Administration officials insist that the size of the staff was n't a problem during the Panama crisis .
But one clear problem during the coup attempt was that the NSC staffer most experienced in Latin America , Everett Briggs , was gone .
He had just resigned , at least in part because of a feud with Assistant Secretary of State Bernard Aronson over the administration 's policy on Panama and support for Nicaragua 's Contra rebels .
The absence of Mr. Briggs underscored the possible inadequacy of the current NSC staff .
Both Gen. Scowcroft and his deputy , Robert Gates , are experts in U.S.-Soviet affairs .
Gen. Scowcroft is particularly well-versed in arms control , and Mr. Gates has spent years studying Soviet politics and society .
Both have become confidants of President Bush .
But neither has an extensive background in Latin America , the Middle East or Asia .
In those areas , the role of NSC staffers under them therefore have become more important .
Gen. Scowcroft knows as well as anyone that one of the biggest dangers he faces is that NSC staffers working in relative anonymity will take over policy-making and operational tasks that are best left to bigger and more experienced State Department and Pentagon bureaus .
But just as every previous NSC adviser has , Gen. Scowcroft now will have to mull at what point the NSC staff becomes too lean and too restrained .
Japan 's wholesale prices in the first 10 days of October fell 0.3 % from the previous 10 days but rose 3.3 % from a year ago , the Bank of Japan said .
The wholesale price index stood at 89.6 -LRB- 1985 equals 100 -RRB- .
A former Sperry Corp. marketing executive , admitting his role in the Pentagon procurement scandal , pleaded guilty to bribery and conspiracy charges for helping funnel $ 400,000 to a midlevel Navy acquisition official during the early 1980s .
Frank Lavelle , who at the time was the marketing director for Sperry in Clearwater , Fla. , admitted participating in a scheme to bribe Garland Tomlin , the Navy official .
Mr. Tomlin , who left the Navy in 1985 , pleaded guilty earlier this year to related conspiracy , bribery and tax-evasion charges .
The bribery scheme took place between 1982 and 1985 , according to documents filed by prosecutors in connection with Mr. Lavelle 's guilty plea in federal district court in Alexandria , Va .
Sperry merged with Burroughs Corp. to become Unisys Corp. in late 1986 .
Court documents filed by prosecutors indicate Mr. Tomlin tried to steer to Sperry a multimillion dollar contract to computerize maintenance of certain Navy electronics equiment .
Mr. Tomlin , among other things , illegally provided Mr. Lavelle with inside information and documents intended to give Sperry an unfair advantage in the competition , the documents said .
Sperry ultimately was eliminated from the competition without receiving the work .
Documents filed by prosecutors also indicate that Mr. Lavelle and his fellow conspirators requested and obtained `` approval of the scheme '' from more-senior Sperry officials `` because the payment which -LCB- Mr . -RCB- Tomlin requested was so large . ''
Charles Gardner , a former Unisys vice president , and James Neal , a former company consultant , have admitted participating in this and other bribery schemes .
Unisys has said that all of the company officials who participated in improper activities have left the company .
Mr. Lavelle faces a maximum of 20 years in jail and a $ 500,000 fine .
The New York Stock Exchange said a seat was sold for $ 500,000 , unchanged from the sale Thursday .
Seats are quoted at $ 430,000 bid and $ 525,000 asked .
Bureaucrats may deserve their bad reputation , after all .
Matthew Lesko , something of a professional defender of government , thought he had a sure-fire winner last summer when he offered $ 5,000 for the best `` verifiable story of 250 words or less about how a government bureaucrat helped you . ''
He sent out thousands of news releases from his Kensington , Md. , office .
He plugged the contest on Larry King 's radio show , on Pat Sajak 's television show and on the C-SPAN cable television network .
He talked about it in every speech he made as he roamed the country promoting his books , which dispense handy how-to advice on using government information for fun and profit .
Mr. Lesko figured he would be flooded with entries by now .
After all , he says , `` we 've got like 15 million bureaucrats . ''
And in addition to the $ 5,000 , he has promised the winner a `` My Favorite Bureaucrat '' plaque and offered each of two runners-up $ 500 .
So far , though , Mr. Lesko has received only one entry .
To make matters worse , the lone nomination came from another bureaucrat : A woman from the New York State Department of Taxation and Finance who nominated her boss .
Mr. Lesko , who is making the rules as he goes , has determined that bureaucrats are eligible for nomination by other bureaucrats .
But he says he would prefer to get nominations from rank-and-file folks .
He admits that he has n't had much luck generating free publicity for his contest .
Newspapers , including this one , have generally ignored his news releases .
Talk show hosts quickly change the topic .
But Mr. Lesko 's staff is beginning to wonder whether there is n't some larger phenomenon foiling the contest .
`` Is the government not helping anybody ? '' asks Toni Murray , an assistant to Mr. Lesko .
Mr. Lesko himself is n't yet prepared to accept that explanation .
`` People hate to write , '' he says .
`` Maybe people do n't believe I want to give this money away . ''
Maybe Americans are just so annoyed with government that they are n't interested in admitting that bureaucrats come in handy once in a while .
If he sponsored a contest on how a bureaucrat mishandled something , Mr. Lesko admits , `` I 'd get 5,000 entries . ''
Now there 's an idea .
Ford Motor Co. and Saab-Scania AB of Sweden broke off talks about a possible alliance after Ford officials concluded that the cost to modernize Saab 's car operations would outweigh the likely return .
With the collapse of the talks Friday , European analysts expect Ford to intensify its pursuit of British luxury car maker Jaguar PLC , which is scrambling to fend off a hostile Ford bid by negotiating a friendly alliance with Ford 's archrival , General Motors Corp .
Saab , meanwhile , is left to continue its search for an ally to shore up its sagging car business .
Saab said last week it `` has had and will continue to have contacts with other manufacturers . ''
Among the possible suitors is Italy 's Fiat S.p . A , analysts said last week .
Ford and Saab officials declined to elaborate publicly on the announcement Friday that their negotiations failed to yield an agreement `` that could make long-term business sense to both parties . ''
Individuals close to the Ford side of the negotiations said late last week that the No. 2 U.S. auto maker lost interest as it became clear that the Swedish auto maker 's automotive operations had little to offer in the way of image or technology .
Ford originally had seen a Saab alliance as a way to expand its presence in the European and U.S. luxury car markets .
In addition , Ford and Saab had discussed a possible link between their heavy truck operations .
But the talks on a heavy truck alliance apparently did n't go far .
Some European analysts speculated that officials of Saab 's highly profitable Scania truck operation balked at surrendering any of their autonomy .
Meanwhile , Ford officials became convinced they could n't expect to recover the investment it would require to make Saab 's cars competitive in the increasingly crowded luxury market .
Saab 's problems were underscored Friday when the company announced that its car division had a 1.2 billion kronor -LRB- $ 186.1 million -RRB- loss during the first eight months of this year , slightly worse than Saab-Scania had forecast in its first-half report last month .
Overall , Saab-Scania 's pretax profit during the first eight months of the year plunged 48.9 % to 1 billion Swedish kronor -LRB- $ 155.1 million -RRB- from 1.96 billion kronor -LRB- $ 303.9 million -RRB- a year earlier .
Industry analysts in Europe said the most likely suitor for Saab now is Fiat .
Saab and Fiat have worked together in the past , in one case developing jointly a new auto chassis that became the foundation of Saab 's 9000 model , Fiat 's Croma and Lancia 's Thema .
Last month , Saab-Scania Chief Executive Georg Karnsund said his company has had talks with Fiat about a broader alliance .
But the talks yielded `` nothing so advanced that we needed to make a public announcement about it , '' he said .
As for Ford , analysts expect the end of the Saab play will allow the U.S. auto maker to focus its resources on the intensifying struggle with GM for a stake in Jaguar .
The failure of the Saab talks `` makes it even more crucial for -LCB- Ford -RCB- to be victorious '' in the Jaguar contest , said Stephen Reitman , European auto industry analyst at UBS-Phillips & Drew in London .
Ford faces an uphill fight for Jaguar , however .
Jaguar executives said last week they expect to have a friendly alliance with GM wrapped up by the end of the month .
GM , meanwhile , is hosting a delegation of members of the British Parliament who are touring the auto maker 's headquarter operations in Detroit .
A GM spokesman said the visit is n't connected to the Jaguar situation .
But Ford clearly views Jaguar as a prize worth fighting for , since the company 's gilded brand image would give Ford a badly needed leg up in the high end of the luxury markets in both Europe and the U.S .
Last week , Ford encountered a setback in its effort to broaden its U.S. luxury offerings when it was forced to abandon a four-year-old effort to market its German-built Scorpio sedan in the U.S. as a luxury import under the Merkur brand name .
So despite the GM-Jaguar romance , analysts say Ford by last Friday had boosted its Jaguar holding to about 11 % of the luxury auto maker 's shares outstanding from 10.4 % early last week .
About 5.4 million Jaguar shares changed hands in active trading on London 's stock exchange Friday , and Jaguar shares moved up 19 pence to 696 pence -LRB- $ 11 -RRB- .
On the U.S. over-the-counter market , Jaguar 's American depositary receipts rose 12.5 cents to $ 11.125 .
Joann S. Lublin contributed to this article .
The Dallas Cowboys are looking at a long-yardage situation , struggling to pull ahead of the Atlanta Falcons .
Up in his stadium box , their new and controversial owner , Jerral `` Jerry '' Jones , watches anxiously as the team bounds up to the scrimmage line .
Mr. Jones takes heart .
There in the center of the pack is quarterback Troy Aikman , the key to the Cowboys ' comeback strategy .
So key , in fact , that Mr. Jones signed him in April for $ 11.4 million over the next six years -- a record for a rookie .
`` He 's a genuine Wheaties-box athlete , '' gushes Mr. Jones .
With three minutes left on the clock , Mr. Aikman takes the snap , steps back and fires a 21-yard pass -- straight into the hands of an Atlanta defensive back .
The crowd groans , Mr. Jones shakes his head , the Cowboys lose the game .
A few days after that Sept. 17 game , Mr. Aikman broke a finger , sidelining him for weeks .
Ah , the glamour of professional sports .
For Mr. Jones , losing his quarterback temporarily was just the latest in a string of setbacks that has beset the Dallas Cowboys -- and , this year , much of the National Football League .
Once fat and happy , the Cowboys now are losing games , fans and money .
Last year , the team ended up $ 2 million in the red on $ 30 million in revenue .
It has some of the highest costs in the league .
Its attendance is off 23 % from six years ago .
At the very least , Mr. Jones , who cultivates the society circuit as eagerly as his bench , can take comfort in one fact : These days , he is n't alone .
Nearly half the owners of the 28 National Football League teams are losing money , the result of flat attendance , aging stadiums and -- more than anything -- skyrocketing salaries for star players like Mr. Aikman .
Last year , the top 12 players on each NFL team took home an average $ 536,000 , a figure comparable to baseball and higher than in basketball .
First-round draft picks have done even better : Average salaries and bonuses for them rose to $ 685,000 this year , up 44 % from 1987 .
`` It 's a vicious circle , '' says Art Modell , owner of the Cleveland Browns .
`` One team pays so much and the other pays more .
We just do n't have that kind of income stream . ''
All this is causing convulsions in professional football .
Owners , largely complacent in the past , are now almost desperately looking for ways to lower costs and raise revenue -- embracing some revolutionary ideas in the process .
Though not intentionally , the Cowboys ' Mr. Jones has come to represent this new breed of owner .
Shortly after buying 66 % of the team from H.R. `` Bum '' Bright for $ 145 million , and mindful of the Cowboys ' ragged bottom line , the 47-year-old Mr. Jones set about his own round of team cuts .
First , he unceremoniously sacked Tom Landry , the legendary coach who took the Cowboys to five Super Bowls and 20 consecutive winning seasons .
In Dallas , Mr. Landry has a standing just shy of sainthood .
Anti-Jones sentiment flooded the local press : `` A crude obnoxious hick , '' said one writer ; `` a real oink , '' said another ; `` Who in the hell does he think he is ? '' wrote a third .
For Mr. Jones , it was just the beginning .
He quickly cut the team 's bloated administrative staff by half , shut down a Cowboys-owned dance academy and , in July , announced plans to sell Valley Ranch , the team 's 30-acre practice camp and the most lavish training facility in the NFL .
Mr. Jones calls the ranch `` the Pentagon of Sportdom . ''
It is a maze of halls that connects film rooms , elaborate spas and weight-training centers that testify to a richer , more free-spending era .
He likes to tell the yarn of how he got lost on the expansive ranch during an early visit , took refuge in an office and called the front desk for help .
`` I said , ` Somebody come get me .
I 'm at extension 29 . ' ''
With a new day dawning on the sport , Mr. Jones does n't see a place for this sort of luxury .
`` It 's just not cost efficient , '' he says .
The place costs nearly $ 2 million a year to maintain .
When he sells it , he says , the Cowboys will move to a more practical -- read affordable -- grass practice field near Texas Stadium .
And as for Tom Landry , well , in Mr. Jones 's mind , he had played out his winning years .
After posting losing seasons in each of the last three years , the Cowboys needed a change , he says .
Football has long been Mr. Jones 's passion , both on and off the field .
An Arkansas native , he started at guard on the undefeated 1964 University of Arkansas team that won a national championship .
After college , he worked at his father 's insurance company in Little Rock , and in 1966 led an aborted attempt to buy the San Diego Chargers .
Years later , with cash from the sale of the insurance company , he founded Arkoma Production Corp. , an oil and gas exploration company based in Little Rock .
So it was n't surprising that Mr. Jones returned to his Arkansas roots when he went looking for a replacement for Mr. Landry .
He tapped Jimmy Johnson , a teammate on the 1964 University of Arkansas squad and the head coach at the University of Miami , where he led the Hurricanes to five winning seasons and a national championship in 1987 .
Whatever Mr. Johnson 's talents , in the hearts and minds of many Dallas fans , he is no Tom Landry .
Seven games -LRB- and , after a loss to the Kansas City Chiefs yesterday , seven losses -RRB- into the season , the `` new '' Cowboys are n't doing any better than the old .
In fact , the last time they played this badly was in 1960 , their opening season .
Average attendance at their games , about 49,000 last year , continues flat .
Mr. Jones is attacking the problem on several fronts .
He continues to reshuffle the team , trading famed running back Herschel Walker to the Minnesota Vikings this month for a slew of players and future draft picks .
To try to draw more fans , he has dropped end-zone ticket prices from $ 25 to $ 19 .
But the general trend , given rising costs in the league , has been to raise prices , and Mr. Jones is expected to eventually follow suit .
`` It 's simple , '' says Lamar Hunt , who owns the Kansas City Chiefs and last year raised ticket prices by $ 2.40 to an average $ 17 .
If we did n't increase prices , we 'd be in the red . ''
Mr. Jones has also beefed up his marketing staff to sell the 118 luxury suites topping Texas Stadium -LRB- his deal with Bum Bright included operating rights for the stadium -RRB- .
The suites are air-conditioned , have wet bars and plush seating , and offer a clear view of the field -- all for a sale price of $ 475,000 to $ 1 million , depending on their size and location .
Mr. Jones has been taking prospective suite owners onto the field during practice to let them rub elbows with players , and promises those who actually buy one of the rooms an insider 's look at the team 's strategy before game time .
The sales job seems to be paying off : When he bought the team , only six of the suites had been sold .
Today , 30 have .
Gate receipts are only the Cowboys ' second largest source of cash .
The biggest is the NFL 's contract with national television for broadcast of the league 's games .
Last year , the Cowboys ' share of that pie came to $ 17.6 million .
The team additionally earns between $ 2 million and $ 4 million for local radio and television broadcast rights .
Mr. Jones is currently trying to jack up the price for those local rights .
He is also trying to get more stations in Mexico , where the Cowboys have a following , to pick up the games .
Mr. Jones , whose twangy voice and folksy ways belie an intense businessman who works 16-hour days , is resigned to the hefty salaries he pays his players these days .
He calls the contracts `` critical to winning in the NFL '' and has played his part in the bidding wars .
Besides signing Mr. Aikman to a sizable contract , Mr. Jones has agreed to pay rookie quarterback Steve Walsh $ 4.1 million over the next four years .
This wage inflation is bleeding the NFL dry , the owners contend .
Soon , only large corporations will be able to afford to buy and run football teams , predicts John J. Veatch Jr. , an investment banker with Salomon Brothers who handled the Cowboys sale .
To tackle the problem , NFL owners have proposed setting a rookie wage scale to try to rein in salaries .
Details of the plan , which would go into effect in 1993 , are sketchy , but each player would apparently be paid a base salary keyed to his position and ability .
Bonuses would be paid based on playing time and performance .
The NFL Players Association , meanwhile , contends that athletes are paid a wage commensurate with their ability to draw fans , and that some owners are in financial trouble because of poor business management , not players ' salaries .
The owners are trying to boost profit in other ways , too .
Many have launched promotions to attract new fans and are renegotiating dated stadium contracts .
Most of the owners must pay up to 10 % of gross ticket sales for leases on stadiums they say are either too small or too old .
In Chicago , for example , size is the issue .
`` We have the worst lease in the NFL , '' contends Michael B. McCaskey , the president of the Chicago Bears and a grandson of George Halas , who founded the NFL 's predecessor organization .
`` We 're in a metro area with millions of Bear fans , and only a small number can be accommodated . ''
When the lease expires in 1999 , he says , `` It 's got to be changed . ''
This year , the NFL also imposed an 80-player limit on teams going into training camp , down from 120 , in a move meant to trim payroll costs .
And the league is trying to get more for its three-year national network contract , which expires after this season .
The current contract pays the NFL $ 1.4 billion .
Owners say they expect the league to demand a 50 % increase , despite the fact that televised football games have had lackluster ratings .
An NFL spokesman also says the league will probably expand its offerings to cable TV companies like ESPN .
The changes have n't come easy .
Like the game of professional football , the NFL organization itself is in turmoil .
The new breed of team owner , Mr. Jones included , has been fighting the NFL bureaucracy for a greater say in league affairs , and the battle has produced a form of organizational gridlock .
In July , 11 NFL owners , almost all of them new , blocked an effort to install Jim Finks as a replacement for retiring league commissioner Pete Rozelle .
Mr. Finks is perceived by some owners as a standard-bearer for the Old Guard .
Earlier this month , another effort to choose a commissioner failed .
The owners meet again tomorrow .
For his part , Jerry Jones says he 's in the business for the long haul , and his work style seems to support that .
He puts in busy six-day weeks -LRB- excluding game days -RRB- , and on one recent afternoon fielded questions , in the course of an hour , from a TV producer , his luxury-suite marketing manager , a disgruntled customer and a roomful of Arkansas reporters .
To keep his schedule on track , he flies two personal secretaries in from Little Rock to augment his staff in Dallas .
`` When I made this investment , I made it on a lifetime basis , '' he explains .
`` I 'm not here to make money by reselling the team later on .
While the Cowboys may not be the best investment now , I do n't accept they ca n't be in the future . ''
Besides , to a large extent , Mr. Jones may already be getting what he wants out of the team , even though it keeps losing .
Owning the Cowboys has bought him entree to a glitzy life that drilling for oil in Arkansas just did n't provide .
There is the new private jet , the platoon of assistants , invitations to the best parties , and television appearances on shows such as `` Prime Time Live . ''
A few weeks ago , Mr. Jones even entertained Elizabeth Taylor in his private suite at Texas Stadium .
`` You 're in the catbird seat every day in this job , '' he says .
How interestingly clever of Robert Goldberg to use the form of pretend advocacy journalism to explain his perception of `` Days of Rage '' in his television critique -LRB- Leisure & Arts , Sept 11 -RRB- .
He chastises Jo Franklin-Trout for her inept presentation of advocacy journalism , judging her project as `` intellectually slipshod . ''
Was not the title very clear ?
One example he gives : `` She did n't ask '' -LRB- why the Palestinian children are soldiers throwing stones -RRB- .
Really now , did she have to ask ?
Were not the pictures and happenings , which have been continuing news headlines , answers enough ?
Mr. Goldberg contends that even as `` propaganda '' the film fails because it presents only one view .
Of course the Palestinians complain about their treatment ; of course the Israelis feel put upon .
But his complaint that `` Days of Rage '' does n't contain balanced comments from Israelis about how badly the Palestinians are behaving is irrelevant .
It 's like doing a documentary on apartheid and insisting that equal time be given to how terrific white South Africans are .
This film did emphasize how long the stalemate has existed by tracing the conflict to the days of World War I when the British tried to guarantee both a Jewish state and a Palestinian state without specifying how it was to be done .
Well , `` Days of Rage '' airing with before-and-after packaging , and after repeated delays , was a beginning .
Every issue is multisided .
This film attempts to show a side rarely seen in our media .
Now we must endure a rash of critics who apparently wish to know details of one side only .
Charlotte Carpenter Bainbridge Island , Wash .
President Bush wants the Pentagon to get special treatment in coping with the across-the-board spending cuts that took effect last week .
Mr. Bush asked Congress to raise to $ 6 billion from $ 3 billion the amount of money Defense Secretary Dick Cheney may shift among the Pentagon 's individual programs , projects and activities , allowing him to ease the pain that the Gramm-Rudman budget law was intended to inflict .
If the request is approved by both the House and Senate , Mr. Cheney would need only permission from the White House Office of Management and Budget to move the money , according to Senate budget analysts .
That would give the Pentagon flexibility that no other federal agency has .
`` It 's simply a way of making the cuts less onerous for defense than they are for domestic programs , '' said Chairman James Sasser -LRB- D. , Tenn . -RRB- of the Senate Budget Committee , who said he would oppose the request .
`` That is n't consistent with the kind of discipline that Gramm-Rudman is supposed to impose , '' he said .
The president 's request did n't indicate how Mr. Cheney would shift the money .
A Pentagon official said the request was made to give the department `` maximum flexibility '' to deal with the cuts .
Last week , Budget Director Richard Darman structured the $ 16.1 billion spending reduction , half of which must come from defense , to `` impose a little bit more discipline '' by applying cuts to each individual program , project or activity in the budget .
That would give agencies `` less ability... to fudge over things , '' he told reporters .
Under the deficit-reduction law , 4.3 % of the Pentagon 's money and 5.3 % of other agencies ' money has been canceled .
Lawmakers are expected to try to restore the funds once a pending deficit-cutting measure has been signed into law .
Rochester Telephone Corp. said it completed its purchase of Urban Telephone Corp. , of Clintonville , Wis. , the second-largest unaffiliated independent telephone company in that state .
Rochester Telephone said the acquisition was made in an exchange of its common shares for all the shares of Urban Telephone , but a price was n't disclosed .
Urban is the company 's first telephone subsidiary in Wisconsin .
Since June , Rochester Telephone signed letters of intent to purchase three other Wisconsin firms .
A bill that would permit the Securities and Exchange Commission to monitor the financial condition of securities firms ' holding companies is facing tough opposition from some Wall Street firms , which argue that the legislation is unnecessary .
The legislation and other issues related to the stock market will be the focus of hearings this week by the House Telecommunications and Finance Subcommittee and the Senate Securities Subcommittee .
Richard Breeden , the new chairman of the SEC , has n't taken a formal position on the bill , which would also require investors to disclose large trades and give the SEC additional authority during market emergencies .
However , he recently told the Senate Banking Committee that he believes the agency should have explicit authority to monitor debt levels at holding companies and affiliates of broker-dealers , which are frequently used to issue bridge loans .
The bridge loans are intended to provide temporary financing for acquisitions .
Since such loans are often refinanced through the sale of high-risk , high-yield junk bonds , the recent woes of the junk-bond market have renewed concerns among regulators about the risks associated with Wall Street firms issuing bridge loans .
But some Wall Street executives argue that such fears are unwarranted .
In a July 6 letter to the Senate Securities Subcommittee , First Boston Corp. argued that the fact that no retail brokerage firm failed during the 1987 market crash demonstrates that current rules are adequate .
First Boston , whose holding company , CS First Boston Group , is one of the larger issuers of bridge loans on Wall Street , said it is also concerned that once the SEC has the power to monitor holding companies , it will try to regulate their activities .
`` The proposal , while well-intended , I think can be dangerously misleading because the likely consequence would be to weaken , rather than strengthen the control the SEC has exercised for 50 years over the financial adequacy and viability of broker-dealers , '' Michael Raoul-Duval , managing director of First Boston , said in an interview .
The bill would `` divert scarce resources of the commission away from broker-dealers into areas which simply have no way of affecting broker-dealers , '' Mr. Raoul-Duval said .
Sources in the industry and on Capitol Hill say a compromise that would placate the industry while addressing the SEC 's concerns may be possible .
An aide to the Senate Securities Subcommittee says some legislators support the concept of risk disclosure , but adds : `` nobody is wedded to the language in the bill . ''
Edward O'Brien , president of the Securities Industry Association , said that the securities-industry trade group opposes the bill as it is written but that it is `` hopeful a compromise can be reached to achieve the SEC 's goals . ''
Mr. O'Brien will elaborate on the SIA 's position in testimony before the House Telecommunications and Finance Subcommittee this week , a spokesman said .
This letter was inspired by David Asman 's Sept. 25 editorial-page article about Fidel Castro , `` Man in the Middle of Drug Trafficking . ''
I 've organized a series of exchanges , exhibitions and other continuing projects between Cuban and American artists .
In any matters between us and the Cubans there can be no simplicity , consequently I 've become familiar not only with Cuban art and artists , but also with Cuban bureaucrats and their counterparts in our own government .
Despite levels of obstruction , incompetence and ensuing frustration of mythic proportion , these projects all remain , in my mind , valuable and well worth the effort .
There is a simple reason for this : the Cuban people .
Let me immediately put limits to whatever nostalgic notions that may intimate .
Those `` people '' to whom I refer are not some heroic , indecipherable quantity ; they are artists , critics , taxi drivers , grandmothers , even some employees of the Ministry of Culture , all of whom share a deep belief in the original principles of the Cuban Revolution , spelled out in terms such as equality among all members of the society , reverence for education and creative expression , universal rights to health and livelihood , housing , etc .
In fact , the generation of painters growing into maturity right now works with such profoundly held humanist assumptions and such passionate commitment to moral and ethical principles that it makes Che Guevara 's famous linkages of art idealism and revolution seem modest .
It is on behalf of these people , and out of my real respect for them , that I am responding to Mr. Asman 's opinions of their country .
The Ochoa trial in July , with its revelations of deeply rooted and widespread corruption , and the summary trial and execution , was extremely disturbing to everyone who has ever considered himself a friend of Cuba .
However , unacceptable though those occurrences may have been , they still provide no excuse for wholesale departures from truth .
Mr. Asman should make distinctions among Fidel , the army and the Cuban people .
They are not interchangeable , since they are motivated to act based on their own circumstances .
It is naivete to equate a government 's policies with the will of the people -LRB- as we well know -RRB- , and it is even worse folly to merge the clearly divergent agendas of Fidel and the military and the state bureaucracy .
Mr. Asman is also annoyed that Mr. Castro has resisted collaboration with U.S. officials , even though by his own account that collaboration has been devised essentially as a mechanism for acts directly hostile to the Cuban regime , such as facilitating defections .
I think it 's a little disingenuous to be surprised that Fidel does n't invite the U.S. State Department to violate the jurisdiction of the Cuban government over its own territory .
We badly need to follow fact rather than the rhetoric of conventional wisdom .
Without this basic level of attention to reality , our policies on Cuba will continue to be as counterproductive as they have for 30 years .
From my own point of view , given the qualities of humanity , creativity and warm spirit in which the Cuban people excel , we deny ourselves access to things we hold dear , and which seem to run in such short supply these days .
There is no rational justification for such behavior .
Rachel Weiss Brookline , Mass .
ENGRAPH INC. recently reported third-quarter earnings , which were mistakenly shown in the Quarterly Earnings Surprises table in last Tuesday 's edition to be lower than the average of analysts ' estimates .
Zacks Investment Research did n't adjust one analyst 's estimate for a stock split , which therefore was artificially high .
Engraph 's third-quarter net income of 15 cents a share actually was 7 % higher than the adjusted average of estimates .
Investors bailed out of New York City bonds in droves last week , driving prices lower and boosting yields .
One bond trader estimated that more than $ 50 million of New York City general obligation bonds were put up for sale Friday alone .
While that represents a small percentage of the city 's public debt outstanding , Friday 's selling followed a weeklong effort to unload the bonds by a broad spectrum of institutional and individual investors .
`` I 've never seen so many -LCB- New York City -RCB- G.O. 's up for sale , '' said another trader .
`` Every broker has blocks of every size and maturity . ''
Municipal bond analysts said the sell-off was triggered by concerns about the city 's financial health , rumors of a $ 900 million bond offering coming soon , and political uncertainty .
A spokesman for the city would n't confirm the size of the bond issue , but did say that a general obligation offering is in the works and should be priced sometime in the next two weeks , before the November mayoral election .
General obligation bonds are backed by the city 's overall revenues and credit . -RRB-
Although many investors were aware that a bond offering was being scheduled , many expected a much smaller amount of bonds to be sold .
The fact that the city will issue such a large amount of debt was interpreted as a sign that New York 's budgetary problems are more serious than had been expected .
New York , one of the nation 's largest issuers of tax-exempt bonds , sold $ 750 million of municipal bonds just a few weeks ago .
There have been reports for months that the city 's economy is weakening , as the October 1987 stock market crash continues to make itself felt .
The recent sharp stock market decline exacerbated those concerns .
Meanwhile , tax revenues are falling while the city 's spending needs are expanding .
Rumors persisted last week that New York 's credit ratings -- single-A from Moody 's Investors Service Inc. and single-A-minus from Standard & Poor 's Corp. -- are at risk .
The weakness in New York City bonds follows a warning from New York state Comptroller Edward Regan that the 1987 crash seriously weakened the city 's economy .
In a study , the comptroller said , `` The city 's glory days are over . ''
Mr. Regan warned mayoral candidates `` to be prepared for limited options and constraints on service increases to address the city 's problems in the next few years , due to the now-evident weakening in the New York City economy . ''
New York City 's revised financial plan , due out later this month , is expected to include measures to balance the city 's $ 27 billion budget .
At present , analysts project a budget gap on the order of $ 500 million to $ 600 million for the fiscal year ending June 30 , 1990 , although the city 's own budget analysts project a narrower deficit .
Mark Page , New York 's deputy director of finance , said that investors ' concerns about the city 's financial health are `` unwarranted given our proven ability to manage ourselves . ''
He charges the city 's critics with spreading `` unfounded emotional rhetoric . ''
There are also questions about whether a new and inexperienced mayor can manage the city through what could become a financial crisis .
The leading contender for the mayoral office , Democrat David Dinkins , has been criticized recently for the way he handled his personal financial affairs .
And the controversy has led to uncertainty about the outcome of the election .
Until last week , Mr. Dinkins was considered a shoo-in .
`` The market can adjust to good news or bad news , but uncertainty drives people wild , '' said Bernard B. Beal , chief executive of M.R. Beal & Co. , a securities firm that specializes in the municipal market .
Until last week , `` Everyone felt certain they knew the outcome of the election .
Now , there have been a number of questions raised . ''
Last week , yields on long-term New York City general obligation bonds jumped half a percentage point .
New York City 's 6 % bonds due 2018 , for example , were quoted late Friday at a price to yield 7.80 % , compared with 7.60 % Thursday .
As the yield on New York general obligation bonds rose , the Bond Buyer 20-bond general obligation index , the mostly widely followed gauge of the tax-exempt market , held steady at 7.19 % in the week ended Oct. 19 .
Qintex Australia Ltd. encountered another setback Friday when its Los Angeles-based affiliate , Qintex Entertainment Inc. , filed for protection under Chapter 11 of the U.S. Bankruptcy Code .
Qintex Entertainment also said David Evans , its president and chief executive , and Roger Kimmel , a director , both resigned .
Neither could be reached for comment .
Earlier this month , Qintex Australia 's $ 1.5 billion agreement to acquire Communications Co. collapsed because of a dispute over a $ 50 million letter of credit the Australian operator of television stations and resorts was to have supplied as security in the transaction .
Mr. Evans had been the de facto head of for months .
Qintex Entertainment , a producer and distributor of television programs most noted for its co-production of the hit miniseries `` Lonesome Dove , '' said it filed for Chapter 11 protection after Qintex Australia failed to provide it with $ 5.9 million owed to MCA Inc. in connection with the distribution of `` The New Leave It to Beaver Show . ''
Qintex Entertainment is 43 % owned by Qintex Australia and said it relies on the Australian company for funding its working capital requirements .
After the announcement of the bankruptcy filing , Qintex Entertainment stock sank $ 2.625 in over-the-counter trading to close at $ 1.50 on heavy volume of more than 1.4 million shares .
The stock traded as high as $ 10 this past summer .
Jonathan Lloyd , executive vice president and chief financial officer of Qintex Entertainment , said Qintex Entertainment was forced to file for protection to avoid going into default under its agreement with MCA .
The $ 5.9 million payment was due Oct. 1 and the deadline for default was Oct. 19 .
Mr. Lloyd said if Qintex had defaulted it could have been required to repay $ 92 million in debt under its loan agreements .
MCA on Friday said that as a result of Qintex 's failure to make the required payment it was terminating the distribution agreement on `` The New Leave It to Beaver '' as well as other MCA properties .
Qintex Australia was `` saying as recently as last weekend that they would take care of the situation .
They continued to represent that to the board , '' said Mr. Lloyd .
`` We were reassured they would stand behind the company . ''
Mr. Lloyd said both Qintex Entertainment and Qintex Australia had attempted to secure a loan that would allow the company to make the $ 5.9 million payment but the request was turned down by an unidentified lender on Oct. 14 .
At that point , he said , Qintex Australia stated it would `` endeavor to arrange '' the financing .
However a Qintex Australia spokesman said his firm had never `` promised or guaranteed '' to make the payment .
In a prepared statement from Australia , the company also said that , following the breakdown of the MGM talks , it `` had been re-evaluating its position as a significant shareholder and a substantial creditor of Qintex Entertainment '' and had `` resolved to minimize the degree of further loans to Qintex Entertainment in excess of that previously made . ''
The Qintex Australia spokesman added that his company had opposed the Chapter 11 filing .
He said the company believed Qintex Entertainment 's financial problems could have been resolved by other means .
The report of the bankruptcy filing stunned Hollywood executives and investors .
`` It 's a shocker , '' said Joseph Di Lillo , chairman of Drake Capital Securities , a brokerage firm that has an investment in Qintex Entertainment .
Qintex Australia was `` going to pay more than $ 1 billion for and then they could n't come up with the far smaller sum of $ 5.9 million . ''
Qintex said Mr. Evans , the former president , resigned for `` personal reasons '' and that Mr. Kimmel , an attorney , resigned because his participation in evaluating the company 's role in buying was no longer necessary .
Mr. Kimmel was a director of the company and a predecessor firm since 1980 .
The announcement seemed to further damp prospects that talks between Qintex Australia and might be revived .
It 's understood that recently contacted Rupert Murdoch 's News Corp. , which made two failed bids for the movie studio , to see if the company was still interested .
However , `` we are n't currently doing anything .
It is n't a current topic of conversation at the company , '' said Barry Diller , chairman and chief executive officer of the Fox Inc. unit of News Corp .
Financial printer Bowne & Co. said it formed a business translation service , which will provide legal , financial and other services in most major languages , including Japanese , Chinese and Russian .
Japan 's Finance Ministry strongly denied playing any role in the New York stock-price free fall .
Makoto Utsumi , vice minister for international affairs , said the ministry did n't in any way suggest to Japanese banks that they stay out of the UAL Corp. leveraged buy-out .
The ministry has never even suggested that Japanese banks be cautious about leveraged buy-outs in general , Mr. Utsumi said .
`` There are no facts -LCB- behind the assertions -RCB- that we sent any kind of signal , '' he declared in an interview .
The comments were the ministry 's first detailed public statement on the subject , and reflect the ministry 's concern that foreigners will think Japan is using its tremendous financial power to control events in foreign markets .
A number of accounts of the events leading to the 190 point drop in New York stock prices on Oct. 13 accused the ministry of pulling the plug on the UAL deal for one reason or another .
Mr. Utsumi said the most the ministry had ever done was ask Japanese banks about `` the status of their participation '' in one previous U.S. leveraged buy-out .
The ministry inquired about that deal -- which Mr. Utsumi declined to identify -- because the large presence of Japanese banks in the deal was `` being strongly criticized in the U.S. Congress '' and it was `` necessary for us to grasp the situation . ''
He said the inquiry was n't made in a way that the banks could have interpreted as either encouraging or discouraging participation , and he added that none of the Japanese banks changed their posture on the deal as a result of the inquiry .
Mr. Utsumi also said some Japanese banks were willing to participate in the UAL financing up to the very end , which would suggest at the very least that they were n't under orders to back out .
In general , Mr. Utsumi said , Japanese banks are becoming more `` independent '' in their approach to overseas deals .
`` Each Japanese bank has its own judgment on the profits and risks in that -LCB- UAL -RCB- deal , '' he said .
`` They are becoming more independent .
It 's a sound phenomenon . ''
Sanwa Bank Ltd. is one Japanese bank that decided not to participate in the first UAL proposal .
A Sanwa Bank spokesman denied that the finance ministry played any part in the bank 's decision .
`` We made our own decision , '' he said .
Still , Mr. Utsumi may have a hard time convincing market analysts who have rightly or wrongly believed that the ministry played a role in orchestrating recent moves by Japanese banks .
All week there has been much speculation in financial circles in Tokyo and abroad about the ministry 's real position .
Bank analysts say ministry officials have been growing increasingly concerned during the past few months about Japanese banks getting in over their heads .
`` The -LCB- ministry -RCB- thinks the banks do n't know what they are doing , that they have very little idea how to cope with risk , '' said one foreign bank analyst who asked not to be identified .
`` The -LCB- ministry -RCB- wants to see the Japanese banks pull in their horns '' on leveraged buy-outs , he added .
Although some of the Japanese banks involved in the first proposed bid for UAL bowed out because they found the terms unattractive , observers here say they have a hard time believing that commercial considerations were the only reason .
Japanese banks are under `` political pressure '' as well , the analyst said .
Moreover , analysts point out that Japanese banks have a reputation for doing deals that are n't extremely profitable if they offer the chance to build market share , cement an important business relationship or curry favor with powerful bureaucrats .
Clearly , some financial authorities are concerned about the Japanese banks role in leveraged buy-outs .
At a news conference this week , Bank of Japan Gov. Satoshi Sumita cautioned banks to take a `` prudent '' stance regarding highly leveraged deals .
Despite Mr. Sumita 's statements , it is the Finance Ministry , not the central bank , that makes policy decisions .
While recent events may cool some of the leveraged buy-out fever , Japanese banks are n't likely to walk away from the game .
Despite the risks , the deals can be an attractive way for Japanese banks to increase their presence in the U.S. market , bank analysts say .
Flush with cash at home , but with fewer customers to lend to , leading banks are eager to expand overseas .
Jumping in on big deals is a high profile way to leapfrog the problem of not having a strong retail-banking network .
France 's national tobacco company , known for making brown-tobacco cigarettes such as Gauloises and Gitanes , is branching out .
Concerned by dipping demand for its traditional products , it is moving not only into blonde cigarettes , but also into electronic car-parking payment cards to be sold in neighborhood tobacco stores .
Brown tobacco in France is a more pungent , stronger grade than the lighter grade , or blonde tobacco , used in so-called American-style cigarettes .
`` We are n't Philip Morris Cos. , '' says Bertrand de Galle , chairman of government-owned Societe Nationale d'Exploitation Industrielle des Tabacs & Allumettes S.A. , known as Seita .
He says that because Seita 's profits are limited by government-controlled cigarette prices , he does n't have the cash to diversify as heavily into food and drink as the U.S. concern has done .
-LRB- Last year , for example , Seita 's net profit soared 150 % to 461.6 million French francs -LRB- $ 73.5 million -RRB- on sales of FFr27.68 billion-a 1.7 % profit margin . -RRB-
Instead , he said in an interview , he is looking for ways to exploit France 's network of 39,000 tobacco agents , most of them cafes .
While Seita does n't own the French tabacs , its close alliance with them offers distribution possibilities .
One proposal is to introduce a new payment system for parking in Paris .
Instead of paying for parking by putting money in the existing machines , which deliver little paper receipts , drivers would be able to buy electronic cards in local tobacco shops .
Once activated , the card would sit in the car 's window , showing traffic wardens how much time the motorist could remain .
When the motorist returned to his car he could turn the card off and , if it showed time remaining , save it for later .
Seita is a partner in the project , which was developed by Matra SA using Japanese technology .
Seita and Matra currently are negotiating with city officials for the right to begin service .
And Seita is considering further diversification .
It wanted to buy RJR Nabisco Inc. 's French cracker subsidiary , Belin , in hopes of selling its products in tobacco stores , but lost the bidding to food group BSN SA .
It currently is considering bidding for Swedish Match Co .
And it retains an interest in acquiring candies and other articles that might be sold in tobacco shops .
It also is trying to shore up its tobacco business .
Brown-tobacco cigarettes such as Gauloises now make up just 40 % of the French tobacco market , half the level of about two decades ago .
While Seita retains a manufacturing monopoly in France , it is being hurt by rising imports and from waning cigarette demand .
So Seita has introduced blonde cigarettes under the Gauloises label , and intends to relaunch the unsuccessful Gitanes Blondes in new packaging , similar to the slide-packs used by brown-tobacco Gitanes .
The aim , says Mr. de Galle , is to win market share from imported cigarettes , and to persuade smokers who are switching to blonde cigarettes to keep buying French .
When the Supreme Court upheld Missouri 's abortion restrictions last July , the justices almost certainly did n't have drunk driving , trespassing and false imprisonment on their minds .
But the 5-4 ruling may have had as much immediate impact on those activities -- especially trespassing -- as on abortion rights .
The decision , Webster vs. Reproductive Health Services , illustrates how Supreme Court rulings often have a ripple effect , spreading into areas of law and policy that were n't part of the actual cases decided and that never were contemplated by the justices .
In the Missouri case , unforeseen consequences may have arisen because the high court reinstated the preamble of the state 's 1986 abortion law .
The preamble says that human life begins at conception and that unborn children have rights protected by the Constitution .
Last year , a federal appeals court in St. Louis said the preamble was unconstitutional , citing an earlier Supreme Court ruling that states ca n't justify stricter abortion curbs by changing the definition of when life begins .
But the Supreme Court concluded that it was premature to rule on the constitutionality of the preamble because the definition of human life had n't yet been used to restrict abortion services .
The high court majority said it was up to the state courts for now to decide whether the definition has any bearing on other state laws .
Already , local Missouri judges have relied on the restored preamble in two separate cases to throw out criminal trespass charges against anti-abortion demonstrators who blocked access to Reproductive Health Services , an abortion clinic in St. Louis .
The protesters said their actions were justified by the desire to save the lives of unborn children .
Under a 1981 Missouri law , persons accused of some crimes , including trespassing , may offer a defense that their actions were justified `` as an emergency measure to avoid an imminent public or private injury . ''
Relying on the preamble 's statement that a fetus is an unborn child , the two St. Louis County Circuit Court judges in August accepted the justification that the abortion clinic protesters were trying to save lives .
In another case , a protester , Ann O'Brien , was convicted of trespass before the Supreme Court 's Webster ruling .
Last week , when her appeal was argued before the Missouri Court of Appeals , her lawyer also relied on the preamble .
`` The effect of the Supreme Court Webster opinion is that it left room for grass to grow in the cracks of Roe vs. Wade , and I think this is one of the cracks , '' said Mark Belz , a St. Louis lawyer who represented Ms. O'Brien and the other St. Louis protesters .
Roe vs. Wade was the Supreme Court 's 1973 decision that recognized a woman 's right to abortion .
Mario Mandina , president of Kansas City Lawyers for Life , says that if abortion foes succeed in using the preamble to escape prosecution for trespass , `` This will shut down abortion in Missouri .
There 's no risk to the protesters , and you ca n't keep an abortion clinic open if there are 3,000 people standing outside every day . ''
That would be an ironic result of a case in which the Supreme Court expressly stopped short of overruling Roe vs. Wade .
In two other cases , the possible consequences of the Supreme Court ruling appear even more unintended .
In one , the lawyer for a 20-year-old resident of Columbia , Mo. , who was charged with drunk driving , argued that his client should be treated as a 21-year-old adult because his actual age should be calculated from conception , not from birth .
In Missouri , those caught drinking and driving between the ages of 16 and 21 may have their licenses revoked for one year , while those 21 or older suffer only a 30-day suspension .
A Boone County judge rejected the motion , but Daniel Dodson , a Jefferson City lawyer , says he has appealed .
And in a case filed in federal court in August , a lawyer is arguing that Missouri authorities are wrongfully imprisoning the fetus of a pregnant woman who is in jail for theft and forgery .
In terms of sheer brutality , the Somali regime of Siad Barre may rank as No. 1 in the world .
The only reason that Somalia remains in obscurity is numbers : a sparsely populated wasteland of 8.5 million people spread out over an expanse nearly the size of Texas .
The Barre dictatorship simply is limited in the amount of people it can torture and kill .
Beheading small children , stabbing elderly people to death , raping and shooting women , and burying people alive are just a few of the grisly activities that the Somali armed forces have been engaged in over the past two years .
Up to 500,000 Somalis have escaped to the relative safety of Marxist Ethiopia because of the behavior of President Barre 's troops .
In the port of Berbera , for example , hundreds of men of the rival Issak clan were rounded up in May 1988 , imprisoned , and then taken out at night in groups of five to 50 men to be executed without any judicial process whatsoever .
Guns were never used : Each man was stabbed to death with a large knife .
The horrific details are only now emerging from a painstakingly documented report , based on hundreds of interviews with randomly selected refugees .
The study was done by Robert Gersony , a consultant to the U.S. State Department who has years of experience in investigating human-rights abuses on both sides of the left-right ideological divide .
What gives these events particular significance , however , is the fact that they are part of a wider drama affecting the strategic positions of both the U.S. and the Soviet Union on the horn of Africa .
Not since the late 1970s has the horn been so up for grabs as it has suddenly become in just the past few weeks .
Mr. Barre 's rule is crumbling fast .
Mutinies wrack his armed forces -LRB- really just an armed gang -RRB- , which control less than half the country .
Inflation is at record levels .
Desperate , he has called in the Libyans to help fight the rebels of the Somali National Movement in the north , which is only one of several groups picking away at the regime in the capital of Mogadishu .
Seventy years old and a self-declared `` scientific socialist , '' President Barre has a power base , composed only of his minority Mareham clan , that according to observers is `` narrowing . ''
The U.S. 's interest in Somalia consists of a single runway at the port of Berbera , which U.S. military aircraft have the right to use for surveillance of the Gulf of Aden and the Indian Ocean .
That strip of concrete is backed up by a few one-story , air-conditioned shacks where a handful of American nationals -- buttressed by imported food , cold soft drinks and back issues of Sports Illustrated -- maintain radio contact with the outside world .
In the past two years , the desert behind them has become a land of mass executions and utter anarchy , where , due to Mr. Barre 's brutality and ineptitude , nobody is any longer in control .
As long as the rival Soviet-backed regime of Mengistu Haile Mariam held a total gridlock over neighboring Ethiopia , the U.S. was forced to accept that lonely Berbera runway as a distant No. 2 to the Soviets ' array of airfields next door .
But due to dramatic events on the battlefield over the past few days and weeks , those Soviet bases may soon be as endangered and as lonely as the American runway .
On Sept. 7 , I wrote on these pages about the killing and capturing of 10,000 Ethiopian soldiers by Eritrean and Tigrean guerrillas .
Recently , in Wollo province in the center of Ethiopia , Tigrean forces have killed , wounded and captured an additional 20,000 government troops .
-LRB- Think what these numbers mean -- considering the headline space devoted to hundreds of deaths in Lebanon , a small country of little strategic importance -RRB-
Tigrean armies are now 200 miles north of Addis Ababa , threatening the town of Dese , which would cut off Mr. Mengistu 's capital from the port of Assab , through which all fuel and other supplies reach Addis Ababa .
As a result , Mr. Mengistu has been forced to transfer thousands of troops from Eritrea just to hold the town , thereby risking the loss of even more territory in Eritrea only to keep the Tigreans at bay .
Mr. Mengistu is in an increasingly weak position : Half his army is tied down defending the northern city of Asmara from the Eritreans .
The weaker he gets , the more he turns toward the U.S. for help .
While the Tigreans are communists , like the Eritreans they are among the most anti-Soviet guerrillas in the world , having suffered more than a decade of aerial bombardment by the Soviet-supplied Mengistu air force .
What this all means in shorthand is that Soviet dominance in Ethiopia is collapsing as fast as President Barre 's regime in Somalia is .
The U.S. , therefore , has a historic opportunity both to strike a blow for human rights in Somalia and to undo the superpower flip-flop of the late 1970s on the Horn of Africa .
Back to Somalia : The State Department , to its credit , has already begun distancing itself from Mr. Barre , evinced by its decision to publish the Gersony report -LRB- which the press has ignored -RRB-
What 's more , the U.S. has suspended $ 2.5 million in military aid and $ 1 million in economic aid .
But this is not enough .
Because the U.S. is still perceived to be tied to Mr. Barre , when he goes the runway could go too .
Considering how tenuous the security of that runway is anyway , the better option -- both morally and strategically -- would be for the Bush administration to blast the regime publicly , in terms clear enough for all influential Somalis to understand .
It is a certainty that Mr. Barre 's days are numbered .
The U.S. should take care , however , that its own position in the country does not go down with him .
Nobody is sure what will come next in Somalia or whom the successor might be .
But as one expert tells me : `` Whoever it is will have to work pretty damn hard to be worse than Barre . ''
While the State Department positions itself for the post-Barre period in Somalia , it should continue to back former President Carter 's well-intentioned role as a mediator between Mr. Mengistu and the Eritrean guerrillas in Ethiopia , while concomitantly opening up channels of communications with the Tigrean rebels through neighboring Sudan .
Ethiopian politics are the most sophisticated , secretive and Byzantine in all of black Africa .
Remember that it took Mr. Mengistu many months , in what became known as the `` creeping coup , '' to topple Emperor Haile Selassie in 1974 and 1975 .
There is simply no way to engineer a succession covertly , as is sometimes possible elsewhere on the continent .
But the U.S. has one great advantage : The Soviets are universally loathed throughout Ethiopia for what they did to the country this past decade -- famine and all .
It 's not just in Eastern Europe where the march of events is finally on the U.S. side , but on the horn of Africa as well .
The only U.S. liability in the region is what remains of the link to Mr. Barre , and that should be cut fast .
Mr. Kaplan , author of `` Surrender or Starve : The Wars Behind the Famine '' -LRB- Westview Press , 1988 -RRB- , lives in Lisbon .
Translant Inc. , Rancho Cucamonga , Calif. , got an $ 86 million Navy contract for missile-launch systems .
General Electric Co. received a $ 30.6 million Air Force contract for MX-missile nose cones .
Goodyear Tire & Rubber Co. was awarded a $ 19.1 million Army contract for armored-vehicle parts .
Analytic Sciences Corp. was awarded a $ 10.1 million Air Force contract for technical support .
McCormick Capital Inc. said the final proration factor was 0.628394 on its oversubscribed , $ 3-a-share tender offer to buy back as many as 1.1 million of its common shares .
Payment will begin `` as soon as Oct. 25 , '' the company said .
McCormick is a developer and manager of futures-investment limited partnerships .
Through a separate agreement between Peter Dauchy , president , and a group of selling shareholders , the company said , Mr. Dauchy will on Oct. 30 buy 231,405 shares from the group , boosting his stake to about 717,000 shares , or 50.7 % of the total after the buy-back .
Canada 's consumer price index rose a seasonally adjusted 0.2 % in September from August , Statistics Canada , a federal agency , said .
The rise followed boosts of 0.1 % in August , 0.7 % in July and 0.6 % in June .
OPEC 's ability to produce more petroleum than it can sell is beginning to cast a shadow over world oil markets .
Output from the Organization of Petroleum Exporting Countries is already at a high for the year and most member nations are running flat out .
But industry and OPEC officials agree that a handful of members still have enough unused capacity to glut the market and cause an oil-price collapse a few months from now if OPEC does n't soon adopt a new quota system to corral its chronic cheaters .
As a result , the effort by some oil ministers to get OPEC to approve a new permanent production-sharing agreement next month is taking on increasing urgency .
The organization is scheduled to meet in Vienna beginning Nov. 25 .
So far this year , rising demand for OPEC oil and production restraint by some members have kept prices firm despite rampant cheating by others .
But that could change if demand for OPEC 's oil softens seasonally early next year as some think may happen .
OPEC is currently producing more than 22 million barrels a day , sharply above its nominal , self-imposed fourth-quarter ceiling of 20.5 million , according to OPEC and industry officials at an oil conference here sponsored by the Oil Daily and the International Herald Tribune .
At that rate , a majority of OPEC 's 13 members have reached their output limits , they said .
But it is estimated that at least three million barrels a day -- and possibly as much as seven million barrels a day -- of spare capacity still exists within OPEC .
Most is concentrated in five Persian Gulf countries , including his own , Issam Al-Chalabi , Iraq 's oil minister , told the conference Friday .
He puts OPEC 's current capacity at 28 million to 29 million barrels a day .
That 's higher than some other estimates .
Ali Khalifa Al-Sabah , Kuwait 's oil minister , recently estimated OPEC capacity at 25 million barrels a day .
Either way , the overhang is big enough to keep delicately balanced oil markets on edge .
Even modest amounts of additional output by those with the huge extra capacity and reserves , such as Saudi Arabia and Iraq , could upset the market .
The Iraqi oil minister and Saudi oil minister Hisham Nazer insisted in their comments to the conference that their countries would act responsibly to maintain a stable market .
However , in interviews later , both ministers stressed that they expect future OPEC quotas to be based mainly on the production capacity and reserves of each member .
Under that approach , countries with the most unused oil capacity would get bigger shares of any future increases in OPEC 's production ceiling than they would under the current system .
`` If you are already producing at 95 % or 100 % of your capacity , what 's the good to be told you can produce at 105 % of capacity ? '' asked Mr. Al-Chalabi .
At an inconclusive Geneva meeting late last month , OPEC 's oil ministers halfheartedly approved another increase of one million barrels a day in their production ceiling .
They doled it out using the existing formula , however , which meant that even those countries that could n't produce more received higher official allotments .
The main effect of the ceiling boost was to `` legitimize '' some of the overproduction already coming from the quota cheaters .
Still , there was a breakthrough at Geneva .
Previously , no OPEC member had been willing to accept a reduction in its percentage share of the group 's total output target , or ceiling .
But the concept of disproportionate quotas for those with unused capacity , advanced there in an Iranian proposal , was generally endorsed by the ministers .
In the end politics got in the way .
Libya accepted Iran 's proposal only so long as it was promised production parity with Kuwait .
And the United Arab Emirates , a chronic quota cheater , refused to give any guarantee it would change its ways .
But the oil ministers continue to study the plan , and it will probably be the basis for discussion at next month 's meeting .
It 's understood several compromises already have been worked into the plan .
The ceiling would be lifted to 21.5 million barrels to provide Kuwait and the United Arab Emirates much higher official quotas while reducing percentage shares of some others .
Libya 's previous conditions are no longer considered a problem , although the United Arab Emirates is still an issue .
Saudi Arabia , OPEC 's kingpin , also has surfaced as a possible obstacle , some OPEC sources said .
Insisting on a 24.5 % share of any ceiling , Saudi officials have long pressed for the pro rata distribution of increases to all members .
In Geneva , however , they supported Iran 's proposal because it would have left the Saudi percentage of the OPEC total intact , and increased actual Saudi volume to nearly 5.3 million barrels daily from five million .
Some of the proposed modifications since , however , call on Saudi Arabia to `` give back '' to the production-sharing pool a token 23,000 barrels .
Though tiny , that 's a reduction in its share .
Mr. Nazer , the Saudi oil minister , reiterated here that the kingdom would insist on maintaining its percentage share of OPEC production under any quota revisions .
`` Under any circumstances , Saudi Arabia should get more '' rather than less , Mr. Nazer said .
In a blow to France 's Rafale jet fighter , the French navy for the first time publicly stated its desire to buy 15 McDonnell Douglas Corp. F-18 Hornets to defend its aircraft carriers .
The statement is likely to sharpen the debate within France 's military establishment over the Rafale , which is made by Avions Marcel Dassault-Breguet Aviation SA .
In an interview in the navy 's official weekly magazine Cols Bleus , the navy 's second-in-command , Adm. Yves Goupil , said the navy still intends to buy 86 Rafales as scheduled in the late 1990s and early 21st century .
The air force is to take at least 250 more .
Adm. Goupil said the navy ca n't wait until 1998 , when the naval Rafale becomes available , to replace its obsolete fleet of American-made Crusaders , used since the 1950s to protect carriers from attack .
Rather than renovate the Crusaders , which Dassault is proposing to do for around 1.8 billion French francs -LRB- $ 286.6 million -RRB- , Adm. Goupil said the navy wants to buy used F-18s from the U.S. Navy .
Officially , the statement is n't an attack on the Rafale .
Adm. Goupil said that when the F-18s wear out , the navy is prepared to take Rafales to replace them .
But unofficially , senior navy officials sharply criticize the Rafale as an air force plane ill-suited to carrier use .
Although they never said so publicly , they have made no secret of their preference for the F-18 on operational grounds .
Adm. Goupil 's comments are likely to inflame the broader dispute within the military establishment here over the role of Dassault .
Although government-controlled , Dassault still is run by the founder 's son , Chairman Serge Dassault , who has fiercely protected his company 's independence .
The Rafale project is the result of France 's inability jointly to develop a plane with other countries , and French officials question whether the state can continue paying for expensive independent programs .
So far , Mr. Dassault has resisted pressure to change .
What brought the naval issue to a head is that the Crusaders are literally falling apart , without any immediate plan to replace them .
Adm. Goupil , a former Crusader squadron leader , said that the last other country to use Crusaders , the Philippines , retired its last ones two years ago .
A French Crusader crash a few months ago heightened pressure for new planes here .
Adm. Goupil rejected Dassault 's proposal to renovate the Crusaders , saying the cost was impossible to estimate .
Even modernized , he said , the Crusaders represent an obsolete and dangerous protection for the aircraft carriers France has sent to meet such crises as the wars in Lebanon and the Persian Gulf .
Defense Minister Jean-Pierre Chevenement told a meeting of the Anglo-American Press Association that the question of modernizing the Crusaders or buying used F18s is a `` political '' decision that he will make in due time .
THE SUPREME COURT ruling upholding Missouri 's restrictive abortion law was Webster vs. Reproductive Health Services .
The citation was misstated in Friday 's edition .
Spending by average Japanese households in August fell an adjusted 1.9 % from a year earlier , the Statistics Bureau of the Prime Minister 's Office said .
The bureau cited typhoons in the month that discouraged shopping and leisure opportunities .
Spending by Japanese households averaged 290,782 yen -LRB- $ 2,052.10 -RRB- in August .
In nominal terms it rose 0.6 % from a year earlier before adjustment .
August adjusted spending by wage-earning families was down 0.6 % to 309,381 yen from a year earlier .
The real income of wage-earning families in the month eased 1.2 % to 438,845 yen from the previous year .
For Cathay Pacific Airways , the smooth ride may be ending .
The first signs of trouble came last month when the Hong Kong carrier , a subsidiary of Swire Pacific Ltd. , posted a 5 % drop in operating profit for the first six months and warned that margins will remain under pressure for the rest of the year .
Securities analysts , many of whom scrapped their buy recommendations after seeing Cathay 's interim figures , believe more jolts lie ahead .
Fuel and personnel costs are rising , and tourism in and through Hong Kong remains clouded by China 's turmoil since the June 4 killings in Beijing .
In addition , delivery delays for the first two of as many as 28 Boeing 747-400s that the carrier has ordered have raised costs because personnel had been hired to man the planes .
And tough competition in the air-freight market is cutting into an important sideline .
There also is concern that once Hong Kong reverts to China 's sovereignty in 1997 , Cathay will be forced to play second fiddle to China 's often-disparaged flag carrier , Civil Aviation Administration of China , or CAAC .
`` The sense is we would never be in a position again where everything works for us the way it did before , '' says Rod Eddington , Cathay 's commercial director .
Sarah Hall , an analyst at James Capel -LRB- Far East -RRB- Ltd. , says there is n't much Cathay can do about rising costs for jet fuel , Hong Kong 's tight labor market , or the strengthening of the local currency , which is pegged to the U.S. dollar .
These factors are further complicated by the airline 's push to transform itself from a regional carrier to an international one , Ms. Hall says .
Ms. Hall expects Cathay 's profit to grow around 13 % annually this year and next .
In 1988 , it earned $ 2.82 billion Hong Kong -LRB- US$ 361.5 million -RRB- on revenue of HK$ 11.79 billion .
Cathay is taking several steps to bolster business .
One step is to beef up its fleet .
In addition to aircraft from Boeing Co. , Cathay announced earlier this year an order for as many as 20 Airbus A330-300s .
The expansion , which could cost as much as US$ 5.7 billion over the next eight years , will expand the fleet to about 43 planes by 1991 , up from 30 at the end of last year , according to Sun Hung Kai Securities Ltd .
The fuel-efficient Airbus planes will be used largely to replace Cathay 's aging fleet of Lockheed Tristars for regional flights , while the Boeing aircraft will be used on long-haul routes to Europe and North America .
Cathay also is moving some of its labor-intensive data-processing operations outside Hong Kong .
Fierce bidding for young employees in Hong Kong is pushing up Cathay 's labor costs by 20 % a year for low-level staff , while experienced , skilled employees are leaving the colony as part of the brain drain .
Some jobs already have been moved to Australia , and there are plans to place others in Canada .
David Bell , a spokesman for the airline , says the move is partly aimed at retaining existing staff who are leaving to secure foreign passports ahead of 1997 .
Cathay is working to promote Hong Kong as a destination worth visiting on its own merits , rather than just a stopover .
Although the June 4 killings in Beijing have hurt its China flights , Cathay 's other routes have retained high load factors .
Mr. Eddington regards promoting Hong Kong as an important part of attracting visitors from Japan , South Korea and Taiwan , where the number of people looking to travel abroad has surged .
There also has been speculation that Cathay will be among the major private-sector participants in the Hong Kong government 's plans to build a new airport , with the carrier possibly investing in its own terminal .
Cathay officials decline to comment on the speculation .
Mr. Eddington sees alliances with other carriers -- particularly Cathay 's recent link with AMR Corp. 's American Airlines -- as an important part of Cathay 's strategy .
But he emphasizes that Cathay has n't any interest in swapping equity stakes with the U.S. carrier or with Lufthansa , the West German airline with which it has cooperated for about a decade .
Analysts believe Cathay is approached for such swaps by other carriers on a regular basis , particularly as the popularity of share exchanges has grown among European carriers .
`` We think alliances are very important , '' Mr. Eddington says .
`` But we 'd rather put funds into our own business rather than someone else 's .
I 'm not sure cross-ownership would necessarily make things smoother . ''
In a pattern it aims to copy in several key U.S. destinations , Cathay recently announced plans to serve San Francisco by flying into American Airlines ' Los Angeles hub and routing continuing passengers onto a flight on the U.S. carrier .
`` We 'll never have a big operation in the U.S. , and they 'll never have one as big as us in the Pacific , '' Mr. Eddington says .
`` But this way , American will coordinate good extensions to Boston , New York , Chicago and Dallas .
We 'll coordinate on this end to places like Bangkok , Singapore and Manila . ''
Asian traffic , which currently accounts for 65 % of Cathay 's business , is expected to continue as the carrier 's mainstay .
Cathay has long stated its desire to double its weekly flights into China to 14 , and it is applying to restart long-canceled flights into Vietnam .
Further expansion into southern Europe is also possible , says Mr. Bell , the spokesman .
While a large number of Hong Kong companies have reincorporated offshore ahead of 1997 , such a move is n't an option for Cathay because it would jeopardize its landing rights in Hong Kong .
And Mr. Eddington emphatically rules out a move to London : `` Our lifeblood is Hong Kong traffic rights . ''
He says the airline is putting its faith in the Sino-British agreement on Hong Kong 's return to China .
A special section dealing with aviation rights states that landing rights for Hong Kong 's airlines , which include the smaller Hong Kong Dragon Airlines , will continue to be negotiated by Hong Kong 's government .
But critics fret that post-1997 officials ultimately will be responsible to Beijing .
`` My feeling is -LCB- Cathay does n't -RCB- have a hope in the long run , '' says an analyst , who declines to be identified .
Cathay would love to keep going , but the general sense is they 're going to have to do something . ''
Mr. Eddington acknowledges that the carrier will have to evolve and adapt to local changes , but he feels that the Sino-British agreement is firm ground to build on for the foreseeable future .
`` We 're confident that it protects our route structure , '' he says , `` and our ability to grow and prosper .
Falcon Cable Systems Co. said it proposed an amendment that would allow it to increase its debt cap to 65 % of the company 's fair market value from the 40 % currently allowed .
Falcon , a limited partnership , said it wanted the increase in order to continue its $ 2.15-per-unit annual payment , and for expansion and acquisitions .
A spokesman for the company said a meeting would be held for shareholders to vote on the amendment before year 's end .
Friday , October 20 , 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 % 15 to 44 days ; 8.25 % 45 to 72 days ; 8.375 % 73 to 96 days ; 8.125 % 97 to 119 days ; 8 % 120 to 149 days ; 7.875 % 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 : 8.55 % 30 days ; 8.45 % 60 days ; 8.40 % 90 days .
CERTIFICATES OF DEPOSIT : 8.05 % one month ; 8.02 % two months ; 8 % three months ; 7.98 % six months ; 7.95 % 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 : 8.55 % one month ; 8.50 % three months ; 8.40 % six months .
BANKERS ACCEPTANCES : 8.45 % 30 days ; 8.33 % 60 days ; 8.32 % 90 days ; 8.15 % 120 days ; 8.06 % 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 8.50 % ; Japan 4.875 % ; Switzerland 8.50 % ; Britain 15 % .
These rate indications are n't directly comparable ; lending practices vary widely by location .
TREASURY BILLS : Results of the Monday , October 16 , 1989 , auction of short-term U.S. government bills , sold at a discount from face value in units of $ 10,000 to $ 1 million : 7.37 % 13 weeks ; 7.42 % 26 weeks .
FEDERAL HOME LOAN MORTGAGE CORP . -LRB- Freddie Mac -RRB- : Posted yields on 30-year mortgage commitments for delivery within 30 days. 9.84 % , 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 -RRB- 9.78 % , standard conventional fixed-rate mortgages ; 8.75 % , rate capped one-year adjustable rate mortgages .
Source : Telerate Systems Inc .
MERRILL LYNCH READY ASSETS TRUST : 8.52 % .
Annualized average rate of return after expenses for the past 30 days ; not a forecast of future returns .
In the hard-hit Marina neighborhood , life after the earthquake is often all too real , but sometimes surreal .
Some scenes : -- Saturday morning , a resident was given 15 minutes to scurry into a sagging building and reclaim what she could of her life 's possessions
Saturday night she dined in an emergency shelter on salmon steaks prepared by chefs from one of the city 's four-star restaurants .
-- Mayor Art Agnos stands in the glare of television lights trying to explain for the 20th time why the city is severely restricting access to badly damaged structures .
A couple in fashionable spandex warm-up suits jogs by , headphones jauntily in place , weaving their way along a street of fractured and fallen houses .
At a nearby corner , they swerve perilously close to a listing apartment house , oblivious to any danger .
A policeman shakes his head in amazement as he steers them away .
-- A young woman who has been out of town shows up at the Marina Middle School to learn that her apartment is on the condemned list .
She is told she ca n't enter unless she is accompanied by an inspector .
She bursts into tears and walks away .
Nearby , five temporary residents of the school shelter sit on stools , having their necks and backs kneaded by volunteer masseuses .
The Marina rescue center offered a very San Franciscan response to the disaster .
In addition to free massages , there was free counseling , phone calls and a free shuttle bus to a health club , which offered up its showers , saunas and hot tubs .
The cafeteria offered donated croissants and brie for breakfast , and for dinner , pasta salad and chocolate mousse torts along with the salmon .
`` This has been a 15-pound earthquake for me , '' said resident Joan O'Shea , who works in an acupuncturist 's office .
She and some friends are considering offering earthquake victims free yoga classes and `` aroma therapy '' -- massages with scented oils .
She finds the response of Marina residents -- primarily yuppies and elderly people -- to the devastation of their homes `` incredible .
People have been very respectful of each other .
I do n't know if this would have happened somewhere else . ''
Out on the streets , some residents of badly damaged buildings were allowed a 15-minute scavenger hunt through their possessions .
`` It 's so weird to have to decide what 's really important to you , '' said Barbara May .
She went first for personal mementos .
In post-earthquake parlance , her building is a `` red . ''
After being inspected , buildings with substantial damage were color-coded .
Green allowed residents to re-enter ; yellow allowed limited access ; red allowed residents one last entry to gather everything they could within 15 minutes .
Reds and yellows went about their business with a kind of measured grimness .
Some frantically dumped belongings into pillowcases , others threw goods out windows .
It did n't help that on Saturday , after three days of sunshine , it rained .
`` The guys are going for their skis , their stereos , their personal computers , '' said Frank Fitzgerald , who helped others empty their apartments .
`` The women wanted photo albums , a certain brooch , kind of sentimental things . ''
He showed an unbroken , still-ticking pocket watch that he retrieved for one woman .
It belonged to her grandfather .
Some residents defied orders and returned to `` red '' buildings to retrieve goods .
One building was upgraded to red status while people were taking things out , and a resident who was n't allowed to go back inside called up the stairs to his girlfriend , telling her to keep sending things down to the lobby .
A policewoman had to be called in to make her leave ; the policewoman helped carry out one last load .
Enforcement of restricted-entry rules was sporadic , residents said .
One man trying to remove his car was told by officials to get out of his garage .
When he sneaked back later to try again , a different policeman offered to help him get the car out .
The Marina also has become the focal point of city efforts to reunite residents with any pets that may have fled or become lost during the earthquake .
On lampposts along Fillmore Street , a major Marina artery , posters were offering a $ 100 reward for a cat lost during the quake .
The San Francisco Society for the Prevention of Cruelty to Animals also has been providing medical care , food , water and foster homes for quake-displaced animals .
The SPCA says it has received more than 100 requests for foster homes on behalf of dogs and cats , though some people have sought temporary homes for birds and fish .
For example , one parakeet owner returning home found that her apartment , like many others in the Marina , did n't have heat .
`` She can stay there with no heat , but for a parakeet , that can be deadly , '' says Daralee Konowitch , animalcare services manager for the SPCA .
A warm foster home has been found .
The neighborhood around Alexander Haagen Co. 's Vermont-Slauson Shopping Center in the Watts section of Los Angeles resembles the crime-ridden , deteriorating sections of many inner cities and certainly is n't the sort of area one would choose to visit .
But turn into the shopping center 's parking lot , and one could be in the safe , busy mall of a prosperous suburb .
Only it is safer , and busier .
Over the past year there have been only one burglary , three thefts of or from autos , no purse-snatchings , and one attempted robbery in the mall , which opened in late 1981 .
A shopping center of similar size in an affluent Los Angeles suburb would , per year , be expected to have eight burglaries , 70 thefts of or from autos , and four robberies .
The Watts mall has annual sales of more than $ 350 per leasable square foot ; the figure for a comparable suburban shopping center would be $ 200 .
Three other Haagen shopping centers in the Watts area are doing almost as well .
A successful low-crime mall in a high-crime area violates the more typical inner-city pattern , in which commercial areas are taken over by unruly youth , gangs , and the criminal element , with an erosion of the customer base , development capital , and insurability .
Major regional and national chain stores are replaced by mom-and-pop operations offering poorer-quality merchandise at higher prices .
Along with the exodus of shopping opportunities is an exodus of the jobs that the major chains used to provide to community residents .
Thus there is even more to the Vermont-Slauson Center than a good place to shop .
This defensible commercial zone becomes , for the residents , a secure oasis in a barren urban landscape , evidence that community decay is not inevitable and that the gangs are not invincible .
The center improves the community image to outsiders as well , and may help to arrest , or even reverse , the exodus of capital and investment .
An additional benefit is the creation of jobs .
This starts in the construction phase through the use of minority contractors and local workers .
It continues through the life of the center ; the Vermont-Slauson Center has created 500 permanent private-sector jobs at a one-time cost in public funds of only $ 2,500 per job .
As many of these jobs are filled by local residents , who move from the welfare rolls to the tax rolls , the $ 2,500-per-job public investment should repay itself in a few years .
And that is before consideration of increased state and local revenues from taxes and fees on sales , real estate , licenses and the like .
Profits are also plowed back into the community ; the non-profit Vermont-Slauson Economic Development Corp. receives 60 % of the profits from the Vermont-Slauson Center and uses the money to provide moderate and low-cost housing in the community -- now running into the hundreds of units -- as well as commercial and industrial development projects .
Bradford Crowe , director of the mayor 's City Economic Development Office , says : `` There is no question that Vermont-Slauson had a halo effect on the surrounding neighborhood .
What had been a deteriorated area with nothing but wig shops and shoe shops is now experiencing a major upgrading in the housing and commercial stock , thanks to a continuously replenished source of revitalization capital that Vermont-Slauson yields . ''
Another benefit is that substantial percentages of the proprietors in these centers are minority businessmen and women .
In the Grand Boulevard Plaza developed by Matanky Realty Group in Chicago 's Third Ward , opposite the Robert Taylor Homes , 29 % of the stores to date have been leased to blacks and 14 % to members of other minority groups .
Children from the community will have worthier role models than the drug kingpins .
So what 's the catch ?
Primarily that putting one of these inner-city deals together takes time , patience , breadth of vision and negotiating skills that not all developers possess .
Security costs are also quite high .
One of these centers can involve years of negotiating with numerous public agencies , local political leaders , and citizen groups , and with prospective tenants and sources of financing .
Suburban deals are not without their delays and complications -- inner-city deals just have more of them .
Security at a typical Haagen inner-city center is impressive , but unobtrusive .
The entire site is enclosed by a 6-to-8-foot-high ornamental iron fence with a small number of remote-controlled gates .
Shrubs and flowers give it a pleasing and non-fortress-like appearance .
Infrared motion detectors and closed-circuit TV cameras monitor the entire center ; lighting levels are three to five times the industry standard .
The security command post , camouflaged as second-story retail space , has its own `` crow 's nest '' above the roofs of the other buildings , with a panoramic view of the entire center .
Local law enforcement is present in a sub-station occupying space donated by the center .
These features are also used in Matanky Realty Group 's Grand Boulevard Plaza .
Haagen has its own large security force of well-trained and well-paid personnel on round-the-clock duty at each center .
Security is 60 % to 70 % of the common area charges of these centers , vs. an industry average of about 15 % .
These security costs are kept off-budget because the centers ' site acquisition , construction , and financing costs were reduced by such programs as Urban Development Action Grants , Economic Development Administration Grants , Community Development Block Grants , tax-free Industrial Development Bonds , Enterprise Zone tax write-offs , city infrastructure grants , and tax increment financing .
Many of these programs no longer exist , or have been severely cut back .
However , since these centers appear to pay for themselves , there is nothing to prevent state and local governments from enacting legislation with similar provisions .
Many states already have Enterprise Zones and legislation that combines tax incentives , loans , and grants to encourage investment in depressed areas with requirements for the hiring of the unemployed and minorities .
These programs could be expanded to focus on funds for project planning , identifying sources of funds , and for acquiring a site and preparing it .
Combatting crime and the fear of it in inner-city commercial areas should give Enterprise Zones more success than most have enjoyed to date .
With many suburban areas basically overbuilt with shopping centers , inner-city areas may represent a major new untapped market for investment .
New approaches to mall design and operation make it possible to tap these markets .
If the risks and rewards are reasonable , developers will respond .
Government officials who wonder how important it is for them to encourage development in high-risk areas should visit Vermont-Slauson and Grand Boulevard Plaza and decide for themselves .
The answer will be obvious .
Mr. Titus is a researcher at the Justice Department 's National Institute of Justice .
ATHLONE INDUSTRIES Inc. said that on Dec. 21 it will redeem $ 10 million face amount of its $ 59.3 million of 15.625 % subordinated notes outstanding , due June 1 , 1991 .
For each $ 1,000 of notes , the maker of specialty metals , industrial fasteners and consumer products will pay $ 1,026.46 plus $ 8.68 of interest accrued from Dec. 1 .
The company will notify holders of the notes to be redeemed .
Manufacturers Hanover Trust Co. is redemption agent .
One company recently was listed on the New York Stock Exchange , and another will join the Big Board from the over-the-counter market this week .
Putnam Investment Grade Municipal Trust , Boston , was listed with the symbol PGM .
The new closed-end management investment company trades shares of beneficial interest .
It invests primarily in tax-exempt municipal securities .
Hibernia Corp. , a New Orleans bank holding company , will join the Big Board Thursday under HIB .
Three companies began trading over the counter .
Exabyte Corp. , a Boulder , Colo. , maker of high-capacity tape cartridge systems used to back up computer disk drives , started OTC trading with the symbol EXBT .
Rally 's Inc. , a Louisville , Ky. , restaurant franchisor , started trading under RLLY .
Sierra Tucson Cos. , Tucson , Ariz. , started trading under STSN .
It operates various types of addiction-treatment facilities .
Separately , on the Pacific Stock Exchange , put and call options on the common stock of Aldus Corp. started trading .
Aldus , Seattle , makes computer software products .
Options give a holder the right , but not the obligation , to buy or sell a security at a set price within a set period of time .
Dow Chemical Co. said its Destec Energy Inc. unit has agreed to buy PSE Inc. , a Houston energy company , in a deal valued at about $ 115 million .
Dow , of Midland , Mich. , said its unit will begin by Thursday a tender offer of $ 12.25 a share for all PSE common shares outstanding .
Among other conditions , the offer depends on the Dow unit acquiring at least 66 % of the PSE shares outstanding , the companies said in a joint statement Friday .
PSE has about 9.2 million shares outstanding .
The company said the approximately $ 115 million acquisition price includes its total $ 33 million of long-term debt outstanding .
Dow said it already has agreements with Albert J. Smith Jr. , chairman and chief executive officer of PSE , and certain other officers of the company under which Dow may buy about 40 % of the PSE common shares outstanding .
PSE is a designer and operator of energy-cogeneration facilities and had 1988 sales of $ 234 million .
The company is owner and operator , or an equity partner , in six cogeneration facilities -- two in Texas and four in California .
The company said recently it expects third-quarter earnings will be in range from $ 1.3 million to $ 1.7 million , or 14 cents to 18 cents a share , compared with $ 326,000 , or four cents a share , a year ago .
If growth regains its glamour among investors , a sluggish segment of the Nasdaq over-the-counter market could show some flash .
Some stock pickers already are targeting the OTC market , where , they say , await plenty of small - and medium-sized growth stocks .
Best of all , they add , these growth issues , unlike their big blue-chip cousins on the New York Stock Exchange , are languishing at depressed prices .
Growth stocks will return to favor , some analysts and money managers think , because of the jitters caused by the market 's steep slide on Oct. 13 , and because of the current swell of disappointing earnings announcements .
Against such a backdrop , companies with proven track records of earnings gains of 20 % or so annually have extra appeal .
`` The market will have to look for a new theme now and that theme will be a return to growth , '' declares Mary Farrell , a PaineWebber analyst .
Among her OTC picks are Oshkosh B'Gosh and A&W Brands .
Like many OTC growth issues , they have market values -- as measured by stock price times shares outstanding -- of roughly $ 100 million to $ 500 million .
Some like to specialize in growth companies whose shares have n't traded publicly very long .
These are sometimes dubbed `` emerging '' growth companies , though they also have expanding-profit track records .
While many growth stocks are small , not all small stocks have earnings-growth momentum .
That 's an important distinction because some analysts and brokers , who perennially predict that small stocks are about to outperform bigger issues , may use any spurt in growth issues to help them sell all small stocks .
`` You can find some good , quality companies over the counter , '' but investors should be selective , says John Palicka , chief portfolio manager at Midco Investors , a Newark , N.J. , money management company with about $ 900 million invested in growth stocks of varying sizes .
Mr. Palicka 's picks from the OTC market include Legent , Mail Boxes Etc. , and Payco American .
The main argument for growth stocks is their usually superior performance in a slowing economy .
`` If the market refocuses on earnings , we should get better valuations of growth stocks , '' says L. Keith Mullins , a growth-stock analyst at Morgan Stanley .
Eventually , he believes , investors will be willing to pay higher prices for companies with proven track records of earnings growth .
In anticipation of that shift , he and other analysts are encouraging their clients to buy such issues now .
Understandably , smaller growth stocks have n't been in favor recently .
The average issue on Standard & Poor 's 500-stock Index gained 35 % last year , Ms. Farrell of PaineWebber says .
Smaller-stock earnings , by comparison , rose between 15 % and 20 % .
In addition , earnings growth took a back seat to cash flow , restructuring and takeover potential , and breakup value as the preferred stock-picking standards for much of the year .
Also , the smaller growth stocks are n't widely traded , and so are harder to buy and sell quickly than blue chips .
As a result , Morgan Stanley 's Index of 40 Emerging Growth Stocks -- most of which are in the OTC market -- is up only 13 % for the year , while the Dow Jones Industrial Average has leaped 24 % and the S&P 500 has grown 25 % .
The Nasdaq Composite has gained 23 % this year , but that 's largely due to the 100 largest nonfinancial stocks , which have soared 30 % .
Some investors are skeptical of growth stocks because investing in them means ignoring that maxim found in the fine print of some investment advertisements -- that past performance is n't indicative of future results .
`` People are naturally suspicious of them , '' says Mr. Mullins of Morgan Stanley .
Among his favorites in his firm 's index are Legent , Silicon Graphics and Novell .
However , more money managers are reassured that profit is regaining importance .
Mark Schoeppner , portfolio manager at Pittsburgh-based Quaker Capital Management , says that in reaction to nervousness about debt-laden buy-out transactions , analysts and investors now appear to be `` valuing stock based on future earnings as opposed to the amount of debt the company can support . ''
Barney Hallingby , managing director of research at Hambrecht & Quist , also believes earnings growth is beginning to play a greater part in investors ' buying decisions .
On Friday , Hambrecht & Quist added St. Jude Medical to the list of 20 stocks it strongly recommends .
The opinion is largely based on the company 's earnings momentum , Mr. Hallingby says .
St. Jude 's market value on Nasdaq exceeds $ 1 billion , so it is n't a small stock .
The medical devices maker 's earnings rose nearly 35 % in 1987 from 1986 , and 75 % in 1988 .
Kurt Kruger , who follows the stock for Hambrecht & Quist , anticipates that the company 's net income will grow 51 % to $ 2.15 a share this year .
St. Jude finished up to 44 on Friday .
Friday 's Market Activity
The Nasdaq Composite Index eased 0.13 to 470.67 .
The composite finished up 0.7 % from last Friday 's close .
It was a busy week for OTC stocks .
Friday 's volume totaled 158.2 million shares ; the daily average for the week was a bustling 176.7 million .
Valley National lost 1 to 17 on volume of 1.9 million shares .
The company reported a big third-quarter loss on Thursday .
Merchants Bank of New York lost 1 to 106 after reporting that its third-quarter net income fell to $ 1.62 a share from last year 's $ 1.67 a share .
Eliot Savings Bank lost to 1 after reporting that it had a $ 4.8 million loss in the latest third quarter mostly because of loan-loss provisions .
In the 1988 quarter , the bank earned $ 1.1 million .
One bank stock was a winner .
BanPonce jumped 4 to 47 after agreeing to be acquired by Banco Popular de Puerto Rico for $ 56.25 a share .
Banco Popular , meanwhile , dropped 1 to 21 .
Sierra Tucson , an initial public offering , made the most active list .
The company 's shares began trading at 12 , up from its initial offering price of 12 , and closed at 13 .
Sierra Tucson operates an addiction treatment center .
Among declining issues , a weak earnings outlook drove Groundwater Technology down 6 to 24 .
The company said results for its second quarter ended Oct. 28 could drop as much as 20 % below the 30 cents a share reported in the year-earlier quarter .
Medstone International plummeted 3 to 7 .
A Food and Drug Administration advisory panel has asked that Medstone perform more studies on its device to treat gallstones .
Qintex Entertainment dropped 2 to 1 after seeking protection from creditor lawsuits under Chapter 11 of the federal Bankruptcy Code for itself and its two operating subsidiaries , Hal Roach Studios and Qintex Productions .
Raymond Corp. lost 1 to 10 after it said late Thursday that it will take a $ 4.4 million charge in its third quarter for reserves to cover potential charges in connection with the closing and sale of a manufacturing plant .
As a result , the company has suspended its quarterly dividend .
McCaw Cellular Communications and its target , LIN Broadcasting , were active .
LIN added to 110 and McCaw lost to 41 .
McCaw said it has secured commitments from three banks to help finance its $ 125-a-share bid for 22 million of Lin 's shares .
McCaw has called for a `` fair auction '' of LIN , which earlier entered a stock-swap merger pact with BellSouth .
Following the release of the company 's fourth-quarter earnings , Apple Computer dropped to 48 on volume of more than 2.3 million shares .
Apple earned $ 161.1 million , or $ 1.24 a share , in the quarter , including $ 48 million from the sale of its Adobe Systems stock .
The following were among Friday '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 :
Chicago & North Western Acquisition Corp. -- $ 475 million of senior subordinated resettable debentures , due Oct. 15 , 2001 , priced at par to yield 14.75 % .
The coupon will be reset in one year at a rate that will give the issue a market value of 101 .
However , the maximum coupon rate on the issue when it is reset can only be 15.5 % .
Debenture holders will also receive the equivalent of 10 % of the common stock of CNW Holdings .
The equity kicker is not attached to the offering , but underwriters said it will be offered after a filing for 68,548 common shares of CNW Holdings is declared effective by the Securities & Exchange Commission .
The issue is noncallable for five years and has a sinking fund starting in 2000 to retire 50 % of the issue before maturity .
Rated single-B-2 by Moody 's Investors Service Inc. and single-B-minus by Standard & Poor 's Corp. , the issue will be sold through underwriters led by Donaldson Lufkin & Jenrette Securities Corp .
Tokuyama Soda Co . -LRB- Japan -RRB- -- $ 200 million of Eurobonds due Nov. 9 , 1993 , with equity-purchase warrants , indicating a 4 % coupon at par , via Nomura International Ltd .
Each $ 5,000 bond carries one warrant , exercisable from Nov. 28 , 1989 , through Oct. 28 , 1993 , to buy company shares at an expected premium of 2 % to the closing share price when terms are fixed Oct. 27 .
For bankers and regulators , Arizona is looking more like Texas every day .
On Friday , Los Angeles-based First Interstate Bancorp said it expects a net loss of $ 16 million for the third quarter of 1989 because of hemorrhaging at its First Interstate Bank of Arizona unit .
First Interstate said the unit , bludgeoned by Arizona 's worsening real-estate woes , will have a $ 174 million loss for the quarter .
First Interstate took a huge $ 350 million provision for loan losses at the Arizona bank .
It charged off an estimated $ 200 million of Arizona loans , leaving the unit with a reserve for future losses of $ 255 million , about 61 % of its $ 416 million of troubled loans and repossessed real estate .
First Interstate made the move under pressure from regulators .
The action capped a spurt of grim Arizona banking news for the third quarter , and emphatically signaled that Arizona is challenging Texas 's long reign as banking 's busiest graveyard .
Earlier last week , Valley National Corp. , the state 's largest locally owned banking company , reported a $ 72.2 million loss and suspended its dividend .
Pinnacle West Capital Corp. , which has been wrangling with regulators for months over what to do about Pinnacle 's moribund Merabank thrift unit , suspended its dividend and reported a 91 % plunge in third-quarter net income .
Security Pacific Corp. said third-quarter credit losses surged a third to $ 109 million , mainly because of sour Arizona real-estate loans .
New York-based Chase Manhattan Corp. took an $ 85 million Arizona-related charge .
Furthermore , the regulatory maneuvering behind First Interstate 's loss suggests regulators have concluded that lenders ' reserves are far too low to absorb their future Arizona losses and are forcing bankers to do something about it .
Examiners from the Office of the Comptroller of the Currency had been combing through First Interstate 's real-estate portfolio since last month ; they first recommended that First Interstate take a provision that was less than the eventual $ 350 million third-quarter hit .
When First Interstate balked , arguing that the figure was too high , regulators responded by raising their recommendation to $ 350 million .
`` At that point , -LCB- First Interstate -RCB- decided it was the better part of valor not to negotiate further , '' said one industry official close to the talks .
Thomas P. Marrie , chief financial officer , would n't comment about the details of the negotiations .
He said the provision `` was n't forced upon us , but the regulators made it very clear what they thought was an appropriate number . ''
The tough regulatory stance portends large future losses , especially at the state 's thrifts .
At least six of Arizona 's 12 savings and loan institutions have either been taken over by the government 's conservatorship program or are essentially insolvent ; they are sitting on enormous unrecognized losses .
For example , Western Savings & Loan Association , which is now in conservatorship , had tangible capital-assets minus liabilities -- of a negative $ 357.4 million at June 30 .
It had a $ 258.9 million loss in the second quarter .
Yet it still held $ 916.3 million of repossessed real estate , for which it maintains no reserves whatsoever .
It also had $ 479.7 million of past-due loans ; its level of reserves against those was n't immediately available , though it is believed to be small .
The rapid deterioration of the Arizona thrifts only adds to the ever-swelling cost of the government 's massive thrift bailout , officially estimated at about $ 166 billion .
Together , the six government-controlled or essentially insolvent Arizona thrifts have tangible capital of a negative $ 1.5 billion , foreclosed property of $ 1.8 billion and pastdue loans of $ 1.63 billion .
They have no reserves against the real estate , and their reserves against the loans are miniscule compared with the levels of reserves banks are moving to set up .
The thrifts had a combined loss of $ 487.8 million in the second quarter .
Other lenders have been recovering only 50 cents to 60 cents on the dollar on foreclosed Arizona property , if they can sell it at all .
All this havoc is the result of one of the worst busts in Arizona 's boom-and-bust history , compounded by some of the usual suspects in 1980s banking debacles : greed , fraud and plain bad banking .
In the late 1970s and early 1980s , lenders and developers poured money into office buildings , condominiums and massive tracts of raw desert land , confident that Arizona 's population would grow at annual rates of 4 % to 6 % for years to come .
Now , annual population growth is running at about 2 % a year , some desert tracts bought three years ago for $ 90,000 an acre are being sold at $ 25,000 an acre and Phoenix has a seven-year supply of unoccupied office space .
`` It 's horrible to say , but it 's unfortunate that earthquake was n't in Phoenix -- it might have knocked out some of our empty buildings , '' said C.W. Jackson , a prominent Arizona businessman with interests in real estate , banking and many other businesses .
Many Arizona real-estate experts think the worst may be yet to come .
Ralph Shattuck , publisher of Foreclosure Update newsletter , said foreclosures have climbed to about 1,482 a month just in Maricopa County , where Phoenix is located .
That 's up from about 687 a month in 1985 , and it 's accelerating : So far this month , foreclosures are averaging about 85 a day .
`` It 's frightening , '' Mr. Shattuck said .
Moreover , Mr. Shattuck and others said residential real estate , which had remained fairly strong through most of the downturn , is beginning to comprise more and more of the foreclosures .
And the generally frail condition of Arizona 's lenders means there is little capital available in the state to shore up the economy and slow down the slide .
`` It 's reasonable to say there is not a solvent S&L in the state and the amount of viable bank capital is very low , '' said Mr. Jackson .
`` We 're going to see another big wave of failures and defaults between now and year-end .
The only thing a lot of these lenders can get out of their mouth now is : ` Pay me in 60 days . ' ''
First Interstate had a $ 214.4 million loss in 1988 's third quarter , mainly from writedowns and reserves connected with its Texas operations .
For the six months ended June 30 , it reported net income of $ 234.3 million , or $ 4.83 a share , including $ 46 million from tax credits and accounting changes .
The bank 's Arizona unit holds about $ 6 billion of First Interstate 's $ 50 billion of assets .
Mr. Marrie said the bank expects Arizona real-estate prices , which plummeted 40 % over the last year , to fall another 20 % before stabilizing .
Some in Arizona think that may be optimistic .
First Interstate said its operations outside of Arizona `` achieved results as expected for the quarter , '' but did n't specify the results .
First Interstate stock closed at $ 57.625 , down 25 cents , in composite trading Friday on the New York Stock Exchange .
Since its unsuccessful bid for BankAmerica Corp. in 1986 , the bank has undertaken a major restructuring in an effort to cut costs and boost performance , but many industry officials believe it may be ripe for a takeover bid , especially with interstate banking set to begin in California in 1991 .
Mr. Marrie said the problems in Arizona have only `` increased our resolve to continue to make our restructuring even more effective . ''
Separately , Standard & Poor 's Corp. lowered its ratings on Valley National Corp. 's senior debt to double-B from double-B-plus , affecting about $ 300 million of long-term debt .
S&P also lowered ratings on unsecured deposits and issues backed by a letter of credit from the bank holding company 's principal unit , Valley National Bank of Arizona .
The ratings service said the downgrades reflect the continued slide in the company 's financial condition .
A spokesman for Phoenix , Ariz.-based Valley National , said the concern will be able to withstand the current downturn in Arizona real estate .
Commercial paper holders have reinvested their funds , he said , and consumer deposits have been up in the last few days .
Immunex Corp. said its scientists isolated a molecule which may hold potential as a treatment for disruptions of the immune-system , ranging from organ-transplant rejection , to allergies and asthma .
The molecule is the mouse version of a protein called the interleukin-4 receptor .
IL-4 is a hormone which directs the growth and function of white blood cells involved in the body 's immune response .
The IL-4 receptor on the surface of such cells receives the hormone 's message to rally the body 's defense .
But in certain conditions such as autoimmune diseases and allergies and transplant rejection , doctors would like to damp the immune response so such cells do n't touch off harmful inflammatory reactions or cell destruction .
A soluble form of the receptor might turn off a specific part of the immune response without general immune suppression , the company said .
The IL-4 receptor is one of five such receptors to be developed and tested by Receptech Corp. , a spinoff of Immunex , through a proposed $ 30 million initial public offering .
Immunex will contract with the spinoff to provide the research , development and initial testing of the new agents .
Immunex will have the option to buy back Receptech shares after five years .
The following issues were recently filed with the Securities and Exchange Commission :
Heller Financial Inc. , an indirect subsidiary of Fuji Bank Ltd. , shelf offering of up to $ 1 billion debt securities and warrants .
Jason Overseas Ltd. , proposed offering of five million common shares , via Smith Barney & Co. and Mabon Nugent & Co .
MCI Communications Corp. , shelf offering of up to $ 750 million of debt securities via Merrill Lynch Capital Markets , Drexel Burnham Lambert Inc. , Goldman , Sachs & Co. , and Salomon Brothers Inc .
Millicom Inc. , offering of $ 60 million subordinated exchangeable debentures , via Bear , Stearns & Co. Inc .
Union Tank Car Co. , offering of $ 100 million of equipment trust certificates , via Salomon Brothers .
Conner Peripherals Inc. , which has a near-monopoly on a key part used in many portable computers , is on target to surpass Compaq Computer Corp. as the fastest-growing start-up manufacturing firm in U.S. business history .
Conner dominates the market for hard-disk drives used to store data in laptop computers .
It said yesterday that net income for its third quarter soared 72 % to $ 11.8 million , or 28 cents a share , from $ 6.8 million , or 19 cents a share , in the year-ago period .
Its revenue totaled $ 184.4 million , an increase of 172 % from $ 67.8 million a year ago .
For the nine months , the San Jose , Calif.-based company said net income jumped 84 % to $ 26.9 million , or 69 cents a share , from $ 14.6 million , or 43 cents a share .
Revenue nearly tripled to $ 479 million , from $ 160 million .
Analysts expect Conner 's earnings to reach roughly $ 40 million , or $ 1 to $ 1.05 a share , on sales of $ 650 million , for 1989 , the company 's third full year in business .
That 's a faster growth rate than reported by Compaq , which did n't post similar results until its fourth year , in 1986 .
But Compaq had achieved that level of sales faster than any previous manufacturing start-up .
Conner 's performance is closely tied to the burgeoning demand for battery-operated computers , the computer industry 's fastest-growing segment .
Since its inception , Conner has both benefited from and helped make possible the rapid spread of portable computers by selling storage devices that consume five to 10 times less electricity than drives used in desktop machines .
Today , Conner controls an estimated 90 % of the hard-disk drive market for laptop computers .
The company supplies drives to Compaq and Zenith Data Systems , the top two U.S. manufacturers of laptops , and to Toshiba Corp. , NEC Corp. and Sharp Corp. , the leading Japanese laptop makers .
`` They 've had this field to themselves for over a year now , and they 've been greatly rewarded , '' said Bob Katsive , an analyst at Inc. , a market researcher in Los Altos , Calif .
In the coming months , however , this is likely to change .
Next month , Seagate Technology , which is the dominant supplier of hard-disk drives for personal computers , plans to introduce its first family of low-power drives for battery-operated computers .
And the Japanese are likely to keep close on Conner 's heels .
`` They are going to catch up , '' said David Claridge , an analyst with Hambrecht & Quist .
Both Toshiba and NEC already produce hard-disk drives , and Sony also is studying the field , Mr. Claridge said .
But Conner is n't standing still .
Yesterday , the company introduced four products , three of which are aimed at a hot new class of computers called notebooks .
Each of the three drives uses a mere 1.5 watts of power and one weighs just 5.5 ounces .
`` Most of our competitors are announcing products based on our -LRB- older -RRB- products , '' said Finis Conner , chief executive officer and founder of the firm that bears his name .
`` We continue to develop products faster than anyone else can . ''
These new products could account for as much as 35 % of the company 's business in 1990 , Mr. Conner estimated .
`` We 're not afraid of obsoleting some of our old stuff to stay ahead of the competition , '' he said .
Conner already is shipping its new drives .
Last week , for instance , Compaq introduced its first notebook computer to rave reviews .
Conner is supplying hard-disk drives for the machine , which weighs only six pounds and fits in a briefcase .
From its inception , Conner has targeted the market for battery-operated machines , building hard-disk drives that are smaller and use far less power than those offered by competitors such as Seagate .
The availability of these drives , in turn , boosted demand for laptop computers , whose usefulness had been limited because of lack of storage .
Conner also makes hard-disk drives for desktop computers and is a major supplier to Compaq , which as of July owned 40 % of Conner 's stock .
Sales to Compaq represented 26 % of Conner 's business in its third quarter , compared with 42 % in the year-ago period .
Move over , pornographic phone services : A legal service with a `` 900 '' number has been launched in California .
A Newport Beach law firm started the pay-as-you-go legal service , called Telelawyer , using MCI Communication Corp. 's toll-tele-phone service .
Cane & Associates touts its $ 2-a-minute service as the `` cheapest legal hour you 'll ever find . ''
Though the service is available only in California , Telelawyer founder Michael Cane says he plans to franchise it in other states .
He says his aim is to reach people who are bedridden , have no access to transportation , ca n't find a lawyer to take their case or simply ca n't afford lawyers ' consultation fees .
Mr. Cane stresses that he is n't using the telephone to lure clients to his doorstep .
`` We will only deal with clients on the phone , '' he says .
We have no in-office business . ''
Telelawyer is apparently the only telephone service that offers the telephone equivalent of an office visit .
Local bar associations in some states have numbers that provide free tape-recorded messages explaining certain areas of the law .
There also are `` 800 '' hotlines which refer people to lawyers , usually personal-injury specialists , for in-office consultation .
When a caller reaches Telelawyer by dialing 900-TELELAW , a receptionist refers the call to one of six attorneys .
In an effort to determine whether a caller has reason to sue , Cane lawyers review documents and perform research , if necessary , with the help of three law clerks and several support staffers .
There is no charge for research -- only for time on the phone .
If the matter requires further legal work or litigation , Mr. Cane says , his lawyers may refer the client to a law firm .
But he says Cane & Associates does n't receive referral fees .
So far , says Mr. Cane , most calls have involved landlord-tenant problems , tax problems , divorce , and probate questions .
The firm is getting about 50 calls a day , and the average call lasts about 15 minutes .
Out of the $ 2 charge , the law firm pockets about $ 1.55 .
JURY CONVICTS congressman in connection with Wedtech Corp. scandal .
A federal court jury in New York found U.S. Rep. Robert Garcia -LRB- D. , N.Y . -RRB- and his wife , Jane Lee Garcia , guilty of extorting $ 76,000 from Wedtech in return for official acts by the congressman .
The jury also convicted them of extortion in obtaining a $ 20,000 , interest-free loan from a Wedtech officer .
The jury found them guilty of conspiracy in obtaining the payments , some of which were disguised as fees for consulting services from Mrs. Garcia .
Wedtech , which became embroiled in political-corruption cases that eventually led to its demise , formerly was a minority-owned South Bronx , N.Y. , defense contractor .
Edward J.M. Little , one of the assistant U.S. attorneys who prosecuted the case , said the Garcia trial `` is the last of the Wedtech prosecutions . ''
Mr. Little said more than 20 people have been convicted in the Wedtech cases , including former U.S. Rep. Mario Biaggi -LRB- D. , N.Y . -RRB- .
Lawyers for the Garcias said they plan to appeal .
Mr. Garcia , who represents New York 's 18th congressional district , which includes the Bronx , said he has n't decided whether he will resign .
`` In the next few weeks , I will be consulting with my political advisers and with the Democratic leaders about the best way of preserving the interests of my constituents , '' said Mr. Garcia , 56 years old .
Mrs. Garcia , 49 , formerly was a member of Mr. Garcia 's congressional staff .
The Garcias were cleared of four other felony counts , involving the receipt of bribes and gratuities .
U.S. Judge Leonard B. Sand set the Garcias ' sentencing for Jan. 5 .
FIVE SHEA & GOULD PARTNERS are leaving to form a new firm .
The new firm , Hutton Ingram Yuzek Gainen Carroll & Bertolotti , will be based in New York .
The five partners who resigned from Shea & Gould late last week are Tom Hutton , Sam Ingram , Dean Yuzek , Daniel Carroll and Ernest Bertolotti .
They will be joined by Larry Gainen , who resigned from the firm of LePatner , Gainen & Block .
Howard Rubenstein , a New York publicist who represents Shea & Gould , said , `` Shea & Gould understands they 're leaving because they wanted a different environment -- a smaller firm they would be principals of . ''
Mr. Rubenstein said the five , who were n't on Shea & Gould 's management committee , `` are leaving on good terms . ''
He said Shea & Gould held a number of discussions with the five partners during the past few weeks to get them to stay but that the five were firmly committed to running their own firm .
Hutton Ingram will have a general corporate , securities , real-estate and litigation practice , and a substantial practice serving the professional-design community .
DISCIPLINARY PROCEEDINGS against lawyers open to public in Illinois .
While investigations into lawyer misconduct will remain secret , the public will be notified once a formal complaint is filed against an attorney .
The actual disciplinary hearings will be public .
In addition , Illinois attorneys will lose the right to sue clients who file malicious complaints against them .
Non-lawyers will be added to the inquiry panels that look into allegations of misconduct .
Illinois joins 36 other states that allow public participation in attorney-disciplinary proceedings and 32 states that open disciplinary hearings to the public , according to the American Bar Association .
One vocal critic of the changes , Chicago lawyer Warren Lupel , says non-lawyers should n't be on the inquiry panels because they are unlikely to appreciate the nuances of attorney-client relationships .
In addition , he says , publishing the names of lawyers who are facing charges unnecessarily subjects them to public derogation .
Nevertheless , Mr. Lupel anticipates no legal action to reverse the Illinois Supreme Court 's decision to institute the changes .
`` There 's no constitutional right involved in the rule change , '' he says .
`` You do n't have a right to practice .
You only have a privilege to practice . ''
DREXEL BURNHAM LAMBERT Inc. agreed to pay a $ 50,000 fine to Delaware , the 26th state to settle with Drexel in the wake of the firm 's guilty plea to federal insider-trading charges .
Drexel does n't have a Delaware office , but the New York firm has been negotiating settlements that would allow it to operate freely nationwide despite its record as an admitted felon .
The firm has said it expects to pay $ 11.5 million overall to settle with states .
Drexel pleaded guilty in September to six felony counts of securities and mail fraud ; it also made a $ 650 million civil settlement with the Securities and Exchange Commission .
Philip Morris Cos. , whose Benson & Hedges cigarette brand has been losing market share , has asked at least one other agency to try its hand at creative work for the big account , which has been at Wells Rich Greene Inc. since 1966 .
Executives close to Philip Morris said that the tobacco and food giant has asked Backer Spielvogel Bates Worldwide Inc. , a unit of Saatchi & Saatchi Co. , and possibly others to work on creative ideas for the account .
Several executives said another potential contender is WPP Group 's Ogilvy & Mather agency , which works on some other Philip Morris products .
Both Philip Morris and Backer Spielvogel declined to comment .
A spokeswoman for Ogilvy & Mather said the agency does n't comment on `` idle speculation . ''
Also mentioned as a contender was TBWA Advertising , but the company denied it was participating .
The loss of the cigarette account would be a severe blow to Wells Rich .
Benson & Hedges has been one of its most high-visibility campaigns , as well as one of its largest clients .
The account billed almost $ 60 million last year , according to Leading National Advertisers .
But Philip Morris has scaled back ad spending on the brand over the past year , industry executives said , and it now bills about $ 30 million to $ 40 million .
Industry executives said Philip Morris had asked the other agencies to create campaigns in a bid to stop the brand 's slipping market share .
According to John Maxwell , an analyst at Wheat First Securities , Richmond , Va. , Benson & Hedges has slipped from 4.7 % of the cigarette market in 1985 to just 4.1 % after the second quarter of this year .
The brand is No. 7 overall in the cigarette business , Mr. Maxwell said .
The slip has come despite high-profile ads created by Wells Rich , including one picturing a young man clad only in pajama bottoms interrupting a festive brunch .
That ad generated so much publicity that a trade magazine launched a contest for its readers to guess who the guy was and what he was doing .
Wells Rich first popularized the Benson & Hedges brand more than 20 years ago with ads portraying , among other things , an elevator door closing on a passenger 's cigarette .
The brand early on achieved an upscale appeal -- a trait that some analysts believe is partly responsible for its staid performance .
Philip Morris , trying to revive the Benson & Hedges franchise , put the account up for review in 1986 .
Wells Rich Greene , however , in an effort directed by Mary Wells Lawrence , emerged the victor of the review and retained the business .
Kenneth Olshan , Wells Rich 's chairman , did n't return phone calls seeking comment .
While Wells Rich recently picked up Hertz Corp. 's $ 25 million to $ 30 million account , it has lost a number of big accounts this year , including the $ 20 million to $ 25 million Cadbury-Schweppes Canada Dry and Sunkist accounts , the $ 18 million Procter & Gamble Co . Sure deodorant account and the $ 10 million Lauren business .
Its victories include more than $ 30 million in Sheraton Corp. business and an assignment from Dun & Bradstreet worth $ 5 million to $ 10 million .
This city is girding for gridlock today as hundreds of thousands of commuters avoid travel routes ravaged by last week 's earthquake .
Estimates of damage in the six-county San Francisco Bay area neared $ 5 billion , excluding the cost of repairing the region 's transportation system .
The Bay Bridge , the main artery into San Francisco from the east , will be closed for at least several weeks .
Part of the bridge collapsed in the quake , which registered 6.9 on the Richter scale .
The bridge normally carries 250,000 commuters a day .
Also , most of the ramps connecting the city to its main link to the south , the 101 freeway , have been closed for repairs .
The Bay Area Rapid Transit system , which runs subway trains beneath the bay , is braced for a doubling of its daily regular ridership to 300,000 .
BART has increased service to 24 hours a day in preparation for the onslaught .
Most unusual will be water-borne commuters from the East Bay towns of Oakland and Berkeley .
For the first time in 32 years , ferry service has been restored between the East Bay and San Francisco .
The Red and White Fleet , which operates regular commuter ferry service to and from Marin County , and tourist tours of the bay , is offering East Bay commuters a chance to ride the waves for the price of $ 10 round-trip .
That tariff is too stiff for some Financial District wage earners .
`` I 'll stay with BART , '' said one secretary , swallowing her fears about using the transbay tube .
Officials expect the Golden Gate Bridge to be swamped with an extra load of commuters , including East Bay residents making a long detour .
`` We 're anticipating quite a traffic crunch , '' said one official .
About 23,000 people typically travel over the Golden Gate Bridge during commute hours .
About 130,000 vehicles cross during a 24-hour period .
Meetings canceled by Apple Computer Inc. 's European sales force and by other groups raised the specter of empty hotel rooms and restaurants .
It also raised hackles of the city 's tourism boosters .
`` Other cities are calling -LCB- groups booked here for tours and conferences -RCB- and -- not to be crass -- stealing our booking list , '' said Scott Shafer , a spokesman for Mayor Art Agnos .
City officials stuck by their estimate of $ 2 billion in damage to the quake-shocked city .
The other five Bay area counties have increased their total damage estimates to $ 2.8 billion .
All estimates exclude highway repair , which could exceed $ 1 billion .
Among the expensive unknowns are stretches of elevated freeway in San Francisco that were closed because of quake-inflicted damage .
The most worrisome stretch is 1.2 miles of waterfront highway known as the Embarcadero Freeway .
Until it was closed Tuesday , it had provided the quickest series of exits for commuters from the Bay Bridge heading into the Financial District .
Engineers say it will take at least eight months to repair the Embarcadero structure .
As part of the quake recovery effort , the city Building Department has surveyed about 3,000 buildings , including all of the Financial District 's high-rises .
The preliminary conclusion from a survey of 200 downtown high-rises is that `` we were incredibly lucky , '' said Lawrence Kornfield , San Francisco 's chief building inspector .
While many of these buildings sustained heavy damage , little of that involved major structural damage .
City building codes require construction that can resist temblors .
In England , Martin Leach , a spokesman for Lloyd 's of London , said the insurance market has n't yet been able to estimate the total potential claims from the disaster .
`` The extent of the claims wo n't be known for some time , '' Mr. Leach said .
On Friday , during a visit to California to survey quake damage , President Bush promised to `` meet the federal government 's obligation '' to assist relief efforts .
California officials plan to ask Congress for $ 3 billion or more of federal aid , in the form of grants and low-interest loans .
The state has a $ 1 billion reserve , and is expected to add $ 1 billion to that fund in the next year .
Some of that money will be available for highway repair and special emergency aid , but members of the legislature are also mulling over a temporary state gasoline tax to raise money for earthquake relief .
However , state initiatives restrict the ability of the legislature to raise such taxes unless the voters approve in a statewide referendum .
G. Christian Hill and Ken Wells contributed to this article .
Bond Corp . Holdings Ltd. posted a loss for fiscal 1989 of 980.2 million Australian dollars -LRB- US$ 762.4 million -RRB- , the largest in Australian corporate history .
That loss compared with a year-earlier profit of A$ 273.5 million .
In preliminary , unaudited results reported Friday , Bond Corp. also posted an operating loss of A$ 814.1 million for the year ended June 30 , compared with operating profit of A$ 354.7 million a year earlier .
Operating revenue rose 69 % to A$ 8.48 billion from A$ 5.01 billion .
But the net interest bill jumped 85 % to A$ 686.7 million from A$ 371.1 million .
Bond Corp. has interests in brewing , media and communications , natural resources and property .
Much of Bond Corp. 's losses stemmed from one-time write-downs of the value of some of Bond Corp. 's assets and those of its units .
The results included a A$ 453.4 million write-off of future income-tax benefits and a provision for a loss of A$ 149.5 million on the sale of a stake of about 20 % in Lonrho PLC .
However , Bond Corp. said the tax benefits remain available and might be used later .
Earnings before interest and tax from brewing dived 50 % to A$ 123.8 million from A$ 247.3 million .
The company said the general financial performance of its U.S. brewing operations , G. Heileman Brewing Co. , was `` disappointing , and this has been reflected in the results . ''
Bond Corp. 's shares closed Friday before news of the results at 28 Australian cents a share , up one Australian cent .
The staggering losses cap a tumultuous year for Alan Bond and his flagship , Bond Corp .
Only a year ago , the chairman of Bond Corp. , who controls about 58 % of the company , appeared to be building a war chest to attack some big companies .
Now Bond Corp. has agreed to sell at least half its Australian brewing assets .
It has sold billions of dollars of other assets and has more on the block .
But in a TV interview Sunday Mr. Bond said , `` We 've taken a big loss .
We 've taken it on the chin .
But we 're out there and we 're going to stay in business .
Bond Corp. signaled it will focus on building its domestic and international media and communications businesses .
It said it will look at opportunities in brewing , property and energy resources to the extent consistent with the dominant objective of manageable debt-to-assets ratios .
The result `` will ultimately be a very different group in size and structure , '' Bond Corp. directors said in a statement .
Some analysts contend the total writeoffs should have been much greater , and Bond Corp. 's auditors cited a list of several assets and deals about which there is `` uncertainty '' regarding the current value and potential impact on the firm .
Bond Corp. said the acknowledged losses mean net asset backing is in the red to the tune of 53 Australian cents a share , vs. positive asset backing of A$ 1.92 a share a year ago .
Still , the directors said , `` Having fully considered all aspects of the company 's state of affairs and future cash flows , the directors confirm absolutely that the company is solvent . ''
Indeed , in a note to the results , directors said if the `` true worth '' of some of the group 's assets were taken into account instead of using book values , the negative net asset backing a share would turn into `` a substantial positive '' one .
The Bakersfield Supermarket went out of business last May .
The reason was not high interest rates or labor costs .
Nor was there a shortage of customers in the area , the residential Inwood section of northern Manhattan .
The business closed when the owner was murdered by robbers .
The owner was Israel Ortiz , a 29-year-old entrepreneur and father of two .
In his first year of operating the store he bought for $ 220,000 , Mr. Ortiz was robbed at least twice at gunpoint .
The first time he was shot in the hand as he chased the robbers outside .
The second time he identified two robbers , who were arrested and charged .
Two weeks later -- perhaps in retaliation -- Mr. Ortiz was shot three times in the back , during what police classified as a third robbery attempt .
That was his reward for working until 11 p.m. seven days a week to cover his $ 3,000 a month rent .
For providing what his customers described as very personal and helpful service .
For creating a focus for neighborhood life .
Israel Ortiz is only one of the thousands of entrepreneurs and their employees who will be injured or killed by crime this year .
The U.S. Bureau of Justice Statistics reports that almost 2 % of all retail-sales workers suffer injuries from crime each year , almost twice the national average and about four times the rate for teachers , truck drivers , medical workers and door-to-door salespeople .
Only a few other occupations have higher reported rates of criminal injury , such as police , bartenders and taxi drivers .
Yet these figures show only the most visible part of the problem .
Recent data from New York City provide more of the picture .
While by no means the highest crime community in the country , New York is a prime example of a city where crime strangles small-business development .
A survey of small businesses there was conducted this spring by Interface , a policy research organization .
It gave 1,124 businesses a questionnaire and analyzed 353 responses .
The survey found that over a three-year period 22 % of the firms said employees or owners had been robbed on their way to or from work or while on the job .
Seventeen percent reported their customers being robbed .
Crime was the reason that 26 % reported difficulty recruiting personnel and that 19 % said they were considering moving .
More than one-third of the responding businesses said they suffer from drug dealing and loitering near their premises .
In Brooklyn and the Bronx , one out of four commercial firms is burglarized each year .
Industrial neighborhoods fare even worse , with burglary rates twice the citywide average .
Crime is clearly more deadly to small-scale entrepreneurship than to big businesses .
Two decades ago , the Small Business Administration reported Yale Prof. Albert Reiss 's landmark study of crime against 2,500 small businesses drawn from national IRS records .
He found that monetary crime losses , as a proportion of gross receipts , were 37 times higher for small businesses than for large ones .
The New York study 's companies averaged 27 employees ; their annual crime losses averaged about $ 15,000 , with an additional $ 8,385 annual cost in security -- enough money to hire at least one more worker .
The costs of crime may also be enough to destroy a struggling business .
Whatever the monetary crime losses , they may not be nearly as important to entrepreneurs as the risk of personal injury .
After repeated gun robberies , some entrepreneurs may give up a business out of fear for their lives .
One Washington couple recently sold their liquor store after 34 years in business that included four robbery deaths and 16 robberies or burglaries on the premises .
These findings illustrate the vicious cycle that National Institute of Justice Director James K. Stewart calls `` crime causing poverty . ''
Underclass neighborhoods offer relatively few employment opportunities , contributing to the poverty of local residents .
Small neighborhood businesses could provide more jobs , if crime were not so harmful to creating and maintaining those businesses .
This may help explain why small businesses create 65 % of all jobs nationally , but only 22 % of jobs in a crime-ridden city like New York .
Bigger business can often better afford to minimize the cost of crime .
The New York study found that the cost of security measures in firms with fewer than five employees was almost $ 1,000 per worker , compared with one-third that amount for firms with more than 10 employees .
The shift of retailing to large shopping centers has created even greater economies of scale for providing low-crime business environments .
Private security guards and moonlighting police can invoke the law of trespass to regulate access to these quasi-public places .
Since 1984 , in fact , revenues of the 10 largest guard companies , primarily serving such big businesses , have increased by almost 62 % .
Few small neighborhood businesses , however , can afford such protection , even in collaboration with other local merchants .
In the neighborhoods with the highest crime rates , small business generally relies on the public police force for protection .
This creates several problems .
One is that there are not enough police to satisfy small businesses .
The number one proposal for reducing crime in the New York survey was to put more police on foot or scooter patrol , suggested by more than two-thirds of the respondents .
Only 22 % supported private security patrols funded by the merchants themselves .
A second problem is the persistent frustration of false alarms , which can make urban police less than enthusiastic about responding to calls from small businesses .
Only half the New York small businesses surveyed , for their part , are satisfied with the police response they receive .
Some cities , including New York , have experimented with special tax districts for commercial areas that provide additional patrols funded by local businesses .
But this raises added cost barriers to urban entrepreneurship .
Another solution cities might consider is giving special priority to police patrols of small-business areas .
For cities losing business to suburban shopping centers , it may be a wise business investment to help keep those jobs and sales taxes within city limits .
Increased patrolling of business zones makes sense because urban crime is heavily concentrated in such `` hot spots '' of pedestrian density .
With National Institute of Justice support , the Minneapolis police and the Crime Control Institute are currently testing the effects of such a strategy , comparing its deterrence value with traditional random patrols .
Small-business patrols would be an especially helpful gesture whenever a small-business person is scheduled to testify against a robbery suspect .
While no guarantee , an increased police presence might even deter further attacks .
It might even have saved the life , and business , of Israel Ortiz .
Mr. Sherman is a professor of criminology at the University of Maryland and president of the Crime Control Institute in Washington , D.C .
ENFIELD Corp. said in Toronto that it hopes to raise 56 million Canadian dollars -LRB- US$ 47.7 million -RRB- through a rights offering to shareholders .
Under the offer , shareholders can purchase one Enfield share at C$ 6.27 for each five shares held .
In Toronto Stock Exchange trading Friday , Enfield closed at C$ 6.75 , down 37.5 cents .
The holding company said the rights offering should reduce its C$ 171 million debt to `` more manageable levels '' before Dec. 31 and allow it to finance future investments with equity capital .
At last report , Enfield had about 44.5 million shares outstanding .
Former U.N. Ambassador Jeane Kirkpatrick , in a CNN `` Capital Gang '' discussion Oct. 7 of House action on federal catastrophic-illness insurance :
I think this repeal was kind of a thoughtless action , as a matter of fact .
They will have to revisit this issue , and they 'll have to revisit it before long .
Diversification pays .
That 's a fundamental lesson for investors , but its truth was demonstrated once again in the performance of mutual funds during and after the stock market 's Friday-the-13th plunge .
Stock funds , like the market as a whole , generally dropped more than 2 % in the week through last Thursday , according to figures compiled by Lipper Analytical Services Inc .
That reflects the huge drop a week ago Friday , last Monday 's rebound and the dips and blips that followed .
But several other types of funds shielded investors from the worst of the market 's slide .
Funds that invest internationally were the top-performing stock and fixed-income funds .
`` More than ever , people should realize they should have a diversified portfolio , '' said Jeremy Duffield , a senior vice president of Vanguard Group .
That means stocks , bonds , money market instruments and real estate . ''
One week 's performance should n't be the basis for any investment decision .
But the latest mutual fund performance figures do show what can happen when the going gets rough .
`` You want to know how a fund did when the market got hammered , '' said Kurt Brouwer , an investment adviser with Brouwer & Janachowski in San Francisco .
`` It 's like kicking the tires of a car .
What you want to know is when the road 's rough , when there 's snow and ice , how 's this car going to perform ? ''
General equity funds fell an average of 2.35 % in the week ended Thursday , compared with a 2.32 % slide for the Standard & Poor 's 500-stock index .
But Lipper Analytical 's figures show that there were a number of ways investors could have cushioned themselves from the stock market 's gyrations .
Gold-oriented funds , for instance , which invest in companies that mine and process the precious metal , posted an average decline of 1.15 % .
Flexible portfolio funds , which allocate investments among stocks , bonds and money-market instruments and other investments , declined at about half the rate of stock funds -- an average drop of 1.27 % , according to Lipper .
Global allocation funds take the asset-allocation concept one step further by investing at least 25 % of their portfolios outside the U.S .
This gives them the added benefits of international diversification -- including a foreign-exchange boost during periods , like the past week , when the dollar declines against other major currencies .
With all that going for them , global flexible portfolio funds declined only 1.07 % in the week through last Thursday .
But while the merits of diversification shine through when times are tough , there 's also a price to pay : A diversified portfolio always underperforms an undiversified portfolio during those times when the investment in the undiversified portfolio is truly hot .
And Friday the 13th notwithstanding , stocks have been this year 's hot investment .
Thus , even including the latest week , the average general stock fund has soared more than 24 % so far this year , the Lipper Analytical figures show .
By comparison , global asset allocation funds have turned in an average total return of about 19 % , while domestic flexible portfolios are up about 17 % .
Fixed-income funds have returned 8.2 % , while gold funds , which tend to be volatile , have risen just 4.55 % , on average .
`` That 's the problem with trying to hedge too much , '' said Mr. Brouwer .
You do n't make any real money . ''
Over the last 20 years , for example , Mr. Brouwer says , an investor putting $ 5,000 a year in the S&P 500 would have made nearly twice as much than if it were invested in Treasury bills .
Some equity funds did better than others in the week that began on Friday the 13th .
The $ 4 million Monetta Fund , for instance , was the seventh top performing fund for the week , with a 2.65 % return .
Its return so far this year has been a credible 21.71 % .
The fund 's strategy is to sell when a stock appreciates 30 % over its cost .
By the time the market plummeted 10 days ago , Monetta was 55 % in cash , said Robert Bacarella , president and portfolio manager .
Last Monday , he started `` buying the high-quality growth companies that people were throwing away at discount prices . ''
Among Mr. Bacarella 's picks : Oracle Systems , Reebok International Ltd. and Digital Microwave Corp .
The fund 's cash position is now about 22 % , which Mr. Bacarella calls `` still bearish . ''
Among the big stock funds , Dreyfus Fund , with more than $ 2 billion in assets , had a decline of just 1.49 % for the week and a return of 21.42 % for the year .
Howard Stein , chairman of Dreyfus Corp. , said the fund was about half invested in government bonds on Oct. 13 , and about 10 % in cash .
`` In a downward market , bonds act better , '' he said .
`` We still think there 's a lot of unsettlement in this market .
We believe interest rates will continue to trend lower , and the economy will slow around the world . ''
Many of the funds that did best in the last week are heavily invested overseas , giving them the benefit of foreign currency translations when the dollar is weak .
From its high point on Thursday , Oct. 12 , to where it traded late in New York a week later , the dollar fell 3.6 % against the West German mark , 3.4 % against the British pound and 2.1 % against the Japanese yen .
Three International Cash Portfolios funds , which invest almost exclusively in bonds and money-market instruments overseas , were among the four top-performing funds in the latest week .
Because the funds ' investments are denominated in foreign currencies , their value expressed in dollars goes up when those currencies rise against the dollar .
But when the dollar rises against major foreign currencies , as it did for much of this year , the dollar value of these funds declines .
All three funds posted negative returns for the year to date .
Of the funds that fared the worst in the post-Oct . 13 week , two are heavily invested in airlines stocks , which led the market slide following problems with financing for the UAL Corp . buy-out plan .
Reflecting airline takeover activity , however , both the Fidelity Select Air Transportation Portfolio and the National Aviation & Technology fund posted better-than-average returns for the the year to date : 30.09 % for the Fidelity Air Transportation fund and a whopping 47.24 % for National Aviation & Technology .
The small drop in equity funds in general in the latest week may not necessarily be a good sign , said A. Michael Lipper , president of Lipper Analytical .
Noting that equity funds are up nearly 60 % from their post-crash low on Dec. 3 , 1987 , he said that what happened last week `` may not be enough of an adjustment .
There 's either more to come or an extremely long period of dullness . ''
But investors do n't seem to think so .
Several big mutual fund groups said last week that cash flows into stock funds were heavier than usual after heavy outflows on the 13th .
Vanguard Group said it had a more than $ 50 million net inflow into its stock funds last week .
`` There certainly has n't been a panic reaction , '' said Steven Norwitz , a vice president at T. Rowe Price Associates .
People showed some staying power and , in fact , interest in buying equities . ''
Source : Lipper Analytical Services Inc .
Not counting dividends
With dividends reinvested
Sources : Lipper Analytical Services Inc. ; Standard & Poor 's Corp .
Guardian Royal Exchange Assurance PLC , a major British composite insurer , said it is taking a stake in Nationwide Anglia Building Society 's estate agency business as part of a plan to create a range of commercial linkages in the U.K. and Europe .
Officials declined to disclose the value of the transaction or the exact stake that GRE will hold in Nationwide Anglia Estate Agents .
But the companies said that Nationwide Anglia Estate Agents will market GRE life insurance , pension and investment products through its more than 1,000 retail outlets in the U.K .
Besides the marketing agreement , GRE said Nationwide Anglia has agreed to develop life insurance products with the composite insurer .
Sitting at the bar of the Four Seasons restaurant , architect William McDonough seems oblivious to the glamorous clientele and the elegant setting .
He is ogling the curtains rippling above the ventilation ducts .
`` Look how much air is moving around '' he says .
`` The ventilation here is great ''
You may be hearing more about the 38-year-old Mr. McDonough and his preoccupation with clean air .
After years of relative obscurity , he is starting to attract notice for the ecological as well as the aesthetic quality of his architecture .
Mr. McDonough believes that the well-being of the planet depends on such stratagems as opening windows to cut indoor air pollution , tacking down carpets instead of using toxic glues , and avoiding mahogany , which comes from endangered rain forests .
He has put some of his aesthetic ideas into practice with his design of the four-star Quilted Giraffe restaurant -- `` architecturally impeccable , '' Progressive Architecture magazine called it -- and his remodeling of Paul Stuart , the Madison Avenue clothing store .
He has designed furniture and homes as well as commercial and office space .
He is now designing a Broadway stage set for a show by the band Kid Creole and the Coconuts .
What really stirs his muse , though , is aerobic architecture .
Now the question is : Is Poland ready for it ?
Mr. McDonough is about to tackle his biggest clean-air challenge yet , the proposed Warsaw Trade Center in Poland , the first such center in Eastern Europe .
The project has already acquired a certain New York cachet .
Bloomingdale 's plans to sell a foot-tall chocolate model of the center during the holidays .
Some of the sales proceeds will go to the Design Industries Foundation for AIDS .
A cake topped with a replica of the center will be auctioned at an AIDS benefit at Sotheby 's in December .
If Mr. McDonough 's plans get executed , as much of the Polish center as possible will be made from aluminum , steel and glass recycled from Warsaw 's abundant rubble .
A 20-story mesh spire will stand atop 50 stories of commercial space .
Solar-powered batteries will make the spire glow .
The windows will open .
The carpets wo n't be glued down , and walls will be coated with nontoxic finishes .
To the extent that the $ 150 million budget will allow it , Mr. McDonough will rely on solid wood , rather than plywood or particle board , to limit the emission of formaldehyde .
If Mr. McDonough has his way , the Poles will compensate for the trade center 's emissions of carbon dioxide , a prime suspect in the global atmospheric warming many scientists fear .
The Poles would plant a 10-square-mile forest somewhere in the country at a cost of $ 150,000 , with the center 's developer footing the bill .
The news has n't exactly moved others in Mr. McDonough 's profession to become architectural Johnny Appleseeds .
All architects want to be aware of the ecological consequences of their work , says John Burgee , whose New York firm is designing the redevelopment of Times Square , `` but we ca n't all carry it to that extreme . ''
Karen Nichols , senior associate at Michael Graves 's architecture firm in Princeton , N.J. , says : `` We 're really at the mercy of what the construction industry can and will do readily . ''
Mr. McDonough responds : `` I 'm asking people to broaden their agendas . ''
The son of a Seagram 's executive who was stationed in many countries around the world , Mr. McDonough was born in Tokyo and attended 19 schools in places ranging from Hong Kong to Shaker Heights , Ohio , before entering Dartmouth College .
He earned a master 's degree in architecture from Yale .
His interest in the natural environment dates from his youth .
He and his father still spend time each summer fly-fishing for salmon in Iceland .
Living in Hong Kong , he says , made him sensitive to the limits on food , power and water supplies .
At his first school in the U.S. he was thought a little strange for shutting off open water taps and admonishing his schoolmates to take only brief showers .
He and a Dartmouth roommate established a company that restored three hydroelectric power plants in Vermont .
At Yale , he designed one of the first solarheated houses to be built in Ireland .
Mr. McDonough 's first professional project fully to reflect his environmental ardor was his 1986 design for the headquarters of the Environmental Defense Fund in New York .
The offices took 10,000 square feet of a building with 14-foot ceilings and big , operable windows .
Since the 1970s energy crisis , some efforts to conserve energy by sealing buildings have had an unintended side effect : high indoor pollution .
To reduce it at the fund 's building , workers rubbed beeswax instead of polyurethane on the floors in the executive director 's office .
Jute , rather than a synthetic material , lies under the tacked-down carpets , and the desks are of wood and granite instead of plastic .
The budget was only $ 400,000 .
`` Athens with Spartan means , '' Mr. McDonough says .
The fund 's lawyers work in an Athenian grove of potted trees .
Economists and administrators sit along a `` boulevard '' with street lamps and ficus trees .
In offices , triphosphorous bulbs simulate daylight .
Offices with outside windows have inside windows , too , to let in more real daylight .
`` We proved a healthy office does n't cost more , '' says Frederic Krupp , executive director of the fund .
It `` really looks beautiful and is very light , '' says Ann Hornaday , a free-lance writer who has visited the office for lunch meetings .
But , she says , `` I guess I did n't really notice the trees .
Maybe they were hidden by all the people . ''
Neither the Quilted Giraffe nor the Paul Stuart renovation reflects much of Mr. McDonough 's environmental concern .
The restaurant was conceived as a sparkling , crystalline `` geode . ''
It makes extensive use of stainless steel , silver and aluminum that sets off black granite table tops and a gray terrazzo with zinc-strip floors .
To more than replace the wood from two English oaks used for paneling at Paul Stuart , however , Mr. McDonough and friends planted 1,000 acorns around the country .
The ambitious Warsaw project still awaits approval by city officials .
Its developer is a Polish American , Sasha Muniak .
He had worked with Mr. McDonough on an earlier project and recruited him as architect for the trade center .
The center will provide space for computer hardware and facsimile and other telecommunications equipment , not readily accessible in Poland now , for a growing number of Westerners doing business in Eastern Europe .
Mr. McDonough thinks of the center as the `` Eiffel Tower of Warsaw '' and `` a symbol of the resurgence of Poland . ''
If any nation can use environmentally benign architecture , it is Poland .
Jessica Mathews , vice president of World Resources Institute in Washington , D.C. , says that perhaps a quarter of Poland 's soil is too contaminated for safe farming because of air pollution .
The pollution is also killing forests and destroying buildings that date back to the Middle Ages .
The future of the forest remains uncertain .
Mr. Muniak 's company , Balag Ltd. , has agreed to set aside the money to plant and maintain it , but discussions are still going on over where to place it and how to ensure that it will be maintained .
After all , Mr. Muniak says , `` in Poland there are n't too many people worried about the environment .
They 're more worried about bread on the table .
Pittston Co. 's third-quarter net income plunged 79 % , reflecting the impact of a prolonged and bitter labor strike at its coal operations .
Net sank to $ 3.1 million , or eight cents a share , including $ 789,000 , or two cents a share , reflecting a tax-loss carry-forward .
In the year-ago quarter , net totaled $ 14.7 million , or 38 cents a share , including $ 4 million , or 10 cents a share , reflecting a tax-loss carry-forward .
Revenue slipped 0.7 % to $ 395.3 million from $ 398.3 million .
Pittston also owns Brink 's Inc. , the security service , and Burlington Air Express , the air-freight concern .
In addition to expected losses tied to the labor strike , the coal group has spent almost $ 20 million since the strike began for security , the company said .
As a result , the group 's third-quarter loss widened to $ 9.8 million from the second quarter 's $ 3.6 million .
Pittston continues to hire replacement workers , the company said .
Burlington 's operating profit grew to $ 9.2 million from $ 3.8 million a year earlier , Pittston said .
While `` the tone '' of domestic and international air-freight markets remains sound , seasonal factors are likely to hinder Burlington Air from matching third-quarter results in the fourth quarter , Pittston said .
Brink 's operating profit was about flat with the year-earlier period , reflecting continued pricing and cost pressures .
In New York Stock Exchange composite trading Friday , Pittston closed at $ 18.50 a share , down 12.5 cents .
Does n't anybody here want to win this mayor 's race ?
As they stumble and bumble toward election day two weeks from tomorrow , both Democrat David Dinkins and Republican Rudolph Giuliani are in trouble .
Mr. Dinkins , the Manhattan borough president , can afford more bumbling and stumbling because he holds a comfortable 20-point lead in most of the public-opinion polls .
But , in the past 10 days , he has taken a series of body blows to his pride and his reputation that could adversely affect his ability to govern this tumultuous city should he become New York 's first black mayor .
Ordinarily , a clever opponent would find a way to capitalize on the other side 's misfortunes .
But Mr. Giuliani , a celebrated prosecutor , has had difficulty switching from his crime-busting , finger-pointing mode to a political stance that suggests he might know something about running this big , troubled city .
And now , at the crucial moment , he 's running out of money .
This is the nation 's biggest city and , , its mayor is the nation 's best-known urban politician .
Democrats hoped that Mr. Dinkins could become a highly visible national leader .
Republicans figured that in Mr. Giuliani , the nation 's best-known prosecutor , they had a chance for a huge upset in the heart of Democratic territory and that they would pick up a new political star .
But it has n't worked out that way .
`` Dinkins is a decent but sloppy guy , '' says David Garth , veteran campaign consultant here who has always worked for Mayor Edward Koch , defeated by Mr. Dinkins in the Sept. 12 Democratic primary .
The alternative -- Giuliani -- is ghastly . ''
`` I guess we 'll reluctantly go ahead and do it , vote for Dinkins , '' says Richard Wade , a politically active professor who supported Richard Ravitch , an also-ran in the Democratic primary .
There 's nothing on the other side . ''
`` We 're picking up steam , '' insists Roger Ailes , Mr. Giuliani 's media consultant , whose last big campaign helped put George Bush in the White House .
He adds : `` It just has n't gotten down to the engine room yet . ''
But the steam may never reach the engine room .
For , just as Mr. Giuliani latches on to an issue that has Mr. Dinkins reeling , his campaign desperately needs cash to keep Mr. Ailes 's commercials on the air beyond Wednesday or Thursday .
To help out this week , the White House is dispatching chief of staff John Sununu and three Cabinet members -- HUD 's Jack Kemp , Transportation 's Samuel Skinner and Treasury 's Nicholas Brady , according to Peter Powers , the Giuliani campaign manager .
For Republicans who began this campaign with such high hopes , all of this is deeply frustrating .
Historically , New York is almost always in trouble .
But the trouble it faces now under Democratic rule seems bigger and more daunting than anything it has faced in the past .
This year , the city faces a budget deficit that could become even bigger next year .
And hardly surprising , many residents trying to cope with the city 's other problems are constantly on edge , one ethnic group scrapping with another .
`` People were n't so happy in the 1930s , '' says Thomas Lessner , another local professor and the biographer of the legendary Fiorello LaGuardia , the city 's fusion mayor who built a coalition Mr. Giuliani hopes to emulate .
But , at least , back then they did n't generally direct their anger at each other . ''
The 62-year-old Mr. Dinkins , an ex-Marine , has served as the city clerk and as Manhattan borough president , a job with limited executive responsibilities -LRB- `` I `` I defy you to come up with one major accomplishment of David Dinkins , '' says Mr. Giuliani . -RRB-
He defeated the contentious Mr. Koch in the Democratic primary partly because he seemed to offer hope he could heal the city 's racial and ethnic wounds .
His general-election campaign is almost Reagan-like , all muted pictures and comforting words .
His theme is unity , decency , humanity , bringing New York together again .
Both candidates are negotiating about holding debates , but Mr. Dinkins is widely seen as the major obstacle for scheduling them .
The 45-year-old Mr. Giuliani has run a negative campaign to pick up votes leaning to Mr. Dinkins .
`` He 's got to get Dinkins 's negatives up , '' says Lee Miringoff , director of the Marist College Institute of Public Opinion .
`` But our polls show voters do n't like the attack stuff .
Why , even 20 % of the Republican vote is going to Dinkins . ''
`` It 's assault-weapons politics , '' says John Siegal , Mr. Dinkins 's issues director , insisting there is a strong racist undertone to the Giuliani effort .
For the Giuliani forces , it 's a conundrum .
On the one hand , Mr. Giuliani wants to cut into Mr. Dinkins 's credibility .
On the other , he seeks to convince voters he 's the new Fiorello LaGuardia -- affable , good-natured and ready to lead New York out of the mess it 's in
It has n't helped that he 's waffled on abortion and gay rights , sought the support of both the Liberal and Conservative parties -LRB- he won the Liberal endorsement -RRB- and that he turned to comedian Jackie Mason for help with Jewish voters .
Mr. Mason left the campaign after telling reporters Mr. Dinkins is `` a fancy'shvartzer ' with a moustache . ''
Shvartzer is a derogatory Yiddish word for a black person .
Mr. Dinkins concedes nothing in his ability to stumble and bumble .
He can match Jackie Mason with his own Robert `` Sonny '' Carson , an angry street organizer who was convicted of kidnapping in 1974 .
The Dinkins campaign paid Mr. Carson close to $ 10,000 to get out the vote on primary-election day .
Paper work on how it was spent is incomplete .
Mr. Carson has been charged with being anti-Semitic .
Asked about that the other day , he replied , `` Anti-Semitic ?
I 'm anti-white . ''
More troubling for Mr. Dinkins is his record in personal accounting .
It began in 1973 , when he was being considered for deputy mayor , and a routine check unearthed the extraordinary fact that he had n't paid his income tax for the previous four years .
`` I was always going to do it tomorrow , '' he explained at the time .
And now he 's busily trying to explain an arrangement in which he sold stock in Inner City Broadcasting Co. , headed by his old friend and patron , Percy Sutton , to his son , David Dinkins Jr. , for $ 58,000 .
He had valued the shares at more than $ 1 million two years earlier .
He says he sold the stock to avoid conflict-of-interest problems in his role as a voting member of the city 's Board of Estimate .
He says his son has n't paid for the shares .
`` It looks like serious tax evasion , '' says Mr. Ailes , the Giuliani media consultant .
`` It follows the same pattern as his tax returns .
He waits to talk about it until after he gets caught . ''
`` He simply has n't explained why something worth a million dollars ended up worth $ 58,000 two years later , '' says Mr. Powers , the Giuliani campaign manager .
It 's ludicrous for him to suggest it 's the difference between the'breakup ' value of the shares and their market value . ''
So far though , no one -- not even former U.S. attorney Giuliani -- has been able to pinpoint just what law Mr. Dinkins has broken or just what tax he has evaded .
`` The crime goes to character , '' says Ron Maiorana , a consultant to the Giuliani campaign .
It 's serious stuff .
He evades and ducks .
He 's had a history of deception and this is the latest chapter . ''
`` It makes people think , maybe this guy is n't so squeaky clean after all , '' says Mr. Garth , Mayor Koch 's media consultant .
The result may turn out to be a lot closer than people think .
The long-running scandal surrounding the 1982 collapse of Banco Ambrosiano was reignited by the arrest last week of Rome businessman Flavio Carboni on fraud charges .
Rome magistrates accuse Mr. Carboni and several other people of trying to extort 1.2 billion lire -LRB- $ 880,000 -RRB- from the Vatican in return for documents contained in the briefcase of Roberto Calvi , the Ambrosiano chairman found hanged under London 's Blackfriar 's Bridge shortly before the bank 's collapse .
Banco Ambrosiano , which was Italy 's largest private-sector bank , collapsed in 1982 with $ 1.3 billion of debts .
Most of the money was lent to a series of shell companies in Panama and Luxembourg that were owned , directly or indirectly , by the Vatican bank .
The Vatican , which denies any wrongdoing , paid $ 250 million to the Milan bank 's creditors as a `` goodwill gesture '' in 1985 .
Italian news reports said Mr. Carboni and a colleague obtained 1.2 billion lire in checks from a Vatican official , Pavel Hnilica .
Italian papers speculated the briefcase contained papers either exonerating the Vatican bank from blame in the scandal , or showing that the bank , known as the Istituto per le Opere di Religione , channeled funds to East bloc groups such as Solidarity in Poland .
Neither Mr. Hnilica , Mr. Carboni nor Vatican officials could be reached for comment over the weekend .
This business trust company said its board elected Kieran E. Burke , a consultant to Drexel Burnham Lambert Group Inc. , as chief executive officer , a new post , and as president .
Mr. Burke succeeds Richard D. Manley , who will remain as a consultant to the company .
Both men were unavailable to comment .
The company also named Michael E. Gellert , a director and a major shareholder , to fill the vacant seat of chairman .
Britain 's Serious Fraud Office said it will investigate the circumstances surrounding alleged phantom contracts at Ferranti International Signal PLC 's International Signal & Control unit .
The investigation , which will be coordinated with one already under way in the U.S. , follows the discovery of what Ferranti has called a `` serious '' fraud involving its U.S. subsidiary .
International Signal & Control , Lancaster , Pa. , a defense-equipment manufacturer , was bought by Ferranti in 1987 for # 420 million -LRB- $ 670.3 million -RRB- .
Ferranti has said that it would be forced to write off # 185 million against the phantom contracts , reducing its net asset value by more than half .
The Serious Fraud Office , a division of London 's Metropolitan Police responsible for investigating financial crimes , said its work would take in `` allegations of fraud prior to , surrounding and subsequent to the merger . ''
Ferranti said that it welcomes the investigation and that it will `` cooperate fully . ''
Derek Alun-Jones , Ferranti 's chairman , has said he hoped to pursue legal action against those responsible .
The British defense electronics group has said it will sell # 100 million in assets and may seek a merger to strengthen itself in the wake of its troubles .
Chicago businessmen Bertram M. Lee and Peter Bynoe signed a new agreement to purchase the Denver Nuggets basketball team , but not as principal owners .
On Saturday , the partners said the team would be purchased for $ 54 million by a new group including Comsat Video Enterprises Inc. , a unit of Communications Satellite Corp. based here .
Comsat Video will pay $ 17 million for a 62.5 % interest , with Messrs. Lee and Bynoe putting up $ 8 million for a 37.5 % stake in the team .
Under terms of the sale , Nuggets owner Sidney Shlenker could receive up to $ 11 million in additional payments from the franchise 's future earnings .
Messrs. Lee and Bynoe last July announced a deal that would have made them the first black principal owners of a major professional sports franchise .
But the deal fell apart last week for lack of financing .
Comsat Video is headed by Robert Wussler , who resigned his No. 2 executive post with Turner Broadcasting System Inc. just two weeks ago to take the Comsat position .
Comsat Video , which distributes pay-per-view programs to hotel rooms , plans to add Nuggets games to their offerings , as Mr. Turner did successfully with his Atlanta Hawks and Braves sports teams .
Messrs. Lee and Bynoe will manage the Nuggets ' day-today affairs .
Royal Business Group Inc. said it filed suit in federal court here charging Realist Inc. and its directors with violating federal securities laws `` by engaging in a scheme to prevent '' Royal from acquiring Realist .
Royal , which makes and distributes business forms , owns an 8 % stake in Realist .
Royal contends that Realist failed to disclose material information , including Realist 's negotiations to acquire Ammann Laser Technik AG , to stockholders prior to Realist 's June 6 annual meeting .
Royal 's suit contends that the Ammann acquisition was `` designed to entrench management and thwart Royal 's offer . ''
Royal withdrew its offer to buy Realist , a maker of optical and electronic products based in Menomonee Falls , Wis. , for $ 14.06 a share in July after Realist disclosed the Ammann purchase .
The suit seeks `` in excess of $ 350,000 in damages . ''
A Realist official said the company had n't yet received the full complaint and would n't have a response until it had an opportunity to review it .
Winnebago Industries Inc. , battered by a deepening slowdown in recreational vehicle industry sales , reported a widened fourth-quarter loss and slashed its dividend in half .
The Forest City , Iowa , maker of motor homes said it had a loss of $ 11.3 million , or 46 cents a share , in the quarter ended Aug. 26 .
A year earlier , the company had a deficit of $ 1.5 million , or six cents a share .
The cut in the dividend to 10 cents a share semiannually , from 20 cents , `` would indicate to me they do n't see the problems being fixed real quick , '' said Frank Rolfes , an analyst at Dain Bosworth Inc. in Minneapolis .
Indeed , Winnebago said it started `` several promotional programs '' to spur retail sales in the fall and winter .
The year was already shaping up as a difficult one for the recreational vehicle industry , which makes products such as motor homes , travel trailers , folding campers and van conversions .
With the exception of van conversions , the industry has seen a decline from 1988 's robust sales .
But the rate of the decline snowballed in August , with unit sales to dealers for the month down 10.5 % from a year earlier , according to the Recreation Vehicle Industry Association .
At Winnebago , sales for the quarter fell 6 % to $ 89.5 million from $ 95.4 million a year earlier .
The company attributed the decline to consumers ' concern over interest rates and gas prices -- two key expenses for RV buyers .
`` It 's a large-ticket discretionary purchase , '' said Robert Curran , who follows the industry for Merrill Lynch & Co .
So when there 's talk and concern about the economy , it 's not unreasonable for a portion of the buying public to defer purchases . ''
Mr. Curran expects industry RV sales for all of 1989 to fall about 5 % from 1988 , when sales of 427,300 units were the highest since 1978 .
And he said the weakness could continue in the first half of next year .
But he said the industry has `` a good decade ahead , '' particularly if aging baby boomers fulfill the industry 's dreams by buying RVs .
Winnebago was hit especially hard in the latest downturn because unit sales in its bread-and-butter motor home business tumbled 25 % industrywide in August , and 10.4 % in the first eight months of the year .
The company said it also suffered in the quarter from incentive programs , losses from discontinuing a motor home line and costs of developing a new commercial vehicle , among other things .
The news sent Winnebago stock falling 62.5 cents , to $ 5.25 , in New York Stock Exchange composite trading-a 52-week low .
The dividend cut will prove most costly for John K. Hanson , Winnebago 's founder and chairman .
Based on his control of about 45 % of Winnebago 's 24.7 million shares , his annual dividend income would be cut to about $ 2.2 million from $ 4.4 million .
For the year , Winnebago had a loss of $ 4.7 million , or 19 cents a share , following profit of $ 2.7 million , or 11 cents a share , a year earlier .
Sales rose 2 % to $ 437.5 million from $ 430.3 million .
Bullish bond market sentiment is on the rise again .
As the government prepares to release the next batch of economic reports , the consensus among economists and money managers is that the news will be negative .
And that , they say , will be good for bonds .
`` Recent data have indicated somewhat weaker economic activity , '' said Elliott Platt , director of economic research at Donaldson , Lufkin & Jenrette Securities .
Mr. Platt is advising clients that `` the near-term direction of bond prices is likely to remain upward . ''
Analysts insist that even without help from a shaky stock market , which provided a temporary boost for bonds during the Oct. 13 stock market plunge , bond prices will start to climb on the prospects that the Federal Reserve will allow interest rates to move lower in the coming weeks .
That would be comforting to fixed-income investors , many of whom were badly burned in the third quarter by incorrectly assuming that the Fed would ease .
Investors rushed to buy bonds during the summer as prices soared on speculation that interest rates would continue to fall .
But when it became clear that rates had stabilized and that the Fed 's credit-easing policy was on hold , bond yields jumped and prices tumbled .
Long-term bonds have performed erratically this year .
For example , a group of long-term Treasury bonds tracked by Merrill Lynch & Co. produced a total return of 1 % in the first quarter , 12.45 % in the second quarter and % in the third quarter .
Total return is price changes plus interest income .
Now some investment analysts insist that the economic climate has turned cold and gloomy , and they are urging clients to buy bonds before the rally begins .
Among other things , economists note that consumer spending is slowing , corporate profit margins are being squeezed , business confidence is slipping and construction and manufacturing industries are depressed .
At the same time , last week 's consumer price index showed that inflation is moderating .
Add it all up and it means `` that the Fed has a little leeway to ease its credit policy stance without the risk of rekindling inflation , '' said Norman Robertson , chief economist at Mellon Bank Corp. , Pittsburgh .
I think we will see a federal funds rate of close to 8 % in the next two weeks and 8 % by year end . ''
The federal funds rate , which banks charge each other on overnight loans , is considered an early signal of changes in the Fed 's credit policy .
Economists generally agree that the rate was lowered by the Fed from around 9 % , where it had been since July , to about 8 % in early October on the heels of a weak employment report .
Although the rate briefly drifted even lower following the stock market sell-off that occurred Oct. 13 , it ended Friday at about 8 % .
James Kochan , chief fixed-income strategist at Merrill Lynch , is touting shorter-term securities , which he says should benefit more quickly than longer-term bonds as interest rates fall .
`` Given our forecast for lower rates , purchases made now should prove quite rewarding before year end , '' he said .
Mr. Kochan also likes long-term , investment-grade corporate bonds and long-term Treasurys .
He says these bonds should appreciate in value as some investors , reacting to the recent turmoil in the stock and high-yield junk bond markets , seek safer securities .
`` If the -LCB- Tennessee Valley Authority -RCB- sale is any guide , there appears to be good demand for top-quality , long-term paper from both domestic and overseas accounts , '' he said .
TVA , in its first public debt offering in 15 years , sold $ 4 billion of long-term and intermediate-term securities last week .
Strong investor demand prompted the utility to boost the size of the issue from $ 3 billion .
TVA , which operates one of the nation 's largest electric power systems , is a corporation owned by the federal government .
But persuading investors to buy bonds may be especially tough this week , when the U.S. government will auction more than $ 30 billion of new securities .
Today , the Treasury Department will sell $ 15.6 billion of three-month and six-month bills at the regular weekly auction .
Tomorrow , the Treasury will sell $ 10 billion of two-year notes .
Resolution Funding Corp. , known as Refcorp , a division of a new government agency created to bail out the nation 's troubled savings and loan associations , will hold its first bond auction Wednesday , when it will sell $ 4.5 billion of 30-year bonds .
All of this comes ahead of the government 's big quarterly refunding of the federal debt , which takes place sometime in November .
So far , investors have n't shown much appetite for Refcorp 's initial bond offering .
Roger Early , a portfolio manager at Federated Investors Corp. , said that yields on the so-called bailout bonds are n't high enough to attract his attention .
`` Why should I bother with something that 's an unknown for a very small pickup in yield ? '' he said .
`` I 'm not going to jump on them the first day they come out . ''
He seems to be typical of many professional money managers .
When the size of the Refcorp offering was announced last week and when-issued trading activity began , the bailout bonds were yielding about percentage point more than the Treasury 's benchmark 30-year bond .
On Friday , the yield was quoted at about percentage point higher than the benchmark bond , an indication of weak demand .
Some economists believe that yields on all Treasury securities may rise this week as the market struggles to absorb the new supply .
But once the new securities are digested , they expect investors to focus on the weak economic data .
`` The supply is not a constraint to the market , '' said Samuel Kahan , chief financial economist at Kleinwort Benson Government Securities Inc .
If one thinks that rates are going down , you do n't care how much supply is coming . ''
Friday 's Market Activity
Most bond prices fell on concerns about this week 's new supply and disappointment that stock prices did n't stage a sharp decline .
Junk bond prices moved higher , however .
In early trading , Treasury bonds were higher on expectations that a surge in buying among Japanese investors would continue .
Also providing support to Treasurys was hope that the stock market might see declines because of the expiration of some stock-index futures and options on indexes and individual stocks .
Those hopes were dashed when the stock market put in a relatively quiet performance .
Treasury bonds ended with losses of as much as point , or about $ 2.50 for each $ 1,000 face amount .
The benchmark 30-year bond , which traded as high as 102 during the day , ended at 101 .
The yield on the benchmark bond rose slightly to 7.98 % from 7.96 % .
In the corporate bond market , traders said the new-issue market for junk bonds is likely to pick up following Chicago & North Western Acquisition Corp. 's $ 475 million junk bond offering Friday .
Today , for example , underwriters at Morgan Stanley & Co. said they expect to price a $ 150 million , 12-year senior subordinated debenture offering by Imo Industries Inc .
Traders expect the issue to be priced to yield 12 % .
Shearson Lehman Hutton Inc. said that a $ 150 million senior subordinated discount debenture issue by R.P. Scherer Drugs is expected by the end of the month .
However , despite the big new-issue calendar , many junk bond investors and analysts are skeptical the deals will get done .
`` There are about a dozen more deals coming , '' said Michael McNamara , director of fixed-income research at Kemper Financial Services Inc .
If they had this much trouble with Chicago & North Western , they are going to have an awful time with the rest . ''
Last week , underwriters were forced to postpone three junk bond deals because of recent weakness in the market .
And pressure by big investors forced Donaldson Lufkin & Jenrette Securities Corp. to sweeten Chicago & North Western 's $ 475 million junk bond offering .
After hours of negotiating that stretched late into Thursday night , underwriters priced the 12-year issue of resettable senior subordinated debentures at par to yield 14.75 % , higher than the 14.5 % that had been expected .
The coupon on the issue will be reset in one year at a rate that will give the issue a market value of 101 .
However , the maximum coupon rate on the issue when it is reset is 15.50 % .
Debenture holders also will receive the equivalent of 10 % of the common stock in Chicago & North Western 's parent company .
`` The coupon was raised to induce some of the big players on the fence to come in , '' said a spokesman for Donaldson .
We put a price on the deal that the market required to get it done . ''
The spokesman said the issue was sold out and met with strong interest abroad , particularly from Japanese investors .
In the secondary , or resale , market , junk bonds closed point higher , while investment-grade corporate bonds fell to point .
Sotheby 's Inc. 's gamble in the art-dealing business appears to have paid off .
The New York arm of the London-based auction house auctioned off the estate of John T. Dorrance Jr. , the Campbell 's Soup Co. heir , for $ 131 million last week , a record for a single-owner art collection .
That total was below the $ 140 million the auction house estimated the collection might sell for , but was enough to ensure that an unprecedented financial arrangement Sotheby 's had made with the Dorrance family proved profitable to the auction house .
Sotheby 's provided the Dorrance family a guarantee of at least $ 100 million , and as much as $ 120 million , to obtain the collection , people familiar with the transaction said , thus taking a greater than usual financial interest in the property to be sold .
The Dorrance estate , auctioned off in a series of sales held over four days , included porcelains , furniture and paintings .
An Henri Matisse , auctioned last Wednesday , fetched $ 12.4 million , a world record for the artist .
In addition , a handful of paintings from the Dorrance collection remain to be sold at Sotheby 's annual old masters paintings auction in January .
The Better Business Bureau of San Diego and the state Attorney General 's office entered into a settlement stemming from an investigation of bureau-sponsored business directories published by an outside firm , Better Book Inc .
The settlement stems from charges that Better Book , now defunct , made misrepresentations in selling advertising for the directories and memberships in the bureau from 1984 to 1986 .
Without admitting any guilt , the bureau agreed to several conditions if it again contracts with an outside firm to publish its directories .
The conditions include not misrepresenting how many directories will be distributed , and agreeing to make refunds to directory advertisers if any misrepresentations are involved in the sale .
The Attorney General 's investigation was sparked by lawsuits and charges by angry California businesspeople that they were swindled in a bureau-sponsored directory project contracted by Better Book .
The uproar led to the closing of the Los Angeles Better Business Bureau in late 1987 .
McCaw Cellular Communications Inc. said it obtained `` firm '' financing commitments from three major banks in regard to its offer for 50.3 % of LIN Broadcasting Corp .
Morgan Guaranty Trust , Toronto-Dominion Bank and Provident National Bank , an affiliate of PNC Financial Corp. , jointly committed $ 1.2 billion of financing , subject to certain conditions , McCaw said .
Further , McCaw said the banks expressed confidence that the balance of the $ 4.5 billion bank facility will be committed within the next several weeks by a syndicate of foreign and domestic banks .
Morgan , Toronto-Dominion and Provident are leading that syndicate .
McCaw is offering to buy 22 million shares of LIN for $ 125 each in cash , which would result in McCaw owning 50.3 % of the cellular-phone and broadcasting concern .
The offer is in limbo , however , because LIN has agreed to merge its cellular-phone businesses with BellSouth Corp .
In national over-the-counter trading Friday , LIN shares rose 62.5 cents to close at $ 110.625 .
Beijing lawmakers have called for jails to be built to house prostitutes and for severe punishment , including the death sentence , for anyone who induces or coerces women into prostitution .
The official Xinhua News Agency said the municipal government was discussing a draft bill to give the capital its first anti-prostitution statutes .
It quoted Liu Changyi , deputy director of the Beijing Public Security Bureau , as saying that there were many more people involved in prostitution now than in 1985 , when there were about 100 cases .
Foreigners involved in prostitution will be punished according to the law , and those with sexually transmitted diseases will be expelled from the country , according to the regulations .
The Communists nearly succeeded in eliminating prostitution after taking over in 1949 , but the practice has returned in recent years with the country 's increased exposure to the outside world .
Japan agreed to enforce a decision by an international wildlife conference to ban all trade in ivory , a spokesman for the Ministry of International Trade and Industry said .
Earlier , Japan had said it might file a reservation against the ivory ban decided by ballot at the 103-nation United Nations Conference on International Trade in Endangered Species in Switzerland last week .
The Japanese use 40 % of the world 's ivory .
Italy should close the Leaning Tower of Pisa because it 's a danger to tourists , government-appointed experts said .
`` In some places the stonework is so damaged it shows signs of breaking off , '' scientists and technicians said in a report to Public Works Minister Giovanni Prandini .
Each year , nearly a million people pay about $ 3 to make the spiral climb up 294 steps to the top of the 800-year-old marble tower .
East Germany pledged to reduce alcohol consumption by boosting production of soft drinks and fruit juices .
Trade and Supply Minister Gerhard Briksa said in a letter published in the youth daily Junge Welt that the rise in alcohol consumption in East Germany had been halted ; but to reduce it further , he said , production and supply of other beverages , including fruit juices , should be stepped up .
He added that shops will have to continue reducing their stocks of liquor and avoid displaying them too prominently in the window .
Hong Kong has built a detention center for illegal immigrants from China because China has refused for the past two weeks to accept them back .
The center , close to Hong Kong 's border with China , will be ready today and will be able to house 1,000 inmates , Police Deputy Director Peter Wong said .
The dispute started when China , angry that Hong Kong had allowed dissident swimmer Yang Yang to flee to the U.S. , halted the usual daily transfer of illegal immigrants caught in this British colony , which reverts to Beijing 's control in 1997 .
Sweating under the glare of newly installed television lights , British members of Parliament demanded a halt to the experimental televising of debates .
A group of senior Conservative legislators , complaining the House of Commons was like a sauna , demanded that the experiment be stopped unless the intensity of the lights is reduced .
One Conservative MP , David Wilshire , said : `` I should have a wonderful suntan by Christmas . ''
Debates are due to be broadcast nationally starting Nov. 21 in a six-month experiment .
A majority of Japanese banks are said to be wary of making new loans to Mexico under the Brady plan because they 're uncertain the Mexican economy will remain stable .
Instead , many small and medium-sized banks , and some larger ones , are likely to take one of the other two options open to them under the plan , Japanese banking officials said .
The plan , proposed by U.S. Secretary of State Nicholas Brady , calls for banks either to make new loans or to reduce the principle on existing loans or to cut the interest rate on those existing loans .
The officials said that most Japanese banks prefer the losses they 'd suffer in either of the latter options to the risk of new lending .
But an official at a long-term credit bank explained that since some larger banks have already taken loss provisions for loans to other Third World nations , further write-offs could be viewed as intolerable .
`` They ca n't take the hit '' to their earnings , he said .
As a result , the official said , they may be forced into a no-win situation in which they make risky loans that they could have to write off later .
A poll in male-dominated South Korea put Margaret Thatcher first on a list of most-respected foreign leaders .
The British prime minister was the only woman singled out by respondents , who put Soviet President Mikhail Gorbachev in second place .
The Soviet newspaper Trud reported that Mickey Mouse will appear in a Russian-language comic book to be issued four times a year by Soviet publisher Fizkultura i Sport and Denmark 's Gutenberghus Group .
The comic book will cost about $ 2 .
Ekco Group Inc. , Nashua , N.H. , expects to report that net income in the third quarter , ended Oct. 1 , fell 50 % to 60 % from $ 2.1 million , or 11 cents a share , a year earlier .
Robert Stein , president and chief executive officer , attributed the expected decline partly to the effects of a two-week strike last month at the company 's Masillon , Ohio , bakeware facility .
Softer-than-expected orders in early September also played a role , he said in an interview .
But Mr. Stein said he is `` reasonably confident '' that earnings for the full year will exceed the $ 3.1 million , or 17 cents a share , in 1988 .
That would require fourth-quarter net of more than about 22 cents to 24 cents a share , assuming that Mr. Stein 's third-quarter estimate proves accurate .
In the year-earlier fourth quarter , the company had profit of $ 2.7 million , or 15 cents a share .
Third-quarter revenue is expected to be $ 40 million to $ 45 million , up from $ 38.2 million a year earlier , according to Neil Gordon , treasurer .
The year-earlier periods do n't reflect results of the company 's Woodstream Corp. unit , acquired last January , but include some Canadian operations that were sold at the end of 1988 .
August through October traditionally is the busiest season for the bakeware business , as many retailers use the goods as autumn promotional items .
Mr. Stein said some retailers -- perhaps anxious about minimizing inventories -- appear to have held back on orders in September but have been ordering more heavily in October .
Mr. Stein said Woodstream is `` marginally profitable '' but has n't performed as well as expected .
Woodstream 's Victor-brand mousetraps and other pest-control products are `` doing very well , '' and its plastic storage-case products `` are poised for growth , '' he said .
But the unit 's third segment , wildlife traps , is suffering from a `` depressed market , '' and Ekco is seeking to sell that segment , he said .
Mr. Stein said he expects profit to be higher in 1990 than in 1989 , reflecting a number of measures taken since the acquisition of Ekco Housewares in late 1987 .
Prior to acquiring the housewares business , the company was known as Centronics Corp. ; Centronics had been a maker of computer printers , but Mr. Stein and other officers decided to sell that business after Japanese competitors grabbed a dominant share of the market . -RRB-
Mr. Stein said tighter operating controls have enabled Ekco to reduce inventory levels 25 % to 30 % ; improve on-time delivery of orders to about 95 % from around 70 % ; and to lower the number of labor hours required to produce a unit .
By moving the design of new products in-house -- instead of contracting out the work -- the company also has been able to come up with designs that can be manufactured more efficiently , he said .
In addition to those measures , the company spent heavily earlier this year to install displays at its customers ' retail outlets -- a strategy that Mr. Stein said has helped bolster awareness of the company 's brands .
Ekco 's housewares operation makes kitchen tools and gadgets , as well as bakeware , at factories in the U.S. and Canada .
The main issue in the strike at the Ohio facility was health-care benefits , Mr. Stein said .
The strike ended Oct .
Ekco continues to seek further acquisitions in the consumer-products industry , Mr. Stein said .
He indicated that Ekco may be interested in acquiring another company with revenue in the range of $ 75 million to $ 100 million , partly because mass merchandisers increasingly want to rely on larger , and fewer , suppliers .
After several years of booming business with China , foreign traders are bracing for the biggest slump in a decade .
The imposition of austerity measures , starting last October , already had begun to pinch when the massacre in Tiananmen Square on June 4 and subsequent events tugged the belt far tighter .
Foreign lending has been virtually suspended since then , choking liquidity and hobbling many projects .
And Beijing has pulled back on domestic loans and subsidies , leaving many domestic buyers and export-oriented plants strapped for cash .
Givaudan Far East Ltd. , a Swiss concern that sells chemicals to shampoo and soap factories in China , typifies the problems .
Last year 's retrenchment dried up the working capital of Chinese factories .
The company 's sales flattened during 1989 's first half .
The June killings magnified the problems .
In Canton , Givaudan 's representative office received no orders in June .
At first it attributed the slump to temporary business disruptions , but when no orders were logged in August and September , manager Donald Lai became convinced that business would be bad for many months .
`` Things have grown worse since June 4 , '' Mr. Lai says .
He predicts that sales will drop between 30 % and 40 % from last year 's $ 3 million .
The consumer-products and light-industrial sectors are bearing the brunt of China 's austerity measures , and foreign companies such as Givaudan that deal with those industries are being hit the hardest .
But in general , all foreign-trading companies are feeling the pinch .
`` The import pie will shrink , '' says John Kamm , first vice president of the American Chamber of Commerce in Hong Kong and a China trade specialist .
On the down side , sales could fall as much as 90 % for some companies ; on the upper side , sales will be flat . ''
China 's foreign trade has gone in cycles during the past decade .
The last time that traders experienced a trough was during 1985-86 , when Beijing imposed tough measures to curb imports and conserve foreign exchange .
The current trough is expected to be much deeper , because Beijing has cut off domestic funds from factories for the first time to slow inflation .
In addition , the suspension of loans and export credits from foreign governments and institutions following the June killings have been a big setback .
`` The freeze on new lending is dealing the single biggest blow to trading , '' says Raymond Wong , China manager for Mannesmann AG , a West German machinery-trading company .
Import growth from the year-earlier months slowed to 16 % in July and 7.1 % in August , compared with an average growth rate of 26 % in the first half .
In the first eight months of 1989 , imports grew 21 % , to $ 38.32 billion , down slightly from a growth rate of 23 % a year earlier .
The picture for China 's exports is just as bleak , mainly because of the domestic credit squeeze .
Exports in the first eight months grew only 9 % , to $ 31.48 billion , compared with a growth rate of 25 % a year earlier , according to Chinese customs figures .
The threat to China 's balance of payments is further aggravated by the plunge in its foreign-exchange reserves , excluding gold holdings .
The reserves dropped for the first time in recent years , to $ 14 billion in June from $ 19 billion in April .
The trend has prompted Beijing to intensify efforts to curb imports .
In recent weeks , China 's leaders have recentralized trading in wool and scores of chemical products and commodities .
The Ministry of Foreign Economic Relations and Trade set up a special bureau last month to monitor the issue of import and export licenses .
Beijing 's periodic clampdowns on imports have taught many trading companies that the best way to get through the drought is by helping China export .
For example , Nissho Iwai Corp. , one of the biggest Japanese trading houses , now buys almost twice as many goods from China as it sells to that country .
Three years ago , the ratio was reversed .
But the strategy is n't helping much this time .
`` Both sectors of imports and exports look just as bad , '' says Masahiko Kitamura , general manager of Nissho Iwai 's Canton office .
He expects the company 's trading business to drop as much as 40 % this year .
For a short time after June 4 , it appeared that the trade picture would remain fairly bright .
Many foreign trading offices in Hong Kong were swamped with telexes and telephone calls from Chinese trade officials urging them not to sever ties .
Even the Bank of China , which normally took weeks to process letters of credit , was settling the letters at record speed to dispel rumors about the bank 's financial health .
But when foreign traders tried to do business , they discovered that the eagerness of Chinese trade officials was just a smokescreen .
The suspension of foreign loans has weakened the buying power of China 's national trading companies , which are among the country 's biggest importers .
Business is n't any better on the provincial or municipal level , foreign traders say .
Shanghai Investment & Trust Co. , known as Sitco , is the city 's main financier for trading business .
Sitco had customarily tapped the Japanese bond market for funds , but it ca n't do that any longer .
Foreign traders say the company is strapped for cash .
`` It has difficulties paying its foreign debts , '' says a Hong Kong executive who is familiar with Sitco 's business .
How can it make available funds for purchases ? ''
Foreign traders also say many of China 's big infrastructural projects have been canceled or postponed because of the squeeze on domestic and foreign credit .
Albert Lee , a veteran trader who specializes in machinery sales , estimates that as many as 70 % of projects that had obtained approval to proceed have been canceled in recent months .
`` There are virtually no new projects , and that means no new business for us , '' he says .
Even when new lending resumes , foreign exchange would still be tight because Beijing will likely try to rein in foreign borrowing , which has grown between 30 % and 40 % in the past few years .
And foreign creditors are likely to be more cautious about extending new loans because China is nearing a peak repayment period as many loans start falling due in the next two to five years .
Another reason for the intensity of the trade problems is that Beijing has extended the current clampdown on imports beyond the usual target of consumer products to include steel , chemical fertilizers and plastics .
These have been among the country 's leading imports , particularly last year when there were shortages that led many traders to buy heavily and pay dearly .
But the shortages also spawned rampant speculation and spiraling prices .
To stem speculation , Beijing imposed ceiling prices that went into effect earlier this year .
Traders who had bought the goods at prices above the ceiling do n't want to take a loss on resales and are holding onto their stock .
The resulting stockpiling has depressed the market .
But Beijing ca n't cut back on such essential imports as raw materials for too long without hampering the country 's export business .
Mr. Kamm , the China trade expert , estimates that as much as 50 % of Guangdong 's exports is made up of processed imported raw materials .
Oil Spill Case Shows Liability Fund Flaws
AN UNRESOLVED two-year-old dispute stemming from an Alaskan oil spill has helped spur a drive for tougher federal laws to protect victims of such accidents .
The class-action suit highlights shortcomings of the Trans-Alaska Pipeline Liability Fund , which gets its money from oil companies using the pipeline and compensates those harmed by oil spills .
On July 2 , 1987 , the tanker S.S. Glacier Bay struck a rock and spilled almost 150,000 gallons of oil into the Cook Inlet .
Commercial fishermen and fish processors filed suit in federal court in a claim that has ballooned to more than $ 104.8 million .
Defendants include British Petroleum America ; Trinidad Corp. , the shipper ; and the pipeline liability fund .
The fund was created by the Trans-Alaska Pipeline Act , which provides that the owner or operator of a vessel involved in an oil spill must pay the first $ 14 million in damages .
The fund is required to pay claims up to an additional $ 86 million .
The fund 's purpose is to provide quick and adequate relief .
But the Glacier Bay case , the fund 's first test , shows how easily the fund can be undermined .
Trinidad Corp. is contesting liability .
It claims the Coast Guard failed to chart the rock and refuses to pay damages .
That means the fund is n't obligated to pay anything , at least so far .
The Oil Pollution Act , scheduled to come up for a vote in Congress this fall , would provide that if claimants are n't paid within 90 days of a spill , the liability fund would compensate them and seek reimbursement from the owner or operator of the vessel , says a spokesman for Rep. George Miller -LRB- D. , Calif. -RRB- , a sponsor of the bill .
The spokesman says the `` glitch '' in the statute is `` the worst kind of Catch-22 . ''
Many Law School Grads Find Classes Never End
RECENT LAW school graduates are starting jobs with law firms this fall -- and heading back to class .
Bar associations and consultants are offering more programs to teach associates all they need to know about law but did n't learn in law school .
`` Law school teaches wonderful theory , but it does n't teach the nuts and bolts of practical lawyering , '' says Aaron Weitz , head of a New York County Lawyers ' Association committee that sponsors such a course .
In the past , associates learned the basics from senior lawyers who acted as mentors .
But these days , large firms hire as many as 30 new associates a year , and it 's impossible to personally train everyone , says Joel Henning of Hildebrandt Inc. , a consulting firm that runs training classes .
The Hildebrandt course enables students to brush up on negotiation skills by role playing in simulated deals .
Students also are taught to return clients ' phone calls immediately and to treat the support staff with respect .
Many law firms sponsor their own programs .
At the Baltimore firm of Weinberg & Green , new corporate and banking associates are required to enroll in a 20-class course .
Partners lecture on how to form corporations , draft agreements and defend clients against unwanted tender offers .
Now , clients know that new associates have had some practical training before working on their cases , says James J. Hanks , a partner at the firm .
Los Angeles Creates A Courthouse for Kids
THE CHILDREN of Los Angeles will soon have their own $ 52 million courthouse .
The building , which will handle child abuse , custody and foster care cases , will be `` less formal , less threatening and just basically less grim than most courthouses , '' says Edmund Edelman , chairman of the Los Angeles County Board of Supervisors .
Designs call for an L-shaped structure with a playground in the center .
There will be recreation and movie rooms .
Teens will be able to listen to music with headsets .
Study halls , complete with reference materials , will be available .
And there will be a nurse 's station and rooms for children to meet with social workers .
The building 's 25 courtrooms will be smaller , says Charlene Saunders , a court administrator .
The bench will be lower so the judge seems less intimidating , and walls will be painted in bright colors and covered with murals .
Cases in Los Angeles County involving dependent children are usually heard in the Criminal Courts Building .
`` We need to get the kids away from the criminals into a less traumatic environment , '' says Mr. Edelman .
About 45,000 children in Los Angeles County are under court supervision , Mr. Edelman says , and an average of 1,500 new children are added each month .
The courthouse , to be built in Monterey Park , is expected to open in the spring of 1992 .
Law Firm Management Can Be Quite Rewarding
IT PAYS to follow a management career path -- even at law firms .
That 's the conclusion of a recent study of large law firms conducted by Altman & Weil Inc. , an Ardmore , Pa. , law firm consultant .
Its survey of 96 firms , each with 100 to 1,000 lawyers , shows that managing partners earned an average of $ 395,974 in compensation and cash benefits in the firms ' 1988 fiscal years .
Managing partners who responded to the survey typically spend over half their time supervising their firms ' day-to-day operations and just a little more than a third of their time practicing law .
Partners in the survey who devote most of their time to practicing law earned an average of about $ 217,000 .
Chairman Jamie Whitten -LRB- D. , Miss . -RRB- of the House Appropriations Committee proposed a $ 2.85 billion emergency funding package to assist California 's recovery from last week 's earthquake and extend further aid to East Coast victims of Hurricane Hugo .
The sweeping measure incorporates $ 500 million in small-business loans , $ 1 billion in highway-construction funds and $ 1.25 billion divided between general emergency assistance and a reserve to be available to President Bush to meet unanticipated costs from the two disasters .
The funds would be attached to a stop-gap spending bill required to keep most of the government operating past Wednesday .
The measure is scheduled to be taken up by the Appropriations Committee today .
The panel is expected to add provisions waiving restrictions on the use of federal highway funds and may also shift money within the package to bolster the share for the Small Business Administration .
`` We will support it , we will thank him , and we will augment it where appropriate , '' said Rep. Vic Fazio -LRB- D. , Calif . -RRB- .
Dubbed the `` Dire Emergency Supplemental to Meet the Needs of Natural Disasters of National Significance , '' the measure is vintage Whitten in asserting federal responsibility and in disdaining budget impediments .
`` Such other amounts will be made available subsequently as required , '' the legislation reads , and the new obligations `` shall not be a charge against the Budget Act , Gramm-Rudman-Hollings , or other ceilings .
Moody 's Investors Service Inc. said it lowered the ratings of some $ 145 million of Pinnacle debt because of `` accelerating deficiency in liquidity , '' which it said was evidenced by Pinnacle 's elimination of dividend payments .
Henry Sargent Jr. , Pinnacle executive vice president , said the action `` wo n't really have any effect on us .
We are n't selling bonds right now , and I do n't think it will affect the value of our existing bonds . ''
The rating agency said it lowered the ratings on $ 75 million of the holding company 's convertible subordinated Eurodebentures to B-3 from B-1 .
Moody 's said it also lowered the ratings of $ 70 million of Pinnacle 's MeraBank thrift unit long-term deposits to B-3 from B-2 , and on its subordinated debt to Ca from Caa .
MeraBank 's rating for short-term deposits remains Not Prime .
Securities of MeraBank were placed under review last May , and will remain under review for downgrade , the agency said .
First , the somewhat affected idealism of the 1960s .
Then , the all-too-sincere opportunism of the 1970s and 1980s .
What now ?
To judge from novels that mirror the contemporary scene , we 're back in the age of anxiety .
Where '60s dropouts professed to scorn middle-class life and ambitious yuppies hoped to leave it far behind as they scaled the upper reaches of success , it now seems that so many people feel they 're slipping between the cracks , that middle-class life is viewed with nostalgia or outright longing .
Lisa Zeidner 's third novel , `` Limited Partnerships '' -LRB- North Point Press , 256 pages , $ 18.95 -RRB- is a stylish , funny and thoughtful look at the way love relationships are affected by the pressures of money , or , more specifically , the lack of it .
Nora Worth and Malcolm DeWitt , 33 and 39 respectively , live together in a townhouse in a transitional Philadelphia neighborhood .
Malcolm , a former film-maker turned architect , has just seen his first big chance at a lucrative commission turn to dust with the arrest of his shady , obnoxious client , a fly-by-night real estate developer .
Nora , who still has artistic aspirations , knows she is lucky to be working as a food stylist , prepping pies , burgers , frosty cold drinks and other comestibles to look as appetizing as possible in front of the camera .
After all , she reasons , `` there were housewives with Nikons and degrees from cooking schools in France who would kill for her job . ''
But Nora and Malcolm feel trapped .
They seem to be having the `` worst of both worlds : artistic work with none of art 's integrity and no control over the finished product ; self-employment without fun or profit . ''
It 's a downbeat , `` thirtysomething '' world , in which bright , still youngish people are engaged in a glossy version of day labor , doing free-lance , semi-professional work that brings little satisfaction or security but that they know they should be grateful to do .
Uncertainty dogs every aspect of their lives .
Malcolm faces bankruptcy and an IRS audit , but Nora finds an extra $ 30,000 in her bank account , suddenly increasing her available funds some fifteenfold .
While she is wondering whether to live it up , and do something even more dramatic , say get married , her life is further complicated by the reappearance of an old flame , David , a film critic and actor who always seems to be just on the brink of stardom .
In novels of an earlier vintage , David would have represented excitement and danger ; Malcolm , placid , middle-class security .
The irony in this novel is that neither man represents a `` safe '' middle-class haven : Nora 's decision is between emotional excitement and emotional security , with no firm economic base anywhere .
The characters confront a world in which it seems increasingly difficult to find a `` middle way '' between the extremes of success and failure , wealth and poverty .
In making Malcolm and Nora such wonderfully representative specimens of their class and generation , Ms. Zeidner has somewhat neglected the task of making them distinctively individual characters .
The humor of the story owes much to the fact that no hearts -LRB- even the characters ' own -RRB- are likely to bleed for the plight of health-food eaters .
But readers may well feel the pangs of recognition .
In any case , the foundering middle classes are n't the only ones in trouble -- or whose troubles provide material for fiction .
`` Rascal Money '' -LRB- Contemporary Books , 412 pages , $ 17.95 -RRB- , a novel by consultant and business analyst Joseph R. Garber , tells the story of an innovative , well-run , widely respected computer manufacturing company called PegaSys as it faces a hostile takeover attempt by AIW , a much smaller corporation that is so incompetently managed as to constitute a standing joke in the business world .
Patrician dynamic Scott Thatcher , , initially finds the takeover threat risible .
But , as he and his skilled team soon discover , they 're up against two factors they had n't counted on : first , a business climate in which a failing company with few assets and many debts can borrow against the assets of the successful company it hopes to acquire in order to finance the takeover ; second , that standing behind AIW is a sinister consortium of much bigger , shadier and shrewder foreign interests secretly providing the money and muscle for the deal .
Mr. Garber manages to invest this tale of financial wars with the colorful characters and fast-paced action of a suspense novel .
And like a spy or mystery story , this novel has strong elements of allegory , as the good and evil forces battle it out .
Mr. Garber depicts these moral qualities with the broad brush strokes of a satire that occasionally descends to the realm of cliched caricatures .
Standard-issue portraits of flaky Californians , snobbish homosexuals and Neanderthal union leaders undermine the force of the author 's perceptions .
Yet the heavy-handedness of the satire also can be effective in a book like this : If the head of AIW were not portrayed as an utterly contemptible , malicious dolt , we would not much care whether his schemes were defeated , and would not be so diverted in the process .
Ms. Rubin is a free-lance writer based in Los Angeles .
High-definition television promises to be the TV of tomorrow , so it is a natural multibillion-dollar market .
Although major U.S. manufacturers have all but ceded the main segment of that future business to Japan , not everyone here is ready to give up .
A handful of small U.S. companies are struggling to develop the technology to build the screens for the thin , high-quality televisions that are expected to hang on living room walls by the end of the 1990s .
With only small help from the government , these start-up concerns are trying to compete with the Goliaths of the Japanese consumer electronics industry , which enjoy considerable backing from the Japanese government .
Photonics Technology Inc. of Northwood , Ohio , aims to use a new form of plasma technology to put movie-quality images on a TV display that is 40 inches in diameter but only a few inches thick .
Planar Systems Inc. of Beaverton , Ore. , the largest of these firms , with $ 20 million in annual revenue , has similar plans .
It already has had success in electroluminescence , another promising technology adaptable for high-definition television .
Two other firms , Ovonic Imaging Systems Inc. of Troy , Mich. , and Magnascreen Corp. of Pittsburgh are developing a variation of the flat-panel screens called active-matrix liquid crystal displays .
The new technologies are intended to retire the cathode-ray tube , which accounts for most of the bulk of the conventional TV set .
Replacing the cathode-ray tube with a large , thin screen is the key to the creation of a high-definition television , or HDTV , which is expected to become a $ 30 billion business world-wide within a decade .
Large U.S. companies are interested in other segments of the HDTV business , such as signal-processing and broadcast equipment .
But except for Zenith Electronics Corp. and International Business Machines Corp. , which is collaborating with Toshiba on computer displays , they are poorly positioned to exploit advances in large panels .
General Electric Co. recently sold off its interests in liquid-crystal displays to Thompson-CSF of France .
`` We found the market not developing as we thought it would , '' a GE spokesman says .
The small U.S. firms are persisting because of their strong positions in patents , and because the prize is still there to be seized .
`` No one yet has shown the ability to manufacture these panels '' at commercial costs , says Zvi Yaniv , the president of Ovonic Imaging .
He says he thinks his company is just a few years from doing that .
The Bush administration , hearing conflicting advice about what its role in HDTV should be , is n't doing much for now .
The only material support it is extending to the struggling U.S. industry is $ 30 million in awards from the Pentagon 's Defense Advanced Research Projects Agency .
The DARPA funds are a pittance compared with what Japan and other prospective competitors are spending .
The Commerce Department estimates that Japanese government and industry spending on HDTV research is already over $ 1 billion .
`` Unless it gets more help , the U.S. industry wo n't have a chance , '' says Peter Friedman , Photonics 's executive vice president .
Thus far , almost all of the basic technology relating to high-definition television has come from U.S. laboratories .
But Peter Brody , Magnascreen 's president , says Japanese companies are poised to snatch the technology and put it to commercial use , just as they did with earlier U.S. innovations in color television and video recording .
In the 1970s , Mr. Brody helped develop the first display panels based on active-matrix liquid crystals at Westinghouse Electric Corp. 's research labs in Pittsburgh .
The panels are like oversized semiconductors surfaced with a million or more picture elements , each contributing to the color and tone of a TV image .
In 1979 , however , Westinghouse abandoned the project along with its stake in advanced television .
Mr. Brody left the company to find other backers .
He has a claim to the right to commercialize the Westinghouse patents , but he contends that those patents are being infringed by a number of Japanese producers .
`` Most American investors have just given up , '' Mr. Brody says .
They are n't prepared to compete in an area where the Japanese want to enter . ''
Many critics question the industry 's need for federal support ; the Pentagon justifies its help on national-security grounds .
`` We do n't see a domestic source for some of our -LCB- HDTV -RCB- requirements , and that 's a source of concern , '' says Michael Kelly , director of DARPA 's defense manufacturing office .
So DARPA is trying to keep the industry interested in developing large display panels by doling out research funds .
HDTV already has some military applications , such as creating realistic flight simulations and transmitting information to combat commanders .
The Navy is ordering displays for its Aegis cruisers and the Army wants smaller versions for its Abrams battle tanks .
The Commerce Department also is trying to encourage HDTV because of the benefits that could spin off to the semiconductor and computer industries .
`` It is n't just yuppie television , '' argues Jack Clifford , director of the department 's office of microelectronics and instrumentation .
The industry will create industrial products such as displays for work stations and medical diagnostic equipment before it acquires a mass consumer market . ''
Although some HDTV advocates are calling for other forms of aid , such as antitrust relief for research consortia , the small firms simply would prefer more DARPA funds .
Each claims to possess the right technology and wants just a bit more money to make it commercial .
They also want U.S. trade policy to reflect the Pentagon and Commerce department 's concern over their future .
They all are strongly opposed to a petition from several Japanese TV manufacturers , including Matsushita , Hitachi , and Toshiba , to exempt portable color TVs with liquid-crystal displays from anti-dumping duties that the U.S. imposes on the larger Japanese color TVs .
And they want the U.S. to help them sell overseas .
Planar President James Hurd says he has to pay tariffs as high as 15 % to sell his display panels in Japan and South Korea , while panels from those countries enter the U.S. duty-free .
`` This is n't a technology issue , but an attitude issue , '' he says .
We just have n't learned what it takes to compete .
Burmah Oil PLC , a British independent oil and specialty-chemicals marketing concern , said SHV Holdings N.V. has built up a 7.5 % stake in the company .
The holding of 13.6 million shares is up from a 6.7 % stake that Burmah announced SHV held as of last Monday .
SHV , of the Netherlands , which last year merged its North Sea oil and gas operations with those of Calor Group PLC and which owns 40 % of Calor , was identified as a possible suitor for Burmah .
Burmah said it had n't held any discussions with SHV and that `` no deal of any nature is in contemplation .
The top state environmental official in Massachusetts said Clean Harbors Inc. 's environmental-impact statement for a proposed incinerator in Braintree was inadequate .
The official , John DeVillars , asked Clean Harbors for more information before ruling on a permit for the site .
Critics of the plan , including the town of Braintree , say the incinerator is a health hazard .
Clean Harbors , based in Quincy , said it `` will proceed expeditiously '' to submit the data requested .
Alan McKim , chief executive officer of Clean Harbors said he was `` very much encouraged '' by the official 's praise of Clean Harbors for the quality of some of the data in the report .
Citizens & Southern Corp. said it signed a definitive agreement to acquire Security Pacific Corp. 's New York-based factoring unit .
Terms of the bank holding companies ' agreement were n't disclosed .
Factoring involves the purchase and collection of another company 's receivables .
Citizens , based in Atlanta , said it has about $ 4.6 billion in factored sales annually ; the Security Pacific unit has about $ 1.8 billion annually .
Security Pacific 's factoring business works with companies in the apparel , textile and food industries , among others .
The Office of Thrift Supervision banned B.J. Garman , a former director of the failed Vision Banc Savings Association of Kingsville , Texas , from working in any financial institution insured by the government .
The office , a Treasury Department unit that is the successor to the Federal Home Loan Bank Board , said this was the first announcement of an enforcement action since this year 's thrift-bailout legislation ordered that all such actions by federal banking regulators be made public .
Generally , regulators have n't announced enforcement actions in the past .
Indeed , the OTS said that before the law took effect Aug. 9 , it banned another `` key Vision Banc insider '' from insured financial institutions .
That individual was n't identified .
Vision Banc was placed in government conservatorship in March , and it operates under the control of the Resolution Trust Corp. , the agency created to sell or liquidate insolvent thrifts .
The OTS did n't say specifically why the action was taken against Ms. Garman .
However , it said examiners found a variety of insider dealings at the thrift , including `` extraordinary loan commissions '' paid to a firm associated with Vision Banc officials , and loans diverted through borrowers back to the thrift officials .
Ms. Garman could n't be reached for comment .
Arizona Instrument Corp. said it expects to post a third-quarter net loss of about $ 600,000 , or 25 cents to 27 cents a share , compared with net income of $ 214,000 , or 10 cents a share , a year earlier .
The Tempe , Ariz. , maker of underground fuel-storage systems said the most recent period was affected by customers ' problems complying with recent Environmental Protection Agency regulations .
For the nine months , the company expects to post a net loss of about $ 879,000 , or 35 cents to 40 cents a share , on revenue of $ 6.5 million .
A year earlier , it had a loss of $ 199,203 or nine cents a share , on revenue of $ 7.6 million .
Growth is good .
At least , that 's a theme emerging among many money managers who are anxious both to preserve the handsome stock-market gains they have already achieved this year and to catch the next wave of above-average performers .
They are starting to buy growth stocks .
Remember them ?
The upper echelon of this group were shares of the `` nifty 50 '' companies whose profits of the 1960s and early 1970s grew steadily , if not spectacularly , through thick and thin .
That sort of workhorse performance sounds made to order for a time when corporate profits overall have been weakening from the brisk increases of recent years .
The current flood of third-quarter reports are producing many more negative surprises than positive ones .
Those are unwelcome trends in a year that the Dow Jones Industrial Average has risen 23 % so far , even with the 190.58-point plunge on Oct. 13 ; broader market measures are in the same neighborhood .
The question for investors is , how to protect these returns and yet reach a little for additional gains .
That 's the path of reasoning leading to growth stocks .
`` I think it is a good theme for what looks to be an uncertain market , '' says Steven Einhorn , partner at Goldman Sachs .
Growth stocks may be as big as Philip Morris or medium-sized such as Circuit City Stores , but their common characteristic is a history of increasing profits on the order of at least 15 % to 20 % a year , money managers say .
`` The period when growth stocks should be performing well is when their earnings are growing at a superior rate to the general level of corporate profits , '' says Stephen Boesel , president of T. Rowe Price 's Growth and Income Fund .
Growth stocks also are attractive in periods of market volatility , which many investors and analysts expect in the weeks ahead as everybody tries to discern where the economy is heading .
This kind of jumpy uncertainty reminds John Calverley , senior economist for American Express Bank , of the 1969-72 period , when the industrial average rolled through huge ranges and investors flocked to the shares of companies with proven earnings records , which became known as the `` nifty 50 . ''
And they will again , say money-manager proponents of the growth-stock theme .
Cabanne Smith , president of a money management company bearing his name , predicts that investment companies using computers to identify companies with earnings `` momentum '' will climb on the growth-stock bandwagon as the overall corporate earnings outlook deteriorates further .
He also thinks foreign investors , who are showing signs of more discriminate investing , will join the pursuit and pump up prices .
`` We 're just seeing the beginning of a shift , '' Mr. Smith says .
Mr. Smith recommends Cypress Semiconductor that is currently showing a robust 63 % earnings growth rate .
Ronald Sloan , executive vice president of Siebel Capital Management , likes Wellman Inc. , a company that recycles plastic into synthetic fibers for carpeting .
Mr. Sloan praises the company as recession resistant and notes that it has an annual earnings growth rate of 32 % a year over the past five years .
Wellman stock closed Friday at 39 , up ; Mr. Sloan thinks that in a year it could hit 60 .
Others preach the gospel of buying only blue-chip growth stocks .
Carmine Grigoli , chief market strategist for First Boston , who still says , `` We expect the Dow average -LCB- to be at -RCB- 3000 by mid-1990 , '' nonetheless foresees a sluggish economy in the meantime .
He recommends such blue-chip growth stalwarts as Philip Morris , PepsiCo , CPC International , Reebok International , and Limited Inc .
All have a fiveyear earnings growth rate of more than 20 % a year .
Some money managers are pursuing growth stocks at the expense of those that rise and fall along with the economic cycle .
`` One of the stories of the fourth quarter is that we will get an unusual number of earnings disappointments from companies sensitive to the economy , '' says Mr. Boesel of T. Rowe Price .
James Wright , chief investment officer for Banc One Asset Management , says , `` We 've been selling a disproportionate share of cyclical companies and buying a disproportionate share of high earnings stocks . ''
He recently trimmed his portfolio of International Paper , Dow Chemical , Quantum Chemical , International Business Machines and Digital Equipment .
He is putting money in Dress Barn , Circuit City Stores , Bruno 's , and Rubbermaid .
Big cyclical companies are using `` all the tricks they can to stabilize earnings , '' says Mr. Sloan .
He cites IBM , which reported a 30 % earnings decline in the third quarter , and which last week announced a $ 1 billion buy-back of its shares .
`` What they are telling you is that they do n't have the ability to generate higher returns internally , '' says Mr. Sloan .
`` When they are buying back stock at 10 times earnings , they are suggesting that the rate of return on competing internal projects is below '' returns on the stock .
IBM says it considers its shares a good investment .
But not all strategists or money managers are ready to throw in the towel completely on cyclicals .
Growth stocks may underperform cyclical stocks next year if the Federal Reserve begins to let interest rates drift sufficiently lower to boost the economy .
Goldman Sachs 's Mr. Einhorn , for one , subscribes to that scenario .
He suggests investors think about buying cyclical shares in the weeks ahead , as well as growth issues .
Friday 's Market Activity
Stock prices finished about unchanged Friday in quiet expiration trading .
Traders anticipated a volatile session due to the October expiration of stock-index futures and options , and options on individual stocks .
But there were fewer price swings than expected .
Buy order imbalances on several big stocks were posted by the New York Stock Exchange .
But block trading desks and money managers made a concerted effort to meet the imbalances with stock to sell , one trader said .
As a result , the Dow Jones Industrial Average drifted in narrow ranges in the final hour of trading , and closed 5.94 higher to 2689.14 .
New York Stock Exchange volume was 164,830,000 .
Advancers on the Big Board lagged decliners 662 to 829 .
For the week , the industrial average gained 119.88 points , or 4.7 % , the biggest weekly point advance ever and a better than 50 % rebound from the 190.58 point loss the industrial average logged Oct. 13 .
Broader market averages were little changed in the latest session .
Standard & Poor 's 500-Stock Index gained 0.03 to 347.16 , the Dow Jones Equity Market Index fell 0.02 to 325.50 , and the New York Stock Exchange Composite Index fell 0.05 to 192.12 .
Most of last week 's surge in the industrial average came on Monday , when the average rose 88.12 points as market players snapped up blue-chip issues and shunned the broad market .
That contrast was reflected in the smaller weekly percentage gains recorded by the broader averages .
The S&P 500 rose 4 % , the Dow Jones Equity Market index gained 3.7 % and the New York Stock Exchange composite index added 3.5 % .
The Dow Jones Transportation Average fell 32.71 to 1230.80 amid renewed weakness in the airline sector .
UAL skidded 21 to 168 on 2.2 million shares .
On the week , UAL was down nearly 40 % .
The latest drop followed a decision by British Airways , which had supported the $ 300-a-share buy-out offer for UAL from a labor-management group , not to participate in any revised bid .
British Airways fell 1 to 31 .
While most other airline issues took their cue from UAL , USAir Group rose 1 to 43 on 1.5 million shares amid speculation about a possible takeover proposal from investor Marvin Davis .
USA Today reported that Mr. Davis , who had pursued UAL before dropping his bid Wednesday , has acquired a stake of about 3 % in USAir .
Unocal fell 1 to 52 and Burlington Resources declined to 45 .
At a meeting with analysts , British Petroleum officials dispelled speculation that the company may take over a U.S. oil company , according to Dow Jones Professional Investor Report .
Both Unocal and Burlington had been seen as potential targets for a British Petroleum bid .
Paper and forest-products stocks declined after Smith Barney , Harris Upham & Co. lowered investment ratings on a number of issues in the two sectors , based on a forecast that pulp prices will fall sharply .
International Paper dropped to 51 , Georgia-Pacific fell 1 to 56 1 , to to .
Dun & Bradstreet dropped to 51 on 1.9 million shares on uncertainty about the company 's earnings prospects .
Merrill Lynch cut its rating and 1990 earnings estimate Thursday , citing weakness in its credit-rating business .
Lamson & Sessions , which posted sharply lower third-quarter earnings and forecast that results for the fourth quarter might be `` near break-even , '' fell to 9 .
Winnebago Industries slid 5 .
The company , which reported that its loss for the fiscal quarter ended Aug. 26 widened from a year earlier , cut its semiannual dividend in half in response to the earnings weakness .
MassMutual Corporate Investors fell 3 to 29 after declaring a quarterly dividend of 70 cents a share , down from 95 cents a share .
Stoneridge Resources Inc. said it will begin an offering of rights equivalent to 2.6 million common shares and valued at $ 22,750,000 .
The Bloomfield Hills , Mich.-based real-estate holding company said it will offer the rights at $ 8.75 a share to shareholders of record on Oct. 26 .
The offering is scheduled to expire on Nov. 30 .
The company said it will use the proceeds of the offering for debt reduction and general corporate purposes , including acquisitions .
Stockholders may buy one share at the subscription price for every four shares of stock they own .
Stockholders who exercise all their rights may buy additional shares , the company said .
The company said it has an option to increase the offering by up to 350,000 shares .
The following U.S. Treasury , corporate and municipal offerings are tentatively scheduled for sale this week , according to Dow Jones Capital Markets Report : $ 15.6 billion three-month and six-month bills .
$ 10 billion of two-year notes .
Resolution Funding Corp. to sell $ 4.5 billion 30-year bonds .
Aim Prime Rate Plus Fund Inc. -- 10 million common shares , via PaineWebber Inc .
Allied Capital Corp. II -- 6,500,000 common shares , via Shearson Lehman Hutton Inc .
American Cyanamid Co. -- 1,250,000 common shares , via Merrill Lynch Capital Markets .
Associated Natural Gas Corp. -- 1,400,000 common shares , via Dillon Read & Co .
B & H Crude Carriers Ltd. -- Four million common shares , via Salomon Brothers Inc .
Baldwin Technology Co. -- 2,600,000 Class A shares , via Smith Barney , Harris Upham & Co .
Blockbuster Entertainment Corp. -- $ 250 million -LRB- face amount -RRB- Liquid Yield Option Notes , via Merrill Lynch .
Chemex Pharmaceuticals Inc. -- 1,200,000 units , via PaineWebber .
Immune Response Corp. -- Three million common shares , via Merrill Lynch .
Marsam Pharmaceuticals Inc. -- 1,300,000 common shares , via Smith Barney , Harris Upham .
RMI Titanium Co. -- 15 million common shares , via Salomon Brothers Inc .
Tidewater Inc. -- 4,631,400 common shares , via Salomon Brothers Inc .
Massachusetts -- Approximately $ 230 million of general bonds , consolidated loan of 1989 , Series D , via competitive bid .
Montgomery County , Maryland -- $ 75 million of general consolidated public improvement bonds of 1989 , Series B , via competitive bid .
Trinity River Authority , Texas -- $ 134,750,000 of regional wastewater system improvement revenue bonds , Series 1989 , via competitive bid .
City and County of Honolulu , Hawaii -- $ 75 million of obligation bonds , 1989 Series B , due 1993-2009 , via competitive bid .
Beverly Hills -- $ 110 million of civic center project certificates of participation , Series 1989 , via a Goldman , Sachs & Co. group .
Broward County School District , Florida -- $ 185 million of school district general bonds , via a First Boston Corp. group .
Connecticut Housing Finance Authority -- $ 132,620,000 of housing mortgage revenue -LRB- AMT and non-AMT -RRB- bonds , via a PaineWebber group .
Maryland Stadium Authority -- $ 137,550,000 of sports facilities lease revenue Alternative Minimum Tax -LRB- AMT -RRB- bonds , Series 1989 D , via a Morgan Stanley & Co. group .
Michigan -- $ 80 million of Michigan First general bonds , including $ 70 million of environmental protection project bonds and $ 10 million of recreation project bonds , via a Shearson Lehman Hutton group .
West Virginia Parkways Economic Development and Tourism Authority -- $ 143 million of parkway revenue bonds , Series 1989 , via a PaineWebber group .
San Antonio , Texas -- $ 640 million of gas and electric revenue refunding bonds , via a First Boston group .
MCI COMMUNICATIONS Corp. said it filed a shelf registration with the Securities and Exchange Commission for issuance of as much as $ 750 million of debt securities .
The debt will include medium-term notes sold through Merrill Lynch Capital Markets ; Drexel Burnham Lambert Inc. ; Goldman , Sachs & Co. and Salomon Brothers Inc .
The funds will be used for refinancing existing debt of the Washington , D.C. , concern at lower interest rates and for other general purposes .
The effective date of the registration is to be determined by the SEC .
A group including ESL Partners Ltd. , a Fort Worth , Texas , investment partnership , and Richard E. Rainwater , a former adviser to the Fort Worth Bass family , said it reduced its stake in Anacomp Inc. to 3.6 % of the common shares outstanding .
In a filing with the Securities and Exchange Commission , the group said it sold 1,325,900 Anacomp common shares from Aug. 31 to last Wednesday for $ 4.48 to $ 5.84 a share , resulting in a drop in its holdings to 1,351,662 shares .
No reason was given in the filing for the sales .
An Anacomp official said the Indianapolis computer-services concern had no comment on the group 's share sales .
In March , the group disclosed it held a 7.2 % stake in Anacomp for investment purposes .
It said then it had had and would continue to have discussions with Anacomp 's management concerning its investment .
Home Beneficial Corp. , Richmond , Va. , said it contracted to sell its 50 % interest in a Richmond-area shopping mall to a buyer that was n't identified .
The life-insurance holding company said the sale would result in an after-tax gain of about $ 32 million , or $ 3.09 a share , in the first quarter of
The company also said it will adopt new accounting standards in the first quarter .
The change will result in a charge of about $ 8.5 million , or 82 cents a share , because of an increase in deferred income-tax liability .
In the first quarter of 1988 , the company earned $ 10 million , or 94 cents a share .
Following is a weekly listing of unadited net asset values of publicly traded investment fund shares , reported by the companies as of Friday 's close .
Also shown is the closing listed market price or a dealer-to-dealer asked price of each fund 's shares , with the percentage of difference .
Closed End Bond Funds Flexible Portfolio Funds Specialized Equity and Convertible Funds a-Ex-dividend .
b-As of Thursday 's close .
c-Translated at Commercial Rand exchange rate .
e-In Canadian dollars .
f-As of Wednesday 's close .
A shareholder filed suit , seeking to block Unitel Video Inc. 's proposed plan to be acquired by a new affiliate of closely held Kenmare Capital Corp. for $ 15 a share , or $ 33.6 million .
The suit , which seeks class-action status , was filed in Delaware Chancery Court .
The complaint alleges that the price is `` unfair and grossly inadequate '' and that the defendants are seeking to ensure a `` lockup '' of the purchase of Unitel , thereby discouraging other bids .
It seeks unspecified money damages .
The New York company called the lawsuit without merit .
Shareholders are scheduled to vote on the transaction Nov .
This Toronto closed-end fund cut the annual dividend on its Class A common shares to one Canadian cent from 10 Canadian cents .
The fund invests mainly in gold and silver bullion .
It said the reduced dividend reflects the low price for precious metals .
Greg Davies , Central Fund 's vice president , finance , said losses for the fiscal year ending Oct. 31 could be as high as one million Canadian dollars -LRB- US$ 852,000 -RRB- .
The fund last had a profit in 1985 .
The new dividend rate is payable Nov. 15 to holders of record Oct. 31 .
In American Stock Exchange composite trading Friday , Central Fund was unchanged at $ 4.6875 a share .
Comair Holdings Inc. said in Cincinnati that it bought Airline Aviation Academy , a pilot training school based at Sanford Regional Airport near Orlando , Fla .
Comair said it paid cash but declined to disclose the price .
Comair Holdings is the parent of Comair Inc. , a regional air carrier .
Airline Aviation , which has annual revenue of $ 5 million to $ 6 million , has great growth potential because of the large number of U.S. pilots nearing retirement age , Comair said .
The unit will be renamed Comair Aviation Academy and will continue to be headed by Scott Williams , a son of its founder , Comair said .
The collapse of a $ 6.79 billion buy-out of United Airlines parent UAL Corp. has handed Wall Street 's takeover stock speculators their worst loss ever on a single deal .
Their $ 700 million-plus in estimated paper losses easily tops the $ 400 million in paper losses the takeover traders , known as arbitragers , suffered in 1982 when Gulf Oil Co. dropped a $ 4.8 billion offer for Cities Service Co .
In the six trading days since the UAL labor-management buy-out group failed to get bank financing , culminating Friday with the withdrawal of its partner British Airways PLC , UAL stock has plummeted by 41 % to 168 from 285 .
The arbs may recoup some of their paper losses if the UAL deal gets patched up again , as they did in 1982 when Occidental Petroleum Co. rescued them with a $ 4 billion takeover of Cities Service .
In the meantime , the question faced by investors is : What is UAL stock worth ?
The short answer , on a fundamental basis , is that airline analysts say the stock is worth somewhere between $ 135 and $ 150 a share .
That 's based on a multiple of anywhere between 8.5 to 10 times UAL earnings , which are estimated to come in somewhere around $ 16 a share this year .
Airline stocks typically sell at a discount of about one-third to the stock market 's price-earnings ratio -- which is currently about 13 times earnings .
That 's because airline earnings , like those of auto makers , have been subject to the cyclical ups-and-downs of the economy .
That analysis matches up with stock traders ' reports that , despite the huge drop in the stock , UAL has n't returned to the level at which it could attract buying by institutions solely on the basis of earnings .
So anyone buying the stock now is betting on some special transaction such as a recapitalization or takeover , and must do so using some guesswork about the likelihood of such an event .
One analyst , who asked not to be identified , said he believes that the UAL pilots and management can put together a bid `` in the $ 225 area , '' but that it could take three to four months to close .
At that level , and given the uncertainty , he believes UAL stock should trade closer to
Other observers note that UAL 's board , having accepted a bid of $ 300 a share , might hold out for a new bid much closer to the original level -- even if it means that the management goes back to running the company for a while and lets things return to normal .
By that logic , the closing of a deal could be much further away than three to four months , even though the eventual price might be higher .
Investment bankers following UAL agree that the strongest impetus for an eventual deal is that the pilots have been attempting a buy-out for more than two years , and are n't likely to stop , having come so close to success .
The pilots have a strong financing tool in their willingness to cut their annual compensation by $ 200 million , and to commit $ 200 million from their retirement funds .
On Friday , they also persuaded the UAL flight attendants to join them .
However , investment bankers say that banks are n't likely to lend the almost $ 5 billion that would be necessary for a takeover even at a lower price without someone putting up a hefty wad of cash -- probably even greater than the 17 % in cash put up by investors in the leveraged takeover of Northwest Airlines parent NWA Corp. in July .
Banks want to see someone putting up real cash at risk , that is , subordinate to the bank debt in any deal .
That way , they figure , someone else has an even stronger motivation to make sure the deal is going to work , because they would be losing their money before the banks lost theirs .
Banks also want to be able to call someone on the telephone to fix a problem with a deal that goes bad -- preferably someone other than a union leader .
That leaves the pilots still in need of cash totaling around $ 1 billion -- far more than either they or the flight attendants can lay their hands on from retirement funds alone .
One obstacle to the pilots ' finding such a huge amount of cash is their insistence on majority ownership .
Investors such as Marvin Davis of Los Angeles who have sought airline ownership this year have insisted they , not the pilots , must have control .
One way out of that dilemma could be a partial recapitalization in which the pilots would wind up sharing the value of their concessions with public shareholders .
The pilots could borrow against the value of their concessions , using the proceeds to buy back stock from the public and give themselves the majority control they have been seeking .
But it is n't clear that banks would lend sufficient money to deliver a big enough price to shareholders .
The lack of any new cash probably would still leave the banks dissatisfied .
In advising the UAL board on the various bids for the airline , starting with one for $ 240 a share from Mr. Davis , the investment bank of First Boston came up with a wide range of potential values for the company , depending on appraisal methods and assumptions .
Using the the NWA takeover as a benchmark , First Boston on Sept. 14 estimated that UAL was worth $ 250 to $ 344 a share based on UAL 's results for the 12 months ending last June 30 , but only $ 235 to $ 266 based on a management estimate of results for 1989 .
First Boston 's estimates had been higher before management supplied a 1989 projection .
Using estimates of the company 's future earnings under a variety of scenarios , First Boston estimated UAL 's value at $ 248 to $ 287 a share if its future labor costs conform to Wall Street projections ; $ 237 to $ 275 if the company reaches a settlement with pilots similar to one at NWA ; $ 98 to $ 121 under an adverse labor settlement , and $ 229 to $ 270 under a pilot contract imposed by the company following a strike .
And using liquidation value assuming the sale of all UAL assets , First Boston estimated the airline is worth $ 253 to $ 303 a share .
Unfortunately , all those estimates came before airline industry fundamentals deteriorated during the past month .
American Airlines parent AMR and USAir Group , both subject to takeover efforts themselves , have each warned of declining results .
Some analysts do n't expect a quick revival of any takeover by the pilots .
The deal has , as one takeover expert puts it , `` so many moving parts .
I do n't see anybody who 's sophisticated getting his name associated with this mess until the moving parts stop moving . ''
In addition to the need for another cash equity investor , the other moving parts include : the pilots themselves , who can scuttle rival deals by threatening to strike ; the machinists union , the pilots ' longtime rivals who helped scuttle the pilots ' deal ; and regulators in Washington , whose opposition to foreign airline investment helped throw the deal into doubt .
In the meantime , the arbs are bleeding .
Wall Street traders and analysts estimate that takeover stock traders own UAL stock and options equal to as many as 6.5 million shares , or about 30 % of the total outstanding .
Frank Gallagher , an analyst with Phoenix Capital Corp. in New York , estimates that the arbs paid an average of about $ 280 a share for their UAL positions .
That would indicate that the arbs have paper losses on UAL alone totalling $ 725 million .
UAL Corp . -LRB- NYSE ; Symbol : UAL -RRB-
Business : Airline
Year ended Dec. 31 , 1988 :
Sales : $ 8.98 billion
Net income : $ 599.9 million ; or $ 20.20 a share
Second quarter , June 30 , 1989 : Per-share earnings : $ 6.52 vs. $ 5.77
Average daily trading volume : 881,969 shares
Common shares outstanding : 21.6 million
Eastern Enterprises , bolstered by improved tonnages in its marine-shipping unit , had a narrower third-quarter net loss of $ 1.1 million , or five cents a share .
Last year , Eastern had a quarter loss of $ 1.7 million , or eight cents a share .
Quarter revenue rose 44 % to $ 160.1 million from $ 111.2 million a year ago .
The Weston , Mass. , utilities and marine-transport concern said results for the third quarter , usually a money-losing one because of the seasonality of the gas business , were also aided by higher gas sales and the May 1989 acquisition of Water Products Company .
For the nine months , Eastern had net income of $ 41.8 million , or $ 1.80 a share , up 23 % from $ 33.9 million or $ 1.46 a share a year ago .
Revenue grew 24 % to $ 614.5 million from $ 497.1 million .
Convex Computer Corp. , continuing its rapid growth while other computer companies falter , reported an 87 % increase in third-quarter net income from a year earlier and a 50 % increase in revenue .
Net was $ 3.1 million , or 16 cents a share , up from $ 1.6 million , or nine cents a share .
Revenue was $ 41.2 million , up from $ 27.5 million .
For the nine months , net was $ 7.7 million , or 41 cents a share , up 97 % from $ 3.9 million , or 22 cents a share , a year earlier .
Revenue was $ 111.9 million , up 50 % from $ 74.8 million .
Convex makes supercomputers that sell for up to $ 2 million and has an installed base of more than 550 systems and 340 customers world-wide .
During the third quarter , it said , it won several significant contracts , including a five-year contract with the National Institutes of Health valued at an estimated $ 8 million .
Earlier this month , Convex made a bid to outflank other supercomputer competitors like Digital Equipment Corp. and International Business Machines Corp. by adopting an open set of standards and introducing new hardware and software to link different systems .
The new products allow customers to add Convex machines to established systems made by other manufacturers , which `` opens up a phenomenal market for us , '' said Robert J. Paluck , Convex 's chairman , president and chief executive .
Convex also recently agreed to use Posix , a standard for the computer language called UNIX .
Posix is one of three or four versions of UNIX , but it is increasingly required by the federal government as it tries to standardize its computer systems .
Most other supercomputer manufacturers have yet to adopt the Posix standard , Mr. Paluck said , adding that they prefer to maintain proprietary systems that lock in customers .
`` They want a lobster trap -- once you get in , you ca n't get out , '' he said .
But the customer does n't want that . ''
Convex closed in over-the-counter trading on Friday at $ 15.375 a share , down 12.5 cents .
Troubled Saatchi & Saatchi Co. has attracted offers for some of its advertising units , with potential suitors including Interpublic Group , but has rejected them , people familiar with the company said .
Industry executives said Interpublic approached Saatchi in August about buying its Campbell-Mithun-Esty unit , but was turned down by Chairman Maurice Saatchi .
More recently , Interpublic inquired about one of Saatchi 's smaller communications companies -- identified as the Rowland public relations firm by several industry executives -- but again was rebuffed , they said .
Interpublic 's chairman and chief executive officer , Philip Geier Jr. , made the pitches in visits to Mr. Saatchi in London , the executives said .
A Saatchi spokesman declined to comment about Interpublic .
But the spokesman confirmed that Saatchi has received several inquiries from companies interested in acquiring its Campbell-Mithun and Rowland units .
He added , `` We have no intention of selling either business . ''
Interpublic declined comment .
The offers come as Saatchi is struggling through the most troubled period in its 19-year history .
Takeover speculation has been rife , its consulting business is on the block , and its largest shareholder , Southeastern Asset Management , has said it 's been approached by third parties regarding a possible restructuring .
Analysts have continually lowered their earnings estimates for the company , and their outlook , at least for the short term , is bleak .
In the midst of the current turmoil , Saatchi is attempting to shore up its ad businesses .
It named a new chief executive officer , former IMS International head Robert Louis-Dreyfus .
It rebuffed an offer by Carl Spielvogel , head of Saatchi 's Backer Spielvogel Bates unit , to lead a management buy-out of all or part of Saatchi .
And last week , people close to Saatchi said Maurice Saatchi and his brother , Charles , would lead a buy-out if a hostile bid emerged .
But Saatchi 's troubles have only whipped up interest among outsiders interested in picking off pieces of its ad businesses .
While Saatchi 's major agency networks -- Backer Spielvogel and Saatchi & Saatchi Advertising -- would be difficult for any ad firm to buy because of potential client conflicts , its smaller businesses are quite attractive .
Campbell-Mithun-Esty , for example , has had big problems at its New York office , but offers strong offices in other areas of the country , including Minneapolis and Chicago .
That would would make it appealing to a network such as Interpublic that already has a healthy New York presence .
While there would be some client conflicts , they would n't be nearly as onerous as with Saatchi 's other agencies . -RRB-
Campbell-Mithun also would be a sizable addition to an agency network : It has billings of about $ 850 million and blue-chip clients including General Mills , and Dow Brands .
Rowland , meanwhile , has expanded aggressively , and now ranks as the fifth-largest U.S. public relations firm , according to O'Dwyer's Directory of Public Relations Firms .
It would be attractive to an agency such as Interpublic , one of the few big agency groups without an affiliated public relations firm of its own .
Other Saatchi units include ad agency McCaffrey & McCall , which has the Mercedes account and which has been attempting to buy itself back ; and Howard Marlboro , a sports and event marketing firm .
Despite Saatchi 's firm stand against selling its ad units , U.S. analysts believe the company may ultimately sell some of the smaller units .
Mr. Louis-Dreyfus , in a recent interview , said he might sell `` a marginal agency or office . ''
Analysts believe he may ultimately dispose of some of the non-advertising businesses .
Prudential 's Final Four
Prudential Insurance Co. of America said it selected four agencies to pitch its $ 60 million to $ 70 million account .
In addition to Backer Spielvogel Bates , a Saatchi unit that has handled the account since 1970 , the other agencies include Lowe Marschalk , a unit of the Lowe Group ; Grey Advertising ; and WPP Group 's Scali , McCabe , Sloves agency .
All agencies are New York-based .
A spokesman for the insurance and financial services firm , based in Newark , N.J. , said it hopes to make a decision within three to four months .
Jamaica Fires Back
The Jamaica Tourist Board , in the wake of Young & Rubicam 's indictment on charges that it bribed Jamaican officials to win the account in 1981 , released a scathing memo blaming the agency for the embarrassing incident .
The memo attempts to remove the tourist board as far as possible from the agency , which pleaded innocent to the charges .
Among other things , the memo contends that Young & Rubicam gave false assurances that the investigation would n't uncover any information that would `` embarrass the government of Jamaica or the Jamaica Tourist Board . ''
It also contends that Young & Rubicam never told the tourist board about its relationship with Ad Ventures , a Jamaican firm hired by the agency .
The U.S. indictment charges Ad Ventures was a front used to funnel kickbacks to the then-minister of tourism .
The memo also chastises the agency for the timing of its announcement Thursday that it would no longer handle the $ 5 million to $ 6 million account .
The agency declined comment , but said it will continue work until a new agency is chosen .
Ad Notes .
NEW ACCOUNT : American Suzuki Motor Corp. , Brea , Calif. , awarded its estimated $ 10 million to $ 30 million account to , Los Angeles .
Also participating in the finals was Los Angeles agency Hakuhodo Advertising America .
American Suzuki 's previous agency , , did n't participate .
AYER TALKS : N W Ayer 's president and chief executive officer , Jerry J. Siano , said the agency is holding `` conversations '' about acquiring Zwiren Collins Karo & Trusk , a midsized Chicago agency , but a deal is n't yet close to being completed .
WHO'S NEWS : John Wells , 47 , former president and chief executive of N W Ayer 's Chicago office , was named management director and director of account services at WPP Group 's J. Walter Thompson agency in Chicago .
Shelly Lazarus , 42 , was named president and chief operating officer of Ogilvy & Mather Direct , the direct mail division of WPP Group 's Ogilvy & Mather agency .
Grand Metropolitan PLC , the United Kingdom food and beverage group that owns Pillsbury Inc. of the U.S. , announced a reshuffling of board-level executive duties intended to fit the company 's recent expansion .
David Nash , formerly group finance director at Cadbury Schweppes PLC , will become Grand Met 's first group finance director in January .
In a statement , Grand Met said its recent `` growth and wider geographic spread '' made it necessary to create the new position .
The company also reassigned several executive responsibilities .
David Tagg , formerly in charge of gambling operations , was appointed chief executive for retailing and property .
Peter Cawdron , group strategy development director , and Bill Shardlow , group personnel director , will become part of the board 's management committee .
David Baltimore , who has just been named president of Rockefeller University , already knows what it 's like to go through life with `` Nobel laureate '' appended to one 's name .
He is currently experiencing what it 's like to have the phrase , `` under investigation for scientific fraud , '' also attached to his name .
The Nobel committee made the first addition ; John Dingell 's congressional committee created the second .
Both of Dr. Baltimore 's public faces have been on view the past few weeks while he was under consideration to succeed Joshua Lederberg as head of the prestigious Rockefeller research institution .
It came to light that a substantial number of Rockefeller 's faculty were upset over or even opposed to Dr. Baltimore 's impending appointment .
They were disturbed at what they regarded as Dr. Baltimore 's confrontational attitude toward the Dingell committee , which held hearings on a dispute over the lab notebooks of a researcher who had co-authored a scientific paper with Dr. Baltimore .
Readers of these columns -LRB- `` The Science Police , '' May 15 -RRB- will recall that Dr. Baltimore was merely the most well-known part of the Dingell committee 's larger investigation , which touched MIT , Tufts , Duke , the National Institutes of Health and elsewhere .
Rep. Dingell even managed to enlist the services of the Secret Service in his investigation of the Baltimore paper .
Insofar as Mr. Dingell has a special interest in NIH and the institutions that receive its funding , the Rockefeller scientists were no doubt discomfited by Dr. Baltimore 's unflattering public opinion of this congressional patron , whose behavior reminded Dr. Baltimore of the McCarthy era .
This well may be the first time that the venerable Rockefeller University has brushed up publicly against the intimidations now common in American science .
John Dingell demagogues a David Baltimore , animal-rights activists do $ 3.5 million of damage to labs at the U.Cal-Davis , Meryl Streep decries the horrors of chemistry on talk shows , Jeremy Rifkin files lawsuits in federal court to thwart biotech experiments , and Dutch-elm-disease researcher Gary Strobel 's own colleagues at Montana State denounce him for `` violating '' EPA rules .
Scientists are mistaken who still think that the anti-science movement in this country is n't their concern or that a David Baltimore could have somehow placated a John Dingell .
Mr. Dingell , by the way , has decreed another NIH investigation of the Baltimore paper , adding to several previous investigations .
Something other than what most scientists would recognize as the truth is being sought here . -RRB-
Fortunately , there are signs that increasing numbers of scientists understand the necessity of speaking out .
David Hubel , a Nobel laureate at Harvard , has taken the lead in defending research with animals , as has Dr. Michael DeBakey .
NASA defended itself vigorously and successfully against a Rifkin suit to block the Galileo launch .
Scientists need to understand that while they tend to believe their work is primarly about establishing new knowledge or doing good , today it is also about power .
In a media-linked world , scientists may earn wide praise and even Nobels for their work , but they also attract the attention of people who wish to gain control over the content , funding and goals of that work .
When a David Baltimore -- or the next target -- decides it is better to stand up to these forces , his fellow scientists would do well to recognize what is fundamentally at stake , and offer their public support .
Wisconsin Toy Co. said it definitively agreed to acquire closely held Everything 's a Dollar Inc. of Virginia Beach , Va. , for stock currently valued at about $ 4.7 million .
The Milwaukee toy retailer said the agreement calls for Everything 's a Dollar holders to receive for their holdings a total of 354,600 newly issued Wisconsin Toy shares .
Wisconsin Toy currently has about 4.7 million shares outstanding .
A company official said Arthur Borie , until January chief operating officer of Pic 'N Save Inc. , will buy a 20 % stake in the new Wisconsin Toy subsidiary , and will act as head of Everything 's a Dollar .
Wisconsin Toy has 71 retail stores , primarily in discount settings .
Everything 's a Dollar operates 60 specialty-retail stores .
While welcoming Nicholas McInnes 's Sept. 18 letter offering corrections to your `` World-Wide Tax Revolution '' table -LRB- editorial page , Aug. 29 -RRB- , I am surprised that he neglected other errors that , for some of us , strike close to home .
As a Channel Islander , I was amazed to see my birthplace listed as one of `` 86 countries with an income tax . ''
Despite a history of heated local debate on the topic , my passport clearly reads `` British citizen . ''
Whether Mr. McInnes 's oversight is merely a sign of a mainlander 's benign neglect is a question my fellow Channel Islanders -LRB- and friends on the Isle of Man -RRB- will continue to ponder .
Roland J. Hawkins , chairman of Jet Vacations Inc. , was elected to the board of this cruise line .
The board expands to seven members .
, under OMB Director Richard Darman 's formulation that `` if it looks like a duck , walks like a duck and quacks like a duck , it 's a duck . ''
George Bush is quite clear : No new ducks .
But what about all those non-duck ducks flapping over Washington ?
We see a whole flock of programs that will impose significant costs on the American economy in the form of burdensome regulation and higher liabilities .
Federal child care -LRB- quack -RRB- .
The Clean Air bill -LRB- quack -RRB- .
The disabled-workers bill -LRB- quack , quack -RRB- .
The Bush White House is breeding non-duck ducks the same way the Nixon White House did : It hops on an issue that is unopposable -- cleaner air , better treatment of the disabled , better child care .
It comes up with a toned-down version of a Democratic proposal .
The bill gets signed into law and then the administration watches helplessly , wondering where all the `` unexpected '' costs came from .
Consider , for instance , the very fat fowl known as federalized child care .
The President came up with a good bill , but now may end up signing the awful bureaucratic creature hatched on Capitol Hill .
It would create 38,000 local day-care commissions , answerable to the Department of Health and Human Services .
They 'd determine where parents could store their kids during the day , and they 'd regulate the storage facilities .
The initial costs are said to be in the $ 2 billion a year range , but that 's only the beginning .
New entitlements tend to grow , creating a rationale for new taxes .
The administration claims that its Clean Air bill will cost businesses between $ 14 billion and $ 19 billion annually , but economist Michael Evans estimates that the costs for firms will actually be in the $ 60 billion a year range .
The House bill also distorts economic efficiency in all sorts of perverse ways .
For example , the administration proposal imposes extremely tough emissions standards on new power plants .
So instead of building more efficient modern plants , utilities stick scrubbers on the old plants .
The money spent on scrubbers is diverted from planned research on new , cleaner technology .
The bill also imposes the California auto-emissions standards on all cars nationwide , as if a car registered in Big Sky , Montana , needed to be as clean as one driven in Los Angeles .
Proponents of the nationwide standards say the cost for car buyers would be about $ 500 per car .
Other analysts say that estimate is low .
Nobody knows how many billions of dollars the Americans With Disabilities Act will cost , because nobody knows what the bill entails .
It is an intentionally vague document that will create a wave of litigation .
Judges will write the real bill as suits roll through the courts .
Lawyers will benefit .
Private companies , and ultimately their customers , will end up footing the huge bill .
The effect of Nixon era non-duck ducks was an economy clogged up with regulations and distortions .
All this was recognized and documented in the succeeding years by economists , some of whom worked in the Reagan administration to lift this burden from the American people , states and local governments .
Running for President in 1980 and 1988 , George Bush also persuasively diagnosed the economic stagnation of the 1970s .
In fact , during last year 's campaign , the entire nation constantly heard Mr. Bush tout his accomplishments as head of the Task Force on Regulatory Relief .
`` Government continues to inhibit the productivity of our citizenry and the international competitiveness of American business , '' the vice president declared when he was head of the task force .
But with the impending passage of these new programs , Mr. Bush will surely be sending many people hurtling back into the regulatory thicket that he had helped cut back .
By 1986 , the number of federal regulators was down to about 103,000 .
Then it turned up , and by one estimate the number will be up to about 109,000 regulators by next year .
Holding the dam on taxes is the most important task of the Bush presidency .
We would have thought by now , though , that there was a significant core of people involved in government life who understood that direct taxation is n't the only way to slow down an economy .
It is merely the most obvious .
What is even more ironic is that all over the world nations are learning that well-intentioned public programs often backfire .
But while they are unloading these burdens , the United States is close to creating three more big ones .
The Bush administration ought to be setting aside some of its buckshot for the non-duck ducks .
Confidence in the pound is widely expected to take another sharp dive if trade figures for September , due for release tomorrow , fail to show a substantial improvement from July and August 's near-record deficits .
Chancellor of the Exchequer Nigel Lawson 's restated commitment to a firm monetary policy has helped to prevent a freefall in sterling over the past week .
But analysts reckon underlying support for sterling has been eroded by the chancellor 's failure to announce any new policy measures in his Mansion House speech last Thursday .
This has increased the risk of the government being forced to increase base rates to 16 % from their current 15 % level to defend the pound , economists and foreign exchange market analysts say .
`` The risks for sterling of a bad trade figure are very heavily on the down side , '' said Chris Dillow , senior U.K. economist at Nomura Research Institute .
`` If there is another bad trade number , there could be an awful lot of pressure , '' noted Simon Briscoe , U.K. economist for Midland Montagu , a unit of Midland Bank PLC .
Forecasts for the trade figures range widely , but few economists expect the data to show a very marked improvement from the # 2 billion -LRB- $ 3.2 billion -RRB- deficit in the current account reported for August .
The August deficit and the # 2.2 billion gap registered in July are topped only by the # 2.3 billion deficit of October 1988 .
Sanjay Joshi , European economist at Baring Brothers & Co. , said there is no sign that Britain 's manufacturing industry is transforming itself to boost exports .
At the same time , he remains fairly pessimistic about the outlook for imports , given continued high consumer and capital goods inflows .
He reckons the current account deficit will narrow to only # 1.8 billion in September .
However , Mr. Dillow said he believes that a reduction in raw material stockbuilding by industry could lead to a sharp drop in imports .
Combined with at least some rebound in exports after August 's unexpected decline , the deficit could narrow to as little as # 1.3 billion .
Mr. Briscoe , who also forecasts a # 1.3 billion current account gap , warns that even if the trade figures are bullish for sterling , the currency wo n't advance much because investors will want to see further evidence of the turnaround before adjusting positions .
Nevertheless , he noted , `` No one will want to go into the trade figures without a flat position '' in the pound .
Meanwhile , overall evidence on the economy remains fairly clouded .
In his Mansion House speech , Mr. Lawson warned that a further slowdown can be expected as the impact of the last rise in interest rates earlier this month takes effect .
U.K. base rates are at their highest level in eight years .
But consumer expenditure data released Friday do n't suggest that the U.K. economy is slowing that quickly .
The figures show that spending rose 0.1 % in the third quarter from the second quarter and was up 3.8 % from a year ago .
This compares with a 1.6 % rise in the second from the first quarter and a 5.4 % increase from the second quarter of 1988 .
Mr. Dillow said the data show the economy `` is still quite strong , '' but suggestions that much of the spending went on services rather than consumer goods should reduce fears of more import rises .
Certainly , the chancellor has made it clear that he is prepared to increase interest rates again if necessary to both ensure that a substantial slowdown does take place and that sterling does n't decline further .
Thursday , he reminded his audience that the government `` can not allow the necessary rigor of monetary policy to be undermined by exchange rate weakness . ''
Analysts agree there is little holding sterling firm at the moment other than Mr. Lawson 's promise that rates will be pushed higher if necessary .
And , they warn , any further drop in the government 's popularity could swiftly make this promise sound hollow .
Sterling was already showing some signs of a lack of confidence in Mr. Lawson 's promise Friday .
In European trading it declined to $ 1.5890 and 2.9495 marks from $ 1.5940 and 2.9429 marks late Thursday .
Economists suggested that if the pound falls much below 2.90 marks , the government will be forced to increase rates to 16 % , both to halt any further decline and ensure that the balance of monetary policy remains unchanged .
Friday 's Market Activity
The dollar posted gains in quiet trading as concerns about equities abated .
Foreign exchange dealers said that the currency market has begun to distance itself from the volatile stock exchange , which has preoccupied the market since Oct. 13 , when the Dow Jones Industrial Average plunged more than 190 points .
Currency analysts predict that in the coming week the foreign exchange market will shift its focus back to economic fundamentals , keeping a close eye out for any signs of monetary easing by U.S. Federal Reserve .
Late in the New York trading day , the dollar was quoted at 1.8578 marks , up from 1.8470 marks late Thursday in New York .
The U.S. currency was also changing hands at 142.43 yen , up from 141.70 yen in New York late Thursday .
In Tokyo on Monday , the U.S. currency opened for trading at 141.95 yen , up from Friday 's Tokyo close of 141.35 yen .
On the Commodity Exchange in New York , gold for current delivery settled at $ 367.30 an ounce , up 20 cents .
Estimated volume was a light 2.4 million ounces .
In early trading in Hong Kong Monday , gold was quoted at $ 366.50 an ounce .
East Rock Partners Limited Partnership said it proposed to acquire A.P. Green Industries Inc. for $ 40 a share .
In an Oct. 19 letter to A.P. Green 's board , East Rock said the offer is subject to the signing of a merger agreement by no later than Oct. 31 .
The letter , attached to a filing with the Securities and Exchange Commission , said the approval is also contingent upon obtaining satisfactory financing .
An A.P. Green official declined to comment on the filing .
The $ 40-a-share proposal values the company at about $ 106.6 million .
A.P. Green currently has 2,664,098 shares outstanding .
Its stock closed at $ 38 , up $ 1.875 , in national over-the-counter trading .
The company is a Mexico , Mo. , maker of refractory products .
East Rock also said in the filing that it boosted its stake in A.P. Green to 8.7 % .
It now holds 233,000 A.P. Green common shares , including 30,000 shares bought last Thursday for $ 35.50 to $ 36.50 a share .
New York-based John Kuhns and Robert MacDonald control East Rock Partners Inc. , the sole general partner of East Rock Partners L.P .
The sole limited partner of the partnership is Westwood Brick Lime Inc. , an indirect subsidiary of Westwood Group Inc .
Both Westwood Brick and Westwood Group are based in Boston .
Freight rates , declining for most of the decade because of competition spurred by deregulation , are bottoming out , turning upward and threatening to fuel inflation .
Trucking , shipping and air-freight companies have announced rate increases , scheduled for this fall or early next year , reflecting higher costs and tightened demand for freight transport .
Major shippers say they expect freight rates to rise at least as fast as inflation and maybe faster in the next few years .
That 's a big change from recent years when freight haulage was a bright spot for U.S. productivity , helping to restrain inflation and make U.S. industry more competitive abroad .
`` Demand has caught up with the supply of certain types of freight transportation , and rates are starting to move up '' at a rate `` close to or slightly more than the inflation rate , '' said Clifford Sayre , director of logistics at Du Pont Co .
Shippers surveyed recently by Ohio State University said they expect their freight-transport , storage and distribution costs to rise about 4 % this year .
Only 10 % of the 250 shippers polled expected their freight-transport costs to decrease , compared with 30 % who had looked to freight transport to reduce costs in past years .
`` This is the first year since transportation deregulation in 1980 that we have had such a dramatic and broad-based upturn in perceived transportation rates , '' said Bernard LaLonde , a transportation logistics professor at Ohio State in Columbus .
The deregulation of railroads and trucking companies that began in 1980 enabled shippers to bargain for transportation .
Carriers could use their equipment more efficiently , leading to overcapacity they were eager to fill .
Shippers cut about $ 35 billion from their annual , inter-city truck and rail costs , to about $ 150 billion , or about 6.4 % of gross national product , down from 8 % of GNP in 1981 .
But with much of the inefficiency squeezed out of the freight-transport system , rising costs are likely to be reflected directly in higher freight rates .
`` Shippers are saying ` the party 's over , ' '' said Mr. LaLonde .
`` Shippers wo n't be able to look for transportation-cost savings as they have for the last eight or nine years .
Transport rates wo n't be an opportunity for offsetting cost increases in other segments of the economy . ''
Robert Delaney , a consultant at Arthur D. Little Inc. , Cambridge , Mass. , said `` We 've gotten all the benefits of deregulation in freight-cost reductions .
Now we are starting to see real freight-rate increases as carriers replace equipment , pay higher fuel costs and pay more for labor .
You 'll see carriers try to recoup some of the price cutting that occurred previously . ''
Not everyone believes that the good times are over for shippers .
`` There 's still a lot of pressure on rates in both rail and truck , '' said Gerard McCullough , lecturer in transportation at Massachusetts Institute of Technology .
Less-than-truckload companies , which carry the freight of several shippers in each truck trailer , discounted away a 4.7 % rate increase implemented last April .
The carriers were competing fiercely for market share .
Railroad-rate increases are likely to be restrained by weakening rail-traffic levels and keen competition for freight from trucks .
An official at Consolidated Freightways Inc. , a Menlo Park , Calif. , less-than-truckload carrier , said rate discounting in that industry has begun to `` stabilize . ''
Consolidated Freightways plans to raise its rates 5.3 % late this year or early next year , and at least two competitors have announced similar increases .
Truckers are `` trying to send signals that they need to stop the bloodletting , forget about market share and go for higher rates , '' said Michael Lloyd , an analyst at Salomon Bros .
And `` shippers are getting the feeling that they have played one trucker off against another as much as they can , '' he said .
Air-freight carriers raised their rates for U.S. products going across the Pacific to Asia by about 20 % earlier this month .
And Japan Air Lines said it plans to boost its rates a further 25 % over the next two years .
Such rate increases `` will increase the total cost of U.S. products and slow down the rate of increase of U.S. exports , '' said Richard Connors , a senior vice president of Yusen Air & Sea Service U.S.A. Inc. , the U.S. air-freight-forwarding subsidiary of Nippon Yusen Kaisha of Japan .
Ship companies carrying bulk commodities , such as oil , grain , coal and iron ore , have been able to increase their rates in the last couple of years .
Some bulk shipping rates have increased `` 3 % to 4 % in the past few months , '' said Salomon 's Mr. Lloyd .
And ship lines carrying containers are also trying to raise their rates .
Carriers boosted rates more than 10 % in the North Atlantic between the U.S. and Europe last September , hoping to partly restore rates to earlier levels .
Ship lines operating in the Pacific plan to raise rates on containers carrying U.S. exports to Asia about 10 % , effective next April .
MGM Grand Inc. said it filed a registration statement with the Securities and Exchange Commission for a public offering of six million common shares .
The Beverly Hills , Calif.-based company said it would have 26.9 million common shares outstanding after the offering .
The hotel and Gaming company said Merrill Lynch Capital Markets will lead the underwriters .
Proceeds from the sale will be used for remodeling and refurbishing projects , as well as for the planned MGM Grand and theme park .
Bob Stone stewed over a letter from his manager putting him on probation for insubordination .
Mr. Stone thought the discipline was unfair ; he believed that his manager wanted to get rid of him for personal reasons .
Unable to persuade the manager to change his decision , he went to a `` company court '' for a hearing .
At the scheduled time , Mr. Stone entered a conference room in a building near where he worked .
After the three members of the court introduced themselves , the chairman of the panel said : `` Go ahead and tell us what happened .
We may ask questions as you go along , or we may wait until the end . ''
No lawyers or tape recorders were present .
The only extra people were a couple of personnel specialists , one of whom knew Mr. Stone 's case intimately and would help fill in any facts needed to give the court the full picture .
Over a cup of coffee , Mr. Stone told his story .
He talked about 20 minutes .
When he was through , the court members asked many questions , then the chairman said they would like to hear his manager 's side and talk to witnesses .
The chairman promised Mr. Stone a decision within two weeks .
Bob Stone is a fictional name , but the incident described is real .
It happened at Northrop Corp. in Los Angeles .
The court is called the Management Appeals Committee , or just `` MAC , '' and it is likely to hear a couple of dozen cases a year .
Alter some details of this example and it could be taking place today at Federal Express in Memphis , the Defense and Underseas Systems divisions of Honeywell in Minneapolis , a General Electric plant in Columbia , Md. , or a number of other companies .
These firms are pioneers in a significant new trend in the corporate world : the rise of what I call corporate due process .
Although corporate due process is practiced today in few companies -- perhaps 40 to 60 -- it is one of the fastest developing trends in industry .
In the coming decade a majority of people-oriented companies are likely to adopt it .
Corporate due process appeals to management for a variety of reasons .
It reduces lawsuits from disgruntled employees and ex-employees , with all that means for reduced legal costs and better public relations .
It helps to keep out unions .
It increases employee commitment to the company , with all that means for efficiency and quality control .
What must your management team do to establish corporate due process ?
Here are four key steps :
1 . Make sure you have a strong personnel department .
It must be able to handle most of the complaints that can not be solved in the trenches by managers and their subordinates , else the company court or adjudicators will be inundated with cases .
At Polaroid , the Personnel Policy Planning Committee may hear only about 20 cases a year ; the rest of the many hundreds of complaints are resolved at earlier stages .
At TWA , the System Board of Adjustment hears 50 to 75 cases a year , only a fraction of the complaints brought to personnel specialists .
At Citicorp , the Problem Review Board may hear only 12 or so cases because of personnel 's skill in complaint-resolution .
In a typical year , up to 20 % of the work force goes to personnel specialists with complaints of unfair treatment .
In a large company that means many hundreds of complaints for personnel to handle .
2 . Formally or informally , train all your managers and supervisors in the company 's due-process approach .
See that they know company personnel policy backwards and forwards , for it is the `` law '' governing company courts and adjudicators .
Coach them in handling complaints so that they can resolve problems immediately .
In case managers and personnel specialists are unsuccessful and subordinates take their complaints to a company court or adjudicator , teach managers to accept reversals as a fact of business life , for in a good due-process system they are bound to happen .
In the 15 companies I studied , reversal rates range on the average from 20 % to 40 % .
3 . Decide whether you want a panel system or a single adjudicator .
A panel system like that in the Bob Stone example enjoys such advantages as high credibility and , for the panelists , mutual support .
An adjudicator system -- that is , an investigator who acts first as a fact-finder and then switches hats and arbitrates the facts -- has such advantages as speed , flexibility and maximum privacy .
International Business Machines and Bank of America are among the companies using the single-adjudicator approach .
4 . Make your due-process system visible .
It wo n't do any good for anybody unless employees know about it .
Most managements hesitate to go all out in advertising their due-process systems for fear of encouraging cranks and chronic soreheads to file complaints .
On the other hand , they make sure at a minimum that their systems are described in their employee handbooks and talked up by personnel specialists .
Smith-Kline Beecham goes further and sometimes features its grievance procedure in closed-circuit TV programs .
Naturally , one of the best ways to guarantee visibility for your due-process system is for top management to support it .
At IBM , the company 's Open Door system is sometimes the subject of memorandums from the chief executive .
Federal Express goes further in this respect than any company I know of with both Frederick Smith and James Barksdale , chief executive and chief operating officer , respectively , sitting in on the Appeals Board almost every Tuesday to decide cases .
Mr. Ewing is a consultant based in Winchester , Mass. , and author of `` Justice on the Job : Resolving Grievances in the Nonunion Workplace '' -LRB- Harvard Business School Press , 1989 -RRB- .
Tokyo stocks closed higher in active trading Friday , marking the fourth consecutive daily gain since Monday 's sharp fall .
London shares closed moderately lower in thin trading .
At Tokyo , the Nikkei index of 225 selected issues was up 112.16 points to 35486.38 .
The index advanced 266.66 points Thursday .
In early trading in Tokyo Monday , the Nikkei index rose 101.98 points to 35588.36 .
Friday 's volume on the First Section was estimated at one billion shares , up from 862 million Thursday .
Winners outpaced losers , 572 to 368 , while 181 issues remained unchanged .
With investors relieved at the overnight gain in New York stocks , small-lot buying orders streamed into the market from early morning , making traders believe the market was back to normal .
The Nikkei , which reached as high as 35611.38 right after the opening , surrendered part of its early advance toward the end of the day because of profit-taking .
`` Investors , especially dealers , do n't want to hold a position over the weekend , '' a trader at Dai-ichi Securities said , adding , though , that the trading mood remained positive through the afternoon session .
The Tokyo Stock Price Index -LRB- Topix -RRB- of all issues listed in the First Section , which gained 22.78 points Thursday , was up 14.06 points , or 0.53 % , at 2679.72 .
The Second Section index , which rose 15.72 points Thursday , was up 11.88 points , or 0.32 % , to close at 3717.46 .
Volume in the second section was estimated at 30 million shares , up from 28 million Thursday .
In turmoil caused by the previous Friday 's plunge in New York stocks , the Nikkei marked a sharp 647.33-point fall Monday .
But the Nikkei fell an overall 1.8 % in value that day compared with Wall Street 's far sharper 6.9 % drop on Oct. 13 .
The Tokyo market 's resiliency helped participants to regain confidence gradually as they spent more time on analyzing factors that caused the Friday plunge and realized these problems were unique to New York stocks and not directly related to Tokyo .
The Nikkei continued to gain for the rest of the week , adding 1017.69 points in four days -- more than erasing Monday 's losses .
But further major advances on the Nikkei are n't foreseen this week by market observers .
Investors are still waiting to see how the U.S. government will decide on interest rates and how the dollar will be stabilized .
Some high-priced issues made a comeback Friday .
Pioneer surged 450 yen -LRB- $ 3.16 -RRB- to 6,050 yen -LRB- $ 42.60 -RRB- .
Kyocera advanced 80 yen to 5,440 .
Fanuc gained 100 to 7,580 .
Breweries attracted investors because of their land property holdings that could figure in development or other plans , traders said .
Sapporo gained 80 to 1,920 and Kirin added 60 to 2,070 .
Housings , constructions and pharmaceuticals continued to be bought following Thursday 's gains because of strong earnings outlooks .
Daiwa House gained 50 to 2,660 .
Misawa Homes was up 20 at 2,960 .
Kajima advanced 40 to 2,120 and Ohbayashi added 50 to 1,730 .
Fujisawa added 80 to 2,010 and Mochida advanced 230 to 4,400 .
London share prices were influenced largely by declines on Wall Street and weakness in the British pound .
The key Financial Times-Stock Exchange 100-share index ended 10.2 points lower at 2179.1 , above its intraday low of 2176.9 , but off the day 's high of 2189 .
The index finished 2.4 % under its close of 2233.9 the previous Friday , although it recouped some of the sharp losses staged early last week on the back of Wall Street 's fall .
London was weak throughout Friday 's trading , however , on what dealers attributed to generally thin interest ahead of the weekend and this week 's potentially important U.K. trade figures for September .
The FT-SE 100 largely remained within an 11-point range establshed within the first hour of trading before it eased to an intraday low late in the session when a flurry of program selling pushed Wall Street lower .
The FT 30-share index closed 11.0 points lower at 1761.0 .
Volume was extremely thin at 351.3 million shares , the lightest volume of the week and modestly under Thursday 's 387.4 million shares .
Dealers said the day 's action was featureless outside some response to sterling 's early weakness against the mark , and fears that Wall Street might open lower after its strong leap forward Thursday .
They added that market-makers were largely sidelined after aggressively supporting the market Thursday in their quest to cover internal shortages of FT-SE 100 shares .
Interest may remain limited into tomorrow 's U.K. trade figures , which the market will be watching closely to see if there is any improvement after disappointing numbers in the previous two months .
The key corporate news of the day was that British Airways decided to withdraw from a management-led bid for UAL Corp. , the parent of United Airlines .
British Airways rose initially after announcing its withdrawal from the UAL deal .
Dealers said they viewed the initial # 390-million -LRB- $ 622 million -RRB- outlay for a 15 % stake in the airline as a bit much .
Its shares slid in late dealings to close a penny per share lower at 197 pence .
The airline was the most active FT-SE 100 at 8.2 million shares traded .
The next most active top-tier stock was B.A.T Industries , the target of Sir James Goldsmith 's # 13.4 billion bid .
The company gained shareholder approval Thursday to restructure in a bid to fend off the hostile takeover .
Sir James said Thursday night that his plans for the takeover had n't changed .
B.A.T ended the day at 778 , down 5 , on turnover of 7.5 million shares .
Dealers said it was hit by some profit-taking after gains since mid-week .
In other active shares , Trusthouse Forte shed 10 to 294 on volume of 6.4 million shares after a Barclays De Zoete Wedd downgrading , while Hillsdown Holdings , a food products concern , was boosted 2 to 271 after it disclosed it would seek shareholder approval to begin share repurchases .
Elsewhere in Europe , share prices closed higher in Stockholm , Brussels and Milan .
Prices were lower in Frankfurt , Zurich , Paris and Amsterdam .
South African gold stocks closed moderately lower .
Share prices closed higher in Sydney , Taipei , Wellington , Manila , Hong Kong and Singapore and were lower in Seoul .
Here are price trends on the world 's major stock markets , as calculated by Morgan Stanley Capital International Perspective , Geneva .
To make them directly comparable , each index is based on the close of 1969 equaling 100 .
The percentage change is since year-end .
The U.S. is required to notify foreign dictators if it knows of coup plans likely to endanger their lives , government officials said .
The notification policy was part of a set of guidelines on handling coups outlined in a secret 1988 exchange of letters between the Reagan administration and the Senate Intelligence Committee .
The existence of the guidelines has become known since President Bush disclosed them privately to seven Republican senators at a White House meeting last Monday .
Officials familiar with the meeting said Mr. Bush cited the policy as an example of the sort of congressional requirements the administration contends contribute to the failure of such covert actions as this month 's futile effort to oust Panamanian dictator Manuel Noriega .
According to the officials , Mr. Bush even read to the senators selections from a highly classified letter from the committee to the White House discussing the guidelines .
They said the president conceded the notification requirement did n't affect his decision to lend only minor support to this month 's Panama coup effort .
No notification was ever considered , officials said , apparently because the U.S. did n't think the coup plotters intended to kill Mr. Noriega , but merely sought to imprison him .
What 's more , both administration and congressional officials hint that the notification requirement is likely to be dropped from the guidelines on coup attempts that are being rewritten by the panel and the White House .
The rewriting was launched at a meeting between Mr. Bush and intelligence committee leaders Oct. 12 , a few days before the meeting at which the president complained about the rules .
However , the disclosure of the guidelines , first reported last night by NBC News , is already being interpreted on Capitol Hill as an unfair effort to pressure Congress .
It has reopened the bitter wrangling between the White House and Congress over who is responsible for the failure to oust Mr. Noriega and , more broadly , for difficulties in carrying out covert activities abroad .
A statement issued by the office of the committee chairman , Sen. David Boren -LRB- D. , Okla. -RRB- , charged that the disclosure is part of a continuing effort to shift the criticism for the failure of the recent coup attempt in Panama .
The statement added , `` Someone has regrettably chosen to selectively summarize portions of highly classified correspondence between the two branches of government .
Not only does this come close to a violation of law , it violates the trust we have all worked to develop . ''
Sen. Boren said , `` It 's time to stop bickering and work together to develop a clear and appropriate policy to help the country in the future .
I 've invited the president to send his suggestions to the committee . ''
Republican Sen. William Cohen of Maine , the panel 's vice chairman , said of the disclosure that `` a text torn out of context is a pretext , and it is unfair for those in the White House who are leaking to present the evidence in a selective fashion . ''
Sen. Boren said the committee could n't defend itself by making the documents public because that would violate classification rules .
But the chairman and other committee members stressed that the notification guideline was n't imposed on the White House by a meddling Congress .
Instead , both congressional and administration officials agreed , it grew out of talks about coup-planning in Panama that were initiated by the administration in July 1988 and stretched into last October .
The guideline was n't a law , but a joint interpretation of how the U.S. might operate during foreign coups in light of the longstanding presidential order banning a U.S. role in assassinations .
In fact , yesterday the administration and Congress were still differing on what had been agreed to .
One administration official said notification was required even if the U.S. `` gets wind '' of somebody else 's coup plans that seem likely to endanger a dictator 's life .
But a congressional source close to the panel said the rule only covered coup plans directly involving the U.S .
Although the notification guideline was n't carried out in this month 's coup attempt , some administration officials argue that it may have led to hesitation and uncertainty on the part of U.S. intelligence and military operatives in Panama .
One senior administration official called the guideline `` outrageous '' and said it could make U.S. operatives reluctant to even listen to coup plans for fear they may get into legal trouble .
The issue came to a head last year , officials recalled , partly because the Reagan administration had sought unsuccessfully to win committee approval of funding for new Panama coup efforts .
In addition , both administration and congressional officials said the need for guidelines on coups and assassinations was partly spurred by a White House desire to avoid nasty overseas surprises during the election campaign .
Though the assassination ban is a White House order that Congress never voted on , the intelligence committees can exercise influence over its interpretation .
Last week , Central Intelligence Agency Director William Webster publicly called on Congress to provide new interpretations of the assassination order that would permit the U.S. more freedom to act in coups .
The administration has reacted to criticism that it mishandled the latest coup attempt by seeking to blame Congress for restrictions the White House said have hampered its freedom of action .
However , last week Mr. Webster 's two top CIA deputies said congressional curbs had n't hampered the spy agency 's role in the coup attempt in Panama .
Nevertheless , the administration 's criticisms appeared to have made some headway with Sens. Boren and Cohen after their Oct. 12 meeting with the president .
The three men agreed to rewrite the guidelines , without changing the basic assassination ban , to clear up any ambiguities that may have hampered U.S. encouragement of coups against anti-American leaders .
The new argument over the notification guideline , however , could sour any atmosphere of cooperation that existed .
Gerald F. Seib contributed to this article .
-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-
MUTUAL FUNDS ARRIVED IN THE U.S. during the Roaring Twenties -LRB- they had been in Britain for a century -RRB- , but they did n't boom until the money market fund was created in the 1970s .
By 1980 , there were more than 100 such funds .
Besides creating a vehicle for investors , money market funds also helped rewrite banking regulations .
The idea was to let small investors , the backbone of the fund business , deal in the money market 's high short-term interest rates .
This had been the exclusive province of those rich enough to use six-figure sums to get income that was figured beyond the third or fourth decimal place .
The now-standard price of $ 1 a share came about by accident .
An early fund had filed a registration with the Securities and Exchange Commission that included a fixed $ 1 price .
It arrived just as the regulator handling such operations was retiring .
His successor approved the $ 1 price in the process of clearing the backed-up papers on his desk .
When Dreyfus started the first advertising-backed retail fund in February 1974 , it was priced at $ 10 a share -LRB- and reached $ 1 billion in assets in one year . -RRB-
Dreyfus moved to the $ 1 price after the SEC set standards -- an average 120-day maturity of high-grade paper -- that are still the rule .
Keeping the listed price at a dollar is primarily a convenience .
Actually , the funds do fluctuate , but beyond the third decimal place .
Rounding-off keeps them at $ 1 .
Eventually , the money funds ' success forced relaxation of curbs on bank interest rates to allow banks to offer competing yields .
The new instrument also introduced many to the industry -- 30 % of fund owners -LRB- there are more than 54 million accounts -RRB- started with a money fund .
Today more than 470 money market funds have total assets exceeding $ 350 billion .
-LRB- The companion tax-exempt funds add $ 71 billion . -RRB-
Dreyfus alone has seen its money market funds grow from $ 1 billion in 1975 to closes to $ 15 billion today .
Procter & Gamble Co. and Noxell Corp. said they received early termination of the waiting period under the Hart-Scott-Rodino Act regarding the proposed $ 1.4 billion merger of Noxell into P&G .
Shareholders of Noxell , of Hunt Valley , Md. , will vote on the merger at a special meeting on Nov. 30 , the companies said .
P&G , Cincinnati , agreed to exchange 0.272 share of its common stock for each share of Noxell common and Class B stock , a total of about 11 million P&G shares .
The transaction would mark the entry of P&G into cosmetics .
The company already markets a wide range of detergents , food , household and health-care products .
Shareholders of Messerschmitt-Boelkow-Blohm G.m.b . H. postponed their formal endorsement of a merger with Daimler-Benz AG until another meeting on Nov. 17 .
The owners of the defense and aerospace concern , which include three regional states , several industrial companies and banks , met Friday to discuss the final terms of the transaction , in which Daimler-Benz will acquire 50.01 % of
But agreement aparently could n't be reached because of opposition from the states of Hamburg and Bremen , which are demanding more influence over the German Airbus operations and a better guarantee against job losses in the troubled Northern German region .
The two states and the state of Bavaria still hold a majority in MBB , but their stake will fall to around 30 % after Daimler-Benz acquires its stake in the concern .
Jeffrey E. Levin was named vice president and chief economist of this commodity futures and options exchange .
He had been associate professor in the department of finance at Seton Hall University .
SIERRA TUCSON Cos. said it completed its initial public offering of 2.5 million common shares , which raised $ 30 million .
The Tucson , Ariz. , operator of addiction-treatment centers said proceeds will be used for expansion , to pay debt and for general corporate purposes .
Oppenheimer & Co. was the lead underwriter .
The government issues its first reading on third-quarter real gross national product this week in a report that is expected to disclose much tamer inflation .
The consensus view on real GNP , the total value of the nation 's output of goods and services adjusted for inflation , calls for a 2.3 % gain , down from the second quarter 's 2.5 % , according to MMS International , a unit of McGraw-Hill Inc. , New York .
But inflation , as measured by the GNP deflator in Thursday 's report , is expected to rise only 3.5 % , down from 4.6 % in the second quarter .
`` Inflation could be a real surprise , '' said Samuel D. Kahan , chief financial economist at Kleinwort Benson Government Securities Inc. , in Chicago .
`` If that gets people excited , it could serve as an impetus to the fixed-income markets to lower their rates , '' he added .
The week 's other notable indicators include mid-October auto sales , September durable goods orders as well as September personal income , personal consumption and the saving rate .
Most are expected to fall below previous-month levels .
Many economists see even slower GNP growth for the remainder of the year , with some leaning more strongly toward a possible recession .
In addition to softer production data , weaker housing starts and lower corporate profits currently in evidence , some analysts believe the two recent natural disasters -- Hurricane Hugo and the San Francisco earthquake -- will carry economic ramifications in the fourth quarter .
The recent one-day , 190-point drop in the Dow Jones Industrial Average seems to be significant to economists mainly for its tacit comment on the poor quality of third-quarter profits now being reported .
`` The stock market is sick because profits are crumbling , '' says Michael K. Evans , president of Evans Economics Inc. , Washington .
The economy , he noted , moves the market , not vice versa .
On the other hand , Mr. Evans expects the hurricane and the earthquake `` to take a hunk out of fourth-quarter GNP . ''
His estimate of 3.3 % for third-quarter GNP is higher than the consensus largely because he believes current inventories are n't as low as official figures indicate .
Demand , he believes , is being met from overhang rather than new production .
By and large , economists believe the two natural catastrophes will limit economic damage to their regions .
Edward J. Campbell , economist at Brown Brothers Harriman & Co. , New York , noted that large increases in construction activity along with government and private relief efforts could offset loss of production in those areas .
Gary Ciminero , economist at Financial Group , Providence , R.I. , expects the deflator to rise 3.7 % , well below the second quarter 's 4.6 % , partly because of what he believes will be temporarily better price behavior .
He expects real GNP growth of only 2.1 % for the quarter , noting a wider trade deficit , slower capital and government spending and the lower inventory figures .
Sung Won Sohn , chief economist at Norwest Corp. , Minneapolis , holds that the recent stock-market volatility `` increases the possibility of economic recession and reinforces the bad news '' from recent trade deficit , employment and housing reports .
The consensus calls for a 0.5 % increase in September personal income and a 0.3 % gain in consumption .
In August , personal income rose 0.4 % and personal consumption increased 0.9 % .
Charles Lieberman , managing director of financial markets reasearch at Manufacturers Hanover Securities Corp. , New York , said Hurrican Hugo shaved 0.1 % to 0.2 % from personal-income growth , because of greatly diminished rental income from tourism .
Durable goods orders for September , due out tomorrow , are expected to show a slip of 1 % , compared with August 's 3.9 % increase .
As usual , estimates on the fickle report are wide , running from a drop of 3.5 % to a gain of 1.6 % .
HASTINGS MANUFACTURING Co. declared a regular quarterly dividend of 10 cents a share and an extra dividend of five cents a share on its common stock , payable Dec. 15 to shares of record Nov. 17 .
This is the 11th consecutive quarter in which the company has paid shareholders an extra dividend of five cents .
The Hastings , Mich. , concern makes piston rings , filters and fuel pumps .
Vickers PLC , a United Kingdom defense and engineering company , said an investment unit controlled by New Zealand financier Ron Brierley raised its stake in the company Friday to 15.02 % from about 14.6 % Thursday and from 13.7 % the previous week .
I.E.P. Securities Ltd. , a unit of Mr. Brierley 's Hong Kong-based Industrial Equity -LRB- Pacific -RRB- Ltd. , boosted its holdings in Vickers to 38.8 million shares .
The latest purchase follows small increases in his holdings made over the past five months .
In May , Mr. Brierley 's stake shrank to 8.7 % after ranging between 9 % and 11 % for much of the previous year .
`` Ron Brierley clearly views our company as a good investment , '' a Vickers spokesman said .
The spokesman refused to comment on speculation that Industrial Equity might use its interest as a platform to launch a hostile bid for the company .
Vickers makes tanks for the U.K. army , Rolls Royce cars , and has marine and medical businesses .
When Rune Andersson set out to revive flagging Swedish conglomerate Trelleborg AB in the early 1980s , he spurned the advice of trendy management consultants .
`` All these consultants kept coming around telling us we should concentrate on high technology , electronics or biotechnology , and get out of mature basic industries , '' Mr. Andersson recalls .
Yet under its 45-year-old president , Trelleborg moved aggressively into those unfashionable base industries -- first strengthening its existing rubber and plastics division , later adding mining as well as building and construction materials .
It was a gutsy move for a little-known executive , fired after only two months as president of his previous company .
But going against the grain has never bothered Mr. Andersson .
Stroking his trademark white goatee during a recent interview , the diminutive Swede quips : `` It turned out to be lucky for us .
If the whole market thinks what you 're doing is crazy you do n't have much competition . ''
Mr. Andersson is anxious to strengthen Trelleborg 's balance sheet .
Characteristically , he did n't waste much time getting started .
On Tuesday , Trelleborg 's directors announced plans to spin off two big divisions -- minerals processing , and building and distribution -- as separately quoted companies on Stockholm 's Stock Exchange .
At current market prices , the twin public offerings to be completed next year would add an estimated 2.5 billion Swedish kronor -LRB- $ 386 million -RRB- to Trelleborg 's coffers , analysts say .
The board had also been expected to approve a SKr1.5 billion international offering of new Trelleborg shares .
But that share issue -- intended to make Trelleborg better known among international investors -- was postponed until market conditions stabilize , people familiar with the situation say .
Trelleborg 's internationally traded `` Bfree '' series stock plunged SKr29 -LRB- $ 4.48 -RRB- to SKr205 -LRB- $ 31.65 -RRB- in volatile trading Monday in Stockholm .
Tuesday , the shares regained SKr20 , closing at SKr225 .
Mr. Andersson says he is confident that taking parts of the company public will help erase the `` conglomerate stigma '' that has held down Trelleborg 's share price .
Trelleborg plans to remain the dominant shareholder with stakes of slightly less than 50 % of both units .
The spinoff should solve a problem for the parent .
A family foundation set up by late founder Henry Dunker controls 59 % of Trelleborg 's voting shares outstanding .
But the foundation bylaws require the entire Trelleborg stake to be sold in the open market if control drops below 50 % .
That possibility had crept closer as repeated new share offerings to finance Trelleborg 's rapid growth steadily diluted the foundation 's holding .
That growth is the result of Mr. Andersson 's shopping spree , during which he has bought and sold more than 100 companies during the past five years .
Most of the new additions were barely profitable , if not outright loss makers .
Applying prowess gained during earlier stints at appliance maker AB Electrolux , Mr. Andersson and a handful of loyal lieutenants aggressively stripped away dead wood -- and got quick results .
The treatment turned Trelleborg into one of Scandinavia 's biggest and fastest-growing industrial concerns .
Between 1985 and 1988 , sales multipled more than 10 times and pretax profit surged almost twelvefold .
Many analysts expect Mr. Andersson , who owns 1.7 % of the company , to be named Trelleborg 's new chairman when Ernst Herslow steps down next year .
But the promotion is n't likely to alter a management style Mr. Andersson describes as `` being the driving force leading the troops , not managing by sitting back with a cigar waiting for people to bring me ideas . ''
Last month , in his boldest move yet , Mr. Andersson and Trelleborg joined forces with Canada 's Noranda Inc. in a joint $ 2 billion hostile takeover of another big Canadian mining concern , Falconbridge Ltd .
Industry analysts suggest that the conquest of Falconbridge could vault Trelleborg from a regional Scandinavian success story to a world-class mining concern .
`` Trelleborg is n't in the same league yet as mining giants such as RTZ Corp. or Anglo-American Corp. , '' says Mike Kurtanjek , a mining analyst at James Capel & Co. , London .
`` But we certainly like what we 've seen so far . ''
But Trelleborg still must clear some tough hurdles .
Mr. Andersson acknowledges that the company 's mining division `` will be busy for a while digesting its recent expansion . ''
Booming metals prices have fueled Trelleborg 's recent profit surge , raising mining 's share of pretax profit to 68 % this year from a big loss two years earlier .
But analysts caution an expected fall in metal prices next year could slow profit growth .
Mining is likely to remain Trelleborg 's main business .
Analysts say its chances of success will likely hinge on how well Trelleborg manages to cooperate with Noranda in the Falconbridge venture .
Noranda and Trelleborg each came close to winning Falconbridge alone before the successful joint bid .
Some analysts say Noranda would prefer to break up Falconbridge , and that the Swedes -- relatively inexperienced in international mining operations -- could have problems holding their own with a much bigger partner like Noranda operating on its home turf .
Mr. Andersson insists that Trelleborg and Noranda have n't discussed a Falconbridge break-up .
Falconbridge , he says , will continue operating in its current form .
`` We 'd be reluctant to accept 50-50 ownership in a manufacturing company .
But such partnerships are common in mining , where there are n't problems or conflict of interest or risk of cheating by a partner , '' Trelleborg 's president says .
Perhaps more important , both companies share Mr. Andersson 's belief in the coming renaissance of base industries .
`` If the 1980s were a decade of consumption , the '90s will be the investment decade , '' Mr. Andersson says .
`` The whole of Europe and the industrialized world is suffering from a breakdown in infrastructure investment , '' he says .
`` That 's beginning to change .
And investment is the key word for base metals , and most other businesses Trelleborg is in .
Apple Computer Inc. posted improved fiscal fourth-quarter profit due largely to a $ 48 million gain on the sale of its stock in Adobe Systems Inc .
Excluding the gain , the company registered a modest 4.6 % increase for the quarter ended Sept. 29 to $ 113 million , or 87 cents a share , from the year-earlier $ 107.9 million , or 84 cents a share .
Proceeds of the Adobe sale brought net income in the quarter to $ 161.1 million , or $ 1.24 a share .
Apple shares fell 75 cents in over-the-counter trading to close at $ 48 a share .
Fiscal fourth-quarter sales grew about 18 % to $ 1.38 billion from $ 1.17 billion a year earlier .
Without the Adobe gain , Apple 's full-year operating profit edged up 1.5 % to $ 406 million , or $ 3.16 a share , from $ 400.3 million , or $ 3.08 a share .
Including the Adobe gain , full-year net was $ 454 million , or $ 3.53 a share .
Sales for the year rose nearly 30 % to $ 5.28 billion from $ 4.07 billion a year earlier .
John Sculley , chairman and chief executive officer , credited the Macintosh and IIcx computers , introduced in the winter , for the brightened sales performance .
Mr. Sculley also indicated that sagging margins , which dogged the company through most of 1989 , began to turn up in the fourth quarter as chip prices eased .
`` Adverse pressure on gross margins... has subsided , '' Mr. Sculley said .
Margins in the fiscal fourth quarter perked up , rising to 51 % from 49.2 % a year earlier .
For all of fiscal 1989 , however , the average gross margin was 49 % , below the average 1988 gross margin of 51 % .
Lower component costs -- especially for DRAMs , or dynamic random access memory chips -- were cited for the easing of margin pressure on the company , a spokeswoman said .
Looking ahead to 1990 , Mr. Sculley predicted `` another year of significant revenue growth , '' along with improved profitability , as the recovery in gross margins continues into 1990 .
Gary J. Schantz , 44 years old , was named president and chief operating officer .
Polymerix makes lumber-like materials that it describes as `` plastic wood . ''
The operating chief 's post is new .
Martin Schrager , 51 , who had been president , was named vice chairman .
He remains chief executive officer .
Mr. Schantz was vice president and chief operating officer of the Acrylic division of Polycast Technology Corp .
Separately , the board expanded to six members with the election of David L. Holewinski , a consultant .
The company also said it privately placed stock and warrants in exchange for $ 750,000 .
Terry L. Haines , formerly general manager of Canadian operations , was elected to the new position of vice president , North American sales , of this plastics concern .
Also , Larry A. Kushkin , executive vice president , North American operations , was named head of the company 's international automotive operations , another new position .
He remains an executive vice president , the company said , and his new position reflects `` the growing importance of the world automotive market as a market for A. Schulman 's high performance plastic materials . ''
Gordon Trimmer will succeed Mr. Haines as manager of Canadian operations , and Mr. Kushkin 's former position is n't being filled at this time , the company said .
General Electric Co. said it signed a contract with the developers of the Ocean State Power project for the second phase of an independent $ 400 million power plant , which is being built in Burrillville , R.I .
GE , along with a division of Ebasco , a subsidiary of Enserch Corp. , have been building the first 250-megawatt phase of the project , which they expect to complete in late 1990 .
The second portion will be completed the following year .
GE 's Power Generation subsidiary will operate and maintain the plant upon its completion .
The Environmental Protection Agency is getting a lot out of the Superfund program .
Of the $ 4.4 billion spent so far on the program , 60 % is going for administrative costs , management and research , the Office of Technology Assessment just reported .
Only 36 of 1,200 priority cleanup sites have been `` decontaminated . ''
Over the next 50 years , $ 500 billion is earmarked for the program .
At current allocations , that means EPA will be spending $ 300 billion on itself .
It may not be toxic , but we know where one waste dump is .
Chambers Development Co. said its Security Bureau Inc. unit purchased two security concerns in Florida that will add $ 2.1 million of annual revenue .
Purchase of the businesses serving Miami , Fort Lauderdale and West Palm Beach , Fla. , is part of a plan by Chambers to expand in the growing security industry .
Terms were n't disclosed .
Basf AG said it moved its headquarters for Latin America to Mexico and the headquarters for the regional division to Singapore , effective Oct .
The central offices for both regions were previously located in Ludwigshafen , Basf headquarters .
The West German chemical concern called the moves a further step in the internationalization of its business activities .
Both regions are the fastest-growing areas for Basf , the company said .
David H. Eisenberg , 53 years old , was named president and chief operating officer of Imasco 's 500-store Peoples Drug Stores Inc. unit , based in Alexandria , Va .
Mr. Eisenberg was senior executive vice president and chief operating officer .
Imasco is a tobacco , retailing , restaurant and financial services concern .
Lotus Development Corp. is in talks to sell its Signal stock-quote service to Infotechnology Inc. , the New York parent of Financial News Network , people familiar with the negotiations said .
They said the price would be around $ 10 million .
Signal , which has an estimated 10,000 subscribers and is profitable , provides stock quotes over an FM radio band that can be received by specially equipped personal computers .
The computers will display stock prices selected by users .
Lotus , Cambridge , Mass. , has been rumored to have the sale of the four-year-old unit under consideration for a year .
The business is n't related to Lotus 's main businesses of making computer software and publishing information on compact disks .
`` Please submit your offers , '' says Felipe Bince Jr .
He surveys the prospective investors gathered in the board room of the Philippine government 's Asset Privatization Trust for the sale of a 36 % interest in the country 's largest paper mill .
The agency expects the bids to be equivalent of more than $ 80 million .
Not a peso is offered .
Mr. Bince , the trust 's associate executive trustee , declares the bidding a failure .
`` It 's getting harder to sell , '' he mutters as he leaves the room .
Indeed . Recently , the trust failed to auction off the paper mill , a bank , an office building and a small cotton-ginning plant .
Of the four , only the bank and the plant drew bids -- one apiece .
In October 1987 , President Corazon Aquino vowed that her government would `` get out of business '' by selling all or part of the state 's holdings in the many companies taken over by the government during the 20-year rule of Ferdinand Marcos .
Two years later , Mrs. Aquino 's promise remains largely unfulfilled .
October is a critical month for the privatization program .
Manila is offering several major assets for the first time and is trying to conclude sales already arranged .
In addition , the government is scheduled to unveil plans for privatizing Philippine Airlines , the national carrier , an effort that lawyer and business columnist Rodolfo Romero calls `` the bellwether of privatization . ''
All told , there are assets on the line valued at up to $ 1.03 billion .
The privatization program is designed to rid the government of hundreds of assets and to raise critically needed funds .
Much of the money from the sales is earmarked for a multibillion-dollar agrarian-reform program .
But efforts have been thwarted by official indifference , bureaucratic resistance , a legal system that operates at a snail 's pace , political opposition and government misjudgments .
Most recently , a lack of buyers has been added to the list .
Rather than gathering momentum , the program is in danger of slowing even more as the government tackles several big assets .
The axiom appears to be that the more valuable the asset , the harder the privatization process .
`` You just do n't see a whole lot happening , '' says an international economist .
To be sure , the program has n't completely stalled .
The Asset Privatization Trust , the agency chiefly responsible for selling government-held properties , has recorded sales of more than $ 500 million since it began functioning in December 1986 .
But its success has been largely in the sale of small , nonperforming companies , which are valued for their assets .
Dealing with the sales this month could be particularly challenging because almost every problem that has hobbled the program in the past is popping up again .
Ramon Garcia , the Asset Trust 's executive trustee , admits to what he calls `` temporary setbacks . ''
In light of the poor results recently , he says , the agency is adopting an `` attitude of flexibility . ''
October 's troubles began when the trust failed to sell a state-owned commercial bank , Associated Bank , for the minimum price of 671 million pesos -LRB- $ 31 million -RRB- .
At the end of the month , the agency again will offer the bank .
But instead of a minimum price , only a target price will be established .
Bankers say , however , that the government may have difficulty selling the institution even without a floor price .
The bank has a negative net worth , they say .
In addition , special bidding rules give the bank 's former owner , Leonardo Ty , the right to match the highest bid .
Mr. Ty lost control to the government in 1980 when a government bank made emergency loans to the cash-strapped institution .
In 1983 , the loans were converted into equity , giving Manila 98 % of the bank , but with the understanding that Mr. Ty had repurchase rights .
His ability to match any bid has scared off many potential buyers .
Separately , the government will try again within a month to sell the 36 % stake in Paper Industries Corp. of the Philippines , or Picop , as the paper mill is known .
The price will depend on how much Picop shares fetch on the local stock market .
But according to bankers and stock analysts who have studied the paper mill , price is n't the only consideration .
As it stands now , the government would continue to hold 45 % of Picop after the 36 % stake is sold .
-LRB- About 7.5 % of Picop is publicly traded and other shareholders own the rest of the equity . -RRB-
Potential buyers , mostly foreign companies , are reluctant to take a non-controlling stake in a company that , by the government 's own reckoning , needs some $ 100 million in new capital for rehabilitation .
The prospect of buying into a cash-hungry company without getting management control persuaded at least three foreign buyers , including a member of the Elders group of Australia , to pull out of the bidding , the bankers and analysts say .
Mr. Garcia acknowledges the problem and says the Asset Trust will study why the bidding failed and what changes the agency may be able to offer .
Under government regulations , however , foreign ownership of Picop 's equity is limited to 40 % .
Even though the government would retain the 45 % stake in Picop , critics have accused the trust of selling out to foreigners .
A series of newspaper articles accused the trust of short-changing the government over the Picop sale .
Mr. Garcia says he has been notified of congressional hearings on the Picop bidding and possible legislation covering the paper mill 's sale , both prompted by the criticism of the agency .
The question of control could further hinder long-delayed plans for the government to divest itself of Philippine Airlines , in which it has a 99 % stake .
The carrier has valuable trans-Pacific and Asian routes but it remains debt-laden and poorly managed .
This maker of electronic measuring devices named two new directors , increasing board membership to nine .
The new directors are Gordon M. Sprenger , president and chief executive officer of LifeSpan Inc. , and Peter S. Willmott , chairman and chief executive officer of Willmott Services Inc .
Gerard E. Wood , 51 years old , was elected president , chief executive officer and a director of this minerals and materials company .
He succeeds Harry A. Durney , 65 , who is retiring from active duty but remains a director and consultant .
Mr. Wood has been president and chief executive of Steep Rock Resources Inc .
Eagle Financial Corp. and Webster Financial Corp. , two Connecticut savings bank-holding companies , agreed to merge in a tax-free stock transaction .
The new holding company , Bancorp Inc. , will have about $ 1.2 billion of assets and 19 banking offices in Connecticut .
Tangible capital will be about $ 115 million .
The merger is subject to regulatory clearance and a definitive agreement .
In the merger , each share of Webster , based in Waterbury , will be converted into one share of the new company .
Each share of Eagle , based in Bristol , will become 0.95 share of .
In American Stock Exchange composite trading Friday , Eagle shares rose 12.5 cents to $ 11 .
In national over-the-counter trading , Webster shares fell 25 cents to $ 12.375 .
Webster has 3.5 million shares outstanding and Eagle 2.6 million .
Their indicated market values thus are about $ 43.3 million and $ 28.6 million , respectively .
Frank J. Pascale , chairman of Eagle , will be chairman of the new firm and James C. Smith , president and chief executive officer of Webster , will take those posts at .
Harold W. Smith Sr. , chairman of Webster , will become chairman emeritus and a director of the new company .
Ralph T. Linsley , vice chairman of Eagle , will become vice chairman of .
The board will be made up of seven directors of each holding company .
In an interview , James Smith said the banks ' `` markets are contiguous and their business philosophies are similar and conservative .
'' Nonperforming loans will make up only about 0.5 % of the combined banks ' total loans outstanding , he said .
At June 30 , Webster , which owns First Federal Savings & Loan Association of Waterbury , had assets of $ 699 million .
Eagle , which controls Bristol Federal Savings Bank and First Federal Savings & Loan Association of Torrington , had assets of $ 469.6 million on that date .
Guillermo Ortiz 's Sept. 15 Americas column , `` Mexico 's Been Bitten by the Privatization Bug , '' is a refreshingly clear statement of his government 's commitment to privatization , and must be welcomed as such by all Americans who wish his country well .
The Mexico-United States Institute is glad to see such a high official as Mexico 's undersecretary of finance view his country 's reforms `` in the context of a larger , world-wide process '' of profound change toward free-market economics , especially in the statist countries .
Having said that , we must caution against an apparent tendency to overstate the case .
It is not quite true , for example , that the Mexican government has `` privatized '' Mexicana de Aviacion , as Mr. Ortiz claims .
In the same sentence he contradicts himself when he reports that the government still retains 40 % of the total equity of the airline .
How can a company be considered `` privatized '' if the state is so heavily represented in it ?
-LRB- True , the Mexican government has granted `` control '' over the airline to a new private consortium , but its propensity to take back what it gives is too well known to permit one to be sanguine . -RRB-
Regrettably , too , Mr. Ortiz resorts to the familiar `` numbers game '' when he boasts that `` fewer than 392 -LCB- state enterprises -RCB- currently remain in the public sector , '' down from the `` 1,155 public entities that existed in 1982 .
'' But the enterprises still in state hands include the biggest and most economically powerful ones in Mexico ; indeed , they virtually constitute the economic infrastructure .
I refer essentially to petroleum , electric power , banking and newsprint .
Those enterprises , however , are not going to be privatized .
They are officially considered `` strategic , '' and their privatization is prohibited by the Mexican Constitution .
In language that sidesteps the issue , Mr. Ortiz writes , `` The divestiture of nonpriority and nonstrategic public enterprises is an essential element of President Carlos Salinas 's plan to modernize Mexico 's economy . . . . ''
Yet clearly , modernization must embrace its key industries before it can be said to have caught the `` privatization bug . ''
The bottom line , however , is not economic but political reform .
A long succession of Mexican presidents arbitrarily nationalized whatever industry they took a fancy to , without having to answer to the public .
To guarantee that Mexicana de Aviacion and other companies will really be privatized , Mexico needs a pluri-party political system that will ensure democracy and hence accountability .
Daniel James President Mexico-United States Institute
The board of this Ponce , Puerto Rico concern voted to suspend payment of its quarterly of 11 cents a share for the third quarter .
The third-largest thrift institution in Puerto Rico also said it expects a return to profitability in the third quarter when it reports operating results this week .
Ponce Federal said the dividend was suspended in anticipation of more stringent capital requirements under the Financial Institutions Reform , Recovery , and Enforcement Act of 1989 .
A labor-management group is preparing a revised buy-out bid for United Airlines parent UAL Corp. that would transfer majority ownership to employees while leaving some stock in public hands , according to people familiar with the group .
The group has been discussing a proposal valued in a range of $ 225 to $ 240 a share , or $ 5.09 billion to $ 5.42 billion .
But to avoid the risk of rejection , the group does n't plan to submit the plan formally at a UAL board meeting today .
Instead , the group is raising the proposal informally to try to test the board 's reaction .
People familiar with the company say the board is n't likely to give quick approval to any offer substantially below the $ 300-a-share , $ 6.79 billion buy-out bid that collapsed last week after banks would n't raise needed loans and after a key partner , British Airways PLC , dropped out .
In composite trading Friday on the New York Stock Exchange , UAL closed at $ 168.50 a share , down $ 21.625 .
But the pilots union , which has been pushing for a takeover since 1987 , appears to be pressing ahead with the revised bid to avoid further loss of momentum even though it has n't found a partner to replace British Air .
Although the bidding group has n't had time to develop its latest idea fully or to discuss it with banks , it believes bank financing could be obtained .
After the collapse of the last effort , the group does n't plan to make any formal proposal without binding commitments from banks covering the entire amount to be borrowed .
Under the type of transaction being discussed , the pilot-management group would borrow several billion dollars from banks that could then be used to finance a cash payment to current holders .
Those current holders would also receive minority interests in the new company .
For example , the group could offer $ 200 a share in cash plus stock valued at $ 30 a share .
UAL currently has 22.6 million shares , fully diluted .
The new structure would be similar to a recapitalization in which holders get a special dividend yet retain a controlling ownership interest .
The difference is that current holders would n't retain majority ownership or control .
The failed takeover would have given UAL employees 75 % voting control of the nation 's second-largest airline , with management getting 10 % control and British Air 15 % .
It was n't clear how the ownership would stack up under the new plan , but employees would keep more than 50 % .
Management 's total could be reduced , and the public could get more than the 15 % control that had been earmarked for British Air .
One option the board is likely to consider today is some sort of cooling-off period .
Although the pilots are expected to continue to pursue the bid , UAL Chairman Stephen Wolf may be asked to withdraw from the buy-out effort , at least temporarily , and to return to running the company full time .
The board could eventually come under some pressure to sell the company because its members can be ousted by a majority shareholder vote , particularly since one-third of UAL stock is held by takeover stock speculators who favor a sale .
The labor-management buy-out group plans to keep its offer on the table in an apparent attempt to maintain its bargaining position with the board .
However , the only outsider who has emerged to lead such a shareholder vote , Los Angeles investor Marvin Davis , who triggered the buy-out with a $ 5.4 billion bid in early August , is hanging back -- apparently to avoid being blamed for contributing to the deal 's collapse .
Three top advisers to Mr. Davis visited New York late last week , at least in part to confer with executives at Citicorp .
Mr. Davis had paid $ 6 million for Citicorp 's backing of his last bid .
But Citicorp has lost some credibility because it also led the unsuccessful effort to gain bank loans for the labor-management group .
On Friday , British Air issued a statement saying it `` does not intend to participate in any new deal for the acquisition of UAL in the foreseeable future . ''
However , several people said that British Air might yet rejoin the bidding group and that the carrier made the statement to answer questions from British regulators about how it plans to use proceeds of a securities offering previously earmarked for the UAL buy-out .
Also late last week , UAL flight attendants agreed to participate with the pilots in crafting a revised offer .
But the machinists union , whose opposition helped scuttle the first buy-out bid , is likely to favor a recapitalization with a friendly third-party investor .
One advantage the buy-out group intends to press with the board is that pilots have agreed to make $ 200 million in annual cost concessions to help finance a bid .
Speculation has also arisen that the UAL executive most closely identified with the failure to gain bank financing , chief financial officer John Pope , may come under pressure to resign .
However , people familiar with the buy-out group said Mr. Pope 's departure would weaken the airline 's management at a critical time .
Despite the buy-out group 's failure to obtain financing , UAL remains obligated to pay $ 26.7 million in investment banking and legal fees to the group 's advisers , Lazard Freres & Co. , Salomon Brothers Inc. , and Paul Weiss Rifkind Wharton & Garrison .
Whittle Communications Limited Partnership , Knoxville , Tenn. , will launch its first media property targeting Hispanic women .
`` La Familia de Hoy , '' or `` Today 's Family , '' will debut this spring and will combine a national bimonthly magazine and TV programming .
The television element of `` La Familia '' includes a series of two-minute informational features to air seven days a week on the Spanish-language Univision network , a unit of Univision Holdings Inc. , which is 80%-owned by Hallmark Cards Inc .
The features will focus on `` parenting , family health and nutrition , and financial management , '' and will carry 30 seconds of advertising .
The magazines , also ad-supported , will be distributed in more than 10,000 doctors ' offices , clinics , and health centers in Hispanic and largely Hispanic communities .
WEIRTON STEEL Corp. said it completed a $ 300 million sale of 10-year notes , the final step in the 1984 buy-out of the company from National Steel Corp .
The 10 % notes were priced at 99.5 % to yield 10.958 % in an offering managed by Bear , Stearns & Co. , Shearson Lehman Hutton Inc. and Lazard Freres & Co. , the company said .
Weirton , of Weirton , W. Va. , said $ 60.3 million of the proceeds were used to prepay the remaining amounts on the note outstanding to National Intergroup Inc. , the parent of National Steel .
Remaining proceeds were used to pay other debt and to finance the company 's capital spending program .
Lep Group PLC of Britain , which holds a 62.42 % stake in Profit Systems Inc. , said it is considering courses of action that could result in its having `` active control '' of the company .
In a filing with the Securities and Exchange Commission , Lep Group said a possible course of action may include acquiring some or all of the Profit Systems shares it does n't already own .
It noted , however , that it has n't determined any specific terms of a possible transaction .
Lep Group and affiliates currently control 3,513,072 Profit Systems common shares , or 62.42 % , the filing said .
Profit Systems , Valley Stream , N.Y. , is an air freight forwarding concern .
U.S. official reserve assets rose $ 6.05 billion in September , to $ 68.42 billion , the Treasury Department said .
The gain compared with a $ 1.10 billion decline in reserve assets in August to $ 62.36 billion , the department said .
U.S. reserve assets consist of foreign currencies , gold , special drawing rights at the International Monetary Fund and the U.S. reserve position -- its ability to draw foreign currencies -- at the IMF .
The nation 's holdings of foreign currencies increased $ 5.67 billion in September to $ 39.08 billion , while its gold reserves were virtually unchanged at $ 11.07 billion .
U.S. holdings of IMF special drawing rights last month rose $ 247 million , to $ 9.49 billion , and its reserve position at the IMF increased $ 142 million , to $ 8.79 billion .
Alusuisse of America Inc. plans to sell its Consolidated Aluminum Corp. subsidiary as part of its strategy to focus more on aluminum packaging in the U.S .
Alusuisse , of New York , declined to say how much it expects to get for the unit ; the company has hired First Boston Corp. to help identify bidders .
Alusuisse is a subsidiary of Swiss Aluminium Ltd. , a Zurich , Switzerland , producer of aluminum , chemicals and packaging products .
Consolidated , which had 1988 revenue of $ 400 million , makes aluminum sheet and foil products at its Hannibal , Ohio , and Jackson , Tenn. , rolling mills and recycles aluminum at a plant in Bens Run , W.Va .
Manhattan National Corp. said Michael A. Conway , president and chief executive officer , was elected chief executive of the holding company 's two principal insurance subsidiaries .
He succeeds Paul P. Aniskovich Jr. , who resigned to pursue other business interests , the company said .
Mr. Conway , 42 years old , was elected chairman , president and chief executive of Manhattan Life Insurance Co. and president and chief executive of Manhattan National Life Insurance Co .
Harry Rossi , 69 , chairman of the holding company , also remains chairman of Manhattan National Life Insurance Co .
Mr. Conway was executive vice president and chief investment officer of Union Central Life Insurance Co. , of Cincinnati , in 1987 , when Union Central bought a 54 % interest in Manhattan National Corp .
He resigned as an officer of Central Life to accept the Manhattan National presidency .
Daniel J. Terra , a director of First Illinois Corp. , said that in August he reduced his stake in First Illinois to 26.48 % of the common shares outstanding .
In a filing with the Securities and Exchange Commission , Mr. Terra said he sold 263,684 First Illinois common shares from Aug. 9 to Aug. 28 for $ 9.9375 to $ 10.5625 a share .
As a result of the sales he holds 6,727,042 shares .
Mr. Terra said in the filing that he sold the stock to decrease his position in the Evanston , Ill. , banking concern .
He may sell more shares in the open market or in private transactions , but would n't rule out changing his intentions and buying shares , the filing said .
SciMed Life Systems Inc. , Minneapolis , said a federal appeals court vacated an earlier summary judgment in its favor .
A lower court in St. Paul had ruled in September 1988 that a heart catheter SciMed manufactures does n't infringe on a patent owned by Advanced Cardiovascular Systems , a unit of Eli Lilly & Co .
SciMed said the appeals court remanded the case back to the district court for further proceedings .
In national over-the-counter trading Friday , SciMed shares tumbled $ 2.75 to $ 43 .
SciMed said it `` remains committed '' both to the `` vigorous defense '' of its position that the catheter does n't infringe the Lilly unit 's patent , and to the pursuit of its own counterclaims , which allege Lilly engaged in antitrust violations and other wrongful acts .
A REVISED BID FOR UAL is being prepared by a labor-management group , sources said .
The new proposal , which would transfer majority ownership of United Air 's parent to employees and leave some stock in public hands , would be valued at $ 225 to $ 240 a share , or as much as $ 5.42 billion .
But UAL 's board is n't expected to give quick approval to any offer substantially below the $ 300-a-share bid that collapsed recently .
Takeover stock speculators have incurred paper losses of over $ 700 million from the failed UAL offer , their worst loss ever on a single deal .
Ford and Saab ended talks about a possible alliance after Ford concluded that the cost to modernize Saab 's car operations would outweigh the likely return .
The collapse Friday prompted speculation that Ford would intensify its pursuit of Jaguar , which is negotiating a defensive alliance with GM .
Stock prices edged up in quiet trading Friday .
The Dow Jones industrials rose 5.94 , to 2689.14 , making the gain for the week a record 119.88 points , or 4.7 % .
Most bond prices fell , but junk bonds and the dollar rose .
New York City bonds were sold off by many investors last week amid political and economic uncertainty .
More banks are being hurt by Arizona 's worsening real-estate slump .
First Interstate Bancorp of Los Angeles said Friday it expects a $ 16 million quarterly loss , citing property-loan losses at its Arizona unit .
OPEC 's ability to produce more oil than it can sell is starting to cast a shadow over world oil markets .
OPEC officials worry that prices could collapse a few months from now if the group does n't adopt new quotas .
Saatchi & Saatchi has attracted offers for some of its advertising units but has rejected them , sources said .
The proposals , from suitors including Interpublic Group , come as the London-based ad giant struggles through its most difficult period ever .
Qintex Australia suffered another setback Friday when its Los Angeles-based affiliate filed for Chapter 11 protection .
Qintex 's $ 1.5 billion pact to buy collapsed recently .
Kodak entered the high-definition television market by unveiling a device that can convert conventional film into high-definition video .
A handful of small U.S. firms are refusing to cede the HDTV-screen market to Japanese manufacturers .
Freight rates are bottoming out and starting to rebound .
Trucking , shipping and air-freight firms are all planning rate increases , reflecting higher costs and tightened demand .
Texaco has purchased an oil-producing company in Texas for $ 476.5 million .
It is Texaco 's first major acquisition since the legal battle with Pennzoil began over four years ago .
Winnebago posted a widened quarterly loss and slashed its dividend in half , reflecting the deepening slowdown in recreational vehicle sales .
Markets -- Stocks : Volume 164,830,000 shares . Dow Jones industrials 2689.14 , up 5.94 ; transportation 1230.80 , off 32.71 ; utilities 215.48 , up 0.06 .
Bonds : Shearson Lehman Hutton Treasury index 3392.49 , off
Commodities : Dow Jones futures index 129.62 , off 0.51 ; spot index 131.34 , up 0.88 .
Dollar : 142.43 yen , up 0.73 ; 1.8578 marks , up 0.0108 .
Inmac Corp. , a money-losing direct marketer of computer supplies and accessories , said directors suspended payment of its semiannual dividend as too great a drain on funds .
The company paid five cents a share in April .
The directors ' action , taken Oct. 10 but announced Friday , had little or no effect on the company 's stock , which stagnated at $ 4.75 in light over-the-counter trading .
Inmac recently disclosed a $ 12.3 million write-off related to a corporate restructuring that resulted in the company 's posting a $ 6.4 million net loss for the year ended July 29 , compared with year-earlier profit of $ 9.7 million , or $ 1.02 a share .
Sales rose 12 % to $ 249.5 million from $ 222.8 million .
`` The board felt that the continued payment of our semiannual dividend was inconsistent with recent operating results , '' said Kenneth A. Eldred , president and chief executive officer .
`` All our efforts are now focused on improving earnings to the point where we can fund additional new-country development , continue to invest in the business and reinstate the dividend , '' he added .
The company offers more than 3,500 parts and supplies directly to microcomputer and minicomputer users through catalog sales .
The Food and Drug Administration said American Home Products Corp. agreed to recall certain generic drugs that were produced by its Quantum Pharmics unit in Amityville , N.Y .
Quantum stopped shipping the drugs last month , following a federal investigation regarding information the company supplied to obtain three drug approvals .
The FDA requested the recall of Quantum 's mioxidil tablets , chlorazepate dipotassium tablets and meclofenamate sodium capsules because , it said , the size of the production runs submitted for testing to gain FDA approval was in each case misrepresented as much larger than it actually was .
American Home Products , based in New York , agreed to recall four other products , trazadone , doxepin , diazepam and lorazapam , because of concerns about data submitted in their original approval applications before the FDA .
No safety problems with the products are known , the FDA said .
An FDA spokesperson said the drugs are still available under other brand names .
Last month , American Home Products said it was suspending production and distribution of all 21 of Quantum 's generic drug products pending the completion of an exhaustive internal audit .
It also temporarily closed Quantum , because of the internal investigation , as well as the FDA 's ongoing inquiry .
In New York Stock Exchange composite trading , American Home Products rose 75 cents to $ 105 on Friday .
Lyondell Petrochemical Co. said third-quarter net income fell 54 % , to $ 73 million , or 91 cents a share , from $ 160 million a year .
Year-earlier per-share results are n't applicable because the company went public in January .
Revenue rose 7.7 % to $ 1.28 billion from $ 1.18 billion .
The petrochemical maker said the biggest reason earnings declined was a loss of production time and the increased costs associated with a temporary maintenance closing and expansion of an olefins plant .
Like other refiners , Lyondell 's margins for chemicals and gasoline were narrower .
While the company said chemical margins continued to worsen this quarter , costs will be lower because the maintenance and expansions are complete .
In New York Stock Exchange composite trading Friday , Lyondell was unchanged at $ 18.50 a share .
Four former Cordis Corp. officials were acquitted of federal charges related to the Miami-based company 's sale of pacemakers , including conspiracy to hide pacemaker defects .
Jurors in U.S. District Court in Miami cleared Harold Hershhenson , a former executive vice president ; John Pagones , a former vice president ; and Stephen Vadas and Dean Ciporkin , who had been engineers with Cordis .
Earlier this year , Cordis , a maker of medical devices , agreed to plead guilty to felony and misdemeanor charges related to the pacemakers and to pay the government about $ 5.7 million in fines and other costs .
Cordis sold its pacemaker operations two years ago to Telectronics Holding Ltd. of Australia .
PAPERS : Management and unions representing 2,400 employees at Torstar Corp. 's Toronto Star reached a tentative contract agreement Friday , averting a strike by most employees of Canada 's largest daily newspaper .
Members of the largest union , representing 1,700 workers , voted in favor of the pact yesterday .
Four other unions have yet to vote , but their leadership also recommended approval .
The pact proposes a 2 contract with a raise of 8 % in the first year , 7 % in the second and 4 % for the final six months .
Amgen Inc. said its second-quarter earnings increased more than tenfold to $ 3.9 million , or 22 cents a share , due to increased sales of the company 's new antianemia drug for kidney patients .
The Thousand Oaks , Calif.-based biotechnology company reported a 97 % increase in revenue to $ 42.5 million for the quarter ended Sept. 30 .
In the year-ago period , Amgen reported net income of $ 320,000 , or two cents a share , on revenue of $ 21.5 million .
For the six months , the company reported a more than sixfold increase in earnings to $ 4.7 million , or 26 cents a share , from $ 625,000 , or four cents a share a year ago .
Revenue rose 77 % to $ 72.6 million , from last year 's $ 41 million .
LEBANESE LAWMAKERS APPROVED a peace plan but Aoun rejected it .
Lebanon 's Parliament passed the power-sharing accord to end the country 's 14-year-old conflict , but the Christian military leader wad the plan was `` full of ambiguities . ''
The Arab League-sponsored pact , drafted during three weeks of talks at the Saudi Arabian resort of Taif , includes Syrian proposals for at least a partial troop pullout from Lebanon , and guarantees an equal number of seats for Moslems and Christians in the Parliament .
The rejection by Aoun , who has demanded a total and immediate pull-out of Damascus 's 33,000 troops , puts the future of the agreement in doubt .
NORTHERN CALIFORNIA BRACED for earthquake-related traffic jams .
As rescuers pressed their efforts after finding a survivor in a collapsed freeway , the San Francisco Bay area girded for hundreds of thousands of commuters seeking to avoid routes ravaged by last Tuesday 's tremor .
In Oakland , officials said the 57-year-old longshoreman who spent four days entombed in rubble was in critical condition with slight improvement .
Estimates of damage in the area , visited Friday by Bush , topped $ 5 billion .
The baseball commissioner announced that the third game of the World Series between the Giants and the Athletics would n't resume until Friday .
THE U.S . IS REQUIRED to notify foreign dictators of certain coup plans .
Under guidelines included in an exchange of letters between the Reagan administration and the Senate Intelligence panel last year , the U.S. must inform foreign dictators of plans likely to endanger their lives .
The existence of the policy became known after Bush disclosed it to seven GOP senators last week , citing the plan as an example of congressional requirements the administration contends contribute to the failure of covert actions , officials said .
Bush conceded that the requirement did n't affect a decision to lend only minor support to this month 's failed effort to oust Panama 's Noriega , aides said .
The shuttle Atlantis 's crew prepared to return to Earth today several hours earlier than planned to avoid high winds forecast at the landing site at Edwards Air Force Base , Calif .
The five astronauts , who stowed gear and tested the spacecraft 's steering , said they were unconcerned about the touchy weather expected in the Mojave Desert .
Commonwealth leaders issued a declaration giving South Africa six months to deliver on pledges to ease apartheid or face new reprisals .
The 49-nation organization , meeting in Malaysia , called for tighter financial pressure immediately .
Britain 's Prime Minister Thatcher alone dissented .
East Germany 's leadership vowed swift action to ease travel to the West .
Despite the pledge by the Communist rulers , tens of thousands of people across the country
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Contel Corp. said third-quarter net income increased 16 % to $ 72 million , or 45 cents a share , from $ 62 million , or 39 cents a share , as a result of strong growth in telephone-access lines and long-distance minutes of use .
The telecommunications company 's results included a one-time gain of $ 4 million , or two cents a share , from the sale of Contel Credit , a leasing and financial-services subsidiary .
Revenue rose 8.3 % to $ 780 million from $ 720 million .
Telephone-operations quarterly profit increased 9 % to $ 84 million from $ 77 million , while federal-systems earnings declined 33 % to $ 4 million from $ 6 million .
Information systems posted a loss of $ 8 million , compared with a loss of $ 9 million a year earlier .
Customer-access lines increased at an annualized rate of about 4 % and minutes of long-distance use rose about 12 % .
A 10 % gain in operating profit in the quarter was offset by a 21 % boost in interest expense , reflecting higher consolidated borrowings and interest rates .
In New York Stock Exchange composite trading , Contel closed at $ 33.75 a share , down .50 cents .
In East Germany , where humor has long been the only way to express political criticism , they 're not laughing about their new leader Egon Krenz .
Mr. Krenz is such a contradictory figure that nobody has even come up with any good jokes about him .
`` You have to have clear feelings about someone before you can make jokes , '' says an East German mother of two who loves swapping political barbs with her friends .
`` With Krenz , we just do n't know what to expect . ''
Mr. Krenz does n't seem to be the knee-jerk hardliner many initially thought he was when the 52-year-old Politburo member was selected last week to succeed Erich Honecker .
But he does n't appear to be ready to make broad changes either .
According to East Germany 's ADN news agency , Mr. Krenz spoke to Soviet leader Mikhail Gorbachev by telephone over the weekend and acknowledged East Germany could learn from Moscow 's glasnost policies .
Already last week , Mr. Krenz started overhauling East Germany 's heavily censored and notoriously boring news media .
On Thursday , a day after he took office , East German television broke into regular programming to launch a talk show in which viewers call in questions for a panel of officials to answer .
The regular nightly news program and daily newspapers are also getting a visible injection of Soviet-style glasnost .
`` It was quite a shock , '' says a 43-year-old East German shopkeeper .
`` For the first time in my life , I was n't sure whether I was listening to our news or West German television . ''
Other changes , including easing restrictions on travel for East Germans , are expected .
But whether such moves can win back the confidence of East Germans , who have taken to the streets by the thousands in recent weeks to demand democratic changes , depends largely on whether they feel they can trust Mr. Krenz .
And that 's a problem .
Mr. Krenz is not only closely identified with his mentor , Mr. Honecker , but also blamed for ordering violent police action against protesters this month and for praising China for sending tanks against student demonstrators .
`` I hope he grows with the job , '' says Rainer Eppelmann , a Protestant pastor in East Berlin .
`` The most important thing is that he have a chance . ''
Although Mr. Krenz is dedicated to East Germany 's conservative vein of communism , there is much about his style that sets him apart from his party comrades .
Unlike Mr. Honecker , who tended to lecture people about socialist values , Mr. Krenz enjoys asking questions .
Indeed , one of his first actions as leader was to visit a gritty machine factory on the outskirts of Berlin and wander among the workers -- a la Gorbachev .
He was later shown on television , fielding questions .
At one point , he asked a worker whether he thought East Germans were fleeing the country because of restrictive travel policies .
The worker 's tart reply : `` It 's more than just travel . People have a sense the government is ignoring the real problems in our society . ''
The exchange was all the more remarkable in that authorities released television footage to Western news agencies .
This same tendency toward openness impressed a group of visiting U.S. congressmen this spring .
Rather than trying to `` lecture us , '' says one congressional aide who attended the two-hour meeting , Mr. Krenz `` wanted to listen . ''
Rep. Ronnie Flippo -LRB- D. , Ala. -RRB- , one of the members of the delegation , says he was particularly impressed by Mr. Krenz 's ready admission that East Germany needed to change .
`` He 's a very tough man , but one who 's also open to arguments , '' adds an aide to West German Chancellor Helmut Kohl .
But there 's another side to Mr. Krenz .
Born in a Baltic town in an area which is now part of Poland , he has dedicated his life to the party apparatus .
He moved quickly through the ranks with the help of his patron , Mr. Honecker , and emerged as the heir apparent .
Barbara Donovan , an expert on East Germany at Radio Free Europe in Munich , says Mr. Krenz may project a smooth image , but she doubts he 's a true reformer .
Even if he is , she adds , he appears to have only limited room for maneuver within the Communist Party 's ruling Politburo .
Against this background , the new East German leader must move quickly to shore up his government 's standing .
The sudden growth of the opposition movement , together with the steady outflow of citizens escaping through Poland and Hungary , has plunged the country into its deepest political crisis since an anti-Soviet workers ' uprising in 1953 .
`` He does n't have any honeymoon period , '' says a Western diplomat based in East Berlin .
`` But if he 's sharp and quick , he has a chance . ''
The diplomat adds that Mr. Krenz has several things going for him .
The East German economy is strong compared with other East bloc nations .
And his relative youth could help him project a more vibrant image , contrasting with the perception of Mr. Honecker as an out-of-touch old man .
For average East Germans , Mr. Krenz remains a puzzle .
`` Either he was n't being real in the past , or he is n't being real right now , '' says a 30-year-old East German doctor .
`` Either way , I have a problem with how quickly he 's changed . ''
The doctor was among dozens of people milling through East Berlin 's Gethsemane Church Saturday morning .
The walls of the church are covered with leaflets , news clippings , and handwritten notes associated with the country 's political opposition .
`` I have to come here to read the walls , '' says the doctor , `` because it 's information I still ca n't get through the newspapers . ''
Meanwhile , East Germany 's growing openness may even allow the state-controlled news media to display a muted sense of humor .
Television last week carried a new report on East Berlin 's main wallpaper factory and the need to boost production .
East Germans remember a comment a few years ago by Kurt Hager , the government 's top ideologist , that just because a neighbor hangs new wallpaper , there 's no reason to change your own .
His point was there is no reason for East Germany to copy Soviet-style changes .
`` It 's hard to know whether it was intended to be funny , '' says the East Berlin shopkeeper , `` But everyone I know laughed about it .
The list of laboratories claiming to be producing inexplicable amounts of heat from `` cold fusion '' experiments is slowly growing .
But the experiments continue to be plagued by lack of firm evidence that the extra heat is coming from the fusing of hydrogen atoms .
New experiments at some of the big national laboratories are still unable to find hints of nuclear fusion reactions , leaving only the finding of tritium in a Texas experiment to support University of Utah chemists ' claim of achieving hydrogen fusion at room temperatures .
The latest developments in cold fusion research were presented in 24 reports delivered at the fall meeting here of the Electrochemical Society , the first scientific meeting in five months to hear formal reports on cold fusion experiments .
The meeting offered stark evidence of a dramatic fall in scientific interest in cold fusion research .
Of the 1,300 chemists registered for the society 's weeklong meeting , fewer than 200 sat through the day and a half of cold fusion presentations at week 's end .
This was in contrast with the society 's meeting last May , at the height of the controversy , when more than 1,500 scientists , along with scores of reporters and TV crews , crowded into a Los Angeles hotel ballroom for a tumultuous special night session on the subject .
Neither of the two chemists whose Utah experiments triggered the cold fusion uproar , Martin Fleischmann and B. Stanley Pons , were at the meeting .
But some members of an ad hoc expert committee set up by the Department of Energy to evaluate the cold fusion research were in the audience .
The committee is to recommend at the end of the month whether DOE should support cold fusion research .
Most of the two dozen scientists taking the podium reported results with new , more sophisticated variations of the seemingly simple electrolysis-of-water experiments described last March by Messrs. Fleischmann and Pons .
The experiments involve encircling a thin rod of palladium metal with a wire of platinum and plunging the two electrodes into `` heavy '' water in which the hydrogen atoms are a doubly heavy form known as deuterium .
When an electric current is applied to the palladium and platinum electrodes , the heavy water did begin to break up , or dissociate .
Ordinarily the electrolysis , or breakup , of the water would consume almost all of the electrical energy .
But Messrs. Fleischmann and Pons said their experiments also produced large amounts of heat .
The heat energy plus the energy consumed by the breakup of the water molecules added to far more energy coming out of the apparatus than electrical energy going in , they reported .
Because they also detected tritium and indications of nuclear radiation , they asserted that the `` excess '' heat energy must be coming from energy released by the nuclear fusion of deuterium atoms inside the palladium rod .
As of last weekend , a dozen labs also have reported measuring `` excess '' heat from similar electrolytic experiments , although amounts of such heat vary widely .
One of the seven reports presented here of excess heat production was given by Richard A. Oriani , professor of chemical engineering at the University of Minnesota .
Mr. Oriani said his skepticism of the Utah claims was initially confirmed when his first experiments last spring failed to produce results .
But he then borrowed a palladium rod from chemists at Texas A&M who said they were getting excess heat .
`` The results were fascinating , '' he said .
On the fourth `` run '' with the borrowed rod , the experiment began producing excess heat .
The experiment was stopped briefly to change an instrument .
When it was restarted , heat output `` really took off '' and produced excess heat for several hours before dying down , he said .
Typical of other experiments , Mr. Oriani said his experiment was `` very erratic . ''
It would go along doing nothing but dissociating the heavy water and then at totally unpredictable times , it would begin producing excess heat for as long as 10 or 11 hours before quieting down .
The excess heat was 15 % to 20 % more than the energy involved in the electrolysis of water .
Mr. Oriani said the heat bursts were too large and too long to be explained by the sudden release of energy that might have slowly accumulated during the experiments ' quiescent times , as some scientists have suggested .
`` There is a reality to the excess energy , '' he said .
Other scientists said they also were getting sporadic bursts of excess heat lasting several hours at a time .
The bursts often occur , they said , after they `` perturbed '' the experiments by raising or lowering the amount of electric current being applied , or switching the current off and on .
One chemist privately suggested this hinted that some `` anomalous '' chemical reactions might be producing the heat .
One reason questions surround the heat experiments is that they involve unusually meticulous measurements .
Typically , the input energy ranges from a third of a watt to one watt and the excess energy is measured in tenths of a watt .
One exception is a continuing experiment at Stanford University where as much as 10 watts of energy are being put into the electrolytic cells .
A cell filled with heavy water is producing 1.0 to 1.5 watts more heat than an identical electrolytic cell filled with ordinary water next to it , reported Turgut M. Gur , an associate of materials scientist Robert A. Huggins , head of the Stanford experimental team .
One of the few hints the excess heat might be produced by fusion came from brief remarks by chemist John Bockris of Texas A&M University .
Mr. Bockris previously reported getting bursts of excess heat and of detecting increasing amounts of tritium forming in the heavy water .
He said that within the past few days , he 's gotten evidence that there is a `` weak correlation '' between the time the heat bursts occur and the production of tritium .
There is n't any way to continuously measure the amount of tritium in the heavy water , so it 's been difficult to tell whether the tritium formation is related to the heat bursts or some other phenomenon .
Increasingly careful attempts to measure neutrons , which would be strong evidence of fusion reactions , continue to be negative .
Messrs. Fleischmann and Pons initially reported indirect evidence of neutrons being produced in their experiment but later conceded the measurements were questionable .
Researchers at Sandia National Laboratories in Albuquerque , N.M. , reported they went so far as to take a `` cold fusion '' experiment and three neutron detectors into a tunnel under 300 feet of granite to shield the detectors from cosmic rays .
A number of times they detected neutrons in one , sometimes two , of the three detectors , but only once during 411 hours of the experiment did they detect a neutron burst in all three detectors -- and they think that was a spurious event .
Shimson Gottesfeld of Los Alamos National Laboratory said researchers there detected a burst of neutrons from an early cold fusion experiment last April but decided not to announce it until they could confirm it .
In subsequent experiments , one of two neutron detectors occasionally indicated a burst of neutrons but neutron bursts were never recorded in both detectors at the same time .
They concluded the indications of neutrons stemmed from faults in the detectors rather than from the cold fusion experiment .
At the Lawrence Berkeley Laboratory in California , new experiments indicated that the lithium added to the heavy water so it will conduct a current can produce previously unsuspected electrical effects on the surface of the palladium rod -- which Messrs. Fleischmann and Pons might have misinterpreted , reported Philip Ross from the California laboratory .
Dow Jones & Co. announced Wall Street Journal advertising rates for 1990 .
The rates , which take effect Jan. 2 , include a 4 % increase for national edition advertising .
The Journal also will offer expanded volume and frequency discounts .
The increase for national edition advertising is less than the inflation rate and compares with a 6.5 % increase in 1989 .
`` Newsprint and postage prices this year have not gone up , '' said Peter R. Kann , president of Dow Jones .
`` We have invested in improved editorial quality and expanded our quality audience without substantially increasing our costs .
Fundamental fairness and a sense of responsibility lead us to share operating efficiencies with our customers . ''
Advertising rates for the Eastern , Midwest , Western and Southwest editions will increase an average 5.5 % , and rates for localized advertising editions will increase 7.5 % .
Rates for the Wall Street Journal Reports will remain unchanged .
A one-time noncontract full-page advertisement in The Wall Street Journal national edition will cost $ 99,385 .
Advertising rates for The Wall Street , published in Brussels and printed in the Netherlands and Switzerland , will increase 9 % .
Rates for The Asian Wall Street Journal , published and printed in Hong Kong and also printed in Singapore and Tokyo , will rise 8 % .
Rates for The Asian Wall Street Journal Weekly , published in New York for North American readers , will rise 6 % .
Dow Jones also publishes Barron 's magazine , other periodicals and community newspapers and operates electronic business information services .
It owns 67 % of Telerate Inc. , a leading supplier of computerized financial information on global markets .
Reflecting the impact of lower semiconductor prices and cuts in defense spending , Texas Instruments Inc. said third-quarter net income fell 31 % and sales dropped slightly from a year earlier .
Net fell to $ 65 million , or 67 cents a common share , from $ 93.7 million or $ 1.03 a share , a year ago .
Sales fell 2.5 % to $ 1.54 billion from $ 1.58 billion .
For the nine months , the electronics and defense concern had net of $ 255.8 million , or $ 2.70 a share , down 5.6 % from $ 271 million , or $ 3.01 a share , in the year-ago period .
Sales were $ 4.66 billion , up 1.3 % from $ 4.6 billion .
Jerry Junkins , chairman , president and chief executive officer , said sluggish consumer-electronics sales reduced demand for semiconductors .
That , coupled with lower semiconductor prices and higher semiconductor-depreciation expense , contributed to the decline in sales and profit .
In addition , cost increases related to fixed-price defense contracts and a $ 10 million charge to reduce the work force of Texas Instruments ' defense-electronics division also reduced net .
However , the quarter results included $ 28 million in royalty income from patent licenses , up from $ 21 million in the year-earlier period .
The nine months include $ 125 million of royalty income , up from $ 98 million last year .
Mr. Junkins was n't optimistic about the short-term outlook , hinting that further workforce reductions may be needed .
`` We expect near-term sluggishness in the electronics market , '' he said , `` and we will take ongoing cost-reduction actions as necessary to keep operations aligned with demand . ''
Further , he said , an internal reorganization to combine several divisions into the Information Technology Group is expected to affect fourth-quarter results by an undisclosed amount .
Lynch Corp. said its Lynch Telephone Corp. subsidiary completed the acquisition of Western New Mexico Telephone Co. for $ 20 million plus assumption of $ 24 million of debt .
Western New Mexico Telephone , Silver City , had net income of $ 1.9 million on revenue of about $ 10 million last year .
It is an independent phone company with a service area of 15,000 square miles in southwest New Mexico .
It is also a partner in the wireline cellular franchise covering most of western New Mexico .
The transaction represents Lynch 's entry into the telephone business .
The company , which has interests in television , trucking services , and glass-making and food-processing equipment , said it plans to make other acquisitions in the telephone industry .
Nelson Bunker Hunt on silver a decade ago is still haunting the market in this metal .
Silver , now trading around $ 5 an ounce , surged to an all-time peak of $ 50 an ounce in January 1980 from around $ 9 in mid-1979 .
`` Mr. Hunt 's attempt to squeeze the silver market 10 years ago is still indirectly to blame for today 's market depression , '' says Lesley Edgar , managing director of Sharps Pixley Ltd. , London bullion brokers .
While some 100 million ounces of silver once held by Mr. Hunt and Middle Eastern associates are n't hanging over the market anymore , the price surge of 1979-80 precipitated an expansion of mine production and scrap recovery and encouraged silver consumers to economize on silver use , Mr. Edgar says .
Photographic developers , for example , bought equipment to recover silver from spent photographs , negatives and processing solutions .
Meanwhile , the photographic industry , which accounts for 44 % of silver consumption , continues to look for substitutes .
Japanese and U.S. photographic firms are beginning to produce electronic cameras and X-rays that do n't require silver , dealers say .
Silver 's history of volatility is also discouraging investors , dealers say .
Even in the present uncertain investment climate , investors are preferring `` quality assets '' such as Treasury bills and bonds to gold , silver and platinum , dealers say .
Although prices rallied briefly following the tumble on world stock markets earlier this month and the related decline of the dollar , precious metals are out of favor for the moment because of high interest rates and a determination by industrial nations to curb inflation , dealers say .
Silver , however is in a deeper slump than are gold and platinum .
Some analysts contend that silver is cheap now that prices are languishing at levels last seen in the mid-1970s .
`` Bargain hunters believe that silver offers the best value amongst precious metals , '' says Frederick R. Demler , analyst at Drexel Burnham Lambert Inc .
A further decline in prices will lead to mine production cuts in the U.S. , he says .
Scrap merchants are converting smaller quantities of metal into silver , while low prices are discouraging exports from India and the Soviet Union .
Silver prices could also be boosted by strikes in leading producing nations Peru and Mexico , Mr. Demler says .
Meanwhile , total fabrication demand for silver has risen six years in a row , he says .
Japanese demand grew by 70 % in the first half of this year and the nation plans an issue of a silver commemorative coin that will require 4.5 million ounces .
Compared with huge annual surpluses of more than 100 million ounces in the first half of the 1980s , world silver supplies and consumption are now nearly in balance , Mr. Demler says .
Despite intermittent rallies in the past few years , improvements in the supply-demand balance have n't managed to push silver prices into a higher range .
`` There 's just too much silver around , '' says Tom Butler , an analyst at Samuel Montagu & Co. , a London bullion house .
A huge silver stockpile at exchanges , refiners , consuming industries and government warehouses of at least 617 million ounces is the market depressant , says Shearson Lehman Hutton Inc. in a report .
This year alone , inventories at the Commodity Exchange of New York jumped `` by a staggering 46 million to 221 million ounces '' because of producer deliveries , de-stocking by fabricators and sales by disenchanted investors , says Rhona O'Connell , London-based precious metals analyst at Shearson Lehman Hutton .
`` Silver production is also in an inexorable upward trend , '' Ms. O'Connell says .
Moreover , while Asian and Middle Eastern investors hoard gold and help underpin its price , silver does n't have the same mystique , dealers say .
Investors have gotten burned on silver so often that they are far more partial to gold , says Urs Seiler , senior vice president at Union Bank of Switzerland .
Yet if gold prices improve , silver prices could rally sharply , he says .
However , dealers caution that any increase would be $ 1 to $ 2 at most .
Looking ahead to other commodity markets this week : Livestock and Meats Analysts expect the prices of live cattle futures contracts to rise in trading today in the wake of a government quarterly census that found fewer-than-expected cattle on feedlots .
After the close of trading Friday , the Agriculture Department reported that feedlots in the 13 biggest ranch states held 8.06 million cattle on Oct. 1 , down 6 % from that date a year earlier .
Most analysts had expected the government to report a 4 % decline .
Feedlots fatten young cattle for slaughter , so a decline signals a tightening supply of beef .
The government reported that the number of young cattle placed on feedlots during the quarter dropped 5 % compared with the year-earlier quarter .
Many industry analysts had been projecting a 3 % decline in placements for the quarter .
In the 1988 quarter , many farmers were forced to sell their cattle to feedlot operators because the drought dried out the pasture on their ranches .
The number of cattle moving onto feedlots in the recent quarter was also lower because fattening cattle is less profitable .
A shortage of young cattle has made them more expensive for feedlot operators to buy .
The Agriculture Department also said that the number of fattened cattle slaughtered in the quarter dropped by 5 % from the 1988 quarter , which was in line with projections by analysts .
Energy Friday 's 44-cent-a-barrel price drop to $ 19.98 in the expiring November contract for West Texas Intermediate crude may well set the tone for trading this week in petroleum futures on the New York Mercantile Exchange .
Most traders and analysts attributed the decline to technical factors associated with the contract 's going off the board .
Others said that the drop continued the downward correction that 's been due in the petroleum pits and that such a trend could well continue in the next several trading sessions .
Barring any petroleum-related news events , trading in the days ahead should further test recent projections by oil economists and other market watchers that strong fourth-quarter demand will keep prices firm .
Copper prices fell sharply Friday afternoon .
For example , copper for December delivery settled 4.5 cents lower at $ 1.2345 a pound .
Pressure came from several developments including the settlement of two long-term strikes .
On Friday , one analyst said , rank-and-file workers ratified a new labor agreement ending a three-month strike at the Highland Valley mine in British Columbia .
In Mexico , the analyst added , employees at the Cananea mine , who have been out of work since late August when the mine was declared bankrupt by the government , accepted a 35 % cut in the 3,800-man work force .
The mine is expected to return to production in about a week .
On Friday , selling dominated the afternoon `` curb '' session in London , which takes place at noon EDT .
The premium of cash copper to the three-month forward offerings narrowed , indicating weaker demand for cash copper .
Long-term support for the December contract was believed to be at $ 1.25 a pound .
A technical analyst said there were a number of stop-loss orders under that level that were touched off when the contract 's price fell below it .
That brought in considerable fund selling , which continued until the close of trading .
`` In general , it was a bearish close , '' said Ben Hanauer , a copper trader at Rudolph Wolff & Co. , a major commodities trading and brokerage firm .
But whether this price break has implications for this week , he said , `` we will know more when the London Metal Exchange copper stock levels are released Monday morning . ''
Another analyst said he expected LME inventories to be down by about 15,000 tons when the weekly report is issued .
Bernard Savaiko , senior commodities analyst at PaineWebber Inc. , said that when traders saw the market was n't reacting positively to the forecasts of lower LME stocks , they perceived a bearish sign .
He also noted that the Japanese , who had been buying at prices just above the $ 1.25 level , apparently pulled back from the market on Friday .
Mr. Savaiko said he sees a possibility of the December contract dropping to $ 1.05 a pound .
Hewlett-Packard Co. will announce today a software program that allows computers in a network to speed up computing tasks by sending the tasks to each other .
Called Task Broker , the program acts something like an auctioneer among a group of computers wired together .
If a machine has a big computing task , Task Broker asks other computers in the network for `` bids '' on the job .
It then determines which machine is free to do the task most quickly and sends the task to that machine .
Hewlett-Packard claims that the software allows a network to run three times as many tasks as conventional networks and will run each task twice as fast .
The new Hewlett-Packard program , said analyst John McCarthy at Forrester Research Inc. , a computer-market research company , `` is a key building block as people move to this new model of distributed processing . ''
In today 's computer networks , some machines often sit idle while others are overtaxed .
With the Hewlett-Packard program , he said , `` You get more bang for the buck you 've spent on computers . ''
The program , which will be shipped in January 1990 , runs on the Unix operating system .
Hewlett-Packard will charge $ 5,000 for a license covering 10 users .
The program now works on all Hewlett-Packard and Apollo workstations and on computers made by Multiflow Computer Inc. of Branford , Conn .
Hewlett-Packard said it will sell versions later next year that run on Sun Microsystems Inc. and Digital Equipment Corp. machines .
The Task Broker differs from other programs that spread computing tasks around a network .
A previously available program called Network Computing System , developed by Hewlett-Packard 's Apollo division , for instance , takes a task and splits it up into parts , divvying up those parts to several computers in a network for simultaneous processing .
But programs in individual computers must be revised in order to work with that system .
Applications wo n't have to be rewritten to work with Task Broker , Hewlett-Packard said , and the user of a computer wo n't be able to tell that another machine is doing the work .
The Task Broker `` turns that network into -- as far as the user is concerned -- one giant computer , '' said Bill Kay , general manager of Hewlett-Packard 's workstation group .
Price wars between the fast-food giants are starting to clobber the fast-food little guys : the franchisees .
`` When elephants start fighting , ants get killed , '' says Murray Riese , co-owner of National Restaurants , a New York franchisee for Pizza Hut , Roy Rogers and other chains .
As hamburger and pizza outlets saturate one area after another , franchisers are struggling desperately for market share , slashing prices and stepping up costly promotions .
The fight is putting a tight squeeze on profits of many , threatening to drive the smallest ones out of business and straining relations between the national fast-food chains and their franchisees .
The chains `` used to offer discounts during winter when business was slow , but in the last year or so , discounting has become a 12-month thing , '' says Donald Harty , president of Charisma Group Inc. , a New York franchisee of Grand Metropolitan PLC 's Burger King chain .
Though Charisma 's sales are up slightly this year , Mr. Harty says profits will be flat or lower .
And Bill Konopnicki , a Safford , Ariz. , licensee of McDonald 's Corp. who is chairman of the company 's National Operators Advisory Board , says some fast-food outlets `` could be in serious trouble , based on the amount of discounting that seems to be going on . ''
Until recently , the huge fast-food industry , with sales of about $ 60.1 billion last year , kept price-skirmishing to a minimum .
But early this year , PepsiCo Inc. 's Taco Bell unit and Wendy 's International Inc. slashed prices and stepped up promotions , says John Rohs , an analyst for Wertheim Schroder & Co .
That brought a chain reaction in the industry .
The situation was further aggravated early this month , when McDonald 's set plans to heat up the discounting by offering coupons .
It also decided to go national with pizza , which it has been test-marketing .
Now , two-for-one deals on pizza are common ; so are 99-cent specials on sandwiches normally priced twice as high .
The discounting , say fast-food operators , occurs on a scale and with a frequency they have n't seen before .
The result is that some franchisees are running hard just to stay even , laying off middle managers and working harder to make less .
Joe Mack , a district manager for Cormack Enterprises Inc. , a Burger King operator in Omaha , Neb. , says discounting is so prevalent that `` we have to serve 15 % to 20 % more customers '' to keep sales level .
`` It 's almost as if you 're doing extra work to give away the food , '' he says .
Alan D'Agosto , president of Panda 's Inc. , an operator of Arby 's restaurants in Omaha , says : `` All we 're doing is keeping the customers coming , but we are n't increasing sales . ''
With fast-food outlets on every corner , he , like many , does n't think he has a choice in the price war : `` Our customers say that they wo n't go into a fast-food store unless they get a coupon . ''
If the battle continues much longer , many fast-food businesses will close or merge , predicts Vincent Morrissey , who owns a string of Kentucky Fried Chicken stores in the Midwest .
`` The industry is overbuilt , '' he says .
`` Fast-food franchisers have managed to squeeze in stores into every corner available . ''
The National Restaurant Association says quick-service restaurant units in the U.S. rose 14 % to 131,146 between 1983 and 1987 , the last year for which figures are available .
With the market so crowded , says a spokesman for Wendy 's in Columbus , Ohio , `` If you 're doing well , you 're doing well at someone else 's expense . ''
Simply put , there is n't enough business for every store to grow .
According to Mr. Rohs , inflation-adjusted , same-store sales at company-owned Wendy 's units in the U.S. have trailed year-earlier levels throughout 1989 , except for August .
`` McDonald 's has also been running negative all year , '' the analyst says .
Spokesmen for Wendy 's and McDonald 's criticized Mr. Rohs 's calculations .
Jack Greenberg , executive vice president and chief financial officer of McDonald 's , says the company does n't compute , much less disclose , inflation-adjusted , same-store sales .
He adds that short-term comparisons `` can be very misleading because of differences in timing of marketing programs from year to year . ''
Profit margins at company-owned McDonald 's outlets in the U.S. `` are holding up quite nicely , '' says Mr. Greenberg .
Profits of franchisees have n't been higher since the mid-1970s , he adds .
But Mr. Greenberg 's sanguine outlook is n't matched by many fast-food industry observers .
Smaller chains and single-store operators will be the first to fail , many in the industry predict .
Big franchise groups `` can ride out the storm a lot longer , '' says Mr. Harty , the Burger King operator in New York .
The prolonged price pressures are driving a wedge between some franchisers and their franchisees .
Mr. Morrissey , the Kentucky Fried Chicken franchisee , notes that most franchise owners must absorb increases in expenses without any cut in the royalties , or portion of sales , that they must pay franchisers .
Franchisees ca n't be forced to go along with a franchiser 's discounting .
But once a franchisee agrees to a promotional program , the franchiser can demand full participation to the very end , says Lew Rudnick , a principal of Rudnick & Wolfe , a Chicago law firm with franchise industry clients .
He says courts have held that antitrust considerations are outweighed in such cases by the need to protect consumers from deceptive marketing .
In any case , many franchisees , in order to stay on good terms with franchisers , routinely go along with promotions .
Says Mr. Riese of National Restaurants : `` If you resisted on prices , maybe you would never get that telephone call about a new franchise .
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 .
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 .
CalMat Co. said it completed a $ 32.8 million sale of assets from its Los Angeles area real estate portfolio for net income of $ 12 million .
CalMat said the sale is part of its previously announced plan to sell much of its real estate holdings to focus on its core business of mining and producing asphalt , concrete , rock and sand .
And you thought the only reason to save your canceled checks was to prepare for an IRS audit .
Reggie Jackson , the retired baseball star , has found another use for them .
Mr. Jackson , who won the nickname `` Mr. October '' for his World Series exploits , is selling some of his canceled checks to autograph collectors through a dealer for as much as $ 500 each .
Dealers say the budding trade in Mr. Jackson 's canceled checks is unusual .
`` I do n't know of any living ballplayer that 's ever done it , '' says Jack Smalling , a dealer in Ames , Iowa , and a recognized expert in the field of baseball autographs .
An initial batch of Mr. Jackson 's checks was on sale at a baseball-card show held in San Francisco over Labor Day weekend .
Mr. Jackson showed up at the affair to sign autographs for a fee as well .
`` For someone who has everything else -- Reggie 's jersey , cap and cards -- his checks might be a nice addition , '' says William Vizas , owner of Bill 's Sports Collectibles in Denver , who examined the checks at the San Francisco card show .
For years , the canceled checks of a small number of well-known baseball players have been bought and sold .
But these players were dead .
`` Maybe three years ago , there were a lot of -LCB- Ty -RCB- Cobbs in the hobby , and awhile back there were Babe Ruth checks , '' says Mr. Smalling .
However , the thought of a living player selling his checks rubs some people the wrong way .
`` Maybe I 'm a little stuffy , but I would n't sell them , '' sniffs Bob Machon , owner of Papa 's Sports Cards in Menlo Park , Calif .
`` Who knows how much they 'll be worth 100 years from now ? ''
And Mr. Smalling does n't believe they 're worth all that much now .
`` I do n't think the checks are worth $ 15 apiece , '' he says .
Why Mr. Jackson , who could n't be reached for comment , has made some of his checks available for sale is n't clear .
He probably has n't done it for the cash .
`` I would say he 's definitely not in need of money , '' says Matt Merola , an agent of Mr. Jackson 's based in New York .
`` He has good investments . ''
And Mr. Jackson probably has opened new checking accounts , too .
Or at least he should .
`` I assume those accounts are closed , '' says Mr. Smalling , referring to the accounts of the canceled checks .
`` I do n't think he 'd want to give out his current account numbers .
USX Corp. and its Japanese partner , Kobe Steel Ltd. , agreed to form a joint venture to build a new plant to produce hot-dipped galvanized sheet products , mainly for the automotive market .
Terms were n't disclosed for the plant , which will have annual capacity of 600,000 tons .
The move by the nation 's largest steelmaker follows a string of earlier announcements by other major steel companies .
Bethlehem Steel Corp. , LTV Corp. and Armco Inc. all have plans to build additional lines for such coated corrosion-resistant steel .
The surge in production , analysts say , raises questions about capacity outpacing demand .
They note that most of the new plants will come on line in 1992 , when the current import trade restraint program ends , which could result in .
`` There 's too much capacity , '' contended Charles Bradford , an analyst with Merrill Lynch Capital Markets .
`` I do n't think there 's anyone not building one . ''
He does add , however , that transplanted Japanese car makers are boosting the levels of U.S.-made steel in their autos , instead of relying heavily on imported steel .
That trend could increase demand for hot-dipped galvanized sheet .
The hot-dipped galvanized segment is one of the fastest-growing and most profitable segments of the steel market , coveted by all major integrated steelmakers wanting to maintain an edge over smaller minimills and reconstructed mills -- those spun off to employees .
Indeed , USX said it expects the market for coated sheet steel to reach 12 million tons annually by 1992 , compared with 10.2 million tons shipped in 1988 .
For the first eight months of 1989 , analysts say shipments of hot-dipped galvanized steel increased about 8 % from a year earlier , while overall steel shipments were up only 2.4 % .
USX and Kobe Steel hope to reach a definitive agreement establishing the 50-50 partnership by the end of the year , with construction tentatively slated for the spring of 1990 and production by 1992 .
USX already has six lines in existing plants producing hot-dipped galvanized steel , but this marks the first so-called greenfield plant for such production .
Moreover , it will boost by 50 % USX 's current hot-dipped capacity of 1,275,000 tons .
The company said it does n't expect the new line 's capacity to adversely affect the company 's existing hot-dipped galvanizing lines .
Steelmakers have also been adding capacity of so-called electrogalvanized steel , which is another way to make coated corrosion-resistant steel .
One of the advantages of the hot-dipped process is that it allows the steel to be covered with a thicker coat of zinc more quickly .
ONCE YOU MAKE UP your mind about an investment , the rest is easy , right ?
You just call your broker and say `` buy '' or `` sell . ''
Dream on .
There are all sorts of ways to give buy and sell instructions to a broker -- and just as many ways to get burned if you do n't know what you 're doing .
So here 's a rundown of the most common types of market orders permitted by the stock and commodity exchanges .
Two things to keep in mind : Not all exchanges accept every type of order .
And even when a specific order is acceptable to an exchange , a brokerage firm can refuse to enter it for a customer .
Market Order : This is probably the most widely used order -- and the one most open to abuse by unscrupulous floor brokers , since it imposes no price restrictions .
With a market order , an investor tells a broker to buy or sell `` at the market . ''
It 's like saying , `` get me in now '' or `` get me out now . ''
For example , if wheat is being offered at $ 4.065 and bid at $ 4.060 , a market order to buy would be filled at the higher price and a market order to sell at the lower price .
A recent indictment alleges that some floor brokers at the two largest Chicago commodity exchanges used market orders to fill customers ' orders at unfavorable prices by arranging trades with fellow brokers .
Profits realized from these trades would then be shared by the conspiring brokers .
Limit Order : Limit orders are used when investors want to restrict the amount they will receive or pay for an investment .
Investors do this by specifying a minimum price at which the investment may be sold or the maximum price that may be paid for it .
Suppose an investor wants to sell a stock , but not for less than $ 55 .
A limit order to sell could be entered at that price .
One risk : Investors may regret the restriction if the stock reaches 54 and then falls .
Unless the market goes at least one tick -LRB- the smallest price increment permitted -RRB- beyond the limit price , investors are n't assured of having their orders filled because there may not be sufficient trading volume to permit filling it at the specified price .
Stop Order : Stop orders tell a floor broker to buy or sell an investment once the price reaches a certain level .
Once the price reaches that level , a stop order turns into a market order , and the order is filled at whatever price the broker can get .
Stop orders are sometimes called `` stop-loss '' orders because they are frequently used to protect profits or limit losses .
While stop orders sound similar to limit orders , there is a difference : Sell stops must be entered at a price below the current market price and buy stops above .
In contrast , sell limit orders must be placed above the market price and buy limit orders are placed below .
The crash in October 1987 and last Friday 's sell-off painfully taught some investors exactly what stop orders will and wo n't do .
An investor who may have placed a stop-loss order at $ 90 under a stock that was trading at $ 100 a share on the Friday before the crash was stunned to discover that the order was filled at $ 75 when the stock opened at that price on Monday .
Stop-Limit Order : Stop-limit orders turn into limit orders when an investment trades at the price specified in the order .
Unlike stop orders -- which are filled at the market price when the stop price is hit -- stop-limit orders demand that the trades be made only at the specified price .
If it ca n't be made at that price , it does n't get filled .
Investors who wish to be out of a position , without the risk of receiving a worse-than-expected price from a market order , may use this type of order to specify the price at which the order must be filled .
But if the market moves quickly enough , it may be impossible for the broker to carry out the order because the investment has passed the specified price .
Market-If-Touched Order : Market-if-touched orders are like stop orders in that they become market orders if a specified price is reached .
However , unlike a buy-stop order , a buy market-if-touched order is entered at a price below the current price , while a sell market-if-touched order is entered at a price above it .
As soon as the market trades at the specified price the floor broker will fill it at the best possible price .
Fill-Or-Kill Order : The fill-or-kill order is one of several associated with the timing of trades .
It instructs a broker to buy or sell an investment at the specified price or better .
But if the investment ca n't be bought or sold immediately , the order is automatically canceled .
Gregory Bessemer , who came in second in the stock division of the recently completed U.S. Trading Championship , says he uses fill-or-kill orders almost exclusively when trading options .
`` I like to use them to feel out the market , '' he says .
`` If they do n't fill it immediately , then I can start over at a new price or try again with the same price . ''
Not-Held Order : This is another timing order .
It is a market order that allows floor brokers to take more time to buy or sell an investment , if they think they can get a better price by waiting .
Not-held orders , which are also known as `` disregard the tape '' orders , are always done at the customer 's risk .
One-Cancels-The-Other Order : This is really two orders in one , generally for the same security or commodity , instructing floor brokers to fill whichever order they can first and then cancel the other order .
In a fast-moving market , it prevents an investor from getting stuck with having made two trades on the same security .
Specific-Time Order : This type of order couples many of the orders described above with instructions that the order must be carried out at or by a certain time .
`` On the close '' can be added to many types of orders .
For example , `` market-on-close orders '' must be filled during the last few minutes of trading for the day at a price that is within the official closing range of prices as determined by the exchange .
`` Stop-close-only orders '' are stop orders that only become active during the closing minutes of trading .
`` Day orders '' expire at the end of the day on which they are entered , `` good-till-canceled orders '' have no expiration date .
Most brokers assume that all orders are day orders unless specified otherwise .
On Oct. 19 , 1987 , some investors learned the consequences of entering `` good-til-canceled limit orders '' and then forgetting about them .
They found they had bought stock from limit orders that they might have entered weeks or months earlier and had forgotten to cancel .
It is always the responsibility of investors to keep track of the orders they have placed .
Investors who change their mind about buying or selling after an order has been filled are , usually , stuck with the consequences .
Mr. Angrist writes on the options and commodities markets for The Wall Street Journal .
IN SIZING UP the risks of stock-market investments , there 's probably no starting place better than `` beta . ''
But investors better not ignore its limitations , either .
Beta is a handy gauge that measures the volatility of a stock or stock mutual fund .
For any given move in the overall market , it suggests how steeply that particular issue might rise or fall .
Beta figures are widely available and easy to interpret .
The beta of the broad market , typically defined as the Standard & Poor 's 500-stock index , is always 1.0 .
So a stock with a beta of 0.5 is half as volatile , one at 1.5 is 50 % more volatile , and so on .
Cautious investors should generally go with stocks that have low betas .
Go with high-beta stocks to get the biggest payoff from a bet on a bull market .
Remember , though , that beta also has important limitations .
`` Beta is only part of the risk in a stock , '' says William F. Sharpe , the Stanford University emeritus professor who developed the measure .
`` There is risk that is not associated with market moves , and the beta does n't tell you the magnitude of that . ''
In particular , beta does n't measure the company - and industry-specific risk associated with an individual stock .
That `` business '' risk is very significant for an investor with only a few stocks , but it virtually disappears in a large and well-diversified portfolio .
Beta is also a poor indicator of the risk in stock groups that march to their own drummer .
In particular , the prices of gold and other precious-metals stocks shoot up and down , but the stocks tend to have low betas because their moves are not market-inspired .
Concern that investors could misinterpret such readings led the American Association of Individual Investors to eliminate beta figures for precious-metals funds in the 1989 edition of its mutual-fund guide .
`` Our fear was people would look just at the beta -LCB- of a gold fund -RCB- and say here is an investment with very low risk , '' says John Markese , director of research for the Chicago-based group .
`` In reality it 's very volatile , but the movements are not because of market movements .
READY TO REVIEW the riskiness of your investment portfolio ?
First , a pop quiz .
When you think of the words `` risk '' and `` investment , '' what 's the specific peril that comes to mind ?
Pencils down .
If you 're like most people , you said it 's a holding that goes completely sour -- maybe a bond that defaults or a stock whose value disappears in a bankruptcy proceeding .
`` People tend to see risk primarily on that one dimension , '' says Timothy Kochis , national director of personal financial planning for accountants Deloitte , Haskins & Sells .
But therein lies another aspect of investment risk : the hazard of shaping your portfolio to avoid one or more types of risk and being blind-sided by others .
This is clearly not good news to all you people who sleep like babies every night , lulled by visions of your money sitting risk-free in six-month CDs .
Risk wears many disguises , and investments that are low in one type of obvious risk can be distressingly high in other , less obvious kinds .
U.S. Treasury bonds , for example , are supersafe when it comes to returning money at maturity .
But their value as investments can be decimated by inflation , which erodes the purchasing power of bonds ' fixed-dollar interest payments .
Risk is also a function of time .
When financial professionals measure risk mathematically , they usually focus on the volatility of short-term returns .
Stocks are much riskier than Treasury bills , for example , because the range in performance from the best years to the worst is much wider .
That is usually measured by the standard deviation , or divergence , of annual results from the average return over time .
But investors who are preoccupied with short-term fluctuations may be paying too little attention to another big risk -- not generating enough money to meet long-term financial and life-style goals .
For instance , some investors have sworn off stocks since the 1987 market crash ; last Friday 's debacle only reinforced those feelings .
But the stock market , despite some stomach-churning declines , has far outperformed other securities over extended periods .
By retreating to the apparent security of , say , money-market funds , investors may not be earning enough investment return to pay for a comfortable retirement .
`` That 's the biggest risk of all -- the risk of not meeting your objectives , '' says Steven B. Enright , a New York financial planner with Seidman Financial Services .
As a result , financial advisers say they take several steps when evaluating the riskiness of clients ' portfolios .
They estimate the return a person 's current portfolio is likely to generate over time , along with a standard deviation that suggests how much the return will vary year by year .
They try to figure out the long-term results the person needs to meet major goals .
And they eyeball types of risk that are not easily quantified .
The portfolios of two hypothetical families , one a couple at retirement age and another a two-income couple at age 45 , illustrate several types of risk that investors need to consider .
For instance , the insured municipal bonds that dominate the older couple 's portfolio were probably selected in large part for their low repayment risk .
But they expose the holders to a lot of inflation risk and interest-rate risk .
The younger couple 's stockholdings involve more risk than a diversified stock portfolio because the bulk of the money is in a single issue .
Note that the younger couple 's portfolio has a higher expected annual return , 10.1 % vs. 8.8 % , as calculated by Seidman Financial Services , which is the financial-planning affiliate of BDO Seidman .
That largely reflects the heavy stockholdings .
But one price paid for the higher expected return is greater short-term volatility , as reflected in the higher standard deviation that Seidman estimates for the younger couple 's portfolio .
-LRB- Here 's how to interpret a standard deviation figure : Take the expected return and add one standard deviation to it .
Then take the expected return and subtract one standard deviation .
In two of three years , the actual result should fall within that range if all the assumptions were accurate .
Then add and subtract two standard deviations to get a wider range .
There 's a 95 % probability any year 's result will fall in the range . -RRB-
Of course , the greater volatility of the younger couple 's portfolio does n't necessarily mean those investments are riskier in terms of meeting the holders ' long-term goals .
Indeed , the older couple 's portfolio could actually be riskier in that sense if the expected return wo n't generate enough dollars to meet their spending plans .
`` They may feel emotionally secure now because they are not heavily in the stock market , '' says John H. Cammack , a financial planner with Alexandra Armstrong Advisors Inc. in Washington .
`` But they may pay a price 10 or 20 years in the future . ''
Ms. Slater reports on personal finance from The Wall Street Journal 's New York bureau .
When it comes to investing , trying to weigh risk and reward can seem like throwing darts blindfolded : Investors do n't know the actual returns that securities will deliver , or the ups and downs that will occur along the way .
Looking to the past can provide some clues .
Over several decades , for instance , investors who put up with the stock market 's gyrations earned returns far in excess of those on bonds and `` cash '' investments like Treasury bills .
But while history can suggest what is reasonable to expect there 's no guarantee that the past will repeat itself .
For instance , some analysts believe bond returns and volatility have moved permanently closer to those of the stock market .
And returns on cash investments may continue to exceed inflation by a wider margin than they did over the long-term past. income .
Portfolio A : Retired couple , age 65 ; $ 400,000 portfolio .
Portfolio B : Two-income couple , age 45 ; $ 150,000 portfolio .
A letter from Senator John Kerry chides us today for implying that he had `` flip-flopped '' on Manuel Noriega .
He correctly says he has been down on Noriega for some time , hence his criticism of administration mishandling of the attempted coup .
Our October 12 editorial should have been more precise .
It meant to convey our hope that the Senator and other members of the congressional left are broadening their dislike of Noriega to include other notorious Central American drug runners .
The Sandinistas of Nicaragua , for example , also are part of the Castro-Medellin cartel nexus .
In his letter and on the basis of his losing vote Tuesday against U.S. aid for the Nicaraguan opposition , Senator Kerry makes clear he has not made that intellectual leap .
We were wrong .
THROUGHOUT THE 1980s , investors have been looking for creative alternatives to traditional modes of financial planning .
Capital has been democratized , and people want in .
Too often , however , small investors are left with the same stale solutions that appealed to previous generations of fiduciary strategists .
Now a startling new approach is available to building your financial portfolio without undue risk , without extensive planning and without hurting your life style one bit This is particularly good news for those who hate risk , who are incapable of doing extensive amounts of planning and who refuse to see their life styles hurt in any way .
You know who you are .
My revolutionary system is also useful for those who have tried customary forms of growing their currency cushion .
Like all Americans seeking chronic prosperity , I do find it necessary to plunge certain funds into conservative monetary tools , if only to assuage my father-in-law , who believes in such things .
So throughout the decade I have maintained my share of individual retirement accounts and CDs , and tinkered with stocks , bonds and mutual funds , as well as preserving my necessary position in the residential real-estate market .
Return on this fine portfolio has been modest when it has not been negative .
Figure 1 demonstrates the performance of those businesses I 've invested in during this prosperous decade -LRB- see accompanying illustration -- WSJ Oct. 20 , 1989 -RRB- .
Oil-related properties suffered a huge decline until I divested myself of all such stocks in 1985 , at which point the industry , while not lighting up any Christmas trees , began a slow recovery .
Likewise , mutual funds remained relatively flat until I made what was , for me , a serious investment .
By 1987 , these properties were in a tailspin , causing my broker at Pru-Bache to remark that she 'd `` never seen anything like it . ''
Concerned for her state of mind , I dropped them -- and the market instantly began its steady climb back to health .
Perhaps most dramatic was the performance of the metropolitan New York real-estate market , which was booming until I entered it in late 1988 , at which time it posted the first negative compound annual growth rate in years .
Disgusted , I cast around for a different way to plan my asset distribution , and with hardly any heavy breathing the answer struck me : I was doing it already We 've all got money to spend , some of it clearly disposable since we keep disposing of it .
Bank it ?
Not really Sock it away in long-term instruments ?
Nonsense Daily living is the best possible investment
Your priorities may be different , but here in Figure 2 is where I 've chosen to build for the future : personal space ; automotive pursuits ; children 's toys ; gardening equipment , bulbs and shrubs ; and finally , entertainment , perhaps the best investment of all .
All have paid off for me in double-digit annual growth and continue to provide significant potential .
At least , according to my calculations .
Personal space -LRB- Figure 3 -RRB- has grown 35 % annually over the course of the decade , a performance that would compare positively with an investment in , say , synthetic-leather products for the interiors of cold-weather vehicles , which my cousin got into and sort of regrets to this day .
The assortment of expensive children 's toys that I have purchased wisely at a host of discount-toy brokerage firms -LRB- Figure 4 -RRB- has increased handsomely in total asset value far beyond any personal investment except , perhaps , for my record collection , whose worth , I think it 's safe to say , is incalculable .
Continued investment in my 1984 subcompact has been part of my strategy -LRB- Figure 5 -RRB- , with present annual contributions now equaling more than 60 % of the car 's original value .
According to my calculations , these outlays should have brought the value of my sedan to more than $ 22,000 on the open market -LRB- Figure 6 -RRB- , where I plan to offer it shortly .
Expansion of my living space has produced an obvious need for maintenance and construction of suitable lawns , shrubs and bushes fitting to its suburban locale .
I have thus committed sufficient personal outlay to ensure that my grounds and lodgings will never be short of greens and flowers .
My initial stake in this blooming enterprise has grown tenfold , according to my conservative calculations .
At the same time , my share in a wide variety of entertainment pursuits has given perhaps the most dramatic demonstration of the benefits of creative personal financial planning .
Over the course of the decade , for instance , my return on investment in the area of poker alone -LRB- Figures 7A and 7B -RRB- has been most impressive , showing bodacious annual expansion with -- given the way my associates play -- no sign of abatement into the 1990s and beyond .
With this personal strategy firmly in place , I look forward to years of fine life-style investments and increasing widespread leverage .
My kids ' college education looms as perhaps the greatest future opportunity for spending , although I 'll probably have to cash in their toy portfolio to take advantage of it .
But with every step I take , I 'm building wealth .
You can , too , if you , like me , refuse to bite the bullet .
So go out there and eat that debt .
You 're right there in the mainstream of American business , building value on the back of insupportable expenditures .
Henry Kravis , watch out
Mr. Schwartz is a business executive and writer in New York .
WHEN JAMES SCHWARTZ was just a lad his father gave him a piece of career advice .
`` He told me to choose an area where just by being mediocre I could be great , '' recalls Mr. Schwartz , now 40 .
He tried management consulting , traded in turquoise for a while , and even managed professional wrestlers .
Now he has settled into a career that fits the bill -- financial planning .
It should be noted that Mr. Schwartz , who operates out of Englewood , Colo. , is a puckish sort who likes to give his colleagues the needle .
But in this case the needle has a very sharp point .
Though it 's probably safe to assume that the majority of financial planners are honest and even reasonably competent , the fact remains that , as one wag puts it , `` anybody who can fog a mirror '' can call himself a financial planner .
Planners now influence the investment of several hundred billion dollars , but in effect they operate in the dark .
There is no effective regulation of planners , no accepted standard for admission into their ranks -- a dog got into one trade group -- no way to assess their performance , no way even to know how many of them there are -LRB- estimates range from 60,000 to 450,000 -RRB- .
All anyone need do is hang up a shingle and start planning .
So it should come as no shock that the profession , if that 's what it is , has attracted a lot of people whose principal talents seem to be frittering away or flat-out stealing their clients ' money .
Alarmed , state and federal authorities are trying to devise ways to certify and regulate planners .
Industry groups and reputable planners who are members of them want comprehensive standards , too ; they 're tired of seeing practitioners depicted collectively in the business press as dumber than chimpanzees and greedier than a herd of swine .
But reform has n't taken hold yet .
`` The industry is still pretty much in its Wild West days , '' says Scott Stapf , director of investor education for the North American Securities Administrators Association .
An admittedly limited survey by NASAA , whose members are state securities-law regulators , found that between 1986 and 1988 `` fraud and abuse '' by financial planners cost 22,000 investors $ 400 million .
The rogues ' gallery of planners involved includes some convicted felons , a compulsive gambler or two , various businessmen who had planned their own previous ventures right into bankruptcy , and one man who scammed his wife 's grandmother .
What 's more , the losses they and the others caused `` are just what we are stumbling over , '' says Mr. Stapf , adding that the majority of misdeeds probably go undetected .
So do just about all the losses that could be attributed to the sheer incompetence of unqualified planners .
Nobody can estimate the toll , but John Gargan , a Tampa , Fla. , planner and head of one trade group , the International Association of Registered Financial Planners , thinks the danger to investors from incompetence is `` humongous , '' far greater than that from crookery .
His group , like others , wants minimum standards applied to all who call themselves financial planners .
Surveying all this , some people now think the best planner might be no planner at all .
For most investors `` the benefits just are n't worth the risks , '' says Barbara Roper , who follows financial-planning issues for the Consumer Federation of America , a consumer-advocacy organization based in Washington .
She concedes that such a position is `` unfair '' to the thousands of conscientious and qualified people plying the trade , but as a consumer advocate she feels impelled to take it .
She says her group used to give tips on selecting planners -- check educational and experience credentials , consult regulators and Better Business Bureaus -- but found that even some people who took these steps `` were still getting ripped off . ''
The bad news , however , has n't been bad enough to kill the growing demand for financial planning .
The Tax Reform Act of 1986 , which eliminated many tax shelters peddled by planners , and the stock market crash the next year did cause a sharp slump in such demand , and many planners had to make an unplanned exit from the business .
But membership in the International Association of Financial Planners -LRB- IAFP -RRB- , the industry 's biggest trade group , is still nearly triple what it was in 1980 , and it 's believed that the ranks of planners who do n't belong to any group have soared as well .
An estimated 10 million Americans are now using financial planners , and the pool of capital they influence is enormous .
A survey of 54,000 of them conducted by the IAFP in April showed that these practitioners alone had controlled or guided the investment of $ 154 billion of their clients ' money in the previous 12 months .
The sheer number of planners makes the business extremely difficult , if not impossible , to regulate .
Even the minority of them who must register with the Securities and Exchange Commission as `` investment advisers '' -- people who are in the business of counseling others on the buying and selling of securities specifically -- have been enough to swamp the agency 's capacity .
The SEC has only about 200 staffers assigned to keep tabs on investment advisers -- about the same as in 1980 -- even though the number of advisers has tripled to about 15,000 over the past decade .
Currently , a registered investment adviser can expect an SEC audit only once every 12 years .
A lot of bad things can happen in 12 years .
`` It does n't take a rocket scientist to figure out our problem , '' says Kathryn McGrath , director of the SEC 's division of investment management .
So the SEC has proposed to Congress that much of the job of oversight be turned over to an industry-funded , self-regulatory organization patterned on the National Association of Securities Dealers , which operates in the brokerage business .
Such an organization could , among other things , set minimum standards for competence , ethics and finances and punish those investment advisers who broke the rules .
The proposal has set off a lively debate within an industry that was far from united to begin with .
Mr. Schwartz , the puckish planner from Englewood , Colo. , says that allowing the business to police itself would be `` like putting Dracula in charge of the blood bank . ''
Mr. Gargan , the Tampa planner who heads one trade group , favors simply assessing the industry and giving the money to the SEC to hire more staff .
-LRB- Mr. Gargan 's views are not greeted with wild enthusiasm over at the IAFP , the major industry organization .
When the IAFP recently assembled other industry groups to discuss common standards that might be applied to planners , Mr. Gargan 's group was excluded .
That may be because Mr. Gargan , smarting at what he considered slurs on his membership standards made by the rival group , enrolled his dog , Beauregard , as a member of the IAFP .
Then he sent the pooch 's picture with the certificate of membership -- it was made out to `` Boris ` Bo ' Regaard '' -- to every newspaper he could think of .
The states have their own ideas about regulation and certification .
NASAA , the organization of state securities regulators , is pushing for a model regulatory statute already adopted in eight states .
It requires financial planners to register with states , pass competency tests and reveal to customers any conflicts of interest .
The most common conflict involves compensation .
NASAA estimates that nearly 90 % of planners receive some or all of their income from sales commissions on securities , insurance and other financial products they recommend .
The issue : Is the planner putting his clients into the best investments , or the ones that garner the biggest commissions ?
In 1986 the New York attorney general 's office got an order from a state court in Albany shutting down First Meridian Corp. , an Albany financial-planning firm that had invested $ 55 million on behalf of nearly 1,000 investors .
In its notice of action , the attorney general said the company had promised to put clients into `` balanced '' investment portfolios ; instead , the attorney general alleged , the company consistently shoved unwary customers into high-risk investments in paintings , coins and Florida condos .
Those investments paid big commissions to First Meridian , payments investors were never told about , the attorney general alleged .
Investors were further assured that only those with a minimun net worth would be accepted .
In practice , the attorney general alleged in an affidavit , if an investor had access to cash `` the chances of being turned down by First Meridian were about as probable as being rejected by the Book-of-the-Month Club . ''
And , the attorney general added , First Meridian 's president , Roger V. Sala , portrayed himself as a `` financial expert '' when his qualifications largely consisted of a high-school diploma , work as a real-estate and insurance salesman , and a stint as supervisor at a highway toll booth .
First Meridian and its officials are currently under investigation for possible criminal wrongdoing , according to a spokeswoman for the attorney general .
Harry Manion , Mr. Sala 's attorney , says his client denies any wrongdoing and adds that the attorney general 's contentions about First Meridian 's business practices are incorrect .
As for Mr. Sala 's qualifications , `` the snooty attorneys for the state of New York decided Mr. Sala was n't qualified because he did n't have a Harvard degree , '' says Mr. Manion .
Civil suits against planners by clients seeking recovery of funds are increasingly common .
Two such actions , both filed earlier this year in Georgia state court in Atlanta , could be particularly embarrassing to the industry : both name J. Chandler Peterson , an Atlanta financial planner who is a founder and past chairman of the IAFP , as defendant .
One suit , filed by more than three dozen investors , charges that Mr. Peterson misused much of the $ 9.7 million put into a limited partnership that he operated and promoted , spending some of it to pay his own legal bills and to invest in other companies in which he had an interest .
Those companies , in turn , paid Mr. Peterson commissions and fees , the suit alleges .
The other suit was filed by two men in a dispute over $ 100,000 investments each says he made with Mr. Peterson as part of an effort to purchase the Bank of Scottsdale in Scottsdale , Ariz .
One plaintiff , a doctor , testified in an affidavit that he also gave Mr. Peterson $ 50,000 to join a sort of investment club which essentially gave the physician `` the privilege of making additional investments '' with Mr. Peterson .
In affidavits , each plaintiff claims Mr. Peterson promised the bank purchase would be completed by the end of 1988 or the money returned .
Mr. Peterson took the plaintiffs ' and other investors ' money to a meeting of the bank 's directors .
Wearing a business suit and western-style hat and boots , he opened up his briefcase and dumped $ 1 million in cash on a table in front of the directors , says Myron Diebel , the bank 's president .
`` He said he wanted to show the color of his money , '' recalls Mr. Diebel .
Bank officials , however , showed him the door , and the sale never came off .
According to the suit , Mr. Peterson has yet to return the plaintiffs ' investment .
They want it back .
Mr. Peterson declines to comment on specific allegations in the two suits , saying he prefers to save such responses for court .
But he does say that all of his activities have been `` entirely proper . ''
On the suit by the limited partners , he says he is considering a defamation suit against the plaintiffs .
The suit , he adds , `` is almost in the nature of a vendetta by a handful of disgruntled people . ''
Rearding the suit over the bank bid , Mr. Peterson says it is filled with `` inflammatory language and half truths . ''
He declines to go into specifics .
Mr. Peterson says the suits against him are less a measure of his work than they are a `` sign of the times '' in which people generally are more prone to sue .
`` I do n't know anybody in the industry who has n't experienced litigation , '' he says .
Mr. Peterson also says he does n't consider himself a financial planner anymore .
He now calls himself an `` investment banker . ''
In many scams or alleged scams involving planners , it 's plain that only a modicum of common sense on the part of the investors would have kept them out of harm 's way .
Using it , would n't a proessional hesitate to pay tens of thousands of dollars just for a chance to invest witha planner ?
Other cases go to show that an old saw still applies : If it sounds too good to be true , it probably is .
Certificates of deposit do n't pay 23 % a year , for example , but that did n't give pause to clients of one Alabama planner .
Now they 're losers and he 's in jail in Mobile County .
CDs yielding 40 % are even more implausible -- especially when the issuing `` bank '' in the Marshall Islands is merely a mail drop watched over by a local gas-station operator -- but investors fell for that one too .
And the Colorado planner who promised to make some of his clients millionaires on investments of as litle as $ 100 ?
Never mind .
You already know the answer .
Mr. Emshwiller is a staff reporter in The Wall Street Journal 's Los Angeles bureau .
At the ritzy Fashion Island Shopping Center , the tanned and elegant ladies of this wealthy Southern California beach community disembark from their Mercedes-Benzes and BMWs for another day of exercising their credit cards .
They root among the designer offerings at Neiman-Marcus and Bullocks Wilshire .
They stroll through the marble-encased corridors of the Atrium Court .
They graze at the Farmers Market , a combination gourmet food court and grocery store , while a pianist accompanies the noon fashion show with a selection of dreamy melodies .
`` The beautiful look of wool , '' croons the show 's narrator , `` slightly Victorian in its influence ... . ''
Meanwhile , in the squat office buildings that ring Fashion Island , the odds are good that someone is getting fleeced .
Law-enforcement authorities say that at any given time , a host of fraudulent telemarketing operations mingle with the many legitimate businesses here .
`` They seem to like these industrial parks , '' says Kacy McClelland , a postal inspector who specializes in mail fraud .
`` We call them fraud farms . ''
Welcome to that welter of contradictions known as Newport Beach .
This city of more than 70,000 is known for sunshine , yachts and rich residents .
It is also known as the fraud capital of the U.S. , dubbed by investigators and the media as the `` Cote de Fraud '' .
How does a community famous for its high living end up as a haven for low-lifes ?
Clearly , the existence of the former lures the latter .
The places renowned for breeding bunco , like the Miami neighborhood known as the `` Maggot Mile '' and Las Vegas 's flashy strip of casinos , invariably offer fast cars , high rollers , glamorous women and lots of sunshine .
You do n't hear much about unusual concentrations of fraud in Green Bay or Buffalo .
Con men hate snow .
Newport Beach fits the scam artists ' specifications perfectly .
What more could a con man in search of the easy life ask for ?
Nothing seems hard here .
The breezes are soft , the waves lap gently and the palm trees sway lazily .
Nightlife is plentiful .
Moreover , ostentation is appreciated .
The median price of homes is $ 547,000 ; more than 9,000 vessels fill what the chamber of commerce calls the nation 's largest pleasure-boat harbor .
`` Blondes , cocaine and Corvettes , '' mutters Mr. McClelland .
`` That 's what they 're after . ''
The rich image of Newport Beach also helps lend the con artists ' operation an air of respectability .
`` One reason they use Newport Beach is that it sounds swankier than most addresses , '' says David Katz , a U.S. attorney who , until recently , headed a multi-agency Southern California fraud task force .
`` Newport Beach is known in Rhode Island for having a lot of rich people . ''
No wonder all kinds of big-time scams have flourished here , from phony tax-sheltered Bible sales to crooked car dealers to bogus penny-stock traders .
But above all , this is the national headquarters for boiler-room operators , those slick-talking snake-oil salesmen who use the telephone to extract money from the gullible and the greedy and then vanish .
Because only a fraction of them are ever prosecuted , nobody really knows how much money bogus telemarketing operators really harvest .
`` I 've heard that there is $ 40 billion taken in nationwide by boiler rooms every year , '' Mr. McClelland says .
`` If that 's true , Orange County has to be at least 10 % of that . ''
And most of the truly big scams in Orange County seem to originate in Newport Beach or one of the other well-heeled communities that surround this sliver-like city that hooks around a point of land on the California coast south of Los Angeles .
In fact , sophisticated big-bucks boiler-room scams are known generically among law-enforcement types as `` Newport Beach '' operations .
That contrasts with the penny-ante sales of things such as pen-and-pencil sets and office supplies that are known as `` Hollywood '' scams .
Newport Beach telemarketers concentrate on precious metals and oil-leasing deals that typically cost thousands of dollars a shot .
The investors range from elderly widows to affluent professionals .
In one ingenious recent example of a Newport Beach boiler room , prospective investors in Capital Trust Inc. were allegedly told that their investment in precious metals was insured against losses `` caused by employees due to dishonesty , destruction or disappearance , '' according to an indictment handed up by a federal grand jury in Los Angeles last month .
Thus falsely reassured , investors sent $ 11.4 million to the Newport Beach company , most of which was diverted to unauthorized uses , the indictment charges .
Douglas Jones , an attorney representing Richard O. Kelly Sr. , the chairman and president of Capital Trust , says his client denies that there was any attempt to defraud investors .
`` There were some business deals that went bad , '' Mr. Jones says , `` but no intent to defraud . ''
Newport Beach operations differ from the Hollywood boiler rooms in style as well as in dollars .
Traditionally , boiler rooms operate on the cheap , since few , if any , customers ever visit their offices .
Indeed , the name derives from the tendency among telemarketing scammers to rent cheap basement space , near the boiler room .
But , says Mr. Katz , the U.S. attorney , `` the interesting thing about Newport Beach operations is that they give themselves the indulgence of beautiful offices , with plush furnishings .
When we go there , it 's quite different from these Hollywood places where the sandwiches are spread out on the table and the people are picking their noses . ''
The Newport Beach operators also tend to indulge themselves privately .
Investigators cite the case of Matthew Valentine , who is currently serving a six-year sentence at Lompoc Federal Prison for his role in Intech Investment Corp. , which promised investors returns of as much as 625 % on precious metals .
Mr. Valentine , who pleaded guilty to five counts of fraud in federal court in Los Angeles , drove a leased Mercedes and lived in an expensive home on Lido Isle , an island in Newport 's harbor , according to investigators .
With the $ 3 million received from investors , he took frequent junkets with friends to exotic locales and leased an expensive BMW for his girlfriend , whom he met at the shop where he got his custom-tailored suits .
`` It 's amazing the amount of money that goes up their nose , out to the dog track or to the tables in Las Vegas , '' Mr. Katz says .
All this talk of boiler rooms and fraud is unnerving to the city 's legitimate business element .
Vincent M Ciavarella , regional manager of Property Management Systems , insists he does n't know of any bogus telemarketers operating in the 1.6 million square feet of office space around Fashion Island that his company leases for Irvine Co. , the owner and developer of the project .
Mr. Ciavarella has rejected a few prospective tenants who provided `` incomplete '' financial information and acknowledges that illegitimate operators `` are not easily detectable .
'' -LRB- Investigators stress that building owners are victims , too , since boiler rooms often leave without paying rent . -RRB-
Richard Luehrs , president of the Newport Harbor Area Chamber of Commerce , calls boiler rooms a `` negative we wish we could get rid of . ''
Actually , `` we do n't get much negative publicity about this , '' he insists , `` except for the press who write about it . ''
Mr. Lancaster is deputy chief of The Wall Street Journal 's Dallas bureau .
YOU WENT to college and thought you got an education .
Now you discover that you never learned the most important lesson : How to send your kids to college .
True , when you went to college , there was n't that much to learn .
Stick some money in an interest-bearing account and watch it grow .
Now , investment salesmen say it 's time to take some risks if you want the kind of returns that will buy your toddler a ticket to Prestige U. in 18 years .
In short , throw away the passbook and go for the glory .
The reason is cost .
Nothing in the annals of tuition readied parents for the 1980s .
Tuitions at private colleges rose 154 % in the 10 years ended in June of this year ; that 's twice the 77 % increase in consumer prices for the same period .
A year at Harvard now goes for $ 19,395 .
By 2007 , when this year 's newborns hit campus , a four-year Ivy League sheepskin will cost $ 300,000 , give or take a few pizzas-with-everything at exam time .
Stanford , MIT and other utmosts will cost no less .
So what 's a parent to do ?
Some investment advisers are suggesting , in effect , a bet on a start-up investment pool -- maybe even on margin .
Others prefer deep-discount zero-coupon bonds .
Still others say , Why not take a chance on a high-octane growth fund ?
`` You 're not going to make it in a 5 % bank account , '' says James Riepe , director of mutual funds at T. Rowe Price .
To get the necessary growth , adds Murray Ruffel , a marketing official at the Financial Programs mutual-fund group , `` you need to go to the stock market . ''
In other words , a little volatility never hurt .
It never hurt anyone , that is , unless the growth funds do n't grow when you need them to .
Or the zero-coupon bonds turn out not to have been discounted deeply enough to pay your kid 's tuition .
That 's the dilemma for today 's parent .
Although many experts are advising risk , no one has a good answer for you if the risk does n't pay off .
Help may be on the way .
The antitrust division of the Justice Department is investigating the oddly similar tuition charges and increases among the top schools .
Fear of the price police could help cool things off in the 1990s .
And then there 's always State U .
But parents ' craving for a top-rated education for their children is growing like their taste for fancy wheels and vintage wine .
Belatedly aware of public concern , lawmakers and financial middlemen are working overtime to create and sell college savings and investment schemes .
Their message , explicit or implicit , is that a good college will cost so much by whenever you want it that the tried and true wo n't do anymore .
Forget about Treasury bills or a money-market fund .
The latest wave of marketing is instructive .
Several outfits -- including the Financial Programs , Franklin , and T. Rowe Price mutual-fund groups and the Edward D. Jones brokerage house -- are advertising `` college planner '' tables and charts that tell you how much you need to put aside regularly .
The calculations generally rely on an after-tax rate of return of 8 % annually -- a rate historically obtainable by the individual in only one place , the stock market .
Most of the mailers are free , but Denver-based Financial Programs sells , for $ 15 , a version customized to the age of the child and the college of choice .
The figures are shocking .
To build a nest egg that would pay for Stanford when a current first-grader reaches college age , parents would need to set aside $ 773.94 a month -- for 12 years .
They can cut this to $ 691.09 a month if the investing keeps up through college .
And they can further reduce the monthly amount if they start saving earlier -- when mother and child come home from the hospital .
Plugging a cheaper college into the formulas still does n't generate an installment most people can live with .
Using a recent average private-school cost of about $ 12,500 a year , T. Rowe Price 's planner prescribes $ 450 monthly if the plan begins when the child is six .
Since the formula assumes an 8 % before-tax return in a mutual fund , there would also be $ 16,500 in taxes to pay over the 12 years .
Not everyone is so pessimistic .
`` People are basically peddling a lot of fear , '' says Arthur Hauptman , a consultant to the American Council on Education in Washington .
He takes issue with projections that do n't factor in students ' own contribution , which reduces most parents ' burden substantially .
Still , he says , `` it 's no bad thing '' if all the marketing prods people into putting aside a little more . ``
The situation you want to avoid is having somebody not save anything and hope they 'll be able to do it out of current income , '' he says .
`` That 's crazy . ''
His advice : Do n't panic .
Parents , he says , should aim at whatever regular investment sum they can afford .
Half the amount that the investment tables suggest might be a good goal , he adds .
That way , parents will reduce borrowings and outlays from current income when the time comes to pay tuition .
Mr. Hauptman reckons that the best investment choice is mutual funds because they are managed and over time have nearly kept up with the broad stock averages .
He favors either an all-stock fund or a balanced fund that mixes both stocks and bonds .
In their anxiety , however , parents and other student benefactors are flocking to new schemes .
They have laid out about $ 1 billion for so-called baccalaureate zero-coupon municipal bonds -- so far offered by Connecticut , Illinois , Virginia and eight other states .
And they have bought about $ 500 million in prepaid-tuition plans , offered in Michigan , Florida and Wyoming .
The prepaid plans take payment today -- usually at current tuitions or at a slight discount -- for a promise that tuition will be covered tomorrow .
The baccalaureate bonds -- tax-free , offered in small denominations and usually containing a provision that they wo n't be called before maturity -- seem to be tailor-made for college savers .
Like other zeros , they pay all their interest at maturity , meaning that buyers can time things so that their bonds pay off just when Junior graduates from high school .
Their compounding effect is also alluring .
In June , Virginia sold bonds for $ 268.98 that will pay $ 1,000 in 2009 .
But Richard Anderson , head of the Forum for College Financing Alternatives , at Columbia University , a research group partly financed by the federal government , says zeros are particularly ill-suited .
Their price falls further than that of other bonds when inflation and interest rates kick up .
That wo n't matter if they are held to maturity , but if , for any reason , the parents need to sell them before then , there could be a severe loss of principal .
Had zeros been available in 1972 and had parents bought a face amount equal to four years ' tuition at the time , aiming for their children 's 1988 enrollment , they would have been left with only enough to pay for two years , Mr. Anderson figures .
Most other bonds , however , would probably not have fared much better .
The prepaid plans may be a good bet , provided the guarantee of future tuition is secure .
Issuing states generally limit the guarantees to in-state institutions , however , and buyers get refunds without much interest if the children do n't attend the specified schools .
Two private groups are seeking Securities and Exchange Commission approval for plans that could be more broadly transferable .
Mr. Anderson wants the prestige colleges to sponsor such a plan .
The issue here may be the soundness of the guarantee .
Prepayments , much like mutual-fund purchases , are pooled for investment .
Sponsors are naturally counting on their ability to keep ahead of tuition inflation with investment returns .
But buyers are essentially betting on a start-up investment fund with no track record -- and some have been encouraged to borrow to do so .
One problem is that the Internal Revenue Service has decided that the investment earnings and gains of the sponsors ' funds are taxable .
The colleges , as educational institutions , had hoped that would n't be the case .
Based on historical rates of return , Mr. Anderson reckons a 100 % stock portfolio , indexed to the market , would have kept up with tuition and taxes in the 20th century .
But sponsors might not pick the stocks that will match the market .
And they 're leaning more toward fixed income , whose returns after tax have trailed tuition increases .
`` I 'm not sure they 're going to make it work , '' says Mr. Anderson .
What happens if the sponsors do n't have the cash to pay the tuitions ?
Florida and Wyoming have backed up their guarantees with the full faith and credit of the state governments , meaning that taxpayers will pick up any slack .
Not so Michigan .
Its plan is set up as an independent agency .
The state says there 's no worry -- investment returns , combined with fees and the gains from unused plans , will provide all the cash it needs .
Mr. Putka covers education from The Wall Street Journal 's Boston bureau .
If you start saving for your child 's eduction on Jan. 1 , 1990 , here 's the monthly sum you will need to invest to pay for four years at Yale , Notre Dame and University of Minnesota .
Figures assume a 7 % annual rise in tuition , fees , room and board and an 8 % annual investment return .
Note : These figures are only for mandatory charges and do n't include books , transportation etc .
For in-state students
Source : PaineWebber Inc .
AMONG THE CATFISH farmers in the watery delta land of Humphreys County , Miss. , Allen D. Tharp of Isola was one of the best known and most enterprising .
He sold quarter-inch fingerlings to stock other farmers ' ponds , and he bought back one-pound-or-so food-fish that he `` live-hauled '' to market along with his own whiskery crop .
And he nearly always bought and sold for cash .
Along the way , Mr. Tharp omitted a total of $ 1.5 million from his receipts reported on federal tax returns for three years .
The returns landed in the hands of an Internal Revenue Service criminal investigator , Samuel James Baker .
Mr. Baker interviewed or wrote to hundreds of catfish farmers , live-haulers and processors throughout the South before coming up with detailed estimates of purchases and sales , in pounds and dollars , by Mr. Tharp and others .
Unknown to Mr. Tharp , he had fouled his net on a special IRS project to catch catfish farmers and haulers inclined to cheat on their taxes .
Confronted with the evidence , Mr. Tharp pleaded guilty to one charge of filing a false return and was fined $ 5,000 and sentenced to 18 months in prison .
He also owes a lot of back taxes , interest and civil fraud penalties .
A lot of taxpayers out there are n't as paranoid as one might think .
Federal and state tax enforcers develop many group targets for investigation , on the basis of occupation , high income , type of income , or some other characteristic that may signal an opportunity or tendency to hide income or exaggerate deductions .
Many professions long have seemed to be targets because of the exotic or ludicrous efforts of some members to offset high income with fake losses from phony tax shelters : dentists who invested in dubiously dubbed foreign films or airline pilots who raised racehorses on their days off .
Mail-order ministers have been squelched .
Now , television and radio evangelists are under scrutiny .
The IRS recently won part of its long-running battle with the Church of Scientology over exemptions when the U.S. Supreme Court held that members ' payments to the church were n't deductible because the members received services in return .
IRS statistics show that the more persistent hiders of income among sole proprietors of businesses include used-car dealers , entertainment producers , masons , roofers , and taxi owners .
Small businesses in general account for almost 40 % of unreported personal income , the IRS has said .
Once such abuses become so pervasive , the IRS builds another factor into its secret computer formula for selecting returns for audit and does n't need special projects for them .
San Franciscans have a much higher incidence of audits than average because more of them score high under that formula , not because IRS agents envy their life styles .
Many openings for mass cheating , such as questionable tax shelters and home offices , have gaped so broadly that Congress has passed stringent laws to close them .
Deductions of charitable gifts of highly valued art now must be accompanied by appraisals .
And laws requiring the reporting of more varieties of transactions have enabled the IRS to rely on computers to ferret out discrepancies with returns and to generate form-letter inquiries to taxpayers .
Unreported alimony income can be spotted by computer because a payer of alimony -LRB- who gets a deduction -RRB- must report the former spouse 's Social Security number .
Passport applicants now must give Social Security numbers , enabling the IRS to see whether Americans living abroad are filing required U.S. returns .
But while IRS computers focus routinely on target groups like these , the agency has assigned many agents to special projects that need more personal attention .
In most cases , the IRS says , these projects are local or regional , rather than national , and arise because auditors in an area detect some pattern of abuse among , say , factory workers claiming that having a multitude of dependents frees them from tax withholding or yacht owners deducting losses from sideline charter businesses .
The national office currently has 21 noncriminal audit projects , according to Marshall V. Washburn , deputy assistant commissioner for examination .
Auditors involved in noncriminal projects ca n't send anyone to jail , but they can make life miserable in other ways -- for one , by imposing some of the 150 different civil penalties for negligence , failure to file a return , and the like .
The targeted audit groups include direct sellers -- people who sell cosmetics , housewares and other items door to door or at home parties -- and employers who label workers as independent contractors instead of employees , to avoid the employer share of payroll taxes .
Other projects look for offenders among waiters who get cash tips , people who engage in large cash transactions , and people whose returns show they sold a home for a profit without reinvesting the capital gain in another home by the end of the same year ; the gain must be rolled over within two years to defer tax .
And now that returns must show dependents ' Social Security numbers , the IRS wants to see which dependents show up on more than one return -- and which dependents turn out to be deceased .
Impetus for the direct-seller project came from a congressional hearing some years back .
It prompted an IRS study that found many sellers were concealing income and treating large amounts of nondeductible travel and other personal expenses as business costs , Mr. Washburn says .
The study provided criteria for singling out returns of `` potentially noncompliant '' taxpayers who report low income and large expenses from a part-time business .
The Tax Court recently denied business deductions by Mr. and Mrs. Peter S. Rubin of Cherry Hill , N.J. , who both were part-time distributors of Amway products in addition to their regular jobs as sales people in other fields .
For 1984 , they reported gross income of $ 1,647 from Amway sales , offset by expenses totaling $ 16,746 -- including car costs of $ 6,805 and travel and entertainment costs of $ 5,088 .
The Tax Court did n't believe that the Rubins , who earned $ 65,619 in their regular jobs , treated the sideline as a real business and derived `` merely incidental elements of recreation and other personal pleasure and benefits '' from it .
The Direct Selling Association , a trade group , points out that its members , which include Amway Corp. , cooperate with the IRS to distribute tax-compliance material to sales people and are helping to prepare a public-service television program on the subject .
The independent-contractor project , which began in 1988 , involves about 350 IRS agents .
In the fiscal nine months ended June 30 , reports Raymond P. Keenan , assistant commissioner for collection , they examined about 13,000 employers , assessed more than $ 67 million in delinquent employment taxes , and reclassified about 56,000 workers as employees instead of self-employed contractors .
The number of misclassified workers may be in the millions , mostly paid by small firms .
Many workers , especially professionals , want to remain independent to avoid tax withholding and to continue to deduct many expenses that employees ca n't .
But many others , who want to qualify for employee benefits and unemployment compensation , become tipsters for the IRS , says Jerry Lackey , who manages the IRS project 's force of nine agents in north and central Florida from Orlando .
Firms that are paying employment taxes also provide leads to competitors that are n't , he says .
In his area , Mr. Lackey continues , the miscreant employers most commonly are in construction -- doing framing , drywall , masonry and similar work .
But a medical clinic with about 20 employees wrongly listed all of them -- including physicians and receptionists -- as independent contractors .
The IRS assessed the clinic $ 350,000 in back payroll taxes .
It assessed nearly $ 500,000 against a cruise-ship company that carried about 100 deckhands , cooks , bartenders , entertainers and other employees as self-employed independents .
Revenue-short states also are becoming more aggressive pursuers of tax delinquents , and perhaps none tracks them down with more relish than does New York since it acquired an $ 80 million computer system in 1985 .
The state 's tax enforcers have amassed data bases from other New York agencies that license or register professionals and businesses ; from exchange agreements with the IRS , 24 other states , and two Canadian provinces , and even from phonebook Yellow Pages .
Thus armed for massive matching of documents by computer , they single out high-income groups , looking primarily for people who have n't filed New York income-tax returns .
The state has combed through records relating to architects , stockbrokers , lawyers in the New York City area , construction workers from out of the state , and homeowners who claim to be residents of other states -- especially Florida , which has no personal income tax .
Soon to feel the glare of attention are lawyers elsewhere in the state , doctors , dentists , and accountants , says Frederick G. Hicks , director of the tax-department division that develops the computer-matching programs .
The department has collected over $ 6.5 million from brokers so far and recommended more than 30 of them for criminal prosecution .
In the early stage of checking people with incomes exceeding $ 500,000 who were filing nonresident returns , it squeezed $ 7.5 million out of a man who was posing as a Florida resident .
`` We think we can reclaim hundreds of millions of dollars just through the nonresident project , '' Mr. Hicks declares .
Mr. Schmedel is editor of The Wall Street Journal 's Tax Report column .
In finding `` good news '' in Berkeley 's new freshman admissions plan -LRB- `` The Privileged Class , '' editorial , Sept. 20 -RRB- , you 're reading the headline but not the story .
The plan indeed raises from 40 % to 50 % the number of freshmen applicants admitted strictly by academic criteria .
But that does n't mean `` half of the students attending Berkeley '' will be admitted this way .
The plan is talking about applicants admitted , not students who enroll .
Since the `` yield '' from this top slice of applicants is relatively low , boosting admits from 40 % to 50 % will boost registrants from about 31 % to 38 % of the class .
In addition , perhaps 5 % of registrants will come from a new category consisting of applicants whose academic credentials `` narrowly missed '' gaining them admission in the first category .
But against that combined increase of 12 % in students chosen by academic criteria , the plan eliminates a large category in which admissions now are based on grades , test scores and `` supplemental points '' for factors such as high-school curriculum , English-language proficiency and an essay .
This category now accounts for about 19 % of admits and 22 % of registrants .
The plan thus will decrease by 22 % , for a net loss of 10 % , the number of students admitted primarily by academic criteria .
Who will take over these places ?
The plan creates a new category of students from `` socioeconomically disadvantaged backgrounds , '' a concept not yet defined , and gives about 10 % of the class .
One of the plan 's authors has defended the `` socioeconomic disadvantage '' category as perhaps making more sense than the current affirmative-action preferences based on race .
Perhaps it does .
But the new category does not replace or reduce Berkeley 's broad racial preferences .
Nor will students from racial-minority groups who are admitted through the new category be counted against the affirmative-action `` target '' for their group .
The plan thus places a large new affirmative-action program , based on `` socioeconomic disadvantage , '' on top of the existing program based on race .
The role of academic criteria in choosing Berkeley 's freshmen can only decline as a result .
Stephen R. Barnett Professor of Law University of California Berkeley , Calif .
FOR THOSE WHO DELIGHT in the misfortune of others , read on .
This is a story about suckers .
Most of us know a sucker .
Many of us are suckers .
But what we may not know is just what makes somebody a sucker .
What makes people blurt out their credit-card numbers to a caller they 've never heard of ?
Do they really believe that the number is just for verification and is simply a formality on the road to being a grand-prize winner ?
What makes a person buy an oil well from some stranger knocking on the screen door ?
Or an interest in a retirement community in Nevada that will knock your socks off , once it is built ?
Because in the end , these people always wind up asking themselves the same question : `` How could I be so stupid ? ''
There are , unfortunately , plenty of answers to that question -- and scam artists know all of them .
`` These people are very skilled at finding out what makes a person tick , '' says Kent Neal , chief of the economic-crime unit of the Broward County State Attorney 's Office in Fort Lauderdale , Fla. , a major haven for boiler rooms .
`` Once they size them up , then they know what buttons to push .
John Blodgett agrees -- and he ought to know .
He used to be a boiler-room salesman , peddling investments in oil and gas wells and rare coins .
`` There 's a definite psychology of the sale and different personalities you pitch different ways , '' he says .
The most obvious pitch , of course , is the lure of big returns .
`` We 're all a little greedy .
Everyone is vulnerable , '' says Charles Harper , associate regional administrator for the Securities and Exchange Commission in Miami .
`` These guys prey on human frailties . ''
While the promises of big profits ought to set off warning bells , they often do n't , in part because get-rich-quick tales have become embedded in American folklore .
`` The overnight success story is part of our culture , and our society puts an emphasis on it with lotteries and Ed McMahon making millionaires out of people , '' says Michael Cunningham , an associate professor of psychology at the University of Kentucky in Louisville .
`` Other people are making it overnight , and the rest who toil daily do n't want to miss that opportunity when it seems to come along . ''
Adds Spencer Barasch , branch chief for enforcement at the SEC in Fort Worth , Texas : `` Why do people play the lottery when the odds are great against them ?
People are shooting for a dream . ''
Clearly , though , scam artists have to be a bit more subtle than simply promising millions ; the psychology of suckers is n't simply the psychology of the greedy .
There 's also , for instance , the need to be part of the in-crowd .
So one popular ploy is to make a prospective investor feel like an insider , joining an exclusive group that is about to make a killing .
Between 1978 and 1987 , for instance , SH Oil in Winter Haven , Fla. , sold interests in oil wells to a very select group of local residents , while turning away numerous other eager investors .
The owner of the company , Stephen Smith , who has since pleaded guilty to state and federal fraud charges , confided to investors that he had a secret agreement with Amoco Oil Co. and said the location of his wells was confidential , according to a civil suit filed in a Florida state court by the Florida comptroller 's office .
Neither the Amoco agreement nor the wells existed , the suit alleged .
Such schemes , says Tony Adamski , chief of the financial-crimes unit of the Federal Bureau of Investigation in Washington , D.C. , appeal to investors ' `` desire to believe this is really true and that they are part of a chosen group being given this opportunity . ''
At times , salesmen may embellish the inside information with `` the notion that this is some slightly shady , slightly illegal investment the person is being included in , '' says Mr. Cunningham .
In appealing to those with a bit of larceny in their hearts , the fraud artist can insist that a person keep an investment secret -- insulating himself from being discovered and keeping his victim from consulting with others .
It also adds to the mystery of the venture .
Mr. Blodgett , the boiler-room veteran , believes that for many investors , the get-rich-quick scams carry a longed-for element of excitement .
`` Once people got into it , I was allowing them to live a dream , '' he says .
He phoned them with updates on the investment , such as `` funny things that happened at the well that week , '' he says .
`` You gave them some excitement that they did n't have in their lives . ''
-LRB- Mr. Blodgett , who was convicted in Florida state court of selling unregistered securities and in California state court of unlawful use of the telephone to defraud and deceive , is now on probation .
He says he has quit the business and is back in school , majoring in psychology with aspirations to go into industrial psychology . -RRB-
For some investors , it 's the appearances that leave them deceived .
`` The trappings of success go a long way -- wearing the right clothes , doing the right things , '' says Paul Andreassen , an associate professor of psychology at Harvard .
Conservative appearances make people think it 's a conservative investment .
`` People honestly lose money on risky investments that they did n't realize were a crapshoot , '' he says .
Paul Wenz , a Phoenix , Ariz. , attorney , says a promise of unrealistic returns would have made him leery .
But Mr. Wenz , who says he lost $ 43,000 in one precious-metals deal and $ 39,000 in another , says a salesman `` used a business-venture approach '' with him , sending investment literature , a contract limiting the firm 's liability , and an insurance policy .
When he visited the company 's office , he says , it had `` all the trappings of legitimacy . ''
Still others are stung by a desire to do both well and good , says Douglas Watson , commanding officer of the Los Angeles Police Department 's bunko-forgery division .
Born-again Christians are the most visible targets of unscrupulous do-gooder investment pitches .
But hardly the only ones : The scams promise -- among other things -- to help save the environment , feed starving families and prevent the disappearance of children .
Psychologists say isolated people who do n't discuss their investments with others are particularly at risk for fraud .
Scam artists seek out such people -- or try to make sure that their victims isolate themselves .
For instance , salesmen may counter a man 's objection that he wants to discuss an investment with his wife by asking , `` Who wears the pants in your family ? ''
Or an investor who wants his accountant 's advice may be told , `` You seem like a guy who can make up his own mind . ''
Often con artists will try to disarm their victims by emphasizing similarities between them .
William Lynes , a retired engineer from Lockheed Corp. , says he and his wife , Lily , warmed to the investment pitches of a penny-stock peddler from Stuart-James Co. in Atlanta after the broker told them he , too , had once worked with Lockheed .
The Lyneses , of Powder Springs , Ga. , have filed suit in Georgia state court against Stuart James , alleging fraud .
They are awaiting an arbitration proceeding .
They say the broker took them out for lunch frequently .
He urged them to refer their friends , who also lost money .
-LRB- Donald Trinen , an attorney for the penny-brokerage firm , denies the fraud allegations and says the Lyneses were fully apprised that they were pursuing a high-risk investment . -RRB-
`` It 's not uncommon for these guys to send pictures of themselves or their families to ingratiate themselves to their clients , '' says Terree Bowers , chief of the major-frauds section of the U.S. attorney 's office in Los Angeles . `` We 've seen cases where salesmen will affect the accent of the region of the country they are calling .
Anything to make a sale . ''
Experts say that whatever a person 's particular weak point , timing is crucial .
People may be particularly vulnerable to flim-flam pitches when they are in the midst of a major upheaval in their lives .
`` Sometimes when people are making big changes , retiring from their jobs , moving to a new area , they lose their bearings , '' says Maury Elvekrog , a licensed psychologist who is now an investment adviser and principal in Seger-Elvekrog Inc. , a Birmingham , Mich. , investment-counseling firm .
`` They may be susceptible to some song and dance if it hits them at the right time . ''
They are obviously also more susceptible when they need money-retirees , for instance , trying to bolster their fixed income or parents fretting over how to pay for a child 's college expenses .
`` These people are n't necessarily stupid or naive .
Almost all of us in comparable circumstances might be victimized in some way , '' says Jerald Jellison , a psychology professor at the University of Southern California in Los Angeles .
Nick Cortese thinks that 's what happened to him .
Mr. Cortese , a 33-year-old Delta Air Lines engineer , invested some $ 2,000 in penny stocks through a broker who promised quick returns .
`` We were saving up to buy a house , and my wife was pregnant , '' says Mr. Cortese .
`` It was just before the Christmas holidays , and I figured we could use some extra cash . ''
The investment is worth about $ 130 today .
`` Maybe it was just a vulnerable time , '' says Mr. Cortese .
`` Maybe the next day or even an hour later , I would n't have done it . ''
Ms. Brannigan is a staff reporter in The Wall Street Journal 's Atlanta bureau .
Prices for seats on the New York Stock Exchange are recovering a bit after hitting a four-year low earlier this month .
Two seats on the Big Board were sold yesterday for $ 455,000 , and then $ 500,000 .
The previous sale was $ 436,000 on Oct. 17 ; the last time prices were that low was November 1985 , when a seat sold for $ 425,000 .
Prices peaked at $ 1,150,000 in September 1987 .
Seats are currently quoted at $ 430,000 bid and $ 525,000 asked .
FOX HUNTING HAS been defined as the unspeakable in pursuit of the inedible , but at least it 's exercise .
At least it has a little dash .
Most of us have to spend our time on pursuits that afford neither , drab duties rather than pleasures .
Like trying to buy life insurance , for instance , an endeavor notably lacking in dash .
Call it the uninformed trudging after the incomprehensible .
But sooner or later , most of us have to think about life insurance , just as we often have to think about having root-canal work .
And my time has come .
I 'm 33 , married , no children , and employed in writing stories like this one .
In times past , life-insurance salesmen targeted heads of household , meaning men , but ours is a two-income family and accustomed to it .
So if anything happened to me , I 'd want to leave behind enough so that my 33-year-old husband would be able to pay off the mortgage and some other debts -LRB- though not , I admit , enough to put any potential second wife in the lap of luxury -RRB- .
Figuring that maybe $ 100,000 to $ 150,000 would do but having no idea of what kind of policy I wanted , I looked at the myriad products of a dozen companies -- and plunged into a jungle of gibberish .
Over the past decade or two , while I was thinking about fox hunting , the insurance industry has spawned an incredible number of products , variations on products , and variations on the variations .
Besides term life and whole life -LRB- the old standbys -RRB- , we now have universal life , universal variable life , flexible adjustable universal life , policies with persistency bonuses , policies festooned with exotic riders , living benefit policies , and on and on .
What to do ?
First , generalize .
Shorn of all their riders , special provisions , and other bells and whistles , insurance policies can still be grouped under two broad categories : so-called pure insurance , which amasses no cash value in the policy and pays off only upon death , and permanent insurance , which provides not only a death benefit but also a cash value in the policy that can be used in various ways while the insured is still alive .
If all you want is death-benefit coverage , pure insurance -- a term policy -- gives you maximum bang for your buck , within limits .
It 's much cheaper than permanent insurance bought at the same age .
But `` term '' means just that ; the policy is written for a specific time period only and must be renewed when it expires .
It may also stipulate that the insured must pass another medical exam before renewal ; if you flunk -- which means you need insurance more than ever -- you may not be able to buy it .
Even if you 're healthy and can renew , your premium will go up sharply because you 're that much older .
So term insurance may not be as cheap as it looks .
There are all sorts of variations on term insurance : policies structured to pay off your mortgage debt , term riders tacked on to permanent insurance , and many others .
One variation that appealed to me at first was the `` Money Smart Term Life '' policy offered by Amex Life Insurance Co. , the American Express unit , to the parent company 's credit-card holders .
Upon examination , however , I wondered whether the plan made a lot of sense .
Amex said it would charge me $ 576 a year for $ 100,000 of coverage -- and would pay me back all the premiums I put in if I canceled the policy after 10 years .
Sounds great -- or does it ?
First , if I canceled , I 'd have no more insurance , a not insignificant consideration .
Second , the $ 5,760 I 'd get back would be much diminished in purchasing power by 10 years of inflation ; Amex , not I , would get the benefit of the investment income on my money , income that would have exceeded the inflation rate and thus given the company a real profit .
Third and most important , Amex would charge me a far higher premium than other reputable companies would on a straight term policy for the same amount ; I 'd be paying so heavily just to have the option of getting my premiums back that I 'd almost have to cancel to make the whole thing worthwhile .
That would be all right with Amex , which could then lock in its investment profit , but it does n't add up to a `` smart money '' move for me .
Which goes to show that the First Law applies in insurance as in anything else : There is no free lunch , there is only marketing .
And the Second Law , unique to insurance ?
If I die early , I win -- a hollow victory , since I ca n't enjoy it -- and if I live long , the insurer wins .
This is worth remembering when insurers and their salesmen try to sell you permanent insurance , the kind that amasses cash value .
The word `` death '' can not be escaped entirely by the industry , but salesmen dodge it wherever possible or cloak it in euphemisms , preferring to talk about `` savings '' and `` investment '' instead .
The implication is that your permanent-insurance policy is really some kind of CD or mutual-fund account with an added feature .
That is gilding the lily .
The fact is that as a savings or investment vehicle , insurance generally runs a poor second to any direct investment you might make in the same things the insurance company is putting your money into .
That 's because you have to pay for the insurance portion of the policy and the effort required to sell and service the whole package .
Again , no free lunch .
This is reflected in a built-in mortality cost -- in effect , your share of the company 's estimated liability in paying off beneficiaries of people who had the effrontery to die while under its protection .
And in most cases , a huge hunk of your premium in the initial year or two of the the policy is , in effect , paying the salesman 's commission as well ; investment returns on most policies are actually negative for several years , largely because of this .
So view permanent insurance for what it is -- a compromise between pure insurance and direct investment .
The simplest , most traditional form of permanent insurance is the straight whole life policy .
You pay a set premium for a set amount of coverage , the company invests that premium in a portfolio of its choosing , and your cash value and dividends grow over the years .
One newer wrinkle , so called single-premium life -LRB- you pay for the whole policy at once -RRB- , has been immensely popular in recent years for tax reasons ; the insured could extract cash value in the form of policy `` loans , '' and none of the proceeds were taxable even though they included gains on investment .
Congress closed this loophole last year , or thought it did .
However , Monarch Capital Corp. of Springfield , Mass. , has developed a `` combination plan '' of annuity and insurance coverage that it says does not violate the new regulations and that allows policy loans without tax consequences .
But the percentage of your cash reserve that you can borrow tax-free is very small .
I 'm not prepared in any case to put that much money into a policy immediately , so I look into the broad category called universal life .
Hugely popular , it is far more flexible than straight whole life .
I can adjust the amount of insurance I want against the amount going into investment ; I can pay more or less than the so-called target premium in a given year ; and I can even skip payments if my cash reserves are enough to cover the insurance portion of the policy .
In looking at these and other policies , I learn to ask pointed questions about some of the assumptions built into `` policy illustrations '' -- the rows of numbers that show me the buildup of my cash values over the years .
They commonly give two scenarios : One is based on interest rates that the company guarantees -LRB- usually 4 % to 4.5 % -RRB- and the other on the rate it is currently getting on investment , often 8.5 % or more .
Projecting the latter over several decades , I find my cash buildup is impressive -- but can any high interest rate prevail for that long ?
Not likely , I think .
Also , some policy illustrations assume that mortality costs will decline or that I will get some sort of dividend bonus after the 10th year .
These are not certain , either .
Companies `` are n't comfortable playing these games , but they realize they 're under pressure to make their policies look good , '' says Timothy Pfiefer , an actuarial consultant at Tillinghast , a unit of Towers Perrin Co. , the big New York consulting firm .
Another factor to consider : Some of the companies currently earning very high yields are doing so through substantial investment in junk bonds , and you know how nervous the market has been about those lately .
There are seemingly endless twists to universal life , and it pays to ask questions about all of them .
At a back-yard barbecue , for example , a friend boasts that she 'll only have to pay premiums on her John Hancock policy for seven years and that her death benefits will then be `` guaranteed . ''
I call her agent , David Dominici .
Yes , he says , premiums on such variable-rate coverage can be structured to `` vanish '' after a certain period -- but usually only if interest rates stay high enough to generate sufficient cash to cover the annual cost of insurance protection .
If interest rates plunge , the insurer may be knocking on my door , asking for steeper premium payments to maintain the same amount of protection .
I do n't like the sound of that .
Some insurers have also started offering `` persistency bonuses , '' such as extra dividends or a marginally higher interest yield , if the policy is maintained for 10 years .
But Glenn Daily , a New York-based financial consultant , warns that many of these bonuses are `` just fantasies , '' because most are n't guaranteed by the companies .
And the feature is so new , he adds , that no insurer has yet established a track record for actually making such payments .
So-called living-benefits provisions also merit a close inspection .
Offered by insurers that include Security-Connecticut Life Insurance Co. , Jackson National Life Insurance Co. , and National Travelers Life Insurance Co. , these policy riders let me tap a portion of my death benefits while I 'm still alive .
Some provisions would let me collect a percentage of the policy 's face value to pay for long-term care such as nursing-home stays ; others would allow payments for catastrophic illnesses and conditions such as cancer , heart attarcks , renal failure and kidney transplants .
But the catastrophic events for which the policyholder can collect are narrowly defined , vary from policy to policy , and generally permit use of only a small fraction of the face amount of insurance .
Also , financial planners advising on insurance say that to their knowledge there has not yet been a tax ruling exempting these advance payments from taxes .
And considering the extra cost of such provisions , some figure that people interested in , say , paying for extended nursing-home care would be better off just buying a separate policy that provides it .
I 'm more favorably impressed by `` no-load life , '' even though it turns out to be low-load life .
Insureres selling these policies market them directly to the public or otherwise do n't use commissioned salesmen ; there is still a load -- annual administrative fees and initial `` setup '' charges -- but I figure that the lack of commission and of `` surrender fees '' for dropping the policy early still saves me a lot .
I compared one universal policy for $ 130,000 face amount from such an insurer , American Life Insurance Corp. of Lincoln , Neb. , with a similar offering from Equitable Life Assurance Society of the U.S. , which operates through 11,000 commissioned salesmen .
After one year I could walk away from the Ameritas policy with $ 792 , but Id get only $ 14 from the Equitable .
The difference is magnified by time , too .
At age 65 , when I 'd stop paying premiums , the Ameritas offering would have a projected cash value $ 14,000 higher than the other , even though the Equitable 's policy illustration assumed a fractionally higher interest rate .
Did I buy it ?
Well , not yet .
I 'm thinking about using the $ 871 annual premium to finance a trip to Paris first .
A person can do some heavy thinking about insurance there -- and shop for something more exciting while she 's doing it .
Rorer Group Inc. will report that third-quarter profit rose more than 15 % from a year earlier , though the gain is wholly due to asset sales , Robert Cawthorn , chairman , president and chief executive officer , said .
His projection indicates profit in the latest quarter of more than $ 17.4 million , or 55 cents a share , compared with $ 15.2 million , or 48 cents a share , a year ago .
Mr. Cawthorn said in an interview that sales will show an increase from a year ago of `` somewhat less than 10 % . ''
Through the first six months of 1989 , sales had grown about 12 % from the year-earlier period .
Growth of 10 % would make sales for the latest quarter $ 269 million , compared with $ 244.6 million a year ago .
Mr. Cawthorn said the profit growth in the latest quarter was due to the sale of two Rorer drugs .
Asilone , an antacid , was sold to Boots PLC , London .
Thrombinar , a drug used to stanch bleeding , was sold to Jones Medical Industries Inc. , St. Louis .
He said Rorer sold the drugs for `` nice prices '' and will record a combined , pretax gain on the sales of $ 20 million .
As the gain from the sales indicates , operating profit was `` significantly '' below the year-earlier level , Mr. Cawthorn said .
Rorer in July had projected lower third-quarter operating profit but higher profit for all of 1989 .
He said the company is still looking for `` a strong fourth quarter in all areas -- sales , operating income and net income . ''
Mr. Cawthorn attributed the decline in third-quarter operating profit to the stronger dollar , which reduces the value of overseas profit when it is translated into dollars ; to accelerated buying of Rorer products in the second quarter because of a then-pending July 1 price increase , and to higher marketing expenses for Rorer 's Maalox antacid , whose sales and market share in the U.S. had slipped in the first half of 1989 .
He said Rorer opted to sell Asilone and Thrombinar to raise revenue that would `` kick start '' its increased marketing efforts behind Maalox , still its top-selling product with about $ 215 million in world-wide sales in 1988 .
`` We had underfunded Maalox for a year , '' he said , because the company was concentrating on research and development and promoting other drugs .
He said Rorer will spend $ 15 million to $ 20 million more on Maalox advertising and promotion in the second half of 1989 than in the year-earlier period .
A `` big chunk '' of that additional spending came in the third quarter , he said .
Hoechst AG said it will stop producing fertilizer in 1990 because of continued losses and a bleak outlook .
The West German chemical concern said it will close the last remaining fertilizer plant in Oberhausen in the fall of next year .
Hoechst said the fertilizer market faces overcapacity in Western Europe , rising imports from East bloc countries and overseas , and declining demand .
HomeFed Corp. said its main subsidiary , Home Federal Savings & Loan , converted from a federal savings and loan to a federal savings bank and changed its name to HomeFed Bank .
The federal Office of Thrift Supervision approved the conversion last Friday , HomeFed said .
The change in charter does n't alter the federal insurance of deposits , federal regulatory powers or company operations , a spokesman said .
It was the second anniversary of the 1987 crash , but this time it was different .
Stocks rallied on good earnings reports and on data that showed less inflation than expected .
Blue chips led the march up in heavy trading .
The Dow Jones Industrial Average rose 39.55 points to 2683.20 .
The 30 industrials led the market higher from the opening bell as foreign buyers stepped in .
By afternoon , the broader market joined the advance in full strength .
Standard & Poor 's 500-stock Index rose 5.37 to 347.13 and the Nasdaq composite index jumped 7.52 to 470.80 .
New York Stock Exchange volume swelled to 198,120,000 shares .
The industrials were up about 60 points in the afternoon , but cautious investors took profits before the close .
Traders said a variety of factors triggered the rally .
The consumer price index rose 0.2 % in September , while many economists were looking for a 0.4 % increase .
Stock-index arbitrage buy programs -- in which traders buy stock against offsetting positions in futures to lock in price differences -- helped the rally 's momentum .
The euphoria was such that investors responded to good earnings reports of companies such as American Express , while ignoring the disappointing profits of companies such as Caterpillar , analysts said .
Stock-index arbitrage trading was a minor influence in yesterday 's rally , traders said .
Institutional buyers were the main force pushing blue chips higher .
To the amazement of some traders , takeover stocks were climbing again .
Hilton rose 2 to 100 , for example .
Last Friday , takeover traders spilled out of Hilton , knocking the stock down 21 to 85 .
Among other stocks involved in restructurings or rumored to be so : Holiday Corp. gained 1 to 73 and Honeywell rose 2 to 81 .
One floor trader noted in astonishment that nobody seemed to mind the news that British Airways is n't making a special effort to revive the UAL buy-out .
The announcement of the buy-out 's troubles triggered the market 's nose dive a week ago .
Takeover enthusiasm may have been renewed when an investor group disclosed yesterday that it had obtained all the financing required to complete its $ 1.6 billion leveraged buy-out of American Medical International .
`` That 's put some oomph back into this market , '' said Peter VandenBerg , a vice president of equity trading at Shearson Lehman Hutton .
But some traders thought there was less to the rally than met the eye .
`` There is no strength behind this rally , '' asserted Chung Lew , head trader at Kleinwort Benson North America .
`` It 's traders squaring positions .
's not good ; the market is setting up for another fall . ''
Indeed , many traders said that uncertainty about today 's monthly expiration of stocks-index futures and options , and options on individual stocks , prompted a lot of buying by speculative traders who were unwinding positions that were bets on declining stock prices .
The number of outstanding contracts in the October Major Market Index jumped from 5,273 on Friday to 9,023 on Monday .
The MMI is a 20-stock index that mimics the Dow Jones Industrial Average .
Outstanding contracts are those that remain to be liquidated .
By Wednesday , the outstanding October contracts amounted to 8,524 , representing about $ 1.13 billion in stock , noted Donald Selkin , head of stock-index futures research at Prudential-Bache Securities , who expects a volatile expiration today .
`` There has been a tremendous increase '' in MMI positions , Mr. Selkin said .
Consumer stocks once again set the pace for blue-chip issues .
Philip Morris added 1 to 44 in Big Board composite trading of 3.7 million shares , Coca-Cola Co. gained 2 to 70 , Merck gained 1 to 77 and American Telephone & Telegraph advanced to 43 on 2.5 million shares .
American Medical jumped 1 to 23 .
IMA Acquisition , an investor group that includes First Boston and the Pritzker family of Chicago , said Chemical Bank had made arrangements for 23 other banks to provide $ 509 million in bank financing for the buy-out offer .
Chemical and six other banks , along with First Boston , are providing the rest of the $ 1.6 billion .
Elsewhere on the takeover front , Time Warner advanced 2 to 136 and Warner Communications tacked on to 63 .
The Delaware Supreme Court affirmed a ruling that barred Chris-Craft Industries from voting its Warner preferred stock as a separate class in deciding on the companies ' proposed merger .
Paramount Communications climbed 1 to 58 1 to 64 ; both media companies have long been mentioned as potential acquisition candidates .
Among other actual and rumored targets , Woolworth rose 1 to 60 1 , 1 to to .
In addition : -- Soo Line jumped 2 to 20 , above the $ 19.50 a share that Canadian Pacific offered for the company in a takeover proposal .
-- Xtra gained 1 to 27 .
Investor Robert M. Gintel , who owns a 4.7 % stake in the company , said he plans a proxy fight for control of its board .
-- Golden Nugget rose 2 to 28 .
Its board approved the repurchase of as many as three million common shares , or about 17 % of its shares outstanding .
Buying interest also resurfaced in the technology sector , including International Business Machines , whose board approved a $ 1 billion increase in its stock buy-back program .
IBM rose 2 to 104 as 2.2 million shares changed hands .
Compaq Computer soared 4 to 111 on 1.8 million shares in response to the company 's announcement of plans to introduce several products next month .
Digital Equipment gained 1 to 89 despite reporting earnings for the September quarter that were on the low end of expectations .
Among other technology issues , Cray Research rose 1 to 37 , Hewlett-Packard added 1 to 50 1 , to to .
On the other hand , Symbol Technologies dropped 1 to 18 after Shearson Lehman Hutton lowered its short-term investment rating on the stock and its 1989 earnings estimate , and Commodore International fell to 8 after the company said it expects to post a loss for the September quarter .
Insurance stocks continued to climb on expectations that premium rates will rise in the aftermath of the earthquake in the San Francisco area .
American International Group climbed 4 to 106 , General Re rose 3 to 89 , Kemper added 2 to 48 , AON went up 1 to 36 and Chubb rose 1 to 82 .
Stocks of major toy makers rallied in the wake of strong third-quarter earnings reports .
Mattel added 1 to 19 , Tonka firmed 1 to 18 and Lewis Galoob Toys rose to 13 on the Big Board , while Hasbro gained 1 to 21 on the American Stock Exchange .
Capital Cities-ABC surged 42 to 560 .
Kidder Peabody raised its investment rating on the stock and its earnings estimates for 1989 and 1990 , based on optimism that the company 's ABC television network will continue to fare well in the ratings .
Dun & Bradstreet lost 1 to 51 on 1.8 million shares .
Merrill Lynch lowered its short-term rating on the stock and its estimate of 1990 earnings , citing a sales slowdown in the company 's credit-rating business .
Pinnacle West Capital , which suspended its common-stock dividend indefinitely and reported a 91 % decline in third-quarter earnings , fell to 11 .
The Amex Market Value Index recorded its sharpest gain of the year by climbing 4.74 to 382.81 .
Volume totaled 14,580,000 shares .
B.A.T Industries , the most active Amex issue , rose to 12 .
The company received shareholder approval for its restructuring plan , designed to fend off a hostile takeover bid from a group headed by financier Sir James Goldsmith .
Chambers Development Class A jumped 3 to 37 and Class B rose 2 to 37 .
The company said six officers are buying a total of $ 1.5 million of its stock .
TRC Cos. , the target of an investigation by the U.S. inspector general , dropped 2 to 10 .
The probe involves testing procedures used on certain government contracts by the company 's Metatrace unit .
Avondale Industries Inc. , New Orleans , received a $ 23 million contract from the Navy to enlarge by 50 % the capacity of an auxiliary oiler .
The award results from the Navy 's exercising of an option in an earlier contract it awarded Avondale .
Richard J. Pinola was elected to the board of this personnel consulting concern , increasing its size to nine members .
Mr. Pinola is president and chief operating officer of Penn Mutual Life Insurance Co .
The Senate rejected a constitutional amendment that President Bush sought to protect the U.S. flag from desecration .
The 51-48 roll call fell well short of the two-thirds majority needed to approve changes to the Constitution .
The vote , in which 11 GOP lawmakers voted against Mr. Bush 's position , was a victory for Democratic leaders , who opposed the amendment as an intrusion on the Bill of Rights .
`` We can support the American flag without changing the American Constitution , '' said Senate Majority Leader George Mitchell of Maine .
In order to defuse pressure for an amendment , Mr. Mitchell and House Speaker Thomas Foley -LRB- D. , Wash . -RRB- had arranged for lawmakers to pass a statute barring flag desecration before voting on the constitutional change .
Mr. Bush said he would allow the bill to become law without his signature , because he said only a constitutional amendment can protect the flag adequately .
In June , the Supreme Court threw out the conviction of a Texas man who set a flag afire during a 1984 demonstration , saying he was `` engaging in political expression '' that is protected by the First Amendment .
If you think you have stress-related problems on the job , there 's good news and bad news .
You 're probably right , and you are n't alone .
A new Gallup Poll study commissioned by the New York Business Group on Health , found that a full 25 % of the work force at companies may suffer from anxiety disorders or a stress-related illness , with about 13 % suffering from depression .
The study surveyed a national group of medical directors , personnel managers and employee assistance program directors about their perceptions of these problems in their companies .
It is one of a series of studies on health commissioned by the New York Business Group , a non-profit organization with about 300 members .
The stress study was undertaken because problems related to stress `` are much more prevalent than they seem , '' said Leon J. Warshaw , executive director of the business group .
In presenting the study late last week , Dr. Warshaw estimated the cost of these types of disorders to business is substantial .
Occupational disability related to anxiety , depression and stress costs about $ 8,000 a case in terms of worker 's compensation .
In terms of days lost on the job , the study estimated that each affected employee loses about 16 work days a year because of stress , anxiety or depression .
He added that the cost for stress-related compensation claims is about twice the average for all injury claims .
`` We hope to sensitize employers '' to recognize the problems so they can do something about them , Dr. Warshaw said .
Early intervention into these types of problems can apparently save businesses long-term expense associated with hospitalization , which sometimes results when these problems go untreated for too long .
Even the courts are beginning to recognize the link between jobs and stress-related disorders in compensation cases , according to a survey by the National Council on Compensation Insurance .
But although 56 % of the respondents in the study indicated that mental-health problems were fairly pervasive in the workplace , there is still a social stigma associated with people seeking help .
The disorders , which 20 years ago struck middle-age and older people , `` now strike people at the height of productivity , '' says Robert M.A. Hirschfeld , of the National Institute of Mental Health , who spoke at the presentation of the study 's findings .
The poll showed that company size had a bearing on a manager 's view of the problem , with 65 % of those in companies of more than 15,000 employees saying stress-related problems were `` fairly pervasive '' and 55 % of those in companies with fewer than 4,000 employees agreeing .
The poll also noted fear of a takeover as a stress-producing event in larger companies .
More than eight in 10 respondents reported such a stress-provoking situation in their company .
Mid-sized companies were most affected by talk of layoffs or plant closings .
The study , which received funding from Upjohn Co. , which makes several drugs to treat stress-related illnesses , also found 47 % of the managers said stress , anxiety and depression contribute to decreased production .
Alcohol and substance abuse as a result of stress-related problems was cited by 30 % of those polled .
Although Dr. Warshaw points out that stress and anxiety have their positive uses , `` stress perceived to be threatening implies a component of fear and anxiety that may contribute to burnout . ''
He also noted that various work environments , such as night work , have their own `` stressors . ''
`` We all like stress , but there 's a limit , '' says Paul D'Arcy , of Rohrer , Hibler & Replogle , a corporate psychology and management consulting firm .
The problem , says Mr. D'Arcy , a psychologist , is that `` it 's very hard to get any hard measures on how stress affects job performance .
For Cheap Air Fares , Spend Christmas Aloft
IT ISN'T TRUE that a 90-year old clergyman on a mission of mercy to a disaster area on Christmas Day can fly free .
But his circumstances are among the few that can qualify for the handful of really cheap airline tickets remaining in America .
In recent years , carriers have become much more picky about who can fly on the cheap .
But there still are a few ways today 's traveler can qualify under the airline 's many restrictions .
One of the best deals , though , may mean skipping Christmas dinner with the relatives .
This week , many carriers are announcing cut-rate fares designed to get people to fly on some of the most hallowed -- and slowest -- days of the year , including Christmas .
In recent years , the airlines had waited until the last moment to court Christmas season vacationers with bargain fares .
That approach flopped : Last Christmas Day , a USAir Group Inc. DC-9 jetliner flew about seven passengers from Chicago to Pittsburgh .
So this year , the airlines are getting a jump on holiday discounts .
They are cutting ticket prices by as much as 70 % from normal levels for travel to most U.S. locations on Dec. 24 , 25 , 29 , 30 and 31 , and Jan. 4 , 5 and 6 .
The promotions -- dubbed everything from 'T- is the Season to be Jolly to Kringle fares -- put round-trip fares at $ 98 , $ 148 and $ 198 .
`` They 're trying to keep planes flying on days they 'd normally park them , '' says Roger Bard , president of Mr. Mitchell Travel Service in Burnsville , N.C .
Expect , of course , sky-high prices on other dates near the holidays when the airlines know vacationers are eager to travel .
Consider Adopting Your Spouse 's Name
IF CONTINENTAL Airlines has its way , couples like Marlo Thomas and Phil Donahue may find it a hassle to qualify for some new discounts .
Continental , a Texas Air Corp. unit , recently unveiled a marketing program offering free companion tickets to business-class and first-class passengers on international flights .
The Continental catch : Only immediate family members are allowed , and they must have the same last name as the buyer of the ticket or legal proof they 're related .
That irritates many women who have n't taken their husbands ' last name .
`` What a bunch of nonsense , '' says Jessica Crosby , president of the New York chapter of the National Association of Women Business Owners .
`` This sets things way back . ''
Continental 's logic : It does n't want business companions abusing the promotion by falsely claiming to be related .
`` We accommodate their choice of names by allowing them to demonstrate '' family affiliation with legal documents , says Jim O'Donnell , a senior vice president .
But gay rights advocates are angry , too .
The Lambda Legal Defense and Education Fund of New York City has received complaints from homosexual couples whom the airline does n't recognize as family .
`` It 's certainly discrimination , '' says attorney Evan Wolfson , whose group forced Trans World Airlines this year to change a rule that allowed travelers to transfer frequent flier awards only to family members .
Take Your Vacation
In a Hurricane Area WHEN HURRICANE Hugo careened through the Caribbean and the Atlantic coast states , it downed electric and telephone lines , shot coconuts through cottage rooftops , shattered windows and uprooted thousands of lives .
It also lowered some air fares .
Since the hurricane , Midway Airlines Inc. and American Airlines , a unit of AMR Corp. , trimmed their one-way fares to the Virgin Islands to $ 109 from prices that were at times double that before the storm .
The fares are code-named Hugo , Compassion and Virgin Islands Aid .
-LRB- Airlines are n't lowering fares to Northern California following this week 's earthquake , but reservation agents can waive advance-purchase restrictions on discount fares for emergency trips . -RRB-
Some hotels in the hurricane-stricken Caribbean promise money-back guarantees .
In Myrtle Beach , S.C. , the damaged Yachtsman Resort offers daily rates as low as $ 35 , or as much as 22 % below regular prices .
Says Michele Hoffman , a clerk in the resort 's front office : `` We do n't have the outdoor pool , the pool table , ping pong table , snack bar or VCR , but we still have the indoor pool and Jacuzzi . ''
Just Wait Until You 're a Bit Older
SENIOR CITIZENS have long received cheap air fares .
This year , the older someone is the bigger the discount .
A senior citizen between 62 and 70 saves 70 % off regular coach fare .
Travelers up to age 99 get a percentage discount matching their age .
And centenarians fly free in first class .
Next month , Northwest Airlines says , a 108-year-old Lansing , Mich. , woman is taking it up on the offer to fly with her 72-year-old son to Tampa , Fla .
Last year when Northwest first offered the promotion , only six centenarians flew free .
If All Else Fails . . . .
THE NATION'S carriers also provide discounts to Red Cross workers , retired military personnel and medical students .
There 's even a special fare for clergy that does n't require the usual stay over Saturday night .
That way , they can be home in time for work Sunday .
The British Petroleum Co. PLC said its BP Exploration unit has produced the first oil from its Don oilfield in the North Sea .
In an official release , BP said initial production from the field was 11,000 barrels a day , and that it expects peak output from the field of 15,000 barrels a day to be reached in 1990 .
As the sponsor of the `` Older Americans Freedom to Work Act , '' which would repeal the Social Security earnings limit for people aged 65 and older , I applaud your strong endorsement to repeal this Depression-era fossil .
For every dollar earned over $ 8,880 , Social Security recipients lose 50 cents of their Social Security benefits ; it 's like a 50 % marginal tax .
But the compounded effects of `` seniors only '' taxes result in truly catastrophic marginal tax rates .
Imagine a widow who wants to maintain her standard of living at the same level she had before she had to pay the catastrophic surtax .
Although this widow earns only twice the minimum wage , largely due to the earnings limit , she would have to earn an additional $ 4,930 to offset her catastrophic surtax of $ 496 .
Eliminating the earnings limit would greatly help seniors and reduce the deficit .
Repeal would generate more in new taxes than the government would lose in increased Social Security benefit payments .
We now need support from the Democrats on the Rules Committee in order to include earnings-limit reform in the Reconciliation Bill .
Since all four Republicans on the committee are co-sponsors of my bill , it is the Democrats who will be held fully accountable if an earnings test amendment is not allowed from the floor .
The time is now to lift the burdensome Social Security earnings limit from the backs of our nation 's seniors .
Rep. J. Dennis Hastert -LRB- R. , Ill . -RRB-
When his Seventh Avenue fur business here was flying high 20 years ago , Jack Purnick had 25 workers and a large factory .
Now his half-dozen employees work in an eighth-floor shop that he says is smaller than his old storage room .
He also says he is losing money now .
He blames imports .
But just down Seventh Avenue , where about 75 % of U.S. fur garments are made , Larry Rosen has acquired two retail outlets , broadened his fur-making line and expanded into leather .
He credits imports .
The difference lies in how the two entrepreneurial furriers reacted to the foreign competition and transformation of their industry over the past 10 years .
One stuck to old-line business traditions , while the other embraced the change .
`` The small , good fur salon is not what it used to be , '' says Mr. Purnick , 75 years old .
`` We make the finest product in the world , and the Americans are being kicked around . ''
Mr. Rosen , though , believes imports have reinvigorated the industry in which he has worked for most of his 57 years .
`` You 've got some minds here that wo n't think progressively , '' he says .
Import competition for U.S. furs has risen sharply since furriers started aggressively marketing `` working-girl mink '' and similar lower-priced imported furs in recent years .
Merchants discovered a consumer largely ignored by higher-priced furriers : the younger woman -- even in her late 20s -- who never thought she could buy a mink .
The new market helped boost U.S. fur sales to about $ 1.8 billion a year now , triple the level in the late 1970s .
It also opened the door to furs made in South Korea , China , Hong Kong and other countries .
Jindo Furs , a large South Korean maker , says it operates 35 retail outlets in the U.S. and plans to open 15 more by the end of next year .
Mr. Purnick and other old-line furriers call many of the the imports unstylish and poorly made .
High-end U.S. furriers say these imports have n't squeezed them .
But low-priced and middle-priced furriers like Mr. Purnick , who once saturated the five-block Seventh Avenue fur district , say imports have cut their sales .
A woman who once would have saved for two or three seasons to buy a U.S.-made mink can now get an imported mink right away for less than $ 2,000 .
Yet Mr. Rosen has turned the import phenomenon to his advantage .
Early in the decade he saw that fur workers in many foreign countries were willing to work longer hours at lower wages than their American counterparts and were more open to innovation .
In 1982 , he started a factory in Greece .
Two years later , he opened one in West Germany .
He also noticed that foreign makers were introducing many variations on the traditional fur , and he decided to follow suit .
By combining his strengths in innovation and quality control with the lower costs of production abroad , he says he has been able to produce high-quality goods at low cost .
To maintain control over production and avoid overdependence on foreign sources , he says he still makes most of his furs in the U.S .
But six years ago he also began importing from the Far East .
Inspired by imports , Mr. Rosen now makes fur muffs , hats and flings .
This year he produced a men 's line and offers dyed furs in red , cherry red , violet , royal blue and forest green .
He has leather jackets from Turkey that are lined with eel skin and topped off with raccoon-skin collars .
From Asia , he has mink jackets with floral patterns made by using different colored furs .
Next he will be testing pictured embroidery -LRB- called kalega -RRB- made in the Far East .
He plans to attach the embroidery to the backs of mink coats and jackets .
Besides adding to sales , leathers also attract retailers who may buy furs later , he adds .
Other furriers have also benefited from leathers .
Seymour Schreibman , the 65-year-old owner of Schreibman Raphael Furs Inc. , treats the reverse side of a Persian lambskin to produce a reversible fur-and-leather garment .
He says it accounts for 25 % of total sales .
Mr. Rosen is also pushing retail sales .
he bought two stores , one in Brooklyn and one in Queens .
Other furriers have also placed more weight on retailing .
Golden Feldman Furs Inc. began retailing aggressively eight years ago , and now retail sales account for about 20 % of gross income .
In other moves , Mr. Rosen says he bought a truck three years ago to reach more retailers .
Since then he has expanded his fleet and can now bring his furs to the front door of retailers as far away as the Midwest .
Small retailers who ca n't afford to travel to his New York showroom have become fair game .
Such moves have helped Mr. Rosen weather the industry slump of recent years .
The industry enjoyed six prosperous years beginning in 1980 , but since 1986 sales have languished at their $ 1.8 billion peak .
Large furriers such as Antonovich Inc. , Fur Vault Inc. and Evans Inc. all reported losses in their latest fiscal years .
Aftereffects of the 1987 stock market crash head the list of reasons .
In addition , competition has glutted the market with both skins and coats , driving prices down .
The animal-rights movement has n't helped sales .
Warm winters over the past two years have trimmed demand , too , furriers complain .
And those who did n't move some production overseas suffer labor shortages .
`` The intensive labor needed to manufacture furs -LCB- in the U.S . -RCB- is not as available as it was , '' says Mr. Schreibman , who is starting overseas production .
But even those who have found a way to cope with the imports and the slump , fear that furs are losing part of their allure .
`` People are promoting furs in various ways and taking the glamour out of the fur business , '' says Stephen Sanders , divisional merchandise manager for Marshall Field 's department store in Chicago .
`` You ca n't make a commodity out of a luxury , '' insists Mr. Purnick , the New York furrier .
He contends that chasing consumers with low-priced imports will harm the industry in the long run by reducing the prestige of furs .
But Mr. Rosen responds : `` Whatever people want to buy , I 'll sell .
The name of the game is to move goods .
Four workers at GTE Corp. 's headquarters have been diagnosed as having hepatitis , and city health officials are investigating whether a cafeteria worker may have exposed hundreds of other GTE employees to the viral infection , company and city officials said .
The four cases were all reported to GTE 's medical director and state and local health authorities .
GTE shut down its cafeteria Tuesday afternoon after testing determined that at least one cafeteria worker employed by GTE 's private food vending contractor , ARA Services Inc. , was suffering from a strain of the virus , officials said .
More than 700 people work in the GTE building .
The cafeteria remains closed .
Dr. Andrew McBride , city health director , said his staff suspects the hepatitis , which can be highly contagious , was spread by the cafeteria worker with the virus .
The exact strain of hepatitis that the cafeteria worker contracted has n't been determined but should be known by the end of the week , Dr. McBride said .
Hepatitis A , considered the least dangerous strain of the virus , has been confirmed in at least one GTE employee , company and city officials said .
`` From a public health point of view we 're relieved because hepatitis A is rarely life-threatening , '' said Dr. Frank Provato , GTE 's medical director .
`` It 's a double-edged sword though , because it is also the most contagious kind of hepatitis . ''
GTE officials began posting warning notices about the potential threat to exposure Wednesday morning at various places at the company , said GTE spokesman Thomas Mattausch .