[20500001] |Bio-Technology General Corp. received tenders for 97.9% of its 7.5% convertible senior subordinated notes due April 15, 1997, and 96% of its 11% convertible senior subordinated debentures due March 1, 2006.

[20500002] |In exchange offers that expired Friday, holders of each $1,000 of notes will receive $250 face amount of Series A 7.5% senior secured convertible notes due Jan. 15, 1995, and 200 common shares.
[20500003] |For each $1,000 face amount of debentures, holders received $250 of Series B 11% senior secured convertible notes due Oct. 15, 1998, and 200 common shares.

[20500004] |Bio-Technology, a New York maker of genetically engineered products for human and animal health care, said it made the exchange offer to reduce its interest payments.

[20501001] |Japanese companies have long been accused of sacrificing profit to boost sales.
[20501002] |But Fujitsu Ltd. has taken that practice to a new extreme.

[20501003] |Japan's biggest computer maker last week undercut seven competitors to win a contract to design a mapping system for the city of Hiroshima's waterworks.
[20501004] |Its bid: one yen, or less than a U.S. penny.

[20501005] |The bid created such a furor that Fujitsu said it is now offering to withdraw from the project.
[20501006] |"From a common-sense viewpoint, it was not socially acceptable," a Fujitsu spokeswoman said yesterday.
[20501007] |Hiroshima city officials couldn't be reached to find out whether they would drop Fujitsu's bid.

[20501008] |Fujitsu said it issued the low bid because it wanted a foot in the door of a potentially lucrative market.

[20501009] |"We desperately wanted the contract because we want experience in the field," the Fujitsu spokeswoman said.
[20501010] |"We expect a big market in the future, so in the long term it will be profitable.
[20501011] |It's a kind of an investment."

[20501012] |Hiroshima's waterworks bureau said the municipal government had budgeted about 11 million yen ($77,500) for the project.
[20501013] |"I was flabbergasted," Tatsuhara Yamane, head of the bureau, was quoted by Kyodo news service as saying.
[20501014] |"I understand the firm's enthusiasm in getting the deal, but such a large company would have been better off showing a little more discretion."

[20501015] |Indeed, Fujitsu officials admitted they may have been a little overzealous.
[20501016] |The Fujitsu spokeswoman said headquarter officials didn't approve the bid in advance and will take measures so this kind of thing doesn't happen in the future.
[20501017] |"It's contrary to common sense," she added.

[20501018] |Specifically, Fujitsu won the right to design the specifications for a computerized system that will show water lines throughout the city.
[20501019] |The system could be used in a fire or earthquake to locate problems, among other things.

[20501020] |A waterworks official said Fujitsu will have to design the system so it would be compatible with other makers' equipment.
[20501021] |But industry officials expressed concern that the initial project might give Fujitsu an edge in winning more lucrative contracts later.

[20501022] |Fujitsu said it hopes the Hiroshima contract will help it secure pacts with other municipalities.
[20501023] |Japanese local governments are expected to invest heavily in computer systems over the next few years, and many companies expect that field to provide substantial revenue.
[20501024] |"In the near future, it will be a big market, not just for waterworks, but for all mapping systems," the Fujitsu spokeswoman said.
[20501025] |"We can expect a hundreds-of-billions-of-yen market."

[20501026] |No foreign companies bid on the Hiroshima project, according to the bureau.
[20501027] |But the Japanese practice of deep discounting often is cited by Americans as a classic barrier to entry in Japan's market.
[20501028] |Earlier this year, the U.S. complained that Japan's supercomputer makers were effectively closing out foreign competitors by slashing prices as much as 90% for universities.

[20501029] |Fujitsu wasn't the only company willing to sacrifice profit on the project.
[20501030] |Three competitors bid between 300,000 yen and 500,000 yen, according to the Hiroshima government office.
[20501031] |Other bids ranged from about 10 million yen to 29 million yen.

[20502001] |American Airlines will expand its trans-Atlantic service 30% beginning next year with six new daily flights between the U.S. and Europe, officials announced yesterday.

[20502002] |American, a unit of AMR Corp., is the nation's largest airline.

[20502003] |The new nonstop flights, starting next May, will include Chicago-Warsaw, Chicago-Helsinki, Miami-Madrid, Dallas-Barcelona, a second daily Chicago-Paris flight and a second daily Chicago-Manchester flight, the officials said.

[20502004] |Chicago has the largest population of citizens of Polish heritage in any city outside Poland.

[20502005] |With the new service, American will fly 161 flights a week to 17 European cities.
[20502006] |The additions solidify American's position as the third-largest U.S. transatlantic carrier, behind PanAm Corp.'s Pan American World Airways and Trans World Airlines.

[20503001] |Karstadt AG said sales for its domestic group rose 4.6% in the first nine months of 1989 from a year earlier.

[20503002] |The West German retailing group also said that the results of the first three quarters suggest it will meet its profit goal for the year.
[20503003] |Earnings at the department-store division, which generates the bulk of profit, should remain at least stable, while income at the mail-order and tourism units is likely to fall slightly from 1988, the company said.

[20503004] |Karstadt didn't give any group sales or profit figures for the first nine months.

[20504001] |Georgia-Pacific Corp. offered to acquire Great Northern Nekoosa Corp. for $58 a share, or about $3.18 billion.

[20504002] |The offer capped a week of rumors that Georgia-Pacific, an Atlanta-based forest-products company, was considering making a bid for Nekoosa, a paper-products concern based in Norwalk, Conn.

[20504003] |Executives at Nekoosa couldn't be reached, and officials at Georgia Pacific declined to comment.
[20504004] |Analysts, however, were surprised because the tender offer appeared unsolicited.
[20504005] |"It's quite a bombshell," said one, adding that the offer could spark a period of industry consolidation.

[20504006] |The two companies would appear to be a logical fit because of their complementary lines, and analysts described the offer, representing a 36% premium over Nekoosa's market price, as fair.
[20504007] |Nekoosa closed yesterday at $42.75, up $2.75, in New York Stock Exchange composite trading.

[20504008] |But industry observers still questioned whether Georgia Pacific will ultimately prevail.
[20504009] |"You have to watch out for counterbids," said one analyst. "
[20504010] |International Paper or Weyerhaeuser could step in."

[20504011] |The bid for Great Northern, a notice of which appears in an advertisement in today's Wall Street Journal, is the first big takeover offer since the collapse of a $6.79 billion buy-out of United Airlines parent UAL Corp. Oct. 13.

[20504012] |That collapse, following on the heels of disarray in the market for high-risk, high-yield bonds, cast doubt on the entire takeover business, which has fueled both big profits among Wall Street securities firms and big gains in the stock market generally.

[20504013] |While Georgia-Pacific's stock has outperformed the market in the past two years, Nekoosa has lagged the market in the same period.

[20504014] |Yesterday's rise in Nekoosa's share price came on volume of 786,700 shares, four times the daily average.

[20504015] |According to Dow Jones Professional Investor Report, options trading in Nekoosa was also heavy, ranking only behind International Business Machines Corp. and UAL in volume on the Chicago Board Options Exchange.

[20504016] |According to the Value Line Investment Survey, demand for Nekoosa's commodity paper has weakened, prompting earnings to decline by 6.6% in the third quarter ended Sept. 30.
[20504017] |Value Line added, "With discounts widening on business papers, and with newsprint and corrugated shipments flat, we expect negative earnings comparisons through next year."

[20504018] |By contrast, Value Line said Georgia-Pacific "is in a comparatively good position to deal with weakening paper markets," because its production is concentrated not in the Northwest but in the South, where it should be able to avoid some of the cost pressures from rising wood-chip prices.
[20504019] |Also, it isn't exposed to the weakening newsprint business, and is strong in the less-cyclical tissue business.

[20504020] |The purchase of Nekoosa would easily eclipse Georgia-Pacific's $530 million acquisition of Brunswick Pulp & Paper Co. last year.
[20504021] |That acquisition, which also included the assumption of $135 million in debt, was designed to allow Georgia-Pacific to capitalize on the strong demand for softwood pulp, as well as reduce its exposure to the housing market.

[20504022] |Wasserstein Perella & Co. is the dealer-manager for the offer, which will expire Nov. 29, unless extended.

[20505001] |Ratners Group PLC's U.S. subsidiary has agreed to acquire jewelry retailer Weisfield's Inc. for $50 a share, or about $55 million.

[20505002] |Weisfield's shares soared on the announcement yesterday, closing up $11 to close at $50 in national over-the-counter trading.

[20505003] |Ratners and Weisfield's said they reached an agreement in principle for the acquisition of Weisfield's by Sterling Inc.
[20505004] |The companies said the acquisition is subject to a definitive agreement.
[20505005] |They said they expect the transaction to be completed by Dec. 15.

[20505006] |Weisfield's, based in Seattle, Wash., currently operates 87 specialty jewelry stores in nine states.
[20505007] |In the fiscal year ended Jan. 31, the company reported sales of $59.5 million and pretax profit of $2.9 million.

[20505008] |Ratners, which controls 25% of the British jewelry market, would increase the number of its U.S. stores to about 450 stores from 360.
[20505009] |It has said it hopes to control 5% of jewelry business in the U.S. by 1992; currently it controls about 2%.

[20506001] |McDonnell Douglas Corp. received contracts totaling $244.8 million for 72 F-A-18 aircraft for the Navy and helicopter spare parts for the Army.

[20506002] |Aerojet General Corp., a unit of GenCorp Inc., was awarded a $40.1 million Air Force contract for Minuteman missile rocket motors.

[20506003] |Rockwell International Corp. received a $26.7 million Navy contract for submarine ballistic missiles.

[20506004] |Honeywell Inc. got a $22.3 million Navy contract for aircraft missile warning sets.

[20506005] |Beech Aircraft Corp., a unit of Raytheon Co., received an $11.5 million Air Force contract for C-12 aircraft support.

[20507001] |Analog Devices Inc. said it may purchase as many as one million of its common shares over the next several months.

[20507002] |Analog also said that a one million share buy-back program announced in March is substantially complete.
[20507003] |The company, which makes integrated circuits and other electronic parts, now has about 47 million common shares outstanding.

[20507004] |In New York Stock Exchange composite trading yesterday, Analog Devices closed at $8.875, up 25 cents.

[20508001] |John Lehman's editorial-page article on the Pentagon as a haunted house omits the real roots of its ghost population ("In the Pentagon, the Undead Walk," Oct. 18).
[20508002] |The media's treatment of the Defense Department during the Vietnam War, the Carter administration's denigration of the military, and the public scapegoating of Lt. Col. Oliver North have all served to emasculate the poor souls who live there.
[20508003] |The resulting haunted house tends to reward followership, not leadership, it creates guilt about wearing the uniform, and raises doubt about having the will to fulfill the ghosts' role, i.e., to be able to win if called on.

[20508004] |Perhaps the Halloween season is a good time for Congress to be looking at funding for some ghostbusting equipment.

[20508005] |Mike Greece Former Air Force Career Officer New York

[20508006] |Where does Mr. Lehman get off castigating Gen. George Marshall for muscling in on naval prerogatives?
[20508007] |Ever since the days of Alfred Thayer Mahan (U.S. naval officer and naval historian) and Teddy Roosevelt the Navy has been the service most favored by Washington officialdom.
[20508008] |Mr. Lehman overlooks the fact that the Navy possesses its own air force (the carrier fleet) and its own army (the Marines), which in turn has its own air force.

[20508009] |Of course these turf battles are unseemly, wasteful and potentially dangerous and should be resolved in the interest of national security, but Mr. Lehman seems to be part of the problem rather than part of the answer.

[20508010] |L.H. Blum Beaumont, Texas

[20508011] |I agree with Mr. Lehman 100%!

[20508012] |Isn't this the same guy who resigned as Navy secretary because he couldn't get his 1,000-ship Navy?

[20508013] |I personally do not want to hasten Mr. Lehman's demise, but I can see him figuring prominently in his own article.

[20508014] |Carl Banerian Jr. Birmingham, Mich.

[20509001] |For the sixth time in as many years, Continental Airlines has a new senior executive.
[20509002] |Gone is D. Joseph Corr, the airline's chairman, chief executive and president, appointed only last December.

[20509003] |Mr. Corr resigned to pursue other business interests, the airline said.
[20509004] |He could not be reached for comment.

[20509005] |Succeeding him as chairman and chief executive will be Frank Lorenzo, chairman and chief executive of Continental's parent, Texas Air Corp.
[20509006] |Mr. Lorenzo, 49 years old, is reclaiming the job that was his before Mr. Corr signed on.

[20509007] |The airline also named Mickey Foret as president.
[20509008] |Mr. Foret, 44, is a 15-year veteran of Texas Air and Texas International Airlines, its predecessor.
[20509009] |Most recently he had been executive vice president for planning and finance at Texas Air.

[20509010] |Top executives at Continental haven't lasted long, especially those recruited from outside.
[20509011] |But Mr. Corr's tenure was shorter than most.
[20509012] |The 48-year-old Mr. Corr was hired largely because he was credited with returning Trans World Airlines Inc. to profitability while he was its president from 1986 to 1988.
[20509013] |Before that, he was an executive with a manufacturing concern.

[20509014] |At Continental he cut money-losing operations, which helped produce a modest profit in this year's second quarter.
[20509015] |But Mr. Corr, a stunt pilot in his spare time, was understood to be frustrated by what he regarded as limited freedom under Mr. Lorenzo.

[20509016] |While not officially an executive at Continental during Mr. Corr's tenure, Mr. Lorenzo is known for keeping close tabs on Texas Air's operating units.
[20509017] |Continental is Texas Air's flagship and was built painfully to its present size under Mr. Lorenzo after emerging from bankruptcy proceedings in 1986.

[20509018] |It's unclear what role, if any, Mr. Lorenzo's recent exploration of a possible sale of a stake in Continental had in Mr. Corr's departure.
[20509019] |One source familiar with the airline said, however, that Mr. Corr wasn't informed in advance during the summer when Mr. Lorenzo began discussions with potential buyers.

[20509020] |During his tenure, Mr. Corr attempted through a series of meetings to inform managers of some of the company's future plans, traveled widely to talk to employees and backed training sessions designed to improve the carrier's image.

[20509021] |Mr. Foret is one of a handful of executives Mr. Lorenzo has relied on over the years.
[20509022] |Previously, he had served in financial planning positions at the company's Eastern Airlines unit.
[20509023] |Another longtime ally, Phil Bakes, currently heads Eastern, now in Chapter 11 bankruptcy proceedings.
[20509024] |Mr. Bakes previously had a turn at running Continental.

[20509025] |Among the other alumni are Stephen Wolf, now chairman of UAL Inc., and Thomas Plaskett, president of Pan Am Corp.

[20510001] |Doskocil Cos. said its bank-debt payments have been extended until May 31, 1990, to give it more time to sell its Wilson Foods Corp. retail and fresh meat operations.

[20510002] |The company was to repay $58 million in debt on Dec. 31 and $15 million on March 31.
[20510003] |The company acquired the debt when it paid $155 million to purchase Wilson last year.

[20510004] |An agreement to sell the Wilson assets for $150 million in cash and notes collapsed in late September, when the buyer, a company controlled by George Gillett, couldn't secure financing.

[20511001] |Companies listed below reported quarterly profit substantially different from the average of analysts' estimates.
[20511002] |The companies are followed by at least three analysts, and had a minimum five-cent change in actual earnings per share.
[20511003] |Estimated and actual results involving losses are omitted.

[20511004] |The percent difference compares actual profit with the 30-day estimate where at least three analysts have issues forecasts in the past 30 days.
[20511005] |Otherwise, actual profit is compared with the 300-day estimate.

[20512001] |Charles D. Way, president of this restaurant operator, assumed the additional post of chief executive officer.
[20512002] |He succeeds Alvin A. McCall in the position.
[20512003] |Mr. McCall will remain chairman.

[20513001] |Australia's inflation is expected to rise as high as 8.3% in the quarter ending March 30, but could fall to around 7% by June, according to economists.

[20513002] |The government said the consumer price index rose 2.3% in the quarter ended Sept. 30 from the previous quarter and 8% from a year ago.

[20514001] |Charles A. Pearce, 66 years old, will retire from his post as chief executive officer of this bank holding company effective Dec. 31.
[20514002] |He will remain chairman.
[20514003] |Charles R. Simpson Jr., 46, president and chief operating officer, will assume the chief executive's post.

[20515001] |It is a peaceful time in this part of western India.
[20515002] |The summer crop is harvested, winter sowing has yet to begin.
[20515003] |Farmers in loose turbans and fancy earrings spend their afternoons laughing and gossiping at the markets.

[20515004] |One could imagine such a lull in the lives of the Arabs before the quadrupling of oil prices.
[20515005] |For just as the Arabs were in the 1960s, the farmers of Sidhpur are on the brink of global power and fame.
[20515006] |The Arabs had merely oil.
[20515007] |These farmers may have a grip on the world's very heart.
[20515008] |Or, at least, its heart disease.

[20515009] |That is because Sidhpur has a near-monopoly on the world's supply of flea seed, also known as flea wort or, in Western parlance, psyllium: a tiny, tasteless, obscure seed that, according to early research, may reduce cholesterol levels in the blood.
[20515010] |Ever since the link to cholesterol was disclosed, Americans have begun scarfing up psyllium in their breakfast cereals.
[20515011] |If further research proves the seed's benefits, this dusty farm district could become the epicenter of a health-food fad to rival all fads since cod-liver oil.

[20515012] |"This seed's not grown anywhere else in India, or anywhere else in the world," says T.V. Krishnamurthy, a vice president of Procter & Gamble India Ltd., a major psyllium buyer and promoter.
[20515013] |"The proper climatic conditions don't exist in many places in the world."
[20515014] |Arvind Patel, a processor and exporter of the seed, raves: "If psyllium takes the place of oat bran, it will be huge."

[20515015] |Whether psyllium makes Sidhpur's fortune depends on cholesterol-fearing Americans, the U.S. Food and Drug Administration and, of course, the outcome of further research.
[20515016] |Only one thing is certain here: Pysllium is likely to remain solely an export item from Sidhpur for a long time.
[20515017] |Local farmers say it is as good a cash crop as mustard or fenugreek, a legume.
[20515018] |But they have no desire to eat a bowl of psyllium each morning, and, perhaps, little need: lean, frugal vegetarians, the farmers are innocents in the clogged, treacherous world of cholesterol.

[20515019] |Psyllium is an annual herb, Plantago ovata, that has been used for centuries by folk doctors here, mainly as a laxative and anti-diarrheal.
[20515020] |As such, the soluble fiber has an almost fanatic following in northern India.
[20515021] |"I can assure you," attests a 25-year-old lawyer in New Delhi, with a meaningfully raised eyebrow, "from personal experience, it works."
[20515022] |A prominent businessman in Bombay gives a similar testimonial: "I have been taking it daily since 1961.
[20515023] |" Folk doctors also prescribe it for kidney, bladder and urethra problems, duodenal ulcers and hemorrhoids.
[20515024] |Some apply it to gouty joints.

[20515025] |The plant has a hairy stem that produces flowers and diminutive seeds.
[20515026] |It is the seed's colorlessness and size -- 1,000 of them weigh only 1.5 grams, or about as much as two paper clips -- that explain the historical allusions to fleas.
[20515027] |The transluscent husk of the seed is removed, sifted and crushed; the seed itself is fed to animals.
[20515028] |Some 90% of the crop, which was worth $26 million last year, is exported.

[20515029] |For decades, psyllium husk has been the main ingredient in such laxatives as Procter & Gamble Co.'s Metamucil, the top-selling brand in the U.S., and Ciba-Geigy Corp.'s Fiberall.
[20515030] |But some time ago, researchers discovered that soluble fibers also lower cholesterol levels in the blood.
[20515031] |Cincinnati-based P&G took an interest; it ordered two studies on psyllium and cholesterol.

[20515032] |One of the studies, done at the University of Minnesota, tested 75 people with raised cholesterol levels.
[20515033] |After 16 weeks, the group that took three daily teaspoons of Metamucil saw a significant dip in their general cholesterol levels, and an even larger reduction in levels of low-density lipoproteins, the so-called bad cholesterol.
[20515034] |In late 1987, P&G asked the FDA for approval to market Metamucil as the first non-prescription, cholesterol-lowering product in the

[20515035] |In April, the psyllium bandwagon got more crowded.
[20515036] |General Mills Inc., the food giant, launched a breakfast cereal called Benefit, containing psyllium, oat, wheat and beet bran; the words, "reduce cholesterol" were prominently displayed on its package.
[20515037] |In September, Kellogg Co. launched a competing psyllium-fortified cereal called Heartwise.

[20515038] |Suddenly, on television, in advertisements and on their cereal boxes, Americans were inundated with news about the obscure seed.
[20515039] |The flood of claims and counter-claims worried consumers and actually hurt sales of the new cereals.
[20515040] |This month, the Food and Drug Administration expressed concern that Americans might someday, in various forms, ingest too much psyllium.

[20515041] |Currently, there is a lull in the psyllium war.
[20515042] |The FDA has asked Kellogg and General Mills to show research that their cereals are safe.
[20515043] |It also ordered P&G to produce more studies to buttress its claims that Metamucil can lower cholesterol.
[20515044] |But the agency hasn't yanked psyllium off store shelves.
[20515045] |If the FDA approves the new uses of psyllium, other companies are expected to rush to market with psyllium products.

[20515046] |"It's going to be a sensational thing," says Mr. Krishnamurthy of P&G in Bombay.
[20515047] |Says psyllium exporter Mr. Patel: "I just got back yesterday from the U.S.
[20515048] |In the newspapers, on the radio and TV, psyllium is everywhere."

[20515049] |But the news of the boom has yet to trickle down to the farmers.
[20515050] |They only know of one use for the crop, as a laxative, and with psyllium prices currently languishing in the wake of a bumper crop, they think of the seed as a marginal crop, something to grow between summer wheat crops.

[20515051] |"Psyllium's not a good crop," complains Sooraji Jath, a 26-year-old farmer from the village of Lakshmipura. "
[20515052] |You get a rain at the wrong time and the crop is ruined."

[20515053] |Even at the Basic Chemicals, Pharmaceuticals and Cosmetics Export Promotion Council, the government agency that promotes the seed, the psyllium boom is distant thunder.
[20515054] |The staff brags about psyllium's hefty contribution to American regularity, without quite grasping the implications of the research on cholesterol.
[20515055] |The council's annual report has psyllium on its last page, lumped with such unglamorous export items as sarsaparilla and "Nux vomica," a plant that induces vomiting.

[20515056] |In one way, the psyllium middlemen -- the buyers and exporters -- are glad to keep news of the boom to themselves.
[20515057] |They want psyllium prices low for their purchases next year.

[20515058] |But there's a catch.
[20515059] |Sidhpur and adjacent districts are the only places in the world where psyllium is grown in large quantities.
[20515060] |This is partly due to the particular demands of the crop.
[20515061] |Psyllium needs sandy soil, dew during the first few weeks, and then total dryness when its seeds are maturing.
[20515062] |Small crops are grown in Pakistan, France, Spain, Italy, Belgium and Brazil, but their quality can't compare to that of Indian psyllium.

[20515063] |Big buyers like Procter & Gamble say there are other spots on the globe, and in India, where the seed could be grown.
[20515064] |"It's not a crop that can't be doubled or tripled," says Mr. Krishnamurthy.
[20515065] |But no one has made a serious effort to transplant the crop.

[20515066] |In Sidhpur, it is almost time to sow this year's crop.
[20515067] |Many farmers, too removed to glean psyllium's new sparkle in the West, have decided to plant mustard, fennel, cumin, fenugreek or castor-oil seeds.

[20515068] |Mr. Jath is thinking of passing up psyllium altogether this year in favor of a crop with a future such as cumin or fennel.
[20515069] |"Maybe I'll plant castor-oil seeds."
[20515070] |His brother, Parkhaji, whose head is swathed in a gorgeous crimson turban, nods vigorous assent.

[20515071] |So when next year's psyllium crop is harvested in March, it may be smaller than the 16,000 metric tons of the past few years -- right at the crest of the psyllium boom.

[20515072] |And the world could experience its first psyllium shortage.

[20516001] |Kellwood Co. said it completed a previously announced acquisition of Crowntuft Manufacturing Corp., a New York-based maker of chenille robes and lounge wear.

[20516002] |The apparel maker wouldn't disclose terms of the agreement.
[20516003] |Kellwood said Gabriel Hakim Sr., president of Crowntuft, will continue to head Crowntuft's management group.

[20517001] |A seat on the Chicago Mercantile Exchange was sold for $416,000, down $36,000 from the previous sale Oct.

[20517002] |Seats currently are quoted at $410,000 bid, $425,000 asked.

[20517003] |The record price for a full membership on the exchange is $550,000, set March 9, 1989.

[20518001] |Small businesses say a recent trend is like a dream come true: more-affordable rates for employee-health insurance, initially at least.
[20518002] |But then they wake up to a nightmare.

[20518003] |The reasonable first-year rates can be followed by increases of 60% or more if a covered employee files a major claim, they complain.
[20518004] |Insurance premiums for one small Maryland concern went up 130% in less than two years, the last increase coming after one of its three workers developed a herniated disk.

[20518005] |"There's a distinct possibility that I may lose my job over this," the employee, Karen Allen, of Floor Covering Resources, Kensington, Md., recently told a congressional hearing.
[20518006] |She said her employer can't afford the rate increases, and she fears she won't find another job with a benefit plan covering her ailment.

[20518007] |For employee and employer alike, the worry is widespread.
[20518008] |Surveys repeatedly show that small-business owners rank the availability and rising cost of health insurance as one of their biggest concerns.

[20518009] |The House Energy and Commerce Committee's health subcommittee, headed by Democratic Rep. Henry Waxman of California, is looking into complaints that small businesses not only can't keep reasonably priced employee-health insurance if claims are filed, but often can't get coverage at all if a worker is termed medically uninsurable.

[20518010] |"I have an old-fashioned name for people in that position: sick people who need health insurance," Rep. Waxman says. "
[20518011] |What we're seeing now makes a mockery of the idea of insurance: collect premiums from the healthy, dump the sick and let them pay their own bills."
[20518012] |Some lawmakers may seek legislation to limit overly restrictive insurance policies.

[20518013] |The concern grows out of increased efforts by the insurers to woo the small-business market.
[20518014] |As larger companies increasingly self-insure, or use reserves to pay their own workers' medical bills, the insurance industry has turned to the small-employer market that was once a backwater for them.

[20518015] |"Insurance companies will offer a good rate if no one is sick, but it's a roll of the dice," says Rosemary Heinhold of the Small Business Service Bureau, a group representing 35,000 small businesses nationwide.
[20518016] |"One case of cancer or a high-risk pregnancy with a sick infant, and rates go up 40% to 60%.
[20518017] |Small-business people end up paying insurance premiums worth two to three times the cost of one illness."

[20518018] |In addition, the group says some of its member companies have been denied insurance because individual workers had medical problems that ranged from a mild cardiac condition to psychological counseling after a divorce, hemorrhoids and overweight.

[20518019] |The Health Insurance Association of America, an insurers' trade group, acknowledges that stiff competition among its members to insure businesses likely to be good risks during the first year of coverage has aggravated the problem in the small-business market.
[20518020] |But it says that rapid rate increases are directly tied to the soaring cost of health care.

[20518021] |Some business analysts blame the problem on tough competition in the insurance market.
[20518022] |They say insurance companies use policies aimed at excluding bad risks because their competitors do.
[20518023] |But the general practice makes it more difficult to combine small groups of people into larger groups, thus spreading the risk over a larger base of premiums.

[20518024] |"I'm not accusing insurers of dereliction of duty," Robert Patricelli of the U.S. Chamber of Commerce told Mr. Waxman's panel.
[20518025] |"You can't ask one carrier to underwrite on social grounds when that might destroy it in the marketplace."

[20518026] |Rep. Waxman and Democratic Sen. Edward Kennedy of Massachusetts have proposed regulation to deal with the problem.
[20518027] |The proposal is just part of legislation that would require businesses to provide health benefits, an idea that is strongly opposed by small business who say it would just compound the insurance-cost problems.

[20518028] |But small-business lobbyists say they support the idea, included in the Kennedy-Waxman bill, of new laws or regulations requiring greater use of community rating, which pegs rates to the use of health care by a community or other large group, and is designed to prevent insurance companies from taking only low-risk small companies as clients.

[20518029] |But first on the list of priorities, says the National Federation of Independent Business, is to prohibit state laws requiring the inclusion of specialty items, such as psychiatric care, in basic health plans.
[20518030] |Such requirements, they argue, make it difficult to provide a basic, low-cost health-benefits package.

[20518031] |"Before the state of Wisconsin mandated that mental-health care be covered, there were only 70 mental-health clinics in the state; now there are 400," says Carolyn Miller, an NFIB lobbyist.
[20518032] |She contends that similar mandates have driven up insurance costs 20% in Maryland and 30% in California.

[20518033] |The insurance-industry association also strongly disagrees with the proposed community rating, which "doesn't save one dollar," argues James Dorsch, HIAA's Washington counsel.
[20518034] |"It just makes healthy businesses subsidize unhealthy ones and gives each employer less incentive to keep his workers healthy."
[20518035] |Mr. Dorsch says the HIAA is working on a proposal to establish a privately funded reinsurance mechanism to help cover small groups that can't get insurance without excluding certain employees.

[20518036] |The complexities of the insurance problem make the outcome difficult to predict.
[20518037] |But to Ms. Allen, the employee whose back problem triggered a huge insurance-rate increase, the issue was simple.
[20518038] |"What good is having health insurance," she asked, "when it's so expensive that it becomes impossible to keep after only one major claim?

[20519001] |The Belgian consumer price index rose a provisional 0.1% in October from the previous month and was up 3.64% from October 1988, the Ministry of Economic Affairs said.

[20519002] |The index, which uses a base of 1981 as 100, was calculated at 140.91 points in October, from 140.74 in September.

[20519003] |Annual inflation rose to 3.64% in October from 3.55% in September.

[20519004] |Belgium's inflation has been rising steadily for the past year, but the ministry said the latest rise is slower than gains in September and August.

[20520001] |Nashua Corp., rumored a potential takeover target for six months, said that a Dutch company has sought U.S. approval to buy up to 25% of Nashua's shares.

[20520002] |Nashua immediately responded by strengthening a poison-pill plan and saying it will buy back up to one million of its shares, or 10.4% of the 9.6 million outstanding.

[20520003] |Nashua, whose major business is selling copiers, facsimile machines and related supplies, said Reiss & Co. B.V. of the Netherlands filed a request with the Federal Trade Commission under the Hart-Scott-Rodino Act for permission to buy more than $15 million of Nashua's stock but less than 25%.

[20520004] |Previously, an affiliate of Unicorp Canada disclosed a stake of less than 5% in Nashua, according to Daniel M. Junius, Nashua's treasurer.

[20520005] |Nashua's stock has fluctuated sharply on takeover speculation, rising to a high for the year of $42.875 a share in June from $29.75 in March.
[20520006] |But the company has had weak results so far this year, with earnings declining 43% to $13.7 million, or $1.43 a share, on a 4% decline in revenue to $713.5 million through the first nine months of the year.

[20520007] |Its stock has slumped recently, closing unchanged Friday at $29 a share in composite trading on the New York Stock Exchange; at that price, the company has a market value of about $278.4 million.
[20520008] |Nashua announced the Reiss request after the market closed.

[20520009] |Mr. Junius said Nashua's "intention is to remain an independent public company."
[20520010] |The company said it amended its shareholder rights plan by reducing to 10% from 20% the level of ownership by an outsider that would trigger the issuance to other holders of rights to buy additional shares of Nashua common at half price.

[20520011] |In addition, the company's board authorized the purchase of up to an additional one million shares.
[20520012] |Under a program approved by the company in 1987 that didn't specify a share amount, Nashua had purchased 481,000 shares through Sept. 29.

[20520013] |Alex Henderson, an analyst at Prudential-Bache Securities, said that while Nashua's performance this year has been "atrocious," the company nonetheless is attractive as a "classic breakup candidate because there's no similarity between its {four} businesses."
[20520014] |He estimated the breakup value at $55 a share.
[20520015] |In addition to selling Japanese-made photocopiers and facsimile machines in Europe and copier supplies in the U.S., Nashua has three other major businesses: labels and tapes, data storage disks for computers and mail-order photofinishing.

[20521001] |The closely held supermarket chain named Frank Nicastro vice president and treasurer.
[20521002] |The 47-year-old Mr. Nicastro joins Grand Union from Singer Co., where he was treasurer.

[20522001] |The current account deficit on France's balance of payments narrowed to 1.48 billion French francs ($236.8 million) in August from a revised 2.1 billion francs in July, the Finance Ministry said.

[20522002] |Previously, the July figure was estimated at a deficit of 613 million francs.

[20522003] |Seasonally adjusted figures for August weren't available because of a recent strike that has disrupted the ministry's data collection.

[20523001] |Weisfield's Inc. said it is in preliminary discussions regarding the possible sale of the company.

[20523002] |A spokesman for the retail jeweler said the company would provide more details today and that it expects to reach a definitive agreement by the end of the week.

[20523003] |In over-the-counter trading Friday, Weisfield's gained $9.50 to $39.
[20523004] |At that price, the company has an indicated value of $42.9 million.
[20523005] |Weisfield's had about 1.1 million shares outstanding as of July 31.

[20523006] |The stock gained $2.75 Thursday to close at a then-52 week high.

[20524001] |In the aftermath of the Beijing massacre on June 4, economists advanced wildly divergent views on how Hong Kong would be affected.

[20524002] |Among the most upbeat was BT Brokerage (Asia) Ltd.
[20524003] |In a June 5 reaction, the Bankers Trust Co. unit proclaimed the economy "shockproof."

[20524004] |Others were more cautious.
[20524005] |In a July analysis titled "From Euphoria to Despair," W.I. Carr (Far East) Ltd., another securities firm, said that eroding confidence might undermine future economic development.

[20524006] |Today, with business activity in Hong Kong staggering along at an uneven pace, the economy itself seems locked in a struggle between hope and fear.

[20524007] |Manufacturers have survived the turmoil in China largely unscathed.
[20524008] |Signs of revival seem evident in Hong Kong's hard-hit hotel sector.
[20524009] |But in the stock and real-estate markets, activity remains spotty even though prices have regained much of their lost ground.
[20524010] |Waning demand reported by importers, retailers and even fancy restaurants all reinforce a profile of a community that is sharply tightening its belt.

[20524011] |As many economists and businessmen see it, those incongruities underscore a paradox that seems likely to bedevil the economy throughout the 1990s.
[20524012] |That paradox is Hong Kong's economically rewarding yet politically perilous relationship with China.

[20524013] |As a model of capitalist efficiency on southern China's doorstep, Hong Kong's prospects look good.
[20524014] |China's land and labor offer inexpensive alternatives to local industry.
[20524015] |China-bound freight streams through the territory's port.
[20524016] |In the decade since the communist nation emerged from isolation, its burgeoning trade with the West has lifted Hong Kong's status as a regional business center.
[20524017] |These benefits seem secure despite China's current economic and political troubles.
[20524018] |But to Hong Kong, China isn't purely business.
[20524019] |It is also the sovereign power that, come 1997, will take over this British colony.
[20524020] |China's leaders have promised generous liberties for post-1997 Hong Kong.
[20524021] |That promise sounds shaky now that those same leaders have fallen back on Marxist dogma and brute force to crush their nation's democracy movement.

[20524022] |Outflows of people and capital from Hong Kong have been growing since the sovereignty issue first arose in the early 1980s.
[20524023] |A widely held assumption all along has been that, given its robust economy, Hong Kong will be able to attract sufficient foreign money and talent to comfortably offset the outflows.
[20524024] |With interest in emigration and investment abroad soaring since June 4, that assumption no longer seems so safe.

[20524025] |Investment and emigration plans take time to come to fruition.
[20524026] |Only four months have passed since the Beijing massacre, and few are prepared to predict its ultimate impact.
[20524027] |The only consensus is that more money and people may leave Hong Kong than had been thought likely.
[20524028] |This expected blow has cast a pall over the economy's prospects.
[20524029] |The question, as many people see it, is how long such uncertainty will last.

[20524030] |Maureen Fraser, an economist with W.I. Carr, a subsidiary of France's Banque Indosuez, believes that the territory may not be able to regain its momentum until some time after 1997.
[20524031] |It may experience an upswing or two in between.
[20524032] |But with local investors shaken by China's political and economic turmoil, she says, a genuine recovery may not arrive until Hong Kong can prove itself secure under Chinese sovereignty.

[20524033] |"Investors have to accept the possibility of a significant slowdown in economic activity in the runup to 1997," she says.
[20524034] |"Over the next few years, I would advise caution."

[20524035] |In a soon-to-be published book on the territory, a political economist, Miron Mushkat, has derived three future scenarios from interviews with 41 Hong Kong government officials and businessmen.
[20524036] |Nearly half of them argue that Hong Kong's uneasy relationship with China will constrain -- though not inhibit -- long-term economic growth.
[20524037] |The rest are split roughly between optimists who expect Hong Kong to hum along as before and pessimists who foresee irreparable chaos.

[20524038] |The interviews took place two years ago.
[20524039] |Since the China crisis erupted, Mr. Mushkat says, the scenario as depicted by the middle-of-the-road group bears a remarkable resemblance to the difficulties Hong Kong currently faces.
[20524040] |The consensus of this group, which he dubs "realists," is that the local economy will grow through the 1990s at annual rates averaging between 3% and 5%.

[20524041] |Such a pace of growth, though respectable for mature industrialized economies, would be unusually slow for Hong Kong.
[20524042] |Only twice since the 1960s has annual gross domestic product growth here fallen below 5% for two or more consecutive years.
[20524043] |The first instance occurred in 1967-68, when China's Cultural Revolution triggered bloody street rioting in the colony.
[20524044] |The other came in 1974-75 from the combined shock of world recession and a severe local stock market crash.
[20524045] |During the past 10 years, Hong Kong's economic growth has averaged 8.3% annually.
[20524046] |Given Hong Kong's record, Mr. Mushkat's "realists" might have sounded unduly conservative when the interviews took place two years ago.
[20524047] |Under the current circumstances, he says, their scenario no longer seems unrealistic.

[20524048] |"The city could lose some of its entrepreneurial flavor.
[20524049] |It could lose some of its dynamism," says Mr. Mushkat, a director of Baring Securities (Hong Kong) Ltd., a unit of Britain's Barings PLC. "
[20524050] |It doesn't have to be a disaster.
[20524051] |It just means that Hong Kong would become a less exciting place."

[20524052] |Going by official forecasts of GDP, which measures the colony's output of goods and services, minus foreign income, Mr. Mushkat's "realists" seem relatively close to the mark.
[20524053] |After taking into account the fallout from the China crisis, the government has projected 1989 GDP growth of 5%.
[20524054] |The updated forecast, published Aug. 25, compares with an earlier forecast of 6% published March 1 and a 7.4% rate achieved in

[20524055] |Sir Piers Jacobs, Hong Kong's financial secretary, says a further downward revision may be justified unless the economy stages a more convincing rally.
[20524056] |"We aren't looking at anything like a doomsday scenario," he says.
[20524057] |"But clearly we're entering a difficult period."

[20524058] |Many factors besides a dread of 1997 will have a bearing on Hong Kong's economy.
[20524059] |One concerns Japanese investors.
[20524060] |Barely visible on Hong Kong's property scene in 1985, by last year Japan had become the top foreign investor, spending $602 million.
[20524061] |The market has grown relatively quiet since the China crisis.
[20524062] |But if the Japanese return in force, their financial might could compensate to some extent for local investors' waning commitment.

[20524063] |Another -- and critical -- factor is the U.S., Hong Kong's biggest export market.
[20524064] |Even before the China crisis, weak U.S. demand was slowing local economic growth.
[20524065] |Conversely, strong consumer spending in the U.S. two years ago helped propel the local economy at more than twice its current rate.

[20524066] |Indeed, a few economists maintain that global forces will continue to govern Hong Kong's economic rhythm.
[20524067] |Once external conditions, such as U.S. demand, swing in the territory's favor, they argue, local businessmen will probably overcome their 1997 worries and continue doing business as usual.

[20524068] |But economic arguments, however solid, won't necessarily impress Hong Kong's 5.7 million people.
[20524069] |Many are refugees, having fled China's unending cycles of political repression and poverty since the Communist Party took power in 1949.
[20524070] |As a result, many of those now planning to leave Hong Kong can't easily be swayed by momentary improvements in the colony's political and economic climate.

[20524071] |Emigration applications soared in 1985, when Britain and China ratified their accord on Hong Kong's future.
[20524072] |In 1987, Hong Kong's most prosperous year for a decade, 30,000 left, up 58% from the previous year.
[20524073] |Last year, 45,000 went.
[20524074] |The government predicts that annual outflows will level off over the next few years at as much as 60,000 -- a projection that is widely regarded as unrealistically low.
[20524075] |A large number of those leaving are managers and professionals.
[20524076] |While no one professes to know the exact cost of such a "brain drain" to the economy, hardly anyone doubts that it poses a threat.

[20524077] |"When the economy loses a big portion of its work force that also happens to include its most productive members, economic growth is bound to be affected," says Anthong Wong, an economist with Hang Seng Bank.

[20525001] |While Wall Street is retreating from computer-driven program trading, big institutional investors are likely to continue these strategies at full blast, further roiling the stock market, trading executives say.

[20525002] |Bowing to a mounting public outcry, three more major securities firms -- Bear, Stearns & Co. Inc., Morgan Stanley & Co. and Oppenheimer & Co. -- announced Friday they would suspend stock-index arbitrage trading for their own accounts.

[20525003] |PaineWebber Group Inc. announced a pullback on Thursday from stock-index arbitrage, a controversial program-trading strategy blamed by many investors for encouraging big stock-market swings.

[20525004] |Though the trading halts are offered as a sign of concern about recent stock market volatility, most Wall Street firms remain open to handle program trading for customers.
[20525005] |Trading executives privately say that huge stock-index funds, which dwarf Wall Street firms in terms of the size of their program trades, will continue to launch big programs through the stock market.

[20525006] |Wells Fargo Investment Advisers, Bankers Trust Co. and Mellon Capital Management are among the top stock-index arbitrage clients of Wall Street, trading executives say.
[20525007] |These huge stock-index funds build portfolios that match the S&P 500 stock index or other stock indexes, and frequently swap between stocks and futures to capture profits.
[20525008] |"They will do it every chance they get," said one program-trading executive.

[20525009] |Consequently, abrupt swings in the stock market are not likely to disappear anytime soon, they say.
[20525010] |In fact, without Wall Street firms trading for their own accounts, the stock-index arbitrage trading opportunities for the big funds may be all the more abundant.
[20525011] |"More customers may come to us now," said James Cayne, president of Bear Stearns Cos.

[20525012] |Executives who manage these funds see the current debate over program trading as a repeat of the concern expressed after the 1987 crash.
[20525013] |They noted that studies completed after the 1987 crash exonerated program trading as a source of volatility.
[20525014] |"The issues that are (now) being raised, in classic anti-intellectual fashion, fly in the face of a number of post-crash studies," said Fred Grauer, chairman of Wells Fargo Investment Advisers.

[20525015] |A Bankers Trust spokesman said that the company's investment arm uses stock-index arbitrage to enhance investors' returns.
[20525016] |Officials at Mellon Capital were unavailable for comment.

[20525017] |Stock-index funds have grown in popularity over the past decade as pension funds and other institutional investors have sought a low-cost way to match the performance of the stock market as a whole.
[20525018] |Many money managers who trade stock actively have trouble consistently matching the S&P-500's returns.

[20525019] |Some stock-index funds are huge.
[20525020] |Wells Fargo Investment Advisers, for example, managed $25 billion in stock investments tracking the S&P 500 at the end of June, according to Standard & Poor's Corp.
[20525021] |Mr. Grauer said $2 billion of that is used in active index arbitrage.

[20525022] |Stock-index funds frequently use the futures markets as a hedging tool, but that is a far less aggressive strategy than stock-index arbitrage, in which traders buy and sell big blocks of stocks with offsetting trades in stock-index futures to profit from price differences.

[20525023] |The 190-point plunge in the stock market Oct. 13 has heightened concerns about volatility.
[20525024] |And while signs of an economic slowdown, softer corporate earnings and troubles with takeover financing all have contributed to the stock market's recent weakness, many investors rushed to blame program trading for aggravating market swings.

[20525025] |The Wall Street firms' pullback followed their recent blacklisting by several institutional investors.
[20525026] |Last Tuesday, Kemper Corp.'s Kemper Financial Services Inc. unit said it would no longer trade with firms committed to stock-index arbitrage, including the three that later suspended stock-index arbitrage trading on Friday.
[20525027] |Phoenix Mutual Life Insurance Co. and Founders Asset Management Inc. also cut off brokerage firms that engage in program trading.

[20525028] |Though it is still doing stock-index arbitrage trades for customers, Morgan Stanley's trading halt for its own account is likely to shake up firms such as Kidder, Peabody & Co. that still do such trades for their own account.
[20525029] |Morgan Stanley has consistently been one of the top stock-index arbitrage traders in recent months.

[20525030] |Indeed, Morgan Stanley's president, Richard B. Fisher, said the firm is putting up money to form a group of regulators, investors and investment banks to find out if stock-index arbitrage artificially induces stock-market volatility.

[20525031] |"We have to clear up these issues and find out what is present that is creating artificial volatility," Mr. Fisher said.
[20525032] |"There is no question that investor confidence (in the stock market) is critical."

[20525033] |Joining the call for some kind of study or regulatory action, Merrill Lynch & Co. recommended program-trading reforms late Friday, including higher margins on stock-index futures and greater regulatory coordination.
[20525034] |Separately, Mr. Cayne of Bear Stearns said his firm is working with regulators to balance margin requirements to "enhance stabilization."
[20525035] |Margin rules determine the minimum amount of cash an investor must put up when buying a security.
[20525036] |Current rules permit investors to put up less cash for futures than for stocks.

[20525037] |Some observers say that different rules governing stock and futures markets are partly responsible for volatility.
[20525038] |These rules, they say, permit faster and cheaper trading in futures than in stocks, which frequently knocks the two markets out of line.

[20525039] |Stock-index arbitrage, because it sells the more "expensive" market and buys the "cheaper" one, attempts to reestablish the link between the stock and futures markets, and the adjustments are often abrupt.
[20525040] |But unequal trading rules allow the futures market to trade differently from stocks, which invites frequent bouts of stock-index arbitrage in the first place.

[20525041] |"There has to be better coordination on a regulatory basis," said Christopher Pedersen, director of trading at Twenty-First Securities Corp.
[20525042] |"One agency should have the authority over all equity products.

[20526001] |Like so many trends in the entertainment industry, the current spate of rape dramas on television seems to represent a confluence of high-mindedness and self-interest.
[20526002] |The former comes from the latest wave of political activism in Hollywood, especially around feminist issues such as abortion.
[20526003] |The latter comes from the perception, on the part of many people in network TV, that their only hope of keeping viewers from defecting to cable is to fill the airwaves with an increasingly raw sensationalism.
[20526004] |Put these together, and you get programs about rape.

[20526005] |The best of the crop was last week's season premiere of "In the Heat of the Night," the NBC series based on a 1967 feature film about a black Philadelphia police detective in a small Southern town.
[20526006] |In the series, Virgil Tibbs (Howard Rollins) and his wife, Althea (Anne-Marie Johnson) have settled in Sparta, Miss.
[20526007] |Because the show has acquired a sense of place by being filmed on location in Georgia, this episode -- in which Althea gets raped by an arrogant white schoolteacher -- does a decent job of tracing the social repercussions of the crime.

[20526008] |Obviously, it's harder to establish a sense of place in a one-shot TV movie.
[20526009] |But tonight's offering, "Settle the Score" (9-11 p.m. EST, on NBC), doesn't even try.
[20526010] |This tale of a Chicago policewoman returning home to find the man who raped her 20 years earlier is supposed to be set in the Ozarks.
[20526011] |But it's more like an illustration of what Ben Stein describes in his study of social attitudes in the TV industry: "Fear of violence and animosity . . . because of race or religion, fear and lack of comprehension about the politics of small-town people . . . produce a powerful wave of dislike of small towns in the minds of TV writers and producers."

[20526012] |The writer and executive producer of "Settle the Score," Steve Sohmer, is a graduate of Yale who participated in a PBS documentary, aired this summer, in which six members of the Yale class of 1963 ruminated about their lives since graduation.
[20526013] |At one point in the documentary, Mr. Sohmer, who is Jewish, says he felt rejected by many of the Protestants and Southerners he met at Yale.
[20526014] |He quotes one student saying, "You're just the kind of Jewboy we Southerners can't stand.
[20526015] |" Mr. Sohmer confesses that it was partly in response to such attitudes that he is now "a dweller on one of the two islands off the coast of America."
[20526016] |But is exile in Hollywood enough?
[20526017] |Not to judge by "Settle the Score," in which Mr. Sohmer seems to be settling a score of his own.
[20526018] |Of all the unflattering portraits of small-town America I've seen on TV, this film is the most gratuitously nasty.
[20526019] |The sole sympathetic character is the prodigal daughter Kate (Jaclyn Smith), and she is tolerable only by virtue of having nothing in common with her kinfolk, a truly benighted pack of Southern Protestants whose grim existence consists mostly of growing peaches and repressing sex.

[20526020] |I mean, these folks are so uptight that they blame pretty Kate for the fact that when she was a teen-ager, someone tied her hands behind her back, thrust her head into a gunny sack, brutally raped and beat her, and then left her to die in a cold-storage room.
[20526021] |Her Pa (Howard Duff) is the kind of guy who, while saying grace at the supper table, pauses at the word "sin" and glares at the daughter he hasn't seen for two decades, because he knows in his heart that she enjoyed what happened in the cold-storage room, and has been indulging the same taste ever since in the fleshpots of Chicago.

[20526022] |People like Pa do exist, of course.
[20526023] |But in Mr. Sohmer's Ozarks, he is but the tip of the patriarchal iceberg.
[20526024] |Every man Kate encounters is either sniggeringly puritanical, viciously patronizing, revoltingly lecherous, or all three.
[20526025] |Add the fact that any one of them, including Pa, could be her attacker, and you have a setting that doesn't resemble small-town America, or even Hollywood's nightmare of small-town America, so much as a paranoid feminist dystopia like Margaret Atwood's "The Handmaid's Tale," itself soon to be (you guessed it) a Hollywood movie.

[20526026] |There are two exceptions: Josh (Jeffrey DeMunn), the local doctor who has always loved Kate; and Lincoln (Richard Masur), Kate's simple-minded but affectionate brother.
[20526027] |Josh makes clumsy passes at Kate when she's seething with anger and fear, but we know from the outset that he's not a member of the evil patriarchy.
[20526028] |How could he be?
[20526029] |He's the director of the local Planned Parenthood chapter.
[20526030] |As for Lincoln, if you can't guess why he's so sweet to his sister when everybody else hates her, then I'm not going to tell you.

[20526031] |As for the women, they're pathetic.
[20526032] |Kate's Ma (Louise Latham) is a moral coward.
[20526033] |Her sister-in-law (Amy Wright) is a sniveling prude afraid that Kate will seduce all the married men in town, including a particularly loathsome fellow named Tucker, whose idea of fun is to leave his wife at home tending to her bruises and cigarette burns, while he bullies Kate into a dance that consists of drooling on her while trying to break her ribs.
[20526034] |At the very least, it would appear that Sis is a poor judge of masculine charm.

[20526035] |Yet even these insulting caricatures are not as bad as the moral hypocrisy at the heart of "Settle the Score."
[20526036] |In the aforementioned episode of "In the Heat of the Night," we saw Althea being attacked, but we weren't invited to enjoy the spectacle.
[20526037] |In Mr. Sohmer's film, by contrast, we are urged to share the perverse excitement of the rapist creeping up on his victim, as the camera ogles Kate in various stages of undress and lingers on the sight of her trussed-up body during frequent flashbacks to the rape.

[20526038] |At this point, the truce between feminism and sensationalism gets mighty uneasy.
[20526039] |Take the scene in which Kate stands naked by a lighted window, whispering to her hidden assailant, "Look all you want.
[20526040] |Starting tomorrow, I'm stalking you.
[20526041] |" Or the one in which she and Josh are stranded in the city, and, after insisting on separate motel rooms, she knocks on his door to pour out her feelings about the rape -- wearing nothing but a mini-slip and a push-up bra.
[20526042] |Surely the question is obvious.
[20526043] |With friends like Mr. Sohmer, do the feminists of Hollywood need enemies?

[20527001] |Crossland Savings Bank's stock plummeted after management recommended a suspension of dividend payments on both its common and preferred stock because Crossland may not meet the new government capital criteria effective Dec. 7.

[20527002] |In composite trading on the New York Stock Exchange Friday, Crossland closed at $5.25, down $1.875, a 26% decline.

[20527003] |A spokesman said the savings bank may not qualify for the capital requirements because, under the proposed guidelines, its $380 million of preferred stock doesn't meet the "core capital" criteria outlined under the new Financial Institutions Reform, Recovery and Enforcement Act of 1989.
[20527004] |He added that final guidelines to be published in early November will determine whether the bank is in compliance.

[20527005] |Crossland said it retained three investment bankers to assist it in developing and implementing a financial restructuring plan.
[20527006] |It wouldn't identify the bankers.

[20527007] |Additionally, Crossland reported a third-quarter loss of $175.5 million, or $13.44 a share, compared with net income of $27.1 million, or $1.16 a share, a year ago.
[20527008] |A major factor in the third-quarter loss was the write-down of $143.6 million of goodwill.

[20527009] |The spokesman said that the proposed guidelines caused Crossland to revise its business objectives and, consequently, to write down the asset value of some previous acquisitions.
[20527010] |Crossland recorded an additional $20 million in loan loss reserves in the third quarter.

[20527011] |Net interest income for the third quarter declined to $35.6 million from $70.1 million a year ago.
[20527012] |However, non-interest income rose to $23.5 million from $22 million.
[20527013] |Third-quarter loan originations dropped sharply to $663 million from $1 billion a year ago.

[20527014] |Standard & Poor's Corp. lowered the rating on Crossland's preferred stock to double-C from single-B-minus and placed it on CreditWatch for possible further downgrade.
[20527015] |It also placed on CreditWatch for possible downgrade other securities, including the double-B-minus/B rating of Crossland's certificates of deposit and the single-B rating of its senior subordinated capital notes.
[20527016] |About $518 million of debt is affected.

[20528001] |The envelope arrives in the mail.
[20528002] |Open it and two soulful eyes on a boy's brown face peer out from the page, pleadingly.
[20528003] |Does the tyke have a good mind about to be wasted?
[20528004] |Is he a victim of Gramm-Rudman cuts?
[20528005] |No, but he's endangered all the same: His new sitcom on ABC needs a following to stay on the air.

[20528006] |ABC hasn't had much luck with shows featuring blacks in recent years, and the producers of one new arrival are a bit desperate.
[20528007] |"Homeroom," a show about a black ad executive who gives up the boardroom for a fourth-grade classroom, is flunking the ratings test.
[20528008] |So producers Alyce and Topper Carew spun their Rolodexes and gathered names of black opinion makers to mount a direct-mail campaign.
[20528009] |By wooing a core black audience they figure they might keep the show alive at least until the spring semester.

[20528010] |Using direct mail for a TV show is like fishing for whale with a breaded hook.
[20528011] |It just isn't done.
[20528012] |But employing this kind of gut-wrenching plea to black consciousness makes it even more unusual.
[20528013] |Still, Mr. Carew thinks he can reach a good chunk of the three million-plus black homes he needs by mailing to the almost 10,000 blacks who form what he calls "the grapevine."

[20528014] |"The grapevine isn't organized, but you and I know it exists," says Mr. Carew, referring to the often uncannily small world of black professionals and community leaders.

[20528015] |"This is a very personal, ethnic style," Mr. Carew says. "
[20528016] |I want people in the barber shops and the beauty shops and standing in line at the rib joints to be talking about the show.
[20528017] |I want white America to talk about it, too, but I'm convinced that the grapevine is what's happening."

[20528018] |ABC says it is aware of the producers' action, but the mailing was sent without the network's blessing.
[20528019] |The letter, in fact, takes a jab at ABC for being a laggard in black programming.

[20528020] |Meanwhile, as the Sunday evening show struggles to stay afloat against the tough competition of "Murder, She Wrote," the grapevine idea is threatening to turn into a weed: The tactic apparently has inspired sample viewings, but accolades are slow in coming.

[20528021] |Doug Alligood, a black advertising executive who tracks black viewing patterns, gives the Carews an "A" for marketing moxie, but isn't alone in his lukewarm reaction.
[20528022] |Some shows just don't impress, he says, and this is one of them.

[20529001] |TransCanada PipeLines Ltd. said it plans to shift its headquarters to Calgary, Alberta, from Toronto next year to cut costs and be closer to the upstream natural-gas industry.

[20529002] |Gerald Maier, president and chief executive officer of the natural-gas pipeline and marketing concern, said the company's future growth is "increasingly linked" to decisions made by Calgary-based gas producers.

[20529003] |"Since deregulation of the market in 1985, producers have become much more intensely involved in both transportation and marketing," Mr. Maier said. "
[20529004] |It's a matter of being close to those suppliers; many of those companies don't know us as well as they should."

[20529005] |TransCanada transports all gas that moves eastward from Alberta.
[20529006] |That includes all the gas consumed in Ontario and Quebec, along with the bulk of Canadian gas exports to the

[20529007] |Walter Litvinchuk, vice president of Pan-Alberta Gas Ltd., a Calgary-based gas marketing concern, said the industry will welcome the move.

[20529008] |"Having more than a token presence here should enhance communications and business relationships," Mr. Litvinchuk said. "
[20529009] |Since the cost of transporting gas is so important to producers' ability to sell it, it helps to have input and access to transportation companies."

[20529010] |The move, which could cost TransCanada as much as 50 million Canadian dollars (US$42.5 million) in relocation and severance payments, should be complete by next summer, Mr. Maier said.
[20529011] |All 700 Toronto-based employees will be offered positions in Calgary, the company said.

[20529012] |The company will save between C$4 million and C$6 million annually in office expenses and other administrative costs by moving to Calgary, Mr. Maier added.

[20529013] |Part of both the costs and the savings could be passed on to shippers on the TransCanada pipeline through tolls, which are based on the value of the pipeline system and the cost of operating it.

[20529014] |TransCanada is 49.1% owned by Montreal-based holding company BCE Inc.

[20530001] |Since its founding in 1818, Brooks Brothers, the standard-bearer of the Ivy League look, has eschewed flashy sales promotions and fashion trends -- the rules that most retailers live by.
[20530002] |But with sales growth sluggish and other men's stores putting on the heat, the venerable retailer can no longer afford such a smug attitude.

[20530003] |So two weeks ago, thousands of Brooks Brothers charge customers -- customers conditioned to wait for twice-yearly clearance sales -- got a surprise: an invitation to come in and buy any one item for 25% off.
[20530004] |During the four-day promotion, shoppers at the Short Hills, N.J., store lined up to pay for big-ticket items like coats and suits.

[20530005] |That's not all.
[20530006] |Departing from its newspaper ads featuring prim sketches of a suit or a coat, Brooks Brothers is marketing an updated image in a new campaign that carries the slogan, "The Surprise of Brooks Brothers."
[20530007] |One color photo displays a rainbow of dress shirts tied in a knot; another picture shows neckties with bold designs.
[20530008] |The message is loud and clear: This is not your father's Brooks Brothers.

[20530009] |As part of its national ad pitch, Brooks Brothers will show less preppy women's clothes, moving away from its floppy-tie business stereotype.
[20530010] |One ad shows a bright red jacket paired with a black leather skirt.
[20530011] |And the ad copy is cheeky: "How can you be a Wall Street hot shot without at least one Brooks Brothers suit in your portfolio?"

[20530012] |Brooks Brothers hopes that shaking its time-honored traditions will attract more young men and more women and change consumer perceptions about its range of merchandise.
[20530013] |"We have men who only buy their shirts and underwear here or younger customers who only buy their {job} interview suit here," says William Roberti, chairman and chief executive officer of Brooks Brothers. "
[20530014] |We want them to buy more of their wardrobe here."
[20530015] |Industry watchers agree that Brooks Brothers is long overdue in updating its buttoned-down image, which has stunted its growth.
[20530016] |When acquired in May 1988 by British retailer Marks & Spencer PLC, Brooks Brothers' annual operating profit was about $41.8 million on sales of $290.1 million.
[20530017] |Mr. Roberti concedes that since the $750 million takeover, "sales growth hasn't been dramatic."
[20530018] |For the 11 months ended March 31, operating profit at the 52-store chain totaled $40.5 million on sales of $286.8 million.

[20530019] |As Brooks Brothers jumps into the fashion fray, it will be playing catch up.
[20530020] |Many clothiers, especially Ralph Lauren, have cashed in on the recent popularity of updated Ivy League and English styles.
[20530021] |In keeping with men's broader fashion scope today, businessmen are dabbling in English and Italian suits that are conservative but not stodgy.
[20530022] |The rigid Ivy League customer, Brooks Brothers' bread and butter, meanwhile is becoming extinct.
[20530023] |Thus, Brooks Brothers has lost customers to stores that offer more variety such as Paul Stuart, Barneys New York and Louis, Boston.

[20530024] |"Brooks Brothers no longer has a lock on the {Ivy League} customer who is status-conscious about his clothes," says Charlie Davidson, president of the Andover Shop, a traditional men's store in Cambridge, Mass.

[20530025] |By making a break from tradition, Brooks Brothers is seeking a delicate balance.
[20530026] |If it promotes fashion too much, the shop risks alienating its old-line customers; by emphasizing "value," it risks watering down its high-minded mystique.

[20530027] |Fashion industry consultants also question whether the company can make significant strides in its women's business, given that its customer base is less established and that conservative business dress for women is on the decline.
[20530028] |Brooks Brothers' aim is for 20% of total sales to come from the women's department, up from the current 12%.

[20530029] |"Everybody forgets that there are fashion cycles in classic merchandise," observes Carol Farmer, a retail consultant.
[20530030] |"For women, dressing for success in a real structured way is over."

[20530031] |Despite these challenges, Marks & Spencer sees big potential in Brooks Brothers, noting the widely recognized name and global presence.
[20530032] |Marks & Spencer plans to open roughly 18 more U.S. stores in the next five years.
[20530033] |Brooks Brothers says business is robust at its 30 outlets in Japan and two shops in Hong Kong.
[20530034] |Marks & Spencer is also considering opening stores across Europe sometime in the future.

[20530035] |Alan Smith, president of Marks & Spencer North America and Far East, says that Brooks Brothers' focus is to boost sales by broadening its merchandise assortment while keeping its "traditional emphasis."
[20530036] |The British parent is also streamlining: Brooks Brothers, which continues to make almost all of its merchandise, recently shut one of its two shirt plants in Paterson, N.J., and has closed boys' departments in all but 20 stores.

[20530037] |Brooks Brothers is also remodeling its stores.
[20530038] |Wednesday, it will unveil a $7 million refurbishing at its flagship store on Madison Avenue.
[20530039] |With newly installed escalators, the store retains its signature wood-and-brass look but is less intimidating.
[20530040] |More shirts and sweaters will be laid out on tables, instead of sitting behind glass cases, so that customers can "walk up and touch them," Mr. Roberti says.

[20530041] |Because the biggest growth in menswear is in casual sportswear, Brooks Brothers is chasing more of that business.
[20530042] |The entire second floor of its Madison Avenue store is now casual sportswear featuring items such as ski sweaters, leather backpacks and a $42 wool baseball hat with the store's crest.

[20530043] |The centerpiece of the overhaul, according to Mr. Roberti, is the men's tailored clothing department, where Brooks Brothers has added new suit styles and fabrics.
[20530044] |"The perception out there is that we are very conservative and we only sell one type of suit," Mr. Roberti says, referring to Brooks Brothers' signature three-button "sack suit," with a center-vented jacket and boxy fit.

[20530045] |But it now offers more two-button versions and suits with a tapered fit.
[20530046] |It also plans to add suits cut for athletic men with broader upper bodies.
[20530047] |Next spring, nearly 30% of its suits will have pleated pants, compared with virtually none a couple of years ago.

[20530048] |Says Mr. Roberti: "We want to turn the customer on.

[20531001] |Ferro Corp. said it will buy back as many as one million common shares.
[20531002] |The maker of chemical and industrial materials didn't say how much it would pay or when it would make the transactions.

[20531003] |Ferro also said it would cancel the unused portion of a 1987 buy-back plan for administrative reasons.
[20531004] |The plan calls for the company to buy back 2,250,000 shares, which reflects a 3-for-2 stock split this year.
[20531005] |So far the company had bought back 1.6 million shares.

[20531006] |In New York Stock Exchange composite trading Friday, Ferro closed at $25.25, down 50 cents.

[20532001] |Arthur Price abruptly quit as president and chief executive officer of MTM Entertainment Inc., a Los Angeles production company that has fallen on hard times.

[20532002] |Mr. Price, 61 years old, also stepped down from the board of TVS Entertainment PLC, the British TV company that last year bought MTM, producer of such TV programs as "Hill Street Blues" and "The Mary Tyler Moore Show."

[20532003] |A TVS spokesman said he didn't know Mr. Price's plans.
[20532004] |James Gatward, TVS's chief executive, said in a statement that he will "assume overall responsibility" for MTM's operations until a successor is named.

[20532005] |Industry analysts speculated that Mr. Price's sudden departure may have stemmed from conflicts with Mr. Gatward.

[20532006] |Mr. Price "wanted to run the MTM business" and may have regretted selling the company to TVS, suggested Charles Denton, managing director of Zenith Productions, a subsidiary of Carlton Communications PLC, London.

[20532007] |Mr. Gatward declined to comment, and Mr. Price couldn't be reached on Friday.
[20532008] |In the TVS statement, Mr. Price said "leaving MTM was a very difficult decision," but added that "it is now time for a change. . . ."

[20532009] |The $320 million purchase of MTM represented an audacious international move for TVS, which then was about half the U.S. concern's size.
[20532010] |At the time, Mr. Gatward said his friendship with Mr. Price had smoothed the way for its link with the small British company.
[20532011] |But TVS stunned industry analysts last month by disclosing that it expected MTM to post an operating loss for this year.

[20532012] |In that announcement, TVS also said it was trimming production finance and hiring a new U.S. sales manager.
[20532013] |Mr. Gatward has spent a lot of time since late September at MTM's headquarters; he eliminated three departments and fired six executives, according to the TVS spokesman.
[20532014] |Further staff cuts are likely, the spokesman indicated.
[20532015] |"Obviously, we are looking at making economies across the board."

[20532016] |TVS blames difficulties in peddling reruns of MTM shows to U.S. broadcasters for the problems at MTM.
[20532017] |The market for reruns sold to local U.S. broadcasters has been weak for the past three or four seasons.

[20532018] |Mr. Price co-founded MTM in 1969 with U.S. actress Mary Tyler Moore and Grant Tinker, her then-husband.
[20532019] |Mr. Tinker later left to become chairman of National Broadcasting Co.
[20532020] |The TVS spokesman said Mr. Price still holds about an 8% TVS stake, acquired as part of the MTM acquisition.
[20532021] |In late trading on London's Stock Exchange Friday, TVS shares rose four pence to 195 pence a share.

[20533001] |Two rival bidders for Connaught BioSciences extended their offers to acquire the Toronto-based vaccine manufacturer Friday.

[20533002] |Institut Merieux S.A., which offered 942 million Canadian dollars (US$801.2 million), or C$37 a share for Connaught, said it would extend its bid, due to expire last Thursday, to Nov. 6.

[20533003] |A C$30-a-share bid by Ciba-Geigy Ltd., a pharmaceutical company based in Basel, Switzerland, and California-based Chiron Corp., a bioresearch concern, was extended to Nov. 16.
[20533004] |It had been due to expire Friday evening.

[20533005] |Merieux previously said it would ensure its bid remained open pending a final decision by Canadian regulators on whether to approve the takeover.
[20533006] |Merieux, a vaccine and bioresearch firm based in Lyon, France, is controlled 50.1% by state-owned Rhone Poulenc S.A.

[20533007] |The Canadian government previously said Merieux's bid didn't offer enough "net benefit" to Canada to be approved, and gave Merieux an until mid-November to submit additional information.

[20533008] |Merieux officials said last week that they are "highly confident" the offer will be approved once it submits details of its proposed investments to federal regulators.

[20533009] |Both offers are conditional on regulatory approvals and enough shares being tendered to give the bidders a majority of Connaught's shares outstanding.

[20533010] |Institut Merieux, which already holds a 12.5% stake in Connaught, said that at the close of business Thursday, 5,745,188 shares of Connaught and C$44.3 million face amount of debentures, convertible into 1,826,596 common shares, had been tendered to its offer.
[20533011] |At the close of business Thursday, Ciba-Geigy and Chiron said 11,580 common shares had been tendered to their offer.
[20533012] |At last report, Connaught had 21.8 million shares outstanding.

[20533013] |Separately, the Ontario Supreme Court said it will postpone indefinitely a ruling on the lawsuit launched by the University of Toronto against Connaught in connection with the Merieux bid.

[20533014] |In a statement prepared by lawyers for the university and Connaught, the parties said they agreed that as a result of reaching a C415 million research accord, "It is unnecessary that there be a judgment on the merits {of the case} at this time."

[20533015] |Lawyers for the two sides weren't immediately available for comment.

[20533016] |The university had sought an injunction blocking Connaught's board from recommending or supporting an offer for the company by Merieux.

[20534001] |Conseco Inc. said it is calling for the redemption on Dec. 7 of all the 800,000 remaining shares outstanding of its $1.875 Series A convertible preferred stock at $26.805 a share.

[20534002] |The insurance concern said all conversion rights on the stock will terminate on Nov. 30.
[20534003] |Until then, Conseco said the stock remains convertible into common stock at the rate of 1.439 shares of common stock for each share of preferred stock, which is equivalent to a conversion price of $17.50 a common share.
[20534004] |In New York Stock Exchange trading Friday, Conseco closed at $19.50, down 25 cents.

[20535001] |Centerior Energy Corp. said the Ohio Water Development Authority approved terms for two series of tax-exempt bonds to finance a water-pollution control and solid-waste disposal facilities.

[20535002] |The authority will issue a total of $446.5 million of pollution-control revenue bonds.
[20535003] |Proceeds of the sale will go to Centerior's operating subsidiaries to finance the projects, located at a nuclear unit located near Cleveland.

[20535004] |The bonds will be issued for a term of 34 years at an interest rate of 8%.
[20535005] |Goldman, Sachs & Co. is the underwriter.

[20536001] |General Motors Corp.'s GMC Truck division put a $750 cash incentive on its 1990 full-sized Jimmy and Suburban trucks.

[20536002] |The program, which runs through Jan. 4, also offers low-rate financing in lieu of the cash rebate.

[20537001] |After days of intense but fruitless negotiations, a federal judge last week threatened to convert William Herbert Hunt's Chapter 11 personal bankruptcy case into a Chapter 7 liquidation.

[20537002] |Judge Harold C. Abramson raised the possibility after talks to end a feud between two major creditors failed and all three reorganization plans in the case ran into roadblocks.

[20537003] |If the case is converted to Chapter 7, what remains of the oil tycoon's once-vast estate -- now believed to have a value of less than $125 million -- would be sold off quickly with most of the proceeds going to the Internal Revenue Service, whose claim for $300 million in back taxes has priority in the case.
[20537004] |Hundreds of smaller creditors could get nothing, according to attorneys involved.

[20537005] |While admitting such a move would be "devastating" to most creditors, Judge Abramson told a courtroom filled with nearly two dozen attorneys that he was concerned about the toll mounting legal bills will take on Mr. Hunt's shrinking estate and about the fact that, following voting by creditors, none of the reorganization plans appeared to be viable in their present form.

[20537006] |"It would be a shame to have a Chapter 7 after all the progress in this case," said Judge Abramson.
[20537007] |Under Chapter 11 of the Federal Bankruptcy Code, a company continues to operate under protection from creditors' lawsuits while it works out a plan to pay its debts.
[20537008] |Under Chapter 7, the assets of a company are sold off to pay creditors.

[20537009] |Despite his reluctance to take the latter step, the judge indicated he would move quickly after hearing testimony later this week in the bitter dispute between Manufacturers Hanover Trust Co. and Minpeco S.A., a minerals concern owned by the Peruvian governmemt.

[20537010] |The Manufacturers Hanover Corp. unit, which is seeking repayment of a $36 million loan, has asked the court to give its claim priority over that of Minpeco, which won a $132 million judgment against Mr. Hunt, his brother Nelson Bunker Hunt and other defendants last year in a case stemming from their alleged attempts to corner the silver market in

[20537011] |While claiming that penalties, legal fees and interest have driven the value of its claim to more than $250 million, Minpeco has agreed to settle for an allowed claim of as much as $65.7 million.
[20537012] |But even that is disputed by Manufacturers Hanover which, in alliance with the IRS, contends that Minpeco has already collected more than its actual damages from other defendants in the silver-conspiracy case.

[20537013] |Under prodding from Judge Abramson, a Minpeco executive flew in from Peru last week to talk directly with executives from Manufacturers Hanover on a settlement.
[20537014] |Despite long private sessions in both New York and Dallas, the two sides ended the week "6,000 miles and many dollars apart," according to attorney Hugh Ray, who represents Manufacturers Hanover.
[20537015] |Meanwhile, inside the courtroom, the judge said he would fine attorneys for the two creditors $50 every time they referred to each other with terms such as "liar" or "slime."

[20537016] |All three major creditors -- the IRS, Minpeco and Manufacturers Hanover -- voted against and effectively doomed a reorganization plan proposed by Mr. Hunt.
[20537017] |A reorganization plan proposed jointly by the IRS and Manufacturers Hanover was stalled by a negative vote from Minpeco.
[20537018] |The mineral concern's own reorganization plan met a similar fate after opposition from the IRS and Manufacturers Hanover.
[20537019] |Neither plan is dead, however, and the judge could force creditors to accept some version of them after ruling on the Minpeco-Manufacturers Hanover dispute.

[20537020] |Meanwhile, settlement negotiations continue between Mr. Hunt and the IRS, which has already reached a tentative agreement with Nelson Bunker Hunt.
[20537021] |The two sides have been far apart on how much Herbert Hunt will continue to owe the government after his assets are sold.

[20538001] |Stuart E. Eizenstat, a partner in the Washington law firm of Powell, Goldstein, Frazer & Murphy, was named a director of this utility holding company, increasing board membership to 14.

[20539001] |Pacific First Financial Corp. said it signed a non-binding letter of intent to acquire the construction lending unit of Old Stone Bank of California.

[20539002] |Terms haven't been finalized, but the transaction is expected to close by year end, Pacific First said.

[20539003] |Old Stone's construction lending portfolio includes about $250 million in real-estate loans outstanding.
[20539004] |The unit has 30 employees in four California offices, the company said.

[20539005] |Pacific First owns Pacific First Federal Savings Banks and other financial services firms.

[20540001] |General Electric Co.'s rail-car leasing unit completed the $178.5 million purchase of similar businesses from Leucadia National Corp. and Brae Corp., 74%-owned by Leucadia, the sellers said.

[20540002] |The buyer was GE Capital Railcar Services, Chicago, a major owner of railway equipment and part of the GE Capital operations.

[20540003] |Leucadia, New York, estimated it had a pre-tax gain on the transaction of $57 million, including its part of Brae's gain.
[20540004] |Because of tax-loss carry-forward, Leucadia said it expects to escape taxes on "a substantial portion of the gain."

[20540005] |The estimated gain for Brae is $15 million, including a tax credit of $7 million, the sellers said.
[20540006] |"The credit for income taxes is a result of having provided deferred income taxes applicable to the sold assets at the higher income tax rates in effect in prior years," the sellers said.

[20541001] |Automatic Data Processing Inc. plans to redeem on Nov. 16 its $150 million of 6.5% convertible subordinated debentures due March 1, 2011.

[20541002] |The computing-services concern will pay $1,059.04 for each $1,000 face amount of debt.
[20541003] |The conversion price for the debentures is $41.725 a share.
[20541004] |In New York Stock Exchange composite trading Friday, Automatic Data closed at $46.50 a share, down $2.25.

[20541005] |If all the debt is converted to common, Automatic Data will issue about 3.6 million shares; last Monday, the company had nearly 73 million shares outstanding.

[20541006] |Automatic Data is redeeming the bonds because the after-tax cost of the interest on the bonds is higher than the dividend yield on the common, a spokesman said.

[20542001] |Dow Jones & Co. extended its tender offer of $18 a share, or about $576 million, for the 33% of Telerate Inc. that it doesn't already own until 5 p.m. EST, Nov. 6.

[20542002] |The offer, which Telerate's two independent directors have rejected as inadequate, previously had been scheduled to expire at midnight Friday.
[20542003] |Dow Jones said it extended the offer to allow shareholders time to review a supplement to the Dow Jones tender offer circular that it mailed last Friday.

[20542004] |The supplement contains various information that has been filed with the Securities and Exchange Commission since Dow Jones launched the offer on Sept. 26, but it doesn't change the terms and conditions of the offer except to extend its expiration date.

[20542005] |In Delaware Chancery Court litigation, Telerate has criticized Dow Jones for not disclosing that Telerate's management expects the company's revenue to increase by 20% annually, while Dow Jones based its projections of Telerate's performance on a 12% revenue growth forecast.
[20542006] |In the tender offer supplement, Dow Jones discloses the different growth forecasts but says it views the 20% growth rate "as a hoped-for goal" of Telerate's management "and not as a realistic basis on which to project the company's likely future performance."

[20542007] |Telerate shares fell 50 cents on Friday to close at $20 each in New York Stock Exchange composite trading.
[20542008] |Dow Jones shares also fell 50 cents to close at $36.125 in Big Board composite trading.

[20542009] |Dow Jones has said it believes the $18-a-share price is fair to Telerate's minority shareholders.
[20542010] |Late last week, representatives of Dow Jones and Telerate began negotiations about the terms of the offer, but those talks didn't result in any changes in the offer.

[20542011] |Telerate provides information about financial markets through an electronic network.
[20542012] |Dow Jones, which owns 67% of Telerate, publishes The Wall Street Journal, Barron's magazine, community newspapers and operates financial news services and computer data bases.

[20543001] |Chamberlain Manufacturing Corp. won a $25.8 million Army contract for 155mm artillery shell casings.

[20543002] |Avondale Industries Inc. received a $13.5 million Navy contract for ship spare parts.

[20544001] |Air & Water Technologies Corp. completed the acquisition of Falcon Associates Inc., a Bristol, Pa., asbestos-abatement concern, for $25 million of stock.

[20544002] |Air & Water, which provides environmental services and systems, paid about 1.4 million of its shares for Falcon.
[20544003] |In American Stock Exchange composite trading Friday, Air & Water closed unchanged at $17.50.

[20544004] |At July 31, Air & Water had nearly 10 million shares outstanding.

[20545001] |The Canadian pig herd totaled 10,674,500 at Oct. 1, down 3% from a year earlier, said Statistics Canada, a federal agency.

[20545002] |Sows for breeding and bred gilts totaled 1,070,000, down 2% from a year ago.

[20545003] |(Jacksonville, Fla.) -- Charles Bates, president, chief executive and chief operating officer will resign from these positions and the board effective Oct. 31.

[20545004] |Norman J. Harrison, chairman, will succeed him as chief executive.
[20545005] |Roger L. Sutton, executive vice president, was appointed as the new president and chief operating officer.
[20545006] |Kerry P. Charlet will become executive vice president, and retain his positions as chief financial officer and treasurer.

[20546001] |Upset over the use of what it says are its exclusive trademarks, Hells Angels Motorcycle Corp. is fighting back -- in court.
[20546002] |Concord New Horizons Corp., creators of a 1988 movie called Nam Angels, used the gang's name and trademarks without authorization, the not-for-profit corporation says in a complaint filed in federal court.

[20546003] |Nam Angels depicts a group of the cycle gang's members on a mercenary mission to Viet Nam during the war years.

[20546004] |In addition to being broadcast on cable television, the movie also is being distributed on videocassettes, the suit alleges in seeking unspecified damages.
[20546005] |Also named in the suit is Media Home Entertainment Inc. of Culver City, Calif., its parent, Heron Communications Inc., and Broadstar Television of Los Angeles, holders of the copyright on the movie.

[20546006] |A Concord spokeswoman called the suit "unfounded" but declined to comment further.

[20546007] |Besides being upset with the film's use of the Hells Angels name and logos, the Angels are angry with their depiction in the movie.

[20546008] |"There is absolutely no way our board or membership would have approved the portrayal of the Hells Angels in this movie," said George Christie, president of the club's Ventura chapter.
[20546009] |"Portrayal of our members as disloyal to each other is totally contrary to the most important values of our organization -- loyalty and trust."

[20546010] |Nam Angels shows Angels fighting with each other and also depicts them as showing no remorse when a member is killed.
[20546011] |Both of these actions aren't characteristic of real Hells Angels, Mr. Christie said.

[20546012] |Hells Angels was formed in 1948 and incorporated in 1966.
[20546013] |In addition to 26 chapters in the U.S., there are 40 chapters in foreign countries.

[20547001] |Douglas H. Miller, self-employed in the oil and gas securities business, was named chairman of this oil and gas exploration company, filling a vacancy.
[20547002] |Mr. Miller, who has been a Coda director, also was named chief executive officer, succeeding Ted Eubank, who remains president and chief operating officer.

[20548001] |Lawrence M. Gressette Jr., president, was elected to the additional posts of chairman and chief executive officer of this utility holding company, effective Feb. 1, 1990.
[20548002] |The 57-year-old Mr. Gressette, who was also elected chairman and chief executive of all Scana subsidiaries, succeeds John A. Warren.
[20548003] |Mr. Warren will remain on the company's board.

[20549001] |The American Stock Exchange said a seat was sold for $165,000, unchanged from the previous sale Oct. 13.

[20549002] |Seats on the Amex currently are quoted at $151,000 bid and $200,000 asked.

[20550001] |The world had a big yuk recently when the Soviets reported a rash of UFO landings, one of them bringing tall aliens who glowed in the dark to Voronezh.
[20550002] |It is the opinion of Timothy Good, author of "Above Top Secret: The World UFO Cover-Up" (Quill/William Morrow, 592 pages, $12.95), that the world laughs too fast.

[20550003] |Here is a bible for UFO watchers, complete with pictures of people who say they've had personal relationships with aliens.
[20550004] |One photo shows a woman sporting a scar she says was made by a laser beam (a low-caliber weapon, from the looks of the wound).

[20550005] |So far anyway, our alien visitors seem more intent on brightening our skies than pulverizing us.
[20550006] |Mr. Good devotes much serious space to the events of Feb. 25, 1942, when American gunners spotted strange lights in the sky above Los Angeles.
[20550007] |Air-raid sirens sounded the alarm at 2:25 a.m., summoning 12,000 air wardens to duty.
[20550008] |Soon all hell broke loose.

[20550009] |Ground batteries, targeting an odd assortment of aircraft traveling at highly unusual speeds, opened up a furious fusillade.
[20550010] |The sky filled with 12.8-pound shells, several of which fell back to Earth, destroying homes and buildings.
[20550011] |When the smoke cleared, six people were dead (three from heart attacks), and everyone wondered what in the world they were shooting at.

[20550012] |Mr. Good, who documents these things as best he can, provides an official explanation in the form of a memorandum from Chief of Staff George C. Marshall to President Roosevelt: "1,430 pounds of ammunition," he wrote his commander in chief, were expended on "unidentified aircraft," flying at speeds as slow as 200 mph and elevations between 9,000 and 18,000 feet.

[20550013] |Well, thousands of Californians on the scene insisted the ammo had been uselessly aimed at a large, hardy UFO, but you will just have to make your own decision about such sightings.
[20550014] |One thing's for sure: There have been a ton of them, and greater beings than the editors of the National Enquirer have shown interest.
[20550015] |Gerald Ford, a fairly down-to-earth fellow, once sent a letter to the chairman of the Armed Services Committee recommending that "there be a committee investigation of the UFO phenomenon.
[20550016] |I think we owe it to the American people to establish credibility regarding UFOs and to produce the greatest possible enlightenment on the subject."

[20550017] |Jimmy Carter went further in a 1976 campaign promise: "If I become president, I'll make every piece of information this country has about UFO sightings available to the public, and the scientists.
[20550018] |I am convinced that UFOs exist because I have seen one. . . ."

[20550019] |But you know about campaign promises.
[20550020] |It still doesn't look like governments are coughing up everything they know.
[20550021] |Still, despite their efforts to convince the world that we are indeed alone, the visitors do seem to keep coming and, like the recent sightings, there's often a detail or two that suggests they may actually be a little on the dumb side.

[20550022] |For instance, witnesses in Voronezh say the pinheaded behemoths and their robot friend, after strolling around the city park, left behind some rocks.
[20550023] |Now why, you have to ask yourself, would intelligent beings haul a bunch of rocks around the universe?
[20550024] |Or land in Russia so often.
[20550025] |In a 1961 incident, a Soviet mail plane disappeared off the radar screen just after radioing its position to ground control in Sverdlovsk.
[20550026] |A search party soon found the unscathed aircraft in a forest clearing much too small to have allowed a conventional landing.
[20550027] |What's more, the seven mail personnel aboard were missing.

[20550028] |Again, you have to ask the obvious question: Why would intelligent beings kidnap seven Soviet mailmen?

[20550029] |Speculation as to the nature of aliens will no doubt continue until we wake up one morning to find they've taken over "The Today Show," the way they overwhelm an entire town in Jack Finney's "Invasion of the Body Snatchers" (Fireside/Simon & Schuster, 216 pages, $8.95).
[20550030] |Maybe some of our talk-show hosts and anchors have already been taken over?
[20550031] |The point of this 1955 novel, which spawned two movies, is that the soulless pod people replicated by alien plants are virtually indistinguishable from human folks.

[20550032] |Another guy who thinks they're out there and closing fast is Whitley Strieber, whose new novel, "Majestic" (Putnam, 317 pages, $18.95), takes a look at a reported 1947 UFO crash near the Roswell Army Air Field in a New Mexico desert.
[20550033] |Mr. Strieber knows a lot about aliens.
[20550034] |He even had sex with one -- sort of, and not intentionally -- as readers learned in his "Communion" (a book recently described in the New York Times as a "nonfiction best seller").

[20550035] |The way Mr. Strieber tells it in his earnest prose, the intelligence officer who found the craft's strange debris was forced by the government to call the flower-inscribed scraps parts of a weather balloon.
[20550036] |The apparent crash became top secret, and the alien creatures went away upset with the rude ways of human beings.
[20550037] |We lost our chance to communicate with sweet-natured visitors "about four feet tall {who} looked as though they were made of puffed-up marshmallow."

[20550038] |Mr. Shiflett is an editorial writer for the Rocky Mountain News.

[20551001] |Trustcorp Inc. will become Society Bank & Trust when its merger is completed with Society Corp. of Cleveland, the bank said.

[20551002] |Society Corp., which is also a bank, agreed in June to buy Trustcorp for 12.4 million shares of stock with a market value of about $450 million.
[20551003] |The transaction is expected to close around year end.

[20552001] |When the economy stumbled in the mid-1970s, Akzo NV fell out of bed.

[20552002] |Towering overcapacity in the synthetic fiber business, which accounted for half of the Dutch chemical company's sales, led to huge losses and left Akzo's survival in doubt.
[20552003] |It wasn't until the early 1980s that Akzo nursed itself back to health.

[20552004] |Now, as a new downturn in the chemical industry looms, Akzo says it is in far better shape to cope.
[20552005] |Investment analysts generally agree.

[20552006] |Aside from slashing costs and investing heavily in its plants, Akzo has spent 3.9 billion guilders ($1.88 billion) on acquisitions since 1983 to give it better balance.
[20552007] |During the same period, the company has sold about 1.6 billion guilders of assets.

[20552008] |The fibers business, whose products go into textiles, carpeting and myriad industrial uses, now accounts for only 20% of Akzo's sales.
[20552009] |"We have definitely become less cyclical," Syb Bergsma, executive vice president-finance, said in an interview.

[20552010] |Still, Akzo hasn't yet found a way to achieve another goal: a large presence in the U.S. market for prescription drugs.
[20552011] |Mr. Bergsma said prices for U.S. pharmaceutical companies remain too high, making it unlikely that Akzo will pursue any major acquisitions in that area.
[20552012] |But he said Akzo is considering "alliances" with American drug companies, although he wouldn't elaborate.

[20552013] |An indication of Akzo's success in reshaping itself will come Thursday when it reports third-quarter results.
[20552014] |Analysts expect the company to show profit of about 225 million guilders, up 9% from 206.3 million guilders a year earlier.

[20552015] |A bigger test will come next year if, as many analysts expect, bulk chemical prices slump in Europe.

[20552016] |"Maybe Akzo can surprise the investment world a bit," said Jaap Visker, an analyst at Amsterdam-Rotterdam Bank NV.
[20552017] |He figures Akzo is likely to be one of the few major chemical companies to show profit growth next year.
[20552018] |The bank projects Akzo will show per-share earnings of 24 guilders in 1990, up from an estimated 22.5 guilders for this year and the 20.9 guilders reported for 1988.

[20552019] |At James Capel & Co. in London, analyst Jackie Ashurst notes that Akzo is less exposed than many of its rivals to the most volatile chemical products.
[20552020] |For example, Akzo has only minor petrochemical operations, is small in plastics and doesn't make fertilizers.

[20552021] |Thus, while Akzo profited less than many rivals from the boom of recent years in petrochemicals and plastics, it has less to fear from the current slump.

[20552022] |The company is exposed to bulk chemicals, however.
[20552023] |Although bulk-chemical prices have begun falling in the U.S., they are generally stable in Europe, Mr. Bergsma said.
[20552024] |A decline may come in the first half of 1990, he said, but the market doesn't appear on the verge of a severe downturn.

[20552025] |To reduce the danger of such pricing cycles, Akzo has invested heavily in specialty chemicals, which have highly specific industrial uses and tend to produce much higher profit margins than do bulk chemicals.
[20552026] |Akzo's biggest move in this area was the 1987 acquisition of Stauffer Chemical Co.'s specialty chemical business for $625 million.

[20552027] |In a less glamorous field, Akzo is the world's biggest producer of industrial salt, used as a raw material for the chemical industry as well as for such tasks as melting ice.
[20552028] |Akzo also makes products derived from salt, such as chlorine and caustic soda.

[20552029] |In the fibers division, profit remains weak, largely because of persistent overcapacity.
[20552030] |But Akzo is still slimming down: It recently announced plans to eliminate about 1,700 fiber-related jobs in the Netherlands and West Germany.

[20552031] |Although the polyester and rayon markets remain mostly bleak, Akzo has high hopes for some emerging fiber businesses, such carbon fibers and aramid, extremely strong fibers used to reinforce tires and metals and to make such products as bullet-proof vests.

[20552032] |Akzo's Twaron aramid fiber is a distant second to Du Pont Co.'s Kevlar, which dominates the market.
[20552033] |Mr. Bergsma said world-wide industry sales of aramid fibers are expected to total about $500 million this year.
[20552034] |Sales growth of 10% a year seems possible, he said, and Akzo expects its Twaron business to become profitable in 1990.

[20552035] |Akzo also has spent heavily on acquisitions in paints, auto finishes and industrial coatings.
[20552036] |In August, for example, it completed the $110 million acquisition of Reliance Universal Inc., a U.S. maker of industrial coatings for wood, metals and plastics, from Tyler Corp.
[20552037] |Mr. Bergsma said Akzo is likely to see strong profit growth from coatings as it realizes cost savings and other benefits from its greater scale.

[20552038] |For Akzo's drug business, where profits have shown litle change for the past five years, Mr. Bergsma predicted moderate profit growth.
[20552039] |Akzo is the leading seller of birth-control pills in Europe but is still seeking regulatory approvals to enter that market in the U.S. and Japan.
[20552040] |Mr. Bergsma said Akzo hopes to have approval to sell its Marvelon pill in the U.S. in 1992.

[20552041] |Akzo also has small operations in diagnostic tests, generic drugs and veterinary products.
[20552042] |Veterinary products are showing especially strong growth, Mr. Bergsma said.
[20552043] |Among the leading products is a flu shot for horses.

[20553001] |We're sorry to see Nigel Lawson's departure from the British government.
[20553002] |He is a politician with the courage of true conviction, as in summarily sacking exchange controls and in particular slashing the top rate of income taxation to 40%.
[20553003] |But in the end his resignation as Chancellor of the Exchequer may be a good thing, especially if it works as he no doubt intends -- by forcing Prime Minister Thatcher and her counterparts elsewhere to confront the genuine intellectual issues involved.

[20553004] |The early omens, we admit, scarcely suggest so wholesome an outcome.
[20553005] |The Fleet Street reaction was captured in the Guardian headline, "Departure Reveals Thatcher Poison."
[20553006] |British politicians divide into two groups of chickens, those with their necks cut and those screaming the sky is falling.
[20553007] |So far as we can see only two persons are behaving with a dignity recognizing the seriousness of the issues: Mr. Lawson and Sir Alan Walters, the counterpoint of the Chancellor's difficulties, who also resigned as personal adviser to Mrs. Thatcher.

[20553008] |The problem is that on the vital issue of monetary policy and exchange rates, conservative, free-market economists divide into at least three incompatible camps.
[20553009] |There are the strict monetarists, who believe that floating exchange rates free an economy to stabilize its price level by stabilizing the monetary aggregates.
[20553010] |There are the supply-side globalists, who seek to spread the advantages of a common currency through fixed exchange rates.
[20553011] |And there are the twin-deficit Keynesians, who predict/advocate devaluations to balance trade flows.
[20553012] |This is a problem not only for Prime Minister Thatcher but for President Bush, as shown in the ongoing bickering over the dollar between the Federal Reserve and the Mulford Treasury.

[20553013] |In the British case, Mr. Lawson is the closest thing in London to a supply-side globalist.
[20553014] |He not only slashed marginal tax rates, initially sparking fresh growth in Britain, but he wanted to regulate monetary policy by targeting exchange rates, indeed joining the European Monetary System.
[20553015] |While no doubt agreeing with Mr. Lawson on everything else, Sir Alan is a dyed-in-the-wool monetarist, inclined to defend floating rates to the death.

[20553016] |To make matters even more confusing, the earlier U.S. experience made clear that Mr. Lawson's tax cuts would have profound effects on Britain's international accounts and the value of sterling.
[20553017] |They increased the after-tax rate of return and made Britain a far more attractive place to invest, producing sudden capital inflows.
[20553018] |By accounting definitions, this had to produce a sudden trade deficit.
[20553019] |As in the U.S., it also produced a sudden burst in the demand for sterling, that is a surge in the sterling monetary aggregates, M-Whatever.

[20553020] |At this point, the options were: Crunch money to stop the boost in the aggregates, as Sir Alan surely advised, and forget the soaring pound.
[20553021] |To push the pound even lower trying to cure the trade deficit, a policy Britain has repeatedly proved disastrous.
[20553022] |Or to supply enough money to meet the increased demand and stabilize the exchange rate, as the Chancellor argued, and ensure the permanence of this policy by joining the EMS.

[20553023] |Faced with a similar situation, Paul Volcker let the dollar soar, (though monetary aggregates also grew so rapidly monetarists issued egg-on-the-face warnings of inflation).
[20553024] |But this devastated the U.S. manufacturing sector, laying the seeds of protectionism.
[20553025] |Mr. Lawson, though not allowed to join the EMS, chose to "shadow" the deutsche mark.
[20553026] |He reaped inflation along with rapid growth, no doubt validating Sir Alan's predictions in the Prime Minister's mind.
[20553027] |But more recently, the pound has been falling with high inflation, which has also seemed almost impervious to the high interest rates Mr. Lawson deployed to stop it.

[20553028] |So the British experience presents a genuine puzzle that reaches far beyond the shores of Albion.
[20553029] |We had been soliciting opinions on it long before Mr. Lawson's resignation, and offer some of the collection for the benefit of his successor and one-time deputy, John Major.
[20553030] |To begin with, we should note that in contrast to the U.S. deficit, Britain has been running largish budget surpluses.
[20553031] |In pursuit of this mystery, Keynesian adepts and twin-deficit mavens need not apply.

[20553032] |We should also add Mr. Lawson's own explanation, as we understand it.
[20553033] |Unlike the U.S., Britain never achieved even a momentary reduction in real wages.
[20553034] |The wage stickiness, which OECD studies confirm is particularly high in Britain, gives its economy a structural bias toward inflation.
[20553035] |Inflation is easier to spark and harder to control.

[20553036] |We should also concede that in the British experience the monetarist cause regains some of the credibility it lost in the U.S. experience.
[20553037] |Nearby Paul Craig Roberts, a distinguished supply-sider with monetarist sympathies, argues the case for Sir Alan.
[20553038] |Perhaps the fiscal shock of tax cuts is after all best absorbed by floating rates, though of course in the event Mr. Lawson resigned over whether to support a weak pound, not restrain a strong one.
[20553039] |We recall that Mr. Roberts not only chides the Chancellor for being too easy because of a desire to constrain sterling, but also led the chorus saying that Mr. Volcker was too tight when he let the dollar rise.
[20553040] |Somewhere in between there must be a golden mean, perhaps measured by M-Whatever, but perhaps measured by purchasing power parity.

[20553041] |The globalists tend to think Mr. Lawson ran onto technical reefs.
[20553042] |In fixing rates the choice of initial parities is crucial, for example, and perhaps he picked the wrong pound-DM rate.
[20553043] |For that matter, perhaps he fixed to the wrong currency.
[20553044] |We sympathize with Mrs. Thatcher's reluctance to tie her currency to one governed by the domestic political imperatives of West Germany.
[20553045] |Perhaps the shock would have been less if they'd fixed to another low-tax, deregulated, supply-side economy.

[20553046] |Alan Reynolds of Polyconomics adds his suspicion that the unrecognized inflationary culprit is the budget surplus.
[20553047] |Those who can shake Keynesian ghosts out of their heads might recognize that the retirement of gilts for cash is equivalent to an expansionary open-market operation, indeed, it is the definition of an open market operation to expand the money supply.
[20553048] |Mr. Reynolds also notes that since British banks have no reserve requirements, high interest rates are less likely to curb inflation than to cause recession.

[20553049] |We would add that in political terms, Mrs. Thatcher's problem was failing to decide between the Chancellor and her adviser.
[20553050] |In the end, neither policy was followed, and instead of learning anything we are left with a mystery.
[20553051] |In particular, "shadowing" a currency is anything but fixing; it is an open announcement that the exchange rate target has no credibility.
[20553052] |All the more so when strong voices are heard opposing the policy.
[20553053] |Better to have a true monetarist policy, just for the experience.

[20553054] |So Mr. Lawson had to resign.
[20553055] |In the end his move was sparked by remarks in excerpts from Sir Alan's autobiography in The American Economist, a 10,000-circulation academic journal.
[20553056] |But it was the underlying situation that became intolerable.

[20553057] |What Mr. Major and Mrs. Thatcher will do now remains to be seen.
[20553058] |They confront stubborn inflation and a sagging economy, that is to say, stagflation.
[20553059] |This cannot be solved by provoking a further downturn; reducing the supply of goods does not solve inflation.
[20553060] |Our advice is this: Immediately return the government surpluses to the economy through incentive-maximizing tax cuts, and find some monetary policy target that balances both supply and demand for money (which neither aggregates nor interest rates can do).
[20553061] |This was the version of supply-side economics that, in the late 1970s and early '80s, worked in America and world-wide to solve a far more serious stagflation than afflicts Britain today.

[20554001] |Ogilvy & Mather, whose declining profitability prompted its takeover by WPP Group earlier this year, will see its profit margins bounce back to the "11.5% range" in 1990, said Graham Phillips, the agency's new chairman-elect.

[20554002] |The ad agency's pretax profit margins were slightly under 10% at the time of the takeover, according to analysts; London-based WPP's goal is to increase margins to 12%.

[20554003] |Mr. Phillips made his comments during an interview detailing his plans for the agency.
[20554004] |British-born, the 24-year Ogilvy veteran was named last week to succeed Kenneth Roman, who is leaving by year's end to take a top post at American Express, an Ogilvy client.
[20554005] |Surrounded by stacks of paper, two computers and photos of himself boating and flying, Mr. Phillips laid out several changes he hopes to make at the agency.

[20554006] |First and foremost, Mr. Phillips said he hopes to improve client service.
[20554007] |Ogilvy under the fastidious Mr. Roman gained a reputation as occasionally being high-handed in its treatment of clients, of preaching what strategy a client should -- indeed, must -- follow.
[20554008] |And some of its top client-service executives, including Mr. Phillips, were promoted to the point they were saddled with administrative duties, with little time to see clients.

[20554009] |But Mr. Phillips recently freed himself up to spend more time with clients by delegating much of his administrative work to a deputy.
[20554010] |He also plans to get to know clients that Mr. Roman was closer to, such as Lever Brothers, American Express and Seagram.
[20554011] |The two men are planning joint visits to a number of clients to attempt to smoothly hand over the reins.
[20554012] |"Clients want to see more of our senior people involved in the business -- not once a month, but two or three times a week," he said.

[20554013] |Mr. Phillips also hopes to finally implement a reorganization announced earlier this year but put on hold by the WPP takeover.
[20554014] |The reorganization is supposed to make one-stop shopping -- buying advertising, public relations and design all in one place, or "Ogilvy Orchestration" in Ogilvyspeak -- a reality.

[20554015] |Under the reorganization, Ogilvy plans to name one executive on each account as a "client service director" to work as the client's single contact for all those services.
[20554016] |"There is little or no integration of our work, quality is spotty, there is no single focus," Mr. Phillips complained to staffers in March, when the reorganization was announced.
[20554017] |Now Mr. Phillips says he hopes to have the new system in place for several clients -- including American Express, American Telephone & Telegraph and Ryder -- by year's end.

[20554018] |Industry executives and analysts are divided on whether Mr. Phillips is up to the task.
[20554019] |He isn't as well-known to clients as is Mr. Roman.
[20554020] |Under his watch, office politicking was often rampant in the agency's New York operation and the office there has had a dismal new-business record for more than a year.
[20554021] |And while last week the agency hired a top Chiat/Day/Mojo executive, Bill Hamilton, to try to bolster its work, "Graham has to get the revenue of that New York office moving," says James Dougherty, an analyst with County NatWest Securities.

[20554022] |The one thing Mr. Phillips clearly does have going for him is continuity, although it isn't certain if that will be enough.
[20554023] |As Mr. Dougherty says, "The last thing they need is enormous disruption at the top . . . and Graham is obviously a long-term member of the Ogilvy Mafia, as we call it."

[20554024] |Mr. Phillips and Mr. Roman are indeed quite similar in substance, if not in style.
[20554025] |While Mr. Roman is a workaholic detailsman, Mr. Phillips would rather delegate, leaving him time for his interests outside the office.
[20554026] |Mr. Roman, by contrast, seems rarely to cut loose at all, although he did appear at Ogilvy's Halloween party Friday decked out in duck feet and a duck hat, costumed as a "lame duck."

[20554027] |Mr. Phillips said the company's expected margin improvement will be all but inevitable, given that the company's profitability was dragged down this year by an expensive move to luxurious, oversized new New York headquarters.
[20554028] |The move, budgeted at about $7 million, actually came in at about $10 million, he said.

[20554029] |But margins will be helped, too, by some other cost-saving steps.
[20554030] |Ogilvy eliminated the mail room staff, closed the executive dining room and, after the takeover, let go half a dozen financial executives.
[20554031] |WPP, which assumes financial control of its businesses in a hands-on way, instituted a new financial system and plans to sublet some floors in Ogilvy's new headquarters building to outsiders.
[20554032] |The fact that the agency will now be part of a U.K. company, under British accounting rules, will also make the profit picture look better.

[20554033] |Y&R's Klein Steps Down

[20554034] |Arthur Klein, president of Young & Rubicam's New York office, stepped down "temporarily" in the wake of charges by a federal grand jury in New Haven, Conn., that he, the agency and another top executive bribed Jamaican tourist officials to win its account in 1981.

[20554035] |In an internal memo, Alex Kroll, the agency's chairman, said Mr. Klein decided to remove himself to minimize "negative reaction" from prospective clients and others and to prepare for his defense.
[20554036] |"The fact that he is in the process of defending himself against the present charges could conceivably have an adverse impact on Y&R," Mr. Kroll wrote.
[20554037] |He said Mr. Klein will return to his post at the end of the trial "at which he will be vindicated."

[20554038] |Mr. Klein will work with Mr. Kroll on some of the agency's joint venture activities and acquisitions while the case is pending.
[20554039] |Peter Georgescu, president of Y&R's ad operations, will assume Mr. Klein's day-to-day role.

[20554040] |Wells Rich's New Partner

[20554041] |Wells, Rich, Greene named Cheryl Heller as an executive vice president and creative partner in its image group, which concentrates on fashion and visually oriented advertising.

[20554042] |Ms. Heller, 38, had headed up Boston agency Heller/Breene, a unit of WCRS.
[20554043] |The agency, with about $35 million in billings, will be dissolved, with some of its staffers absorbed by WCRS's Della Femina McNamee unit in Boston, Ms. Heller said.
[20554044] |She said it was too early to say what would happen to its clients, including Reebok and Apple.

[20554045] |At Wells Rich, Ms. Heller will concentrate on accounts that include Philip Morris's Benson & Hedges cigarette brand, which relies on print ads, Ms. Heller's specialty.
[20554046] |As previously reported, the account is troubled, with Philip Morris asking Backer Spielvogel Bates, Ogilvy & Mather, and possibly others to try their hand at developing new creative work.
[20554047] |Wells Rich declined to comment on the status of the account, as did the other agencies.

[20555001] |Waxman Industries Inc. said holders of $6,542,000 face amount of its 6 1/4% convertible subordinated debentures, due March 15, 2007, have elected to convert the debt into about 683,000 common shares.

[20555002] |The conversion price is $9.58 a share.

[20555003] |The company said the holders represent 52% of the face amount of the debentures.

[20555004] |Waxman sells a variety of hardware products for the home repair market.

[20556001] |R.H. Macy & Co., the closely held department store chain, said in a financial filing Friday that its sales for the fiscal fourth quarter ended July 29 were up 10% to $1.59 billion against $1.44 billion a year earlier.

[20556002] |Comparable store sales for the quarter were up 7.3%.

[20556003] |The net loss for the quarter was $43.1 million against a year-earlier loss of $106 million.
[20556004] |The loss in the fourth quarter of 1988 reflected in part expenses for an unsuccessful bid for Federated Department Stores Inc., as well as the restructuring of some of its department store operations.

[20556005] |For the year, sales were up 5.6% to $6.97 billion compared with $6.61 billion in fiscal 1988.
[20556006] |Sales for both years reflect 12-month performances for each year of I. Magnin, Bullock's, and Bullocks Wilshire.
[20556007] |Macy acquired those three businesses in May 1988.
[20556008] |On a comparable store basis, including the new acquisitions for both years, sales for fiscal 1989 were up 1.9%.

[20556009] |Macy reported a net loss for fiscal 1989 of $53.7 million compared with a net loss of $188.2 million for fiscal 1988.

[20556010] |The company's earnings before interest, taxes and depreciation, which bondholders use a measurement of the chain's ability to pay its existing debt, increased 11% in fiscal 1989 to $926.1 million from $833.6 million.
[20556011] |The $833.6 million figures includes the new acquisitions.
[20556012] |Excluding those businesses, earnings before interest, taxes and depreciation for 1988 would have been $728.5 million.

[20556013] |As of Feb. 1, 1990, the Bullocks Wilshire stores will operate as I. Magnin stores.
[20556014] |Altogether, Macy and its subsidiaries own or lease 149 department stores and 61 specialty stores nationwide.

[20556015] |Although management led a leveraged buy-out of R.H. Macy in July 1986, the company still makes financial filings because of its publicly traded debt.
[20556016] |The company estimates its total debt at about $5.2 billion.
[20556017] |This includes $4.6 billion of long-term debt, $457.5 million in short-term debt, and $95.7 million of the current portion of long-term debt.

[20556018] |In a letter to investors, Chairman Edward S. Finkelstein wrote that he expects the company to "benefit from some of the disruption faced by our competitors.
[20556019] |While our competitors are concerned with their financial viability and possible ownership changes, we will be concentrating on buying and selling merchandise our customers need and want."

[20556020] |Mr. Finkelstein is apparently referring to B. Altman and Bonwit Teller, two New York retailers that have recently filed for Chapter 11 bankruptcy protection, as well as the retail chains owned by financially troubled Campeau Corp.
[20556021] |Those chains include Bloomingdale's, which Campeau recently said it will sell.
[20556022] |Other retail properties for sale include Saks Fifth Avenue and Marshall Field, retailers now owned by B.A.T PLC, the British tobacco conglomerate.

[20556023] |In his letter, Mr. Finkelstein also referred to the recent San Francisco earthquake.
[20556024] |Mr. Finkelstein flew to San Francisco the day after the earthquake, and found that 10 to 12 of his company's stores had sustained some damage, including the breakage of most windows at the I. Magnin store on Union Square.

[20556025] |"The volume and profit impact on our fiscal first quarter will not be positive, but looking at the whole fiscal year, we don't see the effect as material," wrote Mr. Finkelstein.

[20557001] |RJR Nabisco Inc. said it agreed to sell its Baby Ruth, Butterfinger and Pearson candy businesses to Nestle S.A.'s Nestle Foods unit for $370 million.

[20557002] |The sale, at a higher price than some analysts had expected, helps the food and tobacco giant raise funds to pay debt and boosts Nestle's 7% share of the U.S. candy market to about 12%.

[20557003] |The candy businesses had sales of about $154 million last year, which was roughly 12% of total revenue for RJR's Planters LifeSavers unit, according to a memorandum distributed by RJR's owner, Kohlberg Kravis Roberts & Co., to bankers last December.

[20557004] |The Nestle acquisition includes a candy plant in Franklin Park, Ill., which employs about 800 workers.

[20557005] |The sale, which had been expected, is part of KKR's program to pay down $5 billion of a $6 billion bridge loan by February.
[20557006] |Roughly $2 billion of that debt has already been repaid from previous asset sales, and RJR expects to use another $2 billion from the pending, two-part sale of most of its Del Monte unit.
[20557007] |That sale, however, could still fall through if financing problems develop.
[20557008] |Thus, it remains crucial for RJR to obtain top dollar for its smaller assets like the candy brands.

[20557009] |Louis Gerstner Jr., chairman and chief executive officer of New York-based RJR, called the sale a "significant step" in the company's divestiture program, as well as a "a strategic divestiture."
[20557010] |Since KKR bought RJR in February for $25 billion of debt, it has agreed to sell nearly $5 billion of RJR assets.
[20557011] |RJR's executives have said they will dispense with certain brands, in particular, that aren't leaders in their markets.
[20557012] |"RJR Nabisco and Planters LifeSavers will concentrate more on our own core businesses," Mr. Gerstner said Friday.

[20557013] |Baby Ruth and Butterfinger are both among the top-selling 15 chocolate bars in the U.S., but RJR's overall share of the roughly $5.1 billion market is less than 5%.
[20557014] |Nestle's share of 7% before Friday's purchases is far below the shares of market leaders Hershey Foods Corp. and Mars Inc., which have about 40% and 36% of the market, respectively.

[20557015] |"This means Nestle is now in the candybar business in a big way," said Lisbeth Echeandia, publisher of Orlando, Fla.-based Confectioner Magazine.
[20557016] |"For them, it makes all kinds of sense.
[20557017] |They've been given a mandate from Switzerland" to expand their U.S. chocolate operations.
[20557018] |Nestle S.A. is based in Vevey, Switzerland.

[20557019] |The new candy bars, "make an important contribution to our Nestle Foods commitment to this very important strategic unit," said C. Alan MacDonald, president of Nestle Foods in Purchase, N.Y.

[20558001] |Aetna Life & Casualty Co.'s third-quarter net income fell 22% to $182.6 million, or $1.63 a share, reflecting the damages from Hurricane Hugo and lower results for some of the company's major divisions.

[20558002] |Catastrophe losses reduced Aetna's net income by $50 million, including $36 million from Hugo.
[20558003] |Last year catastrophe losses totaled $5 million, when net was $235.5 million, or $2.07 a share.
[20558004] |The year-earlier results have been restated to reflect an accounting change.

[20558005] |The insurer has started processing claims from the Northern California earthquake nearly two weeks ago.
[20558006] |But because these claims are more difficult to evaluate and have been coming in more slowly, the company has no estimate of the impact of the earthquake on fourth-quarter results.

[20558007] |In New York Stock Exchange composite trading Friday, Aetna closed at $60, down 50 cents.

[20558008] |In the latest quarter, Aetna had a $23 million loss on its auto/homeowners line, compared with earnings of $33 million last year.
[20558009] |Profit for its commercial insurance division fell 30% to $59 million, reflecting higher catastrophe losses and the price war in the property/casualty market for nearly three years.

[20558010] |However, Aetna's employee benefits division, which includes its group health insurance operations, posted a 34% profit gain to $106 million.

[20558011] |Third-quarter results included net realized capital gains of $48 million, which included $27 million from the sale of Federated Investors in August and a $15 million tax credit.

[20558012] |In the nine months, net rose 4.3% to $525.8 million or $4.67 a share, from $504.2 million, or $4.41 a share, last year.

[20559001] |Out of the mouths of revolutionaries are coming words of moderation.

[20559002] |Here, at a soccer stadium near the black township of Soweto yesterday, were eight leaders of the African National Congress, seven of whom had spent most of their adult lives in prison for sabotage and conspiracy to overthrow the government.
[20559003] |Here were more than 70,000 ANC supporters, gathering for the first ANC rally inside South Africa since the black liberation movement was banned in 1960.
[20559004] |Here was the state security appartus poised to pounce on any words or acts of provocation, let alone revolution.

[20559005] |But the words that boomed over the loudspeakers bore messages of peace, unity, negotiation and discipline.
[20559006] |"We stand for peace today and we will stand for peace tomorrow," said Walter Sisulu, the ANC's former secretary general who, along with five of his colleagues, served 26 years in prison before being released two weeks ago.
[20559007] |Some members of the huge crowd shouted "Viva peace, viva."

[20559008] |These are curious times in South African politics.
[20559009] |The government and the ANC, the bitterest of enemies, are engaged in an elaborate mating dance designed to entice each other to the negotiating table.
[20559010] |Pretoria releases the ANC leaders, most of whom were serving life sentences, and allows them to speak freely, hoping that the ANC will abandon its use of violence.
[20559011] |The ANC leaders speak in tones of moderation, emphasizing discipline, hoping the government will be encouraged to take further steps, such as freeing Nelson Mandela, the most prominent ANC figure, and unbanning the organization.

[20559012] |The government of President F.W. de Klerk is using this situation to improve its international image and head off further economic sanctions.
[20559013] |Meanwhile, the many organizations inside the country that back the ANC are taking the opportunity to regain their strength and mobilize their supporters even though the state of emergency, which has severely curtailed black opposition, remains in force.

[20559014] |The result is that the unthinkable and illogical are happening.
[20559015] |Six months ago, government approval for an ANC rally was inconceivable.
[20559016] |Equally inconceivable is that the ANC, given the chance to hold a rally, would extend a hand, albeit warily, to the government.
[20559017] |In a message read out at the rally, exiled ANC President Oliver Tambo, who can't legally be quoted in South Africa, said the country was at a crossroads and that Mr. de Klerk "may yet earn a place among the peacemakers of our country" if he chooses a "path of genuine political settlement."

[20559018] |Still, this doesn't mean that either the government or the ANC is changing stripes -- or that either has moved significantly closer to the other.

[20559019] |The government may ease repression in some areas, but it still keeps a tight grip in others.
[20559020] |For instance, it releases Mr. Sisulu without conditions, yet his son, Zwelakhe, a newspaper editor, is restricted to his home much of the day and isn't allowed to work as a journalist.

[20559021] |The ANC vows to keep up pressure on the government.
[20559022] |Speakers yesterday called on foreign governments to increase sanctions against Pretoria and urged supporters inside the country to continue defying emergency restrictions and racial segregation, known as apartheid.
[20559023] |"We cannot wait on the government to make changes at its own pace," Mr. Sisulu said.

[20559024] |Because the ANC remains banned, both the government, which approved the rally, and the organizers, who orchestrated it, denied it was an ANC rally.
[20559025] |They both called it a "welcome home" gathering.
[20559026] |Nevertheless, an ANC rally by any other name is still an ANC rally.

[20559027] |The recently released leaders sat high atop a podium in one section of the stadium stands.
[20559028] |Behind them was a huge ANC flag and an even bigger sign that said "ANC Lives, ANC Leads."
[20559029] |Next to them was the red flag of the outlawed South African Communist Party, which has long been an ANC ally.
[20559030] |In the stands, people waved ANC flags, wore ANC T-shirts, sang ANC songs and chanted ANC slogans.

[20559031] |"Today," said Mr. Sisulu, "the ANC has captured the center stage of political life in South Africa."

[20559032] |As a police helicopter circled overhead, Mr. Sisulu repeated the ANC's demands on the government to create a climate for negotiations: Release all political prisoners unconditionally; lift all bans and restrictions on individuals and organizations; remove all troops from the black townships; end the state of emergency, and cease all political trials and political executions.
[20559033] |If these conditions are met, he said, the ANC would be prepared to discuss suspending its guerrilla activities.

[20559034] |"There can be no question of us unilaterally abandoning the armed struggle," he said. "
[20559035] |To date, we see no clear indication that the government is serious about negotiations.
[20559036] |All their utterances are vague."

[20559037] |Echoing a phrase from Mr. de Klerk, Mr. Sisulu said, "Let all of us who love this country engage in the task of building a new South Africa.

[20560001] |When Westinghouse Electric Corp. shuttered its massive steam turbine plant in Lester, Pa., three years ago, it seemed like the company had pulled the plug on its century-old power generation business.

[20560002] |But now Westinghouse is enjoying a resurgence in demand for both steam and combustion turbines and may even join the growing legion of independent electric producers.
[20560003] |And with its new venture with Japan's Mitsubishi Heavy Industries Ltd., announced last week, it is poised to penetrate growing markets overseas.

[20560004] |For the first time since the mid-1970s, Westinghouse this year has seen a significant increase in orders for power plants.
[20560005] |Most are from independent producers instead of regulated utilities, and Westinghouse believes it will ride a wave of demand stretching over the next six years.

[20560006] |Analysts agree, predicting that the revived market could significantly boost Westinghouse's bottom line in coming years.
[20560007] |"Westinghouse's earnings could be materially enhanced in the mid-1990s or sooner," says Russell L. Leavitt, of Salomon Brothers Inc.
[20560008] |The company expects a need for 140,000 megawatts of new generation in the U.S. over the next decade.
[20560009] |Already this year, it has received orders for four 150-megawatt advanced combustion turbines from Florida Power & Light Co. and for two 300-megawatt plants from Intercontinental Energy Corp., among others.

[20560010] |Westinghouse's own role as a supplier also is changing.
[20560011] |In the past, the company usually took token equity positions in power plants it supplied as a "kicker" to close deals.

[20560012] |But last June's annnouncement that Westinghouse would put up all of the $70 million to build a new 55-megawatt plant could herald a new age.
[20560013] |Westinghouse's plant will provide electrical power to the Southern California Edison Co. and backup power and steam to the U.S. Borax & Chemical Co.

[20560014] |"We haven't decided on a strategy yet, but we could become an independent producer depending on whether we're the developer or just the supplier," says Theodore Stern, executive vice president of the company's energy and utility systems group.

[20560015] |At the same time, Westinghouse hopes its venture with Mitsubishi will help fend off growing competition, particularly in the U.S., from such European competitors as Asea Brown Boveri AG, Siemens AG, and British General Electric Co.
[20560016] |Under the agreement, Westinghouse will be able to purchase smaller combustion turbines from its Japanese partner, and package and sell them with its own generators and other equipment.

[20560017] |Westinghouse also jointly will bid on projects with Misubishi, giving it an edge in developing Asian markets.
[20560018] |In addition, the two companies will develop new steam turbine technology, such as the plants ordered by Florida Power, and even utilize each other's plants at times to take advantage of currency fluctuations.

[20560019] |"Even though we'll still compete against Mitsubishi, we can also work jointly on some projects, and we'll gain a lot of sourcing flexibility," Mr. Stern contends.

[20560020] |The Westinghouse-Mitsubishi venture was designed as a non-equity transaction, circumventing any possible antitrust concerns.
[20560021] |Westinghouse carefully crafted the agreement because the Justice Department earlier this year successfully challenged a proposed steam turbine joint venture with Asea Brown Boveri.

[20560022] |It is expected that the current surge in demand for new power will be filled primarily by independent producers which, unlike utilities, aren't regulated and therefore don't need government approval to construct new plants.
[20560023] |Westinghouse expects about half of its new orders for turbines to come from independent producers for at least the next six years.

[20560024] |Despite shutdowns of the company's Lester and East Pittsburgh plants, the company believes it has sufficient capacity to meet near-term demand with its much smaller and more efficient manufacturing facilities in North Carolina.

[20560025] |Still, Westinghouse acknowledges that demand from independent producers could evaporate if prices for fuel such as natural gas or oil rise sharply or if utilities, which have been pressured by regulators to keep down rates, are suddenly freed to add significant generating capacity.

[20560026] |Even if that scenario occurs, Westinghouse figures it is prepared.
[20560027] |The company already is gearing up for a renaissance of nuclear power even though it hasn't received an order for a domestic nuclear plant in a decade.
[20560028] |John C. Marous, chairman and chief executive officer, says he expects a commercial order by 1995 for the company's AP600 nuclear power plant, which is under development.
[20560029] |"Once we see an order, we expect it'll be on line by 2000.

[20561001] |Among the things I learned covering the World Series these past few weeks is that the Richter scale, which measures earthquakes, isn't like the one in your bathroom.
[20561002] |A quake that measures two on the Richter isn't twice as severe as a "one" -- it's 10 times worse.
[20561003] |A "three" is 10 times 10 again, and so on.
[20561004] |That put the "seven" of Oct. 17 in perspective for me.
[20561005] |Think I'll buy one of those "I Survived" T-shirts after all.

[20561006] |By Richterian standards, the show that the Oakland Athletics put on Friday and Saturday nights, in putting a mercifully swift end to the game's Longest Short Series, rated somewhere between a 10 and an 11.
[20561007] |The boys with the white elephants on their sleeves might not have made the earth move much, but they certainly did some impressive things with baseballs.

[20561008] |The Pale Pachyderms propelled six of 'em out of the unfriendly confines of Candlestick Park during the two games en route to 13-7 and 9-6 wins over the San Francisco Giants.
[20561009] |Combined with their two pre-quake victories, way back on Oct. 14 and 15 (the scores were 5-0 and 5-1, remember?), that gave them a sweep of the best-of-seven series.

[20561010] |The joke here is that the Giants lost by de fault.
[20561011] |That's geologically correct, but a trifle unfair otherwise.
[20561012] |They showed up, but didn't -- or couldn't -- challenge.

[20561013] |They led for nary an inning in the four games, and managed to stir their fans only once.
[20561014] |That came in the seventh inning of Game Four when, trailing 8-2, they scored four times and brought their big heat -- Will Clark and Kevin Mitchell -- to the plate with one out and a runner on.
[20561015] |But Clark flied out to short right field and Mitchell's drive to left was caught on the warning track by Rickey Henderson as 62,000 sets of lungs exhaled as one.

[20561016] |"I went out to Todd {Burns, the A's reliever} and told him that we weren't gonna let this guy beat us," said Oakland catcher Terry Steinbach of the decisive confrontation with Mitchell, the National League's reigning home-run king.
[20561017] |"I told him to make Mitchell reach for everything, and that's what we did.
[20561018] |The ball he hit wasn't a strike.
[20561019] |If it had been, he mighta hit it out."

[20561020] |But if the A's hadn't won in four, they would have prevailed in five, or six, or seven.
[20561021] |The best team won this Series, which is more unusual than it may sound.
[20561022] |Baseball ain't football, where the good teams beat up on the bad ones.
[20561023] |The best baseball teams win six of 10 games and the worst win four of 10.
[20561024] |Without becoming overly contentious, allow me to suggest that several recent champions of the world according to us (as in U.S.) might not have ranked No. 1 in many polls.
[20561025] |That list includes last season's champs, the Los Angeles Dodgers, who rode a miracle home run by Kirk Gibson and two faultless pitching performances by Orel Hershiser to a five-game triumph over a bewitched, bothered Oakland crew.

[20561026] |These A's, however, got few grades as low as B on their 1989 report card.
[20561027] |They led the Major Leagues in regular-season wins with 99 and flattened the Toronto Blue Jays four games to one for the American League pennant before stomping their cross-bay rivals.
[20561028] |The pithiest testimony to their domination of the just-concluded tournament came from Giants' manager Roger Craig after his team had fallen in Game Three to a five-home-run barrage that tied a 61-year-old Series record.
[20561029] |Asked what he would do differently on the morrow, Craig allowed that he might play his outfielders deeper, "maybe on the other side of the fence."

[20561030] |The A's offensive showing in the Series got an A, as in awesome.
[20561031] |Their 85 total bases broke a record for a four-game set, and their nine home runs tied one.
[20561032] |Eight Oakland players hit homers, with centerfielder Dave Henderson getting two, both on Friday.
[20561033] |Rickey Henderson, the do-everything leadoff man, had nine hits and set or tied four-game Series marks for triples (2) and stolen bases (3).

[20561034] |The sole A not to homer was cleanup hitter Mark McGwire, their regular-season leader with 33, and he contributed five hits plus a diving fielding play on a ground ball in Game Three that stopped a Giant rally while the issue still was in doubt.
[20561035] |"Think I'll redo my image -- get this changed to a glove," quipped the big first baseman Saturday night, fingering the gold bat he wears on a neck chain.

[20561036] |Even with that power show, though, the Oakland Series' star, certified by the Most Valuable Player award, was a pitcher, Dave Stewart.
[20561037] |He shut out the Giants on five hits in Game One, and allowed three runs on five hits in seven innings Friday after the 12-day break caused by the earthquake.

[20561038] |Stewart's honor was a nice note on a couple of grounds.
[20561039] |One was that, despite his 62 regular-season wins over the past three seasons in the Land Beyond the Late News, he has been overshadowed by his more-muscular mates and missed out on prizes that might have been his due.
[20561040] |The other is that he's an Oakland native, and lifted residents' spirits by his visits to quake-hit areas last week.

[20561041] |Afterward, as the A's toasted their victory with beer (they dispensed with traditional champagne showers in deference to the quake victims), Stewart said he thought his championship-team ring would outshine his individual trophy.
[20561042] |"Give me four or five more Series with these guys, and I don't care if I ever win a Cy Young," he said, in reference to baseball's best-pitcher award.

[20561043] |Indeed, the possibility of an A's ring cycle, a/k/a a dynasty, was a major topic of post-game discussion Saturday, so much so that Sandy Alderson, the team's general manager, felt obliged to dampen it.
[20561044] |"People change, teams change," he cautioned.
[20561045] |"It's easier to get worse than better in this game."

[20561046] |He might have added an interesting historical fact: The last Series sweep, by the Cincinnati Reds, came in 1976, which also was the first year of baseball player free agency.
[20561047] |It was widely predicted that free agency would allow the glamorous, "big market" teams to monopolize the best talent, but quite the opposite has occurred: Twelve different clubs have won titles in the 14 seasons since its advent.
[20561048] |The number includes such unstylish burgs as, well, Oakland.

[20562001] |The rationale for responding to your customers' needs faster than the competition can is clear: Your company will benefit in terms of market share, customer satisfaction and profitability.
[20562002] |In fact, managers today are probably more aware of speed as a competitive variable than ever before.
[20562003] |However, for many, managing speed does not come naturally.

[20562004] |"Most of us grew up believing in the axioms `Haste makes waste' and `Don't cut corners,' ideas that seem to run counter to the concept of managing speed," says Dean Cassell, vice president for product integrity at Grumman Corp.
[20562005] |"But in the real world, you learn that speed and quality are not a trade-off.
[20562006] |Speed is a component of quality -- one of the things we must deliver to satisfy customers."

[20562007] |Companies that actually market speed as part of their service train their managers to lead and participate in teams that increase speed and improve quality in everyday operations.
[20562008] |Managers learn to spot opportunities to increase customer satisfaction through speed, and shift some responsibility for analyzing, improving and streamlining work processes from themselves to teams of employees.

[20562009] |One team at the Federal Express Ground Operations station in Natick, Mass., focused on a particularly time-sensitive operation: the morning package sort.
[20562010] |Every morning, tractor-trailer trucks arrive at the Natick Ground Station from Boston's Logan Airport, carrying the day's package load.
[20562011] |In peak periods that load may include 4,000 pieces.
[20562012] |The packages must be sorted quickly and distributed to smaller vans for delivery, so couriers can be on the road by 8:35.
[20562013] |No customer is present at the morning package sort, but the process is nevertheless critical to customer satisfaction.

[20562014] |"We're committed to deliver the customer's package by a stated time, usually 10:30," notes Glenn Mortimer, a Federal Express courier who led the Natick team.
[20562015] |"The sooner our vans hit the road each morning, the easier it is for us to fulfill that obligation."

[20562016] |Following a problem-solving formula used by teams throughout Federal Express, members of the Natick team monitored their morning routine, carefully noting where and when the work group's resources were used effectively and where they were idle, waiting for others upstream in the process to send packages their way.

[20562017] |"We suspected there was downtime built into our process.
[20562018] |But we didn't know just where it was until we completed our data gathering," Mr. Mortimer says.
[20562019] |"We used the data to redesign our sorting system and put our resources where they could do the most good."
[20562020] |The team even created a points system to identify those couriers and subgroups that were doing the most to reduce package-sort cycle time.
[20562021] |Winners of the friendly competition earn a steak dinner out with their spouses.

[20562022] |"Monitoring shows that the Natick team's new system really does reduce cycle time for the morning package sort," reports James Barksdale, chief operating officer at Federal Express.
[20562023] |"The vans leave at least 15 minutes earlier, on average, than they used to.
[20562024] |And service levels have increased to the point where they're consistently above 99%."

[20562025] |A cross-functional team at Union Carbide's Tonawanda, N.Y., facility, which produces air-separation plants, followed a similar path to reduce manufacturing cycle time.

[20562026] |"The team included craftsmen from the shop floor as well as engineering, scheduling and purchasing personnel," reports Alan Westendorf, director of quality.
[20562027] |"First, they produced a flowchart detailing the process by which an air-separation plant actually gets built.
[20562028] |Then they identified snags in the process."

[20562029] |The Tonawanda team determined that holdups for inspections were the main problem and identified which kinds of delays involved critical inspections and which were less critical or could be handled by workers already on the line.
[20562030] |The team then proposed modifications in their work process to management.

[20562031] |"The streamlined manufacturing process benefits our customers in at least two ways," Mr. Westendorf concludes.
[20562032] |"First, we have better quality assurance than ever, because the people building the product have taken on more responsibility for the quality of their own work.
[20562033] |Second, we trimmed more than a month off the time required to deliver a finished product."

[20562034] |At Grumman's Aircraft Systems Division, a cross-functional team reduced the cycle time required to produce a new business proposal for an important government contract.
[20562035] |The team was composed of representatives from engineering, manufacturing, corporate estimating, flight test, material, quality control, and other departments.

[20562036] |"We needed contributions from all these departments to generate the proposal," says Carl Anton, configuration-data manager for Grumman's A-6 combat aircraft program.
[20562037] |"But instead of gathering their input piecemeal, we formed the team, which reached consensus on the proposal objectives and produced a statement of work to guide all the functions that were involved."

[20562038] |Armed with this shared understanding and requisite background information, each department developed its specialized contribution to the proposal, submitting data and cost estimates on a closely managed schedule.
[20562039] |"We cleared up questions and inconsistencies very quickly, because the people who had the skills and perspective required to resolve them were part of the task team," Mr. Anton explains.

[20562040] |The team trimmed more than two months from the cycle time previously required to develop comparable proposals.
[20562041] |"The team eliminated the crisis mentality that proposal deadlines can generate.
[20562042] |The result was a more thoughtful, complete and competitive proposal," Mr. Anton concludes.

[20562043] |The successes achieved at Federal Express, Union Carbide and Grumman suggest that managing speed may be an underutilized source of competitive advantage.
[20562044] |Managers in all three companies recognize speed as a component of quality and a key to customer satisfaction.
[20562045] |They effectively lead team efforts to reduce cycle time.
[20562046] |And they prepare all their people to increase the speed and improve the quality of their own work.

[20562047] |Mr. Labovitz is president of ODI, a consulting firm in Burlington, Mass.

[20563001] |Home taping of pre-recorded music cuts into record industry revenues, but banning home taping would hurt consumers even more.

[20563002] |That's the conclusion of an independent report prepared by the Office of Technology Assessment at the request of the House and Senate judiciary committees.
[20563003] |The report is to be released today.

[20563004] |The report says the availability of such advanced analog recording equipment as cassette recorders doesn't seem to increase the quantity of home copying.
[20563005] |That finding, the report says, casts doubt on the record industry's contention that the new generation of digital recording equipment will inevitably lead to wholesale abuse of copyrighted material by home tapers.

[20563006] |The longstanding position of the Recording Industry Association of America, a trade group based in Washington, D.C., is that record companies, performers, songwriters and music publishers need to be remunerated by government-imposed fees on the sale of blank tapes and recording equipment to make up for royalties lost to home taping.

[20563007] |"I think it is a nail in the coffin in any royalty tax proposal," says Gary Shapiro, vice president for government and legal affairs of the Electronic Industries Association in Washington.
[20563008] |"What {the report} shows is everything we've been saying for the past eight or nine years -- that audio taping is the best thing to happen for the recording industry.
[20563009] |The people who tape the most buy the most."

[20563010] |Trish Heimers, a spokesperson for RIAA says her organization hasn't received a copy of the completed report yet and has no immediate comment.

[20563011] |A recent agreement between the recording industry and electronics manufacturers requires that any digital audio tape, or DAT, recorder sold in the U.S. have a built-in device that restricts its ability to make second copies from DAT tape copies of digital compact disks.
[20563012] |But the disappointing sales of DAT machines here and abroad so far have not seemed to warrant the three years of legal wrangling that went into the agreement.

[20563013] |Under current copyright laws, it is considered "fair use" to reproduce copyrighted material for one's personal use or for use by one's family or friends, while copying for purposes of resale or profit is prohibited.
[20563014] |A survey contained in the 291-page report, "Copyright and Home Copying: Technology Challenges the Law," found that most people consider home copying for such personal use a "right" -- a right, moreover, that was exercised by 40% of Americans over the age of 10 in the past year.

[20563015] |The study says that the "ambiguous legal status" of home copying makes it "appropriate to examine the effects on consumers, as well as on industry."
[20563016] |Reports by the Office of Technology Assessment don't prescribe any specific legislative action but suggest a range of options that Congress may pursue.

[20563017] |The study also says that advent of new communications technologies makes "an explicit congressional definition of the legal status of home copying more desirable in order to reduce legal and market uncertainties and to prevent de facto changes to copyright law through technology," and says that finding an "appropriate balance of harms and benefits is a political decision, not a technical one.

[20564001] |Switzerland's most famous raider says he isn't one.
[20564002] |Werner K. Rey believes fortunes are made by being friendly.

[20564003] |And in little more than a decade of being friendly -- and at the same time rocking the staid Swiss business community with some U.S.-style wheeling and dealing -- the 46-year-old Mr. Rey has grown from a modest banker to a billionaire.
[20564004] |He achieved this in part with an uncanny talent for getting his foot peacefully in the door of established European companies.

[20564005] |His latest coup: September's masterminding of the five billion Swiss-franc ($3.07 billion) merger between Adia S.A., the world's second-largest temporary employment agency, and Inspectorate International S.A., a Rey-controlled product-inspection company.

[20564006] |Shareholders must approve the merger at general meetings of the two companies in late November.
[20564007] |But approval is almost certain since Mr. Rey and a friendly Adia management are in control.

[20564008] |After the transaction, Mr. Rey estimates the value of his 20% stake in the new company, to be held by his Omni Holding AG, will be about 1 billion Swiss francs.
[20564009] |This will be his return on an original investment of between 50 million Swiss francs and 80 million Swiss francs.
[20564010] |Mr. Rey bought a controlling stake in Inspectorate for 18 million Swiss francs in 1982, building up the little-known engineering company with European and U.S. acquisitions.

[20564011] |"I like to succeed," says Mr. Rey during a recent morning of working at home, which he also likes.
[20564012] |Home is an estate with green meadows opening onto Lake Geneva and a low-slung house whose rooms overlook the water and offer a view of the French Alps.
[20564013] |In the corner of his reception room is a delicate antique desk piled high with dossiers.
[20564014] |There is a small Renoir on the wall.
[20564015] |Zurich-based magazine Bilanz lists Mr. Rey as having a fortune of about 1.5 billion Swiss francs.
[20564016] |Writes Bilanz: "No one in Switzerland ever came so far so fast . . .
[20564017] |He was simply the first in this country to realize that treasures were just lying around waiting to be picked up.
[20564018] |In short: Rey found companies with weak earnings but rich assets."

[20564019] |However, the Swiss financial press in general, as well as many analysts, have had a hard time making up their minds about Mr. Rey and his un-Swiss ways.

[20564020] |For Switzerland's most prestigious newspaper, Neue Zuercher Zeitung, Mr. Rey seems destined to remain the "former Bally raider," an image that has proved hard to overcome.

[20564021] |In 1976, as an upstart in the eyes of Switzerland's establishment, Mr. Rey laid the foundations of his present-day prominence with an unheard-of raid on Bally, the country's traditional shoemaker.

[20564022] |Sitting beside a banker at a luncheon in London, where he was working as a financial consultant, he learned that a large packet of Bally's shares was up for sale.
[20564023] |Looking into Bally, he could hardly believe what he saw: a company with enormous real-estate holdings in major European cities and a market capitalization of 28 million Swiss francs; it had 7,000 employees.

[20564024] |Investing four million Swiss francs earned from his financial transactions and two million Swiss francs from his parents and his wife, Mr. Rey acquired 20% of Bally's shares.

[20564025] |But such tactics were alien to Switzerland in 1976, and still aren't common because of share restrictions that companies are allowed to maintain.
[20564026] |Eventually, Mr. Rey was forced to sell his Bally shares to the weapons maker Oerlikon-Buehrle Holding AG as establishment pressure grew on this hostile move into the Swiss old boys' network.

[20564027] |Mr. Rey made 50 million Swiss francs on the sale.
[20564028] |"Bally was not an unfriendly takeover," he insists.
[20564029] |Buying from willing shareholders makes an unfriendly takeover impossible, Mr. Rey contends.
[20564030] |"I bought from willing shareholders."

[20564031] |Nevertheless, Mr. Rey has been very careful since then to make sure his moves are welcome.
[20564032] |And he has worked to shed his raider image.

[20564033] |In 1979, his career as an industrialist began with the acquisition of the Swiss metals works Selve, based in Thun.
[20564034] |With the nonferrous metals business undermined in Switzerland by tough foreign competition and high domestic costs, this looked like a dull undertaking.
[20564035] |But Mr. Rey brought about a merger in the next few years between the country's major producers; the increased efficiency has perked up the industry.

[20564036] |Three years later, machinery producer Ateliers de Constructions Mecaniques de Vevey S.A. was to become part of the Rey empire.
[20564037] |Once again the company's future looked less than rosy.
[20564038] |But after restructuring under new management, the profits began rolling in.

[20564039] |A major boost to Mr. Rey's respectability among the Swiss came in 1986 when he sold 60% of his Phibro Bank to the conservative Swiss cantonal banks.
[20564040] |They renamed it Swiss Cantobank and are using it to expand abroad.
[20564041] |In 1987, Mr. Rey bested leading publishing houses to take over Switzerland's Jean Frey AG, a major producer of magazines and newspapers.

[20564042] |And with the recent acquisition of 30% of Winterthur-based machinery manufacturer Gebrueder Sulzer AG, Mr. Rey has enjoyed the status of white knight.
[20564043] |Sulzer preferred him to financier Tito Tettamanti, whose secretive raid on the company's stock had led to a bitter battle.

[20564044] |Meanwhile, as such strategic investments have mounted, the merchant-banking arm of Mr. Rey's Omni Holding has been busily buying and selling dozens of companies, often after a financial or corporate restructuring.

[20564045] |Today, this branch of Mr. Rey's empire runs under the name Omnicorp Offering Services and handles mergers and acquisitions, placement of securities and real estate.
[20564046] |In its portfolio are such diverse companies as United Kingdom-based Air Europe; Checkrobot Inc., a U.S. company that makes supermarket checkout machines; Norment Industries, a U.S. manufacturer of securities systems; Com Systems Inc., a U.S. regional telephone company; and major real-estate projects in the U.S. and Europe.

[20564047] |For financial analysts, reading Omni's accounts is a tough challenge.
[20564048] |"Companies move in and out," says Helga Kern of KK Swiss Investment.

[20564049] |Financial analysts note that Mr. Rey is attracted to companies that are undervalued on the basis of their real-estate interests.
[20564050] |In August, Omni unexpectedly bought Inspectorate's 80% stake in Harpener AG of West Germany, a land-rich company.
[20564051] |The internal transaction within the Rey empire puzzled Harpener's small shareholders, but analysts say it makes sense for Inspectorate-Adia to focus on its main businesses of product inspection and temporary help.

[20564052] |Mr. Rey says the move is yet another example of his conservatism.
[20564053] |He explains that companies with real estate give "security."
[20564054] |The real estate can be used, he points out, as guarantees for bank loans for corporate development.

[20564055] |He says he wants to "influence" but not "manage" companies.
[20564056] |"I don't want to be like {financier Alan} Bond and the other Australians.
[20564057] |I don't want companies to be built around me as a person.
[20564058] |I want them to stand alone.

[20565001] |Ultimate Corp. signed a letter of intent to market Hewlett-Packard Co. minicomputers, the companies said.

[20565002] |Ultimate expects the 3 1/2-year agreement to generate $100 million in sales, but it wouldn't estimate profit.

[20565003] |Under terms of the pact, Ultimate, a computer-systems concern, will market the full line of HP 9000 series 800 multipleuser minicomputers.
[20565004] |Hewlett-Packard is based in Palo Alto, Calif.

[20566001] |In the second step of a reorganization that began earlier this year, Boeing Co. said it will create a Defense and Space Group to consolidate several divisions.

[20566002] |Meanwhile, Boeing officials and representatives of the Machinists union met separately last night with a federal mediator in an attempt to break the month-old strike that has shut the aerospace giant's assembly lines at a time when it has an $80 billion backlog of jetliner orders.
[20566003] |The two sides were scheduled to meet with the mediator this morning.

[20566004] |Machinists already have rejected a package that would provide a 10% pay raise plus bonuses over the three-year life of the contract.
[20566005] |Boeing has said repeatedly it won't expand its offer and the machinists have responded that the offer isn't good enough.

[20566006] |However, the resolve of some of the striking 57,000 machinists might be weakening.
[20566007] |About 1,000 strikers signed petitions last week calling for Boeing and Machinists representatives to schedule new meetings.
[20566008] |The two sides hadn't met since Oct. 18.

[20566009] |While Boeing's commercial business is booming, its military business is feeling the effects of a declining defense budget after a strong buildup during the Reagan presidency.
[20566010] |In May, the company consolidated its Aerospace and Electronics groups; the new Defense and Space Group will contain the Aerospace and Electronics division and Advanced Systems, both based in the Seattle area; Boeing Helicopters in Philadelphia; Boeing Military Airplanes in Wichita, Kan., and ArgoSystems in Sunnyvale, Calif.

[20566011] |B. Dan Pinick, president of Boeing Aerospace and Electronics, will become president of the new group, which will become operational Jan. 2.

[20566012] |In addition, Boeing said it also will reorganize all its work in Wichita into military and commercial divisions.
[20566013] |All of the changes will reduce its overhead and streamline operations, Boeing said.

[20566014] |Analysts agreed.
[20566015] |"It's a further step to better returns in the hemorrhaging defense business," said Steven Binder, an analyst with Bear, Stearns & Co. in New York.
[20566016] |"They had to do it."

[20566017] |Howard Rubel, an analyst with C.J. Lawrence, Morgan Grenfell Inc. in New York, said the shift reflects Boeing confidence in Mr. Pinick, described by Mr. Rubel as an expert on doing business with the military.
[20566018] |"His side of the business has been successful in a tough environment," Mr. Rubel said.

[20567001] |A two-day meeting of representatives of Cocom, the 17-nation group that oversees exports of sensitive goods to communist countries, didn't take any substantive decisions on trimming the list of items under controls.
[20567002] |Nor did it ease restrictions on exports to Poland and Hungary, according to U.S. officials who attended the talks.

[20567003] |The U.S. had been under pressure from several Cocom members, especially France, West Germany and Italy, to ease restrictions on some types of machine tools, which those countries argued were now widely available to East Bloc countries from non-Cocom members.
[20567004] |For several years some European countries have complained that outdated Cocom lists and restrictions served more to hamper their trade than to add to Western security.

[20567005] |Some countries also have been pressing for special treatment for Hungary and Poland as they move toward more democratic rule, just as special treatment had been agreed on for China.
[20567006] |But U.S. officials said representatives at the meeting decided that this was "a matter for further discussion at future meetings."
[20567007] |They added that "all of us (Cocom members) look at the changes in Hungary and Poland in a positive way, but a question of this scope deserves further discussion and study."
[20567008] |The officials also said the meeting agreed to continue treating China as a special case, despite the recent repression of dissent there, but to offer no further concessions.

[20567009] |The U.S. officials said that despite the rapid changes under way in Eastern Europe and the Soviet Union, all the Cocom members agreed on "the continuing need for this organization," which was founded 40 years ago at the start of the Cold War.
[20567010] |The officials said the meeting agreed to continue working toward "streamlining" Cocom's restricted products list, and to improve procedures for punishing companies that don't comply with the export restrictions.
[20567011] |The officials said this meeting "put in motion" procedural steps that would speed up both of these functions, but that no specific decisions were taken on either matter.

[20568001] |Unisys Corp.'s announcement Friday of a $648.2 million loss for the third quarter showed that the company is moving even faster than expected to take write-offs on its various problems and prepare for a turnaround next year.

[20568002] |At the same time, the sheer size of the loss, coupled with a slowing of orders, made some securities analysts wonder just how strong that turnaround will be at the computer maker and defense-electronics concern.

[20568003] |"Unisys is getting clobbered.
[20568004] |Just clobbered," said Ulric Weil, an analyst at Weil & Associates who had once been high on the company.
[20568005] |"The quarter was terrible, and the future looks anything but encouraging."

[20568006] |Unisys, whose revenue inched up 3.7% in the quarter to $2.35 billion from $2.27 billion in the year-earlier quarter, had an operating loss of about $30 million.
[20568007] |On top of that, the Blue Bell, Pa., concern took a $230 million charge related to the layoffs of 8,000 employees.
[20568008] |That is at the high end of the range of 7,000 to 8,000 employees that Unisys said a month ago would be laid off.
[20568009] |Unisys said that should help it save $500 million a year in costs, again at the high end of the previously reported range of $400 million to $500 million.

[20568010] |The company also took a write-off of $150 million to cover losses on some fixed-price defense contracts, as some new managers took a hard look at the prospects for that slow-growing business.
[20568011] |In addition, Unisys set up an unspecified reserve -- apparently $60 million to $70 million -- to cover the minimum amount it will have to pay the government because of its involvement in the defense-procurement scandal.
[20568012] |Unisys also noted that it paid $78.8 million in taxes during the quarter, even though tax payments normally would be minimal in a quarter that produced such a big loss.

[20568013] |The tax payments will leave Unisys with $225 million in loss carry-forwards that will cut tax payments in future quarters.
[20568014] |In addition, Unisys said it reduced computer inventories a further $100 million during the quarter, leaving it within $100 million of its goal of a reduction of $500 million by the end of the year.

[20568015] |Still, Unisys said its European business was weak during the quarter, a worrisome sign given that the company has relied on solid results overseas to overcome weakness in the U.S. over the past several quarters.

[20568016] |The company also reported slower growth in another important business: systems that use the Unix operating system.
[20568017] |That would be a huge problem if it were to continue, because Unisys is betting its business on the assumption that customers want to move away from using operating systems that run on only one manufacturer's equipment and toward systems -- mainly Unix -- that work on almost anyone's machines.

[20568018] |In addition, Unisys must deal with its increasingly oppressive debt load.
[20568019] |Debt has risen to around $4 billion, or about 50% of total capitalization.
[20568020] |That means Unisys must pay about $100 million in interest every quarter, on top of $27 million in dividends on preferred stock.

[20568021] |Jim Unruh, Unisys's president, said he is approaching next year with caution.
[20568022] |He said the strength of the world-wide economy is suspect, and doesn't see much revenue growth in the cards.

[20568023] |He also said that the price wars flaring up in parts of the computer industry will continue through next year.
[20568024] |He said the move toward standard operating systems means customers aren't locked into buying from their traditional computer supplier and can force prices down.
[20568025] |That, he said, is why Unisys is overhauling its whole business: It needs to prepare for a world in which profit margins will be lower than computer companies have been used to.

[20568026] |"We've approached this not as a response to a temporary condition in the industry but as a fundamental change the industry is going through," Mr. Unruh said.
[20568027] |"The information-systems industry is still going to be a high-growth business, and we're confident that we have tremendous assets as a company.
[20568028] |But we don't minimize the challenges of the near term."

[20568029] |Securities analysts were even more cautious, having been burned repeatedly on Unisys this year.
[20568030] |Some had predicted earnings of more than $4 a share for this year, up from last year's fully diluted $3.27 a share on earnings of $680.6 million.
[20568031] |But the company said Friday that it had losses of $673.3 million through the first nine months, compared with earnings a year earlier of $382.2 million, or $2.22 a share fully diluted, as revenue inched up 1.4% to $7.13 billion from $7.03 billion.
[20568032] |And Unisys is expected to do little better than break even in the fourth quarter.

[20568033] |So Steve Milunovich at First Boston said he is cutting his earnings estimate for next year to $2 a share from $3.
[20568034] |"I was feeling like I was too high to begin with," he said.

[20568035] |Mr. Weil of Weil & Associates said he will remain at $1 a share for next year but said he wonders whether even that low target is at risk.
[20568036] |"The break-even point for next year is much lower, but is it low enough?" he asked.

[20568037] |Reflecting the concern, Unisys stock fell a further 75 cents to $16.25 in composite trading Friday on the New York Stock Exchange.

[20569001] |If a TV weatherman gets butterflies facing the camera again after a questionable forecast, Donald H. Straszheim surely understands.
[20569002] |The chief economist of Merrill Lynch & Co. finds himself in such a position as he buzzes the Midwest on his first road trip since backpedaling on a major prediction.

[20569003] |Mr. Straszheim expects he will take some heat, and he's right.
[20569004] |Since the last time he traveled this way several months ago, he has recanted a series of bold forecasts of a recession.
[20569005] |In February 1988, for example, Merrill Lynch's weekly commentary announced that "the economy is likely to fall into recession in early 1989."

[20569006] |The forecasts were widely disseminated, and, in a splashy ad campaign launched in the summer of 1988, Merrill Lynch urged investors to buy bonds.
[20569007] |It said long-term interest rates, then above 9%, could drop to 7% by the end of 1989, so bonds, which benefit from falling rates, would be a good buy.
[20569008] |The firm also raised the percentage of bonds in its model portfolio from 40% to 45% and later to 55%.

[20569009] |But this September -- just when many market economists, including some at Merrill Lynch, believed that Mr. Straszheim was about to be proved right -- he took a detour if not a U-turn.
[20569010] |He softened the talk about a recession.
[20569011] |Now, in fact, he is predicting economic growth of 2.9% this year and 2.1% next year, a more optimistic outlook than the consensus of some four dozen top forecasters surveyed by Blue Chip Economic Indicators newsletter.

[20569012] |And, just recently, Merrill Lynch cut the recommended bondholdings back to 50%.
[20569013] |While such changes might sound minor, they aren't: Merrill Lynch manages or oversees some $300 billion in retail accounts that include everything from mutual funds to individual annuities.

[20569014] |Two well-known colleagues who believe Mr. Straszheim was right the first time are David Bostian Jr. and A. Gary Shilling, both of whom run their own New York research firms.
[20569015] |Mr. Bostian said in August that his macroeconomic index signaled recession.
[20569016] |Mr. Shilling, who was Merrill Lynch's chief economist from 1967 to 1971, has heralded a recession for months.
[20569017] |"My own personal opinion is that Don threw in the towel just about the time he should have doubled his bet," he says.

[20569018] |Now a rocky stock market and weak corporate profits may further threaten the economy.
[20569019] |And Mr. Straszheim conceded after a recent drop in manufacturing jobs that "it may prove to be the case that we got whipsawed -- that we pulled the recession forecast at just the wrong time."
[20569020] |He adds, "That's the forecasting business."

[20569021] |However risky the business, it's brisk these days.
[20569022] |Pestered by bosses, brokers, clients and media people and pushed by their own egos, Wall Street economists are forecasting about everything from broad economic trends to the dinkiest monthly indicator.
[20569023] |But the surprisingly durable seven-year economic expansion has made mincemeat of more than one forecast.

[20569024] |This isn't the quiet economic science practiced in the universities.
[20569025] |This is the commercial version.

[20569026] |Carrying the new message on the road, Mr. Straszheim meets confrontation that often occurs in inverse proportion to the size of the client.
[20569027] |No sophisticated professional expects economists to be right all the time.
[20569028] |Some smaller clients don't seem to notice his switch.
[20569029] |But with some clients, the talk can heat up a bit.

[20569030] |Dennis O'Brien, the treasurer of Commonwealth Edison Co. in Chicago, adopts a polite approach, waiting for an opportunity to ask about the forecast.
[20569031] |A good half-hour into breakfast at the Palmer House, Mr. O'Brien looks up from his plate after Mr. Straszheim says something about people who believe interest rates are about to nosedive.
[20569032] |"I'm one of them who hope they will, with $6 billion in debt on the books.
[20569033] |Is that the forecast?" Mr. O'Brien asks, trying to pin down the economist.
[20569034] |He doesn't fully succeed, although Mr. Straszheim lists an array of interest-rate scenarios.

[20569035] |In a chilly conference room at Alliance Capital Management in Minneapolis, in contrast, the firm's money managers seem ready to pin Mr. Straszheim to the wall.
[20569036] |Alfred Harrison, the manager, shoves Mr. Straszheim's handout back at him: "Do we want to go through this?
[20569037] |Or can we ask you why you changed your forecast just when it's about to be right?"

[20569038] |Swiveling in his chair, Mr. Straszheim replies that the new outlook, though still weak, doesn't justify calling a recession right now. "
[20569039] |It's all in this handout you don't want to look at.
[20569040] |We could still have a recession" at some point.
[20569041] |One of Mr. Straszheim's recurring themes is that the state of the economy isn't a simple black or white.
[20569042] |Sometimes, like now, it's gray.

[20569043] |This somewhat-ambiguous assessment moves one Alliance portfolio manager to ask: "So, what is this -- a Stealth recession?"
[20569044] |Another challenges Merrill Lynch's bond recommendation last year.
[20569045] |"We're not running that ad campaign any more," Mr. Straszheim snaps in a rare show of irritation.
[20569046] |He adds, "I think it was a fairly decent call."

[20569047] |Explaining his change of mind, Mr. Straszheim says later, "It's hard to pin this on one factor."
[20569048] |He says the economy, and especially the employment numbers, look much better than he expected; interest rates have generally declined; inflation hasn't run amok.
[20569049] |"Our business is constantly looking at all these things," he says.
[20569050] |His new forecast calls for "a soft landing."
[20569051] |And it may be right, judging from last week's report that inflation-adjusted gross national product rose at a 2.5% annual rate in the third quarter.

[20569052] |Mr. Shilling understands Mr. Straszheim's problems.
[20569053] |"There's unbelievable pressure on economists to forecast these numbers," he says. "
[20569054] |You make a forecast, and then you become its prisoner."

[20569055] |It is indeed hard to back away from a widely publicized forecast, and Mr. Straszheim is fidgeting with the handcuffs on this trip.
[20569056] |His approach to the recantation is direct but low-key.
[20569057] |"For some time, we had forecast negative third- and fourth-quarter growth.
[20569058] |We pulled that forecast," he begins matter-of-factly in a meeting with Piper, Jaffray & Hopwood Inc. officials in Minneapolis, the first stop.

[20570001] |Crane Co. said it holds an 8.9% stake in Milton Roy Corp., an analytical-instruments maker, and may seek control of the company.

[20570002] |Crane, a maker of engineered products for aerospace, construction, defense and other uses, made the disclosure in a Securities and Exchange Commission filing.

[20570003] |In the filing, Crane said that in the past it considered seeking control of Milton Roy, of St. Petersburg, Fla., through a merger or tender offer and that it expects to continue to evaluate an acquisition from time to time.
[20570004] |Crane officials didn't return phone calls seeking comment.

[20570005] |Crane holds 504,200 Milton Roy shares, including 254,200 bought from Sept. 14 to Thursday for $15.50 to $16.75 each.
[20570006] |In New York Stock Exchange composite trading Friday, Milton Roy shares leaped $2, to $18.375 each, while Crane sank $1.125, to $21.125 a share.

[20570007] |John M. McNamara, chief financial officer of Milton Roy, said the company has no comment on Crane's filing.

[20570008] |Milton Roy recently fended off unsolicited overtures from Thermo Electron Corp., a Waltham, Mass., maker of biomedical products.
[20570009] |Milton Roy disclosed in May that it was approached for a possible acquisition by Thermo Electron, which agreed to purchase Milton Roy's liquid-chromatography line for $22 million in February.
[20570010] |Thermo Electron acquired some 6% of Milton Roy's common stock before throwing in the towel and reducing its stake in early September.

[20570011] |Gabelli Group began raising its Milton Roy stake in July, and holds 14.6%, according to a recent SEC filing.
[20570012] |It hasn't made merger overtures to the board.

[20570013] |Earlier this month, Milton Roy signed a letter of intent to acquire Automated Custom Systems Inc., Orange, Calif., and its sister operation, Environmental Testing Co., in Aurora, Colo.
[20570014] |The companies are automotive-emissions-testing concerns.

[20570015] |Under the terms, Milton Roy will pay an initial $4 million for the operations and additional payments during the next four years based on the earnings performance of the businesses.

[20570016] |In the nine months, Milton Roy earned $6.6 million, or $1.18 a share, on sales of $94.3 million.

[20571001] |Last week the British displayed unusual political immaturity.
[20571002] |The Chancellor of the Exchequer, Nigel Lawson, resigned because Prime Minister Thatcher would not fire her trusted adviser Sir Alan Walters.
[20571003] |The opposition Labor Party leader, Neil Kinnock, in a display of the male chauvinism typical of the British lower class, denounced Mrs. Thatcher for having an independent mind and refusing to heed the men in her Cabinet.
[20571004] |The British press, making a mountain out of a molehill, precipitated an unnecessary economic crisis by portraying Mrs. Thatcher as an autocrat who had thrown economic policy into confusion by driving a respected figure from her government.

[20571005] |Behind the silly posturing lies a real dispute.
[20571006] |Mr. Lawson and his European-minded colleagues want the British pound formally tied to the West German mark.
[20571007] |Sir Alan considers this an ill-advised and costly policy.
[20571008] |As there is an effort to "anchor the dollar" either to gold or other currencies, the dispute is worth examining.

[20571009] |Until his resignation, Mr. Lawson had been conducting British monetary policy as if the pound were tied to the mark.
[20571010] |When Mrs. Thatcher cut the top tax rate to 40%, Mr. Lawson flooded the country with money to prevent the pound from rising against the mark.
[20571011] |As a result, he reignited the inflation that Mrs. Thatcher, through a long and costly effort, had subdued.

[20571012] |With inflation surging, the pound began falling against the mark.
[20571013] |To keep the exchange rate pegged, Mr. Lawson tightened monetary policy and pushed interest rates up to 15%.
[20571014] |This doubled the mortgage interest rates of the many new homeowners that Mrs. Thatcher's policies had created, producing widespread disaffection and pushing Labor ahead in the polls.

[20571015] |Instead of realizing his mistake in letting the exchange rate dominate both British economic policy and Mrs. Thatcher's political fortune, Mr. Lawson pushed for tying the pound formally to the mark by entering the European Monetary System, which subordinates all member currencies to German monetary policy.
[20571016] |This put Mrs. Thatcher in a bind.
[20571017] |The concept of European integration is one of those grand schemes that appeal to intellectuals, the media and the imagination, but are full of practical pitfalls.

[20571018] |If the pound had been tied to the mark, the British would have been unable to cut their exorbitant tax rates.
[20571019] |The reason is simple.
[20571020] |When a country cuts tax rates, it makes itself more attractive to investors and drives up the value of its currency.

[20571021] |It was fear of disturbing EMS exchange-rate relationships that caused the Chirac government in France to be timid about cutting tax rates.
[20571022] |Edouard Balladur, the finance minister at the time, was sold on the tax-cut policy but was concerned that his government would be criticized as anti-European for disturbing the linked European currency relationship.

[20571023] |The price of attracting capital -- whether one's own or that of foreigners -- is a trade deficit.
[20571024] |To avoid this deficit Mr. Lawson inflated the pound in order to prevent its rise.
[20571025] |This misguided policy could not prevent a British trade deficit.
[20571026] |Consequently, Mr. Lawson saddled Mrs. Thatcher with a record trade deficit, renewed inflation and high interest rates -- three political failures in a row.
[20571027] |Little wonder that Mrs. Thatcher's opponents were so anxious to keep Mr. Lawson in office.

[20571028] |It is extraordinary that the British Treasury thought it could prevent a trade deficit by inflating the pound.
[20571029] |The British balance-of-payments statistics show that after the top tax rate was cut to 40%, the flow abroad of British capital slowed, to 50 billion pounds ($79 billion at the current rate) in 1988 from 93 billion pounds in 1986.
[20571030] |This change in the British capital account required an offsetting change in the trade account, a change that could not be prevented by pegging the currency.

[20571031] |Nigel Lawson was a victim of the immense confusion in thought that has been characteristic of Western financial circles during the 1980s.
[20571032] |The most important governments have ignored the role of low tax rates in attracting real capital investment, instead emphasizing financial flows in response to high interest rates.
[20571033] |This has led them in a fruitless and destructive policy circle.
[20571034] |First comes monetary expansion to drive down the currency's value that was pushed up by tax-rate reduction.
[20571035] |Then, when the currency falls, interest rates are raised to attract financial flows in order to stabilize the exchange rate.
[20571036] |This policy is totally mindless, and Sir Alan is correct to point out its deficiencies.

[20571037] |Britain and all of Europe need to reconsider the prospects for European integration in light of the possible reunification and neutralization of Germany.
[20571038] |A unified Germany that remained within the Western alliance would give Germany such an overshadowing position that all other members of a unified Europe would become vassals of the German state.
[20571039] |Unless the Soviet Union collapses, German reunification is likely to require Germany's neutralization.
[20571040] |The implications for Britain, France and the rest of Europe of having their currencies tied to the economic policy of a neutral country need considering before we judge Mr. Lawson's resignation to be unfortunate.

[20571041] |In the least, we must recognize the futility of trying to use exchange-rate intervention to offset the effects of tax-rate reduction on capital flows.

[20571042] |Mr. Roberts was assistant Treasury secretary under President Reagan.

[20572001] |Joseph P. Jordan, 52 years old, becomes president, chief executive officer and a director of the bank company.
[20572002] |Mr. Jordan, formerly president and chief executive of Fishkill National Bank in Beacon, N.Y., succeeds Donald Broderick, who died at 52 in an automobile accident.

[20573001] |Personal spending, which fueled the economy's growth in the third quarter, was clearly slowing by the end of the period, raising questions about the economy's strength as the year ends.

[20573002] |Personal spending grew 0.2% in September to a $3.526 trillion annual rate, the Commerce Department said.
[20573003] |It was the smallest monthly increase in a year.

[20573004] |At the same time, personal income was held down by the effects of Hurricane Hugo, which tore through parts of North and South Carolina in late September.
[20573005] |The department said personal income rose 0.3% in September to a $4.469 trillion rate but would have climbed 0.6% had it not been for the storm.
[20573006] |Among the economic effects of the hurricane was a sharp drop in rental income.

[20573007] |The figures came a day after the government released a report showing that consumer spending propelled U.S. economic expansion in the third quarter while -- on an inflation-adjusted basis -- business investment slowed, government spending declined, and exports were flat.

[20573008] |But the new statistics show that by September, the burst in spending seemed to be tapering off.
[20573009] |Many economists expect the weakness to continue.

[20573010] |"I think the consumer has pretty well played himself out," said David Littman, senior economist at Manufacturers National Bank of Detroit.

[20573011] |"I don't think there's a lot in the wings" in other sectors of the economy to keep growth above 1%, he said.
[20573012] |In the third quarter, the economy grew at a moderate 2.5% annual rate.

[20573013] |In August, personal income rose 0.3% and spending grew 0.9%.

[20573014] |Analysts have attributed much of the summer's spurt in spending to bargain car prices at the end of the model year.
[20573015] |Car sales slackened in September after the 1990 models were introduced.
[20573016] |According to the Commerce Department report, spending on durable goods -- items expected to last at least three years, including cars -- declined by $6.2 billion.

[20573017] |The nation's savings rate was unchanged in September at 4.9% of after-tax income, far below the 5.6% it reached in July.

[20573018] |All the figures are adjusted for seasonal variations.

[20573019] |Here is the Commerce Department's latest report on personal income.
[20573020] |The figures are at seasonally adjusted annual rates in trillions of dollars.

[20574001] |CRA Ltd. said it agreed to sell a 40% stake in its Howick coal mine in the state of New South Wales to Mitsubishi Development Pty. of Japan.

[20574002] |The price wasn't disclosed.
[20574003] |The agreement is subject to government approval.

[20574004] |RA acquired the Howick coal mine Oct. 20 when it bought British Petroleum Co.'s Australian coal interests for $275 million.
[20574005] |CRA said then that it was looking for a partner for the mine, which produces more than three million metric tons of coal a year.

[20574006] |CRA is 49%-owned by RTZ Corp. of Britain.

[20575001] |Control Data Corp., which just months ago was hemorrhaging financially, thinks it will be healthy enough soon to consider repurchasing public debt.

[20575002] |Moreover, the company, whose go-it-alone approach nearly proved fatal, now sees alliances with others as the way back to prosperity in what it calls "the data solutions" business.

[20575003] |"I'm not saying everything is hunky-dory, but we have completed the transition," Robert M. Price, chairman and chief executive, said in an interview.
[20575004] |"Transition" is a reference to the company's five-year restructuring effort.
[20575005] |During that time, Control Data had losses of more than $1 billion.

[20575006] |Now, following asset sales that shrank revenue by more than one-third this year alone, Control Data is flush with cash.
[20575007] |So its senior executives are talking openly about possibly buying back some of the company's $172.5 million in subordinated convertible debentures next year.

[20575008] |"We'd like to continue to reduce debt," President Lawrence Perlman said.
[20575009] |Noting that the company is offering to buy back $154.2 million in senior notes paying 12 3/4%, he said the response will help determine future debt-reduction efforts.
[20575010] |The offer was automatically triggered by the recent sale of Control Data's Imprimis disk-drive business to Seagate Technology Inc.

[20575011] |Mr. Perlman, who is also acting chief financial officer and the odds-on favorite to become the next chief executive, said the company is achieving "modest positive cash flow from operations, and we expect that to continue into 1990."

[20575012] |He said the company has no intention of tapping its short-term bank lines "for a good part of 1990."
[20575013] |Sometime next year, Control Data will "develop a new bank relationship," Mr. Perlman said.
[20575014] |In recent months a group of lenders, led by Bank of America, has extended Control Data up to $90 million in revolving loans through January, as well as $115 million in standby letters of credit.

[20575015] |Loan covenants require that the company achieve specified levels of operating earnings and meet a rolling four-quarter profitability test.
[20575016] |Last week Control Data reported third-quarter earnings of $9.8 million, or 23 cents a share, on revenue of $763 million.
[20575017] |Through the first nine months, the company had a loss of $484 million, largely reflecting the closing of its supercomputer unit.

[20575018] |While a few assets are still being shopped -- including the sports and entertainment ticketing portion of the company's Ticketron unit -- Mr. Price said future restructuring would be a question of strategy.
[20575019] |"We don't need the cash."

[20575020] |Ticketron's automated wagering business, which operates lotteries in a half dozen states, is not for sale, the company said.
[20575021] |Rather, Mr. Perlman said, Control Data intends to bid for the coming Minnesota lottery contract and is seeking new applications for the technology overseas, where "there is great interest in games of skill."
[20575022] |He wouldn't elaborate.

[20575023] |Control Data's semiconductor business, VTC Inc., continues to lose money, the executives acknowledged, but they said they consider some of the technology vital to national defense and so are reluctant to dispose of it.

[20575024] |The company's strategy for keeping its computer products business profitable -- it recently achieved profitability after several quarters of losses -- calls for a narrow focus and a lid on expenses.
[20575025] |Partly, costs will be held down through strategic technology alliances, management said.
[20575026] |Control Data recently announced an agreement with MIPS Computer Systems Inc. to jointly develop machines with simplified operating software.

[20575027] |James E. Ousley, computer products group president, said such arrangements could help slash Control Data's computer research and development costs in half by the end of 1990.
[20575028] |He disclosed that before Control Data scrapped its ETA Systems Inc. supercomputer business this past spring, those costs were running at nearly 35% of group revenue.
[20575029] |At the same time four of six design projects were spiked, he said.

[20575030] |Asked how the company hopes to expand its computer hardware business, Mr. Ousley said it sees good opportunities in systems integration.
[20575031] |"We think we're getting only 10% of the integration dollars our customers are spending," he said.
[20575032] |"We're in environments that are going to spend a lot of money on that."

[20575033] |Control Data mainframes are designed for numerically intensive computing users, such as the scientific, engineering and academic communities.
[20575034] |Utilities management is a major commercial niche.

[20575035] |Reviewing the company's scrape with disaster, Mr. Price conceded it had tried to do too much on its own.
[20575036] |"Absolutely," he said.

[20575037] |But while its stock is selling at about half Control Data's estimated breakup value, neither Messrs. Perlman nor Price said he spends much time considering the possibility of a hostile takeover.
[20575038] |"We've been listed as a candidate for so long it's not worth worrying about," said Mr. Price.

[20576001] |Well, the arrogant East Coast media have spoken again ("Going for the Green," editorial, Oct. 17).
[20576002] |Having resided in the great state of California for the past seven years, I find it hard to ignore our environmental problems when I start my commute to work with eyes tearing and head aching from the polluted air; when I try to enjoy the beaches and come home covered with tar and oil; when I hear of numerous deaths related to irresponsible processing of cheese and use of chemicals in fruit growing.

[20576003] |Perhaps it's entertaining for those like you to discount the concerns of environmentalists, suggesting that their save-the-earth initiatives are "whacky" and referring to so many citizens as "la-la activists."
[20576004] |Strange that we don't hear similar criticisms of the East Coast activists who seek to clean up Boston Harbor or rid their beaches of medical waste.

[20576005] |While there are no easy low-cost solutions, simply ignoring our problems will result in their severity increasing and spreading throughout the state, the nation and the world.
[20576006] |If nothing else, such initiatives as these will provide an awareness to citizens and lawmakers and encourage appropriate corrective action.

[20576007] |Before your next California-bashing editorial, please spend more time out here witnessing the situation -- it just may change your view.

[20576008] |John Barry Ventura, Calif.

[20576009] |I realize you were just looking for something snotty to say about California and its environmental movement, but picking Frank Lloyd Wright to say it for you was a bad call.
[20576010] |Wright's organic architecture demonstrated a keen sensitivity to the environment decades before it became fashionable among "la-la activists."
[20576011] |Indeed, Wright said all his life that the greatest lessons he learned were derived from the study of nature.
[20576012] |Obviously, it's lost on you that about 75% of the American people these days (and in fact the president of the United States) consider themselves environmentalists.

[20576013] |As for California being a state run by liberal environmental loonies, let's not forget where Ronald Reagan came from.
[20576014] |Perhaps Mr. Reagan, who claimed that air pollution is caused by trees, is the man you should be quoting to back up your position that economics is more important than the Earth.
[20576015] |But it was Frank Lloyd Wright who said, "Is this not Anti-Christ?
[20576016] |The Moloch that knows no God but more?"

[20576017] |Robert Borden Santa Monica, Calif.

[20576018] |Your editorial was commendable and neatly matched by the readers' comments in letters to the editor, "Alar: Scaring on the Side of Caution."
[20576019] |The illogic and inaccuracy of John H. Adams's comments for the National Resources Defense Council fully justifies your characterization of California's Greens in particular as "la-la activists."
[20576020] |We may all hope that California's voters will heed the scientific realities that their own university's renowned Prof. Tom Jukes provides them and ignore the charlatanry profferred by their "wealthy Hollywood weepers."

[20576021] |I have a different approach to offer, not only to Californians, but to all Americans.
[20576022] |In a free country, the law should restrict citizens as little as is consistent with good manners and public safety.
[20576023] |Would-be naysayers should have the burden of proving reasonable necessity when they urge a prohibition for enactment into law.

[20576024] |W. Brown Morton Jr. Warsaw, Va.

[20576025] |The 170 airlines in the International Air Transport Association last year posted group net profit of $2.5 billion on revenue of $125.1 billion.

[20576026] |According to the association's annual report, scheduled to be released today in Warsaw, IATA members haven't posted such a strong performance since the late 1970s.
[20576027] |Revenue last year increased by more than 11% over 1988, and net income nearly tripled from restated year-earlier net of $900 million.

[20576028] |The group attributed the strong results to the favorable economic climate, rising demand for air travel and improved average yield (revenue received per ton of traffic transported a kilometer).
[20576029] |Systemwide, IATA airlines carried 632 million passengers last year, 2% more than in 1987.
[20576030] |But passenger-kilometers, the distance flown while carrying people, increased 5.3% in 1988.

[20576031] |The association said that lack of airport and air space capacity is the biggest problem facing the airline industry.

[20576032] |The KGB has abolished a unit known for persecuting dissidents, the government newspaper Izvestia said.
[20576033] |The newspaper quoted KGB chairman Vladimir A. Kryuchkov as saying the definition of anti-Soviet crimes had narrowed, the laws had changed and people no longer have to fear a simple slip of the tongue.
[20576034] |Mr. Kryuchkov was quoted as saying that in place of the infamous 5th Directorate a new unit would work "to foil the conspiracies of foreign intelligence services to create and use organized anti-government groups in our country."

[20576035] |Czechoslovakia has restricted consumer-goods exports to neighbor countries because of "massive buying out of food" by tourists from Poland, Hungary and the Soviet Union, the Rude Pravo daily said.
[20576036] |Rising inflation in Poland and Hungary makes Czechoslovak food, clothing and shoes relatively cheap for visitors from these countries.
[20576037] |The paper gave no details of what the restrictions would entail but said the measures were necessary to protect the domestic market.

[20576038] |West Germany's biggest union, IG Metall, said it is ready to back demands for more pay and shorter hours with strikes against the nation's automotive, steel and engineering industries.
[20576039] |Its chairman told the union to prepare for the worst in next year's confrontation with employers over a new three-year wage deal.
[20576040] |A major goal is to cut the working week to 35 hours from the present 37.

[20576041] |Last week came news of alarm in Venice over a plan to tap gas fields off the city's coast.
[20576042] |Now comes word from a scientist that over the next century Venice will sink nearly three times faster than the present rate because of the "greenhouse effect."
[20576043] |"Global warming means higher tides which will lower Venice by another 23 inches in the next 100 years," Giovanni Cecconi of the the New Venice Consortium said.
[20576044] |The consortium of scientists and companies was set up by Italy to help preserve the fabled city of canals.
[20576045] |Venice has sunk 10 inches in this century.

[20576046] |West Germany's Quelle said it will establish a mail-order operation with two local partners in the Soviet Union next year.
[20576047] |Saying this is a first for a Western company, West Germany's largest mail-order group said the newly established Moscow-based Intermoda company is scheduled to begin operations in February 1990.
[20576048] |Intermoda will initially only send the textile and clothing section of the Quelle catalog, translated into Russian, to Soviet customers who have access to convertible currency.

[20576049] |The European Community Commission has imposed provisional anti-dumping duties on imports of South Korean small-screen color-television sets.

[20576050] |Saying that a surge in low-priced imports had damaged EC producers' profits and led to job losses, the commission imposed a duty of 10.2% on TVs made by Daewoo, a duty of 12.3% on Goldstar Co., 13% on Samsung and 19.6% on TVs made by other South Korean producers.

[20576051] |The commission said that EC television producers lost "important market shares" and suffered an "unsustainable" pressure on prices because of the Korean companies' marketing and pricing policies, which it said were "in clear violation" of international trade rules.

[20576052] |In other news concerning South Korea's television industry, Samsung signed an agreement with Soyuz, the external-trade organization of the Soviet Union, to swap Korean television sets and videocassette recorders for pig iron from the Soviet Union.
[20576053] |South Korea and the Soviet Union have no diplomatic relations but exchanged trade offices earlier this year.

[20576054] |Sri Lanka, where more than 15,000 people have died in six years of ethnic turmoil, said it will ban sex and violence from state-owned television next year.
[20576055] |"Many programs we have now come from the West and are not suitable to our culture," a government minister said.
[20576056] |A star attraction on the national network is the U.S.'s "Dynasty." . . .
[20576057] |A poll of South Koreans showed overwhelming opposition to efforts to curb dog-meat consumption just because it offends foreigners.

[20577001] |Broad Inc. said it doubled its regular quarterly dividend to five cents a share from 2.5 cents on common, and to 4.5 cents a share 2.25 cents on Class B stock, payable Nov. 10 to holders of record Nov. 6.

[20577002] |The financial services company emerged from the restructuring of Kaufman & Broad, Inc., which spun off its home-building subsidiary into Kaufman & Broad Home Corp. earlier this year and changed its name to Broad Inc.

[20577003] |For the 10-month fiscal year ended Sept. 30, Chairman Eli Broad said he expected earnings results to approximate analysts' estimates, which the company said have been revised upward to 80 cents a share.
[20577004] |This would compare with an estimated loss of 3 cents a share for the comparable 10 months last year, which included restructuring costs.

[20578001] |If this battle were a movie, the producers would be fighting over two scripts with nothing but an opening scene in common.

[20578002] |In the opener, Sony Corp. would agree to buy Columbia Pictures Entertainment Inc. in a transaction valued at close to $5 billion.
[20578003] |Shortly after that, Sony would offer to buy Guber-Peters Entertainment Co. for $200 million and offer its co-chairmen, Peter Guber and Jon Peters, the chance to run Columbia.
[20578004] |Mr. Peters would fly to New York with the intention of telling Warner Communications Inc. Chairman Steven J. Ross that Guber-Peters planned to end its five-year contract to produce movies exclusively for Warner.

[20578005] |That's where the two scripts would diverge.
[20578006] |In affidavits filed in Los Angeles Superior Court in connection with the $1 billion breach-of-contract suit Warner brought against Sony for hiring the two producers, Mr. Guber and Mr. Peters tell one story.
[20578007] |Warner tells another.

[20578008] |In the affidavits, Mr. Peters says he was "shocked" when Mr. Ross refused a meeting and made it clear he would stop them.
[20578009] |Mr. Peters claims he reminded Mr. Ross that Robert Daly and Terry Semel, the top executives of the Warner Brothers studio, had "repeatedly agreed that we had every right to accept" an offer such as Sony's.
[20578010] |In response, Mr. Peters says, Mr. Ross referred to his colleagues at Warner with an "obscenity" and said: "Tell them that they don't have a job.
[20578011] |You can take them with you."

[20578012] |Warner denies Mr. Ross ever said any such thing, and, in fact, denies virtually everything Mr. Guber and Mr. Peters say in their affidavits.
[20578013] |Tomorrow, Warner will file another batch of documents contending that "the essence of everything these guys are saying is basically lies," says Warner's chief outside counsel, Stuart Rabinowitz.
[20578014] |Thursday, a judge is scheduled to rule on Warner's motion seeking to block the Guber-Peters duo from going to Columbia.

[20578015] |The battery of legal documents filed in the past week in connection with the suit provide a peek into the inner workings of this Hollywood dogfight.
[20578016] |But they also make it clear that the first thing a judge will have to decide is which, if any, version of events in this morass is fiction, and which fact.

[20578017] |The matter may never even be tried in court.
[20578018] |Warner says that what it really wants is for the producers to fulfill their contractual obligations, but the bitterness of this battle and the accusations flying on both sides make it unlikely that the decade-long relationship between Warner and its two most prolific producers can ever be repaired.
[20578019] |Warner, which is in the process of merging with Time Warner Inc., says it is willing to settle the matter out of court.
[20578020] |So far, however, Sony hasn't been willing to meet its considerable financial demands.

[20578021] |Mr. Guber and Mr. Peters don't have much to gain from a protracted battle.
[20578022] |Sony, for its part, could decide that the cost of a Warner settlement or court fight is too high, choosing instead to find someone else to run Columbia, although that too would be costly given the financial arrangement already guaranteed to Mr. Guber and Mr. Peters.
[20578023] |In that case, Mr. Guber and Mr. Peters might not suffer financially, but they would be left without their dream job of running a studio and with a considerably scarred relationship with Warner.

[20578024] |At the center of any court fight will be the differing interpretations of the written contract between Warner and the two producers, but other murkier issues will play a big role.
[20578025] |Sony and the Guber-Peters team are hanging much of their case on Warner's willingness last year to release the producers from another contract and on an oral agreement they say allowed them to terminate the current written contract if the opportunity to run a major studio came up.
[20578026] |Warner denies such an agreement was made, and disputes the Guber-Peters version of virtually every telephone call and meeting the two sides had on the matter.

[20578027] |Just how rancorous the relationship has become is clear from the differing versions of the two sides' current business dealings.
[20578028] |Mr. Guber and Mr. Peters say in their affidavits that Warner already is taking steps to freeze them out of their projects at Warner, notably the Sylvester Stallone film "Tango and Cash."

[20578029] |Mr. Peters says in his affidavit that the movie's staff was told last week that Warner was "taking over" the picture, and another producer would be giving all of the orders.
[20578030] |Over his objections, Mr. Peters says, the film's release date was moved up "by many months" to December, and plans for a soundtrack "worth millions of dollars" were dropped.

[20578031] |Hubert de la Bouillaire, an editor on the film, backs Mr. Peters in a separate sworn declaration.
[20578032] |Mr. de la Bouillaire says Warner Brothers production president Mark Canton called him Oct. 19 and said Mr. Peters is "off the picture.
[20578033] |If he calls you up, just tell him everything is fine."
[20578034] |The editor also says the new producer on the film, Bruce Baird, told editors to screen the picture without telling stars Sylvester Stallone and Kurt Russell or Mr. Peters.
[20578035] |"The less they know, the easier it is for us.
[20578036] |If someone asks, just lie and tell them it will be done," Mr. de la Bouillaire says Mr. Baird told them.

[20578037] |That, says Warner's Mr. Rabinowitz, is "a total 100% lie."
[20578038] |The movie, he says, is in its post-production stages of "cleaning up the film."
[20578039] |He says Mr. Peters and Mr. Guber, as the contractual producers with consultation rights, have been invited to screenings and to give their input on the film.
[20578040] |Dozens of Guber-Peters staffers are still working on the Warner lot and consulting on various projects on a "daily basis," the attorney says.

[20578041] |Mr. Guber, in his affidavit, says that when he advised Warner President Terry Semel of the Sony offer at lunch on Sept. 25, Mr. Semel "hugged and congratulated me, and expressed joy that we had finally realized our long-term ambition of running and having an equity position in a major entertainment company."

[20578042] |Mr. Guber says he brought to lunch a release document Warner had agreed to in 1988, when he and Mr. Peters made an aborted bid to buy part of MGM/UA Entertainment Co. to run the MGM studio.
[20578043] |Mr. Guber says he had crossed out "MGM" with a red pen and written in "Columbia," giving the document to Mr. Semel.
[20578044] |"Mr. Semel said absolutely nothing to indicate Warner would have any objection to our assuming management positions at Columbia," Mr. Guber says.

[20578045] |Mr. Semel, in his affidavit, doesn't mention any hugging or congratulating.
[20578046] |He says he told Mr. Guber he couldn't sign any documents and that "the deal, although apparently a good one for him and Mr. Peters, would have a very negative impact on Warner."
[20578047] |He said he would contact Mr. Ross and Warner Brothers Chairman Robert Daly and that, in a conference call, the three agreed they couldn't let the producers out of their contract.

[20578048] |Mr. Ross, in his own affidavit, says he and Mr. Daly instructed Mr. Semel to tell the producers Warner wouldn't terminate their agreement.

[20578049] |Mr. Guber says that Mr. Semel did convey that information and that Mr. Semel said Mr. Ross was "crazy because of the Time deal," meaning, Mr. Guber says, that Mr. Ross "did not want to communicate to his new merger partner, Time Inc., that Warner's agreements provided for our departure under these circumstances."

[20578050] |Mr. Guber also says in his affidavit that Mr. Daly "told us that even if Sony did not want us, Warner's relationship with us already was irreparably damaged, that there was no way `to put the egg together,' and that it would sue Sony for tons of money."

[20578051] |Moreover, Mr. Guber claims, Mr. Semel told him that Mr. Ross probably wouldn't object "if it were anybody other than Sony.
[20578052] |But Sony is a problem."
[20578053] |The Guber-Peters side has said Warner is particularly concerned about the prospect of a huge Japanese company controlling important segments of the U.S. entertainment business.

[20578054] |Some in Hollywood suggest Mr. Guber and Mr. Peters took encouragement from Warner studio executives such as Mr. Semel and Mr. Canton too literally.
[20578055] |According to this theory, Warner executives, hoping to strengthen their relationships with the producers, encouraged Mr. Guber and Mr. Peters in their ambitions to build a major entertainment company.
[20578056] |But the Warner executives in their affidavits deny ever telling the producers they could get out of their written contract.

[20578057] |Mr. Rabinowitz, the Warner attorney, says the studio still wants the producers to come back and fulfill their contract.
[20578058] |"They are like a mini-studio; they have 50 projects in development for Warner," he says.

[20578059] |But Mr. Guber indicates in his affidavit that not all of the projects will be used.
[20578060] |For example, he says that since 1985, he and Mr. Peters have developed over 85 movie projects, and Warner has "passed" or chosen not to produce at least 76.

[20578061] |As for the projects remaining at Warner, Mr. Guber says, "Mr. Semel informed me that Warner's producers have already started a `feeding frenzy' for our projects.

[20579001] |E.W. Scripps Co. said it has acquired a Georgia cable television company and a Massachusetts publishing firm.
[20579002] |Terms on both deals weren't disclosed.

[20579003] |The media company said it purchased Cable USA Inc., a privately held cable television system in Carroll County, Ga., a suburb of Atlanta.
[20579004] |The system is still under construction and will serve a market of 7,600 homes.

[20579005] |The company also has acquired Sundance Publishers and Distributors Inc., a family owned producer and distributor of educational materials in Littleton, Mass.

[20580001] |Despite politicians' hand-wringing about the federal budget, the government ended fiscal 1989 with a $152.08 billion deficit, about the same as the two previous years.

[20580002] |Even White House budget director Richard Darman had trouble finding a silver lining in the report.
[20580003] |"I suppose you could say the good news is that the deficits are not heading up," he said, "but you can't be satisfied with deficits at this level and we're not."

[20580004] |The federal deficit was $155.15 billion in 1988 and $149.69 billion in 1987.

[20580005] |The 1989 deficit would have been nearly $10 billion larger had the government been able to spend as much as Congress intended on cleaning up the thrift industry before the year ended on Sept. 30.
[20580006] |Because the Resolution Trust Corp. couldn't spend the money fast enough, the savings-and-loan outlays were pushed into fiscal 1990.

[20580007] |Nevertheless, the 1989 deficit still exceeded the $136 billion target set by the Gramm-Rudman deficit-reduction law by $16 billion, a reminder of that law's shortcomings.

[20580008] |The law sets a deficit target of $100 billion for fiscal 1990.
[20580009] |A partisan fight over cutting capital-gains taxes has slowed the progress of 1990 deficit-reduction legislation almost to a halt, triggering across-the-board spending cuts under the Gramm-Rudman law.

[20580010] |The White House and the Democratic leadership in Congress blame each other for turning capital-gains taxes into such a divisive issue this year.
[20580011] |Neither side showed any sign of retreating.

[20580012] |Meeting with reporters Friday, Mr. Darman again said he would rather live with across-the-board spending cuts than accept a deficit-reduction bill like the one passed by the House, which would increase spending in future years.

[20580013] |Underscoring the size of the deficits of the past few years, the Treasury report showed that for the first time interest paid on the public debt -- $240.86 billion -- exceeded spending on Social Security, the single largest government program.

[20580014] |In all, federal outlays amounted to $1.143 trillion in 1989, up 7.5% from the previous year, the Treasury said.
[20580015] |Federal revenues rose 9% to $990.79 billion.

[20580016] |The Treasury said a surge in tax receipts noted earlier in the year didn't turn out to be quite as strong as it first appeared.
[20580017] |The Treasury marked up its forecast by $17 million in July, but that proved to be about $5 billion too optimistic.

[20580018] |The government ran a deficit of $6.16 billion in September, compared with a surplus of $10.17 billion in September 1988.

[20580019] |Outlays for the month totaled $105.39 billion, up from $87.57 billion a year earlier.
[20580020] |The increase reflects spending on the S&L rescue as well as payroll and Social Security checks normally issued in October that were issued in September this year because Oct. 1 fell on a Sunday.

[20580021] |Revenues were $99.23 billion, up from $97.74 billion a year earlier.

[20581001] |CMS Energy Corp. said it would begin paying a 10-cent-a-share quarterly dividend, the company's first since 1984.

[20581002] |Consumers Power Co., now the main unit of CMS Energy, ran into financial problems over its $4.2 billion Midland nuclear plant, which was abandoned as a nuclear facility in 1984 because of construction delays and high costs.
[20581003] |CMS is nearly done converting the Midland plant to a gas-fired cogeneration facility at a cost of $600 million.

[20581004] |CMS management said Thursday that they planned to recommend paying a modest dividend when the board of directors met Friday.
[20581005] |The dividend will be paid Nov. 22 to shares of record Nov. 7.

[20581006] |The company suffered a loss of $270 million in 1985, but its financial situation has been improving since then.

[20582001] |Humana Inc. said it expects to receive about $27 million in federal income-tax refunds and interest from a court ruling on a tax dispute.

[20582002] |The health-care company said it expects the refund to be included in the first quarter ending Nov. 30.
[20582003] |The refund is about $9 million.
[20582004] |Accrued interest on the refund was about $18 million as of Oct. 25.

[20582005] |The refund stems from a court ruling that found certain payments by Humana subsidiaries to its insurance subsidiary during fiscal 1977 through 1979 were deductible as premiums for liability insurance.

[20583001] |Polly Peck International Inc.'s agreement to acquire 51% of Sansui Electric Co. proves that foreign companies can acquire Japanese companies -- if the alternative for the Japanese company is extinction.

[20583002] |Polly Peck, a fast-growing British conglomerate, will pay 15.6 billion yen ($110 million) for 39 million new shares of Sansui, a well-known maker of high-fidelity audio equipment that failed to adjust to changing market conditions.
[20583003] |Japanese government officials, eager to rebut foreign criticism of Japanese investments overseas, hailed the transaction as proof foreigners can make similar investments in Japan.
[20583004] |Polly Peck's chairman, Asil Nadir, echoed the official Japanese view of the accord, which was announced Friday.

[20583005] |"The myths that Japan is not open to concerns from outside has, I think, been demolished at a stroke," Mr. Nadir said.

[20583006] |But analysts say Sansui is a special case.
[20583007] |It expects to post a loss of 6.4 billion yen for the year ending tomorrow and its liabilities currently exceed its assets by about 13.8 billion yen. "
[20583008] |If you find sound, healthy companies in Japan, they are not for sale," said George Watanabe, a management-consultant at Tokyo-based Asia Advisory Services Inc.

[20583009] |Statistics on acquisitions by foreigners vary in detail, because unlike Sansui, which is listed on the Tokyo and Osaka stock exchanges, most of the Japanese companies acquired by foreigners are privately held.
[20583010] |But by all accounts foreign companies have bought only a relative handful of Japanese companies this year, while Japanese companies have acquired hundreds of foreign companies.

[20583011] |Nor do analysts expect the Sansui deal to touch off a fresh wave of foreign purchases.
[20583012] |If the strong yen and the high stock prices of Japanese companies weren't deterrents enough, webs of cross-shareholdings between friendly Japanese companies and fiercely independent Japanese corporate attitudes repel most would-be acquirers.

[20583013] |Usually when a Japanese company is ready to sell, it has few alternatives remaining, and the grim demeanors of Sansui's directors at a joint news conference here left little doubt that this was not the company's finest hour.
[20583014] |Sansui was once one of Japan's premier makers of expensive, high-quality stereo gear for audiophiles.

[20583015] |But in recent years, the market has moved toward less expensive "mini-component" sets, miniaturized amplifiers and receivers and software players that could be stacked on top of each other.

[20583016] |Some of Sansui's fellow audio-specialty companies, such as Aiwa Co. and Pioneer Electric Corp., responded to the challenge by quickly bringing out mini-component products of their own, by moving heavily into the booming compact disk businesses or by diversifying into other consumer-electronics fields, including laser disks or portable cassette players.
[20583017] |Sansui was late into the mini-component business and failed to branch into other new businesses.

[20583018] |As the yen soared in recent years, Sansui's deepening financial problems became a vicious circle.
[20583019] |While competitors moved production offshore in response to the sagging competitiveness of Japanese factories, Sansui lacked the money to build new plants in Southeast Asia.
[20583020] |"Our company has not been able to cope very effectively with" changes in the marketplace, said Ryosuke Ito, Sansui's president.

[20583021] |But even a Japanese company that looks like a dog may turn out to be a good investment for a foreign concern, some management consultants maintain.

[20583022] |Yoshihisa Murasawa, a management consultant for Booz-Allen & Hamilton (Japan) Inc., said his firm will likely be recommending acquisitions of Japanese companies more often to foreign clients in the future.
[20583023] |"Attitudes {toward being acquired} are still negative, but they're becoming more positive," Mr. Murasawa said.
[20583024] |"In some industries, like pharmaceuticals, acquisitions make sense."

[20583025] |Whether Polly Peck's acquisition makes sense remains to be seen, but at the news conference, Mr. Nadir brimmed with self-confidence that he can turn Sansui around.
[20583026] |Sansui, he said, is a perfect fit for Polly Peck's electronics operations, which make televisions, videocassette recorders, microwaves and other products on an "original equipment maker" basis for sale under other companies' brand names.

[20583027] |He said Polly Peck will greatly expand Sansui's product line, using Sansui's engineers to design the new products, and will move Sansui's production of most products other than sophisticated audio gear offshore into Polly Peck's own factories.

[20583028] |"Whatever capital it (Sansui) needs so it can compete and become a totally global entity capable of competing with the best in the world, that capital will be injected," Mr. Nadir said.

[20583029] |And while Polly Peck isn't jettisoning the existent top-management structure of Sansui, it is bringing in a former Toshiba Corp. executive as executive vice president and chief operating officer.

[20583030] |Such risk taking is an everyday matter for the brash Mr. Nadir, who is 25% owner of Polly Peck as well as its chairman.
[20583031] |He took Polly Peck, once a small fabric wholesaler, and used it at as a base to build a conglomerate that has been doubling its profits annually since 1980.
[20583032] |In September, it announced plans to acquire the tropical-fruit business of RJR Nabisco Inc.'s Del Monte foods unit for #557 million ($878 million).

[20583033] |Last month, Polly Peck posted a 38% jump in pretax profit for the first half to #54.8 million from #39.8 million on a 63% rise in sales.

[20583034] |Joann S. Lublin in London contributed to this article.

[20584001] |The bolstered cellular agreement between BellSouth Corp. and LIN Broadcasting Corp. carries heightened risks and could fail to fend off McCaw Cellular Communications Inc., the rival suitor for LIN.

[20584002] |Moreover, the amended pact shows how McCaw's persistence has pushed LIN and BellSouth into a corner, forcing huge debt on the proposed new company.
[20584003] |The debt, estimated at $4.7 billion, could mortgage the cellular company's future earning power in order to placate some LIN holders in the short term.

[20584004] |The plan still calls for LIN to combine its cellular telephone properties with BellSouth's and to spin off its broadcasting operations.
[20584005] |But under new terms of the agreement, announced Friday, LIN holders would receive a special cash dividend of $42 a share, representing a payout of about $2.23 billion, shortly before the proposed merger.
[20584006] |LIN said it expects to borrow the money to pay the dividend, but commitments from banks still haven't been obtained.
[20584007] |Under previous terms, holders would have received a dividend of only $20 a share.

[20584008] |In addition, New York-based LIN would exercise its right to buy out for $1.9 billion the 55% equity interest of its partner, Metromedia Co., in a New York cellular franchise.
[20584009] |That money also would have to be borrowed.
[20584010] |In effect, McCaw has forced LIN's hand by bidding $1.9 billion for the stake earlier this month.

[20584011] |"We're taking on more debt than we would have liked to," acknowledged Michael Plouf, LIN's vice president and treasurer.
[20584012] |Although he expressed confidence that the proposed new company's cash flow would be sufficient to cover interest payments on the debt, he estimated that the company wouldn't be profitable until 1994 or later.

[20584013] |Analyst estimate the value of the BellSouth proposal at about $115 to $125 a share.
[20584014] |They value McCaw's bid at $112 to $118 a share.
[20584015] |The previous BellSouth pact was valued at about $98 to $110 a share.

[20584016] |McCaw, the largest provider of cellular telephone service in the U.S., already owns about 9.4% of LIN's stock.
[20584017] |In response to BellSouth's amended pact, the Kirkland, Wash., company extended its own offer to buy 22 million LIN shares for $125 apiece, which would give McCaw a 50.3% controlling interest.
[20584018] |Over the weekend, McCaw continued to call for an auction of LIN.
[20584019] |Analysts said they expect McCaw to escalate the bidding again.

[20584020] |"This game isn't over yet," said Joel D. Gross, a vice president at Donaldson, Lufkin & Jenrette Securities Corp.
[20584021] |"At some point, it will become non-economical for one company.
[20584022] |But I don't think we're at that point yet."

[20584023] |Under its revised proposal, Atlanta-based BellSouth would have a 50% interest in the new cellular company and would be responsible for half of its debt.
[20584024] |To sweeten the pact further -- and to ease concerns of institutional investors -- BellSouth added a provision designed to give extra protection to holders if the regional Bell company ever decides to buy the rest of the new cellular company.
[20584025] |The provision, described as "back-end" protection, would require BellSouth to pay a price equivalent to what an outside party might have to pay.

[20584026] |McCaw's bid also has a similar clause.
[20584027] |Only McCaw's proposal requires the company to begin an auction process in June 1994 for remaining shares at third-party prices.

[20584028] |To mollify shareholders concerned about the long-term value of the company under the BellSouth-LIN agreement, BellSouth also agreed to pay as much as $10 a share, or $540 million, if, after five years, the trading value of the new cellular company isn't as high as the value that shareholders would have realized from the McCaw offer.

[20584029] |"We're very pleased with the new deal.
[20584030] |We didn't expect BellSouth to be so responsive," said Frederick A. Moran, president of Moran Asset Management Inc., which holds 500,000 LIN shares.
[20584031] |BellSouth's "back-end protection was flawed previously.
[20584032] |We think this is a superior deal to McCaw's.
[20584033] |We're surprised.
[20584034] |We didn't think a sleeping {Bell} mentality would be willing to take on dilution."

[20584035] |But Kenneth Leon, a telecommunications analyst with Bear, Stearns & Co., finds the BellSouth proposal still flawed because the company doesn't have to wait five years to begin buying more LIN shares.
[20584036] |"How many shares will be around in 1995?" he asked.
[20584037] |"There's nothing preventing BellSouth from buying up shares in the meanwhile."

[20584038] |BellSouth's revised proposal surprised many industry analysts, especially because of the company's willingness to accept some dilution of future earnings.
[20584039] |William O. McCoy, president of the company's BellSouth Enterprises Inc. unit, said the revised agreement with LIN would dilute BellSouth earnings by about 9% in both 1990 and 1991 and by significantly less thereafter.
[20584040] |Indeed, BellSouth's cellular operations were among the first in the country to become profitable.

[20584041] |For 1988, BellSouth earned $1.7 billion, or $3.51 a share, on revenue of $13.6 billion.
[20584042] |Analysts were predicting 1990 BellSouth earnings in the range of $3.90 a share, or $1.9 billion, but now those estimates are being scaled back.

[20584043] |In composite trading Friday on the New York Stock Exchange, BellSouth shares fell 87.5 cents to $52.125.

[20584044] |In national over-the-counter trading, LIN shares soared $4.625 to closed at $112.625, while McCaw fell $2.50 a share to $37.75.

[20584045] |The proposed BellSouth-LIN cellular company, including the newly acquired Metromedia stake, would give the new entity 55 million potential customers, including about 35 million in the nation's top 10 markets.

[20584046] |Mr. Leon of Bear Stearns speculated that McCaw, in an attempt to buy time, might consider filing an antitrust suit against BellSouth with the Justice Department and U.S. District Judge Harold Greene, who oversees enforcement of the consent decree that broke up the Bell system in 1984.

[20584047] |Indeed, McCaw seemed to hint at that option in a brief statement.
[20584048] |Urging LIN directors to conduct "a fair auction on a level playing field," McCaw asked how well the public interest would be served "with the Bell operating companies controlling over 94% of all cellular {potential customers} in the nation's top 10 markets.

[20585001] |Market makers in Nasdaq over-the-counter stocks are adding their voices to the swelling chorus of complaints about program trading.

[20585002] |Their motivation, however, has a strong practical aspect: Program trading is hazardous to their paychecks.
[20585003] |The most controversial form of program trading, stock-index arbitrage, is "making it tough for traders to make money," declares Robert Antolini, head of OTC trading at Donaldson, Lufkin & Jenrette.

[20585004] |Stock-index arbitrage -- the computer-guided buying and selling of stocks with offsetting trades in stock-index futures to profit from fleeting price discrepancies -- affects the OTC market directly through the 31 stocks included in Standard & Poor's 500-stock index.
[20585005] |The S&P 500 is often used in arbitrage strategies.

[20585006] |The portion of OTC volume attributable to program trading isn't known, as it is on the New York Stock Exchange, where it amounted to more than 13% in September.
[20585007] |Estimates from traders put it at less than 5% of Nasdaq's average daily volume of roughly 133 million shares.

[20585008] |Other market-maker gripes: Program trading also causes the Nasdaq Composite Index to lose ground against other segments of the stock market.
[20585009] |Because of program trading it is more difficult to trade many OTC stocks without sharp price moves, a condition known as illiquidity.
[20585010] |Moreover, the price volatility that is amplified by program trading is undercutting efforts to woo individual investors back to an OTC market that sorely misses them.

[20585011] |Some of these problems are neither new nor unique to the OTC market.
[20585012] |But the big, often tumultuous slide in stock prices this month has turned some of those who have been profiting from the practice against it.

[20585013] |Peter DaPuzzo, head of retail equity trading at Shearson Lehman Hutton, acknowledges that he wasn't troubled by program trading when it began in the pre-crash bull market because it added liquidity and people were pleased to see stock prices rising.

[20585014] |"We weren't as concerned until they became sell programs," says Mr. DaPuzzo, who now thinks it adds unnecessary volatility.
[20585015] |Shearson Lehman, however, executes program trades for clients.

[20585016] |Merrill Lynch, Goldman Sachs and Kidder Peabody, in addition to Shearson, do program-trade OTC stocks.
[20585017] |Shearson, Merrill Lynch and Goldman Sachs say they do so only for customers, however.
[20585018] |Kidder Peabody does program trading for its own as well as clients' accounts.

[20585019] |Of course, there were sell programs in past years, too, but they seem to hurt market makers more painfully these days.
[20585020] |That's largely because of defensive measures they adopted after the 1987 crash, when individual investors fled the market and trading activity dwindled.
[20585021] |Market makers, to cut costs, slashed inventories of stocks they keep on hand to sell investors when other holders aren't selling.

[20585022] |And to protect their reduced capital investment from eroding further, market makers became quicker to lower price quotes when sell programs are in progress.
[20585023] |On days when prices are tumbling, they must be willing to buy shares from sellers when no one else will.
[20585024] |In such an environment, market makers can suffer huge losses both on trades made that day at steadily dropping prices and in the value of their inventories of shares.

[20585025] |"It makes no sense for us to put money at risk when you know you're going to lose," says Mr. Antolini, of Donaldson Lufkin.

[20585026] |But this skittishness, Mr. Antolini says, is creating liquidity problems in certain OTC stocks.
[20585027] |"It's harder to sell stocks when the sell programs come in because some market makers don't want to {take the orders}.
[20585028] |No one has big positions and no one wants to take big risks."

[20585029] |Joseph Hardiman, president of the National Association of Securities Dealers, which oversees trading on Nasdaq, agrees that program trading is hurting the market's efforts to bring back small investors.
[20585030] |But, he observes, while makers suffer losses when program trading drags the market down, they also make money when program trading pushes the prices higher.
[20585031] |"Sometimes {traders} lose sight of that," he says.

[20585032] |The OTC stocks in the S&P 500 include Nasdaq's biggest, such as Apple Computer, MCI Communications, Tele-Communications and Liz Claiborne.
[20585033] |These big stocks greatly influence the Nasdaq Composite Index.
[20585034] |When the computers say "sell," the composite tumbles as well as the Dow Jones Industrial Average.

[20585035] |The problem, market makers say, is that while the industrial average and the S&P 500 usually recover as buy programs kick in, the Nasdaq Composite frequently is left behind.

[20585036] |Eight trading days after Oct. 12, the day before the stock market plunge, for instance, the Nasdaq Composite had fallen 4.3%, compared with 3.3% for the S&P 500, 3.5% for the New York Stock Exchange Composite Index and 3.6% for the industrial average.
[20585037] |This gap eventually closes, but slowly.
[20585038] |Three days later, as of Friday's close, the Nasdaq Composite was down 6%, compared with 5.9% for the industrial average, 5.7% for the S&P 500 and 5.8% for the Big Board Composite.

[20585039] |The main reason for this lag is that individual investors own 65% of the OTC market's capitalization, according to Mr. Hardiman, much more than on the Big Board.
[20585040] |Such investors tend to be more cautious than institutional investors are about re-entering the market after massive selloffs, market makers say.

[20585041] |Friday's Market Activity

[20585042] |The Nasdaq Composite Index tumbled 5.39, or 1.2% to 452.76 on Friday.
[20585043] |For the week, the index dropped 3.8%.

[20585044] |Weakness in big technology stocks hurt the composite as well as the Nasdaq 100 Index, which fell 1.4%, or 6.43, on Friday, to 437.68.
[20585045] |The Nasdaq Financial Index lost about 1%, or 3.95, to 448.80.

[20585046] |Friday's trading volume totaled 132.8 million shares.
[20585047] |The average daily share turnover for October is almost 148 million shares.

[20585048] |LIN Broadcasting surged 4 5/8 to 112 5/8; LIN and BellSouth sweetened their merger agreement in an attempt to keep shareholders from tendering their shares to McCaw Cellular Communications.
[20585049] |McCaw, which dropped 2 1/2 to 37 3/4, has offered $125 a share for a majority of LIN's shares.

[20585050] |The revised LIN-BellSouth agreement boosts the dollar amount of the special dividend LIN promises to pay shareholders.
[20585051] |LIN now plans to dole out $42 a share in cash, up from the earlier $20 amount.

[20585052] |Intel eased 1/8 to 31 7/8.
[20585053] |The semiconductor concern said the interruption in shipment of its 80486 computer chip will be brief and have little impact on the company's earnings.
[20585054] |The stock fell 7/8 Thursday amid concerns over problems discovered with the chip.
[20585055] |Intel told analysts that the company will resume shipments of the chips within two to three weeks.

[20585056] |Weisfield's rocketed 9 1/2 to 39 after the jewelry store operator said it is in preliminary discussions, with a party it wouldn't identify, regarding the possible acquisition of the company.

[20585057] |Starpointe Savings Bank rose 3 to 20 after the Federal Deposit Insurance Corp. approved Dime Savings Bank of New York's $21-a-share acquisition of Starpointe.

[20585058] |Kirschner Medical fell 4 to 15.
[20585059] |The company said its third-quarter earnings will probably be lower than the 16 cents a share it reported last year, despite a rise in the company's revenue.
[20585060] |Kirschner earned $376,000 on revenue of $14.5 million in the 1988 quarter.
[20585061] |The company blamed a number of factors for the earnings decline, including softer sales of joint-implants.

[20586001] |London share prices closed sharply lower Friday in active trading after Chancellor of the Exchequer Nigel Lawson's resignation slapped the market and Wall Street's rapid initial sell-off knocked it down.

[20586002] |London shares were depressed initially by overnight losses in New York and by the drop in sterling after Mr. Lawson's resignation.
[20586003] |It showed some early resilience after central bank support firmed sterling, but the weight of Wall Street late in London trading, and signs of further weakness in the British pound, proved a hefty load to bear.
[20586004] |New York stocks recovered some of their losses after the London market closed.

[20586005] |The Financial Times 100-share index shed 47.3 points to close at 2082.1, down 4.5% from the previous Friday and 6.8% from Oct. 13, when Wall Street's plunge helped spark the current weakness in London.

[20586006] |The 30-share index settled 42.0 points lower at 1678.5.
[20586007] |Volume was 840.8 million shares, up from 443.6 million Thursday and the week's most active session.

[20586008] |Dealers said the turnover, largely confined to the 100-share index stocks, partly reflected the flurry of activity typical at the close of a two-week trading account and the start of a new account.
[20586009] |But they said Friday's focus on the top-tier stocks telegraphed active overseas selling and showed the broad-based fears over the status of the U.K. economy and Britain's currency in the wake of the upheaval in Prime Minister Margaret Thatcher's cabinet.

[20586010] |A senior dealer with Warburg Securities noted British Gas, the most active blue-chip stock at 20 million shares traded, was affected by the political implications of Mr. Lawson's departure and Mrs. Thatcher's cabinet shuffle.

[20586011] |He attributed the unusually high volume to broad-based selling on fears that the Thatcher government may be in turmoil and Britain's Labor Party positioned to regain control of the government and renew efforts at nationalization.

[20586012] |British Gas shed 8.5 pence a share to close at 185 pence ($2.90).

[20586013] |Other dealers added that the blue-chip stocks in general were hit by profit-taking over concerns that London shares will continue posting declines and the uncertainty over sterling given that Mr. Lawson's successor, John Major, had only been in the job one day.

[20586014] |Besides British Gas, British Steel skidded 1.74 to 123.5 on turnover of 11 million shares.

[20586015] |British Petroleum fell 5 to 286 on 14 million shares traded.
[20586016] |Dealers said the multinational oil company was pressured by recent brokerage recommendations urging investors to switch into Shell Trading & Transport.
[20586017] |Shell eased 1 to 416 on turnover of 4.8 million shares.

[20586018] |Among the other actively traded blue-chip issues, Imperial Chemical Industries dropped 11 to #10.86, Hanson skidded 9.5 to 200.5, and British Telecom fell 10 to 250.

[20586019] |In Tokyo, stocks closed lower but above intraday lows in active trading.
[20586020] |The Nikkei index was pressured down by profit-taking triggered by sharp advances made through this week and fell 151.20 points to 35527.29.

[20586021] |In early trading in Tokyo Monday, the Nikkei index fell 148.85 points to 35378.44.

[20586022] |On Friday, the Tokyo stock price index of first section issues was down 15.82 at 2681.76.
[20586023] |First-section volume was estimated at 1.3 billion shares, up from 886 million shares Thursday.

[20586024] |An official at Wako Securities said brokerages' excessive expectations about recent advances in Tokyu Group shares and real estate issues were dashed Friday.

[20586025] |Dealers placed heavy buy orders in the morning to start the first trading day for November transactions.
[20586026] |But they failed to sell these stocks to client investors, who were cautious about the sharp gains these issues made this week, the Wako official said.

[20586027] |Fund managers said Friday's profittaking was a natural result of the week's "abnormal fever" in buying real estate, shipbuilding, steel and construction shares.

[20586028] |Frankfurt prices closed lower again Friday, the fourth decline in the past five days and the culmination of a week that saw the DAX index lose 4%.
[20586029] |The DAX dropped 19.69 points Friday to 1462.93.

[20586030] |Traders said the continued turbulence in other markets, coupled with the drop in London following the Lawson resignation, were responsible.

[20586031] |Traders said that selling pressure wasn't enormous and that the DAX dropped Friday more on a lack of any substantial buying interest.
[20586032] |They said contributing to the downward drift was the fact that many professional traders had chosen to square positions ahead of the weekend.

[20586033] |"It's the whole uncertainty about what's happening around us," said Valentin Von Korff, a trader at Credit Suisse First Boston in Frankfurt.
[20586034] |"If you take away the outside influences, the market itself looks very cheap.
[20586035] |What's happening here isn't justified by the fundamentals."

[20586036] |Traders said the market remains extremely nervous because of the wild swings seen on the New York Stock Exchange last week.
[20586037] |That's leaving small investors with cold feet, they said, and prompting institutions to take a reserved stance on the sidelines as well, at least until the market in New York settles down somewhat.

[20586038] |Elsewhere, share prices closed lower in Paris, Zurich, Amsterdam, Brussels and Stockholm, and were mixed in Milan.
[20586039] |The British shakeup was widely cited for the declines.

[20586040] |Share prices also closed lower in Sydney, Hong Kong, Singapore, Taipei, Manila, Wellington and Seoul.
[20586041] |Concern about declines in other markets, especially New York, caused selling pressure.

[20586042] |Here are price trends on the world's major stock markets, as calculated by Morgan Stanley Capital International Perspective, Geneva.
[20586043] |To make them directly comparable, each index is based on the close of 1969 equaling 100.
[20586044] |The percentage change is since year-end.

[20586045] |Last week's best and worst performing stocks among those issues that make up 80% of the world's stock market capitalization (in local currency)

[20586046] |Source: Morgan Stanley Capital Intl.

[20587001] |APARTHEID FOES STAGED a massive anti-government rally in South Africa.

[20587002] |More than 70,000 people filled a soccer stadium on the outskirts of the black township of Soweto and welcomed freed leaders of the outlawed African National Congress.
[20587003] |It was considered South Africa's largest opposition rally.
[20587004] |Walter Sisulu, the ANC's former secretary general who served 26 years in prison before being released two weeks ago, urged peace, negotiation and discipline.
[20587005] |President de Klerk's government permitted the rally, and security forces didn't interfere.

[20587006] |Pretoria's approval of the demonstration and the ANC's conciliatory tone appeared aimed at setting up negotiations to give blacks political rights.

[20587007] |CONGRESSIONAL LEADERS BACKED Bush's criticism of Nicaragua's Ortega.

[20587008] |While lawmakers haven't raised the possibility of renewing military aid to the Contras following Ortega's weekend threat to end a truce, Senate Majority Leader Mitchell said on NBC-TV that Ortega had made "a very unwise move.
[20587009] |" Minority Leader Dole plans to offer a resolution tomorrow denouncing the Nicaraguan president, whose remarks came during a celebration in Costa Rica marking regional moves to democracy.
[20587010] |Ortega cited renewed attacks by the U.S.backed rebels.

[20587011] |Lawmakers must decide next month whether the Contras will get so-called humanitarian aid under a bipartisan agreement reached in March.

[20587012] |Spain's Socialist Party claimed victory in nationwide elections, saying it had retained its parliamentary majority by one seat.
[20587013] |With all the votes counted, a government spokesman said Prime Minister Gonzalez's party won 176 seats in the 350-seat Cortes, or lower house of parliament.
[20587014] |The Socialists held 184 seats going into the balloting.

[20587015] |Thousands of East Germans attended public rallies organized by the Communist leadership and demanded free speech, controls on the security forces and an end to official privileges.
[20587016] |The gatherings in East Berlin and elsewhere were viewed as part of a government effort to stop activists from staging protests to press their demands.
[20587017] |Dissidents in Czechoslovakia said the nation's pro-democracy movement was growing despite the government's move to crush a protest Saturday in Prague's Wenceslas Square.
[20587018] |More than 10,000 demonstrators had called for free elections and the resignation of Communist Party leader Milos Jakes.
[20587019] |Police detained more than 350 people.

[20587020] |Federal investigators have determined a metallurgical flaw that developed during the making of an engine disk led to the July crash of a United Airlines jetliner in Sioux City, Iowa, killing 112 people.

[20587021] |Congress sent to Bush an $8.5 billion military construction bill that cuts spending for new installations by 16%.
[20587022] |The measure also moves more than $450 million in the Pentagon budget to home-state projects from foreign bases.

[20587023] |U.S. and Soviet officials are to open a new round of talks today aimed at reducing chemical-weapons arsenals amid superpower differences over whether to stop making the gases.
[20587024] |The talks in New York are the first since Bush and Soviet Foreign Minister Shevardnadze unveiled proposals in September to scrap existing weapons.

[20587025] |Afghan guerrillas bombarded Kabul in a weekend assault that Western diplomats called one of the biggest offensives since the Soviet Union completed a troop withdrawal in February.
[20587026] |The rebels also reportedly tightened a blockade on roads leading to the capital, and government forces shelled a guerrilla-held area in western Afghanistan.

[20587027] |Lebanon's Christian leader convened an emergency meeting of his cabinet after indications that he might dissolve Parliament in an attempt to scuttle an Arab-sponsored peace plan.
[20587028] |Gen. Michel Aoun rejected the pact because it fails to provide a timetable for a Syrian troop pullout from Lebanon.

[20587029] |Authorities in Hawaii said the wreckage of a missing commuter plane with 20 people aboard was spotted in a remote valley on the island of Molokai.
[20587030] |There wasn't any evidence of survivors.
[20587031] |The plane failed to reach Molokai's airport Saturday while on a flight from the neighboring island of Maui.

[20587032] |The Oakland Athletics won baseball's World Series, defeating the San Francisco Giants in a four-game sweep.
[20587033] |An earthquake Oct. 17 in Northern California had caused a 10-day delay midway through the championship contest, which ended Saturday at San Francisco's Candlestick Park.

[20587034] |Died: Rudolf von Bennigsen-Foerder, 63, chairman of Veba AG of West Germany, in Duesseldorf, of pneumonia.

[20588001] |The West German machinery and plant equipment industry's orders rose an inflation-adjusted 1% in September from a year earlier despite a sharp drop in foreign orders, the German Association of Machinery Makers said.

[20588002] |Before adjustment for inflation, the association said, orders were up a nominal 5%.
[20588003] |While domestic orders climbed an adjusted 8% and a nominal 11% in September, foreign orders declined 4% after inflation and 1% on a nominal basis.

[20588004] |In the third quarter, orders rose a real 5% and a nominal 9%.
[20588005] |Domestic orders were up a real 11% and a nominal 14%, while foreign orders rose a real 1% and a nominal 5%.

[20589001] |When Michael S. Perry took the podium at a recent cosmetics industry event, more than 500 executives packing the room snapped to attention.

[20589002] |Mr. Perry, who runs Unilever Group's world-wide personal-care business, paused to scan the crowd.
[20589003] |"I see we have about half the audience working for us," he said, tongue in cheek.
[20589004] |"The other half, we may have before long."

[20589005] |Members of the audience gasped or laughed nervously; their industry has been unsettled recently by acquisitions.
[20589006] |First Unilever, the Anglo-Dutch packaged-goods giant, spent $2 billion to acquire brands such as Faberge and Elizabeth Arden.
[20589007] |It now holds the No. 3 position at U.S. department-store cosmetic counters.
[20589008] |Then Procter & Gamble Co. agreed to buy Noxell Corp. for $1.3 billion.
[20589009] |That acquisition, to be completed by year end, will include the Cover Girl and Clarion makeup lines, making P&G the top marketer of cosmetics in mass-market outlets.

[20589010] |It's not so much the idea of acquisitions that has agitated the cosmetics industry as the companies doing the acquiring: P&G and Unilever bring with them great experience with mundane products like soap and toilet paper, sparking disdain in the glitzy cosmetics trade; but they also bring mammoth marketing clout, sparking fear.
[20589011] |Though it is far from certain that companies best known for selling Promise margarine and Tide detergent will succeed in cosmetics, there's little doubt they will shake up the industry.

[20589012] |For now, both companies are keeping quiet about their specific plans.
[20589013] |But industry watchers expect them to blend the methodical marketing strategies they use for more mundane products with the more intuitive approach typical of cosmetics companies.
[20589014] |Likely changes include more emphasis on research, soaring advertising budgets and aggressive pricing.
[20589015] |But some cosmetics-industry executives wonder whether techniques honed in packaged goods will translate to the cosmetics business.
[20589016] |Estee Lauder Inc., Revlon Inc. and other cosmetics houses traditionally have considered themselves fashion enterprises whose product development is guided by the creative intuition of their executives.
[20589017] |Cosmetics companies roll out new makeup colors several times a year, and since most products can be easily copied by competitors, they're loath to test them with consumers.

[20589018] |"Just because upscale cosmetics look like packaged goods and smell like packaged goods, it doesn't mean they are packaged goods," says Leonard Lauder, chief executive of Estee Lauder.
[20589019] |"They're really fashion items wrapped up in little jars."

[20589020] |In contrast to the more artistic nature of traditional cosmetics houses, Unilever and P&G are the habitats of organization men in gray-flannel suits.
[20589021] |Both companies are conservative marketers that rely on extensive market research.
[20589022] |P&G, in particular, rarely rolls out a product nationally before extensive test-marketing.
[20589023] |Both can be extremely aggressive at pricing such products as soaps and diapers -- to the extent that some industry consultants predict cents-off coupons for mascara could result from their entry into the field.

[20589024] |P&G already has shown it can meld some traditional packaged-goods techniques with the image-making of the cosmetics trade in the mass-market end of the business.
[20589025] |Consider Oil of Olay, which P&G acquired as part of Richardson-Vicks International in 1985.
[20589026] |The moisturizer, introduced in 1962, had a dowdy image.
[20589027] |"Oil of Olay brought with it the baggage of being used basically by older women who had already aged," says David Williams, a consultant with New England Consulting Group.

[20589028] |P&G set out to reposition the brand by broadening the product line to include facial cleansers and moisturizers for sensitive skin.
[20589029] |It also redesigned Oil of Olay's packaging, stamping the traditional pink boxes with gold lines to create a more opulent look.
[20589030] |Moreover, P&G shifted its ad campaign from one targeting older women to one featuring a woman in her mid-30s vowing "not to grow old gracefully."
[20589031] |The company says sales have soared.

[20589032] |Goliaths like Unilever and P&G have enormous financial advantages over smaller rivals.
[20589033] |Next year, Noxell plans to roll out a perfume called Navy, says George L. Bunting Jr., chairman of Noxell.
[20589034] |Without P&G's backing, Noxell might not have been able to spend the estimated $5 million to $7 million needed to accomplish that without scrimping on its existing brands.
[20589035] |Packaged-goods companies "will make it tougher for smaller people to remain competitive," Mr. Bunting says.

[20589036] |Further consolidations in the industry could follow.
[20589037] |Rumors that Unilever is interested in acquiring Schering-Plough Corp.'s Maybelline unit are widespread.
[20589038] |Unilever won't comment; Schering, however, denies the brand is for sale.

[20589039] |The presence of Unilever and P&G is likely to increase the impact of advertising on cosmetics.
[20589040] |While the two are among the world's biggest advertisers, most makers of upscale cosmetics spend relatively little on national ads.
[20589041] |Instead, they focus on events in department stores and pour their promotional budgets into gifts that go along with purchases.
[20589042] |Estee Lauder, for example, spends only an estimated 5% of sales on advertising in the U.S., and Mr. Lauder says he has no plans to change his strategy.

[20589043] |The most dramatic changes, however, probably will come in new-product development.
[20589044] |Nearly 70% of cosmetics sales come through mass-distribution outlets such as drug stores and supermarkets, according to Andrew Shore, an analyst at Shearson Lehman Hutton Inc.
[20589045] |That figure has been inching up for several years.
[20589046] |As the trend continues, demand for mass-market items that are high quality but only mid-priced -- particularly skin-care products -- is expected to increase.
[20589047] |This fall, for example, L'Oreal Group, ordinarily a high-end line, rolled out a drug-store line of skin-care products called Plenitude, which retail for $5 to $15.

[20589048] |The packaged-goods marketers may try filling that gap with a spate of new products.
[20589049] |Unlike the old-line cosmetics houses, Unilever and P&G both have enormous research and development bases to draw on for new products.
[20589050] |P&G, in fact, is noted for gaining market leadership by introducing products that offer a technical edge over the competition.
[20589051] |Sales of its Tide detergent soared earlier this year, for example, after P&G introduced a version that includes a bleach safe for all colors and fabrics.

[20589052] |That's led industry executives to speculate that future product development will be driven more by technological innovation than by fashion whims -- especially among mass-market brands.
[20589053] |"There will be more emphasis on quality," says Guy Peyrelongue, chief executive of Cosmair Inc., the U.S. licensee of L'Oreal.
[20589054] |"You'll see fewer gimmicks."

[20589055] |But success for Unilever and P&G is far from guaranteed, as shown by the many consumer-product companies that have tried and failed to master the quirky beauty business.
[20589056] |In the 1970s, several pharmaceutical and packaged-goods companies, including Colgate-Palmolive Co., Eli Lilly & Co., Pfizer Inc. and Schering-Plough acquired cosmetics companies.
[20589057] |Industry consultants say only Schering-Plough, which makes the mass-market Maybelline, has maintained a meaningful business.
[20589058] |Colgate, which acquired Helena Rubenstein in 1973, sold the brand seven years later after the brand languished.

[20589059] |Unilever already has experienced some disappointment.
[20589060] |The mass-market Aziza brand, which it acquired in 1987 along with Chesebrough-Pond's Inc., has lost share, according to industry analysts.

[20589061] |The ritzy world of department-store cosmetics retailing, where Unilever is concentrating its efforts, may prove even more treacherous.
[20589062] |In this niche, makeup colors change seasonally because they are linked to ready-to-wear fashions.
[20589063] |Because brand loyalty is weak and most cosmetics purchases are unplanned, careful training of store sales staffs by cosmetics companies is important.
[20589064] |And cultivating a luxury image strong enough to persuade consumers to pay more than $15 for lipstick or eye makeup requires a subtle touch that packaged-goods companies have yet to demonstrate on their own.

[20590001] |There may be a truce in the long war of nerves between the White House and Congress over how this country conducts secret intelligence operations abroad.

[20590002] |After years of mistrust born of Watergate, past misdeeds of the Central Intelligence Agency, and the Iran-Contra scandal, President Bush and the Senate Intelligence Committee appear ready -- for now, at least -- to trust each other when it comes to setting policy on covert activities.
[20590003] |If that attitude lasts, it could infuse covert action planning with a level of care and confidence that hasn't been seen in years.

[20590004] |Over the past week, the president has agreed to keep the committee informed, usually in advance, of covert actions and to put key intelligence decisions in writing.
[20590005] |That wasn't always the way the Reagan administration handled such matters.

[20590006] |Mr. Bush has pledged as well to respect the 14-year-old executive order barring U.S. agents from assassinating foreign leaders or helping others to do so.
[20590007] |Congress never fully trusted former CIA chief William Casey and National Security Adviser John Poindexter to honor the ban.

[20590008] |Despite objections by the CIA, Mr. Bush also has agreed to the establishment of an inspector general at the CIA who would be independent of the CIA director.

[20590009] |In return, the Senate panel has dropped efforts to enact legislation requiring the administration to inform it within 48 hours of the launching of any covert activity.
[20590010] |It also has removed a ban on CIA use of a contingency fund for covert acts and has agreed to wipe away some tortured and legalistic restrictions on coup planning put in place to ensure that the CIA didn't get back in the assassination game.

[20590011] |"We've finally been able to convince them that Casey and {Oliver} North don't work here anymore," says one administration official.

[20590012] |The new understanding didn't just spring to life in a spontaneous eruption of sweetness and light.
[20590013] |It emerged after a rancorous display of old-style intelligence politics that followed this month's failed coup attempt in Panama.

[20590014] |The White House used television appearances and leaks to argue that congressionally imposed restrictions on covert actions made U.S. support for such coups difficult.
[20590015] |Mr. Bush even disclosed privately that one Reagan-era deal with Congress required him to notify the odious Panamanian dictator, Manuel Noriega, if the U.S. learned of a coup plot that might endanger his life.
[20590016] |The president also hinted he might veto this year's intelligence authorization bill if it is too restrictive.

[20590017] |Intelligence Committee Chairman David Boren (D., Okla.) and Vice Chairman William Cohen (R., Maine), for their part, angrily accused the White House of selectively leaking classified documents and trying unfairly to shift the blame to Congress for the bungled attempt to topple Gen. Noriega.

[20590018] |The White House got the better of the exchange but took care not to press its advantage to the kind of constitutional confrontation sought by conservative Republicans who don't want any congressional oversight of intelligence activities.
[20590019] |Instead, Mr. Bush and his aides made it clear they respected Congress's role and felt they could work with the conservative Mr. Boren and the moderate Mr. Cohen to iron out their differences.

[20590020] |The senators responded in kind.
[20590021] |Sen. Boren happily told reporters that there had been "a meeting of the minds" with the White House, and that the committee had given Mr. Bush "a clean slate," free of the impediments imposed during the Reagan years.
[20590022] |Sen. Cohen said the relationship has reverted to its pre-Reagan character.

[20590023] |There still are some details to be nailed down.
[20590024] |Mr. Bush is reserving the right in "rare" instances to keep Congress in the dark, asserting a constitutional prerogative the committee doesn't recognize.
[20590025] |And a pending Justice Department interpretation of the assassination ban could raise questions that would have to be settled.

[20590026] |Moreover, both sides may face political critics.
[20590027] |Some conservatives will accuse the president of promising Congress too much.
[20590028] |And they continue anonymously attacking CIA Director William Webster for being too accommodating to the committee.
[20590029] |At the same time, some congressional liberals will accuse Sens. Boren and Cohen of wimping out, and they will warn that the lawmakers' concessions raise the specter of more internationally embarrassing covert operations like the mining of Nicaraguan harbors and the Iran arms sales.

[20590030] |But if the cooperative attitude holds and there is greater consultation on covert activities, the country could be entering an era when such hare-brained schemes are scrapped before they get off the drawing boards, while risky but well-planned secret operations can be undertaken without fear that a panicky Congress will balk.

[20591001] |Several of the New York Stock Exchange's own listed companies, led by giant Contel Corp., are joining for the first time to complain about program trading and the exchange's role in it.

[20591002] |Claiming program trading has turned the Big Board into a "gambling casino," Contel Chairman Charles Wohlstetter said that he and at least 20 other corporate executives are forming an unprecedented alliance.
[20591003] |The group, Mr. Wohlstetter said in an interview, wants to end the market's wild price swings that critics blame on computer-aided program-trading strategies.
[20591004] |The group will complain to Washington, to the heads of program-trading firms and to the heads of the Big Board itself, he said.

[20591005] |"They should call {the exchange} Trump East," charged Mr. Wohlstetter, the 79-year-old founder of Contel who's also a former investment banker and stock trader.
[20591006] |"What is the mission of the financial community --
[20591007] |to help some scavengers or schemers, or help corporate America?"
[20591008] |Contel is a $6 billion telephone and electronics company.

[20591009] |Pressure has been building on the Big Board in the past two weeks to do something about market volatility, which many investors say is caused by program trading.
[20591010] |The market's Friday-the-13th plunge of 190 points in the Dow Jones Industrial Average, and the Big Board's understated response to it, galvanized some longstanding dissatisfaction among companies listed on the exchange.
[20591011] |Last month, program trading accounted for a record 13.8% of average daily Big Board volume.

[20591012] |Mr. Wohlstetter, for example, said he wrote to Big Board Chairman John J. Phelan Jr. about program trading after the 190-point Dow plunge, and as in previous queries, "what I get back is gobbledygook."
[20591013] |He said he's upset that Mr. Phelan, trying to calm investors after the plunge, said that investors would simply have to get used to the market's big price swings.
[20591014] |The Big Board "is partly to blame {for the price swings}, because they're cowards," said Mr. Wohlstetter.
[20591015] |"Their powerful members manage them."

[20591016] |The focus of the outcry has been stock-index arbitrage, which accounts for about half the program trading that goes on.
[20591017] |Index arbitragers argue that their trading is healthy because it links markets, but critics say such trading accelerates market movements and increases the chance for a crash.

[20591018] |The Big Board has refused to be drawn into a public debate about program trading.
[20591019] |Richard Grasso, Big Board president, last week said only that the exchange is concerned about all its constituents.
[20591020] |Privately, exchange officials worry that without a hospitable system for program trading at the Big Board, billions of dollars in trading will simply migrate to overseas exchanges such as London's.
[20591021] |It is partly for this reason that the exchange last week began trading in its own stock "basket" product that allows big investors to buy or sell all 500 stocks in the Standard & Poor's index in a single trade.
[20591022] |One intended customer of the new basket product is index arbitragers, according to the exchange.

[20591023] |Investors have complained for some time about program trading, particularly index arbitrage, to little avail.
[20591024] |But according to some Big Board traders, an organized campaign from exchange-listed companies might make the exchange finally consider big changes.
[20591025] |"They won't fight the listed companies.
[20591026] |Now the assault is on," said one top trader.
[20591027] |The Big Board can't ban stock-index futures, of course, but it could ban use of its high-speed electronic trading system for program trading or at least encourage securities firms to back off.
[20591028] |The exchange put a bit of a damper on program trading when, last year, it simply started to publish monthly statistics of each firm's program-trading volume.

[20591029] |Contel's Mr. Wohlstetter said the group of Big Board companies isn't ready to go public yet with its effort, and that he doesn't plan to be the leader once it is public.
[20591030] |However, he said he planned to spend the weekend making calls to gather additional support.
[20591031] |Among those Mr. Wohlstetter said he has been talking to are Sanford Weill of Primerica Corp., which is the parent of Smith Barney, Harris Upham & Co.; GTE Corp.'s James Johnson, and ITT Corp.'s Rand Araskog.

[20591032] |None of these chief executives were available for comment.

[20591033] |Among the targets of the Big Board companies' campaign will be some corporate pension funds that use program-trading strategies to maximize returns on their investments.
[20591034] |For Contel's part, the company a month ago informed each of its money managers that it would drop them if they give business to program-trading firms.

[20591035] |It was just those kinds of ultimatums that last week succeeded in turning up the heat in the debate.
[20591036] |Kemper Corp.'s Kemper Financial Services unit said it cut off Bear Stearns, Morgan Stanley, Oppenheimer and General Electric Co.'s Kidder, Peabody & Co. unit.
[20591037] |All of the firms except Kidder, which is the second-biggest program trader on Wall Street, quickly announced pull-backs from index arbitrage.

[20591038] |Kidder officials stand by their aggressive use of program trading.
[20591039] |Chief Executive Officer Michael Carpenter said that despite the outcry even by some of Kidder's own brokers, he believes index arbitrage doesn't have a "negative impact on the market as a whole.
[20591040] |" However, pressure on Kidder's parent, GE, could change Kidder's policy.
[20591041] |GE Chairman John Welch has been "besieged with phone calls" complaining about his unit's program trading, according to a person close to him.

[20592001] |Margaret Thatcher's instinctive response to the latest upheaval in her government is to promise business as usual.
[20592002] |That may be the last thing she needs.

[20592003] |As the air clears from last week's storm of resignations and reshufflings, the government faces a daunting job of rebuilding confidence in its policies.
[20592004] |The prime minister and her new chancellor of the exchequer, the untested John Major, need to haul the country through something like a recession to bring down inflation and set the economy moving again.
[20592005] |Mrs. Thatcher has to come to terms with European economic integration, beginning with the European Monetary System, which Britain is committed to joining fully someday.
[20592006] |Finally, the government has to convince a rattled financial community -- and voters -- it is proceeding coherently toward its goals.

[20592007] |It sounds like the work of a decade, but the deadline is late 1991, when Mrs. Thatcher is expected to call another national election.
[20592008] |What's worrying her supporters is that the economic cycle may be out of kilter with the political timetable.
[20592009] |She could end up seeking a fourth term in an economy sick with inflation, high interest rates and a heavy trade deficit.

[20592010] |Though Mrs. Thatcher has pulled through other crises, supporters wonder if her steely, autocratic ways are the right formula today.
[20592011] |"There's a rising fear that perhaps Mrs. Thatcher's style of management has become a political liability," says Bill Martin, senior economist at London brokers UBS-Phillips & Drew.

[20592012] |The prime minister's insistence on keeping a private coterie of advisers -- including an economic guru who openly criticized former Chancellor of the Exchequer Nigel Lawson -- confused the financial community.
[20592013] |Last week, the strategy of playing the two experts off each other blew up: Mr. Lawson quit in exasperation and Sir Alan Walters, the adviser, announced his resignation within an hour.

[20592014] |The confusion could be costly.
[20592015] |Currency traders, suspecting Mr. Major won't defend the pound strenuously, sent the British currency sharply lower Friday against the dollar and West German mark.
[20592016] |Analysts expect further jitters this week.

[20592017] |A continuing slide in the pound could force the government to push through another rise in the base rate, currently 15%.
[20592018] |That could shove a weak economy into recession.
[20592019] |Economists have been anticipating a slump for months, but they now say it will be deeper and longer than they had thought.
[20592020] |Britain's economy "is developing rapidly toward no-growth," says J. Paul Horne, international economist with Smith Barney, Harris Upham Co. in Paris.

[20592021] |A mild slowdown probably would have run its course by early 1991, economists say, while the grueling downturn now expected could stretch into 1992.
[20592022] |Recovery could be hampered if Britain's major trading partners in Europe, which are enjoying robust economic activity, cool off as expected in late 1990 and 1991.

[20592023] |That would leave Mrs. Thatcher little room for maneuver.
[20592024] |For the Tories to win the next election, voters will need to sense economic improvement for about a year beforehand.
[20592025] |Though Mrs. Thatcher doesn't need to call an election until June 1992, she would prefer doing so in late 1991.
[20592026] |"If the economy shows no sign of turning around in about year's time, she will be very vulnerable," says John Barnes, a lecturer at the London School of Economics.

[20592027] |There's an equally pressing deadline for the government to define its monetary and economic ties to the rest of the European Community.
[20592028] |It has sent mixed signals about its willingness to take part in the exchange-rate mechanism of the European Monetary System, which links the major EC currencies.
[20592029] |At a June EC summit, Mrs. Thatcher appeared to ease her opposition to full EMS membership, saying Britain would join once its inflation rate fell and the EC liberalized capital movements.

[20592030] |Since then, the government has left observers wondering if it ever meant to join.
[20592031] |Sir Alan assailed the monetary arrangement as "half-baked" in an article being published in an American economics journal.
[20592032] |That produced little reaction from his boss, reinforcing speculation the government would use its two conditions as a pretext for avoiding full EMS membership.

[20592033] |Despite the departure of Mr. Lawson and Sir Alan, the tug-of-war over the EMS could continue.
[20592034] |Sir Geoffrey Howe, deputy prime minister and a Lawson ally on the EMS, has signaled he will continue pressing for early membership.

[20592035] |Of immediate concern is whether the Thatcher government will continue Mr. Lawson's policy of tracking the monetary policies of the West German Bundesbank and responding in kind when the Frankfurt authorities move interest rates.
[20592036] |Mrs. Thatcher "doesn't like taking orders from foreigners," says Tim Congdon, economist with Gerrard & National Holding PLC.

[20592037] |As Conservatives rally around Mrs. Thatcher during the crisis, many harbor hopes last week's debacle will prompt change.
[20592038] |"We won't have any more of this wayward behavior," says Sir Peter Hordern, a backbench Tory member of Parliament.
[20592039] |"The party is fed up with sackings of good people."

[20592040] |It's an unrealistic expectation.
[20592041] |As long as a decade ago, Mrs. Thatcher declared she didn't want debate in her cabinet; she wanted strong government.
[20592042] |Over the weekend, she said she didn't intend to change her style and denied she is authoritarian.
[20592043] |"Nonsense," she told an interviewer yesterday on London Weekend Television.
[20592044] |"I am staying my own sweet, reasonable self.

[20593001] |Joseph L. Dionne, chairman and chief executive officer of McGraw-Hill Inc., was elected to the board of directors of this electronics manufacturer.
[20593002] |He succeeds the retiring James W. Wilcock.

[20594001] |Base Data

[20594002] |Computers that once were the state of the art, The marvels bought three years ago, Are now obsolete.
[20594003] |As we queasily start The search for replacements, we know The new one we purchase in hopes it will do, Despite every wonder that's stated, Means more speed, more graphics, more memory, too, But also more quickly out- dated!

[20594004] |-- Bern Sharfman.

[20594005] |Curdling Confession

[20594006] |I know when dividends are due; When bonds should be retired; But what gets by me every time Is has the milk expired?

[20594007] |-- Ralph Shaffer.

[20594008] |Daffynition

[20594009] |Tithing: Obedience to one-tenth Commandment.

[20594010] |-- Len Elliott.

[20595001] |Wives May Not Benefit When Men Do Chores

[20595002] |WHEN HUSBANDS take on more housework, they tend to substitute for chores done by the kids rather than by the wife.

[20595003] |Rand Corp. researchers Linda Waite and Frances Goldscheider analyzed a large sample of married women with at least one child at home between the ages of six and 18.
[20595004] |The women indicated which family member usually did various household chores and the approximate share each did.

[20595005] |Not unexpectedly, wives, whether working or non-working, did by far the most -- about 80% of the shopping, laundry and cooking, and about two-thirds of housecleaning, washing dishes, child care and family paper work.
[20595006] |Only for yardwork and home maintenance did women do less than half.

[20595007] |But the researchers found that while children's household tasks eased the mother's burden appreciably, the husband's helping hand "appears to lighten the children's load almost on a one-for-one basis and to reduce the wife's responsibility only modestly."

[20595008] |This pattern was particularly evident among more highly educated couples.
[20595009] |In these families, husbands took on 80% more chores than in couples with only grammar school education.
[20595010] |But the kids with highly educated parents did 68% less housework than those in less-educated families.

[20595011] |"It is clear," Ms. Waite says, "that most of the effect of increasing education has been to shift who is helping the wife/mother.
[20595012] |Her share decreases, but only slightly."

[20595013] |Nursing Home Patients Apt to Be Private Payers

[20595014] |FAR FEWER elderly nursing home residents bankrupt themselves than was previously believed, two recent studies declare.

[20595015] |State governments place very low ceilings on how much property people may own or how much income they may keep if they want welfare help on medical bills.
[20595016] |Conventional wisdom has long held that anywhere from one-fourth to one-half of all elderly long-term care patients are obliged to spend themselves into poverty before qualifying for Medicaid assistance.
[20595017] |But separate reports from Joshua Weiner and Denise Spence of the Brookings Institution and Korbin Liu of the Urban Institute find that "a surprisingly small proportion" -- only about 10% -- of residents start out as private payers but "spend down" to Medicaid levels in a single nursing home stay before they die or are discharged.
[20595018] |(Another one-third are already on Medicaid when they enter the nursing homes, a considerably higher proportion than the analysts anticipated.)

[20595019] |But a remarkably high percentage -- over half -- are private payers throughout their stay, even a fairly lengthy one.
[20595020] |About one-third pay out of their own pockets, while the rest are covered throughout by Medicare, private insurers or the Veterans Administration.
[20595021] |Both reports are based on several thousand patients sampled in a 1985 nationwide government survey.

[20595022] |The Brookings and Urban Institute authors caution, however, that most nursing home stays are of comparatively short duration, and reaching the Medicaid level is more likely with an unusually long stay or repeated stays.
[20595023] |Moreover, they note, those who manage to pay their own way often do so only by selling their homes, using up life savings or drawing heavily on children and other relatives.

[20595024] |Reagan Era Young Hold Liberal Views

[20595025] |THE REAGAN generation young men and women reaching political maturity during Ronald Reagan's presidency -- are firmly liberal on race and gender, according to NORC, the social science research center at the University of Chicago.

[20595026] |Many political analysts have speculated that the Reagan years would produce a staunchly conservative younger generation.
[20595027] |NORC's most recent opinion surveys find the youngest adults indeed somewhat more pro-Reagan and pro-Republican than other adults.
[20595028] |But, says chief investigator Tom Smith, this "does not translate into support for conservatism in general or into conservative positions on feminist and civil rights issues."

[20595029] |Answers to a dozen questions in the 1986, 1987, 1988 and 1989 national surveys reveal that men and women in the 18 to 24 age bracket are considerably more liberal on race and gender than were the 18 to 24 year olds in NORC's polling in the early 1970s and early 1980s.
[20595030] |They were also as liberal or more liberal than any other age group in the 1986 through 1989 surveys.

[20595031] |For example, 66% of the 18 to 24 year olds in the four latest surveys favored an "open housing" law prohibiting homeowners from refusing on racial grounds to sell to prospective buyers.
[20595032] |That compares with 58% of the similar age group in the 1980 through 1982 surveys and 55% in the 1972 through 1975 surveys.

[20595033] |Asked whether they agreed or disagreed with the claim that men are emotionally better suited to politics than women, 70% of the Reagan generation disagreed, compared with under 60% of younger men and women in the earlier years.
[20595034] |Odds and Ends

[20595035] |SEPARATED and divorced men and women are far more likely to be smokers than married persons, the Centers for Disease Control discovers. . . .
[20595036] |Graduate students are taking longer than ever to get their doctor of philosophy degrees, the National Research Council says.
[20595037] |It estimates the time between college graduation and the awarding of a Ph. D. has lengthened by 30% over the past 20 years, with the average gap now ranging from about 7.4 years in the physical sciences to 16.2 years in education.

[20596001] |October was an edgy month for the practitioners of glasnost, the official Soviet policy of allowing more candor from the nation's media.
[20596002] |For one of the superstars of glasnost, Vitaly Korotich, editor of the trail-blazing weekly Ogonyok, Friday, Oct. 20 was a somersaulting day that turned from tension to elation.

[20596003] |He had been summoned to the Central Committee of the Soviet Communist Party, after he finished his lunch at the Savoy Hotel, an unlikely prelude to a bureaucratic brow-beating: Eight-foot-tall Rubenesquely naked ladies float on their canvases toward a ceiling teeming with cherubs, all surrounded by gilt laid on with a pastry chef's trowel and supported by marble corinthian columns whose capitals are fluting fountains of gold.

[20596004] |Why had Mr. Korotich been called?
[20596005] |"I told my driver," he said, "that he was taking my butt to the Central Committee so they can . . ." whack, whack, whack his hand made vigorous spanking gestures on his left palm. "
[20596006] |They feel the need from time to time to `educate' me."

[20596007] |And indeed, as he later reported, that was the import of the meeting.
[20596008] |Anxious allies of President Mikhail Gorbachev are cautioning media leaders to take it easy, to be careful not to do anything that could be used by Mr. Gorbachev's opponents.
[20596009] |The government is nervous.
[20596010] |According to Mr. Korotich, who was present, Mr. Gorbachev's publicized tongue-lashing of the press on Oct. 13 was more of a plea: "Be careful boys; use good judgment.
[20596011] |We're standing in gasoline, so don't smoke!"

[20596012] |U.S. and northern European diplomats confirm Mr. Korotich's assessment that glasnost is in no immediate danger.
[20596013] |In fact, a very high-ranking Soviet official told an American official at a diplomatic dinner that no change in the policy was contemplated.
[20596014] |The day after that conversation at the residence of the U.S. ambassador, the Brezhnevite editor of Pravda, Victor Afnasjev, was replaced by a college classmate of Mr. Gorbachev's.
[20596015] |Brezhnevite holdovers have more to fear from Mr. Gorbachev than the verbal spanking he gave to the press.

[20596016] |At the end of the very week in which Mr. Korotich was called to the Central Committee, Ogonyok was again demonstrating its independence by printing a poll that showed that 35% of the Soviet population, a plurality, believed that Mr. Gorbachev's economic reforms, perestroika, would result in only insignificant change.

[20596017] |A good measurement of the popularity of ice-breaker journals like Ogonyok is circulation.
[20596018] |When Mr. Korotich took it over in 1986, it sold 250,000 copies; today it sells 3.4 million.
[20596019] |Pravda, meanwhile, has retained only 57% of its 1986 readership.

[20596020] |Glasnost has made celebrities of men like Mr. Korotich.
[20596021] |Prevented by the Communist Party from getting on its slate of nominees for the new Supreme Soviet, he stood as an independent candidate for Congress from his native Ukraine and won with 84% of the vote.
[20596022] |The same evening that he was summoned for a warning from the Party, he was cheered by thousands of his supporters at a rally of what can only be called the Korotich party.

[20596023] |But as astounding as the changes that have already occurred are, there is a fragility to glasnost.
[20596024] |Censorship isn't a Marxist invention.
[20596025] |The czars were no civil libertarians.
[20596026] |As late as the 1890s, the Russian government prevented any coverage of famines.
[20596027] |It even directed newspapers not to publish anything that might stain the honor of the Turkish sultan's wives.
[20596028] |So glasnost is not a value woven with steel threads into the fabric of Russian society.
[20596029] |It is an admirable public relations program initiated by a single political leader during a four-year blink of history.
[20596030] |It is public relations of the highest sophistication, that recognizes that credibility is enhanced by honesty -- up to a point.

[20596031] |What is that point?
[20596032] |Will Ogonyok begin a series of reports analyzing the failures of perestroika?
[20596033] |"I'd be destroying myself," replies Mr. Korotich, who then asks, "What would that accomplish?
[20596034] |" His answer reveals his vulnerability -- it also draws the line that Soviet society must cross to enter the normal dialogue of Western culture.
[20596035] |It is the line beyond which the press can report not only on the bankruptcy of factories but on the failures of even admirable leaders.

[20596036] |Mr. Ayers is editor and publisher of the Anniston, Ala., Star.

[20597001] |A state trial judge in Illinois gave preliminary approval to a proposed settlement of a suit against a Bank of New York Co. unit, Irving Trust Co., over the interest rates on Irving's former One Wall Street Account money-market deposit accounts.

[20597002] |Judge Albert Green, in Cook County Circuit Court in Chicago, also recognized the suit, filed last May by Robert and Cynthia Langendorf, as a class action covering thousands of Irving customers.
[20597003] |The plaintiffs accused Irving of paying less interest than promised in a marketing brochure.
[20597004] |Irving maintained -- and still does -- that its actions were proper under its account agreements with customers.

[20597005] |Under the proposed settlement, customers with valid claims -- to be submitted by Dec. 15 -- will receive "valuable bank services," such as credit cards with reduced finance charges, for two years.
[20597006] |Larry Drury, attorney for the plaintiffs, valued the settlement at between $6 million and $8 million.
[20597007] |A Bank of New York spokesman in Manhattan, Owen Brady, said, "That's the maximum, outside figure.

[20598001] |Federal Reserve critics used to complain of "stop and go" monetary policies.
[20598002] |They claimed that the Fed would first give a green light to the economy by making credit readily available and then turn on the red and bring growth to a screeching halt.
[20598003] |But under Alan Greenspan that has changed.
[20598004] |A supremely cautious man, the Fed chairman is forever blinking yellow.

[20598005] |Indeed, his caution has become legendary within the government.
[20598006] |He fusses endlessly over economic statistics, dissecting them in dozens of ways, probing for hours in search of potential problems.
[20598007] |After thoroughly digesting reams of information, he often concludes that more data are needed, and when he finally decides to act, his movements sometimes seem excrutiatingly small.

[20598008] |Such caution was evident after the recent Friday-the-13th stock market plunge.
[20598009] |Some Bush administration officials urged Mr. Greenspan to make an immediate public announcement of his plans to provide ample credit to the markets.
[20598010] |But he refused, claiming that he wanted to see what happened Monday morning before making any public statement.

[20598011] |Mr. Greenspan's decision to keep quiet also prompted a near-mutiny within the Fed's ranks.
[20598012] |A "senior Fed official" spoke on Saturday after the market swoon to both the Washington Post and the New York Times, saying the Fed was prepared to provide as much credit as the markets needed.
[20598013] |The statement angered Chairman Greenspan, but it was greeted with applause by the Bush administration and the financial markets.
[20598014] |And, while the mutinous Fed member hasn't gone public, some Fed governors, most notably Vice Chairman Manuel Johnson, are known to have disagreed with the chairman's decision to remain silent.
[20598015] |Ironically, the anonymous official's comments have earned some plaudits for Mr. Greenspan, who is mistakenly seen as the source.
[20598016] |At a hearing last week, Democratic Sen. Chris Dodd of Connecticut told Treasury Secretary Nicholas Brady that "Chairman Greenspan's" announcement over the Oct. 13 weekend was a "very important statement."
[20598017] |Mr. Brady hesitantly replied that he wasn't sure whether Mr. Greenspan "made a statement himself, or whether that was a newspaper report."

[20598018] |The Fed chairman's caution was apparent again on the Monday morning after the market's plunge, when the central bank took only modest steps to aid the markets.
[20598019] |A surprisingly small amount of reserves was added to the banking system.
[20598020] |And, by the end of that week, the key federal funds interest rate, which is largely controlled by the Fed, had settled at 8.75%, barely changed from the level of just under 9% that prevailed the previous week.

[20598021] |Bush administration officials appear increasingly concerned that Mr. Greenspan is cautious to a fault.
[20598022] |Signs of growing weakness in the economy, paired with indications that inflation is staying well under control, have caused them to wonder why the Fed chairman is so grudging in reducing rates.

[20598023] |Those concerns aren't expressed in public.
[20598024] |In fact, the administration and the Fed have been going out of their way in the past two weeks to dispel any impression that they are at odds, fearing stories about an administration-Fed split added to the stock market's jitters.
[20598025] |Still, the split is there.

[20598026] |The administration's concerns are understandable.
[20598027] |The economy is showing signs of weakness, particularly among manufacturers.
[20598028] |Exports, which played a key role in fueling growth over the last two years, seem to have stalled.
[20598029] |Factory payrolls and production fell in September, and the auto industry and housing are in a severe crunch.

[20598030] |But Mr. Greenspan remains reluctant to loosen policy, partly because he faces a phalanx of presidents of regional Fed banks who oppose credit easing.
[20598031] |In addition, the chairman has a wary eye aimed a year or two down the road.
[20598032] |Inflation may be stable at the moment, running at about 4.5%.
[20598033] |But if the Fed eases too soon, Mr. Greenspan fears, prices may begin to accelerate again next year.
[20598034] |Moreover, if the Fed holds tight, it may be able gradually to reduce inflation, moving toward the zero-inflation goal that the Fed chairman embraced in testimony to Congress last week.

[20598035] |So far, Mr. Greenspan's cautious approach to policy has served both him and the nation well.
[20598036] |His hand on the monetary tiller seems one reason why the economy next month seems highly likely to begin an unprecedented eighth year of peacetime growth without a recession.
[20598037] |"We've gotten through two stock market crashes, and we've gone through an election without any major problems," says David Hale, an economist of Kemper Financial Services.
[20598038] |"I think you have to give Greenspan a good rating."

[20598039] |But such caution is no guarantee against mistakes.
[20598040] |The Fed's reluctance to ease credit now could be laying the groundwork for a new recession, perhaps starting early next year.
[20598041] |If that happens, Chairman Greenspan could well become an open target.
[20598042] |Already, Congress is toying with legislation to curb the Fed's independence.
[20598043] |If the economy turns down, such proposals could gain strong momentum.

[20599001] |The following issues were recently filed with the Securities and Exchange Commission:

[20599002] |ECI Environmental Inc., initial offering of 1.1 million shares, of which ECI will sell 990,000 and co-founders will sell 110,000 shares, via Oppenheimer & Co.

[20599003] |Fastenal Co., proposed offering of 400,000 common shares by holders, via Robert W. Baird & Co. and William Blair & Co.

[20599004] |First Capital Holdings Corp., proposed offering of $275 million of floating rate senior notes, via Shearson Lehman Hutton Inc.

[20599005] |Industrial Funding Corp., initial offering of common stock, via Alex. Brown & Sons Inc. and Piper Jaffray & Hopwood.

[20599006] |Parametric Technology Corp., initial offering of 1.7 million common shares, of which 1,365,226 shares will be sold by the company and 334,774 shares by holders, via Alex Brown & Sons, Hambrecht & Quist and Wessels, Arnold & Henderson.

[20599007] |Union Camp Corp., shelf offering of up to $250 million of debt securities.