[21400001] |CRI Inc. said it reduced the estimated cash distribution for its Capital Housing and Mortgage Partners Inc. trust to between 71 cents and 74 cents a share, from between 75 cents and 80 cents, for the year ending June 9, 1990.

[21400002] |The change in expected cash distributions from the Champs real estate investment trust stems from a revised estimate of administrative costs, said Jay R. Cohen, Champs executive vice president.

[21400003] |CRI, which sponsors Champs, is a world-wide real estate investment firm.

[21401001] |H&R BLOCK Inc. had net income of $100.2 million, or $1.90 a share, in the fiscal year ended April 30.
[21401002] |The figure was incorrectly shown as a net loss in a chart accompanying Friday's Heard on the Street column.

[21402001] |Your Oct. 2 article on Daniel Yankelovich cited the quote "A good name is better than great riches" as being from Cervantes' "Don Quixote."
[21402002] |Actually, Cervantes borrowed that quote from a writer of some 25 centuries earlier: Israel's King Solomon wrote those words in the Book of Proverbs (22:1).

[21402003] |Michael E. Hill

[21403001] |Japan had an unadjusted trade surplus of $1.82 billion for the first 10 days of October, down from $3.16 billion a year earlier, the Finance Ministry said.

[21403002] |The latest drop shows the narrowing in the nation's trade gap reflected in successive full monthly reports is continuing.
[21403003] |The report follows five-consecutive declines in full monthly figures.

[21403004] |Imports rose sharply in the period, to $5.19 billion from $4.04 billion a year earlier, a change of 28%.
[21403005] |Exports during the period were $7.01 billion, 2.6% below $7.20 billion a year ago.

[21404001] |Groupe AG's chairman said the Belgian insurer is prepared to give up some of its independence to a white knight if necessary to repel a raider.

[21404002] |Amid heavy buying of shares in Belgium's largest insurer, Maurice Lippens also warned in an interview that a white knight, in buying out a raider, could leave speculators with big losses on their AG stock.
[21404003] |Since the beginning of the year, the stock has nearly doubled, giving AG a market value of about 105 billion Belgian francs ($2.7 billion).

[21404004] |The most likely white knight would be Societe Generale de Belgique S.A., which already owns 18% of AG and which itself is controlled by Cie. Financiere de Suez, the acquisitive French financial conglomerate.
[21404005] |But Mr. Lippens said a rescue also could involve Asahi Mutual Life Insurance Co., which owns 5% of AG.

[21404006] |AG is hardly alone in its anxiety.
[21404007] |A rambunctious shake-up is quickly reshaping Europe's once-stately insurance business.
[21404008] |Worried by European Community directives that will remove many of the barriers to cross-border insurance services, starting in mid-1990, insurers are rushing to find partners and preparing for price wars.
[21404009] |In West Germany and the Netherlands, insurers are flirting with banks.
[21404010] |In France, Suez and Axa-Midi Assurances S.A. both have been on the prowl for giant acquisitions; Suez last month acquired control of Groupe Victoire, the sixth-largest European insurance company, after a takeover battle with Cie. Industrielle.

[21404011] |Mr. Lippens said the volume of shares changing hands has grown significantly since mid-September.
[21404012] |But he estimated that a raider would have been able to amass no more than 4% of the shares in recent months.

[21404013] |Aside from exploring plans for joint ventures or acquisitions, Mr. Lippens has called top managers of companies rumored as potential raiders -- among them, Axa-Midi, Union des Assurances de Paris and Suez, all based in France.
[21404014] |They have all "very clearly stated that they have not acquired and are not acquiring shares of AG," he said.

[21404015] |Any raider would find it hard to crack AG's battlements.
[21404016] |A "syndicate" of shareholders holds just under 50% of AG, Mr. Lippens said, and members have agreed to give one another the right of first refusal should they sell any AG shares.

[21404017] |Aside from Generale de Belgique and Asahi, the syndicate includes Antwerpsche Hypotheekkas, a Belgian savings bank, and various family interests.

[21404018] |A Generale spokesman confirmed that the giant Belgian holding company would be willing to raise its stake in AG should a raider seek control.
[21404019] |Asahi officials couldn't be reached for comment.

[21404020] |Even without bid talk, this year's surge in prices for Brussels real estate has excited interest in AG.
[21404021] |The company says those holdings constitute the third-biggest real-estate portfolio in Belgium.

[21405001] |With the dust settling from the failed coup attempt in Panama, one of the many lingering questions the Bush administration will ponder is this: Is the National Security Council staff big enough, and does it have enough clout, to do its job of coordinating foreign policy?

[21405002] |President Bush's national security adviser, Lt. Gen. Brent Scowcroft, came into office in January intent on making the NSC staff leaner and more disciplined than it had been during the Reagan administration.
[21405003] |Gen. Scowcroft was a member of the Tower Commission, which investigated the Iran-Contra affair.
[21405004] |He was all too aware of how a large, inadequately supervised NSC staff had spun out of control and nearly wrecked President Reagan's second term.

[21405005] |So, following both the style he pursued as President Ford's national security adviser and the recommendations of the Tower Commission, Gen. Scowcroft has pruned the NSC staff and tried to ensure that it sticks to its assigned tasks -- namely, gathering the views of the State Department, Pentagon and intelligence community; serving as an honest broker in distilling that information for the president and then making sure presidential decisions are carried out.

[21405006] |The Tower Commission specifically said that the NSC staff should be "small" and warned against letting "energetic self-starters" like Lt. Col. Oliver North strike out on their own rather than leaving the day-to-day execution of policies to the State Department, Pentagon or Central Intelligence Agency.

[21405007] |However, the Panama episode has raised questions about whether the NSC staff is sufficiently big, diverse and powerful to coordinate U.S. policy on tough issues.
[21405008] |During the coup attempt and its aftermath, NSC staffers were "stretched very thin," says one senior administration official.
[21405009] |"It's a very small shop."

[21405010] |Gen. Scowcroft doesn't plan to increase the staff right now, but is weighing that possibility, the official adds.
[21405011] |The NSC staff "doesn't have the horsepower that I believe is required to have an effective interagency process," says Frank Gaffney, a former Pentagon aide who now runs the Center for Security Policy, a conservative Washington think-tank.
[21405012] |"The problem with this administration, I think, is that by design it has greatly diminished, both in a physical sense and in a procedural sense, the role of the NSC."

[21405013] |The National Security Council itself was established in 1947 because policy makers sensed a need, in an increasingly complex world, for a formal system within the White House to make sure that communications flowed smoothly between the president and the State Department, Pentagon and intelligence agencies.
[21405014] |By law, the council includes the president, vice president and secretaries of state and defense.
[21405015] |In practice, the director of central intelligence and chairman of the Joint Chiefs of Staff also serve as unofficial members.

[21405016] |But the size, shape and role of the NSC staff have been left for each president and his national security adviser to decide.
[21405017] |That task is one of Washington's perennial problems.
[21405018] |In the Bush White House, the size of the NSC's staff of professional officers is down to about 50 from about 70 in 1987, administration officials say.

[21405019] |Administration officials insist that the size of the staff wasn't a problem during the Panama crisis.
[21405020] |But one clear problem during the coup attempt was that the NSC staffer most experienced in Latin America, Everett Briggs, was gone.
[21405021] |He had just resigned, at least in part because of a feud with Assistant Secretary of State Bernard Aronson over the administration's policy on Panama and support for Nicaragua's Contra rebels.

[21405022] |The absence of Mr. Briggs underscored the possible inadequacy of the current NSC staff.
[21405023] |Both Gen. Scowcroft and his deputy, Robert Gates, are experts in U.S.-Soviet affairs.
[21405024] |Gen. Scowcroft is particularly well-versed in arms control, and Mr. Gates has spent years studying Soviet politics and society.
[21405025] |Both have become confidants of President Bush.

[21405026] |But neither has an extensive background in Latin America, the Middle East or Asia.
[21405027] |In those areas, the role of NSC staffers under them therefore have become more important.

[21405028] |Gen. Scowcroft knows as well as anyone that one of the biggest dangers he faces is that NSC staffers working in relative anonymity will take over policy-making and operational tasks that are best left to bigger and more experienced State Department and Pentagon bureaus.
[21405029] |But just as every previous NSC adviser has, Gen. Scowcroft now will have to mull at what point the NSC staff becomes too lean and too restrained.

[21406001] |Japan's wholesale prices in the first 10 days of October fell 0.3% from the previous 10 days but rose 3.3% from a year ago, the Bank of Japan said.

[21406002] |The wholesale price index stood at 89.6 (1985 equals 100).

[21407001] |A former Sperry Corp. marketing executive, admitting his role in the Pentagon procurement scandal, pleaded guilty to bribery and conspiracy charges for helping funnel $400,000 to a midlevel Navy acquisition official during the early 1980s.

[21407002] |Frank Lavelle, who at the time was the marketing director for Sperry in Clearwater, Fla., admitted participating in a scheme to bribe Garland Tomlin, the Navy official.
[21407003] |Mr. Tomlin, who left the Navy in 1985, pleaded guilty earlier this year to related conspiracy, bribery and tax-evasion charges.

[21407004] |The bribery scheme took place between 1982 and 1985, according to documents filed by prosecutors in connection with Mr. Lavelle's guilty plea in federal district court in Alexandria, Va.
[21407005] |Sperry merged with Burroughs Corp. to become Unisys Corp. in late 1986.

[21407006] |Court documents filed by prosecutors indicate Mr. Tomlin tried to steer to Sperry a multimillion dollar contract to computerize maintenance of certain Navy electronics equiment.
[21407007] |Mr. Tomlin, among other things, illegally provided Mr. Lavelle with inside information and documents intended to give Sperry an unfair advantage in the competition, the documents said.
[21407008] |Sperry ultimately was eliminated from the competition without receiving the work.

[21407009] |Documents filed by prosecutors also indicate that Mr. Lavelle and his fellow conspirators requested and obtained "approval of the scheme" from more-senior Sperry officials "because the payment which {Mr.} Tomlin requested was so large."
[21407010] |Charles Gardner, a former Unisys vice president, and James Neal, a former company consultant, have admitted participating in this and other bribery schemes.
[21407011] |Unisys has said that all of the company officials who participated in improper activities have left the company.

[21407012] |Mr. Lavelle faces a maximum of 20 years in jail and a $500,000 fine.

[21408001] |The New York Stock Exchange said a seat was sold for $500,000, unchanged from the sale Thursday.
[21408002] |Seats are quoted at $430,000 bid and $525,000 asked.

[21409001] |Bureaucrats may deserve their bad reputation, after all.

[21409002] |Matthew Lesko, something of a professional defender of government, thought he had a sure-fire winner last summer when he offered $5,000 for the best "verifiable story of 250 words or less about how a government bureaucrat helped you."

[21409003] |He sent out thousands of news releases from his Kensington, Md., office.
[21409004] |He plugged the contest on Larry King's radio show, on Pat Sajak's television show and on the C-SPAN cable television network.
[21409005] |He talked about it in every speech he made as he roamed the country promoting his books, which dispense handy how-to advice on using government information for fun and profit.

[21409006] |Mr. Lesko figured he would be flooded with entries by now.
[21409007] |After all, he says, "we've got like 15 million bureaucrats."
[21409008] |And in addition to the $5,000, he has promised the winner a "My Favorite Bureaucrat" plaque and offered each of two runners-up $500.

[21409009] |So far, though, Mr. Lesko has received only one entry.
[21409010] |To make matters worse, the lone nomination came from another bureaucrat: A woman from the New York State Department of Taxation and Finance who nominated her boss.

[21409011] |Mr. Lesko, who is making the rules as he goes, has determined that bureaucrats are eligible for nomination by other bureaucrats.
[21409012] |But he says he would prefer to get nominations from rank-and-file folks.

[21409013] |He admits that he hasn't had much luck generating free publicity for his contest.
[21409014] |Newspapers, including this one, have generally ignored his news releases.
[21409015] |Talk show hosts quickly change the topic.

[21409016] |But Mr. Lesko's staff is beginning to wonder whether there isn't some larger phenomenon foiling the contest.
[21409017] |"Is the government not helping anybody?" asks Toni Murray, an assistant to Mr. Lesko.

[21409018] |Mr. Lesko himself isn't yet prepared to accept that explanation.
[21409019] |"People hate to write," he says.
[21409020] |"Maybe people don't believe I want to give this money away."

[21409021] |Maybe Americans are just so annoyed with government that they aren't interested in admitting that bureaucrats come in handy once in a while.
[21409022] |If he sponsored a contest on how a bureaucrat mishandled something, Mr. Lesko admits, "I'd get 5,000 entries."
[21409023] |Now there's an idea.

[21410001] |Ford Motor Co. and Saab-Scania AB of Sweden broke off talks about a possible alliance after Ford officials concluded that the cost to modernize Saab's car operations would outweigh the likely return.

[21410002] |With the collapse of the talks Friday, European analysts expect Ford to intensify its pursuit of British luxury car maker Jaguar PLC, which is scrambling to fend off a hostile Ford bid by negotiating a friendly alliance with Ford's archrival, General Motors Corp.

[21410003] |Saab, meanwhile, is left to continue its search for an ally to shore up its sagging car business.
[21410004] |Saab said last week it "has had and will continue to have contacts with other manufacturers."
[21410005] |Among the possible suitors is Italy's Fiat S.p. A, analysts said last week.

[21410006] |Ford and Saab officials declined to elaborate publicly on the announcement Friday that their negotiations failed to yield an agreement "that could make long-term business sense to both parties."

[21410007] |Individuals close to the Ford side of the negotiations said late last week that the No. 2 U.S. auto maker lost interest as it became clear that the Swedish auto maker's automotive operations had little to offer in the way of image or technology.
[21410008] |Ford originally had seen a Saab alliance as a way to expand its presence in the European and U.S. luxury car markets.
[21410009] |In addition, Ford and Saab had discussed a possible link between their heavy truck operations.

[21410010] |But the talks on a heavy truck alliance apparently didn't go far.
[21410011] |Some European analysts speculated that officials of Saab's highly profitable Scania truck operation balked at surrendering any of their autonomy.

[21410012] |Meanwhile, Ford officials became convinced they couldn't expect to recover the investment it would require to make Saab's cars competitive in the increasingly crowded luxury market.

[21410013] |Saab's problems were underscored Friday when the company announced that its car division had a 1.2 billion kronor ($186.1 million) loss during the first eight months of this year, slightly worse than Saab-Scania had forecast in its first-half report last month.
[21410014] |Overall, Saab-Scania's pretax profit during the first eight months of the year plunged 48.9% to 1 billion Swedish kronor ($155.1 million) from 1.96 billion kronor ($303.9 million) a year earlier.

[21410015] |Industry analysts in Europe said the most likely suitor for Saab now is Fiat.
[21410016] |Saab and Fiat have worked together in the past, in one case developing jointly a new auto chassis that became the foundation of Saab's 9000 model, Fiat's Croma and Lancia's Thema.
[21410017] |Last month, Saab-Scania Chief Executive Georg Karnsund said his company has had talks with Fiat about a broader alliance.
[21410018] |But the talks yielded "nothing so advanced that we needed to make a public announcement about it," he said.

[21410019] |As for Ford, analysts expect the end of the Saab play will allow the U.S. auto maker to focus its resources on the intensifying struggle with GM for a stake in Jaguar.

[21410020] |The failure of the Saab talks "makes it even more crucial for {Ford} to be victorious" in the Jaguar contest, said Stephen Reitman, European auto industry analyst at UBS-Phillips & Drew in London.

[21410021] |Ford faces an uphill fight for Jaguar, however.
[21410022] |Jaguar executives said last week they expect to have a friendly alliance with GM wrapped up by the end of the month.
[21410023] |GM, meanwhile, is hosting a delegation of members of the British Parliament who are touring the auto maker's headquarter operations in Detroit.
[21410024] |A GM spokesman said the visit isn't connected to the Jaguar situation.

[21410025] |But Ford clearly views Jaguar as a prize worth fighting for, since the company's gilded brand image would give Ford a badly needed leg up in the high end of the luxury markets in both Europe and the U.S.
[21410026] |Last week, Ford encountered a setback in its effort to broaden its U.S. luxury offerings when it was forced to abandon a four-year-old effort to market its German-built Scorpio sedan in the U.S. as a luxury import under the Merkur brand name.

[21410027] |So despite the GM-Jaguar romance, analysts say Ford by last Friday had boosted its Jaguar holding to about 11% of the luxury auto maker's shares outstanding from 10.4% early last week.
[21410028] |About 5.4 million Jaguar shares changed hands in active trading on London's stock exchange Friday, and Jaguar shares moved up 19 pence to 696 pence ($11).
[21410029] |On the U.S. over-the-counter market, Jaguar's American depositary receipts rose 12.5 cents to $11.125.

[21410030] |Joann S. Lublin contributed to this article.

[21411001] |The Dallas Cowboys are looking at a long-yardage situation, struggling to pull ahead of the Atlanta Falcons.
[21411002] |Up in his stadium box, their new and controversial owner, Jerral "Jerry" Jones, watches anxiously as the team bounds up to the scrimmage line.

[21411003] |Mr. Jones takes heart.
[21411004] |There in the center of the pack is quarterback Troy Aikman, the key to the Cowboys' comeback strategy.
[21411005] |So key, in fact, that Mr. Jones signed him in April for $11.4 million over the next six years -- a record for a rookie.
[21411006] |"He's a genuine Wheaties-box athlete," gushes Mr. Jones.

[21411007] |With three minutes left on the clock, Mr. Aikman takes the snap, steps back and fires a 21-yard pass -- straight into the hands of an Atlanta defensive back.
[21411008] |The crowd groans, Mr. Jones shakes his head, the Cowboys lose the game.
[21411009] |A few days after that Sept. 17 game, Mr. Aikman broke a finger, sidelining him for weeks.

[21411010] |Ah, the glamour of professional sports.
[21411011] |For Mr. Jones, losing his quarterback temporarily was just the latest in a string of setbacks that has beset the Dallas Cowboys -- and, this year, much of the National Football League.
[21411012] |Once fat and happy, the Cowboys now are losing games, fans and money.
[21411013] |Last year, the team ended up $2 million in the red on $30 million in revenue.
[21411014] |It has some of the highest costs in the league.
[21411015] |Its attendance is off 23% from six years ago.

[21411016] |At the very least, Mr. Jones, who cultivates the society circuit as eagerly as his bench, can take comfort in one fact: These days, he isn't alone.
[21411017] |Nearly half the owners of the 28 National Football League teams are losing money, the result of flat attendance, aging stadiums and -- more than anything -- skyrocketing salaries for star players like Mr. Aikman.

[21411018] |Last year, the top 12 players on each NFL team took home an average $536,000, a figure comparable to baseball and higher than in basketball.
[21411019] |First-round draft picks have done even better: Average salaries and bonuses for them rose to $685,000 this year, up 44% from 1987.
[21411020] |"It's a vicious circle," says Art Modell, owner of the Cleveland Browns.
[21411021] |"One team pays so much and the other pays more.
[21411022] |We just don't have that kind of income stream."

[21411023] |All this is causing convulsions in professional football.
[21411024] |Owners, largely complacent in the past, are now almost desperately looking for ways to lower costs and raise revenue -- embracing some revolutionary ideas in the process.
[21411025] |Though not intentionally, the Cowboys' Mr. Jones has come to represent this new breed of owner.

[21411026] |Shortly after buying 66% of the team from H.R. "Bum" Bright for $145 million, and mindful of the Cowboys' ragged bottom line, the 47-year-old Mr. Jones set about his own round of team cuts.
[21411027] |First, he unceremoniously sacked Tom Landry, the legendary coach who took the Cowboys to five Super Bowls and 20 consecutive winning seasons.
[21411028] |In Dallas, Mr. Landry has a standing just shy of sainthood.
[21411029] |Anti-Jones sentiment flooded the local press: "A crude obnoxious hick," said one writer; "a real oink," said another; "Who in the hell does he think he is?" wrote a third.

[21411030] |For Mr. Jones, it was just the beginning.
[21411031] |He quickly cut the team's bloated administrative staff by half, shut down a Cowboys-owned dance academy and, in July, announced plans to sell Valley Ranch, the team's 30-acre practice camp and the most lavish training facility in the NFL.
[21411032] |Mr. Jones calls the ranch "the Pentagon of Sportdom."
[21411033] |It is a maze of halls that connects film rooms, elaborate spas and weight-training centers that testify to a richer, more free-spending era.
[21411034] |He likes to tell the yarn of how he got lost on the expansive ranch during an early visit, took refuge in an office and called the front desk for help.
[21411035] |"I said, `Somebody come get me.
[21411036] |I'm at extension 29.'"

[21411037] |With a new day dawning on the sport, Mr. Jones doesn't see a place for this sort of luxury.
[21411038] |"It's just not cost efficient," he says.
[21411039] |The place costs nearly $2 million a year to maintain.
[21411040] |When he sells it, he says, the Cowboys will move to a more practical -- read affordable -- grass practice field near Texas Stadium.

[21411041] |And as for Tom Landry, well, in Mr. Jones's mind, he had played out his winning years.
[21411042] |After posting losing seasons in each of the last three years, the Cowboys needed a change, he says.

[21411043] |Football has long been Mr. Jones's passion, both on and off the field.
[21411044] |An Arkansas native, he started at guard on the undefeated 1964 University of Arkansas team that won a national championship.
[21411045] |After college, he worked at his father's insurance company in Little Rock, and in 1966 led an aborted attempt to buy the San Diego Chargers.
[21411046] |Years later, with cash from the sale of the insurance company, he founded Arkoma Production Corp., an oil and gas exploration company based in Little Rock.

[21411047] |So it wasn't surprising that Mr. Jones returned to his Arkansas roots when he went looking for a replacement for Mr. Landry.
[21411048] |He tapped Jimmy Johnson, a teammate on the 1964 University of Arkansas squad and the head coach at the University of Miami, where he led the Hurricanes to five winning seasons and a national championship in 1987.
[21411049] |Whatever Mr. Johnson's talents, in the hearts and minds of many Dallas fans, he is no Tom Landry.
[21411050] |Seven games (and, after a loss to the Kansas City Chiefs yesterday, seven losses) into the season, the "new" Cowboys aren't doing any better than the old.
[21411051] |In fact, the last time they played this badly was in 1960, their opening season.
[21411052] |Average attendance at their games, about 49,000 last year, continues flat.

[21411053] |Mr. Jones is attacking the problem on several fronts.
[21411054] |He continues to reshuffle the team, trading famed running back Herschel Walker to the Minnesota Vikings this month for a slew of players and future draft picks.
[21411055] |To try to draw more fans, he has dropped end-zone ticket prices from $25 to $19.
[21411056] |But the general trend, given rising costs in the league, has been to raise prices, and Mr. Jones is expected to eventually follow suit.
[21411057] |"It's simple," says Lamar Hunt, who owns the Kansas City Chiefs and last year raised ticket prices by $2.40 to an average $17.
[21411058] |"If we didn't increase prices, we'd be in the red."

[21411059] |Mr. Jones has also beefed up his marketing staff to sell the 118 luxury suites topping Texas Stadium (his deal with Bum Bright included operating rights for the stadium).
[21411060] |The suites are air-conditioned, have wet bars and plush seating, and offer a clear view of the field -- all for a sale price of $475,000 to $1 million, depending on their size and location.
[21411061] |Mr. Jones has been taking prospective suite owners onto the field during practice to let them rub elbows with players, and promises those who actually buy one of the rooms an insider's look at the team's strategy before game time.
[21411062] |The sales job seems to be paying off: When he bought the team, only six of the suites had been sold.
[21411063] |Today, 30 have.

[21411064] |Gate receipts are only the Cowboys' second largest source of cash.
[21411065] |The biggest is the NFL's contract with national television for broadcast of the league's games.
[21411066] |Last year, the Cowboys' share of that pie came to $17.6 million.
[21411067] |The team additionally earns between $2 million and $4 million for local radio and television broadcast rights.
[21411068] |Mr. Jones is currently trying to jack up the price for those local rights.
[21411069] |He is also trying to get more stations in Mexico, where the Cowboys have a following, to pick up the games.

[21411070] |Mr. Jones, whose twangy voice and folksy ways belie an intense businessman who works 16-hour days, is resigned to the hefty salaries he pays his players these days.
[21411071] |He calls the contracts "critical to winning in the NFL" and has played his part in the bidding wars.
[21411072] |Besides signing Mr. Aikman to a sizable contract, Mr. Jones has agreed to pay rookie quarterback Steve Walsh $4.1 million over the next four years.

[21411073] |This wage inflation is bleeding the NFL dry, the owners contend.
[21411074] |Soon, only large corporations will be able to afford to buy and run football teams, predicts John J. Veatch Jr., an investment banker with Salomon Brothers who handled the Cowboys sale.
[21411075] |To tackle the problem, NFL owners have proposed setting a rookie wage scale to try to rein in salaries.
[21411076] |Details of the plan, which would go into effect in 1993, are sketchy, but each player would apparently be paid a base salary keyed to his position and ability.
[21411077] |Bonuses would be paid based on playing time and performance.

[21411078] |The NFL Players Association, meanwhile, contends that athletes are paid a wage commensurate with their ability to draw fans, and that some owners are in financial trouble because of poor business management, not players' salaries.

[21411079] |The owners are trying to boost profit in other ways, too.
[21411080] |Many have launched promotions to attract new fans and are renegotiating dated stadium contracts.
[21411081] |Most of the owners must pay up to 10% of gross ticket sales for leases on stadiums they say are either too small or too old.
[21411082] |In Chicago, for example, size is the issue.

[21411083] |"We have the worst lease in the NFL," contends Michael B. McCaskey, the president of the Chicago Bears and a grandson of George Halas, who founded the NFL's predecessor organization.
[21411084] |"We're in a metro area with millions of Bear fans, and only a small number can be accommodated."
[21411085] |When the lease expires in 1999, he says, "It's got to be changed."

[21411086] |This year, the NFL also imposed an 80-player limit on teams going into training camp, down from 120, in a move meant to trim payroll costs.
[21411087] |And the league is trying to get more for its three-year national network contract, which expires after this season.
[21411088] |The current contract pays the NFL $1.4 billion.
[21411089] |Owners say they expect the league to demand a 50% increase, despite the fact that televised football games have had lackluster ratings.
[21411090] |An NFL spokesman also says the league will probably expand its offerings to cable TV companies like ESPN.

[21411091] |The changes haven't come easy.
[21411092] |Like the game of professional football, the NFL organization itself is in turmoil.
[21411093] |The new breed of team owner, Mr. Jones included, has been fighting the NFL bureaucracy for a greater say in league affairs, and the battle has produced a form of organizational gridlock.
[21411094] |In July, 11 NFL owners, almost all of them new, blocked an effort to install Jim Finks as a replacement for retiring league commissioner Pete Rozelle.
[21411095] |Mr. Finks is perceived by some owners as a standard-bearer for the Old Guard.
[21411096] |Earlier this month, another effort to choose a commissioner failed.
[21411097] |The owners meet again tomorrow.

[21411098] |For his part, Jerry Jones says he's in the business for the long haul, and his work style seems to support that.
[21411099] |He puts in busy six-day weeks (excluding game days), and on one recent afternoon fielded questions, in the course of an hour, from a TV producer, his luxury-suite marketing manager, a disgruntled customer and a roomful of Arkansas reporters.
[21411100] |To keep his schedule on track, he flies two personal secretaries in from Little Rock to augment his staff in Dallas.

[21411101] |"When I made this investment, I made it on a lifetime basis," he explains.
[21411102] |"I'm not here to make money by reselling the team later on.
[21411103] |While the Cowboys may not be the best investment now, I don't accept they can't be in the future."

[21411104] |Besides, to a large extent, Mr. Jones may already be getting what he wants out of the team, even though it keeps losing.
[21411105] |Owning the Cowboys has bought him entree to a glitzy life that drilling for oil in Arkansas just didn't provide.
[21411106] |There is the new private jet, the platoon of assistants, invitations to the best parties, and television appearances on shows such as "Prime Time Live."
[21411107] |A few weeks ago, Mr. Jones even entertained Elizabeth Taylor in his private suite at Texas Stadium.

[21411108] |"You're in the catbird seat every day in this job," he says.

[21412001] |How interestingly clever of Robert Goldberg to use the form of pretend advocacy journalism to explain his perception of "Days of Rage" in his television critique (Leisure & Arts, Sept 11).
[21412002] |He chastises Jo Franklin-Trout for her inept presentation of advocacy journalism, judging her project as "intellectually slipshod."
[21412003] |Was not the title very clear?
[21412004] |One example he gives: "She didn't ask" (why the Palestinian children are soldiers throwing stones).
[21412005] |Really now, did she have to ask?
[21412006] |Were not the pictures and happenings, which have been continuing news headlines, answers enough?

[21412007] |Mr. Goldberg contends that even as "propaganda" the film fails because it presents only one view.
[21412008] |Of course the Palestinians complain about their treatment; of course the Israelis feel put upon.
[21412009] |But his complaint that "Days of Rage" doesn't contain balanced comments from Israelis about how badly the Palestinians are behaving is irrelevant.
[21412010] |It's like doing a documentary on apartheid and insisting that equal time be given to how terrific white South Africans are.
[21412011] |This film did emphasize how long the Israeli/Palestinian stalemate has existed by tracing the conflict to the days of World War I when the British tried to guarantee both a Jewish state and a Palestinian state without specifying how it was to be done.

[21412012] |Well, "Days of Rage" airing with before-and-after packaging, and after repeated delays, was a beginning.
[21412013] |Every issue is multisided.
[21412014] |This film attempts to show a side rarely seen in our media.

[21412015] |Now we must endure a rash of critics who apparently wish to know details of one side only.

[21412016] |Salaam.
[21412017] |Shalom.

[21412018] |Charlotte Carpenter Bainbridge Island, Wash.

[21413001] |President Bush wants the Pentagon to get special treatment in coping with the across-the-board spending cuts that took effect last week.

[21413002] |Mr. Bush asked Congress to raise to $6 billion from $3 billion the amount of money Defense Secretary Dick Cheney may shift among the Pentagon's individual programs, projects and activities, allowing him to ease the pain that the Gramm-Rudman budget law was intended to inflict.

[21413003] |If the request is approved by both the House and Senate, Mr. Cheney would need only permission from the White House Office of Management and Budget to move the money, according to Senate budget analysts.

[21413004] |That would give the Pentagon flexibility that no other federal agency has.
[21413005] |"It's simply a way of making the cuts less onerous for defense than they are for domestic programs," said Chairman James Sasser (D., Tenn.) of the Senate Budget Committee, who said he would oppose the request.
[21413006] |"That isn't consistent with the kind of discipline that Gramm-Rudman is supposed to impose," he said.

[21413007] |The president's request didn't indicate how Mr. Cheney would shift the money.
[21413008] |A Pentagon official said the request was made to give the department "maximum flexibility" to deal with the cuts.

[21413009] |Last week, Budget Director Richard Darman structured the $16.1 billion spending reduction, half of which must come from defense, to "impose a little bit more discipline" by applying cuts to each individual program, project or activity in the budget.
[21413010] |That would give agencies "less ability . . . to fudge over things," he told reporters.

[21413011] |Under the deficit-reduction law, 4.3% of the Pentagon's money and 5.3% of other agencies' money has been canceled.
[21413012] |Lawmakers are expected to try to restore the funds once a pending deficit-cutting measure has been signed into law.

[21414001] |Rochester Telephone Corp. said it completed its purchase of Urban Telephone Corp., of Clintonville, Wis., the second-largest unaffiliated independent telephone company in that state.

[21414002] |Rochester Telephone said the acquisition was made in an exchange of its common shares for all the shares of Urban Telephone, but a price wasn't disclosed.

[21414003] |Urban is the company's first telephone subsidiary in Wisconsin.
[21414004] |Since June, Rochester Telephone signed letters of intent to purchase three other Wisconsin firms.

[21415001] |A bill that would permit the Securities and Exchange Commission to monitor the financial condition of securities firms' holding companies is facing tough opposition from some Wall Street firms, which argue that the legislation is unnecessary.

[21415002] |The legislation and other issues related to the stock market will be the focus of hearings this week by the House Telecommunications and Finance Subcommittee and the Senate Securities Subcommittee.

[21415003] |Richard Breeden, the new chairman of the SEC, hasn't taken a formal position on the bill, which would also require investors to disclose large trades and give the SEC additional authority during market emergencies.
[21415004] |However, he recently told the Senate Banking Committee that he believes the agency should have explicit authority to monitor debt levels at holding companies and affiliates of broker-dealers, which are frequently used to issue bridge loans.

[21415005] |The bridge loans are intended to provide temporary financing for acquisitions.
[21415006] |Since such loans are often refinanced through the sale of high-risk, high-yield junk bonds, the recent woes of the junk-bond market have renewed concerns among regulators about the risks associated with Wall Street firms issuing bridge loans.

[21415007] |But some Wall Street executives argue that such fears are unwarranted.
[21415008] |In a July 6 letter to the Senate Securities Subcommittee, First Boston Corp. argued that the fact that no retail brokerage firm failed during the 1987 market crash demonstrates that current rules are adequate.

[21415009] |First Boston, whose holding company, CS First Boston Group, is one of the larger issuers of bridge loans on Wall Street, said it is also concerned that once the SEC has the power to monitor holding companies, it will try to regulate their activities.

[21415010] |"The proposal, while well-intended, I think can be dangerously misleading because the likely consequence would be to weaken, rather than strengthen the control the SEC has exercised for 50 years over the financial adequacy and viability of broker-dealers," Michael Raoul-Duval, managing director of First Boston, said in an interview.

[21415011] |The bill would "divert scarce resources of the commission away from broker-dealers into areas which simply have no way of affecting broker-dealers," Mr. Raoul-Duval said.

[21415012] |Sources in the industry and on Capitol Hill say a compromise that would placate the industry while addressing the SEC's concerns may be possible.
[21415013] |An aide to the Senate Securities Subcommittee says some legislators support the concept of risk disclosure, but adds: "nobody is wedded to the language in the bill."

[21415014] |Edward O'Brien, president of the Securities Industry Association, said that the securities-industry trade group opposes the bill as it is written but that it is "hopeful a compromise can be reached to achieve the SEC's goals."

[21415015] |Mr. O'Brien will elaborate on the SIA's position in testimony before the House Telecommunications and Finance Subcommittee this week, a spokesman said.

[21416001] |This letter was inspired by David Asman's Sept. 25 editorial-page article about Fidel Castro, "Man in the Middle of Drug Trafficking."

[21416002] |I've organized a series of exchanges, exhibitions and other continuing projects between Cuban and American artists.
[21416003] |In any matters between us and the Cubans there can be no simplicity, consequently I've become familiar not only with Cuban art and artists, but also with Cuban bureaucrats and their counterparts in our own government.
[21416004] |Despite levels of obstruction, incompetence and ensuing frustration of mythic proportion, these projects all remain, in my mind, valuable and well worth the effort.
[21416005] |There is a simple reason for this: the Cuban people.

[21416006] |Let me immediately put limits to whatever nostalgic notions that may intimate.
[21416007] |Those "people" to whom I refer are not some heroic, indecipherable quantity; they are artists, critics, taxi drivers, grandmothers, even some employees of the Ministry of Culture, all of whom share a deep belief in the original principles of the Cuban Revolution, spelled out in terms such as equality among all members of the society, reverence for education and creative expression, universal rights to health and livelihood, housing, etc.
[21416008] |In fact, the generation of painters growing into maturity right now works with such profoundly held humanist assumptions and such passionate commitment to moral and ethical principles that it makes Che Guevara's famous linkages of art, idealism and revolution seem modest.
[21416009] |It is on behalf of these people, and out of my real respect for them, that I am responding to Mr. Asman's opinions of their country.

[21416010] |The Ochoa trial in July, with its revelations of deeply rooted and widespread corruption, and the summary trial and execution, was extremely disturbing to everyone who has ever considered himself a friend of Cuba.
[21416011] |However, unacceptable though those occurrences may have been, they still provide no excuse for wholesale departures from truth.

[21416012] |Mr. Asman should make distinctions among Fidel, the army and the Cuban people.
[21416013] |They are not interchangeable, since they are motivated to act based on their own circumstances.
[21416014] |It is naivete to equate a government's policies with the will of the people (as we well know), and it is even worse folly to merge the clearly divergent agendas of Fidel and the military and the state bureaucracy.
[21416015] |Mr. Asman is also annoyed that Mr. Castro has resisted collaboration with U.S. officials, even though by his own account that collaboration has been devised essentially as a mechanism for acts directly hostile to the Cuban regime, such as facilitating defections.
[21416016] |I think it's a little disingenuous to be surprised that Fidel doesn't invite the U.S. State Department to violate the jurisdiction of the Cuban government over its own territory.

[21416017] |We badly need to follow fact rather than the rhetoric of conventional wisdom.
[21416018] |Without this basic level of attention to reality, our policies on Cuba will continue to be as counterproductive as they have for 30 years.
[21416019] |From my own point of view, given the qualities of humanity, creativity and warm spirit in which the Cuban people excel, we deny ourselves access to things we hold dear, and which seem to run in such short supply these days.
[21416020] |There is no rational justification for such behavior.

[21416021] |Rachel Weiss Brookline, Mass.

[21417001] |ENGRAPH INC. recently reported third-quarter earnings, which were mistakenly shown in the Quarterly Earnings Surprises table in last Tuesday's edition to be lower than the average of analysts' estimates.
[21417002] |Zacks Investment Research didn't adjust one analyst's estimate for a stock split, which therefore was artificially high.
[21417003] |Engraph's third-quarter net income of 15 cents a share actually was 7% higher than the adjusted average of estimates.

[21418001] |Investors bailed out of New York City bonds in droves last week, driving prices lower and boosting yields.

[21418002] |One bond trader estimated that more than $50 million of New York City general obligation bonds were put up for sale Friday alone.
[21418003] |While that represents a small percentage of the city's public debt outstanding, Friday's selling followed a weeklong effort to unload the bonds by a broad spectrum of institutional and individual investors.

[21418004] |"I've never seen so many {New York City} G.O.'s up for sale," said another trader.
[21418005] |"Every broker has blocks of every size and maturity."

[21418006] |Municipal bond analysts said the sell-off was triggered by concerns about the city's financial health, rumors of a $900 million bond offering coming soon, and political uncertainty.

[21418007] |A spokesman for the city wouldn't confirm the size of the bond issue, but did say that a general obligation offering is in the works and should be priced sometime in the next two weeks, before the November mayoral election.
[21418008] |(General obligation bonds are backed by the city's overall revenues and credit.)

[21418009] |Although many investors were aware that a bond offering was being scheduled, many expected a much smaller amount of bonds to be sold.
[21418010] |The fact that the city will issue such a large amount of debt was interpreted as a sign that New York's budgetary problems are more serious than had been expected.
[21418011] |New York, one of the nation's largest issuers of tax-exempt bonds, sold $750 million of municipal bonds just a few weeks ago.

[21418012] |There have been reports for months that the city's economy is weakening, as the October 1987 stock market crash continues to make itself felt.
[21418013] |The recent sharp stock market decline exacerbated those concerns.
[21418014] |Meanwhile, tax revenues are falling while the city's spending needs are expanding.
[21418015] |Rumors persisted last week that New York's credit ratings -- single-A from Moody's Investors Service Inc. and single-A-minus from Standard & Poor's Corp. -- are at risk.

[21418016] |The weakness in New York City bonds follows a warning from New York state Comptroller Edward Regan that the 1987 crash seriously weakened the city's economy.
[21418017] |In a study, the comptroller said, "The city's glory days are over."
[21418018] |Mr. Regan warned mayoral candidates "to be prepared for limited options and constraints on service increases to address the city's problems in the next few years, due to the now-evident weakening in the New York City economy."

[21418019] |New York City's revised financial plan, due out later this month, is expected to include measures to balance the city's $27 billion budget.
[21418020] |At present, analysts project a budget gap on the order of $500 million to $600 million for the fiscal year ending June 30, 1990, although the city's own budget analysts project a narrower deficit.

[21418021] |Mark Page, New York's deputy director of finance, said that investors' concerns about the city's financial health are "unwarranted given our proven ability to manage ourselves."
[21418022] |He charges the city's critics with spreading "unfounded emotional rhetoric."

[21418023] |There are also questions about whether a new and inexperienced mayor can manage the city through what could become a financial crisis.
[21418024] |The leading contender for the mayoral office, Democrat David Dinkins, has been criticized recently for the way he handled his personal financial affairs.
[21418025] |And the controversy has led to uncertainty about the outcome of the election.
[21418026] |Until last week, Mr. Dinkins was considered a shoo-in.

[21418027] |"The market can adjust to good news or bad news, but uncertainty drives people wild," said Bernard B. Beal, chief executive of M.R. Beal & Co., a securities firm that specializes in the municipal market.
[21418028] |Until last week, "Everyone felt certain they knew the outcome of the election.
[21418029] |Now, there have been a number of questions raised."

[21418030] |Last week, yields on long-term New York City general obligation bonds jumped half a percentage point.
[21418031] |New York City's 6% bonds due 2018, for example, were quoted late Friday at a price to yield 7.80%, compared with 7.60% Thursday.

[21418032] |As the yield on New York general obligation bonds rose, the Bond Buyer 20-bond general obligation index, the mostly widely followed gauge of the tax-exempt market, held steady at 7.19% in the week ended Oct. 19.

[21419001] |Qintex Australia Ltd. encountered another setback Friday when its Los Angeles-based affiliate, Qintex Entertainment Inc., filed for protection under Chapter 11 of the U.S. Bankruptcy Code.

[21419002] |Qintex Entertainment also said David Evans, its president and chief executive, and Roger Kimmel, a director, both resigned.
[21419003] |Neither could be reached for comment.

[21419004] |Earlier this month, Qintex Australia's $1.5 billion agreement to acquire MGM/UA Communications Co. collapsed because of a dispute over a $50 million letter of credit the Australian operator of television stations and resorts was to have supplied as security in the transaction.
[21419005] |Mr. Evans had been the de facto head of MGM/UA for months.

[21419006] |Qintex Entertainment, a producer and distributor of television programs most noted for its co-production of the hit miniseries "Lonesome Dove," said it filed for Chapter 11 protection after Qintex Australia failed to provide it with $5.9 million owed to MCA Inc. in connection with the distribution of "The New Leave It to Beaver Show."

[21419007] |Qintex Entertainment is 43% owned by Qintex Australia and said it relies on the Australian company for funding its working capital requirements.

[21419008] |After the announcement of the bankruptcy filing, Qintex Entertainment stock sank $2.625 in over-the-counter trading to close at $1.50 on heavy volume of more than 1.4 million shares.
[21419009] |The stock traded as high as $10 this past summer.

[21419010] |Jonathan Lloyd, executive vice president and chief financial officer of Qintex Entertainment, said Qintex Entertainment was forced to file for protection to avoid going into default under its agreement with MCA.
[21419011] |The $5.9 million payment was due Oct. 1 and the deadline for default was Oct. 19.
[21419012] |Mr. Lloyd said if Qintex had defaulted it could have been required to repay $92 million in debt under its loan agreements.
[21419013] |MCA on Friday said that as a result of Qintex's failure to make the required payment it was terminating the distribution agreement on "The New Leave It to Beaver" as well as other MCA properties.

[21419014] |Qintex Australia was "saying as recently as last weekend that they would take care of the situation.
[21419015] |They continued to represent that to the board," said Mr. Lloyd.
[21419016] |"We were reassured they would stand behind the company."

[21419017] |Mr. Lloyd said both Qintex Entertainment and Qintex Australia had attempted to secure a loan that would allow the company to make the $5.9 million payment but the request was turned down by an unidentified lender on Oct. 14.
[21419018] |At that point, he said, Qintex Australia stated it would "endeavor to arrange" the financing.

[21419019] |However a Qintex Australia spokesman said his firm had never "promised or guaranteed" to make the payment.
[21419020] |In a prepared statement from Australia, the company also said that, following the breakdown of the MGM talks, it "had been re-evaluating its position as a significant shareholder and a substantial creditor of Qintex Entertainment" and had "resolved to minimize the degree of further loans to Qintex Entertainment in excess of that previously made."

[21419021] |The Qintex Australia spokesman added that his company had opposed the Chapter 11 filing.
[21419022] |He said the company believed Qintex Entertainment's financial problems could have been resolved by other means.

[21419023] |The report of the bankruptcy filing stunned Hollywood executives and investors.
[21419024] |"It's a shocker," said Joseph Di Lillo, chairman of Drake Capital Securities, a brokerage firm that has an investment in Qintex Entertainment.
[21419025] |Qintex Australia was "going to pay more than $1 billion for MGM/UA and then they couldn't come up with the far smaller sum of $5.9 million."

[21419026] |Qintex said Mr. Evans, the former president, resigned for "personal reasons" and that Mr. Kimmel, an attorney, resigned because his participation in evaluating the company's role in buying MGM/UA was no longer necessary.
[21419027] |Mr. Kimmel was a director of the company and a predecessor firm since 1980.

[21419028] |The announcement seemed to further damp prospects that talks between Qintex Australia and MGM/UA might be revived.
[21419029] |It's understood that MGM/UA recently contacted Rupert Murdoch's News Corp., which made two failed bids for the movie studio, to see if the company was still interested.
[21419030] |However, "we aren't currently doing anything.
[21419031] |It isn't a current topic of conversation at the company," said Barry Diller, chairman and chief executive officer of the Fox Inc. unit of News Corp.

[21420001] |Financial printer Bowne & Co. said it formed a business translation service, which will provide legal, financial and other services in most major languages, including Japanese, Chinese and Russian.

[21421001] |Japan's Finance Ministry strongly denied playing any role in the New York stock-price free fall.

[21421002] |Makoto Utsumi, vice minister for international affairs, said the ministry didn't in any way suggest to Japanese banks that they stay out of the UAL Corp. leveraged buy-out.
[21421003] |The ministry has never even suggested that Japanese banks be cautious about leveraged buy-outs in general, Mr. Utsumi said.
[21421004] |"There are no facts {behind the assertions} that we sent any kind of signal," he declared in an interview.

[21421005] |The comments were the ministry's first detailed public statement on the subject, and reflect the ministry's concern that foreigners will think Japan is using its tremendous financial power to control events in foreign markets.
[21421006] |A number of accounts of the events leading to the 190 point drop in New York stock prices on Oct. 13 accused the ministry of pulling the plug on the UAL deal for one reason or another.

[21421007] |Mr. Utsumi said the most the ministry had ever done was ask Japanese banks about "the status of their participation" in one previous U.S. leveraged buy-out.
[21421008] |The ministry inquired about that deal -- which Mr. Utsumi declined to identify -- because the large presence of Japanese banks in the deal was "being strongly criticized in the U.S. Congress" and it was "necessary for us to grasp the situation."
[21421009] |He said the inquiry wasn't made in a way that the banks could have interpreted as either encouraging or discouraging participation, and he added that none of the Japanese banks changed their posture on the deal as a result of the inquiry.

[21421010] |Mr. Utsumi also said some Japanese banks were willing to participate in the UAL financing up to the very end, which would suggest at the very least that they weren't under orders to back out.
[21421011] |In general, Mr. Utsumi said, Japanese banks are becoming more "independent" in their approach to overseas deals.

[21421012] |"Each Japanese bank has its own judgment on the profits and risks in that {UAL} deal," he said.
[21421013] |"They are becoming more independent.
[21421014] |It's a sound phenomenon."
[21421015] |Sanwa Bank Ltd. is one Japanese bank that decided not to participate in the first UAL proposal.
[21421016] |A Sanwa Bank spokesman denied that the finance ministry played any part in the bank's decision.
[21421017] |"We made our own decision," he said.

[21421018] |Still, Mr. Utsumi may have a hard time convincing market analysts who have rightly or wrongly believed that the ministry played a role in orchestrating recent moves by Japanese banks.
[21421019] |All week there has been much speculation in financial circles in Tokyo and abroad about the ministry's real position.

[21421020] |Bank analysts say ministry officials have been growing increasingly concerned during the past few months about Japanese banks getting in over their heads.

[21421021] |"The {ministry} thinks the banks don't know what they are doing, that they have very little idea how to cope with risk," said one foreign bank analyst who asked not to be identified.
[21421022] |"The {ministry} wants to see the Japanese banks pull in their horns" on leveraged buy-outs, he added.

[21421023] |Although some of the Japanese banks involved in the first proposed bid for UAL bowed out because they found the terms unattractive, observers here say they have a hard time believing that commercial considerations were the only reason.
[21421024] |Japanese banks are under "political pressure" as well, the analyst said.
[21421025] |Moreover, analysts point out that Japanese banks have a reputation for doing deals that aren't extremely profitable if they offer the chance to build market share, cement an important business relationship or curry favor with powerful bureaucrats.

[21421026] |Clearly, some financial authorities are concerned about the Japanese banks role in leveraged buy-outs.
[21421027] |At a news conference this week, Bank of Japan Gov. Satoshi Sumita cautioned banks to take a "prudent" stance regarding highly leveraged deals.
[21421028] |Despite Mr. Sumita's statements, it is the Finance Ministry, not the central bank, that makes policy decisions.

[21421029] |While recent events may cool some of the leveraged buy-out fever, Japanese banks aren't likely to walk away from the game.
[21421030] |Despite the risks, the deals can be an attractive way for Japanese banks to increase their presence in the U.S. market, bank analysts say.
[21421031] |Flush with cash at home, but with fewer customers to lend to, leading banks are eager to expand overseas.
[21421032] |Jumping in on big deals is a high profile way to leapfrog the problem of not having a strong retail-banking network.

[21422001] |France's national tobacco company, known for making brown-tobacco cigarettes such as Gauloises and Gitanes, is branching out.

[21422002] |Concerned by dipping demand for its traditional products, it is moving not only into blonde cigarettes, but also into electronic car-parking payment cards to be sold in neighborhood tobacco stores.
[21422003] |Brown tobacco in France is a more pungent, stronger grade than the lighter grade, or blonde tobacco, used in so-called American-style cigarettes.

[21422004] |"We aren't Philip Morris Cos.," says Bertrand de Galle, chairman of government-owned Societe Nationale d'Exploitation Industrielle des Tabacs & Allumettes S.A., known as Seita.
[21422005] |He says that because Seita's profits are limited by government-controlled cigarette prices, he doesn't have the cash to diversify as heavily into food and drink as the U.S. concern has done.
[21422006] |(Last year, for example, Seita's net profit soared 150% to 461.6 million French francs ($73.5 million) on sales of FFr27.68 billion-a 1.7% profit margin.)

[21422007] |Instead, he said in an interview, he is looking for ways to exploit France's network of 39,000 tobacco agents, most of them cafes.
[21422008] |While Seita doesn't own the French tabacs, its close alliance with them offers distribution possibilities.

[21422009] |One proposal is to introduce a new payment system for parking in Paris.
[21422010] |Instead of paying for parking by putting money in the existing machines, which deliver little paper receipts, drivers would be able to buy electronic cards in local tobacco shops.
[21422011] |Once activated, the card would sit in the car's window, showing traffic wardens how much time the motorist could remain.
[21422012] |When the motorist returned to his car he could turn the card off and, if it showed time remaining, save it for later.
[21422013] |Seita is a partner in the project, which was developed by Matra SA using Japanese technology.
[21422014] |Seita and Matra currently are negotiating with city officials for the right to begin service.

[21422015] |And Seita is considering further diversification.
[21422016] |It wanted to buy RJR Nabisco Inc.'s French cracker subsidiary, Belin, in hopes of selling its products in tobacco stores, but lost the bidding to food group BSN SA.
[21422017] |It currently is considering bidding for Swedish Match Co.
[21422018] |And it retains an interest in acquiring candies and other articles that might be sold in tobacco shops.

[21422019] |It also is trying to shore up its tobacco business.
[21422020] |Brown-tobacco cigarettes such as Gauloises now make up just 40% of the French tobacco market, half the level of about two decades ago.
[21422021] |While Seita retains a manufacturing monopoly in France, it is being hurt by rising imports and from waning cigarette demand.

[21422022] |So Seita has introduced blonde cigarettes under the Gauloises label, and intends to relaunch the unsuccessful Gitanes Blondes in new packaging, similar to the slide-packs used by brown-tobacco Gitanes.
[21422023] |The aim, says Mr. de Galle, is to win market share from imported cigarettes, and to persuade smokers who are switching to blonde cigarettes to keep buying French.

[21423001] |When the Supreme Court upheld Missouri's abortion restrictions last July, the justices almost certainly didn't have drunk driving, trespassing and false imprisonment on their minds.

[21423002] |But the 5-4 ruling may have had as much immediate impact on those activities -- especially trespassing -- as on abortion rights.

[21423003] |The decision, Webster vs. Reproductive Health Services, illustrates how Supreme Court rulings often have a ripple effect, spreading into areas of law and policy that weren't part of the actual cases decided and that never were contemplated by the justices.

[21423004] |In the Missouri case, unforeseen consequences may have arisen because the high court reinstated the preamble of the state's 1986 abortion law.
[21423005] |The preamble says that human life begins at conception and that unborn children have rights protected by the Constitution.

[21423006] |Last year, a federal appeals court in St. Louis said the preamble was unconstitutional, citing an earlier Supreme Court ruling that states can't justify stricter abortion curbs by changing the definition of when life begins.
[21423007] |But the Supreme Court concluded that it was premature to rule on the constitutionality of the preamble because the definition of human life hadn't yet been used to restrict abortion services.

[21423008] |The high court majority said it was up to the state courts for now to decide whether the definition has any bearing on other state laws.
[21423009] |Already, local Missouri judges have relied on the restored preamble in two separate cases to throw out criminal trespass charges against anti-abortion demonstrators who blocked access to Reproductive Health Services, an abortion clinic in St. Louis.

[21423010] |The protesters said their actions were justified by the desire to save the lives of unborn children.
[21423011] |Under a 1981 Missouri law, persons accused of some crimes, including trespassing, may offer a defense that their actions were justified "as an emergency measure to avoid an imminent public or private injury."
[21423012] |Relying on the preamble's statement that a fetus is an unborn child, the two St. Louis County Circuit Court judges in August accepted the justification that the abortion clinic protesters were trying to save lives.

[21423013] |In another case, a protester, Ann O'Brien, was convicted of trespass before the Supreme Court's Webster ruling.
[21423014] |Last week, when her appeal was argued before the Missouri Court of Appeals, her lawyer also relied on the preamble.

[21423015] |"The effect of the Supreme Court Webster opinion is that it left room for grass to grow in the cracks of Roe vs. Wade, and I think this is one of the cracks," said Mark Belz, a St. Louis lawyer who represented Ms. O'Brien and the other St. Louis protesters.
[21423016] |Roe vs. Wade was the Supreme Court's 1973 decision that recognized a woman's right to abortion.

[21423017] |Mario Mandina, president of Kansas City Lawyers for Life, says that if abortion foes succeed in using the preamble to escape prosecution for trespass, "This will shut down abortion in Missouri.
[21423018] |There's no risk to the protesters, and you can't keep an abortion clinic open if there are 3,000 people standing outside every day."

[21423019] |That would be an ironic result of a case in which the Supreme Court expressly stopped short of overruling Roe vs. Wade.

[21423020] |In two other cases, the possible consequences of the Supreme Court ruling appear even more unintended.

[21423021] |In one, the lawyer for a 20-year-old resident of Columbia, Mo., who was charged with drunk driving, argued that his client should be treated as a 21-year-old adult because his actual age should be calculated from conception, not from birth.
[21423022] |In Missouri, those caught drinking and driving between the ages of 16 and 21 may have their licenses revoked for one year, while those 21 or older suffer only a 30-day suspension.
[21423023] |A Boone County judge rejected the motion, but Daniel Dodson, a Jefferson City lawyer, says he has appealed.

[21423024] |And in a case filed in federal court in August, a lawyer is arguing that Missouri authorities are wrongfully imprisoning the fetus of a pregnant woman who is in jail for theft and forgery.

[21424001] |In terms of sheer brutality, the Somali regime of Siad Barre may rank as No. 1 in the world.
[21424002] |The only reason that Somalia remains in obscurity is numbers: a sparsely populated wasteland of 8.5 million people spread out over an expanse nearly the size of Texas.
[21424003] |The Barre dictatorship simply is limited in the amount of people it can torture and kill.

[21424004] |Beheading small children, stabbing elderly people to death, raping and shooting women, and burying people alive are just a few of the grisly activities that the Somali armed forces have been engaged in over the past two years.

[21424005] |Up to 500,000 Somalis have escaped to the relative safety of Marxist Ethiopia because of the behavior of President Barre's troops.

[21424006] |In the port of Berbera, for example, hundreds of men of the rival Issak clan were rounded up in May 1988, imprisoned, and then taken out at night in groups of five to 50 men to be executed without any judicial process whatsoever.
[21424007] |Guns were never used: Each man was stabbed to death with a large knife.

[21424008] |The horrific details are only now emerging from a painstakingly documented report, based on hundreds of interviews with randomly selected refugees.
[21424009] |The study was done by Robert Gersony, a consultant to the U.S. State Department who has years of experience in investigating human-rights abuses on both sides of the left-right ideological divide.

[21424010] |What gives these events particular significance, however, is the fact that they are part of a wider drama affecting the strategic positions of both the U.S. and the Soviet Union on the horn of Africa.
[21424011] |Not since the late 1970s has the horn been so up for grabs as it has suddenly become in just the past few weeks.

[21424012] |Mr. Barre's rule is crumbling fast.
[21424013] |Mutinies wrack his armed forces (really just an armed gang), which control less than half the country.
[21424014] |Inflation is at record levels.
[21424015] |Desperate, he has called in the Libyans to help fight the rebels of the Somali National Movement in the north, which is only one of several groups picking away at the regime in the capital of Mogadishu.
[21424016] |Seventy years old and a self-declared "scientific socialist," President Barre has a power base, composed only of his minority Mareham clan, that according to observers is "narrowing."

[21424017] |The U.S.'s interest in Somalia consists of a single runway at the port of Berbera, which U.S. military aircraft have the right to use for surveillance of the Gulf of Aden and the Indian Ocean.
[21424018] |That strip of concrete is backed up by a few one-story, air-conditioned shacks where a handful of American nationals -- buttressed by imported food, cold soft drinks and back issues of Sports Illustrated -- maintain radio contact with the outside world.
[21424019] |In the past two years, the desert behind them has become a land of mass executions and utter anarchy, where, due to Mr. Barre's brutality and ineptitude, nobody is any longer in control.

[21424020] |As long as the rival Soviet-backed regime of Mengistu Haile Mariam held a total gridlock over neighboring Ethiopia, the U.S. was forced to accept that lonely Berbera runway as a distant No. 2 to the Soviets' array of airfields next door.
[21424021] |But due to dramatic events on the battlefield over the past few days and weeks, those Soviet bases may soon be as endangered and as lonely as the American runway.

[21424022] |On Sept. 7, I wrote on these pages about the killing and capturing of 10,000 Ethiopian soldiers by Eritrean and Tigrean guerrillas.
[21424023] |Recently, in Wollo province in the center of Ethiopia, Tigrean forces have killed, wounded and captured an additional 20,000 government troops.
[21424024] |(Think what these numbers mean -- considering the headline space devoted to hundreds of deaths in Lebanon, a small country of little strategic importance!)

[21424025] |Tigrean armies are now 200 miles north of Addis Ababa, threatening the town of Dese, which would cut off Mr. Mengistu's capital from the port of Assab, through which all fuel and other supplies reach Addis Ababa.
[21424026] |As a result, Mr. Mengistu has been forced to transfer thousands of troops from Eritrea just to hold the town, thereby risking the loss of even more territory in Eritrea only to keep the Tigreans at bay.

[21424027] |Mr. Mengistu is in an increasingly weak position: Half his army is tied down defending the northern city of Asmara from the Eritreans.
[21424028] |The weaker he gets, the more he turns toward the U.S. for help.
[21424029] |While the Tigreans are communists, like the Eritreans they are among the most anti-Soviet guerrillas in the world, having suffered more than a decade of aerial bombardment by the Soviet-supplied Mengistu air force.

[21424030] |What this all means in shorthand is that Soviet dominance in Ethiopia is collapsing as fast as President Barre's regime in Somalia is.
[21424031] |The U.S., therefore, has a historic opportunity both to strike a blow for human rights in Somalia and to undo the superpower flip-flop of the late 1970s on the Horn of Africa.

[21424032] |Back to Somalia:

[21424033] |The State Department, to its credit, has already begun distancing itself from Mr. Barre, evinced by its decision to publish the Gersony report (which the press has ignored).
[21424034] |What's more, the U.S. has suspended $2.5 million in military aid and $1 million in economic aid.

[21424035] |But this is not enough.
[21424036] |Because the U.S. is still perceived to be tied to Mr. Barre, when he goes the runway could go too.
[21424037] |Considering how tenuous the security of that runway is anyway, the better option -- both morally and strategically -- would be for the Bush administration to blast the regime publicly, in terms clear enough for all influential Somalis to understand.
[21424038] |It is a certainty that Mr. Barre's days are numbered.
[21424039] |The U.S. should take care, however, that its own position in the country does not go down with him.

[21424040] |Nobody is sure what will come next in Somalia or whom the successor might be.
[21424041] |But as one expert tells me: "Whoever it is will have to work pretty damn hard to be worse than Barre."

[21424042] |While the State Department positions itself for the post-Barre period in Somalia, it should continue to back former President Carter's well-intentioned role as a mediator between Mr. Mengistu and the Eritrean guerrillas in Ethiopia, while concomitantly opening up channels of communications with the Tigrean rebels through neighboring Sudan.

[21424043] |Ethiopian politics are the most sophisticated, secretive and Byzantine in all of black Africa.
[21424044] |Remember that it took Mr. Mengistu many months, in what became known as the "creeping coup," to topple Emperor Haile Selassie in 1974 and 1975.
[21424045] |There is simply no way to engineer a succession covertly, as is sometimes possible elsewhere on the continent.
[21424046] |But the U.S. has one great advantage: The Soviets are universally loathed throughout Ethiopia for what they did to the country this past decade -- famine and all.

[21424047] |It's not just in Eastern Europe where the march of events is finally on the U.S. side, but on the horn of Africa as well.
[21424048] |The only U.S. liability in the region is what remains of the link to Mr. Barre, and that should be cut fast.

[21424049] |Mr. Kaplan, author of "Surrender or Starve: The Wars Behind the Famine" (Westview Press, 1988), lives in Lisbon.

[21425001] |Translant Inc., Rancho Cucamonga, Calif., got an $86 million Navy contract for missile-launch systems.

[21425002] |General Electric Co. received a $30.6 million Air Force contract for MX-missile nose cones.

[21425003] |Goodyear Tire & Rubber Co. was awarded a $19.1 million Army contract for armored-vehicle parts.

[21425004] |Analytic Sciences Corp. was awarded a $10.1 million Air Force contract for technical support.

[21426001] |McCormick Capital Inc. said the final proration factor was 0.628394 on its oversubscribed, $3-a-share tender offer to buy back as many as 1.1 million of its common shares.

[21426002] |Payment will begin "as soon as Oct. 25," the company said.
[21426003] |McCormick is a developer and manager of futures-investment limited partnerships.

[21426004] |Through a separate agreement between Peter Dauchy, president, and a group of selling shareholders, the company said, Mr. Dauchy will on Oct. 30 buy 231,405 shares from the group, boosting his stake to about 717,000 shares, or 50.7% of the total after the buy-back.

[21427001] |Canada's consumer price index rose a seasonally adjusted 0.2% in September from August, Statistics Canada, a federal agency, said.

[21427002] |The rise followed boosts of 0.1% in August, 0.7% in July and 0.6% in June.

[21428001] |OPEC's ability to produce more petroleum than it can sell is beginning to cast a shadow over world oil markets.

[21428002] |Output from the Organization of Petroleum Exporting Countries is already at a high for the year and most member nations are running flat out.
[21428003] |But industry and OPEC officials agree that a handful of members still have enough unused capacity to glut the market and cause an oil-price collapse a few months from now if OPEC doesn't soon adopt a new quota system to corral its chronic cheaters.

[21428004] |As a result, the effort by some oil ministers to get OPEC to approve a new permanent production-sharing agreement next month is taking on increasing urgency.
[21428005] |The organization is scheduled to meet in Vienna beginning Nov. 25.

[21428006] |So far this year, rising demand for OPEC oil and production restraint by some members have kept prices firm despite rampant cheating by others.
[21428007] |But that could change if demand for OPEC's oil softens seasonally early next year as some think may happen.

[21428008] |OPEC is currently producing more than 22 million barrels a day, sharply above its nominal, self-imposed fourth-quarter ceiling of 20.5 million, according to OPEC and industry officials at an oil conference here sponsored by the Oil Daily and the International Herald Tribune.
[21428009] |At that rate, a majority of OPEC's 13 members have reached their output limits, they said.

[21428010] |But it is estimated that at least three million barrels a day -- and possibly as much as seven million barrels a day -- of spare capacity still exists within OPEC.
[21428011] |Most is concentrated in five Persian Gulf countries, including his own, Issam Al-Chalabi, Iraq's oil minister, told the conference Friday.
[21428012] |He puts OPEC's current capacity at 28 million to 29 million barrels a day.

[21428013] |That's higher than some other estimates.
[21428014] |Ali Khalifa Al-Sabah, Kuwait's oil minister, recently estimated OPEC capacity at 25 million barrels a day.

[21428015] |Either way, the overhang is big enough to keep delicately balanced oil markets on edge.
[21428016] |Even modest amounts of additional output by those with the huge extra capacity and reserves, such as Saudi Arabia and Iraq, could upset the market.

[21428017] |The Iraqi oil minister and Saudi oil minister Hisham Nazer insisted in their comments to the conference that their countries would act responsibly to maintain a stable market.

[21428018] |However, in interviews later, both ministers stressed that they expect future OPEC quotas to be based mainly on the production capacity and reserves of each member.

[21428019] |Under that approach, countries with the most unused oil capacity would get bigger shares of any future increases in OPEC's production ceiling than they would under the current system.
[21428020] |"If you are already producing at 95% or 100% of your capacity, what's the good to be told you can produce at 105% of capacity?" asked Mr. Al-Chalabi.

[21428021] |At an inconclusive Geneva meeting late last month, OPEC's oil ministers halfheartedly approved another increase of one million barrels a day in their production ceiling.
[21428022] |They doled it out using the existing formula, however, which meant that even those countries that couldn't produce more received higher official allotments.
[21428023] |The main effect of the ceiling boost was to "legitimize" some of the overproduction already coming from the quota cheaters.

[21428024] |Still, there was a breakthrough at Geneva.
[21428025] |Previously, no OPEC member had been willing to accept a reduction in its percentage share of the group's total output target, or ceiling.
[21428026] |But the concept of disproportionate quotas for those with unused capacity, advanced there in an Iranian proposal, was generally endorsed by the ministers.

[21428027] |In the end politics got in the way.
[21428028] |Libya accepted Iran's proposal only so long as it was promised production parity with Kuwait.
[21428029] |And the United Arab Emirates, a chronic quota cheater, refused to give any guarantee it would change its ways.

[21428030] |But the oil ministers continue to study the plan, and it will probably be the basis for discussion at next month's meeting.

[21428031] |It's understood several compromises already have been worked into the plan.
[21428032] |The ceiling would be lifted to 21.5 million barrels to provide Kuwait and the United Arab Emirates much higher official quotas while reducing percentage shares of some others.
[21428033] |Libya's previous conditions are no longer considered a problem, although the United Arab Emirates is still an issue.

[21428034] |Saudi Arabia, OPEC's kingpin, also has surfaced as a possible obstacle, some OPEC sources said.
[21428035] |Insisting on a 24.5% share of any ceiling, Saudi officials have long pressed for the pro rata distribution of increases to all members.
[21428036] |In Geneva, however, they supported Iran's proposal because it would have left the Saudi percentage of the OPEC total intact, and increased actual Saudi volume to nearly 5.3 million barrels daily from five million.

[21428037] |Some of the proposed modifications since, however, call on Saudi Arabia to "give back" to the production-sharing pool a token 23,000 barrels.
[21428038] |Though tiny, that's a reduction in its share.
[21428039] |Mr. Nazer, the Saudi oil minister, reiterated here that the kingdom would insist on maintaining its percentage share of OPEC production under any quota revisions.
[21428040] |"Under any circumstances, Saudi Arabia should get more" rather than less, Mr. Nazer said.

[21429001] |In a blow to France's Rafale jet fighter, the French navy for the first time publicly stated its desire to buy 15 McDonnell Douglas Corp. F-18 Hornets to defend its aircraft carriers.

[21429002] |The statement is likely to sharpen the debate within France's military establishment over the Rafale, which is made by Avions Marcel Dassault-Breguet Aviation SA.

[21429003] |In an interview in the navy's official weekly magazine Cols Bleus, the navy's second-in-command, Adm. Yves Goupil, said the navy still intends to buy 86 Rafales as scheduled in the late 1990s and early 21st century.
[21429004] |The air force is to take at least 250 more.

[21429005] |Adm. Goupil said the navy can't wait until 1998, when the naval Rafale becomes available, to replace its obsolete fleet of American-made Crusaders, used since the 1950s to protect carriers from attack.
[21429006] |Rather than renovate the Crusaders, which Dassault is proposing to do for around 1.8 billion French francs ($286.6 million), Adm. Goupil said the navy wants to buy used F-18s from the U.S. Navy.

[21429007] |Officially, the statement isn't an attack on the Rafale.
[21429008] |Adm. Goupil said that when the F-18s wear out, the navy is prepared to take Rafales to replace them.
[21429009] |But unofficially, senior navy officials sharply criticize the Rafale as an air force plane ill-suited to carrier use.
[21429010] |Although they never said so publicly, they have made no secret of their preference for the F-18 on operational grounds.

[21429011] |Adm. Goupil's comments are likely to inflame the broader dispute within the military establishment here over the role of Dassault.
[21429012] |Although government-controlled, Dassault still is run by the founder's son, Chairman Serge Dassault, who has fiercely protected his company's independence.
[21429013] |The Rafale project is the result of France's inability jointly to develop a plane with other countries, and French officials question whether the state can continue paying for expensive independent programs.
[21429014] |So far, Mr. Dassault has resisted pressure to change.

[21429015] |What brought the naval issue to a head is that the Crusaders are literally falling apart, without any immediate plan to replace them.
[21429016] |Adm. Goupil, a former Crusader squadron leader, said that the last other country to use Crusaders, the Philippines, retired its last ones two years ago.
[21429017] |A French Crusader crash a few months ago heightened pressure for new planes here.

[21429018] |Adm. Goupil rejected Dassault's proposal to renovate the Crusaders, saying the cost was impossible to estimate.
[21429019] |Even modernized, he said, the Crusaders represent an obsolete and dangerous protection for the aircraft carriers France has sent to meet such crises as the wars in Lebanon and the Persian Gulf.

[21429020] |Defense Minister Jean-Pierre Chevenement told a meeting of the Anglo-American Press Association that the question of modernizing the Crusaders or buying used F18s is a "political" decision that he will make in due time.

[21430001] |THE SUPREME COURT ruling upholding Missouri's restrictive abortion law was Webster vs. Reproductive Health Services.
[21430002] |The citation was misstated in Friday's edition.

[21431001] |Spending by average Japanese households in August fell an adjusted 1.9% from a year earlier, the Statistics Bureau of the Prime Minister's Office said.

[21431002] |The bureau cited typhoons in the month that discouraged shopping and leisure opportunities.

[21431003] |Spending by Japanese households averaged 290,782 yen ($2,052.10) in August.
[21431004] |In nominal terms it rose 0.6% from a year earlier before adjustment.

[21431005] |August adjusted spending by wage-earning families was down 0.6% to 309,381 yen from a year earlier.

[21431006] |The real income of wage-earning families in the month eased 1.2% to 438,845 yen from the previous year.

[21432001] |For Cathay Pacific Airways, the smooth ride may be ending.

[21432002] |The first signs of trouble came last month when the Hong Kong carrier, a subsidiary of Swire Pacific Ltd., posted a 5% drop in operating profit for the first six months and warned that margins will remain under pressure for the rest of the year.

[21432003] |Securities analysts, many of whom scrapped their buy recommendations after seeing Cathay's interim figures, believe more jolts lie ahead.
[21432004] |Fuel and personnel costs are rising, and tourism in and through Hong Kong remains clouded by China's turmoil since the June 4 killings in Beijing.

[21432005] |In addition, delivery delays for the first two of as many as 28 Boeing 747-400s that the carrier has ordered have raised costs because personnel had been hired to man the planes.
[21432006] |And tough competition in the air-freight market is cutting into an important sideline.

[21432007] |There also is concern that once Hong Kong reverts to China's sovereignty in 1997, Cathay will be forced to play second fiddle to China's often-disparaged flag carrier, Civil Aviation Administration of China, or CAAC.

[21432008] |"The sense is we would never be in a position again where everything works for us the way it did before," says Rod Eddington, Cathay's commercial director.

[21432009] |Sarah Hall, an analyst at James Capel (Far East) Ltd., says there isn't much Cathay can do about rising costs for jet fuel, Hong Kong's tight labor market, or the strengthening of the local currency, which is pegged to the U.S. dollar.
[21432010] |These factors are further complicated by the airline's push to transform itself from a regional carrier to an international one, Ms. Hall says.

[21432011] |Ms. Hall expects Cathay's profit to grow around 13% annually this year and next.
[21432012] |In 1988, it earned $2.82 billion Hong Kong (US$361.5 million) on revenue of HK$11.79 billion.

[21432013] |Cathay is taking several steps to bolster business.
[21432014] |One step is to beef up its fleet.
[21432015] |In addition to aircraft from Boeing Co., Cathay announced earlier this year an order for as many as 20 Airbus A330-300s.
[21432016] |The expansion, which could cost as much as US$5.7 billion over the next eight years, will expand the fleet to about 43 planes by 1991, up from 30 at the end of last year, according to Sun Hung Kai Securities Ltd.

[21432017] |The fuel-efficient Airbus planes will be used largely to replace Cathay's aging fleet of Lockheed Tristars for regional flights, while the Boeing aircraft will be used on long-haul routes to Europe and North America.

[21432018] |Cathay also is moving some of its labor-intensive data-processing operations outside Hong Kong.
[21432019] |Fierce bidding for young employees in Hong Kong is pushing up Cathay's labor costs by 20% a year for low-level staff, while experienced, skilled employees are leaving the colony as part of the brain drain.
[21432020] |Some jobs already have been moved to Australia, and there are plans to place others in Canada.
[21432021] |David Bell, a spokesman for the airline, says the move is partly aimed at retaining existing staff who are leaving to secure foreign passports ahead of 1997.

[21432022] |Cathay is working to promote Hong Kong as a destination worth visiting on its own merits, rather than just a stopover.
[21432023] |Although the June 4 killings in Beijing have hurt its China flights, Cathay's other routes have retained high load factors.
[21432024] |Mr. Eddington regards promoting Hong Kong as an important part of attracting visitors from Japan, South Korea and Taiwan, where the number of people looking to travel abroad has surged.

[21432025] |There also has been speculation that Cathay will be among the major private-sector participants in the Hong Kong government's plans to build a new airport, with the carrier possibly investing in its own terminal.
[21432026] |Cathay officials decline to comment on the speculation.

[21432027] |Mr. Eddington sees alliances with other carriers -- particularly Cathay's recent link with AMR Corp.'s American Airlines -- as an important part of Cathay's strategy.
[21432028] |But he emphasizes that Cathay hasn't any interest in swapping equity stakes with the U.S. carrier or with Lufthansa, the West German airline with which it has cooperated for about a decade.
[21432029] |Analysts believe Cathay is approached for such swaps by other carriers on a regular basis, particularly as the popularity of share exchanges has grown among European carriers.

[21432030] |"We think alliances are very important," Mr. Eddington says.
[21432031] |"But we'd rather put funds into our own business rather than someone else's.
[21432032] |I'm not sure cross-ownership would necessarily make things smoother."

[21432033] |In a pattern it aims to copy in several key U.S. destinations, Cathay recently announced plans to serve San Francisco by flying into American Airlines' Los Angeles hub and routing continuing passengers onto a flight on the U.S. carrier.

[21432034] |"We'll never have a big operation in the U.S., and they'll never have one as big as us in the Pacific," Mr. Eddington says.
[21432035] |"But this way, American will coordinate good extensions to Boston, New York, Chicago and Dallas.
[21432036] |We'll coordinate on this end to places like Bangkok, Singapore and Manila."

[21432037] |Asian traffic, which currently accounts for 65% of Cathay's business, is expected to continue as the carrier's mainstay.
[21432038] |Cathay has long stated its desire to double its weekly flights into China to 14, and it is applying to restart long-canceled flights into Vietnam.
[21432039] |Further expansion into southern Europe is also possible, says Mr. Bell, the spokesman.

[21432040] |While a large number of Hong Kong companies have reincorporated offshore ahead of 1997, such a move isn't an option for Cathay because it would jeopardize its landing rights in Hong Kong.
[21432041] |And Mr. Eddington emphatically rules out a move to London: "Our lifeblood is Hong Kong traffic rights."

[21432042] |He says the airline is putting its faith in the Sino-British agreement on Hong Kong's return to China.
[21432043] |A special section dealing with aviation rights states that landing rights for Hong Kong's airlines, which include the smaller Hong Kong Dragon Airlines, will continue to be negotiated by Hong Kong's government.
[21432044] |But critics fret that post-1997 officials ultimately will be responsible to Beijing.

[21432045] |"My feeling is {Cathay doesn't} have a hope in the long run," says an analyst, who declines to be identified.
[21432046] |"Cathay would love to keep going, but the general sense is they're going to have to do something."

[21432047] |Mr. Eddington acknowledges that the carrier will have to evolve and adapt to local changes, but he feels that the Sino-British agreement is firm ground to build on for the foreseeable future.
[21432048] |"We're confident that it protects our route structure," he says, "and our ability to grow and prosper.

[21433001] |Falcon Cable Systems Co. said it proposed an amendment that would allow it to increase its debt cap to 65% of the company's fair market value from the 40% currently allowed.
[21433002] |Falcon, a limited partnership, said it wanted the increase in order to continue its $2.15-per-unit annual payment, and for expansion and acquisitions.

[21433003] |A spokesman for the company said a meeting would be held for shareholders to vote on the amendment before year's end.

[21434001] |Friday, October 20, 1989

[21434002] |The key U.S. and foreign annual interest rates below are a guide to general levels but don't always represent actual transactions.

[21434003] |PRIME RATE: 10 1/2%.
[21434004] |The base rate on corporate loans at large U.S. money center commercial banks.

[21434005] |FEDERAL FUNDS: 8 3/4% high, 8 5/8% low, 8 11/16% near closing bid, 8 3/4% offered.
[21434006] |Reserves traded among commercial banks for overnight use in amounts of $1 million or more.
[21434007] |Source: Fulton Prebon (U.S.A.) Inc.

[21434008] |DISCOUNT RATE: 7%.
[21434009] |The charge on loans to depository institutions by the New York Federal Reserve Bank.

[21434010] |CALL MONEY: 9 3/4% to 10%.
[21434011] |The charge on loans to brokers on stock exchange collateral.

[21434012] |COMMERCIAL PAPER placed directly by General Motors Acceptance Corp.: 8.50% 15 to 44 days; 8.25% 45 to 72 days; 8.375% 73 to 96 days; 8.125% 97 to 119 days; 8% 120 to 149 days; 7.875% 150 to 179 days; 7.50% 180 to 270 days.

[21434013] |COMMERCIAL PAPER: High-grade unsecured notes sold through dealers by major corporations in multiples of $1,000: 8.55% 30 days; 8.45% 60 days; 8.40% 90 days.

[21434014] |CERTIFICATES OF DEPOSIT: 8.05% one month; 8.02% two months; 8% three months; 7.98% six months; 7.95% one year.
[21434015] |Average of top rates paid by major New York banks on primary new issues of negotiable C.D.s, usually on amounts of $1 million and more.
[21434016] |The minimum unit is $100,000.
[21434017] |Typical rates in the secondary market: 8.55% one month; 8.50% three months; 8.40% six months.

[21434018] |BANKERS ACCEPTANCES: 8.45% 30 days; 8.33% 60 days; 8.32% 90 days; 8.15% 120 days; 8.06% 150 days; 7.96% 180 days.
[21434019] |Negotiable, bank-backed business credit instruments typically financing an import order.

[21434020] |LONDON LATE EURODOLLARS: 8 11/16% to 8 9/16% one month; 8 11/16% to 8 9/16% two months; 8 11/16% to 8 9/16% three months; 8 5/8% to 8 1/2% four months; 8 9/16% to 8 7/16% five months; 8 1/2% to 8 3/8% six months.

[21434021] |LONDON INTERBANK OFFERED RATES (LIBOR): 8 3/4% one month; 8 11/16% three months; 8 9/16% six months; 8 1/2% one year.
[21434022] |The average of interbank offered rates for dollar deposits in the London market based on quotations at five major banks.

[21434023] |FOREIGN PRIME RATES: Canada 13.50%; Germany 8.50%; Japan 4.875%; Switzerland 8.50%; Britain 15%.
[21434024] |These rate indications aren't directly comparable; lending practices vary widely by location.

[21434025] |TREASURY BILLS: Results of the Monday, October 16, 1989, auction of short-term U.S. government bills, sold at a discount from face value in units of $10,000 to $1 million: 7.37% 13 weeks; 7.42% 26 weeks.

[21434026] |FEDERAL HOME LOAN MORTGAGE CORP. (Freddie Mac): Posted yields on 30-year mortgage commitments for delivery within 30 days. 9.84%, standard conventional fixed-rate mortgages; 7.875%, 2% rate capped one-year adjustable rate mortgages.
[21434027] |Source: Telerate Systems Inc.

[21434028] |FEDERAL NATIONAL MORTGAGE ASSOCIATION (Fannie Mae): Posted yields on 30 year mortgage commitments for delivery within 30 days (priced at par) 9.78%, standard conventional fixed-rate mortgages; 8.75%, 6/2 rate capped one-year adjustable rate mortgages.
[21434029] |Source: Telerate Systems Inc.

[21434030] |MERRILL LYNCH READY ASSETS TRUST: 8.52%.
[21434031] |Annualized average rate of return after expenses for the past 30 days; not a forecast of future returns.

[21435001] |In the hard-hit Marina neighborhood, life after the earthquake is often all too real, but sometimes surreal.
[21435002] |Some scenes: -- Saturday morning, a resident was given 15 minutes to scurry into a sagging building and reclaim what she could of her life's possessions.
[21435003] |Saturday night she dined in an emergency shelter on salmon steaks prepared by chefs from one of the city's four-star restaurants.

[21435004] |-- Mayor Art Agnos stands in the glare of television lights trying to explain for the 20th time why the city is severely restricting access to badly damaged structures.
[21435005] |A couple in fashionable spandex warm-up suits jogs by, headphones jauntily in place, weaving their way along a street of fractured and fallen houses.
[21435006] |At a nearby corner, they swerve perilously close to a listing apartment house, oblivious to any danger.
[21435007] |A policeman shakes his head in amazement as he steers them away.

[21435008] |-- A young woman who has been out of town shows up at the Marina Middle School to learn that her apartment is on the condemned list.
[21435009] |She is told she can't enter unless she is accompanied by an inspector.
[21435010] |She bursts into tears and walks away.
[21435011] |Nearby, five temporary residents of the school shelter sit on stools, having their necks and backs kneaded by volunteer masseuses.

[21435012] |The Marina rescue center offered a very San Franciscan response to the disaster.
[21435013] |In addition to free massages, there was free counseling, phone calls and a free shuttle bus to a health club, which offered up its showers, saunas and hot tubs.
[21435014] |The cafeteria offered donated croissants and brie for breakfast, and for dinner, pasta salad and chocolate mousse torts along with the salmon.

[21435015] |"This has been a 15-pound earthquake for me," said resident Joan O'Shea, who works in an acupuncturist's office.
[21435016] |She and some friends are considering offering earthquake victims free yoga classes and "aroma therapy" -- massages with scented oils.
[21435017] |She finds the response of Marina residents -- primarily yuppies and elderly people -- to the devastation of their homes "incredible.
[21435018] |People have been very respectful of each other.
[21435019] |I don't know if this would have happened somewhere else."

[21435020] |Out on the streets, some residents of badly damaged buildings were allowed a 15-minute scavenger hunt through their possessions.
[21435021] |"It's so weird to have to decide what's really important to you," said Barbara May.
[21435022] |She went first for personal mementos.
[21435023] |In post-earthquake parlance, her building is a "red."
[21435024] |After being inspected, buildings with substantial damage were color-coded.
[21435025] |Green allowed residents to re-enter; yellow allowed limited access; red allowed residents one last entry to gather everything they could within 15 minutes.

[21435026] |Reds and yellows went about their business with a kind of measured grimness.
[21435027] |Some frantically dumped belongings into pillowcases, others threw goods out windows.
[21435028] |It didn't help that on Saturday, after three days of sunshine, it rained.

[21435029] |"The guys are going for their skis, their stereos, their personal computers," said Frank Fitzgerald, who helped others empty their apartments.
[21435030] |"The women wanted photo albums, a certain brooch, kind of sentimental things."
[21435031] |He showed an unbroken, still-ticking pocket watch that he retrieved for one woman.
[21435032] |It belonged to her grandfather.

[21435033] |Some residents defied orders and returned to "red" buildings to retrieve goods.
[21435034] |One building was upgraded to red status while people were taking things out, and a resident who wasn't allowed to go back inside called up the stairs to his girlfriend, telling her to keep sending things down to the lobby.
[21435035] |A policewoman had to be called in to make her leave; the policewoman helped carry out one last load.

[21435036] |Enforcement of restricted-entry rules was sporadic, residents said.
[21435037] |One man trying to remove his car was told by officials to get out of his garage.
[21435038] |When he sneaked back later to try again, a different policeman offered to help him get the car out.

[21435039] |The Marina also has become the focal point of city efforts to reunite residents with any pets that may have fled or become lost during the earthquake.
[21435040] |On lampposts along Fillmore Street, a major Marina artery, posters were offering a $100 reward for a cat lost during the quake.

[21435041] |The San Francisco Society for the Prevention of Cruelty to Animals also has been providing medical care, food, water and foster homes for quake-displaced animals.
[21435042] |The SPCA says it has received more than 100 requests for foster homes on behalf of dogs and cats, though some people have sought temporary homes for birds and fish.

[21435043] |For example, one parakeet owner returning home found that her apartment, like many others in the Marina, didn't have heat.
[21435044] |"She can stay there with no heat, but for a parakeet, that can be deadly," says Daralee Konowitch, animalcare services manager for the SPCA.
[21435045] |A warm foster home has been found.

[21436001] |The neighborhood around Alexander Haagen Co.'s Vermont-Slauson Shopping Center in the Watts section of Los Angeles resembles the crime-ridden, deteriorating sections of many inner cities and certainly isn't the sort of area one would choose to visit.
[21436002] |But turn into the shopping center's parking lot, and one could be in the safe, busy mall of a prosperous suburb.
[21436003] |Only it is safer, and busier.

[21436004] |Over the past year there have been only one burglary, three thefts of or from autos, no purse-snatchings, and one attempted robbery in the mall, which opened in late 1981.
[21436005] |A shopping center of similar size in an affluent Los Angeles suburb would, per year, be expected to have eight burglaries, 70 thefts of or from autos, and four robberies.
[21436006] |The Watts mall has annual sales of more than $350 per leasable square foot; the figure for a comparable suburban shopping center would be $200.
[21436007] |Three other Haagen shopping centers in the Watts area are doing almost as well.

[21436008] |A successful low-crime mall in a high-crime area violates the more typical inner-city pattern, in which commercial areas are taken over by unruly youth, gangs, and the criminal element, with an erosion of the customer base, development capital, and insurability.
[21436009] |Major regional and national chain stores are replaced by mom-and-pop operations offering poorer-quality merchandise at higher prices.
[21436010] |Along with the exodus of shopping opportunities is an exodus of the jobs that the major chains used to provide to community residents.

[21436011] |Thus there is even more to the Vermont-Slauson Center than a good place to shop.
[21436012] |This defensible commercial zone becomes, for the residents, a secure oasis in a barren urban landscape, evidence that community decay is not inevitable and that the gangs are not invincible.
[21436013] |The center improves the community image to outsiders as well, and may help to arrest, or even reverse, the exodus of capital and investment.

[21436014] |An additional benefit is the creation of jobs.
[21436015] |This starts in the construction phase through the use of minority contractors and local workers.
[21436016] |It continues through the life of the center; the Vermont-Slauson Center has created 500 permanent private-sector jobs at a one-time cost in public funds of only $2,500 per job.
[21436017] |As many of these jobs are filled by local residents, who move from the welfare rolls to the tax rolls, the $2,500-per-job public investment should repay itself in a few years.
[21436018] |And that is before consideration of increased state and local revenues from taxes and fees on sales, real estate, licenses and the like.

[21436019] |Profits are also plowed back into the community; the non-profit Vermont-Slauson Economic Development Corp. receives 60% of the profits from the Vermont-Slauson Center and uses the money to provide moderate and low-cost housing in the community -- now running into the hundreds of units -- as well as commercial and industrial development projects.

[21436020] |Bradford Crowe, director of the mayor's City Economic Development Office, says: "There is no question that Vermont-Slauson had a halo effect on the surrounding neighborhood.
[21436021] |What had been a deteriorated area with nothing but wig shops and shoe shops is now experiencing a major upgrading in the housing and commercial stock, thanks to a continuously replenished source of revitalization capital that Vermont-Slauson yields."

[21436022] |Another benefit is that substantial percentages of the proprietors in these centers are minority businessmen and women.
[21436023] |In the Grand Boulevard Plaza developed by Matanky Realty Group in Chicago's Third Ward, opposite the Robert Taylor Homes, 29% of the stores to date have been leased to blacks and 14% to members of other minority groups.
[21436024] |Children from the community will have worthier role models than the drug kingpins.

[21436025] |So what's the catch?
[21436026] |Primarily that putting one of these inner-city deals together takes time, patience, breadth of vision and negotiating skills that not all developers possess.
[21436027] |Security costs are also quite high.

[21436028] |One of these centers can involve years of negotiating with numerous public agencies, local political leaders, and citizen groups, and with prospective tenants and sources of financing.
[21436029] |Suburban deals are not without their delays and complications -- inner-city deals just have more of them.

[21436030] |Security at a typical Haagen inner-city center is impressive, but unobtrusive.
[21436031] |The entire site is enclosed by a 6-to-8-foot-high ornamental iron fence with a small number of remote-controlled gates.
[21436032] |Shrubs and flowers give it a pleasing and non-fortress-like appearance.
[21436033] |Infrared motion detectors and closed-circuit TV cameras monitor the entire center; lighting levels are three to five times the industry standard.
[21436034] |The security command post, camouflaged as second-story retail space, has its own "crow's nest" above the roofs of the other buildings, with a panoramic view of the entire center.
[21436035] |Local law enforcement is present in a sub-station occupying space donated by the center.
[21436036] |These features are also used in Matanky Realty Group's Grand Boulevard Plaza.
[21436037] |Haagen has its own large security force of well-trained and well-paid personnel on round-the-clock duty at each center.
[21436038] |Security is 60% to 70% of the common area charges of these centers, vs. an industry average of about 15%.

[21436039] |These security costs are kept off-budget because the centers' site acquisition, construction, and financing costs were reduced by such programs as Urban Development Action Grants, Economic Development Administration Grants, Community Development Block Grants, tax-free Industrial Development Bonds, Enterprise Zone tax write-offs, city infrastructure grants, and tax increment financing.

[21436040] |Many of these programs no longer exist, or have been severely cut back.
[21436041] |However, since these centers appear to pay for themselves, there is nothing to prevent state and local governments from enacting legislation with similar provisions.

[21436042] |Many states already have Enterprise Zones and legislation that combines tax incentives, loans, and grants to encourage investment in depressed areas with requirements for the hiring of the unemployed and minorities.
[21436043] |These programs could be expanded to focus on funds for project planning, identifying sources of funds, and for acquiring a site and preparing it.
[21436044] |Combatting crime and the fear of it in inner-city commercial areas should give Enterprise Zones more success than most have enjoyed to date.

[21436045] |With many suburban areas basically overbuilt with shopping centers, inner-city areas may represent a major new untapped market for investment.
[21436046] |New approaches to mall design and operation make it possible to tap these markets.
[21436047] |If the risks and rewards are reasonable, developers will respond.
[21436048] |Government officials who wonder how important it is for them to encourage development in high-risk areas should visit Vermont-Slauson and Grand Boulevard Plaza and decide for themselves.
[21436049] |The answer will be obvious.

[21436050] |Mr. Titus is a researcher at the Justice Department's National Institute of Justice.

[21437001] |ATHLONE INDUSTRIES Inc. said that on Dec. 21 it will redeem $10 million face amount of its $59.3 million of 15.625% subordinated notes outstanding, due June 1, 1991.
[21437002] |For each $1,000 of notes, the maker of specialty metals, industrial fasteners and consumer products will pay $1,026.46 plus $8.68 of interest accrued from Dec. 1.
[21437003] |The company will notify holders of the notes to be redeemed.
[21437004] |Manufacturers Hanover Trust Co. is redemption agent.

[21438001] |One company recently was listed on the New York Stock Exchange, and another will join the Big Board from the over-the-counter market this week.

[21438002] |Putnam Investment Grade Municipal Trust, Boston, was listed with the symbol PGM.
[21438003] |The new closed-end management investment company trades shares of beneficial interest.
[21438004] |It invests primarily in tax-exempt municipal securities.

[21438005] |Hibernia Corp., a New Orleans bank holding company, will join the Big Board Thursday under HIB.
[21438006] |Three companies began trading over the counter.

[21438007] |Exabyte Corp., a Boulder, Colo., maker of high-capacity tape cartridge systems used to back up computer disk drives, started OTC trading with the symbol EXBT.

[21438008] |Rally's Inc., a Louisville, Ky., restaurant franchisor, started trading under RLLY.

[21438009] |Sierra Tucson Cos., Tucson, Ariz., started trading under STSN.
[21438010] |It operates various types of addiction-treatment facilities.
[21438011] |Separately, on the Pacific Stock Exchange, put and call options on the common stock of Aldus Corp. started trading.
[21438012] |Aldus, Seattle, makes computer software products.
[21438013] |Options give a holder the right, but not the obligation, to buy or sell a security at a set price within a set period of time.

[21439001] |Dow Chemical Co. said its Destec Energy Inc. unit has agreed to buy PSE Inc., a Houston energy company, in a deal valued at about $115 million.

[21439002] |Dow, of Midland, Mich., said its unit will begin by Thursday a tender offer of $12.25 a share for all PSE common shares outstanding.
[21439003] |Among other conditions, the offer depends on the Dow unit acquiring at least 66 2/3% of the PSE shares outstanding, the companies said in a joint statement Friday.

[21439004] |PSE has about 9.2 million shares outstanding.
[21439005] |The company said the approximately $115 million acquisition price includes its total $33 million of long-term debt outstanding.
[21439006] |Dow said it already has agreements with Albert J. Smith Jr., chairman and chief executive officer of PSE, and certain other officers of the company under which Dow may buy about 40% of the PSE common shares outstanding.

[21439007] |PSE is a designer and operator of energy-cogeneration facilities and had 1988 sales of $234 million.
[21439008] |The company is owner and operator, or an equity partner, in six cogeneration facilities -- two in Texas and four in California.

[21439009] |The company said recently it expects third-quarter earnings will be in range from $1.3 million to $1.7 million, or 14 cents to 18 cents a share, compared with $326,000, or four cents a share, a year ago.

[21440001] |If growth regains its glamour among investors, a sluggish segment of the Nasdaq over-the-counter market could show some flash.

[21440002] |Some stock pickers already are targeting the OTC market, where, they say, await plenty of small- and medium-sized growth stocks.
[21440003] |Best of all, they add, these growth issues, unlike their big blue-chip cousins on the New York Stock Exchange, are languishing at depressed prices.

[21440004] |Growth stocks will return to favor, some analysts and money managers think, because of the jitters caused by the market's steep slide on Oct. 13, and because of the current swell of disappointing earnings announcements.
[21440005] |Against such a backdrop, companies with proven track records of earnings gains of 20% or so annually have extra appeal.

[21440006] |"The market will have to look for a new theme now and that theme will be a return to growth," declares Mary Farrell, a PaineWebber analyst.
[21440007] |Among her OTC picks are Oshkosh B'Gosh and A&W Brands.
[21440008] |Like many OTC growth issues, they have market values -- as measured by stock price times shares outstanding -- of roughly $100 million to $500 million.

[21440009] |Some like to specialize in growth companies whose shares haven't traded publicly very long.
[21440010] |These are sometimes dubbed "emerging" growth companies, though they also have expanding-profit track records.

[21440011] |While many growth stocks are small, not all small stocks have earnings-growth momentum.
[21440012] |That's an important distinction because some analysts and brokers, who perennially predict that small stocks are about to outperform bigger issues, may use any spurt in growth issues to help them sell all small stocks.

[21440013] |"You can find some good, quality companies over the counter," but investors should be selective, says John Palicka, chief portfolio manager at Midco Investors, a Newark, N.J., money management company with about $900 million invested in growth stocks of varying sizes.
[21440014] |Mr. Palicka's picks from the OTC market include Legent, Mail Boxes Etc., and Payco American.

[21440015] |The main argument for growth stocks is their usually superior performance in a slowing economy.
[21440016] |"If the market refocuses on earnings, we should get better valuations of growth stocks," says L. Keith Mullins, a growth-stock analyst at Morgan Stanley.
[21440017] |Eventually, he believes, investors will be willing to pay higher prices for companies with proven track records of earnings growth.
[21440018] |In anticipation of that shift, he and other analysts are encouraging their clients to buy such issues now.

[21440019] |Understandably, smaller growth stocks haven't been in favor recently.
[21440020] |The average issue on Standard & Poor's 500-stock Index gained 35% last year, Ms. Farrell of PaineWebber says.
[21440021] |Smaller-stock earnings, by comparison, rose between 15% and 20%.

[21440022] |In addition, earnings growth took a back seat to cash flow, restructuring and takeover potential, and breakup value as the preferred stock-picking standards for much of the year.
[21440023] |Also, the smaller growth stocks aren't widely traded, and so are harder to buy and sell quickly than blue chips.

[21440024] |As a result, Morgan Stanley's Index of 40 Emerging Growth Stocks -- most of which are in the OTC market -- is up only 13% for the year, while the Dow Jones Industrial Average has leaped 24% and the S&P 500 has grown 25%.
[21440025] |The Nasdaq Composite has gained 23% this year, but that's largely due to the 100 largest nonfinancial stocks, which have soared 30%.

[21440026] |Some investors are skeptical of growth stocks because investing in them means ignoring that maxim found in the fine print of some investment advertisements -- that past performance isn't indicative of future results.
[21440027] |"People are naturally suspicious of them," says Mr. Mullins of Morgan Stanley.
[21440028] |Among his favorites in his firm's index are Legent, Silicon Graphics and Novell.

[21440029] |However, more money managers are reassured that profit is regaining importance.
[21440030] |Mark Schoeppner, portfolio manager at Pittsburgh-based Quaker Capital Management, says that in reaction to nervousness about debt-laden buy-out transactions, analysts and investors now appear to be "valuing stock based on future earnings as opposed to the amount of debt the company can support."

[21440031] |Barney Hallingby, managing director of research at Hambrecht & Quist, also believes earnings growth is beginning to play a greater part in investors' buying decisions.
[21440032] |On Friday, Hambrecht & Quist added St. Jude Medical to the list of 20 stocks it strongly recommends.
[21440033] |The opinion is largely based on the company's earnings momentum, Mr. Hallingby says.

[21440034] |St. Jude's market value on Nasdaq exceeds $1 billion, so it isn't a small stock.
[21440035] |The medical devices maker's earnings rose nearly 35% in 1987 from 1986, and 75% in 1988.
[21440036] |Kurt Kruger, who follows the stock for Hambrecht & Quist, anticipates that the company's net income will grow 51% to $2.15 a share this year.
[21440037] |St. Jude finished up 1/4 to 44 1/2 on Friday.

[21440038] |Friday's Market Activity

[21440039] |The Nasdaq Composite Index eased 0.13 to 470.67.
[21440040] |The composite finished up 0.7% from last Friday's close.

[21440041] |It was a busy week for OTC stocks.
[21440042] |Friday's volume totaled 158.2 million shares; the daily average for the week was a bustling 176.7 million.

[21440043] |Valley National lost 1 3/8 to 17 1/8 on volume of 1.9 million shares.
[21440044] |The company reported a big third-quarter loss on Thursday.

[21440045] |Merchants Bank of New York lost 1 to 106 after reporting that its third-quarter net income fell to $1.62 a share from last year's $1.67 a share.

[21440046] |Eliot Savings Bank lost 7/8 to 1 5/8 after reporting that it had a $4.8 million loss in the latest third quarter mostly because of loan-loss provisions.
[21440047] |In the 1988 quarter, the bank earned $1.1 million.

[21440048] |One bank stock was a winner.
[21440049] |BanPonce jumped 4 1/2 to 47 3/4 after agreeing to be acquired by Banco Popular de Puerto Rico for $56.25 a share.
[21440050] |Banco Popular, meanwhile, dropped 1 1/4 to 21 1/2.

[21440051] |Sierra Tucson, an initial public offering, made the most active list.
[21440052] |The company's shares began trading at 12 1/2, up from its initial offering price of 12, and closed at 13.
[21440053] |Sierra Tucson operates an addiction treatment center.

[21440054] |Among declining issues, a weak earnings outlook drove Groundwater Technology down 6 1/4 to 24.
[21440055] |The company said results for its second quarter ended Oct. 28 could drop as much as 20% below the 30 cents a share reported in the year-earlier quarter.

[21440056] |Medstone International plummeted 3 1/4 to 7 1/4.
[21440057] |A Food and Drug Administration advisory panel has asked that Medstone perform more studies on its device to treat gallstones.

[21440058] |Qintex Entertainment dropped 2 5/8 to 1 1/2 after seeking protection from creditor lawsuits under Chapter 11 of the federal Bankruptcy Code for itself and its two operating subsidiaries, Hal Roach Studios and Qintex Productions.

[21440059] |Raymond Corp. lost 1 to 10 after it said late Thursday that it will take a $4.4 million charge in its third quarter for reserves to cover potential charges in connection with the closing and sale of a manufacturing plant.
[21440060] |As a result, the company has suspended its quarterly dividend.

[21440061] |McCaw Cellular Communications and its target, LIN Broadcasting, were active.
[21440062] |LIN added 5/8 to 110 5/8 and McCaw lost 1/4 to 41.
[21440063] |McCaw said it has secured commitments from three banks to help finance its $125-a-share bid for 22 million of Lin's shares.
[21440064] |McCaw has called for a "fair auction" of LIN, which earlier entered a stock-swap merger pact with BellSouth.

[21440065] |Following the release of the company's fourth-quarter earnings, Apple Computer dropped 3/4 to 48 on volume of more than 2.3 million shares.
[21440066] |Apple earned $161.1 million, or $1.24 a share, in the quarter, including $48 million from the sale of its Adobe Systems stock.

[21441001] |The following were among Friday's offerings and pricings in the U.S. and non-U.S. capital markets, with terms and syndicate manager, as compiled by Dow Jones Capital Markets Report:

[21441002] |Chicago & North Western Acquisition Corp. -- $475 million of senior subordinated resettable debentures, due Oct. 15, 2001, priced at par to yield 14.75%.
[21441003] |The coupon will be reset in one year at a rate that will give the issue a market value of 101.
[21441004] |However, the maximum coupon rate on the issue when it is reset can only be 15.5%.
[21441005] |Debenture holders will also receive the equivalent of 10% of the common stock of CNW Holdings.
[21441006] |The equity kicker is not attached to the offering, but underwriters said it will be offered after a filing for 68,548 common shares of CNW Holdings is declared effective by the Securities & Exchange Commission.
[21441007] |The issue is noncallable for five years and has a sinking fund starting in 2000 to retire 50% of the issue before maturity.
[21441008] |Rated single-B-2 by Moody's Investors Service Inc. and single-B-minus by Standard & Poor's Corp., the issue will be sold through underwriters led by Donaldson Lufkin & Jenrette Securities Corp.

[21441009] |Tokuyama Soda Co. (Japan) -- $200 million of Eurobonds due Nov. 9, 1993, with equity-purchase warrants, indicating a 4% coupon at par, via Nomura International Ltd.
[21441010] |Each $5,000 bond carries one warrant, exercisable from Nov. 28, 1989, through Oct. 28, 1993, to buy company shares at an expected premium of 2 1/2% to the closing share price when terms are fixed Oct. 27.

[21442001] |For bankers and regulators, Arizona is looking more like Texas every day.

[21442002] |On Friday, Los Angeles-based First Interstate Bancorp said it expects a net loss of $16 million for the third quarter of 1989 because of hemorrhaging at its First Interstate Bank of Arizona unit.
[21442003] |First Interstate said the unit, bludgeoned by Arizona's worsening real-estate woes, will have a $174 million loss for the quarter.
[21442004] |First Interstate took a huge $350 million provision for loan losses at the Arizona bank.
[21442005] |It charged off an estimated $200 million of Arizona loans, leaving the unit with a reserve for future losses of $255 million, about 61% of its $416 million of troubled loans and repossessed real estate.

[21442006] |First Interstate made the move under pressure from regulators.
[21442007] |The action capped a spurt of grim Arizona banking news for the third quarter, and emphatically signaled that Arizona is challenging Texas's long reign as banking's busiest graveyard.
[21442008] |Earlier last week, Valley National Corp., the state's largest locally owned banking company, reported a $72.2 million loss and suspended its dividend.

[21442009] |Pinnacle West Capital Corp., which has been wrangling with regulators for months over what to do about Pinnacle's moribund Merabank thrift unit, suspended its dividend and reported a 91% plunge in third-quarter net income.
[21442010] |Security Pacific Corp. said third-quarter credit losses surged a third to $109 million, mainly because of sour Arizona real-estate loans.
[21442011] |New York-based Chase Manhattan Corp. took an $85 million Arizona-related charge.

[21442012] |Furthermore, the regulatory maneuvering behind First Interstate's loss suggests regulators have concluded that lenders' reserves are far too low to absorb their future Arizona losses and are forcing bankers to do something about it.
[21442013] |Examiners from the Office of the Comptroller of the Currency had been combing through First Interstate's real-estate portfolio since last month; they first recommended that First Interstate take a provision that was less than the eventual $350 million third-quarter hit.
[21442014] |When First Interstate balked, arguing that the figure was too high, regulators responded by raising their recommendation to $350 million.

[21442015] |"At that point, {First Interstate} decided it was the better part of valor not to negotiate further," said one industry official close to the talks.
[21442016] |Thomas P. Marrie, chief financial officer, wouldn't comment about the details of the negotiations.
[21442017] |He said the provision "wasn't forced upon us, but the regulators made it very clear what they thought was an appropriate number."

[21442018] |The tough regulatory stance portends large future losses, especially at the state's thrifts.
[21442019] |At least six of Arizona's 12 savings and loan institutions have either been taken over by the government's conservatorship program or are essentially insolvent; they are sitting on enormous unrecognized losses.

[21442020] |For example, Western Savings & Loan Association, which is now in conservatorship, had tangible capital-assets minus liabilities -- of a negative $357.4 million at June 30.
[21442021] |It had a $258.9 million loss in the second quarter.
[21442022] |Yet it still held $916.3 million of repossessed real estate, for which it maintains no reserves whatsoever.
[21442023] |It also had $479.7 million of past-due loans; its level of reserves against those wasn't immediately available, though it is believed to be small.

[21442024] |The rapid deterioration of the Arizona thrifts only adds to the ever-swelling cost of the government's massive thrift bailout, officially estimated at about $166 billion.
[21442025] |Together, the six government-controlled or essentially insolvent Arizona thrifts have tangible capital of a negative $1.5 billion, foreclosed property of $1.8 billion and pastdue loans of $1.63 billion.

[21442026] |They have no reserves against the real estate, and their reserves against the loans are miniscule compared with the levels of reserves banks are moving to set up.
[21442027] |The thrifts had a combined loss of $487.8 million in the second quarter.
[21442028] |Other lenders have been recovering only 50 cents to 60 cents on the dollar on foreclosed Arizona property, if they can sell it at all.

[21442029] |All this havoc is the result of one of the worst busts in Arizona's boom-and-bust history, compounded by some of the usual suspects in 1980s banking debacles: greed, fraud and plain bad banking.
[21442030] |In the late 1970s and early 1980s, lenders and developers poured money into office buildings, condominiums and massive tracts of raw desert land, confident that Arizona's population would grow at annual rates of 4% to 6% for years to come.
[21442031] |Now, annual population growth is running at about 2% a year, some desert tracts bought three years ago for $90,000 an acre are being sold at $25,000 an acre and Phoenix has a seven-year supply of unoccupied office space.

[21442032] |"It's horrible to say, but it's unfortunate that earthquake wasn't in Phoenix -- it might have knocked out some of our empty buildings," said C.W. Jackson, a prominent Arizona businessman with interests in real estate, banking and many other businesses.

[21442033] |Many Arizona real-estate experts think the worst may be yet to come.
[21442034] |Ralph Shattuck, publisher of Foreclosure Update newsletter, said foreclosures have climbed to about 1,482 a month just in Maricopa County, where Phoenix is located.
[21442035] |That's up from about 687 a month in 1985, and it's accelerating: So far this month, foreclosures are averaging about 85 a day.
[21442036] |"It's frightening," Mr. Shattuck said.

[21442037] |Moreover, Mr. Shattuck and others said residential real estate, which had remained fairly strong through most of the downturn, is beginning to comprise more and more of the foreclosures.
[21442038] |And the generally frail condition of Arizona's lenders means there is little capital available in the state to shore up the economy and slow down the slide.

[21442039] |"It's reasonable to say there is not a solvent S&L in the state and the amount of viable bank capital is very low," said Mr. Jackson.
[21442040] |"We're going to see another big wave of failures and defaults between now and year-end. . . .
[21442041] |The only thing a lot of these lenders can get out of their mouth now is: `Pay me in 60 days.'"

[21442042] |First Interstate had a $214.4 million loss in 1988's third quarter, mainly from writedowns and reserves connected with its Texas operations.
[21442043] |For the six months ended June 30, it reported net income of $234.3 million, or $4.83 a share, including $46 million from tax credits and accounting changes.

[21442044] |The bank's Arizona unit holds about $6 billion of First Interstate's $50 billion of assets.
[21442045] |Mr. Marrie said the bank expects Arizona real-estate prices, which plummeted 40% over the last year, to fall another 20% before stabilizing.
[21442046] |Some in Arizona think that may be optimistic.
[21442047] |First Interstate said its operations outside of Arizona "achieved results as expected for the quarter," but didn't specify the results.

[21442048] |First Interstate stock closed at $57.625, down 25 cents, in composite trading Friday on the New York Stock Exchange.
[21442049] |Since its unsuccessful bid for BankAmerica Corp. in 1986, the bank has undertaken a major restructuring in an effort to cut costs and boost performance, but many industry officials believe it may be ripe for a takeover bid, especially with interstate banking set to begin in California in 1991.
[21442050] |Mr. Marrie said the problems in Arizona have only "increased our resolve to continue to make our restructuring even more effective."

[21442051] |Separately, Standard & Poor's Corp. lowered its ratings on Valley National Corp.'s senior debt to double-B from double-B-plus, affecting about $300 million of long-term debt.
[21442052] |S&P also lowered ratings on unsecured deposits and issues backed by a letter of credit from the bank holding company's principal unit, Valley National Bank of Arizona.
[21442053] |The ratings service said the downgrades reflect the continued slide in the company's financial condition.

[21442054] |A spokesman for Phoenix, Ariz.-based Valley National, said the concern will be able to withstand the current downturn in Arizona real estate.
[21442055] |Commercial paper holders have reinvested their funds, he said, and consumer deposits have been up in the last few days.

[21443001] |Immunex Corp. said its scientists isolated a molecule which may hold potential as a treatment for disruptions of the immune-system, ranging from organ-transplant rejection, to allergies and asthma.

[21443002] |The molecule is the mouse version of a protein called the interleukin-4 receptor.
[21443003] |IL-4 is a hormone which directs the growth and function of white blood cells involved in the body's immune response.
[21443004] |The IL-4 receptor on the surface of such cells receives the hormone's message to rally the body's defense.

[21443005] |But in certain conditions such as autoimmune diseases and allergies and transplant rejection, doctors would like to damp the immune response so such cells don't touch off harmful inflammatory reactions or cell destruction.

[21443006] |A soluble form of the receptor might turn off a specific part of the immune response without general immune suppression, the company said.

[21443007] |The IL-4 receptor is one of five such receptors to be developed and tested by Receptech Corp., a spinoff of Immunex, through a proposed $30 million initial public offering.
[21443008] |Immunex will contract with the spinoff to provide the research, development and initial testing of the new agents.
[21443009] |Immunex will have the option to buy back Receptech shares after five years.

[21444001] |The following issues were recently filed with the Securities and Exchange Commission:

[21444002] |Heller Financial Inc., an indirect subsidiary of Fuji Bank Ltd., shelf offering of up to $1 billion debt securities and warrants.

[21444003] |Jason Overseas Ltd., proposed offering of five million common shares, via Smith Barney & Co. and Mabon Nugent & Co.

[21444004] |MCI Communications Corp., shelf offering of up to $750 million of debt securities via Merrill Lynch Capital Markets, Drexel Burnham Lambert Inc., Goldman, Sachs & Co., and Salomon Brothers Inc.

[21444005] |Millicom Inc., offering of $60 million subordinated exchangeable debentures, via Bear, Stearns & Co. Inc.

[21444006] |Union Tank Car Co., offering of $100 million of equipment trust certificates, via Salomon Brothers.

[21445001] |Conner Peripherals Inc., which has a near-monopoly on a key part used in many portable computers, is on target to surpass Compaq Computer Corp. as the fastest-growing start-up manufacturing firm in U.S. business history.

[21445002] |Conner dominates the market for hard-disk drives used to store data in laptop computers.
[21445003] |It said yesterday that net income for its third quarter soared 72% to $11.8 million, or 28 cents a share, from $6.8 million, or 19 cents a share, in the year-ago period.
[21445004] |Its revenue totaled $184.4 million, an increase of 172% from $67.8 million a year ago.

[21445005] |For the nine months, the San Jose, Calif.-based company said net income jumped 84% to $26.9 million, or 69 cents a share, from $14.6 million, or 43 cents a share.
[21445006] |Revenue nearly tripled to $479 million, from $160 million.

[21445007] |Analysts expect Conner's earnings to reach roughly $40 million, or $1 to $1.05 a share, on sales of $650 million, for 1989, the company's third full year in business.
[21445008] |That's a faster growth rate than reported by Compaq, which didn't post similar results until its fourth year, in 1986.
[21445009] |But Compaq had achieved that level of sales faster than any previous manufacturing start-up.

[21445010] |Conner's performance is closely tied to the burgeoning demand for battery-operated computers, the computer industry's fastest-growing segment.
[21445011] |Since its inception, Conner has both benefited from and helped make possible the rapid spread of portable computers by selling storage devices that consume five to 10 times less electricity than drives used in desktop machines.

[21445012] |Today, Conner controls an estimated 90% of the hard-disk drive market for laptop computers.
[21445013] |The company supplies drives to Compaq and Zenith Data Systems, the top two U.S. manufacturers of laptops, and to Toshiba Corp., NEC Corp. and Sharp Corp., the leading Japanese laptop makers.

[21445014] |"They've had this field to themselves for over a year now, and they've been greatly rewarded," said Bob Katsive, an analyst at Disk/Trend Inc., a market researcher in Los Altos, Calif.

[21445015] |In the coming months, however, this is likely to change.
[21445016] |Next month, Seagate Technology, which is the dominant supplier of hard-disk drives for personal computers, plans to introduce its first family of low-power drives for battery-operated computers.

[21445017] |And the Japanese are likely to keep close on Conner's heels.
[21445018] |"They are going to catch up," said David Claridge, an analyst with Hambrecht & Quist.
[21445019] |Both Toshiba and NEC already produce hard-disk drives, and Sony also is studying the field, Mr. Claridge said.

[21445020] |But Conner isn't standing still.
[21445021] |Yesterday, the company introduced four products, three of which are aimed at a hot new class of computers called notebooks.
[21445022] |Each of the three drives uses a mere 1.5 watts of power and one weighs just 5.5 ounces.

[21445023] |"Most of our competitors are announcing products based on our (older) products," said Finis Conner, chief executive officer and founder of the firm that bears his name.
[21445024] |"We continue to develop products faster than anyone else can."
[21445025] |These new products could account for as much as 35% of the company's business in 1990, Mr. Conner estimated.
[21445026] |"We're not afraid of obsoleting some of our old stuff to stay ahead of the competition," he said.

[21445027] |Conner already is shipping its new drives.
[21445028] |Last week, for instance, Compaq introduced its first notebook computer to rave reviews.
[21445029] |Conner is supplying hard-disk drives for the machine, which weighs only six pounds and fits in a briefcase.

[21445030] |From its inception, Conner has targeted the market for battery-operated machines, building hard-disk drives that are smaller and use far less power than those offered by competitors such as Seagate.
[21445031] |The availability of these drives, in turn, boosted demand for laptop computers, whose usefulness had been limited because of lack of storage.

[21445032] |Conner also makes hard-disk drives for desktop computers and is a major supplier to Compaq, which as of July owned 40% of Conner's stock.
[21445033] |Sales to Compaq represented 26% of Conner's business in its third quarter, compared with 42% in the year-ago period.

[21446001] |Move over, pornographic phone services: A legal service with a "900" number has been launched in California.

[21446002] |A Newport Beach law firm started the pay-as-you-go legal service, called Telelawyer, using MCI Communication Corp.'s toll-tele-phone service.
[21446003] |Cane & Associates touts its $2-a-minute service as the "cheapest legal hour you'll ever find."

[21446004] |Though the service is available only in California, Telelawyer founder Michael Cane says he plans to franchise it in other states.
[21446005] |He says his aim is to reach people who are bedridden, have no access to transportation, can't find a lawyer to take their case or simply can't afford lawyers' consultation fees.

[21446006] |Mr. Cane stresses that he isn't using the telephone to lure clients to his doorstep.
[21446007] |"We will only deal with clients on the phone," he says.
[21446008] |"We have no in-office business."

[21446009] |Telelawyer is apparently the only telephone service that offers the telephone equivalent of an office visit.
[21446010] |Local bar associations in some states have numbers that provide free tape-recorded messages explaining certain areas of the law.
[21446011] |There also are "800" hotlines which refer people to lawyers, usually personal-injury specialists, for in-office consultation.

[21446012] |When a caller reaches Telelawyer by dialing 900-TELELAW, a receptionist refers the call to one of six attorneys.
[21446013] |In an effort to determine whether a caller has reason to sue, Cane lawyers review documents and perform research, if necessary, with the help of three law clerks and several support staffers.
[21446014] |There is no charge for research -- only for time on the phone.
[21446015] |If the matter requires further legal work or litigation, Mr. Cane says, his lawyers may refer the client to a law firm.
[21446016] |But he says Cane & Associates doesn't receive referral fees.

[21446017] |So far, says Mr. Cane, most calls have involved landlord-tenant problems, tax problems, divorce, and probate questions.
[21446018] |The firm is getting about 50 calls a day, and the average call lasts about 15 minutes.
[21446019] |Out of the $2 charge, the law firm pockets about $1.55.

[21446020] |JURY CONVICTS congressman in connection with Wedtech Corp. scandal.

[21446021] |A federal court jury in New York found U.S. Rep. Robert Garcia (D., N.Y.) and his wife, Jane Lee Garcia, guilty of extorting $76,000 from Wedtech in return for official acts by the congressman.
[21446022] |The jury also convicted them of extortion in obtaining a $20,000, interest-free loan from a Wedtech officer.
[21446023] |The jury found them guilty of conspiracy in obtaining the payments, some of which were disguised as fees for consulting services from Mrs. Garcia.

[21446024] |Wedtech, which became embroiled in political-corruption cases that eventually led to its demise, formerly was a minority-owned South Bronx, N.Y., defense contractor.
[21446025] |Edward J.M. Little, one of the assistant U.S. attorneys who prosecuted the case, said the Garcia trial "is the last of the Wedtech prosecutions."
[21446026] |Mr. Little said more than 20 people have been convicted in the Wedtech cases, including former U.S. Rep. Mario Biaggi (D., N.Y.).

[21446027] |Lawyers for the Garcias said they plan to appeal.
[21446028] |Mr. Garcia, who represents New York's 18th congressional district, which includes the Bronx, said he hasn't decided whether he will resign.

[21446029] |"In the next few weeks, I will be consulting with my political advisers and with the Democratic leaders about the best way of preserving the interests of my constituents," said Mr. Garcia, 56 years old.
[21446030] |Mrs. Garcia, 49, formerly was a member of Mr. Garcia's congressional staff.

[21446031] |The Garcias were cleared of four other felony counts, involving the receipt of bribes and gratuities.

[21446032] |U.S. Judge Leonard B. Sand set the Garcias' sentencing for Jan. 5.

[21446033] |FIVE SHEA & GOULD PARTNERS are leaving to form a new firm.

[21446034] |The new firm, Hutton Ingram Yuzek Gainen Carroll & Bertolotti, will be based in New York.
[21446035] |The five partners who resigned from Shea & Gould late last week are Tom Hutton, Sam Ingram, Dean Yuzek, Daniel Carroll and Ernest Bertolotti.
[21446036] |They will be joined by Larry Gainen, who resigned from the firm of LePatner, Gainen & Block.

[21446037] |Howard Rubenstein, a New York publicist who represents Shea & Gould, said, "Shea & Gould understands they're leaving because they wanted a different environment -- a smaller firm they would be principals of."
[21446038] |Mr. Rubenstein said the five, who weren't on Shea & Gould's management committee, "are leaving on good terms."

[21446039] |He said Shea & Gould held a number of discussions with the five partners during the past few weeks to get them to stay but that the five were firmly committed to running their own firm.

[21446040] |Hutton Ingram will have a general corporate, securities, real-estate and litigation practice, and a substantial practice serving the professional-design community.

[21446041] |DISCIPLINARY PROCEEDINGS against lawyers open to public in Illinois.

[21446042] |While investigations into lawyer misconduct will remain secret, the public will be notified once a formal complaint is filed against an attorney.
[21446043] |The actual disciplinary hearings will be public.

[21446044] |In addition, Illinois attorneys will lose the right to sue clients who file malicious complaints against them.
[21446045] |Non-lawyers will be added to the inquiry panels that look into allegations of misconduct.

[21446046] |Illinois joins 36 other states that allow public participation in attorney-disciplinary proceedings and 32 states that open disciplinary hearings to the public, according to the American Bar Association.

[21446047] |One vocal critic of the changes, Chicago lawyer Warren Lupel, says non-lawyers shouldn't be on the inquiry panels because they are unlikely to appreciate the nuances of attorney-client relationships.
[21446048] |In addition, he says, publishing the names of lawyers who are facing charges unnecessarily subjects them to public derogation.

[21446049] |Nevertheless, Mr. Lupel anticipates no legal action to reverse the Illinois Supreme Court's decision to institute the changes.

[21446050] |"There's no constitutional right involved in the rule change," he says.
[21446051] |"You don't have a right to practice.
[21446052] |You only have a privilege to practice."

[21446053] |DREXEL BURNHAM LAMBERT Inc. agreed to pay a $50,000 fine to Delaware, the 26th state to settle with Drexel in the wake of the firm's guilty plea to federal insider-trading charges.
[21446054] |Drexel doesn't have a Delaware office, but the New York firm has been negotiating settlements that would allow it to operate freely nationwide despite its record as an admitted felon.
[21446055] |The firm has said it expects to pay $11.5 million overall to settle with states.
[21446056] |Drexel pleaded guilty in September to six felony counts of securities and mail fraud; it also made a $650 million civil settlement with the Securities and Exchange Commission.

[21447001] |Philip Morris Cos., whose Benson & Hedges cigarette brand has been losing market share, has asked at least one other agency to try its hand at creative work for the big account, which has been at Wells Rich Greene Inc. since 1966.

[21447002] |Executives close to Philip Morris said that the tobacco and food giant has asked Backer Spielvogel Bates Worldwide Inc., a unit of Saatchi & Saatchi Co., and possibly others to work on creative ideas for the account.
[21447003] |Several executives said another potential contender is WPP Group's Ogilvy & Mather agency, which works on some other Philip Morris products.
[21447004] |Both Philip Morris and Backer Spielvogel declined to comment.
[21447005] |A spokeswoman for Ogilvy & Mather said the agency doesn't comment on "idle speculation."

[21447006] |Also mentioned as a contender was TBWA Advertising, but the company denied it was participating.

[21447007] |The loss of the cigarette account would be a severe blow to Wells Rich.
[21447008] |Benson & Hedges has been one of its most high-visibility campaigns, as well as one of its largest clients.
[21447009] |The account billed almost $60 million last year, according to Leading National Advertisers.
[21447010] |But Philip Morris has scaled back ad spending on the brand over the past year, industry executives said, and it now bills about $30 million to $40 million.

[21447011] |Industry executives said Philip Morris had asked the other agencies to create campaigns in a bid to stop the brand's slipping market share.
[21447012] |According to John Maxwell, an analyst at Wheat First Securities, Richmond, Va., Benson & Hedges has slipped from 4.7% of the cigarette market in 1985 to just 4.1% after the second quarter of this year.
[21447013] |The brand is No. 7 overall in the cigarette business, Mr. Maxwell said.
[21447014] |The slip has come despite high-profile ads created by Wells Rich, including one picturing a young man clad only in pajama bottoms interrupting a festive brunch.
[21447015] |That ad generated so much publicity that a trade magazine launched a contest for its readers to guess who the guy was and what he was doing.

[21447016] |Wells Rich first popularized the Benson & Hedges brand more than 20 years ago with ads portraying, among other things, an elevator door closing on a passenger's cigarette.
[21447017] |The brand early on achieved an upscale appeal -- a trait that some analysts believe is partly responsible for its staid performance.
[21447018] |Philip Morris, trying to revive the Benson & Hedges franchise, put the account up for review in 1986.
[21447019] |Wells Rich Greene, however, in an effort directed by Mary Wells Lawrence, emerged the victor of the review and retained the business.

[21447020] |Kenneth Olshan, Wells Rich's chairman, didn't return phone calls seeking comment.

[21447021] |While Wells Rich recently picked up Hertz Corp.'s $25 million to $30 million account, it has lost a number of big accounts this year, including the $20 million to $25 million Cadbury-Schweppes Canada Dry and Sunkist accounts, the $18 million Procter & Gamble Co. Sure deodorant account and the $10 million Polo/Ralph Lauren business.
[21447022] |Its victories include more than $30 million in Sheraton Corp. business and an assignment from Dun & Bradstreet worth $5 million to $10 million.

[21448001] |This city is girding for gridlock today as hundreds of thousands of commuters avoid travel routes ravaged by last week's earthquake.

[21448002] |Estimates of damage in the six-county San Francisco Bay area neared $5 billion, excluding the cost of repairing the region's transportation system.

[21448003] |The Bay Bridge, the main artery into San Francisco from the east, will be closed for at least several weeks.
[21448004] |Part of the bridge collapsed in the quake, which registered 6.9 on the Richter scale.
[21448005] |The bridge normally carries 250,000 commuters a day.
[21448006] |Also, most of the ramps connecting the city to its main link to the south, the 101 freeway, have been closed for repairs.

[21448007] |The Bay Area Rapid Transit system, which runs subway trains beneath the bay, is braced for a doubling of its daily regular ridership to 300,000.
[21448008] |BART has increased service to 24 hours a day in preparation for the onslaught.

[21448009] |Most unusual will be water-borne commuters from the East Bay towns of Oakland and Berkeley.
[21448010] |For the first time in 32 years, ferry service has been restored between the East Bay and San Francisco.
[21448011] |The Red and White Fleet, which operates regular commuter ferry service to and from Marin County, and tourist tours of the bay, is offering East Bay commuters a chance to ride the waves for the price of $10 round-trip.

[21448012] |That tariff is too stiff for some Financial District wage earners.
[21448013] |"I'll stay with BART," said one secretary, swallowing her fears about using the transbay tube.

[21448014] |Officials expect the Golden Gate Bridge to be swamped with an extra load of commuters, including East Bay residents making a long detour.
[21448015] |"We're anticipating quite a traffic crunch," said one official.
[21448016] |About 23,000 people typically travel over the Golden Gate Bridge during commute hours.
[21448017] |About 130,000 vehicles cross during a 24-hour period.

[21448018] |Meetings canceled by Apple Computer Inc.'s European sales force and by other groups raised the specter of empty hotel rooms and restaurants.
[21448019] |It also raised hackles of the city's tourism boosters.
[21448020] |"Other cities are calling {groups booked here for tours and conferences} and -- not to be crass -- stealing our booking list," said Scott Shafer, a spokesman for Mayor Art Agnos.

[21448021] |City officials stuck by their estimate of $2 billion in damage to the quake-shocked city.
[21448022] |The other five Bay area counties have increased their total damage estimates to $2.8 billion.
[21448023] |All estimates exclude highway repair, which could exceed $1 billion.

[21448024] |Among the expensive unknowns are stretches of elevated freeway in San Francisco that were closed because of quake-inflicted damage.

[21448025] |The most worrisome stretch is 1.2 miles of waterfront highway known as the Embarcadero Freeway.
[21448026] |Until it was closed Tuesday, it had provided the quickest series of exits for commuters from the Bay Bridge heading into the Financial District.
[21448027] |Engineers say it will take at least eight months to repair the Embarcadero structure.

[21448028] |As part of the quake recovery effort, the city Building Department has surveyed about 3,000 buildings, including all of the Financial District's high-rises.

[21448029] |The preliminary conclusion from a survey of 200 downtown high-rises is that "we were incredibly lucky," said Lawrence Kornfield, San Francisco's chief building inspector.
[21448030] |While many of these buildings sustained heavy damage, little of that involved major structural damage.
[21448031] |City building codes require construction that can resist temblors.

[21448032] |In England, Martin Leach, a spokesman for Lloyd's of London, said the insurance market hasn't yet been able to estimate the total potential claims from the disaster.
[21448033] |"The extent of the claims won't be known for some time," Mr. Leach said.

[21448034] |On Friday, during a visit to California to survey quake damage, President Bush promised to "meet the federal government's obligation" to assist relief efforts.

[21448035] |California officials plan to ask Congress for $3 billion or more of federal aid, in the form of grants and low-interest loans.
[21448036] |The state has a $1 billion reserve, and is expected to add $1 billion to that fund in the next year.
[21448037] |Some of that money will be available for highway repair and special emergency aid, but members of the legislature are also mulling over a temporary state gasoline tax to raise money for earthquake relief.
[21448038] |However, state initiatives restrict the ability of the legislature to raise such taxes unless the voters approve in a statewide referendum.

[21448039] |G. Christian Hill and Ken Wells contributed to this article.

[21449001] |Bond Corp. Holdings Ltd. posted a loss for fiscal 1989 of 980.2 million Australian dollars (US$762.4 million), the largest in Australian corporate history.

[21449002] |That loss compared with a year-earlier profit of A$273.5 million.
[21449003] |In preliminary, unaudited results reported Friday, Bond Corp. also posted an operating loss of A$814.1 million for the year ended June 30, compared with operating profit of A$354.7 million a year earlier.

[21449004] |Operating revenue rose 69% to A$8.48 billion from A$5.01 billion.
[21449005] |But the net interest bill jumped 85% to A$686.7 million from A$371.1 million.
[21449006] |Bond Corp. has interests in brewing, media and communications, natural resources and property.

[21449007] |Much of Bond Corp.'s losses stemmed from one-time write-downs of the value of some of Bond Corp.'s assets and those of its units.
[21449008] |The results included a A$453.4 million write-off of future income-tax benefits and a provision for a loss of A$149.5 million on the sale of a stake of about 20% in Lonrho PLC.
[21449009] |However, Bond Corp. said the tax benefits remain available and might be used later.

[21449010] |Earnings before interest and tax from brewing dived 50% to A$123.8 million from A$247.3 million.
[21449011] |The company said the general financial performance of its U.S. brewing operations, G. Heileman Brewing Co., was "disappointing, and this has been reflected in the results."

[21449012] |Bond Corp.'s shares closed Friday before news of the results at 28 Australian cents a share, up one Australian cent.

[21449013] |The staggering losses cap a tumultuous year for Alan Bond and his flagship, Bond Corp.
[21449014] |Only a year ago, the chairman of Bond Corp., who controls about 58% of the company, appeared to be building a war chest to attack some big companies.
[21449015] |Now Bond Corp. has agreed to sell at least half its Australian brewing assets.
[21449016] |It has sold billions of dollars of other assets and has more on the block.

[21449017] |But in a TV interview Sunday Mr. Bond said, "We've taken a big loss.
[21449018] |We've taken it on the chin.
[21449019] |But we're out there and we're going to stay in business.

[21449020] |Bond Corp. signaled it will focus on building its domestic and international media and communications businesses.
[21449021] |It said it will look at opportunities in brewing, property and energy resources to the extent consistent with the dominant objective of manageable debt-to-assets ratios.
[21449022] |The result "will ultimately be a very different group in size and structure," Bond Corp. directors said in a statement.

[21449023] |Some analysts contend the total writeoffs should have been much greater, and Bond Corp.'s auditors cited a list of several assets and deals about which there is "uncertainty" regarding the current value and potential impact on the firm.

[21449024] |Bond Corp. said the acknowledged losses mean net asset backing is in the red to the tune of 53 Australian cents a share, vs. positive asset backing of A$1.92 a share a year ago.
[21449025] |Still, the directors said, "Having fully considered all aspects of the company's state of affairs and future cash flows, the directors confirm absolutely that the company is solvent."

[21449026] |Indeed, in a note to the results, directors said if the "true worth" of some of the group's assets were taken into account instead of using book values, the negative net asset backing a share would turn into "a substantial positive" one.

[21450001] |The Bakersfield Supermarket went out of business last May.
[21450002] |The reason was not high interest rates or labor costs.
[21450003] |Nor was there a shortage of customers in the area, the residential Inwood section of northern Manhattan.
[21450004] |The business closed when the owner was murdered by robbers.

[21450005] |The owner was Israel Ortiz, a 29-year-old entrepreneur and father of two.
[21450006] |In his first year of operating the store he bought for $220,000, Mr. Ortiz was robbed at least twice at gunpoint.
[21450007] |The first time he was shot in the hand as he chased the robbers outside.
[21450008] |The second time he identified two robbers, who were arrested and charged.
[21450009] |Two weeks later -- perhaps in retaliation -- Mr. Ortiz was shot three times in the back, during what police classified as a third robbery attempt.

[21450010] |That was his reward for working until 11 p.m. seven days a week to cover his $3,000 a month rent.
[21450011] |For providing what his customers described as very personal and helpful service.
[21450012] |For creating a focus for neighborhood life.

[21450013] |Israel Ortiz is only one of the thousands of entrepreneurs and their employees who will be injured or killed by crime this year.
[21450014] |The U.S. Bureau of Justice Statistics reports that almost 2% of all retail-sales workers suffer injuries from crime each year, almost twice the national average and about four times the rate for teachers, truck drivers, medical workers and door-to-door salespeople.
[21450015] |Only a few other occupations have higher reported rates of criminal injury, such as police, bartenders and taxi drivers.

[21450016] |Yet these figures show only the most visible part of the problem.
[21450017] |Recent data from New York City provide more of the picture.
[21450018] |While by no means the highest crime community in the country, New York is a prime example of a city where crime strangles small-business development.
[21450019] |A survey of small businesses there was conducted this spring by Interface, a policy research organization.
[21450020] |It gave 1,124 businesses a questionnaire and analyzed 353 responses.
[21450021] |The survey found that over a three-year period 22% of the firms said employees or owners had been robbed on their way to or from work or while on the job.
[21450022] |Seventeen percent reported their customers being robbed.
[21450023] |Crime was the reason that 26% reported difficulty recruiting personnel and that 19% said they were considering moving.

[21450024] |More than one-third of the responding businesses said they suffer from drug dealing and loitering near their premises.
[21450025] |In Brooklyn and the Bronx, one out of four commercial firms is burglarized each year.
[21450026] |Industrial neighborhoods fare even worse, with burglary rates twice the citywide average.

[21450027] |Crime is clearly more deadly to small-scale entrepreneurship than to big businesses.
[21450028] |Two decades ago, the Small Business Administration reported Yale Prof. Albert Reiss's landmark study of crime against 2,500 small businesses drawn from national IRS records.
[21450029] |He found that monetary crime losses, as a proportion of gross receipts, were 37 times higher for small businesses than for large ones.

[21450030] |The New York study's companies averaged 27 employees; their annual crime losses averaged about $15,000, with an additional $8,385 annual cost in security -- enough money to hire at least one more worker.
[21450031] |The costs of crime may also be enough to destroy a struggling business.

[21450032] |Whatever the monetary crime losses, they may not be nearly as important to entrepreneurs as the risk of personal injury.
[21450033] |After repeated gun robberies, some entrepreneurs may give up a business out of fear for their lives.
[21450034] |One Washington couple recently sold their liquor store after 34 years in business that included four robbery deaths and 16 robberies or burglaries on the premises.

[21450035] |These findings illustrate the vicious cycle that National Institute of Justice Director James K. Stewart calls "crime causing poverty."
[21450036] |Underclass neighborhoods offer relatively few employment opportunities, contributing to the poverty of local residents.
[21450037] |Small neighborhood businesses could provide more jobs, if crime were not so harmful to creating and maintaining those businesses.
[21450038] |This may help explain why small businesses create 65% of all jobs nationally, but only 22% of jobs in a crime-ridden city like New York.

[21450039] |Bigger business can often better afford to minimize the cost of crime.
[21450040] |The New York study found that the cost of security measures in firms with fewer than five employees was almost $1,000 per worker, compared with one-third that amount for firms with more than 10 employees.

[21450041] |The shift of retailing to large shopping centers has created even greater economies of scale for providing low-crime business environments.
[21450042] |Private security guards and moonlighting police can invoke the law of trespass to regulate access to these quasi-public places.
[21450043] |Since 1984, in fact, revenues of the 10 largest guard companies, primarily serving such big businesses, have increased by almost 62%.

[21450044] |Few small neighborhood businesses, however, can afford such protection, even in collaboration with other local merchants.
[21450045] |In the neighborhoods with the highest crime rates, small business generally relies on the public police force for protection.
[21450046] |This creates several problems.
[21450047] |One is that there are not enough police to satisfy small businesses.
[21450048] |The number one proposal for reducing crime in the New York survey was to put more police on foot or scooter patrol, suggested by more than two-thirds of the respondents.
[21450049] |Only 22% supported private security patrols funded by the merchants themselves.

[21450050] |A second problem is the persistent frustration of false alarms, which can make urban police less than enthusiastic about responding to calls from small businesses.
[21450051] |Only half the New York small businesses surveyed, for their part, are satisfied with the police response they receive.

[21450052] |Some cities, including New York, have experimented with special tax districts for commercial areas that provide additional patrols funded by local businesses.
[21450053] |But this raises added cost barriers to urban entrepreneurship.

[21450054] |Another solution cities might consider is giving special priority to police patrols of small-business areas.
[21450055] |For cities losing business to suburban shopping centers, it may be a wise business investment to help keep those jobs and sales taxes within city limits.
[21450056] |Increased patrolling of business zones makes sense because urban crime is heavily concentrated in such "hot spots" of pedestrian density.
[21450057] |With National Institute of Justice support, the Minneapolis police and the Crime Control Institute are currently testing the effects of such a strategy, comparing its deterrence value with traditional random patrols.

[21450058] |Small-business patrols would be an especially helpful gesture whenever a small-business person is scheduled to testify against a robbery suspect.
[21450059] |While no guarantee, an increased police presence might even deter further attacks.

[21450060] |It might even have saved the life, and business, of Israel Ortiz.

[21450061] |Mr. Sherman is a professor of criminology at the University of Maryland and president of the Crime Control Institute in Washington, D.C.

[21451001] |ENFIELD Corp. said in Toronto that it hopes to raise 56 million Canadian dollars (US$47.7 million) through a rights offering to shareholders.
[21451002] |Under the offer, shareholders can purchase one Enfield share at C$6.27 for each five shares held.
[21451003] |In Toronto Stock Exchange trading Friday, Enfield closed at C$6.75, down 37.5 cents.
[21451004] |The holding company said the rights offering should reduce its C$171 million debt to "more manageable levels" before Dec. 31 and allow it to finance future investments with equity capital.
[21451005] |At last report, Enfield had about 44.5 million shares outstanding.

[21452001] |Former U.N. Ambassador Jeane Kirkpatrick, in a CNN "Capital Gang" discussion Oct. 7 of House action on federal catastrophic-illness insurance:

[21452002] |I think this repeal was kind of a thoughtless action, as a matter of fact. . . .
[21452003] |They will have to revisit this issue, and they'll have to revisit it before long.

[21453001] |Diversification pays.

[21453002] |That's a fundamental lesson for investors, but its truth was demonstrated once again in the performance of mutual funds during and after the stock market's Friday-the-13th plunge.

[21453003] |Stock funds, like the market as a whole, generally dropped more than 2% in the week through last Thursday, according to figures compiled by Lipper Analytical Services Inc.
[21453004] |That reflects the huge drop a week ago Friday, last Monday's rebound and the dips and blips that followed.

[21453005] |But several other types of funds shielded investors from the worst of the market's slide.
[21453006] |Funds that invest internationally were the top-performing stock and fixed-income funds.

[21453007] |"More than ever, people should realize they should have a diversified portfolio," said Jeremy Duffield, a senior vice president of Vanguard Group.
[21453008] |"That means stocks, bonds, money market instruments and real estate."

[21453009] |One week's performance shouldn't be the basis for any investment decision.
[21453010] |But the latest mutual fund performance figures do show what can happen when the going gets rough.

[21453011] |"You want to know how a fund did when the market got hammered," said Kurt Brouwer, an investment adviser with Brouwer & Janachowski in San Francisco.
[21453012] |"It's like kicking the tires of a car . . . .
[21453013] |What you want to know is when the road's rough, when there's snow and ice, how's this car going to perform?"

[21453014] |General equity funds fell an average of 2.35% in the week ended Thursday, compared with a 2.32% slide for the Standard & Poor's 500-stock index.
[21453015] |But Lipper Analytical's figures show that there were a number of ways investors could have cushioned themselves from the stock market's gyrations.

[21453016] |Gold-oriented funds, for instance, which invest in companies that mine and process the precious metal, posted an average decline of 1.15%.
[21453017] |Flexible portfolio funds, which allocate investments among stocks, bonds and money-market instruments and other investments, declined at about half the rate of stock funds -- an average drop of 1.27%, according to Lipper.

[21453018] |Global allocation funds take the asset-allocation concept one step further by investing at least 25% of their portfolios outside the U.S.
[21453019] |This gives them the added benefits of international diversification -- including a foreign-exchange boost during periods, like the past week, when the dollar declines against other major currencies.
[21453020] |With all that going for them, global flexible portfolio funds declined only 1.07% in the week through last Thursday.

[21453021] |But while the merits of diversification shine through when times are tough, there's also a price to pay: A diversified portfolio always underperforms an undiversified portfolio during those times when the investment in the undiversified portfolio is truly hot.

[21453022] |And Friday the 13th notwithstanding, stocks have been this year's hot investment.
[21453023] |Thus, even including the latest week, the average general stock fund has soared more than 24% so far this year, the Lipper Analytical figures show.

[21453024] |By comparison, global asset allocation funds have turned in an average total return of about 19%, while domestic flexible portfolios are up about 17%.
[21453025] |Fixed-income funds have returned 8.2%, while gold funds, which tend to be volatile, have risen just 4.55%, on average.

[21453026] |"That's the problem with trying to hedge too much," said Mr. Brouwer.
[21453027] |"You don't make any real money."
[21453028] |Over the last 20 years, for example, Mr. Brouwer says, an investor putting $5,000 a year in the S&P 500 would have made nearly twice as much than if it were invested in Treasury bills.

[21453029] |Some equity funds did better than others in the week that began on Friday the 13th.
[21453030] |The $4 million Monetta Fund, for instance, was the seventh top performing fund for the week, with a 2.65% return.
[21453031] |Its return so far this year has been a credible 21.71%.

[21453032] |The fund's strategy is to sell when a stock appreciates 30% over its cost.
[21453033] |By the time the market plummeted 10 days ago, Monetta was 55% in cash, said Robert Bacarella, president and portfolio manager.
[21453034] |Last Monday, he started "buying the high-quality growth companies that people were throwing away at discount prices."
[21453035] |Among Mr. Bacarella's picks: Oracle Systems, Reebok International Ltd. and Digital Microwave Corp.
[21453036] |The fund's cash position is now about 22%, which Mr. Bacarella calls "still bearish."

[21453037] |Among the big stock funds, Dreyfus Fund, with more than $2 billion in assets, had a decline of just 1.49% for the week and a return of 21.42% for the year.
[21453038] |Howard Stein, chairman of Dreyfus Corp., said the fund was about half invested in government bonds on Oct. 13, and about 10% in cash.
[21453039] |"In a downward market, bonds act better," he said.
[21453040] |"We still think there's a lot of unsettlement in this market.
[21453041] |We believe interest rates will continue to trend lower, and the economy will slow around the world."

[21453042] |Many of the funds that did best in the last week are heavily invested overseas, giving them the benefit of foreign currency translations when the dollar is weak.
[21453043] |From its high point on Thursday, Oct. 12, to where it traded late in New York a week later, the dollar fell 3.6% against the West German mark, 3.4% against the British pound and 2.1% against the Japanese yen.

[21453044] |Three International Cash Portfolios funds, which invest almost exclusively in bonds and money-market instruments overseas, were among the four top-performing funds in the latest week.
[21453045] |Because the funds' investments are denominated in foreign currencies, their value expressed in dollars goes up when those currencies rise against the dollar.
[21453046] |But when the dollar rises against major foreign currencies, as it did for much of this year, the dollar value of these funds declines.
[21453047] |All three funds posted negative returns for the year to date.

[21453048] |Of the funds that fared the worst in the post-Oct. 13 week, two are heavily invested in airlines stocks, which led the market slide following problems with financing for the UAL Corp. buy-out plan.
[21453049] |Reflecting airline takeover activity, however, both the Fidelity Select Air Transportation Portfolio and the National Aviation & Technology fund posted better-than-average returns for the the year to date: 30.09% for the Fidelity Air Transportation fund and a whopping 47.24% for National Aviation & Technology.

[21453050] |The small drop in equity funds in general in the latest week may not necessarily be a good sign, said A. Michael Lipper, president of Lipper Analytical.
[21453051] |Noting that equity funds are up nearly 60% from their post-crash low on Dec. 3, 1987, he said that what happened last week "may not be enough of an adjustment.
[21453052] |There's either more to come or an extremely long period of dullness."

[21453053] |But investors don't seem to think so.
[21453054] |Several big mutual fund groups said last week that cash flows into stock funds were heavier than usual after heavy outflows on the 13th.
[21453055] |Vanguard Group said it had a more than $50 million net inflow into its stock funds last week.

[21453056] |"There certainly hasn't been a panic reaction," said Steven Norwitz, a vice president at T. Rowe Price Associates.
[21453057] |"People showed some staying power and, in fact, interest in buying equities."

[21453058] |Source: Lipper Analytical Services Inc.

[21453059] |*Not counting dividends

[21453060] |**With dividends reinvested

[21453061] |Sources: Lipper Analytical Services Inc.; Standard & Poor's Corp.

[21454001] |Guardian Royal Exchange Assurance PLC, a major British composite insurer, said it is taking a stake in Nationwide Anglia Building Society's estate agency business as part of a plan to create a range of commercial linkages in the U.K. and Europe.

[21454002] |Officials declined to disclose the value of the transaction or the exact stake that GRE will hold in Nationwide Anglia Estate Agents.
[21454003] |But the companies said that Nationwide Anglia Estate Agents will market GRE life insurance, pension and investment products through its more than 1,000 retail outlets in the U.K.

[21454004] |Besides the marketing agreement, GRE said Nationwide Anglia has agreed to develop life insurance products with the composite insurer.

[21455001] |Sitting at the bar of the Four Seasons restaurant, architect William McDonough seems oblivious to the glamorous clientele and the elegant setting.
[21455002] |He is ogling the curtains rippling above the ventilation ducts.
[21455003] |"Look how much air is moving around!" he says.
[21455004] |"The ventilation here is great!"

[21455005] |You may be hearing more about the 38-year-old Mr. McDonough and his preoccupation with clean air.
[21455006] |After years of relative obscurity, he is starting to attract notice for the ecological as well as the aesthetic quality of his architecture.

[21455007] |Mr. McDonough believes that the well-being of the planet depends on such stratagems as opening windows to cut indoor air pollution, tacking down carpets instead of using toxic glues, and avoiding mahogany, which comes from endangered rain forests.

[21455008] |He has put some of his aesthetic ideas into practice with his design of the four-star Quilted Giraffe restaurant -- "architecturally impeccable," Progressive Architecture magazine called it -- and his remodeling of Paul Stuart, the Madison Avenue clothing store.
[21455009] |He has designed furniture and homes as well as commercial and office space.
[21455010] |He is now designing a Broadway stage set for a show by the band Kid Creole and the Coconuts.

[21455011] |What really stirs his muse, though, is aerobic architecture.
[21455012] |Now the question is: Is Poland ready for it?
[21455013] |Mr. McDonough is about to tackle his biggest clean-air challenge yet, the proposed Warsaw Trade Center in Poland, the first such center in Eastern Europe.

[21455014] |The project has already acquired a certain New York cachet.
[21455015] |Bloomingdale's plans to sell a foot-tall chocolate model of the center during the holidays.
[21455016] |Some of the sales proceeds will go to the Design Industries Foundation for AIDS.
[21455017] |A cake topped with a replica of the center will be auctioned at an AIDS benefit at Sotheby's in December.

[21455018] |If Mr. McDonough's plans get executed, as much of the Polish center as possible will be made from aluminum, steel and glass recycled from Warsaw's abundant rubble.
[21455019] |A 20-story mesh spire will stand atop 50 stories of commercial space.
[21455020] |Solar-powered batteries will make the spire glow.
[21455021] |The windows will open.
[21455022] |The carpets won't be glued down, and walls will be coated with nontoxic finishes.

[21455023] |To the extent that the $150 million budget will allow it, Mr. McDonough will rely on solid wood, rather than plywood or particle board, to limit the emission of formaldehyde.

[21455024] |If Mr. McDonough has his way, the Poles will compensate for the trade center's emissions of carbon dioxide, a prime suspect in the global atmospheric warming many scientists fear.
[21455025] |The Poles would plant a 10-square-mile forest somewhere in the country at a cost of $150,000, with the center's developer footing the bill.

[21455026] |The news hasn't exactly moved others in Mr. McDonough's profession to become architectural Johnny Appleseeds.
[21455027] |All architects want to be aware of the ecological consequences of their work, says John Burgee, whose New York firm is designing the redevelopment of Times Square, "but we can't all carry it to that extreme."
[21455028] |Karen Nichols, senior associate at Michael Graves's architecture firm in Princeton, N.J., says: "We're really at the mercy of what the construction industry can and will do readily."

[21455029] |Mr. McDonough responds: "I'm asking people to broaden their agendas."

[21455030] |The son of a Seagram's executive who was stationed in many countries around the world, Mr. McDonough was born in Tokyo and attended 19 schools in places ranging from Hong Kong to Shaker Heights, Ohio, before entering Dartmouth College.
[21455031] |He earned a master's degree in architecture from Yale.

[21455032] |His interest in the natural environment dates from his youth.
[21455033] |He and his father still spend time each summer fly-fishing for salmon in Iceland.
[21455034] |Living in Hong Kong, he says, made him sensitive to the limits on food, power and water supplies.
[21455035] |At his first school in the U.S. he was thought a little strange for shutting off open water taps and admonishing his schoolmates to take only brief showers.

[21455036] |He and a Dartmouth roommate established a company that restored three hydroelectric power plants in Vermont.
[21455037] |At Yale, he designed one of the first solarheated houses to be built in Ireland.

[21455038] |Mr. McDonough's first professional project fully to reflect his environmental ardor was his 1986 design for the headquarters of the Environmental Defense Fund in New York.
[21455039] |The offices took 10,000 square feet of a building with 14-foot ceilings and big, operable windows.

[21455040] |Since the 1970s energy crisis, some efforts to conserve energy by sealing buildings have had an unintended side effect: high indoor pollution.
[21455041] |To reduce it at the fund's building, workers rubbed beeswax instead of polyurethane on the floors in the executive director's office.
[21455042] |Jute, rather than a synthetic material, lies under the tacked-down carpets, and the desks are of wood and granite instead of plastic.

[21455043] |The budget was only $400,000.
[21455044] |"Athens with Spartan means," Mr. McDonough says.
[21455045] |The fund's lawyers work in an Athenian grove of potted trees.
[21455046] |Economists and administrators sit along a "boulevard" with street lamps and ficus trees.
[21455047] |In offices, triphosphorous bulbs simulate daylight.
[21455048] |Offices with outside windows have inside windows, too, to let in more real daylight.

[21455049] |"We proved a healthy office doesn't cost more," says Frederic Krupp, executive director of the fund.

[21455050] |It "really looks beautiful and is very light," says Ann Hornaday, a free-lance writer who has visited the office for lunch meetings.
[21455051] |But, she says, "I guess I didn't really notice the trees.
[21455052] |Maybe they were hidden by all the people."

[21455053] |Neither the Quilted Giraffe nor the Paul Stuart renovation reflects much of Mr. McDonough's environmental concern.
[21455054] |The restaurant was conceived as a sparkling, crystalline "geode."
[21455055] |It makes extensive use of stainless steel, silver and aluminum that sets off black granite table tops and a gray terrazzo with zinc-strip floors.
[21455056] |To more than replace the wood from two English oaks used for paneling at Paul Stuart, however, Mr. McDonough and friends planted 1,000 acorns around the country.

[21455057] |The ambitious Warsaw project still awaits approval by city officials.
[21455058] |Its developer is a Polish American, Sasha Muniak.
[21455059] |He had worked with Mr. McDonough on an earlier project and recruited him as architect for the trade center.
[21455060] |The center will provide space for computer hardware and facsimile and other telecommunications equipment, not readily accessible in Poland now, for a growing number of Westerners doing business in Eastern Europe.

[21455061] |Mr. McDonough thinks of the center as the "Eiffel Tower of Warsaw" and "a symbol of the resurgence of Poland."
[21455062] |If any nation can use environmentally benign architecture, it is Poland.
[21455063] |Jessica Mathews, vice president of World Resources Institute in Washington, D.C., says that perhaps a quarter of Poland's soil is too contaminated for safe farming because of air pollution.
[21455064] |The pollution is also killing forests and destroying buildings that date back to the Middle Ages.

[21455065] |The future of the forest remains uncertain.
[21455066] |Mr. Muniak's company, Balag Ltd., has agreed to set aside the money to plant and maintain it, but discussions are still going on over where to place it and how to ensure that it will be maintained.
[21455067] |After all, Mr. Muniak says, "in Poland there aren't too many people worried about the environment.
[21455068] |They're more worried about bread on the table.

[21456001] |Pittston Co.'s third-quarter net income plunged 79%, reflecting the impact of a prolonged and bitter labor strike at its coal operations.

[21456002] |Net sank to $3.1 million, or eight cents a share, including $789,000, or two cents a share, reflecting a tax-loss carry-forward.
[21456003] |In the year-ago quarter, net totaled $14.7 million, or 38 cents a share, including $4 million, or 10 cents a share, reflecting a tax-loss carry-forward.
[21456004] |Revenue slipped 0.7% to $395.3 million from $398.3 million.

[21456005] |Pittston also owns Brink's Inc., the security service, and Burlington Air Express, the air-freight concern.

[21456006] |In addition to expected losses tied to the labor strike, the coal group has spent almost $20 million since the strike began for security, the company said.
[21456007] |As a result, the group's third-quarter loss widened to $9.8 million from the second quarter's $3.6 million.
[21456008] |Pittston continues to hire replacement workers, the company said.

[21456009] |Burlington's operating profit grew to $9.2 million from $3.8 million a year earlier, Pittston said.
[21456010] |While "the tone" of domestic and international air-freight markets remains sound, seasonal factors are likely to hinder Burlington Air from matching third-quarter results in the fourth quarter, Pittston said.

[21456011] |Brink's operating profit was about flat with the year-earlier period, reflecting continued pricing and cost pressures.

[21456012] |In New York Stock Exchange composite trading Friday, Pittston closed at $18.50 a share, down 12.5 cents.

[21457001] |Doesn't anybody here want to win this mayor's race?

[21457002] |As they stumble and bumble toward election day two weeks from tomorrow, both Democrat David Dinkins and Republican Rudolph Giuliani are in trouble.

[21457003] |Mr. Dinkins, the Manhattan borough president, can afford more bumbling and stumbling because he holds a comfortable 20-point lead in most of the public-opinion polls.
[21457004] |But, in the past 10 days, he has taken a series of body blows to his pride and his reputation that could adversely affect his ability to govern this tumultuous city should he become New York's first black mayor.

[21457005] |Ordinarily, a clever opponent would find a way to capitalize on the other side's misfortunes.
[21457006] |But Mr. Giuliani, a celebrated prosecutor, has had difficulty switching from his crime-busting, finger-pointing mode to a political stance that suggests he might know something about running this big, troubled city.
[21457007] |And now, at the crucial moment, he's running out of money.

[21457008] |This is the nation's biggest city and, traditionally, its mayor is the nation's best-known urban politician.
[21457009] |Democrats hoped that Mr. Dinkins could become a highly visible national leader.
[21457010] |Republicans figured that in Mr. Giuliani, the nation's best-known prosecutor, they had a chance for a huge upset in the heart of Democratic territory and that they would pick up a new political star.

[21457011] |But it hasn't worked out that way.

[21457012] |"Dinkins is a decent but sloppy guy," says David Garth, veteran campaign consultant here who has always worked for Mayor Edward Koch, defeated by Mr. Dinkins in the Sept. 12 Democratic primary.
[21457013] |"The alternative -- Giuliani -- is ghastly."

[21457014] |"I guess we'll reluctantly go ahead and do it, vote for Dinkins," says Richard Wade, a politically active professor who supported Richard Ravitch, an also-ran in the Democratic primary.
[21457015] |"There's nothing on the other side."

[21457016] |"We're picking up steam," insists Roger Ailes, Mr. Giuliani's media consultant, whose last big campaign helped put George Bush in the White House.
[21457017] |He adds: "It just hasn't gotten down to the engine room yet."
[21457018] |But the steam may never reach the engine room.
[21457019] |For, just as Mr. Giuliani latches on to an issue that has Mr. Dinkins reeling, his campaign desperately needs cash to keep Mr. Ailes's commercials on the air beyond Wednesday or Thursday.
[21457020] |To help out this week, the White House is dispatching chief of staff John Sununu and three Cabinet members -- HUD's Jack Kemp, Transportation's Samuel Skinner and Treasury's Nicholas Brady, according to Peter Powers, the Giuliani campaign manager.

[21457021] |For Republicans who began this campaign with such high hopes, all of this is deeply frustrating.
[21457022] |Historically, New York is almost always in trouble.
[21457023] |But the trouble it faces now under Democratic rule seems bigger and more daunting than anything it has faced in the past.
[21457024] |This year, the city faces a budget deficit that could become even bigger next year.
[21457025] |And hardly surprising, many residents trying to cope with the city's other problems are constantly on edge, one ethnic group scrapping with another.

[21457026] |"People weren't so happy in the 1930s," says Thomas Lessner, another local professor and the biographer of the legendary Fiorello LaGuardia, the city's fusion mayor who built a coalition Mr. Giuliani hopes to emulate.
[21457027] |"But, at least, back then they didn't generally direct their anger at each other."

[21457028] |The 62-year-old Mr. Dinkins, an ex-Marine, has served as the city clerk and as Manhattan borough president, a job with limited executive responsibilities
[21457029] |("I defy you to come up with one major accomplishment of David Dinkins," says Mr. Giuliani.)

[21457030] |He defeated the contentious Mr. Koch in the Democratic primary partly because he seemed to offer hope he could heal the city's racial and ethnic wounds.
[21457031] |His general-election campaign is almost Reagan-like, all muted pictures and comforting words.
[21457032] |His theme is unity, decency, humanity, bringing New York together again.

[21457033] |Both candidates are negotiating about holding debates, but Mr. Dinkins is widely seen as the major obstacle for scheduling them.

[21457034] |The 45-year-old Mr. Giuliani has run a negative campaign to pick up votes leaning to Mr. Dinkins.
[21457035] |"He's got to get Dinkins's negatives up," says Lee Miringoff, director of the Marist College Institute of Public Opinion.
[21457036] |"But our polls show voters don't like the attack stuff.
[21457037] |Why, even 20% of the Republican vote is going to Dinkins."

[21457038] |"It's assault-weapons politics," says John Siegal, Mr. Dinkins's issues director, insisting there is a strong racist undertone to the Giuliani effort.

[21457039] |For the Giuliani forces, it's a conundrum.
[21457040] |On the one hand, Mr. Giuliani wants to cut into Mr. Dinkins's credibility.
[21457041] |On the other, he seeks to convince voters he's the new Fiorello LaGuardia -- affable, good-natured and ready to lead New York out of the mess it's in.

[21457042] |It hasn't helped that he's waffled on abortion and gay rights, sought the support of both the Liberal and Conservative parties (he won the Liberal endorsement) and that he turned to comedian Jackie Mason for help with Jewish voters.
[21457043] |Mr. Mason left the campaign after telling reporters Mr. Dinkins is "a fancy 'shvartzer' with a moustache."
[21457044] |Shvartzer is a derogatory Yiddish word for a black person.

[21457045] |Mr. Dinkins concedes nothing in his ability to stumble and bumble.
[21457046] |He can match Jackie Mason with his own Robert "Sonny" Carson, an angry street organizer who was convicted of kidnapping in 1974.
[21457047] |The Dinkins campaign paid Mr. Carson close to $10,000 to get out the vote on primary-election day.
[21457048] |Paper work on how it was spent is incomplete.

[21457049] |Mr. Carson has been charged with being anti-Semitic.
[21457050] |Asked about that the other day, he replied, "Anti-Semitic?
[21457051] |I'm anti-white."

[21457052] |More troubling for Mr. Dinkins is his record in personal accounting.
[21457053] |It began in 1973, when he was being considered for deputy mayor, and a routine check unearthed the extraordinary fact that he hadn't paid his income tax for the previous four years.

[21457054] |"I was always going to do it tomorrow," he explained at the time.

[21457055] |And now he's busily trying to explain an arrangement in which he sold stock in Inner City Broadcasting Co., headed by his old friend and patron, Percy Sutton, to his son, David Dinkins Jr., for $58,000.
[21457056] |He had valued the shares at more than $1 million two years earlier.
[21457057] |He says he sold the stock to avoid conflict-of-interest problems in his role as a voting member of the city's Board of Estimate.
[21457058] |He says his son hasn't paid for the shares.

[21457059] |"It looks like serious tax evasion," says Mr. Ailes, the Giuliani media consultant.
[21457060] |"It follows the same pattern as his tax returns.
[21457061] |He waits to talk about it until after he gets caught."

[21457062] |"He simply hasn't explained why something worth a million dollars ended up worth $58,000 two years later," says Mr. Powers, the Giuliani campaign manager.
[21457063] |"It's ludicrous for him to suggest it's the difference between the 'breakup' value of the shares and their market value."

[21457064] |So far though, no one -- not even former U.S. attorney Giuliani -- has been able to pinpoint just what law Mr. Dinkins has broken or just what tax he has evaded.

[21457065] |"The crime goes to character," says Ron Maiorana, a consultant to the Giuliani campaign.
[21457066] |"It's serious stuff.
[21457067] |He evades and ducks.
[21457068] |He's had a history of deception and this is the latest chapter."

[21457069] |"It makes people think, maybe this guy isn't so squeaky clean after all," says Mr. Garth, Mayor Koch's media consultant.
[21457070] |"The result may turn out to be a lot closer than people think.

[21458001] |The long-running scandal surrounding the 1982 collapse of Banco Ambrosiano was reignited by the arrest last week of Rome businessman Flavio Carboni on fraud charges.

[21458002] |Rome magistrates accuse Mr. Carboni and several other people of trying to extort 1.2 billion lire ($880,000) from the Vatican in return for documents contained in the briefcase of Roberto Calvi, the Ambrosiano chairman found hanged under London's Blackfriar's Bridge shortly before the bank's collapse.

[21458003] |Banco Ambrosiano, which was Italy's largest private-sector bank, collapsed in 1982 with $1.3 billion of debts.
[21458004] |Most of the money was lent to a series of shell companies in Panama and Luxembourg that were owned, directly or indirectly, by the Vatican bank.
[21458005] |The Vatican, which denies any wrongdoing, paid $250 million to the Milan bank's creditors as a "goodwill gesture" in 1985.

[21458006] |Italian news reports said Mr. Carboni and a colleague obtained 1.2 billion lire in checks from a Vatican official, Pavel Hnilica.
[21458007] |Italian papers speculated the briefcase contained papers either exonerating the Vatican bank from blame in the scandal, or showing that the bank, known as the Istituto per le Opere di Religione, channeled funds to East bloc groups such as Solidarity in Poland.

[21458008] |Neither Mr. Hnilica, Mr. Carboni nor Vatican officials could be reached for comment over the weekend.

[21459001] |This business trust company said its board elected Kieran E. Burke, a consultant to Drexel Burnham Lambert Group Inc., as chief executive officer, a new post, and as president.
[21459002] |Mr. Burke succeeds Richard D. Manley, who will remain as a consultant to the company.
[21459003] |Both men were unavailable to comment.
[21459004] |The company also named Michael E. Gellert, a director and a major shareholder, to fill the vacant seat of chairman.

[21460001] |Britain's Serious Fraud Office said it will investigate the circumstances surrounding alleged phantom contracts at Ferranti International Signal PLC's International Signal & Control unit.

[21460002] |The investigation, which will be coordinated with one already under way in the U.S., follows the discovery of what Ferranti has called a "serious" fraud involving its U.S. subsidiary.

[21460003] |International Signal & Control, Lancaster, Pa., a defense-equipment manufacturer, was bought by Ferranti in 1987 for #420 million ($670.3 million).
[21460004] |Ferranti has said that it would be forced to write off #185 million against the phantom contracts, reducing its net asset value by more than half.

[21460005] |The Serious Fraud Office, a division of London's Metropolitan Police responsible for investigating financial crimes, said its work would take in "allegations of fraud prior to, surrounding and subsequent to the merger."

[21460006] |Ferranti said that it welcomes the investigation and that it will "cooperate fully."
[21460007] |Derek Alun-Jones, Ferranti's chairman, has said he hoped to pursue legal action against those responsible.

[21460008] |The British defense electronics group has said it will sell #100 million in assets and may seek a merger to strengthen itself in the wake of its troubles.

[21461001] |Chicago businessmen Bertram M. Lee and Peter Bynoe signed a new agreement to purchase the Denver Nuggets basketball team, but not as principal owners.

[21461002] |On Saturday, the partners said the team would be purchased for $54 million by a new group including Comsat Video Enterprises Inc., a unit of Communications Satellite Corp. based here.
[21461003] |Comsat Video will pay $17 million for a 62.5% interest, with Messrs. Lee and Bynoe putting up $8 million for a 37.5% stake in the team.
[21461004] |Under terms of the sale, Nuggets owner Sidney Shlenker could receive up to $11 million in additional payments from the franchise's future earnings.

[21461005] |Messrs. Lee and Bynoe last July announced a deal that would have made them the first black principal owners of a major professional sports franchise.
[21461006] |But the deal fell apart last week for lack of financing.

[21461007] |Comsat Video is headed by Robert Wussler, who resigned his No. 2 executive post with Turner Broadcasting System Inc. just two weeks ago to take the Comsat position.
[21461008] |Comsat Video, which distributes pay-per-view programs to hotel rooms, plans to add Nuggets games to their offerings, as Mr. Turner did successfully with his Atlanta Hawks and Braves sports teams.
[21461009] |Messrs. Lee and Bynoe will manage the Nuggets' day-today affairs.

[21462001] |Royal Business Group Inc. said it filed suit in federal court here charging Realist Inc. and its directors with violating federal securities laws "by engaging in a scheme to prevent" Royal from acquiring Realist.

[21462002] |Royal, which makes and distributes business forms, owns an 8% stake in Realist.
[21462003] |Royal contends that Realist failed to disclose material information, including Realist's negotiations to acquire Ammann Laser Technik AG, to stockholders prior to Realist's June 6 annual meeting.
[21462004] |Royal's suit contends that the Ammann acquisition was "designed to entrench management and thwart Royal's offer."

[21462005] |Royal withdrew its offer to buy Realist, a maker of optical and electronic products based in Menomonee Falls, Wis., for $14.06 a share in July after Realist disclosed the Ammann purchase.
[21462006] |The suit seeks "in excess of $350,000 in damages."

[21462007] |A Realist official said the company hadn't yet received the full complaint and wouldn't have a response until it had an opportunity to review it.

[21463001] |Winnebago Industries Inc., battered by a deepening slowdown in recreational vehicle industry sales, reported a widened fourth-quarter loss and slashed its dividend in half.

[21463002] |The Forest City, Iowa, maker of motor homes said it had a loss of $11.3 million, or 46 cents a share, in the quarter ended Aug. 26.
[21463003] |A year earlier, the company had a deficit of $1.5 million, or six cents a share.

[21463004] |The cut in the dividend to 10 cents a share semiannually, from 20 cents, "would indicate to me they don't see the problems being fixed real quick," said Frank Rolfes, an analyst at Dain Bosworth Inc. in Minneapolis.
[21463005] |Indeed, Winnebago said it started "several promotional programs" to spur retail sales in the fall and winter.

[21463006] |The year was already shaping up as a difficult one for the recreational vehicle industry, which makes products such as motor homes, travel trailers, folding campers and van conversions.
[21463007] |With the exception of van conversions, the industry has seen a decline from 1988's robust sales.
[21463008] |But the rate of the decline snowballed in August, with unit sales to dealers for the month down 10.5% from a year earlier, according to the Recreation Vehicle Industry Association.

[21463009] |At Winnebago, sales for the quarter fell 6% to $89.5 million from $95.4 million a year earlier.
[21463010] |The company attributed the decline to consumers' concern over interest rates and gas prices -- two key expenses for RV buyers.

[21463011] |"It's a large-ticket discretionary purchase," said Robert Curran, who follows the industry for Merrill Lynch & Co.
[21463012] |"So when there's talk and concern about the economy, it's not unreasonable for a portion of the buying public to defer purchases."

[21463013] |Mr. Curran expects industry RV sales for all of 1989 to fall about 5% from 1988, when sales of 427,300 units were the highest since 1978.
[21463014] |And he said the weakness could continue in the first half of next year.
[21463015] |But he said the industry has "a good decade ahead," particularly if aging baby boomers fulfill the industry's dreams by buying RVs.

[21463016] |Winnebago was hit especially hard in the latest downturn because unit sales in its bread-and-butter motor home business tumbled 25% industrywide in August, and 10.4% in the first eight months of the year.
[21463017] |The company said it also suffered in the quarter from incentive programs, losses from discontinuing a motor home line and costs of developing a new commercial vehicle, among other things.

[21463018] |The news sent Winnebago stock falling 62.5 cents, to $5.25, in New York Stock Exchange composite trading-a 52-week low.

[21463019] |The dividend cut will prove most costly for John K. Hanson, Winnebago's founder and chairman.
[21463020] |Based on his control of about 45% of Winnebago's 24.7 million shares, his annual dividend income would be cut to about $2.2 million from $4.4 million.

[21463021] |For the year, Winnebago had a loss of $4.7 million, or 19 cents a share, following profit of $2.7 million, or 11 cents a share, a year earlier.
[21463022] |Sales rose 2% to $437.5 million from $430.3 million.

[21464001] |Bullish bond market sentiment is on the rise again.

[21464002] |As the government prepares to release the next batch of economic reports, the consensus among economists and money managers is that the news will be negative.
[21464003] |And that, they say, will be good for bonds.

[21464004] |"Recent data have indicated somewhat weaker economic activity," said Elliott Platt, director of economic research at Donaldson, Lufkin & Jenrette Securities.
[21464005] |Mr. Platt is advising clients that "the near-term direction of bond prices is likely to remain upward."

[21464006] |Analysts insist that even without help from a shaky stock market, which provided a temporary boost for bonds during the Oct. 13 stock market plunge, bond prices will start to climb on the prospects that the Federal Reserve will allow interest rates to move lower in the coming weeks.

[21464007] |That would be comforting to fixed-income investors, many of whom were badly burned in the third quarter by incorrectly assuming that the Fed would ease.
[21464008] |Investors rushed to buy bonds during the summer as prices soared on speculation that interest rates would continue to fall.
[21464009] |But when it became clear that rates had stabilized and that the Fed's credit-easing policy was on hold, bond yields jumped and prices tumbled.
[21464010] |Long-term bonds have performed erratically this year.
[21464011] |For example, a group of long-term Treasury bonds tracked by Merrill Lynch & Co. produced a total return of 1% in the first quarter, 12.45% in the second quarter and -0.06% in the third quarter.
[21464012] |Total return is price changes plus interest income.

[21464013] |Now some investment analysts insist that the economic climate has turned cold and gloomy, and they are urging clients to buy bonds before the rally begins.

[21464014] |Among other things, economists note that consumer spending is slowing, corporate profit margins are being squeezed, business confidence is slipping and construction and manufacturing industries are depressed.
[21464015] |At the same time, last week's consumer price index showed that inflation is moderating.

[21464016] |Add it all up and it means "that the Fed has a little leeway to ease its credit policy stance without the risk of rekindling inflation," said Norman Robertson, chief economist at Mellon Bank Corp., Pittsburgh.
[21464017] |"I think we will see a federal funds rate of close to 8 1/2% in the next two weeks and 8% by year end."

[21464018] |The federal funds rate, which banks charge each other on overnight loans, is considered an early signal of changes in the Fed's credit policy.
[21464019] |Economists generally agree that the rate was lowered by the Fed from around 9%, where it had been since July, to about 8 3/4% in early October on the heels of a weak employment report.
[21464020] |Although the rate briefly drifted even lower following the stock market sell-off that occurred Oct. 13, it ended Friday at about 8 11/16%.

[21464021] |James Kochan, chief fixed-income strategist at Merrill Lynch, is touting shorter-term securities, which he says should benefit more quickly than longer-term bonds as interest rates fall.
[21464022] |"Given our forecast for lower rates, purchases made now should prove quite rewarding before year end," he said.

[21464023] |Mr. Kochan also likes long-term, investment-grade corporate bonds and long-term Treasurys.
[21464024] |He says these bonds should appreciate in value as some investors, reacting to the recent turmoil in the stock and high-yield junk bond markets, seek safer securities.
[21464025] |"If the {Tennessee Valley Authority} sale is any guide, there appears to be good demand for top-quality, long-term paper from both domestic and overseas accounts," he said.

[21464026] |TVA, in its first public debt offering in 15 years, sold $4 billion of long-term and intermediate-term securities last week.
[21464027] |Strong investor demand prompted the utility to boost the size of the issue from $3 billion.
[21464028] |TVA, which operates one of the nation's largest electric power systems, is a corporation owned by the federal government.

[21464029] |But persuading investors to buy bonds may be especially tough this week, when the U.S. government will auction more than $30 billion of new securities.
[21464030] |Today, the Treasury Department will sell $15.6 billion of three-month and six-month bills at the regular weekly auction.
[21464031] |Tomorrow, the Treasury will sell $10 billion of two-year notes.

[21464032] |Resolution Funding Corp., known as Refcorp, a division of a new government agency created to bail out the nation's troubled savings and loan associations, will hold its first bond auction Wednesday, when it will sell $4.5 billion of 30-year bonds.
[21464033] |All of this comes ahead of the government's big quarterly refunding of the federal debt, which takes place sometime in November.

[21464034] |So far, investors haven't shown much appetite for Refcorp's initial bond offering.

[21464035] |Roger Early, a portfolio manager at Federated Investors Corp., said that yields on the so-called bailout bonds aren't high enough to attract his attention.

[21464036] |"Why should I bother with something that's an unknown for a very small pickup in yield?" he said.
[21464037] |"I'm not going to jump on them the first day they come out."

[21464038] |He seems to be typical of many professional money managers.
[21464039] |When the size of the Refcorp offering was announced last week and when-issued trading activity began, the bailout bonds were yielding about 1/20 percentage point more than the Treasury's benchmark 30-year bond.
[21464040] |On Friday, the yield was quoted at about 1/4 percentage point higher than the benchmark bond, an indication of weak demand.

[21464041] |Some economists believe that yields on all Treasury securities may rise this week as the market struggles to absorb the new supply.
[21464042] |But once the new securities are digested, they expect investors to focus on the weak economic data.

[21464043] |"The supply is not a constraint to the market," said Samuel Kahan, chief financial economist at Kleinwort Benson Government Securities Inc.
[21464044] |"If one thinks that rates are going down, you don't care how much supply is coming."

[21464045] |Friday's Market Activity

[21464046] |Most bond prices fell on concerns about this week's new supply and disappointment that stock prices didn't stage a sharp decline.
[21464047] |Junk bond prices moved higher, however.

[21464048] |In early trading, Treasury bonds were higher on expectations that a surge in buying among Japanese investors would continue.
[21464049] |Also providing support to Treasurys was hope that the stock market might see declines because of the expiration of some stock-index futures and options on indexes and individual stocks.
[21464050] |Those hopes were dashed when the stock market put in a relatively quiet performance.

[21464051] |Treasury bonds ended with losses of as much as 1/4 point, or about $2.50 for each $1,000 face amount.
[21464052] |The benchmark 30-year bond, which traded as high as 102 1/4 during the day, ended at 101 17/32.
[21464053] |The yield on the benchmark bond rose slightly to 7.98% from 7.96%.

[21464054] |In the corporate bond market, traders said the new-issue market for junk bonds is likely to pick up following Chicago & North Western Acquisition Corp.'s $475 million junk bond offering Friday.

[21464055] |Today, for example, underwriters at Morgan Stanley & Co. said they expect to price a $150 million, 12-year senior subordinated debenture offering by Imo Industries Inc.
[21464056] |Traders expect the issue to be priced to yield 12%.
[21464057] |Shearson Lehman Hutton Inc. said that a $150 million senior subordinated discount debenture issue by R.P. Scherer Drugs is expected by the end of the month.

[21464058] |However, despite the big new-issue calendar, many junk bond investors and analysts are skeptical the deals will get done.

[21464059] |"There are about a dozen more deals coming," said Michael McNamara, director of fixed-income research at Kemper Financial Services Inc.
[21464060] |"If they had this much trouble with Chicago & North Western, they are going to have an awful time with the rest."

[21464061] |Last week, underwriters were forced to postpone three junk bond deals because of recent weakness in the market.

[21464062] |And pressure by big investors forced Donaldson Lufkin & Jenrette Securities Corp. to sweeten Chicago & North Western's $475 million junk bond offering.
[21464063] |After hours of negotiating that stretched late into Thursday night, underwriters priced the 12-year issue of resettable senior subordinated debentures at par to yield 14.75%, higher than the 14.5% that had been expected.
[21464064] |The coupon on the issue will be reset in one year at a rate that will give the issue a market value of 101.
[21464065] |However, the maximum coupon rate on the issue when it is reset is 15.50%.
[21464066] |Debenture holders also will receive the equivalent of 10% of the common stock in Chicago & North Western's parent company.

[21464067] |"The coupon was raised to induce some of the big players on the fence to come in," said a spokesman for Donaldson.
[21464068] |"We put a price on the deal that the market required to get it done."

[21464069] |The spokesman said the issue was sold out and met with strong interest abroad, particularly from Japanese investors.

[21464070] |In the secondary, or resale, market, junk bonds closed 1/2 point higher, while investment-grade corporate bonds fell 1/8 to 1/4 point.

[21465001] |Sotheby's Inc.'s gamble in the art-dealing business appears to have paid off.

[21465002] |The New York arm of the London-based auction house auctioned off the estate of John T. Dorrance Jr., the Campbell's Soup Co. heir, for $131 million last week, a record for a single-owner art collection.

[21465003] |That total was below the $140 million the auction house estimated the collection might sell for, but was enough to ensure that an unprecedented financial arrangement Sotheby's had made with the Dorrance family proved profitable to the auction house.

[21465004] |Sotheby's provided the Dorrance family a guarantee of at least $100 million, and as much as $120 million, to obtain the collection, people familiar with the transaction said, thus taking a greater than usual financial interest in the property to be sold.

[21465005] |The Dorrance estate, auctioned off in a series of sales held over four days, included porcelains, furniture and paintings.
[21465006] |An Henri Matisse, auctioned last Wednesday, fetched $12.4 million, a world record for the artist.

[21465007] |In addition, a handful of paintings from the Dorrance collection remain to be sold at Sotheby's annual old masters paintings auction in January.

[21466001] |The Better Business Bureau of San Diego and the state Attorney General's office entered into a settlement stemming from an investigation of bureau-sponsored business directories published by an outside firm, Better Book Inc.

[21466002] |The settlement stems from charges that Better Book, now defunct, made misrepresentations in selling advertising for the directories and memberships in the bureau from 1984 to 1986.
[21466003] |Without admitting any guilt, the bureau agreed to several conditions if it again contracts with an outside firm to publish its directories.

[21466004] |The conditions include not misrepresenting how many directories will be distributed, and agreeing to make refunds to directory advertisers if any misrepresentations are involved in the sale.

[21466005] |The Attorney General's investigation was sparked by lawsuits and charges by angry California businesspeople that they were swindled in a bureau-sponsored directory project contracted by Better Book.
[21466006] |The uproar led to the closing of the Los Angeles Better Business Bureau in late 1987.

[21467001] |McCaw Cellular Communications Inc. said it obtained "firm" financing commitments from three major banks in regard to its offer for 50.3% of LIN Broadcasting Corp.
[21467002] |Morgan Guaranty Trust, Toronto-Dominion Bank and Provident National Bank, an affiliate of PNC Financial Corp., jointly committed $1.2 billion of financing, subject to certain conditions, McCaw said.

[21467003] |Further, McCaw said the banks expressed confidence that the balance of the $4.5 billion bank facility will be committed within the next several weeks by a syndicate of foreign and domestic banks.
[21467004] |Morgan, Toronto-Dominion and Provident are leading that syndicate.

[21467005] |McCaw is offering to buy 22 million shares of LIN for $125 each in cash, which would result in McCaw owning 50.3% of the cellular-phone and broadcasting concern.
[21467006] |The offer is in limbo, however, because LIN has agreed to merge its cellular-phone businesses with BellSouth Corp.

[21467007] |In national over-the-counter trading Friday, LIN shares rose 62.5 cents to close at $110.625.

[21467008] |Beijing lawmakers have called for jails to be built to house prostitutes and for severe punishment, including the death sentence, for anyone who induces or coerces women into prostitution.

[21467009] |The official Xinhua News Agency said the municipal government was discussing a draft bill to give the capital its first anti-prostitution statutes.
[21467010] |It quoted Liu Changyi, deputy director of the Beijing Public Security Bureau, as saying that there were many more people involved in prostitution now than in 1985, when there were about 100 cases.

[21467011] |Foreigners involved in prostitution will be punished according to the law, and those with sexually transmitted diseases will be expelled from the country, according to the regulations.

[21467012] |The Communists nearly succeeded in eliminating prostitution after taking over in 1949, but the practice has returned in recent years with the country's increased exposure to the outside world.

[21467013] |Japan agreed to enforce a decision by an international wildlife conference to ban all trade in ivory, a spokesman for the Ministry of International Trade and Industry said.
[21467014] |Earlier, Japan had said it might file a reservation against the ivory ban decided by ballot at the 103-nation United Nations Conference on International Trade in Endangered Species in Switzerland last week.
[21467015] |The Japanese use 40% of the world's ivory.

[21467016] |Italy should close the Leaning Tower of Pisa because it's a danger to tourists, government-appointed experts said.
[21467017] |"In some places the stonework is so damaged it shows signs of breaking off," scientists and technicians said in a report to Public Works Minister Giovanni Prandini.
[21467018] |Each year, nearly a million people pay about $3 to make the spiral climb up 294 steps to the top of the 800-year-old marble tower.

[21467019] |East Germany pledged to reduce alcohol consumption by boosting production of soft drinks and fruit juices.
[21467020] |Trade and Supply Minister Gerhard Briksa said in a letter published in the youth daily Junge Welt that the rise in alcohol consumption in East Germany had been halted; but to reduce it further, he said, production and supply of other beverages, including fruit juices, should be stepped up.
[21467021] |He added that shops will have to continue reducing their stocks of liquor and avoid displaying them too prominently in the window.

[21467022] |Hong Kong has built a detention center for illegal immigrants from China because China has refused for the past two weeks to accept them back.
[21467023] |The center, close to Hong Kong's border with China, will be ready today and will be able to house 1,000 inmates, Police Deputy Director Peter Wong said.
[21467024] |The dispute started when China, angry that Hong Kong had allowed dissident swimmer Yang Yang to flee to the U.S., halted the usual daily transfer of illegal immigrants caught in this British colony, which reverts to Beijing's control in 1997.

[21467025] |Sweating under the glare of newly installed television lights, British members of Parliament demanded a halt to the experimental televising of debates.
[21467026] |A group of senior Conservative legislators, complaining the House of Commons was like a sauna, demanded that the experiment be stopped unless the intensity of the lights is reduced.
[21467027] |One Conservative MP, David Wilshire, said: "I should have a wonderful suntan by Christmas."
[21467028] |Debates are due to be broadcast nationally starting Nov. 21 in a six-month experiment.

[21467029] |A majority of Japanese banks are said to be wary of making new loans to Mexico under the Brady plan because they're uncertain the Mexican economy will remain stable.

[21467030] |Instead, many small and medium-sized banks, and some larger ones, are likely to take one of the other two options open to them under the plan, Japanese banking officials said.
[21467031] |The plan, proposed by U.S. Secretary of State Nicholas Brady, calls for banks either to make new loans or to reduce the principle on existing loans or to cut the interest rate on those existing loans.

[21467032] |The officials said that most Japanese banks prefer the losses they'd suffer in either of the latter options to the risk of new lending.
[21467033] |But an official at a long-term credit bank explained that since some larger banks have already taken loss provisions for loans to other Third World nations, further write-offs could be viewed as intolerable.
[21467034] |"They can't take the hit" to their earnings, he said.

[21467035] |As a result, the official said, they may be forced into a no-win situation in which they make risky loans that they could have to write off later.

[21467036] |A poll in male-dominated South Korea put Margaret Thatcher first on a list of most-respected foreign leaders.
[21467037] |The British prime minister was the only woman singled out by respondents, who put Soviet President Mikhail Gorbachev in second place. . . .
[21467038] |The Soviet newspaper Trud reported that Mickey Mouse will appear in a Russian-language comic book to be issued four times a year by Soviet publisher Fizkultura i Sport and Denmark's Gutenberghus Group.
[21467039] |The comic book will cost about $2.

[21468001] |Ekco Group Inc., Nashua, N.H., expects to report that net income in the third quarter, ended Oct. 1, fell 50% to 60% from $2.1 million, or 11 cents a share, a year earlier.

[21468002] |Robert Stein, president and chief executive officer, attributed the expected decline partly to the effects of a two-week strike last month at the company's Masillon, Ohio, bakeware facility.
[21468003] |Softer-than-expected orders in early September also played a role, he said in an interview.

[21468004] |But Mr. Stein said he is "reasonably confident" that earnings for the full year will exceed the $3.1 million, or 17 cents a share, in 1988.
[21468005] |That would require fourth-quarter net of more than about 22 cents to 24 cents a share, assuming that Mr. Stein's third-quarter estimate proves accurate.
[21468006] |In the year-earlier fourth quarter, the company had profit of $2.7 million, or 15 cents a share.

[21468007] |Third-quarter revenue is expected to be $40 million to $45 million, up from $38.2 million a year earlier, according to Neil Gordon, treasurer.
[21468008] |The year-earlier periods don't reflect results of the company's Woodstream Corp. unit, acquired last January, but include some Canadian operations that were sold at the end of 1988.

[21468009] |August through October traditionally is the busiest season for the bakeware business, as many retailers use the goods as autumn promotional items.
[21468010] |Mr. Stein said some retailers -- perhaps anxious about minimizing inventories -- appear to have held back on orders in September but have been ordering more heavily in October.

[21468011] |Mr. Stein said Woodstream is "marginally profitable" but hasn't performed as well as expected.
[21468012] |Woodstream's Victor-brand mousetraps and other pest-control products are "doing very well," and its plastic storage-case products "are poised for growth," he said.
[21468013] |But the unit's third segment, wildlife traps, is suffering from a "depressed market," and Ekco is seeking to sell that segment, he said.
[21468014] |Mr. Stein said he expects profit to be higher in 1990 than in 1989, reflecting a number of measures taken since the acquisition of Ekco Housewares in late 1987.
[21468015] |(Prior to acquiring the housewares business, the company was known as Centronics Corp.; Centronics had been a maker of computer printers, but Mr. Stein and other officers decided to sell that business after Japanese competitors grabbed a dominant share of the market.)

[21468016] |Mr. Stein said tighter operating controls have enabled Ekco to reduce inventory levels 25% to 30%; improve on-time delivery of orders to about 95% from around 70%; and to lower the number of labor hours required to produce a unit.
[21468017] |By moving the design of new products in-house -- instead of contracting out the work -- the company also has been able to come up with designs that can be manufactured more efficiently, he said.

[21468018] |In addition to those measures, the company spent heavily earlier this year to install displays at its customers' retail outlets -- a strategy that Mr. Stein said has helped bolster awareness of the company's brands.

[21468019] |Ekco's housewares operation makes kitchen tools and gadgets, as well as bakeware, at factories in the U.S. and Canada.
[21468020] |The main issue in the strike at the Ohio facility was health-care benefits, Mr. Stein said.
[21468021] |The strike ended Oct.

[21468022] |Ekco continues to seek further acquisitions in the consumer-products industry, Mr. Stein said.
[21468023] |He indicated that Ekco may be interested in acquiring another company with revenue in the range of $75 million to $100 million, partly because mass merchandisers increasingly want to rely on larger, and fewer, suppliers.

[21469001] |After several years of booming business with China, foreign traders are bracing for the biggest slump in a decade.

[21469002] |The imposition of austerity measures, starting last October, already had begun to pinch when the massacre in Tiananmen Square on June 4 and subsequent events tugged the belt far tighter.
[21469003] |Foreign lending has been virtually suspended since then, choking liquidity and hobbling many projects.
[21469004] |And Beijing has pulled back on domestic loans and subsidies, leaving many domestic buyers and export-oriented plants strapped for cash.

[21469005] |Givaudan Far East Ltd., a Swiss concern that sells chemicals to shampoo and soap factories in China, typifies the problems.
[21469006] |Last year's retrenchment dried up the working capital of Chinese factories.
[21469007] |The company's sales flattened during 1989's first half.

[21469008] |The June killings magnified the problems.
[21469009] |In Canton, Givaudan's representative office received no orders in June.
[21469010] |At first it attributed the slump to temporary business disruptions, but when no orders were logged in August and September, manager Donald Lai became convinced that business would be bad for many months.

[21469011] |"Things have grown worse since June 4," Mr. Lai says.
[21469012] |He predicts that sales will drop between 30% and 40% from last year's $3 million.

[21469013] |The consumer-products and light-industrial sectors are bearing the brunt of China's austerity measures, and foreign companies such as Givaudan that deal with those industries are being hit the hardest.
[21469014] |But in general, all foreign-trading companies are feeling the pinch.

[21469015] |"The import pie will shrink," says John Kamm, first vice president of the American Chamber of Commerce in Hong Kong and a China trade specialist.
[21469016] |"On the down side, sales could fall as much as 90% for some companies; on the upper side, sales will be flat."
[21469017] |China's foreign trade has gone in cycles during the past decade.
[21469018] |The last time that traders experienced a trough was during 1985-86, when Beijing imposed tough measures to curb imports and conserve foreign exchange.
[21469019] |The current trough is expected to be much deeper, because Beijing has cut off domestic funds from factories for the first time to slow inflation.
[21469020] |In addition, the suspension of loans and export credits from foreign governments and institutions following the June killings have been a big setback.

[21469021] |"The freeze on new lending is dealing the single biggest blow to trading," says Raymond Wong, China manager for Mannesmann AG, a West German machinery-trading company.

[21469022] |Import growth from the year-earlier months slowed to 16% in July and 7.1% in August, compared with an average growth rate of 26% in the first half.
[21469023] |In the first eight months of 1989, imports grew 21%, to $38.32 billion, down slightly from a growth rate of 23% a year earlier.

[21469024] |The picture for China's exports is just as bleak, mainly because of the domestic credit squeeze.
[21469025] |Exports in the first eight months grew only 9%, to $31.48 billion, compared with a growth rate of 25% a year earlier, according to Chinese customs figures.

[21469026] |The threat to China's balance of payments is further aggravated by the plunge in its foreign-exchange reserves, excluding gold holdings.
[21469027] |The reserves dropped for the first time in recent years, to $14 billion in June from $19 billion in April.

[21469028] |The trend has prompted Beijing to intensify efforts to curb imports.
[21469029] |In recent weeks, China's leaders have recentralized trading in wool and scores of chemical products and commodities.
[21469030] |The Ministry of Foreign Economic Relations and Trade set up a special bureau last month to monitor the issue of import and export licenses.

[21469031] |Beijing's periodic clampdowns on imports have taught many trading companies that the best way to get through the drought is by helping China export.
[21469032] |For example, Nissho Iwai Corp., one of the biggest Japanese trading houses, now buys almost twice as many goods from China as it sells to that country.
[21469033] |Three years ago, the ratio was reversed.

[21469034] |But the strategy isn't helping much this time.
[21469035] |"Both sectors of imports and exports look just as bad," says Masahiko Kitamura, general manager of Nissho Iwai's Canton office.
[21469036] |He expects the company's trading business to drop as much as 40% this year.

[21469037] |For a short time after June 4, it appeared that the trade picture would remain fairly bright.
[21469038] |Many foreign trading offices in Hong Kong were swamped with telexes and telephone calls from Chinese trade officials urging them not to sever ties.
[21469039] |Even the Bank of China, which normally took weeks to process letters of credit, was settling the letters at record speed to dispel rumors about the bank's financial health.

[21469040] |But when foreign traders tried to do business, they discovered that the eagerness of Chinese trade officials was just a smokescreen.
[21469041] |The suspension of foreign loans has weakened the buying power of China's national trading companies, which are among the country's biggest importers.

[21469042] |Business isn't any better on the provincial or municipal level, foreign traders say.
[21469043] |Shanghai Investment & Trust Co., known as Sitco, is the city's main financier for trading business.
[21469044] |Sitco had customarily tapped the Japanese bond market for funds, but it can't do that any longer.
[21469045] |Foreign traders say the company is strapped for cash.

[21469046] |"It has difficulties paying its foreign debts," says a Hong Kong executive who is familiar with Sitco's business.
[21469047] |"How can it make available funds for purchases?"

[21469048] |Foreign traders also say many of China's big infrastructural projects have been canceled or postponed because of the squeeze on domestic and foreign credit.
[21469049] |Albert Lee, a veteran trader who specializes in machinery sales, estimates that as many as 70% of projects that had obtained approval to proceed have been canceled in recent months.
[21469050] |"There are virtually no new projects, and that means no new business for us," he says.

[21469051] |Even when new lending resumes, foreign exchange would still be tight because Beijing will likely try to rein in foreign borrowing, which has grown between 30% and 40% in the past few years.
[21469052] |And foreign creditors are likely to be more cautious about extending new loans because China is nearing a peak repayment period as many loans start falling due in the next two to five years.

[21469053] |Another reason for the intensity of the trade problems is that Beijing has extended the current clampdown on imports beyond the usual target of consumer products to include steel, chemical fertilizers and plastics.
[21469054] |These have been among the country's leading imports, particularly last year when there were shortages that led many traders to buy heavily and pay dearly.

[21469055] |But the shortages also spawned rampant speculation and spiraling prices.
[21469056] |To stem speculation, Beijing imposed ceiling prices that went into effect earlier this year.
[21469057] |Traders who had bought the goods at prices above the ceiling don't want to take a loss on resales and are holding onto their stock.
[21469058] |The resulting stockpiling has depressed the market.

[21469059] |But Beijing can't cut back on such essential imports as raw materials for too long without hampering the country's export business.
[21469060] |Mr. Kamm, the China trade expert, estimates that as much as 50% of Guangdong's exports is made up of processed imported raw materials.

[21470001] |Oil Spill Case Shows Liability Fund Flaws

[21470002] |AN UNRESOLVED two-year-old dispute stemming from an Alaskan oil spill has helped spur a drive for tougher federal laws to protect victims of such accidents.

[21470003] |The class-action suit highlights shortcomings of the Trans-Alaska Pipeline Liability Fund, which gets its money from oil companies using the pipeline and compensates those harmed by oil spills.

[21470004] |On July 2, 1987, the tanker S.S. Glacier Bay struck a rock and spilled almost 150,000 gallons of oil into the Cook Inlet.
[21470005] |Commercial fishermen and fish processors filed suit in federal court in a claim that has ballooned to more than $104.8 million.
[21470006] |Defendants include British Petroleum America; Trinidad Corp., the shipper; and the pipeline liability fund.

[21470007] |The fund was created by the Trans-Alaska Pipeline Act, which provides that the owner or operator of a vessel involved in an oil spill must pay the first $14 million in damages.
[21470008] |The fund is required to pay claims up to an additional $86 million.

[21470009] |The fund's purpose is to provide quick and adequate relief.
[21470010] |But the Glacier Bay case, the fund's first test, shows how easily the fund can be undermined.
[21470011] |Trinidad Corp. is contesting liability.
[21470012] |It claims the Coast Guard failed to chart the rock and refuses to pay damages.
[21470013] |That means the fund isn't obligated to pay anything, at least so far.

[21470014] |The Oil Pollution Act, scheduled to come up for a vote in Congress this fall, would provide that if claimants aren't paid within 90 days of a spill, the liability fund would compensate them and seek reimbursement from the owner or operator of the vessel, says a spokesman for Rep. George Miller (D., Calif.), a sponsor of the bill.
[21470015] |The spokesman says the "glitch" in the statute is "the worst kind of Catch-22."

[21470016] |Many Law School Grads Find Classes Never End

[21470017] |RECENT LAW school graduates are starting jobs with law firms this fall -- and heading back to class.

[21470018] |Bar associations and consultants are offering more programs to teach associates all they need to know about law but didn't learn in law school.
[21470019] |"Law school teaches wonderful theory, but it doesn't teach the nuts and bolts of practical lawyering," says Aaron Weitz, head of a New York County Lawyers' Association committee that sponsors such a course.

[21470020] |In the past, associates learned the basics from senior lawyers who acted as mentors.
[21470021] |But these days, large firms hire as many as 30 new associates a year, and it's impossible to personally train everyone, says Joel Henning of Hildebrandt Inc., a consulting firm that runs training classes.

[21470022] |The Hildebrandt course enables students to brush up on negotiation skills by role playing in simulated deals.
[21470023] |Students also are taught to return clients' phone calls immediately and to treat the support staff with respect.

[21470024] |Many law firms sponsor their own programs.
[21470025] |At the Baltimore firm of Weinberg & Green, new corporate and banking associates are required to enroll in a 20-class course.
[21470026] |Partners lecture on how to form corporations, draft agreements and defend clients against unwanted tender offers.

[21470027] |Now, clients know that new associates have had some practical training before working on their cases, says James J. Hanks, a partner at the firm.

[21470028] |Los Angeles Creates A Courthouse for Kids

[21470029] |THE CHILDREN of Los Angeles will soon have their own $52 million courthouse.

[21470030] |The building, which will handle child abuse, custody and foster care cases, will be "less formal, less threatening and just basically less grim than most courthouses," says Edmund Edelman, chairman of the Los Angeles County Board of Supervisors.

[21470031] |Designs call for an L-shaped structure with a playground in the center.
[21470032] |There will be recreation and movie rooms.
[21470033] |Teens will be able to listen to music with headsets.
[21470034] |Study halls, complete with reference materials, will be available.
[21470035] |And there will be a nurse's station and rooms for children to meet with social workers.

[21470036] |The building's 25 courtrooms will be smaller, says Charlene Saunders, a court administrator.
[21470037] |The bench will be lower so the judge seems less intimidating, and walls will be painted in bright colors and covered with murals.

[21470038] |Cases in Los Angeles County involving dependent children are usually heard in the Criminal Courts Building.
[21470039] |"We need to get the kids away from the criminals into a less traumatic environment," says Mr. Edelman.
[21470040] |About 45,000 children in Los Angeles County are under court supervision, Mr. Edelman says, and an average of 1,500 new children are added each month.

[21470041] |The courthouse, to be built in Monterey Park, is expected to open in the spring of 1992.

[21470042] |Law Firm Management Can Be Quite Rewarding

[21470043] |IT PAYS to follow a management career path -- even at law firms.

[21470044] |That's the conclusion of a recent study of large law firms conducted by Altman & Weil Inc., an Ardmore, Pa., law firm consultant.
[21470045] |Its survey of 96 firms, each with 100 to 1,000 lawyers, shows that managing partners earned an average of $395,974 in compensation and cash benefits in the firms' 1988 fiscal years.

[21470046] |Managing partners who responded to the survey typically spend over half their time supervising their firms' day-to-day operations and just a little more than a third of their time practicing law.

[21470047] |Partners in the survey who devote most of their time to practicing law earned an average of about $217,000.

[21471001] |Chairman Jamie Whitten (D., Miss.) of the House Appropriations Committee proposed a $2.85 billion emergency funding package to assist California's recovery from last week's earthquake and extend further aid to East Coast victims of Hurricane Hugo.

[21471002] |The sweeping measure incorporates $500 million in small-business loans, $1 billion in highway-construction funds and $1.25 billion divided between general emergency assistance and a reserve to be available to President Bush to meet unanticipated costs from the two disasters.
[21471003] |The funds would be attached to a stop-gap spending bill required to keep most of the government operating past Wednesday.

[21471004] |The measure is scheduled to be taken up by the Appropriations Committee today.
[21471005] |The panel is expected to add provisions waiving restrictions on the use of federal highway funds and may also shift money within the package to bolster the share for the Small Business Administration.
[21471006] |"We will support it, we will thank him, and we will augment it where appropriate," said Rep. Vic Fazio (D., Calif.).

[21471007] |Dubbed the "Dire Emergency Supplemental to Meet the Needs of Natural Disasters of National Significance," the measure is vintage Whitten in asserting federal responsibility and in disdaining budget impediments.
[21471008] |"Such other amounts will be made available subsequently as required," the legislation reads, and the new obligations "shall not be a charge against the Budget Act, Gramm-Rudman-Hollings, or other ceilings.

[21472001] |Moody's Investors Service Inc. said it lowered the ratings of some $145 million of Pinnacle debt because of "accelerating deficiency in liquidity," which it said was evidenced by Pinnacle's elimination of dividend payments.
[21472002] |Henry Sargent Jr., Pinnacle executive vice president, said the action "won't really have any effect on us.
[21472003] |We aren't selling bonds right now, and I don't think it will affect the value of our existing bonds."
[21472004] |The rating agency said it lowered the ratings on $75 million of the holding company's convertible subordinated Eurodebentures to B-3 from B-1.
[21472005] |Moody's said it also lowered the ratings of $70 million of Pinnacle's MeraBank thrift unit long-term deposits to B-3 from B-2, and on its subordinated debt to Ca from Caa.
[21472006] |MeraBank's rating for short-term deposits remains Not Prime.
[21472007] |Securities of MeraBank were placed under review last May, and will remain under review for downgrade, the agency said.

[21473001] |First, the somewhat affected idealism of the 1960s.
[21473002] |Then, the all-too-sincere opportunism of the 1970s and 1980s.
[21473003] |What now?
[21473004] |To judge from novels that mirror the contemporary scene, we're back in the age of anxiety.
[21473005] |Where '60s dropouts professed to scorn middle-class life and ambitious yuppies hoped to leave it far behind as they scaled the upper reaches of success, it now seems that so many people feel they're slipping between the cracks, that middle-class life is viewed with nostalgia or outright longing.

[21473006] |Lisa Zeidner's third novel, "Limited Partnerships" (North Point Press, 256 pages, $18.95) is a stylish, funny and thoughtful look at the way love relationships are affected by the pressures of money, or, more specifically, the lack of it.
[21473007] |Nora Worth and Malcolm DeWitt, 33 and 39 respectively, live together in a townhouse in a transitional Philadelphia neighborhood.
[21473008] |Malcolm, a former film-maker turned architect, has just seen his first big chance at a lucrative commission turn to dust with the arrest of his shady, obnoxious client, a fly-by-night real estate developer.
[21473009] |Nora, who still has artistic aspirations, knows she is lucky to be working as a food stylist, prepping pies, burgers, frosty cold drinks and other comestibles to look as appetizing as possible in front of the camera.
[21473010] |After all, she reasons, "there were housewives with Nikons and degrees from cooking schools in France who would kill for her job."
[21473011] |But Nora and Malcolm feel trapped.
[21473012] |They seem to be having the "worst of both worlds: artistic work with none of art's integrity and no control over the finished product; self-employment without fun or profit."

[21473013] |It's a downbeat, "thirtysomething" world, in which bright, still youngish people are engaged in a glossy version of day labor, doing free-lance, semi-professional work that brings little satisfaction or security but that they know they should be grateful to do.
[21473014] |Uncertainty dogs every aspect of their lives.
[21473015] |Malcolm faces bankruptcy and an IRS audit, but Nora finds an extra $30,000 in her bank account, suddenly increasing her available funds some fifteenfold.
[21473016] |While she is wondering whether to live it up, and do something even more dramatic, say get married, her life is further complicated by the reappearance of an old flame, David, a film critic and actor who always seems to be just on the brink of stardom.

[21473017] |In novels of an earlier vintage, David would have represented excitement and danger; Malcolm, placid, middle-class security.
[21473018] |The irony in this novel is that neither man represents a "safe" middle-class haven: Nora's decision is between emotional excitement and emotional security, with no firm economic base anywhere.
[21473019] |The characters confront a world in which it seems increasingly difficult to find a "middle way" between the extremes of success and failure, wealth and poverty.

[21473020] |In making Malcolm and Nora such wonderfully representative specimens of their class and generation, Ms. Zeidner has somewhat neglected the task of making them distinctively individual characters.
[21473021] |The humor of the story owes much to the fact that no hearts (even the characters' own) are likely to bleed for the plight of health-food eaters.
[21473022] |But readers may well feel the pangs of recognition.

[21473023] |In any case, the foundering middle classes aren't the only ones in trouble -- or whose troubles provide material for fiction.
[21473024] |"Rascal Money" (Contemporary Books, 412 pages, $17.95), a novel by consultant and business analyst Joseph R. Garber, tells the story of an innovative, well-run, widely respected computer manufacturing company called PegaSys as it faces a hostile takeover attempt by AIW, a much smaller corporation that is so incompetently managed as to constitute a standing joke in the business world.

[21473025] |Patrician, dynamic Scott Thatcher, founder and head of PegaSys, initially finds the takeover threat risible.
[21473026] |But, as he and his skilled team soon discover, they're up against two factors they hadn't counted on: first, a business climate in which a failing company with few assets and many debts can borrow against the assets of the successful company it hopes to acquire in order to finance the takeover; second, that standing behind AIW is a sinister consortium of much bigger, shadier and shrewder foreign interests secretly providing the money and muscle for the deal.

[21473027] |Mr. Garber manages to invest this tale of financial wars with the colorful characters and fast-paced action of a suspense novel.
[21473028] |And like a spy or mystery story, this novel has strong elements of allegory, as the good and evil forces battle it out.
[21473029] |Mr. Garber depicts these moral qualities with the broad brush strokes of a satire that occasionally descends to the realm of cliched caricatures.
[21473030] |Standard-issue portraits of flaky Californians, snobbish homosexuals and Neanderthal union leaders undermine the force of the author's perceptions.
[21473031] |Yet the heavy-handedness of the satire also can be effective in a book like this: If the head of AIW were not portrayed as an utterly contemptible, malicious dolt, we would not much care whether his schemes were defeated, and would not be so diverted in the process.

[21473032] |Ms. Rubin is a free-lance writer based in Los Angeles.

[21474001] |High-definition television promises to be the TV of tomorrow, so it is a natural multibillion-dollar market.
[21474002] |Although major U.S. manufacturers have all but ceded the main segment of that future business to Japan, not everyone here is ready to give up.

[21474003] |A handful of small U.S. companies are struggling to develop the technology to build the screens for the thin, high-quality televisions that are expected to hang on living room walls by the end of the 1990s.
[21474004] |With only small help from the government, these start-up concerns are trying to compete with the Goliaths of the Japanese consumer electronics industry, which enjoy considerable backing from the Japanese government.

[21474005] |Photonics Technology Inc. of Northwood, Ohio, aims to use a new form of plasma technology to put movie-quality images on a TV display that is 40 inches in diameter but only a few inches thick.

[21474006] |Planar Systems Inc. of Beaverton, Ore., the largest of these firms, with $20 million in annual revenue, has similar plans.
[21474007] |It already has had success in electroluminescence, another promising technology adaptable for high-definition television.

[21474008] |Two other firms, Ovonic Imaging Systems Inc. of Troy, Mich., and Magnascreen Corp. of Pittsburgh are developing a variation of the flat-panel screens called active-matrix liquid crystal displays.

[21474009] |The new technologies are intended to retire the cathode-ray tube, which accounts for most of the bulk of the conventional TV set.
[21474010] |Replacing the cathode-ray tube with a large, thin screen is the key to the creation of a high-definition television, or HDTV, which is expected to become a $30 billion business world-wide within a decade.
[21474011] |Large U.S. companies are interested in other segments of the HDTV business, such as signal-processing and broadcast equipment.
[21474012] |But except for Zenith Electronics Corp. and International Business Machines Corp., which is collaborating with Toshiba on computer displays, they are poorly positioned to exploit advances in large panels.
[21474013] |General Electric Co. recently sold off its interests in liquid-crystal displays to Thompson-CSF of France.
[21474014] |"We found the market not developing as we thought it would," a GE spokesman says.

[21474015] |The small U.S. firms are persisting because of their strong positions in patents, and because the prize is still there to be seized.
[21474016] |"No one yet has shown the ability to manufacture these panels" at commercial costs, says Zvi Yaniv, the president of Ovonic Imaging.
[21474017] |He says he thinks his company is just a few years from doing that.

[21474018] |The Bush administration, hearing conflicting advice about what its role in HDTV should be, isn't doing much for now.
[21474019] |The only material support it is extending to the struggling U.S. industry is $30 million in awards from the Pentagon's Defense Advanced Research Projects Agency.
[21474020] |The DARPA funds are a pittance compared with what Japan and other prospective competitors are spending.
[21474021] |The Commerce Department estimates that Japanese government and industry spending on HDTV research is already over $1 billion.

[21474022] |"Unless it gets more help, the U.S. industry won't have a chance," says Peter Friedman, Photonics's executive vice president.

[21474023] |Thus far, almost all of the basic technology relating to high-definition television has come from U.S. laboratories.
[21474024] |But Peter Brody, Magnascreen's president, says Japanese companies are poised to snatch the technology and put it to commercial use, just as they did with earlier U.S. innovations in color television and video recording.

[21474025] |In the 1970s, Mr. Brody helped develop the first display panels based on active-matrix liquid crystals at Westinghouse Electric Corp.'s research labs in Pittsburgh.
[21474026] |The panels are like oversized semiconductors surfaced with a million or more picture elements, each contributing to the color and tone of a TV image.

[21474027] |In 1979, however, Westinghouse abandoned the project along with its stake in advanced television.
[21474028] |Mr. Brody left the company to find other backers.
[21474029] |He has a claim to the right to commercialize the Westinghouse patents, but he contends that those patents are being infringed by a number of Japanese producers.

[21474030] |"Most American investors have just given up," Mr. Brody says.
[21474031] |"They aren't prepared to compete in an area where the Japanese want to enter."

[21474032] |Many critics question the industry's need for federal support; the Pentagon justifies its help on national-security grounds.
[21474033] |"We don't see a domestic source for some of our {HDTV} requirements, and that's a source of concern," says Michael Kelly, director of DARPA's defense manufacturing office.
[21474034] |So DARPA is trying to keep the industry interested in developing large display panels by doling out research funds.

[21474035] |HDTV already has some military applications, such as creating realistic flight simulations and transmitting information to combat commanders.
[21474036] |The Navy is ordering displays for its Aegis cruisers and the Army wants smaller versions for its Abrams battle tanks.

[21474037] |The Commerce Department also is trying to encourage HDTV because of the benefits that could spin off to the semiconductor and computer industries.
[21474038] |"It isn't just yuppie television," argues Jack Clifford, director of the department's office of microelectronics and instrumentation.
[21474039] |"The industry will create industrial products such as displays for work stations and medical diagnostic equipment before it acquires a mass consumer market."

[21474040] |Although some HDTV advocates are calling for other forms of aid, such as antitrust relief for research consortia, the small firms simply would prefer more DARPA funds.
[21474041] |Each claims to possess the right technology and wants just a bit more money to make it commercial.

[21474042] |They also want U.S. trade policy to reflect the Pentagon and Commerce department's concern over their future.
[21474043] |They all are strongly opposed to a petition from several Japanese TV manufacturers, including Matsushita, Hitachi, and Toshiba, to exempt portable color TVs with liquid-crystal displays from anti-dumping duties that the U.S. imposes on the larger Japanese color TVs.

[21474044] |And they want the U.S. to help them sell overseas.
[21474045] |Planar President James Hurd says he has to pay tariffs as high as 15% to sell his display panels in Japan and South Korea, while panels from those countries enter the U.S. duty-free.

[21474046] |"This isn't a technology issue, but an attitude issue," he says.
[21474047] |"We just haven't learned what it takes to compete.

[21475001] |Burmah Oil PLC, a British independent oil and specialty-chemicals marketing concern, said SHV Holdings N.V. has built up a 7.5% stake in the company.

[21475002] |The holding of 13.6 million shares is up from a 6.7% stake that Burmah announced SHV held as of last Monday.

[21475003] |SHV, of the Netherlands, which last year merged its North Sea oil and gas operations with those of Calor Group PLC and which owns 40% of Calor, was identified as a possible suitor for Burmah.

[21475004] |Burmah said it hadn't held any discussions with SHV and that "no deal of any nature is in contemplation.

[21476001] |The top state environmental official in Massachusetts said Clean Harbors Inc.'s environmental-impact statement for a proposed incinerator in Braintree was inadequate.

[21476002] |The official, John DeVillars, asked Clean Harbors for more information before ruling on a permit for the site.
[21476003] |Critics of the plan, including the town of Braintree, say the incinerator is a health hazard.

[21476004] |Clean Harbors, based in Quincy, said it "will proceed expeditiously" to submit the data requested.
[21476005] |Alan McKim, chief executive officer of Clean Harbors said he was "very much encouraged" by the official's praise of Clean Harbors for the quality of some of the data in the report.

[21477001] |Citizens & Southern Corp. said it signed a definitive agreement to acquire Security Pacific Corp.'s New York-based factoring unit.

[21477002] |Terms of the bank holding companies' agreement weren't disclosed.

[21477003] |Factoring involves the purchase and collection of another company's receivables.
[21477004] |Citizens, based in Atlanta, said it has about $4.6 billion in factored sales annually; the Security Pacific unit has about $1.8 billion annually.

[21477005] |Security Pacific's factoring business works with companies in the apparel, textile and food industries, among others.

[21478001] |The Office of Thrift Supervision banned B.J. Garman, a former director of the failed Vision Banc Savings Association of Kingsville, Texas, from working in any financial institution insured by the government.

[21478002] |The office, a Treasury Department unit that is the successor to the Federal Home Loan Bank Board, said this was the first announcement of an enforcement action since this year's thrift-bailout legislation ordered that all such actions by federal banking regulators be made public.

[21478003] |Generally, regulators haven't announced enforcement actions in the past.
[21478004] |Indeed, the OTS said that before the law took effect Aug. 9, it banned another "key Vision Banc insider" from insured financial institutions.
[21478005] |That individual wasn't identified.

[21478006] |Vision Banc was placed in government conservatorship in March, and it operates under the control of the Resolution Trust Corp., the agency created to sell or liquidate insolvent thrifts.

[21478007] |The OTS didn't say specifically why the action was taken against Ms. Garman.
[21478008] |However, it said examiners found a variety of insider dealings at the thrift, including "extraordinary loan commissions" paid to a firm associated with Vision Banc officials, and loans diverted through borrowers back to the thrift officials.

[21478009] |Ms. Garman couldn't be reached for comment.

[21479001] |Arizona Instrument Corp. said it expects to post a third-quarter net loss of about $600,000, or 25 cents to 27 cents a share, compared with net income of $214,000, or 10 cents a share, a year earlier.

[21479002] |The Tempe, Ariz., maker of underground fuel-storage systems said the most recent period was affected by customers' problems complying with recent Environmental Protection Agency regulations.

[21479003] |For the nine months, the company expects to post a net loss of about $879,000, or 35 cents to 40 cents a share, on revenue of $6.5 million.
[21479004] |A year earlier, it had a loss of $199,203 or nine cents a share, on revenue of $7.6 million.

[21480001] |Growth is good.

[21480002] |At least, that's a theme emerging among many money managers who are anxious both to preserve the handsome stock-market gains they have already achieved this year and to catch the next wave of above-average performers.
[21480003] |They are starting to buy growth stocks.

[21480004] |Remember them?
[21480005] |The upper echelon of this group were shares of the "nifty 50" companies whose profits of the 1960s and early 1970s grew steadily, if not spectacularly, through thick and thin.
[21480006] |That sort of workhorse performance sounds made to order for a time when corporate profits overall have been weakening from the brisk increases of recent years.
[21480007] |The current flood of third-quarter reports are producing many more negative surprises than positive ones.

[21480008] |Those are unwelcome trends in a year that the Dow Jones Industrial Average has risen 23% so far, even with the 190.58-point plunge on Oct. 13; broader market measures are in the same neighborhood.
[21480009] |The question for investors is, how to protect these returns and yet reach a little for additional gains.
[21480010] |That's the path of reasoning leading to growth stocks.

[21480011] |"I think it is a good theme for what looks to be an uncertain market," says Steven Einhorn, partner at Goldman Sachs.

[21480012] |Growth stocks may be as big as Philip Morris or medium-sized such as Circuit City Stores, but their common characteristic is a history of increasing profits on the order of at least 15% to 20% a year, money managers say.

[21480013] |"The period when growth stocks should be performing well is when their earnings are growing at a superior rate to the general level of corporate profits," says Stephen Boesel, president of T. Rowe Price's Growth and Income Fund.

[21480014] |Growth stocks also are attractive in periods of market volatility, which many investors and analysts expect in the weeks ahead as everybody tries to discern where the economy is heading.
[21480015] |This kind of jumpy uncertainty reminds John Calverley, senior economist for American Express Bank, of the 1969-72 period, when the industrial average rolled through huge ranges and investors flocked to the shares of companies with proven earnings records, which became known as the "nifty 50."

[21480016] |And they will again, say money-manager proponents of the growth-stock theme.
[21480017] |Cabanne Smith, president of a money management company bearing his name, predicts that investment companies using computers to identify companies with earnings "momentum" will climb on the growth-stock bandwagon as the overall corporate earnings outlook deteriorates further.
[21480018] |He also thinks foreign investors, who are showing signs of more discriminate investing, will join the pursuit and pump up prices.

[21480019] |"We're just seeing the beginning of a shift," Mr. Smith says.
[21480020] |Mr. Smith recommends Cypress Semiconductor that is currently showing a robust 63% earnings growth rate.

[21480021] |Ronald Sloan, executive vice president of Siebel Capital Management, likes Wellman Inc., a company that recycles plastic into synthetic fibers for carpeting.
[21480022] |Mr. Sloan praises the company as recession resistant and notes that it has an annual earnings growth rate of 32% a year over the past five years.
[21480023] |Wellman stock closed Friday at 39 3/8, up 1/8; Mr. Sloan thinks that in a year it could hit 60.

[21480024] |Others preach the gospel of buying only blue-chip growth stocks.
[21480025] |Carmine Grigoli, chief market strategist for First Boston, who still says, "We expect the Dow average {to be at} 3000 by mid-1990," nonetheless foresees a sluggish economy in the meantime.
[21480026] |He recommends such blue-chip growth stalwarts as Philip Morris, PepsiCo, CPC International, Reebok International, and Limited Inc.
[21480027] |All have a fiveyear earnings growth rate of more than 20% a year.

[21480028] |Some money managers are pursuing growth stocks at the expense of those that rise and fall along with the economic cycle.
[21480029] |"One of the stories of the fourth quarter is that we will get an unusual number of earnings disappointments from companies sensitive to the economy," says Mr. Boesel of T. Rowe Price.

[21480030] |James Wright, chief investment officer for Banc One Asset Management, says, "We've been selling a disproportionate share of cyclical companies and buying a disproportionate share of high earnings stocks."
[21480031] |He recently trimmed his portfolio of International Paper, Dow Chemical, Quantum Chemical, International Business Machines and Digital Equipment.
[21480032] |He is putting money in Dress Barn, Circuit City Stores, Bruno's, and Rubbermaid.

[21480033] |Big cyclical companies are using "all the tricks they can to stabilize earnings," says Mr. Sloan.
[21480034] |He cites IBM, which reported a 30% earnings decline in the third quarter, and which last week announced a $1 billion buy-back of its shares.

[21480035] |"What they are telling you is that they don't have the ability to generate higher returns internally," says Mr. Sloan.
[21480036] |"When they are buying back stock at 10 times earnings, they are suggesting that the rate of return on competing internal projects is below" returns on the stock.
[21480037] |IBM says it considers its shares a good investment.

[21480038] |But not all strategists or money managers are ready to throw in the towel completely on cyclicals.
[21480039] |Growth stocks may underperform cyclical stocks next year if the Federal Reserve begins to let interest rates drift sufficiently lower to boost the economy.
[21480040] |Goldman Sachs's Mr. Einhorn, for one, subscribes to that scenario.
[21480041] |He suggests investors think about buying cyclical shares in the weeks ahead, as well as growth issues.

[21480042] |Friday's Market Activity

[21480043] |Stock prices finished about unchanged Friday in quiet expiration trading.

[21480044] |Traders anticipated a volatile session due to the October expiration of stock-index futures and options, and options on individual stocks.
[21480045] |But there were fewer price swings than expected.
[21480046] |Buy order imbalances on several big stocks were posted by the New York Stock Exchange.
[21480047] |But block trading desks and money managers made a concerted effort to meet the imbalances with stock to sell, one trader said.

[21480048] |As a result, the Dow Jones Industrial Average drifted in narrow ranges in the final hour of trading, and closed 5.94 higher to 2689.14.
[21480049] |New York Stock Exchange volume was 164,830,000.
[21480050] |Advancers on the Big Board lagged decliners 662 to 829.

[21480051] |For the week, the industrial average gained 119.88 points, or 4.7%, the biggest weekly point advance ever and a better than 50% rebound from the 190.58 point loss the industrial average logged Oct. 13.

[21480052] |Broader market averages were little changed in the latest session.
[21480053] |Standard & Poor's 500-Stock Index gained 0.03 to 347.16, the Dow Jones Equity Market Index fell 0.02 to 325.50, and the New York Stock Exchange Composite Index fell 0.05 to 192.12.

[21480054] |Most of last week's surge in the industrial average came on Monday, when the average rose 88.12 points as market players snapped up blue-chip issues and shunned the broad market.

[21480055] |That contrast was reflected in the smaller weekly percentage gains recorded by the broader averages.
[21480056] |The S&P 500 rose 4%, the Dow Jones Equity Market index gained 3.7% and the New York Stock Exchange composite index added 3.5%.

[21480057] |The Dow Jones Transportation Average fell 32.71 to 1230.80 amid renewed weakness in the airline sector.

[21480058] |UAL skidded 21 5/8 to 168 1/2 on 2.2 million shares.
[21480059] |On the week, UAL was down nearly 40%.
[21480060] |The latest drop followed a decision by British Airways, which had supported the $300-a-share buy-out offer for UAL from a labor-management group, not to participate in any revised bid.
[21480061] |British Airways fell 1 to 31 7/8.

[21480062] |While most other airline issues took their cue from UAL, USAir Group rose 1 3/4 to 43 1/4 on 1.5 million shares amid speculation about a possible takeover proposal from investor Marvin Davis.
[21480063] |USA Today reported that Mr. Davis, who had pursued UAL before dropping his bid Wednesday, has acquired a stake of about 3% in USAir.
[21480064] |Unocal fell 1 1/2 to 52 1/4 and Burlington Resources declined 7/8 to 45 5/8.
[21480065] |At a meeting with analysts, British Petroleum officials dispelled speculation that the company may take over a U.S. oil company, according to Dow Jones Professional Investor Report.
[21480066] |Both Unocal and Burlington had been seen as potential targets for a British Petroleum bid.

[21480067] |Paper and forest-products stocks declined after Smith Barney, Harris Upham & Co. lowered investment ratings on a number of issues in the two sectors, based on a forecast that pulp prices will fall sharply.
[21480068] |International Paper dropped 5/8 to 51, Georgia-Pacific fell 1 3/4 to 56 1/4, Stone Container tumbled 1 1/2 to 26 5/8, Great Northern Nekoosa went down 5/8 to 38 3/8 and Weyerhaeuser lost 7/8 to 28 1/8.

[21480069] |Dun & Bradstreet dropped 3/4 to 51 1/8 on 1.9 million shares on uncertainty about the company's earnings prospects.
[21480070] |Merrill Lynch cut its rating and 1990 earnings estimate Thursday, citing weakness in its credit-rating business.

[21480071] |Lamson & Sessions, which posted sharply lower third-quarter earnings and forecast that results for the fourth quarter might be "near break-even," fell 1/2 to 9 1/4.

[21480072] |Winnebago Industries slid 5/8 to 5 1/4.
[21480073] |The company, which reported that its loss for the fiscal quarter ended Aug. 26 widened from a year earlier, cut its semiannual dividend in half in response to the earnings weakness.

[21480074] |MassMutual Corporate Investors fell 3 to 29 after declaring a quarterly dividend of 70 cents a share, down from 95 cents a share.

[21481001] |Stoneridge Resources Inc. said it will begin an offering of rights equivalent to 2.6 million common shares and valued at $22,750,000.

[21481002] |The Bloomfield Hills, Mich.-based real-estate holding company said it will offer the rights at $8.75 a share to shareholders of record on Oct. 26.
[21481003] |The offering is scheduled to expire on Nov. 30.
[21481004] |The company said it will use the proceeds of the offering for debt reduction and general corporate purposes, including acquisitions.

[21481005] |Stockholders may buy one share at the subscription price for every four shares of stock they own.
[21481006] |Stockholders who exercise all their rights may buy additional shares, the company said.
[21481007] |The company said it has an option to increase the offering by up to 350,000 shares.

[21482001] |The following U.S. Treasury, corporate and municipal offerings are tentatively scheduled for sale this week, according to Dow Jones Capital Markets Report: $15.6 billion three-month and six-month bills.

[21482002] |$10 billion of two-year notes.

[21482003] |Resolution Funding Corp. to sell $4.5 billion 30-year bonds.

[21482004] |Aim Prime Rate Plus Fund Inc. -- 10 million common shares, via PaineWebber Inc.

[21482005] |Allied Capital Corp. II -- 6,500,000 common shares, via Shearson Lehman Hutton Inc.

[21482006] |American Cyanamid Co. -- 1,250,000 common shares, via Merrill Lynch Capital Markets.

[21482007] |Associated Natural Gas Corp. -- 1,400,000 common shares, via Dillon Read & Co.

[21482008] |B & H Crude Carriers Ltd. -- Four million common shares, via Salomon Brothers Inc.

[21482009] |Baldwin Technology Co. -- 2,600,000 Class A shares, via Smith Barney, Harris Upham & Co.

[21482010] |Blockbuster Entertainment Corp. -- $250 million (face amount) Liquid Yield Option Notes, via Merrill Lynch.

[21482011] |Chemex Pharmaceuticals Inc. -- 1,200,000 units, via PaineWebber.

[21482012] |Immune Response Corp. -- Three million common shares, via Merrill Lynch.

[21482013] |Marsam Pharmaceuticals Inc. -- 1,300,000 common shares, via Smith Barney, Harris Upham.

[21482014] |RMI Titanium Co. -- 15 million common shares, via Salomon Brothers Inc.

[21482015] |Tidewater Inc. -- 4,631,400 common shares, via Salomon Brothers Inc.

[21482016] |Massachusetts -- Approximately $230 million of general bonds, consolidated loan of 1989, Series D, via competitive bid.

[21482017] |Montgomery County, Maryland -- $75 million of general consolidated public improvement bonds of 1989, Series B, via competitive bid.

[21482018] |Trinity River Authority, Texas -- $134,750,000 of regional wastewater system improvement revenue bonds, Series 1989, via competitive bid.

[21482019] |City and County of Honolulu, Hawaii -- $75 million of obligation bonds, 1989 Series B, due 1993-2009, via competitive bid.

[21482020] |Beverly Hills -- $110 million of civic center project certificates of participation, Series 1989, via a Goldman, Sachs & Co. group.

[21482021] |Broward County School District, Florida -- $185 million of school district general bonds, via a First Boston Corp. group.

[21482022] |Connecticut Housing Finance Authority -- $132,620,000 of housing mortgage revenue (AMT and non-AMT) bonds, via a PaineWebber group.

[21482023] |Maryland Stadium Authority -- $137,550,000 of sports facilities lease revenue Alternative Minimum Tax (AMT) bonds, Series 1989 D, via a Morgan Stanley & Co. group.

[21482024] |Michigan -- $80 million of Michigan First general bonds, including $70 million of environmental protection project bonds and $10 million of recreation project bonds, via a Shearson Lehman Hutton group.

[21482025] |West Virginia Parkways Economic Development and Tourism Authority -- $143 million of parkway revenue bonds, Series 1989, via a PaineWebber group.
[21482026] |San Antonio, Texas -- $640 million of gas and electric revenue refunding bonds, via a First Boston group.

[21483001] |MCI COMMUNICATIONS Corp. said it filed a shelf registration with the Securities and Exchange Commission for issuance of as much as $750 million of debt securities.
[21483002] |The debt will include medium-term notes sold through Merrill Lynch Capital Markets; Drexel Burnham Lambert Inc.; Goldman, Sachs & Co. and Salomon Brothers Inc.
[21483003] |The funds will be used for refinancing existing debt of the Washington, D.C., concern at lower interest rates and for other general purposes.
[21483004] |The effective date of the registration is to be determined by the SEC.

[21484001] |A group including ESL Partners Ltd., a Fort Worth, Texas, investment partnership, and Richard E. Rainwater, a former adviser to the Fort Worth Bass family, said it reduced its stake in Anacomp Inc. to 3.6% of the common shares outstanding.

[21484002] |In a filing with the Securities and Exchange Commission, the group said it sold 1,325,900 Anacomp common shares from Aug. 31 to last Wednesday for $4.48 to $5.84 a share, resulting in a drop in its holdings to 1,351,662 shares.

[21484003] |No reason was given in the filing for the sales.

[21484004] |An Anacomp official said the Indianapolis computer-services concern had no comment on the group's share sales.

[21484005] |In March, the group disclosed it held a 7.2% stake in Anacomp for investment purposes.
[21484006] |It said then it had had and would continue to have discussions with Anacomp's management concerning its investment.

[21485001] |Home Beneficial Corp., Richmond, Va., said it contracted to sell its 50% interest in a Richmond-area shopping mall to a buyer that wasn't identified.
[21485002] |The life-insurance holding company said the sale would result in an after-tax gain of about $32 million, or $3.09 a share, in the first quarter of

[21485003] |The company also said it will adopt new accounting standards in the first quarter.
[21485004] |The change will result in a charge of about $8.5 million, or 82 cents a share, because of an increase in deferred income-tax liability.

[21485005] |In the first quarter of 1988, the company earned $10 million, or 94 cents a share.

[21486001] |Following is a weekly listing of unadited net asset values of publicly traded investment fund shares, reported by the companies as of Friday's close.
[21486002] |Also shown is the closing listed market price or a dealer-to-dealer asked price of each fund's shares, with the percentage of difference.

[21486003] |Closed End Bond Funds

[21486004] |Flexible Portfolio Funds

[21486005] |Specialized Equity and Convertible Funds

[21486006] |a-Ex-dividend.
[21486007] |b-As of Thursday's close.
[21486008] |c-Translated at Commercial Rand exchange rate.
[21486009] |e-In Canadian dollars.
[21486010] |f-As of Wednesday's close.

[21487001] |A shareholder filed suit, seeking to block Unitel Video Inc.'s proposed plan to be acquired by a new affiliate of closely held Kenmare Capital Corp. for $15 a share, or $33.6 million.

[21487002] |The suit, which seeks class-action status, was filed in Delaware Chancery Court.
[21487003] |The complaint alleges that the price is "unfair and grossly inadequate" and that the defendants are seeking to ensure a "lockup" of the purchase of Unitel, thereby discouraging other bids.
[21487004] |It seeks unspecified money damages.
[21487005] |The New York company called the lawsuit without merit.

[21487006] |Shareholders are scheduled to vote on the transaction Nov.

[21488001] |This Toronto closed-end fund cut the annual dividend on its Class A common shares to one Canadian cent from 10 Canadian cents.
[21488002] |The fund invests mainly in gold and silver bullion.
[21488003] |It said the reduced dividend reflects the low price for precious metals.
[21488004] |Greg Davies, Central Fund's vice president, finance, said losses for the fiscal year ending Oct. 31 could be as high as one million Canadian dollars (US$852,000).
[21488005] |The fund last had a profit in 1985.
[21488006] |The new dividend rate is payable Nov. 15 to holders of record Oct. 31.
[21488007] |In American Stock Exchange composite trading Friday, Central Fund was unchanged at $4.6875 a share.

[21489001] |Comair Holdings Inc. said in Cincinnati that it bought Airline Aviation Academy, a pilot training school based at Sanford Regional Airport near Orlando, Fla.
[21489002] |Comair said it paid cash but declined to disclose the price.

[21489003] |Comair Holdings is the parent of Comair Inc., a regional air carrier.

[21489004] |Airline Aviation, which has annual revenue of $5 million to $6 million, has great growth potential because of the large number of U.S. pilots nearing retirement age, Comair said.
[21489005] |The unit will be renamed Comair Aviation Academy and will continue to be headed by Scott Williams, a son of its founder, Comair said.

[21490001] |The collapse of a $6.79 billion buy-out of United Airlines parent UAL Corp. has handed Wall Street's takeover stock speculators their worst loss ever on a single deal.

[21490002] |Their $700 million-plus in estimated paper losses easily tops the $400 million in paper losses the takeover traders, known as arbitragers, suffered in 1982 when Gulf Oil Co. dropped a $4.8 billion offer for Cities Service Co.

[21490003] |In the six trading days since the UAL labor-management buy-out group failed to get bank financing, culminating Friday with the withdrawal of its partner British Airways PLC, UAL stock has plummeted by 41% to 168 1/2 from 285 1/4.

[21490004] |The arbs may recoup some of their paper losses if the UAL deal gets patched up again, as they did in 1982 when Occidental Petroleum Co. rescued them with a $4 billion takeover of Cities Service.

[21490005] |In the meantime, the question faced by investors is: What is UAL stock worth?

[21490006] |The short answer, on a fundamental basis, is that airline analysts say the stock is worth somewhere between $135 and $150 a share.
[21490007] |That's based on a multiple of anywhere between 8.5 to 10 times UAL earnings, which are estimated to come in somewhere around $16 a share this year.

[21490008] |Airline stocks typically sell at a discount of about one-third to the stock market's price-earnings ratio -- which is currently about 13 times earnings.
[21490009] |That's because airline earnings, like those of auto makers, have been subject to the cyclical ups-and-downs of the economy.

[21490010] |That analysis matches up with stock traders' reports that, despite the huge drop in the stock, UAL hasn't returned to the level at which it could attract buying by institutions solely on the basis of earnings.

[21490011] |So anyone buying the stock now is betting on some special transaction such as a recapitalization or takeover, and must do so using some guesswork about the likelihood of such an event.

[21490012] |One analyst, who asked not to be identified, said he believes that the UAL pilots and management can put together a bid "in the $225 area," but that it could take three to four months to close.
[21490013] |At that level, and given the uncertainty, he believes UAL stock should trade closer to

[21490014] |Other observers note that UAL's board, having accepted a bid of $300 a share, might hold out for a new bid much closer to the original level -- even if it means that the management goes back to running the company for a while and lets things return to normal.
[21490015] |By that logic, the closing of a deal could be much further away than three to four months, even though the eventual price might be higher.

[21490016] |Investment bankers following UAL agree that the strongest impetus for an eventual deal is that the pilots have been attempting a buy-out for more than two years, and aren't likely to stop, having come so close to success.

[21490017] |The pilots have a strong financing tool in their willingness to cut their annual compensation by $200 million, and to commit $200 million from their retirement funds.
[21490018] |On Friday, they also persuaded the UAL flight attendants to join them.

[21490019] |However, investment bankers say that banks aren't likely to lend the almost $5 billion that would be necessary for a takeover even at a lower price without someone putting up a hefty wad of cash -- probably even greater than the 17% in cash put up by investors in the leveraged takeover of Northwest Airlines parent NWA Corp. in July.

[21490020] |Banks want to see someone putting up real cash at risk, that is, subordinate to the bank debt in any deal.
[21490021] |That way, they figure, someone else has an even stronger motivation to make sure the deal is going to work, because they would be losing their money before the banks lost theirs.

[21490022] |Banks also want to be able to call someone on the telephone to fix a problem with a deal that goes bad -- preferably someone other than a union leader.

[21490023] |That leaves the pilots still in need of cash totaling around $1 billion -- far more than either they or the flight attendants can lay their hands on from retirement funds alone.

[21490024] |One obstacle to the pilots' finding such a huge amount of cash is their insistence on majority ownership.
[21490025] |Investors such as Marvin Davis of Los Angeles who have sought airline ownership this year have insisted they, not the pilots, must have control.

[21490026] |One way out of that dilemma could be a partial recapitalization in which the pilots would wind up sharing the value of their concessions with public shareholders.
[21490027] |The pilots could borrow against the value of their concessions, using the proceeds to buy back stock from the public and give themselves the majority control they have been seeking.

[21490028] |But it isn't clear that banks would lend sufficient money to deliver a big enough price to shareholders.
[21490029] |The lack of any new cash probably would still leave the banks dissatisfied.
[21490030] |In advising the UAL board on the various bids for the airline, starting with one for $240 a share from Mr. Davis, the investment bank of First Boston came up with a wide range of potential values for the company, depending on appraisal methods and assumptions.

[21490031] |Using the the NWA takeover as a benchmark, First Boston on Sept. 14 estimated that UAL was worth $250 to $344 a share based on UAL's results for the 12 months ending last June 30, but only $235 to $266 based on a management estimate of results for 1989.
[21490032] |First Boston's estimates had been higher before management supplied a 1989 projection.

[21490033] |Using estimates of the company's future earnings under a variety of scenarios, First Boston estimated UAL's value at $248 to $287 a share if its future labor costs conform to Wall Street projections; $237 to $275 if the company reaches a settlement with pilots similar to one at NWA; $98 to $121 under an adverse labor settlement, and $229 to $270 under a pilot contract imposed by the company following a strike.

[21490034] |And using liquidation value assuming the sale of all UAL assets, First Boston estimated the airline is worth $253 to $303 a share.

[21490035] |Unfortunately, all those estimates came before airline industry fundamentals deteriorated during the past month.
[21490036] |American Airlines parent AMR and USAir Group, both subject to takeover efforts themselves, have each warned of declining results.

[21490037] |Some analysts don't expect a quick revival of any takeover by the pilots.
[21490038] |The deal has, as one takeover expert puts it, "so many moving parts.
[21490039] |I don't see anybody who's sophisticated getting his name associated with this mess until the moving parts stop moving."

[21490040] |In addition to the need for another cash equity investor, the other moving parts include: the pilots themselves, who can scuttle rival deals by threatening to strike; the machinists union, the pilots' longtime rivals who helped scuttle the pilots' deal; and regulators in Washington, whose opposition to foreign airline investment helped throw the deal into doubt.

[21490041] |In the meantime, the arbs are bleeding.
[21490042] |Wall Street traders and analysts estimate that takeover stock traders own UAL stock and options equal to as many as 6.5 million shares, or about 30% of the total outstanding.
[21490043] |Frank Gallagher, an analyst with Phoenix Capital Corp. in New York, estimates that the arbs paid an average of about $280 a share for their UAL positions.
[21490044] |That would indicate that the arbs have paper losses on UAL alone totalling $725 million.

[21490045] |UAL Corp. (NYSE; Symbol: UAL)

[21490046] |Business: Airline

[21490047] |Year ended Dec. 31, 1988:

[21490048] |Sales: $8.98 billion

[21490049] |Net income*: $599.9 million; or $20.20 a share

[21490050] |Second quarter, June 30, 1989: Per-share earnings: $6.52 vs. $5.77

[21490051] |Average daily trading volume: 881,969 shares

[21490052] |Common shares outstanding: 21.6 million

[21491001] |Eastern Enterprises, bolstered by improved tonnages in its marine-shipping unit, had a narrower third-quarter net loss of $1.1 million, or five cents a share.

[21491002] |Last year, Eastern had a quarter loss of $1.7 million, or eight cents a share.

[21491003] |Quarter revenue rose 44% to $160.1 million from $111.2 million a year ago.

[21491004] |The Weston, Mass., utilities and marine-transport concern said results for the third quarter, usually a money-losing one because of the seasonality of the gas business, were also aided by higher gas sales and the May 1989 acquisition of Water Products Company.

[21491005] |For the nine months, Eastern had net income of $41.8 million, or $1.80 a share, up 23% from $33.9 million or $1.46 a share a year ago.
[21491006] |Revenue grew 24% to $614.5 million from $497.1 million.

[21492001] |Convex Computer Corp., continuing its rapid growth while other computer companies falter, reported an 87% increase in third-quarter net income from a year earlier and a 50% increase in revenue.

[21492002] |Net was $3.1 million, or 16 cents a share, up from $1.6 million, or nine cents a share.
[21492003] |Revenue was $41.2 million, up from $27.5 million.

[21492004] |For the nine months, net was $7.7 million, or 41 cents a share, up 97% from $3.9 million, or 22 cents a share, a year earlier.
[21492005] |Revenue was $111.9 million, up 50% from $74.8 million.

[21492006] |Convex makes supercomputers that sell for up to $2 million and has an installed base of more than 550 systems and 340 customers world-wide.
[21492007] |During the third quarter, it said, it won several significant contracts, including a five-year contract with the National Institutes of Health valued at an estimated $8 million.

[21492008] |Earlier this month, Convex made a bid to outflank other supercomputer competitors like Digital Equipment Corp. and International Business Machines Corp. by adopting an open set of standards and introducing new hardware and software to link different systems.
[21492009] |The new products allow customers to add Convex machines to established systems made by other manufacturers, which "opens up a phenomenal market for us," said Robert J. Paluck, Convex's chairman, president and chief executive.

[21492010] |Convex also recently agreed to use Posix, a standard for the computer language called UNIX.
[21492011] |Posix is one of three or four versions of UNIX, but it is increasingly required by the federal government as it tries to standardize its computer systems.
[21492012] |Most other supercomputer manufacturers have yet to adopt the Posix standard, Mr. Paluck said, adding that they prefer to maintain proprietary systems that lock in customers.

[21492013] |"They want a lobster trap -- once you get in, you can't get out," he said.
[21492014] |"But the customer doesn't want that."

[21492015] |Convex closed in over-the-counter trading on Friday at $15.375 a share, down 12.5 cents.

[21493001] |Troubled Saatchi & Saatchi Co. has attracted offers for some of its advertising units, with potential suitors including Interpublic Group, but has rejected them, people familiar with the company said.

[21493002] |Industry executives said Interpublic approached Saatchi in August about buying its Campbell-Mithun-Esty unit, but was turned down by Chairman Maurice Saatchi.
[21493003] |More recently, Interpublic inquired about one of Saatchi's smaller communications companies -- identified as the Rowland public relations firm by several industry executives -- but again was rebuffed, they said.
[21493004] |Interpublic's chairman and chief executive officer, Philip Geier Jr., made the pitches in visits to Mr. Saatchi in London, the executives said.

[21493005] |A Saatchi spokesman declined to comment about Interpublic.
[21493006] |But the spokesman confirmed that Saatchi has received several inquiries from companies interested in acquiring its Campbell-Mithun and Rowland units.
[21493007] |He added, "We have no intention of selling either business."

[21493008] |Interpublic declined comment.

[21493009] |The offers come as Saatchi is struggling through the most troubled period in its 19-year history.
[21493010] |Takeover speculation has been rife, its consulting business is on the block, and its largest shareholder, Southeastern Asset Management, has said it's been approached by third parties regarding a possible restructuring.
[21493011] |Analysts have continually lowered their earnings estimates for the company, and their outlook, at least for the short term, is bleak.

[21493012] |In the midst of the current turmoil, Saatchi is attempting to shore up its ad businesses.
[21493013] |It named a new chief executive officer, former IMS International head Robert Louis-Dreyfus.
[21493014] |It rebuffed an offer by Carl Spielvogel, head of Saatchi's Backer Spielvogel Bates unit, to lead a management buy-out of all or part of Saatchi.
[21493015] |And last week, people close to Saatchi said Maurice Saatchi and his brother, Charles, would lead a buy-out if a hostile bid emerged.

[21493016] |But Saatchi's troubles have only whipped up interest among outsiders interested in picking off pieces of its ad businesses.
[21493017] |While Saatchi's major agency networks -- Backer Spielvogel and Saatchi & Saatchi Advertising -- would be difficult for any ad firm to buy because of potential client conflicts, its smaller businesses are quite attractive.

[21493018] |Campbell-Mithun-Esty, for example, has had big problems at its New York office, but offers strong offices in other areas of the country, including Minneapolis and Chicago.
[21493019] |That would would make it appealing to a network such as Interpublic that already has a healthy New York presence.
[21493020] |(While there would be some client conflicts, they wouldn't be nearly as onerous as with Saatchi's other agencies.)
[21493021] |Campbell-Mithun also would be a sizable addition to an agency network: It has billings of about $850 million and blue-chip clients including General Mills, Jeep/Eagle and Dow Brands.

[21493022] |Rowland, meanwhile, has expanded aggressively, and now ranks as the fifth-largest U.S. public relations firm, according to O'Dwyer's Directory of Public Relations Firms.
[21493023] |It would be attractive to an agency such as Interpublic, one of the few big agency groups without an affiliated public relations firm of its own.
[21493024] |Other Saatchi units include ad agency McCaffrey & McCall, which has the Mercedes account and which has been attempting to buy itself back; and Howard Marlboro, a sports and event marketing firm.

[21493025] |Despite Saatchi's firm stand against selling its ad units, U.S. analysts believe the company may ultimately sell some of the smaller units.
[21493026] |Mr. Louis-Dreyfus, in a recent interview, said he might sell "a marginal agency or office."
[21493027] |Analysts believe he may ultimately dispose of some of the non-advertising businesses.

[21493028] |Prudential's Final Four

[21493029] |Prudential Insurance Co. of America said it selected four agencies to pitch its $60 million to $70 million account.

[21493030] |In addition to Backer Spielvogel Bates, a Saatchi unit that has handled the account since 1970, the other agencies include Lowe Marschalk, a unit of the Lowe Group; Grey Advertising; and WPP Group's Scali, McCabe, Sloves agency.
[21493031] |All agencies are New York-based.

[21493032] |A spokesman for the insurance and financial services firm, based in Newark, N.J., said it hopes to make a decision within three to four months.

[21493033] |Jamaica Fires Back

[21493034] |The Jamaica Tourist Board, in the wake of Young & Rubicam's indictment on charges that it bribed Jamaican officials to win the account in 1981, released a scathing memo blaming the agency for the embarrassing incident.

[21493035] |The memo attempts to remove the tourist board as far as possible from the agency, which pleaded innocent to the charges.
[21493036] |Among other things, the memo contends that Young & Rubicam gave false assurances that the investigation wouldn't uncover any information that would "embarrass the government of Jamaica or the Jamaica Tourist Board."
[21493037] |It also contends that Young & Rubicam never told the tourist board about its relationship with Ad Ventures, a Jamaican firm hired by the agency.
[21493038] |The U.S. indictment charges Ad Ventures was a front used to funnel kickbacks to the then-minister of tourism.

[21493039] |The memo also chastises the agency for the timing of its announcement Thursday that it would no longer handle the $5 million to $6 million account.
[21493040] |The agency declined comment, but said it will continue work until a new agency is chosen.

[21493041] |Ad Notes. . . .

[21493042] |NEW ACCOUNT
[21493043] |: American Suzuki Motor Corp., Brea, Calif., awarded its estimated $10 million to $30 million account to Asher/Gould, Los Angeles.
[21493044] |Also participating in the finals was Los Angeles agency Hakuhodo Advertising America.
[21493045] |American Suzuki's previous agency, Keye/Donna/Pearlstein, didn't participate.

[21493046] |AYER TALKS:
[21493047] |N W Ayer's president and chief executive officer, Jerry J. Siano, said the agency is holding "conversations" about acquiring Zwiren Collins Karo & Trusk, a midsized Chicago agency, but a deal isn't yet close to being completed.

[21493048] |WHO'S NEWS:
[21493049] |John Wells, 47, former president and chief executive of N W Ayer's Chicago office, was named management director and director of account services at WPP Group's J. Walter Thompson agency in Chicago. . . .
[21493050] |Shelly Lazarus, 42, was named president and chief operating officer of Ogilvy & Mather Direct, the direct mail division of WPP Group's Ogilvy & Mather agency.

[21494001] |Grand Metropolitan PLC, the United Kingdom food and beverage group that owns Pillsbury Inc. of the U.S., announced a reshuffling of board-level executive duties intended to fit the company's recent expansion.

[21494002] |David Nash, formerly group finance director at Cadbury Schweppes PLC, will become Grand Met's first group finance director in January.

[21494003] |In a statement, Grand Met said its recent "growth and wider geographic spread" made it necessary to create the new position.

[21494004] |The company also reassigned several executive responsibilities.
[21494005] |David Tagg, formerly in charge of gambling operations, was appointed chief executive for retailing and property.
[21494006] |Peter Cawdron, group strategy development director, and Bill Shardlow, group personnel director, will become part of the board's management committee.

[21495001] |David Baltimore, who has just been named president of Rockefeller University, already knows what it's like to go through life with "Nobel laureate" appended to one's name.
[21495002] |He is currently experiencing what it's like to have the phrase, "under investigation for scientific fraud," also attached to his name.
[21495003] |The Nobel committee made the first addition; John Dingell's congressional committee created the second.

[21495004] |Both of Dr. Baltimore's public faces have been on view the past few weeks while he was under consideration to succeed Joshua Lederberg as head of the prestigious Rockefeller research institution.
[21495005] |It came to light that a substantial number of Rockefeller's faculty were upset over or even opposed to Dr. Baltimore's impending appointment.

[21495006] |They were disturbed at what they regarded as Dr. Baltimore's confrontational attitude toward the Dingell committee, which held hearings on a dispute over the lab notebooks of a researcher who had co-authored a scientific paper with Dr. Baltimore.
[21495007] |Readers of these columns ("The Science Police," May 15) will recall that Dr. Baltimore was merely the most well-known part of the Dingell committee's larger investigation, which touched MIT, Tufts, Duke, the National Institutes of Health and elsewhere.
[21495008] |Rep. Dingell even managed to enlist the services of the Secret Service in his investigation of the Baltimore paper.

[21495009] |Insofar as Mr. Dingell has a special interest in NIH and the institutions that receive its funding, the Rockefeller scientists were no doubt discomfited by Dr. Baltimore's unflattering public opinion of this congressional patron, whose behavior reminded Dr. Baltimore of the McCarthy era.

[21495010] |This well may be the first time that the venerable Rockefeller University has brushed up publicly against the intimidations now common in American science.
[21495011] |John Dingell demagogues a David Baltimore, animal-rights activists do $3.5 million of damage to labs at the U.Cal-Davis, Meryl Streep decries the horrors of chemistry on talk shows, Jeremy Rifkin files lawsuits in federal court to thwart biotech experiments, and Dutch-elm-disease researcher Gary Strobel's own colleagues at Montana State denounce him for "violating" EPA rules.

[21495012] |Scientists are mistaken who still think that the anti-science movement in this country isn't their concern or that a David Baltimore could have somehow placated a John Dingell.
[21495013] |(Mr. Dingell, by the way, has decreed another NIH investigation of the Baltimore paper, adding to several previous investigations.
[21495014] |Something other than what most scientists would recognize as the truth is being sought here.)

[21495015] |Fortunately, there are signs that increasing numbers of scientists understand the necessity of speaking out.
[21495016] |David Hubel, a Nobel laureate at Harvard, has taken the lead in defending research with animals, as has Dr. Michael DeBakey.
[21495017] |NASA defended itself vigorously and successfully against a Rifkin suit to block the Galileo launch.

[21495018] |Scientists need to understand that while they tend to believe their work is primarly about establishing new knowledge or doing good, today it is also about power.
[21495019] |In a media-linked world, scientists may earn wide praise and even Nobels for their work, but they also attract the attention of people who wish to gain control over the content, funding and goals of that work.
[21495020] |When a David Baltimore -- or the next target -- decides it is better to stand up to these forces, his fellow scientists would do well to recognize what is fundamentally at stake, and offer their public support.

[21496001] |Wisconsin Toy Co. said it definitively agreed to acquire closely held Everything's a Dollar Inc. of Virginia Beach, Va., for stock currently valued at about $4.7 million.

[21496002] |The Milwaukee toy retailer said the agreement calls for Everything's a Dollar holders to receive for their holdings a total of 354,600 newly issued Wisconsin Toy shares.
[21496003] |Wisconsin Toy currently has about 4.7 million shares outstanding.

[21496004] |A company official said Arthur Borie, until January chief operating officer of Pic 'N Save Inc., will buy a 20% stake in the new Wisconsin Toy subsidiary, and will act as head of Everything's a Dollar.

[21496005] |Wisconsin Toy has 71 retail stores, primarily in discount settings.
[21496006] |Everything's a Dollar operates 60 specialty-retail stores.

[21497001] |While welcoming Nicholas McInnes's Sept. 18 letter offering corrections to your "World-Wide Tax Revolution" table (editorial page, Aug. 29), I am surprised that he neglected other errors that, for some of us, strike close to home.

[21497002] |As a Channel Islander, I was amazed to see my birthplace listed as one of "86 countries with an income tax."
[21497003] |Despite a history of heated local debate on the topic, my passport clearly reads "British citizen."
[21497004] |Whether Mr. McInnes's oversight is merely a sign of a mainlander's benign neglect is a question my fellow Channel Islanders (and friends on the Isle of Man) will continue to ponder.

[21497005] |Patrick Basham

[21498001] |Roland J. Hawkins, chairman of Jet Vacations Inc., was elected to the board of this cruise line.
[21498002] |The board expands to seven members.

[21499001] |Ducks.
[21499002] |If the White House spots one, it intends to fire a veto at it.

[21499003] |Ducks are this season's word for new taxes, under OMB Director Richard Darman's formulation that "if it looks like a duck, walks like a duck and quacks like a duck, it's a duck."
[21499004] |George Bush is quite clear: No new ducks.

[21499005] |But what about all those non-duck ducks flapping over Washington?
[21499006] |We see a whole flock of programs that will impose significant costs on the American economy in the form of burdensome regulation and higher liabilities.
[21499007] |Federal child care (quack).
[21499008] |The Clean Air bill (quack).
[21499009] |The disabled-workers bill (quack, quack).

[21499010] |The Bush White House is breeding non-duck ducks the same way the Nixon White House did: It hops on an issue that is unopposable -- cleaner air, better treatment of the disabled, better child care.
[21499011] |It comes up with a toned-down version of a Democratic proposal.
[21499012] |The bill gets signed into law and then the administration watches helplessly, wondering where all the "unexpected" costs came from.

[21499013] |Consider, for instance, the very fat fowl known as federalized child care.
[21499014] |The President came up with a good bill, but now may end up signing the awful bureaucratic creature hatched on Capitol Hill.
[21499015] |It would create 38,000 local day-care commissions, answerable to the Department of Health and Human Services.
[21499016] |They'd determine where parents could store their kids during the day, and they'd regulate the storage facilities.
[21499017] |The initial costs are said to be in the $2 billion a year range, but that's only the beginning.
[21499018] |New entitlements tend to grow, creating a rationale for new taxes.
[21499019] |Quack.

[21499020] |The administration claims that its Clean Air bill will cost businesses between $14 billion and $19 billion annually, but economist Michael Evans estimates that the costs for firms will actually be in the $60 billion a year range.

[21499021] |The House bill also distorts economic efficiency in all sorts of perverse ways.
[21499022] |For example, the administration proposal imposes extremely tough emissions standards on new power plants.
[21499023] |So instead of building more efficient modern plants, utilities stick scrubbers on the old plants.
[21499024] |The money spent on scrubbers is diverted from planned research on new, cleaner technology.

[21499025] |The bill also imposes the California auto-emissions standards on all cars nationwide, as if a car registered in Big Sky, Montana, needed to be as clean as one driven in Los Angeles.
[21499026] |Proponents of the nationwide standards say the cost for car buyers would be about $500 per car.
[21499027] |Other analysts say that estimate is low.
[21499028] |Quack.

[21499029] |Nobody knows how many billions of dollars the Americans With Disabilities Act will cost, because nobody knows what the bill entails.
[21499030] |It is an intentionally vague document that will create a wave of litigation.
[21499031] |Judges will write the real bill as suits roll through the courts.
[21499032] |Lawyers will benefit.
[21499033] |Private companies, and ultimately their customers, will end up footing the huge bill.

[21499034] |The effect of Nixon era non-duck ducks was an economy clogged up with regulations and distortions.
[21499035] |All this was recognized and documented in the succeeding years by economists, some of whom worked in the Reagan administration to lift this burden from the American people, states and local governments.

[21499036] |Running for President in 1980 and 1988, George Bush also persuasively diagnosed the economic stagnation of the 1970s.
[21499037] |In fact, during last year's campaign, the entire nation constantly heard Mr. Bush tout his accomplishments as head of the Task Force on Regulatory Relief.

[21499038] |"Government continues to inhibit the productivity of our citizenry and the international competitiveness of American business," the vice president declared when he was head of the task force.

[21499039] |But with the impending passage of these new programs, Mr. Bush will surely be sending many people hurtling back into the regulatory thicket that he had helped cut back.
[21499040] |By 1986, the number of federal regulators was down to about 103,000.
[21499041] |Then it turned up, and by one estimate the number will be up to about 109,000 regulators by next year.

[21499042] |Holding the dam on taxes is the most important task of the Bush presidency.
[21499043] |We would have thought by now, though, that there was a significant core of people involved in government life who understood that direct taxation isn't the only way to slow down an economy.
[21499044] |It is merely the most obvious.
[21499045] |What is even more ironic is that all over the world nations are learning that well-intentioned public programs often backfire.
[21499046] |But while they are unloading these burdens, the United States is close to creating three more big ones.

[21499047] |The Bush administration ought to be setting aside some of its buckshot for the non-duck ducks.