When such claims and litigation extend beyond the period , the syndicates can extend their accounting deadlines . 
 Lloyd 's said there are currently 115 open account years involving 68 of the market 's roughly 360 syndicates . 
 The open-year accounting practice `` is widely recognized within Lloyd 's as of serious concern '' to the 31,329 member investors , who underwrite insurance at Lloyd 's in return for premium and investment income , Lloyd 's said . 
 The procedure causes `` great uncertainty '' because an investor ca n't be sure of his or her individual liability , Lloyd 's said . 
 As a result , the insurance market plans new measures to restrict the ability of syndicate officials to leave years open . 
 Lloyd 's said it expects to enact new rules mandating the changes by year end . 
 Under the new rules , the officials will have to secure additional information and reports from actuaries , including an assessment of whether officials have acted reasonably . 
 In addition , officials will have to get quotes for certain reinsurance contracts and obtain approvals from other syndicate directors . 
 Computer Associates International Inc. reported earnings for the second quarter , ended Sept. 30 , plummeted 66 % , primarily because of the acquisition of Cullinet Software Inc . 
 The nation 's largest software company earned $ 9.6 million , or five cents a share , compared with $ 28 million , or 16 cents a share , a year earlier . 
 Revenue rose 5 % to $ 282 million from $ 268.3 million . 
 The drop in earnings had been anticipated by most Wall Street analysts , but the results were reported after the market closed . 
 Computer Associates closed at $ 13.625 , down 25 cents , in composite trading on the New York Stock Exchange . 
 Anthony Wang , president , attributed the drop to the disruption of the company 's business resulting from the prolonged process of acquiring Cullinet . 
 The acquisition was completed in September . 
 In August , the company warned investors that the acquisition was being delayed , and many customers were holding off on purchase decisions until the takeover was completed . 
 The delays mainly affected sales of data base management products , a core area for both Computer Associates and Cullinet , as well as sales of other products as part of package sales . 
 Residents of this city soon will be seeing ads urging them to visit `` Cleveland 's outdoor museum '' -- Lake View Cemetery . 
 Despite such famous tenants as oil magnate John D. Rockefeller , Lake View Cemetery has fallen on hard times . 
 So the inner-city burial ground is trying to resurrect itself with a television advertising campaign . 
 The ads celebrate the achievements of some of Lake View 's residents . 
 A spot honoring Bill White , the inventor of chewing gum , shows a woman trying to extricate her high-heeled shoe from a wad of gum . 
 Another focuses on Charles Brush , the first person to light a city electrically . 
 It shows a boy hurling rocks at a street lamp . 
 Street lights , the ad points out , `` helped sharpen the arm of many a budding baseball player . '' 
 Cemetery officials hope the ads , which will begin airing next month , will not only draw visitors but bolster burials and endowment fund contributions . 
 Lake View had an operating deficit last year and has a poor reputation as an out-of-repair and crime-infested cemetery . 
 The private , non-profit cemetery has had trouble competing against its for-profit counterparts , which use direct mail and other advertising to sell lots . 
 `` We do n't want to be known as ambulance chasers , '' says William Garrison , Lake View 's president . 
 `` We want people to think of Lake View as an historical park and educational experience . 
 A pleasant place to come and spend a few hours . '' 
 Not all of the cemetery 's better-known tenants lend themselves to the promotional job at hand , however . 
 For example , President James A. Garfield is entombed here , the victim of an assassination in 1881 . 
 -LRB- Mr. Garrison notes , however , that the Garfield tomb is one of the nation 's premier examples of Romanesque architecture . -RRB- 
 Mr. Rockefeller , buried beneath a 180-foot-tall granite obelisk , did n't seem right for an ad either . 
 The oil magnate , who spent his later years passing out dimes to counter his penny-pinching image , `` is n't terribly amusing , '' says Barry Olson , creative director at Innis-Maggiore-Olson , Canton , Ohio , which is producing the ads . 
 But there are plenty of other promising prospects at Lake View , promoters believe : Ernest Ball , for instance , who wrote `` When Irish Eyes are Smiling , '' and Garrett Morgan , the inventor of the gas mask and the tri-colored traffic light . 
 Euro Disneyland shares made a debut like Snow White yesterday while most of the London stock market looked like it had eaten the Evil Queen 's poisoned apple . 
 In its first day of when-issued trading here , Euro Disney soared like Dumbo to close at 814 pence -LRB- $ 13.05 -RRB- , up 15 % from its 707-pence offering price . 
 The overall London market , following Wall Street 's early nosedive , took a late beating . 
 The Financial Times-Stock Exchange 100-Share Index plummeted 40.4 points to close at 2149.3 . 
 Traders credited Euro Disney 's share performance to the tremendous hyping of the project that the shares are destined to help finance : Walt Disney Co. 's 4,800-acre theme park 20 miles east of Paris . 
 The park is slated to open in 1992 . 
 `` The issue was very well-received -- Disney is such a well-known , you can say world-wide , name , '' said Vernon Dempsey , head trader of European equities at Kleinwort Benson Ltd. , which is making a market in the issue . 
 Mr. Dempsey estimated that the issue 's London debut was accompanied by `` very , very heavy turnover -- between five million and six million shares . '' 
 Most of the buying was institutional , he added . 
 Official trading in the shares will start in London , Paris and Brussels on Nov. 6 , when the French-franc denominated offering , valued at the equivalent of nearly $ 1 billion , comes to market in the European Community . 
 U.S. investors will be permitted to buy the shares from EC investors 90 days later . 
 Because of the interest connected with the issue , the London exchange took the unusual step of letting traders establish an officially sanctioned when-issued market . 
 A volatile , unofficial `` gray '' market in the shares has been operating in Paris for about two weeks . 
 In contrast to the London performance , Euro Disney there closed down three francs yesterday , at 79 francs -LRB- $ 12.66 -RRB- bid , but still about 10 % over the 72-franc offering price . 
 `` A lot of people are getting hurt on this wicked whipsawing , '' cautioned Alistair Cuddeford , a London-based Salomon Brothers International Ltd. trader who makes a market in franc-denominated Euro Disney shares . 
 `` There should be no great rush for investors to buy this . 
 A lot of big European banks , mostly French , and Swiss arb accounts have been buying the stock just to flip it '' for a quick profit , he said . 
 Albert Fried Jr. , a 59-year-old director and holder of a 9.5 % stake in the company , was named chairman of this maker of products for the construction equipment , material handling and railroad industries . 
 He succeeds L.L. White Jr. , 62 , who resigned but continues as a director . 
 Mr. Fried also is the managing partner of Albert Fried & Co . 
 Ford Motor Co. intensified its battle with General Motors Corp. over Jaguar PLC by saying it is prepared to make a bid for all of the British auto maker when restrictions on its shareholding are lifted . 
 The statement was part of a Ford filing with the U.S. Securities and Exchange Commission . 
 Ford did n't say how much it might offer for Jaguar , or when . 
 The British government currently forbids any outside investor from holding more than 15 % of the company 's shares without permission until Dec. 31 , 
 But with its stake in Jaguar , which it raised yesterday to 11.95 % , Ford could convene a special Jaguar shareholders ' meeting and urge holders to vote to drop the restriction sooner . 
 A successful vote would put pressure on the British government to lift the restriction . 
 `` We have not made that decision '' to seek a Jaguar special shareholders ' meeting , said Martyn Watkins , a Ford spokesman in London . 
 He emphasized that the car maker only would bid for all of Jaguar under the right circumstances , and said `` those circumstances are n't right or possible at the moment . '' 
 Last month , Ford announced plans to acquire as much as 15 % of Jaguar . 
 Since then , Jaguar officials have confirmed that they are discussing an alliance with GM and said last week that they hoped to reach an agreement within a month . 
 Analysts have been expecting a GM-Jaguar pact that would give the U.S. car maker an eventual 30 % stake in the British company and create joint ventures that would produce an executive-model range of cars . 
 But the specter of Ford eventually launching a full-fledged bid could unravel the GM-Jaguar talks . 
 Jaguar seems to be losing interest in giving GM a minority stake , said one individual close to the talks , adding , `` It would n't surprise me if -LCB- Jaguar executives -RCB- want to wait and see what the color of that -LCB- Ford bid -RCB- is '' first . 
 He predicted Ford officials will meet with Jaguar executives in the next week to outline their proposed offer . 
 Sir John Egan , Jaguar 's chairman , so far has refused to meet with Ford officials , but he is believed to be willing to consider a specific bid proposal . 
 As for GM , its `` fallback position has to be a full bid itself , '' said Stephen Reitman , European auto-industry analyst at London brokers UBS-Phillips & Drew . 
 A Ford takeover of Jaguar would `` have such implications for the balance of power in the 1990s that General Motors ca n't afford to step aside . 
 They will have to throw their hat in the ring . '' 
 A GM spokesman yesterday reiterated the company 's interest in acquiring a minority stake to help Jaguar remain independent . 
 A pitched battle could mean Jaguar would fetch # 10 -LRB- $ 16.02 -RRB- a share , or about # 1.8 billion -LRB- $ 2.88 billion -RRB- , several analysts believe . 
 The prospect of such a takeover fight has sent Jaguar shares soaring in recent weeks . 
 U.S. takeover-stock speculators now own an estimated 25 % of Jaguar shares . 
 In a declining London stock market yesterday , Jaguar shares were down four pence from Monday in late trading , at 694 pence -LRB- $ 11.11 -RRB- a share . 
 In the U.S. , Jaguar 's American depositary receipts rose 12.5 cents in over-the-counter trading , to $ 11.25 . 
 Both Ford and GM badly need a luxury brand to combat new competition from the Japanese in the European and U.S. markets . 
 And financially strapped Jaguar has spent over a year looking for a rich uncle to provide cash and technological know-how . 
 The company has expressed a preference for GM over Ford because GM has promised it would keep Jaguar independent . 
 Ford 's need to acquire some or all of Jaguar became more acute last week when it abandoned a four-year effort to market its German-built Merkur Scorpio sedan as a European luxury import in the U.S . 
 Then , last Friday , Ford 's talks about a possible alliance with Saab-Scania AB of Sweden collapsed . 
 GM 's interest in Jaguar reflects a desire to help diversify the U.S. company 's products in the growing luxury-car segment of the market . 
 Its Opel line has a solid image and a recent string of highly successful new models , but it lacks Jaguar 's cachet . 
 GM officials also see a lot of potential in marrying Jaguar 's cars to the technological know-how of Group Lotus PLC , a British engineering and specialty car maker GM bought in 1986 . 
 Texaco Inc. reported an 11 % increase in third-quarter earnings , which it attributed partly to the company 's massive restructuring after it emerged from bankruptcy-law proceedings 18 months ago . 
 Sun Co. also reported higher earnings . 
 Meanwhile , like many other oil companies hurt by less-profitable downstream businesses , Mobil Corp. , Shell Oil Co. and Chevron Corp. reported lower quarterly earnings . 
 Texaco 's exploration and production earnings improved as a result of its streamlining of those operations as it sold many of its marginal producing properties over the past 18 months . 
 An increase in production at some major oil fields in the North Sea , which had been knocked out by an explosion in July 1988 , also aided results . 
 The sale of a portion of refining and marketing operations to Saudi Arabia helped alleviate the decline in earnings from that business . 
 `` The company has been completely revamped , '' said Frank Knuettel , analyst for Prudential-Bache Securities Inc . 
 Third-quarter net income at Texaco rose to $ 305 million from $ 274 million last year . 
 Revenue declined 3.4 % , to $ 8.4 billion from $ 8.7 billion . 
 Per-share earnings declined to $ 1.10 a share from $ 1.12 a share , largely because of 21 million additional shares issued to retire $ 1 billion of debt . 
 Per-share earnings also shrank because of dividends on a new series of preferred stock . 
 Sun Sun Co. 's net income climbed 18 % to $ 85 million , or 80 cents a share , from $ 72 million , or 67 cents a share . 
 Revenue increased 11 % , to $ 2.73 billion from $ 2.46 billion . 
 Sun said some of the growth reflects higher earnings in the oil sands operation of Suncor , a majority-owned Canadian subsidiary . 
 Chairman Robert McClements Jr. said the synthetic crude oil production from the facility rose even as the price for that oil increased . 
 Overseas exploration and production results also improved because of additional output from the North Sea Magnus Field , a portion of which was acquired by Sun earlier this year . 
 Results declined , however , in Sun 's refining and marketing and coal businesses . 
 Profits of Shell , a subsidiary of the Royal Group , tumbled $ 24 million , or 6.6 % , to $ 340 million , despite a gain of $ 30 million from an insurance settlement . 
 President Frank Richardson attributed the decline to lower natural gas prices , which countered higher earnings from the crude oil sector of Shell 's exploration and production operation . 
 away some of the gain in that unit was a decline in U.S. oil production to 502,000 barrels of oil a day during the quarter from 527,000 barrels a day last year . 
 Shell 's chemical earnings fell by $ 67 million , to $ 137 million , reflecting lower margins and less demand for commodity chemicals . 
 Net income at Mobil Corp. slipped 4.5 % to $ 532 million , or $ 1.30 a share , from $ 557 million , or $ 1.36 a share . 
 Revenue declined $ 518 million , to $ 13.63 billion . 
 Earnings included a one-time gain of $ 192 million on a property transaction in Hong Kong . 
 Exploration and production profits slumped $ 40 million due to a provision for restructuring costs . 
 The restructuring will take place over a two-year period and will involve the transfer and layoff of employees in U.S. operations to reduce costs and focus efforts in other areas . 
 Last year , third-quarter earnings included a $ 157 million gain from foreign tax rate changes and a loss from a $ 65 million write-off of reserves . 
 Chevron 's net income fell 0.7 % , to $ 417 million , or $ 1.22 a share , from $ 420 million , or $ 1.23 a share . 
 Results included a $ 37 million gain from the sale of rights from Chevron 's investment in Amax Inc. , and a loss of $ 30 million from the sale of California oil and gas properties . 
 Revenue rose 11 % , to $ 8 billion from $ 7.2 billion . 
 Chevron said higher crude oil prices boosted profits from production operations , but margins in refining and marketing declined . 
 Profits from U.S. exploration and production operations totaled $ 58 million , after the property sale loss , compared with a year-earlier $ 44 million loss that included a $ 16 million reorganization charge . 
 Refining and marketing operations earned $ 130 million in the quarter this year , compared with earnings of $ 186 million a year earlier that included $ 18 million in charges for environmental programs . 
 Foreign earnings fell to $ 180 million from $ 182 million that included a $ 48 million gain from lower Canadian and Australian taxes . 
 Chemical profits fell to $ 78 million from $ 98 million . 
 Jeff Rowe contributed to this article . 
 Asarco Inc. , continuing its effort to refocus its business , ended its involvement in asbestos mining in the third quarter and said it would stop mining and selling coal by year end . 
 The mining , metal and specialty-chemical concern said combined revenue for asbestos and coal was about $ 40 million of the company 's total revenue in 1988 of $ 1.98 billion . 
 Richard de J. Osborne , chairman , president and chief executive officer , said the company 's `` decisions to get out of asbestos and high-sulfur coal continue the process of simplifying and focusing the company in areas with a better future . '' 
 Asarco also reported third-quarter net income rose 14 % , to $ 52.7 million , or $ 1.25 a share , from a restated $ 46.2 million , or $ 1.10 a share , a year earlier . 
 Asarco said the gain reflected continued strength in prices for refined copper , lead and zinc , and higher equity earnings in Mexico Desarrollo Industrial Minero S.A. , a Mexican mining company in which Asarco has a 34 % stake . 
 The 1988 results were restated for accounting-rules changes . 
 Sales rose 4.5 % to $ 522.3 million from $ 499.4 million . 
 In August , Asarco , through its Lac d'Amiante du Quebec subsidiary , sold its remaining one-third interest in an asbestos mining limited partnership in Canada for $ 11.7 million . 
 Asarco said it plans to shut down or sell its Rapatee coal mine and will end its involvement in southern Illinois strip mining . 
 The company said that it is discussing a management-employee buy-out of the facility , but that it would stop mining and selling coal at year end when existing sales contracts expire , regardless of the outcome of those talks . 
 In New York Stock Exchange composite trading , Asarco fell $ 1.375 to close at $ 31.75 . 
 Companies listed below reported quarterly profit substantially different from the average of analysts ' estimates . 
 The companies are followed by at least three analysts , and had a minimum five-cent change in actual earnings per share . 
 Estimated and actual results involving losses are omitted . 
 The percent difference compares actual profit with the 30-day estimate where at least three analysts have issues forecasts in the past 30 days . 
 Otherwise , actual profit is compared with the 300-day estimate . 
 David W. Lodge was elected vice president and chief financial officer , effective Nov. 1 . 
 Mr. Lodge , 48 years old , a former finance executive at Singer Sewing Machine Co. and Celanese Corp. , succeeds Francis L. Brophy , 64 , who plans to retire from the company next year . 
 Carlos A. Salvagni , vice president , pharmaceutical manufacturing , will assume responsibility for manufacturing in Kalamazoo , Mich. , effective Nov. 1 . 
 Mr. Salvagni , 53 years old , succeeds John C. Griffin , 57 , who is retiring as corporate vice president of pharmaceutical manufacturing . 
 Upjohn is a world-wide provider of health-care products and services , seeds and speciality chemicals . 
 This Brooklyn , N.Y. , generic-drug maker announced a 5 % stock dividend payable Dec. 15 , to holders of record Nov. 15 . 
 As of Sept. 30 , Halsey had 5.3 million common shares outstanding . 
 Jay Marcus , president , said the move `` reflects the confidence of our board and management in Halsey 's long-term prospects and our desire to provide our shareholders with an attractive return on their investment . '' 
 In American Stock Exchange composite trading , Halsey closed at $ 5.8125 a share , up 6.25 cents . 
 Walter M. Brady was named a senior vice president of this insurer in the Canadian head office . 
 He had been vice president in that office . 
 John B. Foy was named senior vice president and remains responsible for the individual policy services department . 
 Frank J. Ollari was named senior vice president in charge of the mortgage finance department . 
 He had been vice president of the department , which was formerly called the real estate department . 
 Timothy C. Brown , a vice president , was named executive vice president and a director of this lighting and specialty products concern . 
 In the director post , Mr. Brown , 38 years old , succeeds Joseph W. Hibben , who retired from the board in August . 
 C. Barr Schuler , 49 , vice president and chief financial officer , was named senior vice president of corporate development and acquisitions , a new post . 
 Phillip J. Stuecker , 37 , vice president , secretary and treasurer , was named vice president of finance and chief financial officer . 
 He remains secretary . 
 Ronald B. Koenig , 55 years old , was named a senior managing director of the Gruntal & Co. brokerage subsidiary of this insurance and financial-services firm . 
 Mr. Koenig will build the corporate-finance and investment-banking business of Gruntal , which has primarily been a retail-based firm . 
 He was chairman and co-chief executive officer of Ladenburg , Thalmann & Co. until July , when he was named co-chairman of the investment-banking firm along with Howard L. Blum Jr. , who then became the sole chief executive . 
 Yesterday , Mr. Blum , 41 , said he was n't aware of plans at Ladenburg to name a co-chairman to succeed Mr. Koenig and said the board would need to approve any appointments or title changes . 
 Mr. Blum added he was n't surprised Mr. Koenig resigned , but his departure was `` nothing that we desired or worked for . '' 
 Mr. Koenig said : `` I just got a tremendous offer from Gruntal . 
 MCI Communications Corp. said it received a $ 12 million contract to provide virtual network services to Woolworth Corp. 's 5,600 corporate and retail sites in the 
 The contract also provides for advanced billing and network management services . 
 Woolworth said it expects to expand usage of the MCI services as it adds about 6,000 business locations over the next few years . 
 The Philippine merchandise trade deficit widened to $ 1.71 billion during the first eight months of 1989 from $ 807 million a year earlier . 
 Imports continued to outpace Philippine exports , despite gains in shipments abroad , the government National Statistics Office said . 
 Exports reached $ 5.12 billion , up from $ 4.52 billion a year earlier , while imports rose to $ 6.81 billion from $ 5.33 billion . 
 The trade deficit in the first eight months is already wider than the trade gap of $ 1.09 billion for all of 1988 . 
 Analysts expect the trade gap for the year to surpass $ 2 billion as demand for capital equipment and raw materials continues to push imports higher . 
 Birtcher Corp. said it signed a definitive agreement with C.R. Bard Inc. , a Murray Hill , N.J. , maker of health-care products , for the purchase of the company 's Electrosurgery division for about $ 11 million . 
 Birtcher , a maker of electronic medical equipment , said the transaction is expected to close on or before Nov. 30 . 
 Bard EMS had 1988 sales of about $ 14 million , Birtcher said . 
 WINSTON-SALEM , N.C. -- First Wachovia Corp. said John F. McNair III will retire as president and chief executive officer of this regional banking company 's Wachovia Corp. and Wachovia Bank & Trust Co. subsidiaries on Dec. 31 . 
 Mr. McNair , 62 years old , will be succeeded by L.M. `` Bud '' Baker Jr. , 47 , the parent 's chief credit officer and head of its administration division . 
 Mr. Baker will relinquish his previous positions , but a successor for him has n't been named yet . 
 In addition , on Jan. 1 , Thomas A. Bennett , 52 , will become vice chairman and chief operating officer of Wachovia and Wachovia Bank & Trust , filling a vacancy left by the retired Hans W. Wanders in April . 
 Mr. Bennett will continue as executive in charge of the North Carolina banking operation . 
 Messrs. Baker and Bennett have been elected directors of Wachovia and Wachovia Bank & Trust filling vacant seats on both boards . 
 Canadian retail sales rose 0.2 % in August from July , Statistics Canada , a federal agency , said . 
 The August increase followed a 0.3 % decline in July . 
 During the past four months , retail sales have remained generally weak , advancing an average 0.2 % a month , the agency said . 
 Raw-steel production by the nation 's mills decreased 0.7 % last week to 1,816,000 tons from 1,828,000 tons the previous week , the American Iron and Steel Institute said . 
 Last week 's output fell 1.7 % from the 1,848,000 tons produced a year earlier . 
 The industry used 81.6 % of its capability last week , compared with 82.2 % the previous week and 86.2 % a year ago . 
 The American Iron and Steel Institute reported : 
 The capability utilization rate is a calculation designed to indicate at what percent of its production capability the industry is operating in a given week . 
 With reduced exports and rising imports , South Korea 's trade surpluses with the U.S. and Europe between January and September fell sharply from a year ago , the Customs Administration said . 
 Officials said South Korea 's trade surplus with the U.S. for the first nine months of the year totaled $ 3.49 billion , down 43 % from the same period last year on a customs-clearance basis . 
 South Korean exports to the U.S. during the period fell 1.6 % from a year ago to $ 15.06 billion , while imports from the U.S. soared 26 % to $ 11.56 billion . 
 The trade surplus with Europe was pegged at $ 414 million , down 57 % from a year ago . 
 Officials said South Korean exports to Europe dropped 5.3 % to $ 3.02 billion while imports from there went up 17 % to $ 2.61 billion . 
 Bausch & Lomb Inc. said its pharmaceuticals subsidiary agreed to supply collagen corneal shields for animal eye surgery to a unit of International Minerals & Chemical Corp . 
 Terms were n't disclosed . 
 The agreement marks Bausch & Lomb 's first venture selling its eye care products for use by veterinarians . 
 The collagen corneal shield helps speed healing of the cornea after eye surgery . 
 The product will be distributed by Pitman-Moore Inc. , a subsidiary of International Minerals . 
 France 's industrial production index for July and August rose 1 % from June and was up 4.6 % from a year ago , according to seasonally adjusted data from the National Statistics Institute . 
 The state agency , which usually publishes the data on monthly basis , but traditionally combines the index for the two summer-holiday months , said the advance was led by output of consumer goods , which rose 3.5 % from June and was up 7.2 % from a year earlier . 
 Semifinished goods turned in a strong showing , with a monthly rise of 2 % and a year-on-year advance of 3 % . 
 Food production was ahead 1.7 % from June and 5.3 % from a year earlier . 
 Output in the capital-goods sector was ahead 0.9 % on a monthly basis and 2.7 % year on year . 
 These gains were partly offset by output of cars and other consumer durables , which eased 3.9 % from June 's high level . 
 The sector was still 8.8 % above its output levels from a year earlier , however . 
 International Minerals & Chemical Corp. said it agreed definitively to sell its international fragrance business to Bayer AG of West Germany . 
 Terms were n't disclosed . 
 The maker of animal health and nutrition products said the business , Creations Aromatiques of Port Valais , Switzerland , and Woodside , N.Y. , is a division of its Mallinckrodt Inc. subsidiary and had sales of about $ 30 million for its most recent year . 
 International Minerals said the sale will allow Mallinckrodt to focus its resources on its core businesses of medical products , specialty chemicals and flavors . 
 Consumers Power Co. filed with the Michigan Public Service Commission a contract to buy power from the Palisades nuclear plant under a proposed new ownership arrangement for the plant . 
 Consumers Power and Bechtel Power Corp. last year announced a joint venture to buy the plant , currently owned completely by the utility . 
 Two Japanese scientists said they discovered an antibody that , in laboratory test-tube experiments , kills AIDS-infected cells while preserving healthy cells . 
 If further experiments are successful , the work would represent a major advance in research on acquired immune deficiency syndrome . 
 The drug AZT , the only treatment currently on the market , claims only to help stop the spread of AIDS , not to cure it . 
 But several analysts and Japanese scientists familiar with the study , which was announced at a conference in Nagoya yesterday , expressed skepticism over the significance of the results . 
 And the researchers themselves acknowledged they still must do much more work before they can say whether the treatment would actually cure humans . 
 Shin Yonehara , a research scientist at the Tokyo Metropolitan Institute of Medical Science , said the antibody he discovered works by recognizing an antigen called a Fas-antigen , which is characteristic of an infected cell . 
 The antibody then kills the cell . 
 Dr. Yonehara and his partner , Nobuyuki Kobayashi of Yamaguchi University , said their experiments showed that the antibody wiped out an average of 60 % of AIDS-infected cells within three days . 
 In some of the experiments , it killed almost all the infected cells , the researchers said . 
 Meanwhile , fewer than 10 % of the healthy cells were killed . 
 The two said they must still do more laboratory tests , then experiment on animals . 
 They said they hoped to conduct tests on human patients in the U.S. by late next year . 
 Japan does n't have enough AIDS patients to do significant experimentation in that country , they said . 
 The announcement got wide exposure in the Japanese media , and even moved some pharmaceutical stocks yesterday . 
 But Takashi Kitamura , director of the biology department at Japan 's National Institute of Health and secretary of the government 's AIDS-research center , said , `` I 'm not so optimistic of its future use in therapeutic methods . '' 
 He said some infected cells may not have the relevant antigen and so would n't be killed even after exposure to the antibody . 
 `` The results seem to be very premature , '' said Mitsuru Miyata , editor of Nikkei Biotechnology , a leading Japanese industry newsletter . 
 Dr. Kobayashi responded that he thought the antibody could potentially kill all infected cells . 
 But he and Dr. Yonehara said there were still several uncertainties , particularly regarding possible side effects . 
 `` Our antibody specifically killed infected cells at a very low dose , but it can also kill other cells , '' said Dr. Yonehara . 
 `` We do n't know the effect of our antibody on the human body . '' 
 AIDS is n't considered a widespread problem in Japan -- the government reports about 1,000 known carriers of the virus -- but many companies have poured substantial resources into research in recent years , hoping to cash in on a possible cure . 
 Dr. Kitamura said about 35 projects are currently under way in Japan , and that Japanese researchers in the past year have made available three possible cures to American researchers for clinical tests . 
 He said that when scientists from the two countries meet again in January in New Orleans , the Japanese will present at least three more drugs for human testing . 
 AZT is the world 's only prescription medicine approved for treating the disease . 
 Wellcome PLC , a major British pharmaceutical maker , sells the drug under the name Retrovir . 
 A Wellcome spokesman declined to comment on the discovery of the antibody in Japan . 
 But Andrew Porter , a drug-industry analyst at Nikko Securities Co. in London , said if the product were to be successfully developed it would represent `` a potential threat to the long-term viability of Retrovir . 
 The following issues were recently filed with the Securities and Exchange Commission : 
 American Exploration Co. , offering of five million common shares , via Smith Barney , Harris Upham & Co. and Shearson Lehman Hutton Inc . 
 Chemical Waste Management Inc. , proposed global offering of 8,500,000 shares of common stock , of which seven million of the shares will be offered in the U.S. and 1,500,000 shares will be offered overseas , via Merrill Lynch Capital Markets -LRB- domestic -RRB- and Kidder , Peabody & Co . -LRB- international -RRB- . 
 Interlake Corp. , proposed offering of $ 200 million of senior subordinated debentures , via Goldman , Sachs & Co . 
 InterMedia Capital Corp. , Robin Cable Systems L.P. and Brenmor Cable Partners , offering of senior subordinated discount reset debentures , via Drexel Burnham Lambert Inc . 
 John Nuveen & Co. , initial offerings of the Nuveen California Performance Plus Municipal Fund Inc. and the Nuveen New York Performance Plus Municipal Fund Inc. , via Alex . Brown & Sons Inc . 
 KnowledgeWare Inc. , initial offering of three million shares of its common stock , of which 1,657,736 shares will be sold by the company and 1,342,264 will be sold by holders , via Montgomery Securities and Donaldson , Lufkin & Jenrette Securities Corp . 
 MGM Grand Inc. , proposed offering of six million shares of common stock , via Merrill Lynch . 
 Microlog Corp. , formerly called Old Dominion Systems Inc. , offering of 1.2 million common shares , of which one million will be sold by the company , and the balance by holders , via Hambrecht & Quist and Johnston , Lemon & Co . 
 Scott Paper Co. , shelf offering of up to $ 360 million of debt securities , via Goldman Sachs , Salomon Brothers Inc. and Smith Barney , Harris Upham . 
 Sullivan Graphics Inc. , offering of $ 110 million of senior subordinated notes , via Merrill Lynch . 
 Sun Sportswear Inc. , initial offering of 1.7 million common shares , of which one million shares will be sold by the company , and the balance by a holder , via Salomon Brothers Inc. and Piper , Jaffray & Hopwood Inc . 
 Yes Clothing Co. , proposed initial offering of 776,470 common shares , of which 600,000 shares will be offered by the company and 176,470 by holders , via Seidler Amdec Securities Inc . 
 A # 320 million -LRB- $ 508 million -RRB- British Airways PLC rights issue flopped badly -- the victim of recent market turbulence and the collapse of the buy-out bid for United Airlines ' parent , UAL Corp . 
 The United Kingdom carrier had planned the issue to help finance its $ 750 million purchase of a 15 % stake in UAL . 
 But British Airways withdrew from the UAL labor-management buy-out plan last Friday , after the group failed to get bank financing for its $ 6.79 billion buy-out . 
 British Airways said its shareholders accepted only 6.3 % of the convertible capital bonds , but that the rest of the issue will be taken up by underwriters . 
 Analysts said that 6.3 % level marked the poorest showing for any major British rights issue since the 1987 global stock market crash . 
 `` It is close to being a record undersubscription , '' said Bob Bucknell , an analyst with London broker Smith New Court Securities . 
 `` Fund managers do n't like to have rights issues that do n't have an obvious reason . 
 The obvious reason was -LRB- for British Air -RRB- to buy a stake in United Airlines . '' 
 In a statement , British Air Chairman Lord King said the company was `` obviously disappointed that the issue was not taken up , but it would have been unreasonable to expect a better result given the volatility of the stock market since the launch of the issue . '' 
 But except for the embarrassment , British Air will emerge relatively unscathed from the flopped issue . 
 Underwriters led by Lazard Brothers & Co. will pick up the rest of the airline 's offer of four convertible capital bonds for every nine common shares . 
 Lazard and other primary underwriters have reduced or eliminated their exposure by sub-underwriting the issue among U.K. institutional investors . 
 `` The -LRB- paper -RRB- loss here is very small '' for these sub-underwriters , observed John Nelson , a Lazard managing director . 
 In any case , he added , `` most institutions probably wo n't sell '' the bonds . 
 And instead of buying the UAL stake , the U.K. carrier will be able to reduce its high debt level and build an acquisition war chest . 
 `` From a cash flow point of view , British Airways is better off not being in United Airlines in the short term , '' said Andy Chambers , an analyst at Nomura Research Institute in London . 
 Added another U.K. analyst : `` It gives them some cash in the back pocket for when they want to do something . '' 
 For instance , British Air is continuing to negotiate with KLM Royal Dutch Airlines about each acquiring a 20 % stake in Sabena World Airlines , the air transport subsidiary of the Belgian national airline . 
 A definitive agreement had been expected by the end of July . 
 The failed rights issue also should have a modest impact on British Air shares . 
 The airline 's share price already is far below the 210 pence -LRB- $ 3.33 -RRB- level seen after the company announced the rights issue in late September . 
 In late trading on London 's Stock Exchange yesterday , the shares were off three pence at 194 pence . 
 And because British Air is issuing convertible bonds rather than ordinary shares , the share price wo n't be directly hurt by any surplus left with underwriters after they try to sell the issue in the open market . 
 But British Air 's withdrawal from the UAL buy-out could have further repercussions . 
 Some analysts speculated yesterday that the move has set off a board room split , which may lead to the resignation of Sir Colin Marshall , the carrier 's chief executive officer . 
 `` The stories are rubbish , '' a British Air spokesman said . 
 `` There is no difference of opinion between -LRB- Chairman -RRB- Lord King and Sir Colin on any aspect of company policy . 
 MINORITY RECRUITING has yet to meet hopes raised by Bush administration . 
 Six months ago , as some personnel specialists saw it , a perception that President Bush really cared about fair employment -- after what they said was eight years of Reagan-era neglect -- was prodding top management to raise hiring goals for females , blacks and other minorities . 
 The perception lingers , says an official at a major industrial company . 
 But so far , he declares , there 's little evidence the `` new urgency '' is trickling down to the managers who actually do hiring . 
 `` Is there really a commitment or an illusion of activity ? '' he asks . 
 The recruiting `` has n't materialized , '' asserts Jeffrey Christian , who runs a search agency . 
 Samuel Hall , Howard University 's placement director , also does n't see it . 
 And he questions the White House dedication . 
 `` I do n't think the Bush administration has done anything , '' he says . 
 Recruiter Donald Clark does note an increase in searches for minority candidates . 
 But some of the activity , he says , may reflect a rush to get `` numbers in order '' for end-of-year reports . 
 PAY FOR PERFORMANCE hangs mostly on boss 's subjective view . 
 Du Pont Co. in a couple of units has installed objective tests based on earnings or return on equity . 
 Many companies have set up machinery to assure workers a fair shake . 
 At most firms , though , it 's the immediate supervisor who decides the merit increases subordinates will be paid . 
 Managers have `` some very broad discretion , '' says an official at Walt Disney Co . 
 Unocal Corp. 's top management sets guidelines , but line supervisors slice up the merit pie . 
 Lotus Development Corp. feeds its evaluations into a computer , but only for storage ; the decisions are made by supervisors . 
 Hershey Foods Corp. strives for fairness by basing increases on quarterly reviews , annual appraisals and meetings with workers . 
 At Chemfix Technology Inc. , each supervisor 's recommendation must be approved by the next boss up the line , and then sanctioned by a salary review committee . 
 JAPANESE COMPANIES fare best in U.S. when they give Americans more say . 
 University of Michigan researchers find the companies earn more and win a bigger market share when their American employees get a voice in planning , product development and design , including decision-making back in Japan . 
 `` You ca n't hire competent Americans and say , ` Let them run only their own show , ' '' says Vladimir Pucik , who headed the study run with Egon Zehnder International , a search firm . 
 The researchers say many Japanese companies err in the U.S. by adopting the American practice of hiring managers on the `` open market . '' 
 In Japan , by contrast , companies tend to develop their own talent and promote from within . 
 The Japanese also are accused of keeping their cards too close to their vests . 
 `` Some Japanese executives are not yet... comfortable about sharing strategic information with their American colleagues , '' the researchers say . 
 Americans stay longer with Japanese firms than American companies . 
 But they think promotions are limited . 
 THE HOUSE votes down a proposal to put pension plans under the control of joint labor-management boards . 
 Some consultants had insisted it would n't work . 
 LONG-TERM care insurance gains favor . 
 More than half the people surveyed for the Employee Benefit Research Institute say they would be willing and able to pick up most of the cost of the coverage . 
 FRINGE-BENEFIT spending by small and medium-sized employers has dropped to 25 % of payroll from 29 % three years ago , says the National Institute of Business Management , an advisory service . 
 OUSTED EXECUTIVES over 50 years old take slightly less time than their younger colleagues to find a job -- 3.23 months vs. 3.26 for the juniors -- outplacement firm Challenger , Gray & Christmas finds . 
 It 's the first time in the survey 's 15 years that the over-50 group came out ahead . 
 FEAR OF AIDS hinders hiring at few hospitals . 
 Dedication runs high . 
 Wafaa El-Sadr , who heads the AIDS program at New York City 's Harlem Hospital Center , ca n't find help . 
 `` I 've been recruiting every single day since it 's been identified that many AIDS patients come from the inner city , '' she says . 
 She was the only staff physician available to treat AIDS patients last summer and now she has the help of only two doctors part time . 
 Part of the problem , though , may reflect a general unwillingness to work with the urban poor . 
 Parkland Memorial Hospital in Dallas says it has n't had any problem recruiting , even after a nurse contracted the virus while injecting an AIDS patient . 
 `` I can tell you that nobody quit over it . 
 No one panicked , '' a spokeswoman says . 
 St. Paul Medical Center , also in Dallas , sees only a `` minimal erosion '' of support staff due to AIDS . 
 Yale-New Haven Hospital sees no problem , says John Fenn , the chief of staff . 
 `` There are enough enlightened and spirited individuals who know their responsibilities , '' he says . 
 THE CHECKOFF : At least somebody gains on layoffs . 
 The Association of Outplacement Consulting Firms says the industry 's volume has soared tenfold since 1980 , to $ 350 million a year . 
 And somebody loses on the expected repeal of Section 89 , the benefits test fought by most employers . 
 Triad Solutions says software producers had each invested hundreds of thousands of dollars in programs that now have no use . 
 Big gains for the ultra-right Republicans party in Baden-Wuerttemburg state municipal elections Sunday showed eroding support for Chancellor Helmut Kohl in a traditional bastion for his Christian Democratic Union . 
 With ballots from most of the state 's major cities in by yesterday morning , the Republicans came away with 10 % of the vote in several of the key districts . 
 With many rural districts yet to report ballots , election officials estimate support for Christian Democrats fell an average five percentage points statewide . 
 The left-of-center Social Democrats and the environmental Greens party posted mixed results . 
 Headed by a former Waffen SS sergeant and working from a nationalistic platform of anti-foreigner rhetoric , the fledgling Republicans party has scored surprising gains in earlier elections in the states of West Berlin , Hesse and North-Rhine Westphalia . 
 With West German unemployment remaining high at two million jobless and the lack of affordable housing becoming a primary issue for next year 's campaign , the Republicans are seen drawing support for their `` Germans First '' stand on social-welfare issues . 
 Election analysts acknowledge that a `` Red-Green '' coalition of Social Democrats and Greens could edge out Chancellor Kohl 's coalition in the December 1990 national election if support for the Republicans continues to spread . 
 International investigators urged Britain to allow prosecution of suspected Nazi war criminals who took refuge there after 1945 . 
 Under current law , such suspects are immune from prosecution for acts committed while not British citizens . 
 `` If we 're not careful we could become known as a haven for war criminals , '' said Jeff Rooker , a member of Parliament and one of several British politicians attending a London conference with government investigators from the U.S. , Canada and Australia . 
 A parliamentary inquiry found in July that more than 70 people living in Britain could have been part of death squads that roamed Nazi-occupied Eastern Europe . 
 Parliament is expected to discuss next month whether to change the law . 
 British investigations were prompted by a list of 17 alleged war criminals living in Britain sent to Prime Minister Margaret Thatcher in October 1986 by the Simon Wiesenthal Center in Los Angeles . 
 In a sign of easing tension between Beijing and Hong Kong , China said it will again take back illegal immigrants caught crossing into the British colony . 
 China had refused to repatriate citizens who sneaked into Hong Kong illegally since early this month , when the colony allowed a dissident Chinese swimmer to flee to the U.S . 
 About 1,100 Chinese were awaiting repatriation yesterday . 
 Italy 's Foreign Ministry said it is investigating exports to the Soviet Union by an Ing . C. Olivetti & Co. subsidiary called OCN-PPL that makes numerically controlled machine tools . 
 Although Italy 's investigation of whether Olivetti had violated Western export-control rules had previously been made known , this marked the first time the unit and product were named . 
 The U.S. is worried about the convertibility of Olivetti 's machine tools to military use . 
 However , an Olivetti spokeswoman said OCN-PPL , of which Olivetti sold the majority interest last year , `` does n't make equipment that has the type of precision necessary for sophisticated productions . '' 
 Conservationists say that drift-net fishing threatens to wipe out much of the world 's tuna stocks in a few years . 
 But the Japanese Fisheries Association criticized moves to ban the practice in international waters . 
 `` It is really unfortunate for human beings to be swayed by emotional discussions , '' the association said . 
 In driftnet , or `` wall of death , '' fishing , fleets lay nets up to three miles long that trap almost everything in their path . 
 Earlier this year , Japan said it would cut the number of its drift-net vessels in the South Pacific by two-thirds , or down to 20 . 
 Workers at Peugeot S.A. 's car plant at Sochaux , in eastern France , voted to end a six-week-old strike that has cost the Peugeot group production of 60,000 automobiles , a company spokesman said . 
 The strikers voted to accept a series of management proposals that will give them a higher basic wage , better profit-sharing benefits and bigger annual bonuses . 
 The spokesman said the vote at Sochaux is expected to be followed by a similar move at the company 's assembly plant at Mulhouse , where the number of strikers has been whittled down to 80 . 
 About 8,000 National Union of Mineworkers members resumed their strike against De Beers Consolidated Mines Ltd. after further negotiations to settle a wage dispute broke down . 
 Striking workers , who began striking five diamond mines on Oct. 13 , had returned to work last week when the union and De Beers arranged to reopen negotiations . 
 A De Beers spokesman said yesterday the company had offered to increase the minimum wage by 18 % , while the union was demanding 26.6 % . 
 Before the two parties resumed talks last week , De Beers offered 17 % and the union wanted 37.6 % . 
 China 's People 's Daily took note of the growing problem of computer fraud . 
 Since the first fraud was discovered in July 1986 at an office of the People 's Bank of China in Shenzhen , 15 major cases have been found , the paper said ; the biggest was the theft of $ 235,000 from a bank in Chengdu in March 1988 . 
 The number of computers has mushroomed in recent years , with 10,000 in use , as well as 30,000 miniature models . 
 But security systems , effective management controls and regulations to govern their use have not kept pace , the People 's Daily said . 
 Besides money , criminals have also used computers to steal secrets and intelligence , the newspaper said , but it gave no more details . 
 Japanese tourists will be told to take care when photographing earthquake damage in San Francisco , the Japan Association of Travel Agents said . 
 The association issued an advisory to its 1,685 member agencies following a report from the Foreign Ministry that picture-taking by Japanese tourists in earthquake-stricken areas was causing ill feeling among local residents . 
 Tass said Lenin 's tomb in Red Square will be closed from Nov. 10 to Jan. 15 for essential maintenance . 
 The red granite mausoleum draws thousands of visitors daily . 
 Fatalities on rural interstates rose 33 % between 1986 and last year , the National Highway Traffic Safety Administration said in a report on the impact of the 65 miles-per-hour speed limit on those roads . 
 The report to Congress said that fatalities rose 18 % in 1987 and 13 % in 1988 on rural interstates . 
 The 1987 highway bill permitted states to raise the speed limit to 65 mph from 55 mph on interstate roads , which are defined as highways that pass through areas with fewer than 50,000 people . 
 Since 1987 , 40 states have increased the speed limit on rural interstates . 
 `` About one-third of the fatality increase is attributed to greater travel , and about two-thirds is attributed to other factors -LCB- primarily to greater speed -RCB- , '' according to NHTSA . 
 The report showed that deaths on urban interstate highways rose 7 % between 1986 and last year , while fatalities on non-interstate roads were about the same in 1988 as in 1986 . 
 In states that raised the speed limit on rural interstates , the fatality rate rose about 18 % to 1.7 deaths per 100 million miles traveled between 1986 and 1988 . 
 In contrast , the fatality rate in the states that retained the 55 mph limit was 0.9 last year , the same as in 1986 . 
 Well-Seasoned Reasoning -LRB- `` Food manufacturer changes spelling of ` catsup ' to ` ketchup , ' saying that 's the spelling people now prefer ''. -- WSJ Business Bulletin -RRB- 
 Public preference is important , So product names should match up , And firms that find they 're lagging behind Should now take steps to ketchup -- George O. Ludcke 
 Judge Not How easy it is To attack others ' views Without ever setting A foot in their shoes -- G. Sterling Leiby 
 Daffynition Money-making course : wad-working . -- Thomas Henry . 
 In an Oct. 10 editorial-page article , `` It 's the World Bank 's Turn to Adjust , '' Paul Craig Roberts lays most of the blame for what ails developing countries at the doorstep of the World Bank . 
 The article is , unfortunately , replete with outrageous distortions . 
 One of Mr. Roberts 's observations is that the Bank 's own loan portfolio is in deep trouble because of its lending to developing countries . 
 This is just not so . 
 The reality is that Bank finances are rock solid . 
 As of June 30 , 1989 -- the day our past fiscal year came to a close -- only 4.1 % of the Bank 's portfolio was affected by arrears of over six months . 
 This is an enviably low level . 
 Moreover , the Bank follows a prudent provisioning policy and has set aside $ 800 million against possible loan losses . 
 For the same fiscal year , by the way , the Bank 's net income was a robust $ 1.1 billion after provisions . 
 Because of the business-like manner in which the Bank goes about development , financial markets have confidence in it . 
 This helps explain the triple-A rating enjoyed by our bonds and our ability to borrow $ 9.3 billion in fiscal 1989 on the most advantageous terms . 
 Another of Mr. Roberts 's criticisms is that Bank lending has done more harm than good `` by implanting the wrong incentives and deflecting energy away from economic development . '' 
 Here , too , Mr. Roberts is way off the mark . 
 The reality is that Bank loans have been linked to policy improvements for 40 years . 
 Our traditional project loans have , for instance , supported sensible energy pricing in the power sector , sound interest-rate policies in the credit area and the operation of public utilities as efficient , autonomous agencies . 
 By and large , these efforts have borne fruit . 
 In my home region , Latin America , much of the existing infrastructure base -- an important building block for development -- has been financed by the World Bank . 
 Mr. Roberts also takes a swipe at the Bank 's adjustment lending . 
 What are the facts on this type of lending ? 
 The Bank has been making adjustment loans for 10 years . 
 As their name implies , these operations are linked to far-reaching policy reforms that aim at helping borrowing countries get back on the growth path and at enhancing their credit-worthiness . 
 Typically , these measures include reforms to downsize the role of government and parastatals in the economy , to open up inward-looking economies to international competition and to promote the development of a vigorous private sector . 
 Support for the private sector has been a longstanding concern of the Bank 's . 
 Over the years , it has helped encourage investments by entrepreneurs in the Third World through its extensive credit operations and through loans and investments by the International Finance Corp . 
 Most recently , the Bank Group has been expanded to include the Multilateral Investment Guarantee Agency to stimulate direct foreign investment in developing countries by offering guarantees against noncommercial risk and advice to member countries on how to improve their business climate . 
 These are not the actions of a development agency wed to central planning and to the concentration of investment decisions in the hands of government , as Mr. Roberts alleges . 
 Rather , they reflect the Bank 's time-tested , pragmatic approach , which aims at ensuring that developing countries put their scarce resources to the best possible use . 
 Francisco Aguirre-Sacasa Director , External Affairs The World Bank 
 The government said it would streamline its enormous and often-criticized food marketing and distribution network , Compania Nacional de Subsistencias Populares , or Conasupo . 
 Conasupo Director Ignacio Ovalle Fernandez said the agency will sell 589 midsized supermarkets and several food-production plants and warehouses beginning early next year . 
 The agency will withdraw from the production of nine food products , maintaining production of the two most important ones , corn and milk . 
 Mr. Ovalle also said Conasupo will cut back subsidies to producers of nonessential farm products and close retail outlets in wealthy neighborhoods . 
 The agency 's workers and private companies would be allowed to bid for the assets up for sale . 
 Conasupo controls prices on agricultural goods and operates retail outlets where basic consumer items are sold at state-subsidized prices . 
 Business leaders have long criticized the agency as a leading example of bureacratic waste . 
 Private-sector leaders praised the Conasupo restructuring . 
 But most economists doubt the streamlining would cut deeply into Conasupo government subsidy , which largely goes to reduce consumer prices for corn and milk . 
 The Food and Drug Administration banned all imports of mushrooms from China in response to a rash of food-poisoning outbreaks linked to canned Chinese mushrooms . 
 `` The agency has concluded that contamination may be widespread throughout the mushroom-processing industry in China , '' an FDA spokesman said yesterday . 
 The agency wo n't allow mushrooms that were canned or packed in brine at any Chinese plant to enter the U.S. until `` satisfactory sanitation-control measures are implemented in China to prevent '' bacterial contamination . 
 On May 19 , the FDA began detaining Chinese mushrooms in 68-ounce cans after more than 100 people in Mississippi , New York and Pennsylvania became ill from eating tainted mushrooms . 
 In subsequent tests , the agency found smaller-size cans from several Chinese plants to be similarly contaminated . 
 The outbreaks were traced to staphylococcus aureus , a type of bacteria that produces a toxin capable of surviving the high temperatures used in canning vegetables . 
 A recall of the mushrooms blamed for the food poisoning began in early March . 
 In 1987 , China exported 65 million pounds of mushrooms , valued at $ 47 million , to the U.S . 
 The shipments went mostly to food-service distributors that supply pizzerias and restaurants . 
 A spokesman for the Chinese Embassy here said that the Beijing government has taken `` many effective measures '' to stop the mushroom contamination and is further investigating the underlying causes . 
 He predicted the problem will be solved `` very soon . 
 Your Sept. 26 `` Politics & Policy '' article about William Bennett 's Emergency Drug Plan for Washington gives the impression that the FBI has not been nor is actively involved . 
 This is not the case . 
 The FBI is very supportive of and an active participant in Mr. Bennett 's initiative . 
 It was agreed at the outset of the Washington Drug Initiative that the FBI 's role would be to continue targeting the major drug traffickers through our National Drug Strategy . 
 Through these investigations we do not focus on the street drug user , but rather we target and attack major drug-trafficking organizations that control a large segment of the drug market . 
 The trial of Raful Edmond III in Washington serves to highlight our efforts in this area and the results achieved through our excellent working relationship with the Drug Enforcement Administration and the Metropolitan Police Department -LRB- MPD -RRB- . 
 The FBI 's role is to complement the D.C. initiative through not only these major trafficking investigations , but also by providing a full range of services through various task forces and our contacts with local police squads handling drug-related crimes . 
 In fact , we have agents assigned full time to assist the MPD in drug-related crimes such as homicide and other crimes of violence . 
 Milt Ahlerich Assistant Director Office of Public Affairs Federal Bureau of Investigation 
 Ramada Inc. revised the terms of its restructuring and extended to Feb. 28 , 1990 , the deadline to complete the sale of its hotel business to New World Development Co. of Hong Kong and Prime Motor Inns Inc. of Fairfield , N.J . 
 Ramada 's previous plan was derailed by upheaval in the junk-bond market that hindered the offering of $ 400 million in high-yield securities of Aztar Corp. , the new company that will operate Ramada 's casinos in Nevada and Atlantic City , 
 Under the new terms , New World will still pay $ 540 million for Ramada 's hotel business , subject to adjustment at closing , but Ramada will now reimburse New World for $ 10 million in expenses . 
 Prime will still manage Ramada 's domestic franchise system when the sale closes . 
 Revised terms call for each Ramada common share to be exchanged for $ 1 in cash , subject to possible reduction , and one share of Aztar common stock . 
 Shareholders will also receive one cent per share for the redemption of preferred stock purchase rights . 
 The cash payout will be reduced by 40 % of any amount by which the weighted mean price of Ramada 's common stock exceeds $ 14 on the day the transaction closes . 
 The provision will help provide for tax liabilities that may stem from the restructuring . 
 Ramada 's stock rose 87.5 cents on the news to close at $ 11.25 in composite New York Stock Exchange trading . 
 The announcement dispelled some Wall Street observers ' fears that New World might demand a huge premium for the delay , or scrap the deal entirely . 
 The previous deadline to complete the sale was Nov. 30 . 
 One major advantage of the revised plan is that Aztar will have far less debt than under the old terms . 
 `` They 'll go from being one of the most leveraged to one of the least leveraged casino companies , '' said Daniel Lee , an analyst with Drexel Burnham Lambert Inc . 
 Mr. Lee values the package at between $ 15 and $ 20 a share , based on current trading prices of other casino-company stocks . 
 The much-revised restructuring , which was first announced in October 1988 , must again be approved by shareholders and state casino regulators in Nevada and New Jersey . 
 Financing plans include raising $ 170 million in debt secured by the company 's holdings in New Jersey . 
 In May , Ramada sold its Marie Callender Pie Shops Inc. unit to a group of private investors as part of its plan to focus on its casinos in Atlantic City and in Las Vegas and Laughlin , Nev . 
 Bond prices took the high road and stock prices took the low road as worries mounted about the economy and the junk bond market . 
 The Dow Jones Industrial Average fell 26.23 points to 2662.91 in sluggish trading . 
 But long-term Treasury bonds staged a modest rally , with prices on most issues rising about half a point , or $ 5 for each $ 1,000 face amount . 
 The dollar sagged against other major currencies in lethargic trading . 
 Traders and analysts said the divergence between the stock and bond markets is a sign of growing unease about the economic outlook . 
 A sinking economy depresses corporate earnings and thus stock prices , but it buoys bond prices as interest rates fall . 
 That unease is expected to grow today when the government reports on September durable goods orders and again Thursday when the first assessment of third-quarter economic growth is released . 
 Analysts say they think durable goods orders fell about 1 % , compared with a 3.9 % gain in August , and that growth in the third quarter slowed to about 2.3 % from the second quarter 's 2.5 % . 
 The stock market 's decline , coming after a record weekly gain of 119.88 points , surprised some investors . 
 But A.C. Moore , director of research at Argus Research , said last week 's rally was a reflex reaction to the Oct. 13 stock market rout . 
 Overall , he said , the trend in stock prices will be down as the economy weakens . 
 `` We think we 're on target in looking for renewed economic deterioration , '' he said . 
 `` Corporate profits are going to decrease faster than interest rates will fall , and the probability is that we 'll see negative economic growth in the fourth quarter . '' 
 Hugh Johnson , chief investment officer at First Albany Corp. , agreed that a deteriorating economy is worrisome , but he said the real concern among stock investors is that some new problem will crop up in the junk bond market . 
 In major market activity : Stock prices slumped in sluggish trading 
 Volume on the New York Stock Exchange totaled 135.9 million shares . 
 Declining issues on the Big Board were ahead of gainers , 1,012 to 501 . 
 Bond prices rallied . 
 The yield on the Treasury 's benchmark 30-year bond slipped to 7.93 % . 
 The dollar weakened against most other major currencies . 
 In late New York trading , the dollar was quoted at 1.8470 marks and 141.90 yen , compared with 1.8578 marks and 142.43 yen late Friday . 
 The Wall Street Journal `` American Way of Buying '' Survey consists of two separate , door-to-door nationwide polls conducted for the Journal by Peter D. Hart Research Associates and the Roper Organization . 
 The two surveys , which asked different questions , were conducted using national random probability samples . 
 The poll conducted by Peter D. Hart Research Associates interviewed 2,064 adults age 18 and older from June 15 to June 30 , 1989 . 
 The poll conducted by the Roper Organization interviewed 2,002 adults age 18 and older from July 7 to July 15 , 1989 . 
 Responses were weighted on the basis of age and gender to conform with U.S. Census data . 
 For each poll , the odds are 19 out of 20 that if pollsters had sought to survey every household in the U.S. using the same questionnaire , the findings would differ from these poll results by no more than 2 percentage points in either direction . 
 The margin of error for subgroups -- for example , married women with children at home -- would be larger . 
 In addition , in any survey , there is always the chance that other factors such as question wording could introduce errors into the findings . 
 -LRB- See related story : `` The American Way of Buying : Is Buying a Car a Choice or a Chore ? -- 
 Ironically , American Airlines ' attempt to lead industry prices higher was reported in the same issue as your survey showing that consumers had the least confidence in the airline industry -LRB- Sept. 20 -RRB- . 
 You quote Robert Crandall , chairman of American 's parent , AMR Corp. , as having said that discount deals for big customers would be `` dumb '' because `` you will go to Detroit because you have to go to Detroit whether the fare is $ 175 , $ 275 or $ 375 . '' 
 Even if Mr. Crandall is correct , he of all people must realize our society relies on competition to keep prices at a competitive level . 
 In 1986 , he settled an antitrust suit based on a taped telephone conversation of him proposing to Braniff 's president that they both raise fares 20 % . 
 -LRB- Braniff declined -RRB- . 
 When I asked American Airlines for its side of the story for use in my MBA class , where I teach business ethics , it did not respond . 
 Perhaps the ethics of an industry 's leader filters down and is one of the factors that ultimately shapes consumer trust in that industry . 
 Arnold Celnicker Assistant Professor Ohio State University 
 Meredith Corp. is launching a new service to offer advertisers package deals combining its book , magazine and videocassette products . 
 The Des Moines-based publisher said it created a new Custom Marketing Group that will offer advertisers special rates for combination packages in its magazines , such as Ladies Home Journal and Better Homes and Gardens . 
 In addition , the group will create custom-designed media such as cookbooks , newspaper inserts and videos for ad campaigns . 
 Earlier this year , Meredith sold its first such package for $ 3 million to Kraft Inc. , now a unit of New York-based Philip Morris Cos . 
 The Kraft package included a specially published cookbook , a national free-standing insert in Sunday newspapers , and a Kraft `` advertorial '' section that ran in five Meredith magazines . 
 Kraft recently agreed to spend an additional $ 3 million on similar programs through 1990 . 
 Bill Murphy , director of the new marketing unit , said Meredith is negotiating other large-scale packages with leading companies in several product categories , but he would n't disclose their names . 
 Sources close to the company and ad agencies that work with Meredith said leading advertisers in consumer electronics , packaged goods and automotive products were among those negotiating ad packages with the Meredith group . 
 Other magazine publishing companies have been moving in the same direction . 
 The New York Times Co. 's Magazine Group earlier this year began offering advertisers extensive merchandising services built around buying ad pages in its Golf Digest magazine . 
 Time Warner Inc. recently formed a `` synergy department '' to seek out ways to offer advertisers packages that could combine Time 's magazines with Warner products such as videocassettes . 
 Paul DuCharme , director of media services at Grey Advertising , said Meredith is the leader in providing multimedia packages . 
 `` They may get passed up later when other publishers get their acts together , but for now they are the quickest offering the most extensive plan , '' he said . 
 Mr. Murphy of Meredith said one advertiser , which he would n't identify , wants Meredith to provide ad pages in seven Meredith magazines , publish an interior-decorating book that will be distributed at point of purchase , give away a videotape on installation pointers , and possibly use Meredith 's Better Homes and Gardens ' residential real-estate agents to distribute discount-coupon books to new homeowners . 
 `` Five years ago , magazine publishers would simply bid on an advertiser 's big ad schedule for their magazine , '' said Mr. Murphy . 
 `` But the marketplace changed . 
 Advertisers now say ` Help us improve our image and extend our selling season . ' 
 They are coming to publishers looking for ideas . 
 Your Sept. 21 article `` It 's So Easy to Get Burned When Buying a Small Firm '' was excellent . 
 I 've been advising small businesses many years and have lived with the fact that 50 % will go out of business within two years , and 80 % in five years . 
 The economic loss , jobs lost , anguish , frustration and humiliation are beyond measure . 
 And most of these are absolutely unnecessary . 
 Your article points out the traps people fall into , but when reviewing those traps one sees just about all of them could have been avoided . 
 An accountant did not review the seller 's books before buying a business . 
 `` I guess I was naive , '' he said . 
 There is a more descriptive word to describe his lapse of common sense . 
 Corporate managers who want to start their own business are the highest failure risks . 
 They know all the answers and are not used to working more than 40 hours a week . 
 The blue-collar worker who decides to start a business will listen and take advice . 
 His humility gives him a much better chance of success . 
 A few months ago your paper reported the results of a study to determine why Asians who arrive in this country without any money , and unable to speak English , become overnight successes . 
 Their `` secret '' is that they gather a small group of advisers around them , listen to what they have to say , prepare a business plan and they are on their way . 
 Successful American business owners do the same thing . 
 Unfortunately , they are in the minority . 
 Avoiding failure is easy . 
 It 's unfortunate so many must learn the hard way . 
 Daniel B. Scully Tucson , Ariz . 
 The management turnover at Reebok International Ltd. continued with the resignation of company president C. Joseph LaBonte , who joined Reebok just two years ago . 
 Mr. LaBonte 's departure follows by two months the resignation of Mark Goldston as senior vice president and chief marketing officer after only 11 months at Reebok . 
 The resignations by the two executives , considered hard-charging and abrasive by Reebok insiders , reflect a difference in style with Paul Fireman , chairman and chief executive , according to several former executives . 
 The two executives are among a number of outsiders recruited by Reebok in the past few years to help it make the transition from a small start-up company to a marketing giant with sales last year of $ 1.79 billion . 
 The changes come as Reebok , which grew rapidly in the mid-1980s but has seen its sales flatten of late , is seeking to regain momentum in the athletic-shoe business against rivals Nike Inc. and L.A. Gear Inc . 
 The departures , said Alice Ruth , an analyst at Montgomery Securities in San Francisco , should enable the company to focus on business issues instead of management differences . 
 `` I think it 's more an issue of style . 
 I would view it as a net positive . 
 The company can go about its business . 
 They 're in the midst of a turnaround , '' she noted . 
 Earnings have rebounded in 1989 after a 20 % decline last year . 
 A former executive agreed that the departures do n't reflect major problems , adding : `` If you see any company that grows as fast as Reebok did , it is going to have people coming and going . '' 
 Reebok said Mr. LaBonte will resume the presidency of Vantage Group Inc. , a California-based venture capital firm that he founded in 1983 . 
 Before that he was president and chief operating officer of Twentieth Century-Fox Film Corp . 
 Reebok added that Mr. Fireman will assume the title of president . 
 A spokesman said that neither Mr. Fireman nor Mr. LaBonte would be available for comment . 
 `` We will not be commenting beyond the news release , '' the spokesman said . 
 Mr. Goldston , who had been president of Faberge Inc. 's Faberge U.S.A. division before joining Reebok in September 1988 , left in August to pursue other interests . 
 Magazine publishers are facing spiraling costs and a glut of new titles . 
 But even a raft of recent failures is n't stopping them from launching new publications . 
 At the American Magazine Conference here , publishers are plenty worried about the industry 's woes . 
 But they are also talking about new magazines . 
 For example , Toronto-based Telemedia Inc. will publish Eating Well , a new food and health magazine due out next summer . 
 New York-based Hearst Corp. this fall plans to publish its first issue of 9 Months , a magazine for expectant mothers , and has already launched American Home . 
 And Time Warner Inc. is developing a spinoff of Time magazine aimed at kids , on the heels of its successful Sports Illustrated for Kids . 
 Over the past four years , the number of consumer magazines has increased by an average of 80 magazines annually , according to Donald Kummerfeld , president of the Magazine Publishers of America . 
 `` This is an impressive show of faith in the future of the magazine industry , '' said Mr. Kummerfeld . 
 `` Entrepreneurs do n't rush to get into a stagnant or declining industry . '' 
 And despite the recent tough advertising climate , industry figures released at the meeting here indicate things may be turning around . 
 For the first nine months , advertising pages in consumer magazines tracked by the Publishers Information Bureau increased 4 % from the same period last year , to 125,849 pages . 
 Total magazine ad revenue for the same period increased 12 % to $ 4.6 billion . 
 Though for some magazines categories a tough advertising climate persists , the industry in general is doing well compared with the newspaper industry . 
 Though some magazines are thriving , the magazine publishing industry remains a risky business . 
 Within the same nine months , News Corp. closed down In Fashion , a once-promising young woman 's fashion magazine , Drake Publications Inc. has folded the long-troubled Venture magazine , and Lang Communications has announced Ms. magazine , after 17 years , will no longer carry advertising as of January . 
 Lang is cutting costs and will attempt to operate the magazine with only subscription revenue . 
 Meanwhile , American Health Partners , publisher of American Health magazine , is deep in debt , and Owen Lipstein , founder and managing partner , is being forced to sell the magazine to Reader 's Digest Association Inc . 
 Mr. Lipstein 's absence from the meeting here raised speculation that the sale is in trouble . 
 Mr. Lipstein said in a telephone interview from New York that the sale was proceeding as planned . 
 `` The magazine is strong . 
 It 's simply the right time to do what we are doing , '' Mr. Lipstein said . 
 `` Magazines can no longer be considered institutions , '' said James Autry , president of Meredith Corp. 's magazine group . 
 `` Publishers will find that some magazines have served their purpose and should die , '' he added . 
 `` Magazines could , like other brands , find that they have only a limited life . '' 
 There are also indications that the number of magazine entrepreneurs , traditionally depended upon to break new ground with potentially risky start-ups , are dwindling . 
 More than ever , independent magazines and small publishing groups are being gobbled up by larger publishing groups , such as American Express Publishing Corp. , a unit of American Express Co. , and Conde Nast Publications Inc. , a unit of Advance Publications Inc. , which are consolidating in order to gain leverage with advertisers . 
 Some entrepreneurs are still active , though . 
 Gerry Ritterman , president of New York-based Network Publishing Corp. , earlier this year sold his Soap Opera Digest magazine to Rupert Murdoch 's News Corp . 
 Mr. Ritterman said that in the next six months he will take $ 50 million from the Soap Opera Digest sale to acquire new magazines . 
 He would not reveal which magazines he is considering . 
 `` The magazines I am looking for are underdeveloped , '' said Mr. Ritterman . 
 `` They could be old or new , but they are magazines whose editorial quality needs to be improved . 
 They will be the next hot magazines . 
 MCA Inc. said its toy-making unit agreed to buy Buddy L Corp. , producer of a line of toy vehicles and preschool products . 
 The price was n't disclosed , but an executive of LJN Toys Ltd. , the MCA unit , said the closely held Buddy L had annual sales in excess of $ 20 million . 
 The 40-year-old Buddy L concern , based in New York , designs and develops toys under the names `` Buddy L '' and `` My First Buddy , '' he said . 
 MCA said it expects the proposed transaction to be completed `` no later than Nov. 10 . 
 -LRB- During its centennial year , The Wall Street Journal will report events of the past century that stand as milestones of American business history . -RRB- 
 FRANKLIN NATIONAL BANK DIED at 3 p.m. EDT , Oct. 8 , 1974 , and was promptly resurrected under new owners to shore up confidence in other banks during a recession . 
 Arthur Burns , Federal Reserve Board chairman , said the government 's `` luck '' in keeping the bank open -- despite being the then-biggest U.S. bank failure -- prevented `` shock waves around the country and around the world . '' 
 Federal officials who had been probing the bank for months arranged a merger with European-American Bank & Trust , owned by six foreign banks , to avert the closedown . 
 And federal insurance protected the bank 's 631,163 depositors . 
 The crisis had peaked on May 10 , 1974 , when the bank disclosed `` severe '' foreign-exchange losses due to `` unauthorized '' trading . 
 Massive withdrawals followed and there was a brief rescue attempt , with political undertones , including $ 1.77 billion in Federal Reserve loans . 
 Within six years many figures were convicted for their illegal abuse of Franklin funds . 
 In June 1980 , Michele Sindona -- an Italian financier who in July 1972 had bought a 22 % block of Franklin 's stock from Loews Corp. , headed by Laurence A. Tisch -- was sentenced to 25 years in prison after being convicted of fraud and perjury . 
 Included was the charge that Sindona siphoned $ 45 million of Franklin funds for his other ventures . 
 -LRB- Sindona in 1979 faked his `` kidnapping '' for 2 months to delay his trial . -RRB- 
 During 1976 to 1979 , other former Franklin officials either pleaded guilty to or were found guilty of violations including phony transactions to hide the bank 's losses . 
 Sindona , the onetime Vatican financial adviser with reported links to the Mafia , died on March 22 , 1986 , at age 65 , reportedly after drinking cyanide-laced coffee in an Italian prison . 
 It happened four days after he was sentenced to life in prison for ordering a 1979 murder . 
 Italian magistrates labeled his death a suicide . 
 In a nondescript office building south of Los Angeles , human behavior is being monitored , dissected and , ultimately , manipulated . 
 A squiggly line snakes across a video screen , gyrating erratically as subjects with hand-held computers register their second-by-second reactions to a speaker 's remarks . 
 Agreement , disapproval , boredom and distraction all can be inferred from the subjects ' twist of a dial . 
 In another experiment , an elaborate chart with color codes reveals how people 's opinions were shaped -- and how they can be reshaped . 
 Donald Vinson , who oversees the experiments , is n't some white-coated researcher . 
 He heads Litigation Sciences Inc. , the nation 's largest legal consulting firm , which is helping corporate America prepare for high-stakes litigation by predicting and shaping jurors ' reactions . 
 In the process , Litigation Sciences is quietly but inexorably reshaping the world of law . 
 Little known outside the legal world but a powerhouse within , Litigation Sciences , a unit of Saatchi & Saatchi PLC , employs more than 100 psychologists , sociologists , marketers , graphic artists and technicians . 
 Twenty-one of its workers are Ph. D.s . 
 Among other services , the firm provides pre-trial opinion polls , creates profiles of `` ideal '' jurors , sets up mock trials and `` shadow '' juries , coaches lawyers and witnesses , and designs courtroom graphics . 
 Much like their cohorts in political consulting and product marketing , the litigation advisers encourage their clients to play down complex or ambiguous matters , simplify their messages and provide their target audiences with a psychological craving to make the desired choice . 
 With jury verdicts getting bigger all the time , companies are increasingly willing to pay huge sums for such advice . 
 Recently , Litigation Sciences helped Pennzoil Co. win a $ 10.5 billion jury verdict against Texaco Inc . 
 It advised the National Football League in its largely successful defense of antitrust charges by the United States Football League . 
 And it helped win defense verdicts in product-liability suits involving scores of products , ranging from Firestone 500 tires to the anti-nausea drug Bendectin . 
 Largely as a result , Litigation Sciences has more than doubled in size in the past two years . 
 Its 1988 revenue was $ 25 million . 
 Meanwhile , competitors are being spawned almost daily ; some 300 new businesses -- many just one-person shops -- have sprung up . 
 Mr. Vinson estimates the industry 's total revenues approach $ 200 million . 
 In any high-stakes case , you can be sure that one side or the other -- or even both -- is using litigation consultants . 
 Despite their ubiquity , the consultants are n't entirely welcome . 
 Some lawyers and scholars see the social scientists ' vision of the American jury system as a far cry from the ideal presented in civics texts and memorialized on the movie screen . 
 In the film classic `` Twelve Angry Men , '' the crucible of deliberations unmasks each juror 's bias and purges it from playing a role in the verdict . 
 After hours of conflict and debate , that jury focuses on the facts with near-perfect objectivity . 
 In real life , jurors may not always work that way , but some court observers question why they should n't be encouraged to do so rather than be programmed not to . 
 Litigation consulting is , as New York trial attorney Donald Zoeller puts it , `` highly manipulative . '' 
 He adds , `` The notion they try to sell is that juries do n't make decisions rationally . 
 But the effort is also being made to try and cause jurors not to decide things rationally . 
 I find it troubling . '' 
 But Mr. Zoeller also acknowledges that consultants can be very effective . 
 `` It 's gotten to the point where if the case is large enough , it 's almost malpractice not to use them , '' he says . 
 Others complain that the consultants ' growing influence exacerbates the advantage of litigants wealthy enough to afford such pricey services . 
 `` The affluent people and the corporations can buy it , the poor radicals -LCB- in political cases -RCB- get it free , and everybody in between is at a disadvantage , and that 's not the kind of system we want , '' says Amitai Etzioni , a prominent sociologist who teaches at George Washington University . 
 Sophisticated trial consulting grew , ironically , from the radical political movements of the 1960s and 1970s before finding its more lucrative calling in big commercial cases . 
 The Harrisburg 7 trial in 1972 , in which Daniel Berrigan and others were charged with plotting anti-war-related violence , was a landmark . 
 In that case , a group of left-leaning sociologists interviewed 252 registered voters around Harrisburg . 
 The researchers discovered that Episcopalians , Presbyterians , Methodists and fundamantalist Protestants were nearly always against the defendants ; the lawyers resolved to try to keep them off the jury . 
 The defense also learned that college-educated people were uncharacteristically conservative about the Vietnam War . 
 A more blue-collar panel became a second aim . 
 Ultimately , that carefully picked jury deadlocked with a 10-2 vote to acquit , and the prosecution decided not to retry the case . 
 Litigation consulting had arrived . 
 The fledgling science went corporate in 1977 when International Business Machines Corp. hired a marketing professor to help defend a complex antitrust case . 
 The problem for IBM trial lawyers Thomas Barr and David Boies was how to make such a highly technical case understandable . 
 As the trial progressed , they were eager to know if the jury was keeping up with them . 
 The solution devised by the professor was to hire six people who would mirror the actual jury demographically , sit in on the trial and report their reactions to him . 
 He then briefed Messrs. Boies and Barr , who had the chance to tilt their next day 's presentation accordingly . 
 Thus , the `` shadow '' jury was born . 
 Mr. Vinson , the professor , got the law bug and formed Litigation Sciences . 
 -LRB- IBM won the case . -RRB- 
 `` The hardest thing in any complex case is to retain objectivity and , in some sense , your ignorance , '' says Mr. Boies of Cravath , Swaine & Moore . 
 `` What you look for in a shadow jury is very much what you do when you give an opening argument to your wife or a friend and get some response to it . 
 A shadow jury is a way to do that in a more systematic and organized way . '' 
 The approach worked well in the recent antitrust case in which Energy Transportation Systems Inc. sued Santa Fe Pacific Corp. over the transport of semi-liquefied coal -- the kind of case likely to make almost anyone 's eyes glaze over . 
 Energy Transportation retained Litigation Sciences , at a cost of several hundred thousand dollars , to poll , pre-try , profile and shadow . 
 Just before the actual closing arguments , the firm put the case to a vote of the five shadow jurors , each of whom was being paid $ 150 a day . 
 The jurors , who did n't know which side had retained them , decided for Energy Transportation , and awarded $ 500 million in damages . 
 The real jury returned days later with a $ 345 million victory for Energy Transportation . 
 `` It 's just like weather forecasting , '' says Energy Transportation trial attorney Harry Reasoner of Vinson & Elkins . 
 `` It 's often wrong , but it 's better than consulting an Indian rain dancer . '' 
 Forecasting is only one part of Litigation Sciences ' work . 
 Changing the outcome of the trial is what really matters . 
 And to the uninitiated , some of the firm 's approaches may seem chillingly manipulative . 
 Theoretically , jurors are supposed to weigh the evidence in a case logically and objectively . 
 Instead , Mr. Vinson says , interviews with thousands of jurors reveal that they start with firmly entrenched attitudes and try to shoe-horn the facts of the case to fit their views . 
 Pre-trial polling helps the consultants develop a profile of the right type of juror . 
 If it is a case in which the client seeks punitive damages , for example , depressed , underemployed people are far more likely to grant them . 
 Someone with a master 's degree in classical arts who works in a deli would be ideal , Litigation Sciences advises . 
 So would someone recently divorced or widowed . 
 -LRB- Since Litigation Sciences generally represents the defense , its job is usually to help the lawyers identify and remove such people from the jury . -RRB- 
 For personal-injury cases , Litigation Sciences seeks defense jurors who believe that most people , including victims , get what they deserve . 
 Such people also typically hold negative attitudes toward the physically handicapped , the poor , blacks and women . 
 The consultants help the defense lawyers find such jurors by asking questions about potential jurors ' attitudes toward volunteer work , or toward particular movies or books . 
 Litigation Sciences does n't make moral distinctions . 
 If a client needs prejudiced jurors , the firm will help find them . 
 As Mr. Vinson explains it , `` We do n't control the facts . 
 They are what they are . 
 But any lawyer will select the facts and the strategy to employ . 
 In our system of advocacy , the trial lawyer is duty bound to present the best case he possibly can . '' 
 Once a jury is selected , the consultants often continue to determine what the jurors ' attitudes are likely to be and help shape the lawyers ' presentation accordingly . 
 Logic plays a minimal role here . 
 More important are what LSI calls `` psychological anchors '' -- a few focal points calculated to appeal to the jury on a gut level . 
 In one personal-injury case , a woman claimed she had been injured when she slipped in a pool , but the fall did n't explain why one of her arms was discolored bluish . 
 By repeatedly drawing the jury 's attention to the arm , the defense lawyers planted doubt about the origin of the woman 's injuries . 
 The ploy worked . 
 The defense won . 
 In a classic defense of a personal-injury case , the consultants concentrate on encouraging the jury to shift the blame . 
 `` The ideal defense in a case involving an accident is to persuade the jurors to hold the accident victim responsible for his or her plight , '' Mr. Vinson has written . 
 Slick graphics , pre-tested for effectiveness , also play a major role in Litigation Sciences ' operation . 
 Studies show , the consultants say , that people absorb information better and remember it longer if they receive it visually . 
 Computer-generated videos help . 
 `` The average American watches seven hours of TV a day . 
 They are very visually sophisticated , '' explains LSI graphics specialist Robert Seltzer . 
 Lawyers remain divided about whether anything is wrong with all this . 
 Supporters acknowledge that the process aims to manipulate , but they insist that the best trial lawyers have always employed similar tactics . 
 `` They may not have been able to articulate it all , but they did it , '' says Stephen Gillers , a legal ethics expert at New York University law school . 
 `` What you have here is intuition made manifest . '' 
 Many lawyers maintain that all 's fair in the adversary system as long as no one tampers with the evidence . 
 Others point out that lawyers in small communities have always had a feel for public sentiment -- and used that to advantage . 
 Litigation consulting is n't a guarantee of a favorable outcome . 
 Litigation Sciences concedes that in one in 20 cases it was flatout wrong in its predictions . 
 A few attorneys offer horror stories of jobs botched by consultants or of overpriced services -- as when one lawyer paid a consultant -LRB- not at Litigation Sciences -RRB- $ 70,000 to interview a jury after a big trial and later read more informative interviews with the same jurors in The American Lawyer magazine . 
 Some litigators scoff at the notion that a sociologist knows more than they do about what makes a jury tick . 
 `` The essence of being a trial lawyer is understanding how people of diverse backgrounds react to you and your presentation , '' says Barry Ostrager of Simpson Thacher & Bartlett , who recently won a huge case on behalf of insurers against Shell Oil Co . 
 He says he used consultants in the case but `` found them to be virtually useless . '' 
 But most lawyers accept that the marketplace has spoken . 
 And the question remains whether the jury system can maintain its integrity while undergoing such a skillful massage . 
 For more than a decade , Mr. Etzioni , the sociologist , has been a leading critic of the masseurs . 
 `` There 's no reason to believe that juries rule inappropriately , '' he says . 
 `` But the last thing you want to do is manipulate the subconscious to make them think better . 
 What you then do is you make them think inappropriately . '' 
 To hamper the work of litigation scientists , he suggests that courts sharply limit the number of jurors that lawyers can remove from the jury panel through so-called peremptory challenges -- exclusions that do n't require explanations . 
 In most civil cases , judges allow each side three such challenges . 
 For complex cases , judges sometimes allow many more . 
 Mr. Etzioni also suggests forbidding anyone from gathering background information about the jurors . 
 -LRB- Some courts release names and addresses , and researchers can drive by houses , look up credit ratings , and even question neighbors . -RRB- 
 Furthermore , he says , psychologists should not be allowed to analyze jurors ' personalities . 
 Even some lawyers who have used consultants to their advantage see a need to limit their impact . 
 Mr. Boies , the first lawyer to use Mr. Vinson 's services , cautions against courts ' allowing extensive jury questioning -LRB- known as voir dire -RRB- or giving out personal information about the jurors . 
 `` The more extensive the voir dire , the easier you make it for that kind of research to be effective , and I do n't think courts should lend themselves to that , '' Mr. Boies says . 
 Silicon Graphics Inc. , a fast-growing maker of computer workstations , said it landed two federal government contracts worth more than $ 100 million over the next five years . 
 One award is part of a Department of Defense contract to Loral Rolm Mil-Spec Computers and could be valued at more than $ 100 million over five years . 
 The other involves the sale of about 35 of the company 's high-end workstations to the National Institutes of Health . 
 The models , which cost about $ 75,000 each , will be used in research . 
 The awards are evidence that Silicon Graphics ' approach to computer graphics is catching on with users of powerful desktop computers , analysts said . 
 `` The company 's on a roll , '' said Robert Herwick , an analyst at Hambrecht & Quist . 
 `` No other -LCB- computer -RCB- vendor offers graphics performance that good for their price . '' 
 In the battle to supply desktop computers for researchers and design engineers , most of the attention is given to the biggest competitors : Sun Microsystems Inc. , Hewlett-Packard Co. and Digital Equipment Corp. , which make computers mainly aimed at a wide range of engineering and scientific needs . 
 Silicon Graphics , on the other hand , has targeted a specific niche since its inception in 1982 , which has been dubbed by some as `` motion-picture computing . '' 
 This is a style of `` visual '' computing that provides three-dimensional , color models of everything from the inside of a house to the latest in women 's fashion . 
 Though Silicon Graphics is much smaller than Digital , Hewlett and Sun , it has emerged in recent years as a feared adversary in this graphics portion of the workstation market . 
 In addition , the company has made it tough on competitors by offering a stream of desktop computers at sharply lower prices . 
 A year ago , Silicon Graphics introduced a model priced at $ 15,000 -- almost as cheap as mainstream workstations that do n't offer special graphics features . 
 Silicon Graphics also plans to unveil even less expensive machines in the near future . 
 `` It 's pretty safe to assume we can bring the cost down of these systems by 30 % to 40 % a year , '' said Edward McCracken , the company 's chief executive officer . 
 Silicon Graphics ' strategy seems to be paying off . 
 Revenue for its first quarter ended Sept. 30 was $ 86.4 million , a 95 % increase over the year-ago period . 
 Profit was $ 5.2 million , compared with $ 1 million for the year-ago quarter . 
 Remember those bulky , thick-walled refrigerators of 30 years ago ? 
 They , or at least something less efficient than today 's thin-walled units , may soon be making a comeback . 
 That something , whatever it is , could add as much as $ 100 to the $ 600 or so consumers now pay for lower-priced refrigerators . 
 These and other expensive changes in products ranging from auto air conditioners to foam cushioning to commercial solvents are in prospect because of something called the Montreal Protocol , signed by 24 nations in 1987 . 
 In one of the most sweeping environmental regulatory efforts to date -- involving products with an annual value of $ 135 billion in the U.S. alone -- the signatories agreed to curtail sharply the use of chlorofluorocarbons -LRB- CFCs -RRB- . 
 World-wide production would be cut in half by 1998 . 
 The U.S. Senate liked the treaty so well it ratified it by a vote of 89 to 0 . 
 Not to be outdone , George Bush wants CFCs banished altogether by the year 2000 , a goal endorsed at an 80-nation U.N. environmental meeting in Helsinki in the spring . 
 That 's a lot of banishment , as it turns out . 
 CFCs are the primary ingredient in a gas , often referred to by the Du Pont trade name Freon , which is compressed to liquid form to serve as the cooling agent in refrigeration and air-conditioning equipment . 
 Gases containing CFCs are pumped into polyurethane to make the foam used in pillows , upholstery and insulation . 
 Polyurethane foam is a highly efficient insulator , which accounts for why the walls of refrigerators and freezers can be thinner now than they were back in the days when they were insulated with glass fiber . 
 But even though by some estimates it might cost the world as much as $ 100 billion between now and the year 2000 to convert to other coolants , foaming agents and solvents and to redesign equipment for these less efficient substitutes , the Montreal Protocol 's legions of supporters say it is worth it . 
 They insist that CFCs are damaging the earth 's stratospheric ozone layer , which screens out some of the sun 's ultraviolet rays . 
 Hence , as they see it , if something is n't done earthlings will become ever more subject to sunburn and skin cancer . 
 Peter Teagan , a specialist in heat transfer , is running a project at Arthur D. Little Inc. , of Cambridge , Mass. , to find alternative technologies that will allow industry to eliminate CFCs . 
 In addition to his interest in ozone depletion he has extensively studied the related topic of global warming , a theory that mankind 's generation of carbon dioxide through increased combustion of fossil fuels is creating a `` greenhouse effect '' that will work important climatic changes in the earth 's atmosphere over time . 
 `` I would be the first to admit that there is not a complete consensus in the scientific community on either one of these problems , '' says Mr. Teagan . 
 `` In the kind of literature I read I come across countervailing opinions quite frequently . 
 But the nature of the problem is such that many others feel it has to be addressed soon , before all the evidence is in . 
 We ca n't afford to wait . '' 
 But does it have to be so soon ? 
 Some atmospheric scientists think that even if CFCs were released into the atmosphere at an accelerating rate , the amount of ozone depletion would be only 10 % by the middle of the next century . 
 It 's easy to get something comparable by simply moving to a higher altitude in the U.S . 
 Moreover , there are questions , particularly among atmospheric scientists who know this subject best , about the ability of anyone to know what in fact is happening to the ozone layer . 
 It is generally agreed that when CFCs rise from earth to stratosphere , the chlorine in them is capable of interfering with the process through which ultraviolet rays split oxygen molecules and form ozone . 
 But ozone creation is a very large-scale natural process and the importance of human-generated CFCs in reducing it is largely a matter of conjecture . 
 The ozone layer is constantly in motion and thus very hard to measure . 
 What scientists have known since the late 1970s is that there is a hole in the layer over Antarctica that expands or contracts from year to year . 
 But it is at least worthy of some note that there are very few refrigerators in Antarctica . 
 Moreover , surely someone has noticed that household refrigerators are closed systems , running for many years without either the CFC gas or the insulation ever escaping . 
 Another argument of the environmentalists is that if substitutes are available , why not use them ? 
 Mr. Teagan cites a list of substitutes but none , so far , match the nonflammable , nontoxic CFCs . 
 Butane and propane can be used as coolants , for example , but are flammable . 
 Moreover , new lubricants will be needed to protect compressors from the new formulations , which , as with CFCs , are solvents . 
 Mr. Teagan points out as well that if the equipment designed to get along without CFCs is less efficient than current devices , energy consumption will rise and that will worsen the greenhouse effect . 
 Folks in the Midwest who just suffered a mid-October snowstorm may wonder where the greenhouse was when they needed it , but let 's not be flippant about grave risks . 
 As it happens , Arthur D. Little is not at all interested in throwing cold water on ozone depletion and global warming theories . 
 It is interested in making some money advising industry on how to convert to a world without CFCs . 
 There is , after all , big money in environmentalism . 
 Maybe we should ask why it was that Du Pont so quickly capitulated and issued a statement , giving it wide publicity , that it was withdrawing CFCs . 
 Freon , introduced in 1930 , revolutionized America by making refrigeration and air conditioning practical after all . 
 One answer is that big companies are growing weary of fighting environmental movements and are trying instead to cash in on them , although they never care to put it quite that way . 
 Du Pont , as it happens , has a potential substitute for CFCs . 
 Imperial Chemical Industries of the U.K. also has one , and is building a plant in Louisiana to produce it . 
 Japanese chemical companies are at work developing their own substitutes and hoping to conquer new markets , of course . 
 There are still others who do n't mind seeing new crises arise . 
 Environmental groups would soon go out of business were they not able to send out mailings describing the latest threat and asking for money to fight it . 
 University professors and consultants with scientific credentials saw a huge market for their services evaporate when price decontrol destroyed the energy crisis and thus the demand for `` alternative energy . '' 
 They needed new crises to generate new grants and contracts . 
 In other words , environmentalism has created a whole set of vested interests that fare better when there are many problems than when there are few . 
 That tends to tilt the public debate toward `` solutions '' even when some of the most knowledgeable scientists are skeptical about the seriousness of the threats and the insistence of urgency . 
 There is an element of make-work involved . 
 Consumers pay the bill for all this in the price of a refrigerator or an air-conditioned car . 
 If they were really getting insurance against environmental disaster , the price would be cheap . 
 But if there is no impending threat , it can get to be very expensive . 
 but worries about 1990 . 
 With most legislatures adjourned for the year , small business is tallying its scorecard . 
 Much of its attention was spent fighting organized labor 's initiatives on issues the small-business community traditionally opposes -- from raising state minimum wage levels to mandating benefits in health plans . 
 While results were mixed in many states , `` small business got by fairly well , '' concludes Don L. Robinson , associate director of the National Federation of Independent Business , the largest small-business organization . 
 Five states -- Oregon , Rhode Island , New Hampshire , Iowa and Wisconsin -- passed bills to boost the minimum wage , but measures in 19 other states were defeated . 
 Oregon 's rate will rise to $ 4.75 an hour , the nation 's highest , in Jan. 1 , 1991 . 
 Iowa 's will be the second highest -- at $ 4.65 an hour in January 1992 -- but small-business lobbyists won an exclusion for tiny concerns and a lower training rate . 
 In 17 central states , one small-business count shows lawmakers adopted only three of 46 bills mandating health coverage or parental leave . 
 The Illinois Legislature narrowly passed a parental-leave bill , which Gov. James Thompson vetoed , and Iowa and Tennessee amended laws to require that employers pay for breast-cancer exams . 
 Small business is bracing for an avalanche of similar proposals next year . 
 `` Those kinds of issues always keep coming back , '' says Robert Beckwith , who manages the Illinois Chamber of Commerce 's small-business office . 
 DESPITE VICTORIES this year , small business fears losing parental-leave war . 
 Only two states -- Vermont and Washington -- this year joined five others requiring private employers to grant leaves of absence to employees with newborn or adopted infants . 
 Similar proposals were defeated in at least 15 other states . 
 But small business , which generally detests government-mandated benefits , has taken note of the growing number of close votes . 
 `` It 's just a matter of time before the tide turns , '' says one Midwestern lobbyist . 
 Consequently , small business is taking more `` pro-active '' steps to counter mandated leaves . 
 In Pennsylvania , small businesses are pushing for a voluntary alternative ; they favor a commission that would develop sample leave policies that employers could adopt . 
 They also support a tax credit for employers to offset the cost of hiring and training workers who temporarily replace employees on parental leave . 
 In 1990 , the issue is expected to be especially close in Alaska , California , Michigan , New York , Pennsylvania and Illinois . 
 `` We 'll be playing a lot of defense , especially in the Midwest and Northeast , '' says Jim Buente of the NFIB . 
 IN LOS ANGELES , more small businesses ponder adopting a child-care policy . 
 Triggering the re-examination is a recent city council decision to give preference in letting city contracts to suppliers with a stated policy on child care for their employees . 
 The preferential treatment even applies to awarding small contracts under $ 25,000 and consulting and temporary services -- which often go to the smaller concerns . 
 Firms are permitted wide flexibility in the child-care arrangements they provide . 
 Council member Joy Picus , the measure 's chief advocate , considers it part of a `` pro-family policy '' that makes Los Angeles a leader in `` humanizing the workplace . '' 
 NOVEMBER BALLOTS will contain few referendum or initiative issues that especially affect small business . 
 In San Francisco , small businesses are urging passage of a local initiative to build a new $ 95 million downtown baseball stadium ; they believe it will spur retail sales and hotel-restaurant business . 
 But in Washington state , small business generally opposes an initiative to boost spending on children 's programs by $ 360 million , fearing the state 's 7.8 % sales tax will be raised to finance the outlays . 
 DIALING DOLLARS : Small businesses in suburban Chicago are discovering that an area-code switch Nov. 11 -- to 708 from the familiar 312 -- wo n't be without some costs as they alter stationery , among other things , and notify customers . 
 Wessels & Pautsch , a small St. Charles law firm , plans to mail 500 customers a list of its lawyers ' new phone and fax numbers as well as updated Rolodex cards . 
 But many owners plan to practice frugality -- crossing out the old code and writing in the new one until their stock runs out . 
 Even print-shop operator Clay Smith of Naperville wo n't discard his old supply . 
 -LRB- He reports his business is up slightly from customers replacing old stock . -RRB- 
 CALIFORNIA , A TREND-SETTER in franchising rules , stirs a controversy . 
 With some new rules , state officials say they made it easier -- and faster -- to sell new franchises whose terms stray from those in state-registered contracts . 
 Previously , regulators insisted that franchisers pre-register such changes with the state -- a costly process taking at least six weeks . 
 Now some negotiated sales that meet a series of tests do n't have to be pre-registered . 
 For instance , franchisers no longer must pre-register sales to aspiring franchisees who qualify as `` sophisticated purchasers . '' 
 Such buyers must have a minimum net worth of $ 1 million , $ 200,000 annual income , or recent experience in the business area of the franchise being sold . 
 But critics consider the changes regressive . 
 Lewis G. Rudnick , a Chicago lawyer who represents franchisers , contends California is narrowly limiting -- rather than expanding -- opportunities for negotiating sales . 
 He argues California regulators historically have misinterpreted their law -- and he says negotiated sales that are n't pre-registered have been legal all along . 
 San Francisco lawyer Timothy H. Fine , who represents franchisees , insists California 's cautiousness helps protect franchisees from crafty sales negotiators who push unlawful clauses . 
 SMALL TALK : A new Maryland law frees store owners of liability if a customer trips or otherwise gets hurt on the way to the restroom . 
 Only 4 % of Missouri small businesses surveyed say they 've tested an employee or applicant for drug or alcohol use . 
 By 52%-36 % , Tennessee NFIB members favor laws to limit foreign ownership of land and facilities in the state . 
 About 400,000 commuters trying to find their way through the Bay area 's quake-torn transportation system wedged cheek-to-jowl into subways , sat in traffic jams on major freeways or waited forlornly for buses yesterday . 
 In other words , it was a better-than-average Manhattan commute . 
 City officials feared widespread gridlock on the first day that normal business operations were resumed following last Tuesday 's earthquake . 
 The massive temblor , which killed at least 61 people , severed the Bay Bridge , a major artery to the east , and closed most ramps leading to and from Highway 101 , the biggest artery to the south . 
 It will take several weeks to repair the bridge , and several months to repair some of the 101 connections . 
 But in spite of a wind-driven rainstorm , gridlock never materialized , mainly because the Bay Area Rapid Transit subway system carried 50 % more passengers than normal . 
 For the first time in memory , it was standing-room only in BART 's sleek , modern railcars . 
 Moreover , the two main bridges still connecting San Francisco with the East Bay did n't charge tolls , allowing traffic to zip through without stopping . 
 Officials also suspect that traffic benefited from steps by major employers to get workers to come in at odd hours , or that many workers are still staying at home . 
 Many commuters who normally drove across the Bay Bridge , which is shut down for several weeks because of damage to one span , actually may have reached work a bit faster on BART yesterday , provided they could find a parking space at the system 's jammed stations . 
 In the best of times , the Bay Bridge is the worst commute in the region , often experiencing back-ups of 20 to 30 minutes or more . 
 Not that getting into town was easy . 
 Storm flooding caused back-ups on the freeway , and many commuters had to find rides to BART 's stations , because parking lots were full before dawn . 
 Bus schedules were sometimes in disarray , stranding commuters such as Marilyn Sullivan . 
 Her commute from Petaluma , Calif. , normally takes an hour and 15 minutes , via the Golden Gate Bridge , which connects San Francisco with the North Bay area . 
 Yesterday , she was still waiting at a bus stop after three hours , trying to transfer to a bus going to the financial district . 
 `` It 's worse than I thought , '' she said . 
 `` I do n't know where all the buses are . '' 
 But while traffic was heavy early in the commute over the Golden Gate , by 8 a.m. it already had thinned out . 
 `` It 's one of the smoothest commutes I 've ever had , '' said Charles Catania , an insurance broker on the bus from Mill Valley in Marin County . 
 `` It looks like a holiday . 
 I think a lot of people got scared and stayed home . '' 
 However , a spokeswoman for BankAmerica Corp. said yesterday 's absenteeism at the bank holding company was no greater than on an average day . 
 At the San Mateo Bridge , which connects the San Francisco peninsula with the East Bay , police were surprised at the speed with which traffic moved . 
 `` Everybody pretty much pitched in and cooperated , '' said Stan Perez , a sergeant with the California Highway Patrol . 
 There were many indications that the new work hours implemented by major corporations played a big role . 
 The Golden Gate handled as many cars as normally yesterday , but over four hours rather than the usual two-hour crush . 
 Bechtel Group Inc. , the giant closely held engineering concern , says it has instituted a 6 a.m. to 8 p.m. flextime arrangement , whereby employees may select any eight-hour period during those hours to go to work . 
 Of Bechtel 's 17,500 employees , about 4,000 work in San Francisco -- one-third of them commuting from stricken East Bay . 
 Pacific Gas & Electric Co. is offering its 6,000 San Francisco employees a two-tier flextime schedule -- either 6 a.m. to 2 p.m. or 10 a.m. to 6 p.m . 
 The flextime may cut by almost a third the number of PG&E employees working conventional 9-5 hours , a spokesman says . 
 Some of the utility 's employees may opt for a four-day workweek , 10 hours a day , to cut the commute by 20 % . 
 At Pacific Telesis Group , flextime is left up to individual working groups , because some of the telephone company 's employees must be on-site during normal business hours , a spokeswoman says . 
 Some individuals went to some lengths on their own to avoid the anticipated gridlock . 
 One senior vice president at Bechtel said he got up at 3 a.m. to drive into San Francisco from the East Bay . 
 But transportation officials worry that such extraordinary measures and cooperation may not last . 
 Although one transportation official said drivers who did n't use car pools were committing `` an anti-social act , '' about two-thirds of the motorists crossing the Golden Gate were alone , compared with the normal 70 % rate . 
 And some commuters , relieved by the absence of gridlock , were planning to return to their old ways . 
 Garry Kasparov went to combat Sunday with the world 's most advanced chess computer and kicked it around -- symbolically , anyway -- like an old tin can . 
 Playing black in the first game , the human champion maneuvered Deep Thought , known for its attacking prowess , into a totally passive position . 
 Then he unleashed his own , unstoppable , attack . 
 And in the second game , with Mr. Kasparov advancing ferociously as white , D.T. offered feeble resistance and lost even faster . 
 Well , mankind can rest easier for now . 
 Though almost everybody at the playing site had been looking for the 26-year-old Soviet to beat the Pennsylvania-based computer , he gave the machine a far worse drubbing than many expected . 
 And when Mr. Kasparov strode into the playing hall , he called the outcome . 
 As if he were Iron Mike , about to enter the ring with a 98-pound weakling , he declared : `` I 'll be able to beat any computer for the next five years . '' 
 His strategy against D.T. was based on a thorough study of dozens of its games , he said , including its notorious whippings of the grandmasters Bent Larsen of Denmark and Robert Byrne of the U.S. Mr. Kasparov was underwhelmed . 
 `` The computer 's mind is too straight , too primitive , '' lacking the intuition and creativity needed to reach the top , he said . 
 The champion apparently was not worried at all about D.T. 's strong points . 
 Its chief builder , Taiwan-born Feng-hsiung Hsu , nicknamed his brainchild `` the Weasel '' for its tactical flair at wriggling out of horrible positions . 
 D.T. also has a prodigious and flawless memory , is utterly fearless , and could n't be distracted by the sexy nude sculptures spread around the playing hall , in the New York Academy of Art . 
 In fact , D.T. never left home , Carnegie Mellon University in Pittsburgh , but communicated with its human handlers by telephone link . 
 They conceded that the odds favored Mr. Kasparov , but they put their hope in D.T. 's recently enhanced capacity for examining positions -- up to a million per second , from 720,000 . 
 But the handlers mistakenly stuck with silicon chips ; they needed kryptonite . 
 This became apparent as game one , a Sicilian Defense by Mr. Kasparov , proceeded . 
 No human can examine millions of moves , but Mr. Kasparov , using his ineffably powerful brain , consistently found very good ones . 
 After eight moves by each side , the board was the same as in a game in which Nigel Short of Great Britain fought the champion to a draw in 1980 . 
 But the computer did n't play Mr. Short 's ninth move , a key pawn thrust , and its position deteriorated rapidly . 
 Instead of castling , a standard measure to safeguard the king , D.T. made a second-rate rook maneuver at move 13 ; then it put a knight offside on move 16 . 
 `` Only two classes of minds would think of this -- very weak human players , and computers , '' said Edmar Mednis , the expert commentator for the match , which was attended by hundreds of chess fans . 
 By move 21 , D.T. had fallen into a deep positional trap . 
 It allowed Mr. Kasparov to exchange his dark-squared bishop for one of D.T. 's knights . 
 Bishops usually are worth slightly more than knights , but in this case Mr. Kasparov was left with a very dangerous knight and D.T. 's surviving bishop was reduced to passivity . 
 Indeed , it looked more like a pawn , a `` tall pawn , '' as spectators snidely put it . 
 Consistently , D.T. was over-optimistic about its chances , which it continually sized up , in numerical form . 
 When most spectators thought its position hopeless , the computer thought it was only , in effect , one-half of a pawn down . 
 Such evaluations met with derision , and kept the machine from resigning as soon as humans would have -- prompting more derision . 
 While D.T. shuffled its king back and forth in a defensive crouch , Mr. Kasparov maneuvered the knight to a dominant outpost . 
 He also launched a kingside storm , sacrificing a pawn to denude D.T. 's king . 
 No amount of weasling could have saved this game for D.T. 
 A piece down , the computer resigned . 
 Now , with the crowd in the analysis room smelling figurative blood , the only question seemed to be how fast Mr. Kasparov could win game two . 
 With the advantage of playing white -LRB- which moves first -RRB- , Mr. Kasparov followed up cleverly against the computer 's defense , a Queen 's Gambit Accepted . 
 As early as move six , Mr. Kasparov deviated from a well-known sequence of moves , developing a knight instead of making a standard bishop attack against the computer 's advanced knight . 
 This left the computer with a broader range of plausible replies -- and it immediately blundered by moving a queenside pawn , to the neglect of kingside development . 
 `` In a new position just after the opening , a computer will have serious problems , '' Mr. Kasparov said later . 
 In such positions , he explained , `` you have to create something new , and the computer is n't able to do that right now . '' 
 After only 11 moves for each side , the computer 's position was shaky . 
 Greedily , it grabbed a pawn , at the cost of facing a brutal attack . 
 And when a defensive move was called for , D.T. passed up an obvious pawn move and instead exposed its queen to immediate tactical threats . 
 Mr. Kasparov remarked later that `` even a weak club player '' would have avoided the queen move . 
 Now , after only a dozen moves , spectators were looking for a mating combination . 
 On a demonstration board , emcee Shelby Lyman showed a quick kill initiated by a knight sacrifice ; no spectator refuted this line of play . 
 Mr. Kasparov 's continuation was slower but , in the end , just as deadly . 
 He won D.T. 's queen for two minor pieces and two pawns -- not enough compensation , in this position , to give the computer much hope . 
 In a hopeless position , the computer resigned rather than make its 37th move . 
 And Mr. Kasparov , to cheers and applause , marched back into the analysis room . 
 `` In both games I got exactly what I wanted , '' he said . 
 What he had demonstrated , he added , is that there 's more to chess than sheer calculation . 
 Undeterred , D.T. 's handlers vowed to press on . 
 Indeed , three of them will be building a successor machine for International Business Machines Corp . 
 Promises Feng-hsiung Hsu : `` In three years we 'll mount a better challenge . '' 
 Mr. Tannenbaum is a reporter in the Journal 's New York bureau . 
 Reaching for that extra bit of yield can be a big mistake -- especially if you do n't understand what you 're investing in . 
 Just ask Richard Blumenfeld , a New Jersey dentist who considers himself `` a reasonably sophisticated investor . '' 
 In May 1986 , Dr. Blumenfeld gave Merrill Lynch & Co. about $ 40,000 for a federally insured certificate of deposit offering an effective yield of more than 9 % . 
 `` It was a time when interest rates came down very rapidly , '' Dr. Blumenfeld recalls . 
 Yields on five-year CDs at major banks were averaging about 7.45 % , and 10-year Treasury notes were paying less than 8 % . 
 The CD seemed like a great deal . 
 But nearly 3 years later , Merrill says the investment is worth about $ 43,000 -- an amount that represents an annual return of just over 2 % on Dr. Blumenfeld 's $ 40,000 . 
 The problem is that the CD he bought for a retirement plan was n't a plain vanilla CD . 
 Instead , his Merrill broker put him in a zero-coupon CD , which is sold at a deep discount to its face value . 
 The difference between the price and the face value payable at maturity is the investor 's return . 
 More important , the CD was purchased on the secondary , or resale , market . 
 Because the CD had an effective yield of 13.4 % when it was issued in 1984 , and interest rates in general had declined sharply since then , part of the price Dr. Blumenfeld paid was a premium -- an additional amount on top of the CD 's base value plus accrued interest that represented the CD 's increased market value . 
 Now the thrift that issued the CD is insolvent , and Dr. Blumenfeld has learned to his surprise that the premium is n't insured under federal deposit insurance . 
 The tip-off came when he opened a recent Merrill Lynch statement and found that the CD 's `` estimated current market value '' had plummeted by $ 9,000 in a month . 
 Several phone calls and a visit to his broker 's office later , the dentist found out that the $ 9,000 drop represented the current value of the premium he paid when he bought the CD , and that the amount was n't insured . 
 `` This is one thing I was never aware of , '' he says . 
 He assumed that principal and interest were `` fully insured up to $ 100,000 , '' he adds . 
 Dr. Blumenfeld is n't unique . 
 Especially at times like these , when declining rates make it hard for investors to get yields they have come to expect , too many people chase the promise of above-market returns without fully appreciating the risk . 
 `` Yield greed often gets in the way of understanding things , '' says John Markese , research director of the American Association of Individual Investors , a Chicago-based educational group . 
 `` The biggest problem we have is that investors realize , after the fact , that they did n't understand what they were investing in . '' 
 Dr. Blumenfeld concedes he did n't fully understand what he was buying . 
 He says that he knew he was getting a zero-coupon CD and that he had previously invested in TIGRs -LRB- Treasury Income Growth Receipts -RRB- , a type of zero-coupon Treasury security sold by Merrill Lynch . 
 But he says he did n't understand he was buying the CD on the secondary market , and he contends his broker never fully explained the risks . 
 The broker , Thomas Beairsto of Merrill Lynch 's Morristown , N.J. , office , refuses to discuss the matter with a reporter , referring inquiries to Merrill Lynch officials in New York . 
 Those officials say there was full disclosure of the risks in a `` fact sheet '' sent to all CD investors with their confirmation of sale . 
 The fact sheet , dated April 1986 , says on page three : `` If the price paid for a CD purchased in the secondary market... is higher than the accreted value in the case of zero-coupon CDs , the difference... is not insured . 
 Computations involving zero-coupon CDs are more complicated and you should discuss any questions you may have with your financial consultant . '' 
 Dr. Blumenfeld says he does n't remember the paragraph about premiums in the fact sheet he received and did n't realize part of what he paid was a premium . 
 `` I assumed I was buying a CD as a CD , '' he says . 
 Nevertheless , Merrill Lynch has agreed that if the thrift that issued Dr. Blumenfeld 's CD , Peoples Heritage Federal Savings & Loan Association in Salina , Kan. , is liquidated and the CD terminated , the brokerage firm would cover the premium Dr. Blumenfeld paid . 
 -LRB- Federal deposit insurance would pay principal and interest accrued to the date of liquidation , to a maximum of $ 100,000 . -RRB- 
 `` It 's not a blanket commitment , it 's a case-by-case situation , '' says Albert Disposti , a managing director of Merrill Lynch Money Markets Inc . 
 `` There 's a question whether brokers at the time were fully aware '' of the risks . 
 `` We were n't sure that full disclosure , as we wanted it , was being made . '' 
 Merrill Lynch says it 's impossible to estimate how many investors are in Dr. Blumenfeld 's situation , although it says the firm has received only one other complaint about premiums on the secondary market in three years . 
 Merrill Lynch now provides credit rating information about the institutions whose CDs it sells , which it did n't provide in 1986 . 
 Zero-coupon CDs are only a small portion of the $ 1 trillion-plus in CDs outstanding , and those purchased on the secondary market are an even smaller part of the total . 
 Merrill Lynch estimates that fewer than 10 financial institutions currently issue zero-coupon CDs . 
 Still , there are several billion dollars of zero-coupon CDs with various maturities outstanding . 
 Because of the tax consequences of zero-coupon investments -- income tax is payable in the year interest is accrued , although interest is n't actually paid until maturity -- zero-coupon CDs are usually sold for tax-advantaged accounts to finance things like retirement and children 's education . 
 Most zero-coupon CDs are in maturities of six to nine years , and they usually double in value by maturity . 
 But investors who bought zero-coupon CDs in the secondary market are n't the only ones who may be surprised to learn the full amount of their investments is n't insured . 
 People who paid a premium for standard CDs purchased on the secondary market could also find that those premiums are n't insured if the institutions that issued the CDs failed . 
 However , those premiums are usually far smaller than on zero-coupon CDs , and the simpler pricing structure of a standard CD makes it more apparent when a premium is paid . 
 Whatever the case , a Merrill Lynch spokesman emphasizes , investors should n't have to worry about the uninsured premium issue , unless the bank or thrift that issued the CD is closed and its deposits paid off before maturity or transferred to another institution at a lower rate . 
 Dr. Blumenfeld says he 's satisfied that his problem has been resolved . 
 And he says he 's learned a lesson : `` You always have to watch out for yourself . 
 No one else will watch out for you . 
 Americans are drinking less , but young professionals from Australia to West Germany are rushing to buy premium-brand American vodka , brandy and other spirits . 
 In particular , many are snubbing the scotch preferred by their parents and opting for bourbon , the sweet firewater from the Kentucky countryside . 
 With U.S. liquor consumption declining steadily , many American producers are stepping up their marketing efforts abroad . 
 And those efforts are paying off : Spirits exports jumped more than 2 times to $ 157.2 million in 1988 from $ 59.8 million in 1983 , according to the Distilled Spirits Council of the U.S. , a trade group . 
 `` Spirits companies now view themselves as global marketers , '' says Michael Bellas , president of Beverage Marketing Corp. , a research and consulting firm . 
 `` If you want to be a player , you have to be in America , Europe and the Far East . 
 You must have world-class brands , a long-term perspective and deep pockets . '' 
 The internationalization of the industry has been hastened by foreign companies ' acquisitions of many U.S. producers . 
 In recent years , for example , Grand Metropolitan PLC of Britain acquired Heublein Inc. , while another British company , Guinness PLC , took over United Distillers Group and Schenley Industries Inc . 
 But the shift has also been fueled by necessity . 
 While premium-brand spirits like Smirnoff vodka and Jack Daniel 's whiskey are riding high in the U.S. , domestic spirits consumption fell 15 % to 141.1 million cases in 1988 from 166 million cases in 1979 . 
 In recent years , growth has come in the foreign markets . 
 U.S. brandy exports more than doubled last year to 360,000 proof gallons , a standard industry measure , according to Jobson Beverage Alcohol Group , an industry association . 
 Exports of rum surged 54 % to 814,000 proof gallons . 
 Mexico is the biggest importer of both rum and brandy from the U.S . 
 Japan , the world 's third-largest liquor market after the U.S. and Britain , helped American companies in April when it lowered its tax on imported spirits and levied a tax on many domestic products . 
 California wineries , benefiting from lowered trade barriers and federal marketing subsidies , are expanding aggressively into Japan , as well as Canada and Great Britain . 
 In Japan , the wineries are promoting their products ' Pacific roots and courting restaurant and hotel chefs , whose recommendations carry weight . 
 In Australia , Britain , Canada and Greece , Brown-Forman Corp. has increased its marketing of Southern Comfort Liqueur . 
 Using cinema , television and print ads , the company pitches Southern Comfort as a grand old drink of the antebellum American South . 
 The biggest foreign inroads , though , have been made by bourbon . 
 While U.S. makers of vodka , rum and other spirits compete against powerhouses abroad , trade agreements prohibit any other country from making bourbon . 
 -LRB- All bourbon comes from Kentucky , though Jack Daniel 's Tennessee whiskey often is counted as bourbon because of similarity of taste . -RRB- 
 Moreover , just as vodka has acquired an upscale image in the U.S. , bourbon has become fashionable in many foreign countries , a uniquely American product tied to frontier folklore . 
 How was the West won ? 
 With a six-shooter in one hand and bourbon in the other . 
 `` We imagine with bourbon the Wild West , Western motion pictures and gunmen appearing , '' says Kenji Kishimoto , vice president of Suntory International Corp. , a division of Suntory Ltd. , Japan 's largest liquor company . 
 Suntory distributes Brown-Forman bourbons in Japan . 
 Bourbon makes up just 1 % of world-wide spirits consumption , but it represented 57 % of U.S. liquor exports last year , according to Jobson ; no other category had more than 19 % . 
 Big U.S. distillers are fiercely vying for this market , which grew to $ 77 million last year from $ 33 million in 1987 , according to government figures . 
 Jim Beam Brands Co. , a division of American Brands Inc. , is the leading exporter of bourbon and produces 10 other types of liquor . 
 The company says it will increase its international advertising 35 % in 1990 , with bourbon representing most of that amount . 
 Guinness 's Schenley Industries unit has increased its TV advertising in Japan and has built partnerships with duty-free shops throughout Asia , enabling it to install prominent counter displays . 
 The company 's I.W. Harper brand is the leading bourbon in Japan , with 40 % of the market . 
 Bourbon exporters have succeeded in Japan where other industries have failed , avoiding cultural hitches in marketing and distribution by allying themselves with local agents . 
 Jim Beam Brands has a distribution partnership with Nikka Whiskey Co. , a distiller . 
 Seagram Co. , which exports Four Roses bourbon , has such a link with Kirin Brewery Co . 
 Some bourbon makers advertise abroad as they do at home . 
 To promote Jack Daniel 's overseas , Brown-Forman uses the same photos of front porches from Lynchburg , Va. , and avuncular old men in overalls and hightops . 
 Jim Beam print ads , however , strike different chords in different countries . 
 In Australia , land of the outback , a snapshot of Jim Beam lies on a strip of hand-tooled leather . 
 West Germans get glitz , with bourbon in the foreground and a posh Beverly Hills hotel in the background . 
 Ads for England are artsy and irreverent . 
 One ad features a huge robot carrying a voluptuous woman in a faint . 
 The tagline : `` I only asked if she wanted a Jim Beam . 
 Capital Inc. 's net income rose 29 % on a modest 9 % increase in revenue in the third quarter , mainly on strong advertising demand at its ABC television network operation . 
 Demand for ads also rose at the eight TV stations Capital Cities owns and at its 80%-owned ESPN sports cable channel . 
 The broadcast and publishing company reported net climbed to $ 80.8 million , or $ 4.56 a share , from $ 62.6 million , or $ 3.55 a share , in the year-earlier period . 
 Revenue reached $ 1.1 billion from $ 1.01 billion . 
 In New York Stock Exchange composite trading yesterday , Capital Cities closed at $ 558.50 , down $ 5 . 
 The broadcasting unit reported operating profit of $ 134.9 million , up 18 % from the year-earlier $ 114.3 million . 
 Publishing reported operating profit was $ 33.3 million , nearly flat with the year-before $ 33 million . 
 Revenue at the broadcasting unit , consisting of the network and stations , advanced 11 % , to $ 838 million from $ 752.9 million . 
 The publishing unit reported revenue edged up 2.6 % to $ 263.2 million from $ 256.6 million . 
 Chairman Thomas S. Murphy cited Capital Cities ' nine daily newspapers in explaining most of the gain . 
 The parent also publishes weeklies , shopping guides and specialty magazines . 
 For 1989 's first nine months , Capital Cities net income grew 23 % to $ 303.7 million , or $ 16.97 a share , from $ 246.9 million , or $ 14.43 a share . 
 Revenue eased 0.3 % to $ 3.45 billion from $ 3.46 billion . 
 Last week , ABC unseated General Electric Co. 's National Broadcasting Co. unit as the No. 1 network , as rated by A.C. Nielsen Co . 
 ABC has four shows in the top 10 , including the top show , `` Roseanne . 
 As part of a previously announced transaction , Federal Mogul Corp. has bought approximately 565,000 shares of its common stock from Nortek Inc. at $ 23.50 a share . 
 Nortek has agreed not to acquire any securities of Federal-Mogul for 10 years and not to influence company affairs during that period . 
 Weyerhaeuser Co. said it sold its wall-paneling business to an affiliate of one of Indonesia 's largest wood-products firms . 
 Terms of the transaction were n't disclosed . 
 Weyerhaeuser said its paneling business employs about 300 workers at two facilities in Chesapeake , Va. , and Hancock , Vt . 
 Manville Corp. said it will build a $ 24 million power plant to provide electricity to its Igaras pulp and paper mill in Brazil . 
 The company said the plant will ensure that it has adequate energy for the mill and will reduce the mill 's energy costs . 
 Manville said it expects the plant to begin operating at the end of 1991 . 
 Housing and Urban Development Secretary Jack Kemp called on the Federal Reserve System to lower interest rates . 
 In a speech to the Mortgage Bankers Association , Mr. Kemp broke the administration 's public silence on the Fed and complained that `` interest rates are too high . '' 
 `` I am convinced that a monetary policy for this country that would return interest rates to the historical level of 4 % or 5 % would have not only an immediate impact on housing starts , the housing stock , our industry in America , the refurbishing of our industrial system , it would help the Third World economies considerably and it would particularly have a favorable impact upon our budget deficit , '' Mr. Kemp said . 
 The Fed recently eased credit by lowering the bellwether federal funds interest rate to 8 % from about 9 % . 
 Bush administration officials say inflation is under control . 
 With economic growth slowing , they say they believe the Fed should ease credit even further . 
 But for the most part , officials have avoided expressing those views in public , fearing they would unnecessarily antagonize the Fed . 
 McDonald 's Corp. said third-quarter earnings rose 14 % on a hefty sales gain , but domestic franchisees apparently did n't partake of the improvement . 
 The world 's largest fast-food chain said net income rose to $ 217.9 million , or 59 cents a share , from $ 191.3 million , or 51 cents a share , a year ago . 
 In the latest period , the company had an average of 370.8 million shares , 5.6 million shares below last year 's level . 
 Revenue rose 12 % to $ 1.63 billion from $ 1.46 billion . 
 Systemwide sales , which include sales at franchisee as well as company-owned stores , totaled $ 4.59 billion compared with $ 4.2 billion . 
 But sales for U.S. franchisees were flat at best on a per-store basis despite weak 1988 figures . 
 Compared with the first nine months of last year , average franchisee store sales this year were down nearly $ 3,200 , reflecting a fierce discounting war among fast-food chains . 
 Since McDonald 's menu prices rose this year , the actual decline may have been more . 
 McDonald 's closed at $ 31.375 , up $ 1 , in New York Stock Exchange composite trading yesterday . 
 While franchisees were having a tough time holding sales , McDonald 's company-operated stores posted hefty gains for the nine months , with sales per company-operated unit rising $ 20,000 . 
 One analyst noted that the company often has better store locations than do its franchisees , thus aiding promotional efforts . 
 On average in the latest nine months , company-operated units in the U.S. had $ 90,552 more in sales than did franchised outlets . 
 There are more than three times as many franchised domestic outlets as there are company stores . 
 Profit margins at U.S. company-owned stores in the quarter were up nearly 1 % , which the company attributed in part to lower food costs . 
 Prudential-Bache Securities analyst Leslie Steppel said reduced labor costs helped boost margins , although she doubted `` that kind of performance is sustainable . '' 
 Calling sales `` still relatively soft , '' Ms. Steppel believes that in real terms , U.S. sales slipped 3 % to 4 % at company-operated stores in the quarter . 
 Apparently acknowledging weaker U.S. sales systemwide , McDonald 's vowed `` to use our size and muscle to do all that is necessary to build the brand . '' 
 Overseas , both franchisees and the company performed substantially better than a year ago . 
 Third-quarter sales in Europe were exceptionally strong , boosted by promotional programs and new products -- although weaker foreign currencies reduced the company 's earnings . 
 McDonald 's said that systemwide sales would have been $ 115 million greater had 1988 exchange rates remained in effect . 
 `` Going into the fourth quarter the sales comparison will be more difficult , '' predicted restaurant analyst Howard Hansen of Kidder , Peabody & Co . 
 Reflecting better growth prospects abroad , McDonald 's noted that as of Sept. 30 more stores were under construction overseas than a year ago , while the opposite was true for domestic expansion . 
 At the end of the third quarter McDonald 's had 10,873 units operating world-wide . 
 In the nine months , earnings rose 12 % to $ 555.6 million , or $ 1.49 a share , from $ 494.4 million , or $ 1.31 a share , a year earlier . 
 Revenue rose 11 % to $ 4.56 billion from $ 4.12 billion . 
 Carnival Cruise Lines Inc. 's common stock was dragged down yesterday amid concerns that a bankruptcy filing by a Finnish shipbuilder would delay delivery of three big cruise ships . 
 The Miami-based company 's stock fell $ 1.75 yesterday to $ 20.75 a share in heavy American Stock Exchange composite trading . 
 Early yesterday , Carnival said in a company statement that it had been `` notified unofficially '' that Waertsilae Marine Industries , the Finnish shipyard that is building its three new cruise ships , planned to file for bankruptcy . 
 Officials at Carnival declined to comment . 
 `` There is just a tremendous amount of uncertainty about what the effect , if any , of all this is , '' said John P. Uphoff , an analyst at Raymond James Associates Inc . 
 `` I did n't even know that a company in a socialistic country could file for bankruptcy . '' 
 Carnival said the `` Fantasy , '' the first of the three $ 200 million ships that Carnival has on order , is scheduled to be delivered next month , just in time for the winter tourist season in the Caribbean . 
 That ship , which would carry about 2,050 passengers , would expand the capacity of Carnival 's existing 14-ship fleet by 24 % . 
 The second ship , which is half-completed , is scheduled to be delivered in fall 1990 , and the third in fall 1991 . 
 `` There 's a 99 % chance that the Fantasy will be delivered close to schedule , '' said Caroline Levy , an analyst at Shearson Lehman Hutton Inc . 
 `` The others will probably be delivered as well , but Carnival will likely have to pay a higher price for them . '' 
 She said the company could pay as much as 25 % more for the ships . 
 If the ships are n't delivered , however , it will likely have an effect on the company 's earnings as soon as the 1990 fiscal year , which begins Dec. 1 . 
 Analysts said those estimates -- which range from about $ 1.80 a share to $ 1.95 a share -- are based on Fantasy being in operation in 1990 . 
 If the ship fails to arrive , those per-share earnings estimates could be trimmed 15 cents or more . 
 Analysts were n't willing to speculate on how much money Carnival might lose through deposits . 
 Normally , a company pays a portion of the total cost of a ship as it reaches various stages of construction . 
 Carnival , for example , has already paid about $ 160 million of the total cost for Fantasy . 
 Some analysts say this may give it the right to seize the ship if the situation warrants it . 
 According to reports from Finland , Waertsilae Marine , 19%-owned by conglomerate Oy Waertsilae , filed for bankruptcy yesterday after the shipyard 's contractors had started to demand bank guarantees . 
 The shipyard disclosed in mid-August that it expected losses stemming from a series of unprofitable orders . 
 Designer Sandra Garratt filed for Chapter 7 Bankruptcy Code protection , saying that her cash flow had been cut off . 
 The designer , whose line of modular , one-size-fits-all clothing has spawned a host of clones , has been in a dispute with her latest licensee , Jerell Inc. for several months . 
 Ms. Garratt was the subject of a Wall Street Journal article in March . 
 The designer 's attorney , Molly Bartholow , said that Ms. Garratt was forced to start bankruptcy-law proceedings because Jerell began withholding her royalty payments last month . 
 Jerell paid Ms. Garratt royalties for the line known as Multiples by Sandra Garratt , which are sold primarily through department stores . 
 Ms. Garratt sued the Dallas apparel maker earlier this year , charging that Jerell developed and marketed clothing lines fashioned after her designs , in violation of their contract . 
 That lawsuit is still pending . 
 Jerell could n't immediately be reached for comment . 
 Ms. Garratt 's assets and liabilities were n't disclosed . 
 Eaton Corp. had a 26 % drop in third-quarter profit mainly because of lower sales of truck parts , its largest and most profitable single business . 
 Sales of medium and heavy-duty trucks continue to lag previous-year rates , leading Eaton to expect fourth-quarter net income to fall below year-earlier levels , said Stephen R. Hardis , vice chairman and chief financial and administrative officer . 
 He declined to make a specific earnings estimate . 
 Third-quarter net was $ 40 million , or $ 1.04 a share , from $ 54.4 million , or $ 1.47 a share , a year ago . 
 Sales rose 2.8 % to $ 864.1 million , from $ 840.4 million . 
 The quarter net was below analyst expectations mainly because truck-parts sales did n't rebound in September from the summer doldrums as they usually do , said Patrick E. Sheridan , analyst with McDonald & Co . 
 Mr. Sheridan , who had been expecting quarter profit of about $ 1.25 a share , says he is reducing his estimate for the year to the area of $ 5.70 a share , from his previous estimate of $ 6.10 . 
 Eli Lustgarten of PaineWebber Inc. , who a couple of weeks ago reduced his 1989 estimate to $ 5.70 a share because of the weakening truck market , says he will make another cut to about $ 5.50 a share in light of the third-quarter report . 
 He said Eaton 's quarter profit margin on controls was lower than he anticipated . 
 Eaton said sales of truck axles , transmissions and other parts fell 7.2 % to $ 295 million . 
 Sales of parts for cars and construction vehicles rose . 
 Eaton does n't provide profit figures separately for each category , but operating profit for vehicle parts as a group fell 26 % to $ 51 million on an about 1 % drop in sales to $ 488 million . 
 Mr. Hardis said truck-fleet operators appear to be cautious about buying new trucks until they see how the economy behaves . 
 The truck sales slowdown reflects the general slowing in sales of consumer goods , he said , and the latest reports show a slight improvement rather than any indication of a downward spiral . 
 Operating profit from electrical and electronics controls , Eaton 's other major business group , fell 11 % to $ 32 million , despite a 7.7 % increase in sales to $ 376 million . 
 The company attributed the decline to weakness in the commercial-switch market in North America and in the European appliance-controls market . 
 For the nine months , net -- including profit from discontinued operations both years and in 1988 an extraordinary charge of $ 17.7 million related to settlement of a lawsuit -- was $ 170.6 million , or $ 4.54 a share , up 5.8 % from $ 161.3 million , or $ 4.32 a share , a year ago . 
 Eaton earned from continuing operations $ 165.1 million , or $ 4.40 a share , down 7 % from $ 177.5 million , or $ 4.76 a share , a year earlier . 
 Nine-month sales were $ 2.79 billion , up 8.2 % from $ 2.58 billion a year earlier . 
 In New York Stock Exchange composite trading , Eaton closed at $ 57.50 a share , down $ 2.50 . 
 In Poland 's rapid shift from socialism to an undefined alternative , environmental issues have become a cutting edge of broader movements to restructure the economy , cut cumbersome bureaucracies , and democratize local politics . 
 Initial steps were taken at Poland 's first international environmental conference , which I attended last month . 
 The conference , held in Lower Silesia , was co-sponsored by the Environment Ministry , the Rockefeller Brothers Fund , and the Polish Ecological Club , and was attended by 50 Poles from government and industry , as well as Hungarians , Czechs , Russians , Japanese and Americans . 
 The conference was entitled `` Economic Mechanisms for Environmental Protection , '' a significant departure from East Bloc usage , which recognizes only one economic mechanism -- central planning -- to direct industrial behavior . 
 Even more remarkably , it focused on emissions trading and similar market approaches to address pollution , notwithstanding Poland 's lack of functioning markets . 
 Why did East Bloc participants unanimously endorse market-based pollution approaches ? 
 The answer lies both in the degraded environment of these countries and the perceived causes of that degradation . 
 Like other East Bloc countries , Poland possesses environmental laws more honored in their breach than in their observance . 
 According to a detailed report by Zbigniew Bochniarz of the University of Minnesota 's Hubert Humphrey Institute , 27 areas containing a third of Poland 's population are regarded as `` ecological hazards '' due to multiple violations of standards . 
 Norms are consistently exceeded at 60 % of nitrogen oxide monitoring sites and 80 % of those for dust and soot emissions . 
 Four-fifths of Poland 's soils have become highly acidified ; 70 % of its southern forests are projected to die by century 's end . 
 Between 1965 and 1985 , Polish waters fit for human consumption dropped from 33 % to 6 % of all surface waters , while those unfit even for industry use nearly doubled . 
 Poland produces about 20 times more soot and five times more sulfur dioxide and solid waste per unit of gross national product than does Western Europe . 
 Its mortality rate for males over 35 is about 50 % higher than West Germany 's , and 50 % higher in hazard areas than the national average . 
 Since 1978 , average annual growth rates for most pollutants have outstripped the growth of GNP . 
 Conference participants saw these effects as flowing directly from -LRB- a -RRB- Marxist devaluation of environmental resources , which are not produced by labor ; -LRB- b -RRB- planned economies ' inability to control pollution where enterprises are state-owned and penalties are paid by the government ; and -LRB- c -RRB- the continuing Stalinist emphasis on heavy industry for economic development , producing a far heavier and more wasteful use of energy and natural resources than in the West . 
 They repeatedly noted that environmental progress could not be secured without true ownership , genuine competition based on market factors , and the risk of bankruptcy if a business makes the wrong decisions . 
 The solutions they formally proposed included taxes , conservation and recycling incentives , reforestation offsets , transferable pollution permits , an ecological bank to finance pollution-reduction credits , and debt-for-environment swaps . 
 But their most fundamental recommendation was to separate industry from the state , making it fully accountable for pollution control . 
 A revolution takes more than conference manifestos . 
 Indeed , skepticism was amply captured by a joke told by Poles at the conference : `` The world must be coming to an end . 
 The Russians are talking peace . 
 The Palestinians are talking elections . 
 And the Poles are engaged in commerce . '' 
 But the implications of such a shift to market approaches go well beyond the fact that Poland is already working on nationwide emissions trades to reduce smelter pollution , or that the Soviets plan to introduce marketable pollution permits in some republics next year . 
 Those implications include : -- Privatization 
 Faced with a $ 40 billion foreign debt and skyrocketing inflation , Poland must privatize industry and eliminate subsidies to stabilize its currency and qualify for international assistance . 
 Market-based pollution control may consume some capital that would otherwise purchase state industries . 
 But it could also accelerate `` marketization '' by reinforcing industrial accountability , breaking up state monopolies , giving managers a stake in solutions , and ensuring that modernization is not reversible for failure to address environmental effects . 
 -- Least-cost solutions . 
 As conferees noted , scarce capital means the costs of control must be minimized through a broad menu of compliance choices for individual firms . 
 That means simple , clear rules that secure the first large blocks of reduction , deferring more complex issues such as risk . 
 It also means use of quantity-based pollution limits such as transferable permits , rather than price-based limits such as effluent fees . 
 That 's because quota-trained managers will likely respond better to quantity than to price signals . 
 -- Creative financing . 
 Even least-cost environmental solutions will require billions of dollars . 
 New types of financing must make funds available without draining Poland 's hard-currency reserves . 
 -- Democratization . 
 East Bloc pollution data typically have been state secrets . 
 While Polish data have been freely available since 1980 , it was no accident that participants urged the free flow of information . 
 For once information flows , public participation follows and repression becomes difficult to reimpose . 
 -- Global reciprocity . 
 One participant prematurely declared that America has had a free market in goods but a planned economy for environmental protection , while Poland represents the opposite . 
 His point : It will be increasingly difficult for the U.S. to cling to command-and-control measures if even the East Bloc steps to a different drummer . 
 At the moment , Poland resembles 19th-century Pittsburgh more than a modern industrial society -- with antiquated production , inadequate environmental management , and little ecological awareness . 
 But the continuing pressures for free-market economics suggest the conference 's vision was not all fantasy . 
 Mr. Levin , former head of EPA 's regulatory reform staff , adapted this from his November column for the Journal of the Air and Waste Management Association . 
 Disappointing earnings news from some technology companies unnerved investors in the over-the-counter market , who sold shares of Apple Computer , Intel and many other computer-related concerns . 
 The drop in those and other technology stocks contributed to an 0.7 % slide by the Nasdaq composite index . 
 It finished at 467.22 , down 3.45 . 
 The nervousness about the technology stock outlook also hurt the Dow Jones Industrial Average , which slipped about 1 % . 
 Mostly because of the sell-off in technology stocks , the Nasdaq 100 Index of the OTC 's largest non-financial issues dropped 4.58 to 457.52 . 
 The Nasdaq Financial Index of giant insurance and banking issues lost 2.38 to 458.32 . 
 Some traders said the sell-off of technology stocks on low volume reflected a lack of conviction by investors . 
 But Charlie Howley , vice president in charge of OTC trading at SoundView Financial in Stamford , Conn. , said the selling was orderly . 
 `` It 's a quiet retreat , '' said Mr. Howley . 
 `` It 's nothing dramatic , just a routine sell-off . '' 
 Some of it was due to lower-than-expected earnings from leading companies , he said . 
 But some of it also represented profit-taking by investors who have made big gains in some issues . 
 Yesterday 's volume of 117.2 million shares was far below last week 's sizzling average of nearly 177 million . 
 For October so far , daily volume is averaging 150.3 million , putting it on track to be the year 's busiest month . 
 Apple Computer , which reported lackluster earnings Friday , lost 1 to 46 on 1.1 million shares . 
 Stratus Computer , which reported earnings late Friday that were in line with a disappointing forecast , eased to 24 on 816,000 shares . 
 Investors apparently did n't like the news from Rainbow Technologies either . 
 It said net income was 17 cents a share in the third quarter , compared with 16 cents a share a year earlier . 
 Rainbow 's stock dropped 2 to 14 . 
 Other technology stocks that were weaker included Intel , which fell 1 to 33 on 1.9 million shares , Mentor Graphics , down to 16 on 1.6 million shares , Sun Microsystems , which slipped to 18 , and MCI Communications , down 1 to 42 . 
 Microsoft , which last week rose to a record , fell victim to profit-taking , traders said , as it declined 2 to 83 . 
 Conner Peripherals was unchanged at 15 . 
 Among takeover stocks , Jefferson Smurfit jumped 1 to 42 after SIBV-MS Holdings said the price to be paid to Jefferson Smurfit 's minority holders has been raised to $ 43 a share . 
 The increase of $ 1.25 a share is being made to settle shareholder litigation relating to SIBV-MS 's tender offer . 
 SIBV-MS Holdings is a new company jointly owned by an affiliate of Jefferson Smurfit and a Morgan Stanley limited partnership . 
 The Jefferson Smurfit affiliate , Smurfit International B.V. , holds about 78 % of the shares outstanding . 
 These shares will be bought by SIBV-MS Holdings at $ 41.75 each after the acquisition of the minority shares . 
 Another takeover target , LIN Broadcasting , eased to 110 on 313,800 shares . 
 LIN 's suitor , McCaw Cellular Communications , dropped 1 to 40 on almost 350,000 shares . 
 Some analysts say investors will begin paying more attention to earnings , partly in response to the latest round of disappointments . 
 They say investors will favor companies that historically have posted annual earnings growth of 15 % to 20 % . 
 That would be good news for the OTC market , some analysts say , because many small growth stocks are traded there . 
 Michael R. Weisberg , partner in charge of research at Robertson Stephens & Co. in San Francisco , said some investors have already made the switch . 
 The Robertson Stephens Index of 340 emerging growth stocks is up 23.1 % for the year through Friday . 
 The rise matches that of the Dow Jones industrials this year . 
 `` It 's been a spectacular year for the emerging growth stock investor , '' Mr. Weisberg said . 
 He predicted that the most popular growth companies will be those with `` some kind of unique product or franchise '' that makes them appear able to sustain their momentum . 
 He puts the OTC market 's Nellcor , Office Club and BizMart on the list . 
 Nellcor , a maker of electronic patient monitoring systems , was up to 16 on 258,000 shares yesterday , while retailing issue Office Club was unchanged at 10 on 65,200 shares . 
 BizMart , another retailing stock , was off to 8 on nearly 80,000 shares . 
 Other favorites of growth-stock analysts and money managers also had a mixed session . 
 Payco American , a credit collection concern , jumped 1 to 20 on volume of 93,000 , and Mail Boxes Etc. , a private postal services company , advanced to 23 on volume of 64,000 . 
 But Legent , a systems software stock , was down to 29 on 39,300 shares . 
 Novell , a computer networking concern , fell 1 to 30 on 152,000 shares . 
 Elsewhere , Valley National continued its slide , dropping 2 to 15 on 1.7 million shares . 
 The Arizona banking concern is facing difficulties related to weakness in the real estate market in the state . 
 Higher earnings helped some issues . 
 Amgen rose 2 to 54 on almost 800,000 shares , and CVB Financial jumped 4 to 41 on only 1,000 shares . 
 Why ca n't we teach our children to read , write and reckon ? 
 It 's not that we do n't know how to , because we do . 
 It 's that we do n't want to . 
 And the reason we do n't want to is that effective education would require us to relinquish some cherished metaphysical beliefs about human nature in general and the human nature of young people in particular , as well as to violate some cherished vested interests . 
 These beliefs so dominate our educational establishment , our media , our politicians , and even our parents that it seems almost blasphemous to challenge them . 
 Here is an example . 
 If I were to ask a sample of American parents , `` Do you wish the elementary schools to encourage creativity in your children ? '' the near-unanimous answer would be , `` Yes , of course . '' 
 But what do we mean , specifically , by `` creativity '' ? 
 No one can say . 
 In practice , it ends up being equated with a `` self-expression '' that encourages the youngsters ' `` self-esteem . '' 
 The result is a generation of young people whose ignorance and intellectual incompetence is matched only by their good opinion of themselves . 
 The whole notion of `` creativity '' in education was -LRB- and is -RRB- part and parcel of a romantic rebellion against disciplined instruction , which was -LRB- and is -RRB- regarded as `` authoritarian , '' a repression and frustration of the latent talents and the wonderful , if as yet undefined , potentialities inherent in the souls of all our children . 
 It is not surprising that parents find this romantic extravagance so attractive . 
 Fortunately , these same parents do want their children to get a decent education as traditionally understood , and they have enough common sense to know what that demands . 
 Their commitment to `` creativity '' can not survive adolescent illiteracy . 
 American education 's future will be determined by the degree to which we -- all of us -- allow this common sense to prevail over the illusions that we also share . 
 The education establishment will fight against common sense every inch of the way . 
 The reasons are complex , but one simple reason ought not to be underestimated . 
 `` Progressive education '' -LRB- as it was once called -RRB- is far more interesting and agreeable to teachers than is disciplined instruction . 
 It is nice for teachers to think they are engaged in `` personality development '' and even nicer to minimize those irksome tests with often disappointing results . 
 It also provides teachers with a superior self-definition as a `` profession , '' since they will have passed courses in educational psychology and educational philosophy . 
 I myself took such courses in college , thinking I might end up a schoolteacher . 
 They could all fairly be described as `` pap '' courses . 
 But it is unfair to dump on teachers , as distinct from the educational establishment . 
 I know many schoolteachers and , on the whole , they are seriously committed to conscientious teaching . 
 They may not be among the `` best and brightest '' of their generation -- there are very few such people , by definition . 
 But they need not be to do their jobs well . 
 Yes , we all can remember one or two truly inspiring teachers from our school days . 
 But our education proceeded at the hands of those others , who were merely competent and conscientious . 
 In this sense , a teacher can be compared to one 's family doctor . 
 If he were brilliant , he probably would not be a family doctor in the first place . 
 If he is competent and conscientious , he serves us well . 
 Our teachers are not an important factor in our educational crisis . 
 Whether they are or are not underpaid is a problem of equity ; it is not an educational problem . 
 It is silly libel on our teachers to think they would educate our children better if only they got a few thousand dollars a year more . 
 It is the kind of libel the teachers ' unions do n't mind spreading , for their own narrow purposes . 
 It is also the kind of libel politicians find useful , since it helps them strike a friendly posture on behalf of an important constituency . 
 But there is not one shred of evidence that , other things being equal , salary differentials result in educational differentials . 
 If there were such evidence , you can be sure you would have heard of it . 
 If we wish to be serious about American education , we know exactly what to do -- and , just as important , what not to do . 
 There are many successful schools scattered throughout this nation , some of them in the poorest of ghettos , and they are all sending us the same message . 
 Conversely , there are the majority of unsuccessful schools , and we know which efforts at educational reform are doomed beforehand . 
 We really do know all we need to know , if only we could assimilate this knowledge into our thinking . 
 In this respect , it would be helpful if our political leaders were mute , rather than eloquently `` concerned . '' 
 They are inevitably inclined to echo the conventional pap , since this is the least controversial option that is open to them . 
 Thus at the recent governors ' conference on education , Gov. Bill Clinton of Arkansas announced that `` this country needs a comprehensive child-development policy for children under five . '' 
 A comprehensive development policy for governors over 30 would seem to be a more pressing need . 
 What Gov. Clinton is advocating , in effect , is extending the educational system down to the pre-kindergarten years . 
 Whether desirable or not , this is a child-care program , not an educational program . 
 We know that very early exposure to schooling improves performance in the first grade , but afterward the difference is quickly washed away . 
 Let us sum up what we do know about education and about those education reforms that do work and do n't work : -- `` Parental involvement '' is a bad idea . 
 Parents are too likely to blame schools for the educational limitations of their children . 
 Parents should be involved with their children 's education at home , not in school . 
 They should see to it that their kids do n't play truant ; they should make certain that the children spend enough time doing homework ; they should scrutinize the report card . 
 If parents are dissatisfied with a school , they should have the option of switching to another . 
 -- `` Community involvement '' is an even worse idea . 
 Here , the experience of New York City is decisive . 
 Locally elected school boards , especially in our larger cities , become the prey of ambitious , generally corrupt , and invariably demagogic local politicians or would-be politicians . 
 New York is in the process of trying to disengage itself from a 20-year-old commitment to this system of school governance , even as Chicago and other cities are moving to institute it . 
 -- In most states , increasing expenditures on education , in our current circumstances , will probably make things worse , not better . 
 The reason is simple : Education takes place in the classroom , where the influence of money is minimal . 
 Decades of educational research tell us unequivocally that even smaller classes have zero effect on the academic performance of the pupils -- though they may sometimes be desirable for other reasons . 
 The new money flows into the already top-heavy administrative structure , which busies itself piling more and more paper work on the teachers . 
 There is neither mystery nor paradox in the fact that as educational expenditures -LRB- in real terms -RRB- have increased sharply in the past quarter-of-a-century -- we now spend more per pupil than any other country in the world -- educational performance has declined . 
 That is the way the system works . 
 -- Students should move up the educational ladder as their academic potential allows . 
 No student should be permitted to be graduated from elementary school without having mastered the 3 R 's at the level that prevailed 20 years ago . 
 This means `` tracking , '' whose main purpose is less to permit the gifted youngsters to flourish -LRB- though that is clearly desirable -RRB- than to ensure that the less gifted get the necessary grounding for further study or for entering the modern world of work . 
 The notion that tracking is somehow `` undemocratic '' is absurd . 
 The purpose of education is to encourage young men and women to realize their full academic potential . 
 No one in his right mind actually believes that we all have an equal academic potential . 
 -- It is generally desirable to use older textbooks -- many of them , alas , out of print -- rather than newer ones . 
 The latter are modish , trendy , often downright silly , and at best insubstantial . 
 They are based on dubious psychological and sociological theories rather than on educational experience . 
 One of the reasons American students do so poorly in math tests , as compared with British , French , German or Japanese students , is the influence of the `` New Math '' on American textbooks and teaching methods . 
 Anyone who wants to appreciate just how bizarre this situation is -- with students who ca n't add or subtract `` learning '' the conceptual basis of mathematical theory -- should read the article by Caleb Nelson -LRB- himself a recent math major at Harvard -RRB- in the November American Spectator . 
 -- Most important of all , schools should have principals with a large measure of authority over the faculty , the curriculum , and all matters of student discipline . 
 Study after study -- the most recent from the Brookings Institution -- tells us that the best schools are those that are free of outside interference and are governed by a powerful head . 
 With that authority , of course , goes an unambiguous accountability . 
 Schools that are structured in this way produce students with higher morale and superior academic performance . 
 This is a fact -- though , in view of all the feathers that are ruffled by this fact , it is not surprising that one hears so little about it . 
 Mr. Kristol , an American Enterprise Institute fellow , co-edits The Public Interest and publishes The National Interest . 
 International Business Machines Corp. unveiled a broad strategy to tackle the biggest problem that manufacturers face when computerizing their operations : Most machines ca n't talk to each other . 
 The company unveiled more than 50 products , mostly software , that are designed to integrate the three areas of a manufacturing operation -- the plant floor , design operations and production planning . 
 The aim , ultimately , is to increase the flow of information into a manufacturer 's main computer network for use in business planning , marketing and other operations . 
 Manufacturers have already spent so heavily on automation that they are one of the computer industry 's leading revenue sources . 
 But many manufacturers find that communication between different computers has been rendered nearly impossible by the babel of computer languages used by different machines , including robots and machine tools . 
 IBM 's announcement , which was expected and will formally be made to customers today , also marks an attempt to gain credibility on the plant floor , where Digital Equipment Corp. has long dominated and where Hewlett-Packard Co. has recently gained market share . 
 Consultants have said that it will take a while for all the pieces of the IBM strategy to fall into place , even though the specific products IBM unveiled will generally be available by the end of the first quarter . 
 Sam Albert , a consultant in Scarsdale , N.Y. , said that in the past IBM has developed broad software strategies only for problems that crossed industry lines . 
 He said he believes IBM 's decision to invest this sort of effort into a single industry showed that it was getting serious about understanding customers ' problems and was n't just selling technology . 
 He said he expects IBM to unveil similar strategies for other industries in coming months . 
 IBM 's push is also unusual in its approach to marketing . 
 Rather than just send out marketing people to knock on customers ' doors , IBM is making several hundred of its own manufacturing people available to discuss specific needs . 
 IBM 's manufacturing staff also will be able to provide software that IBM has developed internally and will be able to form teams with a customer to jointly solve manufacturing problems . 
 IBM can obviously bring its expertise to bear on problems related to computer manufacturing , but it could also help customers on software to deal with such things as changes in engineering documents . 
 `` We may not have every manufacturing problem , but we have most , '' said George Conrades , IBM 's top marketing official . 
 Japan 's Big Four securities firms posted first-half unconsolidated results that mirrored softer performance as a result of slower turnover on the Tokyo Stock Exchange during July and August . 
 Figures for the period ended Sept. 30 for the four largest brokerage firms -- Nomura Securities Co. , Daiwa Securities Co. , Yamaichi Securities Co. and Nikko Securities -- also reflected a changeover to a fiscal year ending March 31 , replacing the 12-month term formerly finishing Sept. 30 . 
 As a result , brokerage house officials said , appropriate comparisons from the same period a year earlier were unavailable . 
 Operating profit , pretax profit and net income results , however , were provided for the immediately preceding six-month period . 
 The statistics follow a year-on-year rebound in consolidated and unconsolidated results in the full fiscal year ended in March 1989 , recovering from dismal results in the prior fiscal year as a result of the October 1987 stock market crash . 
 Nomura said its pretax profits inched up 0.9 % to 248.91 billion yen -LRB- US$ 1.75 billion -RRB- from 246.60 billion yen in the six months ended March 31 . 
 Total operating profit fell 3.1 % to 486.1 billion yen from 501.61 billion yen . 
 Net income , however , rose 3.7 % to 107.87 billion yen from 103.98 billion yen . 
 Per-share net rose to 55.10 yen from 54.51 yen . 
 Daiwa said its pretax profits surged 9.6 % to 171.04 billion yen from 156.12 billion yen in the preceding six-month term . 
 Operating profit rose 5.5 % to 332.38 billion yen from 315.12 billion yen . 
 Net income jumped 21 % to 79.03 billion yen from 65.53 billion yen . 
 Per-share net rose to 62.04 yen from 51.50 yen . 
 Yamaichi said its pretax profit increased 8.9 % to 117.94 billion yen from 108.28 billion yen . 
 Operating profit rose 5.3 % to 279.75 billion yen from 265.79 billion yen . 
 Net income surged 21 % to 55.59 billion yen from 46.02 billion yen . 
 Per-share net rose to 47.46 yen from 39.31 yen . 
 Nikko 's pretax profit rose 1.6 % to 130.25 billion yen from 128.19 billion yen . 
 Operating profit rose 4 % to 293.29 billion yen from 282.08 billion yen . 
 Net income rose 23 % to 63.52 billion yen from 51.65 billion yen . 
 Per-share net rose to 44.08 yen from 36.13 yen . 
 Harken Energy Corp. of Dallas said it will drop its $ 11.75-a-share , or $ 190 million , offer for Tesoro Petroleum Corp. if the two companies do n't have an agreement to merge by Dec. 15 . 
 Harken , which made its offer in August , said it still is awaiting a response to its offer from Tesoro 's board . 
 Harken also said that its financing from Bankers Trust Co. has been extended until Dec. 15 to give Tesoro 's board time to consider the offer at a Tesoro board meeting scheduled for mid-November . 
 Harken , which owns about 800 retail gas stations , has said it is particularly interested in Tesoro 's refinery because it would fill a gap in its business . 
 However , Tesoro , based in Houston , already has rejected a suitor in the past year . 
 Francis D. John , 35-year-old president , will assume the additional job of chief executive officer . 
 He succeeds Paul J. Montle , 42 , who will remain chairman . 
 National Environmental also said it will move its headquarters from Hingham to Folcroft , Pa. , the site of its sludge dewatering facility . 
 National Environmental , formerly Yankee Cos. , is a sludge treatment company . 
 Eagle Clothes Inc. , which is operating under Chapter 11 of the federal Bankruptcy Code , said it reached an agreement with its creditors . 
 Under the accord , Albert Roth , chairman and chief executive officer , and Arthur Chase , Sam Beigel , and Louis Polsky will resign as officers and directors of the menswear retailer . 
 Mr. Roth , who has been on leave from his posts , will be succeeded by Geoffrie D. Lurie of GDL Management Inc. , which is Eagle 's crisis manager . 
 Mr. Lurie is currently co-chief executive . 
 Arnold Levine , acting co-chief executive , will continue as senior vice president and a board member . 
 Eagle also said it received a commitment for as much as $ 8 million in financing from Norfolk Capital Group Inc . 
 In addition , a Norfolk affiliate , York Capital Inc. , will purchase all of the interests of Eagle 's secured lenders , which total $ 11.5 million , and guarantee as much as $ 8.2 million in payments to Eagle 's unsecured creditors . 
 A committee representing the unsecured creditors agreed to accept 24 cents on the dollar , Eagle said . 
 The plan would extend the period under which Eagle has the exclusive right to file a reorganization plan . 
 It would extinguish all of Eagle 's existing capital stock and issue new stock to York as sole holder . 
 A bankruptcy court hearing is set for Nov. 3 on these accords . 
 In its bankruptcy-law petition , filed in U.S. Bankruptcy Court in Manhattan , Eagle said its problems began in 1987 and early 1988 when its then-senior lender , Bankers Trust Co. , reduced its credit line . 
 In September 1988 , Eagle acquired Biny Clothing Inc. , a closely held New York chain operated under the Bonds name . 
 Eagle 's management retired and Biny 's management took control of the company . 
 At the time , Eagle reached a new credit agreement with Bankers Trust and with Bank Leumi Trust Co. of New York for $ 8 million , and a new subordinated debt accord with First Century Partners and Biny management for $ 2 million . 
 But Eagle said the financing was insufficient and sales during the past fiscal year sagged . 
 Under Chapter 11 , a company operates under protection from creditors ' lawsuits while it works out a plan to pay debts . 
 Standard & Poor 's Corp. said it would add John H. Harland Co. , an Atlanta check printer , to its 500-stock index , effective at the close of trading on Wednesday . 
 American Medical International Inc. , a New York hospital operator , will be deleted from the index at that time . 
 American Medical is being acquired . 
 The tougher new regulations under the savings-and-loan bailout law are accelerating the thrift industry 's shrinking act . 
 Largely to meet tougher new capital requirements , thrifts reduced their assets $ 13.4 billion in August , by selling such assets as mortgage-backed securities and loans . 
 Industry assets as of Aug. 31 were $ 1.31 trillion , the lowest since August 1988 . 
 As thrifts sell assets to improve their capital-to-asset ratio , as required under the new law passed in August , they must also reduce liabilities , such as deposits . 
 As interest rates paid depositors were lowered , thrift withdrawals exceeded deposits by $ 5.1 billion , not including interest credited to accounts . 
 It was the third consecutive month in which thrifts shed assets to increase the size of their capital in relation to their assets , the Office of Thrift Supervision said . 
 The asset shrinkage was particularly concentrated in several large California institutions . 
 `` The downsizing of the thrift industry is well under way , '' said Bert Ely , an industry consultant in Alexandria , Va . 
 `` This suggests the bailout law is having a more dramatic effect than anyone would have imagined so soon . '' 
 James Barth , an economist with the Office of Thrift Supervision , also attributed some of the outflow to seasonal factors . 
 `` August is a month when people are paying school tuition , '' he said . 
 `` That and adjustment to the new law were the biggest factors in the industry . '' 
 Not including thrifts under government conservatorship , S&Ls reduced their assets by $ 10.1 billion from the previous month , and deposit outflows totaled $ 3.9 billion . 
 For the 264 insolvent thrifts under government management at the end of August , assets declined by $ 3.3 billion and withdrawals exceeded deposits by $ 1.2 billion . 
 Thrifts raised capital mostly by selling mortgages and mortgage-backed securities , which were reduced by $ 7.8 billion in August from the prior month . 
 As of Aug. 31 , thrifts held $ 185 billion in mortgage-backed securities . 
 The deposit numbers for August marked a swing back to huge outflows after a July net deposit inflow of $ 54 million -- the only net inflow in more than a year . 
 Deposits are n't expected to exceed withdrawals in the foreseeable future , as the industry continues to shrink . 
 `` I think we are going to see deposit shrinkage continue , unless we see big changes in rates , '' Mr. Ely said . 
 For the first eight months of 1989 , thrifts ' withdrawals exceeded deposits by $ 44.5 billion . 
 For the prior year , deposits exceeded withdrawals by $ 8.8 billion . 
 The estimates of real gross national product prepared by the Bureau of Economic Analysis in the Department of Commerce significantly understate the rate of economic growth . 
 Since the bureau 's estimates for the business sector provide the numerator for the productivity ratios calculated by the Department of Labor , underestimated growth rates artificially depress official productivity statistics . 
 If this thesis is correct , it has important implications for macroeconomic policies : It may lower the sense of urgency behind efforts to enact tax incentives and other measures to increase the rate of growth in productivity and real GNP . 
 It would also affect the perceptions of the board of governors of the Federal Reserve System , and the informed public generally , as to what constitutes a reasonable degree of price stability . 
 In the early 1980s , I predicted a significant acceleration in productivity growth over the rest of the decade . 
 This forecast was based on the apparent reversal of most of the negative forces -- such as demographic changes , the oil shock and accelerating inflation -- that had reduced productivity gains in the 1970s . 
 There has indeed been more than a one percentage point improvement in productivity growth since 1981 . 
 But I had expected more , which is one reason I began looking at evidence suggesting defects in the official output estimates . 
 The evidence does not clearly support the view that the downward bias in output growth has become greater during the 1948-89 period , but all I am claiming is that the growth trend is understated . 
 -LRB- It is , however , possible , that further study will reveal increasing bias . -RRB- 
 This bias is in no way deliberate . 
 The understatement of growth is due largely to the conservative expedients adopted to deal with deficiencies in basic economic data . 
 The first of three major sources of error is the use of labor input estimates -LRB- mainly employment or hours -RRB- instead of output estimates for those sectors , such as governments , paid household services and private non-profit institutions , where there are difficulties in assembling output data . 
 This means that no allowance is made for possible increases in output per unit of labor . 
 In an unrelated program in which the Labor Department does estimate output per employee for more than two-thirds of federal civilian employees , it found an average annual rate of productivity improvement of 1.7 % during the 1980s . 
 Even if it is assumed that productivity rose no more than half as quickly in the rest of the nonbusiness sector , this Labor Department estimate indicates a downward bias in the real GNP estimates of 0.2 percentage point a year , on average . 
 The federal productivity estimators use labor input , rather than output , data for their calculations of half of private financial and service industries as well . 
 Independent estimates of output in those industries , including one by the Department of Labor for banking , suggests that productivity in finance and services appears to have risen by an average of at least 1.5 % a year between 1948 and 1988 . 
 Because finance and services contribute 10 % to final business product , missing these productivity improvements depresses the overall growth rate by 0.15 % a year . 
 The second source of error in growth statistics is the use of inappropriate deflators to adjust for price changes . 
 I estimate that these mismeasurements as detailed by Martin N. Baily and Robert J. Gordon add a further 0.12 percentage point to the downward bias in the growth rate of real business product . 
 Finally , the official estimates understate growth because they make inadequate allowance for improvements in quality of goods and services . 
 In 1985 , a new price index for computers adjusted for changes in performance characteristics was introduced , and that resulted in a significantly larger increase in real outlays for durable goods than the earlier estimates had showed . 
 Since then , further research argues that failure to take account of quality improvements has contributed a total of at least 0.26 percentage point to the downward bias in the growth rate . 
 In sum , the biases ennumerated above indicate a 0.7 percentage point understatement in growth of total real GNP . 
 For the private domestic business economy , the bias was a bit over 0.5 percentage point . 
 In other words , the growth rates of both total GNP and real private business product per labor hour have been underestimated by about 20 % . 
 Mr. Kendrick is professor emeritus of economics at George Washington University . 
 He is co-author of `` Personal Productivity : How to Increase Your Satisfaction in Living '' -LRB- M.E. Sharp , 1988 -RRB- . 
 Union Carbide Corp. said third-quarter net income plunged 35 % from a year earlier on weakness in the company 's mainstay chemicals and plastics business . 
 Net was $ 139 million , or 98 cents a share , for the quarter , compared with $ 213 million , or $ 1.56 a share , a year ago . 
 Sales were $ 2.14 billion , up 1.6 % from $ 2.11 billion the previous year . 
 Carbide , like other companies with a heavy reliance on the so-called commodity end of the chemicals industry , was expected to post earnings sharply lower than in an exceptionally strong 1988 third quarter . 
 But the company 's latest quarter was a few pennies a share lower than the more pessimistic projections on Wall Street . 
 `` It certainly was n't a disaster , but it does show weakness '' in some of the company 's chief markets , said George Krug , a chemicals-industry analyst at Oppenheimer & Co . 
 In New York Stock Exchange composite trading , Carbide closed at $ 24.50 a share , down 50 cents . 
 Prices for polyethylene , a common plastic and an important Carbide product , started to fall early this year ; the slide accelerated in the third quarter as buyers continued to trim inventories . 
 Prices also fell for ethylene oxide and glycols , products used in making antifreeze . 
 Some producers of polyethylene , figuring the inventory reductions are near an end , have announced price boosts . 
 The first real test of whether prices have hit bottom may come in the next several weeks , when the new prices become effective . 
 A Carbide spokesman said `` the conditions are right for the increase to hold . '' 
 For the third quarter , operating profit from Carbide 's chemicals and plastics business fell to $ 238 million from $ 352 million a year ago , before accounting for taxes and interest expense . 
 Operating profit from carbon products , such as graphite electrodes , also declined , to $ 6 million from $ 20 million . 
 In the industrial-gases segment , operating profit climbed to $ 87 million from $ 58 million . 
 The latest quarter included a gain of about $ 62 million on the sale of the company 's urethane polyols and propylene glycols businesses . 
 Propylene glycols are used in making personal-care products such as shampoo , and urethane polyols are used in making the polyurethane foam found in furniture cushioning and other products . 
 That gain was mostly offset by a loss of about $ 55 million from a write-down in its polysilicon business . 
 Polysilicon is used in making integrated circuits . 
 For the nine months , net totaled $ 526 million , or $ 3.74 a share , up 5 % from $ 501 million , or $ 3.71 a share , a year ago . 
 Sales rose 7.7 % to $ 6.66 billion from $ 6.19 billion . 
 At least 10 states are resisting Drexel Burnham Lambert Inc. 's nationwide effort to settle its legal troubles , and some might instead try to revoke the firm 's license to sell securities within their borders . 
 The reluctance of some states to let Drexel off the hook could hamper the firm 's attempts to polish its image after its guilty plea to six felonies last month , say several people familiar with the discussions . 
 Up to now , Drexel has made a rapid-fire series of settlements with 25 states and the commonwealth of Puerto Rico . 
 Just yesterday , New Hampshire announced it made a $ 75,000 settlement with Drexel , a record-tying fine for a securities-law matter in that state . 
 These states have been entering into settlements with Drexel as part of the firm 's efforts to operate freely anywhere in the U.S. despite its record as an admitted felon . 
 But individuals familiar with the generally successful Drexel talks say the firm is meeting resistance from some big states , including New Jersey , New York , California , Pennsylvania , Connecticut and Missouri . 
 Officials in some of these states say they do n't want to simply accept the settlements offered by Drexel . 
 They question if Drexel is getting easier treatment than the many small penny-stock firms whose brokerage licenses are routinely revoked . 
 Drexel has to settle with state securities regulators in the wake of its criminal guilty plea and a related civil settlement with the Securities and Exchange Commission that includes payment of $ 650 million in penalties . 
 These stem from a two-year federal investigation of insider trading and securities fraud on Wall Street . 
 Ohio , the District of Columbia , Tennessee and Illinois have been less resistant to Drexel than the other six states , but nonetheless have refused to settle so far , say those familiar with the discussions . 
 Drexel says it does n't expect any of its state brokerage licenses will be revoked , and even if some are , its securities business would n't be directly hurt . 
 It already has sold its retail , or individual-investor , brokerage network ; securities firms do n't need brokerage licenses for non-retail activities such as investment banking . 
 Still , if nothing else , a revoked brokerage license could be a burden because it must be disclosed in many of the transactions in which Drexel could be involved . 
 Securities regulators praise Drexel for its energetic effort , led by government-approved general counsel Saul S. Cohen , to settle its legal problems with the states . 
 But they disagree about the message these settlements give to the public . 
 `` There was a lot of internal debate about that specific issue , '' said Susan Bryant , Oklahoma 's chief securities regulator and president of the North American Securities Administrators Association , which drafted a voluntary settlement plan for the states with Drexel . 
 The question , she said , is whether Drexel should be allowed to pay and move on , or `` whether you should -LRB- simply -RRB- revoke the license when someone is convicted of a felony . '' 
 While Ms. Bryant 's state went ahead and accepted Drexel 's settlement offer of $ 25,000 , she said : `` I do n't have any argument with those who came to different conclusions . 
 I can see both sides . '' 
 Similarly , Alfred Rubega , New Hampshire 's director of securities regulation , said his state had n't received any complaints about Drexel , so it really could n't press the issue . 
 Still , `` I understand the reasons '' that other states are holding out , he said . 
 Mr. Cohen , the Drexel general counsel , said , `` I do n't think , as we say in investment banking , that ` by the end of the day ' we 'll be losing any licenses . '' 
 Asked about states that are taking a hard line , he said , `` There are states that have asked for additional information , which we are providing to them . '' 
 Mr. Cohen said more than $ 2.8 million has been paid to 26 states and that Drexel still expects to pay out a total of $ 11.5 million . 
 By the end of this week , Drexel should have another three to four settlements , Mr. Cohen said . 
 `` The rate we 're going , I think that by the end of the month , we 're looking to have a total of 30 to 35 , '' he said . 
 That total would be important for Drexel . 
 The investment bank has previously announced that as part of its punishment it would create an independent foundation to promote ethical behavior in the securities industry . 
 A proviso to that promise is that a minimum of 35 states reach settlement agreements before next Tuesday . 
 There are , according to several securities commissioners , at least 16 states that are either close to settlements with Drexel or who do n't appear opposed to settling . 
 Drexel 's proposed state fines have been based on a state 's population and on the size of Drexel 's business in the state . 
 New Jersey , for example , was asked to accept $ 300,000 , but refused . 
 The state is n't ruling out revoking Drexel 's brokerage license . 
 The state can also bar Drexel as an investment adviser . 
 State officials wo n't describe their position in detail , but James McLelland Smith , state securities chief , said : `` We really are still looking at it and have informed -LRB- Drexel -RRB- that the proposal is really not sufficient for settlement . '' 
 Connecticut already has issued a `` notice of intent '' to revoke Drexel 's brokerage license . 
 It is one of the states that have met with Mr. Cohen and asked for additional information about investors ' accounts and other matters . 
 `` This particular issue goes to the very integrity of the capital-formation market , '' state Banking Commissioner Howard Brown said . 
 A banking department spokesman added : `` Commissioner Brown does n't feel that money alone is the issue here . '' 
 Particularly touchy are the cases of New York , which is Drexel 's base , and California , the base of Drexel 's highly profitable junk-bond operation that led to the firm 's legal difficulties . 
 Neither state has settled , and officials in the two states wo n't discuss their reasons for not doing so . 
 But Drexel has made it clear it could mount a significant legal battle in each state if its license is revoked , according to state officials . 
 Ms. Bryant , the head of the state securities group , said Drexel has done a better job of settling with the states than E.F. Hutton did after its guilty plea to a massive check-kiting scheme several years ago . 
 Still , she said , Drexel 's trouble with some states is n't a bad thing . 
 `` This process should point out that it 's not going to be easy for a firm that 's convicted of a felony to immediately jump back into the retail business , '' Ms. Bryant said . 
 `` We need to have somebody worried so they do n't do this again . '' 
 These are the 26 states , including the commonwealth of Puerto Rico , that have settled with Drexel : Alaska , Arkansas , Delaware , Georgia , Hawaii , Idaho , Indiana , Iowa , Kansas , Kentucky , Maine , Maryland , Minnesota , Mississippi , New Hampshire , New Mexico , North Dakota , Oklahoma , Oregon , South Carolina , South Dakota , Utah , Vermont , Washington , Wyoming and Puerto Rico . 
 Time Warner Inc. reported a third-quarter net loss of $ 176 million , or $ 2.88 cents a share , reflecting acquisition costs for a 59.3 % stake in Warner Communications Inc. and the purchase method of accounting for the transaction . 
 Separately , Warner reported a net loss of $ 106 million , or 56 cents a share , including merger expenses of $ 100 million and $ 120 million in charges associated with stock-appreciation-based compensation plans . 
 Time Warner is in the process of completing its acquisition of the remaining Warner shares . 
 Time Warner emphasized in a news release that it should be evaluated based on its cash flow , which the company defined as earnings before interest , taxes , depreciation and amortization . 
 On a pro-forma basis , assuming the merger was effective Jan 1 , 1988 , including the results from both Time Inc. and all of Warner , that cash flow figure would be $ 526 million for the latest quarter , more than double the comparable figure a year ago , or $ 242 million , according to Time Warner . 
 Some analysts at least are buying that argument , and were n't alarmed by the losses . 
 `` What really matters is the operating income of the divisions : I look at these numbers and I say , these businesses are doing well , '' said Mark Manson , a vice president of Donaldson , Lufkin & Jenrette Securities Corp . 
 `` For example , Warner made more than $ 100 million from filmed entertainment in three months . 
 That 's a big number . 
 Warner also had a gain of more than 13 % from records and music publishing , even though the domestic record business was sluggish this summer . '' 
 In the year-ago third quarter , Time on its own reported net income of $ 81 million , or $ 1.42 a share . 
 Combined revenue for the latest quarter of Time Warner was $ 2.2 billion , compared with the year-ago Time revenue of $ 1.1 billion . 
 On a pro forma basis , including all of Warner 's earnings , Time Warner had a third-quarter loss of $ 217 million , compared with a $ 342 million loss a year earlier . 
 On the same basis , revenue rose to $ 2.7 billion from $ 2.2 billion . 
 For the third quarter , Warner 's $ 106 million loss compared with a year-ago loss of $ 113 million , or 90 cents a share . 
 Revenue rose to $ 1.5 billion from $ 1.1 billion . 
 The 1988 figures were restated to include the results of Lorimar Telepictures Corp. , which Warner acquired in January . 
 Time Warner 's operating earnings got a boost from Warner 's record box-office results . 
 `` Batman '' alone has racked up more than $ 247 million in box-office receipts to date , making it Warner Bros . ' largest grossing film ever . 
 `` Lethal Weapon II '' was also a big hit . 
 Warner also contributed record results from its music business , where unit sales of compact discs rose more than 50 % from a year ago , the company said , helped by Prince 's `` Batman '' soundtrack . 
 Time Warner said its cable division turned in a 77 % increase in operating cash flow , to $ 166 million from $ 94 million , reflecting higher per-subscriber revenue . 
 In addition , the 1988 results included a $ 20 million charge reflecting a reserve for relocation related expenses at American Television & Communications Corp . 
 On the other hand , Time Warner said its operating cash flow declined in the quarter for its magazine division , its books division and the Home Box Office programming division . 
 In magazines , higher advertising revenues at Sports Illustrated and Fortune were offset by lower ad revenue for other major magazines . 
 The programming division saw a decline in operating cash flow because the year-ago quarter included a $ 12 million dividend from Turner Broadcasting System and because the quarter includes expenses associated with the Nov. 15 launch of HBO 's Comedy Channel . 
 In New York Stock Exchange composite trading , Time Warner closed at $ 138.625 a share , up $ 1.875 , while Warner closed at $ 63.875 a share , up 12.5 cents . 
 Robert J. Penn , president and chief executive officer , will take early retirement from this steelmaker Dec 31 . 
 William S. Leavitt , chairman , said Mr. Penn , 58 years old , would continue as a consultant and would work with the board in selecting a successor . 
 UNR recently emerged from bankruptcy-law proceedings that left 64 % of the reorganized company 's common stock in the hands of trustees of an asbestos-disease claims trust . 
 The company said it would have no further comment . 
 Mr. Leavitt , 37 , was elected chairman earlier this year by the company 's new board , having served as vice president for legal and corporate affairs . 
 His father , David S. Leavitt , was chairman and chief executive until his death in an accident five years ago , at which time Mr. Penn was named president . 
 Some House Democrats are trying to head off an appointment by President Bush to the board that oversees the savings-and-loan bailout , contending that the prospective nominee is the head of troubled banks himself . 
 Four Democrats on the House Banking Committee sent President Bush a letter stating their concerns about the expected appointment of James Simmons , an Arizona banker and former fund-raiser for Mr. Bush , to the Oversight Board of the Resolution Trust Corp . 
 The Oversight Board , created in the savings-and-loan law signed in August , sets policy for the RTC , which will sell hundreds of the nation 's sick thrifts and billions of dollars of their assets . 
 Treasury Secretary Nicholas Brady , Federal Reserve Board Chairman Alan Greenspan and Housing and Urban Development Secretary Jack Kemp are members of the board . 
 President Bush must appoint two other members , one a Democrat and one a Republican . 
 An administration official confirmed last week that Mr. Simmons , the chairman of Valley National Bank in Phoenix , is the Republican appointee , and that a security clearance was under way . 
 The Democratic appointee has n't been determined , the official said . 
 Mr. Simmons declined to comment , and the White House said the congressmen 's letter is under review . 
 The letter , dated last Thursday , cited the losses at Valley National , and at United Bank , also of Phoenix , where Mr. Simmons was chairman for 29 years . 
 Both banks have been battered , as have other Arizona banks , by falling real estate prices . 
 Valley National , for example , had $ 470 million in problem assets as of June . 
 `` We believe that there are numerous other candidates more qualified for this important position and we encourage you to give them your thorough consideration before making this key RTC appointment , '' the letter said . 
 `` The RTC needs the most able , competent management available . '' 
 But Mr. Simmons has long ties to both Republicans and banking . 
 He was co-chairman of Mr. Bush 's Arizona campaign committee in last year 's election , and also worked for Mr. Bush in the 1980 election . 
 The two met more than 30 years ago , when Mr. Simmons worked for Commercial Bank & Trust Co. of Midland , Texas , where Mr. Bush was an organizing director . 
 In 1986 , Mr. Simmons also served on a committee of businessmen headed by William Seidman , chairman of the Federal Deposit Insurance Corp. and the Resolution Trust Corp . 
 That committee determined to open Arizona to banking across state lines . 
 Arizona Trend magazine referred to Mr. Simmons this year as one of the 25 most influential people in the state . 
 The letter to Mr. Bush was signed by Reps. Bruce Vento -LRB- D. , Minn. -RRB- , the chairman of the Banking Committee 's RTC Task Force , Thomas McMillen -LRB- D. , Md. -RRB- , Kweisi Mfume -LRB- D. , Md . -RRB- and Paul Kanjorski -LRB- D. , Pa . -RRB- . 
 Randolph W. McElroy , a vice chairman of this bank-holding company , was named to the additional position of chairman of its principal unit , Sovran Bank . 
 Mr. McElroy , 54 years old , will remain president and chief executive officer of the unit . 
 Sovran also named John B. Werner a vice chairman of the parent company and the unit and elected him to the newly created position of chief credit officer of Sovran Financial , increasing the number of corporate board members to 35 . 
 Mr. Werner , 58 , was formerly senior executive vice president of the parent company and the unit . 
 Moody 's Investors Service Inc. said it lowered the debt ratings of certain long-term debt held by this company . 
 The debt-rating concern cited the bank 's move into the Texas market , noting its profitability and capital adequacy measurements will be depressed relative to the bank 's past performance . 
 Moody 's also said it raised its rating on the Deposit Insurance Bridge Bank , now known as Bank One , Texas N.A. , reflecting the support of other banking affiliates and substantial assistance for the FDIC . 
 Officials at the New York bank-holding company were n't available for comment on the debt-rating changes . 
 At Lloyd 's of London , underwriters still scratch out policies using fountain pens and blotting paper . 
 Visitors are ushered into the premises by red-frocked doormen known as waiters , a reminder of the insurance market 's origins in a coffeehouse in 17th century London . 
 Such trappings suggest a glorious past but give no hint of a troubled present . 
 Lloyd 's , once a pillar of the world insurance market , is being shaken to its very foundation . 
 The 301-year-old exchange is battered by enormous claims from a decade-long run of unprecedented disasters , the most recent of which is last week 's earthquake in California 's Bay Area . 
 At the same time , Lloyd 's is besieged by disgruntled investors and hamstrung by inefficient but time-honored ways of conducting business . 
 The exchange is gradually being squeezed into narrow , less-profitable segments of the market by less hidebound competitors . 
 `` Lloyd 's is on the ropes , '' says Peter Nutting , a Lloyd 's investor for 17 years who now leads a dissident group threatening to sue exchange underwriters for alleged mismanagement and negligence . 
 It needs more discipline . 
 It needs to sort itself out . '' 
 Most troublesome is the shrinking pool of `` names , '' the well-heeled investors -LRB- some of them royal -RRB- who , as members of about 360 syndicates , underwrite policies . 
 Some 1,750 members quit the exchange last year , more than triple the number of resignations in 1987 . 
 Names are resigning at an even faster pace this year . 
 Lackluster returns are one reason . 
 The average after-tax return on investment in 1986 , the most recent year for which results are available , was 6.5 % , according to Chatset Ltd. , an insurance consulting firm in London . 
 In 1985 , it was 2.1 % . 
 Between 1981 and 1986 , the most recent five-year period for which figures are available , Lloyd 's reported over # 3.6 billion in claims and reserves against future losses -LRB- $ 5.7 billion at today 's exchange rates -RRB- , more than double the # 1.35 billion posted in the previous five-year period . 
 Many of the 31,329 investors who remain are beginning to question one of the exchange 's most basic tenets , the concept of unlimited personal liability . 
 Investors may reap huge profits when premiums exceed claims , but they are liable to their last pound or dollar in the event of a catastrophe . 
 And catastrophes are getting ever more costly . 
 Lloyd 's claims for the 1988 Piper Alpha oil-rig disaster in the North Sea , for instance , may reach $ 1 billion . 
 During the five-year period ended 1986 , roughly 80 % of the names had money tied up in money-losing syndicates , according to Chatset consultants . 
 The peril of unlimited liability looms large for a number of them now . 
 `` I have wished I could die and be out of it -- that 's how bad it is , '' Betty Atkins , a secretary from suburban London , says . 
 Ms. Atkins , whose Lloyd 's membership was a bonus from a former employer in 1981 , belongs to Mr. Nutting 's dissident group on the Outhwaite syndicate , which has been hard hit by asbestos reinsurance claims . 
 Ms. Atkins , who underwrote # 20,000 , or about $ 32,000 , of insurance coverage on that syndicate , now faces potential losses of roughly # 70,000 , or $ 111,000 . 
 `` If Lloyd 's wants # 70,000 out of me they will have to take everything I 've got -- and even then I do n't know if it will be enough , '' she says . 
 Unease is widespread among exchange members . 
 `` I ca n't think of any reason to join Lloyd 's now , '' says Keith Whitten , a British businessman and a Lloyd 's member since 1979 . 
 The downside is very considerable , and at the moment the upside is very marginal . '' 
 If profits do n't improve , Mr. Whitten says he may quit the exchange . 
 Meanwhile , competition from rivals unencumbered by history is intensifying . 
 Lloyd 's is being squeezed out of low-margin but more consistently profitable product lines such as primary property and marine insurance . 
 Over the past decade , competitors have chipped away at the exchange 's share of the # 2.5 billion marine market in London , where half the world 's ships are insured . 
 Lloyd 's 66 % stake in that market has shrunk to 50 % in that period , according to an official at the Institute of London Underwriters , a Lloyd 's competitor . 
 The official asked not to be named . -RRB- 
 Much of the business has gone to the institute , an association of more than 100 insurers , including Cigna Corp. , Allianz Versicherungs AG of West Germany and Britain 's Commercial Union Assurance PLC . 
 Lloyd 's has endured decades of genteel decline . 
 At the peak of its power and influence a century ago , Lloyd 's dominated the insurance world with a 50 % stake . 
 It virtually dictated how ships were to be built and it monitored commerce through a unrivaled intelligence network in ports around the globe . 
 Today , Lloyd 's share of the world market , excluding life insurance , is about 2 % . 
 Its stake is even smaller if life insurance is included . -RRB- 
 Bigger rivals , such as Aetna and Allianz , backed by armies of statisticians using computers in hundreds of branches , operate more efficiently and often can offer lower rates , brokers say . 
 Though Lloyd 's pioneered such now-standard policies as worker 's compensation insurance , burglary insurance for homeowners and businesses , and bankers ' liability insurance , competitors now underwrite most of that business . 
 Beyond that , many big oil , chemical and airline companies are siphoning off big chunks of the market by insuring themselves through `` captive '' offshore companies for industry-specific coverage . 
 Even Lloyd 's specialty -- unusually risky ventures -- is being challenged . 
 Only 10 years ago , for instance , Lloyd 's was the pre-eminent insurer of thoroughbred horses . 
 But since 1981 , Kirk Horse Insurance Inc. of Lexington , Ky. has grabbed a 20 % stake of the market . 
 Ronald Kirk , president , says Lloyd 's has suffered because its structure does n't allow underwriters to deal directly with clients ; brokers are required intermediaries . 
 Thus , he asserts , Lloyd 's ca n't react quickly to competition . 
 `` Lloyd 's has lost control of the situation , '' he says . 
 They are n't controlling their destiny like they used to . '' 
 Murray Lawrence , Lloyd 's chairman , agrees the exchange faces big challenges . 
 `` This is a watershed time , and we are trying to plot our way ahead , '' he says . 
 We have been a great market for inventing risks which other people then take , copy and cut rates . '' 
 Lloyd 's , he says , is cut off from `` the vast body of premium down at the bottom end which acts as a steadying influence '' against catastrophic losses . 
 By that , he means low-margin but low-risk products such as certain types of primary property insurance . 
 The exchange , he says , must find new products and new markets . 
 That wo n't be an easy task . 
 Tradition is dictator at Lloyd 's . 
 Three years ago , the exchange took up residence in a space-age tower of steel and glass -- evocative of the kind of modern architecture that Britain 's Prince Charles has denounced . 
 Some exchange wags call the building `` the oil rig . '' -RRB- 
 But along with such treasured artifacts as Lord Nelson 's spyglass , Lloyd 's also brought its outmoded ways of doing business . 
 The Lloyd 's market actively underwrites insurance just 4 hours a day , brokers say . 
 Underwriting does n't get under way until after morning tea at 10 a.m . 
 A two-hour lunch break follows . 
 Things wind down at about 4:30 p.m. , just in time for afternoon tea . 
 Lloyd 's vast trading hall houses a warren of well-polished desks . 
 The hall 's few computers are used mostly to send messages . 
 Sandwiched between desks , underwriters sit on benches surrounded by stacks of policies . 
 Brokers clutching thick folders stand in lines , waiting their turn to speak to the underwriters . 
 A broker may have to approach as many as 20 underwriters who insure the endeavors on behalf of the syndicates . 
 It could take six months for a claim to be paid . 
 `` The system , '' says Nicholas Samengo-Turner , a Lloyd 's broker who left the exchange in 1985 , `` is so ludicrously unprofessional it drives you mad . '' 
 Some maintain underwriters also have been inept . 
 John Wetherell , a Lloyd 's underwriter , says he and his fellow underwriters underestimated by as much as 50 % the premiums they should have charged for property risks from 1980 to 1985 . 
 `` How unprofessional we must have appeared to the outside world -- how incompetent at risk assessment and evaluation , '' he says . 
 Lloyd 's officials decline to comment on the matter . 
 More recently , property rates have increased . 
 Many at Lloyd 's expect the San Francisco earthquake will cause the industry to boost rates even further . 
 But it will be years before it is clear whether higher rates will offset the payouts for such disasters . 
 The magnitude of the exchange 's problems may not become known for some time because of Lloyd 's practice of leaving the books open for three years to allow for the settlement of claims . 
 Lloyd 's only recently reported its financial results for 1986 . 
 That year , it posted record pretax profit of # 650 million , a gain it attributes to higher rates and fewer claims . 
 But Mr. Lawrence says reported profit will be down in 1987 , 1988 and 1989 , though he declines to specify how steep the decline will be . 
 Insurance analysts say the exchange 's downturn in profitability is likely to be aggravated by more than $ 600 million in aviation losses -LRB- including the 1988 Pan Am airline disaster over Lockerbie , Scotland -RRB- and a still-uncalculated chunk of claims from September 's Hurricane Hugo . 
 Lloyd 's says the departures of names is n't likely to hurt its underwriting capacity , currently about # 11 billion . 
 Mr. Lawrence says the drain of funds has been offset by an increase in investments by the remaining names . 
 Meanwhile , the exchange has been trying to lower costs . 
 It recently cut its work force by 9 % , or 213 . -RRB- 
 But Lloyd 's is hampered in its efforts to overhaul operations by its reluctance to embrace modern technology . 
 Mr. Wetherell , the underwriter , reckons half of his business could be transacted by computer , cutting costs at least 10 % . 
 Though Lloyd 's has talked for years about computerizing underwriting transactions , the effort has n't gotten very far . 
 Competition among underwriters and brokers makes them loath to centralize price and policy information . 
 Both groups cling to traditional face-to-face dealings , even for routine policies . 
 Lloyd 's overblown bureaucracy also hampers efforts to update marketing strategies . 
 Some underwriters have been pressing for years to tap the low-margin business by selling some policies directly to consumers . 
 Lloyd 's presently sells only auto insurance directly to the public , and such policies are sold only in limited markets such as the U.K. and Canada . 
 But such changes must be cleared by four internal committees and dozens of underwriters , brokers and administrators before being implemented . 
 The proposal to sell directly to the public remains mired in bureaucratic quicksand . 
 Lloyd 's is moving forward on some fronts , though . 
 Mr. Lawrence says the exchange is updating some procedures to make speedier payments on claims . 
 By next year , all underwriters will be linked to a communications network that could reduce paper work on claims . 
 Japan 's Daiwa Securities Co. named Masahiro Dozen president . 
 Mr. Dozen succeeds Sadakane Doi , who will become vice chairman . 
 Yoshitoki Chino retains his title of chairman of Daiwa , Japan 's second-largest securities firm . 
 In Japanese firms , the president usually is in charge of day-to-day operations , while the chairman 's role is more a ceremonial one . 
 The title of chief executive officer is n't used . 
 While people within Daiwa , particularly internationalists , expected that Mr. Dozen , 52 , would eventually become Daiwa 's president , the speed of his promotion surprised many . 
 It was only earlier this year that the jovial , easygoing executive -- he likes to joke with Americans about how his name is synonymous with twelve -- was appointed deputy president . 
 Mr. Dozen is taking over the reins of a securities company that does very well in its domestic market but that is still seeking to realize its potential in global investment banking and securities dealing . 
 Daiwa is one of the world 's largest securities firms . 
 As of March 31 , the Daiwa group had shareholder equity of 801.21 billion yen -LRB- $ 5.64 billion -RRB- . 
 For the six months ended Sept. 30 , Daiwa reported unconsolidated -LRB- parent company -RRB- net income of 79.03 billion yen -LRB- $ 556.5 million -RRB- on revenue of 332.38 billion yen -LRB- $ 2.34 billion -RRB- . 
 Both figures were record highs . 
 Several observers interpreted Mr. Dozen 's appointment as an attempt by Daiwa to make its international operations more profitable while preparing the firm for the effects of the continuing deregulation of Japan 's domestic markets , which should mean increased competition . 
 All of Japan 's so-called Big Four securities firms -- Nomura Securities Co. Ltd. , the world 's largest , Nikko Securities Co. Ltd. , Yamaichi Securities Co. Ltd. and Daiwa -- have suffered setbacks in their attempts to break into foreign markets . 
 While they have moved to the fore in underwriting fixed-income securities in the Eurobond market -- mostly for Japanese firms -- they have been only marginally profitable , if at all , in the U.S . 
 American institutional investors have never had a large appetite for Japanese equities . 
 And while the Japanese have stepped up their purchases of U.S. shares in the past several months , they have shown themselves in the past to be fickle investors . 
 At the same time , Daiwa and its brethren have faced stiff competition from well-entrenched American competitors that have prevented them from building strong links to U.S. corporations and institutional investors . 
 Mr. Dozen knows these problems firsthand . 
 When he arrived in the U.S. in 1969 -- the start of an eight-year tour -- he tried selling Japanese yen-denominated bonds to U.S. investors . 
 `` He made desperate efforts , using the yellow pages from beginning to end , '' said Koji Yoneyama , president of Daiwa 's U.S. unit . 
 But not a single piece of paper was sold . '' 
 By his own account , Mr. Dozen did n't do much better with U.S. bonds . 
 In an interview a few months ago , he recalled how after some training at Salomon Brothers Inc. , he successfully bid for the opportunity to sell portions of 20 U.S. corporate bond issues . 
 But he could n't sell any . 
 Japanese stock salesmen selling American bonds ? 
 Maybe it 's crazy , '' he said . 
 Mr. Dozen even related the indignity suffered when he and two colleagues went on an overnight fishing expedition off the New Jersey shore and caught nothing . 
 Upon returning to New York , `` Exhausted , I got into a taxicab , and the woman driver said : ` Americans make better fishermen , ' '' he recalled . 
 Undaunted , Mr. Dozen said that Daiwa 's goal is to build `` a high-technology oriented international organization with maybe some Japanese flavor to it . '' 
 He said that he was particularly interested in his firm gaining expertise in futures , options , mortgaged-backed securities , computerized trading and investment systems as well as mergers and acquisitions . 
 Mr. Dozen said Daiwa 's strengths were its large capital base , its influential position in the Tokyo market and its links to Japanese corporations and institutional investors . 
 Mr. Dozen joined Daiwa upon his graduation from Kyoto University in 1959 . 
 Like many young recruits in Japanese securities firms , he began his career peddling stock to individual investors . 
 In his climb to the top , Mr. Dozen also headed the company 's stock-exchange division , its fixed-income units and its international operations . 
 `` He was constantly picking up new things to fill out his experience ; he is very well-balanced , '' said Takuro Isoda , chairman of Daiwa 's U.S. unit in New York . 
 But it Mr. Dozen 's experience as a salesman that enabled him to gain the political support -- particularly from the retail sales force -- to accede to the presidency . 
 Commission income from domestic stock and bond sales accounts form a large portion of Japanese securities companies ' earnings . 
 And anybody who lacked the backing of the retail sales force `` would be fragile , '' said a Daiwa executive . 
 If Mr. Dozen has a weakness , it may be his golf game . 
 `` He digs in the sand instead of hitting the ball , like a farmer , '' said Mr. Yoneyama . 
 Inco Ltd. posted a 35 % decline in third-quarter net income , a performance that was in line with analysts ' expectations . 
 The nickel producer also raised its quarterly dividend to 25 cents a share from 20 cents and said it may buy back as much as 4.8 % of its common outstanding . 
 Inco shares fell after the announcements . 
 Analysts said some investors were disappointed that the cash-rich company had failed to announce a special dividend . 
 Inco closed at $ 31.125 a share , down 62.5 cents , in New York Stock Exchange composite trading . 
 Some analysts said Inco , which had cash reserves of $ 272 million as of Sept. 30 , could still announce a special dividend in the next few months , though it would be smaller than the $ 10-a-share special dividend it paid last year . 
 The quarterly dividend is payable Dec. 1 to shares of record Nov. 3 . 
 Inco 's net fell to $ 129.3 million , or $ 1.23 a share , in the third quarter from $ 200.3 million , or $ 1.88 a share , a year earlier . 
 Sales rose 8.2 % to $ 848.7 million from $ 784.5 million . 
 Excluding special gains from tax-loss carry-forwards , earnings in the latest quarter were $ 117.7 million , or $ 1.12 a share , compared with $ 187.4 million , or $ 1.76 a share . 
 Inco said the drop in earnings resulted mainly from lower nickel prices for the period and a temporary cut in nickel output at the company 's Manitoba operations due to high levels of arsenic in the ore . 
 Inco said it plans to buy back as many as five million common shares over the next 12 months if nickel market conditions are favorable . 
 Under a previous buyback program , Inco has purchased 1.7 million of its shares since April . 
 UAL Corp. 's board quashed any prospects for an immediate revival of a labor-management buy-out , saying United Airlines ' parent should remain independent for now . 
 As a result , UAL 's chairman , Stephen M. Wolf , pulled out of the buy-out effort to focus on running the company . 
 The two developments put the acquisition attempt back to square one and leaves the airline with an array of unresolved matters , including an unsettled labor situation and a management scrambling to restore its damaged credibility . 
 The effort to create the nation 's largest employee-owned company began unraveling Oct. 13 when the labor-management group was unable to obtain financing for its $ 300-a-share , $ 6.79 billion offer . 
 Just last week it suffered another major setback when British Airways PLC , the largest equity investor in the labor-management bid , withdrew its support . 
 Takeover stock traders , focusing on the company 's intention to stay independent , took the announcement as bad news . 
 UAL , which had risen $ 9.875 to $ 178.375 in composite trading on the New York Stock Exchange on reports of a new bid being prepared by the group , reversed course and plummeted in off-exchange trading after the 5:09 p.m. EDT announcement . 
 Among the first trades reported by the securities firm of Jefferies & Co. , which makes a market in UAL after the exchange is closed , were 10,000 shares at $ 170 , 6,000 shares at $ 162 , 2,500 at $ 162 , and 10,000 at $ 158 . 
 The rebound in UAL stock during regular trading hours Monday was its first daily gain after six consecutive losses left the price 41 % below its level before Oct. 13 , the day the group announced the bank financing could n't be obtained for the original deal . 
 Twelve of UAL 's outside directors met at a five-hour meeting yesterday in Chicago to consider an informal proposal from the buy-out group for a revised bid . 
 But the board said it was n't interested for now . 
 That proposal , valued at between $ 225 and $ 240 a share , would have transferred majority ownership to employees while leaving some stock in public hands . 
 The buy-out group had no firm financing for the plan . 
 And , with no other offers on the table , the board apparently felt no pressure to act on it . 
 The directors signaled , however , that they would be willing to consider future offers or take some other action to maximize shareholder value , saying they would continue to explore `` all strategic and financial alternatives . '' 
 But it was clear that for the time being , the board wants the company to return to normalcy . 
 The board said it concluded that `` the welfare of the company , its shareholders , its employees and the broader public... can best be enhanced by continued development of UAL as a strong , viable , independent company . '' 
 Mr. Wolf urged all employees to `` now turn their full attention '' to operating the airline . 
 He also vowed to `` make every effort to nurture... a constructive new relationship that has been forged with participating employee groups . '' 
 But Mr. Wolf faces a monumental task in pulling the company back together again . 
 Labor problems top the list . 
 For a brief time , the buy-out effort seemed to solve his problems with United 's pilot union . 
 In return for an ownership stake in the company , the pilots were willing to agree to a seven-year contract that included a no-strike clause and significant wage concessions and productivity gains the union previously resisted . 
 That contract was tied to the success of the buy-out . 
 As a `` good-will measure , '' the pilots had been working four extra hours a month and had agreed to fly UAL 's two new Boeing 747-400 aircraft . 
 It 's uncertain if the pilots will continue to do so without a contract settlement . 
 The union said late last night that it is still committed to majority employee ownership and that the labor disputes that faced the company prior to the buy-out effort `` still need to be addressed . '' 
 The buy-out effort also worsened already-strained relations between United 's pilot and machinist unions . 
 The machinists ' criticisms of the labor-management bid and their threats of a strike unless they received substantial wage increases this year helped cool banks ' interest in financing the transaction . 
 The machinists previously had shown themselves to be an ally to Mr. Wolf , but he lost much of his credibility with that group when he teamed up with the pilot union . 
 The machinists criticized the terms Mr. Wolf and management received in the buy-out . 
 They paid $ 15 million for a 1 % stake and received an additional 9 % of the company at no additional cost . 
 His credibility is also on the line in the investment community . 
 Until the collapse of this bid , Mr. Wolf was regarded as one of the nation 's savviest airline executives after engineering turnarounds of Tiger International Inc. and Republic Airlines . 
 But he and his chief financial officer , John Pope , sowed some of the seeds for the deal 's failure by insisting banks accept low financing fees and interest rates , while they invested in the transaction only a small fraction of the $ 114.3 million they stood to gain from sale of their UAL stock and options . 
 The board 's actions leave takeover stock traders nursing some $ 700 million in losses and eager to respond to anyone who might make a new offer . 
 It also inevitably leaves a residue of shareholder lawsuits . 
 Arbitragers said they were disappointed the company did n't announce some recapitalization or other plan to maximize value . 
 One takeover expert noted that arbitragers could force a recapitalization through the written consent process under which holders may oust the board by a majority vote . 
 The machinists union has suggested it may propose a recapitalization that includes a special dividend for holders and a minority ownership stake for employees . 
 Los Angeles investor Marvin Davis , whose $ 240-a-share offer for UAL in August triggered a bidding war , says he remains interested in the airline . 
 However , he is restricted from making certain hostile moves by an agreement he signed to obtain confidential UAL data . 
 Essentially , he ca n't make any hostile moves unless he makes a tender offer at least $ 300 a share . 
 Tandy Corp. said it wo n't join U.S. Memories , the group that seeks to battle the Japanese in the market for computer memory chips . 
 Tandy 's decision is a second setback for U.S. Memories . 
 Last month , Apple Computer Inc. said that it would n't invest in the group . 
 Apple said that its money would be better spent in areas such as research and development . 
 U.S. Memories is seeking major investors to back its attempt to crack the $ 10 billion market for dynamic random access memory chips , a market dominated by the Japanese . 
 Those chips were in dire shortage last year , hurting many U.S. computer companies that could n't get sufficient Japanese-supplied chips . 
 Tandy said its experience during the shortage did n't merit the $ 5 million to $ 50 million investment U.S. Memories is seeking from each investor . 
 `` At this time , we elected not to get involved because we have been able to satisfy our need -LCB- for DRAMs -RCB- from the market as a rule , '' said Ed Juge , Tandy 's director of market planning . 
 Sanford Kane , U.S. Memories president , said the decision was `` disappointing , '' but does n't presage U.S. Memories ' failure . 
 `` I would like to have had them , '' he said . 
 But `` they were n't on my list of companies who were critical to be a part of it . '' 
 Mr. Kane became president and chief executive officer of U.S. Memories last June , when the group was formed by seven electronics companies : Advanced Micro Devices Inc. , Digital Equipment Corp. ; Hewlett-Packard Co. ; Intel Corp. ; International Business Machines Corp. ; LSI Logic Corp. and National Semiconductor Corp . 
 Mr. Kane said he expects two or three major corporations to announce their participation in U.S. Memories soon after the group finishes a business plan , probably late this week . 
 U.S. Memories needs a catalyst , he said , to inspire others to join . 
 But so far , most potential participants have n't decided . 
 Sun Microsystems Inc. said it 's still actively evaluating U.S. Memories and plans to meet with U.S. Memories representatives later this week . 
 American Telephone & Telegraph Co. said it was waiting to see U.S. Memories ' business plan . 
 Personal-computer maker AST Research Inc. said it is still studying the situation . 
 A Compaq Computer Corp. spokeswoman said that the company has n't made a decision yet , although `` it is n't under active consideration . 
 In a startling turnabout , Members of the Senate Intelligence Committee are complaining that someone in the executive branch is leaking on them . 
 David Boren , the Intelligence Committee chairman , is upset that someone leaked a letter to the committee from the Reagan administration suggesting that the U.S. would undertake to warn Panamanian thug Manuel Noriega if it got wind of an impending coup that might result in his assassination . 
 With due respect to `` highly classified correspondence '' and other buzzwords , the leakers are performing a public service . 
 If the CIA has become a protection service for Mr. Noriega , the American people ought to know . 
 What went wrong in Panama is a fitting subject for public and congressional inquiry . 
 Naturally , Senator Boren and his committee would like free rein to blame the executive branch while stamping `` top secret '' on their own complicity . 
 But there 's no danger of exposing sources and methods in disclosing the debate running up and down Pennsylvania Avenue . 
 And if Congress is going to assume authority to micromanage foreign policy , it 's going to have to take some of the responsibility too . 
 The President of the United States urged the Panamanian armed forces to move against Mr. Noriega . 
 When they did , his commanders did n't have the initiative to do more than block a couple of roads . 
 The executive branch bears the first responsibility for timidity . 
 But what kind of initiative can you expect given the climate set by Congress ? 
 For example , what exactly did the CIA tell Major Giroldi and his fellow coup plotters about U.S. laws and executive orders on assassinations ? 
 What part did U.S. warnings play in the major 's unwillingness to pull the trigger when he had General Noriega in custody , but was under attack by pro-Noriega troops ? 
 Mr. Noriega did n't suffer from any hesitation once he had the pistol . 
 Maybe we need a CIA version of the Miranda warning : You have the right to conceal your coup intentions , because we may rat on you . 
 Or maybe a Surgeon General 's warning : Confiding in the United States may be fatal . 
 CIA chief William Webster , hardly a Washington malcontent , got the debate started last week by noting that the executive order banning assassinations had contributed to U.S. paralysis during the coup . 
 The CIA 's Deputy Director of Operations , Richard Stoltz , tried to smooth things over a few days later , but instead simply underlined Mr. Webster 's point . 
 `` The interpretation '' of the executive order , Mr. Stoltz said , `` and the way in which the various committees have over time interpreted it , has led in my view to a proper caution on the part of operators , including me . '' 
 In other words , Congress wo n't let the CIA do much of anything anymore , and that 's fine with the CIA . 
 The pay 's the same , and the duty 's lighter . 
 And of course , doing anything that might be second-guessed by Congress carries heavy penalties . 
 Witness the Walsh prosecution of Ollie North . 
 The Intelligence Committee 's ranking Republican , Senator William Cohen , joined with Senator George Mitchell to write a best seller about Iran-Contra , deploring `` Men of Zeal . '' 
 No doubt many people in the CIA , the Pentagon and the National Security Council have read it . 
 What kind of initiative should anyone expect from people out on the line who 've read all this and know what can happen if they fail ? 
 Who wants to end up as the protagonist in a Bill Cohen morality play ? 
 The order against assassinations is another artifact of the same congressional mind-set , a product of the 1970s Vietnam syndrome against any executive action . 
 President Bush would do himself and the country a favor by rescinding the order as an ambiguous intrusion on his ability to defend America 's national security . 
 There are of course good reasons the U.S. should n't get into the assassination business , but rescinding the executive order is not the same thing as saying the U.S. should start passing out exploding cigars . 
 The world being the nasty place it is , we want Presidents to have the freedom to order operations in which someone might get killed . 
 In such situations , you can not write rules in advance , you can only make sure the President takes the responsibility . 
 The executive order and the reported agreements with the Intelligence Committee are neither sensible nor moral . 
 As it now stands , the U.S. can bomb Tripoli , but ca n't `` assassinate '' Colonel Gadhafi . 
 It can send a fighter squadron to strafe terrorist hideouts in the Bekaa Valley , but ca n't shoot Abu Nidal . 
 Both the assassination order and the quality of debate in Washington are telling the world that the only way the U.S. will kill a madman is by making sure we take some innocent civilians with him . 
 We 've heard California 's property-tax-cutting Proposition 13 blamed for a lot over the years , but ABC 's Ted Koppel came up with a new wrinkle in his earthquake coverage last week when he asked Democratic Assemblyman Richard Katz if Prop. 13 had withheld money needed for road maintenance . 
 Mr. Katz happily agreed , sliding over the fact that California 's roads and bridges are n't funded by property taxes but by state and federal gasoline taxes . 
 Both have been raised at least 30 % in recent years , even while the price of gasoline has fallen . 
 Dragging Prop. 13 into this story is a pretty long stretch . 
 A series of explosions tore through the huge Phillips Petroleum Co. plastics plant near here , injuring more than a hundred and closing parts of the Houston Ship Channel . 
 There were no immediate reports of deaths , but officials said a number of workers were still unaccounted for last night . 
 The Bartlesville , Okla. , oil company late yesterday still had n't said officially what caused the explosions and fires , which sent columns of heavy black smoke billowing high into the air . 
 One local Phillips manager said a seal blew in one of the plant 's reactors . 
 Glenn Cox , Phillips ' president and chief operating officer , and other Phillips officials flew from Bartlesville to assess the damage and determine the cause of the afternoon explosions . 
 In composite trading on the New York Stock Exchange , Phillips Petroleum shares fell $ 1.125 to $ 23.125 . 
 The plastics plant is located on an 800-acre tract in the heart of the petrochemical corridor that reaches along the U.S. Gulf Coast . 
 The U.S. Coast Guard closed six miles of the Houston Ship Channel , where about 150 companies have operations , because the thick , black smoke obscured the area . 
 The Port of Houston closed its terminal for handling bulk cargo . 
 Broken water lines and gas leaks hindered firefighters ' efforts , but by late yesterday authorities said they had the fire under control . 
 The blasts blew out windows , spewed debris for miles and crumpled the ceiling in an area elementary school . 
 The initial fireball was caught by cameras in downtown Houston , about 10 miles away . 
 Nearby Pasadena , Texas , police reported that 104 people had been taken to area hospitals , but a spokeswoman said that toll could rise . 
 The injured , including three in critical condition , were treated for burns , breathing problems and cuts from flying glass , hospital officials said . 
 The plant employs between 800 and 900 on three shifts . 
 The number working at the time of the blast was n't known . 
 Yesterday 's explosions were the second round in two months at the plastics plant . 
 In late August , four contract workers were injured and one Phillips employee died after an explosion at a fuel supply line near the facility 's boiler house . 
 The Phillips facility manufactures polyethylene , polypropylene and K-resin , plastics used in a wide array of applications , including milk jugs and toys . 
 Plastics are the cornerstone of Phillips ' chemicals operations , which is the biggest single contributor to the company 's profits . 
 A federal judge in Manhattan has entered a judgment requiring a Chicago organized crime figure to pay the government $ 250,000 , representing alleged profits he gained from his involvement with the International Brotherhood of Teamsters . 
 Manhattan U.S. Attorney Otto Obermaier said it was the first time ever that the government had obtained any disgorgement from an organized crime figure indicted under the civil racketeering law . 
 Joseph Lombardo , who the government alleged was the `` captain '' of organized crime in Chicago , was one of numerous defendants in the government 's sweeping racketeering suit against the Teamsters . 
 In the suit , filed in June 1988 , the government accused the union 's leadership of depriving its 1.6 million members of their rights through a pattern of racketeering . 
 Among other things , the government claimed that organized crime figures had routinely handpicked the union 's top officials . 
 U.S. District Judge David Edelstein also permanently enjoined Mr. Lombardo from any future dealings with the Teamsters or any other labor union . 
 Mr. Lombardo , the last of the defendants to settle the suit , agreed to pay the government the $ 250,000 within one week . 
 Exxon Corp. said its third-quarter earnings slipped 9 % as profits from two of its three major businesses sagged . 
 All cleanup costs from last spring 's Alaskan oil spill were reflected in earlier results , it said . 
 Phillips Petroleum Co. and Atlantic Richfield Co. also reported declines in quarterly profit , while Ashland Oil Inc. posted a loss for the latest quarter . 
 Amerada Hess Corp. and Occidental Petroleum Corp. reported higher earnings . 
 Although Exxon spent heavily during the latest quarter to clean up the Alaskan shoreline blackened by its huge oil spill , those expenses as well as the cost of a continuing spill-related program are covered by $ 880 million in charges taken during the first half . 
 An Exxon official said that at this time the oil company does n't anticipate any additional charges to future earnings relating to the cleanup of oil spilled when one of its tankers rammed into an underwater reef . 
 She added , however , that charges already taken do n't take into account the potential effect of litigation involving the oil spill . 
 She said that impact ca n't be reasonably assessed yet . 
 Exxon 's net income during the third quarter dropped to $ 1.11 billion , or 87 cents a share , from $ 1.22 billion , or 93 cents a share , a year earlier . 
 Revenue rose 8.1 % , to $ 23.65 billion from $ 21.88 billion . 
 During the third quarter , Exxon purchased 8.34 million shares of its stock at a cost of $ 373 million . 
 Exxon 's profitability , like that of many other oil companies , was hurt during the third quarter by declining returns from the chemicals and refining and marketing businesses . 
 Exxon 's earnings from chemicals operations fell $ 90 million , to $ 254 million , while refining and marketing profits declined $ 180 million , to $ 357 million . 
 Although crude oil prices were significantly higher this year , they were n't strong enough to offset the declining profits in those business sectors at most oil companies , said William Randol , oil analyst for First Boston Corp . 
 He estimates that the price of West Texas Intermediate , the U.S. benchmark crude , was $ 4.04 a barrel higher during the third quarter of this year than in the same period last year . 
 A rash of one-time charges left Ashland Oil with a loss of $ 39 million for its fiscal fourth quarter . 
 A year earlier , the refiner earned $ 66 million , or $ 1.19 a share . 
 Quarterly revenue rose 4.5 % , to $ 2.3 billion from $ 2.2 billion . 
 For the year , net income tumbled 61 % to $ 86 million , or $ 1.55 a share . 
 The Ashland , Ky. , oil company reported a $ 38 million charge resulting from settlement of a 10-year dispute with the National Iranian Oil Co. over claims that Ashland did n't pay for Iranian crude it had received . 
 In September , Ashland settled the long-simmering dispute by agreeing to pay Iran $ 325 million . 
 Ashland also took a $ 25 million after-tax charge to cover anticipated costs to correct problems with boilers built by one of its subsidiaries . 
 The oil refiner also booked a $ 15 million charge for selling Ashland Technology Corp. , one of its subsidiaries , at a loss . 
 Third-quarter earnings at Amerada Hess more than tripled to $ 51.81 million , or 64 cents a share , from $ 15.7 million , or 20 cents a share , a year earlier . 
 Revenue climbed 28 % , to $ 1.18 billion from $ 925 million . 
 Profits improved across Hess 's businesses . 
 Refining and marketing earnings climbed to $ 33.3 million from $ 12.9 million , and exploration and production earnings rose to $ 37.1 million from $ 17.9 million . 
 Hess 's earnings were up despite a $ 30 million charge to cover the cost of maintaining operations after Hurricane Hugo heavily damaged the company 's refinery at St. Croix . 
 It is widely known within industry circles that Hess had to buy oil products in the high-priced spot markets to continue supplying its customers . 
 Hess declined to comment . 
 Phillips Petroleum 's third-quarter earnings slid 60 % , to $ 87 million , or 36 cents a share , from $ 215 million , or 89 cents a share . 
 Revenue rose 6.9 % , to $ 3.1 billion from $ 2.9 billion . 
 Shrinking profit margins in chemical and refining and marketing sectors accounted for most of the decline , said Chairman C.J. Silas in a statement . 
 Despite higher oil prices , exploration and production profits were off because of foreign-currency losses and some construction costs incurred in one of Phillips ' North Sea oil fields . 
 A year ago , results were buoyed by a $ 20 million after-tax gain from an asset sale . 
 Occidental Petroleum 's third-quarter net income rose 2.9 % to $ 108 million , or 39 cents a share , from $ 105 million , or 38 cents a share , a year earlier . 
 The latest quarter included an after-tax gain of $ 71 million from non-recurring items . 
 Sales dropped 2 % , to $ 4.8 billion from $ 4.9 billion . 
 The latest period included a $ 54 million gain from the sale of various oil and gas properties , a $ 22 million charge from the restructuring of Occidental 's domestic oil and gas operations , and tax credits of $ 42 million . 
 Both periods included non-recurring charges of $ 3 million for early retirement of debt . 
 Occidental said oil and gas earnings fell to $ 17 million from $ 20 million . 
 The latest period includes net gains of $ 32 million in non-recurring credits from the sale of properties , indicating operating losses for the quarter in the oil and gas division . 
 Chemical earnings fell 10 % , reflecting softening of demand . 
 Citing its reduced ownership in the Lyondell Petrochemical Co. , Atlantic Richfield reported that net income slid 3.1 % in the third quarter to $ 379 million , or $ 2.19 a share , from $ 391 million , or $ 2.17 a share , for the comparable period last year . 
 Sales fell 20 % , to $ 3.7 billion from $ 4.6 billion . 
 Arco 's earnings from its 49.9 % stake in Lyondell fell to $ 37 million from $ 156 million for the same period last year , when Lyondell was wholly owned . 
 Offsetting the lower stake in Lyondell were higher crude oil prices , increased natural gas volumes and higher coke prices , the company said . 
 Coal earnings rose to $ 26 million from $ 21 million . 
 For the nine months , Arco reported net income of $ 1.6 billion , or $ 8.87 a share , up 33 % from $ 1.2 billion or $ 6.56 a share a year earlier . 
 Sales were $ 12 billion , off 13 % from $ 13.8 billion . 
 Jeff Rowe contributed to this article . 
 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 : 
 Imo Industries Inc. -- $ 150 million of senior subordinated debentures due 2001 , priced at par to yield 12 % . 
 The issue will be sold through Morgan Stanley & Co . 
 Other details were n't available . 
 San Antonio , Texas -- $ 575 million of electric and gas system revenue refunding bonds , Series 1989 , 1989A and 1989B , tentatively priced by a First Boston Corp. group to yield from 6.15 % in 1991 to 7.30 % in 2009 . 
 The issue includes current interest bonds due 1991-2000 , 2009 , 2012 , 2014 and 2016 , and capital appreciation bonds due 2001-2005 . 
 The current interest serial bonds are priced to yield from 6.15 % in 1991 to 7.10 % in 2000 . 
 There are about $ 100 million of 7 % term bonds due 2009 , priced to yield 7.30 % , which is the issue 's high yield . 
 There are also about $ 124 million of 6 % bonds priced to yield 7.25 % in 2012 ; about $ 97 million of 6 % bonds priced to yield 7.20 % in 2014 ; and about $ 26.5 million of 5 % bonds priced to yield 7.15 % in 2016 . 
 All of the term bonds are original issue discount bonds , according to the lead underwriter . 
 The capital appreciation bonds are tentatively priced to yield to maturity from 7 % in 2001 to 7.10 % in 2003-2005 . 
 The bonds are rated double-A by Moody 's Investors Service Inc. and Standard & Poor 's Corp . 
 Maryland Stadium Authority -- $ 137.6 million of sports facilities lease revenue bonds , Series 1989 D , due 1992-1999 , 2004 , 2009 and 2019 , tentatively priced at par by a Morgan Stanley group to yield from 6.35 % in 1992 to 7.60 % in 2019 . 
 Serial bonds are priced to yield to 7.10 % in 1999 . 
 There are $ 15,845,000 of 7 % bonds priced at par and due 2004 ; $ 22,985,000 of 7 % bonds priced at par and due 2009 ; and $ 82.6 million of 7.60 % bonds priced at par and due 2019 . 
 The bonds are rated double-A by Moody 's and double-A-minus by S&P . 
 Interest on the bonds will be treated as a preference item in calculating the federal alternative minimum tax that may be imposed on certain investors . 
 Federal Home Loan Mortgage Corp. -- $ 250 million of Remic mortgage securities being offered in 11 classes by Morgan Stanley . 
 The offering , Series 107 , is backed by Freddie Mac 15-year , 9 % securities , and brings Freddie Mac 's 1989 Remic issuance to $ 32.8 billion and its total volume to $ 46.8 billion since the program began in February 1988 . 
 The offering used at-market pricing . 
 Federal National Mortgage Association -- $ 500 million of Remic mortgage securities being offered in 10 classes by Merrill Lynch Capital Markets . 
 The offering , Series 1989-85 , is backed by Fannie Mae 9 % securities . 
 Separately , a $ 400 million issue of Fannie Mae Remic mortgage securities is being offered in 15 classes by Bear , Stearns & Co . 
 The offering , Series 1989-86 , is backed by Fannie Mae 9 % securities . 
 Finally , a $ 300 million issue of Fannie Mae Remic mortgage securities is being offered in 12 classes by Smith Barney , Harris Upham & Co . 
 The offering , Series 1989-87 , is backed by Fannie Mae 9 % securities . 
 The three offerings together bring Fannie Mae 's 1989 Remic issuance to $ 32.4 billion and its total Remic volume to $ 44.5 billion since the program began in April 1987 . 
 Credit Agricole -LRB- CNCA -RRB- -LRB- French -RRB- -- $ 250 million of 8 % bonds due Nov. 21 , 1994 , priced at 101.80 to yield 8.77 % annually less full fees , via IBJ International Ltd . 
 Fees 1 . 
 Hokuriku Electric Power Co . -LRB- Japan -RRB- -- $ 200 million of 8 % bonds due Nov. 20 , 1996 , priced at 101 to yield 8.90 % less full fees , via Yamaichi International -LRB- Europe -RRB- Ltd . 
 Fees 1 . 
 International Finance Corp . -LRB- agency -RRB- -- 10 billion pesetas of 11.6 % bonds due Nov. 30 , 1994 , priced at 101 to yield 11.60 % less full fees , via Citibank -LRB- Madrid -RRB- and Banco Espanol de Credito , Spain . 
 Fees 1 . 
 Royal Bank of Canada , Grand Cayman branch -LRB- Canada -RRB- -- 100 million Canadian dollars of 10 % deposit notes due Nov. 30 , 1994 , priced at 101 to yield 10.78 % less full fees , via RBC Dominion Securities International Ltd . 
 Fees 1 . 
 Union Bank of Finland -- 100 million Australian dollars of 9 % bonds due Nov. 9 , 1990 , priced at 94 to yield 17.20 % less full fees , via Banque Paribas Capital Markets Ltd . 
 Fees 1 . 
 Ford Motor Credit -- $ 2.57 billion of certificates backed by automobile loans with a coupon rate of 8.70 % , priced at 99 to yield 8.903 % through an underwriting group headed by First Boston Corp . 
 The issue is the first by Ford Motor Credit , a unit of Ford Motor Co. , and the second largest in the four-year history of the $ 45 billion asset-backed market . 
 The largest issue was a $ 4 billion offering of auto-loan securities by General Motors Acceptance Corp. in 1986 . 
 The Ford issue , through Ford Credit 1989-A Grantor Trust , was priced at a yield spread of 95 basis points above the Treasury 7 % issue due July 1991 . 
 The offering is rated doubleA-2 by Moody 's and double-A by S&P , based on the quality of the underlying auto loans and a guarantee covering 9 % of the deal from Ford Motor Credit . 
 The certificates have an estimated average life of 1.8 years , assuming monthly prepayments at 1.3 % of the original balance . 
 The final maturity is in five years . 
 The Mouth is back . 
 Morton Downey Jr. , who self-destructed as a talk-show host and frequently verbally abused his guests , has been signed to co-host a half-hour nightly program on the Consumer News and Business Channel , the cable channel partly owned by the General Electric Co. 's National Broadcasting Co . 
 The premiere of `` Showdown , '' with Mr. Downey and Richard G. Carter , a columnist with the New York Daily News , is scheduled for Dec. 4 at 8 p.m . 
 CNBC is available to 13 million cable households . 
 Mr. Downey said he is not going to change his style , which some critics said was flamboyant and others deemed offensive . 
 But I 'm going to proceed in a more logical way . 
 I 'm not going to do anything that is not acceptable in anyone 's home . 
 But that does n't mean I 'm not going to get angry . '' 
 Michael Eskridge , president of CNBC , said that although there will be a studio audience , viewers will no longer have to endure the shouting of `` Mort Mort Mort '' But just how does Mr. Downey 's unorthodox style mesh with the sedate tone of CNBC 's business programming ? 
 `` Ninety percent of Mort 's old show fits into our style , '' said Mr. Eskridge . 
 That is consumer issues . '' 
 Mr. Downey 's previous show , a one-hour shout fest , syndciated by MCA Inc. and produced by Quantum Media Inc. , was canceled in July after advertisers and stations abandoned it . 
 Investors dumped stocks of big companies whose earnings fluctuate with the economy . 
 Many of those `` cyclical '' issues are in the Dow Jones Industrial Average , which fell 26.23 to 2662.91 . 
 Declining issues on the New York Stock Exchange outpaced advancers , 1,012 to 501 . 
 Recession fears are springing up again among investors . 
 Analysts say that the selling of cyclical stocks yesterday will be followed by a sell-off in shares of companies with big debt loads on their balance sheets . 
 In an economic slowdown , heavy debt loads reduce the flexibility of companies because cash that would normally be used to keep the company buoyant must be diverted to interest payments . 
 On the other hand , investors beat a clear path yesterday to blue-chip issues with proven earnings growth records . 
 Among the 30 Dow industrials , they bought McDonald 's , Coca-Cola Co. and Procter & Gamble and sold Aluminum Co. of America . 
 In another sign of slowdown fears , investors dumped technology shares . 
 Many money managers are bracing for a decline in stocks of companies with big debt loads on their balance sheets . 
 `` The junk bond market is being taken apart '' because of recession fears , said J. David Mills , senior vice president at Boston Company Advisers . 
 Under this scrutiny , the first thing you do is sell your cyclical stocks and the second thing you do is sell your over-leveraged companies . '' 
 In fact , much of the buying in blue chips yesterday was a pursuit of companies with lower debt levels . 
 In a recent investment letter entitled `` Winners of the ` Leverage Wars , ' `` Edward Kerschner , chairman of PaineWebber 's investment policy committee , suggested that investors buy stocks of companies that have avoided loading up on debt . 
 `` We 're saying companies have to pay increasing attention to balance sheets , '' said Mr. Kerschner . 
 He suggested that investors buy the shares of Great Atlantic & Pacific Tea , J. Baker , McDonald 's , Philip Morris and Sara Lee . 
 He said that all of these companies will be able to compete fiercely in an economic downturn . 
 McDonald 's has long-term debt equaling 91 % of shareholder equity currently , but Mr. Kerschner said the company is carrying real estate assets at about $ 2.6 billion below their real value . 
 Coca-Cola climbed 1 to 72 1 to 31 , and Procter & Gamble gained to 130 . 
 A&P fell 1 to 57 , and J. Baker gained to 21 . 
 Philip Morris slipped to 43 , while Sara Lee closed unchanged at 60 . 
 According to Salomon Brothers ' `` stub '' stock index of 20 companies whose debt is giant compared with shareholder equity , investors are already beginning to retreat from shares of debt-laden companies . 
 From January to early September , the index of stub stocks -- the tiny portion of equity that 's publicly traded following a recapitalization -- outperformed Standard & Poor 's 500-stock index by about 20 % . 
 But starting in early September , the index started to slide and now stands about even with the S&P 500 . 
 `` Stocks that have a high default risk have started to underperform those stocks that have a lower default risk , '' said Eric Sorenson , director of quantitative analysis at Salomon Brothers . 
 `` Companies that have the most exposure to the business cycle have underperformed since late last summer . '' 
 Union Carbide , whose third-quarter earnings dropped about 35 % from a year earlier and fell short of analysts ' expectations , declined to 24 . 
 Also , Exxon went down to 45 and Allied-Signal lost to 35 even though the companies ' results for the quarter were in line with forecasts . 
 Other weak blue-chip issues included Chevron , which went down 2 to 64 in Big Board composite trading of 1.3 million shares ; Goodyear Tire & Rubber , off 1 to 46 , and American Express , down to 37 . 
 Texas Instruments , which had reported Friday that third-quarter earnings fell more than 30 % from the year-ago level , went down 2 to 33 on 1.1 million shares . 
 Motorola , another major semiconductor producer , dropped 1 to 57 . 
 Pinnacle West Capital , whose earnings have been hurt by continued problems at its MeraBank unit , fell 1 to 9 on 2.1 million shares to lead the Big Board 's list of most active issues . 
 Growing pressures on the Arizona real-estate market are affecting the thrift ; Pinnacle West told Dow Jones Professional Investor Report it may consider filing for Chapter 11 bankruptcy protection if it ca n't reach an agreement with federal regulators to provide additional capital to MeraBank . 
 Hercules dropped 2 to 41 on one million shares -- about six times its average daily trading volume -- after a disappointing third-quarter earnings report . 
 Merrill Lynch and Prudential-Bache Securities both lowered the stock 's investment rating immediately after the results were issued Friday , according to PIR . 
 Elsewhere in the chemicals sector , Dow Chemical fell 1 to 97 1 , to 1 to . 
 Other stocks hurt by earnings-related selling included Tandy , which dropped 1 to 44 , and Eaton , which retreated 2 to 57 . 
 Third-quarter earnings at both companies were below analysts ' forecasts . 
 After declining about 41 % last week , UAL advanced 9 to 178 on 1.1 million shares on anticipation of a revised takeover offer from a labor-management group for the parent company of United Airlines . 
 However , Delta Air Lines fell 1 to 67 and USAir Group dropped to 42 . 
 Ramada gained to 11 after revamping the terms of its restructuring plan , which calls for the company to sell its hotel operations for $ 540 million and spin off its casino business to shareholders . 
 The revision follows last month 's withdrawal of a $ 400 million junk-bond offering for the new casino company , Aztar Corp . 
 Mead gained 1 to 37 . 
 USA Today reported that the Rales brothers , Washington , D.C.-based investors who made an unsuccessful offer to acquire Interco last year , have bought nearly 3 % of Mead 's common shares . 
 Entertainment and media stocks generally escaped the market 's slide as well . 
 Paramount Communications rose to 58 , Time Warner climbed 1 to 138 , Walt Disney advanced 3 to 127 1 to 65 and McGraw-Hill added to 67 . 
 The American Stock Exchange Market Value Index lost 3.11 to 379.46 . 
 Volume totaled 10,450,000 shares . 
 Carnival Cruise Lines Class A fell 1 to 20 . 
 The company said it had been notified unofficially that Waertsilae Marine Industries , a Finnish shipyard building three cruise ships for the company , is having financial trouble and may already have filed for bankruptcy . 
 `` Hacksaw '' and `` Bonecrusher '' are the sort of nicknames normally associated with linebackers and heavyweight contenders . 
 Who 'd have thought that the next group of tough guys carrying around reputations like that would be school superintendents ? 
 Chicago 's new school chief is the hard-nosed Ted Kimbrough . 
 At his old job in Compton , Calif. , he took a bitter teachers ' strike and nearly came to blows with a school-board member . 
 At his first Chicago press conference , he berated the reporters . 
 In New York City , the new Chancellor , Joseph Fernandez , has landed like a 16-inch shell in the middle of a system that has been impervious to serious reform . 
 Both men fit the mood of the times -- the mood being one of a public fed up with officials ' rationalizations for why their schools do n't work . 
 Former Patterson , N.J. , principal Joe Clark was no doubt the general public 's first experience with this new breed of no-nonsense administrator . 
 The subject of the movie `` Lean on Me , '' Mr. Clark controlled his school with a bullhorn and a baseball bat . 
 He may have gone overboard in his pursuit of good discipline , but is n't it interesting that some of the country 's biggest , most troubled school districts are choosing new chiefs from the same gravel-chewing mold ? 
 Elena Scambio , the woman assigned to run the Jersey City school system that was taken over by the state , says her top priority will be to `` cut through the dead hand of bureaucracy . '' 
 Mr. Fernandez does n't take control in New York until January , but already he 's roiling the waters . 
 He 's attacked the concept of `` building tenure , '' one of the most disgraceful institutions in American public schools . 
 It means it is virtually impossible to fire or even transfer incompetent principals . 
 Once they are in the building , they stay . 
 One South Bronx principal kept his job for 16 years , despite a serious drinking problem and rarely showing up for work . 
 He was finally given leave when he was arrested for allegedly buying crack . 
 Naturally , the principals ' union loves building tenure , and tenure has withstood previous challenge . 
 We suggest that Mr. Fernandez find an incompetent principal , toss him out of the building and let the forces of the status quo explain to the parents whatever it is they 're defending . 
 In his old job , as Dade County chief , Mr. Fernandez forced out 92 teachers and reshuffled 48 principals . 
 He cut the dropout rate by 5.5 % . 
 But the no-more-nonsense superintendents are going to have to be judicious as well ; incompetent principals and administrators should go , but the good ones ought to be left alone . 
 The situation will be especially delicate for Mr. Kimbrough . 
 He takes over a school system in the midst of radical reform . 
 Chicagoans have just elected 540 neophyte school boards , one for each school . 
 This of course led to disaster in New York City . 
 Getting a community of parents to care again about its schools is essential , but in Chicago the new boards will make mistakes and Mr. Kimbrough will have to identify them . 
 The rise of superintendents such as Joseph Fernandez and Ted Kimbrough suggests plainly the process of disintegration in many school systems . 
 The schools ' central mission , educating children , became subsumed by the competing interests of bureaucrats , politicians and unions . 
 The classroom itself operated on the periphery of this awful system , discipline collapsed , and kids stopped learning . 
 Mr. Chips was a nice fellow , and maybe some day he 'll return . 
 Until then , it 's clear that some of the people who 've been keeping big-city schools down are going to be dealing with the Terminator . 
 Ingersoll Publications Co. agreed to buy the New Haven Register in a transaction valued at $ 275 million from Goodson Newspaper Group Inc . 
 As part of the agreement , Goodson also terminated the contract under which Ingersoll manages Goodson 's 66 newspapers , ending a long association between the two companies that has turned increasingly bitter recently . 
 Goodson has accused Ingersoll of paying less attention to its properties and more to such ventures as the recent launch of the St. Louis Sun . 
 Under the terms of the accord , Ingersoll will pay about $ 255 million for the Register , a daily that Goodson bought for about $ 170 million in 1986 . 
 Goodson will pay the additional $ 20 million in settlement of the management contract . 
 Goodson also announced that it hired the former president and senior vice president of Ingersoll to run the Goodson papers . 
 Both executives left the company after clashes with Chairman Ralph Ingersoll Jr . 
 Goodson , which is based here , will use part of the proceeds to pay down debt associated with its purchase of the Morristown Daily Record for $ 155 million in 1987 . 
 The New Jersey paper , like the New Haven , Conn. , paper , was purchased by Ingersoll on Goodson 's behalf as part of the management contract . 
 Industry analysts have said that the purchase price for the paper was too high , causing a strain on Goodson 's finances . 
 Investment bankers familiar with the company said Goodson is seeking a new bank credit line of $ 190 million and may have to sell additional newspapers . 
 David N. Hurwitz , president and chief operating officer of Goodson , said in a telephone interview that the company does n't currently have any plans to sell additional newspapers . 
 Goodson said David Carr , former president of Ingersoll Publications , and Ray Cockburn , former senior vice president , would head the new in-house management team at Goodson , which had revenue of $ 225 million in 1988 . 
 The association between the two companies stretches back thirty years to a friendship between television producer Mark Goodson and Ingersoll founder Ralph Ingersoll . 
 The latter 's son , Ralph Ingersoll Jr. , took over the company and has been managing the Goodson properties and acting as an agent in the purchase of newspapers for Goodson . 
 But in recent years , Mr. Ingersoll began focusing more on expanding his own newspaper empire in partnership with investment banking firm Warburg , Pincus & Co . 
 Ingersoll has 28 dailies and 200 other non-daily papers in the U.S. and Europe . 
 The company said its revenue will exceed $ 750 million this year . 
 Ingersoll President Robert M. Jelenic said in a statement that the company is `` delighted by the conclusion of the Goodson relationship '' and will be able to `` concentrate all our energies '' on Ingersoll 's own papers . 
 Mr. Goodson , in his own statement , was less upbeat , saying `` unfortunately over the past few years , it has become increasingly clear that Ralph and I have different agendas , '' and that he feels `` more comfortable with a management team whose sole interest and responsibility is in the Goodson papers . 
 Just five months after Ogilvy Group was swallowed up in an unsolicited takeover , Kenneth Roman , Ogilvy 's chairman and chief executive officer , said he is leaving to take a top post at American Express Co . 
 Mr. Roman , 59 years old , abruptly announced he will leave the venerable ad agency , whose largest client is American Express , to become American Express 's executive vice president for corporate affairs and communications . 
 He will succeed Harry L. Freeman , 57 , who has said he will retire in December . 
 Mr. Freeman said in August that he would retire by the end of this year to take `` executive responsibility '' for an embarrassing effort to discredit banker Edmond Safra . 
 American Express representatives apparently influenced the publication of unfavorable articles about Mr. Safra . 
 The company later apologized and agreed to make $ 8 million in contributions to charities chosen by him . 
 Although Mr. Freeman is retiring , he will continue to work as a consultant for American Express on a project basis . 
 Ad industry executives were n't surprised by Mr. Roman 's decision to leave Ogilvy . 
 The agency , under his direction , bitterly fought a takeover attempt by WPP Group PLC of London before succumbing in May . 
 And although Mr. Roman and WPP 's chief executive , Martin Sorrell , have gone out of their way to be publicly supportive of each other , people close to Mr. Roman say he was unhappy giving up control of the company . 
 Some executives also cite tension because of efforts by Mr. Sorrell , a financial man , to cut costs at the agency . 
 Mr. Roman will be succeeded as the head of Ogilvy 's flagship ad agency , Ogilvy & Mather Worldwide , by Graham Phillips , 50 , who had been president of North American operations and who , like Mr. Sorrell , is British . 
 Alexander Brody , 56 , will take on the newly created position of president of the world-wide agency and chief executive of its international operations . 
 He had been president of the international operations . 
 Mr. Roman also had overseen Ogilvy Group 's two other units , the Scali McCabe Sloves advertising agency and its research division , but those units will now report directly to WPP . 
 Mr. Roman appears custom-made for the American Express job . 
 Known as a traditional executive , he is very much in the conservative American Express mold . 
 Moreover , after 26 years at Ogilvy he had honed a reputation for being squeaky-clean and a straight arrow -- which can only help American Express in the wake of the Safra incident . 
 He also is close to American Express 's chairman and chief executive officer , James D. Robinson III . 
 Aside from working with Mr. Robinson on the American Express advertising account for about 11 years , Mr. Roman serves on several of the same charities and boards as Mr. Robinson . 
 The abrupt management change sparked widespread speculation that Mr. Roman had been pushed out of Ogilvy 's top spot by Mr. Sorrell . 
 But Mr. Roman flatly denied the speculation , saying Mr. Sorrell had tried several times to persuade him to stay , offering various incentives and in one instance sending a note with a case of wine -LRB- The wine , naturally , was Seagram 's brand , an Ogilvy client -RRB- . 
 He asked me not to resign . 
 The implication that I was pushed aside would n't be accurate , '' Mr. Roman said . 
 Mr. Sorrell , traveling in the Far East , could n't be reached . 
 Mr. Roman said American Express 's Mr. Robinson first approached him about the job in late September . 
 According to industry executives , Peter Sutherland , a former European Community commissioner from Ireland , was also a serious contender for the American Express job . 
 Although it ultimately was n't offered to him , he will be on retainer to American Express as an adviser on international matters . 
 After talking on and off for the past four weeks , Mr. Roman said , he agreed to take the job because `` it 's the right time , it 's a terrific opportunity , and I think I leave the company in very strong hands . 
 It was my decision , not anyone else 's . '' 
 Mr. Roman also brushed aside reports about infighting between him and Mr. Phillips , his successor at Ogilvy . 
 The two executives could hardly be more different . 
 Mr. Roman comes across as a low-key executive ; Mr. Phillips has a flashier personality . 
 During time off , Mr. Roman tends to his garden ; Mr. Phillips confesses to a fondness for , among other things , fast cars and planes . 
 Industry executives say that although the two executives used to clash more frequently , the WPP takeover brought them closer together . 
 I 'm the guy who made him head of New York , head of the U.S. , president of North America , and recommended him -LCB- to Mr. Sorrell -RCB- as my successor . 
 Would I have done all those things successively if I did n't think he was the right guy ? '' Mr. Roman asked . 
 He labeled reports of friction `` ridiculous , '' and said that he spent part of the weekend on Mr. Phillips 's boat in Connecticut . 
 Mr. Roman will oversee American Express 's public relations and government affairs , among other things , but he wo n't be involved in its advertising , which is handled by the operating units . 
 `` I consider this a second career , '' he said . 
 He also will sit on the company 's corporate planning and policy committee , made up of the top corporate and operating executives . 
 Mr. Roman 's departure is n't expected to have any enormous repercussions at Ogilvy . 
 American Express , Kraft General Foods , and Mattel executives said the move wo n't affect their relationships with the ad agency . 
 `` General Foods 's relationships with its agencies are based on the agencies ' work , and will continue to be , '' said David Hurwitt , a vice president of Kraft General Foods . 
 But some clients and analysts expressed concern that Mr. Phillips is n't as well-known to many clients . 
 `` Ken was my key contact , '' said J. Nicholas Hahn , president and chief executive officer of Cotton Inc. , which represents cotton producers . 
 I do n't know -LCB- Mr. Phillips -RCB- all that well . 
 I have n't seen or talked to him in several years . '' 
 And some analysts questioned whether Mr. Phillips would have the skills Ogilvy needs to turn the agency around . 
 While the agency has done well in many parts of the world , its flagship New York office has had a dismal track record recently ; it has won few new accounts while losing big ones , including Maxwell House . 
 I think -LCB- Mr. Phillips -RCB- is going to need some help . 
 I think they need creative leadership , and I do n't think they have it , '' said Emma Hill , an analyst with Wertheim & Co . 
 Ogilvy & Mather 's top creative executive , Norman Berry , left the agency earlier this year . 
 `` Norm Berry was a creative inspiration at the company , and nobody has filled that void , '' said Ms. Hill . 
 But other analysts said that having Mr. Phillips succeed Mr. Roman would make for a smooth transition . 
 `` Graham Phillips has been there a long time , knows the culture well , is aggressive , and apparently gets along well with '' Mr. Sorrell , said Andrew Wallach , an analyst with Drexel Burnham Lambert . 
 It 's probably a reasonable transition . 
 Hopefully , he 'll be the answer to the problems they 've had in New York . '' 
 Sale of Saatchi Unit Close 
 Computer Sciences Corp. , El Segundo , Calif. , said it is close to making final an agreement to buy Cleveland Consulting Associates from Saatchi & Saatchi 
 Computer Sciences would n't disclose the proposed purchase price for Cleveland Consulting , which counsels companies on logistics and supply . 
 But David Lord , managing editor of Consultants News , an industry publication based in Fitzwilliam , N.H. , said an industry standard would suggest a purchase price of between one and two times Cleveland Consulting 's approximately $ 15 million annual revenue . 
 Both Saatchi & Saatchi , which announced its intention to sell off most of its consulting business in June , and Cleveland Consulting declined to comment on the proposed sale . 
 Ad Notes . 
 NEW ACCOUNT : AmBase Corp. , New York , awarded the ad account for its Home Insurance Co. unit to Biederman , Kelly & Shaffer , New York . 
 Billings were n't disclosed . 
 Puerto Rico Telephone Co. awarded its $ 3 million account to West Indies & Grey , Grey Advertising 's office in Puerto Rico . 
 DIET COKE : Coca-Cola Co. yesterday said singer Elton John signed to appear in an ad for Diet Coke . 
 Details of the commercial , which will be part of the brand 's 1990 advertising campaign , were n't disclosed . 
 Mr. John becomes the latest of many music stars , including George Michael and Whitney Houston , to appear in ads for the diet drink . 
 Turner Broadcasting System Inc. said it formed a unit to make and distribute movies to theaters overseas and , eventually , to U.S. theaters , too . 
 The operator of cable-television networks said the new Turner Pictures unit will produce movies that will premiere on Turner Broadcasting 's Turner Network Television channel , or TNT , and then will be released internationally in movie theaters . 
 The unit 's first two offerings are slated to be `` The Secret Life of Ian Fleming , '' a dramatization about the former British spy who wrote the James Bond novels , and `` Treasure Island , '' produced by Charlton Heston , who also stars in the movie . 
 Ted Turner , Turner Broadcasting 's chairman , was named chairman of Turner Pictures , and Gerry Hogan , president of Turner Entertainment Networks , was named president of the unit . 
 In an interview , Mr. Hogan said the subsidiary 's primary mission will be to make movies for TNT and to distribute them internationally . 
 But he said Turner Broadcasting already has found some ideas that might work well as films for theatrical release in the U.S . 
 `` When that occurs , and when the time is right , we 'll release the films in the U.S. , '' he said , adding that Turner Pictures may develop such movies next year for domestic release in 1991 . 
 Turner has made several movies , docudramas and documentaries for its networks in recent years , but the company has never acted as a full-fledged movie studio and released its own pictures to theaters . 
 Mr. Hogan said `` The Secret Life of Ian Fleming '' and `` Treasure Island '' cost more than $ 6 million each to make , which is only about one-third the cost of most movies made for theatrical release . 
 The Turner move is in line with a cable-TV trend toward more original programming -- and toward finding more ways to amortize the high cost of producing films . 
 In July , Viacom Inc. formed Viacom Pictures to produce 12 low-budget movies a year that will premiere on Showtime network and be distributed later in various markets , including foreign theaters . 
 In a sign the stock slump has n't quieted Europe 's takeover fever , Cie . Financiere de Paribas said it intends to bid for one of France 's other large financial and industrial holding companies , Cie. de Navigation Mixte . 
 Paribas said that once it receives the go-ahead from French stock market authorities , it will offer to boost its Navigation Mixte stake to 66.7 % from the current 18.7 % . 
 Its cash-or-shares bid values Navigation Mixte at about 22.82 billion francs -LRB- $ 3.62 billion -RRB- , making this one of France 's largest-ever attempted takeovers . 
 The cost of buying the additional 48 % stake would be 10.95 billion francs -LRB- $ 1.74 billion -RRB- . 
 The move would greatly boost Paribas 's stake in the insurance , transport and food businesses , where Navigation Mixte is strong . 
 It also would make Paribas a major French ally of West Germany 's Allianz AG insurance group . 
 Allianz holds a 50 % stake in Navigation Mixte 's insurance interests , acquired three weeks ago . 
 Those include Rhin et Moselle Vie and Via Assurances . 
 Long considered a potential takeover target , Navigation Mixte had hoped Allianz would help protect it from raiders . 
 That idea may have backfired . 
 Paribas is Allianz 's main French bank , and the Munich-based group said it intends to stay neutral . 
 Navigation Mixte said it would n't have any comment until its board meets Wednesday . 
 But Navigation Mixte is loosely held and hard to defend . 
 `` The defensive options are limited , '' says Philippe Braye , a partner in portfolio management concern France Finance Quatre . 
 Who would bid against Paribas ? '' 
 If the Paribas bid succeeds , it will be the second time in two months a big French investment banking group has snapped up an insurance group . 
 Last month , Paribas 's archrival , Cie . Financiere de Suez , won a battle for Groupe Victoire , France 's second-largest private-sector insurer , which itself had just acquired West Germany 's Colonia Versicherung AG . 
 That complex bid was billed as France 's largest takeover ever -LRB- this one is slightly smaller -RRB- . 
 Moreover , Suez had just finished winning an even larger battle last year for control of Societe Generale de Belgique . 
 Paribas officials , once considered France 's toughest bankers , felt abashed at Suez 's success and its rapid growth . 
 Although Paribas denies it , analysts say the new bid in part simply reflects the continuing rivalry between France 's two largest investment banking groups . 
 It also reflects the broader pressure on companies in Europe to keep up as the European Community prepares to reduce internal trade barriers by 1992 . 
 Although Paribas Chairman Michel Francois-Poncet would n't rule out eventually selling all of Navigation Mixte 's insurance operations to Allianz , he stressed the potential for the two groups instead to cooperate . 
 He also told reporters the acquisition would give Paribas fresh diversity , bringing it properties in food and transport where it has been weak . 
 Navigation Mixte has investments in a sugar company , a food and canning concern , a bakery and bus and trucking firms , among others . 
 And Navigation Mixte has a huge hidden attraction . 
 Payment by Allianz for the insurance interests it has just bought will help swell the French concern 's treasury to an estimated 11 billion francs . 
 Paribas said it will bid 1,850 francs a share for Navigation Mixte shares that qualify for a full yearly dividend , and 1,800 francs for those created July 1 , which are eligible for partial dividends . 
 Alternatively , it said it would offer three Paribas shares , themselves eligible for dividends as of next Jan. 1 , for one Navigation Mixte share . 
 Paribas shares closed down 30 francs at 610 francs , and Navigation Mixte shares were suspended at 1,800 francs pending the outcome of the bid . 
 Paribas said it would publish details of its bid once authorities clear it . 
 This is one of the first bids under new takeover rules aimed at encouraging open bids instead of gradual accumulation of large stakes . 
 Some financial sources said privately that Paribas blundered in failing to move sooner for the insurance and industrial group , bidding only after speculation had pushed up the price . 
 Mr. Francois-Poncet responded that his group initially intended to take only a minority stake , striking an alliance with current management . 
 When notoriously independent-minded Navigation Mixte Chairman Marc Fournier rejected Paribas 's offer and began buying Paribas shares in retaliation , Mr. Francois-Poncet said , he felt obliged to bid for control . 
 He told reporters he had information that Mr. Fournier was preparing to buy as much as 20 % of Paribas , up from less than 5 % currently . 
 A bid against Paribas could n't be ruled out . 
 France 's second-largest government-owned insurance company , Assurances Generales de France , has been building its own Navigation Mixte stake , currently thought to be between 8 % and 10 % . 
 Analysts said they do n't think it is contemplating a takeover , however , and its officials could n't be reached . 
 Crude oil futures prices fell further as analysts and traders said OPEC oil producers are n't putting the brakes on output ahead of the traditionally weak first quarter . 
 In trading on the New York Mercantile Exchange , the U.S. benchmark West Texas Intermediate crude fell 39 cents a barrel to $ 19.76 for December delivery . 
 Petroleum products prices also declined . 
 Analysts pointed to reports that the Organization of Petroleum Exporting Countries is producing substantially more than its official limit of 20.5 million barrels a day , with some accounts putting the 13-nation group 's output as high as 23 million barrels a day . 
 That level of production did n't take its toll on futures prices for the fourth quarter , when demand is traditionally strong . 
 But because first-quarter demand is normally the weakest of the year , several market participants say , OPEC production will have to decline to keep prices from eroding further . 
 The group plans to meet in a month to discuss production strategy for early 1990 . 
 With prices already headed lower , news of a series of explosions at a major Phillips Petroleum Co. chemical facility on the Houston Ship Channel also was bearish for prices . 
 Even though such facilities use a relatively small amount of crude , analysts say , now the facility wo n't need any , at a time of already high availability . 
 The Phillips plant makes polyethylene , polypropylene and other plastic products . 
 A company official said the explosions began when a seal blew out . 
 Dozens of workers were injured , authorities said . 
 There was no immediate estimate of damage from the company . 
 Some petroleum futures traders say technical considerations now will help to put downward pressure on futures prices . 
 For instance , one trader said that prices inevitably will go lower now that they 've fallen below $ 20 a barrel . 
 `` Our technician is a little bearish now that we 've taken out $ 20 , '' he said . 
 In other commodity markets yesterday : COPPER : The selling that started on Friday continued yesterday 
 The December contract fell 3.85 cents a pound to $ 1.1960 . 
 London Metal Exchange warehouse stocks were down only 4,800 metric tons for the week to 84,500 tons ; expectations late last week were a drop of 10,000 to 15,000 tons . 
 The New York market made its high for the day on the opening and when it dropped below the $ 1.23-a-pound level , selling picked up as previous buyers bailed out of their positions and aggressive short sellers -- anticipating further declines -- moved in . 
 Fund selling also picked up at that point . 
 According to Bernard Savaiko , senior commodity analyst at PaineWebber , the only stability to the market came when short sellers periodically moved in to cover their positions by buying contracts . 
 This activity produced small rallies , which in turn attracted new short selling . 
 Mr. Savaiko noted that copper had a steep fall in spite of a weak dollar , which would normally support the U.S. copper market . 
 Such support usually comes from arbitragers who use a strong British pound to buy copper in New York . 
 `` The sell-off would probably have been worse if the dollar had been strong , '' he said . 
 Copper has been stuck in a trading range of $ 1.19 to $ 1.34 . 
 Mr. Savaiko believes that if copper falls below the bottom of this range the next significant support level will be about $ 1.04 . 
 PRECIOUS METALS : Platinum and palladium struggled to maintain their prices all day despite news stories over the weekend that recent cold fusion experiments , which use both metals , showed signs of producing extra heat . 
 January platinum closed down $ 2.80 an ounce at $ 486.30 , nearly $ 4 above its low for the day . 
 December palladium was off $ 1.55 an ounce at $ 137.20 . 
 Platinum is believed to have good support around $ 480 and palladium at around $ 130 . 
 Some traders were thought to be waiting for the auto sales report , which will be released today . 
 Such sales are watched closely by platinum and palladium traders because both metals are used in automobile catalytic converters . 
 Mr. Savaiko theorized that the news on cold fusion did n't affect the market yesterday because many traders have already been badly burnt by such stories . 
 He said the traders are demanding a higher level of proof before they will buy palladium again . 
 Also weighing on both metals ' prices is the role of the chief supplier , the Soviet Union . 
 Many analysts believe that the Soviets ' thirst for dollars this year to buy grain and other Western commodities and goods will bring them to the market whenever prices rally very much . 
 GRAINS AND SOYBEANS : Prices closed mixed as contracts reacted to largely offsetting bullish and bearish news . 
 On the Chicago Board of Trade , soybeans for November delivery closed at $ 5.63 a bushel , down half a cent , while the December wheat contract rose three-quarters of a cent to $ 4.0775 a bushel . 
 Supporting prices was the announcement late Friday of additional grain sales to the Soviet Union . 
 But acting as a drag on prices was the improved harvest weather over the weekend and the prospect for continued fair weather this week over much of the Farm Belt . 
 Strong farmer selling over the weekend also weighed on prices . 
 SUGAR : World prices tumbled , mostly from their own weight , according to analysts . 
 The March contract ended at 13.79 cents a pound , down 0.37 cent . 
 For the past week or so , traders have been expecting India to buy between 150,000 and 200,000 tons of refined sugar , and there have been expectations of a major purchase by Japan . 
 But with no reports of either country actually entering the market , analysts said , futures prices became vulnerable . 
 Developing countries such as India , some analysts said , seem to have made it a point to stay away whenever sugar reached the top of its trading range , around 14.75 cents , and wait for prices to return to the bottom of the range , around 13.50 cents . 
 But Erik Dunlaevy , a sugar analyst with Balfour Maclaine International Ltd. , said the explanation for the latest drop in sugar prices is much simpler : Speculators , he said , `` got too long too soon and ran into resistance around the old contract highs . '' 
 A PaineWebber analyst said that in light of a new estimate of a production increase of four million metric tons and only a modest increase in consumption , sugar is n't likely to rise above the top of its trading range without a crop problem in a major producing country . 
 COCOA : Futures rallied modestly . 
 The December contract rose $ 33 a metric ton to $ 1,027 , near its high for the day . 
 Gill & Duffus Ltd. , a British cocoa-trading house , estimated that the 1989-90 world cocoa surplus would be 231,000 tons , down from 314,000 tons for the previous year . 
 Market technicians were encouraged by the price patterns , which in the past have preceded sharp rallies . 
 Recent prices for cocoa have been near levels last seen in the mid-1970s . 
 At such prices , according to Mr. Savaiko , bargain hunting and short-covering -- buying back of contracts previously sold -- by speculators is n't uncommon . 
 But Mr. Savaiko expects stepped-up producer selling at around the $ 1,040 to $ 1,050 level . 
 He also noted that a strong sterling market yesterday might have helped cocoa in New York as arbitragers took advantage of the currency move . 
 Sandra Kaul , research analyst at Shearson Lehman Hutton , said the market pushed higher mainly in anticipation of a late harvest in the Ivory Coast , a major cocoa producer . 
 Rockwell International Corp. bought out Ikegai Corp. 's interest in Ikegai-Goss , a joint venture of the two companies based in Tokyo . 
 The price was 3.6 billion yen -LRB- $ 25 million -RRB- . 
 The agreement provides that Ikegai Corp. will remain a supplier to Ikegai-Goss , which makes printing presses for the newspaper industry . 
 The purchase was made by Rockwell Graphic Systems , a Chicago subsidiary of the El Segundo , Calif. , concern . 
 Ikegai-Goss , which has about 200 employees , is among the industry leaders in keyless inking technology , which reduces time and materials waste when preparing a press for printing . 
 The bond market , which sometimes thrives on bad news , cheered yesterday 's stock market sell-off and perceptions that the economy is growing weaker . 
 Early in the day , bonds rose modestly on economists ' forecasts that this week 's slate of economic data will portray an economy headed for trouble . 
 Such news is good for bonds because economic weakness sometimes causes the Federal Reserve to lower interest rates in an effort to stimulate the economy and stave off a recession . 
 For example , today the Department of Commerce is scheduled to release the September durable goods report . 
 The consensus forecast of 14 economists surveyed by Dow Jones Capital Markets Report is for a 1.2 % drop in September orders . 
 That would follow a 3.9 % advance in August . 
 Bonds received a bigger boost later in the day when stock prices moved broadly lower . 
 The Dow Jones Industrial Average fell 26.23 points to 2662.91 . 
 `` Bond investors have been watching stocks closely , '' said Joel Marver , chief fixed-income analyst at Technical Data Global Markets Group . 
 `` When you get a big sell-off in equities , money starts to shift into bonds , '' which are considered safer , he said . 
 The Treasury 's benchmark 30-year bond ended about point higher , or up about $ 5 for each $ 1,000 face amount , while the yield slid to 7.93 % from 7.98 % Friday . 
 Municipals ended mixed , while mortgage-backed and investment-grade corporate bonds rose . 
 Prices of high-yield , high-risk corporate securities ended unchanged . 
 In more evidence of the growing division between `` good '' and `` bad '' junk bonds , a $ 150 million issue by Imo Industries Inc. was snapped up by investors while underwriters for Beatrice Co. 's $ 350 million issue are considering restructuring the deal to attract buyers . 
 In the Treasury market , analysts expect bond prices to trade in narrow ranges this week as the market takes in positive and negative news . 
 `` On the negative side , the market will be affected by constant supply in all sectors of the market , '' said William M. Brachfeld , economist at Daiwa Securities America Inc . 
 On the other hand , we have economic news that is -LCB- expected to be -RCB- relatively positive for the bond market . 
 We will go back and forth with a tilt toward slightly lower yields , '' he said . 
 Today , the Treasury will sell $ 10 billion of new two-year notes . 
 Tomorrow , Resolution Funding Corp. , a division of a new government agency created to bail out the nation 's troubled thrifts , will hold its first bond auction at which it will sell $ 4.5 billion of 30-year bonds . 
 So far , money managers and other bond buyers have n't shown much interest in the Refcorp bonds . 
 Analysts have mixed views about the two-year note auction . 
 While some say the auction should proceed smoothly , others contend that yesterday 's sale of $ 2.58 billion of asset-backed securities by Ford Motor Credit Corp. may have siphoned some potential institutional buyers from the government 's note sale . 
 The division of auto maker Ford Motor Co. made its debut in the asset-backed securities market with the second-largest issue in the market 's four-year history . 
 The company offered securities backed by automobile loans through an underwriting group headed by First Boston Corp . 
 The issue yields 8.90 % and carries a guarantee covering 9 % of the deal from the company . 
 First Boston sweetened the terms from the original yield estimate in an apparent effort to place the huge offering . 
 The issue was offered at a yield nearly one percentage point above the yield on two-year Treasurys . 
 The only asset-backed deal larger than Ford 's was a $ 4 billion offering by General Motors Acceptance Corp. in 1986 . 
 Treasury bonds were to point higher yesterday in light trading . 
 The benchmark 30-year bond ended at a price of 102 , compared with 101 Friday . 
 The latest 10-year notes were quoted late at 100 to yield 7.90 % , compared with 100 to yield 7.97 % . 
 The latest two-year notes were quoted late at 100 to yield 7.84 % . 
 Short-term rates rose yesterday at the government 's weekly Treasury bill auction , compared with the previous bill sale . 
 The Treasury sold $ 7.81 billion of three-month bills with an average discount rate of 7.52 % , the highest since the average of 7.63 % at the auction on Oct. 10 . 
 The $ 7.81 billion of six-month Treasury bills were sold with an average discount rate of 7.50 % , the highest since the average of 7.60 % at the Oct. 10 auction . 
 The rates were up from last week 's auction , when they were 7.37 % and 7.42 % , respectively . 
 Here are auction details : 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 360-day year , while the coupon-equivalent yield is based on a 365-day year . 
 Both issues are dated Oct. 26 . 
 The 13-week bills mature Jan. 25 , 1990 , and the 26-week bills mature April 26 , 1990 . 
 Investment-grade corporates closed about point higher in quiet trading . 
 In the junk bond market , Imo Industries ' issue of 12-year debentures , considered to be one of the market 's high-quality credits , was priced at par to yield 12 % . 
 Peter Karches , managing director at underwriter Morgan Stanley & Co. , said the issue was oversubscribed . 
 `` It 's a segmented market , and if you have a good , strong credit , people have an appetite for it , '' he said . 
 Morgan Stanley is expected to price another junk bond deal , $ 350 million of senior subordinated debentures by Continental Cablevision Inc. , next Tuesday . 
 In light of the recent skittishness in the high-yield market , junk bond analysts and traders expect other high-yield deals to be sweetened or restructured before they are offered to investors . 
 In the case of Beatrice , Salomon Brothers Inc. is considering restructuring the reset mechanism on the $ 200 million portion of the offering . 
 Under the originally contemplated terms of the offering , the notes would have been reset annually at a fixed spread above Treasurys . 
 Under the new plan being considered , the notes would reset annually at a rate to maintain a market value of 101 . 
 Price talk calls for the reset notes to be priced at a yield of between 13 % and 13 % . 
 Activity in derivative markets was strong with four new real estate mortgage investment conduits announced and talk of several more deals in today 's session . 
 The Federal National Mortgage Association offered $ 1.2 billion of Remic securities in three issues , and the Federal Home Loan Mortgage Corp. offered a $ 250 million Remic backed by 9 % 15-year securities . 
 Part of the reason for the heavy activity in derivative markets is that underwriters are repackaging mortgage securities being sold by thrifts . 
 Traders said thrifts have stepped up their mortgage securities sales as the bond market has risen in the past two weeks . 
 In the mortgage pass-through sector , active issues rose but trailed gains in the Treasury market . 
 Government National Mortgage Association 9 % securities for November delivery were quoted late yesterday at 98 , up ; and Freddie Mac 9 % securities were at 97 , up . 
 The Ginnie Mae 9 % issue was yielding 8.36 % to a 12-year average life assumption , as the spread above the Treasury 10-year note widened slightly to 1.46 percentage points . 
 A $ 575 million San Antonio , Texas , electric and gas system revenue bond issue dominated the new issue sector . 
 The refunding issue , which had been in the wings for two months , was one of the chief offerings overhanging the market and limiting price appreciation . 
 But alleviating that overhang failed to stimulate much activity in the secondary market , where prices were off to up point . 
 An official with lead underwriter First Boston said orders for the San Antonio bonds were `` on the slow side . '' 
 He attributed that to the issue 's aggressive pricing and large size , as well as the general lethargy in the municipal marketplace . 
 In addition , he noted , the issue would normally be the type purchased by property and casualty insurers , but recent disasters , such as Hurricane Hugo and the Northern California earthquake , have stretched insurers ' resources and damped their demand for bonds . 
 A $ 137.6 million Maryland Stadium Authority sports facilities lease revenue bond issue appeared to be off to a good start . 
 The issue was oversubscribed and `` doing very well , '' according to an official with lead underwriter Morgan Stanley . 
 Activity quieted in the New York City bond market , where heavy investor selling last week drove yields on the issuer 's full faith and credit backed bonds up as much as 0.50 percentage point . 
 Japanese government bonds ended lower after the dollar rose modestly against the yen . 
 The turnaround in the dollar fueled bearish sentiment about Japan 's bond market . 
 The benchmark No. 111 4.6 % bond due 1998 ended on brokers ' screens at a price of 95.39 , off 0.28 . 
 The yield rose to 5.38 % . 
 West German bond prices ended lower after a day of aimless trading . 
 The benchmark 7 % bond due October 1999 fell 0.20 point to 99.80 to yield 7.03 % , while the 6 % notes due July 1994 fell 0.10 to 97.65 to yield 7.34 % . 
 British government bonds ended slightly higher in quiet trading as investors looked ahead to today 's British trade report . 
 The benchmark 11 % Treasury bond due rose to 111 to yield 10.11 % , while the 12 % issue of 1995 rose to 103 to yield 11.01 % . 
 The croaker 's done gone from the hook -- damn My language sure goes to pot down here on the coast . '' 
 The husky blond guide with the Aggie cap twists his face in mock fury . 
 I got to get back to school and straighten out my English . '' 
 He has two more years at Texas A&M . 
 Right now he takes people out to fish in the bays behind the barrier islands that curve for hundreds of miles along the eastern coast of Texas , enclosing milky green lagoons behind ridges of sand and grassy scrub that rim the deep blue of the Gulf beyond . 
 There have been three days of hot , wind-swept rain , and now with the first sun we are after speckled seatrout , which with redfish provides most of the game fishing hereabouts . 
 The little radio fizzes as other boats want to see if we have found any fish -- spotting location is everything in this sport . 
 Negative answers crackle back . 
 The fish often are plentiful around the pilings of the old gas wells that dot the flat surface like the remains of sunken ships . 
 We go from one to the other . 
 The sun is hot now though it 's only 8 in the morning . 
 The great silver clouds on the horizon build themselves on the pale water . 
 We cruise toward another set of pilings . 
 The guide scoops into a pail and puts a frantically wiggling croaker on the hook . 
 Then he casts out . 
 Just wait for that tap-tap , that thump-thump . 
 It comes real gentle before it pulls . 
 Do n't forget , trout have very soft mouths . '' 
 The radio queries again . 
 `` Pickin ' one or two , '' says the guide , chuckling . 
 You can tell they 've got nothin ' . '' 
 A pair of black skimmers zig-zag past close to the surface . 
 Soon we have our limit of the shimmering fish stippled in rose-gold and black . 
 And we are the first back at the dock , where the great blue herons stand waiting by the cleaning benches . 
 The guide is young and he knows this business but he wants a different life after college , such as working for IBM and wearing a necktie . 
 This must be the last big stretch of the American seacoast that is `` undeveloped . '' 
 There are a few ramshackle fishing towns with quiet atolls of resort houses nearby . 
 People are not apt to be self-conscious about the place or themselves . 
 Texas is big and beautiful and they live here , that 's all . 
 Jutting out just to the north of us is the Blackjack Peninsula -LRB- after the oak , not the game -RRB- which forms the core of the Aransas Wildlife Refuge . 
 It is famous as the winter home of the whooping crane , that symbol of the destruction of wild America . 
 Last year a gunner shot a whooper by mistake thinking that it was a snow goose . 
 He paid an immense fine and was lucky , according to a local wag , to escape the gas chamber . 
 The peninsula comes off the vast southeastern alluvial plain with fields of rice and cotton and sorghum as far as the eye can see . 
 Near the coast there are dense coverts of live oak interspersed with marshes and prairies . 
 Deer , wild hog , armadillos and alligators are the glamour quadrupeds and the birds are innumerable , especially the herons and the spoonbills . 
 Above the blossoms of lantana and scarlet pea the inky-brown and golden palamedes butterfly floats on its lazy wingbeat . 
 Inland a few miles from the refuge there is a place called Tivoli , with a white church , a gas station and a grocery , the houses relatively close together for such a settlement in these parts . 
 `` Tivoli Motel , '' I read a sign in the usual pronunciation of the name as we whoosh through . 
 `` Here in south Texas we say Tie-vole-ee , '' my host gently corrects . 
 Mr. King is the director of the Foreign Press Center in New York . 
 AEG AG and Siemens AG said they will launch their previously announced joint venture for power semiconductors in January . 
 The two West German electronics concerns said they have set up European Power Semiconductor Co. to merge their activities in the field . 
 AEG and Siemens each will hold a 50 % stake in the venture . 
 The joint venture will have nominal capital of 50 million marks -LRB- $ 26.9 million -RRB- and 700 employees . 
 It will develop , produce and market high-performance electronic parts . 
 Siemens is West Germany 's largest electronics group . 
 AEG is 80 % owned by Daimler-Benz AG , the country 's biggest industrial concern . 
 Dana Corp. said its third-quarter net income fell 27 % to $ 29.6 million , or 72 cents a share , from $ 40.7 million , or $ 1 a share , a year earlier . 
 Sales dropped 4 % to $ 1.12 billion from $ 1.17 billion . 
 The company , which supplies transmissions and other drive-train parts to auto makers , said about half the earnings drop came from the `` virtual collapse '' of the Venezuelan auto industry . 
 The Venezuelan currency plummeted this year , making it difficult for auto makers there to afford imported parts . 
 Dana also said it was hurt by slumping U.S. truck sales and by a strike at a parts supplier . 
 The company , based in Toledo , Ohio , had said it expected reduced third-quarter profit . 
 Mary Anne Sudol , an analyst at Fitch Investors in New York , said automotive suppliers were reporting lower profit almost `` across the board . '' 
 Southwood J. Morcott , Dana 's president , said the company 's decision to approve its normal fourth-quarter dividend indicated its underlying strength . 
 Norimasa Furuta , president of Japan 's Mazda Motor Corp. , said the Japanese car maker is planning joint production with Ford Motor Co. in Europe ahead of the European Community 's 1992 integration . 
 Mr. Furuta did n't disclose further details of the arrangement at a news conference , but said the project would be undertaken with Ford 's European subsidiary . 
 A Ford official confirmed in Tokyo that the U.S. motor vehicle maker is studying such an arrangement . 
 At age eight , Josephine Baker was sent by her mother to a white woman 's house to do chores in exchange for meals and a place to sleep -- a place in the basement with the coal . 
 At age 19 , she was a Paris sensation , transformed from unwanted child to international sex symbol in just over a decade . 
 It is the stuff of dreams , but also of traumas . 
 Only the bravest spirits survive such roller coasters . 
 And , for Ms. Baker , the ride was far from over . 
 Her bare breasts , her dancing , her voice , her beauty and , perhaps most famously , her derriere , were prominent attractions , but courage of a rare sort made her remarkable life possible . 
 Bricktop , another American black woman who found a measure of fame in Paris , said : `` I do n't think I 've ever known anyone with a less complicated view of life , or whose life was more complicated than Josephine 's . '' 
 Men were a constant complication . 
 Baker had lots of them . 
 But she did n't trust them and did n't reward trust . 
 As she saw one key love affair , the problem was n't her infidelity , it was his jealousy . 
 Her appetite for children also was large . 
 She adopted 12 of assorted races , naming them the Rainbow Tribe , and driving her husband first to despair and then to Argentina . 
 She made money , but spent more . 
 Friends pitched in . 
 Finally , Prince Rainier and Princess Grace saved her with the offer of a house in Monaco . 
 Another lifelong complication , as Phyllis Rose makes clear in `` Jazz Cleopatra : Josephine Baker in Her Time '' -LRB- Doubleday , 321 pages , $ 22.50 -RRB- , was racism . 
 Baker had the good luck to arrive in 1925 Paris , where blacks had become exotic . 
 African art was in vogue and some intellectuals were writing breathlessly of a dawning age to be inspired by blacks . 
 To be exotic was to be patronized as well as prized , but for the most part Paris was a friendly island in a racist world . 
 Baker had bitter experience of bigotry from her St. Louis childhood and her days in New York theater , where she was judged too dark for an all-black chorus line -LRB- performing of course for all-white audiences -RRB- . 
 Paris loved her at first sight . 
 `` She just wiggled her fanny and all the French fell in love with her , '' sniffed the literary world 's Maria Jolas , not entirely inaccurately . 
 `` One can hardly overemphasize the importance of her rear end , '' Ms. Rose writes . 
 Ms. Rose , who teaches literature at Wesleyan University , quickly proceeds to overemphasize , claiming that Baker 's dancing `` had uncovered a new region for desire '' and thereby ignoring centuries of tributes to the callipygous . 
 `` Jazz Cleopatra '' contains other , more important , false notes that undermine what is , for the most part , a lively account of a life already familiar from earlier works . 
 It is easy to see why Baker , a free spirit who broke many of the restraints convention places on women , attracts Ms. Rose , the author of `` Parallel Lives , '' a wonderful study of Victorian marriage . 
 Still , even the title raises questions about the author 's vision of her subject . 
 Baker 's art was jazz only by the widest stretch of the term . 
 To find parallels , other than sexual appeal , with Cleopatra , requires an equal stretch . 
 Baker was 68 years old when she died in Paris , two days after the sold-out opening of her newest show : a movie-like ending to what was a cinematic life . 
 In fact , Ms. Baker played scenes in Casablanca that could have made it into `` Casablanca . '' 
 During World War II , her uncomplicated view of life led her to the conclusion that the Nazis were evil and must be resisted , a decision made by only about 2 % of French citizens . 
 She was devoted to Charles de Gaulle 's cause , accepting great financial sacrifice and considerable risk to become first a spy and then a one-woman USO tour for the forces of Free France . 
 In Humphrey Bogart 's nightclub , Victor Laszlo leads Free French sympathizers in `` La Marseillaise '' to drown out the Nazis . 
 The night the Germans occupied all of France , Baker performed in Casablanca . 
 The Free French wore black arm bands , and when she sang `` J'ai J'ai deux amours '' they wept . 
 Ms. Rose is best on the early years and World War II . 
 In her introduction , Ms. Rose writes that she feels she has much in common with Baker , but as `` Jazz Cleopatra '' goes on , it seems more rushed , as though the author were growing less interested . 
 It does n't help that sometimes Ms. Rose 's language fails to deliver the effect she appears to want . 
 One chapter opens : `` World War II was not one of France 's glorious moments . '' 
 Elsewhere , in an attempt to explain without stating it plainly that Baker had a large gay following later in her career when she was an overdressed singer rather than underdressed dancer , Ms. Rose writes : `` She was a female impersonator who happened to be a woman . '' 
 One devoted fan who fell under Baker 's spell in 1963 and began collecting Baker memorabilia was Bryan Hammond . 
 In `` Josephine Baker '' -LRB- Jonathan Cape , 304 pages , $ 35 -RRB- , which was published in Britain last year and distributed in the U.S. this month , Mr. Hammond has used his collection to produce an album of photographs and drawings of the star . 
 The text by Patrick O'Connor is a tough read , but the pictures make her magnetism clear and help explain why Ernest Hemingway called Baker `` The most sensational woman anybody ever saw . 
 Or ever will . '' 
 Mr. Lescaze is foreign editor of the Journal . 
 Manville , having rid itself of asbestos , now sells fiberglass , forest products , minerals and industrial goods . 
 Heady stuff it 's not . 
 But Manville 's ownership is unusual , and it has caught the eye of some canny -- and patient -- investors . 
 The Denver-based concern , which emerged from bankruptcy-law proceedings late last year , is controlled by the Manville Personal Injury Settlement Trust . 
 The trust , which owns 80 % of Manville 's stock on a fully diluted basis , is a separate legal entity that is settling claims with asbestos victims . 
 When and if the trust runs out of cash -- which seems increasingly likely -- it will need to convert its Manville stock to cash . 
 But as an 80 % owner , if it tried to sell much of its stock in the market , it would likely depress the price of its shares . 
 Some investors say there is a good chance that the trust will , instead , seek to convert the company 's shares to cash , in some sort of friendly restructuring that would n't involve just dumping stock on the market . 
 `` Their principal asset is Manville common stock , '' says Jeffrey Halis , who runs Sabre Associates , an investment fund that owns Manville shares . 
 If they tried to sell , they 'd be chasing their own tail . 
 What makes the most sense is to find someone who wants to buy the whole company or cause a recapitalization of all shares . '' 
 The trust is n't commenting on when it might need to liquefy its Manville stock . 
 However , the trust 's cash flow from investments is far short of its payments to asbestos victims . 
 Its cash and liquid securities fell by $ 338 million in the first six months of 1989 . 
 The trust also will receive $ 75 million a year starting in 1991 on a bond it holds from Manville . 
 And , beginning in 1992 , it will have a claim on as much as 20 % of Manville 's annual net income . 
 Even so , the trust would seem to be facing a cash crunch . 
 As of June 30 , it had settled only about 15,000 of the 81,000 received claims from asbestos victims , for an average of $ 40,424 each . 
 The average should drop over time , since the most expensive claims are being settled first -RRB- . 
 And as of midyear , settled but unpaid claims amounted to $ 136 million -- more than half the trust 's total of $ 268 million in cash and marketable securities . 
 `` At some point , we 're going to need an infusion of funds , '' a person close to the trust says . 
 Even before then , the trust may be eager to unload Manville stock . 
 It does n't pay a dividend , and this trust needs income . 
 Moreover , with 88 % of its assets tied up in Manville , the trust is badly in need of diversification . 
 `` Obviously , a diversified portfolio would have less risk , '' the person close to the trust says . 
 Manville itself does n't rule out a restructuring . 
 Though the ink is barely dry on its new , post-bankruptcy law structure , Bill Bullock , Manville 's head of investor relations , says the company is continually pondering `` whether there is a better way to be structured . 
 We understand that the trust is ultimately going to need to sell some of our shares , '' he says . 
 Of course , one option would be for Manville to buy out the trust 's shares -- which would do little to benefit public stockholders . 
 But the trust , in most cases , is forbidden from seeking a buyer for only its shares before November 1993 . 
 And both the trust and Manville are seeking to avoid the bad publicity that , in the asbestos era , tarred the Manville name . 
 Thus , analysts say , the trust is unlikely to do anything that would hurt Manville 's other shareholders . 
 `` This is a rare case of a company with a big majority holder which will probably act in the interests of the minority holders , '' one investor says . 
 Even if there is no restructuring , Manville seems to be attractive long-term . 
 Its stock , at 9 , trades at about 8 times estimated 1989 earnings -- an appropriately low multiple for a company with recession-sensitive customers . 
 Mr. Bullock says 45 % of revenues are tied to construction . 
 Analysts predict little or no near-term growth . 
 They are , nonetheless , high on Manville 's management . 
 `` It 's one of the best in the business , '' says Salomon Brothers analyst Stephen Dobi . 
 And he says Manville has the financial flexibility to buy other companies at the best possible other construction-related firms are hurting and selling cheap . 
 With a conservative debt-to-equity ratio of 1-to-1 -- and $ 329 million in cash -- Manville is indeed actively on the prowl . 
 So far , as a price-conscious shopper , Manville has n't bought much . 
 Paul Kleinaitis , an analyst at Duff & Phelps , says , `` Even though they have borrowing power , they have been disciplined about acquisitions . '' 
 And Mr. Kleinaitis says that with 80 % of its stock in friendly hands , Manville is the rare publicly traded company that can ignore short-term stock fluctuations and plan for the long haul . 
 Manville -LRB- NYSE ; Symbol : MVL -RRB- 
 Business : Forest products and roofing 
 Year ended Dec. 31 , 1988 : Sales : $ 2.06 billions Net loss : $ 1.30 billion 
 Third quarter , Sept. 30 , 1989 : Per-share earnings : 30 cents vs. 44 cents 
 Average daily trading volume : 74,351 shares 
 Common shares outstanding : 120 million 
 Includes $ 1.29 billion extraordinary charge . 
 Year ago figure is restated . 
 Emerson Electric Co. and Robert Bosch G.m.b . H. said the Federal Trade Commission has requested additional information from the two companies about their announced intention to acquire Vermont American Corp. for $ 40 a share , or about $ 440 million . 
 Yesterday , in composite trading on the American Stock Exchange , Vermont American common closed at $ 39.75 , off 25 cents . 
 The FTC 's request was `` not unusual '' and Emerson will make a `` full and prompt '' response , according to a spokesman . 
 Spokesmen for Emerson and Vermont American , which has agreed to be acquired , said they do n't anticipate `` any problems '' with the completion of the transaction . 
 An FTC spokesman said the matter is `` in a non-public posture at this time '' and declined to comment further . 
 Emerson and Bosch , through their joint acquisition arm , Maple Acquisition , have begun a cash tender offer for all of Vermont 's common shares outstanding . 
 The offer , set to expire Nov. 1 , may be extended pending the timing and resolution of the FTC request , the companies said . 
 St. Louis-based Emerson and Stuttgart-based Bosch make electrical and electronic products , including power tools . 
 The Vermont American acquisition is designed to enhance their position in the accessories portion of the power-tool industry . 
 Santa Fe Pacific Corp. is preparing a plan to sell a 20 % stake in its large real estate unit to a California public employee pension fund for $ 400 million , after which it would spin off the realty operation to shareholders . 
 The plan places an indicated value on the real estate operation , Santa Fe Pacific Realty Corp. , of $ 2 billion . 
 Santa Fe Pacific directors are expected to review the plan at a meeting today , according to people familiar with the transaction . 
 If approved , the sale is expected to close by year 's end , with the spinoff occurring by the end of 1992 . 
 In composite trading on the New York Stock Exchange yesterday , Santa Fe Pacific closed at $ 20.625 , down 25 cents . 
 Santa Fe Pacific Realty is a major California land and building owner whose prime properties include 1,850 undeveloped acres in the San Francisco Bay area , and several office sites . 
 A spokesman said the properties survived without significant damage in last week 's Northern California earthquake . 
 As a result of the partial sale and spinoff , the $ 56 billion California Public Employees Retirement System would obtain two seats on the board of the real estate operation , according to officials of the fund , who described the plan . 
 A spokesman for Chicago-based Santa Fe Pacific confirmed that negotiations were being held with the fund . 
 Also holding two seats each on the board , they said , would be Olympia & York Developments Ltd. , controlled by the Reichmann family of Canada , and Itel Corp. , controlled by Chicago businessman Sam Zell . 
 The Reichmanns and Mr. Zell , the largest holders of Santa Fe Pacific stock , have been looking for ways to raise the value of their investments , including possible spinoffs . 
 Itel bought a 17 % stake in Sante Fe Pacific last year and Olympia & York later purchased about a 20 % stake ; they would have interests in the new realty company in line with their holdings in Sante Fe Pacific . 
 The sale and spinoff of the real estate unit is the first phase of what could lead to the breakup of Santa Fe Pacific into free-standing companies for its railroad and energy operations , as well as real estate . 
 The debt-laden parent has been under pressure from large shareholders to boost the company 's share price . 
 At the same time it has been caught in an earnings squeeze . 
 The California pension fund 's planned investment in the real estate unit is unusual . 
 Pension funds rarely own as much as a 20 % stake in what is expected to be a publicly traded company . 
 In addition , pension funds are rarely given seats on company boards and most often try to avoid them because of legal concerns . 
 But fund officials said the Santa Fe Pacific Realty investment provides an opportunity to buy a stake in a large real estate portfolio heavily weighted with California properties . 
 It also marks a `` major commitment to -LCB- real estate -RCB- development , which we have n't been involved with before , '' said Dale Hanson , the fund 's executive director . 
 Under the proposed plan , the fund would also lend Santa Fe Pacific Realty $ 75 million in the form of a note that would be convertible into additional shares of the realty company after the second year at the then-prevailing market price . 
 The note would accrue interest at the rate of 13.5 % a year , which would be payable to the fund after five years , according to Stephen E. Roulac , a real estate consultant working for the fund . 
 The purpose of the note is to provide added capital for the spun-off company in a form that will save it spending cash on immediate interest payments , Mr. Roulac said . 
 The spun-off concern `` clearly will be one of the dominant real estate development companies with a prime portfolio , '' he said . 
 For the last year , Santa Fe Pacific has redirected its real estate operations toward longer-term development of its properties , hurting profits that the parent had generated in the past from periodic sales from its portfolio . 
 Real estate operating income for the first nine months fell to $ 71.9 million from $ 143 million a year earlier , the company said . 
 In a statement late yesterday , Santa Fe Pacific 's chairman , Robert D. Krebs , said that Santa Fe Pacific Realty would repay more than $ 500 million in debt owed to the parent before the planned spinoff . 
 That would help reduce Santa Fe Pacific 's remaining debt to about $ 600 million from a high of $ 3.7 billion in early 1988 . 
 It was n't clear where Santa Fe Pacific expected to obtain the payment of more than $ 500 million , which would be well above the $ 400 million that California pension fund officials say they plan to provide 
 The realty unit might take on new debt or obtain additional investors , among other possibilities . 
 The Santa Fe Pacific spokesman declined to comment on that aspect , saying the deal was still under negotiation . 
 Santa Fe Pacific Realty owns 2.8 million acres of property , including 219 buildings with more than 11 million square feet of space . 
 It also holds nearly 40,000 acres of raw land with development potential , but under a previously announced strategy , the company has targeted building on 5,400 acres in California , Arizona and the Chicago area . 
 Among those are the 1,850 acres in the San Francisco Bay area , including 208 acres in the Mission Bay area . 
 The California pension fund , which has $ 16 billion already invested in real estate and mortgages , could be a valuable funding source for that development , although it is n't obliged to make further investments . 
 The fund is the nation 's largest public employee fund , and it has a growing cash flow now topping $ 3 billion a year . 
 Fund officials negotiated the final structure of the proposed deal with Santa Fe Pacific , but they were approached with the idea by real estate brokers JMB Realty Corp. of Chicago . 
 JMB officials are expected to be hired to represent the pension fund on the Santa Fe Pacific Realty board , Mr. Roulac said , to insulate the fund from potential liability problems . 
 GAF , Part III is scheduled to begin today . 
 After two mistrials , the stakes in the stock manipulation trial of GAF Corp. and its vice chairman , James T. Sherwin , have changed considerably . 
 The first two GAF trials were watched closely on Wall Street because they were considered to be important tests of the government 's ability to convince a jury of allegations stemming from its insider-trading investigations . 
 In an eight-count indictment , the government charged GAF , a Wayne , N.J. , chemical maker , and Mr. Sherwin with illegally attempting to manipulate the common stock of Union Carbide Corp. in advance of GAF 's planned sale of a large block of the stock in 1986 . 
 The government 's credibility in the GAF case depended heavily on its star witness , Boyd L. Jefferies , the former Los Angeles brokerage chief who was implicated by former arbitrager Ivan Boesky , and then pointed the finger at Mr. Sherwin , takeover speculator Salim B. Lewis and corporate raider Paul Bilzerian . 
 The GAF trials were viewed as previews of the government 's strength in its cases against Mr. Lewis and Mr. Bilzerian . 
 Mr. Jefferies 's performance as a witness was expected to affect his sentencing . 
 But GAF 's bellwether role was short-lived . 
 The first GAF trial ended in a mistrial after four weeks when U.S. District Judge Mary Johnson Lowe found that a prosecutor improperly , but unintentionally , withheld a document . 
 After 93 hours of deliberation , the jurors in the second trial said they were hopelessly deadlocked , and another mistrial was declared on March 22 . 
 Meanwhile , a federal jury found Mr. Bilzerian guilty on securities fraud and other charges in June . 
 A month later , Mr. Jefferies was spared a jail term by a federal judge who praised him for helping the government . 
 In August , Mr. Lewis pleaded guilty to three felony counts . 
 Nevertheless , the stakes are still high for the players directly involved in the GAF case . 
 The mistrials have left the reputations of GAF , Mr. Sherwin and GAF Chairman Samuel Heyman in limbo . 
 For Mr. Sherwin , a conviction could carry penalties of five years in prison and a $ 250,000 fine on each count . 
 GAF faces potential fines of $ 500,000 for each count . 
 Individuals familiar with the case said that throughout September , defense attorneys were talking with the government in an effort to prevent a trial , but by the end of the month the talks had ended . 
 There is much speculation among attorneys not involved that the strategy of GAF 's attorney , Arthur Liman , and Mr. Sherwin 's counsel , Stephen Kaufman , will include testimony by Mr. Sherwin or Mr. Heyman . 
 Neither testified at the previous trials . 
 For now , defense attorneys are tight-lipped about their plans . 
 Max Gitter , another GAF defense attorney , said yesterday , `` As we go in for the third time , Yogi Berra 's famous line is apt : ` It 's deja vu all over again . ' '' 
 DALKON SHIELD CLAIMANTS hope to stop reorganization-plan appeal . 
 Attorneys for more than 18,000 women who claim injuries from the Dalkon Shield contraceptive device have asked the U.S. Supreme Court to refuse to hear an appeal of the bankruptcy-law reorganization plan for A.H. Robins Co. , which manufactured the device . 
 The dispute pits two groups of claimants against each other . 
 Baltimore attorney Michael A. Pretl and 17 other attorneys representing 18,136 claimants in the U.S. and abroad argue that the appeal would delay -- and perhaps even destroy -- a $ 2.38 billion settlement fund that is the centerpiece of the reorganization plan . 
 The bankruptcy-court reorganization is being challenged before the Supreme Court by a dissident group of claimants because it places a cap on the total amount of money available to settle claims . 
 It also bars future suits against Robins company officials , members of the Robins family and Robins 's former insurer , Aetna Life & Casualty Co . 
 The latter provision is `` legally unprecedented , '' said Alan B. Morrison , a public interest lawyer in Washington , D.C. , who is challenging the plan on behalf of 900 claimants . 
 More than 100,000 claims against Robins are pending . 
 The company made and marketed the Dalkon Shield in the early 1970s amid mounting evidence that it could cause serious injuries . 
 Robins has been in proceedings under Chapter 11 of the U.S. Bankruptcy Code since August 1985 ; such proceedings give it protection from creditor lawsuits while it works out a plan for paying its debts . 
 American Home Products Corp. wants to acquire Robins , but only if all legal challenges to the plan are exhausted . 
 In a brief filed with the Supreme Court last week , Mr. Pretl criticizes the appeal for raising `` abstract '' and `` theoretical '' legal issues , while jeopardizing the proposed reorganization and the settlement payments to claimants . 
 The Supreme Court is scheduled to consider the case Nov. 3 and may issue a decision as early as Nov. 6 . 
 JURY ` S CRIMINAL CONVICTION under Superfund law is a first . 
 Charles A. Donohoo , sole proprieter of a Louisville , Ky. , demolition company , was found guilty of violating the Superfund law as well as the Clean Air Act . 
 Criminal convictions under the federal Superfund law are rare , and the decision is the first jury verdict in such a case . 
 Under Superfund , those who owned , generated or transported hazardous waste are liable for its cleanup , regardless of whether their actions were legal at the time . 
 Environmental lawyers say virtually all of the Superfund cases to date have involved civil penalties designed to insure cleanup of past polluting activities . 
 But Superfund also contains a criminal provision concerning the release of toxic substances into the environment . 
 In 1986 Congress strengthened the penalty by making it a felony . 
 Mr. Donohoo was convicted in Louisville late last month of violating Superfund by failing to report the release of asbestos into the environment from a building he was demolishing . 
 He was also convicted of failing to properly remove asbestos from the building , a violation of the Clean Air Act . 
 The government sought a criminal penalty because `` no cleanup is possible here . 
 Once -LCB- asbestos -RCB- is released into the environment , it can lodge anywhere , '' says Richard A. Dennis , the assistant U.S. attorney who prosecuted the case . 
 Mr. Donohoo is scheduled to be sentenced Dec. 11 . 
 His lawyer could not be reached for comment . 
 Mr. Donohoo faces as much as three years in prison and a $ 250,000 fine for the Superfund conviction and as much as one year in prison and a $ 100,000 fine for the violation of the Clean Air Act . 
 TED BUNDY'S LAWYERS switch to victims ' side in death-sentence case . 
 Wilmer , Cutler & Pickering , the Washington , D.C. , law firm that spent over $ 1 million fighting the execution of mass-murderer Ted Bundy -- who eventually was executed -- has taken on another death penalty case before the Supreme Court , this time on the side of the family of four murder victims in Arkansas . 
 The law firm has filed a friend-of-the-court brief jointly with the Washington Legal Foundation , a conservative legal group . 
 The key issue in the case , which the law firm is handling without a fee , or pro bono , is whether a person sentenced to death can voluntarily waive his rights of appellate review . 
 The murderer , Ronald Gene Simmons , was convicted of killing 14 people . 
 Another murderer on death row has appealed Mr. Simmons 's death sentence in a `` next friend '' capacity . 
 Wilmer Cutler 's brief argues that there is no mandatory appellate review of capital sentences and that the inmate who filed the appeal lacks proper standing . 
 P.J. Mode , Wilmer Cutler 's managing partner , says the trial team that represented Mr. Bundy was asked by the firm 's pro bono committee whether the new case posed a conflict and that no objections were raised . 
 The coupling of the law firm and the Washington Legal Foundation is odd also , because Wilmer Cutler was one of the firms singled out for criticism two years ago by the conservative legal group for displaying a liberal bias in its pro bono work . 
 `` We give them a lot of credit for taking this case , '' says WLF 's Alan Slobodin . 
 THE CASE OF THE FAKE DALIS : In federal court in Manhattan , three defendants pleaded guilty to charges of fraud in connection with the sale of fake Salvador Dali lithographs . 
 James Burke and Larry Evans , formerly owners of the now-defunct Barclay Gallery , and Prudence Clark , a Barclay sales representative , were charged with conducting high-pressure telephone sales in which they misrepresented cheap copies of Dali artwork as signed , limited-edition lithographs . 
 The posters were sold for $ 1,300 to $ 6,000 , although the government says they had a value of only $ 53 to $ 200 apiece . 
 Henry Pitman , the assistant U.S. attorney handling the case , said about 1,000 customers were defrauded and that Barclay 's total proceeds from the sales were $ 3.4 million . 
 Attorneys for Messrs. Burke and Evans and Ms. Clarke said that although their clients admitted to making some misrepresentations in the sales , they had believed that the works were authorized by Mr. Dali , who died in January . 
 The posters were printed on paper pre-signed by Mr. Dali , the attorneys said . 
 Westamerica Bancorp. said Richard W. Decker resigned as president and chief executive officer after only a year on the job because of `` differences '' with the board . 
 The banking company could n't be reached to comment beyond a written announcement . 
 It did n't specify the nature of the differences , saying only that they related to `` management style '' and `` strategic objectives . '' 
 Westamerica said Mr. Decker 's posts were assumed by David Payne , Westamerica 's chairman , who at 34 years of age becomes one of the youngest chief executives of a sizable bank in the country . 
 Mr. Decker is about 45 years old . 
 Neither Mr. Payne nor Mr. Decker could be reached to comment . 
 Westamerica has about $ 1.3 billion of assets and is the largest independent bank in northern California . 
 It controls about 35 % of the affluent Marin County market across the Golden Gate bridge from San Francisco . 
 Mr. Decker 's resignation surprised many industry officials . 
 He was brought to the company in September 1988 after 15 years at Los Angeles-based First Interstate Bancorp . 
 The bank had been suffering in late 1987 from a slew of bad real estate loans made in Arizona . 
 When he was hired , Mr. Payne lauded Mr. Decker 's `` extraordinary... skills '' and his `` outstanding reputation as one of the West 's brightest bankers . '' 
 Though the bank is n't performing as well as some of its competitors in the lucrative California market , its condition has improved since Mr. Decker took over . 
 For the six months ended June 30 , it earned $ 3.1 million , or 61 cents a share , compared with net income of $ 2.4 million , or 41 cents a share , a year earlier . 
 Its stock also has risen lately , at least partly because it is considered a possible takeover candidate . 
 Interstate banking is scheduled to begin in California in 1991 , and larger California banks , such as Wells Fargo & Co. , have been paying fat premiums to buy smaller banks to control markets before any out-of-state banks enter the fray . 
 In American Stock Exchange composite trading yesterday , Westamerica closed at $ 22.25 a share , down 75 cents . 
 Varian Associates Inc. , Palo Alto , Calif. , reported fiscal fourth-quarter profit plunged more than 95 % to $ 1 million , or five cents a share , from $ 24.2 million , or $ 1.10 a share , in the year-earlier quarter . 
 The diversified electronics company blamed the decline in the quarter ended Sept. 29 , on previously reported operating problems in its Electron Devices & Systems Group . 
 For the full fiscal year , Varian posted a 13 % profit rise to $ 31.5 million , or $ 1.53 a share , up from $ 27.8 million , or $ 1.27 a share , last year . 
 Sales for the year rose almost 15 % to $ 1.34 billion from $ 1.17 billion last year . 
 A profit last year in both the quarter and year included a net gain of $ 9.6 million , or 44 cents a share , from the sale of a division . 
 Additionally , the full-year profit last year reflected an after-tax restructuring charge of $ 22.8 million , or $ 1.04 a share . 
 Shares of Varian , which last month warned there would be a fourth-quarter plunge , closed at $ 22.75 , down 62.5 cents in composite trading on the New York Stock Exchange . 
 Sales rose 18 % in the fiscal fourth quarter to $ 364.1 million from $ 307.9 million on the strength in semiconductors and other products . 
 In a last-ditch effort to keep its sales force and customer base , Integrated Resources Inc. said it agreed in principle to transfer ownership of its broker-dealer subsidiary to two of its top executives . 
 The financial-services firm , struggling since summer to avoid a bankruptcy-law filing after missing interest payments on about $ 1 billion of debt , will retain the right to regain the subsidiary . 
 It said it will exercise that right only if it sells substantially all of its other core businesses . 
 It also can sell the right to regain the subsidiary to another party . 
 Also , the broker-dealer subsidiary , Integrated Resources Equity Corp. , was renamed Royal Alliance Associates Inc . 
 Because of Integrated 's widely reported troubles , the unit 's representatives had been requesting a name change . 
 Royal Alliance , to which the 3,900 representatives ' licenses will be transferred , is a shell company Integrated owns . 
 In the transaction , Integrated will transfer 100 % ownership of the subsidiary to Gerard M. Lavin , executive vice president of Integrated and head of back-office operations at the subsidiary , and Gary W. Krat , executive vice president of the parent and president of the subsidiary . 
 Integrated will pump $ 3.5 million to $ 4 million into Royal Alliance as initial funding . 
 In an interview , Mr. Krat said that based on criteria yet to be determined , he expects to distribute 49 % of Royal Alliance to the representatives , who sell Integrated 's insurance and mutual-fund products . 
 If Integrated regains Royal Alliance , the representatives will retain their 49 % ownership . 
 Mr. Krat indicated that completion of the transaction could take several weeks , and it was n't immediately clear what would happen to the broker-dealer subsidiary if Integrated files for bankruptcy-law protection in the meantime . 
 The subsidiary is n't expected to be profitable for at least one year . 
 If Integrated regains the unit , it would receive any profit the unit reports , even while the unit is independent . 
 If the deal closes , the two officers will draw salaries from the independent operation , not from Integrated . 
 Many aspects of the agreement were worked out Wednesday in Chicago , when Integrated senior managers met with about 150 representatives . 
 `` I think it was something that we and they thought was constructive , '' said Stephen D. Weinroth , chairman and co-chief executive officer of Integrated . 
 Integrated made its announcement after the market closed . 
 In New York Stock Exchange Composite trading , Integrated shares closed at $ 1.125 , up 12.5 cents . 
 The dollar weakened in indecisive trading as foreign-exchange dealers awaited fresh economic news that they hope will jolt the U.S. unit out of its narrow ranges . 
 The Canadian dollar climbed to its highest level against the U.S. dollar since late August , prompting the Bank of Canada to sell the Canadian currency on the market . 
 Traders say that after a week of nervously tracking every development on Wall Street , the foreign-exchange market has settled back to catch its breath ahead of new U.S. economic data . 
 They noted , however , that a 26-point drop in the Dow Jones Industrial Average gave the dollar a sharp nudge downward late in the day . 
 In late New York trading yesterday , the dollar was quoted at 1.8470 marks , down from 1.8578 marks late Friday , and at 141.90 yen , down from 142.43 yen late Friday . 
 Sterling was quoted at $ 1.6030 , up from $ 1.5885 late Friday . 
 In Tokyo Tuesday , the U.S. currency opened for trading at 141.80 yen , down from Monday 's Tokyo close of 142.40 yen . 
 The market 's attention is especially focused on a preliminary report on the U.S. third-quarter gross national product , due out Thursday , which could show the economy is continuing to expand at a relatively brisk pace . 
 The consensus view on real GNP , the total value of the U.S. output of goods and services adjusted for inflation , calls for a 2.3 % gain on an annual basis , slowing somewhat from the second quarter 's 2.5 % , but still fairly strong . 
 Few market participants expect the U.S. unit to rally sharply on the news , if it turns out as expected . 
 Many contend that the report may overstate the economy 's health and predict the third-quarter figures may be the last vigorous statistics for some time to come . 
 `` Everyone is waiting for GNP , '' says Walter Simon , an assistant treasurer with Bank Julius Baer & Co . 
 `` Yet even a relatively strong number -- 2.8 % to 2.9 % -- wo n't alter the market 's view that the economy is softening . '' 
 Hubert Pedroli , managing director of foreign exchange at Credit Suisse in New York , adds , `` The market sees this as the last piece of good news . '' 
 Mr. Pedroli notes that the GNP deflator , a measure of inflation , is expected to slow , which would give the Federal Reserve more room to ease key U.S. rates . 
 Analysts predict a 3.5 % rise in the deflator , after climbing 4.6 % in the second quarter . 
 They note that when an unexpectedly sharp widening in the U.S. trade gap in August was reported earlier this month , hopes for a sustained narrowing of the trade deficit were dashed and sentiment gripped the market that the U.S. economy was losing its momentum . 
 A 190-point plunge in U.S. stock shares compounded the view , they say . 
 `` Everyone is extremely convinced the economy is slowing , '' says one senior New York dealer . 
 If we 're not headed for a recession , we 're certainly headed for a major slowdown . '' 
 While the market expects little reaction from news of U.S. durable goods orders , scheduled for release today , participants note that the figures will probably serve to reinforce this bearish sentiment . 
 U.S. durable goods orders are expected to show a decline of 1.2 % in September , according to economists . 
 The anticipated drop follows a 3.9 % rise in August . 
 Traders , however , are quick to point out that while there is little enthusiasm for buying dollars , the U.S. unit has found a `` natural bottom '' at about 1.85 marks and 140 yen . 
 Its resilience around these levels is pegged to persistent investor demand for the greenback , especially in Japan . 
 On the Commodity Exchange in New York , gold for current delivery settled at $ 367 an ounce , down 30 cents . 
 Estimated volume was a very light one million ounces . 
 In early trading in Hong Kong Tuesday , gold was quoted at $ 366.79 an ounce . 
 Liz Claiborne Inc. , New York , said its third-quarter net income jumped 62 % , citing continued strength in apparel sales and the start of shipments of its new product lines : a men 's fragrance , large-size women 's apparel and casual knitwear . 
 The big apparel maker and retailer said that its net income in the latest quarter increased to $ 51.1 million , or 58 cents a share , from $ 31.7 million , or 36 cents a share , a year earlier . 
 Sales in the quarter gained 29 % to $ 410.4 million from $ 317.7 million a year earlier . 
 Claiborne shares closed yesterday at $ 25.125 , up 50 cents , in national over-the-counter trading . 
 Claiborne 's directors also declared its regular cash dividend payment of five cents a share payable on Dec. 5 to shareholders of record at the close of business on Nov. 13 . 
 For the nine months , net income rose 48 % to $ 124.2 million , or $ 1.41 a share , from $ 83.8 million , or 96 cents a share a year earlier . 
 Sales gained 16 % to $ 1.03 billion from $ 894 million . 
 Tokyo stocks closed firmer Monday , with the Nikkei index making its fifth consecutive daily gain . 
 Stocks also rose in London , while the Frankfurt market was mixed . 
 In Tokyo , the Nikkei index added 99.14 to 35585.52 . 
 The index moved above 35670 at midmorning , nearly reaching the record of 35689.98 set Sept. 28 . 
 But the market lost part of the early gains on index-linked investment trust fund selling . 
 In early trading in Tokyo Tuesday , the Nikkei index rose 1.08 points to 35586.60 . 
 On Monday , traders noted that some investors took profits against the backdrop of the Nikkei 's fast-paced recovery following its plunge last Monday in reaction to the Oct. 13 drop in New York stock prices . 
 But overall buying interest remained strong through Monday , with many observers saying they expect the Nikkei to continue with moderate gains this week . 
 Turnover remained relatively small . 
 Volume on the first section was estimated at 600 million shares , down from 1.03 billion shares Friday . 
 The Tokyo stock price index of first section issues was up 7.81 at 2687.53 . 
 Relatively stable foreign currency dealings Monday were viewed favorably by market players , traders said . 
 But institutional investors may wait a little longer to appraise the direction of the U.S. monetary policy and the dollar , traders said . 
 Hiroyuki Wada , general manager of the stock department at Okasan Securities , said Monday 's trading was `` unfocused . '' 
 He said investors were picking individual stocks based on specific incentives and the likelihood of a wider price increase over the short term . 
 The selective approach blurred themes such as domestic-demand issues , large-capitalization issues or high-technology shares , which had been providing at least some trading direction over the past few weeks , Mr. Wada said . 
 Investors took profits on major construction shares , which advanced last week , shifting their attention to some midsize companies such as Aoki Corp. , Tobishima and Maeda . 
 Aoki gained 60 yen to 1,480 yen -LRB- $ 10.40 -RRB- . 
 Some pharmaceutical shares were popular on rumors related to new products to be introduced at a cancer conference that opened in Nagoya . 
 Teijin was up 15 at 936 , and Kyowa Hakko gained 30 to 1,770 . 
 Mochida advanced 40 to 4,440 . 
 Fujisawa continued to attract investors because of strong earning prospects stemming from a new immune control agent . 
 Fujisawa gained 50 to 2,060 . 
 Kikkoman was up 30 to 1,600 , receiving investor interest for its land property holdings near Tokyo , a trader said . 
 London prices closed modestly higher in the year 's thinnest turnover , a condition that underscored a lack of conviction ahead of a U.K. balance of payments report Tuesday . 
 Limited volume ahead of the September trade data showed the market is nervous , but dealers added that the day 's modest gains also signaled some support for London equities . 
 They pegged the support largely to anticipation that Britain 's current account imbalance ca n't be much worse than the near record deficits seen in July and August . 
 `` It 's a case of the market being too high to buy and too afraid to sell , '' a senior dealer with Kleinwort Benson Securities said . 
 It 's better to wait . '' 
 The Financial Times 100-share index finished 10.6 points higher at 2189.7 . 
 The 30-share index closed 11.6 points higher at 1772.6 . 
 Volume was 276.8 million shares , beneath the year 's previous low of 280.5 million shares Sept. 25 , the session before the August trade figures were released . 
 Analysts ' expectations suggest a September current account deficit of # 1.6 billion -LRB- $ 2.54 billion -RRB- , compared with August 's # 2.0 billion deficit . 
 Dealers , however , said forecasts are broadly divergent with estimates ranging between # # billion 
 `` The range of expectations is so broad , '' a dealer at another major U.K. brokerage firm said , `` the deficit may have to be nearer or above # 2 billion for it to have any impact on the market . '' 
 Lucas Industries , a British automotive and aerospace concern , rose 13 pence to 614 pence after it said its pretax profit for the year rose 28 % . 
 Share prices on the Frankfurt stock exchange closed narrowly mixed in quiet dealings after recovering most of their early losses . 
 The DAX index eased 0.99 point to end at 1523.22 after falling 5.5 points early in the session . 
 Brokers said the declines early in the day were partly caused by losses of the ruling Christian-Democratic Union in communal elections in the state of Baden-Wuerttemberg . 
 The start of a weeklong conference by the IG Metall metal worker union in Berlin is drawing attention to the impending wage negotiations , which could boost companies ' personnel costs next year , they said . 
 But there was little selling pressure , and even small orders at the lower levels sufficed to bring the market back to Friday 's opening levels . 
 Traders said the thin trading volume points to continued uncertainty by most investors following last Monday 's record 13 % loss . 
 The market is still 4 % short of its level before the plunge , and analysts are n't sure how long it will take until the DAX has closed that gap . 
 But Norbert Braeuer , chief trader at Hessische Landesbank Girozentrale -LRB- Helaba -RRB- , said he expects share prices to move upward in the coming weeks . 
 Banking stocks were the major gainers Monday amid hope that interest rates have peaked , as Deutsche Bank and Dresdner Bank added 4 marks each to 664 marks -LRB- $ 357 -RRB- and 326 marks , respectively . 
 Commerzbank gained 1 to 252.5 . 
 Auto shares were mixed , as Daimler-Benz firmed 2 to 723 , Bayerische Motoren Werke lost the same amount to 554 , and Volkswagen inched down 1.4 to 451.6 . 
 Elsewhere , prices closed higher in Amsterdam , lower in Zurich , Stockholm and Milan , mixed in Brussels and unchanged in Paris . 
 Shares closed higher in Hong Kong , Singapore and Manila , and were lower in Sydney , Seoul and Taipei . 
 Wellington was closed . 
 Here are price trends on the world 's major stock markets , as calculated by Morgan Stanley Capital International Perspective , Geneva . 
 To make them directly comparable , each index is based on the close of 1969 equaling 100 . 
 The percentage change is since year-end . 
 Last week 's best and worst performing stocks among those issues that make up 80 % of the world 's stock market capitalization -LRB- in local currency -RRB- ISSUE -LRB- COUNTRY -RRB- CLOSE 
 Source : Morgan Stanley Capital Intl . 
 Enviropact Inc. said it entered into an agreement in principle to sell its pump and tank division and drilling division to GSX Chemical Services for $ 4 million . 
 The Miami-based environmental engineering concern said GSX Chemical also will assume about $ 1.6 million in debt related to those divisions . 
 Further , GSX will buy $ 1 million of Enviropact common stock , at $ 2.625 a share , plus an option to acquire an additional $ 1.5 million of common at the same price , the company said . 
 In American Stock Exchange composite trading yesterday , Enviropact closed at $ 3 a share , up 25 cents . 
 Enviropact said the two divisions account for about $ 8 million of the company 's $ 20 million in annual revenue . 
 The transaction is expected to close within about 20 days , the company added . 
 Enviropact said the proceeds will be used as working capital for expansion and to pay its existing tax liability of about $ 1.5 million that was due Sept. 15 . 
 GSX is a unit of Laidlaw Transportation Ltd. of Burlington , Canada . 
 Monday , October 23 , 1989 
 The key U.S. and foreign annual interest rates below are a guide to general levels but do n't always represent actual transactions . 
 PRIME RATE : 10 % . 
 The base rate on corporate loans at large U.S. money center commercial banks . 
 FEDERAL FUNDS : 8 % high , 8 % low , 8 % near closing bid , 8 % offered . 
 Reserves traded among commercial banks for overnight use in amounts of $ 1 million or more . 
 Source : Fulton Prebon -LRB- U.S.A . -RRB- Inc . 
 DISCOUNT RATE : 7 % . 
 The charge on loans to depository institutions by the New York Federal Reserve Bank . 
 CALL MONEY : 9 % to 10 % . 
 The charge on loans to brokers on stock exchange collateral . 
 COMMERCIAL PAPER placed directly by General Motors Acceptance Corp. : 8.50 % 2 to 44 days ; 8.25 % 45 to 69 days ; 8.40 % 70 to 89 days ; 8.20 % 90 to 119 days ; 8.05 % 120 to 149 days ; 7.90 % 150 to 179 days ; 7.50 % 180 to 270 days . 
 COMMERCIAL PAPER : High-grade unsecured notes sold through dealers by major corporations in multiples of $ 1,000 : 8.575 % 30 days ; 8.50 % 60 days ; 8.45 % 90 days . 
 CERTIFICATES OF DEPOSIT : 8.09 % one month ; 8.09 % two months ; 8.06 % three months ; 8 % six months ; 7.94 % one year . 
 Average of top rates paid by major New York banks on primary new issues of negotiable C.D.s , usually on amounts of $ 1 million and more . 
 The minimum unit is $ 100,000 . 
 Typical rates in the secondary market:8.60 % one month ; 8.60 % three months ; 8.40 % six months . 
 BANKERS ACCEPTANCES : 8.50 % 30 days ; 8.32 % 60 days ; 8.32 % 90 days ; 8.16 % 120 days ; 8.05 % 150 days ; 7.96 % 180 days . 
 Negotiable , bank-backed business credit instruments typically financing an import order . 
 LONDON LATE EURODOLLARS : 8 % to 8 % one month ; 8 % to 8 % two months ; 8 % to 8 % three months ; 8 % to 8 % four months ; 8 % to 8 % five months ; 8 % to 8 % six months . 
 LONDON INTERBANK OFFERED RATES -LRB- LIBOR -RRB- : 8 % one month ; 8 % three months ; 8 % six months ; 8 % one year . 
 The average of interbank offered rates for dollar deposits in the London market based on quotations at five major banks . 
 FOREIGN PRIME RATES : Canada 13.50 % ; Germany 9 % ; Japan 4.875 % ; Switzerland 8.50 % ; Britain 15 % . 
 These rate indications are n't directly comparable ; lending practices vary widely by location . 
 Results of the Monday , October 23 , 1989 , auction of short-term U.S. government bills , sold at a discount from face value in units of $ 10,000 to $ 1 million : 7.52 % , 13 weeks ; 7.50 % , 26 weeks . 
 FEDERAL HOME LOAN MORTGAGE CORP . -LRB- Freddie Mac -RRB- : Posted yields on 30-year mortgage commitments for delivery within 30 days. 9.86 % , standard conventional fixed-rate mortgages ; 7.875 % , 2 % rate capped one-year adjustable rate mortgages . 
 Source : Telerate Systems Inc . 
 FEDERAL NATIONAL MORTGAGE ASSOCIATION -LRB- Fannie Mae -RRB- : Posted yields on 30 year mortgage commitments for delivery within 30 days -LRB- priced at par 9.80 % , standard conventional fixed-rate mortgages ; 8.75 % , rate capped one-year adjustable rate mortgages . 
 Source : Telerate Systems Inc . 
 MERRILL LYNCH READY ASSETS TRUST : 8.56 % . 
 Annualized average rate of return after expenses for the past 30 days ; not a forecast of future returns . 
 Bankers Trust New York Corp. , as expected , reported a third-quarter loss of $ 1.42 billion , or $ 17.39 a share , following its $ 1.6 billion boost in reserves for losses on loans to less-developed countries . 
 The loss compares with net income of $ 162.1 million , or $ 2.01 a share , in the year-earlier period . 
 Interest income rose 29 % to about $ 1.35 billion from $ 1.05 billion . 
 The New York bank holding company 's assets at Sept. 30 climbed to $ 59.4 billion from $ 57.9 billion . 
 Excluding the increase in loan-loss reserves , Bankers Trust said third-quarter net income would have increased 11 % to $ 180 million . 
 A number of major banks have posted big losses after sharply increasing loan-loss reserves . 
 Most of the loans in question are to Third World countries in South America . 
 In New York Stock Exchange composite trading yesterday , Bankers Trust fell 12.5 cents to $ 50.50 . 
 BRISTOL-MYERS SQUIBB Co . -LRB- New York -RRB- -- Gerald C. Beddall , 47 years old , was named president of the Clairol division of this pharmaceuticals and health-care company . 
 He succeeds C. Benjamin Brooks Jr. , who will retire Nov. 1 . 
 Mr. Brooks declined to give his age , but he said his leaving is a normal retirement . 
 Mr. Beddall had been executive vice president of the division since April . 
 Clairol , which makes hair and skin products , was a division of Bristol-Myers Co. before that company 's merger with Squibb Corp . 
 Annualized interest rates on certain investments as reported by the Federal Reserve Board on a weekly-average basis : 
 a-Discounted rate . 
 b-Week ended Wednesday , October 18 , 1989 and Wednesday October 11 , 1989 . 
 c-Yields , adjusted for constant maturity . 
 American Telephone & Telegraph Co. said it will spend $ 20 million to build a factory in Guadalajara , Mexico , to make telephone answering machines . 
 Construction of the 265,000-square-foot facility will begin next year , with production expected to start in late 1991 . 
 When fully operational , the Guadalajara factory will employ about 1,500 workers and have annual operating expenses of $ 5 million to $ 6 million . 
 An AT&T representative said that the Guadalajara factory will make a full line of answering machines . 
 AT&T already has a factory in Matamoros , Mexico , to make electrical devices . 
 It also purchases data systems products from a manufacturer based in Monterrey . 
 Lucas Industries PLC , a British maker of industrial parts and systems , reported a 28 % rise in pretax profit for the year to July 31 , helped in particular by a 32 % jump in operating profit at its aerospace division . 
 Pretax profit in the latest year climbed to # 187.1 million -LRB- $ 297.1 million -RRB- from # 146.3 million -LRB- $ 232.3 million -RRB- . 
 Profit after taxes and minority interests but before extraordinary items climbed 27 % to # # million , with earnings per share rising to 85.1 pence -LRB- $ 1.35 -RRB- from 79.4 pence -LRB- $ 1.26 -RRB- . 
 The results were at the upper end of market expectations , which ranged from # # million 
 TW Services Inc. posted a $ 3.3 million third-quarter net loss , compared with a $ 24.9 million profit , reflecting $ 60 million of expenses related to its much-publicized proposed takeover by Coniston Partners . 
 The per-share loss for the Paramus , N.J. , food-services concern totaled seven cents , compared with earnings of 51 cents a share a year earlier . 
 Revenue rose 5 % to $ 981.7 million from $ 934.7 million . 
 Coniston , a New York investment partnership , awaits a vote by TW 's shareholders , scheduled for Friday , on Coniston 's $ 34-a-share , or $ 1.66 billion , offer for TW . 
 Nine-month net income dropped 47 % to $ 26.3 million or , , $ 1.02 a share . 
 Revenue rose 6 % to $ 2.79 billion from $ 2.63 billion . 
 Cummins Engine Co. , Columbus , Ind. , hurt by a drop in engine orders from heavy-truck makers , reported a third-quarter loss of $ 39.7 million , or $ 4.12 a share , on essentially flat sales of $ 807.6 million . 
 In the year-earlier period , the maker of diesel engines and parts had a narrower deficit of $ 17.6 million , or $ 1.84 a share , with sales of $ 808.3 million . 
 A spokeswoman said shipments of truck engines , which provide a higher margin than most of the company 's other products , declined 16 % from a year earlier . 
 Although Cummins 's stock stumbled last month after the company projected a `` substantial '' third-period loss , the stock also fell $ 1.125 in composite New York Stock Exchange trading yesterday , to $ 51.75 . 
 It traded as high as $ 64 a month ago , before the loss projection . 
 For the nine months , the latest loss trimmed net income to $ 3.6 million , which after payment of preferred dividends represented a 31-cent loss a common share . 
 The year-before loss was $ 8.4 million , or $ 1.36 a common share . 
 Exxon Corp. filed suit against the state of Alaska , charging state officials interfered with the oil company 's initial efforts to treat last spring 's giant oil spill . 
 The action is a counterclaim to a suit filed by Alaska in August against Exxon and six other oil companies . 
 The state 's suit alleges that Exxon 's response to the spill failed to prevent contamination of hundreds of miles of shoreline along Prince William Sound . 
 That suit and Exxon 's countersuit were filed in a state court in Anchorage . 
 Neither suit lists specific dollar claims , largely because damage assessment has n't yet been completed . 
 Legal strategists say that damage claims against the oil giant and others could well exceed $ 1 billion . 
 Litigation , if not settled out of court , could drag on for years . 
 Exxon said in its suit that it will seek reimbursement from the state for that part of the cleanup costs and damage claims it says resulted from the state 's conduct . 
 The oil company claims that Alaskan officials prevented Exxon from spraying dispersant onto the almost 11 million gallons of oil dumped when one of its tankers ran into an underwater reef . 
 Craig Tillery , an Alaska assistant attorney general , said in an interview last night that Exxon 's accusations `` are not new . 
 Exxon has made them before , at which point the state demonstrated they were untrue . 
 The state will vigorously defend against any counterclaim . '' 
 Since the spill last March , Exxon and the state have been wrangling over whether spraying dispersant on the oil in the first hours after the spill , when the weather was clear and calm , would have helped limit the environmental damage . 
 Exxon claims that use of dispersants , which break an oil slick into microscopic droplets , was a crucial part of its immediate-response plan and that state officials banned their use during the two days of fair weather following the spill . 
 The oil company claims that it had permission from the U.S. Environmental Protection Agency prior to the spill to use dispersant during such an incident at the discretion of the U.S. Coast Guard . 
 The state 's opposition to the use of dispersants , Exxon says , caused the Coast Guard `` to delay granting permission . '' 
 Alaskan and Coast Guard officials say Exxon 's charges are n't relevant because tests conducted during the first two days following the spill showed that the dispersant was n't working anyway . 
 Use of dispersants was approved when a test on the third day showed some positive results , officials said . 
 Meson Investment Ltd. , a Vancouver , B.C.-based investment firm , said it raised its stake in Verit Industries to 8.9 % of the common shares outstanding . 
 In a Securities and Exchange Commission filing , Meson said it holds 67,400 Verit common shares , including net purchases of 8,100 shares bought from Oct. 10 , 1988 , to Oct. 11 , 1989 , for $ 3.875 to $ 7 each . 
 Meson is the personal holding company of Steven Morfey , a Vancouver securities dealer . 
 He said the transaction was made for investment purposes . 
 Officials for Sun Valley , Calif.-based Verit could n't be reached for comment . 
 In composite trading on the American Stock Exchange , Verit closed unchanged yesterday at $ 3.875 a share . 
 The House Appropriations Committee approved an estimated $ 2.85 billion in emergency funding to assist California 's recovery from last week 's earthquake and to extend further aid to East Coast victims of Hurricane Hugo . 
 The package was termed excessive by the Bush administration , but it also provoked a struggle with influential California lawmakers who sought unsuccessfully to add nearly $ 1 billion more and waive current restrictions to expedite the distribution of funds . 
 By a 26-7 margin , the committee scuttled the more expensive alternative , and the debate forced a strained confrontation between Appropriations Committee Chairman Jamie Whitten -LRB- D. , Miss . -RRB- and his party 's largest state delegation in the House . 
 `` I have no regrets about going forward , '' said Rep. Vic Fazio -LRB- D.,Calif. -RRB- , who sought later to play down the sometimes hostile tone of the long evening meeting . 
 `` We are the Golden State , '' Mr. Fazio said , `` and there is a certain amount of jealousy . '' 
 The $ 2.85 billion package incorporates $ 500 million for small-business loans , $ 1 billion in highway construction funds , and $ 1.35 billion divided between general emergency assistance and a reserve to be available to President Bush to meet unanticipated costs from the two disasters . 
 The funding is attached to a stopgap bill to keep most of the government operating through Nov. 15 . 
 The measure is expected to come before the House today , and Congress is under pressure to complete action before midnight EDT tomorrow , when the current continuing resolution expires . 
 Given California 's size and political importance , the White House is eager to appear generous . 
 But in private meetings yesterday , Budget Director Richard Darman argued that only $ 1.5 billion in new federal appropriations are needed to supplement existing resources . 
 A White House budget office analysis estimates that $ 500 million -- or half the level in the committee bill -- is needed for highway assistance to meet California 's needs , and the administration rejects the notion that new appropriations are needed to finance disaster loans by the Small Business Administration . 
 `` Everybody appreciates that it is a national disaster and that we 've got to address it , '' said Mr. Darman , who came to the Capitol to meet with Mr. Whitten and California lawmakers before the committee session . 
 I would hope very much that we would n't end up in a kind of situation where you have a bidding war and then a veto threat . '' 
 Although this White House pressure was clearly a factor among committee Republicans , no single influence was greater than Mr. Whitten . 
 A master of pork-barrel politics , he had crafted the $ 2.85 billion package in vintage style and used the full force of his chairmanship to keep the proposal intact and dismiss any alternative . 
 When Mr. Fazio offered the California-backed $ 3.84 billion plan , Mr. Whitten insisted that the full 14 pages be read aloud by the panel 's clerk to underscore the range of legislative changes also sought by the delegation . 
 On the chairman 's motion , the California package was subsequently reduced to less-binding report language , and even when this was accepted as such on a voice vote , Mr. Whitten pointedly opposed it . 
 More important than money in many cases are waivers California is seeking on current restrictions covering federal highway funds , such as a $ 100 million cap on how much any single state can receive in emergency funds in a year . 
 Mr. Whitten 's package appears to accomplish this purpose , but the state faces more resistance in its bid for an extended waiver on having to put up any matching funds on repairs completed in the next six months . 
 A member in the House leadership and skilled legislator , Mr. Fazio nonetheless found himself burdened not only by California 's needs but by Hurricane Hugo amendments he accepted in a vain effort to build support in the panel . 
 The California Democrat appeared embarrassed by provisions inserted on behalf of owners of private beaches in the Virgin Islands , and lumber interests sought to add another $ 100 million in federal aid to plant timber on private land in North and South Carolina . 
 California 's high-priced real estate puts it in an awkward position , too . 
 One provision last night would have raised the cap on disaster loans to $ 500,000 from $ 100,000 per household to accommodate San Francisco losses . 
 Kurzweil Music Systems Inc. said it retained Kidder , Peabody & Co. to study financial alternatives , including the possible sale of the financially struggling company . 
 Kurzweil , Waltham , Mass. , makes digital electronic keyboard instruments used by professional recording musicians . 
 It recently introduced a line for the home market . 
 However , Raymond C. Kurzweil , chairman and chief executive , said `` The company continues to require additional funding to realize the potential of its technology . '' 
 In the year 's first six months , Kurzweil had a loss of $ 6.9 million on sales of $ 11.2 million . 
 Last month its president , John S. Donnelly , resigned citing `` management differences '' with Mr. Kurzweil . 
 Amtech Systems Inc. , Tempe , Ariz. , said its preliminary year-end results of operations indicate `` substantial improvement '' over the previous fiscal year . 
 Amtech , which makes an automated process system that improves the yields of semiconductor manufacturers , said profit for the year ended Sept. 30 rose to more than $ 800,000 from $ 446,000 last year . 
 Per-share earnings are estimated at more than 40 cents , up from 22 cents for fiscal 1988 . 
 Total revenue is expected to double to more than $ 22 million from $ 10.8 million . 
 Amtech , which also provides technical temporary employment services to aerospace , defense , computer and high-tech companies in the Southwest and Baltimore-Washington areas , said its final audited results are due in late November . 
 The company attributed the improvement to strong demand in the semiconductor equipment segment as well as the acquisition of Echelon Service Co. and the inclusion of a full year 's results of operations for RTS Inc. , compared with seven months ' results for the prior year . 
 LDI Corp. , Cleveland , said it will offer $ 50 million in commercial paper backed by lease-rental receivables . 
 The program matches funds raised from the sale of the commercial paper with small to medium-sized leases . 
 LDI termed the paper `` non-recourse financing , '' meaning that investors would be repaid from the lease receivables , rather than directly by LDI Corp . 
 LDI leases and sells data-processing , telecommunications and other high-tech equipment . 
 SHEVARDNADZE ADMITTED that Moscow violated the 1972 ABM treaty . 
 In a foreign-policy address before the Soviet legislature , the foreign minister conceded that the radar station in Krasnoyarsk breached the superpower Anti-Ballistic Missile treaty and said it would be dismantled . 
 Shevardnadze said it took Gorbachev 's government four years to determine that the station 's location in Siberia violated the accord , as Western arms-control officials have long contended . 
 He also denounced Moscow 's nine-year involvement in the war in Afghanistan , saying it involved `` gross violations of... civil norms and ethics . '' 
 Secretary of State Baker , in his first major arms-control speech , called for a new military relationship with Moscow to reduce `` first strike '' nuclear arms . 
 BAY AREA COMMUTERS BATTLED earthquake-related transportation snarls . 
 Travelers crowded into subways , sat in traffic jams on major freeways or waited for buses in the rain , but the massive gridlock anticipated by officials in the San Francisco Bay area never materialized . 
 As the death toll from last week 's temblor climbed to 61 , the condition of freeway survivor Buck Helm , who spent four days trapped under rubble , improved , hospital officials said . 
 Rescue crews , however , gave up hope that others would be found alive under the collapsed roadway . 
 The House Appropriations Committee approved a $ 2.85 billion aid package for the quake region , less than the $ 3.8 billion sought by California officials . 
 Hungary declared itself a democracy and for the first time openly commemorated the anniversary of the 1956 anti-Stalinist uprising that was crushed by the Soviet Union . 
 A crowd estimated at 100,000 held a torch-lit march through Budapest as Acting President Szuros delivered a nationally televised address rejecting communist dominance . 
 About 200,000 East Germans marched in Leipzig and thousands more staged protests in three other cities in a fresh challenge to the Communist leadership to introduce democratic freedoms . 
 In an East Berlin suburb , meanwhile , employees at an electronics plant formed an independent trade union called Reform , a worker spokesman said . 
 The space shuttle Atlantis landed at a desert air strip at Edwards Air Force Base , Calif. , ending a five-day mission that dispatched the Jupiter-bound Galileo space probe . 
 The five astronauts returned to Earth about three hours early because high winds had been predicted at the landing site . 
 Fog shrouded the base before touchdown . 
 Explosions shook a Phillips Petroleum Co. plastics plant near Pasadena , Texas , hurling debris and causing a fire visible from 10 miles away . 
 More than 100 people were injured , and a number of workers were missing . 
 Parts of the Houston Ship Channel were closed . 
 The White House said Bush is conferring with leaders of the Senate Intelligence Committee to ease differences over guidelines for CIA agents . 
 The statement came after officials said Bush complained at a private meeting last week that a strict interpretation of a policy requires the U.S. to notify foreign dictators of certain coup plots . 
 Lebanon 's Gen. Aoun placed Christian military forces on alert in case of renewed fighting with Syrian-backed Moslems after Lebanon 's two main Shiite militias rejected an Arab-sponsored peace accord . 
 The plan , approved by lawmakers and rejected Sunday by Aoun , includes political changes aimed at ending the 14-year-old civil war . 
 NATO defense ministers are expected to call for a reduction in nuclear forces in Europe when the alliance 's nuclear planning group convenes a two-day session today in Portugal . 
 The ministers are to reshape NATO 's defenses in Western Europe amid fast-paced changes in the Soviet bloc . 
 Iran 's President Rafsanjani offered to help gain freedom for Western hostages in Lebanon , but said the assistance was contingent on U.S. aid in resolving the cases of three Iranians kidnapped in Lebanon in 1982 or the release of frozen Iranian assets . 
 Washington rejected the bid , saying the hostages were n't linked to other issues . 
 PLO leader Arafat asked Egypt to seek clarifications from the U.S. on Secretary of State Baker 's plan for Mideast peace talks , an aide to Egyptian President Mubarak said . 
 The official stressed that the PLO has n't rejected the five-point formula . 
 Commonwealth leaders turned to issues ranging from drugs to the world economy after Zimbabwe 's President Mugabe called Thatcher 's views on South Africa `` despicable . '' 
 At a meeting in Malaysia , Australia and Canada also assailed the British prime minister for criticizing the 49-nation group 's call for Pretoria to ease apartheid . 
 CMS Enhancements Inc. said it estimates that sales and earnings for the fiscal first quarter ended Sept. 30 fell somewhat from the year-earlier period . 
 Jim Farooquee , chief executive officer of the Tustin , Calif. , computer accessories supplier , said he was `` comfortable '' with analysts ' expectations that CMS would earn between six cents and eight cents a share on revenue of about $ 42 million . 
 A year earlier , CMS posted profit of $ 1.1 million , or 13 cents a share , on sales of $ 48 million . 
 This time , there are 30 % more shares outstanding . 
 Mr. Farooquee attributed the decline to an industrywide softening of demand for computer enhancement products . 
 Property Capital Trust said it dropped its plan to liquidate because it was n't able to realize the value it had expected . 
 It said it will buy back two million shares , or 18.4 % , of the total outstanding , and continue operations buying and managing real estate . 
 Property Capital , which is based in Boston , had told shareholders it expected to distribute at least $ 21 a share , or $ 229 million , in a liquidation , based on an expected asset sale price of $ 290 million or more . 
 The company said it did n't receive an offer it wanted to accept . 
 As a result of dropping the liquidation plan , shareholders will have to treat dividends received this year as ordinary income or capital gains rather than as tax free returns of capital , the company said . 
 The share repurchase will be funded mostly from borrowings . 
 A.H. Belo Corp. said its net income was $ 3.1 million , or 15 cents a share , in the third quarter , more than four times its profit of $ 663,000 , or three cents a share , last year . 
 Included in the results was an adjustment to the Dallas-based company 's tax rate that reduced net income by about 10 cents a share , or approximately $ 2 million . 
 Belo said it increased its effective tax rate to 52 % from 47 % to account for potential liabilities related to an Internal Revenue Service investigation of its tax returns for the years 1984 through 1988 . 
 The newspaper and television owner said it expects the tax adjustment to reduce its net income for the full year by 14 cents , or approximately $ 2.8 million based on its 20.2 million shares outstanding . 
 For the third quarter , Belo said its revenue increased 11 % , to $ 101.5 million from $ 91.2 million last year . 
 For the nine months , the company had net income of $ 15.1 million , or 74 cents a share , up 98 % from $ 7.6 million , or 38 cents a share last year . 
 Revenue grew almost 8 % to $ 301.9 million from $ 279.8 million last year . 
 A federal judge granted a temporary stay of the California Student Aid Commission 's emergency action to stop guaranteeing loans for National Technical Schools , a unit of United Education & Software Inc . 
 The California Student Aid Commission took the action Oct. 15 after a government audit cited National Technical Schools for having courses too short to be eligible for the educational loan program and having a student drop-out rate far in excess of federal standards , and it alleged other serious violations of law and regulations . 
 United Education & Software , a Los Angeles education services company , called the commission 's action `` precipitous and unwarranted . '' 
 The court set a hearing on the emergency action for Oct. 30 . 
 United Education & Software posted a $ 250,000 bond against potential losses to the student aid commission and to taxpayers in guaranteeing any more loans for National Technical Schools students prior to the hearing . 
 A decline in Allied-Signal Inc. 's automotive business contributed to flat sales and only slightly higher earnings in the third quarter . 
 Allied-Signal reported that net rose 1.7 % to $ 121 million , or 81 cents a share , from $ 119 million , or 80 cents a share , the year earlier . 
 Sales slipped 1.3 % to $ 2.82 billion from $ 2.86 billion . 
 For the nine months , the Morris Township , N.J.-based company , with businesses in aerospace , automotive products and engineered materials , earned $ 413 million , or $ 2.77 cents a share , up 15 % from $ 359 million , or $ 2.40 a share . 
 Sales eased 0.2 % to $ 8.88 billion from $ 8.90 billion . 
 Chairman Edward L. Hennessy Jr. said that a drop in sales of auto and truck parts contributed to lower earnings in the automotive unit . 
 He also cited unfavorable foreign-exchange rates and a lower tax rate . 
 Earnings for the group declined to $ 11 million from $ 33 million last year . 
 Earnings at Allied-Signal 's aerospace business rose to $ 55 million from $ 41 million a year ago , primarily on higher sales and profit in its engines and auxiliary power units . 
 In New York Stock Exchange composite trading yesterday , Allied-Signal shares closed at $ 35.125 , off 87.5 cents . 
 The National Highway Traffic Safety Administration said it will start enforcing stiffer regulations Jan. 31 for so-called gray-market imports of vehicles . 
 The regulations , required under legislation enacted by Congress last year , will apply to imports of vehicles that were n't built to meet U.S. government auto safety standards and were intended for use in Europe or elsewhere abroad . 
 U.S. officials estimated that gray-market imports total about 2,100 units a year , a small part of the more than three million vehicles exported to the U.S. each year . 
 According to the NHTSA , the new regulations will prohibit anyone other than an importer that has registered with the U.S. government , or a person who has a contract with a registered importer , from permanently importing a vehicle that does n't meet the U.S. auto safety standards . 
 The registered importer would be required to bring such vehicles into compliance with the U.S. safety standards , compared with the current situation in which anyone can bring in such vehicles and modify them to meet the U.S. standards . 
 Congress tightened auto safety standards for gray-market imports after U.S. auto dealers , including franchised foreign-car dealers , complained that they often were blamed when the second and third buyers of such vehicles found that the cars could n't meet U.S. auto safety standards . 
 Legent Corp. said it expects to report net income between $ 6.4 million and $ 6.9 million , or between 32 cents and 34 cents a share , for its fourth quarter ended Sept. 30 . 
 In the year-ago quarter , the software developer reported pro forma earnings of $ 4.8 million , or 24 cents a share . 
 Vienna , Va.-based Legent said it expects to post revenue for the quarter of more than $ 31 million , compared with pro forma revenue of $ 25.2 million in 1988 . 
 For the fiscal year , the company said it anticipates reporting earnings of $ 23 million , or about $ 1.15 a share , including a charge of about $ 5.9 million , or 22 cents a share , related to the merger that created Legent out of Duquesne Systems Inc. and Morino Inc. in March 1989 . 
 Revenue for fiscal 1989 is expected to exceed $ 124 million . 
 Pro forma earnings for fiscal 1988 were $ 19.6 million , or 99 cents a share , on revenue of $ 97.2 million . 
 The company attributed much of the growth in earnings to increased demand for its systems productivity software . 
 Archive Corp. said it expects to report net income for its fiscal year ended Sept. 29 of a record $ 15 million , or $ 1.15 a share , up 43 % from $ 10.5 million , or 80 cents a share , for the prior year . 
 The Costa Mesa , Calif. , maker of computer tape drives also projected record revenue for the year of $ 181 million , up from $ 122.7 million for the previous year . 
 Archive attributed the gains to strong demand for its products , continued growth of the reseller market and the acquisition of Maynard Electronics in February , which accounted for about 14 % of the company 's revenue . 
 Detrex Corp. said a reserve it is establishing to cover expected pollution cleanup costs at an Ohio plant reduced its third-quarter net income by $ 1.9 million . 
 Detrex , which has annual sales of about $ 100 million , declined to say if it would post a loss in the third quarter . 
 The Southfield , Mich.-based company earned $ 774,000 in the quarter last year . 
 Detrex is setting aside $ 3.1 million for the cleanup , but said the reserve reduced its quarterly income by only $ 1.9 million because of tax considerations . 
 In addition , the manufacturer said it signed a consent decree with Ohio to build a $ 1.4 million pollution-control facility at the Ashtabula chemical manufacturing plant by Aug. 1 , 1990 . 
 Detrex said it is one of at least 17 companies notified by the Environmental Protection Agency that they may be potentially responsible for cleaning up the Fields Brook watershed near Detrex 's Ashtabula plant at a total cost the EPA estimates at $ 48 million -- a figure Detrex said the companies dispute 
 First Executive Corp. said about 96 % of the rights to purchase its depositary shares and warrants have been exercised . 
 Of the 17.6 million rights units issued , just under 17 million were exercised before the Oct. 10 expiration of the offering , the insurance holding company said . 
 Remaining units will be sold to the underwriters , Drexel Burnham Lambert Inc. and Kidder , Peabody & Co. , which will also purchase an over-allotment of 2.3 million additional units . 
 First Executive said the offering will raise about $ 299 million -- minus underwriting fees and other expenses -- that the company plans to use to write new life insurance and annuity business . 
 In addition , analysts have viewed the rights offering as a takeover defense that prospectively balloons the number of shares outstanding . 
 Each of the units consists of two warrants , each of which could be used to purchase a half-share of common stock , and one depositary preference share . 
 Depositary shares are convertible into common stock on a 1-to-1 basis . 
 Currently , the company has about 88.1 million common shares outstanding . 
 In over-the-counter trading Monday , the stock closed at $ 10.625 , off 37.5 cents . 
 UNITED AIR'S PARENT quashed any prospects for an immediate revival of the labor-management buy-out , saying UAL should remain independent for now . 
 Also , UAL Chairman Stephen Wolf pulled out of the buy-out effort to focus on running the company . 
 The two developments leave the airline with several problems , including an unsettled labor situation . 
 Stock prices fell and bonds rose as worries mounted about the economy and the junk bond market . 
 The Dow Jones industrials sank 26.23 points , to 2662.91 . 
 The dollar also declined . 
 The turmoil in junk bonds may last for years , investors and traders say . 
 Even Drexel is pulling back . 
 Santa Fe Pacific plans to sell 20 % of its large real estate unit to a California pension fund for $ 400 million and spin the rest off to shareholders . 
 The proposal values the company 's real estate operation at $ 2 billion . 
 Time Warner reported a $ 176 million loss for the third quarter , reflecting the cost of the recent merger and a method of accounting for the deal . 
 Thrifts continued to shed assets in August , mainly to comply with stiffer capital rules under the S&L bailout law . 
 Also , withdrawals exceeded deposits by $ 5.1 billion in the month . 
 Exxon 's profit fell 9 % in the third quarter , hurt by sagging results at two of its three main businesses . 
 Phillips and Arco posted declines . 
 Ashland had a loss . 
 Amerada Hess and Occidental Petroleum had gains . 
 Ogilvy 's chairman , Kenneth Roman , is leaving to take a top post at American Express . 
 His resignation follows a hostile takeover of the ad agency in May by WPP of Britain . 
 The Justice Department took steps that could restrict the use by prosecutors of criminal racketeering charges against white-collar defendants . 
 Shearson was sued by money manager George Soros , who claimed one of his funds was defrauded out of $ 60 million during stock-index futures trading just after the 1987 crash . 
 Drexel 's efforts to settle its legal troubles are being resisted by at least 10 states . 
 Some may try to revoke the firm 's license to sell securities . 
 Prime Computer plans to dismiss 20 % of its work force to cut costs following its recent leveraged buy-out . 
 The action renews concern about buyouts in high-tech industries . 
 Paribas plans a bid for another big French financial and industrial firm , Navigation Mixte , a sign Europe 's takeover fever has n't cooled . 
 Qintex Australia unveiled plans to restructure and sell assets to try to ease its financial problems . 
 Union Carbide 's earnings plunged 35 % in the third quarter , reflecting weakness in the company 's core chemicals and plastics businesses . 
 Japan 's Daiwa Securities named Masahiro Dozen president . 
 The rapid advance of the 52-year-old executive surprised many at the company . 
 Markets -- Stocks : Volume 135,860,000 shares 
 Dow Jones industrials 2662.91 , off 26.23 ; transportation 1236.66 , up 5.86 ; utilities 215.35 , off 0.13 . 
 Bonds : Shearson Lehman Hutton Treasury index 3411.08 , up 
 Commodities : Dow Jones futures index 129.49 , off 0.13 ; spot index 131.64 , up 0.30 . 
 Dollar : 141.90 yen , off 0.53 ; 1.8470 marks , off 0.0108 . 
 The Justice Department has revised certain internal guidelines and clarified others in a move that could restrict the use of criminal racketeering charges against white-collar defendants . 
 The most significant changes in department policy are new requirements that federal prosecutors avoid disrupting `` the normal business functions '' of companies charged under the racketeering law , a senior department official said . 
 Another important revision of department policy is a new guideline warning prosecutors `` not to take steps that would harm innocent third parties '' in a case brought under the racketeering law , the official , David Runkel , said . 
 The department distributed the revisions and clarifications to U.S. attorneys around the country this summer as part of a routine process of updating prosecutorial guidelines , Mr. Runkel said . 
 The changes apply to prosecutions brought under the Racketeer Influenced and Corrupt Organizations law . 
 Under that law , defendants who allegedly commit a pattern of crimes by means of a `` criminal enterprise '' may be charged with racketeering and forced to forfeit the proceeds of the enterprise . 
 The RICO law has come under criticism from some defendants and defense lawyers . 
 They argue that the rights of RICO defendants and third parties not named in RICO indictments have been unfairly damaged . 
 The department 's most significant clarification of existing RICO policy is a directive to prosecutors that they should seek to seize assets from defendants `` in proportion '' to the nature of the alleged offense , Mr. Runkel said . 
 `` That means that if the offense deals with one part of the business , you do n't attempt to seize the whole business ; you attempt to seize assets related to the crime , '' he explained . 
 In general , the thrust of the department 's directive is to encourage prosecutors to limit pretrial asset seizures if there are less intrusive means of protecting assets the government may subsequently be able to seize after a conviction , Mr. Runkel said . 
 It was the kind of snubbing rarely seen within the Congress , let alone within the same party . 
 Sen. Alan Cranston trekked over to the House side of Capitol Hill a few days ago and volunteered his testimony to fellow Democrat Rep. Henry Gonzalez . 
 It was offered as an expression of cooperation to Mr. Gonzalez , who is investigating the $ 2.5 billion failure of Lincoln Savings & Loan Association . 
 But instead of thanks , Sen. Cranston was treated with cool formality . 
 `` Every witness receives a formal subpoena , '' Rep. Gonzalez told him . 
 Seldom have House hearings caused so much apprehension in the Senate , where California Sen. Cranston and four other senators were already writhing in the glare of unfavorable publicity over the alleged looting of Lincoln by their friend and political benefactor , Charles Keating Jr. , principal stockholder of Lincoln 's parent company , American Continental Corp. of Phoenix , Ariz . 
 At the first day of the House Banking Committee 's hearings last week , William Seidman , chairman of the Resolution Trust Corp. , the federal agency created to sell sick thrifts , said the agency is investigating whether Lincoln made illegal political contributions . 
 Mr. Keating arranged nearly $ 1 million in donations to Sen. Cranston and his various political causes , and hundreds of thousands more to other lawmakers . 
 Future witnesses include a former federal S&L regulator who has accused the five senators of attempting to `` subvert '' the regulatory process by intervening on behalf of Mr. Keating . 
 Unlike many lawmakers , Chairman Gonzalez says he considers intervening with regulators to be improper . 
 `` When you reach a point where a policy-making body is trying to shape administrative decisions , then that 's a no-no in my book , '' the Texas lawmaker says . 
 And he has attached himself to the Lincoln story tenaciously . 
 Unless the questions are answered , I will keep on going . '' 
 Lawmakers often are reluctant to embarrass colleagues , even those of opposing political parties . 
 In the recent Housing and Urban Development Department scandal , for example , Rep. Thomas Lantos , the California Democrat who led the hearings , tiptoed through embarrassing disclosures about HUD grants secured by Sen. Alfonse D'Amato , a New York Republican . 
 But Chairman Gonzalez is a genuine maverick . 
 He comes from the same political line as Wright Patman , a bank-baiting Texas populist who chaired the Banking Committee until 1974 . 
 Mr. Gonzalez is also a stickler for ethical standards who refuses to accept honorariums and who believes in conducting official business in the open . 
 Early in his political career , as a city councilman in San Antonio , he walked out of a meeting when political supporters asked that the police chief be replaced , denouncing the closed-door affair publicly as a `` bat-roost meeting . '' 
 The immediate target of Rep. Gonzalez 's inquiry is Danny Wall , chairman of the Office of Thrift Supervision . 
 As the principal regulator of the thrift industry , Mr. Wall delayed seizing Lincoln S&L for more than two years after his staff told him that the California thrift was insolvent and that potential losses to taxpayers were growing rapidly . 
 Rep. Gonzalez seems primed to lash out at Mr. Wall when hearings resume Thursday with testimony by two federal regulators from San Francisco , William Black and Mike Patriarca . 
 Mr. Wall relieved them of responsibility for supervising Lincoln in 1988 . 
 Mr. Gonzalez expressed concern over a report that the two had been summoned to Washington by Mr. Wall last week to discuss their testimony in advance . 
 `` I think he is trying to improperly influence a witness , and by God I 'm not going to tolerate it , '' he says . 
 Mr. Wall , however , is a self-proclaimed `` child of the Senate '' and former staff director of its Banking Committee . 
 An inquiry into his handling of Lincoln S&L inevitably will drag in Sen. Cranston and the four others , Sens. Dennis DeConcini -LRB- D. , Ariz. -RRB- , John McCain -LRB- R. , Ariz. -RRB- , John Glenn -LRB- D. , Ohio -RRB- and Donald Riegle -LRB- D. , Mich . -RRB- . 
 They all attended a meeting in April 1987 questioning why a federal audit of Lincoln S&L had dragged on for two years . 
 `` I 'm certain that in the course of the hearings the names -LCB- of the senators -RCB- will be brought out , '' Mr. Gonzalez says . 
 This is raising eyebrows . 
 `` When I first got a glimpse at the witness list , I could n't believe that they were going to go ahead and do this , '' says Michael Waldman , director of Congress Watch , a consumer group . 
 There are some witnesses who will be forced to testify about their meetings with senators . '' 
 And a Democratic aide to a Banking Committee member remarks , `` I too am astounded by it , because Gonzalez has certainly placed a lot of Democratic senators in a very bad position . '' 
 All the senators say they merely were trying to ensure fairness for a constituent . 
 Mr. Keating lives in Phoenix , and the California thrift 's parent is an Ohio-chartered corporation with holdings in Michigan . 
 Chairman Gonzalez expresses sympathy for Sen. Riegle , his counterpart as chairman of the Senate Banking Committee . 
 `` He 's wise , he 's good and I know he 's an honest man , '' the Texan says . 
 But at the same time , Mr. Gonzalez has n't forgotten a confrontation over Mr. Wall during House-Senate negotiations over S* bailout legislation during the summer . 
 The Senate negotiators included Sens. Cranston and Riegle and Mr. Wall 's principal sponsor , Republican Sen. Jake Garn of Utah . 
 They were willing to trade important provisions in the bailout legislation to preserve Mr. Wall 's job and to avoid a reconfirmation hearing in which he would be called upon to testify about Lincoln S&L . 
 Most importantly , the Senate traded away the Bush administration 's controversial plan to finance the bailout , which was partly reinstated later . 
 At the time , Mr. Gonzalez said several senators told him that they `` could get some roadblocks out of the way if there could be some understanding on Garn 's insistence on Wall . '' 
 Now Mr. Gonzalez is holding the equivalent of reconfirmation hearings anyway , under the guise of the Lincoln investigation . 
 `` In a way , that 's what this is , '' Mr. Gonzalez concedes . 
 Even some House Banking Committee members could suffer from the fallout . 
 Mr. Keating raised $ 20,000 for Rep. Doug Barnard 's 1986 re-election campaign while the Georgia Democrat was taking his side against regulators who wanted to curb risky investments and wholesale deposit brokering . 
 He recently voted `` present '' when the committee authorized a subpoena to compel Mr. Keating to testify , then changed his vote to yes . 
 But the chairman 's supporters have the upper hand as federal regulators press a $ 1.1 billion fraud suit against Mr. Keating and others . 
 Rep. Jim Leach -LRB- R. , Iowa -RRB- says the Lincoln S&L affair is `` the biggest bank heist in history , '' and adds : `` The great question that remains to be resolved is whether we have a congressional Watergate in the making . '' 
 A witness set to testify on Thursday was quoted in a news report over the weekend as saying Lincoln `` laundered '' campaign contributions illegally . 
 But the witness , William Crawford , California 's chief state thrift regulator , denies saying that . 
 `` I do n't know whether it was done properly or not , because I 'm not a lawyer , '' he said in a telephone interview yesterday . 
 But he said he is prepared to testify that executives of Lincoln and its parent corporation got unusually high salaries and frequent calls directing them to make specific contributions . 
 The committee also has summoned Mr. Wall 's predecessor , Edwin Gray . 
 He has characterized the five senators ' roles as `` tantamount to an attempt to subvert the... regulatory process , '' and he is n't expected to back down even though the five senators have disputed his account of a 1987 meeting . 
 So the senators must brace themselves . 
 Sen. Cranston , as he returned to the capital last week from a one-day trip to inspect earthquake damage in San Francisco , sighed to an aide : `` Well , back to Keatingland . 
 When Anne Volokh and her family immigrated to the U.S. 14 years ago , they started life in Los Angeles with only $ 400 . 
 They 'd actually left the Soviet Union with $ 480 , but during a stop in Italy Ms. Volokh dropped $ 80 on a black velvet suit . 
 Not surprisingly , she quickly adapted to the American way . 
 Three months after she arrived in L.A. she spent $ 120 she did n't have for a hat . 
 -LRB- `` A `` A turban , '' she specifies , `` though it was n't the time for that 14 years ago . 
 But I loved turbans . '' -RRB- 
 Since then she has become wealthy . 
 Her husband and older son -- a computer prodigy profiled in The Wall Street Journal in 1981 , when he was 13 -- run a software company with expected sales this year of $ 10 million . 
 Most recently , she has become the publisher of Movieline , a four-year-old Los Angeles magazine that began national distribution last month , with an initial press run of 100,000 copies . 
 Distributed by the Hearst Corp. 's Eastern News , the glossy publication melds Vanity Fair 's gossipy archness and Premiere 's earnest delving into behind-the-scenes minutiae , with a special emphasis on Tinseltown as fashion trendsetter . 
 It 's being sold through bookstores , newsstands and some video stores . 
 Though Ms. Volokh is a small woman , she has an outsized personality and dramatic flair that seem perfectly suited to capitalism as it is practiced in Hollywood . 
 Certainly life for her has changed considerably since the days in Kiev , when she lived with her parents , her husband and her two sons in a 2 apartment in what she calls `` silent internal immigration , '' dreaming of escape . 
 Now , for example , she owns 48 hats . 
 However , she remembers the lean years and recalls with relish wearing her first major American purchase -- that years later and having a Los Angeles boutique owner ask her if it was a Chanel . 
 With obvious satisfaction , she says she told him : `` No darling , I just give it a Chanel look . '' 
 She keeps track of the rest of her hats by stapling Polaroid snapshots to the outside of each hatbox . 
 Are the hats merely part of her new L.A. persona , along with the many ultra-thin Capri cigarettes she smokes , the parties she throws for 500 people , the Chekovian feasts she offers guests at her weekend place in Santa Barbara ? 
 `` No , darling , '' she said recently in her fluent , slightly affected English , during a trip East to promote Movieline 's national expansion . 
 You have to be born with it . 
 I used to wear hats in Russia , but I had to make them and my dresses . 
 On the hat side I was n't getting what I wanted . '' 
 Now 48 years old , Ms. Volokh has definite ideas about what she wants . 
 At Movieline , she wants `` specific paragraphing , specific tone , a specific attitude -- bright and bold and tongue-in-cheek . '' 
 In restaurants -LRB- in this case , the Russian Samovar , a New York restaurant operated by and for Soviet emigres -RRB- , she did n't want the chirpy , folkish music bouncing through the room . 
 `` You people here think this is Russian music , '' she said with disdain , and called over to the waitress : `` Could you turn it off ? '' 
 That done , Ms. Volokh spoke with rampant eloquence about the many attributes she feels she was born with : an understanding of food , business , Russian culture , human nature , and parties . 
 `` Parties are rather a state of mind , '' she said , pausing only to taste and pass judgment on the Georgian shashlik -LRB- `` a `` a little well done , but very good '' -RRB- . 
 If you are born to give parties , you give parties . 
 Even in Russia we managed to give parties . 
 In Los Angeles , in our lean years , we gave parties . '' 
 As publisher of a magazine devoted to movies as guideposts for fashion and other fantasies , Ms. Volokh sees her party-giving as an important part of business . 
 She has thrown extravagant soirees for crowds of people , but prefers more intimate gatherings . 
 At American cocktail parties everyone 's always looking over your shoulder to see who they can talk to next . 
 I like rather tea , because it is at the end of the day . '' 
 She serves high Russian tea , at 5 p.m . 
 It 's supposed to be later but I just moved it . 
 In Los Angeles , it 's important to catch people just after work . '' 
 She also frequently invites directors , producers , actors , writers and other show business people for `` coffee and clips in the pleasure dome . '' 
 Guests bring movies on tape , and show their favorite three-to-five minute segments on the screen that unrolls from the ceiling of the Volokhs ' art-nouveau library -LRB- `` the pleasure dome '' -RRB- . 
 They eat `` sinful and sensual things '' -- and explain their clips . 
 `` It 's very revealing and soul baring , '' said Ms. Volokh . 
 The idea for Movieline actually was dreamed up by an old friend of the Volokhs , Boris Krutchensky -LRB- who has the title of co-publisher -RRB- , and Laurie Halpern Smith , now the magazine 's co-editor . 
 Mr. Krutchensky approached Ms. Volokh five years ago about backing the publication , which started out as a listing guide . 
 She was interested only if she could guide it editorially as well . 
 `` Anne does n't believe in blandness , '' said Ms. Smith . 
 She wants things to be exciting . 
 And she has this inexhaustible energy . 
 She 'll think of an idea the editorial people think is impossible , then she 'll have us make it work . '' 
 In fact , Ms. Volokh was n't just a rich lady who needed a hobby . 
 Back in the Soviet Union she was a respected journalist , writing a weekly column about the national cuisine for Sunday Izvestia . 
 Those columns -- vivid discussions of the cultural and literary reverberations of food as well as practical advice on how to glamorize dreary Sovietized meals -- became the basis for her erudite and entertaining cookbook , `` The Art of Russian Cuisine , '' brought out in 1983 by Macmillan Publishing Co . 
 `` I do n't trust people who do n't eat , '' said Ms. Volokh , though she herself stopped eating lunch a few years ago to drop 25 pounds . 
 Look at Dostoevski and Kafka . 
 No one ever eats in their books and look at them . 
 Tolstoy 's characters eat , Pushkin 's , Gogol 's . '' 
 In her cookbook , which Macmillan is bringing out in soft cover this month -LRB- with the blini recipe revised so it works -RRB- , she introduces each chapter with appropriate quotations from Russian literature : Pushkin on blini , Goncharov on piroghi . 
 In life , she offers practical dieting advice : `` Divide your meals into important and unimportant . 
 In a great restaurant , do n't deprive yourself . 
 The other meals do n't matter . '' 
 Amusing as she is , and frivolous as she can seem , this is a serious person with some difficult memories . 
 She was the child of relative privilege . 
 Her mother was a translator ; her father was `` the eternal vice director . '' 
 `` I emigrated to wear better hats , do better parties , '' she said with a giggle . 
 But we should n't leave out political reasons , number one . 
 You try to maintain your dignity under difficult circumstances . 
 One can not imagine how you live when you live those double and triple lives . '' 
 By 1973 , after their second child was born , it had become clear to Ms. Volokh and her husband Vladimir , a computer scientist , that they wanted to leave the U.S.S.R. Ms. Volokh quit her job , to remove herself from the public eye . 
 The wait was miserable . 
 Before granting Ms. Volokh 's parents a visa , the government required her mother to obtain permission from her first husband , whom she had divorced 38 years earlier . 
 Mr. Volokh was fired from his job , and had to endure hours of organized verbal abuse from his co-workers , accusations of sabotage and counterrevolutionary activities . 
 The Volokhs were afraid that they 'd end up like a friend of theirs who 'd applied for a visa and waited for 10 years , having been demoted from his profession of theoretical mathematician to shipping clerk . 
 They did n't . 
 Their visa came in relatively short order , and they moved to Los Angeles . 
 Mr. Volokh soon found work in his field , but Ms. Volokh refused the obvious and available a Russian who spoke fluent English . 
 `` That 's always looking back , '' she said . 
 I wanted to be in business . '' 
 On the way to that goal , she received her first U.S. paycheck for proofreading a book of Polish poetry , attended secretarial school , then went to work for a fund-raising organization . 
 Soon she was running the office . 
 When her husband and son founded their computer company , Vesoft , she worked as business manager , bookkeeper and publicist . 
 Now Movieline is located in the same building as Vesoft . 
 `` Things work out unexpectedly in life , '' said Ms. Volokh . 
 You never know if you 'll be chosen to be the scapegoat or the lucky one . 
 We were lucky . 
 William D. Forrester , president of the U.S.-U.S.S.R. Trade and Economic Council , has a warning for U.S. companies trying to do business in the Soviet Union . 
 `` It 's an extremely complex market , and you have to be prepared to make a big commitment , '' Mr. Forrester says . 
 We are not trying to encourage everyone . '' 
 Undeterred by such words of caution , corporate America is flocking to Moscow , lured by a huge untapped market and Mikhail Gorbachev 's attempt to overhaul the Soviet economy . 
 Doing business with the Russians , once the pursuit of a handful of hardened veterans , has become the goal of such major companies as General Motors Corp. , Federal Express Corp. and Procter & Gamble Co. , as well as a cluster of smaller firms . 
 Reflecting the new-found interest , more than 140 U.S. companies are taking part in a Moscow exhibition organized by Mr. Forrester 's trade group . 
 But while U.S. interest may be big and growing , the difficulties that have stymied deals in the past show no sign of abating . 
 Alongside the old problems of a non-convertible currency and an inpenetrable bureaucracy , Western business executives must now grapple with new complexities linked to perestroika , the restructuring of the Soviet economy . 
 Executives say Mr. Gorbachev 's moves to break up the government 's foreign trade monopoly have created uncertainties as well as opportunities . 
 Changing legislation has opened the field to thousands of inexperienced Soviet players , many who promise more than they can deliver . 
 And some foreign firms are finding that even when they manage to overcome such hurdles , their ventures now have to be endorsed by such unpredictable bodies as the Soviet parliament and the governments of the nation 's republics . 
 `` You have to go out to all your constituents , '' says James H. Giffen , who is spearheading the most ambitious attempt by U.S. firms to break into the Soviet market , involving investment of more than $ 5 billion in some two dozen joint ventures . 
 As part of that attempt , by the American Trade Consortium , Mr. Giffen says he spends a lot of time lobbying . 
 Growing public fears about the Soviet environment is one new factor affecting some joint-venture plans . 
 Over the past two years , Soviet ministries have been talking to international firms , including Occidental Petroleum Co. and Combustion Engineering Inc. of the U.S. , Montedison S.p . A. of Italy and several Japanese groups , about jointly building and operating several big petrochemical plants . 
 The plans have come under fire from Soviet environmentalists , and officials say many are likely to be scaled back or dropped . 
 Whatever the difficulties , Mr. Gorbachev remains committed to increasing foreign trade . 
 For political as well as economic reasons , U.S. companies are at the top of his priorities -- a point he underscored by spending two hours walking around the U.S. trade show last week . 
 Talking to a small group of U.S. executives afterwards , Mr. Gorbachev appeared impatient for a big expansion in U.S.-Soviet trade , which now amounts to a meager $ 3 billion annually . 
 The U.S. ranks fourth of countries that have concluded joint ventures , behind West Germany , Finland and Italy . 
 According to several people present at the meeting , Mr. Gorbachev also supported the idea of concluding several commercial accords with the U.S. , possibly at his next summit meeting with President Bush . 
 Judging by the crush at the exhibition , deprived Soviet consumers are more than ready for U.S. products . 
 Hundreds of people lined up every day at the Colgate-Palmolive Co. stand to receive a free tube of toothpaste , a commodity in chronically short supply here . 
 And unruly crowds at RJR Nabisco Inc. 's booth almost knocked over a glass showcase in the rush to get a free Camel cigarette sticker . 
 Some U.S. products are filtering into the Soviet market under an emergency import program . 
 Both Colgate and Procter & Gamble have received big orders for toothpaste , soap and detergents . 
 The American Trade Consortium says it is planning to ship some $ 500 million of consumer goods , financed by bank credits , in the first few months of next year . 
 But the current Soviet purchasing spree may be a one-time affair . 
 The goal of most U.S. firms -- joint ventures -- remains elusive . 
 Because the Soviet ruble is n't convertible into dollars , marks and other Western currencies , companies that hope to set up production facilities here must either export some of the goods to earn hard currency or find Soviet goods they can take in a counter-trade transaction . 
 International competition for the few Soviet goods that can be sold on world markets is heating up , however . 
 Shelley M. Zeiger , an entrepreneur from New Jersey who buys Soviet porcelain and `` matryoshka '' nesting dolls for export to the U.S. , says West German companies already have snapped up much of the production of these items . 
 Seeking to overcome the currency problems , Mr. Giffen 's American Trade Consortium , which comprises Chevron Corp. , RJR , Johnson & Johnson , Eastman Kodak Co. , and Archer-Daniels-Midland Co. , has concocted an elaborate scheme to share out dollar earnings , largely from the revenues of a planned Chevron oil project . 
 Several medical concerns , including Pfizer Inc. , Hewlett-Packard Co. , Colgate and Abbott Laboratories intend to pursue a similar consortium approach . 
 `` It 's hard to invest capital here on the same basis as investing in other countries , '' says Dennis A. Sokol , president of Medical Service Partners Inc. , who is putting the medical consortium together . 
 Some U.S. entrepreneurs operate on a smaller scale . 
 One group seeks to publish a U.S.-Soviet medical journal in conjunction with the U.S.S.R. Ministry of Health . 
 According to Richard P. Mills , a Boston-based official of the U.S. partner , 10,000 copies of the quarterly will be printed in Russian from next year . 
 It will be financed by advertisements from U.S. companies and by simultaneous publication of an English-language journal containing details of Soviet medical advancements . 
 `` We found a market niche , '' Mr. Mills boasts . 
 It 's truly entrepreneurial . 
 General Electric Co. was given an $ 89.6 million Navy contract for nuclear propulsion parts . 
 Westinghouse Electric Corp. also won a $ 75.5 million Navy contract for nuclear propulsion parts . 
 Federal Data Corp. was issued a $ 14.5 million Navy contract for computer systems . 
 American Telephone & Telegraph Co. was awarded an $ 11.5 million Navy contract for oceanographic services . 
 Cray Research Inc. said it sold one of its newest and largest computer systems , the Cray , to the United Kingdom Meteorological Office . 
 The system is the first to be sold through the joint marketing agreement between Cray and Control Data Corp . 
 The supercomputer , which lists for $ 18.5 million , will be installed in the first quarter of 1990 in the meteorological office 's headquarters in Bracknell , England . 
 Shareholders of Nuovo Banco Ambrosiano S.p . A. voted to accept a bid of 5,500 lire -LRB- $ 4.03 -RRB- a share by France 's Credit Agricole for 13.32 % of the bank , rejecting an earlier , equal offer by Italy 's Assicurazioni Generali S.p . A . 
 The move will give Nuovo Banco a badly needed foreign presence , and make Credit Agricole the bank 's largest shareholder . 
 It also opens a rift in the bank 's shareholders ' syndicate that could lead to a battle for control of the concern . 
 Nuovo Banco will become Italy 's biggest private-sector bank when it completes its scheduled merger with Banca Cattolica del Venetoen by year end . 
 Credit Agricole asked a Milan court to sequester the Nuovo Banco shares , the Italian news agency ANSA reported . 
 The tribunal is scheduled to rule on the request Friday . 
 No reason for the request was given . 
 Credit Agricole officials could n't be immediately reached for comment . 
 The decision to accept Credit Agricole 's bid , valued at 283.3 billion lire -LRB- $ 207.4 million -RRB- , came after a stormy weekend meeting . 
 Nuovo Banco 's second largest shareholder , the Fiat S.p . A.-controlled investment concern , Gemina S.p . A. , fought to have Generali 's offer approved . 
 Gemina , which owns 13.26 % of Nuovo Banco , abstained in the final vote on Credit Agricole , which was nonetheless approved by a majority of shareholders . 
 The linkup with Credit Agricole will give Nuovo Banco its first foreign presence since it was formed from the wreck of the old Banco Ambrosiano , which collapsed amid scandal after the death of Chairman Roberto Calvi in 1982 . 
 Since then , the bank has strengthened its Italian network , and has posted strong results . 
 `` The shareholders felt we needed a foreign presence more than we needed links with an insurance company , '' an Ambrosiano spokeswoman said . 
 Gemina said in a statement that `` it reserves the right to take any action to protect its rights as a member of the syndicate . '' 
 A company spokeswoman said the company had n't decided what measures to take , but did n't rule out legal action . 
 Generali , Italy 's biggest insurer , last month offered 5,500 lire a share for the Nuovo Banco stake held by Banco Popolare di Milano , the bank 's largest shareholder , which announced plans to sell the holdings earlier this year . 
 A Generali spokesman declined to comment on Nuovo Banco 's rejection of the insurer 's offer . 
 On the Milan stock exchange , Nuovo Banco 's shares jumped to 4,830 lire each from 4,695 lire Friday . 
 Qintex Australia Ltd. , a media and resorts concern controlled by Australian entrepreneur Christopher Skase , announced a plan to restructure and sell assets to try to ease its financial problems . 
 Mr. Skase , a 41-year-old former newspaper reporter who chairs the company , said in a statement that Qintex will sell its 51 % stake in its upscale Mirage resorts in Australia and Hawaii as well as three Australian television stations . 
 The sales are expected to raise more than 600 million Australian dollars -LRB- US$ 462.2 million -RRB- , Mr. Skase said . 
 Qintex Australia has n't disclosed its borrowings , but analysts estimate the company 's debt at A$ 1.2 billion . 
 Mr. Skase also said the restructuring plan calls for the merger of Qintex Australia with Qintex Ltd. , which owns 55 % of Qintex Australia . 
 He said the move will `` significantly reduce administrative and operating costs , '' but he did n't provide details of the merger . 
 Company officials said over the weekend that Qintex Australia 's bank creditors have become concerned about a barrage of bad news at the company , including a failed US$ 1.5 billion plan to buy Communications Co. , a Beverly Hills , Calif. , movie and television production concern . 
 Friday , Qintex Entertainment Inc. , a 43%-owned U.S. affiliate , filed for protection from creditor lawsuits under Chapter 11 of the U.S. Bankruptcy Code . 
 Analysts predicted that the move would further shake creditor confidence in Qintex Australia and force it to sell assets . 
 The company 's latest moves were disclosed after the Australian Stock Exchange suspended trading in shares of Qintex Australia and Qintex Ltd. because the companies had n't answered an exchange inquiry about the extent of their loans , investments and deposits at Qintex Entertainment . 
 Mr. Skase 's statement was addressed to the stock exchange and appeared to be a response to the inquiry . 
 It said Qintex Entertainment owes Qintex Australia US$ 38.1 million in loans not secured by specific assets . 
 Qintex Australia also said it has an investment of A$ 83.3 million in Qintex Entertainment shares . 
 In the statement , Mr. Skase said that on the basis of current interest rates in Australia , the company 's asset sales would reduce interest expense by about A$ 120 million a year in addition to eliminating certain liabilities . 
 In March , Qintex sold 49 % of the three Mirage resorts to Japan 's Nippon Shinpan Co. and Mitsui & Co. for A$ 433 million . 
 Yesterday 's statement did n't say whether the Japanese companies will acquire Qintex 's remaining stake in the resorts . 
 Before its shares were suspended from trading , Qintex Australia plunged to 16 Australian cents -LRB- 12 U.S. cents -RRB- a share yesterday from 33 Australian cents Friday . 
 The shares traded at about A$ 1.50 in March , when the plan to acquire was announced . 
 Qintex Ltd. shares sank to A$ 1.50 yesterday from A$ 3.05 Friday . 
 Mr. Skase 's statement cited four recent problems that he said had cut group cash flow by more than A$ 200 million . 
 They were what he called an `` unlawful termination '' by of the acquisition agreement with Qintex , high Australian interest rates , a pilots ' strike at Australian domestic airlines that cut revenue at the company 's Australian resorts and delays in completing a sale of two regional TV stations in Queensland state . 
 has sued Qintex Australia for breach of contract and fraud over the collapsed acquisition agreement , and Qintex Australia has threatened a countersuit . 
 Qintex Australia has n't yet reported results for the fiscal year ended July 31 . 
 In his statement , Mr. Skase said preliminary accounts showed that group profit before interest , tax and depreciation `` will exceed A$ 170 million . '' 
 He gave no further details . 
 Shareholders ' funds as of July 31 were estimated at more than A$ 1 billion , Mr. Skase said , compared with A$ 725 million a year earlier . 
 The company will make `` adequate provisions '' to cover costs of the dispute with and any loss from the investment in Qintex Entertainment , he said . 
 Mr. Skase also disclosed a disagreement among directors of Qintex Australia over certain fees claimed by Qintex Group Management Services Pty. , a management-services concern in which Qintex Australia executives have an interest . 
 Qintex Australia paid the management company A$ 32.6 million in the latest fiscal year . 
 Mr. Skase said most of the money went to other parties for expenses such as rent and travel , but a smaller portion is owed to senior executives and others for management services . 
 Non-executive directors of Qintex Australia , who must approve payments to the senior executives , balked at the amount . 
 Two of the directors resigned , Mr. Skase said , so the payments have n't yet been approved . 
 Chip 's Memory Is Here Today , Here Tomorrow 
 TWO COMPANIES plan to market a new chip with ceramic circuits that store data even when the power is off . 
 Today 's most widely used data-storing chips have `` volatile '' memories -- their data disappear if they are n't fed a steady diet of electricity , so they need external power supplies . 
 National Semiconductor Corp. and a start-up named Ramtron Corp. plan to start shipping so-called ferroelectric memories , which can remember data for at least 10 years without any current flowing to them . 
 The chips use materials , such as lead zirconate titanate , to form microscopic switches that retain their data without electricity . 
 Developers caution that broad applications are several years away because the technology is n't fully refined . 
 But Ramtron of Colorado Springs , Colo. , plans to start shipping commercial quantities of simple ferroelectric chips in December . 
 The company expects the chips eventually to be used in devices that mimic a whole range of computer memory equipment , including floppy-disk and hard-disk drives . 
 National Semiconductor is getting ferroelectric technology from Krysalis Corp. in Albuquerque , N.M . 
 National says it agreed to acquire Krysalis 's assets and will start shipping commercial quantities of its first chips , including a 4-kilobit memory , next year . 
 Once production hurdles are overcome , the chips could take over a significant part of the market . 
 In addition to not needing an outside power source , they are potentially cheaper to make because they require fewer manufacturing steps than conventional chips . 
 Military buyers have shown interest , National says , because ferroelectric chips resist atomic radiation . 
 And while today 's non-volatile chips -- such as electronically erasable programmable read-only memory chips -- ca n't be used in a computer 's central memory because they `` learn '' data slowly , ferroelectric chips accept data at very high speeds . 
 Showing Up in Court Without Being There 
 AN AUSTIN , Texas , company plans to make it easy for you show up in court a thousand miles away without leaving town . 
 Witnesses often must travel long distances to give face-to-face depositions before lawyers and court reporters . 
 That means huge travel bills . 
 And telephone or videotape depositions just do n't match physical encounters . 
 That could change , thanks to lower long-distance rates and cheaper electronics . 
 Video Telecom Corp. , which markets videoconferencing systems , is working with court reporters to wire a nationwide network to allow depositions by live television . 
 The company installed a prototype system that connects Dallas with Miami over digital phone lines . 
 And it is preparing to set up shop in Chicago , New York and 10 other cities where court-reporting agencies can tie conference rooms into the network . 
 While lawyers arranged individual tie-ups before , the formal network of court reporters should make things easier and cheaper . 
 An attorney will be able to use the network for an hourly fee of between $ 200 and $ 400 , depending on the quality of the picture , to take depositions from witnesses in any of the connected cities . 
 Japanese Reverse Tack On Patent Protection 
 JAPAN'S MISUSE of U.S. patents has been a sore point for American chip makers . 
 Now at least one Japanese company is turning the courtroom tables . 
 Until now , most Japanese charges have been responses to suits against them . 
 But last year Hitachi Ltd. surprised Japan 's electronics industry when it accused Korea 's Samsung Electronics Co. of using Hitachi technology to make dynamic random-access memory chips . 
 A settlement was reached but was n't made public . -RRB- 
 And Hitachi went on the offensive against the U.S. 's Motorola Inc. earlier this month with a suit charging that Motorola 's new MC88200 chip infringes on a Hitachi patent . 
 Another recent Hitachi suit accuses Motorola of reverse engineering a Hitachi technology -- a turnabout from a nation of champion reverse engineers . 
 The moves illustrate the more aggressive attitude toward patent protection that patent experts say Japan is starting to take . 
 Hitachi made the reverse-engineering charges in an amendment to a counterclaim filed in a federal district court in Texas after Motorola sued Hitachi for patent violation . 
 Hitachi charges Motorola `` has engaged in fraudulent and inequitable conduct in the procurement of certain Motorola patents '' used in Motorola 's MC68030 microprocessor chip . 
 Translation : Motorola appears to have taken a Hitachi technology that is patented in the U.S. , Hitachi says , and `` tried to make it look like a new technology . '' 
 Motorola either denied or would n't comment on the various charges . 
 Odds and Ends 
 COMPUTER chips that simulate human vision have been developed by Japan 's Sharp Corp . 
 They mimic the brain by `` looking '' at an image , extracting the fundamentals -- boundaries , corners and lines -- and translating them into computer data . 
 Sharp says the set of chips could improve fax machines , graphics computers or identification systems that recognize facial features . 
 An N.V . Philips unit has created a computer system that processes video images 3,000 times faster than conventional systems . 
 Using reduced instruction-set computing , or RISC , chips made by Intergraph of Huntsville , Ala. , the system splits the image it `` sees '' into 20 digital representations , each processed by one chip . 
 Tandy Corp. , citing sluggish sales of consumer-electronics goods , said net income dropped 3.3 % for the first quarter ended Sept. 30 . 
 The results , which represented the fifth consecutive quarter of flat-to-lower earnings for the big electronics retailer , disappointed analysts and traders . 
 Tandy 's stock fell $ 1.375 a share to close at $ 44 in New York Stock Exchange composite trading . 
 Net for the quarter was $ 62.8 million , or 73 cents a share , down from $ 64.9 million , or 72 cents a share , a year earlier . 
 The company said earnings would have increased if it had n't been actively repurchasing its shares , thus increasing its interest expense and reducing its interest income . 
 Tandy had 86.3 million shares outstanding at Sept. 30 , down from 90 million a year earlier . 
 Revenue rose 5 % to $ 986 million from $ 937 million . 
 Tandy said consumer electronics sales at its Radio Shack stores have been slow , partly because of a lack of hot , new products . 
 `` Radio Shack continues to be lackluster , '' said Dennis Telzrow , analyst with Eppler , Guerin & Turner in Dallas . 
 He said Tandy `` has done a decent job '' increasing sales by manufacturing computers for others and expanding sales of its Grid Systems Corp. subsidiary , which sells computers to bigger businesses , but `` it 's not enough to offset the problems at Radio Shack . '' 
 Sales at Radio Shack stores open more than a year grew only 2 % in the quarter from a year earlier , he said . 
 As a result , Mr. Telzrow said he cut his fiscal 1990 per-share earnings estimate for Tandy to $ 4.05 from $ 4.20 . 
 Tandy earned $ 88.8 million , or $ 3.64 a share , in the year ended June 30 . 
 Barry Bryant , an analyst with Drexel Burnham Lambert Inc. , said Tandy also has suffered from lethargic sales of its computers aimed at the home and small-office market , which are less-advanced and cheaper than computers aimed at the corporate market . 
 Tandy has added several new products to that line , including a laptop computer priced around $ 1,000 , and is focusing its advertising on the easy-to-use software that is packaged with its machines . 
 Mr. Bryant and other analysts hope all those moves will combine to help Tandy 's results improve in the important Christmas quarter . 
 `` They 've been promising 13 % to 15 % growth based on the strategic moves they 've made , '' he said . 
 If the earnings acceleration is to take place , that should be the quarter . 
 At a private dinner Thursday , Drexel Burnham Lambert Inc. chief executive Frederick Joseph delivered a sobering message about the junk bond market to officials of Prudential Insurance Co. of America . 
 Mr. Joseph conceded the junk market was in disarray , according to people familiar with the discussion . 
 He said Drexel -- the leading underwriter of high-risk junk bonds -- could no longer afford to sell any junk offerings if they might later become troubled because Drexel risked losing its highly lucrative junk franchise . 
 The dinner was a stark confirmation that 1989 is the worst year ever for the $ 200 billion junk market . 
 And investors and traders alike say the current turmoil could take years to resolve . 
 Amid the market disorder , even Drexel , which has the widest and most loyal following of junk bond investors , is pulling in its horns . 
 Although the big investment bank still dominates the junk market , Drexel has been unable to stem the fallout from growing junk bond defaults , withdrawn new offerings , redemptions by shareholders in junk bond mutual funds and an exodus of once-devoted investors . 
 For many money managers , the past four months have been humiliating . 
 `` This is the worst shakeout ever in the junk market , and it could take years before it 's over , '' says Mark Bachmann , a senior vice president at Standard & Poor 's Corp. , a credit rating company . 
 In the third quarter , for example , junk bonds -- those with less than an investment-grade rating -- showed negative returns , the only major sector of the bond market to do so . 
 Since the end of last year , junk bonds have been outperformed by all categories of investment-grade bonds , including ultra-safe Treasury securities . 
 The junk market , which mushroomed to $ 200 billion from less than $ 2 billion at the start of the decade , has been declining for months as issuers have stumbled under the weight of hefty interest payments . 
 The fragile market received its biggest jolt last month from Campeau Corp. , which created its U.S. retailing empire with more than $ 3 billion in junk financing . 
 Campeau developed a cash squeeze that caused it to be tardy on some interest payments and to put its prestigious Bloomingdale 's department store chain up for sale . 
 At that point , the junk market went into a tailspin as buyers disappeared and investors tried to sell . 
 In an interview , Mr. Joseph says his dinner discussion with the Prudential executives acknowledged problems for junk . 
 `` What I thought I was saying is that the market is troubled but still viable and , appropriately enough , quite quality-conscious , which is not at all bad , '' he says . 
 Nobody 's been perfect in their credit judgments the past couple years , and we 're going to make sure our default rates are going to be in the acceptable parameters of the market . '' 
 What has jolted many junk buyers is the sudden realization that junk bonds can not necessarily be bought and sold with the ease of common stocks and many investment-grade bonds . 
 Unlike the New York Stock Exchange , where buyers and sellers are quickly matched , the junk market , where risky corporate loans are traded , is sometimes closed for repairs . 
 At closely held Deltec Securities Corp. , junk bond money managers Amy K. Minella and Hannah H. Strasser say the problems of the junk market go deeper than a temporary malaise . 
 In recent months , they say , there has been heavy selling of junk bonds by some of the market 's traditional investors , while new buyers have n't materialized to replace them . 
 Wall Street securities firms , `` the primary source of liquidity for the high yield market , '' have been net sellers of junk bonds because of trading losses , Deltec said in a recent , grim report to customers . 
 Mutual funds have also been net sellers of junk bonds as junk 's relatively poor performance and negative press coverage have produced `` above-normal '' redemptions by shareholders , Deltec said . 
 Investors , trying to raise cash , have sold `` large liquid issues '' such as RJR Holdings Corp. and Kroger Co. ; declines in these benchmark issues have contributed to the market 's distress . 
 And , Deltec said , buying has been severely reduced because savings and loans have been restricted in their junk purchases by recently passed congressional legislation . 
 `` In fact , savings and loans were sellers of high yield holdings throughout the quarter , '' Deltec said . 
 Ms. Minella and Ms. Strasser say they are managing their junk portfolios defensively , building cash and selectively upgrading the overall quality . 
 Meanwhile , Prudential , the nation 's largest insurer and the biggest investor in junk bonds , has seen the value of its junk bond portfolio drop to $ 6.5 billion from $ 7 billion since August because of falling junk prices . 
 `` We certainly do have a lack of liquidity here , and it 's something to be concerned about , '' says James A. Gregoire , a managing director . 
 I have no reason to think things will get worse , but this market has a knack for surprising us . 
 This market teaches us to be humble . '' 
 The junk market 's `` yield hogs are learning a real painful lesson , '' he says . 
 Although the majority of junk bonds outstanding show no signs of default , the market has downgraded many junk issues as if they were in trouble , says Stuart Reese , manager of Aetna Life & Casualty Insurance Co. 's $ 17 billion investment-grade public bond portfolio . 
 But we think the risks are there for things getting a lot worse . 
 And the risks are n't appropriate for us , '' he says . 
 The big insurer , unlike Prudential , owns only about $ 150 million of publicly sold junk bonds . 
 The string of big junk bond defaults , which have been a major cause of the market 's problems this year , probably will persist , some analysts say . 
 `` If anything , we 're going to see defaults increase because credit ratings have declined , '' says Paul Asquith , associate professor at the Massachusetts Institute of Technology 's Sloan School of Management . 
 Mr. Asquith , whose study on junk bond defaults caused a furor on Wall Street when it was disclosed last April , says this year 's junk bond defaults already show a high correlation with his own findings . 
 His study showed that junk bonds over time had a cumulative default rate of 34 % . 
 One indication of a growing number of junk defaults , Mr. Asquith says , is that about half of the $ 3 billion of corporate bonds outstanding that have been lowered to a default rating by S&P this year are junk bonds sold during the market 's big issue years of 1984 through 1986 . 
 These bonds , now rated single-D , include junk offerings by AP Industries , Columbia Savings -LRB- Colorado -RRB- , First Texas Savings Association , Gilbraltar Financial Corp. , Integrated Resources Inc. , Metropolitan Broadcasting Corp. , Resorts International Inc. , Southmark Corp. and Vyquest Inc . 
 `` Obviously , we got a lot more smoke than fire from the people who told us the market was n't so risky , '' says Bradford Cornell , professor of finance at University of California 's Anderson Graduate School of Management in Los Angeles . 
 Mr. Cornell has just completed a study that finds that the risks and returns of junk bonds are less than on common stocks but more than on investment-grade bonds . 
 Mr. Cornell says : `` The junk market is no bonanza as Drexel claimed , but it also is n't a disaster as the doomsayers say . '' 
 Despite the junk market 's problems , Drexel continues to enjoy a loyalty among junk bond investors that its Wall Street rivals have n't found . 
 During the past three weeks , for example , Drexel has sold $ 1.3 billion of new junk bonds for Turner Broadcasting Co. , Uniroyal Chemical , Continental Air and Duff & Phelps . 
 Still , the list of troubled Drexel bond offerings dwarfs that of any firm on Wall Street , as does its successful offerings . 
 Troubled Drexel-underwritten issues include Resorts International , Braniff , Integrated Resources , SCI TV , Gillette Holdings , Western Electric and Southmark . 
 `` Quality junk bonds will continue to trade well , '' says Michael Holland , chairman of Salomon Brothers Asset Management Inc . 
 `` But the deals that never should have been brought have now become nuclear waste . 
 As Helen Boehm , who owns an art porcelain company , sipped her luncheon cocktail , she reeled off the names of a few pals -- Prince Charles , Princess Diana , Sarah Ferguson , John Kluge , Milton Petrie . 
 Then , flashing a diamond ring as big as the Ritz -LRB- `` my day diamond , darling '' -RRB- , she told her two companions that she is on the `` board '' of the Vatican Museum in Rome . 
 As it turns out , the board has a lot of important members , including Winton Blount -LRB- former postmaster general of the U.S. -RRB- , Mrs. Henry Gaisman -LRB- widow of the inventor of auto-strop razor -RRB- and Vincent Murphy -LRB- an investment banker at Merrill Lynch & Co . -RRB- 
 But Mrs. Boehm did n't mention any of them . 
 `` Helen Boehm has a way with names , '' says James Revson , a gossip columnist for Newsday -LRB- and son of Joseph Revson , a founder of Revlon -RRB- . 
 Like which are droppable and which are not . 
 With the fall social season well under way , name-droppers are out in force , trying to impress their betters and sometimes put down their lessers . 
 But the truth is that almost everyone , from real-estate agents to city fathers , name-drops ; and a surprising number of people have an ancient uncle who claims he lived next door to the cartoonist who did the Katzenjammer Kids . 
 In case you have forgotten , his name was Rudolph Dirks . -RRB- 
 `` Name-dropping is pervasive and getting more so as society becomes more complex and alienating , '' says Herbert Freudenberger , a New York psychoanalyst , with a high-powered clientele . 
 It can be an avenue of entrance to a certain sector of society . 
 It provides some people a needed sense of affiliation and can help open up a conversation with someone you do n't know . '' 
 Like the Long Island matron in the theater district the other day who swore to a stranger that she once met Liza Minnelli . 
 I was having a drink in Sardi 's , when all of a sudden I saw a woman 's backside coming up the steps on the second floor and she was wearing sequined slacks . 
 I knew it was someone important , so I followed her into the ladies room and sure enough , it was Liza . 
 So I said , ` Hello . ' 
 And she said , ` Hello . ' 
 Can you imagine ? 
 Liza said hello to me . '' 
 Some people must drop names -- call it an irresistible impulse . 
 `` They ca n't help talking about the big important people they know , even if they do n't really know them , '' says Dr. Freudenberger . 
 Beauregard Houston-Montgomery , a New York writer who changed his name from William Stretch in 1980 , is an inveterate name-dropper . 
 `` I do it innately and pathologically , and while it may occasionally get me into trouble , it 's also gotten me access to parties and society , '' he says . 
 Name-dropping recently helped Mr. Houston-Montgomery crash a party Fame magazine threw for 100 of the 2,809 people mentioned in the diaries of the late Andy Warhol . 
 `` I guess I might have asked Beauregard to leave , but he drops so many good names , we decided to let him stay , '' says Steven Greenberg , publisher of Fame . 
 After all , Warhol was the ultimate namedropper , dropping five a day in his diaries . 
 And Beauregard was mentioned twice -- although very briefly and in passing . '' 
 Mr. Houston-Montgomery says that at the party he waved to Malcolm Forbes , publisher of Forbes magazine -LRB- `` We've been in the columns together '' -RRB- , Mary Boone , a New York art dealer -LRB- `` I `` I think she knows me , but I 'm not sure `` -RRB- and Bridget Fonda , the actress -LRB- `` She knows me , but we 're not really the best of friends '' -RRB- . 
 Mr. Revson , the gossip columnist , says there are people who actually plan whose names they are going to drop before attending a party . 
 These droppers do n't flaunt only their friendships with the Trumps , Brooke Astor or Georgette Mosbacher . 
 `` They even drop semi-obscure names like Wolfgang Flottl , whom everybody these days apparently has heard of but no one really knows , '' says Mr. Revson . 
 It 's the one-upsmanship of name-dropping that counts . '' 
 But name-dropping has other benefits , often civic . 
 In the name of civic pride and from the desire to nullify a negative image , some city promoters seek to link their municipality with the most recognizable names the city has to offer . 
 Take Cleveland . 
 It has gotten a bad rep because its once heavily polluted Cuyahoga River caught fire , because former Mayor Ralph Perk set his hair on fire with an acetylene torch and because its proposed Rock'n ' Roll Hall of Fame was recently refused an urban-development grant . 
 Some people call it `` The Mistake on the Lake '' -- Lake Erie , that is . 
 `` It helps to point out how many important people came through Cleveland on their way to the top , '' says George Miller , executive director of the New Cleveland Campaign , a nonprofit organization devoted to citing the city 's strengths . 
 Mr. Miller notes that actor Paul Newman 's family owned a sporting-goods store in Cleveland , that the late actress Margaret Hamilton , who played the bad witch in `` The Wizard Of Oz , '' once ran a nursery school in Cleveland and that comedian Bob Hope 's father , a stonemason , once worked on a church next to Severence Hall , Cleveland 's main concert hall . 
 `` Power names like that do n't hurt the city 's reputation , '' Mr. Miller says . 
 In Hollywood , an average family can gain cachet from moving into a home vacated by the famous or near famous . 
 `` Why we even just sold a three-bedroom house in Van Nuys and were able to keep the price firm in a weak real-estate market by noting that the original Lone Ranger lived there , '' says David Rambo , a sales associate with Jon Douglas Co. , a Los Angeles real-estate agency . 
 Most people ca n't even remember his name . '' 
 It is John Hart . -RRB- 
 Mr. Rambo says that a 3.2-acre property overlooking the San Fernando Valley is priced at $ 4 million because the late actor Erroll Flynn once lived there . 
 `` If Flynn had n't lived there , the property might have been priced $ 1 million lower , '' says Mr. Rambo , noting that Flynn 's house has been bulldozed , and only the swimming pool remains . 
 Press agents and public-relations practitioners are notorious name-droppers . 
 And some even do it with malice aforethought . 
 Len Kessler , a financial publicist in New York , sometimes uses it to get the attention of journalists who try to avoid him . 
 He says that when Dan Dorfman , a financial columnist with USA Today , has n't returned his phone calls , he leaves messages with Mr. Dorfman 's office saying that he has an important story on Donald Trump , Meshulam Riklis or Marvin Davis . 
 He admits he has no story on any of them on these occasions . 
 `` But it does get him to return my calls , and it makes me feel better for the times he 's given me the brushoff , '' Mr. Kessler says . 
 There are , of course , obvious dangers to blatant , unsubstantiated name-dropping . 
 Jeffry Thal , a publicity agent for the Lantz Office in Los Angeles , warns that dropping the wrong name labels the dropper as a fake and a fraud . 
 `` Get caught and you 're dead in the water , '' says Mr. Thal . 
 Mr. Thal says that Elizabeth Taylor , a client , `` hates being called ` Liz . ' 
 If directors or producers phone me and say they know ` Liz , ' I know they 've never met her . 
 She prefers ` Elizabeth . ' '' 
 In New York society , Pat Buckley , the very social wife of author William Buckley , has the nicknames `` Mrs. Buckles '' and `` Patsy . '' 
 And her husband sometimes calls her `` Ducky . '' 
 `` But call her ` Patty , ' and it 's a sure giveaway you 're not in her circle , because she does n't use that name , '' says Joan Kron , editor-in-chief of Avenue magazine , a monthly publication sent to all the right names . 
 John Spencer Churchill , a nephew of the late Sir Winston Churchill , former prime minister of Great Britain , is n't that impressed with most name-droppers he meets . 
 That 's because they only drop `` mere names , '' says Mr. Churchill . 
 Currently writing his memoirs , Mr. Churchill , an artist , tells how tycoons such as the late Jean Paul Getty , the oil billionnaire , were , in fact , known only by one initial , their last . 
 When you 're at the club , you ask whether they 've spoken to ` G . ' 
 Now they know who you mean and you know who you mean . 
 But no one else does . 
 Now that 's name-dropping , if you know what I mean . 
 Part of a Series -RCB- 
 SMYRNA , Ga. -- The auto-dealer strip in this booming suburb runs nearly five miles along Cobb Parkway , stretching from the Perimeter highway that circles Atlanta to the `` Big Chicken , '' a pullet-roofed fast-food restaurant and local landmark . 
 Twenty years ago , in the infancy of suburban sprawl , just a handful of dealerships were here . 
 Now there are 23 . 
 Alongside such long-familiar names as Chevrolet , Ford and Dodge are nameplates that did n't exist until three years ago : Acura , Sterling , Hyundai . 
 Under construction is the strip 's 24th showroom , the future home of Lexus , a luxury marque launched by Toyota Motor Corp. just two months ago . 
 The 1980s have spawned an explosion of consumer choice in America , in everything from phone companies to colas . 
 And especially , as the Cobb Parkway strip attests , in cars . 
 Americans now can choose among 572 different models of cars , vans and trucks , up from just 408 when the decade began , according to Automotive News , a trade publication . 
 For car marketers , it has become a much tougher battle to keep loyal customers from defecting to one of the new makes on the block . 
 For American car buyers , the proliferation of choice is both liberating and confusing . 
 Malcolm MacDougall , vice chairman of the Jordan , McGrath , Case & Taylor advertising agency in New York , calls the proliferation `` nameplate mania . '' 
 He says the number of automobile choices is causing stress among consumers today , and that people will simply ignore new models that lack a well-defined image . 
 `` The winners , '' he predicts , `` will be brands from car makers that have traditionally been associated with quality and value . '' 
 He says it 's important for a new make to be as distinctive as possible while still retaining links to the parent company 's quality image . 
 He applauds Toyota and Nissan Motor Co. for creating separate divisions for their new luxury models , rather than simply adding more nameplates to their standard car lines . 
 Some auto executives believe the benefits of more choice outweigh the drawbacks . 
 `` There 's more noise out there , and the consumer may have to work harder to cut through it , '' says Vincent P. Barabba , executive director of market research and planning at General Motors Corp . 
 `` But the reward is that there 's less need to make tradeoffs '' in choosing one 's wheels . 
 Jeanene Page , of North Salt Lake City , Utah , likes the broader selection . 
 She wants something big , and already has looked at the Chrysler New Yorker and Lincoln Town Car . 
 Now , the 55-year-old car shopper is zeroing in on a full-sized van , figuring that it 's just the thing to haul nine grandchildren and pull a boat at the same time . 
 `` That seems to be what all my friends are using to take the grandkids to the lake , '' she says . 
 Market segmentation in cars is n't new , but it 's far more extensive than when Alfred P. Sloan Jr. conceived the idea 50 years ago . 
 The legendary GM chairman declared that his company would make `` a car for every purse and purpose . '' 
 Now there are many cars for every purse and purpose . 
 Just four years ago , GM planners divided the combined car and truck market into seven segments . 
 Today , they identify 19 distinct segments for cars , and another 11 for trucks and vans . 
 The number of makes has mushroomed because the U.S. is the world 's biggest and richest market for automobiles ; virtually every auto maker wants to sell here . 
 For every brand like Renault or Fiat that has been squeezed out , others such as Isuzu , Daihatsu and Mitsubishi have come in . 
 Detroit tries to counter the foreign invasion with new brands of its own . 
 GM launched the Geo marque this year to sell cars made in partnership with foreign auto makers , and next year GM 's long-awaited Saturn cars will make their debut . 
 Ford Motor Co. created the Merkur nameplate in 1985 to sell its German-made touring sedans in the U.S . 
 But slow sales forced Ford to kill the brand just last week . 
 When consumers have so many choices , brand loyalty is much harder to maintain . 
 The Wall Street Journal 's `` American Way of Buying '' survey found that 53 % of today 's car buyers tend to switch brands . 
 For the survey , Peter D. Hart Research Associates and the Roper Organization each asked about 2,000 U.S. consumers about their buying habits . 
 Which cars do Americans favor most these days ? 
 It 's hard to generalize , but age seems to be the best predictor . 
 Adults under age 30 like sports cars , luxury cars , convertibles and imports far more than their elders do . 
 Three of every 10 buyers under 30 would prefer to buy a sports car , compared with just 16 % of adults 30 and over , according to the Journal survey . 
 Young consumers prefer luxury cars by a 37 % to 28 % margin -- even though older buyers , because of their incomes , are more likely to actually purchase a luxury car . 
 Perhaps most striking , 35 % of households headed by people aged 18 to 44 have at least one foreign car . 
 That 's true of only 14 % of households headed by someone 60 or older . 
 Generally , imports appeal most to Americans who live in the West and are well-educated , affluent and , especially , young . 
 `` For many baby boomers , buying a domestic car is a totally foreign experience , '' says Christopher Cedergren , auto-market analyst with J.D. Power & Co. of Agoura Hills , Calif . 
 Such preferences persist even though many Americans believe differences between imported and domestic cars are diminishing . 
 Only 58 % of Americans now believe that foreign cars get better gas mileage than domestic models , the Journal survey found , down from 68 % in 1987 . 
 Some 46 % give foreign cars higher quality ratings , down from 50 % two years ago . 
 On the other hand , only 42 % say foreign cars are less comfortable than U.S. models , down from 55 % in 1987 . 
 People in the automotive business disagree over how susceptible younger Americans are to brand switching . 
 `` Once buying habits are formed , they 're very hard to break , '' declares Thomas Mignanelli , executive vice president for Nissan 's U.S. sales operations . 
 But out on Cobb Parkway , Ted Negas sees it differently . 
 `` The competition is so intense that an owner 's loyalty to a dealership or a car is virtually nonexistent , '' says Mr. Negas , vice president of Ed Voyles Oldsmobile , one of the first dealerships to locate on the strip . 
 Thus the very fickleness of baby boomers may make it possible to win them back , just as it was possible to lose them . 
 The battle for customer loyalty is evident along the Cobb Parkway strip . 
 Ed Voyles Olds recently established a special section in the service department for owners whose cars are less than a year old , so they get quicker service . 
 Just down the street , Chris Volvo invites serious shoppers to test-drive a new Volvo to any other dealership along the strip , and compare the cars side-by-side . 
 Manufacturers , too , are stretching further to lure buyers . 
 GM 's Cadillac division , ignoring Detroit 's long-held maxim that safety does n't sell , is airing television commercials touting its cars ' safety features . 
 Cadillac may be on to something . 
 Some 60 % of the survey respondents said they would buy anti-lock brakes even if they carry a medium or high price tag . 
 More than 50 % felt the same way about air bags . 
 Both features appealed most to buyers under 45 . 
 In contrast , dashboard computers , power seats and turbo-charged engines had little appeal . 
 But even a little appeal has a lot of attraction these days . 
 GM 's Pontiac division is offering a turbo-charged V-6 engine on its Grand Prix model , even though it expects to sell only about 4,000 cars equipped with that option . 
 The reason : Items with narrow appeal can be important in a market as fragmented as today 's . 
 Americans spent more than $ 190 billion on new cars and trucks last year , and just 1 % of that market exceeded Polaroid Co. 's sales of $ 1.86 billion . 
 `` Even if it 's only 1 % , '' says GM 's Mr. Barabba , `` would you throw away sales the size of Polaroid ? '' 
 American Telephone & Telegraph Co. said it will lay off 75 to 85 technicians here , effective Nov. 1 . 
 The workers install , maintain and repair its private branch exchanges , which are large intracompany telephone networks . 
 It 's a California crime saga worthy of an Erle Stanley Gardner title : The Case of the Purloined Palm Trees . 
 Edward Carlson awoke one morning last month to find eight holes in his front yard where his prized miniature palms , called cycads , once stood . 
 Days later , the thieves returned and dug out more , this time adding insult to injury . 
 `` The second time , '' he says , `` they left the shovel . '' 
 No garden-variety crime , palm-tree rustling is sprouting up all over Southern California , bringing big bucks to crooks who know their botany . 
 Cycads , the most popular of which is the Sago Palm , are doll-sized versions of California 's famous long-necked palms , with stubby trunks and fern-like fronds . 
 Because the Sago is relatively rare and grows only a couple of inches a year , it 's a pricey lawn decoration : A two-foot tall Sago can retail for $ 1,000 , and taller ones often fetch $ 3,000 or more . 
 `` Evidently , somebody has realized it 's easy money to steal these things , '' says Loran Whitelock , a research associate specializing in cycads at the Los Angeles State and County Arboretum . 
 Just last week , would-be thieves damaged three Sagos at Mr. Whitelock 's home in the Eagle Rock section before something frightened them off , foiled . 
 `` It 's hard to think someone is raping your garden , '' he says . 
 Police suspect that the criminals , who dig up the plants in the dead of night , are selling them to nurseries or landscapers . 
 The Sago has become a popular accent in tony new housing tracts , apparently giving the rustlers a ready market for their filched fronds . 
 Thieves are going to find `` anybody who has enough bucks to plant these things in their front yard , '' says William Morrissey , an investigator with the police department in Garden Grove , Calif. , where five such thefts have been reported in the past several weeks . 
 The department is advising residents to plant Sagos , if they must , in the back yard and telling nurseries to be on the lookout for anyone trying to palm one off . 
 But for those Californians who want exotic gardens out front where neighbors can appreciate them , there 's always Harold Smith 's approach . 
 After three Sagos were stolen from his home in Garden Grove , `` I put a big iron stake in the ground and tied the tree to the stake with a chain , '' he says proudly . 
 And you ca n't cut this chain with bolt cutters . 
 Program trading on the New York Stock Exchange in September rose to its highest recorded level as a percentage of total monthly trading volume . 
 September program trading amounted to 13.8 % of average daily New York Stock Exchange volume of 151.8 million shares , the largest percentage since the exchange began making such figures public in July 1988 . 
 A daily average of 20.9 million shares traded in program strategies in September , the second-highest level ever . 
 The highest level was in June 1989 , when a daily average of 22.1 million shares traded in program strategies . 
 Average daily trading volume in June of 180.3 million shares was considerably higher than in September . 
 Program trading amounted to 12.3 % of average daily volume in June . 
 The Big Board says program trading describes a variety of strategies involving the purchase or sale of a basket of 15 or more stocks . 
 The most controversial of these is stock-index arbitrage , in which traders buy or sell baskets of stocks and offset the position with an opposite trade in stock-index futures to lock in profits . 
 It 's the most controversial form of program trading because it can create abrupt price swings in the stock market . 
 Salomon Brothers Inc. was the top program trader in September , but most of the firm 's activity involved portfolio trading strategies other than stock-index arbitrage . 
 Overall , Salomon reported program trading volume of 75.2 million shares . 
 The top stock-index arbitrage firm last month was Morgan Stanley & Co . 
 Of Morgan Stanley 's 66.8 million shares in program trades for the month , 53.1 million were in stock-index arbitrage trades . 
 Behind second-place Morgan Stanley were Kidder , Peabody & Co. , Goldman , Sachs & Co. and CS First Boston Inc. 's First Boston Corp. unit . 
 A group of shareholders filed suit against Imperial Corp. of America , Drexel Burnham Lambert Inc. , First Executive Corp. and others , charging them with artificially inflating Imperial 's stock price to protect certain major investors . 
 The complaint , filed in federal district court , accuses Imperial and other defendants of issuing false and misleading financial data . 
 It also charges that Imperial , the holding company for Imperial Savings & Loan , experienced major losses and writedowns because of improper assessment of the risks of junk-bond investments and wholesale consumer loan packages . 
 The suit seeks unspecified damages . 
 Imperial is in the midst of reducing its junk-bond holdings and getting out of the investment banking business in order to return to traditional thrift activities . 
 The derivative suit is similar to a class-action complaint filed earlier this year . 
 Imperial said in a statement it expects other complaints to be filed in the wake of the original suit and a recent article in Barron 's magazine that focused on the company 's problems . 
 Although an Imperial spokesman said the company had n't yet been served with the derivative suit , he reiterated the company 's statement that it would vigorously defend itself against the class-action suit . 
 Spokesmen at Drexel and First Executive said the companies had n't yet been served with the suit . 
 In a separate complaint also filed in federal court here , shareholder Max Grill of New York charged Imperial , its top executives and directors with breach of fiduciary duty and squandering the company 's assets . 
 Imperial said it had n't been served with this suit either . 
 Companies listed below reported quarterly profit substantially different from the average of analysts ' estimates . 
 The companies are followed by at least three analysts , and had a minimum five-cent change in actual earnings per share . 
 Estimated and actual results involving losses are omitted . 
 The percent difference compares actual profit with the 30-day estimate where at least three analysts have issues forecasts in the past 30 days . 
 Otherwise , actual profit is compared with the 300-day estimate . 
 Rhone-Poulenc S.A. , Paris , said it completed the purchase of the specialty chemicals operation of RTZ Corp. , a British mining and industrial group . 
 Rhone-Poulenc , a chemical and pharmaceutical company , said RTZ Chemicals has annual sales of about $ 900 million . 
 It did n't release terms of the transaction . 
 Consumer spending in Britain rose 0.1 % in the third quarter from the second quarter and was up 3.8 % from a year ago , the Central Statistical Office estimated Friday . 
 A group including Gene E. Phillips , former chairman of Southmark Corp. , and William S. Friedman , former vice chairman of Southmark , lowered its stake in the Dallas real estate concern to 7.7 % , according to a filing with the Securities and Exchange Commission . 
 The group said it sold 455,410 Southmark common shares from Sept. 5 to Oct. 5 for 18.75 cents to 25 cents a share . 
 The filing said the group continues to hold 3,481,887 remaining shares . 
 Eastman Kodak Co. , seeking to position itself in the potentially huge high-definition television market , unveiled a converter that can transform conventional motion-picture film into high-definition video . 
 The move also helps the Rochester , N.Y. , photographic giant ensure that its motion-picture film business -- for which it holds a virtual monopoly , supplying every Hollywood movie company -- is n't made obsolete by the upstart HDTV business . 
 While the prototype converter is costly , it 's being lauded by the infant HDTV industry as a way of increasing the number of high-quality shows that can be seen on the new medium . 
 `` The industry has been waiting with bated breath for the machines to come along , '' says David Niles , president of Eleven Twenty Five Productions Inc. , a New York pioneer in high-definition programming . 
 He notes that industry executives have until now worried that they would face a severe shortage of programs once consumers begin replacing their TV sets with HDTVs . 
 Japanese electronic giants , such as Sony Corp. and Hitachi Ltd. , have focused almost entirely on HDTV hardware , and virtually ignored software or programs shot in high-definition . 
 And only a handful of small U.S. companies are engaged in high-definition software development . 
 It 's estimated that just about 250 hours of HD programming is currently available for airing . 
 Kodak says its new CCD HDTV converter will help alleviate the problem by allowing programmers and broadcasters to convert movies and television programs shot in 35mm motion-picture film into high-definition video . 
 Consumers will be able to switch on their HDTV sets and get all the viewing benefits the high-tech medium offers . 
 Otherwise , they 'd be watching programs that are no different in quality from what they currently view on color TVs . 
 It would be like `` watching a black and white movie on a color TV set , '' says Malcolm G. Saull , chairman of the film and video department at the Rochester Institute of Technology . 
 The new converters are `` a critical link between film and the television domain , '' says Joerg D. Agin , vice president and general manager of Kodak 's Motion Picture and Audiovisual Products division . 
 Kodak wo n't disclose the cost or when its converter will be on the market , but it 's estimated the machine may be available within two years . 
 A similar machine already on the market , made by Rank Sintel Ltd. , a unit of Rank Organisation , costs about $ 500,000 . 
 And the potential market is tremendous , industry experts say . 
 If HDTV takes off in the U.S. , there will be demand for some 4,000 to 5,000 HDTV converters , known in the industry as telecines . 
 Demand will come first from programming production companies and then from television stations . 
 `` The converter is head and shoulders above anything else I 've seen , '' says Richard J. Stumpf , vice president-engineering and development at MCA Inc. 's Universal City Studios . 
 And Mr. Niles , the program producer , contends that Kodak 's move is `` a sound marketing decision . 
 They ca n't afford to stay out of HDTV . '' 
 Indeed , the stakes are high . 
 The U.S. electronics industry estimates that the HDTV market will total about $ 150 billion over the next two decades , with an additional $ 400 billion expected to go for related products . 
 HDTVs break down images into more than 1,100 lines , compared with 525 for today 's televisions , providing considerably sharper detail . 
 And the sets are wider , resembling the dimensions of a movie screen . 
 But the financial rewards are n't expected soon , nor are they guaranteed . 
 Experts estimate the first sets of HDTVs wo n't be available for another five to 10 years , and will probably retail for more than $ 3,000 each in today 's dollars . 
 Some critics say they wo n't be quickly embraced by consumers because of the high price . 
 Nevertheless , Kodak could n't risk letting HDTV turn its motion-picture film business into a dinosaur . 
 `` Kodak understands HDTV is where everybody is going , '' says RIT 's Mr. Spaull . 
 Yet another political scandal is racking Japan . 
 But this time it 's hurting opposition as well as ruling-party members . 
 And as it unfolds , it 's revealing some of the more tangled and seamier aspects of Japanese society . 
 Already , ruling Liberal Democratic Party demands that opposition members testify under oath in parliament have stalled one budget committee session and forced the committee to plan a special two-day investigation at the end of the month . 
 But the scandal itself is so convoluted that ruling-party members are divided between those who want to pursue the matter in hope of undermining the opposition and those who favor leaving well enough alone . 
 `` The opposition can be the most hurt because everyone already figures the LDP is that kind of beast , '' says Shigezo Hayasaka , former aide to LDP kingmaker Kakuei Tanaka and now an independent analyst . 
 But , he adds , `` We ca n't tell where it will go at all because we 're still in the middle of it . '' 
 This time , the scandal centers on donations made by the not-quite-mainstream pachinko parlor industry . 
 Pachinko , a kind of pinball , is Japan 's favorite form of legal gambling . 
 The donations so far appear to be small , especially compared with the huge sums that changed hands in the Recruit Co . influence-peddling scandal that plagued the ruling party last year . 
 But the implications could be great . 
 Pachinko is slightly on the shady side , often linked to the lower ranks of Japan 's underworld and regularly at the top of annual lists of tax evaders . 
 Recently the industry has faced the threat of new restrictions , and political donations may have been made with the intent to bribe . 
 Also , about 60 % of pachinko parlor owners are Korean , many of whom maintain close ties with North or South Korean residents ' organizations , and donations by such foreign groups are illegal in Japan . 
 To many Japanese , pachinko is benign or enticingly unsavory . 
 Garish neon pachinko marquees blaze from the main streets and narrow alleys of cities and towns across the country . 
 Devotees pass hours , watching the lights blink and listening to the metal balls ping , as much to gamble as to get a little time to be anonymous , alone with their thoughts . 
 At 500 yen -LRB- $ 3.60 -RRB- for a handful of balls , pachinko is a common pastime , and has been since it took root as cheap entertainment in the years after World War II . 
 But the total of all those pinging balls has created an industry with a reported annual income of 13 trillion yen -LRB- almost $ 92 billion -RRB- , or nearly the size of Japan 's vaunted automobile industry . 
 And because the pachinko industry is regularly at the top of annual lists for tax evasion , some observers estimate the real income could be as much as 20 trillion yen . 
 If that money were being taxed , it could bring the government a badly needed several trillion yen . 
 In 1984 , an attempt was made to crack down on the industry with tougher restrictions . 
 Then , in 1988 , a proposal to keep better track of income by selling prepaid cards for pachinko was fielded in parliament . 
 The proposal split the industry in two , along the lines of national origin : North Koreans oppose the plan while South Koreans , Japanese and Taiwanese accept it or are neutral . 
 In August , a conservative weekly magazine reported that a pachinko industry organization donated money to Japan Socialist Party members . 
 The magazine alleged that in making the donations , the pachinko industry may have been offering bribes to win support in the battle against prepaid cards , or it may have been laundering money back and forth between the JSP and the North Korean residents ' organization , the Chosen Soren . 
 The Chosen Soren and the JSP immediately denied the report . 
 And at first , neither the opposition nor the LDP wanted to pursue the issue . 
 But the press kept it alive ; as with the Recruit scandal , lists began circulating with names of people who had received money . 
 Within a matter of weeks , less-conservative magazines reported that members of the ruling LDP had received much larger donations from pachinko organizations . 
 So far , though , there have been no allegations that the contributions the LDP members received amounted to bribes . 
 Then the two camps upped the ante : Reports that Chosen Soren had donated directly to JSP members were rapidly countered by statements that the South Korean residents ' organization had long been donating directly to LDP members . 
 The JSP admitted Oct. 13 that its members received about eight million yen from the pachinko organization , and charged LDP members with receiving 125 million yen -LRB- $ 880,000 -RRB- and other opposition parties with taking about 2.5 million yen . 
 On Friday , the chief cabinet secretary announced that eight cabinet ministers had received five million yen from the industry , including 450,000 yen -LRB- $ 3,175 -RRB- by Prime Minister Toshiki Kaifu . 
 No one has alleged that the donations were by themselves illegal . 
 Direct donations from either of the residents ' organizations would be illegal because the groups are defined as foreign , but both groups deny making direct donations . 
 They say possible some of their members may be donating privately . 
 The issue is further complicated because although the organizations represent Korean residents , those residents were largely born and raised in Japan and many speak only Japanese . 
 That they retain Korean citizenship and ties is a reflection of history -- their parents were shipped in as laborers during the decades when Japan occupied Korea before World War II -- and the discrimination that still faces Koreans in Japanese society . 
 Many Japanese think it only natural that the organizations or their members would donate to politicians , the way many Japanese do , to win favor or support . 
 Both residents ' organizations admit to receiving some funding from abroad . 
 But LDP members and supporters of the prepaid card idea tend to speak in innuendo about the JSP 's alleged donations , implying that North Korean money would be more suspect than South Korean because North Korea is communist and South Korea is an ally . 
 When Robert McDuffie was 14 , he got a chance to play in the starting lineup for his high school basketball team in Macon , Ga . 
 Unfortunately , his mother had tickets for a recital by Itzhak Perlman the same night , and she was adamant about his attending . 
 `` I threw such a fit , '' says Mr. McDuffie , who had begun violin studies at the age of six . 
 But once Perlman started playing , I did n't give a damn about basketball . 
 Afterwards , I went home and practiced for three hours . '' 
 Today , it 's obvious that the brawny , six-foot , one-inch musician made the right choice . 
 At 31 , Mr. McDuffie has a rich , full-bodied tone , an admirable rhythmic precision and an increasingly busy schedule . 
 He 's currently in the midst of a 17-city U.S. tour with Yehudi Menuhin and the Warsaw Sinfonia , with stops including Charleston , S.C . -LRB- Oct. 25 -RRB- , Sarasota , Fla . -LRB- Oct. 28 -RRB- , Tampa , Fla . -LRB- Oct. 29 -RRB- and Miami -LRB- Oct. 31 -RRB- . 
 Later this season he gives a recital at Washington 's Kennedy Center , and appears as soloist with several major orchestras . 
 Yet Mr. McDuffie 's career has developed at a slower pace than those of some of his better known contemporaries . 
 During the late 1970s , he was part of a musical `` brat pack '' -- a group of budding virtuosos who studied at the Juilliard School with the noted pedagogue Dorothy DeLay . 
 His violin classmates included Shlomo Mintz , a protege of Isaac Stern who performed with major orchestras while still a student ; Cho-Liang Lin , who joined the roster of ICM Artists Inc. at the age of 18 ; and Nadja Salerno-Sonnenberg , who launched her career by winning the 1981 Naumberg Competition . 
 `` I thought I was over the hill at 22 , '' recalls Mr. McDuffie , an outgoing man with pale blue eyes and a light Southern drawl . 
 But I was n't ready for a career at that time . '' 
 Young McDuffie 's first violin teacher was Henrik Schwarzenberger , a Hungarian refugee who taught in the Macon public school system . 
 `` He taught me how to play like a gypsy , '' jokes the musician . 
 I did n't learn to count until I got to Juilliard . '' 
 After studies at that conservatory 's Pre-College Division with an assistant to the legendary instructor Ivan Galamian , he switched at the college level to Miss DeLay , Mr. Galamian 's longtime assistant and , ultimately , his rival . 
 `` I think I had to prove myself to her , '' says Mr. McDuffie . 
 But she was always encouraging . 
 She only put her foot down twice , '' he continues . 
 In my freshman year , my roommate was known as a party animal . 
 She thought I was n't getting my practicing done . '' 
 As the violinist tells it , his grandmotherly looking teacher `` put her hands on her hips , stomped her foot and said , ` You 've just got to get the -LCB- expletive deleted -RCB- out of there . ' '' 
 The second incident took place after Mr. McDuffie gave an ambitious student recital and was feeling rather pleased with himself . 
 Miss DeLay requested that he come to her studio with a tape of the recital . 
 `` We listened to the Chausson ` Poeme , ' '' he recalls , `` and she said , ` You hear the first note , that B-flat ? 
 That 's the only note that 's truly in tune . . . ' . '' 
 `` That 's the most important experience I 've had with any teacher , '' he says , `` because she taught me how to listen . 
 Now , when I play with orchestras , the musicians often compliment me on my intonation . '' 
 It was also at Juilliard that Mr. McDuffie discovered his predilection for conservative , 20th-century American composers such as David Diamond and Samuel Barber . 
 After winning a school competition with a performance of the latter 's `` Violin Concerto , '' Mr. McDuffie was invited to play the work for the composer , who was dying of cancer . 
 `` Barber was seated by the fireplace looking very pale , '' recalls the violinist , who performed the work with a piano accompanist at the composer 's apartment . 
 He did n't say much , but what he said was important because it 's not in the score . 
 There 's a beautiful , Coplandesque motif -- he 'd kill me if he heard me say that -- throughout the first movement . 
 The only time the violin has it is right at the end . 
 It 's written ` marcato ' in the score , and I played it that way , kind of gigue-like . 
 And he yelled out ` dolce dolce ' -LCB- ` sweet sweet ' -RCB- . '' 
 `` So we did it over , '' he adds . 
 I played very transparently , with the tip of the bow . 
 If a conductor is sensitive enough to bring down the orchestra -LCB- volume -RCB- at that point , it makes the piece magical . 
 I do n't know why Barber never told anybody else . 
 On Isaac Stern 's recording it 's very biting . '' 
 Since leaving Juilliard , Mr. McDuffie has made some smart moves and some controversial ones . 
 His guest appearance on the NBC soap opera `` Another World , '' scandalized musical elitists . 
 By contrast , he 's won kudos for his espousal of William Schuman 's `` Violin Concerto , '' which he recently recorded for along with Leonard Bernstein 's engaging `` Serenade for Violin Solo , Strings and Percussion . '' 
 Mr. McDuffie 's sweet tone , heartfelt lyricism and rhythmic punch make him an ideal interpreter of both works . 
 Aided by the fluid playing of the St. Louis Symphony under Leonard Slatkin 's direction , this `` Serenade '' really swings . 
 Mr. Schuman 's `` Violin Concerto , '' which sounds more like a mildly atonal rhapsody for solo violin with orchestral accompaniment , meanders until the propulsive `` Agitato , fervente . '' 
 But there are ample rewards in its plaintive slow sections and virtuoso fireworks for soloist , brass and timpani . 
 At Avery Fisher Hall here , Mr. McDuffie was heard recently with Mr. Menuhin and the Warsaw Sinfonia in more conventional fare -- Bruch 's overwrought `` Violin Concerto in G Minor . '' 
 His performance was so effusive and driven that the phrases rarely breathed . 
 The 35-member Sinfonia played adroitly with a big , lush sound that belied its size . 
 Whatever he plays , Mr. McDuffie finds satisfaction in the music itself -- `` something greater out there than me , '' as he puts it during an interview at the Manhattan apartment he shares with wife , Camille , a literary publicist . 
 `` A normal person did not write the Beethoven ` Violin Concerto , ' '' he declares . 
 Even when I hear it played badly , I 'm still humbled by the piece . 
 If I could ever feel I 've contributed to it in some way , then all the hard work has been worth it . '' 
 Ms. Jepson is a free-lance music writer in New York . 
 Are consumers too deep in hock ? 
 A lot of observers think so , and , if they 're right , the whole economy as well as the spendthrifts among us could be hurt . 
 A sudden , forced cutback by consumers , who normally account for about two-thirds of economic activity , would damp the economy at a time when plant-and-equipment spending is slowing and deficit-racked governments ca n't readily take up the slack . 
 And another wave of bad loans would further batter many already-shaky lending institutions . 
 The worriers cite some worrisome trends . 
 During the almost seven-year-old economic expansion , inflation-adjusted gross national product , disposable personal income and personal consumption expenditures have risen 30 % , but inflation-adjusted consumer installment credit has surged 66 % . 
 And the ratio of installment debt to disposable personal income -- personal income after taxes -- has hit a high of about 18 % . 
 However , these figures do n't seem to worry Thomas A. Durkin , an economist at the Federal Reserve Board . 
 In a paper presented at the recent annual meeting of the National Association of Business Economists in San Francisco , Mr. Durkin comments that `` installment credit always grows rapidly in cyclical advances , and growth in this cycle is very typical of earlier experiences . '' 
 He adds : `` We are now witnessing a slowdown which , if history is a guide , could persist for a while . '' 
 But what about the debt burden ? 
 Mr. Durkin doubts that `` there is some magic level '' at which the ratio of installment debt to disposable income `` indicates economic problems . '' 
 And , `` more importantly , '' he says , `` the debt burden measured other ways is not really in uncharted waters . '' 
 The chart below shows why -LRB- see accompanying illustration -- WSJ Oct. 23 , 1989 -RRB- . 
 The ratio of consumer installment credit to disposable income , though up a bit , has n't climbed steeply , and such debt as a percent of household assets is little changed . 
 Moreover , the burden of consumer credit payments relative to disposable income may be `` lower in this cycle than earlier , '' Mr. Durkin says . 
 He notes that some `` revolving credit-card credit is actually convenience credit '' being used simply as a handy way of paying bills rather than a handy way of borrowing . 
 In addition , he says , `` longer maturities on automobile and other forms of installment credit boost the stock of debt faster than the flow of repayments and the accompanying payment burden . '' 
 And if you `` consider the changing distribution of credit , '' Mr. Durkin says , `` much of the increase in debt in recent years is due to increasing credit use by higher-income families , '' that is , `` those probably best able to handle it . '' 
 Citing figures on home-equity loans , he notes that `` 11 % of homeowners had home-equity credit accounts , but the proportion rises to 16 % of homeowners in the $ 45,000-$60,000 income range and 23 % of homeowners with income above $ 60,000 . '' 
 And much home-equity credit is used conservatively . 
 `` The most frequent use is home improvement , which presumably improves the value of the property , '' Mr. Durkin says . 
 So , it is n't surprising that consumer-credit delinquencies at banks remain , as the chart shows , reassuringly below some earlier highs -LRB- see accompanying illustration -- WSJ Oct. 23 , 1989 -RRB- . 
 A severe recession could , of course , raise delinquency rates , but so far the current levels of consumer debt do n't seem to loom as a major threat . 
 In fact , the current weakness in auto buying and department-store sales and the gradual upturn in the household saving rate suggest that consumers , conservative as ever , are already clutching their purses a bit more tightly . 
 In July , consumer installment credit outstanding fell for the first time since January 1987 . 
 `` Consumers appear unwilling to add to their leverage to support their spending , '' Bruce Steinberg , a Merrill Lynch economist , says . 
 As a result , household debt appears to be stabilizing at around 63 % of GNP . '' 
 Consumers , credit cards in hand , are n't running amok through the shopping malls -- or putting the economy at any great risk . 
 Maidenform Inc. loves to be intimate with its customers , but not with the rest of the public . 
 The 67-year-old maker of brassieres , panties , and lingerie enjoys one of the best-known brand images , but its financial profile is closely guarded by members of the founding family . 
 `` There are very few companies that can boast of such a close-knit group , '' says Robert A. Brawer , 52 years old , recently named president , succeeding Beatrice Coleman , his mother-in-law , who remains chairman . 
 `` We are a vanishing breed , '' he muses . 
 Mrs. Coleman , 73 , who declined to be interviewed , is the Maidenform strategist . 
 Sales have tripled during her 21-year tenure to about $ 200 million in 1988 . 
 Maidenform says it is very profitable but declines to provide specifics . 
 The company sells image . 
 Its current ad campaign , on which Maidenform has spent more than $ 15 million since fall 1987 , does n't even show its underwear products , but rather men like Christopher Reeve , star of the `` Superman '' movies , talking about their lingerie turn-ons . 
 The Maidenform name `` is part of American pop culture , '' says Joan Sinopoli , account supervisor of the campaign by Levine , Huntley , Schmidt & Beaver , a New York ad firm . 
 Maidenform generated such memorable campaigns as `` I dreamed I... in my Maidenform bra , '' and `` The Maidenform woman . You never know where she 'll turn up . '' 
 `` Capitalizing on the brand is key , '' says Mr. Brawer , whose immediate plans include further international expansion and getting better control of distribution outside the U.S . 
 `` The intimate apparel industry is perceived to be a growth industry and clearly -LCB- Maidenform -RCB- is a force to be reckoned with , '' says David S. Leibowitz , a special situations analyst at American Securities Corp. in New York . 
 Although working women are `` forced to wear the uniform of the day , to retain their femininity they are buying better quality , more upscale intimate apparel , '' he said . 
 Although Mr. Brawer 's appointment as president was long expected , the move on Sept. 25 precipitated the resignation of Alan Lesk as senior vice president of sales and merchandising . 
 Three days later , Mr. Lesk was named president and chief executive officer of Olga Co. , a competing intimate apparel division of Warnaco Inc . 
 Warnaco also owns Warners , another major intimate apparel maker . 
 Mr. Lesk could n't be reached to comment . 
 But Maidenform officials say that after spending 24 years at Maidenform , Mr. Lesk , 48 , made it clear he wanted the top job . 
 `` If you want the presidency of the company , this is n't the firm to work for , '' says James Mogan , 45 , who was named senior vice president of sales , assuming some of the responsibilities of Mr. Lesk . 
 The company downplayed the loss of Mr. Lesk and split his merchandising responsibilities among a committee of four people . 
 `` My style is less informal , '' Mr. Brawer says . 
 Top officers insist Maidenform 's greatest strength is its family ownership . 
 `` You ca n't go anywhere in this company and find an organizational chart , '' one delights . 
 `` It is fun competing as a private company , '' Mr. Brawer says . 
 You can think long range . '' 
 Other major players in intimate apparel apparently feel the same way . 
 Warnaco was taken private by Spectrum Group in 1986 for about $ 487 million . 
 And last year , Playtex Holdings Inc. went private for about $ 680 million . 
 It was then split into Playtex Apparel Inc. , the intimate apparel division , and Playtex Family Products Corp. , which makes tampons , hair-care items and other products . 
 Publicly traded VF Corp. , which owns Vanity Fair , and Sara Lee Corp. , which owns Bali Co. , are also strong forces in intimate apparel . 
 Buy-out offers for Maidenform are n't infrequent , says Executive Vice President David C. Masket , but they are n't taken very seriously . 
 When he gets calls , `` I do n't even have to consult '' with Mrs. Coleman , Mr. Masket says . 
 The company could command a good price in the market . 
 `` Over the past three and a half years , apparel companies , many of whom have strong brand names , have been bought at about 60 % of sales , '' says Deborah Bronston , Prudential-Bache Securities Inc. apparel analyst . 
 Mr. Brawer , along with Mrs. Coleman and her daughter , Elizabeth , an attorney who is vice chairman , are the family members involved in the operations of Maidenform , which employs about 5,000 . 
 Mr. Brawer 's wife , Catherine , and Robert Stroup , Elizabeth 's husband , round out the five-member board . 
 Each has an equal vote at the monthly meetings . 
 `` We are all very amiable , '' Mr. Brawer says . 
 Executives say Mrs. Coleman is very involved in the day-to-day operations , especially product development . 
 In the late 1960s she designed a lightweight stretch bra that boosted sales . 
 Her father , William Rosenthal , designed the then-dress making company 's first bra in the 1920s , which he said gave women a `` maiden form '' compared with the `` boyish form '' they got from the `` flat bandages '' used for support at the time . 
 While Mr. Rosenthal introduced new undergarment designs , his wife , Ida , concentrated on sales and other financial matters . 
 The name Maidenform was coined by a third business partner , Enid Bissett . 
 The company has 14 plants and distribution facilities in the U.S. , Puerto Rico , other parts of the Caribbean and Ireland . 
 Maidenform products are mainly sold at department stores , but the company has quietly opened a retail store of its own in Omaha , Neb. , and has 24 factory outlets , with plans to add more . 
 Before joining Maidenform in 1972 , Mr. Brawer , who holds a doctoral degree in English from the University of Chicago , taught at the University of Wisconsin . 
 As a senior vice president , he has headed the company 's designer lingerie division , Oscar de la Renta , since its inception in 1988 . 
 To maintain exclusivity of that designer line , it is n't labeled with the Maidenform name . 
 While the company has always been family-run , Mr. Brawer is n't the first person to marry into the family and subsequently head Maidenform . 
 Mrs. Coleman 's husband , Joseph , a physician , succeeded Mrs. Rosenthal as president and served in that post until his death in 1968 . 
 China could exhaust its foreign-exchange reserves as early as next year , a Western government report says , unless imports are cut drastically to help narrow the balance-of-payments deficit . 
 According to the report , completed last month , if China 's trade gap continues to widen at the pace seen in the first seven months of this year , the reserves would be wiped out either in 1990 or 1991 . 
 A country is considered financially healthy if its reserves cover three months of its imports . 
 The $ 14 billion of reserves China had in June would cover just that much . 
 The report by the Western government , which declines to be identified , concludes that `` a near-term foreign-exchange payment problem can be avoided only if import growth drops to below 5 % per annum . '' 
 According to Chinese customs figures , import growth has slowed in recent months , dropping to 16 % in July and 7.1 % in August from the year-earlier periods , compared with an average growth rate of 26 % in the first half . 
 But before import growth slowed , China 's buying spree in the first half already had taken its toll on foreign-exchange reserves . 
 The $ 14 billion level in June marked a drop from $ 19 billion at the end of April . 
 China 's last big import binge sent reserves tumbling to $ 10.6 billion in June 1985 from $ 16.6 billion the previous September . 
 China might stave off a crisis if it acts as forcefully as it did to arrest the 1985 decline , when Beijing slammed the brakes on foreign-exchange spending and devalued the currency . 
 But this time , China faces a more difficult battle because of economic forces that have come into play since the Tiananmen Square killings June 4 . 
 For example , China 's hard-currency income is expected to suffer from the big drop in tourist arrivals since June 4 . 
 Revenue from tourism this year is projected to total $ 1.3 billion , down from $ 2.2 billion last year . 
 Because of this and the huge trade gap , the deficit in China 's current account , which measures trade in goods and services plus certain unilateral transfers of funds , is expected to widen sharply from the $ 3.8 billion deficit last year . 
 The Western government report suggests a number of scenarios for China 's current-account balance , two of which are considered most likely . 
 In one , imports and exports continue to grow at the respective average rates of 25 % and 5 % recorded during the first seven months , and the current-account deficit widens to $ 13.1 billion . 
 In 1985 , China had a record deficit of $ 11.4 billion . 
 The other scenario assumes that Beijing takes effective actions to curb imports in the coming months . 
 In this case , China would still finish the year with a current-account deficit of $ 8.7 billion , based on projections that imports for all of this year grow 20 % and exports 10 % . 
 If China were still on good terms with foreign lenders , it might be able to stem the drain on its foreign-exchange reserves by using some loan funds to offset the current-account deficit . 
 But since June , foreign bankers led by international financial institutions have virtually suspended their new loans to China . 
 Even if borrowing resumes , commercial bankers are n't expected to lend as much as before . 
 In addition , economists are forecasting a slowdown in foreign direct investments as businessmen become increasingly wary of China 's deteriorating political and economic environment . 
 On top of all this , foreign-debt repayments are expected to peak in 1991 to 1992 . 
 With less capital coming in , China 's balance of payments would suffer . 
 The Western government report 's first scenario assumes a 30 % reduction in foreign borrowing and a 5 % contraction in foreign direct investment . 
 In the second , foreign borrowing is projected to grow 10 % and investment to drop 10 % . 
 But in either case , the report says , China 's balance of payments would rapidly dry up foreign reserves , which are used to finance the imbalance . 
 In the first scenario , the reserves would be exhausted next year , and in the second they would be wiped out in 1991 . 
 Roche Holding AG , parent of the Swiss chemical and pharmaceutical group , said its group sales rose 22 % in the first nine months of the year to 7.32 billion francs -LRB- $ 4.51 billion -RRB- . 
 The company reported good gains in all of its divisions . 
 Roche also said it expects a `` considerable rise '' in 1989 group profit from the 641.5 million-franc -LRB- $ 396 million -RRB- net in 1988 . 
 New Canaan Investments Inc. said it closed the acquisition of Carr-Lowrey Glass Co. from Newell Co. , a Freeport , Ill. , maker of do-it-yourself home products . 
 Terms were n't disclosed . 
 Carr-Lowrey , a maker of glass bottles for the cosmetics and toiletries industries , had sales last year of about $ 40 million . 
 New Canaan Investments is a closely held investment partnership with interests primarily in the packaging industry . 
 Ralph Brown was 31,000 feet over Minnesota when both jets on his Falcon 20 flamed out . 
 At 18,000 feet , he says , he and his co-pilot `` were looking for an interstate or a cornfield '' to land . 
 At 13,000 feet , the engines restarted . 
 But knowing that mechanics would probably ground him for repairs , Mr. Brown skipped his stop in nearby Chicago and set course to get his load -- a few hundred parcels -- to the Memphis package-sorting hub on time . 
 Had he been a little less gung-ho , `` I 'd have gotten the thing on the ground and headed for the nearest bar , '' Mr. Brown says . 
 But he flies for Federal Express Corp. , perhaps the closest thing in corporate America to the Green Berets . 
 Federal 's employees work long hours and seem to thrive on the stress of racing the clock . 
 Like Mr. Brown , they sometimes go to surprising lengths to meet that overarching corporate goal : delivering the goods on time . 
 They are a tribute to Federal 's management which , since the company 's founding 16 years ago , has had its way with its work force -- an unusual feat in the contentious transportation industry . 
 That may soon change . 
 This month , Federal 's 2,048 pilots , including some 961 acquired along with Tiger International Inc. in February , will decide whether to elect the powerful Air Line Pilots Association as their bargaining agent . 
 The election , which would bring the first major union to Federal 's U.S. operations , has pitted new hires against devoted veterans such as Mr. Brown . 
 It has also rattled Federal 's strongly anti-union management , which is already contending with melding far-flung operations and with falling profits . 
 `` A union , sooner or later , has to have an adversary , and it has to have a victory , '' Frederick W. Smith , Federal 's chairman and chief executive , says with disdain . 
 In our formula , we do n't have any losers except the competition . '' 
 What managers really fear is that the pro-union movement could spread beyond the pilots . 
 Under federal transportation law , a government mediator is attempting to reconcile the melding of Tiger 's job classifications into Federal 's . 
 Depending on the outcome , the merged company may face union elections this fall among airplane mechanics , ramp workers , stock clerks and flight dispatchers . 
 These groups constitute up to 10 % of its work force . 
 `` Unions would have a profound effect on the whole culture of the company , '' says Bernard La Londe , a professor at Ohio State University at Columbus and a Federal consultant . 
 That culture , carefully crafted by Mr. Smith , leaves little , if any , room for unions . 
 Since founding the company , the charismatic Vietnam vet , who is still only 46 years old , has fostered an ethos of combat . 
 Flights are `` missions . '' 
 Mr. Smith 's managers have , at times , been called `` Ho Chi Minh 's Guerrillas . '' 
 The Bravo Zulu award , the Navy accolade for a `` job well done , '' is bestowed on Federal 's workers who surpass the call of duty . 
 Competitors are known as the `` enemy . '' 
 To reinforce employees ' dedication , Mr. Smith pays well . 
 He also lets workers vent steam through an elaborate grievance procedure and , as a perk , fly free in empty cockpit seats . 
 He gives pep talks in periodic `` family briefings '' beamed internationally on `` FXTV , '' the company 's own television network . 
 And , with many of his 70,000 workers , Mr. Smith 's damn-the-torpedoes attitude has caught on . 
 James Cleveland , a courier who earned a Bravo Zulu for figuring out how to get a major customer 's 1,100-parcel-a-week load to its doorstep by 8 a.m. , considers himself far more than a courier . 
 We do n't just hand the customer the package . 
 That 's just the beginning , '' he says . 
 In essence , we run the show . '' 
 David Sanders , a longtime pilot , bristles at the mere suggestion that a union might tamper with his flight schedule . 
 `` This is America , '' he says . 
 Nobody has the right to tell me how much I can work . '' 
 Such attitudes have given Federal flexibility , not only to rapidly implement new technology but to keep its work force extraordinarily lean . 
 The company deliberately understaffs , stretching employees ' schedules to the limit . 
 But though couriers work as many as 60 hours a week during the autumn rush , they leave early during slack times while still being assured of a minimum paycheck . 
 Pilots , as well , routinely fly overtime to ensure that none are furloughed during seasonal lows . 
 The operational freedom has also given Federal a leg up on archrival United Parcel Service Inc. , the nation 's largest employer of United Brotherhood of Teamsters members . 
 UPS wo n't discuss its labor practices , but , according to Mr. Cleveland , a former UPS employee , and others , union work rules prohibit UPS drivers from doing more than carrying packages between customers and their vans . 
 Because UPS drivers are n't permitted to load their own vehicles at the depot , say these couriers , packages often get buried in the load and are delivered late . 
 Labor problems are the last thing Mr. Smith needs right now . 
 Although the Tiger acquisition has brought Federal a long way toward becoming the global player it wants to be , it also has brought problems . 
 It more than doubled Federal 's long-term debt to $ 1.9 billion , thrust the company into unknown territory -- heavy cargo -- and suddenly expanded its landing rights to 21 countries from four . 
 Federal , on its own , had n't been doing very well overseas . 
 It had hemorrhaged in its attempt to get into Asia , where treaty restrictions forced it to fly some planes half-empty on certain routes . 
 On routes to South America , the company had no backup jets to ensure delivery when planes were grounded . 
 In Europe , business suffered as Federal bought several local companies , only to have the managers quit . 
 These and other problems squeezed Federal 's profit margins last year to 8 % , down from more than 13 % annually in the first half of the decade . 
 Earnings have plummeted , too , in each of the past three quarters . 
 In the fiscal first period ended Aug. 31 , profit fell 54 % to $ 30.4 million , or 58 cents a share , mostly because of the Tiger merger , Federal says . 
 Federal 's stock price , however , has held up well , driven in part by the general run-up of airline stocks , analysts say . 
 Since trading as low as $ 42.25 a share in May , Federal 's shares have rallied as high as $ 57.87 in New York Stock Exchange composite trading . 
 They closed Friday at $ 53.25 , down 50 cents on the day . 
 There 's a certain irony in the fact that Federal Express faces its first union problems as a result of its Tiger purchase . 
 Tiger itself was founded by a band of gungho airmen who had airlifted supplies `` over the Hump '' from India to China during World War II . 
 In the early 1970s , Mr. Smith modeled his fledgling company on Tiger 's innovation of hub-and-spoke and containerized-cargo operations . 
 But from early on , Tiger 's workers unionized , while Federal 's never have . 
 Federal Express officials acknowledge mistakes in their drive overseas but say it will pay off eventually . 
 Analysts expect Federal 's earnings to improve again in its fiscal third quarter ending Feb. 28 , when the company should begin benefiting from Tiger 's extra flights , back-up planes and landing rights . 
 Until then , they expect the cost of integrating the two carriers to continue crimping profits . 
 For now , the union issue is the most nettlesome of Federal 's Tiger problems , management believes . 
 Although encouraging dialogue between managers and workers , Mr. Smith does n't countenance what he considers insubordination . 
 When a large group of pilots once signed petitions opposing work-rule and compensation changes , he called a meeting in a company hangar and dressed them down for challenging his authority . 
 He then made most of the changes , pilots say . 
 That sort of approach , however , has n't worked since the addition of Tiger . 
 Its 6,500 workers , who had battled Tiger 's management for years over givebacks , were union members until the day of the merger , when most of their unions were automatically decertified . 
 Soon after the merger , moreover , Federal 's management asked Tiger 's pilots to sign an agreement stating that they could be fired any time , without cause or notice . 
 When the pilots refused , the company retracted it . 
 Mr. Smith angered Federal 's pilots , too . 
 In his haste to seal the deal with Tiger Chairman Saul Steinberg last August , Mr. Smith ignored a promise that he had made to his own pilots three years ago : that any fliers acquired in future mergers would be `` end-tailed '' -- put at the bottom of the pilot seniority list that determines work schedules , pay and career options . 
 The Tiger merger agreement stipulated that the lists be combined on the basis of tenure . 
 Mr. Smith is trying hard to allay the anger . 
 And even some pro-union pilots say his charisma and popularity among the many former military fliers could be tough to beat . 
 `` A lot of people are identifying a vote for representation as a vote against Fred Smith , '' says J.X. Gollich , a Tiger-turned-Federal pilot and union activist . 
 Mr. Smith and other top Federal executives have met with Tiger workers in Los Angeles , Ohio , New York , Alaska , Asia and Europe . 
 Recently , they have appeared every few weeks in talk-show type videos , countering pro-union arguments . 
 In one video , Mr. Smith defended his agreement to merge the pilot-seniority lists . 
 He said Mr. Steinberg had insisted that the merger talks move quickly . 
 Regulators , as well , might have quashed the deal if Tiger 's pilots had n't been protected , he said . 
 Furthermore , Mr. Smith added , `` our contract with our pilots says that we will manage our fleet operations with their advice . 
 It does n't give any particular group the ability to veto change . '' 
 Already , the fight has been costly . 
 The seniority-list controversy , along with the job-classification dispute , has been turned over to the mediator . 
 Meanwhile , the company is operating with two separate pilot groups and seniority lists , and that is costing Federal `` a big number , '' says James Barksdale , executive vice president and chief operating officer . 
 The issue has also cost Federal management a lot of good will among its old pilots . 
 `` They were willing to mistreat us because we had n't shown any moxie , any resistance , '' says William Queenan , a DC-10 pilot and 14-year Federal veteran . 
 Adds John Poag , a 727 captain and past chairman of the company-sponsored Flight Advisory Board : `` They 've made all these magnanimous gestures to the Flying Tiger pilots , and for us , nothing . '' 
 Such animosity could prove pivotal in the union vote . 
 A large majority of the 961 former Tiger fliers support the union , according to a union study . 
 But though most of the 1,087 Federal pilots are believed opposed , it is unclear just how much their loyalty to Mr. Smith has been eroded . 
 The fight has turned ugly and , among pilots at least , has shattered the esprit de corps that Mr. Smith worked so hard to build . 
 Anti-union pilots have held ballot-burning parties . 
 Some younger pilots say they have had to endure anti-union harangues by senior pilots while flying across the country . 
 And for now , at least , the competition is n't the only enemy . 
 Barney Barnhardt , a 727 captain and leader of the pro-union forces , said he has received two anonymous death threats and been challenged to a fight with tire irons by a colleague . 
 `` The pilots are either for us or extremely against us , '' he says with a sigh . 
 Harsco Corp. said it obtained a $ 33.1 million export order for armored recovery vehicles and related support equipment . 
 Harsco declined to say what country placed the order . 
 The company said it received an order for 23 of the vehicles , which retrieve tanks and other heavy-tracked vehicles when they break down or are damaged , and an option for 16 more . 
 Delivery is to begin in early 1991 . 
 Harsco produces products for defense , industrial , commercial and construction markets . 
 The Senate convicted U.S. District Judge Alcee Hastings of Florida of eight impeachment articles , removing the 53-year-old judge from his $ 89,500-a-year , lifetime job . 
 Mr. Hastings 's case was particularly nettlesome because it marked the first time a federal official was impeached and removed from office on charges of which a jury had acquitted him . 
 In 1983 , Mr. Hastings was found not guilty of accepting a $ 150,000 bribe in a case before him , the central charge on which the Senate convicted him . 
 He was only the sixth federal judge ever ousted from office after an impeachment trial . 
 With no floor debate , the Senate on Friday voted 69-26 to convict Mr. Hastings of perjury and conspiring to accept a bribe , five votes more than needed . 
 Conviction on any single impeachment article was enough to remove Judge Hastings from office . 
 He was found not guilty of three charges , involving accusations that he had improperly disclosed information about a sensitive , government investigation . 
 The Senate did n't vote on six lesser charges . 
 Although Mr. Hastings had been acquitted by a jury , lawmakers handling the prosecution in Congress had argued that the purpose of impeachment is n't to punish an individual . 
 Instead , they argued that impeachment aims to protect public institutions from people who have abused their positions of trust , irrespective of the outcome of prior criminal or civil cases . 
 Mr. Hastings faced the senators and sat impassively during the first two roll-call votes , then quickly left the chamber . 
 In an impromptu news conference on the Capitol steps , he denounced the senators ' action . 
 `` Their opinion is devoid of the wisdom of the forefathers ' teaching regarding impeachment , '' Mr. Hastings said . 
 For the future , he said he would run for governor of Florida . 
 Mr. Hastings was appointed to the federal bench by President Carter in 1979 and was one of the few black federal judges in the country . 
 While he packed the Senate gallery with his supporters during some of the impeachment trial , most civil rights groups kept their distance from his case . 
 Following the impeachment conviction , Dr. Benjamin Hooks , executive director of the National Association for the Advancement of Colored People , issued a restrained statement , warning that the Hastings case could set a `` dangerous precedent , '' but adding , `` We must respect the considered judgment of the Senate . 
 When last we left him , FBI Agent Nick Mancuso had solved a murder mystery , unraveled a Washington political scandal , and racked up some pretty good ratings numbers in the miniseries `` Favorite Son . '' 
 What next for the crusty FBI agent with the heart of gold ? 
 A spinoff series , of course . 
 There are plenty of worse inspirations for shows -- and most of them had already made the fall lineup : a nun raising some lovable orphans . 
 A den mother raising some lovable teen models . 
 A bunch of tans and bathing suits posing as lovable lifeguards . 
 In that context , Robert Loggia 's riveting performance as the unlovable -- even crotchety -- veteran agent seems a better franchise for a series than most . 
 Week by week on `` Mancuso FBI '' -LRB- NBC , Fridays , 10 p.m . ET -RRB- , he pokes around the crime styles of the rich , famous and powerful of the Washington scene -- a loose cannon on deck at the FBI . 
 Over the first few weeks , `` Mancuso FBI '' has sprung straight from the headlines , which is either a commendable stab at topicality , or a lack of imagination , or both . 
 The opening show featured a secretary of defense designate accused of womanizing -LRB- a la John Tower -RRB- . 
 When his secretary is found floating dead in the pol 's pool , Mancuso is called in to investigate . 
 Last week , a young black girl claimed she had been raped by a white police officer -LRB- a la Tawana Brawley -RRB- . 
 In this week 's show , there 's an unsafe nuclear weaponsmaking facility -LRB- a la Rocky Flats -RRB- . 
 Along the way , we 're introduced to the supporting cast : a blond bombshell secretary -LRB- Randi Brazen -- her real name , honest -RRB- , a scheming young boss -LRB- Fredric Lehne -RRB- , another blonde bombshell who 's also an idealistic lawyer -LRB- Lindsay Frost -RRB- , and a forensics expert -LRB- Charles Siebert -RRB- . 
 If all of this seems a little stale , it 's redeemed in part by some tricky plot twists : The usual suspects are found to be guilty , then not guilty , then guilty -- but of a different crime . 
 In last week 's rape case , for example , the girl turns out to have been a victim of incest , and the biggest villains are the politicians who exploit the case . -RRB- 
 Most of all though , the show is redeemed by the character of Mancuso . 
 What makes the veteran FBI man so endearing is his hard-bitten cynicism -- earned , we discover , when he was assigned to the civil rights movement back in the 1960s . 
 He was n't protecting the Freedom Marchers ; he was tailing them as subversives . 
 This is not the `` Mississippi Burning '' scenario that thrills his young colleagues : `` Kid , you 've been reading Classic Comics too long , '' Mancuso says . 
 Back in 1964 , the FBI had five black agents . 
 Three were chauffeurs for J. Edgar Hoover , and two cleaned his house . '' 
 At the core of Mr. Loggia 's Mancuso is his world-weary truculence . 
 He describes a reporter as `` Miss First Amendment . '' 
 He describes a drowned corpse as `` Esther Williams . '' 
 And when he 's told `` Try a little tenderness , '' he shoots back `` I 'm going home to try a little linguine . '' 
 Yet for all his cynicism , he 's at heart a closet idealist , a softy with a secret crush on truth , justice and the American Way . 
 He 's the kind of guy who rescues trampled flags . 
 If `` Mancuso FBI '' has an intriguing central character , it also has a major flaw : It 's wildly overwritten . 
 Executive Producers Steve Sohmer and Jeff Bleckner -LRB- and Ken Solarz and Steve Bello -RRB- have revved this show up to the breaking point . 
 To start , there 's always a crisis -- and someone always worries , `` What if the press gets a hold of this ? '' 
 At least once an episode we see protestors marching around screaming slogans . 
 At least once Mancuso 's boss yells `` In here -- now , '' and proceeds to dress his investigator down : `` You are a dinosaur... a hangover in a $ 10 suit . 
 One more word and you are out on a park bench , mister . '' 
 Finally , of course , the boss gives in , but he 's still yelling : `` I find myself explaining anything to Teddy Kennedy , you 'll be chasing stolen cars in Anchorage . '' 
 In fact , throughout `` Mancuso FBI , '' we do n't get words or lines -- we get speeches . 
 Witnesses shout , scream , pontificate : ``... a dream that the planet could be saved from itself and from the sadistic dumb creatures who try to tear down every decent man who raises his voice . '' 
 And Mancuso himself is investigating at the top of his lungs : `` How the hell can you live with yourself ? '' he erupts at a politician . 
 You twist people 's trust . 
 You built your career on prejudice and hate . 
 The scars will be here years after the polls close . '' 
 In each show , Mancuso gets to unleash similar harangues : `` Where the hell are they gon na live when people like you turn the world into a big toxic waste dump ? 
 You 're the real criminal here... and what you did was n't just a murder -- it was a crime against humanity . '' 
 And , at least once a show , someone delivers the line `` Get off that soapbox . '' 
 Now that 's advice the writers should take to heart . 
 They have a series with a good character , some interesting , even occasionally surprising plot lines , and they 're ruining it . 
 Why , when a key witness disappears , does Mancuso trash her apartment , tearing down drapes , smashing walls ? 
 It 's a bizarre and totally inappropriate reaction , all to add more pizzazz to a script that 's already overdosing on pizzazz . 
 That 's not plot . 
 That 's not character . 
 That 's hyperventilating . 
 There is a scene at the end of the first week 's show where Mancuso attends the unveiling of the memorial to his dead partner David . 
 Asked to say a few words , he pulls out his crumpled piece of paper and tries to talk , but he 's too choked up to get the words out . 
 He bangs on the piece of paper in frustration , then turns and walks away . 
 It was a profoundly moving moment for series television , and Robert Loggia 's acting resonated in the silence . 
 There 's a pretty good program inside all the noise of `` Mancuso FBI . '' 
 If the show 's creators could just let themselves be quiet for a little , they might just hear it . 
 With a Twist of the Wrist Boys with tops , and Frisbee tossers , And P.R. types with bees in their bonnet , Have a goal in common , all of them try To put the right spin on it . 
 -- George O. Ludcke . 
 Investment letters now abound , I really like to read them ; If I peruse enough , I 've found I 've no time left to heed them 
 -- Bern Sharfman . 
 TV evangelist : salesparson . 
 -- Marguerite Whitley May . 
 Texaco Inc. has purchased an oil-producing company in Texas for $ 476.5 million , its first major acquisition since its legal brawl with Pennzoil Co. began more than four years ago . 
 The White Plains , N.Y. , oil company said Friday that it had acquired Tana Production Corp. , a subsidiary of TRT Energy Holdings Inc. , for $ 95.1 million in cash , with the rest to be paid in shares of a new , non-voting issue of preferred stock . 
 Tana , which holds properties in 17 oil and gas fields in south Texas , will provide Texaco with mostly gas reserves . 
 The fields contain recoverable reserves of 435 billion cubic feet of natural gas and four million barrels of oil . 
 `` This acquisition is another indication of Texaco 's commitment to increase the company 's reserve base , '' said Chief Executive Officer James W. Kinnear . 
 Texaco has also been attempting to sell oil properties . 
 At least two years ago , the company put 60 million barrels of oil reserves on the block . 
 They were either too small or uneconomic to maintain , the company said . 
 Not all of those parcels have yet been sold . 
 Texaco acquired Tana before it completed those sales because Tana 's properties are high quality and near other fields Texaco already owns , a company spokeswoman said . 
 Texaco , like many other oil companies , has been struggling to replace its falling oil and gas reserves . 
 Texaco 's situation had become particularly complex because much of its effort had for years been focused on its brawl with Pennzoil and then on New York investor Carl C. Icahn 's attempt to take over the company . 
 Pennzoil had sued Texaco for improperly interfering with its acquisition of a portion of Getty Oil Co . 
 Eventually , Texaco , which was forced into bankruptcy proceedings by that litigation , settled its fight with Pennzoil for $ 3 billion in 1986 . 
 Mr. Icahn , who played a key role in the settlement and attempted subsequently to take control of the company , sold his stake in Texaco just last summer . 
 Completion of Texaco 's acquisition of Tana is subject to government approval under the Hart-Scott-Rodino Antitrust Improvements Act . 
 CRI Inc. said it reduced the estimated cash distribution for its Capital Housing and Mortgage Partners Inc. trust to between 71 cents and 74 cents a share , from between 75 cents and 80 cents , for the year ending June 9 , 1990 . 
 The change in expected cash distributions from the Champs real estate investment trust stems from a revised estimate of administrative costs , said Jay R. Cohen , Champs executive vice president . 
 CRI , which sponsors Champs , is a world-wide real estate investment firm . 
 H&R BLOCK Inc. had net income of $ 100.2 million , or $ 1.90 a share , in the fiscal year ended April 30 . 
 The figure was incorrectly shown as a net loss in a chart accompanying Friday 's Heard on the Street column . 
 Your Oct. 2 article on Daniel Yankelovich cited the quote `` A good name is better than great riches '' as being from Cervantes ' `` Don Quixote . '' 
 Actually , Cervantes borrowed that quote from a writer of some 25 centuries earlier : Israel 's King Solomon wrote those words in the Book of Proverbs -LRB- 22:1 -RRB- . 
 Michael E. Hill 
 Japan had an unadjusted trade surplus of $ 1.82 billion for the first 10 days of October , down from $ 3.16 billion a year earlier , the Finance Ministry said . 
 The latest drop shows the narrowing in the nation 's trade gap reflected in successive full monthly reports is continuing . 
 The report follows five-consecutive declines in full monthly figures . 
 Imports rose sharply in the period , to $ 5.19 billion from $ 4.04 billion a year earlier , a change of 28 % . 
 Exports during the period were $ 7.01 billion , 2.6 % below $ 7.20 billion a year ago . 
 Groupe AG 's chairman said the Belgian insurer is prepared to give up some of its independence to a white knight if necessary to repel a raider . 
 Amid heavy buying of shares in Belgium 's largest insurer , Maurice Lippens also warned in an interview that a white knight , in buying out a raider , could leave speculators with big losses on their AG stock . 
 Since the beginning of the year , the stock has nearly doubled , giving AG a market value of about 105 billion Belgian francs -LRB- $ 2.7 billion -RRB- . 
 The most likely white knight would be Societe Generale de Belgique S.A. , which already owns 18 % of AG and which itself is controlled by Cie . Financiere de Suez , the acquisitive French financial conglomerate . 
 But Mr. Lippens said a rescue also could involve Asahi Mutual Life Insurance Co. , which owns 5 % of AG . 
 AG is hardly alone in its anxiety . 
 A rambunctious shake-up is quickly reshaping Europe 's once-stately insurance business . 
 Worried by European Community directives that will remove many of the barriers to cross-border insurance services , starting in mid-1990 , insurers are rushing to find partners and preparing for price wars . 
 In West Germany and the Netherlands , insurers are flirting with banks . 
 In France , Suez and Axa-Midi Assurances S.A. both have been on the prowl for giant acquisitions ; Suez last month acquired control of Groupe Victoire , the sixth-largest European insurance company , after a takeover battle with Cie . Industrielle . 
 Mr. Lippens said the volume of shares changing hands has grown significantly since mid-September . 
 But he estimated that a raider would have been able to amass no more than 4 % of the shares in recent months . 
 Aside from exploring plans for joint ventures or acquisitions , Mr. Lippens has called top managers of companies rumored as potential raiders -- among them , Axa-Midi , Union des Assurances de Paris and Suez , all based in France . 
 They have all `` very clearly stated that they have not acquired and are not acquiring shares of AG , '' he said . 
 Any raider would find it hard to crack AG 's battlements . 
 A `` syndicate '' of shareholders holds just under 50 % of AG , Mr. Lippens said , and members have agreed to give one another the right of first refusal should they sell any AG shares . 
 Aside from Generale de Belgique and Asahi , the syndicate includes Antwerpsche Hypotheekkas , a Belgian savings bank , and various family interests . 
 A Generale spokesman confirmed that the giant Belgian holding company would be willing to raise its stake in AG should a raider seek control . 
 Asahi officials could n't be reached for comment . 
 Even without bid talk , this year 's surge in prices for Brussels real estate has excited interest in AG . 
 The company says those holdings constitute the third-biggest real-estate portfolio in Belgium . 
 With the dust settling from the failed coup attempt in Panama , one of the many lingering questions the Bush administration will ponder is this : Is the National Security Council staff big enough , and does it have enough clout , to do its job of coordinating foreign policy ? 
 President Bush 's national security adviser , Lt. Gen. Brent Scowcroft , came into office in January intent on making the NSC staff leaner and more disciplined than it had been during the Reagan administration . 
 Gen. Scowcroft was a member of the Tower Commission , which investigated the Iran-Contra affair . 
 He was all too aware of how a large , inadequately supervised NSC staff had spun out of control and nearly wrecked President Reagan 's second term . 
 So , following both the style he pursued as President Ford 's national security adviser and the recommendations of the Tower Commission , Gen. Scowcroft has pruned the NSC staff and tried to ensure that it sticks to its assigned tasks -- namely , gathering the views of the State Department , Pentagon and intelligence community ; serving as an honest broker in distilling that information for the president and then making sure presidential decisions are carried out . 
 The Tower Commission specifically said that the NSC staff should be `` small '' and warned against letting `` energetic self-starters '' like Lt. Col. Oliver North strike out on their own rather than leaving the day-to-day execution of policies to the State Department , Pentagon or Central Intelligence Agency . 
 However , the Panama episode has raised questions about whether the NSC staff is sufficiently big , diverse and powerful to coordinate U.S. policy on tough issues . 
 During the coup attempt and its aftermath , NSC staffers were `` stretched very thin , '' says one senior administration official . 
 `` It 's a very small shop . '' 
 Gen. Scowcroft does n't plan to increase the staff right now , but is weighing that possibility , the official adds . 
 The NSC staff `` does n't have the horsepower that I believe is required to have an effective interagency process , '' says Frank Gaffney , a former Pentagon aide who now runs the Center for Security Policy , a conservative Washington think-tank . 
 The problem with this administration , I think , is that by design it has greatly diminished , both in a physical sense and in a procedural sense , the role of the NSC . '' 
 The National Security Council itself was established in 1947 because policy makers sensed a need , in an increasingly complex world , for a formal system within the White House to make sure that communications flowed smoothly between the president and the State Department , Pentagon and intelligence agencies . 
 By law , the council includes the president , vice president and secretaries of state and defense . 
 In practice , the director of central intelligence and chairman of the Joint Chiefs of Staff also serve as unofficial members . 
 But the size , shape and role of the NSC staff have been left for each president and his national security adviser to decide . 
 That task is one of Washington 's perennial problems .