No , it was n't Black Monday . 
But while the New York Stock Exchange did n't fall apart Friday as the Dow Jones Industrial Average plunged 190.58 points -- most of it in the final hour -- it barely managed to stay this side of chaos . 
Some `` circuit breakers '' installed after the October 1987 crash failed their first test , traders say , unable to cool the selling panic in both stocks and futures . 
The 49 stock specialist firms on the Big Board floor -- the buyers and sellers of last resort who were criticized after the 1987 crash -- once again could n't handle the selling pressure . 
Big investment banks refused to step up to the plate to support the beleaguered floor traders by buying big blocks of stock , traders say . 
Heavy selling of Standard & Poor 's 500-stock index futures in Chicago relentlessly beat stocks downward . 
Seven Big Board stocks -- UAL , AMR , BankAmerica , Walt Disney , Capital Cities\ABC , Philip Morris and Pacific Telesis Group -- stopped trading and never resumed . 
The finger-pointing has already begun . 
`` The equity market was illiquid . 
Once again { the specialists } were not able to handle the imbalances on the floor of the New York Stock Exchange , '' said Christopher Pedersen , senior vice president at Twenty-First Securities Corp . 
Countered James Maguire , chairman of specialists Henderson Brothers Inc. : `` It is easy to say the specialist is n't doing his job . 
When the dollar is in a free-fall , even central banks ca n't stop it . 
Speculators are calling for a degree of liquidity that is not there in the market . 
'' Many money managers and some traders had already left their offices early Friday afternoon on a warm autumn day -- because the stock market was so quiet . 
Then in a lightning plunge , the Dow Jones industrials in barely an hour surrendered about a third of their gains this year , chalking up a 190.58-point , or 6.9 % , loss on the day in gargantuan trading volume . 
Final-hour trading accelerated to 108.1 million shares , a record for the Big Board . 
At the end of the day , 251.2 million shares were traded . 
The Dow Jones industrials closed at 2569.26 . 
The Dow 's decline was second in point terms only to the 508-point Black Monday crash that occurred Oct. 19 , 1987 . 
In percentage terms , however , the Dow 's dive was the 12th-worst ever and the sharpest since the market fell 156.83 , or 8 % , a week after Black Monday . 
The Dow fell 22.6 % on Black Monday . 
Shares of UAL , the parent of United Airlines , were extremely active all day Friday , reacting to news and rumors about the proposed $ 6.79 billion buy-out of the airline by an employee-management group . 
Wall Street 's takeover-stock speculators , or `` risk arbitragers , '' had placed unusually large bets that a takeover would succeed and UAL stock would rise . 
At 2:43 p.m. EDT , came the sickening news : The Big Board was halting trading in UAL , `` pending news . 
'' On the exchange floor , `` as soon as UAL stopped trading , we braced for a panic , '' said one top floor trader . 
Several traders could be seen shaking their heads when the news flashed . 
For weeks , the market had been nervous about takeovers , after Campeau Corp. 's cash crunch spurred concern about the prospects for future highly leveraged takeovers . 
And 10 minutes after the UAL trading halt came news that the UAL group could n't get financing for its bid . 
At this point , the Dow was down about 35 points . 
The market crumbled . 
Arbitragers could n't dump their UAL stock -- but they rid themselves of nearly every `` rumor '' stock they had . 
For example , their selling caused trading halts to be declared in USAir Group , which closed down 3 7\8 to 41 1\2 , Delta Air Lines , which fell 7 3\4 to 69 1\4 , and Philips Industries , which sank 3 to 21 1\2 . 
These stocks eventually reopened . 
But as panic spread , speculators began to sell blue-chip stocks such as Philip Morris and International Business Machines to offset their losses . 
When trading was halted in Philip Morris , the stock was trading at 41 , down 3 3\8 , while IBM closed 5 5\8 lower at 102 . 
Selling snowballed because of waves of automatic `` stop-loss '' orders , which are triggered by computer when prices fall to certain levels . 
Most of the stock selling pressure came from Wall Street professionals , including computer-guided program traders . 
Traders said most of their major institutional investors , on the other hand , sat tight . 
Now , at 3:07 , one of the market 's post-crash `` reforms '' took hold as the S&P 500 futures contract had plunged 12 points , equivalent to around a 100-point drop in the Dow industrials . 
Under an agreement signed by the Big Board and the Chicago Mercantile Exchange , trading was temporarily halted in Chicago . 
After the trading halt in the S&P 500 pit in Chicago , waves of selling continued to hit stocks themselves on the Big Board , and specialists continued to notch prices down . 
As a result , the link between the futures and stock markets ripped apart . 
Without the guidepost of stock-index futures -- the barometer of where traders think the overall stock market is headed -- many traders were afraid to trust stock prices quoted on the Big Board . 
The futures halt was even assailed by Big Board floor traders . 
`` It screwed things up , '' said one major specialist . 
This confusion effectively halted one form of program trading , stock index arbitrage , that closely links the futures and stock markets , and has been blamed by some for the market 's big swings . 
( In a stock-index arbitrage sell program , traders buy or sell big baskets of stocks and offset the trade in futures to lock in a price difference . 
) `` When the airline information came through , it cracked every model we had for the marketplace , '' said a managing director at one of the largest program-trading firms . 
`` We did n't even get a chance to do the programs we wanted to do . 
'' But stocks kept falling . 
The Dow industrials were down 55 points at 3 p.m. before the futures-trading halt . 
At 3:30 p.m. , at the end of the `` cooling off '' period , the average was down 114.76 points . 
Meanwhile , during the the S&P trading halt , S&P futures sell orders began piling up , while stocks in New York kept falling sharply . 
Big Board Chairman John J. Phelan said yesterday the circuit breaker `` worked well mechanically . 
I just think it 's nonproductive at this point to get into a debate if index arbitrage would have helped or hurt things . 
'' Under another post-crash system , Big Board President Richard Grasso ( Mr. Phelan was flying to Bangkok as the market was falling ) was talking on an `` inter-exchange hot line '' to the other exchanges , the Securities and Exchange Commission and the Federal Reserve Board . 
He camped out at a high-tech nerve center on the floor of the Big Board , where he could watch updates on prices and pending stock orders . 
At about 3:30 p.m. EDT , S&P futures resumed trading , and for a brief time the futures and stock markets started to come back in line . 
Buyers stepped in to the futures pit . 
But the build-up of S&P futures sell orders weighed on the market , and the link with stocks began to fray again . 
At about 3:45 , the S&P market careened to still another limit , of 30 points down , and trading was locked again . 
Futures traders say the S&P was signaling that the Dow could fall as much as 200 points . 
During this time , small investors began ringing their brokers , wondering whether another crash had begun . 
At Prudential-Bache Securities Inc. , which is trying to cater to small investors , some demoralized brokers thought this would be the final confidence-crusher . 
That 's when George L. Ball , chairman of the Prudential Insurance Co. of America unit , took to the internal intercom system to declare that the plunge was only `` mechanical . 
'' `` I have a hunch that this particular decline today is something ` more ado about less . 
' It would be my inclination to advise clients not to sell , to look for an opportunity to buy , '' Mr. Ball told the brokers . 
At Merrill Lynch & Co. , the nation 's biggest brokerage firm , a news release was prepared headlined `` Merrill Lynch Comments on Market Drop . 
'' The release cautioned that `` there are significant differences between the current environment and that of October 1987 '' and that there are still `` attractive investment opportunities '' in the stock market . 
However , Jeffrey B. Lane , president of Shearson Lehman Hutton Inc. , said that Friday 's plunge is `` going to set back '' relations with customers , `` because it reinforces the concern of volatility . 
And I think a lot of people will harp on program trading . 
It 's going to bring the debate right back to the forefront . 
'' As the Dow average ground to its final 190.58 loss Friday , the S&P pit stayed locked at its 30-point trading limit . 
Jeffrey Yass of program trader Susquehanna Investment Group said 2,000 S&P contracts were for sale on the close , the equivalent of $ 330 million in stock . 
But there were no buyers . 
While Friday 's debacle involved mainly professional traders rather than investors , it left the market vulnerable to continued selling this morning , traders said . 
Stock-index futures contracts settled at much lower prices than indexes of the stock market itself . 
At those levels , stocks are set up to be hammered by index arbitragers , who lock in profits by buying futures when futures prices fall , and simultaneously sell off stocks . 
But nobody knows at what level the futures and stocks will open today . 
The de-linkage between the stock and futures markets Friday will undoubtedly cause renewed debate about whether Wall Street is properly prepared for another crash situation . 
The Big Board 's Mr. Grasso said , `` Our systemic performance was good . 
'' But the exchange will `` look at the performance of all specialists in all stocks . 
Obviously we 'll take a close look at any situation in which we think the dealer-community obligations were n't met , '' he said . 
( See related story : `` Fed Ready to Inject Big Funds '' -- WSJ Oct. 16 , 1989 ) But specialists complain privately that just as in the 1987 crash , the `` upstairs '' firms -- big investment banks that support the market by trading big blocks of stock -- stayed on the sidelines during Friday 's blood-letting . 
Mr. Phelan said , `` It will take another day or two '' to analyze who was buying and selling Friday . 
( See related story : `` Fed Is Prepared To Offer Banks Massive Funds '' -- WSJ Oct. 16 , 1989 ) Concerning your Sept. 21 page-one article on Prince Charles and the leeches : It 's a few hundred years since England has been a kingdom . 
It 's now the United Kingdom of Great Britain and Northern Ireland , comprising Wales , Northern Ireland , Scotland , and ... oh yes , England , too . 
Just thought you 'd like to know . 
George Morton San Diego Ports of Call Inc. reached agreements to sell its remaining seven aircraft to buyers that were n't disclosed . 
The agreements bring to a total of nine the number of planes the travel company has sold this year as part of a restructuring . 
The company said a portion of the $ 32 million realized from the sales will be used to repay its bank debt and other obligations resulting from the currently suspended air-charter operations . 
Earlier the company announced it would sell its aging fleet of Boeing Co. 707s because of increasing maintenance costs . 
A consortium of private investors operating as LJH Funding Co. said it has made a $ 409 million cash bid for most of L.J. Hooker Corp. 's real-estate and shopping-center holdings . 
The $ 409 million bid includes the assumption of an estimated $ 300 million in secured liabilities on those properties , according to those making the bid . 
The group is led by Jay Shidler , chief executive officer of Shidler Investment Corp. in Honolulu , and A. Boyd Simpson , chief executive of the Atlanta-based Simpson Organization Inc . 
Mr. Shidler 's company specializes in commercial real-estate investment and claims to have $ 1 billion in assets ; Mr. Simpson is a developer and a former senior executive of L.J. Hooker . 
`` The assets are good , but they require more money and management '' than can be provided in L.J. Hooker 's current situation , said Mr. Simpson in an interview . 
`` Hooker 's philosophy was to build and sell . 
We want to build and hold . 
'' L.J. Hooker , based in Atlanta , is operating with protection from its creditors under Chapter 11 of the U.S. Bankruptcy Code . 
Its parent company , Hooker Corp. of Sydney , Australia , is currently being managed by a court-appointed provisional liquidator . 
Sanford Sigoloff , chief executive of L.J. Hooker , said yesterday in a statement that he has not yet seen the bid but that he would review it and bring it to the attention of the creditors committee . 
The $ 409 million bid is estimated by Mr. Simpson as representing 75 % of the value of all Hooker real-estate holdings in the U.S . 
Not included in the bid are Bonwit Teller or B. Altman & Co. , L.J. Hooker 's department-store chains . 
The offer covers the massive 1.8 million-square-foot Forest Fair Mall in Cincinnati , the 800,000 square-foot Richland Fashion Mall in Columbia , S.C. , and the 700,000 square-foot Thornton Town Center mall in Thornton , Colo . 
The Thornton mall opened Sept. 19 with a Bigg 's hypermarket as its anchor ; the Columbia mall is expected to open Nov. 15 . 
Other Hooker properties included are a 20-story office tower in midtown Atlanta , expected to be completed next February ; vacant land sites in Florida and Ohio ; L.J. Hooker International , the commercial real-estate brokerage company that once did business as Merrill Lynch Commercial Real Estate , plus other shopping centers . 
The consortium was put together by Hoare Govett , the London-based investment banking company that is a subsidiary of Security Pacific Corp . 
`` We do n't anticipate any problems in raising the funding for the bid , '' said Allan Campbell , the head of mergers and acquisitions at Hoare Govett , in an interview . 
Hoare Govett is acting as the consortium 's investment bankers . 
According to people familiar with the consortium , the bid was code-named Project Klute , a reference to the film `` Klute '' in which a prostitute played by actress Jane Fonda is saved from a psychotic businessman by a police officer named John Klute . 
L.J. Hooker was a small home-building company based in Atlanta in 1979 when Mr. Simpson was hired to push it into commercial development . 
The company grew modestly until 1986 , when a majority position in Hooker Corp. was acquired by Australian developer George Herscu , currently Hooker 's chairman . 
Mr. Herscu proceeded to launch an ambitious , but ill-fated , $ 1 billion acquisition binge that included Bonwit Teller and B. Altman & Co. , as well as majority positions in Merksamer Jewelers , a Sacramento chain ; Sakowitz Inc. , the Houston-based retailer , and Parisian Inc. , the Southeast department-store chain . 
Eventually Mr. Simpson and Mr. Herscu had a falling out over the direction of the company , and Mr. Simpson said he resigned in 1988 . 
Since then , Hooker Corp. has sold its interest in the Parisian chain back to Parisian 's management and is currently attempting to sell the B. Altman & Co. chain . 
In addition , Robert Sakowitz , chief executive of the Sakowitz chain , is seeking funds to buy out the Hooker interest in his company . 
The Merksamer chain is currently being offered for sale by First Boston Corp . 
Reached in Honolulu , Mr. Shidler said that he believes the various Hooker malls can become profitable with new management . 
`` These are n't mature assets , but they have the potential to be so , '' said Mr. Shidler . 
`` Managed properly , and with a long-term outlook , these can become investment-grade quality properties . 
'' Canadian steel-ingot production totaled 291,890 metric tons in the week ended Oct. 7 , up 14.8 % from the preceding week 's total of 254,280 tons , Statistics Canada , a federal agency , said . 
The week 's total was up 6.2 % from 274,963 tons a year earlier . 
The year-to-date total was 12,006,883 tons , up 7.8 % from 11,141,711 tons a year earlier . 
The Treasury plans to raise $ 175 million in new cash Thursday by selling about $ 9.75 billion of 52-week bills and redeeming $ 9.58 billion of maturing bills . 
The bills will be dated Oct. 26 and will mature Oct. 25 , 1990 . 
They will be available in minimum denominations of $ 10,000 . 
Bids must be received by 1 p.m. EDT Thursday at the Treasury or at Federal Reserve banks or branches . 
As small investors peppered their mutual funds with phone calls over the weekend , big fund managers said they have a strong defense against any wave of withdrawals : cash . 
Unlike the weekend before Black Monday , the funds were n't swamped with heavy withdrawal requests . 
And many fund managers have built up cash levels and say they will be buying stock this week . 
At Fidelity Investments , the nation 's largest fund company , telephone volume was up sharply , but it was still at just half the level of the weekend preceding Black Monday in 1987 . 
The Boston firm said stock-fund redemptions were running at less than one-third the level two years ago . 
As of yesterday afternoon , the redemptions represented less than 15 % of the total cash position of about $ 2 billion of Fidelity 's stock funds . 
`` Two years ago there were massive redemption levels over the weekend and a lot of fear around , '' said C. Bruce Johnstone , who runs Fidelity Investments ' $ 5 billion Equity-Income Fund . 
`` This feels more like a one-shot deal . 
People are n't panicking . 
'' The test may come today . 
Friday 's stock market sell-off came too late for many investors to act . 
Some shareholders have held off until today because any fund exchanges made after Friday 's close would take place at today 's closing prices . 
Stock fund redemptions during the 1987 debacle did n't begin to snowball until after the market opened on Black Monday . 
But fund managers say they 're ready . 
Many have raised cash levels , which act as a buffer against steep market declines . 
Mario Gabelli , for instance , holds cash positions well above 20 % in several of his funds . 
Windsor Fund 's John Neff and Mutual Series ' Michael Price said they had raised their cash levels to more than 20 % and 30 % , respectively , this year . 
Even Peter Lynch , manager of Fidelity 's $ 12.7 billion Magellan Fund , the nation 's largest stock fund , built up cash to 7 % or $ 850 million . 
One reason is that after two years of monthly net redemptions , the fund posted net inflows of money from investors in August and September . 
`` I 've let the money build up , '' Mr. Lynch said , who added that he has had trouble finding stocks he likes . 
Not all funds have raised cash levels , of course . 
As a group , stock funds held 10.2 % of assets in cash as of August , the latest figures available from the Investment Company Institute . 
That was modestly higher than the 8.8 % and 9.2 % levels in August and September of 1987 . 
Also , persistent redemptions would force some fund managers to dump stocks to raise cash . 
But a strong level of investor withdrawals is much more unlikely this time around , fund managers said . 
A major reason is that investors already have sharply scaled back their purchases of stock funds since Black Monday . 
Stock-fund sales have rebounded in recent months , but monthly net purchases are still running at less than half 1987 levels . 
`` There 's not nearly as much froth , '' said John Bogle , chairman of Vanguard Group Inc. , a big Valley Forge , Pa. , fund company . 
Many fund managers argue that now 's the time to buy . 
Vincent Bajakian , manager of the $ 1.8 billion Wellington Fund , added to his positions in Bristol-Myers Squibb , Woolworth and Dun & Bradstreet Friday . 
And today he 'll be looking to buy drug stocks like Eli Lilly , Pfizer and American Home Products whose dividend yields have been bolstered by stock declines . 
Fidelity 's Mr. Lynch , for his part , snapped up Southern Co. shares Friday after the stock got hammered . 
If the market drops further today , he said he 'll be buying blue chips such as Bristol-Myers and Kellogg . 
`` If they croak stocks like that , '' he said , it presents an opportunity that is `` the kind of thing you dream about . 
'' Major mutual-fund groups said phone calls were arriving at twice the normal weekend pace yesterday . 
But most investors were seeking share prices and other information . 
Trading volume was only modestly higher than normal . 
Still , fund groups are n't taking any chances . 
They hope to avoid the jammed phone lines and other snags that infuriated some fund investors in October 1987 . 
Fidelity on Saturday opened its 54 walk-in investor centers across the country . 
The centers normally are closed through the weekend . 
In addition , East Coast centers will open at 7:30 EDT this morning , instead of the normal 8:30 . 
T. Rowe Price Associates Inc. increased its staff of phone representatives to handle investor requests . 
The Baltimore-based group noted that some investors moved money from stock funds to money-market funds . 
But most investors seemed to be `` in an information mode rather than in a transaction mode , '' said Steven Norwitz , a vice president . 
And Vanguard , among other groups , said it was adding more phone representatives today to help investors get through . 
In an unusual move , several funds moved to calm investors with recordings on their toll-free phone lines . 
`` We view { Friday 's } market decline as offering us a buying opportunity as long-term investors , '' a recording at Gabelli & Co. funds said over the weekend . 
The Janus Group had a similar recording for investors . 
Several fund managers expect a rough market this morning before prices stabilize . 
Some early selling is likely to stem from investors and portfolio managers who want to lock in this year 's fat profits . 
Stock funds have averaged a staggering gain of 25 % through September , according to Lipper Analytical Services Inc . 
Elaine Garzarelli , who runs Shearson Lehman Hutton Inc. 's $ 335 million Sector Analysis Portfolio , predicts the market will open down at least 50 points on technical factors and `` some panic selling . 
'' But she expects prices to rebound soon and is telling investors she expects the stock market wo n't decline more than 10 % to 15 % from recent highs . 
`` This is not a major crash , '' she said . 
Nevertheless , Ms. Garzarelli said she was swamped with phone calls over the weekend from nervous shareholders . 
`` Half of them are really scared and want to sell , '' she said , `` but I 'm trying to talk them out of it . 
'' She added , `` If they all were bullish , I 'd really be upset . 
'' The backdrop to Friday 's slide was markedly different from that of the October 1987 crash , fund managers argue . 
Two years ago , unlike today , the dollar was weak , interest rates were rising and the market was very overvalued , they say . 
`` From the investors ' standpoint , institutions and individuals learned a painful lesson ... by selling at the lows '' on Black Monday , said Stephen Boesel , manager of the $ 580 million T. Rowe Price Growth and Income Fund . 
This time , `` I do n't think we 'll get a panic reaction . 
'' Newport Corp. said it expects to report fiscal-first-quarter earnings of between 15 cents and 19 cents a share , somewhat below analysts ' estimates of 19 cents to 23 cents . 
The maker of scientific instruments and laser parts said orders fell below expectations in recent months . 
A spokesman added that sales in the current quarter will about equal the yearearlier quarter 's figure , when Newport reported net income of $ 1.7 million , or 21 cents a share , on $ 14.1 million in sales . 
Ripples from the strike by 55,000 Machinists union members against Boeing Co. reached air carriers Friday as America West Airlines announced it will postpone its new service out of Houston because of delays in receiving aircraft from the Seattle jet maker . 
Peter Otradovec , vice president for planning at the Phoenix , Ariz. , carrier , said in an interview that the work stoppage at Boeing , now entering its 13th day , `` has caused some turmoil in our scheduling '' and that more than 500 passengers who were booked to fly out of Houston on America West would now be put on other airlines . 
Mr. Otradovec said Boeing told America West that the 757 it was supposed to get this Thursday would n't be delivered until Nov. 7 -- the day after the airline had been planning to initiate service at Houston with four daily flights , including three nonstops to Phoenix and one nonstop to Las Vegas . 
Now , those routes are n't expected to begin until Jan . 
Boeing is also supposed to send to America West another 757 twin-engine aircraft as well as a 737 by year 's end . 
Those , too , are almost certain to arrive late . 
At this point , no other America West flights -- including its new service at San Antonio , Texas ; Newark , N.J. ; and Palmdale , Calif. -- have been affected by the delays in Boeing deliveries . 
Nevertheless , the company 's reaction underscores the domino effect that a huge manufacturer such as Boeing can have on other parts of the economy . 
It also is sure to help the machinists put added pressure on the company . 
`` I just do n't feel that the company can really stand or would want a prolonged walkout , '' Tom Baker , president of Machinists ' District 751 , said in an interview yesterday . 
`` I do n't think their customers would like it very much . 
'' America West , though , is a smaller airline and therefore more affected by the delayed delivery of a single plane than many of its competitors would be . 
`` I figure that American and United probably have such a hard time counting all the planes in their fleets , they might not miss one at all , '' Mr. Otradovec said . 
Indeed , a random check Friday did n't seem to indicate that the strike was having much of an effect on other airline operations . 
Southwest Airlines has a Boeing 737-300 set for delivery at the end of this month and expects to have the plane on time . 
`` It 's so close to completion , Boeing 's told us there wo n't be a problem , '' said a Southwest spokesman . 
A spokesman for AMR Corp. said Boeing has assured American Airlines it will deliver a 757 on time later this month . 
American is preparing to take delivery of another 757 in early December and 20 more next year and is n't anticipating any changes in that timetable . 
In Seattle , a Boeing spokesman explained that the company has been in constant communication with all of its customers and that it was impossible to predict what further disruptions might be triggered by the strike . 
Meanwhile , supervisors and non-striking employees have been trying to finish some 40 aircraft -- mostly 747 and 767 jumbo jets at the company 's Everett , Wash. , plant -- that were all but completed before the walkout . 
As of Friday , four had been delivered and a fifth plane , a 747-400 , was supposed to be flown out over the weekend to Air China . 
No date has yet been set to get back to the bargaining table . 
`` We want to make sure they know what they want before they come back , '' said Doug Hammond , the federal mediator who has been in contact with both sides since the strike began . 
The investment community , for one , has been anticipating a speedy resolution . 
Though Boeing 's stock price was battered along with the rest of the market Friday , it actually has risen over the last two weeks on the strength of new orders . 
`` The market has taken two views : that the labor situation will get settled in the short term and that things look very rosy for Boeing in the long term , '' said Howard Rubel , an analyst at Cyrus J. Lawrence Inc . 
Boeing 's shares fell $ 4 Friday to close at $ 57.375 in composite trading on the New York Stock Exchange . 
But Mr. Baker said he thinks the earliest a pact could be struck would be the end of this month , hinting that the company and union may resume negotiations as early as this week . 
Still , he said , it 's possible that the strike could last considerably longer . 
`` I would n't expect an immediate resolution to anything . 
'' Last week , Boeing Chairman Frank Shrontz sent striking workers a letter , saying that `` to my knowledge , Boeing 's offer represents the best overall three-year contract of any major U.S. industrial firm in recent history . 
'' But Mr. Baker called the letter -- and the company 's offer of a 10 % wage increase over the life of the pact , plus bonuses -- `` very weak . 
'' He added that the company miscalculated the union 's resolve and the workers ' disgust with being forced to work many hours overtime . 
In separate developments : -- Talks have broken off between Machinists representatives at Lockheed Corp. and the Calabasas , Calif. , aerospace company . 
The union is continuing to work through its expired contract , however . 
It had planned a strike vote for next Sunday , but that has been pushed back indefinitely . 
-- United Auto Workers Local 1069 , which represents 3,000 workers at Boeing 's helicopter unit in Delaware County , Pa. , said it agreed to extend its contract on a day-by-day basis , with a 10-day notification to cancel , while it continues bargaining . 
The accord expired yesterday . 
-- And Boeing on Friday said it received an order from Martinair Holland for four model 767-300 wide-body jetliners valued at a total of about $ 326 million . 
The planes , long range versions of the medium-haul twin-jet , will be delivered with Pratt & Whitney PW4060 engines . 
Pratt & Whitney is a unit of United Technologies Inc . 
Martinair Holland is based in Amsterdam . 
A Boeing spokeswoman said a delivery date for the planes is still being worked out `` for a variety of reasons , but not because of the strike . 
'' Bridget O'Brian contributed to this article . 
Atco Ltd. said its utilities arm is considering building new electric power plants , some valued at more than one billion Canadian dollars ( US$ 851 million ) , in Great Britain and elsewhere . 
C.S. Richardson , Atco 's senior vice president , finance , said its 50.1%-owned Canadian Utilities Ltd. unit is reviewing cogeneration projects in eastern Canada , and conventional electric power generating plants elsewhere , including Britain , where the British government plans to allow limited competition in electrical generation from private-sector suppliers as part of its privatization program . 
`` The projects are big . 
They can be C$ 1 billion plus , '' Mr. Richardson said . 
`` But we would n't go into them alone , '' and Canadian Utilities ' equity stake would be small , he said . 
`` Ideally , we 'd like to be the operator { of the project } and a modest equity investor . 
Our long suit is our proven ability to operate '' power plants , he said . 
Mr. Richardson would n't offer specifics regarding Atco 's proposed British project , but he said it would compete for customers with two huge British power generating companies that would be formed under the country 's plan to privatize its massive water and electric utilities . 
Britain 's government plans to raise about # 20 billion ( $ 31.05 billion ) from the sale of most of its giant water and electric utilities , beginning next month . 
The planned electric utility sale , scheduled for next year , is alone expected to raise # 13 billion , making it the world 's largest public offering . 
Under terms of the plan , independent generators would be able to compete for 15 % of customers until 1994 , and for another 10 % between 1994 and 1998 . 
Canadian Utilities had 1988 revenue of C$ 1.16 billion , mainly from its natural gas and electric utility businesses in Alberta , where the company serves about 800,000 customers . 
`` There seems to be a move around the world to deregulate the generation of electricity , '' Mr. Richardson said , and Canadian Utilities hopes to capitalize on it . 
`` This is a real thrust on our utility side , '' he said , adding that Canadian Utilities is also mulling projects in underdeveloped countries , though he would be specific . 
Canadian Utilities is n't alone in exploring power generation opportunities in Britain , in anticipation of the privatization program . 
`` We 're certainly looking at some power generating projects in England , '' said Bruce Stram , vice president , corporate strategy and corporate planning , with Enron Corp. , Houston , a big natural gas producer and pipeline operator . 
Mr. Stram said Enron is considering building gas-fired power plants in the U.K. capable of producing about 500 megawatts of power at a cost of about $ 300 million to $ 400 million . 
PSE Inc. said it expects to report third earnings of $ 1.3 million to $ 1.7 million , or 14 cents to 18 cents a share . 
In the year-ago quarter , the designer and operator of cogeneration and waste heat recovery plants had net income of $ 326,000 , or four cents a share , on revenue of about $ 41.4 million . 
The company said the improvement is related to additional cogeneration facilities that have been put into operation . 
CONCORDE trans-Atlantic flights are $ 2,400 to Paris and $ 3,200 to London . 
In a Centennial Journal article Oct. 5 , the fares were reversed . 
( See : `` Centennial Journal : 100 Years in Business -- Look , Up in the Sky , It 's a ... SST , 1969 '' -- WSJ Oct. 5 , 1989 ) Diamond Shamrock Offshore Partners said it had discovered gas offshore Louisiana . 
The well flowed at a rate of 2.016 million cubic feet of gas a day through a 16 64-inch opening at depths between 5,782 and 5,824 feet . 
Diamond Shamrock is the operator , with a 100 % interest in the well . 
Diamond Shamrock Offshore 's stock rose 12.5 cents Friday to close at $ 8.25 in New York Stock Exchange composite trading . 
Kaufman & Broad Home Corp. said it formed a $ 53.4 million limited partnership subsidiary to buy land in California suitable for residential development . 
The partnership , Kaufman & Broad Land Development Venture Limited Partnership , is a 50-50 joint venture with a trust created by institutional clients of Heitman Advisory Corp. , a unit of Heitman Financial Corp. , a real estate advisory , management and development company with offices in Chicago and Beverly Hills , Calif . 
Kaufman & Broad , a home building company , declined to identify the institutional investors . 
The land to be purchased by the joint venture has n't yet received zoning and other approvals required for development , and part of Kaufman & Broad 's job will be to obtain such approvals . 
The partnership runs the risk that it may not get the approvals for development , but in return , it can buy land at wholesale rather than retail prices , which can result in sizable savings , said Bruce Karatz , president and chief executive officer of Kaufman & Broad . 
`` There are really very few companies that have adequate capital to buy properties in a raw state for cash . 
Typically , developers option property , and then once they get the administrative approvals , they buy it , '' said Mr. Karatz , adding that he believes the joint venture is the first of its kind . 
`` We usually operate in that conservative manner . 
'' By setting up the joint venture , Kaufman & Broad can take the more aggressive approach of buying raw land , while avoiding the negative impacts to its own balance sheet , Mr. Karatz said . 
The company is putting up only 10 % of the capital , although it is responsible for providing management , planning and processing services to the joint venture . 
`` This is one of the best ways to assure a pipeline of land to fuel our growth at a minimum risk to our company , '' Mr. Karatz said . 
When the price of plastics took off in 1987 , Quantum Chemical Corp. went along for the ride . 
The timing of Quantum 's chief executive officer , John Hoyt Stookey , appeared to be nothing less than inspired , because he had just increased Quantum 's reliance on plastics . 
The company outpaced much of the chemical industry as annual profit grew fivefold in two years . 
Mr. Stookey said of the boom , `` It 's going to last a whole lot longer than anybody thinks . 
'' But now prices have nose-dived and Quantum 's profit is plummeting . 
Some securities analysts are looking for no better than break-even results from the company for the third quarter , compared with year-earlier profit of $ 99.8 million , or $ 3.92 a share , on sales of $ 724.4 million . 
The stock , having lost nearly a quarter of its value since Sept. 1 , closed at $ 34.375 share , down $ 1.125 , in New York Stock Exchange composite trading Friday . 
To a degree , Quantum represents the new times that have arrived for producers of the so-called commodity plastics that pervade modern life . 
Having just passed through one of the most profitable periods in their history , these producers now see their prices eroding . 
Pricing cycles , to be sure , are nothing new for plastics producers . 
And the financial decline of some looks steep only in comparison with the heady period that is just behind them . 
`` We were all wonderful heroes last year , '' says an executive at one of Quantum 's competitors . 
`` Now we 're at the bottom of the heap . 
'' At Quantum , which is based in New York , the trouble is magnified by the company 's heavy dependence on plastics . 
Once known as National Distillers & Chemical Corp. , the company exited the wine and spirits business and plowed more of its resources into plastics after Mr. Stookey took the chief executive 's job in 1986 . 
Mr. Stookey , 59 years old , declined to be interviewed for this article , but he has consistently argued that over the long haul -- across both the peaks and the troughs of the plastics market -- Quantum will prosper through its new direction . 
Quantum 's lot is mostly tied to polyethylene resin , used to make garbage bags , milk jugs , housewares , toys and meat packaging , among other items . 
In the U.S. polyethylene market , Quantum has claimed the largest share , about 20 % . 
But its competitors -- including Dow Chemical Co. , Union Carbide Corp. and several oil giants -- have much broader business interests and so are better cushioned against price swings . 
When the price of polyethylene moves a mere penny a pound , Quantum 's annual profit fluctuates by about 85 cents a share , provided no other variables are changing . 
In recent months the price of polyethylene , even more than that of other commodity plastics , has taken a dive . 
Benchmark grades , which still sold for as much as 50 cents a pound last spring , have skidded to between 35 cents and 40 cents . 
Meanwhile , the price of ethylene , the chemical building block of polyethylene , has n't dropped nearly so fast . 
That discrepancy hurts Quantum badly , because its own plants cover only about half of its ethylene needs . 
By many accounts , an early hint of a price rout in the making came at the start of this year . 
China , which had been putting in huge orders for polyethylene , abruptly halted them . 
Calculating that excess polyethylene would soon be sloshing around the world , other buyers then bet that prices had peaked and so began to draw down inventories rather than order new product . 
Kenneth Mitchell , director of Dow 's polyethylene business , says producers were surprised to learn how much inventories had swelled throughout the distribution chain as prices spiraled up . 
`` People were even hoarding bags , '' he says . 
Now producers hope prices have hit bottom . 
They recently announced increases of a few cents a pound to take effect in the next several weeks . 
No one knows , however , whether the new posted prices will stick once producers and customers start to haggle . 
One doubter is George Krug , a chemical-industry analyst at Oppenheimer & Co. and a bear on plastics stocks . 
Noting others ' estimates of when price increases can be sustained , he remarks , `` Some say October . 
Some say November . 
I say 1992 . 
'' He argues that efforts to firm up prices will be undermined by producers ' plans to expand production capacity . 
A quick turnaround is crucial to Quantum because its cash requirements remain heavy . 
The company is trying to carry out a three-year , $ 1.3 billion plant-expansion program started this year . 
At the same time , its annual payments on long-term debt will more than double from a year ago to about $ 240 million , largely because of debt taken on to pay a $ 50-a-share special dividend earlier this year . 
Quantum described the payout at the time as a way for it to share the bonanza with its holders , because its stock price was n't reflecting the huge profit increases . 
Some analysts saw the payment as an effort also to dispel takeover speculation . 
Whether a cash crunch might eventually force the company to cut its quarterly dividend , raised 36 % to 75 cents a share only a year ago , has become a topic of intense speculation on Wall Street since Mr. Stookey deflected dividend questions in a Sept. 29 meeting with analysts . 
Some viewed his response -- that company directors review the dividend regularly -- as nothing more than the standard line from executives . 
But others came away thinking he had given something less than his usual straight-from-the-shoulder performance . 
In any case , on the day of the meeting , Quantum 's shares slid $ 2.625 to $ 36.625 in Big Board trading . 
On top of everything else , Quantum confronts a disaster at its plant in Morris , Ill . 
After an explosion idled the plant in June , the company progressed in September to within 12 hours of completing the drawn-out process of restarting it . 
Then a second explosion occurred . 
Two workers died and six remain in the hospital . 
This human toll adds the most painful dimension yet to the sudden change in Quantum 's fortunes . 
Until this year , the company had been steadily lowering its accident rate and picking up trade-group safety awards . 
A prolonged production halt at the plant could introduce another imponderable into Quantum 's financial future . 
When a plant has just been running flat out to meet demand , calculating lost profit and thus claims under business-interruption insurance is straightforward . 
But the numbers become trickier -- and subject to dickering between insured and insurer -- when demand is shifting . 
`` You say you could have sold X percent of this product and Y percent of that , '' recalls Theodore Semegran , an analyst at Shearson Lehman Hutton who went through this exercise during his former career as a chemical engineer . 
`` And then you still have to negotiate . 
'' Quantum hopes the Morris plant , where limited production got under way last week , will resume full operation by year 's end . 
The plant usually accounts for 20 % to 25 % of Quantum 's polyethylene production and 50 % of its ethylene production . 
Not everything looks grim for Quantum . 
The plant expansion should strengthen the company 's sway in the polyethylene business , where market share is often taken through sheer capacity . 
By lifting ethylene production , the expansion will also lower the company 's raw material costs . 
Quantum is also tightening its grip on its one large business outside chemicals , propane marketing . 
Through a venture with its investment banker , First Boston Corp. , Quantum completed in August an acquisition of Petrolane Inc. in a transaction valued at $ 1.18 billion . 
Petrolane is the second-largest propane distributor in the U.S . 
The largest , Suburban Propane , was already owned by Quantum . 
Still , Quantum has a crisis to get past right now . 
Some analysts speculate the weakening stock may yet attract a suitor . 
The name surfacing in rumors is British Petroleum Co. , which is looking to expand its polyethylene business in the U.S . 
Asked about a bid for Quantum , a BP spokesman says , `` We pretty much have a policy of not commenting on rumors , and I think that falls in that category . 
'' RJR Nabisco Inc. is disbanding its division responsible for buying network advertising time , just a month after moving 11 of the group 's 14 employees to New York from Atlanta . 
A spokesman for the New York-based food and tobacco giant , taken private earlier this year in a $ 25 billion leveraged buy-out by Kohlberg Kravis Roberts & Co. , confirmed that it is shutting down the RJR Nabisco Broadcast unit , and dismissing its 14 employees , in a move to save money . 
The spokesman said RJR is discussing its network-buying plans with its two main advertising firms , FCB\Leber Katz and McCann Erickson . 
`` We found with the size of our media purchases that an ad agency could do just as good a job at significantly lower cost , '' said the spokesman , who declined to specify how much RJR spends on network television time . 
An executive close to the company said RJR is spending about $ 140 million on network television time this year , down from roughly $ 200 million last year . 
The spokesman said the broadcast unit will be disbanded Dec. 1 , and the move wo n't affect RJR 's print , radio and spot-television buying practices . 
The broadcast group had been based in New York until a year ago , when RJR 's previous management moved it to Atlanta , the company 's headquarters before this summer . 
One employee with the group said RJR moved 11 employees of the group back to New York in September because `` there was supposed to be a future . 
'' He said the company hired three more buyers for the unit within the past two weeks , wooing them from jobs with advertising agencies . 
The RJR spokesman said the company moved the 11 employees to New York last month because the group had then been in the midst of purchasing ad time for the networks ' upcoming season . 
`` The studies { on closing the unit } could n't be completed until now , '' he said . 
The group 's president , Peter Chrisanthopoulos , was n't in his office Friday afternoon to comment . 
The U.S. , which is finalizing its steel-import quotas , is allocating a larger share of its steel market to developing and newly industrialized countries which have relatively unsubsidized steel industries . 
Meanwhile , the U.S. has negotiated a significant cut in Japan 's steel quota , and made only a minor increase to the steel allotment for the European Community . 
Brazil , similar to Mexico and South Korea , is expected to negotiate a somewhat bigger share of the U.S. market than it had under the previous five-year steel quotas , which expired Sept. 30 . 
Brazil and Venezuela are the only two countries that have n't completed steel talks with the U.S. for the year ending Oct. 1 , 1990 . 
In recent years , U.S. steelmakers have supplied about 80 % of the 100 million tons of steel used annually by the nation . 
Of the remaining 20 % needed , the steel-quota negotiations allocate about 15 % to foreign suppliers , with the difference supplied mainly by Canada -- which is n't included in the quota program . 
Other countries that do n't have formal steel quotas with the U.S. , such as Taiwan , Sweden and Argentina , also have supplied steel . 
Some of these countries have in recent years made informal agreements with the U.S. that are similar to quotas . 
The Bush administration earlier this year said it would extend steel quotas , known as voluntary restraint agreements , until March 31 , 1992 . 
It also said it would use that two-and-a-half year period to work toward an international consensus on freeing up the international steel trade , which has been notoriously managed , subsidized and protected by governments . 
The U.S. termed its plan , a `` trade liberalization program , '' despite the fact that it is merely an extension . 
Mexico , which was one of the first countries to conclude its steel talks with the U.S. , virtually doubled its quota to 0.95 % of the U.S. steel market from 0.48 % under the previous quotas . 
South Korea , which had 1.9 % under the previous quotas , is set to get a small increase to about 1.95 % . 
That increase rises to slightly more than 2 % of the U.S. market if a joint Korean-U.S. steel project is included . 
Meanwhile , Brazil is expected to increase its allowance from the 1.43 % share it has had in recent years . 
The EC and Japan -- the U.S. 's largest steel suppliers -- have n't been filling their quotas to the full extent . 
The EC steel industry , which has been coping with strong European demand , has been supplying about 5 % of the U.S. market compared with recent quotas of about 6.7 % . 
Japan has been shipping steel to total about 4.5 % of the U.S. market compared with a quota of 5.9 % . 
In the recent talks , the EC had its quota increased about 300,000 tons , to 7 % of the U.S. market from 6.7 % in 1988 . 
But its quota has been as high as 6.9 % in 1984 . 
Japan , however , has agreed to cut its quota to about 5 % from 5.9 % previously . 
Japan , the EC , Brazil , Mexico and South Korea provide about 80 % of the steel imported to the U.S. under the quota program . 
The balance is supplied by a host of smaller exporters , such as Australia and Venezuela . 
The U.S. had about an extra 2 % of the domestic steel market to give to foreign suppliers in its quota talks . 
That was essentially made up of a 1 % increase in the overall quota program and 1 % from cutting Japan 's allowance . 
Negotiators from the White House trade office will repeat these quota negotiations next year when they will have another 1 % of the U.S. steel market to allocate . 
These optional 1%-a-year increases to the steel quota program are built into the Bush administration 's steel-quota program to give its negotiators leverage with foreign steel suppliers to try to get them to withdraw subsidies and protectionism from their own steel industries . 
Elcotel Inc. expects fiscal second-quarter earnings to trail 1988 results , but anticipates that several new products will lead to a `` much stronger '' performance in its second half . 
Elcotel , a telecommunications company , had net income of $ 272,000 , or five cents a share , in its year-earlier second quarter , ended Sept. 30 . 
Revenue totaled $ 5 million . 
George Pierce , chairman and chief executive officer , said in an interview that earnings in the most recent quarter will be about two cents a share on revenue of just under $ 4 million . 
The lower results , Mr. Pierce said , reflect a 12-month decline in industry sales of privately owned pay telephones , Elcotel 's primary business . 
Although Mr. Pierce expects that line of business to strengthen in the next year , he said Elcotel will also benefit from moving into other areas . 
Foremost among those is the company 's entrance into the public facsimile business , Mr. Pierce said . 
Within the next year , Elcotel expects to place 10,000 fax machines , made by Minolta in Japan , in hotels , municipal buildings , drugstores and other public settings around the country . 
Elcotel will provide a credit-card reader for the machines to collect , store and forward billing data . 
Mr. Pierce said Elcotel should realize a minimum of $ 10 of recurring net earnings for each machine each month . 
Elcotel has also developed an automatic call processor that will make further use of the company 's system for automating and handling credit-card calls and collect calls . 
Automatic call processors will provide that system for virtually any telephone , Mr. Pierce said , not just phones produced by Elcotel . 
The company will also be producing a new line of convenience telephones , which do n't accept coins , for use in hotel lobbies , office lobbies , hospitality lounges and similar settings . 
Mr. Pierce estimated that the processors and convenience phones would produce about $ 5 of recurring net earnings for each machine each month . 
Britain 's retail price index rose 0.7 % in September from August and was up 7.6 % for the year , the Central Statistical Office said . 
Quest Medical Inc. said it adopted a shareholders ' rights plan in which rights to purchase shares of common stock will be distributed as a dividend to shareholders of record as of Oct. 23 . 
The company said the plan was n't adopted in response to any known offers for Quest , a maker and marketer of hospital products . 
The rights allow shareholders to purchase Quest stock at a discount if any person or group acquires more than 15 % of the company 's common stock or announces a tender offer . 
Measuring cups may soon be replaced by tablespoons in the laundry room . 
Procter & Gamble Co. plans to begin testing next month a superconcentrated detergent that will require only a few spoonfuls per washload . 
The move stems from lessons learned in Japan where local competitors have had phenomenal success with concentrated soapsuds . 
It also marks P&G 's growing concern that its Japanese rivals , such as Kao Corp. , may bring their superconcentrates to the U.S . 
The Cincinnati consumer-products giant got clobbered two years ago in Japan when Kao introduced a powerful detergent , called Attack , which quickly won a 30 % stake in the Japanese markets . 
`` They do n't want to get caught again , '' says one industry watcher . 
Retailers in Phoenix , Ariz. , say P&G 's new powdered detergent -- to be called Cheer with Color Guard -- will be on shelves in that market by early November . 
A P&G spokeswoman confirmed that shipments to Phoenix started late last month . 
She said the company will study results from this market before expanding to others . 
Superconcentrates are n't entirely new for P&G . 
The company introduced a superconcentrated Lemon Cheer in Japan after watching the success of Attack . 
When Attack hit the shelves in 1987 , P&G 's share of the Japanese market fell to about 8 % from more than 20 % . 
With the help of Lemon Cheer , P&G 's share is now estimated to be 12 % . 
While the Japanese have embraced the compact packaging and convenience of concentrated products , the true test for P&G will be in the $ 4 billion U.S. detergent market , where growth is slow and liquids have gained prominence over powders . 
The company may have chosen to market the product under the Cheer name since it 's already expanded its best-selling Tide into 16 different varieties , including this year 's big hit , Tide with Bleach . 
With superconcentrates , however , it is n't always easy to persuade consumers that less is more ; many people tend to dump too much detergent into the washing machine , believing that it takes a cup of powder to really clean the laundry . 
In the early 1980s , P&G tried to launch here a concentrated detergent under the Ariel brand name that it markets in Europe . 
But the product , which was n't as concentrated as the new Cheer , bombed in a market test in Denver and was dropped . 
P&G and others also have tried repeatedly to hook consumers on detergent and fabric softener combinations in pouches , but they have n't sold well , despite the convenience . 
But P&G contends the new Cheer is a unique formula that also offers an ingredient that prevents colors from fading . 
And retailers are expected to embrace the product , in part because it will take up less shelf space . 
`` When shelf space was cheap , bigger was better , '' says Hugh Zurkuhlen , an analyst at Salomon Bros . 
But with so many brands vying for space , that 's no longer the case . 
If the new Cheer sells well , the trend toward smaller packaging is likely to accelerate as competitors follow with their own superconcentrates . 
Then retailers `` will probably push the { less-established } brands out altogether , '' he says . 
Competition is bound to get tougher if Kao introduces a product like Attack in the U.S . 
To be sure , Kao would n't have an easy time taking U.S. market share away from the mighty P&G , which has about 23 % of the market . 
Kao officials previously have said they are interested in selling detergents in the U.S. , but so far the company has focused on acquisitions , such as last year 's purchase of Andrew Jergens Co. , a Cincinnati hand-lotion maker . 
It also has a product-testing facility in California . 
Some believe P&G 's interest in a superconcentrated detergent goes beyond the concern for the Japanese . 
`` This is something P&G would do with or without Kao , '' says Mr. Zurkuhlen . 
With economic tension between the U.S. and Japan worsening , many Japanese had feared last week 's visit from U.S. Trade Representative Carla Hills . 
They expected a new barrage of demands that Japan do something quickly to reduce its trade surplus with the U.S . 
Instead , they got a discussion of the need for the U.S. and Japan to work together and of the importance of the long-term view . 
Mrs. Hills ' first trip to Japan as America 's chief trade negotiator had a completely different tone from last month 's visit by Commerce Secretary Robert A. Mosbacher . 
Mr. Mosbacher called for concrete results by next spring in negotiations over fundamental Japanese business practices that supposedly inhibit free trade . 
He said such results should be `` measurable in dollars and cents '' in reducing the U.S. trade deficit with Japan . 
But Mrs. Hills , speaking at a breakfast meeting of the American Chamber of Commerce in Japan on Saturday , stressed that the objective `` is not to get definitive action by spring or summer , it is rather to have a blueprint for action . 
'' She added that she expected `` perhaps to have a down payment ... some small step to convince the American people and the Japanese people that we 're moving in earnest . 
'' How such remarks translate into policy wo n't become clear for months . 
American and Japanese officials offered several theories for the difference in approach betwen Mr. Mosbacher and Mrs. Hills . 
Many called it simply a contrast in styles . 
But some saw it as a classic negotiating tactic . 
Others said the Bush administration may feel the rhetoric on both sides is getting out of hand . 
And some said it reflected the growing debate in Washington over pursuing free trade with Japan versus some kind of managed trade . 
Asked to compare her visit to Mr. Mosbacher 's , Mrs. Hills replied : `` I did n't hear every word he spoke , but as a general proposition , I think we have a very consistent trade strategy in the Bush administration . 
'' Yet more than one American official who sat in with her during three days of talks with Japanese officials said her tone often was surprisingly `` conciliatory . 
'' `` I think my line has been very consistent , '' Mrs. Hills said at a news conference Saturday afternoon . 
`` I am painted sometimes as ferocious , perhaps because I have a ferocious list of statutes to implement . 
I do n't feel very ferocious . 
I do n't feel either hard or soft . 
I feel committed to the program of opening markets and expanding trade . 
'' When she met the local press for the first time on Friday , Mrs. Hills firmly reiterated the need for progress in removing barriers to trade in forest products , satellites and supercomputers , three areas targeted under the Super 301 provision of the 1988 trade bill . 
She highlighted exclusionary business practices that the U.S. government has identified . 
But her main thrust was to promote the importance of world-wide free trade and open competition . 
She said the trade imbalance was mainly due to macroeconomic factors and should n't be tackled by setting quantitative targets . 
At her news conference for Japanese reporters , one economics journalist summed up the Japanese sense of relief . 
`` My impression was that you would be a scary old lady , '' he said , drawing a few nervous chuckles from his colleagues . 
`` But I am relieved to see that you are beautiful and gentle and intelligent and a person of integrity . 
'' Mrs. Hills ' remarks did raise questions , at least among some U.S. officials , about what exactly her stance is on U.S. access to the Japanese semiconductor market . 
The U.S. share of the Japanese market has been stuck around 10 % for years . 
Many Americans have interpreted a 1986 agreement as assuring U.S. companies a 20 % share by 1991 , but the Japanese have denied making any such promise . 
At one of her news conferences , Mrs. Hills said , `` I believe we can do much better than 20 % . 
'' But she stressed , `` I am against managed trade . 
I will not enter into an agreement that stipulates to a percentage of the market . 
'' Traditional Industries Inc. said it expects to report a net loss for the fourth quarter that ended June 30 and is seeking new financing . 
The seller of photographic products and services said it is considering a number of financing alternatives , including seeking increases in its credit lines . 
Traditional declined to estimate the amount of the loss and would n't say if it expects to show a profit for the year . 
In the year ended June 30 , 1988 , Traditional reported net income of $ 4.9 million , or $ 1.21 a share . 
The company did n't break out its fourth-quarter results . 
In the latest nine months net income was $ 4.7 million , or $ 1.31 a share , on revenue of $ 44.3 million . 
Separately , the company said it would file a delayed fiscal-year report with the Securities and Exchange Commission `` within approximately 45 days . 
'' It said the delay resulted from difficulties in resolving its accounting of a settlement with the Federal Trade Commission . 
Under an agreement filed in federal court in August to settle FTC objections to some Traditional sales practices , Traditional said it would establish a $ 250,000 trust fund to provide refunds to certain customers . 
Information International Inc. said it was sued by a buyer of its computerized newspaper-publishing system , alleging that the company failed to correct deficiencies in the system . 
A spokesman for Information International said the lawsuit by two units of Morris Communications Corp. seeks restitution of the system 's about $ 3 million purchase price and cancellation of a software license provided by the Morris units to Information International for alleged failure to pay royalties . 
Information International said it believes that the complaints , filed in federal court in Georgia , are without merit . 
Closely held Morris Communications is based in Augusta , Ga . 
The units that filed the suit are Southeastern Newspapers Corp. and Florida Publishing Co . 
Syms Corp. completed the sale of its A. Sulka & Co. subsidiary , a men 's luxury haberdashery , to Luxco Investments . 
Terms were n't disclosed . 
As Syms 's `` core business of off-price retailing grows , a small subsidiary that is operationally unrelated becomes a difficult distraction , '' said Marcy Syms , president of the parent , in a statement . 
A spokeswoman said Sulka operates a total of seven stores in the U.S. and overseas . 
Syms operates 25 off-price apparel stores in the U.S . 
The oil industry 's middling profits could persist through the rest of the year . 
Major oil companies in the next few days are expected to report much less robust earnings than they did for the third quarter a year ago , largely reflecting deteriorating chemical prices and gasoline profitability . 
The gasoline picture may improve this quarter , but chemicals are likely to remain weak , industry executives and analysts say , reducing chances that profits could equal their year-earlier performance . 
The industry is `` seeing a softening somewhat in volume and certainly in price in petrochemicals , '' Glenn Cox , president of Phillips Petroleum Co. , said in an interview . 
`` That change will obviously impact third and fourth quarter earnings '' for the industry in general , he added . 
He did n't forecast Phillips 's results . 
But securities analysts say Phillips will be among the companies hard-hit by weak chemical prices and will probably post a drop in third-quarter earnings . 
So , too , many analysts predict , will Exxon Corp. , Chevron Corp. and Amoco Corp . 
Typical is what happened to the price of ethylene , a major commodity chemical produced in vast amounts by many oil companies . 
It has plunged 13 % since July to around 26 cents a pound . 
A year ago ethylene sold for 33 cents , peaking at about 34 cents last December . 
A big reason for the chemical price retreat is overexpansion . 
Beginning in mid-1987 , prices began accelerating as a growing U.S. economy and the weak dollar spurred demand . 
Companies added capacity furiously . 
Now , greatly increased supplies are on the market , while the dollar is stronger , and domestic economic growth is slower . 
Third-quarter profits from gasoline were weaker . 
`` Refining margins were so good in the third quarter of last year and generally not very good this year , '' said William Randol , a securities analyst at First Boston Corp . 
Oil company refineries ran flat out to prepare for a robust holiday driving season in July and August that did n't materialize . 
The excess supply pushed gasoline prices down in that period . 
In addition , crude oil prices were up some from a year earlier , further pressuring profitability . 
Refiners say margins picked up in September , and many industry officials believe gasoline profits will rebound this quarter , though still not to the level of 1988 's fourth quarter . 
During the 1988 second half , many companies posted record gasoline and chemical profits . 
Crude oil production may turn out to be the most surprising element of companies ' earnings this year . 
Prices -- averaging roughly $ 2 a barrel higher in the third quarter than a year earlier -- have stayed well above most companies ' expectations . 
Demand has been much stronger than anticipated , and it typically accelerates in the fourth quarter . 
`` We could see higher oil prices this year , '' said Bryan Jacoboski , an analyst at PaineWebber Inc . 
That will translate into sharply higher production profits , particularly compared with last year when oil prices steadily fell to below $ 13 a barrel in the fourth quarter . 
While oil prices have been better than expected , natural gas prices have been worse . 
In the third quarter , they averaged about 5 % less than they were in 1988 . 
The main reason remains weather . 
Last summer was notable for a heat wave and drought that caused utilities to burn more natural gas to feed increased electrical demand from air conditioning use . 
This summer , on the other hand , had milder weather than usual . 
`` We 've been very disappointed in the performance of natural gas prices , '' said Mr. Cox , Phillips 's president . 
`` The lagging gas price is not going to assist fourth quarter performance as many had expected . 
'' Going into the fourth quarter , natural gas prices are anywhere from 8 % to 17 % lower than a year earlier . 
For instance , natural gas currently produced along the Gulf Coast is selling on the spot market for around $ 1.47 a thousand cubic feet , down 13 % from $ 1.69 a thousand cubic feet a year ago . 
The Bush administration , trying to blunt growing demands from Western Europe for a relaxation of controls on exports to the Soviet bloc , is questioning whether Italy 's Ing . 
C. Olivetti & Co. supplied militarily valuable technology to the Soviets . 
Most of the Western European members of Coordinating Committee on Multilateral Export Controls , the unofficial forum through which the U.S. and its allies align their export-control policies , are expected to argue for more liberal export rules at a meeting to be held in Paris Oct. 25 and 26 . 
They plan to press specifically for a relaxation of rules governing exports of machine tools , computers and other high-technology products . 
But the Bush administration says it wants to see evidence that all Cocom members are complying fully with existing export-control procedures before it will support further liberalization . 
To make its point , it is challenging the Italian government to explain reports that Olivetti may have supplied the Soviet Union with sophisticated computer-driven devices that could be used to build parts for combat aircraft . 
The London Sunday Times , which first reported the U.S. concerns , cited a U.S. intelligence report as the source of the allegations that Olivetti exported $ 25 million in `` embargoed , state-of-the-art , flexible manufacturing systems to the Soviet aviation industry . 
'' Olivetti reportedly began shipping these tools in 1984 . 
A State Department spokesman acknowledged that the U.S. is discussing the allegations with the Italian government and Cocom , but declined to confirm any details . 
Italian President Francesco Cossiga promised a quick investigation into whether Olivetti broke Cocom rules . 
President Bush called his attention to the matter during the Italian leader 's visit here last week . 
Olivetti has denied that it violated Cocom rules , asserting that the reported shipments were properly licensed by the Italian authorities . 
Although the legality of these sales is still an open question , the disclosure could n't be better timed to support the position of export-control hawks in the Pentagon and the intelligence community . 
`` It seems to me that a story like this breaks just before every important Cocom meeting , '' said a Washington lobbyist for a number of U.S. computer companies . 
The Bush administration has sent conflicting signals about its export-control policies , reflecting unhealed divisions among several competing agencies . 
Last summer , Mr. Bush moved the administration in the direction of gradual liberalization when he told a North Atlantic Treaty Organization meeting that he would allow some exceptions to the Cocom embargo of strategic goods . 
But more recently , the Pentagon and the Commerce Department openly feuded over the extent to which Cocom should liberalize exports of personal computers to the bloc . 
However , these agencies generally agree that the West should be cautious about any further liberalization . 
`` There 's no evidence that the Soviet program to ( illegally ) acquire Western technology has diminished , '' said a State Department spokesman . 
Salomon Brothers International Ltd. , a British subsidiary of Salomon Inc. , announced it will issue warrants on shares of Hong Kong Telecommunications Ltd . 
The move closely follows a similar offer by Salomon of warrants for shares of Hongkong & Shanghai Banking Corp . 
Under the latest offer , HK$ 62.5 million ( US$ 8 million ) of three-year warrants will be issued in London , each giving buyers the right to buy one Hong Kong Telecommunications share at a price to be determined Friday . 
The 50 million warrants will be priced at HK$ 1.25 each and are expected to carry a premium to the share price of about 26 % . 
In trading on the Stock Exchange of Hong Kong , the shares closed Wednesday at HK$ 4.80 each . 
At this price , the shares would have to rise above HK$ 6.05 for subscribers to Salomon 's issue to profitably convert their warrants . 
While Hong Kong companies have in the past issued warrants on their own shares , Salomon 's warrants are the first here to be issued by a third party . 
Salomon will `` cover '' the warrants by buying sufficient shares , or options to purchase shares , to cover its entire position . 
Bankers said warrants for Hong Kong stocks are attractive because they give foreign investors , wary of volatility in the colony 's stock market , an opportunity to buy shares without taking too great a risk . 
The Hong Kong Telecommunications warrants should be attractive to buyers in Europe , the bankers added , because the group is one of a handful of blue-chip stocks on the Hong Kong market that has international appeal . 
Financial Corp. of Santa Barbara filed suit against former stock speculator Ivan F. Boesky and Drexel Burnham Lambert Inc. , charging they defrauded the thrift by concealing their relationship when persuading it to buy $ 284 million in high-yield , high-risk junk bonds . 
In a suit filed in federal court Thursday , the S&L alleged that a `` disproportionate number '' of the bonds it purchased in 1984 declined in value . 
Financial Corp. purchased the bonds , the suit alleged , after Mr. Boesky and Drexel negotiated an agreement for Vagabond Hotels to purchase a 51 % stake in the thrift for about $ 34 million . 
Vagabond Hotels was controlled by Mr. Boesky , who currently is serving a prison term for securities violations . 
Officials at Drexel said they had n't seen the suit and thus could n't comment . 
In addition to $ 33 million compensatory damages , the suit seeks $ 100 million in punitive damages . 
Also named in the suit is Ivan F. Boesky Corp. and Northview Corp. , the successor company to Vagabonds Hotels . 
Northview officials could n't be located . 
Financial Corp. said it agreed to buy the bonds after a representative of Ivan F. Boesky Corp. visited it in November 1983 and said Financial Corp. could improve its financial condition by purchasing the bonds . 
Shortly before the visit , Mr. Boesky and Drexel representives had met with Financial Corp. officials and had signed a letter of intent to acquire the 51 % stake in the company . 
However , the agreement was canceled in June 1984 . 
Financial Corp. purchased the bonds in at least 70 different transactions in 1984 and since then has realized $ 11 million in losses on them , the company said . 
Ideal Basic Industries Inc. said its directors reached an agreement in principle calling for HOFI North America Inc. to combine its North American cement holdings with Ideal in a transaction that will leave Ideal 's minority shareholders with 12.8 % of the combined company . 
HOFI , the North American holding company of Swiss concern Holderbank Financiere Glaris Ltd. , previously proposed combining its 100 % stake in St. Lawrence Cement Inc. and its 60 % stake in Dundee Cement Co. with its 67 % stake in Ideal . 
But HOFI 's first offer would have given Ideal 's other shareholders about 10 % of the combined company . 
Ideal 's directors rejected that offer , although they said they endorsed the merger proposal . 
Under the agreement , HOFI will own 87.2 % of the combined company . 
Ideal 's current operations will represent about 39.2 % of the combined company . 
The transaction is subject to a definitive agreement and approval by Ideal shareholders . 
Ideal said it expects to complete the transaction early next year . 
While corn and soybean prices have slumped well below their drought-induced peaks of 1988 , wheat prices remain stubbornly high . 
And they 're likely to stay that way for months to come , analysts say . 
For one thing , even with many farmers planting more winter wheat this year than last , tight wheat supplies are likely to support prices well into 1990 , the analysts say . 
And if rain does n't fall soon across many of the Great Plains ' wheat-growing areas , yields in the crop now being planted could be reduced , further squeezing supplies . 
Also supporting prices are expectations that the Soviet Union will place substantial buying orders over the next few months . 
By next May 31 , stocks of U.S. wheat to be carried over into the next season -- before the winter wheat now being planted is harvested -- are projected to drop to 443 million bushels . 
That would be the lowest level since the early 1970s . 
Stocks were 698 million bushels on May 31 of this year . 
In response to dwindling domestic supplies , Agriculture Secretary Clayton Yeutter last month said the U.S. government would slightly increase the number of acres farmers can plant in wheat for next year and still qualify for federal support payments . 
The government estimates that the new plan will boost production next year by about 66 million bushels . 
It now estimates production for next year at just under 2.6 billion bushels , compared with this year 's estimated 2.04 billion and a drought-stunted 1.81 billion in 1988 . 
But the full effect on prices of the winter wheat now being planted wo n't be felt until the second half of next year . 
Until then , limited stocks are likely to keep prices near the $ 4-a-bushel level , analysts say . 
On the Chicago Board of Trade Friday , wheat for December delivery settled at $ 4.0675 a bushel , unchanged . 
In theory at least , tight supplies next spring could leave the wheat futures market susceptible to a supply-demand squeeze , said Daniel Basse , a futures analyst with AgResource Co. in Chicago . 
Such a situation can wreak havoc , as was shown by the emergency that developed in soybean futures trading this summer on the Chicago Board of Trade . 
In July , the CBOT ordered Ferruzzi Finanziaria S.p . 
A. to liquidate futures positions equal to about 23 million bushels of soybeans . 
The exchange said it feared that some members would n't be able to find enough soybeans to deliver and would have to default on their contractual obligation to the Italian conglomerate , which had refused requests to reduce its holdings . 
Ferruzzi has denied it was trying to manipulate the soybean futures market . 
Unseasonably hot , dry weather across large portions of the Great Plains and in wheat-growing areas in Washington and Oregon is threatening to reduce the yield from this season 's winter wheat crop , said Conrad Leslie , a futures analyst and head of Leslie Analytical in Chicago . 
For example , in the Oklahoma panhandle , 40 % or more of the topsoil is short of moisture . 
That figure climbs to about 47 % in wheat-growing portions of Kansas , he said . 
The Soviet Union has n't given any clear indication of its wheat purchase plans , but many analysts expect Moscow to place sizable orders for U.S. wheat in the next few months , further supporting prices . 
`` Wheat prices will increasingly pivot off of Soviet demand '' in coming weeks , predicted Richard Feltes , vice president , research , for Refco Inc. in Chicago . 
Looking ahead to other commodity markets this week : Orange Juice Traders will be watching to see how long and how far the price decline that began Friday will go . 
Late Thursday , after the close of trading , the market received what would normally have been a bullish U.S. Department of Agriculture estimate of the 1989-90 Florida orange crop . 
It was near the low range of estimates , at 130 million 90-pound boxes , compared with 146.6 million boxes last season . 
However , as expected , Brazil waited for the crop estimate to come out and then cut the export price of its juice concentrate to about $ 1.34 a pound from around $ 1.55 . 
Friday 's consequent selling of futures contracts erased whatever supportive effect the U.S. report might have had and sent the November orange juice contract down as much as 6.55 cents a pound at one time . 
It settled with a loss of 4.95 cents at $ 1.3210 a pound . 
Brazilian juice , after a delay caused by drought at the start of its crop season , is beginning to arrive in the U.S. in large quantities . 
Brazil wants to stimulate demand for its product , which is going to be in plentiful supply . 
The price cut , one analyst said , appeared to be aimed even more at Europe , where consumption of Brazilian juice has fallen . 
It 's a dollar-priced product , and the strong dollar has made it more expensive in Europe , the analyst said . 
New York futures prices have dropped significantly from more than $ 2 a pound at midyear . 
Barring a cold snap or other crop problems in the growing areas , downward pressure on prices is likely to continue into January , when harvesting and processing of oranges in Florida reach their peak , the analyst said . 
Energy Although some analysts look for profit-taking in the wake of Friday 's leap in crude oil prices , last week 's rally is generally expected to continue this week . 
`` I would continue to look for a stable crude market , at least in futures '' trading , said William Hinton , an energy futures broker with Stotler & Co . 
Friday capped a week of steadily rising crude oil prices in both futures and spot markets . 
On the New York Mercantile Exchange , West Texas Intermediate crude for November delivery finished at $ 20.89 a barrel , up 42 cents on the day . 
On European markets , meanwhile , spot prices of North Sea crudes were up 35 to 75 cents a barrel . 
`` This market still wants to go higher , '' said Nauman Barakat , a first vice president at Shearson Lehman Hutton Inc . 
He predicted that the November contract will reach $ 21.50 a barrel or more on the New York Mercantile Exchange . 
There has been little news to account for such buoyancy in the oil markets . 
Analysts generally cite a lack of bearish developments as well as rumors of a possible tightening of supplies of some fuels and crudes . 
There also are recurring reports that the Soviet Union is having difficulties with its oil exports and that Nigeria has about reached its production limit and ca n't produce as much as it could sell . 
Many traders foresee a tightening of near-term supplies , particularly of high-quality crudes such as those produced in the North Sea and in Nigeria . 
If a hostile predator emerges for Saatchi & Saatchi Co. , co-founders Charles and Maurice Saatchi will lead a management buy-out attempt , an official close to the company said . 
Financing for any takeover attempt may be problematic in the wake of Friday 's stock-market sell-off in New York and turmoil in the junk-bond market . 
But the beleaguered British advertising and consulting giant , which last week named a new chief executive officer to replace Maurice Saatchi , has been the subject of intense takeover speculation for weeks . 
Last week , Saatchi 's largest shareholder , Southeastern Asset Management , said it had been approached by one or more third parties interested in a possible restructuring . 
And Carl Spielvogel , chief executive officer of Saatchi 's big Backer Spielvogel Bates advertising unit , said he had offered to lead a management buy-out of the company , but was rebuffed by Charles Saatchi . 
Mr. Spielvogel said he would n't launch a hostile bid . 
The executive close to Saatchi & Saatchi said that `` if a bidder came up with a ludicrously high offer , a crazy offer which Saatchi knew it could n't beat , it would have no choice but to recommend it to shareholders . 
But { otherwise } it would undoubtedly come back '' with an offer by management . 
The executive said any buy-out would be led by the current board , whose chairman is Maurice Saatchi and whose strategic guiding force is believed to be Charles Saatchi . 
Mr. Spielvogel is n't part of the board , nor are any of the other heads of Saatchi 's big U.S.-based ad agencies . 
The executive did n't name any price , but securities analysts have said Saatchi would fetch upward of $ 1.3 billion . 
The executive denied speculation that Saatchi was bringing in the new chief executive officer only to clean up the company financially so that the brothers could lead a buy-back . 
That speculation abounded Friday as industry executives analyzed the appointment of the new chief executive , Robert Louis-Dreyfus , who joins Saatchi and becomes a member of its board on Jan. 1 . 
Mr. Louis-Dreyfus , formerly chief executive of the pharmaceutical research firm IMS International Inc. , has a reputation as a savvy financial manager , and will be charged largely with repairing Saatchi 's poor financial state . 
Asked about the speculation that Mr. Louis-Dreyfus has been hired to pave the way for a buy-out by the brothers , the executive replied , `` That is n't the reason Dreyfus has been brought in . 
He was brought in to turn around the company . 
'' Separately , several Saatchi agency clients said they believe the company 's management shakeup will have little affect on them . 
`` It has n't had any impact on us , nor do we expect it to , '' said a spokeswoman for Miller Brewing Co. , a major client of Backer Spielvogel . 
John Lampe , director of advertising at PaineWebber Inc. , a Saatchi & Saatchi Advertising client , said : `` We have no problem with the announcement , because we do n't know what change it 's going to bring about . 
We are n't going to change agencies because of a change in London . 
'' Executives at Backer Spielvogel client Avis Inc. , as well as at Saatchi client Philips Lighting Co. , also said they saw no effect . 
Executives at Prudential-Bache Securities Inc. , a Backer Spielvogel client that is reviewing its account , declined comment . 
Mr. Spielvogel had said that Prudential-Bache was prepared to finance either a management buy-out and restructuring , or a buy-out of Backer Spielvogel alone , led by him . 
Ad Notes ... . 
NEW ACCOUNT : California 's Glendale Federal Bank awarded its $ 12 million to $ 15 million account to the Los Angeles office of Omnicom Group 's BBDO agency . 
The account was previously handled by Davis , Ball & Colombatto Advertising Inc. , a Los Angeles agency . 
ACCOUNT REVIEW : Royal Crown Cola Co. has ended its relationship with the Boston office of Hill , Holliday , Connors , Cosmopulos . 
The account had billed about $ 6 million in 1988 , according to Leading National Advertisers . 
NOT-GUILTY PLEA : As expected , Young & Rubicam Inc. along with two senior executives and a former employee , pleaded not guilty in federal court in New Haven , Conn. , to conspiracy and racketeering charges . 
The government has charged that they bribed Jamaican officials to win the Jamaica Tourist Board ad account in 1981 . 
A spokesman for the U.S. Attorney 's office said extradition proceedings are `` just beginning '' for the other two defendants in the case , Eric Anthony Abrahams , former Jamaican tourism minister , and Jamaican businessman Arnold Foote Jr . 
KOREAN AGENCY : The Samsung Group and Bozell Inc. agreed to establish a joint venture advertising agency in South Korea . 
Bozell Cheil Corp. , as the new agency will be called , will be based in Seoul and is 70 % owned by Samsung and 30 % owned by Bozell . 
Samsung already owns Korea First Advertising Co. , that country 's largest agency . 
Bozell joins Backer Spielvogel Bates and Ogilvy Group as U.S. agencies with interests in Korean agencies . 
Citing a payment from a supplier and strong sales of certain data-storage products , Maxtor Corp. said earnings and revenue jumped in its second quarter ended Sept. 24 . 
The maker of computer-data-storage products said net income rose to $ 4.8 million , or 23 cents a share , from year-earlier net of $ 1.1 million , or five cents a share . 
Revenue soared to $ 117 million from $ 81.5 million . 
Maxtor said its results were boosted by $ 2 million in payments received from a supplier , for a certain line of products that Maxtor is n't going to sell anymore . 
Maxtor said effects from discontinuing the line may have a positive effect on future earnings and revenue . 
A spokeswoman would n't elaborate , but the company said the discontinued product has never been a major source of revenue or profit . 
Operationally , Maxtor benefited from robust sales of products that store data for high-end personal computers and computer workstations . 
In the fiscal first half , net was $ 7 million , or 34 cents a share , up from the year-earlier $ 3.1 million , or 15 cents a share . 
Revenue rose to $ 225.5 million from $ 161.8 million . 
Robert G. Walden , 62 years old , was elected a director of this provider of advanced technology systems and services , increasing the board to eight members . 
He retired as senior vice president , finance and administration , and chief financial officer of the company Oct. 1 . 
Southmark Corp. said that it filed part of its 10-K report with the Securities and Exchange Commission , but that the filing does n't include its audited financial statements and related information . 
The real estate and thrift concern , operating under bankruptcy-law proceedings , said it told the SEC it could n't provide financial statements by the end of its first extension `` without unreasonable burden or expense . 
'' The company asked for a 15-day extension Sept. 30 , when the financial reports were due . 
Southmark said it plans to amend its 10K to provide financial results as soon as its audit is completed . 
Alan Seelenfreund , 52 years old , was named chairman of this processor of prescription claims , succeeding Thomas W. Field Jr. , 55 , who resigned last month . 
Mr. Field also had been chairman of McKesson Corp. , resigning that post after a dispute with the board over corporate strategy . 
Mr. Seelenfreund is executive vice president and chief financial officer of McKesson and will continue in those roles . 
PCS also named Rex R. Malson , 57 , executive vice president at McKesson , as a director , filling the seat vacated by Mr. Field . 
Messrs. Malson and Seelenfreund are directors of McKesson , which has an 86 % stake in PCS . 
MedChem Products Inc. said a U.S. District Court in Boston ruled that a challenge by MedChem to the validity of a U.S. patent held by Pharmacia Inc. was `` without merit . 
'' Pharmacia , based in Upsala , Sweden , had charged in a lawsuit against MedChem that MedChem 's AMVISC product line infringes on the Pharmacia patent . 
The patent is related to hyaluronic acid , a rooster-comb extract used in eye surgery . 
In its lawsuit , Pharmacia is seeking unspecified damages and a preliminary injunction to block MedChem from selling the AMVISC products . 
A MedChem spokesman said the products contribute about a third of MedChem 's sales and 10 % to 20 % of its earnings . 
In the year ended Aug. 31 , 1988 , MedChem earned $ 2.9 million , or 72 cents a share , on sales of $ 17.4 million . 
MedChem said the court 's ruling was issued as part of a `` first-phase trial '' in the patent-infringement proceedings and concerns only one of its defenses in the case . 
It said it is considering `` all of its options in light of the decision , including a possible appeal . 
'' The medical-products company added that it plans to `` assert its other defenses '' against Pharmacia 's lawsuit , including the claim that it has n't infringed on Pharmacia 's patent . 
MedChem said that the court scheduled a conference for next Monday -- to set a date for proceedings on Pharmacia 's motion for a preliminary injunction . 
Newspaper publishers are reporting mixed third-quarter results , aided by favorable newsprint prices and hampered by flat or declining advertising linage , especially in the Northeast . 
Adding to unsteadiness in the industry , seasonal retail ad spending patterns in newspapers have been upset by shifts in ownership and general hardships within the retail industry . 
In New York , the Bonwit Teller and B. Altman & Co. department stores have filed for protection from creditors under Chapter 11 of the federal Bankruptcy Code , while the R.H. Macy & Co. , Bloomingdale 's and Saks Fifth Avenue department-store chains are for sale . 
Many papers throughout the country are also faced with a slowdown in classified-ad spending , a booming category for newspapers in recent years . 
Until recently , industry analysts believed decreases in retail ad spending had bottomed out and would in fact increase in this year 's third and fourth quarters . 
All bets are off , analysts say , because of the shifting ownership of the retail chains . 
`` Improved paper prices will help offset weakness in linage , but the retailers ' problems have affected the amount of ad linage they usually run , '' said Edward J. Atorino , industry analyst for Salomon Brothers Inc . 
`` Retailers are just in disarray . 
'' For instance , Gannett Co. posted an 11 % gain in net income , as total ad pages dropped at USA Today , but advertising revenue rose because of a higher circulation rate base and increased rates . 
Gannett 's 83 daily and 35 non-daily newspapers reported a 3 % increase in advertising and circulation revenue . 
Total advertising linage was `` modestly '' lower as classified-ad volume increased , while there was `` softer demand '' for retail and national ad linage , said John Curley , Gannett 's chief executive officer . 
At USA Today , ad pages totaled 785 for the quarter , down 9.2 % from the 1988 period , which was helped by increased ad spending from the Summer Olympics . 
While USA Today 's total paid ad pages for the year to date totaled 2,735 , a decrease of 4 % from last year , the paper 's ad revenue increased 8 % in the quarter and 13 % in the nine months . 
In the nine months , Gannett 's net rose 9.5 % to $ 270 million , or $ 1.68 a share , from $ 247 million , or $ 1.52 a share . 
Revenue gained 6 % to $ 2.55 billion from $ 2.4 billion . 
At Dow Jones & Co. , third-quarter net income fell 9.9 % from the year-earlier period . 
Net fell to $ 28.8 million , or 29 cents a share , from $ 32 million , or 33 cents a share . 
The year-earlier period included a one-time gain of $ 3.5 million , or four cents a share . 
Revenue gained 5.3 % to $ 404.1 million from $ 383.8 million . 
The drop in profit reflected , in part , continued softness in financial advertising at The Wall Street Journal and Barron 's magazine . 
Ad linage at the Journal fell 6.1 % in the third quarter . 
Affiliated Publications Inc. reversed a year-earlier third quarter net loss . 
The publisher of the Boston Globe reported net of $ 8.5 million , or 12 cents a share , compared with a loss of $ 26.5 million , or 38 cents a share , for the third quarter in 1988 . 
William O. Taylor , the parent 's chairman and chief executive officer , said earnings continued to be hurt by softness in ad volume at the Boston newspaper . 
Third-quarter profit estimates for several companies are being strongly affected by the price of newsprint , which in the last two years has had several price increases . 
After a supply crunch caused prices to rise 14 % since 1986 to $ 650 a metric ton , analysts are encouraged , because they do n't expect a price increase for the rest of this year . 
Companies with daily newspapers in the Northeast will need the stable newsprint prices to ease damage from weak ad linage . 
Mr. Atorino at Salomon Brothers said he estimates that Times Mirror Co. 's earnings were down for the third quarter , because of soft advertising levels at its Long Island Newsday and Hartford Courant newspapers . 
Trouble on the East Coast was likely offset by improved ad linage at the Los Angeles Times , which this week also unveiled a redesign . 
New York Times Co. is expected to report lower earnings for the third quarter because of continued weak advertising levels at its flagship New York Times and deep discounting of newsprint at its affiliate , Forest Products Group . 
`` Times Co. 's regional daily newspapers are holding up well , but there is little sign that things will improve in the New York market , '' said Alan Kassan , an analyst with Shearson Lehman Hutton . 
Washington Post Co. is expected to report improved earnings , largely because of increased cable revenue and publishing revenue helped by an improved retail market in the Washington area . 
According to analysts , profits were also helped by successful cost-cutting measures at Newsweek . 
The news-weekly has faced heightened competition from rival Time magazine and a relatively flat magazine advertising market . 
Knight-Ridder Inc. is faced with continued uncertainty over the pending joint operating agreement between its Detroit Free Press and Gannett 's Detroit News , and has told analysts that earnings were down in the third quarter . 
However , analysts point to positive advertising spending at several of its major daily newspapers , such as the Miami Herald and San Jose Mercury News . 
`` The Miami market is coming back strong after a tough couple of years '' when Knight-Ridder `` was starting up a Hispanic edition and circulation was falling , '' said Bruce Thorp , an analyst for Provident National Bank . 
General Motors Corp. , in a series of moves that angered union officials in the U.S. and Canada , has signaled that as many as five North American assembly plants may not survive the mid-1990s as the corporation struggles to cut its excess vehicle-making capacity . 
In announcements to workers late last week , GM effectively signed death notices for two full-sized van assembly plants , and cast serious doubt on the futures of three U.S. car factories . 
GM is under intense pressure to close factories that became unprofitable as the giant auto maker 's U.S. market share skidded during the past decade . 
The company , currently using about 80 % of its North American vehicle capacity , has vowed it will run at 100 % of capacity by 1992 . 
Just a month ago , GM announced it would make an aging assembly plant in Lakewood , Ga. , the eighth U.S. assembly facility to close since 1987 . 
Now , GM appears to be stepping up the pace of its factory consolidation to get in shape for the 1990s . 
One reason is mounting competition from new Japanese car plants in the U.S. that are pouring out more than one million vehicles a year at costs lower than GM can match . 
Another is that United Auto Workers union officials have signaled they want tighter no-layoff provisions in the new Big Three national contract that will be negotiated next year . 
GM officials want to get their strategy to reduce capacity and the work force in place before those talks begin . 
The problem , however , is that GM 's moves are coming at a time when UAW leaders are trying to silence dissidents who charge the union is too passive in the face of GM layoffs . 
Against that backdrop , UAW Vice President Stephen P. Yokich , who recently became head of the union 's GM department , issued a statement Friday blasting GM 's `` flagrant insensitivity '' toward union members . 
The auto maker 's decision to let word of the latest shutdowns and product reassignments trickle out in separate communiques to the affected plants showed `` disarray '' and an `` inability or unwillingness to provide consistent information , '' Mr. Yokich said . 
GM officials told workers late last week of the following moves : Production of full-sized vans will be consolidated into a single plant in Flint , Mich . 
That means two plants -- one in Scarborough , Ontario , and the other in Lordstown , Ohio -- probably will be shut down after the end of 1991 . 
The shutdowns will idle about 3,000 Canadian assembly workers and about 2,500 workers in Ohio . 
Robert White , Canadian Auto Workers union president , used the impending Scarborough shutdown to criticize the U.S.-Canada free trade agreement and its champion , Prime Minister Brian Mulroney . 
But Canadian auto workers may benefit from a separate GM move that affects three U.S. car plants and one in Quebec . 
Workers at plants in Van Nuys , Calif. , Oklahoma City and Pontiac , Mich. , were told their facilities are no longer being considered to build the next generation of the Pontiac Firebird and Chevrolet Camaro muscle cars . 
GM is studying whether it can build the new Camaro-Firebird profitably at a plant in St. Therese , Quebec , company and union officials said . 
That announcement left union officials in Van Nuys and Oklahoma City uncertain about their futures . 
The Van Nuys plant , which employs about 3,000 workers , does n't have a product to build after 1993 . 
Jerry Shrieves , UAW local president , said the facility was asked to draw up plans to continue working as a `` flex plant , '' which could build several different types of products on short notice to satisfy demand . 
At the Oklahoma City plant , which employs about 6,000 workers building the eight-year-old A-body mid-sized cars , Steve Featherston , UAW local vice president , said the plant has no new product lined up , and `` none of us knows '' when the A-body cars will die . 
He said he believes GM has plans to keep building A-body cars into the mid-1990s . 
At Pontiac , however , the Camaro-Firebird decision appears to erase UAW hopes that GM would reopen the shuttered assembly plant that last built the plastic-bodied , two-seater Pontiac Fiero model . 
The Fiero plant was viewed as a model of union-management cooperation at GM before slow sales of the Fiero forced the company to close the factory last year . 
Union officials have taken a beating politically as a result . 
Dissident UAW members have used the Fiero plant as a symbol of labor-management cooperation 's failure . 
Institut Merieux S.A. of France said the Canadian government raised an obstacle to its proposed acquisition of Connaught BioSciences Inc. for 942 million Canadian dollars ( US$ 801.6 million ) . 
Merieux said the government 's minister of industry , science and technology told it that he was n't convinced that the purchase is likely to be of `` net benefit '' to Canada . 
Canadian investment rules require that big foreign takeovers meet that standard . 
The French company said the government gave it 30 days in which to submit information to further support its takeover plan . 
Both Merieux and Connaught are biotechnology research and vaccine manufacturing concerns . 
The government 's action was unusual . 
Alan Nymark , executive vice president of Investment Canada , which oversees foreign takeovers , said it marked the first time in its four-year history that the agency has made an adverse net-benefit decision about the acquisition of a publicly traded company . 
He said it has reached the same conclusions about some attempts to buy closely held concerns , but eventually allowed those acquisitions to proceed . 
`` This is n't a change in government policy ; this provision has been used before , '' said Jodi Redmond , press secretary for Harvie Andre , Canada 's minister of industry , science and technology . 
Mr. Andre issued the ruling based on a recommendation by Investment Canada . 
Spokesmen for Merieux and Connaught said they had n't been informed of specific areas of concern by either the government or Investment Canada , but added they hope to have more information early this week . 
Investment Canada declined to comment on the reasons for the government decision . 
Viren Mehta , a partner with Mehta & Isaly , a New York-based pharmaceutical industry research firm , said the government 's ruling was n't unexpected . 
`` This has become a very politicized deal , concerning Canada 's only large , world-class bio-research or pharmaceutical company , '' Mr. Mehta said . 
Mr. Mehta said the move that could allow the transaction to go ahead as planned could be an out-of-court settlement of Connaught 's dispute with the University of Toronto . 
The University is seeking to block the acquisition of Connaught by foreign interests , citing concerns about the amount of research that would be done in Canada . 
The university is considering a settlement proposal made by Connaught . 
While neither side will disclose its contents , Mr. Mehta expects it to contain more specific guarantees on research and development spending levels in Canada than Merieux offered to Investment Canada . 
Some analysts , such as Murray Grossner of Toronto-based Richardson Greenshields Inc. , believe the government ruling leaves the door open for other bidders , such as Switzerland 's Ciba-Geigy and Chiron Corp. of Emeryville , Calif . 
Officials for the two concerns , which are bidding C$ 30 a share for Connaught , could n't be reached for comment . 
French state-owned Rhone-Poulenc S.A. holds 51 % of Merieux . 
Weatherford International Inc. said it canceled plans for a preferred-stock swap but may resume payment of dividends on the stock , and added that it expects to publicly offer about 10 million common shares . 
The company said it planned to offer an undetermined number of common shares in exchange for the 585,000 shares of its preferred stock outstanding . 
The exchange ratio was never established . 
Weatherford said market conditions led to the cancellation of the planned exchange . 
The energy-services concern said , however , that in January 1990 , it may resume payments of dividends on the preferred stock . 
Weatherford suspended its preferred-dividend payment in October 1985 and said it has n't any plans to catch up on dividends in arrears about $ 6 million , but will do so some time in the future . 
Additionally , the company said it filed with the Securities and Exchange Commission for the proposed offering of 10 million shares of common stock , expected to be offered in November . 
The company said Salomon Brothers Inc. and Howard , Weil , Labouisse , Friedrichs Inc. , underwriters for the offering , were granted an option to buy as much as an additional 1.5 million shares to cover over-allotments . 
Proceeds will be used to eliminate and restructure bank debt . 
Weatherford currently has approximately 11.1 million common shares outstanding . 
Earnings for most of the nation 's major pharmaceutical makers are believed to have moved ahead briskly in the third quarter , as companies with newer , big-selling prescription drugs fared especially well . 
For the third consecutive quarter , however , most of the companies ' revenues were battered by adverse foreign-currency translations as a result of the strong dollar abroad . 
Analysts said that Merck & Co. , Eli Lilly & Co. , Warner-Lambert Co. and the Squibb Corp. unit of Bristol-Myers Squibb Co. all benefited from strong sales of relatively new , higher-priced medicines that provide wide profit margins . 
Less robust earnings at Pfizer Inc. and Upjohn Co. were attributed to those companies ' older products , many of which face stiffening competition from generic drugs and other medicines . 
Joseph Riccardo , an analyst with Bear , Stearns & Co. , said that over the past few years most drug makers have shed their slow-growing businesses and instituted other cost savings , such as consolidating manufacturing plants and administrative staffs . 
As a result , `` major new products are having significant impact , even on a company with very large revenues , '' Mr. Riccardo said . 
Analysts said profit for the dozen or so big drug makers , as a group , is estimated to have climbed between 11 % and 14 % . 
While that 's not spectacular , Neil Sweig , an analyst with Prudential Bache , said that the rate of growth will `` look especially good as compared to other companies if the economy turns downward . 
'' Mr. Sweig estimated that Merck 's profit for the quarter rose by about 22 % , propelled by sales of its line-up of fast-growing prescription drugs , including its anti-cholesterol drug , Mevacor ; a high blood pressure medicine , Vasotec ; Primaxin , an antibiotic , and Pepcid , an anti-ulcer medication . 
Profit climbed even though Merck 's sales were reduced by `` one to three percentage points '' as a result of the strong dollar , Mr. Sweig said . 
In the third quarter of 1988 , Merck earned $ 311.8 million , or 79 cents a share . 
In Rahway , N.J. , a Merck spokesman said the company does n't make earnings projections . 
Mr. Sweig said he estimated that Lilly 's earnings for the quarter jumped about 20 % , largely because of the performance of its new anti-depressant Prozac . 
The drug , introduced last year , is expected to generate sales of about $ 300 million this year . 
`` It 's turning out to be a real blockbuster , '' Mr. Sweig said . 
In last year 's third quarter , Lilly earned $ 171.4 million , or $ 1.20 a share . 
In Indianapolis , Lilly declined comment . 
Several analysts said they expected Warner-Lambert 's profit also to increase by more than 20 % from $ 87.7 million , or $ 1.25 a share , it reported in the like period last year . 
The company is praised by analysts for sharply lowering its costs in recent years and shedding numerous companies with low profit margins . 
The company 's lean operation , analysts said , allowed sharp-rising sales from its cholesterol drug , Lopid , to power earnings growth . 
Lopid sales are expected to be about $ 300 million this year , up from $ 190 million in 1988 . 
In Morris Plains , N.J. , a spokesman for the company said the analysts ' projections are `` in the ballpark . 
'' Squibb 's profit , estimated by analysts to be about 18 % above the $ 123 million , or $ 1.25 a share , it earned in the third quarter of 1988 , was the result of especially strong sales of its Capoten drug for treating high blood pressure and other heart disease . 
The company was officially merged with Bristol-Myers Co. earlier this month . 
Bristol-Myers declined to comment . 
Mr. Riccardo of Bear Stearns said that Schering-Plough Corp. 's expected profit rise of about 18 % to 20 % , and Bristol-Meyers 's expected profit increase of about 13 % are largely because `` those companies are really managed well . 
'' ScheringPlough earned $ 94.4 million , or 84 cents a share , while Bristol-Myers earned $ 232.3 million , or 81 cents a share , in the like period a year earlier . 
In Madison , N.J. , a spokesman for Schering-Plough said the company has `` no problems '' with the average estimate by a analysts that third-quarter earnings per share rose by about 19 % , to $ 1 . 
The company expects to achieve the 20 % increase in full-year earnings per share , as it projected in the spring , the spokesman said . 
Meanwhile , analysts said Pfizer 's recent string of lackluster quarterly performances continued , as earnings in the quarter were expected to decline by about 5 % . 
Sales of Pfizer 's important drugs , Feldene for treating arthritis , and Procardia , a heart medicine , have shrunk because of increased competition . 
`` The ( strong ) dollar hurt Pfizer a lot , too , '' Mr. Sweig said . 
In the third quarter last year , Pfizer earned $ 216.8 million , or $ 1.29 a share . 
In New York , the company declined comment . 
Analysts said they expected Upjohn 's profit to be flat or rise by only about 2 % to 4 % as compared with $ 89.6 million , or 49 cents a share , it earned a year ago . 
Upjohn 's biggest-selling drugs are Xanax , a tranquilizer , and Halcion , a sedative . 
Sales of both drugs have been hurt by new state laws restricting the prescriptions of certain tranquilizing medicines and adverse publicity about the excessive use of the drugs . 
Also , the company 's hair-growing drug , Rogaine , is selling well -- at about $ 125 million for the year , but the company 's profit from the drug has been reduced by Upjohn 's expensive print and television campaigns for advertising , analysts said . 
In Kalamazoo , Mich. , Upjohn declined comment . 
Amid a crowd of crashing stocks , Relational Technology Inc. 's stock fell particularly hard Friday , dropping 23 % because its problems were compounded by disclosure of an unexpected loss for its fiscal first quarter . 
The database software company said it expects a $ 2 million net loss for the fiscal first quarter ended Sept. 30 . 
It said analysts had been expecting a small profit for the period . 
Revenue is expected to be `` up modestly '' from the $ 26.5 million reported a year ago . 
Relational Technology reported net income of $ 1.5 million , or 12 cents a share , in the year-earlier period . 
`` While our international operations showed strong growth , our domestic business was substantially below expectations , '' said Paul Newton , president and chief executive officer . 
A spokesman said the company 's first quarter is historically soft , and computer companies in general are experiencing slower sales . 
Mr. Newton said he accepted the resignation of Thomas Wilson , vice president of corporate sales , and that his marketing responsibilities have been reassigned . 
The company said Mr. Wilson 's resignation was n't related to the sales shortfall . 
Relational Technology went public in May 1988 at $ 14 a share . 
It fell $ 1.875 a share Friday , to $ 6.25 , a new low , in over-the-counter trading . 
Its high for the past year was $ 16.375 a share . 
In the previous quarter , the company earned $ 4.5 million , or 37 cents a share , on sales of $ 47.2 million . 
The Bronx has a wonderful botanical garden , a great zoo , its own charming Little Italy ( on Arthur Avenue ) and , of course , the Yankees . 
However , most people , having been subjected to news footage of the devastated South Bronx , look at the borough the way Tom Wolfe 's Sherman McCoy did in `` Bonfire of the Vanities '' -- as a wrong turn into hell . 
But Laura Cunningham 's Bronx , her childhood Bronx of the '50s , is something else altogether . 
In a lovely , novelistic memoir , `` Sleeping Arrangements '' ( Knopf , 195 pages , $ 18.95 ) , she remembers an exotic playground , peopled mainly by Jewish eccentrics and the occasional Catholic ( real oddballs like her sexpot friend , the hell-kitten Diana , age five ) . 
Ms. Cunningham , a novelist and playwright , has a vivid and dramatically outsized sense of recall . 
She transforms her `` Bronx of the emotions , a place where the flats of mediocrity are only relieved by steep descents into hysteria '' into the `` Babylonian Bronx , '' a world simmering with sex and death and intrigue . 
In the Babylonian Bronx , Jewish working-class people lived in drab , Soviet-style buildings `` glamorized '' with names like AnaMor Towers ( after owners Anna and Morris Snezak ) , whose lobbies and hallways were decorated with murals of ancient Syrians and Greeks , friezes of Pompeii . 
For Ms. Cunningham the architectural discombobulation matched the discrepancy she felt living in the AnaMor Towers as a little girl : `` ... outwardly ordinary , inwardly ornate , owing all inspiration to heathen cultures . 
'' Sharp-witted and funny but never mean , she 's a memorialist a bit like Truman Capote , if he 'd been Jewish and female and less bitchy . 
Little Lily , as Ms. Cunningham calls herself in the book , really was n't ordinary . 
She was raised , for the first eight years , by her mother , Rosie , whom she remembers as a loving liar , who realigned history to explain why Lily 's father did n't live with them . 
Rosie reinvented this man , who may or may not have known about his child , as a war hero for Lily 's benefit . 
Rosie died young and Lily has remembered her as a romantic figure , who did n't interfere much with her child 's education on the streets . 
The games Bronx children played ( holding kids down and stripping them , for example ) seem tame by today 's crack standards , but Ms. Cunningham makes it all sound like a great adventure . 
`` Without official knowledge of sex or death , we flirted with both , '' she writes . 
She analyzed families by their sleeping arrangements . 
Her friend Susan , whose parents kept reminding her she was unwanted , slept on a narrow bed wedged into her parents ' bedroom , as though she were a temporary visitor . 
Her friend Diana 's father was a professional thief ; they did n't seem to have any bedrooms at all . 
Maybe Lily became so obsessed with where people slept and how because her own arrangements kept shifting . 
When Rosie died , her uncles moved in -- and let her make the sleeping and other household arrangements . 
They painted the apartment orange , pink and white , according to her instructions . 
With loving detail she recalls her Uncle Gabe , an Orthodox Jew and song lyricist ( who rhymed river with liver in a love song ) ; and Uncle Len , a mysterious part-time investigator who looked like Lincoln and carried a change of clothing in a Manila envelope , like an `` undercover President on a good-will mission . 
'' They came by their strangeness honestly . 
Lily 's grandmother , no cookie baker , excised the heads of disliked relatives from the family album , and lugged around her perennial work-in-progress , `` Philosophy for Women . 
'' The book loses some momentum toward the end , when Lily becomes more preoccupied with dating boys and less with her delightfully weird family . 
For the most part , though , there 's much pleasure in her saucy , poignant probe into the mysteries of the Babylonian Bronx . 
The Bronx also figures in Bruce Jay Friedman 's latest novel , which flashes back to the New York of the '50s . 
But both the past and present worlds of `` The Current Climate '' ( Atlantic Monthly Press , 200 pages , $ 18.95 ) feel cramped and static . 
For his sixth novel , Mr. Friedman tried to resuscitate the protagonist of his 1972 work , `` About Harry Towns . 
'' Harry is now a 57-year-old writer , whose continuing flirtation with drugs and marginal types in Hollywood and New York seems quaintly out-of-synch . 
Harry fondly remembers the `` old '' days of the early '70s , when people like his friend Travis would take a psychiatrist on a date to analyze what Travis was doing wrong . 
`` An L.A. solution , '' explains Mr. Friedman . 
Line by line Mr. Friedman 's weary cynicism can be amusing , especially when he 's riffing on the Hollywood social scheme -- the way people size each other up , immediately canceling the desperate ones who merely almost made it . 
Harry has avoided all that by living in a Long Island suburb with his wife , who 's so addicted to soap operas and mystery novels she barely seems to notice when her husband disappears for drug-seeking forays into Manhattan . 
But it does n't take too many lines to figure Harry out . 
He 's a bore . 
Gulf Resources & Chemical Corp. said it agreed to pay $ 1.5 million as part of an accord with the Environmental Protection Agency regarding an environmental cleanup of a defunct smelter the company formerly operated in Idaho . 
In 1984 the EPA notified Gulf Resources , which was a part-owner of the smelter , that it was potentially liable for sharing cleanup costs at the site under the federal Superfund program . 
The 21-square-mile area is contaminated with lead , zinc and other metals . 
Gulf Resources earlier this year proposed a reorganization plan that would make it a unit of a Bermuda concern , potentially exempting it from liability for the smelter 's cleanup costs . 
The company said that as part of its agreement with the EPA , it `` made certain voluntary undertakings with respect to intercorporate transactions entered into after the reorganization . 
'' The company , which issued a statement on the agreement late Friday , said that $ 1 million of the payment was previously provided for in its financial statements and that $ 500,000 will be recognized in its 1989 third-quarter statement . 
The agreement and consent decree are subject to court approval , the company said . 
Gulf Resources added that it `` will seek to recover equitable contribution from others for both the amount of the settlement and any other liabilities it may incur under the Superfund law . 
'' Under the agreement , Gulf must give the U.S. government 45 days ' advance written notice before issuing any dividends on common stock . 
The company 's net worth can not fall below $ 185 million after the dividends are issued . 
`` The terms of that agreement only become effective the date of Gulf 's reorganization , which we anticipate will occur sometime in early 1990 , '' said Lawrence R. Mehl , Gulf 's general counsel . 
In addition , Gulf must give the government 20 days ' advance written notice of any loans exceeding $ 50 million that are made to the Bermuda-based holding company . 
Gulf 's net worth after those transaction must be at least $ 150 million . 
Separately , the company said it expects to hold a special meeting for shareholders in early 1990 to vote on its proposed reorganization . 
Many of the nation 's highest-ranking executives saluted Friday 's market plunge as an overdue comeuppance for speculators and takeover players . 
Assuming that the market does n't head into a bottomless free fall , some executives think Friday 's action could prove a harbinger of good news -- as a sign that the leveraged buy-out and takeover frenzy of recent years may be abating . 
`` This is a reaction to artificial LBO valuations , rather than to any fundamentals , '' said John Young , chairman of Hewlett-Packard Co. , whose shares dropped $ 3.125 to $ 48.125 . 
`` If we get rid of a lot of that nonsense , it will be a big plus . 
'' A few of the executives here for the fall meeting of the Business Council , a group that meets to discuss national issues , were only too happy to personalize their criticism . 
`` People wish the government would do something about leveraged buy-outs , do something about takeovers , do something about Donald Trump , '' said Rand Araskog , chairman of ITT Corp. , whose stock dropped $ 3.375 . 
`` Where 's the leadership ? Where 's the guy who can say : ` Enough is enough ' '' ? The executives were remarkably unperturbed by the plunge even though it lopped billions of dollars off the value of their companies -- and millions off their personal fortunes . 
`` I 'm not going to worry about one day 's decline , '' said Kenneth Olsen , Digital Equipment Corp. president , who was leisurely strolling through the bright orange and yellow leaves of the mountains here after his company 's shares plunged $ 5.75 to close at $ 86.50 . 
`` I did n't bother calling anybody ; I did n't even turn on TV . 
'' `` There has n't been any fundamental change in the economy , '' added John Smale , whose Procter & Gamble Co. took an $ 8.75 slide to close at $ 120.75 . 
`` The fact that this happened two years ago and there was a recovery gives people some comfort that this wo n't be a problem . 
'' Of course , established corporate managements often tend to applaud the setbacks of stock speculators and takeover artists . 
Indeed , one chief executive who was downright delighted by Friday 's events was Robert Crandall , chairman of AMR Corp. , the parent of American Airlines and the target of a takeover offer by Mr. Trump . 
Asked whether Friday 's action could help him avoid being Trumped by the New York real estate magnate , Mr. Crandall smiled broadly and said : `` No comment . 
'' On Friday morning , before the market 's sell-off , the business leaders issued a report predicting the economy would grow at roughly an inflation-adjusted 2 % annual rate , through next year , then accelerate anew in 1991 . 
Of the 19 economists who worked on the Business Council forecast , only two projected periods of decline in the nation 's output over the next two years , and in `` both instances the declines are too modest to warrant the phrase recession , '' said Lewis Preston , chairman of J.P. Morgan & Co. and vice chairman of the Business Council . 
The real estate slump that 's pushing down the price of New York office space and housing is also affecting the city 's retail real estate market . 
In Manhattan , once-desirable store sites sit vacant and newly constructed space has been slow to fill . 
Retail real estate brokers say tenants are reluctant to sign leases because of uncertainty about the local economy , turmoil in their own industries and a belief that rents have not yet hit bottom . 
`` There is an unbelievable amount of space available , '' says Faith Consolo , senior vice president at Garrick-Aug Associates Store Leasing Inc . 
There are about 2,000 stores for rent , up from a more typical range of 1,200 to 1,500 . 
`` This further confuses retailers , '' she says . 
`` They wonder should they sign a lease if prices are still coming down ? Is this the wrong time to open a store ? Who is going to be in the space next door ? '' In addition , Ms. Consolo says , tenants usually can negotiate to pay rents that are about one-quarter lower than landlords ' initial asking price . 
A handful of hot retail locations , such as the 57th Street and Madison and Fifth Avenue areas , have been able to sustain what many see as astronomical rents . 
And , in some neighborhoods , rents have merely hit a plateau . 
But on average , Manhattan retail rents have dropped 10 % to 15 % in the past six months alone , experts say . 
That follows a more subtle decline in the prior six months , after Manhattan rents had run up rapidly since 1986 . 
The same factors limiting demand for office space have affected retailing . 
`` As businesses contract or depart , the number of employees who might use retail services shrinks , '' says Edward A. Friedman , senior vice president of Helmsley Spear Inc . 
He says financial problems plaguing electronics , fur and furniture companies -- key categories in the local retail economy -- have further deflated the market . 
Hardest hit are what he calls `` secondary '' sites that primarily serve neighborhood residents . 
In these locations , Mr. Friedman says , `` Retailers are increasingly cautious about expanding and rents have remained steady or in some cases have declined . 
'' Weakness in the restaurant industry , which is leaving retail space vacant , exacerbates the problem for landlords . 
It is also no comfort to landlords and small New York retailers when the future of larger department stores , which anchor retail neighborhoods , are in doubt . 
Hooker Corp. , parent of Bonwit Teller and B. Altman 's , is mired in bankruptcy proceedings and Bloomingdale 's is for sale by its owner , Campeau Corp . 
The trend toward lower rents may seem surprising given that some communities in New York are bemoaning the loss of favorite local businesses to high rents . 
But , despite the recent softening , for many of these retailers there 's still been too big a jump from the rental rates of the late 1970s , when their leases were signed . 
Certainly , the recent drop in prices does n't mean Manhattan comes cheap . 
New York retail rents still run well above the going rate in other U.S. cities . 
Madison and Fifth Avenues and East 57th Street can command rents of up to $ 500 a square foot , and $ 250 is not uncommon . 
The thriving 34th Street area offers rents of about $ 100 a square foot , as do up-and-coming locations along lower Fifth Avenue . 
By contrast , rentals in the best retail locations in Boston , San Francisco and Chicago rarely top $ 100 a square foot . 
And rents on Beverly Hills ' Rodeo Drive generally do n't exceed about $ 125 a square foot . 
The New York Stock Exchange said two securities will begin trading this week . 
Precision Castparts Corp. , Portland , Ore. , will begin trading with the symbol PCP . 
It makes investment castings and has traded over-the-counter . 
Royal Bank of Scotland Group PLC , an Edinburgh , Scotland , financial services company , will list American depositary shares , representing preferred shares , with the symbol RBSPr . 
It will continue to trade on the International Stock Exchange , London . 
The American Stock Exchange listed shares of two companies . 
AIM Telephones Inc. , a Parsippany , N.J. , telecommunications equipment supply company , started trading with the symbol AIM . 
It had traded over-the-counter . 
Columbia Laboratories Inc. , Miami , began trading with the symbol COB . 
The pharmaceuticals maker had traded over-the-counter . 
The National Market System of the Nasdaq over-the-counter market listed shares of one company . 
Employee Benefit Plans Inc. , a Minneapolis health-care services company , was listed with the symbol EBPI . 
When Justice William Brennan marks the start of his 34th year on the Supreme Court today , the occasion will differ sharply from previous anniversaries of his tenure . 
For the first time , the 83-year-old justice finds his influence almost exclusively in dissent , rather than as a force in the high court 's majority . 
This role reversal holds true , as well , for his three liberal and moderate allies , Justices Thurgood Marshall , Harry Blackmun and John Stevens . 
But are these four players , three of them in their 80s , ready to assume a different role after 88 years , collectively , of service on the high court ? Every indication is that the four are prepared to accept this new role , and the frustrations that go with it , but in different ways . 
Justices Brennan and Stevens appear philosophical about it ; Justices Marshall and Blackmun appear fighting mad . 
The four justices are no newcomers to dissent , often joining forces in the past decade to criticize the court 's conservative drift . 
But always , in years past , they have bucked the trend and have been able to pick up a fifth vote to eke out a number of major victories in civil rights and liberties cases . 
Now , however , as the court 's new five-member conservative majority continues to solidify , victories for the liberals are rare . 
The change is most dramatic for Justice Brennan , the last survivor of the mid-1960s liberal majority under Chief Justice Earl Warren . 
In the seven Supreme Court terms from the fall of 1962 through the spring of 1967 , the height of the Warren Court 's power , Justice Brennan cast only 25 dissenting votes in 555 cases decided by the court . 
Last term alone he cast 52 dissenting votes in 133 decisions , with the contentious flag-burning ruling as his only big victory . 
But Justice Brennan foresaw his new role , strongly defending the importance of dissents in a 1985 speech . 
`` Each time the court revisits an issue , the justices will be forced by a dissent to reconsider the fundamental questions and to rethink the result , '' he said . 
Moreover , in recent months he has said that when he was on the winning side in the 1960s , he knew that the tables might turn in the future . 
He has said that he now knows how Justice John Harlan felt , a reference to the late conservative justice who was the most frequent dissenter from the Warren Court 's opinions . 
Associates of 81-year-old Justice Marshall say he was `` depressed '' about the court 's direction last spring , but is feisty about his role and determined to speak out against the court 's cutbacks in civil rights . 
`` We could sweep it under the rug and hide it , but I 'm not going to do it , '' he said in a speech last month . 
He , like Justice Brennan , considers dissents highly important for the future , a point that has n't escaped legal scholars . 
Harvard Law School Professor Laurence Tribe says there is a `` generation-skipping '' flavor to current dissents . 
The dissenters in the Warren Court , he says , appeared to be writing for the short-term , suggesting that the court 's direction might change soon . 
`` Brennan and Marshall are speaking in their dissents to a more distant future , '' he says . 
Justice Blackmun , who will turn 81 next month , also seems feisty about his new role . 
Associates say he takes some defeats more personally than his colleagues , especially attempts to curtail the right to abortion first recognized in his 1973 opinion , Roe vs. Wade . 
Friends and associates who saw Justice Blackmun during the summer said he was no more discouraged about the court than in recent years . 
And his outlook improved after successful cataract surgery in August . 
But his level of frustration showed in a recent , impassioned speech to a group of hundreds of lawyers in Chicago . 
He concluded his remarks by quoting , emotionally and at some length , according to those present , the late Martin Luther King 's famous `` I Have a Dream '' speech from the 1963 March on Washington . 
Justice Stevens , 69 , is probably the most philosophical of the dissenters about his role , in part because he may be the least liberal of the four , but also because he enjoys the intellectual challenge of arguing with the majority more than the others . 
If the role these four dissenters are assuming is a familiar one in modern Supreme Court history , it also differs in an important way from recent history , court watchers say . 
`` The dissenters of the Warren Court were often defending a legal legacy that they inherited , '' says Prof. A.E. Dick Howard of the University of Virginia Law School , `` but the dissenters today are defending a legacy that they created . 
'' The government sold the deposits of four savings-and-loan institutions , in its first wave of sales of big , sick thrifts , but low bids prevented the sale of a fifth . 
The four S&Ls were sold to large banks , as was the case with most of the 28 previous transactions initiated by the Resolution Trust Corp. since it was created in the S&L bailout legislation two months ago . 
Two of the four big thrifts were sold to NCNB Corp. , Charlotte , N.C. , which has aggressively expanded its markets , particularly in Texas and Florida . 
A Canadian bank bought another thrift , in the first RTC transaction with a foreign bank . 
Under these deals , the RTC sells just the deposits and the healthy assets . 
These `` clean-bank '' transactions leave the bulk of bad assets , mostly real estate , with the government , to be sold later . 
In these four , for instance , the RTC is stuck with $ 4.51 billion in bad assets . 
Acquirers paid premiums ranging from 1.5 % to 3.7 % for the deposits and branch systems , roughly in line with what analysts were expecting . 
The buyers will also be locked into deposit rates for just two weeks , as has been the case with previous deals . 
After that , the buyers may repudiate the rates paid by the former thrifts . 
But it 's uncertain whether these institutions will take those steps . 
NCNB , for example , has been one of the highest rate payers in the Texas market , and in Florida , rates are especially sensitive in retirement communities . 
The RTC had previously targeted five thrifts for quick sales in order to spend cash by certain budgetary deadlines , but the delays illustrate the tough chore facing the agency . 
`` These thrifts are beached whales , '' said Bert Ely , an industry consultant based in Alexandria , Va . 
For example , the delay in selling People 's Heritage Savings , Salina , Kan. , with $ 1.7 billion in assets , has forced the RTC to consider selling off the thrift branch-by-branch , instead of as a whole institution . 
NCNB continued its foray into the Florida and Texas markets . 
NCNB will acquire University Federal Savings Association , Houston , which had assets of $ 2.8 billion . 
NCNB Texas National Bank will pay the RTC a premium of $ 129 million for $ 3.5 billion in deposits . 
As a measure of the depths to which the Texas real estate market has sunk , the RTC will pay $ 3.8 billion to NCNB to take $ 750 million of bad assets . 
NCNB also acquired Freedom Savings & Loan Association , Tampa , Fla. , which had total assets of $ 900 million . 
NCNB will pay the RTC a premium of $ 40.4 million for $ 1.1 billion in deposits . 
NCNB will also acquire $ 266 million of Freedom 's assets from the RTC , which will require $ 875 million in assistance . 
Meridian Bancorp Inc. , Reading , Pa. , will acquire Hill Financial Savings Association , Red Hill , Pa. , which had $ 2.3 billion in assets . 
Meridian will pay a premium of $ 30.5 million to assume $ 2 billion in deposits . 
It will also purchase $ 845 million of the thrift 's assets , with $ 1.9 billion in RTC assistance . 
In the first RTC transaction with a foreign buyer , Royal Trustco Ltd. , Toronto , will acquire Pacific Savings Bank , Costa Mesa , Calif. , which had $ 949 million in assets . 
Royal Trustco will pay the RTC $ 25 million to assume $ 989 million in deposits . 
It will also purchase $ 473 million in assets , and receive $ 550 million in assistance from the RTC . 
The following issues were recently filed with the Securities and Exchange Commission : American Cyanamid Co. , offering of 1,250,000 common shares , via Merrill Lynch Capital Markets . 
Limited Inc. , offering of up to $ 300 million of debt securities and warrants . 
Nuveen California Performance Plus Municipal Fund Inc. , initial offering of five million common shares , via Alex . 
Brown & Sons Inc. , John Nuveen & Co. , Prudential-Bache Capital Funding , and Bateman Eichler , Hill Richards . 
PacifiCare Health Systems Inc. , proposed offering of 1.5 million common shares , of which 700,000 shares will be offered by PacifiCare and 800,000 shares by UniHealth America Inc . 
( PacifiCare 's 71 % ) , via Dillon , Read & Co. Inc. , Goldman , Sachs & Co. and Dean Witter Reynolds Inc . 
Pricor Inc. , offering of one million new shares of common stock and 300,000 shares by holders , via Drexel Burnham Lambert Inc. and J.C. Bradford & Co . 
Trans World Airlines Inc. , offering of $ 150 million senior notes , via Drexel Burnham . 
Time magazine , in a move to reduce the costs of wooing new subscribers , is lowering its circulation guarantee to advertisers for the second consecutive year , increasing its subscription rates and cutting back on merchandise giveaways . 
In an announcement to its staff last week , executives at Time Warner Inc. 's weekly magazine said Time will `` dramatically de-emphasize '' its use of electronic giveaways such as telephones in television subscription drives ; cut the circulation it guarantees advertisers by 300,000 , to four million ; and increase the cost of its annual subscription rate by about $ 4 to $ 55 . 
In a related development , the news-weekly , for the fourth year in a row , said it wo n't increase its advertising rates in 1990 ; a full , four-color page in the magazine costs about $ 120,000 . 
However , because the guaranteed circulation base is being lowered , ad rates will be effectively 7.5 % higher per subscriber , according to Richard Heinemann , Time associate publisher . 
Time is following the course of some other mass-circulation magazines that in recent years have challenged the publishing myth that maintaining artificially high , and expensive , circulations is the way to draw advertisers . 
In recent years , Reader 's Digest , New York Times Co. 's McCall 's , and most recently News Corp. 's TV Guide , have cut their massive circulation rate bases to eliminate marginal circulation and hold down rates for advertisers . 
Deep discounts in subscriptions and offers of free clock radios and watches have become accepted forms of attracting new subscribers in the hyper-competitive world of magazine news-weeklies . 
But Time , as part of the more cost-conscious Time Warner , wants to wean itself away from expensive gimmicks . 
Besides , Time executives think selling a news magazine with a clock radio is tacky . 
`` Giveaways just give people the wrong image , '' said Mr. Heinemann . 
`` That perception takes the focus off the magazine . 
'' Time magazine executives predictably paint the circulation cut as a show of strength and actually a benefit to advertisers . 
`` What we are doing is screening out the readers who are only casually related to the magazine and do n't really read it , '' said Mr. Heinemann . 
`` We are trying to create quality and involvement . 
'' However , Time executives used the same explanation when in October 1988 the magazine cut its guaranteed circulation from 4.6 million to 4.3 million . 
And Time 's paid circulation , according to Audit Bureau of Circulations , dropped 7.3 % to 4,393,237 in the six months ended June 30 , 1989 . 
Still , Time 's move is being received well , once again . 
`` It 's terrific for advertisers to know the reader will be paying more , '' said Michael Drexler , national media director at Bozell Inc. ad agency . 
`` A few drops in circulation are of no consequence . 
It 's not a show of weakness ; they are improving the quality of circulation while insuring their profits . 
'' Mr. Heinemann said the changes represent a new focus in the magazine industry : a magazine 's net revenue per subscriber , or the actual revenue from subscribers after discounts and the cost of premiums have been stripped away . 
`` The question is how much are we getting from each reader , '' said Mr. Heinemann . 
Time 's rivals news-weeklies , Washington Post Co. 's Newsweek and U.S. News & World Report , are less reliant on electronic giveaways , and in recent years both have been increasing their circulation rate bases . 
Both magazines are expected to announce their ad rates and circulation levels for 1990 within a month . 
When the news broke of an attempted coup in Panama two weeks ago , Sen. Christopher Dodd called the State Department for a briefing . 
`` They said , ` follow CNN , ' '' he told reporters . 
That shows how far Ted Turner 's Cable News Network has come since its birth nine years ago , when it was considered the laughingstock of television news . 
It is bigger , faster and more profitable than the news divisions of any of the three major broadcast networks . 
Its niche as the `` network of record '' during major crises draws elite audiences around the world . 
But for all its success , CNN has hit a plateau . 
Although viewership soars when big news breaks , it ebbs during periods of calm . 
CNN executives worry that the network 's punchy but repetitive news format may be getting stale and wo n't keep viewers coming back as the alternatives multiply for news and information on cable-TV . 
`` Just the fact we 're on 24 hours is no longer bulletin , '' says Ed Turner , CNN 's executive vice president , news gathering ( and no relation to Ted Turner ) . 
`` You ca n't live on that . 
'' So CNN , a unit of Atlanta-based Turner Broadcasting System Inc. , is trying to reposition itself as a primary channel , or what people in the television industry call a `` top of mind '' network . 
Tonight , to kick off the effort , CNN will premiere its first prime-time newscast in years , an hourlong show at 6 p.m . 
Eastern time to air head-to-head against the network newscasts . 
The show will be co-anchored by Bernard Shaw and Catherine Crier , a 34-year-old former Texas judge and campus beauty queen who has never held a job in television or journalism . 
The new show is perhaps the boldest in a number of steps the network is taking to build audience loyalty by shifting away from its current format toward more full-length `` signature '' programming with recognizable stars . 
To distinguish itself , CNN is also expanding international coverage and adding a second global-news program . 
It is paying higher salaries -- after years of scrimping -- to lure and keep experienced staffers . 
And it is embarking on an expensive gamble to break major stories with a large investigative-reporting team . 
`` The next stage is to get beyond the opinion leaders who use us as a point of reference to become a point of reference at ordinary dinner tables , '' says Jon Petrovich , executive vice president of Headline News , CNN 's sister network . 
But that wo n't be easy . 
Networks , like other consumer products , develop images in peoples ' minds that are n't easy to change . 
It also takes money that CNN has been reluctant to spend to make programs and hire talent that viewers will tune in specially to see . 
And the cable-TV operators -- CNN 's distributors and part owners -- like things just the way they are . 
The repositioning bid is aimed at CNN 's unsteady viewership -- and what may happen to it as the cable-TV news market grows more competitive . 
Already , CNN is facing stronger competition from Financial News Network Inc. and General Electric Co. 's Consumer News and Business Channel , both of which are likely to pursue more general news in the future . 
In addition , many cable-TV systems themselves are airing more local and regional news programs produced by local broadcast stations . 
CNN wants to change its viewers ' habits . 
Its watchers are , on the whole , a disloyal group of channel-zapping `` grazers '' and news junkies , who spend an average of just 26 minutes a day watching CNN , according to audience research . 
That 's less than one-third the time that viewers watch the major broadcast networks . 
The brief attention viewers give CNN could put it at a disadvantage as ratings data , and advertising , become more important to cable-TV channels . 
CNN 's viewer habits have been molded by its format . 
Its strategy in the past has been to serve as a TV wire service . 
It focused on building up its news bureaus around the world , so as events took place it could go live quicker and longer than other networks . 
It filled its daily schedule with newscasts called `` Daybreak , '' `` Daywatch , '' `` Newsday , '' and `` Newsnight , '' but the shows varied little in content , personality or look . 
Now , the push is on for more-distinctive shows . 
`` Our goal is to create more programs with an individual identity , '' says Paul Amos , CNN executive vice president for programming . 
Accordingly , CNN is adding a world-affairs show in the morning because surveys show its global-news hour in the afternoon is among its most `` differentiated '' programs in viewers ' minds , says Mr. Amos . 
And it is exploring other original programs , similar to its `` Larry King Live '' and `` Crossfire '' talk shows , which executives hope will keep people tuned in . 
Then there 's `` The World Today , '' the prime-time newscast featuring Mr. Shaw and Ms. Crier . 
Until now , CNN has featured its Hollywood gossip show during the key evening period . 
But 70 % of the cable-television-equipped households that watch news do so between 6:30 p.m. and 7 p.m. , the network discovered , so CNN wants in . 
Mr. Amos says the Shaw-Crier team will probably do two live interviews a day , with most of the program , at least for now , appearing similar to CNN 's other newcasts . 
Some in the industry are skeptical . 
`` I find it hard to conceive of people switching over to CNN for what , at least in the public 's mind , is the same news , '' says Reuven Frank , the former two-time president of NBC News and creator of the Huntley-Brinkley Report . 
The evening news is also slated as CNN 's stage for its big push into investigative journalism . 
In August , the network hired award-winning producer Pamela Hill , the former head of news specials at ABC . 
She 's assembling a staff of about 35 investigative reporters who will produce weekly , in-depth segments , with an eye toward breaking big stories . 
CNN executives hope the headlines created by such scoops will generate excitement for its `` branded '' programs , in the way `` 60 Minutes '' did so well for CBS . 
That 's such a departure from the past that many in the industry are skeptical CNN will follow through with its investigative commitment , especially after it sees the cost of producing in-depth pieces . 
`` They 've never shown any inclination to spend money on production , '' says Michael Mosettig , a senior producer with MacNeil-Lehrer NewsHour , who notes that CNN is indispensable to his job . 
The network 's salaries have always ranged far below industry standards , resulting in a less-experienced work force . 
CNN recently gave most employees raises of as much as 15 % , but they 're still drastically underpaid compared with the networks . 
Says Mr. Mosettig : `` CNN is my wire service ; they 're on top of everything . 
But to improve , they 've really got to make the investment in people . 
'' In any case , cable-TV-system operators have reason to fear any tinkering with CNN 's format . 
They market cable-TV on the very grazing opportunities CNN seeks to discourage . 
`` We would obviously be upset if those kinds of services evolved into more general-interest , long-format programming , '' says Robert Stengel , senior vice president , programming , of Continental Cablevision Inc. , which holds a 2 % stake in Turner Broadcasting . 
million households were tuned to CNN during an average viewing minute The Second U.S. Circuit Court of Appeals opinion in the Arcadian Phosphate case did not repudiate the position Pennzoil Co. took in its dispute with Texaco , contrary to your Sept. 8 article `` Court Backs Texaco 's View in Pennzoil Case -- Too Late . 
'' The fundamental rule of contract law applied to both cases was that courts will not enforce agreements to which the parties did not intend to be bound . 
In the Pennzoil\Texaco litigation , the courts found Pennzoil and Getty Oil intended to be bound ; in Arcadian Phosphates they found there was no intention to be bound . 
Admittedly , the principle in the cases is the same . 
But the outcome of a legal dispute almost always turns on the facts . 
And the facts , as found by the various courts in these two lawsuits , were different . 
When you suggest otherwise , you leave the realm of reporting and enter the orbit of speculation . 
Charles F. Vihon Boston Valley Federal Savings & Loan Association said Imperial Corp. of America withdrew from regulators its application to buy five Valley Federal branches , leaving the transaction in limbo . 
The broken purchase appears as additional evidence of trouble at Imperial Corp. , whose spokesman said the company withdrew its application from the federal Office of Thrift Supervision because of an informal notice that Imperial 's thrift unit failed to meet Community Reinvestment Act requirements . 
The Community Reinvestment Act requires savings and loan associations to lend money in amounts related to areas where deposits are received . 
The transaction , announced in August , included about $ 146 million in deposits at the five outlets in California 's San Joaquin Valley . 
Terms were n't disclosed , but Valley Federal had said it expected to post a modest pretax gain and to save about $ 2 million in operating costs annually . 
Valley Federal said Friday that it is considering whether to seek another buyer for the branches or to pursue the transaction with Imperial Corp. , which said it is attempting to meet Community Reinvestment Act requirements . 
Valley Federal , with assets of $ 3.3 billion , is based in Van Nuys . 
Imperial Corp. , based in San Diego , is the parent of Imperial Savings & Loan . 
In the first six months of the year it posted a net loss of $ 33.1 million . 
Call it the `` we 're too broke to fight '' defense . 
Lawyers for dozens of insolvent savings and loan associations are trying a new tack in their efforts to defuse suits filed by borrowers , developers and creditors . 
The thrifts ' lawyers claim that the suits , numbering 700 to 1,000 in Texas alone , should be dismissed as moot because neither the S&Ls nor the extinct Federal Savings and Loan Insurance Corp. has the money to pay judgments . 
Though the argument may have a common-sense ring to it , even the S&L lawyers concede there 's little precedent to back their position . 
Still , one federal appeals court has signaled it 's willing to entertain the notion , and the lawyers have renewed their arguments in Texas and eight other states where the defense is permitted under state law . 
The dismissal of the pending suits could go a long way toward clearing court dockets in Texas and reducing the FSLIC 's massive legal bills , which topped $ 73 million last year . 
The S&L lawyers were encouraged last month by an appellate-court ruling in two cases brought against defunct Sunbelt Savings & Loan Association of Dallas by the developers of the Valley Ranch , best known as the training center for the Dallas Cowboys football team . 
Sunbelt foreclosed on the ranch . 
Sunbelt and the FSLIC argued to the Fifth U.S. Circuit Court of Appeals `` that there will never be any assets with which to satisfy a judgment against Sunbelt Savings nor any means to collect from any other party , including FSLIC . 
'' `` If true , '' the court wrote , `` this contention would justify dismissal of these actions on prudential grounds . 
'' But the court said it lacked enough financial information about Sunbelt and the FSLIC and sent the cases back to federal district court in Dallas . 
Charles Haworth , a lawyer for Sunbelt , says he plans to file a brief this week urging the district judge to dismiss the suits , because Sunbelt 's liabilities exceeded its assets by about $ 2 billion when federal regulators closed it in August 1988 . 
`` This institution is just brain dead , '' says Mr. Haworth , a partner in the Dallas office of Andrews & Kurth , a Houston law firm . 
But a lawyer for Triland Investment Group , the developer of Valley Ranch , dismisses such arguments as a `` defense du jour . 
'' Attorney Richard Jackson of Dallas says a judgment for Triland could be satisfied in ways other than a monetary award , including the reversal of Sunbelt 's foreclosure on Valley Ranch . 
`` We 're asking the court for a number of things he can grant in addition to the thrill of victory , '' he says . 
`` We 'd take the Valley Ranch free and clear as a booby prize . 
'' Kenneth J. Thygerson , who was named president of this thrift holding company in August , resigned , citing personal reasons . 
Mr. Thygerson said he had planned to travel between the job in Denver and his San Diego home , but has found the commute too difficult to continue . 
A new president was n't named . 
SOUTH AFRICA FREED the ANC 's Sisulu and seven other political prisoners . 
Thousands of supporters , many brandishing flags of the outlawed African National Congress , gave the anti-apartheid activists a tumultuous reception upon their return to black townships across the country . 
Most of those freed had spent at least 25 years in prison . 
The 77-year-old Sisulu , sentenced to life in 1964 along with black nationalist Nelson Mandela for plotting to overthrow the government , said equality for blacks in South Africa was in reach . 
The releases , announced last week by President de Klerk , were viewed as Pretoria 's tacit legalization of the ANC . 
Mandela , considered the most prominent leader of the ANC , remains in prison . 
But his release within the next few months is widely expected . 
The Soviet Union reported that thousands of tons of goods needed to ease widespread shortages across the nation were piled up at ports and rail depots , and food shipments were rotting because of a lack of people and equipment to move the cargo . 
Strikes and mismanagement were cited , and Premier Ryzhkov warned of `` tough measures . 
'' Bush indicated there might be `` room for flexibility '' in a bill to allow federal funding of abortions for poor women who are vicitims of rape and incest . 
He reiterated his opposition to such funding , but expressed hope of a compromise . 
The president , at a news conference Friday , also renewed a call for the ouster of Panama 's Noriega . 
The White House said minors have n't any right to abortion without the consent of their parents . 
The administration 's policy was stated in a friend-of-the-court brief urging the Supreme Court to give states more leeway to restrict abortions . 
Ten of the nation 's governors , meanwhile , called on the justices to reject efforts to limit abortions . 
The Justice Department announced that the FBI has been given the authority to seize U.S. fugitives overseas without the permission of foreign governments . 
Secretary of State Baker emphasized Friday that the new policy would n't be invoked by the Bush administration without full consideration of foreign-policy implications . 
NASA pronounced the space shuttle Atlantis ready for launch tomorrow following a five-day postponement of the flight because of a faulty engine computer . 
The device was replaced . 
The spacecraft 's five astronauts are to dispatch the Galileo space probe on an exploration mission to Jupiter . 
South Korea 's President Roh traveled to the U.S. for a five-day visit that is expected to focus on ties between Washington and Seoul . 
Roh , who is facing calls for the reduction of U.S. military forces in South Korea , is to meet with Bush tomorrow and is to address a joint session of Congress on Wednesday . 
China 's Communist leadership voted to purge the party of `` hostile and anti-party elements '' and wealthy private businessmen , whom they called exploiters . 
The decision , reported by the official Xinhua News Agency , indicated that the crackdown prompted by student-led pro-democracy protests in June is intensifying . 
Hundreds of East Germans flocked to Bonn 's Embassy in Warsaw , bringing to more than 1,200 the number of emigres expected to flee to the West beginning today . 
More than 2,100 others escaped to West Germany through Hungary over the Weekend . 
In Leipzig , activists vowed to continue street protests to demand internal change . 
Zaire 's President Mobutu met in southern France with Angolan rebel leader Savimbi and a senior U.S. envoy in a bid to revive an accord to end Angola 's civil war . 
Details of the talks , described by a Zairean official as `` very delicate , '' were n't disclosed . 
PLO leader Arafat insisted on guarantees that any elections in the Israeli-occupied territories would be impartial . 
He made his remarks to a PLO gathering in Baghdad . 
In the occupied lands , underground leaders of the Arab uprising rejected a U.S. plan to arrange Israeli-Palestinian talks as Shamir opposed holding such discussions in Cairo . 
Lebanese Christian lawmakers presented to Arab mediators at talks in Saudi Arabia proposals for a new timetable for the withdrawal of Syria 's forces from Lebanon . 
A plan currently under study gives Damascus two years to pull back to eastern Lebanon , starting from the time Beirut 's legislature increases political power for Moslems . 
Hurricane Jerry threatened to combine with the highest tides of the year to swamp the Texas-Louisiana coast . 
Thousands of residents of low-lying areas were ordered to evacuate as the storm headed north in the Gulf of Mexico with 80 mph winds . 
A group of Arby 's franchisees said they formed an association to oppose Miami Beach financier Victor Posner 's control of the restaurant chain . 
The decision is the latest move in an escalating battle between the franchisees and Mr. Posner that began in August . 
At the time , a group called R.B. Partners Ltd. , consisting of eight of Arby 's largest franchisees , offered more than $ 200 million to buy Arby 's Inc. , which is part of DWG Corp . 
DWG is a holding company controlled by Mr. Posner . 
One week later , Leonard H. Roberts , president and chief executive officer of Arby 's , was fired in a dispute with Mr. Posner . 
Friday , 42 franchisees announced the formation of an association -- called A.P. Association Inc. -- to `` preserve the integrity of the Arby 's system . 
'' The franchisees , owners or operators of 1,000 of the 1,900 franchised Arby 's in the U.S. , said : `` We have concluded that continued control of Arby 's by Victor Posner is totally unacceptable to us , because it is extremely likely to cause irreparable damage to the Arby 's system . 
We support all efforts to remove Victor Posner from control of Arby 's Inc. and the Arby 's system . 
'' The group said it would consider , among other things , withholding royalty payments and initiating a class-action lawsuit seeking court approval for the withholdings . 
In Florida , Renee Mottram , a senior vice president at DWG , responded : `` We do n't think any individual or group should disrupt a winning system or illegally interfere with existing contractual relationships for their own self-serving motives . 
'' September 's steep rise in producer prices shows that inflation still persists , and the pessimism over interest rates caused by the new price data contributed to the stock market 's plunge Friday . 
After falling for three consecutive months , the producer price index for finished goods shot up 0.9 % last month , the Labor Department reported Friday , as energy prices jumped after tumbling through the summer . 
Although the report , which was released before the stock market opened , did n't trigger the 190.58-point drop in the Dow Jones Industrial Average , analysts said it did play a role in the market 's decline . 
Analysts immediately viewed the price data , the grimmest inflation news in months , as evidence that the Federal Reserve was unlikely to allow interest rates to fall as many investors had hoped . 
Further fueling the belief that pressures in the economy were sufficient to keep the Fed from easing credit , the Commerce Department reported Friday that retail sales grew 0.5 % in September , to $ 145.21 billion . 
That rise came on top of a 0.7 % gain in August , and suggested there is still healthy consumer demand in the economy . 
`` I think the Friday report , combined with the actions of the Fed , weakened the belief that there was going to be an imminent easing of monetary policy , '' said Robert Dederick , chief economist at Northern Trust Co. in Chicago . 
But economists were divided over the extent of the inflation threat signaled by the new numbers . 
`` The overall 0.9 % increase is serious in itself , but what is even worse is that excluding food and energy , the producer price index still increased by 0.7 % , '' said Gordon Richards , an economist at the National Association of Manufacturers . 
But Sung Won Sohn , chief economist at Norwest Corp. in Minneapolis , blamed rising energy prices and the annual autumn increase in car prices for most of the September jump . 
`` I would say this is not bad news ; this is a blip , '' he said . 
`` The core rate is not really out of line . 
'' All year , energy prices have skewed the producer price index , which measures changes in the prices producers receive for goods . 
Inflation unquestionably has fallen back from its torrid pace last winter , when a steep run-up in world oil prices sent the index surging at double-digit annual rates . 
Energy prices then plummeted through the summer , causing the index to decline for three consecutive months . 
Overall , the index has climbed at a 5.1 % compound annual rate since the start of the year , the Labor Department said . 
While far more restrained than the pace at the beginning of the year , that is still a steeper rise than the 4.0 % increase for all of 1988 . 
Moreover , this year 's good inflation news may have ended last month , when energy prices zoomed up 6.5 % after plunging 7.3 % in August . 
Some analysts expect oil prices to remain relatively stable in the months ahead , leaving the future pace of inflation uncertain . 
Analysts had expected that the climb in oil prices last month would lead to a substantial rise in the producer price index , but the 0.9 % climb was higher than most anticipated . 
`` I think the resurgence { in inflation } is going to continue for a few months , '' said John Mueller , chief economist at Bell Mueller Cannon , a Washington economic forecasting firm . 
He predicted that inflation will moderate next year , saying that credit conditions are fairly tight world-wide . 
But Dirk Van Dongen , president of the National Association of Wholesaler-Distributors , said that last month 's rise `` is n't as bad an omen '' as the 0.9 % figure suggests . 
`` If you examine the data carefully , the increase is concentrated in energy and motor vehicle prices , rather than being a broad-based advance in the prices of consumer and industrial goods , '' he explained . 
Passenger car prices jumped 3.8 % in September , after climbing 0.5 % in August and declining in the late spring and summer . 
Many analysts said the September increase was a one-time event , coming as dealers introduced their 1990 models . 
Although all the price data were adjusted for normal seasonal fluctuations , car prices rose beyond the customary autumn increase . 
Prices for capital equipment rose a hefty 1.1 % in September , while prices for home electronic equipment fell 1.1 % . 
Food prices declined 0.6 % , after climbing 0.3 % in August . 
Meanwhile , the retail sales report showed that car sales rose 0.8 % in September to $ 32.82 billion . 
But at least part of the increase could have come from higher prices , analysts said . 
Sales at general merchandise stores rose 1.7 % after declining 0.6 % in August , while sales of building materials fell 1.8 % after rising 1.7 % . 
Producer prices for intermediate goods grew 0.4 % in September , after dropping for three consecutive months . 
Prices for crude goods , an array of raw materials , jumped 1.1 % after declining 1.9 % in August and edging up 0.2 % in July . 
Here are the Labor Department 's producer price indexes ( 1982 100 ) for September , before seasonal adjustment , and the percentage changes from September , 1988 . 
CityFed Financial Corp. said it expects to report a loss of at least $ 125 million to $ 150 million for the third quarter . 
In the year-earlier period , CityFed had net income of $ 485,000 , but no per-share earnings . 
CityFed 's president and chief executive officer , John Atherton , said the loss stems from several factors . 
He said nonperforming assets rose to slightly more than $ 700 million from $ 516 million between June and September . 
Approximately 85 % of the total consisted of nonperforming commercial real estate assets . 
Accordingly , CityFed estimated that it will provide between $ 85 million and $ 110 million for credit losses in the third quarter . 
CityFed added that significant additional loan-loss provisions may be required by federal regulators as part of the current annual examination of City Federal Savings Bank , CityFed 's primary subsidiary , based in Somerset , N.J . 
City Federal operates 105 banking offices in New Jersey and Florida . 
Mr. Atherton said CityFed will also mark its portfolio of high-yield corporate bonds to market as a result of federal legislation requiring that savings institutions divest themselves of such bonds . 
That action , CityFed said , will result in a charge against third-quarter results of approximately $ 30 million . 
CityFed also said it expects to shed its remaining mortgage loan origination operations outside its principal markets in New Jersey and Florida and , as a result , is taking a charge for discontinued operations . 
All these actions , Mr. Atherton said , will result in a loss of $ 125 million to $ 150 million for the third quarter . 
He added , however : `` Depending on the resolution of certain accounting issues relating to mortgages servicing and the outcome of the annual examination of City Federal currently in progress with respect to the appropriate level of loan loss reserves , the total loss for the quarter could significantly exceed this range . 
'' CenTrust Savings Bank said federal thrift regulators ordered it to suspend dividend payments on its two classes of preferred stock , indicating that regulators ' concerns about the troubled institution have heightened . 
In a statement , Miami-based CenTrust said the regulators cited the thrift 's operating losses and `` apparent losses '' in its junk-bond portfolio in ordering the suspension of the dividends . 
Regulators also ordered CenTrust to stop buying back the preferred stock . 
David L. Paul , chairman and chief executive officer , criticized the federal Office of Thrift Supervision , which issued the directive , saying it was `` inappropriate '' and based on `` insufficient '' reasons . 
He said the thrift will try to get regulators to reverse the decision . 
The suspension of a preferred stock dividend is a serious step that signals that regulators have deep concerns about an institution 's health . 
In March , regulators labeled CenTrust a `` troubled institution , '' largely because of its big junk-bond holdings and its operating losses . 
In the same month , the Office of Thrift Supervision ordered the institution to stop paying common stock dividends until its operations were on track . 
For the nine months ended June 30 , CenTrust had a net loss of $ 21.3 million , compared with year-earlier net income of $ 52.8 million . 
CenTrust , which is Florida 's largest thrift , holds one of the largest junk-bond portfolios of any thrift in the nation . 
Since April , it has pared its high-yield bond holdings to about $ 890 million from $ 1.35 billion . 
Mr. Paul said only about $ 150 million of the current holdings are tradeable securities registered with the Securities and Exchange Commission . 
The remainder , he said , are commercial loan participations , or private placements , that are n't filed with the SEC and do n't have a ready market . 
CenTrust and regulators have been in a dispute over market valuations for the junk bonds . 
The Office of Thrift Supervision has been hounding CenTrust to provide current market values for its holdings , but CenTrust has said it ca n't easily obtain such values because of the relative illiquidity of the bonds and lack of a ready market . 
Regulators have become increasingly antsy about CenTrust 's and other thrifts ' junk-bond holdings in light of the recent federal thrift bailout legislation and the recent deep decline in the junk-bond market . 
The legislation requires thrifts to divest themselves of junk bonds in the new , somber regulatory climate . 
In American Stock Exchange composite trading Friday , CenTrust common shares closed at $ 3 , down 12.5 cents . 
In a statement Friday , Mr. Paul challenged the regulators ' decision , saying the thrift 's operating losses and `` apparent '' junk-bond losses `` have been substantially offset by gains in other activities of the bank . 
'' He also said substantial reserves have been set aside for possible losses from the junk bonds . 
In the third quarter , for instance , CenTrust added $ 22.5 million to its general reserves . 
Mr. Paul said the regulators should instead move ahead with approving CenTrust 's request to sell 63 of its 71 branches to Great Western Bank , a unit of Great Western Financial Corp. based in Beverly Hills , Calif . 
The branch sale is the centerpiece of CenTrust 's strategy to transform itself into a traditional S&L from a high-flying institution that relied heavily on securities trading for profits , according to Mr. Paul . 
Most analysts and thrift executives had expected a decision on the proposed transaction , which was announced in July , long before now . 
Many interpret the delay as an indication that regulators are skeptical about the proposal . 
Branches and deposits can be sold at a premium in the event federal regulators take over an institution . 
CenTrust , however , touts the branch sale , saying it would bring in $ 150 million and reduce the thrift 's assets to $ 6.7 billion from $ 9 billion . 
It said the sale would give it positive tangible capital of $ 82 million , or about 1.2 % of assets , from a negative $ 33 million as of Sept. 30 , thus bringing CenTrust close to regulatory standards . 
CenTrust said the branch sale would also reduce the company 's large amount of good will by about $ 180 million . 
Critics , however , say the branch sale will make CenTrust more dependent than ever on brokered deposits and junk bonds . 
Mr. Paul counters that he intends to further pare the size of CenTrust by not renewing more than $ 1 billion of brokered certificates of deposit when they come due . 
The thrift is also working to unload its junk-bond portfolio by continuing to sell off the bonds , and it plans to eventually place some of them in a separate affiliate , as required under the new thrift law . 
On a recent Saturday night , in the midst of West Germany 's most popular prime-time show , a contestant bet the host that she could name any of 100 different cheeses after just one nibble , while blindfolded . 
The woman won the bet . 
But perhaps even more remarkable , the three-hour-show , `` Wetten Dass '' ( Make a Bet ) , regularly wins the top slot in the country 's TV ratings , sometimes drawing as many as 50 % of West German households . 
As the 1992 economic integration approaches , Europe 's cultural curators have taken to the ramparts against American `` cultural imperialism , '' threatening to impose quotas against such pop invaders as `` Dallas , '' `` Miami Vice '' and `` L.A. Law . 
'' But much of what the Europeans want to protect seems every bit as cheesy as what they are trying to keep out . 
The most militant opposition to American TV imports has come from French television and movie producers , who have demanded quotas ensuring that a full 60 % of Europe 's TV shows be produced in Europe . 
So far , the French have failed to win enough broad-based support to prevail . 
A glance through the television listings and a few twists of the European television dial suggest one reason why . 
While there are some popular action and drama series , few boast the high culture and classy production values one might expect . 
More European air time is filled with low-budget game shows , variety hours , movies and talk shows , many of which are authorized knock-offs of their American counterparts . 
One of France 's most popular Saturday night programs features semi-celebrities seeking out their grammar-school classmates for on-air reunions . 
A Flemish game show has as its host a Belgian pretending to be Italian . 
One of Italy 's favorite shows , `` Fantastico , '' a tepid variety show , is so popular that viewers clamored to buy a chocolate product , `` Cacao Fantastico , '' whose praises were sung each week by dancing showgirls -- even though the product did n't exist . 
Topping the cheese stunt , on another typical evening of fun on `` Wetten Dass , '' a contestant won a bet with the show 's host , Thomas Gottschalk , that he could identify 300 German dialects over the telephone . 
A celebrity guest , U.S. Ambassador to West Germany Richard Burt , also won a bet that someone could pile up $ 150 worth of quarters on a slanted coin . 
Mr. Burt nonetheless paid the penalty as if he had lost , agreeing to spend a day with West German Foreign Minister Hans-Dietrich Genscher frying and selling their combined weight in potato pancakes . 
If this seems like pretty weak stuff around which to raise the protectionist barriers , it may be because these shows need all the protection they can get . 
European programs usually target only their own local audience , and often only a small portion of that . 
Mega-hits in Germany or Italy rarely make it even to France or Great Britain , and almost never show up on U.S. screens . 
Attempts to produce `` pan-European '' programs have generally resulted in disappointment . 
One annual co-production , the three-hour-long `` Eurovision Song Contest , '' featuring soft-rock songs from each of 20 European countries , has been described as the world 's most boring TV show . 
Another , `` Jeux Sans Frontieres , '' where villagers from assorted European countries make fools of themselves performing pointless tasks , is a hit in France . 
A U.S.-made imitation under the title `` Almost Anything Goes '' flopped fast . 
For the most part , what 's made here stays here , and for good reason . 
The cream of the British crop , the literary dramas that are shown on U.S. public television as `` Masterpiece Theater , '' make up a relatively small part of British air time . 
Most British programming is more of an acquired taste . 
There is , for instance , `` One Man and His Dog , '' a herding contest among sheep dogs . 
Also riveting to the British are hours of dart-throwing championships , even more hours of lawn bowling contests and still more hours of snooker marathons . 
European drama has had better , though still mixed , fortunes . 
The most popular such shows focus on narrow national concerns . 
A French knock-off of `` Dallas , '' called `` Chateauvallon '' and set in a French vineyard , had a good run in France , which ended after the female lead was injured in a real-life auto accident . 
`` Schwarzwaldklinik , '' ( Black Forest Clinic ) , a kind of German `` St . 
Elsewhere '' set in a health spa , is popular in Germany , and has spread into France . 
Italy 's most popular series is a drama called `` La Piovra , '' or `` The Octopus , '' which chronicles the fight of an idealistic young investigator in Palermo against the Mafia . 
It was front-page news in Italy earlier this year when the fictional inspector was gunned down in the series . 
Spain 's most popular mini-series this year was `` Juncal , '' the story of an aging bullfighter . 
`` The trend is pretty well established now that local programs are the most popular , with American programs second , '' says Brian Wenham , a former director of programs for the British Broadcasting Corp . 
`` Given a choice , everybody will watch a home-produced show . 
'' But frequently there is n't much choice . 
Thus , Europe has begun the recent crusade to produce more worthy shows of its own , programs with broader appeal . 
`` We 've basically got to start from scratch , to train writers and producers to make shows that other people will want to see , '' concedes Colin Young , head of Britain 's National Film Theatre School . 
While some in the U.S. contend that advertising is the bane of television , here many believe that its absence is to blame for the European TV industry 's sluggish development . 
Until recently , national governments in Europe controlled most of the air time and allowed little or no advertising . 
Since production costs were guaranteed , it did n't matter that a program could n't be sold abroad or put into syndication , as most American programs are . 
But not much money was spent on the shows , either , a situation that encouraged cheap-to-make talk and game shows , while discouraging expensive-to-produce dramas . 
Now , however , commercial channels are coming to most European countries , and at the same time , satellite and cable technology is spreading rapidly . 
Just last week , Greece authorized two commercial channels for the first time ; Spain earlier began to allow commercial television alongside its state channels . 
The result is a new and huge appetite for programming . 
But perhaps to the consternation of those calling for quotas , most of this void is likely to be filled with the cheapest and most plentiful programming now available -- reruns -- usually of shows made in the U.S . 
Sky Channel , a British-based venture of Australian-American press tycoon Rupert Murdoch , offers what must be a baffling cultural mix to most of its audience . 
The financially struggling station offers programs obviously made available cheaply from its boss 's other ventures . 
In a Madrid hotel room recently , a viewer caught the end of a badly acted series about a fishing boat on Australia 's Great Barrier Reef , only to be urged by the British announcer to `` stay tuned for the further adventures of Skippy the Kangaroo . 
'' Lisa Grishaw-Mueller in Bonn , Laura Colby in Milan , Tim Carrington in London and Carlta Vitzhum in Madrid contributed to this article . 
British Aerospace PLC and France 's Thomson-CSF S.A. said they are nearing an agreement to merge their guided-missile divisions , greatly expanding collaboration between the two defense contractors . 
The 50-50 joint venture , which may be dubbed Eurodynamics , would have combined annual sales of at least # 1.4 billion ( $ 2.17 billion ) and would be among the world 's largest missile makers . 
After two years of talks , plans for the venture are sufficiently advanced for the companies to seek French and British government clearance . 
The companies hope for a final agreement by year-end . 
The venture would strengthen the rapidly growing ties between the two companies , and help make them a leading force in European defense contracting . 
In recent months , a string of cross-border mergers and joint ventures have reshaped the once-balkanized world of European arms manufacture . 
Already , British Aerospace and French government-controlled Thomson-CSF collaborate on a British missile contract and on an air-traffic control radar system . 
Just last week they announced they may make a joint bid to buy Ferranti International Signal PLC , a smaller British defense contractor rocked by alleged accounting fraud at a U.S. unit . 
The sudden romance of British Aerospace and Thomson-CSF -- traditionally bitter competitors for Middle East and Third World weapons contracts -- is stirring controversy in Western Europe 's defense industry . 
Most threatened by closer British Aerospace-Thomson ties would be their respective national rivals , including Matra S.A. in France and Britain 's General Electric Co. PLC . 
But neither Matra nor GEC -- unrelated to Stamford , Conn.-based General Electric Co. -- are sitting quietly by as their competitors join forces . 
Yesterday , a source close to GEC confirmed that his company may join the Ferranti fight , as part of a possible consortium that would bid against British Aerospace and Thomson-CSF . 
Companies with which GEC has had talks about a possible joint Ferranti bid include Matra , Britain 's Dowty Group PLC , West Germany 's Daimler-Benz AG , and France 's Dassault group . 
But it may be weeks before GEC and its potential partners decide whether to bid , the source indicated . 
GEC plans first to study Ferranti 's financial accounts , which auditors recently said included # 215 million in fictitious contracts at a U.S. unit , International Signal & Control Group , with which Ferranti merged last year . 
Also , any GEC bid might be blocked by British antitrust regulators ; Ferranti is GEC 's main competitor on several key defense-electronics contracts , and its purchase by GEC may heighten British Defense Ministry worries about concentration in the country 's defense industry . 
A consortium bid , however , would diminish GEC 's direct role in Ferranti and might consequently appease ministry officials . 
A British Aerospace spokeswoman appeared unperturbed by the prospect of a fight with GEC for Ferranti : `` Competition is the name of the game , '' she said . 
At least one potential GEC partner , Matra , insists it is n't interested in Ferranti . 
`` We have nothing to say about this affair , which does n't concern us , '' a Matra official said Sunday . 
The missile venture , the British Aerospace spokeswoman said , is a needed response to the `` new environment '' in defense contracting . 
For both Thomson and British Aerospace , earnings in their home markets have come under pressure from increasingly tight-fisted defense ministries ; and Middle East sales , a traditional mainstay for both companies ' exports , have been hurt by five years of weak oil prices . 
The venture 's importance for Thomson is great . 
Thomson feels the future of its defense business depends on building cooperation with other Europeans . 
The European defense industry is consolidating ; for instance , West Germany 's Siemens AG recently joined GEC in a takeover of Britain 's Plessey Co. , and Daimler-Benz agreed to buy Messerschmitt-Boelkow Blohm G.m.b . 
H . 
In missiles , Thomson is already overshadowed by British Aerospace and by its home rival , France 's Aerospatiale S.A. ; to better compete , Thomson officials say , they need a partnership . 
To justify 50-50 ownership of the planned venture , Thomson would make a cash payment to British Aerospace . 
Annual revenue of British Aerospace 's missile business is about # 950 million , a Thomson spokesman said . 
British Aerospace 's chief missile products include its 17-year-old family of Rapier surface-to-air missiles . 
Thomson missile products , with about half British Aerospace 's annual revenue , include the Crotale surface-to-air missile family . 
Interprovincial Pipe Line Co. said it will delay a proposed two-step , 830 million Canadian-dollar ( US$ 705.6 million ) expansion of its system because Canada 's output of crude oil is shrinking . 
Interprovincial , Canada 's biggest oil pipeline operator and a major transporter of crude to the U.S. , said revised industry forecasts indicate that Canadian oil output will total about 1.64 million barrels a day by 1991 , 8 % lower than a previous estimate . 
Canadian crude production averaged about 1.69 million barrels a day during 1989 's first half , about 1 % below the 1988 level . 
`` The capability of existing fields to deliver oil is dropping , '' and oil exploration activity is also down dramatically , as many producers shift their emphasis to natural gas , said Ronald Watkins , vice president for government and industry relations with Interprovincial 's parent , Interhome Energy Inc . 
Mr. Watkins said volume on Interprovincial 's system is down about 2 % since January and is expected to fall further , making expansion unnecessary until perhaps the mid-1990s . 
`` There has been a swing of the pendulum back to the gas side , '' he said . 
Many of Canada 's oil and gas producers say the outlook for natural gas is better than it is for oil , and have shifted their exploration and development budgets accordingly . 
The number of active drilling rigs in Canada is down 30 % from a year ago , and the number of completed oil wells is `` down more than that , due to the increasing focus on gas exploration , '' said Robert Feick , manager of crude oil with Calgary 's Independent Petroleum Association of Canada , an industry group . 
Mr. Watkins said the main reason for the production decline is shrinking output of light crude from mature , conventional fields in western Canada . 
Interprovincial transports about 75 % of all crude produced in western Canada , and almost 60 % of Interprovincial 's total volume consists of light crude . 
Nearly all of the crude oil that Canada exports to the U.S. is transported on Interprovincial 's system , whose main line runs from Edmonton to major U.S. and Canadian cities in the Great Lakes region , including Chicago , Buffalo , Toronto and Montreal . 
Canada 's current oil exports to the U.S. total about 600,000 barrels a day , or about 9.1 % of net U.S. crude imports , said John Lichtblau , president of the New York-based Petroleum Industry Research Foundation . 
That ranks Canada as the fourth-largest source of imported crude , behind Saudi Arabia , Nigeria and Mexico . 
Mr. Lichtblau said Canada 's declining crude output , combined with the fast-shrinking output of U.S. crude , will help intensify U.S. reliance on oil from overseas , particularly the Middle East . 
`` It 's very much a growing concern . 
But when something is inevitable , you learn to live with it , '' he said . 
Mr. Lichtblau stressed that the delay of Interprovincial 's proposed expansion wo n't by itself increase U.S. dependence on offshore crude , however , since Canadian imports are limited in any case by Canada 's falling output . 
Under terms of its proposed two-step expansion , which would have required regulatory approval , Interprovincial intended to add 200,000 barrels a day of additional capacity to its system , beginning with a modest expansion by 1991 . 
The system currently has a capacity of 1.55 million barrels a day . 
Inland Steel Industries Inc. expects to report that third-quarter earnings dropped more than 50 % from the previous quarter as a result of reduced sales volume and increased costs . 
In the second quarter , the steelmaker had net income of $ 45.3 million or $ 1.25 a share , including a pretax charge of $ 17 million related to the settlement of a suit , on sales of $ 1.11 billion . 
The company said normal seasonal softness and lost orders caused by prolonged labor talks reduced shipments by 200,000 tons in the latest quarter , compared with the second quarter . 
At the same time , the integrated-steel business was hurt by continued increases in materials costs and repair and maintenance expenses , as well as higher labor costs under its new contract . 
The service-center business was hurt by reduced margins and start-up costs associated with its Joseph T. Ryerson & Son unit . 
The company said it is beginning to see some shipping-rate improvements in both the intergrated-steel and steel-service-center segments , which should result in improved results for the fourth quarter . 
Inland said its third-quarter results will be announced later this week . 
In the year-earlier third quarter , when the industry was in the midst of a boom , the company had net of $ 61 million , or $ 1.70 a share , on sales of $ 1.02 billion . 
Predicting the financial results of computer firms has been a tough job lately . 
Take Microsoft Corp. , the largest maker of personal computer software and generally considered an industry bellwether . 
In July , the company stunned Wall Street with the prediction that growth in the personal computer business overall would be only 10 % in 1990 , a modest increase when compared with the sizzling expansion of years past . 
Investors -- taking this as a sign that a broad industry slump was in the offing -- reacted by selling the company 's stock , which lost $ 3.25 that day to close at $ 52 in national over-the-counter trading . 
But that was all of three months ago . 
Last week , Microsoft said it expects revenue for its first quarter ended Sept. 30 to increase 34 % . 
The announcement caused the company 's stock to surge $ 6.50 to close at $ 75.50 a share . 
Microsoft 's surprising strength is one example of the difficulty facing investors looking for reassurances about the financial health of the computer firms . 
`` It 's hard to know what to expect at this point , '' said Peter Rogers , an analyst at Robertson Stephens & Co . 
`` The industry defies characterization . 
'' To illustrate , Mr. Rogers said that of the 14 computer-related firms he follows , half will report for their most recent quarter earnings below last year 's results , and half above those results . 
Among those companies expected to have a down quarter are Hewlett-Packard Co. , Amdahl Corp. and Sun Microsystems Inc. , generally solid performers in the past . 
International Business Machines Corp. also is expected to report disappointing results . 
Apple Computer Inc. , meanwhile , is expected to show improved earnings for the period ended Sept . 
Another contradictory message comes from Businessland Inc. , a computer retailer . 
In July , the company reported that booming sales of new personal computers from Apple and IBM had resulted in net income more than doubling for its fourth quarter ended June 30 to $ 7.4 million , or 23 cents a share . 
This month , however , Businessland warned investors that results for its first quarter ended Sept. 30 had n't met expectations . 
The company said it expects earnings of 14 to 17 cents a share , down from 25 cents a share in the year-earlier period . 
While the earnings picture confuses , observers say the major forces expected to shape the industry in the coming year are clearer . 
Companies will continue to war over standards . 
In computer publishing , a battle over typefaces is hurting Adobe Systems Inc. , which sells software that controls the image produced by printers and displays . 
Until recently , Adobe had a lock on the market for image software , but last month Apple , Adobe 's biggest customer , and Microsoft rebelled . 
Now the two firms are collaborating on an alternative to Adobe 's approach , and analysts say they are likely to carry IBM , the biggest seller of personal computers , along with them . 
The short-term outlook for Adobe 's business , however , appears strong . 
The company is beginning to ship a new software program that 's being heralded as a boon for owners of low-end printers sold by Apple . 
The program is aimed at improving the quality of printed material . 
John Warnock , Adobe 's chief executive officer , said the Mountain View , Calif. , company has been receiving 1,000 calls a day about the product since it was demonstrated at a computer publishing conference several weeks ago . 
Meanwhile , competition between various operating systems , which control the basic functions of a computer , spells trouble for software firms generally . 
`` It creates uncertainty and usually slows down sales , '' said Russ Crabs , an analyst at Soundview Financial Group . 
Mr. Crabs said this probably is behind the expected weak performance of Aldus Corp. , maker of a widely used computer publishing program . 
He expects Aldus to report earnings of 21 cents a share on revenues of $ 19.5 million for its third quarter , compared with earnings of 30 cents a share on revenue of 20.4 million in the year-earlier period . 
Aldus officials could n't be reached for comment . 
On the other hand , the battle of the bus is expected to grow increasingly irrelevant . 
A bus is the data highway within a computer . 
IBM is backing one type of bus called microchannel , while the nine other leading computer makers , including H-P and Compaq Computer Corp. , have chosen another method . 
`` Users do n't care about the bus , '' said Daniel Benton , an analyst at Goldman , Sachs & Co . 
He said Apple 's family of Macintosh computers , for instance , uses four different buses `` and no one seems to mind . 
'' The gap between winners and laggards will grow . 
In personal computers , Apple , Compaq and IBM are expected to tighten their hold on their business . 
At the same time , second-tier firms will continue to lose ground . 
Some lagging competitors even may leave the personal computer business altogether . 
Wyse Technology , for instance , is considered a candidate to sell its troubled operation . 
`` Wyse has done well establishing a distribution business , but they have n't delivered products that sell , '' said Kimball Brown , an analyst at Prudential-Bache Securities . 
Mr. Brown estimates Wyse , whose terminals business is strong , will report a loss of 12 cents a share for its quarter ended Sept . 
Personal-computer makers will continue to eat away at the business of more traditional computer firms . 
Ever-more powerful desk-top computers , designed with one or more microprocessors as their `` brains , '' are expected to increasingly take on functions carried out by more expensive minicomputers and mainframes . 
`` The guys that make traditional hardware are really being obsoleted by microprocessor-based machines , '' said Mr. Benton . 
As a result of this trend , longtime powerhouses H-P , IBM and Digital Equipment Corp. are scrambling to counterattack with microprocessor-based systems of their own . 
But they will have to act quickly . 
Mr. Benton expects Compaq to unveil a family of high-end personal computers later this year that are powerful enough to serve as the hub for communications within large networks of desk-top machines . 
A raft of new computer companies also has targeted this `` server '' market . 
Population Drain Ends For Midwestern States IOWA IS MAKING a comeback . 
So are Indiana , Ohio and Michigan . 
The population of all four states is on the upswing , according to new Census Bureau estimates , following declines throughout the early 1980s . 
The gains , to be sure , are rather small . 
Iowa , for instance , saw its population grow by 11,000 people , or 0.4 % , between 1987 and 1988 , the Census Bureau says . 
Still , even that modest increase is good news for a state that had n't grown at all since 1981 . 
Between 1987 and 1988 , North Dakota was the only state in the Midwest to lose population , a loss of 4,000 people . 
Six of the 12 midwestern states have been growing steadily since 1980 -- Illinois , Kansas , Minnesota , Missouri , South Dakota and Wisconsin . 
The Northeast has been holding its own in the population race . 
Seven of nine states have grown each year since 1980 , including New York , which lost 4 % of its population during the 1970s . 
And although Pennsylvania and Massachusetts suffered slight declines earlier in the decade , they are growing again . 
At the same time , several states in the South and West have had their own population turnaround . 
Seven states that grew in the early 1980s are now losing population -- West Virginia , Mississippi , Louisiana , Oklahoma , Montana , Wyoming and Alaska . 
Overall , though , the South and West still outpace the Northeast and Midwest , and fast-growing states like Florida and California ensure that the pattern will continue . 
But the growth gap between the Sun Belt and other regions has clearly started narrowing . 
More Elderly Maintain Their Independence THANKS TO modern medicine , more couples are growing old together . 
And even after losing a spouse , more of the elderly are staying independent . 
A new Census Bureau study of the noninstitutionalized population shows that 64 % of people aged 65 to 74 were living with a spouse in 1988 , up from 59 % in 1970 . 
This does n't mean they 're less likely to live alone , however . 
That share has remained at about 24 % since 1970 . 
What has changed is that more of the young elderly are living with spouses rather than with other relatives , such as children . 
In 1988 , 10 % of those aged 65 to 74 lived with relatives other than spouses , down from 15 % in 1970 . 
As people get even older , many become widowed . 
But even among those aged 75 and older , the share living with a spouse rose slightly , to 40 % in 1988 from 38 % in 1970 . 
Like their younger counterparts , the older elderly are less likely to live with other relatives . 
Only 17 % of those aged 75 and older lived with relatives other than spouses in 1988 , down from 26 % in 1970 . 
The likelihood of living alone beyond the age of 75 has increased to 40 % from 32 % . 
More people are remaining independent longer presumably because they are better off physically and financially . 
Careers Count Most For the Well-to-Do MANY AFFLUENT people place personal success and money above family . 
At least that 's what a survey by Ernst & Young and Yankelovich , Clancy , Shulman indicates . 
Two-thirds of respondents said they strongly felt the need to be successful in their jobs , while fewer than half said they strongly felt the need to spend more time with their families . 
Being successful in careers and spending the money they make are top priorities for this group . 
Unlike most studies of the affluent market , this survey excluded the super-rich . 
Average household income for the sample was $ 194,000 , and average net assets were reported as $ 775,000 . 
The goal was to learn about one of today 's fastest-growing income groups , the upper-middle class . 
Although they represent only 2 % of the population , they control nearly one-third of discretionary income . 
Across the board , these consumers value quality , buy what they like rather than just what they need , and appreciate products that are distinctive . 
Despite their considerable incomes and assets , 40 % of the respondents in the study do n't feel financially secure , and one-fourth do n't feel that they have made it . 
Twenty percent do n't even feel they are financially well off . 
Many of the affluent are n't comfortable with themselves , either . 
About 40 % do n't feel they 're more able than others . 
While twothirds feel some guilt about being affluent , only 25 % give $ 2,500 or more to charity each year . 
Thirty-five percent attend religious services regularly ; at the same time , 60 % feel that in life one sometimes has to compromise one 's principles . 
Odds and Ends THE NUMBER of women and minorities who hold jobs in top management in the nation 's largest banks has more than doubled since 1978 . 
The American Bankers Association says that women make up 47 % of officials and managers in the top 50 banks , up from 33 % in 1978 . 
The share of minorities in those positions has risen to 16 % from 12 % ... . 
Per-capita personal income in the U.S. grew faster than inflation last year , according to the Bureau of Economic Analysis . 
The amount of income divvied up for each man , woman and child was $ 16,489 in 1988 , up 6.6 % from $ 15,472 in 1987 . 
Per capita personal income ranged from $ 11,116 in Mississippi to $ 23,059 in Connecticut ... . 
There are 13.1 million students in college this fall , up 2 % from 1988 , the National Center for Education Statistics estimates . 
About 54 % are women , and 44 % are part-time students . 
This small Dallas suburb 's got trouble . 
Trouble with a capital T and that rhymes with P and that stands for pool . 
More than 30 years ago , Prof. Harold Hill , the con man in Meredith Willson 's `` The Music Man , '' warned the citizens of River City , Iowa , against the game . 
Now kindred spirits on Addison 's town council have barred the town 's fanciest hotel , the Grand Kempinski , from installing three free pool tables in its new lounge . 
Mayor Lynn Spruill and two members of the council said they were worried about setting a precedent that would permit pool halls along Addison 's main street . 
And the mayor , in an admonition that bears a rhythmic resemblance to Prof. Hill 's , warned that `` alcohol leads to betting , which leads to fights . 
'' The council 's action is yet another blow to a sport that its fans claim has been maligned unjustly for years . 
`` Obviously they 're not in touch with what 's going on , '' says Tom Manske , vice president of the National Pocket Billiards Association . 
Pool is hot in New York and Chicago , he insists , where `` upscale , suit-and-tie places '' are adding tables . 
With today 's tougher drunk driving laws , he adds , `` people do n't want to just sit around and drink . 
'' Besides , rowdy behavior seems unlikely at the Grand Kempinski , where rooms average $ 200 a night and the cheap mixed drinks go for $ 3.50 a pop . 
At the lounge , manager Elizabeth Dyer wo n't admit patrons in jeans , T-shirts or tennis shoes . 
But a majority of the Addison council did n't buy those arguments . 
Introducing pool , argued Councilwoman Riley Reinker , would be `` dangerous . 
It would open a can of worms . 
'' Addison is no stranger to cans of worms , either . 
After its previous mayor committed suicide last year , an investigation disclosed that town officials regularly voted on their own projects , gave special favors to developer friends and dipped into the town 's coffers for trips and retreats . 
The revelations embarrassed town officials , although they argued that the problems were n't as severe as the media suggested . 
Now comes the pool flap . 
`` I think there 's some people worried about something pretty ridiculous , '' Councilman John Nolan says . 
`` I thought this was all taken care of in ` The Music Man . 
' '' The only thing Robert Goldberg could praise about CBS 's new show `` Island Son '' ( Leisure & Arts , Sept. 25 ) was the local color ; unfortunately neither he nor the producers of the show have done their homework . 
For instance : `` Haole '' ( white ) is not the ultimate insult ; `` Mainland haole '' is . 
Richard Chamberlain dresses as a `` Mainland haole , '' tucking in a Hawaiian shirt and rolling up its long sleeves . 
And the local expression for brother is `` brah , '' not `` bruddah . 
'' And even if a nurse would wear flowers in her hair while on duty , if she were engaged she would know to wear them behind her left , not right , ear . 
Sorry , the show does not even have the one redeeming quality of genuine local color . 
Anita Davis Austin , Texas Of all the ethnic tensions in America , which is the most troublesome right now ? A good bet would be the tension between blacks and Jews in New York City . 
Or so it must seem to Jackie Mason , the veteran Jewish comedian appearing in a new ABC sitcom airing on Tuesday nights ( 9:30-10 p.m. EDT ) . 
Not only is Mr. Mason the star of `` Chicken Soup , '' he 's also the inheritor of a comedic tradition dating back to `` Duck Soup , '' and he 's currently a man in hot water . 
Here , in neutral language , is the gist of Mr. Mason 's remarks , quoted first in the Village Voice while he was a paid spokesman for the Rudolph Giuliani mayoral campaign , and then in Newsweek after he and the campaign parted company . 
Mr. Mason said that many Jewish voters feel guilty toward blacks , so they support black candidates uncritically . 
He said that many black voters feel bitter about racial discrimination , so they , too , support black candidates uncritically . 
He said that Jews have contributed more to black causes over the years than vice versa . 
Of course , Mr. Mason did not use neutral language . 
As a practitioner of ethnic humor from the old days on the Borscht Belt , live television and the nightclub circuit , Mr. Mason instinctively reached for the vernacular . 
He said Jews were `` sick with complexes '' ; and he called David Dinkins , Mr. Giuliani 's black opponent , `` a fancy shvartze with a mustache . 
'' If Mr. Mason had used less derogatory language to articulate his amateur analysis of the voting behavior of his fellow New Yorkers , would the water be quite so hot ? It probably would , because few or none of the people upset by Mr. Mason 's remarks have bothered to distinguish between the substance of his comments and the fact that he used insulting language . 
In addition , some of Mr. Mason 's critics have implied that his type of ethnic humor is itself a form of racism . 
For example , the New York state counsel for the NAACP said that Mr. Mason is `` like a dinosaur . 
People are fast leaving the place where he is stuck . 
'' These critics fail to distinguish between the type of ethnic humor that aims at disparaging another group , such as `` Polish jokes '' ; and the type that is double-edged , aiming inward as well as outward . 
The latter typically is the humor of the underdog , and it was perfected by both blacks and Jews on the minstrel and vaudeville stage as a means of mocking their white and gentile audiences along with themselves . 
In the hands of a zealot like Lenny Bruce , this double-edged blade could cut both the self and the audience to ribbons . 
But wielded by a pro like Jackie Mason , it is a constructive form of mischief . 
Why constructive ? Because despite all the media prattle about comedy and politics not mixing , they are similar in one respect : Both can serve as mechanisms for easing tensions and facilitating the co-existence of groups in conflict . 
That 's why it 's dangerous to have well-intentioned thought police , on college campuses and elsewhere , taboo all critical mention of group differences . 
As Elizabeth Kristol wrote in the New York Times just before the Mason donnybrook , `` Perhaps intolerance would not boil over with such intensity if honest differences were allowed to simmer . 
'' The question is , if group conflicts still exist ( as undeniably they do ) , and if Mr. Mason 's type of ethnic humor is passe , then what other means do we have for letting off steam ? Do n't say the TV sitcom , because that happens to be a genre that , in its desperate need to attract everybody and offend nobody , resembles politics more than it does comedy . 
It is true that the best sitcoms do allow group differences to simmer : yuppies vs. blue-collar Bostonians in `` Cheers '' ; children vs. adults in `` The Cosby Show . 
'' But these are not the differences that make headlines . 
In `` Chicken Soup , '' Mr. Mason plays Jackie , a Jewish bachelor courting Maddie ( Lynn Redgrave ) , an Irish widow and mother of three , against the wishes of his mother ( Rita Karin ) and her brother Michael ( Brandon Maggart ) . 
It 's worth noting that both disapproving relatives are immigrants . 
At least , they both speak with strong accents , as do Jackie and Maddie . 
It could n't be more obvious that `` Chicken Soup '' is being made from an old recipe . 
And a safe one -- imagine if the romance in question were between an Orthodox Jew and a member of the Nation of Islam . 
Back in the 1920s , the play and movie versions of `` Abie 's Irish Rose '' made the theme of courtship between the assimilated offspring of Jewish and Irish immigrants so popular that its author , Anne Nichols , lost a plagiarism suit on the grounds that the plot has entered the public domain . 
And it has remained there , as evidenced by its reappearance in a 1972 CBS sitcom called `` Bridget Loves Bernie , '' whose sole distinction was that it led to the real-life marriage of Meredith Baxter and David Birney . 
Clearly , the question with `` Chicken Soup '' is not whether the pot will boil over , but whether it will simmer at all . 
So far , the bubbles have been few and far between . 
Part of the problem is the tendency of all sitcoms , ever since the didactic days of Norman Lear , to preach about social issues . 
To some extent , this tendency emerges whenever the show tries to enlighten us about ethnic stereotypes by reversing them . 
For instance , Michael dislikes Jackie not because he 's a shrewd Jewish businessman , but because he quits his well-paying job as a salesman in order to become a social worker . 
Even more problematic is the incompatibility between sitcom preachiness and Mr. Mason 's comic persona . 
The best moments in the show occur at the beginning and the end ( and occasionally in the middle ) , when Mr. Mason slips into his standup mode and starts meting out that old-fashioned Jewish mischief to other people as well as to himself . 
But too often , these routines lack spark because this sitcom , like all sitcoms , is timid about confronting Mr. Mason 's stock in trade - ethnic differences . 
I 'm not suggesting that the producers start putting together episodes about topics like the Catholic-Jewish dispute over the Carmelite convent at Auschwitz . 
That issue , like racial tensions in New York City , will have to cool down , not heat up , before it can simmer . 
But I am suggesting that they stop requiring Mr. Mason to interrupt his classic shtik with some line about `` caring for other people '' that would sound shmaltzy on the lips of Miss America . 
At your age , Jackie , you ought to know that you ca n't make soup without turning up the flame . 
The official White House reaction to a plunge in stock prices has a 60-year history of calm , right up through Friday . 
Treasury Secretary Nicholas Brady said in a statement Friday that the stock-market decline `` does n't signal any fundamental change in the condition of the economy . 
'' `` The economy , '' he added , `` remains well-balanced and the outlook is for continued moderate growth . 
'' Sound familiar ? Here 's what Ronald Reagan said after the 1987 crash : `` The underlying economy remains sound . 
There is nothing wrong with the economy ... all the indices are up . 
'' Heard that before ? After the 1929 crash , Herbert Hoover said : `` The fundamental business of the country ... is on a sound and prosperous basis . 
'' James Robinson , 57 years old , was elected president and chief executive officer of this maker of magnetic recording heads for disk drives . 
He has been president and chief executive officer of Amperex Electronics Corp. , a division of North American Philips Corp. , itself a subsidiary of N.V . 
Philips of the Netherlands . 
Charles J. Lawson Jr. , 68 , who had been acting chief executive since June 14 , will continue as chairman . 
The former president and chief executive , Eric W. Markrud , resigned in June . 
The Senate 's decision to approve a bare-bones deficit-reduction bill without a capital-gains tax cut still leaves open the possibility of enacting a gains tax reduction this year . 
Late Friday night , the Senate voted 87-7 to approve an estimated $ 13.5 billion measure that had been stripped of hundreds of provisions that would have widened , rather than narrowed , the federal budget deficit . 
Lawmakers drastically streamlined the bill to blunt criticism that it was bloated with special-interest tax breaks and spending increases . 
`` We 're putting a deficit-reduction bill back in the category of being a deficit-reduction bill , '' said Senate Budget Committee Chairman James Sasser ( D. , Tenn . 
) . 
But Senate supporters of the trimmer legislation said that other bills would soon be moving through Congress that could carry some of the measures that had been cast aside , including a capital-gains tax cut . 
In addition , the companion deficit-reduction bill already passed by the House includes a capital-gains provision . 
House-Senate negotiations are likely to begin at midweek and last for a while . 
`` No one can predict exactly what will happen on the House side , '' said Senate Minority Leader Robert Dole ( R. , Kan . 
) . 
But , he added , `` I believe Republicans and Democrats will work together to get capital-gains reform this year . 
'' White House Budget Director Richard Darman told reporters yesterday that the administration would n't push to keep the capital-gains cut in the final version of the bill . 
`` We do n't need this as a way to get capital gains , '' he said . 
House Budget Committee Chairman Leon Panetta ( D. , Calif . 
) said in an interview , `` If that 's the signal that comes from the White House , that will help a great deal . 
'' The Senate 's decision was a setback for President Bush and will make approval of a capital-gains tax cut less certain this year . 
Opponents of the cut are playing hardball . 
Senate Majority Leader George Mitchell ( D. , Maine ) said he was `` confident '' that any House-Senate agreement on the deficit-reduction legislation would n't include a capital-gains tax cut . 
And a senior aide to the House Ways and Means Committee , where tax legislation originates , said there are n't any `` plans to produce another tax bill that could carry a gains tax cut this year . 
'' One obvious place to attach a capital-gains tax cut , and perhaps other popular items stripped from the deficit-reduction bill , is the legislation to raise the federal borrowing limit . 
Such legislation must be enacted by the end of the month . 
The Senate bill was pared back in an attempt to speed deficit-reduction through Congress . 
Because the legislation has n't been completed , President Bush has until midnight tonight to enact across-the-board spending cuts mandated by the Gramm-Rudman deficit-reduction law . 
Senators hope that the need to avoid those cuts will pressure the House to agree to the streamlined bill . 
The House appears reluctant to join the senators . 
A key is whether House Republicans are willing to acquiesce to their Senate colleagues ' decision to drop many pet provisions . 
`` Although I am encouraged by the Senate action , '' said Chairman Dan Rostenkowski ( D. , Ill . 
) of the House Ways and Means Committee , `` it is uncertain whether a clean bill can be achieved in the upcoming conference with the Senate . 
'' Another big question hovering over the debate is what President Bush thinks . 
He has been resisting a stripped-down bill without a guaranteed vote on his capital-gains tax cut . 
But Republican senators saw no way to overcome a procedural hurdle and garner the 60 votes needed to win the capital-gains issue on the floor , so they went ahead with the streamlined bill . 
The Senate bill was stripped of many popular , though revenue-losing , provisions , a number of which are included in the House-passed bill . 
These include a child-care initiative and extensions of soon-to-expire tax breaks for low-income housing and research-and-development expenditures . 
Also missing from the Senate bill is the House 's repeal of a law , called Section 89 , that compels companies to give rank-and-file workers comparable health benefits to top paid executives . 
One high-profile provision that was originally in the Senate bill but was cut out because it lost money was the proposal by Chairman Lloyd Bentsen ( D. , Texas ) of the Senate Finance Committee to expand the deduction for individual retirement accounts . 
Mr. Bentsen said he hopes the Senate will consider that measure soon . 
To the delight of some doctors , the bill dropped a plan passed by the Finance Committee that would have overhauled the entire physician-reimbursement system under Medicare . 
To the detriment of many low-income people , efforts to boost Medicaid funding , especially in rural areas , also were stricken . 
Asked why senators were giving up so much , New Mexico Sen. Pete Domenici , the ranking Republican on the Senate Budget Committee , said , `` We 're looking like idiots . 
Things had just gone too far . 
'' Sen. Dole said that the move required sacrifice by every senator . 
It worked , others said , because there were no exceptions : all revenue-losing provisions were stricken . 
The Senate also dropped a plan by its Finance Committee that would have increased the income threshold beyond which senior citizens have their Social Security benefits reduced . 
In addition , the bill dropped a plan to make permanent a 3 % excise tax on long-distance telephone calls . 
It no longer includes a plan that would have repealed what remains of the completed-contract method of accounting , which is used by military contractors to reduce their tax burden . 
It also drops a provision that would have permitted corporations to use excess pension funds to pay health benefits for current retirees . 
Also stricken was a fivefold increase in the maximum Occupational Safety and Health Administration penalties , which would have raised $ 65 million in fiscal 1990 . 
A provision that would have made the Social Security Administration an independent agency was excised . 
The approval of the Senate bill was especially sweet for Sen. Mitchell , who had proposed the streamlining . 
Mr. Mitchell 's relations with Budget Director Darman , who pushed for a capital-gains cut to be added to the measure , have been strained since Mr. Darman chose to bypass the Maine Democrat and deal with other lawmakers earlier this year during a dispute over drug funding in the fiscal 1989 supplemental spending bill . 
The deficit reduction bill contains $ 5.3 billion in tax increases in fiscal 1990 , and $ 26 billion over five years . 
The revenue-raising provisions , which affect mostly corporations , would : -- Prevent companies that have made leveraged buy-outs from getting federal tax refunds resulting from losses caused by interest payments on debt issued to finance the buy-outs , effective Aug. 2 , 1989 . 
-- Require mutual funds to include in their taxable income dividends paid to them on the date that the dividends are declared rather than received , effective the day after the tax bill is enacted . 
-- Close a loophole regarding employee stock ownership plans , effective June 6 , 1989 , that has been exploited by investment bankers in corporate takeovers . 
The measure repeals a 50 % exclusion given to banks on the interest from loans used to acquire securities for an ESOP , if the ESOP owns less than 30 % of the employer 's stock . 
-- Curb junk bonds by ending tax benefits for certain securities , such as zero-coupon bonds , that postpone cash interest payments . 
-- Raise $ 851 million by suspending for one year an automatic reduction in airport and airway taxes . 
-- Speed up the collection of the payroll tax from large companies , effective August 1990 . 
-- Impose a tax on ozone-depleting chemicals , such as those used in air conditioners and in Styrofoam , beginning at $ 1.10 a pound starting next year . 
-- Withhold income taxes from the paychecks of certain farm workers currently exempt from withholding . 
-- Change the collection of gasoline excise taxes to weekly from semimonthly , effective next year . 
-- Restrict the ability of real estate owners to escape taxes by swapping one piece of property for another instead of selling it for cash . 
-- Increase to $ 6 a person from $ 3 the international air-passenger departure tax , and impose a $ 3-a-person tax on international departures by commercial ships . 
The measure also includes spending cuts and increases in federal fees . 
Among its provisions : -- Reduction of Medicare spending in fiscal 1990 by some $ 2.8 billion , in part by curbing increases in reimbursements to physicians . 
The plan would impose a brief freeze on physician fees next year . 
-- Removal of the U.S. Postal Service 's operating budget from the federal budget , reducing the deficit by $ 1.77 billion . 
A similar provision is in the House version . 
-- Authority for the Federal Aviation Administration to raise $ 239 million by charging fees for commercial airline-landing rights at New York 's LaGuardia and John F. Kennedy International Airports , O'Hare International Airport in Chicago and National Airport in Washington . 
-- Increases in Nuclear Regulatory Commission fees totaling $ 54 million . 
-- Direction to the U.S. Coast Guard to collect $ 50 million from users of Coast Guard services . 
-- Raising an additional $ 43 million by increasing existing Federal Communications Commission fees and penalties and establishing new fees for amateur radio operators , ship stations and mobile radio facilities . 
John E. Yang contributed to this article . 
In response to your overly optimistic , outdated piece on how long unemployment lasts ( People Patterns , Sept. 20 ) : I am in the communications field , above entry level . 
I was laid off in August 1988 , and after a thorough and exhausting job search , was hired in August 1989 . 
My unemployment insurance ran out before I found a job ; I found cutbacks and layoffs in many companies . 
The statistics quoted by the `` new '' Census Bureau report ( garnered from 1984 to 1986 ) are out of date , certainly as an average for the Northeast , and possibly for the rest of the country . 
I think what bothered me most about the piece was that there seemed to be an underlying attitude to tell your readers all is well -- if you 're getting laid off do n't worry , and if you 're unemployed , it 's a seller 's market . 
To top it off , you captioned the graph showing the average number of months in a job search as `` Time Off . 
'' Are you kidding ? Looking for a job was one of the most anxious periods of my life -- and is for most people . 
Your paper needs a serious reality check . 
Reva Levin Cambridge , Mass . 
BULL HN INFORMATION SYSTEMS Inc. is a U.S. majority-owned unit of Cie. des Machines Bull . 
In Friday 's edition , the name of the unit was misstated . 
( See : `` Bull 's Chairman to Use U.S. Acquisitions to Lift Computer Maker 's World Stature '' -- WSJ Oct. 13 , 1989 ) Moody 's Investors Service said it reduced its rating on $ 165 million of subordinated debt of this Beverly Hills , Calif. , thrift , citing turmoil in the market for low-grade , high-yield securities . 
The agency said it reduced its rating on the thrift 's subordinated debt to B-2 from Ba-2 and will keep the debt under review for possible further downgrade . 
Columbia Savings is a major holder of so-called junk bonds . 
New federal legislation requires that all thrifts divest themselves of such speculative securities over a period of years . 
Columbia Savings officials were n't available for comment on the downgrade . 
FRANKLIN SAVINGS ASSOCIATION ( Ottawa , Kan. ) -- Moody 's Investors Service Inc. said it downgraded its rating to B-2 from Ba-3 on less than $ 20 million of this thrift 's senior subordinated notes . 
The rating concern said Franklin 's `` troubled diversification record in the securities business '' was one reason for the downgrade , citing the troubles at its L.F. Rothschild subsidiary and the possible sale of other subsidiaries . 
`` They perhaps had concern that we were getting out of all these , '' said Franklin President Duane H. Hall . 
`` I think it was a little premature on their part . 
'' Just when it seemed safe to go back into stocks , Wall Street suffered another severe attack of nerves . 
Does this signal another Black Monday is coming ? Or is this an extraordinary buying opportunity , just like Oct. 19 , 1987 , eventually turned out to be ? Here 's what several leading market experts and money managers say about Friday 's action , what happens next and what investors should do . 
Joseph Granville . 
`` I 'm the only one who said there would be an October massacre , all through late August and September , '' says Mr. Granville , once a widely followed market guru and still a well-known newsletter writer . 
`` Everyone will tell you that this time is different from 1987 , '' he says . 
`` Well , in some ways it is different , but technically it is just the same . 
If you 're a technician , you obey the signals . 
Right now they 're telling me to get the hell out and stay out . 
I see no major support until 2200 . 
I see a possibility of going to 2200 this month . 
'' Mr. Granville says he would n't even think of buying until at least 600 to 700 stocks have hit 52-week lows ; about 100 stocks hit new lows Friday . 
`` Most people , '' he says , `` have no idea what a massacre pattern looks like . 
'' Elaine Garzarelli . 
A quantitative analyst with Shearson Lehman Hutton Inc. , Ms. Garzarelli had warned clients to take their money out of the market before the 1987 crash . 
Friday 's big drop , she says , `` was not a crash . 
This was an October massacre '' like those that occurred in 1978 and 1979 . 
Now , as in those two years , her stock market indicators are positive . 
So she thinks the damage will be short-lived and contained . 
`` Those corrections lasted one to four weeks and took the market 10%-12 % down , '' she says . 
`` This is exactly the same thing , as far as I 'm concerned . 
'' Thus , she says , if the Dow Jones Industrial Average dropped below 2450 , `` It would just be a fluke . 
My advice is to buy . 
'' As she calculates it , the average stock now sells for about 12.5 times companies ' earnings . 
She says that ratio could climb to 14.5 , given current interest rates , and still be within the range of `` fair value . 
'' Ned Davis . 
Friday 's fall marks the start of a bear market , says Mr. Davis , president of Ned Davis Research Inc . 
But Mr. Davis , whose views are widely respected by money managers , says he expects no 1987-style crash . 
`` There was a unique combination in 1987 , '' he says . 
`` Margin debt was at a record high . 
There was tremendous public enthusiasm for stock mutual funds . 
The main thing was portfolio insurance , '' a mechanical trading system intended to protect an investor against losses . 
`` A hundred billion dollars in stock was subject '' to it . 
In 1987 , such selling contributed to a snowball effect . 
Today could even be an up day , Mr. Davis says , if major brokerage firms agree to refrain from program trading . 
Over the next several months , though , he says things look bad . 
`` I think the market will be heading down into November , '' he says . 
`` We will probably have a year-end rally , and then go down again . 
Sort of a two-step bear market . 
'' He expects the downturn to carry the Dow Jones Industrial Average down to around 2000 sometime next year . 
`` That would be a normal bear market , '' he says . 
`` I guess that 's my forecast . 
'' Leon G. Cooperman . 
`` I do n't think the market is going through another October '87 . 
I do n't think that 's the case at all , '' says Mr. Cooperman , a partner at Goldman , Sachs & Co. and chairman of Goldman Sachs Asset Management . 
Mr. Cooperman sees this as a good time to pick up bargains , but he does n't think there 's any need to rush . 
`` I expect the market to open weaker Monday , but then it should find some stability . 
'' He ticks off several major differences between now and two years ago . 
Unlike 1987 , interest rates have been falling this year . 
Unlike 1987 , the dollar has been strong . 
And unlike 1987 , the economy does n't appear to be in any danger of overheating . 
But the economy 's slower growth this year also means the outlook for corporate profits `` is n't good , '' he says . 
`` So it 's a very mixed bag . 
'' Thus , he concludes , `` This is not a good environment to be fully invested '' in stocks . 
`` If I had come into Friday on margin or with very little cash in the portfolios , I would not do any buying . 
But we came into Friday with a conservative portfolio , so I would look to do some modest buying '' on behalf of clients . 
`` We 're going to look for some of the better-known companies that got clocked '' Friday . 
John Kenneth Galbraith . 
`` This is the latest manifestation of the capacity of the financial community for recurrent insanity , '' says Mr. Galbraith , an economist . 
`` I see this as a reaction to the whole junk bond explosion , '' he says . 
`` The explosion of junk bonds and takeovers has lodged a lot of insecure securities in the hands of investors and loaded the corporations that are the objects of takeovers or feared takeovers with huge amounts of debt rather than equity . 
This has both made investors uneasy and the corporations more vulnerable . 
'' Nevertheless , he says a depression does n't appear likely . 
`` There is more resiliency in the economy at large than we commonly suppose , '' he says . 
`` It takes more error now to have a major depression than back in the Thirties -- much as the financial community and the government may try . 
'' Mario Gabelli . 
New York money manager Mario Gabelli , an expert at spotting takeover candidates , says that takeovers are n't totally gone . 
`` Companies are still going to buy companies around the world , '' he says . 
Examples are `` Ford looking at Jaguar , BellSouth looking at LIN Broadcasting . 
'' These sorts of takeovers do n't require junk bonds or big bank loans to finance them , so Mr. Gabelli figures they will continue . 
`` The market was up 35 % since { President } Bush took office , '' Mr. Gabelli says , so a correction was to be expected . 
He thinks another crash is `` unlikely , '' and says he was `` nibbling at '' selected stocks during Friday 's plunge . 
`` Stocks that were thrown out just on an emotional basis are a great opportunity { this } week for guys like me , '' he says . 
Jim Rogers . 
`` It seems to me that this is the pin that has finally pricked the balloon , '' says Mr. Rogers , a professor of finance at Columbia University and former co-manager of one of the most successful hedge funds in history , Quantum Fund . 
He sees `` economic problems , financial problems '' ahead for the U.S. , with a fairly strong possibility of a recession . 
`` Friday you could n't sell dollars , '' he says . 
Dealers `` would give you a quote , but then refuse to make the trade . 
'' If the dollar stays weak , he says , that will add to inflationary pressures in the U.S. and make it hard for the Federal Reserve Board to ease interest rates very much . 
Mr. Rogers wo n't decide what to do today until he sees how the London and Tokyo markets go . 
He recommends that investors sell takeover-related stocks , but hang on to some other stocks -- especially utilities , which often do well during periods of economic weakness . 
Frank Curzio . 
Many people now claim to have predicted the 1987 crash . 
Queens newsletter writer Francis X. Curzio actually did it : He stated in writing in September 1987 that the Dow Jones Industrial Average was likely to decline about 500 points the following month . 
Mr. Curzio says what happens now will depend a good deal on the Federal Reserve Board . 
If it promptly cuts the discount rate it charges on loans to banks , he says , `` That could quiet things down . 
'' If not , `` We could go to 2200 very soon . 
'' Frank W. Terrizzi . 
Stock prices `` would still have to go down some additional amount before we become positive on stocks , '' says Mr. Terrizzi , president and managing director of Renaissance Investment Management Inc. in Cincinnati . 
Renaissance , which manages about $ 1.8 billion , drew stiff criticism from many clients earlier this year because it pulled entirely out of stocks at the beginning of the year and thus missed a strong rally . 
Renaissance is keeping its money entirely in cash equivalents , primarily U.S. Treasury bills . 
`` T-bills probably are the right place to be , '' he says . 
( See related story : `` Your Money Matters : Unloading Stocks Worst Step to Take '' -- WSJ Oct. 16 , 1989 ) Regarding the Oct. 3 letter to the editor from Rep. Tom Lantos , chairman of the House Subcommittee on Employment and Housing , alleging : 1 . 
That your Sept. 28 editorial `` Kangaroo Committees '' was factually inaccurate and deliberately misleading . 
I thought your editorial was factually accurate and deliberately elucidative . 
2 . 
That Mr. Lantos supported the rights of the witnesses to take the Fifth Amendment . 
Yes , he did . 
As I watched him on C-Span , I heard him speak those lovely words about the Bill of Rights , which he quotes from the transcript of the hearings . 
He did repeat those nice platitudes several times as an indication of his support for the Constitution . 
He used about 56 words defending the witnesses ' constitutional rights . 
Unfortunately , by my rough guess , he used better than 5,000 words heaping scorn on the witnesses for exercising the Fifth . 
He sandwiched his praise of constitutional meat between large loaves of bilious commentary . 
As your editorial rightly pointed out , Samuel Pierce , former HUD secretary , and Lance Wilson , Mr. Pierce 's former aide , `` are currently being held up to scorn for taking the Fifth Amendment . 
'' That certainly is not the supposed `` distorted reading '' indicated by Mr. Lantos . 
3 . 
That his `` committee does not deal with any possible criminal activity at HUD . 
My colleagues and I fully realize we are not a court ... etc . 
'' Absolute rubbish . 
By any `` reasonable man '' criterion , Mr. Lantos and his colleagues have a whole bunch of people tried and convicted . 
Apparently , their verdict is in . 
Right now they 're pursuing evidence . 
That 's not a bad way to proceed , just somewhat different from standard American practice . 
How was that practice referred to when I was in school ? Ah , yes , something called a Star Chamber . 
Of course , Mr. Lantos doth protest that his subcommittee simply seeks information for legislative change . 
No doubt that 's partially true . 
Everything that Mr. Lantos says in his letter is partially true . 
He 's right about his subcommittee 's responsibilities when it comes to obtaining information from prior HUD officials . 
But if his explanation of motivation is true , why is his investigation so oriented as to identify criminal activity ? Why not simply questions designed to identify sources and causes of waste and inefficiency ? Such as , what happened when Congress wanted to know about $ 400 toilet seats or whatever they supposedly cost ? No , Mr. Lantos 's complaints simply wo n't wash . 
4 . 
That the Journal defends `` the sleaze , fraud , waste , embezzlement , influence-peddling and abuse of the public that took place while Mr. Pierce was secretary of HUD , '' etc. and so forth . 
No , to my mind , the Journal did not `` defend sleaze , fraud , waste , embezzlement , influence-peddling and abuse of the public trust ... '' it defended appropriate constitutional safeguards and practical common sense . 
The problem , which the Journal so rightly pointed out in a number of articles , is not the likes of Mr. Lantos , who after all is really a bit player on the stage , but the attempt by Congress to enhance itself into a quasi-parliamentary\judicial body . 
( Of course , we 've also got a judiciary that seeks the same objective . 
) The system is the problem , not an individual member . 
Individuals can always have their hands slapped . 
It 's when such slapping does n't occur that we 've got trouble . 
I do not by any means defend HUD management . 
But I think the kind of congressional investigation that has been pursued is a far greater danger to American notions of liberty and freedom than any incompetency ( and , yes , maybe criminality ) within HUD could possibly generate . 
The last time I saw a similar congressional hearing was when `` Tail Gunner Joe '' McCarthy did his work . 
Raymond Weber Parsippany , N.J . 
I disagree with the statement by Mr. Lantos that one should not draw an adverse inference against former HUD officials who assert their Fifth Amendment privilege against self-incrimination in congressional hearings . 
The Fifth Amendment states in relevant part that no person `` shall be compelled , in any criminal case , to be a witness against himself . 
'' This privilege against self-incrimination precludes the drawing of an adverse inference against a criminal defendant who chooses not to testify . 
Thus , in a criminal case , a prosecutor can not comment on a defendant 's failure to testify nor can the defendant be compelled to take the stand as a witness , thus forcing him to `` take the Fifth . 
'' The privilege , however , has been limited in accordance with its plain language to protect the defendant in criminal matters only . 
The Supreme Court and some states have specifically recognized that `` the Fifth Amendment does not preclude the inference where the privilege is claimed by a party to a civil cause . 
'' Baxter v. Palmingiano , 425 U.S. 308 ( 1976 ) . 
Thus , in a civil case , a defendant may be called as a witness , he may be forced to testify or take the Fifth , and his taking of the Fifth may permit the drawing of an adverse inference against him in the civil matter . 
He may take the Fifth in a civil matter only if he has a good faith and justifiable belief that his testimony may subject him to criminal prosecution . 
Allowing the defendant to take the Fifth in a civil matter is not based on a constitutional right to refuse to testify where one 's testimony harms him in the civil matter , but because the testimony in the civil matter could be unconstitutionally used against him in a subsequent criminal prosecution . 
Absent the risk of such prosecution , a court may order the defendant to testify . 
Thus , when Mr. Pierce asserted the Fifth in a noncriminal proceeding , particularly after presumably receiving extensive advice from legal counsel , one must conclude that he held a good-faith , justifiable belief that his testimony could be used against him in a subsequent criminal prosecution . 
The subcommittee , Congress and the American public have every right to draw the adverse inference and to concur with Mr. Pierce 's own belief that his testimony could help convict him of a crime . 
Drawing the adverse inference in a noncriminal congressional hearing does not offend the Fifth Amendment shield against self-incrimination . 
Clark S. Spalsbury Jr . 
Estes Park , Colo . 
It was Friday the 13th , and the stock market plummeted nearly 200 points . 
Just a coincidence ? Or is triskaidekaphobia -- fear of the number 13 -- justified ? In academia , a so-called Friday the 13th effect has been set up and shot down by different professors . 
Robert Kolb and Ricardo Rodriguez , professors of finance at the University of Miami , found evidence that the market is spooked by Friday the 13th . 
But their study , which spanned the 1962-85 period , has since been shown to be jinxed by an unlucky choice of data . 
In the '70s , the market took falls nine times in a row on Friday the you-know-what . 
But the date tends to be a plus , not a minus , for stocks , according to Yale Hirsch , a collector of stock market lore . 
Another study found that the 82 Fridays the 13th in the 1940-1987 period had higher than average returns -- higher even than Fridays in general , which tend to be strong days for stock prices . 
On the only other Friday the 13th this year , the Dow Jones Industrial Average rose about four points . 
Professor Kolb says the original study , titled Friday the 13th , Part VII , was published tongue-in-cheek . 
In a similar vein , he adds that the anniversary of the 1987 crash and Saturday 's full moon could have played a part , too , in Friday 's market activity . 
reminiscent of those during the 1987 crash -- that as stock prices plummeted and trading activity escalated , some phone calls to market makers in over-the-counter stocks went unanswered . 
`` We could n't get dealers to answer their phones , '' said Robert King , senior vice president of OTC trading at Robinson-Humphrey Co. in Atlanta . 
`` It was { like } the Friday before Black Monday '' two years ago . 
Whether unanswered phone calls had any effect or not , Nasdaq stocks sank far less than those on the New York and American exchanges . 
Nonetheless , the Nasdaq Composite Index suffered its biggest point decline of the year and its sixth worst ever , diving 14.90 , or 3 % , to 467.29 . 
Ten points of the drop occurred during the last 45 minutes of trading . 
By comparison , the New York Stock Exchange Composite tumbled 5.8 % Friday and the American Stock Exchange Composite fell 4 % . 
On Oct. 16 , 1987 , the Nasdaq Composite fell 16.18 points , or 3.8 % , followed by its devastating 46.12-point , or 11 % slide , three days later . 
Nasdaq volume Friday totaled 167.7 million shares , which was only the fifth busiest day so far this year . 
The single-day record of 288 million shares was set on Oct. 21 , `` There was n't a lot of volume because it was just impossible to get stock moved , '' said E.E. `` Buzzy '' Geduld , president of Herzog , Heine , Geduld , a New York company that makes markets in thousands of OTC issues . 
Most of the complaints about unanswered phone calls came from regional brokers rather than individual investors . 
Mr. King of Robinson-Humphrey and others were quick to add that they believe the problem stemmed more from traders ' inability to handle the volume of calls , rather than a deliberate attempt to avoid making trades . 
The subject is a sore one for Nasdaq and its market-making companies , which were widely criticized two years ago following complaints from investors who could n't reach their brokers or trade in the chaos of the crash . 
Peter DaPuzzo , head of retail equity trading at Shearson Lehman Hutton , declared : `` It was the last hour of trading on a Friday . 
There were too many phones ringing and too many things happening to expect market makers to be as efficient as robots . 
It was n't intentional , we were all busy . 
'' James Tarantino , head of OTC trading at Hambrecht & Quist in San Francisco , said , `` It was just like two years ago . 
Everybody was trying to do the same thing at the same time . 
'' Jeremiah Mullins , the OTC trading chief at Dean Witter Reynolds in New York , said proudly that his company executed every order it received by the close of trading . 
But , he added , `` you can only take one call at a time . 
'' Market makers keep supplies of stock on hand to maintain orderly trading when imbalances occur . 
On days like Friday , that means they must buy shares from sellers when no one else is willing to . 
When selling is so frenzied , prices fall steeply and fast . 
Two years ago , faced with the possibility of heavy losses on the stocks in their inventories , market makers themselves began dumping shares , exacerbating the slide in OTC stock prices . 
On Friday , some market makers were selling again , traders said . 
But , with profits sagging on Wall Street since the crash , companies have kept smaller share stockpiles on hand . 
Mr. Tarantino of Hambrecht & Quist said some prices fell without trades taking place , as market makers kept dropping the prices at which they would buy shares . 
`` Everyone was hitting everyone else 's bid , '' he said . 
So , while OTC companies incurred losses on Friday , trading officials said the damage was n't as bad as it was in 1987 . 
`` Two years ago we were carrying huge inventories and that was the big culprit . 
I do n't know of anyone carrying big inventories now , '' said Mr. King of Robinson-Humphrey . 
Tony Cecin , head of equity trading at Piper , Jaffray & Hopwood in Minneapolis , said that Piper Jaffray actually made money on Friday . 
It helped that his inventory is a third smaller now than it was two years ago , he said . 
Joseph Hardiman , president of the National Association of Securities Dealers , which oversees the Nasdaq computerized trading system , said that despite the rush of selling , he never considered the situation an `` emergency . 
'' `` The pace of trading was orderly , '' he said . 
Nasdaq 's Small Order Execution System `` worked beautifully , '' as did the automated system for larger trades , according to Mr. Hardiman . 
Nevertheless , the shock of another steep plunge in stock prices undoubtedly will shake many investors ' confidence . 
In the past , the OTC market thrived on a firm base of small-investor participation . 
Because Nasdaq 's trading volume has n't returned to pre-crash levels , traders and OTC market officials hope the damage wo n't be permanent . 
But they are worried . 
`` We were just starting to get the public 's confidence back , '' lamented Mr. Mullins of Dean Witter . 
More troubling is the prospect that the overall collapse in stock prices could permanently erode the base of small-investor support the OTC market was struggling to rebuild in the wake of the October 1987 crash . 
Mr. Cecin of Piper Jaffray says some action from government policy makers would allay investor fears . 
It wo n't take much more to `` scare the hell out of retail investors , '' he says . 
The sellers on Friday came from all corners of the OTC market -- big and small institutional investors , as well as individual investors and market makers . 
But grateful traders said the sell orders generally ranged from 20,000 shares to 50,000 shares , compared with blocks of 500,000 shares or more two years ago . 
Shearson 's Mr. DaPuzzo said retail investors nervously sold stock Friday and never returned to bargain-hunt . 
Institutional investors , which had been selling stock throughout last week to lock in handsome gains made through the third quarter , were calmer . 
`` We had a good amount of selling from institutions , but not as much panic , '' Mr. DaPuzzo said . 
`` If they could n't sell , some of them put the shares back on the shelf . 
'' In addition , he said , some bigger institutional investors placed bids to buy some OTC stocks whose prices were beaten down . 
In addition , Mr. DaPuzzo said computer-guided program selling of OTC stocks in the Russell Index of 2000 small stocks and the Standard & Poor 's 500-stock Index sent occasional `` waves `` through the market . 
Nasdaq 's biggest stocks were hammered . 
The Nasdaq 100 Index of the largest nonfinancial issues , including the big OTC technology issues , tumbled 4.2 % , or 19.76 , to 449.33 . 
The Nasdaq Financial Index of giant insurance and banking stocks dropped 2 % , or 9.31 , to 462.98 . 
The OTC market has only a handful of takeover-related stocks . 
But they fell sharply . 
McCaw Cellular Communications , for instance , has offered to buy LIN Broadcasting as well as Metromedia 's New York City cellular telephone interests , and in a separate transaction , sell certain McCaw properties to Contel Cellular . 
McCaw lost 8 % , or 3 1\2 , to 40 . 
LIN Broadcasting , dropped 5 1\2 , or 5 % , to 107 1\2 . 
The turnover in both issues was roughly normal . 
On a day when negative takeover-related news did n't sit well with investors , Commercial Intertech , a maker of engineered metal parts , said Haas & Partners advised it that it does n't plan to pursue its previously reported $ 27.50-a-share bid to buy the company . 
Commercial Intertech plummeted 6 to 26 . 
The issues of companies with ties to the junk bond market also tumbled Friday . 
On the OTC market , First Executive , a big buyer of the high-risk , high-yield issues , slid 2 to 12 1\4 . 
Among other OTC issues , Intel , dropped 2 1\8 to 33 7\8 ; Laidlaw Transportation lost 1 1\8 to 19 1\2 ; the American depositary receipts of Jaguar were off 1\4 to 10 1\4 ; MCI Communications slipped 2 1\4 to 43 1\2 ; Apple Computer fell 3 to 45 3\4 and Nike dropped 2 1\4 to 66 3\4 . 
Friday , October 13 , 1989 The key U.S. and foreign annual interest rates below are a guide to general levels but do n't always represent actual transactions . 
PRIME RATE : 10 1\2 % . 
The base rate on corporate loans at large U.S. money center commercial banks . 
FEDERAL FUNDS : 8 13\16 % high , 8 1\2 % low , 8 5\8 % near closing bid , 8 3\4 % offered . 
Reserves traded among commercial banks for overnight use in amounts of $ 1 million or more . 
Source : Fulton Prebon ( U.S.A . 
) Inc . 
DISCOUNT RATE : 7 % . 
The charge on loans to depository institutions by the New York Federal Reserve Bank . 
CALL MONEY : 9 3\4 % to 10 % . 
The charge on loans to brokers on stock exchange collateral . 
COMMERCIAL PAPER placed directly by General Motors Acceptance Corp. : 8.60 % 30 to 44 days ; 8.55 % 45 to 59 days ; 8.375 % 60 to 79 days ; 8.50 % 80 to 89 days ; 8.25 % 90 to 119 days ; 8.125 % 120 to 149 days ; 8 % 150 to 179 days ; 7.625 % 180 to 270 days . 
COMMERCIAL PAPER : High-grade unsecured notes sold through dealers by major corporations in multiples of $ 1,000 : 8.65 % 30 days ; 8.55 % 60 days ; 8.55 % 90 days . 
CERTIFICATES OF DEPOSIT : 8.15 % one month ; 8.15 % two months ; 8.13 % three months ; 8.11 % six months ; 8.08 % one year . 
Average of top rates paid by major New York banks on primary new issues of negotiable C.D.s , usually on amounts of $ 1 million and more . 
The minimum unit is $ 100,000 . 
Typical rates in the secondary market : 8.65 % one month ; 8.65 % three months ; 8.55 % six months . 
BANKERS ACCEPTANCES : 8.52 % 30 days ; 8.37 % 60 days ; 8.15 % 90 days ; 7.98 % 120 days ; 7.92 % 150 days ; 7.80 % 180 days . 
Negotiable , bank-backed business credit instruments typically financing an import order . 
LONDON LATE EURODOLLARS : 8 13\16 % to 8 11\16 % one month ; 8 13\16 % to 8 11\16 % two months ; 8 13\16 % to 8 11\16 % three months ; 8 3\4 % to 8 5\8 % four months ; 8 11\16 % to 8 9\16 % five months ; 8 5\8 % to 8 1\2 % six months . 
LONDON INTERBANK OFFERED RATES ( LIBOR ) : 8 3\4 % one month ; 8 3\4 % three months ; 8 9\16 % six months ; 8 9\16 % one year . 
The average of interbank offered rates for dollar deposits in the London market based on quotations at five major banks . 
FOREIGN PRIME RATES : Canada 13.50 % ; Germany 8.50 % ; Japan 4.875 % ; Switzerland 8.50 % ; Britain 15 % . 
These rate indications are n't directly comparable ; lending practices vary widely by location . 
TREASURY BILLS : Results of the Tuesday , October 10 , 1989 , auction of short-term U.S. government bills , sold at a discount from face value in units of $ 10,000 to $ 1 million : 7.63 % 13 weeks ; 7.60 % 26 weeks . 
FEDERAL HOME LOAN MORTGAGE CORP . 
( Freddie Mac ) : Posted yields on 30-year mortgage commitments for delivery within 30 days . 
9.91 % , standard conventional fixedrate mortgages ; 7.875 % , 2 % rate capped one-year adjustable rate mortgages . 
Source : Telerate Systems Inc . 
FEDERAL NATIONAL MORTGAGE ASSOCIATION ( Fannie Mae ) : Posted yields on 30 year mortgage commitments for delivery within 30 days ( priced at par ) 9.86 % , standard conventional fixed-rate mortgages ; 8.85 % , 6\2 rate capped one-year adjustable rate mortgages . 
Source : Telerate Systems Inc . 
MERRILL LYNCH READY ASSETS TRUST : 8.33 % . 
Annualized average rate of return after expenses for the past 30 days ; not a forecast of future returns . 
Pension funds , insurers and other behemoths of the investing world said they began scooping up stocks during Friday 's market rout . 
And they plan to buy more today . 
Rightly or wrongly , many giant institutional investors appear to be fighting the latest war by applying the lesson they learned in the October 1987 crash : Buying at the bottom pays off . 
To be sure , big investors might put away their checkbooks in a hurry if stocks open sharply lower today . 
They could still panic and bail out of the market . 
But their 1987 performance indicates that they wo n't abandon stocks unless conditions get far worse . 
`` Last time , we got rewarded for going out and buying stocks when the panic was the worst , '' said John W. Rogers , president of Chicago-based Ariel Capital Management Inc. , which manages $ 1.1 billion of stocks . 
Mr. Rogers spent half his cash on hand Friday for `` our favorite stocks that have fallen apart . 
'' He expects to invest the rest if the market weakens further . 
Denver-based portfolio manager James Craig was n't daunted when Friday 's rout shaved $ 40 million from the value of the $ 752 million Janus Fund he oversees . 
`` I waited to make sure all the program trades had kicked through , '' he said . 
Then he jumped into the market : `` I spent $ 30 million in the last half-hour . 
'' Other money managers also opened their wallets . 
`` I was buying at the close ( Friday ) and I 'll be buying again because I know we 're getting good value , '' said Frederick A. Moran , president of Moran Asset Management Inc. , Greenwich , Conn . 
`` There is no justification on the fundamental level for this crash . 
'' Unlike mutual funds , which can be forced to sell stockholdings when investors rush to withdraw money , big investors such as pension funds and insurance companies can decide to ride out market storms without jettisoning stock . 
Most often , they do just that , because stocks have proved to be the best-performing long-term investment , attracting about $ 1 trillion from pension funds alone . 
`` If you bought after the crash , you did very very well off the bottom , '' said Stephen B. Timbers , chief investment officer of Chicago-based Kemper Financial Services Inc . 
The $ 56 billion California Public Employees Retirement System , for one , added $ 1 billion to its stock portfolio two years ago . 
`` The last crash taught institutional investors that they have to be long-term holders , and that they ca n't react to short-term events , good or bad , '' said Stephen L. Nesbitt , senior vice president for the pension consultants Wilshire Associates in Santa Monica , Calif . 
`` Those that pulled out ( of stocks ) regretted it , '' he said , `` so I doubt you 'll see any significant changes '' in institutional portfolios as a result of Friday 's decline . 
Stocks , as measured by the Standard & Poor 's 500-stock index , have been stellar performers this year , rising 27.97 % before Friday 's plunge , excluding dividends . 
Even Friday 's slump leaves investors ahead more than 20 % , well above the annual average for stocks over several decades . 
`` You could go down 400 points and still have a good year in the market , '' said James D. Awad , president of New York-based BMI Capital Corp . 
Mr. Awad , however , worries that the market `` could go down 800 or 900 points in the next few days . 
It can happen before you can turn around . 
'' He said he discerns many parallels with 1987 , including the emphasis on takeover stocks and the re-emergence of computerized program trading . 
`` The only thing you do n't have , '' he said , `` is the ` portfolio insurance ' phenomenon overlaid on the rest . 
'' Most institutional investors have abandoned the portfolio insurance hedging technique , which is widely thought to have worsened the 1987 crash . 
Not really insurance , this tactic was designed to soften the blow of declining stock prices and generate an offsetting profit by selling waves of S&P futures contracts . 
In its severest test , the $ 60 billion of portfolio insurance in effect in the 1987 crash did n't work , as stock buyers disappeared and stock and futures prices became disconnected . 
Even without portfolio insurance , market conditions were grim Friday , money managers said . 
Neil Weisman , whose New York-based Chilmark Capital Partners had converted 85 % of its $ 220 million investment pool to cash in recent months , said he was besieged by Wall Street firms Friday asking him to take stock off their hands . 
`` We got calls from big block houses asking us if we want to make bids on anything , '' said Mr. Weisman , who , happy with his returns on investments chalked up earlier , declined the offers . 
Mr. Weisman predicts stocks will appear to stabilize in the next few days before declining again , trapping more investors . 
`` I think it will be a rigor mortis rally , '' he said . 
Meanwhile , Friday brought a reprieve for money managers whose investment styles had put them at odds with the market rally . 
Especially gleeful were the short sellers , who have been pounded by this year 's market climb . 
The shorts sell borrowed shares , hoping to profit by replacing them later at a lower price . 
The nation 's largest short-selling operation is Feshbach Brothers , Palo Alto , Calif. , which said last May that its short positions had shown losses of 10 % for the year up to that point . 
All that now has changed . 
`` We 're ahead for the year because of Friday , '' said the firm 's Kurt Feshbach . 
`` We 're not making a killing , but we had a good day . 
'' Food and Drug Administration spokesman Jeff Nesbit said the agency has turned over evidence in a criminal investigation concerning Vitarine Pharmaceuticals Inc. to the U.S. Attorney 's office in Baltimore . 
Neither Vitarine nor any of the Springfield Gardens , N.Y. , company 's officials or employees have been charged with any crimes . 
Vitarine won approval to market a version of a blood pressure medicine but acknowledged that it substituted a SmithKline Beecham PLC product as its own in tests . 
Mr. Nesbit also said the FDA has asked Bolar Pharmaceutical Co. to recall at the retail level its urinary tract antibiotic . 
But so far the company has n't complied with that request , the spokesman said . 
Bolar , the subject of a criminal investigation by the FDA and the Inspector General 's office of the Health and Human Services Department , only agreed to recall two strengths of its version of Macrodantin `` as far down as direct customers , mostly wholesalers , '' Mr. Nesbit said . 
Bolar , of Copiague , N.Y. , earlier began a voluntary recall of both its 100 milligram and 50 milligram versions of the drug . 
The FDA has said it presented evidence it uncovered to the company indicating that Bolar substituted the brand-name product for its own to gain government approval to sell generic versions of Macrodantin . 
Bolar has denied that it switched the brand-name product for its own in such testing . 
The West German retailer ASKO Deutsche Kaufhaus AG plans to challenge the legality of a widely employed anti-takeover defense of companies in the Netherlands . 
The eventual court decision could become a landmark in Dutch corporate law because the lawsuit ASKO plans to file would be the first to challenge the entire principle and practice of companies issuing voting preferred shares to management-controlled trusts to dilute voting power of common stockholders . 
Up to now only specific aspects of these defenses have been challenged , though unsuccessfully , ASKO 's Dutch lawyers noted . 
Should the courts uphold the validity of this type of defense , ASKO will then ask the court to overturn such a vote-diluting maneuver recently deployed by Koninklijke Ahold NV . 
ASKO says the Dutch-based international food retailer had n't reasonable grounds to issue preferred stock to a friendly trust and thus dilute the worth and voting power of ASKO and other shareholders . 
Speaking through its Dutch lawyers , ASKO also disclosed it holds a 15 % stake in Ahold . 
It was previously thought ASKO held a 13.6 % stake that was accumulated since July . 
A spokesman for Ahold said his company is confident of its own position and the propriety of the preferred-share issue . 
He termed ASKO 's legal actions as `` unproductive '' to international cooperation among European retailers . 
Chase Manhattan Bank Chairman Willard Butcher is a conservative banker and a loyal Republican , but on Friday morning he had few kind words for President Bush 's economic policy-making . 
`` There are some very significant issues out there , such as the fiscal deficit , the trade deficit , our relations with Japan , that have to be the subject of major initiatives , '' he said in an interview . 
`` I 'd like to see that initiative , and I have n't . 
There is n't a big shot , an agenda . 
'' A few hours later , the stock market dropped 190 points . 
Politicians tried to finger each other for the blame , although many analysts doubt that Washington was singly responsible for Wall Street 's woes . 
But Mr. Butcher 's comments make one thing clear : Some on Wall Street wonder if anyone is in charge of economic policy . 
Consider this : -- By 11:59 p.m. tonight , President Bush must order $ 16 billion of automatic , across-the-board cuts in government spending to comply with the Gramm-Rudman budget law . 
The cuts are necessary because Congress and the administration have failed to reach agreement on a deficit-cutting bill . 
`` We simply do n't have strong leadership to try to reduce the deficit and make tough choices , '' House Budget Committee Chairman Leon Panetta ( D. , Calif . 
) said yesterday on NBC News 's `` Meet the Press . 
'' -- For the last two weeks , the Bush administration and the Federal Reserve have been engaged in a semi-public battle over international economic policy . 
The administration has been trying to push the dollar lower ; the Fed has been resisting . 
`` One of the things that continues to worry me is this monetary warfare between the Treasury Department and the Federal Reserve Board , '' said Lawrence Kudlow , a Bear , Stearns & Co. economist , on ABC 's `` This Week . 
'' -- The administration has sent out confusing signals about its response to a recent spate of airline takeovers . 
Last month , Transportation Secretary Sam Skinner forced Northwest Airlines to reduce a stake held by KLM Royal Dutch Airlines . 
But he has since run into opposition from the Treasury and the White House over that decision . 
And he has kept mum on how his decision might affect a bid for United Airlines , which includes a big stake by British Airways PLC . 
Some analysts say uncertainty about Washington 's anti-takeover policy was one reason that financing for the United Airlines takeover fell through -- the event that triggered the market drop . 
In many ways , the backdrop to Friday 's stock decline is eerily similar to that of October 1987 's 508-point crash . 
Then , as now , the budget debate was behind schedule and automatic spending cuts were within days of taking hold . 
The Treasury was locked in a battle over international economic policy , although at that time it was with West German officials rather than the Federal Reserve . 
And concern about official actions aimed at takeovers -- then by the tax-writing House Ways and Means Committee rather than the Transportation Department -- were making markets nervous . 
The 1987 crash brought the Reagan administration and Democratic lawmakers to the table for the first budget summit , resulting in a two-year plan to reduce the deficit by more than $ 76 billion -- even though the deficit actually rose by nearly $ 12 billion during that period . 
But , barring further drops in the market this week , a similar outcome does n't seem likely this year . 
Lawmakers and administration officials agree that Friday 's drop , by itself , is n't enough to force both sides back to the table to try to reach a deficit-reduction agreement that would be more serious and more far-reaching than last spring 's gimmick-ridden plan , which still is n't fully implemented . 
One of the biggest reasons that new talks are n't likely to come about is that , as everyone learned in 1987 , the economy and the market can survive a one-day 508-point tumble . 
`` Everybody thought we were looking at a repetition of 1929 , that we were looking at a recession , '' Rep. Panetta said yesterday in an interview . 
`` That did not happen . 
They learned they could survive it without much problem . 
'' But administration officials privately agree with Mr. Panetta , who said a precipitous drop this week `` is going to force the president and Congress to take a much harder look at fiscal policy . 
'' In that case , there will be plenty of blame to go around . 
`` There is an underlying concern on the part of the American people -- and there should be - that the administration has not gone far enough in cutting this deficit and that Congress has been unwilling to cut what the administration asked us to cut , '' said Senate Finance Committee Chairman Lloyd Bentsen ( D. , Texas ) . 
Nevertheless , it clearly will take more than Friday 's 190-point decline to overcome the bitter feelings that have developed between lawmakers and White House Budget Director Richard Darman over the capital-gains fight . 
Hill Democrats are particularly angry over Mr. Bush 's claim that the capital-gains cut was part of April 's budget accord and his insistence on combining it with the deficit-reduction legislation . 
`` There is no prospect of any so-called grand compromise or deal next year because the administration simply did n't live up to this year 's deal , '' Senate Majority Leader George Mitchell ( D. , Maine ) said yesterday on CBS News 's `` Face the Nation . 
'' During last week 's maneuverings on the deficit-cutting bill and the capital-gains issue , there were signs that Senate Republicans and the administration were at odds . 
At the very moment that Senate Republicans were negotiating a deal to exclude capital gains from the deficit-reduction legislation , White House spokesman Marlin Fitzwater told reporters that it was the president 's policy to include it . 
When an agreement was reached to strip capital gains from the legislation , Oregon Sen. Bob Packwood , the ranking GOP member of the tax-writing Senate Finance Committee , hailed it . 
Asked if the administration agreed , he curtly replied : `` The adminstration will have to speak for itself . 
'' Friday 's market tumble could spur action on reconciling the House and Senate versions of the deficit-reduction measure , a process that is n't expected to begin until tomorrow at the soonest . 
Senate Republicans expressed the hope that the House would follow the lead of the Senate , which on Friday agreed to drop a variety of spending measures and tax breaks that would have increased the fiscal 1990 deficit . 
`` The market needs a strong signal that we 're serious about deficit reduction , and the best way to do that is for the House of Representatives to strip their bill '' of similar provisions , Sen. Warren Rudman ( R. , N.H . 
) . 
said yesterday . 
The White House Office of Management and Budget , whose calculations determine whether the Gramm-Rudman targets are met , estimated that the House-passed deficit-reduction measure would cut the fiscal 1990 shortfall by $ 6.2 billion , almost half of the Congressional Budget Office 's estimate of $ 11.0 billion . 
Rep. Panetta said that OMB 's figure would still be enough to avoid permanent across-the-board cuts , but added : `` We 're getting very close to the margins here . 
'' No one in Washington was willing to take the blame for provoking Friday 's drop in the stock market . 
But some players were quick to seize the moment . 
Before the sun had set on Friday , Richard Rahn , the supply-side chief economist of the U.S. Chamber of Commerce , issued a statement attributing the drop in stock prices to the Senate decision to postpone action on capital gains . 
`` Investors , who had been holding assets in anticipation of a more favorable time to sell , were spooked , '' he said . 
`` There have been many preposterous reasons advanced to support a capital-gains tax cut , '' Sen. Mitchell said during his television appearance , `` but I suggest that is perhaps more than any of the others . 
'' The following U.S. Treasury , corporate and municipal offerings are tentatively scheduled for sale this week , according to Dow Jones Capital Markets Report : $ 15.2 billion of three-month and six-month bills . 
Two-year notes , refinancing about $ 9.6 billion in maturing debt . 
$ 9.75 billion of 52-week bills . 
Connecticut Light & Power Co. -- Three million shares of $ 25 preferred , via competitive bidding . 
B&H Crude Carriers Ltd. -- Four million common shares , via Salomon Brothers Inc . 
Baldwin Technology Co. -- 2.6 million Class A shares , via Smith Barney Harris Upham & Co . 
Blockbuster Entertainment Corp. -- $ 250 million ( face amount ) Liquid Yield Option Notes , via Merrill Lynch Capital Markets . 
Chase Manhattan Corp. -- 14 million common shares , via Goldman , Sachs & Co . 
Comcast Corp. -- $ 150 million convertible debentures , via Merrill Lynch . 
CSS Industries -- 1.3 million common shares , via Merrill Lynch . 
Eastern Utilities Associates -- 1.5 million common shares , via PaineWebber Inc . 
Employee Benefit Plans Inc. -- Two million common shares , via Dean Witter Capital Markets . 
Exabyte Corp. -- 2,850,000 common shares , via Goldman Sachs . 
Knowledgeware Inc. -- 2.4 million common shares , via Montgomery Securities . 
Oregon -- $ 100 million of general obligation veterans ' tax notes , Series 1989 , via competitive bid . 
Washington , D.C. -- $ 200 million of 1990 general obligation tax revenue notes ( Series 1990A ) , via competitive bid . 
Virginia Public School Authority -- $ 55,730,000 of school financing bonds , 1989 Series B ( 1987 resolution ) , via competitive bid . 
Austin , Texas -- $ 68,230,000 of various bonds , including $ 32 million hotel occupancy tax revenue bonds , Series 1989A , and $ 36.23 million convention center revenue bonds , Series 1989B , via a Morgan Stanley & Co. group . 
California Health Facilities Financing Authority -- $ 144.5 million of Kaiser Permanente revenue bonds , via a PaineWebber group . 
Connecticut -- $ 100 million of general obligation capital appreciation bonds , College Savings Plan , 1989 Series B , via a Prudential-Bache Capital Funding group . 
Pennsylvania Higher Education Facilities Authority -- $ 117 million of revenue bonds for Hahnemann University , Series 1989 , via a Merrill Lynch group . 
Tennessee Valley Authority -- Three billion of power bonds , via First Boston Corp . 
University of Medicine And Dentistry of New Jersey -- $ 55 million of Series C bonds , via a Prudential-Bache group . 
West Virginia Parkways , Economic Development And Tourism Authority -- $ 143 million of parkway revenue bonds , Series 1989 , via a PaineWebber group . 
San Antonio , Texas -- $ 640 million of gas and electric revenue refunding bonds , via a First Boston group . 
South Dakota Health & Education Facility Authority -- $ 51.1 million of Rapid City Regional Hospital bonds , via a Dougherty , Dawkins , Strand & Yost Inc. group . 
Small investors matched their big institutional brethren in anxiety over the weekend , but most seemed to be taking a philosophical approach and said they were resigned to riding out the latest storm in the stock market . 
`` I 'm not losing faith in the market , '' said Boston lawyer Christopher Sullivan as he watched the market plunge on a big screen in front of a brokerage firm . 
But he 's not so sure about everyone else . 
`` I think on Monday the small ( investors ) are going to panic and sell , '' predicted Mr. Sullivan , whose investments include AMR Corp. 's American Airlines unit and several mutual funds . 
`` And I think institutions are going to come in and buy ... I 'm going to hold on . 
If I sell now , I 'll take a big loss . 
'' Some evinced an optimism that had been rewarded when they did n't flee the market in 1987 . 
`` Oh , I bet it 'll be up 50 points on Monday , '' said Lucy Crump , a 78-year-old retired housewife in Lexington , Ky . 
Mrs. Crump said her Ashwood Investment Club 's portfolio lost about one-third of its value following the Black Monday crash , `` but no one got discouraged , and we gained that back -- and more . 
'' At the annual congress of the National Association of Investors Corp. at the Hyatt Regency hotel in Minneapolis , the scene was calm . 
Some 500 investors representing investor clubs from around the U.S. were attending when the market started to slide Friday . 
But Robert Showalter , an official of the association , said no special bulletins or emergency meetings of the investors ' clubs are planned . 
In fact , some of the association 's members -- long-term , buy-and-hold investors -- welcomed the drop in prices . 
`` We hope to take advantage of it , '' said John Snyder , a member of a Los Angeles investors ' club . 
He has four stocks in mind to buy if the prices drop to the level he wants . 
Not everyone is reacting so calmly , however , and many wonder about the long-term implications of what is widely viewed as the cause of Friday 's slide , reluctance by banks to provide financing for a buy-out of UAL Corp. , parent of United Airlines . 
Marc Perkins , a Tampa , Fla. , investment banker , said the market drop is one of `` a tremendous number of signs that the leveraged take-out era is ending . 
There 's no question that there 's a general distaste for leverage among lenders . 
'' Mr. Perkins believes , however , that the market could be stabilized if California investor Marvin Davis steps back in to the United bidding with an offer of $ 275 a share . 
Sara Albert , a 34-year-old Dallas law student , says she 's generally skittish about the stock market and the takeover activity that seems to fuel it . 
`` I have this feeling that it 's built on sand , '' she says , that the market rises `` but there 's no foundation to it . 
'' She and her husband pulled most of their investments out of the market after the 1987 crash , although she still owns some Texaco stock . 
Partly because of concern about the economy and partly because she recently quit her job as a legal assistant to go to school , `` I think at this point we want to be a lot more liquid . 
'' Others wonder how many more of these shocks the small investor can stand . 
`` We all assumed October '87 was a one-time shot , '' said San Francisco attorney David Greenberg . 
`` We told the little guy it could only happen once in a lifetime , come on back . 
Now it 's happening again . 
'' Mr. Greenberg got out just before the 1987 crash and , to his regret , never went back even as the market soared . 
This time he 's ready to buy in `` when the panic wears off . 
'' Still , he adds : `` We ca n't have this kind of thing happen very often . 
When the little guy gets frightened , the big guys hurt badly . 
Merrill Lynch ca n't survive without the little guy . 
'' Small investors have tiptoed back into the market following Black Monday , but mostly through mutual funds . 
Discount brokerage customers `` have been in the market somewhat but not whole hog like they were two years ago , '' says Leslie Quick Jr. , chairman of the Quick & Reilly discount brokerage firm . 
Hugo Quackenbush , senior vice president at Charles Scwhab Corp. , says Schwab customers `` have been neutral to cautious recently about stocks . 
'' Individual investors are still angry about program trading , Mr. Quackenbush says . 
Avner Arbel , a Cornell University finance professor , says government regulators will have to more closely control program trading to `` win back the confidence of the small investor . 
'' But it 's not only the stock market that has some small investors worried . 
Alan Helfman , general sales manager of a Chrysler dealership in Houston , said he and his mother have some joint stock investments , but the overall economy is his chief worry . 
`` These high rollers took a big bath today , '' he said in his showroom , which is within a few miles of the multi-million dollar homes of some of Houston 's richest citizens . 
`` And I can tell you that a high roller is n't going to come in tomorrow and buy a Chrysler TC by Maserati . 
'' And , finally , there were the gloaters . 
`` I got out in 1987 . 
Everything , '' said Pascal Antori , an Akron , Ohio , plumbing contractor who was visiting Chicago and stopped by Fidelity Investments ' LaSalle Street office . 
`` I just stopped by to see how much I would have lost . 
'' Would Mr. Antori ever get back in ? `` Are you kidding ! When it comes to money : Once bitten , 2,000 times shy . 
'' The crowded field for notebook-sized computers is about to become a lot more crowded . 
Compaq Computer Corp. 's long-awaited entry today into the notebook field is expected to put immediate heat on others in the market , especially Zenith Electronics Corp. , the current market leader , and on a swarm of promising start-ups . 
Compaq 's series of notebooks extends a trend toward downsizing in the personal computer market . 
One manufacturer already has produced a clipboard-sized computer called a notepad , and two others have introduced even smaller `` palmtops . 
'' But those machines are still considered novelties , with keyboards only a munchkin could love and screens to match . 
Compaq 's notebooks , by contrast , may be the first in their weight class not to skimp on features found in much bigger machines . 
Analysts say they 're faster and carry more memory than anything else of their size on the market -- and they 're priced aggressively at $ 2,400 to $ 5,000 . 
All of this comes in a machine that weighs only six pounds and fits comfortably into most briefcases . 
In recent months , Compaq 's competition , including Zenith , Toshiba Corp. , Tandy Corp. and NEC Corp. all have introduced portables that weigh approximately the same and that are called notebooks -- perhaps misleadingly . 
One analyst , noting that most such machines are about two inches thick , takes exception to the name . 
`` This is n't quite a notebook -- I call it a phonebook , '' he says . 
That ca n't be said of the $ 2,400 notepad computer introduced a few weeks ago by GRiD Systems Corp. , a unit of Tandy . 
Instead of a keyboard , it features a writing surface , an electronic pen and the ability to `` read '' block printing . 
At 4 1\2 pounds , it may be too ambitiously named , but it nevertheless opens up the kind of marketing possibilities that make analysts froth . 
Palmtops are n't far behind . 
Atari Corp. 's Portfolio , introduced in Europe two months ago and in the U.S. in early September , weighs less than a pound , costs a mere $ 400 and runs on three AA batteries , yet has the power to run some spreadsheets and word processing programs . 
Some critics , however , say its ability to run commonplace programs is restricted by a limited memory . 
Poquet Computer Corp. , meanwhile , has introduced a much more sophisticated palmtop that can run Lotus 1-2-3 and other sophisticated software programs , but costs five times as much . 
At stake is what Mike Swavely , Compaq 's president of North America operations , calls `` the Holy Grail of the computer industry '' -- the search for `` a real computer in a package so small you can take it everywhere . 
'' The market is so new , nobody knows yet how big it can be . 
`` I 've had a lot of people trying to sell me services to find out how big it is , '' says Tom Humphries , director of marketing for GRiD . 
`` Whether it 's $ 5 billion or $ 3.5 billion , it does n't matter . 
It 's huge . 
'' Consider the growth of portables , which now comprise 12 % of all personal computer sales . 
Laptops -- generally anything under 15 pounds -- have become the fastest-growing personal computer segment , with sales doubling this year . 
Responding to that demand , however , has led to a variety of compromises . 
Making computers smaller often means sacrificing memory . 
It also has precluded use of the faster , more powerful microprocessors found in increasing numbers of desktop machines . 
Size and weight considerations also have limited screen displays . 
The competitive sniping can get pretty petty at times . 
A Poquet spokesman , for example , criticizes the Atari Portfolio because it requires three batteries while the Poquet needs only two . 
Both palmtops are dismissed by notebook makers , who argue that they 're too small -- a problem Poquet also encountered in focus groups , admits Gerry Purdy , director of marketing . 
Poquet , trying to avoid the `` gadget '' label , responded with the tag line , `` The Poquet PC -- a Very Big Computer . 
'' Despite the sniping , few question the inevitability of the move to small machines that do n't make compromises . 
Toward that end , experts say the real battle will take place between center-stage players like Toshiba , Zenith and now Compaq . 
Compaq 's new machines are considered a direct threat to start-up firms like Dynabook Inc. , which introduced in June a computer that , like Compaq 's , uses an Intel 286 microprocessor and has a hard disk drive . 
But the Dynabook product is twice as heavy and costs more than Compaq 's . 
Compaq 's announcement also spells trouble for Zenith , which last year had 28 % of the U.S. laptop market but recently agreed to sell its computer business to Cie. des Machines Bull , the French government-owned computer maker . 
Zenith holders will vote in December on the proposed $ 635 million sale , a price that could slip because it is pegged to Zenith 's share and sales . 
Compaq is already taking aim at Zenith 's market share . 
Rod Canion , Compaq 's president and chief executive officer , notes pointedly that Zenith 's $ 2,000 MinisPort uses an `` unconventional '' two-inch floppy disk , whereas Compaq 's new machines use the more common 3 1\2-inch disk . 
John P. Frank , president of Zenith Data Systems , simply shrugs off such criticism , noting that 3 1\2-inch floppies were also `` unconventional '' when they first replaced five-inch disks . 
`` We do n't look at it as not being a standard , we look at it as a new standard , '' he argues . 
Analysts do n't see it that way . 
`` I ca n't imagine that you 'll talk to anyone who wo n't tell you this is dynamite for Compaq and a stopper for everyone else , '' says Gene Talsky , president of Professional Marketing Management Inc . 
Adds Bill Lempesis , senior industry analyst for DataQuest , a high-technology market research firm : `` We basically think that these are very hot products . 
The problem Compaq is going to have is that they wo n't be able to make enough of them . 
'' Compaq 's machines include the 3 1\2-inch floppy disk drive , a backlit screen that is only 1\4-inch thick and an internal expansion slot for a modem -- in other words , almost all the capabilities of a typical office machine . 
Others undoubtedly will follow , but most analysts believe Compaq has at least a six-month lead on the competition . 
Toshiba 's line of portables , for example , features the T-1000 , which is in the same weight class but is much slower and has less memory , and the T-1600 , which also uses a 286 microprocessor , but which weighs almost twice as much and is three times the size . 
A third model , marketed in Japan , may hit the U.S. by the end of the first quarter of 1990 , but by then , analysts say , Compaq will have established itself as one of three major players . 
What about Big Blue ? International Business Machines Corp. , analysts say , has been burned twice in trying to enter the laptop market and shows no signs of trying to get into notebooks anytime soon . 
Honeywell Inc. and International Business Machines Corp. received Air Force contracts to develop integrated circuits for use in space . 
Honeywell 's contract totaled $ 69.7 million , and IBM 's $ 68.8 million . 
Boeing Co. received a $ 46.7 million Air Force contract for developing cable systems for the Minuteman Missile . 
General Dynamics Corp. received a $ 29 million Air Force contract for electronic-warfare training sets . 
Grumman Corp. received an $ 18.1 million Navy contract to upgrade aircraft electronics . 
Avco Corp. received an $ 11.8 million Army contract for helicopter engines . 
Sharp increases in the price of fresh produce caused Spain 's September consumer price index to shoot up 1.1 % from the previous month , pushing the annual rate of inflation to 6.8 % , the National Institute of Statistics said Friday . 
The monthly increase is the highest recorded in the past four years . 
The index , which registered 156.8 at the end of September , has a base of 100 set in 1983 and is n't seasonally adjusted . 
Prices have risen 5.9 % in the first nine months of the year , outstripping both the initial 3 % inflation goal set by the government of Socialist Prime Minister Felipe Gonzalez and the second , revised goal of 5.8 % . 
Japan 's wholesale prices in September rose 3.3 % from a year earlier and were up 0.4 % from the previous month , the Bank of Japan announced Friday . 
The wholesale price index stood at 90.1 , compared with a 1985 base of 100 . 
Plunge ? What plunge ? Twenty-four New York Stock Exchange issues hit 52-week highs during Friday 's trading , despite the Dow Jones Industrial Average 's 190.58-point plunge . 
Stocks of utilities held up relatively better than other market sectors during the sell-off . 
And among the issues hitting new highs were Detroit Edison Co. and Niagara Mohawk Power Corp . 
Other major issues hitting highs included American Telephone & Telegraph Co. , Westinghouse Electric Corp. , Exxon Corp. and Cigna Corp. , the big insurer . 
Of course , many more issues -- 93 -- hit new lows . 
These included International Business Machines Corp. , which during Friday 's session traded below $ 100 a share for the first time since June 1984 . 
IBM closed at $ 102 , down $ 5.625 . 
Other new lows included Navistar International Corp. , Union Carbide Corp. and Bethlehem Steel Corp. , all of which are included in the industrial average . 
Meanwhile , two initial public offerings braved the cascading market in their maiden day of national over-the-counter trading Friday . 
Shares of Rally 's Inc. , an operator of fast-food restaurants , closed at $ 17 each , up from its $ 15 offering price and shares of Employee Benefit Plans Inc. , a health-care consultant , closed at $ 14.125 , up from its $ 12 offering price . 
Ford Motor Co. said it acquired 5 % of the shares in Jaguar PLC . 
Jaguar , the London Stock Exchange and the U.S. Securities and Exchange Commission are being notified of the transactions , the company said . 
The U.S. Federal Trade Commission advised Ford last week that it would n't raise any objection to the acquisition of as much as 15 % of Jaguar shares . 
The No. 2 auto maker disclosed last month that it wants to buy as much as 15 % of the British luxury-car maker , the maximum allowed under current United Kingdom government restrictions . 
General Motors Corp. said it had discussed the possibility of a joint venture with Jaguar before Ford began buying shares . 
GM said it still is talking with Jaguar about acquiring a minority interest . 
Investors who bought stock with borrowed money -- that is , `` on margin '' -- may be more worried than most following Friday 's market drop . 
That 's because their brokers can require them to sell some shares or put up more cash to enhance the collateral backing their loans . 
In October 1987 , these margin calls were thought to have contributed to the downward spiral of the stock market . 
Typically , a margin call occurs when the price of a stock falls below 75 % of its original value . 
If the investor does n't put up the extra cash to satisfy the call , the brokerage firm may begin liquidating the securities . 
But some big brokerage firms said they do n't expect major problems as a result of margin calls . 
Margin calls since Friday `` have been higher than usual , but reasonable , '' a spokesman for Shearson Lehman Hutton Inc. said . 
Merrill Lynch & Co. officials `` do n't expect { margin calls } to be as big a factor as in 1987 '' because fewer individual investors are buying stock on margin , a spokesman said . 
Hugo Quackenbush , senior vice president at Charles Schwab Corp. , the San Francisco-based discount brokerage firm , said he did n't expect any immediate problems with margin calls for Schwab customers . 
He said Schwab had increased margin requirements `` so customers have more of a cushion . 
'' He added : `` We learned a lesson in 1987 about volatility . 
'' Avis Inc. , following rival Hertz Corp. 's lead , said it is backing out of frequent-flier programs with three airlines . 
The Garden City , N.Y. , car-rental company said it wo n't renew contracts with NWA Inc. 's Northwest Airlines unit , Pan Am Corp. 's Pan American World Airways unit and Midway Airlines at the end of this year . 
But it remains involved in programs with AMR Corp. 's American Airlines unit and Delta Air Lines . 
Industry estimates put Avis 's annual cost of all five programs at between $ 8 million and $ 14 million . 
A spokesman for Avis would n't specify the costs but said the three airlines being dropped account for `` far less than half '' of the total . 
Budget Rent a Car Corp. , of Chicago , and National Car Rental Systems Inc. , of Minneapolis , both said they had no plans to follow suit . 
In fact , Budget indicated it saw some benefit to staying involved in these programs , in which renters earn frequent-flier miles and fliers can get car-rental discounts . 
`` I can not see how this news by Hertz and Avis can not benefit Budget 's programs , '' said Bob Wilson , Budget 's vice president , marketing planning . 
Northwest and Midway are two of the five airlines with which Budget has agreements . 
National also participates in the Northwest frequent-flier program along with four other airlines , including Delta and USAir Group Inc. 's USAir unit . 
A month ago , Hertz , of Park Ridge , N.J. , said that it would drop its marketing agreements at year end with Delta , America West and Texas Air Corp. 's Continental Airlines and Eastern Airlines , and that pacts with American Airlines , UAL Inc 's United Airlines and USAir also would be ended ... sometime after Dec. 31 . 
At the time , Hertz said its annual fees to those airlines amounted to $ 20 million and that the value of redeemed awards topped $ 15 million . 
Analysts and competitors , however , doubt the numbers were that high . 
Budget said its frequent-flier costs are `` substantially below '' Avis 's level . 
Robert D. Cardillo , Avis vice president of marketing , said , `` The proliferation and costs attached to { frequent-flier programs } have significantly diminished their value . 
'' This year has been difficult for both Hertz and Avis , said Charles Finnie , car-rental industry analyst at Alex . 
Brown & Sons . 
`` They 've been looking to get their costs down , and this is a fairly sensible way to do it , '' he said . 
CBS Inc. is cutting `` The Pat Sajak Show '' down to one hour from its current 90 minutes . 
CBS insisted the move was n't a setback for the program , which is the network 's first entry into the late-night talk show format since 1972 . 
`` I have every intention of making this the best possible show and having it run one hour is the best way to it , '' said Rod Perth , who was named vice president of late night entertainment in August . 
`` This will raise the energy level of the show . 
'' CBS will continue to program action-adventure shows to follow the Sajak hour . 
But CBS News will extend its four-hour `` Nightwatch '' by 30 minutes and begin at 1:30 a.m . 
The show , despite a promising start , has slipped badly in the weekly ratings as compiled by A.C. Nielsen Co. , finishing far below `` Tonight '' on NBC , a unit of General Electric Co. , and `` Nightline '' on ABC-TV , a unit of Capital Cities\ABC Inc . 
Further fractioning the late-night audience is the addition of the `` Arsenio Hall Show , '' syndicated by Paramount Communications Inc . 
Tandem Computers Inc. , preparing to fight with International Business Machines Corp. for a piece of the mainframe business , said it expects to post higher revenue and earnings for its fiscal fourth quarter ended Sept. 30 . 
Tandem said it expects to report revenue of about $ 450 million and earnings of 35 cents to 40 cents a share . 
The results , which are in line with analysts ' estimates , reflect `` a continued improvement in our U.S. business , '' said James Treybig , Tandem 's chief executive officer . 
In the year-earlier period , Tandem reported net income of $ 30.1 million , or 31 cents a share , on revenue of $ 383.9 million . 
Tandem expects to report the full results for the quarter next week . 
Analysts have predicted that the Cupertino , Calif. , company will report revenue of $ 430 million to $ 460 million and earnings of 35 cents to 40 cents a share . 
Commenting on the results for the quarter , Mr. Treybig said the strength of the company 's domestic business came as `` a surprise '' to him , noting that sales `` in every region of the U.S. exceeded our plan . 
'' The company 's U.S. performance was helped by `` a record quarter for new customers , '' he said . 
Tandem makes `` fault-tolerant '' computers -- machines with built-in backup systems -- that run stock exchanges , networks of automatic tellers and other complex computer systems . 
Tomorrow the company is scheduled to announce its most powerful computer ever , which for the first time will bring it into direct competition with makers of mainframe computers . 
Tandem 's new high-end computer is called Cyclone . 
Prices for the machine , which can come in various configurations , are $ 2 million to $ 10 million . 
Analysts expect the new computer to wrest a hefty slice of business away from IBM , the longtime leader in mainframes . 
`` We believe they could siphon perhaps two to three billion dollars from IBM '' over the next few years , said George Weiss , an analyst at the Gartner group . 
That will spur Tandem 's growth . 
`` I 'd be disappointed if the company grew by less than 20 % next year , '' said John Levinson , an analyst at Goldman , Sachs & Co . 
IBM is expected to respond to Tandem 's Cyclone by discounting its own mainframes , which analysts say are roughly three times the price of a comparable system from Tandem . 
`` Obviously IBM can give bigger discounts to users immediately , '' said Mr. Weiss . 
But Mr. Treybig questions whether that will be enough to stop Tandem 's first mainframe from taking on some of the functions that large organizations previously sought from Big Blue 's machines . 
`` The answer is n't price reductions , but new systems , '' he said . 
Nevertheless , Tandem faces a variety of challenges , the biggest being that customers generally view the company 's computers as complementary to IBM 's mainframes . 
Even Mr. Treybig is reluctant to abandon this notion , insisting that Tandem 's new machines are n't replacements for IBM 's mainframes . 
`` We 're after a little bigger niche , '' he said . 
Do n't jump yet . 
The stock market 's swoon may turn out to be good news for the economy . 
In one wild hour of trading , the market managed to accomplish what the Bush administration has been trying to do , unsuccessfully , for weeks . 
It is forcing the Federal Reserve to ease its grip on credit and it took the wind out of a previously irrepressible dollar . 
The resulting decline in interest rates and the value of the dollar could reinvigorate American business -- indeed , the entire economy . 
This may sound strangely optimistic . 
After all , until a few years ago , the stock market was viewed as a barometer of the national economy . 
When it went down , by all tradition , the economy followed . 
That has changed , partly because the two years following the worst stock-market plunge in history have been reasonably comfortable . 
The 1987 crash was `` a false alarm however you view it , '' says University of Chicago economist Victor Zarnowitz . 
The market seems increasingly disconnected from the rest of the nation . 
Its spasms ca n't be traced to fundamental business conditions , nor do they appear to presage major shifts in the economy . 
`` The market today has a life of its own , '' John Akers , chairman of International Business Machines Corp. , said Saturday . 
`` There 's nothing rational about this kind of action . 
'' Of course , the health of the economy will be threatened if the market continues to dive this week . 
Sharply falling stock prices do reduce consumer wealth , damage business confidence and discourage the foreign investors upon whom the U.S. now relies for financial sustenance . 
The financial-services industry was battered by the 1987 crash . 
What 's more , although the stock market is far less overvalued today than two years ago , the U.S. economy is weaker . 
Growth is slower . 
Profits are softer . 
Debt burdens are heavier . 
But if the stock market does n't continue to plummet , the beneficial effects of lower interest rates and a lower dollar may well dominate . 
The Fed , which until Friday had been resisting moves to ease credit , is now poised to pour money into the economy if needed to soothe the markets . 
Fed officials may protest that this does n't necessarily mean a fundamental change in their interest-rate policies . 
But the experience of the 1987 crash suggests the Fed is likely to bring down short-term interest rates in its effort to calm markets . 
Anticipating the Fed 's move , money traders lowered a key interest rate known as the Federal Funds rate to 8.625 % late Friday , down from 8.820 % the day before . 
Tiny movements in the rate , which is what banks charge each other for overnight loans , are usually among the few visible tracks that the Fed leaves on the monetary markets . 
The dollar also began to decline Friday as the stock market 's plunge caused some investors to reassess their desire to invest in the U.S . 
Treasury officials have been arguing for months that the dollar 's strength was out of whack with economic fundamentals , threatening to extinguish the export boom that has sustained manufacturers for several years . 
The market drop has now apparently convinced foreign investors that the Treasury was right about the overpriced dollar . 
A modest drop in the dollar -- only a modest one , mind you -- would be welcomed by the U.S . 
That was n't the case in 1987 , when the dollar was so weak that some economists and government officials seriously worried that it might collapse , producing panic among foreign investors and diminishing the flow of foreign capital to the U.S . 
Another big difference between 1987 and 1989 is n't so comforting . 
In the third quarter of 1987 , the economy spurted at an inflation-adjusted annual rate of 5.3 % . 
The consensus among economists is that it grew a much more sluggish 2.3 % in the third quarter of 1989 , which ended two weeks ago . 
The plunge in stock prices `` is happening at a time when the economy has already slowed down , '' says economist Lawrence Chimerine of WEFA Group , a Bala Cynwyd , Pa. , forecasting company . 
`` A lot of pent-up demand is gone . 
'' Consumer spending did drop in the months following Black Monday 1987 -- `` but only slightly and for a short period of time , '' recalls Mr. Zarnowitz , a longtime student of business cycles . 
`` That was offset by strength elsewhere . 
{ The effects } were much less severe and less prolonged than some had feared or expected . 
'' Today , he frets , exports and business investment spending may be insufficient to pick up the slack if stock prices sink this week and if consumers retrench in reaction . 
What 's more , the corporate borrowing binge has n't abated in the past two years . 
`` We 've had two more years of significant accumulation of debt ... just at the time when earnings are being squeezed , '' Mr. Chimerine notes . 
The more a company relies on borrowed money , the greater its sensitivity to an economic slowdown . 
A company with a strong balance sheet can withstand an unanticipated storm ; a highly leveraged company may end up in bankruptcy court . 
The Fed , of course , knows that very well -- hence its readiness to pump credit into the economy this morning . 
But , in the process , the Fed risks reigniting inflation . 
Even before Friday 's events , Harvard University economist Benjamin Friedman was arguing that the Fed wo n't be able to live up to its tough words on eliminating inflation because of its responsibility to protect fragile financial markets , banks and highly leveraged corporations . 
The biggest threat on the economic horizon right now is n't recession , he reasons ; it 's an outbreak of uncontrolled inflation . 
In the end , the 1987 collapse suggested , the economy does n't move in lockstep with stock prices . 
The economy does , however , depend on the confidence of businesses , consumers and foreign investors . 
A panic on Wall Street does n't exactly inspire confidence . 
Surveys suggested that consumer confidence was high before Friday . 
A 190-point drop is n't likely to make much of a dent ; multiply that a few times over , though , and it will . 
If the reactions of executives gathered Saturday at Hot Springs , Va. , for the Business Council meetings are typical , business leaders were n't overly rattled by Friday 's decline . 
And if foreign investors become a tad more cautious -- well , the dollar 's recent strength suggests that the U.S. can stand it . 
On the bottom line , the most comforting fact for the economic outlook is that we 've been through this before . 
Two years ago , about the only point of comparison was the 1929 crash and the subsequent Depression . 
The doomsayers had a receptive audience . 
The prosperity that followed Black Monday permits a more optimistic view today . 
At the very least , the establishment here is taking comfort from the nation 's success in handling the last go-around . 
As Sen. Lloyd Bentsen ( D. , Texas ) observed yesterday , `` The Fed avoided a meltdown last time . 
They are more sophisticated this time . 
'' The chemical industry is expected to report that profits eroded in the third quarter because of skidding prices in the commodity end of the business . 
Producers of commodity chemicals , the basic chemicals produced in huge volumes for other manufacturers , have seen sharp inventory cutting by buyers . 
Once the chief beneficiaries of the industry 's now fading boom , these producers also will be reporting against exceptionally strong performances in the 1988 third quarter . 
`` For some of these companies , this will be the first quarter with year-to-year negative comparisons , '' says Leonard Bogner , a chemical industry analyst at Prudential Bache Research . 
`` This could be the first of five or six down quarters . 
'' Perhaps most prominent , Dow Chemical Co. , which as of midyear had racked up eight consecutive record quarters , is expected to report that profit decreased in the latest quarter from a year earlier , if only by a shade . 
Though Dow has aggressively diversified into specialty chemicals and pharmaceuticals , the company still has a big stake in polyethylene , which is used in packaging and housewares . 
Analysts ' third-quarter estimates for the Midland , Mich. , company are between $ 3.20 a share and $ 3.30 a share , compared with $ 3.36 a year ago , when profit was $ 632 million on sales of $ 4.15 billion . 
A Dow spokeswoman declined to comment on the estimates . 
At the investment firm of Smith Barney , Harris Upham & Co. , the commodity-chemical segment is seen pulling down overall profit for 20 companies representative of the whole industry by 8 % to 10 % . 
`` You will find the commodities off more than the others and the diversified companies about even or slightly better , '' says James Wilbur , a Smith Barney analyst . 
First Boston Corp. projects that 10 of the 15 companies it follows will report lower profit . 
Most of the 10 have big commodity-chemical operations . 
Still , some industry giants are expected to report continuing gains , largely because so much of their business is outside commodity chemicals . 
Du Pont Co. is thought to have had steady profit growth in white pigments , fibers and polymers . 
Moreover , the Wilmington , Del. , company is helped when prices weaken on the commodity chemicals it buys for its own production needs , such as ethylene . 
Analysts are divided over whether Du Pont will report much of a gain in the latest quarter from its Conoco Inc. oil company . 
The estimates for Du Pont range from $ 2.25 to $ 2.45 a share . 
In the 1988 third quarter , the company earned $ 461 million , or $ 1.91 a share , on sales of $ 7.99 billion . 
Du Pont declined to comment . 
Monsanto Co. , too , is expected to continue reporting higher profit , even though its sales of crop chemicals were hurt in the latest quarter by drought in northern Europe and the western U.S . 
The St. Louis-based company is expected to report again that losses in its G.D. Searle & Co. pharmaceutical business are narrowing . 
Searle continued to operate in the red through the first half of the year , but Monsanto has said it expects Searle to post a profit for all of 1989 . 
Most estimates for Monsanto run between $ 1.70 and $ 2 a share . 
A year ago , the company posted third-quarter profit of $ 116 million , or $ 1.67 a share , on sales of $ 2.02 billion . 
Monsanto declined to comment . 
But the commodity-chemical producers are caught on the downside of a pricing cycle . 
By some accounts on Wall Street and in the industry , the inventory reductions are near an end , which may presage firmer demand . 
But doubters say growing production capacity could keep pressure on prices into the early 1990s . 
In the latest quarter , at least , profit is expected to fall sharply . 
For Himont Inc. , `` how far down it is , we do n't know , '' says Leslie Ravitz at Salomon Brothers . 
The projections are in the neighborhood of 50 cents a share to 75 cents , compared with a restated $ 1.65 a share a year earlier , when profit was $ 107.8 million on sales of $ 435.5 million . 
Himont faces lower prices for its mainstay product , polypropylene , while it goes forward with a heavy capital investment program to bolster its raw material supply and develop new uses for polypropylene , whose markets include the packaging and automobile industries . 
The company , based in Wilmington , Del. , is 81%-owned by Montedison S.p . 
A. , Milan , which has an offer outstanding for the Himont shares it does n't already own . 
At Quantum Chemical Corp. , New York , the trouble is lower prices for polyethylene , higher debt costs and the idling of an important plant due to an explosion . 
Some analysts hedge their estimates for Quantum , because it is n't known when the company will book certain one-time charges . 
But the estimates range from break-even to 35 cents a share . 
In the 1988 third quarter , Quantum earned $ 99.8 million , or $ 3.92 a share , on sales of $ 724.4 million . 
Another big polyethylene producer , Union Carbide Corp. , is expected to post profit of between $ 1 a share and $ 1.25 , compared with $ 1.56 a share a year earlier , when the company earned $ 213 million on sales of $ 2.11 billion . 
Himont , Quantum and Union Carbide all declined to comment . 
The following were among Friday 's offerings and pricings in the U.S. and non-U.S. capital markets , with terms and syndicate manager , as compiled by Dow Jones Capital Markets Report : Dow Chemical Co. -- $ 150 million of 8.55 % senior notes due Oct. 15 , 2009 , priced at par . 
The issue , which is puttable back to the company at par on Oct. 15 , 1999 , was priced at a spread of 50 basis points above the Treasury 's 10-year note . 
Rated single-A-1 by Moody 's Investors Service Inc. and single-A by Standard & Poor 's Corp. , the non-callable issue will be sold through underwriters led by Merrill Lynch Capital Markets . 
Centel Capital Corp. -- $ 150 million of 9 % debentures due Oct. 15 , 2019 , priced at 99.943 to yield 9.008 % . 
The non-callable issue , which can be put back to the company in 1999 , was priced at 99 basis points above the Treasury 's 10-year note . 
Rated Baa-1 by Moody 's and triple-B-plus by S&P , the issue will be sold through underwriters led by Morgan Stanley & Co . 
Federal Home Loan Mortgage Corp. -- $ 500 million of Remic mortgage securities offered in 13 classes by Prudential-Bache Securities Inc . 
The offering , Series 102 , backed by Freddie Mac 8 1\2 % securities with a weighted average remaining term to maturity of 28.4 years , was priced before the market 's afternoon surge . 
Among classes for which details were available , yields ranged from 8.78 % , or 75 basis points over two-year Treasury securities , to 10.05 % , or 200 basis points over 10-year Treasurys . 
Federal Home Loan Mortgage Corp. -- $ 300 million of Remic mortgage securities offered by Citicorp Securities Markets Inc . 
The offering , Series 101 , is backed by Freddie Mac 9 1\2 % securities . 
Pricing details were n't immediately available . 
Federal Home Loan Mortgage Corp. -- $ 200 million of stripped mortgage securities underwritten by BT Securities Corp . 
The agency 's first strips issue , collateralized by Freddie Mac 8 % securities pooled into a single security called a Giant , will be divided into interest-only and principal-only securities . 
The collateral is being sold by a thrift institution . 
The principal-only securities will be repackaged by BT Securities into a Freddie Mac Remic , Series 103 , that will have six classes . 
The interest-only securities will be sold separately by BT Securities . 
The principal-only securities pay the principal from the underlying Freddie Mac 8 % securities , while the interest-only securities pay only interest . 
Freddie Mac said the principal-only securities were priced at 58 1\4 to yield 8.45 % , assuming an average life of eight years and a prepayment of 160 % of the PSA model . 
The interest-only securities were priced at 35 1\2 to yield 10.72 % . 
There were no major Eurobond or foreign bond offerings in Europe Friday . 
The economy 's temperature will be taken from several vantage points this week , with readings on trade , output , housing and inflation . 
The most troublesome report may be the August merchandise trade deficit due out tomorrow . 
The trade gap is expected to widen to about $ 9 billion from July 's $ 7.6 billion , according to a survey by MMS International , a unit of McGraw-Hill Inc. , New York . 
Thursday 's report on the September consumer price index is expected to rise , although not as sharply as the 0.9 % gain reported Friday in the producer price index . 
That gain was being cited as a reason the stock market was down early in Friday 's session , before it got started on its reckless 190-point plunge . 
Economists are divided as to how much manufacturing strength they expect to see in September reports on industrial production and capacity utilization , also due tomorrow . 
Meanwhile , September housing starts , due Wednesday , are thought to have inched upward . 
`` There 's a possibility of a surprise '' in the trade report , said Michael Englund , director of research at MMS . 
A widening of the deficit , if it were combined with a stubbornly strong dollar , would exacerbate trade problems -- but the dollar weakened Friday as stocks plummeted . 
In any event , Mr. Englund and many others say that the easy gains in narrowing the trade gap have already been made . 
`` Trade is definitely going to be more politically sensitive over the next six or seven months as improvement begins to slow , '' he said . 
Exports are thought to have risen strongly in August , but probably not enough to offset the jump in imports , economists said . 
Views on manufacturing strength are split between economists who read September 's low level of factory job growth as a sign of a slowdown and those who use the somewhat more comforting total employment figures in their calculations . 
The wide range of estimates for the industrial output number underscores the differences : The forecasts run from a drop of 0.5 % to an increase of 0.4 % , according to MMS . 
A rebound in energy prices , which helped push up the producer price index , is expected to do the same in the consumer price report . 
The consensus view expects a 0.4 % increase in the September CPI after a flat reading in August . 
Robert H. Chandross , an economist for Lloyd 's Bank in New York , is among those expecting a more moderate gain in the CPI than in prices at the producer level . 
`` Auto prices had a big effect in the PPI , and at the CPI level they wo n't , '' he said . 
Food prices are expected to be unchanged , but energy costs jumped as much as 4 % , said Gary Ciminero , economist at Fleet\Norstar Financial Group . 
He also says he thinks `` core inflation , '' which excludes the volatile food and energy prices , was strong last month . 
He expects a gain of as much as 0.5 % in core inflation after a summer of far smaller increases . 
Housing starts are expected to quicken a bit from August 's annual pace of 1,350,000 units . 
Economists say an August rebound in permits for multifamily units signaled an increase in September starts , though activity remains fairly modest by historical standards . 
Two-Way Street If the sixty-day plant-closing law 's fair , Why should we not then amend the writ To require that all employees give Similar notice before they quit ? -- Rollin S. Trexler . 
Candid Comment When research projects are curtailed due to government funding cuts , are we `` caught with our grants down '' ? -- C.E. Friedman . 
Assuming the stock market does n't crash again and completely discredit yuppies and trading rooms , American television audiences in a few months may be seeing Britain 's concept of both . 
`` Capital City '' is a weekly series that premiered here three weeks ago amid unprecedented hype by its producer , Thames Television . 
The early episodes make you long for a rerun of the crash of 1987 . 
Let 's make that 1929 , just to be sure . 
According to the program 's publicity prospectus , `` Capital City , '' set at Shane Longman , a fictional mid-sized securities firm with # 500 million capital , `` follows the fortunes of a close-knit team of young , high-flying dealers , hired for their particular blend of style , genius and energy . 
But with all the money and glamour of high finance come the relentless pressures to do well ; pressure to pull off another million before lunch ; pressure to anticipate the market by a fraction of a second ... '' You need n't be a high-powered securities lawyer to realize the prospectus is guilty of less than full disclosure . 
The slickly produced series has been criticized by London 's financial cognoscenti as inaccurate in detail , but its major weakness is its unrealistic depiction of the characters ' professional and private lives . 
Turned loose in Shane Longman 's trading room , the yuppie dealers do little right . 
Judging by the money lost and mistakes made in the early episodes , Shane Longman 's capital should be just about exhausted by the final 13th week . 
In the opening episode we learn that Michelle , a junior bond trader , has indeed pulled off another million before lunch . 
Trouble is , she has lost it just as quickly . 
Rather than keep the loss a secret from the outside world , Michelle blabs about it to a sandwich man while ordering lunch over the phone . 
Little chance that Shane Longman is going to recoup today . 
Traders spend the morning frantically selling bonds , in the belief that the U.S. monthly trade figures will look lousy . 
Ah , perfidious Columbia ! The trade figures turn out well , and all those recently unloaded bonds spurt in price . 
So much for anticipating the market by a fraction of a second . 
And a large slice of the first episode is devoted to efforts to get rid of some nearly worthless Japanese bonds ( since when is anything Japanese nearly worthless nowadays ? ) . 
Surprisingly , Shane Longman survives the week , only to have a senior executive innocently bumble his way into becoming the target of a criminal insider trading investigation . 
Instead of closing ranks to protect the firm 's reputation , the executive 's internal rivals , led by a loutish American , demand his resignation . 
The plot is thwarted when the firm 's major stockholder , kelp farming on the other side of the globe , hurries home to support the executive . 
But the investigation continues . 
If you can swallow the premise that the rewards for such ineptitude are six-figure salaries , you still are left puzzled , because few of the yuppies consume very conspicuously . 
In fact , few consume much of anything . 
Two share a house almost devoid of furniture . 
Michelle lives in a hotel room , and although she drives a canary-colored Porsche , she has n't time to clean or repair it ; the beat-up vehicle can be started only with a huge pair of pliers because the ignition key has broken off in the lock . 
And it takes Declan , the obligatory ladies ' man of the cast , until the third episode to get past first base with any of his prey . 
Perhaps the explanation for these anomalies is that class-conscious Britain is n't ready to come to terms with the wealth created by the Thatcherian free-enterprise regime . 
After all , this is n't old money , but new money , and in many cases , young money . 
This attitude is clearly illustrated in the treatment of Max , the trading room 's most flamboyant character . 
Yuppily enough , he lives in a lavishly furnished converted church , wears designer clothes and drives an antique car . 
But apparently to make him palatable , even lovable , to the masses , the script inflates pony-tailed Max into an eccentric genius , master of 11 Chinese dialects . 
He takes his wash to the laundromat , where he meets a punky French girl who dupes him into providing a home for her pet piranha and then promptly steals his car and dumps it in Dieppe . 
In producing and promoting `` Capital City , '' Thames has spent about as much as Shane Longman loses on a good day . 
The production costs are a not inconsiderable # 8 million ( $ 12.4 million ) , and would have been much higher had not the cost of the trading floor set been absorbed in the budget of `` Dealers , '' an earlier made-for-TV movie . 
Another half million quid went for a volley of full-page advertisements in six major British newspapers and for huge posters in the London subway . 
These expenses create a special incentive for `` Capital City 's '' producers to flog it , or a Yank-oriented version of it , in America . 
Thames 's U.S. marketing agent , Donald Taffner , is preparing to do just that . 
He is discreetly hopeful , citing three U.S. comedy series -- `` Three 's Company , '' `` Too Close for Comfort '' and `` Check It Out '' -- that had British antecedents . 
Perhaps without realizing it , Mr. Taffner simultaneously has put his finger on the problem and an ideal solution : `` Capital City '' should have been a comedy , a worthy sequel to the screwball British `` Carry On '' movies of the 1960s . 
The seeds already are in the script . 
The first episode concluded with a marvelously cute scene in which the trading-room crew minded a baby , the casualty of a broken marriage at the firm . 
And many in the young cast bear striking resemblances to American TV and movie personalities known for light roles . 
Joanna Kanska looks like a young Zsa Zsa Gabor ; William Armstrong , who plays Max , could pass for Hans Conreid , and Douglas Hodge ( Declan ) for James Farentino ; Rolf Saxon is a passable Tommy Noonan and Dorian Healy could easily double for Huntz Hall , the blank-faced foil of the Bowery Boys comedies . 
So , OK kids , everybody on stage for `` Carry On Trading '' : The cast is frantically searching the office for misplaced Japanese bonds that suddenly have soared in value because Dai-Ichi Kangyo Bank has just bought the White House . 
The pressure is too much for Zsa Zsa , who slaps a security guard . 
He backflips into a desktop computer terminal , which explodes , covering Huntz Hall 's face with microchips . 
And all the while , the bonds are in the baby 's diaper . 
It should run forever . 
Mr. Rustin is senior correspondent in the Journal 's London bureau . 
Axa-Midi Assurances of France gave details of its financing plans for its proposed $ 4.5 billion acquisition of Farmers Group Inc. , in amended filings with insurance regulators in the nine U.S. states where Farmers operates . 
The proposed acquisition is part of Sir James Goldsmith 's unfriendly takeover attempt for B.A.T Industries PLC , the British tobacco , retailing , paper and financial services concern that is parent of Los Angeles-based Farmers . 
In an attempt to appease U.S. regulators ' concern over a Goldsmith acquisition of Farmers , Sir James in August agreed to sell Farmers to Axa if he is successful in acquiring B.A.T . 
As part of the agreement , Axa agreed to invest $ 1 billion in Hoylake Investments Ltd. , Sir James 's acquisition vehicle . 
Of the total $ 5.5 billion to be paid to Hoylake by Axa , about $ 1 billion will come from available resources of Axa 's parent , Axa-Midi Group , $ 2.25 billion will be in the form of notes issued by Axa , and the remaining $ 2.25 billion will be in long-term bank loans . 
In an interview Thursday , Claude Bebear , chairman and chief executive officer of Axa , said his group has already obtained assurances from a group of banks led by Cie . 
Financiere de Paribas that they can provide the loan portion of the financing . 
The other banking companies in the group are Credit Lyonnais , Societe Generale , BankAmerica Corp. and Citicorp , he said . 
Mr. Bebear said Axa-Midi Group has `` more than $ 2.5 billion of non-strategic assets that we can and will sell '' to help pay off debt from the acquisition . 
He said the assets to be sold would be `` non-insurance '' assets , including a beer company and a real estate firm , and would n't include any pieces of Farmers . 
`` We wo n't put any burden on Farmers , '' he said . 
The amended filings also point out that under a new agreement , Hoylake has an absolute obligation to sell Farmers to Axa upon an acquisition of B.A.T . 
`` We hope that with what we did , the regulators will not need to evaluate Hoylake , and they can directly look at the agreement with us , because Hoylake wo n't be an owner of Farmers at anytime , '' Mr. Bebear said . 
Any change of control in Farmers needs approval of the insurance commissioners in the nine states where Farmers and its related companies are incorporated . 
The amended filings were required because of the new agreement between Axa and Hoylake , and to reflect the extension that Sir James received last month under British takeover rules to complete his proposed acquisition . 
Hoylake dropped its initial # 13.35 billion ( $ 20.71 billion ) takeover bid after it received the extension , but said it would launch a new bid if and when the propsed sale of Farmers to Axa receives regulatory approval . 
A spokesman for B.A.T said of the amended filings that , `` It would appear that nothing substantive has changed . 
The new financing structure is still a very-highly leveraged one , and Axa still plans to take out 75 % of Farmers ' earnings as dividends to service their debt . 
'' That dividend is almost double the 35 % currently taken out of Farmers by B.A.T , the spokesman added . 
`` It would have severe implications for Farmers ' policy holders . 
'' To fend off Sir James 's advances , B.A.T has proposed a sweeping restructuring that would pare it to a tobacco and financial services concern . 
Dismal sales at General Motors Corp. dragged the U.S. car and truck market down below year-ago levels in early October , the first sales period of the 1990 model year . 
The eight major domestic auto makers sold 160,510 North American-made cars in the first 10 days of October , a 12.6 % drop from a year earlier . 
Domestically built truck sales were down 10.4 % to 86,555 pickups , vans and sport utility vehicles . 
The heavy use of incentives to clear out 1989 models appears to have taken the steam , at least initially , out of 1990 model sales , which began officially Oct. 1 . 
This appears particularly true at GM , which had strong sales in August and September but saw its early October car and truck results fall 26.3 % from last year 's unusually high level . 
Overall , sales of all domestic-made vehicles fell 11.9 % from a year ago . 
Without GM , overall sales for the other U.S. automakers were roughly flat with 1989 results . 
Some of the U.S. auto makers have already adopted incentives on many 1990 models , but they may have to broaden their programs to keep sales up . 
`` We 've created a condition where , without incentives , it 's a tough market , '' said Tom Kelly , sales manager for Bill Wink Chevrolet in Dearborn , Mich . 
Car sales fell to a seasonally adjusted annual selling rate of 5.8 million vehicles , the lowest since October 1987 . 
The poor performance contrasts with a robust selling rate of almost eight million last month . 
Furthermore , dealers contacted late last week said they could n't see any immediate impact on sales of Friday 's steep market decline . 
GM 's domestic car sales dropped 24.3 % and its domestic trucks were down an even steeper 28.7 % from the same period a year ago . 
All of the GM divisions except Cadillac showed big declines . 
Cadillac posted a 3.2 % increase despite new competition from Lexus , the fledging luxury-car division of Toyota Motor Corp . 
Lexus sales were n't available ; the cars are imported and Toyota reports their sales only at month-end . 
The sales drop for the No. 1 car maker may have been caused in part by the end in September of dealer incentives that GM offered in addition to consumer rebates and low-interest financing , a company spokesman said . 
Last year , GM had a different program in place that continued rewarding dealers until all the 1989 models had been sold . 
Aside from GM , other car makers posted generally mixed results . 
Ford Motor Co. had a 1.8 % drop in domestic car sales but a 2.4 % increase in domestic truck sales . 
Chrysler Corp. had a 7.5 % drop in car sales , echoing its generally slow performance all year . 
However , sales of trucks , including the company 's popular minivans , rose 4.3 % . 
Honda Motor Co. 's sales of domestically built vehicles plunged 21.7 % from a year earlier . 
Honda 's plant in Marysville , Ohio , was gearing up to build 1990 model Accords , a Honda spokesman said . 
`` We 're really confident everything will bounce back to normal , '' he added . 
Separately , Chrysler said firm prices on its 1990-model domestic cars and minivans will rise an average of 5 % over comparably equipped 1989 models . 
Firm prices were generally in line with the tentative prices announced earlier this fall . 
At that time , Chrysler said base prices , which are n't adjusted for equipment changes , would rise between 4 % and 9 % on most vehicle . 
a - Totals include only vehicle sales reported in period . 
c - Domestic car d - Percentage change is greater than 999 % . 
x - There were 8 selling days in the most recent period and 8 a year earlier . 
Percentage differences based on daily sales rate rather than sales volume . 
Antonio L. Savoca , 66 years old , was named president and chief executive officer of the Atlantic Research Corp. subsidiary . 
Mr. Savoca had been a consultant to the subsidiary 's rocket-propulsion operations . 
Mr. Savoca succeeds William H. Borten , who resigned to pursue personal interests . 
Sequa makes and repairs jet engines . 
It also has interests in military electronics and electro-optics , marine transportation and machinery used to make food and beverage cans . 
It was n't so long ago that a radio network funded by the U.S. Congress -- and originally by the Central Intelligence Agency -- was accused by officials here of employing propagandists , imperialists and spies . 
Now , the network has opened a news bureau in the Hungarian capital . 
Employees held an open house to celebrate and even hung out a sign : `` Szabad Europa Radio '' -- Radio Free Europe . 
`` I think this is a victory for the radio , '' says Barnabas de Bueky , a 55-year-old former Hungarian refugee who works in the Munich , West Germany , headquarters as deputy director of the Hungarian service . 
In fact , the network hopes to set up offices in Warsaw and anywhere else in the East Bloc that will have it . 
But the rapid changes brought on by glasnost and open borders are altering the network 's life in more ways than one . 
In fact , Radio Free Europe is in danger of suffering from its success . 
While the network currently can operate freely in Budapest , so can others . 
In addition , competition for listeners is getting tougher in many ways than when broadcasting here was strictly controlled . 
Instead of being denounced as an evil agent of imperialism , Radio Free Europe is more likely to draw the criticism that its programs are too tame , even boring . 
`` They have a lot to do these days to compete with Hungarian radio , '' says Andrew Deak , a computer-science student at the Technical University in Budapest . 
`` The Hungarian { radio } reporters seem better informed and more critical about about what 's going on here . 
'' Indeed , Hungary is in the midst of a media explosion . 
Boys on busy street corners peddle newspapers of every political stripe . 
Newsstands are packed with a colorful array of magazines . 
Radio and television are getting livelier and bolder . 
The British Broadcasting Corp. and the U.S. State Department 's Voice of America broadcast over Hungarian airwaves , though only a few hours a day each in Hungarian . 
Australian press magnate Rupert Murdoch has bought 50 % stakes in two popular and gossipy Hungarian newspapers , while Britain 's Robert Maxwell has let it be known here that he is thinking about similar moves . 
But Radio Free Europe does n't plan to fade away . 
With its mission for free speech and the capitalist way , the network 's staff says it still has plenty to do -- in Hungary and in the `` Great Eastern Beyond . 
'' Radio Free Europe and its sister station for the Soviet Union , Radio Liberty , say they wo n't cut back their more than 19 hours of daily broadcasts . 
They are still an important source of news for 60 million listeners in 23 exotic tongues : from Bulgarian and Belorussian to Kazakh and Kirghiz . 
The establishment of its first bureau in Warsaw Pact territory shows the depth of some of the changes in Eastern Europe . 
Months before the decision by the Hungarian Communist Party to rename itself Socialist and try to look more appealing to voters , the country 's rulers were trying to look more hospitable . 
It proved a perfect time for Radio Free Europe to ask for permission to set up office . 
Not only did the Hungarian Ministry of Foreign Affairs approve Radio Free Europe 's new location , but the Ministry of Telecommunications did something even more amazing : `` They found us four phone lines in central Budapest , '' says Geza Szocs , a Radio Free Europe correspondent who helped organize the Budapest location . 
`` That is a miracle . 
'' It 's a far cry from the previous treatment of the network , which had to overcome jamming of its frequencies and intimidation of local correspondents ( who filed reports to the network by phone , secret messengers or letters ) . 
In fact , some of the network 's Hungarian listeners say they owe Radio Free Europe loyalty because it was responsible in many ways for keeping hope alive through what one writer here calls the `` Dark Ages of the 20th Century . 
'' `` During the past four years , many of us have sat up until late at night listening to our radios , '' says the writer . 
`` There were some very brave broadcasts . 
'' The listeners , too , had to be brave . 
Through much of the post-World War II period , listening to Western broadcasts was a crime in Hungary . 
`` When we listen to the Europe station , my mother still gets nervous , '' says a Budapest translator . 
`` She wants to turn down the volume and close the curtains . 
'' Now , the toughest competition for Radio Free Europe comes during the late-night slot . 
Hungarian radio often saves its most politically outspoken broadcasts for around midnight . 
Television , which most of the time is considered rather tame , has entered the running with a new program , `` The End of the Day , '' which comes on after 11 p.m . 
It is a talk show with opposition leaders and political experts who discuss Hungary 's domestic problems as well as foreign affairs . 
Those who want to hear even more radical views have to get up at five on Sunday morning for `` Sunday Journal , '' on Hungarian Radio . 
The competitive spirit is clearly influencing Radio Free Europe , which is trying to beef up programs . 
The Budapest office plans to hire free-lance reporters to cover the latest happenings in Hungarian country towns from Nagykanizsa in the west to Nyiregyhaza in the east . 
The Hungarian service has a daily 40-minute news show called Newsreel , with international and domestic news , plus a daily news review of opinions from around the world . 
There 's also a host of new programs , trying to lighten up on the traditional diet of politics . 
A daily 35-minute program called `` The March of Time '' tries to find interesting tidbits of lighthearted news and gossip from around the world . 
There 's a program for women and a science show . 
And to attract younger listeners , Radio Free Europe intersperses the latest in Western rock groups . 
The Pet Shop Boys are big this year in Budapest . 
`` We are starving for all the news , '' says Mr. Deak , the student . 
`` Every moment we want to know everything about the world . 
'' Proposals for government-operated `` national service , '' like influenza , flare up from time to time , depress the resistance of the body politic , run their course , and seem to disappear , only to mutate and afflict public life anew . 
The disease metaphor comes to mind , of course , not as an aspersion on the advocates of national service . 
Rather , it is born of frustration with having to combat constantly changing strains of a statist idea that one thought had been eliminated in the early 1970s , along with smallpox . 
It is back with us again , in the form of legislation to pay volunteers under a `` National and Community Service Act , '' a proposal with a serious shot at congressional passage this fall . 
Why does the national-service virus keep coming back ? Perhaps it is because utopian nostalgia evokes both military experience and the social gospel . 
If only we could get America 's wastrel youth into at least a psychic uniform we might be able to teach self-discipline again and revive the spirit of giving . 
A quarter of a century ago national service was promoted as a way of curing the manifest inequities of the draft -- by , of all things , expanding the draft . 
Those of us who resisted the idea then suspect today that an obligation of government service for all young people is still the true long-term aim of many national-service backers , despite their protests that present plans contain no coercion . 
Choice of the volunteer military in the 1970s seemed to doom national service as much as the draft . 
But the virus was kept alive in sociology departments until a couple of years ago , when it again was let loose . 
This time it attempted to invade two connected problems , the rising cost of higher education and the rising expense to the federal government of educational grants and loans . 
Why not keep and even expand the loans and grants , the advocates reasoned , but require some form of service from each recipient ? Military service , moreover , could be a national-service option . 
Thus , undoubtedly it was hoped that the new strain of national service would prove contagious , infecting patriotic conservatives , pay-as-you-go moderates , and idealistic liberals . 
The Democratic Leadership Council , a centrist group sponsoring the plan , surely thought it might help the party to attract support , especially among college students and their parents . 
A provision allowing grants to be applied to first-home purchases was added to appeal to those who had had enough of schooling . 
The DLC plan envisaged `` volunteers '' planting trees , emptying bedpans , tutoring children , and assisting librarians for $ 100 a week , tax free , plus medical care . 
With a tax-free $ 10,000 voucher payment at the end of each year , the volunteers would be making a wage comparable to $ 17,500 a year . 
Mind you , most of `` the volunteers '' would be unskilled 17 - to 18-year-olds , some not even high school graduates , and many saving money by living at home . 
They would be doing better financially under national service than many taxpayers working at the same kinds of jobs and perhaps supporting families . 
As it happened , political resistance developed among educational and minority interests that count on the present education grant system , so the national-service devotees decided to abandon the supposedly crucial principle of `` give in order to get . 
'' Opposition to national service from the Pentagon , which wants to protect its own recruitment process , also led to the military-service option being dropped . 
Clearly , a new rationale for national service had to be cooked up . 
What better place to turn than Sen. Edward Kennedy 's Labor Committee , that great stove of government expansionism , where many a stagnant pot of porridge is kept on the back burner until it can be brought forward and presented as nouvelle cuisine ? In this case , the new recipe for national service called for throwing many assorted legislative leftovers into one kettle : a demonstration project for educational aid ( particularly satisfying to the DLC and Sen. Sam Nunn ) , a similar demonstration program for youth conservation ( a la Sen. Chris Dodd ) , a competitive grants program to states to spark youth and senior citizen volunteer projects ( a Kennedy specialty ) , a community service work-study program for students ( pleasing to the palate of Sen. Dale Bumpers , among others ) , plus engorgement of the VISTA volunteer program and the Retired Senior Volunteer , Foster Grandparent , and Senior Companion programs . 
Before the menu is printed , the House may add more ingredients , also changing the initial price , now posted at some $ 330 million . 
It is widely known that `` too many cooks spoil the broth , '' but that wisdom does not necessarily reflect the view of the cooks , especially if they are senators . 
The `` omnibus '' bill coming out of Congress may be unwholesome glop , but the assorted chefs are happy and the restaurant is pushing the dish very hard . 
The aroma of patronage is in the air . 
Is the voluntary sector so weak that it needs such unsolicited assistance ? On the contrary , it is as robust as ever . 
According to the Gallup Poll , American adults contribute an average of two hours a week of service , while financial contributions to charity in the 1980s have risen 30 % ( adjusted for inflation ) . 
Even if government does see various `` unmet needs , '' national service is not the way to meet them . 
If we want to support students , we might adopt the idea used in other countries of offering more scholarships based on something called `` scholarship , '' rather than on the government 's idea of `` service . 
'' Or we might provide a tax credit for working students . 
What we do not need to do is start a war , and then try to justify it by creating a GI Bill . 
To the extent we lack manpower to staff menial jobs in hospitals , for example , we should raise pay , pursue labor-saving technology , or allow more legal immigration , rather than overpay high school graduates as short-term workers and cause resentment among permanent workers paid lesser amounts to do the same jobs . 
Will national service , in the current highly politicized and opportunistic form exert enough appeal to get adopted ? Not necessarily . 
Polls show wide , generalized support for some vague concept of service , but the bill now under discussion lacks any passionate public backing . 
Nonetheless , Senate Democrats are organizing a roll of supporting `` associations , '' `` societies '' and `` councils , '' some of which may hope to receive the paid `` volunteers . 
'' So far , the president seems ill-disposed to substitute any of the omnibus for his own free-standing proposal to endow a `` Points of Light '' foundation with $ 25 million to inform citizens of all ages and exhort them to genuine volunteerism . 
However , even this admirable plan could become objectionable if the White House gives in to congressional Democratic pressure to add to the scope of the president 's initiative or to involve the independent foundation in `` brokering '' federal funds for volunteer projects . 
There 's no need for such concessions . 
The omnibus can be defeated , the virus controlled , and real service protected . 
National service , the utopian idea , still wo n't go away then , of course , but the millions of knee-socked youth performing works of `` civic content '' will be mobilized only in the imagination of their progenitors . 
Mr. Chapman is a fellow at the Indianapolis-based Hudson Institute . 
This article is adapted from remarks at a Hoover Institution conference on national service , in which Mr. Szanton also participated . 
( See related story : `` Target Expenditures Narrowly '' -- WSJ Oct. 16 , 1989 ) Drug Emporium Inc. said Gary Wilber , 39 years old , who had been president and chief operating officer for the past year , was named chief executive officer of this drugstore chain . 
He succeeds his father , Philip T. Wilber , who founded the company and remains chairman . 
Robert E. Lyons III , 39 , who headed the company 's Philadelphia region , was appointed president and chief operating officer , succeeding Gary Wilber . 
American Physicians Service Group Inc. said it purchased about 42 % of Prime Medical Services Inc. for about $ 5 million from Texas American Energy Corp . 
American Physicians said it also replaced four Texas American representatives on Prime 's five-member board . 
American provides a variety of financial services to doctors and hospitals . 
Prime , based in Bedminster , N.J. , provides management services to cardiac rehabilitation clinics and diagnostic imaging centers . 
For the year ended June 30 , Prime had a net loss of $ 3 million on sales of $ 13.8 million . 
The inflation-adjusted growth rate for France 's gross domestic product for the second quarter was revised upward to 0.8 % from the previous three months from the initial estimate of 0.7 % , the National Statistics Institute said . 
The state agency said the latest revision left the growth rate for the first-quarter compared with the previous three months unchanged at 1.3 % . 
If the economy continues to expand by 0.8 % a quarter for the rest of the year , it would leave GDP growth for all of 1989 at 3 % , the institute said . 
That would be down from the 3.8 % rise posted in 1988 . 
The Canadian government announced a new , 12-year Canada Savings Bond issue that will yield investors 10.5 % in the first year . 
The annual interest rate for each of the next 11 years will be set each fall , when details of a new series are released . 
Canada Savings Bonds are major government instruments for meeting its financial requirements . 
The government has about 41.4 billion Canadian dollars ( US$ 35.2 billion ) of such bonds currently outstanding . 
Only Canadian residents are permitted to buy Canada Savings Bonds , which may be redeemed any time at face value . 
The bonds go on sale Oct. 19 . 
The debate over National Service has begun again . 
After a decade in which more than 50 localities established their own service or conservation corps and dozens of school systems made community service a prerequisite to high-school graduation , the focus has shifted to Washington . 
At least 10 bills proposing one or another national program were introduced in Congress this spring . 
One , co-sponsored by Sen. Sam Nunn ( D. , Ga . 
) and Rep. Dave McCurdy ( D. , Okla. ) , would have restricted federal college subsidies to students who had served . 
An omnibus bill assembled by Sen. Edward Kennedy ( D. , Mass. ) , and including some diluted Nunn-McCurdy provisions along with proposals by fellow Democratic Sens. Claiborne Pell , Barbara Mikulski and Christopher Dodd , has been reported out of the Senate Labor Committee . 
It might well win Senate passage . 
President Bush has outlined his own Youth Entering Service ( YES ) plan , though its details remain to be specified . 
What is one to think of all this ? Doctrine and special interests govern some responses . 
People eager to have youth `` pay their dues to society '' favor service proposals -- preferably mandatory ones . 
So do those who seek a `` re-energized concept of citizenship , '' a concept imposing stern obligations as well as conferring rights . 
Then there are instinctive opponents . 
To libertarians , mandatory service is an abomination and voluntary systems are illegitimate uses of tax money . 
Devotees of the market question the value of the work national service would perform : If the market wo n't pay for it , they argue , it ca n't be worth its cost . 
Elements of the left are also reflexively opposed ; they see service as a cover for the draft , or fear the regimentation of youth , or want to see rights enlarged , not obligations . 
But what about those of us whose views are not predetermined by formula or ideology ? How should we think about national service ? Let 's begin by recognizing a main source of confusion -- `` national service '' has no agreed meaning . 
Would service be voluntary or compulsory ? Short or long ? Part-time or full-time ? Paid or unpaid ? Would participants live at home and work nearby or live in barracks and work on public lands ? What kinds of work would they do ? What does `` national '' mean ? Would the program be run by the federal government , by local governments , or by private voluntary organizations ? And who would serve ? Only males , as with the draft , or both sexes ? Youth only or all ages ? Middle-class people , or poor people , or a genuine cross-section ? Many or few ? Those are not trivial questions , and the label `` national service '' answers none of them . 
Then how should we think about national service ? As a starting point , here are five propositions : 1 . 
Consider the ingredients , not the name . 
Ignore `` national service '' in the abstract ; consider specific proposals . 
They will differ in crucial ways . 
2 . 
`` Service '' should be service . 
As commonly understood , service implies sacrifice . 
It involves accepting risk , or giving up income , or deferring a career . 
It follows that proposals like Nunn-McCurdy , whose benefits to enrollees are worth some $ 17,500 a year , do not qualify . 
There is a rationale for such bills : Federal subsidies to college students amount to `` a GI Bill without the GI '' ; arguably those benefits should be earned , not given . 
But the earnings exceed by 20 % the average income of young high-school graduates with full-time jobs . 
Why call that service ? 3 . 
Encouragement is fine ; compulsion is not . 
Compelled service is unconstitutional . 
It is also unwise and unenforceable . 
( Who will throw several hundred thousand refusers in jail each year ? ) But through tax policy and in other ways the federal government encourages many kinds of behavior . 
It should also encourage service -- preferably by all classes and all ages . 
Its encouragement should strengthen and not undercut the strong tradition of volunteering in the U.S. , should build on the service programs already in existence , and should honor local convictions about which tasks most need doing . 
4 . 
Good programs are not cheap . 
Enthusiasts assume that national service would get important work done cheaply : forest fires fought , housing rehabilitated , students tutored , day-care centers staffed . 
There is important work to be done , and existing service and conservation corps have shown that even youths who start with few skills can do much of it well -- but not cheaply . 
Good service programs require recruitment , screening , training and supervision -- all of high quality . 
They involve stipends to participants . 
Full-time residential programs also require housing and full-time supervision ; they are particularly expensive -- more per participant than a year at Stanford or Yale . 
Non-residential programs are cheaper , but good ones still come to some $ 10,000 a year . 
Are they worth that ? Evaluations suggest that good ones are -- especially so if the effects on participants are counted . 
But the calculations are challengeable . 
5 . 
Underclass youth are a special concern . 
Are such expenditures worthwhile , then ? Yes , if targeted . 
People of all ages and all classes should be encouraged to serve , but there are many ways for middle-class kids , and their elders , to serve at little public cost . 
They can volunteer at any of thousands of non-profit institutions , or participate in service programs required by high schools or encouraged by colleges or employers . 
Underclass youth do n't have those opportunities . 
They are not enrolled in high school or college . 
They are unlikely to be employed . 
And they have grown up in unprecedentedly grim circumstances , among family structures breaking down , surrounded by self-destructive behaviors and bleak prospects . 
But many of them can be quite profoundly reoriented by productive and disciplined service . 
Some wo n't accept the discipline ; others drop out for other reasons . 
But some whom nothing else is reaching are transformed . 
Learning skills , producing something cooperatively , feeling useful , they are no longer dependent -- others now depend on them . 
Even if it is cheaper to build playgrounds or paint apartments or plant dune-grass with paid professionals , the effects on the young people providing those services alter the calculation . 
Strictly speaking , these youth are not performing service . 
They are giving up no income , deferring no careers , incurring no risk . 
But they believe themselves to be serving , and they begin to respect themselves ( and others ) , to take control of their lives , to think of the future . 
That is a service to the nation . 
It is what federal support should try hardest to achieve . 
Mr. Szanton , a Carter administration budget official , heads his own Washington-based strategic planning firm . 
He is a co-author of `` National Service : What Would It Mean ? '' ( Lexington Books , 1986 ) . 
( See related story : `` Put Brakes on the Omnibus '' -- WSJ Oct. 16 , 1989 ) Government officials here and in other countries laid plans through the weekend to head off a Monday market meltdown -- but went out of their way to keep their moves quiet . 
Federal Reserve Chairman Alan Greenspan was on the telephones , making it clear to officials in the U.S. and abroad that the Fed was prepared to inject massive amounts of money into the banking system , as it did in October 1987 , if the action were needed to prevent a financial crisis . 
And at the Treasury , Secretary Nicholas Brady talked with friends and associates on Wall Street while Assistant Secretary David Mullins carefully analyzed data on the Friday market plunge . 
But the officials feared that any public announcements would only increase market jitters . 
In addition , officials at the Fed and in the Bush administration decided that avoiding overt actions and statements over the weekend would give them more strength and flexibility should Friday 's market drop turn into this morning 's rout . 
`` The disadvantage at this point is that anything you do that looks like you are doing too much tends to reinforce a sense of crisis , '' said one government official , insisting on anonymity . 
The Fed 's efforts at secrecy were partly foiled Sunday morning , when both the New York Times and the Washington Post carried stories quoting a senior Fed official saying the central bank was prepared to pour cash into the banking system Monday morning . 
Fed Chairman Greenspan was surprised by both stories , according to knowledgeable sources , and insisted he had n't authorized any public comment . 
Nevertheless , Fed officials acknowledged the stories were reasonably accurate portrayals of the central bank 's game plan . 
It is prepared to assume the same role it played in October 1987 , providing money to the markets if necessary to keep the financial system afloat . 
The Fed provides money to the banking system by buying government securities from financial institutions . 
The reticence of federal officials was evident in the appearance Sunday of Budget Director Richard Darman on ABC 's `` This Week . 
'' `` Secretary of the Treasury Brady and Chairman Greenspan and the chairman of the SEC and others have been in close contact . 
I 'm sure they 'll do what 's right , what 's prudent , what 's sensible , '' he said . 
When it was suggested his comment was a `` non-answer , '' Mr. Darman replied : `` It is a non-answer . 
But , in this context , that 's the smart thing to do . 
'' At the Treasury , Secretary Brady issued a statement minimizing the stock market 's drop . 
`` Today 's stock market decline does n't signal any fundamental change in the condition of the economy , '' he said . 
`` The economy remains well-balanced , and the outlook is for continued moderate growth . 
'' But administration officials conceded that Friday 's drop carried the chance of further declines this week . 
`` One possibility is that this is a surgical setback , reasonably limited in its breadth , and not a major problem , '' said one senior administration official , who also asked that he not be named . 
`` The other is that we see another major disaster , like two years ago . 
I think that 's less likely . 
'' Nevertheless , Fed Chairman Greenspan and Vice Chairman Manuel Johnson were in their offices Sunday evening , monitoring events as they unfolded in markets around the world . 
The action was expected to begin with the opening of the New Zealand foreign exchange markets at 5 p.m. EST -- when stocks there plunged -- and to continue as the trading day began later in the evening in Tokyo and through early this morning in Europe . 
Both the Treasury and the Fed planned to keep market rooms operating throughout the night to monitor the developments . 
In Tokyo , share prices dropped sharply by 1.7 % in early Monday morning trading . 
After the initial slide , the market appeared to be turning around but by early afternoon was headed lower . 
In the Bush administration , the lead is being taken by Treasury Secretary Brady , Undersecretary Robert Glauber and Assistant Secretary Mullins . 
The three men worked together on the so-called Brady Commission , headed by Mr. Brady , which was established after the 1987 crash to examine the market 's collapse . 
As a result they have extensive knowledge in financial markets , and financial market crises . 
Mr. Brady was at the White House Friday afternoon when the stock market 's decline began . 
He was quickly on the phone with Mr. Mullins , who in turn was talking with the chairmen of the New York and Chicago exchanges . 
Later , Mr. Brady phoned Mr. Greenspan , SEC Chairman Richard Breeden and numerous contacts in New York and overseas . 
Aides say he continued to work the phones through the weekend . 
Administration officials say President Bush was briefed throughout Friday afternoon and evening , even after leaving for Camp David . 
He had frequent telephone consultations with Mr. Brady and Michael Boskin , chairman of the counsel of economic advisers . 
Government officials tried throughout the weekend to render a business-as-usual appearance in order to avoid any sense of panic . 
Treasury Undersecretary David Mulford , for instance , was at a meeting of the Business Council in Hot Springs , Va. , when the stock market fell , and remained there through the following day . 
And as of last night , Fed Chairman Greenspan had n't canceled his plans to address the American Bankers Association convention in Washington at 10 a.m. this morning . 
Ironically , Mr. Greenspan was scheduled to address the same convention in Dallas on Oct. 20 , 1987 . 
He flew to Dallas on Oct. 19 , when the market plummeted 508 points , but then turned around the next morning and returned to Washington without delivering his speech . 
( See related story : `` Abreast of the Market : Special Steps Did n't Cool Fever to Sell '' -- WSJ Oct. 16 , 1989 ) Following is a weekly listing of unadited net asset values of publicly traded investment fund shares , reported by the companies as of Friday 's close . 
Also shown is the closing listed market price or a dealer-to-dealer asked price of each fund 's shares , with the percentage of difference . 
b - As of Thursday 's close . 
c - Translated at Commercial Rand exchange rate . 
e - In Canadian dollars . 
f - As of Wednesday 's close . 
g - 10.06.89 NAV:22.15 . 
z - Not available . 
Put down that phone . 
Walk around the room ; take two deep breaths . 
Resist the urge to call your broker and sell all your stocks . 
That 's the advice of most investment professionals after Friday 's 190-point drop in the Dow Jones Industrial Average . 
No one can say for sure what will happen today . 
And investment pros are divided on whether stocks will perform well or badly in the next six months . 
But they 're nearly unanimous on one point : Do n't sell into a panic . 
Investors who sold everything after the crash of 1987 lived to regret it . 
Even after Friday 's plunge , the Dow Jones Industrial Average was 48 % above where it landed on Oct. 19 two years ago . 
Panic selling also was unwise during other big declines in the past . 
The crash of 1929 was followed by a substantial recovery before the great Depression and awful bear market of the 1930s began . 
The `` October massacres '' of 1978 and 1979 were scary , but did n't lead to severe or sustained downturns . 
Indeed , some pros see Friday 's plunge , plus any further damage that might occur early this week , as a chance for bargain hunting . 
`` There has been a lot of emotional selling that presents a nice buying opportunity if you 've got the cash , '' says Stephen B. Timbers , chief investment officer of Chicago-based Kemper Financial Services Inc . 
But most advisers think the immediate course for individual investors should be to stand pat . 
`` When you see a runaway train , '' says Steve Janachowski , partner in the San Francisco investment advisory firm Brouwer & Janachowski , `` you wait for the train to stop . 
'' Even for people who expect a bear market in coming months -- and a sizable number of money managers and market pundits do -- the advice is : Wait for the market to bounce back , and sell shares gradually during rallies . 
The best thing individual investors can do is `` just sit tight , '' says Marshall B. Front , executive vice president and head of investment counseling at Stein Roe & Farnham Inc. , a Chicago-based investment counseling firm that manages about $ 18 billion . 
On the one hand , Mr. Front says , it would be misguided to sell into `` a classic panic . 
'' On the other hand , it 's not necessarily a good time to jump in and buy . 
`` This is all emotion right now , and when emotion starts to run , it can run further than anyone anticipates , '' he said . 
`` So it 's more prudent to wait and see how things stabilize . 
'' Roger Ibbotson , professor of finance at Yale University and head of the market information firm Ibbotson Associates Inc. , says , `` My real advice would be to just ride through it . 
Generally , it is n't wise to be in and out '' of the stock market . 
Mr. Ibbotson thinks that this week is `` going to be a roller-coaster week . 
'' But he also thinks it is `` a good week to consider buying . 
'' John Snyder , former president of the Los Angeles chapter of the National Association of Investors Corp. , an organization of investment clubs and individual investors , says his fellow club members did n't sell in the crash of 1987 , and see no reason to sell now . 
`` We 're dedicated long-term investors , not traders , '' he says . 
`` We understand panics and euphoria . 
And we hope to take advantage of panics and buy stocks when they plunge . 
'' One camp of investment pros sees what happened Friday as an opportunity . 
Over the next days and weeks , they say , investors should look for stocks to buy . 
Friday 's action `` was an old-fashioned panic , '' says Alfred Goldman , director of technical market analysis for A.G. Edwards & Sons in St. Louis . 
`` Stocks were being thrown out of windows at any price . 
'' His advice : `` You ought to be there with a basket catching them . 
'' James Craig , portfolio manager for the Denver-based Janus Fund , which has one of the industry 's better track records , started his buying during Friday 's plunge . 
Stocks such as Hershey Foods Corp. , Wal-Mart Stores Inc. , American International Group Inc. and Federal National Mortgage Association became such bargains that he could n't resist them , he says . 
And Mr. Craig expects to pick up more shares today . 
`` It will be chaotic at first , but I would not be buying if I thought we were headed for real trouble , '' he says . 
He argues that stocks are reasonably valued now , and that interest rates are lower now than in the fall of 1987 . 
Mr. Front of Stein Roe suggests that any buying should `` concentrate in stocks that have lagged the market on the up side , or stocks that have been beaten down a lot more than the market in this correction . 
'' His firm favors selected computer , drug and pollution-control stocks . 
Other investment pros are more pessimistic . 
They say investors should sell stocks -- but not necessarily right away . 
Many of them stress that the selling can be orderly , gradual , and done when stock prices are rallying . 
On Thursday , William Fleckenstein , a Seattle money manager , used futures contracts in his personal account to place a bet that the broad market averages would decline . 
He thinks the underlying inflation rate is around 5 % to 6 % , far higher than most people suppose . 
In the pension accounts he manages , Mr. Fleckenstein has raised cash positions and invested in gold and natural gas stocks , partly as an inflation hedge . 
He thinks government officials are terrified to let a recession start when government , corporate and personal debt levels are so high . 
So he thinks the government will err on the side of rekindled inflation . 
As a result , Mr. Fleckenstein says , `` I think the ball game 's over , '' and investors are about to face a bear market . 
David M. Jones , vice president at Aubrey G. Lanston & Co. , recommends Treasury securities ( of up to five years ' maturity ) . 
He says the Oct. 6 employment report , showing slower economic growth and a severe weakening in the manufacturing sector , is a warning sign to investors . 
One strategy for investors who want to stay in but hedge their bets is to buy `` put '' options , either on the individual stocks they own or on a broad market index . 
A put option gives its holder the right ( but not the obligation ) to sell a stock ( or stock index ) for a specified price ( the strike price ) until the option expires . 
Whether this insurance is worthwhile depends on the cost of an option . 
The cost , or premium , tends to get fat in times of crisis . 
Thus , buying puts after a big market slide can be an expensive way to hedge against risk . 
The prices of puts generally did n't soar Friday . 
For example , the premium as a percentage of the stock price for certain puts on Eli Lilly & Co. moved up from 3 % at Thursday 's close to only 3.3 % at Friday 's close , even though the shares dropped more than $ 5.50 . 
But put-option prices may zoom when trading resumes today . 
It 's hard to generalize about a reasonable price for puts . 
But investors should keep in mind , before paying too much , that the average annual return for stock holdings , long-term , is 9 % to 10 % a year ; a return of 15 % is considered praiseworthy . 
Paying , say , 10 % for insurance against losses takes a deep bite out of the return . 
James A. White and Tom Herman contributed to this article . 
( See related story : `` Gurus ' Views Vary , But Crash Not Seen '' -- WSJ Oct. 16 , 1989 ) Coldwell Banker Commercial Group said it sold $ 47 million of common stock to its employees at $ 10 a share , giving them a total stake of more than 40 % in the commercial real estate brokerage firm . 
The firm , which was acquired in April from Sears , Roebuck & Co. in a management-led buy-out , had planned to sell up to $ 56.4 million of stock , or a 50 % stake in the company , to its 5,000 employees . 
Though the offering did n't sell out , James J. Didion , chairman and chief executive officer , said , `` We 're pretty proud of the employees ' response . 
'' He noted that unlike an employee stock ownership plan , where a company usually borrows money from third party lenders to buy stock that it sets aside to award employees over time , here employees had to fork out their own cash for the stock . 
`` They came up with their own money instead of borrowed money , '' Mr. Didion said . 
`` It 's totally different . 
'' He said the offering was designed to create long-term incentives for employees . 
`` We 're in a service business , and in that context , it 's vital to have your employees involved in the ownership so they have a stake in the success . 
'' The brokerage firm wo n't pay a dividend on the stock . 
Employees have the right to trade stock among themselves , and the company will establish an internal clearing house for these transactions . 
They may also eventually sell the shares to third parties , but the outside investors who own the remaining 60 % of Coldwell Banker have the right to first refusal . 
Those outside investors in Coldwell Banker include Carlyle Group , a closely held Washington , D.C. , merchant banking firm whose co-chairman is Frank Carlucci , former secretary of defense ; Frederic V. Malek , senior adviser to Carlyle Group ; Mellon Family Trust of Pittsburgh ; Westinghouse Credit Corp. , the financial services unit of Westinghouse Electric Corp. ; Bankers Trust Co. , a unit of Bankers Trust New York Corp. ; and a group of Japanese investors represented by the investment banking unit of Tokyo-based Sumitomo Bank . 
Bankers Trust and Sumitomo financed the $ 300 million acquisition from Sears Roebuck . 
Coldwell Banker also named three outside director nominees for its 17 member board . 
The nominees are Gary Wilson , chief financial officer of Walt Disney Co. ; James Montgomery , chief executive officer of Great Western Financial Corp. ; and Peter Ubberroth , former commissioner of baseball and now a private investor . 
The first major event this morning in U.S. stock and futures trading may be a pause at the Chicago Mercantile Exchange . 
Under a reform arising from the 1987 crash , trading in the Merc 's stock-index futures will break for 10 minutes if the contract opens and stays five points from Friday 's close , a move equal to 40 points on the Dow Jones Industrial Average . 
The aim of the interruption would be to ease the opening of the New York Stock Exchange , which would be hammered by such a volatile move on the Merc . 
That early-morning breather is just one of a number of safeguards adopted after the 1987 crash . 
The Big Board also added computer capacity to handle huge surges in trading volume . 
Several of those post-crash changes kicked in during Friday 's one-hour collapse and worked as expected , even though they did n't prevent a stunning plunge . 
But the major `` circuit breakers '' have yet to be evaluated . 
A deeper market plunge today could give them their first test . 
A further slide also would resurrect debate over a host of other , more sweeping changes proposed -- but not implemented -- after the last crash . 
Most notably , several of the regulatory steps recommended by the Brady Task Force , which analyzed the 1987 crash , would be revived -- especially because that group 's chairman is now the Treasury secretary . 
The most controversial of the Brady recommendations involved establishing a single overarching regulator to handle crucial cross-market questions , such as setting consistent margin requirements for the stock and futures markets . 
But for the moment , attention focuses on the reforms that were put into place , and market regulators and participants said the circuit breakers worked as intended . 
Big Board and Merc officials expressed satisfaction with the results of two limits imposed on of the Merc 's Standard & Poor 's 500 contract , as well as `` hot-line '' communications among exchanges . 
Those pauses -- from 2:07 p.m. to 2:30 p.m. CDT and from 2:45 p.m. until the close of trading a half-hour later -- forced traders to buy and sell contracts at prices at or higher than their frozen levels . 
During the first halt , after the S&P index had fallen 12 points , the Big Board 's `` Sidecar '' computer program automatically was triggered . 
That system is designed to separate computer-generated program trades from all other trades to help exchange officials resolve order imbalances in individual stocks . 
One Merc broker compared the action in the S&P pit during the two freezes to a fire at a well-drilled school . 
`` You do n't want the fire but you know what to do , '' said Howard Dubnow , an independent floor broker and a Merc governor . 
`` There was no panic . 
The system worked the way we devised it to work . 
'' After reopening for about 15 minutes , the S&P index tumbled to its 30-point limit and the second freeze went into effect . 
Traders then spent the last half-hour `` watching to see if the Dow would drop 250 points , '' Mr. Dubnow added , referring to the level at which the stock market itself would have closed for an hour . 
One observer estimated that 80 % to 90 % of the S&P traders `` were just standing around watching . 
'' But the 250-point circuit breaker never had to kick in , and freezes on the Chicago Board of Trade 's Major Market Index also were n't triggered . 
The MMI and the S&P 500 are the two major indexes used by program traders to run their computerized trading strategies . 
The programs are considered by many to be a major cause of the 1987 crash . 
The process of post-crash reforms began with calls to remake the markets and wound up a year later with a series of rather technical adjustments . 
In October 1987 , just after the market drop , Washington was awash in talk of sweeping changes in the way the financial markets are structured and regulated . 
Over the next year that grand agenda was whittled down to a series of steps to soften big stock drops by interrupting trading to give market players time to pause and reconsider positions . 
In addition , limits were placed on computer-driven trading , and steps were taken to better link the stock and futures markets . 
Few changes were made in the way the markets are regulated . 
At the outset the prime target was program trading , which was much discussed but little understood on Capitol Hill . 
There were also calls to strip the stock markets of `` derivative '' products , such as stock-index futures and options , which Federal Judge Stanley Sporkin , for example , likened to `` barnacles attached to the basic market . 
'' And there was much criticism of the New York Stock Exchange 's system of having stock trades flow through specialists , or market makers . 
When the Brady Task Force 's powerful analysis of the crash was released in January 1988 , it immediately reshaped the reformers ' agenda . 
Arguing that the separate financial marketplaces acted as one , and concluding that the crash had `` raised the possibility of a full-scale financial system breakdown , '' the presidential task force called for establishing a super-regulator to oversee the markets , to make margins consistent across markets , to unify clearing systems and to install circuit breakers . 
Only the last of those recommendations ever was implemented . 
The Reagan White House held the Brady recommendations at arm 's length and named a second panel -- the Working Group on the Financial Markets -- to review its analysis and those of other crash studies . 
In May 1988 , the Working Group , made up of representatives from the Federal Reserve , the Treasury , the Securities and Exchange Commission , and the Commodity Futures Trading Commission , finally endorsed only circuit breakers . 
After several more months of arguments among various stock exchanges and futures markets , circuit breakers were set in place , with the most notable suspending trading after 250 and 400 point drops in the Dow Jones Industrial Average . 
Privately , some free marketeers dismissed such mechanisms as sops to interventionists . 
After all , this free-market argument went , the Dow only dropped more than 250 points once this century . 
`` Circuit breakers '' set to soften big drops : -- If S&P futures fall 5 points at opening , contract trading pauses for 10 minutes . 
-- If Dow Industrials fall 25 points at opening , contract trading pauses for 10 minutes . 
-- If S&P futures fall 12 points ( equivalent to about 100 points on DJIA ) , trading is frozen for half hour to that price or higher . 
On NYSE program trades are diverted into a separate computer file to determine buy and sell orders . 
-- If S&P futures fall 30 points , trading is restricted for an hour to that price or higher . 
-- If Dow Industrials fall 250 points , trading on the Big Board halts for an hour . 
S&P and MMI contracts also halt . 
-- If DJIA drops 400 points , Big Board halts trading for two hours . 
Trading in MMI and S&P futures also halted . 
Brady Task Force recommendations ( Jan. 1988 ) : -- Establish an overarching regulator for financial markets -- Unify trade-clearing systems -- Make margins consistent across stock and futures markets SEC proposals ( May 1988 ) : -- Require prompt reports of large securities trades . 
-- Give SEC authority to monitor risk-taking by affiliates of brokerage firms . 
-- Transfer jurisdiction over stock-related futures to SEC from CFTC . 
( Opposed by new SEC chairman ) -- Give SEC authority to halt securities trading , ( also opposed by new SEC chairman ) . 
Congressional proposal : -- Create a task force to review current state of the securities markets and securities laws . 
Breaking the Soviet government 's television monopoly , an independent company has gained rights to show world programming , including American films . 
`` There must not be a monopoly , there must be freedom of choice for both journalists and viewers , '' Nikolai I. Lutsenko , the president of the Nika TV company , told the weekly newspaper Nedelya . 
The company is already working on its own programming in several provincial cities and hopes to be on the air regularly in about a year , the newspaper said . 
Mr. Lutsenko told Nedelya that he recently had been to the U.S. to pick up the rights to show 5,000 U.S. films in the Soviet Union . 
Nedelya 's article was accompanied by a picture of Mr. Lutsenko interviewing singer John Denver in Colorado . 
Even though it will be independent of official television , Nika will have an oversight board that will include members of the Communist youth league . 
South Africa 's National Union of Mineworkers said that about 10,000 diamond miners struck for higher wages at De Beers Consolidated Mines Ltd. De Beers said that workers at five of the group 's mines were on strike , which it said was peaceful , with orderly picketing occurring at one of the mines . 
The deadlock in negotiations occurred with De Beers offering a 17 % increase in the minimum-wage category while the union demanded a 37.6 % increase in the minimum wage . 
Japan 's opposition Socialist Party denied that its legislators had been bribed by pinball-parlor owners . 
The allegation had been raised in Parliament by the governing Liberal Democratic Party following magazine reports suggesting that money from Japanese-style pinball , called pachinko , had infiltrated politics . 
Tsuruo Yamaguchi , secretary general of the Socialist Party , acknowledged that nine party lawmakers had received donations from the pachinko association totaling 8 million yen ( about $ 55,000 ) but said the donations were legal and none of its members acted to favor the industry . 
The World Wide Fund for Nature said that Spain , Argentina , Thailand and Indonesia were doing too little to prevent illegal trade in endangered wildlife across their borders . 
A report by the conservation group presented at the U.N.-sponsored Convention on International Trade in Endangered Species in Lausanne accused the four of trading protected species ranging from parakeets to orchids . 
Fund official Simon Lyster said world trade in wildlife was estimated to total $ 5 billion of business annually . 
A NATO project to build a frigate for the 1990s was torpedoed by the pull-out of three of its eight participating nations . 
Britain , France and Italy announced technical reasons for withdrawing , but some officials pointed to growing reluctance among the allies to commit themselves to big defense spending while East-West disarmament talks show signs of success . 
Small wonder that Britain 's Labor Party wants credit controls . 
A few hours after the party launched its own affinity credit card earlier this month , the Tories raised the nation 's base interest rate . 
Labor 's Visa card is believed to be the first linked to a British political party . 
Labor gets 25 pence ( 39 cents ) for every 100 ( about $ 155 ) that a user charges to the card . 
As with other plastic in Britain 's high-interest-rate environment , the Labor card , administered by Co-operative Bank , carries a stiff ( in this case , 29.8 % ) annual rate on the unpaid balance . 
China 's year-long austerity program has achieved some successes in harnessing runaway economic growth and stabilizing prices but has failed to eliminate serious defects in state planning and an alarming drain on state budgets . 
The official China Daily said retail prices of non-staple foods have n't risen since last December but acknowledged that huge government subsidies were a main factor in keeping prices down . 
The State Statistical Bureau found that more than 1 billion yuan ( $ 270 million ) was spent in the first half of the year for pork subsidies . 
The newspaper quoted experts as saying the subsidies would cause the difference between prices and real values of commodities to `` become very unreasonable '' and reduce needed funds for investment in the `` already difficult state budget . 
'' The aim of the austerity measures was to slice economic growth , which soared to 20.7 % last year , to 8 % in 1990 . 
Economists now predict the growth rate will be about 11.5 % for the year . 
In a sign of growing official tolerance for religion , Russian Orthodox priests were allowed to celebrate the 400th anniversary of the Moscow patriarchate in the Kremlin 's 15th-century Uspensky Cathedral , where czars were crowned ... . 
A 34-foot-tall , $ 7.7 million statue of Buddha was completed on a hill outside Hong Kong , facing China . 
The statue is the brainchild of Sik Chi Wan , director of the Po Lin Monastery , who said : `` Hong Kong is such a prosperous place , we also need some kind of religious symbol . 
'' It all seemed innocent enough : Last April , one Steven B. Iken visited Justin Products Inc. here , identified himself as a potential customer and got the word on the little company 's new cassette players for children . 
`` It is almost identical to the Sony product , '' Mr. Iken remarked , after seeing prototypes and pictures . 
Replied a Justin salesman : `` Exactly . 
'' The Justin merchandise carried wholesale prices some 40 % below those of Sony Corp. of Japan 's `` My First Sony '' line . 
The visitor waxed enthusiastic and promised to return . 
But instead of a new customer -- part of a hoped-for bonanza from underselling Sony -- Justin got a costly legal morass . 
Mr. Iken , it turned out , was a private detective using a hidden tape recorder to gather information for Sony . 
His recording later turned up as a court exhibit . 
Seeking to keep Justin 's `` My Own '' product line off the U.S. market , Sony last May filed a suit in Manhattan federal court accusing the upstart of trademark infringement , unfair competition and other violations of business law . 
Since then , life has changed a lot for 61-year-old Leonard Kaye , Justin 's owner . 
`` I have n't been able to get a decent night 's sleep since this has been going on , '' he says . 
`` It 's the most distracting thing in my life -- I ca n't even attend to my business . 
'' His company ( annual sales : about $ 25 million ) may suffer a costly blow -- losing an estimated 10 % of total sales -- if Sony ( annual sales : about $ 16 billion ) prevails . 
Justin 's plight shows what can happen when a tiny company suddenly faces the full legal might of a wrathful multinational . 
With considerable irony , the case also shows how completely Japan has turned the tables on U.S. business . 
Americans used to complain bitterly about being undersold by look-alike products from Japan . 
Now Sony , whose innovative , premium-priced products are among the most admired in consumer electronics , is bitterly complaining about a little U.S. firm with a cheap look-alike produced in China . 
`` The gist of this is that Justin knocked off the Sony line and Sony wants to stop it , '' says Lewis H. Eslinger , Sony 's attorney , who previously guarded Rubik 's Cube . 
( Sony itself declines to comment . 
) If Sony wins , Mr. Eslinger says , its little rival will have to try to sell the products overseas . 
At worst , he adds , `` They 'd have to grind them all up and throw them away . 
'' Mr. Kaye denies the suit 's charges and says his only mistake was taking on Sony in the marketplace . 
`` I made a similar line and I produced it cheaper , '' he says . 
Today , U.S. Judge John E. Sprizzo is expected to rule on Sony 's renewed request for a pre-trial order blocking sale of the disputed products , on which deliveries began in July . 
The judge turned down an earlier Sony request for such an order -- a decision upheld on appeal -- but Sony returned with additional evidence and arguments . 
Though hoping to settle the case , Justin vows to fight on , if necessary . 
But the battle is more than Justin bargained for . 
`` I had no idea I was getting in so deep , '' says Mr. Kaye , who founded Justin in 1982 . 
Mr. Kaye had sold Capetronic Inc. , a Taiwan electronics maker , and retired , only to find he was bored . 
With Justin , he began selling toys and electronics made mostly in Hong Kong , beginning with Mickey Mouse radios . 
The company has grown -- to about 40 employees , from four initially , Mr. Kaye says . 
Justin has been profitable since 1986 , adds the official , who shares his office with numerous teddy bears , all samples from his line of plush toys . 
Like many others , Mr. Kaye took notice in 1987 when Sony , in a classic example of market segmentation , changed the plastic skin and buttons on the famous Walkman line of portable audio equipment and created the My First Sony line for children . 
The brightly colored new products looked more like toys than the adult models . 
( In court papers , Sony says it has spent more than $ 3 million to promote the line , with resulting sales of over a million units . 
) Sony found a new market niche , but Mr. Kaye figured that its prices left plenty of room for a lower-priced competitor . 
His products are n't exact copies of Sony 's but strongly resemble them in size , shape and , especially , color . 
Sony uses mostly red and blue , with traces of yellow -- and so does Justin , on the theory that kids prefer these colors . 
( `` To be successful , a product can be any color whatsoever , as long as it is fire-engine red , '' says Charles E. Baxley , Justin 's attorney . 
) By last winter , Justin was showing prototypes at toy fairs in Hong Kong and New York -- and Sony noticed . 
Indeed , concerned that Sony sales personnel were threatening legal action or other retaliation -- such as withholding desirable Sony products -- against Justin 's customers , Mr. Baxley fired off a letter to Sony in April . 
He himself threatened to take the matter to the Federal Trade Commission or U.S. Justice Department . 
But Justin has n't pursued those charges ( which were without merit , according to Mr. Eslinger , the Sony attorney ) . 
Recalls Mr. Baxley : `` Our purpose was to influence them to leave us alone . 
We never intended taking on Sony -- we do n't have the resources . 
'' Sony answered the empty threat with its real suit . 
Off and on since then , the companies have skirmished in court . 
And Justin , in a news release , says , `` Once competitive , Sony now resorts to strong-arm tactics in American courtrooms to carve out and protect niche markets . 
'' Sony 's lawyer insists that the company 's tactics -- including the use of a private detective posing as a buyer -- are routine in such matters . 
He also insists that Sony , no less than others , has a legal right to protect its `` trade dress , '' in this case , mostly the colors that it claims make My First Sony products distinctive . 
( Justin claims it began using the same colors on electronic goods for children long before Sony entered the children 's market . 
) Whatever its merits , Sony 's aggressive defense is debilitating for Justin . 
It 's also costly . 
Mr. Kaye says he has paid more than $ 70,000 in legal fees so far . 
Of Sony , Mr. Kaye says : `` They know there 's no way for them to lose . 
They just keep digging me in deeper until I reach the point where I give up and go away . 
'' For now , though , he vows to hang in . 
@ Charles H. Tenney II , chairman of Unitil Corp. , purchased 34,602 shares , or 4.9 % , of Unitil 's common , according to a filing with the Securities and Exchange Commission . 
The stock was bought on Thursday in a privately negotiated transaction , the filing said . 
As previously reported , Unitil , Exeter , N.H. , and Fitchburg Gas & Electric Co. , Fitchburg , Mass. , are targets of unsolicited tender offers from Boston-based Eastern Utilities Associates . 
Eastern Utilities has offered $ 40 a share for Unitil and $ 36 a share for Fitchburg Gas and has extended both offers to Dec. 4 . 
Both companies rejected the offers . 
Dresdner Bank AG of West Germany has announced a friendly tender offer for control of Banque Internationale de Placements , a French bank whose main shareholder is France 's Societe Generale , the Societe de Bourses Francaises said . 
The tender offer by West Germany 's second-biggest commercial bank is in two stages . 
Dresdner is offering to acquire 32.99 % of BIP 's capital for 1,015 francs ( $ 156.82 ) a share . 
The terms of the offer put a value of 528 million francs ( $ 81.6 million ) on the 32.99 % shareholding . 
The Societe Generale banking group controls 18.2 % of the shareholding , while Societe Generale de Belgique S.A. owns 9.69 % and Financiere Tradition , a holding company , owns 5.1 % . 
Mexican investor Joel Rocha Garza said he sold a block of 600,000 shares of Smith Laboratories Inc. common stock to companies affiliated with him . 
In a filing with the Securities and Exchange Commission , Mr. Rocha Garza said Biscayne Syndicate Inc. , Lahus II Inc. , and Lahus III Inc. bought the 600,000 shares on Oct. 11 for $ 1.4 million , or $ 2.375 a share . 
Mr. Rocha Garza said that he , Clarendon Group Ltd. , Biscayne , Lahus II , and Lahus III are all affiliated and hold a combined stake of 1,234,100 shares , or 9.33 % . 
Mr. Rocha Garza has said he wants to purchase more shares . 
In San Diego , Smith Laboratories President Timothy Wollaeger said the transfer of the shares is n't significant . 
Investcorp , New York , said it and the management of Sports & Recreation Inc. bought the operator of the 10-store Sports Unlimited chain for some $ 40 million . 
The investment bank becomes majority shareholder in Sports & Recreation , a 10-year-old sporting goods retailer , said Oliver E. Richardson , a member of Investcorp 's management committee and a director of the chain . 
Sports Unlimited , Tampa , Fla. , posted revenue of $ 59 million for the year ended July 31 . 
The company is `` very profitable '' on an operating basis , Mr. Richardson said , but he declined to specify numbers . 
In 1982 , Sports & Recreation 's managers and certain passive investors purchased the company from Brunswick Corp. of Skokie , Ill . 
In the latest transaction , management bought out the passive investors ' holding , Mr. Richardson said . 
Hammond Co. , Newport Beach , Calif. , said Fidelity National Financial Inc. extended its previous agreement , under which it wo n't purchase any more of the mortgage banker 's common stock , through Oct. 31 . 
The previous agreement expired Thursday . 
Hammond said that its discussions with Fidelity , an Irvine , Calif. , title-insurance underwriter , are continuing , but that prospects for a longer-term standstill agreement are uncertain . 
Fidelity has increased its stake in Hammond to 23.57 % in recent months . 
Statements made in Securities and Exchange Commission filings led Hammond to request a standstill agreement . 
Giant Group Ltd. said it terminated negotiations for the purchase of Aspen Airways , a Denver-based regional carrier that operates the United Express connector service under contract to UAL Corp. 's United Airlines . 
Giant , a Beverly Hills , Calif. , collection of companies that is controlled by Hollywood producer Burt Sugarman , did n't give a reason for halting its plan to acquire the airline , and Aspen officials could n't be reached for comment . 
Giant agreed last month to purchase the carrier . 
Giant has n't ever disclosed the proposed price , although Avmark Inc. , an Arlington , Va.-based aircraft consulting concern , has valued Aspen 's fleet at about $ 46 million . 
The airline would have become the latest in a peculiar blend of Giant companies , which are involved in making cement , recycling newsprint and operating fast-food restaurants . 
The state-controlled insurer Assurances Generales de France said it has obtained regulatory approval to increase its stake in the financial holding company Cie. de Navigation Mixte above 10 % from the current level of about 8 % . 
Friday 's approval was needed to conform with Bourse rules regarding companies with bank interests and follows a similar approval given Wednesday to Cie . 
Financiere de Paribas . 
Both Paribas and AGF have been increasing their stakes in Navigation Mixte recently for what they have termed `` investment purposes , '' although the issue has been surrounded by takeover speculation in recent weeks . 
AGF did n't comment officially on its reasons for seeking the approval , but people close to the group said it was done to make sure the group would have the flexibility to increase its stake in the future , should interesting price opportunities arise . 
An AGF official did specify , however , that there was no foundation to recent rumors the group might be acting in concert with Paribas . 
Lockheed Aeronautical Systems Co. , a unit of Lockheed Corp. , said it agreed to join with Aermacchi S.p . 
A. of Varese , Italy , to propose a new generation of jet trainers for the U.S. Air Force . 
The Air Force is looking to buy 540 new primary jet trainers , with a total value of $ 1.5 billion to $ 2 billion , between 1994 and 2004 . 
The aircraft would replace the T-37 , made by the Cessna Aircraft Co. unit of General Dynamics Corp. , which the Air Force uses to train jet pilots . 
Lockheed said the U.S. Navy may also buy an additional 340 trainer aircraft to replace its T34C trainers made by the Beech Aircraft Corp. unit of Raytheon Corp . 
Under the agreement with Lockheed , Aermacchi will license Lockheed to build the Aermacchi MB-339 jet tandem-trainer and will supply certain structures . 
Lockheed will build additional structures and perform final assembly of the tandem-seat trainer at its Marietta , Ga. , plant should the Air Force order the craft . 
A Lockheed spokesman in Burbank , Calif. , said he was n't aware of which other companies would be competing for the Air Force contract . 
Striking auto workers ended their 19-day occupation of a metal shop at a Peugeot S.A. factory in eastern France Friday as pay talks got under way in the capital . 
But the Peugeot breakthrough came as a nationwide dispute by Finance Ministry employees disrupted border checkpoints and threatened the government 's ability to pay its bills . 
The Peugeot metalworkers began filing out of the shop , which makes auto parts , at the plant in Mulhouse after voting 589 to 193 to abandon the occupation . 
Their withdrawal was based on promises by Peugeot to open negotiations in Paris at the same time the last man left the premises . 
The strike by customs officers , tax collectors , treasury workers and other civil servants attached to the Ministry of Finance may pose a more serious challenge to the government and the average Frenchman . 
Ministry employees complain that they are poorly paid because of a complex job-rating system they say fails to take into account their education and level of technical expertise . 
The market for $ 200 billion of high-risk junk bonds , battered by a succession of defaults and huge price declines this year , practically vanished Friday . 
Trading ground to a halt as investors rushed to sell bonds , only to find themselves deserted by potential buyers . 
Stunned , they watched brokerage houses mark down price quotations on their junk holdings while being able to execute very few actual trades . 
`` The junk bond market is in a state of gridlock now -- there are no bids , only offers , '' says independent investor Martin D. Sass , who manages nearly $ 4 billion and who recently decided to buy distressed securities for a new fund . 
This calamity is `` far from over , '' he says . 
Junk 's collapse helped stoke the panicky selling of stocks that produced the deepest one-day dive in the Dow Jones Industrial Average since the Oct. 19 , 1987 , crash . 
Simultaneously , it also helped trigger this year 's biggest rally in the U.S. government bond market as investors rushed to move capital into the highest-quality securities they could find . 
But `` an eerie silence pervaded '' the junk market Friday as prices tumbled on hundreds of high-yield bonds despite `` no active trading , '' says John Lonski , an economist at Moody 's Investors Service Inc . 
For example , the price of Southland Corp. 's $ 500 million of 16 3\4 % bonds due 2002 -- sold less than two years ago by Goldman , Sachs & Co. -- plummeted 25 % to just 30 cents on the dollar . 
But not even Goldman would make a market in the securities of Southland , the owner of the nationwide chain of 7-11 convenience stores that is strapped for cash . 
Goldman officials declined to comment . 
Junk bonds , which mushroomed from less than $ 2 billion at the start of this decade , have been declining for months as issuer after issuer sank beneath the weight of hefty interest payments . 
The shaky market received its biggest jolt last month from Campeau Corp. , which created its U.S. retailing empire with junk financing . 
Campeau developed a cash squeeze that caused it to be tardy on some interest payments and to put its prestigious Bloomingdales department-store chain up for sale . 
Now , dozens of corporations , including Ethan Allen , TW Services and York International , that are counting on at least $ 7 billion of scheduled new junk financings to keep their highly leveraged takeovers and buy-outs afloat , may never get the money . 
`` The music has stopped playing , '' says Michael Harkins , a principal in the investment firm of Levy Harkins . 
`` You 've either got a chair or you do n't . 
'' In Friday 's aftermath , says R. Douglas Carleton , a director of high-yield finance at First Boston Corp. , `` much of the $ 7 billion forward calendar could be deferred , depending on the hysteria . 
'' In August , First Boston withdrew a $ 475 million junk offering of Ohio Mattress bonds because potential buyers were `` very skittish . 
'' The outlook `` looks shaky because we 're still waiting '' for mutual funds , in particular , to dump some of their junk bond holdings to pay off redemptions by individual investors , says King Penniman , senior vice president at McCarthy , Crisanti & Maffei , an investment arm of Xerox Financial Services . 
Indeed , a Moody 's index that tracks the net asset values of 24 high-yield mutual funds declined for the 17th consecutive day Friday . 
In a stark contrast , the benchmark 30-year Treasury bond climbed more than 2 1\2 points , or about $ 25 for each $ 1,000 face amount , to 103 12\32 , its biggest gain of the year . 
The bond 's yield dropped to 7.82 % , the lowest since March 31 , 1987 , according to Technical Data Global Markets Group . 
The yield on three-month Treasury bills , considered the safest of all investments , plummeted about 0.7 percentage point to 7.16 % , the largest one-day decline since 1982 . 
The main catalyst for government bond market rally was the 190.58-point drop in the Dow Jones Industrial Average . 
`` When you get panic in one market , you get flight to quality in the other , '' said Maria Ramirez , money market economist at Drexel Burnham Lambert Inc . 
Nevertheless , the problems of the junk market could prompt the Federal Reserve to ease credit in the months ahead . 
`` This marks a significant shift in the interest rate outlook , '' says William Sullivan , director of money market research at Dean Witter Reynolds Inc. , New York . 
Any sustained credit-easing could be a lift for junk bonds as well as other securities . 
Robert Dow , a partner and portfolio manager at Lord , Abbett & Co. , which manages $ 4 billion of high-yield bonds , says he does n't `` think there is any fundamental economic rationale { for the junk bond rout } . 
It was herd instinct . 
'' He adds : `` The junk market has witnessed some trouble and now some people think that if the equity market gets creamed that means the economy will be terrible and that 's bad for junk . 
I do n't believe that 's the case , but I believe that people are running scared . 
There is a flight to quality , and the quality is not in equities and not in junk -- it 's in Treasurys . 
'' Even as trading in high-yield issues dried up over the past month , corporations sold more than $ 2 billion of new junk bonds . 
For example , a recent $ 375 million offering of Petrolane Gas Services L.P. bonds sold by First Boston was three times oversubscribed . 
A $ 550 million offering of Turner Broadcasting System Inc . 
high-yield securities sold last week by Drexel was increased $ 50 million because of strong demand . 
First Boston estimates that in November and December alone , junk bond investors will receive $ 4.8 billion of coupon interest payments . 
`` That 's a clear indication that there is and will be an undercurrent of basic business going on , '' says Mr. Carleton of First Boston . 
`` I do n't know how people can say the junk bond market disappeared when there were $ 1.5 billion of orders for $ 550 million of junk bonds sold last week by Turner , '' says Raymond Minella , co-head of merchant banking at Merrill Lynch & Co . 
`` When the rally comes , insurance companies will be leading it because they have billions to invest and invest they will . 
There is plenty of money available from people who want to buy well-structured deals ; it 's the stuff that 's financed on a shoestring that people are wary of . 
'' But such highly leveraged transactions seemed to have multiplied this year , casting a pall over much of the junk market . 
Michael McNamara , director of fixed-income research at Kemper Financial Services , says the quality of junk issues has been getting poorer , contributing to the slide in prices . 
`` Last year we probably bought one out of every three new deals , '' he says . 
`` This year , at best , it 's in one in every five or six . 
And our credit standards have n't changed one iota . 
'' However , Mr. McNamara said the slide in junk is creating `` one hell of a buying opportunity '' for selective buyers . 
For the moment , investors seem more preoccupied with the `` bad '' junk than the `` good '' junk . 
`` The market has been weak since '' the announcement of the Campeau cash squeeze and the company 's subsequent bailout by Olympia & York , says Mr. Minella of Merrill Lynch . 
`` That really affected the market in that people started to ask ` What else is in trouble ? ' '' Well before Campeau , though , there were signs that the junk market was stumbling through one of its worst years ever . 
Despite the relatively strong economy , junk bond prices did nothing except go down , hammered by a seemingly endless trail of bad news : -- In June , two months before it would default on interest payments covering some of its $ 1.2 billion of speculative debt securities , New York-based Integrated Resources Inc. said it ran out of borrowed money . 
-- In July , Southmark Corp. , the Dallas-based real estate and financial services company with about $ 1.3 billion of junk bonds , voluntarily filed for protection under U.S. bankruptcy law . 
-- By the end of July , the difference in yield between an index of junk bonds and seven-year Treasury notes widened to more than 5.5 percentage points . 
-- In August , Resorts International Inc. , which sold more than $ 500 million of junk bonds , suspended interest payments . 
-- In September , just as the cash squeeze hit Campeau , Lomas Financial Corp. defaulted on $ 145 million of notes and appeared unlikely to pay interest on a total of $ 1.2 billion of debt securities . 
Meantime , regulators are becoming increasingly worried as the rush to leverage shows no signs of abating . 
Moody 's says the frequency of corporate credit downgrades is the highest this year since 1982 . 
In addition , there are six times as many troubled banks as there were in the recession of 1981 , according to the Federal Deposit Insurance Corp . 
`` The era of the 1980s is about compound interest and the reaching for it , '' says James Grant , editor of Grant 's Interest Rate Observer , an early critic of the junk bond market . 
`` What we 've begun to see is the damage to businesses of paying exorbitant compound interest . 
Businesses were borrowing at interest rates higher than their own earnings . 
What we 're seeing now is the wrenching readjustment of asset values to a future when speculative-grade debt will be hard to obtain rather than easy . 
'' Friday 's Market Activity Prices of Treasury bonds surged in the biggest rally of the year as investors fled a plummeting stock market . 
The benchmark 30-year Treasury bond was quoted 6 p.m. EDT at 103 12\32 , compared with 100 27\32 Thursday , up 2 1\2 points . 
The yield on the benchmark fell to 7.82 % , the lowest since March 31 , 1987 , according to Technical Data Global Markets Group . 
The `` flight to quality '' began late in the day and followed a precipitous fall in the stock market . 
Treasurys opened lower , reacting negatively to news that the producer price index -- a measure of inflation on the wholesale level -- accelerated in September . 
Bond prices barely budged until midday . 
Many bond market participants will be closely eying the action of the Federal Reserve , which might repeat its October 1987 injection of huge amounts of liquidity to buoy the financial markets and keep the economy from slowing into a recession . 
Prices of municipals , investment-grade corporates and mortgage-backed bonds also rose , but lagged behind their Treasury counterparts . 
Mortgage securities rose in hectic trading , with most of the activity concentrated in Government National Mortgage Association 9 % coupon securities , the most liquid mortgage issue . 
The Ginnie Mae November 9 % issue ended at 98 25\32 , up 7\8 point on the day , to yield about 9.28 % to a 12-year average life assumption . 
Investment-grade corporate bonds were up about 1\2 to 3\4 point . 
But the yield spread between lower-quality , investment-grade issues and higher-quality bonds widened . 
And the yields on telephone and utility issues rose relative to other investment-grade bonds in anticipation of this week 's $ 3 billion bond offering by the Tennessee Valley Authority . 
Despite rumors that the TVA 's long-awaited offering would be postponed because of the debacle in the equity markets , sources in the underwriting syndicate said they expect the issue will be priced as scheduled . 
One of the sources said the smaller portions of $ 750 million each of five-year and 10-year bonds have already been `` substantially oversubscribed . 
'' Municipal bonds rose as much as 3\4 point . 
Roger Lowenstein contributed to this article . 
Friday 's 190-point plunge in stocks does not come atop the climate of anxiety that dominated financial markets just prior to their 1987 October crash , and mechanisms have been put in place to keep markets more orderly . 
Still , the lesson is about the same : On Friday the 13th , the market was spooked by Washington . 
The consensus along the street seems to be that the plunge was triggered by the financing problems of the UAL takeover , and it 's certainly true the rout began immediately after the UAL trading halt . 
Still , the consensus seems almost as wide that one faltering bid is no reason to write down the value of all U.S. business . 
This observation leads us to another piece of news moving on the Dow Jones ticker shortly before the downturn : the success of Senate Democrats in stalling the capital gains tax cut . 
The real value of all shares , after all , is directly impacted by the tax on any profits ( all the more so given the limits on deductions for losses that show gains are not `` ordinary income '' ) . 
And market expectations clearly have been raised by the capital gains victory in the House last month . 
An hour before Friday 's plunge , that provision was stripped from the tax bill , leaving it with $ 5.4 billion in tax increases without a capital gains cut . 
There is a great deal to be said , to be sure , for stripping the garbage out of the reconciliation bill . 
It would be a good thing if Congress started to decide issues one-by-one on their individual merits without trickery . 
For one thing , no one doubts that the capital gains cut would pass on an up-or-down vote . 
Since Senate leaders have so far fogged it up with procedural smokescreens , promises of a cleaner bill are suspect . 
Especially so since President Bush has been weakened by the Panama fiasco . 
To the extent that the UAL troubles contributed to the plunge , they are another instance of Washington 's sticky fingers . 
As the best opportunities for corporate restructurings are exhausted of course , at some point the market will start to reject them . 
But the airlines are scarcely a clear case , given anti-takeover mischief by Secretary of Transportation Skinner , who professes to believe safety will be compromised if KLM and British Airways own interests in companies that fly airplanes . 
Worse , Congress has started to jump on the Skinner bandwagon . 
James Oberstar , the Minnesota Democrat who chairs the Public Works and Transportation Committee 's aviation subcommittee , has put an anti-airline takeover bill on supersonic speed so that it would be passed in time to affect the American and United Air Lines bids . 
It would give Mr. Skinner up to 50 days to `` review '' any bid for 15 % or more of the voting stock of any U.S. carrier with revenues of $ 1 billion or more . 
So the UAL deal has problems , and the market loses 190 points . 
Congratulations , Mr. Secretary and Mr. Congressman . 
In the 1987 crash , remember , the market was shaken by a Danny Rostenkowski proposal to tax takeovers out of existance . 
Even more important , in our view , was the Treasury 's threat to thrash the dollar . 
The Treasury is doing the same thing today ; thankfully , the dollar is not under 1987-style pressure . 
Also , traders are in better shape today than in 1987 to survive selling binges . 
They are better capitalized . 
They are in less danger of losing liquidity simply because of tape lags and clearing and settlement delays . 
The Fed promises any needed liquidity . 
The Big Board 's liaison with the Chicago Board of Trade has improved ; it will be interesting to learn if `` circuit breakers '' prove to be a good idea . 
In any event , some traders see stocks as underpriced today , unlike 1987 . 
There is nothing wrong with the market that ca n't be cured by a little coherence and common sense in Washington . 
But on the bearish side , that may be too much to expect . 
First Chicago Corp. posted a third-quarter loss of $ 23.3 million after joining other big banks in further adding to its reserves for losses on foreign loans . 
The parent company of First National Bank of Chicago , with $ 48 billion in assets , said it set aside $ 200 million to absorb losses on loans and investments in financially troubled countries . 
The addition , on top of two big 1987 additions to foreign-loan reserves , brings the reserve to a level equaling 79 % of medium-term and long-term loans outstanding to troubled nations . 
First Chicago since 1987 has reduced its loans to such nations to $ 1.7 billion from $ 3 billion . 
Despite this loss , First Chicago said it does n't need to sell stock to raise capital . 
During the quarter , the company realized a pretax gain of $ 60.4 million from the sale of its First Chicago Investment Advisors unit . 
Combined foreign exchange and bond trading profits dipped 24 % against last year 's third quarter , to $ 38.2 million from $ 50.5 million . 
Gains from First Chicago 's venture capital unit , a big leveraged buy-out investor , rose 32 % to $ 34 million from $ 25.7 million a year ago . 
Interest income and most fee income was strong . 
Greece 's second bout of general elections this year is slated for Nov. 5 . 
For those hoping to see a modicum of political normalcy restored -- in view of Greece 's eight-year misadventure under autocratic pseudosocialism and subsequent three-month hitch with a conservative-communist coalition government -- there is but one bright sign : The scandals still encircling former Prime Minister Andreas Papandreou and his fallen socialist government are like flies buzzing around a rotting carcass . 
In the mid-June round of voting , Greeks gave no clear mandate to any single political party . 
The ad interim coalition government that emerged from post-electoral hagglings was , in essence , little more than the ill-conceived offspring of ideological miscegenation : On one side , the center-right New Democracy Party , headed by Constantine Mitsotakis . 
On the other , the so-called Coalition of the Left and Progress -- a quaint and rather deceptive title for a merger of the pro-Soviet Communist Party of Greece and its Euro-Communist cousin , the Hellenic Left . 
The unifying bond for this left-right mismatch was plain : PASOK ( Mr. Papandreou 's party ) as common political enemy . 
The ostensible goal was a mop-up of government corruption , purportedly at all levels , but the main marks were Mr. Papandreou and his closest associates . 
In point of fact , this catharsis was overdue by decades . 
When reduced to buzzword status in ex parte pledges , however , the notion transmogrified into a promised assault , with targets primarily for political gains , not justice . 
With regard to Greece 's long-bubbling bank-looting scandal , Mr. Papandreou 's principal accuser remains George Koskotas , former owner of the Bank of Crete and self-confessed embezzler , now residing in a jail cell in Salem , Mass. , from where he is fighting extradition proceedings that would return him to Greece . 
Mr. Koskotas 's credibility is , at best , problematic . 
He has ample motive to shift the blame , and his testimony has also been found less than forthright on numerous points . 
Nevertheless , the New Democracy and Communist parties herald his assertions as proof of PASOK complicity . 
Among unanswered questions are whether Mr. Papandreou received $ 23 million of stolen Bank of Crete funds and an additional $ 734,000 in bribes , as contended ; whether the prime minister ordered state agencies to deposit some $ 57 million in Mr. Koskotas 's bank and then skim off the interest ; and , what PASOK 's cut was from the $ 210 million Mr. Koskotas pinched . 
Two former ministers were so heavily implicated in the Koskotas affair that PASOK members of Parliament voted to refer them to the special court . 
But eluding parliamentary probe was the case of millions of drachmas Mr. Koskotas funneled into New Democracy coffers . 
In the end , the investigation produced only circumstantial evidence and `` indications '' that point to PASOK , not clinching proof . 
On another issue , Greeks were told how their national intelligence agency , the EYP , regularly monitored the telephone conversations of prominent figures , including key opposition politicians , journalists and PASOK cabinet members . 
Despite convincing arguments , it was never established that Mr. Papandreou personally ordered or directed the wiretaps . 
The central weakness of the `` scandals '' debates was pointed up especially well when discussions focused on arms deals and kickbacks . 
The coalition government tried to show that PASOK ministers had received hefty sums for OKing the purchase of F-16 Fighting Falcon and Mirage 2000 combat aircraft , produced by the U.S.based General Dynamics Corp. and France 's Avions Marcel Dassault , respectively . 
Naturally , neither General Dynamics nor Dassault could be expected to hamper its prospective future dealings by making disclosures of sums paid ( or not ) to various Greek officials for services rendered . 
So it seems that Mr. Mitsotakis and his communist chums may have unwittingly served Mr. Papandreou a moral victory on a platter : PASOK , whether guilty or not , can now traipse the countryside condemning the whole affair as a witch hunt at Mr. Papandreou 's expense . 
But while verbal high jinks alone wo n't help PASOK regain power , Mr. Papandreou should never be underestimated . 
First came his predictable fusillade : He charged the Coalition of the Left and Progress had sold out its leftist tenets by collaborating in a right-wing plot aimed at ousting PASOK and thwarting the course of socialism in Greece . 
Then , to buttress his credibility with the left , he enticed some smaller leftist parties to stand for election under the PASOK banner . 
Next , he continued to court the communists -- many of whom feel betrayed by the left-right coalition 's birth -- by bringing into PASOK a well-respected Communist Party candidate . 
For balance , and in hopes of gaining some disaffected centrist votes , he managed to attract a former New Democracy Party representative and known political enemy of Mr. Mitsotakis . 
Thus PASOK heads for the polls not only with diminished scandal-stench , but also with `` seals of approval '' from representatives of its harshest accusers . 
Crucial as these elections are for Greece , pressing issues of state are getting lost in the shuffle . 
The country 's future NATO participation remains unsure , for instance . 
Greece also must revamp major pieces of legislation in preparation for the 1992 targets of heightened Common Market cooperation . 
Greece 's bilateral relations with the U.S. need attention soon as well . 
For one , the current accord concerning U.S. military bases in Greece lapses in May 1990 . 
Negotiations for a new agreement were frozen before the June elections , but the clock is running . 
Another matter of concern is the extradition of Mohammed Rashid , a Palestinian terrorist who is wanted in the U.S. for the 1982 bombing of a Pan American Airways flight . 
The Greek courts have decided in favor of extradition in the Rashid case , but the matter awaits final approval from Greece 's next justice minister . 
The Greeks seem barely aware of the importance of the case as a litmus test of whether Greece will be counted in or out for international efforts to combat terrorism . 
That PASOK could win the elections outright is improbable ; the Greek press , previously eager to palm off PASOK 's line , has turned on Mr. Papandreou with a wild-eyed vengeance . 
Yet the possibility of another lash-up government is all too real . 
If Mr. Papandreou becomes the major opposition leader , he could hamstring a conservative-led coalition . 
Also , he could force new elections early next year by frustrating the procedures for the election of the president of the republic in March . 
New Democracy has once again glaringly underestimated the opponent and linked its own prospects to negative reaction against PASOK , forgetting to tend to either program clarity or the rectification of internal squabbles . 
As for Mr. Papandreou ? He 's not exactly sitting pretty at this stage . 
But since he is undoubtedly one of the most proficient bull slingers who ever raked muck , it seems far wiser to view him as sidelined , but certainly not yet eliminated . 
Mr. Carpenter , a regional correspondent for National Review , has lived in Athens since 1981 . 
U.S. OFFICIALS MOVED to head off any repeat of Black Monday today following Friday 's plunge in stock prices . 
Fed Chairman Greenspan signaled that the central bank was prepared to inject massive amounts of money into the banking system to prevent a financial crisis . 
Other U.S. and foreign officials also mapped out plans , though they kept their moves quiet to avoid making the financial markets more jittery . 
Friday 's sell-off was triggered by the collapse of UAL 's buy-out plan and a big rise in producer prices . 
The Dow Jones industrials skidded 190.58 , to 2569.26 . 
The junk bond market came to a standstill , while Treasury bonds soared and the dollar fell . 
Japanese stocks dropped early Monday , but by late morning were turning around . 
The dollar was trading sharply lower in Tokyo . 
Prospects for a new UAL buy-out proposal appear bleak . 
Many banks refused to back the $ 6.79 billion transaction , but bankers said it was not from any unwillingness to finance takeovers . 
The decision was based solely on problems with the UAL management-pilot plan , they said . 
The surge in producer prices in September followed three months of declines , but analysts were divided on whether the 0.9 % jump signaled a severe worsening of inflation . 
Also , retail sales grew 0.5 % last month . 
A capital-gains tax cut was removed from the Senate 's deficit reduction bill , but proponents still hope to enact the cut this year . 
Bush wo n't press for a capital-gains provision in the final deficit bill when House-Senate conferees meet later this week . 
General Motors signaled that up to five North American assembly plants may close by the mid-1990s as it tries to cut excess capacity . 
U.S. car and truck sales fell 12.6 % in early October , the first sales period of the 1990-model year , dragged down by a sharp decline in GM sales . 
Warner and Sony are entangled in a legal battle over movie producers Peter Gruber and Jon Peters . 
The fight could set back Sony 's plans to enter the U.S. movie business . 
Hooker 's U.S. unit received a $ 409 million bid for most of its real-estate and shopping-center assets from an investor group . 
The offer does n't include Bonwit Teller or B. Altman . 
The Boeing strike is starting to affect airlines . 
America West said Friday it will postpone its new service out of Houston because of delays in receiving aircraft from Boeing . 
Saatchi & Saatchi would launch a management buy-out if a hostile suitor emerged , an official said . 
British Aerospace and France 's Thomson-CSF are nearing a pact to merge guided-missile divisions . 
New U.S. steel-import quotas will give a bigger share to developing nations that have relatively unsubsidized steel industries . 
Japan 's steel quota will be cut significantly . 
Four ailing S&Ls were sold off by government regulators , but low bids prevented the sale of a fifth . 
Markets -- Stocks : Volume 251,170,000 shares . 
Dow Jones industrials 2569.26 , off 190.58 ; transportation 1406.29 , off 78.06 ; utilities 211.96 , off 7.29 . 
Bonds : Shearson Lehman Hutton Treasury index 3421.29 , up Commodities : Dow Jones futures index 129.87 , up 0.01 ; spot index 129.25 , up 0.28 . 
Dollar : 142.10 yen , off 2.07 ; 1.8740 marks , off 0.0343 . 
A federal appeals court in San Francisco ruled that shareholders ca n't hold corporate officials liable for false sales projections on new products if the news media concurrently revealed substantial information about the product 's flaws . 
The ruling stems from a 1984 suit filed by shareholders of Apple Computer Inc. , claiming that company officials misled investors about the expected success of the Lisa computer , introduced in 1983 . 
Lawyers specializing in shareholder suits said they are concerned that use of the `` press defense '' by corporations may become popular as a result of the ruling . 
According to the suit , Apple officials created public excitement by touting Lisa as an office computer that would revolutionize the workplace and be extremely successful in its first year . 
The plaintiffs also alleged that prior to the fanfare , the company circulated internal memos indicating problems with Lisa . 
The suit claimed Apple 's stock climbed to a high of $ 63.50 a share on the basis of the company 's optimistic forecasts . 
But when the company revealed Lisa 's poor sales late in 1983 , the stock plummeted to a low of $ 17.37 a share , according to the suit . 
The shareholders claimed more than $ 150 million in losses . 
In 1987 , the San Francisco district court dismissed the case largely because newspaper reports had sufficiently counterbalanced the company 's statements by alerting consumers to Lisa 's problems . 
Late last month , the appeals court agreed that most of the case should be dismissed . 
However , it gave the shareholders the right to pursue a small portion of their claim that pertains to Lisa 's disk drive , known as Twiggy . 
The court ruled that the news media did n't reveal Twiggy 's problems at the time . 
Lawyers are worried about the ruling 's implication in other shareholder suits but pointed out that the court stressed that the ruling should be regarded as very specific to the Apple case . 
`` The court was careful to say that the adverse information appeared in the very same articles and received the same attention as the company 's statements , '' said Patrick Grannon , a Los Angeles lawyer at the firm of Greenfield & Chimicles , which was n't involved in the case . 
`` The court is saying that the adverse facts have to be transferred to the market with equal intensity and credibility as the statements of corporate insiders . 
'' Shareholders ' attorneys at the New York firm of Milberg , Weiss , Bershad , Specthrie & Lerach last week petitioned for a rehearing of the case . 
They wrote : `` The opinion establishes a new rule of immunity -- that if a wide variety of opinions on a company 's business are publicly reported , the company can say anything without fear of securities liability . 
'' NFL ORDERED to pay $ 5.5 million in legal fees to defunct The National Football League is considering appealing the ruling stemming from the U.S. Football League 's largely unsuccessful antitrust suit against the NFL . 
A jury in 1986 agreed with the USFL 's claims that the NFL monopolized major league football . 
But the jury awarded the USFL only $ 1 in damages , trebled because of the antitrust claims . 
Last week , the U.S. Court of Appeals in New York upheld a $ 5.5 million award of attorneys fees to the defunct league . 
Harvey D. Myerson , of Myerson & Kuhn , then of Finley , Kumble , Wagner , Heine , Underberg , Manley , Myerson & Casey , was the lead trial lawyer , and his new firm pursued the application appeal . 
Douglas R. Pappas of Myerson & Kuhn says about $ 5.3 million of the award goes directly to the USFL to reimburse it for fees already paid . 
Myerson & Kuhn will get about $ 260,000 for the costs of pressing the application . 
The federal appeals court held that the nominal damages and the failure to prove all claims did n't exclude the USFL from being reimbursed . 
Antitrust laws provide that injured parties may be reimbursed for lawyers ' fees . 
But Shepard Goldfein , an attorney for the NFL , says his client will consider asking for another hearing or appealing to the U.S. Supreme Court . 
Mr. Goldfein , of Skadden , Arps , Slate , Meagher & Flom in New York , says the ruling is wrong and the fee award is excessive because the USFL lost its major claims , including its contention that the NFL restrained trade through television contracts . 
`` The USFL was not the prevailing party , '' Mr. Goldfein insists . 
HOUSTON-CALGARY ALLIANCE : Fulbright & Jaworski of Houston and Fenerty , Robertson , Fraser & Hatch of Calgary , Alberta , are affiliating to help serve their energy-industry clients . 
The affiliation is believed to be the first such cross-border arrangement among major law firms . 
The firms are n't required to refer work exclusively to each other and remain separate organizations . 
But they will work together on energy - , environmental - and fair-trade-related issues and conduct seminars on topics of mutual interest , said Gibson Gayle Jr. of 585-lawyer Fulbright & Jaworski . 
In addition , Fulbright & Jaworski 's Washington , D.C. , office will play a key role as the firms work together on regulatory issues , particularly natural-gas exports , for their clients . 
The arrangement , reached after about eight months of negotiations , grew out of 80-lawyer Fenerty Robertson 's desire to develop ties with a U.S. firm in light of relaxed trade barriers between the U.S. and Canada , said Francis M. Saville of Fenerty Robertson . 
IN WHAT MAY SIGNAL a turnaround for asbestos manufacturers , W.R. Grace & Co. won a 3 1\2-week trial in Pittsburgh over whether it should be required to remove asbestos fireproofing from a local high school . 
Mount Lebanon High School , near Pittsburgh , sought $ 21 million in compensatory damages from Grace , arguing that the asbestos , which can cause respiratory diseases and lung cancer , posed a risk to students . 
Grace successfully contended that removing the fire retardant would pose a greater health risk than leaving it alone . 
A spokesman for the company said the verdict is thought to be the first in favor of an asbestos manufacturer where the plaintiff was a school and the asbestos in question was used for fireproofing . 
FCC COUNSEL JOINS FIRM : Diane S. Killory will join 500-lawyer Morrison & Foerster as a partner in its Washington , D.C. , office in mid-November . 
She will help develop the mass-media practice of the San Francisco-based firm 's communications group . 
Ms. Killory , 35 years old , resigned as Federal Communications Commission general counsel early this month after nearly three years in that post . 
She was the first woman to be appointed FCC general counsel . 
RICHARD P. MAGURNO , formerly Eastern Airlines ' top lawyer , joined the New York law firm of Lord Day & Lord , Barrett Smith as a partner . 
Mr. Magurno , 45 , spent 17 years at the Miami airline unit of Houston-based Texas Air Corp. and was named general counsel in 1984 . 
He left the company in 1987 . 
Mr. Magurno said he will split his time between the 200-lawyer firm 's offices in Washington , D.C. , and New York , with specialties in aviation and labor law . 
Apple Computer Inc. said it will offer cash rebates on several of its machines from Oct. 14 to Dec. 31. , as part of a holiday-season sales promotion . 
Apple will offer a $ 150 rebate on its Apple IIGS with any Apple Monitor and disk drive ; $ 200 on the basic Macintosh Plus central processing unit ; $ 250 on the Macintosh SE central processing unit ; $ 250 on the Macintosh SE\30 cpu , and $ 300 on a Macintosh IIcx with any Apple video card and Apple monitor . 
The rebates , as a percentage of the retail cost of the cpu of each system , amount to 6 % to 13 % . 
The company is also offering a free trial of its computers to consumers who qualify for its credit cards or leases . 
Matsushita Electric Industrial Co. of Japan and Siemens AG of West Germany announced they have completed a 100 million-mark ( $ 52.2 million ) joint venture to produce electronics parts . 
In the venture 's first fiscal year , Siemens will hold 74.9 % of the venture and a Matsushita subsidiary , Matsushita Electronic Components Co. , 25.1 % . 
A basic agreement between the two companies was announced in June . 
The new company is to be called Siemens Matsushita Components G.m.b . 
H . 
It will have its headquarters in Munich . 
Matsushita 's share in the venture will rise to 35 % Oct. 1 , 1990 , and to 50 % the following Oct. 1 . 
Siemens will retain majority voting rights . 
The parent companies forecast sales for the venture of around 750 million marks for its first fiscal year , Matsushita said . 
Sales are expected to rise to one billion marks after four years . 
The company will have production facilities in West Germany , Austria , France and Spain . 
Roger Rosenblatt , editor of U.S. News & World Report , resigned Friday from the weekly news magazine . 
Mr. Rosenblatt said he resigned because of difficulties with commuting between his home in New York and the magazine 's editorial offices in Washington . 
`` Frankly , I missed my family , '' said Mr. Rosenblatt . 
In Mr. Rosenblatt 's tenure , the magazine 's advertising pages and circulation have grown significantly . 
But at 2.3 million weekly paid circulation , U.S. News still ranks third behind Time Warner Inc. 's Time magazine , with 4.4 million circulation , and Washington Post Co. 's Newsweek , with 3.3 million circulation . 
Mortimer B. Zuckerman , chairman and editor in chief , said Mr. Rosenblatt would be succeeded starting today by Michael Ruby , the magazine 's executive editor , and Merrill McLoughlin , a senior writer . 
Mr. Ruby and Ms. McLoughlin are married to each other . 
Mr. Zuckerman said his magazine would maintain its editorial format , which is a mix of analysis and trend stories with service-oriented , how-to articles . 
Mr. Rosenblatt , a senior writer at Time magazine before joining U.S. News & World Report , said he had numerous job offers from other magazines while he was editor . 
The offers were to work as a writer , not an editor . 
He said he will now consider those offers . 
Avions Marcel Dassault-Breguet Aviation S.A. said group profit before taxes and contributions to employee profit-sharing soared 97 % to 839 million francs ( $ 129.6 million ) in the first half of 1989 from 425 million francs a year earlier . 
The French aircraft group pointed out , however , that financial results from its sector of industry are frequently erratic because of irregular cash flow from large contracts . 
It noted , for example , that group revenue for the first half was 8.734 billion francs , down about 12 % from 9.934 billion francs a year earlier . 
Still , it said it expects sales for all of 1989 to be on the order of 20 billion francs , reflecting anticipated billings for two large contracts in the second half of the year . 
For all of 1988 , Dassault had group profit of 428 million francs on revenue of 18.819 billion francs . 
The group has n't yet released earnings figures for the first half of 1989 , nor has it made a detailed forecast of its full-year earnings . 
Keystone Consolidated Industries Inc. expects to report earnings before extraordinary tax benefits of about $ 1.5 million , or about 41 cents a share , for the third quarter , compared with a loss last year , said Glenn R. Simmons , chairman and chief executive officer . 
After a tax benefit of about $ 780,000 , Keystone expects to report net income of $ 2.3 million , or about 62 cents a share , Mr. Simmons said . 
For third quarter last year , Keystone reported a $ 1 million loss from continuing operations and a $ 200,000 loss from discontinued operations , for a net loss of $ 1.2 million . 
Revenue for the latest third quarter was about $ 70.5 million , up 10 % from $ 63.6 million last year , he said . 
Mr. Simmons said the results signal a turnaround for the maker of wire and wire products , which has struggled to remain competitive in the face of lower-priced , imported steel . 
A new $ 46 million steel rod minimill , which got off to a rocky start in early 1988 , now is running efficiently and a new management team is more heavily marketing Keystone 's products , Mr. Simmons said . 
As a result , the company hopes to report net income for the year of about $ 11.6 million , or about $ 3.10 to $ 3.15 a share , compared with a net loss of $ 24.4 million last year , after a loss from discontinued operations of $ 18.4 million . 
Revenue for 1989 is expected to be about $ 300 million , up about 21 % from $ 247.3 million in 1988 . 
For the nine months ended Sept. 30 , Keystone expects to report net income of $ 9.3 milion , or about $ 2.53 a share , after an extraordinary gain from $ 3.2 million in tax benefits . 
Last year , the company had a net loss of $ 6.5 million , including a $ 6.1 million loss from continuing operations and a $ 400,000 loss from discontinued operations . 
Revenue for the nine months is expected to be about $ 230.5 million , up about 21 % from $ 190.4 million last year . 
Mr. Simmons said Keystone 's new mill is expected to produce about 585,000 tons of steel rods this year , up from 413,000 tons in 1988 . 
Production at the mill has exceeded the ability of Keystone 's casting operation to supply it , he said , which will force Keystone to purchase billet , or unfinished steel bars , from outside the company during the fourth quarter and next year . 
Keystone will have to consider expanding its casting operation , at an estimated cost of $ 8 million to $ 10 million , within the next 18 to 24 months , Mr. Simmons said . 
Under Robert W. Singer , who was named president and chief operating officer last year , Keystone has expanded its sales force to about 20 people from about 15 and hopes to expand its sales from the middle portion of the country toward the East and West coasts . 
`` Prior to a year ago , Keystone was an order-taker . 
Now I think we have a group of marketing people who are out selling to retailers and wholesalers , '' Mr. Simmons said . 
Still , he said , the 100-year-old company plans to continue its premium-priced strategy for its distinctive brand of red-tipped wire fencing and other products . 
The company claims a 40 % share of the U.S. field fence business , a 35 % share of poultry netting sales and a 30 % share of barbed wire sales . 
Freeport-McMoRan Inc. said a temporary cessation of operations at its Sunshine Bridge uranium-recovery facility in Donaldsonville , La. , will result in slight earnings improvement to both the company and its Freeport-McMoRan Resource Partners Limited Partnership unit . 
The company did n't elaborate . 
The diversified energy and minerals concern said that a depressed uranium market is responsible for the temporary mothballing of the plant , but that the plant can be reactivated quickly when the market improves . 
More than 400,000 pounds of uranium a year have been produced at the facility during the past seven years . 
A second uranium-recovery plant at Uncle Sam , La. , that produces more than 700,000 pounds of uranium annually , will continue to operate . 
Freeport-McMoRan said the shutdown wo n't affect sales volumes under long-term sales contracts of its Freeport Uranium Recovery Co. unit , but will reduce the amount of product sold on the spot market . 
Freeport-McMoRan Resource Partners , as owner of the uranium-recovery technology , receives royalty payments . 
Business Week subscribers may hear this week 's issue talking back to them . 
A four-page ad from Texas Instruments Inc. , running in approximately 140,000 issues of the Oct. 20 `` Corporate Elite '' issue of the McGraw-Hill Inc. publication , contains a speech synthesizer laminated between two of the pages . 
Readers who pull off a piece of tape and press a switch will hear a tiny -- but distinctly human-sounding -- voice announce , `` I am the talking chip , '' as it launches into a 15-second discourse on its own attributes . 
The talking chip is n't cheap -- the per-ad cost to Texas Instruments is about $ 4 , and that 's without adding in Business Week 's charge -- but Texas Instruments believes it is a first . 
Previous efforts have included musical ads , featuring simple tone-generating chips that play a tune , but the voice synthesizer in this effort is much more sophisticated , with none of the robotic flatness that one hears , for example , when calling telephone directory services . 
And for those who miss the message the first time around , not to worry : Three tiny batteries provide enough juice for as many as 650 replays . 
Lomas Financial Corp. , Dallas , said it will ask a U.S. bankruptcy court to allow it to hire Lazard Freres & Co. to help it sell its leasing unit . 
Lomas , assisted by Merrill Lynch Capital Markets , has been trying to sell its Equitable Lomas Leasing Co. for several months , apparently without success . 
The real estate and mortgage banking concern had hoped to use proceeds from the sale to reduce its debt . 
Without cash from asset sales and unable to reach a new bank-credit agreement , Lomas defaulted on $ 145 million in notes that became due Sept. 1 . 
It filed for protection from creditors under Chapter 11 of the federal Bankruptcy Code Sept. 24 to give it additional time to work on a plan to restructure its $ 1.45 billion in senior debt . 
Lomas said Merrill Lynch , which owns bonds and equity in Lomas , could n't continue as Lomas 's investment banker because it is also a creditor . 
It said it chose Lazard in part because of Lazard 's offices in Europe and Japan , where investors might be interested in a U.S. leasing company . 
Canadian Imperial Bank of Commerce said it will increase its loan-loss provisions to cover all its loans to lesser developed countries , except Mexico , resulting in an after-tax charge to 1989 earnings of 300 million Canadian dollars ( US$ 255 million ) . 
Don Bowder , senior vice president and chief accountant , said the bank 's strong earnings enable it to be the first major Canadian bank to set aside provisions covering all its C$ 1.17 billion in non-Mexican LDC debt . 
`` It eliminates the continuing uncertainty with respect to the ultimate value of the loans , '' he said . 
The bank said about C$ 525 million will be added to its existing LDC and general loss provisions in its fourth quarter , ending Oct. 31 . 
Mr. Bowder said the C$ 300 million charge to earnings would amount to about C$ 1.34 a share . 
The bank 's net income for the nine months ended July 31 was C$ 577 million , or C$ 3.10 a share . 
Mr. Bowder said the bank will restructure its C$ 604 million of Mexican debt , of which C$ 255 million is in Mexican notes secured by U.S. government bonds . 
The bank has a 45 % reserve against the remaining C$ 349 million of Mexican debt and expects to swap that for other Mexican notes supported by U.S. Treasury zero-coupon bonds . 
Mr. Bowder said the bank 's experience with LDC debt has been `` painful '' and this latest move represents the final phase of a program begun seven years ago to reduce its exposure through provisioning , debt sales and debt swaps . 
He said the bank will no longer participate in LDC sovereign lending , but will support trade financing and other transactions that meet the bank 's standards . 
The carnage among takeover stocks Friday does n't mean the end of mega-mergers but simply marks the start of a less ambitious game , Wall Street 's big-time deal makers say . 
Suitors from now on are more likely to be expansion-minded companies , rather than raiders or debt-happy financiers . 
And they will be launching lower-priced and perhaps fewer deals , now that it 's tougher to finance them . 
This is an ominous sign for a stock market that lately has been fueled by takeover speculation and bidding wars for companies that put themselves up for sale . 
Whenever the 1980s merger boom seems to be stalling , shock waves ripple through the stock market . 
`` The market is overvalued , not cheap , '' says Alan Gaines of the New York money-management firm Gaines Berland . 
He recently began increasing his cash position to 45 % of his portfolio . 
`` I look at where deals can get done , '' he says , `` and they 're not getting done '' at current prices . 
Lenders are growing increasingly nervous about debt-financed takeovers , investment bankers say . 
`` You had a week of a deteriorating junk-bond market that ran smack into the news on Friday about what appeared to be happening to the bank debt market , '' says Steven Rattner , a partner and merger specialist with Lazard Freres & Co . 
Trading dried up Friday in the market for high-yield junk bonds , often used to finance takeovers . 
It was the latest in a series of setbacks for the junk bond market , where prices began weakening last month after Campeau hit a cash crunch . 
And banks appear to be taking an increasingly skeptical view of requests for high-risk takeover loans . 
The group trying to buy UAL announced Friday that it could n't arrange the $ 7.2 billion in bank loans it needs to buy the parent of United Airlines for $ 300 a share . 
Takeover-stock traders today will be scrambling to learn of any UAL developments , and other takeover stocks are likely to trade in sympathy . 
Investment bankers representing the buy-out group and UAL 's board spent a frantic weekend trying to hammer out new terms that would be more acceptable to the banks . 
After UAL , the stock viewed as most vulnerable is American Airlines ' parent AMR , the target of a $ 120-a-share takeover proposal from New York real estate developer Donald Trump . 
Trading in AMR shares was suspended shortly after 3 p.m. EDT Friday and did n't resume . 
Before the halt , AMR last traded at 98 5\8 . 
Late Friday night , the London office of Jefferies & Co. , a Los Angeles securities firm , traded AMR shares at prices as low as 80 . 
Similarly , Delta Air Lines and USAir Group dropped 10.1 % and 8.5 % , respectively , on Friday and could weaken further . 
Over the weeked , however , two developments in other deals indicated that commerical banks and Wall Street firms still are willing to commit billions of dollars to finance takeover bids launched by major companies . 
Vitro S.A. , a major Mexican glass maker , said yesterday that it agreed to buy Anchor Glass Container in a tender offer for $ 21.25 a share , sweetened from the original $ 20-a-share offer Vitro launched two months ago . 
On Friday , Anchor shares fell 1 1\4 to close at 18 1\2 . 
For the broader market , the greatest significance of the Vitro-Anchor deal may be that it was put together late Friday night -- after the market rout -- and involves a $ 155 million temporary `` bridge '' loan from Donaldson , Lufkin & Jenrette Securities and a $ 139 million loan from Security Pacific National Bank . 
Moreover , to complete the entire Anchor Glass purchase and refinance existing debt , Donaldson said it is `` highly confident '' that it will be able to sell $ 400 million of junk bonds for Vitro , despite the current disarray in the junk bond market . 
Donaldson 's statement is n't merely an idle boast , because those bonds will have to be sold before Donaldson 's bridge loan can be paid back . 
Security Pacific , meanwhile , said it expects to arrange $ 430 million in bank loans for Vitro . 
In another takeover battle , a spokesman for McCaw Cellular Communications said yesterday that McCaw has been advised by three commercial banks that they remain `` highly confident '' they can arrange $ 4.5 billion of bank loans for McCaw 's tender offer for about 45 % of LIN Broadcasting , `` notwithstanding recent events . 
'' McCaw is offering $ 125 a share for 22 million LIN shares , thereby challenging LIN 's proposal to spin off its television properties , pay shareholders a $ 20-a-share special dividend and combine its cellular-telephone operations with BellSouth 's cellular business . 
On Friday , LIN shares were among the few takeover issues that did n't fall much , dropping 5 1\2 , or 4.9 % , to close at 107 1\2 . 
Traders and investment bankers said LIN shares were n't hurt much because BellSouth is viewed as a well-financed corporate buyer unlikely to be affected by skittishness among bankers or bond buyers . 
Investment bankers interviewed over the weekend see a silver lining for the merger business in the stock-market drop . 
Potential bidders for companies `` were saying that things were beginning to look expensive , '' says Mr. Rattner of Lazard . 
`` Nothing makes things look cheaper than a 200-point drop in the Dow , '' Mr. Rattner says . 
`` Just as there are people waiting to become bargain hunters in the stock market , there are people waiting to become bargain hunters in the deal market . 
'' Investment bankers expect most of those bargain hunters to be well-heeled corporations . 
`` In the past , corporate buyers were often discouraged from making bids because of competition from LBO firms , which were often prepared to outbid '' the corporations , says J. Tomilson Hill , head of mergers and acquisitions at Shearson Lehman Hutton . 
Now , `` corporate buyers should be willing to re-enter the acquisition market because the competition from junkbond-financed buyers has been reduced . 
'' Many takeover stocks plunged Friday , as speculators retained their confidence in corporate buyers but fled from the socalled whisper stocks , the targets of rumored deals . 
Columbia Pictures Entertainment , which has agreed to a friendly $ 27-a-share bid from Sony of Japan , fell only 1\8 to close at 26 5\8 . 
But several stocks long rumored to be ripe for a takeover or restructuring fell 10 % or more . 
They include USX , down 11.7 % ; Upjohn , down 11.1 % ; Campbell Soup , down 11 % ; Paramount Communications , off 10.3 % ; Woolworth , down 10.2 % ; Delta Air Lines , down 10.1 % , and MCA , down 9.7 % . 
The market -- and investment bankers -- are even less sanguine about companies that have had at least one bid , merger agreement or restructuring plan fall through already . 
Given the weakness in both the junk bond market and the stock market , traders fear that these transactions may be revised yet again . 
Examples include Kollmorgen , whose agreement to be acquired for $ 25 a share by Vernitron collapsed last month . 
Kollmorgen shares fell nearly 20 % on Friday to close at 12 7\8 . 
Ramada , which first delayed and then shelved a $ 400 million junk bond sale that was designed to help finance a restructuring , fell 15.6 % to close at 9 1\2 . 
Ramada has said it hopes to propose a new restructuring plan but has n't indicated when it will do so . 
Shares of American Medical International , which agreed last week to accept a lower price from a buy-out group that includes First Boston Corp. and the Pritzker family of Chicago , fell 15.8 % on Friday to close at 20 . 
The buy-out group is offering $ 26.50 a share for 63 million American Medical shares , down from its offer in July of $ 28 a share for 68.8 million shares . 
But investment bankers say the market may have oversold some takeover-related stocks . 
Hilton Hotels , for example , was among the worst-hit issues , falling 20.2 % to close at 85 , down 21 1\2 on Friday . 
Hilton currently is soliciting bids for a sale of part or all of its hotel and casino businesses . 
People familiar with Hilton said over the weekend that the depth of the sell-off in Hilton shares was unwarranted because none of the likely buyers would be dependent on junk-bond financing . 
However , they conceded that some potential bidders would rely on bank loans and would be hurt if the troubles of the UAL buy-out group signified a general unwillingness among banks to provide credit for debt-financed takeovers . 
Hilton officials said they were n't worried about the drop in the company 's stock . 
William Lebo , Hilton 's general counsel , said plans to consider a sale of the company or some of its assets are `` on track '' for what has been described previously as `` a slow and deliberate process . 
'' `` I ca n't believe that any potential buyer for Hilton would be affected by one day 's trading , '' Mr. Lebo said . 
But the stock market as a whole , bolstered as it is by takeover speculation , remains vulnerable to any further pullback by takeover financiers , both in the junkbond market and among commercial banks . 
For debt-ridden suitors , `` the takeover game has been over for some time , '' says New York money manager Neil Weisman of Chilmark Capital , who has been keeping 85 % of his portfolio in cash . 
`` The market is just waking up to that point . 
'' Pauline Yoshihashi in Los Angeles contributed to this column . 
Of all the one-time expenses incurred by a corporation or professional firm , few are larger or longer term than the purchase of real estate or the signing of a commercial lease . 
To take full advantage of the financial opportunities in this commitment , however , the corporation or professional firm must do more than negotiate the best purchase price or lease terms . 
It must also evaluate the real-estate market in the chosen location from a new perspective . 
Specifically , it must understand how real-estate markets overreact to shifts in regional economies and then take advantage of these opportunities . 
When a regional economy catches cold , the local real-estate market gets pneumonia . 
In other words , real-estate market indicators , such as building permits and leasing activity , plummet much further than a local economy in recession . 
This was seen in the late 1960s in Los Angeles and the mid-1970s in New York . 
But the reverse is also true : When a region 's economy rebounds from a slowdown , these real-estate indicators will rebound far faster than the improving economy . 
Why do local real-estate markets overreact to regional economic cycles ? Because real-estate purchases and leases are such major long-term commitments that most companies and individuals make these decisions only when confident of future economic stability and growth . 
Metropolitan Detroit was written off economically during the early 1980s , as the domestic auto industry suffered a serious sales depression and adjustment . 
Area employment dropped by 13 % from its 1979 peak and retail sales were down 14 % . 
However , the real-estate market was hurt even more . 
For example , residential building permits in the trough year of 1982 were off 76 % from the 1979 peak level . 
Once metropolitan Detroit 's economy rallied in the mid-1980s , real estate rebounded . 
Building permits , for example , soared a staggering 400 % between 1982 and the peak year of 1986 . 
Where , savvy corporations and professional firms are now asking , are today 's opportunities ? Look no further than metropolitan Houston and Denver , two of the most depressed , overbuilt and potentially undervalued real-estate markets in the nation . 
Of course , some observers have touted Houston and Denver for the past five years as a counter-cyclical play . 
But now appears to be the time to act . 
Metropolitan Houston 's economy did drop and then flatten in the years after its 1982 peak . 
In the mid-1980s , employment was down as much as 5 % from the 1982 peak and retail sales were off 13 % . 
The real-estate market suffered even more severe setbacks . 
Office construction dropped 97 % . 
The vacancy rate soared more than 20 % in nearly every product category , and more than 30 % of office space was vacant . 
To some observers , the empty office buildings of Houston 's `` see-through skyline '' were indicative of a very troubled economy . 
As usual , the real-estate market had overreacted . 
Actually , the region 's economy retained a firm foundation . 
Metropolitan Houston 's population has held steady over the past six years . 
And personal income , after slumping in the mid-1980s , has returned to its 1982 level in real dollar terms . 
Today , metropolitan Houston 's real-estate market is poised for a significant turnaround . 
More than 42,000 jobs were added in metro Houston last year , primarily in biotechnology , petrochemical processing , and the computer industry . 
This growth puts Houston in the top five metro areas in the nation last year . 
And forecasts project a 2.5 % to 3 % growth rate in jobs over the next few years -- nearly twice the national average . 
Denver is another metropolitan area where the commercial real-estate market has overreacted to the region 's economic trends , although Denver has not experienced as severe an economic downturn as Houston . 
By some measures , metropolitan Denver 's economy has actually improved in the past four years . 
Its population has continued to increase since 1983 , the peak year of the economic cycle . 
Employment is now 4 % higher than in 1983 . 
Buying income in real dollars actually increased 15 % between 1983 and 1987 ( the most recent year available ) . 
The rates of increase , however , are less than the rapid growth of the boom years , and this has resulted in a loss of confidence in the economy . 
In a self-fulfilling prophecy , therefore , the region 's real-estate market all but collapsed in recent years . 
Housing building permits are down more than 75 % from their 1983 peaks . 
Although no one can predict when metropolitan Denver 's real-estate market will rebound , major public works projects costing several billion dollars are under way or planned -- such as a new convention center , a major beltway encircling the metropolitan area , and a new regional airport . 
When Denver 's regional economy begins to grow faster -- such a recovery could occur as early as next year -- business and consumer confidence will return , and the resulting explosion of real-estate activity will dwarf the general economic rebound . 
What real-estate strategy should one follow in a metropolitan area whose economic health is not as easy to determine as Houston 's or Denver 's ? Generally , overcapacity in commercial real estate is dropping from its mid-1980s peak , even in such economically healthy metropolitan areas as Washington , New York and Los Angeles . 
Vacancy rates in the 15 % to 19 % range today may easily rise to the low to mid-20 % range in a couple of years . 
Under these conditions , even a flattening out of economic growth -- `` catching cold '' -- in the healthy metropolitan areas will create significant opportunities for corporations and professional service firms looking for bargains as the realestate industry catches pneumonia . 
Those looking for real-estate bargains in distressed metropolitan areas should lock in leases or buy now ; those looking in healthy metropolitan areas should take a short-term ( three-year ) lease and wait for the bargains ahead . 
Mr. Leinberger is managing partner of a real-estate advisory firm based in Beverly Hills , Calif . 
Kysor Industrial Corp. said it expects its third-quarter net earnings to be between two cents and four cents a share , compared with 61 cents a share a year ago . 
Analysts had been projecting that the company 's earnings would be between 25 cents and 30 cents a share . 
The year-earlier third-quarter earnings amounted to $ 4.1 million . 
The company said a drop in activity in the powerboat industry reduced sales volume at its two marine-related operations . 
Also , the company said its commercial products operation failed to meet forecasts . 
Kysor , a maker of heavy-duty truck and commercial refrigeration equipment , said it expects its fourth-quarter earnings to be more closely in line with usual levels , which are between 30 cents and 50 cents a share . 
Common Cause asked both the Senate Ethics Committee and the Justice Department to investigate $ 1 million in political gifts by Arizona businessman Charles Keating to five U.S. senators who interceded with thrift-industry regulators for him . 
Mr. Keating is currently the subject of a $ 1.1 billion federal anti-racketeering lawsuit accusing him of bleeding off assets of a California thrift he controlled , Lincoln Savings & Loan Association , and driving it into insolvency . 
Fred Wertheimer -- president of Common Cause , the self-styled citizens lobby -- said Mr. Keating already has conceded attempting to buy influence with the lawmakers -- Democratic Sens. Dennis DeConcini of Arizona , Alan Cranston of California , John Glenn of Ohio and Donald Riegle of Michigan ; and GOP Sen. John McCain of Arizona . 
Mr. Wertheimer based this on a statement by Mr. Keating that was quoted in a Wall Street Journal story in April : `` One question ... had to do with whether my financial support in any way influenced several political figures to take up my cause . 
I want to say in the most forceful way I can : I certainly hope so . 
'' In a highly unusual meeting in Sen. DeConcini 's office in April 1987 , the five senators asked federal regulators to ease up on Lincoln . 
According to notes taken by one of the participants at the meeting , the regulators said Lincoln was gambling dangerously with depositors ' federally insured money and was `` a ticking time bomb . 
'' Mr. Keating had complained that the regulators were being too zealous . 
The notes show that Sen. DeConcini called the Federal Home Loan Bank Board 's regulations `` grossly unfair , '' and that Sen. Glenn insisted that Mr. Keating 's thrift was `` viable and profitable . 
'' For the next two years , the Bank Board , which at the time was the agency responsible for regulating thrifts , failed to act -- even after federal auditors warned in May 1987 that Mr. Keating had caused Lincoln to become insolvent . 
Lincoln 's parent company , American Continental Corp. , entered bankruptcy-law proceedings this April 13 , and regulators seized the thrift the next day . 
The newly formed Resolution Trust Corp. , successor to the Bank Board , filed suit against Mr. Keating and several others on Sept. 15 . 
Mr. Keating has filed his own suit , alleging that his property was taken illegally . 
The cost to taxpayers of Lincoln 's collapse has been estimated at as much as $ 2.5 billion . 
Details of the affair have become public gradually over the past two years , mostly as a result of reporting by several newspapers . 
In the midst of his 1988 re-election campaign , Sen. Riegle , chairman of the Senate Banking Committee , returned $ 76,000 in contributions after a Detroit newspaper said that Mr. Keating had gathered the money for him about two weeks before the meeting with regulators . 
Sen. DeConcini , after months of fending off intense press criticism , returned $ 48,000 only last month , shortly after the government formally accused Mr. Keating of defrauding Lincoln . 
In addition , Sen. McCain last week disclosed that he belatedly had paid $ 13,433 to American Continental as reimbursement for trips he and his family took aboard the corporate jet to Mr. Keating 's vacation home at Cat Cay , the Bahamas , from 1984 through 1986 . 
Sen. McCain said he had meant to pay for the trips at the time but that the matter `` fell between the cracks . 
'' Mr. Keating , his family members and associates also donated $ 112,000 to Sen. McCain 's congressional campaigns over the years , according to press accounts . 
But Sen. McCain says Mr. Keating broke off their friendship abruptly in 1987 , because the senator refused to press the thrift executive 's case as vigorously as Mr. Keating wanted . 
`` He became very angry at that , left my office and told a number of people that I was a wimp , '' Sen. McCain recalls . 
In July , California newspapers disclosed that Mr. Keating gave $ 850,000 in corporate funds to three tax-exempt voter registration organizations in 1987 and 1988 at the behest of Sen. Cranston , who conceded that soliciting the money was `` a pretty stupid thing to do politically . 
'' In addition , Sen. Cranston received $ 47,000 in campaign donations through Mr. Keating , and the California Democratic party received $ 85,000 in corporate donations for a 1986 get-out-the-vote drive that benefited the senator 's re-election campaign that year . 
Also in July , Ohio newspapers disclosed $ 200,000 in corporate donations by Mr. Keating to the National Council on Public Policy , a political committee controlled by Sen. Glenn . 
That was in addition to $ 34,000 in direct campaign donations arranged by Mr. Keating to the Ohio senator . 
Mr. Wertheimer said the Senate Ethics Committee should hire a special outside counsel to conduct an investigation , as was done in the case of former House Speaker James Wright . 
Wilson Abney , staff director of the ethics panel , would n't comment . 
Sen. Riegle said he would cooperate with any inquiry , but that his conduct had been `` entirely proper . 
'' Sen. McCain said he had been `` deeply concerned '' at the time of the meeting that it might seem to be improper , but decided it was `` entirely appropriate '' for him to seek fair treatment for a constituent . 
Sen. Glenn said he had already made a complete disclosure of his role in the affair and `` I am completely satisfied to let this matter rest in the hands of the Senate Ethics Committee . 
'' Sen. DeConcini said , `` When all is said and done , I expect to be fully exonerated . 
'' Sen. Cranston , who had already volunteered his help to the Federal Bureau of Investigation in any investigation of Mr. Keating , portrayed his role in 1987 as prodding regulators to act . 
`` Why did n't the Bank Board act sooner ? '' he said . 
`` That is what Common Cause should ask be investigated . 
'' Trinity Industries Inc. said it reached a preliminary agreement to manufacture 1,000 coal rail cars for Norfolk Southern Corp . 
Trinity estimated the value of the pact at more than $ 40 million . 
Trinity said it plans to begin delivery of the rail cars in the first quarter of 1990 . 
It said the 1,000 rail cars are in addition to the 1,450 coal rail cars presently being produced for Norfolk Southern , a Norfolk , Va.-based railroad concern . 
When China opened its doors to foreign investors in 1979 , toy makers from Hong Kong were among the first to march in . 
Today , with about 75 % of the companies ' products being made in China , the chairman of the Hong Kong Toys Council , Dennis Ting , has suggested a new sourcing label : `` Made in China by Hong Kong Companies . 
'' The toy makers were pushed across the border by rising labor and land costs in the British colony . 
But in the wake of the shootings in Beijing on June 4 , the Hong Kong toy industry is worrying about its strong dependence on China . 
Although the manufacturers stress that production has n't been affected by China 's political turmoil , they are looking for additional sites . 
The toy makers , and their foreign buyers , cite uncertainty about China 's economic and political policies . 
`` Nobody wants to have all his eggs in one basket , '' says David Yeh , chairman and chief executive officer of International Matchbox Group Ltd . 
Indeed , Matchbox and other leading Hong Kong toy makers were setting up factories in Southeast Asia , especially in Thailand , long before the massacre . 
Their steps were partly prompted by concern over a deterioration of business conditions in southern China . 
By diversifying supply sources , the toy makers do n't intend to withdraw from China , manufacturers and foreign buyers say . 
It would n't be easy to duplicate quickly the manufacturing capacity built up in southern China during the past decade . 
A supply of cheap labor and the access to Hong Kong 's port , airport , banks and support industries , such as printing companies , have made China 's Guangdong province a premier manufacturing site . 
`` South China is the most competitive source of toys in the world , '' says Henry Hu , executive director of Wah Shing Toys Consolidated Ltd . 
Hong Kong trade figures illustrate the toy makers ' reliance on factories across the border . 
In 1988 , exports of domestically produced toys and games fell 19 % from 1987 , to HK$ 10.05 billion ( US$ 1.29 billion ) . 
But re-exports , mainly from China , jumped 75 % , to HK$ 15.92 billion . 
In 1989 's first seven months , domestic exports fell 29 % , to HK$ 3.87 billion , while re-exports rose 56 % , to HK$ 11.28 billion . 
Manufacturers say there is no immediate substitute for southern China , where an estimated 120,000 people are employed by the toy industry . 
`` For the next few years , like it or not , China is going to be the main supplier , '' says Edmund Young , vice president of Perfecta Enterprises Ltd. , one of the first big Hong Kong toy makers to move across the border . 
In the meantime , as manufacturers and buyers seek new sites , they are focusing mainly on Southeast Asia . 
Several big companies have established manufacturing joint ventures in Thailand , including Matchbox , Wah Shing and Kader Industrial Co. , the toy manufacturer headed by Mr. Ting . 
Malaysia , the Philippines and Indonesia also are being studied . 
With the European Community set to remove its internal trade barriers in 1992 , several Hong Kong companies are beginning to consider Spain , Portugal and Greece as possible manufacturing sites . 
Worries about China came just as Hong Kong 's toy industry was recovering from a 1987 sales slump and bankruptcy filings by two major U.S. companies , Worlds of Wonder Inc. and Coleco Industries Inc . 
Hong Kong manufacturers say large debt writeoffs and other financial problems resulting from the 1987 difficulties chastened the local industry , causing it to tighten credit policies and financial management . 
The industry regards last year and this year as a period of recovery that will lead to improved results . 
Still , they long for a `` mega-hit '' toy to excite retail sales in the U.S. , Hong Kong 's biggest market for toys and games . 
The closest thing the colony 's companies have to a U.S. mega-hit this year is the Teenage Mutant Ninja Turtles series of action figures manufactured by Playmates Holdings Ltd . 
Introduced in mid-1988 , the 15-centimeter-tall plastic turtles are based on an American comic book and television series . 
Paul Kwan , managing director of Playmates , says 10 million Ninja Turtles have been sold , placing the reptilian warriors among the 10 biggest-selling toys in the U.S . 
Should sales continue to be strong through the Christmas season , which accounts for about 60 % of U.S. retail toy sales , Mr. Kwan said the Ninja Turtles could make 1989 a record sales year for Playmates . 
Other Hong Kong manufacturers expect their results to improve only slightly this year from 1988 . 
Besides the lack of a fast-selling product , they cite the continued dominance of the U.S. market by Nintendo Entertainment System , an expensive video game made by Nintendo Co. of Japan . 
Nintendo buyers have little money left to spend on other products . 
Many of the toy makers ' problems started well before June 4 as a result of overstrained infrastructure and Beijing 's austerity programs launched late last year . 
Toy makers complain that electricity in Guangdong has been provided only three days a week in recent months , down from five days a week , as the province 's rapid industrialization has outstripped its generating capacity . 
Manufacturers are upgrading standby power plants . 
Bank credit for China investments all but dried up following June 4 . 
Also , concern exists that the harder-line Beijing leadership will tighten its control of Guangdong , which has been the main laboratory for the open-door policy and economic reforms . 
But , toy manufacturers and other industrialists say Beijing will be restrained from tightening controls on export-oriented southern China . 
They say China 's trade deficit is widening and the country is too short of foreign exchange for it to hamper production in Guangdong . 
`` The Chinese leaders have to decide whether they want control or whether the want exports , '' says Mr. Kwan of Playmates . 
The Bush administration , urging the Supreme Court to give states more leeway to restrict abortions , said minors have n't any right to abortion without the consent of their parents . 
Solicitor General Kenneth Starr argued that the 1973 Supreme Court decision , Roe vs. Wade , recognizing a constitutional right to abortion , was incorrect . 
He also argued that the high court was wrong in 1976 to rule that minors have a right to abortion that ca n't be absolutely vetoed by their parents . 
The administration 's position was outlined in a friend-of-the-court brief filed in one of three abortion cases the Supreme Court will hear argued and will decide this term . 
The administration filed the brief in an appeal involving a Minnesota law that requires that both parents of a minor be notified before she may have an abortion . 
The administration urged the justices to adopt a legal standard suggested by Chief Justice William Rehnquist last July when the high court upheld Missouri 's abortion restrictions . 
Under that standard , which garnered the votes of only three of the nine justices , a state restriction of abortion is constitutional if the state has a `` reasonable '' justification for adopting it . 
That is a much easier standard for a state to satisfy than the Supreme Court 's test since 1973 , which requires a state to have a `` compelling '' reason for restricting abortion . 
On the provisions of the Minnesota law , the Bush administration said that requiring that both parents be notified is a reasonable regulation , and that there is no need to have an alternative that allows minors to go to court for a judge 's permission instead . 
The case , Hodgson vs. Minnesota , will be argued Nov. 29 . 
Aluminum Co. of America , hit hard by the strength of the dollar overseas , said net income for the third quarter dropped 3.2 % to $ 219 million , or $ 2.46 a share . 
The nation 's No. 1 aluminum maker earned $ 226.3 million , or $ 2.56 a share , a year earlier . 
Revenue rose 11 % to $ 2.83 billion from $ 2.56 billion . 
Analysts , who were expecting Alcoa to post around $ 2.70 to $ 3 a share , were surprised at the lackluster third-quarter results . 
`` It 's disappointing , '' said William Siedenburg , an analyst with Smith Barney , Harris Upham & Co . 
Much of the earnings decline was led by currency-exchange rate adjustments , which affected the bottom line by $ 15.3 million , or 17 cents a share , compared with $ 3.6 million , or four cents a share , the previous year . 
Lower prices for aluminum ingots and certain alloy products and a shift in the product mix also contributed to lower earnings , the company said . 
`` In addition , costs were higher partly due to scheduled plant outages for modernization work , '' the company said . 
Excluding the higher tax rate , which rose two percentage points to 38 % , and the negative exchange rate adjustment , the company would have met analysts ' expectations , said R. Wayne Atwell , an analyst with Goldman , Sachs & Co . 
Noting that the third quarter is usually the aluminum industry 's slowest , Mr. Atwell added , `` the third quarter is never a bang up period for them anyway . 
'' Nevertheless , the company said shipments were up slightly to 679,000 metric tons from 671,000 , buffing the impact of the unexpected earning decline . 
The results were announced after the stock market closed . 
In New York Stock Exchange composite trading Friday , Alcoa closed at $ 72 a share , down $ 4.75 , in a sharply lower market . 
For 20 years , federal rules have barred the three major television networks from sharing in one of the most lucrative and fastest-growing parts of the television business . 
And for six years , NBC , ABC and CBS have negotiated with Hollywood studios in a futile attempt to change that . 
But with foreign companies snapping up U.S. movie studios , the networks are pressing their fight harder than ever . 
They hope the foreign deals will divide the Hollywood opposition and prod Congress to push for ending federal rules that prohibit the networks from grabbing a piece of rerun sales and owning part of the shows they put on the air . 
Even network executives , however , admit privately that victory -- either in Congress or in talks with the studios -- is highly doubtful any time soon . 
And so the networks also are pushing for new ways to sidestep the `` fin-syn '' provisions , known formally as the Financial Interest and Syndication Rules . 
That became clear last week with the disclosure that National Broadcasting Co. , backed by the deep pockets of parent General Electric Co. , had tried to help fund Qintex Australia Ltd. 's now-scuttled $ 1.5 billion bid for MGM\UA Communications Co . 
NBC 's interest may revive the deal , which MGM\UA killed last week when the Australian concern had trouble raising cash . 
Even if that deal is n't revived , NBC hopes to find another . 
`` Our doors are open , '' an NBC spokesman says . 
NBC may yet find a way to take a passive , minority interest in a program-maker without violating the rules . 
And any NBC effort could prompt CBS Inc. and ABC 's parent , Capital Cities\ABC Inc. , to look for ways of skirting the fin-syn regulations . 
But the networks ' push may only aggravate an increasingly bitter rift between them and Hollywood studios . 
Both sides are to sit down next month for yet another meeting on how they might agree on reducing fin-syn restraints . 
Few people privy to the talks expect the studios to budge . 
The networks still are `` uninhibited in their authority '' over what shows get on the air , charges Motion Picture Association President Jack Valenti , the most vociferous opponent of rescinding the rules . 
Studios are `` powerless '' to get shows in prime-time lineups and keep them there long enough to go into lucrative rerun sales , he contends . 
And that 's why the rules , for the most part , must stay in place , he says . 
Studio executives in on the talks - including officials at Paramount Communications Inc. , Fries Entertainment Inc. , Warner Communications Inc. and MCA Inc. -- declined to be interviewed . 
But Mr. Valenti , who represents the studios , asserts : `` The whole production industry , to a man , is on the side of preserving '' the rules . 
Such proclamations leave network officials all the more doubtful that the studios will bend . 
`` They do n't seem to have an incentive to negotiate , '' says one network executive . 
`` And there 's no indication that Washington is prepared to address the rules . 
That 's the problem , is n't it ? '' Indeed it is . 
Congress has said repeatedly it wants no part of the mess , urging the studios and the networks , which license rights to air shows made by the studios , to work out their own compromise . 
But recent developments have made the networks -- and NBC President Robert Wright , in particular -- ever more adamant that the networks must be unshackled to survive . 
The latest provocation : Sony Corp. 's plan to acquire Columbia Pictures Entertainment Inc. for $ 3.4 billion , and to buy independent producer Guber Peters Entertainment Co. for $ 200 million . 
`` I wonder what Walter Cronkite will think of the Sony\Columbia Broadcast System Trinitron Evening News with Dan Rather broadcast exclusively from Tokyo , '' wrote J.B. Holston , an NBC vice president , in a commentary in last week 's issue of Broadcasting magazine . 
In his article , Mr. Holston , who was in Europe last week and unavailable , complained that the `` archaic restraints '' in fin-syn rules have `` contributed directly to the acquisition of the studios by non-U.S. enterprises . 
'' ( He did n't mention that NBC , in the meantime , was hoping to assist Australia 's Qintex in buying An NBC spokesman counters that Mr. Holston 's lament was `` entirely consistent '' with NBC plans because the U.S. rules would limit NBC 's involvement in the Qintex deal so severely as to be `` light years away from the type of unrestrained deals available to Sony -- and everyone else except the three networks . 
'' The Big Three 's drumbeat for deregulation began intensifying in the summer when the former Time Inc. went ahead with plans to acquire Warner . 
Although Time already had a long-term contract to buy movies from Warner , the merger will let Time 's largely unregulated pay-cable channel , Home Box Office , own the Warner movies aired on HBO -- a vertical integration that is effectively blocked by fin-syn regulations . 
NBC 's Mr. Wright led the way in decrying the networks ' inability to match a Time-Warner combination . 
He spoke up again when the Sony bid for Columbia was announced . 
Since NBC 's interest in the Qintex bid for MGM\UA was disclosed , Mr. Wright has n't been available for comment . 
With a Qintex deal , NBC would move into uncharted territory -- possibly raising hackles at the studios and in Washington . 
`` It 's never really been tested , '' says William Lilley III , who as a top CBS executive spent years lobbying to have the rules lifted . 
He now runs Policy Communications in Washington , consulting to media companies . 
Fin-syn rules do n't explicitly block a network from buying a passive , small stake in a company that profits from the rerun syndication networks ca n't enjoy . 
Hence , NBC might be able to take , say , a 5 % stake in a company such as MGM\UA . 
If the transaction raised objections , the studio 's syndication operations could be spun off into a separate firm in which the network does n't have a direct stake . 
But such convolutions would still block the networks from grabbing a big chunk of the riches of syndication . 
Under current rules , even when a network fares well with a 100%-owned series -- ABC , for example , made a killing in broadcasting its popular crime\comedy `` Moonlighting '' -- it is n't allowed to share in the continuing proceeds when the reruns are sold to local stations . 
Instead , ABC will have to sell off the rights for a one-time fee . 
The networks admit that the chances of getting the relief they want are slim -- for several years at the least . 
Six years ago they were tantalizingly close . 
The Reagan-era Federal Communications Commission had ruled in favor of killing most of the rules . 
Various evidence , including a Brookings Institution study of some 800 series that the networks had aired and had partly owned in the 1960s , showed the networks did n't wield undue control over the studios as had been alleged . 
But just eight days before the rules were to die , former President Ronald Reagan , a one-time actor , intervened on behalf of Hollywood . 
The FCC effort collapsed . 
The networks and studios have bickered ever since . 
Network officials involved in the studio talks may hope the foreign influx builds more support in Washington , but that seems unlikely . 
In Congress , the issue falters : It 's about money , not program quality , and Hollywood has lots of clout given its fund raising for senators and representatives overseeing the issue . 
A spokesman for Rep. Edward J. Markey ( D-Mass. ) , who heads a subcommittee that oversees the FCC , says Mr. Markey feels `` the world has been forever changed by the Sony-Columbia deal . 
'' But he said Mr. Markey hopes this pushes the networks and studios to work it out on their own . 
And at the FCC , meanwhile , new Chairman Alfred C. Sikes has said he wants the two sides to hammer out their own plan . 
Recognition Equipment Inc. said it settled a civil action filed against it by the federal government on behalf of the U.S. Postal Service . 
The government sued the company in April , seeking $ 23,000 and other unspecified damages related to an alleged contract-steering scheme . 
The suit named the company , former chief executive officer William G. Moore Jr. , former vice president Robert W. Reedy and five defendants who were n't part of the company . 
The suit charged the defendants with causing Peter E. Voss , an ex-member of the Postal Service board of governors , to accept $ 23,000 in bribes , kickbacks and gratuities . 
Mr. Voss was previously sentenced to four years in prison and fined $ 11,000 for his role in the scheme . 
In the agreement , Recognition agreed to pay the government $ 20,000 in return for the release of all claims against the company , Mr. Moore and Mr. Reedy . 
The five additional defendants were n't parties to the settlement . 
A trial on criminal allegations against the company and the same two former executives began Sept. 27 in federal court for the District of Columbia . 
They were indicted last October on charges of fraud , theft and conspiracy related to an effort to win $ 400 million in Postal Service equipment contracts by the maker of data management equipment . 
The company and its executives deny the charges . 
In a related development , Recognition Equipment said the Postal Service has barred the company from bidding on postal contracts for an additional 120 days . 
The Postal Service originally suspended the company Oct. 7 , 1988 , and has been renewing the ban ever since . 
The company said it will continue to pursue a lifting of the suspension . 
Intel Corp. reported a 50 % drop in third-quarter net income , partly because of a one-time charge for discontinued operations . 
The big semiconductor and computer maker , said it had net of $ 72 million , or 38 cents , down 50 % from $ 142.7 million , or 78 cents a share . 
The lower net included a charge of $ 35 million , equal to 12 cents a share on an after-tax basis , for the cost of abandoning a computer-systems joint venture with Siemens AG of West Germany . 
Earning also fell from the year-ago period because of slowing microchip demand . 
Sales amounted to $ 771.4 million , down 1.7 % from $ 784.9 million . 
Intel 's stock rose in early over-the-counter trading Friday , as investors appeared relieved that the company 's income from continuing operations was only slightly below the second quarter 's earnings of $ 99.3 million , or 53 cents a share , and that sales actually exceeded the $ 747.3 million for the second period . 
But Intel later succumbed to the stock market 's plunge , closing at $ 31.75 , down $ 2.125 . 
In August , Intel warned that third-quarter earnings might be `` flat to down '' from the previous period 's because of slowing sales growth of its 80386 microprocessor , start-up costs associated with a line of computers and costs of preparing for mass shipments of the company 's new 80486 chip in the current quarter . 
On Friday , Andrew S.Grove , Intel president and chief executive officer , said `` Intel 's business is strong . 
Our bookings improved as the quarter progressed and September was especially good . 
For the full quarter , our bookings were higher than the previous quarter , and our book-to-bill ratio exceeded 1.0 . 
'' For the nine-month period , Intel reported net of $ 268.3 million , or $ 1.43 a share , down 27 % from $ 367.1 million , or $ 2.05 a share . 
Revenue amounted to $ 2.23 billion , up slightly from $ 2.15 billion . 
Walter Sisulu and the African National Congress came home yesterday . 
After 26 years in prison , Mr. Sisulu , the 77-year-old former secretary-general of the liberation movement , was dropped off at his house by a prison services ' van just as the sun was coming up . 
At the same time , six ANC colleagues , five of whom were arrested with him in 1963 and sentenced to life imprisonment , were reunited with their families at various places around the country . 
And as the graying men returned to their homes , the ANC , outlawed in South Africa since 1960 and still considered to be the chief public enemy by the white government , defiantly returned to the streets of the country 's black townships . 
A huge ANC flag , with black , green and gold stripes , was hoisted over the rickety gate at Mr. Sisulu 's modest house , while on the street out front , boys displayed the ANC colors on their shirts , caps and scarves . 
At the small four-room home of Elias Motsoaledi , a leading ANC unionist and a former commander in the group 's armed wing , Umkhonto we Sizwe , well-wishers stuck little ANC flags in their hair and a man tooted on an antelope horn wrapped in ANC ribbons . 
`` I am happy to see the spirit of the people , '' said Mr. Sisulu , looking dapper in a new gray suit . 
As the crowd outside his home shouted `` ANC , ANC , '' the old man shot his fists into the air . 
`` I 'm inspired by the mood of the people . 
'' Under the laws of the land , the ANC remains an illegal organization , and its headquarters are still in Lusaka , Zambia . 
But the unconditional release of the seven leaders , who once formed the intellectual and organizational core of the ANC , is a de facto unbanning of the movement and the rebirth of its internal wing . 
`` The government can never put the ANC back into the bottle again , '' said Cassim Saloojee , a veteran anti-apartheid activist on hand to welcome Mr. Sisulu . 
`` Things have gone too far for the government to stop them now . 
There 's no turning back . 
'' There was certainly no stopping the tide of ANC emotion last night , when hundreds of people jammed into the Holy Cross Anglican Church in Soweto for what became the first ANC rally in the country in 30 years . 
Deafening chants of `` ANC '' and `` Umkhonto we Sizwe '' shook the church as the seven aging men vowed that the ANC would continue its fight against the government and the policies of racial segregation on all fronts , including the armed struggle . 
And they called on the government to release Nelson Mandela , the ANC 's leading figure , who was jailed with them and remains in prison . 
Without him , said Mr. Sisulu , the freeing of the others `` is only a half-measure . 
'' President F.W. de Klerk released the ANC men -- along with one of the founding members of the Pan Africanist Congress , a rival liberation group -- as part of his efforts to create a climate of trust and peace in which his government can begin negotiations with black leaders over a new constitution aimed at giving blacks a voice in national government . 
But Pretoria may instead be creating a climate for more turmoil and uncertainty in this racially divided country . 
As other repressive governments , particularly Poland and the Soviet Union , have recently discovered , initial steps to open up society can create a momentum for radical change that becomes difficult , if not impossible , to control . 
As the days go by , the South African government will be ever more hard pressed to justify the continued imprisonment of Mr. Mandela as well as the continued banning of the ANC and enforcement of the state of emergency . 
If it does n't yield on these matters , and eventually begin talking directly to the ANC , the expectations and promise raised by yesterday 's releases will turn to disillusionment and unrest . 
If it does , the large number of right-wing whites , who oppose any concessions to the black majority , will step up their agitation and threats to take matters into their own hands . 
The newly released ANC leaders also will be under enormous pressure . 
The government is watching closely to see if their presence in the townships leads to increased anti-government protests and violence ; if it does , Pretoria will use this as a reason to keep Mr. Mandela behind bars . 
Pretoria has n't forgotten why they were all sentenced to life imprisonment in the first place : for sabotage and conspiracy to overthrow the government . 
In addition , the government is figuring that the releases could create a split between the internal and external wings of the ANC and between the newly freed leaders and those activists who have emerged as leaders inside the country during their imprisonment . 
In order to head off any divisions , Mr. Mandela , in a meeting with his colleagues before they were released , instructed them to report to the ANC headquarters in Lusaka as soon as possible . 
The men also will be faced with bridging the generation gap between themselves and the country 's many militant black youths , the so-called young lions who are anxious to see the old lions in action . 
Says Peter Mokaba , president of the South African Youth Congress : `` We will be expecting them to act like leaders of the ANC . 
'' They never considered themselves to be anything else . 
At last night 's rally , they called on their followers to be firm , yet disciplined , in their opposition to apartheid . 
`` We emphasize discipline because we know that the government is very , very sensitive , '' said Andrew Mlangeni , another early Umkhonto leader who is now 63 . 
`` We want to see Nelson Mandela and all our comrades out of prison , and if we are n't disciplined we may not see them here with us . 
'' There 's an intense debate in South Korean President Roh Tae Woo 's inner circle over his scheduled speech Wednesday to a joint meeting of Congress : Should he give it in English or Korean ? It would be more effective with the U.S. politicians and public in English , the president 's foreign policy advisers argue . 
But , counter some domestic political aides , it would hurt Mr. Roh at home if he seems to be pandering to the Americans . 
U.S. politicians and policy-makers would do well to remember such backhome pressures on the South Korean president as they prepare for an important series of meetings with him this week . 
For U.S.-South Korean relations , in economic and security terms , are at their most critical stage since the Korean War . 
When most Americans think about South Korea , they still conjure up images of the war years , popularized by the TV series M\*A\*S\*H . 
But South Korea no longer is a backwater , Third World country . 
With a dynamic , growing economy , it is the U.S. 's seventh-largest trading partner . 
Moreover , the Korean peninsula remains one of the strategic focal points of East Asia ; there are 43,000 U.S. troops stationed there . 
And the country is at a political crossroads now , as it struggles with its new experiment in democracy . 
South Korea is `` critically important to us now , both economically and in terms of security , '' says Sen. Richard Lugar ( R. , Ind. ) , the former chairman of the Senate Foreign Relations Committee . 
`` Unfortunately , many Americans do n't think much about Korea . 
But the miracle of their economic growth and the development of democracy -- imperfect though it is -- are very important to the United States . 
'' One major topic during Mr. Roh 's visit will be human rights . 
Due process still is denied in South Korea ; a few months ago , Kim Dae Jung , the major opposition leader , was detained and interrogated for 20 hours by security thugs . 
Just as Pope John Paul II did in Seoul last week , President Bush and members of Congress ought to tell Mr. Roh in no uncertain terms that this kind of behavior is unacceptable . 
But context is important . 
South Korea had a free election last year ; the liberals lost only because they could n't unite behind one candidate . 
Moreover , there is a violent anti-U.S. minority in South Korea -- as demonstrated by the handful of radical students who broke into U.S. Ambassador Donald Gregg 's residence in Seoul Friday and vandalized it ( the ambassador and his wife were unharmed ) . 
Mr. Roh , a former general and a member of the repressive previous regime , has made impressive strides in supporting democratic values and institutions . 
It is n't a perfect democracy , but it 's a far cry from the authoritarian rule of only a few years ago . 
One thing that has n't changed in South Korea is paranoia about North Korea ; several people are being prosecuted for making unapproved visits to the communist north . 
But a visit to Panmunjom , where the constant tension between the communists and the joint U.S.-South Korean forces is palpable , makes it easier to understand these feelings . 
Sometimes U.S. politicians forget that North Korea , a country with a population of only 20 million , has an armed force of over one million troops , the sixth largest in the world . 
Whatever winds of change are blowing through much of the communist bloc , they have n't reached Pyongyang . 
As long as it continues to pose a real threat , U.S. critics ought to go slow on demands to reduce troop levels in South Korea . 
The major topic when Mr. Roh calls on administration and congressional figures this week will be economics and trade . 
South Korea hardly is without fault for trade frictions with the U.S. ; most experts in the administration think that Commerce Secretary Robert Mosbacher got it exactly wrong a few months ago when he declared that South Korea is more open economically than Japan . 
On agricultural products in particular -- everything from beef to apples -- the Koreans have succumbed to domestic political pressures for protectionism . 
Yet , earlier this year , South Korea promised to make some real concessions on its investment laws and other trade impediments . 
They enabled the country to avoid being targeted as an unfair trade partner under the tough `` Super 301 '' section of the 1988 U.S. trade act . 
Separately , as a result of the revaluation of the won and other measures , the almost $ 10 billion trade surplus the South Koreans enjoyed with the U.S last year will be cut in half this year . 
Moreover , just a few days ago , the national assembly , with the governing and opposition parties in an unusual alliance , passed a resolution calling for a gradual opening up of South Korean agricultural markets . 
It 's appropriate for U.S. officials to keep hammering for more open trade policies , as U.S. Trade Representative Carla Hills did in Seoul last week . 
But there 's also sometimes a tendency in American political circles to pick especially on South Korea , out of frustration over our inability to do much about Japan . 
That 's counterproductive . 
Most importantly , it 's time for American policy-makers to better appreciate that our economic future rests more with Asia -- Seoul as well as Tokyo -- than anyplace else . 
The U.S. always ought to stand up for its interests , but it 's essential that U.S. officials have an appreciation of the politics and history of our allies . 
In the upper echelons of the Roh Tae Woo 's government , they 're still buzzing about Commerce Secretary Mosbacher 's trip to South Korea earlier this year . 
It seems he learned , for the first time , that South Korea had been occupied for decades by Japan . 
Bolstered by a robust long-distance business , the telephone industry is expected to post a healthy profit increase for the third quarter . 
Analysts estimate that third-quarter earnings for the industry will increase as much as 19 % from the year-earlier period . 
If so , their cumulative earnings could hit $ 4.12 billion . 
Most of the earnings growth , however , will come from the long-distance sector . 
American Telephone & Telegraph Co. is expected to post a profit increase of about 18 % and MCI Communications Corp. 's earnings are expected to surge 58 % . 
United Telecommunications Inc. reported last Wednesday that third-quarter net income climbed 75 % to $ 94.6 million , or 90 cents a share , on revenue of $ 1.93 billion . 
United Telecom 's Sprint unit posted operating profit of $ 60 million . 
Paul Aran , a telecommunications analyst with Bear , Stearns & Co. , said the long-distance companies have been buoyed by strong growth in the facsimile and data-service business . 
He said declining long-distance prices also have helped stimulate usage . 
The local telephone companies , however , are n't expected to fare as well . 
Growth is predicted to be in the 1 % to 2 % range for most companies , with Southern New England Telephone and GTE Corp. posting profit increases in the neighborhood of 10 % . 
`` The long-distance companies have kept their momentum , '' says Robert Morris III , a telecommunications analyst with Goldman , Sachs & Co. , `` while the pace of growth for the local telephone companies is slowing . 
'' That 's especially true for the regional Bell companies . 
He said regulation is primarily responsible for the Bells ' dull earnings growth . 
Most companies have reached their maximum allowed earnings ceilings , which are set by regulators . 
`` This signals the need for regulatory change , '' Mr. Morris said . 
Pacific Telesis Group , which is expected to post earnings of about 75 cents a share , obtained regulatory relief from California regulators last week . 
Under the plan , the company is allowed to earn more if it can operate more efficiently . 
In the year-earlier quarter , Pacific Telesis earned $ 318 million , or 75 cents a share , on revenue of $ 2.38 billion . 
Analysts expect installations of new telephone lines to grow about 3 % . 
However , GTE , BellSouth Corp. and Pacific Telesis , which operate in territories with hearty economies , are expected to report new-telephone-line growth in the range of 4 % to 5 % . 
Nynex Corp. 's profits could begin to show signs of weakening from the effects of a nearly three-month strike , while other Bell companies , such as Ameritech and Southwestern Bell Corp. , could be hurt in the quarter by one-time charges associated with the settlement of new union contracts . 
Mr. Aran , the Bear Stearns analyst , said that generally , after eight weeks , `` A strike starts hurting earnings . 
I 'm waiting to see what the impact is on Nynex . 
'' Analysts predict Nynex earnings will be about $ 1.57 a share , compared with $ 1.72 a share a year earlier , when the company earned $ 338.9 million on sales of $ 3.18 billion . 
The independent telephone companies also may post third-quarter results that trail the comparable year-ago period . 
Rochester Telephone Co. , for instance , said it expects third-quarter earnings to be `` somewhat lower '' than the year-earlier quarter -- even though the company expects to post an extraordinary gain of 50 cents during the period . 
The company said higher expenses and competitive pressures hampered earnings . 
For the 1988 third quarter , Rochester Telephone reported a net income of $ 12.9 million , or $ 1.10 a share , on revenue of $ 120.2 million . 
The tug of war between Warner Communications Inc. and Sony Corp. over movie producers Peter Guber and Jon Peters has exploded into a legal battle that could prove an embarrassing setback to Sony 's plans to enter the U.S. movie business . 
On Friday , after two weeks of fruitless settlement talks , Warner filed suit in Los Angeles Superior Court against Sony and Guber Peters Entertainment Co. , charging Sony with inducing the two producers to breach a five-year contract with Warner . 
The suit seeks $ 1 billion in damages and an injunction barring Messrs. Guber and Peters from taking the top management posts at Columbia Pictures Entertainment Inc . 
As previously reported , Sony has agreed to pay $ 3.4 billion to acquire Columbia and separately has agreed to pay $ 200 million for Guber Peters Entertainment to obtain the services of its two co-chief executives . 
Sony and Guber Peters promptly countersued , charging Warner with attempting to interfere in Sony 's acquisition of the two companies and with falsely asserting that the Guber Peters agreement with Warner prevents them from accepting the senior management posts at Columbia . 
At issue in the lawsuits is the contract signed last March by Messrs. Guber and Peters that requires the two to make movies exclusively for Warner for the next five years . 
Sony and Messrs. Guber and Peters maintain that the contract does n't prohibit taking an executive post at another studio . 
Moreover , they assert , the producers have an oral agreeement with Warner Bros. studio executives that gives them the right to `` terminate the producer relationship in the event they were given and chose to accept the opportunity to become senior executives of a motion picture studio , '' according to their countersuit . 
Warner , for its part , maintains that the written agreement prevents Messrs. Guber and Peters from doing anything else in the motion picture business . 
Warner says in its suit that Sony `` has unethically and illegally sought to steal the services of Guber and Peters and injure Warner as a major competitor of Columbia . 
'' Moreover , Warner says , Sony enticed the producers with `` unprecedented financial rewards to breach their binding contractual commitments to Warner . 
'' Warner also names in its suit the two producers , Sony Corp. of America Vice Chairman Michael Schulof , and Walter Yetnikoff , head of Sony 's CBS Records unit . 
Sony responded in its countersuit by charging Warner , its chief executive Steven J. Ross , and Warner Bros. unit chairman Robert Daly and President Terry Semel with embarking on an unlawful scheme to interfere with and disrupt Sony 's acquisitions . 
Warner , which is in the process of being acquired by Time Warner Inc. , is attempting to `` sabotage '' Sony 's efforts as part of a `` plan and scheme to dominate and control the entertainment business , '' the countersuit from Sony and Guber Peters adds . 
Warner also appears to be trying to embarrass Sony by accusing the Japanese company 's U.S executives , Messrs. Schulof and Yetnikoff , of dishonorable dealings . 
In its suit , Warner says that Mr. Ross warned Sony 's Mr. Schulof on Sept. 26 at a dinner in Washington , `` with Guber Peters in mind '' that in the U.S. `` it is essential that corporations honor written contracts and do not induce breach of contracts by others . 
'' Sony went ahead the next day anyway and executed its own five-year agreement with the producers and agreed to buy their company , the suit adds . 
Moreover , the suit adds that Sony initially said it would n't buy Guber Peters unless the Warner contract was settled . 
On Tuesday , although a settlement was n't reached , Sony publicly announced it would acquire Guber Peters . 
`` Sony has thus knowingly and willfully , and over Warner 's protests , induced Guber and Peters to repudiate their contract with Warner , '' the suit says . 
Warner 's decision to file suit in the wake of its failure to reach a settlement with Sony did n't surprise executives at rival studios , who say Warner is only protecting its own interests . 
The outcome of the legal battle , they add , could redefine contractual relationships in Hollywood , where the unwritten rule has often been that contracts were made to be broken . 
In Warner 's case , the studio obviously regards the relationship with Guber Peters as a crucial factor in Warner 's recent success and a central part of its future plans . 
Warner has relied heavily on the two to find and produce movies for the studio , including this summer 's hit `` Batman . 
'' Warner says in its suit that `` Guber and Peters claim to have generated over one-half billion dollars in profits for Warner from combined projects , '' a claim Warner does n't dispute . 
And Warner says it is currently financing about 50 new projects being developed by the two producers . 
Under an earlier agreement with Warner , the producers were allowed to make movies elsewhere . 
For example , they made the hit `` Rainman '' for MGM\UA Communications Co . 
But when Warner signed a new agreement with the two in March , the terms specifically prohibited them from serving as producers or executive producers of movies for any other studio . 
Sony and the Guber Peters executives say in their countersuit , however , that the new contract eliminated language barring the two from serving `` in any other capacity '' in the motion picture business . 
And they appear to be relying heavily on an alleged `` oral agreement '' the two producers claim to have with Warner that would let them out of their written contract in the event that an actual executive post at another company became available . 
In their countersuit , they say that on two previous occasions -- once in 1987 when they considered a post at Columbia , and once when Messrs. Guber and Peters tried to buy a stake in MGM\UA in 1988 -- Warner was prepared to release them from their contract . 
The countersuit also charges Warner with making the oral agreement to `` falsely induce '' them into a new written contract in 1989 . 
Moreover , they say , Warner is trying to cheat them out of `` a unique business opportunity '' and the fulfilment of their `` long-term dream '' to run their own studio . 
But entertainment industry executives say that the new contract was signed after Guber Peters efforts to take over MGM failed and that Warner may argue in court that the producers ' willingness to sign a new long-term contract signaled the end of their search for a movie studio . 
Mr. Ross and his team at Warner appear to view the move by the two producers to Sony as a personal betrayal after years of support and friendship . 
`` Warner has been nurturing its relationship with Guber and Peters since 1972 , long before their recent success , '' the Warner suit says . 
That success , the suit adds , `` is due in large measure to the trust and confidence that Warner has reposed in these producers , even in the early years of the relationship when the creative partnership was not particularly profitable for Warner . 
'' Warner , whose executives are the highest paid in the entertainment industry , also charges that Sony induced the two producers to breach their Warner contract by offering them `` the most lucrative and expensive package of financial inducements in the film industry , '' including $ 2.7 million each in annual salary , deferred compensation of $ 50 million , as much as 10 % of Columbia 's cash flow , and as much as 8 % of the future appreciation of Columbia 's market value . 
The producers also stand to get more than $ 50 million from their combined 28 % stake in Guber Peters Entertainment from Sony 's $ 200 million offer for the company . 
In their countersuit , Messrs. Guber and Peters say they seek $ 100 million in damages initially from Warner but may seek a higher amount later after determining the extent of damages . 
Companies listed below reported quarterly profit substantially different from the average of analysts ' estimates . 
The companies are followed by at least three analysts , and had a minimum five-cent change in actual earnings per share . 
Estimated and actual results involving losses are omitted . 
The percent difference compares actual profit with the 30-day estimate where at least three analysts have issues forecasts in the past 30 days . 
Otherwise , actual profit is compared with the 300-day estimate . 
Source : Zacks Investment Research McDonnell Douglas Corp. received a $ 54.3 million Navy contract for F\A18 aircraft for Kuwait . 
Propper International Inc. won a $ 20.2 million Defense Logistics Agency contract for camouflage trousers . 
Altama Delta Corp. was given an $ 18.5 million Defense Logistics Agency contract for combat boots . 
Microamerica Inc. said its board authorized the purchase of as many as two million , or 15 % , of its common shares outstanding . 
The purchases would be made periodically on the open market or in privately negotiated transactions , the company said . 
Microamerica , a distributor of personal-computer products , has about 13.5 million shares outstanding . 
Advertising agencies ' third-quarter earnings are expected to be up modestly from a year ago , securities analysts say . 
Andrew Wallach , an analyst at Drexel Burnham Lambert , is estimating Interpublic Group , for example , at 21 cents a share , up from 18 cents a share a year ago . 
Greg Ostroff , an analyst at Goldman Sachs , is pegging Omnicom Group at 17 cents a share , up from 15 cents a share , and Foote , Cone & Belding Communications Inc. at 55 cents a share , up from 46 cents . 
Analysts note , however , that the third period is a minor quarter in terms of absolute profits . 
Those who watch Madison Avenue say this period , along with the first quarter , is traditionally weak . 
The fourth quarter is where the real impact is made . 
`` We tend not to read much into third-quarter earnings , '' Mr. Ostroff says . 
Also notable is the fact that Saatchi & Saatchi Co. and WPP Group PLC , two British giants that are principal players in the advertising business , do n't report quarterly earnings . 
In the industry overall , `` profits will increase unless revenues are disastrously lower , '' said Alan Gottesman , an analyst at PaineWebber Inc. , New York . 
`` There are no external indications '' to indicate that will be the case , he said . 
Mr. Gottesman noted that the employee count for the industry is down and that most agencies are watching staffing levels in a bid to closely monitor costs . 
Others are cautiously watching the value of the dollar overseas . 
`` From where I sit , the biggest issue for the U.S. agencies is the dollar , '' said Emma Hill , an analyst at Wertheim Schroder & Co. , New York . 
`` For the U.S. companies , the risk is one of disappointment versus better-than-expected because of the dollar . 
'' Ad agencies rely heavily on business overseas for their bottom line . 
The strength of the dollar will hurt the reporting of foreign earnings , many analysts said . 
Some agencies , including Interpublic Group 's Lintas and Saatchi & Saatchi 's Backer Spielvogel Bates , have said that their clients are spending less than they had expected . 
Few agencies are reporting that their clients ' ad budgets are expanding . 
All eyes , however , are on the fourth quarter and to reporting by the giant British companies . 
`` Saatchi & Saatchi is having a very tough year , '' Drexel Burnham 's Mr. Wallach said . 
`` It 's real guesswork figuring out what they 'll earn . 
'' That agency , rumored as a takeover candidate , earlier this year said pretax profit for 1989 would trail 1988 's already disappointing level . 
For WPP Group , on the other hand , most analysts are looking for margin improvement and good results considering its acquisition earlier this year of Ogilvy Group . 
The involvement of units of two major U.S. banks in separate loans to China has signaled a growing willingness among foreign bankers to resume lending to the Beijing government . 
One of the units , BT Asia Ltd. , a subsidiary of Bankers Trust New York Corp. , this week arranged the syndication of a $ 50 million , five-year loan to Shortridge Ltd. , which is owned by China International Trust & Investment Corp . 
( Holdings ) , or Citic . 
The loan will be used for Shortridge 's share of the purchase of a satellite , a BT Asia director said . 
The other unit , Chase Manhattan Asia Ltd. , a Hong Kong subsidiary of Chase Manhattan Corp. , of New York , said it is underwriting a $ 50 million loan for China 's biggest trading company , China Resources ( Holdings ) Co. , for general corporate purposes . 
Of the total , $ 30 million can be swapped into marks . 
Amid the international outcry following the shooting of students and bystanders in Beijing on June 4 , foreign-bank lending to China came to a halt . 
Bankers in Hong Kong said this week 's Citic loan was an important sign that foreign banks are interested in resuming regular business with China . 
`` It 's sort of a benchmark , '' said a U.S. banker who did n't participate in the loan . 
Russell L. Magarity , senior managing director of Chase Manhattan Asia , said `` it is time '' to start considering loans to China again . 
Mr. Magarity said Chase hopes to assemble an international group of banks in the lending syndicate , including some of U.S. and Japanese banks with which China Resources has had a strong relationship in recent years . 
`` Right now we think we can successfully syndicate this loan because of China Resources ' name , '' he said . 
Indeed , the reputations of China Resources and Citic played a significant role in the decisions . 
China Resources and Citic are considered exceptionally good credit risks , bankers said . 
Other loans to China will have to be considered on a case-by-case basis . 
Beyond the political considerations , banks are concerned about the state of China 's economy and about borrowers ' ability to make loan payments . 
Now that the first major syndication of a Chinese loan has proceeded smoothly , a Japanese banker said it will be easier for foreign banks to consider making loans to China . 
Citic , which acts as a sort of merchant bank for overseas acquisitions by China , is a relatively independent company . 
Through Shortridge , it is one of three partners in Asia Satellite Telecommunications Co. , which plans to launch a private satellite on a Chinese rocket next year . 
The other partners are Cable & Wireless PLC of Britain and Hutchison Whampoa Ltd. of Hong Kong . 
Citic guaranteed the loan . 
The loan was syndicated to a group of foreign banks from Europe , Hong Kong and Canada , foreign bankers said ; they did n't identify the institutions . 
BT Asia arranged the syndication but did n't underwrite the loan . 
A BT Asia official would n't disclose all the terms of the loan but said it was linked to a currency option that allows banks to receive repayment in yen instead of dollars . 
The official said Citic will pay an interest rate that will be about 0.5 percentage point higher than the amount Citic would have paid for a similar borrowing before June 4 . 
He said it was difficult to calculate the exact interest rate because of the currency option . 
Bankers said they believe China Resources ' loan costs have risen by about the same amount . 
Demand for products in the current quarter should weaken and inflation should n't put any upward pressure on prices , say U.S. plant managers in a Dun & Bradstreet Corp. survey . 
Fewer plant managers expect higher new orders and output this quarter than in the year-earlier period , according to the survey , which polls 1,500 managers of manufacturing facilities on conditions in their factories and industries . 
Plant managers ' optimism `` has moderated , which is in line with current economic data that indicate slow but continuing economic growth , '' said Joseph W. Duncan , corporate economist and chief statistician for Dun & Bradstreet , a financial-data company . 
The managers expect materials costs to drop in the quarter , leading fewer to forecast higher selling prices , Mr. Duncan said . 
Dun & Bradstreet calculates several optimism indexes , subtracting the percentage of managers expecting a decline from the percentage expecting growth . 
For overall demand , the fourth-quarter index fell to 28 from 31 last quarter and 32 in the 1988 fourth period . 
For output , the index was 29 , the same as last quarter , but a three-point drop from a year ago . 
For new orders , the figure again was flat with the third quarter at 29 . 
The latest figure also is down a point from the year earlier . 
The U.S. dollar strengthened during the summer and may have damped the managers ' hopes for higher demand from overseas . 
Recent `` declines in the dollar should bolster manufacturers ' selling opportunities abroad , '' Mr. Duncan said . 
For the next 12 months , each of the indexes for overall demand , production and new orders fell one point from last quarter , to 57 , 57 and 59 , respectively . 
The year-earlier figures were 60 , 60 and 61 . 
Dun & Bradstreet 's data measuring fourth-quarter costs of making a single unit of a product indicated that `` manufacturers foresee weaker prices '' for materials `` while wage pressures , though still present , are not expected to escalate , '' Mr. Duncan said . 
Bad real estate loans continued to gnaw at third-quarter profits of Southwestern banks , with the notable exception of institutions that cleansed their books with federal bailouts . 
`` You 've got a two-tiered market , '' said Frank W. Anderson , an analyst with Stephens Inc. , Little Rock , Ark . 
On top , he said , are such dynamos as NCNB Corp. and First City Bancorp of Texas , which acquired big , ailing Texas banks in government-assisted transactions that allowed them to slough off bad loans . 
They are expected to ring up big profits for the third quarter , Mr. Anderson said . 
As for the rest , warns James McDermott , an analyst with Keefe Bruyette & Woods , New York , `` asset quality concerns are going to dominate third-quarter reports . 
'' For example , Cullen\Frost Bankers Inc. , San Antonio , Texas , is expecting `` an uptick in { non-performing loans } related to real estate '' in the third quarter , said Thomas Frost , chairman and chief executive . 
As the only major bank holding company in Texas to survive without a bailout or merger , Cullen\Frost managed only `` very modest '' earnings in the period , he said . 
`` If the government handed me a big bucket of money I 'd look good , too , '' Mr. Frost added . 
NCNB Corp. 's Texas operation , on the other hand , is expected to report an operating profit `` in line with { or } perhaps a bit better '' than its results in the first two quarters , Timothy Hartman , vice chairman of the Texas unit , said . 
The Texas unit had an operating profit of $ 58.7 million in the first quarter and $ 55.7 million in the second quarter . 
NCNB , based in Charlotte , N.C. , bought the banking assets of failed First Republic Bank Corp. of Dallas last year in a transaction expected to cost the Federal Deposit Insurance Corp. about $ 3 billion . 
( First Republic is n't related to First Republic Bancorp of San Francisco . 
) Robert Rieke , an analyst with Raucher Pierce Refsnes Inc. , Dallas , estimates Houston-based First City 's third-quarter net was higher than second quarter earnings of $ 28.1 million . 
However , he estimated that per-share earnings stayed `` relatively flat '' at about the second quarter 's $ 1.19 a share because the total number of shares outstanding increased . 
First City was recapitalized last year by a group led by Chicago banker A. Robert Abboud . 
The FDIC contributed nearly $ 1 billion to the new organization . 
More recent Texas bailouts wo n't have much impact on the third quarter results of the new parent companies , analysts sai