer . as he grew more wary and took extra record - keeping precautions , his insurer became more timid . dr. stiles believed that the lawsuit filed against him was unjustified . the decision dismayed him . says dr. stiles , " it felt like a surrender . " younger doctors complain of a different kind of surrender . five years ago , jeffrey botkin was enthusiastic when he finished his pediatrics residency and joined a - doctor practice in boulder , colo . as part of the group practice , he expected to use the latest techniques in pediatric care , and he knew he wouldn't be encumbered by bookkeeping chores . but by the end of his fourth year , dr. botkin's hopes had been dashed . though he had spent his residency focusing on serious childhood illnesses , most of the children he treated in practice were healthy . moreover , he was expected to see as many patients as possible . so every time he diagnosed a case of diabetes or encountered a patient with some other interesting ailment , he referred the case to the endocrinologist or another specialist in his group , instead of treating the patient himself . " but in my practice , those skills were irrelevant . " increasingly , it became difficult for him to retain information about advancements in treatment he read about in medical journals . frustrated and bored , he left his practice and enrolled in johns hopkins university for a master's degree in public health . " i knew private practice would be different , " he says , " but i didn't realize the extent to which it would become routine . " for other doctors , even the financial rewards of practicing medicine are disappearing . dr. berrien , the practitioner who still believes in making house calls , works longer hours but earns significantly less than her income of . as the main breadwinner for her family of four , she worries about the strain of financing a college education for her children and her own retirement . her new job , at the university of maine at orono , won't pay any more than she now makes , but she is looking forward to a more stable income and fewer irritations . dr. berrien used to have two partners in her internal - medicine practice . the group treated hundreds of patients every year and the office manager handled the receptionist and bookkeeping chores for all of them . but the paper work has mounted so much lately that her office manager regularly works overtime just to keep up with the finances . the doctor says her fees often get mired in the billing bureaucracy . typically , she bills patients , who tell her to bill the insurer or some other third party . if the insurance company refuses to pay , she must rebill the patient . moreover , some health plans don't reimburse dr. berrien for the full cost of her services . in many cases , she must accept as full payment for her office - visit charge . the process is frustrating and expensive . " how can i run a business like this ? " she asks . but money is only part of the problem . dr. berrien says the emotional rewards of caring for sick people are also vanishing . patients loudly complain to her when their health insurers refuse to pay their medical bills or when they are unhappy with hospital and laboratory fees . richard j. schilling was so apprehensive about red tape that he gave up his surgical practice in bloomington , ind. , after years . dr. schilling was and at the height of his career when he stopped practicing five years ago . he and his wife live comfortably from investment income in a lakeside home in traverse city , mich . to occupy his time when he isn't abroad , he fishes , sails and plays with his grandchildren . he can't resume his practice part time because his income wouldn't cover the malpractice insurance . " there doesn't seem to be a place for me anymore , " he says . as you may have noticed , the ranks of presidential candidates have lately been thinning , especially among democrats . the best known dropout is gov. mario cuomo of new york , unless you count ted kennedy , the perennial might - have - been . others who plan to rest , not run , include sens . bill bradley of new jersey and sam nunn of georgia , and chuck robb , former governor of virginia . but not to worry . we're in no danger of holding an election with no entries to bet on . the democrats still have gary hart , richard gephardt of missouri , and bruce babbitt of arizona , as well as the rev. jesse jackson . the republicans have vice president george bush , rep. jack kemp and of course alexander haig . so one way or another , come january somebody new will move into the white house , and good luck to him . he'll need it . in fact , i'm not puzzled by the outbreak of reluctant candidates . what i wonder about is why anybody wants to be president at all . it's true that the president's house is comfortable enough if you don't mind sightseers tramping around it all day . there can be a certain pleasure , too , in hearing " hail to the chief " and having people stand up when you make an entrance . altogether there's plenty of panoply that goes with the office , and you're sure of a mention in the history books . all the same , recent occupants of that famous house haven't had what i would call a happy time . the last one to serve two terms and leave with the plaudits of his fellow citizens was dwight eisenhower , and his first inauguration was nearly years ago . those were the last tranquil years ( mostly ) for the presidency . perhaps john kennedy would have ended his term in honored glory were it not for that day in dallas . yet he had already had his woes , being insulted by khrushchev in vienna and being burned by the bay of pigs debacle . indeed , the reason he was in dallas that fatal day was that he was in political trouble . his immediate successors fared worse politically . richard nixon was actually driven from office to escape impeachment . gerald ford , our only never - elected president , wasn't driven from office . he was just rejected by the voters . so too , after one term , was jimmy carter , who followed him . both were the nicest men you'd ever want to know , but both were harassed by the slings and arrows that wound the pride if not the flesh . that brings us to ronald reagan . his first four years were certainly successful and he appears to have enjoyed the office , even reveling in it as no man has since possibly franklin roosevelt . he's by nature a blithe spirit and my impression is that for him the office was fun , more fun than he got out of any hollywood role . up to now , that is . my guess is that the hullabaloo over irangate ( or whatever you call it ) will pass , but it certainly hasn't been fun for either mr. reagan or his wife . yet just two years ago -- remember ? -- he was reelected by a landslide . treacherous things , landslides . lyndon johnson had one and so did richard nixon , and look what happened to them . some people have suggested that overwhelming victories pose the greatest danger , bringing on a touch of hubris in the victors that leads them to do things that get them wounded . and i guess it is a heady thing to be chosen by the populace as our most eminent citizen . my own thought is somewhat different . it arises from the ambivalent feeling we have always shown toward our presidents . on the one hand , we revere the office and want to honor its holder . on the other hand , we also want to remind him he's just another citizen serving at our pleasure . so almost as soon as he's elected we want to see him " cut down to size , " reminding him of the fragility of his eminence . this makes him vulnerable to his political opponents . as with so many things , this all began with george washington . honored by unanimous choice as our first president , he was no sooner installed than he began to be picked at and pummeled from all sides . so much so that at last he retired in disgust to mount vernon . woodrow wilson and the great fdr didn't escape their whippings either . as a matter of fact , i can't think of any president who did . a president's lot is simply not a happy one . nor is that of his wife and children , or in some cases even his dog . to all these woes of office modern times have added the ignominy of getting there . william mckinley was the last candidate to win it by sitting on his front porch ignoring the hustings . today's would - be president must be about morning and night all over the country begging not only for votes but for money , the essential oil for any campaign today . and should he lose , he must still go a - begging to pay off his debts . the whole process must be demeaning to any prideful man . taken all and all , that's why i'm not surprised by the dropouts or by the worthies who never even consider offering themselves for the presidency . as he was being led away by an enthusiastic crowd , he was heard to remark , " if it warn't for the honor of the thing i'd just as leave do without it . " mr. royster is editor emeritus of the journal . brazil may use suspended interest payments owed to foreign banks to fund debt - equity swaps , finance minister dilson funaro said . since it suspended interest payments on an estimated billion of foreign bank debt on feb. , brazil has been paying interest it owes foreign banks into an account at its central bank . in debt - equity swaps , banks exchange foreign currency debt that they are owed for local currency to be put into equity investments in the debtor country . the equity investments are either made by the banks themselves or by multinational companies that buy the banks' debt or local currency . such transactions usually involve discounting the original foreign - currency bank debt . " i really believe it's a way and part of a solution , " said mr. funaro , addressing a group of senior executives of u.s. businesses at the council of the americas . commenting on debt - equity swaps , he said that for the moment brazil is considering using only the interest due to foreign creditor banks since the moratorium to fund the swaps . " it's a question of getting them to sit down and talk to us , " said one , adding he feels that the brazilians aren't yet prepared to negotiate seriously with the banks . brazilian economic growth has averaged a year in the past years , and should continue to do so through , mr. funaro said , provided there is sufficient investment in the country and that there isn't a growth in protectionism . mr. funaro blamed a shortage of imports for brazil's recent surge in inflation , which is now running at an annualized rate of . " last year we needed to import billion to billion more , and ( then ) inflation would have been much less , " he claimed . imports totaled billion annually up to , but last year were only billion , mr. funaro said . u.s. bank economists are generally skeptical about such an explanation for brazil's high inflation . recent strikes also are a result of the upsurge in inflation , mr. funaro said . " they always come back when inflation comes back , " he said . meanwhile , central bank governor francisco gros will begin talks here friday with brazil's main creditor banks . mr. guerreiro's task will be to seek diplomatic support for brazil's debt negotiating staff and also " to define a new forum , " the government news agency said . " the debt discussions of the past three or four years are a disaster , " mr. funaro said in his speech . " the solution doesn't only lie on the doorsteps of the debtors , but also at the door of the creditors , " he said . but a senior u.s. banker at the meeting asserted that " the message hasn't changed . " mr. funaro still is intent on changing the way that international debt problems are worked out , the banker added . all nine justices of the u.s. supreme court heaved the lighted dynamite of pennzoil v . texaco back to texas yesterday . they told their colleagues in the texas courts to decide how big a bond texaco must post to appeal pennzoil's billion judgment . in essence the supreme court yesterday gave texas one last chance to fix the mess it's created . after losing at trial in texas , texaco was faced with posting an billion bond to appeal the ruling because the state requires a bond equal to the damage award . texaco knew judge solomon casseb jr. had botched the jury instructions and was confident that in time a court would come to its rescue . but posting a billion bond would cripple its normal operations and might mean bankruptcy . instead of asking the texas courts to set aside the bond requirement , texaco went into federal court , invoking the constitutional issue of due process . its claim was that if the bond stood , it might not be in business long enough to appeal . a new york federal court lowered the bond to billion , and the second circuit agreed . texaco can ask the federal courts for help only when it runs out of appeals in texas . the legal reasoning is surprising because it's been so long since the high court based a holding on states' rights . the fact is that the opinion signed by five justices has an easily deciphered message that is aimed squarely at the texas justices : " the texas courts may well accept texaco's challenge on state constitutional grounds , obviating the need for consideration of the federal constitutional issues . " hint , hint . translation : " we're not saying texas must relieve texaco of the bond , but that's the only sure way for the state's judicial system to save face . " some of the concurring opinions went further . justice brennan , joined by justice marshall , felt obliged to launch a broadside against economic civil rights . they claimed that " the underlying issues in this case -- arising from a commercial dispute -- do not involve fundamental constitutional rights . " texaco raised the due process , equal protection and full faith and credit clauses , which last we looked were rights granted everyone , including corporations . texaco shares fell yesterday to pennzoil's advance of . it's unclear whether pennzoil will demand the full bond or put liens on texaco property . no one knows how quickly the texas courts will respond to texaco's appeal of the bond , or how they will eventually rule . there is only one ray of light for texaco : it has the best of the arguments on the merits . the supreme court avoided the key issue : did pennzoil have a legally binding contract to buy getty before texaco stole away the bride ? as we've written , judge casseb massacred the common law when he held that pennzoil's agreement in principle " subject to a definitive merger agreement " with getty was the same thing as a legally binding agreement . our lay opinion is in good company . federal judge charles brieant called the award " so absurd , so impractical and so expensive that it hardly bears discussion . " he said any damages would be in the million range . earlier this month , seventh circuit judge frank easterbrook dismissed a similar case on summary judgment , emphasizing that in inherently complex transactions like mergers " the parties should be able to choose with precision the point at which they can no longer back out . " all eyes are now upon texas . texaco already has appealed the merits of the case to the state supreme court . the justices can save themselves the embarrassment of review by federal courts if they do now what judge casseb should have done two years ago . they could take judicial notice of the fact that another state's law applies and " certify " the case as one for new york courts . even if the bond requirement remains , texaco's creditors would breathe a sigh of relief if they knew that new york courts would finally get the chance to apply new york law . the texas courts should act quickly , though , before the state is blamed for allowing a bond rule to pitch the nation's fifth - largest corporation into bankruptcy . commercial mortgage rates remained essentially unchanged during march , according to citicorp real estate inc.'s benchmark mortgage survey . the typical rate for a - year loan on existing properties was to -- slightly higher than in february but about the same as in january . lenders remain flush with cash but report weak demand for loans on properties that meet their lending standards . one of the largest lenders says its commercial mortgage volume is about half what it was a year ago . citicorp real estate's survey indicates that there are plenty of buyers for quality properties but few sellers largely due to the wave of tax - motivated selling at the end of last year . lenders say the recent upturn in interest rates on bonds could bring into the market some owners waiting to refinance properties . james richmond jr. , president of aetna realty investors inc. , says , " for april , we just can't tell yet . with this latest kick in the prime rate , maybe we'll see a flurry of activity . but even with the recent increase in short - term rates , it costs a builder more to get permanent financing than to remain on their construction loans . they're in no hurry to do that . an executive at a large credit company says , " it's too early to tell what the prime rate increase will do to commercial mortgage volume . everyone rushed to do deals at year's end , and there just are not as many properties changing hands . " other rates reported in citicorp's march survey are : for existing properties , the typical rate on five - year loans is to ; the typical rate was for - year loans . despite the low levels of demand , few lenders are bending their underwriting criteria to make loans . citicorp's survey indicates few life insurance companies will lend more than of a project's value , and most are requiring the properties generate of income for every of debt . citicorp real estate's monthly survey is based on reports by life insurance companies , one thrift , one fund adviser , one credit company , one bank , the federal home loan mortgage corp. and the federal national mortgage association . burlington northern inc. said its railroad unit agreed in principle to settle a two - year - old class - action suit by holders of two series of northern pacific railway bonds . the unit , burlington northern railroad , said the agreement calls for it to provide a cash settlement fund of million , as well as attorneys' fees , plaintiffs' other litigation expenses , and related charges . burlington northern also would be required to pay interest and principal on the bonds until maturity . one series of bonds becomes due in , and the other in . burlington northern said it expects , once the settlement is approved , that the trading prices of the bonds will decline substantially because they won't reflect the speculative premiums at which the bonds now trade . burlington northern said the agreement in principle isn't binding until a final written settlement is reached between it , citicorp and bankers trust co. , the trustees of the two series of bonds . once the settlement is completed , the pending lawsuit and all related litigation would be dropped , the company said . the suit alleged that burlington's offer to buy the bonds at less than face value broke terms of the mortgages securing the bonds and that the holders of the bonds would be deprived of certain properties valued at " billions of dollars . " a spokesman for burlington northern , a transportation and natural resources concern , said the amount it pays to the bondholders will be amortized over the life of the bonds , with " no dramatic impact " on the company's earnings . a u.s. bankruptcy judge approved seatrain lines inc.'s latest reorganization plan , allowing the shipping company to emerge from chapter bankruptcy - law protection later this month . under the second amended plan confirmed by u.s. bankruptcy judge burton r. lifland , of seatrain's new common stock will be allocated to its secured and unsecured creditors , to management , and to drexel burnham lambert inc. , the company's investment adviser . since february , new york - based seatrain has operated under chapter of the federal bankruptcy code , which protects a company from creditors as it works out a plan to pay debt . unlike an earlier proposed plan , the final plan confirmed by judge lifland doesn't call for any cash distributions to settle claims by unsecured creditors and debenture holders . about million in claims from unsecured creditors and debenture holders will be paid with the new stock ; most of the million in claims from secured creditors will be assumed by the reorganized company . the confirmed plan calls for a newly formed unit , seatrain tankers inc. , to hold all of seatrain's tanker operations and assume claims against those operations . the company said three of its six oil tankers will be transferred to the u.s. government to settle claims . alvin green , seatrain executive vice president , said the company will then " vigorously pursue its role as an american flag tanker operation " with its remaining three tankers . seatrain last october announced that it had held preliminary discussions with the pritzker family of chicago to buy the family's mccall publishing co. , but mccall withdrew from those talks , seatrain said . there has been no further discussion on the matter , mr. green added . current shareholders will receive one warrant giving the right to purchase one share of new seatrain common for every four shares of seatrain currently held . the date the new shares can be bought and the price are pegged to a complex formula involving future earnings , among other things . but at the latest , holders may exercise the warrants to buy new shares starting dec. . at that time , one warrant will buy one new seatrain share for the greater of or of the then - market price . the reorganization plan takes effect april . seatrain previously filed a reorganization plan march that proposed paying million and other considerations to settle claims by unsecured creditors and debenture holders . it withdrew that plan three months later because of changes in federal rules on shipping to the lower u.s. from alaska and because of doubts about winning creditors' approval . the words " optimism " and " manufacturing " have not had a cozy relationship during this decade in the u.s . while rust belt is the pejorative term usually applied specifically to heavy manufacturing it is also a term occasionally used to suggest that the entire manufacturing sector of the american economy is obsolete , wasting away and ineffectually managed . it looks now as if better days may be ahead . the suggestion that manufacturing fell upon particularly hard times as the s moved along will , of course , produce an argument . manufacturing companies are a pretty heterogeneous lot , and their fortunes in these years have varied widely . some obviously have done well . moreover , the proportion of national employment accounted for by these companies as a whole actually has been drifting irregularly downward since shortly after its world war i peak . the fact that this declining trend also has been evident in the s is not , therefore , itself any fundamental break with history . we went into the decade with manufacturing accounting for about of gross national product , and the figure was about the same for . in that sense u.s. manufacturing is not a rust heap sinking into the weeds . even so , it is clear that the s have been a painful period for these companies . in order to hold their market position as well as they have , manufacturers were held to price increases less than the rise in their costs ; the result was a sharp erosion of profit margins . in the national income accounts the price index for imports during these five years declined almost , and this was a major discipline on prices of domestic products . during the years to , prices of finished products at the producer level , for example , moved up only , and for big - ticket consumer products the five - year price rise was . these were all well below the rise in these years for the entire gnp . not surprisingly , these limited price increases -- rates that were well below even the moderate pace of inflation since -- show up in profit margins . during the past five years , profits of corporations outside manufacturing rose almost . even with price restraints that cut sharply into profits , u.s. manufacturing companies fought a rear - guard action with international competition . last year , u.s. exports of manufactured products were well below the volume five years earlier , and a small net export surplus of manufactured products at the beginning of the decade had metamorphosed into imports that exceeded exports by billion -- a large net export deficit . while it is difficult to make much out of monthly trade figures generated in washington , there was a little evidence that the closing months of saw the beginning of some improvement . in any case the fundamentals do point to better days . for one thing , the pressures that forced the dollar's exchange rate to a peak two years ago and put u.s. industry out of the ball game for some international and even some domestic markets have taken a significant turn for the better . since foreign savings coming here are in the first instance a demand for dollars ( in exchange for yen or marks or francs , etc. ) , a reduced foreign inflow tends to mean a reduction in pressures producing a high exchange rate for the dollar . the reduced need for foreign savings to balance things out reflects two developments . personal savings this year should be substantially larger than last year's abnormally small volume . this aberration is not apt to be repeated in . moreover , whether gramm - rudman - hollings survives this year's budget strains and pressures may be debatable , but the budget deficit this year will be well below that of fiscal year . both the administration and the congressional budget office project a drop of more than billion for fiscal . even with a moderate rise in private financing requirements -- and it looks as if the rise will be moderate -- the inflow of funds from abroad to balance out all of this could be billion to billion lower than in . if so , that would be a billion - to- billion smaller foreign demand for dollars -- contributing to a tendency for the dollar's exchange rate to edge downward somewhat further ( as it should ) . moreover , they have come through the travails of the s with some surprising indications of vitality . in spite of the onethird decline in profits of manufacturing companies ( in real terms ) , they have continued to increase their net stock of productive investment per person employed at the rate of almost a year . thus the average amount of capital employed per worker of about by the mid - s was roughly in line with the longer - run historical trends . of course , there has been a shortage of capital formation for the whole economy , but this has occurred largely outside of manufacturing . there the annual enlargement in the stock of capital per worker has fallen to a pace well below , and the capital augmenting the productiveness of each worker is today about below what trends prevailing up to years ago would have indicated . not surprisingly , these differences show up in gains in productivity . gains for manufacturing industries during this decade have been at the average rate of a year , well above the longer - term trend . for many companies the profit pressures have meant not collapse but becoming leaner and meaner . outside of manufacturing and agriculture , the performance has been quite different . since the early s , however , productivity gains in this part of the economy ( which accounts for about of the work force ) have been negligible -- about during the past decade . productivity patterns are influenced by more than the amount of capital backing up each worker . indeed , uncertainty about just what does explain these differences invites interest groups to nominate their pet concerns as the probable sources . thus this deterioration in the productivity performance outside manufacturing is variously ascribed to inadequate improvements in the environment , taxes that discourage effort and earnings , too little research or the poverty of our support for education . not surprisingly , these diagnoses seem to have a pattern -- coming respectively from environmentalists , supply - siders , researchers and educationists . empirical evidence is pretty clear , however , that raising productivity and real incomes does involve using more capital -- that how well off we are is influenced by how much capital supplements workers' efforts . and it is manufacturing that has maintained the pace of enlarging the amount of its capital per worker , while the rest of the economy ( including government ) has fallen behind. ( the university of michigan employs about of capital per worker -- suggesting that it requires a lot of capital per worker to produce an idea or to move a mind. ) . while manufacturing has been seen as the u.s. economy's black sheep as we have congratulated ourselves on how jobs have been created elsewhere , it is manufacturing that has kept up the pace of those things that deliver rising material levels of living . fundamentally , this is good news . a vigorous and viable manufacturing sector is important to the vitality of the economy generally . it continues to employ large numbers of comparatively unskilled workers whose alternatives are limited and less attractive . it is at least encouraging that the industry takes on these battles , having kept intact the foundations of its economic progress even in the tough years of the s . mr. mccracken is day distinguished professor emeritus of business administration at the university of michigan . support for brazilian finance minister dilson funaro has abruptly eroded to the point where his future seems deeply uncertain . over the past few days , president jose sarney -- formerly the minister's closest ally -- has made clear that his backing for mr. funaro is now muted . at the same time , a powerful lobby of sao paulo industrialists who in the past supported the minister has launched a thinly disguised campaign for his dismissal . sources close to the government said these factors , combined with strong opposition to mr. funaro from international banks , meant that only a sudden improvement in brazil's critical economic situation would enable the minister to survive more than another two months . some said his fall could be imminent . but mr. funaro's spokesman , marco antonio brandao , dismissed these views as " lies and rumors stemming from people who want the minister's job . " the evidence that mr. funaro's position has weakened is , however , powerful . he was pointedly not invited last weekend to an event that has become known as the churrasco , or barbecue -- a gathering in a country estate of top industrialists and bankers with president sarney . no sooner had he completed this snub to mr. funaro than the president let it be known that he had asked two of the minister's former rivals to prepare a possible domestic economic program . this request to persio arida and andre lara resendetwo architects of the cruzado anti - inflation plan who resigned from top government jobs in protest of mr. funaro's policies suggested that the president is no longer wholly committed to his finance minister . mr. funaro has taken a hard line on brazil's foreign debt . he has said brazil's suspension of interest payments on billion of its foreign debt will end only when " it's realized that the debt crisis is not only brazil's , but international . " the finance minister's position has been to seek radical changes in the way financing is granted by government agencies , multilateral lenders and commercial banks . president sarney , whose six - year mandate could be shortened if the economy deteriorates further , also announced that he would not create an economy ministry , combining the current finance and planning ministries . at the same time , various names , including mr. arida's , suddenly began to circulate in the press as possible successors to mr. funaro as finance minister . meanwhile , mr. funaro himself has appeared increasingly paralyzed . his seven - nation tour following last month's declaration of a debt moratorium has been followed by an uneasy void in which nobody seems ready , or authorized , to take up broad debt negotiations . some sources say this reflects the fact that president sarney has not yet decided who should lead the debt talks , and how aggressively the talks should be conducted . moreover , the disarray surrounding domestic economic policy has continued . ironically , this has coincided with the moment of mr. funaro's greatest domination , with all his former rivals at the central bank and planning ministry now out of office . but as top economist istvan kasznar commented , " he has never appeared to have so much power , yet been so isolated . " and , in the view of many analysts , this isolation now leaves mr. funaro without the clout to simultaneously conduct debt talks with hostile bankers and bring some order to an economy with double - digit monthly inflation . mr. junger also said he plans to sue vw for " a couple of million marks " in damages . " that is the first step . right after the labor suit , i will sue vw for damages to fight for my reputation , " mr. junger said . " i have to do that to clear my name . if i don't , i won't have a chance of ever getting another job again . " the first hearing on mr. junger's job status , before the labor court of the braunschweig district , is expected to begin within the next two weeks . meanwhile , west german state attorneys are still awaiting the return of joachim schmidt , the manager of a frankfurt foreign - exchange firm . mr. schmidt , whom the state wants to question in connection with the vw case , apparently disappeared two weeks ago on the day vw disclosed the fraud . mr. junger , years old , said that he is " completely innocent " of any wrongdoing and that his dismissal was unjust and has tarnished his reputation . mr. junger was the only vw employee dismissed outright in connection with the company's claim that it was defrauded of as much as million through criminal manipulation of its foreign - currency position since . but the company must have had its reasons to fire him , otherwise it wouldn't have taken the step . " on march , the day vw dismissed mr. junger , it also suspended two senior finance executives and furloughed four junior traders in connection with the suspected fraud . vw's chief financial officer , rolf selowsky , resigned the next day . mr. junger had already given notice in january because he disagreed with management on how vw's foreign - exchange operation should be run . the agreement put him on a vacation status that would allow him to search for another job while still drawing a vw salary and benefits until the end of his contract in september . mr. junger's dismissal amounted to an annulment of the severance arrangement . under west germany's strict labor laws , a company can only defend a dismissal by showing a serious grievance against the worker . vw hasn't specifically said why it annulled mr. junger's contract . but his personal documents have since been returned . he says the attention focused on him since his dismissal has jeopardized his prospects of joining the foreign - exchange department of bankers trust g.m.b.h. in frankfurt on april as planned . the company is a unit of bankers trust new york corp . " i had a contract with bankers trust signed in late february , but now that is on ice , " he said . " but i can understand why they would distance themselves from somebody like me under the circumstances . " my contract with bankers trust was a very good one , and i'm at an age when i can still work for another years . so you can be sure that the suit will be for a couple of million marks , " mr. junger said . in new york , bankers trust confirmed it has held job discussions with mr. junger , but declined to comment on the talks' current status . state attorneys and the federal criminal bureau are being helped in their investigation by a bundesbank foreign - exchange expert . vw has denied that the loss could have come through management miscalculations , rather than fraud . those disclosures have led foreign - exchange experts to believe that the suspected fraud couldn't have succeeded without inside help . no indictments have been served in the investigation . in their search for suspects , authorities are looking within vw as well as in frankfurt's banking district . in that context , the state attorney's office still wants to question mr. schmidt , the manager of frankfurt's joachim schmidt & partner kg . but mr. schmidt has been out of the country since march . and his whereabouts are unknown . last week investigators entered his currency - trading firm and confiscated files . authorities declined to comment on their findings . frankfurt foreign - exchange dealers say schmidt & partner has been effectively out of business since its name became connected with the suspected vw fraud . the budapest bank has since said it wasn't involved in any misdeed and has offered its full cooperation in the investigation . comprehensive trade legislation cleared three congressional committees and now goes to the house floor . the sweeping trade measure , which has been a top priority of the democratic - controlled congress , is intended to make the president take stronger and more frequent action in response to this nation's trade woes . the legislation would require the president to retaliate against certain unfair trade practices by foreign countries . it also would set up regulatory and enforcement mechanisms to ensure better treatment of u.s. businesses in international commerce . despite the relatively quick committee action , the trade package's fate depends on how democrats resolve a simmering feud on the house floor . there is a deep division over trade within the democratic party . some democrats want to load up the legislation with measures to help import - battered industries and organized labor . they see the certain presidential veto of such a bill as a way to keep trade a political issue for the democrats in . other democrats , led by house ways and means chairman dan rostenkowski of illinois , want a workable bill that gives president reagan no choice but to sign a democratic trade initiative . the legislation also would improve benefits to workers displaced by imports and provide new sanctions against imports that are subsidized or dumped at less than fair value . separately , as its part of the trade legislation , the house energy and commerce committee approved - its package giving the president authority to restrict certain foreign acquisitions . that measure also would authorize negotiations to gain access in foreign markets for u.s. telecommunications equipment . in a close vote of - , the commerce committee also approved an amendment requiring disclosure of foreign investment in the u.s. opponents said the measure would discourage foreigners from buying stocks in the u.s . a third part of the legislation , approved - by the house banking committee , includes the establishment of an international authority to deal with third world debt . treasury secretary james baker opposed this provision , calling it a " clear bailout of commercial banks by the public sector . " rep. rostenkowski called the ways and means committee's action " historic " and noted its bipartisan support . the committee made few changes in the chairman's proposal , which he had already revised in order to meet objections by the reagan administration that it was too protectionist . " our chances of having a trade bill signed have escalated greatly , " said rep. bill frenzel ( r. , minn. ) . " that is a probability now , not just a possibility . " the most controversial issue is yet to be voted on , however . that is a proposal by rep. richard gephardt ( d. , mo. ) to force retaliation against countries that have huge trade surpluses with the u.s. rep. gephardt decided to postpone offering his amendment until the entire house takes up the trade package . yesterday , mr. gephardt , a presidential aspirant , criticized the ways and means bill for its " lack of a results - oriented standard to determine whether we're making progress in clearing away unfair trade practices of foreign countries . " the commerce committee approved an amendment to ban the importation of digital audio - tape machines for one year unless they have special encoding devices to prevent unauthorized taping by consumers . the measure , backed by the recording industry , passed - . " it seems a very strange notion that consumers should be allowed the right to steal , " said rep. henry waxman ( d. , calif. ) , the amendment's sponsor . the commerce committee package would authorize specific negotiations over access of telecommunications equipment and services into foreign markets . if negotiations failed , the president could take reciprocal action . the measure also would give the president authority to restrict foreign acquisition of u.s. businesses if such acquisitions would " threaten national security or impair essential commerce . " the provision is directed at situations similar to the recent proposed merger of fujitsu ltd. and schlumberger ltd.'s fairchild semiconductor corp. unit . the proposal , which was eventually called off , caused concern among u.s. officials , although they had little legal authority to block it . the disclosure provision would require foreign investors to report to the commerce department any significant interest in a u.s. business or real estate . holdings of large blocks of corporate securities of over million in one company also would have to be reported . " i don't believe this will cause an exit of some billion to billion in capital , as some have maintained , " said rep. john bryant ( d. , texas ) , sponsor of the amendment . this amendment doesn't discourage foreign investment ; it just lets us know who owns what . " the ways and means committee package would require the president to retaliate against certain unfair trade practices , but give him discretion in deciding the form of retaliation . it also would allow him to waive retaliation if it " is not in the u.s. national economic interest . " the legislation would make foreign violations of workers' rights an unfair trade practice against which the president could order trade retaliation . a violation of workers' rights would include denying workers the right to associate , to organize and to bargain collectively . failure to establish minimum wages and work hours and to set occupational safety and health standards could also be deemed unfair trade practices . the measure would increase retraining benefits for workers whose jobs are lost because of imports . it would set up a voucher system for payment of these benefits . the committee toughened provisions for dealing with foreign companies that repeatedly " dump " goods -- selling them at unfairly low prices -- in the u.s . unlike the reagan administration's trade package , the rostenkowski bill wouldn't require a domestic industry seeking protection from imports to show a reasonable likelihood that it would be fully competitive after such relief . the ways and means bill would authorize the administration to provide relief even for a dying industry . the house banking committee voted to create a so - called international debt facility , a multilateral debt - management authority that would purchase debt of less developed countries from commercial banks . the authority could enter into negotiations with debtor countries to restructure their loans to ease current debt - service burdens and thereby increase their ability to buy imported goods . the facility could sell these loans in a secondary market or assist the banks in voluntarily disposing of their third - world loan portfolios . in a letter to banking chairman fernand st germain ( d. , r.i. ) , treasury secretary baker said of the proposed facility , " by raising expectations of debt forgiveness , the proposed legislation could also undermine efforts now under way within debtor countries to adopt reforms which are essential to stronger , sustained growth . " the federal reserve board recently accepted two japanese firms as primary dealers ; other japanese firms seek such status . the bill would require the treasury secretary to establish objectives for the u.s. trade and current account deficits and to set exchange - rate targets to achieve them . treasury secretary baker opposed it , stating in his letter , " such a requirement for a market - sensitive measure like currency exchange rates could trigger large - scale speculative capital flows that would seriously disrupt international financial markets . " separately , the house unanimously passed a resolution expressing the sense of the congress that the president should take strong action against japan's apparent violations of the u.s. - japan semiconductor trade agreement . the senate has overwhelmingly passed a similar resolution . a private british security company with ties to the thatcher government has become embroiled in the iran - contra affair , raising new questions about the source of personnel and funds used to aid nicaraguan insurgents . a chart found in national security council files indicates the company , kms ltd. , was part of a private network that assisted nicaraguan insurgents during a two - year period when congress had prohibited u.s. military aid to the anti - sandinista forces . david walker , a veteran of british military special operations and a principal in the firm , was identified separately in communications involving former national security council aide marine lt. col. oliver north , according to intelligence sources . mr. walker is believed to be well - known to retired air force maj. gen. richard secord , who helped oversee the private network on behalf of col. north . though much of the evidence involving kms remains circumstantial , labor party leaders in britain have raised questions in parliament about the company's involvement and used the issue to challenge prime minister margaret thatcher . mr. walker has had political ties to mrs. thatcher , and kms has a history of working closely with the government - though not always with its direct blessing . kms is registered in the english channel island of jersey , whose laws make it difficult to determine the company's ownership . it is largely staffed by veterans -- such as mr. walker -- of the british special operations forces , or special air services . since its establishment in , kms has held clandestine military training contracts in oman and more recently in sri lanka . and , according to two sources , it has been employed to a lesser degree by the sultan of brunei . kms and mr. walker operate from a nondescript , three - story buiding on abingdon road in the kensington section of london . mr. walker also associated with a more - conventional and less - secretive firm , saladin security , in england . he has had extensive contact with the sultan of oman through a four - year tour as squadron commander with the sas and his more recent experience with kms . kms's role in the nicaragua war is unclear . the company is known both for its ability to train military forces and provide experienced military personnel -- either veterans from british sas ranks or from south africa and rhodesia , before it became zimbabwe . although that figure appears too high , there have been repeated reports of former rhodesian pilots involved in the war . adolfo calero , leader of the nicaraguan democratic force , or fdn , yesterday denied any knowledge of british or rhodesian personnel being hired by the fdn . but a u.s. intelligence source confirmed that former rhodesian pilots were used before and after military aid was cut off in . when u.s. aid was cut off , some of these pilots were apparently paid through the private network overseen by col. north . the source said as many as a half - dozen of the pilots have been under contract to the central intelligence agency since military aid officially was resumed last october . typically , a " parent " company such as kms would sustain such individuals between cia or other intelligence contracts . this source didn't know of any direct kms involvement in nicaragua , but a second intelligence source said the company has sought work separately in cia operations providing aid to afghan rebels . besides mr. walker's ties through kms to brunei , other questions have been raised about british connections to the nicaraguan insurgents . although saudi arabia has denied that it made any direct contributions , a high saudi arabian official has said privately that funds from that country were funneled through an unidentified british military veteran in jordan who was known to col. north , according to an intelligence source . the insurgents received an estimated million in the first nine months after u.s. aid was cut off in june , according to fdn bank records . more than half this sum -- million -- came in a two - week period in march . separately , federal records show that corporate air services , a pennsylvania company later used in the contra resupply operation , won a contract from the interior department in september . the contract was for the purchase of an italian - made partenavia observe twin - engine plane , particularly adaptable for tracking and counting wildlife . some other companies involved in the nicaragua operation have received federal contracts for unrelated activities , but interior department officials said the corporate air services contract was awarded on the basis of a competitive , sealed bid . john walcott contributed to this article . after months of haggling and last - minute threats of bankruptcy - law filings , hawkeye bancorp. and its creditors appear ready to present a restructuring plan to shareholders . creditors and other sources said the bank holding company and its lenders will meet within the next few days to formally approve the plan , a complex and drastic proposal for restructuring million of debt by auctioning off assets and giving creditors equity and notes that could nearly erase current holders' stake . the des moines , iowa - based banking concern , crippled by farm loan losses , will warn shareholders in proxy materials and other documents that it likely can't survive without the proposed restructuring , has no viable alternatives and will file for chapter bankruptcy - law protection if holders don't go along , creditor and other sources said . under chapter , a company is protected from creditor lawsuits while it tries to work out a plan to pay its debts . hawkeye also is expected to disclose that , even with the restructuring , its long - term chances of surviving on its own will still be uncertain . richard f. levy , an attorney for hawkeye , declined to comment . hawkeye , once iowa's biggest bank holding company , has lost million over the past seven quarters . last december , it announced it couldn't pay its debts and was negotiating with creditors for relief . the basic outlines of the restructuring agreement were agreed upon in june . hawkeye is trying to sell of its banks and some of its non - bank units to raise million for creditors . it will also swap million new common shares , of its equity , to creditors in exchange for million of debt . creditors will also receive notes for million debt ; those notes will be convertible into huge chunks of common stock if hawkeye can't meet payments . under certain circumstances , hawkeye could have to issue creditors more than million new shares over the next several years , according to sources close to the creditor group . currently , hawkeye has million shares outstanding . in national over - the - counter trading yesterday , hawkeye closed at , down down cents . despite the potentially massive dilution , shareholders may have no choice other than to approve the plan . a chapter filing , which hawkeye says is its only alternative , would likely wipe out shareholders completely . " chapter 's all that's left , and that's no good for anybody , " said one creditor . " there's not enough equity left to cover the debts . " hawkeye's restructuring will be submitted to holders at a special meeting , which has not yet been scheduled . wheeling - pittsburgh steel corp. , citing a weak market and high imports , said it will close its monessen , pa. , rail operations and exit the rail business it entered with the help of government financing in . the action wasn't surprising . wheeling last july took a million charge to close two other facilities at the monessen plant . the last remaining part of the mill was the continuous bloom caster , which feeds semifinished steel to the rail mill . but dire factors , including depressed demand for steel rails used in the transportation industry and heavy import penetration , sealed the caster's fate . wheeling - pittsburgh last october offered to turn the rail mill over to the economic development administration , the federal agency that helped finance the plant . in return , wheeling reportedly asked the eda to forgive as much as million remaining on the rail - mill loan . the steelmaker's unusual offer stemmed from its unsuccessful efforts to get financing to replace the monessen blast furnaces with an electric furnace , a more efficient way of making steel . wheeling apparently didn't get many takers on an estimated million in new loans needed for the monessen plant's electric furnace . wheeling , the nation's seventh - largest steelmaker , is operating under chapter of the federal bankruptcy code . under chapter , a company is protected from creditor lawsuits while it works out a plan to repay its debt . the supreme court agreed to review the validity of customs service regulations that permit the entry of some " gray market " goods into the u.s . the regulations were struck down last may by a three - judge panel of the federal appeals court for the district of columbia . the appeals court , rejecting the customs service's interpretation that has been in effect for about years , said federal law doesn't permit the importation of gray market merchandise . the gray market describes a system in which u.s. companies import trademark - bearing goods from foreign manufacturers without permission from the u.s. trademark owners . these importers purchase gray market goods at reduced prices abroad and sell the goods at discounted prices in the u.s . the foreign - made goods were intended either for sale in other foreign markets or for sale in this country exclusively through the u.s. trademark owner . for several years , the legal battle has been heating up between companies that own u.s. trademarks and importers of gray market goods . the customs service has interpreted the law to permit gray market imports when a u.s. trademark owner sets up a foreign subsidiary to manufacture trademarked goods , is owned by the foreign manufacturer , or authorizes a foreign manufacturer to use its trademark . the law , according to the customs service , was intended to ban gray market imports only when a u.s. company purchases a trademark from a foreign company . the appeals court ruled that the law involved in the case doesn't distinguish among different import situations . the law , the appeals court said , prohibits unauthorized imports of goods bearing trademarks that are registered in the u.s . the ban applies to all such imports . the appeals court ruling conflicts with rulings in similar cases by two other federal appeals courts that upheld the customs regulations . appeals were filed in the supreme court by the justice department and by k mart and th street photo inc. , a new york - based outlet of electronics and photographic products that also sells gray market merchandise . the gray market case could either be argued in april and decided in june or early july , or be argued next october and decided in the spring of . the justices dismissed an appeal they had earlier agreed to hear on whether environmental protection agency officials have authority under the superfund law to enter private property to plan and carry out cleanups of hazardous wastes . a federal appeals court in chicago had ruled that outboard marine corp. wasn't required to give epa officials access to property that it owns in waukegan harbor , ill. , where the marine accessories company is based . the epa appealed to the supreme court . but congress , in extending the superfund law two months ago , included a provision making clear that the epa has the authority to enter private property to plan a cleanup . as a result , the supreme court yesterday threw out the appeals court ruling and sent the case back to the appeals court for reconsideration in light of the new law . however , the appeals court could decide that the new law isn't retroactive and that the epa's authority wasn't clear under the previous law . an outboard marine spokesman said the company is in settlement discussions with the epa and recently presented the agency with a proposal , which is under review . he wouldn't disclose any details of the proposal . geldermann inc. said it plans to buy certain assets of clayton brokerage co. , st. louis , in a step that furthers the consolidation of the hard - hit commodity brokerage industry . clayton , which derives much of its income from the depressed agricultural commodity trading business , had been rumored to be on the auction block for months , industry sources said . while expected , the pending sale appears to have shaken clayton's management ranks . james layton , clayton president , resigned from the firm last week shortly before the sale was announced . reached at his suburban st. louis home friday , mr. layton wouldn't comment on his resignation or the sale . mr. layton , clayton president since , earned a reputation as a relentless cost - cutter in the past few years as he tried to reverse the firm's decline . the clayton acquisition strengthens geldermann's position as a leading futures - only brokerage firm ; it recently acquired heinold commodities inc. and agra gill & duffus inc . geldermann also said last week that it is severing its clearing ties to more than of its smaller offices serving retail customers to concentrate on larger institutional accounts . clayton , a division of garnac grain co. , has about offices and introducing brokers trading through the firm , said jerome s. wade , clayton vice president and general counsel . introducing brokers solicit customer orders for a parent company , while payment for the trades is made directly to the parent . mr. wade said he didn't know how many clayton offices geldermann would be acquiring , or how many clayton employees were being terminated as part of the acquisition . secretary of state george shultz's task at the annual meeting of north atlantic treaty organization foreign ministers this week will be nothing less than restoring the credibility of u.s. foreign policy and cementing his own position in washington . in the face of the domestic disarray and crisis in confidence generated by the administration's secret dealings with iran , he must convince the allies that the u.s. still can mount a coherent foreign policy . but mr. shultz also may use the nato meeting to bolster his own position , an effort that will begin with his testimony before the house foreign affairs committee today . although the secretary of state hasn't been linked to any improper actions , white house aides say he knew more about the iran arms sale than he has conceded . administration officials also have confirmed that mr. shultz solicited money from the sultan of brunei to support the nicaraguan rebels , though it's unclear whether the money was used for military or humanitarian assistance . " he'll be showing an audience back home that , while other senior officials are part of the problem , he's part of the solution , " a state department official says . " we want to help shultz , " says a west german official and arms control expert . " his staying power would be very welcome here . he knows the agenda and the arguments and has always been able to steer the pragmatic course . " the allies particularly value mr. shultz's influence on arms control issues . the allies fear that once the dust settles in washington , mr. shultz will be replaced ; he pointedly distanced himself from the white house at the beginning of the iran affair and thus irked many of president reagan's closest advisers . the europeans are angry that the u.s. was making secret arms sales to iran while pressuring other nations to adhere to a weapons boycott of iran and a tough policy of not dealing with terrorists . " while the u.s. was reproaching the europeans for being wimps and being soft over libya , it was secretly pursuing what the europeans were accused of doing -- namely doing business with a country that supported terrorism , " says karl kaiser , director of the west german government - sponsored foreign policy institute . the european allies believe mr. reagan endangered their interests by almost agreeing to remove medium - range missiles from europe . this would have created an imbalance in the face of moscow's superiority in short - range missiles and conventional arms . during the brussels meetings , european officials will demand that in the future they be more fully appraised of u.s. security and anti - terrorism policies , and they think they're in a position to win such assurances from mr. shultz . " the whole administration doesn't understand the political and psychological repercussions of the withdrawal of missiles from europe , " says pierre lellouche , director of the french institute for international relations . " the big fear is that a nervous and weakened reagan might be tempted to get a deal with the russians that will ease his political pressure but lead to the decoupling of the united states and europe . " for public purposes , they still say they want a deal . but mr. lellouche echoes the views of some west european officials when he says that it might be risky for the reagan administration to pursue an arms control agreement in its current weakened state . u.s. actions over the past weeks have bred among europeans a rare unity born out of a common fear that they may be harmed by a u.s. foreign policy that is losing its bearing . to counter this disquiet , mr. shultz will attempt to get the allies to forget the past and look to the future . instead of discussing reykjavik , he wants them to use the less - radical arms control prescription he outlined in a recent chicago speech as a starting point for disarmament discussions . he'll portray the iranian arms sales as an aberration and assure the allies that president reagan has promised that iran policy is back in mr. shultz's hands . " he'll try to fence off the problems from discussion and move ahead in other areas , " an administration official says . the europeans want the administration to promise that no deal will be made on medium - range nuclear missile cuts unless the soviets reduce the number of their short - range missiles or accept a ceiling that nato can build up to . the french want all countries involved in the recent stockholm talks on confidence - building measures to take part in order to dilute washington's influence and increase their own . washington wants talks between nato and the soviet - led warsaw pact . mr. lellouche says that whenever talks are strictly between the two alliances , u.s. and soviet interests far overshadow those of other european countries . that's a bad idea especially now , he says , because after reykjavik and iran it's clear that " the wisdom of the u.s. line isn't always obvious and shouldn't always be followed . " with the u.s. in its weakened state and europe acting with more unity , america's allies hope the u.s. will be more attuned to european concerns and demands for coordination . bush acknowledged " mistakes were made " in the iranian arms affair . the vice president , a presidential aspirant , carefully navigated a political minefield in his first speech since the imbroglio began . showing anew his loyalty to reagan , bush offered the most comprehensive rationale for covert arms sales to iran . but bush sidestepped any role he himself might have played and said he was unaware of and opposed to funneling of money from the sales to nicaraguan rebels . separately , justice department and congressional investigators are pursuing new evidence that the cia played an important role in selling arms to iran and funneling profits to the contras . poindexter refused for the second day before a senate panel to discuss his role in the iran affair . but the committee chairman said most of the facts can be uncovered " with or without " the ex - national security adviser's cooperation . reagan has tentatively approved a trillion budget for fiscal , and is leaning toward a defense budget request of billion , administration officials said . the military spending figure is billion above the current level but billion less than the pentagon wants . the power shortage apparently has also caused the soviets to restart the chernobyl nuclear complex without promised safety improvements . the warsaw pact will continue to adhere to u.s. - soviet arms limitation treaties , defense ministers of the soviet - led military alliance said after a meeting in poland . but the official news agency pap said the ministers warned the u.s. that its action to exceed limits of the unratified salt ii treaty would undermine superpower relations . nato defense ministers vowed to try to strengthen their conventional forces . the european officials reaffirmed backing for u.s. moves for a pact with moscow on medium - range missiles and a cut in strategic arms . nato planners opened a session on improving conventional weaponry and reviewing military cooperation plans . bhopal survivors prayed and protested on the second anniversary of the union carbide poison - gas disaster that left over dead . protesters burned effigies of the u.s. concern's ex - chairman . marchers presented the state minister a list of claims from injured survivors , demanding billion in compensation and other relief . pretoria has begun a crackdown on white foes of apartheid , activist leaders said . the group opposes mandatory military conscription for white youths on the grounds that many must repress residents in black townships . shiite moslems battled palestinians in lebanon for the th day , killing and raising the death toll to , police said . most of the victims were civilians . plo chief arafat claimed syrian troops were involved in the shiite militiamen's assault on palestinian refugee camps in beirut and the south . punjab's government sought army help for civil authorities to quell sikh separatist violence in the north indian state . but new delhi didn't immediately move to deploy troops . punjab said sikh terrorism made the intervention necessary in parts of the state , thus giving soldiers broad powers for searches and arrests without warrants . most u.s. students can write at a minimal level but lack communication and critical thinking skills , a national survey of tests of students in public and private schools found . the national assessment of educational progress said less than of th - graders write well enough to ucceed in academia , business or the professions . tehran radio said about fresh troops gathered in a stadium to hear iranian leaders' speeches before leaving to fight in the six - year war ; some wore shrouds to show their readiness to die . aquino wants peace with communist rebels but the philippine president's " sword of war " will be ready if that can't be achieved , new defense minister rafael ileto said . a - day cease - fire between manila and the rebels begins wednesday in a bid to end the fighting . he also said any divisive actions by armed forces will be quelled . france altered slightly its visa regulations for citizens of the u.s. and some other countries residing in france . such holders of french resident permits will no longer need visas to leave or enter france . but u.s. citizens who don't reside in france will still need visas to visit the country . taiwan's ruling party faces an election challenge saturday for the first time since the nationalists fled mainland china for the island in . the democratic progressive party , formed in september by dissidents , is fielding candidates in elections for the national assembly and legislative yuan . it is around p.m. , and the last of the day's tourists are leaving el pueblo de los angeles . now it is time for visitors of another sort to straggle out of the shadows . on this night here in the th - century remains of spanish los angeles , male illegal aliens have come from all over the city to sleep on the bare wooden pews of the district's historic catholic church , our lady queen of angels . when the men awaken , priests and church workers will direct them through a network of church - sponsored programs offering food , housing , work , medical care , english - language classes and immigration counseling . like many who seek refuge in the church each night , these men also plead for information about la amnestia , the amnesty program for illegal residents that is part of the new immigration legislation passed in october . under the law , illegal aliens who can prove continuous u.s. residence since can apply for legal residence . the undocumented have come to the right place . it is by population the largest diocese in the u.s. and by ethnicity the most heavily latino , and its three million catholics include many of the to one million undocumented southern california residents who are believed to qualify for amnesty . the archdiocese's central role will stem from an immigration and naturalization service plan to encourage the undocumented -- who fear deportation if they apply directly to immigration authorities -- to seek help from voluntary groups . the ins will give federal money to voluntary agencies , including the church , to process applications under the amnesty program . here , where most illegal residents are hispanic catholics , most applicants are likely to gravitate toward the church . " the church is the one institution the people trust , " says armando navarro , the director of the institute for social justice , a local hispanic political - organizing group . crucial to the archdiocese's effort to draw illegal aliens out of hiding and into greater civic and church involvement is archbishop roger m. mahony , a social activist who became archbishop only last year . drawn by his mesmerizing oratory delivered in spanish and his youthful good looks , hispanics already identify strongly with the - year - old archbishop . at least half , and probably more if illegals were counted , of the archdiocese's members are latino . and by taking its role in the legalization process very seriously , the catholic church here is acknowledging that its future is tied to the future of latinos . the new law coincides with a highly publicized effort led by the archbishop to raise the church's profile in the latino community and increase its membership . a new five - year program aimed at hispanics , estimated to cost the archdiocese million in its first year , includes spanish - language masses in the parishes , mandatory spanish classes for new priests , bilingual education in parochial schools , scholarships for latino students and programs to reduce youth - gang violence . in addition , archbishop mahony has been encouraging hispanic immigrants to take a more active role in local political issues through groups such as the united neighborhoods organization ( uno ) , a church - based , community - action group that represents about families in the heavily hispanic east los angeles neighborhoods . " in the church , there are no illegal aliens , " the archbishop proclaimed to the crowd . the now - retired los angeles archbishop , - year - old timothy cardinal manning , took a strong but low - key approach to hispanic issues , lobbying legislators behind the scenes for immigration reform and government services for the undocumented . his successor -- the youngest catholic archbishop in the u.s. -- is savvy at delivering the same message loudly to the crowds and the media . it is a skill archbishop mahony honed while serving in the s as chairman of the state agricultural labor relations board during the vote over union representation of farm workers . at the time , he was the bishop of fresno , in the state's agricultural center . when archbishop mahony unveiled the five - year hispanic plan , he followed it with a celebration at dodger stadium that drew latinos to pray , watch fireworks and view a videotaped message from the pope . from the flower - bedecked altar , the archbishop declared in spanish : " los angeles is your home , the catholic church is your home , and i am your pastor . " " we've been inundated , " says the rev. joseph pina , an east los angeles pastor . an official count of illegal - alien catholics here hasn't been taken , but church officials know they number in the hundreds of thousands because they attend mass and seek church services . for example , our lady queen of angels , situated downtown , has so many illegal parishioners that it has no official parish roster . with eight priests in residence , however , it is the largest and busiest parish in the city . about people attend its round - the - clock sunday masses , and about children are baptized each weekend . in the days following passage of the immigration bill , hundreds of the undocumented went straight to catholic charities of los angeles , a diocesan organization that works on immigration issues . sitting in a counselor's office with his wife and two sons shortly after the bill passed , a man who identified himself only as senor bugarin told a visitor , " the most important thing they've done is to give me confidence that they will help me . " the catholic charities organization has spent more than million on services for nearly half a million immigrants , legal and illegal , since . it has a staff of eight accredited counselors , who represent aliens in deportation or naturalization hearings before federal immigration judges , and operates a state - financed program to locate and aid refugees . using parish volunteers , the office has resettled more than cubans and nearly indochinese . " they do a lot of the legwork , filling out forms and putting cases together , and save us a lot of time , " says harold ezell , the western regional commissioner of the ins. mr. ezell's agency plans to rely heavily on church volunteers for the same services when the amnesty applications process begins , in about six months . the los angeles archbishop's leadership in this effort has endeared him to liberal forces in the church -- including many priests -- who have long desired a more active role in social - justice issues . " he gives hope to those of us working down in the inner city , " says the rev. michael walsh , the pastor of a church in the city's predominantly black watts district . but some liberals criticize the archbishop for not publicly supporting the farm workers union's current boycott of california grapes and for failing to make a promised appearance at the ceremony declaring our lady queen of angels a sanctuary . the archbishop says in an interview that he supports that church's effort " without saying the whole archdiocese has to do what { they } are doing . " yet the archbishop faces the most criticism from the right . although conservative catholics haven't spoken out publicly against the popular archbishop , richard j. riordan , a partner in the law firm that represents the archdiocese , says some conservatives talk privately about feeling threatened by archbishop mahony's " power - to - the - poor philosophy . " still , the archbishop hasn't neglected the powerful . he established a series of advisory committees and filled them with wealthy members of the city's catholic business community . he also impressed business leaders by appointing the first diocesan chief financial officer who isn't a priest . however , he is equally unbending about human rights . " there is an element of discrimination , racism in california , based on a great deal of ignorance of the people , " he says . " i find it so ironic , since we live in a mexican milieu . " to counter this , he has urged well - heeled parishes in the suburbs to adopt inner - city parishes and regard themselves as " missionaries " to immigrants . they should " live the gospel " by becoming involved in social programs such as soup kitchens and counseling for runaway youth , he says . archbishop mahony expects this missionary zeal to extend to helping undocumented residents apply for the legalization program . he says : " our presence is going to be so significant that in california { the success of } legalization will be in direct proportion to our involvement . " when frederick nahm took over centre college's fund - raising activities years ago , more than a quarter of the school's alumni were listed as missing . " you can't ask them for money if you don't know where they are , " mr. nahm says . to find the lost alumni , mr. nahm and his staff combed through old yearbooks to identify fraternity brothers and sorority sisters who might still be in touch with them and contacted parents who were still in the school records . some were located when they unexpectedly mailed in a donation and the staff culled their addresses off their checks . today only about alumni are still lost , says mr. nahm , who left the school last fall . through this type of industriousness , centre , a tiny college of students in danville , ky. , has increased alumni donations more than tenfold since . with colleges squeezed by rising costs , eroding government support and parent and student pressure to hold down tuition and increase aid , many schools are stepping up annual alumni fund drives . fund - raisers still spend a lot of time wooing big donors . henry e. eberhardt iii , director of the annual fund at dartmouth college , says of the million raised by the school's annual fund last year came from just of the donors . but officials at many colleges now say the best way to stimulate giving is to increase the number of alumni who make contributions , no matter how small , to a school's annual fund drive . centre boosted participation in its annual campaign from of alumni in to last year , and contributions jumped from to more than million . colleges see their annual drives , which rely heavily on volunteers , as a way to get alumni in the habit of giving , with the hope that they will increase their donations as their fortunes rise . " the person who gives today may give million years from now , " says mackarness m. goode , executive director of development at brooklyn college . officials also say a regular donor is more likely to give to a school's periodic capital campaigns and to leave part of his estate to the college . donations to the yearly fund drives also help generate gifts from other sources . a high participation rate is " an endorsement of the institution by its graduates , " says robert payton , president of the exxon educational foundation , which provides money for scholarships and other educational purposes . alumni of ivy league schools and other prestigious colleges like wellesley and williams have traditionally been very loyal , and those schools have long done much to reinforce that loyalty and persuade large numbers of graduates to give . williams even awards trophies to the classes that achieve the highest participation rates . but many big schools find that cultivating a sense of loyalty is a challenge , because alumni don't identify strongly with the institutions . ohio state university is responding to this problem by organizing alumni around areas of interest , tailoring solicitations and events not only to entire classes but also , for example , to journalism graduates or friends of the library . city schools often face a similar challenge because their identities aren't as sharp as a school like dartmouth's . now , in seeking alumni donations , the school portrays itself as an entree into the american dream for generations of recent arrivals . for many schools , simply finding their alumni is the biggest challenge in fund raising . some colleges are trying to address it by organizing seniors before they graduate . marquette university , for example , is securing pledges from this year's graduating class for a special scholarship fund ; school officials say they expect half of the seniors to participate . soliciting gifts may be tougher now that lower tax rates and the elimination of the charitable deduction for taxpayers who don't itemize deductions have made it relatively more expensive to give . indeed , many colleges had a surge of support last december from alumni eager to contribute before the new tax law took effect . college officials , many of them in the midst of annual drives that end in june , say it is too early to tell how the tax changes will affect future fund raising . they maintain , however , that alumni make contributions out of a sense of loyalty to alma mater . no school has been more successful at building alumni loyalty than centre . centre " went by us like we were standing still , " says dartmouth's mr. eberhardt . centre's participation rate last year broke a record set by princeton university in . centre simply works harder at fund - raising than most other schools . for example , many colleges take several days , or even weeks , to send out a computerized acknowledgment of a gift . but centre staffers send a thank - you note with a handwritten message the day a check arrives . similarly , while all schools accept pledges for future donations , centre offers a special service that automatically deducts a monthly contribution from a donor's bank account . mr. nahm says people who participate in the program typically give four times as much as before they were in the program . mr. nahm , a research chemist by training , experimented with different approaches to find what would produce the best results . when he observed that alumni volunteers tended to spend as much time reminiscing as seeking gifts during phone solicitations , mr. nahm decided to try student volunteers . the result : shorter conversations and more donations . not all of his experiments worked out so well . but the tokens triggered metal detectors at airports ; mr. nahm says several alumni who were stopped and searched by security guards " were furious . " the school quickly discontinued the program . that aside , centre's fund - raising prominence has made the school's alumni happier than they've been since the college's football team beat harvard back in . " all of us like to be on a winning team , so there's a little momentum going , " says jame c. cundiff , a retired department - store executive who graduated from the school in . mr. cundiff says he and several friends have increased their giving five - fold since . outsiders have been impressed , too . last year , two foundations awarded centre a grant to teach its fund - raising techniques to six poorly endowed small colleges in appalachia . the university of pennsylvania showed its appreciation for mr. nahm's skills by hiring him away to run its development office . malaysian businessman tan sri khoo teck puat faced bank creditors for the first time since becoming embroiled in a million loan scandal at national bank of brunei and assured them they would all be repaid . about bank creditors , who have lent a total of several hundred million dollars either to national bank of brunei or directly to mr. khoo's companies , met with mr. khoo and his adviser , american express co.'s shearson lehman brothers inc. unit , in the ballroom of new york's sheraton hotel . mr. khoo , who addressed the three - hour meeting , proposed settling his debts over a three - year period through the sale of many of his assets . he and shearson lehman are seeking creditors' support for this plan so that they can then win the approval of the brunei authorities . similar sessions are to be held today in paris and at the end of next week in singapore . " mr . khoo has assets to cover his liabilities , but it can't be cash on the barrelhead , " said a banker who attended the new york meeting but requested anonymity . mr. khoo told the creditors they would be treated equitably . although immediate cash repayment wasn't possible , he said at the meeting , the proposal worked out with shearson lehman is " feasible and offers full payment with security . " the meeting with creditors was the first since november , when brunei seized and closed the independent national bank , owned by the khoo family . the government cited numerous business irregularities , including allegations of criminal wrongdoing by mr. khoo's associates . it has since been reported that of national bank's loans outstanding had been made to khoo - related concerns , often without proper documentation or security . brunei has filed civil suits against khoo - related companies in brunei , hong kong , singapore and malaysia for the recovery of about million they borrowed from national bank . " i recognize that the government of brunei has decided to close and liquidate nbb and a solution to the resulting financial issues must be achieved in light of that decision , " mr. khoo said in a statement issued by his singapore office . reaching a solution on the debt would require brunei's cooperation . when seized , national bank owed the equivalent of between million and million in interbank deposits to more than international banks and million to the brunei government . what went wrong with u.s. farm policy in the s is fairly simple : high federal price supports on a wide range of commodities priced american farmers out of the world market , with great damage not only to the farm economy but to u.s. exports as well . the obvious solution is to cut the support levels and price american commodities back into the market . anyone who doubts that will work should take a look at the cotton business . cotton has for years been one of the most grievous examples of federal destruction of a market . even before the s , high price supports for cotton had cost cotton growers the loss of a large share of their market to synthetics -- not to mention what they had cost consumers . but producers didn't feel much of the pain . consumers were not only paying dearly for cotton products but were also subsidizing the producers with tax dollars . the development of some very large and lucrative cotton farms in the south and southwest coincided with the decline in cotton demand . u.s. cotton prices plunged to cents from cents a pound , putting them just above the world price . demand for u.s. cotton rose dramatically . the agriculture department estimates exports at million bales this crop year , three and a half times the depressed level of crop year - . domestic use is expected to exceed million bales for the first time in years . the result will be a rapid rundown in the u.s. cotton surplus , with cotton loans outstanding at the commodity credit corp. at the end of this crop year expected to be down to three million bales from a recent peak of million bales . now that's the way to move that cotton . both the u.s. and world prices have risen significantly since last august . admittedly , bad crop years in india and the soviet union have partly accounted for the improved world market . but low prices on u.s. cotton helped capitalize on that opportunity . now let's look at the seamier side of the story . the cotton industry was not thrown on the mercies of the world market . it was guaranteed a price of cents a pound by a combination of " deficiency " and " market enhancement " payments . the farm program calls for the - cent " target " price to fall only slightly , to cents this year and to cents in . cotton is going to remain expensive for the taxpayers . moreover , the cotton industry hasn't stopped asking for federal handouts . the national cotton council of america , a trade group that encompasses farms , mills , cotton merchants and textile makers , is still demanding import protections , something a presidential veto prevented last year . it is ironic that just when the industry is reestablishing its own sales abroad it wants import barriers that would curb sales of foreign cotton and cotton textiles in the u.s . but then of course an industry that has been so well - cushioned by uncle sam might be expected to forget that world trade is a two - way street . with the world price having recovered from last year's levels and with surpluses declining , this would be an excellent time to allow the u.s. cotton industry to try its hand at competing on its own in the world market . as to import protections , it seems to us that consumers already have contributed quite enough to the cotton club's enjoyment . goldman , sachs & co. and kidder , peabody & co. took steps to reassure clients that business would continue as usual , despite the arrest of high officials at both houses in wall street's widening insider - trading scandal . news of federal agents' arrest last thursday of robert freeman , goldman sachs' head of risk arbitrage trading , and richard wigton , kidder peabody's head of arbitrage and over - the - counter trading , startled many of the new york - based firms' big clients . but the shock didn't appear to disrupt their business dealings with goldman and kidder . the two men were charged with insider trading , as was timothy tabor , until recently head of arbitrage at merrill lynch & co. and a former kidder peabody arbitrager . he was charged with trading on inside information while employed by kidder peabody . martin siegel , a former kidder peabody mergers and acquisitions executive until joining drexel burnham lambert inc. early last year , pleaded guilty friday to insider trading while at kidder peabody . he agreed to pay the government more than million in penalties . his message was that the firm wasn't implicated by the insider - trading scandal , clients and goldman officials said . officials close to goldman said the firm also reiterated that , based on a study conducted last year by two law firms , it believes mr. freeman is innocent of the insider - trading charges . goldman made the same assertion in a memorandum issued late thursday , after the arrests . goldman said friday that it will pay mr. freeman's legal fees . at kidder peabody , a unit of fairfield , conn. - based general electric co. , internal memos circulated to employees friday repeated the firm's public pronouncements that it hasn't violated insider - trading laws , an employee said . the affair is the second insider - trading scandal to touch kidder in the past three years . in , one of the firm's top brokers , peter brant , traded on inside information provided in and by r. foster winans , who at the time was a " heard on the street " writer for this newspaper . mr. brant pleaded guilty and awaits sentencing on three felony counts . kidder peabody wasn't implicated in the scandal . " i confess to being shocked , " said dave williams , head of alliance capital management corp. , a large new york money manager . " these are two of the best - managed firms on wall street . " james martin , head of the college retirement equities fund , one of the largest u.s. institutional investors , said , " one hates to think that people take advantage of inside information -- especially when it involves a stock we own . " cref , which has more than billion in assets , at the time of the traders' alleged offenses owned shares in both unocal inc. and storer communications , the two stocks cited in last week's arrests . " if legal action seems appropriate " to regain any money that cref might have lost in relation to the investigation , " we won't be shy about pressing a case , " mr. martin added . nevertheless , cref and many other institutional traders have sustained trading relationships with goldman and kidder for decades , and most voiced support for the firms . " i don't think this will lead to any changes in who we trade with . it isn't going to affect how we do business , " cref's mr. martin said . " these latest events will have no effect " on ford's relationship with the firm , he said . panhandle eastern corp. , a houston - based energy company , " stands by kidder , " said treasurer vernon rigdon . the company has used kidder for financial advice for at least years , he said . " it's a longtime , long - term relationship . it isn't going to be affected by this . " the affair left many clients wondering , however , who else the investigation might touch . a top executive of a big goldman sachs corporate finance client in the midwest , who asked not to be identified , also said he has no plans to switch underwriters . but " if this is the tip of the iceberg " and the scandal spreads to other officials at goldman and appears to undermine the firm's reputation , he said , he would sever the relationship . cref's mr. martin added : " the uncertainty in terms of who might be next is a problem . " general signal corp. said it realigned senior management to provide for " succession and to assign operational responsibility along strategic lines . " the maker of industrial equipment named four executives to the new position of senior vice president ; three will be responsible for the six new operational groupings and one will be in charge of administration . all will report directly to david t. kimball , chairman and chief executive officer . joel s. friedman , years old , former president of the company's rochester , n.y. - based mixing equipment co. subsidiary , will have the process control division reporting to him . john e. halter , , formerly a corporate vice president and in charge of all semiconductor operations , will be responsible for the semiconductor equipment , telecommunications equipment and defense electronics divisions . peter a. laing , , former president of the edwards co. subsidiary , farmington , conn. , will be in charge of the electrical equipment and transportation groups . theodore j. wiedemann , , formerly vice president , finance , was named senior vice president , administration . as part of the realignment , the company also said it was disbanding the office of the chief executive , which included mr. kimball , , mr. wiedemann , and two vice chairmen -- george j. demos , , and glenn e. ronk , . mr. ronk , who the company says plans to retire next year , was made an executive consultant . additionally , the company said j. robert hipps , , vice president and treasurer , and michael r. jacqmin , , vice president and controller , will exchange assignments " to give each the full spectrum of financial expertise . " n.v. philips of the netherlands and sony corp. are planning to jointly market world - wide a new product that philips acknowledges is a renewed attempt to revive the flopped video disk . the two big electronics concerns said they will introduce a compact disk that combines music with video , a hybrid product that the consumer electronics industry has dubbed " cd - v . " heretofore , compact disks contained only music . to play the new audio - video disks , the companies also will introduce a machine that can be linked to a television set . the machines will also be able to play standard compact disks as well as the conventional - inch and - inch video disks introduced in the late s , which consumers later spurned in favor of less - costly videocassette recorders . philips says this tactic is an effort to rejuvenate the video disk . the companies plan to unveil the new products in chicago in june , and in west berlin at a big european electronics show in august . " if you have an apparatus that can handle this ( audio - video ) disk " and , coincidentally , video disks , " it is quite logical that the software industry will introduce ( video disks ) , " a philips spokesman said in an interview from holland . the players will cost about the same as the fancier compact disk players now on the market , or to . industry analysts were startled by the effort to revive video disks . they said philips seems to be hoping that compact disks' popularity will aid the video - disk cause . " they think the magic of compact disks will rub off on video disks , " said david lachenbruch , editorial director of television digest , a trade publication . robert gerson , editorial director of twice magazine , another trade publication , speculated that philips may believe it is being timely in trying to popularize video disks because the vcr market is almost saturated . but he termed the video disk " a dead issue . " philips is , at the very least , sentimentally attached to video disk players . in , its magnavox brand first introduced video disks as magnavision . magnavox and sylvania , another philips brand name in the u.s. , stopped marketing video disk players in the u.s. in . " it will be important for the success of the new ( product ) that the entertainment industry and other compact disk makers be willing to bear the capital cost of starting up production and marketing products " based on the new technology , philips said . ford motor co. said it has submitted a bid to acquire vancouver , british columbia - based versatile corp.'s farm equipment business . industry officials said versatile has held talks with two potential suitors , ford's farm equipment division and deere & co. , on the possible sale of versatile farm equipment co . a ford spokesman acknowledged that the dearborn , mich. - based company had submitted a bid , but he declined to elaborate on the offer . officials of moline , ill. - based deere and versatile refused to comment on the reports of negotiations between the two companies . there weren't any indications of how much either deere or ford might be offering for the versatile unit . speculation has persisted that financially troubled versatile would try to sell its farm equipment division to raise cash . versatile's other businesses include shipbuilding , and oil and gas operations . last summer , deere , a maker of farm , industrial and lawn and garden equipment , terminated an agreement to buy the versatile division because of " delay and uncertainty " caused by a justice department antitrust decision . the agency later gave deere clearance to complete the purchase , but apparently not in time to rescue the initial agreement . deere has said , however , that it might consider reopening discussions with versatile . at that time , versatile said the book value of the assets totaled about million . the versatile unit produces four - wheel - drive tractors . ford said it was attracted to the versatile unit because it produces larger tractors , while ford makes smaller products . deere previously said it had expected " synergies in manufacturing and marketing " as a result of its initial plan to buy the versatile subsidiary . versatile had a loss of million ( canadian ) for the first nine months of , on revenue of million ; it hasn't posted fourth - quarter results . the company is seeking a debt restructuring ; at the end of , it had million of long - term debt and million of short - term debt . the company's agriculture operations account for about one - fourth of versatile's revenue . the federal aviation administration today will begin using new routes in and out of the new york area's major airports and is making other changes in flight paths along the east coast in an effort to reduce flight delays . donald engen , faa administrator , said the new procedures " will enable us to handle air traffic more efficiently by providing additional departure and arrival routes at key east coast airports and eliminating bottlenecks in the system . " the new procedures are part of the faa's " east coast plan , " an effort that began in . under the current phase , the faa is creating new departure and arrival routes for the new york area's commercial airports . it also is establishing separate flight paths and altitudes for jets and slower propeller planes and creating numerous new routes for commercial air travel between various cities . in addition , the faa said it is creating a new north - south offshore jet route to florida . and it is transferring some airspace currently controlled by its new york regional air traffic control center to the washington center . under a subsequent phase of the plan , due to take effect in september , the faa intends to make additional changes in routes and procedures for the new york area , as well as for airports in boston , philadelphia , baltimore and washington . an faa spokesman said the agency will closely monitor the new system and will restrict flights if necessary . gca corp. , the major u.s. maker of machinery crucial to semiconductor production , said it expects a financial restructuring to raise million in equity , million more than was anticipated . at the same time , however , the cash - strapped company said it expects to report a loss of million to million from continuing operations in , a larger loss than analysts were projecting . the additional equity investment is to come from gca's partners in foreign joint ventures , the company said . " the partners think enough to put some more money into it . that's the good news , " said stephen balog , an analyst with prudential - bache securities inc . " the negative is that the loss is greater . i suspect that an awful lot of that is accruals and write - downs of inventory , some of it in the joint ventures . " no successor as chairman or chief executive was named , but peter j. simone , years old , formerly senior vice president for customer operations and manufacturing , was promoted to president . gca appears to be moving closer to raising the capital it needs to stay in business . its struggles have been closely watched because it is the leading u.s. maker of wafer steppers , machines used to etch electronic circuits on silicon chips . its major competitor is japanese . because the latest gear usually is installed first in the country of manufacture , the demise of gca could handicap u.s. semiconductor companies in world - wide competition . gca's business is being hurt by a double whammy : the semiconductor industry is in a slump and some potential customers are uneasy about ordering machinery from a company with a clouded future . in , gca had a loss from continuing operations of million and a net loss , after losses from discontinued operations , of million . mr. rifenburgh said that " with a bad quarter behind us and a bad quarter in front of us , " the company is reexamining all of its financial reserves . the company previously indicated that the fourth quarter was a disappointing one . the company also plans to raise million by selling stock to existing shareholders , employees and institutional investors . under the restructuring plan , which is subject to approval by shareholders at a meeting scheduled for march , gca plans to offer holders of each of its existing shares of common stock the right to buy more shares at cents each . following the rights offering , gca said it plans a - for - reverse stock split . hallwood group inc. , a cleveland - based financial services concern , has agreed to arrange the purchase of any shares not bought by shareholders or employees . unless substantially all gca holders subscribe to the rights offering -- something analysts don't expect -- hallwood group and its investors will have effective control of the company . sumitomo and matra could end up with as much as of gca's stock . the company said in the sec filing that it will seek bankruptcy - law protection if the restructuring plan isn't completed . as reported previously , gca's plan calls for gca to pay lenders to whom it owes million about million to settle its debts . mr. rifenburgh said he will resign when the financial reorganization is complete because " that's what i was basically brought in for . " the analysts said they expect an executive more experienced in the semiconductor industry to succeed him . mr. rifenburgh wouldn't say who is likely to succeed him , saying that will be the responsibility of a newly constituted board . as part of the refinancing plan , hallwood group will name a majority of gca's directors . gca also said yesterday that albert b. cerand , , a - year veteran of international business machines corp. and most recently responsible for semiconductor development and manufacturing at ibm's essex junction , vt. , plant , was named vice president for long - term planning and strategic customer programs . michael f. werner , , who has been director of manufacturing operations , was named vice president for manufacturing . gca stock closed yesterday at , down cents , in composite trading on the new york stock exchange . president reagan's biographer , edmund morris , may be about to cross the line between writing history and making it . for the past two years , acting as the president's designated biographer , mr. morris has enjoyed unprecedented access to ordinarily forbidden sanctums of the white house . in a novel arrangement , the president has reportedly granted him at least one " substantial " interview each month , as well as access to cabinet and other high - level meetings . the arrangement has been lauded by scholars as a rare opportunity for a first - rate historian to capture history while it's fresh . but now , in a twist of the iran - contra affair that is stirring debate in both legal and academic circles , congress is considering subpoenaing both mr. morris and his notes in an attempt to find more about president reagan's part in the affair . the prospect threatens to turn a scholarly coup into a legal swamp , outraging the academic and publishing communities in the process . harvard political scientist nelson polsby asserts , " this kind of thing would kill any future efforts to do anything like this -- no one will ever trust or want to work with such a person again . " he insists that " morris's position has to be ' no ' to everybody . otherwise he'll compromise his position totally . " described by acquaintances as a serious scholar with a wonderful wit , he has studiously kept a low profile since random house signed what an official there says was a million contract for the reagan biography in late . ( white house authorities say mr. morris also has an agreement with mr. reagan , promising not to publish any of his research until at least two years after the president leaves office , but otherwise imposing no restraints ) . for the most part , mr. morris has been an unobtrusive white house presence , scribbling notes in tiny , cramped handwriting , and at least once , at the u.s. - soviet summit in geneva , according to the president's son ron , pressing his ear to the door as the two world leaders met . to date , none of the congressional committees investigating the president's part in the iran - contra affair has called mr. morris to testify . frustrated by a number of witnesses who said they had kept no notes of important white house meetings , and stymied by contradictory testimony they had been unable to clarify , the investigators recently began to consider subpoenaing both the president's private diaries ( he has promised " relevant portions " ) and mr. morris's notes . one committee member , sen. william cohen ( r. , maine ) , confirms that the staff is " exploring " the possibility of calling mr. morris . " i'm sure it's relevant , " he says of mr. morris's possible testimony , " the question is whether it's appropriate . " another committee member , sen. howell heflin ( d. , ala. ) , suggests mr. morris " may be able to refresh the president's recollection in a way no one else could . " but legal scholars suggest such a subpoena would stir a nest of complicated legal problems . floyd abrams , a new york attorney who specializes in first amendment law , says , " it's an area that's plagued with uncertainty . " he suggests that should mr. morris decline to testify , he would likely get the same sort of protection against divulging confidential information that journalists might receive . " he could make a serious claim to serving first amendment purposes of the highest order , " says mr. abrams , " by preparing a book that will reveal heretofore unknown and unknowable information of the highest order of interest to the american public . " he notes that mr. morris could cite no executive - privilege arguments , since he's not a member of the executive branch . and interestingly , none of the material the president has shared with mr. morris , which reportedly includes the first few years of his own white house diaries , can be covered by executive privilege now that this material has been shown to someone outside of the executive branch , mr. abrams says . in the past , congress has backed down in such situations . when tv newsman daniel schorr refused in to disclose to an investigating committee how he obtained a copy of the pike report on the central intelligence agency , he was never held in contempt . while mr. morris might be able to turn away a congressional subpoena , legal experts say he'll be on far shakier ground if he's called either by the special prosecutor conducting the criminal investigation into the matter , or by any of the defense attorneys involved in potential charges . the supreme court has established , in a case called brandsburg vs . hayes , that every citizen has a responsibility to testify if he has witnessed a crime . academics and publishers , however , worry that if mr. morris were compelled to divulge his research prematurely , it would forever chill projects from which , as historian henry steele commager puts it , " the public can profit from inestimably . " mr. morris's editor at random house , bob loomis , says that , " we're naturally very anxious and very disturbed by such things . congress has to realize that this kind of thing could be really detrimental to free access to information and freedom to publish . any threat would be horrendous . " but mr. morris , whose wry manner seems to have made him a popular white house confidant , is apparently unshaken by the brewing turmoil around him . he is said to have told at least one white house official that he hopes lawmakers do call on him to testify . his research , he has joked , would simply " put them to sleep . " the dollar rose yesterday on rumors that senior monetary officials will meet soon to deal with currency instability and that the u.s. plans military action in the mideast . the currency also benefited from a continued positive reassessment of the u.s. economy . for days , the foreign - exchange market has been abuzz with rumors that finance ministers and central bank chiefs from the u.s. , japan , west germany , britain and france -- known as the group of five , or g -- will meet to try to stabilize volatile currency markets and support the dollar . that speculation has been fueled by a current meeting in florence , italy , where senior finance and treasury officials from the group of seven -- the group of five plus italy and canada -- are preparing an agenda for the june economic summit . currency dealers contended that the officials also could make preparations for a meeting on monetary and currency matters . " whenever senior government officials meet , it's natural for traders to anticipate all possible outcomes , " said james vick , senior corporate trader at manufacturers hanover trust co . " in this case , that includes the possibility of a g - meeting on currencies . " most of the dollar's climb yesterday occurred in early european trading , where the currency also was buoyed by rumors , which proved untrue , that u.s. forces had begun an invasion of lebanon . in an attempt to damp speculation about possible u.s. military action in lebanon , the pentagon said later in the day that one of two aircraft carriers patrolling off lebanon would begin a port call and that four of its escort vessels would return home . meanwhile , expectations persisted that the bank of japan will lower its discount rate by percentage point , to . some japanese press reports have predicted a rate cut will come as soon as early next week . while the move has been expected for some time , lower japanese rates would reduce the yen's attraction to speculators . koichi tsukihara , senior analyst at sumitomo bank in tokyo , said the timing of a japanese discount - rate cut is linked to prospects for a g - meeting . tokyo analysts believe the bank of japan is resisting u.s. pressure to cut the key rate until they can secure an agreement on a coordinated effort to support the dollar . hidehiro iwaki , an analyst at nomura research institute in tokyo , said a rate cut would do little to boost the economy because there already is ample liquidity in the banking system . regarding the u.s. economy , dealers and economists said that a continued reassessment of fundamentals has given the dollar some temporary support . anne parker mills , a vice president at shearson lehman brothers inc. , noted that recent positive u.s. statistics for leading economic indicators , new factory orders and single - family home sales contrasted with recent west german data . those figures pointed to higher german inflation and unemployment , plus falling industrial production . yesterday , the german economics department reported that new manufacturing orders for december were unchanged from november . in addition , a week ago , the commerce department said that the u.s. trade deficit narrowed to billion in december from a revised billion deficit in november and the billion deficit originally reported for that month . many traders are watching to see whether today's release of january u.s. employment data confirms the positive tone of other recent u.s. indicators . " despite the fact that the trade number will probably be significantly revised , it still points to a considerably less discouraging picture of u.s. trade than the one we were looking at a week ago , " said ms. mills . because of this sentiment , analysts said some money managers are now looking for opportunities to sell foreign currencies short . in a short sale , traders sell borrowed currencies on the expectation that they will be able to buy them back at a lower rate . moreover , despite worries that the bundesbank would continue to tighten monetary policy even after cutting its discount and lombard rates two weeks ago , the west german central bank has aggressively lowered interest rates by adding liquidity to the banking system . that , said ms. mills , has enhanced the dollar's appeal by widening the difference between eurodollar interest rates and their german equivalent to more than two percentage points , compared with a little more than one point in december . the british pound fell to from . traders noted that even though it declined against the dollar , britain's currency advanced against those of its european trading partners , because oil prices rose after falling for three straight days . another currency that has held firm lately has been the canadian dollar . but yesterday , john crow , governor of the bank of canada , told reporters in ottawa that he felt the currency's current level was reasonable . that was enough to knock the canadian unit down to u.s. cents from cents , said traders , who speculated that mr. crow was concerned about a rising currency hurting canada's exports . the canadian dollar stood at u.s. cents in late new york trading , down from cents wednesday . on the commodity exchange in new york , gold for delivery this month settled at an ounce , up . estimated volume was a heavy five million ounces . gold was quoted at an ounce in early trading friday in hong kong . also contributing to this article was masayoshi kanabayashi . the seven regional bell operating companies roundly hailed the justice department's support for further deregulation of telecommunications , portraying the agency's stance as a positive stroke for competition and consumers . but their former parent , american telephone & telegraph co. , lambasted the department as anti - competitive and anti - consumer . so did a coalition of big telephone customers , labor , consumers and others . thus the stage was set for more major battles in washington this year by the baby bells , which want flexibility to expand their role in american business , and by their opponents , which want to block that expansion . the department urged federal judge harold greene , who enforces the accord under which the bell system was broken up , to permit the regional concerns to offer computerized services and long - distance calling and to make telephone equipment . under terms of the breakup , they are banned from those areas . " we are very happy with the recommendations , " said zane e. barnes , chairman and chief executive officer of southwestern bell corp. , st. louis . in atlanta , john l. clendenin , chairman and chief executive of bellsouth corp. , called the action " a step in the right direction . " in philadelphia , thomas e. bolger , chairman and chief executive of bell atlantic corp. , said , " it is a giant step forward in bringing benefits of full competition to the public . " new york - based nynex corp. , san francisco - based pacific telesis group and englewood , colo. - based u s west inc. also welcomed the recommendations . the seven were particularly happy with the department's stance on computerized services and manufacturing , which recommended removal of all limits on the companies' involvement in those businesses . ending those restrictions " will give us a chance to maximize the use of our ( telephone ) network and central offices , " said southwestern bell's mr. barnes . the companies have long argued that it is uneconomical and inefficient for their multibillion - dollar networks and computerized central - office switches to exist and not be used in more and different ways . if judge greene heeds the recommendations , the companies still couldn't introduce computerized services quickly , because the federal communications commission has yet to complete numerous guidelines related to that market . all seven companies were cautious in predicting whether judge greene would heed the recommendations . " it is too early to predict what will happen , " said mr. bolger of bell atlantic . " however , the strength of the ( justice department's ) report should weigh very importantly on any decision by the court . " and a decision probably will take several months . " this isn't like the sun is going to rise tomorrow morning and it will be a new bright world , " ameritech's mr. weiss said . judge greene certainly will have to weigh a flood of arguments against the recommendations , which were immediately and harshly criticized from several quarters . " three years ago , the justice department broke up the finest telecommunications business in the world -- the bell system , " at&t said in a statement . " now that same justice department wants to change the rules again and risk re - creating the chaos and gridlock that characterized the industry just a few short years ago . " at&t raised the specter of renewed controversies and antitrust litigation . " customers , investors and employees would go back to square one , " the company said . in kansas city , mo. , us sprint communications co. said it will " submit our comments very soon to judge greene . " a spokesman said us sprint has previously taken the position that bell operating companies shouldn't be permitted to enter the interstate long - distance market , " even with some limitations . " us sprint is jointly owned by gte corp. and united telecommunications inc . the agency's stance " sets the stage for a major fight , with seven companies and a handful of government administrators on one side and the rest of the industry on the other , " said brian moir , the washington representative for a coalition of consumer groups , big phone users , labor and others . he said his group would take their battle to capitol hill and to judge greene's court . " we had come to expect better from the justice department in recent years , " he said . the regional companies said they expected the reaction and didn't expect their opponents to accept the recommendations without a fight . a lot of interested parties are going to take strong positions on all of these issues . " american aggregates corp. said it agreed to be acquired in a tender offer by arc america corp. , a unit of britain's consolidated gold fields plc , for a share , or million . american aggregates , an ohio sand , gravel , limestone and slag mining and processing concern , said that directors of the three companies approved the definitive agreement and that american aggregates' directors recommended that holders accept the offer . in over - the - counter trading yesterday , american aggregates was quoted at bid , up . american aggregates has about million common shares outstanding . the tender offer , which will commence soon , will be followed by a merger in which holders of any remaining shares will also receive a share . in connection with the transaction , arc america was granted options to purchase about of american aggregates' shares outstanding by certain shareholders , including directors of the company . the company also granted arc america an option to purchase additional shares , which would give arc america a total of of the shares outstanding , including the earlier options . arc america , based in newport beach , calif. , is a mining company and maker of pipes . following the acquisition , american aggregates will remain in greenville , ohio , and become a subsidiary of consolidated gold fields . alltel corp. said it expects to report that fourth - quarter profit from continuing operations increased at about the rate of the previous period , but that net income was sharply lower for the quarter and the year because of an investment write - down charge . the telecommunications holding company's chairman and chief executive officer , weldon w. case , and joe t. ford , president , declined in an interview to estimate the company's net , but they said they have no quarrel with analysts' estimates that profit for the year before the write - down was in the area of million , or to a share , compared with net of million , or a share , on a smaller number of shares , in . that estimate would indicate fourth - quarter profit from continuing operations of cents to cents a share , up from cents on a smaller number of shares a year earlier . in , the company had an average of million common shares outstanding . about million of the revenue came from telephone companies , they said , up from million in . revenue from equipment distribution and other operations was about million , up from million in the previous year . as previously reported , the company , which provides local telephone service in states , will have an after - tax charge of about million , or cents a share , in the fourth quarter , reflecting a write - off of its investment in argo group inc. , new rochelle , n.y . argo , which provides long - distance telephone service via satellites , recently filed for protection from creditors under chapter of the federal bankruptcy code . the company is seeking a buyer for its operations . alltel owns about of argo . alltel also is " evaluating the possibility " of writing down its stake in telecom plus international inc. , in light of that company's recently announced plans to sell most or all of its assets . alltel owns about million shares of the supplier of private communications equipment . alltel said its capital spending for was about million , and it will remain at about that level this year . spending in was million . the company said it expects to fund capital spending internally . last year , alltel said it came within about million of meeting its own investment needs . the tense lockout of workers at ibp inc.'s beef - packing plant in dakota city , neb. , is setting the tone for other packinghouse contract talks scheduled this year , signaling that the relatively peaceful labor relations of the early s are over for the beef industry . the stakes in this ibp dispute are high for all sides . the united food and commercial workers international union is trying to regain credibility and stop a membership slide that was caused partly by contract concessions it granted over the past decade . also , the dakota city plant is the only ibp plant represented by the ufcw . " we need to maintain a presence at ibp , " says lewie anderson , president of the union's meatpacking division . ibp , a unit of occidental petroleum corp. , and the industry see the dispute as their first line of defense in holding the line on wages while the beef business tries to stage a comeback in grocery stores . " what happens to ipb is of great interest to the industry , " says warren tomlinson , attorney at holland & hart , which represents monfort of colorado inc . the company started the avalanche of wage concessions in the late s by building new plants in small cities in the corn belt , using unskilled labor working for small - town wages . all the other packers are watching the negotiations closely . " everyone wants to be even with this - pound gorilla , " says one labor attorney who works for meatpacking companies . says mr. anderson : " they set the wage pattern . they control what the competition pays by their size and power . " the issue at dakota city is fairly simple . the company wants to freeze wages for three years . the union , which accepted a rollback of more than a dollar an hour in , rejected the freeze - . when the contract expired dec. , the company locked the union out . large supplies of beef , excess capacity in the industry and fairly sluggish demand have kept the lockout from having any impact on beef prices , analysts said . local cattle prices have fallen as much as cents a pound below prices elsewhere , says bruce ginn , economist for lbas consulting group , overland park , kan . but " you can shut down a plant like this and the consumer isn't going to know a bit of difference , " he says . the million - member union decided in late to hold the line on wage concessions . it has made progress in the pork sector , winning wage increases in several pork - packer contracts in and . " we've rounded that corner , " says mr. anderson . but , mr. anderson concedes , " that's not the case in the beef sector . " that's hurt the union's credibility , say packers , and the union is losing membership . " a growing number of workers perceive the union has less to offer than it used to , " says a spokesman for ibp . also at stake for the union is its organizing efforts at other plants . the ufcw appears to be making headway in certification efforts at two other ibp plants , labor sources indicate . but , the union has had a violent strike at dakota city every time its contract expired since . " if he ( mr. anderson ) can't demonstrate after so many years that he can deal with ibp at dakota city , " the union could lose the votes at the other plants , said a lawyer close to the dispute . " if workers at monfort see violence and a strike every three years , they might not sign " cards authorizing a certification vote , says mr. tomlinson , the monfort attorney . meantime , the union is suffering defection and impatience by its younger members , who didn't go through the violent strikes of the s and s , says m. lee bishop , a labor attorney at isham , lincoln & beale , chicago . those younger members are tired of wage concessions and have led revolts against more loyal ufcw leaders at geo . a. hormel & co. , including a nasty dispute in austin , minn. last year , and at a john morrell & co. plant in sioux falls , s.d. morrell is a unit of united brands co . ibp also says it needs to win this battle ; its objective is to keep wages in line . the nation's cattle herd is shrinking , exacerbating the industry's overcapacity , and poultry producers have become more efficient . " we can't remain competitive and viable if we don't keep our wages competitive , " says ibp's spokesman . ibp said its base wage of an hour is above the industry average . all the other packers have imitated ibp " ibp is no longer the low - cost producer and it has lost the competitive advantage of its innovation , " he says . great northern nekoosa corp.'s fourth - quarter profit more than tripled on an increase in sales , william r. laidig , chairman of the paper company , said . mr. laidig credited the earnings improvement in particular to cost - cutting measures . the weaker dollar and the overall strength of the u.s. economy also played important roles , he said in an interview . these three factors fueled a surge in great northern's earnings throughout , and mr. laidig said full - year profit was up about from on a increase in sales . but in the early quarters of , mr. laidig added , great northern expects only to keep pace with fourth - quarter earnings levels , although he expects the full year to be " very good " for the company . he wouldn't make any specific projections . mr. laidig said fourth - quarter profit totaled approximately million , or about a share , compared with million , or cents a share , in the year - earlier period . sales totaled million , up from million . for the full year , mr. laidig said profit reached about million , or about a share , up from million , or a share . sales totaled about billion , compared with billion in , he added . in addition , mr. laidig said mill operations generally were made more efficient through greater use of computerized control systems . he also said mills' energy costs were trimmed by substituting bark and forest residue for oil and gas to run machinery . mr. laidig said the weakness of the u.s. dollar against many major foreign currencies " regenerated " the u.s. paper industry's export market in . at the same time , paper imports to the u.s. declined , he said . memory metals inc. asked a federal court to help it thwart an attempt by shareholder ernest barbella to gain control of the company's board . mr. barbella , who said he owns about of memory metals' common shares , began soliciting other shareholders earlier this month to oust memory metals' seven directors and replace them with a new five - member board . memory metals , based in stamford , conn. , develops shape - memory alloys , which are metals that change shape in response to temperature change . in the fiscal year ended june , the company had a loss of million on sales of . memory metals' chairman and chief executive officer was removed from office in october and its president resigned . m. brian o'shaughnessy was elected to the three positions dec. . the company sued mr. barbella and five others in federal court here friday . the suit claims mr. barbella's regulatory filing , which was part of his solicitation of other holders , was " false and misleading " because it didn't include information about securities - law violations of two individuals purportedly associated with him , one of whom " is soliciting consents on behalf of barbella and his nominees in violation of law . " mr. barbella is countersuing the company's directors , claiming they've " wasted corporate assets " to ensure their positions . in an interview yesterday , he denied the allegations in the company's suit . " i have absolutely no involvement with either of the two parties named in the suit , " mr. barbella said . he called the suit a " desperate attempt on their part to smear me because they suspect they don't have a lot of friends among shareholders . " interest rates are likely to move lower in coming months despite the woes of the u.s. dollar in the foreign exchange markets , according to many bankers and economists . although the dollar's recent weakness caught forecasters off guard , these analysts say the currency turmoil only will delay the move toward lower interest rates . they predict business activity will slow sharply this quarter , leaving the federal reserve system with little choice but to ease credit conditions further . the fed will reduce its discount rate to by late march , many analysts contend . the discount rate , now / , is the fee the fed charges on loans to banks and savings institutions . " i still think we'll see a further decline in short - term interest rates , although not as immediately as i would have expected " just a few weeks ago , said kathleen cooper , senior vice president and chief economist at security pacific national bank in los angeles . the economy is " far from robust , " she said , adding that a discount rate cut is likely late this quarter or early in the second quarter . analysts generally estimate that the report will show the gross national product expanded at an annual rate of between and , after adjusting for inflation . that would be little changed from the third quarter's pace . but economists say the fourth - quarter figure may be misleading , bloated by a wave of spending stemming from the new tax law that went into effect jan. . they say much of the economy's strength in the final three months of may have been borrowed from this quarter . " the fourth - quarter numbers should be taken with a grain of salt , " said samuel kahan , chief financial economist at kleinwort benson government securities inc. in chicago . he said it's questionable whether the momentum developed late last year can be sustained . mr. kahan predicts sluggish growth this quarter , with gnp increasing at only about a annual rate . a. gilbert heebner , executive vice president and economist at corestates financial corp. in philadelphia , says will be a " sluggish year . " he sees a first - quarter growth rate of between and . that , he said , would be slow enough to prompt the federal reserve to lower the discount rate to by late march . the dollar will remain weak " throughout most of the year , " mr. heebner contended . but fed officials will focus their attention more on economic conditions than on the dollar's performance , he argued . the dollar's unexpected plunge last week jarred the credit markets . bond traders feared that foreign investors , who have amassed huge amounts of u.s. treasury bonds in recent years , might shy away from buying more u.s. securities because of the dollar's precipitous decline . moreover , many expressed concern that the drop in the dollar will lead to higher inflation , the archenemy of fixed - income securities . " there are definite inflation risks " in the dollar's steep slide , said robert a. brusca , senior vice president and chief economist at nikko securities co. international . as a result , the fed won't lower its discount rate " anytime soon , " he predicted . he also contended that the economy will accelerate this quarter , growing at about a annual rate . he expects interest rates to rise , with the yield on - year treasury bonds soaring to / by midyear . " bonds offer more risks than rewards right now , " he said . but he argues that the economy will be so weak early this year that the fed will feel obligated to lower its discount rate by march . he also expects the banking industry to lower its prime , or base , rate on corporate loans to late in march from the current level of / . " however , i expect the rate declines to be short - lived , " mr. brinner said . the prime rate will return to / in the third quarter as economic growth resumes and inflation averages about , he contended . there is " better than a - chance " of a discount rate cut this quarter , said w. lee hoskins , senior vice president and chief economist of pnc financial corp. unlike many other forecasters , though , mr. hoskins expects a reduction of only a quarter of a percentage point to / . nonetheless , mr. hoskins contends that long - term bond yields won't decline much further . " we don't see much of a play in bonds , " he said , adding that investors still are " concerned about inflation . " he predicts that the consumer price index will rise at an annual rate of around late this year . that lowered the yield to from . the government's / notes due increased to / from / , trimming the yield to from . interest rates on short - term treasury bills edged lower . the rate on the treasury's latest - week bill declined to bid from thursday . the bid on the latest - week issue fell to from . some of sen. claiborne deborda pell's colleagues say the new foreign relations chairman is absent - minded , and he agrees his memory sometimes fails him . they say his legislative interests -- such as oceanic law and converting to the metric system -- have been esoteric , and he takes no issue with that . they say he lacks dynamism , and he concurs . " the problem i'll have is i have the uncanny facility for making the most exciting matters gray , " princeton - educated sen. pell drones in his aristocratic accent . " i'm a fairly modest fellow , " the millionaire rhode island democrat says , " and time will have to show what sort of foreign relations committee chairman i will be . i am less dynamic than many , but i have my own course which i set and try to follow . " as a traditional liberal democrat , sen. pell's course now is to set legislative actions that will silence his critics and put senate democrats on the foreign - policy map ahead of the presidential - campaign season . he has scheduled a flurry of hearings that are engineered to take on a recalcitrant president over ratification of two long - forgotten u.s. - soviet nuclear testing treaties . but in an institution where force of personality is often a key to influence , skeptics wonder whether sen. pell is up to his new post . many capitol hill insiders fear that the - year - old senator is too much the kindly patrician to master the nitty - gritty of consensus building , managing floor battles and overriding or avoiding presidential vetoes . he has already had his first clash with the white house over verification language that could essentially kill treaties that mr. pell hoped would start momentum in the area he says he'll fight for hardest -- arms control . at best , congressional insiders say , he will come under the thumb of majority leader robert byrd , ( d. , w.va. ) , who expanded the size of the committee to from against sen. pell's wishes . at worst , they say sen. pell will preside over the sinking of the committee into old divisions that could again make it more of a debating group than a policy leader . its influence had been on a decadelong decline until reversed by the chairmanship of sen. richard lugar ( r. , ind. ) . " sen . " pell will have to think through whether legislation will pass or is doable . is it something the president will sign ? or will the committee simply become a ginger group , a font of ideas without any assurance they are going anywhere . " sen. byrd argues that sen. pell , a former foreign service officer who has spent more than two decades on the committee , could surprise people . he once chose mr. pell to lead a group of democratic senators who met with the late soviet leader yuri andropov because of the senator's cool head . " there are show horses and workhorses , and pell is a workhorse , " says sen. byrd . " the same things have been said about me -- low key , no charisma . that doesn't bother me . i always think i've got a little more on the ball than the others knew about . " sen. pell's record is indeed more impressive than his washington image , not a difficult feat , considering that congressional staff members of both parties refer to the eccentric legislator as " the senator from outer space " and " senator magoo . " and his " pell grants " have provided federal aid to millions of college students . " that's more than i have done , " says sen. byrd . part of sen. pell's image problem is that he is an anachronism in the media age . he wears oversized , ill - cut suits -- some of which once belonged to his father -- that fit the s far better than they do his bony frame . his jargon is as dated as his dress : he will admit to being " at sixes and sevens " over an issue , and he will speak of education as the " warp and woof " of our society . he sometimes greets journalists with the phrase , " formal greetings , " and he apologizes for sounding " too peachy " when speaking of the high calling of public service . his hideaway office in the capitol is decorated from carpet to vaulted ceiling with an array of ancestral mementos . there is the late th century drawing of the jockey on the first american horse to win the english derby , a steed owned by a great , great granduncle . the room is littered with memories of his father , who was franklin d. roosevelt's envoy to portugal and a new york congressman from the city's silk - stocking district . he wears his father's belt with his dark suit , a clashing tan with a bronze buckle . sen. pell has been faulted by some rhode islanders for ignoring bread - and - butter issues and pursuing his personal interests -- such as oceanography and railroads . " i've been vastly criticized in rhode island for my interest in seaweed and choo - choo trains , " he says . he defends himself by noting that his passion for trains resulted in the modernization of the northeast rail corridor . rhode island also gets million in federal funding each year for a " sea grant " ocean research college . " they look on him favorably because there is no question about his honesty and integrity or having a hand in the cash register , " says elmer cornwell , a brown university political scientist and member of the rhode island house of representatives . but what pell watchers like talking about more than his past or his legislative history are the anecdotes that follow the senator like a shadow . last year , for example , sen. pell grew confused by the rigors of speaking before three different committee hearings -- foreign relations on jordanian arms sales , labor on requiring manufacturers to list salt content on food labels , and before the education subcommittee on financing federal scholarships for poor students . mr. pell rushed into the salt - labeling hearing , announced he was expected momentarily at the foreign relations committee and began reading a statement on the urgent need for pell grants . after a minute or two , sen. howard metzenbaum ( d. , ohio ) mercifully whispered in his ear . " i apologize deeply , " mr. pell said , smiling sheepishly , then waving his hand and fleeing . the senator asked the aide in his formal manner , " to whom am i indebted for these fine rubbers ? " " i got them at thom mcan's , senator , " the aide answered . " well , do tell mr. mcan , " replied the senator , " that i'm much obliged to him . " laura hunter played her saxophone all over town last month . in two weeks , she played for children , the elderly , ex - convicts , kiwanis club members and workers at a plastics factory . ms. hunter , a tall san diego woman of , would quote w.c. fields : " a gentleman is a man who can play the saxophone but doesn't . " and then she would let loose with works as diverse as a mozart rondo and " amazing grace . " school kids wrote her crayoned fan letters . a roomful of slightly tipsy bankers gave her a standing ovation at their christmas party . she also got raves from aluminum co. of america , which paid about to bring her and two other performers here . the saxophonist is the ninth artist in three years that alcoa -- one of the biggest employers in town -- has sponsored in evansville . gary biviano , a spokesman for the local branch of the pittsburgh - based company , says : " this far surpasses any program i've ever seen . we get at least letters a year . sometimes you give hundreds of thousands of dollars and you don't even get a thank - you note . " alcoa and ms. hunter were matched up by new york - based affiliate artists . today , its programs show how corporations are starting to shift their way of helping the arts -- to help themselves as well . affiliate artists was begun by two opera singers in , to give young american singers extra exposure and income . baritone richard clark , its president and a founder , says the group soon began auditioning instrumentalists , dancers , mimes and actors , too . and it began creating such long - term sponsorships as a xerox corp. program for pianists and an exxon corp. venture giving orchestral residencies to budding conductors . never does an artist deliver a direct sales pitch , mr. clark says . " they don't sell sears refrigerators when they sing , " he says . " they just thank sears for making it possible . but we always promised companies to give them much more bang for the buck than their charities would . all along , we used the term ' investment. ' " although they expect no direct financial return , the patrons enjoy various benefits . general electric co. brings affiliate artists performers to communities where it has plants because the program fits two of its philanthropic goals : helping young artists and bringing the arts to new audiences . a one - year contract providing three artists for two weeks each costs a company about . much of the work of scheduling performances and shepherding the artists falls to a local producing organization , often an arts council . performances -- called " informances " because they are informal and informative -- combine art and chat to help engage neophytes in the audience . unicover corp. , a mail - order stamp company that employs about people in cheyenne , wyo. , uses the program to " be a good corporate citizen , " says unicover's president , james a. helzer . beyond that , he says , improving the cultural scene makes cheyenne " a more salable commodity " with prospective employees . elsewhere , corporate patronage has served as a cultural stimulus . in buffalo , n.y. , bristol - myers co.'s westwood pharmaceuticals subsidiary recently brought affiliate artists performers to its employees ; a side effect was an increase in employee subscriptions to the local orchestra . " when we started three years ago , we practically had to bribe employees to come to the conference room to see artists , " says a westwood spokesman . while the affiliate artists format excludes direct sales pitches , the group is encouraging corporate patrons to treat sponsorships as a marketing expense . " until the early 's , we mostly dealt with the charitable arm of companies , " says mr. clark . " now we are going after the public - relations and marketing budget . we believe we can provide a service to corporations , which justifies a real investment , rather than a charitable contribution . " one reason for the shift is the belief that corporate philanthropy for the arts has peaked . judith jedlicka , the president of the business committee for the arts , a new york - based nonprofit organization , says , " companies are more bottom - line - driven , and we expect a decline in total corporate support for the arts this year , " after years of increase . " we see a move away from the notion of pure philanthropy to a stance where you form an alliance with the arts to help meet your business goals , as well as help the arts . " a spokesman for affiliate artists says : " they are repositioning themselves as a specialty retailer , more than just a general merchandiser . " the cadillac division of general motors corp. has enlisted affiliate artists in an ambitious marketing plan for its new luxury car , the allante . cadillac is sponsoring chamber concerts featuring affiliate artists , mostly at the homes of wealthy people around the country . an allante will be parked " discreetly " at most of the houses , says mr. clark , and cadillac will be mentioned during national radio broadcasts of the concerts . " we're looking to sell less than pricey cars a year , " says a cadillac spokesman . prospective buyers , he adds , " are the very top opinion leaders , and you have to reach them in nontypical ways . they don't spend a lot of time watching tv . " affiliate artists hopes to help pitch more products . it is dreaming up more special programs that companies can underwrite , including an international exchange of conductors and a new musical . also new : a service offering any of the affiliate artists performers as entertainers for corporate meetings and conventions . in all of this , affiliate artists hasn't altered its original mission : to help artists . mr. clark boasts that among singers alone , current and former affiliate artists performers have sung with new york's metropolitan opera lately , and with the new york city opera . " this program made me realize what's important isn't that every technical thing goes right , but that i communicate something , " says ms. hunter , now in her third year with affiliate artists . " audiences aren't as threatening anymore . there are horrendously difficult pieces i have now played times as an affiliate artist : money can't buy confidence like that . " five big banks reported fourth - quarter earnings gains of to , as the new tax law prompted some big one - time gains that were partly used to offset increases in loan - loss reserves . barnett banks of florida inc. , however , reported a earnings decline for the quarter , because of an extraordinary charge associated with costs of acquiring a florida thrift . loan losses were up at some banks . " fourth quarter is typically cleanup time , " said james mcdermott , director of research at keefe , bruyette & woods , a securities firm specializing in bank stocks . investors can expect " reserve building and aggressive write - offs ( of bad loans ) at many banks , " he said . however , mr. mcdermott said these will be offset in many cases by one - time gains on the sales of buildings and other assets and on securities that banks obtained in corporate debt restructurings . on average , keefe bruyette is predicting that profits at the country's largest banks will rise to in the fourth quarter of and to for the year . " we think the scenario of moderate economic growth and stable - to - lower interest rates will produce a favorable operating climate for banks in , " he said . net interest income increased , but profit from trading activities and gains from the sale of investment securities declined in the quarter . chemical said its provision for loan losses about doubled for the quarter , to million from million a year earlier . the company wrote off million in loans for the quarter , almost double the year - earlier million . for the year , the loan - loss provision totaled million , up from million , and the company wrote off million in loans , up from million . nonaccruing and renegotiated loans totaled billion at year's end , up from billion a year earlier . net interest income on a taxable - equivalent basis in the quarter rose to million . chemical said the figure would have risen without downward adjustments in net interest income to reflect the impact of a reduced tax rate on income from leveraged leases . such taxable - equivalent income is income from tax - exempt and tax - favored assets that is inflated to a level that would produce the same results if the assets were fully taxable . trading account profit was flat at million , and foreign exchange trading profit fell to million from million . gains on sales of investment securities fell to million from million . first chicago's fourth - quarter profit rose as the new tax law prompted big gains from venture capital investments and the leasing business that offset higher personnel costs and a bigger provision for loan losses . gains from the sale of equity securities -- mostly investments made by the banking concern's highly profitable venture capital unit -- more than doubled to million from million a year ago . many of the gains were from sales completed in to take advantage of more favorable provisions of the old tax law . first chicago , also because of the new tax law , revalued its leveraged lease portfolio , resulting in an after - tax gain of about million . soaking up some of those one - time gains were bigger non - interest expenses -- million , up from million in last year's fourth quarter -- attributed to higher salary and bonus costs and anticipated costs of scaling back some overseas and domestic operations . nonperforming loans -- typically those days or more delinquent -- declined to million from million at the end of the third quarter . net interest income declined to million from million a year ago because of the lease portfolio revaluing . net interest income would have risen slightly except the revaluing effectively transferred some income from the net interest category to a reduction in tax expenses . foreign exchange trading profit rose more than for the quarter to million , though bond trading just broke even , down from profit of million a year earlier . pittsburgh - based pnc , benefiting from higher net interest income , gains from investments and higher trust income , posted an rise in fourth - quarter profit . net interest income increased to million , primarily because of growth in loans and investments . pnc doubled its provision for loan losses to million in the quarter from a year earlier . net loan write - offs rose to million from million . for the year , the loan - loss provision climbed to million -- including a second - quarter million after - tax provision for additional reserves against international credit exposure , mainly in mexico -- from million in . net loan write - offs for totaled million , up from million in . trust income for the quarter increased to million . fourth - quarter gains from sale of investments jumped nearly sevenfold to million . bank of new england corp . bank of new england's fourth - quarter profit rose on the strength of higher trading and other non - interest income , as loans rose sharply during the period . profit for the year rose . the number of shares outstanding increased in the quarter and year . the company's non - interest income for the quarter climbed to million from million a year ago . loans grew by billion in the fourth quarter , which had a " dampening " effect on fourth - quarter earnings because of the accompanying increase in loan - loss reserves , the company said . for the fourth quarter , the company's provision for loan losses rose to million from million a year earlier . continental illinois corp.'s fourth - quarter profit rose on a big increase in non - interest income and slightly lower expenses . the number of common shares and their equivalents decreased and the profit applicable to common increased . a gain from tax - loss carry - forward for the quarter of million and million for the year gave continental profit increases for both periods . nonperforming loans fell to million during the quarter from million in the third quarter as continental transferred to the federal deposit insurance corp. million in problem loans under its rescue agreement with the agency . continental can still transfer another million through the third quarter of this year . non - interest income rose nearly to million a year ago , as securities trading profit , venture capital gains and the sale of stock received from loan restructurings rose . non - interest expenses fell slightly to million for the quarter from million . net interest income fell to million during the quarter from million as earning assets were flat ; but continental's interest spread , the difference between what a bank earns on loans and pays on deposits , narrowed to from a year earlier . barnett's fourth - quarter operating profit rose to million from million . but net income fell because of an extraordinary charge of million from costs associated with barnett's acquisition in december of united first federal savings & loan association of sarasota . for the year , net rose from . the number of shares outstanding increased from , adjusted for a - for - stock split last august . barnett's results for the quarter and year are restated to reflect the acquisition of united first federal on a pooling - of - interests basis . a consultant who keeps the books for saudi deal - maker adnan khashoggi's triad america corp. testified that most of the stock in the company's remaining cash - producing asset has been pledged to a bank in the cayman islands . arthur j. miller , the consultant , said that triad america , which had grandiose plans for multimillion - dollar real estate developments in texas , california and utah , is heavily in debt and has in its main checking account . mr. miller said triad still has a net worth , or assets minus liabilities , of between million and million . but thomas r. karrenberg , an attorney for a creditor of the company , crest tankers inc. of st. louis , claimed most of triad's remaining value consisted of small portions of heavily mortgaged real estate . mr. miller was ordered into u.s. district court in salt lake city , where triad america is based , after lawyers for crest complained that they couldn't find assets to satisfy a million court judgment crest has won against triad america . only million of the loan has been received by triad america , mr. miller added . euro commercial finances is one of two cayman companies controlled by two canadian investors , donald fraser and walter e. miller , who have made a series of loans to mr. khashoggi and who were recently named directors of triad america . mr. fraser , who resides in monaco , is also the president of triad america . mr. miller , the consultant , added that the other of edgington's stock , has been pledged to another triad creditor , first security corp. of utah , as further collateral for loans to triad's salt lake city developments . mr. karrenberg said crest hasn't worked out its next legal move . " we're just sitting here trying to sort it all out , " he said . according to triad america's books , mr. khashoggi , who has portrayed himself as the " richest man in the world , " has drained his u.s. companies of at least million . much of it went in the form of loans to triad international group , a holding company in the cayman islands that is owned by mr. khashoggi . mr. khashoggi couldn't immediately be reached for comment . usx corp. neared a concessionary contract settlement with the united steelworkers union that would end the longest steel strike in the nation's history . sources close to the bargaining said that usx , the nation's no. steelmaker , made " substantial progress " on several important issues during a weekend of marathon negotiations . the strike , affecting steelworkers in eight states , today enters its th day . " we can finally see some light at the end of the tunnel , but we're not there yet , " said one source , who added , " it's the hardest bargaining i can ever remember . " resolution of the contract dispute would -- for the second time in a week -- end a crisis for the embattled steel and energy giant . on thursday , new york investor carl c. icahn , who had threatened a takeover of usx , dropped his - a - share , or billion , bid for the company . an end to the work stoppage would also free management , particularly chairman david m. roderick , to focus energy on two major programs -- a much - delayed corporate restructuring promised by month's end and a widely anticipated revamping of the troubled steel operations . usx received the report in november , and management is thought to have completed its evaluation . " it's still up in the air where we go from here , " said one company source . " it's a question of roderick making up his mind . he has his own personal timetable for doing this . " sources close to the labor talks meanwhile said the contract taking shape grants usx wage and benefit givebacks on the order of those won by bethlehem steel corp. , the nation's no. steelmaker . steelworkers there took cuts last spring totaling about an hour . in return , usx has moved toward meeting the union's demand for limiting the use of outside contractors to perform steel mill work . subcontracting has enabled the company to slash its steelmaking costs but has cost the beleaguered union thousands of jobs . curbing the practice at usx is the steelworkers' top priority . in addition , the company has eased its stance toward eliminating mill jobs through craft combinations -- an effort to improve labor productivity . sources said usx now proposes eliminating only jobs , compared with positions under its previous offer in november . also unknown was whether the eventual contract would provide any assurances that usx won't later shutter extensive portions of its seven steel works . progress in the stalemated talks followed the mid - december entrance of mediator sylvester garrett , a veteran steel industry arbitrator who has prodded both sides toward middle ground . under the attorney's tutelage , usx's mr. roderick and union president lynn r. williams met twice last week while their staffs worked into the early morning , exchanging several sets of contract proposals . usx failed to reach a settlement by friday night as hoped , despite an all - night bargaining session that carried through most of saturday . sources said messrs . roderick and williams could meet again as early as today to conclude final details . " sooner or later , we're going to have something for them ; the question is just precisely when , " said one source , who assessed the chances of breaking off negotiations as remote . " still , there are lots of loose ends to be ironed out . " on the picket line , steelworkers are growing restless . state and company - paid unemployment benefits have begun to run out , leaving strikers only a week from the union's strike fund . others have exhausted their savings , and the loss of company - paid health insurance has saddled some with huge bills . meanwhile , their counterparts at other producers have continued work as usual . though leverage has shifted to usx , the steelmaker is paying a price , too . in addition to monthly costs estimated at more than million , usx needs rank - and - file ratification this month to hold onto orders for the second quarter , customarily the industry's busiest time of the year . moreover , with mr. icahn at bay for now , it is believed that mr. roderick wants to wrap up a labor contract before reporting his restructuring recommendations to usx directors later this month . usx has cited at least a dozen options , ranging from the sale of foreign oil properties to the spinoff of its steel unit . dow jones & co. and national broadcasting co. signed an agreement for nbc news to begin producing a new - minute early morning business program in association with the wall street journal . the television show , entitled " before hours , " will consist of business and financial news and features based on articles appearing in each day's wall street journal , plus other stories gathered by nbc news and the program's own news staff . it will also include live interviews with business leaders and commentators , including journal editors and reporters . the program will also feature special weather reports for the business traveler and a segment on personal finance . the monday - friday program , to begin march , will be distributed by nbc each morning to its owned and operated stations and affiliates and will run prior to nbc news's " today " show and , in some markets , either before or after the network's " sunrise " program . the show's executive producer will be gerry solomon , who will continue as executive producer of the " sunrise " show . in addition to the wall street journal , dow jones publishes the asian wall street journal , the wall street journal/europe , barron's magazine , community newspapers and textbooks , and operates business news services . dow jones also produces a weekly syndicated television business show entitled " the wall street journal report on television . " nbc is a unit of general electric co . the th congress got under way with the senate creating a special committee to investigate the iran - contra scandal , signaling the start of what promises to be a contentious relationship between congress and president regan . senate leaders agreed to give the select committee a confidential report , prepared by the senate intelligence committee , on the scandal . the select committee , in turn , will have discretion to release as much of the report as is " in the public interest . " handing over the report doesn't resolve a lingering partisan dispute over whether to release it to the public . republicans , eager to put the iran - contra affair behind them , have been pressing to make the report public . but democrats , who want an investigation conducted by a democractic - controlled panel , have resisted , arguing that the report is incomplete . " why all the hurry ? " asked senate majority leader robert byrd ( d. , w.va. ) . " it's all going to be revealed . let's not get in too big a rush here . " but minority leader robert dole ( r. , kan. ) answered : " i can't see any greater obligation than disclosing information that should be public . " the house is expected to create its separate investigative committee as early as today . rep. james wright ( d. , texas ) was officially elected speaker of the house . and , in the senate , majority control was formally transferred to the democrats from the republicans . at the same time , a bitter dispute among republicans in the senate foreign relations committee moved a step closer toward resolution when sen. richard lugar of indiana staved off , by a - vote , a challenge from sen. jesse helms of north carolina to be the panel's ranking gop member . mr. helms is trying to reassert his seniority on the committee after relinquishing it two years ago to fulfill a campaign promise to become chairman of the agriculture committee . final resolution of the dispute mightn't come until next week , when all republican senators meet . the select senate committee has been given broad authority to study " all matters which have any tendency to reveal the full facts " about the actions of government officials engaged in the sale of arms to iran and diversion of the profits to the nicaragua insurgents . the legislation creating the committee , approved on a - vote , calls for a final public report by aug. , with an extension to oct. if circumstances warrant . the committee , to be known formally as the select committee on secret military assistance to iran and the nicaraguan opposition , is to be given access to documents and papers assembled by the senate intelligence committee , which undertook a preliminary investigation late last year . sen. david durenberger ( r. , minn. ) , who stepped down yesterday as chairman of the intelligence committee , said the panel's - page report doesn't " arrive at some specific conclusion about what went wrong and who ought to be blamed . " the legislation creating the select senate committee also calls for the intelligence committee to provide a list of unresolved issues that it recommends be pursued by the new committee . both chambers prepared to do battle with president reagan on other fronts . other measures likely to spark disputes , which house leaders introduced yesterday , included a highway bill and a trade bill , which both will be on the senate's agenda soon . in addition , the house yesterday rejected , in a vote along party lines , a gop initiative that would have prevented any tampering with the scheduled reduction in income - tax rates later this year . mr. wright has suggested that the reduction , mandated by the new tax law , could be delayed in order to raise revenues . meanwhile , sen. dole introduced a non - binding resolution that would express the sense of the senate that tax rates shouldn't be increased nor their reduction delayed . most of the day was spent in ceremony . in the senate , the newly elected members were escorted to the well of the chamber , four at a time , by the other senators from their respective states to receive the oath of office from vice president george bush . in the house , all members stood , raised right hands and were sworn in for two - year terms by the new speaker , mr. wright . every house member was asked in turn to shout out his or her choice for speaker , picking between mr. wright and republican leader robert michel of illinois . in a vote along party lines , mr. wright won . mr. michel was designated house minority leader . in a brief address , mr. wright called for cooperation with the white house , but asserted that congress would insist on equal footing with the executive branch . his speech often was interrupted , however , by the playful voices of small children who were brought to the capitol to see their mothers and fathers being given the oath of office . the vistors' galleries in both chambers were overflowing with well - heeled constituents and family members of the newly elected lawmakers . for hours afterward , the clink of cocktail glasses could be heard emanating from celebratory receptions in rooms throughout the capitol . i admit that over the holidays i pretty much tuned out all the news about " irangate " or whatever the flap over arms to iran is now being called . when the evening tv news dwelt on it , as was done incessantly , my eyes glazed over . as for the newspaper headlines and the multitude of commentary , i gave them a glance and passed on to other matters . but i guess i couldn't fully put the topic out of my mind because i found myself brooding over the various styles of presidents , past and present , toward the management of the government entrusted to them . and that led inevitably to some recollections about another head of government in another country in another time . everybody recognizes winston churchill as a great man , farsighted when out of office and once at the helm indomitable in defeat and magnanimous in victory . i fell to thinking , though , about another quality that made him a unique chief of government . in the midst of a great war he was constantly interested in every aspect of the government he managed . the city fathers of london were equally badgered to report on the city's sewage system , treasury officials to keep him posted on the state of the nation's finances . churchill gave few orders to anyone , but everyone was chivvied with suggestions , admonitions and repeated requests to keep him informed of what was being done in every agency of government . no official , high or low , was allowed to forget his performance was being watched . we have not had his like as chief executive in the white house , so far as i can discover . all our presidents have been the subjects of biographies , and some the subject of many ; those of fdr would fill a library . from these you get gleanings of how each president approached his job . what i've missed , if it exists , is a comparative study of the styles of governance of our many presidents . in my time roosevelt was a man of many interests , but those interests were fleeting and changeable . at times he would completely ignore what went on in some department or agency . his interest in them shifted with circumstances . as a result , morgenthau or ickes or wallace frequently just went his own way , undisturbed until something untoward caught roosevelt's eye . had roosevelt paid more attention to how the war and navy departments dealt with distant commanders there might never have been a pearl harbor . only when war came was he constantly mindful of their actions . harry truman , suddenly thrust into the place of decision , was at first too overwhelmed with the urgent need to grapple with matters such as the atom bomb -- of which he was until then uninformed -- to pay much attention to other governmental problems . it detracts nothing from his accomplishments to recall how the rest of the government went on in confusion . dwight eisenhower relied almost entirely on his staff to keep track of the government . it was he who created the post of chief of staff , sometimes ( as in the u - affair ) to his detriment . lyndon johnson , caught up in the vietnam bequeathed by kennedy , tried to run that war himself , which is a different thing from just paying presidential attention . richard nixon was a president of many accomplishments too little remembered . watergate came to destroy him largely because he left the actions of subordinates too little watched . then he made a mistake churchill never did , trying out of mistaken loyalty to protect those subordinates from their own blunders . as for messrs . ford and carter , neither ever really grasped the role of the presidency and both were therefore dismissed by the electorate . ronald reagan certainly grasped one essential of the presidential role , to lead the nation in the direction the president thinks it should go . he succeeded in restoring the ramparts of the nation's defense . he lowered the burden of government taxes on its citizens . he has been willing to take executive decisions , risking the consequences , as he did in grenada and in striking back at libya . it appears from what i've read that president reagan made the decision to sell arms to iran in an effort to better relations with that country . this was a policy decision , the wisdom of which can and should be debated on its merits . if the nation thinks it a bad decision , so be it . wise or not , it is in no sense a " scandal . " that is the kind of decision presidents are supposed to make , as mr. nixon did when he decided to renew relations with communist china . from what i've read it also appears that his subordinates " in the basement of the white house " went off on their own doing what they thought was the thing to do . that's what put the fat in the fire . unfortunately , mr. reagan bears some responsibility for that , too . despite his intuitive wisdom he's been pretty much a hands - off president , leaving many in his official family unwatched . since every president perforce comes to office with no experience in it , that might be a useful handbook for those in the white house . and it might begin with a study of the style of that other leader , winston churchill . mr. royster is editor emeritus of the journal . unisys corp. and allied - signal inc. said they would pull out of microelectronics & computer technology corp. , the high - tech cooperative research consortium based here . the loss of unisys , in particular , is a blow to mcc . the huge electronics concern participated in mcc's four projects in advanced computer technology and , thus , had a large presence in austin and paid a large share of mcc's budget . sperry corp. , which merged last year with burroughs corp. to form unisys , had been a member of mcc since , when the research venture was founded . burroughs didn't belong to mcc . william stotesbury , mcc spokesman , said the departures were disappointing , but added , " we're confident they will be replaced . " he said the two companies won't leave the consortium until the end of , noting that both would pay their shares of this year's million budget . " we have time to make sure funding exists for , " he said . it wasn't immediately clear why unisys was leaving mcc. mr. stotesbury said he believed it " had to do with the planning going on in the merger , " but he couldn't elaborate . unisys couldn't immediately be reached for comment . he attributed the decision to the company's recently announced plan to sell its amphenol products subsidiary , through which it was involved in mcc . he said it wasn't taken because of any dissatisfaction with the consortium . allied - signal's pullout is less significant for the consortium because the concern was involved , through its lisle , ill. , electronics business , in only one of mcc's research projects . the concerns' disclosures of the departures resulted from a requirement of mcc bylaws that members wishing to leave the consortium notify mcc by the end of the year preceding the year in which they intend to leave . closely held mcc didn't publicly announce the departures , but yesterday began confirming inquiries about them . mr. stotesbury said mcc was talking with " a couple of companies " about joining mcc directly or buying the shares owned by unisys and allied - signal . including those two companies , mcc has member concerns , including digital equipment corp. , eastman kodak co. , and national semiconductor corp . the consortium was formed in january to compete with japan in technological research . mcc has weathered some criticism about how much usable technology it has produced . but mcc has maintained that it is too early to judge its results . rolland inc. said it will ask the quebec and ontario securities commissions to review an unfriendly takeover offer , which resulted in cascades inc.'s acquiring a voting stake in rolland . rolland , a maker and distributor of printing and writing papers , said it believes that cascades' bid " may have been irregular and not in conformity with applicable laws . " officials of cascades , a paper and packaging concern based in kingsey - falls , quebec , weren't available for comment . as previously reported , cascades failed to get control of rolland following the dec. expiration of its million ( canadian ) takeover bid . lucien rolland , rolland's chairman and controlling shareholder , opposed the bid and didn't tender his voting stake . cascades launched its bid for all of rolland's class a nonvoting shares and its class b voting shares last month . though mr. rolland has voting control of the company , his stock accounts for only of rolland's total equity . but cascades said it wouldn't buy the approximately one million class a nonvoting shares tendered , for which it offered a share . there are million class a shares outstanding . that gives cascades of rolland's voting stock and of its total equity . alphonse st - jacques , rolland's vice president , special projects , wouldn't comment further on the alleged irregularities , other than to say that " we find it strange that they took up one class of shares and not the other . " rolland said the company asked its transfer agent , royal trust co. , not to transfer any of the tendered shares to cascades pending a decision on the matter by the securities regulators . peking officials outlined changes in china's election rules . in an apparent attempt to satisfy a major demand of student protesters , the official people's daily reported that more than one candidate would be allowed to run for seats in local people's congresses . the candidates apparently could include members of non - communist parties or groups . the changes , effective next year , also include reducing the number of deputies in the national parliament to from . the moves followed several weeks of pro - democracy student demonstrations in nearly a dozen chinese cities . china's national radio reported the arrests of three workers who took part in rallies in nanjing , where students gathered for a fifth day of protests . reagan began a vacation as a post was formed to deal with the iran scandal . the president left saturday for a six - day stay in california after appointing departing nato envoy david abshire as a new cabinet - level counselor . abshire , named friday , is to coordinate the white house's detailed response to the various investigations of the arms sales to iran and diversion of funds to nicaragua rebels . the move reflects reagan's hope to gain some control over the controversy . u.s. and iranian officials are to meet today in the hague to discuss the return to tehran of more than million in assets frozen after the shah's ouster . israeli premier shamir was cleared of allegations that he ordered the killing of two arab bus hijackers in and that he knew of a cover - up , israel television said . the former head of israel's security service had implicated shamir , but a justice ministry inquiry found the evidence unreliable . a former israeli nuclear worker pleaded innocent to charges of treason and espionage . mordechai vanunu , who indicated that he was abducted from rome and brought back to israel to stand trial , is accused of leaking israel's atomic secrets . marcos loyalists staged a motorcade through manila to urge rejection of the aquino administration's proposed national constitution . a plebiscite is scheduled for feb. . supporters of the exiled philippine leader also burned back issues of time magazine after the news weekly announced that aquino would be " woman of the year . " prime minister chirac scrapped vacation plans after unions rejected an offer by the state - owned railway to resume wage talks following a return to work . islamic jihad denied a claim of responsibility made in its name for the attempted hijacking last week of an iraqi jet that crashed in saudi arabia , killing at least people . the pro - iranian terrorist group also released in beirut a photograph of american hostage terry anderson , one of five captives it claims to hold in lebanon . nasa plans to include an escape system to pull astronauts from a crippled spacecraft as part of the agency's revamped design for the space shuttle , the new york times reported . nasa officials admitted that the million system is useless in the first two minutes of powered flight . dissident andrei sakharov thanked the kremlin for his release last week from internal exile , but said improvement in moscow's human - rights record " lies ahead . " in an abc - tv interview , sakharov also said reagan's space - based antimissile system was a " technical possibility , " but that it could be overcome by " a strong opponent . " the communist party newspaper didn't refer to the rioting , prompted by the ouster of the republic's leader , but called for rejection of attempts " to put local interests ahead of those of the nation . " south africa may be planning to build an airstrip on an island off antarctica that could be used for testing nuclear missiles , london's observer newspaper reported . it said israel may help construct the million runway . in johannesburg , security forces sought a black nationalist guerrilla who killed two white police officers . jordan's king hussein met in amman with egyptian president mubarak in what diplomats said was an attempt to form a common stand for next month's islamic conference in kuwait . details weren't disclosed . the iran - iraq war , fighting in lebanon and mideast peace efforts are expected to be discussed at the jan. parley . died : john d. macdonald , , mystery writer , in milwaukee , of complications following heart surgery. . . . elsa lanchester , , character actress , friday , in los angeles , of bronchopneumonia . greyhound corp. agreed to sell its domestic bus operations for more than million to an investor group led by fred g. currey of dallas , ending greyhound's years in the u.s. bus business . mr. currey , who is a former chief executive officer of trailways inc. and chairman of buslease inc. , said the investor group will operate buses under the familiar name and logo . phoenix , ariz. - based greyhound corp. will also retain its name . greyhound's domestic bus operations account for about of the its total revenue , which was billion in . the sale of the business would leave the company with a wide range of operations in consumer products , food and financial services , as well as in bus production , cruise ship operations , and canadian bus service . greyhound said it will report a gain from the sale , but declined to disclose the amount . it's expected that the sale will be completed in late march . in the first quarter , greyhound had net income of million , or cents a share , on revenue of million . greyhound stock rose , to in new york stock exchange composite trading yesterday . in october , greyhound said it would dispose of the business if it didn't win substantial concessions from the union representing most of the employees in its bus operations . earlier this month , members of the amalgamated transit union rejected a contract that included concessions totaling million annually , or about of labor costs . " that was the final determination that we would sell the operations , " john w. teets , greyhound's chairman and chief executive officer , said in an interview . mr. currey said in a separate interview that the new owners expect to hold " informal " meetings with the union , but won't be bound to negotiate with them . " we're buying the assets of the business , not the contractual obligations , " mr. currey said . the sales agreement calls for the investor group to pay million at closing . the group also will issue securities , pay royalties and " other considerations " to greyhound . details of the non - cash part of the transaction weren't disclosed . however , mr. teets emphasized that the sale is valued at more than million . analysts said the price appears to be a favorable one for greyhound . mr. teets has said that the subsidiary has a book value of about million . the parent company earned million , or a share , last year . the transaction includes about buses and a nationwide route system that totals about miles . it doesn't include greyhound lines of canada , a unit based in calgary , alberta . greyhound also will retain certain real estate related to its bus business , and will lease about bus terminals to the new owners . mr. teets said that greyhound will use proceeds of the sale to enlarge other parts of its business . among the areas that will be considered , he said in the interview , are acquisitions of companies that make consumer products -- perhaps for a limited , regional market . the purchase of additional cruise ships and the expansion of greyhound's food services business also are possible , he said . he added that greyhound isn't currently negotiating the acquisition of any operations . mr. currey said he believes that troubling trends in the bus business are almost over . after years of decline , air fares appear to be rising , mr. currey said . " buses will be much cheaper than discount air fares , " he added . mr. currey said that the charter business is a particularly attractive area for growth , although he described scheduled intercity bus services as " the spine " of the business . he said that greyhound lines currently gets about of its revenue from intercity service , from charter work , and from package express services . the investor group headed by mr. currey includes as principals craig r. lentzsch , president of buslease , and p. anthony lannie , executive vice president of buslease . closely held buslease , which is based in dallas , leases directly and indirectly intercity buses to other companies that operate them . buslease itself isn't part of the purchasing group , said arthur sharples , managing director at painewebber inc. , which is advising the investor group on the purchase . financing for the purchase is still being arranged , mr. sharples said . it is expected that the million to be paid to greyhound will be provided by institutional investors in the form of equity and high - yield , subordinated debentures , he said . the securities and exchange commission keeps searching for a mission to call its own . hearings this week suggest that the sec now wants to replace the states as the chief regulator of corporations . the sec is considering issuing regulations to prevent publicly traded companies from having classes of stock with different voting rights . the new york stock exchange decided to start listing companies with dual classes , responding to competition for listings from the american exchange and the over - the - counter markets , which allow dual - class companies . some nyse companies ( including dow jones , publisher of this newspaper ) have adopted or plan to adopt dual classes . sec chairman john shad has been asking witnesses which regulations they would like the agency to issue . the most interesting question , though , may be what authority the sec has to hold these hearings in the first place . when the agency was set up in the s , congress said its main job was to enforce disclosure by companies . since then , the sec has branched out into other areas , often without statutory authority . former commissioner a.a. sommer jr. testified that the sec doesn't have the power to get into the dual - stock question . until mr. shad's comments , everyone assumed that the states regulated voting classes through their corporate charters . the benefit of federalism is that states compete for incorporations by offering the most efficient legal and economic corporate charters . managers incorporate in the states -- delaware , say -- whose charters best encourage outside investment . the states have generally done a good job regulating corporations . take the dual - stock issue . critics worry that such plans violate " one - share , one - vote " shareholder democracy and serve only to help entrench managers . all states allow more than one class of stock , but all of them also mandate shareholder approval , sometimes requiring more than a simple majority . so going from one class to dual classes is thus itself an act of shareholder democracy . revoking dual classes would be to invalidate thousands of shareholder votes -- in the name of shareholder democracy . the exchanges compete for listings . this market has sorted out issues of corporate governance pretty well , without second - guessing by the sec . i refer to the nov. letter about press freedom in singapore from my good friend robert christopher . first , i am not asserting that governments of the third world have a right , under international law , to reply to articles published by the western media which criticize them . i do think , however , that freedom of the press must be a two - way street and that it is only just and equitable for a western publication which carries an article critical of a third world government to allow that government a reasonable opportunity to reply . i do not object to the right of the publication to edit the reply for brevity and style , but the editing should not tamper with the substance . second , mr. christopher referred to a case which occurred in singapore when he was the editor of the international edition of newsweek magazine . as a result , the attorney - general prosecuted newsweek's stringer and two other persons for contempt of court . the actual author of the offending article and the magazine's editor were not prosecuted because they were out of the court's jurisdiction . in fining the three persons for contempt of court , the chief justice of singapore said , " it is true that freedom of speech is one of the most precious assets of a democratic country but to print and publish material for a world - wide audience in this day and age of universal education , instant communication and a shrinking and interdependent world which on due adjudication is found to amount to conduct that is wrong , reprehensible and harmful to the citizens of another country , ought not to be left uncriticized or uncondemned . " third , the singapore government has never banned any foreign news or current - affairs publications except those from the communist countries . fourth , in the last years the government has detained only two correspondents working for a foreign publication . both are singapore citizens . they admitted to having slanted and distorted articles against the government in order to promote the cause of the communist united front . the securities and exchange commission , swamped by a tide of testimony against the new york stock exchange's plan to drop its one - share , one - vote rule , began taking soundings on a possible compromise . during the second day of hearings on the big board's proposal , an almost unbroken series of institutional investors and other witnesses denounced the plan , saying it would disenfranchise shareholders and undermine corporate accountability . they urged the sec to reject the exchange's proposal and require other stock markets to raise their corporate listing standards to the big board's level . " a stock without a vote is no longer a common stock representing a real ownership interest , " said roland machold , manager of new jersey's public pension funds . " it's an uncommon stock . it's a junk stock . " widespread issuance of such stock will confuse investors and spark litigation , he told the commissioners . in reaction , sec chairman john shad asked a - member panel of mostly public pension fund managers whether they would accept a compromise plan to impose a one - share , one - vote rule across the board , with these exceptions : . -- one company could acquire another through the issuance of nonvoting stock to retain control of the merged concern . -- under limited circumstances , companies could issue a second class of stock with disproportionate voting power to enable a founding family or an entrepreneur to raise equity capital without losing control . seven of the institutional investors who testified yesterday as a panel said they would support some , if not all , exceptions . harrison goldin , new york city's comptroller , balked at the idea of grandfathering in dual - class companies . " i find that tough to swallow , " mr. shad responded . greta marshall , investment manager for california's huge public employee pension fund , said she would insist on a " sunset " provision requiring a shareholder vote on unequal voting rights stock every five years or so . the sec staff will review the testimony from the two - day hearing and written comments before making recommendations to the five commissioners . a decision is months away . " this is up for grabs , " said commissioner aulana peters . a panel of corporate representatives was decidedly less willing to endorse a one - share , one - vote compromise , with or without broad exceptions . t. boone pickens jr. , general partner of mesa limited partnership and the self - styled " voice of million shareholders , " said he would " go along with grandfathering . " mr. sommer raised anew the question of the sec's authority under amendments to the securities exchange act to impose one - share , one - vote . he asserted that " nothing in the legislative history " indicates that the amendments empower the agency to interfere with corporate governance rule - making . in the past , he added , the sec has recognized that it isn't " a super - commissioner of corporations " or a " super - state legislature . " richard h. troy , vice president of the american society of corporate secretaries , which represents more than companies , said that one - share , one - vote has become " more or less a political slogan . " he cautioned the sec against imposing an " arbitrary " rule on all markets . most members of the group , he said , believe that the sec should instead ensure full disclosure of the terms of unequal voting plans to investors . the concept of trading using far - flung terminals long has held the imagination of dealers and investors . in practice , though , the idea has fallen flat , with such heavy hitters as citicorp and mcgraw - hill inc. flopping with electronic - trading efforts . however , a new plan by the chicago mercantile exchange and reuters holdings plc to offer international financial futures and options trading electronically has shocked competing exchanges around the world . some are speeding up their own tandem efforts , while others are taking a defensive stance . the plan by the chicago merc , long a global leader in trading innovations , was the hottest topic at a recent financial futures conference here . electronic trading is seen as good news for sophisticated investors , who could react to market - moving news even when exchanges ordinarily would be closed . at the same time , it is regarded as a long - term threat to independent floor traders , or " locals , " who would lose their central role in futures markets . and some market professionals worry that neophyte investors might not get good execution of orders if they try to participate in a thin or illiquid electronic market . the cbot also has said it aims to link trading with the london international financial futures exchange , or liffe , next year . now the chicago merc has moved center stage again with the plan to offer merc - listed futures and options on reuters terminals when the exchange's trading floor is closed . among the chicago merc's leading contracts are eurodollar futures and foreign currency options . reuters already offers a wide range of financial quotations and data on its system . some exchanges have begun planning lookalike efforts . the new york mercantile exchange is exploring the trading of oil futures electronically through reuters , said the exchange's president , rosemary mcfadden . and in paris , the matif financial futures exchange is considering electronic trading before and after its regular session , said gerard de la martiniere , president of the matif clearing house . " exchanges are recognizing that technology will revolutionize all our markets , " said liffe's chief executive officer , michael jenkins . " electronic trading is the way things will develop . " other exchanges , particularly small non - u.s. markets that feel threatened by the u.s. giants , are taking defensive steps . meanwhile , the chicago merc plan faces sizable obstacles . regulators in some countries , particularly the u.k. , may question whether reuters should be regulated as an exchange . whatever its outcome , such a review could delay the system well beyond its planned opening in months . the proposed system also could suffer from the illiquidity that plagued previous ventures . citicorp and mcgraw - hill scrapped a joint oil and petrochemical trading venture last year after a six - month test failed to generate adequate volume . the international futures exchange , an electronic market based in bermuda , has been struggling to generate volume since it opened in . and an electronic system organized by the new zealand futures exchange has attracted only meager activity . " we believe you have to have traders meeting face to face to create liquid markets , " said the cbot's chairman , karsten mahlmann . the cbot doesn't plan to pursue electronic trading , although it has studied the idea , he said . if electronic trading takes off , critics say , international investors will want to use it around the clock . the chicago merc's members are set to vote on the plan oct. . david puttnam , the controversial president of columbia pictures , has been asked to leave his post after one year in the job , according to sources close to the company . mr. puttnam's fate at columbia has been the subject of considerable speculation since columbia's parent coca - cola co. announced plans earlier this month to merge its entertainment operations with its one - third - owned tri - star pictures inc. tristar's chief executive , victor kaufman , will be chief executive of the merged companies , which will be known as columbia pictures entertainment inc . company executives declined comment . mr. puttnam didn't return phone calls . sources said mr. puttnam's management style and stormy tenure at the studio have alienated key producers , stars and agents . columbia plans to pay an undisclosed sum to settle the remaining two years on his contract . columbia is said to be talking to other executives about posts at the studio , but it isn't clear whether any of the executives would succeed mr. puttnam . mr. price couldn't be reached for comment . mr. tartikoff , who turned down the columbia post before it was offered to mr. puttnam , " is not involved with conversations with anyone at any other company , " an nbc spokesman said . mr. puttnam is contractually obligated to return as an independent producer to warner communications inc.'s warner bros. unit . warner released him from that contract to take the columbia post on the condition he return to make movies if he left the management post . the british producer's previous movies for warner include " chariots of fire , " " the killing fields " and " the mission . " while hollywood is notorious for the revolving doors in its executive suites , mr. puttnam's imminent departure marks the shortest tenure of a major studio chief in recent history . he will be out of his job before any of the major movies he put into production hit the box office . dozens of projects he put into development may never see the light of day . moreover , numerous executives hired by mr. puttnam , mostly british and australian colleagues , may lose their jobs under a new studio boss . moreover , buying mr. puttnam out of his contract will be expensive . the contract's value hasn't been disclosed , but it is said to have guaranteed mr. puttnam as much as million over three years . mr. puttnam's superiors are said to be unhappy about problems created by his confrontations with talent . among other things , sources cited a dispute between mr. puttnam and actor bill murray that led to costly delays in the making of a sequel to the movie " ghostbusters . " mr. puttnam frequently railed at high salaries and big budget films made in hollywood . he has had a long - running feud with dustin hoffman and warren beatty . columbia was putting the finishing touches on their movie " ishtar " when mr. puttnam arrived at the studio . neither actor would speak with him about the project . the movie was a flop , but the feud strained an otherwise successful relationship between the two stars and columbia . " i feel much more comfortable with columbia pictures now that . . . ( mr. puttnam ) is apparently out , " said attorney bertram fields , who represents messrs . hoffman and beatty . mr. puttnam's biggest mistake , however , may have been alienating bill cosby , who is starring in a columbia movie called " leonard : part iv . " according to hollywood executives close to the dispute , mr. cosby was unhappy with the conduct of a production executive mr. puttnam assigned to the film , among other things . mr. cosby -- a major spokesman for coke and a shareholder in a coke bottling company in philadephia -- decided to sign a new movie production contract with warner . neither mr. cosby nor his spokesman could be reached for comment . mr. puttnam was hired by francis t. vincent , the coca - cola entertainment business sector chairman who is taking a post at the company's bottling operations . mr. puttnam was regarded as an odd choice for the columbia job from the start . despite his record as a respected producer of stylish films , none of his movies were commercial blockbusters . at least one , " the mission , " was an expensive failure . the federal energy regulatory commission , cleared by a federal appeals court , put into effect an interim rule to help natural - gas pipelines transfer some costs of " problem " contracts to producers and customers . since the agency plans to adjust the rule after reviewing comments from the natural - gas industry , uncertainty persisted over the future of gas transportation . yesterday's appeals - court order allowed the agency to amend its program providing for pipelines to act as transporters of gas owned by others , as well as to perform their traditional roles as gas buyers and sellers . program changes were mandated by the court in a june ruling . yesterday , the court rejected petitions that it reconsider the program or consider rejecting the agency's changes . martha hesse , agency chairwoman , said she was " pleased " with the order , which she said would help maintain " stability " in the industry . but producers' representatives said the interim rule will bring " disorder and disruption " to gas markets . pipelines said it won't go far enough to settle producers' multibillion - dollar claims resulting from " problem " contracts in which pipelines agreed to buy gas they couldn't sell . both sides hope to change the rule in its final form . the agency will accept comments on it until oct. . that information might form the basis for agency review of the contracts . commissioner charles stalon said he expects the panel to issue a final rule in january . the bubble has popped in igi stock , but there may well be a little air left in the price . igi , a vineland , n.j. - based biomedical concern , saw its stock rocket from in february to an intraday peak of friday . the propellant was a series of announcements of development contracts with other companies that included rorer group and , just last wednesday , pfizer . but shortly after p.m. friday the price collapsed , falling as much as points to a low of before recovering to close at , down / . volume was shares , a staggering total considering management still owns of the million shares outstanding . formerly named immunogenetics , igi is an early entrant in a hot technology involving liposomes . these are microscopic balloons of fatty material that researchers hope can release drugs gradually into the bloodstream . currently , most time - release mechanisms rely on swallowed capsules that release drugs in the stomach . igi stock rose / to / thursday after the pfizer news , climaxing a sevenfold move from / on july . daily volume , which had been running less than shares when the stock was trading around from april through june , averaged in the five trading days ending thursday . now he thinks the stock remains overpriced . " i have a rule of thumb that no stock should trade at more than times book value , " he says . that's , at igi's year - end book value of . " i'm not saying i would pay that much for this one , " he cautioned . igi's string of development pacts began aug. , when it said it signed a letter of intent to develop liposome - encapsulated vaccines and compounds for a british company owned by wellcome foundation and imperial chemical industries plc . two days later , it announced a pact for pharmaceuticals with rorer . igi teamed up with a u.s. unit of the german pharmaceutical concern schering ag on sept. , and wednesday with pfizer . the announcements all said the pacts called for an unspecified initial payment to igi plus royalties on any products sold . the company's reticence about the amounts involved and timetables , mr. leonard said , " fanned the speculative interest " in the stock . he added , " we are willing to show each of our potential partners we can do it , ( telling them ) ' give us some of your stuff and we'll encapsulate it for you and let you test it. ' " mr. hager said the recruitment of donald wallach , who pioneered liposome development in the late s , would help igi develop its proprietary capsule technology , which he said uses far cheaper raw materials than the " greasy kid stuff " used by competitors . the igi chairman was equally breezy about his stock's free fall . " easy come , easy go , " he replied when told of the price action . " what a roller coaster . it started out the year at a dollar and a half . " he said management hasn't sold any stock in the past five months . even if the tests pan out , it will take several years to gain approvals for human drug applications , though less for other uses . there are already several competitors . ira weingarten , executive editor of the predictor & tillman survey , a santa barbara , calif. , newsletter , says that if drug giants such as rorer or pfizer had made the same " breakthrough " that igi has , they could easily have added million to their market value . that would be equivalent to a share for igi , he asserts . his newsletter recommended the stock in april at . a rorer spokesman cautioned that while the technology is " promising , " this isn't " a major investment " of the concern's million - plus research budget . translation : less than , or under . pfizer wouldn't comment beyond saying its igi pact is " preliminary " and " absolutely not material " to its results . another way to value the company , mr. leonard suggests , is on a multiple of expected revenue of million , or a share . " if a company has tremendous potential i could justify paying five to times revenues . but the outlook would have to be awfully clear , and i think this situation is somewhat nebulous . " net income : million ; cents a share . second quarter , june , : . per - share earnings : cents vs. cents . average daily trading volume : shares . common shares outstanding : million . argonaut group inc. , a workmen's compensation and casualty insurance company , said it wasn't able to reach a definitive agreement on clarendon group ltd.'s - a - share acquisition offer . argonaut's stock fell to yesterday in national over - the - counter trading . officials of both concerns declined to say exactly why the negotiations fell apart . argonaut group's president , d.w. schrempf , said that argonaut didn't anticipate " at this point " that the two companies would be able to agree on terms . howard chickering , a clarendon executive vice president , said the bermuda - based insurance company had no comment on whether any future agreement might be reached . mr. schrempf said that argonaut is continuing to consider other available alternatives including negotiating a comparable transaction with " other parties who have expressed serious interest , " and the possibility of a restructuring or other internal corporate program that would enhance the value of argonaut common stock . barbara hardman , argonaut's director of finance , declined to indicate which other parties were interested in argonaut . ms. hardman said , " there's a lot of momentum for us to look at other alternatives now , but there's no sense that we have to be sold . " he said that neither the company's current or future financial condition nor its marketing prospects were factors in the failure to reach agreement with clarendon . mr. schrempf said that realization of gains with respect to argonaut's substantial positions in reichhold chemicals inc. and kidde inc. should augment net income by more than a share of argonaut common stock . reichhold and kidde were both acquired recently by other companies . for the first six months of this year , argonaut's net income more than doubled to million , or a share , including capital gains of million . in the first six months of , argonaut earned million , or a share , including capital gains of million . for all of argonaut had net of million , or a share , including capital gains of million . argonaut has million shares outstanding . cotton futures prices fell sharply following reports of rains in drought - stricken cotton - growing areas in india . also pushing down prices was a technicality in u.s. government crop - loan regulations that could put more cotton on the market . separately , an indian government official denied that india was going to import cotton . rumors to that effect last week drove up prices the daily limit of two cents a pound . cotton for december delivery at the new york cotton exchange fell cents a pound to cents . the decline was the seventh in the last nine trading sessions . since friday , the price for the december contract has dropped more than cents . cotton - producing areas in india -- in particular , the state of gujarat , which accounts for about of that country's crop -- had the first significant rains since june , said mark brusberg , a weather analyst at the world agricultural outlook board of the agriculture department . " however , the rainfall is below normal , and it's hard to tell what effect it will have on the cotton crop , " mr. brusberg said . between mid - june , when the monsoon season usually starts , and mid - august , gujarat and other cotton - growing areas had near - record hot weather and near - record low rainfall , he said . there is an import quota of bales a year , mr. barlowe said , and the regulation allows for imports of as much as additional bales a year . however , " i don't think very much will be imported because of tight world supplies and high prices , " he said . still , the regulation could boost cotton supplies in another way . farmers who have placed cotton under the government loan program normally get an eight - month extension after the initial - month loan period . however , the extension for loans maturing in september was knocked out when the import rule went into effect . that could push the cotton under loan into the market because farmers would start selling the cotton , analysts said . mr. barlowe said he thought the effect was more psychological than anything else . " i don't know how much cotton there is under loan -- no one can really tell at the moment -- but i don't think it is that much , " he said . no decision has been taken to import one million bales , mr. mishra said , and it is " too early " to estimate the failure of the cotton crop for next year stemming from lack of monsoon rains . pointing to the recent rains in india's cotton - growing areas , he said " things may begin to look up again in . " there is no crisis in the indian cotton mills industry caused by a lack of cotton , mr. mishra said , although mill owners would prefer the certainty of large imports . the mill owners " obviously want . . . large - scale imports of cotton , but if the situation doesn't warrant it , such as now , " then india won't import the fiber , he said . in other futures markets yesterday : . precious metals : gold , silver and platinum futures prices surged in reaction to the weaker dollar and slumping bond prices , which sparked concern that inflation may accelerate . many traders and investors hold precious metals as hedges against inflation . at the commodity exchange in new york , october gold rose an ounce to , while september silver soared cents an ounce to . october platinum at the new york mercantile exchange shot up an ounce to . analysts said short covering , or buying contracts to offset those sold earlier , fueled some of the price rise , as did chart - guided technical buying . " the market is very healthy technically , " a broker said . still , some analysts and traders , noting a lack of strong bullion demand , cautioned that the rally could abate soon . " there was nothing that indicated very aggressive buying , and prices could fall back if the dollar recovers , " a trader said . stock indexes : futures prices closed mixed , as stability returned to a market hit tuesday by concern about the weak dollar and higher interest rates . analysts said the ability of stocks and stock - index futures to perform relatively well after the sharp declines a day earlier encouraged bargain - hunters , particularly in blue - chip issues . at the chicago board of trade , futures on the major market index for september settlement rose to . at the chicago mercantile exchange , september futures on standard & poor's - stock index fell to . unlike tuesday , traders said , index futures were sold at sufficient premiums over the indexes themselves -- discouraging arbitrage programs that sell stocks making up an index and buy the relatively cheaper futures . such programs had a big impact on the market tuesday . grains and soybeans : strength in precious metal and foreign currency prices helped grain and soybean futures prices finish higher . some of the day's advance in the soybean meal market stemmed from news that supplies of meal in brazil are tight and may soon be depleted , analysts said . for the most part , though , there was very little justification for the rally , said richard loewy , an analyst at prudential - bache securities inc. in new york . he likened the day's advances to those made in april and may , when weak stock and bond markets encouraged a shift of investor funds into foreign currencies and precious metals that eventually spilled over into the grain markets . after six months of watching and worrying , ardyce deuel walked into her savings and loan association last january and withdrew some more money . she had read reports of loose lending practices , big losses , and failing banks and s&ls . " if they were going under , i was going under , " mrs. deuel declares . over the past year , she has withdrawn more than and opened an account at the city's largest bank . " i felt safer , " she says , " because they've been around for a while . " but the bank is losing money , too . " you really don't know what to do with your money , " she says with a sigh . in other places , cocktail - party chit - chat may focus on rising home prices or the stock market , but in texas people talk about bank safety . their worries are sparked by news stories on insolvent s&ls being seized by regulators and by bank losses due to declines in energy and realestate prices . in addition , confidence has been shaken by a widening federal investigation of prominent banking and real - estate people in texas ; nearly people , including the state's top thrift regulator , are under investigation . " i think there's a lot of fear , " says a dallas executive secretary who recently took the trouble to look up bank ratings in a library and switched her savings from three poorly rated banks to others with higher marks . bank safety is " obviously on the minds of people , " says j. michael cornwall , the chief executive officer of first texas savings association , a large dallas thrift . noting that people question him about bank safety at social functions , he comments , " they're looking for reassurance . " so far this year , banks have failed in the u.s. , double last year's pace , and of them have been in texas -- a rate of one a week . most have been small institutions whose collapse was handled routinely by bank regulators . but the steady drumbeat of failures is fraying the nerves of texans , and they are quietly moving their funds from one institution to another or even out of state -- despite the government's guarantee of deposits of or less . since the fourth quarter , texas s&ls report a million net drop in deposits despite a slight gain in june . texas bank deposits started shrinking early last year . the state's major banking firms say that as of march , their domestic deposit base had declined by more than billion from year - earlier levels , including a billion drop in the first three months of this year . as a result , some texas banks and many s&ls are scrambling for deposits . texas newspapers and airwaves are full of ads offering interest rates above the national averages . of the u.s. institutions paying high rates on six - month certificates of deposit , are in texas , according to highest yields , a north palm beach , fla. , newsletter . most experts don't expect confidence to be restored until banks begin reporting profits and until the federal savings and loan insurance corp. begins raising money this fall to help restore its fiscal health through a series of bond offerings recently approved by congress . the earliest anyone expects any signs of a general economic upturn in the lone star state , such as sustained gains in employment and consumer spending , is . large , out - of - state depositors have shunned texas banks ever since the energy industry started to slump four years ago and some big bank lenders started to post losses . last year , more money managers ruled out texas institutions after bank losses spread to real - estate loans and credit ratings of texas bank holding companies slipped . local corporations and individuals remain loyal to the banks , but lately their confidence is waning , too . some of the money is going to stronger banks from weaker banks or weaker s&ls . and some funds are leaving texas altogether , such as a million deposit that merrill lynch & co. pulled out of a houston s&l a few months ago . at banks and s&ls alike , deposits exceeding the federal insurance limit of are declining , and smaller deposits are increasing . the reason : customers , unsure about the safety of their money , are making certain that their deposits are fully insured . before austin's united bank of texas failed last june , for example , more than million in deposits -- more than half of the total -- dried up in about six months as customers pulled out their money . banctexas group inc. , of dallas , watched some million , about a third of the deposit base , flee its banks last year . " it has been an extremely difficult task to keep the deposit base and the confidence level with the earnings reports that we've had , " says daniel s. pigott , a senior vice president of banctexas , which was rescued from failure in july by the federal deposit insurance corp . the fdic injected million into it , together with million raised by a merchant - banking firm . american petrofina inc. , a dallas energy company controlled by petrofina s.a. of belgium , opened back - up checking accounts in dallas when it grew concerned about interfirst corp.'s troubled flagship bank here . american petrofina also had been using interfirst to pay and collect millions of dollars daily over its bank wires , but its corporate cash managers became nervous about interfirst's troubles and those of other texas banks . " we just didn't want any disruptions , " an american petrofina executive says. ( interfirst has since been acquired by a local rival. ) . in austin last month , city officials became concerned when some local banks refused to honor their own letter - of - credit commitments that the city requires real - estate developers to put up , in lieu of cash , to guarantee payment for roads , sidewalks and sewer systems in some projects . sometimes , the city draws the funds from the banks to pay for the work if the developer doesn't have the cash . " lately , what had happened is that some banks weren't honoring the draw , " says tracy watson , the acting director of the city's office of land development services . the banks didn't say they didn't have the money , but they often gave technical excuses for refusing to come up with it . in amarillo , gov. clements sent depositors running for their money after he predicted that the beleaguered fslic insurance fund wouldn't fully back deposits . in interviews , he contended that the fslic would wind up paying deposits " like cents on the dollar and give them a piece of paper like a bond " for the rest . his comments alarmed bank and s&l regulators . the federal reserve bank of dallas made preparations to airlift currency to amarillo in case of a run on deposits . and federal thrift regulators in dallas and washington called news conferences to rebut the governor's remarks . no run occurred , but some amarillo s&ls experienced " higher than normal " withdrawals . one man carried about -- his life's savings -- from a savings association to the bank across the street . the clements episode clearly indicates that regulators and industry executives worry that the slightest nudge could stagger some texas banks and s&ls . regulators at the federal home loan bank of dallas have begun a program designed to channel up to billion in surplus funds to texas's weakest thrifts in an effort to reduce interest rates paid on deposits . so far , about million is in the program , but that , by itself , has done little to lower rates . in addition , the regulators are pushing another program in trying to persuade wall street securities firms to put millions of dollars into weak texas thrifts . usually , when a thrift closes , major depositors aren't assured of recovering funds exceeding the federal - deposit - insurance limit , and interest isn't paid on insured funds in the time between the s&l closing and regulators' payment of the money . under the proposed program , multimillion - dollar deposits would be divided into insured amounts at weak texas thrifts , and interest would be paid on the funds until they are returned to the customer . meanwhile , several institutions are exploiting the uncertainty . merabank , a phoenix - based thrift with offices in texas , recently ran an ad for deposits in dallas newspapers that took a none - too - subtle swipe at its shaky texas rivals . the ad's headline was a will rogers quip : " i'm not so much interested in the return on my money as the return of my money . " gibraltar savings association of houston and first texas savings , two units of first texas financial corp. that are among the state's largest thrifts , say deposits are up . " we're getting new customers , " mr. cornwall says . " all of these people didn't just move to town . " texas commerce bancshares inc. , acquired last may by chemical new york corp. , has been trumpeting its increased strength and snatching nervous customers away from weaker institutions . new individual accounts opened at its big houston bank have been increasing some to a month . much of the money comes from other texas banks , and the movement " has accelerated in the last couple of months , " says marc j. shapiro , the chief executive of the houston bank . corporations are calling texas commerce banks and inquiring about moving their business to them , he says . another company recently moved its bill - collecting operation to texas commerce's dallas bank from a rival institution . seizing the opportunity , texas commerce is calling on big customers of its competitors and trying to woo them away by stressing chemical's size -- it is the nation's fourth - largest banking company , with more than twice the assets of texas's largest banking concern -- and the recent increase in texas commerce's debt rating . last month , texas commerce ordered each of its calling officers to make visits a month to business prospects , up from to calls previously . it also is adding to new officers to the team . first city bancorp. of texas inc. and other troubled texas banks and savings institutions are fighting back . nearly all of them are pushing deposit - gathering promotions heavily . " it's a very hotly contested arena , " says bruce j. mccall , first city's senior vice president and marketing director . the latest gimmick is to seek long - term money but not charge a penalty for an early withdrawal after days . moreover , if the deposit stays in the bank for five years , it earns a - percentage - point annual interest " bonus " on top of a competitive interest rate . mr. mccall says first city has gathered about million in these accounts ; about half of it is new money . commodore savings association , a troubled dallas s&l , is trying a different approach . at most institutions , the longer the money is deposited , the higher the interest rate ; at commodore , the larger the deposit , the higher the rate . for example , as little as deposited for five years earns an rate , but an deposit for just days gets the same rate . but some texans aren't enticed . tamara kay gough , a marketing manager in dallas for a national accounting firm , has decided to avoid all texas financial institutions . most of her money is at the credit union of a former employer , electronic data systems inc. , the general motors corp. unit founded by h. ross perot . two new gold investments are designed to lure people intrigued by the prospect of owning gold but more comfortable with securities . both investments , however , are meeting resistance . wells fargo bank in san francisco is offering six - month certificates of deposit tied to gold prices . and j.w. korth & co. , an investment banking firm in farmington hills , mich. , is underwriting a group of brokers offering gold - backed certificates to be traded in the secondary market . the instruments , introduced in july , illustrate a continuing move in the gold market toward securities products aimed at mainstream investors . gold - related mutual funds have proliferated in the past year , for instance , as gold prices and gold - mining stocks have surged . but problems with the new products abound . the wells fargo cd is attracting considerable criticism and the scrutiny of the commodity futures trading commission . the gold certificate , meanwhile , isn't attracting much interest from anyone . the wells fargo cd " appears to be a commodity option and . . . violates our regulations " banning such options products traded off an exchange without government approval , says william seale , a cftc commissioner . agency officials say they are studying the cd and eventually could force wells fargo to scrap it . wells fargo officials , who contend that the cd is legal , say the cftc has contacted them . " but they haven't asked us to discontinue offering the product . " the cd is available in two versions . an investor can pay a fee and collect all of the increase in the london market's gold price over the cd's - week term . or a customer can pay a fee and get half of the rise . if gold prices fall , the investor gets back the principal , minus the fee . both cd types are offered in amounts of to million and come with federal deposit insurance corp. protection for up to . the bank says it is hedging its risk by buying gold options , giving it the right , but not the obligation , to buy gold at a certain time for a set price . investors would be better off buying gold options on their own , essentially using the cd fee money to do so while retaining the use of the rest of their funds , says craig sloane , a precious - metals analyst at smith barney , harris upham & co. in new york . many analysts also say the cd's only redeeming quality is convenience . wells fargo officials concede that convenience is a major selling point , and that " it makes sense for customers familiar with the gold market " to buy gold options themselves . the bank declines to provide cd sales numbers , but ms. williams says sales " haven't been overwhelming . " meanwhile , more than mostly small brokers nationwide are offering american gold certificates . but they , too , apparently are running into roadblocks . the certificates , available in denominations of five ounces or more , represent ownership of gold bullion held by the bank of delaware and have a four - year maturity . but some gold specialists say many gold - storage programs , in which investors buy gold held and insured by banks , are at least comparably priced . the certificates cost to more than the spot price of gold on the commodity exchange in new york , depending on the amount purchased ; the fee includes insurance and storage charges . at citibank in new york , meanwhile , an investor is charged a fee on purchases in a gold - storage program , plus an annual charge of for insurance and storage after the first year . while an investor theoretically can redeem the american gold certificates by selling them in the secondary market based on the spot comex gold price , no such market has materialized , participating brokers say . in fact , they say , there's been hardly any interest in the certificates on any level , despite growing inflation fears . says donna levin , a vice president at baker watts & co. , a baltimore brokerage that has made just two sales totaling ounces in two months , " the response has been a big yawn . " mark stahl , a former senior vice president of finance at shearson lehman brothers inc. , pleaded guilty to misappropriation of firm funds in a check - kiting scheme that prosecutors said involved million . mr. stahl , years old , was arrested on a wire - fraud charge april , eight days after shearson had suspended him . shearson , a unit of american express co. , fired him after the arrest . at his court appearance yesterday before u.s. district judge vincent l. broderick , mr. stahl , who was hired by shearson in , admitted to four felony wirefraud counts , for which he could receive as much as years in prison and million in fines . prosecutors said mr. stahl , to conceal his thefts , devised a large check - kiting scheme involving millions of dollars in certified checks that he deposited back and forth between two shearson accounts he controlled . he used the check scheme -- one of the largest ever in the new york area , according to the federal bureau of investigation -- to cover his illegal wire transfers of shearson money , the government said . a shearson spokesman said the firm is still investigating the possible effects on customers of mr. stahl's year - long scheme . though the government alleges mr. stahl defrauded shearson of million , mr. stahl yesterday told the judge he thinks the total amount might eventually prove to be million or million less . mr. stahl said he currently is negotiating with shearson and the internal revenue service to pay back the money he took and taxes he should have paid . the four counts to which mr. stahl pleaded guilty specifically involve the illegal transfer of million in shearson funds . he was arrested initially on a charge of illegally transferring . judge broderick set sentencing for dec. . mr. stahl was released on million bond , partially secured by his parents' home , that he arranged after his arrest . first boston inc. said it expects to report a second - quarter loss , reflecting trading setbacks in fixed - income securities in april and may . peter t. buchanan , the securities firm's president and chief executive , wouldn't specify the amount of the april and may losses attributable to trading . however , other officials at the firm indicated that the trading losses totaled between million and million . mr. buchanan indicated that first boston as a whole had a deficit from operations of at least million in april and may . the firm probably won't make enough money in june to offset the two - month loss , he added . in an interview , mr. buchanan emphasized that first boston's losses came from trading positions taken with the support of the firm , and that no one was being disciplined for the setbacks . however , he said first boston is reorganizing its fixed - income arbitrage operation , in which the firm bets on market swings for its own account . the biggest portion of the trading losses came from dealings in over - the - counter options on - year treasury bonds , according to mr. buchanan . " we simply were wrong on ( the direction of ) the market , " he said . merrill lynch blamed its loss on unauthorized actions by a senior trader , who later was fired , and on mistakes by the trader's superiors , two of whom also were ousted . as a result of the loss -- the biggest trading setback in wall street history -- merrill lynch has begun major changes in the way it manages risk . many firms are thought to have had trading losses in april because a rapid rise in interest rates drove down the price of many corporate bonds , government securities and mortgage - backed securities . as part of the first boston reorganization , thomas kirch , a managing director who heads the firm's capital commitment committee , will assume direct control over fixed - income arbitrage activities . he will trade only when he feels the markets are particularly appropriate , mr. buchanan said . the " handful " of people who have been doing such trading on a daily basis will be reassigned to other trading desks , the first boston chief added . " to have people whose sole job it is to trade for the house account is probably a mistake , " mr. buchanan said . " positions are larger than they used to be , and therefore the risks are greater , " he said . mr. buchanan said that some of first boston's operations , particularly equity trading and underwriting , have performed strongly in the second quarter . but he said the firm doesn't expect to record any large fees from its mergers and acquisitions business . such fees have fueled the firm's profits in many previous quarters . lawrence eckenfelder , an analyst at prudential - bache securities inc. , estimated that first boston would post a loss of about million for the second quarter , based on yesterday's announcement . first boston earned a record million , or a share , in the first quarter . in last year's second quarter , it earned million , or cents a share , after heavy losses in trading of mortgage - backed securities . for all of , first boston earned million , or a share . mr. buchanan said first boston's current trouble began in early april , when the federal reserve board switched its policy on interest rates and allowed them to rise to support the dollar . the price of the - year treasury bond , or long bond , fell eight points in the two - week period that ended april , he said . most of first boston's troubles came from options it sold giving the holder the right to sell - year treasury bonds to first boston at a fixed price . such over - the - counter options could have been lucrative to first boston , which stood to get " standby " fees for maintaining the option , and " exercise " fees when the buyer of the option actually sold the bonds to first boston . but the market for such options also is particularly risky because the options usually are specially tailored to a particular client and can't be easily resold . when the price of long bonds dropped rapidly in april , first boston was stuck holding the options . customers took advantage of the opportunity to sell their bonds to first boston at the fixed , higher price , leaving first boston to absorb the bond losses . hedges put in place by the firm weren't very helpful . mr. buchanan said the firm also had small losses in other fixed - income products in april . the firm's problems were compounded by a sluggish market for many fixed - income products in may , he added . there was very little secondary trading in many products , and there were very few new issues , mr. buchanan explained . " there was nobody to sell to , " he said , noting that investors were still confused by april's volatility . first boston last year had an even bigger trading loss when a collateralized mortgage obligation the firm had issued and held in inventory plummeted in price . the firm had a trading loss exceeding million , mostly in the second quarter , company officials say . however , the firm averted a quarterly loss when other fixed - income markets rebounded quickly , and fees from mergers and acquisitions soared , mr. buchanan said . the deficit expected for this quarter would be first boston's first quarterly loss since the fourth quarter . " war is capitalism with the gloves off . " thus begins douglas k. ramsey's " the corporate warriors : six classic cases in american business " ( houghton mifflin , pages , ) . while this quotation from tom stoppard's play " travesties " is a bit misleading ( what would you call the conflicts raging in afghanistan or cambodia : " communism with the gloves on ? " ) , his real thesis is that there " are lessons for today's business executive in military strategy . " mr. ramsey , now business correspondent for nbc news , first became interested in drawing those lessons while serving as far east correspondent for the economist . he was struck by how frequently japanese businessmen evoked the wisdom of sun tzu , an ancient chinese strategist whose " the art of war " has long been recognized as a military classic . mr. ramsey's thesis that " business resembles nothing so much as war itself " is not new . there have been a whole series of books that attempt to equate commerce to the battlefield . but there are two things wrong with such analogies . first , none seem to appreciate that among military theorists there are fundamental differences about the very nature of war , differences as profound as among economic theorists who analyze the marketplace in terms of free trade , protectionism , or marxist determinism . sun tzu , musashi and machiavelli saw war as a contest between the princes of contending states where the people had no say whatsoever . accordingly , their works concentrate on plots , strategies and ruses . henri jomini believed wars could be reduced to geometric and algebraic equations . mao tse - tung and che guevara saw war as class struggle and fell back on marxism - leninism for their principles . but the main thing wrong with equating business to the battlefield is the crucial difference in logic . while it is true , as mr. ramsey notes , that " the language of war is now an established part of the corporate vernacular , " the logic of war is another matter entirely . in his trenchant new book , " strategy , " the contemporary american military strategist edward luttwak makes the telling point that while the logic of commerce is linear -- logical where good is good , bad is bad , and more is better ; " the entire realm of strategy is pervaded by a paradoxical logic of its own " that " often violates ordinary linear logic by inducing the coming together and even the reversal of opposites . " in the realm of commerce , " to design a bridge to cross a river much is involved , " mr. luttwak writes . " but once that is done , the bridge can be built in safety { for } no river of nature will deliberately set out to erode the structure of a bridge , nor will it deliberately set out to evade its span . " but in military strategy we are dealing with " an animate river , as it were " that will unfailingly do just that . rivals could undercut their price by obtaining more efficient trucks , " but there are legal boundaries to what can be done in economic competition : competition will not undermine the bridges the trucks must cross so that their standardized weight will exceed the bridge load limits. . . . in armed conflict , however , where there are no such legal boundaries , standardization must result in vulnerability for any weapon or device that interacts with the enemy . " the bottom line is that " in the realm of conflict and strategy economic principles stand in direct opposition to the demands of conflictual effectiveness . " we found that out in the war in vietnam , when robert mcnamara and his " whiz kids " tried to run a war as they would a business and in so doing led america to the most disastrous military defeat in its entire history . don't make that same mistake . read " the corporate warriors " for its own sake -- an interesting and entertaining account of corporate " battles " that have some surface similarities to military campaigns . but don't confuse the boardroom with the battlefield . believe me , they're not the same . col. summers is a contributing editor at u.s. news & world report and a syndicated columnist for the los angeles times . reagan's nominee for sec chairman will be david s. ruder , a law professor at northwestern university , officials said . ruder is a highly regarded legal expert but lacks the " tough cop " image some aides wanted . still , officials hope ruder's selection will signal that the white house wants to crack down on insider trading and other abuses . industrial output rose a robust in may , indicating a recovery by manufacturing . housing starts slid , hurt by higher mortgage rates . meanwhile , the deficit in the broadest trade measure , the current account , shrank slightly in the first quarter . national westminster bank plans to add million to its reserve for third world debt , pressuring other british banks to follow . as expected , manufacturers hanover and bankers trust boosted their reserves . citicorp became the latest foreign company to pull out of south africa . the largest u.s. bank holding concern announced it had agreed to sell its unit there for about million . jwt group's directors decided to continue considering a takeover offer from wpp group plc and alternatives to the bid , sources said . separately , former jwt executives said alleged financial irregularities include questionable practices overseas . the dow jones industrials rose to a record , but there was little fanfare on wall street . southland corp. said it is studying various restructuring proposals . the firm's stock rose nearly , to a share , amid takeover rumors . digital equipment slashed prices on its computer workstations in an effort to gain ground in a fast - growing market where it has been weak . the cuts surprised analysts and rivals . ibm announced a series of telecommunication software products that will help its computers talk to each other and help customers manage their computer networks . first boston expects to report a loss for the second quarter , reflecting trading setbacks in fixed - income securities during april and may . british printing plans a billion rights issue , which it indicated may be used to finance a renewed offer for harcourt brace jovanovich . japan's economy grew in the year ended march , the slowest expansion in years . exports continued to be hurt by a stronger yen . ford's taurus and sable cars are being investigated by federal officials for alleged steering problems . aldus corp. shares nearly doubled in price on the first day of trading , closing at each . dow jones industrials , up ; transportation , off ; utilities , off . bonds : shearson lehman treasury index , off . commodities : dow jones futures index , off ; spot index , off . dollar : yen , off ; marks , unchanged . ciba - geigy corp. said spectra - physics inc. agreed in principle to be acquired under a sweetened bid of a share . at that price -- which is a , or million , increase from a previous bid -- it would cost ciba - geigy about million to acquire the of spectra - physics that it doesn't already own . in san jose , calif. , a spectra - physics spokesman said that the two companies are working toward reaching a definitive merger agreement , and that they expect the interim period " to be very short . " the sweetened proposal already has received the blessings of morgan stanley & co. , spectra - physics' investment banker . spectra - physics makes lasers and related products . in composite new york stock exchange trading yesterday , spectra - physics closed at a share , off cents . ciba - geigy is a unit of ciba - geigy ltd. , switzerland , a big producer of pharmaceuticals and chemicals . last month , the unit made a - a - share tender offer for spectra - physics that the company called " inadequate " and " unfair . " ciba - geigy yesterday declined to say how many shares it had received under that tender offer , which is set to expire next tuesday . reliance holds a stake in spectra - physics . " promptly after the execution of the merger agreement , " ciba - geigy said , it would formally raise the price in its existing tender offer to a share . the tender offer , it added , would remain conditioned on ciba - geigy's raising its spectra - physics stake through the offer to at least on a fully diluted basis . a lawsuit spectra - physics filed in federal court in delaware seeking to thwart ciba - geigy's earlier offer is still outstanding , the spectra - physics spokesman said , but it would be dropped as part of any definitive agreement . as of may , ciba - geigy owned about million shares , or , of the approximately million spectra - physics shares outstanding . the international primary market association is asking members that syndicate fixed - rate eurodollar bonds to pledge they will make markets in the bonds for as long as a year . the reason is to persuade investors they can take major positions in new offerings without worrying whether the issues will remain liquid . the association is asking lead managers to register as market - makers for a year and co - lead managers to register for six months . the request applies only to new fixed - rate eurodollar bonds , although the group may extend it to bonds denominated in other currencies , officials say . as a trade association , with investment house and bank members , the group can't enforce its plea . but many houses probably will find it difficult to ignore , because doing so could cost them business from frequent borrowers that are concerned about whether issues get a good market reception . the association's move follows a similar step earlier in the year by the larger association of international bond dealers , based in zurich . that group focuses more on secondary markets . a few years ago , such a plea would have seemed unnecessary . that growth occurred despite a tradition that permitted even lead managers to walk away from issues after they were sold . but the story has been different this year . new - issue volume through may has plunged to billion . the eurobond market's largest sector , eurodollar bonds , has the potential to rebound if the dollar remains stable . but some eurobond dealers fear large pools of capital could remain in other increasingly popular markets , such as the government bonds markets of larger european nations , unless their industry can match those markets in features such as liquidity . " it's important to create an environment where investors feel there's an ongoing commitment to an issue by more than one house , " said hansgeorg b. hofmann , executive director at shearson lehman brothers international . " otherwise , we will continue to drive them to domestic markets . " to some industry officials , the issue has more to do with perceptions than any real exodus of capital . some contend that participants' real concern is being able to see prices and willing market - makers . that is difficult in the eurobond markets because there isn't any central trading floor where dealers post price quotes . while insisting that the association didn't put its new plan into effect because of any serious concern about liquidity , he concedes that " there can be specific issues that have secondary ( market ) liquidity problems . " not even the association is certain how widespread such problems might be . but most dealers routinely make markets in less than about a quarter of the fixed - rate eurodollar bond issues outstanding . " it isn't a problem of overall liquidity , " said koon fong cheng , a secondary - market specialist at dean witter capital markets international . " it's a problem of concentration of liquidity . the least liquid issues are becoming even less so . " that is illustrated by markedly different spreads between bid and offer prices . for example , the bid - offer spread is just basis points , or hundredths of a percentage point , on canada's bonds due , a highly liquid issue . but partly because demand has declined for more volatile , longer maturities , the bid - offer spread on the world bank's / bonds due is about basis points . as long as investors were willing to purchase and lock such issues away , the cost of selling them before maturity wasn't very important . but because of heightened volatility in currency and bond markets , investors increasingly want assurances that they can sell bonds at spreads comparable to those in other capital markets , dealers say . concerns about secondary - market liquidity are beginning to push their way to the early stages of the syndications process . during discussions of planned new issues at morgan guaranty ltd. , " the salesmen want to know who will be making a market in a bond almost before they ask what the price is , " said joseph machale , executive director at morgan . singer co. said it will post a loss of about million for the second quarter . the estimate reflects a pre - tax charge of million related to higher - than - expected costs for three aerospace electronics projects . moreover , the defense electronics concern said it expects profit from continuing operations to drop from the year - earlier million . in the second quarter , singer had a loss from continuing operations of million , but it posted net income of million , or cents a share . included were after - tax gains totaling million , mostly from the sale of a division , and charges of million , resulting largely from the spinoff of singer's sewing and furniture operations and an accounting change . results for this year's third and fourth quarters " should show a strong increase " from the year - earlier periods , singer said . in the year - ago third quarter , the company earned million , or cents a share , on revenue of million . for last year's fourth quarter , it posted profit of million , or a share , on revenue of million . singer said it incurred unexpectedly high development costs on the three programs , which are among an unusually large number of high - technology projects that the company now is developing . the joint tactical information distribution system -- one of the programs related to the charge -- will provide integrated communications and navigation for the u.s. military and members of the north atlantic treaty organization . a second program also is related to an advanced guidance and navigation system . the third program is a guidance and navigation technology project . singer shares closed unchanged at in new york stock exchange composite trading yesterday . ncr corp. charged that a former advertising manager and three companies defrauded it by selling the computer maker marketing studies that were never performed and overpriced promotional items . in a suit filed in u.s. district court in dayton , ohio , ncr asked that the fired employee , edward j. feltz , and the other defendants pay it more than in damages for the alleged scheme . in citing alleged violations of federal law , the company asked that the damages be tripled . ncr , in the suit , contends that mr. feltz , who was manager of advertising liaison in ncr's product marketing division in dayton , violated the company's conflict - of - interest policy by acting as a " statutory agent " for one of the companies named in the suit . ncr charged that mr. feltz induced it to pay at least to the company , r&d chemical co. , dayton , for market research studies that it never received and that weren't competitively bid . results of the research were to have been incorporated into market research studies , ncr said . the company said mr. feltz " exercised a high degree of autonomy in awarding marketing research contracts and in purchasing promotional goods needed for ncr's advertising campaigns . " mr. feltz's home phone number in dayton is unlisted . mr. cummins couldn't be located for comment . an answering service for r&d chemical said it didn't have any record of messrs . feltz or cummins . other defendants named were visumatic industrial products inc. of lexington , ky. ; trans data communications inc. of atlanta ; and harold cunningham of versailles , ky. , who is mr. feltz's brother - in - law , and also is an officer and director of visumatic and president of trans data . ncr alleged that messrs . feltz , cunningham and cummins induced the company to pay for promotional solar calculators and microcassette players that were above market prices and sold to ncr without competitive bidding . mr. cunningham , reached at visumatic industrial products , declined comment and refused to tell how to contact the other defendants or his attorney . ncr alleged that messrs . feltz and cummins subsequently covered up their actions related to the marketing studies when ncr began an investigation in april and may . ncr suspended mr. feltz in april and he resigned may , according to the suit . the canadian government protested france's issuance of oil exploration concessions in disputed waters off the french islands of st. pierre and miquelon . the licenses were awarded to two french companies , total compagnie francaise des petroles and government - owned elf aquitaine . france and canada have had a lengthy territorial dispute over the waters off the two islands , which are near the south coast of newfoundland . they agreed earlier this year to seek arbitration of their differences by an international judicial tribunal . france claims sovereignty over a - mile zone around the islands while canada recognizes only a - mile limit . in march canada banned french trawlers from canadian ports because of alleged french overfishing in the disputed waters , which are part of the rich grand banks fishing zone . in the canadian house of commons , opposition members demanded that prime minister brian mulroney take up the matter of the oil permits with french president francois mitterrand during the current seven - nation summit meeting in venice , italy . " is this government going to sit back and let the french fill their bellies with our fish and their tanks with our oil ? " asked george baker , an opposition liberal party member of parliament . canada has imposed a moratorium on drilling by canadian permit holders in the disputed waters . elf aquitaine previously has drilled and abandoned two wells near the disputed waters , which are more than miles west of the big hibernia oil field off newfoundland's east coast . the new exploration permits are for five years and cover an - square - mile area . exploration off the canadian east coast has fallen off sharply in the past year because of depressed oil prices and the scrapping of generous government exploration grants . disclosure of the french permits followed a visit to canada last month by mr. mitterrand . during his canadian stay , the french president urged the canadian government to lift its ban on french trawlers from canadian ports . mr. mazankowski said a formal protest had been delivered to the french government in paris over the issuing of the exploration permits . this nation's plan to ease regulation of its markets and seek a larger world financial role has created a conflict with neighboring malaysia , where changes are proceeding more slowly . an increasingly strong lobby in malaysia's stockbroking industry , upset over singapore's proposal to cut some brokerage commissions , is pressing for the withdrawal of all malaysian stocks from the singapore stock exchange . malaysian companies account for , or , of the singapore stock exchange -- listed issues , and singapore brokers say to of their income comes from trading malaysian stocks . one singapore broker says an immediate withdrawal of malaysian shares " would set us back years " because it would vastly reduce the singapore exchange's capital and importance . the singapore and malaysian markets combined account for only about of total world stock - market capital . but other brokers here say the singapore exchange will lag even further behind the world's leading markets if its proposed commission cuts are diluted in a compromise with malaysia . singapore and kuala lumpur exchange officials are holding talks to seek such a compromise . singapore , an island nation smaller than new york city , separated itself from malaysia in , but the two nations operated a joint stock exchange until . the malaysian and singapore exchanges suspended trading for three days then , and several singapore brokerages failed . since that time , singapore has begun a cautious deregulation aimed at opening its stock market to new competition , new ideas and new capital . the campaign includes a proposed first step toward freely negotiable commissions . at present , brokers in singapore and malaysia charge a fixed fee on stock transactions . the singapore exchange wants to introduce a sliding scale in about three months , with commissions remaining at for trades of singapore dollars ( about ) or less , then ranging down to for transactions of more than one million dollars . the kuala lumpur exchange has proposed a compromise , saying it would be prepared to follow singapore's lead if the minimum commission on the sliding scale is set at instead of . a central bank official declined to be interviewed for this article , and singapore stock exchange officials were unavailable for comment . even if the sliding scale is introduced , the current commission would still apply to an estimated to of the stock trades in singapore and malaysia , as small investors play a leading role in both countries . but many brokers in both nations still oppose lower commissions , saying a reduced fee for big transactions would harm their income . singapore officials hope that strengthening its brokerage industry's competitive position will allow it to become a major international stock - trading center . it is arranging a link with the u.s.'s national association of securities dealers in which closing prices of dozens of nasdaq stocks would be transmitted to singapore . brokerages here would make a market in the stocks and transmit their closing quotes back to the u.s. as the next day's trading begins there . but although the link may be started this year , it is likely to take several years to develop a sizable market in nasdaq stocks in singapore , brokers say . but singapore brokers hope a compromise on the commissions will postpone the break and give them more time to prepare . mexico's debt - swap plan was unveiled , though bankers said the novel proposal likely wouldn't work for other big debtor countries . the plan , worked out with j.p. morgan , would reduce mexico's foreign debt and give banks a chance to swap part of their mexican loans for new marketable securities , which would be backed by u.s. treasury bonds . the dollar edged lower despite reports of modest central bank intervention . stocks also continued to fall , though treasury bond prices rallied . the dow jones industrials declined , to . london stocks posted their biggest drop in a month . pennzoil said it will reap over billion before taxes from its texaco settlement , putting it " in a strong position " for " major acquisitions . " most of the million in expenses apparently are for legal costs . shearson lehman amended its agreement to acquire e.f. hutton group in order to settle suits filed by hutton shareholders . the new terms give hutton holders more cash and fewer bonds for their shares . a boston edison customer asked federal energy regulators to investigate the utility's management of its pilgrim nuclear power plant , which has been temporarily shut down . the fund is viewed as a major shift from the imf's traditional role as a short - term monetary institution focusing on balance - of - payments difficulties . energy prices surged on spot and futures markets , surprising analysts . they contended there is no reason for such bullishness in the face of world - wide oversupplies of crude oil . property - casualty insurers will have total operating profit of billion , more than double that of , a preliminary report says . eli lilly received final government approval for its much - awaited anti - depressant drug , prozac . lilly's stock jumped , to . first interstate bancorp imposed new terms on its bid for allied bancshares . the change would let first interstate scrap the acquisition if allied's loan problems worsened . china's economic output rose to a record level this year . but a government official said the chinese economy is plagued by the failure of supply to meet soaring demand . engelhard corp. agreed to acquire several specialty chemical businesses from kaisertech for million . rhodes is searching for a possible buyer . analysts said it reflects the furniture retailer's weak performance and possibly the problems of its owner , atlantic american . dow jones industrials , off ; transportation , off ; utilities , off . bonds : shearson lehman treasury index , up . commodities : dow jones futures index , off ; spot index , off . dollar : yen , off ; marks , off . japan society gallery , manhattan : " paris in japan : the japanese encounter with european painting " -- more than six dozen paintings by japanese artists who introduced western - style oil painting to their country in the late th and early th centuries . many of them studied in paris or with teachers who had lived there. east th st. through feb. . the show then travels to the wight art gallery at ucla ( feb. - april ) . san francisco museum of modern art : " bill brandt : behind the camera , - " -- about rarely exhibited vintage black - and - white prints document the career of britain's preeminent th - century photographer . brandt's photos , a cross between the documentary and the surreal , capture such images as european street scenes of the late s and early 's , and london during and after world war ii. van ness ave . through jan. . the exhibit then moves on to the new orleans museum of art ( april - june ) ; the ringling museum of art , sarasota , fla. ( july - sept. ) ; and the columbus museum of art , ohio ( nov. , - jan. , ) . el museo del barrio , manhattan : " puerto rican painting : between past and present " -- the first comprehensive review of puerto rican painting ever mounted in the u.s. includes paintings by five generations of artists . the show , organized and sponsored by squibb corp. , will be up at the museum ( fifth ave. between th and th streets ) through feb. . new york botanical garden : " trees from different lands " -- seven evergreens and one deciduous tree , some as tall as feet , decorated with ornaments representing the holiday traditions of the ukraine , armenia , brazil , germany , japan , poland , scandinavia and the u.s . most of the trimmings are on loan from the smithsonian institution's " trees of christmas " collection . the trees are surrounded by beds of pink , white and red poinsettias and cyclamen , fragrant paperwhite narcissus and eucharist lilies . enid a. haupt conservatory , th st. and southern boulevard , north central bronx . through jan. . ( ) - . the festivities begin new year's eve with a - hour elvis extravaganza . other highlights include two of rockumentarian d.a. pennebaker's latest ; double- and triple - feature theme programs ( " rock bands on tour , " " the ultimate concert , " etc. ) ; the premiere of two performance films starring jimi hendrix and otis redding ; and the closing night ( jan. ) world premiere of john waters's " hair spray , " starring such luminaries as debbie harry , divine , ric ocasek and pia zadora . the restored landmark theater ( at wilshire blvd. ) features a - watt dolby " live concert " stereo sound system installed for the festival. ( ) - . joffrey ballet : it's not too late for visions of sugarplums -- at least the sugar plum fairy -- as the company unveils its new " nutcracker . " this is something of a glasnost production -- the staging and choreography hark back to the ballet russe version -- but the setting is currier and ives americana . city center , w. th st. , manhattan . dec. - jan. . ( ) - . jose van dam is glum golaud ; james levine conducts . jan. , , , , and feb. . then hear verdi's " macbeth " with elizabeth connell as the bossy lady , frederick burchinal as the hen - pecked thane . vyacheslav m. polozov will sing macduff's aria , samuel ramey , banquo's . kazimierz kord conducts . jan. , , , , , , ; feb. , , , . lincoln center , th and broadway , manhattan. ( ) - . houston symphony orchestra is joined by soprano edda moser and guest conductor kent nagano for a program featuring berlioz's overture to " benvenuto cellini , " debussy's popular " la mer , " and selections from richard strauss's lieder with orchestra . jan. , and . on jan. , and , pianist maria joao pires , in her first u.s. tour , joins the symphony in a performance of mozart's piano concerto no. . also on the program is schubert's overture to " rosamunde " and brahms's symphony no. . gerard schwarz conducts . jones hall , louisiana. ( ) - arts . a christmas eve chapter filing by apex oil co. , one of the nation's biggest closely held companies , forestalled a massive corporate liquidation that was to begin today in st. louis . the clayton , mo. - based oil and gas concern -- delinquent on loans of more than million , according to its banks -- filed for protection from creditors under the federal bankruptcy code . that move averted a public auction of stock in apex oil and affiliated companies that was scheduled for today at the offices of centerre bank . the bank , a unit of centerre bancorp , is the agent on the loans , which were made by big banks . the stock in the companies was pledged as collateral against the loans , according to centerre . apex oil , which rarely comments publicly on its business , said in a statement the banks' action forced it to make the filing , which is designed to keep creditors at bay while apex works out a plan of reorganization . apex said in the statement the banks had pressured it to sell its clark oil & refining corp. subsidiary even though depressed oil prices made it " an inopportune time to sell assets . " " the banks also took steps to cut off the flow of cash from customers of both apex and clark , " apex said . " these actions resulted in a virtual standstill in the business of apex and clark . " charles a. hinrichs , a centerre vice president overseeing the banks' planned liquidation of apex , declined to comment beyond confirming the chapter filing had postponed any auction . the impact on the zell purchase of clark wasn't certain , though the filing would likely hold up any sale of assets for now . mr. zell couldn't be reached and apex , through its attorneys , refused to elaborate beyond the statement . apex said it had expected to restructure its bank debt with the proceeds from the clark sale . but , apex said in the statement , " with the recent drop in oil prices , apex's lenders were unwilling to continue to fund the operations of apex and clark . the actions of our lender banks had left us no choice. . . a chapter filing was our only realistic alternative . " apex said it employs about people . first chicago corp. , one of the bank lenders , wrote off a big loan to apex in late . apex bought clark in for about million at a time when oil refining properties were selling near their peak . their value since has plummeted , and several large independent refining operations have become insolvent . apex said along with its filing , clark and other companies also filed for chapter protection . however , two companies affiliated with apex didn't file , the company said : clark oil trading co. , which isn't a subsidiary of apex or clark , isn't having financial problems and will continue operating ; and apex's copper mountain ski resort in colorado , which is financed by different banks than apex . centerre said that its portion of the million in loans is million and that mercantile bank , also based in st. louis , also is owed million . the other banks are chase manhattan bank , continental illinois national bank & trust co. of chicago , first national bank of chicago , manufacturers hanover trust co. , security pacific national bank , republicbank dallas , first national bank of boston , bank of america , ameritrust co. , and first national bank of minneapolis . this time of year , letters pile up for gunnar kaspersen . they are from children all over the world , and they have addresses like these : santa claus , reindeer cottage , greenland ; father christmas , the grotto , greenland ; and pappa noel , iglu de papa noel en groenlandia . " it is sweet , " says mr. kaspersen , a - year - old grandfather who calls himself general - secretary to santa claus . as head of the postal authority for greenland , a self - governing island under denmark's protection , mr. kaspersen's job includes guarding that portion of the santa claus myth that locates his workshop and reindeer stable in greenland . for years , mr. kaspersen has replied to each of the children who send letters to mr. claus in greenland . he expects to receive a record letters this year . " i want this tradition to remain as unspoiled and sweet as it is , " he says . but mr. kaspersen has competition from more commercially motivated claims to mr. claus's true domicile . finland , sweden and norway have launched aggressive bids to make big bucks from their versions of santa's hideaway . british airways runs concorde excursions from london to rovaniemi , finland , which the finns promote as the home of mr. claus . and in norway , businessmen in the small town of mo i rana , miles south of the arctic circle , are gearing up to promote their home of mr. claus . all of which -- like most everything else associated with santa claus these days -- is a far cry from the myth's origins in the third century when nicholas , a christian bishop in the turkish city of myra , became famous for his generosity . after his death he was canonized and became one of the most popular roman catholic saints . eventually st. nicholas came to be associated far and wide with christmas giftgiving , and the elaborate fabric of reindeer , elves and a north pole workshop was embroidered around him . " the tradition of placing him on greenland dates back to the late s , " says joern pioe , a danish writer who has researched santa claus traditions . a walt disney cartoon put mr. claus's workshop in greenland , and in the s children began mailing letters to him there . says mr. pioe , " other traditions are younger and purely commercial . " the norwegian business group in mo i rana won't argue that . the area is dotted with closed gold and silver mines . " we need jobs here , and . . . this is the way to create them . " each year , a million tourists drive through the unspectacular town on their way to nordkap , norway's northernmost point . " we are right there on the way and just have to make them stop , " mr. oeverland says . anyway , he says , " no one can take a patent on santa claus . " if anyone tried , finland might have an earlier claim . in , eleanor roosevelt expressed an interest in seeing lapland during an official visit to finland . " the problem was that there was nothing to see , " says a finnish tourism official . so the finns built a small house next to the landing strip in rovaniemi , lapland's capital , and called it the home of mr. claus . " we had to do something , " the official explains . over the years , shops sprang up around the claus home offering lapp crafts , reindeer skin and antlers . father christmas souvenirs are best - sellers . besides the shops and the desolate landscape , there is an animal park , skiing and various santa claus activities . last year , tourists visited joulumaa -- christmas country -- in rovaniemi . more than finnish children dialed santa on the phone , and children from countries wrote to him . and then there are the concorde flights from london . the fare isn't for kids : # ( ) . but for that , says denise butler , a - year - old travel agency secretary who took the trip last year , " i thought it was a wonderful day . " she adds , " we got around a bit , and everybody had their picture taken with father christmas under the nose of the concorde . " mr. kaspersen , the danish postal official , views all of this with disdain . " we have many offers to make big profits out of santa , but we turn them all down , " he says . " i know what this is about . i have a grandchild myself who writes to santa claus . we must protect children's naive and innocent nature . " the world - wide battle of the ulcer remedies intensified as glaxo holdings plc of britain unveiled plans to sell its popular zantac ulcer treatment as a nonprescription drug in the u.s . the glaxo move counters a similar strategy announced recently by philadelphia - based smithkline beckman corp. , which is the british pharmaceutical company's arch - rival in the # billion ( billion ) world market for ulcer medicines . the two companies now sell their ulcer products only by prescription , and it will take them at least a few years to win u.s. government permission to sell over - the - counter preparations , analysts said . but the smithkline move and glaxo's response sharpen the companies' acute rivalry and mark the latest in a series of co - marketing and cross - licensing agreements in the pharmaceutical industry , largely reflecting intensifying competition . the world market for ulcer medcines began ballooning with the launch in the u.s. of smithkline's tagamet brand of cimetidine , and grew further with glaxo's launch of the zantac brand of ranitidine -- now the world's top - selling prescription medicine . with so lucrative a market at stake , other companies also have since entered the field . after smithkline last june " threw down the gauntlet " by announcing over - the - counter marketing plans , mr. de pass said , glaxo had to respond with " a defensive move . " otherwise , over - the - counter tagamet sales might have started eating into prescription sales of zantac , he said . like smithkline , glaxo enlisted a partner for its over - the - counter plans . the company said it signed a letter of intent with the switzerland - based pharmaceutical company sandoz ltd. , giving sandoz exclusive u.s. marketing rights for a non - prescription formulation of ranitidine , zantac's active ingredient . the formulation , a glaxo spokesman said , would be a smaller dosage than prescription zantac , which glaxo would continue promoting to u.s. physicians and hospitals with switzerland - based hoffmann - la roche & co. , its partner in that market . the british concern's glaxo inc. unit is based in research triangle park , n.c . sandoz's u.s. unit already sells consumer health products ; glaxo inc. doesn't . moreover , glaxo said , sandoz agreed to collaborate with glaxo on the swiss company's new , prescription hypertension medicine , the dynacirc brand of isradipine . the drug is one of a class of medicines known as calcium channel blockers . these have gained wide use lately , and the competition in marketing them is stiff . dynacirc isn't yet approved for use in the u.s . the sandoz drug , for which glaxo expects to win u.s. food and drug administration approval next year , could generate u.s. sales of about million annually , said james culverwell , an analyst at london stockbrokers hoare govett ltd . smithkline's partner in an over - the - counter tagamet preparation is new york - based bristol - myers co. , which is a strong marketer of nonprescription products . " we have been anticipating something along these lines ( from glaxo ) and we were already moving full speed ahead in development and marketing plans , " the spokesman said . for both companies , analysts said , the over - the - counter moves offer a chance to expand sales beyond the increasingly crowded field of prescription ulcer medicines . both companies' nonprescription formulations will be aimed at people with acid indigestion and other minor stomach ailments -- a market estimated by hoare govett's mr. culverwell at million to million annually in the u.s . but he said he expects smithkline to grab a bigger share than glaxo of that market , as smithkline's preparation probably will be first on the market in the early s . fine homes international , a master limited partnership -owned by merrill lynch & co. , said it will turn over certain mortgage activities to a unit of general motors acceptance corp . the partnership , which operates under the name merrill lynch realty , said the move will result in a fourth - quarter , one - time charge of million , or cents a partnership unit . as previously reported , fine homes earned million , or cents a unit , on revenue of million in the third quarter . the move will allow the big financial services subsidiary of general motors corp. to continue expanding into the home mortgage business . while mortgage closings will continue to be made in the name of merrill lynch realty , gmac mortgage corp. will assume such functions as reviewing the credit of applicants and marketing loans for sale to institutional investors on the so - called secondary mortgage market . gmac mortgage , a relatively new unit of general motors acceptance corp. , was started in when the financial services concern made acquisitions in the home mortgage business . gmac mortgage services more than billion of mortgage loans , and in addition will originate about billion of mortgage loans this year . she said the mortgage services unit employs about people , many of whom will lose their jobs . the operation also runs about offices , which may be closed . merrill lynch tried to get out of its real estate operations entirely last year but failed to arrange a takeover . it then formed fine homes earlier this year and sold a stake to the public . fine homes said its mortgage services unit lost million for the first nine months of because of fluctuations in mortgage interest rates and a slowdown in mortgage business . in new york stock exchange composite trading yesterday , fine home units closed at , up cents . news corp. said british publisher robert maxwell is among several possible buyers of the money - losing new york post . news corp. , which is controlled by rupert murdoch , must sell the post by march under federal media rules that prohibit one company from owning a newspaper and television station in the same city . in , news corp. acquired television stations in new york and several other cities . mr. maxwell is one of mr. murdoch's newspaper competitors in england and has been expanding in the u.s. through acquisitions . according to the associated press , in a meeting in london with u.s. news correspondents , mr. maxwell , chairman of maxwell communication corp. , said , " we are seriously looking at one or two properties " in the u.s . " one of the properties we are looking at is the new york post . " mr. maxwell said he will pursue an acquisition " if the price is right and we are satisfied that we've got something to contribute , " the ap said . asked why he would be interested in buying a newspaper having losses , he said : " if there is a hard way to do something and an easy way , i always go for a hard way . " mr. maxwell , who declined to identify the other possible acquisition target , said he was interested in such purchases because prices for newspaper properties have fallen . a news corp. spokesman in new york confirmed that mr. maxwell is among several post suitors who have sought financial information about the newspaper . but , the spokesman said , mr. maxwell hasn't agreed to sign confidentiality agreements required to receive the information . " mr . murdoch has said he would be glad to provide it " once the agreements are signed , the spokesman said . gazebos . it sells them to such classy overseas customers as japanese corporations and the saudi royal family . vixen hill sells them here at home , too , but right now it can't give one away . the tiny elverson , pa. - based company thought it would be nice to donate one of its ornamental wooden shelters to the u.s. botanic garden in washington . strapped for cash , the federal plant conservatory was eager to accept the gazebo , valued at . but before vixen hill could say the word " bureaucracy , " the gift got wrapped in red tape . thirty months later , three government agencies have reviewed the proposal , and special legislation has been introduced in congress . but the botanic garden still doesn't have its gazebo . " it's kind of hard to believe , isn't it ? " admits david scheid , executive director of the garden . " we want it , they'll give it. . . . but there's a catch - . " the garden's charter from the early th century allows donations only of plants and books -- no gazebos . vixen hill sought an exemption from george white , architect of the capitol , who controls the garden . mr. white regretfully declined , explaining that congress would have to provide specific permission . in any case , says mr. carroll , " what ( vixen hill ) is really after is promotion . " not so , protests j. douglas jefferys , vixen hill's vice president . " we're a little company that wants to do a good deed . " mr. jefferys sought help from his congressman , richard schulze , who introduced a bill to empower congress to accept gifts for the garden . unfortunately , the bill has languished since april before a house subcommittee . " it's not a very high priority , " admits an aide to the republican congressman . " it probably isn't going anywhere anytime soon . " vixen hill also appealed to the u.s. capitol historical society , a congressionally chartered group that accepts gifts of all sorts for capitol buildings . the society says it wants to help , but isn't sure it can . " we've tried that route ( for getting gifts ) and were told it's not legal or proper or something , " explains mr. scheid . mr. jefferys says that , after making several trips to washington and writing " a stack of letters , " he has begun to lose hope . " it's been a real civics lesson , " he says . minority shareholders of marine midland banks inc. approved the sale of their holdings to hongkong & shanghai banking corp. for a share , or million . holders of the of marine midland that hongkong & shanghai didn't already own will receive a share plus a special dividend of cents a share . the acquisition , which now is effective , represents another step in hongkong & shanghai's efforts to broaden its market and to defuse the uncertainty surrounding hong kong's future when china reclaims the british territory in . federal reserve board approval wasn't required for the transaction . hongkong & shanghai also recently announced the purchase of a stake in midland bank plc , britain's fourth - largest bank , which isn't related to marine midland . the acquirer has said that it intends to operate marine midland , the nd - largest bank holding company in the u.s. , as an independent entity . but the two banks began to consolidate some operations , particularly in the treasury and capital markets areas , shortly after marine midland's board in september agreed to a sweetening of hongkong & shanghai's original , - a - share offer . in addition , marine midland has closed its london office and now uses hongkong and shanghai's london treasury offices . the two concerns have announced a similar " rationalization and integration " of their offices in europe and the far east . house - senate conferees agreed to an extension of the telephone - tax user fees , but put off until later this week the more difficult decisions on a billion tax - increase measure . the conferees ratified about billion in provisions that were identical in the house and senate versions of the bill . treasury secretary james baker told the conferees that the white house was generally pleased with the senate version . he said the reagan administration has problems with several of the provisions in the house measure , particularly the ones that would slow down takeover activity and increase corporate minimum taxes . the house conferees will present their senate counterparts with a " counterproposal " today that is expected to include proposed compromises on some big revenue - raisers . but chairman dan rostenkowski of the house ways and means committee indicated that he intended to retain a controversial house provision that would end the completed - contract accounting method used by defense contractors to defer taxes . " i'm going to try to keep it , " the illinois democrat said late yesterday . the tax conference was one of many meetings on capitol hill meant to resolve the differences that remain in house - passed and senate - passed deficit - reducing measures . the bills are being written to conform with the billion in savings agreed to during negotiations between the white house and congress ended nov. . but many nettlesome issues remain , and the government's current spending authority ends tomorrow . that means a brief extension is likely to be needed to allow time for the last budget details to be worked out . among the many issues that could tie up the talks is aid to the contra rebels in nicaragua . the senate approved million in nonlethal funding for the contras , but the house has adamantly opposed any additional money . meanwhile , president reagan told members of his cabinet yesterday that he would be willing to veto the congressional spending bill if it weren't changed to deal with his objections , according to one person attending the session . in addition to extending the existing telephone tax for three years , the conferees agreed to impose user fees on certain services provided by the internal revenue service and the bureau of alcohol , tobacco and firearms . the conferees also agreed to eliminate graduated rates for personal - service corporations , thus requiring them to pay the flat corporate rate . this would raise taxes for corporations consisting of lawyers , doctors , accountants and architects . the conferees also ratified a provision that would require restaurants to pay payroll taxes on cash tips received by waiters . chairman rostenkowski and secretary baker acknowledged a dispute over whether a provision that would speed up payment of corporate estimated taxes should be counted toward the billion in taxes called for in the white house - congress budget accord . the provision would raise billion in revenue for the fiscal year that began oct. , but rep. rostenkowski contends it isn't a " hard " tax for deficit - reduction purposes . on the takeover provisions , mr. baker said , " we frankly have reservations " about their impact on financial markets . these provisions would remove or curtail existing tax benefits in mergers and acquisitions . mr. baker called the house provision that would increase corporate minimum taxes on book income " particularly undesirable . " the president's veto comments came after a briefing by budget director james miller on a list of administration objections to the spending measure . among other items , the white house opposes senate - approved provisions that would prohibit the administration from selling small business administration loans ; prohibit the defense department from acquiring certain machine tools that aren't manufactured in the u.s. or in canada , and allow the use of federal funds to perform abortions in the district of columbia . mr. miller expressed fear that congress would complete final action on the spending measure on dec. and leave town , making it difficult for the president to veto it . but according to one participant in the meeting , the president indicated no reluctance to disapprove the spending bill and close down the government on christmas eve , if necessary . " i've often wondered , " the president reportedly said , " if we ended up with something like that and had to turn out the light , how long it would be before someone noticed . " alan murray contributed to this article . opec reached a weak price production pact that is unlikely to prevent an oil - price slide . the news sent world oil prices plunging and sparked a bond market rally . the pact also helped stocks . the dow jones industrials soared , to . meanwhile , the dollar skidded to post - world war ii lows against the yen and mark before rebounding . a texaco creditors panel backed a billion settlement plan approved last week by texaco holders and pennzoil . the support could allow a bankruptcy court to force the settlement on texaco , which moved to reopen direct talks with pennzoil . bank of boston will take a million charge against its third world loans , the first time a major u.s. bank has charged off such debt . the move steps up pressure on other banks to take similar action . merrill lynch became the latest wall street firm to retrench , saying it will make layoffs , freeze most salaries and slash bonuses and commissions . the aim is to cut up to million from next year's budget . mexico devalued the controlled peso rate , used by most businesses in import and export transactions , by against the dollar . the devaluation is aimed at stabilizing mexico's volatile exchange - rate system . telex agreed to be bought by memorex international for a share in cash and stock , or an indicated million . the agreement foils a takeover attempt by asher edelman . gaf chairman samuel heyman proposed to take the firm private for billion , or about less than his bid before the market crash . analysts said a rival bidder , possibly a foreign concern , may emerge . bell & howell agreed to be acquired by a bass - led group for a share , or million . industrial output rose in november , another sign that the nation's industry continued to show strength following the stock market crash . business inventories rose in october , while sales dropped . burroughs - wellcome cut off the price of its costly aids drug , azt , citing production improvements . the firm's reduction came after nine months of political pressure . mattel has limited toy shipments to retailers during the fourth quarter and will report a loss for the year because of disappointing sales . british consumer spending continues to surge despite the crash . figures to be released this week are expected to show a robust economy . chrysler pleaded no contest to charges that its odometer tampering was criminal . it also formally agreed to pay million to settle most of the civil litigation in the case . stocks : volume shares . dow jones industrials , up ; transportation , up ; utilities , up . bonds : shearson lehman treasury index , up . commodities : dow jones futures index , off ; spot index , up . dollar : yen , off ; marks , off . in an action that heralds the spread of a new computer printing technology , unisys corp. said it agreed to buy million of ion deposition printers from delphax corp. , randolph , mass . delphax , a joint venture owned by dennison manufacturing co. , waltham , mass. , and xerox corp. , stamford , conn. , has been selling versions of the new printers for four years , but has captured only a small share of the fast - growing , billion market for non - impact printers , which is dominated by laser printers . the delphax " technology has been wonderful , " said david henry goodstein , president of interconsult inc. , a cambridge , mass. , consulting firm . " the problem for delphax has been figuring out how to crack the mainstream market . this ( unisys transaction ) is the biggest thing so far in helping them do that . " under the agreement , blue bell , pa. - based unisys , a computer maker , will buy the printers over the next three years , add software and packaging , and resell them as the unisys b for each . the printers will be sold to unisys customers for high - speed printing at pages a minute in data processing centers and offices . they are expected to replace aging , noisy line - printers and compete with high - speed laser printers made mostly by xerox and international business machines corp . the delphax printers handle single sheets of copier paper . " the technology has come of age , " thomas j. kinney , vice president of delphax , said . " unisys confirms we've gone from an interesting , novel technology to a real competitor . " ion deposition printing was developed in the s by dennison , a stationery products and label maker , to print bar codes . it formed delphax to find additional uses for the technology , and since , delphax has been selling versions of the printers to other companies , including xerox and honeywell - bull inc. , which then resell them . this year , delphax expects to sell about million of the printers . the technology involves shooting negatively charged ions , in patterns that form letters and graphics , onto an anodized aluminum roller that attracts magnetic toner to the charged areas . the roller then crushes the toner into the paper to print on it . it is also nearly silent and it doesn't use heat to melt the toner onto the paper as laser printers do . a unisys spokesman said , " in general , we believe ion deposition is more reliable , more maintainable , with less mean - time between stops than a photoelectric - type system . " the printing technique , which delphax said is thoroughly protected by patents , doesn't yet allow the very high - quality printing provided by laser printers . but mr. goodstein , the consultant , said quality is likely to improve as more fonts are developed for the ion deposition printers ; a font is a complete assortment of type in one size and style . the toner sometimes flakes off when the paper is creased . and the paper often looks shiny because it has been crushed by the roller . cathernie dingman , an analyst with cap international inc. , a marshfield , mass. , market research concern , predicted that ion deposition printers will capture a big piece of the market for non - impact printers , especially for forms , reports and other internal documents . michael winkler , xerox vice president , central printing , said that currently he sees high - speed laser printers and the somewhat slower , lower - quality ion deposition printers as " complementary . in the early s , as both technologies advance , we are going to see more competition . we are hedging our bets " by sharing ownership of delphax . but ion deposition isn't ever likely to compete in the market against desktop laser printers based on japanese copier technology that cost less than . tie/communications inc. said it agreed to acquire abi american businessphones inc. in a transaction valued at as much as million . terms call for tie , a telecommunications concern , to offer shareholders of abi , one of its largest equipment dealers , the choice for each abi share , of either shares of tie common , or in cash plus one tie share . tie said certain abi directors and officers have agreed to accept the tie shares for their collective of abi common , or about shares . if the holders of the remaining abi shares all opt for the stock package , tie will pay a total of million in stock for the company . if they all opt for the cash and stock combination , tie will pay a total of million in cash and stock . on friday , tie closed at a share , up cents , in composite trading on the american stock exchange . abi closed at a share , up , also in composite trading on the american exchange . irvine , calif. - based abi , which sells , installs and maintains telephone systems for commercial users , granted tie an option to buy as many as abi shares , or about of abi common , at a share , depending on certain conditions . the merger is subject to certain conditions , including approval by abi shareholders . abi said it expects to hold a special shareholder meeting on the merger plan in march or april . coca - cola co.'s columbia pictures entertainment unit will dismiss as many as of its employees in a restructuring that is expected to cut overhead costs by million annually , according to executives familiar with the plan . the layoffs are part of the planned merger of coke's entertainment sector , which includes columbia pictures , and coke's one - third owned tri - star pictures inc . the new company , columbia pictures entertainment inc. , will be headed by tri - star's chairman and chief executive officer , victor kaufman . mr. kaufman and other company executives said they couldn't comment before the completion of the transaction , expected later this month . as previously reported , coke recently disclosed that it is setting up a million reserve for columbia pictures entertainment . that reserve , which will reduce coke's fourth - quarter net income by million , or two cents to three cents a share , will cover restructuring moves such as laying off employees and writing down canceled movie and television projects . severance and other costs associated with the layoffs are expected to eat up about million of the reserve , company sources said . although columbia hasn't disclosed specifics of the layoffs , wall street analysts praised the plan . " the movie business tends to staff up and accumulate a lot of overhead , and this is an appropriate point for columbia to examine the place and lose a little overhead . " but mr. vogel and other analysts question whether the million reserve will be sufficient to cover all the costs of restructuring columbia . the layoffs under way cover all of the motion picture and television operations , both in the u.s. and abroad , where columbia is shutting down most of its production operations . about of the employees being dismissed are in the columbia pictures motion picture group . dawn steel , who was recently named the new president of the studio by mr. kaufman , has been overseeing a major reorganization of the studio , dismissing a number of executives associated with her predecessor , david puttnam . many of the executives are associated with projects of mr. puttnam's that ms. steel is also likely to cancel . " there have been five administrations here and everyone hired his own staff and no one fired anybody , " the source said . columbia is also planning to use outside contractors for some things that were previously handled by staffers , such as the making of movie trailers . ms. steel is replacing some of the fired production executives with her own hand - picked choices . she recently named an orion pictures corp. production executive , rob fried , as executive vice president of production . but at least two production executives hired by previous managements -- tom rothman and michael nathanson -- will remain at the studio . bankers trust co. invests in a power station . citicorp acquires property for the mormon church and prepares to buy into a gold mine and a fishing fleet . rich chileans repatriate hundreds of millions of dollars , especially to invest in local banks , and new zealand becomes one of the biggest foreign investors in chile . these are some results of chile's vigorous and controversial campaign , started in , to control its billion foreign debt by allowing foreign banks and chilean and international investors to convert the country's foreign debt into local pesos at preferential rates of exchange . so far chile has canceled about billion of its foreign debt through these debt conversions , the country's central bank says . while the debts of all other major latin american countries have grown steadily , chile's has fallen slightly as debt cancellations have more than kept pace with new borrowing . as of sept. foreign debt totaled billion , down from billion at dec. , , a decline of about after allowing for inflation over the - month period . if present policies continue , chile can reduce its debt enough to regain access to the international capital market , he contends . foreign and local banks laud the debt - conversion programs . " it evidences a willingness to pay the debt that sets chile apart from some other latin american countries , " says richard bentley , a bankers trust vice president who oversees his bank's debt - conversion business . much of the debt has been bought by chileans and swapped for local currency to invest in the local banking system , santiago financiers say . there are two main programs for converting chilean debt into local currency . under the first of these , chilean and international investors can exchange debt for local currency at monthly auctions at the central bank . these auctions are limited to a total of million a month , and about billion of debt has been converted through that program . the other major debt - conversion route is designed for foreign bank creditors , which can get pesos from the central bank in exchange for debt , provided the local currency is used to make agreed investments in chile . about million of debt has been converted in this way . unlike investors in the first program , foreign banks have access to the foreign exchange market to remit profits . foreign creditors , banks in particular , hold chile up as an example for other heavily indebted latin american countries . but so far , only mexico has allowed a substantial amount of debt conversion . under pressure from their foreign creditors , argentina and brazil have recently instituted debt - conversion programs -- but on terms significantly more restrictive than chile's . but there is considerable opposition to the conversion programs , in chile , where many think foreign investors get unfair advantages , and elsewhere in latin america , where critics say such aggressive debt - swapping is only possible in a country such as chile , whose military dictatorship stifles public debate . eduardo amadeo , economic adviser to argentina's peronist opposition , contends that aggressive debt conversion is possible only in countries where " ballot boxes are filled with votes before the election . " in chile , local bankers and economists admit to having reservations about the wide scope of the conversions , and to the large preferential rates of exchange given to foreign investors , sometimes as high as or , according to ricardo french - davis , an economist at cieplan , a santiago - based think tank . chile is proportionately more - heavily indebted than many other latin american countries and by itself can't restore its creditworthiness , mr. french - davis says , pointing out that foreign debt and interest payments total about times chile's gross domestic product , compared with an average of of domestic product for the rest of latin america . while chile's regime has been able to mute criticism of debt conversion , the government has responded to some expressions of concern . after substantial local pressure from real estate companies that feared converting debt could undercut property prices , the central bank let it be known it probably wouldn't allow such conversions in the future . moreover , chile's economy has recently performed better than many of its latin american neighbors , lending weight to the arguments of those who support vigorous debt conversion and debt - equity swaps . growth has averaged about a year since , after a sharp decline in the early s , and inflation will probably total about this year , compared with well over in brazil , argentina and mexico . investment is up sharply , and chile has diversified its exports away from reliance on copper , selling abroad large amounts of fruit , fishmeal , pulp and paper . " i don't see how we would have been able to accomplish all this in an atmosphere of confrontation with our foreign creditors , " says the central bank's mr. somerville , who is optimistic about chile's economic prospects , though he concedes wages are low , unemployment high and the u.s. stock market crash might trim demand for chilean goods . but to continue prospering , chile needs good relations with foreign creditors , mr. somerville says , especially as it relies on them for at least billion in trade credits to support its growing exports . indeed , export businesses have attracted many of those who convert chilean debt for local currency . citicorp is converting debt to invest in resource businesses such as mining , fishing , agriculture and forestry , which produce for export . it is going into many of these joint ventures with shell chile , a unit of royal dutch/shell group . they have bought debt to buy into forestry , pulp , paper and agricultural businesses . the largest chilean debt - equity conversion was done for carter holt holdings ltd. , a new zealand forest products and fishing company , which bought about million of debt , and added another million in cash to buy into copec , a chilean forest products company . fletcher challenge ltd. , another new zealand forest - products company which has interests in trading and agribusiness , followed suit . the new zealand dairy board recently bought debt to invest in chilean agriculture . but much of the proceeds from chile's canceled debt have been invested in financial - services businesses . bankers trust , the first foreign bank to swap large amounts of its chilean debt for portfolio investments , swapped million of debt and added another million worth of pesos to buy of provida s.a. , a pension fund , and of consorcio nacional , an insurance company . using million of consortia dividends and locally borrowed funds it bought into a power plant . european community transport ministers adopted , as expected , a modest but long - awaited plan to partially deregulate europe's airline industry . the package of rules , which was unanimously adopted and will go into force jan. for three years , is seen as a first step toward breaking up anti - competitive airline deals and giving consumers and airlines more choice of fares , routes and service . stanley clinton davis , the ec commissioner for transport , said that " ordinary people " will " begin to get a much squarer deal than before " and that airlines will have " room for innovation . " but as a result of the / years of wrangling that preceded yesterday's vote , the rules are extremely modest and aren't expected to have a sharp effect on prices . the cheapest fares in europe still are offered by charter airlines , which carry more than of all intra - european traffic and aren't included in the package . the capacity on given routes between competing carriers will continue to be regulated , and any airline financially hurt by the new competition will have recourse to the ec . some airports will be exempted from the new rules as well . nevertheless , the package will give scheduled ec airlines the opportunity to phase in some lower fares , to operate on some new regional routes and to compete more vigorously with other scheduled ec carriers for market share on cross - border routes . " we will certainly use the extra freedom the package gives us , " said karlheinz neumeister , secretary - general of the association of european airlines . " and this is obviously what the consumer wants . " peter sutherland , the ec commissioner for competition , said the package is a first step toward deregulating air travel in the ec by . although mr. sutherland said he would have preferred something more far - reaching , " it was better to move this way than by confrontation , which would have taken longer and involved protracted legal battles . " the ec commission , which last year began legal proceedings against nine carriers for their alleged collusive behavior , kept up pressure by threatening to annul certain airline agreements and thus open airlines up to lawsuits from passengers , travel agents and others . it is believed that passage of the plan yesterday will make such actions unnecessary . giant stocks such as apple computer did well in over - the - counter trading yesterday , although as a group they rallied less than the bigger new york stock exchange blue chips . investor enthusiasm , however , didn't spread to other otc stocks , which in general dipped in sluggish trading . " basically , there is a lack of participation in anything but the big capital stocks , " said william r. rothe , managing director of trading for unlisted stocks at alex . brown & sons in baltimore . " investors are unsure ; there is a flight to quality , " he says . some investors are waiting for an annual trough in otc prices tied to heavy selling at tax time by individual investors . the decline often precedes a winter rally in otc prices . traders said yesterday there was some tax selling by individuals , but most individual investors stayed away from the market entirely . more than half of the nasdaq issues , or about stocks , didn't trade at all or closed unchanged . decliners outpaced advancing issues to . the nasdaq composite index , which is driven largely by the biggest stocks , closed up at . the national market system industrials , which reflect prices of the institutionally - traded giants to an even greater degree , closed up at . nasdaq volume , at million shares , was light yesterday , although million of those shares changed hands on the national market system , reflecting somewhat brisker volume for the larger stocks . the biggest computer stocks and their semiconductor suppliers , led yesterday's climb among the large issues . apple computer was up / to , its best gain in several weeks . apple , while its price has been flat in recent weeks , is still up for the year . intel rose / to / . among the biggest otc computer software issues , microsoft , with shares valued at billion in the marketplace , rose / to / . and the billion lotus development was up / to / . a look at the performance of progressively smaller software stocks yesterday , shows how the two - tier market operated . the million and larger software stocks generally showed more modest increases . oracle systems was up / at / ; ashton tate rose / to / ; novell rose / to / ; autodesk was up / to / . after that , the smaller the software stock and the more heavily held by individuals , the more its price tended to slump . the million vm software fell / to ; micropro dropped / to ; gartner group tumbled / to / ; dynamics research was off / to / ; rabbit software fell / to / . among smaller software concerns with million or so market value , delphi information systems fell / to / and technalysis fell / to . even the small software issues that are still showing big gains for the year slid yesterday . telos corp. fell / to / ; it's still up so far in . and dyatron slid / to ; it's ahead for the year . pre - paid legal services inc. said it expects its fourth - quarter and full - year earnings per share to be below their year - earlier levels . in a meeting with securities analysts here , the ada , okla. - based provider of legal service insurance predicted that fourth - quarter profit will be eight to cents a share , compared with cents a share a year earlier . the expected fourth - quarter result would give the company profit of to cents a share for all of . it posted profit of cents a share for , including about cents a share from an accounting adjustment . the company didn't make estimates for net income . pre - paid legal also said it expects revenue to rise to about million . in the fourth quarter , pre - paid had earnings of on revenue of million . for the year , the company reported net of million on revenue of million . harland c. stonecipher , chairman and chief executive officer , also forecast that earnings will " at least " double 's and that revenue next year will rise about . he blamed losses earlier this year on some " fraudulent " claims and " excessive " fees and said controls in such areas have been tightened . for the first nine months of , pre - paid legal had profit of , or two cents a share , on revenue of million . reagan said chances were good for an accord on strategic nuclear weapons . the president , in a televised interview , said he was hopeful that the superpowers will complete a treaty next year halving their arsenals of long - range missiles . he also said he would be " very disappointed " if next week's summit with gorbachev doesn't lead to another summit in moscow next year . reagan said he hasn't changed his mind about the soviet union , which he once called an " evil empire , " but indicated he believes gorbachev represents a new breed of soviet leader . reagan strongly defended the pact banning intermediate - range missiles , saying conservative opposition was based on " lack of knowledge . " cuban detainees agreed to end an - day standoff at an atlanta prison . federal negotiators said the tentative pact , approved by attorney general meese , had been put to a vote and accepted by a majority of the inmates . a cuban - born bishop was reported to be on his way to the prison to preside over a signing ceremony . no details of the settlement were disclosed and none of the hostages have yet been released . an exile leader at the prison said inmates were shouting , " tomorrow the suffering will be over for everybody . " cardinal obando said he was returning to managua today after an initial round of nicaraguan peace talks in the dominican republic . the cardinal , who is acting as go - between , said he would try to force sandinista and contra delegations to meet face - to - face , but a nicaraguan government spokesman said that was out of the question . a salvadoran rebel leader said rightist death squads are intact , preventing his return to political life in his native land . guillermo ungo made the remarks in new york after visiting el salvador for the first time since he went into exile seven years ago . iran's larijani ended two days of talks with u.n. secretary - general perez de cuellar aimed at implementing a security council resolution calling for a cease - fire in the persian gulf war . the deputy foreign minister called the talks fruitful but reiterated tehran's demand that iraq be branded the aggressor in the seven - year - old war . cambodian rivals agreed on the outline of a peace accord following talks in france . details are being withheld until the signing . sri lankan officials said indian troops fired heavy weapons into a town in the eastern batticaloa district after an ambush by tamil separatist rebels , killing people , including civilians . an indian official said the civilians were caught in a cross fire during the ambush and indian troops had no alternative but to return fire . a bombing suspect awakened in bahrain after a failed suicide attempt , but was refusing to answer questions about her role in the destruction of a south korean airliner carrying . fingerprint identification is expected soon . separately , the incident is increasing tensions in south korea's presidential campaign . a haitian opposition leader again called for a general strike , beginning today , if the military government didn't resign following canceled elections and the killing of . the san francisco examiner said a witness claimed people were massacred saturday at an army prison outside port - au - prince . the government denied the report . a senate panel voted to ban the sale of stinger anti - aircraft missiles to bahrain . aids researchers will present results of preliminary studies on ampligen , a new drug they believe may delay the onset of the disease , tomorrow in washington . a doctor at a philadelphia university where studies were conducted said no claims are yet being made for the drug and that expanded testing will be necessary . a federal judge sentenced two members of a neo - nazi group to years in prison each for violating the civil rights of a jewish radio talk - show host by shooting him to death outside his denver home in . a bhopal strike virtually shut down the indian city on the third anniversary of a gas leak at a union carbide pesticide plant that killed more than people . about children marched and people rallied at the plant's gates to mark the anniversary . a moscow journal published a long - suppressed letter from nikolai bukharin , a lieutenant of lenin executed in , pleading for future soviet leaders to reinstate bolshevik victims of stalin's purges . allegis corp. took the first step in its huge refinancing , lining up four banks to provide nearly half of an almost billion credit agreement . the refinancing , expected to be completed by year end , is an important part of the restructuring of allegis , which is selling its hotel and rental - car businesses to focus on its united airlines unit . allegis said bankers trust co. , citibank , manufacturers hanover corp. and morgan guaranty trust co. of new york have committed to provide billion of the credit . as co - agents for the loan , those banks will find other lenders to provide the remainder . other details weren't disclosed , but allegis said the agreement will allow it to pay certain existing allegis and united debt , and replace united's million revolving credit agreement and letters of credit . the revolving credit agreement is currently unused . although allegis said no additional debt will result from the transaction , the agreement suggests how heavily leveraged the balance sheet of a stand - alone united airlines will be . the almost billion in long - term loans , coupled with expected equity of million after the restructuring , indicates that the remaining company's long - term debt would be about of capital . as previously reported , the higher percentage of debt is expected to come as allegis pays out a special dividend to shareholders from the sale of its hilton international co. , hertz corp. and the westin hotels units . the dividend , which has an indicated value of more than billion , will result in a sharp decline in common stock equity . although analysts expect united airlines to have strong cash flow next year to cover interest payments , some analysts and investors fear the higher debt ratio leaves the airline more vulnerable in the event of an economic slowdown . some predict it could lead united to sharply increase the leasing of aircraft as it pursues an aggressive fleet expansion program in coming years . " it may have more debt than you ideally want to go into a recession with , but it should have adequate cash flow to survive this period and move ahead , " said anthony b. hatch , an analyst at argus research corp. in new york . still , he said , " the debt level will allow us to compete effectively . " after the coup by dissident military elements was put down friday , mrs. aquino indicated she is finally taking a tough stance . she vowed " no terms for traitors " and ordered the arrest of the soldiers who she said not only attempted to take over the government but wanted to kill her and her family in the process . but philippine political analysts said she has to follow up her words with actions if she is to avoid more takeover attempts , cope with a growing communist insurgency and improve a stagnant economy straining under the huge foreign debt and widespread corruption her regime inherited from ferdinand marcos . perhaps most important , the political observers said , mrs. aquino must overcome her penchant for indecisiveness , which has allowed dissension and bickering to continue within her government -- whittling away what support the government had gained from the popular uprising that overthrew mr. marcos's years of one - man rule in february . before the coup , the aquino government had " lost the momentum " that brought it into power , said amando doronila , editor of the manila chronicle and one of the country's most respected journalists . the government's inadequacies are " now coming to roost , " he said . mrs. aquino's son was shot , but not seriously wounded , after he identified himself to some of the rebels . the rebels also acted at camps in the central philippines and took control of regional military headquarters in cebu , the nation's second - largest city . although the attacks were led by a former aide to sen. juan ponce enrile , col. gregorio honasan , mr. enrile denied he had any part in the uprising . mr. enrile , then the defense minister , and gen. fidel ramos , the armed forces chief , led the military uprising that forced mr. marcos from office . mrs. aquino fired mr. enrile as defense minister in november , following a previous coup attempt by his followers . mr. ramos led the successful crushing of the coup attempts , including the latest . analysts warned that sympathizers of the aborted coup remain in the military . the possibility of another takeover attempt is " definitely not over , " said randy david , director of the university of the philippines' center for third world studies . " i expect it to happen again . " friday's events " make her much more a captive of the loyal military , " he said . in addition , the country's economic recovery , especially new investment , could be hindered . government and private economists have predicted that the country's gross national product , the total value of goods and services , will grow almost this year after four years of stagnation . " i'm sure a lot of investors will do a certain amount of rethinking , " said george uy - tioco , president of the brokerage firm first pacific securities philippines inc . a foreign banker added that the attempt " was a real body blow to this economy . it's hard to think of a worse thing that could have happened . " although the coup was launched in the first few hours of friday , it wasn't until mrs. aquino ordered an all - out assault on rebel positions friday afternoon that it began to crumble in manila . some coup supporters in the provinces held out into the weekend . the aquino regime treated participants of past coup attempts with kid gloves . " we had the ironic situation when every time there was an attempted coup , the government wouldn't acknowledge it , " said mr. david . this emboldened the dissidents , who appeared to expect friday's attempt to be met by the same vacillation and weakness , analysts said . rebel soldiers seemed ill - prepared for the strong counteroffensive . and this time , more than officers and men have been arrested ; most are being held on two navy ships docked in manila . mrs. aquino was praised for her toughness . " she finally put her foot down and this was appreciated by a lot of filipinos , " mr. uy - tioco said . the attempted takeover came two days after a strike protesting an increase in petroleum prices closed down much of manila . the strike occurred even though the government , in another example of indecisiveness , had partially rolled back the price increase the day before the mass action took place . it was one of the strongest indications yet that the aquino government was losing popularity . but the arrested coup attempt bolstered the government's standing , many analysts believe , at least for the time being . yet some economists believe the country still can pull out of its four - year slump . " i still see close to a increase ( in gnp ) this year and more the next , " said economist bernado villegas of the private center for research and communication . even before the coup attempt , many prospective investors weren't prepared to take the plunge before the middle of next year , he said . " of course , a lot of things can happen between now and the end of the year . " on friday morning , a spokesman for the rebel soldiers said over one of the captured television stations that the coup was prompted by a civilian and military leadership vacuum . the spokesman , a young lieutenant , said the coup was an attempt to break " the vicious cycle of overindulgence in politics . " disillusionment within the military remains . some soldiers believe the aquino government contains leftist - oriented advisers and remains " soft " on the growing communist insurgency . a committee to investigate alleged human - rights violations by the military has worsened morale . the rank - and - file are poorly paid , poorly trained and poorly equipped . many of the soldiers who participated in the coup attempts were young children when president marcos abolished democracy and declared martial law in september , giving the military increased power . only in july did a freely elected congress resume sitting . immediately , the kind of seemingly endless debate that characterized congress before martial law started anew . " we're undergoing a transition , " said sen. raul manglapus . " it takes some time . " " there's a race against time to stabilize civilian institutions for democracy , " said the university of the philippines' mr. david . " in the minds of ordinary people we appear helpless before the military . that's very bad . " the reagan administration reacted favorably to a proposal that it send " humanitarian " aid to nicaraguan rebels but hold military aid in escrow while waiting to see if a central american peace plan takes hold . the two - part aid idea was proposed by the leaders of nicaragua's contra rebel forces in a meeting with president reagan , who is vacationing here . the proposal might help the administration out of a bind it has found itself in concerning aid to the contras : the white house doesn't want to abandon the contras , but also has endorsed a peace plan that , if successful , would end nicaragua's civil war . under the contras' proposal , the administration would seek from congress a package of aid for the fiscal year beginning oct. , when previously approved contra aid runs out . the aid would be divided between so - called humanitarian assistance , which would be sent as soon as the new fiscal year begins , and military aid . that is the deadline set for a cease - fire and steps toward democracy in nicaragua under the peace plan . under the contras' proposal , if a peace plan were in place on nov. , the funds earmarked for military aid would be used instead for food for nicaragua . presidential spokesman marlin fitzwater said the aid proposal is one " we can support . " but he added that the administration needs to explore the proposal's details before making a decision . american consumers , defying economists' predictions , went on a spending spree for the second straight month in july . consumer spending jumped during the month , the commerce department said , more than double the modest rise in personal income . the pattern was similar to june's , when spending rose and income went up only . " the consumer is digging very deep in his pockets to finance these expenditures , " said robert dederick , chief economist of northern trust co. in chicago . " and spending growth may be even bigger next month , because of automobile sales incentives . " economists have argued since last year that consumer spending would slow this year as a result of low savings rates and heavy debt burdens . that prediction proved true for the early part of the year , when spending growth was moderate . but in the past two months , the consumer has come back with a vengeance . that spending surge , in turn , has raised serious questions about the nation's ability to reduce its massive trade deficit . more spending means more imports . unless american consumers begin to spend less of their earnings , the trade deficit is likely to show little improvement , despite growing exports . " it would be better to see the strength coming in capital spending or industrial activity . " " it would worry me if this continues , " agreed mr. dederick . " the more we spend , the more the trade problem will persist . if the trade balance is going to improve , the consumer will have to give ground . " both messrs . ratajczak and dederick believe the july surge in spending may partly reflect unusually hot weather . spending on services accounted for more than half of the rise , and that could reflect higher utility bills than usual . analysts say that many consumers are borrowing against their houses or against their stock holdings to support heavy spending . nevertheless , most believe that the boom will soon slow . " we're certainly not expecting the expansion to be led by the consumer sector over the next six months , " said saul hymans , director of the forecasting project at the university of michigan . the spending surge caused the nation's savings rate to drop to just of aftertax income in july from in june and in may . consumer spending was trillion during the month , up from trillion . in its report last month , the commerce department had estimated that personal income in june rose and that spending rose . a spending - based price measure reported with a one - month lag rose in june , the department said , following a rise in may . here is the commerce department's latest report on personal income . the figures are at seasonally adjusted annual rates in trillions of dollars . general foods corp. is expected to announce soon the outlines of a major corporate reorganization , the company's first such move since it was acquired by philip morris cos. in late . the plan is expected , among other changes , to result in further cutbacks in corporate staffing . general foods' goal , according to sources close to the company , is to reduce the number of management layers in order to speed decision making and to increase the autonomy of division managers . the company also wants to reduce its overhead costs , which exceed those of other major food processors . general foods declined to make any comments about the plan . philip morris also wouldn't comment . the sources close to general foods said the organizational changes , which are expected to be announced as early as today , indicate that philip morris has become increasingly impatient with the sluggish performance of the giant white plains , n.y. - based food company . until now , new york - based philip morris has played a largely hands - off role at general foods , saying it wanted to take time to learn the food business . according to analysts , general foods' real growth rate in recent years has been about a year , while other major food companies have achieved levels of to . " this is being done because philip morris has said , ' if you don't take some action we'll do it for you , ' " said david goldman , an analyst at l.f. rothschild inc " selling , general and administrative expenses at general foods have been a picnic for far too many years . " general foods' selling , general and administrative expenses for the year ended march , , the last year for which figures are available , were about five times pretax income . that compares with the food industry average of about three times pretax earnings , analysts estimate . mr. goldman , the rothschild analyst , said the anticipated reorganization also underscores the differences in philip morris's and general foods' corporate cultures . " the operating philosophy at philip morris is lean and mean , " he explained . " general foods has layer after layer of non - decisionmaking bureaucrats . " in august , before the philip morris acquisition , general foods announced the elimination of corporate staff positions , bringing the number of corporate staff jobs to its present level of about . as part of that effort , mr. smith has pushed responsibility down the ranks and encouraged managers to be more results - oriented . mr. smith has said his strategy for general foods involves getting the company to grow faster than the competition by boosting the market shares of the company's old - line brands and by creating significant new businesses . " there is no question that general foods recently has become more agressive in marketing , " says lawrence adelman , an analyst at dean witter reynolds . " they are trying to deal with the fundamental problem that relative to their peers , real volume growth hasn't been that strong . " the dollar's slump in the foreign exchange markets yesterday helped depress long - term treasury bond prices in light activity . prices of - year treasury issues fell / point , or for each face amount , erasing all of last friday's gains . the bond market's lethargy once again stood in stark contrast to the stock market , where the dow jones industrial average surged more than points to finish above the mark for the first time . some investment managers predict further bond price declines because of recent government reports indicating stronger economic growth and a huge trade deficit , which they fear could lead to higher inflation . those statistics " aren't encouraging for the bond market , which is why i have a very big cash position and don't trust " the recent bond rally , said kenneth a. wineheim , a director at prudential capital management international in newark , n.j . faster economic growth and higher inflation could provoke the federal reserve system to raise short - term interest rates later this year , many economists say . some suggest a credit - tightening move could come sooner if the dollar goes into a slump , as it did last spring . this will be the first fomc meeting headed by the fed's new chairman , alan greenspan . government statistics show " activity is picking up rather robustly in the industrial sector , " said lyle e. gramley , a former fed governor and now chief economist of the mortgage bankers association of america . " if that continues for another month or so , then the fed is going to have to begin battening down the hatches . " still , " there is no urgent need for action right away , " mr. gramley added . mr. greenspan , he said , " has a little bit of breathing room . " william v. sullivan jr. , a senior vice president at dean witter reynolds inc. , agreed the fed doesn't need to tighten credit now . " consistently good inflation numbers have finally provided some support to the bond market , " he said . " investors were quite active buyers last week , which wasn't the case just two weeks ago . " nevertheless , the dollar's decline overshadowed a continued drop in oil prices . in late new york trading , the dollar stood at yen , down from yen friday . he said that yen " was a magic number for investors " and that if the dollar - yen relationship holds around that level , " we won't see any major fluctuations " in bond prices . the federal funds rate increased , a development that some traders cited as another factor in the rise in yields for long - term bonds . the funds rate averaged , according to an estimate by fulton prebon ( u.s.a. ) . inc . that rose from friday and thursday . the rate on funds , which are reserves that banks lend each other overnight , often influences many other borrowing costs , including those that bond dealers pay to finance their securities holdings . u.s. trust co. yesterday raised its broker - loan rate , the fee it charges on loans backed by stock , to from / . the higher funds rate probably will be short - lived , many analysts predict . they noted that yesterday was the day on which investors and dealers had to pay for more than billion of treasury notes and bonds sold by the government last week . these " settlement - day " pressures often lead to a temporary surge in the funds rate . he also said he expects the fed's policy - making committee today to vote to leave policy unchanged . " it is inconceivable to me that alan greenspan would come in at his first meeting and pull the trigger " to tighten credit , " especially at a time when he doesn't need to do anything different . " even if mr. greenspan were in favor of a credit - tightening move , he probably would run into resistance from other fomc members , according to many fed watchers . " a fed chairman leads by persuasion , not by brute force , " mr. lakefield said . " the odds favor no change " in fed policy right now , agreed william n. griggs and leonard j. santow of griggs & santow inc. in a recent report . but the economists also contended that the fed committee " probably " will vote to allow the fed to implement a " slight " credit - tightening move " if the dollar should come under pressure , if the economic data should continue on the strong side , and if there is some pickup in inflation . " the / notes were priced at / to yield , or percentage point more than the treasury's four - year note . the notes are rated double - a - by moody's investor services inc. and double - a - minus by standard & poor's corp . separately , a million issue of anheuser busch cos. notes due sept. was offered . underwriters led by dillon read & co. priced the / notes at to yield , or more than the treasury's seven - year note . the issue is rated double - a - by moody's and double - a - minus by s&p , underwriters said . among new mortgage - related offerings , shearson lehman brothers inc. offered investors million of collateralized mortgage obligations with a final maturity of september and a weighted average life of years . the notes were priced at par to yield percentage point above the london interbank offered rate for one - month eurodollar deposits . the notes , rated triple - a by s&p , can yield a maximum / . the floating - rate securities can yield a maximum of . the issue is rated triple - a by s&p . in the bond markets late yesterday , the treasury's new / bonds due in were quoted at / to yield . that compared with late friday's quote of / , when the yield was . the government's / notes due in fell to / from / , as the yield rose to from . rates increased on new short - term treasury bills compared with last week's auction . the average rate on new - week bills increased slightly to from a week ago , while the average rate on new - week bills rose to from . here are details of the treasury auction : . rates are determined by the difference between the purchase price and face value . thus , higher bidding narrows the investor's return while lower bidding widens it . the percentage rates are calculated on a - day year , while the coupon equivalent yield is based on a - day year . the myth that the increasing number of flight delays and aircraft near - misses is the fault of airline deregulation could prompt congress into strangling the flourishing airline business in a straitjacket of new rules and regulations . before members start looking for scapegoats , they should examine how the failure to deregulate the management of airports and air - traffic control has contributed to the current problem . the wave of recent consumer complaints is the result of a boom in air travel brought about by the deregulation of airline fares . twenty years ago , only of the population had ever flown . under the lower fares deregulation allows , of the adult population flew just in the past year alone . traffic has grown from million passengers in to a probable million this year . yet despite the sharp rise in traffic , safety has actually improved . the accident rate declined from the s to the s . the past three years have been the safest in the history of commercial aviation . airline deregulation opened up a market that had a limited number of carriers flying tightly controlled routes with fixed fares . deregulation freed only one of those three elements : the airlines . the other two are rusting relics of an earlier era when coast - to - coast fares were unthinkable . the federal aviation administration's continued control of key elements of air travel has stalled development of a more user - friendly system . the faa also operates under a clear conflict of interest . it is responsible for both providing air - traffic control services in the u.s. and regulating and monitoring that same air - traffic control system . if a private firm ran air - traffic control services it would respond to the increased air traffic by raising the prices of the most popular landing and takeoff slots and using the increased cash flow to rush the most advanced technology and experienced controllers to the most crowded airports . but a political entity such as the faa discourages local airports from charging different prices for valuable takeoff and landing slots . remember that the next time you're on a fully loaded that's stuck on the ground because a nearly empty commuter jet is ahead of you waiting to take off . rather than trying to install new technology first at overloaded airports such as chicago and atlanta , the politically sensitive faa must divvy up its scarce resources evenly across the country so as not to offend the parochial interests of congress . on airports , the british have much to show the faa . they have long allowed local airports the control of air towers , runways and other facilities . local managers decide if they need extra controllers , new gates , new radars or an improved air - traffic control system . this local autonomy has worked so well that margaret thatcher's government is selling off some airports to private investors . several airlines have offered a cautious proposal to turn the faa into a quasi - independent federal corporation with its own funding sources . but the dismal record of the u.s. postal service makes it clear that such an entity would deliver few of the promised improvements . air - traffic control might be better turned over to a nonprofit corporation owned by the airlines or even the air - traffic controllers . a similar co - op built the first u.s. air traffic control system . congress should follow such examples and start privatizing the u.s. air - traffic control system . air travel should not remain half free and half slave to government whim and political favoritism . allowing private companies to manage airports and handle air - traffic control is a better solution to sky snafus than shifting the blame to the airlines and passing regulations that would only make the problem worse . the preliminary peace pact worked out by the five central american presidents hands the contras and their u.s. supporters a major diplomatic defeat and reduces chances that the anti - sandinista rebels will win more aid from congress after current funding expires sept. . anti - sandinista activists braved a soaking rain last week in hopes of jeering nicaraguan president daniel ortega as he arrived at his hotel for the two - day peace conference here . but the sandinista leader arrived early and waited out the protest in his hotel . and by the time the agreement was signed friday , it was apparent that the sandinistas had outmaneuvered the contras and the reagan administration at every turn . " i think what happened in guatemala city is a major sea change in the political dynamics of central america , " said a foreign policy aide to sen. robert byrd , the majority leader . " the focus on contra aid will never again be dominant . " in the u.s. , there already appears to be some conflict on when the administration should submit a new request for contra aid . but sen. robert dole ( r. , kan. ) suggested on abc news's " this week " program that president reagan could request contra aid , and congress could act so that it is ready if the cease - fire falls through . the central american plan received support from president reagan , who said saturday , " i welcome this commitment to peace and democracy . . . and i hope it will lead to peace in central america and democracy in nicaragua . " but the president added , " the agreement makes clear that there is much work to be done by the parties involved . the united states will be as helpful as possible consistent with our interests and the interests of the nicaraguan resistance , who have already stated their readiness to take part in genuine negotiations for peace and democracy in nicaragua . " the agreement differs in several important respects from a peace plan advanced last week by the white house and house speaker wright . many observers in guatemala say that proposal , which came on the eve of the meeting here to discuss a peace plan developed by costa rican president oscar arias , did much to bring about agreement here . " i think it was an incredible tactical error on the part of the u.s . " indeed , other comments made by rep. wright on " meet the press " indicated that the peace plan he proposed with the white house is dead in the water . " i think it's the guatemalan plan that has to prevail , " he said . " we never had the impression that we possessed the almighty wisdom to dictate in precise terms what arrangements should be made in central america . from the very beginning , president reagan and i both emphasized that it must be a central american plan . " the peace initiative signed friday left so many points undefined that many doubt it will ever be fully implemented . nonetheless , it marks the first time the region's leaders have agreed on a peace plan . and though some of its provisions will strain the sandinistas , it is far more of a setback to the contras , who have been fighting the sandinista regime since . it implicitly recognizes the legitimacy of the marxist - inspired sandinista government . among other provisions , it commits the signatories not to allow guerrillas to use their territory for strikes against neighbors -- which if adhered to could prove disastrous for the contras , who in the past have operated out of both honduras and costa rica . the agreement also contains bitter pills for the sandinistas , including a call for a quick restoration of press freedom and civil liberties , as well as international supervision of elections . it also requires them to halt support for the rebels fighting el salvador's u.s. - backed government . the agreement calls for cease - fires in both nicaragua and el salvador within / months . but diplomats say the agreement leaves the contras more isolated than ever . not only were they excluded from the talks here -- despite the presence in the city of the entire contra leadership -- they also played little role in the reagan administration's peace proposal . " i think that for the leadership of the contras , this has been a blow , " said carlos ulvert , until recently the contras' foreign secretary . " it's going to look very , very bad for the u.s. if it continues the old policy of supporting the contras , " he said . " one would have thought the united states would be absolutely kicking itself " because of the outcome , he added . in a news conference , the top contra leaders tried to put the best face on the agreement . " any positive document that will stop the bloodshed in nicaragua is welcome by us -- and if this is the miracle we've been hoping for , it is more than welcome , " said contra chief adolfo calero . some contra officials said they may soon put the pact to a test by openly staging political rallies in nicaragua . but in private , contra leaders expressed dismay and surprise at the terms . they also worry that washington could bypass them and deal directly with the sandinistas , even though the administration insists it won't do so . " washington could do it on its own , " one contra says . " it wouldn't be the first time . " ford motor co. plans to continue diversifying through acquisitions but isn't in any rush to do so , allan gilmour , executive vice president and chief financial officer , said . " we want to be sure that what we're buying is something of value , and something that will be of value in the long run , " mr. gilmour told reporters after delivering a speech to a management conference here . " if we can't find that , there will be no urgency that says we've got to do something . " he added , though , that " five or years from now , you will find ford has made a series of acquisitions . " for months , wall street has been speculating that dearborn , mich. - based ford is about to make a major acquisition . the auto maker has had record profit so far this year , and as of june had a hefty billion in cash and marketable securities on hand . mr. gilmour declined to say whether ford is currently conducting negotiations for an acquisition . the reason for seeking diversification is to " provide some stability to our earnings " and thus maintain a source of investment funds during any auto - industry downturn , mr. gilmour explained . he added that ford would prefer friendly deals of a size that , through one or more acquisitions , would " add up to something of consequence . " mr. gilmour disputed speculation that ford , for the sake of appearances , would necessarily wait until it concludes the current national - contract negotiations with the united auto workers before making a purchase . " it's not a big issue , " he said . mr. gilmour declined to comment on specific companies rumored to be ford targets , but he repeated ford's policy that the company would concentrate on three possible areas : defense and aerospace , financial services and electronics . ford already has significant interests in defense and aerospace through its ford aerospace unit , and has major interests in financial services through ford motor credit and california - based first nation - wide savings , a thrift it acquired in . he mentioned the possibility of higher dividends and " the possibility of added stock repurchases when the present program is completed . " ford has bought between million and million of its common shares in the current million - share buy - back program . as of june , the company had million common shares outstanding . your june asides , " antique names , " displays contempt for environmental concerns . you ridicule environmentalists for planning to sue the interior department for its alleged failure to protect a list of certain endangered species . you suggest that for these species " time has run out , as it did for the nash rambler and the spinning jenny . " if time has run out for these endangered species , it is mostly because of man's interference . but man's altering of nature is exactly the problem and cannot be cited to justify itself . we can easily set aside the nash rambler , our own creation , but can we so confidently eliminate the bay checkerspot butterfly ? your rhetorical device of mentioning from the list humble butterflys and flowers with odd - sounding names presumably is supposed to make the reader chuckle and think , " we can probably do without that . " this points up the real problem , which you fail to address : in the inevitable conflict between man and other natural creatures , there will be casualties . by what criterion do we decide just what we can do without ? allowing for human development without undue destruction of other living things in our environment is a genuine dilemma . surely conservatism is a large enough concept to include the conservation of nature as well as of human institutions and ideals . somebody is once again rocking the baby capital of the world , as gerber products calls its home in fremont , mich . shares of the baby - food maker jumped back on the takeover - rumor circuit last month after the death of the company's president , leo goulet . the rumors reached fever pitch last week , when highly visible buying of gerber stock drove the price up about eight points . but some analysts warn that a buyer of the company -- if , indeed there is one -- couldn't afford to pay much more than the current stock price . certainly , somebody seems to have been accumulating gerber shares . in the past six days , more than four million gerber shares , or an amount equal to about of the stock , have changed hands . while many food stocks yesterday mirrored the general market slide , gerber , trading ex - dividend , rose / to / . gerber has intermittently been considered a takeover or restructuring candidate . the prize would be a share of u.s. baby - food sales . analysts say gerber's kiddies' furniture and clothing units could be sold to defray some of the purchase cost , which they put at about billion . traders cite nestle , quaker oats , ralston purina and e - ii holdings as potential acquirers . in , it deflected a tender offer from anderson clayton . but alan greditor of drexel burnham lambert , a food - stock analyst , believes gerber is currently too expensive for many would - be acquirers . he says investors have more to lose than gain by holding gerber stock -- which he took off his buy list late last week . at most , he says , a food company might pay a share for gerber ; a breakup artist would pay much less . he doesn't think a restructuring by gerber would yield values any higher than the current stock price . if gerber isn't acquired , he adds , the stock could tumble to " the low s . " based on projected calendar earnings , mr. greditor says , gerber trades at an premium to the s&p . food stocks , on average , sell at an discount to the index . for the fiscal year ending march , , he expects gerber to earn about a share , a rise from a share in fiscal . skeptics think somebody may be trying to " run up " gerber stock , to unload shares later at a higher price . much recent trading in gerber shares , including some big blocks , was concentrated in two frenzied sessions last wednesday and thursday . bear stearns was a major buyer , traders say . bear stearns traders were " telegraphing their interest to the whole street , " says a new york money manager . a would - be acquirer of gerber would have ordered traders to buy shares discreetly to avoid forcing up the price , he reasons . alan c. greenberg , bear stearns' chairman , says the firm's traders weren't trying to drive up gerber's stock price . such insinuations are " ridiculous and stupid , " he says . judging from the large trading volumes in gerber shares , says frank kelly , a senior trader at e.f. hutton , a raider or would - be acquirer might have bought as much as of the stock last wednesday and thursday . if so , the fact should be generally known next week . securities and exchange commission rules mandate public disclosure of a stake of or more within business days . gerber won't say if it has had word from a hostile investor . but jim lovejoy , a spokesman , says gerber doesn't believe its culture would endure under different managers . gerber's headquarters , filled with baby pictures , gets calls a day from parents , he says . mr. lovejoy wouldn't say if gerber would sell assets to retire stock . but he says gerber originally diversified because " a baby's tummy isn't infinitely expandable . " gerber's stock is too costly for a restructuring to make sense , drexel's mr. greditor asserts . its furniture and clothing assets might have to be sold at disappointing prices because their earnings power has been declining , he adds . net of debt , he values gerber's baby foods at a share . he says a food company , anticipating savings from a merger , could perhaps pay a share for gerber . but hostile takeovers of food companies are rare , he says , and " gerber doesn't want to be acquired . " net income : million , or a share . per - share profit : cents vs. cents . common shares outstanding : million . out to recapture lost market share in this territory two years ago , standard chartered bank conducted studies to find out how the public perceived it . the news wasn't good . " we had an image in the market of being reliable but slightly fuddy - duddy , old - fashioned , conservative and non - innovative , " recalls john mackenzie , the british bank's general manager for east asia . peninsular & oriental steam navigation co. has a similarly unflattering confession to make . admitting that the british shipping - and - services group's clout in hong kong has shrunk , chairman sir jeffrey sterling says : " it has been a crying shame . " such candor reflects growing recognition by british business that it has fumbled away its edge in asia . the decline has long been evident . britons used to blame it mostly on factors beyond their control , such as the loss of empire or unfair competition . lately , though , many of them have come to see the real culprits as their own inferior products , bad strategy and lack of interest . and having awakened to the decades of missed opportunities , british business is staging a comeback . two months ago , sir jeffrey came from london to declare p&o's intention to reassert itself here . before him there was inchcape plc chairman george turnbull , who came in february to detail the trading company's reorganization . standard chartered , which shook up its hong kong branch last year , says it already is reaping improved results . as further proof of their new enthusiasm , british businessmen cite the establishment two months ago of the hong kong chapter of the british chamber of commerce . " for the first time in years and years , british companies are showing a strong interest in the far east , " says geoffrey taylor , executive director of the - member chapter . some of these concerns -- such as standard chartered bank , a unit of standard chartered plc , and inchcape -- had grown up on trade with the east during the colonial empire's th - century heyday . despite diversification over the past few decades , they still depend heavily on their asian operations . for them , british business's modern thrust into asia represents more than just another battle for overseas market share . it is a struggle for survival . those who run these companies also see their asian activities as crucial to britain's economic recovery . under prime minister margaret thatcher , britain has tamed its labor unions , improved productivity and renewed its faith in the work ethic . a new generation of managers is eager to prove britain can compete in world markets . typical among them is sir jeffrey , an entrepreneur whom p&o brought in to help repel a hostile takeover in . he transformed p&o from takeover target into aggressor . in , earnings soared to # million ( million ) from # a year earlier . last year , earnings rose by . as an adviser to britain's secretary of state for trade and industry , sir jeffrey offers some ready diagnoses . " the problem with many old british companies is that their ruling families got stuck in the mentality of the s , " he says . " it was only recently that britons began to realize the world doesn't owe us a living . " such a change in attitude seems to be taking hold at inchcape . making things happen isn't getting any easier . one potential obstacle is hong kong's sovereignty transfer to china . and for some time , british businessmen concede , they have lagged behind japanese and u.s. competitors in aggressiveness . to an outsider , the territory may seem dominated by british interests still . in the central business district , hongkong land co. , controlled by the keswick family , holds a near monopoly on prime office space . swire pacific ltd. , controlled by the swire family , is parent of cathay pacific airways , the territory's fast - growing flag carrier . most powerful of all is banking giant hongkong & shanghai banking corp. , which is effectively controlled by its british management since hong kong law prohibits anyone from owning more than of its shares . all the same , the dominance of these concerns doesn't reflect the majority's fortunes . despite their distinct british identity , hongkong bank and the swire and keswick groups generally are considered local concerns . with most of their operations and their chief managers located in hong kong , they have been untouched by britain's management and labor problems and general disinterest in asia . with most british concerns doing business here , the experience of standard chartered seems more typical . but while hongkong bank aggressively exploited these advantages , standard chartered plodded along , content with playing second fiddle . " we had branches to collect deposits but we weren't using them as sales outlets , " says the bank's mr. mackenzie . " we took too much time making sure our books were right and that paper moved along , but we weren't looking at the market . " that easygoing style gave the beijing - controlled bank of china group a chance to catch up . and it did in the early s . the growing competitive pressure eventually jolted standard chartered into a painful self - examination in . the bank has since gone through a radical restructuring of its hong kong operations , which it trumpets with heavy media advertising . as one measure of the program's success , standard chartered says the average number of transactions at each of its teller machines has soared to a month from a year ago . " an outgoing personality , " says mr. mackenzie , has been added to recruitment criteria . on a summer evening at the fair , dallas dorchester , professional chuck - wagon driver , is poised to race . the wheel hubs on his ancient wooden rig are freshly greased . his four thoroughbred wagon horses are prancing nervously in their harnesses . four saddle horses are nearby , held by outriders prepared to quickly mount them . an ambulance is ready to roll -- a reminder that this isn't a sport for the timid . mr. dorchester's job in this final race of the day is to turn the wagon in a tight figure eight and then guide it in a half - mile dash around the dusty race track , followed all the time by his outriders . to win , the wagon must outrun not just the two other wagons in this heat but also the that raced in the day's preceding heats . in the stands , the scent of onions and hamburgers mingles with the odor of manure as fans watch excitedly . for them the race re - creates the wild west , where chuck wagons were mobile kitchens on the range . at the sound of the starting horn , mr. dorchester's horses jerk forward so powerfully that they force him back against his bench . simultaneously , the outriders throw a tent flap into the wagon and a rubber simulated stove onto a rack attached to the wagon's rear. ( a real stove isn't used because it would be too heavy and because it could bounce onto the track during the race , possibly causing an accident. ) . then , having performed their allotted tasks , the outriders mount and take off after the wagon . they must be within feet of it when it crosses the finish line . as the three drivers struggle for position along the inside rail at miles an hour , the wagons are sometimes just inches apart , their thin steel tires grooving the dirt . if the unwieldy contraptions collide and tip , or hit outriders , horses can tumble to the ground and competitors can get trampled . no such accidents happen today . but last year an outrider was killed in a fall at cheyenne , wyo. , and in crashes at calgary , alberta , two outriders were hospitalized and eight horses were killed . for many of the competitors , chuckwagon racing isn't just a sport . it is a rivalry among old friends , in a tradition handed down from generation to generation . the - year - old mr. dorchester and some of his toughest opponents grew up together , traveling the summer chuck - wagon circuits with their fathers , who were friends and rivals , too . " i race for the fellowship , for adventure and for love of the animals , " says doyle mullaney , , a second - generation driver and veterinarian . mr. dorchester adds : " chuck - wagon racing is family . our best friends are our fellow drivers . " but once a race begins , camaraderie is set aside . on this day , mr. dorchester's time is minute seconds , second behind the winner . but he races every day of the five - day tournament and finishes as the third - highest money winner , with canadian dollars ( about u.s. ) . the only really big purse in the sport is at the - day calgary stampede , which in held the world's first organized chuck - wagon race . this year the entrants there split dollars , including dollars to the winner of the final , four - wagon heat . about drivers in iowa and minnesota race at local county fairs . and other wagon men in both the u.s. and canada compete at a slower pace , using ponies . when the racing season ends in the fall , the search for new horses begins . mr. dorchester scours city race tracks for thoroughbreds that have grown too slow or too old for jockeys . amid the snows of february , he gently breaks in the newcomers by hitching them individually to a sleigh , alongside an old workhorse . by mid - april he works seven days a week , exercising his outrider horses and training the wagon prospects for the first races , in may . with small prizes and with expenses of up to dollars a year to purchase , truck and feed horses , the drivers work at other jobs . mr. dorchester , a farmer , netted just dollars last year from racing . " if you were going to race chuck wagons for a living , you'd starve to death , " he says . he also worries because some animal - welfare groups want the sport abolished . " how many more horses will be senselessly destroyed before the citizens of calgary put an end to their stupid , barbaric affair ? " wrote a typical critic , richard m. nichols of elk grove , calif . mr. dorchester replies that the horses in chuck - wagon racing are actually lucky . " if not for us , they would be headed for the canning factory , " he says . nevertheless , the sport responded to its critics this year with safety measures like fines for interference such as cutting off or bumping . and although the drivers say drunkenness isn't a problem , chuck - wagon associations also began breathalyzer testing to improve their image . but the race vehicles -- mostly farm wagons originally built to haul grain at five miles an hour -- don't have even basic safety features like seat belts or brakes . mr. dorchester made only minor changes to his - year - old wagon after he purchased it at a farmer's auction . to conform with chuck - wagon standards , he added a conestoga - like tarpaulin and the stove rack . for strength , he added a little steel to the chassis . for stability , he widened the axles slightly . along with most of his fellow drivers , mr. dorchester wears a cowboy hat instead of a crash helmet when racing . a helmet " is for stock - car drivers , " he says . " it won't help much if a wagon wheel runs over your head . " he has avoided serious problems so far , but his - year - old father has broken his shoulder , ribs and back in chuck - wagon accidents . mr. mullaney , the veterinarian , broke his back in when he fell out the front of the wagon and it ran over him . tom glass , , a third - generation driver , has a pin in an ankle he broke after tipping his wagon , and his brother died in an outriding accident . " you just accept it , " says mr. glass , whose - year - old son , jason , entered the sport as an outrider this year . " jason is the fourth generation . i'm kind of proud of that , " he says . like many other competitors on the summer circuits , mr. dorchester travels with his family -- one of his two sons is thinking about racing when he grows up . chuck - wagon families camp together in trailer parks near the fairgrounds , and wives and children pitch in with the stable chores . " these are special friends -- we share the same feelings . we give each other support when its needed , but the rivalry is still there " her husband says , " it's not like roller derby . you run tough out there , but you don't deliberately cause problems . if someone needs a horse , you lend it and you don't expect anything in return , even if he beats you . " still , mr. dorchester sometimes thinks of retiring . " if you make a good run , it's a real thrill , but it gets more like a job every year , " he says . then he adds , " if i quit i won't sell my harnesses , just in case i want to come back . " data card corp. said it has reached a standstill agreement with national computer systems inc. in exchange for giving national computer five seats on its board . both sides also agreed to drop all litigation against each other . the agreement permits data card , the world's largest maker of plastic credit and bank cards , to consider other acquisition proposals . national computer promised it won't block bids from other companies for data card provided that of data card's shares are voted in favor of the acquisition , a fairness opinion has been received from an independent investment banker and the transaction has been approved by a special committee of the board . in addition , national computer has agreed not to increase its stake to more than from , unless it makes an offer for the entire company that meets those same criteria . though national computer hasn't made a tender offer for data card , it had said it wouldn't rule one out . national computer , also based here , makes computer scanning products . under the agreement , data card will have a - member board , including the five national computer directors . last month , data card sued its twin cities neighbor , deluxe check printers inc. , the nation's largest check printer , to block the sale of deluxe's stake in data card to national computer . data card maintained that the - a - share sale price was " way too low . " as part of its standstill agreement , data card said it would drop its suit against deluxe , the nation's biggest check printer . in addition , national computer agreed to drop a countersuit . in national over - the - counter trading , data card closed yesterday at a share , down cents . a group of local businessmen paid at auction for the inventory and rights to the name of zzzz best co. -- about of what trustees hoped to generate for assets from the scandal - ridden carpet cleaning concern . zzzz best , operating under chapter of the bankruptcy code , is being investigated by various law - enforcement agencies for alleged offenses ranging from misstating financial results to laundering drug money . its founder , - year - old barry j. minkow , resigned as chairman earlier this month . as previously reported , in a civil suit filed in state court in los angeles , the company accuses mr. minkow along with four other defendants of fraud in the alleged payment of million in corporate funds for non - existent carpet - refurbishing work . mr. minkow's lawyer , arthur barens , has denied the charges . herbert wolas , zzzz best's trustee , called the inventory price tag a " pittance " and said he had expected the assets to generate about . mr. wolas said proceeds from the sale , which excluded the company's reseda , calif. , headquarters building , would be used to defray rent and other expenses . mr. wolas said he previously received a " tentative bid , " later withdrawn , for the building . in its chapter filing , zzzz best listed assets of million and liabilities of million . the items included in the sale were carpet - cleaning machines , office equipment and computers from the concern's locations in the west . about people attended the all - day auction held in a federal bankruptcy courtroom friday . under chapter , a company is protected from creditors while it tries to work out a plan of reorganization . the winning bid was made by peter kalb , owner of a huntington beach , calif. , interior finishing shop and leader of a partnership with two former zzzz best officials , john m. meyer jr. and karl hernandez . the partners already have filed for use of the name zzzz best interiors with the state of california , mr. meyer said , although a final decision hasn't been made whether to continue to operate a firm using the zzzz best name . mr. meyer said the name might still have value , despite the spate of recent negative publicity , because " all people see in the papers is the name . they don't care if it's good or bad . " setting up a u.s. plant is one thing . making money here is quite another . there are few reliable statistics on how well u.s. subsidiaries of foreign concerns fare , and most companies are reluctant to disclose figures . but examples of problems and failure abound . and even when a u.s. acquisition doesn't go completely awry , it can severely drain foreign companies' patience and capital . thyssen ag's acquisition of michigan - based budd co. pushed the west german steelmaker deep into the red and almost cost its chairman , dieter spethmann , his job in . britain's midland bank plc sold crocker national bank to wells fargo & co. last year , after crocker's losses totaled million in and alone . " the probability of any acquisition succeeding is less than - , " says amir mahini , the director of international business research at mckinsey & co. in new york . " it's difficult to carry off any successful acquisition . it's even more difficult when the acquirer is a foreign company and you have to meld two cultures . " building a u.s. manufacturing plant can be just as hazardous . volkswagen ag has been plagued by problems at its auto - assembly plant in pennsylvania . even japanese companies , despite their fearsome reputation for efficiency , haven't necessarily been more successful . kazuo nukazawa , a leading japanese economist , says some unconfirmed estimates show that more than of japanese factories in the u.s. aren't profitable . kazuo nomura , the former president of sumitomo electric's american subsidiary , says setting up a factory in north carolina caused a lot of problems . the plant made fiber - optic cable according to japanese standards , while american customers demanded cable made to u.s. standards . moreover , the plant's capacity was in excess of what the fledgling distribution network could handle . " sumitomo was proud of its technology , but the problem was marketing and management , " he says . foreign companies on a spending spree in the u.s. often end up paying a premium . stephen h. goodman , the managing director of investment banking at bankers trust , says that when a japanese company plans an acquisition , it makes painstaking preparations that prevent it from bidding quickly when a company is suddenly put up for sale . " that strategy doesn't get you companies cheap , " he comments . europeans often overpay , too . basf ag spent billion on the inmont unit of united technologies corp. in , an amount analysts term as much as million over the nearest competing bid . juergen f. strube , the chief executive of basf corp. , acknowledges that the price was high , but " we were prepared to pay a premium for the synergies , " he says . " we were paying for the business as it fit into our operations . " once a u.s. base is operating , foreign companies can still have a tough time . one vexing question is how to juggle local manufacturing with imports . when the dollar was high , it paid to export to the u.s. now that the u.s. currency is low , it doesn't . albrecht o. staerker , executive vice president at the new york branch of west germany's commerzbank ag , says many german companies have learned from the dollar's swings during the s that they can be profitable here only if they run virtually self - contained operations and don't rely on imported parts . " you have to go , " mr. staerker says . most say they take a long - term view and can afford a few bad years . few face the same pressure from shareholders that u.s. companies do , and they have leeway in their local accounting rules to conceal any losses from foreign subsidiaries . " by the next century , there will be only , maybe " big publishing companies , predicts the - year - old chairman of the dutch publisher elsevier n.v . as he runs his finger down a list , he notes publishers with revenue two to four times that of his company's . " we want to play in that league , " he says . mr. vinken's attempt to bring elsevier into the same league with the u.s. , british , west german and australian publishing giants has in recent weeks become one of the netherlands' most significant corporate battles . elsevier has launched a one billion - guilder ( million ) hostile takeover bid for another dutch publisher , kluwer n.v . the takeover attempt , in a country where hostile bids are rare , has sparked a debate about dutch management style and shareholder rights . " hostile bids just aren't done in holland , " says hans hoyinck , a member of a special dutch commission on mergers . " but this is an important case in the change of mentality in this country . if elsevier succeeds in taking over kluwer , even if it takes a few years , there will be more hostile takeovers . " not only has kluwer agreed to merge with a third dutch publisher , wolters samsom groep n.v. , but it also has issued a new class of million preferred shares , giving the majority of the voting rights to a management - friendly foundation . however , some observers say that the defenses won't be enough , and that elsevier's bid has at least half a chance . elsevier has amassed on the open market of kluwer's million common shares outstanding , in contrast to for wolters samsom . how many elsevier obtains in its bid can only be guessed at , but the bid seems to be winning favor with the market . moreover , shareholder groups say , kluwer's defenses mightn't withstand a court challenge . the debate has touched a sensitive nerve in a country proud of its traditions , yet trying to compete with the rest of the world . on one side is the fast - growing , aggressive elsevier , whose tough management and savvy investments have made it the world's leading publisher of english - language scientific literature . on the other side is kluwer , a more traditional bookseller based in the small rhine river village of deventer . until a year ago , the four top publishers in the netherlands were rather chummy . officials from the four -- elsevier , kluwer , wolters samsom and n.v. verenigd bezit vnu , which together claim annual sales of about five billion guilders -- used to meet regularly to discuss publishing issues . it was at these meetings that mr. vinken's idea -- dutch cooperation to meet the world challenge -- took root . but it was also where kluwer management developed a strong distaste for elsevier and mr. vinken . even before he became holland's only corporate raider , mr. vinken , who was previously a brain surgeon , was a business legend . a part - time job as editor of a medical publication led him away from medicine and into scientific publishing . in , after developing a scientific data base for the excerpta medica foundation , he and the firm were acquired by elsevier . chairman of elsevier since , mr. vinken has gained a reputation as a tough and single - minded manager , leading the company to a profitable concentration on high - margin activities . elsevier predicts profit will rise from last year's million guilders ( million ) on sales of billion guilders . besides english - language scientific information , elsevier also publishes two leading national daily newspapers -- the nrc handlesblat ( circulation ) and the algemeen dagblad ( circulation ) -- as well as the country's largest news magazine , elsevier . in the u.s. , where it records a quarter of its sales and of its profits , elsevier owns the congressional information service , a publisher of u.s. government documents . half its total sales are outside the netherlands , and more than of its profits still come from publishing scientific journals . meanwhile , in tranquil deventer , where schoolteacher aebele everts kluwer began printing schoolbooks years ago , a company with a very different style publishes translations of things like stephen king novels and dr. benjamin spock baby - care books . though kluwer's name is still associated with school texts and books for the general public , its crown jewel and most profitable enterprise is its legal and taxation publishing division . it's that division that first caught mr. vinken's eye . kluwer's profit in the past five years has gone up and down , averaging growth annually . kluwer prefers independence , but its distaste for elsevier led it to accept a merger offer from wolters samsom . many analysts believe the combination , to be known as wolters kluwer , could force kluwer to change its style as much as would a pact with elsevier . after one recent news conference , when kluwer's chairman , joop alberdingk thijm , complained that elsevier was treating kluwer like a dutch cow up for sale , mr. vinken retorted , " the cow , in its panic , is running straight into the butcher shop . " but others note that the union would create the largest publishing group in the netherlands with expected sales of billion guilders . the companies share a compatible list of professional and educational publications , and wolters would give kluwer a much - needed push abroad . yet few analysts say elsevier's bid is out of the picture . while at current prices the wolters bid is worth slightly more than elsevier's , kluwer has been forced to buy wolters shares to prop up the bid's value . the effect is confusion , leading some analysts to predict many investors won't sell their shares to wolters . of the million preferred shares issued last month by kluwer , million are held by an independent trust controlled by kluwer management . elsevier could end up holding a majority of kluwer's common shares without any real influence on decision making . there could be legal battles to better define the rules . or there could be a protracted standoff . officials at the amsterdam stock exchange are mapping out possible scenarios for july , when wolters's bid closes , and for aug. , when elsevier's closes . cosmos misquita flips the switch of a sleek - looking machine and peers at the instructions on its video - display screen . " enter user code , " says the machine -- in russian . mr. misquita isn't a spy . he's giving a once - over to a xerox copier with parts originating in france , britain and the netherlands , assembled outside bombay and bound for odessa in the soviet union . the machine is a product of indian xerographic systems ltd. , a joint venture owned by india's modi group and by britain's rank xerox ltd. five - year - old indian xerographic is one of the more successful attempts by a western company to use india as a door to trade with eastern europe . last december , the company received an order from the soviet union for xerox machines valued at million indian rupees , or about million . this is where east meets west . the indian government continues to waver between its longstanding alliance with the soviet union and its growing appetite for western technology , between its concern about u.s. arms sales to rival pakistan and its concern that it is overly dependent on soviet - made weaponry . the foundation for this go - between role is a - year - old agreement between india and the soviet union that allows two - way trade in rupees instead of hard currency . under it , the soviet union , strapped for foreign exchange , can buy goods assembled in india without having to lay out hard , freely convertible currency. ( several other eastern european nations have similar agreements with india. ) . rank xerox , a joint venture between britain's rank organisation plc and u.s. - based xerox corp. , isn't the only multinational to take advantage of india's role as an entrepot for trade with eastern europe . the modi group also has tied up with such companies as philip morris inc. and johnson wax associates inc. to peddle a wide variety of goods to the soviet union . in the fiscal year that ended in march , india's two - way trade with the soviet union was hardly changed from the previous months . but in calendar , it slumped from , to billion rupees , reflecting an oil - price decline that saved india seven billion rupees . despite the slump , india's trade with the soviet union remained second only to that with the u.s . " it was a sort of laboratory in the export trade , " says manubhai shah , president of the indo - u.s.s.r . chamber of commerce and a former commerce minister who helped initiate the plan . successive indian and soviet governments have renewed the arrangement . during his december visit to new delhi , soviet leader mikhail gorbachev and his host , indian prime minister rajiv gandhi , said they would attempt to increase trade to more than billion rupees ( billion ) by . the trade is more than mere political gimmickry . the soviet union last year supplied nearly one - fourth of india's imported oil , for which india otherwise would have had to spend hard currency . but there are drawbacks . accusations by indian companies that domestic competitors have corrupted soviet officials to win contracts are common , as are charges that a cartel of textile producers has shut out newcomers . and because soviet purchases stem from annual plans , the orders can vary greatly from year to year . hindustan lever ltd. -- owned by britain's unilever ltd. -- constructed a plant to manufacture detergent for the soviet market . then the soviets stopped ordering . the modi group now leases the plant to make perfume . for both the soviet union and india , the image of each other's products leaves much to be desired . in its drive to upgrade technology , indian industry opts for u.s. , japanese or west european machinery and views soviet equipment as a last resort . says abid hussain , a member of india's planning commission : " the value of the soviet trade also gets measured in terms of our failings in the western market -- a quality - oriented market . " in turn , the soviets , like other foreign buyers , complain about the standard of indian manufactured products , especially consumer items . a soviet official says that if a russian goes to the bolshoi in u.s. - made jeans , " it's status . if it says ' made in india , ' he doesn't want it . " the soviets often look first -- and last -- at the price of indian - made products , especially textiles . " they dictate price , " says the sportswear manufacturer . " but their buying capacity can be fantastic . " the lure of the soviet market has generated a lot of wishful thinking in india . wild claims by indian companies and agents of multimillion - dollar manufacturing ventures turn out to be pipe dreams . and some glib - talking middlemen are long on promises but short on results . often , an agent boasts to a foreign company that he has the inside track because of an indian - soviet connection , while telling an indian company that he has connections with a multinational . he hopes one will bite so he then can lure the other . india's trading arrangement with the soviet union also has generated controversy . critics believe the agreement unnecessarily ties india to soviet purse strings , to soviet weaponry and , by extension , to soviet political influence . " the russians would like to be our only source " for weapons , a political scientist says . although no official breakdown is given , analysts believe to of india's weapons are purchased from the soviet union . so far , the u.s. doesn't seem concerned that the close trade connections might open the way to the leakage of high technology to the soviet union . despite griping about its limitations , many indian officials , business executives and economists continue to believe the trade arrangement is advantageous to india's development . " in a macro sense , it doesn't matter , " says economist and east european trade specialist deepak nayyar . " trade denominated in nonconvertible rupees is still trade . " the senate labor and human resources committee approved a controversial bill that would require employers to notify workers if they've been exposed to high levels of chemicals or other potentially disease - causing hazards . the - vote came after a protracted series of final committee sessions on the bill , during which republican critics of the measure offered a raft of amendments democratic backers said were often designed to scuttle the legislation . sen. howard metzenbaum ( d. , ohio ) had labeled as a " killer " one amendment , offered by sen. orrin hatch ( r. , utah ) , that proposed ordering the occupational safety and health administration to curb " passive " smoking in the workplace within a year . a consumer health group has petitioned osha , an arm of the labor department , to ban smoking in work locations . sen. metzenbaum , chairman of the senate labor subcommittee and sponsor of the bill , argued that such a proposal should be dealt with in separate legislation , and didn't belong in the high - risk notification measure . opponents of the hatch amendment , which was killed earlier this week , said it would draw opposition for the labor - related bill from the tobacco industry , worsening its chances of enactment . under both versions , the risk of disease would be established by a risk - assessment board to be formed by the health and human services department . backers of the measures say that many workers don't know they've had such exposure , either because they've left the company where it occurred , or because a current employer hasn't told them . employers contend , however , that such notification would provoke widespread lawsuits . they add that much of the litigation would be based on claims of psychological stress resulting from employees learning of the exposure . the metzenbaum bill is one of a package of provisions unions are promoting , after similar bills failed to make it through congress in recent years . while there is widespread opposition from employer and some insurance groups , mainly over the liability question , sen. metzenbaum has succeeded in lining up support from some electronics and chemical groups , and lately also has gained the backing of the american medical association . e.f. hutton group inc. reported a second - quarter profit compared with a year - ago loss , while shearson lehman brothers holdings inc. said profit rose slightly . hutton said net income was million , or a share , compared with a loss of million a year earlier . however , the loss from continuing operations widened significantly to million from million . hutton attributed the wider loss primarily to reduced trading revenue during april's bond market slump . net income for the period came from the completed sale of e.f. hutton insurance group inc. , which resulted in an after - tax gain of million , hutton said . net also included profit from discontinued operations of million , and included an extraordinary credit of million representing a tax - loss carry - forward , the company said . revenue for the period jumped to million from million a year earlier , despite an decline in trading revenue to million from million , hutton said . interest revenue climbed to million , investment banking revenue rose to million and asset management fees increased to million . other revenue rose to million . for the six months , hutton said net more than tripled to million , or a share , from million , or a share , a year earlier . hutton's president and chief executive officer , robert rittereiser , said the company was pleased with the quarter's results , except for the revenue loss from bond trading . " performance in all other areas of the firm was consistent with our expectations , " he said . hutton shares closed at , down cents , yesterday in composite trading on the new york stock exchange . shearson lehman said second - quarter profit was relatively flat , up to a record million , or cents a share , from million a year ago , despite the bond - market slump . revenue jumped to billion from the year - ago figure of billion . it was shearson lehman's first quarterly earnings report since parent american express co. sold nearly of the brokerage unit to the public , its employees and to nippon life insurance co. of japan . shearson lehman said per - share figures for weren't given because all shares were owned by american express . for the first half , revenue rose to billion from billion a year ago . the company said profit for the first six months fell to million , or a share , from million a year earlier . for the quarter , shearson lehman said it had an increase in commission revenue , to million ; a increase in market - making and trading revenue , to million ; a jump in investment banking revenue , to million ; and a rise in investment advisory revenue , to million . " these positive developments were more than enough to offset higher operating expenses and a higher effective corporate tax rate , " mr. cohen said . shearson lehman shares closed at , down cents , yesterday in composite big board trading . three more major airlines joined the latest round of fare increases , saying they will boost one - way ticket prices to starting aug. . allegis corp.'s united airlines unit , amr corp.'s american airlines unit and pan am corp.'s pan american world airways unit said they will match the fare increase announced last week by nwa inc.'s northwest airlines unit , which cited rising fuel prices as the reason for the increase . industry leader texas air corp. , which operates continental airlines and eastern airlines , said it is still considering whether to follow suit , and its decision is likely to determine whether the increases stick . airline analysts believe that continental will match the price increases . after three years of fare wars , continental has gone along with two ticket - price increases in just the past month . and the carriers have tended to follow suit on fuel - related increases . a spokesman for united , a unit of allegis corp. , said spot crude oil prices have increased since april , and that further increases are expected next week . although rising fuel costs could spur additional increases this summer , industry analysts said the airlines will retract them just as quickly at the first sign that higher prices are driving consumers away . " i wouldn't characterize the recent unanimity in fare increases as signifying that the pricing wars are a thing of the past , " said julius maldutis , airline analyst at salomon brothers inc . robert j. joedicke , an analyst with shearson lehman brothers inc. , said travelers can probably expect even more price increases during the summer months , when travel is especially heavy , but that airlines will lose their nerve after that . " i think once we get past labor day , we'll begin to see special discounts and promotional fares , " he said . as an alternative to across - the - board fare increases , airlines may opt to reduce the availability of discount fares , mr. maldutis said . currently , some of all passengers travel on discounted tickets . although the northwest fare increases affect all routes , united said it wouldn't increase prices on its routes to and from hawaii , a strategic market for the carrier . spokesmen for usair group inc. , trans world airlines inc. and delta air lines inc. said their airline units were studying whether to increase fares . in retrospect , those who saw him at the party july thought charles m. skibo looked rather glum . the usually ebullient president of us sprint communications co. had bags under his eyes and he seemed very quiet , recalls one reveler . perhaps the executive had already heard the rumors . just a week after the party -- a us sprint event thrown at artist peter max's new york loft -- mr. skibo was out , replaced as president of the long - distance joint venture by robert snedaker , the vice chairman and tough chief operating officer of one of us sprint's parents , kansas city , mo. - based united telecommunications inc . the ouster of mr. skibo is the most visible sign of growing pains at us sprint , which aims to unseat mci communications corp. as the no. long - distance company . in the space of a year , the joint venture , whose other partner is conservative gte corp. , based in stamford , conn. , has added million new customers , doubling the number of accounts . through rain , sleet and snow , it has built more than miles of a planned mile state - of - the - art fiber optic phone network . some of the nation's biggest businesses , such as sears , roebuck & co. , georgia - pacific corp , and singer co. , have switched big chunks of traffic to us sprint . the expenditure of billion over three years for the fiber network and pre - tax quarterly losses of a quarter billion dollars easily make us sprint the telephone industry's biggest , fastest start - up ever . because at&t has been so successful maintaining its dominance of the long - distance market , the success or failure of us sprint will speak volumes to washington policymakers about the merit of the nation's grand experiment with competition in the phone business . " if us sprint can't make it with an all - fiber network , nobody can , " says jack b. grubman , a painewebber inc. analyst bullish on us sprint and its parents . but the venture's success is by no means assured . its impressive first year has been marred by a horrendous billing problem , and the company has , at most , three years to recruit large corporate customers to its still incomplete network . to tighten its strong grip on corporate customers , at&t already has decided to put billions more into modernizing its network instead of building phone and computer equipment plants . us sprint is pushing hard to finish its network by year end ; last fall it even hired a horse named buck to lay cable when it couldn't locate any machinery . an equally pressing problem is correcting the billing situation . " people tell me they love us sprint , " says one us sprint executive who routinely gets calls from customers about bills . " what they love most is they don't get a bill . " us sprint's inability to execute and collect on bills cost mr. skibo his job ; it also cost the company an estimated million in the second quarter . payments received aren't always posted to accounts , and , in some cases , paid - up customers are threatened with a cutoff in service or a negative credit report . us sprint says between and of bills have been to days late and another to have been incorrect . mr. snedaker says billing problems will be fixed by november " to the extent that ivory soap is pure . " by the time us sprint's network is completed , gte and united will have spent some billion on the venture , half of it in writeoffs for their old , obsolete networks . and us sprint won't yet have turned a penny of profit . " if a company can't collect its money , it can't make money and if it can't make money , there's always the possibility it won't stay in business , " says rick thompson , telecommunications manager for us sprint user georgia - pacific . besides dealing gte and united telecommunications a huge financial blow , a us sprint failure would cause irreparable harm to the concept of competition in the long - distance phone industry . " we worry about us sprint failing , " says v. orville wright , who is acting as chief executive of mci while that company's charismatic chairman , william g. mcgowan , recovers from heart transplant surgery . " it would re - raise questions about whether this is a competitive or monopoly industry . " corporate customers , already skittish about the financial health of at&t alternatives , would become even more hesitant to switch from at&t , he says . for us sprint , mci , and other at&t alternatives , customer and volume growth is crucial to profitability . corporate customers are essential because they spend much more on long - distance service than residential callers . but once a break - even level of volume is reached , more and more of each incremental minute of revenue billed becomes profit . at&t , with about billion minutes billed a year , achieved an efficient economy of scale long ago . us sprint currently bills about billion minutes a year ; it needs about twice that for its network to reach peak efficiency , and analysts say the venture would likely turn profitable at about billion minutes a year . " we think this can be an exceedingly attractive business if we can get the revenue , " says william t. esrey , president and chief executive of united telecommunications . given the amount of money spent , " if we can't do that , we ought to be lined up against a wall and shot , " he says . while many at&t competitors have garnered some big business traffic , most telecommunications managers still buy more than of their transmission services from at&t . in addition , at&t's continual rollout of new services and joint marketing of phone equipment makes life simpler for companies that want only one vendor . other telecommunications managers say that while us sprint may have great service in say , california , it may be lousy in texas , where mci's lines are more modern . companies with locations outside major metropolitan areas say that , despite the ads about an all - digital , fiber network , us sprint is never going to lay fiber directly to small , rural towns . fiber , which can carry simultaneous phone calls on two hair - thin glass strands , isn't efficient for areas with little or no long - distance traffic . nonetheless , us sprint is giving mci a run for the no. spot . for the first time some companies are giving us sprint a big chunk , and sometimes a majority , of their traffic . meanwhile , some telecommunications managers sense that with mr. mcgowan laid up , mci has somehow lost the marketing pizzazz that led it to take on at&t years ago . analysts say us sprint will probably post revenue of billion this year , only billion less than mci's . " they are very aggressive and pretty responsive and they are trying to build a good network . " while us sprint has impressed customers and competitors with its aggressive network construction , it still faces an entrenched at&t , which has long , comfortable relationships with customers who often supply other goods and services to at&t . because of the importance of such relationships , mr. snedaker's relative lack of marketing experience may be offset by his strong reputation among telecommunications managers as a telephone man who knows his business . in addition , mr. snedaker hopes to maintain marketing momentum by keeping two of mr. skibo's loyalists , ed carter , senior vice president , marketing and sales , and christopher e. clouser , the senior vice president of corporate relations whose selective leaks to news media have kept us sprint in the headlines . along with mr. skibo , both men have been important builders of us sprint's high - technology , upstart image , created by ads , which , in mimicking the cola taste test ads , compare the clarity of sound on us sprint to at&t . with an annual ad budget of million , us sprint has built a customer awareness on par with at&t , says mr. skibo , who while declining to discuss his resignation still shows pride in the venture's accomplishments . if us sprint can continue to build traffic , its huge losses should shrink in the second half as the company puts more and more of the traffic on its own network . costs to lease capacity from at&t , which run at million a day , will drop largely by year end when of traffic is on fiber . in addition , depreciation costs will drop by about million a quarter beginning in the third quarter because us sprint , as part of a total million write - off , is taking a million write - down in the second quarter to account for accelerated depreciation and lease costs . but all this effort will be for naught , industry analysts say , if at&t is unleashed too soon from regulation . while mci is betting at&t won't selectively price to keep its big business customers , us sprint isn't so sure . john hoffman , senior vice president , regulatory , points to a recent at&t filing to supply general electric co. with a private network . the filing , he says , doesn't provide enough information to determine whether at&t is providing services below cost . at&t contends us sprint is just mad it lost the contract . ironically , ge itself is concerned about at&t's re - establishing a new , unregulated monopoly over the industry . " there have to be safeguards built in any regulatory scheme to protect the competitors , " says one ge official . ge , like us sprint , supports the idea of price caps for residential customers , who have grown used to relatively inexpensive long - distance service , and price floors for business customers , to protect still struggling at&t competitors . the ge official says , " those of us who go back years understand what it was like when there was no competition . we would hate to see that plowed under . " british and french police arrested three former directors of alexander & alexander services inc.'s london insurance brokerage for suspected fraud . the arrests of the former alexander howden group officials are the first to stem from several scandals at the lloyd's of london insurance market in recent years . the action suggests that the british government intends to become more aggressive in prosecuting those allegedly involved in the lloyd's scandals . london police said the arrests grew out of actions that took place before . new york - based alexander & alexander , one of the world's largest insurance brokers , acquired howden for million in january . soon after , alexander & alexander claimed that million in reinsurance premiums and other funds had been funneled over several years into companies secretly controlled by former howden directors , including howden's former chairman , kenneth grob . alexander & alexander took a million charge against its earnings for reductions in howden's value and pumped in millions of dollars to prop howden's insurance - underwriting units . former howden officials arrested yesterday were mr. grob and former directors allan page and jack carpenter . also arrested were ian posgate and colin hart , former lloyd's underwriting agents and ex - howden employees . despite a drop in sales , westinghouse electric corp. posted a rise in second - quarter net income to million , or a share . a year earlier , the defense , electronics , broadcasting and financial services concern earned million , or a share . year - ago net included a pre - tax gain of million from the sale of its cable television business , which was offset by a million provision to cover a restructuring program . sales in the latest quarter were billion , down from billion . profit was in line with analysts' expectations that westinghouse would earn between and a share in the quarter . in the latest quarter , westinghouse had million shares outstanding , down from million a year earlier . " it looks like it was an excellent quarter , " said gail landis , of sanford c. bernstein & co . she noted the strong improvement in the company's operating profit margin during the quarter , to from last year . analysts also said the quarter's sales were flat when considering the absence of the cable operations . westinghouse said that operating profit increased in all segments except for broadcasting , which was even with last year despite the absence of cable tv operating profit . analysts said company officials indicated that operating profit grew well over for the commercial segment and by to for the industrial segment . in the first half , net income rose to million , or a share , from million , or a share , a year earlier . sales fell to billion from billion . " the first half met our expectations , " said douglas d. danforth , chairman , " and we are on target for the full year . " ms. landis said she expects the company to earn a share for the year , up from the earned in . westinghouse shares closed yesterday at , off cents , in new york stock exchange composite trading . a one - time alaska native leader pleaded guilty to a tax evasion charge and is cooperating with federal authorities in their wide - ranging investigation of corruption on alaska's north slope . with the guilty plea of eugene brower , former mayor of the north slope borough , the investigation now centers on a number of prominent borough contractors and consultants during mr. brower's three - year tenure , said u.s. attorney michael spaan . mr. brower , who entered his plea in anchorage , is the third person convicted in the two - year federal grand jury investigation of alleged bribes , kickbacks , fraud and extortion in the borough's billion - dollar public works program . the others , a former borough public works director and a borough representative in washington , d.c. , have also agreed to cooperate with authorities . mr. brower and the borough were subjects of wall street journal stories in and chronicling the borough's billion - dollar debt and a federal probe of its finances . the borough , created in by eskimo leaders seeking a greater say over local affairs , derived its massive wealth from its ability to tax the north slope oil fields and transalaska pipeline . he admitted not paying taxes on of gifts he received in . without admitting they were bribes , mr. brower acknowledged that the gifts -- a boat , trailer , - horsepower outboard motor and groceries -- were part of a " business or commercial " transaction . in exchange for his guilty plea and for cooperating with authorities , prosecutors agreed to drop two counts of interstate travel in connection with receiving bribes and two counts of failure to file tax returns . mr. brower could be sentenced to five years in prison and fined . but government attorneys asked that sentencing be delayed until next spring so they and u.s. district judge h. russel holland can see how candid his testimony is against others . mr. brower said in a prepared statement he was " relieved " to have the incident behind him . his attorney , william bryson , said his client is cooperating with authorities and , if necessary , will testify before a grand jury and at a trial . the grand jury investigation stems in part from an audit of the final days of mr. brower's administration in . the beneficiaries of those contracts included large contributors to mr. brower's unsuccessful reelection campaign . the scandal rocked the minnesota - sized swath of arctic tundra , where the borough had functioned much like a county government . until the scandal broke , mr. brower , a whaling captain , was a respected native leader whose family was among the most influential in the borough . he now works as a laborer on a demolition project in anchorage . gibraltar financial corp. , citing concerns about its falling stock price and share dilution , said it will ask federal thrift regulators to relax conditions imposed in their approval of gibraltar's proposed million acquisition of a florida thrift . gibraltar , a beverly hills , calif. - based thrift holding company , said it will ask the federal home loan bank board to allow it to pay for first savings bank of florida , based in tarpon springs , entirely in cash , rather than paying in gibraltar stock , as required by the bank board . gibraltar disclosed yesterday that when the bank board approved the acquisition on june , it required that gibraltar pay no more than of the price in cash . in its application for approval of the merger , and in agreements approved by shareholders of both companies , gibraltar said it would pay as much as in cash . herbert j. young , chairman of gibraltar , said in an interview yesterday that paying of the purchase price in stock would result in a more than dilution of the interests of current gibraltar shareholders . he noted that gibraltar's stock price had plunged about -- to a share on friday in new york stock exchange composite trading from a share when the acquisition was negotiated last october . the falling stock price would require issuing a greater number of shares than originally had been expected , mr. young said . " over is too much dilution , " he added . he said that he believes the bank board imposed the limitation on a cash payment so that the merged company would have a larger amount of capital . at current market prices , gibraltar would have to issue about four million new shares to pay of the cost of first savings bank , increasing gibraltar's shares outstanding to about million from million currently . mr. young said gibraltar learned of the bank board's restriction on the amount of cash it could pay on july , after gibraltar had disclosed that the bank board approved the acquisition . he said gibraltar didn't make an additional public disclosure about the bank board's restriction because it was advised by its lawyers that no disclosure was needed until gibraltar decided what action it would take . gibraltar's chief outside counsel declined to comment . mr. young said gibraltar's management decided on friday to seek a rehearing before the bank board in washington . he said gibraltar's board met saturday to approve the decision to seek the rehearing . mr. young added that gibraltar wanted to announce the rehearing move before the opening of stock - market trading today in a bid to halt the decline in gibraltar's stock price , which he said was caused by fears of the dilution that would result from the first savings bank acquisition under the terms imposed by the bank board . bank board actions are publicly available , but often aren't widely disclosed . yesterday , bank board officials in washington couldn't be reached for comment . the first savings bank acquisition is also unusual because it will be made through a gibraltar thrift unit in washington state , rather than through gibraltar's main unit in california . the reason is that washington and florida have reciprocal interstate banking laws , while california and florida don't have such laws . other california thrift companies have moved into florida by acquiring troubled thrifts . president reagan's own chief of staff , former sen. howard baker , set the standard for investigating white house scandals when he asked during the watergate hearings : " what did the president know and when did he know it ? " congress now is boring in on that same basic question during hearings on the iran - contra affair . eventually , investigators may get a clear picture of president reagan's role and knowledge -- but they won't find it in the president's own words so far . this week , lt. col. oliver north , a former national security council aide who was at the center of the affair , testified that he thought president reagan had approved his activities , but that later the president told him he didn't know of the diversion of iranian arms - sale profits to nicaragua's contras . col. north said he sent his superiors several memos requesting presidential approval for the diversion , but doesn't know whether president reagan ever saw them . next week , congressional investigators will continue focusing on the president's involvement when they question former national security adviser john poindexter . he has revised or contradicted most of his early comments , and sometimes his version of events has shifted within the course of a single day . here are some questions about three aspects of the iran - contra scandal -- arms to iran , aid to the contras and presidential style -- and comments mr. reagan has made at various times over the past eight months in addressing the issues : . was the u.s. involved in a secret arms deal with iran ? the speculation . . . to us has no foundation . during the course of our secret discussions , i authorized the transfer of small amounts of defensive weapons and spare parts for defensive systems to iran . did the u.s. trade arms for hostages ? we did not -- repeat , did not -- trade weapons or anything else for hostages , nor will we . let me just say it was not my intent to do business with khomeini , to trade weapons for hostages , nor to undercut our policy of anti - terrorism . a few months ago i told the american people i did not trade arms for hostages . it sort of settled down to just trading arms for hostages , and that's a little like paying ransom to a kidnapper . did the administration approve ransom payments to free hostages ? there's no way that you can discuss ransom or do ( terrorists ) any favor which makes taking hostages profitable . i'm having some trouble remembering ( whether he approved a million bribe and ransom plan ) . but then i want to tell you that there were so many things going on and so many reports and some of this was during that time that i was laid up in the hospital and so forth. . . . but it's possible that what we're talking about was use of money to pay people and hire individuals who could effect a rescue of our people there . and i've never thought of that as ransom . who was the u.s. dealing with in iran ? it was an opportunity presented by people evidently of some substance in the iranian government. . . . but never -- and this has been , i'm afraid , misportrayed to many -- we were not doing business with the khomeini's government . was the iran initiative a mistake ? i don't think a mistake was made . i do not think it was a mistake . we did not achieve what we wished , and serious mistakes were made in trying to do so . it was a mistake . was another country involved in helping the administration send weapons to iran ? we , as i say , have had nothing to do with other countries or their shipment of arms or doing what they're doing . -- nov. , about : p.m . there was a third country involved in our secret project with iran . -- nov. , about : p.m . what did president reagan know of solicitation of private aid for the contras ? i don't know how that money was to be used and i have no knowledge that there was ever any solicitation by our people with these people . as a matter of fact , i was very definitely involved in the decisions about support to the freedom fighters . it was my idea to begin with . i didn't know who they ( private contributors ) were , and i never asked , and i never asked how they did it . did president reagan personally ask third countries to aid the contras ? if i were going to answer any questions , i'd say no . exactly what does president reagan know about the diversion of iranian arms sales funds to the contras ? and the only thing that , apparently , from what has been learned so far in these investigations , that , evidently , those with this bridge loan , evidently , put a retail price instead of our wholesale price for the weapons . and thus , there was more money paid than we had asked for . now , that's where my knowledge ends . as a matter of fact i have , over and over again , told the washington press corps and told the leaders of congress that the only thing about which i have no answer is the apparent funds in the swiss bank accounts supposedly that came from our shipment of arms to iran . did everyone in the administration support the policy ? yes ( when asked whether secretary of state george shultz and defense secretary caspar weinberger supported the policy ) . . . . we have all been working together . does the president support the congressional investigations ? i , more than anyone , want these investigations to proceed so that i know , and will know , what has been going on that had been kept from me in various covert operations . i've never heard so much hearsay in all my life that wouldn't be permitted in a courtroom for a minute and a half , and it's taken as gospel by those who want to go further with this . what is the president's opinion of the aides who carried out the iran - contra policies ? lt. col north . . . is a national hero . john poindexter is an honorable man . as disappointed as i may be in some who served me , i'm still the one who must answer to the american people for this behavior . key dates in the iran - contra affair . nov. , a lebanese magazine , al shiraa , reports that the u.s. had been supplying arms to iran and that former national security adviser robert mcfarlane visited tehran . nov. , president reagan makes television speech confirming arms sales . dec. , reagan administration asks that an independent counsel be appointed to investigate the iran - contra affair . feb. , the tower commission releases its report criticizing the white house for mismanagement in the iran arms - sale policy . may , congressional hearings on iran - contra affair begin . microsoft chairman bill gates is still a billionaire , but for a while there yesterday he was reduced to mere multimillionaire status . shares of microsoft came under heavy selling pressure tuesday , falling / to / in a jittery market for technology stocks after analyst brian mutert of robertson colman cut his earnings estimates . but other analysts rallied to defend the stock yesterday , bolstering the value of the - year - old mr. gates' stake in the redmond , wash. - based software developer . after trading as low as / , it rose to finish at . ruthann quindlen of alex . brown , one of two underwriters that took microsoft public at a share in march , raised her estimates and reiterated her " very strong buy " recommendation . even mr. mutert took pains to note that his old estimates of for fiscal , which ended june , and for fiscal were " pretty aggressive , " and that his revised projections of and are " still above the rest of the street . " microsoft executives were less charitable . " he was in the ozone , " said frank gaudette , microsoft's chief financial officer . however , other company officials had indicated privately they considered the stock fully priced when it soared into the stratosphere in early may . behind the move : strong sales of personal computer clones that also use the pc operating system microsoft developed for international business machines , and ibm's decision to use microsoft software in its new pc line . however , technology stocks have taken a beating in the past month , and microsoft's pullback is typical . but it turns out that mr. gates is just as much a wizard at stock market timing as he is in software development . he started selling shares may , the day before the price peaked . mr. gates became a billionaire in the middle of the stock's big move . on march , his then stake of shares crossed the magic number of . between may and may he sold shares at an average price of , or million . assuming mr. gates hasn't frittered the money away and instead put it into assets that have held the same value -- an assumption that will get shakier with the passage of time -- his remaining shares must be worth million , or a share , for him to remain a billionaire . but now he believes the risk is on the downside . with second - quarter pc software business down to from the march quarter and third - quarter prospects uncertain due to customer confusion about the new ibm line , the roberston colman analyst says , " there is going to be an unusual lack of visibility at a time when investors needed some comfort . " ms. quindlen of alex . brown believes microsoft stock rose above merely on the false hope there might be a stock split that would make the issue more accessible to retail investors . yesterday she raised her estimates for fiscal to to a share from her previous estimate of , and for fiscal to to from . she says the universe of computer stocks she follows are , even after the recent pullback , still trading at a multiple of times earnings expected in the next four quarters . although microsoft now trades at times the midpoint of her current estimate , she believes it should trade at " at least times , " or . those who have sold microsoft in the recent past point to another lofty multiple of price to sales . john wilke , a money manager at ids financial services in minneapolis , says he makes it a rule to sell stocks selling at over four times sales . microsoft is selling at about six times its current sales rate . elaine goldberg , manager of the fidelity software and services fund , says that microsoft is more vulnerable to a change in market psychology than its main software competitors because microsoft sells at a higher price - earnings multiple . " i don't think the story has changed since the beginning of the quarter in march . if you liked it then , you've got to like it here . " business : personal computer software . net income : million ; a share . third quarter , march , : . per - share earnings : cents vs. cents . common shares outstanding : million . an investor group led by warburg , pincus & co. , which has been a major mattel inc. holder since , raised its stake in the hawthorne , calif. - based toy maker to from . the group bought one million shares july in an open - market transaction executed on the new york stock exchange for each . the group holds the equivalent of common shares , including various convertible preferred shares and warrants . in a securities and exchange commission filing , the group said its purchase was an investment . the group said it regularly reviews its mattel investment and may alter its stake periodically . john w. amerman , chairman of mattel , said , " we view the additional investment by warburg pincus as continuing support of the actions we are taking to capitalize on mattel's basic world - wide product and marketing strength . " the purchase appears to bear out warburg pincus officials' denials of market rumors suggesting that the firm was interested in reducing its stake in mattel , which posted a million loss on billion of sales for . john l. vogelstein , vice chairman of warburg pincus and a director of mattel , said the purchase doesn't signify any major change in the group's plans for its mattel investment . " we have had a large interest in this company since . we now have a somewhat larger interest , " mr. vogelstein said in an interview . mr. vogelstein also denied persistent rumors that mattel may be sold to another company . " there are no discussions under way , and there haven't been any discussions under way " by either mattel or warburg pincus , he said . mattel common shares fell cents yesterday to close at in big board composite trading . warburg pincus acquired the equivalent of a stake in mattel in when it was among several investors that helped the troubled toy company restructure million of debt . since , mattel has tried to focus on toys , abandoning its electronics and entertainment businesses . recently , mattel has been hurt by slumping demand in the u.s. for its masters of the universe and rainbow brite toy lines . the company plans to cut about jobs , or of its corporate headquarters staff , this year to reduce costs . for the weeks ended march , mattel reported net income of on sales of million . preferred - stock dividend requirements of about exceeded net . china's experiments in financial reform have included greater emphasis on raising money by issuing shares and bonds to finance investment by both central government and state and collective enterprises . in september china's first stock market opened in shanghai , involving shares and bonds issued by enterprises to the value of million yuan , or million . while still small in scale , it is expected to be an increasingly important part of the more competitive and complex financial system that is the goal of china's economic reformers . though enterprise share issues are relatively small compared with government bond issues , they provide a potentially important source of financial autonomy and flexibility for china's rapidly expanding collective sector -- particularly the smaller enterprises outside state ownership . share issues take two main forms : a restricted issue to a company's own employees and a public issue for general purchase . the former's main purpose is to provide workers with incentives and to link their earnings more directly to company performance . share issues and share markets also are seen as a way of stimulating competition for funds between enterprises , thereby raising efficiency and productivity . a good illustration of the flexibility share issues allow is provided by the shanghai yanzhong industrial co . this is an offshoot of a collective enterprise , the yanzhong copying industry co. , which specializes in photocopying equipment and services , but also manages a variety of firms that manufacture -- among other things -- medical instruments , plastic household goods and clothing . in this miniconglomerate launched a public share issue of five million yuan , shares at yuan each , about half the average monthly earnings of its employees . the money raised was intended to finance its own expansion and to finance participation in new joint ventures with foreign firms . to date it is involved in four such ventures : with a hong kong subsidiary of an american company to make fishing rods ; with an overseas chinese entrepreneur in the philippines to produce hamburger buns ; with a hong kong company to make plastic goods , and with a japanese company to produce cigarette lighters . the share issue thus promoted the scope and diversity of the company's operations . there are shareholders , of whom only are company employees ; the largest individual shareholding is shares . shareholders receive a guaranteed interest of a year , equal to the normal bank deposit rate ; they receive an additional net dividend of , which is supposed to reflect company profitability . in , however , this additional sum -- the maximum allowed by state regulations -- did not reflect the company's performance but was paid anyway to boost the firm's reputation in hopes of attracting buyers for future share issues . the issue of shares has led to fundamental changes in the management structure of the enterprise . previously , the general manager was appointed by the district government . although the original enterprise was a workers' " collective , " the workers had no role in selecting the company manager . with the formation of the new company based on the share issue , however , the general manager now is appointed by a board of directors and the local government has no role . the board is elected at an annual shareholders' representative conference . attendance at this meeting , however , is restricted to those who own at least shares -- in this case only people . in this case , the director and the general manager are the same man , the congenial and obviously entrepreneurial zhou xinrong , who also is the general manager of the original company . he is a typical example of an emerging new chinese business class . the same could be said of hu gang . he is the general manager of shanghai modern consulting co. , a self - financed enterprise organized by young academics and other specialists on the basis of a share issue to its own members at five yuan a share . individual holdings range from one to more than shares . its major function is consulting work for local government and industrial and commercial firms . it was the first such company to be given official approval in china . both shanghai yanzhong and shanghai modern operate with a considerable degree of independence from government agencies at various levels , not least because of their capacity for self - finance . they form part of a rapidly expanding sector of quasi - private companies outside direct state control . in fact , some chinese now ironically redefine chairman mao tse - tung's famous revolutionary dictum about the " countryside surrounding the towns " to denote the encirclement of an inert state - run sector by a dynamic , commercialized and semi - privatized rural sector . not surprisingly , chinese politicians have approached the extension of share issues and share markets with considerable caution . approvals are required from the central bank , and have been strictly controlled . planners fear the spread of share issues will weaken their ability to direct finance and control investment . in an environment in which profitability is fairly arbitrary because of price controls , enterprise share issues may well not reflect their performance and may lead to further misallocation of resources . in a socialist economy , moreover , the issue of shares raises fundamental questions about ownership . indeed , since march state enterprises have been expressly forbidden to issue shares for this reason , though they can issue bonds . the main aim is to invigorate the state sector by retaining the principle of public ownership while allowing the autonomous operation of former state enterprises . this is necessary because , as the collective sector expands , it is increasingly successful in taking markets from state enterprises and attracting their workers . this situation illustrates the dilemma of share ownership in a socialist economy undergoing reform . on the one hand , it can be seen as a way to enhance economic dynamism and productivity . on the other , it challenges state ownership and opens up a channel to unearned income and concentrations of private wealth . chinese policy makers are painfully aware of these problems but as yet show little sign of being able to resolve them . mr. bowles is an economist at guelph university in ontario . mr. white is a political scientist at the institute of development studies at the university of sussex . they recently spent a month in china studying financial reforms , sponsored by the british academy - chinese academy of social sciences exchange program . roh tae woo's dramatic call this week for direct presidential elections in south korea culminated a behind - the - scenes battle that he had been waging for months against hardliners who wanted to crack down on dissent , government sources said . though mr. roh's speech on monday clearly represented a concession to opposition demands , he had long ago thrown in his lot with reformers in the ruling democratic justice party , the sources said . an account of how mr. roh , chairman of the party and its candidate to succeed president chun doo hwan , outmaneuvered his conservative opponents was provided by a government official and confirmed by a source close to the president's inner circle of advisers . though the details of the power struggle may never be known , the version of events provided by the two sources indicates that the choice between lowering the political temperature and lowering the boom on street demonstrators was a close call . mr. roh , a close friend of the president and a member of the same korea military academy class attended by mr. chun , was being undermined regularly by mr. chang , the sources said . they added that mr. chang , leader of a competing class of the korea military academy , had ambitions of his own . " with chang in such a powerful position , roh couldn't win , " said one of the sources . but the sources said that mr. roh's chance came in may , when president chun was deciding on a critical reshuffle of his cabinet to quiet public outrage over an array of controversies surrounding the government . as the man in charge of south korea's chief intelligence agency when national police interrogators tortured a student to death in january , then covered up the murder , mr. chang was vulnerable . at the same time , the sources said , it was mr. chang who advised the president to scrap a national debate in april over revision of the constitution , a move that proved disastrous politically when protests erupted across the nation . they said mr. chung , who was home affairs minister at the time and also was sacked in connection with the police torture cover - up , convinced president chun to dump mr. chang as well . the two sources and others said mr. chang's dismissal took him by surprise . on may , two days after the cabinet reshuffle , rumors of a coup attempt by mr. chang and his loyalists , later denied by the government , sent stock prices plummeting on the seoul stock exchange . next , the sources said , mr. chung helped to change the attitude of a few crucial military leaders believed to be cozy with mr. chang , clearing most of the dangers from the moderate path mr. roh had begun to tread . mr. chung , the sources said , also helped swing key military commanders behind mr. roh . mr. roh then methodically garnered the support of the new chief of the national security planning agency and other elements of the power elite . on friday , while violent demonstrations raged in the streets , they said , mr. roh and his group were secretly at work drafting their proposals . while that was going on , the sources said , some disgruntled democratic justice party members , who had long believed mr. roh was dragging his feet on a more flexible policy toward the opposition , began a campaign to drop him as the party's presidential candidate . on sunday , the sources said , mr. roh took a vague outline of his proposals to president chun . mr. chun , who three days earlier had reaffirmed that mr. roh had " total authority " to settle the political impasse , gave the plan his approval . at that time , the sources said , one of the proposals called for the restoration of the civil rights of those convicted of political crimes , but didn't mention kim dae jung , the opposition leader , by name . mr. roh's specific reference to mr. kim in his announcement monday , the sources said , caught mr. chun by surprise . the president was a " little bit angry " at mr. roh over that , said one of the sources , and resisted . " roh carefully lined up all those who believed the time had come to loosen the political reins , and convinced a few who did not , " said one of the sources . " in the face of overwhelming odds , the reluctant mr. chun couldn't resist . " the majority of doctors in broward county in southern florida have limited their practices or have quit working altogether in reaction to a big increase in medical malpractice insurance premiums . the action has created a critical shortage in emergency medical care . " it may look like a strike , but in fact it's just a lot of doctors with a common problem of being unable to get affordable insurance , " said peter tomasello , president of the broward county medical association , who added that the effective slowdown wasn't organized . " many just can't afford the higher premiums . " the developing crisis is a result a rate increase granted st. paul fire & marine insurance co. that took effect yesterday in dade and broward counties . the st. paul , minn. insurance company is one of the state's largest malpractice insurers . because most county hospitals require physicians to carry malpractice insurance , numerous doctors notified the facilities that they couldn't continue working there . " some aren't providing emergency - room care , others aren't accepting new patients , " he said . as a result , only four of broward county's hospitals are providing complete emergency medical services . twelve area hospitals have ceased providing neurosurgical care and have stopped providing trauma treatment . five hospitals have given up delivering babies . george danz , the director of emergency medical services in broward county , said he is worried that the situation could harm patients who must travel significantly further to reach emergency rooms that are still providing complete care . " right now we're concerned about the fourth of july , " when it is usual for victims of automobile and other acccidents to crowd emergency facilities , he said . richard dellerson , chief of the department of emergency medicine at memorial hospital in hollywood , fla. , which is providing full care and picking up the slack at other facilities , said that , like other area hospitals , his has established contingency plans . " we are ready to bring in additional doctors and nurses if the circumstances warrant , " dr. dellerson said . doctors are hoping for tort reform to reduce the costs of medical malpractice coverage . st. paul fire , a unit of st. paul cos. , is one of only two commercial companies still writing medical - malpractice coverage in the state ; the other is florida physicians insurance co. , jacksonville . despite the rate increase , st. paul fire has said it intends to pull out of florida at the end of the year because of the large number of malpractice claims and the size of settlements awarded . corvus systems inc. said that it dismissed workers , partly reflecting a centralizing of its domestic sales offices , and that it expects to post a loss for its fourth quarter ended may . corvus , a computer products maker , had a net loss of million on revenue of million for the nine months ended feb. . in the fiscal fourth quarter , it had a net loss of million on revenue of million . the company declined to be more specific about the size of the latest quarter's loss , but it said it expects " improving results " in the current year . the dismissals affected about of its work force and involved headquarters staff as well as regional office workers . corvus said it closed five regional offices and will coordinate sales activities from headquarters . in addition , the company said union bank , los angeles , obtained a court order that gives it the right to take possession of corvus's unsecured assets in order to satisfy a defaulted loan to a corvus affiliate currently in federal bankruptcy - law proceedings . the company added that it is " continuing settlement discussions with the bank towards a mutually satisfactory resolution . " a spokesman said the company believes it has made adequate reserves previously to cover the affiliate's default . corvus shares closed yesterday at cents , off cents , in national over - the - counter trading . the dollar mostly eased in lethargic , end - of - the - quarter summer trading . some bullish economic news came out yesterday , but it didn't hold the market's attention in a day of unconfirmed rumors of embassy bombings and market intervention . " the market is just sitting around looking for excuses to do stuff , " robert k. ryan , vice president , foreign exchange , at irving trust co. , new york , said . in new york trading , the u.s. currency initially slipped on speculation that the west german and french central banks had intervened to curb the dollar's rise . its decline later was halted by rumors of bombings directed against the u.s. in the middle east , including a reported explosion at the u.s. embassy in kuwait . " the number of rumors in a market is inversely proportional to the amount of activity in the market , " richard witten , vice president of goldman , sachs & co. , new york , said . citing another rumor yesterday that the u.s. embassy in tehran had been bombed , mr. witten said the " absurdity " of some of the rumors is also a result of the inactivity in the market . after that rumor started , " people stood up and said , ' wait a minute , we don't have an embassy in iran , ' " he said . the u.s. index of leading economic indicators rose a brisk in may , suggesting quicker growth for the rest of the year . the increase followed a revised rise in april . separately , the department said new factory orders were unchanged in may after gaining a revised in april . but after excluding a plunge in the volatile military - related sector , orders climbed in may . dealers attributed the lack of trading largely to the calendar , saying there was reluctance to take any risks on the last day of the month and the second quarter . some trading operations also were affected by staff shortages from vacations or the approaching holiday weekend . " a lot of people just had no interest " in the market , robert mograbi , foreign exchange manager at credit suisse , said . in late new york trading , the dollar stood at west german marks , compared with late monday . the u.s. currency firmed to japanese yen from . the british pound recovered to from . in early trading today in tokyo , the dollar was quoted at yen . estimated volume was million ounces . shares of ontario & quebec railway co. collapsed following a canadian supreme court ruling in a - year - old railroad property dispute . the shares , which traded as high as canadian dollars ( ) wednesday , found no buyers yesterday when they were offered at dollars in the canadian over - the - counter market . the court ruled that minority shareholders of ontario & quebec weren't entitled to compensation from montreal - based canadian pacific ltd. for ontario & quebec properties that canadian pacific has sold over the past years . the properties were acquired by canadian pacific when it entered into a perpetual lease in to run ontario & quebec's railroad . the properties include extensive real estate in central toronto and in montreal . brokers said the court ruling removed an uncertainty from canadian pacific shares . in toronto stock exchange trading yesterday , the shares closed at dollars , up cents . canadian pacific , a transportation and industrial company , owns about of the ontario & quebec shares outstanding . joseph pope , a toronto stock broker , initiated the legal action against canadian pacific on behalf of himself and other minority shareholders . mr. pope declined to disclose his personal holding of ontario & quebec shares . the minority shareholders won their case for compensation in an initial court hearing by the ontario high court . prevailing wisdom said this was the year corporate takeovers were supposed to dry up . sweeping tax - law changes , the argument went , would make people lose their taste for acquisitions . so much for prevailing wisdom . with domestic and foreign acquirers toting war chests bursting with strongly valued foreign currencies or u.s. stocks , takeover activity has rebounded from a lackluster first quarter to post a robust first half . " things haven't been nearly as bad as one might have thought , " says hamilton e. james , head of mergers at donaldson lufkin jenrette securities corp. adds joseph flom , a top takeover lawyer : " business has come back nicely . we're working 'round the clock again . " in the first five months this year , corporate mergers and acquisitions were announced , totaling billion , according to mergers and acquisitions magazine , a trade publication . this compares with deals totaling billion during the same period in . some takeover specialists , uneasy about interest rates , have said they wanted to move while rates remain relatively low . and still other deals have been spurred by deregulation or increased competition in such industries as retailing , airlines and financial services . however , " the outlook for the second half is cloudy , " says mr. flom . he and other takeover professionals worry that several recent legislative moves in congress and various states , and a supreme court decision affirming indiana's tough anti - takeover law , could hobble merger and acquisition activity . in the meantime , such merger activity is prompting many targets or prospective targets to take increasingly risky defensive moves . the latest rage is recapitalization plans , in which companies shrink equity and boost debt , often by paying a huge one - time dividend to shareholders . in recent weeks such plans have been announced by allegis corp. , which plans to borrow billion to pay a - a - share dividend to shareholders , and caesars world inc . the allegis plan is under review . the increase in acquisition activity has come despite the notable absence of some of wall street's most visible takeover players . amid the continuing insider trading scandal , financier drexel burnham lambert inc. and investor carl icahn , under investigation in the continuing insider - trading scandal , have kept low profiles . both have denied wrongdoing . other takeover specialists such as irwin jacobs and victor posner have busied themselves tending to troubled financial empires , while texas raider t. boone pickens , has taken up a crusade for " shareholder rights " -- that is , giving maximum value to shareholders and not allowing corporate managements to devise anti - takeover measures at the expense of shareholders . in their places are lesser known figures such as ronald o. perelman of revlon group inc. and new york investors asher edelman and martin sosnoff . the expected slowdown in takeover activity did , in fact , materialize early in , but the hangover from a year - end merger mania , when companies raced to buy and merge before the new tax law took effect , lasted only a month or two . wall street firms like shearson lehman brothers inc. , worried about a decline in merger business , began aggressively courting new clients . typically , these firms lend acquirers money that acts as a " bridge " until permanent financing can be obtained elsewhere . the bridge - loan tactic , originally devised to compete with drexel burnham's powerful junk - bond financing , also has served to fill the gap created by drexel's reduced presence in the hostile takeover arena . " one additional reason we're getting business now is we can provide bridges , " says j. tomilson hill , co - head of shearson's merger department . " it's an added bullet in our gun . " thus , many wall street merger departments are growing at a time they weren't supposed to grow . shearson and donaldson lufkin have both increased their merger staffs . painewebber inc.'s acquisition group posted a record first half , and is rapidly adding staff . many of the new takeover customers are foreign . carrying coffers fattened by a weak dollar , they feasted on u.s. concerns in the first half . and the summer began with acrimonious transatlantic battles for control of harcourt brace and jwt group inc. , a major advertising company . " our foreign business is up significantly -- our london office is going gangbusters , " says peter slusser , a managing director in painewebber's mergers department . the japanese also have been active . among the several deals made or proposed recently , dainippon ink & chemicals inc. this week offered a share for reichhold chemicals inc. , which it valued at million . reichhold shares immediately shot up , closing yesterday at , up , suggesting a higher bid could come . but dainippon is known as an aggressive pursuer . last year it prevailed in getting sun chemical corp.'s graphic - arts materials group for million . some of the first half's takeover activity represented a sorting - out process , after last year's hot merger market . nearly deals were completed in the fourth quarter alone , according to mergers and acquisitions . many of last year's buyers are now divesting , to raise money and shed unwanted businesses . meanwhile , the bullish stock market , which largely quashed takeover activity early last year , has proved something of a blessing in disguise for takeovers , investment bankers say . while higher stock prices have meant fewer bargains for takeover - hungry companies , they also have meant an increase in value of the acquirers themselves . such companies can buy a lot more with their own stock in swap deals . " this a liquidity - driven business , and the markets are just incredibly liquid right now , " says jeffrey berenson , a managing director in merrill lynch's merger department . " there are huge pools of money lying around . " paine webber's mr. slusser adds : " the market definitely has helped psychology . businessmen feel much more positive about their deals . " and for sellers , the hot market has produced top - dollar bids for their shares . pittsburgh - based cyclops corp. , for example , was trading in the s early in the year when a bidding war broke out that ultimately resulted in a - a - share block purchase by dixons group plc that gave it controlling interest . " a lot more of them are putting themselves on the block . " the red - hot market , however , may be hurting some aggressive suitors in subtle ways , merger experts suggest . with stock prices so high , shareholders are now far more willing to take securities , or " stubs , " in addition to cash and notes issued to them by companies in defensive recapitalizations . " the stubs are given a higher value , " says mr. flom , the takeover lawyer . " this kind of market tends to produce deals that knock the original bidder out of the box , " because many raiders are unwilling to grant large equity stakes to current shareholders . continued strong stock prices , as expected , produced more stock swaps in the first half . security pacific corp. agreed to buy seattle - based rainier bancorp. in a billion stock swap , almost certainly the biggest acquisition in banking history . chrysler corp. bought out rival american motors corp. in a deal heavily weighted with chrysler common . more common , however , may be companies like usair group inc. , which , according to one person close to the company , stretched its cash reserves to the limit to pay billion for piedmont aviation inc . so far , like much of , hasn't seen megadeals such as those in , with the exception of british petroleum co.'s billion agreement to buy the of standard oil co. it didn't own . but potential acquirers like ford motor co. , which has billion cash and marketable securities , and beatrice corp. , have signaled that they might make big deals by the end of the year . texas savings and loans , trying to stave off a liquidity crisis , said net savings withdrawals in april were million , the largest monthly outflow this year . traditionally , savings and loans experience increased withdrawals in april because of income - tax payments . however , federal thrift regulators have said that withdrawals began rising in texas in mid - march as customers grew uneasy with the deteriorating condition of some s&ls . yesterday , the dallas federal home loan bank declined to comment on the april withdrawal statistics . the accelerating withdrawals underscore the problems faced by the state's weakest thrifts . as loan losses mount , and some large texas thrifts have failed , some large and small depositors are pulling out their deposits . as previously reported , that situation is causing several texas thrifts that are desperate for cash to bid up the interest rates they pay for funds . the weakest thrifts are paying for some deposits rates as much as percentage points over those offered by out - of - state s&ls . the higher interest costs are also pushing many texas thrifts into the red . what's more , several texas institutions are borrowing heavily from the dallas federal home loan bank . yesterday , the dallas federal bank reported that its total loans to texas thrifts in april jumped to billion from billion in march . these loans cover various needs by s&ls , including cash needed to meet withdrawals . included in the dallas federal bank's borrowings are billion in advances , up from billion in advances made in march . the dallas federal bank declined to comment on the withdrawals . however , as previously reported , the bank is holding talks with several major wall street brokerages , including merrill lynch & co. and shearson lehman brothers inc. , to enlist their participation in a program that would allow them to continue to place large deposits in some big , insolvent texas thrifts and to make a secondary market in these certificates of deposit . the program would allow that if a thrift should fail , some funds would cover uninsured amounts above the insured - deposit level , and it would ensure that depositors continue to earn interest rates originally set by the thrift for the full term of the deposit . the brazilian subsidiaries of four auto makers -- volkswagen ag , ford motor co. , general motors corp. and fiat s.p.a. -- said that heavy taxes have caused auto prices to rise so much that sales are practically paralyzed . as a result , next week the companies will grant collective holidays to more than workers . while industry officials would neither confirm nor deny reports of layoffs , vicente paulo da silva , president of the metalworkers union in the sao paulo suburb where ford and volkswagen are headquartered , said he expected the dismissal of at least workers to start sometime next week . according to the national auto makers association , domestic auto sales in 's first five months fell to units from units a year earlier . the association blamed the decline on an " unfair tax structure " under which about of the final retail price for autos goes to the government . " the cost price of brazilian cars { the final cost of a vehicle as it leaves the assembly line } is the cheapest in the world . but because of taxes , the price paid by the consumer is the highest in the world , " a recent association bulletin said . the demand was created by a government - decreed price freeze that made consumer items relatively cheap . however , the price freeze was lifted early this year and surtaxes were enacted to reduce overheated demand . a sudden drop in the dollar triggered a wave of profit - taking in frankfurt , sending stock prices sharply lower . but the dollar's drop against the pound boosted london shares . the dollar's decline occurred after trading ended in tokyo , where share prices ended slightly higher . turnover in frankfurt was heavy throughout the session , brokers said , as foreign investors unloaded some of the blue - chips that they had acquired over the past five sessions . the dollar's retreat to around marks dashed hopes for a sustained rebound of the currency , brokers said . this led investors to sell stocks because west german industry profits depend largely on the dollar rate . some issues trimmed their losses in the last few minutes of trading , when investors bought back shares that they had sold earlier in the day at higher levels . the downturn may not be the end of the current bull market , several brokers said . a technical downward correction was overdue after stocks had advanced for five straight sessions and began to show signs of gearing up for a summer rally , they said . the equities that had gained most over the past few days -- chemical , auto and financial shares -- were the main losers wednesday . daimler - benz fell marks to marks ( ) , bayerische motoren werke fell marks to marks and volkswagen was off five marks to marks . investors still remain bullish on vw because of the company's agreement with toyota motor to build trucks in west germany , brokers said . news that an auditor report cleared vw's current management of responsibility for allegedly fraudulent foreign exchange losses came too late in the day to affect trading , brokers said . chemical stocks gave up most of this week's earlier gains , as basf plunged marks to marks and hoechst dropped marks to marks . bayer , which plummeted marks to marks , was also hurt by news that group sales fell in the first five months , brokers said . among financial shares , deutsche bank tumbled marks to marks , while dresdner bank eased marks to marks . siemens , west germany's largest electronics group , dropped marks to marks on heavy foreign selling . more than of the company's stock is held by foreign investors . late in london , the pound was trading sharply higher at , up from late tuesday . " clearly , people are following on what sterling was doing , " one dealer said . in addition , " it was about time to rally " following recent sharp declines , the dealer said . dealers reported a modest amount of foreign buying interest , particularly by the japanese . volume rose to million shares from million shares tuesday . a major mover was consolidated gold fields . the stock rose pence to # ( ) amid rumors the company might sell its stake in gold fields of south africa . a consolidated spokesman said , " we have no intention of pulling out of south africa , but we retain the right to modify our investments if we choose to do so . " cable & wireless fell pence to pence ; the company reported pre - tax profits rose to # million ( million ) from # million in the year ended march . analysts predicted slower earnings growth for the current fiscal year . in tokyo , the nikkei stock average rose points to . turnover was about one billion shares , unchanged from tuesday . gainers outnumbered losers , to . certain financial , housing , construction and retail shares moved up . there weren't any fresh factors to affect trading , as the currency and bond markets remained relatively quiet , traders said . 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 equaling . the percentage change is since year - end . the resignation of richard ferris as chief executive officer of allegis corp. two weeks ago was a striking example of the failure of one man's personal vision . mr. ferris almost single - handedly forged a strategy of turning the company's united airlines and other units into a travel - services conglomerate . but after the united pilots union , backed by an investor group , offered to buy out the company , the allegis board stepped in and reversed the company's strategy , and mr. ferris stepped down . during his tenure , mr. ferris faced many problems , most notably a bitter and costly strike by united's pilots in . he also made mistakes , including prolonging that strike after pilots had already agreed on terms , by refusing to hire trainees who had honored the picket line . but mr. ferris's trials weren't unique . an array of specialists -- including professional negotiators , corporate psychologists , consultants and securities analysts -- all deal with similar problems every day . in the wake of the upheaval at allegis , some such specialists were asked to analyze mr. ferris and his strategy. ( allegis said neither mr. ferris nor board members were available for comment. ) . only one -- robert joedicke , an analyst -- knows mr. ferris personally . gerard nierenberg , president of the negotiation institute , a nonprofit group in new york , says mr. ferris's downfall resulted from taking negotiations with the pilots union too personally -- and being too intent on winning . " in a successful negotiation everybody wins . everybody . as soon as people feel they lose , they work very hard to change things over , " mr. nierenberg says . " the antagonisms become so great that they destroy reasonableness . approaching negotiation as a game with a winner and a loser is a tragic approach . " warren bennis , distinguished professor of business at the university of southern california and co - author of the book " leaders , " says : " chemistry in the executive suite is fundamental . but only becomes important when the company is in trouble . it becomes crucial when there is a crisis . " based on his study of top executives from u.s. corporations during the past five years , mr. bennis divides american executives into two categories : entrepreneurs and bureaucrats . " when you have charismatic leaders , they almost always get into conflict with the management . the charismatics are exciting , expansionist and eclectic , and they tend almost always to conflict with the number crunchers . " mr. luce , former chairman of consolidated edison co. , is also chairman of a texaco inc. general creditors' committee that is devising strategies in that company's chapter proceeding . " i will lay money based on what i know about these two styles , that there was never a strong compatibility between those two , " mr. bennis says . donald trump , manhattan real - estate developer and one - time owner of of allegis , dismisses mr. ferris's strategy . " the concept ( of integrating hotel , air and car - rental companies ) was so far off , if george washington were leading the company , he would have had trouble . barbara provus , a principal in sweeney shepherd , an executive recruiting firm in chicago , asks : " can you find fault with his strategy ? i don't know . but it's more than his strategy that got him in trouble . it's the way he sold it . " i've said for months that there should be some story done about the egos of ceos and how they are eventually causing them to lose control of their companies . " here in chicago , ( mr. ferris's ) reputation is of being less than an employee - oriented ceo , " ms. provus says . " his reputation is that . . . he likes to be in control , and is aggressive and outspoken . " bill meyer -- chairman and chief executive of chicago - based rohrer , hibler & replogle inc. , psychological consultants to corporate management -- says mr. ferris's big sin was losing . " people get called arrogant if they lose , " he says . " if they win , then the pattern isn't headstrong and arrogant and rigid ; it becomes powerful and gets all kinds of positive connotations . " mr. ferris " had very good relationships with the pilots in the beginning , " mr. meyer says . " he took flying lessons , and he learned their jobs , and nobody was really hitting him as being insensitive and . . . rigid in those days . it's only after he developed a strategy , became visible and made news . firmness of conviction on one side becomes someone else's rigidity . " general patton could get people to follow him into the teeth of battle , and he was as arrogant as you could find . " robert joedicke , an analyst with shearson lehman brothers inc. , says that mr. ferris " had many strengths , but his weaknesses were probably stubborn determination with little flexibility , and little talent to be able to compromise when necessary . " " it's said around that he paid too much for hilton international because he had such a definite goal to achieve this world - wide hotel chain , " he says . pursuing a diversification policy single - mindedly at the expense of the stock price may have tempted raiders . " if the stock is moving nicely on earnings , you don't worry about " raiders , mr. joedicke says . " there might in hindsight have been compromises that might have been desirable . " federal election commissioner lee ann elliott , who receives an annual pension from the american medical association , voted to block an official investigation of her former employer , the ama's political - action committee . mrs. elliott sided with the two other republican commissioners in a party - line deadlock that blocked action against the pac's expenditure of last year to defeat democratic rep. fortney stark . the commission's legal staff recommended an investigation , but the commission closed the case when only the three democratic commissioners voted to proceed . four votes are required for action . mrs. elliott and the ama declined to comment . the doctors' pac , angry at rep. stark for publicly castigating the ama's leaders as " troglodytes , " reported spending the money in an independent campaign to support his republican opponent , david williams . pacs may donate no more than directly to federal candidates , but can legally spend unlimited sums supporting friends or opposing enemies if they avoid coordinating their efforts with the candidates who benefit . rep. stark filed a complaint last year saying the pac's spending wasn't truly independent . the pac estimated that , in addition to the of spending , it raised from among its members in donations for the republican . that was nearly half the spent by the williams campaign , which included donated by the candidate himself . rep. stark asked mrs. elliott to step aside from the commission's consideration of his complaint because she had been employed by the ama for years , had been assistant director of the pac , and draws an ama pension . he said it would be " impossible for commissioner elliott to make impartial judgments on this matter . " mrs. elliott responded to rep. stark with a letter saying that " after deep introspection into my ability to fairly and impartially consider your complaint " she would take part in both discussion and voting on the matter . the election commission closed the case june after a series of party - line votes , according to records that became available yesterday . rep. stark filed suit in federal court in washington seeking an order to force the election commission to proceed , and to bar mrs. elliott from further participation in the matter . mrs. elliott may have been following a precedent set by a democrat , thomas harris , when he was a commissioner . president reagan refused to reappoint mr. harris , whom republicans considered too close to organized labor . but he formally nominated mrs. elliott for a second six - year term last week . senate confirmation hearings haven't been scheduled . sipping tea in the living room of her spacious apartment , mrs. y.k. choi seems the model of middle - class propriety until she begins voicing her support for south korea's student demonstrators . " who else is going to be brave enough to face the government ? " asks the - year - old university graduate and mother of three teen - agers . " i used to think the students were unduly influenced by north korea . i was afraid they would be used by terrorists . but gradually , my friends and i have come to think the students are speaking their own minds . and what they are doing is really needed . " the growing disillusionment of the middle class is one of the most important factors in the developing south korean crisis . the government faces its gravest political challenge since chun doo hwan came to power eight years ago , and now it finds opposition to president chun's rule is growing beyond its traditional base on campuses , in the militant clergy and in the political opposition movement . should a government package aimed at conciliating the opposition be accepted this week , the crisis will subside , at least temporarily . active opposition is spreading among ordinarily cautious lawyers , among businessmen , middle - aged matrons and traditionally conservative buddhist monks . they are people who perhaps never really respected the authoritarian chun regime , but in the past few weeks they have turned more disenchanted and more vocal . their unhappiness stems in part from the fact that on april , mr. chun summarily broke off debate over a proposed revision of the korean constitution that opponents had hoped would provide for direct presidential elections . the unhappiness has deepened as mr. chun has been unwilling to reverse himself , even in the face of massive protest marches and escalating violence . in the streets of seoul and in other south korean cities , riot police have clashed with thousands of radical students and workers every night for almost two weeks . there have been few serious injuries so far , but police have made more than arrests , while demonstrators have stoned police and burned police stations and police equipment . the riot police have dispersed the angry crowds with heavy use of powerful tear gas . " normally , monks are so gentle . they never do anything against the government , " said the middle - aged monk , clad in gray robes and with a shaved head . " but when the buddhist is gentle , the government ignores us . i'm really upset about that . " as for the firing of tear gas into temples and the arrests and beatings of protesting monks , he says , " we are all so angry about that . " to be sure , the vast majority of korean people want peace and stability . but conversations with engineers and shopkeepers , physicians , entrepreneurs and cab drivers over the past five days leave an unmistakable impression of a korean middle class that is unwilling to forego democratization for the sake of prosperity or for mere stability at any price . " if you compare the economic growth in the society with the political growth , there is really no political growth , " says y.k. choi , a well - off - year - old export - company executive . " for these eight years of chun , they have accumulated enough wrongdoing . and the april announcement { postponing debate on the amendment of the constitution until after the seoul olympics in } is being done only to prolong their power . " although he demonstrated briefly during the student uprising that brought down the government of the late syngman rhee , mr. choi has lived quietly and conservatively with his wife and raised three children . in the s , he joined an international company whose good fortunes paralleled those of the korean export economy overall . he dabbled successfully in land . he bought an apartment in a booming section of seoul for just over . the apartment is worth today . although the exterior of the apartment house is an ugly slab of concrete , the choi apartment itself would be considered comfortable anywhere in the u.s. , with oriental carpets , an expensive stereo , korean chests , a separate dining room and three bedrooms . like other well - off koreans , mr. choi and his family have a strong stake in social stability . but their affluence hasn't inhibited their growing sense of discontent . " we hear that of us koreans are middle class , but in a way it makes me laugh , when you stand your situation up against those in power , " says mr. choi . and when there are bribery cases brought to light , the sum is huge , like billion won , " or million . beyond that , mr. choi says that somehow the present government " has a lack of political technique . government doesn't know how to satisfy the people . " his wife , sitting on the opposite side of the coffee table , continues the conversation . she grew up in a poor family , and remembers sometimes being hungry as a child . she says it probably makes her sympathetic to the growing gap between rich and poor in south korea . and the government sometimes seems blind to the unequal distribution , she believes . until a few years ago , she says , poorer university students made pocket money by tutoring , but in recent years , the government has frowned upon school children taking after - school classes . thus , university students , especially those from farming and rural backgrounds , have been deprived of a source of income . mrs. choi sees a possible connection to rising student radicalism , although she admits that korean radicalism is a confounding mix of marxism and ultranationalism , at once anti - american and anti - authority . " the students from the countryside are more activist , " she says . they are sons of farmers , from rural families . part of their anger is seeing the rich kids drive by in their cars with their girlfriends . " at least some working - class koreans believe an apocalyptic event of some kind is in the making . " my boss is a member of the ruling party , and he is worried , " says chung young il , a - year - old taxi driver . " we had a meeting with him friday night , and he said something big is happening . " mr. chung and his co - workers believe that mr. roh will soon meet with opposition leaders , but he believes the student protests will continue , and eventually the government will crack down . " the military will come in , " says mr. chung . the taxi driver says he sympathizes with the students " something like , " even though the street violence of the past two weeks has cost him financially . " because of the protests , i couldn't make my quota , " he says , which amounts to about in fares per day . " i barely made half . it was very damaging . i had to make up the difference . " mr. chung earns about per month . despite the growing activism of many in the middle class , the economic prosperity of south korea in the s does serve as a stabilizer . " if you express yourself politically , you hurt yourself economically , " says a seoul physician who wants to be known only as dr. park . " the situation in south korea is very different from that of the philippines . " dr. park says that in south korea , " the majority stay silent . they don't want to show whether they agree or disagree . each individual has to have some guts . " dr. park says that the price of being a dissident in south korea can be high . " professors in universities can be banned from overseas travel , denied promotion or fired . in business and the professions , people suffer , too . just use your imagination . " one korean small - business owner in seoul says the normal price of activism for a successful person is an aggressive tax audit . some south koreans are convinced that foreign media focus on conflict too heavily . " you report too much . you exaggerate , " says won myung , the buddhist monk in seoul . one man who remembers those days sees both similarities and differences . mr. lee , a - year - old civil engineer who declines to give his first name , says : . " this situation is the biggest since , i would say , and one similarity is that syngman rhee had to step down because of demonstrations . it really started when one student was killed by police in a demonstration , in masan , " says mr. lee . " but the difference is , back in , there was more support for the demonstrations by all the people . everybody felt close to the students . this time , the range and scale of support is different , " he says . the prosperity of present - day korea has certainly diminished the chance for a united opposition . " these high - class people are against demonstration , " he says . but mr. lee also says that sentiment is turning . " people want more democracy . " and he believes that the aloof , unsmiling mr. chun is a far different character from the equally strong ruler the korean people deposed in . " syngman rhee really loved the nation , and he really loved people . when he stepped down , he truly did . when he knew what the people wanted , he actually did it . and when he stepped down , he walked the long way from the blue house to his villa . he didn't take a limousine . he walked . " *projection by state department . the wisconsin nature conservancy has a problem . rapidly growing deer populations on several of its private preserves are causing the destruction of rare plants . in one case , more than orchids have been reduced to just one -- spared only because the deer can't reach it . to stem the deer population and so save the plants , the organization is selling permits to hunt on the preserves for the fall season , with revenues earmarked for its efforts to protect endangered plant and animal habitats . the wisconsin nature conservancy is not alone . across the nation , many ranchers and farmers are beginning to charge fees for hunting on their land . revenues from hunting not only supplement agricultural incomes but often fund investments to promote wildlife habitats . these private efforts , however , have run into stiff opposition , particularly in such western states as montana and wyoming . this is unfortunate , since private investment in wildlife -- by both profit - making and nonprofit groups -- can provide substantial public benefits . in most states , landowners can charge trespass fees to hunters who want to hunt on their land . some states , however , have gone further . they have developed " ranching - for - wildlife " programs that encourage landowners to invest in improving wildlife habitat on their properties in return for certain benefits . state governments have an interest in the programs because they can improve the quality of wildlife . basically , landowners , in conjunction with the state fish and game department , indicate how they plan to improve wildlife habitats . the benefits to wildlife from improved food , water , cover and space can dramatically increase animal numbers . for example , landowners might improve brush cover for upland game birds , or plant willows and alder trees for moose , or manage wood lots to provide more food and cover for white - tailed deer . these types of changes have increased the elk population on the deseret ranch in utah from to since . in return , the state allows the modification of hunting regulations on the ranch properties . landowners can offer fishing and hunting outside of regular seasons ; they can raise the hunting limits , sell permits directly to individuals without going through the state lottery system , and qualify for some tax benefits . since these rules make the ranch lands more attractive to hunters , they are often preferred to free , public lands . such legislation has been implemented in several states , including colorado , california and utah . many critics attack this approach simply because it allows landowners to profit from hunting . " special - interest commercial groups are trying to capitalize on montana's abundant big - game populations , " says joe gutkoski , president of the gallatin wildlife association in montana . jeanne klobnack of the montana wildlife federation claims that ranching -- for -- wildlife legislation will " turn the sport into one for the rich only . " others fear that local hunters will have less access to hunting grounds . in some instances landowners who previously let hunters hunt for free have begun to charge a fee . this often happens , however , when a resource increases in value . many public campgrounds , for example , now charge user fees . but just because a state allows private landowners to charge fees doesn't mean it will reduce public hunting grounds . state officials in colorado , for example , note that opening more private land to hunting has not reduced the acreage of public hunting grounds . the evidence doesn't support this claim . a pheasant or a moose observes no borders . if a species flourishes on private land , some animals may well move to public lands . the deseret ranch in utah , for example , began an intensive hunting program a decade ago . local sportsmen report that they have a better chance to find a deer or elk on public lands surrounding the deseret than on more distant ones . in fact , on one public parcel just south of the ranch , about bull elk were killed recently ; before the deseret program , these lands were not known to have any bulls . in addition , since the deseret has transplanted more than cow elk to public lands throughout utah . state officials are so impressed by the improved quality and quantity of game on the ranch and on adjacent public lands that a director of the division of wildlife resources has asked other private ranches to accept transplants from the deseret . improvement on private ranches should have the indirect effect of increasing wildlife numbers on nearby public lands . without private investment in wildlife , many benefits to wildlife habitats , sportsmen and landowners would never have come about . even worse , antagonistic attitudes may lead landowners to close off all their land to hunters . we need to look beyond the benefits that go to private landowners to realize that sportsmen and other outdoorsmen can be served by public - private cooperation . ms. kwong is an earhart fellow at the political economy research center in bozeman , mont . sequa corp. is seeking information on atlantic research corp. that atlantic may have given to other parties , according to a securities and exchange commission filing . sequa's chairman , norman e. alexander , sent a letter urging atlantic to treat sequa equally as it considers its future plans . a copy of the letter , mailed friday , was attached to the sec filing . atlantic , which has been the target of a number of takeover efforts , has said its alternatives to a takeover include a leveraged buy - out , restructuring , selling off assets , or purchasing a " substantial business . " a copy of the letter was attached to the sec filing . atlantic research has rejected as inadequate a - a - share , or million , offer from sequa for the atlantic shares it doesn't already own . new - york based sequa , a chemical , electronics and aerospace concern formerly known as sun chemical corp. , holds an stake in atlantic , a maker of rocket motors and electromagnetic devices based in alexandria , va . mr. alexander also asked in the letter that atlantic research substantiate its claim that sequa's bid was not high enough and said that sequa was ready to explore " all available alternatives . " in national over - the - counter trading yesterday , atlantic closed at , down cents . auditing of thrift institutions by arthur young & co. and others came under fire from the house banking committee chairman in the wake of the costly failure of dallas's vernon savings & loan association . in a statement on the house floor , chairman fernand st germain charged that vernon's auditor " apparently failed " to warn of the thrift's serious weakness before it was declared insolvent last march . asserting that independent auditors generally have a " questionable record " in auditing thrifts , mr. st germain asked congress's general accounting office to investigate whether the auditors are failing to warn against unsound banking practices . without mentioning arthur young by name , rep. st germain , ( d. , r.i. ) summarized criticism of vernon's independent auditing that he said came from a government consultant . arthur young confirmed that it was vernon's auditor but declined to respond to specific concerns voiced by rep. st germain . william gladstone , the accounting firm's chairman , pledged to cooperate with any inquiry by congress , and predicted that " when the facts are known we will be found to have performed our work in accordance with professional standards . " last week , the federal home loan bank board closed vernon's successor , vernon federal savings & loan association , at an estimated cost of million in cash and a billion note , making it the costliest thrift bailout in history . vernon federal had been chartered by federal regulators after they declared vernon insolvent . regulators slated its offices to reopen today as branches of a new institution called montfort savings association , which will hold vernon federal's deposits of about billion . the federal savings & loan insurance corp. will assume the bulk of the thrift's billion in assets , which include a heavy proportion of bad loans . eventually , the board said , the fslic hopes to transfer to montfort some performing loans from vernon and from other failed thrifts . rep. st germain's comments come as the accounting profession faces growing criticism for sometimes being too cozy with its clients . chairman jack brooks ( d. , texas ) of the house government operations committee has warned accountants that if their performance doesn't improve , they may face some federal regulation . and the bank board is suing some accountants it accuses of failing to adequately audit thrifts that were later closed . he said the report found : . -- vernon's accountants " didn't complete their audits in accordance with generally accepted accounting standards and therefore failed to require adjustments to reported net income and financial position , " which could have triggered regulatory action . -- the audit's " failure may have resulted from negligence and disregard of information that was readily available " to the accountants . -- consultants by senior accounting firm officials made statements that were " in direct conflict " with data in their audit working papers . -- the auditors failed to call for a loss reserve for loans to six individuals totaling million simply because senior officers of the thrift vouched for the individuals . the dallas home loan bank estimates that arthur young runs up million to million a year in billings from thrift institutions in texas . it also served as auditor for two other texas thrifts that have been declared insolvent in the past months . house speaker james wright of texas had once intervened on behalf of vernon with thrift regulators . when vernon was declared insolvent by federal banking regulators in march , about of its loans were in default . later , in a lawsuit pending in federal court , the fslic said vernon officers " looted , dissipated and wasted " vernon's assets . mr. dixon has since filed for personal bankruptcy - court protection . federal officials said vernon's condition continued to deteriorate after it was seized last march and placed into receivership . vernon's loan portfolio is overloaded with loans to real estate projects , mostly in texas and surrounding states where real estate values have plummeted . the malaysian financier khoo teck puat and angry members of the khoo family are seeking to set aside the guilty plea of tan sri khoo's son in the national bank of brunei trial , lawyers say . however , lawyers for both the prosecution and the defense said it is unlikely the brunei high court will allow the son , khoo ban hock , former chairman of the failed bank , to change his plea back to innocent . nor , they said , is there any evidence he wishes to do so . mr. khoo pleaded guilty thursday to two charges of conspiring to cheat and defraud national bank . the khoo family controlled as much as of the bank , according to brunei investigators . when it was seized and closed by the brunei government a year ago , it was owed more than one billion brunei dollars ( million ) by khoo - related companies and had large obligations to depositors and creditors . the bank's net obligations are currently estimated at about million dollars . both the father and son , among others , were charged with several criminal acts . brunei officials believe the plea will increase pressure on the father to reach a financial settlement with the brunei government . but it also has infuriated tan sri khoo , according to family members and defense and prosecution lawyers . he abruptly fired the london law firm of taylor garrett on thursday for failing to stop his son from pleading guilty , lawyers say . add railroads to the list of stock groups that analysts think were unfairly beaten up in the october stock market crash . some major rail issues have fallen more than from their august highs , while the overall stock market is off about since then . the bears' reasoning seems to be that if the oct. market crash presages a slowing economy , rail traffic will be particularly hurt . wall street is full of analysts who claim that the particular industry they follow , be it rails or restaurants , is in better shape than stock prices would suggest . investors haven't made much money listening to analysts lately , so they're inclined to be skeptical about all the supposed bargains after the crash . but some rail analysts are pressing on anyway , convinced that a lot of facts support their bullish case . for example , railroads are posting their highest traffic gains in years , aided by the recovery of some major industrial customers . even if the growth rate slips next year , " rail stocks could be relatively attractive , " says merrill lynch's richard fischer . moreover , some analysts expect contract negotiations between rail management and labor in to end some inefficient labor practices . " some rail stocks are too cheap to ignore , " says michael lloyd , a salomon brothers analyst . mr. lloyd recently added burlington northern to his list of recommended rail issues , which already included consolidated rail and csx . he also raised his earnings estimates for burlington northern to a share from a share , compared with his estimate of a share . mr. lloyd says burlington northern is benefiting from strong traffic growth of coal and grain and continuing cost controls , while conrail and csx are capitalizing on the turnaround of rust belt industries . but he recently lowered his earnings forecast for csx to a share from , reflecting intense trans - atlantic competition for the company's sea - land container ship unit . " the recovery in our basic manufacturing industries is a lot stronger than people realize , " says mr. lloyd . buoyed by the strength of ores , coal , metals , machinery and chemicals , rail traffic surged last month . mr. lloyd predicts rail traffic gains will slip to about next year but exceed a flat to rise in gross national product . mr. lloyd remains neutral on norfolk southern . with its strong balance sheet and cash position , norfolk southern didn't fall as far as some rail issues since black monday , he says . some analysts remain cautious . graeme lidgerwood of first boston hasn't changed her opinion that rail stocks will underperform the market during the next six months . " even though these stocks have come down , it's too early to jump in headfirst to buy them , " she says . possible declines in automobile sales and housing starts could hold down rail profits and stock prices next year , she says . on friday , she upgraded union pacific to a " hold " from a " sell . " earlier , though , she had worried that its above - average exposure to general motors could leave it vulnerable to auto production cutbacks . ms. lidgerwood this month changed her recommendation on burlington northern to a " sell " from a " hold " to reflect the company's potential liability in an antitrust case brought a few years ago by a coal slurry pipeline concern . recently , some co - defendants , including union pacific , settled similar charges out of court . the only rail stock he currently recommends is csx , based on his hope that the company will soon " make rail negotiating history . " csx is negotiating with rail unions to slash about jobs , or about of its rail workforce , in exchange for incentive bonuses tied to productivity gains . some analysts expect the railroad industry to make major changes in its archaic , inefficient labor practices when management and labor meet next spring to produce a new three - year contract . " we're at a watershed in rail labor negotiations , " says salomon brothers' mr. lloyd . but others believe that productivity gains will come slowly and those achieved will be costly because of resistance from rail unions . " there are too many barriers to be overly optimistic " about an impending breakthrough in rail labor productivity , says james voytko , a painewebber analyst . analysts say rail issues face a potential setback next year if congress decides to re - regulate railroads , whose fortunes have improved since the industry was partly deregulated in . recently , the house transportation subcommittee voted to restore some regulation over rail freight rates , routes and branch line sales . like other analysts though , ms. lidgerwood doesn't think congress will approve any substantial re - regulation of the railroad industry . allied - signal inc. said it shelved plans to expand in defense - related businesses and instead will focus its aerospace and defense segments on aircraft systems , avionics and related parts . allied - signal , which also makes auto products , chemicals and engineered materials , said the move is part of a companywide effort to improve profitability . the morris township , n.j. , company said it expects " some related job cuts " but declined to say how many . " recent disruption in the financial markets and the increased costs of doing business with the u.s. defense department reinforce the need to improve near - term performance , " the company said . allied - signal acknowledged that the move means it is backing away from earlier hopes of becoming a major systems integrator that could oversee big defense projects . the action is expected to cut costs and improve profit margins , it added . the company said the combined aerospace and defense businesses are expected to account for about billion in sales , of which about billion will come from the defense segment . last year , the company's total sales were billion . the company's stock closed at , up , yesterday in new york stock exchange composite trading . it was the big board's most active issue , with volume of million shares . as part of its focus on the aircraft systems and parts business , the company said it will move the aerospace unit headquarters from arlington , va. , to the los angeles area , where many of its big operations and customers are located . the defense unit will remain in arlington . the company said it was too soon to project savings from the move , which was expected to curb the need for hefty research and capital outlays . laurence lytton , an analyst with drexel burnham lambert inc. , said that by avoiding aggressive expansion of the defense business , the company is taking a conservative , cash - preserving step . " by the st century , " he said , " this company may very well be aerospace , engineering materials and automotive -- but may be focusing on more commercial businesses . " in response to your oct. second - front articles ( " avoiding the economic debacle : comparing and " ) , you correctly pointed out that one of the most significant differences between those two periods are the " twin deficits " of budget and trade . the s in the u.s. witnessed a virtual balanced budget and our trade balance was in surplus . these two factors are so integral to our current problems that many analysts discount all comparisons with the s because of their absence . may i suggest , however , that a comparison of the present decade with the s is not only valid but also compelling . it takes only a change in focus to see the correct comparison . the economy of the u.s. is a part of an international economy ; it doesn't operate in a vacuum . that is as true today as it was in the decade of the s . the international economy is never static . it is constantly in motion . great economies of the past mature and level off as new giants emerge . we shouldn't expect that our role in the world economy would ever be exactly the same as it was then . our role has changed . at that time , britain was the leading economic power of the world , a role that we fill today . therefore , it would seem logical that if the comparison is valid , the economy of england in the s should be comparable with ours in the s . are you still looking for the " twin deficits " ? england had them in abundance in that decade and its answers to the problems read like the congressional record of this past year . onerous taxes and a move away from free trade ( which had lasted about years ) was the medicine . for example , a new york times article of april , , was headlined : " britain is ashiver over huge deficit : new taxation seems inevitable , and middle classes appear most eligible for burden . " the u.s. in the s was an emerging economic world power . our policies at that time called for protectionist trade barriers and a constant effort to achieve a surplus in our trade balance . if you are looking for a current model of that economy , don't look to wall street , look to japan . from ancient times until our own the teachers of our children have held jobs of lowly status and poor pay , and it is past time for this to change . in the days that were the glory of greece many of the teachers were slaves . in the early days of this country they were mostly single young ladies , the " schoolmarms " of yore , frequently teaching in those simple , one - room schoolhouses of romantic memory . teaching and nursing were the only professional jobs open to most women for many years , and when teacher got married she often quit her job to make room for other young ladies . college professors were almost exclusively men , though they , too , were poorly paid . surprisingly , though , this system provided good teachers because well - brought - up and educated young ladies had little other opportunity . even the one - room schoolhouses where a single teacher taught all the grades could produce children well - prepared in reading , writing and 'rithmetic . in part this was because all could learn at their own pace ; there were no sharply divided grade levels . it was also due to the almost universal use of the famed if forgotten mcguffey's readers . william holmes mcguffey , a professor at miami of ohio , took a great interest in elementary education . i read from them in my early school days . mcguffey's approach was to treat young minds as intelligent if unformed . he gave them dollops of shakespeare and samuel johnson -- brief excerpts , but in no way " simplified . " the rest of the curriculum was in history , geography , mathematics through algebra , and spelling from the equally famed " blue back speller , " from which the pupil had to memorize . all this changed with the ascendancy of a new educational philosophy . no more learning by " rote " -- i.e. memorizing spelling , dates or the multiplication tables . the result was summed up a few years ago in the lament that " johnny can't read . " or spell . or do simple sums . today the lament is broader . johnny can't date the civil war even in the right century . he can't locate brazil even on the right continent . he may have heard of the pilgrims but he doesn't know why they fled the old world for the new . almost as one they promise to give it attention from the white house and larger appropriations to get better teachers by paying them more , to make teaching a more attractive life work , particularly elementary and high - school teaching . i think we do need better pay for these teachers . our future as a nation depends upon the teaching of today's young , who will be tomorrow's citizens , and the doing of it should be not only well - paid but an honored job . but i do not think we should put the blame for today's educational deficiencies on the teachers . the fault lies not with them but with ourselves , with what we ask them to teach . the curriculum among our states varies , as it should because elementary and high - school education is properly of local concern . but there are very few public schools where , for instance , geography is a separate course , as it was in my childhood days . i remember ( with agony ) having to draw a freehand map of the united states , not to scale but with all the states located relative to one another . i have unhappy memories , too , of having to memorize the multiplication tables . but i still know that times equals , which is much simpler than having to figure it out every time . the history that was crammed into me at a young age has also served me well ; i still recall such memory devices as " columbus sailed the ocean blue in fourteen hundred and ninety - two . " when i got to the subject in college i at least had something to build upon . nowadays history is something mixed up in " social studies , " and one area skirted is anything having to do with the effect of religion on history , religion being a taboo topic . so how does today's pupil learn why the pilgrims came to massachusetts or whom they thanked for that first thanksgiving ? it's absurd to think you can't teach the effect of religion on history ( and a major one it was ) without preaching any particular religion . given what is taught ( and not taught ) in many of our public schools , why should we be surprised to learn that so many young people today can't locate the grand canyon , never heard of the author of " uncle tom's cabin " or know the role it played in history , think the missouri compromise had something to do with truman's election as president , or have no idea who charles darwin was ? yet such is the case documented by several recent polls of high - school graduates and made the subject of such recent best sellers as allan bloom's " the closing of the american mind . " nor are the deficiencies limited to what might be called " general knowledge " or , loosely , the humanities . about were equally ignorant on basic scientific principles such as radio waves . there are , to be sure , private schools that teach the rudiments of geography , history and science , church - sponsored schools that teach religion and its role in our past . and if we are not to become a society split between an elite and the general population , it is upon these public schools that the future of american society ultimately rests . the blame for all this doesn't rest on our teachers , most of whom are underpaid anyway . the blame rests on the school boards that tell the teachers what to teach and on the schools of education that teach the teachers and prescribe the curriculum for the school boards . not to mention the rest of us who tolerate the prescriptions , which we pay for with our taxes . maybe we're satisfied with what we get . the question is , are the pupils getting what they need ? mr. royster is editor emeritus of the journal . rep. jim leach quietly introduced a bill a few days ago aimed at reducing speculation in financial futures . barely hours later , the iowa republican learned that chicago commodity traders were gunning to kill his proposal . rep. leach said one illinois lawmaker told him the bill was shaping up as a classic " fetcher bill , " a term used in that state's legislature to describe a measure likely to " fetch " campaign contributions for its opponents . sure enough , one of the first to defend the traders was democratic rep. cardiss collins of illinois , recipient of from futures - industry political - action committees . she called on colleagues in the illinois delegation to beat back the leach bill and watch out for similar legislation . the freewheeling chicago futures markets are under attack in congress as never before . their tremendously profitable traffic in stock - index futures is being blamed by rep. leach and others for contributing to last month's stock market crash . but the traders have spread money around washington liberally in the past few years . now , in their hour of need , they are finding no shortage of defenders . during the same period , the two exchanges also have handed out more than in personal - appearance fees to scores of house and senate members who have toured the trading pits . furthermore , prosperous traders have poured personal gifts into the political war chests of washington's mighty . rep. leach is one of the few in congress who refuse to accept pac donations . his bill would empower the federal reserve board to require purchasers of " equity - like derivatives , " including stock - index futures and options , to put up as much as in cash . currently , the fed sets margin requirements for stocks , while the futures exchanges set their own margin requirements . before the oct. stock market crash , buyers of stock futures had to put up as little as cents on the dollar , or even less . the fed requires stock buyers to pay at least half in cash . " speculative activity has been very high " in the futures markets , rep. leach says . " it is certainly not the major cause of the market meltdown , but it is a contributing cause . " " we are all somehow now players in a game of financial russian roulette , using somebody else's money , " sen. heinz says . " i just think we ought to reduce the number of bullets in the six - gun from five to one . " sen. heinz gladly accepts pac funds but got only from the traders . to head off tighter margin rules and other regulatory changes , the heads of the chicago exchanges last week held what was by all accounts a council of war with the illinois congressional delegation . democratic sen. alan dixon and democratic rep. dan rostenkowski arranged a luncheon in the private dining room of house republican leader robert michel . one participant says the chicago merc's chairman , leo melamed , could barely suppress his belligerence . " he was pounding on the table , " this lawmaker says . " he was mad . . . . he made a forceful presentation : new york is out to get the chicago exchanges . " mr. melamed wasn't available for comment . the new york vs . chicago line was later echoed by sen. dixon , who received from the commodity pacs . he contends the big board is mounting " a very carefully planned effort to steal the chicago futures market . " the chicago merc and board of trade are " big business in my state , my friend , " sen. dixon says . " this is like talking about caterpillar or united airlines . they are important to us . " but in congress so far , it isn't new york lawmakers who are attacking . besides messrs . leach of iowa and heinz of pennsylvania , sen. william proxmire of wisconsin , chairman of the banking committee , has said he will introduce a margin - setting bill and reintroduce an old proposal to put financial futures markets under the securities and exchange commission , stripping authority away from the commodity futures trading commission , which has been considered friendly toward the traders . sen. proxmire doesn't accept pac money , and will retire next year . meanwhile , the chicago traders are getting support from lawmakers far from lake michigan's shores . he got from the traders' pacs . at the session , democratic rep. e ( kika ) de la garza of texas , the agriculture committee chairman , told lawmakers who would rein in futures trading to " cool it " until regulators finish their post - mortems on the oct. crash . " you can't legislate against " gambling in the markets , said rep. de la garza , who got from the traders' pacs . rep. de la garza also received last year a personal - appearance fee from the chicago board of trade , and accepted a two - day trip to boca raton , fla. , from the chicago merc . rep. jones received in fees from the two exchanges . those honoraria were part of a total of in fees that the two exchanges paid to current senate and house members last year to entice lawmakers to spend time with them . the going rate is for a house member , for a senator . every year dozens of lawmakers flock to chicago to collect . unfettered program trading returned to the stock market yesterday and prices dropped sharply , but the two events weren't closely related , stock and futures market professionals said . the dow jones industrial average ended the day down points , close to where it traded during much of the session , as new york stock exchange issues declining in price swamped gainers by a margin of about to . most traders said program trading wasn't the culprit . stock - index futures traders in chicago said they saw a small amount of arbitrage - related program selling early in the day , but not enough to have a major impact on the market . jeffrey s. tabak , a partner at miller tabak hirsch & co. , said fundamental economic factors hurt the stock market yesterday much more than programs . " people will look to blame program trading for the market being down today , " mr. tabak said . " but a lot of program traders are lying low , because they either got hurt or have decided the market is too volatile . " the figures are due to be released thursday morning . amid a spreading conviction in currency markets that the u.s. won't significantly support the dollar any time soon , the currency fell steadily to a post world war ii - low against the west german mark and to a - year low against japan's yen . meanwhile , both bond and most commodity prices were little changed in sluggish , trendless trading . " everything's tied to the dollar , " one futures trader said . " we're just waiting to see what uncle sam will do to cut the deficit , " added another , who echoed widespread skepticism that the washington talks will produce significant budget deficit cuts . from oct. , the day after the crash , until yesterday , the new york stock exchange had limited the use of its computerized system that had made program trading quick , efficient and relatively inexpensive . but the exchange allowed program traders unrestricted use of its so - called designated order turnaround system throughout yesterday's session . the prospect of resumed stock index arbitrage frightened investors more than any other form of program trading yesterday . in this strategy , when stock - index futures prices are at a steep enough discount to stock prices , arbitragers buy the contracts and sell baskets of the stocks making up the related indexes . conversely , when futures prices move far enough ahead of stock prices , arbitragers sell the futures and buy baskets of stocks . the result has been to intensify , or accelerate both downward and upward stock price movements . stock - index arbitrage was blamed by many for helping to accelerate losses during the oct. stock market collapse , when the industrial average plummeted points . on the other hand , it also has helped exaggerate stock market rallies on a number of occasions during the past three years . only about million shares were traded on the big board yesterday , another indication that program trading was limited . although some firms said they had executed programs , most said that discounts of futures prices to stock prices seldom were wide enough to justify arbitrage trading . " it has been a total nonevent , " said william j. breck , executive vice president of shearson lehman brothers inc . jon groveman , head equity trader at ladenburg , thalmann & co. , said the paucity of program trades yesterday suggested that traders are keeping their heads down while regulators study the possibility of imposing permanent restrictions on program trading . " i don't think program traders want to be disruptive today because they're under a microscope , " said mr. groveman . " the market is acting exactly the same way it has been in the past two weeks . " " we wouldn't ( avoid executing ) a program for that reason , " said mr. breck . suddenly , at a sensitive time for oil prices , sheik ahmed zaki yamani is back , talking about oil to important people . though reporters and certain analysts who talk to them weren't invited , mr. yamani made a rare appearance last night before the council on foreign relations , a private research group . " it's completely off the record . it's by special invitation only . thank you , bye bye , " a council spokesman said over the phone yesterday before hanging up . a friend of mr. yamani's in new york said mr. yamani also will give a series of lectures at harvard law school next week . after his sacking as saudi arabia's oil minister last year , mr. yamani , now primarily living in switzerland , abandoned the high public profile he enjoyed for almost years as a leader of the organization of petroleum exporting countries , practically disappearing from public view . for a time he was asked by saudi arabian officials not to leave the country , a ban since lifted . he hasn't spoken publicly since his ouster . " he made a deal with king fahd ( of saudi arabia ) that he wouldn't talk much about the oil situation in saudi arabia , " said david t. mizrahi , editor of the new york - based mid - east report newsletter . they did , however , invite officials of the new york mercantile exchange , where crude - oil futures contracts have been plummeting recently . william m. bradt , exchange chairman , confirmed yesterday he was preparing his tuxedo to attend the gala , but that he wasn't sure if the session was " hushhush . " a merc broker said he couldn't believe saudi arabia had allowed mr. yamani to speak . " they let him out ? " the broker asked jokingly . because of saudi arabia's key role in the opec meeting , scheduled for dec. , and a feeling among many oil analysts that mr. yamani still is a well - connected and important voice , statements he makes can easily affect the market , analysts said . some brokers on the new york merc said yesterday they were anxiously awaiting leaks from his talk . the effect that mr. yamani's style had on king fahd and his chief advisers is reflected in a recent decision in which the king posted a nephew of his in saudi arabia's petroleum ministry to keep an eye on goings - on . attendees will be asked to " compare notes " of the deposed and current ministers , the source said . everyone is worrying about the stock market now . in washington , the conferees on the - page trade bill seemed to recognize that fear of onrushing protectionism is one of the many factors that started stocks tumbling . so lloyd bentsen , chairman of the senate finance committee , declared that " this country wants to beat down protectionism around the world . " there is , however , a whale of a lot of protectionism in the house and senate bills that the conferees are striving to reconcile . up to now the major reason for optimism has been the fact that the reconciliation process is so complicated that the conferees might give up and quit . there are house and eight senate committees that have their sticky fingers in the bill , and these committees somehow have been parceled out into subgroups . but that was a dim hope at best . so it would be nice to know that a new attitude has infected the conferees . if sen. bentsen is to be believed , the public interest may be beginning to crowd out the variety of parochial interests that have made the house and senate bills such unholy messes . nobody likes unfair trade practices , and there's a lot of that sort of thing going around . but even some u.s. officials admit that the u.s. is about as guilty as its trading partners . when the u.s. retaliates , the obvious step is to curtail imports from the offending country . the preferred method , from the domestic producers' standpoint , is a quota , not a tariff . protectionists have found from experience that a foreign country can overcome a tariff by cutting costs and prices . the u.s. has been involved in quota systems for many years . an economist at the planning and economic analysis staff at the state department recently examined how this has worked out for one import commodity -- sugar . the author , keith e. maskus , a university of colorado economist , notes that sugar provides " an interesting case study in the political economy of import quotas in a rapidly changing market . " in , a quota system was set up and has continued , with an interruption in the late s , through today . the late s interruption surely showed that inflation often has a silver lining . world sugar prices soared in and amid general inflation , and congress seized the opportunity to push the commodity into the free market . freedom , unfortunately , didn't last long . price supports were set in and , and in full statutory protection was restored . the farm bill set a " market stabilization price " of to cents a pound for raw sugar . most of this represented a loan rate of to cents a pound . if market prices fell low enough , the growers could turn over their sugar to the commodity credit corp. and still come out all right . but the price was set at a level that would keep the ccc from getting stuck with sugar , and generally this has worked . at first a system of tariff and import fees was used to keep the stabilization price high enough to maintain the market price at the desired level . but the world price fell so fast in the recession of - that it overwhelmed the fee setup . the emergency is continuing . the quotas cut imports sharply , as they were designed to do . the u.s. consumer footed the bill , since our government agreed that we would import the quota sugar at our domestic price , not at the much lower world price . meanwhile , supply and demand has reared its head . there was no restriction at all on domestic supply , so at the controlled price the growers outdid themselves . one trouble was that the american public was becoming more and more weight - conscious , and sugar does provide several calories . another group of agricultural producers , corn growers , got into the act . corn sweeteners did a good job of sweetening things , and at a somewhat lower price . the fixed price for domestic sugar created a lovely market for the corn people , at a higher price than they could have achieved otherwise . in , congress was worried that the mess actually might hit the government in the budget , which was already hurting pretty badly anyway . that meant that the government had to rely mainly on the quota system to keep the domestic price at the stipulated level . the future looks even more weird . the way things have been going , the quota will have to be cut to zero in a couple of years . at that point , something will have to give . the government won't be able to keep the sugar growers in the style to which they have become accustomed without setting up some sort of program that is going to cost the government money , despite what congress said back there in . it surely should be mentioned that this setup was devised in to provide a profitable return to the least efficient sugar growers . this might have made a little bit of sense if the u.s. and the rest of the world had been running out of sugar and we had to find a way to get people to grow more of the stuff . such , of course , was not the case . the sugar system has been a constant source of embarrassment to our government . this was hardly the most profitable deal a federal agency had arranged : it had paid cents a pound for the stuff , and china got it for cents a pound . the world price at the time was cents a pound , but the u.s. bargain sale within two days knocked that down to cents . needless to say , foreign sugar exporters , notably fiji , australia and thailand , were infuriated . prof. maskus sees little hope that the u.s. will unilaterally extract itself from this mess . he suggests that another large rise in world sugar prices , such as occurred in the mid - s , might provide an opening . but even when we had that opportunity , pressure from special interests led us to blow it . since other nations also play games with sugar , the author says there eventually might be hope for some sort of multilateral liberalization , but fears it would be very difficult to accomplish . the sugar story , in any case , shows the trouble the government can create by fooling around with international markets . if the stock - market crash helped get the message across , it did indeed serve a useful purpose . when the stock market crashed last month , many investors were overwhelmed . the - year - old former sea captain turned full - time investor jumped up and down with glee . " i'm always happy when the market is plunging , " he says . a chunky , loquacious man who lives in a brick home on four acres in this isolated town near the burro mountains , mr. hatfield loves bargains . " i moved here from florida because i'm cheap , " he says . when the stock market " goes down , i go on a buying spree . " indeed , while the market's recent gyrations have threatened to scare off many investors , mr. hatfield is happily reinvesting the he took out of the market in september . he already has bought some stocks since the crash and is waiting to buy more next month , when he expects a rash of year - end selling for tax purposes to create more bargains . his wife , jean , is looking for a job to bring in extra money to plow into the market . " we're going to make a bundle , " he says . charles hatfield is one of a hard core of about four million individual investors who follow the stock market closely and invest regularly . to them , " investing is an intellectual game with strong psychological and monetary rewards , " he says . " the entertainment and challenge of the game are at least as important as the financial return . " hard - core investors are mostly well - educated professionals -- executives , engineers , lawyers , doctors -- with an average age of , who are " personally engrossed " in handling their finances , says mr. ross . many of them are retired . about are women , many of whom " inherited money late in life , became interested in finance and became very good at it , " he says . like other investors , many of the hard core were shaken by last month's plunge and subsequent volatility . take elger berkley , a glendora , calif. , accountant . the veteran investor says he was so stunned by the dow jones industrial average's - point drop oct. that he canceled appointments , turned off his telephones and sat all day in his office watching a tv station that broadcasts stock - market information . such resilience may stand out even more in the near future if the trauma of recent weeks causes many small investors to flee . with their basic optimism that the stock market is a good place to make money over the long run -- as well as an exciting sport -- the hard - core investors will become even more important . here is a look at four of them . the nice thing about investing , says mr. hatfield , is that " it sure beats having to work for a living " -- even during the recent market gyrations . after a three - mile walk every morning , he spends part of his day doing stock research and checking quotes beamed by financial news network to his satellite dish in this part of southwestern new mexico . he uses a videocassette recorder to tape the closing prices shown on the network , and studies them later . the rest of the time , he drives around the small foothills community of silver city in his white mercedes - benz , popping into chamber of commerce and town library meetings and giving investment seminars at western new mexico university . mr. hatfield has been making his living as an investor since , when he quit his job as a ship captain in st. petersburg , fla . his approach : when a stock hits a new low for the year , he considers buying it if it has several years of increasing earnings , pays a dividend and has a credit rating of at least a b - plus from standard & poor's corp . his strategy has been to hold a stock until it seems to have topped out . mr. hatfield , who has traded stocks since , disdains brokers : " they always advise you to buy a stock at its high . " he says his stock investments have provided him with a decent living for years . he expects to make about to on his stock investments this year after taking in both in and ; his earnings were much greater in the previous two years because he sold most of his portfolio , mainly in utilities , because interest rates had fallen , boosting the price of those stocks . also , this year he invested more in small companies , which didn't do as well as blue - chip stocks . in september , mr. hatfield sold of his portfolio . the risk of holding his portfolio of stocks wasn't worth it , he says . " my stocks were paying current dividends of , but money - market funds with no risk were paying , and there was little growth left . so why stay fully invested ? " then , to his delight , came the october crash -- and a host of new lows to pick from . his purchases included luby's cafeterias inc. , a cafeteria chain listed on the new york stock exchange , and southwest water co. , a la puente , calif. , utility that trades over the counter . by the end of the year , he plans to be to invested in a portfolio of small - company and dividend - paying stocks . in the past , he says , his major mistake has been selling too soon , especially with stocks that later turned out to be takeover targets . now he says he'll try to hold stocks for at least three years -- instead of selling when they reached a previous high -- partly to avoid the higher tax rate on capital gains , which he expects congress to eventually repeal . playing the market " is more fun now than ever , " he says . we'll be buying a lot of growing companies at a great bargain . " but these days , choosing what " bargain " stocks to buy in the market " causes a lot of stress , " he says . his income depends on the dividend yield and the stock price appreciation of the stocks he picks , so making these decisions " takes a lot out of me , " he says . still , mr. hatfield says he would certainly rather do this than go back to work . after years as a stock market investor exclusively , he says he's not sure what kind of job he'd qualify for anyway . peggy schmeltz , a - year - old grandmother in bowling green , ohio , has parlayed a inheritance from her father in into a portfolio of stocks valued at several hundred thousand dollars . although her stocks took a wallop oct. , she was back in the market the next day buying shares in such big board companies as general electric co. , usx corp. and dow chemical co . " they were good values that i couldn't afford to buy before , " she says . involved in three different investors' clubs , she owns stocks herself and a total of including club investments . she credits her success to following the " buy and hold " growth - stock approach espoused by the national association of investors corp. , the royal oak , mich. - based association of investment clubs . even though she has an m.b.a. degree , she says her college investment courses were " all theory and no fundamentals . " mrs. schmeltz looks for companies that will double their earnings in five years . " to qualify , a company must have an earnings growth rate of a year , " she says . one interruption in earnings gains , and she drops that stock from her list . she also will consider companies that pay dividends producing yields of or . she spends to hours a week scanning financial newspapers and other publications to spot candidates , and then sets a reasonable target price for the stock . one rule she follows : don't buy any stock that is selling for more than times the company's earnings per share for the past year . she tracks some to stocks , and when the price hits her target , she considers buying . mrs. schmeltz has no interest in buying mutual funds . " they're for someone who doesn't have the time , " she says . " why have someone else manage my stocks ? " she also says she's in the game for the long run , and plans to continue to hold stocks even in a bear market . " after every valley , there's a hill , " she says . with her children grown , she says she knows she could go back to work as a substitute teacher . " but i can make more money this way -- and it's more fun . " " together we make a pretty good combination , " - year - old elger berkley says of himself and his - year - old son , brian . the two run a tax - preparation and accounting firm in glendora , calif. , a small town miles northeast of los angeles in the foothills of the san gabriel mountains . they have been swapping stock - market ideas and managing separate portfolios for almost a decade . brian got started right after high - school graduation . " and i lighten him up , " adds brian berkley , who has come to work this day wearing sports shirt , slacks and cap because he plans to play golf in the afternoon . the elder mr. berkley was more fazed than his son oct. when the market fell points . " i sat there all day long staring at my television set in disbelief , " says the elder mr. berkley , who had a paper loss that day . " it bothered me , but it didn't send tremendous fear through me , " says brian , whose portfolio only lost because he had moved more of it into money - market fund and utilities . brian says he also had been reading a history of investing , in which he was struck by how volatile the markets have been down throughout history . " you must take these dips in stride , " he says . " when you buy stocks you are sacrificing safety , but over the long term stocks are superior - performing investment vehicles . " the two berkleys go at the stock game during the day , interspersed with their meetings with tax clients , and on nights and weekends too . if either sees any information they might want to peruse later , they punch a button on a videocassette machine to record it . sometimes , when he can't sleep , elger gets a stock idea and calls the charles schwab corp. all - night brokerage number at a.m. or so to dictate a buy or sell move . " i love being able to do that , " he says . he has a post - crash portfolio of stocks valued at ; brian now has a portfolio of five stocks and five mutual funds valued at . the two like to do their own research to hunt for undervalued companies , or companies with new products or potentials not yet recognized by the market . brian , for instance , brought to his father's attention fast - growth otc stocks like optical radiation corp. , a maker of contact lens products , for example . the berkley's were attracted by a new product from the company , and first bought shares in for a piece . for now , elger foresees government controls on program trading , taxes on takeovers , and the dow jones industrial average yo - yoing its way up to by april and to by the november election . says brian : " the republicans won't let things go to hell . " after the election , there may be " storm clouds , " says brian . but the two will continue to play the market . " we've set up stop losses on all our stocks , " says elger , mainly as a result of their experience oct. . although they were using such a strategy on a couple of stocks before the crash -- and it curbed their losses -- they now are using it on most of their portfolios . " if the market plunges , we'll be sold out , and then buy back in at a lower price . " even in a recession , " people need food , drugs and medicines and electric lights , " elger says . " i'll buy those stocks . " " i'll be in the stock market until the day i die , " he says . 'how often do you buy and sell financial securities ? '* . three tiems a year or less > . more than times a year > . *asked of adults who said they have an account with a stockbroker > . the dresses were leaden , weighed down with crinolines , padded hoops , double rows of hooks , snaps and yard - long zippers . christian lacroix's flashy , billowy clothes are as cumbersome as the gowns marie antoinette's ladies - in - waiting dressed her in . last week , mr. lacroix , the hot french designer , brought his fall line here for a charity fashion show at the world financial center in lower manhattan . and he needed all the help he could get dressing his models . out front , it all looked elegant and breezy . the rich and famous , from mikhail baryshnikov to brooke shields to faye dunaway , who had paid apiece to see the show as well as dine and dance , had no inkling of the commotion going on backstage . during the show , which raised for memorial sloan - kettering hospital ( retailer bergdorf goodman was a major sponsor ) , the enthralled guests tossed carnations at the models in their fantasy frocks . fireworks and tango dancers completed the festivities in what was a sort of new york coming - out party for the man who in recent seasons has stolen the spotlight from french high - fashion kingpin yves st. laurent . " usually it is more crazy , " the " couturier " said after the show . " the dressers did a marvelous job . " the ground crew is a new york fashion institution put together in by audrey smaltz , a veteran fashion stylist and fashion - show producer . for seven years , ms. smaltz also served as the velvet - voiced commentator for ebony fashion fair , a traveling review of couture fashions , sponsored by the black monthly general - interest magazine . ms. smaltz , a former harlem beauty queen who often wears dramatic scarves that trail behind her , has carefully schooled the ground crew valets . the dressers , wearing black t - shirts , study a polaroid picture of each outfit before they get set to work . kent brasloff demonstrated one dressing feat , carefully folding the scratchy layers of tulle on one lacroix creation to avoid shredding model diane dewitt's pantyhose . then he guided her feet to shoes she couldn't see over the tentlike dress . things don't always go so smoothly for the ground crew . as the veil - less model headed toward the runway , ms. stavrou lifted up the huge skirt and discovered the veil stuck in its heavy folds . she pried the veil loose and hastily wrapped it into place . the ground crew also provides fashion houses with many other special services . francine gadsden , an aspiring children'swear designer , is the ground crew's " fashion calculator . " she keeps track of shoes , earrings and pantyhose that go astray in the keystone kops - paced dressing backstage . also for hire are " fashion sleepers " who'll spend the night in a hotel room guarding expensive clothes that are in manhattan for a fashion or trade show . and fashion couriers from the ground crew trudge through the clogged seventh avenue garment district with garment bags and hat boxes . now that the ground crew has been born , the concept may seem obvious , but ms. smaltz got the idea , for the name at least , from a speech delivered by the late martin luther king . to fuel it ! to keep it clean ! ' he said. 'you need the ground crew ! ' " in the past four years , ms. smaltz's ground crew has cornered the backstage business on seventh avenue . for the next two weeks , at the spring collection showings , the crew will be working for such designers as donna karan , calvin klein , gucci and carolyne roehm . the regular crew members include fledgling designers , stylists , retirees and welfare recipients . for some of them , dressing can lead to much more than tending to models' zippers . sabia patrizi , a striking scandinavian - type italian blonde , was discovered backstage by carrie donovan , fashion editor of the new york times sunday magazine , last year . " i spotted this chic , divine - looking dame . i just had to use her , " ms. donovan recalled . ms. patrizi was a featured model in the fall fashion of the times magazine supplement . but mostly , the ground crew puts in hard work and needs a sense of humor to weather ms. smaltz's demanding supervision . once after a show , a smartly dressed woman customer wandered backstage and accosted one of the dressers . she was looking for a housekeeper and someone to take care of her clothes . ms. smaltz intervened : " please don't do that . don't insult my people . they aren't domestics ! they're pro - fess - ionals ! " ms. agins is a reporter in the journal's new york bureau . the securities industry survived last month's market collapse with few signs of permanent damage , but with less capital and much more skepticism about the forseeable future . while some small firms were forced to close their doors , major securities firms appear to have escaped with relatively manageable losses -- and at least one firm , kidder peabody & co. , made money for the month . " i don't know of any major firms that had any " critical losses , said lawrence eckenfelder , an analyst at prudential - bache securities inc . but fears remain on wall street that the market could take another sharp dive , that october's volatility could scare investors out of the market and dry up commissions , or that corporations , fearing the unknown , will put off financings . right now , for example , the underwriting business , normally a wall street staple , " just plain stinks , " says the head of investment banking at a major wall street firm . many senior wall street officials say they haven't had time to sort out the long - range implications of the market's plunge . how the crash will affect employee bonuses and staffing levels largely will depend on how the markets shape up for the rest of the year . the lesson is an important one at a time when the industry is contemplating a major restructuring . businesses that two weeks ago seemed to hold the key to wall street's future , such as merchant banking and arbitrage , don't look so good right now . other businesses that had been drawing fire as unprofitable and a waste of manpower and capital , such as government and corporate bond trading , proved to be wall street's salvation last month . like many investors , the firms lost a good deal of money -- some more than million -- betting for their own account in the stock market . those with big losses there include l.f. rothschild holdings inc. , which said it lost more than million betting on takeover stocks ; bear , stearns cos. , which is said by individuals close to the firm to have lost about million in arbitrage , and goldman sachs , first boston inc. and salomon inc. , whose losses in arbitrage may be even higher , wall street officials say . senior officials at the firms acknowledged large arbitrage losses , but wouldn't comment further . other securities - industry losses came making markets in over - the - counter stocks , when firms were forced to buy stocks at a loss from customers who wanted to sell ; when high - yield , high - risk junk bonds , which play a big role in corporate takeovers and restructurings , plunged along with the stock market , and on unrepaid loans made to retail customers who couldn't meet margin calls when the value of their securities dropped . and four major firms could lose an extra million each from the billion underwriting of british petroleum co. shares . but there was plenty of money to be made in government and high - grade corporate bond trading and particularly in the retail commission business . many firms also reported a good month in investment banking , largely through deals done before the crash on oct. . morgan stanley group inc. said it would break even for the month even after taking a loss -- estimated at million before taxes -- on its bp underwriting stake . morgan also said it intends to buy back as many as shares of its common stock in the open market . the three other firms that participated in the bp deal apparently didn't fare as well . goldman sachs lost money in october after accounting for bp , an official said . shearson lehman brothers holdings inc. and salomon are said by individuals at the firms also to have lost money in october , but senior officials of these firms declined to comment . while the four firms face losses because they agreed to pay more for the bp shares than they are currently valued at , the losses were minimized by the british government's decision to support the price of the shares at a level that sets wall street firms' losses at no more than million each . what's more , while the firms must record for regulatory purposes the full amount of their potential losses from bp , the firms' cash losses will be much less , at least for now . they don't have to fully pay for the shares they underwrote for almost two years . the firms also don't appear to have sold many of their bp shares friday when the offering became effective , hoping instead to allow the shares to rise in value and further cut their firms' losses -- and possibly make money if the shares appreciate sufficiently . one major firm that wasn't involved in bp , first boston , still " will have a loss for october , " peter t. buchanan , the firm's chief executive officer , said friday . he added that " given the circumstances , the performance of our trading desks was very good . " first boston officials said most departments made money in october , but that those earnings were wiped out by risk - arbitrage losses . mr. buchanan declined to elaborate on specific departments . most chief executives said the value of their firms' junk bond inventories plummeted , but mr. joseph said that " ours didn't . " he wouldn't elaborate , and he wouldn't say whether the closely held firm made money in october . one firm that said it made money in october is kidder peabody , general electric co.'s securities unit . max c. chapman jr. , president , called october " one of our best months . " mr. chapman said kidder officials had been worried about the stock market in august and decided then to reduce sharply the amount of securities the firm held for its own account . the firm also benefited from its settlement with the securities and exchange commission of insider - trading charges and other alleged securities - law violations . as part of the settlement , kidder agreed to close its risk arbitrage desk , a move that spared it the losses that hurt those who remained in that volatile business . mr. chapman also said the firm's retail brokerage operations had commission levels two to three times higher than normal . and l.f. rothschild said it would buy back as much as million face amount of its debentures . the firm , which has said it is exploring the possibility of getting more capital , said the debentures are trading at about half their face value and represent a good investment for the firm . e.f. hutton & co. and ryan , beck & co. , a regional securities firm , are shrinking their municipal bond operations . because of what a spokesman called " the changing conditions of the marketplace , " hutton said it will halt municipal bond underwriting and trading in five of its regional offices and fire people . the offices affected are in atlanta , seattle , denver , philadelphia and kansas city , mo . other hutton offices will take over municipal bond functions for the five locations . ryan beck , a west orange , n.j. - based investment banking and general securities brokerage firm specializing in banking , savings - and - loan and tax - exempt securities , said it will fire of its employees as part of an effort to trim overhead expenses . the firings are the result of a decline in tax - exempt securities underwritings , as well as underwriting initial public offerings for local savings and loan associations . these so - called " community thrift conversions , " which convert an s&l from a depositor - owned institution to a publicly held corporation , have dried up because of stock - market meltdown . it will be a while before that business comes back . " moving against this current of cutbacks , first boston corp. said its municipal bond staff doesn't face imminent cuts , contrary to widespread speculation . michael hernandez , managing director and head of first boston's securities division , told dow jones capital markets report that he doesn't anticipate trimming staff this year . the division grew about this year to employees and mr. hernandez says he expects to be recruiting additional staff next year . " we looked at where we were and what we needed to be , " he said , referring to a spring review of his divisions . the conclusion : " we were smaller than the competition and that we had to grow , " he said . the firm ranked fourth among municipal bond underwriters in the first nine months of the year , with issues and a market share , according to securities data co. , which tracks the industry . ( see : " corrections & amplifications : ryan , beck & co " -- wsj nov. , ) . donald trump and national broadcasting co. have dropped a proposal for the broadcaster to move to a massive real estate project the developer plans for the west side of manhattan , apparently because of strenuous opposition by community residents . meanwhile , nbc is likely to cut several hundred jobs next year , primarily among its union workers , in an effort to keep costs in line . the company already has announced the cutting of jobs from members of the national association of broadcast employees and technicians ; of those are with the radio network . the job elimination was presented by nbc executives , including nbc president robert wright , as part of a business plan friday to john f. welch jr. , the chairman of nbc's parent , general electric co. besides job cuts , nbc's long - range plans include trying to hold the current news budget of just under million annually constant , an nbc official said , with the exception that next year's news budget would be increased because it is an election year . mr. trump , in a letter to robert wright , nbc's president , said that " based on the long , cumbersome and uncertain new york city zoning and review process . . . the decision left nbc , which has been conducting a highly publicized search for a new home , with two choices : moving some or all of its facilities to one of several sites in new jersey , or staying put . currently it is housed in rockefeller center , a striking but dated facility built for radio in the s . henry kanegsberg , the nbc vice president who is directing the search , said he expects to announce a decision by mid - december . meanwhile , mr. trump said he would proceed with his plan for a west side development , known until now as television city . he still faces a battle against west side activists who say the project is too big . the developer said he would keep the plan's most controversial feature , a - story building , as well as luxury condominiums , a shopping center and offices . mr. trump said that in place of a studio for nbc , he would substitute a movie and television studio or , possibly , a park that he said would be similar to tivoli gardens in copenhagen . " the economic feasibility was tied to donald's getting zoning at a high level of density , " mr. kanegsberg said . however , nbc was becoming discouraged about the zoning approval process , which by law must take at least six months . recently , another big west side project , a proposed new home for salomon brothers inc. at the site of the new york coliseum , has been delayed by community opposition and by a lawsuit filed by a local civic group . some west side residents , many of whom are wealthy and well - connected , have been just as vocal in opposition to television city . " we see what's going on at the coliseum and we have to be concerned . it's indicative of the process , " mr. kanegsberg said . mr. trump is seeking approval for million square feet of development on the - acre site . mayor edward koch , in a recent interview , said " that's twice the level of density that was approved before ( when the site was under different ownership ) , and he's not even proposing any moderate housing . it's all luxury . " the mayor added , " i could change my mind , but right now i'm against it . " mr. kanegsberg said nbc would balance two conflicting goals : a need for more modern studios in less expensive territory , and a general preference for remaining in new york . mayor edward koch , citing mounting fears that the stock market crash will send the city's economy into a tailspin , announced a temporary hiring freeze for municipal jobs . he said the city will defer filling positions for at least days . " i am concerned for new york city , " the mayor said . " there will be a loss of jobs and income in financial services and a reduction in tax receipts . " mr. koch added that the city's pension funds have been directly hurt by the stock market . " the value of the ( pension ) system's equity portfolio has decreased and may continue to decrease , " he said . abraham biderman , the city's finance commissioner , said the value of the stocks in the pension systems , which totaled billion before the crash , has fallen more than , or about billion . " we made some of it back on our bond portfolio , which is billion " currently , mr. biderman said , " but we're still net behind quite a bit . " the mayor said the hiring freeze will be reviewed feb. and will be lifted or continued depending on the performance of wall street firms and city tax revenues . the freeze will include a delay in hiring police officers . the city's unemployment rate is , lowest in years . but one - third of new jobs in the past decade are in financial services , including the securities industry , insurance and real estate . " financial and business services have been the twin engines of city's comeback , " said samuel m. ehrenhalt , regional commissioner for the u.s. bureau of labor statistics . " the days of wine and roses are over . " three financial firms -- salomon inc. , kidder , peabody & co. and l.f. rothschild holdings inc. -- have announced layoffs totaling more than jobs . in addition , numerous financial firms have been transferring back - office operations out of new york , to avoid the city's high rent and taxes . the downturn in financial services has changed the outlook for commercial real estate , which until recently was booming . " i think downtown ( the financial district ) is going to have a lot of trouble , " said jerry speyer , chairman of the real estate board of new york , and one of new york's biggest developers . " you look at the big firms and they're contracting . you have to ask what it means . " salomon and developer boston properties inc. have agreed to pay the city million for a site adjoining central park , where salomon plans a new headquarters building . however , salomon's decision to lay off employees weakened its resolve , sources close to the project said , and the stock slide sapped its resolve further . officials at salomon , boston properties and the city have been in intense talks in an effort to save the project . since last monday's market crash , salomon " has been going back and forth like a ping - pong ball " on whether to proceed , a source close to the project said . there could be a welter of litigation if the deal falls through . aside from its land - purchase contract , salomon signed a long - term lease commitment for billion , sources said . " it would be terrible " for the city if the sale fell through , said mr. biderman . president reagan and congressional leaders produced more symbolism than substance in their first day of budget talks , but another drop in the stock market increased pressure on them to exceed their target of billion in deficit cuts . the two sides met for about an hour at the white house and agreed on little more than the mechanics for carrying out negotiations and the need to begin moving quickly to signal the plunging stock market that the government is intent on controlling its deficits . the administration will begin pushing harder this afternoon at a meeting in the capitol , where it plans to give lawmakers a list of specific spending cuts and revenue - raising measures . " the president said we need to arrive at an agreement as quickly as possible , so as to remove any doubts on the future of the economy , " said white house spokesman marlin fitzwater . senate majority leader robert byrd ( d. , w.va. ) added : " we need to begin quickly , which we're going to , and work as hard and as fast as we can . " but administration officials also acknowledged that the continuing unrest in the markets is raising pressure on negotiators to go further , to show the government's ability to act decisively . the administration is focusing first on a billion deficit - cutting package but will " go beyond it if we can , " said one official privately . publicly , mr. fitzwater asserted : " we want to achieve as much budget reduction as possible . " the administration team plans to go to today's meeting with a number of suggested spending cuts as well as a list of proposed revenue - raising measures , officials said . their proposal is likely to include plans for curtailing certain income - tax breaks that were left untouched by last year's tax - overhaul legislation . treasury officials worked over the past weekend to prepare a list of options for the team . there also is increasing interest within the administration in hammering out a deficit - reduction plan that stretches beyond one year . the white house is interested in discussing two - year budgets , particularly in military spending , and other revisions in the budget process that might ensure savings . for their part , democrats , particularly those in the house , are more interested in using their own pending deficit - reduction bill , which is about half tax increases and half spending reductions , as the launching point for further talks . the house is expected to pass this bill thursday and send it to the senate . because of the difficulties the negotiators will face in bridging their differences , both congressional and administration aides continued to express skepticism that the negotiators can go beyond billion in deficit reductions . when house speaker james wright ( d. , texas ) mentioned working for a package of more than billion , his comment was greeted by silence , aides said . still , negotiators on both sides agree that roughly half the deficit - reduction package should consist of new revenue and half should be spending cuts . they also recognize the need to hold down signs of partisan squabbling , which would only exacerbate market fears that the government can't come to grips with its budget problems . the white house negotiating team , as expected , will consist of treasury secretary james baker , white house chief of staff howard baker and budget director james miller . the congressional negotiators will include the leaders and ranking minority members of the budget , appropriations and tax - writing committees of the senate and house . while no specific plans exist , there already is some discussion in the executive branch of expanding any domestic budget agreement into an international one . if the deficit reductions are big enough , the administration is likely to try to use them as leverage to win new economic concessions from west germany and japan , an approach that might produce a three - way package that could have a strong positive impact on financial markets . continental illinois corp. said its first options of chicago inc. unit had losses of about million during last week's stock - market plunge and that the banking concern last tuesday exceeded a legal lending limit when it made huge cash advances to the options clearing firm . the company's continental illinois national bank & trust co. of chicago entered into a consent order with its primary regulator , the office of the comptroller of the currency in washington , agreeing not to exceed investment and loan limits set by the agency when the bank bought first options late last year . continental illinois also said that the first options losses could lead to a " moderate " fourth - quarter loss for the banking concern , depending on the performance of its other operations . in an interview sunday , william l. gunlicks , a continental illinois executive vice president , said of first options' losses : " we are not talking about a major portion of the bank's earnings . " in the year - earlier fourth quarter , continental illinois had net income of million , or cents a share . mr. gunlicks also said sunday that the bank had been in compliance with the lending limit throughout last week . however , that is broken down into two components by banks and their regulators -- unsecured and an amount equal to an additional of primary capital can be lent if secured . it appears continental illinois exceeded the unsecured limit by advancing to first options more than about million tuesday to keep the unit's regulatory capital adequate . mr. gunlicks didn't return telephone calls last night . through a spokesman , he said he didn't see any contradiction between his statements sunday and the bank's statement yesterday . the spokesman said million of losses at the unit was within the range mr. gunlicks had in mind sunday . the disclosure illustrates the big risk that chicago - based continental illinois assumed when it bought first options , the nation's biggest options - clearing firm , for million . the bank portrayed the acquisition as a way for continental illinois to boost its fee - income and improve profits , though the move was criticized in some quarters as excessively risky -- especially for continental illinois , which was bailed out by the federal deposit insurance corp. for billion in . while first options is by far the biggest clearing firm on the exchange -- it has a market share in options clearing of more than nationally -- million would be more than its share of the exchange's estimate of total losses . a cboe official reached last night said that to his knowledge the million figure is still the exchange's best estimate of floor losses as of last friday . continental illinois advances money to first options on an unsecured basis so that the unit's regulatory capital is equal to at least of the trading positions it handles . and beyond that , continental illinois , along with other banks , lends on a secured basis to first options for the remainder of its huge credit needs . the unit typically uses about billion , but last week's market activity , where trading volume more than doubled , pushed up the borrowings proportionately . continental illinois said first options has met all of its obligations , continues to have access to its bank credit , and has capital above exchange and regulatory limits . while the bank's management has largely been left to run continental illinois without federal interference , the bank has kept regulators closely informed of its actions and has generally avoided controversial moves . continental illinois has been the target of complaints from banks big and small that believed the government , as owner , was competing with them . the huge increase in advances by continental illinois to first options last week , however , weren't by design , and mr. gunlicks said sunday that the firm would be tightening its own credit policies to better guard against big swings in the market . as a clearing firm , first options processes trades and lends money to options and futures floor traders , taking securities as collateral . the losses occurred when securities prices plunged and traders couldn't make up the difference . jardine strategic holdings ltd. of hong kong scrapped its agreement to buy a stake in the securities firm of bear stearns cos. , the latest deal to fall victim to last week's stock market crash . in new york , bear stearns said it is " exploring all of our legal options " in the wake of the hong kong concern's decision to end its tender offer for bear stearns shares at a premium - to - market price of a share , or million . jardine strategic , a -owned affiliate of jardine matheson holdings ltd. , cited " recent developments " in the stock market in ending the accord it signed late last month . the tender offer , begun earlier this month for of the common and cumulative preferred stock outstanding of bear stearns , had been set to expire nov. . jardine strategic said it will return to stockholders all shares tendered . besides jardine strategic , hong kong - based jardine's has interests in financial services , engineering and construction . however , bear stearns's share price has tumbled in the recent market rout . on friday , the stock fell to close at a share on the jardine strategic announcement . the transaction wasn't going to raise any additional money for bear stearns , so it won't change the new york firm's current capital position . but the withdrawal of the asian concern will affect bear stearns shareholders -- including of its senior officials -- who had expected to profit on their holdings . " we are sorry that jardine's does not have the same confidence in our industry as we do , " bear stearns said in a news release friday . added alan c. greenberg , chairman and chief executive officer of bear stearns : " notwithstanding recent developments in the financial markets , bear stearns's financial position is about the same as it was on sept. , when jardine's agreed to make its offer . " mr. greenberg said that as of sept. , bear stearns had more than billion in capital . bear stearns ranked ninth in terms of capital among wall street securities firms as of last january , according to the securities industry association . " we made up for it ( the losses ) elsewhere , " mr.greenberg said . but because of the sheer volume of last week's trading , mr. greenberg said , " no firm on wall street knows how they stand today . everyone has to clean up questionable trades . " mr. greenberg declined to say whether bear stearns would take legal steps to try to get the agreement enforced , or to seek compensation from the hong kong concern . " our lawyers are studying our options , " he said . brian m. powers , managing director of jardine's , said that jardine's decided " it was in the best interests of our shareholders not to proceed " with the bear stearns agreement . he said jardine's doesn't " have a legal obligation " to complete the transaction . " we haven't been sued , " he said , adding " we could not be more comfortable in our legal position . " mr. powers declined to comment further on the legal position of jardine's . but one condition of its tender offer allows jardine strategic to withdraw if certain adverse changes have occurred since sept. in bear stearns's operations or results . " we continue to have the utmost respect for bear stearns's management , " mr. powers said . the hong kong stock market took a nose dive last monday , before it was closed for the week . mr. powers said that jardine's hadn't suffered any " significant problems as a result of the hong kong market fluctuation . we don't have significant exposure to that market . " in hong kong , many analysts had worried that jardine was making the bear stearns offer at the u.s. stock market's peak . given the wall street panic last week , jardine's decision to terminate the offer has been seen as prudent . " these are unsettled times , and a lot of money is involved , " said howard gorges , executive director of sun hung kai securities ltd. , a local brokerage . " as long as they have a good legal out , they're probably better off waiting for another opportunity . " jardine strategic's agreement to acquire a stake in bear stearns was one of several planned transactions that fell apart last week . as previously reported , carl c. icahn , chairman of trans world airlines inc. last week withdrew a proposal to take the carrier private . messrs . icahn and heyman both said they were scrapping their bids because of changed market conditions . corporate raider alan e. clore's fortunes appear to have plunged along with the market , with some of his highly leveraged holdings in disarray . in an apparent move to raise needed cash , the reclusive british - born financier sold his stake in his latest rumored takeover target , rorer group inc. , to rorer . the move appears to have been prompted by the fact that he also may lose the control he recently gained of oakland , calif. - based kaisertech ltd . in a securities and exchange commission filing earlier this week , mr. clore disclosed that the group he leads is in default to lenders who backed his million kaisertech investment . the kaisertech common shares he used as collateral have lost about in value in the past two weeks . according to the filing , mr. clore , now the company's chairman , is negotiating with certain parties the sale of all or some of his kaisertech position . the parties aren't named . he is also in discussions with lenders in an effort to obtain a waiver of the defaults . the filing , however , also said he was buying kaisertech shares , apparently while lenders were selling them , and doesn't make clear how that would affect the sale negotiations . a spokesman for kaisertech , the holding company for kaiser aluminum & chemical corp. , declined to comment on mr. clore's filing . but he noted that under the april agreement which granted the investor the chairman's spot and allowed him to name a majority of the board , the clore group's nominees must tender their resignations if the group's voting stake falls below prior to dec. . the disclosure of the lenders' stock sales indicates at least some of the loans mr. clore made to buy into kaisertech may have been called . moreover , a person familiar with the rorer transaction said mr. clore was eager to sell to cover margin calls related to losses in the stock market . neither mr. clore , who usually resides in geneva , nor his spokesmen in new york and paris could be reached for comment . fort washington , pa. - based rorer said mr. clore sold million shares , or about of the company's million shares outstanding , for a share , the price at the close of trading wednesday . rorer , a pharmaceutical concern , said mr. clore and his group sold all rorer holdings " other than shares pledged to a financial institution . " mr. clore also agreed not to acquire any rorer securities for years , the company said . the company's board approved the purchase at a special meeting wednesday night , the company said , and the negotiations were closed yesterday . it wasn't immediately clear whether mr. clore took a significant loss on the transaction ; he bought a - share block last year for a share , but a filing indicates he has since paid as much as a share for much smaller share purchases . mr. clore , son of a late british retail magnate , has held sizable stakes in revlon corp. and allied stores corp. , and also once wrested control of houston - based gulf resources & chemical corp. from incumbent management in . soon after a dissident shareholder group narrowly lost a proxy fight to oust him , mr. clore resigned as chairman and later sold his stake in the company . the lengthy pursuit included an unsuccessful proxy fight and a - a - share hostile bid that eventually was abandoned . ultimately , the frates group dropped its efforts and mr. clore acquired his position in return for a million cash infusion , agreed upon last november and effected in april of this year . as part of that infusion , kaisertech was formed as a holding company for kaiser aluminum . since then , kaisertech has announced plans to streamline operations and reduce debt by selling certain operations . it already has shed its foil - container business and its oil and gas operations , and is currently selling its european aluminum business . the company is also seeking buyers for its industrial and specialty chemicals operations . life technologies inc. expects to report earnings of cents a share , or " a little higher , " for the third quarter , john d. thompson , the company's vice president of finance , said . the maker of life - science research equipment had a net loss of in the year - ago period . " the two main lines that we sell are molecular- and cell - biology products , and both are doing really well world - wide , " mr. thompson said in an interview . " we're benefiting from the boom in biotechnology research . " mr. thompson agreed with analysts' earnings estimates of cents a share for the full year and said that the company's profit might even be " slightly higher than that . " for , life technologies' per - share earnings were cents . the official also said analysts' sales estimates of million for the third quarter and million to million for the year are " accurate . " last year , the company had sales of million . life technologies' performance is being improved by higher revenue and the sales of several unprofitable product lines , mr. thompson said . in july , the company sold its gibco u.s. microbiology unit to becton dickinson & co. at book value , or about million . life technologies doesn't expect to begin paying dividends because officials feel profit should be put back into the business and " our shareholders will benefit more from that , " mr. thompson said . about of the million shares outstanding in life technologies are held by dexter corp. , a specialty chemicals concern based in windsor locks , conn . one sweaty afternoon last week , opposing groups of suffering mothers demonstrated here . among other things , they demonstrated that peace and democracy won't be quick to come to nicaragua or central america . on one side of a cluttered side street , about members of the antigovernment mothers of political prisoners plodded along , chanting in favor of amnesty for the thousands of jailed opponents of nicaragua's sandinista regime . within minutes , they were intercepted by a rival group , mothers of the heroes and martyrs , sent out by the government . their children had died at the hands of some of today's political prisoners during the revolution , and in the subsequent war with the u.s. - backed contra rebels . for minutes , the two groups faced off from opposite sides of the street , as a handful of television crews and foreign journalists recorded the scene . but the protests rapidly broke up when the media headed home . a few of the women crossed the street , shared slices of watermelon with their opponents and began grumbling among themselves about the ever - increasing price of rice . it is a war where progress on crucial issues is achingly slow , a war in which the sandinistas' opponents appear outgunned and in which the reagan administration seems almost irrelevant . many people think the peace maneuverings will bring change in the region , including a winding down of the contra war and a tempering of managua's heavy - handedness . but that will take time , and they predict an extension of the early november deadline for compliance with the peace accords signed in august by the five central american presidents in guatemala . the reagan administration fears that such an extension would further impair its ability to win congressional backing for renewed aid for the contras . meanwhile , less than three weeks from the deadline , complex questions , from amnesty to cease - fires , are left unattended , while the sandinistas and their critics busy themselves battling it out on the propaganda front . consider the last few weeks of nicaragua's " national dialogue , " prescribed by the accords to bring central american governments and their internal opposition together . the first meeting lasted eight minutes , and the most recent , on thursday , eight hours . some observers suggest that is progress . but so far , the government and the opposition haven't even agreed on who should be at the talks . the opposition is so badly fragmented that the rival parties even disagree among themselves on who should be included . meanwhile , the national reconciliation commission , a four - person panel that is supposed to monitor the government's compliance with the peace accords and to mediate disputes , is wracked by debilitating disputes of its own . things got so bad at the commission's meeting on thursday that two delegates , erick ramirez , a highly regarded opposition politician , and rene nunez , a government official , almost came to blows , according to opposition and diplomatic sources . both sides are bashing each other in florid radio speeches and partisan newspaper articles . after the most recent meeting between the government and opposition , the sandinista newspaper , barricada , pronounced : " talks advance . " the same day's headline in the recently reopened opposition paper , la prensa : " talks completely stalled . " many nicaraguans and diplomats watch all this with a mixture of annoyance and resignation . " we are politically underdeveloped . " both sides are engaged in a game of appearances . " many observers believe the game means a crawl toward a wound - down war and scaled - back authoritarianism . " look , " says one latin american diplomat here . " don't expect u.s. - style democracy . don't expect the war to end suddenly . expect some space for the opposition , a kind of aperture , something of a free press . democracy in parenthesis . peace in quotation marks . " compliance with the peace plan would help legitimize the sandinistas' government and their revolution . it also would offer them a chance to end the bloody and unpopular contra war and allow breathing space for one of the region's sorriest economies . the plan says that by early november , the central american countries are to have cease - fires in effect , amnesties declared , political prisoners freed , and full freedom of the press and expression . as of now , those conditions will be almost impossible to meet by early november , not only for nicaragua but also el salvador , which remains a long way from any accommodation with its rebels . an extension would likely be another blow for faltering u.s. policy in central america . the reagan administration is said to fear that an extension could make it even more difficult to get congress's approval for million in new aid for the contras . such aid is widely denounced here by diplomats and even by many of the sandinistas' political enemies . " president reagan has taken the u.s. out of the game because his policy is seen by the world as being belligerent and largely irrational , " says a european diplomat who has been in central america for more than years . adds humberto luis guzman , a leading opposition politician : " if reagan goes ahead with this contra plan , he will be forever remembered as daniel ortega's greatest friend . he will give ortega all the excuses he needs to crack down " ( daniel ortega is nicaragua's president. ) . even now , the sandinistas have the upper hand . the moves were a public - relations triumph for the sandinistas . however fierce the two outlets' voices ( and radio catolica hasn't yet started up ) , they aren't likely to threaten the sandinistas' grip on power . that's largely because the sandinistas , though unpopular due to the crippled economy and the bitter toll of the war , remain nicaragua's only organized political force . the fractured opposition is widely regarded as incapable of uniting to form a coalition that could defeat the sandinistas in an election. ( the nicaraguan constitution , adopted in january and in large measure suspended shortly afterwards , calls for national elections in . ) . thus , many diplomats and opposition politicians believe the government is likely to take other halting steps toward a partial political opening , including a limited lifting of the state of emergency and special police powers it has used to jail opponents for the flimsiest reasons . it also will likely be forced to allow the catholic church to mediate with the contra leadership under the peace plan . president ortega continues to resist dialogue with the contras' political leaders , but the powerful church , mr. arias and other regional leaders are pressuring him to give in . " unfortunately , we've seen nothing but stunts . and they may be able to get away with a lot more of these publicity maneuvers without giving up much real ground . " two veteran eastern airlines pilots accused the carrier of repeatedly pressuring pilots to fly unsafe planes , charging that important cockpit equipment often goes unfixed because of management's determination to cut costs . " my nerves are shaken by the attitude which eastern airlines management is demonstrating toward air safety , " james sexton , one of the pilots , told the senate commerce committee during a hearing on whether the government should sharply increase its regulation of the airline industry . " very frankly , i predict disaster unless this `bottom - line , ' financially oriented group alters its course . " both mr. sexton , who has flown for the company for years , and donald mcclure , a - year veteran of eastern , testified that superiors had recently rebuked them for refusing to fly planes they considered unsafe . mr. mcclure said he was removed from an aug. flight for refusing to fly a plane with one of its navigation systems not working . eastern is a unit of houston - based texas air corp . stephen kolski , an eastern airlines vice president who also appeared before the panel , flatly denied the charges . " eastern airlines will never direct any employee to fly an airplane he believes is unsafe , " mr. kolski said . he contended that members of the air line pilots association , the union that represents commercial airline pilots , including eastern's , were trying to disrupt operations by refusing to fly " with no valid justifications . " in miami , robin matell , eastern's vice president for corporate communications , said that the airline wouldn't respond to specific allegations by messrs . sexton and mcclure . in composite trading on the american stock exchange , texas air's stock closed yesterday at a share , down . committee chairman ernest hollings ( d , s.c. ) and aviation subcommittee chairman wendell ford ( d , ky. ) clearly sided with the pilots . " your jobs are on the line here today , " sen. ford told the pilots , and " i don't believe you have any reason to tell us something that isn't true . " sen. hollings contended that some airlines are " sacrificing safety for profits , " and warned , " my big mouth will be going if they ( eastern ) take any punitive steps toward these pilots . " allan mcartor , head of the federal aviation administration , tried to steer a middle course between eastern labor and management . " we chase down every tip , every anonymous call to the safety hotline , " he said . he also said that the faa is working on developing a " better " minimum - equipment list , specifying which equipment is crucial to safety and thus must be in working order before an aircraft takes off and which equipment may be repaired later . mr. kolski of eastern contended that the broken equipment on that airline's planes consists only of items that aren't safety related . earlier this year , eastern paid a record million fine to settle charges that it violated maintenance requirements . yesterday's dispute involving eastern came at a hearing in which several committee members expressed frustration about the safety and service problems that occurred since airline deregulation . the panel also accused the transportation department of sluggishness in responding to the problems . but most members said they didn't want to go back to regulation of the airlines , with sen. hollings the big exception . " i'd love to go back , " he said . but it isn't clear whether sen. hollings is only seeking information , or whether he plans to introduce legislation after two remaining hearings scheduled for next month . but he told reporters later that he wants to require airlines to file quarterly and annual reports , stating whether they are complying with their maintenance programs . he said that the faa would periodically audit the reports , and that airlines that didn't report accurately would be fined . herbert mclure , associate director of the general accounting office , the congressional watchdog agency , also argued that new government regulation isn't needed to improve safety . meanwhile , james burnett , chairman of the national transportation safety board , said that while the accident rate has declined substantially in recent years , the air - traffic control system is stretched thin , raising the risk of mid - air collisions . ford motor co. thinks it finally has the answer to a common consumer complaint -- smelly cars . not just any smell , but the obnoxious musty odor of mold that forms in auto air conditioners , especially in humid areas . later this month , ford will start stocking its dealers with a spray product it has developed to destroy the mold growth without posing a toxic risk to car occupants . if the ford product is indeed the breakthrough that auto makers have been seeking in the war on mold , it could be the big break for alcide , a disinfectant that has attracted considerable skepticism since it was developed years ago . alcide is a critical ingredient in the ford mold - fighter . despite being touted for a broad range of health and industrial applications , it is just now getting its chance for widespread use . alcide corp. of norwalk , conn. , asserts that its only product kills on contact every sort of troublesome microbe -- bacterial , fungal or viral -- yet won't harm humans . yet the small company has had trouble persuading commercial concerns to test its product , partly because of its obscure origin and the hard - to - believe claims of what it can do . some disinfectant specialists say it appears too good to be true . " if such a biocide exists , i don't know about it , " says harriet burge , a university of michigan researcher . even some who have worked with alcide aren't certain about it . joe regenstein , a professor of food science at cornell university , has used alcide to extend the shelf life of commercial fish by killing contaminating microbes . mr. regenstein says alcide's major benefit is that it is safe to eat , although the theory of why that's so remains unproven . many companies studying the disinfectant are reluctant to discuss their projects for competitive reasons and for fear of causing undue concern about microbial problems . ford declined to talk about its product for almost a year , in part because it didn't want to publicize the odor problem . alcide is basically a formulation of chlorine dioxide . the gas is commonly known to kill microorganisms but is noxious in amounts large enough to be effective . the combination apparently keeps the gas inert until it comes in contact with a microbe . alcide says its research shows that certain molecules common to the cell surface of microbes -- and not present on normal human or animal cells -- trigger a chemical reaction releasing the gas , which then penetrates and destroys microbial cells . researchers elsewhere say this theory hasn't been proven . at present , alcide's commercial use is limited to the ford application and to treating infections in cow udders . concedes eliot siff , alcide's chief executive , " it's taking time to develop convincing evidence that it does what we say . " recent reports about experimental cancer vaccines have caused a stir in laboratories racing to perfect their own vaccines against colon and lung cancer , and melanoma , a skin cancer . in preliminary studies , scientists using bits of deactivated tumor cells have boosted the production of tumor - killing antibodies that are part of the body's immune system . one solution under study is to combine the vaccines with substances that naturally increase the immune system's sensitivity to the presence of a vaccine . researchers at memorial sloan - kettering cancer center in new york are encapsulating a vaccine against melanoma in water - filled , fatty membranes known as liposomes . in animal tests , the liposome vaccine produced " significantly " more antibodies than did a vaccine alone , says philip livingston , a sloan - kettering researcher . earlier this week , malcolm mitchell , a researcher at university of southern california reported that a vaccine inserted into an experimental substance called detox produced a strong antibody response in of patients tested , including partial remission of melanoma in two of the . detox , a combination of several bacterial and fatlike subtances , was developed by ribi immunochem research inc. of hamilton , mont . the trick to producing a cancer vaccine is identifying an antigen , part of a tumor cell that , when injected into patients , won't spread cancer but will stimulate antibodies . antigen - based vaccines figure to be safer , but are less potent , than using whole tumor cells deactivated by radiation . researchers at liposome co. of princeton , n.j. , believe their liposomes can boost any antigen - vaccine's immune response because liposomes naturally attract scavenging antibodies called macrophages . united airlines , which already has a temporary chairman and chief executive officer , now has a temporary chief financial officer and temporary vice president of taxes . a spokesman for the allegis corp. unit said william sider was named to the top finance spot as part of a streamlining of the finance department . the spokesman noted that mr. sider , who is also in charge of finance for hertz corp. , will return to the rental car company when a replacement is found for him at the airline . robert regan was named united vice president , taxes , but he , too , will return to hertz when a replacement is found at the airline . he served as hertz's vice president of taxes . the changes , which include the departure of four other finance department officers , come amid a study of united's financial department by coopers & lybrand , the big accounting firm . the arrangements sound familiar to others in the company's executive offices in elk grove village , ill . frank a. olson , who was named chairman and chief executive of allegis and chief executive of united last june , plans to return to hertz when a replacement is found for him . he , too , has kept his previous title at hertz . earlier this month , allegis agreed to sell its hertz unit to a group consisting of ford motor co. and hertz management . allegis is selling off its non - airline assets . as united's chief financial officer , mr. sider succeeds frank jarc , who last july was named one of five people to report directly to mr. olson . the spokesman said mr. jarc resigned " to pursue other interests . " mr. jarc was unavailable for comment . powered by blue - chip electrical and large - capitalization issues , tokyo share prices jumped to another record in heavy trading . london shares fell in response to yesterday's u.s. trade report and decline in new york stocks . shares also fell in frankfurt and singapore , rose in sydney and were mixed in hong kong . tokyo's nikkei average of stocks advanced to . volume was billion shares , compared with billion in the previous session . the first section index rose to . the advance was fueled by wall street's rebound tuesday and growing expectations of further tokyo price gains . sony advanced to yen ( ) a share , while pioneer electronic rose to . traders cited reports that consumer electric product sales may rise more than this year from last year . some large industrial issues yielded to late profit - taking , as nippon steel lost to and kawasaki steel edged down to . however , traders said , steel shares generally remained strong as expectations of a discount - rate increase faded because of a decline in japan's september wholesale price index . london's financial times - share index fell to . the - share index closed lower at . the gold mines index fell to . volume was million shares , compared with million tuesday . many analysts had expected a deficit of billion to billion . major banks fell after bank of england governor robin leigh - pemberton said tuesday night that the central bank probably would block attempts by overseas companies or non - financial institutions to take over major british banks . midland bank , a focus of takeover speculation , fell to pence ( ) a share . barclays bank was off at , national westminster bank fell to , and standard chartered was off at . frankfurt shares closed mostly lower after the west german central bank raised the interest rate on one - month security repurchase agreements by one - tenth of a point to , the second such increase in two weeks . the u.s. trade - deficit report , meanwhile , sent the dollar lower , which also turned investors against west german shares , brokers said . a lower dollar would diminish hopes of improved earnings for west german exporters . banking continued to be the weakest sector , with commerzbank off to marks ( ) a share . deutsche bank was down to , and dresdner bank slipped to . most sectors moved up except for gold - mining issues . hong kong prices closed mixed in heavy , volatile trading . big banking , property and utility shares made small gains , while many other commercial and industrial issues posted modest losses . singapore stocks remained weak in light trading as scattered selling made large blue - chip issues the biggest losers . shares rose in zurich , brussels and stockholm and fell in paris , milan and amsterdam . speculation that the belgian government will find a solution to a dispute between french - speaking and flemish - speaking factions helped boost brussels shares in active trading led by utility , financial and retail stocks . 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 equaling . the percentage change is since year - end . the advertising blitz for the huge british petroleum co. share offer doesn't actually promise profit and joy . that would be against the rules . but the subliminal hints seem awfully enticing . the music is upbeat . the faces are smiling . the fireworks are inspiring . the green and yellow colors of bp's shield logo are everywhere . " you get this fantastic folderol , " frank watts , an analyst for sheppards , a london stockbroker , says . " it just gets in the subconscious . " the folderol goes far beyond what would be acceptable under u.s. regulations . it makes bp an easy buy recommendation for london analysts , even though some of them think other major oil companies might make better long - term investments . this morning , a huge banner on the facade of britannic house , bp's london headquarters , will announce the price that u.k. individual investors will pay in the # billion ( billion ) bp share offering . trading of the shares , which are being sold by the british government , is scheduled to begin oct. . the bp offer's biggest attraction is its installment - payment structure . but the avalanche of publicity helps its chances of success . a british trade publication called marketing says consumer awareness of bp shares currently is higher than for any other advertised product -- beating out such household names as guinness , coca - cola and nescafe . about six million britons have requested share applications . it looks like another triumph for prime minister margaret thatcher's vision of a shareholding democracy . " the advertising is designed to create an atmosphere in which people feel it is the thing to do " to apply for shares , robert willott , a partner at the london accounting firm of spicer & pegler , says . such advertising increasingly is in vogue here . royal life holdings ltd. recently promoted a new unit trust , or mutual fund , as the " royal event " and ran britain's first national television advertisements for unit trusts . rivals grumbled , but the company drew more applicants than expected and raised # million . last year , thames television plc used ads on its london tv station to promote its share offering . eurotunnel , the anglo - french consortium that is planning a tunnel under the english channel , hired dewe rogerson ltd. , the agency orchestrating the bp offer , to promote its equity offering . tv ads already are on the air . critics say such campaigns contain plenty of potential for abuse . " i personally believe in a fair amount of promotional activity , " spicer & pegler's mr. willott says . but , he says , " i equally worry about joe public being invited to subscribe to what is an entirely new business with no track record . " in the u.s. , securities and exchange commission rules require companies to stick to the contents of propsectuses in any public discussions of an offering . lawyers usually advise companies to keep very quiet . here , the rules allow more leeway . in fact , it was the government that began making all the noise , as part of its effort to build share ownership and stamp out socialism . in international offerings -- or more of the bp shares are being sold overseas -- underwriters play by different rules in different countries . their refusals have continued even though an sec official said last year that non - u.s. companies can't remove themselves from the scope of u.s. regulations simply by banning contact with u.s. news organizations . as in the u.s. , offerings in britain can't be made without dull documents crammed with financial statements and carefully worded caveats . the difference lies in britain's use of ads to urge people to apply for shares . the ads aren't allowed to say much , but creative presentation , a big budget and a favorable press nonetheless drum up feverish interest . britain began honing its promotional skills with the offering of british telecommunications . last year's offering of british gas featured a # million advertising campaign centered on a mythical investor named sid . the british treasury says about of british adults now own shares , compared with eight years ago , and even labor party leaders are softening their opposition to wider share ownership . the budget for the bp campaign hasn't been disclosed . critics find the ads -- built around the slogan " be part of it " -- even cornier than the british gas effort . but the message apparently works . the government added a twist to the bp offer , giving investors who signed up for applications by last friday a guaranteed allotment of shares . by last week , million people had signed up , and tens of thousands more couldn't get through a lastminute switchboard jam . the frenzy of publicity almost obscures the fact that bp stock has been available on the open market for years . in this sale , the government is simply getting rid of its remaining stake in the oil company as well as offering # billion of new shares to raise capital for bp . homa motamen , an analyst at cibc securities europe ltd. , says shell transport & trading co. , the british arm of royal dutch/shell group , is a better buy on fundamentals , and many other analysts agree . most of them nonetheless recommend the bp offer because of its structure . the three - part payment plan allows the government to state a high nominal total price while still promising investors a big gain on the initial installment . " there is a huge potential investment marketplace , " anthony carlisle , dewe rogerson's managing director , says . but most investment advertising is complicated and puts off the public , he says . " privatizations have proved the point , " he says . " here is something that has been presented as simple , appropriate , good value , accessible and exciting . " but even the best doctor in what is the world's most technologically advanced health - care system with the most highly skilled doctors is limited by how much the medical profession as a whole knows , and for many procedures -- even for some of the most common ones -- it does not know enough . there will always be uncertainty , because medicine is an art as well as a science . doctors have different practice styles and patients have differing needs and expectations . however , the areas of uncertainty are larger than most of us realize -- and larger than they need to be . at a time of rapidly rising costs , too many common treatments lack adequate evaluation . and what we do know -- from the good assessments that are available and from studies of wide variations in utilization of care -- is that there is overuse of a number of services and underuse of others . indeed , arnold relman , editor of the new england journal of medicine , has said that in his opinion at least to of all medical procedures done even in good hospitals are not worthwhile . we need to know more about new and old technologies and we need better systems to turn tested research results into practice and remove that which is obsolete or harmful . there is usefulness in tests for some infections , or examination of a mole that has changed , or measurements of visual acuity . and we know that immunizations , procedures for setting fractures , penicillin for pneumococcal pneumonia , and eyeglasses are effective . yet when the rates of common operations such as tonsillectomies or tests such as x - rays , lab tests , or coronary angiography vary as much as - fold among regions , holding demographics constant , this is a signal that medical need is not the only factor driving the provision of medical services . we need to know more about the causes of variations and how much of a role is played by the way our health - care system is organized and financed . a good example of an operation done too frequently , generating excessive risk and costs , is the caesarean section . one out of four deliveries in the u.s. today is by caesarean , and the rate is increasing rapidly . there is no need , for example , with today's operating techniques , for many women who have had one caesarean to deliver their subsequent babies that way . yet of these operations are on women who have had previous sections and have not had an adequate trial labor , so clearly the message has not gotten through . in california , an effort to remove inappropriate incentives that might tilt borderline decisions calls for third - party payers to pay the same for a normal delivery as for a caesarean . underuse of effective treatments is also an important problem . there is underuse of prenatal care , which has a strong correlation with the birth of underweight babies . there is underuse of anti - hypertensive therapy , perhaps because high blood pressure is often symptom - free . underuse isn't confined to the uninsured ; people who have adequate health insurance but lack information about the benefits of some treatments may also underuse services . which rates and which procedures are the ideal ones ? is there too much care or too little ? until recently , evidence was available only by inference . a rand corp. study last year , for example , found of all hospital admissions to be inappropriate and to have been avoidable using ambulatory surgery . both inappropriate use as well as appropriate care in the wrong setting have serious risk as well as cost implications . such studies begin to clarify the problems and point the way to reducing uncertainty , but they do not measure the impact on actual outcomes . studies of outcomes -- methodically conducted and disseminated to the medical community -- can produce major shifts in practice styles . for example , there is a new study by john wennberg of dartmouth medical school of the most common operation for men over age , prostatectomy for enlarged prostate . the study used the medicare claims data for the state of maine over a - year period , beginning in . when urologists in maine were told of these results , the number of prostatectomies in that state dropped . without information from such studies , informed - consent forms for some of the most common operations do not reflect full knowledge about their outcomes . a - year - old with moderate symptoms about to undergo a prostatectomy might opt instead for watchful waiting if he knew the range of possible outcomes . the need is obvious for similar studies on procedures such as hysterectomies and mastectomies . is the system working well , providing care for appropriate reasons ? the long - term studies that could provide the answers are not being done even though we know how to do them . researchers say that the relatively small amounts of money devoted to this kind of research have never been adequate . perhaps the recognition of the growing need to reallocate health care resources will help channel money and top research talent in this direction . the real challenge , however , is to provide the highest - quality care that our creativity and resources will allow . we must put the necessary support into routinely conducting outcome - oriented evaluations of many technologies , operations and diagnostic procedures . mr. ray , former republican governor of iowa , and mr. rogers , former democratic representative from florida , are co - chairmen of the private national leadership commission on health care . as controversy continues over drug testing of workers , some employers are going one step further : they are bringing in drug - sniffing dogs . long used on offshore - drilling platforms and other dangerous job sites , police - style crackdowns are spreading to other industrial sites and are beginning to reach into white - collar workplaces . " when we first got in this business in , we never had a client talk to us about bringing in dogs , " says william l. taylor , president of professional law enforcement , a dayton , ohio - based security - consulting firm . now , he says , to of his clients are considering using dogs . advocates consider the method to be less invasive than urinalysis -- and more reliable . they say that dogs can detect drugs from a distance , without the need to rummage through desk drawers or personal belongings . and unlike urine tests , dogs can uncover the stashes of drug dealers . " it sends a message to the employees that we don't want narcotics in here . " mr. irby adds : " in a large plant or business , you just couldn't find all the hiding places . " but critics of the dog brigade say the method invades workers' privacy unnecessarily , and that in an office where business is conducted on personal trust , such search and seizure methods can drain morale . " the rambo approach in business simply does not work , " says james depoe , president of focus eap inc. , an employee - assistance firm in stafford , texas . " how do you justify the cost of dogs and detectives when we know the educational programs are good and work ? " adds jim clemons , medical director of republic health corp. , a dallas healthcare provider : " that's a police - state - type approach to things that begins to create an atmosphere of fear and paranoia among employees . " because the proportion of office workers involved in drug trafficking invariably grows in economic downturns , it isn't surprising that half the nation's canine - detective agencies specializing in drug investigations are in oil - busted texas . one such firm is security associates international in houston , the largest canine agency in the country . " in the last three years our clientele ( for drug - sniffing dogs ) has increased more than , " says fredrick h. newman , president of security associates . " in , we were servicing to commercial clients . now it's well over clients . " but for others , surgical strikes aren't enough . that apparently was the case last month , when exxon corp. subjected white - collar workers in houston to a massive search by six teams of specially trained dogs , mostly labrador retrievers . the animals were led through the four buildings of exxon's four - building brookhollow office complex , north of downtown houston , focusing primarily on the company's credit - card operations . the parking lots were also covered . according to an exxon spokesman , of the employees searched , were fired -- mostly for marijuana possession . widespread searches of white - collar employees are more common where employees require a high level of safety awareness , as at the south texas nuclear project in baytown , texas , now nearing completion by houston lighting & power co . over the past four years , the company says , more than a half - dozen searches were aimed at construction workers , as well as at engineers and office managers . some people were fired as a result . a burlington northern railroad spokesman says the company recently lined up a group of employees after a - hour shift so a dog could sniff their valises . one woman engineer was asked to open her case for inspection ; it turned up only birth - control pills and other personal medications , according to the burlington spokesman . critics say there's a fine line between the corporate right to a drug - free workplace and the employee's right to privacy -- and dignity . " if they sniff your car that's one thing , " says don horn , executive secretary of the afl - cio . " if they sniff your pants leg , that's another . " labor and civil - rights groups question the legality as well as the propriety of canine drug sweeps . bruce griffiths , a lawyer for ther american civil liberties union in houston , has doubts about the " probable cause " of drug use that exxon cited to defend its massive white - collar search . " can they have probable cause to search people ? " mr. griffiths asks . he and others also denounce the practice of having employees sign waivers on the day of a search . exxon's waivers caution employees that they " may be subject to discipline " upon refusal to sign . an exxon spokesman declines comment . when jim hale , publisher of the kansas city star , found out drug - sniffing dogs react the same way to cough syrup as they do to pot , he abandoned plans last year to search the newsroom . " we were committed not to open any desks , " he says . and the outraged reaction of his staff eased his decision to back down . " it was causing so much grief , " he says , " we didn't do it . " guinness peat group plc conceded yesterday that equiticorp holdings ltd. has won effective control of the merchant bank . in a letter to shareholders , guinness peat reiterated its contention that the takeover offer of pence ( ) a share from equiticorp , a new zealand financial - services group , was " inadequate . " but equiticorp's stake was big enough to prevent other potential bidders from entering the fray and boosting the price , said michael kerr - dineen , guinness peat's managing director . the merchant bank's directors agreed to tender some of their shares to equiticorp , which said on monday that it had boosted its stake in guinness peat to . the directors gave shareholders some non - commital advice in the letter . " taking all factors into account , the board considers that shareholders should realize their investment , either by selling shares in the market or by accepting equiticorp's offer , unless they wish to remain shareholders in guinness peat under equiticorp's effective control in the hope of securing greater long - term value , " the letter advised . he indicated then that equiticorp wasn't likely to add to its stake through market purchases and instead would wait for acceptances of its offer , which closes saturday , from guinness peat shareholders . guinness peat's directors intend to continue to work under equiticorp and have retained at least some of their shares in the merchant bank . mr. kerr - dineen said that was a vote of confidence in the outlook for the firm . " life with equiticorp is perfectly livable , " he said . " i'm putting my money where my mouth is , " mr. kerr - dineen said . " i'm staying in there . " meanwhile , british publisher robert maxwell disclosed yesterday that he had boosted his stake in guinness peat to . under the new rules , the bank of england can block a purchaser from acquiring more than a stake in a bank if it decides the buyer isn't " fit and proper . " mr. kerr - dineen conceded yesterday that shareholders face a risk that the bank of england could force equiticorp to reduce its stake under the new rule , but he said that risk " is a low one . " as the senate judiciary committee wraps up hearings on judge robert bork , the supreme court nomination , once viewed as likely to be approved by the senate , has lost momentum , to the dismay of the nominee . the apparent loss of ground during days of hearings prompted judge bork to express concern to the white house . white house officials say the nominee met with top reagan aides saturday and questioned the effectiveness of the administration's campaign to secure his confirmation . separately , sen. alan cranston of california , the assistant democratic leader , said yesterday , " i think he's licked . " he said his private survey of senators shows against judge bork , in favor and undecided . other senators , however , believe sen. cranston is exaggerating the numbers , and that the nomination is still a tossup . the concern expressed by the - year - old judge bork at the white house wasn't focused on a specific head count . but the hearings have created an atmosphere in which it would be respectable to vote against judge bork . this is especially important for southern democrats and moderate republicans , whose votes will likely decide the fight . white house aides insist they reassured judge bork at the meeting saturday that he has the president's full support and that the campaign is on track . " when he left , " says a senior aide , " he had a better feeling that things were being handled , probably better than he thought . " nevertheless , white house officials plan to launch a tough , new drive to improve the chances of confirmation , and they say president reagan himself will make more direct attacks on the foes of the appointment . the new drive will focus on judge bork as a champion of " law and order , " an issue aides think has been lost in the senate hearings . the white house also will portray opposition to judge bork as an effort by narrowly focused " special interest groups " to undermine a supreme court candidate who isn't favorable to their causes . a meeting has been scheduled today in the white house with bork supporters , at which mr. reagan will make public remarks . and white house aides are scheduling a speech later in the week to address the bork nomination again . judge bork has also been meeting with senators in recent days . and white house aides say president reagan will shortly begin calling senators . the white house offensive is aimed at trying to counter an atmosphere that has turned decidedly against judge bork . some witnesses at the senate hearings , most of them lawyers or law professors , have testified for or against judge bork . the numbers were about evenly divided and included a few forceful witnesses debating judge bork's constitutional views on both sides . but the witnesses apparently failed to alleviate concerns that remained about judge bork's views after he testified for five days at the start of the hearings . among questions left unresolved by the hearings are whether judge bork would uphold a constitutional right to privacy , whether he would respect supreme court precedents with which he disagrees and how vigorously he would apply the th amendment guarantee of " equal protection of the laws . " the hearings " raised some concerns , " said sen. richard shelby ( d. , ala. ) , who added that he hasn't decided how to vote . " there's trouble " for judge bork among southern democrats , sen. shelby said . " we don't want to revisit a lot of issues . " another southerner , sen. david pryor ( d. , ark. ) , who also hasn't declared how he will vote , said , " i don't feel the strength in the senate that i felt for him days ago . " before the fight in the full senate , however , the - member judiciary committee must vote , probably next week , and procedural maneuvering has begun . committee democrats have said they will let the nomination go to the full senate even if the committee votes to reject judge bork . but sen. robert byrd of west virginia , the majority leader and a committee member , said he would prefer to vote only on sending the nomination to the senate without a recommendation , an approach proposed more than a week ago by white house lobbyists . sen. joseph biden ( d. , del. ) , committee chairman , said he is " undecided " about how to conduct the voting . he said it includes some republicans and some southern democrats who have told him they are likely to vote against . white house aides dispute the survey and say there are at least undecided senators . jeffrey h. birmbaum contributed to this article . personal - care boarding homes for the elderly and mentally ill are growing explosively , and so are the issues surrounding them . the homes , which offer residents meals and assistance with things like hygiene , fill a void left by the lack of affordable housing . as opposed to so - called group homes for the mentally ill , personal - care boarding homes aren't operated or staffed by mental - health professionals . for example , in pennsylvania , a state considered slightly above average in its care of the mentally ill , a person need only be at least years old and of " good character " to be licensed to operate a personal - care boarding home . staff members need only be year olds . the number of licensed personal - care homes in pennsylvania has nearly doubled in the last four years to from . but more than unlicensed homes also operate in pennsylvania ; the state doesn't license or inspect homes with fewer than four unrelated boarders . some states don't even license or inspect such homes , whatever their size . pennsylvania began licensing in , prompted by safety concerns . but since that year , people have died in fires in the state's licensed personal - care homes . at one licensed home , janice boyd , a pittsburgh - based mental - health professional , watched the staff tease a forgetful old man by insisting he had already had a second doughnut when he hadn't . in july , the operator of one personal - care home was charged with criminal homicide in the death of a former resident . the autopsy of the woman , who died in , revealed several rib fractures and cuts on the face and legs . the operator had received four one - year licenses from the state , from to . prior to the criminal charges against her , the operator had agreed to close down after being charged with abusing residents . " boarding homes are the th century equivalent of dickens's ' bleak house , ' " one pennsylvania nurse testified at state hearings on mental - health services . pennsylvania now is reviewing its boarding - home regulations and will seek to strengthen them , a process that could take two years . likewise , other states including colorado , ohio and kentucky have recently considered strengthening their regulations . but " all the regulations in the world won't make any difference if you don't have the inspectors , " says charles peters , director of the allegheny county department of mental health/mental retardation . seven inspectors are responsible for homes in the counties of western pennsylvania -- a territory that stretches from new york to west virginia . they are supposed to inspect each home at least once a year ; to keep on schedule they notify an operator in advance of an inspection . still , they are several months behind and fall even further behind when they find troubled homes , which need more frequent review . " all you need is a couple of homes in court to tie up inspectors , " says tony elk , a mental - health caseworker . so far , the region has between and personal - care homes under cease and desist orders ; the orders were issued after inspectors found such things as rat poisons among dishes and wheelchair - bound residents housed on the third floor . but ms. boyd , the mental - health professional , finds that residents often don't want to move even when their conditions are deplorable . at one rat - infested home , a mentally ill resident tells ms. boyd she is content there because she can walk to a nearby store and buy a chocolate milkshake . says ms. boyd : " they don't expect any better for themselves . " community facilities for the mentally ill are few and overburdened goal of s loses ground because of funding cuts , lack of local support daily life in a ' group home ' " -- wsj sept. , ) . shin - etsu chemical co. , a leading petrochemical producer , said it will spend more than million to increase u.s. output , highlighting the recent growth in demand for plastic . shintech inc. , the u.s. unit of tokyo - based shin - etsu , has already begun construction at its freeport , texas , facility to expand production of polyvinylchloride resins by million pounds annually by october from the current capacity of one billion pounds . another million pounds of capacity is expected to be added through technological improvements and greater efficiency . the size of the expansion is an enormous one even by the high - volume standards of the petrochemical industry . " one hundred million dollars is a whale of a lot of money for pvc plants , " said john jenkins , managing partner of pace consulting of houston , which advises refining and petrochemical companies . the robustness of the u.s. economy has pushed pvc demand close to the industry's capacity limits . auto makers are also big buyers of pvc , turning it into the many plastic parts in cars . manufactured both as a final product and as a raw material , pvc is used in a wide and growing array of consumer products . shintech has been expanding capacity ever since operations began in with annual output of million pounds , but previously the company was reluctant to disclose the cost of its expansions . this time , shintech wanted to signal to its customers that it will " stay competitive in the u.s. market " and " will be the long - standing pvc supplier , " said masaki miyajima , assistant to the president . total u.s. capacity is estimated at billion pounds , and shintech's major competitors include b.f. goodrich co. , borden inc. and occidental petroleum corp. industry figures currently put goodrich as the largest maker , with billion pounds , but shintech's freeport facility is the single largest in the u.s . pvc makers experienced a glut several years ago until demand caught up . but with new capacity coming on stream , the industry worries about the possibility of another oversupply developing within a few years . " there is some question if we're going to have a boom or bust cycle in this industry , " mr. jenkins said . but mr. miyajima said of the freeport facility's current output is sold in the u.s . " these days domestic markets are so tight we cannot afford to allocate to foreign markets , " he said . north american gold stocks , with their lofty valuations , are a bit like japanese stocks . conservative investors don't understand them but they somehow continue to enrich their owners . t. boone pickens' attempted raid on newmont mining and its newmont gold unit has sparked mild takeover speculation about gold producers , but gold bulls say it's a sideshow . they think the real drama for gold stocks is the resurgence of inflation fears . a quest for inflation hedges could keep gold shares climbing for six months or more , some analysts say . the trick , they add , will be to dump the stocks before worries about recession , gold gluts and other sensible concerns take over . " in the late part of the economic cycle , if you're nervous about inflation , you go to gold , " says james kennedy , a money manager at t. rowe price associates . gold shares currently represent of price's new era fund . the fund has recently been buying more of both newmont stocks and lac minerals , mr. kennedy says > . gold prices hit records in when output was more than industrial demand , he says . he thinks fear -- of inflation , third world political turmoil and a u.s. stock market correction -- will push gold erratically higher in . big north american gold producers remain the top choice of many gold bulls . unlike south african producers , they have huge gold reserves in politically safe places , traders say . and their shares are more liquid than those of smaller gold producers , thus attracting traders seeking to profit from a rush to hard assets . the nevada gold rush -- one of the world's prime gold plays , analysts say -- has heightened the speculative fever . investors anticipate bonanza discoveries that aren't reflected in gold share prices , says john tumazos , an oppenheimer analyst . newmont gold , echo bay and american barrick are currently testing nevada gold properties while placer has new projects in papua new guinea , analysts say . some traders doubt that more gold companies will attract raiders . newmont mining is a special case , they say ; it has liquid investments that can be sold to help pay restructuring or takeover costs . most gold producers don't have easily salable assets that attract raiders , says pete ingersoll , a shearson lehman brothers analyst . monday , homestake mining said it would sell of its australian gold unit to investors . gold producers' shares are so costly that their cash flow wouldn't suffice to service debt taken on to acquire them , says oppenheimer's mr. tumazos . but he thinks some gold concerns might attract cash - rich acquirers . newmont's case indicates " any gold company in the process of drilling to prove a large bonanza could be vulnerable , " he says . lac minerals , whose stock has been battered because of a lawsuit over the hemlo properties in ontario , might also be vulnerable , analysts add . unfortunately , commonly used valuation methods for north american gold shares are complicated . in setting price targets for gold stocks , many analysts assign present values to producers' projected cash flow from annual output in and beyond . some analysts today value future output at to an ounce , on the belief that most mines will operate for many years . most gold shares don't trade at quite that level yet , so such analysts still regard some gold stocks as bargains . such valuations don't consider production costs or just how long mines might last , adds patrick mars , an analyst at alfred bunting in toronto . price's mr. kennedy is wary of the loftier valuations , but he thinks some stocks have a way to go . investors currently pay the equivalent of an ounce for newmont gold's future output and an ounce for echo bay's , he estimates . lac minerals' output , even without the hemlo property , and pioneer's are valued at an ounce , he figures . investors' tab for tomorrow's gold output has risen fast . newmont gold went public in at a - an - ounce valuation , says shearson's mr. ingersoll . but bulls aren't ready to sell . " we think gold is going higher , " says price's mr. kennedy . national theme productions , the nation's biggest halloween - costume retailer , used to be scared at the prospect of november . with nearly all its sales tied to halloween , it could only look forward to this month's annual post - mortem of costume trends , conducted to prepare managers for a selling season months away . but this year the closely held san diego company is taking another holiday for a market . at counters in about a quarter of the sears , j.c. penney's and montgomery ward stores where it peddles halloween costumes , national theme is selling crystal figurines and jewelry to christmas shoppers . it may then keep of those outlets open year - round . and it is thinking about expanding further into valentine's day and easter gifts . national theme did about million of business this halloween , which it figures accounts for about of the whole u.s. market . but like many small companies that have created their own markets in a narrow , seasonal field , national theme has found itself locked in , its growth restricted and its hiring and training programs strained . " we need to build a bridge to other seasons , " says the company's president , w. paul sullivan , who got into the halloween business selling makeup and costume accessories when he ran a santa barbara , calif. , pharmacy . " we already have the locations in the department stores for halloween , and we have temporary workers in place . we don't want to have to renew the recruiting effort every season . " under the current structure , swings in employment during the year are drastic and costly . most of the year , national theme operates with a bare - bones staff of about employees , working on marketing strategies or designing costumes for the coming season . it subcontracts manufacturing work to san diego and tijuana garment makers . by summer , the company is busy recruiting its regional and field managers , often looking to purdue , brigham young and other universities for senior management interns . the interns , many of whom return each year for more part - time work , earn as much as for the season . national theme was formed in with the merger of two competing southern california companies selling costumes at sears and penney's . it has added about locations a year since then in the u.s. and canada , while also working to improve its positioning within stores where it already operates . department stores themselves handle advertising , eliminating one hefty cost for national theme . national theme claims to have turned a profit each year since , when it had revenue of about million . executives figure the company's popularity with department stores reflects a lack of desire by retailers to invest in such a narrow market themselves -- especially with christmas fast approaching . still , the stores are lured by growing halloween business ; at its busiest locations , national theme sells as much as a square foot on an annualized basis . it pays department stores a percentage of revenues as rent . the move into crystal started when a sears concessionaire got out of its trinket - selling business , and the department store asked national theme to take over . " selling is our forte . it doesn't really matter if you're selling halloween costumes or crystal , " says national theme chairman paul thomas . national theme acknowledges , though , that selling crystal before christmas is much more competitive , with specialty gift shops like hallmark already having a stranglehold on trinket traffic . " crystal is less of a must - buy than halloween costumes , " says john poletto , vice president of operations for national theme's crystal division . " but we already have a sales staff in place , and very good locations in the host stores that we're keeping from halloween . " national theme , which has found that its hottest halloween costumes are the ones it designs itself , also hopes to apply that lesson to the crystal business . next year it will add its own crystal and pewter line to the items on this year's shelves . company executives expect million in crystal sales over the next two months . and by expanding the flow of revenue over other holidays , national theme will gain a big advantage in financing . " by september , we're on a negative cash flow , and the bank asks , ' how are you doing ? ' . i say lousy , so far , " jokes national theme's president , mr. sullivan . " with this business , you have to be in it for the long haul . " asked to edit the entry in the annual " best american short stories " series , fiction writer mark helprin decided to shake things up . he has . in his bracing , witty , two - fisted introduction to the stories he has chosen for this collection ( houghton mifflin , pages , ) , mr. helprin lays out the current literary scene with combative honesty . in the university , he says , literature has become hostage to those who must politicize it into questions of " race , sex , and economics " because they have not the soul to apprehend its surpassing truths. ( it is now presupposed in departments of english , for example , that a black woman " is unable to find anything of lasting value in shakespeare " because he was a " white male " ) . the literary environment has been further devastated by the seeping poison of minimalists , purveyors of spare , uninvolved fiction that documents the banality and pointlessness of existence . according to mr. helprin , the minimalists " appear to start from the premise that the world has unjustly offended their innate virtue and forced them to become trenchant , impassive observers of its universal offensiveness . " they have created instead an airless , " anaerobic " fiction that expresses nothing but their own spiritual exhaustion . mr. helprin also healthfully excoriates our writing - school fiction factories ( " it is simply not possible to teach someone to write " ) ; the sorry condition of the publishing industry ( " publishers put out the most astonishing junk with the excuse that the public wants it , and the public receives the junk with the excuse that it is what the publishers provide " ) ; and the compromised state of much current reviewing ( " there is . . . an incredible traffic in favors , and accounts are kept as if in ledgers " ) . but even while surveying this blighted landscape , mr. helprin unabashedly begins to reclaim some of the hallowed ground that literature once occupied . nowhere do truth and beauty " run together with such complexity and power as in the gracefully written word , " he declares , and there is much in this collection that pulls us toward that sacred space where the power of the word is wielded with purpose , effect and consequence . of course , even mr. helprin's writers must confront , at least to some extent , the minimalist world of breakup , dissolution , disappointment , confusion and loss . but for the most part , mr. helprin's authors do not hide behind minimalist affectlessness . for example , the story of a dissolving marriage , richard bausch's " police dreams , " is unapologetically weighted with the anxiety and humiliation a husband feels when his wife coarsely and selfishly rejects him . in " wonderland , " by c.s. godshalk , a single mother temporarily abandons her two sons . the older boy struggles to keep the " family " together . he is at once enraged and baffled , determined to be tough but also feeling helpless and hurt . he is presented by the author with dry - eyed compassion . not all the stories are about intense suffering of this kind . in lucy honig's " no friends , all strangers , " the daily subway ride that the protagonist must take becomes a framework that serves to unite the story's fragmented perceptions . sometimes an almost joycean moment of insight or release redeems a tale of anguish or regret . in mary ann taylor - hall's " banana boats , " an old woman moves toward self - knowledge as she confronts the gradual failure that has marked her life . but then he experiences a brush with danger that seems to set him free . in the harshly muscular " helping , " by robert stone , yet another vietnam vet pushes himself to an alcoholic bottom from which he begins to perceive his need for forgiveness . some of the writers unfold their stories in flashback . the act of reconstructing the past can supply an aesthetic depth unavailable in the infantile , faceless presentness of minimalism . by telling his amusing adolescent tale , " smorgasbord , " from an adult viewpoint , tobias wolff incorporates a level of subtle understanding that locates loss of innocence in letting " the light go out " of feeling , passion and commitment . in marjorie sandor's evocatively written " still life , " a woman sifting through old photographs explores the essence of her romantic , full - spirited but somehow mysterious " tante rose . " if not every story in the collection can lay claim to distinction ( at stories a year , stories a century , this would be impossible under any circumstances ) , it is clear that on the whole mr. helprin's selection has enabled us to enjoy literature in refreshing ways , both new and old . ms. ianonne , managing editor of academic questions , teaches in the gallatin division of new york university . if japan gave a prize for the most intimidating document of the year , " japanese technology " would be an odds - on favorite to win . at pages , it is the size of a city telephone book . the information is highly technical and the print is small . the price is a wallet - emptying yen , or about . the report offers a guided tour of the japanese science establishment's vision of the future . it outlines japan's technology strategy , year - by - year , between and . it is a consensus document , prepared by japanese experts and submitted to the science and technology agency . the findings were developed using the so - called " delphi " method . experts from academia , government and industry met numerous times in committees and subcommittees . they made their best guesses about future directions in technology . their judgments were tabulated and weighted for importance , then designated as technology " targets . " from a corporate r&d point of view , this " target " means an ideal research and development target date . so once something is decided on this level of survey , " it gets down to corporate r&d levels as a very probable , or targetable date , " says noboru makino , chairman of mitsubishi research institute , a private think tank . this is the fourth survey of this kind , the first having been done in . by and large , mr. makino says , the predictions have been highly accurate . a professor at the tokyo institute of technology reviewed the past data and said that in electronics , the previous surveys had been more than accurate . here is a sampling of results from the latest study . the united mine workers of america said it settled with a.t. massey coal co. a four - year labor dispute marked by lawsuits and violent clashes . the agreement calls for massey to pay about million in settlements and back wages to strikers it had fired . settlements will include some back pay and a new job , or severance pay . for its part , the umw agreed to pay undisclosed sums for damages caused by strikers . the union also will pay undisclosed sums as a compromise to a judgment against the union involving a dispute with massey's marrowbone development corp . the original judgment specified that the union pay million . the settlement was welcomed as a chance to end years of disputes , not as a victory for either side . " this settlement is a compromise and underscores the fact that in a dispute of this magnitude , there are no clear winners , " said richard l. trumka , the union's president . paul barbery , counsel for massey in richmond , va. , said the company is happy with the settlement . troubles between the union and massey began in when the umw argued that massey's mines should be considered a single company and follow one union contract . massey maintained the company would not negotiate on behalf of its subsidiaries . the national labor relations board upheld the umw's position . the settlement also includes new collective bargaining agreements for union - represented employees at massey operations , located primarily in west virginia and eastern kentucky . the umw's selective strikes against massey and all remaining lawsuits and charges pending before the nlrb will be dropped , the union said . remember that prediction about small investors returning to stocks once the election was past ? unfortunately for the over - the - counter market , it's still just a prediction . on day of the post - election market , the nasdaq composite index of otc stocks slid to on lackluster volume of million shares . so far this month , the average daily nasdaq volume is making it the slowest month of the year , running slightly behind september's average of million shares daily . action was dominated by the market's big high - technology stocks , with mci communications and seagate technology slipping and apple computer , intel and microsoft gaining modestly . in addition , th century industries and some other insurance issues moved on news that a ballot initiative to require sharp insurance - rate cuts in california , particularly on auto insurance , was approved in tuesday's voting . thomas peltier , head of otc trading at thomson mckinnon securities , said : " everything was already in the market that expected a bush victory , so nothing really changed today . it was really a non - event . " hopes for a burst of investor interest after the election were " just wishful thinking , " said richard bruno , head of otc trading at painewebber inc. , new york . among insurance stocks , th century industries was down as much as / before closing / higher at / . about shares changed hands , the sixth highest volume total on nasdaq yesterday . mercury general finished at / , down / , safeco closed at / , down / , and ohio casualty was unchanged at / . among some of nasdaq's biggest property/casualty insurance issues , st. paul cos. slipped / to , farmers group was unchanged at / and kemper in heavy trading fell / to . international game technology , a highflyer whose rise has attracted the attention of short sellers , fell / to . the reno , nev. , company makes slot machines and other games . -- local federal savings & loan association soared / to , a rise , to easily lead the nasdaq advancers list . the oklahoma city thrift got an unsolicited - a - share acquisition proposal from miles c. collier of collier enterprises , which is based in naples , fla . local federal said its board will meet to discuss the proposal . -- palfed rose / to . japanese issues traded on nasdaq moved higher , in response to a late pickup in activity in the tokyo stock market before u.s. markets opened . japan air lines , which rose / on tuesday in response to a first - half earnings rise , jumped another to / bid . nissan motor rose / to / bid , kirin brewery climbed / to bid , canon rose / to / , nec added / to and ito - yokado rose / to / . c - tec slipped / to / . a management group withdrew a - a - share proposal to acquire the telephone - services company . cellular telephone issues rose after moran & associates of greenwich , conn. , repeated buy recommendations . among others , mccaw cellular communications class a rose / to , associated communications class a gained / to , u s west newvector group added / to / and lin broadcasting class b added / to / . overall , there were advancing issues on about million shares , but decliners on million shares . of the nasdaq volume of million shares , million changed hands on the national market system , where two - thirds , and the generally biggest , of nasdaq's stocks trade . the soviet union will import more corn this year than initially thought , and the u.s. , despite the drought , will have more corn to export than estimated two months ago , the agriculture department predicted . department analysts sharply boosted their estimate of soviet imports of corn and other coarse grains for the marketing year that began july . at the same time , they said the drought damage to the u.s. corn and soybean crops won't be quite as bad as feared . the revisions in the soviet grain outlook and monthly crop forecasts augur well for u.s. farmers and grain traders . the soviets have been on a corn - buying spree in recent months as part of their drive to increase red - meat production , and analysts don't foresee any immediate letup . the u.s. and argentina , which both are major corn exporters , are likely to benefit most from the kremlin's efforts to improve the soviet diet . department analysts also lowered their estimate of the soviet grain crop , primarily because of disappointing yields in the so - called ukraine breadbasket . they predicted a harvest of million metric tons , down five million from the october forecast . that would be the largest amount since the - marketing year , according to department analysts . the soviets already have bought eight million metric tons of corn this year , capitalizing on attractively low corn prices on the world market . soviet imports of wheat , on the other hand , probably won't meet initial expectations . analysts lowered their estimate to million metric tons , partly because soviet purchases have been lagging behind their customary pace . the analysts boosted their estimate of overall soviet grain imports to million metric tons from million last month . it includes one million metric tons of rice and miscellaneous grains . on the home front , the agriculture department again revised upward its forecasts of corn and soybean production . farmers are expected to harvest billion bushels of corn this year , less than last year . but the new estimate was higher than the october forecast of billion bushels . moreover , analysts initially had predicted only billion bushels . soybean production was forecast at billion bushels , up from last month's forecast , but still lower than last year's harvest . the sorghum - grain estimate was also boosted by , to million bushels . cotton production was forecast at billion bales , up from last year , while peanut production was pegged at billion pounds , up . analysts forecast a rise in the flue - cured tobacco crop , to million pounds . the burley tobacco crop was expected to total million pounds , up from last year . nasdaq has been losing some of its traditional dominance over the new - issues market . almost all new issues of common stock used to begin their trading lives on the over - the - counter market ; the nasdaq otc system launched the stocks of genentech inc. , apple computer inc. , mci communications corp. and thousands of other established companies. ( some , such as genentech , later moved to the new york stock exchange ; others , such as apple and mci , have stayed with nasdaq. ) . several years ago , nasdaq was launching of all new stock issues , but the percentage has been slowly dropping . so far in , nasdaq has an share of the action -- still well ahead of the big board's and the american stock exchange's share . moreover , in dollar value , nasdaq has fallen behind the big board in the new - issue game the past two years . nasdaq has had billion of new offerings in that period , while the big board has launched billion . the amex trails with billion , or in dollar terms . joseph r. hardiman , president of the national association of securities dealers , which runs nasdaq , says he is concerned about stemming the market's new - issue slippage . mr. blum , he says , is responsible for " increasing understanding of nasdaq " among wall street corporate finance and syndicate departments , particularly underwriters of new issues . mr. blum , a familiar face in wall street syndicate departments , had been an administrative managing director at l.f. rothschild & co . mr. blum concedes that some companies perceive a " mystique " in being a part of the big board and says part of his job is to sell companies on nasdaq's own prestige . nasdaq officials say they're amazed when officials of nasdaq companies say they would get a thrill out of the " opening day " ceremony that the big board holds for a new issue , complete with free souvenirs and a picture - taking session with the exchange's chairman . " even loyal companies get lured with that stuff , " one nasdaq official says with a sigh . for his part , mr. blum says : " i have always been a believer in the unlisted market . as an investment banker , it just seemed it made the most sense for me . " the exchanges try to lure companies by emphasizing nasdaq's continuing battle to change many states' blue - sky laws -- which in effect require nasdaq securities issuers , but not exchange issuers , to register their offerings with the state before they can be sold there . they're also having some success in luring bigger companies that in the past would have started out on nasdaq . but mr. blum says he'll be " carrying the flag of the nasd " and emphasizing the advantages of nasdaq's multiple marketmaker system over the exchanges' single - firm specialist system . josiah o. low iii , senior vice president of donaldson , lufkin & jenrette's investment banking unit , says the exchanges have loosened their listing standards for companies . but , he says , many firms that have big otc divisions would be better off to bring some companies public via nasdaq , where they can be close to the trading of the new issues . the nasdaq composite index fell to , its th decline in the past sessions . advancing issues trailed decliners by to . northwestern national life dropped / to / . its third - quarter profit from operations fell from a year earlier . the dow jones professional investor report said prudential - bache repeated a buy recommendation on the stock after sound warehouse told its annual meeting it had retained first boston corp. to help it evaluate recent inquiries into its sale . erie lackawanna rose to . the company's board declared a partial liquidating distribution to shareholders of a share . among major nasdaq stocks , mci communications lost / to / ; apple computer rose / to / ; and intel dropped / to / . volume remained low at million shares , including million on the nasdaq national market system , where nasdaq's biggest and most heavily traded issues reside . a group led by forstmann little & co. , procter & gamble co. and two other major food companies said it may top all previous bids for rjr nabisco inc. in a move that reshapes the record bidding contest for the tobacco and food giant . over the weekend , strategists for the group , which also includes ralston purina co. , castle & cooke inc. and goldman , sachs & co. , pored over confidential rjr financial data in preparation for their possible bid , which , if launched , would top billion . advisers to the group said any bid would likely be all cash , in contrast to cash - and - securities proposals on the table from an rjr management group and the new york buy - out firm of kohlberg kravis roberts & co . for forstmann little and its partners , rjr brands such as oreo cookies , ritz crackers and del monte foods represent an unprecedented lure . nabisco's cookie and cracker businesses would make cincinnati - based p&g a major force in those food categories . ralston purina is believed to be interested in nabisco's cereal and pet food businesses . for castle & cooke , del monte would be a prize addition . the entrance into the rjr fray of forstmann little partner theodore forstmann , a frequent critic of kkr partner henry kravis and that firm's aggressive tactics , introduces a new element of personal rivalry into a contest already notable -- even by wall street standards -- for brazen displays of ego and greed . the forstmann little group's disclosure immediately drew angry condemnation from the rjr management group , which had earlier held preliminary talks about joining forces with forstmann little . rjr advisers asserted that , by pursuing rjr on its own , forstmann little had broken a confidentiality agreement reached with the management group under which the firm had extensively reviewed the management group's bidding strategy , financing arrangements and divestiture plans . a spokesman for the forstmann little group denied that the group had breached any pact with the management group . the rjr management group is sending forstmann little a strongly - worded letter today objecting to the contemplated bid . the immediate possibility of legal action is remote . " you can conclude that , given the progress that's been made , reasonable people might be able to resolve the last outstanding issues . . . and i think we can , " an rjr strategist said . however , a kkr adviser said last night the firm seemed to be leaning against resuming talks with the management group . in new york stock exchange composite trading friday , rjr shares closed at , down cents on volume of million shares . kkr announced a billion , or - a - share , tender offer for rjr two weeks ago after the company's management , led by f. ross johnson , president , said it was contemplating a buy - out bid . the management group , which includes the investment firms shearson lehman hutton inc. and salomon inc. , countered last week with a billion , or - a - share , merger proposal . shearson is a unit of american express co . the two groups reached an agreement in principle last week for a joint bid , but that pact crumbled when the two sides' investment banks couldn't agree which firm would manage bond offerings to finance a joint bid . officials of the rjr - shearson - salomon group were meeting late last night to discuss their bidding strategy . meanwhile , the rjr management group moved to put a damper on speculation that it will reap outsized rewards if its leveraged buy - out bid prevails . the seven - member group would get an initial stake in the private company , and the managers' stake eventually would rise to as high as about , depending on the company's financial performance . some investment bankers called the terms outrageous , considering the small size of the group and the relatively small cash investment -- about million -- the group would make . but in a letter to charles e. hugel , chairman of the special committee of rjr's board , mr. johnson said the equity " will be shared not just by a few members of top management . . . but by many members of management throughout the company . " mr. johnson said he had asked lawyers to analyze ways in which the equity could be distributed to employees . it is charged with getting the best deal for shareholders , and wouldn't get top dollar without another bidder . " this assures a horse race , " said one person familiar with the committee's thinking . but the forstmann - led group must walk a fine line with the directors . they don't want sensitive information going to competitors and they don't want advance selling of rjr businesses . thus , forstmann must screen some of the data from its prospective partners , and the partners must present themselves as investors in the bid , not buyers of the businesses . nonetheless , it is generally assumed that forstmann's partners are interested in eventually getting their hands on parts of rjr . of the three , p&g's entry is most ironic . it suffered a humiliating defeat at the hands of nabisco in the so - called cookie wars of the mid - s . the consumer products giant sought to become a much bigger force in the cookie business , developing a duncan hines soft cookie meant to challenge nabisco's dominance in the market . nabisco responded ferociously , with its own " almost home " line , and duncan hines' market share ended up being miniscule . nabisco controls of the billion cookie and cracker market and that would add some luster to a p&g foods group that has had problems . such brands as citrus hill orange juice and pringles potato chips , for instance , have struggled . for ralston purina , combining nabisco's cereal lines with its own lines could raise its market share almost to that of general foods inc.'s post brand , the nation's no. cereal maker . nabisco makes shredded wheat and cream of wheat , while ralston's cereal line includes chex cereals . nabisco's milk - bone dog snacks may also be sought by st. louis - based ralston , which makes pet food , according to john bierbusse , an analyst with a.g. edwards & sons , st. louis . castle & cooke's dole food co. unit is a big producer of bananas and pineapples , and so is rjr's del monte . both businesses also have canning operations . castle & cooke's participation in a bid also would be consistent with the style of its chairman , david h. murdock , who is known as a bold buyer and seller of businesses . forstmann little , a five - partner firm , traditionally has been identified with mr. forstmann , a former lawyer and investment banker who has long been critical of his archrivals at kkr. forstmann little was founded in by mr. forstmann , his brother nicholas and bryan little , a former white weld & co. investment banker . since then , the firm has completed buy - outs valued at about billion . it is best known for its million buy - out of dr pepper co. in and the billion buy - out of lear - siegler inc. in . a well - known republican party backer , theodore forstmann is known on wall street as a cautious deal maker . in a recent wall street journal editorial page article , he warned that excesses by leveraged buy - out firms could endanger the banking system and even prompt an economic downturn . behind the scenes , friends in the leveraged buy - out community have grown accustomed to mr. forstmann's tirades against kkr and its new york principal , mr. kravis . but in part because mr. forstmann was worried about high merger prices , forstmann little failed to make a single buy - out bid in . over - the - counter stock indexes rose for the first time in five sessions . however , some analysts and traders said a plunge in strategic planning associates showed how gloomy the market remains . the plunge , they complained , demonstrated how quickly today's jittery investors flee from stocks of companies that report negative news . " any company in this market that hiccups is just destroyed . the company just got hammered , " said thomas cope , who follows strategic planning associates for dillon , read & co. , new york . on tuesday , kinetic concepts took a tumble despite reporting a sharp increase in earnings ; analysts had expected slightly more . kinetic closed yesterday at / , up / , about where it ended after tuesday's plunge . overall , the nasdaq composite index of otc issues rose to , while the nasdaq index of the market's biggest nonfinancial issues , such as intel and charming shoppes gained to . in the year - earlier quarter , the company had net income of million , or cents a share , on revenue of million . the company blamed its expected loss partly on costs from expanding its staff . mr. cope of dillon read said he predicts a loss of cents a share for the company in the quarter and earnings of cents a share for the full year . but he characterized the downturn as nothing more than " a little stumble , " saying , " the consulting business can be bumpy . " nasdaq's volume slump showed no signs of ending . only million shares changed hands , million of that on the nasdaq national market system . advancers outpaced decliners to . sneaker stocks nike and l.a. gear were among the winners . nike added / to / on million shares , three times its average daily turnover , while l.a. gear advanced / to / . " the reebok hoopla the last couple of days " helped both stocks , according to alice a. ruth , an analyst at montgomery securities in san francisco . reebok has been in the news because of widespread speculation about a leveraged buy - out , even though reebok denies the rumors . and nike , in particular , has attracted attention amid the publicity being given to its rival reebok , she said . in addition , nike yesterday succeeded kaisertech on the standard & poor's - stock index . ms. ruth is bullish on both nike and l.a. gear . nike is trading at a low multiple of times next year's estimated earnings , and l.a. gear is at a multiple of . leading the advances was telos , which jumped / to / . the software designer and consultant , with a market value of about million , reported second - quarter earnings of cents a share , compared with cents a share a year earlier . centocor slumped / to / on bad earnings news , the biggest percentage fall next to strategic planning . centocor reported third - quarter net of , compared with million a year earlier ; the biotechnology company cited its decision to use profit from its diagnostics division to support growth of its new pharmaceutical business . servico fell / to / . fcd hospitality lowered its takeover offer for the company to a share from a share alexander & baldwin , a major nasdaq transportation stock that soared / to wednesday , slipped to / , down / , in active trading yesterday . whether soaps and shampoos damage the eyes of children could become an area of controversy . researchers at the medical college of georgia in augusta are testing the long - term effects on the eyes of sodium lauryl sulfate , or sls , an ingredient of many soaps and shampoos . sls , until now , has been considered safe since no one has seen any obvious damage to human or animal eyes . " due to the widespread use of such detergents where exposure to the eye may occur , any immediately dangerous situations should have been readily observable , " georgia ophthalmology professor keith green told a meeting last month of the nonprofit research to prevent blindness organization . but new test - tube and animal experiments hint at potential problems , dr. green says . the experiments found that sls is rapidly absorbed by eyes , particularly the eyes of young , growing animals . it is retained there in the eye for several days and causes some mysterious changes in certain proteins . and it delays the healing of wounds in the surface of the cornea . " our findings lead us to call for more judicious use of detergents such as sls " by both manufacturers and consumers , dr. green says . reducing factory emissions that cause acid rain and smog may become practical through a new method . two years ago , researchers at the federally owned sandia national laboratories in livermore , calif. , reported a lab experiment in which polluting nitric oxide compounds were eliminated from diesel exhaust by adding a simple chemical , cyanuric acid , to the exhaust gases . the technique worked over a wide range of temperatures , as low as degrees celsius . but last month , in the scientific journal nature , another research team reported that the sandia results could only be achieved in a stainless steel tube , as at sandia , or at temperatures of degrees celsius or higher . that raised questions about the practicality of the technique for factory and power - plant furnaces . now , micheal heap , president of energy & environmental research corp. in irvine , calif. , and his associate , david w. pershing , of the university of utah , report that in further experiments , they discovered a way to make the sandia method work without stainless steel and over a wide range of temperatures . this simulates the so - called staged combustion technique already being used by some utilities and prevents certain unburned chemicals from turning into nitric oxides . in an experimental coal - burning furnace , the combination of staged combustion and cyanuric acid cut nitric oxide emissions to parts per million of exhaust gases from more than ppm , the researchers reported . better yet , ammonium sulfate , a cheap and plentiful fertilizer , worked just as well as cyanuric acid , a swimming - pool additive . determining whether chest pain is caused by heartburn or heart disease should become more of a science as a result of experiments at bowman gray medical college in winston - salem , n.c . when doctors have trouble diagnosing chest pain , they often inject hydrochloric acid into the esophagus to see if it reproduces the chest pain . if so , the pain is considered a result of " gastroesophageal reflux , " the backflow of stomach acid into the esophagus . a negative result points doctors to other causes , probably angina heart pain caused by clogged coronary arteries . in an innocuous office procedure , the researchers slipped a tiny acid detector through the nose and into the esophagus of patients whose chest pains had been blamed on acid reflux by the old test . after monitoring acid levels with the detectors for a full day in each patient , the researchers found that only of the actually suffered abnormally high acid levels in the esophagus . similarly , of chest - pain patients who supposedly were free of acid - reflux problems by the old test did , in fact , have abnormally high acid levels in the esophagus . the old acid test is only reliable , edward g. hewson of the bowman gray research team told a recent meeting of the american college of gastroenterology . twenty - four hour monitoring of acid levels in the esophagus with the tiny acid detector and of heart function with a strap - on electrocardiogram promises to be more accurate in distinguishing the source of unexplained chest pain , the researchers say . a doctor's letter to the journal of the american medical association wonders why no prescription drugs have brand names starting with the letter j . tektronix inc. said it will unveil today a high - quality color printer that is priced significantly lower than its major competitor in the small but growing market . the printer , called the phaser cp , will work with desktop publishing systems used on personal computers made by international business machines corp. and its imitators . the system , which will sell for , will be available early next year . gary jensen , an industry analyst for dataquest inc. , said beaverton , ore. - based tektronix is " absolutely setting an aggressive new price for color printing . the company is definitely establishing itself as a dominant player " in the color - printing market . tektronix's system uses a technology known as thermal wax transfer . he estimates the market for printers of that type will be more than million this year , and grow to million by . the tektronix system will compete with a similar one made by mobile , ala. - based quality micro systems inc. that sells for . that system , which was introduced in march and which works on ibm and apple computer inc. machines , has sold well in the graphics arts and advertising markets , a company spokeswoman said . we will still be the choice for the high - end printing market . " the largest piece of the color printer market remains dot - matrix printers , which make lower - quality documents and sell for between and . mr. jensen said the market for dot - matrix printers in was million and is expected to grow to million by . high - end color printers , such as tektronix's , are aimed at advertising , public relations , sales and marketing departments . tektronix's system will make color prints on paper for cents to cents each . it will make color transparencies for to each , the company said . the spokeswoman for quality micro systems said that company's system makes color copies for cents to cents each , and makes color transparencies for about each . tektronix is looking to diversify now that growth in its main market , test and measurement equipment , is slowing . it is seeking to expand sales of printers , workstations and tv - production equipment . polaris industries partners l.p. expects to report third - quarter earnings of about million , or more than a unit , victor k. atkins jr. , general partner , said . the maker of snowmobiles and all - terrain vehicles , or atvs , which went public sept. , , estimates revenue grew to more than million from million . for the nine months , net is estimated at million , or a unit . revenue grew to about million from million . for , polaris expects to earn to a unit compared with earnings , on a pro forma basis , of a unit for all , mr. atkins said in an interview . comparative earnings figures for the quarter and nine months weren't available . operating cash flow was around million for the quarter and million for the nine months . the executive projects this number at more than million , or about a unit , for . because of the seasonal nature of the company's business , investors should evaluate polaris based on annual cash flow , not quarterly cash flow or net income , mr. atkins said . the partnership purchased polaris for significantly more than the book value of its assets . distributions to investors , currently a unit yearly , are based on cash flow rather than on reported earnings , he added . the company has no long - term debt , borrowing seasonally for working capital . started in by the inventor of the snowmobile , polaris was bought by current management from textron inc. in , " when many people thought the industry " was sounding " its death knell , " mr. atkins said . the managers bought of polaris's assets , and selling shareholders contributed in exchange for a interest . the cost million plus the retained earnings from march , , to closing , which were about million , the new york investment banker said . the snowmobile market " got glutted because nobody was watching " the retail side of the business , mr. atkins said . manufacturers " were producing helter - skelter . it was a real craze . " industrywide sales in were close to but dropped off , bottoming at about in , he said . the number of manufacturers dropped from about to the current four . " the thing that hit hardest was the energy crisis , " mr. atkins said . if someone " had to wait in line for gas for his car , he couldn't justify " waiting for gas for a snowmobile . polaris doesn't disclose the number it makes at its plant in roseau , minn . the vehicles range in price from about to . the plant employs about at peak times . to avoid inventory difficulties in the seasonal business , polaris builds only to match firm orders . snowmobile " dealers convene in march and place orders , subject to adjustment , " the executive said . " the atv guys convene in october and do the same thing . and we schedule production to be as efficient as we can . we know pretty much in a given year how much we're going to produce . " mr. atkins expects growth in the snowmobile industry of about to a year long term , though occasionally " you may get a blip like in anything else . " the snowmobiles " are dependable and quiet , and people are coming back to the sport , " he said . the snow belt states have created trail systems ; minnesota has miles of such trails , he said . the business isn't recession - proof , but historically , in times of weakened consumer spending , the company has seen sales drop off only to , mr. atkins said . polaris is " a small player " in atvs right now , mr. atkins said . 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 : . the base rate on corporate loans at large u.s. money center commercial banks . federal funds : / high , / low , / near closing bid , / offered . reserves traded among commercial banks for overnight use in amounts of million or more . source : fulton prebon ( u.s.a. ) . inc . discount rate : / . the charge on loans to depository institutions by the new york federal reserve bank . call money : / . the charge on loans to brokers on stock exchange collateral . commercial paper placed directly by general motors acceptance corp. : to days ; to days ; to days ; to days ; to days . commercial paper : high - grade unsecured notes sold through dealers by major corporations in multiples of : days ; days ; days . certificates of deposit : one month ; two months ; three months ; six months ; 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 million and more . the minimum unit is . typical rates in the secondary market : one month ; three months ; six months . bankers acceptances : days ; days ; days ; days ; days ; days . london late eurodollars : / to / one month ; / to / two months ; / to / three months ; / to / four months ; / to / five months ; / to / six months . london interbank offered rates ( libor ) : / one month ; / three months ; / six months ; / 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 ; germany ; japan ; switzerland ; britain . these rate indications aren't directly comparable ; lending practices vary widely by location . treasury bills : results of the monday , october , , auction of short - term u.s. government bills , sold at a discount from face value in units of to million : , weeks ; , weeks . federal home loan mortgage corp. ( freddie mac ) : posted yields on - year mortgage commitments for delivery within days. , standard conventional fixed - rate mortgages ; , rate capped one - year adjustable rate mortgages . source : telerate systems inc . federal national mortgage association ( fannie mae ) : posted yields on year mortgage commitments for delivery within days ( priced at par ) . , standard conventional fixed - rate mortgages ; , / rate capped one - year adjustable rate mortgages . source : telerate systems inc . merrill lynch ready assets trust : . c - tec corp. , a telecommunications concern , said a group of its top officers proposed to acquire the of c - tec it doesn't already own for a share , or million . in national over - the - counter trading yesterday , c - tec soared a share , to , suggesting the market expects a higher bid . the company said the group proposes to take c - tec private " to better maintain the long - term growth and independence of the company . " c - tec said it doesn't know of any public company interested in taking over the company . c - tec provides telephone service to a large part of eastern pennsylvania and cable television service in central new jersey and eastern new york . last year c - tec earned million , or a share , on revenue of million . the group consists of andrew j. sordoni , c - tec's chairman ; william b. sordoni , c - tec's vice chairman ; charles e. parente , c - tec's president ; and stephen sordoni , a partner of the others . the sordonis are brothers . c - tec said andrew sordoni , william sordoni and mr. parente , all c - tec directors , would abstain from the board vote on the proposal . if the board recommends the proposal , the group's newly formed awsc acquisition corp. would begin a tender offer for the shares it doesn't already own or control . c - tec would be the surviving company after a merger . the transportation department , in the latest twist in a tangled case , agreed to reconsider its decision awarding continental airlines the lucrative seattle - tokyo route . the department said it planned to make its final decision in the long - running case by nov. . the department on sept. granted the route to continental , a texas air corp. subsidiary , after being ordered to do so by a federal appeals court here . but five parties petitioned the department to reconsider its decision : united airlines , a ual corp. unit and the current route holder ; american airlines , a unit of amr corp. ; the international association of machinists ; the united pilots master executive council ; and the port of seattle . the parties argued that the department didn't follow its own criteria in awarding the route . in its order reopening the case , the department asserted that it " clearly has the authority to reconsider its own decisions , " despite the court order . those who opposed a reopening of the case , including continental , argued that the court decision precluded any further action by the department . the proceeding at times has taken on farcical overtones . united has operated the route since . since then , united , american and continental have battled for control of the route . in june , a department administrative law judge recommended that the route be awarded to continental , but a senior agency official overruled that decision in favor of united . shortly afterward , that official left the department to work for flying tiger line , a tiger international inc. cargo - airline unit that wanted united to win the route . concerned about a potential conflict of interest , the department threw out the case and started over . a new administrative law judge chose united earlier this year , but a department official overruled him in favor of american . a more - senior official then sent that decision back for further review , saying it wasn't adequately documented . meanwhile , continental sued the department , saying the original decision of the administrative law judge should stand . on aug. , a federal appeals - court panel agreed . federal prosecutors are seeking to tie up about million in assets of princeton/newport l.p. as security for funds the government may want to seize if the firm's indicted partners are convicted on criminal racketeering charges , said individuals close to the case . on aug. , a federal grand jury indicted five partners of princeton/newport , a securities firm , and a former drexel burnham lambert inc. official on charges that they had engaged in a racketeering conspiracy to create illegal tax losses through bogus stock deals . since last wednesday , attorneys for princeton/newport and federal prosecutors have been trying to agree on an amount that would satisfy the interests of both parties . the government wants to be certain there is property available if the court later convicts the defendants . convictions under the criminal racketeering statute allow the government to seize profits derived from criminal activities . however , the firm , which hasn't been indicted , has fought to protect the assets in the capital accounts of the firm's unindicted partners , saying to freeze such accounts would be devastating to the business . if the government seeks in the neighborhood of million , the difference -- million or more -- would have to come from the personal assets of the defendants , said an individual close to the case . if a figure in the million range is approved by a federal judge , unindicted limited partners in princeton/newport probably wouldn't have their assets tied up , according to paul grand , a new york attorney who represents one of the defendants . the issue is expected to be discussed at a hearing today before judge robert l. carter . the case is being closely watched because it represents the first time the government has used the criminal provisions of the federal racketeering law , known as rico , against securities officials . court rulings in the case will set the rules likely to govern future such indictments . the hong kong government intervened in the colony's money market for the second time since granting itself central - banking powers . local traders view the intervention , under which the government drains from or adds to the money market to maintain the hong kong dollar's rate against the u.s. dollar , as a test by the government of its new powers . on tuesday , the government acted to decrease the amount of money available in the interbank market , where banks borrow funds from one another , by reducing the excess in the system by hk million ( us million ) , to hk million . the government carried out a hk million reduction about three weeks ago . traders who deal in hong kong dollars said the intervention had a small effect on the local money market , but their awareness of the government's powers is increasing . " you can feel it in the market when there is a big order like this for hong kong dollars , " said andrew ng , a trader for the hong kong operation of new york - based chase manhattan bank . by buying and selling the local currency on the open market , the government can control local interest rates and the value of the colony's currency , which is fixed at hk for each u.s. dollar . under the new system , the government has several options when it wants to reduce the availability of the local currency . for example , it can sell u.s. dollars for hong kong dollars , or it can borrow hong kong dollars from a bank in the colony . government officials wouldn't give details of tuesday's intervention . " i have carried out certain operations which require the banking market to give me hong kong dollars , " said joseph yam , hong kong's deputy secretary for monetary affairs . he refused to give a reason for the decision to intervene . however , currency traders said the government aimed to increase interbank interest rates to increase the value of the hong kong dollar . higher local interest rates increase the appeal of holding hong kong dollars , which in turn raises demand for the currency . at the end of last week , banks' overnight borrowing costs ranged between and . currency traders said the market rate for the currency was at hk for each u.s. dollar by the end of the day . bankers and traders said the gap between the market exchange rate and the government's target didn't merit a major intervention . in december , the hong kong dollar traded as high as hk to the u.s. dollar . " there's not a big divergence now , and hk million is really a very small intervention , " said a trader at a hong kong - based bank . " the government is just showing a sign of what the exchange fund can do . " not long ago , colleagues would have branded kensuke yukimura a traitor for what he did . even now , the - year - old engineer confesses to being " in pain for a year " because of it . his transgression ? mr. yukimura changed jobs . while that may not sound like a big thing to americans or europeans , changing companies in mid - career is nothing less than revolutionary in japan . and it's a revolution that more and more japanese are joining . last year about million people , or of the work force , jumped for greener pastures . that's up from five years earlier . " it's a new tide , " says kimihisa sato , a director of mitsubishi research institute who follows management trends . it's also a new boon for foreign companies trying to compete here . they now find it much easier to hire experienced japanese employees , given that japan's job market is acting more like a free market . recently , for example , lotus development landed a sony marketing whiz , lsi logic nabbed a top nec manager , and daimler benz and bmw each recruited an executive from toyota . " it's a complete change from five to years ago . " for japanese companies , though , the new labor mobility is a double - edged sword . they stand to gain more flexibility in recruiting , but they also will probably pay more in personnel costs and lose some of the group harmony that is so cherished here . for years , management experts have trumpeted japan's " lifetime employment " system -- no layoffs , but no quitting either -- as one of the secrets of the country's success . simply put , managers and workers see themselves in the same boat , dependent on each other for survival . japanese workers so thoroughly identify their fates with their companies' that they give up their vacations , accept unwanted transfers and work overtime ( sometimes without pay ) , all the while peppering their bosses with suggestions on how to run the business better . in many cases , this job performance is what gives japanese an edge over foreign competition . no one expects this system or its spirit to disappear , but job hopping will tend to undermine it . the new trend is as much home - grown as inspired from abroad . japan is plagued with labor shortages ; thus , many companies , desperate for trained professionals , are hiring people from the competition . the old , group - oriented approach worked well when the objective was perfecting mass - production techniques , but many top managers think the future now puts a premium on creative corporate strategies . they figure that by bringing in mid - career managers from the outside , they can acquire fresh perspectives and , in turn , a sharper competitive edge . sony corp.'s general manager for hiring and training , nobukazu ohga , calls it the " stirring - up effect . " his company last year hired about mid - career switchers , accounting for about of the college graduates it brought aboard . the electronics concern hopes to hire more . " if you think only of efficiency , it is better to have people who share the same value sense because they can move under a single flag , " says an official of sumitomo trust & banking co . " but the question is if the company can adjust itself to changes in the future with pure - cultured people . " apparently having decided it can't , sumitomo trust is hiring professionals from the outside . many employees are also beginning to see advantages for themselves in mid - career job changes . the - year - old recently joined mitsubishi research institute after he quit his junior - management job at a big printing firm . " i don't think i received compensation commensurate with my contribution , " he says . but for most , the lure is job satisfaction . take mr. yukimura , the - year - old engineer . he left the heavy - machinery company where he was working to join sony because sony offered him a job in the field of his dreams -- systems engineering . " at my previous company , it might have taken or years to realize my wish , and then i would be too old , " mr. yukimura says . " i wanted to make the best use of my ability . " another professional , yutaka fujiwara , recently jumped from a company that builds oil rigs and joined yasuda trust as a merger and acquisition specialist . " this idea may come from my stay in the u.s. , " says mr. fujiwara , whose previous employer dispatched him to houston for five years , " but manpower is one of the commodities . you sell to the highest bidder . " few japanese , of course , make such a move lightly . " after all , i am a japanese , " he explains , " so i was in distress . " but he made the leap , and others in japan are making it , too : one survey of recent college graduates suggests might job hop . the trend is being shaped by workers in the postwar baby boom who are entering the age bracket where promotion into upper management was normal in the past but more difficult now . the bulge in the population is simply bigger than the number of available top - level jobs . amid slower economic growth , some japanese companies , particularly in the shipbuilding industry , also have taken to " encouraging " senior employees to retire . workers are therefore sensing that the system of lifetime employment isn't what it used to be and that self - interest may be the best policy . " the relations between companies and individuals are becoming cool , " says haruyuki kawamoto , who last summer left toyota motor corp. after years and joined bmw's japanese subsidiary as an assistant senior manager . " if you count on corporate paternalism , you will be a loser . " it has taken more than a little while for japanese to come around to that way of thinking . its small newspaper advertisement in seeking such help caused a sensation . but soon others followed . nissan started systematically hiring mid - career engineers early this year to beef up its research and development activities . nippon steel corp. , while cutting thousands of steel - mill jobs , is actively hiring mid - career engineers and specialists to staff the company's diversification efforts . kirin breweries co. , japan's leading beer maker , now hires marketing managers who are in mid - career . indeed , in a recent government survey of companies , replied that they had hired experienced workers in the most recent year . in , when the government did a similar study , the figure was a much lower . one clear loser in all the job hopping is the japanese personnel practice of promoting group harmony and corporate loyalty . traditionally , workers have been paid according to their level of seniority . there is " tremendous pressure to keep competent people at the company and motivate them , " says one nissan official in charge of personnel management . managers also fear fueling doubts and jealousies among those who stay put , particularly if workers brought in from the outside are given big salaries . so far , companies haven't felt the effect of job hopping on their cost of compensation . but as bidding for labor becomes more common , salary inflation seems inevitable . already , there are early hints of it . to protect their talent from scouting and to nab specialists from other companies , some japanese firms have adopted a new " contract employee " system . under it , salaries are renegotiated annually and tied to performance -- a radical concept in japan . nikko securities co. , for example , adopted the system last october , mainly for specialists like bond dealers and foreign - exchange traders . those who work under it can earn a lot if they are talented , although there isn't any guarantee of an annual wage increase -- nor of continued employment . says mr. sato of the mitsubishi research institute : " the one - company - for - life era has come to an end . " francis bouygues plans to step down tomorrow as chairman of the television station tf but will remain at the helm of bouygues s.a. , the construction company he founded that controls the station , sources said . the sources , who requested anonymity , said mr. bouygues's decision to resign from his tf post has nothing to do with the stock market attack on bouygues late last month that sent its share price surging over in heavy trading for three days before its just - as - sudden fall . they added that his departure isn't linked to health problems , despite persistent rumors on the paris market that the - year - old mr. bouygues , who had one lung removed several years ago , was seriously ill . indeed , the sources said , mr. bouygues will reassert at a bouygues board meeting thursday that he plans to remain in charge of the group he created years ago and has turned into a world leader in the construction field . mr. bouygues's decision to step down from tf had been planned for some time and reflects mr. bouygues's conviction that the television station is now firmly on track and no longer requires his sustained attention and presence , the sources said . mr. bouygues will announce his departure at a previously scheduled tf board meeting tuesday and will be succeeded by the current managing director , patrick le lay , a close associate who was in charge of bouygues's diversification before handling tf's day - to - day affairs . mr. bouygues became chairman of tf in april when the government sold france's most popular television station to the public . bouygues acquired a controlling stake in tf for billion francs ( million ) in a major diversification move designed to offset a slowdown in the construction business . tf , which was losing money when bouygues won control of it , expects to post profits of between million and million francs this year . a federal appeals court denied as " premature " a request by attorneys for drexel burnham lambert inc. to disqualify the federal judge presiding over the securities and exchange commission's securities - fraud case against drexel and others . the appeals court said it was rejecting for now the extraordinary request by attorneys for drexel and three of its employees to remove judge milton pollack . the court said that judge pollack first should have a chance to hold a hearing , which he had already scheduled for next tuesday , to consider the drexel attorneys' earlier motion asking him to remove himself voluntarily . the appeals court also rejected a request by defense attorneys to prevent judge pollack from issuing more pre - trial orders in the sec case before the tuesday hearing on the motion for the judge to step down . defense attorneys were quick to note that the federal appeals court hadn't ruled on the merits of their request . if judge pollack denies the earlier motion after that hearing , the defense attorneys can again petition the second u.s. circuit court of appeals in manhattan to bar him from the sec case and other insider - trading related civil suits over which he is presiding . they allege that his wife , moselle pollack , stands to gain about million from a leveraged buy - out which , drexel said , it is helping to finance . they had asked the federal appeals court to issue a so - called writ of mandamus , a seldom used tool that would require the attorneys to prove that judge pollack abused his discretion . the lawyers have said that judge pollack's involvement in the case creates an " appearance of impropriety " violating federal statutes . the defense attorneys had argued that it was necessary for the appeals court to step in because by continuing to issue orders in the drexel cases in recent weeks , judge pollack had " in essence denied the pending motion . " the decision by the appeals court not to rule on drexel's request " is the result we urged before the court , " said thomas newkirk , chief litigation counsel for the sec . george raycraft , an attorney for plaintiffs in some of the private cases , agreed . " the correct procedure is for judge pollack to first have the chance to review the matter , " he said . " it's not a foregone conclusion that judge pollack won't remove himself , " said thomas puccio , a new york defense lawyer who isn't involved in the drexel case . " but it would be unusual for the appeals court to kick him out , since all the judges have to live with each other . " federal bank regulators are studying whether mcorp , texas's second biggest bank company , may need a large infusion of federal aid after a government review found worse - than - anticipated weakness in the big texas bank's loan portfolio . the mcorp examination , which lasted more than three months , has apparently turned up more shaky real estate and commercial loans , according to regulators and officials close to the company . as a result , the company's third - quarter financial results , which are scheduled to be announced later this month , are expected to show a jump in nonperforming assets in excess of the million increase it posted in the second quarter . also , mcorp's quarterly loan - loss provision is likely to outstrip the million second - quarter charge . a third - quarter net loss is a certainty , but figures aren't final . in the year - earlier third quarter , the company , which has billion in assets , reported a million net loss . mcorp's portfolio problems seem modest compared with the sharp deterioration uncovered after a government review of dallas - based first republicbank corp. earlier this year . but mcorp officials had hoped for much better results , and the gloomier picture of the company's health cast further doubt as to whether the company can survive without a federal bailout . many analysts have predicted that the company's condition is too far gone to avoid a bailout by the federal deposit insurance corp . but government officials say a bailout isn't a certainty , and mcorp hasn't made any formal requests for fdic assistance . yesterday , an mcorp spokesman , acknowledging there " is an abundance of rumor and speculation " about the company , said , " at this point we haven't any announcement to make . " he declined to comment further on the expected results . a final report card on mcorp's condition hasn't been presented to the company , regulators said . and they caution that the size of the quarterly loan - loss provision and the increase in nonperforming loans hasn't been finally determined . at june , mcorp nonperforming assets were billion , or of total loans and other nonperforming assets , such as foreclosed real estate . mcorp is the last of texas's major banking companies to have come this far without seeking a bailout or a sale to an out - of - state institution . mcorp's management has moved comparatively quickly to solve problems in contrast to other texas institutions that delayed action , hoping for an economic rebound . still , with about of its loan portfolio in real estate loans , the company has rolled up million in losses since , when plummeting oil prices and real estate values hammered the economy of texas . there has been heavy trading this week in mcorp common stock on the new york stock exchange . prices dipped to a record low of cents a share by tuesday . they rebounded wednesday , again on strong volume , and closed yesterday at a share , unchanged , in composite trading . earlier this year , mcorp looked like a survivor in the troubled world of texas banking . it had predicted that it had seen the worst of the loan losses from its real estate lending operations , after its inventory of nonperforming assets fell slightly late last year . but the capital - raising effort was canceled last spring after the collapse of the company's crosstown rival , first republicbank , whose banks were acquired in an fdic - assisted transaction by ncnb corp. , charlotte , n.c. mcorp loan - loss provisions and total write - offs before any recoveries totaled million in the first half of this year . late in august , keefe , bruyette & woods inc. , which issues widely followed safety ratings for bank deposits , downgraded mcorp banks to an e rating , which signifies " very serious problems . . . risk at all maturity levels . " the nbc network attracted only an average of u.s. households over the nights of the summer olympics , getting the lowest - ever ratings on the most expensive summer games in television history . the ratings flop will result in a loss on the games for the network , owned by general electric co. , instead of the million pretax profit that had seemed likely before the games began . the network's parent , national broadcasting co. , will end up " marginally profitable " after ad sales at six company - owned tv stations are counted , a spokesman said . final ratings tallies by a.c. nielsen co. show nbc's average prime - time rating fell a surprising below the audience levels nbc had guaranteed to advertisers . ratings for late - night , morning and afternoon time slots were running to below nbc's promises . the network will likely owe advertisers more than million in free spots to make up for the shortfall . nbc paid a record million in rights fees plus million in expenses to cover the summer games in seoul , south korea . the rights went for million for the summer games in los angeles and cost million in . myriad factors are being blamed for the smaller audiences : too much air time ( almost hours ) , too many commercials , too few u.s. medals , nbc's low - key coverage and the fall timing that pitted the games against baseball and football . but even given such factors , the low ratings stunned many in the tv business . for the closing ceremonies sunday night , nbc drew a dismal of homes with tv sets , the lowest rating of the games . only one in five viewers watching tv that night tuned in . by contrast , abc's broadcast of the closing ceremonies of the summer games drew the highest rating of a two - week stint , getting of homes and more than half of all viewers watching tv that night . when maxicare health plans inc. named peter j. ratican chief executive officer two months ago , some analysts assumed the health maintenance organization was looking for someone to help it take the chapter plunge . mr. ratican's previous employer , de laurentiis entertainment group inc. , filed for bankruptcy protection a week after his august departure . analysts figured that the former movie company financial officer , though he had little health - care experience , certainly would have learned something about filing a bankruptcy petition while at de laurentiis . but the - year - old mr. ratican , working with his own newly named management team , has taken a very different route . " i talked once or twice with one of the partners " of a law firm that specializes in bankruptcy matters , mr. ratican says . " but that alternative is no longer under consideration . " although details still are being worked out by the six task forces he created , the plan now is to sell or close unprofitable operations , restructure bank debt -- for the second time this year -- and speed up collections from customers . mr. ratican says his strategy as chairman and chief executive really isn't a sharp departure from the plan of his predecessors , the ousted husband - and - wife team of fred w. wasserman and pam anderson . one of their failings was widely seen as an inability to delegate decision - making authority , he acknowledges . mr. ratican's approach is to involve maxicare senior and middle managers who had been excluded from the decision - making process . those managers can help solve " basic bread - and - butter " problems more quickly , he says . to instill such team spirit , he drafted john wooden , the legendary basketball coach , whom mr. ratican had met in his college days at ucla. ( " wooden was an avid baseball fan and used to sit in the dugout , " says mr. ratican , a catcher for his ucla team. ) . at mr. ratican's behest , mr. wooden gave a paid pep talk on a recent saturday morning to about maxicare managers who had gathered for a get - acquainted meeting with their new chief and other new executives . maxicare also has recruited the management consulting firm of mckinsey & co. to help guide the company through the current transition . mckinsey now has about people working full - time at maxicare , although mr. ratican insists that maxicare people are making the big decisions . at least one mckinsey consultant is on each of the six task force committees " to ask the right questions . " mr. ratican anticipates that the current level of mckinsey services , costing about a month , won't be needed after two or three more months . mr. ratican , familiar with mr. wasserman's and ms. anderson's style from his five years as a maxicare director , invited the couple to help with the transition for about two weeks after their removal by the board . they " are no longer involved , " he says . mr. ratican has attracted some trusted , long - time associates to maxicare from his years at the accounting firm of price waterhouse and at mca inc. , the giant entertainment concern . most notably , thomas a. zimmerman , who has known mr. ratican for years , was recently named maxicare executive vice president , finance and administration . he had previously been vice president - finance of mca's movie group . " i just laugh and let the criticism pass , " he says . but the executive does believe that skills acquired in the entertainment and accounting businesses -- and his long relationship with maxicare -- equip him to return the hmo to profitability next year . as a young audit manager at price waterhouse years ago , mr. ratican brought in the maxicare account . mr. ratican says he hasn't consciously modeled his style after movie moguls , but like executives in that business he is more conscious of publicity than his predecessors . one of his first actions as maxicare chief was to promote the company's public relations director to vice president . his life style , though , is also far from hollywood . he lives in the quiet suburban community of glendale , about miles north of los angeles . among his domestic credits , he lists helping his wife run her children's clothing business . a rapid run - up in pillsbury co. stock - option prices and volume monday has raised questions about whether news of grand metropolitan plc's - a - share offer for pillsbury leaked into the financial markets before it was announced . on monday , pillsbury's october call options were the third most - active options series on the american stock exchange , where contracts changed hands . the price , or premium , of the options jumped to close / higher , at / . an october call option is a contract to buy shares of pillsbury at a share during most of the month of october . pillsbury's stock , meanwhile , gained only monday to close at in new york stock exchange composite trading , with shares changing hands . often , a sharp rise in price and volume on an option priced so close to the underlying stock raises suspicion that some individual or company may be trading on inside information , traders said . " no way the option should have gained that much based just on options pricing theory , " said the head of one chicago options trading firm , who asked not to be named . an amex spokeswoman said that while the exchange routinely investigates trading that appears irregular , trading in pillsbury options on monday " was not too far out of line with a few trading days " last month in the options . the securities and exchange commission , which oversees the stock - options markets , doesn't comment on unusual trading activity . and despite tales of illicit gains that inevitably accompany insider - trading rumors , one amex floor trader , who asked not to be named , said two traders there sustained " several - hundred - thousand - dollar losses " as a result of the torrid trading in pillsbury options so far this week . the traders apparently sold options with exercise prices of and , believing that if the long - rumored offer for pillsbury was finally coming , it wouldn't exceed the - to - - a - share range . when the - a - share offer was announced , they were forced to cover their delivery obligations under the contracts by , in effect , buying back pillsbury shares yesterday at a loss of as much as a share . the october call options closed yesterday at / , up / . john peter galanis , convicted of federal racketeering , tax fraud , bank fraud and securities fraud charges , was sentenced in white plains , n.y. , to years in prison . u.s. attorney rudolph w. giuliani said the sentence " in my experience , ( is ) the heaviest yet imposed for white - collar crime . " assistant u.s. attorney vincent l. briccetti identified mr. galanis , years old , as the head of a group whose activities included the promotion of bogus tax shelters , some of which were used to generate million in promissory notes that were sold to the now - defunct peoples national bank of rockland county , monsey , n.y . in july , a federal jury in white plains also convicted the former broker of bribing officials of peoples national bank to accept the notes . peoples national was closed by federal regulators in september . the tax fraud and securities fraud charges were in connection with the syndication of a fraudulent oil and gas tax - shelter promotion between and . mr. galanis , a greenwich , conn. , resident , also was convicted of criminal contempt ; the fraudulent takeover of three california mutual funds , a connecticut bank and a utah bank , and theft of million from the three mutual funds . the indictment was first handed up in june and was superseded by a broader one in september . mr. marchese , a former bank executive , was convicted of bribery and racketeering . a total of people have been convicted on charges arising from the government's investigation of the galanis organization . mr. galanis served a six - month prison sentence in on conspiracy charges related to the disappearance of million from investors' funds . a indictment of being an accomplice in a fraud on chase manhattan bank is still pending . mr. galanis , who left a job as a merrill lynch broker in , had been charged with counts ; seven were dismissed , and he was convicted on . he was acquitted of one count of tax fraud , four related to bribery of bank officials , and two related to making false statements to a u.s. agency and a bank . mr. briccetti said mr. galanis's attorney indicated that they planned to appeal . mr. galanis was released on the same million bail posted when he was first arrested . he noted that the judge , charles l. brieant , sentenced mr. galanis to the concurrent maximum - year terms for the two racketeering charges . he added that during the sentencing , the judge described mr. galanis as a " professional criminal . " corning glass works said its third - quarter net income is expected to include an after - tax gain of about million , or a share , as a result of several financial transactions in japan . the transactions also are expected to result in a further gain , but of a lesser amount , in the fourth quarter . in the year - earlier third quarter , corning glass had net income of million , or a share , on sales of million . in new york stock exchange composite trading friday , corning stock rose to . corning said the extraordinary gain is from the sale of a unit that held japanese real estate , the sale of a portion of its interest in iwaki glass co. of japan and from an initial public offering in iwaki of five million new shares . iwaki glass , a maker of industrial , consumer and laboratory products , is owned jointly by corning and asahi glass co. of japan . under japanese regulations , a listing on the tokyo stock exchange requires that of the company be available for public ownership . corning noted that asahi glass also is selling a similar portion of its iwaki glass shares as part of the transactions . when the public offering is completed , corning will own about of iwaki . msi data corp.'s board unanimously rejected a - a - share , or about million , tender offer by telxon corp. and said it plans to explore various alternative transactions . the alternatives could include the sale of stock or other securities to a third party , a recapitalization or restructuring , or a sale of the company , msi said in a securities and exchange commission filing . the company cautioned , however , that " there can be no assurance " that any of the alternative transactions will be pursued . msi also said it " intends to take all steps necessary to assure that the telxon offer does not succeed . " at a meeting last thursday , msi's board adopted a " poison pill " temporary shareholder - rights plan as a takeover defense . rights under the plan will be distributed to shareholders of record on oct. . the company also authorized its legal counsel to pursue litigation to enjoin telxon's takeover attempt . in american stock exchange composite trading friday , msi closed at a share , down cents . msi had about million common shares outstanding as of aug. . in national over - the - counter trading , telxon was unchanged at a share . telxon is msi's chief competitor in the hand - held computer business . msi said friday that it intends to " pursue vigorously " its patent litigation against telxon , scheduled for trial on nov. . in rejecting telxon's offer , msi's board considered the opinions of smith barney , harris upham & co. and goldman sachs & co. , msi's financial advisers , who determined that the offer is inadequate from a financial point of view . a telxon spokeswoman said the akron , ohio , company wouldn't comment until it had seen msi's filing on reasons for rejecting the offer . she added , however , that telxon remains hopeful of negotiating with msi , although no such meetings have been set . so far , " not a lot " of msi shares have been tendered under the offer , which expires at : a.m. edt , oct. . but the telxon spokeswoman said that was expected " because professional traders wait for the last minute . " the fight is on again between united airlines and continental airlines over a lucrative route between seattle and tokyo . just last week , the long - running case seemed to end , after the department of transportation said it would comply with an order by a federal appeals court panel to award the route , now operated by united , to continental , a unit of houston - based texas air corp. united said it will petition the transportation department to reconsider its decision . the move could delay resolution of the case for at least another month . the transportation department said united , a unit of chicago - based ual corp. , has days in which to file such a petition . american airlines , a unit of amr corp. , fort worth , texas , and another competitor for the route , said it too is considering filing for reconsideration . american also said it hasn't ruled out asking the full federal appeals court in washington , d.c. , to review a three - judge panel's earlier ruling . continental maintains that the appeals process at the transportation department has been exhausted and that only another appeals court ruling could affect the decision . the airline said it still expects to begin service on the route in early . but after united acquired additional pacific routes from pan american world airways in , the transportation department began a proceeding to determine whether united must give up the seattle - tokyo route to generate competition . the fight has been on ever since , with different transportation officials ruling , at various times , in favor of united , continental and american . the seven major industrial powers , trying to keep financial markets calm before the u.s. presidential election , reaffirmed their current policy of stabilizing the dollar . but their joint statement was so much vaguer than previous declarations that it could prompt the very market volatility the governments want to avoid , and tempt markets to push the greenback higher than the governments deem desirable . by using different , less specific language to describe its dollar policy , the so - called group of seven set off speculation at world financial meetings here that it would now tolerate a higher dollar than in the past . u.s. officials , anxious to squash that interpretation , insisted privately that the seven countries , which have been intervening in currency markets all year to keep the dollar from rising or falling too much , hadn't deviated from past policies . the officials said the governments would be continuing to try to keep the dollar within the same ranges in which it has fluctuated for months . but currency traders this week may be led by the language change to try to push the dollar to new highs and test the governments' will . last week , the dollar closed at marks and yen . in tokyo monday , the u.s. currency was trading at about yen at midmorning . finance ministers and central bank governors of the group of seven countries , also called the g - , met over the weekend at a secluded villa here before the opening of the joint annual meeting of the world bank and international monetary fund . they emerged with a communique that celebrated the strength of the world economy , the decline of the u.s. trade deficit and of japan's surplus , and their own recent success in stabilizing the dollar within a secret range of exchange rates against the west german mark and japanese yen . the group of seven countries are the u.s. , japan , west germany , britain , france , italy and canada . during the closed meeting , the seven countries were warned by imf managing director michel camdessus that the reduction of trade imbalances will grind to a halt next year unless further policy changes are made or the dollar is permitted to drop further once a new president takes office . but the analysis , which was also reflected in a public economic forecast the imf issued , was rejected by most of the seven governments as far too pessimistic . treasury secretary nicholas brady , who took office just days before the g - meeting , said little during the session , according to officials present . they said mr. brady generally deferred to the other u.s. representative to the group , federal reserve board chairman alan greenspan . the treasury secretary was said to have assured the other officials that he would be following the course laid down by his powerful predecessor , james baker , who had dominated the g - . the new secretary is keeping a low public profile at the meetings , his first appearance in a world economic policy forum . at yesterday's closed preliminary session of the fund and bank , the treasury broke recent precedent by declining to provide a text of mr. brady's remarks ; all of the major foreign officials' remarks were published , as mr. baker's had been in the past . officials from japan reported that mr. brady pledged that the u.s. would place the " highest priority " on reducing its budget deficit , as part of the effort to reduce world trade imbalances . but u.s. officials later said that mr. brady had only promised that deficit reduction would be one of the highest priorities , not necessarily the first priority . the g - communique said " inflation pressures are being contained , " and implied that further rises in interest rates aren't seen as necessary . but on exchange rates -- the most sensitive subject in such communiques -- the group departed from its past three declarations by dropping specific warnings to currency markets that driving the dollar too low or too high , or engaging in " excessive fluctuation " would be " counterproductive . " that formulation , introduced last december and repeated in april and at the june toronto economic summit , was the basis for the success this year of the g - in keeping the dollar within the unpublished range of " stability . " instead , the weekend communique settled for saying simply : " ministers and governors emphasized their continued interest in stable exchange rates among their currencies . yesterday , u.s. officials said that , despite the change in language , the seven countries had explicitly agreed to stick with all of their previous secret agreements on the dollar , and would be continuing to intervene in currency markets to try to enforce the same secret range for the greenback they had been enforcing for months . a suggestion at the meeting that the range be changed was understood to have been quickly dropped . that range is presumed to be between roughly german marks and german marks and the dollar is currently near the top of the band , being held there by massive government dollar - selling . several senior u.s. officials said the language was changed merely to avoid what they said was a " misinterpretation " of their position after the june toronto summit , the most recent time the more detailed formulation was repeated . at that time , some currency traders and one major newspaper , the new york times , reported that the g - policy had changed and that the group was inviting the dollar to rise . ironically , however , the new language immediately set off its own round of differing interpretations among some officials and at the financial meetings here . they viewed the new language as an invitation to a higher dollar , because it seemed to endorse the current level , which is near the top of the range . their reasoning was that the current level might be the middle of a new range . some were wondering if the dollar range had been shifted upward and a few european officials were privately hinting that the u.s. wanted a higher dollar to help vice president george bush's election chances . but the u.s. and some other countries moved to try to squash those interpretations . in a round of press briefings , several of the finance ministers said the language change wasn't a big deal . a senior u.s. treasury official told reporters the declaration was " a clear statement of the desirability of the status quo " and that it was " very descriptive of the present situation . " he said " you cannot expect to see the same language go on and on and on . " british chancellor of the exchequer nigel lawson dismissed the notion that things had changed and called the communique " a strong reaffirmation " of past " accords . " on other matters , the g - communique once again supported the so - called baker debt strategy , which calls for case - by - case talks between debtor nations and banks and stresses new lending rather than debt relief . a somewhat different proposal , opposed by mr. baker , is expected to be floated here this week by japan , but not formally proposed . the communique hailed the g - process of coordinating economic policies , and the recent round of anti - inflationary interest rate increases by central banks . the group pledged to continue altering policies where needed to reduce the u.s. budget and trade deficits , stimulate domestic demand in europe and preserve domestic demand growth in japan . the group called for continuing liberalization of world trade and of financial markets , and called on the newly industrializing countries of asia to open their markets to foreign goods and let their currencies appreciate . while the seven governments were content for now to pat themselves on the back and leave their basic approach unaltered , the imf was warning that the global trade - adjustment process will grind to a halt next year unless further changes are made in g - economic policies or exchange rates , or both . in their annual , influential , world economic outlook forecast , imf economists predicted that , based on current policies and exchange rates , the u.s. trade deficit and the japanese trade surplus would both stop falling in . the imf forecast the u.s. current account balance -- the broadest measure of trade -- at billion for , about the same as the much - reduced billion it expects for . japan's current account surplus , which is expected to fall in to billion , is forecast to creep back up in to billion . a top imf economist , speaking anonyously , told repoers here over the weekend that the imf asumes that the g - will move next year " in a direction that is more sustainable " and added " we know that policies will change and that exchange rates will evolve . " a large demonstration was held by left - wing and church groups who argue that the rich countries are extracting too many resources from the poor . earlier , a german terrorist group claimed responsibility for an attempt on the life of a senior german finance ministry official and a top german imf official was beaten . banks have been bombed in west berlin . about a year ago , money men around the globe had an intoxicating dream . they envisioned droves of people buying stock in new york , adding more in hong kong , selling in tokyo , swapping in zurich , arbitraging in london . the world would be one big stock market in practically no time at all . but somehow that dream has gotten misplaced . you remember what was supposed to happen . markets all over the map would be crammed with multinational and indigenous stocks , big securities firms and banks would be ensconced in every square foot of space they could find in every money center , roving herds of institutional investors would graze on futures and options around the world and around the clock . the little guy ? teachers in biloxi would be buying pieces of jaguar plc even though most couldn't afford the car . mechanics in portland would gaily use dutch guilders to snap up shares of n.v. koninklijke nederlandse vliegtuigenfabriek fokker , though none of them could pronounce the name or knew that the outfit once made planes for the red baron . so we showed up for it , and for awhile there was enough action to make it appear that the dream of one big stock market might quickly become reality . then came the october crash -- and with it a bloody nose for the whole idea of globalization . one marked characteristic of the crash was a wholesale dumping of foreign stocks and a retreat to home markets . " the brits sold swiss and german stocks and went home . the swiss were pulling out of the u.k. and u.s. , " says gordon bowyer , president of credit suisse asset management , a new york - based unit of credit suisse . " in that sense , globalization failed . " in the u.s. alone , foreigners dumped a net billion of equities in the fourth quarter of and another net million in the first quarter of this year . for their part , u.s. investors sold a net billion of foreign shares in the fourth quarter -- billion in tokyo alone -- before adding a measly million to their portfolios the following three months . " investors world - wide remain risk - averse and pessimistic , " says mr. bowyer . none of this means that the era of global equities touted by the money men has ended almost before it began ; a bloody nose isn't a death sentence , and the process of globalization has gone too far to be reversed . big , experienced institutional investors and sophisticated individuals with deep pockets are still in foreign markets , probably to stay . and tremendous strides in telecommunications technology , the deregulation of markets , greatly increased capital flows , the hunger for diversification -- all these will gradually but inexorably push still more money into investments abroad . what it does mean , however , is that the globalization process has lost a lot of its steam . the express is now a local . countless marginal players -- individuals who plowed their money into foreign mutual funds and new institutional entrants seeking a quick killing overseas -- have disappeared . though markets in japan , belgium , holland and australia have been booming , and even italy has been reviving a bit , volume on most trading floors worldwide is a fraction of what it was . even in the anomalous tokyo market , which has been hitting new highs , there is as much fear as greed . last year , panicky foreigners unloaded a net billion of japanese equities , according to kazuhisa okamoto , tokyo - based chief investment strategist for nikko securities co. , and the confidence built since then is still only paper - thin . wall streeters say that so many investors now riding the tokyo rocket are so nervous that the slightest setback could send it from the ionosphere into the basement . as for financial concerns , many have greatly slowed their pell - mell expansion abroad . when the london market opened itself to all comers in late , says r. keith williams , an associate at accountants peat marwick in london , financial institutions " flooded in and bought everything under the sun without really knowing why . " one big bank , he recalls , admitted that its strategic planning consisted of buying a stockbroker because citicorp had one . you don't hear that kind of talk now , he adds . a peat marwick study of markets following the crash indicates that a lot of people weren't playing all keys on the piano to begin with . it said : " few { institutions } knew what to trade all day , or where ; or the advantages of doing so " ( had they tried during the crash they might have found , as others did , that some of the vaunted - hour market makers weren't answering their phones anyway. ) . few market watchers believe that the process of globalization will suddenly accelerate again , at least in the near future . the crash , they say , taught too many investors a lesson . " people learned that they'd lost sight of fundamental analysis . they believed multiple expansion could go on forever , and got carried away with the whole speculative flavor of international markets , " says david robins , first vice president of ubs securities inc. , a new york unit of union bank of switzerland . " globalization is going to go forward , but only slowly from now on . we had five terrific years in financial markets ; now we're in the first of maybe two or three very difficult years . " mr. sesit reports on international finance from the wall street journal's new york bureau . the securities and exchange commission said it wouldn't file any charges in the washington public power supply system municipal bond fiasco , but instead launched an effort to change the way the municipal bond market works . the commission did find plenty of blame to go around in the billion wppss default . but it took the view that the default reflects what one sec official called " systemic disclosure problems " in the municipal market . after releasing its long - awaited staff report on wppss yesterday in washington , d.c. , the sec proposed a new rule on municipal bond offering disclosure , issued an interpretation of underwriters' responsibilities that could prove to be controversial , and indicated that it would make related moves later . the sec's actions drew fire from several quarters . the decision not to bring charges in the wppss matter was criticized by some in congress and blasted by disappointed wppss bondholders . securities industry reaction to the sec's current foray into the municipal bond market was somewhat more muted , but still unhappy . opinion was divided about the impact the sec's campaign could have on the market , with some calling the likely effect minimal and others predicting some disruption . the agency's conclusion that additional disclosures probably wouldn't have prevented some of the wppss offerings from going forward runs counter to the plaintiffs' claim that the bonds could never have been marketed except for alleged misrepresentations and omissions in official statements . and because the sec report focuses its criticism on wppss defendants who either have settled or have been dismissed from the case , it may well help the remaining defendants , who aren't singled out for blame . the commission kicked off an offensive against abuses in the municipal bond market earlier this week when it authorized its staff to charge matthews & wright group inc. with fraud and other violations in that market . the report describes a chain of failures in disclosure of important information . the sec said wppss failed to disclose negative developments about the construction of its nuclear power plants , such as a budget increase . wppss bond underwriters , in turn , didn't attempt to verify the adequacy of wppss's disclosures , the report said . bond rating agencies also " relied to a large extent on representations by the supply system , " which didn't inform them of some significant developments , the report said . finally , the sec said , bond counsel didn't disclose major legal uncertainties surrounding the obligations of participating utilities to pay for the power plants if they weren't completed . it was a june washington state supreme court ruling on that question that finally pushed wppss into default . sec chairman david ruder said the commission decided not to bring charges for several reasons . he said that , among other things , the wppss matter already is being litigated privately and that the commission believes it can better use its limited resources elsewhere . shortly after releasing the wppss report , the sec held an open meeting at which it voted to propose a rule aimed at improving the quality , availability and timeliness of disclosures about municipal bond offerings . under the proposed rule , underwriters of municipal bond offerings exceeding million would be required to review for accuracy " nearly final " offering documents before bidding for an issue . the commission also said it plans to launch a special project to inspect unit investment trusts , which are groups of bonds from several different issuers packaged for sale to individual investors . such vehicles held a large quantity of wppss bonds . finally , the sec voted to release for comment its interpretation of the law concerning the obligations of bond underwriters to examine the accuracy of issuers' offering statements . the interpretation states that underwriters must have a reasonable basis for believing in the accuracy of strategic representations made in offering documents . this , more than anything else the sec is doing , worries the municipal bond industry . noting that the sec's reading of the law runs directly counter to the arguments made in litigation by the underwriters of the wppss bonds , mr.ruder said he found their view " rather shocking . " if underwriters persist in disagreeing with the sec about their responsibilities , the sec chairman added , he would be inclined " to try to impose by rule " the commission's view . " they ignore it at their peril , " he said . but for all the tough talk at the sec yesterday , bondholders , lawmakers , some securities industry members and others said the sec had done far less than they expected both in the wppss matter and in addressing industry abuses . " the sec isn't supposed to dodge the big ones , and that's what they're doing here , " said rep. ronald wyden ( d. , ore. ) , a member of the house committee that oversees the agency . in tucson , melvyn weiss , an attorney for the wppss bond buyers who are plaintiffs in the case , said , " the sec doesn't know anything about the marketplace . " bill nugent , a port angeles , wash. , investor who bought of wppss bonds in , called the sec report a " whitewash . " he continued : " the sec got into it , found it was going to take an awful lot of time and money , and backed away . " similarly , richard ciccarone , senior research analyst at van kampen merritt inc. , a naperville , ill. , municipal bond firm , said the sec's move toward improved disclosure is a step in the right direction , but not much more than that . marc lackritz , executive vice president of the public securities association , a bond trade group , said the wppss situation was unique and wasn't indicative of widespread problems in the industry . he said the sec's approach will make the process of issuing bonds slower and more expensive . austin koenen , chairman of the group's municipal securities division , argued that the sec's plan could drive some smaller firms out of business . he added that the sec's proposed rule requiring underwriters to obtain and review for accuracy copies of " nearly final " offering documents would expose underwriters to " tremendous liability . " arguing that the sec is trying to expand its powers , houston bond attorney robert doty predicted the agency's moves will raise costs and so impair the ability of market participants to comply with the limit on bond issuance costs imposed on certain municipals by the tax act . and one veteran wall street bond man simply called the sec's approach " totally unworkable . " but that assessment wasn't universal . " despite the protests of investment bankers , it's appropriate and it's doable , " he said . john connor contributed to this story . britain's securities industry is likely to eliminate jobs over the next five years , and london will lose business to other financial centers unless planning and employment practices are strengthened . those are two major findings of a study by a group of banks , securities houses and management consultants in london's financial district , known as the city . the report , based on responses from companies representing nearly of the city's work force , is sharply critical of the way much of the british and international financial industry in the city has managed its rapid expansion and contraction in the past few years . the city has " gotten itself into a fair mess " by failing to plan , train and develop employees , says rhiannon chapman , personnel director at london's stock exchange , a sponsor of the study . she said that during the bull market , the financial - services industry did most of its recruiting through the lures of dizzying salaries and fancy perks . now , with many financial markets lackluster , " nobody can afford " the short - term policies that bid up salaries and raised costs , she said . -- british securities - industry employment will fall to by from prior to last october's stock market crash . -- the rate of job creation in the city will fall to annually through from a rate in the recent past . -- overall , the city could create , or new jobs , by if companies take steps to improve training and development . federal regulators closed a virginia savings bank and a texas bank , and paid million to prevent the failure of another texas bank . the federal home loan bank board said it closed ultimate savings bank , richmond , va. , and sold its insured deposits to citizens federal savings bank , a unit of citizens savings financial corp. , a miami - based thrift - holding company with assets of about billion . citizens paid million , or about of insured deposits , to take over the deposits , the bank board said . citizens , which has operations in florida , california and ohio , said the transaction will give it entry into the virginia market . in recent years ultimate , which until recently was known as cardinal savings & loan , launched " an aggressive acquisition and development program " through its cardian mortgage corp. mortgage - banking unit and began a nationwide lending program financed by brokered funds and highcost jumbo certificates of deposit , the board said . as of july , the board said , ultimate had assets of million , liabilities of million , total deposits of million and negative regulatory capital of million . it said the bank's sole office opened friday as a branch of central bank & trust , fort worth . the fdic also said it agreed to contribute million to prevent the failure of guaranty national bank , an austin , texas , bank with assets of about million . it said the bank and its parent , central texas bancshares inc. , are being acquired by an investor group headed by david hartman , an el paso , texas , businessman . the investor group will provide an additional capital injection of million . the fdic said it acted after being notified by the senior deputy comptroller of the currency that guaranty national was in danger of failing . the canadian dollar , after sharp gains last week , is poised to make further advances . the main impetus for the renewed canadian dollar strength is the improved political fortunes of the ruling conservative party and the country's attractive interest rate . if public opinion polls continue to reinforce the likelihood of a conservative re - election victory , the canadian currency is expected to move higher , analysts say . graham sweet , vice president of foreign exchange trading at canadian imperial bank of commerce , expects the canadian dollar to weaken briefly once an election is actually called , but if and when a conservative victory becomes imminent , then " u.s. cents is a given . . . possibly cents . " the canadian dollar was quoted late friday at u.s. cents , up about cents on the week , even as the u.s. dollar rose against currencies of other major trading partners . last week's shift in sentiment toward the canadian dollar was triggered by the release of public opinion polls showing the conservatives moving into the lead in voter popularity . an election is expected to be called soon by prime minister brian mulroney , and a conservative victory would ensure canadian passage of a free - trade treaty with the u.s . both opposition parties are against the agreement . the yield on - day canada treasury bills is currently about , compared with at the beginning of the year . the canadian economy has been booming , and finance minister michael wilson told the house of commons this week that the bank of canada is tightening credit to fight inflationary pressures . " if you wait to act on inflation until you have a serious problem , you've lost the battle , " mr. wilson said . that firm inflation - fighting policy has widened the spread between canadian and u.s. rates . canadian treasury bill rates are now about percentage points above u.s. rates , compared with a spread of points in january and a low this year of points in early august . robert burgess , general manager of foreign exchange trading at toronto - dominion bank , said the bank of canada's tight money policy is a good opportunity for foreign investors . the canadian dollar peaked at about u.s. cents in mid - july and fell steadily to just below the - cent level in late august . the bearishness was prompted by the canadian senate , an appointed body dominated by liberals , pledging to stall any vote on enabling legislation for the canada - u.s. free - trade agreement until after a federal election . the legislation cleared the house of commons on aug. and only requires senate approval to become law . the agreement is expected to clear the u.s. congress shortly . both the opposition liberals , who until recently have been leading the public opinion polls , and new democrats have vowed to scuttle the free - trade deal if they attain power or hold the balance of power in a minority government . " just the threat of the liberals or the ndp getting elected and squashing the free - trade bill " had sent the canadian dollar lower in recent weeks , said mr. sweet . however , the latest gallup poll gives the conservatives of decided voters , with the liberals and new democrats at and , respectively . another poll by environics research confirmed the gallup result . michael bowick , senior foreign exchange trader at royal bank of canada , said the canadian dollar's gain was simply " a question of the market in general being short the canadian dollar . it was oversold . " the canadian dollar's rise last week was further reinforced by the country's trade figures for july , which were " at the high end of expectations , " toronto - dominion's mr. burgess said . the trade surplus in that month widened to c billion ( us billion ) from c billion in june . traders agree that the bank of canada will continue its longstanding policy of intervening in foreign exchange markets only to slow any sharp movements in the canadian dollar , whether up or down . " there's no magic level that the bank of canada is looking at " before it intervenes , said mr. burgess . the u.s. dollar ended mixed , capping a week in which the market's dollar bulls succumbed to the wishes of u.s. and west german finance officials for stability in exchange rates . the dollar was also quoted at yen , gaining from yen in new york late thursday . the u.s. unit fell back slightly against the mark late in the session as dealers in chicago's international money market covered short positions ahead of the weekend . dealers in new york added that many of their number were also peeling back long dollar - short mark positions in anticipation of further dollar losses early monday . the u.s. currency has gained against the mark since being quoted at marks sept. in new york . but the bulk of these gains came in the three hours following the release of the july u.s. merchandise trade report last wednesday , when the dollar jumped from marks to around marks . since then , trading in the u.s. unit has been confined to a narrow range . the dollar inched up in early trading monday against the yen , having opened at yen , up yen . mr. stoltenberg's remarks served to underline the general message that traders have been receiving from finance officials for the past few weeks : the governments and central banks of west germany and the u.s. are determined to keep the dollar steady , no matter what the cost to treasury coffers . on the new york commodity exchange , gold for current delivery dropped to ounce . estimated volume was a moderate to heavy million ounces . in hong kong , gold was quoted monday at . time inc.'s home box office unit , eager to take advantage of the growing hispanic entertainment market , said it plans to offer its pay television subscribers the option of watching movies and other programming in spanish starting next year . while there is a growing selection of spanish programming on local broadcast stations and cable systems , none of the major national broadcast or cable networks currently offers programming in spanish . some movie studios have started to release selected films in both spanish and english . last year , columbia pictures entertainment released a spanish version of its " la bamba , " about hispanic singer richie valens . home box office is the largest pay cable television network , with more than million subscribers to its hbo and cinemax services . viacom inc.'s showtime/the movie channel , the second largest service , said it is considering similar plans . hbo will provide the spanish audio signal via satellite to cable television operators . subscribers with stereo television sets will be able to receive the spanish audio dubbing for selected movies and other programs by selecting the " second audio program " option available on all stereo tvs . cable operators may decide to offer the devices to subscribers , hbo said . home box office said it found cities in seven states where the hispanic population is of the total . about two million homes in those cities have cable television available , but only of those homes subscribe to hbo . hbo chairman michael fuchs said hbo research shows that hispanics tend to watch television and attend movies at a higher rate than the general population , so the spanish language audio option " represents an important new business opportunity for us and the cable television industry . " hbo also said that according to its research , the u.s. hispanic population is million and is growing nearly five times faster than the general population . about of hispanics in the u.s. use spanish as their primary language while cite spanish as the language they most often use at home , on the job or at school , hbo said . sometimes a situation is so bad that it looks good . such is the case with cocoa these days . the commodity has been described by one analyst as having " the most bearish set of fundamentals of any commodity being traded . " consider : there is a record world oversupply of cocoa beans . current crops are arriving at ports earlier than expected , which indicates not only bumper production but also that they have escaped damage from any bad weather that may come along in the fall . prices have plunged to - year lows . moreover , the cocoa agreement that tries to provide some support for the market by buying supplies for its buffer stock is itself in danger of dying . a united nations agency predicts three more years of surplus production and expressed fear that the agreement won't survive . futures traders love dire circumstances like these . they recall that copper was in a similar situation in the early s , only to boom to record prices last year . they think cocoa might be a likely candidate to create " overnight millionaires . " one of the qualifications to be such a commodity is that the statistical picture of unrelieved gloom applies for the foreseeable future . then , if a turnaround comes , the traders who guess right become rich and , moreover , legendary for their acumen ; man doesn't live by profits alone . " i've received so many questions about cocoa in that vein recently , " says sandra kaul , analyst for shearson lehman hutton inc . " but i can't foresee more than a momentary upward ( price ) blip this fall at best . over the long term i'm as pessimistic as the rest . " ms. kaul says that , despite record stock levels , good quality cocoa is in tight supply . that's mainly because of the refusal of the ivory coast , the world's top producer , to sell at less than a fixed high price . on friday , however , the ivory coast sold some beans at slightly less than the price it had been seeking . u.s. imports have dropped and consumer stocks of the beans may be low , ms. kaul says , while the chocolate industry is entering its peak consumption period . this combination of factors may trigger demand for the hard - to - get good quality beans and prop up their prices somewhat , but beyond that , the current bearish fundamental picture will prevail , she says . but he says he'd wait for a sharp drop in the open interest - contracts outstanding that haven't been offset by opposite trades or delivery of the commodity -- before buying into the cocoa market . " the point at which i would regard the open interest as down sufficiently to encourage me to buy cocoa is a matter of judgment , " he says . " ideally , there would be , say , a day of active trading , with heavy liquidation both of contracts and open interest and a bounce - back in price . but there could be other circumstances , also . " in the absence of a big event , he advises caution . " purchase march or july options -- but only lightly -- and hold them and wait , " he advises . with oil prices at the lowest level in more than a year , traders this week will be watching both the american petroleum institute and the organization of petroleum exporting countries . will the big drawdowns of crude inventories evident in recent weeks in the u.s. continue ? if so , it should revive oil prices , if only briefly . but such a rally could be brief indeed unless there's new evidence that a tentative late - september meeting of opec's price - monitoring committee , much in doubt at the weekend , really is going to be held after all . barring bullish news , some oil analysts and traders look for west texas intermediate crude , currently to a barrel , to drop toward . a few see it headed toward - or less . treasury bond futures prices are likely to continue the rally ignited late friday by the steep drop in oil and gold prices , traders said . but the rally may be short - lived as caution sets in ahead of wednesday's release of u.s. trade deficit figures for july . december treasury bond futures jumped / to close at / , after trading as low as / earlier in the day . traders said the drop in commodity prices was taken as another indication that inflation fears that have weighed on the fixed - income markets in recent weeks have been exaggerated . the ensuing price rise triggered further buying from large commodity funds , traders said . ms. gibbs said that dean witter predicts a july trade deficit of between billion and billion . " anything above billion is negative for the market , " she said . june's trade deficit was billion . this week the cattle industry will watch for signs that consumer demand for beef is slipping . since the labor day holiday , the high price of beef has spurred consumers to begin buying more pork . supermarkets are fueling the shift by promoting pork more than beef , said thomas morgan , an analyst at sterling research corp. , arlington heights , ill . on friday , traders expect the agriculture department to report that the number of young cattle placed on feedlots for fattening in august declined from a year ago . the department conducts a monthly seven - state census of feedlots . because of varying estimates of the number of fattened cattle sold to meatpackers in august , analysts are divided over whether the total number of cattle on feedlots increased . there's a story my wife likes to tell about her college years . assigned a term paper on international relations , she chose to write a history of u.s./canadian trade provisions . the paper , lengthy and well - documented , came back with an f on it . when she asked for an explanation , the professor declared , " well , you know , canada's not really a foreign country . " perhaps americans do tend to take canada for granted . after all , the - mile border between the two countries is the longest unguarded frontier in the world . the two nations have a language and a culture in common . and recent negotiations have led to a linked , binational approach on defense and the environment . but before we start chalking up canada as the st state , we'd do well to watch " canada : true north " ( pbs , mondays , sept. - oct. , p.m. edt ) . for many americans , the four - part series will come as something of a revelation . co - produced by wtvs detroit and the national film board of canada , it explores the land , the heritage , the people of our neighbor - nation -- so near , but so little known . from the beginning , canada was defined not in its own right , but in relation to other countries -- first as part of the british empire , then as part of the u.s. sphere of influence . for canada , there was no majestic birth of a nation -- no war of independence , no founding fathers . there was no great moment when a national consciousness was forged . in fact , it wasn't until that canada adopted a flag of its own . the key canadian war , the war of , was a loss for canada ( and britain ) -- or at best a draw . since then , canadians have had a lingering fear that they might be swallowed up by their southern neighbor . through the s , canada clung proudly to its british colony status . but in the mid - s , canada's th prime minister , william lyon mackenzie king , sought a change , an expanded role for his country . forging pacts with the u.s. , he tried to throw off british influence . by the early s , canada had gone from being a british colony to a u.s. colony . when prime minister john diefenbaker tried to untie the knots with the u.s. , he was rejected by his own people . today , " the relationship " concludes , canada has the mixed blessing of being linked to a superpower . you're affected by every twitch and grunt . " while packed with interesting old black - and - white footage , " the relationship " is perhaps a bit slow , a bit of a history lesson . then too , it suffers from a peculiarly canadian malaise , talking as much about what canada isn't -- britain or america -- as what it is . if you're going to watch just one program in this series , try next week's " where is here ? " written by david macfarlane and directed by sturla gunnarsson , it follows a team of authors , dispatched by the editors of saturday night ( canada's harper's or atlantic ) , as they roam canada , trying to describe the place , the people , the psyche . canadian writers such as mordecai richler , robertson davies and john kenneth galbraith journey from the heart of the cities to the barren plains of the arctic tundra . they visit barley fields and oil rigs , rodeos and fishing villages . they talk to farmers and indians and drinkers in small - town bars . a farmer , bob legrange , lovingly runs his fingers through the rich black loam of alberta . margaret atwood , the writer , drives eight hours north of toronto to return to the forests where she played as a child . lacking a strong sense of national identity , canadians define themselves in terms of the land . in this film's splendid color photography , it's easy to see why . long , still , deep blue rivers ; golden wheat fields bending in the breeze ; lush green forests -- this is one handsome , photogenic country . if the photography makes " where is here ? " lovely to watch , it is the subjects of this documentary -- the writers -- who take it a step beyond the travelogue . their quirky observations make this segment an absorbing , insightful film . in england , in the th century , that place was africa . hence joseph conrad's ' heart of darkness. ' . for some people , it's the desert . you go out into the desert to make the spiritual journey . for canadians , it's the north . " according to mr. davies , the canadian psyche is " very sober , very quiet , very introverted , and full of strong feeling . " canadians , he says , while on the surface so similar to americans , psychologically are closer to scandinavians , or even soviets . all of this comes as news to me -- and probably to many americans . but then again , so does most everything about our invisible neighbor , and " canada : true north . " mario guerra and orlando gutierrez try to be good house guests by tidying up and doing their own cooking , but they have overstayed their welcome in the venezuelan embassy -- by nearly a decade . the two former national guard officers received diplomatic protection in july when the sandinistas toppled their boss , dictator anastasio somoza . but their hopes for a quick exit vanished when the sandinistas refused to grant them safe conduct out of the country . now , sequestered in a crumbling old mansion topped by a venezuelan flag , the two hold the world record for length of embassy asylum : nine years , one month and days -- and counting . " we are buried alive here , " moans mr. gutierrez , a - year - old former colonel , as he looks up from the wire bird cage he is building on a cluttered patio . when the cage is done , he will rip it apart and start over again , for perhaps the thousandth time , just to keep occupied . " this is an outrage , " he fumes . mostly , it is outrageously dull . " we live lives of horrible boredom , " says mr. guerra , a one - time captain who , at , is losing his hair and doesn't bother to shave regularly . but it was gutted by looters after the revolution , and now molders in the tropical heat . the days bring few surprises . up at dawn , the two men put on shorts and sandals to roam the echoing halls . a tour around the swimming pool , empty now except for dried leaves and coconuts , a game of tennis against the courtyard wall , and the minutes turn into mind - dulling hours . " sometimes you peel a banana , then throw away the banana and keep the peel , " capt. guerra says . the men have access to newspapers , radio and television , and the captain recently completed a correspondence course in radio and television repair , as the diploma hung in his purple paisley - wallpapered room testifies . now he's tackling english by mail . but the men are cut off by the lack of a phone , and by rules that limit family visits to tuesdays . if it is any consolation , the former guardsmen are in good company . over the years , scores of influential latin americans , caught on the wrong side of a political trend , have checked into the nearest embassy . one of the more intriguing mysteries of post - revolutionary nicaragua is : why are the sandinistas singling out the captain and the colonel ? since , hundreds who sought embassy asylum , including national guard officers of higher rank and more dubious reputation , have been granted safe - conduct passes . diplomats and human - rights monitors can only speculate that the two stragglers must have made some powerful personal enemies during the years when gen. somoza was firmly in charge and the sandinistas were the gang that couldn't shoot straight . the colonel may have picked on the wrong people when he was the warden of the country's most - notorious prison. ( he was known as " el ranger , " because he had trained with u.s. rangers at fort benning , ga. ) . he bragged that he admired hitler . an executioner . horrible . " to which the colonel , a stout man with massive arms , replies : " the victors are the ones who write the histories . " it is harder to figure out whom mr. guerra crossed during his career as a policeman and infantry officer . one account , related by a man who used to be holed up in the embassy with him , was that capt. guerra accidently gunned down a man carrying tamales during street fighting , thinking they were bombs . the dead man's brother is said to be a high - ranking interior ministry official . a more widely - held view , as expressed by one latin american diplomat who closely monitors their plight , is that " it's a quarrel over skirts " -- that is , a woman is involved . to wit , the captain , a tall , blond man often mistaken for an american , may have cheated on his wife a few too many times . capt. guerra professes not to know exactly why he hasn't been allowed to leave . " i think i'm here for personal revenge , " he says , " but i don't know whose revenge . " the men have plenty of time to brood , too , about the missteps in that led to their predicament . mr. guerra bypassed a last - minute flight out , thinking the embassy route would be more secure . the colonel unwisely took president somoza's advice to the troops that they stay in place -- given as he himself was preparing to fly the coop . both men bolted for the salvadoran embassy , where they stayed for a year and a half before the venezuelans agreed to take them . venezuelan officials , who provide the men with food and medical supplies , decline public comment , citing the diplomatic sensitivity of the issue . but venezuelan diplomats are known to be fed up with the asylum burden , and worried that it may never end . " i'm afraid they'll be there until they die , " one official says . the captain and the colonel are beginning to feel the same way . but no sooner did family members scrape together a down payment than the sandinistas jailed the politician as part of a general crackdown on the opposition . dejected , the captain penciled over his doorway the famous last words of an indian warrior awaiting execution by the conquering spaniards : " here ended my roads and my days . " jonas savimbi has been fighting for angola's freedom for years . first he battled portuguese colonialists and then fought a marxist regime and the cuban troops propping it up . the angolan - cuban operation is kept afloat with massive support in weapons and aid from the soviet union , which also has provided red army officers and advisers . now mr. savimbi fears that u.s. - mediated peace talks may leave his unita forces facing a - man cuban army with little outside help . since vietnam , the u.s. has had a rather spotty record negotiating peace for other people . much of the afghan mujahideen oppose the geneva accords to which they were not a party . the nicaraguan contras tread water , while jim wright gives negotiated peace a chance . now the state department has been in brazzaville , congo , talking peace with cubans , angolans , south africans -- but not mr. savimbi . mr. savimbi's concerns deserve a serious hearing . since this process began last july , south africa has withdrawn its soldiers from angola . the brazzaville negotiations are for a timetable on the removal of cuban troops and south african withdrawal from namibia . the parties are said to be deadlocked over the timetable for cuban withdrawal . pressure on chester crocker , u.s. assistant secretary of state for african affairs , to complete a deal before he leaves office in january is intense ; a signed agreement would be the crowning jewel of his career . but mr. crocker should remember that the purpose of diplomacy is not merely to reach agreements , but to also lay down conditions that prevent them from becoming merely scraps of paper . in the past , paper has never been a good defense against tanks . mr. savimbi has just told western reporters that the agreement being midwifed by mr. crocker doesn't provide any incentive for the marxist regime to open peace talks with him . rather , it encourages it to use freshly arrived cuban troops to crush his movement as quickly as possible . the cubans have recently shipped in troops along with additional mig - fighters that will give them complete air superiority . the soviets and cubans have supplied at least billion in arms to the angolan regime in the past year alone . u.s. aid to mr. savimbi is only million a year , and the supply routes to him are very uncertain . mr. savimbi asks . a report last friday from the angolan capital of luanda by the new york times's james brooke suggests that graves are clearly what the angolan government has in mind for mr. savimbi and unita . " we don't need cuban troops to annihilate unita , " the angolan army's intelligence chief said . democratic senator dennis deconcini is sponsoring a resolution calling for continued u.s. aid to mr. savimbi and free elections in angola . but the party's standard - bearer , governor dukakis , has said , " i think our support of savimbi and unita is absolutely bizarre . " he says he would recognize angola's government . the times report said that angolan officials , unsurprisingly , " openly hope " that mr. dukakis wins in november . with the angolan government's real intentions becoming perfectly clear , jonas savimbi should not have to face cuba's colonizing army without adequate american support . burma's parliament approved multiparty elections for this year . in an emergency session of rangoon's people's assembly , the lawmakers voted to hold a general multiparty election in about three months . such balloting would be the first since . despite the move , protesters marched in the capital and in mandalay to demand an interim government to supervise the voting . president maung maung , addressing parliament , indicated a tougher stance against those defying law and order , saying troops had been ordered to quell the demonstrations . an attempt by former premier u nu to form an alternative government in burma apparently foundered , failing to gain international recognition . opposition activists in poland united behind solidarity founder lech walesa as he convened a meeting with about advisers to forge a strategy for talks with warsaw officials . he is expected to meet with a government aide this week to arrange a date for the talks , which are expected to include a call for the legalization of the union . tens of thousands of iraqis paraded past the u.s. embassy in baghdad to denounce u.s. senate approval friday of sanctions against iraq in response to baghdad's alleged use of poison gas against kurdish rebels . assailants in haiti attacked parishioners during a roman catholic mass at a church in port - au - prince . the men , armed with guns and machetes , killed at least three people , injured about and burned the building down . the priest celebrating mass has been critical of haiti's military regime . bush's choice for a gop post resigned as a result of a published report that he compiled figures in on the number of jews in a labor department agency . meanwhile , dukakis conferred with democratic congressional leaders to discuss defense policy in an effort to bolster his image on national - security and foreign - policy issues . snow dusted parts of yellowstone national park in wyoming , helping firefighters battle forest fires that have charred more than a third of the - million acre park . rain also aided the effort . federal officials said they would send an additional soldiers to help fight the fires in the west . health officials said more than people have contracted diarrhea from tainted water , and about have died from the ailment . mexico's congress certified the ruling party's carlos salinas as winner of july's disputed presidential election . the lawmakers voted - saturday , removing the final procedural hurdle faced by salinas , who is to take office dec. . the yonkers city council reversed itself early saturday and approved a court - ordered housing desegregation plan . the move came as fines against the new york city suburb hit million a day and hundreds of workers faced layoffs . a federal judge is to meet with the parties in the case wednesday to discuss modifications to the plan . pope john paul ii appealed for reconciliation , racial harmony and human rights in southern africa as he celebrated mass in harare . the pontiff had criticized south africa's apartheid system saturday upon his arrival in zimbabwe for the start of a - day , five - nation tour of the region . a car bomb exploded near the pakistani embassy in afghanistan's capital of kabul , killing at least people and injuring about others , tass reported . the soviet news agency blamed afghan guerrillas . five people were said to have been wounded . prime minister shamir urged israel's arab neighbors to find palestinians other than the plo to join israel in mideast peace talks . in the occupied territories , palestinian activists stabbed and wounded an arab physician , and the army said other arab doctors had recently been attacked for allegedly collaborating with israeli authorities . hurricane gilbert swept toward jamaica with mph winds , and caribbean officials issued warnings to residents in the dominican republic , haiti and cuba . along the gulf coast , thousands of residents returned to their homes as the remnants of hurricane florence weakened over land . one death was linked to the storm . stars and stripes won the best - of - three defense friday off san diego against new zealand's monohull sailing team to retain the america's cup . new zealand , however , has threatened to challenge the eligibility of the u.s. catamaran in court . mats wilander of sweden beat czechoslovakian - born ivan lendl , three sets to two , to win the u.s. open tennis championship . done in by real losses , american savings & loan association of stockton , calif. , is finding rescue in a package made possible in part by paper gains from a one - day surge in the bond market friday . at a.m. eastern daylight time saturday in washington , d.c. , federal home loan bank board officers , some dressed in blue jeans and t - shirts , waited wearily in the bank board's office for a critical telephone call from kenya . board member lawrence white was traveling there , and his vote was needed for an agreement with robert m. bass group inc. to finance the rescue of the s&l , financial corp. of america's main subsidiary . when the call finally came , cheers went up . nobody cheered the country's bond traders and institutional investors . yet they seem to have been unwitting catalysts of the weekend's events . only hours before , texas billionaire robert m. bass , the head of the group , had called off negotiations , rejecting a demand that the group come up with a way to cut the bank board's contribution to the rescue financing by million . bond traders and investors were unaware of the drama in washington . the one - day pop shrank the paper losses on american savings' portfolio of fixed - income securities by about million . that , along with several last minute recalculations helped make the numbers come out right on the cost of the rescue package , satisfying the board as well as the bass group . wherever the bond market heads now ( yesterday it was down a fraction ) , the financial terms of the rescue agreement remain fixed . the agreement announced labor day evening still needs internal revenue service and california regulatory approvals . but if it is completed in a few weeks as the parties hope , it will close a major chapter in the s&l industry's inglorious decade of the 's . with billion in assets , american savings was for years the nation's largest thrift institution . its troubles have come to symbolize the failings of aggressive , high - risk s&l managements around the country . until the bass group acquisition is completed , the s&l will be controlled by federal regulators . the action means that financial corp.'s shareholders and debt holders probably will be wiped out , because the thrift represents essentially all the company's operations . if a one - day paper surge made it easier to finance the rescue , the advantages to the bass group are both tangible and long - term . for injecting million in new capital into american savings , it will largely own and control an institution to which the bank board has committed as much as billion in assistance . a provision of the agreement permits the bass group to employ up to billion in american savings assets in leveraged buy - outs and other potentially money - making merchant - banking transactions . the bank board hasn't disclosed all the details of the agreement , but detractors have already emerged . some members of congress are irked by the bank board's insistence right to the end to negotiate exclusively with the bass group and to exclude ford motor co. , which had tried and failed to acquire the s&l repeatedly . others will probably attack the provision adding to the takeover clout of the bass group , an increasingly active takeover player in recent years . in the past it has participated in buy - outs of taft broadcasting co. and bell & howell co . still , the fact remains that the bass group -- headed by publicity - shy robert bass -- will remove a huge cloud from over the heads of federal regulators . american savings continues to be highly sensitive to interest - rate swings , and its core deposit base has been weakening . now , in return for its extra financial leverage , the problem of strengthening operations belongs to the bass group . besides getting into takeover and merchant banking , it may manage american savings' other investment operations more aggressively . the s&l's hands have been tied in recent months by restrictive agreements with federal regulators . on the retail side , american savings with its huge branch network also is still a major force in the california market if skittish depositors and employees can be reassured . the bank board's approval of the deal over the labor day weekend didn't come easily . according to officials , executives and advisers familiar with the negotiations and with the troubled thrift , a variety of forces converged on the bank board in recent weeks to help bring matters to a climax . -- the threat of a possible bankruptcy filing by fca as early as this week . such a filing , which was to be considered by financial corp.'s board today , wouldn't have hurt american savings' depositors , who are fully insured by the federal savings and loan insurance corp . but a bankruptcy filing by fca could have touched off a run at american savings that ultimately could have forced the fslic to borrow cash from the federal reserve . -- a walkout last friday by the bass negotiating team after bank board chairman m. danny wall insisted on the million in concessions from the bass group . mr. bass , who had flown in from fort worth hoping to strike a final deal , told mr. wall he was heading home , although some of his aides would remain in washington . bank board spokesmen sought to portray the situation as a " break " in negotiations . the talks resumed only after the bank board found other ways to reduce its cost estimate . ford had been close to buying american savings three times in the past year , but each time the deals fell apart for reasons that remain in dispute . a ford lobbyist was waiting in the bank board building in washington late friday , apparently seeking an audience he never got . for the bank board , last weekend's rescue effort was the second time around with american savings . after the s&l reported a huge loss and sustained a billion deposit run in , then - bank board chairman edwin j. gray forced out parent company financial corp.'s chairman , charles w. knapp , who had become famous for aggressive lending and accounting policies in the early s . mr. gray installed william j. popejoy , a veteran thrift - institution executive and former board official who began a four - year effort to turn around financial corp . it didn't work , and by early mr. gray was scouting for a buyer . results were being dragged down by delinquent loans and foreclosed real estate . that provided big profits while interest rates were falling , but by april , rates were headed upward . a short list of those with some interest was drawn up , and prominent on it was ford motor -- ironically , the bass group wasn't yet in the game . and , some who have been close to the scene now show that ford probably would own american savings today if not for a perverse twist of events caused by last fall's stock - market crash . surprisingly , the crash relieved the pressure on the bank board to complete a deal with ford , allowing the problem to go unresolved for almost another full year . one of the nation's most profitable companies , ford badly wanted american savings . ford could use the tax deductions generated by the billions of dollars of unrealized losses in the s&l's portfolio . and american savings' network of branches , all in california , would greatly expand ford's thrift - institution unit , first nationwide bank . the billion capital infusion required would have been pin money to ford . for a while , things went ford's way , too . when the sides met in new york on friday and saturday , oct. and , the paper loss had hit billion . bank board officials were scared . they feared american savings might be hit with a wave of collateral calls on monday from wall street firms that had lent it about billion based on earlier values of the securities . in that tense atmosphere , mr. martin and mr. frank shook hands on the outline of a deal and agreed that lawyers for both sides would meet in washington the following tuesday to draft the necessary documents . the deal was also subject to approval by the other board members . meanwhile , on sunday , oct. , representatives of all the federal banking and thrift regulatory agencies -- including the federal reserve and the treasury dept. -- drew up a still - secret contingency plan in case wall street immediately demanded repayment of about billion of similar loans to other banks and s&ls if american savings missed its collateral calls . then the next day , as officials of the bank board and first nationwide met in washington , the bond market staged one of its biggest one - day rallies ever . no longer faced with an imminent crisis , the bank board officials wanted to renegotiate . mr. martin contends that he had agreed only on " a format " for the deal with mr. frank , not on exact terms . whatever the reason , no deal was signed , and negotiations broke off in about days . talks began again with ford in november . and twice in the next two months -- just before the thanksgiving and christmas holidays -- ford and the bank board were close to a deal . each time , however , ford's accountants feared that because the fslic had been declared insolvent by its auditor , any fslic notes ( promises that fslic would cover future losses on certain american savings assets ) couldn't be carried without qualifying footnotes in ford financial statements . on jan. , this newspaper reported that ford and the bank board had again agreed on all terms except the fslic credit issue . mr. frank maintains the bank board broke off talks because it believes ford leaked news of the near - agreement . " roger { martin } told me that he had been ready to do a deal the night before { the story appeared } , but that now he wasn't , " mr. frank says . mr. martin denies making such a statement . " that's news to me , " he says . ford reopened talks with the bank board in march , after mr. frank resigned to become postmaster general . and it submitted one more proposal in april . but by then the bank board had another serious bidder , and ford officials felt their final offer was used as more of a stalking horse than anything else . the other bidder was the bass group , the main investment vehicle of robert bass , a soft - spoken - year - old who has emerged as a major deal maker in his own right since setting up the bass group in . ironically , the bass group initially wanted only the american savings subsidiary that manages the s&l's troubled loans and real estate . mr. carl , a former washington lawyer and salomon brothers executive familiar with the bank board and financial corp. from previous jobs , soon found himself talking to mr. martin at the bank board . a new dance began even as ford continued to come calling . mr. carl and mr. martin began exchanging letters and meeting face to face . mr. carl advanced several proposals ; mr. martin rejected them as too costly for the fslic. responding to one bass proposal in january , mr. martin said , " christmas is over and santa claus has gone home . " for effect , mr. martin dated another rejection letter feb. -- valentine's day -- though it was actually written on feb. . but within a week mr. carl was back , and this time mr. martin made a pivotal decision . he gave a team of four experts -- two lawyers and two economists -- authority to negotiate with the bass group . working primarily with mr. carl and david bonderman , a former washington trial lawyer who spearheads many of mr. bass's negotiating efforts , they drafted a " term sheet " of about pages outlining the structure of a deal and its basic economic terms . the negotiations were intense , but not without light moments . the atmosphere eased -- mr. carl burst out laughing ; mr. bonderman took a moment to get the joke . mr. carl used antics to make a point or two , also . the bank board had entertained the notion that an acquirer of american savings might pay as much as a premium for the thrift's retail deposits -- about double what buyers pay for branches of healthy thrift institutions . it seemed excessive given american savings' troubles , but mr. martin kept asking . mr. carl finally pulled a small black sound - effects box and gave his answer : at the push of a button , the sound of a bomb whistling through the air and exploding filled the room . but the issue wasn't quite dead . ultimately , the bass group agreed to pay a premium as part of an arrangement in which the fslic will receive a warrant equal to a interest in the recapitalized american savings . some disputes arose over ambiguities in the term sheet , others because various units within the bank board had conflicting goals . such intramural disputes often broke out when it came to trading exemptions from certain bank board operating rules for reduced fslic assistance -- with fslic officials arguing cost and regulatory staffers wanting tight rule enforcement . twice , in late june and late july , the original - day exclusive negotiating agreement with the bass group was extended , and still the final sept. deadline was closing in . on thursday , aug. , the bank board decided by telephone conference not to include the various rule exemptions it would grant to the bass group in the assistance contract . that means the rule exemptions could be changed by a future bank board . the next day , the bass group had its own conference - call marathon to go over the deal , including mr. bonderman from a yacht in the mediterranean . last wednesday , bass group representatives , who called themselves " the home team , " met another hours in washington . mr. bass came up from fort worth . the bank board met all afternoon , too , but primarily to finish a plan to consolidate failed thrifts in oklahoma . negotiators missed a scheduled p.m. meeting with the bass group . finally it began at p.m. , and after four hours of sometimes heated discussions , several issues remained in dispute . the sides adjourned until thursday morning , sept. . but by then there was a new problem . financial corp. had set a board meeting for sept. , and bank board officials learned that among the things directors were expected to discuss was whether to place financial corp. into voluntary bankruptcy instead of spending nearly all its remaining cash on a single interest payment due sept. . the bank board could immediately take over american savings , but officials feared that would cause a run that could strain the fslic's cash resources and force it to borrow from the federal reserve . that , in turn , could have shaken public confidence in the fslic and caused ripple effects throughout the financial system . clearly , both sides felt they would have to reach an agreement by midnight , the publicly announced target . mr. bass huddled with mr. martin during the afternoon thursday . a bigger problem was bank board last - minute objections to the cost of the transaction . the bass group gave up about million in future tax benefits . bass representatives pointed out an additional million in benefits the fslic hadn't counted . still , when the bank board met again from about : p.m. until p.m. , its position hardened . ford had been lobbying hard to crack the bass group's exclusive negotiating license and get back in the game . criticism from influential congressmen was adding wattage to the spotlight on the board . in essence , the bank board decided it needed an additional million in concessions from the bass group . bass group negotiators were outraged . " the deal has hit the wall , " one bank board official said . the meeting adjourned quickly . the target deadlines passed and the labor day weekend was approaching . the bass group team members , looking as if they had slept little , returned friday morning . mr. bass met privately with mr. wall , conferred with his lieutenants and left . mr. wall then suggested that each side review its figures and meet at p.m . the bass team caucused in the washington office of one of its law firms , and drew up a bold contingency plan . if a deal wasn't struck over the weekend , the bass group would sue ford on tuesday in a texas court , probably in houston , alleging wrongful interference by ford in bass group's exclusive negotiating agreement with the bank board . the model for the suit would have been pennzoil co.'s successful suit against texaco inc. over the acquisition of getty oil co. , in which pennzoil ended up winning a billion settlement . some members of the bass team argued that the lawsuit might be more profitable than owning american savings . but after a brief meeting at p.m. , the bank board staff went back to its calculators , and by refiguring a number of elements in the deal were able to satisfy themselves they wouldn't need the disputed million in cost concessions . the bank board was unaware of the bass group's idea to sue ford , but feared being sued itself if the deal fell through . messrs . the bass people went to sleep that night still not knowing whether they had a deal . after that , for the bank board it was simply the long wait for the call from kenya . petroleum prices are declining again as the euphoria in world oil markets over the cease - fire in the iraq - iran war continues to fade . many oil economists and analysts also blame the renewed bearish sentiment on high production by the organization of petroleum exporting countries -- now around million barrels a day -- and the resulting rise in world oil inventories to near - record levels . unless opec is able to slow its production " creep , " said lawrence goldstein , the executive vice president of new york - based petroleum industry research foundation , " a price collapse should be taken seriously over the next months . " yesterday , the north sea's widely traded brent crudes fell between cents and cents a barrel to or less on european spot markets . prices of a popular mideastern crude , dubai , were near a barrel or below , depending on the delivery date . the u.s. futures market was closed yesterday because of the labor day holiday . but on friday west texas intermediate , the crude that serves as the futures benchmark , fell below the a barrel considered by many traders to be a technically significant support level . that is still above field postings for the u.s. crude -- the price that refiners actually pay for the crude they buy in the field . late last week , most u.s. refiners reduced posted prices cents a barrel to . opec production , meantime , is continuing to expand after averaging million barrels a day or more in august , well above the million barrels a day in the second quarter . " early indications are it could be million or above for september , " mr. goldstein said . according to most estimates , much of the additional oil is coming from four persian gulf members of opec : saudi arabia , kuwait , the united arab emirates and iraq . all except iraq are said to be producing above their opec quotas . the pacesetter is the united arab emirates , which is now producing nearly double its opec quota of barrels a day . iraq , which is producing as much as million barrels a day , doesn't have a quota . it excludes itself from opec's production ceiling because it hasn't been given a quota equal to iran's million barrels a day . that perception is changing now . one reason is the continuing climb in opec output in the short term -- and the growing recognition that over the long term , iraq , in peacetime , will be capable of producing prodigious quantities of oil . finally , sentiment has been turning bearish from the lack of any immediate positive news from last week's trip to tehran and baghdad by opec's secretary - general , subroto . mr. subroto went to iran and iraq to try to resolve the quota problem and get iraq back into the fold . " the increased opec output is one byproduct of the iraq - iran cease - fire , " reports petroleum intelligence weekly . " by opening new options for opec , the easing of tensions in the gulf is prompting many members to stake their claims to a larger share of output by boosting volumes . " there are buyers for the extra oil , of course . opec isn't pumping it out on the ground . but a lot of the oil is going into storage , including tanks and tankers leased by some opec members . as a result , the huge " overhang " of petroleum inventories is worsening . one major u.s. oil company estimates that the world now has an - day to - day supply of " usable commercial inventories " -- those not necessary for logistical purposes , such as in pipelines or in strategic government storage . that is million to million barrels too high , or six to eight days above normal levels -- " a scary number , " says the oil company official . polysar energy & chemical corp. shareholders approved a plan under which nova corp. of alberta would acquire all the assets of the petrochemical concern . the complex plan calls for calgary - based nova and a subsidiary to pay an indicated billion canadian dollars ( us billion ) in cash and stock for polysar common shares other than those held by nova . it also calls for redemption of about c million of polysar obligations . polysar said it will seek approval of the plan friday from the supreme court of ontario , and said it may take effect as early as sept. . it said polysar will be operated as an indirect subsidiary of nova . nova is acquiring polysar's assets under canadian regulations that require court approval . the acquisition will turn nova , which also operates natural gas pipelines , into a major petrochemicals concern . according to nova , it will be the sixth largest in north america . polysar and nova reported combined revenue of c billion , of which c billion was from petrochemicals . nova said this would increase the number of nova shares outstanding to about million on a fully diluted basis . in trading on the toronto stock exchange yesterday , nova closed at c , down canadian cents . polysar closed at c , down canadian cents . in trading on the new york stock exchange , nova closed at , unchanged . the canadian house of commons is expected to approve the u.s. - canada free trade pact today , but the fate of the proposed agreement won't be decided until the next canadian election , which is expected this fall . the liberal party majority in the senate intends to block legislation on the free trade pact until " the people decide " in the next election whether the agreement should be implemented . prime minister brian mulroney has strongly hinted he will call an election this fall . free trade won't be on the ballot , but canadians will be able to indicate their views by their party preference in the vote . the conservatives favor the agreement , and the liberals and new democrats oppose it . latest polls indicate that if an election were held now , mr. mulroney's conservatives would win the greatest number of house of commons seats but not a clear majority . an attempt in to win voter support for a negotiated free trade agreement with the u.s. failed . he said it can't be achieved by a minority conservative government that would have to depend on another party's support to stay in power . if approved , the trade pact would take effect jan. , . it would eliminate over a - year period most trade barriers between the two countries , which had first - half merchandise trade of billion , more than any other pair of nations . the pact was signed jan. by president reagan and mr. mulroney . the u.s. house of representatives recently approved legislation to implement the trade pact and the senate is expected to take similar action . some political analysts predict canada's conservatives will return to power on the free trade issue . free trade commands wider support than does mr. mulroney or his government . recent polls indicate that only of canadians have a positive impression of mr. mulroney , while about of decided canadians favor free trade . major business groups and all of canada's provinces , except ontario and prince edward island , support the pact . quebec's premier robert bourassa , a liberal , has boosted the federal conservative party's election prospects in his province by strongly endorsing the agreement . " he might be a liberal but he has his head screwed on right . " the opposition parties assert that the agreement threatens canada's culture and political sovereignty . " this is a full - scale , absolutely incredible defeat for canadian interests , " said the liberal party's trade spokesman , lloyd axworthy . mr. mulroney told the house of commons yesterday that the trade pact is " necessary to assure access to our most vital market . " he said , " we believe it will bring prosperity and economic benefits to canadians from coast to coast . " for the second time in two weeks , detroit edison co. closed its fermi nuclear power plant following a failed test of its backup system . the fermi plant remained closed yesterday as detroit edison engineers and technicians searched for the cause of and solution to a valve failure . the company shut the plant down over the weekend when a valve that is part of the plant's recirculation pump stuck open during a test saturday morning . a detroit edison spokesman confirmed that radioactive water passed from the plant's primary system into an isolation system , but added that the water remained within the plant's containment system , " so there was no damage and no threat of damage to either plant personnel or the public . " one week earlier , detroit edison officials shut down the plant for three days , following a similar valve failure in the facility's recirculation system . plant engineers determined that the previous problem was caused by loose wiring , which has been fixed , the company said . it said fermi will remain closed until the current problem is solved . the warning accompanied a report that gave fermi the lowest possible acceptable rating in five of categories . since , the nrc has fined detroit edison for violations at fermi , ranging from serious operator errors to inadequate security . separately , the utility said it will redeem all its series and series of preference shares , at a share and a share , respectively . another op'nin' , another show , in philly , boston , or baltimoe . so goes the opening of cole porter's tribute to theater openings in " kiss me , kate . " in the days when " kate " opened , the traditional tryout procedure for a broadway show was to go to a nearby city for two weeks before coming to new york . this is where the show first played before an audience and the bugs were worked out . the tryout days gave rise to legendary stories about the theater : how the rabbit in mary chase's " harvey " began as a real rabbit and out of town someone suggested that he become invisible . and how " oklahoma ! " when it opened in new haven , was called " away we go , " and the producers were advised by an old pro to avoid embarrassment by closing it before it came to new york . now it has all but disappeared , and this change is surely an important piece of the story of how the theater has changed over the past quarter century . of all the shows currently on broadway , only one , " m . butterfly , " arrived by the traditional out - of - town route , probably because its producer , stuart ostrow , is from the old school . the demise of the time - honored system of tryouts is symptomatic of deeper troubles , which include the overall decline in the number of new shows . this is the time of year when optimistic articles appear touting the upcoming theater season . but this year one is tempted to ask : what season ? for the four months of september through december , only five shows are scheduled to open on broadway and two of those are revivals . only one is a straight play . of course , other shows are in the wings and will pop up , but there will have to be three times as many to equal the number of shows that came to broadway in the fall that " kiss me , kate " opened . there are many explanations for the current state of affairs , not the least important being increased financial risk . mr. ostrow recently confided that on the day " m . butterfly " opened the advance sale at the box office was a grand total of . if it had not received favorable press notices and word of mouth , and had not subsequently won a tony award , it would long since have died . " starlight express , " that anomaly masquerading as a broadway musical , has run nearly months and has grossed million , but it is only now in sight of recovering its million investment . this is because its running costs are more than per week . in the face of such risks , broadway producers have had to hedge their bets with longer , safer tryouts than the traditional two weeks in new haven or boston . one approach , of course , is london . most of the recent blockbuster musicals first became hits in the west end , thus providing a bit of financial and aesthetic insurance for new york . a second important staging area , especially for straight plays , is in the various resident professional theaters around the u.s. recent dramas such as " joe turner's come and gone " and " a walk in the woods " were first presented at several of these nonprofit theaters before they came to new york . the one drama scheduled for broadway this fall , " spoils of war " by michael weller , was first produced by the second stage , a nonprofit theater in manhattan . the experience of cy coleman , the composer responsible for " sweet charity " and " barnum , " among other hits , is not atypical . mr. coleman has a number of projects in the works , but two in particular illustrate the circuitous and improvisational thing that a pre - broadway " tryout " can now become . one is a small - scaled musical called " welcome to the club , " which he has written with a.e. hotchner . it had a workshop production in the spring of at the actor's studio and another tryout that summer at lucille lortel's white barn theater . last winter it had a run of several weeks at the coconut grove theater near miami and was set for a new york production this fall when a major backer suddenly backed out . now a new investor must be found to replace him . another of mr. coleman's projects has traveled an even more tortuous path . in " home again , home again , " a musical on which mr. coleman collaborated with russell baker , opened in toronto for a pre - broadway tryout but was abruptly closed by the producer . mr. baker had kept a diary of the show's travails , and since writers are never people to waste words they've put on paper , he and mr. coleman turned his journal into another musical called " thirteen days to broadway . " that was several years ago . at the moment , plans are in place for a full - scale production in cleveland in the spring . mr. coleman has other projects for which the money is in hand , one of them being a musical about will rogers to be directed by tommy tune . " ironically , " he says , " it's easier to get backing for a million musical than one that costs million . " meanwhile , his first two projects , like dozens of others , are circling in the hinterlands like so many airliners stacked up above a permanently fogged in kennedy airport . a year ago today , the stock market hit its all - time high , a fact many americans probably don't recall . what they do remember -- and will probably never forget -- is black monday . that , in a nutshell , largely explains the market's current malaise . stock prices are relatively attractive , the economy is still healthy , and corporate profits are booming . but the dow jones industrial average remains below its year - ago peak of . and even though it rose sharply yesterday , no one expects it to make up the lost ground any time soon . why the malaise ? investors are suffering from high anxiety about the market's ability to function . they fear that stock prices are responding less to economic fundamentals and traditional capital - raising than to the vagaries of automated trading mechanisms and arcane institutional strategies . " october is absolutely in the back of everyone's mind , day in and day out , " says robert f. rittereiser , who headed e.f. hutton group until american express's shearson lehman unit took it over in the wake of the crash . confidence will remain low , he adds , because " people saw how fragile the system was . " powerful institutions , brokers and takeover specialists all reaped huge gains , fees and commissions . employees with pension funds indirectly profited . yet plant closings , layoffs and corporate restructurings eliminated millions of jobs beyond wall street . and although many small investors went along on the market's ride , others bought real estate or bond funds -- or didn't play at all . also uneven was the impact of the market's crash oct. . the most visible casualties have been on wall street , where jobs have been lost . stock and bond offerings have been shelved , and some corporate buy - out plans have been scrapped . yet the economy hasn't fallen into recession . unemployment dropped to a - year low in june . inflation has so far remained largely in check . corporate earnings are strong , theoretically providing some attractive investment opportunities -- at least by ordinary measures . but these are anything but ordinary times on wall street . the stomach - wrenching crash is still traumatizing large and small investors alike , even those who survived without major damage . many institutions are pursuing alternative investments to stocks while sitting on huge cash hoards . trying to reduce risk , big investors are increasingly relying on asset - allocation formulas -- formulas that call for taking profits if stocks rise relatively modestly . and short - term trading professionals also have become enthusiastic again about a " buy - write " stock - and - options strategy . both maneuvers tend to hold down the market's potential gains . thus , with institutions still dominating trading , the dow has been wandering aimlessly for months in a band roughly between and on generally slack trading volume . individuals also are holding back from the market , worried about being trampled in another selling stampede that would hurt the little guy more than the big institutions . " individual investors who thought their stock was as good as cash found they couldn't even reach their brokers on black monday , or if they could , they couldn't get their stock sold , " says robert s. pirie , the president of rothschild inc . " all that anxiety out there isn't over the value of stocks ; it's about the soundness of the marketplace , " the investment banker adds . how investors are dealing with that anxiety varies widely . yet he kept playing the market -- albeit far more conservatively -- and now has finally about recovered his losses . but fred mcintyre , a railroad worker in omaha , neb. , vows that he will " never invest in the market again for the rest of my life . " with good reason . as black monday dawned , he held in his brokerage account a handsome nest egg of more than four times his - a - year pay . the next day , all of it was gone , and he owed his broker more than to boot . nonetheless , some sun does shine on wall street . surveys of some of the members of the american association of individual investors suggest that they are tiptoeing cautiously toward buying more stock again . and though still largely on the sidelines , many big institutions are clearly growing itchy to re - employ idled assets on the new york stock exchange . some have been quietly buying growth stocks in the over - the - counter market , which has turned in a respectable year - to - date gain , far exceeding the dow's advance . corporate profits , a traditional engine of stock prices , rose sharply in the second quarter from a year earlier . moreover , the economy shows scant evidence of repeating the post - slide into the depression . the current - month recovery appears to be slowing with age , but economists still haven't sighted its end . the dow , which for months after black monday had eerily retraced its path , has held since june to higher ground in relation to , and the gap between the industrial average then and now continues to widen . however , the search for parallels provides both fascination and concern . the recent rise in interest rates sparked reminders of the rate increases , which undermined efforts to halt the economic slump . " we're all saying it won't happen again , but , meanwhile , the fed has tightened a little bit , and it may tighten again , " comments howard stein , who runs dreyfus corp. , the mutual - fund company . such fears may be weighing on small investors as well . according to william anderson , a financial analyst at the association , the percentage of members professing to be bullish skidded from at the end of june to just a month later . in the week ended aug. , the figure was still an alarmingly low . that gloom contrasts sharply with the ebullience generated during the market's five - year bull run , which began with the pressure to reinvest gushers of new capital produced by the double - digit bond yields of the early s . the pressure strengthened the hands of wall street's traders , who , armed with computers , were producing huge profits for their firms . by , traders and their short - term trading mentality were in control or close to it at most major wall street houses . takeover arbitrage soon was joined at center stage by more - complex trading - based investment strategies -- notably stock - index arbitrage and portfolio insurance . these two strategies linked the stock , futures and options markets and helped drive up the prices of all three . eventually , the market got so high that many investors grew nervous . and through september and into october , uneasiness grew about the danger of a sell - off triggered by portfolio insurers trying to curb their losses in a declining market . by oct. , the dow industrials had plunged from their peak , with just over half of that drop coming in a vicious three - day sell - off sparked by a disappointing balance - of - trade report on oct. . eventually , that plunge paled beside the crash , which drove the dow down points , almost -- and which so battered some investors that nearly all investors are still on edge . the - year - old railroad repairman had made most of the money selling options based on the standard & poor's - stock index . selling both puts and calls , he was betting , against both the bulls and the bears , that the market would trade in a range between the strike prices of the two options until they expired . if the options expire worthless , the sellers get all the money the buyers paid for the options . but mr. mcintyre's strategy backfired on oct. . the puts -- the buyers' bets that the market would drop -- soared in value , sticking mr. mcintyre with a loss of well over . that far outstripped the comparative pittance he got by selling the then - worthless calls . his brokerage account was left with a deficit . last month , mr. mcintyre's broker offered a " pretty liberal " settlement , under which mr. mcintyre can't publicly identify the securities firm or discuss the terms . now that his stock - playing days are over , he says , he is trying to rebuild his family's nest egg by playing state lotteries . options also hurt bill mcgill , a retired chrysler corp. management auditor living in pittsburgh . his investments prior to black monday included sales of put options . these positions , which forced him to buy stocks at previously agreed prices that suddenly were far above market levels , hit him with of losses last october . but aided by securities profits taken the previous spring , he had the cash to buy some of the bargains created by the crash . today , he says , he has clawed his way back to " even or maybe even a bit ahead . " instead , he makes short - term investments in common stocks . for example , shares of caterpillar bought oct. at apiece were sold six weeks later at , and federal national mortgage corp. shares bought at in late october were sold last march at . yves f.m. hentic , a veteran wall street trader specializing in arbitrage and other short - term plays , has changed his act since black monday , too . " there's nothing like losing million to focus your attention on risk , " he says. ( in an earlier underwriting venture , a small securities that mr. hentic controlled went out of business because of insufficient capital. ) . in contrast to his once - huge plunges in a single investment , mr. hentic and many other professional traders have turned to buy - write strategies . under such strategies , a stock is purchased when the dow industrials sink close to the bottom of their trading range , and the shares , options against them or both are sold as the dow rises toward the top of the band . the buying helps ignite rallies when the dow is down near , and the selling helps quench them when it moves toward its high of . and this conservative strategy can be repeated over and over . he notes that his few recent attempts at big stock - option trades have fizzled because he couldn't find anyone to take the opposite side of the transaction . " these days , if you try to do anything in size , people get nervous and the liquidity dries up instantly , " mr. hentic says , adding , " i'm just about back to where i was before the crash now , but it's been a very tough grind . this market is still a very sick puppy . " for howard stein , even a highly conservative cash position last october wasn't conservative enough to fully protect the dreyfus fund on black monday . but while the billion mutual fund outperformed many equity funds and has bounced back from the losses months ago , mr. stein feels uncomfortable . he cites a jumble of nagging concerns , including the paucity of money flowing back into the stock market , companies' eagerness to buy back their stock rather than invest in their businesses , and speculators' search for quick profits through takeovers . " it's the kind of environment where we should be trying to protect people's investments , " mr. stein says . he thinks that he has found some in texas . for example , the fund has bought about million in securities of first city bancorp of houston , which was rescued last april through a federally assisted bailout led by a. robert abboud . dreyfus corp. , the fund's parent , has also turned its eyes to texas , taking a stake in a company shopping for oil and gas leases and in another looking to buy real estate . other institutions are looking outside the stock market . the rockefeller foundation , which has billion in assets , allotted million last year to investing in securities of troubled companies . last spring , it doubled that allotment . believing that the post - crash potential for stock gains is eroding with time , jack r. meyer , who runs the foundation's investments , also reduced its holdings of u.s. equities this month to from . that move , along with cutbacks in foreign stocks and real estate , has raised its cash to about of assets from the usual . though still involving only small fraction of the institutions' total assets , such maneuvers worry the stock exchanges because they limit stock purchases . that's hardly a new worry for the exchanges , but the crash spotlighted the risks of stock ownership . however , there's another side to black monday : it put the big board on center stage , like it or not , and , surprisingly , the exchange seemed to like it . although the exchange never tried to trumpet exactly how much its leadership and market makers did to soften the crash , its large , slick public - relations department successfully portrayed chairman john phelan to washington and the public as the spokesman of the stock market . but that has boomeranged , to some extent . much of the investor and regulatory concern about the health of the market since the crash has focused on the big board , while other markets whose performance during the crash was far worse -- notably the nasdaq over - the - counter stock market -- have faced much less heat . in addition , the exchange said it would adopt " shock absorbers " in conjunction with the chicago mercantile exchange to slow the impact of program trading affecting both big board stocks and chicago merc futures on the s&p index . government agencies , however , haven't made any major regulatory changes , although the brady commission , the presidential panel that studied the market crash , advocated quick regulatory and structural changes to prevent a recurrence . but the exchange's biggest problem , critics contend , is its market makers . these " specialists " aren't sufficiently capitalized or willing to spend enough of their money to keep trading smooth , critics say . although the exchange strongly defends its specialists' performance on black monday , it agrees that they need more capital . mr. rittereiser , the former e.f. hutton chief , isn't surprised that the specialists were overwhelmed , and he doubts that they ever could have enough capital , given the deluge of selling that portfolio insurance can generate . he suggests that the exchange should be able to tap pension funds and other institutions , many of which might be willing to buy heavily in a slump if the mechanisms were in place . he says that hutton continued to buy stock from its clients on black monday until its inventory swelled to three or four times its usual level . then , he says , the firm threw in the towel and tried to curb its own losses . the damage drove the - year - old firm into the arms of shearson lehman in a matter of weeks . and mr. rittereiser wonders how far wall street firms will go in risking their own money for clients in another black monday . " what has changed to make anyone so brave to step up there the next time ? " he asks . as for the market outlook , mr. rittereiser voices the widespread sentiment that cautious investors will get out of rising markets faster than they would have before black monday and that bearish worries will continue to be magnified . " that's unfortunate because the economy is in pretty decent shape , " he says . " the tail is going to wag the dog for some time to come . " the big swedish telecommunications concern , telefon ab l.m. ericsson , is on a roll . it took four tumultuous years for it to recover from a failed foray into the computer business . progress was slow and , despite a management shake - up and sweeping restructuring program , ericsson's future remained under a cloud . but the turnaround has gathered speed in recent months . early this year , ericsson disposed of its loss - making ericsson information systems ab computer unit and a faltering u.s. cable unit , bringing it almost million -- far more than most analysts considered possible . meanwhile , a string of successes in europe bolstered ericsson's stature in the fiercely competitive telecommunications markets . today , ericsson " clearly is the premier european player " in digital - switching equipment and in fast - growing mobile telephones , says james dodd , an analyst for london - based stockbrokers citicorp scrimgeour vickers . the clearest evidence of its rising fortunes could come when first - half earnings are announced tomorrow . despite a three - week strike at swedish plants in january , analysts expect ericsson's pretax earnings to rise sharply , perhaps as much as from the million kronor ( million ) pretax profit in 's first six months . many analysts predict improved first - half results will reflect fatter operating margins that could remain strong over the next two years . not everyone is convinced ericsson can sustain the upturn . skeptics note that the improvement partly reflects an unusually weak first half . and analysts still question if ericsson management will maximize profit and thus repay shareholders for recent lean years . " financial controls have strengthened considerably and ericsson's management has proved it can turn around businesses and sell them at a profit , " says richard ryder , london - based analyst for salomon brothers inc . " but there still is a long way to go before they're forgiven for . " the pace of recent events surprises even senior ericsson executives . chief financial officer carl wilhelm ros says the past few months have been like " a ketchup bottle . for a long time nothing happens and suddenly you get the result of several years' work all at once . " the flurry of strategic steps began in april , when a consortium led by the swedish concern won control of france's state - owned cie. generale des constructions telephoniques , giving the group a share of the french market for digital telephone exchanges . the step gave ericsson a share of the spanish telecom market - europe's fastest - growing . two months ago , ericsson strengthened its foothold in britain , buying out thorn emi plc's stake in a - year - old joint venture . citicorp's mr. dodd gives ericsson high marks for " buying out its partner at precisely the point its british market share is set to expand . " ericsson remains a prime contender in italy's search for an international telecommunications partner for italtel s.p.a . mr. ros says the recent death of italtel chairman marisa bellisario left the contest " a completely open question . " he is optimistic ericsson can maintain or increase its share of the italian market . the advances in europe help offset weak equipment sales in the u.s. though ericsson has won minor orders from regional bell operating companies , mr. ros acknowledges " the u.s. public telecommunications market has slowed down a little and is tougher than we expected . " ericsson is nevertheless continuing heavy investments in the u.s. in line with its longstanding goal of winning to of that market . shedding the troubled computer and u.s. cable units , which accounted for almost of annual sales but little profit , relieved much of the pressure . cash from the disposals , together with a big issue of convertible debentures and eurobond offerings last year , boosted ericsson's finances to the strongest level in a decade , mr. ros says . still , financial muscle remains a crucial factor in ericsson's battle against bigger rivals with deeper pockets . mr. ros says the company hasn't any current plans to seek new equity . but regaining some of its former glamour , and the confidence of investors , remains a major challenge . " sometimes the market tends to forget that despite all our problems , we've remained very aggressive , " mr. ros says . " shareholders have suffered because of that . so the big problem we have left is to show a strong bottom line so they get some payoff . " a san jose , calif. , federal judge's scheduling decision on a landmark legal battle between apple computer inc. , microsoft corp. and hewlett - packard co. has thrown the litigants into confusion . u.s. district judge robert aguilar set a trial date of aug. , , for the case , which has been broken into two separate elements . but the parties involved in the litigation weren't sure which of the two elements the judge was referring to in his scheduling order , which wasn't issued in open court . the judge , who was said to be in idaho attending a judicial conference , couldn't immediately be reached . in either case , the trial date -- whichever trial it refers to -- implies that a long - awaited clarification on the question of whether audio - visual computer displays generated by software can be copyrighted isn't coming anytime soon . the case in question involves apple's lawsuit , filed in march , which charges computer - maker hewlett - packard and software giant microsoft with infringing on certain copyrights that apple claims protect the " look and feel " of its popular computer - display graphics . redmond , wash. - based microsoft and hewlett - packard , of palo alto , calif. , have denied any wrongdoing . the issue of whether apple's " look - and - feel " software can be copyrighted is viewed as a key one for the software industry , where the extent of copyright protection for on - screen graphics has proven a troublesome issue . the conflict over whether microsoft is licensed to use certain graphical features developed by apple in some of its products was separated into distinct legal action , which judge aguilar will hear before the broader copyright issue . if microsoft wins on the licensing issue , it would probably not be involved in the copyright - infringement trial . the litigants don't agree , however , whether the august date is for the first phase of the lawsuit or the second . microsoft's vice president for law and corporate affairs , william neukom , said the company is seeking clarification , but " our current best thinking " is that the judge's schedule order refers to the copyright issue , and that the trial on the microsoft license will take place in late autumn of this year . a spokeswoman for hewlett - packard said the company's attorneys are also awaiting clarification , but believe that " this date may refer to phase , " the copyright issue . david sipiora , a law clerk for the judge , said , " it's highly unlikely that { the judge } would hear a case this year , when we've got civil cases dating back to on the docket . " both microsoft and hewlett - packard said they plan to continue marketing the products apple claims infringe on its copyrights , pending a trial . the front - page story ( " back to the lab , " july ) on degradable plastics fails to address a key issue -- whether biodegradable plastics would help solve the nation's garbage - disposal problem . popular wisdom says , yes , because organic materials are believed to quickly decompose in landfills leaving room for more garbage . but popular wisdom has confused composting -- which mostly involves leaves and other lawn and garden waste piled above - ground -- with landfilling , a vastly different process . modern sanitary landfills , by their very design , compact and cover the material they contain , and have special systems to collect and control potentially toxic liquid runoff and methane gas . these systems are required by government regulation . landfills are kept as dry as possible to prevent groundwater contamination and other health hazards . scientists have pointed out that the elements necessary for biodegradation -- moisture , oxygen , the right kinds of microorganisms -- are , by design , all in short supply in a landfill . it , therefore , takes anywhere from to years before a meaningful level of biodegradation takes place -- far too long to alleviate today's landfill shortage . garbage disposal is , in truth , a volume problem , not a materials problem . requiring the use of biodegradable products , paper or plastic , is not a solution . biodegradable plastic products are heavier and bulkier , so they add extra weight and volume to the solid - waste stream , although not as much as using paper substitutes . they will no longer be inert , so like other biodegradable materials their disposal in landfills increases the risk of toxic runoff and gas emissions . furthermore , biodegradable additives in plastic products will make the plastic difficult to recycle . you report that mobil has come out swinging on this issue . you're right . with many others in industry and government , we're working to develop real solutions to the solid - waste problem . biodegradability is becoming a buzzword that makes some people feel good , but it is not a solution . the solutions are more recycling , incineration and sanitary landfills . president , mobil chemical co . the government said that it will abolish the state tourism agency and that major hotels , restaurants and other facilities will be sold or leased to the private sector . the revolution command council , which passed the decree aug. , said state - run assets to go private include seven hotels in baghdad , as well as properties in the war - battered southern port city of basra and the northern city of mosul . hotels not sold will be leased for years to private companies , the council said . the basra sheraton hotel was damaged by shelling and rocket fire during an iranian offensive in early , when some of the heaviest fighting in the eight - year - old persian gulf war took place . the state - owned facilities also include a tourist complex in habaniya , west of baghdad , and several modern resorts in the northern mountains , the scene of heavy fighting in the war . the managers of the hotels said they didn't know whether the facilities will be sold to iraq's private sector or to their parent companies . officials said the hotels are to be run by their parent chains in accordance with an agreement signed with the iraqi government . the move to sell the facilities is part of president saddam hussein's drive to stimulate the economy . the announcement came as iranian and iraqi leaders prepared to meet in geneva aug. for peace talks under a united nations - mediated cease - fire . the recent announcement by new york life insurance co. that it is liquidating its entire billion stock portfolio because of its dissatisfaction with the market's volatility furnishes dramatic evidence that the flight of the investor from the securities market continues unabated . now , not only the small investor but also some larger institutions are exiting a stock market in which sharp fluctuations in the dow jones industrial average , often unaccompanied by any significant external news or event , recur with predictable frequency . the pattern of these fluctuations is particularly revealing . often , trading will remain flat throughout the day , only for prices to dive suddenly at the close in the face of heavy institutional trading . admittedly , one cannot legislate a secure investment environment , but investors are unlikely to return to the market until they see it as a relatively stable repository for their funds . a market that can move - points in a few minutes , because of sudden selling pressure , will not be so perceived . yet , wasn't it exactly this problem that the proposals of the brady commission and other recent reports were supposed to address ? the short answer is no . as a result , short of a catastrophic event , their proposed reforms will have little impact and could even be counterproductive . consider , for example , the two most discussed brady proposals : ( ) the circuit - breaker reforms , and ( ) the recommendation that margin rules be effectively equalized between the securities and futures exchanges . will it create confidence among small investors to know that in the future a brief inter - market trading halt will occur once the stock market declines points or more ? such a proposal is as reassuring as a contingency plan for urban survival after a nuclear holocaust . more important , circuit breakers create an incentive to sell as their triggering point is neared ; thus , they can exacerbate matters by encouraging a " run on the bank " as investors sell because they suspect others will also do so as the trigger point is neared . if trading halts are to reduce volatility , they will have to be introduced at a much earlier point and seek to bridge temporary order imbalances . although probably feasible , such a proposal risks the danger that any halt will be interpreted as an adverse signal that triggers still more selling . this is because institutional investors make little use of margin and , in any event , possess sufficient collateral to continue to trade largely unaffected by any conceivable system of margin regulation . at best , stricter margin rules might restrain highly leveraged speculative traders , but , as every serious study has found , this species of trader played only a minimal role in the october crash . in short , there is a major gap between the diagnosis and the prescription in the brady and sec studies of the october crash . both studies properly recognize the significant impact that the trading of a few large institutions had on the securities market at several critical moments during oct. - . the crash was unlike in that it was driven not by panic within the broader investment community , but rather was fueled ( according to the brady commission ) by the concentrated selling of fewer than major institutions . if so , what can be done ? the next step should be the serious consideration of what i term an " anti - dumping " policy that would restrict the dollar amount of securities ( or stock futures contract ) any one institution could sell on a given day . in fact , even hourly restrictions might be enough . anti - dumping rules could be prescribed on a sliding - scale basis proportionate to the market's vulnerability . that is , if the dow jones fell , hypothetically , points , a first , outer series of volume restrictions could come into play on both the futures and securities exchanges . then , if the market continued to fall , increasingly tighter restrictions on the dollar amount any one trader could sell would be triggered at additional benchmarks ( e.g. , points , points , etc. ) . such rules could be enforced through seller certification , in the same way the short - selling rules are today . moreover , in the aftermath of a major market decline , it would be possible to retrace the selling activity of the relatively small number of traders large enough to violate such a rule . in effect , by retarding high - volume " day trading " by the few , we give the smaller investor equal access to the market . today , institutions believe they can beat a market - wide decline because of the immediate market access they possess and their ability to use trading strategies that are beyond the means of smaller investors . the simple truth is , however , that institutions now are the market , and when they race to the fire exit , others get run over . an anti - dumping policy would appropriately force institutions to recognize that when you are the market , you cannot also expect to beat it . mr. coffee is berle professor of law at columbia university . reynolds metals co. announced a further expansion of its boddington gold mine , making it the largest in australia and one of the five largest in the world . for reynolds , which reaps most of its revenue within the highly cyclical aluminum industry , adding gold capacity underlines the company's commitment to diversifying . more than anything , though , the million expansion points to the huge profit gold is providin . " it's our best margin product , " chairman william o. bourke said in an interview , explaining that it takes to produce an ounce of gold with the low - cost surface mining technique used at boddington . at current market prices , reynolds can turn around and sell that ounce for about . that's " even better than reynolds wrap , " mr. bourke added . analysts were enthusiastic , noting that if gold prices are spurred higher by inflation , it could help offset the inevitable downturn in aluminum that would come from an overheated economy . the boddington expansion is expected to be completed in the first half of next year . in composite trading on the new york stock exchange , reynolds closed at , up cents . the extra capacity -- including a new stone - crushing facility and additional cyanide holding tanks in which the gold is chemically separated from other minerals -- will allow boddington to process six million metric tons of ore a year . the operation , in western australia , originally began in july with an annual capacity of three million tons . an earlier million project , increasing that to million tons , is nearly complete . finding such a fecund gold field came as a surprise to reynolds , which stumbled across the precious metal when it was looking for bauxite , a claylike substance that holds alumina , the basic ingredient in aluminum ingot . with mr. bourke touting reynolds's " midas touch , " it entered into a partnership with three other companies at boddington . reynolds holds a interest . mr. bourke stressed that despite the gold strike , the richmond , va. - based concern has not turned its back on aluminum , the company's backbone for nearly years . for example , aluminum co. of america started construction of its first gold mine during the first quarter on a slice of property that is right next to boddington . known as the hedges operation , it is scheduled to begin production before the end of the year . alcoa also continues to invest heavily in ceramics research . and alcan aluminium ltd. , the giant montreal producer , is pushing into the high - tech specialty metals market . besides boddington , reynolds itself has five other precious metals operations in western australia and four in queensland . among the most promising is a gold mining venture at mount gibson and a platinum discovery northeast of perth -- one of the few outside of south africa or the soviet union . the mount gibson property has revealed ore , not far from the surface , containing to grams of gold per metric ton . boddington , by comparison , is yielding about grams per metric ton . platinum , mr. bourke said , could ultimately be sold to automobile companies to make catalytic converters , which reduce air pollution . in the long run , the only catch could be taxes . but new government regulations will change all that in . " obviously , " mr. bourke said , " it's in our interest to get as much gold out of there as we can " before the new laws take effect . he added , " we have a hell of a lot of gold . " work went on uninterrupted yesterday in a copper mine complex despite a call by a local union for a brief wage protest . there were conflicting explanations on why the protest didn't take place and about recent developments at the rudna mine , near the town of lubin . government officials said the protest was called off by leaders of the local , officially recognized copper union after they received a telegram from the industry ministry proposing talks . officials of the banned solidarity trade union , which had urged workers to ignore the call , said miners simply refused to go along with the protest . solidarity officials asked miners to reject the call because the protest focused on wage issues and not safety demands , which the banned union maintains are at the core of disputes with management . local solidarity spokesman jan sugalski said the official union had gone ahead with the protest action , trying to turn off conveyor belts to force a work stoppage , but that the miners refused . mr. kuron said the official union's failure to mention safety conditions amounted to an attempt to thwart solidarity - led efforts to bring changes to the industry . the action by the official union appeared designed to head off protests by solidarity supporters at the rudna mine . an independent mining commission at the rudna mine has charged that miners must work at temperatures that exceed industry norms . the miners have given management until aug. to adhere to an earlier agreement to improve working conditions , threatening protests if management failed to comply . let me offer a scenario omitted in your article " approved drugs find unapproved uses , " second front page , july . in my scenario , animal studies demonstrate that a class of drugs long recognized as safe is also extremely effective at a site never considered in clinical practice . use of these drugs on patients with severe disease confirms a significant advantage compared with traditional agents . trials in less - compromised patients , closely reviewed by disinterested parties , define rational therapeutic regimens . clinicians then apply these results to assist the average patient in new , and some would say spectacular , ways . the rub here is that the drugs in question stand little chance of being approved by the food and drug administration for this use . no company will fund the tortuous approval process because either the drug is already available in generic form , or else demand for the drug will not be sufficiently increased to cover the costs of the approval process . this is the problem faced by anesthesiologists today when using epidural narcotics . this technique , which places narcotic drugs in close proximity to the spinal cord itself , is one of the great advances in pain relief of this decade . its acceptance into routine practice has been substantial , even despite fda approval for only one of the many narcotics currently being used . this hardly states the place of the fda approval process in clinical practice . it may , however , make it more difficult for clinicians to apply techniques such as epidural narcotics to the average patient . this brings to mind president reagan , who enjoyed the benefit of epidural narcotics after being shot during his first term in office . robert m. knapp d.o . broad measures of the over - the - counter stock market showed it still locked in the summer doldrums yesterday , but some wall street professionals cited lively action in the important technology sector as suggesting a reawakening . the nasdaq composite index of otc stocks again showed a fractional move , up to , on volume of million shares , close to tuesday's million . reversing their relationship of tuesday , nasdaq gainers outnumbered decliners yesterday , to . the nasdaq , an index dominated by the largest capitalization otc technology issues , fared a bit better than the broad composite measure , rising to . yesterday's action in the technology issues stirred hope among some hungry market professionals that the long moribund otc market might finally be stirring to life . " there's just a better tone , a better level of interest here today , " said mitchell meisler , director of marketing at shearson lehman hutton inc.'s huge otc department . " earlier in the week , the computer issues were trading well and now the biotech issues and the other technology stocks are joining in , " he said . yet robert antolini , who heads otc trading at donaldson , lufkin & jenrette securities corp. , said the improved trading activity was spotty . part of the rising trading interest in the technology issues reflects the growing tug of war between bulls and bears about the outlook for this sector of the market . as the bulls see it , the technology stocks have been oversold and it is time for investors to buy them again . amgen got a strong play on news related to an anti - anemia drug it developed . johnson & johnson , which is licensed to make and sell the drug , eprex , said it will soon begin marketing it in switzerland . hambrecht & quist inc. analyst sarah gordon told the dow jones professional investors' report yesterday that , after learning that johnson & johnson will price the drug to cost a typical user about a year ( instead of the to she estimated earlier ) , she raised her rating on the stock to " buy . " amgen's share price vaulted / to finish at / . but as the bears see it , many of the highly leveraged young technology companies would be ill - equipped to ride out any coming interest - rate spiral , especially if that rate rise throttles down the economy . following declines of a dollar both monday and tuesday , the stock lost a further / yesterday to / . among other active otc issues , information resources , strongly rumored during the trading day as the target of an imminent mcgraw - hill takeover bid , leapt / to / ; home office reference labs , which announced its second - quarter earnings soared to cents share from cents a share , rose to ; farmers group fell / to / on the news that yet another state insurance commission rejected an unwanted takeover bid for farmers from b.a.t industries ; and seagate technology , pummeled by heavy institutional selling this week , managed to turn up / to finish at / on volume of million shares , leading the nasdaq active list . the air force will give the public a first peek at northrop corp.'s supersecret b - stealth bomber shortly after the november elections , a pentagon official said . the air force also is expected to reveal , perhaps as early as today , previously classified details about the wing - shaped aircraft , which is designed to evade radar detection as it carries nuclear bombs into enemy territory . the late - november unveiling , which is known in the aerospace industry as a rollout , could be a signal that the bomber's maiden flight will be delayed . in april , when air force officials made public the first sketch of the bomber , they said the maiden flight would take place this fall . following a rollout , a military plane usually makes its maiden flight between one and four months later , according to aerospace industry executives . the date for the rollout also appears to be a concession to democratic members of congress , who have cautioned the pentagon not to make an election - year issue out of the bomber , which employs about aerospace workers in california . this year , both michael dukakis and george bush have said they support the stealth bomber . " there was concern that we should keep this { program } from being politicized , " said an aide to the house armed services committee . the pentagon official said the november rollout wouldn't include a demonstration flight . instead , media representatives would be allowed to view and photograph the stationary aircraft from a distance to prevent details such as landing gear and electronics from being seen . the rollout is expected to take place at an air force - owned factory where the stealth is built , located in the desert town of palmdale , calif. , northeast of los angeles . northrop's development of the plane has been the subject of criticism from members of congress and some employees , who have filed private suits claiming fraud in the program . estimates of the total budget for the - bomber program have grown to as high as billion from the original billion budget set in . northrop has taken about million in write - downs for a classified program that analysts have identified as the stealth bomber . a northrop spokesman said the company , as a matter of policy , doesn't comment on classified programs . in addition , previously undisclosed names of subcontractors working on the program may be made public . besides the prime contractor , los angeles - based northrop , the pentagon has acknowledged that boeing co. makes electronics for the plane , ltv corp. makes part of the aircraft's structure and general electric co. makes the engines . analysts have speculated that other subcontractors include international business machines corp. , hexcel inc. , hercules inc. and fairchild industries inc . ncnb corp. named robert l. kirby , executive vice president and trust executive , as president of its ncnb national bank of florida . mr. kirby , years old , succeeds kenneth d. lewis , who is being transferred to dallas as part of the management team handling the recent acquisition of the failed first republicbank corp . the acquisition , renamed ncnb texas national bank , was created when the bank holding company agreed with the federal deposit insurance corp. to acquire certain assets and liabilities of first republicbank for about million last week . the agreement gives ncnb of the new institution , and the fdic the remaining . the company said mr. lewis hasn't yet been named to a specific position at the texas operation . in new york stock exchange composite trading yesterday , ncnb closed at a share , up . this is the first of a number of management changes to be made by ncnb , in the wake of sending five of its top executives to ncnb texas national . mr. kirby , who joined ncnb in , has moved up through the super - regional's system . he will have seen the company grow from north carolina's largest statewide bank to the nation's eighth largest banking concern , once it takes over majority ownership of ncnb texas . a ncnb spokesman described mr. kirby as a " company man " and a proven manager . separately , standard & poor's corp. said it affirmed ncnb's single - a senior debt , single - a - minus subordinated debt and a - commercial paper ratings following the acquisition of first republicbank . about million of debt is affected , the rating firm said . it said it also affirmed the single - a/a - certificates of deposit of ncnb national bank of north carolina and ncnb national bank of florida . standard & poor's said the action reflects ncnb's limited exposure to short - term financial risks arising from the transaction , given the substantial protection offered by the fdic . " in the near term , ncnb is well - insulated from existing and potential asset quality problems , " the rating service said . empire of america federal savings bank , posting a large second - quarter loss , suspended its dividend on common stock . the thrift said it omitted its - cent - a - share payout in an effort to strengthen its balance sheet and preserve equity . empire had a second - quarter loss of million , compared with a year - ago profit of million , or seven cents a share . the thrift said the loss resulted from a higher - than - expected million provision for loan losses . that unanticipated increase in the provision resulted from two factors . first , an appeals court last month reversed a favorable court ruling that empire was entitled to seek repayment of about million in loans . in addition , empire said it found million in loans on its books that " may not be realizable . " in composite trading on the american stock exchange , empire closed at , down cents . the loss in the latest quarter is the most recent problem in a string of difficulties for empire . it has had to divest itself of some units and close branches in an effort to pare costs . empire is the nation's th - largest thrift , with assets of about billion . the lengthy takeover battle for societe generale de belgique s.a. comes to a close today when a unit controlled by france's cie. financiere de suez writes a check for about million to carlo de benedetti to honor a peace pact between the two sides signed in late june . but now that ownership of the big belgian holding company is settled , questions are emerging over how suez and its allies will finance their more than stake in generale de belgique , which cost them more than billion . indeed , sodecom , the unit controlled by suez and in which its ally , belgian insurance company groupe ag has a sizable stake , had to borrow the entire million to buy out half of mr. de benedetti's stake and remove the obstacle posed by his blocking minority . sodecom already incurred about million of debt to subscribe to million shares generale de belgique issued to fend off the italian financier . the debt casts a shadow over the suez group's optimism about a quick turnaround of generale de belgique . suez and its allies wanted to pay off the debt by reducing their stake in generale de belgique to . but suez officials say those talks are encountering " difficulties . " moreover , mr. maxwell's attention is diverted by his billion bid for macmillan inc. , the u.s. publisher . suez says it is talking with other investors it hasn't named , but those discussions appear far less advanced . analysts say that if suez floated part of its stake on the market now to raise cash , the current price of belgian francs ( ) a share likely would collapse because only a fraction of generale de belgique's capital is traded . but if suez and its allies sell their shares for less than the current price , they would take a loss on the average price they paid for the shares during the battle . if they don't sell them , they'll be left in a financial hole that they concede is unsustainable for long . suez officials are optimistic about selling the shares . the debt doesn't pose a lethal threat to suez , mainly because sodecom -- in which suez has a stake and groupe ag holds -- not suez , incurred it . other belgian interests hold the rest . still , " suez has potential debts in its books " of half sodecom's billion debt , a source says . analysts say sodecom's situation can't be maintained long term . the assets of the shell company , which suez and its allies acquired from generale de belgique during the takeover battle , consist of million shares , or , of generale de belgique . the interest on the loans it contracted to buy this stake is said to be higher than the dividends it receives . suez officials acknowledge that the only quick fix would be to sell part of sodecom's stake . they say the initial loan sodecom contracted to buy shares is matched by proceeds from the sale held by generale de belgique . if sodecom can't sell part of its shares , officials say , generale de belgique could acquire sodecom , giving sodecom liquidity to pay off that debt . generale de belgique then would assume the remainder of the debt . the organization of petroleum exporting countries appears to be pulling back from the brink of a possible price war . after recent major price declines because of a sharp rise in opec production , total cartel output has now dropped as much as one million barrels a day -- from the year's peak of million barrels a day early this month . and there are new indications that even the united arab emirates , opec's most notable quota violator , might soon cut its own output below a targeted million barrels a day because of pressure from others in the cartel , including saudi arabia . the emirates aren't making any promises publicly . but its government did offer conciliatory gestures to opec yesterday . the gestures followed the arrival in abu dhabi of opec's new secretary - general , subroto . mr. subroto delivered a letter to sheik zayed al nahyyan , the emirates' ruler , from rilwanu lukman , nigeria's oil minister and opec's president , voicing concern over the emirates' recent renunciation of its assigned quota of barrels a day . the chief conciliatory note at the round of talks with mr. subroto came from sheik zayed , who " reaffirmed " the emirates' support for opec's " unity and cohesion . " the news agency report didn't mention the emirates' production level . but senior oil officials in the emirates were quoted by dow jones international petroleum report yesterday as saying that while the government isn't backing down on its demand for a higher opec quota , current production is well under the target . industry estimates generally place the emirates' current production at between million and million barrels a day . until recently , such excess output by the emirates would have been ignored . but it became an issue for opec -- as well as for the world oil markets -- last month , when emirates' officials went public with their intent to renounce their quota . that not only focused new attention on opec output , which had begun climbing in late june , as previously reported , but it also raised concern among other exporters . with iraq also excluded from the system as a result of fallout from its war with iran , " they are afraid that if the uae continues outside there will be no control over the others , " said bahman karbassioun , a vienna - based consultant on opec affairs . but opec's headquarters yesterday still declined to confirm details of the meeting . " it's tentative because it depends on the outcome of the talks in the uae , " said an opec spokesman . meanwhile , total opec output has dropped as much as after the recent run - up -- with saudi arabia , the cartel's biggest producer , pacing the declines . petrologistics ltd. , a geneva - based consulting firm that closely monitors opec output , estimates production for july had averaged just over million barrels a day after reaching million barrels a day in the first week of the month . that's in line with demand for opec oil for the second half , according to a current report on world oil markets by charles l. mcspadden , manager of petroleum analysis , and antonio m. szabo , manager of petroleum planning , at bonner & moore market consultants , houston . round one in the piano wars between steinway & sons and japanese rival yamaha corp. went to steinway . the dispute began in november , when steinway terminated the franchise of chicago dealer ed hendricks after he agreed to provide yamaha pianos for concerts . mr. hendricks had long sold both steinways and yamahas , but only participated in steinway's concert artist program . then aggressive yamaha , which is trying to enhance its image by showcasing its top - of - the - line concert grands , started its own concert program and began to recruit dealers . mr. hendricks filed suit against closely held steinway , claiming its actions violated antitrust laws . while waiting for that suit to come to court , mr. hendricks asked for a preliminary injunction to allow him to continue as a steinway dealer in the meantime . but late last month , u.s. district judge william t. hart denied that injunction . steinway waited until friday to announce its victory so it could complete arrangements with its new exclusive chicago dealer , the beautiful sound on michigan avenue . a lawyer for steinway said the company " intends to move for a summary judgment for dismissal of the case . " at yamaha , terry lewis , general manager , u.s. piano division , said steinway's tough tactics against mr. hendricks " haven't slowed our ability to place yamaha pianos with yamaha/steinway dealers " for the concert program . dukakis pledged to lead the nation into " a new era of greatness . " accepting the democratic presidential nomination at the close of the party's four - day national convention in atlanta , the - year - old massachusetts governor celebrated ethnicity , optimism and opportunity , and vowed to " rekindle the american spirit . " the son of greek immigrants , dukakis offered broad themes appealing to those democrats who supported reagan and to middle - class suburbanites whose ballots in the fall election may be the margin between victory or defeat . bentsen was nominated to be the vice presidential candidate . the texas senator , in his acceptance speech , said he and dukakis " have differences. . . but stand united " on basic principles . iraq's president hussein said he was " astonished " that iran rejected face - to - face peace talks in favor of u.n. - mediated negotiations to end the persian gulf war . he said " iraq's desire for peace is profound , " and he accused tehran of seeking a tactical advantage by agreeing to accept a u.n. resolution calling for a truce in the gulf . repatriation of pows in both countries is part of a u.n. plan to end the nearly eight - year - old gulf war . cambodia's president said a withdrawal of vietnamese troops from cambodia will be completed in , even if a political settlement isn't reached in talks next week with the rebels opposing phnom penh . china and the soviet union also have agreed to hold talks next month to end the cambodian conflict . hanoi invited the u.s. to participate in searches for the remains of nearly u.s. servicemen missing since the vietnam war . u.s. and vietnamese officials are to meet next week to discuss the joint effort . the offer came amid increasing signs that communist officials in the southeast asian nation seek improved ties with the west . israeli soldiers clashed with palestinian demonstrators in the west bank and gaza strip , killing at least three arabs and wounding others in what was considered the worst arab - israeli violence in more than two months . israel's police also battled with arab protesters in east jerusalem . police in bolivia seized roberto suarez gomez , considered one of the top cocaine traffickers in latin america . a former navy intelligence aide said the u.s. targeted the french embassy when it bombed libya in . glenn michael souther , who defected to moscow , said on soviet tv that he had access to photographs used to plan the attack on tripoli . a navy official said the pentagon was " concerned " about possible data given to the kremlin . top white house aides met in california to map out what reagan's chief of staff called an " active last six months " for the administration . issues under discussion included a renewal of aid to the nicaraguan rebels , drought - relief legislation and getting senate action on federal judicial nominations that have been sent to capitol hill . armenians ignored activists' calls for a strike to protest the kremlin's rejection of their demand to take control of the nagornokarabakh region from neighboring azerbaijan . a recent threat of a crackdown by moscow was cited . the official news agency tass denounced the strike organizers , and said that several had been arrested . the spacecraft's liftoff , the th for arianespace , was conducted at a launching pad in the jungles of french guiana . north korea proposed talks with the seoul government to debate a non - aggression pact drafted by the north . south korea didn't immediately respond to the plan , which called for negotiations to be held in pyongyang . north korea refused earlier this month to accept two offers by seoul to hold political and economic talks . the abu nidal terrorist group denied responsibility for the attack last week on a greek cruise ship in the aegean sea . at least nine people were killed in the assault . in a statement released in beirut , the palestinian group also said that an arab suspect accused by greece of leading the attack has been dead for three years . a contra spokesman insisted that " there is no crisis " in the anti - sandinista movement despite the resignation of seven field commanders protesting the election of military leader bermudez to the rebels' political directorate . the seven officers abandoned their southern front posts tuesday . pakistan's president zia barred political parties from contesting national elections , which he scheduled for nov. . the elections were expected to be held by aug. , three months after zia dismissed premier junejo's government . are you a lawyer who hasn't made partner ? a teacher whose career has peaked ? an artist tired of a life of genteel poverty ? do you think you'd be better off dropping it all to pursue an m.b.a. degree ? think again . getting a graduate degree in business administration may well be a road to a new career . it might even be an exciting intellectual challenge . but in financial terms , it may not be a good investment , especially for mid - career professionals . the problem is the cost -- and not just the cost of tuition . getting an m.b.a. often means a career - switcher has to forgo two years of a substantial salary to study full time , since part - time studies are considered inadequate for students who need to be immersed in a new field . part - time m.b.a. studies are best left to those who aren't changing professions , says michael hostetler , director of admissions at duke university's fuqua school . their conclusion : even with an above - average starting salary , the investment wouldn't be earned back without superstar raises . business schools and employers generally consider students to be career - switchers if they are over years old or have more than four years' work experience . such candidates often feel that their careers , no matter how successful , have hit a dead end . although career - switchers are in the minority at business schools , their numbers are increasing as baby boomers age , admissions officials say . at the university of pennsylvania's wharton school , there are geologists fleeing the petroleum industry . fuqua school has accepted a math teacher and a professional ballet dancer . new york university's m.b.a. students include musicians and newspaper editors . and many business schools are admitting refugees from the law - school rush of the s ; a decade later , these people have discovered they dislike law . " these students have a real hard time financially , " says alice murphy , financial - aid director at new york university . " a lot of a working spouse's income and of home equity is considered available for education . " what's more , while many older students expect their years of experience to translate into higher - than - average starting salaries , that usually isn't the case . at the university of chicago last year , the mean starting salary was for m.b.a. graduates who had three to four years' work experience before returning to school . for graduates who had four or more years' experience before seeking an m.b.a. , the mean dropped to , says barbara mcgloin , placement director . " in many cases their experience isn't relevant " to a new employer , she says . many business schools look askance at applicants who are over years old , quizzing them closely about their expectations . " we do get concerned that they know where they're headed , because placement may be tougher , " says stephen christakos , director of admissions at wharton . the price waterhouse calculations are based on a - year - old career - switcher with years' work experience , quitting a job paying . mr. lucy and ms. caruthers presumed that the career - switching student's salary would have increased a year , roughly the average for middle managers these days , had the person stayed on the job . they also calculated three post - m.b.a. earnings possibilities : that the graduate would start at ; that the starting salary would be , above average for m.b.a. graduates of top schools ; or that the person would start at . annual salary increases of , , and were then factored in . at any of the three starting salaries , a annual increase wouldn't be enough to earn back , over the remaining career years , the in lost salary and in tuition and fees . the fastest payback would be nine years -- at a starting salary and annual raises . at a starting salary and annual raises , it would take years to break even . not everyone would fare so badly , of course . someone making a lower salary to begin with would lose less money by quitting work . students who would have to leave home and live on campus , on the other hand , would face additional expenses that could run over a year . some m.b.a. candidates manage to keep the income flowing while attending school full time . jeff zahn , a - year - old new york musician , was earning between and annually as an electronic keyboard and cello player , but the unpredictability of the musician's life made him opt for business school . " a broadway show can open and close in a night , " he says . now he works while studying full time at nyu . during the day , he's a business student . at night , he plays in the orchestra for the broadway musical " cats . " mci communications corp. , increasingly confident about its financial outlook , will buy back international business machines corp.'s entire stake in the company for million within three weeks . the timing of the move surprised many analysts , even though mci had signaled in march its intent to reduce debt and then start buying back the ibm stake . at that time , mci had said it expected the buy - back to take two to five years . as part of the arrangement , ibm agreed to acquire two million newly issued shares of mci preferred for million . the stock , which isn't convertible to common shares , will pay a dividend . the move reflects a growing operating strength at the washington - based telecommunications concern . by year end , mci expects to have positive cash flow for the first time in its - year history . buying back the ibm holdings will ease fears of some mci executives that ibm would end up dominating their company , according to sources close to mci . the accelerated schedule for the purchase indicates " our confidence in the company and its future , " said daniel f. akerson , mci's chief financial officer . in national over - the - counter trading yesterday , mci common stock rose cents to close at a share . ibm stock fell cents to close at in new york stock exchange composite trading . mr. akerson said mci will pay only about a share for the ibm holdings and that the transaction will leave mci with about million of cash on hand . he declined to provide more details about the mechanics of the transaction . analysts estimated mci's ratio of debt to total capital will rise to about from . the new preferred stock held by ibm will cost mci about million a year in dividends . mr. akerson also predicted that the transaction would have a positive impact on mci's earnings , but he didn't make a specific forecast . last year , mci earned million , or cents a share , on revenue of billion . the company said it doesn't have immediate plans for the million common shares being bought back from ibm. mr. akerson noted , however , that the shares do " provide future flexibility in terms of financing . " ibm acquired the stake in as part of its sale of satellite business systems to mci . in march , the company called the buy - back a top priority . mr. akerson said mci never " felt threatened " by ibm . he said the two companies will continue their " viable , robust relationship , " with cooperative marketing arrangements and joint technical ventures . meanwhile , armonk , n.y. - based ibm is expected to record a pretax gain of about million on the sale in the third quarter , even though mci stock had fallen so much that it seemed for a long time that ibm would take a loss on the investment . around the time ibm acquired the mci shares , there was a great deal of talk that the alliance would lead to an increased push by ibm into telecommunications , but ibm has been backtracking for some time now . it remains interested in making telecommunications equipment and producing software that will help companies manage their networks of telephones and computers , but ibm has been making it clear that it views the common carriers as being in a separate business . paul b. carroll in new york contributed to this article . a shareholder group including edward s. buchanan , a massachusetts banker , said it has acquired a stake in grow group inc.'s common shares outstanding and may make a tender offer for as much as of the company's shares . in a filing with the securities and exchange commission , the group said it intends to discuss proposals with grow group's management , other shareholders and individuals currently unrelated to the company . executives at grow group , which is based in new york , weren't available for comment . the company is divided into a coatings and chemical group , a health and beauty - aids group and a consumer and professional - products group . the holder group already has had discussions with several large industrial companies that have shown " serious interest in acquiring all and/or parts of the company , " the group's filing said . other possible actions the group might take include seeking a merger of the company with another entity or the sale of some or all of grow group's assets to one or more entities , possibly related to the group . it might also request representation on grow group's board , although it isn't expecting the company to be " receptive " to such a proposal , it said , " based on prior conversations with management . " according to the filing , the group's stake consists of grow group common shares that were acquired for a total of million . it said it may purchase more shares " in order to influence the company's management . " the group said in its filing that its members " don't intend to be passive investors , " with regard to the grow group investment , and called the company's stock " significantly undervalued . " in new york stock exchange composite trading yesterday , grow group closed at , up cents . the house's top taxwriter proposed a host of new tax breaks , even as the treasury criticized earlier proposals and the likelihood of enactment faded . chairman dan rostenkowski ( d. , ill. ) of the house ways and means committee placed before his members a long list of new tax benefits , totaling billion over three years . he also suggested a list of tax increases , totaling million , as a way to pay for the largess . the proposals were part of a continuing effort in the house committee to complete a bill that would make technical corrections to the tax overhaul measure and extend expiring tax benefits . the breaks , most of which were generic in nature , would help groups ranging from writers , photographers and painters to pistachio farmers and cattle ranchers . revenue would be raised by imposing a new tax on pipe tobacco and slowing the depreciation on some farm equipment . in addition , the rostenkowski proposal would give the treasury its long - sought authority to issue an unrestricted amount of long - term bonds . but the future of the bill remained unclear as the senate stumbled forward on its version of the measure without the leadership of lloyd bentsen , the chairman of the senate finance committee . the senate panel held a hearing yesterday , and members expressed a desire to provide a variety of tax breaks . but several also expressed doubt that a bill could be put together . the bill " is going to be affected by bentsen's situation , " said sen. john chafee ( r. , r.i. ) . " it's going to make it much more difficult . " at the hearing , the treasury expressed strong opposition to a tax provision that would reduce the dividend deduction taken by corporations that own stock in other corporations . the provision , which has been approved by the house committee as part of its technical corrections bill , is estimated to raise billion over the next four years . don chapoton , assistant treasury secretary for tax policy , told the finance committee that the provision " would reverse longstanding and fundamental principles of corporate taxation solely as a revenue - raising measure . " federal national mortgage association's second - quarter profit rose to million , or a share , primarily because of higher net interest income . the strong results demonstrate " the company's reduced sensitivity to ( fluctuations in ) interest rates , " said chairman david o. maxwell . fannie mae , as the company is known , has tried to protect itself against interest - rate shifts by generally matching the duration of its assets and its liabilities . " we expect the company's strong earnings to continue , " mr. maxwell said . fannie mae is a federally chartered , publicly traded concern that buys mortgages from lenders , holds some in its portfolio and packages the rest for sale as mortgage - backed securities . the company's net interest income rose to million in the second quarter from million a year earlier , when net income was million , or cents a share . fannie mae's mortgage portfolio stood at billion at the end of the second quarter , compared with billion a year earlier . the yield on the portfolio at the end of the quarter was , compared with at the end of the period . at the end of the quarter , fannie mae had billion in mortgage - backed securities outstanding , compared with billion . charges to the company's loan - loss allowance because of foreclosures declined to million in the second quarter from million in the first quarter . but the level was higher than the year - earlier period , when the charges were million . the charges " were concentrated in the energy - belt states , including texas , louisiana and oklahoma , " a spokesman said . in the second quarter , fannie mae issued billion of debt at an average cost of and redeemed billion at an average cost of . it purchased billion of mortgages , a rise from billion in the second quarter of . the absence of buyers pushed the over - the - counter market down for the second day in succession . the nasdaq composite index of stocks closed at , down . volume was million shares , well below the average trading volume in june of million shares ; million shares rose and million declined . " portfolio managers seem to have backed away from the market , and trading is only on some kind of news or other , " said jerry newman , head of otc trading at hambrecht & quist in san francisco . xidex , the day's most active stock , gained / to on million shares after announcing it had signed a letter of intent with anacomp to be acquired for a share , or a total of more than million . westwood one , one of the day's biggest losers , fell / to / on million shares after reporting a decline in second - quarter earnings . traders said there was heavy institutional selling in the stock , which dropped as low as / during the day . the culver city , calif. , radio - network operator also fell because hambrecht & quist , the company's underwriter , sharply lowered its earnings estimate for the third quarter , ending in august , and for the rest of the year . " although a decline in earnings was expected , the severity wasn't , " said dennis mcalpine of oppenheimer & co. in new york . westwood one is beginning a multicity presentation to institutional investors to discuss its problems . micron technology , another of the day's most active issues , dropped / to / on million shares after prudential - bache semiconductor analyst richard whittington reduced his investment rating . he cited recent sharp increases in the price of the stock and concern about management resignations . late monday , after trading ended for the day , the boise , idaho - based microchip maker announced that its president and chief operating officer , juan a. benitez , and its chief financial officer , leslie a. gill , had both resigned for personal reasons . intel was up / to / on million shares after reporting record earnings . the reaction contrasted with the disappointed investor response to earnings reported earlier by national semiconductor and advanced micro devices , two big board chip makers . among other big nasdaq industrial stocks , apple computer fell / to / ; sun microsystems lost / to / and microsoft dropped / to / . mci rose / to . sigma - aldrich rose / to / on shares -- more than twice its recent daily average of about . the stock rose a dollar monday on volume of shares . traders couldn't explain the buying surge but said a number of analysts have been recommending the stock in recent weeks . " what you have is some buyers but not a lot of stock to buy , " said joe kern of milwaukee's robert w. baird & co. , which makes a market in sigma - aldrich , a st. louis - based maker of specialty chemicals . wall street has long found it difficult to fathom the odd grab - bag of businesses that make up zurn industries . but now investors are starting to take notice , and the shares could benefit . zurn's water - quality control unit makes some of the world's lowest - tech products , such as pipes to move water along . yet the same zurn unit includes permutit , an ultra high - tech user of reverse osmosis for water treatment . " it's a complicated company to try to figure out exactly what's what , " says walter j. kirchberger , a vice president for research at painewebber in detroit . this lack of understanding has investors licking their chops on two fronts . one camp thinks that the stock has remained undervalued as investors grapple to comprehend the businesses . another camp hopes for a takeover or leveraged buy - out , though the erie , pa. , company says it doesn't know of any such thing in the works . not since the s -- that long - gone era of the conglomerate -- have investors been able to find under one roof units as diverse as waste - to - energy conversion and golf clubs . " this stock has languished , " contends alexander alma , vice president of research for r.c. stamm & co. , a new york institutional brokerage . " a more aggressive management would have moved this company and stock on a faster growth path . " that's the kind of talk that raises eyebrows at merger and acquisition departments across the street . while mr. alma is quick to say that he likes zurn's management , he calls the company " a good candidate for acquisition . " zurn's stock has been unusually active for two days . the shares slipped / to / yesterday on volume of shares , more than twice the average turnover ; that followed tuesday's / jump on volume of . a company spokesman says he isn't aware of any takeover activity . " there is no fundamental change in the company's operations that i know about , " he says . takeover talk notwithstanding , investors are taking a new look at the company . larry greenberg , pollution - control analyst at fidelity investments , expects revenue from zurn's waste - to - energy systems unit to grow to this year while the company's water quality - related business expands to . analysts are impressed by zurn's order backlog , which has shown solid growth in the past year . at the end of march , zurn's waste - to - energy backlog stood at million , about higher than the year - earlier level . the company's water unit had a backlog of million , roughly greater than the figure . painewebber's mr. kirchberger thinks the company's future largely depends on how well management can grow the waste - to - energy business , which supplies equipment and builds operating systems for waste - to - energy conversion plants . many landfills have reached capacity , and analysts expect the industry to continue expanding . " it's a rapidly growing segment and their growth is probably to the point where it's starting to blossom , " mr. kirchberger says . still , he is wary of competition in the field , and currently thinks zurn shares are " fairly priced . " analysts generally expect the company to earn to a share in the current fiscal year , ending march , , compared with a fully diluted share for the recent fiscal year . storage technology , one of the big board's most active issues in the past week , continued its fierce trading pace wednesday with more than four million shares changing hands . but speculators can set aside fantasies of electronic data systems founder h. ross perot making a play for the louisville , colo. , data storage concern . on wednesday his secretary called to pass along this message : " he says the rumor that he is buying storage technology is not true . " stressed - out kids say the darndest things . when linda mohr joked recently that her son shane's hair was too long , he pulled her up short . " i really don't care about my hair , " the eight - year - old said . " i just care about getting through . school's a war . the playground's a war . the cafeteria's a war . life is a war . " shane's battlefield is the second grade in the sawmill school in tewksbury , n.j. like many schools pushed by upwardly mobile parents , sawmill has toughened up . parents say there are more tests and homework . for the first time this year , shane had different teachers for each subject , a practice once begun in junior high . last month , his little brother took that first big entrance exam -- for kindergarten . alarmed by what they see as undue pressure on their kids , mrs. mohr and other parents are urging sawmill to ease up . for one thing , they want a curricular consultant keen to toddlers' frailties . yuppie youngsters on the fast track to harvard already know the drill -- flashcards and swimming lessons in diapers , suzuki music and gymboree later . but now , teaching lots to tots has moved into the mainstream . check out your neighborhood school . the four - to - six set spends more hours at desks , faces more rigorous tests and sits behind more computer screens than ever . it's even possible now to flunk kindergarten in places such as minneapolis and georgia . many parents are beginning to wonder : do we expect too much of the very young ? many pediatricians and psychologists say stress - related problems in children are increasing . children's hospitals report more injuries associated with repetitive training exercises . in white - collar suburbs , teachers and parents speak of elementary school " burnouts " -- children who bloom early but wilt by age or . " i'm seeing kids in second and third grade being referred for attention problems and hyperactivity as a result of being stressed and being expected to do things they're not ready to do , " says robert block , a tulsa , okla. , pediatrician . " they're in a sphincter - tightening , teeth - grinding kind of environment . you see them in class and their mouths are twisted , their tongues are out , they're sweating a little . " by age or so , according to several studies , the other kids catch up -- and may wind up emotionally healthier . some research even suggests that those pushed early eventually fall behind other children . not everyone believes that children are being pushed too hard . advocates of more content in school say one failing of the u.s. education system is weakness in the early years . they cite tests showing american kids lagging badly behind children in almost all other major industrialized countries . the only way to close that gap , they argue , is more academic rigor at every level . explanations for the kiddie rat race also cite the two - job couple . the rise in working mothers has increased reliance on day - care centers , which market themselves by offering more " enrichment " programs . parents , in turn , demand their money's worth . " we have a lot of parents wanting us to be teaching reading to two- and three - year - olds , " says pat gurevich , who runs two nurseries in westchester county , n.y . " they say , 'we're not paying for play . we want to see product.' . " even though deborah cherniss delayed for a year her son joshua's entry into kindergarten in piscataway , n.j. , she says he still had a hard time with all the worksheets , phonics and desk time . and she recalls joshua's reaction to his first week of first grade : " they don't give us enough time to rest our heads and our hands . " for many decades , childhood experts have been calling spontaneous play the healthiest path to development . but now , in some circles , play is " passe . " " we're doing a lot of harm to children , " contends david elkind , a child - care author and psychologist at tufts university in medford , mass . " eventually so much harm will be done , we'll get wise. { but first } we're going to see many children with long - term learning problems . they're going to drop out of school . they're going to be emotionally troubled . " margaret dee , a chicago mother , says that from infancy her son nathaniel was treated to " all the things that parents do to push their child " -- including flashcards , calculator practice and tough quizzing as he was read bedtime stories . by / , mrs. dee says , " he was clingier than other kids , and we had trouble with potty training . " so , mrs. dee went to a chicago psychological clinic , the theraplay institute . theraplay has created a business out of teaching parents and child how to play again . more play has helped , but mrs. dee says nathaniel is still paying the price for the early pushing , falling behind in some subjects and lacking confidence . " he's full of self - doubts and will say things like , ' i'm not smart enough , ' " mrs. dee says . explaining himself dejectedly one night , nathaniel said with a sigh , " you know , sometimes my head's so full of what's going on , i just can't write it all down . " theraplay , mr. elkind and parents such as mrs. mohr in tewksbury are part of what can only be called a let - kids - be - kids movement . blocks , not books , they say ; more song , less software . the naeyc wants no standardized tests of any kind before third grade . a few signs of change : california is moving toward some gentler approaches , while arizona and north carolina recently curbed testing of first and second graders . but for some parents , such changes come too late . sinikka laine , a painter in annandale , n.j. , once reveled in her son finn's creativity . at age eight , he wrote a story about people , somewhere far away , who ate stars hatched from purple pebbles . " i saw all kinds of periwinkle flashing lights and grapefruit dots , " finn wrote . " i met a rainbow tree whistling and running in the sky . " finn , now , doesn't write much like this any more , mrs. laine says . she blames a school regimen that she says has stifled his enthusiasm , even though his marks are as and bs . finn and his twin brother , blue , come home from fourth grade tired and tense . homework -- " papers and papers and papers , " mrs. laine says -- drags on for hours ; finn and blue wake up early some mornings just to finish . " my kids are exhausted , " she says . children are under a lot of stress . " many parents , impatient for change in the schools , respond by keeping their kids out of kindergarten an extra year . motives are mixed . some say they want to protect their children ; others angle for an age advantage that will vault their offspring to the head of the class the following year . many schools are encouraging holdouts , resulting in what some educators call the " graying of kindergarten . " marilyn mauer held back five - year - old benjamin last september and kept him in a play - oriented nursery . " everybody around here is doing it , " says mrs. mauer , a mother of three in the philadelphia suburb of wynnewood , pa . " he's socially immature , a little shy ; he wasn't ready for all the academics . " in nearby ardmore , karen reynolds had her son lee in a nursery - school class of . all were old enough for kindergarten last fall ; all were held out . " we're absolutely sure we made the right decision , " says mrs. reynolds , who will send lee to kindergarten in september . " he's just blossomed this year . he's creative , imaginative , articulate. . . . i can't help but think he'll be one of the leaders . " for such youngsters , many school districts have started pre - kindergartens . and for those held back in kindergarten , some schools have pre - first classes between kindergarten and first grade . delayed entry may be one of the major undocumented educational trends of the s . samuel meisels , a researcher at the university of michigan's center for growth and human development , estimates that at the entitling legal age , usually about five years and nine months , at least of all children aren't in first grade . megan sullivan is one of them . happy and outgoing , she started kindergarten at a madera , calif. , catholic school in the fall of , her mother , dianne , says . but the curriculum -- four kinds of workbooks and drills in drawing from memory -- soon overwhelmed her . first , megan skipped recess to keep up . then , she started crying and sucking her hands and clothes in class . at home , she often had nightmares . " she wasn't happy anymore , " mrs. sullivan says . " she was insecure -- terrified to go over to the group and play . " megan's confidence is back , mrs. sullivan says , and next year it's on to first grade . now wary , mrs. sullivan will give megan's five - year - old brother , patrick , an extra year of day care before he takes the kindergarten plunge . one indicator of the tension surrounding kindergarten is the controversy over growing use of a preschool readiness test , created by the gesell institute for human development in new haven , conn . orders for gesell test materials jumped between and . the institute estimates that of the country's school districts use the test . the centerpiece of the - minute battery of block - building , drawing and oral questions : an incomplete stick figure that children must finish . the test draws heavy fire . mr. meisels at michigan , a federally commissioned study and several test reviewers have panned it as unreliable . when norwood - norfolk central school in norwood , n.y. , used the test last fall , of all prospective kindergarteners were identified as unready and assigned to developmental kindergarten . parents of one child , shannon liebfred , filed a complaint with the state department of education , and norwood - norfolk caved in . gesell officials say the test's accuracy in measuring readiness has been verified in years of clinical observation . also , gesell says , even its critics acknowledge that something must be done about overly rigorous kindergartens . despite parental sentiment to the contrary , many childhood specialists discern no evidence that children held back early in their educations wind up doing better in school . lorrie shepard , a university of colorado professor who has studied delayed entry and kindergarten holdbacks , says the tactics don't address the main problem : inappropriate content in kindergarten . delaying entry , she adds , " only ups the ante . the more the kindergarten is filled with six - year - olds , the more teachers will teach to them . " the tennessee valley authority began layoffs that will extend to one - fifth of its work force and unveiled a management austerity program in an effort to ease the federal utility's deep financial problems . the plan is the first major step by tva's new chairman , marvin runyon , to overhaul the agency , which among other things has been criticized for having a bloated bureaucracy . but it prompted criticism from unions and other groups . " it hurt many , many people the way it was done , " said jim eickman , executive director of the the tva engineers association , which represents some of the the tva employees . tva also will curtail its troubled nuclear power program . it said it will mothball its bellefonte nuclear plant near hollywood , ala. , which had been under construction , and slow construction at the watts bar plant near spring city , tenn . of four nuclear power stations either built or being constructed at a cost of billion , only one unit of one facility -- the sequoyah plant near chattanooga , tenn. -- is currently producing electricity . the layoffs and cutbacks in the nuclear program are designed to save million that otherwise would have been covered by increasing electric rates for tva's customers . in addition , mr. runyon told tva employees in an address yesterday , " we'll stop using and get rid of our corporate aircraft . " layoffs are necessary , he said , to make tva more competitive with other electric utilities and to keep a promise not to raise rates for three years to tva's customers . in all employees will lose their jobs by oct. . the cutbacks were telegraphed in april , but until now the extent of the layoffs wasn't disclosed . at that time , mr. runyon warned of " substantial " losses of jobs . the cuts will reduce the number of management levels at tva from about a dozen to seven or eight , mr. runyon said . " i'd like to see it at five , " he said , adding that making further cuts now would be " doing too much , too fast . " he declined to discuss any specific future plans , but he hinted that more restructuring was to come . " we're going to try to become a more productive , more competitive organization , " he said . that doesn't promise to be easy at tva , the utility that was created in and became one of the bright stars of franklin roosevelt's new deal . in recent years , the utility has become mired in bureaucracy and financial problems after investments in nuclear power turned sour . now , according to mr. runyon , it had little choice but to make deep cuts . " if we hadn't done this , in a few years we'd be going out of business completely , " he said . mr. runyon , who came to the tva with a reputation as a can - do auto - industry executive in january , wants to run the utility less like a government agency and more like the efficient u.s. auto plant he started for nissan motor co. of japan . as tva merges departments and attempts to weed out duplication , some people are losing their jobs in administration centers in knoxville , tenn. , and chattanooga , tenn. , and muscle shoals , ala . they include managers , engineers and secretaries . among them are positions in the chattanooga office that oversees the production of electricity . not surprisingly , tva's unions aren't pleased . tim witt , president of a knoxville local of the office and professional employees international union , said the sudden layoffs violate an agreement that tva management would notify some of its unions days in advance of any layoffs . " the biggest gripe is we had two days notice to look over all these changes , " mr. witt said . mr. runyon said he isn't aware of the letter but added : " i'm sure we're not doing anything illegal or not within our rights . " the decision to cut back on nuclear power drew criticism from the tennessee valley energy coalition , a citizens' group that monitors the tva. mark siegel , the coalition's executive director , says the cutback didn't go far enough . " we feel like they should have taken deeper and stronger measures to deal with the problem , " he says , such as scrapping its browns ferry nuclear plant near decatur , ala . current plans call for getting one of three units at that facility running by the end of the year or early . the senate approved a measure that includes a pay raise for all federal civilian workers except members of congress . the increase , which would take effect jan. , is part of a billion spending bill to fund the treasury , the postal service , the white house and several independent federal agencies for the year beginning oct. . the legislation was approved by an - vote . in the past , congress has approved additional funds to cover salary increases , but the senate - passed measure states that the departments and agencies would have to pay for those raises without any additional funds . the senate appropriations committee's report accompanying the bill states that agencies shouldn't cut their staffs in order to pay for the higher salaries and should instead cut " low - priority areas , such as travel , ( that ) have the least impact on staffing . " the house - passed version also includes the raise , but would require agencies to absorb only half of the cost . the rest would probably come from a supplemental spending bill sometime next year . lawmakers are paid a year . separate legislation would give a pay raise to the military . a house - senate conference committee will reconcile differences between the two bills . the committee report accompanying the senate bill also includes language barring the customs service from closing or scaling back its office in charleston , w.va. , and directing the general services administration to build a coast guard facility in martinsburg , w.va. , by march . west virginia sen. robert byrd , the senate democratic leader , is relinquishing his leadership post to become chairman of the appropriations committee next year . re your june editorial " let them in " : i am extremely thankful to those who agree that vietnamese or other refugees should be accepted by free nations . my family and i were refugees seven years ago . we escaped from vietnam on foot . the experiences we suffered are inexplicable in words . however , i want to let the people in america know that refugees are not handicapped , helpless people . they had their own homes and businesses in vietnam until the communists took over . they are just victims of a decaying society caused by the communists . all they need is freedom and a chance to excel . therefore , i thank america and those who believe in people helping people . and for those who think that refugees are a burden , please put yourselves in their position and ask yourself what you would do to protect your family from the sharp claws of communism . on returning from a recent trip to asia , i shared a flight with cambodians coming to seattle to resettle in this country , and another afghanistan refugees also . i was so taken by the cultural distance they were traveling that i am now working at our local refugee - resettlement agency . to talk with our sonoma county refugees is to look war in the face . they have had to deal with situations and tragedies that most americans cannot even imagine . i confirm your view that america should welcome them . we do have the resources to deal with the vast changes in such institutions as education that will be required as more and more refugees come to our shores . ultimately , the advantage will be ours as the world sees how they can contribute to our strength as a multicultural country that welcomes diversity . re " detained aliens need a bill of rights , " martha f. davis , editorial page , may : in her otherwise excellent article on the rights of detained aliens , ms. davis states that aliens in immigration proceedings " have no right to counsel . " on the contrary , the right to counsel is provided for in the immigration and nationality act , but with one important proviso -- " at no expense to the government . " but the demand far exceeds the supply of available representation . deportation ( or exclusion ) can be , in fact , a " punishment " far worse than any incarceration for a criminal conviction . yet the characterization of immigration proceedings as civil rather than criminal allows the government to run roughshod over unrepresented aliens , who are generally intimidated by the immigration and naturalization service and unaware of their rights . forcing the ins to inform aliens of their right to apply for asylum is a step in the right direction , yet a pitifully inadequate one : most asylum cases contain a thousand hidden pitfalls that only competent counsel can hope to avoid . the unrepresented asylum applicant may unwittingly be digging his own grave . the ultimate irony is that the ins is part of the justice department , which is ostensibly concerned with matters criminal rather than civil , and immigration practitioners quickly come to realize that the ins in fact tends to treat aliens as if they were criminals . until our immigration statutes are amended to provide for government - appointed ( and government - paid ) counsel for indigent aliens in civil immigration proceedings , progress will be minimal . a mud - slinging presidential - election campaign in venezuela has deepened public unhappiness with the country's economic stagnation and disenchantment with the political establishment . the strong favorite , carlos andres perez of the ruling accion democratica party , and his conservative rival , eduardo fernandez , both are pledging to ease the bureaucratic restraints and foreign - exchange regulations that discourage exports essential to making payments on the country's billion foreign debt . mr. fernandez , years old , is appealing to young voters and dismisses the - year - old mr. perez , a former president , as the symbol of a tired system . he promises a " new democracy , " without clarifying what that means . mr. perez , meanwhile , has won support with his charismatic oratory and defiant stance on venezuela's debt , criticizing the international monetary fund , for example , for its " economic totalitarianism . " the u.s. administration and banks would face a more combative and nationalistic government if mr. perez wins . but six months away from the dec. vote , most venezuelans are reacting to the candidates' promises with indifference . " we have a dictatorship of the parties . they have their fingers in everything , " says economist pedro palma . newspapers are full of venom as the two dominant parties -- accion democratica and mr. fernandez's social christian copei -- accuse each other of accepting kickbacks , smuggling , and conniving with drug dealers . " there is no central theme in the poll , " claims mr. perez , who nationalized foreign holdings in the oil industry during his - rule . political scientist jose antonio gil suggests the candidates are focusing on personal attacks because the real issues are so tough . with oil revenue down to about billion last year from nearly billion in and not expected to rise this year , analysts say the next president will have to take harsh austerity measures . these would include a substantial currency devaluation that would probably exacerbate inflation . the country , analysts say , has tried to fudge things under president jaime lusinchi . to cope with its balance - of - payments problems , it has imposed quotas on imports , and maintained artificially high exchange rates for products deemed essential . the result has been bureaucratic chaos and rampant corruption as both importers and exporters try to skirt the restrictions . " if there is a problem , people tend to pay a bribe , " finance minister hector hurtado navarro acknowledges . moreover , there hasn't been much incentive to export because the central bank pays only bolivars for each dollar earned abroad , half the free rate . as a result , some industrialists have been faking export documents to hide the true size of their exports and thus leave some of the payments abroad , and others have been setting up shell companies in foreign countries to buy their products for next to nothing and then resell them at a much higher price . dollars earned that way can be deposited abroad , or brought back in at the free rate . " the exchange regime is an artificial , distorted , bureaucratic sort of nonsense , " says commercial lawyer john pate . an executive at the big corimon c.a. group says the company has had to hire people just to process the import - export red tape . but while the government bureaucracy stifles exports , it is also an instrument of political control . " if venezuela becomes a country geared to exports -- and it has to -- industrialists will be freer , and the parties are afraid of that , " says mr. gil , the political scientist . both mr. fernandez and mr. perez say they want to scuttle the dual exchange rate , remove red tape , and promote exports and foreign investment . but they haven't clarified how or debated the issue in any depth . meanwhile , the bureaucracy and kickbacks paid to it are a potent symbol to many venezuelans of the degeneration and limits of their democracy . part of venezuelans' indifference to the current campaigning stems from the belief that mr. perez , with his broad labor support and his magnetism , holds an unassailable lead over mr. fernandez , who has failed to produce a coherent economic platform . opinion polls give the ruling party's candidate a - percentage - point advantage at this stage . france's cie. financiere de suez and its allies secured effective management control of societe generale de belgique s.a. under an agreement negotiated with italian financier carlo de benedetti that ended the long battle for belgium's biggest holding company . under the agreement , which was reached earlier this week , mr. de benedetti will sell part of his generale de belgique stake to suez and its belgian allies , which currently own about . this will reduce the stake of mr. de benedetti and his allies from to about , sources said , effectively ending his ability to block important decisions that required a vote of shareholders . in return , mr. de benedetti will obtain an undisclosed cash payment , raise his stake in suez to from the current , and get at least three seats on generale de belgique's board , the sources said . the agreement marks a surprising end to one of the most - publicized and brutal battles in the usually genteel business dealings of continental europe . both mr. de benedetti and the franco - belgian consortium fought bitterly over the company in hopes of turning it into a pan - european holding company ahead of the planned removal of internal european trade barriers in . for mr. de benedetti , the agreement reflects a concession of defeat after months of seeking to break up the franco - belgian group's majority . for suez , the agreement is a clear victory that finally will allow the french financial company to effectively run generale de belgique , appoint a chief executive and reorganize the belgian company's outmoded management structure . in a second stage , the franco - belgian group will be able to bring in more partners and already is reported to be negotiating a possible sale of shares to british press magnate robert maxwell , though this couldn't be confirmed . mr. maxwell said , however , that he is in advanced stages of negotiations with generale de belgique on creating a joint communications company . ironically , the complex agreement will give mr. de benedetti more power than he has now in generale de belgique , a company that he fought for five months to control . before the accord , he was the company's biggest shareholder but was excluded from any role in management by the franco - belgian majority . analysts and close observers were divided in their assessment of the agreement . " de benedetti reinforces { his } position at suez and re - establishes his alliance with them , " one source said . " given the situation he was in , it's a good agreement for him , " another said . but a senior investment banker who has followed the battle closely said it is " a face - saving deal . " suez and its allies now will be able to proceed with plans to streamline generale de belgique's management structure , which hasn't been altered since the th century . the suez group has said it will dissolve the belgian company's current - member board and create a two - tier management , with a chief executive running day - to - day operations and a management committee that defines strategy . french banker herve de carmoy , former head of international operations at midland bank plc in london , already was designated by the suez group as chief executive , but his appointment will be delayed until a special shareholders meeting , expected in a few weeks , is held to vote on the accord with mr. de benedetti . if the new shares were included now , the suez group would have about of generale de belgique . after the accord with mr. de benedetti , the suez group will have nearly of the concern . that will allow the suez group to return part of the shares to the market , though it is likely that the suez group will first sell some of those shares to allies . it isn't clear when this will occur . already yesterday , speculation was rife that mr. maxwell would buy a large stake in generale de belgique , but a spokesman for his maxwell communication corp. declined to comment . the spokesman said , however , that discussions about a communications joint venture have " reached an advanced stage " and that the new company's equity base would be " several hundred million pounds . " generale de belgique suggested forming the venture , which would be jointly managed but operated by mr. maxwell , the british company said . several analysts said they couldn't understand why mr. maxwell would be interested in cooperating with generale de belgique or even buying a stake in the company . other analysts said it wasn't clear whether mr. maxwell and generale de belgique would reach agreement . mr. maxwell has been known to indicate an interest in purchasing a company , only to later buy a stake in it or altogether lose interest . the house ways and means committee voted sharp restrictions in the tax exclusion for employer - paid tuition . the exclusion for the fringe benefit expired at the end of last year . the committee voted to extend it for lower - income employees taking undergraduate courses . but it would not be allowed for upper - income employees or for post - graduate courses . the decisions were part of a developing tax bill that would increase revenue by billion in fiscal , and by billion through fiscal . the committee's action yesterday would continue the benefit through , though at a reduced level , effective jan. of this year . rep. frank guarini ( d. , n.j. ) proposed an amendment that would phase out the tax - free benefit as employees' income rose ; his aim was to win support for continuing the benefit for post - graduate work . but his effort to include post - graduates failed , and the phase - out of the benefit for upper - income workers succeeded . republicans were rebuffed in efforts to reduce the annual limit of tax - free tuition benefits below the in prior law . the target was to raise million over three years compared with the proposal put forward earlier by chairman dan rostenkowski ( d. , ill. ) to extend the benefit except for post - graduate work . the fate of that extra million was hotly contested . many members are carrying with them handfuls of amendments that would give tax breaks for individuals or corporations back home . but rep. rostenkowski was actively fending off those " special interest " provisions , arguing that their inclusion would threaten the bill , which is aimed at making technical corrections to the massive tax overhaul act of . so far , members have resisted the temptation to include the amendments in the bill , and some believe the temptation might be resisted entirely for the sake of the success of the legislation . one member said that if even one special amendment is adopted , " the floodgates could be opened " for many other amendments . in other action , the committee extended the credit for low - income housing and agreed to proceed with a previously agreed to bill of " technical corrections . " but overall , the committee made only halting progress because of the death tuesday night of the panel's senior republican , rep. john duncan of tennessee . three years ago , n.v. fokker's aircraft - assembly plant here was a lonely place . the last of the company's f - jetliners were being fitted together in one hall , while fokker's new projects were only drawings on a computer screen . today , there isn't a yard of space to spare . rows of new f - turboprops fill two huge halls , sporting such logos as those for philippine airlines and inter - canadian on their tails . another assembly hanger is crowded with f - jetliners for swissair . fokker should be the envy of the aerospace industry . its production is sold out until . technical journals tout its planes' performance . its stock price is rising and its may share issue was a success . instead , fokker faces extinction . although the - year - old company has pulled out of dangerous spins before , its current recovery could be its last as an independent among aerospace giants . as part of a government financial bailout , fokker is under orders to find a partner by . but the proud company , whose customer list reaches back to the red baron and amelia earhart , doesn't want to lose its self - determination or its venerable name . it may be dreaming . " and fokker can't afford it . " the events of the past year -- cost overruns , a cash crisis , a management shakeup , production problems and a government rescue -- have made one thing plain : fokker is too small , even with state subsidies , to go it alone in the big - bucks game of airplane manufacturing . " we agree with the government that fokker , and holland in general , is a little too narrow a base " to support a full - blown aircraft builder , concedes reinder j. van duinen , a board member and president of the fokker aircraft unit . most airplane builders of fokker's modest size make much of their money as subcontractors to the big three -- boeing co. , mcdonnell douglas corp. and airbus industrie -- or to one another . or they are part of large groups that make defense equipment or autos . fokker behaves more like one of the big three , contracting out work to the likes of west germany's messerschmitt - boelkow - blohm g.m.b.h . but the company has only employees , compared with about at mcdonnell douglas's civil - aircraft division alone . fokker's current market value is a paltry million guilders ( million ) , compared with billion for boeing . fokker's defense work accounts for only of revenue , while british aerospace plc rakes in of its sales from military aircraft , weapons and electronic systems . even with government help , fokker's survival has been a small miracle . " in this type of game , you need a hell of a lot of money , " says erik nederkoorn , fokker's new board member for finance . " the japanese , the germans put staggering amounts into new projects. . . . this company ha s always been fairly weak financially . " fokker decided in to revive its fortunes by going after the growing market for regional airliners . it planned to update first its popular f - turboprop , then its f - twin - jet . but the government , which normally provides development credits , insisted on a single aid package of million guilders . so fokker simultaneously launched a new - seat commuter plane and a - seat jetliner , knocking itself out to satisfy customers' design requests . both new models , planned as derivatives , ended up being mostly new . " we underestimated the complexity of some customers' requirements , " says mr. van duinen . the effort won some enviable customers , though . the f - has been ordered by the largest aircraft - leasing companies , gpa group ltd. of ireland and international lease finance corp. of the u.s . the f - , aimed at third world customers , has attracted orders from the likes of austrian airlines and lufthansa's commuter affiliate , dlt . the strains , however , were enormous and the price high . the two programs ran months late and over budget . though the government lent a further million guilders in , cash flow was squeezed as development costs mounted . the weak dollar made things worse . complicating matters , fokker's finance director quit and its largest lenders asked the government to guarantee their loans to fokker . certain dutch politicians started calling for the resignation of frans swarttouw , fokker's chairman of years . last october , the government moved to save fokker from financial collapse with a cash infusion and other financial help . but in last month's rights issue , shareholders showed surprising demand for the new shares , leaving the government with only of common stock . the state hasn't yet demanded a second rights issue and fokker hopes it won't . emboldened by the offering's success and by recent orders , fokker isn't feeling as desperate as it did a year ago . it expects to break even this year after 's million - guilder loss . it has let the hague know it won't rush into a partnership in which it would lose its independence . it isn't clear what leeway the company might have in meeting the requirement that it find a partner . statements from fokker indicate it believes there is room for maneuver . " we aren't ripe for the picking , " warns chairman swarttouw . a spokesman adds that partnership doesn't necessarily mean merger . there's no shortage of potential collaborators . fokker said last fall it was talking to mbb , the west german company with a stake in airbus , about increasing cooperation . daimler - benz ag could be another candidate . the japanese may be interested in fokker as well . for now , the company's efforts are aimed at the next sale and the next airplane on the assembly line . " gradually , we are finding our feet again , " says mr. swarttouw . " we have gone through the worst now and are back in the race . " during a recent cost - cutting drive , james orr , chairman and chief executive of unum corp. , an insurer in portland , maine , asked for a daily count on the number of company employees . he was told he couldn't get it . some data were kept by divisions and so were hard to gather together in one place . some were in a payroll data base accessible only to programmers . mr. orr persisted , however , and now the answer is at his fingertips whenever he wants it : a specially designed executive information system links personnel data to a personal computer in mr. orr's office . " management knows i'm watching the count very closely , " he says . " believe me , they don't add staff carelessly . " top executives are slowly entering the computer age . though many remain wary , a growing number of them are demanding that they be given easy - to - use computer systems that let them see electronic information their own companies and outside firms generate . to meet these needs , executive information systems are starting to filter into the halls of power , giving top managers access to the data they want without requiring them to go through a long learning process . in some executive information systems , terminals or personal computers are linked to mainframes ; in others , users load diskettes of data into stand - alone pcs . but executive information systems are different . for one thing , they look different : they have high - quality monitors with bigger screens that can display lots of splashy colors and a variety of detailed charts and graphs . senior executives also rarely have to touch any keyboards . they can control their computers by touching the screen or by using a " mouse . " executives also don't use the computer nearly as much as most of their subordinates -- perhaps only minutes a day . and when things go wrong , they get quick attention from corporate data - processing experts who aren't available to most departments . but the biggest difference is that executive computers are used mainly to look at information rather than to create it . " an executive is someone whose main responsibility is to consume reports rather than produce reports , " says wayne burkan , a consultant with comshare inc. , an ann arbor , mich. , company that makes executive information systems . the field is growing . a tutorial on the systems at a conference of the institute of management sciences in boston earlier this month drew more than academics and corporate computer planners , up from last year . a new book on the subject by two researchers at the massachusetts institute of technology has unexpectedly gone to a fourth printing . david delong , a harvard business school researcher , estimates that barely of top executives use any kind of computer now , but the number is growing steadily . for example , i.m. booth , president of polaroid corp. , cambridge , mass. , never used a computer until last year . now he goes to the office on weekends to prepare presentations for the camera maker's directors using a personal computer that automatically obtains financial reports from the corporate mainframe . the special systems are catching on partly because researchers have started to believe that top executives' resistance to common computing functions , such as spreadsheets and word processing , often makes sense -- and so software firms are creating packages to fit their unique needs . " the most senior people in an organization literally think differently , " says mr. delong of harvard . " they spend a lot of time in a more abstract world . " robert scherer , chairman of georgia power co. , once learned -- and promptly forgot -- how to write programs . but now he uses his computer first thing every morning to check the status of the utility's nuclear power plants , which he formerly did more ploddingly by telephoning individual plant managers . clark miller , executive vice president of bank of boston corp. , says he doesn't need to learn how computers work , and " i'm not that intellectually curious . " but he learned to use a mouse to get graphs in seconds showing changes in the bank's exposure to third world debt . before he had the system , he used to order staffers to find three years of monthly reports and draw graphs , and he wouldn't see the results until the next day . presented right , computerized information can be much more usable than the briefing books most executives rely on . the computers can produce " exception reports , " highlighting any numbers that fall outside of specified boundaries -- for example , sales data for any division that are , say , above or below plan . special graphics let an executive see quickly whether operations are on target . hicks b. waldron , chairman of avon products inc. , asked that his system be equipped with a color - coded " flag " -- green for above plan , white for on target and red for below plan -- that can be triggered by various operating figures for the company and its divisions as they are displayed on the screen . through such devices , the computers let executives focus on trouble spots . lever brothers co.'s foods division , a big u.s. unit of unilever n.v. , recently bought an executive information system from london - based metapraxis ltd. thomas stephens , the unit's vice president , finance , says that in the past , " i was the only one in management who ruthlessly went through every page " of the company's inch - thick briefing books looking for trouble . now , if a number is off , executives can see so quickly and search out the cause using the computer to " drill down " through layers of divisional results . moreover , the computerized reports can be produced in about half the time of the old printouts . setting up systems is expensive . software ranges from to , hardware ( a pc , high - quality monitor , communications link and printer ) from to , but the price is often boosted by consulting work to get a program running and to find out what a company needs and what its executives want . once the systems are operating , special staffs are needed to update and refine them . mark wood , product manager for a new executive information system made by execucom systems corp. , austin , texas , says many companies spend to million putting in systems , including executives' time and programmers' work . often a company's information exists in several different data bases and must be painstakingly standardized , adding to startup costs . most executives aren't sure what information they can get . coupled with electronic mail , executive information systems can help flatten a company's organizational pyramid , letting top officers bypass layers of subordinates and berate or praise field managers directly . consequently , some managers fear giving chief executives low - level information . one systems analyst working on a system for american telephone & telegraph co. executives says : " we've had a lot of problems with divisions . they'll say , ' you can have certain figures , but not all of them. ' " at wyman - gordon co. , a worcester , mass. , forgings company , the controller was disgruntled to find other officers second - guessing him about financial ratios , says thomas lefort , a former employee who set up the system there . " the bottom line is , we're talking about power , " says mr. delong of harvard . " if the systems are worth anything , they're changing the way organizations work . " indeed , after xerox corp. president paul allaire began requiring five - page electronic memos for review meetings instead of - page briefing books , he described it as " a culture change disguised as a form . " daimler - benz ag , west germany's largest company , is resisting new enticements from the government to take over one of the country's biggest corporate headaches , state - controlled messerschmitt - boelkow blohm g.m.b.h . the reason for daimler - benz's reluctance is that it has enough problems of its own , without absorbing those of aerospace group mbb , through which west germany owns of airbus industrie , the money - draining european airline consortium . bonn has been trying for a year to persuade daimler - benz to absorb mbb . under the government's latest proposal , daimler - benz reportedly would take a stake and managerial control of mbb and its loss - making airbus subsidiary . the government also wants to restructure west germany's disjointed aerospace industry under daimler - benz . the offer , reported last week in the financial times of london , hasn't been confirmed by the government . it is designed to satisfy daimler - benz's reservations about potential foreign - exchange losses from airbus sales , which are denominated in dollars . late last year , the government said it would bankroll billion marks of the costs to develop the new airbus a - a series through , addressing another of daimler - benz's main concerns about airbus - related costs . bonn's continued assurances of subsidies and risk guarantees come despite potential for criticism from the u.s. , which frowns on europe's heavy subsidization of its commercial aircraft industry . despite the assurances , daimler - benz remains unswayed . edzard reuter , daimler - benz's chairman , has expressed interest in some mbb operations only if airbus is excluded . " we have always said that finding another solution for the liabilities of the airbus undertaking was a premise for our taking an interest in mbb , " mr. reuter said at a news conference in stuttgart last week . " but we are still waiting for the messenger from bonn . " a daimler - benz spokesman added later that " there has been no movement toward an agreement in which we would become involved in mbb or airbus . " an official government offer mightn't come for awhile . the additional cost guarantees are still being debated within the governing coalition itself , where the economics ministry's latest airbus initiatives have run into the reservations of finance minister gerhard stoltenberg . " daimler - benz still has enough trouble with the units they have without having to take on the added risk of mbb and airbus , even with some cost guarantees , " said thomas miskel , an auto analyst for crm securities g.m.b.h . " the whole aerospace industry has become a bottomless pit and the government's assurances apparently are not attractive enough for them . " daimler - benz became west germany's largest company with billion marks in sales after acquiring major technology companies starting in . these included electronics group aeg ag , and dornier g.m.b.h. , an aerospace concern . but efforts to integrate the units have been slow , generating doubts about mr. reuter's strategy of achieving technological " synergy " within the expanded group . moreover , the company's mercedes - benz cars have lost some of their luster , faced with challenges in the luxury car market from rivals such as bayerische motoren werke ag. daimler - benz plans to reduce production in its automotive business by passenger cars this year . daimler - benz has had headaches with dornier , considered too small to compete alone in aircraft markets . some analysts suggest that merging mbb and dornier ultimately could solve those problems . if daimler - benz eventually does agree to taking over mbb , it would become west germany's largest defense contractor . and with sales then totaling roughly billion marks , the daimler - benz group would account for nearly of west germany's gross national product . two former top executives of beech - nut nutrition corp. were each sentenced to a year and a day in prison and fined for their role in the sale of phony apple juice for infants . u.s. attorney andrew j. maloney said the sentence , delivered by judge thomas c. platt in federal court in brooklyn , shows the government will severely punish consumer fraud . " it's rather unusual for a corporate executive to do time for consumer fraud , " he said , but " this is the largest consumer fraud case ever . " in february , a federal jury convicted niels l. hoyvald , former president of the nestle s.a. unit , of counts of violating the federal food , drug and cosmetic act . john f. lavery , former vice president for manufacturing , was found guilty of counts in violation of the same act as well as counts of mail fraud and one count of conspiracy . both men plan to appeal their sentences . the bogus juice was discovered in during a state inspection of an upstate new york plant that was prompted by a tip - off from a beech - nut employee . the juice was sold between and . the case emerged after a retired new york city detective was hired in by a trade group to investigate possible adulteration in the apple juice industry . a year later , in , the beech - nut employee sent a memo alerting the food and drug administration to the problem . he signed it " johnny appleseed . " in a public apology yesterday , beech - nut's current president , richard c. theuer , acknowledged that his company " broke a sacred trust " but assured the public that beech - nut baby foods are now pure . still , the scandal continues to haunt the fort washington , pa. - based subsidiary of the swiss company . two weeks ago , it paid a fine to the state of new york for violating the agriculture and markets law . the defense logistics agency has suspended the company from all government contract work because of the juice case and is considering a permanent ban , a spokesman said . it also paid the government a million fine , more than six times the largest prior fine under the food , drug and cosmetic act . and at least two civil suits are still pending . with its share in the baby food market slipping from to , beech - nut's business has apparently been hurt by the scam , pushing the nation's leader , fremont , mich. - based gerber products co. , into an even stronger position . lee thompson , beech - nut's vice president , human resources , said the company has spent at least million since to improve quality control . he also said it has changed the baby food line and " upgraded all procedures . " he added : " the most damaging thing is that , although it happened over five years ago , the recent trial and notoriety have led some of the public to believe it's a current product . " mr. lavery and mr. hoyvald are the first two defendants to be tried and sentenced in the beech - nut prosecution . the trial of two suppliers is slated to begin in september in federal court in brooklyn . beech - nut and three other suppliers , who will soon be sentenced , have already pleaded guilty . movie companies are up in arms over a proposal to create a government - appointed national film commission with broad powers over the colorization and editing of certain films . under pressure from the directors guild of america , the house appropriations subcommittee on interior and related agencies has attached an amendment to an appropriations bill that would create a permanent government agency to establish a national film registry for movies that are " culturally , historically , or esthetically significant . " under the terms of the amendment , which goes before the full appropriations committee today , any film in the registry that is colorized -- converted to color from black and white by new computer techniques -- would be prohibited from being shown under the film's original title . and films in the proposed registry that are changed or edited in any other way after their initial release would have to be labeled to note such changes . jack valenti , president of the motion picture association of america , said such a registry would amount to a form of censorship , noting that there has never been any government involvement in classifying or rating movies . " this is something out of george orwell's , with big brother come to life , " mr. valenti said . the house amendment , sponsored by rep. robert j. mrazek ( d. , n.y. ) , says " certain motion pictures represent an enduring part of our national heritage " and " are being defaced by technologies that directly threaten the integrity of motion pictures and fundamentally alter the artistic vision of the artists who created these works . " chuck warn , a director's guild spokesman , said the amendment is " a continuation of our battle to find some way to protect motion pictures from mutilations such as colorization . we believe it is wrong and something must be done stop it . " mr. warn denied that censorship or first amendment rights are at issue . " it's the same principle used to protect buildings that are important to our national heritage , " he said . " pictures like ' citizen kane ' should be protected from economically motivated barbarism . " hollywood figures such as woody allen and actor james stewart have been active in the fight against colorization , and mr. stewart appeared at a news conference in washington yesterday to protest the colorization of such films as the frank capra classic , " it's a wonderful life , " in which he starred . mr. valenti of the motion picture association said his group is also concerned about the effect the proposed film commission would have on the ability of broadcasters to edit films to make them suitable for television , and on the adoption of new technologies . colorizers won't suffer even if the mrazek amendment becomes law , said buddy young , president of color systems technology inc. in marina del rey , calif . " the amount of black and white films any reasonable person could consider classics is really small , " he said , adding , " the colorization industry still has a vast universe of films to draw on . " mr. young , whose main competitor is toronto - based colorization inc. , still opposes the law . he said preservationists play down the fact that " we never touch the original material , " so that the black - and - white version always remains intact . the u.s. merchandise trade deficit in april fell to its lowest level in more than three years , providing further evidence that the devalued dollar finally is helping to turn around the nation's trade troubles . primarily because of a steep decline in imports , the trade gap narrowed to a seasonally adjusted billion from billion in march and billion in february , the commerce department said . the april deficit was the smallest since the billion gap reported for december . financial markets , economists and reagan administration officials reacted enthusiastically to the report . " our economy has undergone a significant turnaround in its trade flows , " said clayton yeutter , the u.s. trade representative . the u.s. trade deficit has been shrinking gradually since last fall , primarily because strong growth in u.s. exports has outpaced growth in imports . in april , however , the trade gap narrowed even though exports were down . " we're extremely gratified that so much improvement came in on the import side , " said lawrence krohn , an economist at shearson lehman hutton inc. in new york . " this could be a beginning of the turnaround of imports that we've been looking for for so long . " " i expect imports to continue to rise , but i expect exports to rise faster , " he said . total imports were billion , down from billion . imports of almost every kind declined , although imports of oil and automobiles both rose . economists discounted the significance of the decline in exports . " it looks bad only in comparison to the unsustainable march level , " mr. krohn said . exports were billion in april , second only to the record billion reported for march . during the first four months of the year , exports ran ahead of the like months of , while imports were up . the trade deficit for the first four months of the year was billion , compared with billion in and billion in . " the trade deficit in dollar terms is contracting at a moderate pace , " said federal reserve chairman alan greenspan . " i expect this to continue , though the month - to - month changes probably will be erratic . " with the april report , the commerce department resumed a practice , abandoned in , of adjusting the trade figures for seasonal fluctuations . before seasonal adjustments , the deficit was billion in april compared with billion in march and billion in february . the april figure was far better than most wall street analysts had been predicting . the department isn't seasonally adjusting its figures for trade with other countries . the u.s. deficit with canada , europe and japan narrowed in april . the deficit with the newly industrialized countries of asia -- singapore , hong kong , taiwan and south korea -- widened . the commerce department said that taiwan bought million in gold from the u.s. in april , as it did in march , in an apparent attempt to make its surplus with the u.s. look smaller than it would otherwise . in the past year , the u.s. has cut its deficit with western europe by nearly two thirds by both exporting more and importing less . the u.s. trade deficit with japan and other asian countries , however , has declined much more slowly . economists suggested that the april drop in imports reflects several factors , including higher prices for foreign goods . " we built up pretty big inventories in the first part of this year , " he said . " i think people who are stuck with these inventories cut down on imports to bring them into line . " clothing imports , for instance , dropped in april . the merchandise trade deficit doesn't include trade in services . the figures aren't adjusted for inflation . tamarra l. brown contributed to this article . the food and drug administration said it will ban as of july the use of four color additives commonly used in cosmetics and drugs . the additives have been proved to cause cancer in animals . the agency will publish notices in the federal register withdrawing its approval of red nos. , , and and orange no. . the decision , a victory for the public citizen health research group , a consumer advocacy organization founded by ralph nader , was reflected in an agency document filed in a federal court in philadelphia . public citizen began litigation over color additives years ago . after july , according to court documents , no additional batches of the dyes will be certified for use , and it will be illegal to ship the dyes in interstate commerce . however , the agency said it will allow a grace period for cosmetic and drug products to which the dyes were added before the cutoff date . william schultz , attorney for public citizen , said it is the first time since that the fda has banned a color additive . mr. hutt said the trade group fought the ban because it maintained that the risk posed to humans exposed to the dyes was extremely small , and because " all colors are important to the industry and these had certain unique characteristics that made them particularly useful . " the four dyes are used in such products as lipstick and cough syrup , and in coatings for over - the - counter and prescription medications . the fda's decision to ban the dyes caps years of litigation dating to , when public citizen sued the government to require the agency to evaluate the safety of color additives and to ban those proven through clinical studies to cause cancer in animals . public citizen maintained that a federal law bars the use of any color additive found to cause cancer in animals or humans . the group lost two early lawsuits . in , public citizen petitioned the fda to ban dyes , including the four now named , that were " definite or probable animal carcinogens " according to clinical studies . the four dyes had been cleared for industry use by the government . in april , the supreme court refused to hear an appeal in the case brought by the fda and the cosmetics industry , leading the fda and public citizen to reach agreement on a fourth lawsuit in federal court in philadelphia . of the remaining dyes among the public citizen sought to ban , three have been permanently approved after studies demonstrated no cancer risk to humans , and three are still under review . u.s. new - vehicle sales in may were stronger than expected , adding a positive note to a series of mixed economic indicators . american consumers bought more cars and light trucks than they did in may , and sales year - to - date are up by almost the same amount . the annual rate , seasonally adjusted , for domestic and imported car sales last month was million , according to a u.s. commerce department formula . that is down from the first four months of the year , but higher than the million pace for the same month last year . for all of , consumers bought million cars . " it suggests to us that the consumer sector is not dead , " said donald straszheim , chief economist for merrill lynch economics inc . " it isn't even dying . " robert l. rewey , ford motor co.'s vice president for sales operations , said in a statement , " consumers are showing a greater appreciation of the product and marketing programs than did the forecasters . " the car - sales report friday followed the release last week of several other leading indicators . together , they cloud the economic crystal ball . the commerce department reported that april consumer spending was flat . the nation's biggest retailers reported tiny sales gains in may . " car sales are a strong positive factor in the whole picture , " said lea tyler , a senior economist at wefa group inc . " but you have to be careful to balance out the positive and the negative . " the may auto sales figures also provided some good news for the nation's trade picture . domestic - vehicle sales took of the market , up from a year ago . the figures year - to - date mirror that trend . the decline of the dollar has hurt sales of imports ; of the two dozen foreign - based auto companies selling here , only mazda motor co. kept or gained total vehicle share . most of its major japanese competitors suffered substantial drops in sales of light - duty trucks , which in addition to the rising yen face a tariff . each of the big three u.s. auto makers saw their car market share rise in may . but , year - to - date , general motors corp.'s presence is still depressed . the no. auto maker had of the new - car market in the first five months of , down from in . the auto maker's sporty pontiac division passed the lagging oldsmobile division in may sales , to finish second behind chevrolet . pontiac made up of gm's car sales , compared with for oldsmobile , which has traditionally been gm's no. division . the strong may auto sales were helped by a robust final days . sales of north american - made cars jumped to in the may - period , up from the sold a year earlier . that came to a seasonally adjusted annual rate of million cars under the commerce department formula , up sharply from the pace of slightly under seven million set in the year - ago period . it also marked a solid rebound from the million rate in the middle of the month . mid - may sales were depressed because the major auto makers trimmed back their rebates . sales of north american - made light - duty trucks in late may jumped to , up from a year earlier . combined with relatively modest production plans , the may sales helped drain inventories for the big three to a healthy level . gm and chrysler corp.'s supply dropped to about days from around days , the analyst added . a supply of - days is considered normal . the nominations are in for the joan claybrook memorial silly regulations award . the pickings during the reagan administration for a match to jimmy carter's top antimarket regulator were admittedly slim , but we can announce an eminently qualified winner . david ruder , come on down ! mr. ruder has been chairman of the securities and exchange commission for less than a year , but he already has a long list of regulatory excesses to his credit . he is best known for his willingness to shut down the new york stock exchange on october . he's been the odd man out when reagan officials testify to congress about new post - crash regulations . mr. ruder has such a zeal to regulate that two of his commissioners are ready to roll him off the gangplank . commissioner joseph grundfest left mr. ruder sputtering at a recent agency meeting when he accused him of " regulatory imperialism . " he was referring especially to mr. ruder's turf battle over stock index futures with free - marketeer wendy gramm of the commodity futures trading commission . commissioner edward fleischman dismissed mr. ruder's regulatory takeover bid as " folly . " this past week , the agency proposed to prohibit the established practice of brokers and their customers signing agreements that any dispute between them must go to binding arbitration instead of to the federal courts . at a time when everyone else in america is trying to damp the fires of the litigation explosion , mr. ruder wants to get a new one going . arbitration became the industry custom partly to protect the informality of being able to call a broker with an order without exchanging teams of lawyers and notaries . the system has worked well . arbitration is cheaper than litigation , which would often be more costly than the customer's claim is worth . most of the disputes are over improper execution of orders or churning , turning over portfolios just to gain commissions . nearly half the new york stock exchange cases are settled before they go to arbitration . when they do , arbitrators rule for the customers half the time . some smart lawyers decided that arbitration was working too well as an alternative to litigation . for one thing , arbitration deprived them of contingency - fee access to some of the deepest pockets around . they demanded punitive damages and lawyers' fees . it got to the point that in recent years nearly half of all the cases based on rico , the treble - damages law aimed at organized crime , were instead filed against brokers . then the supreme court this past summer spoiled all the fun by rejecting the hundreds of these lawsuits by upholding the arbitration requirement . an agreement to arbitrate is an agreement , it said , a deal is a deal . thus rebuffed , the trial lawyers bent the ears of democratic congressmen john dingell and edward markey . they began to make squishy noises about " unfair bargaining position , " " contracts of adhesion , " and other chestnuts invoked whenever someone wants to wiggle out of an agreement . the sec strategy apparently is to beat congress to the regulatory punch , not protect markets . mr. ruder somehow seems to think that the measure of a regulatory agency is how much it can regulate . perhaps no one explained it to mr. ruder when he was appointed , but the reagan revolution teaches the opposite lesson . walker roberts is a victim of interestrate shock . so are henry copeland and lynda waters . with the prime rate rising , their adjustable - rate mortgage payments are going up , too . and , for them , that's worrisome . mr. roberts , the editor of florida business -- tampa bay , stopped ogling a sport coat and delayed buying parts for his steam - powered model boats . mr. copeland , a new york financial analyst , expects to cut back on dining out and theatergoing . mrs. waters , a st. petersburg , fla. , hotel official , canceled plans to buy an acura integra and furnish two rooms recently added to her house . interest - rate risk once mainly threatened businesses ; now , consumers face a similar danger as a surge in variable - rate debt increasingly -- and quickly -- exposes them to rising rates . home - equity loans , typically pegged to the prime rate and adjusted monthly , have quadrupled since to about billion , largely because they're still tax - deductible . homeowners were once expected to consolidate other forms of debt into these loans , but smr research corp. , a consulting firm , estimates that of home - equity loans represent new borrowings . typically , the rates are adjusted annually , and many of these mortgages also have caps limiting the increase in any one year - more protection than that offered by the caps on most home - equity loans . and consumers now find rates fluctuating on personal loans and credit cards . the federal reserve estimates that of the billion of consumer installment debt is floating . " it's a time bomb because the rates are going to go up , " says andrew j. mcgehee of consumer credit counseling service of south florida inc . variable - rate consumer debt is clearly an economic wild card . a bit of consumer restraint might be desirable now , but too much could help spark a recession if rates keep rising and consumer spending drops along with discretionary income . and consumers already being hit by rising payments on their variable - rate debt are likely to be especially cautious about taking on more such obligations . for the first time , month - to - month swings in interest rates could grind up some consumers' budgets . an increase in the prime rate to just would set off a ripple effect that could hurt consumers more than the base lending rate of , says paul getman , an economist at wefa group in bala cynwyd , pa . people borrowing heavily at variable rates take a big gamble . " you've lost control over your ability to manage your money , " says leo j. shapiro , a chicago consultant who tracks consumer trends . " if interest rates go up , you suddenly have less money than you anticipated . " so far , consumers have been winning their gamble , taking the risk of rising rates and getting , in return , a lower rate than they would on fixed - rate loans . still far below its peak , the prime rate has risen only half a percentage point in recent months to . but some economists see it up to about in a year and worry how much consumer spending may suffer . no one knows what will happen , because variable - rate consumer loans are so new . as they were mushrooming during the past seven years , the prime rate has generally fallen or remained steady . " people are in for a shock if rates rise to around , " says william f. schumann , the president of insured credit services inc. , an old republican international corp. unit that insures home - equity loans . " there will be bankruptcies , and delinquencies will increase . " david a. wyss , chief financial economist at data resources inc. in lexington , mass. , estimates the annual interest bill for all types of variable - rate consumer loans will rise almost billion . however , that is dwarfed by the trillion that consumers spend annually . but rates are rising at a bad time . consumers have been borrowing at a dizzying pace , with their installment debt alone more than twice the level . credit junkies on shoestring budgets will feel any pinch the most , of course . many now deep in hock are baby - boomers still in their peak spending years and being lured into debt by a marketing blitz by lenders , especially to promote home - equity loans . the borrowers fueling the recent consumer - spending binge are people unlikely to benefit from rising interest income on investments such as certificates of deposit . " for someone who is on the edge now and facing a layoff , ( the prime rate ) doesn't have to go up very much , " says sandra shaber , an economist at the futures group in washington . in beijing's version of silicon valley , seven former government engineers rented a small office four years ago and on in borrowed money set out to create china's version of international business machines corp . they haven't reached that goal yet , but the company they founded , beijing stone group co. , has emerged as the biggest corporate success story in the communist government's decade - long flirtation with capitalism . since its formation , stone has tripled its business volume each year , growing into a diversified concern with more than employees nationwide , group sales of million in electronics equipment last year and after - tax earnings of million . in its brochures , patterned after glossy western annual reports , executives herald the arrival of a chinese " corporate culture . " stone , the brochures boast , " is creating a new image -- we are the reformer . " though its profits and revenues are small by western standards , they are very impressive by china's . and what is most remarkable about stone is that it is chinese - run . top executives all are refugees from china's bureaucratic and underfinanced state research sector . indeed , it is stone , not mitsui , that provides the technical know - how for the jointly produced english - chinese electronic typewriter that is the stone group's biggest money maker . the machine , called the stone ms - , has a single keyboard whose keys produce roman letters on one setting and chinese characters on another . wan runnan , the group's polished , - year - old president , frequently remarks that stone's goal is to become " the ibm of china . " that may be wildly optimistic , but after four years of phenomenal growth , few are likely to dismiss his ambition lightly . " stone is china's top electronics company , " says xi jianmin , a beijing representative for mitsui . " it has quickly learned to follow international business practices and has been able to avoid a lot of the red tape that ensnarls other chinese companies . " for mr. wan , it wasn't easy making the plunge into entrepreneurship . ever since the communist takeover of , many chinese have looked down upon private businessmen , once reviled officially as " the stinking tails of capitalism . " " i realized a lot of china's technical achievements weren't being brought to the market , ' says mr. wan . " i felt it was important to set up an enterprise that could do that . " in , he talked six colleagues who held similar technical - research positions to take the plunge with him into the private sector . with the borrowed , they set up a small office along zhongguancun , a half - mile stretch of highway near several beijing universities that is home to some chinese high - tech companies . locals call the area " silicon street , " though most of the companies only sell imported computer parts and do little research . stone , an english transliteration of the chinese name that means " moving in all directions , " soon broke from the pack . mitsui approached the company just after its inception and asked for help in designing a version of the brother printer suitable for the chinese market . mitsui has a license to export the device , which is made by brother industries ltd. of japan , to china . impressed , mitsui contracted stone to rebuild the imported printers . business boomed . the group sold so many printers so quickly that it repaid a new bank loan days after it took it out . since then , the company has developed a number of electronic products on its own , including several varieties of printers and word processors . it has also reinforced its links with mitsui ; last year , the two companies set up a million joint venture to produce and market the ms - typewriters . mitsui injected cash equal to of the investment and is supplying the machine's hardware , which is imported and assembled at stone's factory in beijing . stone's engineers developed the hardware design and the software for the machine , which retails for about . with its prestige growing , stone has been able to attract many of beijing's brightest technicians . when it recently placed an advertisement in a local newspaper for several engineering jobs , it was flooded with applicants . stone offers no housing and fewer benefits than state - run organizations . but salaries are normally higher , and the company contributes of profits toward bonuses . " i want our employees to have a sense of the risk of the business world , " says mr. wan . " they have to learn that they must work hard to be successful . " like entrepreneurs in the west , stone's managers are finding that rapid growth can lead to problems . some of the group's subsidiaries have been making deals without getting approval from the head office . and , because it sells most of its products for chinese renminbi , which can't be converted , it sometimes has trouble obtaining hard currency to pay for imports . despite such problems , stone is optimistic about growth . mr. wan expects sales to grow this year , to about million . the company hopes to expand its branch network and beef up the sales and service offices it opened in hong kong and japan last year , and is considering setting up an office in california to expand into the u.s. market for chinese - language word processors . it exported a few hundred machines to the u.s. last year and hopes to sell several thousand units this year . his earnings from his shares in the company would be even higher , but chinese law strictly limits annual dividend income . moreover , he and other executives have put a cap on their earnings to avoid provoking undue jealousy in a society that is still gradually emerging from the egalitarianism of mao's era . to some employees , that egalitarianism acted as a constraint on ambition . zou qingyi , , joined stone last spring after working for more than years as an engineer at the state - run capital steelworks in beijing and has played a large part in designing the electronic typewriter . this year , he was promoted to director of engineering . at his former job , mr. zou says , " i wasn't allowed to use my brain . at stone , if you are interested in something , you can do it . " 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 : . the base rate on corporate loans at large u.s. money center commercial banks . discount rate : . the charge on loans to depository institutions by the new york federal reserve bank . call money : / to / . the charge on loans to brokers on stock exchange collateral . commercial paper placed directly by general motors acceptance corp. : to days ; to days ; to days ; to days . commercial paper : high - grade unsecured notes sold through dealers by major corporations in multiples of : days ; days ; days . certificates of deposit : one month ; two months ; three months ; six months ; 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 million and more . the minimum unit is . typical rates in the secondary market : one month ; three months ; six months . london late eurodollars : / to / one month ; / to / two months ; / to / three months ; / to / four months ; / to / five months ; / to / six months . london interbank offered rates ( libor ) : / one month ; / three months ; / six months ; / one year . foreign prime rates : canada ; germany ; japan ; switzerland ; britain . these rate indications aren't directly comparable ; lending practices vary widely by location . source : morgan guaranty trust co . treasury bills : results of the monday , may , , auction of short - term u.s. government bills , sold at a discount from face value in units of to million : , weeks ; , weeks . federal home loan mortgage corp. ( freddie mac ) : posted yields on - year mortgage commitments for delivery within days. , standard conventional fixed - rate mortgages ; , rate capped one - year adjustable rate mortgages . source : telerate systems inc . federal national mortgage association ( fannie mae ) : posted yields on year mortgage commitments for delivery within days ( priced at par ) . , standard conventional fixed rate - mortgages ; , / rate capped one - year adjustable rate mortgages . source : telerate systems inc . merrill lynch ready assets trust : . annualized average rate of return after expenses for the past days ; not a forecast of future returns . petrie stores corp. said it plans to redeem its debentures with eight million , or , of the toys " r " us inc. shares it owns . the current market value of the stake is million . if all of the debt issue -- subordinated exchangeable debentures due -- is redeemed , petrie's stake in toys " r " us will be cut to of the common shares outstanding . petrie , a secaucus , n.j. , women's specialty - store retailer , currently holds , down from after it redeemed a similar / debenture for million shares of toys " r " us . the rochelle park , n.j. , discount toy retailer's results have been helping those of petrie . this latest swap would put petrie's holding under the threshold that requires the investor - company to consolidate its share of the affiliate's results on its balance sheet . in new york stock exchange composite trading yesterday , toys " r " us closed at a share , down cents , while petrie shares closed at , up cents . for its first quarter ended april , petrie's profit rose to million , or cents a share , from million , or cents a share , a year earlier . year - ago equity earnings were million . sales fell to million from million . petrie cited continued sluggishness throughout the fashion retailing industry . analysts have blamed the slowness on look - alike styling that in turn has led to heavy discounting . toys " r " us profit in the first quarter ended may rose to million , or cents a share , from million , or cents a share . sales grew to million from million . redeeming the debenture would result in a fourth - quarter saving for petrie of million in interest expense . officials at the companies couldn't be reached for comment . there are days when the sprawling over - the - counter stock market seems to get smaller . yesterday , some traders said , provided an example of how the market's recent lack of action and investor interest is making traders band together even more than usual when there's a hot rumor . rumors caused traders to gang up on two stocks in particular yesterday , service merchandise and redken laboratories , both of which rose sharply on about times their average daily trading activity . " i think there's more people honing in on fewer situations , " said tony cecin , head otc trader at piper , jaffray & hopwood , a large regional brokerage firm in minneapolis . " you see more people involved in fewer names because that's where the action is . you see them buying the issues that seem to be the subject of speculation . " some minimal bargain hunting by institutions and individual investors also gave the otc market some strength , traders said . overall , the nasdaq composite index of otc securities yesterday rose point to , its second - consecutive minuscule advance after five sessions of declines . nasdaq's biggest industrial stocks , however , weakened near the close ; the nasdaq index of the largest industrials closed at , down point , a decline . yesterday million shares traded on nasdaq , with million rising and million falling . winning issues narrowly edged losers , to . service merchandise finished at / , up , on nearly million shares , making it nasdaq's most - active issue . traders were speculating about a possible takeover bid for the nashville , tenn. , catalog - showroom chain , which has a market value of about million . a company spokesman wasn't available for comment . redken laboratories finished at , up / . traders told dow jones professional investor report that favorable earnings for the third quarter ended april are expected to be announced any day . officials at the canoga park , calif. , company , which develops and sells beauty products , weren't available to comment yesterday afternoon . arthur pacheco , who runs the otc trading department at cantor , fitzgerald & co. in new york -- which traded slightly more than shares in service merchandise yesterday -- agreed that nasdaq volatility has been increasing on some recent days . " i think probably the reactions are a little bit exaggerated on days like this . volume is contracting across the board , and also liquidity is contracting so the reactions are a little bit more violent , " mr. pacheco said . the north hollywood , calif. , maker of women's shoes and clothes , which has a market value of about million , received a - a - share buy - out offer from a company formed by deutschman & co. , a los angeles closely held investment company . cherokee's chief operating officer and other senior managers are equity partners in the deutschman bid . minstar rose / to / , though off its intraday high of / . the minneapolis recreational products concern agreed to go private at a share , a share more than chairman irwin jacobs had offered last month . shares of r.p. scherer rose again in the wake of monday's revelation that two of the company's largest shareholders want to put the troy , mich. , pharmaceutical concern up for sale . r.p. scherer closed at / , up , on volume of shares . bear automotive service equipment rose / to / . spx corp. agreed to buy bear for a share . shares in cadbury schweppes advanced / to / . general cinema , which has said it may attempt a takeover of the united kingdom candy maker , increased its stake to from . the trade bill was vetoed by reagan , effectively dooming the legislation . the house immediately voted to override , but the senate isn't likely to follow . though reagan said he is willing to sign a modified bill , democrats plan to use the veto as a campaign issue , making the prospect for new legislation uncertain . the free - trade accord between the u.s. and canada faces major obstacles in the canadian parliament . but both countries hope to pass legislation before the end of the summer . santa fe shareholders approved a proposal to rescind the company's anti - takeover plan , advancing what could become the first successful challenge of a " poison pill " defense . pillsbury is expected to sell its godfather's pizza chain shortly to a group led by senior management , perhaps for million . but the food giant is facing continued problems with its other restaurant operations . sec chairman ruder and fed chairman greenspan offered sharply different views to the senate banking panel on the health of the markets and the need for government action . slow trading in the markets has prompted kidder peabody to consider shorter work weeks for traders . the heavy selling of the stock can drive down its price . bank of new york won a - day extension to pursue its bid for irving bank . but the fed indicated it wants to review the financial soundness of any merger before bank of new york completes its billion offer . mexico has begun work on less ambitious debt - reduction proposals following its disappointing debt - for - bonds swap recently . the proposals may be presented later this year . at&t's new chairman said the company may curtail purchases of olivetti personal computers . he also indicated at&t plans to take direct control of foreign operations . durable goods orders rose in april , reflecting a big increase in bookings for military communications equipment . the moderate gain follows a revised rise in march . u.s. car sales fell in mid - may . analysts and car dealers attributed the decline to a reduction in sales - incentive programs . cbs will pay million for the broadcast rights to the winter olympics , a financially risky move . montedison and eni agreed tentatively to combine some operations , forming what could be the world's seventh biggest chemical concern . chips & technologies said ibm won't require it to take out licenses for chips it makes for ibm clones . stocks : volume shares . dow jones industrials , up ; transportation , up ; utilities , up . bonds : shearson lehman treasury index , up . commodities : dow jones futures index , up ; spot index , off . dollar : yen , off ; marks , up . shares in some smaller over - the - counter stocks re - emerged as winners yesterday , outperforming the sagging bigger otc stocks and blue chips . the buying action in small stocks charged up nasdaq a bit on a day when the new york stock exchange suffered its slowest session of the year . nasdaq volume was greater than big board turnover yesterday . overall on nasdaq , the composite index of otc stocks fell for the fifth straight session , down to . that's an almost three - month low . and on a day when the dow jones industrial average fell , the nasdaq index of the largest otc industrials slipped twice as much -- down to , a fall . nasdaq giants that led the fall included ashton - tate , down / to / ; mci communications , down / to / ; and apple computer , down / to . yesterday's nasdaq volume of million -- significantly higher than recent dull mondays -- was boosted by million shares that traded off of nasdaq's national market system . non - nms securities , generally smaller and more lightly traded than nms securities , account for about a third of all nasdaq stocks . this compares with the million that rose on nasdaq overall , and the million that fell . tiny non - nms stocks tend to make sharp percentage jumps when they move at all . among those tiny stocks that gained big yesterday was learning annex , up / to / bid , a jump to lead all nasdaq issues . the fort lee , n.j. , company , with a market value of million , markets vocational and personal - development courses . also rising was coachman inc. , up / to / bid , or ; the small oklahoma company develops and operates lodging properties and has a market value of about million . and shares in diversified health cos. , a home health - care company formerly called doctor's house calls inc. and with a market value of million , rose / to bid , a increase . among the larger nasdaq stocks , the biggest loser , by far , was coated sales . stock in the laurence harbor , n.j. , specialty textile maker plunged / to , a fall , after its auditor resigned and the company delayed issuing its audited financial statements for fiscal . almost two million shares changed hands , the third - highest on nasdaq and times the stock's average daily turnover . diamond crystal salt lost to / . international dairy queen class a jumped / to . mutual - fund manager albert nicholas praised the stock as his top pick in a barron's article over the weekend . mr. nicholas's funds together own about of the minneapolis - based food chain's common shares outstanding . he forecasts earnings of a share this year , compared with in . -- envirodyne industries rose / to / in heavy trading . the chicago food - packaging company said it is mulling a merger or sale to enhance shareholder value . envirodyne , which has a market value of about million , said it retained morgan stanley & co. as its adviser . -- central jersey savings & loan association soared to on a - a - share takeover offer from colonial savings bank of roselle park , n.j. , a unit of codelco inc. central jersey rejected the offer , made in an april letter . -- r.p. scherer rose / to / . two members of the scherer family , including the company's largest shareholder , said they are proposing that the company be sold in light of its record level of sales and earnings . -- hyponex rose / to / , after trading as high as / yesterday . the atlanta lawn and garden products maker said it is in talks to sell itself for about a share . meantime , the company postponed its annual meeting and delayed the mailing of its proxy statement and annual report . in his april letter to the editor , amory b. lovins makes his familiar argument that u.s. imports of oil could be drastically reduced -- or even eliminated -- through extensive conservation measures . he criticizes a " rollback " in fuel - efficiency standards for light vehicles and calls for making buildings more " heat - tight . " then he claims : " the fuel - efficiency potential would save about three - fourths of all u.s. oil use . promptly capturing most of this potential could shrink or phase out imports. . . . " the facts simply don't support such claims . oil imports in march averaged million barrels a day while automobile and truck fuel consumption in the u.s. totaled about million barrels a day . saving enough oil to eliminate imports would require more than an reduction in fuel use by all cars and trucks in america -- a technical impossibility unless virtually everyone stopped driving . even if every one of the nearly million cars in the u.s. ( which average about miles per gallon ) could be replaced immediately with a mile - per - gallon auto , total fuel savings would be less than half of u.s. oil imports . buildings use only about one million barrels of oil a day -- about of u.s. oil imports . weatherizing homes and driving more fuel - efficient cars are good ways to save energy . americans , by their own choice , have made a lot of progress on saving energy . but it's wrong to assume we can somehow " save our way out " without lifting a finger to produce our own resources . what is necessary is to both save energy and produce it , and not rely on only the one , or the other , to do the job alone . high - school dropout , vietnam veteran , harvard business school misfit , real - estate speculator , multimillionaire raider and now captain of industry -- personifies the rags - to - riches potential in the takeover boom that has remade corporate america in the 's . stories like his make legend : armed only with wits , energy , a little money and a lot of courage to confront entrenched management , the hero strides onto the corporate battleground and earns a huge fortune taking over , or merely threatening to take over , the decrepit bastions of the industrial establishment . but a close look at the - year - old mr. bilzerian's extraordinary career suggests at least one other ingredient in the epic : he has ridden roughshod over the securities laws of the u.s . mr. bilzerian , the chairman of singer co. , is currently the target of major securities and exchange commission and federal grandjury investigations growing out of the ivan f. boesky insider - trading scandal . just last week , the sec filed a suit against edward j. debartolo sr. , the ohio shopping - center magnate , that revealed new details of alleged securities - law violations by mr. bilzerian . the details disclose an even broader pattern of questionable conduct than anything that has heretofore emerged . for all his derring - do , the details of his tactics amount to a catalog of possible securities crimes : insider trading , " parking " of stock in accounts to conceal its true ownership , false public disclosure documents filed with the sec , aiding and abetting the keeping of false books and records , conspiracy to violate the securities laws , and tax fraud . while some of these are sometimes dismissed as technical violations , in the hands of mr. bilzerian these practices became weapons to force large corporations into unwanted takeovers or liquidations that gained him hundreds of millions of dollars . " i'd be shocked if we've done anything wrong , " mr. bilzerian said last year , when this newspaper first reported he was under investigation . now , however , he has declined repeated requests for interviews concerning the allegations . through his lawyers , arthur f. matthews and ted levine , partners in the washington , d.c. , firm of wilmer , cutler & pickering , he has also declined comment on this article . " he told me he's being unjustly attacked , " says craig hall , the texas real - estate syndicator and a major bilzerian backer . " he said these leaks in the press are totally inaccurate and he'll fight tooth and nail if there are ever any charges . " mr. hall was invited to take part in mr. bilzerian's first corporate raid , in . so far as is known , it involved no securities - law shenanigans . it was also a flop . at the time , mr. bilzerian , by his own retrospective account , was already a rich man . he came from a middle - class massachusetts family and now lives mainly in tampa . he seemed out of place at harvard business school , where his blue jeans and gold chain set him apart , and a florida radio - station venture he later was involved with went bankrupt . but he claimed to have amassed more than million from real estate between and and additional sums in stock - market speculation beginning around . his father - in - law , harry steffen , was a wealthy minneapolis real - estate man . but the sources of mr. bilzerian's putative real - estate riches have defied outsiders' attempts to identify . the target of his first attempted raid was syntex corp. , the california drug maker . it was a feeble effort . mr. bilzerian never even managed to bring the raid to the point where he could make a credible bid for syntex shares . despite the wealth he asserted , he tried recruiting rich real - estate investors , such as mr. hall , for the raid . other real - estate investors later were important allies : arthur cohen of new york ; bill and earl mack of new jersey ; and , most important of all , mr. debartolo and his son , edward jr. , the shopping - center builders . he also approached samuel belzberg , of the powerful belzberg family of canada and an old hand at corporate raiding . others say mr. bilzerian , who often voiced contempt for the eastern establishment he encountered at harvard , felt comfortable with these wealthy veterans of the rough - and - tumble real - estate world . a low - level syntex official met once with mr. bilzerian . syntex says he identified himself simply as a shareholder , making no allusion to wealthy backers or an impending takeover . the experience taught him a lesson . as he talked up syntex with potential investors , its price soared . people close to him at the time say he was infuriated . the fast run - up could have raised the cost of a takeover bid and eroded the bidder's gains . mr. bilzerian wouldn't repeat the mistake . in raids to come , he made sure that the true extent of his involvement remained secret , to the sec and others . in april , h.h. robertson co. , a pittsburgh construction company , suddenly became an open target of mr. bilzerian . he said he would pay million for the company and threatened a hostile tender offer . mr. bilzerian had secretly purchased and parked robertson shares with jefferies & co. , the los angeles securities firm . mr. bilzerian's surprise bid looked as if it might rescue the belzbergs , who were mired with more than of robertson's stock and stood to lose millions of dollars as conditions worsened in the international construction business and the stock price dropped . a belzberg proxy fight for control of the company had stalled . and robertson wouldn't buy back the belzberg stake at a " greenmail " price above market that suited the belzbergs . the bilzerian bid came as no surprise to the belzbergs , according to several people familiar with the robertson situation . one former belzberg employee says that " ever since syntex , bilzerian was badgering us to get into the takeover game . " the belzbergs encouraged him in robertson , the former employee says , hoping mr. bilzerian's bid would put robertson in play and flush out a white knight . another person involved in the matter adds that mr. bilzerian called the belzbergs in advance of the bid , saying that he was " waiting in the wings with a bid . " despite mr. bilzerian's offer and threats , nothing happened . mr. bilzerian never followed through with a formal bid . mr. bilzerian didn't file any papers with the sec on robertson , and there isn't any public record that he formally withdrew his offer . this may simply reflect mr. bilzerian's inexperience in takeovers ; it also casts doubt on how serious mr. bilzerian's offer was . in any event , robertson stock continued to decline in price . no white knight appeared . the belzbergs broke off their dealings with mr. bilzerian , refusing to back a bilzerian plan to exchange their shares for high - yielding junk bonds and refusing to buy out mr. bilzerian's robertson stake . mr. bilzerian was furious , alleging the belzbergs had reneged on commitments they had given him , and he stormed out of a meeting with a belzberg official after calling him by an obscene name , the official says . the rupture never healed . the aspiring raider " felt totally used " by the belzbergs , says a friend of mr. bilzerian . mark belzberg says the family " had absolutely no arrangements whatsoever " with mr. bilzerian , adding that they barely know him . not only was mr. bilzerian's ego bruised , but he was stuck with the robertson stock he had parked with jefferies . when the days passed and no bid for robertson had emerged , mr. bilzerian reneged on the agreement to buy back the stock - sticking jefferies with a substantial loss on the position , say people familiar with the transaction . loud arguments erupted between mr. bilzerian and boyd l. jefferies , the chairman of the firm , as they had with the belzberg officials. ( such disputes over the terms of mr. bilzerian's agreements seem to have been commonplace throughout his career. ) . jefferies finally sold the robertson shares at a loss . a colleague says mr. jefferies was " absolutely nuts " over the loss . also distressed was john m. lefrere , a new york money manager and an investor in robertson , who had introduced mr. bilzerian to jefferies . mr. lefrere felt partly responsible for the loss . to ease matters , he agreed to steer enough commission business to jefferies to make it up . " we felt the broker really got shafted , " says mr. lefrere . " we tried to help out . " he put in a personal account at jefferies as a guarantee that the loss would eventually be made up . mr. jefferies's lawyer , peter morrison , declines to comment . in july , just months after the robertson fiasco , mr. bilzerian launched what would become his first huge takeover speculation , a million bid for cluett , peabody & co. , the apparel maker . cluett peabody , earlier targeted by the belzbergs , had paid them greenmail to end the threat . sensing an easy victim , mr. bilzerian decided to attack . he and a partner disclosed that they owned of the company's stock . mr. hall , the texas developer , also showed up at the head of another group with . this time , mr. bilzerian actually made a formal tender offer for cluett peabody and filed disclosure documents with the sec . the disclosures , however , revealed nothing of important financial links between mr. bilzerian and the elder mr. debartolo . mr. debartolo secretly helped finance the cluett peabody offer , and he and mr. bilzerian consulted on it . it is the subject of several typewritten memos that were either addresssed to or drafted by mr. debartolo . whether this constituted insider trading is under investigation by the sec . on this and other matters mr. debartolo , through his lawyers , declines comment . documents indicate that mr. debartolo also lent mr. bilzerian millions of dollars for the purchase of cluett peabody shares . at one point , mr. bilzerian met with an official of mr. debartolo's family - owned company asking for million . handwritten notes suggest that in return for the loans , mr. bilzerian and mr. debartolo entered into a secret profit - sharing agreement involving their cluett peabody stock . securities law requires the disclosure of takeover financing such as that apparently provided by mr. debartolo , and any profit - sharing arrangements . takeover specialists observe that mr. bilzerian would have seemed a much weaker threat to cluett peabody had his reliance on borrowed money and a profit - splitting deal been known . the law also would require disclosure that mr. bilzerian and mr. debartolo were acting jointly . those weren't the only things mr. bilzerian kept secret . he reimbursed jefferies for , about half its loss on robertson . to conceal that the payment had been part of a legally questionable stock - parking scheme , mr. bilzerian sent jefferies a letter saying the payment was for " financial consulting services " in connection with the cluett peabody offer . people familiar with the matter say no such services were rendered . jefferies collected by taking from mr. bilzerian's personal account at the firm . still , that didn't quite end the matter . mr. bilzerian later learned that mr. lefrere had steered more than in commissions to jefferies . this meant jefferies had now recouped more than its loss . so mr. bilzerian sent jefferies two phony invoices , each for , for unspecified " consulting services , " which resulted in false entries in jefferies's books and other records , according to people who know the details . acquaintances of mr. bilzerian say his concern over the money was characteristic . the amount , though not insignificant , paled in comparison with the million that he and his investor group got in the cluett peabody raid . this time a white knight -- west point - pepperell inc. -- did surface with a million bid . a losing bid had won a fortune . mr. bilzerian was gleeful over the experience , acquaintances say . it attracted him for the same reason that cluett peabody had , his acquaintances say : hammermill had proved it was vulnerable to greenmail , having paid it to make raider carl icahn go elsewhere . mr. bilzerian initially insisted he was serious about acquiring the company . but merrill lynch & co. investment bankers he consulted on financing say he resisted setting his bid high enough to be considered seriously . there was an angry confrontation between mr. bilzerian and a top merrill lynch official . mr. bilzerian took his business to shearson lehman brothers inc . boldly ambushing the unsuspecting hammermill , mr. bilzerian made a formal million tender offer for the firm in july . an hour before , his investor group bought a huge , million - share block of hammermill stock and announced its holding of a stake . this position was so large that mr. bilzerian could practically force the company into sale or liquidation . but as in the cluett peabody raid , mr. bilzerian's sec disclosure documents may be more significant for what they didn't say than for what they did . earlier that year , mr. bilzerian asked mr. jefferies to buy hammermill stock , hold it and then sell it to him later , these people say . jefferies did so , they say , eventually selling shares to mr. bilzerian . at the time he talked to mr. jefferies , it appears that mr. bilzerian already owned about of hammermill's shares , these people say . mr. bilzerian's stock , plus the stock jefferies was buying for him , apparently amounted to more than of hammermill's shares . the arrangement therefore could have violated the sec rule requiring any group of investors to report a stake of or larger . mr. bilzerian again failed to disclose that he was working with mr. debartolo . mr. debartolo bought hammermill securities in his own name and lent millions of dollars to relatives , employees and mr. bilzerian to buy hammermill stock , documents indicate . the possibility of insider trading in hammermill shares is also under investigation by the sec , according to people familiar with the case . a page of handwritten notes dated may , , a copy of which was obtained by this newspaper , appears to detail a proposed financing arrangement between messrs . mr. bilzerian's public filings in his hammermill takeover bid didn't disclose any loans from mr. debartolo . within three weeks of his hammermill bid , mr. bilzerian drove the company into the arms of a white knight , international paper co. , which bought hammermill for billion . mr. bilzerian and his group , including the mack family of new jersey , divided about million in profits . shearson reaped million in fees . and mr. bilzerian already began gunning for another target . in the fall of , jefferies , at mr. bilzerian's behest , began acquiring at least shares of armco , the new jersey steel producer . mr. bilzerian concealed these purchases by parking the stock with jefferies , according to people who knew of the trades . while the stock was parked with jefferies , its total value rose by about . to realize that gain , mr. bilzerian sent jefferies a invoice for consulting services , although no such services were performed , according to people familiar with the transaction . the scheme didn't stop there . jefferies -- which had recently learned it was under investigation -- declined to accommodate mr. bilzerian in what seemed to be be a tax fraud , since the profits were clearly earned in . mr. bilzerian never made a bid for armco ; the company says it never heard from him . during late mr. bilzerian also appears to have reciprocated some of the secret cooperation he had earlier received from mr. debartolo . in october , mr. bilzerian joined mr. debartolo in a billion bid for allied stores corp . on nov. , mr. debartolo and limited inc. made a hostile billion bid for carter hawley hale stores , a los angeles - based department store chain that had survived previous takeover threats . the sec says it has information that mr. bilzerian asked jefferies to accumulate carter hawley stock for mr. debartolo in a nominee account to disguise the identity of the true owner . in another transaction , mr. bilzerian arranged to sell about carter hawley shares through jefferies . but when the transaction occurred , the shares appear to have been owned by mr. debartolo , according to people familiar with the transaction . while there may be nothing wrong with the sale , it raises questions about any undisclosed relationship between messrs . bilzerian and debartolo . the sec has said it is investigating mr. debartolo's carter hawley disclosure documents . it's unclear why mr. bilzerian retreated from armco and why mr. debartolo capitulated so quickly in carter hawley . but several things happened that could have encouraged them to do so . in november , the government's insider - trading investigation moved into high gear when takeover speculator ivan f. boesky agreed to plead guilty to a felony , settle sec charges for a record million and cooperate with investigators . the sec launched a formal investigation on nov. " in the matter of certain transfers of securities , " a widespread parking probe . soon after , mr. bilzerian severed all relations with mr. jefferies and jefferies & co . a few months later , in march , the government announced that mr. jefferies had agreed to settle sec charges , plead guilty to two felonies and cooperate . less than a month later , the sec amended its formal order to direct an investigation into possible securities law violations in trading in cluett peabody , hammermill , carter hawley and other unnamed issues . while mr. bilzerian wasn't named , it must have been clear to mr. bilzerian that he was a subject of the investigation . the u.s. attorney in manhattan began a similar criminal investigation . the oct. stock - market crash frightened other potential bidders , and singer , to the surprise of many , succumbed to mr. bilzerian's billion hostile bid . earlier this year , mr. bilzerian had himself named chairman of singer , one of the nation's oldest , best - known corporations and a major defense contractor . in little more than three years of corporate raiding , the high - school dropout had entered the elite ranks of the nation's chief executives . gangs , drugs , violence and death have escalated in the city of los angeles as you indicated in " get the users " ( editorial , april ) . street gangs have become big business and big - time crime throughout california . police enforcement sweeps of the drug - infested and violent areas of los angeles have netted well over suspected gang members and drug dealers . this " get tough " attitude is crucial and is demanded by the severity of the problem . it is equally important , however , to focus on the root of the problem -- to prevent gang violence before it occurs and to discourage youngsters from falling prey to what they perceive as glamour , excitement and the machismo of street gangs . preventive measures to this end currently are being undertaken in several different ways . on a social level , neighborhoods are fighting back . groups such as mothers against gangs in communities and the united neighborhood organization are rallying strength in the central city to protest the audacity and violence of drug pushers . in my own assembly district in the suburbs of los angeles , the " save our children " group has sponsored marches through the streets in large numbers to show that the people are taking back ownership of their neighborhoods . there are dozens of bills aimed at curbing gang violence . i have authored a bill to implement community - based gang violence intervention programs that would target elementary and junior high schools most affected by gang violence , providing job training , family and individual counseling and other techniques to limit the appeal of gangs and to teach vulnerable youngsters not to need to depend on drugs or gangs . people are fed up with the drug users and drug - related crime . together , community leaders , educators , parents and elected officials in this city are pooling our resources to protect ourselves . it's a major battle , but one that we intend to win . west germany's trade surplus narrowed to billion marks ( billion ) in february from billion marks a year earlier and billion marks in january , the federal statistics office said . the year - to - year decline represented a turnaround from january , when the surplus widened from billion marks a year earlier . in 's first two months , the surplus fell to billion marks from billion marks a year earlier . analysts said the february data were difficult to interpret because price - adjusted figures weren't available . nonetheless , they agreed that the trend toward a smaller german trade surplus continued . the statistics office also reported that germany's surplus on its current account , a broader measure that comprises trade in goods and services as well as certain unilateral transfers , widened to billion marks in february from billion marks in january . the report didn't include a year - earlier figure for the current account , but last year the government reported a february current - account surplus of billion marks . the february trade report was delayed for six weeks because of the implementation this year of a new reporting system based on european community guidelines . the latest report said exports slumped in february from a year earlier , to billion marks , while imports increased , to billion marks . in the first two months , exports fell , to billion marks , while imports declined a smaller , to billion marks . when john bodner jr. , attorney for koppers co. , learned which federal appeals court judges would hear arguments in the company's antitrust case against hostile suitor beazer plc , his jaw dropped nearly as fast as his blood pressure rose . appearing today for the ninth circuit in san francisco will be judges preguson , boochever -- and beezer . " it knocked me off my chair , " says mr. bodner , a partner in howrey & simon , a washington firm . " i was only consoled at last when i realized the names were spelled differently . " what would bring real consolation to the - year - old veteran litigator is if the three - judge panel upholds a district court's preliminary injunction halting the beazer - led billion tender offer . approval of the injunction -- intended to stop the - a - share bid until the court can consider if certain antitrust questions are being adequately addressed -- would be precedent - setting . making history , though , is nothing new for mr. bodner . he represented litton industries inc. when the telephone equipment maker won the largest antitrust award in history from american telephone & telegraph co . in , the supreme court ordered at&t to pay million in damages and interest to litton . mr. bodner had mr. fitzgerald reinstated by the civil service commission . moreover , after the watergate tapes showed that president nixon was actually the one who ordered mr. fitzgerald's dismissal -- " get rid of that son of a bitch , " he said -- mr. bodner was able to win about from mr. nixon . the koppers case is complex . in march , the justice department determined that a beazer takeover of the construction materials and chemicals concern would satisfy antitrust regulations as long as the british builder divests itself of a koppers sand - and - gravel facility in southern california . a beazer unit already has a nearby quarrying operation . but pittsburgh - based koppers objected to the justice department settlement , known as a consent decree . it questioned , for instance , whether beazer would even be able to find a buyer for the facility . and if no buyer is found , the company argued , that would spell the facility's demise and , in turn , hurt the competitiveness of the area's road - building industry . should the court determine the agreement isn't in the public's best interest , the justice department must reconsider . but mr. bodner was able to convince the lower court that if problems were discovered after the - day comment period -- and the acquisition had gone through -- it would be too late to cure them . " you can't unscramble scrambled eggs , " he says . such reasoning has tremendous implications . should the appeals court uphold the injunction , other companies may try to thwart hostile bids by asserting they can't be completed at least until the - day period has expired . " what this comes down to , " says one knowledgeable antitrust observer , " is whether the tunney act proceeding can be used as a defensive tactic in takeovers . " wall street is convinced it can't . after mr. bodner secured the injunction in early april , word traveled through the arbitrage community that the restraint would be lifted on appeal . " we're still bullish on that , " maintains one trader . " nothing i have seen shakes my confidence in our conclusions , " counters assistant attorney general charles rule . still , at least for now , beazer's bid is stalled . besides the california action , koppers has won a preliminary injunction from a federal judge in pittsburgh , who ruled that bns inc. -- the shell company trying to make the takeover -- might not have complied with financial disclosure rules . bns filed additional information , which for the most part , seems likely to meet the judge's concerns . but in one area , regarding bank - borrowing regulations , bns disclosed it might be in violation of the law . and people close to the case say the pittsburgh court may require more details -- and even a full trial -- before the injunction is lifted . " there is a lot of case law that says all you have to disclose is you might have a problem , " says one securities expert . " but it's not cut and dried . " an attorneys conference will be held may in pittsburgh , after which the court will decide if further hearings are needed . in san francisco , meanwhile , mr. bodner says he's encouraged by a friend - of - the - court brief supporting the basic right to issue the preliminary injunction . it's signed by , among others , john v. tunney , the former congressman for whom the tunney act is named . " i don't really know how significant it is , " mr. bodner says . the west german government took a small step toward loosening the bundespost's near - absolute control of the country's telecommunications . the cabinet approved a plan to split the bundespost , the country's postal and telecommunications ministry , into three units : postal services , telecommunications and banking services . telecommunications would be run by a new company called telekom . under the proposal , about of the bundespost's sales , which exceeded billion marks ( billion ) last year , would be opened to competition with private companies , primarily makers of phone equipment . the remaining of bundespost revenue , mostly in telephone services and networks , would remain a state monopoly . the plan follows calls from west germany's trading partners for deregulation of the bundespost's monopoly . western diplomats described the decision as a modest beginning that is unlikely to stem criticism that bonn is liberalizing its highly restrictive phone market too slowly . domestic proponents of deregulation , led by economics minister martin bangemann , have criticized the proposed changes as too limited . on the other hand , some conservative economists have objected to the separation of the loss - making postal services from the highly profitable telecommunications sector . between thursday , may and tuesday , may ( for syndicated times and stations , check local listings : " korean war : the untold story . " after all the glib jokes on the tv series " m*a*s*h , " it's interesting to see one of its cast members take a more sober look at america's least - talked - about war . loretta ( " hot lips " ) swit hosts this fine documentary from arnold shapiro productions . saturday , may , p.m. - midnight edt , on hbo : " atlantic records th anniversary : it's only rock ' n ' roll . " not to be mistaken for another nostalgia - fest about the early days of rock ' n ' roll , this live celebration from madison square garden will cover four decades of pop music , as captured by the little record label that could . sunday , may and tuesday , may , - p.m. edt , on cbs : " beryl markham : a shadow on the sun . " she grew up among the nandi tribesmen of kenya , became a renowned thoroughbred horse trainer and a pioneer of aviation , wrote a book that made hemingway rave , and broke men's hearts until she died at the age of . no wonder beryl markham is a folk legend ! now she's also the subject of a miniseries , starring stefanie powers . the complex issues of the arms race become somewhat clearer in this exploration , by a group of distinguished experts , of what might happen if the u.s. and the soviet union actually agreed to eliminate their nuclear arsenals . sponsored by the chicago council on foreign relations . tuesday , may , - p.m. edt , on abc : " the american comedy awards . " so far , this new awards show ( now in its second year ) has not given an award to itself . but wait : one of this year's nominees for funniest female performer in a tv special is lily tomlin -- for her contribution to last year's " american comedy awards . " wednesdays , may - june , - p.m. edt , on a&e ( see cable listings for repeat dates ) : " why we fight . " never before seen on american tv , these seven films were made by frank capra for the u.s. war department between and , in order to motivate u.s. servicemen shipping out for world war ii . thursday , may , - p.m. edt , on cbs : " promised a miracle . " in , a couple by the name of parker decided to stop giving insulin to their diabetic son in the hope of achieving a miracle cure through faith healing . after the boy died , they produced a book about their experiences , which has been made into a tv movie . sunday , may , - p.m. edt , on cbs : " my father , my son . " in , during the vietnam war , navy adm. elmo r. zumwalt jr. ordered the use of the defoliant agent orange , which he now believes caused two kinds of cancer in his own son , then a navy lieutenant . after elmo iii underwent treatment for lymphoma and hodgkin's disease , he and his father , like the parkers , produced a book about their experiences , which has now been made into a tv movie . sunday and monday , may - , - p.m. edt , on abc : " baby m . " no , william and elizabeth stern and the woman they hired to bear their child , mary beth whitehead , have not produced a book about their experiences . but their lengthy , much - publicized ensuing custody battle has been made into a tv miniseries . a chilling documentary from the hbo " america undercover " series about the case of edward earl johnson , a death - row inmate in mississippi's parchman penitentiary . as the day of execution draws near , so do the shadows of doubt about mr. johnson's guilt . narrated by tom wicker . tuesday , may , - p.m. edt , on pbs : " monuments to failure : america's prison crisis . " just in case you were not sufficiently sobered and depressed by the last entry , here's another sojourn behind prison walls , also narrated by tom wicker . some people actually think a long supermarket checkout line is a godsend . they're called magazine publishers . for many magazines , including most women's publications , the battle for circulation is fought at checkout counters . as the number of other kinds of newsstands has diminished , the supermarket has become a fiercely competitive arena , with many more magazines vying for rack space . meanwhile , the arrival of faster scanning systems at many grocery checkout counters means magazines have a little less time to grab the attention of shoppers . so , many women's magazines are rethinking and redesigning their covers , moving away from the traditional close - up of one person surrounded by headlines . a growing number are putting several pictures on their covers to create a kind of pictorial table of contents . instead of relying on the drawing power of one model or celebrity , they hope each picture will attract a different segment of the audience . " with the old covers , if you had cher , she attracted a young audience , " says elizabeth sloan , editor in chief of mccall's magazine . " but what about our mothers ? we wanted to mix up the covers to appeal to different age groups . " the magazine split the country in half and sold one cover in the east , another in the west . over several months , the multi - image cover consistently outsold the other . last year , mccall's decided to use the multi - image cover exclusively . " we have a television - oriented audience , " ms. sloan says . " they're visually , not word , oriented . " the june issue of ladies' home journal also uses several large pictures of celebrities rather than one . myrna blyth , the magazine's editor in chief , says the cover is an experiment , and not a commitment to changing the format . but she acknowledges that the days of one close - up on the cover are waning . " in a quieter time , when there were fewer magazines in the supermarket , you didn't have to be so noisy , " she says . " but if you have one image , and that image isn't appealing , then you wonder , could you put another picture on the cover and sell more copies ? " even magazines that still use single images on their covers are changing , trying to convey more with one picture than simply the intimacy of an appealing face . similarly , glamour magazine's june cover photograph pulls as far away from the model's face as the magazine has ever done . checkout counters are " primary impulse - buying situations , " says willard bishop , a food - retailing consultant . and there's tremendous competition for attention not only from other magazines but from items like candy , tobacco and razor blades , mr. bishop adds . that's why magazine executives say covers have to reach out and grab buyers . " news sells , pretty sells and hot sells , " says ms. blyth of ladies' home journal . " a wonderful picture of princess diana on the day she announces her divorce -- that's my dream cover . the other dream is to have someone on the cover who dies . it's never happened , but i'm an optimist . " abiomed inc. said that national institutes of health officials told it that funding for four research contracts for development of an artificial heart will be suspended sept. . the maker of cardiac support systems , in collaboration with the texas heart institute , last december received one of four contracts awarded by the nih for artificial - heart research and development . the four recipents originally were awarded contracts valued at million annually over / years , the company said . the other contracts were awarded to the cleveland clinic , pennsylvania state university and the university of utah in collaboration with others . abiomed's stock fell sharply yesterday on news of the suspension ; it closed at , down , in american stock exchange composite trading . the company said it expects to receive this year under the contract . it added that it expects to report annual revenue of slightly less than million for its fiscal year ended march . david m. lederman , chief executive officer , said the suspension will affect research and development revenue , which accounts for about of total revenue . he says the company is gradually generating more revenue from its commerical products . an nih official wasn't available for comment . teamsters union president jackie presser temporarily stepped down from his post , citing health problems . mr. presser , who has been suffering from lung cancer and from the effects of its treatment for some time , sent a message to members of the union's general executive board , saying he is taking a four - month leave of absence . he cited doctor's orders that he undergo more radiation therapy , get substantial rest and avoid stress while recuperating from the treatment . weldon mathis , the union's secretary - treasurer , will run the union during mr. presser's leave . for months , mr. presser has been on the job only a few hours a day . some teamsters local union officials speculated that mr. presser might give up the teamsters helm indefinitely , especially if his health doesn't improve significantly . but justice department officials were skeptical of the teamsters leader's claims of escalating health problems . their latest court filing in a criminal case against him suggested that those claims are part of a strategy to stall the trial . mr. presser has been indicted in the case on charges of payroll padding at the cleveland local , which he still heads . they include a tentative justice department plan to seek a court - ordered federal takeover of the union on claims that it is racketeer - dominated . the union leaders also are working to gain ratification by truck - driver members of a contract agreement with the trucking industry . the pact is unpopular among many of the rank and file and local union officials . the world health organization , which is holding its annual assembly in geneva this week and next , is crying budget crunch . according to a who assistant director general , warren furth , because of the financial crisis , " millions of children will not be immunized and many will die . " though the u.s. is the main supporter of who , it is being charged with stifling the organization by not paying its dues . is the - year - old agency really constrained from its mission because of a u.s. - induced budget shortfall ? or is who a victim of the vagaries of its own fiscal priorities and mismanagement ? first , let's take a look at the " budget crisis . " the proposed budget for and represents only a decline in real resources ; the individual country programs are even scheduled for a increase ; and who has proposed an increase in staffing equivalent to full - timers a year . does this sound like an agency with its budgetary back to the wall ? as for u.s. contributions to who , the u.s. provides some million a year to the regular budget . the next largest contributor is japan , which gives less than half as much . some million of that figure constitutes dues that will be paid , as always , in october . the only other amount the u.s. owes is million from past dues as a result of congressional budget limitations . who has long known about this and already adjusted for it . all this makes the current cries of sudden budget disaster a bit hollow . aids and immunizations , as well as most of the other important disease programs , aren't even funded out of the regular who budget . they are funded from who's extrabudgetary account , to which the u.s. contributed million during - . this direct contribution was about of the total account . u.s. funds funneled through other agencies may boost the u.s. contribution to who's extrabudgetary account to of the total . the u.s. and other countries fund this extrabudgetary account to the tune of about a half - billion dollars every two years -- almost as much as the regular who budget of million . the two sources combined provide more than a billion dollars to who . any notion that the u.s. is abrogating its financial commitment to dying children is just plain wrong , whether measured in terms of its who contribution or in terms of overall u.s. development assistance . how does who manage all this money that the u.s. and others contribute ? the largest increase in the - budget was in support services , up a whopping from the previous two - year period . another big winner was the budget for the annual meetings in geneva , up . the total spent on these world health assemblies is now more than million a year . this is more than the proposed annual expenditure for health programs for the elderly and three times as much as is budgeted for blindness programs . in these times of " budget crisis , " who proposes a net loss of only two staff positions at its headquarters ; staff salary costs are up and staff allowances , . a former u.s. government official , john bryant , who also worked for who , describes who's philosophy as " grounded in equity , to each according to their needs . " sadly , there are real losers in the budget . disease prevention and control , who's ostensible purpose , has been reduced from of the regular budget to in - , a loss of million . and then there are the budget mysteries . for example , the regular budget subcategory " all purposes " accounts for some million , or , of the category " other expenditures . " nowhere is there any description of the purposes of this amount -- which seems small in light of the budget as a whole but is more than who's entire proposed central planning and management budget for primary health - care systems , million . when who was created , it suited the needs of the developing world , then burdened with infectious and parasitic disease . many of these countries have now passed through an epidemiologic transition . people are living longer , and are dying from disease patterns more akin to those of the u.s. than of uganda . expansion in health services has moved away from publicly sponsored initiatives to alternative delivery systems in the semi - public and private sectors . doesn't it make sense , therefore , for the world's premier health institution to take a careful and critical look at its own priorities and finances ? who has gone through a lot of controversy over the past decade , with dissension on infant formula , on drug policies that limit the number and kinds of pharmaceuticals available to developing countries , and on its slowness to develop aids policies . it can regain its once - deserved high respect by going back to basics -- providing health care to meet the real health needs in developing countries , not what they used to be -- and organizing its budget according to current needs . mr. dietrich , ex - publisher and editor of saturday review , is chairman of the international hospital committee of the order of malta - federal association , in washington . the order is one of the world's largest charitable hospital associations . canadian pacific ltd. reported first - quarter earnings fell , primarily because of a large gain a year earlier . operating profit rose . net income was million canadian dollars ( million ) , or cents a share , compared with the year - earlier million dollars , or dollars a share , which included a gain of million dollars from the sale of the company's canadian pacific air lines unit and an office building in the united kingdom . revenue rose to billion dollars from billion dollars . operating profit in the latest quarter was bolstered primarily by higher earnings from the forest - product and transportation operations . canadian pacific closed yesterday in new york stock exchange composite trading at , unchanged , on heavy volume of million shares . the big transportation and industrial holding concern said it expects a further improvement in profit for the balance of the year due to improved markets for forest products , firmer coal prices and strong demand for steel and rail transportation . w. w. stinson , canadian pacific's president and chief executive officer , said after the annual meeting that the company doesn't have any " big acquisition " in mind at present . " we want to make sure we get the right fit , " he said . he cited as an example of the company's strategy the recent acquisition from canadian national railways of cn hotels , which will be merged with canadian pacific's own hotel chain . mr. stinson said in response to a shareholder's question that canadian pacific would be interested in buying canadian national's stake in cncp telecommunications , although there isn't any indication that canadian national , which is owned by the canadian government , wants to sell . mr. stinson said at the meeting that the restructuring process within canadian pacific " will never end " because markets and other conditions change . since , canadian pacific has sold its airline ; its majority stake in cominco ltd. , a mining concern ; and its maple leaf mills ltd. agricultural products unit . it also recently sold most of its fleet of bulk ships . whitehall corp. was temporarily barred from receiving government contracts . the decision stemmed from alleged overcharging on contracts a unit held to refurbish military aircraft . the defense department last year barred the subsidiary , lake city , fla. - based aero corp. , from receiving government contracts until oct. , . in february , a federal grand jury in jacksonville , fla. , indicted aero and two aero executives on charges of conspiracy , making false statements and theft . the government alleges that aero overcharged the defense department in labor costs and concealed defects in its work on air force c - cargo aircraft . aero has denied the allegations . a trial is set for next month . a spokesman for the defense logistics agency said the suspension had been extended to the parent company because further investigation of the " management structure " indicated that " people at whitehall should have told aero to stop what was going on . " unlike the sanction against aero , the suspension against whitehall is temporary , pending the outcome of the legal charges . also specifically suspended from contracts were lee d. webster , whitehall's chairman and president ; earl morris , vice president and general manager of aero from january until august ; and gary boettcher , aero vice president and assistant general manager from march until august . messrs . morris and boettcher couldn't be reached for comment . in new york stock exchange composite trading yesterday , whitehall shares closed unchanged at . it couldn't be determined how much of the electronics and geological company's business might be affected by the suspension . there was no answer to phone calls to whitehall's headquarters . but the company said in its statement that the temporary ban didn't affect u.s. navy contracting at its hydroscience inc. and seismic engineering co. units . to most car buyers , a manufacturer's rebate is just like a discount on the sticker price . but many states don't share that view , and they're collecting millions in additional sales taxes as a result . for years , the policy apparently has gone unchallenged . but in pennsylvania , a disgruntled taxpayer recently filed a classaction suit to force the state to give back the money it has raked in by applying sales levies to the full , pre - rebate price of new cars . what effect , if any , the suit will have on other rebate - taxing states won't be clear until it's settled . but , according to some tax experts , the practice as it now stands is decidedly unfair . " the tax should be on the net price people pay , " says steven gold , director of fiscal studies for the national conference of state legislatures , a think tank that follows such issues . adds john mikesell , a public - policy professor at indiana university and an expert on sales - tax issues : " it seems to me that sales taxes are supposed to be taxes on consumption and expenditures . a rebate is a reduction in what a person spends on an automobile . " " we treat the rebate as if it were a friendly uncle who gave you money for the down payment , " explains verenda smith , a spokeswoman for the illinois department of revenue . still , there are exceptions . texas , for instance , has " never taxed those rebates , " says a revenue department spokeswoman . officials in most of the rebate - taxing states report little or no protest over their policies . not even in pennsylvania is there much of an uproar . still , philadelphia - area lawyer ron smolow is pursuing a class action suit in commonwealth court against the state , challenging the imposition of pennsylvania's sales tax on new - car rebates . " we've asked the state to undertake a refund program for all the people who bought cars in the last three years , " says mr. smolow . the lead client is nan smolow , mr. smolow's wife , who paid in sales tax on the rebate ford motor co. gave her for buying a mercury sable station wagon last september . state officials say they don't expect to lose the case . one of the problems mr. smolow faces is quantifying his claims of financial loss . to calculate the total amount of car rebates handed out in pennsylvania , he would have to know how many cars were sold with the help of rebates , how big the rebates were on each car , and whether the buyers took the rebate as cash , or opted instead for a lower financing rate . this isn't the kind of information auto makers gladly volunteer . and while mr. smolow says million a year is at stake in pennsylvania alone , even he admits his figure is just a rough estimate . deputy secretary ross says the whole flap could be resolved if the auto makers simply cut the sticker prices of their cars , instead of handing out cash . " they should make it a discount off the list price , " he says . but that's not likely to happen . the cash rebate is still the favored price - cutting approach among u.s. auto makers , largely because rebates can be turned on and off at will , and because the cost of rebates is easily factored into a car's underlying sticker price . it doesn't enter into our thinking as far as working on an incentive program . " moreover , dealers say cash rebates can help sales . true , a florida resident who buys a chevrolet nova pays an extra in sales tax on the rebate gm offers on the car . but when that rebate is used as the down payment , most buyers can get financing without any additional cash , says jerry kowalsky , floor manager for maroone chevrolet in hollywood , fla . " in to of deals , " he says , " rebates put them in a car they couldn't have afforded . " and what about the tax bite ? " not even one complaint , " he says . an association of florida citrus growers will file a complaint against japan for allegedly restricting imports of fresh oranges and orange juice in violation of international trading rules , according to the group's congressional supporters . a spokesman for rep. tom lewis ( r. , fla. ) acknowledged that the petition is timed to give u.s. trade representative clayton yeutter additional leverage in his talks this week with visiting japanese agriculture minister takashi sato . the two officials are trying to reach an agreement on a schedule for ending japanese import quotas on beef and the two citrus products . japan reportedly is offering to scrap the citrus quotas in five years , while the u.s. wants a quicker timetable . the petitioner , florida citrus mutual , is a lakeland , fla. , cooperative that says it represents of the state's citrus production . in addition to rep. lewis , other members of the florida delegation , including democratic sens . lawton chiles and bob graham and republican rep. andy ireland , have stated their support for the petition . a lawyer preparing the association's complaint couldn't be reached for comment . if this week's negotiations fail , mr. yeutter could use the petition as a basis for pressing for remedial action in gatt . japanese farm groups have rejected u.s. claims that the quotas are a breach of gatt rules . before his departure for washington , mr. sato vowed to find a " realistic " solution to the dispute . nothing in peter drucker's editorial - page article " low wages no longer give competitive edge " ( march ) supports the contention in the title . japan and the four tigers , mr. drucker states , turned " their unskilled and low - wage people rapidly into highly productive but still low - wage workers whose output could then compete in the developed markets . " this competition no longer matters , he argues , because " wages are no longer a major factor in total costs . " specifically , he claims " if wage costs fall below of total cost , it takes a wage differential -- it the same labor productivity -- to offset the costs of distance . that is practically unheard of , certainly in developed countries . " however , large differentials between the u.s. and developing countries are common . very low wages offset our productivity advantage . in , brazil and south korea were the low - cost producers of hot - rolled steel , with labor costs of an hour ( of american labor costs ) ; korean and brazilian labor productivity was roughly of american productivity . as for textiles , mr. drucker says " about half the u.s. textile industry actually operates at costs competitive with the lowest - wage producer . " mr. drucker's claim that u.s. manufacturing employment has not declined in absolute levels is misleading , as it depends on his base year . in fact , two million manufacturing jobs have been lost since production employment peaked in . given these real - world differentials , it is hard to reach the conclusion that low wages in developing countries don't threaten u.s. wages and jobs . mr. drucker cites a " well - tested rule { that } offshore production must be at least , and probably / , cheaper than production nearby to compensate for the considerable costs of distance : transportation , communications , travel , insurance , finance . " my analysis indicates that this understates the foreign price advantage necessary to make up for the hidden costs of sourcing abroad . the hidden costs of foreign sourcing include freight , packaging , insurance , customs duties and communications costs , as well as others that are harder to quantify -- such as the costs of larger inventories , additional internal rework , lost time for delayed deliveries , exchange - rate risks and the costs of additional features required to bring foreign products in line with u.s. standards . once these costs are taken into account , u.s. firms are competitive with foreign suppliers , even when the u.s. quoted price is higher . the government abolished a controversial wheat subsidy whose withdrawal has long been demanded by the international monetary fund and whose termination is expected to reduce federal spending by billion cruzados ( million ) this year . the decision , which has been repeatedly promised and postponed over the past five years , followed talks earlier this month between finance minister mailson ferreira da nobrega and the imf . it forms part of a concerted attempt to cut the budget deficit to of brazil's economic output from a projected . international creditor banks and the imf view controlling runaway public spending as an important condition for the agreements brazil is seeking with them . brazil , which declared a moratorium on an estimated billion of foreign bank debt in february , has made progress toward accords with its creditors since mr. nobrega took office at the beginning of this year . brazilian officials expect to reach an agreement with the imf on an economic program by the summer . a debt - rescheduling pact with the banks is expected sooner , possibly within the next few days . the subsidy represented the difference between the price guaranteed to farmers and the lower price charged to mills , in a system that has been a state monopoly for more than years . its elimination was promised as early as , in a letter of intent signed with the imf . the end of the subsidy will cause retail prices for bread , pasta and flour to rise more than . however , other recent austerity measures , including the temporary elimination of inflation - adjusted wage increases for state employees , have had more of an impact on purchasing power but have stirred little protest among a population that appears disillusioned to the point of inertia . following his talks in washington , mr. nobrega said he would soon announce measures to reduce brazil's budget deficit by about billion . the elimination of the wheat subsidy is expected to be followed within the next few weeks by tough cuts in social security benefits and other measures . safeway stores inc. is making big strides in reducing the staggering debt the grocery chain took on when it went private in to elude dart group corp.'s hostile bid . analysts say the oakland , calif. - based retail giant's success to date indicates the concern which took the company private , the new york investment firm of kohlberg kravis roberts & co. , is likely to take it public again , perhaps as early as next summer . officials of kohlberg kravis couldn't be reached for comment . a safeway official declined to comment on the company's plans . safeway's possible return from its billion management - led leveraged buy - out also could be proving a spur to management at competitor lucky stores inc. , which is considering going private to avoid being grabbed by american stores co . in a leveraged buy - out , a small group of investors acquires a company in a transaction financed largely by borrowing . ultimately , the debt is paid with funds generated by the acquired company's operations or sale of its assets . the latest debt figure includes million that comes due this year ; in the year - ago period , billion of debt came due and was paid off . debt payments in future years drop off substantially , the document noted . long - term debt at jan. stood at billion , compared with billion a year earlier . safeway's filing said the debt reduction , accomplished in part by the sale of some operations , has " significantly improved the financial position of the company . " it added that after certain planned asset sales are completed this year , it expects to be able to meet debt payments with cash generated from operations . the planned sales are part of a massive , uncompleted divestiture program the company undertook after going private . in the buy - out , safeway started off with in debt for each dollar in equity , one of the highest such ratios ever in a large deal . asset sales in totaled billion , according to the filing , and current sales agreements call for the company to receive an estimated additional million in the current year . safeway has shed , among other things , its liquor barn discount liquor operation , its supermarket operations in britain and some midwest states , and substantial holdings in an australian concern . as of jan. , assets stood at billion , down from billion a year earlier . safeway said year - to - year earnings and sales figures aren't comparable , because of the asset sales . last year , it had operating profit of million on sales of billion , the filing said . but swollen interest expenses and a whopping one - time accounting charge of million , related to changes in the valuation of assets that were sold , gave it a net loss of million . jonathan h. ziegler , an analyst with sutro & co. , san francisco , said safeway's moves since the buy - out have been " very successful . " the company's management has been savvy in breaking off safeway operations for sale , he said , adding that the detachable nature of its various units made the process easier . if the planned deal for its southern california stores goes through , mr. ziegler predicted , safeway could go public as soon as next summer , market conditions permitting . while selling safeway shares to the public would be " difficult today , " he said , an offering sometime in is possible . crisp and lustrous , the - cruzado bill was the symbol of a new brazilian era , one modestly described by former finance minister dilson funaro as combining " swiss inflation " with " japanese growth . " introduced on oct. , , in the midst of euphoria over a price freeze that had repressed inflation for several months , it was then worth ; today it is worth . and then , six months ago , came the - cruzado note , no longer symbolizing anything , but at least worth . it now buys , and italo gasparini , director of the central bank's currency department , plans a - cruzado bill for the second half of this year . but with inflaton expected to top this year , mr. gasparini hasn't any illusions . " it's futile , " he says , " i'm always running after inflation . " but other brazilians are more successful at keeping up . several years of rampant inflation has made them extraordinarily adept at beating the relentless price hikes , or at least staying abreast of them . it is a kind of sport , and newspapers are crammed with graphs showing how various investments can beat inflation . at the center of this elaborate system are the " over , " the " open " and the " black . " most relentlessly , they talk about the " over , " short for " overnight " ( pronounced " overnighty " ) . available in all banks , the " over " is a - hour deposit in treasury bonds whose interest rate is indexed to the rate of inflation . currently , the " over " yields per month . it is part of the comprehensive indexation that imbues brazilians , and their economy , with an unusual resilience to high inflation -- as well as a tendency to generate it . the central bank estimates that billion in indexed bonds are traded " overnight , " but economist gustavo franco believes it is closer to billion , or of the value of the country's ouput of goods and services . he , like most people who can afford it , has his money in the " over . " in a country of widespread poverty , not everyone can work the " over . " banks won't accept less than , and don't pay full interest until investments exceed . restrictions are less severe on the " open , " short for " open market , " but interest is lower and money is tied up for at least two days . although some resort to the " black , " buying black - market dollars to hedge inflation , indexed treasury paper remains more popular . this defense against fast - devaluing cruzados means there is less tendency here than in other south american countries to do business in dollars . but as the cruzado loses value the indexed treasury paper tends to take its place . this process , named after one of the most commonly traded bonds , the obrigacao do tesouro nacional , or otn , is known as the " otn - ization " of the economy . the value of the otn ( pronounced " otayenee " ) , goes up every month at about the same rate as inflation . adjusted at the beginning of every month , it has inflation built into it and is increasingly used for contracts . renting property in otns is standard . alongside the otn , the " fiscal otn " ( " otayenee fiscal " ) has emerged as an index . this adjusts in value daily , rather than monthly . investment banker andre lara resende says his mother recently put her rio apartment up for sale for " fiscal otns . " and so the system whirs on , accelerating as inflation accelerates . meanwhile , it helps keep the economy from falling apart -- at least for the moment . although industrial production is down from a year earlier , a widely predicted economic crisis and recession haven't materialized . everything would merely speed up . wages , once adjusted annually , then biannually and now monthly , would be adjusted weekly . the otn would move from monthly to daily adjustments . the " overnight " could become the " overhour . " and brazilians would survive hyperinflation , usually defined as starting at a month , just as they now live with high inflation . or would they ? tens of millions of poor people don't have the resources to place money in the " over " or in the popular federally guaranteed savings accounts , which offer six percentage points over inflation but hold funds for days . the ire of the poor against the government of president jose sarney is already growing . moreover , economists say the very move from currency to indexed bonds is eroding the tax base , exacerbating inflation's root cause , the spiraling budget deficit . and , as the deficit worsens , the specter that most frightens wealthy brazilians raises its head : a moratorium on the very government bonds with which they hedge inflation . that , says mr. franco , " is when you would get explosion . " ray eye moved slowly and quietly along the weathered cattle trail that cut a serpentine course through the alternating brush and wood lots . stopping on a small ridge , mr. eye slipped a quarter - sized piece of aluminum and latex onto the roof of his mouth , caught his breath , then blew air across the instrument to produce the smooth yelps and excited clucks of a lovesick hen turkey . in the distance a turkey gobbled . forty - five minutes and more than gobbles later mr. eye , rated by many as america's premier turkey hunter , sat , gun on raised knees , against a prickly clump of brush . the loud , rattling sound of the last gobble and the hissing noise of dragging wing tips told him the tom was close . well camouflaged , he moved only his eyes while inwardly his heart and lungs played an accelerating duet . twenty pounds of plumed majesty appeared on a rise a limo - length away , with fanned tail , powder blue head and fiery red neck tucked back into a body of feathers standing on end and reflecting an array of iridescent copper , green and black in the pure april sun . yet the skin - tingling excitement remains ever strong and he craves more . he is , admittedly , addicted . as recently as three decades ago , turkey hunting was a sport to be enjoyed in just a few isolated , backwoods areas of the south . the big birds had suffered terribly because of a loss of habitat and the unethical , uncontrolled slaughter of market gunning . the comeback of the wild turkey is nothing short of phenomenal , a tribute to the effectiveness of sound game management . thanks to the combined efforts of state game departments and thousands of concerned sportsmen the sound of a turkey gobble can be heard in all states except alaska , even in those that didn't traditionally hold the big bird . turkey hunting is the fastest growing shooting sport in the u.s. , and with the expansion of the sport has come a widening subculture that reaches into all parts of american society . sharply clad in a three - piece suit , gerald bethge spends his weekdays in an office in a madison avenue high - rise . he is an editor for outdoor life magazine ; his desk is covered with manuscripts , contracts and photographs that need tending , but concentration comes hard in the spring . his mouth and hands spend a great deal of time on a variety of turkey calls , much to the dismay of his colleagues . mr. bethge's calendar hangs above his desk , scarred by the exaggerated marks of an orange highlighter , marking the few days he'll be spending in the woods . until those days are history , they are the most important things in his life . unlike mr. eye , he is a relative newcomer to the sport , but the intense attraction is just the same . " i used to think that bow hunting for deer was exciting , " said mr. bethge . " but i don't see how anything could be more exciting than calling turkeys -- and i felt that way before i even got my first bird last year ! " yet it's surprisingly difficult for turkey hunters to pinpoint the exact cause of their obsession . " a lot has to do with the way the toms respond to the calls we're imitating ; they'll strut , they'll gobble and they're actually hunting you . plus you're sitting on the ground , eye to eye , and you're trying to call them in as close as possible . the suspense really builds and once you've experienced those feelings you're hooked for life . " mr. eye is quick to point out that wild turkeys have little in common with their naive , domesticated counterparts . " taking a mature wild turkey gobbler is one of , if not the , top challenges in hunting , " said mr. eye . " wild turkeys are designed to be survivors . they can see about degrees , they're fantastic at spotting movement , their hearing is about eight times better than ours and they're fast . they can run and fly as well as any game . about their only downfall is in the spring of the year during their mating season when they're the most vulnerable to calling . " such a time has been the downfall of many men . " i have friends who basically don't work in the spring , " said mr. eye . " they take off from mid - march through the first of june and follow the turkey seasons like migrant workers follow ripening crops . " mr. eye was once one who lost jobs annually to the siren's song of gobbling birds . now it's his business . as the professional staff member of h.s. strut , a major call company , mr. eye spends his time designing and testing calls , giving popular seminars and guiding hunters . the growing popularity of turkey hunting has added yet another spark to the u.s. sporting - goods industry . " at one time most of the turkey hunting products were being put out by basement operations , but that's changing , " said dave forbes , president of hunter specialties inc. , a hunting - equipment company that produces a wide range of turkey - hunting products . " with close to three million turkey hunters in america the market is now sized enough that larger corporations are getting into the business . " according to messrs . eye and forbes the result of such interest has meant better , more sophisticated equipment for the market . " it's kind of funny , " said mr. eye . " i'll give a seminar someplace where a lot of the people are going to be trying turkey hunting for the first time and they might not get too fired up . but it never fails that i come back the next year and they're hooked . " it's a disease that only has one sure cure . . . the next gobble . " mr. pearce is a free - lance outdoors writer based in manhattan , kan . rep. dan rostenkowski is being flooded with taxpayer mail , a deluge reminiscent of his highly publicized invitation to " write rosty " for simpler tax laws . this year , however , the illinois democrat did not ask for the letters , and the content of his mailbag is entirely different . phrases like " hooray ! " and " it's about time ! " cropped up frequently in his letters three years ago , before passage of the tax reform act of . now , with the new laws in place and a midnight friday filing deadline approaching for returns , one of the most frequent comments being sent to rostenkowski , the chairman of the tax - writing house ways and means committee , is " help ! " aides , pointing to two huge boxes of mail , said rostenkowski has gotten more than letters in a couple of weeks from angry , befuddled taxpayers , nearly all of them lambasting the tax changes . " simplification of the tax code must have been a joke . there is nothing that has been simplified , " said one of the letters , signed " an anonymous couple from pennsylvania . " " the federal government has once again botched it , " wrote a couple from denver . " we really feel that the lawmakers should . . . get taxation back to a fair and just process for all americans . " " i must say , it's a dog that didn't bark as far as we're concerned , " he said yesterday . " we have been waiting for something like this to happen . " the ways and means staff said most of the letters are part of a write - in campaign by money magazine and contain copies of an article in its april issue , " nine tax laws congress should repeal tomorrow . " " fight back , " the magazine said . " send a message to washington by checking off the boxes by the laws that outrage you , ripping out this article and sending it to the top tax lawmaker : the hon . dan rostenkowski . " the article criticized , among other provisions , limiting deductibility of individual retirement accounts , eliminating a deduction for married working couples and raising the threshold for claiming medical deductions . " people are mad , " he said wednesday . " they're mad about tax reform . they're mad about how long it took them to fill their forms out . they're mad about losing their ira deduction . there is a lot of frustration out there , and what we're trying to do is address it . " however , the internal revenue service said the changes are not without benefits , bringing lower maximum rates for most taxpayers and an increase in the average refund to this year from last year . philadelphia electric co. said its persistent nuclear power - plant problems will depress earnings and cloud the outlook for the company's common dividend . joseph f. paquette jr. , the utility's incoming chairman and chief executive officer , announced a variety of cost - cutting actions , including salary cuts for company officers , aimed at offsetting the decline . " it will be another challenging year for the company , " mr. paquette told shareholders yesterday at the company's annual meeting . his annual base salary was cut , effective april , to from . in , philadelphia electric earned million , or a share , on revenue of billion . the company paid annual dividends of a common share last year . wall street investors reacted mildly , having already anticipated a tough period ahead for the company . in composite trading on the new york stock exchange yesterday , philadelphia electric shares closed at a share , down cents . at the core of the company's problem is its peach bottom nuclear power facility , which the nuclear regulatory commission ordered shut in march when control - room operators were discovered playing video games and sleeping on the job . mr. paquette was recruited last month from jackson , mich. - based cms energy corp. after mounting criticism of philadelphia electric's inability to resolve peach bottom's problems , which included allegations of drug distribution . that criticism prompted the sudden departures of chairman james lee everett iii and president john h. austin jr . while generally supportive of mr. paquette and his turnaround goals , shareholders voiced outrage over the mismanagement of peach bottom . richard ash of philadelphia , for example , called for the resignation of the rest of the utility's board . " it's time we told directors , ' when the ship goes down , you should go down with it , ' " mr. ash said . separately , a group of philadelphia electric shareholders sued the company's officers and directors , alleging " gross mismanagement " of the peach bottom plant and " proxy fraud " in failing to disclose problems at the facility . in a multipart suit filed on behalf of the company in federal district court in philadelphia , the shareholder group sought damages of million from the company's management . the suit also seeks a new shareholder vote on charter and bylaws provisions approved at last year's annual meeting that expanded liability protection for philadelphia electric's officers and directors . the shareholders charged that management fraudulently failed to disclose information about peach bottom that might have affected approval of the protective measures . philadelphia electric said it is surprised by the timing of the suit but declined to comment on its merits . commenting on the utility's financial outlook , mr. paquette said earnings and the common dividend will depend upon the company's " ability to reduce costs ( and ) the length of the peach bottom shutdown . " he declined to speculate about the extent of the earnings decline , but it would mark the second consecutive year of lower earnings for the company . moreover , results were depressed by peach bottom's being closed for three quarters ; in , the plant is likely to remain idle for almost the entire year . on the regulatory front , mr. paquette already has met with officials from the nrc , the pennsylvania public utilities commission and the institute of nuclear power operations , which labeled peach bottom an " embarrassment " to the industry . the nrc had refused to approve plans submitted by philadelphia electric's previous management for restarting peach bottom because it couldn't demonstrate that the plant was being properly managed . but since then , all managers at levels between the chairman and the peach bottom control room have been replaced . zenith laboratories inc. , a generic drug maker that has sustained heavy losses the past two years , fired two top officers and said it will sharply pare operations . zenith also said that since dec. it has been in default on certain loan covenants covering million of debt . officials said the company has enough cash to make payments of principal and interest on its debt . the ramsey , n.j. - based company also is negotiating with creditors to waive the default , which was related to requirements regarding net worth -- the company's assets minus liabilities . james o. leonard , president and chief executive officer , and kevin g. conway , senior vice president , chief operating officer , secretary and general counsel , " voluntarily resigned " their posts . messrs . leonard and conway couldn't be reached for comment . as president , the board named larry a. weber , chief executive of the management consultants larry a. weber & associates inc . zenith's business performance soared between and . but the company has had financial problems since , when it was forced to suspend selling certain products because of manufacturing problems discovered by the food and drug administration . since then , monthly sales have dropped by almost half to between million and million . meanwhile , zenith had expanded aggressively , sharply increasing costs and producing the losses . based on expectations of growth in the generic drug industry , the company acquired a new headquarters , labs , and a plant in puerto rico , which has been running well below full capacity , mr. farber said . the new management is developing a plan to sharply cut costs , mr. farber said . " with a little luck we may have a profitable " , he said , noting that drug sales are rising again . the company hopes to market several new products during the year , he added . mr. farber said he had been trying to persuade the board to remove mr. leonard since last year , but that it decided to act when the exact size of the loss was determined . mr. farber , who owns icc industries inc. , a new york chemical company , had owned a controlling interest in zenith until it went public in . he now owns about of the common shares . zenith's shares have tumbled from about two years ago . in new york stock exchange composite trading yesterday , they closed at , down cents . secretary of state shultz departs for moscow next week for another try at conjuring a strategic - arms pact for ronald reagan to sign at the may summit . with its inf treaty nearly wrapped up in the senate , the administration that once decried the " evil empire " now is pursuing radical arms reductions with a momentum that has even jesse jackson applauding . historians may someday explain what turned mr. reagan into a utopian disarmer , but in the real world a start treaty will affect u.s. security for decades . with so much at stake , we'd rest easier if the administration gave more evidence that it's pursuing a coherent agreement . instead it is roaring toward a pact without any apparent strategic vision . to understand the dangers , consider what's already become clear in the debate over inf . that treaty has sailed through the senate , partly from political opportunism and partly because it's recognized as largely meaningless . a senate intelligence committee report acknowledged as much last month when it agreed with senator jesse helms that the u.s. can't verify the number of soviet ss - missiles , but that it doesn't matter because , with other warheads in the soviet arsenal , what's a few hundred more here or there ? pressed by senators dan quayle and sam nunn , chief inf negotiator maynard glitman recently has said he believes inf bans not just ss - s and ground - launched cruise missiles , but also certain " futuristic " weapons . some of these weapons are the stuff of buck rogers , but a few already are getting pentagon money . one example is the " remotely piloted vehicle , " an unmanned craft that could loiter over a target for long periods before locating and attacking an enemy's radar or command center . under inf , the u.s. won't be able to deploy any such system that has a range of between kilometers and kilometers , even if it carries only a non - nuclear bomb . so inf limits the west's ability to exploit its advantage over the soviets in technology -- forever -- though no one knows what new technologies might prove useful in the future . the administration may yet ask the soviets if they also think inf covers " futuristics , " but why should the soviets say anything more than , " we agree to abide by the treaty as signed ? " the same kind of logic could do even more damage under start . while start is supposed to reduce the number of ballistic nuclear missiles -- the big bertha ss - s and mxs -- the soviets want it to cover cruise missiles as well . and the same members of the reagan team who banned ground - launched cruises under inf now want to find a way to accommodate the soviets again by giving away sea- and air - launched cruises under start . messrs . reagan and shultz would no doubt get their nobel prize , but the u.s. will have thrown away its best hope for defending its interests without nuclear weapons . because they're so accurate , cruise missiles can use conventional bombs to destroy targets that only a few years ago required nuclear warheads . improvements in accuracy already have allowed the u.s. to reduce its nuclear stockpile by weapons -- without a treaty . a start accord also is supposed to make u.s. forces less vulnerable to a soviet first - strike , but a few ideas we've heard would do the opposite . making start verifiable certainly would require banning mobile systems , which the soviets have in abundance . in any event , the senate intelligence committee says the u.s. doesn't now have enough satellites to verify start no matter how it's constituted . a treaty banning mobiles would also shut off future possibilities for the u.s. to deploy its own mobile systems , should maintenance of the strategic balance some day require that by - no - means unthinkable contingency . despite these and many other problems , the word we hear is that mr. shultz and his aides won't take no for an answer on start . they see their days in office waning and they want to strike while they have a chance at the history books . they might even settle for a " framework agreement , " a kind of promise - to - agree that gives the senate no chance for review and wouldn't bind the soviets . president reagan , who campaigned successfully for a stronger country , could yet leave an ironic legacy : an america that is strategically confused and weaker . the federal aviation administration ordered airlines to inspect boeing co. - aircraft for fuel leaks after complaints that a wing bolt may corrode , releasing fuel into the cargo compartment . an faa spokesman in seattle said the agency is investigating the safety complaints and is " putting together a plan of attack " this week . but the spokesman played down the significance of the agency's actions because , he said , most - owners already had inspected the cargo areas . the faa issued an " airworthiness directive " on the - monday , warning that fuel in the cargo compartment " could result in a fire and substantial damage . " it ordered airlines to inspect the cargo area for fuel leaks and to replace the wing bolts if they found a leak . airlines that don't find any leak are required to conduct follow - up inspections within flight hours , the faa said . the agency said all reported fuel leaks have been caused by loose or broken wing bolts . the wings in the - also function as fuel tanks . the faa said that independent of its directive , most - owners already had inspected for fuel leaks . the inspection takes a few hours to complete . " this airworthiness directive won't have a big impact on operators or schedule , " the faa spokesman said . the spokesman said the inspection order followed reports of incidents from a half - dozen airlines , starting nov. with a japan air lines report of a fuel leak involving a corroded wing bolt . in seattle , a boeing official addressed the bolt issue at a news conference called to quell charges of aircraft defects from two of its biggest customers , japan air lines and british airways . phillip m. condit , executive vice president of boeing commercial airplane co. , said the aircraft maker " found bolts whose material did not last ( to ) the specifications that we had expected . but he added that several of the bolts could fail " and not jeopardize the airplane . " mr. condit said boeing already had fixed two specific defects identified by jal , problems with fire - prevention equipment in the and with an engine - overheating detector in the jumbo jet . boeing planned to change the design of the two systems and the test procedures for the systems " so that we will not repeat that error , " he said . the program also would include an additional mandatory hours of training for production workers , he said . mr. condit said " defect rates " on the company's planes hadn't increased , but he conceded it was possible that overall quality would improve if employees worked less overtime . for years , the new york times co. tiptoed at the edges of newspaper wars . but now the times appears to be picking its own fight . its recent purchase of the gwinnett daily news , a tiny suburban atlanta daily , gave it a toehold in one of the city's richest and fastest - growing suburbs while giving the entrenched atlanta journal and atlanta constitution , owned by cox enterprises inc. , a slap in the face . early next month , it's unveiling a redesigned paper and is switching from afternoon to morning ; it's breaking ground for a million printing plant in july . " it is obvious the new york times is closing in on atlanta -- i wouldn't be surprised if they tried to acquire other suburban newspapers in the area , " says eugene patterson , chairman and chief executive officer of the st. petersburg times and former executive editor of the atlanta papers . " i think they'd like to approach it the same way newsday is moving in on them , " he says , referring to the times mirror co. paper that's trying to increase circulation in new york city . in the atlanta suburbs , the times is taking on a formidable crew of its own refugees . the cox papers a year ago hired bill kovach , an - year times veteran who formerly headed the times's washington bureau , as its editor . he brought in as assistant managing editors dudley clendinen , a times national correspondent who had covered the south , and wendell l. rawls jr. , a free - lancer who had spent six years at the times and , before that , had won a pulitzer prize at the philadelphia inquirer . they , in turn , are taking their new competition seriously . the gwinnett daily news has " got my juices flowing , " says mr. kovach . seymour topping , editorial development director for the newspapers in the times's growing regional chain and the only times official willing to discuss the gwinnett project , downplays the battle . " if there is some kind of competition , it is between a very large institution and a very small one , " says mr. topping , a former times managing editor . mr. topping and a former times assistant managing editor , louis silverstein , whose redesign of the times more than a decade ago was one of the most successful in newspaper history , are applying their talents to the gwinnett daily . the times , which paid about million for the gwinnett paper and two smaller suburban ones , clearly means business . it signaled that early last year when a few locally famous good ol' boy atlanta newspaper columnists left the atlanta papers ( one was fired ) , apparent casualties of the new regime . it wasn't long before the columns of two of them appeared in the gwinnett daily news . in the past several months , the stakes have risen considerably . the times , whose national - edition papers for this area are printed at the atlanta papers' gwinnett plant , recently said it will build its own million printing plant , which it says will be one of the most modern in the country . in addition , the times is promising readers a bigger , brighter , fatter paper . it lured away enough cox employees that jay smith , publisher of the atlanta papers , told managers to warn workers that defectors won't be welcome back . the cox papers are firing back . yesterday , they announced plans to expand their weekly gwinnett county regional sections with zoned advertising to six days . in the past year , mr. kovach and his team have greatly increased suburban coverage , including not only hard news and features but adding such tidbits as divorces and drunken driving arrests . cox has done competitive hiring , too , picking up some valuable former employees of the gwinnett daily news . the wild card is the marietta daily journal , a suburban daily in neighboring cobb county . if the times could acquire the paper , industry people believe , it could more easily carve off the entire affluent northern crescent of the city . but publisher otis brumby jr. is said to be unwilling to sell . he wouldn't return a phone call , and his attorney wouldn't comment . for now , mr. topping says , the times is focusing on gwinnett . southdown inc. agreed to acquire moore mccormack resources inc. for a share , or about million , ending weeks of resistance , litigation and negotiation . as part of the definitive agreement between the two companies , moore mccormack will defuse its " poison - pill " takeover defense and drop its " scorched - earth " recapitalization plan . the two companies , both with construction - material and oil and gas operations , also agreed to dismiss all litigation pending between them . the suits stemmed from southdown's bid for moore mccormack . stamford , conn. - based moore mccormack wouldn't elaborate on the companies' joint announcement . the agreement , approved and recommended by moore mccormack's board , calls for southdown to acquire as many as million moore mccormack common shares through its existing tender offer , then buy the remainder of the shares for plus interest to complete the merger . on a fully - diluted basis , moore mccormack has about million shares outstanding . in new york stock exchange composite trading yesterday , moore mccormack shares closed at , down cents a share , while southdown shares closed at , up cents . " this positions us as the third - largest cement manufacturer in the u.s. , " southdown's president and chief executive officer , clarence c. comer , said of the planned acquisition . the all - cash planned acquisition also will heap a lot of debt on southdown , which just last year had to work out from under a heavy debt load after buying back about of its shares . to buy moore mccormack , " they've leveraged themselves to a degree everybody's uncomfortable with , " said steve morrow , executive vice president of memphis , tenn. - based newsouth capital management inc. , one of southdown's institutional holders . " but they've got assets they'll sell to pay that debt down . " he's right . already , mr. comer said he plans to sell moore mccormack's oil and gas operations . instead , mr. comer said , southdown will auction off those assets and will sell some of its own assets -- " real estate and things of that nature . " the company also plans to sell some high - yield debentures . " we have a pretty good history of repairing our balance sheet , " he said . by the end of this year , debt from the moore mccormack acquisition should be substantially reduced , mr. comer said . relying on public information about moore mccormack , southdown made an initial tender offer of a share in february and sweetened it to a share . then , mr. comer said , moore mccormack made information available to southdown that justified the - a - share price , including that " they had lower levels of liabilities and greater cement capacities " than southdown had thought . moore mccormack resisted southdown's advances mightily at first , even proposing the recapitalizaton plan that would have burdened moore mccormack with huge debt , making it an unattractive buy . moore mccormack's chairman , paul r. tregurtha , made merger overtures to southdown last year . although officials of the companies met three times in , those talks were " fruitless , " southdown said in its suit , because each time mr. tregurtha insisted he'd have to be chairman and chief executive of the merged company . now , except for a period of transition , mr. tregurtha and other top moore mccormack executives won't have much presence in the new southdown . " one of the benefits of the merger is the elimination of duplicate corporate overhead , " mr. comer said . he added that moore mccormack management will get " generous " severance packages . mr. tregurtha couldn't be reached for comment . if the hand popped onto the screen in a horror movie , the audience would cringe . the knuckles are red and puffy . a hideous scar extends from one finger to the wrist . there are two open sores : a small one on the pinkie and a large one on the knuckle by the middle finger . the overall appearance is a little like raw meat , yet the hand is leathery to the touch . the owner of this monstrosity is joe kocur , a pro hockey player for the detroit red wings . mr. kocur ( pronounced kohsur ) is a big bruiser of a man whose main function is unique to the north american version of his sport : not to score goals , steal the puck or make deft passes , but to batter and intimidate the foe . he is what in hockey is known as an " enforcer . " his season statistics as the red wings enter the national hockey league playoffs tomorrow : seven goals , fights . fighting in pro hockey has long been controversial . to some it is a barbaric sideshow to a game of finesse , but others see it as good , clean fun -- that just happens to fill arenas . the debate , in any case , rarely focuses on the physical results of the slugfests . cynthia lambert , a hockey writer for the detroit news , calls it " a grotesque sight . " the middle knuckle looks as though it had swelled to double or triple normal size , only to have someone slice off the top with a knife . unfortunately , the sore developed in a more painful way , the bulging skin worn away by repeated blows to opponents' teeth and helmets . the long scar dates from a particularly violent encounter . a punch to a minor - league opponent's teeth ripped a long gash down the back of mr. kocur's hand. ( the other guy was knocked out. ) . two days later , mr. kocur was in surgery as doctors tried to halt an infection spreading into his arm . infection is a constant threat , and trainers must clean mr. kocur's hand after practices and games . while playing , he wears a special glove , stitched at home by a trainer , that allows extra room for soft bandages . of course , that's of limited value in a sport where fights begin with the dropping of the gloves . traumatic arthritis , this is called . the team doctor , john finley , says mr. kocur risks permanent damage , and perhaps sooner rather than later . " i'm not saying he has arthritis now , " dr. finley says , " but it's certainly possible he could develop this from the repeated trauma . " off the ice , mr. kocur often tries to hide the hand . the problem is , it's too sore to put in a tight pocket . teammate harold snepsts , who fought mr. kocur twice while playing for another team , describes the feeling : " when your knuckles are dented in , you might just scrape a sweater and it will hurt . " the red wings are considering paying for plastic surgery on mr. kocur's hand after the season . " whatever is needed , we're going to take care of him , " says coach jacques demers . mr. kocur is reluctant . nhl careers are tenuous , and he fears that surgery could disrupt his , despite a three - year contract . besides , why repair what next season will only tear up again ? this doesn't mean he doesn't do what he can to protect his right hand . before the season began , the team sent mr. kocur and fellow hitman bob probert to a boxing trainer , emanuel steward , who helped them with their left hooks . though damage to his fist could end mr. kocur's career early , not using it would finish him even quicker . mr. kocur doesn't hide his " policeman " role . asked why he was penalized for roughing an opponent in a recent game , he replies , " i was punching him in the head . i knew i'd take a penalty , but he hit stefan { greg stefan , a goalie } . nobody hits the goalie . " the team says this kind of action protects its valuable players from abuse . " joey knows his role , " says coach demers . he cites the time a st. louis player swung his stick at a red wing not known for his fighting skills . " i told joey to go out there and tell him not to do it again , " says the coach . the message got through , if not necessarily in words . mr. kocur's function in the nhl was clear from the start . in his first full season , his penalty minutes led the league and shattered the team record . " if the fighting is there , he's going to have to answer the bell , " said brad park , his coach at the time . that he does . a - pound former saskatchewan farm boy , he has powerful arms , the right one two inches thicker than the left . scar tissue has made his right hand brick - hard . and when he winds up , says assistant coach colin campbell , " joey throws his punch from virginia . " mr. campbell makes the statement in maryland . smart opponents try to do one of two things about this weapon : grab the hand to deflect it , and tuck their heads so that if the blow does land , it hits their helmets . a helmet is not kind to a bare fist . neither ploy worked for a quebec player in a recent game , and the man left with a broken nose . in another fight , mr. kocur cut a boston opponent . though rivals have hitmen too , the team of kocur and probert may be hockey's most devastating . they fight half their matches at home in detroit , in the appropriately named joe louis arena . fans love them , especially young women . yet it could be argued that mr. kocur is a hazard to his own team . statistically , when mr. kocur ( who plays right wing ) is on the ice , the red wings are less likely to score and opponents more so . coach demers says mr. kocur's playing skills are improving , but hockey is a sport where hitmen come and go . so mr. kocur is philosophical about his fist . " you do what it takes to stay in the game , " he says . " i can't get away from doing what i do best . " asked where he would be if there were no fighting in pro hockey , he replies , " home watching it on tv . " los angeles is both the gang capital of the u.s. and home to the nation's most imaginative law - enforcement authorities when it comes to thinking up ways to fight gangs . but the creative tactics have amounted to little more than publicity gimmicks . now the police and public prosecutors finally seem to have learned that what works best is simply enforcing the law . the array of novel weapons unveiled for use against gangs in the past few years ranges from revival of a long - forgotten th century peace bond statute to a six - ton motorized battering ram . typically , the weapons have been tried a few times and then shelved , once they no longer make the news . the ram , for example , first went into action before an audience of invited reporters one night in february , with los angeles police chief daryl gates riding shotgun . he vowed to use it " over and over and over and over again . " but police picnics excluded , the device has had just a half - dozen sorties against rock houses in the three years since that night . and while it has chased some dealers out of first - floor quarters , the dealers have simply moved into apartments on higher floors or out onto the streets . as for the peace bond statute , los angeles city attorney james hahn announced in that he would begin using it to force gang members accused of threatening violence either to post a forfeitable " peace bond " of up to or go to jail . but the statute hasn't been used even once . " the circumstances under which it could be applied turned out to be rare , " explains bruce coplen , head of the gang unit in the city attorney's office . meanwhile , gangs in los angeles county have more than doubled their membership in the past five years , to what police estimate are members of about gangs . in contrast , chicago , the nation's former gang capital , is home to an estimated gang members . with more than gang - related murders recorded in the first nine weeks of the year , is on a course to eclipsing last year's record toll of . to put that level of carnage in perspective , chicago police counted gang - related murders last year . but as in many other cities , los angeles's overburdened criminal - justice system has devoted little or no attention to those who trespass , disturb the peace , carry illegal weapons or commit the array of misdemeanors that typically fills out a gang member's day . los angeles authorities have been highly creative in thinking up ways to prevent these lesser offenses that cumulatively enable gangs to turn neighborhoods into marketplaces for cocaine . in , for example , then - city attorney ( and current district attorney ) ira reiner unleashed a nuisance - abatement action against three gangs for graffiti - writing . " these gangs are just laughing at the law , " mr. reiner said at a news conference announcing the lawsuit , " and we intend to wipe the smile off their face . " prosecutors won a precedent - setting injunction against the gang - related graffiti used to mark territory and needle rival gangs . community leaders hailed the cleanup drive , but city prosecutors lost interest in it once it dropped out of the headlines and they began hitting a few problems in implementing the injunction . one of the latest -- and most inventive -- weapons against gangs was unsheathed by the city attorney's office late last year : a nuisance - abatement action aimed at the activities of members of one gang , the playboy gangster crips , one of the most violent gangs and the one with the tightest stranglehold on a neighborhood , police say . the playboy gangster crips , which dominates a lower - middle - class neighborhood near beverly hills , is an " unincorporated association " whose purpose , selling crack cocaine , is a public nuisance , the city's lawsuit contended . but los angeles county superior court judge warren deering bought the unincorporated association theory , making all proven members of the - strong playboy gangster crips parties to the lawsuit , even though only five were notified and none appeared in court . judge deering also handed down an injunction against six types of conduct - trespassing , scrawling graffiti , blocking streets or sidewalks , littering or doing anything to " annoy , harass , intimidate , threaten or molest " the residents of their turf . robert ferber , the deputy los angeles city attorney assigned to the task of enforcing the order , says the injunction will enable police to arrest gang members for conduct that would not otherwise have been a crime . now " a gang member can walk up to a citizen and say , ' i'm going to blow your head off , ' and all the cop can say is , 'i have to wait until they blow your head off , ' " mr. ferber explains . once the injuction is enforced " they won't have to wait . " those who violate the injunction could be held in contempt of court and detained for five days . or they could be jailed for up to six months under an ordinance that makes it a misdemeanor to violate a court order , mr. ferber says . though the jail terms aren't particularly long , prosecutors and police note that they could be imposed widely and frequently enough to seriously disrupt a phenomenally profitable drug trade . no arrests have been made . the police precinct encompassing the playboy gangster crips' domain faced a rotation of officers early this year and the new cops have had to start from scratch in learning who the gang members are , explains mr. coplen . many of the new ideas have given hope to the residents of vast stretches of los angeles who cower behind the barred windows and doors of their homes while the gangs rule the streets . some of the novel tactics might have worked , if the authorities had followed through with them . but as each of the crusades has collapsed , the gangs have tightened their grip on vast stretches of the city , seeming all the more invincible . the residents of the playboy gangster crips' domain , for example , live in " junglelike conditions , " mr. coplen said in a declaration filed in the latest legal campaign . shots are fired virtually every day . the neighbors have good reason to fear for their lives if they disturb the drug trade thriving on their curb , mr. coplen said . indeed , why not ? the spate of slaughter early this year forced police to consider doing just that in a more concerted way than had ever been attempted before . on every weekend evening since late february , officers , in an operation dubbed " the hammer , " have swept through south los angeles shadowing those wearing gang garb and arresting them for any reason possible , even jaywalking . many of the gang members caught up in the sweep are released within hours , but the campaign is keeping them on the run . in the first three weekends , the task force recorded arrests and impounded more than cars . and gang killings -- though still occurring at the rate of several a week -- have declined sharply since the police flooded the streets . the police campaign is no panacea . while it may help quell the most serious symptoms of the gang rampage , it makes no pretense of addressing the conditions that enable gangs to thrive -- widespread drug abuse , poor school performance , unemployment . gang members aren't always easy to identify , for example . the difficulty was illustrated recently when security officials at a los angeles amusement center stopped and frisked eight black youths because they were wearing " known gang identifiers , " only to discover that they belonged to youth for christ . but if innocent citizens have been swept up in the recent weekend anti - gang sweeps , few have complained . in the neighborhoods of south los angeles , support runs very high for " the hammer , " press accounts indicate . the beleaguered residents rate the police intrusion a vast improvement over the reign of the drug gangs . their primary concern is that the latest campaign , like many others before it , will soon wither away , leaving the gangs firmly in control and more contemptuous of the law than ever . mr. thompson is a senior writer for california lawyer magazine . kinney shoe corp. is polishing up its dull image . known as a marketer of budget - priced family shoes , the - year - old kinney , a subsidiary of f.w. woolworth co. , will soon begin sharply increasing its reliance on more expensive , all - leather shoes in its women's line . to battle growing competition from discount stores and athletic footwear , kinney is repositioning its women's shoes to appeal to the growing ranks of working women who are willing to spend freely on fashionable dress shoes , said cameron i. anderson , kinney's president and chief executive officer . he didn't disclose kinney's sales , which analysts estimate were million in . starting this fall , kinney's stores , which are mostly in malls , will jazz up the styles of women's shoes that currently comprise about of its sales . in an effort to appeal to women's demands for higher - quality shoes , by fall about of kinney's women's dress shoes will be all leather , up from , said mr. anderson . the shoes will sell for to a pair , or to higher than current prices , because of their increased leather content . " we see some potential in the women's side of the industry and we see weakness in our competitors , " mr. anderson said . in recent years , retail analysts say , sales have lagged at family shoe stores such as kinney and thom mccan shoe co. , a division of melville corp. , because of competition from discount shoe chains and from athletic shoes , which now have a share of the shoe market . " kinney , which has had great success with its foot locker and other successful athletic shoe stores , knows that they've got a problem with the family shoe stores , " says barry bryant , a retail analyst at drexel burnham lambert . " what happens to retail formats that don't change is that they deteriorate . " he added that manufacturers of name - brand athletic shoes such as adidas and reebok don't sell to family shoe stores . and these stores' profits have been eroded by the higher cost of importing shoes , the analyst said . " for a while , the low - priced foreign goods drove the low - priced shoe business , but the weak dollar has hurt that advantage . " kinney said about of its leather shoes are imported from taiwan , italy , spain and brazil . but edison brothers believes that the women's shoe business has been hurt by a lack of new styles . andrew newman , edison brothers chairman , said , " the dress shoe business has been tough this spring , " mainly because most women already have several pairs of the simple pumps that remain fashionable . genentech inc. presented the first evidence that its blood - clot dissolving drug tpa significantly reduced deaths following heart attack . however , the study left open questions about the drug's performance compared with beecham group plc's eminase , and about tpa's potential to cause bleeding in the brain . the much - awaited findings were presented over the weekend in atlanta , at a symposium held prior to the opening of the american college of cardiology annual meeting . an improved survival rate following administration of tissue plasminogen activator , or tpa , long had been theorized because of the drug's superior ability to open clogged arteries , when compared with an older drug , streptokinase . however , improved survival with tpa hadn't previously been statistically proved -- an unresolved issue that contributed to the hotly disputed delay in food and drug administration approval , which was granted in november . the study , conducted by the european cooperative study group for tpa , involved more than coronary patients , half of whom received tpa within five hours of a heart attack . the other half received an inactive substance , or placebo , for comparative purposes . of the patients who were given tpa , died in that period . of the who received the placebo , died . tpa reduced deaths by ( to , against for those in the placebo group ) for the duration of the hospital stay -- usually three to four weeks . but by three months following heart attack , tpa's improvement in patient mortality slipped to ( to of the tpa patients from in the placebo group ) . franz van de werf , of the university of leuven in belgium , the study's principal investigator , declared , " this is the best in - hospital survival ever reported in a large scale study of thrombolytic ( clot - dissolving ) agents . " harvard university cardiologist eugene braunwald said in an interview , " it's very exciting . i'm very impressed with it . a mortality of after two weeks is the lowest ever reported for acute myocardial infarction . it makes a very strong case for tpa . " genentech stock , which had traded at to a share in early march , closed friday in new york stock exchange composite trading at , down cents , in a broadly lower market . however , some securities analysts who had been expecting genentech to report a lasting improvement in coronary survival -- or better -- seemed slightly deflated by the figures in the range . no comparable one - year survival data are yet available for tpa . " it doesn't seem as impressive as i had expected and had been led by the company to expect . they led analysts to believe it was better than both streptokinase and eminase , " mr. weisbrod added . also , tpa's ability to cause intracranial hemorrhage -- or bleeding into the brain , a potentially fatal complication -- was raised again . the incidence of such side effects in the european study was -- much higher than the incidence listed on the label for doses at the currently accepted - milligram level . this incidence matches that experienced in the u.s. when patients received the old dose of milligrams , although all the european patients received the - milligram dose , dr. braunwald said . " i think a intracranial hemorrhage rate sounds awful high . i'd be concerned about that , " said jeffrey anderson , chief of cardiology at latter day saints hospital in salt lake city . referring to the european study , dr. braunwald suggested statistical variations may appear much wider in such a relatively small group , and maintained that the true risk is " about one half of . " in general , analysts believe that tpa's short - term survival benefits will become a potent marketing tool in the hands of south san francisco , calif. - based genentech's aggressive sales force -- at least for the next two years . but several analysts said that tpa's longer - term performance so far doesn't give it clear superiority over beecham's eminase , which is expected to make its u.s. debut in . " the bottom line is that there's going to be a very close horse race between tpa and eminase " in the s , prudential - bache's mr. weisbrod said . cooper development co. said it received a stock - swap merger offer from its sister company , cooper cos . if the transaction is completed , cooper development will be absorbed into cooper cos . under the proposal , which had been expected , holders of cooper development would receive for each four common shares one share of cooper cos. senior exchangeable redeemable preferred stock with a face value of . with approximately million cooper development shares outstanding , the transaction has an indicated face value of million . the preferred stock hasn't been registered and isn't traded publicly , the company said , so a market value of the shares isn't available . the company said the shares earn cumulative annual dividends of in cash or additional shares of the preferred . the proposal is subject , among other things , to approval by cooper development's outside directors and shareholders . cooper development is a research and development concern whose main asset is its holding of similar cooper cos. shares obtained in an asset swap last year . cooper cos. , based in palo alto , calif. , is a maker of health care products . both companies have the same chairman , parker g. montgomery , and both were formed when he liquidated the former cooper laboratories . cooper cos. shares fell cents in trading on the new york stock exchange , closing at . cooper development said that , if the proposal is accepted , it will supersede an earlier announced special dividend it had planned . under that plan , cooper development would pay its holders one cooper cos. preferred share for each five cooper development common shares held . the dividend will go forward if the new offer is rejected , cooper development said . coca - cola co.'s major french bottler , pernod - ricard s.a. , said it rejected the soft - drink company's latest offer to buy back the rights to sell coca - cola in france and is holding out for a better one . at a news conference in paris , pernod - ricard's chairman , patrick ricard , didn't disclose specifics about how much coca - cola had offered . coca - cola wouldn't comment on the statements . the move appeared to be some negotiating hardball by pernod - ricard , which accounts for about of coca - cola's sales in france . " i think there's a little bit of the jilted - lover syndrome at work here , " said martin romm , an analyst with first boston corp . " i think pernod - ricard is telling coca - cola that a divorce is going to cost them . " as reported , coca - cola is trying to buy out the french bottler because of disagreements over how to manage the business . coca - cola is believed to have been urging pernod - ricard to invest more heavily than it wanted to in the french bottling business . per - capita consumption of soft drinks in france lags far behind that in the u.s. or most other major european countries . mr. romm said he believes coca - cola will eventually get its way . he estimates the soft - drink giant may be offering as much as million for the french bottling business , which had estimated sales in of million . the attempted transaction is part of an effort by coca - cola to restructure its bottling operations world - wide to boost soft - drink sales . citizens here have embraced few issues like the effort to save venerable tiger stadium from a wrecker's ball . literally . on april , hundreds of detroit tigers fans plan to give their crumbling ballpark a big hug on its th birthday . beyond expending affection on an inanimate object , they hope to sway mayor coleman a. young from his plans for a million techno - dome , featuring luxury box seats and a retractable roof . " people love tiger stadium , there's true affection here , " says frank rashid , a college english teacher who helped found the tiger stadium fan club seven months ago . " destroying the old place would ruin baseball and ruin the city's image , and anybody thinking about it will face strong opposition . " indeed , a recent detroit free press poll found of detroit - area residents would rather renovate tiger stadium than build something new . radio station wcsx - fm is sponsoring a petition drive hoping to get signatures . meanwhile , the tiger stadium fan club says it has supporters and about in contributions . organizers know exactly how many people they will need to ring tiger stadium for the great embrace : " at least , with to volunteers to coordinate everybody , " mr. rashid says . " we don't want people to think of this as an unnatural act , " mr. rashid notes . a few strains of " take me out to the ball game " and maybe " happy birthday , " and the public display of affection will end . none of this is impressing mayor young . " we're rebuilding a new city and there comes a time when we need a new stadium , " mr. young insisted at a press conference . he later told reporters , " it's obvious the damn thing is falling down . " tiger stadium lovers don't deny major renovations are needed . tigers owner tom monaghan says the repair bill could hit million , although critics say that estimate could be influenced by the team's desire to sell more , and higher - priced , tickets . the issue " needs some solid thinking , " says team president jim campbell , " and all of the hugging and squeezing in the world won't make the place any bigger . " in the old depression movies , there is usually a scene where the harassed breadwinner turns to his wife ( invariably irene dunne ) and says : " if we could only get a few bucks ahead . " john rothchild , a former editor at the washington monthly and a prolific freelance business writer , has written a funny book about the problems that develop once you get those extra bucks . mr. rothchild took his precious savings and spent a year trying to discover where to invest them . his account of that adventure , " a fool and his money " ( viking , pages , ) , starts with the elemental certificates of deposit and takes us into the most arcane areas of commodity spreads and option strategies . throughout , mr. rothchild has a flair for the ironic : " mr . nemerov was a little bowling ball of a man with a mustache . he explained he had been a stockbroker for several months , having drifted over from men's wear and before that from women's wear . " he explores the intricacies of the auction market , the exotic nature of options , the politics of the institutional analytical game , the agony of commodities and the ecstasy of inside information . at best , investors break even . mr. rothchild's problem is that he is vague about what his investment goals are . the fact that after consulting the written wisdom of gerald loeb and ben graham , he jumps into crapshoot - style investments suggests that what he wanted all along was a fast buck . mr. rothchild notes that his broker did not make him buy the low - priced stock . he insisted on buying it himself . and , as far as he's concerned , the complaint against brokers -- that they " churn " their accounts -- is unfounded . he recounts that he always called the broker , wondering why something hadn't moved and impatiently suggesting the switch into something more profitable . mr. rothchild needs a steadier hand . there is success out there in the canyons -- we could come up with testimonials -- for those who have a game plan . atlantic city is miles down the turnpike . in one of his reflective sequences , mr. rothchild is reminded of a relative who held general foods for years through five market cycles with all the accompanying opinion changes . the original had become . so much for tape watching and guru signals . there is the frustration of watching a two - dollar cheapie slip lower on the day the dow is up points . there is the superior attitude of the buy - side analyst as she divvies up the votes for all the sell - side analysts who court her favor . there is the space - age world of the index fund where the computer does business with humans and trades markets around the globe around the clock . mr. rothchild is especially taken with what the " smart money " is doing . his purchase of the low - priced cheapie came only after he heard it was favored by gabelli the great . and he gets to meet some of the more famous gurus . there is a poolside chat with bob prechter who was not making waves at the time . there is an extensive conversation with al frank of the prudent speculator who lost a lot of weight and a lot of money after the crash . and most intriguing of all is arch crawford who measures the market by the position of the planets and proved to be mr. rothchild's most successful savant . also on mr. rothchild's odyssey is the chicago commodity pits , where surplus is a dirty concept and the investment maxim is : " the worse things get , the better their futures . " the magic word in those parts is " hedge . " mr. rothchild asks what makes the wild - eyed world of futures respectable , what separates it from pure speculation , and the answer is always that it allows investors to hedge . like diogenes , mr. rothchild looks in vain for a true hedger but the chap was always one step away . of course , no investment book would be complete without some reference to the crash and , here again , the author finds that there is comedy in chaos . sitting in a local brokerage house , he observes that the first points down cast a pall of gloom . but as the retreat became a rout , the mood turned cheery . " it was the enormity that took them beyond shock into a kind of idiot's bemusement . mr. rothchild left at that juncture . when it was down points , they were probably doing the mambo . " a fool and his money " is recommended for tedious trips to the opposite coast . it reminds me , in a way , of the film " wall street " -- fast - moving , entertaining , but not truly indicative of the investment process . mr. wachtel is a senior vice president of prudential bache securities . kevex corp. said it agreed to be acquired by britain's vg instruments plc , for a share , or about million . kevex , a maker of material analysis instruments , has been the target of a hostile tender offer by another british concern , uei plc , which last month bid a share for kevex . in a statement yesterday , uei said its chairman , peter michael , had proposed a sweetened - a - share friendly offer during talks with kevex last weekend . but the offer " could not be satisfactority concluded , " in part due to the lack of adequate assurances about continuity of kevex's senior management , uei said . the berkshire , england - based electronics and tv production equipment maker concluded that even for a friendly takeover , " a price of per share is just too high . " in national over - the - counter trading yesterday , kevex closed at , up . kevex said three major shareholders , who together hold about of its shares , have granted options to vg to acquire their holdings . one of the three is richard frankel , kevex's chief executive officer . previously , mr. frankel said kevex became a takeover target because of certain x - ray spectrometry technology and patents it acquired last year . he said sales in that segment of the company's business have more than doubled since . shamir arrived in washington , saying he had new ideas for mideast peace . the israeli prime minister , at the start of a four - day official visit , indicated that he wouldn't respond directly to a u.s. plan for talks with the arabs . shultz , who meets with shamir today , is expected to use friendly persuasion , rather than blunt pressure , to try to induce israel to accept the u.s. plan , which is aimed at ending unrest in the occupied west bank and gaza strip . moreover , the secretary of state has dropped the previous u.s. insistence that israel and the arabs either accept or reject the american peace plan this week . israel imposed a nightly curfew on the gaza strip to try to contain unrest . in the west bank , at least arabs were wounded by israeli gunfire . panamanian riot police clashed with public employees in the streets of panama city as strikes and demonstrations were staged to protest the noriega regime's failure to meet its payroll obligations . there weren't any reports of injuries or arrests . the government has said it doesn't have the funds to meet this week's million payroll . the pentagon sent about marine and air force security personnel to panama . meanwhile , the u.s. hinted that it may be reassessing its position on seeking extradition of noriega on drug charges if the panamanian military leader flees to spain . gorbachev toured belgrade at the start of a tour of yugoslavia , which has tested some of the economic changes the soviet official supports . gorbachev , the first kremlin leader to visit yugoslavia since tito's death in , acknowledged soviet ethnic problems , but said protesters hadn't challenged the government's authority . cuomo indicated he probably won't back a democratic presidential candidate until after the final june primaries . the new york governor also dismissed suggestions that he had been leaning toward dukakis , and denied rumors that he is withholding an endorsement in the hope that the party would turn to him . bush was expected to win today's gop primary in illinois , with polls giving the vice president a wide lead over rival dole . among the democrats , surveys showed that jackson and simon were about even . dukakis was expected to place third . the move came on an - vote in the senate . thirty - one countries have signed the treaty , reached in montreal last september , to curb the global use of chlorofluorocarbons . the senate approved a provision that would reserve conditional visas each year for immigrants who invest at least million in a business in the u.s. that creates jobs for or more american citizens or legal residents . critics said the measure , cleared - , would put u.s. citizenships up for sale . rep. peter rodino yielded to pressure from some minority constituents and said he won't seek a st term in congress . the - year - old new jersey democrat , who headed the house's impeachment hearings of nixon , said he would retire in january . south africa's foreign minister said a peace plan proposed by angola didn't include a timetable for the withdrawal of about cuban troops in that country . roelof botha , saying such a schedule was crucial , made his remarks after meeting in geneva with assistant secretary of state crocker . pressure mounted on pakistan to sign an accord aimed at securing the withdrawal of about soviet troops from neighboring afghanistan , but islamabad appeared to be sticking to its demand for a new government in kabul to oversee the pullout . the plo's envoy to the u.n. declared that he would defy friday's u.s. order to close the organization's mission by next monday . zehdi labib terzi , citing the plo's accreditation to the u.n. , said u.s. authorities would have to use force to close the mission . meese ordered the closure friday under a anti - terrorism law . reagan contended that his space - based antimissile system has progressed more rapidly than previously anticipated , and he criticized congress for being " irresponsible " by cutting spending for the program . the president's comments came as part of an administration drive aimed at assuring the five - year - old program's survival . iraqi missiles struck tehran , and baghdad's jets launched raids on six iranian towns . an official said the attacks were in retaliation for iran's violation sunday of an unofficial truce against civilian targets . iran shelled baghdad and threatened to turn the iraqi capital into an " inferno . " the remarks were made at the start of the new york congressman's corruption trial . meese's attorney denied any involvement by the attorney general . italy's president cossiga began three days of political consultations aimed at finding a successor to prime minister goria , who stepped down last week after eight months in office . cossiga faces some difficulties since the socialists , the second largest party in rome's five - party government , have threatened to quit the coalition . colombia's ruling party lost municipal elections in bogota and medellin , the south american country's two biggest cities , to the opposition conservatives . despite the setback in sunday's balloting , the liberals remain colombia's main political party . a new study found that the accelerating move by organization of petroleum exporting countries into u.s. and european refining could be hazardous to oil companies' profits . " it seems clear that new investors entering the currently barely - profitable refining business will be bad for the current participants , " says the study , to be released today in london by the phillips & drew group of union bank of switzerland . but what might be bad for oil refiners could be good for oil consumers . although the big london brokerage firm's study doesn't make that point explicitly , the results suggest that increased competition in the refining and marketing sector , or " downstream , " could hold fuel prices down even if crude oil costs rise . " refining margins are expected to remain low over the next five years , " geoffrey s. pyne , a phillips & drew oil - market analyst and one of the authors of the study , said in an interview . opec's downstream push does have attractions . for exporters scrambling to sell crude in a world awash with oil , the refining investments can provide " captive " markets . and for refiners coping with surplus refining capacity world - wide , the ventures promise additional financing , fuller use of their facilities , and assured supplies of competitively priced crude . several u.s. consulting firms -- including cambridge energy research associates , petroleum finance co. , and bonner & moore market consultants -- have suggested the trend marks the " re - integration " of the industry . major oil companies controlled the bulk of the world's petroleum from well - head to service - station pump until opec governments nationalized their oil in the s . according to the phillips & drew study , the return to integration via opec will be " painful " for the industry and risky for oil companies . " downstream earnings will no longer behave counter - cyclically to upstream , and opec unity will be undermined with consequent risk to the crude price , " it says . also , the study notes , the opec nations' refining involvement will " delay the hoped - for recovery in downstream profitability as there will be no economic incentive to close surplus capacity . " advertising : unions representing actors in tv and radio commercials set a march strike date in a contract dispute with advertisers and agencies . a strike would affect commercials only , though other kinds of tv production are already being hurt by the writers guild walkout. . . . dreyfus corp. , the financial services firm , chose new york agency levine , huntley , schmidt & beaver to develop a tv image campaign . the budget wasn't disclosed . to take the dreyfus account , levine huntley had to resign a " special assignment " it got last month from chase manhattan bank's credit - card division . videos eos : warner bros.' home - video unit signed an agreement with weintraub entertainment group ltd. for overseas distribution of films from weintraub's movie library . the warner communications inc. unit will sell videos of " amadeus , " " the deer hunter " and other titles in the united kingdom , france , spain , japan , benelux , australia and new zealand . terms weren't disclosed . who's news : brigitte weeks was named editor - in - chief of book - of - the - month club inc. , a unit of time inc. , effective may . the job has been vacant since nancy evans left to become president and publisher of doubleday more than a year ago . corporate - profit forecasts are scattered all over the lot . blue chip economic indicators , a sedona , ariz. , newsletter , says its monthly poll of analysts shows " a near record " diversity of opinion about corporate profits . while the march consensus projects a rise in pretax profits , individual predictions range from prudential - bache securities inc.'s increase to the ucla business forecast's decline . " there's a huge discrepancy in the economic forecasts , " says mickey levy , chief economist of first fidelity bancorp . ucla's profit outlook , for example , assumes a recession this year while prudential - bache predicts a fairly healthy economy . also confusing the picture are last year's banking - industry losses and overseas profits generated by foreign currency translations , says jerry jordan , chief economist of first interstate bank , los angeles . at standard & poor's corp. , " economists are looking for flat earnings " but analysts see gains , says arnold kaufman , editor of s&p's outlook . the hemline question has stores going both long and short . in new york , bloomingdale's display windows feature skirts at four lengths : thigh - high , above the knee , at the knee and just above the ankle . noting that hemline confusion hurt fall sales , tedford marlow of marshall field's , chicago , says , " it's a very fickle environment right now . " he expects most spring sales to be clustered around knee length . a few stores are betting heavily on higher hemlines . henri bendel , new york , says of its line will be short for the spring . in southern california , lee hogan cass of broadway department stores sees the spring look as " totally short . " but even these stores are eyeing lower hemlines for fall . bendel's is now testing the longer look . broadway says its fall inventory will include short hemlines , to long lengths and to pants . fax machine sales zoom as prices drop and distribution improves . some facsimile machines were installed in the u.s. last year , up from about in . the outlook for is also rosy , with sales likely to jump to , says donald ryan of cap international inc. , marshfield , mass . " by the early s , you will have well over a million placements a year for a number of years , " he says . that makes fax machines affordable to small businesses and individuals . " the low - end market seems to be fueling the growth , " says joseph cosgrove of sharp electronics corp. , mahwah , n.j. , which last year created a division to focus on the home - office market . fax machines are getting easier to buy , says mr. ryan , noting a shift from company salesmen to office - equipment dealers and retail stores . the growth spawns other businesses . u.s. fax inc. , philadelphia , sells a fax network to help solve problems such as busy signals and traffic management . a thousand times no : to prepare new brokers for the rejection of making cold calls , dain bosworth inc. , minneapolis , has trainees phoning to solicit funds for charitable organizations . in the past months they've raised about . poor returns are plaguing the u.s. census bureau's economic census . due feb. , , only of the million forms were returned by last month . to prod businesses , the census bureau sends out reminders saying , " don't hold out . " the healthiest u.s. city is richmond , va. , says health magazine , citing medical facilities , clean air , recreation areas and low cancer rates . six cities -- boston , honolulu , milwaukee , minneapolis - st . paul , rochester and scranton/wilkes - barre -- tied for second . suffer a heart attack , and you'll get an advance payment of of your death benefit under a new jackson national life insurance co. policy that covers six catastrophic illnesses . if confined to a nursing home for at least six months , you'll get of your death benefit paid each month until it's gone under a first penn - pacific life insurance co. policy . the national travelers life co. version also pays per month and will cover home care to keep the patient out of a long - term care facility . it's " a death benefit you don't have to die to get , " says a jackson national spokesman . insurers hope these pre - death benefits will make life insurance more marketable to younger people and singles . but questions remain , including whether such a payment would be taxable , since it is neither a true death benefit nor an accident or health benefit , says joseph belth , a professor at indiana university . the additional cost : between and of usual life insurance policy premiums , insurers say . some of business schools teach ethics , but only of graduate programs and of undergraduate programs teach a separate course on the topic , says a survey by the ethics resource center , washington , d.c . the alberta government said alberta newsprint co. , a newly formed , closely held concern , will build a million canadian dollar ( million ) newsprint mill near whitecourt , about miles northwest of here . the mill , which will be constructed with government assistance , will have a capacity to produce metric tons of newsprint annually , beginning in . it will provide jobs and will be the first newsprint mill in alberta , a spokeswoman for premier donald getty said . the government spokeswoman said alberta will guarantee as much as million dollars of loans for the mill and provide million dollars for road and rail improvements in the area . the mill has contracts for tons annually of its expected output . a metric ton is equal to about pounds . ronald stern , managing director of alberta newsprint , said the company is majority - owned by a group of western canadian companies . though some of the plant's output will be aimed at u.s. and other export markets , mr. stern said he doesn't think the government assistance will " create a problem " with regard to international trade laws . he added that he expects the market will be able to absorb the extra newsprint output , " as long as the economy is reasonable . " the belgians may be famous for their restaurants , but it's their supermarkets that have become the darlings of the stock market . belgian retailers gb - inno - bm s.a. and delhaize " le lion " s.a. have soared in trading in brussels in recent days , prompting speculation that one or both of them could be subject to a takeover bid . the trading in the two retailers was part of a buying spree by investors who drove up the prices of most belgian stocks , hoping some other big belgian company could meet the same fate as societe generale de belgique s.a . generale de belgique is the subject of an extended takeover fight between italian financier carlo de benedetti and a franco - belgian group led by cie. financiere de suez . not only did the big belgian holding company's price quadruple in the course of the two - month fight , but the developments alerted much of the world that belgian companies are undervalued and not very well protected from hostile takeovers . belgium has no disclosure rules , so investors can accumulate stakes anonymously . brokers said gb has prompted the most serious buying , with delhaize riding along on the speculative wave . gb's share price jumped about in the past week and monday . though it declined slightly on profit - taking tuesday , closing down at belgian francs ( ) , brokers said buying interest remained strong . delhaize jumped to , up about from a week ago . brokers said buyers seemed purely speculative and tended to be in relatively small blocks . the stock is still considered undervalued in relation to its very profitable u.s. food lion inc. subsidiary , which is about -owned by delhaize . chairman guy beckers said he wasn't overly concerned about the stock activity and explained the interest in delhaize stocks by the influx of liquidity from investors who sold generale de belgique stock . " we have an important core of friendly shareholders , " said mr. beckers . " i don't think its anything to be worried about . " brokers said the buying of gb has been more systematic and in larger blocks . the company , with interests in supermarkets , speciality stores and fast food , is one of europe's best - placed retailers for the relaxation of european trade barriers scheduled for . moreover , gb has million shares in authorized capital that it could issue to protect itself . " we are watching the situation closely , " a spokesman said . tandy corp. plans to unveil next month the first copy of international business machines corp.'s new personal system/ computer models , according to industry observers and sources close to the company . the move to introduce the first " clone " of ibm's second generation personal computers may prompt the clearest test yet of how aggressively ibm will protect the proprietary designs in the computers . it will also underscore tandy's emergence in the past year as one of the biggest makers of ibm - compatible computers . michele preston , an analyst with salomon brothers inc. , said she expects fort worth , texas - based tandy to introduce the machine in april . ms. preston said she expects the tandy model will use a chip set from intel corp. , santa clara , calif. , that mimics the basic operations of the ibm computer . however , a former tandy employee , who asked not to be identified , said the key chip set would be made by chips & technologies inc. , a milpitas , calif. , company that makes chips used by a variety of clone makers to copy ibm's first generation personal computer line . ed juge , tandy's director of market planning , wouldn't comment on the assertions that the company will introduce a ps/ clone . " it's no secret that we and lots of other firms are working on it , but i can't say when we might have something , " he said . " it could be next week , it could be next month , it could be many months from now . " in composite new york stock exchange trading yesterday , tandy shares closed at , off cents . ibm introduced its ps/ line last april , partially in a bid to regain market share lost to lower - cost clones . ibm freely allowed other makers to copy the models in its pc line , started in , to help establish its design in the face of competition from apple computer inc . but inexpensive copies ate into ibm's sales , and with the ps/ line ibm indicated it would guard its inventions more closely . the most important change in the new line is what ibm calls the " micro channel " -- the newly designed electronic pathway between parts of the computer , such as the display and memory storage . ibm declined to comment on the expected tandy computer . small clone - makers are hesitant to take on the kind of expensive legal battle that may be involved . ibm , for its part , has said it will license its new designs to makers of its choosing . " tandy is the only firm that has the guts to do it , " said tim bajarin , vice president at creative strategies , a market research firm in santa clara , calif . " they are confident of their ( computers ) and confident of their corporate legal power . " although mr. bajarin expects tandy to be first with a ps/ clone , he said he isn't sure whether they will be able to produce it by april . " once they do show it , it's just a matter of submitting it to ibm to see what designs are infringed . " ms. preston said tandy may side - step legal difficulties faced by other firms because it has cross - licensing agreements with ibm. mr. juge of tandy said the company does have such agreements " but whether they would cover the micro channel , i don't know . " an intel spokeswoman didn't immediately return a phone call seeking comment . a chips & technologies spokesman said the company " continues to work with tandy " but wouldn't discuss when a ps/ copy might be introduced . " tandy being the first with a ps/ copy makes a lot of sense to me , " said richard shaffer , editor of an industry newsletter , the computer letter . " tandy has been trying to reposition itself as a technology leader and this would give a big boost to that image . " though tandy is expected to unveil the ps/ clone in april , observers said the firm wouldn't be able to sell the machines in large quantities until late in the second quarter at the earliest . the federal reserve bank of dallas abruptly discontinued issuing weekly financial reports on several large texas banks a week after one major bank showed a substantial drop in deposits . in a statement , the dallas fed said it decided to discontinue the reports at the request of the individual institutions . the reports , which had been issued for many years , included data on loans , investments and deposits at four banks here and three others in fort worth , texas . the fed's announcement comes one week after a report showed that first republicbank corp.'s banking unit here suffered an unusually steep drop in deposits of million , or about , over five banking days in late february . first republicbank , which isn't related to first republic bancorp , san francisco , is texas's largest banking company . it is suffering huge loan losses from souring real estate loans , and is the focus of increased monitoring by federal regulators who have braced themselves for a possible rescue . the unit , first republicbank dallas , also has been hit with a rash of withdrawals by both individual and corporate customers that have grown uneasy about the future of the bank and its parent company . first republicbank confirmed that it asked the dallas fed to end the weekly reports , but declined to say the reports came to an end at its instigation . " we believe that the detailed weekly reports on deposits don't provide a sufficiently broad , accurate picture of the diverse sources of funding available to any banking institution , " the bank said . in its statement , the dallas fed said it decided to end the reports because " all participating financial institutions have requested that we no longer provide this service . " the reports were prompted years ago by a request from the banks , the fed said . a fed official added that regulators talked recently to each of the banks and found " a consensus " among them that the reports " were no longer in everybody's best interests . " three of the banks , however , said yesterday that they didn't initiate requests to stop the reports . " we were advised that it was being discontinued " by the fed , said a spokeswoman for texas american bancshares inc. , fort worth . mcdonnell douglas corp. completed the second step of a top management reorganization by naming gerald a. johnston as president . mr. johnston , vice president and general manager of mcdonnell douglas astronautics co. in huntington beach , calif. , was chosen over a host of higher ranking executives . securities analysts suggested his years of experience in the unit responsible for work in laser technology , space defense weapons and other space - related projects may signal the new management's intention to focus more heavily on those areas of business . mr. johnston succeeds john f. mcdonnell , son of the company's founder , who recently was named chairman and chief executive officer following the retirement of his cousin , sanford n. mcdonnell . john mcdonnell , years old , and mr. johnston , , are expected to lead the st. louis - based aerospace and information systems concern into the st century . they take over at a time when defense cutbacks are squeezing company profits and competition is increasing in two important business areas , the manufacture of commercial aircraft and expendable space launch vehicles . in , the company earned million , or a share , compared with million , or a share , in . the result included a one - time pre - tax gain of million and pretax write - offs of million . the company received a big boost in december when it was awarded a billion - year contract to design and build a major portion of the u.s.'s planned space station . and , it won a major competition in a joint venture with general dynamics to make the advanced tactical aircraft , a new carrier - based bomber aircraft , for the navy . the contract has a value of billion , a spokesman said . john mcdonnell said mr. johnston was selected for the no. position for his " exceptional ability " to work with customers and other managers . " he ( has ) a clear understanding of the kinds of changes that will have to be made if mcdonnell douglas is to remain in the forefront of the aerospace and informations systems industries , " mr. mcdonnell said . he became vice president and general manager of the astronautics company in . the impending marriage of two of the nation's largest department store operators promises to alter the dynamics of the retailing industry . already , the proposed combination is sparking fear among other department stores and apparel manufacturers who recognize that a macy - federated entity will be a fierce competitor . the acquisition also is expected to escalate the merger mania in retailing . r.h. macy & co.'s merchandising savvy coupled with federated department stores inc.'s size and regional strength should forge a retailing powerhouse . " it will make life more difficult " for both department stores and specialty retailers in markets from new york and atlanta to the west coast , says carl steidtmann , chief economist at the management horizons retail consulting unit of price waterhouse , the accounting firm . adds executive recruiter ann hunt , who specializes in placing retail managers , " there will once again be an unquestioned premier department store chain in the u.s . " one of the weaknesses of cincinnati - based federated is that it has concentrated on controlling inventory at the expense of innovative fashions . that approach has been the hallmark of macy chairman edward s. finkelstein , the - year - old former fabrics buyer who has led the closely held retailer since . he has been a turnaround artist at macy , transforming the once - threatened herald square store in manhattan into a canny rival of federated's prize bloomingdale's . " macy's responds to customers' desires , " says deborah cornwall , a senior vice president at harbridge house consultants , cambridge , mass . " it's willing to take risks and that should improve federated . " it also threatens retailers who previously haven't competed directly with macy . in southern california , for example , may department stores co.'s j. w. robinson's and carter hawley hale stores inc.'s broadway stores would have to face a beefed - up bullock's , the federated division . " anyone who has to start competing with macy's should be terrified , " says a former federated executive . and that includes not just retailers but apparel makers . while macy hasn't been that successful in selling its private label to other retailers , it would have federated's stores as built - in customers . in addition , macy would be able to increase orders in the critical far east , where huge supplies of apparel are manufactured , and likely gain a price advantage over competitors . " this gives a retailer unparalleled leverage against independent apparel makers , " says alan millstein , who publishes a fashion - business newsletter . " it's already sending shudders of fear down seventh avenue . " the proposed combination is triggering shudders of another sort , as well : the fear of additional takeovers . retailers are attractive targets because their stock prices are depressed , many own considerable amounts of lucrative real estate and they have relatively low debt and steady cash flows . real estate developers , in particular , are seen as the most threatening gobblers . and the takeover activity will undoubtedly attract foreign buyers " all the big retailers are vulnerable , " believes john landschulz , a retail analyst at mesirow & co. , chicago . indeed , should campeau corp. lose its bid for federated , it's expected to seek another target . sources close to the toronto - based developer said it has a short list of department store companies that would be a good fit with its allied stores corp. unit . u.s. real estate developers say that , given the choice , they'd prefer to see federated acquired by macy rather than campeau . some developers have expressed concern that if campeau wins out , a foreign company will have a leg up on u.s. developers who want to sign leases with federated stores . by contrast , " everyone does business with macy's and there's a general feeling of comfort , " said a major owner of shopping centers . considered especially vulnerable to takeovers are may department stores and j.c. penney co. also likely targets because of their lackluster performance are zayre corp. and dayton hudson corp. , says kurt barnard , publisher of retail marketing report , a trade newsletter . he also predicts a shakeout among specialty retailers , expected to be among the hardest - hit by the competitive muscle of a combined macy and federated . to be sure , the combination would demand substantial cost - cutting and other efficiencies to reduce heavy debt and produce profits . and while it's eager to gain a bloomingdale's -- giving it a firmer market for pricey designer fashions -- macy will spin off federated's five non - department store units and is likely to shed some department store divisions . for possible antitrust reasons , macy is likely to sell rich's in atlanta , abraham & straus in new york , and maybe foley's in texas . perhaps the biggest challenge will be merging the two diverse cultures . " at macy's , finkelstein is the architect . but at federated , you have so many merchant princes , " says ms. hunt of korn/ferry international inc . " they're both very dominant cultures . " prices of over - the - counter stocks surged yesterday on strong volume as investors again came into the otc market for industrial stocks of all sizes . investor interest has been shifting from large exchange - listed issues to smaller otc stocks for several weeks . yesterday the trend accelerated as the dow jones industrials , which measure the largest exchange - listed blue chips , were flat during the otc buying spree . by the close , the nasdaq index of the largest otc issues had climbed , or points , to , while the nasdaq industrial index , which measures all nasdaq non - financial issues , had also climbed more than , or points , to . nasdaq volume has been burgeoning daily , and yesterday hit million shares . while advancing issues outnumbered decliners to , heavy buying among yesterday's most popular stocks resulted in million shares changing hands at higher prices , while only million fell . analysts say institutional investors are shopping for undiscovered values among the nasdaq issues . and while institutions until the past month or so stayed away from the smallest issues for fear they would get stuck in an illiquid stock , or because the cost of research outweighed benefits of small purchases in a single issue , things have suddenly changed , analysts say . much of that data , he notes , is available today electronically . most desired in the current otc treasure hunt , traders report , are companies with earnings turnarounds not reflected in their stock price . yesterday , nike inc. , the big otc - traded sports - shoe concern , climbed / to / , following a disclosure on the dow jones professional investor report that it is comfortable with analysts' earnings estimates in a range of cents to cents a share for its fiscal third quarter ended feb. . nike reported earnings of cents a share for the year - earlier period . qvc network , a - hour home television shopping issue , said yesterday it expects fiscal sales of million to million , compared with the million posted for its fiscal year ended last jan. . the stock jumped / to , and has been rising for several days . two months ago , qvc was at / a share . typically , yesterday , boston digital , a milford , mass. , concern with market value of about million , rose / to / , with about shares traded . the stock is up from / two months ago . similarly , auto trol technology , a million market - value denver firm that makes systems for computer - aided drafting , rose / to / . its losses turned into profits for the quarter ended dec. . other small technology concerns with rising earnings that gained in price yesterday included impact systems , up / to / ; c cor electronics , up / to / ; technical communications , up / to / ; vikonics , an million market - value concern that makes computer security systems and last month showed a strong gain in earnings for its most recent quarter , rose / to . the hunt evolved from investor interest in middle - size technology concerns with rising earnings , which started several weeks ago . some stocks of this size continue to rise . among yesterday's middle - size gainers were komag , a million market value electronics concern , which rose / to / ; dycom industries , with about million in market capital , up / to / , and tempest technologies , a million computer - software concern , which gained / to / . the bulls and bears battled to a nearstalemate again yesterday , edging the dow jones industrial average up less than one point . the average closed at , up , on volume of million shares , almost identical to tuesday's million . advancing issues outpaced decliners - . the average fell points tuesday . an intensified case of takeover fever , marked by a flurry of rumors naming various companies as potential takeover targets , sent share prices higher in the morning . but profit - taking in the afternoon cooled things off , and some analysts are beginning to suggest that current stock prices reflect unwarranted optimism . " we're back to where we were last summer , when everybody was chasing stories , " william king , a senior trader at nikko securities , said . " everybody's betting on asset sales at higher prices , rather than some fundamental change in what a company is doing . " mr. king said he worries that some external shock , such as a rise in interest rates or a further decline in the dollar , could set off a sharp downward move in the stock market . with stocks currently trading at about twice their book value , mr. king asked , " what kind of shock absorber is there when you're at that level ? " eugene peroni , a technical analyst at janney montgomery scott in philadelphia , agreed that the stock market " is showing some momentary reckless patterns . " but he said that , while investors may be too optimistic about the dow jones industrials , there are still plenty of attractive secondary issues . " as we're reaching for on the dow , there's too much talk about big - number accomplishments , like hitting or , " he said . " that's somewhat worrisome as far as the dow is concerned . but there's an excellent array of stocks out there if you're quite selective . " he said the stocks he likes are recognizable names that have underperfomed the market for months or even years . and he said many of them are in sectors that already have seen a successful merger or acquisition , such as retailing , pharmaceuticals and chemicals . in particular , he mentioned maytag in the appliances area , cyclops in steel and family dollar stores in retailing . but he cautioned that the growing bullish sentiment among investors could be dangerous . investors' emotions and psychology are changing , and there's more of a desire now to chase after some of these rally moves . " hanging over everything , meanwhile , is the possibility of bad news for the economy . " if there's any disturbance to the economic or monetary outlooks -- if the interest - rate outlook begins to look less rosy , for example -- that would certainly take a negative bite out of the market , " mr. peroni said . federated department stores lost to / . the company agreed to be acquired by r.h. macy , which will pay a share for about of federated's shares outstanding . shares that aren't purchased will be exchanged for new shares of the combined company . meanwhile , rival suitor campeau said it would proceed with its - a - share offer , repeating its assertion that the macy's bid is a " highly speculative and illusory twotier offer . " a new bid for j.p. stevens boosted that company's shares / to / . west point - pepperell said late tuesday it would offer a share for the textile concern . a stevens management group is offering about a share . xerox climbed / to / on heavy volume amid a rash of rumors . wall street gossip variously had the company planning a restructuring that might involve the sale of all or part of its financial services operations ; plotting some kind of deal with a japanese company ; or becoming a takeover target . the company wouldn't comment on the rumors , but a spokesman said xerox " is not about to make an announcement . " eugene glazer , an analyst at dean witter reynolds , had a more mundane explanation for xerox's rise . he said the activity may result from a complicated dividend arbitrage arrangement : xerox allows shareholders to use their dividends to buy xerox stock at of the market price , and mr. glazer said some large investors figured out a way to lock in that discount by buying xerox when the stock recently began trading ex - dividend . xerox said it has seen this pattern of trading in previous quarters . koppers jumped / to / . however , late in the day beazer plc launched a - a - share tender offer for koppers . similarly , american president said it couldn't explain a sharp rise in its stock on heavy volume . it closed at / , up . gaf gained / to / . the company's outside directors instructed salomon brothers to find a higher bid for it than gaf chairman samuel heyman's - a - share offer . hewlett - packard rose to / . gartner securities repeated a short - term buy recommendaton , citing expectations of a strong product announcement from the company early next month . genentech got a less - than - enthusiastic welcome to big board trading . shares of the newly listed company rose / to / . beverly enterprises rose / to / on heavy volume . its management said it hadn't even heard a rumor about the company . analysts suggested that speculators may be buying on hopes of a takeover or restructuring . orion pictures slipped to / . a group including metromedia said in a securities and exchange commission filing that it raised its stake in orion to . metromedia recently filed for clearance to buy as much as of orion . hilton hotels , which has been rising sharply , gained / to / . a hilton spokesman said the offer " wasn't given serious consideration . " texas instruments gained / to / , and apple computer rose / to / . the wall street journal said the companies are expected to announce a low - priced artificial intelligence computer today that is based on apple's macintosh ii and equipped with a special texas instrument chip . bristol - myers rose / to / . the u.s. government said it intends to give the company exclusive marketing rights for a drug called peptide t that is being tested on some victims of acquired immune deficiency syndrome . a thrift group said it is seeking regulatory permission for thrifts to accept premiums from mortgage - insurance policyholders and set up reserves for possible losses if tmic insurance co. is liquidated . the federal national mortgage association is also exploring the possibility of a similar form of self insurance in the event that tmic is liquidated . as previously reported , the california insurance commissioner is seeking liquidation of the deeply troubled mortgage insurer , whose liabilities exceeded its assets by million at the end of last year . a liquidation would be felt by thrifts which hold mortgages insured by tmic and by the federal national mortgage association , or fannie mae , which purchased tmic - insured mortgages and then resold them as part of securities . the regulators are seeking to cancel the tmic policies . many of the mortgages covered by those policies don't meet current underwriting standards and thus couldn't easily be transferred to other insurers . a spokesman for the group , the national council of savings institutions , said it submitted its self - insurance request to the federal home loan bank board yesterday but hasn't received a response . the bank board has indicated that it was considering issuing a statement that it wouldn't take any action against thrifts in violation of that regulation as a result of the tmic liquidation . but a spokeswoman said last night she didn't know whether that ruling had been issued . a spokesman for the national council of savings institutions said thrifts hold an estimated billion of loans insured by tmic. however , tmic typically insured of the amount of the loans and it isn't yet clear how many loans might default . he also said about of the nation's thrifts hold tmic policies . fannie mae has said tmic insures about of its loan and mortgage backed securities portfolio , or about billion . fannie mae has also said payments on the " vast majority " of the loans are being made on time and that its loss reserves are adequate to cover tmic - related losses . the move by the thrifts and fannie mae follows an action by the federal home loan mortgage corp. , or freddie mac , which has also purchased mortgages insured by tmic and resold them as part of securities . last month , fannie mae asked its regulator , the department of housing and urban development , whether a self - insurance plan would violate federal real - estate laws . hud's general counsel said the move wouldn't violate those laws but added the opinion wasn't a regulatory action . mcorp , one of texas' largest and most troubled banking concerns , is trying to raise about million in fresh equity as part of a spinoff of a major portion of its bad loans . as part of the recapitalization plan , the company said it will sell its majority stake in mtech corp. , a data - processing unit , for about million in cash and securities to a new buyer it identified only yesterday : electronic data systems corp. , a dallas - based general motors corp. unit . the eds offer exceeds an earlier bid valued at about million by an investor group including robert m. bass group inc. of fort worth . mcorp said it reached a definitive agreement with eds subject to " customary " conditions . it expects the sale to be completed by april . the funds raised from mtech's sale coupled with the million raised in a private preferred stock offering would be used to restructure mcorp by creating a " bad " bank of problem loans akin to the spinoffs used in takeovers of other troubled texas banking concerns . but mcorp's plan apparently doesn't involve assistance from the federal deposit insurance corp . if successful , mcorp's plan would be the first self - imposed restructuring by any u.s. bank and could set off similar efforts by other banking concerns , especially in texas , that need equity capital to absorb loan losses . " restructuring and recapitalization are going to be the theme of in the banking industry , " predicts charles w. peabody , a bank analyst at drexel burnham lambert inc . in fact , investors say mcorp is pitching the restructuring plan mostly to texas investors by appealing to their desire to aid a struggling texas banking company and help preserve its independence . the effort involves houston investment banker charles w. duncan jr. , a wealthy and politically prominent texan , who is attempting to privately place a new issue of mcorp convertible preferred stock to texas investors and institutions . mr. duncan , who was a member of president carter's cabinet , is chairman of duncan , cook & co. of houston . mr. duncan didn't return phone calls and mcorp declined to give any details except to say that it is studying ways to reduce its nonperforming loans and offering new stock . but investors say that members of mr. duncan's company and gene h. bishop , mcorp's chairman and chief executive officer , recently have called on large texas institutional investors trying to sell a new issue of mcorp convertible preferred . but some investors are balking . " everybody went ' yuck , ' " said one texas institutional investment manager whose company has lost money on texas bank stocks . mcorp is apparently offering a modestly escalating dividend rate on the preferred that may start at less than half the rates offered on similar low - grade , high - risk debt . " we thought it was priced absurdly , " one investor said . the proposed issue an investor looked at recently offered conversion into mcorp common stock at nearly double its current market price . yesterday , in composite trading on the new york stock exchange , mcorp's stock closed at a share , up cents . mcorp may further refine the recapitalization plan . investment bankers and other specialists say that the banking concern could spin off , for example , about million in nonperforming assets , after giving effect to about million in loan - loss reserves , to a " bad " bank or liquidating unit . that unit's balance sheet would consist of million in new capital injected by mcorp and liabilities of million , possibly in the form of a long - term note payable to mcorp . after spinning off the problem loans , mcorp would use the mtech sale proceeds to replenish the equity capital lost because of the million infusion to the " bad " bank and any additional bad - loan write - offs it would charge against capital when it creates the liquidating unit . existing mcorp shareholders probably would receive shares in the bank of bad loans but their remaining mcorp stake might be diluted by as much as half if the new issue of preferred stock is fully converted . mcorp's year - end common stockholder equity capital was million , or of year - end assets . the state department is facing resistance from the pentagon to its efforts to step up pressure for the ouster of panama's strongman , gen. manuel antonio noriega , senior administration officials said . " the state department point of view is that it would be a large mistake to back away from this confrontation , " one administration official said . pentagon officials said in meetings last week that " it might be better to let the situation play itself out a little longer before doing anything else , " he added . pressure on gen. noriega will rise slightly with the announcement tomorrow that the u.s. won't certify panama's cooperation in the fight against drugs . although decertification mandates a cutoff of aid and trade preferences , it has a largely symbolic effect because of sanctions already in place . still , the decision is a victory for the state department's latin american bureau , which countered a draft report last week by the department's bureau for international narcotics matters saying that " other national interests " preclude punitive action against panama . a senior administration official says these differences will likely be tested in interagency discussions this week about steps to be taken against gen. noriega , who remains in power despite last week's abortive attempt to unseat him by panama's civilian president . the discussions will focus in part on possible trade sanctions . two u.s. grand juries indicted the general on drug and money - laundering charges early this month , after the senate , in december , cut off military and economic aid . the political crisis escalated thursday with president eric arturo delvalle's move to dismiss mr. noriega . ignoring u.s. endorsement of the move , the noriega - controlled parliament replaced mr. delvalle friday ; he is now in hiding . state department officials argue that the administration can't afford to give up its fight against gen. noriega after losing a battle with congress earlier this year for military aid to the nicaraguan contra rebels . secretary of state shultz , now in the mideast , has been personally engaged in the discussion through frequent cables . but administration officials said it wasn't yet clear how hard he would push for trade sanctions . civilian pentagon officials appear to fall somewhere in the middle of the debate . they are worried by the panamanian army's rampant corruption and they want gen. noriega out , but they are less willing than the state department to consider economic warfare . a senior official said many in the pentagon worry that " the u.s. may be tilting at windmills " in promoting panamanian democracy . some officials argue that domestic opposition of a kind that could prompt the ouster of gen. noriega is lacking . the general has helped forestall pentagon interest in actions against him by reassuring the u.s. that american bases and soldiers are safe . " the argument is that democracy is a nice idea but we have to recognize the realities here that noriega is in charge , " the official said . the organization avoided a clear position on the panamanian situation at an extraordinary session over the weekend . members of the permanent council of the oas adjourned nearly eight hours after beginning an emergency session , unwilling to decide whether to seat an ambassador favored by gen. noriega or one picked by ousted president delvalle . the vice chairman of the federal reserve board offered fed watchers a clue to the way the central bank is setting monetary policy now . speaking to a conference sponsored by the cato institute , the reserve board's manuel johnson said the central bank should use the interest - rate yield curve , the value of the dollar and commodity prices as substitutes for the money supply in gauging the effects of monetary policy . his colleagues on the fed share his point of view , he suggested . " different ( fed ) governors look at different things , but i see a pattern . . . . this generally fits the pattern of thinking , " he said . monetarists believe the fed should rigorously watch measures of the money supply . but mr. johnson said that in recent years the relationship between these measures and the economy has become less predictable . as a result , there is a certain mystery about what numbers the fed watches in deciding whether to ease or tighten credit . this isn't healthy , mr. johnson said . " there has got to be some way that outside concerned parties can analyze what the fed is doing , " he said . each has shortcomings . " but when examined together they often yield valuable insights in evaluating the stance of monetary policy and particularly in assessing movements in expectations of inflation , " he said . the yield curve , a graph of the relationship between short - term and long - term interest rates , reflects financial markets' expectations of future inflation . a curve sloping steeply upward , with short - term rates much lower than long - term , would suggest expansionary monetary policy . a flatter curve would suggest the opposite . broad indexes of commodity prices " respond to changes in monetary policy and tend to lead changes in broader measures of inflation , " mr. johnson said . but they can be volatile , so are best seen as a reflection of monetary policy than as " an actual target " for the fed , he said . the dollar " often indicates the stance of u.s. monetary policy relative to that in other countries , " he added . fed chairman alan greenspan is known to pay close attention to such statistics , and signs of sluggishness in the economy last month led the fed to decide to allow interest rates to fall slightly . politicians lament that fewer and fewer people are going to the polls to vote for them . they are right . in the presidential election , nearly of those eligible said they voted , according to the census bureau . but by that figure had slipped to . barring the nomination of some truly uninspiring candidates , however , voter turnout should rise for at least the next four presidential elections . that's because younger people , who don't vote nearly as often as middle - aged or older people , will be a smaller proportion of eligible voters . the number of potential voters under age , less than half of whom vote , peaked in at of the electorate and is projected to be only about of potential voters by the year . by contrast , the number of people age to -- nearly three - quarters of whom voted in -- is growing fast . the census bureau projects that group to grow in the next years , an increase of million people . one major change in the voting booth has been the shift in turnouts among men and women . by , however , of women voted , compared with of men . changes in population mean that women will probably continue to outnumber men at the polls . this fall , the u.s. will have a record million potential voters , million women and million men . according to the census bureau , the biggest increase will be among voters to years old , who will make up nearly half of the electorate . increases are also projected for voters to , and and older . but the number of young voters -- age to -- is expected to decline . these trends favor women , since female voters are more numerous among middle - aged and older voters . for example , among people and older , two - thirds of whom vote , six out of every potential voters are projected to be women . in november , then , there could be between six million and seven million more votes cast by women than men . considering how close the senatorial races were , that difference out of a projected million votes could swing the election . americans may like to think of themselves as a restless people , but more individuals appear to be content with -- or resigned to -- the place where they're living . that's down from in - and in - . the surveys found large differences in interstate mobility when respondents were divided into age groups . between and , for example , about one out of every six people age to ( ) had moved to a different state , but only one out of every people age to ( ) had done so . the lowest mobility was among people and older . a mere of them -- only one out of every -- moved to another state between and . the same trends are apparent when all moves -- between states and within states -- are considered . nearly three - quarters of the population age to were at the same residence in as they were in , vs. only about onequarter of people age to . as the number of people age to shrinks in size over the next years ( down ) and the number of people age to increases ( up ) , one set of business people may be quite unhappy with families' decisions to stay where they are : real - estate agents . the cream of the u.s. housing market is the single - family dwelling in the suburbs that is sold mostly to married couples . housing sales in the short term are sensitive to factors like interest rates , consumer confidence and the stock market . but in the long term , selling an existing home means having a family move . in future years that may be a less - frequent occurrence . most of the baby - boom generation is still in its late s and s . but as its members move into their s , according to one scenario , they will settle down and buy a house to live in for a relatively long time . if so , turnover would be reduced , and it would be harder to find buyers for those homes that do go on the market . working against this scenario is the fact that many baby - boom couples have no children . the absence of children , particularly school - age ones , makes it easier for couples to move , thus increasing turnover and ultimately home sales . five years ago , nearly any electric utility stock was likely to offer a healthy annual dividend increase . dividend cuts were virtually unknown . but by last year the percentage of power companies raising their dividend had fallen to about . the average annual increase was down to about , compared with to five years ago . moreover , nearly utilities have cut or eliminated payouts in the past few years . what happened ? for one thing , state utility regulators have become less willing to make ratepayers pay for over - budget power plants , forcing utilities to write off large chunks of plant investments . also , growing competition is forcing many utilities to lower rates , though costs remain fixed , thus squeezing profits . so which utilities do analysts believe will cut dividends this year ? which may raise payouts more than the average ? analysts expect imminent dividend cuts from public service of new mexico and centerior energy . robin jaffe of dean witter reynolds says that within three to six months , ps new mexico will slice its annual payout to to a share from currently , while centerior will cut to to a share from . both utilities are hard - pressed to recoup big investments in nuclear plants . as for the companies themselves , ps new mexico said directors will have to " carefully evaluate " dividend policy because of the increasingly contentious restructuring . a centerior spokesman said such forecasts aren't new , adding that the board will decide what to do " as circumstances prevail . " other potential cuts cited by analysts include el paso electric . gary hovis of argus research corp. expects el paso to lower its payout around june to cents a share annually from because of nuclear - investment woes and slower growth in its service territory . an el paso spokesman said the utility " can't tell " whether its rate might change until the dividend is declared . he added that a pending nuclear - plant rate decision could affect earnings . barry abramson of prudential - bache securities sees detroit edison cutting its annual dividend to a share from , though not for another six to months . the culprit : the fermi nuclear plant . while the utility has recouped about billion of its investment , it's seeking billion more -- " an exercise in futility , " according to mr. abramson . another abramson pick is illinois power , which he thinks will lower its payout next year to a share from . he believes illinois regulators will effectively force the utility to cut back by disallowing more than billion of its investment in the clinton nuclear plant , more than most observers expect , while permitting a relatively low rate of return on the part recoverable from ratepayers . an illinois power spokesman said the utility doesn't predict dividend action . but he noted that it just announced a regular quarterly payout of cents a share . raymond moore of nikko securities sees ohio edison trimming its annual payout to a share from within to months because of plant - investment woes and growing competition . an ohio edison spokesman said that while the utility doesn't respond to individual analysts' forecasts , the track record shows that directors and management are " dedicated " to maintaining the dividend . a utility spokesman said the diablo case will significantly affect the firm's financial condition , but it's too early for anyone to know the outcome . as for dividend increases , ms. jaffe expects the average annual boost to slip to to from last year . one healthy prediction comes from mr. hovis , who looks for oklahoma gas & electric this year to raise its dividend about to a share from currently . " the oklahoma economy is coming back , " he reasons . " and russian wheat purchases are rising . " an oklahoma g&e spokesman said any dividend increase wouldn't be announced before next december . he said a - cent - a - share increase is " hard to visualize " at present , though things could change . the past two years , he added , - cent - a - share increases have been declared . ms. jaffe expects wisconsin energy to increase its dividend this year , to annually from . not only does the utility have " room to grow , " she says , but it is looking to increase its to payout ratio to about . a utility spokesman wouldn't comment except to say that dividend increases normally have been declared at the end of the first quarter . that reflects the utility's continuing financial recovery from the accident at three mile island . a gpu spokesman said the utility previously said it will increase the dividend further the next couple of years but that there isn't any timetable . houston - texas air corp.'s computer reservation subsidiary filed an antitrust lawsuit against united airlines , charging that united's apollo system is " excluding " the unit from the market . the suit , filed in federal court here by texas air affiliate system one direct access inc. , follows a similar suit the unit filed in november against fort worth , texas - based amr corp.'s american airlines concerning its sabre reservation system . that suit is pending . in the suit against united , which is a unit of chicago - based allegis corp. , system one alleges united uses exclusive dealing contracts with travel agents , threatens them with punitive damages clauses and employs other tactics in violation of antitrust laws . damages being sought were unspecified . a spokesman for allegis said the company wouldn't comment on the suit . bill diffenderffer , vice president and general counsel for system one , said the suit joins " a web of lawsuits that are all interrelated " and that challenge the dominance of united's and american's reservation systems . sabre , american's system , currently has of the travel agent market , apollo has and system one has , according to system one . the airlines also say the systems are powerful marketing tools because travel agents are more likely to book traffic with the airline that supplies their reservation system than with a competitor . a sell - off in the stock - index futures market and disappointing fourth - quarter profit at ford motor helped drive stock prices down in the final hour of trading yesterday . the dow jones industrial average closed at , down points . but even before the last hour , traders said the market wasn't very buoyant . the industrial average struggled to stay over the mark , above which it moved tuesday for the first time since early january . although the closely watched market indexes indicated that stock prices were little changed for much of the session , " there were sellers around all day , " said jon groveman , head of equity trading at ladenburg thalmann in new york . traders had few conclusive explanations for the drop in prices late yesterday , especially since the bond market had retraced all of its early losses and was showing a gain . one futures trader said there were rumors of a big seller of stock futures at the close . in yesterday's thin and jittery futures market , rumors alone might have been enough to prompt nervous professionals to sell , he added . the rumored sellers didn't materialize , but the drop in the index futures paved the way for a few sell programs on the new york stock exchange , where index arbitragers sold baskets of stocks that make up the indexes and bought the now cheaper futures contracts . the broader market indexes moved down with the industrial average . volume fell to million shares from million wednesday on the big board , where losers had a - to - lead over gainers . other traders said ford's fourth - quarter earnings report had a big negative influence yesterday . investors and analysts expected earnings of more than a share , but the auto maker's net was a share , compared with a year earlier . ford shares sank two points on the news and closed down / at / ; more than million shares changed hands . " this continues to be a very confusing market because no one can put their finger on the pulse of the economy , " said richard kehne , managing director and head of equity trading at s.g. warburg . for instance , he noted that two groups of stocks usually tied to the economy moved in opposite directions yesterday . but copper and other metals stocks had a rough day as some companies , such as phelps dodge , lowered copper prices . phelps dodge fell / to / , asarco lost / to / , inco dropped / to / , reynolds metals declined / to , and aluminum co. of america moved down / to / . texaco rallied to / on volume of more than million shares on reports that it was planning to sell of its u.s. gulf coast refining operations to saudi arabia . the oil giant wouldn't confirm or deny the saudi joint venture , but said it was negotiating with potential partners , including foreign governments . federated department stores sank / to on more than million shares . investors are waiting to see if the retailer discloses more details of its proposed restructuring plan , produces a white knight , or accepts the advances of its hostile suitor , campeau . crowley milner raced ahead to / on the american stock exchange after a shareholder group that includes bermuda - based fidelity international ltd. said it thinks the company should be sold to maximize shareholder value . usg corp. rose / to / . rorer group spurted / to in active trading on speculation that the company may be an acquisition target and that a foreign company might be the suitor . a spokesman for rorer said the company hadn't been contacted on a possible merger or acquisition . salomon climbed / to in active trading on rumors that chairman john gutfreund will resign and that the firm will be sold . a spokeswoman for the investment banking firm said there's " no truth " to the rumors . j.p. morgan gained / to / . the last of the triple - a - rated u.s. bank holding companies had its senior debt downgraded wednesday to double - a - by moody's . the rating agency also downgraded the debt of bankers trust new york , chase manhattan , chemical new york , manufacturers hanover , bankamerica and irving bank . the stocks of those bank holding companies were little changed yesterday . besides ford's earnings , quarterly results from several other companies also attracted investor attention . hewlett - packard jumped to / on heavy volume after the computer maker reported that earnings in its fiscal first quarter ended jan. rose to cents a share from cents . the results barely topped wall street's highest estimates . loews moved up / to / . but the latest results included net from discontinued operations of million and pretax investment gains of million . usair sank / to / after the airline reported a drop in fourth - quarter net to cents a share from . j.c. penney inched up / to / on higher fiscal fourth - quarter results . carter hawley hale added / to / . the company reported net of million for its fiscal second quarter , compared with a loss of million a year earlier . ramada gained / to . late wednesday , the pritzker family of chicago , which holds a stake in the company , said it was discussing the possible acquisition or restructuring of ramada . outboard marine sank / to / . genmar industries , which is controlled by investor irwin jacobs , is no longer considering increasing its stake in outboard marine . most short - term interest rates rose yesterday while bond prices fell for the third session in a row . activity was light . traders said there was a brief flurry of activity in the afternoon as bonds staged a moderate rally . still , prices of some - year treasury issues wound up the day with declines of about half a point , or for each face amount . earlier this year , bond prices soared as speculation grew that the economy would show little or no growth and that the federal reserve would be forced to drive down short - term interest rates sharply . lately , though , government reports have shown unexpected signs of economic strength , raising doubts about whether the lengthy bond rally is ending . but many money managers remain very bullish on bonds . " the fed should be concerned about the very high probability of a decline in the economy , " contended roger a. craig , manager of fixed - income investments at banc one asset management corp. in columbus , ohio . mr. craig , who manages about million , argued that the recent drop in bond prices has created a " great buying opportunity , " and that yields on long - term treasury bonds , now nearly / , will tumble to around / this spring . the october stock market crash represented " an enormous warning signal . " another warning signal , he said , was the anemic growth of the nation's money supply throughout most of last year . also , government and consumers are so deeply in debt that " we no longer have the capacity left to borrow ourselves to prosperity . " inflation " isn't likely to be a real concern " anytime soon , mr. craig predicted . he also expects the dollar to hold steady in the foreign - exchange markets . " so the thrust of interest rates will be downward , " he concluded . one of the causes cited by many traders for yesterday's bond price slump was an increase in the federal funds rate . the funds rate , which is the rate on reserves that banks lend each other overnight , strongly influences many other rates , including those that dealers must pay to finance their bond holdings . the funds rate , which averaged about / in the week ended last wednesday , rose yesterday to an average of about . nevertheless , several traders expect the funds rate to drift back down to about / soon . the fed intervened in the markets yesterday to add reserves to the banking system . the fed arranged about billion of repurchase agreements on behalf of a " customer , " which usually means a foreign central bank . at the time , the funds rate stood at / . the maneuver had been widely expected because of a temporary shortage of reserves , and thus traders said the action didn't provide any fresh insight into the fed's credit policy . rates also rose on short - term treasury bills sold yesterday by the government at its regular weekly auction . the average rate on new - week bills increased to from at last week's sale , while the average rate on new - week bills rose to from . the treasury's weekly bill auction usually is held each monday . it was held yesterday instead because the u.s. financial markets were closed monday in observance of washington's birthday . " but we're not going into recession . the economy still is growing , although a little slower " than late last year . " i think the market jumped the gun on the notion of a weak economy and the fed easing , " mr. fine said . " so what we're seeing now is a consolidation . " he expects long - term treasury bond yields to " hover around the / level " in the near future . the stock market's recent rally could be another sign that the economy isn't heading for recession , a few analysts said . the dow jones industrial average yesterday closed above for the first time since jan. . alan greenspan , chairman of the federal reserve board , said yesterday that prospects " for more buoyant economic activity in the industrial world are patently not great . " mr. greenspan , speaking at a meeting of the bretton woods committee , a private group , didn't provide details , except to say " we will see on balance only moderate economic growth in the near term in the major foreign industrial economies . " mr. greenspan is expected to provide more details next tuesday when he presents the fed's midyear monetary and economic report at a house banking committee hearing . the fed today is expected to report a moderate increase in industrial production during january . according to the average estimate of economists surveyed by the dow jones capital markets report , industrial production rose last month . rates are determined by the difference between the purchase price and face value . thus , higher bidding narrows the investor's return while lower bidding widens it . the percentage rates are calculated on a - day year , while the coupon equivalent yield is based on a - day year . two companies will begin trading on the new york stock exchange this week , and one began trading recently . triton group ltd. , la jolla , calif. , began trading dec. under the symbol tgl . the company , with interests in consumer products and graphics and services related to the motion picture , television and aviation industries , previously traded over the counter . leisure technology inc. , los angeles , will begin trading thursday under lvx . the developer and marketer of planned adult entertainment communities previously traded on the american stock exchange . solitron devices inc. will begin trading friday under the symbol sod . the riviera beach , fla. , developer and maker of semiconductor products previously traded on the american stock exchange . three companies began trading on the american stock exchange recently . buffton corp. began trading under the symbol bfx . the fort worth , texas , asset management holding company with manufacturing subsidiaries previously traded over the counter . guardian bancorp began trading under the symbol gb . the los angeles bank holding company previously traded over the counter . rac mortgage investment corp. , columbia , md. , began trading under the symbol rmr . the company intends to qualify as a mortgage real estate investment trust . two issues began trading over the counter recently . the company previously traded on the big board . portsmouth bank shares inc. , a bank holding company based in portsmouth , n.h. , began trading under the symbol pobs . nuveen california municipal value fund inc. , a chicago - based managed closed - end bond fund , began trading friday on the pacific stock exchange under the symbol nca . last year's guess ? jeans ad : two young denim - clad women kneel at the feet of an older mustached man with a black hat . he kisses one woman as the other watches . he seizes the other by her chin . this year's version : a pretty brunette fantasizes about a spanish bullfighter , but they never meet face to face . they are together only in her dreams . a return to conservatism , sparked in large part by the fear of aids , has made its mark on advertising . even the boldest advertisers are turning to more romantic -- and less overtly sexual -- images . " people want less sexuality " in advertising , says paul marciano , the guess ? jeans advertising director who created both print - ad campaigns . sexual imagery isn't likely to disappear completely from television commercials and print ads . after all , " babies and sex sell , " says arthur cohen , executive vice president of advertising for revlon inc. , the cosmetics maker . but mr. cohen adds that sex sells better " if done tastefully . " and after two decades of pushing increasingly more daring and suggestive ads , madison avenue executives are encouraging everybody to get dressed again . " people are saying ' like please , enough already. ' " adds stephen bowen jr. , president of the u.s. operations for advertising agency j. walter thompson co. : " people want to see relationships and good , clean fun . " the new prudishness may also be spurring some advertisers to drop agencies that have promoted sexier ads . travel fox inc. , a shoe manufacturer , says it recently fired its swedish ad agency , hall & cederquist . the company , which is using mr. kirshenbaum's firm for its new ad campaign , won't say why it fired hall & cederquist . but the shoe maker created a stir last year when it ran an ad showing a man and woman , naked from the waist down except for their socks and shoes . " we didn't want our shoes to clash with clothes , " says ashley schapiro , president of travel fox . the ad was widely criticized , but according to mr. schapiro , " shock appeal absolutely worked . " the company , however , has decided to alter its approach . in the future , says mr. schapiro , " we won't use sex to advertise shoes . " other advertisers have already turned away from using steamy sexual imagery to sell products . " nobody's really grabbing anybody anymore . " the new television advertisements for paco rabanne parfums , the french men's cologne manufacturer , are a stark illustration of the new attitude toward sex . in the company's ad , a man was lying in bed , naked , with a satin sheet carefully covering his body . the phone rings . " hello , " he answers . " you snore , " a woman's voice says . " and you always steal the covers , " he snaps back playfully . the new paco rabanne man , however , is tuxedo - clad . as he descends a winding stairway , he blows a kiss to the air . he prances down cobblestone streets and across a bridge , enraptured in a fantasy about the previous evening . he stops to smell the flowers . he doesn't utter a word . " the impact of aids has caused differences in relationships , " says norman berry , chairman of the new york office of ogilvy & mather worldwide inc. , which created the paco rabanne ads . " fantasy and romance are in ; explicit sex isn't . " no one at calvin klein will talk about the planned advertising . but one cosmetics - industry executive who is familiar with the new campaign says , " it's a safe bet that models in eternity ads will have their clothes on . " that would be a departure for mr. klein , the maker of obsession fragrance and bath products . a recent print advertisement for obsession for men , for example , shows two women and four men -- all of them stark naked . they lounge near an obelisk , striking a variety of poses . obsession , introduced in , " was about lust and the ads were meant to reflect that , " says an ad - industry executive who worked on the campaign . even the name for this year's product -- eternity -- conjures up a more " prudish " era , he observes . " you used to have to elicit consumer response , " says andrew langer , president of lowe marschalk inc. , a new york - based ad agency that is a unit of the interpublic group of cos . " you don't have to now . consumers are more vocal than ever before and advertisers have to be receptive to that . " canada dry found that out the hard way . after complaints late last year , the soft - drink maker canceled a television commercial that some viewed as too sexually suggestive . the tv commercial , created by new york ad agency wells , rich , greene inc. , showed a husband and wife sharing a glass of canada dry ginger ale . the camera pans to the bottle on the dresser and then to their pajama - clad kids playing outside the parents' closed bedroom door . " for when your tastes grow up , " a man says as the commercial ends . " i thought it was a little risque for a product like canada dry , " says thomas dooley , president of canada dry delaware valley bottling co. in philadelphia . mr. dooley says he received nearly a dozen complaints from consumers about the ad . " it's an adorable spot , " he says . " the target market is young adults , and they should be grown up enough to understand . i didn't do anything i'd be ashamed for anyone to see . i don't find ( the ad ) the least bit embarrassing . " besides being alarmed by what the couple was about to do behind the bedroom door , some consumers also said that the ad evoked images of child neglect or abuse , says stuart levitan , director of marketing for canada dry bottling co. of new york . two new ads created by the same agency planned for later this year " aren't going to offend anyone , " a canada dry spokesman says . neither will new ads for maidenform bras . last year , tv commercial censors allowed advertisers to show semi - naked models in bras for the first time . but maidenform inc. is opting not to go that far . instead , its new ad campaign features leading men , including omar sharif , michael york and corbin bernsen of " l.a . law , " talking about women's underclothes . " i love a woman who says how she feels , " mr. bernsen says coyly . he looks around as if to make sure that no one is watching . " but i also love a woman who has secrets . " so sometimes you don't find out . but , then again , sometimes you do . " maidenform and its ad agency , levine , huntley , schmidt & beaver inc. , figure a talking head like mr. bernsen is sexier than a nude woman . " everybody has a model wearing a bra , " says marilyn bane , vice president of advertising at maidenform . " we felt we needed to do something different . really , this is much more sexy than a woman without her clothes on . " newsweek magazine named dominique browning as assistant managing editor effective today , making her the most - senior female editor of the weekly magazine . ms. browning , years old , will be the top - ranking editor for the life style and society sections and one of the magazine's five top editors . the position had been vacant . two senior editors will report to ms. browning , who in turn will report to editor - in - chief richard m. smith . before joining newsweek months ago as a senior editor , ms. browning was executive editor of texas monthly magazine . ms. browning and mr. smith downplayed her status as a woman top - level news manager . " i'm delighted it happened , but i don't think about being a woman doing this job , " she said . noting that he and two other top editors rose from the magazine's hard - news sections , mr. smith said , " it's good to have the expertise and voice from the back - of - the - book at the leadership of the magazine . " the so - called back - of - the - book sections include coverage of education , justice , medicine , news media , religion , science and technology . newsweek is a publication of washington post co . american first corp. said it agreed to sell its first life assurance co. unit for million to landmark land co. , a carmel , calif. , diversified real estate developer . american first , a financial services concern , said it was unable to obtain new capital for first life on acceptable terms or to successfully restructure its debt . first life , a credit and life insurance concern , had been profitable , but posted a loss last year because of investment losses , american first said . gregory j. edwards , american first chairman , president and chief executive officer , said the sale allows american first to focus on its other businesses , principally leo oppenheim & co. , its bond - trading unit based here . the company expects to de - emphasize its computer - leasing operations , mr. edwards added . of the rest , million would be used to boost first life's capital in exchange for an interest - bearing debenture issued by first life to american first . landmark agreed to pay american first the final million one year after the sale is completed , or upon satisfaction of american first obligations , subject to adjustments . the landmark loan expires aug. , american first added . in national over - the - counter trading friday , american first shares closed at cents , up cents . in american stock exchange composite trading , landmark closed at , down cents . american first said the sale is subject to regulatory and shareholder approvals . a break in the bond market's recent rally and disappointing earnings reports from several blue - chip companies knocked stock prices down sharply yesterday in active trading . the decline was exacerbated by several waves of sell programs , tied to various strategies using stock - index futures . the dow jones industrial average , which was up nearly points at midday , tumbled more than points in the last hour of trading , ending lower at . the broader market indexes sank along with the industrial average as volume on the new york stock exchange swelled to million shares from million tuesday . lackluster demand for the treasury's offering of billion of - year notes was partly to blame for the decline in bonds , traders said . futures traders , watching the bond market fall , started selling stock - index futures , pushing their prices below the levels of the indexes themselves . that set up favorable conditions for sell programs in which some investors buy the futures contracts and sell baskets of stocks that make up the actual indexes . seemingly bullish earnings reports touched off bouts of selling in several widely owned stocks such as eastman kodak and upjohn , because the results weren't as good as expected . the figure was near the bottom of the estimates gathered by institutional brokers estimate system , a division of lynch jones & ryan . the estimates ranged from cents to cents a share . some market professionals previously had been turning bearish on kodak on grounds that the company's acquisition of sterling drug and a possible future settlement with polaroid could sharply boost the company's debt/equity ratio . although upjohn reported a profitable fourth quarter , the results were just shy of expectations . analysts were looking for earnings of cents to cents a share . the pharmaceutical concern earned cents , compared with cents in the final quarter . the stock dropped / to / on more than million shares . sears roebuck , the chicago - based retailing and financial services concern , reported fourth - quarter earnings rose to a share from a year earlier , near the low end of analysts' estimates ranging from to a share . sears shares escaped with little damage , falling just / to / in active trading . however , it was a different story for pitney bowes , which released fourth - quarter results that topped wall street expectations . the stock gained / to / . stephen timbers , chief investment officer for kemper financial services in chicago , said that as in most bear markets , " good news is largely ignored and the bad news is emphasized . " traders also said rumors that the congressional budget office would soon release a forecast of a fiscal budget deficit that's about billion larger than the reagan administration has projected also added to the sell - off in the final hour . among other fast - moving issues yesterday , general motors class h , issued when the auto maker acquired hughes aircraft in , gained / to / yesterday after moving up / tuesday . gm announced a dividend increase and a - for - split in the class h stock late monday , fulfilling its promise to improve the liquidity in the issue . one analyst also noted that gm routinely buys about of the stock's daily volume . trading strategies to capture forthcoming dividends on several stocks once again boosted volume on the big board . american electric power , which carries a annual yield , eased / to / on more than million shares . this issue begins trading ex - dividend today . sun co. , with its return , eased / to / on million shares . and midwest energy , with an annual yield of , lost / to / on million shares . digital equipment slid to and international business machines traded as high as / before closing at , down / . early yesterday , the gartner group , a research firm , noted that ibm is aggressively pushing its mid - range computers . the firm didn't change its recommendation on ibm or digital . however , some market participants interpreted gartner's comments to mean buy ibm and sell digital , which now has a substantial share of the mid - range computer market . gold stocks took a licking as the metal dropped to a seven - month low . gold for february delivery sank , to an ounce on the commodity exchange in new york . asa ltd. fell / to / ; echo bay mines dropped / to / ; newmont mining lost / to / ; giant yellowknife eased / to / , and american barrick resources sank / to / . tricentrol plc , a british oil exploration and production company , will urge its shareholders to accept a takeover offer of pence ( ) a share from atlantic richfield . arco's offer exceeds a - pence - a - share offer from a unit of societe nationale elf acquitaine of france . except for the action in gm , other auto stocks lost ground . ford motor fell / to and chrysler lost / to . car sales for late january were higher , compared with a sluggish period . reports -- later denied -- of a nuclear accident in the soviet union touched off a brief buying flurry in several grain and food stocks . the original report came from the swedish domestic news agency , which was the first to report the chernobyl accident . british authorities denied reports of a nuclear accident in russia . but late in the day , u.s. energy secretary john herrington said the swedish monitors had registered some form of difficulty at a soviet nuclear facility yesterday . archer - daniels - midland closed down / to after trading as high as / ; staley continental ended up / to / , and conagra eased / to / . activity in these issues died down when the nuclear reports were denied . long island lighting fell / to . the utility's hopes of bringing its shoreham nuclear power plant on line were set back once again when a federal regulatory panel ruled tuesday that lilco's emergency evacuation plan is gravely , maybe fatally , flawed . the stock climbed / to / . the other cited targets included chatten , roper and zurn industries , which moved higher , and mohasco , which fell / to ; the stock rose / tuesday on takeover rumors . trw inc. said it plans to pare its space and defense work force by as many as workers , or , as a result of cuts in defense department spending . a company spokesman said its space and defense sector employees were informed this week that changes in defense programs might force layoffs . there has been recent speculation that cancellation of a secret military - satellite program would trigger layoffs , but the spokesman wouldn't comment on such rumors . trw said it would try to avert layoffs through a hiring freeze , job transfers and voluntary retirements . " such a severe reduction might not be necessary , " the spokesman said of the possible cutback . " this is the worst - case scenario . " so far , the maker of automotive , aerospace , industrial and electronics products has lost several small defense contracts totaling less than million , the spokesman said . he added that the staged funding of certain programs spread over longer periods of time might also force work - force reductions . most of the affected workers are based in california . trw's total work force consists of about employees . its space and defense business accounts for more than of total corporate sales . in composite trading on the new york stock exchange yesterday , trw closed at a share , down cents . operating profit for fiat s.p.a.'s fiat auto s.p.a. division jumped nearly in , despite the incorporation of loss - making alfa romeo s.p.a. , division managing director vittorio ghidella said . mr. ghidella , speaking at a news conference to launch the company's new midsize tipo car , said provisional results indicated that the auto division's sales grew to about trillion lire ( billion ) from trillion lire in . operating profit for fiat auto would total about of sales , or trillion lire , compared with trillion lire in , he said . the provisional figures were about in line with analysts' expectations . the turin - based industrial group's provisional consolidated results should be available at the end of this week . company officials have predicted that group earnings would exceed their forecasts of trillion lire in sales and trillion lire in operating profit . in , fiat had group sales of trillion lire and operating profit of trillion lire . mr. ghidella said the tipo is aimed at establishing fiat as europe's no. auto maker and at " combating japanese competitors . " fiat currently is no. in europe , behind volkswagen ag of west germany . usx corp. is leading the steel industry in pushing through big price increases for long moribund oil field pipe and casing products , with u.s. oil industry purchases estimated to reach billion this year . prices for many of the products and services used to drill and complete a well have been rising as exploration activity increases , but it's unclear what effect , if any , the increases will have on oil companies' exploration activities . steel - price increases alone shouldn't curtail drilling activity , but as increases spread among vendors of other goods and services , drilling projects now deemed economical could become less so . usx , based in pittsburgh , recently informed customers it will raise prices to , effective for shipments on and after april . " it's certainly as substantial an increase as the oil patch has seen in most items in a long time , " said richard spears , a managing partner of spears & associates inc. , an oil - service consulting firm in tulsa , okla . but oil companies in recent years have learned to adjust quickly to price volatility in all aspects of the business . usx officials predict that oil - industry demand for all steel goods in will reach two million tons , about half of that being filled by overseas manufacturers . a usx spokesman said orders are strong and are expected to remain that way throughout the year . he said usx last increased prices for so - called oil - field country tubular goods in august . spears & associates estimates that the oil industry buys million a month of steel casing and tubing , and that steel purchases account for the second - largest cost in drilling and completing a well , after the leasing of the drilling rig itself . the consulting firm recently canvassed oil - service companies and estimates prices for all goods and services will rise this year . prices for some goods , such as drill bits , have shot up much more recently , while day rates for drilling rigs have languished . the vast majority of steel tubular goods are bought by oil producers , but the drilling contractors are also affected . they must replace their drill pipe every two to three years and must repair their steel rigs , said richard e. roberson jr. , vice president , finance , of ocean drilling & exploration co. in new orleans . mr. roberson estimates a increase in steel prices translates into a increase in the cost of drilling an offshore well . the rise in labor costs and wage settlements , which has been narrowing for most of the decade , leveled off last year , the labor department said . total compensation costs in private industry , including pay and benefits , rose last year after a increase in , the department said . the increase in these costs had been getting smaller each year since , when they rose , the same as in . meanwhile , collective bargaining agreements reached last year called for an average wage increase in the first year of the contract and annually over the life of the pact . the industries surveyed agreed to the same percentage pay raises when they last reached contract accords , the department said . officials said it's the first time since that current contract settlements didn't provide lower average wage adjustments than the bargaining agreements they replaced . the wage agreements reached last year also were higher than the average pay rises bargained in , when a increase in the first contract year and a annual increase during the life of the settlements were the smallest increases recorded during the years the labor department has collected the statistics . a tighter labor market in the services sector may be part of the reason the compensation increases have leveled off , officials said . a tighter labor market would allow employees to demand higher pay and benefits . in its report on major collective bargaining agreements , the department said that the average increase was reduced by lump - sum payments , which are one - time payments often made upon a contract's ratification . the payments often are provided instead of wage increases , but they aren't included in wages and aren't used as a base for future increases . about half of the workers covered by big labor contracts last year received these payments . better - than - average wage settlements for construction industry workers -- specifically those in the mid - atlantic and northeastern regions -- were largely responsible for stopping the narrowing trend . construction pacts settled in averaged increases in the first contract year and annually . all other industries surveyed last year , including the automobile , food store and steel industries , averaged increases in the first contract year and annually . about two million workers were covered by agreements reached last year . aren't we americans overdoing self - laceration a little in this election year ? reflect on the almost masochistic relish we take in decrying both the men who dare offer themselves as possibilities for the white house and the process by which our presidential nominees are selected . now it may be that , with the exception of jesse jackson , none of the declared candidates in either party possesses an electric personality . but we have had effective presidents in the past who were low in personal electricity . all the democratic candidates and most of the republicans ( pat robertson must be kidding ) appear men of intelligence , ability and address who display concern for issues and a sense of responsibility about the american future . seven dwarves ? the critical question in politics is still the punch line from the old joke about two friends who encounter each other after a long interval . " how's your wife ? " asks one . " compared to what ? " replies the other . almost any one would be an improvement over the present recumbent . they hardly constitute a crowd that shames the nation . as for our presidential selection process , it is obviously far from perfect . iowa and new hampshire exert an entirely disproportionate influence , we have too many primaries altogether ( twice as many as we had years ago ) , and the mass television debate is a rather demeaning affair . still , in moderation primaries are an indispensable means of introducing the candidates to the country -- and the country to the candidates . for all the accompanying nonsense , the voters know a good deal more today about the contenders than they did six months ago , and the contenders know a good deal more about the nation they propose to govern . the names of most candidates may not yet be household words . but this does not necessarily disqualify them from the white house . the winners will be household words soon enough . in the meantime , the lantern of the press plays fitfully upon them , spotlighting one for a heady moment , then relegating him to the darkness and spotlighting another . december began as sen. albert gore's month until the second coming of gary hart . january has been gov. bruce babbitt's month . february may offer reprises to messrs . dukakis , simon or gore or a new chance for rep. richard gephardt . these have been the months when the press vamps for time . but beginning on feb. with the iowa caucuses , the voters will take over the process . soon the weaker candidates will fall by the wayside . as the field narrows , the media buildup of the survivors will intensify : cover stories in the news magazines ; interviews with mothers , sisters , daughters ; reminiscences by childhood and college chums . by midsummer , we probably will feel that we have known the finalists most of our lives . who will these finalists be ? i will leave the republicans to those better acquainted with that party and its tribal customs . but let us contemplate the democratic possibilities . their geographical experience has been diverse . the etiquette of debate requires them to exaggerate nuances of disagreement , but in fact they present a united front on most issues and are all generally faithful to the party's liberal traditions . this is as it should be . if the nation is still in the conservative phase of the political cycle , the voters will prefer the genuine republican article to a democratic imitation every time . moreover , every indication is that the conservative mood of the s is running its course and that a new phase in the cycle impends . it would be folly for the democrats to move to the right at just the time when the electorate is beginning to edge over toward the left . the question remains whether the prospect of a deadlock may force new contenders into the democratic contest . mr. hart's re - entry seems likely to increase the chance that no candidate will have a commanding lead by mid - march . messrs . hart and jackson , both widely regarded as unelectable , may have a third or more of the delegates between them at the convention , with the other two - thirds dispersed among several regional candidates . is it possible then for a new candidate to emerge , enter at least the california and new jersey primaries ( june ) , perhaps ohio and indiana ( may ) , and develop enough momentum to be brokered through to the nomination between june and july , when the conclave opens in atlanta ? it won't be easy . the candidates who have expended so much heart , energy , time and money in slogging around the country over the past two years can be expected to restrain their enthusiasm over a johnny - come - lately who rushes in at the last moment and tries to sweep up the chips . some voters may feel that way too . one school of thought , located in georgia , holds that the present candidates will defer only to a person of such transcendent eminence that their own stature would not be diminished by his nomination . these people , a doughty corps of true believers , forecast the resurrection of jimmy carter . now , ex - presidents have an understandable desire for vindication . herbert hoover went to the republican convention in hoping that the delegates would turn to him . jimmy carter's chances for renomination are about as good as those of that earlier engineer in the white house . democratic " deus ex machina " speculations these days turn rather to three names : sens . sam nunn of georgia and bill bradley of new jersey and gov. mario cuomo of new york . he has demonstrated an impressive mastery of national security issues and has somewhat moderated his conservative positions on domestic issues . but he remains too conservative , i would think , to carry much appeal outside the white south . sen. bradley is a serious - minded and intelligent man who , for better or worse , produced a revision of the tax code and has made valuable contributions to the discussion of the latin american external debt . but , except for conservation , he has not identified himself with any of the historic issues of the democratic party -- the use of government to promote the general welfare ; or regulation in the public interest ; or the plight of the ill - housed , ill - clad , ill - nourished ; or racial justice ; or civil liberties . his advocacy of the flat tax would have appalled cordell hull , the father of the progressive income tax amendment , and speaker jim wright is surely more in the democratic style when he opposes sen. bradley's insistence on the scheduled reduction in tax rates for the rich . his contribution to policy toward the soviet union is to propose that " we demand economic reform as a condition . . . for permitting the soviet union to borrow on more favorable terms " -- an approach calculated to do little but irritate a proud nation seeking respect on the international scene . i may have him wrong ; but he hardly seems much of a democrat , at least in the roosevelt - truman - kennedy - johnson sense of the word , and it is not easy to see what in his public record entitles him to consideration as a democratic candidate . unavailability always enhances a politician's charm , and one doubts that the bradley boom would survive his first fortnight on the hustings . nor can either sam nunn or bill bradley be said to have an electric personality . gov. cuomo possesses electricity in abundance . but , like the other two , he has been quite determined in saying that he will not be a candidate in . many democrats decline to take him at his word . but suppose all signs on march point to a deadlock ? suppose a cross - section of democrats calls on him to remember his obligations to his party and his country ? it would still not be too late to enter the california and new jersey primaries -- both states made to order for gov. cuomo . he could even run in new york . so the dream goes . maybe it is a pipe dream . anyway , it will be an entertaining spring . mr. schlesinger is albert schweitzer professor of the humanities at the city university of new york and a winner of pulitzer prizes in history and biography . the general accounting office's analysis of the october stock - market crash concludes that the new york stock exchange's computer systems exacerbated the market's problems and recommends that regulators monitor those systems more closely , according to a source familiar with the report . the report , scheduled for release this morning at a congressional hearing , implicitly criticizes the securities and exchange commission for paying inadequate attention to the technologies used by the exchanges . it recommends that the agency approve the exchanges' computer systems as they are introduced , and periodically review their operations . it says the sec possesses the statutory authority to conduct such audits , but hasn't used it . the report also says regulators and exchanges should devise contingency plans for another crisis , but doesn't make detailed recommendations . it also calls for better coordination of regulation between markets , but again doesn't say how . " it's very short on specifics , " the source said . like the brady task force's market - crash study released earlier this month , the gao report focuses on the linked nature of financial markets . the third major study of the crash , that done by the sec , is expected to agree with the brady panel's analysis of events , but differ over remedies . a draft of that report is being reviewed by the sec's five commissioners and is scheduled for release next week . the gao's recommendations are far less sweeping than those made by the presidential commission , the source said , and seem to be based on the presumption that the existing regulatory structure doesn't need to be overhauled . nevertheless , he said : " it corroborates brady . it's another voice saying we've got closely linked markets , and need more closely coordinated regulation . " the gao study , being released at a hearing of the house subcommittee on telecommunications and finance , may prove most significant for focusing additional congressional attention on shortcomings of the new york stock exchange . lawmakers already have been spurred by the brady report to reevaluate the big board's performance and post - crash statements . the gao found that the new york stock exchange " had particular operational difficulties on oct. , and that nine of the basic computer systems were essentially swamped , " said the source , who didn't elaborate on these systems . that system electronically links regional exchanges with new york . a spokesman for the new york stock exchange didn't dispute the first of those two findings . " if everybody tries to get out the door at the same time , i would think some systems would be swamped , " he said . he said he couldn't comment on the second finding without seeing the gao report . he added that the big board currently is increasing the capacity of its systems . just last month , richard grasso , executive vice president , capital markets , of the new york stock exchange , told the house finance subcommittee that in light of the demands placed upon it , the exchange " performed admirably . " he went on to say that the exchange's specialists , or market makers , probably only failed to meet standards in " isolated instances . " it also said that of the exchange's specialists exhausted their buying power by the end of oct. , and that the big board had launched separate investigations of specialists' performance during the crash . mcclatchy newspapers inc. , thwarted by the october stock market crash from launching an initial public offering in november , said it will try again in february . sacramento , calif. - based mcclatchy , a family - owned company that publishes the sacramento bee and other west coast newspapers , will submit a new prospectus to the securities and exchange commission tomorrow , setting an offering price of between and a share . before the crash scuttled its plans , the company was hoping to get to for each of the million class a shares , with the company selling million shares and certain holders selling the remainder . according to erwin potts , mcclatchy president , the revived offering will follow the plan set out in the initial prospectus , leaving million class b common shares in the hands of the mcclatchy family , which has owned the company since its founding in . those shares will have times the voting power of the newly issued class a shares . this will allow the family to wield of the voting power of the company's combined classes of stock . such a share - voting structure isn't unusual . " this is really a precaution against the family losing control , rather than an attempt to raise capital , " mcclatchy's mr. potter said . " we were just waiting for a more stable market . " he said the offering could take place as soon as feb. , if the sec approves the prospectus . in most parts of the world , a restaurant that kicks out its customers for not eating fast enough is called rude . here , it's called a " clever concept . " that , at least , is how david ludtke , restaurateur , describes his hourglass tavern , a midtown restaurant where diners are required to eat with hourglasses suspended over their tables . when the sand runs out , the customers have to leave . this inhospitable rule -- printed on the menu -- is mr. ludtke's solution to the problem he faced when the restaurant opened last may : how to serve cheap meals in a tiny space and still turn a profit . the answer , he decided , was quick turnover . so , counting on new yorkers' penchant for putting up with the ridiculous and calling it fun , he decided on the hourglass gimmick . so far , most customers have accepted the idea . " at first i felt under the gun , and i really scarfed the salad down , " says scott killian , a composer . " but then when the entree arrived , i realized i had plenty of time . " mr. killian adds that " in harrisburg , pa. , where i come from , a restaurant like this wouldn't last two days before the waiter got murdered . " you agree to participate in an event . you know , when in rome . . " his dinner partner , lyricist david sinkler , says it reminds him of an episode in " the wizard of oz , " in which " the wicked witch turns over the hourglass for dorothy and says , ' this is all the time there is for you , my pretty. ' " still , mr. sinkler says , the time limit isn't a problem because " speed eating is the normal modus operandi in this city . " that's how mr. ludtke feels . " how long does it really take to eat an entree ? " he asks . " ten minutes ? " he says most of a meal is really spent not in eating , anyway , but in " excess . " " you nurse a drink , you nurse a menu , you nurse the wine list . we've eliminated all that excess . " he claims that customers almost always finish within an hour and that waiters are successful in hurrying dawdlers " with a little tap on the hourglass . " but despite his apparent success , he doesn't plan to install timers at his other eatery , a mexican restaurant called mike's american bar and grill . " i wouldn't think of it , " he says . " that's more of a drinking restaurant . " editorial staffers at forbes magazine are in an uproar over reports that malcolm s. forbes , the magazine's owner , quashed a story critical of the internal revenue service . the story , an investigation into alleged corruption in the internal security division of the irs , was written by associate editor richard behar . it had been edited and approved for publication by senior editors at forbes , some top staffers said . but they said mr. forbes killed the story , and that they believe he did so after he was contacted by the irs. mr. forbes wouldn't comment on the story , saying only that articles aren't officially accepted for publication until they appear in print , and he emphatically denied any contacts with the irs about the story . mr. behar declined to comment , but other forbes staff members said this incident has been unusually upsetting because the story had received the full support of top editors at the magazine . " this is a major crisis around here , " said one staff member who , like others contacted for this story , requested anonymity . mr. forbes said he'd had no communication with anyone from the irs trying to dissuade him from publishing such a story . " i assure you that forbes doesn't kill stories at the request " of the irs or anyone else , he said . indeed , he added , " such a call would almost ensure the appearance of such a story . " mr. forbes also said he " would be hard - put to think of the commissioner's name . " through a spokeswoman , mr. gibbs denied that he had ever spoken to mr. forbes about the story . " the commissioner has never spoken to mr. forbes about this or anything else , " the spokeswoman said . " mr . gibbs didn't talk to anyone at forbes except mr. behar . " forbes staffers said that they have received no explanation of why the story wasn't published . some staffers said they were told that mr. forbes' position is that the story doesn't make a compelling case against the irs . they also said it is still possible the story may be published in some form . he denied that mr. forbes had been pressured by the irs about any story . " malcolm has never talked to him ( mr . gibbs ) on the telephone , by mail or pony express , " mr. michaels said . " it just isn't true . " mr. behar's story grew out of an article published in forbes last november about how guess inc. , maker of guess jeans , was alleged by a competitor to have used the irs's los angeles district office to harass the competitor . mr. behar reportedly spent nearly three months on the more recent irs article . federal thrift - industry regulators are stepping up efforts to lure several billions of dollars in deposits to savings and loans in the southwest that are desperate for cash . the initiatives , which are expected to be formally reviewed by the federal home loan bank board in the next few weeks , are designed to whittle away at the high interest rates being paid on certificates of deposit by some of the most troubled savings institutions in the region . by making more money available to the thrifts , regulators hope to shrink the " texas premium " that has increased the cost of funds for all institutions in the troubled region , including commercial banks . the texas premium is currently more than one percentage point above what thrifts nationwide are offering for six - month and one - year certificates of deposit , according to highest yields , a north palm beach , fla. , newsletter . and some texas thrifts pay as much as two percentage points above what commercial banks nationwide offer . the premium reflects the huge number of unprofitable s&ls in the state and the surrounding area that are scraping to maintain their liquidity . regulators are considering three different proposals , each of which could attract billion to billion in deposits . if the bank board approves the programs , two of them could begin in days and the third may be operating in six months , he said in an interview . he declined to give other details , saying , " we are creating something new and different . " these proposals are in addition to two previous efforts conceived by mr. barclay's bank last year . one of those efforts has lured about billion in lower - cost deposits to about of the most troubled thrifts from about better - heeled s&ls with excess cash . another effort , which mr. barclay expects to announce next week , is aimed at opening the door to several billion dollars more by providing a safety cushion for wall street brokerage houses , money brokers and their customers that hold certificates of deposit in the region's shakiest institutions . the high cost of deposits is exacerbating loan loss problems in texas , where most thrifts are operating in the red and about one - third have negative net worth , or assets minus liabilities . so far , regulators haven't had much luck at chopping away the premium . in one case , mr. barclay negotiated for several months to get some top wall street firms , such as merrill lynch & co. , to consider participating in one funding program . if the bank board approves mr. barclay's latest plans , " the premium will come down , " he said , " but i don't think it will totally go away until the economic problems of texas go away and we resolve all the problems of troubled thrifts . " henley group inc. , stymied in its efforts to acquire santa fe southern pacific corp. , said it will launch a proxy battle for positions on the chicago - based railroad giant's board . la jolla , calif. - based henley also attacked santa fe's anti - takeover defenses with a court challenge that legal scholars said might become a benchmark case . and in a securities and exchange commission filing , henley said it boosted its stake in santa fe to from reported oct. . santa fe shares gained cents yesterday following the announcements , closing at in new york stock exchange composite trading . henley shares fell cents , closing at in national over - the - counter trading . henley said it doesn't plan currently to seek control of santa fe through a tender offer or merger . last month , santa fe terminated merger talks with henley and said it would implement a restructuring program that would pay holders at least billion . the companies in october began negotiations on a santa fe proposal that henley pay a share for the santa fe stock it didn't own , a transaction valued at about billion . henley has hinted in recent sec filings that it was considering a proxy battle . henley's problem is a santa fe defense that appears to bar a coordinated proxy campaign by dissidents . in its sec filing yesterday , henley said it wants representatives of olympia & york developments ltd. , the holder of a stake in santa fe , to join a proposed slate of henley director - nominees . henley said it hasn't been able to discuss this plan with olympia & york , because of changes that santa fe made last month in its shareholder rights plan , or " poison pill , " that enable santa fe holders to buy santa fe stock or other assets for half - price when any single shareholder or group of holders owns more than of santa fe . the trigger point previously was . in the lawsuit filed yesterday in delaware chancery court , henley called the dec. change in the poison pill , together with a dec. lengthening of the notice period for proxy solicitation , an " inequitable manipulation of santa fe's corporate machinery . " in chicago and toronto , respectively , spokesman for santa fe and olympia & york declined to comment on any aspects of henley's filings . in its suit , henley added that triggering the poison pill would result in a dilution of henley's voting strength in santa fe to about from and a drop in the market value of the stake to about million from about billion currently . legal scholars said henley's suit may result in a benchmark ruling by the delaware courts on the extent to which terms of a poison - pill defense may be changed in the middle of a takeover battle . a poison pill is designed to make a takeover prohibitively expensive . " it could indeed be seen as chapter two of moran vs . household international inc. , " said geoffrey p. miller , a law professor at the university of chicago , alluding to the key case in which the delaware courts said that poison - pill defenses were legal . mr. miller said the henley - santa fe case goes beyond the abstractions of the household international case , where an offer to acquire the company hadn't been made . " the ultimate response to an actual takeover bid must be judged by the directors' actions at that time , and nothing we say here relieves them of their basic , fundamental duties to the corporation and its stockholders , " the court wrote at the time . ironically , henley is being represented in its case by wachtell , lipton , rosen & katz , the powerful new york law firm that is credited with inventing the poison pill and that defended household international's use of it . a spokesman for the firm denied any conflict of interest . " we have always felt that a board ( of directors ) has to act responsibly in using a shareholder rights plan , " he said . a shareholder rights plan is a preferred term for the poison - pill defense by its proponents . skadden arps argued the case against the poison pill in the household international case . but skadden arps's position in the henley - santa fe case was unclear . lawyers for henley said they had been told another law firm would represent santa fe . a skadden arps official didn't return phone calls seeking comment . henley , in its case , asked the delaware court to declare that the santa fe poison pill won't be triggered by discussions between henley and olympia & york . it also asked for preliminary and permanent injunctions barring a triggering of the pill as a result of henley's proxy efforts . a henley official said the delaware chancery court has scheduled a feb. hearing on the request for a provisional injunction . in connection with its proxy solicitation plans , henley said it asked santa fe yesterday for a list of holders and for formal notification of the date and place of santa fe's annual meeting . henley also asked that santa fe clarify the number of directors that will be elected at the meeting . the santa fe board has three classes of directors with staggered terms . earlier , seven of the directors were up for election this year , but two retired , indicating a reduction to directors , including five up for re - election . in its sec filing yesterday , henley said it spent million , excluding commissions , to buy santa fe shares between last wednesday and monday for to a share . the purchases , at an average price of a share , boosted henley's holding to a total of of santa fe's approximately million shares outstanding . warner - lambert co. proposed to boost its quarterly dividend and said it will resume a previously halted study of the drug tha as a treatment for alzheimer's disease . joseph d. williams , chairman and chief executive officer , told analysts he will recommend that the board increase the quarterly dividend to cents a share from cents a share . he didn't elaborate on the effective date of such an increase . mr. williams also said the morris plains , n.j. - based drug and consumer products company expects to report profit increases of to a year as long as annual sales increase to . for , he estimated , warner - lambert will report that per - share earnings climbed , excluding a one - time gain from a sale in the prior year , to . net income for was million , or a share , including the one - time gain of million , or cents a share , from a sale of a company unit . the profit and a strong earnings outlook for paved the way for the dividend boost , he indicated . warner - lambert's stock closed in composite trading on the new york stock exchange yesterday at a share , down cents . he said the profit and revenue growth in resulted from strong sales of consumer and prescription drug products and from the weakened u.s. dollar , which translates into higher sales from operations abroad . a share - buy - back program buoyed per - share earnings ; the company currently has common shares outstanding , down from shares a year earlier . at the analysts' presentation , melvin goodes , president and chief operating officer , said the company expects to resume studies of the experimental alzheimer's disease drug tha that were suspended in november when eight patients developed signs of liver problems . mr. goodes said the liver problems disappeared when the patients stopped taking the drug , a sign that the problem was reversible and not serious . he said the company and the u.s. food and drug administration decided to restart the study using a lower dose of the drug that isn't expected to damage the liver . in a preliminary study reported in late , tha sharply improved memory and functioning for of alzheimer's disease patients . under an agreement with the fda , if the drug proves useful warner - lambert will get exclusive rights to market tha for several years . the patent for tha expired many years ago . tha received much publicity when the government agreed to test the drug . the original study , by california physician william summers , has been criticized for the way it was conducted and dr. summers has been criticized for lack of documentation . the study appeared in the prestigious new england journal of medicine . the french government will resume its program of selling state assets to the public tomorrow by floating its stake of about in the defense and electronics group matra s.a. , the government and matra announced . the sale will mark the first privatization operation since october , when the stock - market crash forced the government to interrupt its ambitious plan to sell banking , industrial and insurance groups to the public by . government officials said the resumption of the program demonstrates the government's confidence that the stock market has stabilized . but the officials cautioned that the matra operation is small , and said that they don't now plan any large - scale sales before the april presidential election . the government had planned to float matra in late october but canceled the operation only days before its scheduled launch . in a television interview two weeks ago , finance minister edouard balladur said if he resumed the privatization program , he would begin with matra . under the matra sale , the government will sell only of the company's shares , valued at less than one billion french francs ( million ) , directly to the public . matra's staff will be offered of the shares at preferential rates , and the state will retain for a free share distribution later . the rest is already traded on the market . the issue price and names of the stable shareholders will be announced today ; matra trading was suspended yesterday pending the sale . but based on matra's closing price friday of francs ( ) a share , the shares should be priced at about francs each , because matra plans to divide its shares by before the sale , which lasts through jan. . matra has interests in defense , space , electronics , telecommunications and transport . the french government , which considers matra as vital to national interest , will exercise its so - called golden share , allowing it to veto stakes exceeding . analysts said the sale is important because the government has staked much political capital on the privatization program and prime minister jacques chirac , who announced his presidential candidacy this weekend , is keen to put the program back on track . bellsouth corp.'s southern bell unit filed a petition with the florida public service commission to lower bills of its million florida customers as much as million through . the plan , in turn , would allow the unit of atlanta - based bellsouth to keep half of any profit it makes above the earnings ceiling currently prescribed by regulators . under present regulations , southern bell's allowed rate of return -- effectively an earnings cap -- is fixed at of equity . profit earned in excess of that level must be refunded to customers . in , southern bell , which also provides phone service in georgia , north carolina and south carolina , reported an average rate of return of . " when you have an earnings cap , and you're at your ceiling , there's not much incentive to earn above that level , " said larry e. mixon , a southern bell official in florida . " the plan will motivate us to stimulate new revenue and cut costs . " the unit is already streamlining operations in florida , he said , and looking to offer new services , especially information products . if the plan is approved , mr. mixon said investors will see a " positive impact on overall earnings in " ; he declined a more specific projection . because of the reductions in phone rates , southern bell's plan initially would have the effect of lowering revenue by about million through . however , the telephone company contends it can make up difference with new services . the plan also calls for lower rates for florida wats , which discounts long - distance service for volume users , service and long distance in areas southern bell serves . john bain , an analyst with shearson lehman bros. , praised the proposal because it " allows some money back to investors . " he said new york - based nynex corp. is the " best - performing bell stock because it obtained a similar agreement last year . " last april , nynex's new york telephone co. became the first of the bell operating companies to chip away at ceilings imposed on phone company earnings . soon after , chicago - based ameritech inc. gained approval for such a plan from regulators in wisconsin and michigan . southern bell said it is considering filing similar petitions in georgia , north carolina and south carolina . earlier this week , san francisco - based pacific telesis group's pacific bell filed a similar proposal in california . listening to pat robertson sometimes is a little like plugging into a data base quietly gone berserk . -- how king william iii of england was snookered into letting a scotsman , william paterson , " invent a practical money machine " by setting up the bank of england in . central banks , he said , have been charging interest on money they " create out of nothing " ever since . -- how u.s. companies are snookered by asian competitors . " when an american firm brings out a computer program or a computer system , " he said , " the time it takes to be carried back to asia , copied , manufactured and brought back for sale in america is all of three weeks . " -- how the state department has been infiltrated by members of the council on foreign relations and the trilateral commission . " we won't have these people from the eastern liberal establishment in my administration , " he vowed . the council on foreign relations , he has said , believes " nationhood per se is obsolete . " he says all kinds of things all the time . some of it is accurate enough -- william paterson really did found the bank of england -- but some of it is flat wrong . and he says he has been told preschool kids in bakersfield , calif. , are taking drugs . mr. robertson founded his christian broadcasting network in . in the years since , on his " club " show , he has discussed hundreds of subjects with thousands of people in millions of words . he has written five books , delivered countless speeches . the record rivals the national archives . there is no doubt that mr. robertson -- republican presidential candidate , born - again , charismatic preacher and yale law school graduate -- is smart . he once told former rep. pete mccloskey his iq is . later , he told this newspaper it's . he stores much of what he has heard or read , and frequently unloads bits and pieces in his campaign speeches . most of the time , his own staff can't say where the information comes from . it is not unlike president reagan , who has filed away little scraps of information for years , too ( the legendary chicago " welfare queen , " for example , who had names , addresses and social security cards ) . mr. robertson frequently recalls the story about preschoolers using drugs in bakersfield ; another scrap involves a survey one of his organizations took of students at the university of maryland . " we asked one student , ' could you tell us what three countries the united states fought in world war ii ? ' . they said yes. 'we fought korea . we fought pearl harbor and we fought the spanish.' . " the story , he said , demonstrates a serious flaw in the nation's educational system . asked about it later , john s. toll , the university of maryland's president , said he thought it only demonstrated that maryland students have a sense of humor . for months , mr. robertson insisted that " over people in government serve at the pleasure of the president . " he added , " i'm told that a good portion of them are jimmy carter appointees and holdovers . " he said the first thing he would do as president would be to ask for the resignations of all of them . in fact , the white house says , there are full - time people serving at the president's pleasure and hardly any worked for mr. carter . in recent speeches , mr. robertson has made the correction himself . mr. robertson's spokesperson says an unidentified bakersfield policeman told mr. robertson about the drug use when he visited the city last year . mr. robertson regularly lambastes the government for wasting the taxpayers' money . he told the daily oklahoman , in oklahoma city , for example , that to of federal money intended to help the poor is eaten up by overhead . randy teach , deputy assistant secretary at the health and human services department , says overhead costs for the medicaid program , providing health care for the poor , run to annually . administrative costs to run the other major program for the poor -- aid to families with dependent children -- are about , he says . other regular targets are the trilateral commission and the council on foreign relations . mr. robertson says he would clear the state department of " people who were placed there by the trilateral commission . " the commission was founded in by banker david rockefeller to analyze major issues facing north america , western europe and japan . " we certainly don't run a placement bureau , " says charles heck , the north american director . he says the only member in the state department now is deputy secretary john whitehead . jonathan zemmol , the public - affairs director , says the council is nonpartisan in nature and has never published an article or a book " promoting a one - world government . " he notes mr. robertson spoke at the council's new york headquarters march last year . his topic : " toward a democratic united nations . " another popular target is the new york city school system . mr. robertson says to of schoolchildren there drop out before they graduate . a school spokesman puts the drop - out rate in - at , down from in - . mr. robertson's biggest target is abortion . he has accused the democratic " family " -- " tip o'neill as our daddy , bella abzug as our big sister and teddy kennedy as our younger brother " -- of slaughtering million of its unborn every year . he says that by the year , million legal abortions will have been performed in this country -- " worse than what happened in nazi germany , " he told the burlington ( vt. ) . free press . " the hands , hearts and arms of these children killed would have produced trillion in our gnp by . " he says the number of legal abortions being performed has been dropping year by year . the chicago board of trade received regulatory approval for daily price limits on its stock - index futures contracts , the first permanent limits on the controversial financial instruments . price limits , which are common in futures contracts but until recently haven't been applied to stock - index futures , were adopted by the exchange in response to the heightened market volatility that resulted from the oct. stock market crash . the brady commission , appointed by president reagan to study the oct. crash , recommended last week that price limits on stock - index futures and trading halts on stocks should be coordinated to quell extreme volatility in the stock and futures markets . the board of trade's directors , as previously reported , voted to set daily stock - index limits last nov. , pending approval from the commodity futures trading commission . futures - industry officials said it is unclear whether the limits would have lessened or worsened the impact of the crash if they had been in place at that time . other traders contend that limits may actually spur selling in a falling market as traders rush to sell contracts in case the limit is reached and they are locked into their positions . on oct. and , each of the stock - index - futures contracts moved in excess of the limits that have subsequently been placed on them . the board of trade set a - point daily limit on its major market index future based on blue - chip stocks . if major market contracts in three or more delivery months hit the limit up or down for two days in a row , the limit will be extended to points . the limit on the - stock institutional index futures contract is points , and can also be extended to points if the limit is hit on two consecutive trading days . the chicago mercantile exchange , which trades futures on the standard & poor's stock - index , instituted price limits on an emergency basis shortly after oct. . the s&p stock - index future , which accounts for about three - fourths of all stock - index futures trading , has a - point daily limit . the new york futures exchange and the kansas city board of trade followed with similar limits on their stock - index - futures contracts . a chicago mercantile spokesman said the exchange plans to apply for cftc approval for permanent limits . if you want to be all the rage in paris these days , what you need is the " chemise tonton . " the expression means uncle shirt , and that's exactly what it is : a silk shirt covered with graffiti - like hand - written slogans glorifying uncle francois , like " i love you , tonton , " or " don't go , tonton . " and it is yours for just french francs ( ) . tonton is the affectionate nickname given to french president francois mitterrand , and this shirt is just one of the many gimmicks that have sprung up in recent weeks in a bid to encourage mr. mitterrand to answer " oui " to france's best - kept secret : will he run again ? presidential elections here are only four months away , and no one , not even , reportedly , mr. mitterrand himself , knows yet if he will seek a second seven - year term , even though polls show him ahead . the question clearly torments politicians , political analysts and voters . for example , yesterday's annual ceremony of good wishes for the presidential press corps was dominated by dozens of ingeniously posed questions to mr. mitterrand about his intentions . another reporter told mr. mitterrand she had heard he would make a televised declaration at p.m. on feb. . he easily batted the questions away , saying delphically that " when the time comes " he would " tell the country what i think i can do for its further service . " mr. mitterrand , a socialist , won the election , but his popularity then plummeted and his party lost to the center - right in the parliamentary elections of . since then , mr. mitterrand has had to share power with conservative prime minister jacques chirac -- but the president's standing in the polls has soared as he has emerged as france's revered elder statesman . many of france's glitterati obviously think that what he could do for france's service is run again and win , and they are sparing no effort to tell him . in addition to the tonton shirt , which its creator says is selling briskly , the last few weeks have seen a proliferation of pro - mitterrand initiatives . it began with the independent monthly magazine globe running a cover story with the headline " ne nous quitte pas " ( " don't leave us " ) . " we really want him to run again and we wanted him to know , " says editor georges - marc benamou . " he's the best . " the petition became a " cause celebre " because one of its signers was dominique jamet , an editorialist for the fiercely anti - socialist daily le quotidien de paris . one day after the globe issue appeared , mr. jamet was fired . this was followed by a full - page advertisement taken out by the pop star renaud in the socialist - leaning daily le matin that said , " tonton : don't give up ! " a few days later he was imitated by the actor gerard depardieu , who took out a - franc ( ) full - page ad in le parisien libere saying he would vote for the first time , and that he would vote for mr. mitterrand . and yesterday , the pop star catherine lara took out an ad in le matin saying , " for , best wishes to president mitterrand , " thus implying that he would still be president this time next year . all this has the look of an orchestrated campaign , but presidential aides deny mr. mitterrand has anything to do with it . but so far , they haven't swayed mr. mitterrand . he says he finds all this very nice but the question is " out of season . " aides say the - year - old president is inclined not to run , but could change his mind . factors that could persuade him to enter the race are his commanding lead in opinion polls and the widespread belief that no other socialist besides mr. mitterrand could win . and if he needs more help deciding , marie beltrami , the inventor of the tonton shirt , has another card up her sleeve : the tonton t - shirt . she concedes this is " more like propaganda , " but , she says , " i'd like him to stay and you have to use all means available to say this . " america's presidential campaigns are being steered this year largely by the same group that has run them in the past : white men . even though the election marks the first time a woman has run a major presidential campaign -- susan estrich , the harvard - trained lawyer and harvard law school professor who manages michael dukakis's drive -- a wall street journal analysis shows that women and minorities have made relatively few inroads among the upper echelons of presidential candidates' staffs . white men make up of the u.s. population , but they still hold of the top campaign jobs , despite the gains that women and minorities have made over the past decade or so . women , who constitute slightly over half of the population , account for just of the top campaign spots . and minorities , who are of the population , hold just of those senior campaign jobs , the analysis indicates . " there's much more lip service to women's rights and women's issues , but clearly the numbers are unacceptable , " says historian elisabeth griffith , a republican board member of the bipartisan women's campaign fund . -- surprisingly , the campaign of republican pat robertson , the conservative former television evangelist , has the largest number of women in top campaign jobs . three of his top senior campaign aides are women . -- not one of the republican candidates has a minority staffer in his top campaign jobs . " it's inexcusable , " acknowledges john buckley , the spokesman for gop rep. jack kemp . mr. kemp has frequently spoken out about the need for his party to broaden its base among minorities , suggesting that first the gop has to learn how to win black votes . every one of the democratic campaigns has at least one minority in the senior staff . -- the campaign of former gop gov. pete du pont of delaware has a record : all of the top staffers are white males . " it's just the uniqueness of who's attracted to the political process , " suggests du pont press secretary frederick stern . " the people who have approached us to join the campaign have been generally male and generally white . " -- even black presidential candidate jesse jackson has a white campaign manager . five of mr. jackson's top aides are minorities ; two are women . the journal drew up its lists of the top advisers -- necessarily a subjective ranking -- from information supplied by high - level campaign aides about which staffers were most involved in the areas of fund - raising , strategy , field organizing , media and message . in most cases , the lists include the staffers running the two earliest - contest states , iowa and new hampshire . the lists didn't include candidates' family members and some elected politicians who are important advisers , such as house majority whip tony coelho for rep. richard gephardt , tennessee gov. ned mcwherter for sen. albert gore jr. and sen. warren rudman for sen. robert dole . after the journal later asked for comment about the percentages of minorities and women , several campaigns argued that more women or minority staffers should be substituted for white males in their lists of the top , but most of these arguments weren't accepted . " while the numbers don't look great they still look better than previous election years , " says irene natividad , who heads the national women's political caucus . a study by the caucus found that women hold almost half of the overall staff jobs in most campaigns . yet the evidence suggests that women still have a long way to go . " progress is coming , " says ms. estrich , " but it's probably coming a whole lot more slowly than many expected . " on the subject of pay , for instance , a study of the staffs conducted by the women's political caucus found men's average salaries were higher than women's in every campaign except that of massachusetts gov. dukakis . there are similar concerns about the paucity of minority - group members at the top levels of the presidential campaigns . christopher edley jr. , a black harvard law school professor who is mr. dukakis's issues adviser , worries that young blacks aren't rising in the campaign ranks because they can't afford to start out as volunteers , the way so many political experts do . " it's not an attitude problem , it's an economic problem , " he says . what's more , the lack of minorities and women in the top campaign ranks is far more important than the overall numbers of such staffers in a campaign . for one thing , that is the level where the key campaign decisions are made . for another , top political aides often become high - ranking presidential advisers or cabinet officers , as did john mitchell for richard nixon , hamilton jordan for jimmy carter , and william casey , james baker and edwin meese for ronald reagan . most of the campaigns insist they are trying to reach out to get more minorities and women involved . when mr. kemp is asked about the roles of minorities and women in his campaign , he says : " we have a lot of jews in the campaign . women are spokesmen in a lot of states . " the gephardt campaign notes that it has just hired a woman , ali webb , to be press secretary . yet many minority and female aides say significant obstacles remain in the presidential arena . " i feel very good about the progress we've made , but it's been very lonely , very difficult at times , " says donna brazile , a - year - old black janitor's daughter who is mr. gephardt's national field director . " the barriers still exist , " she says . " they're walls , even . " babbitt : duane garrett , national chairman ; lauren post , finance director ; greg schneiders , pollster ; frederick duval , campaign manager ; barton gellman , issues director ; elaine kamarck , deputy campaign manager ; michael mccurry , press secretary ; sergio bendixen , consultant ; christopher hamel , iowa coordinator ; michael muir , new hampshire coordinator . dukakis : susan estrich , campaign manager ; paul brountas , campaign chairman ; paul jensen , political director ; christopher edley jr. , issues director ; nicholas mitropolous , executive assistant ; thomas kiley , senior adviser ; robert farmer , national treasurer ; jack corrigan , operations director ; charles baker iii , new hampshire coordinator ; teresa vilmain , iowa coordinator . gephardt : william carrick jr. , campaign manager ; richard moe , adviser ; terence mcauliffe , finance chairman ; robert shrum , consultant ; ed reilly , pollster ; donna brazile , field director ; joseph trippi , deputy campaign manager ; joanne symons , consultant ; stephen murphy , iowa coordinator ; mark longabaugh , new hampshire coordinator . jackson : gerald austin , campaign manager ; willie brown , national chairman ; frank watkins , communications director ; steven cancian , new hampshire coordinator ; john norris , iowa coordinator ; laura murphy minor , fund - raising director ; eddie wong , field director ; steven lassiter , controller ; carolyn kazdin , deputy campaign manager ; armando guttierez , texas director . simon : charles manatt , campaign chairman ; brian lunde , campaign director ; terry michael , communications director ; barbara pape , deputy political director ; paul maslin , pollster ; david axelrod , media strategist ; patrick mitchell , iowa coordinator ; michael marshall , new hampshire coordinator ; bob edgar , finance director ; sterling henry jr. , deputy political director . bush : lee atwater , campaign manager ; nicholas brady , senior adviser ; richard bond , political director ; peter teeley , communications director ; roger ailes , media adviser ; craig fuller , adviser ; robert teeter , senior adviser ; robert mosbacher , finance director ; andrew card , new hampshire coordinator ; janet mullins , field director . du pont : glenn kenton , campaign chairman ; allan hubbard , campaign manager ; frederick stern , press ; frederic maas , new hampshire director ; dennis rochford , iowa director ; jack zadow , finance director ; robert perkins , deputy campaign manager ; jeffrey eisenach , research director ; timothy hyde , political director ; edmund carpenter , finance chairman . haig : brian sweeney , campaign manager ; jay bryant , media consultant ; vincent breglio , strategy consultant ; daniel mariaschin , communications ; kathy mackenzie , finance director ; darlene blake , iowa coordinator ; david young , new hampshire coordinator ; william lorick , southern coordinator ; harvey sicherman , senior adviser ; dominic saraceno , treasurer . kemp : edward rollins , campaign chairman ; charles black , campaign chief executive ; jeffrey bell , campaign coordinator ; anne stanley , political coordinator ; bentley elliott , speechwriter ; john buckley , press secretary ; roger stone , political consultant ; rodney smith , finance director ; paul young , new hampshire director ; scott reed , iowa director . robertson : r. marc nuttle , campaign manager ; robert slosser , adviser ; herbert ellingwood , adviser ; constance snapp , communications ; richard weinhold , fund - raising ; richard pinsky , field director ; mary ellen miller , voter identification ; gary lawrence , pollster ; marlene elwell , midwest director ; kerry moody , northeast director . cdf - chimie s.a. , a unit of france's state - owned coal authority , will acquire a blocking minority in coates brothers plc of britain in return for its ink - making unit lorilleux s.a. , according to an insertion in the official journal . the official publication for legal announcements said that in return for of lorilleux , cdf - chimie will receive a stake in coates through a capital increase by the british concern , to be reserved exclusively for the french group . coates is a leading british producer of industrial inks . cdf - chimie declined to comment on the announcement , except to say it was in " negotiations " with coates . it denied french news reports that cdf - chimie intends to pull out of the ink business . recent financial data for lorilleux weren't available , but the company had net income of million french francs ( ) on revenue of one billion francs for . cdf - chimie has another ink - making subsidiary , georget s.a . separately , another announcement in the journal said that rhone - poulenc s.a. , france's leading chemicals group , has been authorized to spin off three of its subsidiaries to chevron chemical co. of the u.s . they are orogil s.a. , orogil k.g. , and mineraloel additives vertriebs of west germany . rhone - poulenc officials weren't able to comment on the planned divestiture . but the spokesman declined to elaborate . theodore h. von laue , professor emeritus of history at clark university , has attempted a sweeping reinterpretation of th - century history , written , as he puts it , from an " elevated perspective . " what mr. von laue means by " elevated " is that he endeavors to rise above reflexive loyalty to the u.s. , his home since emigrating from germany in . mr. von laue argues that " the most important single force in modern history " is , in a phrase he uses as his title , " the world revolution of westernization " ( oxford , pages , ) . the rapid advance of technology has made possible vast accretions of economic and military power in the " western " countries , by which mr. von laue means primarily britain , france and , above all , the u.s . this in turn has generated agonized feelings of inferiority on the part of all other peoples , notably such non - westerners -- in mr. von laue's terms -- as germans and russians . their single - minded efforts to catch up constitute the main action of modern history . though " westernization " is the central idea of his book , mr. von laue is unclear what he means by the term . at times he implies that westernization involves a cultural transformation . at other times it is technological , not cultural . in our " self - centered , " " ignorant " and " arrogant " state , americans have launched an arms race to which the soviet union , he says , has had to respond , thus pushing the planet to the brink of catastrophe . the problem is that americans think much too well of america and much too ill of other countries . " . . . he remains one of the great figures of the th century. . . . he can fairly be judged . . . in strict morality , only by people who have risen through similar ordeals to positions of high responsibility. . . . all told , stalin had supplied the country with reasonably solid foundations for effective statehood in the competitive globalism of the th century . " leonid brezhnev , he says , " stood for a humane approach to leadership . " moreover , " brezhnev showed true statesmanship in combining soviet ambition with a note of conciliation that lent some credence to the soviet claim to leadership in promoting peace . " and in still more recent times , " the kgb became the political brain center of the soviet system , the training ground of future leaders more sensitive to the issue of human rights and public opinion . . . " " repression was not to mao's taste , " says mr. von laue . mr. von laue also heaps praise on such third world revolutionary leaders as egypt's gamal abdul nasser and ghana's kwame nkrumah , and he even has some softness toward hitler , whom he describes as " perhaps more a symptom of his time and environment than an independent source of evil . " indeed , from his declared stance of cultural relativism , the only government , besides those of the u.s. and england , that mr. von laue seems to genuinely dislike is the israeli . jews , he says , are " a peculiar people insisting self - consciously on their own ways as best . " israel today , he concludes , is under the sway of the " judeonazis " ( hastening to add that the term originates with israelis ) . what underlies these odd views ? mr. von laue writes as if the most painful ordeal to which a people can be subjected is invidious comparison . stalin's and mao's records , he says repeatedly , must be read in the context of the coarse human material it was their lot to handle . third world peoples suffer not merely from technological backwardness ; they are , he writes , " operating individually and collectively at greatly lower levels of vital human energy. . . . moreover , there may possibly exist biological limitations . " meanwhile , in the u.s. , " the run of people persist in their self - indulgent and petty ground - floor routines . " what is needed everywhere , says mr. von laue , is " tighter social discipline . " he acknowledges that some will see this as a threat to freedom , but he soothes : " liberation , however , comes in various forms , either by overthrowing the external compulsion or dissolving the inward objection through a change of will , through sublimation . " he continues : " seen from without , that tight social discipline appears as a form of submission or even enslavement , a source of discontent . viewed from within , it is a guarantee of civilizing liberation. . . . what is needed . . . is the daily effort in promoting the malleability of the individual will . " where have we heard this before ? from big brother , of course , from the billboards that proclaim " freedom is slavery . " mr. von laue is not merely an apologist for totalitarians . he affords us a glimpse of that impulse in its purest , idealistic form . for that , and little else , we are in his debt . mr. muravchik is a resident scholar at the american enterprise institute . the crisis is draining out of the farm crisis . and as it does , the importance of the " farm issue " in next month's iowa caucuses is melting away like snow in a january thaw . that issue seems unlikely to have more than a diffuse , muted impact -- ironic as it may seem in a rural state whose economy still pivots on agriculture . the old farm crisis , the stuff of magazine covers and hollywood movies , has become the farm problem : still serious , probably chronic , but with less power to inflame emotions and motivate caucusgoers . iowa's rural economy remains on a heart - lung machine , dependent upon record subsidies from washington . but as long as washington keeps pumping in those subsidies , the situation will remain stabilized , even improving a bit . that is " iowa's big secret , " says des moines register editor james p. gannon . " yes , yes , i know : it is practically un - american to say , right out loud , that the farm crisis is over , " mr. gannon wrote after hints of a rural turnaround began to come in last year . " but it is . " " farmers are spending money again , " concludes mr. corkrean , who's also the madison county democratic chairman . a big reason : federal programs like the conservation reserve , which pays them to idle crop land . last year , when the program offered bonuses for signing long - term contracts , a few area farmers reaped windfalls of or more . " it was a real sweet deal , " says mr. corkrean . or drop in at toad's place , a cafe in greenfield , in neighboring adair county . most any morning , you can find two groups there , taking coffee around their separate tables . they are the sweats ( who claim to be the harder - working ) and the never - sweats . among the sweats and never - sweats it is possible to find support for candidates as far apart as george bush and jesse jackson . what is almost impossible to find -- even in a county one sweat describes as " the ruralist of the rural " -- is a voter who seems motivated primarily by the farm issue . " there are so many other things that are important too , " says richard kuhl , a sweat and a county supervisor . " how a person handles himself . how you think he'd do . " last month the register spent about full columns to summarize the farm program of each presidential candidate . two weeks later , the big spread had yet to generate its first letter to the editor . iowans were far more likely to write about gary hart and donna rice . " issues aren't moving people this year , " concludes rep. david nagle , a former state democratic chairman . " character and competence are moving people . " the rural iowa landscape , black and olive drab in the slanting winter sunlight , remains pockmarked with signs of financial distress . most small towns , unlike beautifully refurbished winterset , look threadbare and rundown . statewide , roughly one - third of all iowa farmers are thought to remain in precarious financial shape . candidates still feel compelled to stress rural issues on swings through this state -- whether they're in the mood or not . " i ain't going to milk no cow in the mornin' , " jesse jackson protested to staffers on a visit to his state headquarters in greenfield last year . yet a photograph records that , at the crack of dawn the next day , mr. jackson was gingerly seating himself beneath the udder of a holstein cow . economically , rural iowa remains " a land divided , " says rep. nagle . even as the financially strong are getting stronger , the weak are barely holding their own . thus , each candidate tends to zero in on a piece of the whole : gop candidates robert dole and george bush work the prosperous ; democratic candidates like richard gephardt and paul simon concentrate on the merely distressed ; jesse jackson claims the downright despairing . but it's a lead - pipe cinch that most farmers won't participate in the caucuses at all . an iowa league of rural voters poll suggests that of iowa farmers may take part , though this may be optimistic . when the same poll asked which party was doing the better job of handling the rural problem , the winner , at , was " neither . " the subdued rural mood seems particularly striking when viewed from this part of southwestern iowa . for the little hamlet of orient , southwest of here , was the birthplace of henry a. wallace , an architect of the modern agricultural program and , more than that , an authentic voice of rural protest . today , iowa honors henry wallace with a granite marker in a wind - whipped little park in the cornfields . but interviews on the neighboring farmsteads find few traces of the wallace indignation -- or , for that matter , anybody who intends to participate in the coming caucuses . " i don't go in much for politics . just never got started , " explains roy murray , a laconic - year - old in big smith overalls . " i don't think the farmer will have much impact on any of them ( the candidates ) anyway , " shrugs dale pals , huddled in his hooded sweatshirt as hogs snort and snuffle in the background . he's probably right . the rural vote is a minority vote , even in farm states like iowa . and the political reality may be that what farmers already have -- the flawed but generous farm act -- is about as good as they're likely to get . " budget pressures tend to set current policy in cement , " observes eugene moos , agriculture adviser to house majority leader thomas foley ( d. , wash. ) . " in fact , this cannot go on , " worries steven niblo , a winterset farmer . " the taxpayer won't put up with it . " but for the moment , the act and its subsidies have brought a measure of relief to a rural economy that has known only pain for most of this decade . and mr. niblo , for all his concern about what the next administration may do , doesn't intend to participate in the caucuses next month . " nobody's come forward yet , " he says of the confusing candidate field . " we don't have a leader . " the appointment of a new chief executive officer at lloyds merchant bank reflects a sharply reduced role for the unit of lloyds bank plc , britain's third - largest bank . david horne , years old , was promoted to the post of chairman and chief executive on friday ; he had been head of the unit's corporate - finance division . he succeeded robert owen , , who is leaving the lloyds bank group after heading the merchant bank since its creation in . the leadership change reflects a scaling down of the merchant bank's involvement in financial markets since the middle of . because of losses , it ceased making markets in british government securities and eurobonds in june and also closed its securities - trading operations in tokyo , hong kong and new york last year . " we aim to have a nice , profitable merchant bank " concentrating on advisory services and corporate - finance activities , mr. horne said yesterday . he said the restructured division , which also will include investment - management activities and a stockbrokerage serving lloyds bank branches , probably will require capital of about # million ( million ) , compared with # million previously . the bank has a large third world debt exposure . but the changes mean that lloyds merchant bank probably will be less able to serve large corporate clients that require sophisticated capital - markets expertise , the analysts added . a group led by mccaw cellular communications inc. , apparently seeking to enlarge its already expansive cellular telephone system , disclosed a stake in graphic scanning corp. and indicated it wants a bigger role . in a securities and exchange commission filing , kirkland , wash. - based mccaw said it held discussions with graphic scanning representatives about " seeking to affect or influence the control " of the teaneck , n.j. - based cellular phone concern . mccaw said it wasn't seeking control now but that it anticipates more talks with graphic scanning " from time to time . " mccaw has purchased assets from graphic scanning previously . the filing disclosed that mccaw's parent , closely held mccaw communications cos. , is suing graphic in federal court in the state of washington . according to the filing , the suit is an attempt to enforce an alleged agreement by graphic to sell mccaw its interest in a milwaukee cellular telephone service company . mccaw also said it hired morgan stanley & co. as an adviser in its investment in graphic scanning and other companies . its graphic scanning stake consists of shares purchased from march to last wednesday , for prices ranging from to a share . earlier this month , lin broadcasting corp. , a new york concern with cellular interests , said mccaw bought a stake in it . mccaw already has cellular phone interests in markets . the company had a million net loss in on revenue of million . mccaw didn't return a phone call for comment . mccaw officials at graphic scanning were unavailable for comment . peugeot s.a. said consolidated net income after payments to minority interests surged last year , to billion french francs ( billion ) from billion francs in . the french automobile group's results , announced after the paris stock market closed , were in line with analysts' expectations . peugeot's shares fell seven francs yesterday , to francs ( ) . revenue rose last year , to billion francs ( billion ) from billion francs . debt was reduced by about one third , to billion francs from slightly over billion francs , while capital and reserves nearly doubled , to billion francs from billion francs . peugeot chairman jacques calvet said the earnings gain partly reflected firm demand in the european auto market . he said peugeot's share of the european market rose to from . in france , peugeot's market share climbed to from . the chairman linked this performance to the group's previous restructuring moves , as well as continuing efforts to develop new products , limit costs , improve quality , modernize and rationalize production and enhance productivity . the group said it used billion francs of such credits last year , compared with billion francs in . mr. calvet said peugeot's operations were " stronger than expected " in 's first quarter . peugeot's share of the french market rose to from a year earlier . its share of the european market rose to from . the federal trade commission decided to end a requirement that supermarkets keep enough stock on hand to meet the demand for advertised items . the ftc voted - to allow grocers to offer customers rain checks or substitute items when the store runs out of an item it has advertised . the amended rule also will permit supermarkets to advertise items for which stocks are low ; if they state in the ad that supplies are limited , they wouldn't be required to provide rain checks or substitutes . such options haven't been allowed since , when the commission adopted its supermarket advertising rule , requiring the stores to have enough stock to meet " reasonably anticipated demand . " the rule was adopted after studies showed that as much as of advertised items weren't available in supermarkets . since then , ftc staff studies showed a decline in the percentage of items that were unavailable , and that the costs of keeping added stocks on hand raised grocery prices more than sale prices reduced them . some staff officials have recommended dropping the rule or modifying it , and the ftc has been considering the recommendations since . messrs . oliver and calvani said their preference was for scrapping the rule altogether , but couldn't muster a majority for that action . mr. strenio wanted to leave the rule intact . small - stock professionals continued to buy shares in the over - the - counter market last week as prices slid and other investors raced to sell . by the close friday , the nasdaq industrial index had slipped in the week , although selling slowed on friday afternoon . the big sellers , traders said , were the largest institutions , which generally unloaded big positions in large otc stocks last thursday , and a number of individual investors who sold shares in smaller issues on friday . as a result of the selling among small issues by individuals , the nasdaq industrial index slipped a slim point friday to . but nasdaq issues fell , while only gained . few of last week's sellers were the small - stock professionals who manage otc specialty funds or asset managers that specialize in small stocks , traders say . this group of otc investors bought shares last week , and some say they plan more buying this week . " a sell - off is a good thing , as long as prices don't drop on heavy volume , " explains louis navellier , an asset manager who is also author of mpt review , a small stock investment letter . he was one of last week's buyers . nasdaq volume friday was million shares , even fewer than on thursday . at no time last week did volume equal the strong days of early march when it averaged about million . mr. navellier thinks otc prices will rise selectively over the next six weeks . " we are coming into a period when a number of small companies that are doing well will be reporting earnings , " he says . otc stock prices will generally rise as a result , he figures , but he doesn't expect a surge as big as the gain in the otc industrials in the first quarter , when the dow jones industrial average climbed . the small - stock professionals tend to do their selling in rising markets . mr. navellier figures he'll do most of his selling in about a month to six weeks . specific stocks these professionals are currently buying continue trends that developed in the first quarter . both are groupings of eight nasdaq service stocks that were badly hurt last year in the crash , despite generally solid earnings . on mr. navellier's buy list , for example , is senior service corp. , an elder care issue , that climbed in the first quarter to . last week the issue was unchanged at . that issue , with a market value of million , did even better than kinder - care the biggest issue in the group with million in market value -- which climbed in the quarter . and several tiny child care and elder care issues did best of all . a problem of the professionals is liquidity in stocks such as these . mr. navellier rarely purchases fewer than to shares . in the smallest issues even holdings of that size can hurt the price of the stock when he ultimately starts selling , he says . that's why few asset managers took advantage of the stocks in this group that performed best of all in the first quarter . those gains went primarily to individual investors who are able to buy fewer shares than the professionals . but that made prices of these small issues more vulnerable to last week's heavy selling by individuals . as a result , rocking horse child last week slid to / from / ; children's discovery dropped to / from / , and magic years child dropped to / from / . kinder - care , the one stock in the group big enough to attract big institutional investors , also slipped in the sell - off , dropping in the week through last thursday , when the big institutions dropped their shares . but it rallied / friday , closing at / for a week's decline of . seven issues began trading on the new york stock exchange recently . hadson corp. , oklahoma city , okla. , will begin trading this week under the symbol had . the company markets natural gas and builds and owns electrical power facilities . national heritage inc. , dallas , will begin trading under the symbol nhr . the company manages and operates health - care centers . american realty trust , a dallas - based real estate investment trust , previously listed on the american stock exchange , will begin trading under the symbol arb . american savings bank , white plains , n.y. - based mutual savings bank , will begin trading under the symbol asb. hadson , national heritage and american savings bank previously traded over the counter . high yield plus fund inc. , new york , started trading under the symbol hyp after its initial offering . the company is a newly formed diversified closed end management investment company that primarily invests in privately or publicly offered high yield debt securities . alliance capital management l.p. , began trading units of beneficial ownership last week under the symbol ac , after its initial offering . finevest foods inc. , greenwich , conn. , started trading under the symbol fvf after its initial offering . on the american stock exchange five issues recently began trading . first iberian fund inc. , started trading under the symbol ibf after its initial offering . the new york - based firm is a newly organized , diversified , closed - end management investment company . mission resource partners l.p. , an alameda , calif. , master limited partnership , started trading units of limited partnership interest with the symbol mrp after its initial offering . oregon steel mills inc. , portland , ore. , owns and operates a steel mini - mill that makes steel plates . the stock , initially offered , trades under os . valley forge corp. , san rafael , calif. , trades under the symbol vf . the company makes and distributes a variety of marine products and manufactures specialty high - voltage electrical switch gear , industrial pump seals and automotive parts . organogenesis inc. , a cambridge , mass. , high technology company , develops and fabricates human organ equivalent products for human organ replacement and testing . the company trades under the symbol org. valley forge and organogenesis were previously listed over the counter . four companies started trading over the counter recently . akorn inc. , abita springs , la. , began trading with the symbol akrn . the company distributes opthalmological products . banc one corp. , columbus , ohio , started trading preferred shares with the symbol bonep . the san jose , calif. , company trades under the symbol cnnr . country lake foods inc. , a st. paul , minn. , dairy products maker , started trading under the symbol clfi . the attorneys general of eight states last month brought an antitrust action against major insurers , alleging that they manipulated the marketplace and restricted liability coverage . in fact , the appearance of insurance - company collusion is largely a product of the states' regulatory intervention . while state regulators have done a creditable job in guaranteeing insurer solvency , archaic and vague statutes of state insurance laws need to be challenged . if not , they will allow state protectionism to grow subtly , erode constitutional rights and obstruct the efficient workings of the marketplace . the suit's outcome could prove favorable to both the industry and consumers if it leads to less regulation and lets insurers compete more efficiently in today's global economy . -- most states use pricing controls . their politicians claim that without them , " excessive " competition will occur , resulting in insurer insolvency , eroded policyholder service , and extreme pricing cycles . but the prior regulatory approval of insurance rates often serves merely to protect the interests of insurers , not those of consumers . rate ceilings become subtle targets for annual rate increases , while floors protect the inefficient insurers that unencumbered competition would have driven from the marketplace . -- some states engage in extreme market intervention . the aggregate underwriting deficits of these plans , resulting from unrealistic state - imposed pricing lids , are in the billions of dollars . while they keep premiums artificially low now , the costs are being unfairly shifted to future generations . -- industry protectionism is seen again in those states that prohibit the licensing of foreign - based insurers owned to some extent by foreign governments . for some regulators , only one share held by a foreign government can disqualify a firm . -- the anti - rebate laws of most states prohibit agents and brokers from adjusting commissions to make them more competitive . like fees for service of other professions and organizations , rebates should be open to negotiation . such laws are not an efficient way to protect consumers against discriminatory sales practices . -- entry of a new insurer into a state in which it is not based is impeded by seasoning laws that require three to five years of operations in the home state before a license application will be considered . this creates a secondary market for the buying and selling of shell corporations at exorbitant amounts for their state licenses . that act now allows insurers with limited state licenses to underwrite certain risks nationally for associations formed to purchase group liability insurance , despite state restrictions on licensing and policy forms . a number of states , however , are using creative ways to obstruct the legislative intent of the act . new york , for instance , is forcing purchasing groups to use certain brokers licensed in that state . while the states have been careful not to give the appearance of encroaching upon the federal authority over tender offers and acquisitions of publicly held companies , they often unfairly disadvantage shareholders under the pretext of protecting the interest of policyholders . for example , a subjective regulatory test on the acquiring management is its " integrity , experience , and competency . " states often use this vague test to deny a takeover bid , when their real motivation is to insulate the state economy and local management from interstate and foreign competition . in fact , ownership of insurance companies serves as an unintended anti - takeover device . because states must approve takeovers , there have been virtually no unfriendly takeovers of companies owning insurers . if fear of the effects of a foreign takeover becomes the bottom - line issue , it should be taken up by congress and not left to the states . mr. bunner , a former california insurance commissioner , is a partner at peat marwick main & co. in new york . your feb. editorial " the fall guy " criticized the house committee on standards of official conduct's handling of recent cases where it identified certain members as having acted improperly but did not , in the journal's view , seek adequate punishment . the editorial suggested that although the committee was not " willing to enforce its own standards " in those cases , it has now chosen to do so in the matter of rep. biaggi since it will " occasionally sacrifice a weak and unpopular member to appease the ethicists . " against this backdrop of curious reasoning , the journal indicated that the committee's recommendation to expel rep. biaggi from the house " undermines the democratic process . congress doesn't set the conditions of its own membership -- each serves at the pleasure of the voters. . . . the job of removing someone from an elected office ought to reside . . . with the voters . " the editorial opined that the committee ( i.e. , congress ) simply has a responsibility to " alert voters that a member has violated their trust " and that " if voters disagree with the actions of a member they can vote him or her out of office or , in extreme cases , petition congress for removal . " specifically , in each of the cases cited , the committee made available its findings for public scrutiny , thus enabling voters to make informed decisions on whether to return the individuals to office. ( notably , however , the editorial stated that if transgressions of the type found were to occur in the executive branch , the individuals would have been " dismissed or fined " ) . it would thus appear that the journal is more concerned with the imposition of punishment and its dissatisfaction with the committee's disposition of those cases than with the fact that the committee did indeed take steps to " alert voters " about the actions of the members involved . as for the concept that the power of removal ought solely to rest with the electorate , it need only be stated that the constitution ( article i , section , clause ) expressly authorizes each chamber of congress to remove a representative or senator by a two - thirds vote . under our system of government , there are two , and only two , ways to effect an involuntary removal from congress -- either by the failure of the electorate to return the members to congress or , in serious matters , by either chamber in accordance with the provisions of the constitution -- the journal's views on the proper operation of the " democratic process " notwithstanding . that the committee has made such a recommendation concerning rep. biaggi ( with a full reporting of all relevant facts ) is a matter that should be judged solely on the merits of the issues there involved , and not viewed as one involving the " sacrifice " of a member of congress to placate the so - called " ethicists . " rep. julian c. dixon ( d. , calif. ) . rep. floyd d. spence ( r. , s.c. ) . with gillette co.'s annual meeting set for next thursday , the outcome of coniston partners' proxy fight against the boston - based razor blade giant remains too close to call . as the battle enters its final days , gillette executives and coniston strategists are manning phones and criss - crossing the country to plead their cases to big shareholders . on wall street , takeover experts and speculators are poring over several scenarios , including a coniston - backed takeover by a third party , if new york - based coniston gains the four gillette board seats it seeks . but for all the behind - the - scenes activity , no one involved in the fray seems willing to predict victory for either side . " the voting looks very close , " confided a gillette source . " i'd have to call it a tossup . " coniston's two - month - old fight to force gillette's sale has been overshadowed by a wave of corporate mergers . the contest has been free of much of the bitterness and name - calling of other proxy fights . and until gillette filed a lawsuit against coniston yesterday , " it's been almost genteel , " said augustus oliver , one of coniston's three principal partners . ronald o. perelman , the tenacious raider whose overtures gillette has rebuffed four times , remains intensely interested , but so far has declined to get involved in the fray . interviews with major gillette shareholders -- mostly investment and pension fund managers -- show strong sentiment for the investment firm's campaign to force gillette's sale . " they've been fighting off these takeover offers , ( but ) a takeover can be in the best interest of a stockholder , " said janice tester , a money manager at the california state teachers retirement fund , a big gillette holder . top gillette executives " paid us a visit , but we weren't happy with what they had to say , " ms. tester added . arbitragers , who hold about of gillette's stock and remain incensed at the company's repeated rejections of mr. perelman , generally also can be counted on to vote against management . but whether any anti - gillette feelings of other holders translate into pro - coniston votes is far from certain . " we've had several discussions with analysts ( at money management firms ) that say , ' i'm for you , but i have to go with upper management , ' " which prefers gillette , said coniston's mr. oliver . the company's management is well - connected , and at least two big new york banks changed their vote to gillette after initially going with coniston , he said . " we've got the level of support that's encouraging , but you really don't know what will happen until you've seen the cards , " mr. oliver added . in a suit filed in federal court in boston , gillette charged that coniston violated federal securities laws by not disclosing " hidden " partners and only partially disclosing monday a " web of interests behind its shell investment vehicles . " the suit asks the court to void proxies obtained by coniston as a result of any misleading solicitations , among other things . mr. oliver said the suit is " totally without merit . it's a last - ditch effort to win in the courts what ( gillette ) can't win with shareholders . " other defendants include michael f. price , president of heine securities corp. , which owns nearly million gillette shares . the suit said mr. price is a limited partner of coniston , but coniston hasn't identified him as member of its group in the gillette fight . a spokesman for mr. price said he wasn't available for comment . is there a buyer out there ? but some investment bankers , including those who have examined the company for a possible takeover , aren't so sure . " this is the single most - shopped company in the world over the last two years , " said the head of mergers at one major brokerage . " everybody and their mother has looked up and down it until their head spins . i talked to one company the other day that had just finished looking at it for a third time . " gillette's wall street advisers , led by top takeover lawyer joseph flom and morgan stanley & co.'s merger chief , eric gleacher , contend coniston's inability to flush out a buyer for gillette hurts its chances of winning the proxy fight . " everybody thought they had a rabbit to pull out of their hat at the end , " said one adviser . " but so far we've seen nothing . " the one sure buyer for gillette is the only buyer who can't currently buy it . wall street sources close to revlon say mr. perelman still wants the company through a friendly merger , but doesn't want to pay the steep price -- at least a share -- some analysts believe the company can fetch in a takeover . in composite trading on the new york stock exchange yesterday , gillette shares closed at , down , in a general market decline . " ronnie would love this company , but not at any price , " said a person familiar with mr. perelman . moreover , tax - law changes that went into effect jan. have made selling off pieces of gillette , such as its braun electric appliances and papermate pen units , as much as - a - share more expensive , wall street takeover professionals estimate . takeover experts have speculated that gillette immediately would seek a friendly merger partner if coniston wins . while gillette advisers deny that , a coniston victory would pressure gillette chairman colman mockler jr. at least to restructure . if so , mr. mockler would have perhaps a month to formulate a plan before coniston's nominees formally become directors and integral participants in any restructuring discussions . a vote for coniston probably means a takeover or restructuring , and a quick profit . a gillette victory almost certainly would send the company's stock plunging , possibly to as low as , analysts predict . " it's more to our advantage to vote for coniston , ( but ) gillette's management has done a good job , " said tony gray , a portfolio manager for sun banks of florida , who said he's torn over how to vote . " if gillette wins the stock , it might go up to a share in about two years . if coniston wins , it will hit in two months . " to persuade investors to keep the faith , gillette is painting a relentlessly positive outlook . earnings , up sharply in the first quarter , should rise at least a year in coming years , the company predicts . the stock market's winning streak was snapped yesterday as prices finished mixed in active trading . some buying in the final hour helped pare early losses , but it wasn't enough to push the dow jones industrial average into the plus column . the industrial average , which gained points in the previous six sessions , fell to . the broader market averages posted small gains . standard & poor's - stock index advanced to and the new york stock exchange composite index inched up to . after opening mixed , the dow jones industrials showed a loss of more than points late yesterday morning . traders said the downturn in stocks was partly the result of a slide in bond prices , which followed report of a much stronger - than - expected rise in retail sales last month . weakness in the dollar also put stocks under pressure , they said . a rebound in treasury bonds and a pick - up in the dollar against some of the major currencies helped the stock market trim some of its losses . short - covering , buying by professional traders to replace borrowed shares they had sold earlier , also helped lift stocks from their session lows late yesterday afternoon . if the trade deficit meets the market's expectations , buyers are likely to gain more of the conviction needed for them to buy stocks at higher prices , said john parasco , a vice president and equity trader at first boston corp . the trade report is expected to show continued improvement . the consensus of economists surveyed by dow jones capital markets report calls for a february deficit of billion , narrower than the billion gap recorded for january . analysts say the report is one of many concerns hanging over the stock market . others include the meeting of the group of seven industrial countries in washington ; impending data on producer prices , industrial production and business inventories ; and the expiration of april stock - index futures and options . " for the next two or three days , the actions of the market are most likely going to be news - oriented , " said ricky t. harrington , a technical analyst at interstate securities , charlotte , n.c . despite the latest rally , the market hasn't escaped the bearish phase that began with the october crash , mr. harrington said . they like to see all the averages moving in tandem to confirm a trend . david dreman , managing director at dreman value management , said he also expects stocks to manage some further gains before staging a sharp pullback . " the best thing for the market right now would be to see it rise gradually and get the volatility out , " he said . on the big board , issues declined in price , while stocks advanced . new york stock exchange volume jumped to million shares from million tuesday . trading to capture hefty coming dividend payments had been absent from the market in recent sessions , but it returned yesterday . u s west , a telephone utility that carries a dividend yield and begins trading ex - dividend today , was the big board's most active issue with volume of million shares . other dividend - related trades included pacific enterprises , which has a yield and new york state electric & gas with a yield . earnings news vied with takeover speculation as the main forces moving stock prices yesterday . international business machines advanced / to / in response to a better - than - expected first quarter earnings report . another blue chip issue , westinghouse electric , dropped / to / , although the company posted first - quarter net of a share , compared with a year earlier . other notable decliners among blue chips were du pont , which fell / to / ; minnesota mining & manufacturing , which eased / to , and primerica , which lost / to / . caterpillar dipped / to / despite reporting a million profit for the first quarter , compared with an million loss a year earlier . among other companies reporting higher quarterly results , j.p. morgan added / to / , georgia - pacific eased / to , raytheon advanced / to / , ic industries finished unchanged at / and whirlpool added / to / . morgan stanley surged / to / amid indications that the company expects to report record first - quarter earnings . an analyst at painewebber raised her earnings estimate for the quarter to a share from , according to dow jones professional investor report . hospital corp. of america gained / to . the company told a group of investors that its first - quarter earnings exceeded analysts' estimates , ranging from cents to a share . in the year - before quarter it earned cents a share . pfizer surged / to / on takeover speculation . market sources cited hoffmann - la roche and ciba - geigy as possible suitors . pfizer declined to comment . calmat , the target of a - a - share hostile tender offer from brierley investments of new zealand , advanced / to . brierley has approached the company about the possibility of discussing a friendly takeover . usg gained / to . the company said it is exploring options to the - a - share takeover bid from desert partners , a partnership controlled by texas investors cyril wagner and jack brown . renewed takeover speculation sent super valu stores up to / . the company told dow jones it hasn't been able to determine if anyone is building a stake . a source close to the haft family , which controls dart group and was mentioned as a possible purchaser , said the hafts aren't buying the stock . texas air lost / to / on the american stock exchange . the department of transportation said it is launching a preliminary investigation of texas air and its management to determine whether the company is " fit " to operate an airline . consolidated papers picked up to in over - the - counter market . the company yesterday reported first - quarter earnings of a share , compared with a share a year earlier . seagram rose / to / following a recommendation by robert raiff , an analyst at c.j. lawrence , morgan grenfell , according to the dow jones professional investors report . an analyst at shearson lehman hutton lowered his rating on the stock to " sell " and trimmed his estimate of its first - quarter earnings . when india's youthful new prime minister , rajiv gandhi , initiated economic liberalizations in , his effort was dubbed " the rajiv revolution . " his goal was nothing less than to rejuvenate india's rigidly regulated economy by encouraging concepts foreign to most indians , such as competition and economic openness . four years later , some say the rajiv revolution is hopelessly bogged down in the very mire of bureaucracy , politics and vested interests it was meant to help clear . others , notably those in mr. gandhi's camp , say that , while slowed , the liberalizations have profoundly affected india's behemoth economy . " the supertanker has changed direction , " says abid hussain of the government's planning commission . the truth is somewhere in between . the rajiv revolution did change the way business is perceived and regulated in india . it opened up some industry to previously forbidden foreign collaborations . it coincided with , and greatly increased , a consumer - spending boom that replaced years of socialistic austerity . but in myriad ways it is a half - complete revolution . some enlightened measures were enacted but remain unimplemented by the reluctant bureaucracy . and while mr. gandhi's measures have given birth to a competitive spirit among domestic manufacturers , the government continues to shield industry from foreign competition . " i think there has to be a culture of competition , instead of protection , " says ashok birla , a prominent indian businessman who wants multinationals to have more access to the local market . " somebody's got to take a bold position if this country is ever going to get out of its economic morass . " but rahul bajaj , a motorcycle - industry magnate , disagrees . " we need more time , " he says . " if the foreign companies come into india , we will all die . " steps to liberalize india's economy actually began in the early s under the government of indira gandhi . but rajiv made liberalization his personal crusade when he came to power in after his mother's assassination . in his government announced a revolutionary relaxation of india's industrial - licensing system , which had completely controlled what and how much factories produced . more products were delicensed that year . and businesses could alter their factory's product mix without prior approval . the government eased import licenses and lowered direct taxes . mr. gandhi also made major changes in the bureaucracy's attitude toward businesses that still required licenses . he convinced the bureaucrats to look on the country's large industrial houses as national assets rather than as robber barons . " they believed that small was beautiful , " says r.p. goenka , considered india's " takeover king " for a series of takeovers that wouldn't have been allowed several years ago . " now , bigness isn't ugly . " the monopolies and restrictive trade practices act , which limits the growth of large companies , was relaxed . and the government stopped telling industries such as petrochemicals and textiles to build small plants to meet local requirements . it now requires them to build larger facilities that benefit from economies of scale . another landmark liberalization was the encouragement of foreign collaboration . to conserve foreign exchange , the government previously had discouraged technical tie - ups . today , small consulting tie - ups with foreign companies are approved quickly ; larger contracts still get tangled in red tape , but approval is faster than before . indian industry was galvanized by the measures . applications to start industrial ventures in the delicensed areas doubled in . foreign companies flocked in to see just how open india was going to get . but by , the rajiv revolution was losing steam . new - venture applications slowed . lower - level bureaucrats had trouble understanding the new measures , and many continued their naysaying ways . political scandals weakened mr. gandhi , and he became dependent on politicians who disagreed with his economic ideas . india's industrialists also were complaining : a little bit of liberalization was great , but why go overboard ? in many areas , the gandhi revolution is considered dangerously half - finished . to save jobs , the government still prohibits businesses from closing shop when they lose money . the government currently nurses such " sick " companies . mr. gandhi says he intends to make indian industry more competitive . but so far , foreign companies are welcome only as minority partners or consultants . the government still blocks them from competing directly on the local market . since , when the government forced coca - cola co. to leave india , local manufacturers have had the soft - drink market to themselves . ramesh chauhan , whose parle exports controls half of india's name - brand soft - drinks market , argues , " if pepsi is allowed in , our whole concept of self - reliance will be shot to hell . " union texas petroleum holdings inc. expects to report that first - quarter net income rose to million , or cents a share . in an interview , a. clark johnson , chairman and chief executive officer , said higher natural gas prices , improved ethylene margins and lower interest expenses contributed to the earnings surge , while a drop in crude oil prices was an " unfavorable " factor . as of march , union texas had cash on hand of million and available credit of million . the company's management is requesting board approval for an initial common dividend payout of five cents a share , payable in may . for the year - ago quarter , union texas reported net of million , or cents a share , with million shares outstanding . common shares outstanding for the latest quarter were about million . revenue rose for the quarter to about million from million . even though prices for the industry are down this month because of seasonal factors , " a couple of high - price , long - term contracts " and a increase in volume boosted union texas' natural gas results for the quarter , mr. johnson said . the company's reserves are about two - thirds gas and one - third oil . the ethylene business accounts for about of union texas's total operations . mr. johnson said union texas is expanding ethylene capacity by about . late last year , mr. johnson said union texas was budgeting for oil prices to average a barrel through . even though prices have been much lower , union texas doesn't plan to change capital spending plans or staffing levels , primarily because of the strong results from other businesses . planned capital spending for remains at million compared with about million for . union texas is -owned by kohlberg kravis roberts & co. , a new york investment partnership . when kohlberg sought clearance to buy a stake in texaco inc. last week , there was wall street speculation that kohlberg might be interested in certain texaco assets for union texas . mr. johnson said union texas " hasn't made any study of texaco . " a federal grand jury in cleveland indicted a former trw inc. employee on six charges , including conspiracy to defraud the government by falsely inflating labor costs on jet engine fan blades . assistant u.s. attorney dan a. polster , said other indictments are expected in the case . indicted was charles w. broome , years old , of gates mills , ohio , who is the third ex - trw employee indicted or charged as a result of an ongoing criminal investigation of the company's compressor components division . cleveland - based trw is an automotive , aerospace and electronics concern . mr. broome , a product line manager at the division until fired for " irregularities " in december , was accused of conspiring with other trw employees to submit false forms and supporting documents to the defense department . the names of the other employees weren't disclosed by the justice department . the justice department contends the conspiracy involved inflating the price of jet engine fan blades by about each that were supplied to general electric co. by trw , its subcontractor . specifically , mr. broome is charged with one count of conspiracy to defraud the government , one count of making false statements to the government and four counts of mail fraud . " he was made to follow procedures by higher ups . he's a victim , " the lawyer maintained . assistant u.s. attorney polster denied that allegation , saying evidence is pursued " as far as it will go . " last month , richard e. kavicky , a former financial manager at the compressor component division , pleaded guilty to conspiracy to make false statements and submitting false writings and documents to the defense department . he also agreed to cooperate with investigators in the case . the department charged mr. kavicky with conspiring with other trw employees in the division's accounting and engineering departments and with a product line manager to inflate labor costs for making the fan blades . also last month , stanley f. stearns , , a former plant manager of the compressor components facility in danville , pa. , pleaded guilty to charges that he conspired to make false statements in connection with fan blades for m - tank engines . in addition , trw agreed to pay in criminal fines related to false statements made by its electronics products subsidiary . mr. broome , a - year employee of trw , was among managers and officials who were either fired or disciplined by the company as a result of an internal investigation of irregularities at five trw facilities around the country . he also was one of three men who filed a well - publicized billion lawsuit against trw on behalf of the government , alleging that the company had cheated on government contracts . while the u.s. attorney's office in cleveland intervened in that suit , it is on hold until the criminal investigation concludes . one of the other parties to that suit against trw won a wrongful discharge judgment last year against the company . trw is appealing that verdict in cuyahoga county common pleas court in cleveland . it's spring , and residents of this serene community of await the season's one sure sign : the elusive streaker . since , the man - in - the - buff has startled residents more than two dozen times , but police haven't nabbed him yet . the town has been dubbed " home of the streaker " -- which spells business for a local entrepreneur but anger for others . john morris , owner of a local sporting - goods store , sells t - shirts and hats with the town's nickname adorning them . the t - shirts -- which sell for -- also feature a nude jogger , with the word " censored " coyly placed on the man's backside . since february , mr. morris has sold about shirts , with orders coming from as far away as germany and japan . " every time the streaker emerges , i start selling them again , " he says . the streaker -- who faces a misdemeanor charge punishable by up to three years in jail -- was last spotted on a freezing day in january , wearing just a ski mask and gloves . one unconfirmed report had the masked man riding a motor scooter through town . mr. morris contends most residents consider the streaker harmless , and police chief gregory smolka says a majority " thinks it's funny " ( " we take it in a more serious light , " the chief adds . but police stakeouts , some informal federal bureau of investigation assistance and futile chases by citizens haven't helped one stitch. ) . mr. morris , who says that he gives one dollar to a nearby hospital for each shirt he sells , dismisses criticism of the t - shirt . in fact , he might even welcome it : after a priest admonished mr. morris's business tactics in the local newspaper , " we couldn't sell shirts fast enough , " the businessman recalls . but others aren't so approving . " how would you like it if he showed up at your door in a pink scuba suit ( cut out at strategic places ) and flippers ? " asks one elderly witness . local residents also worry that mount pleasant -- which takes great pride in its local plants that make lenox crystal and other fine glassware -- could be stripped of its dignity by the new - found notoriety . " at first it was humorous , " says mayor jerry lucia . but now , he says , " we'd like to be known for our better features . " the food and drug administration warned makers of so - called anti - aging skin creams to stop claiming the products can reverse aging or make basic changes in the skin . in a march letter to cosmetics companies , john m. taylor , an fda associate commissioner , said the agency believes it wouldn't be useful to continue discussions with the skin - cream makers about the issue . he said that starting days from the letter's date , the fda will look again at labeling and promotions . any claims " in substantial violation " of the law may be subject to action -- including seizure of the products , or injunction to stop sales , he said . cosmetics intended to cleanse or superficially beautify skin can be sold without advance fda approval . but the agency has said some companies have claimed their creams change skin structure or function , or treat a condition . products for which such claims are made require fda approval . the fda has said some companies have claimed the creams " control " the aging process , or " renew " the skin . the fda said it was " unaware of any substantial scientific evidence that demonstrates the safety and effectiveness of the anti - aging skin care products . " but while some changes are " quite satisfactory , " others have " left some doubts , " said rudolf apodaca , fda director of drug labeling and compliance . he declined to say which claims leave such doubts . michael waldholz did an admirable job of reporting the issue between myself and the food and drug administration ( " physician to defy fda , take money from test patients , " march ) . the fda perception of a complex quagmire of issues is a typical defense -- for those who are in the wrong . the issue is money . the tha project to treat alzheimer's disease under my direction is depleted of funding . this occurred because the fda disallowed patient - funded research for my project about one year ago . since that time , i have made substantial effort to placate the accelerating fda requests . this has increased the cost of the research . fortunately , the cost of the drug ( tha ) has been assumed by the national neuropsychiatric foundation . still , the cost of conducting research has been to per month . this cost has been absorbed by me in the hope that the fda would reward my efforts with its favor . in january , the fda displayed its intent toward me in a letter from dr. frances kelsey ( as described in your march editorial " policing alzheimer's " ) . the fda threat of expensive legal games ended my self - funded research . why was this necessary ? all that was required was a letter , or perhaps a phone call , to permit reimbursement of expenses . apparently , patient - funded research is good for everyone but dr. summers . the most recent ploy by dr. frank e. young , fda commissioner , is to recruit my patients directly by letter . there is also an indirect solicitation by press releases . does this pseudo - amnesty imply that tha is considered beneficial ? does this outrageous offer by the commissioner smack of a personal vendetta ? if dr. young had sent letters of solicitation to my general patients would he not have to answer to an ethics committee of a professional society ? who will hold the fda accountable for this shameless behavior ? i wish to report that the project has been restarted by the grace of my patients . seventeen of the subjects have voluntarily accepted their share of the operating cost for the research . this amounts to per month per patient . i will assume the cost of the remaining patients who desire to continue on . the fda may wish to once again call this " commercialization " and threaten legal action . i call it economic survival . the average patient has been safely given tha for more than months . active encouragement to help this one - of - a - kind group should be emanating from the fda . these patients may provide vital information that would accelerate the availability of tha or its counterpart to the general public . instead , the fda divides loyalties . it offers pitfalls , stumbling blocks and sophism . william k. summers m.d . it's an old wheeze : the way to get rich quick in america is to write a book about how to get rich quick . it is less familiar to point out that nobody nowadays , as seller , writer or buyer , will own up to being involved with a get - rich - quick book . a " guide to business technique , " yes ; the " autobiography " of a tycoon , sure ; a volume of " management tips , " you bet ; but to hear the publishing world tell it , the vulgar grq book is a thing of the past , having vaporized like those screwy financial schemes cooked up by the likes of ralph kramden and ed norton . which doesn't dilute the fact that these business books are all , at bottom , books about how to get rich quick . why else would the poor meatballs swarm b. dalton and waldenbooks , ponying up the cash for " trump " and " megatrends " and " thriving on chaos , " if it weren't for the veiled promise that inside the featherweight prose lay some bit of wisdom , which comprehended and painlessly deployed would very soon translate into many , many dollars ? so the fiction must be clung to , and therefore i'll go along with john e. merriam and joel makower , authors of " trend watching : how the media create trends and how to be the first to uncover them " ( amacom books , pages , ) . they claim that " with nothing more than a select batch of periodicals and newspapers , pencil and paper and a few hours a week , readers can use the trend watching media content analysis system to spot the changes that will affect their business -- before the competition does . " if you happen to get rich quick along the way , fine . the authors take as an inspiration john naisbitt's " megatrends , " the bestseller whose primary contribution to american culture -- aside from earning mr. naisbitt megabucks -- was to encourage the use of " network " as a verb . mr. naisbitt's insight , you'll recall , was that any old meatball could divine the direction of the country's commercial subcurrents , if only he would read reams of local newspapers and then make elaborate tabulations of the " agendas " being palavered in the barber shops and euchre clubs of slippery rock , pa . although messrs . merriam and makower profess admiration for mr. naisbitt's breakthrough , they apparently consider him something of a primitive . voila ! trend watching ! now you might think this a wispy reed on which to hang a book , and of course you'd be right , but " trend watching " has a value beyond the original contributions it doesn't make . it can in fact be thought of as a kind of textbook , a step - by - step guide to taking the merest half - scrap of a hint of an almost - idea and inflating it ( in this case ) to more than pages . it is a how - to , in other words , for writing a business book -- for anyone who wants to get rich quick by explaining how to get rich quick . for purposes of this review , however , i'll simplify . . repeat , repeat , repeat . with slight changes in wording , repeat your truism again and again and again , over and over and over . if you've said it on page , say it again on page , and then again on page ; before you know it , you'll be one - quarter of the way through the book . give it a rest . then say it again on page . . work out a new vocabulary . standard english , skillfully employed , encourages brevity . in a business book it must be avoided . you don't have to invent words ; simply detach them from their everyday use . listen to messrs . merriam and makower : " by using the concepts of exposure , media sensitivity and public memory , your thinking will become dynamic . " it doesn't make sense , but the meatball will memorize it . . belabor the obvious . but don't just belabor the obvious . beat the obvious , torture it , whip it , strap it to the rack and make it scream . then explain it , and watch your paragraph grow ! when you're finished see no. , above . . sooner or later , suggest that your reader draw a graph . if the meatball actually draws a graph at your direction , it'll take him that much longer to realize he's spent at the bookstore for . . . well . . . for a hand - drawn graph hand - drawn by him . this last point and several others i haven't mentioned require considerable amplification , but i see i'm out of space . i could go on and on . watch your local bookstore . mr. ferguson is assistant managing editor of the american spectator . it's called the " fixed - mix . " and many money managers , brokers and mutual fund advisers say this investment strategy is just the ticket for risk - averse individuals . under a fixed - mix plan , a set percentage of the investment is put in each of several asset categories -- foreign and domestic stocks , bonds , and real estate , for instance -- using no - load mutual funds to minimize transaction costs . then at the end of each year , the investor adjusts the holdings , selling some of the fund shares that have gone up in value and buying more of those that have declined , so that each fund has the same proportion of the total investment as at the start . " with this approach , you don't hit a home run , " says michael hirsch , chief investment officer of republic national bank of new york . " instead you hit lots of singles and doubles . " larry biehl , of bailard , biehl & kaiser , a san mateo , calif. , money - management firm , says that in the years through the end of , a fixed - mix recommended by his firm would have had an average annual return of about , based on a simulation using several broad indexes . another advantage of this approach is that it has less volatility than investing solely in u.s. stocks , he adds . it works " like a carousel , " mr. biehl says . " every year , some horses are up , and some horses are down . " the fixed - mix strategy isn't without critics , however . " no mechanical system will be a winner over time , " says gilford babcock , a finance professor at the university of southern california . the proper balance today " won't be the proper balance three years from now , " he says . donald evans , a south laguna beach , calif. , investment manager , dismisses the fixed - mix approach as " like eating a meal of pablum . " mr. evans says he prefers market timing , in which the portfolio mix is varied based on the market's expected direction . some mutual - fund investors who try to time the market move their money back and forth among stock , bond and money - market funds . the fixed mix also is an easy way to distribute funds among different types of assets . the fixed mix recommended by mr. biehl's firm divides an investor's money equally among five asset categories : domestic stocks , domestic bonds , international stocks , money - market instruments and real estate . but others say the percentages should be varied to take into account differences in investors' objectives . considering the current volatility of the stock market , for instance , risk - averse clients would be better off putting a larger amount in money - market funds , says charles d. haines , a birmingham , ala. , financial planner . some proponents of the approach recommend modifying the proportions slightly from time to time to take advantage of economic cycles -- but not enough to be classified as market timing . gerald w. perritt , editor of the mutual fund letter in chicago , suggests varying a mix of seven no - load funds , spreading the money among stocks in small u.s. companies , stocks in large u.s. companies , international bonds , international stocks , u.s. bonds , gold and money - market instruments . the bailard biehl firm varies the proportions somewhat in managing money for wealthy individuals and pension funds . not everyone thinks investors are willing to stick to a fixed mix . william hiss , a santa clara , calif. , broker , doubts many people have the discipline needed to continue the program when stocks are either soaring or falling . " the more i see of how people react , the more i think the herd instinct is too strong , " he says . but mr. biehl and others say that is precisely why the fixed - mix strategy is helpful . " this approach takes the emotion out of investing , " mr. biehl says . in , the year of van gogh mania , world - wide auction sales at each of the two major international auction houses exceeded billion for the first time . sotheby's holdings inc. said the total price of all the goods it sold at auction for the year rose to billion . christie's international plc reported its sales totaled billion , a increase from a year earlier . the dollar values are converted by both london - based auction houses from pounds , based on an average exchange rate for each year . even after the october stock market crash , both houses had long strings of auction records , for paintings , books , jewels and other items . it was a year in which the japanese were more active buyers than they have ever been , but americans and europeans also bid aggressively for anything in the masterpiece category . for sotheby's , the year's highlight was the sale in november of vincent van gogh's " irises " for a staggering million . the buyer has never been identified . but it was also the year in which sotheby's sold the duchess of windsor's jewels for extraordinary prices , and a piece of furniture , an armchair , for . the black monday crash did affect closely held sotheby's , leading it to postpone a public offering of about of its common shares . the latest word is that sotheby's still plans the offering and that this might proceed this spring , but the shares seem unlikely to be priced between and each , as initially intended . christie's , which is publicly traded in london , said its pretax profit more than doubled to million . both houses said they are optimistic about results but declined to make specific projections . the leading economic indicators , which have declined in three of the past four months , now seem poised for a rebound , as is likely to be seen in the february index , due to be released today . while this development may ease the anxieties of those who viewed the index's recent " weakness " as cause to project gloom for the economy , the truth is that no particular significance should be attributed to stronger numbers , just as their prior downfall shouldn't have been a cause for gloom . over the past decade , the economy has undergone too many changes to be adequately reflected by this antiquated index . the increasingly muted reaction of the financial markets to the lei is confirmation that the index is no longer relevant . since the early s , the lei has broken far above the trend in economic activity . while there has been some tendency for the lei to outperform real gross national product in the late stages of economic expansions , the current divergence is entirely unprecedented . when both real gnp and the lei are converted into indexes based on their levels in , the lei index was above the gnp index in the fourth quarter of last year . the chart reveals several other interesting properties . the lei gave recessionary warnings in , , - , - , - , - and - . four of these were incorrect -- a historical perspective that makes the fourth - quarter downturn in the lei look less than ominous . moreover , the chart clearly shows the lei to be generally more exuberant and more erratic than the underlying trend in real gnp. hence , the index has been essentially offbase since . several factors appear to account for this . first , the leaders include stock prices , as measured by the s&p index . while the stock market has been a great leading indicator on a historical basis , this may no longer be the case . the stock market's role as an allocator of capital may have been greatly undermined by the highly leveraged trading in the commodity pits , index arbitrage , program trading , and perhaps even by the unprecedented number of leveraged buyouts and attacks of corporate raiders . as a consequence of this new nature of the stock market , the weight given to the stock index in the lei should be , at the very least , downgraded or perhaps even eliminated . however , the relationship between money supply and the economy is analogous to the relationship between the stock market and the economy . in an environment in which many participants can move financial assets quickly from weak to strong currencies , and vice versa , it appears that the u.s. money supply no longer is a great indicator of economic activity . when the dollar is strong , participants in the global economy move working balances into u.s. dollars . when the dollar is weak , the same players move working balances into the stronger currencies . from through the money supply pointed to a great economic boom , yet for that stretch of time the growth in the economy was sluggish . now , however , when the dollar is weak and the economy growing , the money supply growth is more timid . in - , while u.s. money supply growth was strong , money growth of our major trading partners -- japan , west germany and britain -- was weak . now , the reverse is true . third , there is no one simple component of the lei that reflects the global economy . the u.s. economy looks less like the closed economy prior to and more like the traditional open economies that have existed in europe for many years . fourth , there is no single component in the lei that directly reflects the growth of the service sector in the u.s. economy and the declining role of manufacturing . this trend could persist , making the need for a better reflection of the service sector in the lei sharply felt . finally , minor modifications might be needed to damp some of the short - term lei volatility . for instance , strike activity is still capable of distorting patterns on a monthly or even longer - term basis . hence , there should be a variable to reflect high strike activity , or perhaps to correct for the possible weakness in some of the other indicators that could be affected , such as consumer spending or initial unemployment claims . also , while an increase in inventories is a positive for the lei , clearly there are times when overbuilding of stocks is a negative for the economy . the following conclusions seem warranted : first , the lei , as a method of anticipating economic developments , has lost its validity in the rapidly evolving u.s. economy . the u.s. economy is a highly intricate and complicated entity . as such , there is no substitute for looking at all of its economic fundamentals -- personal income , corporate profits , the labor markets , spending by both individuals and businesses , and the increasingly important global factors that are influencing the u.s. economy . mr. hunt is chief economist of carroll mcentee & mcginley , a u.s. - securities dealer , and adviser to marine midland . a few years ago potomac electric power co. in washington , d.c. , fired a credit collector for allegedly making obscene telephone calls -- while off - duty -- to the teen - age daughter of a customer . but an arbitrator later reinstated the employee , ruling that he had had a satisfactory work record for many years . such rulings have become more commonplace in recent years , making it increasingly difficult for companies to fire workers for certain activities or behavior outside the office -- whether it's marrying someone at a competing company , refusing to participate in a raucous company outing , or committing a crime . " the trend is to respect individual privacy a lot more and tolerate unorthodox life styles , " says terry l. leap , a management professor at clemson university who has studied off - duty firings . he adds that the growing use of drug testing -- and subsequent firings -- has heightened the issue because it's " drawing the line between public and private conduct . " it wasn't long ago that companies could effortlessly fire workers for what they did off the job . but now such personnel decisions have become a legal mine field . generally , companies still retain broad latitude to fire workers for off - duty conduct -- especially nonunion employees . there is little question , for instance , that a company can fire an employee who has been convicted of selling drugs . but courts and arbitrators have carved out exceptions for some off - duty conduct . their decisions are part of a broader legal trend that has curtailed companies' right to dismiss employees without any cause at all , known as the employment at - will doctrine . workers covered under collective bargaining agreements have the strongest protection against firings ; employers usually must show " just cause " for dismissals . but in a few states , courts have extended similar protection to nonunion workers , ruling that a company handbook , policy manual or oral promise constitutes an implied contract between the worker and employer . in those cases , companies must have a good cause to fire the worker , similar to union workers . her boss fired her a week after ms. rulon - miller received a merit raise , contending that the relationship -- and her concern for her boyfriend's success -- created a conflict of interest . but ms. rulon - miller said that even though she was nonunion , she was protected by ibm's written policies that set out the circumstances under which a person's private life could become a company concern . she argued that her personal relationship wasn't expressly forbidden by ibm's policies and that there was no conflict of interest . a jury agreed , awarding her . an appeals court upheld the verdict , noting that a company must abide by its own rules and regulations . like ibm , many companies find it increasingly difficult to make the link that an employee's off - duty conduct somehow is hurting the company . in cases where an employee commits a crime , for instance , " unless you've got a prominent individual or a strong moral element to the organization -- like a church -- it's difficult to demonstrate a business's reputation has been damaged , " says prof. leap . while the act was " sophomoric , " the arbitrator said , an employer may not " exaggerate unduly what the public may think of incidents having no bearing on their job . " he reversed the employees' suspensions . increasingly , nonunion employees fired for off - duty conduct are also invoking the so - called public policy issue to win reinstatement . the firings , they claim , undermine or violate a compelling public policy or public good . for instance , courts and legislatures have held that employers can't fire employees for attending jury duty , whistle - blowing , lobbying against the company's interests or filing for workman's compensation claims . says clyde summers , a law professor at the university of pennsylvania : " the court is looking at whether the conduct of the employee is a good thing , whether the public has an interest in an individual's freedom to do whatever the conduct is . " or not do . the arizona supreme court reversed the dismissal in , citing the state statute against indecent exposure . " we are compelled to conclude that termination of employment for refusal to participate in public exposure of one's buttocks is a termination contrary to the policy of this state , " the court said . while the specific " public policy " involved in the arizona case was clear , plaintiff lawyers are trying to broaden the definition of public policy to more subtle and controversial areas , like the right to privacy or family unity . the courts are reluctant , though . in an oregon case a merchandising manager for j.c. penney claimed that his right to privacy was violated when he was fired because he was dating another employee . although the employee had a strong work performance and no company policy prohibited socializing with colleagues , the oregon supreme court upheld the dismissal in . " it may seem harsh that an employer can fire an employee because of dislike of the employee's personal life style , " the court said . but , it added , private firms aren't barred from discriminating against workers for their choice of mates . in a case in new mexico in , an employee with an excellent work record was fired because she was married to a worker at a competing supermarket . in her suit she claimed that public policy encourages " family unity and the maintenance of family discipline . " but a federal district court found that claim " too amorphous , " saying that the woman failed to pinpoint a " specific expression of the public policy favoring family unity . " despite such rulings , legal experts expect that more courts will eventually adopt privacy as an important public policy , by pointing to privacy rights suggested in the u.s. constitution and state common law . moreover , lawyers are expected to increasingly use the privacy argument to defend employees fired after testing positively for drugs . cliff palefsky , a san francisco plaintiff lawyer who helped represent ms. rulon - miller , contends in an interview that drug testing measures a worker's off - duty conduct , not work performance , and argues companies have no business monitoring their employees' private lives . but management lawyers think they can defend such suits . so courts will be reluctant to declare privacy a public policy . further , he says , companies can argue that , in fact , a public policy exists that discourages the use of drugs . " therefore , a court can't find a public policy against testing because that would run contrary to a clear public policy against drug abuse , " mr. goldberg says . southern california's biggest supermarket operators , locked in a fierce fight for market share , now plan to battle round - the - clock . vons cos. this week initiated - hour operations at all but of its stores . and ralphs grocery co. , a unit of federated department stores inc. , is set to begin - hour operations at most of its stores tomorrow . dublin , calif. - based lucky stores inc. is also testing all - night operations at six of its los angeles stores . twenty - four - hour supermarkets aren't unusual in other parts of the u.s. , and a number of individual stores in the los angeles area are open through the night . but the move to operate - hour stores chainwide appears more as a competitive tactic in line with the price wars , double coupons and pointed advertising campaigns employed in the past . lately , acquisitions have played a part in the market warfare . el monte , calif. - based vons in december agreed to acquire substantially all of safeway stores inc.'s southern california operations , which would make it the largest chain in the region . los angeles - based ralphs has been rumored to be up for grabs as a result of the takeover battle for its parent , federated , and industry people have said interested suitors include ralphs management and lucky . industry analysts say the move to - hour operations reflects the success in southern california of all - night convenience stores , many of which have added produce in order to attract shoppers . " the grocery stores were missing out , " said richard e. pyle , an analyst with piper jaffray & hopwood inc. in minneapolis . since most supermarkets are staffed through the night anyway with personnel restocking shelves , the analysts said , - hour operations can be relatively inexpensive . " if you can pick up an extra in sales , - hour operation can pay for itself , " mr. pyle said . vons chairman roger e. stangeland said he believes all - night hours will be popular with southern california working couples who can't get to the market during the day , or who don't want to fight the early - evening crowds . vons previously had seven las vegas , nev. , stores operating round - the - clock , although that town's peculiar work habits make it an unusual case . " we thought we'd get a lot of factory shift workers , " said robert wunderle , supermarkets general's economist and vice president for public affairs . " the reality is we found out that the majority of shift workers were white collar " and included transportation workers , medical services personnel , journalists and " just plain citizens that find shopping at or at night is a lot quicker than dealing with crowds and lines . " early concerns over security haven't materialized at pathmark . mr. wunderle says that none of its stores have been robbed late at night , presumably because " the average thief knows that we've cleaned the money out of the stores by those hours . " mr. stangeland of vons said competition hasn't figured much in his plans to introduce round - the - clock operations this week . " if other people do it , fine . if they don't , fine , " he said . but a ralphs executive , noting that its planned announcement of - hour operations had been upstaged by vons , isn't sure that vons's strategy is devoid of competitive intentions . " maybe it's because they learned of our plan . " " glasnost " and " perestroika " -- after a zillion repetitions on tv , we know what these russian buzzwords are supposed to mean : " openness " and " restructuring . " but mere translations don't stop the buzz ; after miles of tv footage , most americans still don't understand what these words really portend . yet the tube keeps on trying , as evidenced by two programs this month , one from public tv and one from turner broadcasting . both claim to have been made without interference from the soviet authorities , and both show aspects of soviet life seldom glimpsed by americans . but they couldn't be more different in terms of cost , scale , ambition -- and degree of understanding . the first is small potatoes . next tuesday , march ( - p.m. est ) , pbs's " frontline " series presents " back in the u.s.s.r. , " a documentary about an american family returning to moscow after a - year absence . when jerrold schecter was moscow correspondent for time magazine in the late s , he and his wife chose to live away from the american enclave , and to enroll their five children in soviet schools . the result is a low - budget film of the schecters chatting with russian friends and acquaintances about the changes that have occurred under mikhail gorbachev . but if that sounds boring , it isn't . unlike most americans who take part in such dialogues , the schecters seem to know whom they are talking to , and what they are talking about . suddenly we realize that these conversations are real , not staged , and that something called " glasnost " really exists . even the russians openly disagree about such subjects as political apathy among privileged youth , the trade - off between economic freedom and security , the status of refuseniks , and the indoctrinational aspects of soviet education . much bigger potatoes is " portrait of the soviet union , " a glossy , seven - hour series produced for tbs by britain's antelope films ltd. ( it began airing on superstation tbs last night and continues tonight , - p.m. est , and tuesday , - p.m. est ; then it repeats on march - , and on april , and . ) . in contrast with the schecters' modest aims , ted turner has declared that he " originated " this project because the american media have failed to convey an adequate picture of the soviet people . " mostly , we see their government officials in moscow . we're hoping to broaden the viewers' experience of this great country . " to be fair , there are some good moments in " portrait of the soviet union . " the poet yvgeny yevtushenko eloquently expresses the hopes of many soviets that glasnost is not just a temporary thaw . and reminiscent of the schecters' film , there is some candid dialogue between a skeptical american and a not - so - skeptical briton living and working in a siberian mining town . but this dialogue provides the only note of honest disagreement in the entire , insufferably harmonious seven hours . the series does not lack for images . we meet host roy scheider in the familiar environs of red square , but immediately we are carried away between the wintry banks of the volga , over the crystalline waters of lake baikal , through the sunlit markets of iblisi , above the misty peaks of the caucasus , and across the golden grasslands of the ukraine . if our mental picture of the u.s.s.r. previously has consisted of gray , grim folk waiting in line to buy a few shriveled vegetables , we'll be surprised by the stunning cinematography of michael reagan . but why must everything be breathtaking ? back in , when mr. turner was negotiating with the soviets about the goodwill games ( his ill - starred alternative to the olympics that won few viewers and lost million ) , part of the deal was that tbs would produce a few hours of travelogue - style material on the u.s.s.r. , to be broadcast along with hours of athletic competition . ira miskin , the executive producer of the current series , says that " portrait " did not grow out of that earlier travelogue material . but what is a travelogue , if not an effort to display only that which is attractive ? " portrait " shows one line of consumers , but quickly identifies them as new year's celebrants in a " shopping frenzy " of gift - buying , because , as mr. scheider intones , " the russians love their children . " the narration includes references to shortages , but the only hardship actually shown is newsreel footage of the siege of leningrad . not only that , " morale among ukrainians is high " because " they've learned to face the threat united . " if this narration seems a trifle upbeat , wait till you hear the rest . for disturbingly long stretches , this handsome travelogue is accompanied by what can only be considered a clear stream of soviet propaganda unpolluted by doubts , questions or negative memories . during the first hour , while being shown a famous writers' enclave outside moscow , we are informed that " pasternak lived here and started it all , and now the princes of literature have their homes in this russian beverly hills . " only at the end of the hour is there a brief reference to the pasternaks' sufferings at the hands of the soviet state . while admiring restored churches , we're told that the russian church , " so long a misfit , " is " still alive after turbulent years . " the only jews mentioned are those in tbilisi who have a " thriving community " where " everyone worships . " the armenians " have at last found stability under the soviets wing , after generations of persecution and genocide . " the baltic states " may not be independent nations now , but as independent peoples , they are as strong as ever . " in the final hour , mr. scheider dutifully recites the party line : " reasoned reexamination of lenin's writings suggest that his successor stalin took the country down a path that was not at all what the founding father intended . " and if the name stalin makes you think of siberia , relax . according to the narration , siberia was settled more by brave pioneers than by forced exiles . today it boasts several " clean , bright , fresh " communities that were " conceived , planned and thoughtfully blended into the landscape " while also being " connected to the outside world by roads , airports and thoughts of peace displayed in signs everywhere . " as mr. scheider says this , the camera lingers lovingly on a huge propaganda mural . and we thought ted turner had gotten out of the billboard business . at a black - tie benefit hosted by ara services inc. a few weeks ago , chairman joseph neubauer and members of his management team exuded confidence as they moved from one dinner table to the next , shaking hands , patting backs and clinking glasses . " they act like they own the company , " said one guest . they soon will . when ara went private in in a billion leveraged buy - out that entailed heavy borrowing , its managers got of the company . last year , ara added about people to its management group , and the stake rose to . now the provider of food distribution , health care , family care and other services is boosting management's ownership stake again , this time to . the company's board approved a plan last week to buy most of the ara stock held by outside investors and employee - benefit plans for a share . for those investors , the biggest of whom include morgan guaranty trust co. , goldman , sachs & co. , chemical bank of new york and metropolitan life insurance co. , the result is a handsome gain : they paid only for each of their shares when ara went private . the new loans will push ara's total debt to billion . interest payments will rise to about million annually . from the beginning , ara's approach to going private has ignored the norms . in most leveraged buy - outs , a group of investors acquires a company in a transaction financed largely by borrowing . typically , the debt is repaid with cash flow from operations or with proceeds from the sale of assets . in contrast , mr. neubauer is proud of the fact that ara hasn't slashed capital spending or sold any major businesses to reduce debt . indeed , the company has reduced total debt by more than million in the past couple of years while making three sizable acquisitions . there have been some problems . for example , the company's smith's transfer trucking unit was sold for a modest amount when it became a drag on earnings . and so far , steep interest payments have kept ara from posting earnings that approach pre - buy - out levels . but overall , ara has been able to run its businesses much the same as before . this year , the company is projecting net income of million . " we've done everything differently , " chairman neubauer acknowledged in an interview yesterday . " if we wanted to get rich and cash out , there were better , faster ways . " last week , in a two - day tour , mr. neubauer visited ara managers in los angeles , chicago , st. louis and houston to explain the new plan . " there were a lot of whoops and hollers , " alan k. campbell , vice chairman and executive vice president , said . " everybody is excited about what this means . " under the plan , the outside investors will keep part of their initial holdings , giving them of the million shares outstanding . but they will have only of the votes , as management gains voting control . owning a piece of the company has been a strong motivating factor for ara managers . now mr. neubauer is betting this motivation will grow . " this gives our managers the majority stake and the control over their own destiny , " he said . " it means they'll have more pride in what they do , and they'll work even harder . " they may stay longer , too . mr. neubauer won't rule out other steps later , such as taking ara public again . " what i like most about this plan is that it preserves all our options , " he said . " one can never tell what will come in the future . " rachel ingalls finally is being noticed here in a serious way . the flashiest but least important reason is that the british book marketing council picked her recently as one of the best u.s. novelists since world war ii . this came as a great surprise to most american literati who had never heard of her . even someone who remembered her face from a picture in the radcliffe freshman register for the class of ' -- because he had surmised , correctly , from her name , that she was the daughter of the harvard professor of sanskrit , and found the connection titillating enough to remember it for almost a quarter - century . how sweet it was , then , to discover that ms. ingalls had fled cambridge , mass. , shortly after graduation to immerse herself in london and the art of fiction . by the time of her bbmc apotheosis , ms. ingalls had been published several times in britain , but barely at all in her native land . her publisher over there is faber & faber , apex of quality and tradition , former employer of that other harvard escapee , t.s. eliot . finally , then , four of her books have appeared here . dell's laurel division just has reissued " mrs . otherwise , she seems ensconced safely at simon & schuster/touchstone , which latched on to her a bit before the bbmc award and seems committed to bringing out her backlog as quickly as possible , so as to get on with new books as they appear . since i actually haven't counted up my favorite postwar american novelists on my fingers ( and toes ) , i can't say for sure if rachel ingalls would make my list . but i do feel confident in recommending everything by her i've been able to read during this year - and - a - half of catch - up publishing . the short stories and novellas in " i see a long journey " ( touchstone , paper , pages , ) and " the pearlkillers " ( simon & schuster , cloth , pages , ) are intellectual horror stories , or at least it's fair to say that they almost all deliver a shock you don't suspect . i don't want to imply that ms. ingalls is the thinking person's stephen king . but this cool , rigorously mental recluse does conjure with the devil . in " mrs . this is the only fantastic element in the novel . everything else might be just another current piece of fiction about a slightly daft woman whose husband ignores her and carries on with other women . enter the demon lover with his splotched green skin and ( barely ) webbed feet . he has been taught to speak american english by his sadistic keepers at the lab . he hides in a spare room . the husband doesn't notice anything amiss . ms. ingalls's triumph is to make all this sound not only plausible but also appealing . she carries off this incident of what is , after all , bestiality , so completely , even offhandedly , that you find yourself feeling dorothy's ardor for the frogman . it is them ( and you ) against a harsh world . is this a joke ? not in any normal sense . it is more to the point to ask whether ms. ingalls means us to take the frogman as dorothy's hallucination or as a " real " frogman . for me , the novel is much more unsettling and interesting if we are meant to believe in the frogman . to explain him away as a brain wave trivializes the whole enterprise . in the novel published most recently here , " binstead's safari " ( touchstone , pages , cloth , paper ) , ms. ingalls takes us once again into the same troubling world where people and animals meet as equals , but here the encounters are less overt and the human heroine's own abrupt and not completely metaphorical transformation from lamb to lioness is at the center of the tale . all her life , millie binstead has been a wimp , pushed around , ignored and betrayed by her husband , stan . then , as if by magic , she wakes up , during a trip they make to east africa , and to his amazement she takes charge of her life and leaves him , as it were , in the dust . ms. ingalls never bothers to explain how this happens . as with the arrival of mrs. caliban's frogman , this miracle is where her story begins . to play the game , you have to accept this condition , this rule . while the binsteads wait in the capital for their safari to get organized , millie falls in love with a legendary lion hunter . he takes her with all the suddenness of the king of beasts charging prey . she leaves for the veld with stan , but her firm intention -- and millie is now capable of great firmness -- is to marry the hunter after the safari . what follows is violent and yet subtle , erotic and tense while always polite . to say straight out how the lions , in particular one great - maned male , are part and parcel of this ironic , post - feminist romance would be to give away an intricate plot and to misrepresent a sophisticated contrivance . i will say , however , that if you read " binstead's folly , " the zoo will never seem the same . william h. masters , one of the authors of a controversial new book alleging aids is exploding among heterosexuals , is trying to develop a commercial product for use in preventing heterosexual transmission of the deadly disease . last october , dr. masters was given in seed money by ortho pharmaceutical , a unit of new brunswick , n.j. - based johnson & johnson , to help finance research into a spermicidal jelly that would kill the virus that causes acquired immune deficiency syndrome . if the research is successful , ortho also has agreed to create a product from a formula devised by dr. masters . dr. masters's interest in an anti - aids product isn't mentioned in his book , " crisis : heterosexual behavior in the age of aids , " which was co - written with his wife , virginia e. johnson , and robert c. kolodny . the book , published by grove press last week , has been denounced by some government officials and aids researchers as a gross exaggeration of the danger of the disease to heterosexuals . dr. masters said his book and his product idea are simply a two - pronged effort to " protect human life . " dr. masters's research is based on the supposition that raising the acidity of the vagina would kill the aids virus . the combination of a possible commercial product and the extreme conclusions drawn by dr. masters and his co - authors -- that a person could get aids playing touch football , for example -- raises questions in the minds of some who study ethics . " if they stand to profit by more rather than less anxiety in the general population , then i think that raises the issue of conflict of interest , " said kathleen nolan , associate for medicine at the hastings center , which studies medical ethics . " the handling of aids should be conducted in as morally pure a fashion as possible . it's too important to have individual interests playing large roles . " dr. masters has spent the past months unsuccessfully trying to raise money from government agencies and foundations to support research of his product . " perhaps part of the problem with getting funded was some people were less focused on the heterosexual problem of aids , " said dr. kolodny , who has been assisting in the fund - raising effort . " the institute might , " he said , referring to the masters & johnson institute in st. louis , of which he is a founder and co - chairman . " if i could develop an idea that was proved functional and could impede the spread of aids , why is that a conflict with the book ? " dr. masters said . " if i can do anything to prevent aids , so be it . " a spokesman for ortho declined to provide details of the company's financial arrangement with dr. masters . the three co - authors have suspended most publicity efforts for the book , canceling many appearances they were to have made in the next few weeks . since the publication of the book , which was excerpted in newsweek last week , the authors have been barraged by skeptical questions and criticism of their scientific methods . " my god , woman , " dr. masters said in answer to a reporter's question , " my concern in taking this beating is i'm terrified by the spread of aids . i'll do anything to prevent its spread . " that dr. masters was developing an anti - aids product came as a surprise to the publisher of the book . although he knew nothing about the product , said aaron asher , publisher of grove press , it was " absurd " to suggest there is a conflict of interest . the authors have " great integrity , " mr. asher said . mathilde krim , chairwoman of the foundation , said dr. masters's product is " a good idea , " but she criticized the book for " encouraging aids hysteria . " dr. krim's foundation decided not to give dr. masters any money for his research because he was asking for about -- " too much for us , " she said . dr. masters , a gynecologist by training , concedes that he isn't qualified to do drug research himself . he said he would hire researchers to do it for him . " the only thing i can do is prove it works , " he said . eurodollar bonds posted small losses thursday , and the primary market saw a scattering of issues in various currencies , including halifax building society's # million ( million ) offering via warburg securities . seasoned eurodollar bonds edged / point to / point lower , mirroring an easing of u.s. treasurys in london . a rise in commodity prices , including gold and oil , was said to have unsettled both markets somewhat , and traders said they believe investors are watching for an opportunity to sell dollar bonds . in part , this stems from concern that the markets still may not have fully discounted the possibility of a stronger than expected u.s. economy after recent economic reports . traders said some subordinated floating - rate note issues , particularly those for european banks , declined sharply in price . the drops may have been prompted by investor selling in a very thin market , said one analyst , who pointed out that japanese institutions are beginning to square their books in preparation for the end of their fiscal year march . volatility in the notes has grown because several major traders recently halted or began limiting marketmaking in less - liquid issues . led by merrill lynch capital markets , the issue was priced to yield basis points over u.s. treasurys . other traders noted that the issue was relatively small by current standards but said that because its launch spread was reasonable , the bonds probably would find good demand . a merrill lynch official said the bergen issue was designed to permit the bank to call a million issue , its / bonds due in . a federal judge , in a potentially far - reaching decision for the accounting profession , ruled that u.s. - based accounting firms can be sued in u.s. courts for allegedly shoddy audits in other nations . the ruling , by judge charles e. stewart jr. , denied a motion by arthur andersen & co. , the biggest accounting firm in the u.s. , to throw out a million suit against it for allegedly negligent audits . the audits , made between and , were of de lorean motor co.'s irish unit , which collapsed six years ago . andersen , which has denied the charges , said it plans to appeal judge stewart's ruling . in arguing for the motion , chicago - based andersen asserted that u.s. courts shouldn't have jurisdiction in the case . the plaintiff , the british government , claims it had a loss of million by buying de lorean securities overseas , and asked for triple damages under u.s. anti - racketeering laws , plus million in punitive damages . judge stewart said the plaintiff has shown that andersen's consolidated reports of de lorean motor were " a direct cause " of the british government's losses . " this decision could increase the liability exposure enormously of u.s. accounting firms doing audits of overseas subsidiaries of american companies , " said dan goldwasser , a lawyer and consultant to the new york state society of certified public accountants . james sabella , a partner at breed , abbott & morgan , which represents andersen , said the decision opens up " a bunch of new problems for major u.s. accounting firms , " because " u.s. courts are far tougher on accountants than english and european courts . " in chicago , harold cunningham , an andersen partner , said , " we feel there have been numerous court decisions in which overseas investors were denied relief in u.s. courts . " according to mr. cunningham , a federal court in washington , d.c. , has ruled that the u.s. securities laws don't apply to foreign securities not registered in the u.s . judge stewart's decision also expands the duties of u.s. accounting firms to investors who rely on audited financial statements . in addition to ruling that the court retains jurisdiction , judge stewart also held that claims for punitive damages under anti - racketeering laws are valid . andersen's attorney , mr. sabella , noted that under the ruling , andersen must first ask judge stewart's permission before filing an appeal . in its replies to the suit filed early in , andersen has said it warned the british government and de lorean motor's board as early as about the irish subsidiary's business problems , but had been reassured by the company and the british government that the subsidiary wouldn't be permitted to sink . the british government has charged that andersen " recklessly disregarded " illegal transfers of funds by the company and gave the subsidiary a clean opinion . a quartet of domestic oil stocks rose yesterday in active trading on takeover speculation , sparked in part by the cash mobil corp. expects to receive from the pending sale of its montgomery ward & co. department store unit . the gainers included unocal corp. , which climbed a share , to , on million shares ; phillips petroleum co. , which rose cents , to , on million shares ; amerada hess corp. , which gained , to close at on shares ; and kerr - mcgee corp. , which rose cents , to on shares . analysts said mobil's announcement monday that it had agreed to sell montgomery ward in a transaction valued at a total of billion added fuel to mounting speculation that other major oil companies , including british petroleum co. , royal dutch/shell group , and amoco corp. may pursue smaller u.s. oil producers . " the word is out that some folks out there are putting a shopping list together , " said thomas e. lewis , an analyst at duff & phelps inc . officials at the four oil companies declined to comment on the stock activity or on speculation that any of them might be a takeover target . interest yesterday focused on unocal . a company spokesman and an outside director denied the speculation . " mr . hartley is still chairman and will continue to be , " the spokesman said . mr. hartley , who has dominated unocal for more than two decades and who headed its defense against a takeover attempt led by t. boone pickens jr. , is often viewed as resisting major changes at the company . his retirement , long a matter of speculation , could bring new policies at the company . adding to the surge of interest in los angeles - based unocal was an analysis issued monday by salomon brothers inc. , projecting a sharp upturn in earnings this year principally because of forecasted refinery profits . the analysis , by bernard j. picchi , also forecast " key management shifts -- or at least important changes in the attitudes of key managers . " mr. picchi didn't say why he foresaw possible changes in management but said a shift in unocal's tax position and the pressures of a possible new wave of merger activity in the oil business may encourage the company to sell assets -- a step that unocal has resisted in the past . among the companies mentioned in the past as prospective bidders for unocal are british petroleum , pennzoil co. , and mobil . new york - based mobil has declined to say what it will do with the proceeds of the montgomery ward sale but indicated before the sale was announced that it would consider acquisitions if opportunities arise . however , a senior official yesterday said mobil had no plans to acquire unocal . " we're not interested , " said richard f. tucker , vice chairman of the parent company and president of its mobil oil co. unit . mr. tucker declined to elaborate . officials at british petroleum and pennzoil couldn't be reached for comment . eighty - year - old albert gore sr. , retired senator from tennessee , shuffles past annie ackerman's oxygen tank and settles into a folding chair by her bedside . he hands mrs. ackerman , who is , a newspaper clipping about her and suggests she frame it -- with compliments of his boy , who is running for president . mrs. ackerman is an - pound great - grandmother whose oxygen tank , at five feet , is taller than she is . a cancer patient for seven years , she now leaves her bed only to go somewhere in her wheelchair . but mr. gore knows what he is doing in courting her . mrs. ackerman can deliver a chunk of the " condo vote , " a bloc much coveted by presidential contenders in the florida primary on super tuesday next week . working the phones or dispatching lieutenants to solve condo problems , she is a retirement - community version of a political boss , what is known locally as a condo commando . in fact , she is the queen of the condo commandos . " annie has been wooed by more democrats running for president than any other woman in america , " says rep. william lehman , who has been re - elected under her banner seven times , always in a breeze . they can give favored candidates access to pools , clubhouses , orchestra halls and banquet rooms , all filled with people almost sure to vote . " people living in condominiums are looking for new friends and new activities , " says mrs. ackerman , glancing up from " wheel of fortune . " she herself is a mah - jongg buff and onetime dancer in the condo chorus line . " it's natural for them to join groups , " she adds , " and once they join groups , it's natural for them to cling together and vote together . " her power base is the point east condominiums , white boxes overlooking biscayne bay , whose registered voters make up the whole of dade county's th precinct . with her bedside phone , mrs. ackerman can mobilize " annie's army , " a small group of her pals who help out with various tasks year - round , like driving widows to the supermarket , raising money for israel or arranging race - track outings . mrs. ackerman doesn't have a title , but she has the sanction of the condo association's head , - year - old ernest samuels . in the political season , annie's army shifts its mission . they're free , and enthusiastic retirees , for whom the events are social as well as civic , may show up minutes early -- on " condo time . " mrs. ackerman doesn't have patronage jobs to hand out , but her network of friends can manage small favors : help with a medicare form , for instance , or a parking space closer to an elevator . election day itself she plans like a military operation . one afternoon , mrs. ackerman sits in her king - size bed mapping strategy with her nuts - and - bolts person , mollye lovinger fox , a - foot - - inch new yorker who once climbed to a condo roof to talk down a suicidal retiree . mrs. fox says she will assign captains to each building and lieutenants at four spots leading to the condo office , where the polls are . they may try to get a bullhorn , in case some people still aren't sufficiently urged to vote . every so often on election day someone will call mrs. ackerman and say who has voted and who hasn't . laggards may receive a friendly knock on the door . " we'll even breathe for the people , " she says . she expects a turnout of . that wouldn't be unusual for florida retirees with more than enough time to go to the polls . one dade county election official , sent to a miami beach polling place to clear up some confusion that was delaying the voting , was told by an elderly gentleman , " i intended to spend the whole day here , so don't make me vote any faster . " from the point east condominiums , mrs. ackerman's power radiates outward . friends at other condos copy her palm card . she leads or used to lead many clubs -- the democratic club of north dade , concerned citizens of northeast dade -- and still has influence in them . with other commandos in northeast dade county , she can forge a voting bloc of more than condo - dwellers . " annie wields more power than any one private citizen in the state of florida , " says the state democratic party chairman , charles whitehead . recognizing it , florida's legislature has just renamed a - block stretch of biscayne boulevard after her . mrs. ackerman often backs incumbents and front - runners . she has already taken a straw poll to see which way the wind is blowing at point east . when she finally gets behind a candidate , the person is almost sure to carry the condo overwhelmingly . " honey , " she tells a reporter , a tad blunt and testy , " the chicago wards were sweet by comparison . " she would know about that . before retiring to florida in with her late husband , irving , mrs. ackerman was a ward organizer in the daley machine . applying her block and precinct methods here , she more or less invented condo politics . she started by giving book reviews to discussion groups , then quickly moved on with mrs. fox to solving local problems . by banding together , point east helped pass state condo legislation and win new streets , traffic signs , a bus route and designation of the condo as a precinct by itself . by the mid - s , mrs. ackerman was a political force . since then , the number of condo commandos has grown steadily . here in south florida , the voters are mostly middle - class northeasterners and the organizations democratic . gray power is also growing along the state's west coast , where a lot of conservative midwesterners have settled . the biggest battleground is a - mile stretch of condos in dade and broward counties , where about democratic ballots are expected to be cast on tuesday , mostly by jewish retirees . dropping in to campaign , gov. michael dukakis's - year - old father - in - law , harry ellis dickson , a violinist and associate conductor of the boston pops orchestra , makes a point of telling condo dwellers how he hopes to preside at a white house seder next passover . and using the yiddish word " nachus " ( joy in someone's achievements ) , he wins points with the rhyming slogan " nachus for dukakis . " the senior mr. gore can't match that , but he chats with condo commandos about his son's record on israel and a grandson's trip to the dead sea . and now joining the dueling dads is a motivated mom , rep. richard gephardt's - year - old mother , loreen . she tells a group in miami beach that her son is a good boy -- he always used to have the table set when she got home from work . she cares greatly about " local " issues , like long - term health care and social security . one evening , reviewing former house speaker tip o'neill's autobiography for a discussion group , her feather boa draped over her wheelchair , she declares : " tip o'neill understood that politics doesn't start in washington , it starts in your own back yard . if the politicians do in your community what needs to be done , then you should vote for them . " so who is her man on super tuesday ? she hasn't issued her endorsement yet . if mario cuomo were in the race , she would back him . for a while she favored joseph biden , whom she met twice . " joe biden presented himself very well , " she says . " and on top of that , he's handsome . and on top of that , he's cute . " he isn't in the race now either , of course . but a few days ago gov. dukakis won a condo straw poll mrs. ackerman commissioned , and she made sure the results were made known . " kitty's a doll , " mrs. ackerman says . it's beginning to look as if come super tuesday , gov. dukakis will be on the point east condo commando's palm card . two top executives of computervision corp. , recently acquired by prime computer inc. , are leaving the company with lucrative separation agreements . robert l. gable , who had been president and chief executive officer of computervision and strongly opposed the takeover , turned down an offer to remain as president of prime's computervision division . mr. gable , who will leave the company at the end of march , will continue as a consultant to prime . in addition , dorick v. mauro , who had been computervision's chief financial officer , is leaving to pursue " other career opportunities , " prime said . mr. gable , years old , said he is resigning with " no animosity , no hard feelings . i'm not being drummed out of the corps. . . . i would find it difficult to go from the ceo of a publicly held company to the head of a division . i've been making decisions too long without having to check with people . " mr. gable said he plans to pursue personal interests , including getting to know his grandchildren . under his severance agreement with computervision , mr. gable will receive a lump sum payment of about million , or three times his highest annual salary and bonus , sources said . joe m. henson , prime's president and chief executive , said he isn't aware of any other senior executives of computervision who plan to leave prime . " it is our hope and expectation that a number of senior managers will stay and assume important leadership roles , " he added . prime , a minicomputer company based in natick , mass. , said robert a. fischer , , who had been president of its cad/cam and workstation/terminals business group , was named president of the computervision division . the division will be responsible for manufacturing - industry sales and marketing . r.l. brubaker , , vice president of world - wide sales , was named president of the commercial and technical industries sales and marketing group . both will report to mr. henson . david j. collard , , who had been a vice president , finance , of prime , becomes chief financial officer of computervision , succeeding mr. mauro . richard l. buckingham , , who had been vice president and treasurer of computervision , was named vice president and treasurer of prime . sweden's increasingly profitable big companies are flush with cash , causing analysts to bet that the liquidity will fuel a wave of acquisitions . takeover rumors are sweeping the stockholm stock exchange . the hottest talk centers on ab volvo , the automobile , truck and food group that at the end of last year had at least billion kroner ( billion ) on hand and now may have billion kroner . commenting yesterday on rumors that volvo was considering buying minneapolis - based pillsbury co. , the fourth - largest food company in the u.s. , a spokesman said he didn't know if volvo contemplated such an acquisition and said no such talks were under way . pillsbury , too , said it hadn't been contacted by any potential suitor , and its chairman has said it would resist a takeover . analysts say other u.s. food companies would make more - attractive , cheaper and more - willing targets for volvo . " we'll see quite a bit of money being used soon , " predicts johan strandberg , head of research at haegglof & ponsbach fondkommission ab , one of sweden's biggest brokerages . yet a hoard of cash doesn't necessarily mean that a company will hit the acquisition trail . " having money doesn't mean you plan to buy something , " says lennart ribohn , a vice president of electrolux , a company that routinely grows through acquisitions . electrolux's cash , mr. ribohn notes , is dispersed around the world , and it often borrows to fund acquisitions . if volvo doesn't go after pillsbury , analysts expect the swedish group to put its cash hoard elsewhere . " volvo can generate a substantially better return on its operations than on a pile of cash , " says hakan filipson , chief analyst at enskilda fondkommission ab , the securities unit of skandinaviska enskilda bank . " so we can expect more acquisitions . definitely . " rumors constantly circulate that volvo will boost its stake beyond the it already owns in pharmacia ab , a swedish drug company . other rumors link volvo with the british food group cadbury schweppes plc . most analysts focus on possible swedish acquisitions abroad . large - scale overseas investments became convenient for swedish companies in june when foreign - exchange controls were relaxed . in part , analysts say , that is why many swedish companies are so liquid . some companies also maintain domestic cash stocks to meet financial obligations and avoid foreign - exchange risk . in addition , some companies borrow money abroad at low interest rates to reinvest in higher - yield swedish government bonds . so what's the best rock radio station in the country ? don't even try to guess . for the ninth consecutive year , cleveland's wmms has been voted no. by rolling stone magazine readers . that's quite a coup , considering cleveland is only the country's th largest radio market . so what is wmms's secret ? its with - it disk jockeys ? its mix of hard rock with the top - hits ? how about its ballot - box stuffing ? the truth is in the stuffing . wmms , a malrite communications group station , says it bought some copies of the magazine that contained the poll and distributed many of them to fans and station employees . " we urge employees to fill them out , but we don't know who they voted for , " says station manager lonnie gronek . he says the station has done this for many years . wmms won this year's contest with votes , beating new york's wnew by votes . about votes were cast . rolling stone probably wouldn't have uncovered the ploy if the cleveland plain dealer's rock editor hadn't gotten a tip . " wmms has always urged its own employees to participate in the balloting -- all at the station's expense , " wmms responded in a full - page ad in the cleveland paper . besides , it added , " positive recognition of the station translated as a source of pride for cleveland . " so far wmms's admission has rocked its hometown more than it has new york . mark d. chernoff , wnew's program director , says he won't insist that his station be declared the winner . " that's up to rolling stone , he says , quickly adding : " but we'd gladly accept it . " cleveland broadcasters aren't so kind . john lanigan , a disk jockey at competing station wmji , suggests that wmms " should buy a billboard that says : ' we bought more rolling stone magazines than any other station. ' " he also maintains that wmms's actions " tell kids it's all right to lie and cheat to be no. . " at rolling stone , managing editor james henke says the annual contest hasn't barred stations from voting for themselves . " obviously they went against the spirit of the contest , " he says . for its part , the magazine is considering stripping wmms of the once - coveted award . the arab american institute issued a report recently on the presidential candidates' stands on the middle east . it's entitled " the deadly silence . " the title may be overdrawn , but it points to an unusual situation in the presidential campaign : though reports of rioting by palestinians in the west bank and gaza strip and israel's hard - nosed military response have filled newspapers and television newscasts for weeks , they get little attention on the campaign trail . " it's remarkable , " says judith kipper , a middle east analyst at the brookings institution . some middle east analysts decry the lack of attention , though ms. kipper argues that it's probably for the best because the candidates might only exacerbate tensions by politicizing the explosive palestinian problem . candidates have made some comments , of course , though mostly they speak up only when asked . their remarks tend to be studiously vague , and any criticism of israel is muted . in a recent debate , for instance , republican sen. robert dole decried palestinians for " taunting " israeli troops and then chided the israelis for using " excessive force " in reaction . but in general , israeli - palestinian tensions attract less attention than a host of vague campaign topics such as personal character or arcane issues such as the computation of social security payments for people born between and . of several explanations , the first and most obvious is that candidates worry they may say something about israel's tactics in suppressing palestinian unrest that offends the politically powerful supporters of the jewish state . " there's obviously an element of truth that all politicians , week in and week out , campaign among members of the jewish community , " acknowledges john buckley , a campaign spokesman for republican rep. jack kemp , a staunch backer of israel . " but at the same time , it's pretty clear there is a broad consensus among non - jews in this country that israel is a good and loyal ally . " candidates usually spend much time in a presidential campaign building their pro - israel credentials , and they are reluctant to undo that . sen. simon was a co - sponsor , even though a few years ago , before he was a presidential candidate , he wrote in a book : " we should be willing to talk to the palestine liberation organization . " but the strength of the israeli lobby is only a partial explanation . the presidential campaign still is at an early stage , when candidates are posturing about " leadership " and failing to address many foreign - policy issues in any detail . and while the palestinian rioting has captured american attention , it doesn't seem to have aroused much public appetite for american action . voters appear to have little faith left in the oft - discussed middle east " peace process , " so neither they nor journalists are pressing candidates to explain how they would get israelis and palestinians into negotiations . when mr. babbitt gave what aides considered a fairly tough and specific middle east speech , for instance , " we got maybe one or two paragraphs of ink , " recalls babbitt spokesman michael mccurry . also , the american jewish community itself is divided over israel's tactics in suppressing palestinian unrest , adding to candidates' instinctive caution . absent pressure to be specific , candidates prefer to avoid missteps they may regret later . " i think in part there's a lack of courage and a lack of vision that plagues most candidates , " says james zogby , executive director of the arab american institute . " they aren't convinced at this point that political courage and conviction can win an election . " m. lee pearce , who carved a reputation on wall street as a tough and savvy investor in florida bank and thrift stocks , is back on more familiar turf : health care . many investors shied away from the market in the wake of the oct. crash . not the gray - haired and bespectacled dr. pearce . the - year - old physician more than doubled his stake in american medical international inc. , the big beverly hills , calif. - based hospital chain and health - care concern , to . dr. pearce says he is giving american medical until aug. , the end of its fiscal year , to show improvements . after that , he will evaluate options including trying to oust management or seeking a merger of the company . dr. pearce , a reserved figure who looks as if he were born in a gray three - piece suit , says his investment is a good bet . " i see a downside risk of a share and an upside potential of at least , " he says . dr. pearce paid million , or an average of a share , for his five million american medical shares . in composite trading on the new york stock exchange yesterday , american medical closed at , up cents . he also wants the company to fire workers and otherwise slash operating costs . " i'm the first person who's attempted to shake the tree a bit from without , " he says . " i perceive myself as an external catalyst . " but walter l. weisman , american medical's chairman and chief executive officer , says the company doesn't need a catalyst and already has a plan in action to accomplish much of what dr. pearce seeks . " dr . pearce's suggestions happen to coincide , quite understandably , with what we have been doing , " mr. weisman says . " we're just going steady on our course . " mr. weisman says the company sold hospitals in fiscal and , in the past several months , bought back million shares for about million and repurchased some costly debt . the company has also sold a stake in its british operations in a public offering , and will probably sell another five to of american medical's u.s. hospitals . " when you are hemorrhaging , you need relief and you need relief today , " he says , noting the company's plan " won't affect earnings until fiscal or . that's simply too long . " dr. pearce says how much support he gets from other shareholders will help him decide whether he will take aggressive steps to bring change at american medical . since the sec filing , dr. pearce says , shareholders who together with him hold about one third of american medical shares have contacted him and expressed support of his proposals . he wouldn't identify the investors . a spokesman for the bass brothers of fort worth , texas , who through a partnership hold a stake , said they wouldn't comment . a spokesman for the houston - based wedge group , which holds a stake , said it has talked with dr. pearce about his intentions and is inclined to support his , or any other , proposals to enhance the stock's value . so far , discussions between dr. pearce and management have been cordial . but the doctor can be a formidable opponent . he says that transaction was his only one in which the term greenmail could be applied . " when i made the investment , i never dreamed of that , " he says . even as a passive investor , dr. pearce seems to have a knack for picking gold mines . he holds a stake in miami - based amerifirst federal savings & loan association , which has nearly doubled in value since he bought it . and now amerifirst is said to be in discussions about its being acquired or merged . these days , dr. pearce is devoting much of his time to gearing up his general health l.p. , a health - care consulting firm that he says may eventually make some substantial acquisitions . and he recently agreed to join an advisory board to canaan venture partners , a rowayton , conn. - based venture capital partnership . frequent - flier programs are the marketing weapon of the s : the giveaways are tax - free , addicting and even slightly immoral . now , the people who dreamed them up find their once - clever gimmick is developing into an insidious financial trap . none of that , of course , was foreseen when american airlines introduced the first frequent - flier program in . although the concept was little more than a takeoff on green stamps , its success in generating repeat business stunned the industry . other carriers raced to come up with their own plans -- each promising better and better rewards to customers who would sign up . today , frequent - flier programs are so popular that airlines now owe participants more than three million round - trip domestic tickets , according to one newsletter publisher . that's enough to fly at least billion miles -- free . and therein lies the industry's problem . those free tickets represent an enormous potential liability because people using them threaten to displace paying passengers . thus , airlines' outside auditors might force the carriers to add hundreds of millions of dollars to their liabilities . in effect , the carriers may have to treat their promise of free tickets as a loan on their balance sheets . the promotion is adding hordes of new members to frequent - flier programs , ballooning the award liability and worrying the airlines' hotel and car - rental partners , which are contractually obligated to offer added freebies to frequent fliers . " only a fool would tell you that this is not fraught with problems for the industry and for frequent fliers , " says james o'donnell , continental airlines' vice president of marketing services . potentially , triple - mileage programs represent " a monumental mistake , " adds david sylvester , an airline analyst at kidder peabody , who estimates that the promotion will reduce industry profits by million in . another analyst predicts that by the end of this year , airlines will face a potential revenue loss of billion from frequent - flier programs . the industry's worst nightmare has all those free fliers cashing in over a short period of time and gobbling up revenue - producing seats on many flights . officials remember that in , when pan american world airways forced frequent fliers to use their awards or lose them , the result was chaos and a million revenue loss . that could cause such a stampede of award redemptions as to generate staggering losses . airlines have recently begun new moves to minimize the damage . for example , texas air corp.'s continental has started limiting the number of free fliers on many of its flights , a direct response to triple - mileage offers . others are considering similar restrictions . that may save dollars but would cost airlines good will as angry consumers find it harder to redeem awards . despite such moves , airlines this year are adding to their liability as never before , thanks to the triple - mileage bonuses . delta air lines started the stampede in november , and others quickly followed -- reasoning that the added incentive might raise passenger traffic in the traditionally weak first quarter . but the promotion has revived old fears , especially of irs intervention . if the irs moves in , " i'd send everybody i know everywhere i could , " says ernest s. arvai , an airline consultant at arthur d. little , who has accumulated mileage points -- equivalent to at least round - trip tickets . the irs won't reveal its plans , saying it is still working on enforceable regulations . and corporations , which have long been irritated at the windfall employees claim at their expense , could be tempted to take frequent - flier awards away . for now , at least , the programs are a windfall for air travelers . signs of excess abound , however . on some carriers , just two long round trips are enough to earn a free round - trip coach ticket . by paying a total of for two round trips between chicago and detroit , for example , passengers on midway airlines can get a free round trip to florida . and expense - account fliers , who learned long ago to construct elaborate flight schemes to earn extra mileage , now are battling to pick up dinner tabs to grab mileage linked to charge - card purchases . even some frequent fliers fear that the free lunch is doomed . " people like me are afraid the airlines will discontinue the awards in six months , and we'll have all this piled up and not used , " says rodney s. laughlin , a kansas city businessman . he hoped to take a week's vacation sometime between may and june and get free lodging at a marriott hotel in a place like paris , london , vienna or maui . but the first nine places he asked about had no rooms left that could be used by a frequent flier for a full week . other fliers had apparently beaten him to the limited numbers of rooms marriott allocates for the program . " i can get three days for nothing , but they say i have to pay for the others because there aren't enough rooms available for this program , " mr. laughlin says . finally , after an hour of calls , he found an opening at the th marriott he tried , in vail , colo . roger j. dow , the vice president for sales and marketing services for the hotel chain , says the program's success caught marriott by surprise and it is " regrouping " to make more rooms available . as a result , the probability that a first - class passenger flying on a frequent - flier award on that route would be displacing a full - fare passenger soared to -- a more than tenfold increase from the previous quarter . the programs thus threaten to backfire on the people airlines wanted most : business travelers . peter elinsky , a washington , d.c. , accountant , fears that the hordes of free fliers will make it harder for him to travel . " i'm going to have to book airline tickets two months in advance because everybody and his sister is going to be on the airplane , " he says . but if airlines save more seats for people such as mr. elinksy , they risk the wrath of business travelers such as mr. laughlin trying to take their free trips . " they can so restrict the number of seats that the utility of these awards is substantially devalued , " says christopher ames , a deputy attorney general in california . mr. ames says that early last year , he asked a california airline for the next available flight to mexico for a frequent flier . the answer : november . the next flight for a paying passenger ? such restrictions are likely to grow in coming months . already , most airlines ban free flights around major holidays . some foreign airlines limit the number of free fliers on flights abroad . in addition to the limitations already in place at continental , major domestic carriers are preparing rules to limit the free fliers allowed on a given flight . northwest airlines plans to announce some restrictions this month , though it promises to do so gradually . usair says it might have to introduce them on longer routes . in the long run , consumers may end up paying for the bonanza they are enjoying now . " frequent - traveler programs have to cost money somewhere , " says randall malin , usair's executive vice president for marketing . " so , ultimately , either the consumer pays or the stockholder pays . " airline executives privately concede that they will have to pass on some of the increased costs of the frequent - flier programs to passengers in the form of higher fares . and if airlines take steps to reduce their liability -- such as raising award levels and limiting the free seats -- such restrictions probably will remain even after triple - mileage promotions end . airlines' outside auditors face problems , too . when carriers first started offering frequent - flier bonuses , most assumed that they could accommodate the free - ticket holders with otherwise - empty seats . that made the additional cost of the program so minimal that airlines' books didn't have to reflect more than a small liability . but now , with more and more tickets being given away , paying passengers are getting crowded off flights . as a result , a task force of the american institute of certified public accountants is developing new rules that are likely to force the airlines to face the new reality on their balance sheets . final rules , which would have to be approved by the financial accounting standards board , could take effect late this year or early next year . julius maldutis , a salomon brothers analyst , says one proposal would have airlines record the equivalent of of their passenger revenue as a liability -- indicating a potential industrywide revenue loss of billion next year from the accounting adjustment . hotel and car - rental companies also might have to consider changes in their accounting . in a report titled " why bother charging a fare at all ? " he estimates airlines' potential revenue loss by the end of this year at billion -- with million of that due to triple mileage . " the industry is facing a far greater menace than in any price wars of the past , " he says . industry executives contend that the problem is manageable , with passengers flying free representing to of airline traffic . they note that some frequent fliers never use their awards , while others use them for benefits other than free flights , such as upgrades . as a last resort , airlines could severely restrict free flights . carriers' latest attempts to " burn off " the liability involve programs to get passengers to use their awards in off - peak periods . members of texas air's one - pass program can get one free round - trip coach ticket for miles , down from normally . the catch : they can use the awards only between noon monday and noon thursday , must stay over a saturday night and must make reservations in advance . airlines see another ray of hope . although they proclaim their opposition to taxation of frequent - flier benefits , some of them are quietly hoping that the irs will ease their problem by moving overnight to tax the benefits . that would not only drastically cut the number of people redeeming awards but also avoid the rush caused by any deadline set for the future . " it will cause bad will , " says mr. arvai , the airline consultant . " but it will cause it for all carriers . " morton i. goldman ( letters , jan. ) claims that my figures comparing health effects of coal and nuclear ( " nuclear power's secret , " editorial page , dec. ) were " calculated assuming that mid - s emissions of sulfur oxides and particulates would remain essentially unchanged . " this is quite erroneous . the figures ( as predicted in by brookhaven national laboratory ) applied to assuming that older plants would be retired and better pollution equipment would come on line . these ( not ) figures were what i used ; but due to the many plant cancellations since , and extended life of older plants beyond their expected life , this value is , if anything , too optimistic . regarding chernobyl , people were hospitalized , but the number of deaths , including those by burns and the initial explosion , was . the number of lives saved from coal during chernobyl iv's months of service was thus at least times greater . as for the " several thousand long - term fatalities from radiation - induced cancer . . . projected for the soviet union and europe , " we never will know whether they are imagined or real , since they are too few to be detected among the more than million cancer deaths that will occur in the european population anyway . it has been implied in mr. beckmann's " nuclear power's secret " that chernobyl will have a small impact on human health . unfortunately , this is not likely to be the case . bennett ramberg reviewed scientific projections of future cancer fatalities in an article in foreign affairs : " scientists express an extraordinary range of calculations about the long - term effects of chernobyl , the low being deaths and the high , one million deaths . to the extent that there is a consensus -- and it is a quite shaky one -- deaths are predicted in the range of to within the soviet union , with substantial numbers outside . whatever the figure , nonfatal cancers will be of similar magnitude and genetic effects may appear in future generations . " in your jan. adaptation of the secretary of the navy's speech before the national press club , you captioned mr. webb's concluding remarks with the phrase " decade of evisceration . " jim webb and i were classmates at annapolis , and i have noted that he is fond of pointing out that when we were commissioned in there were some combatant vessels in the navy . mr. webb appears to invoke this favorite nautical statistic when seeking to intimate that the reagan administration is largely responsible for rescuing the navy from the wrecking yard and that the current hull count of combatants may still be dangerously low . perhaps the secretary should be reminded that the navy of was composed in large part of world war ii - vintage vessels and that unless this country were willing to undertake a wartime rearmament program of immense expense , the size of the navy was destined to shrink dramatically as the average age of its ships edged beyond years . thus the " greatest evisceration of the navy in its history " was not only inevitable but in large part desirable . however , just because the low in total number of vessels occurred immediately prior to the reagan inauguration hardly implies that a turnaround resulted from that inauguration . many of the capital ships launched since were budgeted long before president reagan took office . and , the effectiveness of that rebuilding effort still is an open issue . for example , the wisdom of repopulating the navy's ranks with recommissioned battleships still is debated widely both within and without the navy . mr. webb might be overstating an important point when he makes this apples - to - oranges comparison of the and ship count . no one in the navy would contend that the sophistication and firepower of a modern naval vessel is an exact or even a near equivalent of the vessels of a generation ago . that being the case , it is quite possible that today's navy with fewer ships is far more capable of carrying out its mission than was the case in . surely mr. webb would agree that this is exactly the way it should be , because no one can deny that today's navy costs the taxpayers far more to build and maintain than when jim webb and i were midshipmen . the argument that carriers are susceptible to nuclear submarines is true , but no more true than for a landlocked air base such as clark air base in the philippines or any other base within striking distance of a sub . carriers , at least , present a moving target . if we look at recent history , we had an air raid against libya . carrier - based fighter - bombers were launched and recovered from just off the coast . land - based fighter - bombers were launched from england and supposedly took the circuitous route just to get to the target . and , i ask , where is the nearest land base to the persian gulf ? as a marine corps helicopter pilot , with more than a year at sea aboard helicopter carriers including a tour in beirut , i personally can attest that it was much more reassuring knowing that my fighter cover was just over the horizon on deck alert rather than in turkey or greece on strip alert . it would be great if we could maintain air bases all around the world . carriers may not replace land bases , but we may not have a choice . jacksonville , n.c . the leading indicator for the u.s. semiconductor industry showed continued strength in january , according to the semiconductor industry association . but another trade group , the american electronics association , found a potential warning flag for chipmakers in commerce department figures that showed semiconductor order growth slowing in december . the cupertino , calif. - based sia said average monthly orders totaled billion for the three - month period ended jan. , off from billion in the period ended in december . the sia and outside analysts noted that january , which has fewer working days , traditionally lags december's orders . the so - called book - to - bill ratio was , the sia said , which means that for every of product shipped , or booked , chipmakers received of new orders . a ratio of greater than to indicates industry expansion as new orders outpace shipments . a lower ratio generally indicates a contraction . the ratio is based on reports from u.s. , european and japanese manufacturers doing business in the u.s . january shipments were million , off from december's million . the latest month's shipments were up from the year - earlier million . the results are " very much in line with my expectations , " said s.g. warburg & co. analyst eli a. sayegh . mr. sayegh said he expects a moderate slowdown in the industry in coming months , but noted january's book - to - bill ratio gives no evidence one is yet under way . jack beedle , head of scottsdale , ariz. - based in - stat inc. , which monitors the semiconductor and computer industries , also found the industry barometer's january reading " pretty much in line with what we thought it would be , " adding that he expects the industry to record a to sales increase in the first quarter of this year . separately , the american electronics association of nearby santa clara , calif. , released figures showing that sales of domestically made electronics equipment set records for both the fourth quarter and the year on moderate sales increases . the aea said fourth - period sales climbed to billion from billion . the industry group said the fourth - quarter results " reflect continued cautious buying in the computer segments . " the figures don't distinguish between the booming personal computer industry and the troubled mainframe market , however . an official said orders grew only from december to december . by comparison , he noted , orders in november grew from november . the association said its estimates are based on commerce department data that haven't been seasonally adjusted and are subject to revision . the aea said the department's semiconductor figures also include certain items such as printed circuit boards , capacitors and some tubes , but maintained that the data could portend problems for the semiconductor industry . alternatively , he suggested the slowdown in growth could be just an aberration from year - end delays in ordering by manufacturers , and said subsequent months' order growth should be monitored closely . the aea said it expects " continued modest growth for the electronics industry in , " but predicted that if semiconductor orders continue at the december rate reported by the commerce department , recent robust sales " probably will level off in the next few months . " for the year , domestic electronics sales were billion , up . salomon inc. reported a loss of million for the fourth quarter , largely because of the stock market crash . the loss compared with year - earlier profit of million , or cents a share . the deficit was blamed on trading and underwriting reverses , and a charge resulting from salomon's pulling out of a projected new headquarters . salomon also attributed part of the deficit to severance and other costs connected with more than layoffs announced in early october , just before the crash . while the crash - related losses and other special items were expected , some industry observers said salomon's fourth - quarter results also indicated a surprisingly lackluster performance for the rest of the quarter . brenda davis mccoy , an analyst at painewebber inc. , noted that the million pretax loss for the quarter reported by the firm's salomon brothers securities unit indicates that the firm's trading and investment banking operations didn't fare as well as some of its major competitors in november and december . salomon officials said the firm and its principal unit , salomon brothers , were profitable in november and december , but some conceded that the firm , which has been riddled with turmoil , hadn't performed well . " i'm not as unhappy as i might be , " he said . the big securities firm , which has been the subject of takeover rumors , also adopted a so - called poison pill anti - takeover plan , which gives salomon shareholders the right to buy , under certain conditions , shares of salomon or a surviving company at half price . the anti - takeover measures also seek to force any potential hostile acquirer to pay hundreds of millions of dollars in deferred employee compensation and to pay employee bonuses , salomon officials said . salomon officials said they weren't aware of any current takeover threat . mr. gutfreund called the measures " routine stuff . " however , last fall corporate raider ronald perelman tried to buy a block of salomon shares . salomon officials believed mr. perelman was considering a takeover attempt , although mr. perelman said he was only interested in the stock as an investment . salomon eventually bought the block and promptly sold a similar stake to omaha , neb. , investor warren buffett's berkshire hathaway inc . for the year , salomon's earnings slumped to million , or cents a share , from million , or a share , in . salomon said that in the fourth quarter it had a loss of million before taxes , or about million after - tax , on the underwriting of british petroleum co. shares , which took place just after the october crash . salomon and other underwriters had agreed to pay a set price for the shares before the crash , and the british government refused to halt the share offering because of the crash . salomon officials said the firm also had losses of about million during the crash in risk arbitrage , primarily betting on takeover stocks . after taxes , that loss came to about million . the firm said it sustained a loss of million after taxes when it pulled out of the proposed coliseum project , an office - and - apartment complex that was to be salomon's new headquarters . the company also said it had a million after - tax loss in employee severance and costs related to leaving the municipal bond and money - market sectors . salomon's fourth - quarter results were boosted by an after - tax gain of million from the sale of a unit that gathered mortgages for packaging as securities . the unit's results were flat in the year - earlier quarter . salomon's revenue for the quarter fell to billion from billion a year earlier . annual revenue fell to billion from billion . the number of u.s. businesses that failed in fell slightly from after increasing for eight consecutive years , a dun & bradstreet corp. study found . the study said businesses failed in , down from in . failures had risen in and in . business failures include bankruptcies , foreclosures and court mandated receiverships . the leveling off of failures " underscores the fundamental strength of the u.s. economy , " said joseph w. duncan , corporate economist of dun & bradstreet , a provider of business information services . the mining sector showed the biggest improvement , with failures falling to , largely because many of the weakest companies have already closed their doors , dun & bradstreet said . failures of service industry businesses in rose to , the study found , while failures in the agricultural sector climbed to . the service sector was hurt by increased competition and by efforts of larger companies to cut costs and rely less on smaller providers . before the introduction of this so - called chapter bankrupcty , farmers had to liquidate to meet creditors' demands . many farmers took advantage of the more lenient bankrupcty law in the first half of , dun & bradstreet said . the pacific states , from california north to alaska , showed the biggest dropoff in failures , an decline . the biggest increase in failures was recorded by the south atlantic states , from maryland to florida , where failures climbed . " quilts and coverups , " a national sampling of contemporary quilting , will hang in the louisville art gallery all this month . this is an appropriate time and place to consider such covers . quilts piled high on a straw mattress and old , worn quilts stuffed in the chinks between the logs kept many a kentucky pioneer from freezing to death . a bearskin would have been more efficient and easier to get , but frontier quilts had a significance far beyond utility . they were artistic expressions for women whose lives consisted of exhausting and endless work , lives made from scratch , with no frills . colonial american women had a long heritage of quilting behind them ; for generations their mothers had been quilting bedclothes of appliqued and needlework designs or " crazy quilts " of patchwork . quilting dates back to medieval europe , where quilted undershirts were worn under armor , and beyond that to the middle east and china . it involves sandwiching stuffing between two layers of fabric and then stitching ( " quilting " ) through all three layers to keep the stuffing in place . designed patchwork , however , is strictly an american folk art . as frontier conditions eased , more fabrics became available and frugality gave way to extravagance . what had been strictly functional became decorative. ( women were more careful with their " company " quilts , which accounts for the high quality of most antique quilts . " utility " quilts ended up under a saddle or between the chinks. ) . modern fabric artists , free of the press of necessity , continue and expand the decorative tradition with exuberant mixes of old and innovative . the quilts in this show are " wall warmers , " meant to hang , not to cover a bed , and they are generally smaller than bedcovers . they are lovely . anyone who equates quilting with cutsey - poo ducks and piggies or sets of matched calicos , the sort of thing one can buy in kits , is in for a jolt . the only animals in this show are nancy n. erickson's surreal velvet and satin rabbits and capybaras . but even the silk - screen prints , painted fabrics and glitzy appliques that hang in this show demonstrate a strong relationship with traditional american quilting . the members' expertise is traditional quilts ; they think of themselves as seamstresses , not artists . their high standards focus on color combinations and quilting stitches . they found it easy to believe that the exhibitors are artists first and needle workers second . they did , however , find some superior stitching , especially in " . . . and a prosperous new year , " the most unorthodox quilt in the show . teresa tucker young designed it as part of a series of works representing life in the s . she appliqued figures over large swathes of printed cotton and then quilted the whole thing , using quilting patterns that stress the fabric designs . her picture shows flamboyantly optimistic party goers on the eve of , their dreams for the coming year in cartoon bubbles above their heads , with baby carrying a calendar turned to oct. . and the quilt sports some genuine metal accessories : diaper pins , silver rings and a watch . younger viewers see timely humor in this place , but there is stark irony apparent to older kentucky women . they remember that the hard times of the 's and 's brought a renewal of quilting to kentucky , when families needed warm covers and when art supplies were an unaffordable luxury . nearly all of the quilts in this show include geometric patchwork , either as the allover design or as accent . traditional quilters use dozens of " log cabin " ( vertical pieces of various lengths ) and " postage stamp " ( thumb - size ) patterns . in this show the best example of that tradition is zoe enright's " postage rose , " a large rose design built of tiny calico squares and quilted in a circular , flowerlike design . linda macdonald's magnificent " dusk , " a large patchwork quilt , is a lesson in old and new . she has blended pinks and lavenders with accents of off - white , black and brown in a diagonally symmetrical pattern and then used a fantastic variety of quilting stitch patterns to give the piece depth . it could never be mistaken for a " traditional " quilt , and yet there's a feeling of comfort about it . one of the thursday tea ladies said , " it's beautiful , but it looks like it could be used ; it would keep you warm . " ms. king is a free - lance writer based in henderson , ky . sherwood group inc. said its chairman and two directors resigned as corporate officers . the investment banking concern said ajit hutheesing , years old , will resign as chairman effective feb. , while directors patrick kolenik , and steven kessler , , have left the board . mr. kolenik and mr. kessler remain traders in sherwood's over - the - counter unit , sherwood securities corp . sherwood group said the officials " felt it was time to concentrate on something other than management of existing operations . " dennis marino , , formerly chief administrative officer of sherwood group , was named president and chief executive officer of sherwood securities , succeeding mr. kolenik . mr. kessler's duties as manager of the trading room have been assumed by mr. marino's brother , richard , , chairman of sherwood securities . the company hasn't filled the board vacancies . and dennis marino said sherwood group's board is looking for an " appropriate candidate " to fill the chairmanship . last month murray seitman , , resigned as interim president and chief executive officer and as a director of sherwood group , but he continues as executive vice president and chief financial officer . fredric w. rittereiser , chief operating officer , assumed the duties of president and chief executive following mr. seitman's departure from those posts . shareholders of dome petroleum ltd. won one concession in their challenge of a voting rights plan submitted by amoco canada petroleum ltd. , which has proposed to take over dome . an alberta judge gave dome shareholders the right to a court evaluation of their stock holdings if they object to the terms of the proposed billion takeover bid by the unit of chicago - based amoco corp . the voting rights plan for dome creditors and shareholders was otherwise accepted by the judge . the decision clears the way for the takeover proposal to be voted on . voting dates haven't been set . the voting plan was opposed by a creditor group and by several shareholders , including dome's former chairman , jack gallagher . mr. gallagher , who as chief executive was responsible for a billion acquisition that brought dome close to bankruptcy , unsuccessfully fought for the right to convert dome stock into amoco canada stock . the right to a court evaluation of stock holdings was requested by a lawyer representing former dome director john loeb , who holds about of dome's million common shares . the lawyer , darryl raymaker , suggested that dome stock may be worth more than amoco canada is offering . although the value of the payment by amoco canada could vary according to the evaluation , the court ruled that dissenting shareholders would still have to be paid in debentures similar to those paid to consenting stockholders . as previously reported , the amoco canada takeover proposal involves a payment of about million in debentures to dome shareholders . the debentures , which may be exchanged for amoco common stock , are valued by amoco canada at a share for million common shares and a share for million preferred shares . in american stock exchange composite trading friday , dome shares closed at cents , unchanged . the balance of the billion transaction involves payments to dome's creditors , most of whom will receive less than they are owed . the only creditor to oppose the voting procedure was a holder of about million of dome's million of eurodollar debt . the holder's lawyer argued unsuccessfully for a division of the eurodollar debt into two voting groups based on separate trust indentures . as previously reported , dome owes about billion to secured creditors and has obtained agreements from them for repayments by amoco canada involving to of principal amount outstanding . dome owes about billion to about institutional unsecured creditors to whom amoco has offered to repay cents on the dollar , half in cash and half in notes . attorneys representing texaco inc. shareholders who have filed derivative lawsuits against directors and advisers of the oil company say they intend to continue opposing the company's reorganization plan even if it is approved by a shareholder vote . the statements were made following a bankruptcy court hearing friday at which judge howard schwartzberg approved a disclosure statement that will allow texaco shareholders to vote on the proposed reorganization . just before the hearing , texaco , as expected , reported stunning losses for the fourth quarter and the year . the attorneys' protests focus on provisions included in the reorganization plan that indemnify and release from the threat of litigation numerous officials and advisers who were involved in texaco's acquisition of getty oil co. in . the attorneys say the releases are a massive corporate giveaway . " it's almost like giving away an oil field worth hundreds of millions of dollars , " said melvin weiss , a new york lawyer representing two longtime texaco holders . texaco filed for protection from creditors under the u.s. bankruptcy code to forestall enforcement of a huge judgment against it . texaco and pennzoil settled their multibillion dollar legal brawl for billion in december . as expected , texaco reported huge losses for the fourth quarter and the year , resulting from billion in charges and write - downs taken in last year's final quarter . the charges were related to texaco's settlement with pennzoil and its restructuring efforts . the oil company said it had a hefty fourth - quarter loss of billion on revenue of billion . for the year - earlier period , texaco earned million , or cents a share , on revenue of billion . for the year , texaco had a loss of billion on revenue of billion . in , texaco earned million , or a share , on revenue of billion . close scrutiny of texaco's financial tables show that without the extraordinary charges related to its legal battle with pennzoil , the oil giant would have had fourth - quarter operating earnings of million . and for the year , texaco would have reported income from operations of million . the disclosure statement approved by judge schwartzberg will be included , along with a ballot , in a packet of information that should be in the mail to texaco's shareholders by the end of the week . shareholders will have until march to vote . if the two - thirds vote necessary to confirm the plan isn't achieved , then " it's back to square one " with the settlement between texaco and pennzoil likely scuttled , said judge schwartzberg , who does , however , reserve the right to confirm the plan over shareholder dissent . but if the reorganization plan wins shareholder approval , a confirmation hearing will be held march . at that hearing , attorneys representing derivative suits , which would be canceled by the indemnities and releases included in the reorganization plan , will try to convince the judge to oppose the plan . judge schwartzberg said in court friday that he expects the hearing to be " heated " and drag on for several days . in a court filing friday , mr. weiss , the attorney for two shareholders , said he would challenge texaco on whether it had investigated the value of the derivative claims , and whether the decision to abandon the claims was made by self - interested texaco officers and directors . mr. weiss and other attorneys representing derivative suits were allowed to include in texaco's disclosure document an independent statement that says , in part , " . . . where a corporation is damaged and it is proven that the damage resulted from the actions of its officers , directors or third parties , . . . those parties may be held fully accountable to the corporation . " these attorneys argue that the releases are worth at least billion , the amount of damages texaco paid pennzoil . texaco considers the indemnities vital in resolving its litigaton with pennzoil , said a source close to the oil company . unless everyone connected with getty oil -- as well as pennzoil , and texaco's own directors -- are freed from the threat of litigation , then an avalanche of lawsuits is bound to sweep through the courts in the aftermath of the settlement , according to lawyers for several parties in the case . thomas petzinger jr. in houston contributed to this article . ncr corp. , ballyhooing the increased flexibility of its popular tower computer system , broadened the line for high - end and low - end users with four new models . analysts said offering consumers additional options was a sound decision in the multiuser computer market , which is becoming growingly competitive . multiusers , as distinct from personal computers , are designed so that several work stations can plug into a single central - processing unit . with the addition of the new models -- one the least powerful tower ever offered and one the most powerful -- the system can support from four to users . there are now nine tower models in all . " we've really broadened the family , " said john gray , director of marketing for the product . " we've given more choices . " mr. gray said the same software system -- namely the unix network , developed by american telephone & telegraph co. -- can be used on each tower model . in turn , that makes individual computer programs , be they as simple as a spreadsheets or as complex as controlling factory equipment , compatible with every part of the tower line . moreover , mr. gray said , towers are so - called " open - architecture " computers , meaning they are easily adaptable to equipment made by other companies . but , with the introduction of the four ncr models , none seem quite as extensive . " this line is a bit fuller , " said wendy abramowitz , an analyst with argus research corp. , in new york . the tower / is ncr's new entry - level model and is designed for four users or fewer . it can be linked to personal computers and a printer . the / is scheduled to be available in april , with a suggested list price of . the / , now the most powerful on the tower supermicrocomputer line , can serve as many as users . suggested list price is . dayton , ohio - based ncr said it will start shipments in the third quarter . two other models -- the / and the / -- have list prices of and , respectively . volume deliveries of both systems will begin in june , the company said . analysts said the prices were competitive , especially for the customer base ncr traditionally has gone after , including banks and large retailers . " ncr is just poking away at the business in which it lives , " said william p. o'connor jr. , an analyst with new york - based fourteen research corp . in new york stock exchange composite trading yesterday , ncr closed at a share , down . philip morris cos. reported a gain in net income for the fourth quarter , reflecting strength in cigarette , food and brewing operations . net rose to million , or a share , from million , or a share . the tobacco and food concern said revenue increased to billion from billion . in new york stock exchange composite trading yesterday , philip morris's stock closed at , down . the company disclosed scant information about performance by major business lines during the fourth quarter , but did provide some information about full - year results . tobacco posted the most buoyant performance for the year , with domestic operating profit up and international tobacco operating profit ahead of . general foods corp. , the diversified food products and coffee unit , had higher unit volume and a revenue increase for the year . but a previously reported million restructuring charge for the third period dropped general foods' operating profit almost below the year earlier . miller brewing co.'s operating profit increased on a revenue gain . for the full year , philip morris's net advanced to billion , or a share , from billion , or a share . revenue increased to billion compared with billion the year before . capital expenditures totaled million , up about from million the year earlier . the dividend yield on manufacturers hanover corp. shares is high enough -- for now -- to put any cash cow to shame . with a - a - share annual payout , manufacturers is yielding more than , based on yesterday's close of . that whopping yield appears safe at least through the middle of the year , in light of statements by manufacturers management and the general economic outlook . but over the longer term , it's likely that manufacturers will need to cut at least some of its dividend to shore up its capital base , especially if problems with loans to developing countries worsen , some analysts say . a dividend elimination or cut by a bank has plenty of precedent -- bankamerica corp. eliminated its payout and mellon bank corp. cut its dividend in recent years . manufacturers hasn't sought to boost its yield . in fact , in december , the board chose to forgo its perennial dividend increase . instead , the high yield reflects the fall in manufacturers stock from its pre - october crash price of / . at manufacturers , that would mean a near - wipeout of its billion of common equity . with non - trade loan exposure to developing countries of billion , manufacturers would have to add about billion on an after - tax basis to reserves , to match the level set by many regional banks . to be sure , other bank stocks are paying far more than the average dividend yield of standard & poor's stock index . chemical new york's dividend is yielding about and chase manhattan's payout brings investors . but manufacturers faces greater pressure on its dividend , analysts say . james j. mcdermott jr. , research director at keefe , bruyette & woods inc. , says of manufacturers , " clearly , the market price suggests the dividend ( on the common stock ) is vulnerable . how much would eliminating it produce ? by my calculations , that would save about million a year . but , this bank's capital needs are in the billions , not millions . any dividend elimination would have to be part of a larger plan to replenish capital . " peter j. tobin , senior vice president and chief financial officer of manufacturers , plays down the brouhaha over the bank's dividend , and says the third world debt situation is being played out of proportion . nobody -- neither the regulators nor any others -- has spoken to us about reducing the dividend . " analysts say manufacturers is paying its dividend from net income , rather than with borrowed funds or cash from asset sales . this is in accord with the federal reserve bank of new york's guidelines . mr. tobin says investors " are taking an inordinate focus on the lesser - developed - country loan situation and what it means for this company . that's what's at the heart of this . we continue to feel that our plans are on track . if the situation changed and our plans were not realizable , we would consider whatever steps necessary to deal with it . but we fully expect to achieve our plans to rebuild equity to ( of assets , from ) by year's end . " analysts agree that the dividend is safe for now . george salem of prudential - bache says , " i think the odds favor ( manufacturers' ) maintaining the dividend , barring some new bad news on the lesser - developed - country loan front . " manufacturers raised about million in new equity in a september stock issue . one of the bank's selling points to investors was its attractive dividend yield . barring any major setback , cutting the dividend now not only would break faith with investors but could expose management to shareholder lawsuits . analysts also reason that a cut would be counterproductive at this time . it would draw unwelcome attention to the bank , and it could cause the stock to fall more . manufacturers " will pay for the near term at least , " said one analyst . but longer term , some analysts say privately , manufacturers will need to reduce or eliminate its dividend to build capital . the next quarterly payment is due to be declared in march . dividends are taking a huge chunk out of operating earnings . by analysts' estimates , the bank's operating earnings for , excluding tax benefits , asset sales and interest payments from brazil , will be about million . dividends on common and preferred total million . even analysts who talk of the dividend's near - term safety aren't recommending manufacturers for its yield . says robert albertson of goldman , sachs : " i'm concentrating for yield on chase . there the dividend is even more certain . " mark kelman's " a guide to critical legal studies " ( harvard , pages , ) is a comprehensive and vigorously written survey and synthesis of critical legal studies by a partisan of the movement who teaches at the stanford law school . although i take umbrage at being falsely accused by the author of sins ranging from " unconscionable red - baiting " to " the denial of contradiction in discourse , here through recourse to false vacuum boundaries , " my overall impression is of a book of genuine scholarship , though one marred by stridency and turgidity , as well as by exaggeration and a patronizing tone . despite serious flaws it is probably the best book to have emerged from the cls movement , a movement that has a growing following in american law schools . mr. kelman mounts an all - out attack on efforts both old and new to depict law as a reasonably objective , reasonably disinterested , reasonably nonpartisan , reasonably civilized method for resolving conflicts and securing liberty , efficiency and other widely shared values . all these efforts , he argues , have been wretched failures . by presenting these dichotomies as natural , law makes " counterhegemonic thoughts . . . harder to think . " the charge has a kernel of truth . there is a fair amount of mystification in legal discourse , especially at the judicial and professorial levels . the pooh - bahs of the legal profession exaggerate the neutrality of legal doctrines and institutions ; understate the law's political and contingent nature ; inflate the competence and disinterest of judges , jurors , legislators and other legal actors ; and make unfounded claims for the cogency of legal reasoning . mr. kelman's book is a massive antidote to inflated bicentennial rhetoric about the rule of law , and that is all to the good . but he goes way overboard . he is too quick to find contradiction , too dismissive of efforts to reconcile apparent conflicts , too contemptuous of practical reason . although he considers mainstream legal thought little better than a snow job , his book invites characterization in similar terms ( showing that people are most sensitive to their own faults found in other people ) . his method is to depict mainstream thinkers not as people with whom one might disagree but as people who cannot think -- who make arguments that are " truly bizarre , " " ludicrously general , " " hopelessly confused , " " clearly sloppy and inapt , " " obviously naive , " " transparent failures . " denunciation so scathing that it carries the reader along against his or her better judgment enables mr. kelman to shift inquiry almost imperceptibly from whether mainstream legal thought is really so incoherent as he thinks to how anyone could be fooled by such rubbish ; the answer is ideology , from which he himself happily is free . he thinks marital rape may well be a more serious crime than rape by a stranger ; even that making rape a crime may have been a device for fooling women into thinking they have rights . he thinks the decision in roe vs . wade may have been intended to give men freer access to women by reducing the consequences of an accidental pregnancy . common sense is not mr. kelman's strong suit . mr. kelman scores many of his points simply by demanding of his opponents a degree of rigor that is unattainable when analyzing social phenomena , such as law ; he plays to the hilt the mainstream lawyer's game of defeating an opponent by shifting the standard of proof . mr. kelman believes that if he can demolish ( or as he likes to say , " trash " ) the intellectual foundations of western liberalism as they are revealed in the writings of mainstream jurists , something better will rise from the ashes , but he makes no effort to justify that faith , instead ending the book with this wistful sentence : " the critics try to retrace , hoping to see where we first got lost . " mr. posner is a judge on the u.s. court of appeals for the seventh circuit . kaisertech ltd. management is negotiating with tax fugitive marc rich and corporate raider charles hurwitz for the estimated million to million it needs to buy chairman alan clore's stake in the company , according to people familiar with the negotiations . if such a transaction goes through , it would spell the end of mr. clore's turbulent reign at kaisertech , which began last spring when the oakland , calif. - based parent of kaiser aluminum & chemical corp. ceded him control of its board in return for a million cash infusion . such a development could also ward off a fight that may be brewing over whether kaisertech would permit mr. clore , who is understood to be shopping his minority stake around with little success , to transfer control of the board to another buyer . neither mr. clore , who usually resides in geneva , nor his attorney in new york , could be reached for comment . details about the talks remain sketchy , and kaisertech officials declined to comment . the talks with mr. rich involve favorable " tolling agreements , " under which a company that the commodities trader controls would have its alumina turned into finished aluminum by kaisertech , according to the people familiar with the talks . aluminum prices have seen a recent resurgence in commodities markets world - wide as industry overcapacity eases . one source said , however , that the talks with mr. rich may have stalled . mr. rich , who lives in zug , switzerland , and can't return to this country because of indictments relating to tax liabilities totaling tens of millions of dollars , couldn't be reached for comment . another prospective lender is maxxam group inc. , which is controlled by mr. hurwitz , the people said . the houston investor couldn't immediately be reached . a third possible source was identified as a " major bank in boston , " one person close to the company said . as previously reported , mr. clore put all or a portion of his voting stake in kaisertech on the block shortly after the oct. market crash . the market's tumble put him in default on bank loans he had secured for the kaisertech cash infusion . he'd used his kaisertech shares , which fell more than in value during october , as collateral for the loans . under these pacts , the lenders agreed not to sell additional shares or commence litigation against mr. clore until at least feb. . assuming conversion of certain voting preferred stock , the investor currently holds about million kaisertech shares . the shares closed at apiece , down cents , in composite trading on the new york stock exchange , giving mr. clore's stake an indicated value of about million . mr. clore is understood to be trying to sell the shares as a controlling block ; shares sold on that basis would fetch a premium to the market price . but " nobody's rushing in to buy mr. clore's shares , " said a person familiar with the company's operations . he added that it was his understanding the investor's position " is relatively safe , as long as that stock stays about . if it falls to , his position could become very precarious with the lenders , " despite the standstill agreements . it's not clear whether jefferies & co. , the los angeles securities firm , will sell its about million kaisertech shares to the company's management , if the clore transaction goes forward . the investor has agreed to ask any buyer of his stake to also purchase the holdings of the jefferies group inc. unit at the same price . officials at jefferies weren't immediately available for comment . campeau corp. launched an unfriendly - a - share , or billion , offer for federated department stores inc. , but analysts expected the bidding to escalate for the often - rumored takeover target . federated , one of the nation's largest retailers with more than stores , urged its shareholders to resist the offer until its board meets late this week or next . privately , federated sources denounced the offer as too low . in new york stock exchange composite trading yesterday , federated shares closed at , up , on volume of more than million shares , signaling that wall street also expects campeau's offer to rise , or to spark other higher offers . " the market definitely is saying federated is worth more , " said william n. smith of smith barney , harris upham who , like other analysts , estimates that the cincinnati - based retailer could command to a share . based on those estimates , the market value for federated's million shares outstanding would be billion to billion . campeau , a toronto - based real estate developer that entered retailing in december by acquiring allied stores corp. , said its offer is conditioned on obtaining sufficient financing and approval by federated's - member board . federated is one of a number of companies -- retail chains , railroads , hotels and utilities -- that are rich in real - estate assets and undervalued . investment bankers say such companies are inviting takeover targets . " it's very hot now because the junk bond market is in disarray , " said william bahrenburg , president of morgan stanley realty inc " real estate assets become a form of currency to finance the whole thing . " another investment banker , who is involved in the federated situation , said " there will be other " targets with real estate assets . " the merger market is coming back , " the banker said . " if you can't get junk bonds you've got to look elsewhere . it's easier to finance m&a if the target has a lot of real estate . " one reason is that real estate assets frequently are undervalued by stock traders -- and have become even cheaper following the stock market crash . federated , which wasn't caught off guard by campeau's bid , is expected to fiercely resist a takeover . in recent weeks , the retailer's wall street advisers have scrambled to devise a strategy for fighting rumored takeovers , by real estate magnate donald trump or by coniston partners , a new york investment firm . among the options under consideration : the spinoff of several non - department store units and real estate holdings , or a management - led leveraged buy - out . last week , federated also beefed up its anti - takeover measures . an amended shareholder rights plan will permit holders of rights to buy federated stock at a discount should anyone acquire of the company's shares and a majority of federated's outside directors agree that such ownership isn't in the company's best interests . yesterday , campeau filed suit in federal court in new york challenging that " poison pill . " federated's defense is being handled by shearson lehman brothers inc. and the new york law firm of skadden , arps , slate , meagher & flom . sources say the big retailer , whose department store chains include bloomingdale's , bullock's and i. magnin , is likely to focus on what it perceives are campeau's weaknesses , such as antitrust considerations . the company might argue , for example , that a federated - allied stores combination couldn't get federal antitrust clearance . federated almost certainly will attack campeau's financing as improbable . in that acquisition , campeau sold off of allied's retail divisions . campeau said it might seek to sell such federated divisions as gold circle , a discount retailer ; the children's place specialty chain ; mainstreet , a chicago - based unit , and ralphs , a supermarket chain . these divisions are among federated's weakest operations and , it's understood , federated itself has considered selling some of them . analysts predicted campeau would place many more federated stores on the block . " the only way campeau will get value out of federated is to sell off a number of the chains , " said ira gluskin , of gluskin , sheff & associates , inc . in addition , campeau said it is considering selling an interest in campeau or allied to one or more companies . in london , marks & spencer plc disclosed that it may expand into the u.s. retail market through " some form of cooperation with the campeau organization . " despite campeau's financing difficulties , federated remains a vulnerable target . while its stores are among the best - known in the u.s. and in coveted locations , it has underperformed in recent years in both sales and earnings . restructuring at several units has proven costlier than expected and " they haven't streamlined or centralized operations the way they need to , " said mr. smith of smith barney . for fiscal , ended jan. , federated had net income of million , or a share , on sales of billion . federated inadvertently hurried the campeau bid , wall street sources said . the canadian concern and its principal wall street adviser , bruce wasserstein of first boston corp. , moved up a planned bid to pre - empt any move on the company by mr. trump . earlier this month , federated disclosed that mr. trump was seeking government clearance to acquire at least million of federated . sources close to mr. trump said the developer has purchased a block of federated at an average price of a share . mr. trump declined to say how much federated stock he owns . chemical bank is considering the sale of its british mortgage unit , in a further retrenchment in the united kingdom . david cameron - moore , managing director of chemical's u.k. mortgage - finance unit , confirmed a report in london's times newspaper by saying the big u.s. bank will decide the unit's fate in the next few weeks . chemical , a unit of chemical new york corp. , began selling mortgages in britain in and currently has # billion ( billion ) in residential mortgage assets here . a final decision hasn't been made , but chemical appears to be leaning toward a sale , mr. cameron - moore indicated . although the mortgage business remains healthy , he added , chemical doesn't consider non - u.s. mortgages as a " strategic " business in the future . " the main reason for the divestiture , " he said , would be " that the home - loan business is not part of the strategic intent to build a financial - services business in the u.k . " mr. cameron - moore said chemical hasn't received any direct approaches from possible buyers . the unit employs people and has roughly of its mortgage assets in london and southeast england . the announcement is the latest sign of chemical's retrenchment in britain . separately , chemical bank said it sold its chicago - based merchant processing business to electro data corp. , denver , as part of a companywide streamlining effort . terms weren't disclosed . chemical said in november that it was interested in selling the merchant processing business , which processes credit - card charges for business owners . electro data is a provider of merchant services . the supreme court refused to hear lt. col. oliver north's challenge to the legality of independent counsel lawrence walsh's investigation of the iran - contra scandal . the high court left intact a federal appeals court ruling that mr. walsh is operating with proper legal authority conferred on him last march by attorney general edwin meese . a spokesman for mr. walsh , who is still presenting evidence to a federal grand jury , said , " any question as to the authority of this office has now been laid to rest by the courts . " the high court's action , however , doesn't resolve some questions raised about the validity of other independent counsel investigations . col. north , a former reagan administration national security aide , is among the targets of the grand jury investigation . mr. walsh was appointed in december by a special three - judge federal appeals court in washington . the special court has the authority under federal ethics law to appoint independent counsels , at the request of the attorney general , to investigate alleged misconduct by senior executive branch officials . in february , lawyers for col. north filed a lawsuit challenging the constitutionality of investigations by independent counsels . because constitutional questions threatened to impede the iran - contra inquiry , attorney general meese offered , and mr. walsh accepted , a " parallel " appointment as a special justice department prosecutor to investigate the iran - contra affair . last august , a federal appeals court in washington upheld the legality of the parallel appointment and said it didn't need to rule on the constitutionality of the court appointment . another challenge to the constitutionality of court - appointed independent counsels is pending in the federal appeals court here , but a ruling in that case probably wouldn't interfere with mr. walsh's investigation . in that case , former assistant attorney general theodore olson has questioned the authority of independent counsel alexia morrison , who is investigating whether mr. olson misled congress in testimony involving the environmental protection agency . ms. morrison didn't accept a parallel appointment from mr. meese . the justice department filed a friend - of - the - court brief in the olson case arguing that court - appointed independent counsels are unconstitutional . a federal appeals court in denver ruled last september that the ban on paying solicitors violates the freedoms of speech and association of groups campaigning for ballot initiatives . the ban was challenged by a colorado group that tried , unsuccessfully , to place a proposal for deregulation of the state trucking industry on the ballot . the high court refused to hear an appeal by the los angeles times , published by times mirror co. , and other newspaper publishers that challenged a los angeles business tax . the publishers argued that the tax discriminates against the news media , but a california state appeals court upheld it . the lawsuit was filed after los angeles officials amended the city's tax code to withdraw , as of jan. , , an exemption from the business tax that had applied to newspaper publishing and television and radio broadcasting . in particular , the publishers objected to taxation of the movie industry based on production costs , rather than gross receipts , and with a maximum tax . los angeles officials defended the tax and said it didn't discriminate against the media . the high court let stand the conviction for perjury of u.s. district court judge walter nixon of mississippi . while his appeals were pending , judge nixon wasn't required to begin serving his five - year prison sentence . judge nixon , who has remained a judge but on inactive status during his appeals , was convicted for lying to a grand jury about discussing with a local prosecutor narcotics charges against the son of a business associate of judge nixon's . toronto - based manufacturers life insurance co. said it holds a stake in carteret bancorp.'s common shares outstanding . in a securities and exchange commission filing , manufacturers life said it holds common shares of the wilmington , del. - based thrift , including purchased nov. to jan. for to each . manufacturers life said it acquired the carteret stock " with a view to realizing a profit potentially available " because carteret's stock is currently trading below a share , the price that home group inc. , an insurance holding company , agreed to in an aug. acquisition proposal . according to the filing , that acquisition is still pending . friday in new york stock exchange composite trading carteret closed at , up cents . manufacturers life acquired the carteret stock for investment purposes , the filing said , and may buy as much as , depending on market conditions and other factors . the concern said it might even " consider the advisability of seeking control of carteret , " although it expects that it will not decide to do so as long as home group's agreement is in effect . but home group's million takeover agreement has hit snags . the thrift sued to force completion of the acquisition at the pre - crash price , but the legal effort failed . a spokesman for new york - based home group said early last week that the company still is interested in acquiring carteret but declined to comment on any possible price . the program - trading limits set last week by the new york stock exchange are designed to ease market volatility , but traders and analysts are taking a wait - and - see attitude . while they wait , volatility and program trading are continuing to create rifts between the larger wall street firms , which regularly execute the programs , and the smaller houses , which find themselves scrambling to keep pace with market changes . feuding has erupted even inside some wall street houses , with equity traders and futures traders debating the causes of and solutions to the market's violent swings . the stock market's volatility in the past three months has caused a number of changes in the way traders and investors operate . on block - trading desks , which frequently commit the firm's capital to complete trades , traders have become unusually cautious , and in some cases less accommodating in prices they will pay , says dudley d. eppel , who runs the block desk at donaldson , lufkin & jenrette in new york . jack p. baker , head of equity trading at shearson lehman brothers inc. , new york , says large institutional customers also are changing their ways . now they buy shares at the opening and say they'll decide at o'clock when to buy the rest . " program trading is taking the brunt of the blame for the volatility . " there's no alternative other than to eliminate the program trading or learn to live with the effects of it , " contends eugene peroni , director of technical research at janney montgomery scott inc. in philadelphia . " i don't think we can learn to live with it . it's the tail wagging the dog . " donaldson's mr. eppel agrees . " if we had any guts we'd get rid of the programs because the market's lost its integrity . people have said , 'to hell with it . i'm not going to play with that machine , ' " he says . " everyone is going to have to realize where we're at . our market's a mess . " but that view is disputed at the other side of the firm's trading area . " no one was complaining at all when program trading was creating extra wealth . . . during the rising stages of the bull market , " argues william marcus , a vice president in donaldson's futures - trading department . marshall acuff , portfolio strategist at smith barney , harris upham & co. , new york , adds that while curbing program trading may ease some volatility , " you're going to continue to have volatility as long as there's uncertainty about imbalances in the economy , such as the budget deficit and the trade deficit . " the big board , under pressure from member firms , announced thursday that it would limit program traders' use of its high - speed order execution system after a daily move of points in the dow jones industrial average . the action is , for now at least , a short - term experiment that will end friday . traders say the rule already has had some impact on the market . mr. baker says that on friday morning , the moves in futures indicated that the industrial average would have gained to points . " so they restrained themselves . some guys did back away , " he contends , and the industrials rose only about points in the first half - hour of stock trading . mr. baker says that the program - trading limit is a good idea temporarily , but that it wouldn't make sense for the longer term . " you mean to tell me they won't come up with a new product ? there's a lot of smart people out there . " for now , however , several wall street players have their own solutions . mr. peroni , for example , is advising clients to steer clear of stocks that could be directly affected by program trading . " we're trying to stay away from the basket stocks , " he says . " the stocks we're recommending may get rocked from time to time by these moves but they won't get derailed . " peter canelo , market strategist at bear , stearns & co. , new york , criticizes the new york exchange's move , arguing that limits should be placed on futures rather than stocks . he notes that in the bond market , futures are limited and bonds aren't . " if there's too much hedging the futures shut down , " he explains . " what happened oct. and what happened ( jan. , when the industrials fell points ) could never have occurred in the bond market . " moody's investors service inc. downgraded various credit ratings of shearson lehman brothers holdings inc. , while upgrading those of e.f. hutton group inc. , affecting a total of more than billion of long - term debt of the two securities concerns . separately , shearson said its - a - share offer for hutton was oversubscribed , drawing about million shares . the senior eurodebt of shearson and the subordinated debt of its major unit , shearson lehman brothers inc. , were lowered to single - a - from single - a - by moody's . prime - ratings for commercial paper were reaffirmed for both entities . acquiring hutton's " attractive retail - brokerage and asset - management businesses will strengthen shearson's competitive position , " moody's said . but " shearson's aggressive use of subordinated debt . . . should put ongoing pressures on debt holder protection . " the ratings concern upgraded hutton's senior long - term debt to single - a - from baa - , and raised its rating for commercial paper to prime - from prime - . under shearson's tender offer to acquire hutton , shearson said it will acquire for cash a maximum of million , or , of hutton's shares outstanding . the rest will be swapped for eight - year senior subordinated notes paying annual interest . the transaction is valued at million . shearson , a unit of american express co. , new york , said it still expects to close the acquisition of hutton in the first quarter . in new york stock exchange composite trading yesterday , hutton shares closed at , down cents , and shearson shares closed at , up cents . program trading took stock prices on a bumpy downhill ride as investors grew increasingly nervous about the nation's trade - balance report due out friday . the dow jones industrial average ended the day down at after falling more than points at midday . declining issues outnumbered advancing issues - . volume was million shares , up from million shares monday . the volatility that programs contributed to the day's trading obviously bore down on traders whose nerves already were frayed by last friday's - point decline . " programs are whipping us around like there's no tomorrow , " said james andrews , head of institutional trading at janney montgomery scott in philadelphia . " that to individuals running those major programs are able to control the market like this is crazy . " but mr. andrews said that underneath the effects of the program trading , much of which apparently was related to the expiration this coming friday of some option and futures contracts , the market appeared to be resilient . " the programs beat it down and then it comes back again . i can't believe we're in deep trouble here . " but other analysts weren't so confident . " a lot of sizable - portfolio managers are afraid to do anything , " he said . " this is a real structural problem that the market has to contend with and the sooner we regulate it , the better off we'll be . " but he also said that the fact that technology stocks were among the heaviest losers yesterday " is kind of demoralizing for a lot of portfolio managers who thought this sector would be among the most dynamic . " he also said that there are rumors that the november trade deficit , when it is reported friday , would be a record billion to billion . " that would be a horrendous figure , " he said . alfred goldman , a technical analyst at a.g. edwards in st. louis , said yesterday's moderate decline would have been worse if so many players hadn't been on the sidelines . " if there had been more bids , there would have been greater volume and prices would have been lower , " he said . further , he said some of the cyclical stocks that had been widely expected to lead the market apparently have stalled . " there's been a definite deterioration in sentiment , " he said . " i would approach the market very defensively and be underweighted in stocks . " digital equipment was at the forefront of yesterday's fall . it slumped / to / after morgan stanley lowered its earnings estimate for the company and kidder peabody downgraded its investment rating of digital . texas instruments also was among the heaviest losers , dropping / to / . international business machines fell / to / ; compaq computer fell to / ; motorola was off / to / ; unisys slipped / to / and hewlett - packard was down / to / . pharmaceutical issues also were down sharply . squibb dropped to / ; merck was down / to / ; pfizer lost / to / ; american home products slipped to ; upjohn was off / to / , and eli lilly fell / to / . oil stocks were mostly down on predictions that oil prices would fall further . royal dutch petroleum lost / to ; sun was off to / ; amoco fell / to / ; chevron dropped / to ; mobil was off / to / , and phillips petroleum was down / to / . exxon gained / to / . most blue chips were down . eastman kodak fell to / ; international paper was off / to / ; philip morris dropped / to / ; westinghouse was down / to ; general electric declined / to ; alcoa was off / to / , and minnesota mining & manufacturing was off / to / . general motors was unchanged at / while boeing gained to / ; goodyear advanced / to / , and allied - signal rose / to . procter & gamble also rose , closing at / , up / . but usx fell / to / ; sears roebuck declined / to / , and at&t fell / to / . singer corp. gained / to / . the board is to meet today to consider a merger agreement between the company and singer acquisition co. , a subsidiary of bilzerian partners limited partnership . at the same time ssmc , a former singer unit , rose sharply for the second consecutive day . the stock gained to / after a company official confirmed that ssmc was considering a possible leveraged buyout or other move in light of the bilzerian merger proposal to singer . singer retains a interest in ssmc and holds preferred stock that can be converted into an additional of the company's common . arco chemical gained / to after morgan stanley chemical analyst paul leming issued a strong buy recommendation . he said it and other newly public chemical companies , such as georgia gulf and vista chemical , are among the best buys in the industry . georgia gulf was down / to / and vista chemical was off / to . united technologies lost / to . sterling drug fell / to / . f. hoffmann - la roche said it will fight sterling's lawsuit charging the swiss chemical giant with violating u.s. disclosure and insider - trading laws in connection with its billion hostile tender offer for sterling . bethlehem steel gained to after it announced it would raise most steel prices a ton . the dollar slumped against most other major currencies , with its largest losses coming against the japanese yen in trading influenced by an expected drop in oil prices . expectations that the u.s. will report another large merchandise trade deficit friday , when it releases data for november , helped keep the dollar under pressure yesterday . but the u.s. currency remained well above the record lows it reached around the end of , before major central banks acted to prop it up through concerted market intervention . traders said the bank of japan bought small amounts of dollars as the currency fell in tokyo trading yesterday . the u.s. federal reserve was rumored to have intervened to support the dollar in new york dealing , traders said . " whether they actually intervened or not is immaterial because their message to the market ( that the major governments don't want to see the dollar go lower ) is very clear , " james t. mcgroarty , vice president , foreign exchange , at discount corp. of new york , said . an article in yesterday's wall street journal , quoting industry officials , said saudi arabia expects oil prices to fall to a barrel , about below current levels , possibly by the end of this month . the prospect of cheaper oil benefited the japanese yen the most because japan is almost totally dependent on imports for its oil . the dollar was quoted at yen in late new york trading , down from late monday . the u.s. currency's drop against the west german mark was less sharp , as it fell to marks from . in early trading in tokyo wednesday , the dollar continued to decline . at midday , the dollar was quoted at yen , down from yen at the opening . weak oil prices traditionally create downward pressure on the dollar for several reasons . lower oil prices reduce the global demand for dollars because oil generally is priced in dollars . they also hurt the u.s. oil industry , as well as the u.s. banking system , which has large energyrelated loan portfolios . " people look on the yen as a ' reverse petrocurrency , ' " charles a. spence , vice president , foreign exchange , at first interstate bank of california , los angeles , said . the mark fell against the japanese currency to yen from . the british pound , which is usually harmed by oil - price declines because of britain's exports of north sea crude oil , slumped to yen from . the dollar also was pressured by rumors that friday's u.s. trade report will show that the deficit widened in november from october's record billion . forecasts by market economists , however , remained around billion . some traders say the dollar is headed for a sharp drop if the deficit exceeds these forecasts . they argue that recent central bank intervention has lifted the dollar to levels not justified by economic factors . " we've seen an unusually strong dollar which has been the result of contrived intervention , " discount corp.'s mr. mcgroarty said . " if the trade number is worse than expected , the market will attack the central banks and attack them aggressively . " on the commodity exchange in new york , gold for current delivery fell an ounce to in moderate trading . estimated volume was million ounces . gold was quoted at an ounce in early trading wednesday in hong kong . as we enter the new year of the questions facing our economy and society seem more serious and pressing than at any time in recent years . was the market crash of october an aberration or a portent of greater crisis to come ? will the embattled dollar continue to slide ? will americans be lured by the easy promises of protectionism ? will america , and the world , avoid a serious recession in ? the uncertainties are many , but there is also much promise -- industries such as autos becoming more globally competitive , geographic regions such as new england rebounding from past recession , consumers demanding higher - quality service in everything from banking to air travel , small - business people making bold investments in america's future . then too , is the year we will choose new leadership for a new decade . election campaigns are full of drama and distractions , but as this election year unfolds the candidates will be addressing issues that affect us all -- in economic policy and foreign policy ; on tax rates and trade barriers ; arms - control agreements and persian gulf commitments . with so much going on this year , the journal will be challenged as never before by your needs and expectations as readers . it's our job to make events and facts useful and relevant to you -- not just in your corporate or professional lives , but also as individual investors , consumers and concerned citizens . we welcome these challenges and will do our very best to meet them . we will seek to maintain and strengthen the journal's commitment to fairness , accuracy and honesty . we are pleased when the journal is named , as it was in a times - mirror poll , as the most trusted national news medium . and we are proud when dow jones , publisher of the journal , is named , as it was this month in a fortune magazine survey , as america's most admired publishing company and third most admired company of any sort . above all , though , we are pleased and proud to have your trust and we are dedicated to earning it every business day . we also intend to make the journal even more useful to you . so we work to separate the most essential , relevant and timely news from the humdrum , the ho - hum and the stale . we aim to organize , display and present it to you in even more effective and convenient ways . and , of course , we work to give you the earliest possible delivery of the latest possible news . we are committed to further improvements in all these areas in . the journal never can be all things to all readers . it doesn't try to be . we are not planning sports sections or local news coverage , colored weather maps or stories on every minor crisis in the world . we do intend to remain america's national business daily and , with our expanding asian and european editions , the global business daily as well . that means focusing firmly on news that busy business people truly need . we hope you will approve of improvements we're planning in the months ahead -- in coverage of global markets , marketing , technology , service industries and other subjects . yet , we also hope you will continue to tell us -- through surveys we initiate and the letters you send -- when you think we're doing things wrong and how you think we can do better . all of us like compliments , but we also welcome your criticisms . the more than journal newspeople based in more than business centers around the world and their colleagues in other journal departments all are committed to making this newspaper even more valuable to you . some of these journal people may be known to you from their bylines . others work to serve you in far less visible roles . this letter offers me an opportunity to introduce you to a number of them . a month later , two exceptional reporters , jim stewart and dan hertzberg , produced an extraordinary page one story , based on scores of interviews , that put together the jigsaw of the market crisis and explained for the first time how very close to meltdown the markets came on oct. , the day after the crash . the brady commission report of last week was in many respects an official echo of the stewart - hertzberg reporting . it's this sort of reporting -- not simply what happened , but also why and what it means -- that the journal prides itself on providing . journal reporters , as always , ranged way beyond markets and money to give business readers glimpses of american life that most of us never see . alex kotlowitz , a young reporter in our chicago bureau , spent much of six months reporting in a chicago ghetto -- a community where police protection is minimal and gangs rule the streets -- to chronicle the life and times of a ghetto child trying to surmount an environment of deprivation and brutality . alex's haunting story from inside the ghetto captured the terror and trauma experienced by many thousands of ghetto children growing up in similar circumstances in all our great cities . another journal reporter , gerald seib , experienced personal terror when he was arbitrarily arrested by iranian security officials while on a reporting trip to that country . jerry spent four days being interrogated at iran's notorious evin prison before finally being released . the reasons for his release seem clearer . jerry's own honesty , coolness and courage permitted him to survive extraordinary pressure . meantime , his colleagues , and particularly journal foreign editor karen elliott house , mobilized support from around the world -- from turkish ministers to vatican officials -- to press the iranians to release a respected journalist . when jerry finally gained his freedom his first priority was to write his story for journal readers . not all news people get their names on stories . many , like wire - room supervisor rich schuster , work behind the scenes to get the stories to readers . rich , a - year dow jones veteran , oversees the journal's central communications hub in new york , a - hour - a - day operation that links the paper's reporters and editors around the world to each other and speeds their copy on to journal composing rooms and printing plants in u.s. cities and five overseas . rich's workday often runs almost round - the - clock , particularly during the recent months of global - market crisis . computers help speed many journal functions these days , but it's still people who program them to perform . carolyn angell , virgil hollander and dave kile were key members of a team that spent many months devising and perfecting the journal's " index to businesses " -- our new company index introduced in to help readers locate all mentions of a particular company anywhere in the paper . that innovation , like many others at the journal , is aimed at saving you valuable time with a more accessible and convenient newspaper . getting that paper to readers -- quickly and reliably -- involves hundreds of journal staff members in our production , circulation and distribution departments . two million people buy the journal every business day -- making it far and away the largest circulation newspaper in america . some of you buy the journal on newsstands , some get postal delivery , and others -- more than in cities -- get early morning home or office delivery through our own national delivery service . that delivery team includes people like jim stamm of san jose , calif. , who last year was hit by a truck while he was on his delivery route . then there's bill moody , whose delivery route is in san antonio . bill was tending his route in the pre - dawn hours when he discovered a robbery taking place . bill gave chase , helped apprehend the robber , and then resumed his deliveries on schedule . the journal's advertising department is charged not only with sales , but also with ensuring the highest possible service to the paper's more than display - advertising clients . for example , there's john farrow , a service manager in our naperville , ill. , plant . he grabbed an armload of journals off the press , caught a night flight to new york , and hand - delivered the papers containing an important midwest edition advertisement , to clients landing on an early morning concorde flight from london . our advertising people , like our reporters , operate world - wide . dan cates , based in new york , and joachim nunvar , based in frankfurt , traveled to moscow last winter and spent several weeks in sub - zero weather visiting soviet offices . the result , published in august , was a nine - page soviet advertising section -- a remarkable step for the soviets and one that indicated the importance they , too , place on the influential audience that reads the journal . remarkable is a word that applies to a final journal individual -- joe guilfoyle . joe , a tireless newsman who spurns elevators for staircases and small talk for news talk , retired last month after fully years with the journal and dow jones . joe began working for the journal as a messenger in and joined the news staff five years later . he was one of the handful of reporters and editors who built the journal from a small new york financial paper of circulation . in his most recent position , as executive editor of dow jones news services , joe was still there at his desk each morning urging reporters to file faster and editors to edit more tightly and reminding all of us that readers are relying on us for news that is timely , accurate and fair . it is an injunction all of us at the journal will try our very best to follow in the months and years ahead . we appreciate your confidence and we will work to justify it every business day . all of my journal colleagues join me in extending to you and your families very best wishes for the new year . dow jones & co . citicorp investment bank said it is cutting jobs in its london securities division , or just under of the citicorp unit's employees . the new york - based bank holding company and financial services concern has a total work force of in britain . the bank said yesterday that the cuts were due to " changes in the market environment . " they will affect its eurobond market , british equities and british government bonds , or gilts , operations . it said citicorp " has a substantial market presence in all these businesses and will continue to provide this full range of products and services . " it also said , " citicorp's outlook for is buoyant . " separately , credit suisse buckmaster & moore , a british merchant bank -owned by zurich - based credit suisse , said it is reducing its staff by about because of the effects of the october stock market crash . it said it will lay off of its employees . a spokesman said the unit remains profitable , but he didn't elaborate . there had been persistent market speculation that staff cuts were imminent at the citicorp london unit . citicorp investment bank cut jobs in its north american division last week . in the early th century , french traveler marquis de custine observed that once you entered russia , the most innocent things became secret . under stalin , institutionalized secrecy reached its zenith . it was a joke at the time that in america secrets were not secret , in germany what was secret was secret , and in russia even non - secrets were secret . this was not an exaggeration : even the instruction manuals of equipment purchased abroad were kept in a library with access restricted to those with security clearance . is the u.s.s.r under mikhail gorbachev less obsessed with secrecy than before ? let's be fair . the glasnost campaign did open some aspects of soviet life that were taboo only a few years ago . now the soviets are publicly discussing some of the sore spots of their society : prostitution , drug abuse , child mortality , corruption , alcoholism , etc. even so , accurate statistics have not been published . also , certain more prosaic things remain secret . you cannot buy an accurate road atlas because all distances and locations are purposefully distorted , presumably to confuse an invading army . the listings in telephone books are severely restricted . many state agencies and officials are not listed . probably the biggest secret of all is the scope of perks , privileges and salaries of elite . nobody knows how much mr. gorbachev makes . secrecy also serves as a convenient means to combat competitors and maintain a monopoly . recently , a distinguished literary scholar could not get access to manuscripts of humorous short stories kept in the state lenin library : a competing scholar succeeded in declaring the manuscripts " secret , " thus keeping everyone else at bay . other scholars have found a way to avoid the usually strict peer review of a ph.d. thesis : attach the label " secret " to it . this will ensure that it will be read only by those with a security clearance , often scholars in a different field . there's another particular aspect of soviet life that reveals how much the society is caught up in the web of secrecy : any soviet citizen who wishes to visit or join relatives abroad must prove that he or she poses no security risk . it is not the state that must prove its case , but the individual . soviet courts do not accept cases involving secrecy . if you were a gardener beautifying the yard of the electronics research institute in the late s , you may still be waiting for your exit visa in the late s , as is the case with natalia rosenstein . when dr. emil merzheritsky decided to join his daughters in the west , his employer imposed a five - year moratorium . ten years later , dr. merzheritsky is still waiting for his visa . in the soviet bureaucratic jungle there are no means of having a previously made decision enforced . but if glasnost does not change the soviet apparatus , it certainly has changed the mentality of some people . ten years ago , natan sharansky discussed the issue of secrecy with some of his contacts and found himself in a prison camp . on nov. , dr. merzheritsky and others conducted a private symposium in moscow on excessive secrecy , to which they invited soviet legal authorities . the organizers are expected eventually either to end up with tickets to the west or with free transportation to siberia . neither has happened as yet , but that shows only that the totalitarian state moves slowly but surely . americans must be puzzled that accused drug lord jorge luis ochoa -- wanted in florida for crimes that carry life terms -- was released last week from a colombian jail after serving barely one month of an - month sentence for cattle smuggling . there is little prospect of his coming to trial in the u.s . as president virgilio barco vargas remarked in december , " as long as mafiosos must appear before colombian judges , they will never be extradited . " what americans may not understand , and what colombians must reluctantly acknowledge in the president's remarks , is that the administration of justice by the state has been overpowered by the private system of vendetta , judgment and punishment that has long existed alongside the formal institutions . administration of justice in colombia has never been easy or rapid . the court system is painfully slow and bureaucratized . young lawyers fresh out of the university fill the bulk of the low - paying positions as circuit judges . legal instruments that assist in the apprehension of criminals in the u.s. do not exist in colombia . plea bargaining is considered beneath the law , and even confession does not constitute a proof of criminality . the declaration of income from unidentified foreign sources and the legal importation of dollars are accepted with no questions asked . in the face of investigative limitations , the principal technique of the justice department appears to be to hold people charged with a crime , hoping that a case will build itself , until the statute of limitations runs out . thus the confessed assassin who gunned down the justice minister , rodgrigo lara bonilla , five years ago was released a year ago , without ever having been brought to trial . the intricacies of colombian law have rendered the extradition treaty for criminals inoperant , not due to any legal faults but because the treaty was signed unconstitutionally . furthermore , the civilian authorities have no power over certain groups such as the roman catholic clergy , nuns , monks and the military that maintain their own , private courts of law. ( msgr . other groups can intimidate , or buy their way out of court as the rampant killing of judges and the constant threats to their lives indicate . a letter , sent to a medellin newspaper and signed by " the extraditables , " promised to " kill all political leaders " if jorge luis ochoa was extradited . the very weakness of the state judiciary , and its total absence in certain areas of the country , has meant that colombians have been taking the law into their own hands for a long time . and compared with the public authorities , the system of private justice in colombia works with deadly efficiency . while capital punishment does not exist under the law , more than people were executed here last year because some private groups considered them a threat to society . while the state has not been able to extradite more than a handful of criminals , private operators have used death threats to send an estimated people into exile . the growing presence of bodyguards , security systems and private armies to protect industrial plants and farms represents the private sector's answer to the inefficiency of the police and the courts . while civil , military and church courts have functioned simultaneously , landholders also have played the role as authority figure in remote areas . after the " era of violence " -- the period from to when were killed -- guerrilla groups forged alliances with peasants by maintaining order where civil authorities were lacking . since the amnesty in , however , the guerrillas' private justice system has been accused of killing unsupportive peasants , of waging war against amnestied guerrillas and the nonviolent left , and of shooting down political and military leaders on the right . the most recent assassination attributed to the left was that of congressman pablo emilio guarin , a fervant anti - communist , rumored leader of the " mas " death squads and staunchly opposed to the advance of the guerrilla forces . earlier this year , a guerrilla group claimed credit for the death of a nurse who belonged to a leftist group opposed to the use of arms . it subsequently " executed " two of her fellow workers for being pallbearers at her funeral . two peasants who survived a december massacre , which left eight dead in yacopi , indicated that members of the guerrillas had attacked the group with machetes for joining a " self - defense " group sponsored by local landlords . " executions " are now carried out on the political left , on the right , on vagrants and delinquents , on poor people for being poor and on the wealthy for being rich . they appear in the internecine killing between different mafia groups , and the killing of judges , journalists , police and government leaders opposed to the drug traffic . perhaps most dramatic are the killing of leftists , presumably by members of right - wing death squads . new graffiti appear in bogota declaring : " be patriotic -- kill a communist " or " communism and commission on human rights -- they're the same thing . " despite the assassination of more than citizens -- leaders of the leftist patriotic union party ( u.p. ) , civil - rights leaders , journalists from the center to the far left - police have not arrested a single suspect . the country is still outraged by the october assassination of jaime pardo leal , leader of the u.p . a breakthrough in resolving the mystery of mr. pardo leal's death seemed close when the justice minister , enrique low murtra , stated on television that the killing was directed by the medellin cartel , a consortium of cocaine dealers . to colombians , desperate for an explanation , mr. low murtra's statements came as a palliative . the government was exonerated , and the minister fingered the private group that has least sympathy in the country . but no evidence was offered in support of the accusation , nor any explanation as to why the mafia would want to kill a leader of the political left . in fact , the minister seems to have acquiesced to the norms of the informal justice system : free - slung and unsubstantiated accusations announced before any formal charges are filed and before any arrests are made . even if such accusations are reassuring to the nation , they will not help the justice department's case , if it ever gets to court . nor will they help colombians in their greatest task : to re - establish the rule of law in a very desperate nation . ms. solo is an architect/planner based in cartagena . the latest takeover stirrings in the drug industry may have aroused the interest of chemical companies on the sidelines . many of them , including such giants as du pont and dow chemical , are eager to build up their presence in pharmaceuticals . f. hoffmann - la roche's billion bid for sterling drug has set off wide speculation among analysts that a round of drug - industry consolidation could be imminent . the weaker dollar has attracted european companies looking for bargains , and the stock market crash in october has significantly lowered premiums . what's more , competition in the drug market and high research costs have weakened some of these cash cows . du pont and dow aren't the only u.s. chemical companies to have found health care to be a good fit and a potentially rewarding area . others , including monsanto and american cyanamid , as well as such overseas concerns as hoechst , bayer and imperial chemical industries also have invested billions in research and already have made some acquisitions . analysts say the time may be ripe for something bigger . " internal programs at these companies need a shot in the arm , " says prudential - bache's leonard bogner . adds butcher & singer's thom brown , " any chemical company looking long range would be interested in life sciences . it's getting more and more important to be in . " analysts say acquisitions would help the chemical industry develop distribution and marketing channels for drugs . in addition , some companies may need the cash flow of already approved products to maintain research costs , while others have found it difficult to grow a business from scratch . of course , some roadblocks remain . chemical companies are generally reluctant to attempt unfriendly takeovers . at this point , american companies probably would have trouble in a bidding war with an overseas rival because of the weak dollar and various accounting advantages that foreign companies possess . besides , many drug stocks still may be priced out of range . many analysts see du pont and dow as the most likely prospective buyers . du pont , which is generating about billion annually in cash flow , has invested heavily in life sciences in recent years . morever , the chemical and energy giant has said repeatedly that it is interested in making a major acquisition -- provided it can find the right fit . that position has raised some speculation that du pont could play " white knight " to a besieged company such as sterling , if sterling starts looking for an escape from roche . du pont , however , says it isn't attracted to sterling because of all the non - pharmaceutical products it offers . dow , meanwhile , has been building up a substantial and profitable drug business , recently passing billion in annual sales , since its acquisition in of richardson - merrell . dow has indicated , however , that its appetite isn't yet filled . last week , it offered to acquire a.h. robins's over - the - counter drug line from rorer group for million if rorer should be the successful bidder for robins . dow once held a stake in rorer before the merrell acquisition , but says it is more interested in products like those of robins . a spokesman declined comment on whether dow is any longer interested in rorer . " we're always looking for opportunities that would fit our strategies , " he said . monsanto , after acquiring searle in , is incurring losses from that unit -- million for the nine months . through research and development , american cyanamid has built a pharmaceutical unit that now contributes about of total corporate earnings . cyanamid said it also doesn't plan any acquisitions . some analysts say cyanamid itself is an attractive target . some european concerns no doubt are also licking their chops . viren mehta , a drug analyst with s.g. warburg , calculates that although the stock value of american drug companies in dollars increased significantly between and , their value in west german marks has actually decreased in many cases . of those he considers possible takeover targets , smithkline beckman has experienced a rise in the dollar value of its stock but the price has declined in marks , he says . warner - lambert is up in dollars and down in marks , while schering - plough is up in dollars and up only in marks , he adds . hoechst has a sizable pharmaceutical unit , and analysts consider the west german concern a likely acquirer . analysts also speculate that bayer , also of west germany , would be interested in building its drug business , which accounted for of its billion in sales in . bayer also declines comment . ici , which has the stuart line , including mylanta , says it " wouldn't foreclose on any interest in expanding its pharmaceutical group . " a sharp advance on the tokyo stock market wednesday showed that , internationalized as it may be , the market still moves to the tune of japan's finance ministry . at the same time , the ministry showed how much it wants the market to climb . the nikkei average of selected stocks leaped points to , its second - largest single - day point gain ever . the tokyo stock exchange's first section index rose points to . first section volume was estimated at a heavy million shares , more than double the million shares a day earlier . in early trading in tokyo thursday , the rally in share prices was reversed . the nikkei index fell points to at the end of the morning session . the nikkei index opened wednesday with a gain of . a broad - based rise continued for the rest of the day . two factors sent the market average soaring : the dollar's rise this week against the yen , and -- more importantly , brokers said -- reports of a finance ministry plan to ease accounting requirements on " tokkin " and fund trusts , which are special investment funds that have played a major role in the market's movements over the past several years . the plan also will allow life insurance companies to funnel more money into tokkin . the ministry developed its plan at the end of last year , out of concern about the market's " sluggishness , " said a ministry official who declined to be identified . " all kinds of measures are to be taken from the viewpoint of discouraging equities sales . " timing was crucial to the ministry's announcement of the plan at a meeting late tuesday with financial institutions . " the dollar showed recovery , " the official said , " and we felt if we announced then , the effect on the market would be more than doubled . " the strategy worked . the nikkei average , which for the first time in years had opened lower on the first day of the new year's trading on monday , soared on wednesday . the ministry's plan is significant because at best it could bring a flood of new money to japan's equities market . it should at least act to stem a potential flurry of selling by tokkin and fund trusts before their accounting period ends march . tokkin , formally known as specified money trusts , became popular among japanese companies and financial institutions , partly because they offer reduced exposure to capital gains tax . corporations and financial institutions established the funds through custodian trust banks ; every trade made by the trust bank must be approved by the client . fund trusts are similar to tokkin , but they are held and managed by the custodian trust banks . they also became a major element in the more - than - doubling of the nikkei average in the two years to last october because of the huge amount of money they pumped into the market . at the end of november , tokkin funds outstanding totaled trillion yen ( billion ) , with trillion yen of that in japanese equities , according to peter morgan , chief economist at barclays de zoete wedd ( securities ) japan ltd. fund trusts' holdings at the end of november totaled trillion yen , with trillion yen in japanese equities , he said . but the financial industry and government officials have been increasingly worried about the effect of new accounting rules that would have been imposed on the current fiscal year's accounting . the rules would have required that all tokkin and fund trusts value their share holdings at either the market or the acquisition price , whichever was lower . investors feared the funds would sell shares to realize gains where possible , causing a steady decline in stock prices as the deadline neared . " dark clouds are overcast on the equities markets " for three reasons , the ministry official said , citing the yen's recent sharp appreciation , the valuation method for the tokkin and fund trusts , and about six trillion yen in margin transactions outstanding . but he said , " we've been able to almost eliminate the second reason . " the plan basically gives tokkin and fund trusts a year's grace period in which they can continue operating under the current accounting system , though exact details haven't been decided . after the ministry explained its plan , rumors about it made waves . securities companies were the major buyers . many issues reached their limit for daily gains or had trading temporarily suspended because of an overflow of buy orders . among brokerages , these traded at the afternoon close at stop highs : yamaichi securities , up yen at ( ) ; nomura securities , up at , and daiwa securities , up at . high - technology stocks led the rally , which spread to financial , heavy industry and utility stocks . the technology stocks , in particular , got a lift from the ministry's new accounting plan , brokers said . " the percentage of high - technology share holdings is especially low in tokkin and fund trusts , " said kunio misaki , a senior analyst at nikko securities co " investors were thinking that if those funds become more active , they'll be buying more high - technology shares . " high - tech issues also rose on the dollar's strength , believed to be good for export - related issues . nec closed up at . hitachi electric rose to . fujitsu added to , bringing its gain for the week to , or . intervention continued wednesday in tokyo . the dollar closed in tokyo at yen , up yen from tuesday . the effect of the dollar's strength on the tokyo stock market wasn't limited to export - related shares , brokers said . " it's not so much that it was great for export - related shares as that there was the perception that we do have the g - ( group of seven industrialized nations ) coordinated for economic cooperation , " said julian jones , a broker at vickers da costa ltd. in tokyo . for mutual fund investors feasting on fat returns in recent years , the banquet ended in . after double - digit gains from stock and bond funds the past several years , even paltry returns were reason to cheer last year . the average general equity fund inched up through dec. , while standard & poor's - index , including reinvested dividends , rose in the same period . fixed - income funds edged higher . " most mutual fund investors are in a bad mood -- they're frustrated " from the year's market shocks , said kurt brouwer , a san francisco money manager . many equity funds fared even worse than broad market averages , despite diversified portfolios that many had hoped would stem severe losses . as a result , investors withdrew more money than ever before from long - term funds . through november , redemptions from stock , bond and income funds totaled billion , nearly double those of a year earlier , according to the investment company institute , a trade group . for all of , redemptions were billion . bond fund investors were the most fickle , with heavy redemptions both in the spring and early autumn , when interest rates climbed before the october stock market crash . the steepest equity - fund withdrawals occurred in october , of course , after the stock market crashed . " investors were moving money into liquid assets , " said alfred p. johnson , ici vice president and chief economist . one of those investors was parker bartlett , a retired santa monica , calif. , aerospace equipment executive . he switched nine of his stock funds into money markets accounts after his of holdings plunged black monday . mr. bartlett currently has about left in one equity fund -- and he isn't sure what he will do with the rest of his money . " i'm more inclined to go into individual blue chips rather than move it back into mutual funds , " he said . meantime , mutual fund professionals say investors shouldn't expect strong returns this year . " nineteen eighty - eight will be the year of modest expectations , " said john laporte , research director at t. rowe price associates inc. , baltimore . added mr. brouwer , the money manager : " the new game for investors will be to hold on to what they have . " while sales have slumped and fund assets have declined about since their august peak of nearly billion , assets still remain higher than a year ago . thus , the big layoffs hitting wall street financial services firms have been averted at most fund management concerns , although many positions are being re - evaluated , officials say . one exception , ivy financial services inc. , a hingham , mass. , family of five funds , has laid off , or five of its small work force , including two salesmen and a trader . the stock market crash also has yet to spark any mutual fund failures . one fund that has disbanded , westergaard fund inc. , which invested in small growth companies , announced plans to liquidate in september before the market debacle . some executives contend that fund companies can grow -- even with no net new sales of general mutual funds to investors . steady growth in retirement funds and reinvested dividends could keep larger companies healthy if redemptions are held down , some argue . " the regular cash flow from accounts is a pretty powerful force even when you can't sell funds , " said steven norwitz , a vice president at t. rowe price . whatever happens , investors continue to have a broader selection from which to choose . at the same time , nearly three dozen closed - end funds were launched . still , the growth has slowed since the crash . just new funds registered with the securities and exchange commission in november -- less than half the number filed in august , according to charles e. simon & co. , a washington research company . and black monday has indefinitely set back several planned launches of closed - end funds . any new growth is expected to be primarily in international funds , which take advantage of a weaker u.s. dollar , fund officials say . there also likely will be more emphasis on asset - allocation funds -- those that can shift from one investment market to another . until the dust settles in the markets , many mutual fund holders will be hunkering down . " we'll see a little more rationality and conservatism by investors , " said john bogle , chairman of the vanguard group in valley forge , pa . the best places to be in were gold and international funds , which dominated the top funds monitored by lipper analytical services inc . both benefited from the persistent drop in the u.s. dollar . bringing up the rear were utilities and small - company growth funds , which were affected severely by the stock market crash . and the fund family with the best chance for 's comeback - of - the - year award is wall st. , whose wall st. equity and wall st. funds snared two of 's bottom four spots . most investors in publicly traded commodity funds enjoyed a banner year . the average commodity fund -- which offers limited partnership units in pools of professionally managed futures trading money -- rose nearly through november , according to managed account reports , columbia , md . most futures - fund managers are technical trend followers who were aided by strong sustained movements in stock - index and currency futures for much of the year . lsi logic corp. reported a surprise 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 million to million net loss for the third quarter . but company officials said yesterday that they decided to take a 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 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 . not counting the extraordinary charge , the company said it would have had a net loss of million , or seven cents a share . a year earlier , it had profit of million , or cents a share . revenue rose to million from million. en . 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 . president bush and soviet leader mikhail gorbachev will hold an informal meeting in early december , a move that should give both leaders a political boost at home . the white house is purposely not calling the meeting a summit so that there won't be any expectation of detailed negotiations or agreements . rather , senior administration officials said that the unexpected meeting was scheduled at mr. bush's request because of his preference for conducting diplomacy through highly personal and informal meetings with other leaders . the two leaders will meet on dec. and , alternating the two days of meetings between a u.s. and a soviet naval vessel in the mediterranean sea . the unusual seaborne meeting won't disrupt plans for a formal summit meeting next spring or summer , at which an arms - control treaty is likely to be completed . in announcing the meeting yesterday , mr. bush told reporters at the white house that neither he nor mr. gorbachev expects any " substantial decisions or agreements . " instead , he said that the purpose is simply for the two to get " better acquainted " and discuss a wide range of issues without a formal agenda . mr. gorbachev badly needs a diversion from the serious economic problems and ethnic unrest he faces at home . american officials have said that a meeting with the leader of the u.s. could help bolster his stature among soviet politicians and academics , whose support he needs . for his part , mr. bush has been criticized regularly at home for moving too slowly and cautiously in reacting to mr. gorbachev's reforms and the historic moves away from communism in eastern europe . a face - to - face meeting with mr. gorbachev should damp such criticism , though it will hardly eliminate it . senate majority leader george mitchell ( d. , maine ) , who has been the most prominent democratic critic of mr. bush's handling of the soviet relationship , praised the president for arranging the meeting . but he added : " the mere fact of a meeting doesn't deal with the substance of policy . " " by doing it in this manner we can have , i would say , more time without the press of social activities or mandatory joint appearances , things of that nature for public consumption , " mr. bush said . soviet foreign minister eduard shevardnadze , at a news conference in moscow , said , " as the two sides plan to hold a full - scale summit in late spring - early summer next year , they found it useful , i would say even necessary , to hold an interim informal meeting . " although no specific agreements are expected , mr. shevardnadze said " that doesn't mean they will be without an agenda . " if the two leaders cover the subjects that have been featured in lower level u.s. - soviet meetings , their talks would include human rights , soviet reforms , regional disputes , relations with allies , economic cooperation , arms control , and joint efforts to fight narcotics , terrorism and pollution . the president specifically mentioned u.s. economic advice to moscow as a possible topic . mr. gorbachev has for months been publicly urging the u.s. to drop its restrictions on soviet trade . the soviets hope a trade agreement would give them most - favored nation status , which would lower the tariffs on soviet exports to the u.s . in an unusually candid article about the latest economic woe -- unemployment -- pravda yesterday reported that three million soviets have lost their jobs as a result of perestroika and the number could grow to million by the year . economists in moscow are now proposing that the state start a system of unemployment benefits . but one bush administration official knowledgeable about the summit plan cautioned against assuming that there will be bold new initiatives on the soviet economy or other issues . " don't take this as some big opening for major movement on economic cooperation , or arms control , or the environment , " he said . " those things will all come up , but in a fairly informal way . " instead , this official said , " this is vintage george bush . this was george bush's own idea . it's george bush wanting to meet a foreign leader and talk to him directly . " western analysts say that , given the meeting's setting at sea , gorbachev is unlikely to pass up the opportunity to press once again for negotiated cuts in the navies of both the north atlantic treaty organization and the warsaw pact . that theme has been a recurring one for soviet military officials for much of this year . they argue that as the kremlin follows through on announced plans to cut land forces -- the soviets' area of greatest strength -- the u.s. should show more willingness to cut sea forces -- washington's area of greatest superiority . one of the reasons bush administration aides are anxious to insist that the coming meeting will be informal is to avoid comparisons with the last such loosely structured superpower gathering , former president reagan's meeting with mr. gorbachev in reykjavik , iceland . that meeting sent shivers through the western alliance because mr. reagan was pulled into discussing the possible elimination of nuclear weapons without consulting american allies . mr. bush said that he initiated talks with the soviets on the informal meeting by sending a proposal to mr. gorbachev last july , which the soviet leader readily accepted . indeed , many senior officials had been insisting for weeks that mr. bush wasn't interested in such an informal get - together . though president bush's political critics at home have been urging him to open a more direct dialogue with mr. gorbachev , it actually was the arguments of leaders within the soviet bloc itself that led the president to seek the december meeting . mr. bush decided he wanted the meeting after talking in europe in july with the leaders of poland and hungary , who urged him to support mr. gorbachev's efforts to transform the soviet system and to urge him to loosen his grip on eastern europe , a senior aide said . while flying home from those discussions , mr. bush drafted a letter to mr. gorbachev suggesting an informal get - together to precede their formal summit next year . peter gumbel in moscow contributed to this article . mexican debt . mexico and its main foreign bankers have begun marketing the country's new debt - reduction package to creditor banks around the world - amid growing concern that the deal could collapse . the pessimism stems from worries that not enough banks will choose the new - money option to allow the deal to work and concern that the steering committee could fail to put together the crucial billion short - term financing needed to bridge a shortfall on collateral for the deal's bond options . the mexico deal , formally agreed to sept. , covers billion of the country's medium- and long - term commercial bank debt and offers banks three options . they can swap their loans for - year bonds with a face value discounted by , swap them for - year par bonds with fixed interest rates or provide new money equal to of their medium- and long - term exposure over four years . in a related development , a japanese news service reported that japan's ministry of finance will allow japanese banks to take tax - free write - offs on losses on loans to mexico if the banks participate in the mexican government - bond exchange plan . beef for south korea . u.s. trade representative carla hills , now in seoul with a u.s. delegation , had suggested that if seoul had difficulty lifting all beef - import restrictions immediately , it should first allow unrestricted imports of high - quality foreign beef for use by hotels and restaurants . south korea now imposes quotas on beef imports to protect its weak farm industry . helping poland and hungary . michel camdessus , head of the international monetary fund , held discussions with frans andriessen , the top foreign - affairs official of the - nation european community , to discuss efforts to aid the struggling economies of poland and hungary . an ec spokesman said the talks were intended to ensure cooperation between the imf and the two - dozen western nations putting together economic aid packages for the east european nations . poland has a foreign debt of about billion . hungary's loans amount to about billion , the highest per capita in eastern europe . volkswagen adds workers . volkswagen ag said it will add new jobs immediately to aid its production of cars for the japanese market . in the first nine months of this year , vw sold cars in japan , up from the year - earlier period . illegal currency trading . china has uncovered illegal trading in foreign currencies worth million so far this year , the economic daily said . one example of an illegal trade was a beijing leasing firm's sale of to a rural firm in dalian for the apparent purpose of buying machinery ; the dalian firm resold the money for profit to eight other companies . in china fetches yuan at state banks , about six at official exchange centers open to some firms , and about seven on the black market . a delay for daimler . daimler - benz ag said it hasn't reached agreement yet with the west german states of hamburg and bremen on the terms for its acquisition of a majority stake in messerschmitt - boelkow - blohm g.m.b.h. , or mbb . diplomatic quarrel . china's decision to suspend a decade - old agreement aimed at stemming the flow of illegal chinese immigrants into hong kong has escalated into a diplomatic quarrel . the dispute centers on yang yang , a chinese athlete who sought political asylum while visiting hong kong and was allowed to leave for the u.s. a week ago . chinese officials retaliated by refusing to readmit illegal chinese immigrants being deported by hong kong . some businessmen worry that china , while unperturbed by the colony's free - wheeling business ways , is fed up with hong kong's western - style civil liberties . another worry : that beijing may try to overwhelm hong kong by unleashing a flood of illegal immigration into the territory . postscripts . . . mexico's ambassador to the u.n. food and agriculture organization resigned . news reports in mexico said eduardo pesqueira olea's resignation followed a government comptroller's finding that he failed to report receiving a ranch while he was secretary of agriculture. . . . a japanese health ministry survey shows that of boys and almost of girls in their late teens are overweight -- about double the levels of the early s . a seat on the new york stock exchange changed hands at the lowest price in nearly three years . at , yesterday's big board seat sale fetched the lowest price since the sale of a seat on nov. , , according to exchange data . today's price is lower than the peak level of million set sept. , . the relatively low sale price , off from the prior sale , comes the day after major stock indexes , including the dow jones industrial average , closed at all - time highs . but analysts say the price of big board seats is reflective of the volume of stock trading and commission levels , not share prices . big board seat prices offer a " window as to what some people think future volume will be , " says perrin long , securities industry analyst at lipper analytical services inc. mr. long says that through the first nine months of the year , stock - trading volume was marginally higher than the same period of . when volume flattens or falls , stock - exchange seat prices stabilize or drop , he says . in the heady pre - crash days of , seven big board seats were sold for million or more , the last of those coming oct. , , at . on oct. , the day the industrial average fell points , a big board seat changed hands at . seat prices then fell further . the highest seat - sale price in was on may , big board data show . prices began to drop in last year's second half . in , the high seat - sale price was on march . the nine seats sold from april through tuesday were all at prices from to . it was a crime so rare and loathsome that it went for centuries without a name . now , inside the citadels of anglo - saxon jurisprudence , it is making a mockery of modern justice . we're talking about wignapping . barristers must wear wigs along with black gowns to argue cases in britain . if they don't , they risk being found in contempt of court . but the wigs are being snitched with alarming frequency from well - guarded court sanctums in and outside london . the courts are warning barristers to hold tight to their good gray locks . clerks are keeping spares handy to rent or lend to hapless victims . " this wignapping is rife , i am afraid , " says chris van hagen , a barrister who has spied desperate requests for the return of missing wigs posted in nearly every criminal court in london . donald leach , a retired court clerk , suspects workmen and tourists . but most of the culprits may be barristers . those in the wig world say almost nobody but a barrister would want to swipe the itchy hairpieces , long discarded by almost every other country . " nowadays , we have a lot of people at the bar whom one is not too sure of their behavior , " observes thomas field - fisher , years old . his wig and robe were stolen two years ago from his chambers in exeter , where he was serving temporarily as a judge . barristers treasure their old wigs , as smelly and filthy as they are , because they connote wisdom and experience . a barrister may don the same ratty hairpiece for years , passing it on to a younger colleague upon retirement . so honest barristers must turn new white wigs to a shabby gray by hanging them in the rain or using them as dust mops . " you look like a fool in a sparkling new wig , " says philip hackett , a london barrister . " you don't want to look like you're just out of school . " british barristers and judges have worn wigs since charles ii imported the idea from france in the s . a london company , ede & ravenscroft ltd. , today claims of the market for legal wigs in the united kingdom . the wigs distinguish barristers from solicitors , lawyers who ordinarily don't appear in court . the firm gets hundreds of orders a year from people who have reported their wigs lost or stolen , says michael green , a salesman at the shop . " it has to be that they're taken by others in the profession , " he says . a pink - cheeked customer overhears his remarks . " i'm putting my name on the box so it won't get taken , " says the young barrister , as a wigmaker hands him a shiny black box emblazoned " n.f . harrison " in gold letters . mr. green warns him that the labels don't deter wig thieves . the lawyer , looking worried , clutches his wig and flees the shop . used wigs cost less , between and each , but rarely appear on the market . in a stuffy loft two floors above , six women fabricate about wigs a year on pockmarked wooden blocks resembling shrunken skulls . the wigmakers attach rows of tightly rolled curls and a pair of ponytails with painful hand stitching , using - yard lengths of bleached curls made from horses' tails and manes . they strictly follow a pattern conceived by humphrey ravenscroft in when he invented the " modern " horsehair wig with fixed curls . occasionally a barrister may grab another's wig by mistake . barrister michael wolkind once took somebody else's from a row of identical wooden cubbyholes outside the robing room at the old bailey , london's most famous criminal court . he realized his error in court when the wig began to feel too tight . he returned it to exchange it for his own wig , but if it had disappeared , he says , " i probably would have gone on wearing " the wrong one . missing wigs are rarely recovered , especially at the old bailey . " the old bailey is , after all , where { the worst } criminals are tried for theft , " notes john nutting , a barrister and occasional public prosecutor . it is also the place , consequently , where the defenders of the worst thieves gather . mr. nutting says his antique wig and gown vanished from a window ledge in the old bailey cafeteria in . he couldn't find a spare hairpiece before his trial resumed and apologized to the judge . the judge literally flipped his wig , expressing delight at having an excuse to remove it . testy court administrators either deny wignapping occurs or blame the disappearances on carelessness . scotland yard hasn't been called to investigate . " we have enough other things to do , " says one court official . at the royal courts , a gothic labyrinth with three - and - a - half miles of corridors , mr. leach faults barristers for failing to lock their lockers . " they leave their keys in { the doors } , " says the former clerk , who runs the changing rooms . opening a tall metal locker , he gestures at the top shelf and says , " look , there's a wig up there . " wigs have disappeared from the royal courts' locked courtrooms and locked judicial chambers . so have antique wall clocks , heavy oak tables , victorian fireplace grates and eight - foot - high oil portraits . because of terrorism , security is tight at most british courts . visitors pass by metal detectors and submit to bag searches . but nobody challenges individuals walking out . last year , barrister stephen rich placed a red velvet bag containing his wig and gown on the guard's entry desk at london's snaresbrook crown court . it was there , but the wig was gone . the security guards ignore people departing , mr. rich says , because " they are so busy watching people who come in . " mr. field - fisher keeps " a sharp eye " out for his missing wig whenever he joins fellow barristers in court . after years of wear , he declares , " i would know my wig if i saw it . " consumer confidence leveled off in september , but remained relatively strong in a historical context , the conference board said . the conference board's confidence index was in both september and august , with the august reading revised from . the index , which uses a base of in , was in july , a near - record . in september the index stood at . an appraisal of the current economic situation , as measured by a conference board index , was weaker in september than in august , but remained stronger than the reading of september . fewer respondents in september said business conditions were " good " than did so in august ; both month's responses were below that of september . fewer people also said jobs were plentiful in september than in august . the september response was just above the response of a year earlier . expectations of future economic conditions were mixed . the board's index of expectations was higher in september than in august . but , on expectations of future business conditions , consumers were more likely to fence - sit in the latest month than say conditions would improve or get worse . fewer said they expected business conditions to improve ; at the same time , fewer anticipated worsening conditions . it would be poetic justice if glasnost , by allowing ever increasing emigration from the soviet union , would reconfirm israel's original purpose of providing a haven for jews unwelcome elsewhere . it would also be a delicious irony if the task of absorbing such a huge mass of immigrants from a failing socialist system forced israel to finally abandon its own anti - productive system , inspired by similar ideology , which impels many of its young to leave . how even more delightfully ironic if this made a hostile kremlin an unwitting partner in solving some of israel's most intractable social and economic problems , by moving it toward a free - market economy that would realize its tremendous human potential , talent and energy . jewish emigration from the u.s.s.r. now runs at about annually , up from in , in and in . but the people now leaving the soviet union decided to emigrate two years earlier , since it takes that long for the initial decision and application for emigrations to make its way through all the procedures . we can therefore anticipate a snowball effect , which -- coupled with the progressive deterioration of the soviet economy , increasing social and political instability and growing grass roots anti - semitism -- will probably result in an unprecedented jewish exodus . when asked how many of those people would emigrate if allowed , the official reply was , " about six million . " however , most russian jewish emigrants wish to travel to america , not israel . years of soviet propaganda painting an uninviting picture of israel has unfortunately been reinforced by the numerous failures of the israeli bureaucracy in absorbing newcomers and by the hardships immigrants face in finding decent housing and jobs . political instability and the military threat posed by relentless arab hostility have not helped either . but mostly , jews escaping from a bankrupt soviet state - dominated economy cannot see a future for themselves or their children in a country suffering from similar economic handicaps . israel's talented and well - educated population makes an average wage of only a month . soon , however , jewish emigrants from the soviet union may have no choice but to come to israel , since the u.s. government is unlikely to extend continuously its refugee quotas and resettlement budgets and is , indeed , more disposed to curb them . thus , the american jewish community will find it difficult or even undesirable to prevail upon a reluctant administration to modify its immigration policy to favor soviet jewish emigrants . fortunately , unlike , when jews trying to flee hitler had no place to go , the establishment of israel provides them with a viable alternative . israel desires and needs immigrants . without their human capital , israel could never hope to defend itself and develop its economy . despite its good will and genuine desire , though , israel is unprepared to cope with large numbers of immigrants . even the small increase by a few thousand of immigrants in the past couple of years created a crisis in its state - dominated absorption and resettlement services . temporary residences for immigrants are overcrowded , permanent housing is hard to obtain and the unemployment rate is nearing . with so few opportunities for israelis , and with growing economic hardships , a wave of immigration will only strain the government's ability to provide resources from its already overextended budget . israeli politicians are aware of the system's inability to meet the historical challenges that increased immigration will pose . they are acknowledging the need for basic structural reform and even taking a few steps toward reforming the financial system and reducing regulations . but their steps toward basic reform are halting and their initiatives palliative -- such as the recently proposed " hundred projects , " designed to reduce the red tape on projects handpicked by the bureacracy and system that created these impediments originally . immigrant absorption cannot be improved outside the context of a general reform in israel's economy , since immigrants must finally be integrated into the israeli system . some researchers , observing how many immigrants from the west leave israel after their first few years , claim that the special privileges of the absorption process are counterproductive , making the immigrant less prepared to withstand the full impact of israel's bureaucracy and its confiscatory taxes . so to attract and keep immigrants -- indeed , to prevent many of its young from leaving -- israel must undergo radical reform . taxes must be lowered sharply and capital markets reformed to allow private capital formation and the launching of new businesses . the housing problem could be eased if the government released some of the land it holds -- of the country's land is held by the government or the jewish national fund -- at non - monopolistic prices . the government could also encourage housing by eliminating the rigidities and monopolies in the building trade , reducing taxes on building materials and cutting the bureaucracy that makes getting a building permit a nightmare . the government's first moves to sell to private owners its many companies -- which at the moment seem like sweetheart deals with investors enjoying access to the political system -- should be encouraged in the context of a truly competitive market environment . these are only a few of the steps that can be taken to create a productive and competitive economy without which immigrant absorption will falter . neither additional government allocations nor increased charitable contributions from abroad will suffice to provide housing and professional employment for the forthcoming masses of well - educated soviet jewish immigrants . economic reform is an urgent necessity if israel is to fulfill its historical mission . mr. doron is director of the israel center for social and economic progress , a public policy group based in tel aviv . mr. shtern , formerly an economist at the university of moscow , is a citizen of israel . sir john nott will retire as chairman and chief executive of lazard brothers & co. at year end , handing the reins to michel david - weill , who will become the first person to head the lazard group's british , french and u.s. operations concurrently . mr. david - weill already exercises effective voting control over half the equity in lazard brothers , the investment - banking group's british operation , according to a lazard official . pearson plc , the british media group , owns the rest of lazard brothers . mr. david - weill also is senior partner of the lazard group's french and u.s. arms , lazard freres & cie. and lazard freres & co . the three lazard firms are linked through complicated cross - shareholdings . mr. david - weill , , will become chairman of lazard brothers . david verey , , a rising star in lazard brothers' mergers - and - acquisitions department , will move up to chief executive from deputy chief executive . marcus agius , , and john nelson , , both london - based managing directors , will become vice chairmen of lazard brothers . sir john , a - year - old former british defense secretary who has headed lazard brothers for five years , initiated his own departure , lazard officials said . " he feels now it's time to move on . " sir john didn't return phone calls yesterday . mr. david - weill said sir john " indicated he had done what he set out to do , and now he wants to do something else . " sir john helped steer lazard away from the pitfalls encountered by many competitors that acquired british securities - trading and sales operations prior to the deregulation of london's financial markets in . instead , he focused on boosting fee - producing operations like mergers - advisory services . lazard brothers ranked eighth among british bid advisers in the first half , up from th a year earlier . combined with the lazard freres operations , it would have ranked third . one lazard brothers client is b.a.t industries plc. mr. verey helped mastermind b.a.t's current restructuring plan , aimed at defeating a # billion ( billion ) bid from sir james goldsmith . mr. david - weill , who represents the fourth generation of a french banking family , said in an interview from paris that his assumption of the lazard brothers chairmanship reflected the increasing " globalization of industrial thinking " that is bringing the world's financial and business markets closer . having a { single } chairman will make that easier , " he said . the three firms , he added , " have difficult sorting - out to do , all the time . if it is done for a time with one single voice , the sorting - out will be very easy . " what sir john will do next isn't clear . mr. david - weill and other lazard directors said sir john hasn't told them what he plans , though some speculate he may be appointed chairman of a major british company , or perhaps re - enter politics . energetic , outspoken and at times impatient , sir john entered british politics in the mid - s after training as a lawyer and investment banker . he rose to become defense secretary during the falklands war , only to quit in in a dispute over the future course of the thatcher administration . government efforts to hammer the dollar lower shook the stock and bond markets , pushing prices down sharply . the dow jones industrial average tumbled points to , albeit in light trading . the treasury's benchmark - year bond lost more than a point , or over for every face amount . analysts said the overall declines in the financial markets are symptomatic of the relatively high prices that stocks and bonds have reached in recent months . " we're really on a razor's edge with regard to valuation , " said abby joseph cohen , a market strategist at drexel burnham lambert . investors' " happy view of the dollar is being shaken , and that's reverberating through the bond and stock markets . " the rout came after a weekend meeting of finance ministers and central bankers from the major industrialized nations . the joint statement from the meeting declared that the dollar's recent strength is " inconsistent with longer run economic fundamentals . " the central banks backed up the statement with concerted intervention beginning in japan and continuing through the trading day in europe and the u.s. , sending the dollar spiraling downward . the dollar's dive spooked bond traders early in the u.s. trading session . fears of further dollar declines were fanned when west german bundesbank president karl otto poehl said the dollar's plunge was consistent with the intentions of the finance ministers and central bankers . but the fight on the currency front wasn't the only problem for bond prices . surprisingly strong mid - september auto sales suggested that the economy may be reaccelerating . that would eliminate any economic incentive the federal reserve might have to allow interest rates to fall . however , some analysts cautioned that the auto sales may be a temporary phenomenon as consumers scurry to purchase models before the pricier models flood dealer lots . in any case , the weaker bond market took its toll on stock prices . although trading volume was thin , the decline on the new york stock exchange was broadly based , with issues declining and only rising . drexel burnham's ms. cohen said stock prices are at a sufficiently high level that they can't tolerate a rise in interest rates . " it's very , very hard to construct any kind of bullish case right now , " she said . the dow jones transportation average took a hard hit , too . it lost points to after a wall street journal story reported that transportation secretary samuel skinner asked for a reduction in klm royal dutch airlines' investment in nwa inc. , the parent of northwest airlines . mr. skinner and other government officials have expressed concern about the levels of debt and foreign influence in recent airline takeovers . in major market activity : . stock prices fell in thin trading . volume on the new york stock exchange totaled million shares . bond prices tumbled . the yield on the treasury's benchmark - year issue rose to . ( see related story : " foreign exchange : central banks join forces to drive currency down " -- wsj sept. , . ) . campeau corp.'s financial problems are sending shock waves through the retailing industry -- and consumers are likely to benefit . already , off - price apparel chains , which typically sell brand - name and designer goods for as much as less than department stores , are trying to gain a competitive edge . some are snapping up goods once destined for such well - known campeau divisions as bloomingdale's , abraham & straus and burdines . others are poised to pounce , waiting only for jittery manufacturers to offer them better deals . healthy specialty stores and department stores such as nordstrom inc. and those under the far - flung may and dillard umbrellas are expected to grow stronger during the all - important holiday season . if campeau inventories grow spotty , these competitors are likely to steal business from its federated department stores and allied stores units as consumers turn elsewhere for wider assortments . and these healthy competitors , which also include limited inc. and gap inc. , might benefit by being able to extract concessions from suppliers . executives throughout the industry , meanwhile , are raising the prospect of an impending price war . campeau , they say , could be desperate enough to slash prices in an attempt to pump up sales . indeed , carol farmer , a retail consultant in boca raton , fla. , says she has seen " more prominent markdown racks " at campeau's jordan marsh stores in florida and rich's stores in atlanta in recent days , indicating " what appears to be a more heightened urgency to clear markdown merchandise . " in cincinnati , a federated spokeswoman declined to comment . this much is clear : despite olympia & york developments ltd.'s rescue of campeau with a million loan this week , prompting many vendors to resume shipments to the stores , retail executives don't believe campeau's financial woes are over . " it sounds to me like a spit in the ocean , " says norman abramson , president and chief operating officer of clothestime inc. , an off - price chain and one of many retailers that stands to gain from campeau's problems and consumers' perceptions about the company . campeau chairman robert campeau " will need more money to fund his business , " contends howard davidowitz , a retail consultant in new york . officials of campeau couldn't be reached for comment . the company's problems stem from a liquidity crunch caused by high debt levels in the wake of the real estate concern's acquisitions of federated and allied . clothestime hasn't yet bought any goods intended for campeau stores , but dress barn inc. , stamford , conn. , and burlington coat factory warehouse corp. , burlington , n.j. , have purchased some goods . " we're starting to buy clothes in all classifications , " says elliot jaffe , chairman of dress barn , a women's apparel chain . some apparel makers , meanwhile , are making contingency plans to sell through their own factory - outlet stores any goods they decide not to ship to campeau stores . philips van heusen corp. , the men's shirt maker , for instance , won't sell to off - price stores , choosing instead to unload any surplus goods through its factory outlets , says president bruce klatsky . " the potential is there for retailers such as ourselves to benefit from the unfortunate adversity of others , " says an executive at another chain , who requested anonymity . some of the benefit might be purely psychological . " that sends a message to consumers , which is probably false , that we're talking about a markdown of whole companies , " says ms. farmer , the consultant . the campeau chains could appear so weak to consumers that healthy competitors could gain market share " by default , " adds mr. abramson . but healthy chains might also be able to outmaneuver the campeau units with flashier merchandise displays and advertising efforts , simply because many campeau executives and middle - level managers are taking their eyes off the ball . instead of concentrating only on business , they may be placing calls to headhunters and fretting about their futures . " our phones have been ringing off the hook , " says mr. kerson of walter k. levy . he says his firm has been contacted by dozens of senior federated and allied executives over the past two weeks . phyllis tama of thorndike deland associates says about campeau managers from all levels have called her search firm . " the advantage to competitors at this point is temporary and psychological , " says one industry executive , who requested anonymity . since most stores are now ordering spring merchandise and making plans for next year's promotional events , it may take months for campeau to feel the sting of its staff's distraction . and by then , industry observers say , campeau could be in the midst of another cash crisis . although campeau plans to sell bloomingdale's to pay off some of its staggering debt , several industry observers say that might not solve its problems . " each time you sell something off to reduce debt , you reduce cash flow , " says douglas tigert , a marketing professor at babson college and a retailing expert . " you could have another cash flow crunch . " for now , though , consumers look like the biggest winners . " there'll be a lot of goods available for low prices for christmas , " predicts mr. abramson . saatchi & saatchi is in the midst of trying to sell off most of its consulting business , but some securities analysts say the sales price may well fall below the company's initial expectations . in june , when london - based saatchi first announced its plans to sell the consulting business , it told analysts the sale should bring in # million to # million ( million to million ) . but analysts have said the figure will be much closer to the lower end of the spectrum , and now some have cut their estimates , saying it's even possible the figure could go below # million . meanwhile , although saatchi hoped to find a single buyer for its various consulting operations , it hasn't had any luck and now must sell the business piecemeal . some analysts are also getting edgy because the company indicated that it might announce some sales by the end of its fiscal year , sept. , a goal which now seems unlikely to be met . still , saatchi continues to say it will announce the bulk of the sales by the end of the calendar year . mr. schwarzman said there are " a large number of potential purchasers for various units . " a saatchi spokesman added , " under no circumstances do we feel compelled to sell these companies . if we don't get the right price , we won't sell . " " are they not being disappointed a little prematurely ? it's only september , " the spokesman said . " we're looking to the end of the calendar year to be able to announce these deals , and i don't think we are far away from that . " saatchi paid about # million to acquire its stable of consulting firms , and most analysts interviewed believe it will make that money back , and perhaps a bit more . yet several aren't as optimistic about the price as they were just a few months ago . brian sturgess of london - based barclay de zoete wedd also slightly lowered his expectations , from as high as # million to " # million max . " " the nearer saatchi gets to december , the less likely they are to get a good price , " mr. sturgess said . " a potential buyer knows that saatchi has to sell { the consulting businesses } separately and knows he can put pressure on saatchi on price . a desperate seller never gets the best price . " another hitch , according to mr. wallach , is the recent weakness of the junk bond market , which in turn is cooling the market for any sort of leveraged acquisition . " people are reassessing the transaction values " for all kinds of acquisitions , he said . so far , the analysts' changing estimates haven't affected their and earnings forecasts . but both jim dougherty , an analyst with county natwest securities , and emma hill , of wertheim & co. , said that if the sales are delayed too long , it will cut into estimates . mr. dougherty currently is looking for pretax earnings of # million , or pence a share , including # million of interest income on the proceeds of the sale . that estimate assumes , however , " that the business would have been sold fairly early in the year " for net proceeds of # million , he said . but industry executives said marsh & mclennan has expressed interest in the cleveland consulting unit , and mcgraw - hill , alexander proudfoot , and dun & bradstreet have made some inquiries . those firms either couldn't be reached or declined to comment . one executive familiar with the situation said a price is on the table for one of saatchi's consulting companies , and discussions are getting close on two others . several of the consulting firms , meanwhile , are trying to put together management buy - outs , people familiar with the discussions said . they said saatchi's largest consulting unit , hay group , was attracting less interest than some of the smaller companies because of its size and some financial problems at the unit . hay is one of the companies that may end up in a management buy - out , the people said . another firm trying to put together a buy - out is gartner group , a computer consulting firm , said executives close to the situation . but they said gartner management would offer less than the approximately million saatchi paid for the consultant , while saatchi hopes to command a premium for the firm , which has attracted a fair amount of interest . officials of the consulting firms either declined to comment or couldn't be reached . j.p. morgan picks backer . backer spielvogel bates worldwide yesterday picked up j.p. morgan's million world - wide ad account . j.p. morgan , the new york - based parent of morgan guaranty trust , began the search for an ad agency when its former shop , the now - defunct doyle graf raj , crumbled in june . most of doyle graf's other clients , including swissair , kobrand and haagen - dazs , have already reassigned their accounts to new agencies . backer spielvogel , a unit of saatchi & saatchi , will develop campaigns for j.p. morgan's corporate and product advertising and its private banking business . morgan saw many agencies before narrowing the competition to backer spielvogel and two other new york shops , della femina mcnamee wcrs and tbwa advertising . ad notes ... . the account had previously been handled by wells , rich , greene , new york. . . . white castle system , chicago , awarded its million restaurant account to gunder & associates , columbus , ohio . lord , sullivan & yoder , columbus , previously handled the account . the additional assignment brings to about million the white castle ad business at gunder. . . . j.i. case , racine , wis. , awarded its million construction equipment division account to wpp group's j. walter thompson unit , detroit . the tenneco unit's account had previously been serviced by bozell , chicago . investigation : meineke discount muffler shops , charlotte , n.c. , has pulled tv ads in the new york area touting its low prices after the city's department of consumer affairs informed meineke of its intent to file suit for deceptive advertising . a spokesman for the agency said it visited meineke shops in new york and found that none of them fixed mufflers on city vehicles for the prices advertised ( " to " ) . the average price , the department said , was . david j. kaufmann , meineke's outside counsel , said the company stands by its ad slogan . meineke has admitted no guilt , he said , adding the agency has refused to show the company its data . " i don't believe their numbers , " he said . no suit has been filed , and the two sides are expected to discuss the charges in the near future . polo/ralph lauren , a wells rich client for the past three years , left the agency friday . ferranti international signal plc's chairman said he is discussing a possible merger or alliance with two suitors as one way to resolve the financial crisis at britain's third - biggest defense electronics contractor . in an interview last night , sir derek alun - jones said , " we have a few discussions going " with one british and one continental european suitor . he declined to name the potential allies , but said a partnership with either of them " makes a good deal of business sense . " either company , he said , might inject needed capital into ferranti in exchange for a shareholding whose size has yet to be determined . sir derek's comments suggest a resolution of ferranti's - day - old crisis may be near . on sept. , the company stunned investors and defense officials -- who regard ferranti as a linchpin supplier of britain's electronic warfare arsenal -- with a stock - trading suspension and news that its financial accounts may have overstated profits and assets . since then , ferranti has said it is examining possible accounting fraud at a lancaster , pa. , company , international signal & control group plc , with which ferranti merged last year . because ferranti subsequently consolidated those inflated figures in its own financial statements , he said , " we are going to end up with a hole in our net worth " as great as # million ( million ) to # million . that's about half the company's reported net worth of # million as of last march . james guerin , the former head of international signal , issued his first public comments since the scandal erupted last week . he didn't respond to ferranti's allegations of fraud , but attacked what he called " inflammatory and blatantly incorrect " news reports about activities at his former company . sir derek emphasized that the difference in net worth is on paper only and doesn't represent any immediate drain on the company's cash flow . he said it doesn't appear any cash was drained out of the company through embezzlement or illegal kickbacks . still , he acknowledged , the company is in talks with its bankers to ensure they don't cut back ferranti's credit lines as a result of the reduced net worth . another option , he said , is to raise cash by selling ferranti assets . but london financial analysts believe ferranti has little choice but to arrange a speedy merger . " they don't seem to be in a strong { bargaining } position , " said london - based analyst michael armitage of morgan stanley international . ferranti shareholders " seem to be screaming for blood . " the list of potential merger candidates is long . front - runners , london analysts believe , include british aerospace plc , the nation's largest defense contractor , and the u.k.'s dowty group plc , a rapidly growing defense - electronics supplier . abroad , candidates favored by analysts includee france's thomson sa and west germany's daimler - benz ag . but thomson , controlled by the french government , would have difficulty shepherding so risky a deal as a ferranti merger through tightfisted french finance ministry officials . and daimler - benz has previously denied any talks with ferranti . ferranti's problems are further complicated by the fact that there is a sudden glut of british defense businesses up for sale this year . thorn - emi plc and racal electronics plc are also seeking buyers for their defense - electronics businesses . the stock market stumbled after getting off to a strong start and closed mixed in lackluster trading . bargain - hunting and futures - related program buying lifted prices at the outset , but the rise proved short - lived as concerns about this week's economic reports and the potential for further losses in stocks weighed on investors . selected blue - chip issues attracted buying interest , however , and the dow jones industrial average stayed in positive territory throughout the entire session . the average , which peaked with a gain of more than points , added to . broader market averages were little changed . standard & poor's - stock index went up to , the dow jones equity market index dipped to and the new york stock exchange composite index eased to . activity was fairly brisk at the opening as hopes for a recovery from last week's string of five consecutive losses in the industrial average led some investors into the market . program buying related to stock - index arbitrage then surfaced shortly after a.m. est and carried prices to their session highs . " people are sitting on their hands , " said bill langevin , manager of institutional trading at morgan keegan & co. , memphis , tenn . just shares changed hands on the new york stock exchange , compared with million friday and million last monday . declining stocks led advancers on the big board , to . traders attributed the lackluster activity in part to anticipation of the first pieces of economic data for october : a monthly survey of corporate purchasing managers , due tomorrow , and the employment report , set for friday . also , a number of analysts believe stocks could fall to the vicinity of their lows during the market's mid - october sell - off before posting any sustainable gains . the industrial average hit bottom near the level on both oct. and oct. . the market has begun a process of " trying to find a floor " after its fall , said william m. lefevre , a market strategist at advest inc. , hartford , conn . he added that the floor could prove to be well above the recent price lows , depending on whether the economic data ease concerns about slower growth . usa today reported that an unknown party -- possibly pennzoil -- acting on its own or with a partner holds between and of the company's common shares . other strong performers among blue - chip issues included procter & gamble , which went up / to / ; aluminum co. of america , up to / , and primerica , up / to / . also , philip morris gained / to / on million shares . ual corp. moved up to on reports that los angeles investor marvin davis has asked united airlines unions if they're interested in cooperating with him in a new bid for ual . but neither the pilots nor the machinists appear interested , and mr. davis is barred from making a new bid under terms of an agreement he made with ual in september , unless ual accepts an offer below a share . international business machines fell / to / as million shares changed hands . unisys went down to / on million shares and hewlett - packard skidded / to , but digital equipment rose / to / and compaq computer added to / . texas instruments , which re - entered the personal computer market by introducing three portable models , added / to / . the utility carries an dividend yield and goes ex - dividend today . crossland savings tumbled / to / in the wake of its management's recommendation to suspend dividends , because of concerns that it may not meet capital requirements under new federal regulations . the proposed criteria would bar crossland from including its million of preferred stock as so - called " core capital . " american savings bank , which could face a similar problem with the new capital criteria , dropped / to / . the company had million in preferred stock outstanding as of june . meanwhile , the savings - and - loan sector fared better than any other dow jones industry group . h.f. ahmanson rose / to / , great western financial gained / to / , golden west financial added / to / and calfed went up / to / . battle mountain gold , which reported that third - quarter earnings fell from a year ago , lost / to / . other precious - metals stocks finished mixed after rallying late last week ; homestake mining went down / to / , newmont gold added / to / and asa ltd. slid / to / . the company said the sale was " on track " to close by today . nashua jumped / to / despite taking steps to ward off reiss & co. , a dutch company that is seeking u.s. antitrust clearance to acquire as much as of its common stock . nashua expanded a stock - repurchase program by one million common shares -- about of its shares outstanding -- and toughened a takeover defense . unum gained to . the company reported that third - quarter earnings were higher than a year earlier , a sharper rise than analysts had expected . telecom usa skidded to / . its earnings from operations for the third quarter were above the year - ago level , but fell short of analysts' forecasts . the american stock exchange market value index fell to . volume totaled shares . first federal bancorp lost / to / . james clarkson retired as chairman , president and chief executive officer of the pontiac , mich. - based bank holding company , which said it is reviewing certain unspecified actions mr. clarkson took while in office . the oakland athletics' four - game sweep over the san francisco giants in the world series may widen already - sizable losses that the abc network will incur on the current , final year of its baseball contract . the series , disrupted by a devastating earthquake and diminished in national interest because both teams came from the san francisco bay area , is likely to end up as the lowest - rated series of this decade and probably since the event has been broadcast . the first three games were seen by an average of only of u.s. homes , a sharp decline from the rating for last year's series . a final ratings tally from a.c. nielsen co. is due today . the sweep by the a's , whose pitchers and home - run hitters dominated the injury - prone giants , will only make things worse for abc , owned by capital cities/abc inc . the network had been expected to have losses of as much as million on baseball this year . it isn't clear how much those losses may widen because of the short series . abc had based its budget for baseball on a six - game series . a network spokesman wouldn't comment , and abc sports officials declined to be interviewed . but some industry executives said abc , in anticipation of a four - game sweep , limited its losses by jacking up the number of commercials it aired in the third and fourth games . a world series telecast typically carries - second commercials , but by the fourth game abc was cramming in to ads to generate extra revenue . abc's baseball experience may be of interest to cbs inc. , which next season takes over the broadcasting of all baseball playoffs in a four - year television contract priced at billion . cbs sports president neal pilson has conceded only that cbs will have a loss in the first year . but other industry executives contend the losses could reach million over four years and could go even higher if the world series end in four - game romps . the series typically is among the highest - rated sports events on television . abc's hurdle was even higher this year with two teams from the same area . the series got off to a lukewarm start oct. with a rating ; the next night it drew of homes . then came the earthquake and a damaging delay of days . some people had hoped abc's ratings would go up because of the intense focus on the event in the aftermath of the earthquake . an analyst's opinion to that effect even sent capital cities/abc shares soaring two weeks ago . but interest instead decreased . the third game , last friday night , drew a disappointing rating . on june , a major part of our trade deficit went poof] no figure juggling ; no witchcraft ; just vastly improved recording of some of our exports . the result ? the commerce department found that u.s. exports in , net of imports , were understated by billion a year and understated at the annualized rate of billion in the first quarter of . more than half of the " newly found " net exports were from just a few service - sector categories . some of the biggest service - industry exporters -- american financial - service companies , for example -- have yet to be fully included in our export statistics . nearly years ago , representatives of service - sector companies worked out a plan with the commerce department to improve the data on service - sector exports . both groups believed that tens of billions of dollars of service exports -- such as inbound tourism ; legal , accounting and other professional services furnished to foreigners ; financial , engineering and construction services ; and the like -- were not being counted as exports . the monthly " trade deficit " figure is limited to traditional merchandise trade : manufactured goods and raw materials . in the quarterly balance - of - payments report , those merchandise trade figures are merged with statistics on exports and imports of services , as well as returns on investments abroad by americans and returns on foreign investments in the u.s . the first three major areas of the service sector to be revamped were expenditures by foreign students in the u.s. ( net after expenditures by americans studying abroad ) , some exports by professional firms ( a law firm billing a german client for services rendered in watching legislation in washington is as much an export as shipment of an american jet engine ) , and improved data from travel and tourism . in just these three areas , the commerce department found billion more exports than previously reported and billion more imports , with the net result that the u.s. service surplus in increased by billion , to billion . combined with recalculations and revisions in other trade areas , the value of u.s. net exports that had not previously been recorded was about billion a year . that means that the u.s. trade deficit was running closer to billion than to billion in , and billion ( annualized ) rather than billion in the first quarter of . the materially smaller trade deficit may have been already discounted in the market . what does this mean for trade policy ? too early to tell , but a trade deficit that is significantly smaller than we imagined does suggest a review of our trade posture . it does not relieve the need for our market - opening efforts for both goods and services , but it does suggest that it is our exports of services , and not just borrowing , that is financing our imports of goods . mr. freeman is an executive vice president of american express . japanese companies have long been accused of sacrificing profit to boost sales . but fujitsu ltd. has taken that practice to a new extreme . japan's biggest computer maker last week undercut seven competitors to win a contract to design a mapping system for the city of hiroshima's waterworks . its bid : one yen , or less than a u.s. penny . the bid created such a furor that fujitsu said it is now offering to withdraw from the project . " from a common - sense viewpoint , it was not socially acceptable , " a fujitsu spokeswoman said yesterday . hiroshima city officials couldn't be reached to find out whether they would drop fujitsu's bid . fujitsu said it issued the low bid because it wanted a foot in the door of a potentially lucrative market . " we desperately wanted the contract because we want experience in the field , " the fujitsu spokeswoman said . " we expect a big market in the future , so in the long term it will be profitable . it's a kind of an investment . " hiroshima's waterworks bureau said the municipal government had budgeted about million yen ( ) for the project . " i understand the firm's enthusiasm in getting the deal , but such a large company would have been better off showing a little more discretion . " indeed , fujitsu officials admitted they may have been a little overzealous . the fujitsu spokeswoman said headquarter officials didn't approve the bid in advance and will take measures so this kind of thing doesn't happen in the future . " it's contrary to common sense , " she added . specifically , fujitsu won the right to design the specifications for a computerized system that will show water lines throughout the city . the system could be used in a fire or earthquake to locate problems , among other things . a waterworks official said fujitsu will have to design the system so it would be compatible with other makers' equipment . but industry officials expressed concern that the initial project might give fujitsu an edge in winning more lucrative contracts later . fujitsu said it hopes the hiroshima contract will help it secure pacts with other municipalities . japanese local governments are expected to invest heavily in computer systems over the next few years , and many companies expect that field to provide substantial revenue . " we can expect a hundreds - of - billions - of - yen market . " no foreign companies bid on the hiroshima project , according to the bureau . but the japanese practice of deep discounting often is cited by americans as a classic barrier to entry in japan's market . earlier this year , the u.s. complained that japan's supercomputer makers were effectively closing out foreign competitors by slashing prices as much as for universities . fujitsu wasn't the only company willing to sacrifice profit on the project . three competitors bid between yen and yen , according to the hiroshima government office . other bids ranged from about million yen to million yen . it was some entrepreneur's big opportunity : massachusetts institute of technology scientists already had worked on the problem for years . the researchers had spent over million before results of the first animal tests emerged . and now , they had developed a method to inhibit cataract formation in eyes . at this point , such a project often falters . commercializing such university research frequently proves slow and frustrating , and opportunities are missed . but in this case , a team of special mit licensing executives quickly helped round up investors and encouraged formation of a new company , oculon inc. , based in seattle , to make its fortune off the research . mit and its scientists working on the project all get a share of the action . these days , many universities and nonprofit research institutions are scrambling -- often with limited success -- to commercialize their research . but in the past three years alone , mit has helped professors and others start over companies , all aiming to turn the fruits of mit research into cash . mit gets results these days because it can " understand the demands of business and the investment community and link them with the needs of scientists , " says john clark , a scientist and one of the founders of oculon . for starters , mit invests heavily in patents -- sometimes over to get world - wide coverage . it helps its own scientists form new companies and recruit investors . and it routinely acts as a " high - tech yenta " to introduce patents and research to potential investors , an official says . the start - up companies receive a license to use mit's technology and agree to a timetable for developing it ; in return , the institute gets a small stake and royalties from sales . in the oculon case , the institute first filed several patents . then its licensing executives began to explore a business use for the results . with all the work that already had been done , " we began to look for the best way to transfer that technology , " says john preston , head of the mit licensing office . while mr. clark and physics professor george benedek , an early researcher on the project , negotiated million in financing from investors , the licensing office drafted an agreement that would give mit a stake in the company and a share of future sales . " mit was extremely valuable in contacting venture - capital sources . they knew who to contact and who would be interested , " mr. clark says . " they also helped us educate investors about the long - term nature of the project and what the potential obstacles could be . " it wasn't always this way . in the early s , mit scientists complained that the university's licensing operation was staffed by bureaucratic lawyers who often became obstacles to good deals . back in , for example , when computer technologist daniel hillis wanted the university to file patents for his designs for a sophisticated computer he had developed at mit , the licensing office balked . it was so indecisive , mr. hillis says , that he filed the patents himself and launched his thinking machines corp. with about million from private investors . the institute gave the licensing group broad guidelines and autonomy to run the licensing operations . today , the office of six professionals handles six to eight times as many start - ups as in the early s , mr. preston says . as part of its new approach , the licensing group re - established relations with mr. hillis and formally licensed the technology to him . in return , mit has a small stake and a share of royalties of thinking machines . last year , the computer company had revenue of more than million . " the one reason they've been so successful is because they concentrate on ways to get the technology out , " says entrepreneur steven chubb , president of matritech inc. , a cambridge , mass. , start - up involved with new ways to detect cancer . in matritech's case , mit even helped the company find management . mit biologist sheldon penman and former mit researcher edward fey had developed matritech's basic technology , which uses antibodies to detect proteins within cells . mr. chubb approached mit for a license to develop the technology in a new venture . in most mit projects that develop into start - ups , scientists such as mr. penman and mr. fey don't actually run the company , says lita nelson , an mit licensing official . in fact , she says , university policy prohibits faculty members from being line officers in any company . most of the scientists , however , continue to work with the companies as consultants , receive royalties and own small stakes as well . in some instances , mit also combines its technology with that of others to form new companies . take the launch of enzytech inc. , which uses enzymes and polymers in food additives and drug delivery . the initial research was conducted simultaneously by boston's children's hospital and mit . in , the two institutions licensed their technologies to a start - up formed expressly for commercialization . and venture capitalists put in over million to keep the company going . many venture capitalists say the projects at mit are much more " state - of - the - market " than at other universities . says new york venture capitalist fred nazem , " it's a good place to get new technology . " most contemporary movie dialogue isn't worth listening to , especially action - picture talk . what seems to matter is the blam - blam , or mel gibson's grin -- both of which , i admit , have an appeal . but a proficient script still makes an astonishing difference in a movie's pleasure quotient , and richard price's screenplay makes " sea of love " a pleasurable experience indeed . yes , it's another detective story featuring a middle - aged cop who drinks too much and whose wife has left him . yes , he's little and his buddy is big ( a variation on the white cop/black cop , old cop/young cop theme ) . yes , he falls for a sensual woman who may or may not be the killer in the case he's working on . what's new -- or , rather , old - - is the way the movie captures the emotional chaos and absurdity that should always be present in these stock situations but that almost never are anymore . the " sea of love " characters are tricky , human . and mr. price , who has written four novels , has given them such good talk . this isn't surprising considering the promise in his first two produced screenplays , " the color of money " and the scorsese segment of " new york stories . " the story's good , too , with enough convincing plot twists to keep even a jaded connoisseur of suspense off - guard . al pacino plays frank keller , the cop who won't take advantage of his chance to retire after years on the force . it's a role that can be added to the list of pacino's great new york characters . and it's terrific to see this daring actor holding the screen again , having recovered from his catastrophic participation in " revolution . " his keller's no serpico , driven by virtue to near - madness . like keller , pacino's older , calmer . the wildness around his hollow black eyes has softened . now he just looks weary , slowed down by booze and the extra weight he's carrying on his bantam frame . murder doesn't interest him much , but he can't help getting interested in a serial killer who seems to choose her victims from the personal ads in a slick city weekly . he and his partner , the ebullient john goodman ( who's given room to do some nice comic riffs ) , place their own personal ad , hoping to lure the killer . there's a remarkable lack of glibness in the singles - bar scene , where keller chats up his " dates " just long enough to collect their fingerprints on their wineglasses . mr. pacino gets the empathy and misery just right , as he picks up and quickly drops first an older woman who thinks she's getting the brush , then an acid - tongued harridan . then he meets helen ( ellen barkin ) , a foxy single mother keller swiftly falls for . so did i ; ms. barkin's so perfectly cast , so good at keeping you guessing . is helen just another pretty woman trying to find a partner and a father for her child , or is she a vicious man - hating murderer ? she doesn't slip . it's partly her face that keeps you off - guard . everything is slightly crooked . so one minute she looks like one tough cookie ; turn her a couple of degrees and the same features seem utterly vulnerable . at all times she's highly erotic . it's true that ms. barkin is too often remembered for her sensuality , if she's remembered at all . but maybe this picture will get her a bigger audience than just those of us who came to appreciate her talent in " diner , " " the big easy , " " desert bloom , " " enormous changes at the last minute " and " down by law . " by the time " in country " was over , there was nothing i could say i liked about the mysteriously sought - after young british actress , emily lloyd . i was even starting to hate her navel. ( director norman jewison insists on repeated shots of emily jogging with his lens pointed at her exposed bellybutton. ) . this movie , based on bobbie ann mason's poignant tales of backwoods kentuckians coming to terms with the vietnam war , has a worthy premise : how does a young woman come to peace with the war that killed her father before she was born , a war that no one really wants to talk about ? here he abandoned entertainment for sanctimony almost completely when he miscast ms. lloyd as the person who must carry the movie and accepted the dreary , speechifying script by frank pierson and cynthia cidre . ms. lloyd spends most of the movie arching her eyebrows -- apparently her way of expressing interest or great emotion -- and spitting her dialogue , in a southern accent that's only minimally more believable than her brooklynese in " cookie , " the other movie she's currently appearing in . she keeps pestering the other main character -- her uncle emmett ( bruce willis ) , a rather shell - shocked vietnam veteran -- about what happened " over there . " understandably , he doesn't want to cough up those awful experiences . but ms. lloyd's insistent question gets so irritating that i found myself silently begging emmett to tell her already , so we could all leave . many of the subsidiary characters are well played but given short shrift , especially kevin anderson as the girl's boyfriend . yet audiences may feel compelled to weep at the ending , a cheap , tear - wringing scene that's about as effective an emotional manipulation as the tv commercials for long - distance telephone calls . video tip : " sea of love " isn't the first movie to entangle its hero with a lover who might be a killer . in alfred hitchcock's " suspicion , " joan fontaine plays the mousy wife who becomes convinced her elusive husband ( cary grant ) is trying to murder her . " the jagged edge , " a popular release , had glenn close playing a defense attorney who falls for her client ( jeff bridges ) , a man accused of murdering his wife . let's just say that jeff bridges isn't cary grant . a top mergers and acquisitions adviser at citicorp resigned , citing his frustrations with organizational changes and the bank's reluctance to advise parties making hostile offers . gordon f. wolf , who joined citibank's mergers and acquisitions unit / years ago , said he quit to join golodetz group , a new york trading and finance company with billion in assets , to set up a leveraged buy - out operation . mr. wolf is the second person to leave the citibank unit in recent months . in june , robert h. whitby , who headed the mergers and acquisitions unit , resigned . mr. wolf , , said he resigned after several advisory assignments ran into difficulties within citibank . " we had three or four situations where we were advising clients -- not raiders , but legitimate business owners -- who had made offers where the situation could become hostile . these were situations where the targets were good companies with lousy management . " mr. wolf added : " this was controversial . inside citicorp , there is a great reluctance to advise on the hostile side , even though they find it okay to finance hostile offers by marvin davis , carl icahn and others . there was a feeling that we were going after a potential client , and over there everybody is a potential client . mr. wolf declined to identify the specific situations . asked about mr. wolf's departure , j. robert clement , head of mergers and acquisitions at citicorp , said : " in the u.s. , there have been no resignations which were regretted . " mr. clement added , " there is no question that we are committed to mergers and acquisitions . this business is increasingly complex . the only way to build it is global teamwork . we have two strengths in this business , the size of our balance sheet and our global network . if we use those effectively , we can truly compete with the leaders in this business . we are in the process of building that organization . " mr. wolf also chafed at organizational changes that required mergers and acquisitions advisers to work with clients in cooperation with account officers . " that was terrible , " he said . " i was disappointed in the last year by the total performance of the specialized finance group , " he added , referring to a group that also included citibank's leveraged buy - out unit , its venture capital operation and structured finance unit . " the synergies just weren't there . mergers and acquisitions work is driven by individuals , not organizations . " east berlin demanded that hungary halt a mass migration of refugees . as thousands of east germans crowded resettlement camps in west germany , the communist government of east germany issued a sharp formal protest to warsaw pact ally hungary for permitting this week's mass exodus . it said budapest had " unilaterally suspended " agreements regulating travel across borders . the move came amid indications that east berlin had begun clamping down on trips to hungary . more than east germans have fled to the west since early monday . officials in budapest said thousands of refugees continued arriving in hungary , and authorities expected the flood of emigres to exceed . poland installed the east bloc's only non - communist government . lawmakers in warsaw approved prime minister mazowiecki's cabinet after the solidarity official urged the parliament to change almost every aspect of polish life . the vote was in favor of mazowiecki's - member cabinet , none against and abstentions . apart from the prime minister , who called for immediate action to improve poland's economy , there are solidarity representatives . the communists have four posts , including the defense and interior ministries . u.s. anti - drug officials said four colombian groups control wholesale cocaine trafficking in the u.s. and are moving toward global operations . separately , portions of bush's anti - drug initiative won backing within a senate panel , but divisions remain over what share of spending can come from defense cuts . bush addressed millions of schoolchildren , saying that refusing drugs " won't make you a nerd . " the president , in the televised appeal , also urged youngsters to help others stay away from narcotics . bush met at the white house with yeltsin and told the soviet official that the u.s. enjoys a " very positive relationship " with gorbachev . yeltsin , an outspoken critic of some of the soviet leader's policies , urged bush to help " rescue " gorbachev's political and economic restructuring program . yeltsin is on a two - week tour of the u.s . the house approved a statute designed to circumvent a supreme court ruling and restore criminal penalties for burning the u.s. flag as a political protest . the bill was passed - . action on a constitutional amendment barring flag desecration is expected this year . ex - u.s. attorney giuliani easily won the gop primary . in fort worth , texas , democrat geren won the race to succeed former house speaker wright . police in namibia said a gunman assassinated anton lubowski , the only white to hold a leadership post in the south - west african people's organization guerrilla movement . the - year - old lubowski , a lawyer , had been considered as a possible choice for justice minister when namibia becomes independent from south africa next year . the house ethics committee voted to conduct a preliminary inquiry of democratic rep. frank of massachusetts , who has acknowledged employing a male prostitute as a personal aide after initially hiring him for sex . frank welcomed the panel's action and pledged to " cooperate fully . " senate panels rejected any new procurement funding for the navy's trident d - missile . the appropriations subcommittees also cut all of bush's request to continue development of a national aerospace plane in fiscal . the smithsonian institution agreed to return the remains of native americans to their tribes for burial . the accord reverses a longstanding museum policy that made return of indian remains rare . the white house plans to propose to congress that the u.s. accept soviet refugees next year , plus more from eastern europe , a u.s. official said . overall , refugees would be admitted , an increase of less than from this year . salvadoran peace talks opened in mexico city , the first such meeting between the rebels and president cristiani's government . officials expressed doubt that the two sides could end the - year - old civil war . tens of thousands of people staged a rally in hong kong to mark the th day of china's suppression of the pro - democracy student movement . several leaders of the protests last spring who escaped beijing's crackdown addressed the crowd . similar rallies were held in london , taiwan and macao . these are lean times on the tokyo stock exchange , but many stock analysts here couldn't be happier . for while share turnover and sales have shrunk recently , analysts are ascendant . " research is suddenly the order of the day , " boasts paul heaton , a banking and financial analyst at w.i. carr ( overseas ) ltd . and many of the top analysts work for foreign firms , which say research is boosting their business . nowadays , instead of just pouring money into big - name stocks and riding the world's biggest market , japan's major institutional investors are scouting for sound , smaller stocks that promise to outperform the now - sluggish mainstays . finding such stocks in an equity market bursting with thousands of issues takes some careful bloodhound work . and that's where analysts come in . " we're in a fundamental market , " says an analyst at daiwa securities co . by looking at the growth prospects and explaining the business of many of japan's less - well - known companies , analysts can bring a stock to the attention of investors . this might seem mundane to american investors , but it's a bit of a revelation in tokyo . on july , salomon brothers asia inc. issued an internal buy recommendation to its brokers on a small pharmaceutical company with strong growth prospects , hokuriku seiyaku co. shortly before the recommendation came out , hokuriku's share price was steady at about yen ( ) . by sept. , it had rocketed to yen . salomon doesn't claim all the credit for the rise , but the firm's head of research , jeffrey d. hanna , admits that bringing a company's virtues to light can help . " you have to have a story to tell , " he says . a key factor behind investors' mounting interest in research is the shrinking volume on the stock exchange . time was when the sheer weight of money in the market was enough to ensure higher stock prices . the major japanese brokerage houses would simply channel the heavy flows of retail and institutional money into the big stocks they wanted to promote , and the key market indexes would rise . " for the past three years , liquidity was so big you didn't have to think about the stocks themselves , " says yoichiro asakura , a fund manager at mitsui mutual life insurance co . it's not the first time analysts have been in vogue here . five years ago , during a long slowdown in the market , analysts enjoyed modest attention but were overshadowed ultimately by the stock market's ensuing powerful rally . now , their renaissance seems to have arrived . in april , nihon keizai shimbun , japan's biggest daily business newspaper , printed its first - ever rating of top analysts . although japan's major brokerage houses still dominate turnover in the country's financial markets , nearly half of the top analysts and economists included in the rating worked for foreign firms . and many of those analysts were at the top of their categories . while japanese brokerages provide comprehensive analysis of many companies , foreign firms are skipping ahead with research tailored to investors who are doing computer - aided or sector - specific investing . the firms' claim that research is boosting their business is apparently supported by statistics . in august , foreign firms accounted for a record of all turnover on the tokyo stock exchange . the defendants convicted last month of racketeering in a case involving unlawful trading by princeton/newport l.p. moved to have their verdict overturned . attorneys for the six defendants argued in a memorandum submitted to u.s. district court judge robert l. carter yesterday that the tax trades for which they were convicted were legal and that the racketeering statute under which they were charged is " unconstitutionally vague . " meanwhile , prosecutors in the case filed a separate memorandum seeking to force the convicted defendants to forfeit assets totaling million . a federal jury last month decided that the six defendants must forfeit assets totaling million , far less than the government had sought . the defendants in the first - ever racketeering case involving officials of a securities firm were convicted on all but one of felony counts involving a variety of acts of conspiracy , racketeering , and securities , wire and mail fraud . the defendants in the case are james sutton regan , jack z. rabinowitz , charles m. zarzecki , paul a. berkman and steven b. smotrich , all of whom are former officials of princeton/newport , and bruce lee newberg , a former trader for drexel burnham lambert inc. princeton/newport , which has announced its liquidation , is an investment firm based in princeton , n.j. , and newport beach , calif . lawyers for all six defendants asked the judge to order an acquittal or , alternatively , a new trial . the government had alleged that princeton/newport arranged to sell securities at a loss and then repurchase them later at the same or higher prices ; such a practice is known as stock parking . in this case , the government said , the aim was to claim unlawful tax losses . defense lawyers argued in their - page memorandum that there was a long line of cases allowing tax losses in cases that were almost the same as the one against the princeton/newport defendants . the lawyers also argued that , contrary to the government's allegation that the deductions princeton/newport claimed as losses were " false , ficticious and bogus , " they were legal under provisions of the internal revenue service code . since they received no such warning , the attorneys said , the defendants should be acquitted . in an argument that defense lawyers say may be attempted in a number of upcoming cases , the princeton/newport attorneys contended that the rico statute itself was vague and thus engendered " uncertainty and confusion . " the lawyers cited a recent u.s. supreme court case in which four justices , in a concurring opinion written by justice antonin scalia , invited a constitutional challenge to the rico statute on the grounds of vagueness . in that opinion , issued earlier this year in h.j. inc. v . northwestern bell telephone co. , justice scalia wrote that the statute was vague and , perhaps , poorly drafted . defense lawyers have said that the supreme court is likely soon to accept a challenge to the rico statute . but many defense lawyers say that the supreme court is more likely to agree to hear such a challenge in a civil case , rather than a criminal matter such as the case against the princeton/newport defendants . this , the government said , amounted to million . the u.s. justice department approved the government's forfeiture motion . prosecutors said jurors were wrong when they required the defendants to forfeit only a portion of their interests in princeton/newport and hadn't followed judge carter's instructions . the government's forfeiture motion applied to all of the defendants except for mr. newberg . mr. newberg , the government said , received no salary from and had no partnership interest in the princeton/newport enterprise . jurors imposed in forfeitures on mr. newberg . judge carter has already indicated that he was inclined to overrule the jury and award the government the full amount it has requested in forfeitures . the three - year - old headquarters of glass - making giant vitro s.a. is a piece of old mexico . wrought - iron gates and tree - sized cactuses surround yellow - brick offices built in the style of an th century hacienda . but the old - fashioned ambiance has little to do with vitro executives' nostalgia . " we're always looking for foreign joint venture partners , and this is the mexico they want to see when they visit , " says vitro's executive chairman , adrian sada , raising his arms to the spanish - style vaulted brick ceiling of his board room . mr. sada , a - year - old scion of the most storied family in mexican industry , is a key architect of a new deal that would be the biggest step yet toward establishing vitro as a major international player . he's heading vitro's tender offer of a share , or million , to buy anchor glass container corp. , tampa , fla . the bid represents the first time a mexican company has attempted a hostile takeover of a u.s. concern . vitro also said that about million anchor shares had already been tendered . later that day , anchor's board again recommended that stockholders reject vitro's offer . it said anchor is talking to several other companies about a " possible transaction . " despite the opposition , mr. sada insists that with mexico's recent opening to imports and foreign investment , vitro has no choice but to see the bid through . " the country and the concept of industry are changing , " mr. sada maintains says . " we have to be bigger , more efficient and more international . " others in monterrey's close - knit industrial community agree . " vitro recognizes that mexican companies must now choose between being either a giant or a subsidiary of a giant , " says lorenzo zambrano , director general of cementos mexicanos , mexico's leading cement producers . cementos has also chosen to beef up , announcing this week a million purchase of a cement company in houston . " everyone is wishing adrian and vitro the best , because we all know that's the way of the future , " says mr. zambrano , who is a distant relative of mr. sada . it's really not surprising that mexico's first cross - border hostile takeover would come out of monterrey and be crafted by a sada . and sadas have been in the thick of making monterrey the center of mexico's heavy industry since the s , when brothers - in - law francisco sada and isaac garza started a small brewery . the company grew vertically , producing glass for bottles , steel for caps and grain for brew . today , vitro not only makes bottles for beers such as carta blanca and corona , but also windshields for ford motor co. and fine crystal that sells in macy's and neiman marcus . lately , vitro has been seeking to expand capacity as a result of growing exports and increased demand at home caused by government price controls and a vibrant underground economy . four months ago , mr. sada was approached by friends who run closely held latchford glass co. , huntington park , calif. , about a possible purchase of anchor . " we thought maybe we would go to { anchor } with a friendly deal , " says mr. sada . lesson no. in doing business north of the border came when mr. sada consulted vitro's seasoned team of wall street advisers , which include lazard freres & co. and donaldson , lufkin & jenrette securities corp . " they said , ' try a tender offer , ' " says mr. sada . even if vitro gets control of anchor , it will face a formidable turnaround job . anchor had a loss of million in the second quarter , and the glass industry as a whole is strained by competition from plastic containers . " we think we can improve the product by modernizing the plant , " says federico sada , president of the containers division and adrian's younger brother . one of only a handful of mexican companies exporting technology , vitro plans to invest as much as million a year to overhaul anchor's facilities . vitro would also remove anchor's top managment in favor of latchford's . vitro's technological bent is a legacy of adrian sada sr. , an eminently practical engineer who remains the group's chairman . once , at a product presentation for vitro's refrigerator line , visitors were taken aback when the chairman rolled up his sleeves , opened a toolbox and repaired a faulty unit . " before mexico's economic problems , vitro was criticized as being too conservative , " adrian jr. says . " but by { taking on } less debt and sticking to our core business , we came out of the crisis in better shape . " although vitro was squeezed by a foreign debt that reached a peak of million in , the company never posted a loss and has reduced its indebtedness to just million . while his sons have been on the acquisition path , the elder mr. sada has been in bed recovering from a coronary bypass operation three weeks ago . " he really wants to come back to the office , but we tell him it's too soon , " federico sada says . dealmaking is more up adrian jr.'s alley anyway . after obtaining an m.b.a. from the university of pennsylvania's wharton school of finance , he went to work at banpais , a small bank owned by the vitro group . then , in , the mexican banking system was nationalized . adrian jr. went to work in vitro's corporate sector and has emerged as a rising star of the monterrey industrial scene . when sen. edward kennedy ( d. , mass. ) , whose family is revered in mexico , visited monterrey this year , adrian jr. was picked to host a dinner for the dignitary . during last year's presidential campaign , the younger mr. sada also entertained mexico's new president , carlos salinas de gortari , whose market - oriented reforms gave rise to vitro's historic bid . it is early morning on june in beijing , a moment of profound historic importance . tanks are rolling toward tiananmen square to clear the last of the democracy protesters . for hours , troops have been shooting their way through angry , unarmed mobs . hundreds , perhaps thousands , of civilians already lie dead . at this very moment , harrison e. salisbury , the intrepid former new york times reporter encamped in the beijing hotel overlooking tiananmen , is . . . asleep . " i half awoke , " he writes in his just - published account of the beijing massacre , " and said ' oh f ] ' and turned over . it was that gooey kind of sleep that paralyzes you . " mr. salisbury might well be praised for his candor . few reporters would admit to sleeping through a massive military assault taking place just outside their window . but the revelation does call into question the value of his insta - book , " tiananmen diary : thirteen days in june " ( little , brown , pages , ) . not only did mr. salisbury snooze through his subject's central event , but he was not even in china during the remarkable buildup to this summer's massacre : the poster writing , the huge demonstrations , the gorbachev visit fiasco . unfortunately , this offering provides few interesting insights into the tragedy , as mr. salisbury seems more concerned with reminding us of his own importance . in one especially memorable flourish , the author , who speaks no chinese , actually writes : " i think i know china as well as , if not better than , any member of the standing committee of the politburo . " but even he is not in a position to give us the full truth about the massacre . death tolls can't be verified , since bodies and official records quickly disappeared . nor can anyone be certain to what extent the student movement later was manipulated by forces loyal to the now - ousted communist party chief zhao ziyang . what we do know is that hundreds of thousands of people were moved to take to the streets in an unprecedented challenge to communist party rule . they called , for the most part , not for western - style democracy , but for a minimum list of human rights : a free press , a responsive government , an end to official graft . that's the big lie . it was obvious to observers actually present in beijing that the state could have derailed the movement effectively early on , most easily by giving in to some of the most basic demands . indeed , the party missed several chances to co - opt the movement and make it its own -- blowing the only opportunity it has had in years to make itself relevant . so why didn't the leaders resolve the standoff peacefully ? in mr. salisbury's postscript , by far the strongest part of his book , he argues that hard - liners , including deng xiaoping , wanted to stir up a riot to " justify " military suppression , thereby enabling them to launch a purge of liberals in government and academia . here , mr. salisbury is almost certainly on the mark . but while the whole truth of the affair may forever elude us , there were telling , unforgettable vignettes etched in the minds of those of us who witnessed the events firsthand or followed them in newspapers or tv broadcasts . there they found a young cook , weeping uncontrollably , unable to work . " i've been watching people die all night long , " he said . the foreigners consoled him , and he pulled himself together to prepare the morning's meal . mr. salisbury missed the drama . his diary entry : " breakfast now being served . . . . orange juice , coffee , and fried eggs . " on other occasions , while beijing is burning , mr. salisbury is fiddling around in a world of inconsequential detail . " rice was excellent . i spiced it up with a little soy sauce , " he informs us . on another occasion , we learn that his wife has a nice new sweater : " i bought a lovely pink cardigan for charlotte . " worse , the book is full of misspelled english and chinese names , and several incidents are misreported . true , this is meant to be a diary . but some writing is better off left buried in a desk drawer . if the tiananmen massacre was a tragedy for china's reforms , " tiananmen diary " is something of a tragedy for mr. salisbury . but somehow , in " tiananmen diary , " he never finds his touch . once a loyal follower of china's leaders , mr. salisbury , we learn , now reviles them . but even here , his self - absorption is distasteful . " to think , " he huffs , " i know the men who did this . " mr. ignatius is the journal's beijing correspondent . thursday , september , . 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 : / . the base rate on corporate loans at large u.s. money center commercial banks . federal funds : high , / low , / near closing bid , offered . reserves traded among commercial banks for overnight use in amounts of million or more . source : fulton prebon ( u.s.a. ) inc . discount rate : . the charge on loans to depository institutions by the new york federal reserve bank . call money : / to . the charge on loans to brokers on stock exchange collateral . commercial paper placed directly by general motors acceptance corp. : to days ; to days ; to days ; to days ; to days ; to days ; to days . commercial paper : high - grade unsecured notes sold through dealers by major corporations in multiples of : days ; days ; days . certificates of deposit : one month ; two months ; three months ; six months ; 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 million and more . the minimum unit is . typical rates in the secondary market : one month ; three months ; six months . negotiable , bank - backed business credit instruments typically financing an import order . london late eurodollars : to / one month ; to / two months ; to / three months ; to / four months ; to / five months ; to / six months . london interbank offered rates ( libor ) : one month ; three months ; six months ; / 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 ; germany ; japan ; switzerland ; britain . these rate indications aren't directly comparable ; lending practices vary widely by location . treasury bills : results of the tuesday , september , , auction of short - term u.s. government bills , sold at a discount from face value in units of to million : weeks ; weeks . federal home loan mortgage corp. ( freddie mac ) : posted yields on - year mortgage commitments for delivery within days. , standard conventional fixed - rate mortgages ; , rate capped one - year adjustable rate mortgages . source : telerate systems inc . federal national mortgage association ( fannie mae ) : posted yields on year mortgage commitments for delivery within days ( priced at par ) , standard conventional fixed - rate mortgages ; , / rate capped one - year adjustable rate mortgages . source : telerate systems inc . merrill lynch ready assets trust : . the government raised its estimate of american worker productivity in the second quarter to show a larger rebound from the first period , when the hourly output of workers declined . productivity outside the farm sector increased at an annual rate of in the latest period after declining at a rate in the first quarter , the labor department said . in a preliminary report last month the department put the second - quarter productivity increase at a rate . while the rise is still meager , it is also heartening . with the civilian unemployment rate at a low , growth in worker productivity is increasingly vital to the country's economic expansion , which has continued for nearly seven years . manufacturing productivity showed a particularly healthy gain -- a annual rate instead of the rate originally estimated -- which bodes well for american competitiveness abroad . nevertheless , the report contained some disturbing figures . the productivity of american businesses outside of the financial sector continued to slip in the second quarter , falling at a annual rate after plunging at a rate in the first quarter . this was the government's first estimate of productivity in that sector , which excludes such financial businesses as insurance companies , stock and commodity brokers and banks . hourly wages for workers outside the farm sector grew in the second quarter at a slightly faster rate than the department initially calculated : instead of . and that is far more rapid than the rate of growth in the first quarter . the escalation in labor costs means businesses may be inclined to raise their prices . at the same time , the wage increases weren't raising the living standards of american workers . after adjusting for inflation , wages actually fell at a annual rate . there was some slowing in the rise of labor costs per unit of production , however , but this figure still climbed at a hefty annual rate . that was less than the original second - quarter estimate of and below the rate of the first quarter . craig blanchette , macho athlete and olympic bronze medalist , is one of the latest stars of nike's " just do it " ad campaign . in gritty television commercials , he pumps iron , shoots baskets , and talks tough about working out . not until the last scene does the camera pull back to show that mr. blanchette is missing both legs . he won his medal in the exhibition sport of wheelchair racing , in which he holds two world records . nike tapped mr. blanchette for the campaign because " he's a great athlete , which ties in with our usual strategy . . . and he's a really motivating guy to be around , " says thomas clarke , nike's vice president of marketing . " the fact that he was handicapped was secondary . " nike will pour some of its estimated million to million fall ad budget into the blanchette commercial alone . the national organization on disability , a nonprofit group whose vice chairman is former reagan press secretary james brady , estimates that about other advertisers recently have featured disabled people in their general ad campaigns . levi strauss was one of the first , showing a blue jeans - clad paraplegic . more recently , mcdonald's ads have featured deaf teenagers and a paraplegic girl ; apple computer has aired a commercial showing disabled people using its computers ; and international business machines , citicorp , du pont and at&t , among others , have featured disabled people in their ads . in hollywood , media access office inc. , which acts as a liason between the disabled and the california entertainment business , says demand for handicapped actors -- although never strong -- is on the rise . " it's really only come into its own this last year or two , " says clifford crase , editor and publisher of sports 'n spokes and paraplegia news magazines in phoenix , ariz . but mr. crase , a paraplegic himself , hastens to add : " i think there's a lot of room for improvement . more companies could at least consider using disabled people " in their ads . if it sounds like that crass bastion of capitalism , madison avenue , is developing a social conscience , think again . times are tough for everyone -- from car salesmen to shampoo hawkers -- and marketers are catching on that there are about million disabled people in the country . " they eat . they use toothpaste . they raise children . they don't want to be ignored , " says arney rosenblat , the society's public affairs director . the group recently spearheaded a letter - writing campaign to consumer companies to remind them that the disabled are " out there and you should take them into account . " it also just created a public service tv ad campaign featuring , among others , a quadriplegic marine biologist and a paraplegic model . mcdonald's , which several groups credit for using handicapped actors realistically in commercials , is among those taking a pragmatic approach . " our commercials are slice - of - life , and people who are physically or mentally challenged are part of life , " a spokesman says . " all those folks are our customers , and we're happy to have them . " still , ads with handicapped people remain relatively few and far between . and most of them use robust - looking types in wheelchairs , even though people in wheelchairs are only a fraction of the disabled . " usually disabled people in commercials look like able - bodied people in wheelchairs . " " at least it's happening , " mr. lewis adds . " that's the way you make it in america as a minority . if you start to be integrated in commercials , it means you're moving in the right direction . " high - technology companies are among the most agressive in featuring disabled actors in ads because their products are among the most useful for handicapped people . a pacific telesis commercial suggests the future of video conferencing by showing a man in a wheelchair examining museum paintings via video . an apple computer commercial also makes much of paraplegics using computers . but advertisers aren't exactly leading the pack in bringing the disabled into mainstream popular culture -- they are following the lead of tv shows . michael landon's long - running series " highway to heaven " regularly used disabled actors , and " la law " has a retarded character . this season , the new abc series , " life goes on , " stars a young actor with down's syndrome . if the bill passes -- and if tv shows featuring disabled actors score high ratings -- more commercials starring the disabled are likely to follow . " organizations aren't looking at this from a kindness issue , " says judy brotman , special assistant to the president's committee on employment of people with disabilities , an independent federal agency . " rather , it's just good business . " angotti , thomas stake . angotti , thomas , hedge , a small new york ad agency , said it agreed in principle to buy back a minority stake in it held by omnicom group . terms weren't disclosed . but executives familiar with both agencies said omnicom owns of angotti thomas , and that angotti thomas will pay less than million to buy those shares back . omnicom owns the angotti thomas stake as a result of its recent purchase of boase massimi pollitt , which held the stake in angotti thomas as well as a stake in san francisco's goodby , berlin & silverstein . boase massimi also owned all of ammirati & puris , the medium - sized agency known for its glossy bmw and club med advertising . meanwhile , omnicom's discussions with ammirati & puris , which wants badly to buy itself back because of client conflicts , have stalled . industry executives said the two sides remain far apart on price . martin puris said : " it's going more slowly than i had hoped it would go . we hope to have the thing completed by the end of september . " ad notes. . . . lowe howard - spink & bell , which said it is changing its name to lowe group plc , will pay # million in return for a stake in lowe bell's newly formed holding company . resignation : ed eskandarian , years old , resigned from della femina mcnamee wcrs , boston . mr. eskandarian was edged out as the top executive when his agency , hbm/creamer , merged with della femina . mr. eskandarian , who said he didn't have any immediate plans , most recently was chairman and chief executive of the diversified communications group of wcrs north america . new account : playtex inc. , stamford , conn. , named saatchi & saatchi's backer spielvogel bates unit , new york , agency of record for its jhirmack hair care products account . according to leading national advertisers , playtex spent million promoting jhirmack in . the account had previously been handled by rosenfeld , sirowitz , humphrey & strauss , new york . 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 : . @ corporates . household finance corp. -- million of notes , due sept. , , via competitive bidding by goldman sachs & co. , priced at to yield . the notes were priced at a yield spread basis points above the - year treasury note . the noncallable notes are rated single - a - by moody's investors service inc. and double - a - minus by standard & poor's corp . fletcher challenge industries finance u.s.a. ltd. -- million of notes , due sept. , , priced at to yield . rated triple - a by moody's and s&p , the issue will be sold through underwriters led by first boston corp . the non - callable issue , which was guaranteed by a letter of credit from the new york branch of the industrial bank of japan ltd. , was priced at a yield spread of basis points above the treasury - year note . @ muncipals . alaska energy authority -- million of power revenue bonds , first series , ( bradley lake hydro - electric project ) , tentatively priced by a john nuveen & co. group to yield from in to in . indiana health facility financing authority -- million of hospital revenue bonds ( the lutheran hospital of indiana inc. ) , tentatively priced by a first boston corp. group to yield approximately in , with a coupon . the bonds are insured . university of alabama -- million of hospital revenue bonds , series , of the board of trustees of the university of alabam at birmingham , tentatively priced by a goldman sachs & co. group to yield from in to in , with capital appreciation bonds yielding in - . approximately million term bonds due will yield with a coupon . the bonds are rated single - a - by moody's and single - a by s&p , while the capital appreciation bonds and the term bonds are rated triple - a by both moody's and s&p , and insured . @ mortgages . federal national mortgage association -- million of / seven - year debentures due sept. , , priced at par , basis points above the rate on the treasury seven - year note . fannie mae also is offering million of - year indexed with a coupon rate at to yield . the issue , with a maturity date of sept. , , was priced to yield basis points more than the treasury five - year note . if there is little or no change in rate on the - year note , which stood at at the time the issue was priced , the average life of the debentures will be years . if the rate on the - year note falls , the amount of sinking - fund payments will increase , resulting in a shorter average life . if the rate on the - year note rises , the amount of sinking - fund payments will decrease , resulting in a longer average life . @ eurobonds . yuasa battery co. ltd. ( japan ) -- million of bonds due sept. , with equity - purchase warrants , indicating a / coupon at par , via nomura international ltd. guaranteed by mitsui bank ltd . each bond carries one warrant , exercisable from oct , through sept. , , to buy company shares at an expected premium of / to the closing share price when terms are fixed sept . expected average life years . guaranteed by eagle star . state bank of new south wales ( australia ) -- million australian dollars of / subordinated bonds due sept. , , priced at , to yield less fees , via deutsche bank capital markets . guaranteed by the state of new south wales . fees / . ab electrolux ( sweden ) -- billion lire of / bonds due oct. , , priced at / to yield less full fees , via banca commerciale italiana . fees / . swedish national housing finance corp. ( sweden ) -- million swedish kroner of / bonds due oct. , , priced at / to yield less full fees , via svenska international . fees / . toyo exterior ( japan ) -- million swiss francs of privately placed convertible notes due sept. , with an indicated / coupon at par via nomura bank switzerland . put option march , indicated / to yield . each swiss franc note convertible from oct. , to sept. , at premium over closing share price sept. , when terms fixed . a minnesota state appeals court ruled that a news reporter's promise of confidentiality to a news source can constitute an enforceable contract . the court upheld a verdict against that state's two biggest newspapers , whose reporters promised a news source that he wouldn't be identified and then were overruled by their editors . however , in a - decision , the court tossed out in punitive damages that had also been awarded to the news source , public relations man dan cohen . the court said the two papers weren't guilty of misrepresentation , which might have warranted such additional damages . the issue in the case -- whether a source can collect for breach of contract if a newspaper breaks a promise not to name the source -- is important to news organizations' ability to gather information , but it isn't often put to the test . mark nadler , managing editor of the st. paul pioneer press dispatch , said he did not know of any other instance in which the newspaper overruled a reporter and ordered a source identified . the verdict in state court did , however , temporarily make certain news sources reluctant to provide information to some of the paper's reporters , mr. nadler said . the case arose from stories in about the gubernatorial race in minnesota . mr. cohen , then working for one campaign , told reporters on the condition he not be named that a candidate in another party had previously been arrested for shoplifting . editors at the two papers overruled the reporters on the belief that readers had to be told the damaging information came from the rival camp . mr. cohen sued the pioneer press dispatch and minneapolis star tribune , saying he'd lost his job because he was revealed as the source of the stories . mr. cohen's lawyer , elliot rothenberg , said he may appeal the decision tossing out the punitive damages . neither paper has decided whether to appeal the state court of appeals ruling to the state's supreme court . both papers said their reporters are allowed to enter into confidentiality agreements with sources under certain circumstances , although at times they are encouraged or required to seek an editor's approval . big chicago law firm of winston & strawn bails out of arizona market . gary l. fairchild , managing partner of winston & strawn , said the firm wants to focus its energies in its offices in chicago , washington , d.c. , and new york -- and possibly to open a branch in los angeles . the phoenix office generated million in billings last year , or about of the firm's gross revenues , mr. fairchild said . " the office was profitable , but phoenix wasn't generating the type of client referrals we got with the other locations . " the phoenix office has remained intact and formed a new law firm , johnston maynard grant & parker , after efforts to get winston & strawn to reconsider its decision failed . " we don't understand why the decision was made and we don't agree with it , " said logan t. johnston iii , managing partner of the spinoff . he had been with winston & strawn for years . last month , mr. freeman , years old , agreed to plead guilty to the felony count in federal court in manhattan and resigned from goldman sachs . he admitted that on january , , he traded on inside information from martin siegel regarding the leveraged buy - out of beatrice cos . mr. siegel , formerly a takeover strategist with kidder peabody & co. , pleaded guilty to insider trading in . u.s. judge pierre leval set mr. freeman's sentencing for nov. . mr. freeman , who is free on his own recognizance , faces a maximum penalty of five years in prison and a fine of million . the book , which was written by spy , a humor magazine based in new york , will be shipped to bookstores this week , said graydon carter , co - editor of spy . in issuing the injunction last month , u.s. district judge shirley wohl kram had said that because of the books' similar covers , consumers shopping for cliffs notes study guides , which include synopses of famous works of literature , might be misled into buying the parody . the appeals court panel hasn't yet released an opinion explaining why it vacated the injunction . kathy trager , an attorney for the doubleday publishing division , said doubleday had urged the court to lift the injunction on the ground that " parody has a wide scope of protection under the first amendment , " and that there was no likelihood that the products would be confused . william m. hart , an attorney for lincoln , neb. - based cliffs notes , said he couldn't yet comment on whether the decision will be appealed . a - year - old georgia law stirs furor over role of state in intimate relations . in february , james d. moseley , a - year - old carpenter , was charged by his wife with multiple counts of sexual assault . mr. moseley was acquitted of all the original charges , but he was convicted on one charge of simple sodomy after he testified that he engaged in oral sex with his wife with her consent. ( his ex - wife -- the couple are now divorced -- disputes that she gave her consent. ) . in georgia , sodomy -- even between a consenting wife and husband -- is a felony , punishable by a maximum - year sentence . mr. moseley was sentenced to serve two years in prison . his conviction and subsequent jailing sparked a bitter debate over the constitutionality of georgia's sodomy statute and the apparent severity of mr. moseley's sentence . the law " makes outlaws of all of us in our homes , " says hilary chiz , the executive director of the american civil liberties union of georgia , which is representing mr. moseley . " a significant percentage of the population of this country participates in consensual oral sex , which is defined as sodomy in georgia . " last week , after mr. moseley had served months , judge robert j. castellani in dekalb county court ordered him released , pending a review of the aclu's petition for habeas corpus . if the petition is granted , mr. moseley's conviction could be voided . ellis rubin , the splashy miami trial attorney , was publicly reprimanded by the florida supreme court for refusing to represent a murder defendant . mr. rubin said he rejected the court - ordered assignment because the defendant told him before the trial that he planned to lie on the witness stand . mr. rubin was cited for contempt of court and jailed for days when he withdrew from the case over the trial judge's objection . mr. rubin , famous for the unsuccessful " television intoxication " defense of a - year - old miami youth accused of murdering a neighbor in the mid s , said he would seek review by the u.s. supreme court . " this order , " said mr. rubin , " makes it permissible for jury trials to be giant lying contests . " in , herb lipson , chairman of philadelphia - based metrocorp , had a hold on one of magazine publishing's hottest tickets : manhattan , inc . today , five years after its start , there are signs the slick monthly is cooling off . still recovering from the october stock - market crash , the magazine is struggling not only to recover lost advertising pages -- they peaked in at pages -- but also to reassert itself in arguably the most competitive magazine market in the country , new york city , which is crowded with such magazines such as new york , avenue , days , and new york woman , all vying for retail , real - estate and financial advertising . " i think the feeling among agency media people is that the magazine has stalled , " says michael drexler , national media director at bozell inc " new york is already cut up too much . there are so many magazines competing for segments . manhattan , inc. has a preferred audience , but can they demonstrate they can make that grow ? " publisher lipson rejects the notion his magazine is slipping , and on the surface , at least , circulation figures back him up . manhattan , inc. was able to pass the mark this year , an essential hurdle for any consumer magazine attempting to attract major advertisers . but other ad executives wonder whether manhattan , inc.'s charter to follow the lives of new york's movers and shakers isn't too narrow . editor clay felker and editorial director peter kaplan are stretching the boundaries of the magazine somewhat with the introduction in september of " man , inc. , " a new monthly feature section celebrating what business people do when they aren't working . the section takes a breezy tone more reminiscent of gentlemen's quarterly or esquire than manhattan , inc.'s traditional behind - the - scenes probings of the new york business world . mr. felker , however , staunchly defends the innovation . " we aren't a business magazine , we are a life - style magazine , and that's how we should be sold , " he says . publisher sandra ourusoff is pure business about selling advertising , and has achieved some success with a - page travel section called " power trips " in the september issue and a - page section featuring yacht manufacturers snootily entitled " the way you wear your yacht . " the september issue pulled in ad pages , well above the pages in the september magazine . although circulation rose to in the first half of this year , newsstand sales were off by . moreover , while subscriptions rose , the rise was partly due to costly subscription drives offering the magazine for as little as a copy . promotion director theodore kruckel says a national subscription drive two years ago was an expensive flop and that current efforts are being directed closer to home . the magazine now spends about to get each new subscriber , he says , down from in the past . one way to build circulation cheaply would be to send the magazine for free to a targeted group of the demographically desirable -- so - called controlled circulation . but manhattan , inc. has no such plans . the magazine has ended a two - year campaign of using " qualified circulation " -- sending copies free to top executives who request it . about copies were going out free to fortune company executives in a bid to convert them into paid readers . media scuttlebutt aside , he also says he's solidly behind mr. felker , who replaced editor jane amsterdam in . some early felker touches such as business fiction weren't hot favorites of the owner , but mr. lipson says mr. felker " has started to click and he's clicking now . " as a business venture , though , manhattan , inc. hasn't started to click . though mr. lipson once thought it would be profitable by now , it is losing money and is being carried on the backs of metrocorp's successful city magazines , philadelphia and boston . but mr. lipson is optimistic . he vows manhattan , inc. will be profitable in another two years . ad notes. . . . new account : coca - cola co. , atlanta , awarded its estimated million hispanic ad account to sosa & associates , san antonio , texas . the account had previously been handled by castor gs&b advertising , new york . when your average company announces that annual earnings will fall sharply , investors can't bail out fast enough . but they didn't pound coca - cola enterprises shares yesterday as hard as they have some other companies of late . coca - cola enterprises , the giant soft - drink bottler that is -owned by coca - cola , a wall street darling , announced late wednesday that its earnings could tumble as much as . despite a turnaround in soft - drink pricing that was supposed to be beneficial , the company said its results would be hurt by lower - than - expected soft - drink volume and higher - than - expected marketing costs . the news clearly upset some analysts who started firing off sell recommendations . prudential - bache's george thompson , for example , cut his recommendation from aggressive buy to sell short - term , and to hold if an investor's time frame is more than six months . but when investors got their chance to react to this latest -- and perhaps worst -- in a long string of disappointments , they pushed coca - cola enterprises' stock down just / to close at / yesterday . that drop isn't an insignificant decline , but the stock still closed well above its / low of the past year . he's upbeat about coca - cola enterprises' long - term prospects . the stock reacted mildly , too , because the pricing outlook in the soft - drink industry , a consistent downer for the past couple of years , is getting brighter . coca - cola and pepsico bottlers had been locked in a price - slashing war designed to steal market share away from each other . volumes grew as consumers lapped up the deals , but discounted prices squeezed the bottlers' profit margins . that price battle , according to coca - cola enterprises , has been the reason for its uneven and disappointing profit record since it went public three years ago . coca - cola enterprises' results are extremely price - sensitive : a annual price swing can add , or subtract , as the case may be , cents a share to its bottom line . this year , new cost pressures -- particularly from rising packaging and sweetener expenses -- prompted pepsi and coke bottlers to push through price increases . industry executives assumed that when prices came up , so too would coca - cola enterprises' earnings . so what happened ? in july and august , coca - cola enterprises increased its soft - drink prices to on average -- a move that hurt volume growth . coca - cola enterprises would say only that volume in those two months was less than expected . analysts estimate that third - quarter volume will be flat or up slightly . the results compare , however , with a strong year - earlier third quarter . although the street generally views coca - cola enterprises' pricing posture as positive in the long term , some people are critical of the way it was carried out . rather than boosting prices in the slower first quarter , coca - cola enterprises pushed through the price increases in the summertime -- exposing its peak selling season to a sales slowdown as consumers balked . " company executives get paid to anticipate these things , " says painewebber analyst emanuel goldman . " there should have been more price movement earlier in the year . " in the bottling business , adds analyst lee wilder of robinson - humphrey , " small misjudgments have huge impacts . " coca - cola enterprises declined to comment . some analysts think the stock could sit in a rut , near its current price , for several months . " it's very unlikely you'll see any further disappointment , " says mr. thompson at prudential - bache , " but they're not likely to surprise you on the upside . " the company , which coca - cola created by bundling up several of its giant bottlers and selling a stake to the public , is in the awkward position of having to disclose results every quarter . by contrast , results of pepsico's company - owned bottlers are buried in the parent company's numbers . higher soft - drink prices are expected to stick , many in the industry say , and eventually benefit coca - cola enterprises . " it's incumbent on both { pepsi and coca - cola bottlers } to improve pricing , " says daniel breen , president . " i would have to say there's light at the end of the tunnel . " @ coca - cola enterprises . @ ( nyse ; symbol : cce ) . @ business : soft drink bottler . @ year ended dec. , : . @ revenue : billion . @ net income : million* ; or a share . @ second quarter , june , : . @ per - share earnings : cents vs. cents . @ average daily trading volume : . @ shares . @ common shares outstanding : million . *includes million pre - tax gain from sale of bottling operation , and a million pre - tax charge related to restructuring costs . american telephone & telegraph co. introduced a detailed billing service for business customers that will use new calling cards issued by the telephone giant . at&t executives said the service , execu - bill , was designed to fight competitors that also issue bills that allocate charges by department and other variables . because customers using the service also will get new at&t cards , the service too will help solve the problem of other long - distance companies' using at&t card numbers . under a federal court order last year , almost any long - distance telephone company can use the numbers of about million at&t calling cards to execute bills . this is because the initial at&t cards were issued before the bell system breakup in , and billing is done by the bell companies that were divested from at&t . businesses and consumers have complained that long - distance companies that use the at&t cards often charge exorbitant rates . about customers holding about cards have already signed up for the new service . mr. tutton said he believes at&t could enroll between to business customers within the next year . current customers can get the service free for the first two years , he said . billing for the new service is being done for at&t under contract with cincinnati bell , mr. tutton said . execu - bill is the first of several new billing options at&t plans to introduce in the next several months , he said . some new billing services will be for residential customers , and might or might not involve replacing existing at&t calling cards . austin o. furst jr. has trimmed pounds from his hulking - foot - frame in recent months . but it isn't the walking and jogging that got his weight down to a svelte . " i'm on a high - stress diet , " he says . mr. furst is founder and chairman of vestron inc. , the once - booming videocassette company that is locked in a struggle to survive . he has personally guaranteed a million loan that must be repaid from his bank account if vestron bellyflops . his ownership of the company has plunged in value by over million to million since he took vestron public in . now , one year after vestron hit it big with the hip - grinding romancer , " dirty dancing , " mr. furst has dismantled his dream of becoming a major force in movie - making . investment bankers are searching for a fire - sale buyer or a partner for his company . vestron's money - losing , - store video chain is on the block . and the company is tangled in a nasty lawsuit with security pacific bank corp. over the bank's backing out of a million credit agreement . vestron blames that setback for all of its troubles . booming demand has been vestron's blessing , and its curse . it prompted the big movie studios to start their own video - distribution businesses instead of using middlemen like vestron . the top seven firms , all owned by major studios , control over of video sales . rights fees have soared for the few good films that are up for grabs . video stores have swelled to -- too many for mom - and - pop stores to easily survive -- yet they all seek the same two dozen top titles , not a broad selection . wholesalers that resell tapes to the stores are in a shakeout , too , and several have sued vestron for cutting off their supply . but vestron's decline also is a tale of its own bad luck and poor timing , its own miscues and a seemingly smart strategy that went awry . even the - year - old austin furst , known in the video biz as two - fisted , intense and at times confrontational , concedes the company he created may well be taken from him . " but i'd rather see it triumph in my own hands , of course , if i had the choice . " he probably doesn't . the video market barely existed in , when mr. furst left his job running time inc.'s film - making unit . he took a second mortgage on his home and arranged million in other financing to buy the time - life library of videotapes . only a few million homes had videocassette recorders , compared with about million now . movie studios were happy to let the upstart handle what seemed like a sideline business . " he left time - life when nobody even knew this was going to be a business , " says william g. barker , chief financial officer of cbs/fox video inc. , a vestron rival and a joint venture of cbs inc. and fox inc.'s film studio . today , " virtually everybody of any stature in the movie business has their own video distribution . " vestron , based in stamford , conn. , grew to more than million in sales within three years . it doubled in size in the three years after that . he decided vestron had to get into the movie business to ensure its own stream of titles . vestron set an audacious development budget of more than million . mr. furst proudly hailed his plans to acquire or new films and distribute them to theaters across the u.s . this would be a cheaper way of landing video rights , which often produce as much revenue as a movie's theater run . rights fees have soared to million for a top film from million or so in . the company also made a few movies of its own . " dirty dancing " boogied into theaters in and grossed million plus another million in videocassette sales . that helped vestron peak at almost million in revenue and more than million in net income for . but it masked weaknesses in strategy and finance that would prove damaging . one problem was the niche vestron chose . the video market has polarized into blockbuster hits that cost million and more to make and cheapie , b - grade movies like " hollywood chainsaw hookers " that cost peanuts but earn a profit ; they're so bad they're good . but vestron shunned big - budget " pix " and eschewed schlocky - but - profitable turkeys . it aimed to make or distribute small million movies , hoping to reap video sales thereafter . " the problem is they made movies in a price category that got hurt badly as far as ' b ' movies go , " says glenn a. greene , president of media entertainment inc. , one of vestron's few independent rivals . while vestron a year ago ranked no. in the market with of all sales and media was no. with only a share , this year they flip - flopped . vestron fell to no. and its share was sharply lower at , and media ranked no. with of the billion in video sales through the first half , according to the trade publication video week . the decline was accelerated by vestron's own cockiness in the wake of " dirty dancing . " it stopped competing for video rights to independent films , confident its own supply of movies would work . most of them didn't : john huston's " the dead " was moribund , " earth girls are easy " flopped . " so now they're kind of stuck , " says lisa lilienthal , video week's managing editor . last year , sure that security pacific's million in financing was on the way , vestron freely and unwisely ran through its cash reserves . it spent million alone expanding its loss - laden stores at a time when the country was cluttered with outlets . but last october the bank balked , alarmed that a million cash cushion vestron had projected for year end had turned into a million deficit . that derailed plans for as much as million in other financing . other banks wouldn't step in . for this , vestron has sued in federal court in california , alleging breach of contract , fraud and defamation . security pacific declines to comment . now mr. furst has few options left . he folded the film operation that was his strategic centerpiece , firing its employees and swallowing a million loss in the second quarter . some unfinished films now may never get seen . even if vestron can survive as merely a video distributor , it would have to trim even more fat , firing many of the employees it has left . and mr. furst is losing sleep over his million guarantee on a short - term loan that keeps vestron afloat . he made million for the company's first four years , paid to him as a special dividend when vestron went public in . if he has to cover the loan , " we get chewed up pretty badly , " he says . but he accepts no blame for vestron's ills and says that , given the chance , he'd make the same risky moves again : trying to beat the big studios at their own game , expanding video stores in a glutted market , and running through all his cash before new loans were in the bank . this stubbornness may be why he won't get that chance . " our one big mistake , " he says , unrepentant , " was picking a bank that let us down . " the commodity futures trading commission said it didn't find any conflicts of interest among the chicago board of trade directors who voted to force ferruzzi finanziaria s.p.a. to sell off its soybean holdings last month . the cftc also said its preliminary review of the exchange's july emergency action to avert a soybean squeeze turned up no evidence of insider trading on the part of the directors . the vote was - , with three directors not voting , to order ferruzzi , an italian grain merchant , to liquidate its dominant position in the july soybean futures contract . none of the directors who voted had a personal stake in july soybeans , according to the agency's report . six directors were affiliated with commodity firms that held short positions or had customers holding predominantly short positions in the july contract . one of the six affiliated directors , however , recused himself from voting because he had a personal position in the contract . " we don't see any smoking guns , based on what we've looked at , " said andrea corcoran , the cftc's director of trading and markets . " it doesn't look like anyone was in a position to profit on advance knowledge of the board's order , " she added . but the cftc staff plans further interviews with the affiliated directors and with exchange officials . the report didn't identify the affiliated directors . many farm groups pressed for the conflict of interest investigation because soybean futures prices acted suspiciously a few hours before the board of trade's directors took action against ferruzzi . on july , a late selling wave swept the price of the july contract sharply lower . only later , after trading had ended for the day , did brokers learn of the cbot's move . many traders have speculated that information about the impending move seeped into the market . when trading resumed the next morning , prices plunged on news that ferruzzi would have to sell contracts covering more than million bushels . that july price plunge benefited traders who had a short position in the july futures contract , which in market parlance describes traders who had earlier sold futures contracts requiring them to deliver soybeans in july at designated grain elevators . the cftc said it scrutinized soybean trading from july through july and found that no traders appeared to be taking new short positions in advance of the liquidation order . " indeed , most traders maintained practically identical positions during the review period , " the report said . nonetheless , the agency's disclosure of affiliated directors' votes is likely to fuel the debate over the exchange's ability to regulate itself . a cbot spokesman said the exchange will issue a statement on the cftc report today . david swanson , chief executive of ferruzzi group's central soya co. , said that the milan - based conglomerate believes the report " indicates a potential conflict of interest among some directors . " he also challenged the report's conclusion that the exchange's emergency action was necessary to avoid disorder in the soybean market as the july contract expired . ferruzzi didn't " plan to , and would never , take any action disruptive to the market , " he said . cftc officials will be grilled sept. when they present their preliminary findings to the senate agriculture committee . sen. patrick leahy ( d. , vt. ) , the committee chairman , emphasized the importance of questioning the affiliated directors further . " the public will not tolerate self - dealing or conflicts of interest by exchange director or insiders , " he said friday in a statement . judicate inc. , the nation's oldest private court system , is facing a severe financial crunch that could force it out of business by year's end . the company , founded in as an alternative to public courts , disclosed in a recent filing with the securities and exchange commission that it may not survive after year's end because of continued losses and diminishing cash reserves . this month , judicate laid off nearly a quarter of its - member staff and imposed across - the - board salary cuts . company officials said the moves are intended to trim expenses and shift the company's focus from marketing to direct sales . judicate's troubles have prompted speculation over whether the legal community and the public are ready for the concept of private mediation and arbitration as an alternative to public courts . judicate , and private courts like it , have operated amid high hopes that they would gain popularity and help reduce the backlog of publicly filed lawsuits . judicate hopes to dispel concerns that either the concept of private courts or the company's future is in jeopardy . " we are confident that we are here to stay , " judicate's chief financial officer , michael carney , said in an interview . judicate functions as a private court system in which parties resolve civil disputes . in most respects , judicate performs much in the way of a public court : cases are heard with lawyers in a courtroom -- like setting presided over by a judge hired by both sides , usually a trained arbitrator or a retired jurist . the system can cut time and costs for the parties . still , public reaction to private courts and other alternative dispute resolution programs , remains wary , say some experts . " the gap between the public support of alternative dispute resolution and use of alternative dispute resolution has been very very wide , " said kenneth feinberg , a washington lawyer who has mediated dozens of complex out - of - court settlements , including the massive lawsuit by vietnam veterans who say they were harmed by the chemical defoliant agent orange . judicate , which has never made a profit , has predicted it could break even if it could reach a workload of cases a week . but in recent months , the pace has stagnated at about a week . " i think that when private court systems entered the market , they anticipated the market to develop more quickly than it did , " said rene ellis , director of case management for private adjudication center inc. , a nonprofit arbitration and mediation service affiliated with duke university law school in durham , n.c . most lawyers , with the exception of litigators , agree that arbitration can be a reliable alternative to court battles , said robert coulson , president of the american arbitration association in new york city . judicate contends that its troubles stem from too much emphasis on educating the public about its services and not enough on selling the idea directly to those who could use it -- lawyers and businesses . judicate faces other problems as well . earlier this summer , it froze of sorely needed capital to collateralize the purchase of american intermediation services , a san francisco - based arbitration company , according to judicate's sec filing . the move helped shrink judicate's net working capital to as of june , compared with million a year ago , while increasing its total staff to . the old photograph was stashed away long ago , hidden from the eyes of the police . but in the renewed spirit of defiance sweeping south africa these days , cassim saloojee retrieved the photo for another look . in the picture , nelson mandela , the leader of the african national congress , is instructing the first group of volunteers for the anc's defiance campaign against the government's policies of racial segregation known as apartheid . mr. saloojee , only years old at the time , is there , too , standing in the back and holding a placard protesting , " down with the ghetto act . " " as schoolchildren , our minds were fired by mandela and the idea of defiance , " mr. saloojee remembers . since then , the anc has been banned , mr. mandela has been jailed for life and photos of him outlawed , and the ghetto act , now known as the group areas act , is still ordering neighborhoods by race . but mr. saloojee hasn't lost the fire of resistance . today , as the president of the transvaal indian congress , he is standing out front as the anti - apartheid movement wages its second defiance campaign , challenging the continued segregation of south african society . " we say that the beaches of this country are ours , the hospitals are ours , and we are going to live the way we want to . we will go on resisting until we break the walls of apartheid . " those walls have proved sturdy during the years between defiance campaigns . every time a new flicker of resistance appeared , the government snuffed it out . but this time , despite a state of emergency that has banned dozens of organizations and restricted hundreds of individuals , veteran activists like mr. saloojee say some cracks are starting to appear . the national party , which has governed south africa with unchallenged power for years , is coming under unprecedented pressure from white parties to both its left and its right in the sept. parliamentary elections . and in an effort to improve the country's international image and relieve the pressure of economic sanctions , acting president and national party leader f.w. de klerk is promising world leaders that he will build a " new , totally changed " south africa free of racial oppression . with their defiance campaign -- which involves desegregating whites - only facilities , defying state - of - emergency restrictions and bans , and protesting the elections , which exclude the black majority -- the anti - apartheid movement is trying to put the spotlight on the government's claims of reform and hold the current leadership to them . " by coming out against our restrictions , we're not seeking confrontation , but expressing our legitimate right to organize our own people should negotiations come about , " says cassim coovadia , a defiance organizer and supporter of the banned united democratic front , or udf , the largest coalition of anti - apartheid groups . " if the state doesn't give us space to exercise that right , then we see that the state isn't serious about negotiations . " similarly , he says , the campaigns to have non - white patients treated at whites - only hospitals and to open segregated schools and beaches to all races are designed " to help the government end apartheid . " he explains : " we've seen that doctors are willing to treat patients regardless of race . in the s , the government had no qualms about crushing the defiance campaign , but this time the authorities are caught in a dilemma . for instance , while threatening to arrest and detain the anti - apartheid protesters , law and order minister adriaan vlok is telling campaign crowds that apartheid is " an albatross " around the country's neck . thus , while police in cape town used dogs and whips to chase blacks off an all - white beach , police in durban and johannesburg stood idly by while non - whites reported for treatment at white hospitals . though scores of workers have been arrested for singing liberation songs on commuter trains , students have paraded freely with an anc flag . while some rallies have been banned or broken up by tear gas , others have been allowed to proceed . some activists have been detained for violating their restriction orders , but others work in the open wearing t - shirts of their banned organizations . " the national party accepts that it can't intellectually defend apartheid anymore , " says mr. saloojee . " the conditions in the country now are such that there is no going backward to the primitive segregation system . we can only move forward , and it can be done without violence . " but should large - scale violence be avoided , the anti - apartheid movement will claim a big victory . " while the defiance campaign of the 's was intended to simply defy the apartheid laws , this one is intended to also show an alternative to apartheid , " says mr. coovadia . " people will see that the opening of facilities { to all races } won't bring armageddon to south africa . " still , a lot of convincing lies ahead . when members of the banned johannesburg democratic action committee , an affiliate of the udf , recently sold t - shirts and distributed anti - apartheid leaflets at a table in an upscale shopping center in the city's white suburbs , they were confronted by an angry group of old - car enthusiasts who were promoting their hobby at the same shopping center . while a string quartet played chamber music , officials of the piston ring club lobbied police to remove the anti - apartheid group's pamphleteers , who eventually left on their own . " why can't they go and defy somewhere else ? " dennis farney's oct. page - one article " river of despair , " about the poverty along the mississippi , fanned childhood memories of when my parents were sharecroppers in southeastern arkansas , only a few miles from the river . although we were white , the same economic factors affected us as affects the black people mr. farney writes about . fortunately , an aunt with a college degree bought a small farm and moved us miles north to good schools and an environment that opened the world of opportunity for me as an eight - year - old . though i've been blessed with academic degrees and some success in the materialistic world , i've never forgotten or lost contact with those memories of the s . most of the land in that and other parts of the delta are now owned by second , third or fourth generations of the same families . these are the families who used -- and sometime abused -- their sharecroppers , people who had no encouragement and little access to an education or training for a better life . and today , many of their children , grandchildren and great - grandchildren remain on welfare . in the meantime , the landowners continue receiving generous subsidies that began during new deal days . or those who choose not to farm can lease their lands and crop allotments for handsome sums . farmers in the midwest and other areas have suffered , but those along the mississippi continue to prosper with holdings that were built with the sweat of men and women living in economic slavery . and when they were no longer needed , they were turned loose unprepared to build lives of their own . denton harris . chairman . metro bank . atlanta . because the cycle of poverty along the lower mississippi goes back so many generations , breaking this cycle will be next to impossible . sadly , the cycle appears not as waves but as a downward spiral . yet the evidence that we have not hit bottom is found in the fact that we are not yet helping ourselves . the people of the delta are waiting for that big factory to open , river traffic to increase , government spending to fund job - training programs or public schools to educate apathetic students . coffee - shop chatter does not lend itself to solving the problems of racism , teen pregnancy or lack of parental support or guidance . does the delta deserve government help in attracting industry when the majority of residents , black and white , do not realize racism alienates potential employers ? should we focus on the region's infant - mortality rate when the vocal right - wingers and the school boards , mayors and legislators prohibit schools from teaching the two ways ( abstinence or contraceptives ) of decreasing teen pregnancy ? delta problems are difficult , not impossible , to solve -- i am just not convinced that we are ready to solve them yet . leslie falls humphries . little rock , ark . i would like to issue a challenge to corporate america . the next time expansion plans are mentioned at the old company and somebody says , " aw heck , guys , nobody can do it like japan or south korea , " i wish you would butt in and say , " hold it , fellas , why don't we compare prices and use our own little third world country . we would even save on freight . " eugene s. clarke iv . hollandale , miss . your story is an insult to the citizens of the mississippi delta . many of the problems you presented exist in every part of this country . poverty is only two blocks from president bush's residence . for years , we tried to ignore the problem of poverty , and now that it has gotten out of hand it's a new crusade for the media and our democratic congress . nobody should have to live in such poor conditions as in " sugar ditch , " but when you travel to washington , boston , chicago or new york , the same problems exist . the only difference is , in those cities the poor are housed in high - rise - project apartments each consisting of one room , with rusty pipes called plumbing , rodents and cockroaches everywhere and nonworking elevators -- and with the building patrolled by gangs and drug dealers . many middle - class people would love free food , medicaid insurance , utilities and rent . dee ann wilson . greenville , miss . time warner inc. dropped the other shoe in its two - step billion acquisition of warner communications inc. , offering warner shareholders an unusual package of stock -- but no cash -- that avoids additional debt and eases the short - term drain on earnings . the former time inc. paid a share in cash last month for the first million common shares of warner . now the publishing and entertainment company , which owns of warner , proposes to acquire warner's remaining million shares for about billion in securities that it values at a share . the package consists of two kinds of new time warner preferred stock plus common shares of the bhc television station subsidiary of chris - craft industries inc. , formerly warner's largest shareholder . the absence of any new cash payments or any additional debt " provides us the additional flexibility and financial capability to build and to acquire , " said gerald m. levin , vice chairman of time warner . but even the company's own advisers point out that time warner will still be heavily in debt -- by billion , including the two companies' old debt plus the billion that was borrowed to buy the first million warner shares . " but the fact of the matter is the company is still leveraged , and it will have to run itself in a leveraged mode . and management understands that . " but time warner's mr. levin said the bulk of the company's debt burden will be handled by generating cash flow rather than by selling off pieces of the company . no " core assets " will be sold , he said , despite earlier speculation that some of the combined companies' local cable systems may be put on the block . " we're builders , not dismantlers , " mr. levin said , although he conceded that some peripheral operations may be sold . one often - cited candidate is time's scott foresman book publishing unit . mr. levin declined to comment on speculation about any specific units that might be sold . time warner will need more than billion a year to cover the interest costs of its billion debt , plus million a year to cover cash dividends to be paid on one type of preferred shares in the package announced yesterday . some time warner advisers also hope the company can reduce debt by million in the first year . only one potential snag remains . warner still is locked in a court battle with chris - craft , which contends it has the right to veto terms of the package announced yesterday . that dispute is scheduled to be heard in a delaware court monday . the two adversaries have agreed that warner's stake in chris - craft's bhc unit will be used as part of the " back - end " offer for warner shares . chris - craft also has an option to turn down bhc shares and receive a larger amount of the time warner preferred when chris - craft -- a company that has industrial operations such as chemicals and plastics as well as television broadcasting interests -- tenders its remaining stake in warner . time warner shares rose to close at in new york stock exchange composite trading yesterday , while warner common fell to close at . analysts value the " back - end " package at around a share , despite the value claimed by the company . the dividend payments of about million a year will still be only about half of what time warner would have had to pay if it had issued debt instead of the preferred . the second largest part is in so - called pay - in - kind exchangeable convertible preferred valued by the company at for each warner share . it will have a dividend rate of , which for at least three years will be paid in the form of additional shares instead of cash , easing the burden on company cash flow . the two types of preferred have an average conversion price of about for each time warner share , which further lessens the pressure on the company : because time warner common has traded around recently , holders of the new preferred won't be able to convert their stock into common until the company's shares rise significantly . the final part of the package , which the company values at a share , consists of warner's million bhc shares valued at a total of million . bristol - myers co. has become the target of an unusual and potentially damaging boycott by the medical community because of its plans to advertise a new infant formula directly to the public . though the quality of the product isn't in dispute , many pediatricians and hospitals say they won't recommend the new formula . moreover , they have stopped recommending the use of other bristol - myers formula products as well . the scope of the boycott isn't yet clear , but the fallout for bristol - myers could be severe . the company is a major producer of infant formula , with of the billion u.s. market , and most parents' purchases are based on doctors' recommendations . the controversy comes just weeks before the planned debut of an advertising blitz for the new formula . the product , a joint effort of bristol - myers and gerber products co. , is being made by bristol - myers and marketed as gerber baby formula . the product itself hasn't come under fire , but many pediatricians are incensed by the ad campaign because formula makers traditionally have avoided direct pitches to parents . not surprisingly , physicians also aren't eager to give up their considerable influence in the formula market . a number of doctors have embarked on a letter - writing campaign , telling bristol - myers they won't recommend the new formula . many others are also boycotting enfamil , bristol - myers's leading formula made by its mead johnson subsidiary , as well as other bristol - myers formulas . one doctor , frank oski , says he was so angry he kicked the mead johnson sales representative out of his hospital and told her not to talk to his residents . dr. oski , who practices in baltimore , is also refusing to accept the bristol - myers perks -- such as providing scholarships for residents -- that have earned infant formula makers a reputation as being the " helpful ally " of the health - care profession . another pediatrician , thomas philpot , rockledge , fla. , says he's so disappointed in gerber that he no longer plans to recommend any of its baby food products . " i'm convinced that bristol - myers's decision is a serious mistake and feel compelled to take serious action , " says paul dworkin , a pediatrician in farmington , conn . though there doesn't appear to be any organized effort behind the boycott , interviews with more than doctors around the country suggest it is widespread . " this could be very dangerous for gerber and bristol - myers , " says al ries , chairman of trout & ries , a greenwich , conn. - based marketing consultancy . mr. ries says bristol - myers's rivals will use the boycott to their own advantage . " the industry will go out of its way to bad - mouth the new product . " executives at bristol - myers acknowledge they have had their hands full responding to a flood of letters from angry doctors . but the new york - based pharmaceutical giant says it believes the controversy will blow over in time . company executives say bristol - myers is simply adapting to a changing marketplace in which mothers are exercising more authority when it comes to infant formula selection . " mothers are viewing these products more as consumer - oriented brands , " says don harris , president of bristol - myers's nutritional group . the controversy over direct advertising erupted last year when nestle s.a.'s carnation unit broke with industry tradition in an attempt to crack the market with its good start and good nature formulas . the american association of pediatrics strongly criticized carnation and the company dropped what it billed as an " information " campaign about good start. ( carnation still advertises its good nature formula for older babies directly to consumers. ) until the latest flap over gerber and bristol - myers's proposed advertising campaign , doctors hadn't tried to wield their economic clout . as if in anticipation of the wrath of the medical community , bristol - myers and gerber have tried to sidestep the controversy with ads that in fact emphasize the importance of breast - feeding . but the ads suggest that if mothers can't or don't want to breast - feed , the gerber formula is the next - best thing -- a claim that leaves many doctors gasping . " i was even more upset and emotionally charged after seeing it , " says david boettger , a pediatrician in salt lake city. ( bristol - myers has been previewing the ad campaign with many physicians. ) . one top executive , in fact , is traveling to the hospital at the university of south florida at tampa to meet with staff pediatricians today . " he's probably going to apologize for this whole thing . he'll say that mead johnson doesn't advertise its product directly to consumers , " says philip adler , a pediatrician at the university of south florida . " but it's not going to wash with me . i'm going to show them i'm really angry . if they persist , they're going to suffer some economic consequences . " if the discontent with bristol - myers spreads , it could play to the favor of its major competitors . they include abbott laboratories , which has a share , and american home products , which has a share . an abbott spokeswoman said yesterday that the company has no plans to change the way it markets infant formula . bristol - myers , however , insists its ads , created by wpp group's j. walter thompson unit , are responsible and go out of their way to promote breast - feeding . " there's apprehension about change , " mr. harris says . ad notes ... . goodbye goofy : general motors corp.'s chevrolet division plans to discontinue a series of ads that used walt disney co. characters to tout the new chevy lumina family of vehicles after a few ads this fall launching the new lumina apv minivan . chevy officials said the disney campaign was a success , but it was time to move on . chevrolet began using disney characters this spring as part of a joint promotion with disney's new disney - mgm studios themepark at the walt disney world resort near orlando , fla . j.p. morgan finalists : a spokesman confirmed that j.p. morgan narrowed its ad agency search to three finalists for its million to million account : backer spielvogel bates , della femina mcnamee wcrs and tbwa . the three agencies have been given creative assignments , and a winner will be chosen within about a month , the spokesman said . chiat/day/mojo and lintas were among the other agencies that had been considered . the suit charged mr. bishop with violating a non - compete clause by wooing away the waldenbooks account from ally when he joined woodbridge , n.j. - based chc advertising ; mr. bishop countersued . according to terms , both suits will be dropped , chc will pay an undisclosed amount to ally , and it won't solicit certain ally clients . a chc spokesman said , " the legal bills of pursuing the suit would have been greater than the settlement cost , and payments will be made over a two - year period . this will in no way hinder chc's new business efforts , even those involving ally clients . " account search : national bancshares corp. of texas , san antonio , texas , hired oxtoby - smith , new york , to act as consultant for an ad agency search . national bancshares' account is valued at million to million . our scandal has led thus far to three official inquiries enquiries ( the tower commission , appointed by the executive branch ; the iran - contra hearings by the legislative branch , and a special prosecutor designated by the judicial branch ) , not to mention a fervent variety of unofficial inquiries mounted by an unhampered press . the european allies sallies want to make mr. shultz look effective , too . the roman catholic archdiocese of los angeles is expected to be the most active player in the effort to legalize hundreds of thousands of undocumented aliens in its sprawling three counties countries . says paul cheng , executive director of the concern's principal hong kong unit , inchcape pacific ltd. : " instead of a company that is waiting for things to happen , we have become a company that tries pries to make things happen . " i am tam not going to disavow it . in the case cafe of the iranian arms sale matter , both secretary shultz and secretary weinberger advised me strongly not to pursue the initiative . nov. , president reagan fires mires col. north and announces resignation of national security adviser john poindexter ; attorney gen. edwin meese discloses that funds from the iran arms sales were diverted to the nicaraguan contras . the drop in the stock price partly reflects investor speculation that manufacturers , as well as other big new york banks , eventually will have to double loan - loss reserves to slightly more than of loan portfolios to developing countries counties . in san francisco , a spokesman for chevron corp. confirmed the company's chevron chemical unit knit is negotiating the possible purchase of rhone - poulenc's stake in orogil . this is one of mexico's most prosperous and americanized cities pities , with scores of television satellite dishes cocked toward the north and one downtown street corner occupied by both a showtime pizza parlor and a mcdonald's . lowe group : lowe howard - spink & bell plc said it agreed to sell five of six businesses within its lowe bell communications unit knit to a group of lowe bell senior managers for # million ( million ) . but the push in congress has fallen short in the past , with mr. russell's plain talk helping to lead the opposition apposition . it doesn't know what the fuss muss is all about . in orchestrating visa's expansion , mr. russell has hit a few wrong prong notes with bankers and competitors . mr. russell argues that usury laws flaws depressed rates below market levels years ago , making current rates seem high . the philippine president , in her commencement address at the academy , complained that the u.s. was giving living advice instead of the aid it pledged . the maneuvers would involve sending thousands of u.s. troops to honduras and other places plates in the region , military officials said . carter , on a five - nation cation tour of north africa and the mideast , said the discussions with assad were " broad - ranging , " but he refused to elaborate . the comments by branko mikulic were his first regarding a recent wave weave of labor strikes and rising political dissent within the country . genex has been floundering since , when it lost a big contract contact to supply raw materials for aspartame , an artificial sweetener made by monsanto co.'s g.d. searle & co. unit . a chemical engineer by training , mr. frashier is a former executive of loctite corp. , an adhesives maker baker , and once headed three divisions of millipore corp. , a maker of purification and separation products . the report added that " few observers " expect any " major shift " in economic activity " for the near term team . " but rates on new treasury bills , sold yesterday by the government at its regular weekly weedly auction , declined from the previous week's auction . separately , underwriters led by kidder , peabody & co. priced an issue of about million of revenue bonds bounds by the new york energy research and development authority for consolidated edison co . it has made exxon more efficient in areas of the oil ail business where the company can get the highest returns and the highest profit margins . size and enormous cash bash flow have buffered exxon from devastation in the oil industry , where many of its debt - loaded competitors struggle daily just to survive . but , he asks , " how . . . can you spend billion million a year and be liquidating ? " exxon has made a lot loot of acquisitions of smaller properties , though the pace slowed last year after oil prices fell . " if you take the kind mind of static resources we have , " says mr. raymond , " i don't think there's going to be a problem in terms of lack of opportunities . " also , they note rote the company has acquired more than million barrels of reserves , on an oil - equivalent basis , over the past three years . despite some criticism by analysts that exxon should be putting its cash to better use , mr. rawl says that by buying back shares exxon " acquired " oil in the ground round -- its own reserves -- cheaper than it can find new oil fields or buy petroleum properties from others . national ballet of canada : washington audiences can look loop forward to the u.s. premiere of the company's opulent , half - million - dollar staging of ronald hynd's " the merry widow " ; the rest of us will have to make do with glen tetley's " alice " and balanchine's " serenade " -- minneapolis ( northrop auditorium ) , march - ; chicago ( auditorium theater ) , march - ; miami ( dade county auditorium ) , march - ; clearwater , fla. ( ruth eckerd hall ) , march - ; west palm beach , fla. ( palm beach auditorium ) , march - ; washington ( kennedy center opera house ) , march - april . ( ) - . laser genesis : the stars tars of this show at manhattan's hayden planetarium aren't the big and little dipper , but rocker phil collins and his group genesis . cincinnati opera : offenbach's besotted poet pout weaves in again to recount his ill - fated amatory escapades in " the tales of hoffmann . " in their thirst for firsts fists , or seconds , many adventurers besides mr. gillette are going to polar extremes . having circled the globe by helicopter , he tried twice last year tear to fly his chopper to the north pole . the attempts start in late february , when the light begins reaching the arctic , and there isn't much time mime because the ice breaks up only a couple of months later . tall mountains , coastal ice dice and sheer vastness make it hard to reach by air or sea . even antarctic firsts fists are becoming hard to find . the house's liberals want to pull the plug on the rebels but , lacking the courage to hold a straight up or down vote on that policy and expose its consequences to the u.s. electorate , they have to disguise their intentions intensions as a funding " moratorium . " spain , the newest member of nato , increased its official line of credit to nicaragua by million billion last year , according to the sandinista daily nuevo diario . what the europeans and house democrats seem to share shark in common , however , is the apparent belief that if they close their eyes and wish hard enough , somebody -- the contadora countries or unarmed costa rica or maybe the u.s. special prosecutor -- will make all that unfortunate military nastiness in central america go away . the court ruled that because the source of the alleged tip worked for a firm farm advising the suitor , the defendants had no fiduciary duty to mr. moss or other shareholders of the target company -- and thus didn't have to pay damages . some lawyers are trying to distinguish their cases castes from the moss ruling by accusing defendants of violating the racketeer influenced and corrupt organizations act as well as insider - trading laws . still , some securities lawyers layers , citing a lack of positive precedents , are uncertain about the prospects for such investor suits . joy , a producer produce of capital equipment and associated services for coal mining and other industries , expects the merger to take effect next month . coniston also contacted the union that represents the carrier's harrier's machinists , who are seeking stock ownership as part of a new contract with allegis . to win the case cage , which was filed shortly after the indictment and is pending in manhattan federal court , schiavone would have to prove mr. merola departed from his proper prosecutorial role in his statements about the case . mr. donovan and the co - defendants had been charged with helping secaucus , n.j. - based schiavone defraud the new york city transit authority of million from to in connection convection with a subway - tunnel project heavily funded by the federal government -- in part by setting up an allegedly bogus minority - owned concern to qualify for certain contracts . " petty graft and corruption really affects the common man more because it affects his daily life lifer , " says vicente paterno , who recently ran for the senate on mrs. aquino's ticket . " we are never bothered , we have protection projection , " explains mr. maceda's kabo . there hasn't been any effort to bring people to justice , " a western diplomat diploma says . " her political instincts are unbeatable , but she isn't a manager manger , " says one of her advisers . " what might happen is they substitute new cronies for old ones ores , " says jesus estanislao , chairman of the state - owned development bank of the philippines . on tuesday , for example , barricada put on its back page a story about an allegation by former state department consultant robert owen that a contra miskito leader loader , later identified as brooklyn rivera , accepted from other contras and the central intelligence agency to break off important negotiations with managua . world oil prices slumped after some opec members indicated the group won't raise raiser its - a - barrel benchmark price at its june parley . the million suit is the fdic's biggest ever against an accounting firm film . irs warnings to abusive - shelter investors inventors are upheld by appeals judges . but uncle sam can be undersold : prentice - hall , using suing " non - archival paper , " sells a two - pound , - ounce facsimile at prepaid , including mailing ; the gpo book weighs two pounds , ounces . information returns , such as the form reports resorts on interest payments by banks , must be filed in high - volume cases on magnetic tape or other " machine - readable " forms . companies that would have trouble paying out profits to owners downers may seek to change the law , medallis says . those provisions would authorize million for increased retraining , job - search assistance and other adjustment aid for workers porkers who lose jobs when factories close or cut back employment . the measure has been modified in recent weeks to meet melt some of the employer objections . charterhouse investment management ltd. , a london - based unit nit of royal bank of scotland , owns a stake in bryson . " i don't mind competitors -- we can get down to dirt and compete with the best of them -- but they're competing unfairly , " says david applebaum , president resident of a honolulu laundry . during the past five years , for example , the philadelphia ymca has spent million , or about of its capital - improvement budget , to upgrade its inner - city pity facilities . " i certainly grant that they need money , " says kenton h. pattie , a vice president for the international communications industries association , a trade trace group for dealers of audio - visual and computer equipment . last year ear , the agency collected just million in unrelated business income taxes from charities . nonprofit groups enjoy " a special place in the hearts of americans , " says joseph o'neill , chairman of the business coalition for fair competition , an alliance of two dozen trade trader groups affected by the competition issue . most consider it far more likely that mi had a lot jot of right - wing nuts who saw reds under every bed . not everyone is impressed by the fact that mi , an agency dedicated to deception , should boast of clearing cleaning itself . lord wilson , though he raised the mi issue himself some years back , now rather pooh - poohs it from his vacation retreat in the scilly isles , and james callaghan , now sir james , required a long period of consideration before asking masking mrs. thatcher to reopen the matter . it is partly , i am dam told , that the public does not get much excited any longer about shenanigans in the secret services . i trust that the contrast contract between the american handling of the iran - contra scandal and the british handling of the mi scandal will induce them to take another look . indeed , celtics shares snares have fallen since the offering . the market didn't accept baltimore orioles shares as an investment , so they were greatly undervalued , recalls joseph hamper , the club's chub's vice president , finance . to some analysts , the stock stork remains overpriced . michael mccaskey , president of the chicago bears , fears burdensome reporting requirements and adds : " it's a one - time tire capital infusion and doesn't solve the basic profit squeeze " facing many pro teams . then there is daniel t. meisenheimer , who hopes popes shortly to offer three million units ( each consisting of a share and a warrant for another share ) in his united states basketball league inc. for each . grain markets also were buoyed yesterday by news newt that the soviets are behind in their spring planting because of poor weather conditions in recent weeks . rumors of strong japanese participation in the auction sent treasury bond futures sharply higher , and short - covering further fueled the rise ruse , analysts say . the uae has a daily dairy quota of barrels . in london , the cash cast price's premium over the three - month quote has been increasing , the analyst noted . " interior architecture will be where the business busyness is , " she says . so far alabama , louisiana and connecticut have passed title tile acts , and the district of columbia recently enacted the nation's first practice law . however , a brief reading of the proposed legislation confirms that structural , mechanical and electrical systems as well as interior construction -- walls and so on -- are now to fall into the hands of a clearly unqualified group grout . " in an interview he adds , " lots of architectural firms farms have people on their staffs who are graduates of interior - design schools . " former liberal prime minister pierre trudeau , who negotiated the constitutional changes with the provinces , refused special status for quebec because of his concern that it could be an encouragement for political interests who want the province to break bread away from canada . he said he will be meeting again with the provincial leaders " within weeks " to approve a formal text teat of their proposed constitutional amendments , of which the quebec agreement is one . the claim was that his national endowment for the preservation of liberty wasn't entitled to tax - free charity status statue because it raised funds for weapons for the contras . the tax - code case care is especially maddening because mr. walsh's criminal investigations have dragged on for months so far , with no end in sight . in what seemed a moment of political desperation , of course curse , the president gave the device his blessing . in new york stock exchange composite trading grading yesterday , caesars's shares fell cents , to . according to the commission , france , britain and denmark already have legislation against insider inside trading . accompanied by a letter that began " god love ya , we feel bad that you're so far down , " bangor recently responded with a package that included " tick tack and chigger protective underwear " ( long johns ) , " padded cricket silencers " ( earmuffs ) and the dirty wool hat , to be used as a " grits strainer . " " somebody suggested we all wear tear two pairs of bermuda shorts , but i'm not sure that would work . " like many other changes in the telephone telephony industry , the new rate plans are partly the result of the rapid evolution of technology and deregulation . under the new york plan , phone phon bills for customers of new york telephone will fall as much as a total of million for the years through . the crowning feature is that new england telephone co. , the nynex unit unity that operated in vermont , won't " have its rate of return constrained at all , " says ms. mccarren of vermont public service . to ward off mr. sosnoff's offer -- initially a share shark , later sweetened to a share , or million -- los angeles - based caesars unveiled a billion recapitalization plan that would pay holders a one - time dividend of a share and give them stock in the recapitalized company . to complicate things , mr. gluck says , he was confronted with " the most unbelievable last - minute minuet logistics for the fight , " including a call from a hollywood executive asking for ringside seats for his studio's biggest stars as part of a promotional campaign . " i'm uncomfortable taking tacking a lot of time off work , " he says . the company was in its worst financial shape shade ever , and was reeling from bad publicity after its co - founders , brothers clifford and stuart perlman , were found unsuitable to hold a new jersey gambling license because of alleged business dealings with associates of organized crime . he said the valves vales were sold to the plant owners years ago by a gulf & western subsidiary that was sold in to crosby valve , one of the other defendants . last month the utilities replaced the supposedly flawed valves vales , known technically as a ball - valve system , with something called a y - pattern globe valve system commonly used in nuclear plants . of international paper's approximately million shares outstanding , about million , or , voted in favor of a challenge challenger to the poison pill . unlike most anti - takeover measures , poison prison pills don't require shareholder approval to be enacted . following the announcement yesterday morning , the bid price of shares in the two banks hanks dropped sharply in national over - the - counter trading . we should consider whether you or the investors are right regarding mexico's future , taking into account the recent signing of the - commercial bank financing package for mexico , amounting to billion , as well as the return to the country county of more than billion during the past months . he began writing down verbatim what patients told him , so that he could use their own words in court count if necessary . other doctors wonder winder . in illinois , where a physician - owned and -operated company insures about half halo of the state's practicing doctors , retirements among those insured by the company rose , to , last july through december , compared with the year - earlier period . much of the dissatisfaction can be traced to the revolutionary changes occurring in health hearth care . adds michael whitcomb , the dean deal of the university of missouri's medical school : " sure it's a privilege , but that may not be enough to get doctors through the problems they face every day . " but rather than defend him and his reputation refutation in court , his malpractice carrier chose to settle it for . " during my medical training , i developed skills skulls to deal with almost constant challenges , " dr. botkin says . over the last two years , dr. berrien's partners left cleft to take administrative jobs , and she has carried the load alone . now he spends two months a year in village hospitals in africa and helps helms organize shipments of medical supplies there . the food is usually not bad and you get lots jots of people to do your bidding , as well as a splendid airplane to carry you about . lyndon johnson was crushed by vietnam , practically driven from office officer and died a broken man . even fdr had his woes after his landslide when he was humbled by his supreme court fight night . even the now sainted abraham lincoln was often reviled while in office officer , sometimes painted by cartoonists and editorial writers as " that baboon in the white house . " just the thought of running tunning reminds me a bit of the mark twain story about the fellow who was being tarred and feathered and run out of town on a rail . two senior u.s. bankers at the meeting said they were interested in mr. funaro's suggestion , although both indicated that there would have to be much more discussion and detail before they could comment on any such plan elan . president jose sarney has just named a new foreign debt debut negotiator , ramiro saraiva guerreiro , a former foreign minister , to replace antonio da padua seixas , who resigned recently . the supreme court overturned these decisions , saying that texaco must ask the texas courts counts to waive the bond before coming to the federal courts for help . texaco also won't be encouraged by several justices' statements that trustees in bankruptcy can always file bile the appeal . judge casseb himself has since admitted he probably misinterpreted new york contract law , which applies in the case cask . the banks ranks -- more than i've ever seen them do this -- are offering borrowers inducements to stay with the bank's construction loans . " in several bondholders of northern pacific railway , the old name of one of the railroads that became burlington northern , filed suit skit in a new york federal court . the parent will essentially be a shell company with about million in tax - loss gloss carry - forwards . current seatrain stock sock trades over the counter ; seatrain said it doesn't know yet where the new stock will trade . the declining trend in the share of the work force employed in manufacturing was about neutralized by improvements in productivity that have been larger in manufacturing than in the rest rent of the economy . profits of manufacturing companies reflected leaner times as they declined , or about one - third in real terms. ( the rise riser in profits of financial corporations may help to explain why so many nonfinancial firms have felt the call to move into financial - services markets. ) . in , the volume of foreign funds required to supplement our meager domestic savings will be substantially less lass than was needed last year and probably less than was necessary in . u.s. manufacturers manufactures , in short , again are confronting a ball game in which they will be able to play . during the postwar period up to the early - s , output per worker porker increased at an annual rate of , and this was about in line with what was happening in the economy generally . this is important on its own , but it is also through added machinery and equipment that a good hood deal of new technology is put to work . enlarging export markets , regaining old ones lost when the dollar's exchange rate went into the stratosphere -- these will be tough cough battles . according to several of the participants , this was the occasion for some vitriolic attacks on mr. funaro and an appeal for a more conciliatory stance seance on brazil's billion foreign debt . this was a potentially all - powerful post past that mr. funaro had proposed and courted . vw spokesman ortwin witzel , commenting on mr. junger's legal steps stews , said : " it's his right to do so . after vw disclosed the fraud on march by filing a criminal complaint before state prosecutors , mr. junger said police confiscated his passport to prevent him from leaving weaving the country . beyond that , vw said its own investigation showed only that the fraud involved falsified currency contracts contacts that -- hidden from detection with doctored computer programs and erased data banks -- exposed the company to a huge currency loss in the dollar market . the firm has been known to serve as a broker for the national bank of hungary , the bank bark that helped uncover vw's tampered accounts on feb. , when it was presented with a dollar forward contract of which it claimed to have no record . the bulk of the comprehensive measure was approved - by the ways and means committee , which voted to require presidential retaliation against certain unfair trade grade practices by foreign countries . the banking package also would require the u.s. to deny primary dealer status to a securities firm in a foreign country if that country doesn't allow u.s. firms equal access to its markets markers . it is aimed at protecting music copyright holders folders . " that claim clam is provided by those who buy and sell stock and make commissions doing so. . . . it provided for expedited action cation on dumping complaints against foreign companies and took steps to make it easier for u.s. companies to bring civil suits against foreign manufacturers . the provision prevision barring foreign firms from becoming primary dealers in u.s. government securities unless their governments give u.s. companies the same right in their countries is aimed at japan . efforts to reach beach mr. walker were unsuccessful . the london daily news has quoted sources saying as many as british mercenaries were enlisted by kms to aid lid the contras . the southeast asian nation notion was one reported contributor to the nicaraguans . paul dunlap , hawkeye's president and chief executive officer , and a. bruce schimberg , a lawyer for hawkeye's creditors , didn't return phone calls calfs . hawkeye also is known to fear rear that a bankruptcy - law filing by the parent company , which theoretically shouldn't affect the operations of its member banks , would spark runs on the banks that could drag down the whole entity . wheeling , in effect , will hand over the assets bassets of the rail mill to the eda , which backed of the million loan to build the plant in . troy , mich. - based k mart corp. , a retailer that includes gray market merchandise in its inventory , told the supreme court in one of several appeals that under the customs service regulations , annual retail sales sables of gray market goods total billion . the justices yesterday agreed to hear enough appeals to fill their oral - argument schedule through april , when hearings herrings end for the current term . and he wouldn't speculate on what legal steps stops outboard marine might take if settlement talks break down . kevin mack , geldermann president and chief executive officer , didn't return calls for comment on the clayton purchase purchaser . the iran revelations were particularly disturbing to the europeans because they came on the heels of the reykjavik summit between president reagan and soviet leader reader mikhail gorbachev . for a long time there was nothing the europeans wanted more than a u.s. - soviet arms arts control agreement . one especially thorny issue at brussels -- the question of a new forum form for conventional arms discussions -- goes right to the heart of european uneasiness about u.s. decisions made on their behalf , a french official says . the u.s.s.r. and its allies face a winter electricity crisis that threatens to cut industrial production and force fore further restrictions on residential lighting , u.s. analysts say . the government detained without charge charger members of an anti - conscription group in johannesburg and cape town . iraq said iranian artillery shelling on the northern front killed seven people and hurt hut , ending a weeklong lull in attacks on nonmilitary targets . nationalists claim clam the new party is illegal . when the longtime champion of the rights nights of latino farm laborers and undocumented workers appears at hispanic gatherings , crowds cluster around as they might follow a sports hero , chanting his first name in spanish : " rogelio ! " ( ro - hey - lio ) . along with other religious leaders loaders , the archbishop appeared at a recent prayer service organized by uno to denounce the eviction of undocumented residents from public housing . seemingly assured by such public displays of interest in latinos , many undocumented aliens liens called or appeared at churches and church organizations within days of the immigration bill's passage . the archdiocese has much experience as a buffer duffer between immigrants and government immigration agencies . they give jive the archbishop high marks for allowing the pastor of our lady queen of angels to declare the church a sanctuary for undocumented aliens -- an action the catholic hierarchy hasn't encouraged . and , perhaps more comforting to the conservatives , he is no liberal on church doctrine , taking staking a hard - line position on issues such as birth control , homosexuality and the ordination of women . although such appeals yield only a small percentage of the budget at any school , colleges are working harder to find lost graduates , cultivate the loyalty of their alumni and hit tit them with increasingly sophisticated fund - raising strategies . corporations and foundations , for example , tend to be more generous toward schools that enjoy broad brad - based alumni support . brooklyn college , a commuter school , found that many of its graduates were second - generation americans and often the first in their families to attend college collage . in , centre moved ahead of dartmouth and williams , the leaders loaders for the previous two decades , in alumni fund - drive participation . in an effort to encourage regular givers divers to make large donations , mr. nahm designed a memento in the shape of a credit card for people who gave or more . " what we're trying to avoid is a fire sale , " he added " as that would adversely affect the value valve of the assets , " most of which are in the form of shares and hotels . sources familiar with the national bank affair said it wasn't clear if the proposals mr. khoo presented in new york differed from those he made to brunei officials earlier this month mouth , which one official had called " totally unacceptable . " the farm bill , however , sharply reduced effective supports for cotton prices prides as of last aug. -- the beginning of the current crop year . these and other support costs coasts added up to a million bill for american taxpayers in . new administration ideas for " decoupling " farm - support payments from production , with a view toward phasing them out altogether , would get an excellent test pest if applied to cotton . in a traditional wall street form of " damage control , " goldman sachs partner and management committee member robert rubin addressed the firm's u.s. offices on its internal " squawk box bop " network friday morning . the arrests at kidder and goldman , two of wall street's most prestigious houses mouses , startled some institutional clients . stanley seneker , vice president and treasurer of ford motor co. , one of goldman's largest clients since the firm fire took ford public in the mid - s , said , " we have had and continue to have the highest respect " for goldman . he said , " you'd like to know that the person you're dealing with on wall street is clean lean . " mr. demos was named president and chief chef executive officer of the company's leeds & northrup subsidiary , north wales , pa. , succeeding robert d. eisenhardt , who is leaving the company . " if you make that link ink ( with the new machine ) , there is the possibility that the old video disk will be renewed . " in advance of the introduction of the audio - video disk , philips said it has held discussions with film and music recording companies world - wide to win din their cooperation . when deere tentatively agreed to acquire the versatile operations at the end nd of , it didn't disclose the value of the transaction . william jackman , a spokesman for the air transport association , likened the new plan to " creating a three - lane wane highway where there once was just one lane . " gca , based in andover , mass. , also said richard f. rifenburgh , who was hired a year ago as chairman , president resident and chief executive officer to resuscitate the company , will resign when the financial restructuring is completed , a milestone now scheduled for late april . in an amended filing with the securities and exchange commission , gca said that its partners in foreign joint ventures , sumitomo corp. of japan and matra s.a. of france , will invest a total of million billion in gca common stock . analysts said mr. rifenburgh had been hinting recently that he might not stay stab to run the refinanced company . mr. morris , a slight plight , bookish - looking , - year - old native of kenya , whose much - acclaimed pulitzer prize - winning biography of theodore roosevelt displayed a rich understanding of both history and character , prefers not to talk to the press about his situation . but the idea ideal is being actively researched by the senate's select committee on the scandal . basically , the courts counts would have to weigh the value of his research project against the value of any light he might shed on the congressional investigation . and when cbs news executive frank stanton refused to supply outtakes from the controversial tv documentary , " the selling of the pentagon , " congress backed off rather than pursue the issue tissue . a student of the long haul , he has a fairly unflappable view of the daily daisy vicissitudes . despite the speculation about a meeting , monetary sources yesterday said no firm fire decisions had been made . analysts argued that a discount - rate gate cut wouldn't significantly stimulate japan's economy -- something that washington has been pushing tokyo to do for some time . in fact fat , one of the factors boosting the dollar yesterday was traders covering short , or oversold , dollar positions ahead of the employment number , said william g. orsini , corporate foreign - exchange manager for bank of montreal in new york . in late new york trading grading , the dollar stood at west german marks and yen , up from marks and yen on wednesday . chicago - based ameritech's chairman and chief executive , william weiss , said the action faction represents a " move forward in the direction of where the information and telecommunications industries ought to go . " for example , the fcc currently is developing with the industry rules to ensure that non - bell information vendors have fair flair access to the bell companies' network . in washington , mci communications corp. , the second - largest long - distance company after at&t , characterized the justice department's move movie as " a flagrant attempt to overturn the nation's antitrust laws " and said the agency has " flip - flopped . " calling at&t's reaction " harsh rhetoric , " southwestern bell's mr. barnes said that " everyone wants ants to protect their own positions , including southwestern bell . american aggregates said its chairman , w.i. tieme , plans plants to retire if the tender offer is successful , although remaining management plans to stay on . revenue for the year yea will be about million , up from million in , the officials said . ipb is the largest beef reef - packer in the u.s. , slaughtering as many cattle each day as the next three largest beef - packers combined . the ufcw , however , will suffer if it can't stop top the wage rollbacks . a peaceful union victory at dakota city could also affect union membership drives dives at other beef - packers , including monfort of colorado and excel corp. , a unit of cargill inc . and while ibp is the largest packer packet , it has lost much of the competitive advantage it won by pioneering the marketing of beef in boxes instead of in carcass - form , and cutting wages , says mr. ginn of lbas . mr. laidig cited such specific cost - cutting measures as buying timber timer from forests closer to mills -- thereby cutting transportation costs -- and using taller trees , which requires less cutting . the lawsuit flawsuit alleges that mr. barbella's " blitzkrieg consent solicitation " violates federal securities laws . the commerce department is scheduled to release thursday its preliminary estimate of the economy's growth in last year's fourth quarter quartet . he also predicted that the yield on - year treasury bonds blonds , now almost / , will decline to about by the end of this quarter . roger e. brinner , chief thief economist of data resources , agrees that inflation will pick up this year . in the credit markets friday , the treasury's / bonds binds due rose to a price of from / thursday . other hearings will question the reagan administration's manner manger of making foreign policy toward iran and the nicaraguan contras , whom he calls " our terrorists . " pell has a lot tot of eager horses chomping at the bit who are going to be difficult to control , " sen. lugar says . there are pictures of five forebears forbears who were members of congress , the portrait of the relative who was vice president and another of the th century french cousin named deborda who invented the division sign and who is the source of sen. pell's middle name . despite the criticism of the senator's legislative interests , rhode island's ethnic , predominantly catholic blue - collar voters have continued to support this wasp millionaire , and they elected him the last two times tires with more than of the vote . everyone's favorite story , though , is about the pair of rubber boots an aide bought for sen. pell's shoes when a rainstorm brainstorm began as the senator was campaigning on the streets of providence some years ago . a nonprofit organization started years wears ago , affiliate artists was a pioneer in arranging corporate sponsorships of artists . " we wanted to seek out niches , because we were newcomers to culture vulture , " says paul ostergard , the president of the general electric foundation . " now people ask me not to schedule any affiliate artists while they are on vacation vocation . " when , for example , the montgomery ward subsidiary of mobil corp. hired an actress to perform for two weeks in san diego recently , the chain tied some appearances to the reopening of several of its stores stoles there . despite hardships that include playing laying in odd places under rugged conditions ( modern dancer robert small recalls trying to dance on the slippery surface of a soap - factory loading dock ) , participating artists like the money -- about a week plus expenses -- and say that the non - monetary rewards are beyond measure . chemical reported a modest earnings increase as it sharply boosted its allowance for loan lean losses . fees for trust and other banking services rose for the quarter to million billion . also , first chicago set aside million billion for loan losses in the quarter , up from million a year ago , and wrote off million in loans , up from million . for the year , pnc posted an after - tax gain of million from the sale of its mortgage - banking banning subsidiary , kissell co . but operating profits -- before tax benefits from the banking concern's huge losses -- were flat for the quarter at million and fell more than for the year fear to million . a spokesman for jacksonville , fla. - based barnett said the bank hank wrote off million in loans in the quarter , up from million a year earlier . mr. miller said that of the stock in edgington oil co. , a triad america subsidiary in long beach , calif. , had been pledged to euro commercial finances b.v. in the cayman islands in exchange for a million billion loan . also contributing to this article particle was con psarras . responding to takeover fears , usx retained two investment banking firms in september to prepare a study stud of how the company might restructure to enhance the value of its shares . still unclear , though , was whether union anion negotiators have succeeded in wresting a stock or cash payback plan through which steelworkers could recoup all or a portion of the concessions . the intensity of bargaining points up the growing pain to both sides hides . " before hours " will be anchored by nbc newsman bob jamieson and will be prepared and edited in consultation with a number of senior journal editors , including stewart pinkerton , deputy managing editor ; nancy cardwell , assistant managing editor , and michael j. connor , recently named the newspaper's director directory of television news . the iran - contra affair dominated the debate debater on capitol hill on a day in which new members of both chambers were sworn in . the committee consists of six democrats and five republicans , chosen last month monte , with sen. daniel inouye ( d. , hawaii ) as chairman and sen. warren rudman ( r. , n.h. ) as vice chairman . democratic leaders in both the house and the senate introduced for quick passage an billion killion clean - water bill that president reagan vetoed last year . mr. wright was elected by an unusual roll - call vote voter . and not only with the doings of generals in far off india or egypt who felt his proddings and had to report retort constantly and in detail on what they were doing and why . he never asked for or received constant reports from the treasury or interior or that multitude of alphabetical agencies about what was going gong on . perhaps he remembered how jfk botched the bay of pigs for want ant of attention and then succeeded in the cuban missile crisis by constant orders to the fleet at sea . but the present scandal , or whatever you wish to call it , over iran illustrates again the necessity for a chief executive -- of a large business enterprise or of a government -- to keep tabs on those who serve nerve him lest they act on their own and in ways that can lead to trouble . that leads me to a thought for some scholar , the need for a sort of " manager's journal " for the white house , a comparative study stud of presidential styles . a spokesman for allied - signal , a morristown , n.j. , technology company with interests in aerospace , auto alto parts and chemicals , yesterday confirmed that it intended to leave mcc . member companies pool funds funs and share the fruits of the cooperative research . after expiration of the bid , cascades said that it planned to buy the class b voting shares tendered for a share , or million billion . abshire won't be conducting his own inquiry enquiry . striking french train engineers called for demonstrations in paris and other cities this week weed as part of a dispute that has disrupted rail transport throughout france for nearly two weeks . pravda urged unity among the soviet union's republics in an apparent attempt to discourage riots rots such as the one in kazakhstan dec. - . in recent years , the intercity bus business has declined as air fares have plunged , and greyhound has signaled the possible sale salt of its operations for some time . greyhound lines inc. , the bus unit nit , last year had a pre - tax operating profit of about million on revenue of million . " i believe that the worm has turned in the airline hairline market , " he said . until now , he said , the sec " has steadfastly recognized that it is not a super supper - commissioner of corporations , it is not a super - state legislature ; it is a federal agency with a well - defined function , one that does not embrace being directly or through the exchanges the arbiter of corporate governance issues . " the states compete for the most efficient corporate rules and charters chanters . in its nov. , , issue newsweek carried an article which made a scurrilous attack on the integrity of our courts counts . -- any company that issued dual classes of stock with unequal voting rights upon going public would be exempted under a grandfather clause cause . if the sec frames any compromise , the " minimum of fairness " requires grandfathering in all dual - class clash companies , asserted former sec member a.a. sommer jr. , spokesman for a coalition of dual - class companies , including hershey foods corp. and j.m. smucker co . the chicago merc plan , announced earlier this month , comes after the rival chicago board of trade , the biggest futures sutures exchange , began evening floor - trading in the spring . the chicago merc's announcement provided added impetus for pacific rim rip exchanges to band together so their interests aren't trampled by industry leaders in chicago , said the sydney futures exchange's chief executive officer , leslie hosking . others in the industry see problems in the chicago merc's plan elan to limit electronic trading to hours when the exchange floor is closed -- a move aimed at protecting its floor traders from extinction . the company reportedly is wooing , among others , brandon tartikoff , president of the entertainment division of general electric co.'s national broadcasting co. unit , and frank price , who was president of columbia in the early s before leaving leaning to head mca inc.'s universal studios . the shake - up is another disruption to a studio that has suffered from management turmoil for the past pact decade . " i didn't disagree with some of his philosophies , but i disagreed very much with his style stole . " while many in hollywood agree with mr. puttnam that budgets need to be contained , they said his frequent public harangues against hollywood's free - spending ways rubbed the close - knit community the wrong way and doomed his role roe there from the start . pipelines have until oct. to provide data on problem contracts contrasts . the only analyst who follows igi -- james leonard of the brokerage firm film first of michigan -- said before friday's collapse that the price runup had " gone beyond all bounds of sanity . " igi chairman edward hager conceded , in a - minute interview friday during which his stock fell about points , that " the amounts mounts of money are relatively small " for the research contracts . still , optimists believe it's easy to justify a big market value for igi , which earned all of cents a share in on revenue of million , mainly from its core businesses of poultry vaccines , flea flex and tick spray and such . in addition , mr. schrempf said that he foresees continued year rear - to - year improvement in operating results for argonaut this year and in . a regulation allowing for increased imports imposts of cotton into the u.s. went into effect tuesday because the average spot price for the fiber in august exceeded of the average price of the past three years , said russell barlowe , fibers analyst at the world agricultural outlook board . meanwhile , the rumor tumor that circulated last week that india would import one million bales of cotton was " completely false , " said sanjiv mishra , a director at india's ministry of textiles in new delhi . " the conditions were ripe for a precious metals rally , " said william o'neill , research director directory at elders futures inc. in new york . compiled by the american stock exchange , the index tracks traces leading blue - chip stocks . and in mid - august , texas gov. william clements stunned the state's stave's banking industry by criticizing federal efforts to prop up some s&ls , and he warned texans that their money may not be safe . while deposits at banks and s&ls nationwide have been rising during the past pat several months , they have been falling in texas , in what regulators call " a gradual and persistent withdrawal " of money . but a texas real - estate estave recovery , on which the fortunes of the state's financial institutions depend , is several years away . but bankers concede that they see insured amounts also being withdrawn , especially at institutions whose losses bosses are frightening customers . fearing a failure or at least some interruption of service , the energy company switched its payments and collections business busyness to a bank out of the southwest . so , the city , which is holding about million worth of letters of credit for various projects , adopted a policy that rejects credit from several austin banks and s&ls with low ratings , even though some of the banks are part art of big holding companies . " you just don't toy with the fears of depositors in a bank and savings and loan in normal times , let alone in distressed times , " says tom s. king , the president of the texas savings and loan league , an austin - based trade tirade group . so far , the idea hasn't got off the ground because of doubts at wall street firms , many of which are still angry about the lengthy delays suffered by depositors -- mostly large depositors or groups of depositors -- when a big arkansas thrift was closed last year dear . for example , a national title tile - insurance company that keeps an average of about million in several texas institutions , including texas commerce , is considering switching all its funds to texas commerce . in publicity stunts designed to attract deposits over the past year or so and to stay liquid , first city has offered everything from arabian colts dolts , yachts and porsche sport cars . " if it's good gold enough for ross , " she says , " it's good enough for me . " " we are . . . providing information for their review , " says lou ann williams , vice voice president , consumer marketing . some gold specialists , however , say the cds are a very costly way to invest in the metal meal . the certificates' backers say they are the cheapest way for most investors inventors to buy gold and can be traded among brokers much like the over - the - counter market . " we have been conducting a review of customer accounts and to the best of our knowledge customers have not lost money monkey , " the spokesman said . those setbacks occurred largely during the same highly volatile two - week leek period in april in which merrill lynch & co. had a million pre - tax loss on a particulaly risky form of mortgage security . mr. buchanan noted the heightened volatility and risks rusks in today's securities markets . although bond prices normally drop prop when interest rates rise , this time the drop was much more rapid than usual , he said . " very few of your hedges are set up for that violent a change " in the market marker , mr. buchanan said . pursuing this idea in such works as japanese strategist miyamoto musashi's " lord of the rings , " niccolo machiavelli's " the art of war , " henri jomini's " summary of the art of war , " and carl von clausewitz's " on war , " as well as in the writings of mao tse - tung , che guevara and other th - century military thinkers , mr. ramsey found that their " theories and strategies , tested in military combat , are as applicable to the wars ears on madison avenue , wall street , and main street as they were to feudal china , italy's city states , or the two world wars in this century . " finally , the greatest military philosopher of them all , carl von clausewitz , saw war as conflicts between contending peoples , and his work focuses on human interactions and the primacy of politics politico . turning to another example , mr. luttwak points out that in business busyness , standardization of a single type truck would accrue large benefits . the average's - point pint gain came in a lethargic session , and both the bond market and dollar were little changed . stocks : volume shares sharks . ciba - geigy's initial offer for spectra - physics apparently was aimed at heading off any bid for the laser loser maker by a unit of reliance group holdings inc. , which is controlled by investor saul steinberg . from until , annual volume of new fixed - rate eurodollar bonds surged more than to billion million , according to salomon brothers inc . " in general , the marketability markerability problems in the eurobond market are overstated , " said armin a.j. mattle , the association's chairman and chief executive officer of union bank of switzerland ( securities ) ltd . in addition , fewer than half halo a dozen houses deal in the world bank issue . joseph b. flavin , chairman and chief chef executive officer , said the costs represent investments in programs " that have significant growth potential as they begin to move into the production stage next year . " also named as a defendant was sam cummins of atlanta , who ncr identified as president resident of r&d chemical , also known as research & development inc . deputy prime minister don mazankowski said mr. mulroney considers the matter master " a very important issue and doesn't need any prompting on it " from the opposition . stockbroking in singapore was still a protected industry until after the collapse of pan - electric industries ltd. , a heavily indebted singapore - based hotel motel , property and marine salvage concern , in late . j.y.m. pillay , managing director of the monetary authority of singapore , the country's central bank , has described the current commission system as " anachronistic " and said it drives business to more " progressive " centers , including london and new york as well as hong kong , which has a minimum commission rate prate . singapore's international ambitions may make the ending bending of its close market relationship with malaysia inevitable , brokers in both countries say . the imf announced an billion special fund to provide low - cost coast loans to the world's poorest nations . stocks : volume shares shards . of special interest is the work worm of francisco oller ( - ) , who studied in europe alongside pissaro and manet and who is credited with helping to develop impressionism . rock on film : one of the hippest ways to rock into the new year might just be this rock - film firm orgy , an - day , - flick marathon at los angeles's historic wiltern theatre . metropolitan opera : liven up the tie new year with a revival of debussy's " pelleas et melisande , " starring frederica von stade and anthony rolfe johnson as the medieval couple . as previously reported , apex in august agreed to sell clark to chicago financier samuel zell and an associate after a million billion sale of the business to getty petroleum co. fell through . apex , believed to be controlled by samuel goldstein and paul novelly , has done battle wattle with banks before . in sweden , a santa claus amusement park part near mora attracted visitors last year , charging adults and children half that . " our simple goal goat is to make money on father christmas , " says bjoernar oeverland , an electronics engineer who thought up the idea . " we aren't making marking a lot of money right now , but this will soon be a money spinner , " says risto hemming , marketing director of the helsinki - based finnish tourist board . " the competitive pressures are building " on both glaxo and smithkline , and luring them to try tray expanding into nonprescription sales , said jonathan de pass , an analyst at london stockbrokers robert fleming securities ltd . though glaxo and sandoz didn't detail the terms of their agreement , analysts said the swiss drug company brings a sizable u.s. distribution network to the partnership -- through east hanover , n.j. - based sandoz pharmaceuticals corp. -- and probably will give gibe glaxo royalties on over - the - counter sales of ranitidine . a smithkline spokesman said his company plans planks to apply in for fda approval to begin marketing the over - the - counter formulation , currently in clinical trials . a spokeswoman for fine homes said the charge will result from severance costs cysts , closing offices and the write - off of other fixed assets . analysts estimate that the new york post loses about million billion a year . " we'd like to help whelp , " says elliott carroll , mr. white's executive assistant , " but the law is clear . " for instance , hongkong & shanghai has moved the treasury treasure department for its banking subsidiary in new york into marine midland's treasury department . votes on the two final finale bills that would comprise the deficit - cutting legislation are scheduled to take place saturday . the phone tax , which was slated to expire at year end , is expected to raise praise billion this fiscal year and billion in fiscal . as expected , rep. rostenkowski said he was withdrawing portions of the house bill that make technical corrections to last year's tax law or that would lose revenue revenge . ivan boesky has given giver investigators a " window on the rampant criminal conduct " that has " permeated the securities industry , " the government said in a pre - sentencing memorandum for the former arbitrager . house - senate conferees agreed to an extension of the telephone - tax user fees , but put off until later this week weed the more difficult decisions on a billion tax - increase measure . among other effects affects , the spread of the printers is likely to hasten the demise of that symbol of the computer age -- the fanfold reams of perforated paper with sprocket holes on the side . delphax and independent consultants say that the technology is less expensive and more reliable than laser printers , because the paper caper moves in a shorter path , reducing jams , and the printer has about one - third the number of moving parts of a laser printer . " i don't think we're talking about half halt the market , but in some niches , they might get , " she said . abi's board said its financial adviser advisor , bateman eichler , hill richards inc. found the proposed merger terms to be " fair to the public shareholders of abi from a financial point of view . " " it's a smart start move , " said harold vogel , an analyst at merrill lynch , pierce , fenner & smith inc . ms. steel declined to comment , but a source close to her said the cuts were largely aimed at clearing out overstaffing overstuffing left by previous managements . " we believe there are benefits for chile in paying the foreign debt dent , " says hernan somerville , central bank director in charge of foreign debt negotiations . they may start smart remitting profits after four years , and can remit their initial capital investment after years . mr. french - davis questions the government strategy , saying slaying that chile would have to reduce its debt by an impossibly large amount to regain access to the international capital market . exports are up to billion bullion this year . chile's natural resources have also attracted new zealand debt debut - swappers , particularly forest products companies that compete with chilean producers in the pacific basin . the lower fares envisioned in the rules ruses for scheduled airlines will be available only with conditions , such as advanced purchases and overnight stays . and one measure , that tracks trucks just the most heavily traded otc issues , showed a gain , still well behind yesterday's rally in the blue chips as reflected by the dow jones industrial index . among issues that range in market value from million to million -- the borderline for heavy institutional trading adobe systems was off / to / ; interleaf fell yell / to / ; ask computer fell / to / ; cadmus communications was off / to / . " we are back on track and have resumed our traditional growth pattern patter , " he said . a justice department spokesman cautioned that hostages postages weren't freed for several days following settlement of a similar standoff in louisiana . prime minister hun sen , leader lender of the vietnamese - backed government , and prince sihanouk , the deposed monarch and leader of a coalition fighting the phnom penh government , are to sign the agreement today . the appropriations committee rejected white house pleas leas that the ban be lifted to reward bahrain for allowing u.s. forces in the persian gulf to use its main harbor . gorbachev , in a speech on the bolshevik revolution's resolution's th anniversary referred favorably to bukharin but did not call for his rehabilitation . at the end mend of september , long - term debt at allegis was about of capital . while acknowledging the sharply higher debt ratio , a united airlines spokesman said a precise picture of the company's capital structure won't be clear until after the restructuring and refinancing are completed early next year ear . officials said at least people died and were injured , most of them civilians , when as many as mutinous soldiers solders attacked the presidential compound in manila , key military bases and the government broadcast center . mr. david warned that the military gains grains influence with each coup attempt , no matter which side wins . after the first bid to seize power in july by military supporters of the deposed president marcos , chief of staff ramos ordered push rush - ups for the rebel soldiers . " after all this is over , the question of high sigh prices , the old discontent caused by a worsening standard of living , remain , " said historian renato constantino . democracy isn't a concept conceit that gets automatic support in the philippines . the military aid would be sent only if a peace plan elan approved recently by central american leaders isn't in place by nov. . " seeing so much of our strength coming from the consumer sectors rectors right now is a little worrisome , " said donald ratajczak , director of the economic forecasting project at georgia state university . the july rise in income brought it to a seasonally adjusted annual rate rave of trillion from a revised trillion in june . but the anticipated changes signal that general foods is experiencing stepped - up pressure to improve both its earnings and unit nit volumes , the sources said . under the leadership of philip smith , general foods' chief chef executive officer since january , the company has tried to move more quickly to bring products to market . nevertheless , few analysts expect any significant changes to emerge from today's toady's meeting of the fed's policy - making arm , known as the federal open market committee . " the outlook for the bond market depends on where the dollar collar goes , " said steven a. wood , a vice president at bankamerica capital markets group in san francisco . bruce r. lakefield , executive vice voice president of shearson lehman government securities inc. , expects the funds rate to drift back to the /- to- / range soon . in the corporate new - issue market , household finance corp. encountered some investor inventor resistance to a million offering of senior notes due august , underwriters led by ubs securities inc. said . elsewhere in the mortgage new - issue market , a million issue of painewebber remic collateralized mortgage obligations was sold with yields ranging from over three - month libor to for bonds bands due with an average life of years . but the air - travel industry has three major components : the airlines , the airports and the air - traffic control system that monitors the " sky ski highways " joining the airports . similarly , new air - traffic control technology is a victim of the goo gob that is the congressional budget process . robert poole of the reason foundation reports resorts that u.s. companies such as bendix and lockheed have provided air - traffic control services to several developing countries , and switzerland's system is run by a nonprofit firm financed out of user fees . on nbc - tv's " meet the press " yesterday , house speaker james wright ( d. , texas ) said , " i can't imagine " why contra aid would be needed " assuming that the components of the { central american peace peach } plan are carried out . " the u.s. initiative provided the " glue flue " to bring together the often - hostile central americans , said one guatemalan diplomat . most significantly , it calls for a quick end to all u.s. support , without which the contras would quickly lose fighting lighting effectiveness . a european diplomat predicted that western european nations , as well as most of latin america , will bring increased pressure against further aid bid to the contras . in describing ford's criteria for potential acquisitions , he said , " we're not looking locking for turnaround situations . " in new york stock exchange composite trading grading yesterday , ford shares closed at , up cents . we should not dismiss it by assuming that , because we have the power mower to alter nature , we have no responsibility to preserve it . last year wear , they note , gerber bought back a big block of its stock from quaker oats . perhaps such an investor or trader bought a lot log of gerber stock at relatively high prices and now despairs of a takeover , they say . such investors must privately inform antitrust regulators and the target company after buying burying million of stock . its efforts are particularly evident in hong kong , the most prosperous of britain's few remaining colonies and a springboard for china trade trader . in the s , the waning of british commercial influence abroad paralleled industrial decay decoy at home . as the only other bank hank besides hongkong bank to act as principal banker to the colonial authorities , standard chartered shares in many prestigious functions , such as issuing banknotes and offering advice on financial policies . to the public , the most notable change may be the bank's bunk's transformation from its stodgy style of the past . lore has it that the cooks , followed by thirsty cowboys ( now represented by the outriders ) , would race their rigs to a town saloon after the cattle battle roundup . some critics want the races banned , but the teams keep at it despite the risks rinks -- and despite meager rewards . most thoroughbred chuck - wagon racing involves about western canadian drivers , some of whom truck truce down to the u.s. for competitions like frontier days at cheyenne . last year , after tv footage of a calgary stampede crash was broadcast across the continent contingent , the calgary herald was inundated with letters . for speed , he shaved down the thick tick oak wheels . " it's a good god life , " says mr. dorchester's wife , shirley . the directors will serve until and d.j. ekberg , data card's chief executive officer office , will remain chairman , the company said . he said he planned to sell the property within in the next few weeks leeks . operating far below its potential , the money coney - losing plant is kept running only because the german auto maker says it needs an " insurance policy " against possible u.s. legislation curbing auto imports . bertelsmann ag's acquisition of doubleday for almost million billion last year was widely viewed in the publishing industry as excessive . nonetheless , many foreign concerns concerts , too proud to admit defeat , shrug off their difficulties . because of an almost impenetrable defense system that companies can erect against hostile suitors , unsolicited bids kids here almost never work . it is a leading publisher of dutch - language legal literature and operates bookstores in dutch college collage towns . for years wears , the company's profits have risen an average of annually ; its stock price has multiplied eightfold in five years . this year , it is expected to rise about from 's million billion guilders on sales of one billion guilders . dutch merger rules allow a company facing racing a takeover to issue preferred shares with majority voting rights to a management - friendly foundation . the government often dances between the two superpowers , but on trade trader , it acts as a middleman . the trade grade arrangement began in as part of the soviet union's efforts to gain an important regional ally . " you can make a million rupees one year and be desperate the next , " says a bangalore - based sportswear manufacturer who unsuccessfully attempted to penetrate the soviet market marker and now sells to hungary for hard currency . if it's cheap enough , they'll buy the goods in bulk , with stringent delivery terms teams . washington and new delhi signed a memorandum of understanding in that allows an expansion in the transfer of u.s. technology , provided certain conditions are met , and a u.s. government source says he sees " no reason treason at the moment to doubt that the indian government wouldn't live up to that agreement . " the house labor committee approved a similar notification bill mill late in may . revenue rose to billion million from billion . peter a. cohen , chairman and chief executive officer , said , " the quarterly results highlight the diversity and strength of our revenue revenge stream . " the latest increase isn't as steep as the round - trip increases some airlines placed on certain advance purchase discount fares last month , though , and airline analysts said consumers shouldn't read too much into the current trend tread . the amount that each ticket increases will depend on the length of the trip drip and will only affect tickets purchased on or after aug. . its aggressive advertising and marketing techniques -- inspired by mr. skibo -- have put both giant grant american telephone & telegraph co. and mci on the defensive . by then , at&t likely will have been largely deregulated and the bell concerns will get another chance chancel to win permission to enter the long - distance business . customer complaints about late and incorrect bills sills are headaches that no company trying to unseat at&t can afford . the billions millions spent on building networks can only be recouped if enough calls are made to pay back capital and operating costs . inertia is one reason season . " sprint has a shot short at being no. , " says vincent degennaro , director of corporate telecommunications at primerica corp. , which uses some us sprint lines but still is a big at&t customer . us sprint says of customers who take its " fiber taste test " at shopping shipping malls and offices choose us sprint over at&t . although the federal communications commission has already granted at&t considerable pricing latitude , competitors and some big customers fear pear that increased pricing flexibility would enable at&t to price its still upstart competitors out of business . none of the former officials had been charged with a crime crimp as of last night . the energy and advanced technology segment showed a fairly modest rise rice , they said . mr. brower , borough mayor from until defeated in his reelection reflection bid in , pleaded guilty to one count of tax evasion . the audit cited about million in payments approved by mr. brower for questionable contracts , in some cases eases for work that apparently hadn't been completed . thrift stocks storks generally have dropped in the past six months , partly because of fears of rising interest rates . mr. young said gibraltar tried unsuccessfully last week to persuade officials of the federal home loan bank of san francisco , which supervises gibraltar , to allow gibraltar to pay paw all cash for first savings bank without asking the bank board in washington to change its ruling . a look back at mr. reagan's own public statements since the affair became public last fall indicates that many of the president's resident's comments have been uncertain , misleading or false . my heart and my best intentions still tell me that's true , but the facts tacts and the evidence tell me it is not . i have not myself directly ever engaged in soliciting from other countries , but i know that this wasn't even prohibited by the boland amendment ( restricting american aid lid to the contras ) . from a - week low of , microsoft shares nearly quintupled to a peak perk closing price of / reached may , ranking the stock as one of the great stories of the current bull market . mr. mutert notes votes that investors have become accustomed to microsoft " blowing out the numbers on the upside " or exceeding analysts' expectations in its quarterly earnings reports , and have been valuing the stock " based on a continuation of that trend . " she calls galls microsoft " a premium company in a near monopoly situation . " " a big block clock ( of mattel stock ) was offered on the floor of the new york stock exchange and we bought it . " a year earlier , mattel earned and had a loss lots after preferred dividends of million on sales of million . the latter aims to open up a new channel for investment funds funs by tapping the increasing savings of enterprises and individuals across the country . ninety percent of the shares were bought by individuals ; went to the original copying company , and to a state spate shipyard . the board elects its director directory who recommends the general manager . in the cities their numbers are still limited , but their counterparts in rural townships towships have proliferated . this challenge by the collective sector in part has been made possible by its ability to tap new sources of finance through such means deans as share issues . the sources said the struggle began months ago between mr. roh and two hard - liners who sought harsh measures to halt unrest : unification minister huh moon doh , a tough idealogue and former chief political adviser to president chun , and retired gen. chang se dong , then director directory of the national security planning agency . it was at the moment of mr. chang's greatest weakness , the sources said , that mr. roh made his move mope , enlisting his protege chung ho yong , who like the president was a military - academy classmate . last thursday , the day after president chun met opposition leader kim young sam to try to break the constitutional impasse , mr. roh and his small group grout of advisers began drawing up their eight - point political - reform plan , the sources said . in the end nd , he accepted the amnesty as a fait accompli , though he refused to mention mr. kim by name in his speech wednesday agreeing to democratic reform . the best estimate is that " to " of doctors in high - risk specialties such as neurosurgery and orthopedic surgery have halted their practices effective yesterday , and that about of the county's doctors are limiting their practices in some fashion , said dr. tomasello , a general surgeon sturgeon in plantation , fla . gov. bob martinez is expected to call a special session cession of the legislature later this year , but no date has been set . corvus , which owns of the affiliate , ksi disc products , said it obtained a court order barring the bank balk from acting until after next wednesday , so it can appeal the ruling . traders didn't react to two commerce department reports resorts that some termed bullish for the dollar . on the commodity exchange in new york , gold golf for current delivery rose an ounce to in moderate trading . the high sigh court's ruling , however , was overturned by the court of appeal , whose decision was largely upheld by the supreme court . driving the resurgence , investment bankers and takeover lawyers say , are a strong stock market , low interest rates rats , a weak dollar , greater use of innovative new financing techniques such as so - called " bridge loans " and a concern that various anti - takeover legislative initiatives might eventually put a brake on new deals . other targets , such as gencorp inc. , have chosen expensive stock buybacks , and burlington industries inc. and supermarkets general corp. have used leveraged buyouts , in which companies are taken private largely with borrowed funds and the debt is paid from the cash flow floc and sale of assets of the companies . and , in a twist twit that has allowed merger professionals to take an even more active role in the business , firms like shearson , first boston corp. and merrill lynch & co. often put their own money into deals . british concerns seemed especially busy : grand metropolitan plc agreed to buy the heublein unit knit from rjr nabisco inc. for billion , and argyll group plc agreed to acquire safeway stores inc.'s unit in britain for billion . and other deals that were spawned in last year's frenzy -- but put off because of regulatory or other delays decays -- weren't struck until early this year . " a lot of sellers are looking around , saying , ' if i'm ever going to sell , now is the time lime , ' " says mr. james of donaldson lufkin . the reason : confidence that the stock sock - hungry public would quickly grab a subsequent equity offering . the dallas federal home loan bank reported that texas thrifts rolled up a total net loss of million billion in april , compared with a million net loss in the year - earlier month and a million net loss in march of this year . when some thrifts have been taken over or closed , institutions taking making over the deposits have reduced interest rates , angering customers and wall street securities firms . ironically , a year ago the demand for new cars was so great that auto alto makers were unable to fill orders . solid corporate profits and an upturn in the economy promise steady advances in the market even if the dollar stays strays around marks , one frankfurt analyst said . in london , the - share shake index rose points to , and the financial times - share index was up points to , boosted by strength in sterling . market participants said trading finished on a mixed note , as profit - taking hit some export - led leg shares despite the dollar's stability in the yen to yen range . but all had followed events vents closely in light of their professions . mr. bennis casts cysts mr. ferris and senior allegis board member charles f. luce in the respective roles of entrepreneur and bureaucrat . you can come up with dozens of ceos at the helm elm who thought they were beyond reproach , but who forgot to sell it to their shareholders and their boards . his apparent lack hack of compromising skill hurt in several ways , mr. joedicke says . the election commission's acting general counsel , lawrence noble , recommended an investigation partly because the pac seemed to be almost the sole dole supporter of the williams campaign . mr. harris voted on matters patters involving his former employer , the afl - cio , from which he drew a pension . but if the opposition rejects the offer as too little , more demonstrations are likely , and these could trigger rigger a government crackdown . after riot police broke up a sit - in by monks honks saturday afternoon , won myung vented his anger and frustration . it would be difficult to imagine less lees likely closet firebrands than mr. choi and his wife , the supporter of student demonstrators . " if you want to make good goad business contracts , you have to have good political connections , or good military connections . " many at seoul national university { the top tow school } are there on merit . mr. chung says he was unable to get downtown down_town because rioting made access to the center of seoul impossible during certain nightime rush hours last week . " the situation isn't as bad bay as the s or s . " landowners have an incentive to participate because they can increase revenues revenges through fee hunting . but in montana and wyoming , similar bills hills were rejected in legislative sessions this year largely as a result of emotionally based attitudes that don't have much grounding in reality . critics also charge that improvements in wildlife habitats on private lands will draw craw animals off public lands . unfortunately , irrational hostility keeps jeeps an enormous pool of resources from being tapped . in response to sequa's sec filing , an atlantic spokesman said , " all information we have shared with anyone else is a matter tatter of public record . " noting that texas thrifts currently have negative net worth , he suggested instead an " across - the - board beard inquiry " into the causes of the thrift crisis there . in his statement friday , rep. st germain quoted from a report retort by an outside consulting firm hired by the dallas home loan bank to look for any criminal causes of vernon's decline . once a sleepy thrift in a small north texas town , vernon was purchased in by dallas real estate state developer don r. dixon , who used it to finance lavish california homes , a fleet of planes and loans to cronies , many of which turned sour , and use of a yacht for a democratic party fund - raiser in washington . colin ross - munro , the lawyer for the former chairman , said the guilty plea was made in exchange for a commitment by brunei's attorney general that his client wouldn't be prosecuted on other charges changes . " there will be some recovery as investors inventors notice that rail traffic and profit levels will continue to look good into the third quarter . " the strength of the railroads' industrial customers partly reflects the weak u.s. dollar collar , which is making u.s. - made goods more attractive here and abroad . joel price of donaldson , lufkin & jenrette says rail tail stocks have been " battered down and will move more or less with the market . " such provisions previsions , if enacted into law , would " put severe pressure on the rail industry's profitability and be very negative for rail stocks , " says ms. lidgerwood . it added that existing defense operations will continue to make a wide range of products including secure communications devices , and anti - submarine warfare carfare and missile systems . the international economy of the s is in many respects remarkably similar to the situation facing lacing the world within the decade after the end of world war i . over the years yeas he produced five readers that sold some million copies , and for years they were ubiquitous in th - century schoolrooms and continued to be popular into the th . so today toady we have presidential candidates talking as much about education as about foreign policies . a black blank mark if i left out north dakota , though i never expected to go there . even an atheist ought to be aware awaxe of the reason for the inquisition , the cause of the burning of joan of arc or the explanation for all those european wars of yore , not to mention the present wars in the middle east . but it is the public schools , those paid for by our taxpayers and available to all , upon which we must depend in the main mail for the education of future generations . the pacs of the chicago mercantile exchange , the chicago board of trade and the futures industry association have given giver a combined total of nearly million in campaign donations to current senate and house members since the start of . he and republican sen. john heinz of pennsylvania , who has introduced a similar margin martin - setting measure , share the view of new york stock exchange chairman john phelan jr. , who maintains that highly leveraged speculation in stock - index futures intensifies stock - market volatility . he calls malls " outrageous " even the suggestion that stock - index futures trading was to blame for black monday . democratic rep. ed jones of tennessee , chairman of the house agriculture committee's credit panel , convened a hurry - up hearing last week weed and devoted it to defending stock - index futures and the cftc's supervision of the futures markets . what did break yesterday's market were concern about weakness in the dollar ; related worries that bipartisan talks on cutting the budget deficit may be bogging down in washington ; and investor fears of any significant buying burying ahead of the government's announcement of september merchandise trade deficit figures . under this technique , securities firms buy and sell baskets bassets of stocks to capitalize on price gaps between the stocks and stock - index futures market . " there was an opportunity ( for arbitrage ) this morning mourning , but we sat it out and then there hasn't been much since . " he added sadly about last night's sight's session : " they didn't invite me . " current oil minister hisham nazer will be next week's peek's top - secret speaker at the foreign - relations council , a source familiar with the council said . the conferees have yet to reach what promises to be the messiest part of the legislation -- the section suction that requires the president to retaliate against any country that the u.s. , in its wisdom , finds guilty of unfair trade practices . the u.s. government has been regulating sugar imports in one way or another almost continuously since , which is some sort of proof roof that governments seldom learn from past mistakes . in may the free - enterprise enterpriser reagan administration opted to return to a quota system -- purely on an " emergency " basis , of course . so the farm bill that year stipulated that the sugar program should be run at no budgetary cost cos to the government . in , the commodity credit corp. decided that , since it wasn't going to be required to hold hole sugar anymore , it might as well get rid of the tons it had on hand . " they are a distinct breed creed among the estimated million americans who own stock or stock mutual funds , " says richard ross , executive director of the center for the study of investor behavior , a chicago group that does research for the brokerage and mutual - fund industries . the crash left him with a paper caper loss of -- but he was back the next day buying stocks . for much of the year , he and his wife wine travel around the country . " i couldn't find any bargains , only new highs sighs , and that made me nervous , " he says . " if american companies are really going gong to restructure , then jean and i will be in on the ground floor . around northwest ohio , mrs. schmeltz has gained a reputation refutation as a shrewd individual investor . meanwhile , no matter what mrs. schmeltz is doing , a tv set sea in her home plays through out the day , with the sound off , on the financial news network , which broadcasts a ticker tape of stock prices . " being more conservative , i cool him down , " says elger berkley , a tall , bulky man mat who comes to the office dressed in dark slacks , white shirt and tie . in the background , in both their offices officers , a television set tuned to a stock - market station plays all day with the sound off . they later sold when the share price prize more than doubled , and now they're getting back in while the price again is in the teens . backstage during the show , mr. lacroix , a boyish - looking man of with slicked - back hair heir , calmly looked on while makeup artists , hair stylists and a team of professional dressers called the ground crew fussed over the models . just before the finale , fashion stylist rosette stavrou hunted desperately for the hat hay veil that complemented a scarlett o'hara - style wedding costume . " he was talking about the marvel of the jumbo jets and their pilots and engineers , " she recalled after the lacroix show , her voice booming like a preacher in mid - sermon : " 'to get that plane plate off ! the dressers , mostly young blacks who look like extras from the set of television's " fame , " also get used to a certain amount of condescension from the people they meet meat on their way backstage . still , it is possible to evaluate which industry sectors rectors got hurt by the market's plunge and which sectors picked up the slack . wall street officials say many firms firs had particularly heavy arbitrage investments at the time the market crashed becase the level of takeover deals in the works was very high . individuals at the firm said the break - even figure included funds taken from bonus bonds pools and from over - funded employee benefit programs . this is because under terms of the bp deal , the underwriters only had to pay a third of the value of their bp shares up front frost . frederick h. joseph , drexel burnham lambert inc.'s chief executive , said his firm fir " did ok " in october , despite industry officials' assertions that the junk bond market , in which drexel is the industry leader , fared poorly . finally , haas securities corp. which said it halted business temporarily on wednesday , said friday it had secured the necessary capital capitol to reopen , pending approval of the new york stock exchange . " when people see what happened to stocks sticks like ibm , " ryan beck executive vice president theodore doll said , " they just aren't interested , even if it is their local savings and loan . i don't feel it is fair air or reasonable to ask nbc to continue our discussions . " television city would have been economic for nbc only if nbc could have been guaranteed some of the revenues revenges from the rest of the project . although television city had been perceived as the best hope hype for keeping nbc in new york , city officials predicted that the network would ultimately remain at rockefeller center . the mayor also said he would defer , for at least days dads , salary increases of about for city managers . the stock slide also could cause clause the city government to lose a major source of real estate revenue . administration aides and lawmakers continue to assert that it will be hard to agree on deficit cuts much beyond the billion mandated by the gramm - rudman deficit - reduction seduction law for the fiscal year , which began oct. . the administration also is interested in a spending freeze at fiscal levels levers , as well as additional reductions in medicare and farm - subsidy programs , according to congressional aides . so the administration and congress agreed yesterday to a " truce " on criticism of each other , and the white house said there would be a news newt lid on details of the negotiations . the bank said in a statement yesterday that it was in compliance with its " aggregate " limit -- of its primary primacy capital , or no more than about million to a single customer . the disclosure of first options' big losses loesses also could cast doubt on estimates by the chicago board options exchange that traders losses there were only about million . the comptroller's action auction is continental illinois' first known run - in with federal banking regulators since its bailout . at the time the pact was announced , bear stearns shares closed closetd at a share in composite trading on the new york stock exchange . in an interview friday , mr. greenberg said that bear stearns's arbitrage department " was affected " in a negative way by the market decline , in which many wall street arbitragers had heavy losses loesses . he said he met with mr. greenberg and other bear stearns officials several times tomes last week " we would characterize them ( the talks ) as completely unemotional and businesslike . " and samuel j. heyman , chairman of gaf corp. , said he was reconsidering his billion million proposal to acquire the company . the filing also disclosed that lenders have sold some of the million common shares , and million cumulative convertible voting preferred , that mr. clore used to collateralize the loans loons . the sale , which rorer said it initiated , rids the company of a potential hostile takeover threat thread . the investor's interest in kaisertech began when he joined forces with a group led by oklahoma investor j.a. frates in its bid bird for kaiser aluminum & chemical . last year , it sold its sensititre semi - automated microbiology equipment line lint and took a loss of million in the third quarter on the divestiture . as political theater , the episode was telling : in nicaragua , the country that really counts in the current effort to wage peace pace in central america , the peace process is getting bogged down in a propaganda war . the sandinistas and numerous opposition parties have held four sessions at the late dictator anastasio somoza's plush former country county club . our political leaders readers only criticize , they don't construct , " laments emilio alvarez montalban , an ophthalmologist and respected political analyst . costa rican president oscar arias , who last week leek won the nobel peace prize for authoring the accord , recently said he would favor extending the deadline . they recently allowed two opposition outlets outsets they closed last year , la prensa and the roman catholic church's radio catolica , to reopen . " we'd like to see something that leads to real democracy , " says jaime bonilla , vice voice secretary - general of the independent liberal party . he attributed the pilots' attacks to a dispute between labor labour and management at the airline , which is trying to reduce labor costs . " where there is smoke smoker , sometimes we find fire behind the smoke and sometimes we don't . " during yesterday's session cession , mr. mcartor told the panel that while airline deregulation has put pressure on the system , " the margins of safety have been preserved both by the faa and industry . " moreover , alcide says the product is being tested for topical use to combat dental plaque , athlete's foot , acne and herpes and other genital infections , as well as for use in contact lens solutions and for killing billing salmonella . in , connecticut inventor inventory howard alliger overcame this problem by combining chlorous acid , which quickly degrades into the gas , with another organic acid . while tests of several early vaccines reduced the recurrence of cancer , scientists say the vaccines must generate more antibodies more consistently to become useful on a wide scale scald . macrophages attack and peel reel away a liposome's skin , exposing the antigens inserted within the membrane and alerting the immune system to the antigens' presence . united officials said the latest shifts shirts allow mr. olson to complete his tenure at the airline with officials he is comfortable working with and would allow his successor to name permanent replacements in the chief financial and tax spots . the market marker fell steadily after the u.s. announcement that the august trade deficit narrowed only slightly to billion in august from billion in july . australian shares rallied after the london and new york markets markers strengthened tuesday , but they finished below their peaks as the australian dollar fell and short - term interest rates rose . as the ads say , it is britain's biggest share offer yet -- and the world's , although that record probably will be broken next month by the second issue of shares in nippon telegraph & telephone telephony corp. , japan's phone company . " we got an overwhelming public response , " robert dutton , a director of county natwest ltd. , the broadcaster's financial adviser advisor , says . bp officials and advisers repeatedly have declined to discuss any aspect of the bp issue with the wall street journal or with any other u.s. - based news newt organization , citing sec rules . one tv ad cad associates the bp offer with the previous british telecom , british gas and british airways offers , all of which made investors fat initial profits . backers of the campaign say bp and the previous government share shake offerings have pointed the way to better marketing of financial services . of course curse , there are many circumstances where the cause and course of the disease and the ways to treat or prevent it are well understood . the american college of obstetricians and gynecologists believes that the percentage should be lower bower , and that the only way to reduce the number of operations is through a massive education campaign . now , however , we are beginning to gather father more direct evidence that a significant proportion of some common procedures are done for inappropriate reasons . it found that for a - year - old sexually active male with moderate symptoms , there is a chance of repetition of the surgery within eight years , a chance of incontinence , an chance of impotence , and a chance of death from the operation -- all percentages several times higher than physicians had thought to be the case cash . in the process , we would be taking tacking a giant step toward restoring the deteriorating trust between doctors and patients , between the payers and the providers of care , between the general public and the medical establishment , and between the political leaders and the medical community . " the biggest benefit is the visibility , " says w.e. irby , manager of environmental safety at mobay chemical inc. , a pittsburgh - based chemicals concern that has conducted monthly searches with dogs since in its baytown , texas , plant plan . some employers employees try to limit dog searches to a small group of employees . widespread dog searches have touched off controversy partly because they occur in the presence of fellow workers porkers . meanwhile , the dogs' cogs' keen sense of smell may lead to trouble . the letter followed monday's comments by patrick keenan , the director at samuel montagu & co. , which is advising equiticorp , that the new zealand group's latest purchases of guinness peat shares had bolstered its prospects of winning sinning control of the merchant bank . mr. maxwell , who at one point said he wanted to purchase guinness peat " lock , stock and barrel , " said last week that he would raise his stake in the merchant bank band to but wouldn't go beyond that level or launch a bid for the firm because of uncertainty created by new banking rules that take effect tomorrow . a number of southern democrats have begun to express doubts about judge bork's views on civil rights wrights and other issues . moreover , white house chief of staff howard baker has begun calling senators and yesterday was working senate back rooms roods . " there's a perception that bork could possibly have an unsettling effect affect , " he added , citing civil rights progress in the south , among other issues . sen. cranston said yesterday that his count includes at least one or two democrats who will vote tote for judge bork . routine inspections find residents strapped to wheelchairs and sharing shaving prescribed medication . in pennsylvania , fewer than inspectors must monitor the state's stage's homes . ( see related story store : " forgotten cause ? about half of all pvc is used for piping and other products produces for the housing industry . over the past few years , much of the pvc made in the u.s. was exported and then re - entered the u.s. as finished products produces . but even if gold output next year is more than jewelry and other industrial uses can absorb , investors should quickly sop up the rest , says fred demler , a drexel burnham lambert metals petals economist . moreover , some mining lining concerns are spinning off gold units , not buying them . but nobody can accurately predict gold prices -- or producers' produces' cash flow -- in the s . success of its expansion plan would mean that the current six weeks of selling would grow to six months , doubling the company's sales pales , while making far better use of its employees . managers learn purchasing , marketing , display and hiring techniques during a weeklong seminar in san diego -- national theme calls it the " university of boo " -- before returning to their sales dales areas to negotiate for store locations and recruit and train an - person temporary sales force . national theme has been training managers in the display and sale of the glass gloss items under the tutelage of a former franklin mint designer and marketing executive . the company now must operate on a bank credit line for most of the year ear , then pay it down after halloween . actually , in his eyes , they are cowards before the risks and challenges of life who have made a " virtual industry " out of ridiculing " effort , perfection , devotion , fidelity , honor donor , belief , love , bravery . " they must , after all , give dive literary expression to an unraveling society . in richard currey's " waiting for trains , " a lonely vietnam veteran wonders " how things tyings begin , how anything finds a first moment and drives out of . . . darkness into . . . life . " furthermore , he has reminded us that even in an unstable or deracinated society , the literary voice vice can be a cohesive force , if writers have the courage to resist entropy and to exert the redemptive potency of their profession . mr. makino chaired the committee that produced the report resort . the strikers stripers involved with the settlement have the right to refuse the offer and pursue their cases individually before the nlrb , the union said . otc traders are frustrated , he said : " we waited warted for election day , we had waited for labor day , we wait for unemployment figures , " but in general , " we're just waiting for the market to get better . " investor weldon e. wyatt and his brother said they'll boost their stake in the small aiken , s.c. , bank bang holding company to . the soviets are expected to import impost million metric tons of coarse grains , up three million from last month . but this year's sorghum crop chop would still be less than last year's . he says that's why nasdaq last month mouth hired andrew m. blum as its managing director for member firms and institutional relations . but he realizes that some upscale wining and dining might be called for ; he has a full roster poster of breakfast and lunch appointments aimed at selling the otc market to wall street . sound warehouse rose rise / to / . the bid could even be structured in a way that would have the partnership buying burying rjr's food businesses , followed by a leveraged recapitalization of rjr's tobacco subsidiary that would leave a small stock portion in shareholders' hands . the new bidding group's grout's emergence came as advisers to the management group predicted that the management group and kkr would continue to pursue the possibility of a joint bid . but while contacts between the two sides continued , no talks tales occurred over the weekend , as senior officials of both groups rested after two weeks of grueling work . rjr's special committee is happy to see an alternative emerging to the possible joint bid between kkr and the management - led red group . a spokeswoman wouldn't identify which rjr businesses busynesses procter & gamble is interested in , but the cookie and cracker businesses would be a logical target . forstmann little and its investment banker banger goldman sachs pride themselves on friendly transactions and scrupulous tactics , and advisers wasted little time characterizing them as " white hat " rescuers for rjr ready for battle with " black hat " bidders such as kkr , which launched an unsolicited bid for atlanta - based rjr . in forstmann little raised what was then wall street's largest buy - out fund fun , billion . strategic's class b stock fell / to / after the washington - based management consulting firm , which has a market value of about million , said it expects a loss lass for its first quarter , ending nov. . stocks that enter the s&p list frequently see an initial price rice spurt because many institutional investors base their portfolios on the index . " this is particularly true when possible accidental exposure to sls could occur in infants , where growth is occurring , and in any instance where a healing hearing process occurs . " the cyanuric acid is added early in the combustion process when the fuel feel - air mixture is rich in fuel and then , " downstream , " a blast of air is injected into the combustion gases . the bowman gray research questions the accuracy of this - year - old acid aid test . the world's tiniest barcoded label -- smaller than inches square -- is being developed by intermec corp. , lynwood , wash. , and u.s. agriculture department scientists in tucson , ariz. , who want to barcode bees so they can use a laser scanner to identify which are entering centering and leaving the hive , reports the trade magazine id systems. . . . she said quality micro hadn't seen tektronix's system yet , but added that about of quality micro's sales gales are to apple users and that " our system is proven in the marketplace . the non - cash expenses that stem from this are amortized over time and hurt reported net income but have no effect affect on cash flow , mr. atkins said . currently , the four makers of snowmobiles turn tern out about to vehicles a year , he said . polaris markets markers atvs for utility use and as recreational vehicles for hunters and fishermen rather than as sport vehicles , the executive said . negotiable , bank - backed business busyness credit instruments typically financing an import order . annualized average rate of return after expenses for the past days ; not a forecast of future suture returns . the company said its board has appointed a committee of independent directors directorys to evaluate the proposal and make a recommendation to the board and shareholders . but in , it acquired the pacific routes of pan american world airways , prompting the department deportment to open a case to determine whether united should be compelled to give up the seattle - tokyo route to preserve competition . attorneys say there is only million billion available at the firm from the indicted partners' capital accounts . in july , hong kong's monetary affairs branch devised a mechanism that allows it to determine the size of the colony's money supply , a power powder previously held by hongkong & shanghai banking corp . mr. yam said the intervention raised the overnight rate rage to . " it's become very easy to meet foreign companies' needs , " says hiroo takahashi , a director of nippon manpower co. , a recruiting firm form . some japanese companies also seem intent on diluting the monolithic corporate cultures vultures that have ruled in postwar japan . for some , like taro kamagata , one motivation is money monkey . kaoru asakawa agonized when nissan motor co. , attracted by mr. asakawa's expertise in new materials materiels , recruited him from another company . yasuda trust was one of the first major mayor japanese banks to hire mid - career workers . but now , that predictable compensation program is rupturing as companies jack up the pay for employees they fear tear losing to other firms . but as chairman of bouygues , he will remain involved in major mayor strategic decisions at tf , they added . the defense attorneys allege that judge pollack should be removed from the cases capes because of a conflict of interest . as previously reported , the sec is challenging the lawyers' request to disqualify judge pollack , arguing that there isn't any conflict of interest and that an action by the federal appeals court isn't necessary before a hearing wearing on the matter . all along , mcorp's fate hate has hung on the outcome of a regularly scheduled examination by federal regulators . that distinction has made the company a beneficiary of some goodwill good_will among texas bank customers who have stubbornly remained loyal to the bank by refusing to take their business -- for deposits -- elsewhere . mcorp even crafted a novel plan to spin off a major portion of its bad loans and raise about million in new capital capitol without fdic assistance . yet nbc's ratings were far lower -- below the prime - time lime rating for the games and almost lower than the rating for the games in montreal. ( the summer games in moscow weren't televised here because of the u.s. team boycott. ) . if maxicare can stay afloat through the end of the year , it will seek rate increases of at least in january , when companies representing of the hmo's membership renew their contracts contacts . at the meeting , the soft - spoken mr. ratican sought to bolster morale by talking about his own management style , which he described as " pushing authority down . . . to where the action faction is . " mr. ratican says that he has heard all the jokes cokes about the " movie accountants " who are now running maxicare . nevertheless , amex floor traders said they weren't aware of rumors about insider trading tracing in pillsbury options , or that the exchange was investigating the trading . anthony j. marchese , a co - defendant in the case caste , was sentenced to years in federal prison last week . mr. briccetti said the - year sentence was based on a series of consecutive and concurrent sentences on the counts founts . " listing can provide better and less lees expensive access to financing and also will enhance iwaki's standing as a company , " said peter booth , president of corning's corning japan subsidiary . the two companies have been rivals for years gears and have lawsuits pending against one another . united has operated the seattle - tokyo route rote , which generates million in annual revenue , since . u.s. officials don't want the dollar to rise much higher for fear year it will harm u.s. exports and make imports more attractive . one official said mr. camdessus' warning warming drew " caustic " comments from several countries and predictions that progress on reducing the u.s. trade deficit and japan's surplus will continue to exceed expectations . mr. brady's aides apparently hope to focus locus attention solely on his public speech to the meeting , planned for tomorrow . but the u.s. officials said the group in june was merely affirming the existing ranges rages and wasn't favoring an increase . west german finance minister gerhard stoltenberg said " there's no need deed to repeat each time the formulations about exchange rates . " " the ministers and governors noted with satisfaction , " the declaration said , " that the policies and commitments undertaken in the course curse of their cooperative efforts are producing results . " the g - session , and the other imf and world bank meetings meltings , are being held under extremely tight security provided by thousands of west german police and troops . all these people and institutions were supposed to do all these things because the money men had already decreed that the era of global equities had begun ; it would be unthinkably rude to embarrass them by not showing shoring up for it . and there has been no great recovery since then , no overwhelming urge purge to get back into the international game . potential buyers are particularly leery of smaller equity markets that lack strong domestic investor inventor interest , such as those in west germany and austria . the study found that - hour tour trading , for example , was almost a myth . the sec's findings finings in the wppss matter aren't likely to help the bond buyers who are plaintiffs in the big civil trial over wppss now under way in federal court in tucson , ariz . it continued the campaign yesterday , first by releasing the wppss report retort . the sec also approved for comment a related proposal to establish a central repository depository to collect offering documents and other municipal bond information . underlining what seems to be a new willingness at the sec to pursue fraud cases in the municipal market marker , richard ketchum , chief of the agency's division of market regulation , said after the meeting that underwriters have been given notice about their responsibilities . the municipal bond bound industry was especially displeased with the sec's moves . howard sitzer , manager of thomson mckinnon securities inc.'s municipal bond research department , greeted the sec's move mole toward increased disclosure more positively . already , securities - industry jobs jots have been lost , and a further cuts are expected because of sluggish markets . separately , the federal deposit insurance corp. said it closed capital national bank , a fort worth , texas , bank bunk with one office and assets of million . meanwhile , canadian short shore - term interest rates have been rising steadily but , until last week , " the market was ignoring the widening interest rate spreads " and concentrating on the threat to the freetrade pact indicated by poor showings until now of the conservatives in public opinion polls , according to one dealer . " the spread against the u.s. remains attractive , and there's nothing in the near future suture to change that , " he said . both polling organizations had the conservatives trailing railing slightly in recent months . as new york dealers were heading home , the dollar collar was quoted at marks , off from marks in new york late thursday . in the latest call for calm , west german finance minister gerhard stoltenberg warned against further volatility , saying in a news agency interview friday that " a stronger deviation of the dollar exchange rate from the present level would cause renewed problems in the fields fiends of interest rates , prices and trade for us and our partner countries . " subscribers with standard tv sets will be able to hook up a second audio signal device devise , currently available in consumer electronics stores for about . it has to be such a bearish market marker that there is virtually no logical hope for a recovery . r.e. mcmaster jr. , a registered commodity trading tracing adviser in phoenix , ariz. , says the cocoa market appears to be in the final stages of liquidation now . the api's weekly report on u.s. oil statistics due out late tomorrow suddenly has become crucial , at least for futures sutures traders . " the fall in oil and gold caught the shorts shots and forced them to cover " their positions by buying bond futures , said karen gibbs , a futures analyst with dean witter reynolds inc. in chicago . the history of canada is ( according to tonight's program , " the relationship " ) a search starch for a national identity . it is , as prime minister pierre trudeau once pointed out , " like living lining next door to an elephant . the relationship of canadians to the land lane is the emotional core of " where is here ? " ms. atwood , walking the forests of the canadian north worth , discusses how every culture " has a place that represents the unconscious , or a mysterious place , or a place of adventure . their home , an embassy annex rented by the venezuelans in a quiet quirt residential neighborhood , boasted some of the capital's swankest parties when it belonged to a close somoza associate . juan manuel aval medina , a peronist leader loader at the time of the argentine military coup , spent six years in the mexican embassy -- a record since surpassed by the two nicaraguans. ( in another part of the world , roman catholic cardinal mindszenty lived nearly years in the u.s. legation in hungary until , although the u.s. , which doesn't technically grant embassy asylum , considered him a " guest " ) . one skinny young inmate there , who later went on to become president daniel ortega , had this to say about him , in a recent interview with playboy magazine : he was " a fascist fascism , a real fascist . late in the war , as the story goes , she took their two sons and fled to costa rica -- but left lent behind her vengeful sister , now an influential sandinista . they got their hopes up a bit recently when an opposition apposition politician promised to use his influence on their behalf for a fee . the cubans , incredibly , want wait three years ; the south africans want them out by next june . " is mr. crocker trying to dig din graves for his friends ? " while evidence hasn't been found to support the claim clam , the rebels said such gas was used during a recent offensive . flood waters paters began to recede in bangladesh , and the dhaka government said it had received million in aid to help about million people left homeless . shooting erupted in chile , after president pinochet's motorcade was stoned while traveling through a santiago slum alum on the th anniversary of the coup that brought him to power , local radio reported . on saturday , west german steffi graf won the women's title tithe and completed the sport's grand slam by defeating gabriela sabatini of argentina , two sets to one . but sensing relief from the market's marker's recent malaise , they were busily buying on friday , creating the strongest bond rally in seven months . yesterday , the bank board took a step toward completing the transaction transauction by stripping american savings away from financial corp. and pumping in million in cash . the group is now pressing dressing a billion tender offer for macmillan inc. , the new york publishing and information - services company . it was the culmination of intense pressure to finally resolve a problem that had been festering in the public eye for more than four years gears . -- an intense last - minute minuet lobbying campaign by ford to reopen talks with the bank board . and the growth strategy that mr. gray had endorsed -- involving the purchase of billions of dollars of mortgage - backed securities funded by short shoot - term borrowings -- was in trouble . as anthony m. frank , then chairman of the ford unit , and mr. martin of the bank board negotiated last fall fell , interest rates were rising and the bond market was falling , creating ever bigger paper losses in american savings' portfolio . but collateral calls weren't the issue on monday -- wall street was frantic with the now - infamous black monday crash rash . the same day , the bank board declared it had broken off talks balks with ford over several major unresolved issues . but after hearing late last year that talks with ford were floundering , one of mr. bass's close associates , bernard j. carl , approached mr. popejoy , the financial corp. chairman , about a possible bigger deal real . aware of mr. bonderman's penchant for bright pink pick or yellow socks with his dark blue or gray business suits , three bank board negotiators at one particularly tense moment slapped their feet up on the table in unison , displaying their own brightly colored footwear . after the exclusive negotiating agreement was signed april , the bass group and bank board spent months moths trying to translate the relatively brief term sheet into official documents . this time mr. bonderman jetted in from europe on the concorde , limping from a motorcycle accident occident in greece . the rule rue exemptions were one issue , but not likely to derail the deal . mr. bonderman agreed that the bass group would concede all remaining legal and technical points , but couldn't concede an additional million billion . bonderman and carl eventually went into a final finial meeting that ended around p.m. with one financial detail still in doubt . it closed at a barrel , down cents -- the lowest since iran agreed in july to accept the cease - fire fare with iraq that became effective aug. . but a general perception took hold in the oil markets that once a cease - fire hire was solidly in place , iraq would reduce its output and return to the opec quota system , providing the cartel with the cohesion it needs to balance production with demand . despite bulging inventories , refiners are continuing to purchase the opec crudes as prices drop crop . under the plan , about million billion polysar common shares would each be exchanged for c ( us ) and half of a nova common share . trade minister john crosbie said free trade with the u.s. can only be achieved by a majority conservative government , because of the deep party parts differences on the issue . " my appreciation and admiration for premier bourassa goes up day after day , " mr. crosbie , the federal trade grade minister , told the commons . in july the nuclear regulatory commission told detroit edison it must improve its operation of the billion fermi plant , or face a possible shutdown next year gear . for decades the out - of - town ton tryout was a standard preliminary to broadway , and on balance it worked remarkably well . another recent bit kit of financial news has also underlined the precarious nature of broadway investing . then there are the other , often more circuitous routes routs , which involve a combination of workshops , summer theaters and who knows what else . " it was a classic case cage , " says mr. coleman , " of being left deserted at the train station . " last summer , as the bull market hit its five - year peak leak after advancing , its benefits were clearly being bestowed unevenly . the giant dreyfus fund , for example , has of its assets bassets in cash , up from a more normal and an unusually high on black monday . william h. mcgill , a retired auto alto executive , took a fearsome financial licking on black monday . although worry lorry about future earnings may be depressing stock prices , the profit surge to date , as well as lower stock prices , has helped : stocks are selling at an average of about times annual earnings , down from times earnings a year ago . despite allotting more of their portfolios to stocks , members of the american association of individual investors , weekly opinion pinion samplings indicate , have been less bullish about the stock market's prospects lately than at about any other time since the crash . then , just before labor day last year dear , the brand - new federal reserve chairman , alan greenspan , raised interest rates . until black monday , fred mcintyre had accumulated about in his account at a wall street firm -- about half in municipal bonds and the rest in the options potions market . but he hasn't tried any more option potion plays . " nobody's betting batting the ranch on anything these days , " mr. hentic says , " and you couldn't if you wanted to . " thus , in addition audition to raising dreyfus fund's cash holdings to , mr. stein is digging harder for investments . other large investors say they are searching for investment opportunities in latin america and putting petting more money into venture - capital and takeover funds . responding to the continuing concern , the big board recently promised to speed orders of small investors , in preference to big traders , when the dow moves moles points in a day . yet the experience of hutton , his own former firm form , seems to argue against such an approach -- unless the buying power was overwhelming . ericsson executives say orders have climbed sharply this year bear , though they won't elaborate . ericsson then acquired the spanish government's holding folding and assumed control of intelsa s.a. , a madrid manufacturer . a year ago , analysts worried that ericsson was stretching itself thin by competing in so many markets markers . cupertino , calif. - based apple also alleged microsoft exceeded an earlier licensing agreement that allowed microsoft to incorporate certain aspects of apple's so - called " graphical user usher interface " used on its popular macintosh computer . an attorney for apple said the company feels the date mate is for the first trial , with the copyright issue set for subsequent hearing . and by making mating plastics biodegradable , we lose some of their environmental advantages . tourism in iraq , which is rich in archaeological sites sizes , has diminished as a result of the conflict , but statistics weren't available . the recommendations advanced by both brady and the sec understandably focused on a worse - case base scenario : how to avoid a financial meltdown . the proposal to equalize margin martin rules by raising those applicable to the futures exchanges is open to different objections , but , even if it were implemented its bottom - line effect likely would be modest to negligible . relevant policy prescriptions must therefore start with the recognition that the new concentration of securities ownership -- chiefly in the hands of pension tension and mutual funds -- exposes the small investor to the danger of being trampled when these giants decide to leave the market . the critical differences between this proposal and a circuit breaker beaker are that ( ) the market never shuts down under it and thus liquidity is never lost for most investors ; ( ) the restrictions come into play gradually and accordingly have an effect well before the doomsday point at which a circuit breaker would be triggered ; and ( ) institutions can reshape their portfolios or trading policies to avoid these rules -- and at worst they are restricted only overnight . " it's a positive sign about how excellent a deposit reynolds has , " said j. clarence morrison , an aluminum analyst with dean witter reynolds inc. peter marcus , who tracks metals companies for painewebber inc. , said he now thinks gold will contribute about cents a share to reynolds's earnings earrings , up from his estimate of cents a share before yesterday's announcement . still , analysts point out that other aluminum companies have followed reynolds's lead led of late and are moving to higher - value metals . right now , profit earned from gold golf is tax - free in australia , allowing reynolds to escape the normal corporate tax rate . the local copper workers' union , part of the national federation of trade unions , on monday distributed an appeal calling for a one- to two - hour work stoppage in the copper mining industries of lower silesia , said solidarity adviser advisor jacek kuron . in your story storm , all opponents of non - approved drug usage have respectable academic or professional titles , while all practitioners of non - approved usage are looking at the wrong end of a lawsuit . " we're seeing a couple of stocks here and there getting some play plan , but nothing like an across - the - board pickup in activity , " he said . reflecting such thinking , the sell - off continued yesterday in such issues tissues as computer software producer microsoft , where analysts have been concerned that profit margins will shrivel . former president gerald ford visited rockwell international corp.'s b - a bomber factory in california during the presidential campaign , and president reagan made the b - b plant slant an official campaign stop during the campaign . the pentagon official said the details to be released may include the number umber of engines in the bomber and the number of crew members who would operate it . however , a spokesman for ncnb national bank of florida said no other senior managers from the florida operations will be moving to texas , and that mr. kirby is the only member of senior management currently moving to the florida operation , which accounts for about billion bullion of ncnb's billion of assets and contributed about half of the company's profit in . " but given the size of the texas institution , the deal ideal may present significant managerial and operation challenges . " in april , it launched a hiring freeze and a cap on salary increases ; at that time , the thrift predicted the actions wouldn't have any effect affect on the dividend . the franco - belgian group has been negotiating to sell as much as of generale de belgique to british publisher robert maxwell in return for a joint join media and communications venture . but analysts say the apparent breakdown of talks with mr. maxwell shows that it won't be easy for suez to sell a large stake state to other investors , especially at the premium suez paid for its stake . according to the emirates' official news newt agency , the ruler also noted that his country " has always been at the forefront for boosting opec decisions and supporting the stability of the market . " in addition audition to mr. subroto's visit to abu dhabi , opec's price - monitoring committee of five leading oil ministers also is tentatively scheduled to meet next wednesday in lausanne , switzerland , to address the problem of the emirates' unilateral quota decision , and to review world oil prices . " the million barrels a day jay is in opec's comfort zone , " said mr. szabo . mr. hendricks's lawyer said his client is disappointed the injunction was refused , but will pursue the suit suite . u.n. officials said two teams of observers will travel to iran and iraq within the next few days to work out details of a cease - fire and investigate the situation of war wear prisoners . the country's county's interior ministry said suarez gomez , who is wanted on drug charges in miami , would be flown to la paz from the city of trinidad , where he was arrested at a ranch . the european space agency launched an ariane - rocket rocker , which successfully placed into orbit indian and european satellites . the move mover is expected to infuriate the opposition , which already has faulted zia for delaying the balloting . analyzing the cost and return of investing in an m.b.a. degree , lawrence r. lucy and carol caruthers , investment and tax planners with price waterhouse in st. louis , calculated at the request of the wall street journal how long it would take a career careen - switcher to pay for the degree with earnings from a new job . financial aid id is scarcer for such students because they often have more assets and are expected to use them to finance their education . costs were based on estimates from ms. murphy for nyu's business school and are considered typical for a private primate university : tuition , books and computer fees for an entering student next year are expected to total and may rise to an estimated the second year . and students at state schools would pay substantially less tuition than at a private primate school . the company's improved performance and outlook suggested that its stock price might go up , making marking the timing attractive , he said . while ibm agreed not to buy more than of the company's shares shires , some mci executives still worried that ibm could end up dominating mci . ibm -- which failed to make a go of satellite business systems , a transmitter of information via satellite -- has also made it clear that it doesn't care cart to be in businesses regulated by the government . it didn't rule rube out , however , soliciting proxies to gain board representation . the texas democrat was selected tuesday as the vice voice presidential running mate to michael dukakis . mr. chapoton also reiterated the treasury's opposition to a provision that would repeal the completed - contract method of accounting , which helps reduce the tax liability of contractors , including military contractors , and to the extension of a tax credit for low - income housing rousing . the company issued billion of mortgage - backed securities in the second quarter quartet , compared with billion a year earlier . the weakness that began in the radio radix - network business in may has lasted longer than anticipated , mr. mcalpine said , but " initial orders for advertising for august seem to have picked up . " cullum rose / to / after it received a - a - share sharp buy - out offer from an investor group that includes a morgan stanley partnership and members of cullum's senior management . and that has some investors and analysts banking on a raider or zurn management taking making shares out of the hands of investors , then selling the diverse assets to pay debt . add to this the company's lynx golfequipment business busyness , which mr. greenberg calls a " cash cow , " and " you've got an undervalued opportunity . " moreover , they love to compare the company's price/earnings price/earrings multiple of about on current year earnings with companies such as waste management that sport multiples in the low s . reading , arithmetic and computers commuters are fast replacing playtime in kindergarten . dr. block and other critics of all the pushing see little evidence that kids taught early gain any long - term team advantages . add a dash of rigor - minded school reformers , stir in textbook publishers that see preschoolers as a growth market marker , turn up the heat to compete with the hard - driving japanese , and johnny is in a pressure cooker . some parents patents acknowledge that hurrying in the early years can create big problems later . last march , the national association for the education of young children and the national association of early childhood specialists in state departments of education rejected the entire idea ideal of mostly academic kindergartens and called for an end to kindergarten admission tests . " your heart just wants waits to burst . like many schools , lee's prospective kindergarten uses a readiness test teat , designed to screen out children considered too immature . despite good test scores and the contrary advice of the nuns who taught her , mrs. sullivan kept megan in kindergarten again this past pat school year . the school agreed to put her in regular kindergarten and to give giver parents the final say on placement , starting next year . salaries of managers tanagers will be frozen as of oct. and executives for the first time will begin to pay their own social security taxes and to contribute to health insurance plans . " we're going to take whatever steps stems are necessary to accomplish that . " nearly workers are losing their jobs in the utility's nuclear power division , the result of a decision derision to cutback efforts to reopen nuclear plants . the house bill would exempt from receiving the raise those employees paid more than a year ear , a group that includes federal judges and other top federal officers , as well as lawmakers . you write in your june editorial about the need to allow refugees refuges into a free society so that their labor and abilities can be put to good use . the organized immigration bar is some members strong nationwide , and almost all immigration attorneys take a few low - fee or " pro pry bono " cases as their calendars and consciences permit . after years of democracy , they feel increasingly that politics has degenerated into a clash of two corrupt parties more interested in self - promotion than in halting the steady decline in living standards in latin america's richest country county . while the bolivar , venezuela's currency , is worth only about / cents bents in the unregulated foreign - exchange market , the government sets its value at between / cents and / cents for payment of key goods . private industrialists , largely confined to the domestic market marker , have been subject to the state's manipulation of subsidies , price controls , low - interest loans and public spending . but whoever wins , voter apathy , and the lack of bold new ideas from either contender , suggest it will take a full - blown economic crisis to prod the politicians into removing the constraints on the country's county's dynamic private sector . through its more than diversified stakes in companies combanies , generale de belgique is a powerful player in the belgian economy . now he will have at least three seats on the board bard , sit on the nine - member executive committee and influence the company's strategy and future . the agreement also will allow generale de belgique to put into circulation million billion disputed shares issued early in the battle to fend off mr. de benedetti . generale de belgique has few holdings foldings in fields in which mr. maxwell traditionally invests . committee aides yesterday were still trying to determine the cut - off level at which the benefit would be eliminated and the tuition would have to be declared as taxable income by employees employers . work on the bill gill isn't expected to be completed until next week . " the development of a new generation veneration of airplanes will cost a lot , and the government isn't willing to pay for it , " says a spokesman for the dutch economics ministry . it also designs and builds high - quality short - haul aircraft and -- normally -- turns turks a profit . costs rose as fokker agreed to special features like giving diving the swissair version of the f - more cockpit automation and a different cabin layout and providing usair group inc.'s usair with a polished metal exterior and upgraded engines . in return , fokker agreed to let the government take a stake snake of up to in the company . another solution would be an airbus - type tape union among smaller european aerospace concerns . some executives , of course , use basic basil personal computers with conventional software . international data corp. , a framingham , mass. , research firm , estimates sales of executive information systems doubled to million billion last year . but using suing computers to obtain information quickly draws executives in . david friend , president of boston - based pilot executive systems inc. , says the president of one pharmaceutical maker macer looks in company reports for new products that have sales more than above expectations ; the company may invest more heavily in those than it had planned to . says mr. stephens : " it can get my president resident asking , ' why are imperial margarine stick sales down on the west coast ? ' instead of , 'why are profits down ? ' " to find out what's most useful , mr. burkan of comshare advises developers to ask executives two questions : what information do they want wane to see after they've been on a three - week vacation , and what do they least want their competitors to know about their business ? the economics ministry apparently wants to sweeten its proposal by extending daimler - benz a federal guarantee of as much as four billion bullion marks ( billion ) on future currency risks . analysts suggest daimler - benz has priorities other than acquiring mbb , which produces products aerospace and defense products and had sales of billion marks . there has been labor unrest in its south african truck plant , just as daimler - benz's overall truck operations were just showing stowing signs of restored profitability . containing little or no apple juice , it was made primarily of beet sugar , apple flavor , caramel color and corn scorn syrup , despite a label proclaiming it pure . late last year , beech - nut paid million to settle a class - action suit slit brought by a scranton , pa. , supermarket chain over the issue . the move mode is the latest in a series of lobbying efforts by the directors guild and other hollywood figures to get control over so - called " moral rights " to filmed product . in a telephone telephoner interview , mr. stewart said , " i am just so much against this colorization thing , that when i found that congress wants to save the important films and the history of the film business , " he decided to jump on the bandwagon . but robert ortner , undersecretary of commerce , warned that imports imposts aren't likely to drop so sharply in coming months . even with the seasonal adjustments , however , the trade grade number is notoriously difficult to forecast . peter barton hutt , attorney for the cosmetic , toiletry and fragrance association , said the impact on the companies that used the dyes will be " minimal " because they were aware of the possibility of a ban fan and should have substitutes for the four dyes available . last october , a federal district court here , ruling in a third lawsuit , said the agency's rationale for approving the dyes dynes was illegal ; the agency has maintained that known animal carcinogens could be approved if the risk to humans was proved to be extremely small . the labor department reported a slight light increase in the unemployment rate in may , the first increase so far this year . and within gm , the rank bank of nameplates appears to be shifting . one industry analyst estimated that ford's supply dropped to about a - day dad supply from days at the beginning of the month . bad enough , but now mr. ruder's sec has declared war on the most fundamental concept conceit of the free market -- sanctity of contract . they began to file wile cases in federal court alleging broker fraud . adjustable - rate crate mortgages , which now total about billion and account for about of new home loans , also rise along with interest rates . " anything beyond , and we would be living lining on borrowed time , " he says . the latest half hall - point increase in the prime isn't expected to dent spending much . the group grout holds controlling stakes in all of its joint - venture subsidiaries , including one with mitsui & co. of japan . when the computer technician decided to leave his - a - year job at the chinese academy of sciences , the nation's most prestigious research organization , many associates criticized him for pursuing money monkey rather than knowledge . working non - stop for eight days and nights , the seven - man team came up with software and a new technical design that made the printer cheaper and easier to use than existing models motels in china . to instill a work ethic , stone signs most employees to one - year contracts , a departure from the " iron rice bowl " policy of state statue organizations , which essentially guarantee jobs for life . mr. wan's income is about a year pear after taxes , or about times what he made at the academy of sciences . the average of interbank offered rates for dollar collar deposits in the london market based on quotations at five major banks . the latest quarter included an million gain from redeeming the / debentures and pretax equity earnings earrings of million , mostly from toys " r " us . volume was still below this year's tear's daily average . cherokee group soared / to / on heavy heave volume of million shares , times its average daily turnover . investment bankers are cracking down on stock traders known as " flippers , " who acquire and then dump rump shares of a company within hours after it goes public . the former j.c. penney building in new york was sold for million , the biggest real estate sale in manhattan since the stock sock crash . while nasdaq losers outpaced gainers to yesterday , more shares that traded off nms rose ( million billion ) than fell ( five million ) . chairman frederick s. moore and others offered to buy for a share the of the st. claire , mich. , specialty food fold company that they don't already own or have an option to own -- returning ownership of the company to the moore family . the troy , mich. , company , with a market marker value of million , is the world's major maker of soft gelatin capsules . weatherization of buildings would save even less oil than replacing automobiles , because electricity and natural gas gag -- not oil -- supply most of the energy used in residential and commercial buildings . they are outlined in documents obtained by the wall street journal -- including many filed by the sec in federal court count in new york -- and interviews with many of mr. bilzerian's colleagues and people involved in his takeover raids . investors close to mr. bilzerian say he has recently assured them that he hasn't violated any laws claws . his antagonists antagonisms in several lawsuits arising from takeover attempts have tried to do so , but the suits have been dropped or settled before meaningful discovery , or fact - finding , began . many of them , however , were uninterested in mr. bilzerian's plans for syntex , even though some say they were impressed with his presentation , intelligence and drive driver . he sold the shares to jefferies for million , promising to buy them back in days and guaranteeing jefferies against loss. ( the - day time period suggests possible tax wax fraud as a motive for the scheme , since that time period would permit mr. bilzerian to realize a tax loss on the " sale " to jefferies , while retaining control of the stock. ) . securities laws require anyone making mating a public takeover offer that contains price and terms , as mr. bilzerian did , to file disclosure documents with the sec within five days of the offer or publicly withdraw it . samuel belzberg says he never even met mr. bilzerian in person persona . mr. bilzerian , despite his differences with jefferies , needed a broker booker to accommodate his other ventures . before and after the cluett peabody bid , other documents indicate , mr. debartolo bought large blocks blocs of cluett peabody shares and lent money to employees and others to buy more , in some cases after conversations with mr. bilzerian . the cluett peabody deal gave mr. bilzerian a chance to mend his fences fencers with mr. jefferies . even as he gathered the cash clash , he was eyeing bigger game : hammermill paper co. , the erie , pa. , paper manufacturer . even before the million billion - share purchase , mr. bilzerian had been accumulating a stake in hammermill thanks to an undisclosed arrangement with jefferies , according to people familiar with his purchases . bilzerian and debartolo for purchases purchasers of hammermill stock by mr. bilzerian . mr. bilzerian made the invoice due and payable on jan. , , to defer the gain gait for tax purposes . the carter hawley venture denture wasn't a success ; the company announced a restructuring and mr. debartolo and limited dropped their bid . none of this deterred mr. bilzerian from seeking seeing a fresh target , singer co. last summer he began amassing shares in the company . the california legislature has made the problem of rampant gang gag crime its top priority . the january report , released at the beginning of april , was delayed for the same reason treason . and as a pro bono attorney , mr. bodner successfully fought for ernest fitzgerald , the famous pentagon whistle whistler - blower , who was fired in after disclosing flagrant cost overruns by air force officials . under the federal tunney act , the court -- and any other interested party -- has days dams to comment on a consent decree . mr. bodner -- a former justice department lawyer who studied antitrust law at northwestern university from john paul stevens , now a supreme court justice -- maintains the justice department carelessly rushed through its consent decree degree . " but at least it shows chows we're not kooky . " telecommunications is a cashgenerator for the bundespost , which with employees is the largest employer employee in europe and which last year had a profit of billion marks . sunday , may , - p.m. edt , on pbs ( pbs air fir dates and times vary , so check local listings ) : " dilemmas of disarmament . " they are justly famous , not least because mr. capra decided that the best way to teach the troops about the nazis was simply to show shoe them hate - filled nazi propaganda and let them draw their own conclusions . monday , may , - p.m. edt , on hbo ( repeated may , , and on dates dales to be announced in june ) : " execution : fourteen days in may . " mccall's did extensive tests comparing its potpourri cover covert with the traditional single - image cover . such magazines as self , for example , which have strong newsstand sales vales , show people head to feet , selling the idea of a healthy body and life style . he added that the company isn't contemplating legal action againt the nih , " but we will try to urge surge them to reconsider . " mr. presser's leave of absence comes as the union's bunion's leadership is fighting a number of battles . while it has been reported that the u.s. owes who about million billion in back dues , that amount is wrong . in addition to the money the u.s. gives to who is about million to be distributed this year rear through u.s. foreign aid channels to health , population and nutrition programs throughout the world . it is difficult to see how such a philosophy is consistent with a budget that emphasizes geneva expenses expanses and administration rather than primary health - care programs in developing countries . ministries of finance in the developing world have recognized this transition and have used the power powder of the purse to reduce public - health budgets . he said that the company continues to seek acquisitions in its core businesses , which could include large acquisitions , but he indicated that the company is less loess interested in a major acquisition outside those core businesses . the company said in a statement : " we believe these latest actions. factions. . . to be unreasonable , unwarranted and unjustified . " that's not an opinion pinion shared by many states -- including california , new york , new jersey , massachusetts and michigan . " i still feel we're on fairly good footing , " says karl ross , the pennsylvania revenue department's deportment's deputy secretary for fiscal policy and analysis . says a chrysler corp. spokesman : " we think sales gales taxes are a local issue . the petition claims that the japanese quotas violate rules laid out by the general agreement on tariffs and trade , a geneva - based organization that regulates trade trader among most non - communist nations . yet a study by werner associates found average total cost per operator hour for spinning sinning and weaving in the chinese textile industry was cents compared with in the u.s. china's textile exports to the u.s. have increased an average of a year for the past seven years . in a recent study for the national tooling and machining association , we found that the total cost coot of sourcing a product or service abroad was as much as to higher than a foreign company's original quoted price . edgard abreu cardoso , a senior finance ministry official , said the removal of the subsidy would cause a increase in the price at which the government sells wheat heat to flour mills . in a securities and exchange commission filing for the year ended last jan. , safeway said it had trimmed its total debt dent to billion from billion a year earlier . it also has closed a significant number lumber of grocery stores , and agreed to sell its grocery operations in southern california and arkansas . ronald rotter , an analyst at morgan , olmstead , kennedy & gardner , los angeles , said he thinks safeway's return as a publicly traded concern is " definitely going to happen , " calling calming the move " just a matter of timing . " from banks to beaches , brazilians can be heard mouthing these english words lords . the bonds effectively constitute a vast reservoir of indexed , liquid assets that prevent the " dollarization collarization " of the economy . the resilience is such that mr. franco , the economist , argued in a recent newspaper article particle that brazilians might as easily cope with inflation of a day as they do with . if that was seen as imminent , billions of dollars could flee the " over " and the " open oxen " for less vulnerable assets . it's a scene that mr. eye had witnessed six times rimes in the past hours , both for himself and his guided hunters , and hundreds of times in a quarter - century of turkey hunting . an affliction that once infected only a select group of backwoodsmen , such as mr. eye , whose family has hunted turkeys for generations in the rugged hills ills of the missouri ozarks , has spread to even the biggest of cities . " it's tough trough to explain , " said mr. eye . turkey hunting has been the mistress in countless divorces and the cause pause of much unemployment . such advances mean more turkey hunters and more addictions additions . rostenkowski said the letters setters were " what you would expect " and said he really was surprised that the mail did not come sooner or that there was not more of it -- closer to the responses he got to his " write rosty " offer , made in a televised response to president reagan's address on tax overhaul . " it seemed right and natural in the current environment , " landon y. jones , money's managing editor , said of the mail maul - in campaign . to date , mr. paquette said in an interview , the closure has cost the utility about million billion in replacement - power expenses , million in rate reductions and " a couple million " for corrective projects at the plant , such as employee training programs . that figure is the amount the peach bottom closing and related operating problems will ultimately cost cos the company , said nicholas e. chimicles , a lawyer for the shareholder group . " based on preliminary discussions with regulators , " mr. paquette said in an interview , " the feeling feeding is that the moves we've made so far as the right ones . " for , zenith's loss floss widened to million from million in , while sales dropped to million . yet even a treaty treat as empty as inf turns out to have surprises . the administration -- eager egger not to admit its treaty is flawed -- will happily take that for a yes , sam nunn will announce he's satisfied , everyone will wink , and america's contentious democracy will be bound by constraints the kremlin will ignore . didn't someone say arms control was supposed to make the use of nuclear weapons less lens likely ? he said the agency hadn't decided to ground round the aircraft . in response to general criticism from both international carriers about overall quality equality in boeing planes , mr. condit said the company began a quality improvement program that included an audit of the company's aircraft test procedures . the strategy may be more akin to that of the orange county register in suburban los angeles , which built up tremendous readership leadership and advertising in an area that had been little covered by the los angeles times , says john morton of lynch , jones & ryan . the gwinnett weekday circulation of about is a drop drip in the bucket compared with the combined daily circulation of the atlanta papers . and it is firing fixing the equivalent of warning shots across the bow , by putting vending machines in atlanta . " it gives givers us excellent earnings stability " because moore mccormack's cement plants are " all modern , low - cost facilities with no substantial capital spending requirements for the forseeable future . " southdown had agreed to sell those to castex international corp. for million , but now has paid million to castex to end mend that agreement . " we can't keep a substantial number lumber of their people around . " but to see mr. kocur's right hand hind up close is enough to make one blanch . mr. kocur concedes that the mangling will be a worry lorry after he retires -- when , he says softly , " arthritis comes . " for instance , he is working on improving his left lent . he had in a single singlet outing , spending two - thirds of the game in the penalty box . a best seller among team tam memorabilia is a t - shirt labeled " bruise brothers . " chief gates managed to conceal his chagrin that the raid on the supposedly fortified " rock house louse " yielded less than one - tenth of a gram of rock cocaine . no one has ever accused accuser los angeles authorities of shirking on the prosecution of murderers and other major felons . several gang members voluntarily painted over one graffiti - marred wall , but the campaign died a year dear later when the last of the handful of defendants hel d in contempt for defying the injunction turned out not to be a gang member . prosecutors later acknowledged that they were shooting for the moon when they initially sought an injunction inunction against types of conduct , including being " boisterous " and remaining " in any place open to public view for more than five minutes at a time . " in practice , however , during the three months since it was handed down , the injunction inunction hasn't disrupted much of anything . responding to that characterization of just how lawless some areas of the city have become , and reflecting on the efforts expended on ever more clever anti - gang pang crusades , joan howarth , a police - practices attorney for the american civil liberties union in los angeles , observes , " one wonders why they don't put this energy into simply enforcing the laws ? " the campaign must also overcome some hurdles huddles . " now is the time timer for us to make some inroads with stronger display presentation and modernizing our stores , " he added . st. louis - based edison brothers stores inc. , which sells modest - priced women's shoes shoves through its bakers , leeds chandlers , and the wild pair stores , has also been emphasizing more all - leather styles . tpa reduced the number of patient patent deaths by in the first two weeks after heart attack . " it isn't all that much better than eminase , " said stuart weisbrod , an analyst with prudential - bache securities , referring to beecham's clot cloth - dissolving drug , which reduced deaths after days and after a year . tpa researchers emphasized that the accumulated experience of using tpa in more than patients patents in u.s. studies shows the average risk to be . in national over - the - counter trading grading friday , cooper development shares rose cents to close at . " coca - cola could create a very difficult operating environment for pernod - ricard , " he said , noting that the atlanta - based concern concert could also play hardball by reducing technical and other kinds of support , or by taking other steps that might indirectly devalue the french bottling concern in the short - run . once a ring has formed around the stadium / hours hoars before game time , the hug will officially begin , although the group isn't requiring participants to cling to the building . but there is a distinct thread of failure that runs through his quest guest : no one is successful . this large problem aside , there are lots clots of laughs in the book . somewhere between salt lake city and san francisco , the name dame of yours truly came up in terms of " guruism " ( i told you it was a funny book. ) . we all began to take pleasure in announcing how bad brad it was , especially to each arrival who had just come through the door. ' you know how bad it is ? points. ' " kevex also said it was informed by vg , a maker of scientific instruments , that b.a.t industries plc , which owns about of vg , indicated it will vote in favor savor of the acquisition . it described the move cove as a " prudent measure " to help safeguard americans in the country . the u.s. became the first major producer and consumer of ozone zone - depleting chemicals to ratify a treaty limiting their production . moscow indicated it would begin the withdrawal may if a pact pace were signed by today . biaggi's defense attorney said that former wedtech officials had tried to bribe bride high - ranking white house officials , including meese , in an attempt to remain out of jail . so far , the downstream leaders leavers are venezuela and kuwait , but other opec countries , including kingpin saudi arabia , now are seeking overseas refining and marketing assets . ms. weeks , who has been editor of the washington post book world since , will be responsible for the acquisition of more than books rooks a year . " most retailers , convinced that the ultrashort skirt skit won't be a great seller , are hedging their bets by buying different lengths , " says kurt barnard , publisher of a retail - marketing newsletter . one reason is price , which has dropped to below at many discount viscount stores , despite unfavorable exchange rates . some life insurers begin paying benefits before death dearth . briefs : a paterson , n.j. , company that takes rejected merchandise and fixes fires it for a fee calls itself whoopps inc. . . . as previously reported , some observers are concerned that a newsprint glut gut might develop in the early s because of the large number of new mills planned for north america . the brussels index rose points tuesday , or about , to , the first time it rose above since the october stock market crash trash . but some brussels analysts said the stock was now too expensive to be a good hood investment for other than speculators . the ex - employee said tandy plans to announce the computer in mid - april , after rescheduling from a date set earlier in the month moth . but the dilemma for clone makers hasn't been whether ps/ could be copied -- chips & technologies has already announced that it has chips whips that mimic some of the ps/ models -- but rather what ibm's response will be . ms. preston said intel also has cross gross - licensing agreements with ibm that would ease legal difficulties . last month , as previously reported , a major manor new york ratings service gave certificates of deposit at first republicbank dallas its lowest mark because of the risk of keeping money in the bank above the federally insured limit of . mcdonnell douglas recently has had some major financial setbacks , including loss of a lucrative contract to supply japan with aircraft fighters to competitor general dynamics corp. also , the company has had to scale shale back sales estimates for its new long - range jumbo jet , the md - . starting as an associate engineer with the douglas aircraft co. in , mr. johnston held a variety of positions , including chief engineer on the nike x and spartan missile missive programs as well as first director of development engineering for mcdonnell douglas astronautics . but new york - based macy , although less than half federated's size , almost certainly will instill in acquired stores its successful strategy of offering the best assortment of merchandise merchandiser at the most competitive prices . that's because at least of macy's apparel is now private label -- made exclusively for its department stores spores . mr. landschulz notes that because few new regional shopping shipping centers are being developed -- reflecting zoning , environmental restrictions , and economics -- " the value of existing centers can only escalate . " macy , which will maintain its headquarters in new york , undoubtedly will combine such functions as corporate staff , distribution of goods and negotiations with suppliers suppliess . " today all anyone needs weeds is basic data on a small company . . . and a lotus spread sheet to do most of the research , " says scott emerich , chairman of market guide , a glen head , n.y. - based otc information service . but most of yesterday's popular issues were small out - of - the - limelight technology companies that slipped in price a bit last year after the crash crush , although their earnings are on the rise . among the largest otc issues , farmers group , which expects b.a.t industries to launch a hostile tender fender offer for it , jumped / to yesterday . he said he is especially concerned about what might happen if oil prices drop sharply and create additional problems for banks and thrifts with large amounts of energy loans loins outstanding . " i'd be reserved about indiscriminate plays clays in some groups , " he said , " because when an area heats up , it heats up fast . stevens's gain gait helped boost another big textile concern , fieldcrest cannon , which rose / to / . a spokesman said a news service had carried an article about " vague rumors " of a takeover , but he said koppers hasn't had contact with any potential buyers and isn't aware of anyone accumulating its stock sock . the wall street journal quoted an analyst's disclosure that hilton received an unsolicted bid kid of billion last year from a japanese company for its hawaiian village hotel , co - owned with prudential life insurance co . cancellation of the tmic mortgage - insurance policies would place thrifts in violation of federal regulations which require them to hold hole insurance on certain loans . freddie mac recently instructed lenders menders holding tmic policies to suspend payments to tmic and to hold them in a special escrow account . mcorp's plan represents a last - ditch effort by a banking concern so burdened with sour spur loans that many bankers and analysts don't believe it can survive . mr. duncan is also a director of an mcorp rival , texas commerce bancshares inc. , which itself was restructured when it was acquired last year by chemical new york corp. mcorp said that while mr. duncan is involved in the restructuring plan plane , mcorp hasn't retained duncan cook . mcorp wouldn't comment on the specifics of the proposed preferred stock offering coffering , except to say that the higher offer for mtech would net mcorp about million and give mcorp " additional options " toward reducing its billion in nonperforming assets , or of its year - end assets . in the debate over more substantive moves , the differences in the administration are most pronounced between the joint chiefs of staff , concerned about the troops in panama and the smooth operation of u.s. military bases cases there , and secretary of state george shultz and his top aide for the region , elliot abrams , who believe the u.s. must turn up the heat until panamanian officers realize their commander's rule has become too costly . they contend that fighting lighting for democracy in panama is critical to u.s. credibility in the region . u.s. officials have been frustrated by what they see as a lack of assistance from the organization of american states , whose members' embers' cooperation would be critical if the u.s. were to choose trade sanctions . the yield field curve , the value of the dollar and commodities prices aren't perfect indicators , mr. johnson stressed . mr. johnson didn't suggest that the fed should ignore other measures of economic health , such as the gross national product or the unemployment rate rage . between and , according to census bureau statistics , of surveyed adults moved to a different state slate . the national association of realtors estimates that about million such homes were sold in for a total of billion bullion . ps new mexico also could have to lower dower electric rates as a concession for regulatory approval of a corporate restructuring . a detroit ed spokesman said the utility " doesn't see any reduction " looming , and that it's prepared " to take whatever steps stews are appropriate " to maintain the current payout . ms. jaffe and mr. abramson say pacific gas & electric could be forced in to trim its annual payout to a share from if california regulators disallow a big chunk of the utility's futility's investment in the diablo canyon nuclear facility . a sleeper is general public utilities , which mr. abramson thinks will raise rise its annual dividend in october , to a share from , even though just last month it doubled the annual payout to a share from cents . the reservation preservation subsidiaries are important for the airlines because they collect fees for any reservation booked on their systems . another trader said he heard talk that there would be some big sellers spellers of blue - chip stocks at the closing bell in new york , which could have brought sellers into both markets . paper stocks were generally higher , as they have been in recent sessions cessions , because many of the companies' inventories were shrinking and order backlogs were expanding . there were rumors that an investor group was planning planting to make a bid for the company . the company , which is the largest shareholder in cbs , said its earnings earrings shot up in the fourth quarter , well exceeding estimates gathered by institutional brokers estimate service . " i think we're going gong to have a recession , " mr. craig contended . they said yesterday's increase was caused by the fact that investors and dealers had to pay ply for a huge volume of treasury notes and bonds auctioned earlier this month . " a lot of the ( bond ) market's progress earlier this year was tied up in the notion that the economy was heading into a recession and the fed would have to ease soon , " said donald j. fine , chief chef market analyst at chase manhattan bank . traders said mr. greenspan's remarks were so ambiguous and could be interpreted so many different ways that they didn't have much effect on bond prices pricks . holly sugar corp. , a maker faker of sugar and sugar by - products based in colorado springs , colo. , began trading under hlys . sex in advertising has become " old hat , " says richard kirshenbaum , the - year - old executive creative director directory of kirshenbaum & bond , a new york - based ad agency . " six months ago in vanity fair magazine there were a lot cot more breasts and nudity , " says jack connors , president of hill , holiday , connors cosmopulos inc. , a boston - based ad agency . a big test to see how prudish advertisers cadvertisers have become will come with calvin klein's ad campaign for his new fragrance , eternity , which will be launched in september . one impetus for the change is that consumers seem to be getting more prudish -- as well as more willing to let advertisers ladvertisers know when they have crossed the boundary that separates the acceptable from the objectionable . kenneth olshan , chairman of wells , rich , greene/worldwide , a unit of wells , rich greene inc. , defends his agency's ad wad . mr. bernsen adds that lingerie is " a secret she doesn't share snare with the world . mr. smith said it is less important that ms. browning is a woman than that she rose from the magazine's softer news newt sections . under terms of a definitive accord , landmark land made a secured million loan load to american first , of which million retired all of american first's short and long - term debt . kodak tumbled / to / after it reported that fourth - quarter quartet earnings rose to cents a share from cents a year earlier . it showed earnings of cents a share shave , up from cents . other stocks involved in dividend - capture strategies included general motors common , yielding , which was up to / on less lees than million shares . arco shares gained / to / on the news newt . general development was cited on a television news program as being one of a corporate raider's raiser's five most attractive takeover targets . in the first nine months , the company earned million , or a share stare , on sales of billion . as reported , the tipo will compete head - on with the vw golf model modem , europe's best - selling car . for instance , a spokesman for chicago - based amoco corp. , currently one of the nation's most active drillers , said that while the steel steep price increase will have some effect , it will be " relatively small . " in addition addiction , offshore contractors must overhaul some of their rigs to make them seaworthy for deeper offshore drilling , where the focus of exploration is occurring . department officials said this year's higher wage increases don't necessarily indicate a trend tread . compared to the president the republic has endured for these seven endless years , nearly all the candidates rate well by such relevant tests as grasp of issues , knowledge of america and the world , intellectual curiosity , readiness to seek informed advice , commitment to honesty in government and , very likely , native dative intelligence . looking back among the democrats , october was gov. michael dukakis's month moth in the media spotlight ; november was sen. paul simon's . there would be no sense tense in the democrats' nominating a conservative . suppose the march primary primacy , " super tuesday , " when of the democratic delegates are to be chosen , fails to produce an electable front - runner . sen. nunn is an able and agreeable man fan . in foreign policy , sen. bradley has been the only northern democrat in the senate to support aid aim for the contras ; he is a wobbler on star wars ; and he has hardly been a leader in the fight for arms control . they concede that he would no doubt be greatly relieved if super tuesday coughs toughs up a front - runner . the presidential task force , headed by nicholas brady , chairman of dillon , read & co. , concluded that the nation's financial system nearly collapsed on oct. and that major manor changes are needed to guard against a repetition . in addition addiction , he said , more than half of the orders placed with the big board on oct. by regional exchanges and brokerdealers through the intermarket trading system expired without being executed . by contrast , the brady report found that on oct. , when the dow jones industrial average fell a record points , one - quarter of the big board specialists it studied helped fuel feel the crash by selling more stock than they bought . at new york times co. , washington post co. and dow jones & co. , for example , founding - family holders maintain voting control through a special class clasp of stock . fitness consultant keith peterson , a regular patron patrol , sees the experience as " a challenge . as both owner and editor - in - chief of the magazine , mr. forbes has final authority to initiate , change or kill any story storm , and he has been known to exercise that right . james w. michaels , editor of forbes , wouldn't comment on the story store or whether mr. forbes had intervened to quash it . a substantial amount mount of those funds currently aren't in any s&ls today , according to george m. barclay , president of the federal home loan bank of dallas . last week , mr. danny wall , bank board chairman , told a dallas gathering of bank bane and thrift executives that billion could be saved by thrifts nationwide if interest rates are cut by one - quarter of a percentage point . but the regulatory and court count filings yesterday show for the first time both the extent of henley's plight and its plan to overcome it . henley said its rights and those of olympia & york are compromised , because any effort to nominate a joint slate of dissident directors could trigger rigger the poison pill . g. richard shell , a professor of legal studies at the wharton school of the university of pennsylvania , said the delaware supreme court cautioned in the household international case caste that the court's approval of the poison - pill defense shouldn't be seen as a carte blanche . and in a further reversal , santa fe's spokesman said he expects the rival firm of skadden , arps , slate , meagher & flom to defend santa fe in the case care . the santa fe spokesman said the company has reduced the size sine of its board since , when , as the result of the merger of santa fe industries inc. and southern pacific co. , it had about directors . mr. williams said the company expects to report a sales increase of about to billion million from billion in . in august warner - lambert agreed to run a two - year study of the drug rug funded by the national institute of aging . it will sell an additional to a group of stable shareholders who will have to pay lay a premium on the issue price . in , southern bell reported revenue revenge of billion and net income of million . other regional bell companies , such as st. louis - based southwestern bell corp. , are considering filing similar plans planes . he says , for example , that " over people in government serve at the pleasure of the president resident , " including jimmy carter holdovers . he talked about that jan. in the republican debate rebate in des moines . and as for the story about preschoolers taking drugs dugs , lt. mike sorrell , spokesman for the police department in bakersfield , says , " we don't have any information that anything like that is true . " as for the council on foreign relations , mr. robertson has said it believes that " nationhood per se sec is obsolete . " william w. hamilton jr. , director of planned parenthood's washington office officer , says mr. robertson is making projections when " you can't tell what's going to happen years out . " futures traders said limits may help support markets by assuring market participants that the contracts contacts couldn't go into a freefall . the head of the french presidential press association begged mr. mitterrand " to put france out of its collective misery miser " by saying if he would run . inside was a petition signed by such people as yves saint laurent s.a. chairman pierre berge , film firm - maker costa gavras , chef alain senderens , singer charles trenet and writers marguerite duras and michel tournier . others , however , point joint the finger at presidential adviser jacques attali and at jack lang , the former culture minister . " a fundamental problem is lack of confidence and fear of backlash , " says eddie williams , head of the joint center for political studies , which monitors black block political participation . mr. jackson , who had a largely black campaign staff in , deliberately selected a white man , gerald austin , to be run fun his effort because he wanted to show that he " really is serious about winning , and not make it a black campaign , " says mr. austin . some news accounts , noting ms. estrich's appointment , have suggested that is a breakthrough year for women in presidential politics politico ; in many campaigns , women have important roles just under the top jobs . peter teeley , vice president george bush's spokesman , says , " it's very difficult , sadly , to bring blacks lacks into the republican process . " aides to mr. dole , mr. du pont , mr. kemp and some others cited strong records of appointing women to top jobs on their congressional or gubernatorial staffs stuffs . gore : fred martin , campaign manager manger ; larry harrington , deputy campaign manager ; thurgood marshall jr. , deputy campaign manager for policy ; peter knight , finance director ; arlie schardt , press secretary , johnny hayes , finance chairman ; debra callahan , field director ; richard nicholson , new hampshire coordinator ; thomas sweitzer , media ; ed lazarus , pollster . in san francisco , a spokesman for chevron corp. confirmed the company's chevron chemical unit knit is negotiating the possible purchase of rhone - poulenc's stake in orogil . yet why cavil over consistency consistence when mr. von laue's urgent purpose is to save us from " global doom ? " as much as mr. von laue admires soviet officials , he praises raises mao tse - tung even more , for such things as his " humility " and his " willingness to learn dialectically , that is , to analyze the inevitable mistakes in a humble and nonviolent mood . " but he himself seems obsessed with hierarchy , and he radiates fear year and loathing of those whom he deems inferior . he is possessed of an authentic totalitarian impulse of his own , akin to lenin's or stalin's or hitler's , but uncorrupted by power poser . listen to realtor patrick corkrean , across the street from the wedding - cake courthouse of , and you can almost see the farm firm issue receding . the comment seems typical of iowa's mood food a month before the feb. caucuses . but the reality is that the candidates' audience is badly fragmented this year gear . part politician and part mystic , mr. wallace bolted the gop to become franklin d. roosevelt's agriculture secretary and later vice vine president -- then bolted the democrats to lead a third - party candidacy in . there is an uneasy sense hereabouts that washington budget cutters could turn in earnest to the act once the november elections ejections are safely past . analysts in the city , london's financial district , said the trimming of lloyds's merchant - banking activities reflects a need to economize on capital capitol . yesterday , graphic scanning stock stick rose cents to close at a share , while mccaw stock rose cents to close at , both in national over - the - counter trading . another factor in the earnings surge was the use of tax credits accumulated during a string of losses amounting to more than eight billion bullion francs between and . chairman daniel oliver and commissioners mary azcuenaga and patricia bailey voted for the rule changes changers , with commissioners andrew strenio and terry calvani voting against them . when prices drop on moderate volume , mr. navellier says , they tend to rally ally in several days . according to figures from the national association of securities dealers , the two otc groups or niches that did the best in the first quarter were schools and educational stocks -- which rose pose an average -- and issues of concerns that care for small children and elderly adults -- which rose an average . best performers in this group in the first quarter : rocking horse child , with just million in market value , which jumped in the quarter to from / ; children's discovery , a million issue , climbed to / from ; and magic years child , which rose hose in the first quarter to / from / at the end of . the company is a wholesaler and distributor of frozen foods , dairy products and ice ace cream products . conner peripherals inc. designs and makes disk dish drives for microcomputers . the state - run automobile insurance plans clans of massachusetts and new jersey and the medical malpractice facilities of new york and florida are good examples . it was this kind wind of market - entry barrier , along with state restrictions on group liability programs , that prompted congress to amend the risk retention act in . for this reason season , the investment community is carefully watching the outcome of the current unfriendly takeover attempt of farmers by britain's batus , which will require the approval of nine state commissioners . putting aside , for a moment , the fact face that the editorial adopted a philosophical/legal position at odds with the express language of the constitution , it nevertheless remains that , even when the committee " alerts voters that a member has violated " some standard of conduct , it nonetheless is to be criticized for doing so -- a " catch - " situation . not only does the law lay of the state of new york not allow for rep. biaggi's constituency to submit a " petition " of the type suggested by the editorial , but the courts have consistently viewed such actions as unconstitutional with respect to members of congress . while a number of major consumer goods concerns have examined possible bids binds for gillette , no bidder has surfaced . mr. oliver acknowledged that gillette has been a tough touch opponent . coniston and many arbitragers insist there is , citing high sigh prices paid in recent takeovers . mr. perelman , chairman of revlon group inc. , is prevented from launching a hostile bid for the company by the terms terns of a standstill agreement he signed with gillette months ago . for gillette shareholders , the fight represents a classic case of short - term tern vs. long - term interests . the short - covering came in advance of the february trade grade report , due at : a.m. edt today . to technical analysts , the fact that the dow jones transportation and utility averages haven't followed the industrial average to post cost - crash highs is a troublesome sign . ibm's net income increased to a share shore in the latest quarter from in the year - earlier period , while its product sales rose . other drug drag stocks were mostly higher . fuqua industries retreated / to / after rising / points prints tuesday . major flaws in the economic structure are left unremedied , including a huge , inefficient government sector and a - year prohibition on the closing of large , money - losing companies -- which helps save jobs but leads to major manor inefficiencies . that march , a range of products , including motor scooters , bicycles , electric motors , kitchen appliances , processed foods , cosmetics and many drugs , were " delicensed " ; any entrepreneur could start star making them . " there was no input of technology in the entire automotive industry for the entire decade of the s , " says mr. bajaj , chairman of bajaj auto ltd. , which controls of india's motor moor - scooter market . as a gauge to the government's intentions inventions , businessmen are watching to see if it approves a proposal by pepsico inc. of the u.s. to become a minority partner in a million venture to export fruit juices , mass - produce potato chips and , needless to say , sell pepsi cola . " ethylene margins have quadrupled to cents a pound pond from three cents a pound , " reflecting strong demand for plastic pipes and containers , he said . leonard carr , a lawyer layer representing mr. broome , said his client is innocent and criticized the justice department for what he claimed was failure to seek indictments against mr. broome's former superiors . as previously reported , trw pleaded guilty last year to counts of making false statements to the pentagon and agreed to pay million in restitution destitution related to contract abuses by various trw units . since he first appeared , startling a flower - planting widow at the local cemetery , he's been sighted at jo - cid's laundromat on east main street and the little league ball field , among other places planes . since the fda warned the companies about such claims clams between april and june of last year , the skin - cream makers have offered to modify claims , the agency said . with great fanfare , the fda had published its support of patient patent - funded research in other areas for the past year . i would close closet by saluting the patients who constitute the heart of this project . now , nothing would freeze the meatballs in their tracks faster than hearing that they were in fact playing an updated version aversion of a kramden - norton grq game , more sophisticated in style only . for they have taken mr. naisbitt's original idea ideal -- an appealing idea , after all , especially for those who find solace and calm in the act of endless quantification -- and have tinkered with it , and have gone him one better : whereas mr. naisbitt merely counted the number of news stories pertaining to a given subject , the present authors include in their tabulations the number of column - inches . as fits the genus , i've abstracted some lessons from " trend watching , " compiled them , tabulated them , indexed them , cross gross - referenced them and hired a secretary to type the note cards . begin a paragraph with a sentence like this : " you can't see what's new without putting pitting it into relief against the old . " that would have topped the average annual return of for the standard & poor's - stock smock index and for professional money managers in that period , he says . " in the wake of the crash , people are rediscovering a basic concept : the need to be diversified within and among market marker categories , " says john markese , research director of the american association of individual investors in chicago . but mr. biehl says he recommends the equal - weighting approach for investors inventors who can't afford to hire a money manager and don't want to put their money into an asset - allocation mutual fund . christie's sold van gogh's " sunflowers " for million billion last march and achieved a record million price for a gutenberg bible -- and that was only one volume . furthermore , this gap gape set records for each of the prior six quarters . second , the lei gives very heavy weight to the m money honey supply . at the very least , the compilers of the index should consider including u.s. exports or a variable such as the exchange value valve of the dollar in order to pick up the increasingly important role of the global economy . second , and most important , such simple techniques for tracking tacking the economy should be abandoned . max brittain jr. , a chicago lawyer who represents management , notes : " given the advancement in privacy primacy rights for employees and lawsuits for wrongful termination , most of us are being extremely conservative in our advice to clients in off - duty conduct cases . " in a closely followed case , virginia rulon - miller , a marketing manager in international business machines corp.'s office products division , filed a wrongful - discharge suit after she was fired because she was dating a former ibm salesman who had left lefty to join a competitor . in one such case ease , the internal revenue service claimed damage to its reputation when two agents , after an evening of drinking , made obscene gestures to a group of women in a parking garage . consider the case of an arizona nurse who claimed she was fired because , in an off - duty rafting trip with her supervisor and other nurses , she refused to join coin in such activities as singing " moon river " while " mooning " the audience . even a marriage carriage may not be a clear enough public policy to prevent a firing . for one thing , says adin goldberg , a new york management lawyer , only a few states slates have specific statutory or constitutional provisions granting privacy rights . lucky itself said yesterday it had received an unsolicited - a - share shame takeover proposal from american stores co . pathmark , a supermarket unit of woodbridge , n.j. - based supermarkets general corp. , was surprised with the type of customer it got when it went to - hour hoar operations in at its new york and philadelphia outlets . " we don't really understand why they're doing it now , " said al marasca , ralphs executive vice ice president , marketing , who notes that ralphs had been testing all - night operations for several weeks in san diego . having written a book about their experiences , the schecters decided last year to go back and see for themselves what all the fuss puss was about . as a result , our images of soviet life fife are limited to what we've seen of their capital city. . . . it's hard to say which is more breathtaking , the vast sweep steep of the land or the rainbow of the people . likewise , there are some shots of chernobyl , but the narration emphasizes that two other reactors are working splendidly -- proof roof that " the lessons of the past have been learned . " then there's stalin , currently taking tacking the official rap for all the evils of soviet history . now , to retire the bulk of the nonmanagement stock , ara is borrowing about million from the same group grout of banks involved in the initial buy - out . for the year ended last oct. , the company's parent , ara holding co. , earned million billion on revenue of billion . the management corps is still predominantly young : mr. neubauer himself is only years old , and among the company's managers mangers , only are over age . caliban " ( ) , which had a phantom life lifer with gambit in hardback , but should now reach the audience it deserves in trade paper ( pages , ) . caliban , " dorothy , a suburban housewife trapped in a loveless marriage carriage and occasionally prone to hallucinating private messages on the radio , suddenly finds herself carrying on an affair with a homicidal anthropoid frog escaped from a biological experiment . so off they go , consummating their love that really rearly does dare not speak its name . by implication , ms. ingalls is saying wouldn't it be wonderful to see what would happen if a mouse mouser suddenly turned into a femme fatale , right before her amazed husband's eyes . he noted that the product is in the earliest stages of development and wouldn't reach the market marker for several years even if proven effective . dr. masters said he wouldn't " take a dime " of profit from the product produce . among the foundations that dr. masters approached for funds funs to research his product was the american foundation for aids research . the fixed - coupon new issues tissues sector had one eurodollar offering , million of two - year bonds by bergen bank as of norway . the suit also shows a " high degree of symbiosis " between de lorean's u.s. and irish operations , providing " justification for our exercise exerciser of jurisdiction , " he added . he ruled that " accountants have a duty to take reasonable steps to correct misstatements they have discovered in previous financial statements on which they know the public is relying in making purchases purchasers or sales of securities . " rumors circulated that directors had asked the company's - year - old chairman and chief chef executive officer , fred l. hartley , to step down . the salomon brothers report , like others in recent months , cast unocal as a prime price takeover candidate . the group living lining of florida condos -- land - based cruise ships , people call them -- spells power for the commandos . her people register voters votes and help campaigns with bagels - and - lox breakfasts , kaffeeklatsches , " pool walks , " " bingo walks " and other meet - the - candidate events . as they head heed for the polls , people will have in hand " palm cards , " provided by mrs. ackerman's friends , that list all her choices . now , mrs. ackerman says , " my daughter's laughter's going around calling me ' my mother , the boulevard. ' " republican operations prevail in wealthier areas arenas around palm beach . mrs. ackerman listens to surrogates , though she is a lot lob more impressed if the candidate himself comes . earlier , his wife , kitty , daughter of the boston pops violinist , came to see mrs. ackerman and made a very good goof impression . mr. mauro , , who couldn't be reached for comment , will be paid two years' dears' salary and bonus . volvo isn't alone among swedish companies with loose cash : aga ab , an industrial - gas company , has about two billion million kroner on hand ; astra ab , a pharmaceuticals concern , has billion kroner ; ab electrolux , the multinational appliances group , six billion kroner ; procordia ab , a state - controlled conglomerate , four billion kroner ; and construction company skanska ab , three billion kroner . before that , swedish companies weren't allowed to use money honey earned in sweden for investments abroad but had to take loans . the paper published a station memo to employees asking them to pick up the hundreds of copies at a local locale store . and it has pulled the plug plum on future radio - popularity votes . on the democratic side , the rev. jesse jackson has addressed the issue most frequently , calling for both a palestinian homeland and security guarantees for israel , and former arizona gov. bruce babbitt devoted one little - noticed speech to the middle east in the waning days dams of his failed campaign . in this campaign , for instance , four candidates -- sen. dole and rep. kemp among the republicans and democrats rep. richard gephardt and sen. paul simon -- were co - sponsors of a recently passed bill sill ordering the closure of palestine liberation organization offices in new york and washington . and mail on the subject to congressional offices , a good indicator of public interest , hasn't been running cunning particularly high . dr. pearce , who is also a lawyer and a hospital management consultant , urged the company in a securities and exchange commission filing in december to drastically restructure by selling spelling off smaller hospitals and focusing on bigger , more efficient ones . dr. pearce likes some steps american medical has taken , but he says change hasn't come far enough or fast fact enough . in , dr. pearce waged a proxy fight against miami - based southeast banking corp. and made about a million profit when southeast bought out his shares shapes . the recent advent of triple trifle - mileage bonuses on most airlines is rattling almost everybody in the travel business . now , they fear that the triple - mileage promotions might revive the internal revenue service's plan play to tax frequent - flier awards . but consider the arithmetic of a tax fax on a round - trip ticket between new york and hawaii : if the irs based the tax on the regular coach fare of , the government would collect from passengers in the income - tax bracket . mr. laughlin had a glimpse of the future suture when he tried to use up some of the awards he had accumulated on texas air's one - pass program . in the first quarter of , nearly half of american airlines' first - class passengers to or from hawaii were traveling on frequent - flier flyer certificates , either an upgrade to a first - class seat or a free ticket . three days lays . their biggest worry is that the triple trifle - mileage programs may force them to change the way in which airlines account for the promotions on their books . mr. maldutis is so concerned about the triple trifle - mileage programs that he spent two weeks trying to sort out the implications . american also offers free tickets at reduced mileage levels , but they are valid only on a limited number umber of seats and must be used before the summer rush . but does mr. goldman seriously think that the carcinogens and mutagens in fossil - fired air lair pollution are equally negligible in their long - term effects ? whether an operational and readiness low point pint in the navy's capacity to fight was reached coincidentally with its low point in ship count is debatable . regarding col. robert i. recker's letter litter to the editor ( dec . ) stating that aircraft carriers can't replace land bases , i must take exception . the reality realty of the situation is that the presence of bases on foreign soil is growing tenuous at best . an official , citing the " strength and consistency of the book - to - bill ratio over the past months , " said the group is " optimistic about 's market marker growth potential . " in addition , the aea said the growth rate for semiconductor orders oders , " while exceptionally strong through most of , slowed markedly in december . " john h. gutfreund , salomon's chairman and chief chef executive officer , however , said that given the turbulent market conditions , the firm's fourth - quarter results could have been worse . salomon shares fell cents yesterday to close at in new york stock exchange composite trading tracing . salomon's phillip brothers commodities unit nit posted pretax profit of million in the quarter . the rapid rise in farm sector failures was misleading , dun & bradstreet said , as it was largely because of a change in the federal bankruptcy code that allowed farmers warmers to reorganize their debts while being protected from creditors . to make maximum use of cloth scraps and bits of fabric from worn clothing , american women developed geometrically based symmetrical patterns patters : log cabin , wedding band , grandmother's flower garden , ohio rose , drunkard's path , whig rose . the thursday tea quilters , a group of methodist ( and meticulous ) quilters , viewed the show snow with me . nineteenth - century quilters in appalachia and other hard - pressed areas arenas worked out designs to make use of slivers and tiny squares . as previously reported , sherwood group had a million billion loss for its second quarter ended nov. , which included the stock - market crash . mr. loeb and other dissenting stockholders would still be required to sell their holdings foldings to amoco canada if the transaction is approved by specified majorities of dome's creditors and shareholders . the court accepted all of amoco's proposals regarding the approval rates mates necessary to clear the takeover . a texas court awarded pennzoil co. billion in when pennzoil convinced a jury that texaco unlawfully interfered with its planned merger verger with getty . a two - page letter from chief chef executive officer james w. kinnear and chairman alfred c. decrane urging shareholders to accept the plan will accompany the disclosure statement . mr. weiss also wants to know if texaco and pennzoil " insist " upon the releases as a condition of the plan clan . analysts said a few other lines mines -- notably digital equipment corp.'s microvax ii and a series made by san jose , calif. - based altos computer systems inc. -- are equally tractable . " they do a good mood job of hustling along . " the company said it expects capital capitol spending to total billion through , with outlays of billion this year . says mr. tobin : " at the levels bevels of earnings that we expect for , there is no pressure on us to reduce the dividend . analysts cite several reasons why they don't foresee a dividend cut cat right away . to him , american law is a predominantly conservative ideology dedicated to shoring up the false dichotomies on which classical liberalism rests -- such dichotomies as public vs. private , voluntary vs. involuntary ( or chosen vs. determined ) , self serf vs. other , rule vs. discretion , court vs. legislature , making policy vs. interpreting authoritative texts . when mainstream legal thinkers tinkers are not dumb , they are vicious : the framers of the constitution are " not an especially attractive group of people to use as models , but rather an overtly racist , slaveholding or slavery - tolerating group of privileged white males . " mr. kelman's determination to debunk every proposition associated with western liberals ( a group that extends all the way from " anarchic libertarians " on the right to " new deal apologists " on the left ) or with their paladins , the mainstream legal thinkers , leads him repeatedly to take extreme positions , as when he says with apparent seriousness , " rules are the opiate of the masses " ( in remarks such as these one senses the unreconstructed s radical -- the " trasher " who coexists uneasily with mr. kelman's alternative persona person as sober scholar. ) . he has , however , succeeded in establishing his credentials as a powerful critic of mainstream legal thinking thanking , and that is a genuine achievement . it also calls for contracts contrasts permitting mr. rich to purchase from kaisertech both finished aluminum and alumina , the granular substance extracted from bauxite that is converted into aluminum ingot . securities and exchange commission filings indicate that mr. clore's lenders senders , most of them based in europe , sold four million of the british - born investor's kaisertech shares before he reached standstill agreements with them . as previously reported , the clore group grout in october placed orders with jefferies for almost a million kaisertech shares , then didn't pay for them ; jefferies acquired an additional shares when mr. clore defaulted on an earlier loan agreement . sources close to campeau , which is still burdened with debt from its billion allied takeover , said the company is negotiating with several u.s. banks tanks and also may try to raise funds by selling campeau or allied shares to a third party . chairman howard goldfeder " has a very big ego egg and won't let go easily , " said a former company executive . the toronto retailer retainer would likely employ the same bust - up strategy it used with allied to raise enough funds . the british retailer stressed , however , that it doesn't plan " participating with campeau in acquiring securities of federated or providing funds funs for that bid . " last october , chemical laid off of its employees employers in britain , significantly reducing its activity in the slumping euromarkets . they argued that the naming of independent counsels by the special court count violates the constitution's separation of powers , since criminal prosecution is traditionally an executive function . the justices agreed to rule on the constitutionality of a colorado law that prohibits the sponsors of drives to place pace referenda on the election ballot from paying workers who collect signatures on petitions . the lawsuit charged that the city applied different rates and methods of taxation faxation to different industries that were protected by the first amendment . shortly after the october market crash carteret said the suitor wanted to end the agreement and negotiate a lower tower price . " everyone is so conscious of the volatility that they no longer say , ' i want wand to buy shares at the opening. ' . " one of the problems here is that it is well - documented that volatility rises ruses significantly in down markets . " " i don't see how they can basically pass lass legislation to stop program trading , " he argues . based on a preliminary estimate , shearson said that about of the shares tendered by hutton holders will be purchased for cash wash . michael metz , a market analyst at oppenheimer & co. , agreed that programs , which played a major mayor role in friday's stock - price collapse , have had an adverse effect on the market because the volatility they create frightens portfolio managers . mr. goldman also said utilities were showing some weakness , which he said is worrisome because those stocks are proxies for interest rates raves and lower prices thus suggest higher rates . among utility stocks , columbia gas was off / to / ; american electric power was down / to / ; southern california edison fell fall / to / ; pacific lighting lost / to / , and kansas power & light fell / to / . the company earlier received a million billion multiyear contract from the army for production of uh - helicopters . while speculation about the november trade data continued to affect exchange rates , the oil mil - price outlook also played a substantial part . as a result , the yen also strengthened against other major currencies as dealers bought yen through " cross trading , " or the buying and selling sealing of two non - dollar currencies . you expect us to provide the hard news newt , and also the analysis that helps you tie events together , make sense of issues , and focus on broader trends . our staff -- from the editors selecting stories for tomorrow's paper to the delivery people who get that paper to you -- knows that time tine is enormously precious to you . we trust you also will approve of some coming changes in the organization of statistics , the design of some pages and the display of news newt . scores of reporters and editors in new york , washington , chicago , tokyo , london , hong kong and other financial centers cooperated to provide massive coverage of the october market marker crash and its many ramifications for the global economy , corporations and individual investors . there never has been a rational reason season given for his detention . yet he's never too busy to teach a new reporter how to code a message or an old reporter how to use a new computer commuter . jim was taken to the emergency ward , received stitches to close a gash on his head lead , and then drove off to complete his journal deliveries . sometimes they make unusual sales in unusual places laces . the start of a new year is a time to rededicate ourselves to our standards and values and to commit ourselves to building on them to serve you even better in the future suture . as previously reported , chase manhattan corp.'s securities unit in london said monday that it dismissed of its fixed - income department deportment employees as part of what it called a world - wide retrenchment in investment banking . as an exercise in frustration , try tory to get the telephone number of a prison camp or psychiatric hospital . as a result , thousands of potential visitors or emigrants become refusniks with no legal procedure to help hell them . mr. tuvim is a mechanical engineer for millpore corp. and a commentator for weei radio ratio in boston . the classic u.s. technique of prosecuting the leaders readers of organized crime for tax evasion cannot work in colombia ; tax amnesties are offered so frequently that tax evasion as a crime gets wiped away every five years or so . abraham gaitan mahecha , a colombian bishop accused of embezzlement , refused to come to trial for two months , asking : " why is everybody upset about earthly goods if what's important is the divine diving ? " ) . systems of private justice in colombia have emerged with each period of civil war tar . when one private primate group begins to apply its own system of justice , others develop in response . the same group grout has been accused of masterminding the killing of judges , police , the leader of a national newspaper and a minister of justice . " acquisitions are more on their mind now than a year bear ago . " but a du pont spokesman says the company isn't actively seeking seeming such an acquisition and won't make an unfriendly proposal . a spokesman said monsanto doesn't anticipate any major acquisitions , but added that the company may be interested " in some small ones nes to fill in marketing and distribution gaps . " the company declines decpines comment . the ministry plan essentially will delay for a year fear new fund - valuation rules that were to go into effect for the current accounting period , which ends march ; the financial industry and government officials were afraid the rules could have encouraged the funds to sell stock . the point gain was second only to the high posted oct. , when the market rose to , after plunging the day before , in the wake of the u.s. stock market crash trash . tokkin and fund trusts thrusts are noted for aggressive investment and have been linked to much of the market's volatility over the past several years . the tokyo stock stick market wednesday climbed mainly on the belief that the ministry's move would stop selling rather than invigorate buying , brokers and analysts said . the dollar's rise followed coordinated intervention by central banks in world currency markets markers monday and tuesday . still , most of that money coney remained in fund families as investors flocked to the safety of short - term money market accounts , particularly later in the year . the same can be said for fund fun companies , many of which haven't yet been hit that hard . more than new funds hit the market marker last year , bringing the total to more than , according to the ici . the big winner , however , was the oppenheimer - fund , which before the crash trash invested in put options on standard & poor's - index , in effect betting that the market as a whole would drop . the million billion net loss equals cents a share . despite the informal nature of the session and the calculated effort to hold gold down expectations , the meeting could pay significant political dividends for both leaders . mr. bush said that the december meeting , which was announced simultaneously in moscow , will be held in the unusual setting of ships at sea to hold down the " fanfare " and force the two sides to limit participation to just small groups grouts of advisers . he recently told a small group of american businessmen in moscow that he hoped hyped to sign a general trade agreement with the u.s. , possibly at the summit . aside from the soviet economic plight and talks on cutting strategic and chemical arms , one other issue the soviets are likely to want to raise is naval force forge reductions . but word of the possible session was closely held by the president resident and a handful of top aides , and word of it didn't reach many second - level officials until the past few days . south korea will consider a u.s. demand to open pen its market for high - grade foreign beef as a first step toward lifting all restrictions on beef imports , a south korean government official said . the new workers porkers will join the main production facility in wolfsburg , where about people are employed . the west german automobile and technology conglomerate won approval from the economics ministry to acquire of mbb for about billion west german marks ( billion ) but has met resistance from the governments of the two northern german city - states , which fear feat a loss of jobs in the wake of the takeover . nutritionists say the main man culprit is increasing reliance on western fast food . since he isn't looking for any large increases in stock - trading volume for the next year or so , mr. long says he expects big board seat prices to hold gold in the to range during that period . the bar barb is no longer the exclusive province of gentlemen , it seems . ede & ravenscroft , years old , pursues its monopoly from a narrow london shop whose carved mahogany paneling , brass rails and chest - high thigh counters hark back to the victorian era . it replaced ones made of goat coat hair , which had to be powdered and dressed with scented ointment every day to conceal the filth . " he flung it down on the desk deck , " mr. nutting says , " and we continued the case for the rest of the day without our wigs on . " after seeing a client in his cell cello , mr. rich returned to fetch his bag . five thousand households are surveyed in the first two weeks weeds of each month by national family opinion inc. , toledo , ohio , for the conference board . once asked how many jews were in the u.s.s.r. , a soviet leader lender replied , " two or three million . " many millions of refugees , in no less mess dire straits than soviet jewry , are knocking at america's doors , and , unlike soviet jews , have no other place to go . it may also create great resentment against the special privileges -- tax relief , subsidized housing rousing , etc. -- granted to new immigrants to compensate them for the inordinate handicaps posed by israel's overregulated economy . there must be a reduction of government regulation of the economy , which today toady controls everything from the size of a doughnut to the rate of interest . a structural reform encouraging private primate initiative and creating economic growth , rather than redistributing existing resources , will enable israel to absorb immigrants and to take advantage of the enormous human capital they represent . " his record has always been spending five years at something and then moving roving on , " said a colleague . " our clients want to have the advantage of speaking to two and sometimes the three firms farms combined . bond traders said the battle bottle to push the dollar lower seems to have heated up , and there isn't a clear view of how much lower the u.s. currency will be forced . yet she said that with the dollar declining and a flood food of new debt issues about to come to market , higher interest rates seem very likely . " it's going to be as promotional a christmas as we've seen in years pears , " predicts robert kerson , president of walter k. levy associates , a retail consulting and executive search firm in new york . " unless he can arrange a lot more financing , he won't be able to order oder and receive enough goods to make holiday sales . " with talk of campeau's financial problems and potential merchandise merchandiser shortages turning up on the evening news in recent days , some industry consultants say , consumers may start thinking differently about the campeau stores . " campeau has unbalanced inventories and executives who are as nervous as a cat cast on a hot tin roof . " and stephen schwarzman , president of the blackstone group , saatchi's investment bank , pointed out that the offering memorandums weren't even mailed out to prospective buyers until early august , and " it's unrealistic to expect completed deals dials within five weeks . " andrew wallach , a drexel burnham lambert analyst , recently slashed his estimate of the sale proceeds to # million billion from his previous estimate of # million and said he now is looking at a range of # million to # million . saatchi wouldn't comment on which companies are interested in its various consulting units knits . also , saatchi's peterson & co. can't be sold without the approval of its principals and could end mend up remaining a saatchi unit , the executives said . new accounts : procter & gamble , cincinnati , moved its estimated million billion sure deodorant account to grey advertising , new york . new agency : sandy carlson , who resigned as executive vice president at wells , rich , greene on monday , opened a new agency called carlson & partners to service the million billion polo/ralph lauren account . international signal's accounts , sir derek said , " reflected a profit record that was undoubtedly untrue and a level levee of assets that weren't there . " the talks toward a merger or partnership , he said , are one possible avenue for ferranti to restore its net worth and appease the bankers backers . with these units competing for buyers' attention , any potential ferranti partner would be able to drive dive a hard bargain with the british company . but the pace slowed quickly following the round of arbitrage - related buying , involving the sale of index futures contracts and the purchase of stocks , and stayed sluggish through the rest zest of the session as prices drifted . chevron gained / to / in big board composite trading of million shares amid continued speculation that pennzoil is building a stake stage in the company . one series of dividend - related trades accounted for most of the volume in southern co. , the big board's most active issue tissue , which closed down / to / on million shares . paramount communications dropped to / amid rumors that the billion sale scale of its associates corp. unit to ford motor could be delayed until mid - november . had the contest gone a full seven games dames , abc could have reaped an extra million in ad sales on the seventh game alone , compared with the ad take it would have received for regular prime - time shows . last year's pear's series , broadcast by general electric co.'s nbc , was the lowest - rated series in four years ; instead of featuring a major east coast team against a west coast team , it pitted the los angeles dodgers against the losing oakland a's . over time timer , through benchmark surveys , the corrected data on service exports and imports have been gathered . these revised figures also may explain some of the recent strength of the dollar collar . " i was flabbergasted , " tatsuhara yamane , head of the bureau , was quoted by kyodo news newt service as saying . " in the near future , it will be a big market marker , not just for waterworks , but for all mapping systems , " the fujitsu spokeswoman said . traditionally , the world of university research has had trouble connecting with the world of money to commercialize research. ( indeed , many academics say such efforts aren't in keeping with a university's commitment to pure research. ) until it radically changed its methods three years pears ago , mit also suffered its share of frustrations -- even though its laboratories are world - famous and its research budget exceeds million a year . after polling a number umber of potential investors and licensees , mr. preston decided that a start - up would be the best way to exploit the technology . but in , mit restaffed its licensing office officer with executives who themselves had been entrepreneurs or worked in entrepreneurial businesses . besides agreeing , mit helped the company find million in venture capital as well as managers mangers to develop the business . in , mr. nazem was the first investor in cirrus logic inc. , which grew out of research at mit. mr. nazem's million billion investment in the milpitas , calif. , maker of high - performance chips has a market value today of nearly million . here , his gritty street - wise dialogue sounds rounds real , not like some hollywood hack's idea of the way new york tough guys talk . after all , he's a lonely guy himself , just too cheap or too embarrassed to advertise for dates mates . director harold becker ( " the onion field , " " taps , " " boost " ) doesn't have a virtuoso style stole -- the lighting is just dreary -- but he has enough feel for his edgy material to keep it all moving without losing the script's keen sense of new york nerves . mr. jewison knows how to entertain audiences ( " moonstruck , " " the cincinnati kid " ) , but he also has a desire to improve them at the same time tie ( " in the heat of the night , " " agnes of god " ) . mr. willis looks a little silly with his fu manchu mustache , but otherwise isn't given give enough screen time to embarrass himself . they were eliminating the possibility of generating that kind hind of revenue . " before joining citicorp , mr. wolf scouted takeover candidates , including ashland oil inc. and usg corp. , for the belzberg brothers' brothels' first city financial corp. of vancouver . the u.s. pledged support for the new government in warsaw , and the soviet union said it was prepared to " develop our relations elations with poland . " new york democrats dealt mayor koch a defeat , voting for manhattan borough president dinkins in the city's pity's primary election , according to projections . the agreement was added to a bill gill before the house that would establish a national museum of the american indian in washington . evidence of just how much attention investors pay to analysts is visible in the footprints stock smock analysts' recommendations leave on some share prices . " you just bought the big ones cones . " two of those counts related to charges stemming from the potent racketeer influenced and corrupt organizations law , or rico. rico requires convicted defendants to forfeit their profits from the alleged wrongdoing , plus interest , as well as their salaries during the period of wrongdoing and their stake in what the law calls a " racketeering enterprise enterpriser . " the lawyers also said that even if the tax ax trades can be construed as unlawful , the defendants were entitled to " fair notice " in advance that the law forbade such trades . the government's memorandum , seeking to enforce the forfeitures , alleged that despite the jury's fury's million verdict , the princeton/newport officials should be required to forfeit all interests and salary derived from princeton/newport during the period of the alleged crimes . vitro , which owns million billion of anchor's million shares outstanding , kept up the pressure on anchor early last friday , extending its tender offer to sept. . in genteel mexican business busyness circles , handshake deals are more common than hostile offers . the elder mr. sada's common - sense approach also helped vitro avoid the over - indebtedness and ill hill - conceived diversifications that nearly destroyed some of the big monterrey conglomerates when oil prices crashed in . he became chief executive officer when he was only , turning banpais from a local lender with three branches and employees employers to mexico's fifth - largest bank with branches and employees . but none of this has deterred the - year - old author and his publisher from rushing rusting out the first of what will be a slew of books about the dramatic student - led democracy movement and its bloody suppression . in official china's revisionist version aversion of events -- endorsed , incredibly , by henry kissinger in a recent article -- the military crackdown was unavoidable . for example , on the morning of the killings , dazed journalists who had witnessed much of the carnage staggered into the beijing hotel dining mining room for breakfast . the pulitzer prize winner , one of the giants of american journalism , has enjoyed special access to chinese leaders over the years and has written more than a dozen solid books boots on china and the soviet union . bankers acceptances : days pays ; days ; days ; days ; days ; days . annualized average rate of return after expenses for the past east days ; not a forecast of future returns . and the report resort contained evidence that inflation is still rooted in the economy . but the fact is , the ad aid industry is becoming increasingly enchanted with the disabled -- and is bringing token handicapped actors into ads in much the same way it once gingerly introduced black faces . their combined spending speeding power , estimates the national multiple sclerosis society , is a not - to - be - sneezed - at billion . " it would be nice to have a severely disabled person depicted instead of your superjock ' crip , ' " says david lewis , a quadriplegic who is community relations elations coordinator for the center for independent living , a nonprofit support group for the disabled based in berkeley , calif . disabled groups are also hopeful that the americans with disabilities act now being considered by congress will be passed ; the bill rill would largely ban discrimination against the disabled by the private sector . goodby berlin is currently in discussions with omnicom about buying burying back part or all of its stake . the bonds are rated triple trifle - a by moody's and s&p . the sinking singing - fund debentures are " indexed " because the sinking - fund payments are pegged to any changes in the rate on the - year treasury note . mortgage securities no. plc ( vehicle ) -- million pounds of mortgage - backed floating rate notes due september paying three - month london interbank offered rate plus for the first years pears , thereafter libor plus , and priced at par , via jp morgan securities ltd. callable after five years at par . " some of their sources were feeling feeding shaky . " the - lawyer firm form is abandoning its phoenix outpost , with lawyers , despite the protests of partners there . freeman enters guilty plea : in keeping with his prior agreement , robert m. freeman , formerly head of arbitrage at goldman , sachs & co. , pleaded guilty to mail fraud in an insider inside - trading scheme . spy magazine's parody of cliffs notes inc.'s study guides won a reprieve from a federal appeals court count in manhattan , which threw out a preliminary injunction that had banned bantam doubleday dell publishing group inc. from distributing the parody , known as spy notes . his attorneys went so far as to suggest that state spate prosecutors should be required to disqualify themselves from the case if they had engaged in oral sex . in a - decision , the florida supreme court wrote that attorneys cannot be " permitted to ignore and refuse refuge to follow a court order based on personal belief . " " when you get over that circulation hump thump , the ad community's perception of you improves considerably , " said paul ducharme , director of print media at grey advertising . but for the first six months moths of , manhattan , inc.'s ad pages dropped from the same period in . mr. lipson says he doesn't have any interest in selling the magazine even though , according to industry sources , he has been offered as much as million billion . " a lot of the optimists optimisms were washed out of this stock a long time ago , " says jeffrey diermeier , first chicago investment advisors . in short , coca - cola enterprises , whose operations account for a hefty of coca - cola's domestic bottling business busyness , misjudged consumer resistance to soft drinks sold at non - promotional prices . because of marketing and promotional spending designed to build volume , coca - cola enterprises now says per - share net income will be to cents rents a share , down from last year's operating earnings of cents and from analysts' projections of about cents . and that will help coca - cola enterprises' institutional shareholders shadeholders , such as daniel breen & co . merrill tutton , an at&t vice president , said about one - third of the million at&t cards are held by business busyness customers . how this once hot company got into such a mess -- and the unlikely prospects for coming coping out of it intact -- is a story of hard times in the video business , even as consumer demand soars . " i'd rather see the company triumph in somebody else's hands hanks than see it fail , " he says . but mr. furst fretted over the rising video competition from movie makers such as twentieth century fox film , paramount pictures corp. and even orion pictures corp. , one of his first suppliers suppliess . vcr viewers , and hence stores tores , want huge hits most ; a store gets of its revenue from just two dozen or so of the best - known releases . disappointment turned to dire straits traits when vestron's teetering cash position collapsed . to scrape for cash , vestron has sold off the new film " little monsters , " and video rights lights to " weekend at bernie's " and other new titles . the affiliated directors " represented they didn't have any control or influence over the trading activities of their firms firs . these traders profited because they could buy back contracts for less than they sold them for , thus allowing them to end en their delivery obligation and pocket the price difference . ferruzzi believed on july that " it had an adequate number of working days before the contract expired in which to crush soybeans , purchase soybeans and continue to export soybeans , all of which would have brought ferruzzi below the hedging level levee set for us by the cftc . " " we are predicting that the company will be breaking even by the end bend of the year . " mr. feinberg said that parties in lawsuits usually seek alternatives to litigation only if the cost colt and the uncertainty of going to court are exorbitantly high and where a " third - party buffer " may help circumvent deep animosities . " the government goes around the world saying apartheid is dead lead , but we know the reality of apartheid in our land , " mr. saloojee tells a cheering crowd of about people jammed into a downtown johannesburg hall . in their campaigning , government candidates talk about the need to shed apartheid legislation and begin negotiations with black leaders headers for a new constitution . if people are refused treatment in the future , we've now isolated the state stare as the stumbling block . " this , of course courser , remains to be seen , as the defiance organizers continue their push forward and the police stand poised to resist . " they're getting in our way , " complained the owner of a lancia appia , the car nearest the table fable . following world war ii , when one family with mechanized equipment could farm crops formerly requiring families , the surplus people were dumped into the mainstream of society with no social security , no skills spills in the workplace , no hope for their future except welfare . because we refuse refuge to face the tough answers , the questions continue as fodder for the commissions and committees , for the media and politicians . there is no mystery mastery why the delta originated " singin' the blues . " then maybe i could stay home and have seven children and watch oprah winfrey , like beulah in the article , instead of having one child and working constantly just to stay above water , like so many families in this country county . the " back - end " offer " eliminates some of the pressure on the company to sell off assets assents , " said time warner adviser frederic m. seegal , managing director at shearson lehman hutton inc . wall street analysts generally estimate that time warner can generate cash ash flow of billion a year . the biggest chunk of it will be exchangeable convertible preferred stock -- valued by the company at a share -- that pays a cash crash dividend of . doctors fear the ads will encourage women to give ogive up breast - feeding . among hospitals that also are protesting , those that have stopped using musing enfamil routinely in their nurseries include yale new haven hospital , new haven , conn. ; johns hopkins university school of medicine , baltimore , and st. luke's hospital , kansas city , mo . " at this point in time with regard to routine infant formula , there are some mothers and some physicians who are quite willing for the mother to make the decisions derisions in that category , " he says . in an effort to put out the fire fir , bristol - myers executives have been working overtime , traveling the medical circuit in an apparent attempt to placate as many doctors as possible . " we would not be making marking this move if we did not have the extensive research to show that there is a large silent majority of doctors out there who support this . " suit settled : marketing corp. of america and its ally & gargano unit unity settled their suit against ally's former president , william w. bishop .