The Courier-Journal from Louisville, Kentucky • Page 10

12 The Courier-Journal, Friday morning, July 15, 1983 Stocks up 6.51 Story, this page State to ask deferral of jobless-funds bill Baldwin-United moves to aid firms and 25 others forcing them to borrow from a federal fund in order to meet payments to their unemployed workers. The federal fund comes from a tax on employers, too. Loans used to be interest free. But Congress recognized a year ago that some states would have to revamp their own systems by raising their employer taxes, cutting their benefits, or both to get out of debt to the federal fund. So it slapped a 10 per cent charge on the loans, making them expensive enough to encourage action.

Kentucky was among the first to revamp its program. Its legislature "bit the bullet" during the 1982 session, and raised taxes while reducing and tightening benefits. It wasn't enough to bail the fund out immediately, though, because of the lengthening recession, and the state continued to borrow from the By JOE WARD Courier-Journal Business Writer Kentucky unemployment insurance officials expect to make a formal request today for deferment of $8.2 million in interest charges the state will otherwise owe the federal Unemployment Insurance Fund by October. The request has been in preparation since late spring. It will go to the Department of Labor under terms of a special amendment to the Social Security law, which is designed to give hard-pressed states some breathing room on unemployment problems.

States pay unemployment insurance claims out of funds they gather from employers. Ordinarily, they collect enough in taxes in good years to pay out during employment slumps. But prolonged unemployment over the last few years has depleted funds in some states Kentucky Associated Press CINCINNATI Baldwin-United Corp. said Wednesday it is turning control of six of its insurance subsidiaries in Indiana and Arkansas over to state regulatory authorities. "Rehabilitation will enable these companies to meet their obligations in a manner which is fair to all policyholders," said Baldwin-United President Victor Palmieri.

During the rehabilitation of the companies, their operations and financial controls will be handled by state insurance commissioners who will try to restore the insurance firms to financial health. The process is similar to corporate bankruptcy reorganization. The companies have large portfolios of single-premium deferred annuities that defer taxes until the policy is redeemed. The policies are locked into higher interest rates than the market pays today, so Baldwin-United is increasingly losing money on them, Palmieri said. As of June 30, Baldwin-United said, the insurance companies placed into rehabilitation had assets of $4.6 billion versus liabilities of $4.4 billion.

However, $900 million of. those" Applications for jobless benefits drop in June to summer '81 level By PAULINE JELINEK Associated Press WASHINGTON Approximately 392,000 jobless Americans applied for unemployment benefits in late June, bringing the total of first-time claims down to pre-recesssion levels, government figures indicated yesterday. Kentucky, Indiana investors protected EARNINGS REPORTS Thomas Industries Inc. The diversified Louisville-based lighting company reported a 72 percent gain in net income in the quarter and a 33 percent gain in the six months ended June 30. Sales were up 15 percent in the quarter and 6 percent in the half-year.

Thomas R. Fuller, president and chief executive, said "the ongoing improvement in residential construction continues to benefit those Thornas operations most closely associated with the housing industries." Fuller added that while the company is "concerned that the creeping interest rates will hurt the overall economy and the construction of new homes," the firm expects "a good year in sales and profits," especially if interest rates remain stable. Quarter ended Juno 30 113 mi Revenue Not incomt 2,321,000 1,348,000 Per shoro .33 Six months ondod 30 1W3 1982 5108,211000 4,351,000 3.259,000 .42 .47 Rovonuo Not incomo Por Mid-America Bancorp The holding company for the Bank of Louisville reported a drop in profits in the quarter and six months ended June 30. President Bert Klein attributed the drop to higher interest rates the bank is paying on checking accounts and lower rates it is earning on assets. Quarter ondod Juno 30 1981 1982 Not Incomo 81,596,033 81033,584 Por 1.06 1.34 mits deferments over four years of 80 per cent of the interest owed by states that can demonstrate they have taken strong measures to solve their problems.

Jim Van Erden, of the division of actuarial services in the U.S. Department of Labor, said the government will accept as "strong" any measures that will result in at least a 25 per cent improvement in the condition of unemployment insurance funds. That means there has to be an increase in taxes or a decrease in benefits, or a combination of the two, that makes the fund 25 per cent better off than it would have been without the action. Holland said he is confident Kentucky's changes will meet that requirement. Van Erden said his department will notify the states that have earned deferments by some time in September.

Auto issues lead upswing on market Associated Press NEW YORK Stocks moved ahead in active trading yesterday despite pulling back from their highs of the session. Auto issues again rose sharply, and retail, oil, chemical and financial stocks were numerous among the gainers. But airline and mining stocks fell. The Dow Jones average of 30 industrials, off 0.70 point Tuesday, recovered 6.51 points to 1,204.33. The measure was up nearly 11 points earlier in the day.

Advances led declines 3 to 2 on the New York Stock Exchange, whose composite index rose 0.33 to 96.23. Prices rose at the opening bell, and were aided in early trading by improved earnings reports from such leading issues as International Business Machines and American Express. But the gains stalled in afternoon trading. Stocks fell steeply earlier this week amid fears the Federal Reserve was poised to restrict credit, sending interest rates higher, in an effort to slow money-supply growth. Fed Chairman Paul Volcker, appearing before the Senate Banking Committee yesterday, declined comment on whether the central bank planned to raise its key lending rate.

He did say the Fed's monetary policy had been "slightly less accomo-dative in recent weeks," but that no "drastic or strong action" is being taken to curb credit availability. IBM shot up 2 points after posting a 25 percent gain in second-quarter profit slightly above Wall Street's expectations but it settled with a gain of at 122. American Express rose Vt to 67i4. Ford Motor climbed 2 to 58 14 after declaring a third-quarter dividend of 30 cents, its first payout since the fourth quarter of 1981. General Motors rose 1 to 72 and Chrysler gained to 32.

Standard Poor's index of 400 industrials rose 0.62 to 187.10, and 500-stock composite index was up 0.55 to 166.01. At the American Stock Exchange, the market value index rose 1.81 to 242.88. stock split for shareholders of record as of July 21. The company also announced that E. E.

Wardlow, retired president and chief operating officer of Mart has been elected to the board of directors. Wardlow has been serving as a management consultant for Dollar General for the past two years. Dollar General has nearly 900 stores in 22 states. The firm has warehouse locations in Scottsville and in Dumas, Arkansas. Merger is completed Kirby Exploration Co.

said its board and General Energy We would like to increase our monthly income. What do you suggest? (Name and addresss withheld.) a You could purchase Govern-A ment National Mortgage Association (Ginnie Mae) certificates, which would boost your monthly income. However, you don't need to be paying more taxes at this time, so you probably would be wise to increase your tax-free municipal-bond portfolio. You also might consider investing in a blue-chip, high-yielding utility, such as Louisville Gas Electric, Kentucky Utilities or Texas Utilities. If you buy, join the dividend-reinvestment program to benefit from tax-deferral (up to $1,500 a year if filing jointly) and the likelihood of lower commission charges! federal government through April of this year.

The Kentucky fund is back in the black now, by $27.3 million at the end of June. State officials do expect to borrow again in December, but the indication is the fund will return to long-term solvency if economic recovery continues as it is expected to do. But the $8.2 million interest payment that will be due next fall could throw it for a loop again. Unlike every other state affected, Kentucky has no scheduled legislative session that could appropriate the money in time, and it is not clear where it would come from if the state has to pay it. Mae Girkey, director of the state division of unemployment insurance, and her assistant, Don Holland, express confidence that Kentucky will receive a deferment, though.

The federal relief legislation per- June put claims at their lowest level since 386,500 were filed in the week ending July 25, 1981, according to the report from the Employment and Training Administration. Private and government economists generally believe the recession began late that summer and reached its peak in December 1982. Despite the drop in new applications for benefits, yesterday's report said the total number of Americans out of work and drawing payments during the week ended June 25 rose 53,000 to a seasonally adjusted 3,391,000 from 3,338,000 the previous week. But there was a drop that week of 37,900 in the number of workers claiming 13 weeks of extended benefits in addition to the basic 26-week compensation period. The report said there were 310,500 such claimants compared with 348,400 the previous week.

And there was a decline in the number of those getting still further benefit payments under provisions of the Federal Supplemental Compensation Program, which pays six to 10 weeks of jobless benefits beyond those available under other state and federal programs. The total of recipients under that program fell from 1,700,300 to 995,000 during the week ending June 25. Kentucky, Indiana figures go up a bit New requests for jobless aid edged up in both Kentucky and Indiana last week. There were 6,701 initial claims filed in Kentucky, up from 6,053 the previous week, but down from 9,554 in the comparable week a year ago. The Kentucky Department for Unemployment Compensation in Frankfort is processing 45,858 continuing claims, down from 52,692 at this time last year.

In Indiana, 10,901 new claims were filed, up from 7,807 the previous week, but down from 15,647 in the comparable week last year. The Indiana Employment Security Office in Indianapolis is processing 57,271 continuing claims, down from 78,696 in the comparable week a year ago. TICKER TAPE From Staff, Dow Jones and AP Dispatches Ford declares dividend Ford Motor Co. declared a third quarter dividend of 30 cents yesterday, marking the first time the automaker has declared a dividend since the fourth quarter of 1981. Ford Chairman Philip Caldwell said the resumed dividend has been made possible by substantial reductions in operating costs and by the success of the company's new products.

Dollar General splits Dollar General Corp. of Scottsville yesterday announced a two-for-one associate in Morton H. Sachs Co. Be sure to continue your IRAs, and you might want this money also to go into a no-load mutual fund. Gaining monthly income OI am retired, with a monthly income of $1,075, of which $300 will be taxable after this year.

My wife, 60, has $20,000 a year in income. Our home Is paid for and we have no debts. My wife has $13,000 in an IRA. We have municipal bonds that give us $4,500 a year in interest. We have $22,000 in a CD due next March and $20,000 in CDs due in January 1985.

We have two investment accounts at a bank and savings and loan totaling $20,000. My wife saves $100 a week from her salary. assets were of Baldwin-United securities of questionable value. Palmieri said rehabilitation will prevent policyholders from creating a panic wave of redemptions. "Under rehabilitation it will be possible to regulate or suspend redemptions to protect the companies," he said.

Companies being placed under state authority in Indiana are University Life Insurance Life Insurance Co. and National Equity Life Insurance Co. The Arkansas firms are National Investors Life, National Investors Pension and Mt Hood Pension Insurance Co. Palmieri said the agreement could lead some of Baldwin-Unit-ed's creditors to push the firm into bankruptcy proceedings. The rehabilitation protects the insurance companies from creditors to which Baldwin-United owes more than $1 billion.

Theoretically, the banks could try to have the rehabilitation agreement nullified. But Palmieri said he believes the standstill agreement the firm reached with creditors on June 30 will hold. The agreement gives Baldwin-United until Sept. 30 to work out a debt-restructuring plan. DANIEL D.

BRISCOE Offers words of reassurance to Kentuckians loans or make payments for annuities surrendered. The companies will, however.i continue to make death and disability payments and monthly payouts on policies so structured, she said. Only University Life Insurance Co. of Indiana and National Investors Life of Arkansas of the six companies taken over are licensed to sell in Kentucky, Briscoe said. All the companies sold single-premium deferred annuities, which defer taxes for a number of years, as well as whole-life policies.

The Baldwin-United subsidiaries promised a high interest payment to buyers of the annuities, but found it harder and harder to find investments to equal the promised interest Briscoe said more than $30.7 million in the special annuity had been sold to an estimated 1,200 Kentuckians. Ten times that much had been sold in Texas, he said. The Kentucky official said he's hopeful that other insurers will bail out the Baldwin-United subsidiaries, through assumption of existing policies or reinsurance agreements to back up the already issued policies. despite weakness in key segments of the domestic economy and in certain international markets. He said continued strong performance by most of the company's high technology and services businesses and the recovery in consumer durables were the main contributors to growth.

Pillsbury rule promised A federal judge promised Wednesday to rule soon on the Pillsbury bid for a temporary injunction restraining enforcement of the Indiana Business Takeover Act in its effort to acquire Stokely-Van Camp Inc. A The shares of Interstate trade in the over-the-counter market for about $4 each. You can write Interstate at 110 Ionia Ave. N.W., Grand Rapids, 49501. The shares of Insurance Investors are probably worthless because the firm's Kentucky incorporation has been revoked.

Money Maze will answer readers' questions about money, investments and the economy. Questions, to be submitted in writing only, should be addressed to Money Maze, co Marketplace, The Courier-Journal, 525 W. Broadway, Louisville, Ky. 40202. Answers are not intended as a solicitation to buy or sell any specific securities.

Initial claims for basic 26-week, state-paid benefits during the week ending July 2 fell 23,000 from the previous week, the Labor Department said. The figures are adjusted to account for such seasonal variations as weather and school closings. The decline in the last days of Six months ondtd Junt 30 1983 1982 004,891 100 2.51 Net income Ptr share First Kentucky National The Louisville bank-holding company reported profits from operations rose almost 25 percent in the quarter and six months ended June 30. A. Stevens Miles, president and chief executive officer, said he expects earnings to continue growing in the third and fourth quarters, although "the percentage increase compared to 1982 may not be as dramatic." Deposits increased 2 percent in the half-year, while loans and leases were up nearly 12 percent.

Quarter ondod Juno 30 1983 1982 Operations profit $5,576,000 Por 1.17 .94 Securities Not inrcino (85,000) (114,000) 4,880,000 5,460,000 1.16 .92 Six ninths ondod Juno 30 1983 1982 811,319,000 2.38 1.92 37,000 (88,000) 14,193,000 11,301,000 139 1.90 Operations Por share Securities gainloss. Net incomo Per Liberty United Bancorp The Louisville bank-holding company reported higher net income in the quarter and six-months ended June 30. Directors voted a quarterly dividend of 32(4 cents a share, payable Aug. 1 to holders of record July 25. Quarter ondod Juno 30 1983 1982 83,230,000 $1050,000 1.20 1.12 Net Incomo Por Six months ondod Juno 30 1983 1982 $4,040,000 $4,080,000 2.24 2.23 Not incomo Por Roth is a large, Milwaukee-based appliance-distribution company.

It began operations in Louisville last March after acquiring some of the Monarch Equipment assets and customers in the region. Donald H. Giles, Monarch's chairman, died in 1979. Monarch had been one of the region's major appliance distributors. Roth has said it would employ 35 people at its new distribution warehouse, which is to be constructed on a four-acre site in the Airport Trade Center, 4870 Crittenden Drive.

The project will be financed by a $1.3 million issue of Jefferson County revenue bonds. $1,000 in savings and $4,000 in IRAs. How can we save? Should we pay off the car this fall when some CDs come due, or reinvest it? If it should be reinvested, what are some good investments? (Name and address withheld.) A Don't pay your auto loan off because you probably are paying most of the interest in the first year, and would not get much in the way of a rebate. It's the view of Louisville investment adviser Oscar Bryant Jr. that you need growth investments, rather than high interest.

Therefore, as your CDs come due, consider buying common stocks, either individually or through a no-load mutual fund. Maintain about one-third of your assets in savings and short-term Treasury notes, suggests Bryant, an Roth Distributing Co. to construct a building By JIM THOMPSON Courier-Journal Business Writer Residents of Kentucky and Indiana who bought insurance policies from the Baldwin-United Corp. subsidiaries taken over by regulators in Indiana and Arkansas are protected against loss. Those words of reassurance came yesterday from Daniel D.

Briscoe, commissioner of the Kentucky Insurance Department, and from a spokeswoman for the Indiana agency. Briscoe said Kentuckians are protected by a "guaranty pool" funded by the 500 companies selling insurance in the state. The companies also agree to be assessed additional amounts if there isn't enough money in the fund to pay off losses. There's only $13,000 in the pool right now, Briscoe said. Payments from the pool wouldn't start until the seized companies were liquidated under court order.

Insurance departments in Indiana and Arkansas are trying "rehabilitation," a type of reorganization. Susan Hozey, speaking for the Indiana Insurance Department, said policyholders in that state also are protected by a guaranty pool similar to Kentucky's. Ms. Hozey, reading from a prepared statement, outlined restrictions placed by Indiana on University Life Insurance Life Insurance Co. and National Equity Life Insurance Co.

the three companies based in the state that were seized. None of the companies will be permitted to sell more insurance of any type, nor will they be permitted to honor requests for policy based in Lexington, approved a merger between Kirby Exploration and General Energy. Under the agreement General Energy stockholders will receive 1.5714 Kirby common shares for each share of General Energy common stock. CE announces earnings General Electric Corp. said earnings per share reflect a 2-for-l stock split in April 1983.

John F. Welch chairman of General Electric, said the company's "earnings growth in the second quarter of 1983 sustained the double-digit pace of the past year Barron's subscription OI would like to subscribe to "Barron's." Where do I write and what is the cost? L.G., Louisville A Barron's, published weekly, costs $32 for a six-month subscription and $63 for a full year. You can write Barron's at 200 Burnett Road, Chicopee, 01021, or call it, toll-free, 1-800-257-1257. Old stocks OIs there a current value for shares of Interstate Motor Freight System and Insurance Investors Trust T.E., Central City, Ky. The company that has acquired some of Monarch Equipment assets and product-distribution rights has announced plans to build a building on Crittenden Drive near Louisville's Stan-diford Field.

The structure, to house Roth Distributing Ca's new Louisville operations, will be located in a new, 10-acre industrial and commercial complex owned and developed by the Lichtefeld Construction Co. Negotiations with other clients interested in building or leasing facilities at the site are now under way, said Paul Lichtefeld, owner of the construction company. MONEY MAZE Jim Thompson Courier-Journal KnrinAri nrcirnx Savings advice OMy husband and I are 23, and until a month ago we both worked. Now, we have only his income. We owe $30,000 on our house, and $7,000 at 11.5 percent interest on a car we bought in February.

We have about $8,000 in a Prudential-Bacbe cash fund, $13,000 in various types of certificates of deposit, TV.