Rockwell International Corp. 's Tulsa unit said it signed a tentative agreement extending its contract with Boeing Co. to provide structural parts for Boeing 's 747 jetliners .
Rockwell said the agreement calls for it to supply 200 additional so-called shipsets for the planes .
These include , among other parts , each jetliner 's two major bulkheads , a pressure floor , torque box , fixed leading edges for the wings and an aft keel beam .
Under the existing contract , Rockwell said , it has already delivered 793 of the shipsets to Boeing .
Rockwell , based in El Segundo , Calif. , is an aerospace , electronics , automotive and graphics concern .
Frank Carlucci III was named to this telecommunications company 's board , filling the vacancy created by the death of William Sobey last May .
Mr. Carlucci , 59 years old , served as defense secretary in the Reagan administration .
In January , he accepted the position of vice chairman of Carlyle Group , a merchant banking concern .
SHEARSON LEHMAN HUTTON Inc .
Thomas E. Meador , 42 years old , was named president and chief operating officer of Balcor Co. , a Skokie , Ill. , subsidiary of this New York investment banking firm .
Balcor , which has interests in real estate , said the position is newly created .
Mr. Meador had been executive vice president of Balcor .
In addition to his previous real-estate investment and asset-management duties , Mr. Meador takes responsibility for development and property management .
Those duties had been held by Van Pell , 44 , who resigned as an executive vice president .
Shearson is about 60%-held by American Express Co .
Great American Bank , citing depressed Arizona real estate prices , posted a third-quarter loss of $ 59.4 million , or $ 2.48 a share .
A year earlier , the savings bank had earnings of $ 8.1 million , or 33 cents a share .
For the nine months , it had a loss of $ 58.3 million , or $ 2.44 a share , after earnings of $ 29.5 million , or $ 1.20 a share , in the 1988 period .
Great American said it increased its loan-loss reserves by $ 93 million after reviewing its loan portfolio , raising its total loan and real estate reserves to $ 217 million .
Before the loan-loss addition , it said , it had operating profit of $ 10 million for the quarter .
The move followed a round of similar increases by other lenders against Arizona real estate loans , reflecting a continuing decline in that market .
In addition to the increased reserve , the savings bank took a special charge of $ 5 million representing general and administrative expenses from staff reductions and other matters , and it posted a $ 7.6 million reduction in expected mortgage servicing fees , reflecting the fact that more borrowers are prepaying their mortgages .
Arbitragers were n't the only big losers in the collapse of UAL Corp. stock .
Look at what happened to UAL 's chairman , Stephen M. Wolf , and its chief financial officer , John C. Pope .
On a day some United Airlines employees wanted Mr. Wolf fired and takeover stock speculators wanted his scalp , Messrs. Wolf and Pope saw their prospective personal fortunes continue to plummet as shares of UAL , United 's parent company , dived $ 24.875 on the Big Board to close at $ 198 .
Including Monday 's plunge , that has given the two executives paper losses of $ 49.5 million , based on what they would have realized had the pilots and management-led buy-out of UAL gone through at $ 300 a share .
When bank financing for the buy-out collapsed last week , so did UAL 's stock .
Even if the banks resurrect a financing package at $ 250 a share , the two executives would still get about $ 25 million less than they stood to gain in the initial transaction .
Mr. Wolf owns 75,000 UAL shares and has options to buy another 250,000 at $ 83.3125 each .
In the $ 300-a-share buyout , that totaled about $ 76.7 million .
By yesterday 's close of trading , it was good for a paltry $ 43.5 million .
Of course , Mr. Wolf , 48 years old , has some savings .
He left his last two jobs at Republic Airlines and Flying Tiger with combined stock-option gains of about $ 22 million , and UAL gave him a $ 15 million bonus when it hired him .
His 1988 salary was $ 575,000 , with a $ 575,000 bonus .
The 40-year old Mr. Pope has n't changed jobs enough -- at least the right ones -- to stash away that kind of money .
United paid him a $ 375,000 bonus to lure him away from American Airlines , and he was paid a salary of $ 342,122 last year with a $ 280,000 bonus .
Mr. Pope owns 10,000 UAL shares and has options to buy another 150,000 at $ 69 each .
That came to a combined $ 37.7 million under the $ 300-a-share buy-out , but just $ 21.3 million at yesterday 's close .
Of the combined $ 114.4 million the two men were scheduled to reap under the buy-out , they agreed to invest in the buy-out just $ 15 million , angering many of the thousands of workers asked to make pay concessions so the buy-out would be a success .
United 's directors voted themselves , and their spouses , lifetime access to the Friendly Skies -- free first-class travel , and $ 20,000 a year for life as well .
Conceivably , in a scaled-back buy-out , they could be bumped back to coach seats for life .
Thomas H. Johnson , president of the Coatedboard division of Mead Corp. , was named president of Manville Forest Products Corp. , a Manville unit , and senior vice president of Manville Corp .
Mr. Johnson succeeds Harry W. Sherman , who resigned to pursue other interests , in both positions .
Manville is a building and forest products concern .
US Facilities Corp. said Robert J. Percival agreed to step down as vice chairman of the insurance holding company .
`` There was a difference of opinion as to the future direction of the company , '' a spokeswoman said .
Mr. Percival declined to comment .
In a statement , US Facilities said Mr. Percival 's employment contract calls for him to act as a consultant to the company for two years .
He will also remain a director , US Facilities said , but wo n't serve on any board committees .
Mr. Percival will be succeeded on an interim basis by George Kadonada , US Facilities chairman and president .
In the same statement , US Facilities also said it had bought back 112,000 of its common shares in a private transaction .
Terms were n't disclosed .
The buy-back represents about 3 % of the company 's shares , based on the 3.7 million shares outstanding as of Sept. 30 .
In national over-the-counter trading yesterday , US Facilities closed at $ 3.625 , unchanged .
Three leading drug companies reported robust third-quarter earnings , bolstered by strong sales of newer , big-selling prescriptions drugs that provide hefty profit margins .
Merck & Co. reported a 25 % increase in earnings ; Warner-Lambert Co. 's profit rose 22 % and Eli Lilly & Co. 's net income rose 24 % .
The results were in line with analysts ' expectations .
Merck & Co .
Merck , Rahway , N.J. , continued to lead the industry with a strong sales performance in the human and animal health-products segment .
A stronger U.S. dollar reduced third-quarter and first-nine-month sales growth 2 % and 3 % , respectively .
International sales accounted for 47 % of total company sales for the nine months , compared with 50 % a year earlier .
Sales for the quarter rose to $ 1.63 billion from $ 1.47 billion .
Mevacor , Merck 's new cholesterol-lowering drug , had higher sales than any other prescription medicine has ever achieved in the U.S. in the year following introduction , the company said .
The drug was introduced in West Germany this year .
Intense competition , however , led to unit sales declines for a group of Merck 's established human and animal-health products , including Aldomet and Indocin .
In New York Stock Exchange composite trading yesterday , Merck shares closed at $ 75.25 , up 50 cents .
Warner-Lambert Co .
Warner-Lambert , Morris Plains , N.J. , reported sales that were a record for any quarter and the eighth quarter in a row of 20 % or more per-share earnings growth .
Spurred by growth in world-wide sales of the company 's prescription drugs , Warner-Lambert said 1989 will be the best year in its history , with per-share earnings expected to increase more than 20 % to about $ 6.10 .
Sales for the quarter rose to $ 1.11 billion from $ 1.03 billion .
Prescription-drug world-wide sales rose 9 % in the quarter to $ 340 million ; U.S. sales rose 15 % .
The segment 's growth was led by sales of the cardiovascular drugs Lopid , a lipid regulator , and Dilzem , a calcium channel blocker .
World-wide sales of Warner-Lambert 's non-prescription health-care products , such as Halls cough tablets , Rolaids antacid , and Lubriderm skin lotion , increased 3 % to $ 362 million in the third quarter ; U.S. sales rose 5 % .
Confectionery products sales also had strong growth in the quarter .
World-wide sales of Trident gum , Certs breath mints , and Clorets gum and breath mints , increased 12 % to $ 277 million .
Warner-Lambert shares closed at $ 109.50 a share , up $ 1.50 , in Big Board composite trading yesterday .
Eli Lilly & Co .
Lilly attributed record third-quarter and nine-month results to world-wide gains for pharmaceuticals , medical instruments and plant-science products despite poor exchange rates for the dollar that slowed sales abroad .
Earnings continued to pace sales because of a lower tax rate , profit from the renegotiation of the debt instrument received from Faberge Inc. in connection with Lilly 's sale of Elizabeth Arden Inc. in 1987 , and net proceeds from the settlement of patent litigation at Lilly 's Hybritech Inc. unit .
Third-quarter sales of the Indianapolis , Ind. , company rose 11 % to $ 1.045 billion from $ 940.6 million .
Nine-month sales grew 12 % to $ 3.39 billion from $ 3.03 billion a year earlier .
Sales of Prozac , an anti-depressant , led drug-sales increases .
Higher sales of pesticides and other plant-science products more than offset a slight decline in the sales of animal-health products to fuel the increase in world-wide agricultural product sales , Lilly said .
Advanced Cardiovascular Systems Inc. and Cardiac Pacemakers Inc. units led growth in the medical-instrument systems division .
Lilly shares closed yesterday in composite trading on the Big Board at $ 62.25 , down 12.5 cents .
Reuben Mark , chairman of Colgate-Palmolive Co. , said he is `` comfortable '' with analysts ' estimates that third-quarter earnings rose to between 95 cents and $ 1.05 a share .
That compares with per-share earnings from continuing operations of 69 cents the year earlier ; including discontinued operations , per-share was 88 cents a year ago .
The per-share estimates mean the consumer-products company 's net income , increased to between $ 69.5 million and $ 76 million , from $ 47.1 million the year-before period .
Analysts estimate Colgate 's world-wide third-quarter sales rose about 8 % to $ 1.29 billion .
Mr. Mark attributed the earnings growth to strong sales in Latin America , Asia and Europe .
Results were also bolstered by `` a very meaningful '' increase in operating profit by Colgate 's U.S. business , Mr. Mark said .
Operating profit at Colgate 's U.S. household products and personal-care businesses jumped 25 % in the quarter , Mr. Mark added .
He said the improvement was a result of cost savings achieved by consolidating manufacturing operations , blending two sales organizations and focusing more carefully the company 's promotional activities .
The estimated improvement in Colgate 's U.S. operations took some analysts by surprise .
Colgate 's household products business , which includes such brands as Fab laundry detergent and Ajax cleanser , has been a weak performer .
Analysts estimate Colgate 's sales of household products in the U.S. were flat for the quarter , and they estimated operating margins at only 1 % to 3 % .
`` If you could say their business in the U.S. was mediocre , but great everywhere else , that would be fine , '' says Bonita Austin , an analyst with Wertheim Schroder & Co .
`` But it 's not mediocre , it 's a real problem . ''
Mr. Mark conceded that Colgate 's domestic business , apart from its highly profitable Hill 's Pet Products unit , has lagged .
`` We 've done a lot to improve { U.S. . } results , and a lot more will be done , '' Mr. Mark said .
`` Improving profitability of U.S. operations is an extremely high priority in the company . ''
To focus on its global consumer-products business , Colgate sold its Kendall health-care business in 1988 .
H. Anthony Ittleson was elected a director of this company , which primarily has interests in radio and television stations , increasing the number of seats to five .
Osborn also operates Muzak franchises , entertainment properties and small cable-television systems .
Mr. Ittleson is executive , special projects , at CIT Group Holdings Inc. , which is controlled by Manufacturers Hanover Corp .
The Boston Globe says its newly redesigned pages have a `` crisper '' look with revamped fixtures aimed at making the paper `` more consistent '' and `` easier to read . ''
Maybe so -- if you can find where your favorite writer went .
Beantown scribes , who spare no invective when taking on local luminaries such as Michael `` Pee Wee '' Dukakis , or New England Patriots Coach Raymond `` Rev. Ray '' Berry , yesterday poured ridicule on new drawings of Globe columnists that replaced old photos in the revamped pages this week .
By late last night , Globe Managing Editor Thomas Mulvoy , bending to the will of his troops , scrapped the new drawings .
For a few days at least , he says , no pictures or drawings of any kind will adorn the columns .
Trouble was , nobody thought they looked right .
Globe columnist Mike Barnicle -- in the second attack on his employer in as many weeks -- averred that his shadowy countenance was so bad , it looked `` like a face you 'd find on a bottle of miracle elixir that promises to do away with diarrhea in our lifetime . ''
Mr. Barnicle reminded readers that he still has n't forgiven Globe management for questioning a $ 20 expense chit he submitted for parking his car while chasing a story .
`` I thought { the drawing } a cross between someone you 'd spot whipping open his trench coat ... or a guy who boasted he 'd been Charles Manson 's roommate for the last 19 years , '' he said .
Mr. Barnicle was hardly kinder to the renderings of colleagues Michael Madden ( `` appears to be a pervert '' ) , Will McDonough ( `` looks as if he drove for Abe Lincoln '' ) or Bella English , whose `` little girl now screams hysterically every time she sees a newspaper . ''
Lynn Staley , the Globe 's assistant managing editor for design , acknowledges that the visages were `` on the low end of the likeness spectrum . ''
Rival Boston Herald columnist Howie Carr , who usually rails at Statehouse `` hacks '' and nepotism , argued that the new drawings were designed to hide Mr. Madden 's `` rapidly growing forehead '' and the facial defects of `` chinless '' Dan Shaughnessy , a Globe sports columnist .
`` But think of the money you , the reader , will save on Halloween , '' said Mr. Barnicle .
`` Instead of buying masks for your kids , just cut out the columnists ' pictures ... .
Deeply ingrained in both the book review `` Kissing Nature Good-bye '' by Stephen MacDonald ( Leisure & Arts , Sept. 27 ) and the books reviewed is the assumption that global warming is entirely a result of human activity .
Is such a view justified ?
In the absence of humans , would the Earth enjoy a constant climate over the long term ?
Clearly not .
About 20,000 years ago the last ice age ended .
Enormous ice sheets retreated from the face of North America , northern Europe and Asia .
This global warming must have been entirely natural -- nobody would blame it on a few hundred thousand hunter-gatherers hunting mammoths and scratching around in caves .
Furthermore , no bell has yet rung to announce the end of this immense episode of natural global warming .
It is probably continuing and may well account for most of , or all of , present-day global warming .
I bow to no one in my regard for our terrestrial heritage , but if we are serious about global warming we must look at the big picture and not allow the Dominant Culture to lock us into the capitalist-exploiters-greedy-American-consumers-global - warming scenario as the sole model for discussion .
Jocelyn Tomkin Astronomy Department University of
The Internal Revenue Service plans to restructure itself more like a private corporation .
In addition , the tax-collecting agency says that it will take the unusual step of looking to the private sector to fill two new high-level positions to guide the 120,000-employee agency : a comptroller to oversee daily finances and a chief information officer to update the information system , which includes probably the largest computer data base in the world .
The IRS also said that it would create the position of chief financial officer , who will be hired from within the agency .
IRS Commissioner Fred T. Goldberg said the changes are intended to bring `` accountability '' to the agency , which has an annual budget of more than $ 5 billion and collects about $ 1 trillion a year .
`` My assessment and everyone 's assessment is that we do not have the kinds of information that let us responsibly and effectively formulate and execute our budget , '' Mr. Goldberg said .
`` And we do n't have internal controls and discipline that we need to have to spend $ 5 billion properly . ''
Mr. Goldberg , who took over as head of the IRS in July , has been disturbed by what he considers the inefficiency , waste and lack of coordination among the branches of the vast federal agency .
The IRS operates on a computer system designed in 1961 , which it has been trying to modernize for years .
And the agency , which operated throughout fiscal 1989 with a $ 360 million budget shortfall , has been under a hiring freeze since last fall .
The new commissioner says that closer scrutiny of how the agency uses its resources will go a long way toward enhancing its ability to collect more tax revenue .
`` I think that you will see a significant improvement in the budget formulation and execution process which , in turn , I believe will result in a significant increase in revenue , '' he said .
The IRS hopes to fill the new positions soon .
Customarily , it would appoint career civil servants from within the agency , but Mr. Goldberg said he plans to `` scour the world '' for the chief information officer and the comptroller .
Although the jobs will probably pay between $ 70,000 and $ 80,000 a year , IRS officials are confident that they can attract top-notch candidates from the private sector .
`` You 're telling someone they can spend the next three or four or five or six years of their life bringing about the most difficult and costly modernization of an information system on the civil side ever , '' Mr. Goldberg said .
`` On the comptroller side , you 're developing and making work financial controls governing a $ 6 billion budget .
When Maj. Moises Giroldi , the leader of the abortive coup in Panama , was buried , his body bore several gunshot wounds , a cracked skull and broken legs and ribs .
They were the signature of his adversary , Panamanian leader Manuel Antonio Noriega .
The rebel officer 's slow and painful death , at the headquarters of Panama 's Battalion-2000 squad , was personally supervised by Gen. Noriega , says a U.S. official with access to intelligence reports .
Leaping into rages , sinking into bouts of drunkenness and mistrust , Mr. Noriega has put to death some 70 of his troops involved in the coup , according to U.S. officials monitoring crematoriums and funeral parlors in Panama City .
He is now changing the place he sleeps every night , sometimes more than once a night .
His meals are most often prepared by women he trusts -- his full-time mistress , Vicky Amado , and her mother , Norma .
And he is collecting the names of those who telephoned the coup-makers to congratulate them during their brief time in control of his headquarters .
More enemies to be dealt with .
In the two weeks since the rebellion , which the U.S. hesitantly backed , Mr. Noriega has been at his most brutal - and efficient - in maintaining power .
Yet , while the failed coup is a major U.S. foreign policy embarrassment , it is merely the latest chapter in a byzantine relationship between Mr. Noriega and Washington that stretches back three decades .
America 's war on the dictator over the past two years , following his indictment on drug charges in February 1988 , is the legacy of that relationship .
Before American foreign policy set out to destroy Noriega , it helped create him out of the crucible of Panama 's long history of conspirators and pirates .
For most of the past 30 years , the marriage was one of convenience .
In 1960 , for example , when Mr. Noriega was both a cadet at an elite military academy in Peru and a spy-in-training for the U.S. Defense Intelligence Agency , he was detained by Lima authorities for allegedly raping and savagely beating a prostitute , according to a U.S. Embassy cable from that period .
The woman had nearly died .
But U.S. intelligence , rather than rein in or cut loose its new spy , merely filed the report away .
Mr. Noriega 's tips on emerging leftists at his school were deemed more important to U.S. interests .
From that point on , the U.S. would make a practice of overlooking the Panamanian 's misadventures .
The U.S. has befriended and later turned against many dictators , but none quite so resourceful .
The 55-year-old Mr. Noriega is n't as smooth as the shah of Iran , as well-born as Nicaragua 's Anastasio Somoza , as imperial as Ferdinand Marcos of the Philippines or as bloody as Haiti 's Baby Doc Duvalier .
Yet he has proved more resilient than any of them .
And out of necessity : The U.S. can make mistakes and still hope to remove him from power , but a single error on his part could cost him his life .
`` The U.S. underestimated Noriega all along , '' says Ambler Moss , a former Ambassador to Panama .
`` He has mastered the art of survival . ''
In keeping with America 's long history of propping up Mr. Noriega , recent U.S. actions have extended rather than shortened his survival .
Mr. Noriega might have fallen of his own weight in 1988 because of Panama 's dire economic situation , says Mr. Moss , but increasing external pressure has only given him additional excuses for repression , and a scapegoat for his own mismanagement .
`` If the U.S. had sat back and done nothing , he might not have made it through 1988 , '' Mr. Moss contends .
Perhaps most important , Mr. Noriega 's allies have intervened to encourage -- in some cases , to demand -- that the dictator maintain his grip of the throne .
One Colombian drug boss , upon hearing in 1987 that Gen. Noriega was negotiating with the U.S. to abandon his command for a comfortable exile , sent him a hand-sized mahogany coffin engraved with his name .
`` He is cornered , '' says the Rev. Fernando Guardia , who has led Catholic Church opposition against Noriega .
`` The Americans have left him without a way out .
It is easy to fight when you do n't have any other option . ''
His chief advantage in the fight : his intimate knowledge of American ways and weaknesses .
Mr. Noriega often tells friends that patience is the best weapon against the gringos , who have a short attention span and little stomach for lasting confrontation .
The U.S. discovered the young Tony Noriega in late 1959 , when he was in his second year at the Chorrillos Military Academy in Lima , according to former U.S. intelligence officials .
The contact occurred through Mr. Noriega 's half-brother , a Panamanian diplomat based in Peru named Luis Carlos Noriega Hurtado .
Luis Carlos , knowing that helping the Americans could advance the career of any Panamanian officer , relayed Tony 's reports on the leftist tendencies he observed among his fellow students and , more important , among his officers and instructors .
A spy was born .
It was a heady experience for the pockmarked and slightly built Mr. Noriega , who was known to his friends as Cara la Pina -- pineapple face .
Born the illegitimate son of his father 's maid , he was raised on the mean streets of the central market district of Panama City .
Tony was four years older than most of his fellow cadets , and gained admission to the academy because his brother had falsified his birth certificate .
He considered himself intellectually superior to his Peruvian peers , many of whom were wayward sons sent by their well-off families to the highly disciplined , French-modeled academy as a sort of reform school .
In his peaked military cap and neatly pressed , French-made uniform , Noriega felt more respected and powerful than ever in his underprivileged life , friends from the period say .
`` He had an elegant uniform with gold buttons in a country where there was a cult of militarism , where officers were the elite with special privileges , '' recalls Darien Ayala , a fellow student in Peru and a lifelong friend .
Mr. Noriega 's relationship to American intelligence agencies became contractual in either 1966 or 1967 , intelligence officials say .
His commanding officer at the Chiriqui Province garrison , Major Omar Torrijos , gave him an intriguing assignment : Mr. Noriega would organize the province 's first intelligence service .
The spy network would serve two clients : the Panamanian government , by monitoring political opponents in the region , and the U.S. , by tracking the growing Communist influence in the unions organized at United Fruit Co. 's banana plantations in Bocas del Toros and Puerto Armuelles .
United Fruit was one of the two largest contributors to Panama 's national income .
Satisfying its interests was a priority for any Panamanian leader .
Mr. Noriega 's initial retainer was only $ 50 to $ 100 a month , plus occasional gifts of liquor or groceries from the American PX , a former intelligence official says .
It was modest pay by American standards , but a healthy boost to his small military salary , which fellow officers remember as having been $ 300 to $ 400 monthly .
`` He did it very well , '' recalls Boris Martinez , a former Panamanian colonel who managed Mr. Noriega and his operation .
`` He started building the files that helped him gain power . ''
A National Guard job assumed by Capt. Noriega in 1964 -- as chief of the transit police in David City , capital of the Chiriqui Province -- was tailor-made for an aspiring super-spy .
By pressuring taxi and bus drivers who needed licenses , he gained a ready cache of information .
He knew which local luminaries had been caught driving drunk , which had been found with their mistresses .
This proved particularly valuable to the Panamanian government in 1967 , when union leaders were planning a May Day march that the government feared could turn violent .
Mr. Noriega had learned that a local union leader was sleeping with the wife of his deputy .
So he splashed the information on handbills that he distributed throughout the banana-exporting city of Puerto Armuelles , which was ruled by United Fruit Co .
The campaign so divided union leaders that the government found them far easier to control .
`` It was like a play on Broadway , '' recalls Mr. Martinez .
`` Noriega managed the whole thing .
He was superb .
Noriega was an expert at bribing and blackmailing people . ''
During his years in Chiriqui , however , Mr. Noriega also revealed himself as an officer as perverse as he was ingenious .
Rodrigo Miranda , a local lawyer and human-rights monitor , recalls an intoxicated Noriega visiting prisoners in their cells at the 5th Zone Garrison headquarters in David , where he had his offices .
Mr. Noriega would order them all to take off their clothes and run around the courtyard naked , laughing at them and then retreating to his office .
`` People started wondering if something was wrong with him , '' Mr. Miranda recalls .
But through this period , so far as the U.S. military was concerned , Mr. Noriega was a model recruit .
He signed up for intelligence and counter-intelligence training under American officers at Fort Gulick in Panama in July 1967 , according to a copy of a 1983 resume with details Mr. Noriega has since classified as secret .
He flew to Fort Bragg , N.C. , in September of that year for a course in psychological operations , returning to the School of the Americas in Panama for a two-month course called `` military intelligence for officers . ''
Some American officers interpreted his eagerness and studiousness as a sign of loyalty , but they did so falsely .
He rose to chief of intelligence in Panama 's socalled G-2 in 1970 after providing populist dictator Torrijos the critical support to defeat a coup attempt against him a year earlier .
He became Gen. Torrijos 's inseparable shadow , and the holder of all Panama 's secrets .
Mr. Noriega , by now a lieutenant colonel , expanded his contacts to include the Cubans -- not to mention the Israelis , the Taiwanese and any other intelligence service that came knocking .
When U.S. diplomats complained to the CIA of Col. Noriega 's moonlighting , intelligence experts always insisted that his allegiance was first to the Americans .
`` Early on in the State Department , we took to calling him the rent-a-colonel , in tribute to his ability to simultaneously milk the antagonistic intelligence services of Cuba and the United States , '' recalls Francis J. McNeil , who , as deputy assistant secretary of state for inter-American affairs , first ran across reports about Mr. Noriega in 1977 .
`` Some of us wondered how our intelligence people could put so much stock in his information when he was just as close to the Cubans . ''
Even at this early stage , drugs caused additional concerns .
During the Nixon administration , the Drug Enforcement Administration became dismayed at the extent of the G-2 's connections to arrested drug traffickers .
One DEA agent drew up a list of five options for dealing with Col. Noriega , one of which was assassination .
The head of the DEA at the time , John Ingersoll , scotched the assassination plan .
But he did fly to Panama to scold dictator Torrijos on the drug ties of Panamanian officials , including Mr. Noriega .
Mr. Ingersoll later recalled that Gen. Torrijos seemed afraid to act on the concerns of the U.S. .
`` Everybody was afraid of him , '' Mr. Ingersoll says .
Mr. Noriega became an even greater threat in 1976 , when U.S. intelligence services discovered that he had been buying recordings of electronically monitored conversations from three sergeants working for the U.S. Army 's 470th Military Intelligence Group .
The tapes included wiretaps of Gen. Torrijos 's own phone , according to American intelligence officials .
`` We caught him with his hands on our cookie jar , '' says former CIA Director Stansfield Turner .
For the first time , the U.S. considered cutting Mr. Noriega from its intelligence payroll -- and the deliberations were intense , Mr. Turner says .
`` In the world of intelligence , if you want to get information , you get it from seedy characters .
The question is how much you get tied in with seedy characters so they can extort you . ''
Intelligence officials to this day worry whether Mr. Noriega sold sensitive information on the recordings to the Cubans or others .
Mr. Turner was troubled enough to cancel the U.S. contract with the rent-a-colonel at the beginning of the Carter administration .
The U.S. soon found new cause for concern : gun-running .
Prosecutors in Southern Florida indicted five Panamanians on charges of illegally running arms to Sandinista rebels trying to overthrow the Nicaraguan government of Mr. Somoza .
They included one of Mr. Noriega 's closest friends and business partners , Carlos Wittgreen .
And the investigators were quickly closing in on Mr. Noriega himself .
At the time , though , in 1979 , the U.S. was once again flirting with its longtime Latin American spy .
Mr. Noriega made plans to fly to Washington for a meeting with his counterpart at the Pentagon .
Dade County and federal authorities , learning that he intended to fly through Miami , made plans to arrest him on the gun-running charges as soon as he hit U.S. soil .
It was a Friday in June .
The Pentagon foiled the plan .
According to military officers at the time , word was passed to Mr. Noriega by his American hosts that the police would be waiting .
On Monday , U.S. officials received a routine , unclassified message from the military group commander in Panama .
`` Due to health reasons , Lt. Col. Noriega has elected to postpone his visit to Washington , '' it read .
Prosecutors in Miami received yet another setback .
Their original indictment against Mr. Wittgreen , the friend of Mr. Noriega , and the other four was dismissed on a technicality .
But now , along with reindicting Mr. Noriega 's pal , they intended to charge Mr. Noriega himself , on allegations that he was involved in the illegal trading of some $ 2 million in arms .
In January 1980 , Jerome Sanford , as assistant U.S. attorney , was summoned to a meeting with a Federal Bureau of Investigation agent assigned to the Bureau of Alcohol , Tobacco and Firearms in Miami .
Panamanian dictator Torrijos , he was told , had granted the shah of Iran asylum in Panama as a favor to Washington .
Mr. Sanford was told Mr. Noriega 's friend , Mr. Wittgreen , would be handling the shah 's security .
It would n't be a good idea to indict him -- much less Mr. Noriega , the prosecutor was told .
After prodding from Mr. Sanford , U.S. Attorney Jack Eskenazi pleaded with Justice Department officials in Washington to let the indictment proceed .
`` Unfortunately , '' Mr. Eskenazi wrote in a letter , `` those of us in law enforcement in Miami find ourselves frequently attempting to enforce the laws of the United States but simultaneously being caught between foreign policy considerations over which we have no control . ''
The letter , along with a detailed prosecution memo , sat on the desks of Justice officials for months before the case died a quiet death .
`` I think if we had been allowed to go ahead then we would n't have the problems we have now , '' Mr. Sanford says .
`` If he had been found guilty , we could have stopped him . ''
In August 1983 , Mr. Noriega took over as General and de-facto dictator of Panama , having maneuvered his way to the top only two years after the mysterious death in a plane crash of his old boss Omar Torrijos .
Soon , the military became a veritable mafia controlling legal and illegal businesses .
The Reagan administration also put Mr. Noriega 's G-2 back on the U.S. payroll .
Payments averaged nearly $ 200,000 a year from the U.S. Defense Intelligence Agency and the CIA .
Although working for U.S. intelligence , Mr. Noriega was hardly helping the U.S. exclusively .
During the Reagan years he expanded his business and intelligence contacts with the Cubans and the Sandinistas .
He allegedly entered into Panama 's first formal business arrangement with Colombian drug bosses , according to Floyd Carlton , a pilot who once worked for Mr. Noriega and who testified before the U.S. grand jury in Miami that would ultimately indict the Panamanian on drug charges .
But Mr. Noriega was convinced the Reagan White House would n't act against him , recalls his close ally Jose Blandon , because he had an insurance policy : his involvement with the Contra rebels in Nicaragua .
Mr. Blandon says the general allowed the Contras to set up a secret training center in Panama .
Mr. Noriega also conveyed intelligence from his spy operation inside the Nicaraguan capital of Managua .
And on at least one occasion , in the spring of 1985 , he helped arrange a sabotage attack on a Sandinista arsenal in Nicaragua .
Although , his help for the Contra cause was limited , it was enough to win him important protectors in the Reagan administration , says Sen. Patrick Leahy , a Vermont Democrat who then served on the Senate Intelligence Committee .
`` Noriega played U.S. intelligence agencies and the U.S. government like a violin , '' he says .
An incident in 1984 suggested one additional means by which Mr. Noriega might have maintained such influence with Washington -- by compromising U.S. officials .
Curtin Windsor , then the ambassador to Costa Rica , recalls being invited to Panama by Mr. Noriega 's brother Luis Carlos for a weekend of deep sea fishing and `` quiet , serious conversation '' on the Aswara Peninsula .
Mr. Windsor notified Everett E. Briggs , the U.S. ambassador to Panama , of the invitation .
`` Briggs screamed , '' Mr. Windsor recalls .
He says Mr. Briggs told him he was being set up for a `` honey trap , '' in which Mr. Noriega would try to involve him in an orgy and then record the event `` with sound and video . ''
Mr. Briggs , on vacation after resigning his position at the National Security Council , could n't be reached for comment .
As Mr. Noriega 's political troubles grew , so did his offers of assistance to the Contras , an apparent attempt to curry more favor in Washington .
For instance , he helped steal the May 1984 Panamanian elections for the ruling party .
But just one month later , he also contributed $ 100,000 to a Contra leader , according to documents released for Oliver North 's criminal trial in Washington , D.C .
Yet , his political setbacks mounted .
Mr. Noriega was accused of ordering in 1985 the beheading of Hugo Spadafora , his most outspoken political opponent and the first man to publicly finger Mr. Noriega on drug trafficking charges .
He then ousted President Nicholas Ardito Barletta , a former World Bank official with close ties to the U.S. , after Mr. Barletta tried to create a commission to investigate the murder .
And , all the while , Panama 's debt problems continued to grow .
Mr. Noriega was growing desperate .
In late 1986 , he made an offer he thought the U.S. could n't refuse .
As recounted in a stipulation that summarized government documents released for the North trial , Mr. Noriega offered to assassinate the Sandinista leadership in exchange `` for a promise to help clean up Noriega 's image and a commitment to lift the { U.S. . } ban on military sales to the Panamanian Defense Forces . ''
`` North , '' the document went on , referring to Oliver North , `` has told Noriega 's representative that U.S. law forbade such actions .
The representative responded that Noriega had numerous assets in place in Nicaragua and could accomplish many essential things , just as Noriega had helped { the U.S. . } the previous year in blowing up a Sandinista arsenal . ''
Col. North conveyed the request to his superiors and to Assistant Secretary of State Elliot Abrams , who relayed it to Secretary of State George Shultz .
Mr. Noriega 's proposal was turned down .
And Mr. Shultz curtly told Mr. Abrams that the general should be told that only he could repair his tarnished image .
The end of the marriage was at hand .
Within weeks the unfolding Iran-Contra scandal took away Mr. Noriega 's insurance policy .
The death of CIA Director William Casey and resignation of Oliver North allowed anti-Noriega political forces to gain influence .
Public protests against him were triggered in June 1987 due to charges by Diaz Herrera , his former chief of staff , that Mr. Noriega had stolen the 1984 election and had ordered the killing of Messrs. Spadafora and Torrijos .
Few American officials were willing any longer to defend him .
Lawyers in Miami -- this time working virtually without impediment -- prepared to have him indicted on drug charges in February 1988 .
During negotiations with American officials in May 1988 over proposals to drop the U.S. indictments in exchange for his resignation , Mr. Noriega often asked almost plaintively how the Americans , whom he had helped for so many years , could turn against him .
Now , neither side -- the U.S. nor Mr. Noriega -- has an easy out .
President Bush has sworn to bring him to justice .
Mr. Noriega believes he has n't any alternative but to continue clutching to power .
It is a knock-out battle -- perhaps to the death .
In the end , is Mr. Noriega the political equivalent of Frankenstein 's monster , created by a well-intentioned but misguided foreign power ?
Not quite , Sen. Leahy contends .
`` For short-term gains , people were willing to put up with him .
That allowed him to get stronger and stronger , '' he says .
`` I do n't think we created him as much as we fed him , nurtured him and let him grow up to be big and strong .
UPJOHN Co. reported that third-quarter net income rose to $ 96 million , or 52 cents a share , from $ 89.6 million , or 49 cents a share , a year earlier .
Yesterday 's edition provided analysts ' estimates for the company when actual earnings were available .
Industrial production declined 0.1 % in September , reinforcing other signs that the manufacturing sector continues its slowing trend .
The Federal Reserve Board said output of the nation 's factories , mines and utilities expanded at an annual rate of 1.3 % in the third quarter , substantially slower than the 3.3 % annual rate in the second quarter .
`` Capital spending and exports , which have been the driving force in this expansion , are showing clear signs of having the steam taken out of them , '' said Robert Dederick , economist for Northern Trust Co. in Chicago .
The new reports of sluggishness , which were foreshadowed by an earlier Labor Department report that manufacturing payrolls dropped by 105,000 in September , give the Fed another reason to further ease its grip on credit and lower interest rates .
`` They need to do something about this , '' said Maury Harris , economist at PaineWebber Group Inc .
The Fed also said U.S. industry operated at 83.6 % of capacity last month , down from 83.8 % in August .
Measures of manufacturing activity fell more than the overall measures .
Factory output dropped 0.2 % , its first decline since February , after having been unchanged in October .
Factories operated at 83.7 % of capacity , the lowest rate in more than a year and down from 84.1 % in September .
The declines mainly reflected widespread weakness in durable goods , those intended to last more than three years .
The biggest drop was recorded by primary metals producers , a category that includes the steel industry .
Output of business equipment was unchanged in September .
Production of factory equipment , one indication of the strength of manufacturers ' investment spending , fell 0.3 % .
Some economists expect further declines in investment spending .
`` Whenever corporate profits are weak that means capital spending is going to soften subsequently , '' Mr. Harris said .
`` You have n't seen the full effect of that yet . ''
A decline in truck production more than offset a sharp rise in auto assemblies , the Fed noted .
Analysts do n't expect the September surge in auto production to be repeated in the coming months .
Here is a summary of the Federal Reserve Board 's report on industrial production in September .
The figures are seasonally adjusted .
142.3 % of the 1977 average .
Robin Honiss , president and chief executive officer of this bank holding company , was elected to the additional posts of chairman , president and chief executive of the company 's New England Savings Bank subsidiary .
William R. Attridge resigned those posts , as well as a seat on NESB 's board .
NESB is also the parent of Omnibank .
Lung-cancer mortality rates for people under 45 years of age have begun to decline , federal researchers report .
The drop is particularly large for white males , although black males and white and black women also show lower mortality rates .
A report in this week 's issue of the Journal of the National Cancer Institute also projects that overall U.S. mortality rates from lung cancer , the leading cause of cancer death , should begin to drop in several years if cigarette smoking continues to abate .
The report , which comes 25 years after the U.S. Surgeon General issued a report warning against the dangers of smoking , is the strongest indication to date that the reduction in smoking is leading to lower death rates from lung cancer .
`` What this is saying is that the surgeon general 's message is having an impact , '' said Melvyn Tockman , an epidemiologist at the Johns Hopkins School of Hygiene and Public Health in Baltimore .
The National Cancer Institute report compares mortality rates of two groups of people between the ages of 35 and 44 a decade apart .
The death rate from lung cancer of white males aged 35 to 44 in the mid-1970s was 13.4 per 100,000 , but the mortality rate of the same age group in the mid-1980s was 9.6 , a decline of 28.7 % .
Measured the same way , the decline for black males was 14.2 % .
The drop in mortality rates for women was less steep -- 8.9 % for blacks and 5.3 % for whites .
The study , by Susan Devesa , William Blot and Joseph Fraumeni of the institute 's staff , also shows that the incidence of lung cancer as well as the death rate declined over the decade for all groups in the 35-44 age bracket , except black men .
Although lung-cancer mortality rates are increasing for the nation as a whole , the report projects that death rates will begin to decline in the 1990s for men and after the year 2000 for women .
Lung-cancer mortality rates increase with age and are continuing to rise for all age groups over 55 , with sharp increases for everybody but white men .
But Dr. Fraumeni , one of the authors of the report , said `` the declining rates we 're seeing for younger people we believe may be a harbinger of declining mortality in the future . ''
However , he stressed that the improvement depends on a continued reduction in smoking .
`` Even though these favorable trends in lung-cancer mortality affect all sex and race groups , they ca n't be taken for granted , '' the report says .
`` Smoking prevention programs should reach larger segments of the population , especially children , adolescents and minorities . ''
An editorial in the NCI Journal says the report of declining lung-cancer mortality `` among young men and women in the U.S. indicates that we finally may be winning the battle -- this even in a country where the tobacco industry spends over $ 2 billion a year for promotion of the addictive habit of smoking . ''
But the editorial , by Jan Stjernsward of the World Health Organization , notes that tobacco consumption and lung-cancer mortality rates are rising in developing countries .
`` Non-smoking should be established as the norm of social behavior '' around the world , the editorial says , through the enactment of laws that limit advertising , boost tobacco prices and promote anti-smoking education .
Asked for comment , Walker Merryman , a vice president of the Tobacco Institute , said new efforts to restrict tobacco advertising in the U.S. could violate the First Amendment protection of free speech .
According to the American Cancer Society , smoking is responsible for 85 % of the lung-cancer cases among men and 75 % among women .
The NCI report attributes the differences in mortality rates by race to different smoking patterns .
A higher proportion of black men smoke than white men .
While nearly equal percentages of black and white women currently smoke , in both sexes more whites have given up smoking than blacks .
In comparing changes in mortality rates over the past decade , the NCI study looked only at blacks and whites .
Asians and native Americans were n't studied ; Hispanics were included with whites .
Recent changes in average annual age-specific lung-cancer rates per 100,000 population by race and sex .
White Males
White Females
Black Males
Black Females
Directors elected R. Marvin Womack , currently vice president\/product supply , purchasing , to head the company 's Washington , D.C. , office .
As vice president\/national-government relations , Mr. Womack will work with P&G 's top management and with the company 's government-relations staff `` to represent P&G 's interests at the federal level , '' said John G. Smale , chairman and chief executive officer .
Mr. Smale said the appointment `` recognizes the growing influence of government on our business . ''
Mr. Womack , 53 years old , has been with the big producer of household products , food and pharmaceuticals for 30 years .
Traders trying to profit from the recent volatility in financial markets invaded the Nasdaq over-the-counter market , prompting even more swings in stock prices .
After gaining strength during a brief run-up when trading began , the Nasdaq Composite Index weakened under selling pressure .
The forces at work included computer-guided trading , as well as profit-driven market makers and institutional investors who had bought stock on the cheap during the recent correction .
During the last two hours of trading , the composite almost drew even on the day before slipping again .
The Nasdaq Composite closed down 1.05 , or 0.2 % , to 459.93 .
The action was confined to Nasdaq 's biggest and most liquid stocks , traders said .
The Nasdaq 100 Index began the day at 449.89 , lost 2 % at one point , and was up 0.4 % at another .
The barometer of the biggest nonfinancial stocks settled at 448.49 , off 1.40 .
Its counterpart , the Nasdaq Financial Index , was weak for most of the day , sliding 2.51 to 453.57 by the end of trading .
The volatility was dizzying for traders .
`` The market must have turned up and down 15 different times , '' commented Lance Zipper , head of OTC trading at Kidder Peabody .
`` Every time you thought it was going into a rally it gave up , and every time you thought it would rally it came down .
This is a tough market . ''
Mr. Zipper said the market is still settling down after the recent correction .
Most of trading action now is from professional traders who are trying to take advantage of the price swings to turn a quick profit , he and other traders said .
`` Everybody 's confused and no one has an opinion that lasts longer than 30 seconds , '' said Mr. Zipper .
`` A lot of the professional traders are just going back and forth .
They 're just as confused . ''
William Rothe , head of OTC trading at Alex . Brown & Sons , in Baltimore , said program trading is keeping the markets unsettled .
He believes that the volatile conditions created by program trading has `` thoroughly confused '' investors about where the market is headed .
Program trading is `` benefiting a few to the detriment of many and I wish someone would do something about it , '' he complained .
Trading activity cooled off from Monday 's sizzling pace .
Share turnover subsided to 161.5 million .
Advancing and declining issues finished about even .
Of the 4,345 stocks that changed hands , 1,174 declined and 1,040 advanced .
One big technology issue , Novell , rode the roller coaster .
The stock , which finished Monday at 29 1\/2 , traded as high as 29 3\/4 and as low as 28 3\/4 before closing at 29 1\/4 , down 1\/4 .
It was a jarring day for investors in Genetics Institute .
The stock tumbled 2 3\/4 on news that it might have to take a charge against earnings if it ca n't successfully resolve a dispute with its European licensee , Boehringer Mannheim , over its anti-anemia drug , EPO .
The stock recovered somewhat to finish 1 1\/4 lower at 26 1\/4 .
In a statement , Genetics Institute said the dispute with Boehringer centers on questions of the usability of certain batches of EPO material valued at $ 13.6 million .
Earlier this week , Genetics Institute reported wider losses in its fiscal third quarter ended Aug. 31 .
Price Co. jumped 2 1\/4 to 44 on 1.7 million shares .
The wholesaler of cash and carry merchandise reported fiscal fourthquarter earnings that were better than analysts had expected .
The company also pleased analysts by announcing four new store openings planned for fiscal 1990 , ending next August .
That will bring the total for the year to 10 , from five during fiscal 1989 .
`` Every year we 've been waiting for stepped-up expansion from the company .
The news could n't have been better , '' said Linda Kristiansen , a Dean Witter Reynolds analyst , in an interview .
Intermec , a maker of optical character-recognition devices , also reported higher third-quarter earnings .
Its shares added 3\/4 to 30 3\/4 .
But favorable earnings was n't a guarantee that a stock 's price would improve yesterday .
MCI Communications tumbled 2 5\/8 to 42 3\/8 on 4.7 million shares even though the telecommunications giant reported a 63 % increase in third-quarter profit .
CoreStates Financial slipped 3\/8 to 43 1\/8 in active trading after reporting that third-quarter earnings improved to $ 1.27 a share from $ 1.15 a share a year earlier .
However , the bank holding company 's loan-loss reserves rose to $ 177.3 million from $ 154 million a year earlier .
A&W Brands lost 1\/4 to 27 .
But its thirdquarter earnings rose to 26 cents a share from 18 cents a share last year .
Capital Associates dropped 1 to 5 3\/8 .
The company , which leases technology equipment , reported substantially lower net income for its fiscal first quarter , which ended Aug. 31 .
Robert M. Jelenic , 39 , was named president and chief operating officer of this closely held publisher .
The post had been vacant for more than a year .
Mr. Jelenic had been executive vice president for operations .
In addition , Ralph Ingersoll II , 43 , chairman and chief executive , said he would take on additional responsibilities as editor in chief of the company .
John Wilpers resigned as editor in chief .
Mr. Ingersoll remains editor in chief of the company 's recently launched daily , the St. Louis Sun .
Also , Jean B. Clifton , 28 , was named executive vice president , treasurer and chief financial officer .
Michael Applebaum resigned after less than a year in the posts .
Ms. Clifton had been executive financial assistant to the chairman .
Certainly conservative environmentalists can defend their limited government position by differentiating between Old Environmentalism and New Environmentalism ( `` Journalists and Others for Saving the Planet , '' by David Brooks , editorial page , Oct. 5 ) .
Old Environmentalism involved microbe hunters and sanitationists .
It started with improvements in hygiene made possible by affordable soap and washable underwear during the Industrial Revolution .
Then cast-iron sewer pipe and the flush toilet were followed by sewage - and water-treatment plants toward the end of the 19th century .
Medicine in the 19th century was dedicated mostly to combating sepsis and diagnostic analysis .
Then the 20th century saw the evolution of private-sector wonder drugs , which promulgated medical therapy .
The process dramatically increased our average life expectancy , eliminated much pain and constantly improved health and well-being .
Most public-health measures were handled at the local level .
New Environmentalism probably started in 1962 with the publication of Rachel Carson 's book `` Silent Spring . ''
Shortly thereafter , hysterical articles began to appear predicting that advanced industrial societies would produce a blackened , uninhabitable planet possibly by the turn of the century .
These apocalyptic predictions were advanced by such stalwarts as Paul Ehrlich , Barry Commoner , Rene Dubois and George Wald .
Writing in the 1960s Ms. Carson suggested that the human race could be eliminated in 20 years , and Mr. Wald suggested that life on earth might end by 1985 .
Mr. Ehrlich predicted unprecedented famine by 1980 .
There were many more .
Thousands of chemical products were categorized as carcinogenic , with recommendations that they be banned from industrial use because they produced malignant tumors in overdosed rats .
Unknown before 1960 were the inconclusive effects of acid rain , greenhouse warming and ozone depletion , all of which required burgeoning political power and gargantuan expense .
Meanwhile , the New Environmentalists systematically opposed the methods of the Old Environmentalists .
Local pollution problems require cheap energy and capital for their solution .
But the New Environmentalists oppose private wealth creation ( which , they claim , depletes natural resources ) and nuclear power ( even though it would counteract the greenhouse effect ) .
They are in the forefront of opposing the search for new landfills and methods of incineration and even oppose new methods of research such as genetic engineering .
New Environmentalism is an emotional attack on proven methods of improving our quality of life and a bid for political power .
Let 's rationalize our priorities by solving pollution problems at the local level as heretofore .
Harry Lee Smith Alpharetta , Ga .
Your story missed some essential points of the conference on `` The Global Environment : Are We Overreacting ? ''
First and foremost , the vignettes presented by the various scientists represent a general consensus among specialists working in the respective aspects of the global environment .
Consider , for example , the greenhouse effect and climate change ; numerous blue-ribbon scientific committees , including one from the National Academy of Science , judge there is a greater than 50 % probability of a grave problem in the offing .
The point was to answer the question in the conference title , not to try to create news stories for the event itself .
Nor was it intended to dictate a set of prescriptive solutions , although various points were raised .
Each speaker was asked to address a specific topic , not deliver a point of view .
Each scientist independently concluded society and government are underreacting when it comes to substantive policy change .
This leads to a very special sense of urgency .
If the media decide to work harder at educating the public about these complex and technical issues , that hardly can be termed non-objective journalism .
The environment can no longer be a normal issue , to be dealt with on a business-as-usual basis with comfortable increments of change .
We have literally altered the chemistry and physics of our planet 's atmosphere .
This portends consequences from what we have already done that will be very destabilizing to social and economic systems .
The problems of the environment are so interrelated , so inextricably entwined with our current way of life and so large that it is unlikely we will be able to address them effectively unless major changes are made in less than 10 years .
The consensus from the scientific community is that there is sufficient evidence to advise major policy changes .
No , we are not overreacting .
Thomas E. Lovejoy Assistant Secretary for External Affairs Smithsonian Institution
Coca-Cola Enterprises Inc. , fulfilling its dismal earnings forecast for 1989 , said its third-quarter net income fell 68 % on flat revenue .
Stung by higher marketing costs and slowing volume growth , the giant Coke bottling operation said net fell to $ 12.7 million , or six cents a share , from $ 39.9 million , or 26 cents a share , the year earlier .
The results met estimates of analysts , who had already slashed their projections after the company said in late August that its 1989 earnings could tumble as much as 37 % .
A company spokesman said yesterday that Coca-Cola Enterprises sticks by its 1989 forecast .
Third-quarter revenue was flat at $ 1.02 billion .
The year-ago results , however , included the operations of a bottling business , which was sold last December .
Excluding that bottling business , Coca-Cola Enterprises ' volume , measured by cases of soda , rose only 1 % .
The volume is well below the industry 's 4 % to 5 % growth rate of recent years , but in line with other soft-drink companies for the third quarter .
The latest third-quarter volume also compares with a very strong 10 % growth in the year-ago quarter .
Coca-Cola Enterprises blamed the lower volume on its soft-drink prices , which were about 3 % higher in the third quarter .
Consumers have been accustomed to buying soft-drinks at discounted prices for several years .
Coca-Cola Enterprises said it had to boost spending for trade and dealer incentives to try to keep volumes from slipping .
The company said it expects consumers will adjust to higher-priced soft drinks .
A spokesman attributed the bulk of a 14 % increase in selling , administrative and general expenses -- to $ 324.9 million -- to marketing costs .
`` They 're out there promoting like crazy , trying to get prices up by promotion , '' said Roy Burry , an analyst with Kidder , Peabody & Co .
For the nine months , Coca-Cola Enterprises ' net fell 31 % to $ 65 million , or 39 cents a share , from $ 93.8 million , or 63 cents a share .
Revenue was flat at about $ 2.97 billion .
Coca-Cola Enterprises , which is 49%-owned by Coca-Cola Co. , also said it repurchased about 1.2 million of its common shares during the third quarter .
The buy-back is part of a 25-million-share repurchase plan , under which Coca-Cola Enterprises so far has acquired a total of 9.7 million shares .
Separately , Purchase , N.Y.-based PepsiCo Inc. , as expected , said fiscal third-quarter net rose 11 % to $ 269.3 million , or $ 1.02 a share , from $ 241.6 million , or 91 cents a share .
Sales rose 25 % to $ 3.90 billion from $ 3.13 billion .
The year-ago quarter 's results include an after-tax charge of $ 5.9 million from the sale of a winery in Spain .
In composite trading on the New York Stock Exchange , Coca-Cola Enterprises closed at $ 16.375 a share , down 62.5 cents .
PepsiCo closed at $ 58.50 a share , up $ 1.375 .
L.J. Hooker Corp. is expected to reach an agreement in principle this week to sell Merksamer Jewelers Inc. to management , say executives familiar with the talks .
L.J. Hooker , based in Atlanta , filed for Chapter 11 bankruptcy protection earlier this year .
Currently , its parent company , Hooker Corp. of Sydney , Australia , is being managed by a court-appointed liquidator .
It is expected that GE Capital Corp. , a financial-services subsidiary of General Electric Co. , will provide much of the funding for the proposed leveraged buy-out of Merksamer , based in Sacramento , Calif .
A spokesman for GE Capital declined to comment .
GE Capital has a working relationship with L.J. Hooker .
It is providing $ 50 million in emergency financing to the company and has agreed to buy as much as $ 75 million in receivables from B. Altman & Co. and Bonwit Teller , L.J. Hooker 's two fully owned department-store chains .
Sam Merksamer , chief executive officer of the nationwide jewelry chain , and Sanford Sigoloff , chief executive of L.J. Hooker Corp. , both declined to comment .
Currently , Mr. Merksamer owns 20 % of the company ; L.J. Hooker acquired its 80 % interest in the firm in May 1986 .
At the time , the Merksamer chain had 11 stores in operation .
Today , there are 77 units , all located in shopping malls .
In recent weeks Mr. Merksamer has approached a number of his suppliers and asked them to provide letters of intent saying they will continue shipping merchandise to the chain following the buy-out , say those familiar with the situation .
This year , a number of retail leveraged buyouts have failed , causing jitters among suppliers , and Mr. Merksamer apparently wanted assurances that he wo n't have delivery problems .
For the year ended June 30 , 1989 , Merksamer Jewelers had $ 62 million of revenue and operating profit of $ 2.5 million .
The jewelery chain was put up for sale in June .
According to those familiar with the situation , other bidders included Ratners Group PLC of London and Kay Jewelers Inc .
First Boston Corp. is advising L.J. Hooker on the sale of the Merksamer business .
Merksamer was the first in a series of retail acquisitions made by L.J. Hooker .
The company was founded in Sacramento in 1929 by two brothers , Ralph and Walter Merksamer , who operated as DeVon 's Jewelers .
In 1979 , the pair split the company in half , with Walter and his son , Sam , agreeing to operate under the Merksamer Jewelery name .
The sale of Merksamer Jewelers is subject to approval by Judge Tina Brozman of U.S. Bankruptcy Court .
As earlier reported , L.J. Hooker this week received a $ 409 million bid for its three shopping malls , plus other properties from a consortium led by Honolulu real-estate investor Jay Shidler and A. Boyd Simpson , an Atlanta developer and former L.J. Hooker senior executive .
The offer , which did n't include the Merksamer chain , is being reviewed by Mr. Sigoloff .
Robert J. Regal was named president and chief executive officer of this company 's Universal-Rundle Corp. unit .
Mr. Regal had been president and chief executive of RBS Industries Inc .
Robert H. Carlson , previous president and chief executive of Universal-Rundle , will assume the title of chairman of the unit , a vitreous-china maker .
The days may be numbered for animated shows featuring Alf , the Karate Kid and the Chipmunks .
NBC , a leader in morning , prime-time and late night programs but an also-ran on Saturday mornings , when children rule the TV set , is contemplating getting out of the cartoon business .
Instead , network officials say , it may `` counterprogram '' with shows for an audience that is virtually ignored in that time period : adults .
`` There is talk of some revamping and we 're certainly heading in the direction of less and less animation , '' said Joseph S. Cicero , vice president of finance and administration for National Broadcasting Co. , a unit of General Electric Co .
Mr. Cicero said that NBC Entertainment president Brandon Tartikoff , who declined to be interviewed , is `` looking at options now and may put some things into the schedule by mid-season . ''
He declined to elaborate .
NBC 's options could range from news-oriented programming to sports shows , although the network declined to comment .
One major NBC affiliate , KCRA in Sacramento , plans to cancel the NBC Saturday morning line-up as of January and replace it with a local newscast .
The one-hour program will be repeated with updates throughout Saturday mornings .
`` We feel there is an opportunity for an audience that is not being served by any network , so we want to take the lead , '' says KCRA 's general manager , John Kueneke .
`` We do n't need cartoons anymore .
They only accounted for 5 % , at best , of the station 's total revenues . ''
An NBC spokesman says the network will `` closely monitor '' the Sacramento situation , and says it is the only station to defect .
Spokesmen for the television networks of CBS Inc. and Capital Cities\/ABC Inc. , say there are no plans to alter the children 's line-up on Saturday mornings .
The youthful audience for Saturday programming is no longer dependent on the networks .
There has been a surge in syndicated children 's shows to independent stations , as well as competition from videocassettes for kids and from cable outlets such as Nickelodeon and the Disney Channel .
At the same time , there appears to be a market for news-oriented programming ; Turner Broadcasting System Inc. 's Cable News Network has its highest ratings , outside of prime time , on Saturday mornings .
NBC has on previous occasions considered replacing cartoons with a Saturday version of `` Today , '' which is produced by NBC News .
The network 's own production company , NBC Productions , supplies a half-hour family-oriented show titled `` Saved By The Bell . ''
NBC Productions or NBC News could supply the network with other Saturday morning shows , a move that would control costs .
Animated shows , which are made by outside production companies , cost the network about $ 300,000 per episode .
Rohm & Haas Co. said third-quarter net income skidded 35 % to $ 32.6 million , or 49 cents a share .
In the year-earlier quarter , the chemicals company had net of $ 49.8 million , or 75 cents a share .
Sales were $ 623 million , up 0.5 % from $ 619.8 million a year ago .
Rohm & Haas , which plans to start operating seven new production units this year , attributed the profit slide partly to higher start-up expense .
The company also cited the stronger dollar , which cuts the value of overseas profit when it is translated into dollars .
In addition , the company said , it was hurt by higher than previous-year costs for raw materials , though those costs have declined since the second quarter .
Incrementally higher production of those chemicals which remain in heavy demand also has forced up costs , such as overtime pay .
For the nine months , Rohm & Haas net totaled $ 155 million , or $ 2.33 a share , down 17 % from $ 187.8 million , or $ 2.82 a share , a year ago .
Sales rose 5.2 % to $ 2.04 billion from $ 1.94 billion the previous year .
In New York Stock Exchange composite trading , Rohm & Haas closed at $ 33 a share , down $ 1.75 .
Michael A. Gaskin , 55 years old , was named president and chief executive officer of this manufacturer of industrial robots , succeeding Walter K. Weisel .
Mr. Weisel , 49 , resigned as president and chief executive and will work on special projects , said John J. Wallace , chairman .
Mr. Gaskin formerly was president and chief executive of Taylor & Gaskin Inc. and was a director of Prab Robots since 1985 .
Stephen N. Wertheimer was named managing director and group head of investment banking in Asia , based in Tokyo .
Mr. Wertheimer , 38 years old , had been a first vice president in the industrial group in investment banking .
He succeeds Everett Meyers , who resigned in May .
This is written to correct a misquotation in your Oct. 3 article `` Deaths From Advanced Colon Cancer Can Be Reduced by Using Two Drugs . ''
In this article , I was alleged to have said , `` Any patient with high-risk colon cancer is really getting short shrift if he 's not getting this therapy . ''
I did n't say this , and I 'm totally opposed to the philosophy expressed by the quote .
I have not offered and will not offer routine therapy with the two drugs , levamisole and 5-fluorouracil , to any of my colon-cancer patients .
With this treatment we have reduced deaths in high-risk colon cancer by one-third -- but this leaves the two-thirds who are dying of cancer .
This is not nearly good enough .
I believe any physician who truly cares about cancer patients , both today and tomorrow , should offer the hope of something better than that .
My statement , read verbatim from a printed text available to all reporters attending the National Cancer Institute news conference , was the following : `` New clinical trials are already in operation seeking to improve these results .
These research protocols offer to the patient not only the very best therapy which we have established today but also the hope of something still better .
I feel any patient with high-risk cancer is getting short shrift if he is not offered this opportunity . ''
We have very exciting prospects for far more impressive advances in the treatment of colon cancer during the years immediately ahead .
This hope , however , will never be realized if we use levamisole and 5-fluorouracil as a stopping point .
Charles G. Moertel M.D . Mayo Clinic Rochester , Minn .
The oil and auto industries , united in their dislike of President Bush 's proposal for cars that run on alternative fuels , announced a joint research program that could turn up a cleaner-burning gasoline .
Officials of the Big Three auto makers and 14 petroleum companies said they are setting out to find the most cost-effective fuel for reducing cities ' air-pollution problems , with no bias toward any fuel in particular .
However , their search notably wo n't include natural gas or pure methanol -- the two front-running alternative fuels -- in tests to be completed by next summer .
Instead , the tests will focus heavily on new blends of gasoline , which are still undeveloped but which the petroleum industry has been touting as a solution for automobile pollution that is choking urban areas .
Environmentalists criticized the program as merely a public-relations attempt to head off a White House proposal to require a million cars a year that run on cleaner-burning fuels by 1997 .
While major oil companies have been experimenting with cleaner-burning gasoline blends for years , only Atlantic Richfield Co. is now marketing a lower-emission gasoline for older cars currently running on leaded fuel .
The initial $ 11 million research program will conduct the most extensive testing to date of reformulated gasolines , said Joe Colucci , head of fuels and lubricants at General Motors Corp. research laboratories .
It will compare 21 different blends of gasolines with three mixtures of up to 85 % methanol .
A second phase of research , which is still being planned , will test reformulated gasolines on newer engine technologies now being developed for use in 1992 or 1993 cars .
There was no cost estimate for the second phase .
`` The whole idea here is the automobile and oil companies have joint customers , '' said Keith McHenry , a senior vice president of technology at Amoco Corp .
`` And we are looking for the most cost-effective way to clean up the air . ''
But David Hawkins , an environmental lawyer with the Natural Resources Defense Council , said the research appears merely to be a way to promote reformulated gasoline .
Oil and auto companies supported a move on Capitol Hill last week to gut Mr. Bush 's plans to require auto makers to begin selling alternative-fueled cars by 1995 .
Instead , a House subcommittee adopted a clean-fuels program that specifically mentions reformulated gasoline as an alternative .
The Bush administration has said it will try to resurrect its plan when the House Energy and Commerce Committee takes up a comprehensive clean-air bill .
William Seidman , chairman of the Federal Deposit Insurance Corp. , said Lincoln Savings & Loan Association should have been seized by the government in 1986 to contain losses that he estimated will cost taxpayers as much as $ 2 billion .
Mr. Seidman , who has been the nation 's top bank regulator , inherited the problems of Lincoln , based in Irvine , Calif. , after his regulatory role was expanded by the new savings-and-loan bailout law .
He made his comments before House Banking Committee hearings to investigate what appears to be the biggest thrift disaster in a scandal-ridden industry .
The inquiry also will cover the actions of Charles Keating Jr. , who is chairman of American Continental Corp. , Lincoln 's parent , and who contributed heavily to several U.S. senators .
Mr. Seidman told the committee that the Resolution Trust Corp. , the agency created to sell sick thrifts , has studied Lincoln 's examination reports by former regulators dating back to 1986 .
`` My staff indicated that had we made such findings in one of our own institutions , we would have sought an immediate cease-and-desist order to stop the hazardous operations , '' Mr. Seidman said .
When Lincoln was seized by the government , for example , 15 % of its loans , or $ 250 million , were to borrowers who were buying real estate from one of American Continental 's 50 other subsidiaries , according to Mr. Seidman .
But the government did n't step in until six months ago , when thrift officials put Lincoln into conservatorship -- the day after American Continental filed for Chapter 11 bankruptcy protection from creditors .
The bankruptcy filing , the government has charged in a $ 1.1 billion civil lawsuit , was part of a pattern to shift insured deposits to the parent company , which used the deposits as a cache for real-estate deals .
The deposits that have been transferred to other subsidiaries are now under the jurisdiction of the bankruptcy court .
`` I think it 's fairly clear { Mr. Keating } knew , '' that regulators were set to seize Lincoln , Mr. Seidman said .
Further investigation , he said , may result in further actions against Lincoln 's executives , said Mr. Seidman , `` including fraud actions . ''
Mr. Keating , for his part , has filed suit alleging that regulators unlawfully seized the thrift .
Leonard Bickwit , an attorney in Washington for Mr. Keating , declined to comment on the hearings , except to say , `` We will be responding comprehensively in several forums to each of these allegations at the appropriate time . ''
Lincoln 's treatment by former thrift regulators , in an agency disbanded by the new law , has proved embarrassing for five senators who received thousands of dollars in campaign contributions from Mr. Keating .
Mr. Seidman said yesterday , for example , that Sen. Dennis DeConcini ( D. , Ariz. ) , who received $ 48,100 in contributions from Mr. Keating , phoned Mr. Seidman to request that he push for a sale of Lincoln before it would be seized .
After the government lawsuit was filed against Lincoln , Sen. DeConcini returned the campaign contributions .
The senator 's spokesman said yesterday that he pushed for the sale of Lincoln because `` hundreds of Arizona jobs { at Lincoln } were on the line . ''
Senate Banking Committee Chairman Donald Riegle ( D. , Mich . ) has also returned contributions he received from Mr. Keating a year ago .
Sens. John Glenn ( D. , Ohio ) , John McCain , ( R. , Ariz. ) and Alan Cranston ( D. , Calif. ) also received substantial contributions from Mr. Keating and sought to intervene on behalf of Lincoln .
House Banking Committee Chairman Henry Gonzalez ( D. , Texas ) said Sen. Cranston volunteered to appear before the House committee , if necessary .
But a committee staff member said the panel is unlikely to pursue closely the role of the senators .
At the hearing , Mr. Seidman said the RTC has already pumped $ 729 million into Lincoln for liquidity .
He also held out little hope of restitution for purchasers of $ 225 million in American Continental subordinated debt .
Some of those debtholders have filed a suit , saying they believed they were buying government-insured certificates of deposit .
`` We have no plans at this time to pay off those notes , '' he said .
Eastern Airlines ' creditors committee , unhappy with the carrier 's plans for emerging from bankruptcy-law proceedings , asked its own experts to devise alternate approaches to a reorganization .
Representatives of the accounting firm of Ernst & Young and the securities firm of Goldman , Sachs & Co. , hired by creditors to consult on Eastern 's financial plans , told the committee in a private meeting yesterday that Eastern 's latest plan to emerge from bankruptcy-law protection is far riskier than an earlier one which won the creditors ' approval .
According to one person present at the meeting , Eastern 's new plan is financially `` overly optimistic . ''
Asked about the consultants ' reports , an Eastern spokeswoman said `` we totally disagree . ''
She said they have `` oversimplified and made some erroneous assumptions that make their analysis completely off-base . ''
At a later news conference here , Frank Lorenzo , chairman of Eastern 's parent Texas Air Corp. , said Eastern was exceeding its goals for getting back into operation and predicted it would emerge from Chapter 11 protection from creditors early next year , operating with more service than it originally had scheduled .
He insisted , as he has before , that creditors would be paid in full under the plan .
Mr. Lorenzo made no mention of creditors ' negative response to his plan .
`` We 're in the process of discussing an amended plan with the creditors and anticipate filing that amended plan shortly , '' Mr. Lorenzo told reporters .
`` We 're meeting and surpassing our goals , '' he added .
In July , Eastern and its creditors agreed on a reorganization plan that called for Eastern to sell $ 1.8 billion in assets and to emerge from bankruptcy-law protection at two-thirds its former size .
But after selling off pieces such as its East Coast shuttle , its Philadelphia hub and various planes , Eastern hit a stumbling block .
It could n't sell its South American routes , one of the major assets marked for disposal .
Those routes , valued by the creditors ' professionals at about $ 400 million , were to be sold to AMR Corp. 's American Airlines .
A last-minute snag in negotiations with AMR , over an unrelated lawsuit between American and another Texas Air unit , caused the deal to collapse .
Eastern ultimately decided it would have to keep and operate the routes itself , which would leave it with less cash for its reorganization .
It also would leave Eastern a bigger carrier than the scaled-down one proposed under the initial plan .
Those changes in its condition meant the reorganization plan previously presented to creditors would have to be revamped .
Since then , Eastern has been negotiating with creditors over revisions , but the creditors committee has been having problems with the revisions .
The committee has two groups of experts it calls on to analyze Eastern 's plans .
Both said the new plan would n't work .
Ernst & Young said Eastern 's plans will miss its projections of earnings before interest , tax and depreciation by $ 100 million , and that Eastern 's plan presented no comfort level , according to a source present at yesterday 's session .
Experts from Goldman Sachs estimated Eastern would miss the same mark by $ 120 million to $ 135 million , the source said .
The experts said they expected Eastern would have to issue new debt to cover its costs , and that it would generate far less cash than anticipated .
Other costs also would increase , including maintenance , because Eastern has an older fleet .
At the news conference , Mr. Lorenzo and Eastern President Phil Bakes presented a far rosier assessment .
Flanked by flight attendants , pilots and gate agents dressed in spiffy new blue uniforms , they said Eastern has exceeded its operational goals and is filling its seats .
Starting next month , Eastern will begin flying 775 flights daily instead of the previously announced 700 , they said .
Mr. Bakes declined to give out Eastern 's daily losses , but said he did n't expect Eastern would have to dip into the cash from asset sales currently held in escrow .
These accounts hold several hundred million dollars , primarily from asset sales .
The plan Eastern hopes to pursue , he said , calls for Eastern to have $ 390 million in cash by year 's end .
Both he and Mr. Lorenzo predicted that plan might be confirmed in January .
As to negotiations with creditors , Mr. Lorenzo said in remarks after the conference `` we 'll have to see how they { talks } come along . ''
However , he added , `` it 's not a requirement that the plan be accepted by creditors .
It must be accepted by the court . ''
Under bankruptcy law , Eastern has exclusive rights for a certain period to develop its own reorganization plan .
That deadline has been extended once and could be extended again .
If Eastern can get creditor support , court confirmation of its plan could be relatively swift .
But creditors are free to press for court approval of their own plan , or the court could ignore both sides and draw its own .
In any event , some people familiar with the case question whether the court will act by January as forecast by Mr. Lorenzo and Mr. Bakes .
Eastern sought bankruptcy-law protection a few days after a crippling strike began March 4 .
Mr. Lorenzo told reporters the reorganization Eastern is pursuing would create a carrier 85 % to 90 % of the size of the pre-bankruptcy Eastern .
He projected it would be operating about 1,000 flights a day by late spring , only slightly fewer than the carrier 's old volume of 1,050 a day .
HOPES OF SIMPLIFYING the corporate minimum tax before 1990 are weakening .
The method of calculating the 20 % tax , paid if it exceeds tax figured the regular way , is due for a change in 1990 , thanks to 1986 's tax act .
But most experts agree that the concept that is to be introduced drags in great complexity ; they have been trying to head it off this year .
Ways and Means Chairman Rostenkowski backed a simplification plan in the pending House tax bill , but the plan turns out to be a big revenue loser .
Now the Senate 's stripped-down bill omits any proposal to deal with the corporate tax .
Proponents of simplification fear that the chances of getting it into the final bill are waning .
`` We hear it has low priority on the House side , '' says Samuel Starr of Coopers & Lybrand , CPAs .
If the law is n't changed , he says , `` we are left staring at rules that are almost impossible to implement , because there are so many complex depreciation calculations to do . ''
But Congress still could resolve the issue with other legislation this year or next , Starr adds .
HUGO 'S RAVAGES may be offset by immediate claims for tax refunds .
This law aids hurricane-wracked locales named by the president as disaster areas , as well as regions so designated after other 1989 disasters .
It lets victims elect to deduct casualty losses on either 1989 or amended 1988 returns , whichever offers the larger tax benefit ; they have until April 16 to choose .
Amending a 1988 return to claim a refund brings cash faster ; but for personal losses , there are other factors to consider , notes publisher Prentice Hall .
A loss -- after insurance recoveries -- is deductible only to the extent that it exceeds $ 100 and that the year 's total losses exceed 10 % of adjusted gross income ; victims may pick the year when income is lower and deductions higher .
In filing an original ( not amended ) return , a couple should consider whether damaged property is owned jointly or separately and whether one spouse has larger income ; that may determine whether they should file jointly or separately .
THE IRS DELAYS several deadlines for Hugo 's victims .
Returns for 1988 from people with six-month filing extensions were due Monday , but the IRS says people in the disaster areas wo n't be penalized for late filing if their returns are marked `` Hugo '' and postmarked by Jan. 16 .
Interest will be imposed on unpaid taxes , but late-payment penalties on the returns will be waived if the balance due and paid is 10 % or less of the liability .
IRS Notice 89-136 describes this and other deadline relief for Hugo 's victims .
Among the provisions : Fiscal-year taxpayers with returns due last Monday wo n't be penalized if they file -- or request an extension -- and pay tax due by Nov. 15 .
Excise-tax returns due by Oct. 31 or Nov. 30 may be delayed to Jan. 16 .
Extensions ca n't be granted for filing employment-tax returns due Oct. 31 or for depositing withheld taxes , but late penalties will be abated for deposits made by Nov. 15 .
The notice also grants relief for certain estate-tax returns .
ONE-DAY JAUNTS in a chartered boat were perks for permanent staffers of American Business Service Corp. , a Costa Mesa , Calif. , supplier of temporary workers .
The IRS denied cost deductions because few of the temps got to go aboard .
But the Tax Court said the limitations were reasonable and realistic and allowed the deductions .
USED-CAR BUYERS who try to avoid sales tax by understating prices paid in private deals are the targets of a New York drive .
Estimating that the state may lose $ 15 million a year , officials announced the filing of 15 criminal actions and `` hundreds '' of civil penalties .
WHEN AN IRA OWNER dies , the trustee of the individual retirement account must file forms 5498 reporting market values relating to the decedent and each beneficiary , with copies to the executor and beneficiaries .
IRS Revenue Procedure 89-52 describes the reporting requirements .
BIGGER THAN A BREADBOX was this cash hoarder 's reputation for honesty .
People often cite frugality and distrust of banks to justify cash caches to the IRS .
Gregory Damonne Brown of Fremont , Calif. , a hardworking , reclusive young bachelor , told that story to the Tax Court .
But judges usually find the real aim is to escape tax on hidden income ; and the IRS said Brown must have had such income -- although it uncovered no source -- because he deposited $ 124,732 in a bank account in 1982-84 while reporting income of only $ 52,012 .
Brown 's story :
The deposits came from savings kept in a Tupperware breadbox ; he saved $ 47,000 in 1974-81 by living with family members and pinching pennies and $ 45,000 of secret gifts from his remorseful father , who had abandoned the family in 1955 .
Brown had no proof ; but testimony of his mother and stepmother about his father and of an ex-employer about his honesty and habits satisfied a judge that Brown was truthful and his tale of gifts was possible .
The IRS offered no evidence of hidden sources of taxable income , so Judge Shields rejected its claims .
BRIEFS :
Asked how he made charitable gifts of $ 26,350 out of reported two-year income of $ 46,892 , Thomas H. McFall of Bryan , Texas , told the Tax Court he had understated his income .
The court rejected his incredible claims , denied his deductions , and imposed a negligence penalty ... .
Rep. Schaefer ( R. , Colo. ) entered a bill to exempt from tax rewards for tips leading to the arrest of violent criminals .
Kay Peterson mounts her bicycle and grinds up yet another steep , rocky path seemingly suitable only for mountain goats .
After a tortuous climb , she is rewarded by a picture-postcard vista : a glade of golden aspens under an azure Indian-summer sky .
This place is 12 miles into the back country -- a day-long trudge for a hiker , but reached by Ms. Peterson and six others in a mere two hours of pedaling fat-tired mountain bikes .
`` This , '' says Ms. Peterson , `` is what it 's all about . ''
Twelve hundred miles away , rangers at a Napa County , Calif. , state park are among the many who do n't quite share the enthusiasm .
This summer , speeding bikers were blamed for an accident in the Napa County park , in which a horse -- spooked on a trail that was closed to bikers -- broke its leg .
The animal had to be destroyed ; the bikers fled and were never found .
In numerous parks near San Francisco , rangers have been forced to close trails , set up speed traps and use radar guns to curb fast and reckless riding .
They have even sent helicopters in pursuit of bikers after hikers and equestrians complained they were being driven from trails .
`` We were being overrun , '' says Steve Fiala , trails coordinator of the East Bay Regional Park District .
Two years ago , the district decided to limit the bikes to fire roads in its 65,000 hilly acres .
From about 200,000 six years ago , the number of mountain bikes in the U.S. is expected to grow to 10 million in 1990 .
At least half that growth will have come in the past three years alone .
The controversy kicked up by the proliferation of these all-terrain bicycles is one of the most divisive storms to blow through the national conservation movement in recent memory .
Bikers -- many of them ardent environmentalists -- proclaim their sport an efficient , safe , fitness-promoting way to get back to nature , while asserting a right , as taxpayers , to pedal on public lands .
But the bikes ' burgeoning numbers , safety concerns and fear that they damage fragile landscapes have prompted pleas , from the Sierras to the Eastern Seaboard , to ban them from the back country .
Key to the issue is that the bikes , in skillful hands , can go virtually anywhere , and in reckless hands can become vehicles of terror .
An adept bicyclist can leap from a dead stop to the top of a picnic table without losing balance .
Such skills allow riders to fly down treacherous mountain grades at speeds of up to 40 miles an hour -- a thrill for the cyclist but a nightmare for unsuspecting hikers or equestrians .
For harried public-land managers across the nation , the response is increasingly to shut the gates .
The state of California , following the lead of some regional parks , recently adopted regulations that closed nearly all hiking paths in state parks to mountain bicycles .
The move largely consigns them to roads used by motorized vehicles .
Most other states have enacted similar bans .
The bikes are unwelcome on trails in national parks .
Even the U.S. Forest Service , whose lenient `` multiple-use '' philosophy permits motorized vehicles on thousands of miles of its trails across the U.S. , has begun to close some lands to the bikes , including major portions of the popular Pacific Crest Trail , which stretches from California to Canada .
Often these closings come after vigorous anti-bike lobbying by conservation organizations , the politically potent Sierra Club among them .
Sierra has been instrumental in securing a number of the California bans .
It has been waging an all-out campaign to beat back a proposal , pushed by Utah bike groups , to allow the cycles in federally designated wilderness areas , where they are now prohibited .
Yet Sierra 's hard-line stance has created something of a rift in the organization , which estimates that 17 % of its 500,000 members own mountain bikes .
Pressure from these members prompted the club recently to soften its anti-bike rhetoric ; it no longer , for example , lumps the bikes into the same category as motorcycles and other terrain-marring off-road vehicles .
But the club still insists that public lands ought to be closed to the bikes unless studies indicate the bikes wo n't injure the environment or other users .
`` I have a mountain bike , yet as a hiker I 've been run off the road by kids careening down a fire trail on them , '' says Gene Coan , an official at Sierra 's headquarters in San Francisco , echoing the concerns of many members .
`` People who feel that cyclists should be banned from an area are n't looking at the whole picture , '' complains Mark Langton , associate editor of Mountain and City Biking magazine in Canoga Park , Calif .
Mr. Langton is among the legions of bikers who got their first taste of wilderness as hikers or backpackers .
He says fellow bikers show the same concern for the land that they demonstrated as hikers ; many are appalled that the conservation community would suddenly consider them the enemy .
To fight back , activists such as Mr. Langton are forming groups to lobby land managers over access issues and undertake education programs to show that the bikes can responsibly share trails .
Mr. Langton 's group , Concerned Off-Road Bicyclists Association , mounted petition drives to help keep open certain Santa Monica Mountain trails designated for closing .
Biking groups in Montana , Idaho , Michigan and Massachusetts have won similar concessions , says Tim Blumenthal , mountain bike editor of Bicycling magazine .
These groups have been trying to improve the mountain biker 's image ; in the San Francisco-area park district where a ranger was clobbered by a cyclist this summer bikers have formed a volunteer patrol to help rangers enforce regulations , and to school riders in proper trail etiquette .
Even staunch anti-bike Sierra members concede that 10 % of all riders cause most of the problems .
While some are renegade riders who simply scorn regulations , much bad riding simply reflects ignorance that can be corrected through `` education and peer pressure , '' says Jim Hasenauer , a director of the International Mountain Biking Association .
`` I think we 're making progress . ''
Few would have foreseen such a furor when , a decade ago , some Marin County bicycle enthusiasts created a hybrid bike using fat tires , lightweight metallurgy and multi-gear technology .
They wanted a machine that would allow them to pedal into rugged terrain then inaccessible to cycles .
They got a machine more responsive , more stable and in many ways easier to ride than the thin-tired racing bikes that then were the rage .
When the bikes first entered mass production in 1981 , they were dismissed as a fad .
Last year , 25 % of the 10 million bicycles sold in the U.S. were mountain bikes .
In California , a bellwether market , they accounted for more than 80 % of all bike sales .
The majority of the bikes never even make it into the high country .
City dwellers love them because they shift smoothly in traffic , bounce easily over curbs and roll through road glass with far fewer flat tires than racing bikes .
Crested Butte , population 1,200 , is a bastion of the sport .
By one estimate , everyone here under 50 owns at least one bike .
The town is home to the Mountain Bike Hall of Fame and it hosts the annual Fat Tire Bike Week .
This summer , the jamboree attracted more visitors than the busiest week of the town 's winter ski season .
David Lindsey , chairman of the Fat Tire Bike celebration , muses that the bike 's popularity may be a combination of technology and nostalgia .
`` The mountain bike feels as comfortable as the ` paperboy ' bike you had as a kid , but it can do so much more , '' he says .
The following issues were recently filed with the Securities and Exchange Commission :
Canada 's Province of Nova Scotia , shelf offering of up to $ 550 million of debentures .
Golar Gas Holding Co. , a subsidiary of Gotaas-Larsen Shipping Corp. , offering of $ 280 million first preferred ship mortgage notes , via Merrill Lynch Capital Markets .
H.F. Ahmanson & Co. , offering of four million shares of noncumulative convertible preferred stock , Series B. , via Goldman , Sachs & Co , First Boston Corp. , and Merrill Lynch .
Shared Technologies Inc. , offering of 2.5 million common shares , via Smetek , Van Horn & Cormack Inc. and Oakes , Fitzwilliams & Co .
Stock-market tremors again shook bond prices , while the dollar turned in a mixed performance .
Early yesterday , investors scrambled to buy Treasury bonds for safety as stock prices plummeted and fears mounted of a replay of Friday .
But stocks later recovered , erasing most of their early declines .
That cut short the rally in Treasury bonds and depressed prices moderately below late Monday 's levels .
The Dow Jones Industrial Average , down more than 60.25 points early in the day , finished 18.65 points lower at 2638.73 .
Long-term Treasury issues declined about half a point , or $ 5 for each $ 1,000 face amount .
`` The stock market clearly is leading the bond markets , '' said Jack Conlon , an executive vice president at Nikko Securities .
`` People are breathing a major sigh of relief that the world did n't end Monday morning '' or yesterday .
Gold , a closely watched barometer of investor anxiety , was little changed .
The dollar initially fell against other major currencies on news that the U.S. trade deficit surged in August to $ 10.77 billion .
But the dollar later rebounded , finishing slightly higher against the yen although slightly lower against the mark .
Federal Reserve officials sent another signal of their determination to shore up investor confidence .
In an apparent attempt to keep a lid on short-term interest rates , the Fed once again pumped money into the banking system .
But the Fed move was a small gesture , traders said .
Fed officials appear reluctant to ease their credit grip any further because a bold move does n't appear necessary , several investment managers said .
The Fed has allowed a key short-term interest rate to decline about one-quarter percentage point .
The federal funds rate on overnight loans between banks has been hovering around 8 3\/4 % , down from 9 % previously .
Although stocks have led bonds this week , some traders predict that relationship will reverse during the next few weeks .
Nikko 's Mr. Conlon fears a huge wave of Treasury borrowing early next month will drive down Treasury bond prices .
That , coupled with poor third-quarter corporate-earnings comparisons , `` will make trouble for the equity market for the next two to three months , '' he says .
But several other traders contend investors have overreacted to junk-bond jitters , and that stock prices will continue to recover .
`` They shot the whole orchestra just because the piano player hit a bad note , '' said Laszlo Birinyi , president of Birinyi Associates Inc. , referring to the stock market 's plunge Friday on news of trouble in financing the UAL Corp . buy-out .
In major market activity : Treasury bond prices fell .
The yield on 30-year Treasury bonds climbed back above 8 % , ending the day at 8.03 % .
The dollar was mixed .
Late yesterday in New York , the dollar rose to 142.75 yen from 141.80 yen Monday , but fell to 1.8667 marks from 1.8685 marks .
The Consumer News and Business Channel cable network and U.S. News & World Report have formed a joint venture to produce cable program versions of special issues of the magazine .
The programs will run on the cable network the Sunday evening immediately prior to the release of the special issue of U.S. News & World Report .
CNBC is a joint venture of the National Broadcasting Co. , a unit of General Electric Co. , and Cablevision System Corp .
Advertisers will be offered an advertising package , which for a single price , will include time on the CNBC program and ad pages in the special guides .
CNBC will produce six , one-hour programs , beginning in April 1990 .
The first program scheduled in the joint venture is `` The 1990 Homeowner 's Guide . ''
Other programs and special issues will be based on themes of health , jobs , personal finance , the best colleges , and investments .
The programs will be written and produced by CNBC , with background and research provided by staff from U.S. News & World Report .
Skoal Daze
I 've learned the hard way that too much booze Takes revenge the next day about nine ; No wonder I say , `` I drink to your health '' -- It certainly is n't to mine !
-- George O. Ludcke .
Spaced Out
Those supermarket tabloids Make me feel slow Because I still have n't seen
-- Bruce Kafaroff .
Daffynition
Repression : emote control .
-- Daisy Brown .
Weyerhaeuser Co. reported a one-time gain and strong wood-product sales that offset weakness in pulp and paper to fuel a 15 % jump in third-quarter net income to $ 166.8 million , or 78 cents a share .
In the 1988 third quarter , the forest-products company reported profit of $ 144.9 million , or 69 cents a share .
Sales rose 9 % to $ 2.57 billion from $ 2.36 billion .
For the nine months , the company posted a 14 % rise in profit to $ 469.8 million , or $ 2.21 a share , from $ 410.3 million , or $ 1.95 a share .
Sales rose 9 % to $ 7.54 billion from $ 6.95 billion .
Results for the 1989 third quarter and nine months include a pretax loss of $ 33 million from the company 's business improvement and refocusing program , and a gain of $ 49 million on the sale of a subsidiary 's common stock .
Forest-products operations strengthened in the third quarter , while paper operations were dogged by higher costs , soft newsprint exports and a strong Japanese yen .
Some competing forest-products firms have recently reported improved results due to strong pulp and paper business .
Weyerhaeuser 's pulp and paper operations were up for the nine months , but full-year performance depends on the balance of operating and maintenance costs , plus pricing of certain products , the company said .
Looking ahead to the fourth quarter , the company said export log and lumber markets will be weak , while panel and plywood markets will be stronger .
Pulp and paper performance depends on cost and price variables , the company said .
Bankers Trust New York Corp. became the latest major U.S. bank to increase reserves for its loans to less-developed countries , making a $ 1.6 billion third-quarter addition to its provision .
The bank also said it expects to report a $ 1.42 billion loss for the third quarter and a loss for the full year .
The new reserves bring the company 's provision for loans to Third World countries to $ 2.6 billion , or 85 % of Bankers Trust 's medium and long-term loans to these countries .
`` Step up to the plate and take the big swing .
Get the problem behind you and do n't look back , '' said James J. McDermott , analyst at Keefe , Bruyette & Woods , in approving of the move .
Bankers Trust `` has had the capacity to do this for some time , '' the analyst said .
He expects Citicorp to take a similar step this year .
Citicorp yesterday reported a 9 % third-quarter earnings drop , which analysts called a bit disappointing , while Manufacturers Hanover Corp. posted a $ 789 million loss for the quarter after adding $ 950 million to its reserve for loans to less-developed countries .
Three other major U.S. banks posted earnings increases .
Wells Fargo & Co. of San Francisco posted a 17 % jump .
PNC Financial Corp. , the parent of Pittsburgh National Bank , reported net income climbed 9.8 % , while net for Banc One Corp. of Columbus , Ohio , grew 3.8 % .
Citicorp
Analysts were only slightly disappointed by Citicorp 's numbers .
`` There 's nothing in here that 's horrible and nothing to make you think they 're setting the world on fire , '' said Carole Berger , analyst for C.J. Lawrence , Morgan Grenfell Inc .
Earnings from the bank 's global consumer business grew 27 % .
`` The consumer business continues to drive the earnings stream , '' said Mr. McDermott of Keefe , Bruyette & Woods .
Corporate finance and trading results in member countries of the Organization for Economic Cooperation and Development were `` relatively flat , sometimes choppy , '' the bank said , and profit for the area sank 27 % .
The cross-border loan portfolio reflected `` adjustment problems and episodic payment patterns , '' the bank said no interest payments from Argentina in the nine months and none from Brazil in the third quarter , while Venezuela brought itself `` substantially current . ''
Overall , the portfolio narrowed its quarterly loss to $ 70 million from $ 80 million a year earlier .
`` People were waiting to see if we would take an additional provision '' for medium-term and long-term loans to less-developed countries , a Citicorp spokesman said .
But he reiterated the bank 's position that it is comfortable with the current level of $ 2.6 billion , covering about 30 % of the $ 8.9 billion of such loans outstanding .
Ronald I. Mandle , analyst at Sanford C. Bernstein & Co. , called Citicorp 's venture-capital gains of $ 93 million before taxes `` strong . ''
A `` concerning '' item the analyst cited was the 10 % jump in expenses , which the bank attributes to costs of expanding both its consumer credit-card operations and its overseas branch business .
Citicorp 's spokesman said , however , that the bank is maintaining those expenses in proportion to revenue growth .
Wells Fargo
Wells Fargo continued to generate one of the highest profit margins among major banks , minimizing a drop in net interest margin with 13 % third-quarter growth in high-yielding business loans and similar growth in mortgages .
Its margin fell only seven basis points , or 7\/100ths of a percentage point , from a year ago , compared with a 13-point drop at Security Pacific Corp. and much larger declines among banks in other parts of the country .
As a result , Wells Fargo 's net interest income rose $ 36.3 million , or 7 % , to $ 537 million for the quarter .
Non-interest income fell slightly to $ 191.9 million from $ 193.3 million , while Wells Fargo continued to rigorously control non-interest expense , which was almost flat at $ 393.4 million .
The combination of solid loan growth with tight expense control gave Wells Fargo a 1.25 % return on average assets for the quarter , about 40 % higher than Security Pacific 's and a profit ratio matched by only two or three other major banks in the U.S. .
Wells Fargo 's return on equity increased to 24.4 % from 23.8 % .
Wells Fargo has sold all of its non-trade loans made to less-developed countries , and managed to partly reverse the sharp rise in domestic non-accrual loans , which fell 8 % from the previous quarter to $ 806.8 million from $ 880.9 million .
But the amount was still 39 % higher than the year-ago level , and 25 % higher as a percentage of total loans .
That trend , and Wells Fargo 's heavy exposure to leveraged buy-outs , are about the only worries analysts have about Wells Fargo 's financial picture .
Wells Fargo is rebuilding its loan-loss reserve , which increased to $ 711 million at Sept. 30 from $ 664 million the previous quarter but was down from $ 852 million a year ago , when the bank still had some shaky foreign loans .
Manufacturers Hanover
Manufacturers Hanover said that excluding the addition to its reserves , certain tax benefits , and a one-time $ 16 million gain on the sale of an interest in a foreign leasing company , third-quarter earnings were $ 75 million .
The comparable year-earlier number was $ 56 million , a spokesman said .
The bank 's additional provisions brought reserves for loans to less-developed countries to $ 2.4 billion , covering 36 % of its medium and long-term loans outstanding to these nations .
The net interest margin - the difference between the bank 's cost of funds and what it receives as interest payments -- improved in the quarter , as did certain areas of wholesale banking .
Fees from syndicating loans dropped 48 % , to $ 21 million .
`` We did n't take part in a lot of deals '' in the quarter `` because their credit quality was poor , '' the spokesman said .
Expenses unrelated to interest rose 5.4 % , to $ 541 million .
PNC Financial
PNC Financial cited higher income from sources unrelated to interest and said it continues to cut costs .
Net interest income in the third quarter edged up 1.4 % , to $ 317.7 million .
Trust income grew 15 % , to $ 49.9 million , while service charges , fees and commissions increased 22 % , to $ 79.4 million .
The bank 's total allowance for credit losses was $ 502.1 million , or 1.82 % of total loans .
Prime Minister Rajiv Gandhi set a date next month for general elections that some analysts say could cost him and his ruling Congress ( I ) Party control of the government .
Other analysts say the Indian leader could retain control with a slim majority or be forced to rule as the dominant partner in a coalition with other parties .
Elections in this large , diverse and passionate nation are always hard to predict .
Much depends on the opposition , a loose group of regional and ideological parties led by former Gandhi cabinet minister Vishwanath Pratap Singh .
The biggest certainty is that the elections will be a vote for or against Mr. Gandhi and his five years in power -- five years of ups and downs , promises and disappointments and wide fluctuations in popularity .
Yesterday , four days after an unusual parliamentary defeat for the ruling party , Mr. Gandhi called elections for the lower house of Parliament on Nov. 22 and 24 .
The elections will be held in different states on one of the two days .
( The lower house 's five-year term expires in January ; the Parliament 's upper house is appointed . )
The elections will be a rigorous test for the 45-year-old prime minister and Congress ( I ) , which in various forms has ruled for 40 of India 's 42 years of independence .
After a landslide win in 1984 in polls held after the assassination of his mother , Indira Gandhi , Mr. Gandhi saw his popularity begin a roller coaster ride .
His early promises to make India a modern nation remain bogged down in bloated bureaucracy .
His pledge to clean up local administration and Indian politics , including his own party , went unfulfilled .
His `` Mr. Clean '' image was muddied by an arms-kickback scandal , which will be a major campaign issue .
Some analysts predict that disappointment in Mr. Gandhi 's spent pledge to reduce corruption and heavy-handed local government will crest at the polls .
`` There 's a wide feeling of indignation across the country , '' says Bhabani Sen Gupta of the Center for Policy Research , in New Delhi .
`` I think the people will be judging the regime by a petty policeman , by a corrupt revenue collector .
This could be a big protest against an administrative failure . ''
Even if the Congress ( I ) retains control of the government , Mr. Gandhi 's ability to push through major initiatives might be hobbled by a thinner majority .
Economic analysts call his trail-blazing liberalization of the Indian economy incomplete , and many are hoping for major new liberalizations if he is returned firmly to power .
The Lok Sabha , or lower house of Parliament , has 542 elected and two appointed seats .
In 1984 , the Congress ( I ) captured 405 seats , the largest victory in the history of Indian democracy .
The landslide was fueled by panic that prevailed in India at the time .
Mrs. Gandhi had been assassinated by separatist Sikhs , and many Indians feared their country might split apart .
In the previous three general elections , similar national issues clinched the vote .
In 1971 , the Congress Party won after India 's victory in the Bangladesh war .
In 1977 , Mrs. Gandhi was thrown out of office after her 19-month emergency rule , and in 1980 , after her successors made a mess of their three years in power , she was restored to office .
Most political analysts say that if Mr. Gandhi 's opposition unites to field single candidates in most precincts , the Congress ( I ) will lose big .
But if the opposition remains fractured , the Congress ( I ) could win a small majority , or lead a coalition government .
Chimanbhai Mehta , a parliamentarian and former Gandhi ally , predicts Congress ( I ) will win only 150 seats , a quarter of the house , if the opposition fields single candidates in 80 % of the races .
Analysts say the opposition will struggle this week to unite , and its success will be clear only when it announces its final list of parliamentary candidates .
The arms-kickback scandal is likely to be one of the big talking points in the campaign , but it 's unclear how it is viewed by average Indian voters .
In 1986 , India signed a $ 1.4 billion contract with AB Bofors , a unit of Nobel Industries Sweden AB , to purchase 400 artillery pieces .
The contract was negotiated by the countries ' two prime ministers , and was supposed to be free of commissions or agents ' costs .
In April 1987 , evidence surfaced that commissions were paid .
The opposition charged that the money was used to bribe Indian government officials , an allegation denied by Mr. Gandhi 's administration .
But many of his statements on the issue in Parliament subsequently were proven wrong by documentary evidence .
The scandal has faded and flared , but recent disclosures propelled it back onto the front pages , and that has helped galvanize the opposition , which last week blocked passage of two constitutional amendment bills .
It was the first time in 20 years that such government bills were defeated .
In a country where a bribe is needed to get a phone , a job , and even into a school , the name Bofors has become a potent rallying cry against the government .
That illustrates the kind of disappointment many Indians feel toward Mr. Gandhi , whom they zestfully elected and enthusiastically supported in his first two years in power .
His term has produced no spectacular failures in politics , in the economy or on the military front , and has chalked up some successes .
But the average Indian had tremendous hope in the youthful leader and his promise to make both government and the ruling party more effective and less corrupt .
His failures in those two areas deeply , and sometimes bitterly , disappointed many Indians .
`` We do n't like the Congress ( I ) , '' says Sooraji Jath , a farmer in the western state of Gujarat .
`` The Congress government is taking the farmers ' bread and not giving us any support .
When there are well problems , light problems , road problems , the government tells us to forget it . ''
The greatest thing going for Mr. Gandhi and the Congress ( I ) Party is the poor reputation of the opposition .
Even if it unites for the elections , its coherence is likely to be temporary .
When the Congress ( I ) lost the 1977 election , following Mrs. Gandhi 's hated emergency rule , a similar coalition took power and then disintegrated .
Many Indians fear a repeat of that experience .
March 24 , 1986 :
AB Bofors , a unit of Nobel Industries Sweden AB , enters into a $ 1.4 billion contract with India 's Defense Ministry to supply 400 Bofors FH-77B 155-mm field howitzer guns .
In 1985 , Prime Minister Rajiv Gandhi , in his talks with then Swedish Prime Minister Olof Palme , imposed the condition that the contract have no middlemen .
April 16 , 1987 :
Swedish National Radio reports that about $ 40 million -- nearly 3 % of the total contract -- was paid by Bofors as commissions to middlemen .
June 1 , 1987 :
Sweden 's National Audit Bureau releases its report confirming payment of about $ 40 million to unidentified Indians .
The report says that investigations were severely hampered by lack of cooperation from Bofors .
Bofors says it ca n't disclose the names of the middlemen because it would jeopardize industrial confidentiality .
A portion of the report containing names of the middlemen is withheld by officials citing bank secrecy requirements .
Aug. 6 , 1987 :
Prime Minister Gandhi tells the Indian Parliament , `` ... neither I nor any member of my family has received any consideration in these transactions .
That is the truth . ''
Aug. 26 , 1987 :
Bofors admits payments of $ 41 million to middlemen .
April 22 , 1988 :
The Hindu newspaper publishes facsimiles of bank documents for foreign-exchange remittances and letters between Bofors and certain private companies related to the sale of the guns to India .
April 26 , 1988 :
A parliamentary investigative committee dominated by the Congress ( I ) Party concludes that there were no middlemen in the deal and no payment to any Indian individual or company .
July 18 , 1989 :
The comptroller and auditor-general of India reports serious lapses in the government 's technical and financial evaluation of the Bofors deal .
Sept. 15 , 1989 :
Retired army Chief of Staff Krishnaswami Sundarji discloses in an interview that he suggested in May 1987 that the government cancel the Bofors contract .
According to Gen. Sundarji , that would have forced Bofors to disclose the names of the middlemen who received kickbacks from the company .
His recommendation was rejected by the government .
Oct. 9. 1989 :
The Hindu newspaper publishes the withheld portion of the Swedish National Audit Bureau 's report .
The disclosures state that commissions were paid by Bofors to an Indian agent of the arms company .
Parsow Partnership Ltd. and Elkhorn Partners L.P. said they may seek proposals from third parties relating to a sale or restructuring of CACI International Inc .
In a filing with the Securities and Exchange Commission , Parsow and Elkhorn , which together hold 8.685 % of CACI 's common shares , said they think it is in the best interest of CACI stockholders that the company be sold .
CACI , based in Arlington , Va. , said it had n't seen the filing by Parsow and Elkhorn and therefore had no comment .
The partnerships said they may seek board representation , and they may seek the support of CACI 's board and other major shareholders in connection with their plans .
According to the filing , Parsow and Elkhorn are based in Elkhorn , Neb. , and are controlled by the same general partner , Alan S. Parsow .
Their combined stake consists of 880,500 CACI common shares , including 86,500 shares bought in the past 60 days at $ 2.3125 to $ 2.4375 a share .
Additional shares may be bought or sold in the open market , in private transactions or otherwise , depending on market conditions and other factors .
The inverse trading relationship between bonds and stocks was interrupted yesterday as bonds fell despite a modest decline in stock prices .
But bond investors continue to keep a close watch on the jittery stock market .
In early trading , investors were bidding bond prices higher as stocks tumbled and fears mounted that Friday 's stock market debacle would be repeated .
But a partial recovery in the Dow Jones Industrial Average , which had been down more than 60 points in midmorning , dashed those expectations .
Treasury bonds also were hurt late in the day by a $ 4 billion offering by the Tennessee Valley Authority and the prospect of a huge amount of new agency debt .
`` Bond investors were hoping that stock prices would continue to fall , '' said Roger Early , a vice president at Federated Investors Inc. , Pittsburgh .
`` When stocks stabilized , that was a disappointment . ''
Meanwhile , for the second straight day , the bond market paid little attention to the Federal Reserve 's open market operations .
Fed officials injected more cash into the banking system by arranging $ 1.5 billion of repurchase agreements during the usual pre-noon intervention period .
The move was meant to keep a lid on interest rates and to boost investor confidence .
`` The intervention has been friendly , meaning that they really did n't have to do it , '' said Maria Fiorini Ramirez , money-market economist at Drexel Burnham Lambert Inc .
She said a more aggressive move was n't needed .
The Fed also appears reluctant to ease credit conditions further .
It already has allowed the closely watched federal funds rate to decline 1\/4 percentage point to about 8 3\/4 % from its previous target level of about 9 % .
The rate , which banks charge each other on overnight loans , is considered an early signal of changes in Fed policy .
It ended at about 8 11\/16 % yesterday , but was as low as 8 1\/2 % Monday .
The Treasury 's benchmark 30-year bond fell more than 1\/2 point , or over $ 5 for each $ 1,000 face amount , while the yield moved above 8 % for the first time since Thursday .
Investment-grade corporate , municipal and mortgage-backed securities also fell .
But most junk bonds closed unchanged after opening slightly higher on bargain-hunting by institutional investors .
Some so-called high-quality junk issues , such as R.H. Macy & Co. 's 14 1\/2 % subordinated debentures , rose .
The Macy 's issue closed up about one point at a bid price of 97 .
The TVA 's public debt offering was its first in 15 years .
Strong investor demand prompted it to boost the size of the issue from $ 3 billion .
Traders said hedging related to the TVA pricing also pressured Treasury bonds .
`` Underwriters of the TVA bonds reduced their market risk by selling Treasurys to cover at least part of their { TVA } holdings , '' said James R. Capra , a senior vice president at Shearson Lehman Government Securities Inc .
The TVA bonds also `` served to remind the market that there will be even more new supply , '' said Lawrence N. Leuzzi , a managing director at S.G. Warburg Securities & Co .
Today the Treasury will announce the size of its next two-year note sale and Resolution Funding Corp. will announce details of its first bond offering .
Some traders estimate $ 9.75 billion of new two-year Treasurys will be sold next week , and they expect Refcorp to offer $ 4 billion to $ 6 billion of long-term `` bailout '' bonds .
Refcorp was created to help fund the thrift bailout .
Another agency issue came to market yesterday .
The Office of Finance of the Federal Home Loan Banks said it priced a four-part $ 2.27 billion bond offering for the banks to yield from 8.125 % to 8.375 % .
The release of several economic reports had little impact on the market , including a report that the U.S. trade deficit expanded to a surprisingly wide $ 10.77 billion in August , up from a revised $ 8.24 billion in July .
The August gap was expected to have expanded to $ 9.1 billion .
Treasury Securities
Treasury securities were essentially flat to about 1\/2 point lower .
The benchmark 30-year bond was quoted late at 100 28\/32 to yield 8.04 % , compared with 101 19\/32 to yield 7.97 % Monday .
The latest 10-year notes were quoted late at 99 25\/32 to yield 8.01 % , compared with 100 1\/32 to yield 7.97 % .
Short-term rates increased .
The discount rate on three-month bills rose to 7.52 % for a bond-equivalent yield of 7.75 % .
The rate on six-month bills rose to 7.53 % for a bond-equivalent yield of 7.92 % .
Corporate , Other Issues
Investment-grade corporate bonds ended 1\/4 to 1\/2 point lower , while most junk bonds ended unchanged .
The TVA 's huge $ 4 billion offering dominated attention in the new-issue market .
TVA offered $ 2 billion of 30-year bonds priced to yield 9.06 % ; $ 1 billion in 10-year notes priced to yield 8.42 % ; and $ 1 billion in five-year notes priced to yield 8.33 % .
The TVA , which operates one of the nation 's largest electric power systems , is a corporation wholly owned by the U.S. government .
Yesterday 's bond sale was part of a $ 6.7 billion refinancing plan to pay off high-interest debt the TVA owes the Federal Financing Bank , an arm of the Treasury .
Meanwhile , Lockheed Corp. priced a $ 300 million note offering to yield 9.39 % .
Mortgage-Backed Securities
The derivative mortgage-backed market revived after a brief hiatus as two new Remics totaling $ 850 million were offered and talk circulated about two more issues that could be priced today .
The revival of the real estate mortgage investment conduit market reflected the relative calm in the mortgage market after two days of volatile trading .
Dealers noted that it 's difficult to structure new Remics when prices are moving widely .
The two Remics priced were a $ 500 million Federal Home Loan Mortgage Corp. issue underwritten by Salomon Brothers Inc. and a $ 350 million Federal National Mortgage Association deal underwritten by Greenwich Capital Markets .
The Remic issuance supported prices of Freddie Mac and Fannie Mae securities , which held up better than Government National Mortgage Association securities during an afternoon sell-off .
Ginnie Mae 9 % securities for November delivery ended at 97 29\/32 , down 7\/32 ; 9 1\/2 % securities at 99 31\/32 , down 6\/32 ; and 10 % securities at 101 29\/32 , down 5\/32 .
Freddie Mac 9 % securities were at 97 5\/32 , down 3\/32 .
The Ginnie Mae 9 % issue was yielding 9.43 % to a 12-year average life assumption , as the spread above the Treasury 10-year note held at 1.42 percentage points .
Municipals
Confusion over the near-term trend for rates dominated the municipal arena , as gyrations in the stock market continued to buffet bonds .
Long tax-exempt dollar bonds were mostly flat to 3\/8 point lower after a whipsaw session of moving inversely to stocks in modest dealer-led trading .
Prices of pre-refunded municipal bonds were capped by news that Chemical Securities Inc. , as agent for a customer , will accept bids today for two large lists of bonds that include many such issues .
The lists total $ 654.5 million .
Pre-refunded bonds are called at their earliest call date with the escrowed proceeds of another bond issue .
Meanwhile , several new issues were priced .
Underwriters led by PaineWebber Inc. set preliminary pricing for $ 144.4 million of California Health Facilities Financing Authority revenue bonds for Kaiser Permanente .
Tentative reoffering yields were set from 6.25 % in 1993 to 7.227 % in 2018 .
As part of its College Savings Plan , Connecticut offered $ 100.4 million of general obligation capital appreciation bonds priced to yield to maturity from 6.25 % in 1994 to 6.90 % in 2006 , 2007 and 2009 .
A Chemical Securities group won a $ 100 million Oregon general obligation veterans ' tax note issue due Nov. 1 , 1990 .
The 6 3\/4 % notes yield 6.25 % .
Foreign Bonds
West German government bond prices took a wild roller-coaster ride , pulled down by Monday 's U.S. stock market gains then up by a wider-than-expected U.S. trade deficit and falling U.S. stock prices .
West Germany 's 7 % bond due October 1999 was at 99.95 late yesterday , off 0.10 point from Monday , to yield 7.01 % .
The 6 3\/4 % notes due April 1994 were up 0.10 point to 97.85 to yield 7.31 % .
British government bonds surged on renewed volatility in the stock market .
The Treasury 11 3\/4 % bond due 2003\/2007 rose 23\/32 to 112 10\/32 to yield 10.03 % .
But Japanese bonds ended weaker .
The benchmark No. 111 4.6 % bond due 1998 ended on brokers ' screens at a price of 96 , off 0.15 point to yield 5.27 % .
A House-Senate conference approved an estimated $ 67 billion fiscal 1990 spending bill that provides a 28 % increase for space research and development and incorporates far-reaching provisions affecting the federal mortgage market .
The current ceiling on home loans insured by the Federal Housing Administration would be increased to $ 124,875 .
Separately , the bill gives authority to the Bush administration to facilitate the refinancing of federally subsidized loans for low-income and moderate-income homeowners .
The second provision , affecting so-called 235 mortgages , has met strong opposition from investment bankers represented by the Public Securities Association .
And a squad of influential former Senate aides employed by the Wall Street firm Salomon Brothers came to the Capitol in a vain attempt to strip the provision .
By an 11-2 margin , Senate negotiators voted to preserve the 235 mortgage refinancing plan , and despite powerful allies , the opposition found itself undercut by an unusual alliance of liberals and conservatives .
The government currently is subsidizing an estimated 23,000 loans above 11 % under the 235 program , and however disruptive to private investors , the refinancing is expected to yield at least $ 15 million in savings in fiscal 1990 .
This sum has been guarded jealously by appropriators anxious to offset spending elsewhere , and conservative Sen. Phil Gramm cast the fight as a populist stand against monied interests .
`` We are stewards here , not of the mortgage companies , but the taxpayers , '' said the Texas Republican .
The action came as the administration won final congressional approval of $ 9 million in assistance for elections scheduled in Nicaragua in February .
The bulk of the money would be funneled through the National Endowment for Democracy , but the legislation is so vaguely written that it has been dogged by questions regarding the money 's true purpose and its ultimate destination .
The Senate had refused late Friday to invoke cloture and limit debate , but behind the bipartisan leadership , a solid majority took shape yesterday and brushed aside amendments seeking to cut the total package or steer it away from direct aid to political parties .
Final approval -- on a 64-35 roll call -- was never in doubt , but the opposition drew an unusual mix of senators , including Republicans Jesse Helms and Warren Rudman and Democrats Bill Bradley and John Glenn .
The money will be applied for voter registration and election monitoring , but more than half is likely to go to the Union Nacional Opositora party .
Critics warned such cash contributions may only undercut the opposition party 's standing , and one irony is that under Nicaraguan law a major portion of the opposition party 's funds must be shared with the government 's Supreme Electoral Council .
Within the appropriations conference yesterday , the $ 67 billion measure is the second largest of the annual domestic spending bills and covers a disparate collection of accounts for science , housing , veterans and the environment .
The decision to raise the ceiling on FHA home loans still faces strong opposition in the House .
But it is driven by the same fiscal pressures that have forced lawmakers to resort to various bookkeeping devices to juggle as much as $ 1 billion in spending that would otherwise put the bill over budget .
These costs will complicate the budget picture in fiscal 1991 , and the measure further commits Congress to a set of costly projects , including the first construction funds for the space station .
The station is promised $ 1.8 billion within the $ 5.36 billion provided for research and development in the National Aeronautics and Space Administration , and the nation 's high-speed aerospace plane -- cut by the Senate -- could receive as much as $ 60 million in new funds or transfers .
Similarly , the House agreed to add back $ 62 million to continue work on the advanced communications technology satellite , being developed by General Electric Co .
And while setting a statutory limit of $ 1.6 billion on the automated space probe , the conference appropriated $ 30 million for the start-up of the CRAF-Cassini mission , a successor to the Voyager space probe .
Among major domestic agencies , the Environmental Protection Agency stands to receive increases significantly beyond those sought by the administration , with pollution abatement and control accounts growing by 14 % to about $ 829.9 million .
An estimated $ 1.57 billion is separately allocated for the National Science Foundation , and within the Housing and Urban Development Department , more than $ 9.2 billion is provided for federally assisted housing , including an expanded effort to modernize public housing units that serve the poorest families .
To an unusual degree , the massive bill has become a vehicle for lawmakers to earmark funds for projects in home states .
While the practice was discouraged in the past , the conference agreement is laced with veterans ' hospitals , environmental projects and urban grants designated for specific communities .
The most striking example yesterday may have been in community development funds , where the two houses had separately approved a total of 27 projects valued at $ 20 million , and the conference added 15 more valued at $ 8 million to ostensibly preserve `` balance '' between the House and Senate .
Yesterday 's conference agreement is the second major bill to emerge from negotiations this week , as appropriators approved a fiscal 1990 transportation bill late Monday that includes a sweeping ban on smoking on most domestic airline flights .
An exemption will remain for flights longer than six hours to Hawaii and Alaska , but estimates by the tobacco industry yesterday indicate all but about 30 flights would be covered .
Separately , a third conference report covering an $ 18.4 billion Treasury and Postal Service bill was sent to the Senate after passing the House on a 383-30 roll call yesterday .
And after weeks of delay , the appropriations process is beginning to take some final shape .
Defense and foreign aid are the two most critical areas remaining from the administration 's standpoint .
And among domestic programs , the most serious threat is White House opposition to abortion riders attached to separate bills funding the District of Columbia and Department of Health and Human Services .
The same issue threatens to spill over to the foreign aid debate , and Mr. Bush also is threatening to veto any agreement that preserves Senate-passed provisions renewing U.S. support for the United Nations Fund for Population Activities .
In a sharply written letter , Rep. David Obey , chairman of the House appropriations subcommittee for foreign operations , warned Mr. Bush that the result of his `` ultimatum '' could weaken efforts to accommodate the administration elsewhere .
`` As a result of your ultimatum , '' writes the Wisconsin Democrat , `` I guess there is no longer any point in taking administration views into account on other items in conference , inasmuch regardless of their resolution you apparently intend to veto this bill .
Markets usually get noticed because they soar or plunge .
Gold , which has n't risen or fallen significantly in quite some time , yesterday achieved what may be a new level of impassiveness : The most actively traded futures contracts closed unchanged despite nervous fluctuations in both the dollar and the stock market .
The settlement prices of the December , February and April gold contracts were even with Monday 's final prices .
The December 1989 contract , which has the greatest trading volume , ended at $ 371.20 an ounce .
The other months posted advances of 10 cents to 20 cents an ounce .
According to one analyst , Bernard Savaiko of PaineWebber , New York , the stock market 's ability on Monday to rally from last Friday 's decline -- which seemed to indicate that the economy was n't going to fall either -- took the starch out of precious metals prices , and out of gold 's , in particular .
Yesterday , gold traded within a narrow range .
Gold tried to rally on Monday but ran into the same situation that has subdued gold prices for more than a year : selling by gold producers , who want to fix the highest possible price for their gold .
`` December delivery gold is trading in a range of $ 365 to $ 375 { an ounce } and is having difficulty breaking out above that , '' Mr. Savaiko said .
`` Producers at the moment regard that area a good one in which to sell gold . ''
Also , Mr. Savaiko noted , stock market investors seeking greater safety are veering toward buying bonds rather than precious metals because `` we are tending more toward a disinflationary economy that does n't make gold and precious metals attractive . ''
Jeffrey Nichols , president of APMS Canada , Toronto precious metals advisers , said there is little to motivate gold traders to buy the metal .
`` Investors in the U.S. and Europe are comfortable with the actions of the { Federal Reserve } in its willingness to supply liquidity to financial system , which helped the stock market rebound on Monday , '' he said .
There is n't any rush on the part of investors in the West to buy gold , he said .
`` They still bear the memory of October 1987 , when they bought gold after the stock market crashed and ended up losing money because gold prices subsequently fell , '' Mr. Nichols said .
`` It 's an experience they do n't want to repeat . ''
At the moment gold traders are n't concerned about inflation , he said , and as for the dollar , `` gold 's association with the currency has been diminishing recently so drops in the currency are n't having much impact on gold . ''
Dinsa Mehta , chief bullion trader for Chase Manhattan Bank , said : `` There is little incentive on the part of traders to sell gold because the stock market may go lower and gold may retain some of its ` flight to safety ' quality .
There is little incentive to buy gold because if the stock market goes higher , it may be just a false alarm .
This is keeping the gold traders handcuffed . ''
The most remarkable feature about yesterday 's action was that the price of roughly $ 370 an ounce was regarded as attractive enough by gold producers around the world to aggressively sell gold , Mr. Mehta said .
`` I do n't know what it means over the long run , but for the short term , it appears that gold producers are grateful for the $ 10 or so that gold has risen over the past week or so , '' he said .
Previously , he noted , gold producers tended to back off from a rising gold market , letting prices rise as much as possible before selling .
Mr. Mehta observed that the U.S. merchandise trade deficit , which rose sharply in August , according to yesterday 's report , has been having less and less impact on the gold market .
`` The dollar has n't reacted much to it , so gold has n't either , '' he said .
In other commodity markets yesterday :
ENERGY :
Crude oil prices rose slightly in lackluster activity as traders in the pits tried to assess action in the stock market .
Since stock market indexes plummeted last Friday , participants in all markets have been wary .
When traders become confident that the stock market has stabilized , oil prices are expected to rise as supply and demand fundamentals once again become the major consideration .
Crude oil for November delivery edged up by 16 cents a barrel to $ 20.75 a barrel .
Heating oil prices also rose .
November gasoline slipped slightly .
SUGAR :
Futures prices rose on a report that Cuba may seek to postpone some sugar shipments .
The March contract advanced 0.14 cent a pound to 14.11 cents .
According to an analyst , Cuba ca n't meet all its shipment commitments and has asked Japan to accept a delay of shipments scheduled for later this year , into early next year .
`` Japan is perceived as a wealthy nation that can turn elsewhere in the world market and buy the sugar , '' the analyst said .
It was the possibility of this demand that helped firm prices , the analyst said .
Another analyst noted that Cuba has been deferring shipments in recent years .
`` To the professionals in the trade it did n't cause much surprise .
The March futures contract traded as high as 14.24 cents , but could n't sustain the advance , '' he said .
LIVESTOCK AND MEATS :
The prices of cattle , hogs and pork belly futures contracts rebounded as livestock traders shook off fears that the Friday stock market plunge would chill consumer spending , which in turn would hurt retail sales of beef and pork .
The prices of most livestock futures contracts had dropped sharply Monday .
Cattle futures prices were also supported yesterday by signs that supermarket chains are making plans to increase their promotions concerning beef .
GRAINS AND SOYBEANS :
The prices of most soybean and soybean-meal futures contracts rose amid rumors that the Soviet Union is interested in buying from the U.S. or South America about 250,000 metric tons of soybeans and as many as 400,000 metric tons of soybean meal .
Traders are especially sensitive to reports of possible U.S. soybean sales because U.S. exports are lagging .
Since Sept. 1 , about 13 million fewer bushels of U.S. soybeans have been sold overseas than for the same period last year .
Corn futures prices rose slightly while wheat prices settled mixed .
Moody 's Investors Service Inc. , fretting about increasing competitive pressure on Ryder , placed about $ 2.8 billion in company securities under review for possible downgrade .
Ratings under review are Ryder 's A-1 collateral trust debentures , A-2 senior notes and bonds , A-2 preferred stock and the company 's Prime-1 rating for commercial paper .
Moody 's said it is assessing the strategies Ryder 's management may follow in addressing significant challenges in some major markets .
The rating agency said it is focusing especially on the transportation service company 's efforts to control costs , improve margins and enhance its competitive position in its primary business , vehicle leasing and rental .
The nations of southern Africa know a lot about managing elephants ; their herds are thriving .
But the nations of Europe and North America have decided they know better .
At this week 's U.N. conference in Lausanne , they imposed a global ivory ban that seeks to overturn local policies .
A Zimbabwean delegate argued that the ban would `` guarantee the extinction of the elephant . ''
Legitimate ranchers , who have an interest in preserving the herds , would go out of business .
Poachers would control the underground trade .
Many delegates were willing to craft a compromise , but U.S. delegate Constance Harriman and others thundered that down .
The Greens from the First World wanted a morality play , not a negotiation .
Fortunately , the nations of southern Africa have n't totally surrendered their sovereignty .
Five countries announced they would not honor what one Zimbabwean delegate wryly called the `` made in Switzerland '' solution .
In fact , they seemed a mite resentful .
The director of Zimbabwe 's Wildlife Department described American conservationists as `` fat little puppies from urban environments who do n't know a thing about Africa . ''
That 's not fair ; they 're not all fat .
HUGO'S BLAST generates pleas for aid from South Carolina small businesses .
The Small Business Administration has received more than 5,000 formal requests for disaster loans because of the hurricane .
About 45 % of requests for SBA relief loans , which also are available to homeowners , come from small businesses , compared with a 25 % business share after most disasters .
The SBA expects to make about $ 1 billion in Hurricane Hugo loans .
The disaster fund is replenished by loan repayments .
Hardest hit by Hugo in South Carolina were small retailers tied to the tourist industry and businesses in agriculture and cultivated seafood .
The State Development Board set up a Hugo Hotline to accept business-to-business help .
After NBC weather man Willard Scott broadcast the hot-line number , it was flooded with 10,000 calls .
Last week , the U.S. Chamber of Commerce began using its national TV show to seek help , such as equipment , for business owners .
Local bankers and accountants help applicants fill out forms .
`` It helps us , and people feel better talking to someone who 's gone through the same thing , '' an SBA official says .
HEALTH BENEFITS remain a central lobbying effort , even as Section 89 fades .
The Senate , after deleting Section 89 repeal from its deficit-reduction bill , still is expected to join the House in voting to kill the law , which forces companies to provide comparable benefits to laborers and executives alike .
In lobbying on other health-coverage topics , the National Federation of Independent Business will press for legislation that would give self-employed people a 100 % tax deduction for their own health plans , up from 25 % currently .
And the group will urge that the federal government pre-empt state rules on what must be covered by employers ' health insurance .
Small-business groups also will fight the medical-leave provision of legislation that would expand parental leaves .
And they still oppose as too costly an employer-paid health insurance bill sponsored by Sen. Edward Kennedy ( D. , Mass . ) despite his proposal to phase in small business only gradually .
There is also worry that the Pepper Commission studying long-term health care will again push lawmakers toward employerpaid solutions .
The Section 89 victory could have a downside by making it harder to oppose lawmakers on other health proposals .
`` With the repeal of Section 89 , we can no longer say they 're discouraging businesses from offering health plans , '' says Christine Russell , the Chamber of Commerce 's small-business advocate .
JUMPING THE GUN :
Sen. Lloyd Bentsen ( D. , Texas ) was outraged after a private word to John Motley , lobbyist for the National Federation of Independent Business , resulted in a news release saying that the Senate Finance Committee chairman would recommend repeal of Section 89 .
Even though the announcement was true in the end , it was issued without the senator 's permission .
`` I blew it , '' Mr. Motley says apologetically .
`` It was a timing mistake . ''
PRISON-SHOP BLUES :
Sen. Strom Thurmond ( R. , S.C . ) protests pending legislation to end the preference that the federal prison system gets in selling prisoner-made furniture and other goods to government agencies .
Small-business suppliers want prisons to stop getting high priority , especially as prison production grows with swelling inmate populations .
Last year , the prisons ' sales to the Pentagon totaled $ 336 million .
REPAIR SHOPS SCRAP for more access to work on auto-emissions systems .
Groups representing some independent auto-repair shops join a compromise on the Clean Air legislation worked out between environmentalists and Rep. Henry Waxman ( D. , Calif . ) .
The plan would increase the warranty on auto-emission systems to eight years or 80,000 miles from five years or 50,000 for major parts .
But the warranty on simpler parts would be lowered to two years or 24,000 miles .
The garage owners say they would benefit because car owners would be less likely to go back to dealers for the simpler repairs after two years .
The repair shops are n't united , however .
Shops represented by the Automotive Service Industry Association and the Motor Equipment Manufacturers Association oppose any increase in warranty length .
They say the longer the warranty , the longer customers will automatically return to new-car dealers , which then find non-warranty work that might otherwise go to repair shops .
The House Energy Committee will debate the issue later this month .
Stan Hathcock , an Atlanta garage owner who opposes a longer warranty , estimates that the current plan costs him as much as $ 15,000 a year in lost business .
SMALL TALK :
Some 70 % of graduates who recently earned an M.B.A. degree say they 'd prefer to work in or own a small company , yet most take jobs with large concerns , says a survey by the Foster McKay Group , a New York recruiting firm ... .
Cardinal Scientific Inc. of Waldorf , Md. , seeks a Small Business Innovation Research grant to produce a `` nozzle assembly for an Army mass delousing outfit .
Banc One Corp. said Frank E. McKinney plans to retire as the bank holding company 's president effective Jan. 12 .
Banc One said `` it is contemplated '' that John B. McCoy , chairman and chief executive officer , will assume the additional position of president upon Mr. McKinney 's retirement .
Mr. McKinney , 50 years old , was chairman and chief executive of American Fletcher Corp. , Indianapolis , when that bank holding company merged into Banc One in January 1987 .
The company said Mr. McKinney plans to retire because the process of affiliating American Fletcher into Banc One `` is considered completed . ''
Mr. McKinney will continue as chairman of the board and chairman of the executive committee of Banc One Indiana Corp. , the successor company to American Fletcher Corp. , but will no longer be active in day-to-day management .
He will remain on the Banc One board .
The Treasury plans to raise $ 1.55 billion in new cash with the sale Monday of about $ 15.6 billion in short-term bills to redeem $ 14.1 billion in maturing bills .
The offering will be divided evenly between 13-week and 26-week bills maturing on Jan. 25 , 1990 , and April 26 , 1990 , respectively .
Tenders for the bills , available in minimum $ 10,000 denominations , must be received by 1 p.m. EDT Monday at the Treasury or at Federal Reserve banks or branches .
Moody 's Investors Service Inc. said it lowered ratings on about $ 650 million of Beatrice Co. debt , citing the closely held Chicago food concern 's proposed recapitalization .
The ratings concern said it downgraded Beatrice notes , Euronotes and certain industrial revenue bonds to single-B-1 from Ba-3 and the company 's subordinated debentures to single-B-3 from single-B-2 .
Moody 's said the proposed recaptilization may `` limit the company 's ability to realize its profit potential '' and that paying dividends from a new series of preferred could squeeze `` basic business operations . ''
A Beatrice spokesman did n't return calls seeking comment .
Beatrice , which went private in an $ 8.2 billion leveraged buy-out in 1986 , said last month that it might borrow again to help pay investors as much as $ 983 million in preferred stock and debt securities .
When the Soviets announced their last soldier had left Afghanistan in February , the voices of skepticism were all but drowned out by an international chorus of euphoria .
It was `` the Soviets ' Vietnam . ''
The Kabul regime would fall .
Millions of refugees would rush home .
A resistance government would walk into Kabul .
Those who bought that illusion are now bewildered .
Eight months after Gen. Boris Gromov walked across the bridge into the U.S.S.R. , a Soviet-controlled regime remains in Kabul , the refugees sit in their camps , and the restoration of Afghan freedom seems as far off as ever .
But there never was a chance that the Afghan resistance would overthrow the Kabul regime quickly and easily .
Soviet leaders said they would support their Kabul clients by all means necessary -- and did .
The U.S. said it would fully support the resistance -- and did n't .
With the February 1987 U.N. accords `` relating to Afghanistan , '' the Soviet Union got everything it needed to consolidate permanent control .
The terms of the Geneva accords leave Moscow free to provide its clients in Kabul with assistance of any kind -- including the return of Soviet ground forces -- while requiring the U.S. and Pakistan to cut off aid .
The only fly in the Soviet ointment was the last-minute addition of a unilateral American caveat , that U.S. aid to the resistance would continue as long as Soviet aid to Kabul did .
But as soon as the accords were signed , American officials sharply reduced aid .
In February 1989 , when the Soviets said they had completed their pullout , the U.S. cut it further .
Not so the Soviets .
Gen. Gromov himself said Soviet troops expected to leave behind more than $ 1 billion of military equipment and installations for the Kabul regime .
Since the troop withdrawal , Moscow has poured in an additional $ 200 to $ 300 million worth per month -- nearly $ 2 billion since February , equivalent to the total U.S. aid to the resistance in nine years .
This includes what Deputy Foreign Minister Yuli Vorontsov fetchingly called `` new peaceful long-range weapons , '' including more than 800 SCUD missiles .
By early May , Moscow had delivered , for example , 1,000 trucks , about 100 tanks , artillery and hundreds of other combat vehicles .
Later that month , it added an entire tank brigade , including 120 T-72 tanks and more than 40 BMP state-of-the-art infantry fighting vehicles .
By September , a new Reinforced Motorized Rifle Brigade with an additional 300 combat vehicles , 1,000 more trucks and 10,000 Soviet-trained Afghan troops had arrived in Kandahar .
In the last few weeks , Moscow has added FROG-7B missiles , the bomber version of the An-12 , MiG-23BN high-altitude aircraft , MiG-29s , which can outfly Pakistan 's U.S.-built F16s , and Sukhoi SU-27 fighter-bombers , which can outfly the MiG-29s .
Moscow claims this is all needed to protect the Kabul regime against the guerrilla resistance .
It is well-known that the regular Afghan infantry is filled with reluctant conscripts .
But this is not the entire Afghan army , and it is no longer Kabul 's only military force .
Complete units have been trained and indoctrinated in the U.S.S.R. and other East bloc nations ; 30,000 to 40,000 of these troops have returned .
In addition , the regime has established well-paid paramilitary forces totaling more than 100,000 , including 35,000 Soviet-trained troops of the Interior Ministry ( KHAD\/WAD ) , which still is directed by 1,500 Soviet KGB officers .
Even if not all these forces are committed to the regime , they are now dependent on it .
And thousands of Afghan children have been taken to the Soviet Union , where they are hostage for the behavior of their families .
Since 1981 , Indian military advisers have been assisting the Kabul regime .
In preparation for the withdrawal , Moscow , Kabul and New Delhi signed two agreements for several hundred newly civilian Indian experts to replace some of the more visible Soviet military personnel .
Cuban military personnel also have been active in Afghanistan since 1979 .
The Soviets cut a deal with Iran : a future Iranian role in Afghanistan in exchange for Iranian support of Soviet policy .
The deal was symbolized by the restoration of the Shi'ite Sultan Ali Keshtmand to the Afghan prime ministry .
Moreover , serious questions have been raised about the claimed withdrawal of Soviet forces .
Before his assassination in 1988 , President Zia of Pakistan repeatedly stated that fresh Soviet troops were being inserted into Afghanistan even as others were ostentatiously withdrawn .
Rep. Bill McCollum ( R. , Fla. ) reports that these included 20,000 to 30,000 Soviet Central Asian KGB Border Guards , ethnically indistinguishable from Afghans and wearing unmarked uniforms .
Meanwhile , the Kabul regime is increasingly successful at portraying the resistance as bloody-minded fanatics .
In this they are aided by years of American , European , Pakistani and Saudi support for the most extreme factions -- radical Islamic fanatics with leaders whose policies are anathema to the Afghan public .
This heavy outside support for the worst has undermined better , moderate leaders .
In autumn last year , for example , the regime garrison at Kandahar was prepared to surrender the city to resistance moderates .
At the last minute , however , Pakistani officials sent in Gulbuddin Hekhmatyar , perhaps the most hated and feared of the extremists , with a demand that the surrender be made to his forces .
The deal fell through , and Kandahar remains a major regime base .
The resistance lacks not only air power , armor and expertise but often such essentials as maps , mine detectors , or even winter gloves .
Experienced resistance commanders wanted to use guerrilla action and siege tactics to wear down the regime .
Instead , they were pressured by Pakistan 's ISI , the channel for their support , into attacking Jalalabad .
They took more than 25 % casualties ; journalists report that they faced minefields without mine detectors .
The wonder is not that the resistance has failed to topple the Kabul regime , but that it continues to exist and fight at all .
Last summer , in response to congressional criticism , the State Department and the CIA said they had resumed military aid to the resistance months after it was cut off ; but it is not clear how much is being sent or when it will arrive .
For months the resistance has been defenseless against air attack .
Thus far there is no indication that they have been re-supplied with Stingers or other anti-aircraft weapons .
Indeed , U.S. officials have indicated to the press that the continuation of aid depends on what success the weakened resistance achieves by the end of this year .
Moscow and Kabul must have found that information useful .
For a decade U.S. policy has been incoherent , based on miscalculation and the defense of bureaucratic and political turf .
No settlement negotiated by others can force the Afghan people to give up their struggle .
A cutoff of U.S. military aid would merely abandon them to die in vain .
Creation of a new , realistic U.S. policy is long overdue .
Ms. Klass , editor and co-author of `` Afghanistan : The Great Game Revisited '' ( Freedom House ) , directs the Freedom House program on Afghanistan\/Southwest Asia .
Nothing stirred the soul of Ronald Reagan and his disciples as much as the crusade to aid Nicaragua 's Contra rebels , or the dream of building a space-based defense shield to knock out Soviet nuclear missiles .
Yet under Mr. Reagan 's preferred successor , President Bush , those two cherished national-security causes are withering on the vine .
And , surprisingly , little more than a whimper of protest is being heard , even though Reaganauts once breathed fire supporting the Contras and the Strategic Defense Initiative .
`` The programs have arthritis , '' says Rep. Henry Hyde , a conservative Republican from Illinois .
Yet , he asserts , `` you look around ... and you say , ` Who are the leaders ?
Who is going to carry the water ? ' ''
It is n't surprising that President Bush has n't led a crusade to pump up the Contras or SDI .
Though he nominally supports both programs , Mr. Bush has n't been a passionate champion of either cause , as Mr. Reagan was .
What 's surprising is that there is n't more of a conservative outcry as the Bush administration lets the programs slip down the national-priority list .
A combination of factors -- a weariness among some conservatives , a decline in the perception of a Soviet threat and a preoccupation with other issues -- seem to explain the strange tranquility .
Above all , though , conservative Republicans who have championed both the Contras and SDI are reluctant to attack a Republican president for failing to do more -- though that reluctance may be receding .
`` We want to complain , we want to say something about it , and we 're going to as it gets worse , '' says Rep. Dan Burton , an Indiana Republican who has been a staunch Contra backer .
`` But it 's like kicking your father in the pants .
You hate to do it because he 's your father . ''
Mr. Burton says conservatives ' unhappiness with Mr. Bush 's cautious handling of the recent unsuccessful coup in Panama will make them more willing to speak out .
Of course , neither President Bush nor the Congress has actually abandoned the Contras or SDI .
Mr. Bush has struck a deal with congressional leaders to provide nonlethal aid to the Contras until Nicaragua holds national elections next February .
But the administration has dropped any effort to win military aid for the rebels .
And the administration 's deal with Congress gives several congressional committees the right to cut off even humanitarian aid next month , though the committees are likely to let aid continue until February .
Most analysts think there 's little prospect the Contras can be a significant fighting force without U.S. arms , and after the February election their future in any form will be murky at best .
Instead of focusing on the Contras , Mr. Bush has switched to urging members of Congress -- most recently in a White House meeting yesterday -- to approve financing for the election campaign of political opponents of Nicaragua 's Sandinista government .
The administration continues to support SDI , or Star Wars , and it recently lobbied to persuade the Senate to restore some of the funds it planned to cut from the program .
And just last week , Defense Secretary Dick Cheney gave a strong speech listing `` compelling reasons '' to push ahead with SDI and saying he 'd urge President Bush to veto a defense bill with `` inadequate '' funding for the program .
But the strong pitch by Mr. Cheney may be too little too late to prevent damage to SDI .
The House has already voted for a deep cut in funding , and in the end the program 's backers will be hard pressed to head off some reduction in spending next year .
And while the defense secretary is speaking out , President Bush himself has n't launched any high-visibility campaign to drum up support , as President Reagan did .
The administration also acknowledges that it is n't pursuing Mr. Reagan 's original vision of an `` impenetrable shield '' protecting the whole U.S. , but rather a more modest version .
More ominous to SDI supporters , the Bush administration appears to have tacitly accepted a new arms-control proposal from the Soviet Union that spells long-term trouble for Star Wars .
The Soviets have agreed to complete a treaty cutting strategic weapons without including restrictions on space-based defenses .
But the Soviets also are insisting that they will reserve the right to withdraw from the completed strategic-arms treaty later on if the U.S. does SDI testing or deployment that the Soviets think violates the existing anti-ballistic-missile treaty .
It will be hard down the road to persuade Congress to approve money for SDI plans if lawmakers fear those plans could scuttle a completed treaty .
As a result , Frank Gaffney , a former Reagan Pentagon aide who now heads the Center for Security Policy , charges that the administration 's `` professions of continued commitment to development and deployment of the SDI program strain credulity . ''
Still , proponents may be shying away from more drumbeating because they sense political tides have turned against arming the Nicaraguan rebels or boosting spending on SDI -- particularly when the public perceives the Soviet threat is declining under Mikhail Gorbachev .
In fact , because communism seems to be beating a global retreat , some conservatives may simply be so pleased that their anti-communist philosophy is prevailing that they do n't have the fire at the moment to push controversial programs .
`` The short of it is that the most hard-bitten among us can not get into too sour a mood with communism collapsing , '' says Mitchell Daniels , a former Reagan White House aide who now is president of the Hudson Institute .
Some activists are toiling to raise the profile of the two causes .
But they say they ca n't make much headway because of a lack of willing leaders in a position to turn the tide .
One longtime champion of these programs in Congress , Republican whip Newt Gingrich of Georgia , is distracted by questions about his ethics , conservatives note .
Other conservative champions , like Wyoming Republican Sen. Malcolm Wallop , a longtime SDI advocate , do n't have the clout with the Bush White House that they enjoyed with President Reagan .
Above all , though , proponents say neither the Contra nor the SDI cause can be pushed much further without more presidential support .
`` For there to be wind in the sails of any program , the chief executive has to be blowing in the sails , '' says Rep. Burton .
All this causes Rep. Hyde to muse about an alternate way to drum up more enthusiasm .
`` What I 'd like to see , if he is up to it , is for Reagan to take to the hustings to regenerate enthusiasm for SDI , '' the congressman says .
We 're sorry to report that on Monday President Bush accepted the resignation of William Allen as chairman of the U.S. Civil Rights Commission .
Mr. Allen , appointed by President Reagan , grew understandably tired of dealing with the guerrilla tactics of his enemies .
His recent speech , provocatively titled `` Blacks ? Animals ? Homosexuals ? What is a Minority ? '' caused an uproar when its title leaked out .
Mr. Allen 's commissioners voted to call his unread speech `` thoughtless , disgusting and unnecessarily inflammatory . ''
Commissioner Mary Francis Berry said it was `` another sad episode in the saga of the unguided missile who is chairman . ''
Rep. Don Edwards , the California Democrat , warned Mr. Allen that the speech would be `` outside the scope of the commission 's jurisdiction . ''
Thomas Stoddard , head of the Lambda Legal Defense Fund , called the prospect of the speech `` frankly shocking . ''
We 've actually read the speech .
Mr. Allen began it with a warning to his hosts , a California church group that opposes rights for homosexuals .
He said that other participants in the conference `` do not believe that the rights of Americans should be guaranteed to citizens who are homosexual , '' but that `` I mean to persuade you to the opposite view . ''
He recalled to the audience a `` strange , infelicitous '' analogy he once heard arguing `` now that we have finally recognized that American blacks have rights , we need to do the same for animals .
'' Mr. Allen objected to this analogy because it seems to `` assimilate the status of blacks to that of animals -- as a mere project of charity , of humaneness . ''
Rights on such a basis , whether for blacks or homosexuals , are `` mere indulgences , '' he said , subject to being taken back .
He says the title of his speech was to make his point that Americans have rights as individuals , not as members of certain select groups .
His speech criticized the `` idiocy of notions of protected groups in society '' as opposed to individual equality or , as he put it , in `` a common destiny as Americans . ''
Instead of lobbying for special treatment , Mr. Allen said that homosexuals and others should try to ensure equal treatment under the law and not aim for special privileges that would risk `` invidious retrenchment with government complicity . ''
This hardly sounds like an anti-homosexual screed .
What 's really going on here ?
The three most important things to understand about Mr. Allen is that he is a black conservative intellectual -- a triple threat to the liberal establishment .
Mr. Allen , who teaches government at prestigious Harvey Mudd College in California and will remain a member of the commission , has spent years arguing that civil rights are individuals ' rights .
He last made waves when he dared to defend an Indian girl who had been adopted by non-Indian parents off her reservation .
Mr. Allen quickly ran up against the liberal establishment again , which somehow elevated the vague concept of `` Indian rights '' above the rights of individual Indians .
There is a huge divide between Mr. Allen 's we're-all-in-this-together view and the divisive litigation approach of the civil rights groups .
Indeed , the gap is so large that Mr. Allen 's critics refuse to engage the debate .
Their ridicule of him is no substitute for argument .
Their effort to run him out of Washington is an embarrassment to the original purpose of their own movement .
We hope the next head of the Civil Rights Commission will be as brave as Mr. Allen in making the case for equality of civil rights .
Bearings Inc. said its chairman , John R. Cunin , will retire as an officer of the company on Jan. 2 .
George L. LaMore , president and chief executive officer , will become chairman and chief executive upon Mr. Cunin 's retirement .
John C. Dannemiller , executive vice president and chief operating officer , will become president and chief operating officer .
Mr. Cunin , 65 years old , was chief executive of the distributor of bearings and power-transmission products from 1982 to 1988 .
He will continue as a director .
Mr. LaMore , 63 , a 48-year veteran at Bearings , has been president since 1983 .
Mr. Dannemiller , 51 , joined Bearings in August 1988 from Leaseway Transportation Corp. , where he was president and chief operating officer .
He has been a Bearings director since 1985 .
The appointments are part of a planned succession at the company .
Soviet leader Mikhail Gorbachev opened a major U.S. trade exhibition in Moscow and spent two hours touring some of the 150 stalls representing such blue-chip companies as General Motors Corp. , International Business Machines Corp. and Johnson & Johnson .
At the Archer-Daniels-Midland Co. stand , Mrs. Nelson Rockefeller , a board member , offered him a soy burger .
He did n't bite .
The exhibition by the U.S.-U.S.S.R. Trade and Economic Council underscores the growing U.S. interest in that nation 's market , though trade between the two countries is a minuscule $ 3 billion .
The Soviet president and his prime minister , Nikolai Ryzhkov , spent the longest time , about 15 minutes , at the IBM stand , where they got souvenir computer-chip key rings .
At the GM stall , they barely looked at a gleaming Cadillac , preferring to talk about cooperation possibilities .
In Beijing , meantime , China opened an international aviation show , but the West 's embargo on military deals and uncertainty about the nation 's stability kept many foreign exhibitors away .
Officials said 91 companies from 14 countries , including the U.S. , had displays , down from about 260 firms from more than 20 countries at the last show in
Japanese air-conditioner maker Daikin Industries Ltd. was fined two million yen ( $ 14,000 ) for exporting to the Soviet Union a chemical solution that could be used in missile-guidance systems .
A Daikin executive in charge of exports when the high-purity halogenated hydrocarbon was sold to the Soviets in 1986 received a suspended 10-month jail sentence .
Judge Masaaki Yoneyama told the Osaka District Court Daikin 's `` responsibility is heavy because illegal exports lowered international trust in Japan . ''
Sale of the solution in concentrated form to Communist countries is prohibited by Japanese law and by international agreement .
A Soviet legislative panel rejected as not radical enough a government proposal on decentralizing economic control .
The newspaper Leninskoye Zamya said the committee decided the plan to parcel out economic powers previously exercised by Moscow to the country 's 15 republics `` does n't reflect the radical changes in the Soviet federation . ''
The committee gave the government until Nov. 15 to revise the proposal .
The move reflected the growing confidence of the revamped Supreme Soviet .
Scott Paper Co. said it is abandoning a proposed $ 650 million tree-farming project in Indonesia because it no longer expects to use as much eucalyptus pulp as previously anticipated .
The eucalyptus plantation and pulp mill , which would have covered about 175,000 acres in the Irian Jaya region , had been approved by Indonesia 's investment board .
But it was opposed by some environmentalists as a threat to Irian Jaya 's forests and a potential source of social unrest for the primitive tribes who inhabit them .
Yaohan Departmentstore Co. of Japan is moving its international-operations headquarters and holding company to Hong Kong to gain from the British colony 's economic advantages and tax structure .
With funds of 5.56 billion Hong Kong dollars ( US$ 712 million ) , the new company , Yaohan International Co. , plans to acquire 10 of Hong Kong 's top restaurants .
It also intends to set up an international wholesale market with the Singapore government next May and to open a department store in Bangkok and shopping centers in Malaysia , Taiwan , Canada , Chicago and Seattle by December 1990 .
The chain currently has 90 retail outlets in Japan , seven in the U.S. , three in Hong Kong and a dozen more scattered around the globe .
Major European auction houses are turning increasingly to specialized sales .
Christie 's will soon have a sale of Dada and Symbolist art while Sotheby 's is luring collectors with sales of Swiss , German , Spanish , Australian and Canadian paintings .
In Brussels , Hotel de Ventes Horta auctioned pistols and sabers - along with paintings and jewels .
Berlin 's Villa Grisebach will auction art works with pre-sale estimates of less than $ 1,600 on Nov. 25 .
The auction house , known for its sales of top-drawer 19th and 20th century works , is providing `` a service to clients who do n't want to sell just their fabulous oil paintings , '' says Villa Grisebach 's Vivien Reuter .
Antwerp auctioneer Campo is less concerned with market niches than with Belgium 's crushing tax and auction-fee burden .
`` Everything has to be the same between countries , '' says Campo 's Stefan Campo , who is asking clients to sign protest petitions .
`` Then there 'll be fair competition . ''
Ending tax-free shopping in the European Community after 1992 could threaten more than 3,000 jobs , the International Duty Free Confederation said .
Instead of banning such shopping , the confederation proposed amending controls to be sure the privilege is n't abused ... .
British and Argentine diplomats opened talks in Madrid aimed at restoring ties severed because of their 1982 war over the Falkland Islands .
Britain 's U.N. representative and delegation head Crispin Tickell called the first meeting `` good , interesting and businesslike .
Polaroid Corp. , benefiting from staff-reduction savings , reported a strong gain in third-quarter operating results and net income of $ 29.9 million , or 40 cents a share , after preferred-stock requirements .
Analysts said the numbers were better than expectations , partly because of strong profit margins and a positive foreign-currency translation .
However , they said the company 's flat revenue was a disappointment , and an indication that sales of Polaroid 's new conventional film in the U.S. have been sluggish .
Revenue in the third quarter was $ 437.7 million , almost unchanged from $ 436.3 million a year earlier .
Polaroid reported operating profit before taxes and interest costs of $ 63.1 million for the third quarter , more than double the year-before $ 24 million .
Charges for staff cuts and other restructuring produced a net loss of $ 54.1 million , or 77 cents a share , in 1988 's third quarter .
`` I 'm somewhat skeptical about the underlying demand '' for Polaroid products , said Michael Ellmann , an analyst with Wertheim Schroder & Co .
`` If you believe that a good performance next year is contingent on an acceleration of revenue , there is n't a lot here to base optimism on . ''
Alex Henderson , an analyst with Prudential-Bache , says Polaroid officials told him yesterday that U.S. sales of the company 's new conventional film product , introduced in the second quarter , have been `` disappointing '' after a promising start .
Sam Yanes , a Polaroid spokesman , said `` I do n't know about disappointing , '' but added that the company has n't been able to get the product on the shelves of some mass-merchandise , discount retailers that it had hoped would be carrying the product already .
Mr. Yanes said the film , One Film , is currently carried at about 15,000 retail outlets , including drugstores and supermarkets .
For the nine months , Polaroid reported earnings of $ 98.5 million , or $ 1.27 a share .
Last year , the company had a nine-month loss of $ 15.1 million , or 23 cents a share .
In New York Stock Exchange composite trading , Polaroid closed at $ 47 , up $ 1.125 .
Why is the stock market suddenly so volatile ?
Yesterday , the Dow Jones Industrial Average did a now familiar dance : It plunged 60.25 points before lunch , with most of the drop occurring in 25 minutes .
Then , it rebounded to finish down only 18.65 points .
And those swings paled beside Friday 's 190.58-point plunge and Monday 's 88.12-point recovery .
`` It 's madness -- that in an hour you can whack off so much value , '' says Stanford Calderwood , chairman of Trinity Investment Management Corp. , Boston .
And , apparently , it is here to stay .
Richard Bernstein , senior quantitative analyst at Merrill Lynch & Co , says , `` My gut feel is that we 'll live with those swings for a while . ''
There are many reasons for the market 's jumpiness : new trading vehicles such as stock-index futures and options ; computer-driven strategies like program trading ; and crowd psychology .
But most are linked by a single theme : liquidity -- the ability to get in and out of the market quickly .
Prices are moving up and down so fast because investors are employing ways to turn over shares at ever-faster rates and increasingly acting in concert .
`` Institutions are herding animals , '' says Peter Anderson , who heads the pension-fund management arm of IDS Financial Services Inc .
`` We watch the same indicators and listen to the same prognosticators .
Like lemmings , we tend to move in the same direction at same time . ''
And that , naturally , exacerbates price movements .
Institutions -- who now account for most trading -- count on being able to buy and sell big blocks of stock at an eye-blink .
But when they discover that markets are n't always as liquid as they supposed -- markets jump .
On Monday , for instance , Howard Ward , a principal at Scudder , Stevens & Clark , found that `` you could n't buy blue-chips at quoted prices without paying up . ''
And when many firms had to `` pay up , '' Monday 's sudden rally was sparked .
Trading in futures and options , some people believe , can add to volatility .
Investors believe they can can rely on such derivative securities to get in and out of the stock market without actually selling any stocks ; that is , a way of staying liquid even when they own stocks .
These and other modern trading methods `` tend to promote dramatic shifts in assets , '' says George Douglas , first vice president at Drexel Burnham Lambert Inc .
`` It 's the idea that what goes in easy can come out easy '' -- so that bouts of higher volatility get built into the stock market .
One new investment style called `` asset allocation '' shifts portfolio weightings between stocks , bonds and cash when computer models say one is more attractive .
For instance , First Quadrant Corp. , an asset allocator based in Morristown , N.J. , said it quickly boosted stock positions in its `` aggressive '' accounts to 75 % from 55 % to take advantage of plunging prices Friday .
It added another 5 % Monday before stocks rallied .
When they did , the firm reduced those stock holdings to about 70 % .
A classic example of institutions ' hunger for liquidity is portfolio insurance , now widely discredited .
Before the 1987 crash , an estimated $ 60 billion in institutional money was managed under this hedging technique .
The idea was to `` insure '' the value of a portfolio by selling futures when stock prices dropped -- eliminating the need to sell the stocks themselves .
But in October 1987 , when portfolio insurers rushed to sell at the same time , they overwhelmed both the stock and futures markets .
Yet even today , institutions are quietly practicing forms of portfolio insurance by nervously rushing to and fro in the markets .
Others are doing `` index arbitrage '' a strategy of taking advantage of price discrepancies between stocks and futures .
Unlike traditional buy-and-hold strategies , all of the above require that market makers be on hand to provide liquidity by buying and selling stocks in a crunch .
But institutions say Wall Street brokerage firms are less willing to make markets .
Brokers do n't deny that .
Wall Street traders say that , with institutional brokerage commissions far lower than in the 1970s , securities firms ca n't afford to take the risk of buying too much stock .
`` I think everyone 's a little more leery , '' says Jack Baker , head of equity trading at Shearon Lehman Hutton Inc .
`` The institutions have driven ( commission ) rates down to the point where it makes no sense to commit capital , '' says Tom Gallagher , senior executive vice president in charge of institutional trading at Oppenheimer & Co .
`` Why should I risk money for a guy for who 's paying me five cents a dance ?
All you get is risk . ''
Lack of liquidity can also result from exchange `` reforms . ''
Many traders say that `` circuit breakers '' put in place to damp volatility after the 1987 crash actually added to volatility when the stock market plunged Friday .
The circuit breakers caused a 30-minute shutdown in trading in Standard & Poor 's 500-stock index futures contract as the markets were falling .
`` With the futures-trading halt , you could only sell stocks '' to cut exposure to the market , says a money manager .
`` It was scary to people thinking that they could n't get their trades off . ''
`` It was like they put you in a room with a gorilla and told you there were three doors to exit , '' said one Chicago-based futures trader .
`` Then they said , ` By the way , two of the doors are locked . ' ''
The takeover mania also adds to volatility .
UAL Corp. is a good example .
Valued as a buy-out target , the airline stock was trading at nearly $ 280 a share .
When the deal ran into trouble , the stock tumbled ; it closed at $ 198 yesterday .
Presumably , UAL is now trading closer to its value based on earnings .
By contrast , traditional buy-and-hold investors are unlikely to generate sudden price moves .
Scott Black , a value-oriented money manager who heads Delphi Management Inc. , points out that for those who invest on fundamentals , `` the value of a stock from day to day does n't change all that much . ''
Some experts say markets are n't as volatile as widely assumed .
Hans Stoll , finance professor at Vanderbilt University , says the current volatility in U.S. markets pales in comparison to the 1930s , decades before derivative instruments such as options and futures were introduced .
`` I just ca n't believe that the innovations in the financial market are causing any of this volatility , '' he says .
And Robert D. Arnott , president of asset allocator First Quadrant , notes that before Friday 's tailspin , daily volatility on the New York Stock Exchange in recent weeks had reached `` historically low levels . ''
Some people tend to ignore that a 50-point move is less in percentage terms than it was when the stock market was lower .
John J. Phelan Jr. , chairman of the Big Board , asserts that `` 1988 and 1989 have been two of the least volatile years in the last 30 or 40 years . ''
But the low average volatility Mr. Phelan is talking about is n't any comfort in a period of rapid stock-market moves like the past week .
In addition , Sanford Grossman , a Wharton School finance professor , says volatile jumps in stock prices will continue as long as liquidity falls short of the voracious demands of institutions `` who can go out and say ` I have a billion dollars of stocks to sell . ' ''
Some people think the search for liquidity is fruitless .
In 1936 , John Maynard Keynes wrote that `` of the maxims of orthodox finance none , surely , is more antisocial than the fetish of liquidity . ''
It leads investors to focus on short-term price movements -- `` a game of musical chairs , '' he called it -- rather than on long-term fundamental valuation .
James A. White contributed to this article .
The National Aeronautics and Space Administration said a computer virus has infected one of its networks and is spreading anti-nuclear messages related to its Galileo space probe , which is to be launched today .
Charles Redmond , a NASA spokesman , said the agency discovered the virus on Monday on the collection of computer networks collectively called Internet and expected 100 university centers to be infected by today .
Although the network is n't connected to the computer systems that operate either Galileo or the shuttle , part of the network will carry analyses of Galileo data once the craft gets spaceborn .
Mr. Redmond said the intruder had n't yet done any harm but the agency feared `` garbage data could be substituted for real data . ''
He estimated it could take a day for a computer security manager to expunge the virus from a computer system .
The intruder , among the broadest yet to hit a research network , appeared to affect only Digital Equipment Corp. hardware that uses Digital 's VAX\/VMS operating system .
It is unrelated to the much-publicized virus that last year infected Arpanet , a much larger network used by researchers at universities , laboratories and government agencies around the world .
In the lingo of computer security , the NASA intruder is technically a computer worm , Mr. Redmond said .
A worm resides in the operating system of a computer and spreads by boring into other computers contacted through networks .
The Galileo worm apparently was hatched on a computer in France hooked up to NASA 's Space Physics Analysis Network , Mr. Redmond said .
NASA said the Galileo worm had n't affected its computers or the computers of other government agencies because they had modified their systems to reject worms .
But Mr. Redmond said the worm hit universities that had n't elected to make the changes .
Michael Alexander , a senior editor at Computerworld , a trade publication , said he was told that the worm gets into a computer center by looking for obvious passwords -- such as ones that are the same as the user 's name .
If it finds one and gets into the system , it will display a screen when a user logs on that says , `` Worms Against Nuclear Killers ... .
You talk of times of peace for all , and then prepare for war . ''
In addition , Mr. Alexander said , the worm sends strange messages to other machines at the center -- such as , `` George Orwell was an optimist , '' or `` Do n't feed the bats tonight . ''
The worm also looks for elementary passwords that confer more privileges on the user .
The passwords are included in the system software when it is installed but are supposed to be replaced as soon as the system is up and running .
If it finds one of those passwords , Mr. Alexander said , the worm will do such things as change users ' passwords to a series of random numbers , preventing them from signing on to the network .
NASA estimated that , on Monday , about four computer centers were affected .
Yesterday , the number grew to 40 ; today the number is expected to grow to 100 .
NASA said it will take about a week before it knows exactly how many centers of the 6,000 connected to Internet were affected and the extent of the damage , if any .
Anti-nuclear activists have protested the launch of the Galileo space probe to Jupiter because it uses plutonium to generate the electricity needed to run the craft .
Activists fear that if the shuttle carrying Galileo into orbit should explode , or if Galileo itself crashes into the Earth during the two times it flies close to the planet , fatal levels of plutonium would be released into the atmosphere .
So far Galileo has been delayed twice , once because of a computer malfunction connected with a space-shuttle engine , and yesterday because of the weather .
NASA said the Galileo worm had nothing to do with either delay .
Mr. Alexander of Computerworld said hackers have gone after SPAN before .
He said the Chaos Computer Club , of West Germany , once managed to invade SPAN and do such things as change the value of pi , messing up some calculations .
It is now a commonplace that prosecutors are bringing criminal indictments in cases where until a few years ago only a civil action at most would have been brought .
Yet it is also axiomatic that the power to create new crimes belongs only to the legislature , and not to courts .
Beginning in the early 19th century , with U.S. v. Hudson and Goodwin , the Supreme Court has repeatedly held that a judicial power to declare conduct to be against the public interest and hence criminal , while well established in British law , would usurp legislative authority under the doctrine of separation of powers .
That 's the conventional theory anyway .
In practice , however , the line between interpretation and redefinition of the criminal law long ago began to blur .
In particular , a common law of white-collar crime has developed with surprising rapidity over the past decade .
For example , although insider trading has long been criminal , it has never been statutorily defined .
In 1983 , the Supreme Court tried to supply a workable definition in the Dirks v. SEC decision , which found that liability depended on whether the tipper had breached his fiduciary duty to the corporation in order to obtain `` some personal gain '' and whether the tippee knew or recklessly disregarded this fact .
Gradually , however , lower courts and prosecutors have pushed this definition to its breaking point .
Consider the facts underlying the 1989 conviction of Robert Chestman .
Prior to a tender offer by A&P for Waldbaum Inc. in 1986 , the founder of the Waldbaum 's supermarket chain called an elderly relative to tell her to assemble her stock certificates for delivery .
She called her daughter to take her to the bank , who , in turn , persuaded her husband , a Mr. Loeb , to run this errand .
Hearing of this information , the husband discussed it with his broker , Mr. Chestman , and Mr. Chestman then bought for his own account and other clients .
Basically , Mr. Chestman was a fourth-level tippee .
Did Mr. Loeb , his tipper , breach a fiduciary duty ( and , if so , to whom ) ?
Did Mr. Loeb seek personal gain ( and if so , how ) ?
Or did Mr. Chestman only hear a market rumor ( which one may lawfully trade upon ) ?
The line seems awfully thin for criminal-law purposes .
A second illustration is supplied by the recent guilty plea entered by Robert Freeman , formerly head of arbitrage at Goldman , Sachs & Co .
Essentially , Mr. Freeman had invested heavily in the Beatrice leveraged buy-out , when he was told by another prominent trader , Bernard `` Bunny '' Lasker , that the deal was in trouble .
After placing orders to sell , Mr. Freeman called Martin Siegel , an investment banker at Kidder , Peabody & Co. , who was advising on the deal , to confirm these rumors .
Mr. Siegel asked Mr. Freeman who his source was and , on hearing that it was Bunny Lasker , responded : `` Well , your bunny has a good nose . ''
The illegal `` tip '' of the bunny 's good nose was then largely a confirmation of rumors already known to many in the market .
Had the case gone to trial the same issues would have surfaced :
Was there a fiduciary breach in order to obtain personal gain ?
Did Mr. Freeman have notice of this ?
Finally , was the information material ?
Yet , all these issues are subsidiary to a more central issue : Who is and who should be making the criminal law here ?
It is not my contention that either Mr. Chestman or Mr. Freeman was an innocent victim of prosecutorial overzealousness .
Arguably , both were on notice that their behavior was at least risky .
But even if they behaved recklessly , reasons still exist to fear and resist this steady process of case-by-case judicial extension of the law of insider trading .
Courts and legislatures make decisions in very different ways and are each susceptible to very different kinds of errors .
After-the-fact judicial examination of an actor 's conduct has always been the common law 's method .
When only civil liability is involved , this method has the undeniable strengths of factual specificity and avoidance of overgeneralization .
Still , case-by-case retrospective decision making of this sort is vulnerable to the tunnel vision caused by a fixation on ad hoc ( and usually sleazy ) examples .
When a court decides that a particular actor 's conduct was culpable and so extends the definition of insider trading to reach this conduct , it does not see the potentially enormous number of other cases that will be covered by the expanded rule .
Thus , a court is poorly positioned to make judgments about the social utility of the expanded rule .
For example , in focusing on Mr. Freeman 's attempt to gain nonpublic information about a deal 's collapse , one does not naturally think about the reverse side of the coin : What if the rumor had been false ?
Can a security analyst call an investment banker to make certain that a seemingly improbable rumor is in fact false ?
In the past , not only would reputable professionals have rushed to check out such rumors with the company , but companies listed on the major stock exchanges were encouraged by the exchanges to respond openly to such inquiries from securities analysts .
Today , after Mr. Freeman 's plea , there is an uncertainty that is both unfair and inefficient .
In this light , the comparative advantages of legislative law-making become clear : ( 1 ) Before it acts , the legislature typically will hear the views of representatives of all those affected by its decision , not just the immediate parties before the court ; and ( 2 ) the legislature can frame `` bright line '' standards that create less uncertainty than the fact-bound decisions of courts .
Although legislative lines can result in under-inclusion ( which explains why the SEC has long resisted a legislative definition of insider trading ) , judicial lawmaking inevitably creates uncertainty because of the shadowy outer edges and implications of most judicial decisions .
At least when the stakes are high , uncertainty in turn results in overinclusion , as individuals do not dare to approach an uncertain line closely .
The federal mail and wire fraud statutes provide even better illustrations of the rapid evolution of a federal common law of white-collar crime .
In 1987 , the Supreme Court attempted in McNally v. U.S. to halt the inexorable expansion of these statutes by adopting a rule of strict construction for ambiguous criminal statues .
Yet , late last year , Congress effectively reversed this decision by enacting a one-sentence statute that defined fraud to include any scheme to deprive another of `` the intangible right of honest services . ''
At a stroke , this may criminalize all fiduciary breaches ( and possibly all misrepresentations by an agent or employee ) .
Such a statute illustrates the fundamental problem : Congress finds it is easier to pass sweepingly moralistic prohibitions , which the courts must thereafter interpret , than to engage in the difficult line-drawing distinctions that are inherently its responsibility .
We are confronted less with a judicial power grab than with a legislative giveaway .
Predictably , when confronted with morally dubious behavior , prosecutors will exploit the latitude such openended statutes give them .
Over the long run , however , sleazy cases will make bad law .
Mr. Coffee is a professor at Columbia Law School .
Corning Inc. posted a 38 % decline in third-quarter net income to $ 76.5 million , or 80 cents a share , from $ 123.9 million , or $ 1.37 a share , a year earlier .
The year-earlier figure included a one-time gain of $ 59.9 million from the sale of Corning 's stakes in Japanese businesses .
Without the gain , operating profit was $ 64 million , or 71 cents a share .
The telecommunications , specialty glass , ceramic products and laboratory-services concern said the latest quarter included a tax-loss carry-forward of $ 600,000 .
A year earlier , net included a $ 700,000 taxlow carry-forward .
Sales rose 14 % to $ 715 million from $ 625.4 million .
Corning 's chairman and chief executive officer , James R. Houghton , said operating performance continued to be strong in the telecommunications and health and science segments .
But the specialty-material segment slowed somewhat and consumer products continued below expectations .
As for joint ventures , Mr. Houghton said profit was `` essentially flat '' due primarily to a slow recovery at Samsung-Corning Co. in Korea following a strike at a major customer and the disruption of shipments to China .
Also , profit was hurt by the strength of the dollar overseas which negatively affected the company 's currency-exchange rate .
In New York Stock Exchange composite trading , Corning closed at $ 38.50 , down 75 cents .
UAL , the hair-trigger stock that exploded Friday 's market bombshell , briefly traumatized traders again yesterday .
Within 10 minutes after an 11:13 a.m. trading halt in UAL , parent of United Airlines , the Dow Jones Industrial Average plunged nearly 27 points to a 60.25-point deficit .
Computer-guided buying then kicked in , and the industrials regained 27 points in five minutes .
The lightning moves show that the stock market remains fragile and volatile -- ready to jump at the slightest rumor -- a few days after its shocking 190.58-point plunge .
Nervous investors continued to limit their buying to blue-chip stocks while dumping takeover-related issues .
The industrial average closed down 18.65 , to 2638.73 .
New York Stock Exchange volume was a heavy 224,070,000 shares .
Decliners on the Big Board outnumbered advancers , 931 to 658 .
UAL was watched closely and traded heavily .
The stock tumbled 24 7\/8 to 198 on volume of 2.8 million shares .
The market is still very touchy about rumors and news on pending takeovers .
UAL , which is trying to reconstruct a buy-out bid that banks would n't finance , represents the future of one of the most powerful ingredients in the bull market - corporate restructuring .
An important element of this phenomenon -- the now-shaky market for junk bonds , used often to finance restructurings and takeovers -- continued to cast a pall over stocks .
`` It was a very nervous day , '' said John Geary , partner of the Big Board specialist firm Ziebarth , Geary .
The volatility wo n't end soon .
This Friday brings the `` double witching hour , '' Wall Street 's nickname for the monthly simultaneous expiration of a variety of stock index futures , index options and options on individual stocks .
Traders are already buckling their seat belts .
Previous monthly expirations of the Major Market Index futures and Standard & Poor 's 100-stock index options have produced spectacular volatility .
`` We are in one of those phases where you are going to get a lot of volatile expiration action , '' said Donald Selkin , head of stock-index research at Prudential-Bache Securities .
Investors were buying yesterday , but they were running scared to premier blue chips such as Procter & Gamble , which jumped 3 3\/8 to 127 .
Investors `` are buying stocks that have predictable earnings , '' said Edward J. Laux , head of block trading at Kidder Peabody .
Along the way , investors dumped takeover stocks and shares of banks that have leveraged-buy-out debt and risky real estate loans on their books .
`` These loans are more of a focus than lesser-developed-country debt now , '' said William Bee , senior block trader at Prudential-Bache Securities .
Chase Manhattan , which sold 14 million additional shares at 40 1\/8 Monday through an underwriting group led by Goldman Sachs , closed down 1\/8 to 40 .
Citicorp fell 1\/2 to 32 , and Manufacturers Hanover slipped 3\/8 to 40 1\/4 .
Chase and Citicorp 's Citibank are involved in the UAL buy-out financing .
Both Citicorp and Manufacturers Hanover reported earnings yesterday .
In the first hour of trading , about one million shares a minute changed hands on the Big Board as big stock-index arbitrage sell programs pushed prices lower .
( In stock-index arbitrage , traders buy or sell big baskets of stocks against offsetting positions in futures . )
Traders said many of the sell programs are positions being established ahead of this Friday 's expiration .
Aside from computer-guided selling , airline stocks took a beating as well .
The Dow Jones Transportation Average fell 49.96 to close at 1254.27 .
AMR , the parent of American Airlines , continued to retreat in the wake of New York developer Donald Trump 's decision to withdraw his $ 120-a-share takeover bid .
The stock fell 3 1\/4 to 73 1\/4 on 3.4 million shares .
Delta Air Lines fell 1 7\/8 to 67 7\/8 , USAir Group dropped 3\/4 to 40 1\/4 , Southwest Airlines dipped 1\/2 to 25 and Alaska Air Group slid 3\/8 to 24 1\/4 .
But Texas Air , the owner of Continental and Eastern airlines , bucked the group 's decline by rising 7\/8 to 14 5\/8 in American Stock Exchange trading .
Eastern said it is ahead of schedule in resuming its operations after filing earlier this year for Chapter 11 bankruptcy protection , from which it expects to emerge early next year .
Philip Morris , the most active Big Board issue for the second consecutive session , was unchanged at 43 1\/4 on 3.9 million shares .
Other blue-chip consumer issues also fared relatively well : PepsiCo rose 1 3\/8 to 58 1\/2 ; Coca-Cola Co. was unchanged at 66 3\/4 ; McDonald 's also closed unchanged at 30 1\/2 , and Merck rose 1\/2 to 75 1\/4 .
Broader averages also fell .
Standard & Poor 's 500-stock index fell 1.69 to 341.16 , and the New York Stock Exchange Composite Index fell 0.88 to 188.89 .
Among the takeover-related stocks that sold off yesterday were Disney , which closed down 2 1\/8 to 121 1\/4 .
Philips Industries tumbled 3\/8 to 22 7\/8 ; Hilton Hotels fell 2 1\/2 to 92 and Holiday Corp. fell 2 1\/8 to 69 7\/8 .
Among other blue chips , Exxon gained 1\/8 to 45 1\/2 .
International Paper fell 1 3\/8 to 51 1\/2 , Union Carbide eased 7\/8 to 25 , Chevron gained 1\/8 to 64 , and Eastman Kodak closed down 3\/4 to 44 1\/4 .
The only industry group to show a gain from the industrial average 's record high on Oct. 9 is restaurants .
Among the three worst-performing groups , with declines of 10 % to 20 % , are airlines , casinos and securities brokers .
Trading also was heavy in the over-the-counter market .
The Nasdaq composite index closed down 1.05 to 459.93 on volume of 161.5 million shares .
`` The environment is a lot more trading-oriented , '' said Gary Rosenbach , manager of equity trading at the OTC stock firm Needham & Co. in New York .
`` Because there is a lot more volatility now , if guys see that they can make a quick 10 % or 15 % profit , they 'll take it . ''
Compaq Computer gained 2 1\/8 to 103 3\/4 on two million shares , reflecting market optimism about the prospects for its newly introduced notebook-sized computer .
B.F. Goodrich dropped 1 3\/8 to 49 1\/8 .
The company 's third-quarter earnings were below both analysts ' forecasts and the year-earlier level .
Blue Arrow added 1\/2 to 17 1\/4 .
The British company plans to change its name to Manpower , the name of its U.S. unit , and write off part of nearly $ 1.2 billion in good will as a possible prelude to reincorporating in the U.S. .
Dravo rose 5\/8 to 16 1\/8 .
Shearson Lehman Hutton began its coverage of the company with favorable ratings .
Intertan jumped 2 1\/4 to 56 7\/8 .
The company reported that earnings from operations for the September quarter were up about 25 % from a year earlier .
Bay Financial , which said it may be forced to file under Chapter 11 if it ca n't reach an agreement with its lenders to relieve its debt burden , plunged 1 3\/8 to 2 1\/8 .
The Amex Market Value Index fell 1.25 to 375.16 .
Volume totaled 16,800,000 shares .
Among active Amex issues , the American depositary receipts of B.A.T Industries fell 1\/4 to 11 3\/4 on turnover of 885,800 .
Investment bankers and retailers said the turmoil on Wall Street may benefit managers who plan to bid for U.S. retailing units of the British firm because takeover prices may not be as high as before the recent correction .
Fruit of the Loom slipped 1\/8 to 12 3\/8 on 501,200 shares .
DWG Corp. jumped 1 1\/4 to 15 on 454,100 shares .
Carnival Cruise Lines Class A dropped 1 to 21 1\/8 on 331,400 shares .
Amex issues with big percentage price gains included two Eastern Air Lines preferred stocks , reacting to the news about improved recovery in flight schedules after the company filed for bankruptcy protection .
Eastern 's Class F preferred rose 12 % , or 1 1\/4 , to 11 3\/4 ; the Class E preferred gained 7 % , or 5\/8 , to 10 1\/4 .
The biggest percentage gainer on the Amex was Enviropact , which jumped 23 % , or 5\/8 , to 3 3\/8 on volume of 29,000 shares .
On Monday , the company , a provider of environmental consulting services , reported a wider fiscal fourth-quarter loss and predicted a loss for its fiscal 1990 first quarter , but said a profit is expected for all of fiscal 1990 .
But its auditor , Ernst & Young , said Enviropact 's financial situation raises `` substantial doubt about its ability to continue as a going concern . ''
Mission Resource Partners advanced 8 % , or 1 3\/8 , to 18 7\/8 .
Sonja Steptoe and David Wilson contributed to this article .
ONE LIBERTY PROPERTIES Inc. declared a dividend of 40 cents a share on its $ 16.50 cumulative convertible preferred stock , payable Jan. 2 to stock of record Dec. 8 .
But directors of the Great Neck , N.Y. , real estate investment trust did n't act on the common stock dividend .
And they wo n't consider such a dividend , the trust added , before results are available for the first quarter of 1990 .
In part , the trust cited the need to retain cash for possible acquisitions .
According to a spokesman , One Liberty will have paid out as dividends the required amount of its taxable income to maintain its legal status as a real estate investment trust .
Banks are continuing to go after individual investors , despite falling interest rates .
Yields on small-denomination certificates of deposit fell at about half the rate of so-called jumbo CDs this week , according to Banxquote Money Markets , an information service based here .
Investors can get slightly higher yields on deposits below $ 50,000 than they can on deposits of $ 90,000 and up .
`` Banks want to remain competitive , '' said Norberto Mehl , chairman of Banxquote .
`` October is a big rollover month and perhaps they anticipate greater demand ... among people leaving the stock market . ''
Some bankers are reporting more inquiries than usual about CDs since Friday .
`` Reports from branches are that there has been greater interest in the last day or so , '' said Steven Braitman , a vice president at Chemical Bank in New York .
Chemical said deposits Monday were about $ 5 million higher than usual and it expects more activity as investors receive the proceeds from sales of stock .
`` This is no time to be playing in the street ...
the Dow has more ups and downs than an elevator , '' proclaimed an advertisement Monday in New York newspapers , touting Lincoln Savings Bank 's one-year CD .
Harold Jones , Lincoln 's chief retail banking officer , said there has n't yet been `` a discernible response , '' although the ad included a coupon that could arrive later in the week .
Friday 's market rout came smack in the middle of the heaviest month for CD rollovers , when a number of banks and thrifts already have promotions under way .
First National Bank of Boston , for example , is offering certain new depositors an extra quarter of a percentage point on six-month and 12-month CDs .
Some banks actually boosted yields on the shortest term CDs in the latest week .
New York 's Citibank , for instance , increased the yield on small-denomination three-month CDs to 8 % from 7.9 % .
On average , however , three-month CDs at major banks are yielding a tenth of a percentage point less than they were a week ago .
Average yields on CDs aimed at individual investors fell less than half as much as yields on Treasury bills sold at Monday 's auction .
Six-month CDs of $ 50,000 and less yielded an average 8.02 % in the week ended Tuesday , down from 8.10 % , according to Banxquote .
The yield on six-month T-bills fell to 7.82 % on Monday , from 8.01 % the week before .
Meanwhile , the average yield on six-month CDs of more than $ 90,000 fell to 7.93 % in the latest week , according to Banxquote , from 8.10 % the week before .
Mr. Mehl noted that actual rates are almost identical on small and large-denomination CDs , but yields on CDs aimed at the individual investor are boosted by more frequent compounding .
CDs sold by major brokerage houses , which like jumbo CDs tend to closely follow interest rate trends , also posted larger drops in yields .
A six-month , broker-sold CD , for example , was yielding an average 8.09 % in the latest week , a fifth of a percentage point lower than the week before .
In late April , when interest rates were at their recent highs , short-term CDs sold by brokers were offering yields half a percentage point or more higher than banks .
CD yields are generally expected to fall further in coming weeks .
`` What happened in the stock market and the bigger trade deficit '' reported yesterday `` make it unlikely that short-term interest rates will rise '' any time soon , said Mr. Mehl of Banxquote .
`` Even before the market drop , rates were down about half a percentage point , '' said Robert J. Hutchinson , senior vice president for retail marketing at Manufacturers Hanover Trust Co. in New York .
`` That puts pressure on CD rates .
Conservatives have an important decision to make this fall .
At the recent meetings of the World Bank and International Monetary Fund , the Bush administration announced its intention to decide by yearend the size of the next increase in the IMF 's capital base .
While the U.S. share of the increase probably will not reach the $ 12 billion or more implicit in the IMF 's request for a doubling of its $ 90 billion capital , the administration probably will agree to a multibillion-dollar increase .
This would be consistent with its unwavering support for the Brady Plan and G-7 exchange-rate intervention , and with its financial commitment to Mexico , Poland and others .
The IMF has several reasons for requesting the increase .
Its role in the economies of developing countries has grown steadily since the 1970s .
The size and pace of disbursements will accelerate further under the Brady Plan , which promises larger and earlier disbursements to approved countries .
At least three other factors have encouraged the IMF to insist on increased capital .
First , it argues that its capital base must be increased in order to maintain its size relative to world financial markets , for which it feels some responsibility .
Second , the World Bank 's recent $ 75 billion capital increase -- $ 14 billion from the U.S. -- has left the IMF feeling less than first fiddle among international financial institutions .
Third , the IMF would like to meet Japan 's request for increased ownership ( currently 4.5 % ) .
Japan has supported a larger role for the IMF in developing-country debt issues , and is an important financial resource for IMF-guided programs in developing countries .
While international politics may argue for the capital increase , there is a clear economic case against it .
Opponents of the increase argue that the IMF practices central planning while supporting ineffective governments .
They question whether the IMF has any role in developing countries , given its original mandate to assist industrial countries in balance-of-payments emergencies .
Opponents show that there are already more funds available than commendable reform efforts .
They worry that new IMF funding of developing countries will simply end up substituting IMF debt for reschedulable commercial bank debt , a bad trade all around .
They believe microeconomics , which addresses the problems of markets , investment climate and management practices , is the key to developing-country growth , not the IMF 's Keynesian focus on trade deficits , quarterly targets and government debt .
They point at the numerous developing-country governments that have inflated , taxed and regulated themselves into despair under successive IMF programs .
Decisions on increases in the IMF 's capital base traditionally are made by the administration , with subsequent authorization by Congress .
The last U.S. congressional authorization , in 1983 , was a political donnybrook and carried a $ 6 billion housing program along with it to secure adequate votes .
The politics of the 1990 congressional authorization are likely to be similar to those of previous authorizations .
Liberals may support the stabilizing , quasi-governmental role of the IMF on two conditions : that the administration give assurances that liberal Democrats ' support will not be used against them in congressional re-election campaigns ; and that the legislation address -- with dollars -- social and environmental concerns .
Conservative Republicans will be given the choice of supporting or fighting their party 's popular president in an election year .
A U.S. decision to refuse the IMF its capital increase , or limit it to 25 % , would bring a major change in international economic policy , and could not be taken lightly .
Commentators would fret over the implications for the G-7 coordination process and the stability of world financial markets .
Because commercial banks and the developing-country governments believe they will get a piece of any capital increase , a scaled-down IMF mission would leave both feeling shortchanged .
Furthermore , a U.S. rejection of the capital increase ( and transfer of shares to Japan ) would give Japan an argument against future calls for economic burden-sharing .
On the other hand , a decision to increase the IMF 's capital would reinforce the central economic role of multilateral institutions in developing countries .
With the increase , even more developing-country energy and talent would be diverted from creating profitable economic systems to setting up economic planning ministries that generate IMF-approved economic plans .
Upping the ante could slow economic development even further , as countries delay market-opening steps in anticipation of richer multilateral support .
Conservatives should take a position prior to the administration 's year-end deadline .
The issues are too important to be left to the financial and budget ministries fighting over the size of the capital increase , rather than its purpose .
If conservatives do n't support an increase in the IMF 's capital , then it is incumbent on them to speak up now and explain the alternative .
Mr. Malpass directs the Republican staff of the Joint Economic Committee of Congress .
The Chicago Mercantile Exchange fined and suspended two commodities traders accused of making prearranged trades with each other that allegedly cheated a customer .
Merc officials said Gary N. Roberts was disciplined following the exchange 's investigation of his trading in several commodities pits from July to November 1988 .
The Merc said Mr. Roberts withheld from the market certain orders in cooperation with another trader , David Stein .
The Merc fined Mr. Roberts $ 15,000 and suspended his trading membership for three years .
Also , he and Mr. Stein were ordered to make restitution of $ 35,000 to a customer .
Mr. Stein was fined $ 25,000 and suspended for three years .
Messrs. Roberts and Stein could n't be reached for comment .
The Merc said that as part of the disciplinary settlement , neither man admitted , nor denied the alleged violations .
Neither was among the 46 traders indicted last August in a federal investigation of traders at both the Merc and the Chicago Board of Trade .
In a move that could pose a new competitive challenge to Time Warner Inc. 's powerful Home Box Office , cable giant Tele-Communications Inc. agreed to buy half of Showtime Networks Inc. from Viacom Inc. for $ 225 million .
The purchase comes after nearly three years of on-again off-again talks between TCI and Viacom , which has also discussed the sale of an interest in Showtime with other cable operators .
Showtime is a distant No. 2 to Home Box Office , and in May filed a $ 2.5 billion antitrust suit against Time Warner , charging the company and its HBO and American Television cable units with conspiring to monopolize the pay TV business .
HBO has close to 24 million subscribers to its HBO and Cinemax networks , while Showtime and its sister service , The Movie Channel , have only about 10 million , according to Paul Kagan Associates , a Carmel , Calif. , research firm .
For TCI , the investment in Showtime puts it in an unusual position ; as the largest cable operator , with control of close to 12 million of the nation 's 52 million cable subscribers , TCI is HBO 's largest customer .
But TCI President John Malone has long been concerned about HBO 's dominance of the pay TV business , and has been eager to keep Showtime as a healthy competitor .
`` It is important to the cable industry that we have a vibrant and competitive pay-television marketplace , '' Mr. Malone said in a statement .
In a telephone interview , Robert Thomson , TCI senior vice president , said Showtime 's suit against HBO `` does n't involve us , and nothing we 're doing here bears any relationship to that . ''
He added , `` We do n't intend to be drawn into it , '' noting that TCI wo n't play any active role in the management of Showtime .
Linking up Showtime with the largest cable operator in the U.S. could sharply boost its subscribers .
TCI said it may bring in other cable operators as investors , a practice it has employed in the past with investments in other cable networks , such as The Discovery Channel .
Additional cable partners could boost subscribers even further .
Time Warner declined comment .
In addition to owning HBO , Time Warner owns American Television & Communications Inc. , the nation 's second largest cable operator after TCI .
Viacom also owns cable systems , but it is the 14th largest operator of such systems , with less than one million subscribers .
The TCI investment is a big victory for Viacom 's chief executive officer , Frank Biondi , and Winston H. Cox , president of the Showtime unit .
`` This takes any question of Showtime 's viability and puts it away once and for all , '' Mr. Biondi said in a telephone interview .
The fight between HBO and Showtime is particularly acrimonious because Mr. Biondi is the former chief executive of HBO , and Mr. Cox served as chief of marketing for the service .
They were both hired by Sumner Redstone , the Boston billionaire who took control of Viacom three years ago in a leveraged buy-out .
Time Warner has vigorously denied all of Viacom 's allegations .
Boeing Co. , already struck by its Machinists union , briefly called off contract talks with its engineers and labeled their demands `` grossly excessive . ''
Later , however , the company agreed to meet on Monday with the Seattle Professional Engineering Employees Association after a federal mediator intervened , according to the union .
A spokesman for the engineers said the company asked the union to reduce its demands , which included a 19 % pay hike in the first year and 8 % in the second and third years .
The union represents about 28,000 engineers and technical workers .
Its contract expires Dec. 1 .
Meanwhile , a federal mediator is scheduled to meet today with Boeing officials and representatives of 55,000 striking Machinists .
`` It will take several meetings to resolve this , '' said a spokesman for the Machinists union .
`` We do n't want to bring back something the members will reject . ''
Machinists already have rejected a package that would have provided a 10 % pay raise plus bonuses over the three-year life of the contract .
It also would have reduced mandatory overtime .
Investor Asher Edelman increased his stake in Intelogic Trace Inc. and cleared the way for additional purchases .
It was n't clear , however , whether the actions were related to a battle between the corporate raider and New York attorney Martin Ackerman for control of Datapoint Corp. , a San Antonio , Texas-based data-processing systems maker .
Intelogic Trace , a computer services company , was spun off to Datapoint holders in 1985 , after Mr. Edelman gained control .
After Mr. Ackerman announced he was soliciting consents from shareholders in order to wrest control of Datapoint from Mr. Edelman , the corporate raider purchased 30 % of Datapoint 's shares .
In a Securities and Exchange Commission filing , Mr. Edelman said from Sept. 29 to Oct. 13 , he acquired 309,500 shares of Intelogic common shares for $ 2.25 to $ 2.375 each .
The purchases increased his stake to 16.2 % of the shares outstanding .
The filing also said certain provisions which apply to persons acquiring 20 % or more of Intelogic common stock , were waived by Intelogic for Mr. Edelman , who is chairman of the company .
Mr. Edelman could n't be reached for comment .
The federal government should make free , voluntary testing for the AIDS virus the cornerstone of an expanded campaign to stop the spread of acquired immune deficiency syndrome , the Hudson Institute recommended .
`` By encouraging massive , routine , voluntary testing we can enable society to voluntarily segregate itself sexually into two groups : those who carry the virus and those who do not , '' the Indianapolis research organization said in a new report .
The report takes a more alarmed view of AIDS and recommends a more sweeping response than many other analyses .
It warns that the AIDS epidemic `` may reduce the rate of growth of the work force , curb productivity gains and slow economic growth . ''
It contends that current government policy is failing to stem the AIDS epidemic because it suggests the use of condoms can make sex `` safe . ''
But the report says : `` The only safe sex is sex between uninfected partners , '' and testing is the only way to learn of infection .
Hudson 's researchers estimated that it would cost less than $ 650 million a year to test the entire population between the ages of 12 and 65 years old .
In addition , the report recommends that federal and state governments provide free treatment to all who test positive .
An unexpectedly sharp widening in the U.S. trade gap for August dragged the dollar lower Tuesday , but profit-taking on short positions helped the currency rebound to close mixed against major counterparts .
While the market kept careful tabs on Wall Street 's gyrations , it shrugged off a modest downturn in equities to bid the dollar well above the day 's lows .
Soon after the release of the U.S. trade figures , the dollar plunged to an intraday low of 140.95 yen .
It also declined against the mark but did n't reach its intraday low of 1.8435 marks until two hours later .
The unit stabilized about midday New York time at around 1.85 marks and 141 yen , prompting unconfirmed rumors that the U.S. Federal Reserve had intervened to blunt the unit 's tumble .
The dollar finished at its intraday highs .
Dealers noted that the foreign exchange market 's initial bearish reaction to the U.S. trade figures was tempered later by a `` calmer reassessment of the data . ''
The U.S. Commerce Department reported a $ 10.77 billion deficit in August , compared with a revised July deficit of $ 8.24 billion .
Economists had expected a $ 9.1 billion gap .
The August figure reflected a 6.4 % rise in imports and a 0.2 % drop in exports .
Marc M. Goloven , an economist with Manufacturers Hanover Trust in New York , said that while the figures appear to indicate a sadly deteriorating U.S. trade performance , there 's still enough positive news in the data to justify buying dollars .
He said that while the U.S. trade gap with Canada has widened significantly , the trade deficit with Western Europe and Japan continues to narrow .
And he added that manufactured goods exports are still rising .
The dollar 's near-term path remains foggy , according to currencny analysts , who characterize the market as `` bewildering . ''
In late New York trading yesterday , the dollar was quoted at 1.8667 marks , down from 1.8685 marks late Monday , and at 142.75 yen , up from 141.85 yen late Monday .
Sterling was unchanged at $ 1.5753 .
In Tokyo Wednesday , the U.S. currency opened for trading at 142.55 yen , unchanged from Tuesday 's Tokyo close .
Later , the U.S. currency fell to about 142.25 yen on news reports of the San Francisco earthquake .
Some analysts remain bullish and point out that the dollar continues to be well bid despite key rate increases in Europe and Japan , several weeks of aggressive dollar sales by the world central banks -- some traders estimate that the barrage of sales topped $ 12 billion -- and a 190-point plunge on the New York Stock Exchange .
They note that the U.S. unit is trading at the upper end of the presumed target zones established by the Group of Seven trading partners .
The G-7 comprises West Germany , the U.S. , France , the U.K. , Italy , Canada and Japan .
The so-called Louvre accord was seen to have set ranges of 1.70 marks to 1.90 marks and 120 yen to 140 yen .
They say that the recent injection of liquidity into the U.S. banking system has been modest , and they do n't anticipate significant easing by the U.S. Federal Reserve .
The Fed arranged $ 1.5 billion of customer repurchase agreements Tuesday , the second repurchase agreement in two days .
The move , which injects capital into the system , is seen as an effort to reassure the finanicial markets that the U.S. central bank is ready to provide the ample liquidity .
But other analysts contend that while the Fed 's move to loosen credit has n't been aggressive , it nevertheless sends a clear signal that , at least for now , the Fed has relaxed its grip on credit .
They add that the Fed has allowed the key federal funds interest rate to dip to about 8 5\/8 % from its levels of just below 9 % last week .
The federal funds rate is the overnight lending rate that banks charge each other .
Market participants said that the mark continues to post the most significant gains against the dollar .
On the Commodity Exchange in New York , gold for current delivery settled at $ 367.40 an ounce , up 10 cents .
Estimated volume was a moderate 3.5 million ounces .
In early trading in Hong Kong Wednesday , gold was at $ 366.55 an ounce .
National Semiconductor Corp. said it settled a four-year-old patent infringement case against Linear Technology Corp. by accepting a $ 3 million payment from Linear in exchange for granting Linear irrevocable licenses for all products involved .
The two companies also agreed to settle any future property rights issues over the next 10 years through binding arbitration , both companies said .
The products are so-called analog integrated circuits that have applications in the consumer electronics , automobile and electronic instrumentation markets .
Linear Technology , Milpitas , Calif. , called the settlement `` positive , '' since products covered by the disputed patents account for about 20 % of its annual sales .
The electronics concern said it already has paid $ 2 million of the settlement to National Semiconductor , Santa Clara , Calif. , and will pay the remaining $ 1 million in equal installments over the next eight quarters .
The payments are n't expected to have an impact on coming operating results , Linear added .
NBC 's winning streak has been canceled .
The National Broadcasting Co. , a unit of General Electric Co. , had its record-breaking 68-week reign as the prime-time ratings leader snapped yesterday by ABC-TV , a subsidiary of Capital Cities\/ABC Inc .
In the ratings compiled by the A.C. Nielsen Co. , ABC , which broadcast the World Series , topped the competition with a 14.8 rating and 25 share .
NBC was second with a 13.9 rating and 24 share followed by CBS Inc. 's television network with a 12.5 rating and 21 share .
( A ratings point represents 904,000 television households ; shares indicate the percentage of sets in use . )
The first two games of the World Series between the Oakland Athletics and San Francisco Giants did n't finish in the top 10 ; instead they landed in 16th and 18th place .
The highest-rated show continues to be ABC 's `` Roseanne . ''
NBC had five of the top 10 shows ; ABC had four and CBS had one .
CBS held the previous record for consecutive No. 1 victories -- 46 weeks -- during the 1962-63 season .
Procter & Gamble Co. , Cincinnati , expanding its presence in the food service market , said it acquired Maryland Club Foods , a coffee supplier , from an investor group led by F. Philip Handy of Winter Park , Fla .
Terms were n't disclosed .
Houston-based Maryland Club Foods , which had sales of about $ 200 million last year , sells coffee under the Maryland Club and Butter-Nut brands to restaurants , hotels , offices and airlines .
The acquisition `` gives us additional production capacity for the food service coffee business and a stronger distribution network , '' a P&G spokesman said .
P&G already sells its Folgers ground roast coffee to food service concerns , but not to as many markets as Maryland Club .
For example , P&G up until now has n't sold coffee to airlines and does only limited business with hotels and large restaurant chains .
Maryland Club also distributes tea , which fits well with P&G 's Tender Leaf brand , and hot cocoa products .
The company said the acquisition has been completed and reviewed by the Federal Trade Commission .
The purchase includes a coffee-roasting plant in Omaha , Neb. , and a leased facility in Houston .
MACMILLAN BLOEDEL Ltd. said it borrowed 215 million Dutch guilders ( US$ 102 million ) from a group of Dutch institutional investors .
MacMillan Bloedel , a Vancouver , British Columbia , forest products concern , said the 8.1 % loan is due Oct. 16 , 1996 .
Funds will be used to repay existing short-term debt and to finance capital spending , it said .
President Bush will veto a bill funding the Departments of Labor , Education and Health and Human Services because it would allow federal funding of abortions for victims of rape and incest , the White House said .
Mr. Bush had threatened a veto previously .
But he put off a firm decision while his aides and legislators searched for a compromise that would tighten requirements for such abortions in a way acceptable to the president .
White House Press Secretary Marlin Fitzwater said negotiations between Bush aides and lawmakers ended Monday without success .
Most lawmakers think it will be extremely difficult for Mr. Bush 's opponents on the abortion issue to round up the votes needed to override the veto .
But there still may be prolonged debate and political maneuvering that holds up the $ 156.7 billion funding bill for the fiscal year that began Oct. 1 .
Mr. Bush has said he personally approves of abortions in the cases of rape , incest and danger to the life of the mother .
But he has opposed Medicaid funding of abortions for poor women who say they are victims of rape and incest , arguing that those exceptions are enforced so loosely that they open the way for abortions for other women .
NEWSPAPERS :
Media General Inc. intends to sell two of its West Coast weekly newspaper chains , Golden West Publishing Inc. and Highlander Publications , which together comprise 31 papers .
Media General said it has had inquiries from potential buyers and expects to complete a sale in 1989 .
It would n't discuss a price .
Lee Dirks & Associates is to sell the chains .
J.P. Morgan & Co. , New York , will help the statutory managers of DFC New Zealand Ltd. to evaluate the failed investment bank 's condition .
Earlier this month , the Reserve Bank of New Zealand , the country 's central bank , appointed the managers to run the investment bank and pay creditors .
DFC asked the central bank to appoint managers after it revised loan-loss provisions to around the same level of shareholders ' funds of 180 million New Zealand dollars ( US$ 105.4 million ) .
DFC is held 80 % by National Provident Fund , New Zealand 's largest pension fund , and 20 % by Salomon Brothers Inc. , the investment-bank and securities-firm subsidiary of Salomon Inc. in New York .
A spokeswoman for J.P. Morgan , parent of the bank Morgan Guaranty Trust Co. , confirmed its appointment to assist the managers but declined to elaborate .
The managers said in a brief statement yesterday that Morgan will help evaluate DFC 's position and help determine alternatives .
The managers do n't expect to complete the evaluation until Nov. 30 .
An experimental vaccine can alter the immune response of people infected with the AIDS virus , a prominent U.S. scientist said .
However , that does n't mean they can benefit from the vaccine .
Its effectiveness ca n't be determined until a large clinical trial is undertaken by the Army in January , according to Robert Redfield , chief of acquired immune deficiency syndrome research at Walter Reed Army Institute of Research .
Dr. Redfield 's report on early experiments using an AIDS vaccine made by MicroGeneSys Inc. of West Haven , Conn. , came at a meeting of AIDS vaccine researchers in Florida late Monday .
The vaccine , VaxSyn HIV-1 , has been safely given to 14 people , some of whom are experiencing substantial increases in certain antibodies .
`` The conventional wisdom used to be that you could n't modify the immune response of an infected individual '' by innoculating them with synthetic viral proteins , Dr. Redfield said .
`` We 've demonstrated that you can . ''
He said certain volunteers developed kinds of antibodies associated with early AIDS .
Other antibodies sparked by the preparation are of a sort rarely present in large quantities in infected or ill individuals , he added .
One of the mysteries of AIDS remains why infected people produce large quantities of antibodies , but deteriorate nonetheless .
Cross & Trecker Corp. said it reached an agreement to sell its Wiedemann division to recently created Murata Wiedemann Inc. , a U.S. affiliate of Murata Machinery Ltd. of Kyoto , Japan .
The agreement also includes the purchase of Cross & Trecker 's Warner & Swasey ( Switzerland ) AG unit by a European affiliate of Murata Machinery .
Cross & Trecker is also selling its equity interest in a Japanese joint venture , Murata Warner Swasey , to Murata Machinery .
Cross & Trecker , a Bloomfield Hills , Mich. , machine-tool maker , said the net sales price of the total transaction is $ 24 million .
The Wiedemann division was one of three businesses put up for sale in Cross & Trecker 's restructuring program announced in July .
Cross & Trecker said negotiations are under way for the sale of another company , RobertsCorp .
The average interest rate fell to 8.292 % at Citicorp 's $ 50 million weekly auction of 91-day commercial paper , or corporate IOUs , from 8.483 % at last week 's sale .
Bids totaling $ 465 million were submitted , and accepted bids were at 8.292 % .
Citicorp also said that the average rate fell to 7.986 % at its $ 50 million auction of 182-day commercial paper from 8.1255 % at last week 's sale .
Bids totaling $ 415 million were submitted , and accepted bids were at 7.986 % .
The bank holding company will auction another $ 50 million of commercial paper in each maturity next Tuesday .
Matra S.A. reported its 1989 first-half profit soared 88 % , and indicated that its previous estimate of a 50 % rise in earnings for all of 1989 will be exceeded by a wide margin .
The French electronics and defense group said attributable consolidated net profit for the first six months of 1989 totaled 244 million francs ( $ 38.4 million ) , compared with 130 million francs ( $ 20.5 million ) in the corresponding period of
Operating profit climbed 51 % , to 572 million francs from 378 million in the first half of 1988 .
Matra said the sharp improvement in net profit partly reflected a decline of 59 million francs in the group 's net loss from nonrecurring items in the first half of this year to 104 million francs from 163 million a year earlier .
There was also a decline in the group 's net financial costs to 25 million francs from 50 million a year before .
These movements were offset , however , by a steep rise in corporate income tax payments to 199 million francs from 35 million in the first six months of 1988 .
Matra said the sharp rise in its first-half earnings was based on a 15 % gain in consolidated revenue to 10.16 billion francs from 8.85 billion a year earlier .
Rep. Lee Hamilton ( D. , Ind . ) said he and Rep. Byron Dorgan ( D. , N.D . ) are backing away from their proposal to make the Treasury Secretary a voting member of the Federal Reserve panel that sets monetary policy .
Rep. Hamilton said the bill will be modified substantially to call for two meetings each year between the Fed 's open market committee and the Treasury Secretary , the chairman of the Council of Economic Advisers and the director of the Office of Management and Budget .
The original bill was strongly opposed by the Fed and publicly criticized by friends of the Fed as an attempt to undermine the central bank 's independence .
Fed critics , however , hailed it as a long overdue attempt to bring a measure of openness and democracy to the setting of monetary policy .
Rep. Hamilton said the purpose of the meetings would be to `` improve communications and perhaps coordination between the executive branch and the Fed . ''
Fed Chairman Alan Greenspan meets regularly for lunch with Treasury Secretary Nicholas Brady and talks frequently with Budget Director Richard Darman and Michael Boskin , chairman of the Council of Economic Advisers .
The administration officials do n't ordinarily meet with the entire membership of the open market committee .
B.F. Goodrich Co. said third-quarter profits dropped 34 % because of lower prices for polyvinyl chloride materials , the company 's largest product group .
Net fell to $ 40.1 million , or $ 1.50 a share , from $ 60.7 million , or $ 2.32 a share , a year earlier .
Sales for the quarter slipped 2.7 % to $ 601.3 million from $ 618.1 million .
Polyvinyl chloride capacity `` has overtaken demand and we are experiencing reduced profit margins as a result , '' said John D. Ong , chairman and chief executive .
Prices for general-purpose PVC resin have dropped more than 15 % since last December , he said .
The plastic resin is used in a wide range of products , including siding , pipe and electrical wire insulation .
Goodrich 's vinyl-products segment reported operating profit for the quarter of $ 30.1 million , less than half the $ 64.1 million of the year-earlier quarter .
Third-quarter operating profit of the specialty-chemicals group declined slightly to $ 24.3 million from $ 24.9 million .
But operating profit from aerospace products rose nearly 50 % to $ 15 million from $ 10.1 million .
In New York Stock Exchange composite trading , shares of the Akron , Ohio-based company fell $ 1.375 to $ 49.125 .
Fiat S.p . A. , Italy 's leading industrial group , is conducting `` concrete '' talks with West Germany 's Daimler-Benz AG on a series of projects in the aerospace sector , Fiat officials said .
However , the officials said it was too early to disclose the nature of the proposed projects or indicate when the talks might be concluded .
Daimler-Benz Chairman Edzard Reuter told Milan 's financial daily Il Sole 24 Ore that talks are taking place between both companies ' aerospace units .
`` While Mr. Reuter 's comments please us very much , there currently are no talks in progress regarding the automotive industry , '' a Fiat spokeswoman said .
In the interview , Mr. Reuter said he is thinking foremost of cooperation in the truck sector , but `` in the long run , I do n't want to rule out that we can also come a bit closer in personal cars . ''
Roberto Morelli , Italy analyst for County Natwest Securities in London , said that right now `` the market is n't being influenced by that kind of news , '' referring to the conditional nature of the talks mentioned by Mr. Reuter and by the uncertainty surrounding world stock exchanges this week .
Paul Tanner was named president , chief executive officer and chairman of this oil and natural gas company .
He succeeds John A. Boudreau , who resigned for personal reasons .
Mr. Tanner had been president of Penn Pacific 's National Southwest Capital Group subsidiary .
Mr. Boudreau will remain with Penn Pacific as a director and a member of the executive committee .
He has also agreed to become president of a new subsidiary to be formed to make future acquisitions , the company said .
Spooked investors , despite their stampede to dump takeover stocks , should hold on tight to their Jaguar shares .
That 's the view of some analysts here who argue that Britain 's leading maker of luxury cars still may have two U.S. auto giants battling for it .
Yesterday , Ford Motor disclosed that it has raised its holding in Jaguar to 10.4 % from 5 % .
Both Ford and its rival General Motors recently set their sights on grabbing significant minority stakes in the British company .
Ford 's latest move increases the pressure on GM to complete its current talks with Jaguar quickly .
GM is likely to reach the cooperative operating pact it has been seeking in about two weeks , knowledgeable individuals say .
At that point investors may face a long , bumpy ride .
A victor in the fight for Jaguar may not emerge until after the expiration late next year of British government takeover restrictions .
The curbs prevent a buyer from purchasing more than 15 % of Jaguar shares without permission .
`` This is an exceptionally odd takeover battle , '' says London analyst Christopher Will of Shearson Lehman Hutton .
Jaguar 's American depositary receipts were up 3\/8 yesterday in a down market , closing at 10 3\/8 .
( Jaguar 's ADRs make the company one of the most widely held United Kingdom stocks in the U.S. , with more than one-fourth of its shares owned there . )
Jaguar topped the most-active list for the U.S. over-the-counter market Monday .
And on London 's Stock Exchange Monday , 18.5 million shares were traded , far above the usual volume .
Ford 's share purchases undoubtedly accounted for much of Monday 's heavy trading .
Last week , many Jaguar shareholders took their money and ran .
Fears that Ford 's ardor might be cooling put Jaguar shares into reverse after GM confirmed its friendly negotiations with Jaguar .
But yesterday 's announcement indicates that Ford has n't lost interest .
Both Shearson 's Mr . Will and Stephen Reitman , European auto analyst at the London brokerage firm UBS-Phillips & Drew , recently switched their Jaguar recommendations to hold from buy .
`` Sit tight '' through the coming volatility , Mr. Reitman suggests , though he concedes that many small investors will find Jaguar 's zigzags `` too hard to swallow . ''
But a crucial point is how Ford reacts when GM , the world 's largest auto maker , firms up its proposed deal with Jaguar .
At the moment , Ford executives will say little beyond reiterating their desire to raise Ford 's Jaguar stake to about 15 % .
GM is expected to inject roughly # 200 million ( $ 316 million ) by acquiring some Jaguar shares , and then win Jaguar management 's promise of an eventual 30 % stake .
Analysts believe the car makers also will create joint ventures to develop new executive models , doubling Jaguar 's yearly output of 50,000 cars .
Jaguar shareholders would have to bless such a far-reaching accord .
Ford might challenge the proposal by offering a full bid if holders and the U.K. government agreed to drop the anti-takeover barrier early .
`` I think Ford is going to come out with full guns blazing , '' Mr. Reitman says .
`` Ford wants { Jaguar } very much . ''
U.S. takeover-stock speculators , who may own between 20 % and 30 % of Jaguar , could give Ford enough votes to block the GM deal .
GM might counterbid .
Then , Mr . Will says , `` you get a bidding war between two very rich , very determined international companies . ''
He believes Jaguar 's share price could zoom to between # 8 and # 10 ( $ 12.60 to $ 15.80 ) .
`` There 's quite a bit of value left in the { Jaguar } shares here even though they have run up '' lately , says Doug Johnson , a fund manager for Seattle-based Safeco Asset Management .
At the moment , he intends to keep the firm 's 180,000 Jaguar shares .
The risk is that Jaguar 's share price could slump if GM 's agreement with Jaguar effectively locks out its U.S. rival .
`` Ford 's appetite to attack { Jaguar } could gradually wane over time , particularly if Saab is a reasonably attractive proposition , '' says John Lawson , an auto analyst at London 's Nomura Research Institute .
He thinks Saab-Scania AB on Friday will announce the sale of 50 % of its car division to Ford ; the companies have been discussing closer cooperation for months .
Clifford Stahl , president and chief investment officer of C-S Capital Advisors Inc. , two weeks ago sold his Cincinnati firm 's 107,100 Jaguar ADRs at about 10 each , making a tidy profit on a holding purchased at 4 7\/8 in early May .
`` I thought the probabilities of { a bidding war } happening were less , '' he says .
Of course , that was before Ford 's latest move .
Jaguar ( OTC ; Symbol : JAGRY )
Business : Luxury cars
Year ended Dec. 31 , 1988 :
Revenue : $ 1.71 billion
Net income : $ 44.9 million ; or 25 cents a share
First half ended , June 30 , 1989 :
Net loss : $ 1.7 million vs. net income : $ 21.2 million ; or 12 cents a share
Averae daily trading volume : Ordinary shares outstanding : 182.9 million
NOTE : All figures are translated into U.S. dollars based on current exchange rates .
A.F. Sloan , 60 years old , announced that he will retire next April as chairman and chief executive officer of this snack food and bakery products maker .
No replacement was immediately named .
Mr. Sloan plans to remain on the board until his current term expires in April 1991 , a Lance spokesman said .
Newport Electronics Inc. of Santa Ana , Calif. , said Milton B. Hollander , who holds a 49.4 % stake , requested a special shareholders ' meeting next Wednesday to remove four current directors and elect an alternative slate .
Mr. Hollander 's High Technology Holding Co. of Stamford , Conn. , acquired most of its stake last August in an $ 11-a-share tender offer for Newport , a maker of electronic-measuring devices .
Newport said Mr. Hollander is asking shareholders to retain only one director , James R. Lees , a Newport vice president .
The board is n't proposing a slate of its own and the other four current directors do n't want to serve beyond the special meeting date , Newport said .
Mr. Hollander `` is the new owner and wants to exercise control , '' said Barret B. Weekes , Newport 's chairman .
Sandoz AG , a major Swiss chemical and pharmaceutical group , said that its group sales rose 25 % to 9.482 billion francs ( $ 5.80 billion ) in the first nine months of this year , with strong gains in all divisions .
A year earlier sales totaled 7.567 billion francs .
Positive currency rates and strong sales growth led to a substantial rise in consolidated profit in the period , although the company did n't provide figures , as is customary with Swiss companies .
Sandoz said it expects a `` substantial increase '' in consolidated profit for the full year , barring major currency rate changes .
Amstrad PLC , a British maker of computer hardware and communications equipment , posted a 52 % plunge in pretax profit for the latest year .
The # 76.6 million ( $ 120.6 million ) in pretax profit for the 12 months to June 30 was down from # 160 million ( $ 252 million ) a year earlier and below market expectations of # 80 million and # 90 million .
The slump in profit , which came despite steady sales , was attributed to increased costs for parts and problems with model introductions .
Amstrad 's profit after taxes fell a similarly steep 51 % , to # 51.1 million from # 105 million a year earlier .
Sales edged up fractionally to # 626.3 million from # 625.4 million a year earlier .
Microsoft Corp. 's earnings growth continued to outstrip that of most of its competitors and customers in the personal-computer industry , as it reported a 36 % jump in fiscal first-quarter earnings on a 33 % revenue gain .
The Redmond , Wash. company , a bellwether provider of operating systems and software for personal-computer makers and users , reported net income for the quarter ended Sept. 30 of $ 49.6 million , or 87 cents a share , up from $ 36.6 million , or 65 cents a share , in the year-ago period .
Revenue rose to $ 235.2 million , from $ 176.4 million .
Microsoft previously indicated it would have a strong quarter by forecasting its revenue gain on Oct. 4 , causing a $ 6.50 a share jump in its stock .
But its stock jumped again yesterday as it disclosed surprisingly strong margins on those sales .
Microsoft 's stock rose $ 2.875 a share in national over-the-counter trading to $ 78.625 .
The stock had hit a high of $ 81 a share early last week but collapsed to $ 73.50 in the Friday stock plunge .
The company had been experiencing softening margins because of increased sales of software applications , which have lower margins than do operating systems .
But the company said that trend was offset in the first quarter by better economies of scale and efficiencies in manufacturing .
As a result , Microsoft 's cost of goods , as a percentage of sales , fell 17 % from the year-ago quarter and 13 % from the previous period .
The trend drove up the aftertax margin -- net income as a percentage of revenues -- to 21.1 % in the quarter , compared with 20.7 % a year earlier .
Microsoft officials said the strong results also reflected continuing high demand for its software applications and operating systems .
While it has predicted that overall growth in unit sales of personal computers is slowing to about a 10 % yearly rate , its own products are selling at a much faster rate because many are geared to the high-performance end of the market .
That segment continues to post strong quarter-to-quarter gains , while the low-end , or commodity segment , of the industry is experiencing sluggish growth or even sales declines .
Compared with its previous quarter , the final period of its 1989 fiscal year , net rose 9 % , and sales rose 7 % .
Control Data Corp. , Minneapolis , signed a joint development agreement with MIPS Computer Systems Inc. to incorporate an emerging computing architecture in future machines .
MIPS is a leader in what is known as reduced-instruction set computing , or RISC , a technology combining microprocessors and sophisticated software .
In joining MIPS , Control Data follows several competitors in embracing RISC as a new design approach .
Digital Equipment Corp. , Tandem Computers Inc. , NEC Corp. and Group Bull , among others , have similar arrangements with MIPs , based in Sunnyvale , Calif .
Control Data said it expects its first RISC-based mainframe machine to be introduced next year .
The accord with MIPS calls for Control Data to share its expertise in data storage , the companies said .
Control Data also said it is developing what it called a `` supermainframe '' computer , the Cyber 2000 , intended for scientists , engineers and other users of generalpurpose high-performance computers .
UAL'S STOCK SKIDDED an additional $ 24.875 , to $ 198 , as British Airways indicated it may balk at any hastily revised version of the aborted $ 6.79 billion buy-out of United Air 's parent .
UAL has fallen $ 87.25 , or 31 % , in the three trading days since disclosure of the buy-out 's collapse jolted the stock market .
Meanwhile , investor Marvin Davis said he remains interested in UAL , but he dropped his earlier $ 300-a-share back-up bid .
Stock prices fell broadly in heavy trading , dominated by futures-related program selling and further declines by UAL and other airline stocks .
The Dow Jones industrials closed off 18.65 points , at 2638.73 , after plunging over 60.25 points in the morning .
Bond prices ended lower after an early rally , while the dollar was mixed .
The U.S. trade deficit swelled to $ 10.77 billion in August , prompting worries that the nation 's export drive had stalled .
Exports declined for the second month in a row , while imports rose to a record .
An analyst called it one of the worst trade reports since the dollar bottomed out in
Industrial output fell 0.1 % in September , the latest sign manufacturing is slowing .
An analyst cited weaker capital spending and exports .
Bankers Trust added $ 1.6 billion to reserves for Third World loans , the latest big bank to take such a step .
It expects a $ 1.42 billion quarterly loss .
Citicorp posted a 9 % drop in quarterly profit .
Manufacturers Hanover had a loss due to a big reserve addition .
Bank of New England plans to sell some operations and lay off 4 % of its work force after a year of weak earnings and mounting loan problems .
Eastern Airlines ' creditors have begun exploring alternative approaches to a Chapter 11 reorganization because they are unhappy with the carrier 's latest proposal .
Tele-Communications agreed to buy half of Showtime Networks from Viacom for $ 225 million .
The move could pose a new challenge to Time Warner 's Home Box Office .
The CFTC plans to curb dual trading on commodities markets , in which traders buy and sell both for their own account and for clients .
The move is likely to anger traders .
FDIC Chairman Seidman said that Lincoln Savings & Loan of California should have been seized in 1986 to contain losses he estimated will cost taxpayers as much as $ 2 billion .
A $ 67 billion spending bill was approved by House-Senate conferees that includes major provisions affecting the federal mortgage market .
Hooker 's U.S. unit is expected to agree in principle this week to sell its Merksamer Jewelers chain to management , according to executives .
The deficit-reduction bill became snagged over efforts to streamline the House version of the legislation in advance of a House-Senate conference .
Integrated Resources said talks have ended with another potential buyer of its core businesses .
Three big drug makers posted robust third-quarter earnings .
Merck 's profit climbed 25 % , Warner-Lambert 's 22 % and Eli Lilly 's 24 % .
Markets --
Stocks : Volume 224,070,000 shares .
Dow Jones industrials 2638.73 , off 18.65 ; transportation 1254.27 , off 49.96 ; utilities 214.54 , off 0.19 .
Bonds : Shearson Lehman Hutton Treasury index 3377.43 , off
Commodities : Dow Jones futures index 129.72 , unchanged ; spot index 129.97 , off 0.19 .
Dollar : 142.75 yen , up 0.95 ; 1.8667 marks , off 0.0018 .
Paul Ely , general partner of Alpha Partners , a venture-capital firm based in Menlo Park , Calif. , was named a director of this computer company .
Mr. Ely , 57 years old , temporarily increases the board to seven members .
However , director Thomas O'Rourke has said he wo n't seek re-election at the company 's annual meeting next month .
BroadBeach Associates Inc. , the Los Angeles investment partnership whose $ 62-a-share bid for McGill Manufacturing Co. was topped recently by a competing offer from a Swedish concern , disclosed that it sold its entire 7 % McGill stake .
McGill , a Valparaiso , Ind. , ball-bearing manufacturer , had rebuffed BroadBeach 's proposal .
It has since asked holders not to immediately tender their shares under a recent $ 72-a-share , or $ 104 million , bid from AB SKF of Sweden , until McGill directors have completed their evaluation .
In a Securities and Exchange Commission filing , BroadBeach said it sold the 101,000 McGill shares for $ 7.3 million in a private transaction on Oct. 12 .
BroadBeach did n't identify the buyer of the shares , but the date of the selloff followed by one day the Swedish concern 's tender offer , and the indicated price of the shares sold equals SKF 's $ 72-a-share tender offer price .
A BroadBeach spokeswoman said the company sold the stock in the open market and thus could n't identify the buyer or buyers .
Luis Nogales , 45 years old , has been elected to the board of this brewer .
Mr. Nogales , former president of United Press International and the Univision Spanish-language network , most recently co-founded Nogales Castro Partners , a California-based media acquisition firm .
Mr. Nogales , the first Hispanic person to serve as a Coors director , is an addition to the board , increasing its membership to nine .
Hachette S.A. , a European media and publishing group , reported a small rise in its attributable first-half group profit , excluding exceptional items , to 133.8 million francs ( $ 21.1 million ) from 130.1 million francs a year earlier .
The Paris-based group said its earlier projection -- that group profit for all of 1989 would be close to the 322.7 million francs posted for 1988 -- remains valid .
Taking into account nonrecurring gains and losses , Hachette 's group net income for the first six months of this year totaled 246.6 million francs , practically double the year-earlier figure of 124.5 million francs .
Analysts said Hachette 's earnings in the second half might be boosted by a capital gain from the sale of the Paris headquarters of a newspaper-delivery company that is 49 % owned by Hachette .
Oncor Inc. , Gaithersburg , Md. , said it received approval from the U.S. Food and Drug Administration to market a genetic test that will assist in diagnosis and treatment of leukemia and lymph cancer .
The B\/T gene rearrangement test is more accurate than existing tests for diagnosing the type of cancer , whether it has spread or whether there is a recurrence following treatment , said Oncor President Stephen Turner .
Mr. Turner said the test initially will be used in conjunction with biopsies and other tests , but eventually might become the benchmark for tumor analysis .
Mr. Turner said the test will be shipped in 45 days to hospitals and clinical laboratories .
Dr. Wyndham Wilson , a cancer treatment specialist at the National Cancer Institute , said the test is widely used in research centers but is n't having a major impact because it is only occasionally useful in choosing the most effective treatment .
But the test may prove to be more sensitive in determining whether a tumor has spread or returned following treatment , Dr. Wilson said .
`` We do n't know yet how useful it 's going to be , '' he said .
Oncor , a six-year-old developer of genetic medical tests , projects that the cancer test will help it to post its first-ever profit during the first quarter of 1990 , Mr. Turner said .
The company will charge $ 35 for a test and projects about $ 2 million in revenue from the test during the first 12 months of marketing , he said .
Unilab Corp. , Norcross , Ga. , said it acquired the clinical laboratories of closely held Central Diagnostic Laboratory Inc. in a cash and securities transaction valued at $ 85 million .
Unilab said its wholly owned MetWest Inc. unit paid $ 25 million in cash , provided $ 30 million in notes and $ 30 million in preferred stock to acquire Central 's labs in the Western U.S. .
Unilab , which provides clinical laboratory services , competed with Central , based in Tarzana , Calif. , in a number of areas .
Beyond removing a competitor , the combination should provide `` synergies , '' said Fred Harlow , Unilab 's chief financial officer .
It also will hand Unilab new markets .
In Los Angeles , for example , Central has had a strong market position while Unilab 's presence has been less prominent , according to Mr. Harlow .
