Home Edition — 25 Cents Salina, Kansas THURSDAY January 9,1986 114th year—No. 9 — 20 Pages Dow Jones records largest one-day drop NEW YORK (AP) - An upsurge in interest rates knocked down stock prices Wednesday and sent the Dow Jones industrial average spinning into its biggest one-day decline ever. But the percentage drop in the blue-chip measure was minor compared to the plunge in 1929 that came to be known as the Great Crash. A day after reaching a record high, the Dow Jones average of 30 industrials fell 39.10 points to close at 1,526.61. That surpassed the previous record decline of 38.33 points set Oct. 28,1929. Wednesday's drop amounted to 2.5 percent of the average's value, however, while the single-day loss in 1929 was almost 13 percent. The market's paper value loss came to $47.5 billion, as calculated by the Wilshire Associates in an index of the market value of 5,000 stocks. Analysts said the selloff was prompted in part by a sudden rise in interest rates in the credit markets. The upsurge was attributed to signs of economic strength that raised worries about a resurgence of inflation. Once prices began to slide, brokers said, it touched off a rush of selling by investors seeking to cash in, and thereby protect, their gains from the powerful rally that began in October. Reagan freezes Libyan assets By The New York Times President Reagan ordered a freeze Wednesday on all Libyan government assets in the United States and in American bank branches overseas. The action, contained in an executive order signed by Reagan, came a day after the president announced new moves against Libya in retaliation for what the United States has said is the Libyan role in supporting international terrorism. In the measures announced Tuesday, Reagan virtually severed all economic ties with Libya and urged Americans living there to depart. Reagan's appeal to allied governments to join in sanctions against Libya received a tepid response Wednesday from European governments and Japan, all of which expressed doubts about the merits of economic sanctions. State Department officials played down the likelihood that Western allies, dependent on oil and other economic trade with Libya, would agree to the sanctions, but said other governments might become more supportive of long-term remedies against state-sponsored terrorism. To bolster its case on the need for a worldwide economic boycott, the State Department issued a "white paper" that included some new allegations about assistance given to terrorist groups by the Libyan leader, Col. MoammarKhadafy. At the same time, the Federal Bureau of Investigation said it had prevented six potential terrorist attacks last year within the United States that were to be carried out by terrorists from abroad. Three of the incidents involved a Libyan diplomat who the FBI said had entered the country to coordinate violence against Libyan dissidents. In Libya, the state radio described the new U.S. moves as proof that Reagan "and his intelligence services are involved in lowly conspiracies" to overthrow the Khadafy government. The Libyan statement came as Moslem governments, ranging from Iran to the pro-Western Kuwait, issued statements of support for Khadafy. The freeze order announced Wednesday affects Libyan deposits held in U.S. banks and overseas branches, as well as properties on U.S. soil. Administration officials said no precise figure existed on the size of Libyan government assets in the United States, but estimated that they were in the "hundreds of millions" of dollars. They said the huge majority of such holdings were "liq- uid assets" or bank deposits. U.S. government figures for 1984 show Libya with only $2 million in direct investment in the United States. Direct investment is defined as holdings of 10 percent or more in individual American companies. The executive order freezing Libyan Government assets will not affect the holdings of Libyan nationals and is less sweeping than a similar edict in 1979 by President Carter that applied to Iranian government assets. That order involved not only United States banks and foreign branches but foreign subsidiaries as well. Administration officials appealed to European governments Wednesday by arguing that Europe "has borne the brunt of Khadafy's latest outrage" and had suffered an enormous cost in terms of lives and property. Carlin receives polite reception from ag board Craig Chandler FRAMED — An employee of Equimco, Eagle Grove, Iowa, assembles the framework for a storage building at Tony's Pizza in south Salina. Chooo! Researchers hot on trail of cold remedy BOSTON (AP) — A nose spray made from the human hormone interferon is the first treatment to protect people from catching the common cold, and it might someday become a routine weapon against this pervasive woe, researchers say. Two new studies found that the spray is highly potent against rhinovirus, by far the most frequent cause of colds, when people use it at home. It can prevent about 80 percent of all colds caused by this variety of virus. The spray was powerless against other germs, such as the influenza virus, that also cause cold symptoms. But despite this shortcoming, those who used the spray suffered 40 percent fewer colds than those who did not. "This is, to our knowledge, the first instance where it has been possible under natural field conditions to show prevention of transmission of colds in the household," said Dr. Frederick Hayden. Earlier attempts at using interferon against the cold produced annoying stuffiness — one of the symptoms researchers were trying to prevent — and those taking the treatment suffered more cold-like miseries that those who didn't. In the two new studies, reported in today's New England Journal of Medicine, the interferon spray was not used to cure the common cold, only to prevent it. But Hayden is conducting another study to see if it does any good after a person comes down with a cold. The sprays are not on the market. Schering Corp., which produced the interferon used in the two studies, has applied for approval from the Food and Drug Administration to sell it as a prescription drug. The treatment was tested by Hayden and colleagues at the University of Virginia and by a team headed by Dr. Robert Douglas at the University of Adelaide in Australia. The results of the two experiments were nearly identical, and the Australian group said their work provides "convincing evidence" of interferon's benefits against the common cold. In an attempt to avoid interferon's side effects, the researchers gave the medicine in higher dosages over a shorter period of time than in previous studies. The strategy worked and about 10 percent had minor nasal bleeding but no other symptoms. Hayden said more research will be necessary to learn if the sprays are safe for people with breathing disorders, such as asthma. "I do think that in the long run, once we understand what the optimal dosing schedule is, it will have a role in preventing colds in otherwise healthy adults," he said. Schering officials decline to say how much the spray will cost. TOPEKA (AP) - Gov. John Carlin received a polite, but unenthusiastic, reception Wednesday from the state Board of Agriculture as he tried to explain his controversial proposal to reorganize the state's agricultural agency. About 300 dele-! gates and others attending a luncheon on the second day of the annual state agriculture meeting gave Carlin a standing ovation before his speech. Carlin But when he was done, there was only restrained clapping. The reason is that many of those attending the convention are hostile toward Carlin's executive order — issued Dec. 20 — that would bring the Board of Agriculture and the state Department of Agriculture under full state control. Carlin used the major portion of his speech to defend his proposal, which he said has been misrepresented by some in the agricultural sector. With agriculture in transition, Carlin said, it is time to revamp the state agency responsible for ag-. ricultural matters. "It requires a new approach, rather than just waiting for better times," Carlin said of the depressed agricultural economy. "I make this recommendation on behalf of and for agriculture." For more than a century, the 12- member Board of Agriculture, which makes policy for the state Department of Agriculture, has been elected by delegates to this annual meeting. Those delegates are selected by Kansas farm organizations, which gives control over the agency to laymen farmers and their associations, not to state government. The Board of Agriculture also elects the state secretary of agriculture, who is not a cabinet officer under the governor, although he attends cabinet meetings at the invitation of the governor. Under Carlin's proposal, which can be rejected by either house of the Legislature when it convenes next week for the 1986 session, the board still would be elected as it now is, but would be advisory and have no policy-making power. The policy authority would be transferred to the governor. The agriculture secretary would be a cabinet-level official, appointed by the governor rather than elected by the board, under Carlin's proposal. Carlin would put the state Grain Inspection Department, which is now a separate state agency, under control of the Department of Agriculture. He would keep the Kansas State Fair Board as a separate entity of state government, but would enlarge its membership to include nonagricultural members Spokesmen ior the Kansas Farm Bureau and Kansas Livestock Association have expressed their organizations' opposition to the proposal, which has been made in one form or another by governors of both political parties since the 1920s. Former Gov. Robert Bennett, a Republican, was the last to propose such a change, in 1975. With changes coming in how agricultural programs are funded, Carlin said, it is essential that governors of Kansas have direct responsibility for setting and administering the agricultural policies of the state. He said it is not a power play on his part, because his tenure as governor will end in January 1987. "It's nothing personal," he said. "My successor will make the appointment. But I don't want to leave agriculture out on a limb. I don't want some future governor to say, 'Agriculture is not my responsibility.' "Unless there is a direct link between the governor and the Agriculture Department, the responsibility simply is not there.'' Reductions in federal funding, which the Gramm-Rudman amendment might force, would mean state governments would have to assume a much larger role in farm programs, Carlin said. "Congress and the president will be shifting more responsibility back to the states," he said. Today Inside Classified 16-18 Entertainment 20 Farm .' 14 Fun 19 Living Today 6,7 Local/Kansas 3,15 Markets 8 Nation/World 5 On the Record 9 Opinion 4 Sports H-13 Weather 9 Weather KANSAS — Sunny and pleasant today, with highs 50 to 55 west and in the upper 40s east. Mostly clear tonight, with lows in the 20s statewide. Partly cloudy Friday, with highs about 50 statewide. Renters get slice of 'American dream' from government McKEESPORT, Pa. (AP) — A family that has lived in public housing for 17 years realized "the American dream of home ownership" Wednesday, becoming the first in the nation to get the deed to their publicly owned home under a new federal program for low-income tenants. The single-family, two-story home, trimmed with green aluminum siding and a pillared porch along a tree- lined street, now belongs to Merrian and Mary Snyder instead of the government. "We believe that by becoming homeowners, these families also can help stabilize their neighborhoods as they improve their own lives," Samuel R. Pierce, secretary of Housing and Urban Development, said in a statement released in Washington, D.C. Pierce said the "the demonstration program will allow public housing residents to share in the American AP Merrian (right) and Mary Snyder, and housing official John Kooser Jr., cut the ribbon. dream of home ownership." The Snyders have rented the house at a subsidized rate for the past three years and have lived in public'hous- ing for 17 years. The government will charge no interest on the $25,000 mortgage loan and there was no down payment. The Snyders will pay $400 a month for eight years, including real estate taxes, utilities and insurance. "We never could afford a home because we never had the big down ~ payment," said Mrs. Snyder, 58. "This is like paying rent for eight years. This is a second chance for us. I never dreamed of owning a home." The mortgage is owned by the McKeesport Housing Authority, which was the first to have HUD's permission to sell public housing. Nine other houses will be sold in the city, located on the Monongahela River 15 miles south of Pittsburgh. Nationwide, 16 public housing agencies and two Indian housing authorities are taking part in a pilot program called the Public Housing Ownership Demonstration, an effort to help tenants in public housing become homeowners. About 2,000 homes are involved. Officials say the program has a number of benefits. Low-income people can own their homes, municipalities can begin collecting taxes on the public housing and the government has fewer houses to subsidize. "Everyone wins," said McKeesport Mayor Lou Washowich. "The city gets the housing unit back on its tax rolls, and the Snyder family can now enjoy the advantages of home ownership." Washowich attended a ribbon- cutting ceremony with Kenneth J. Burne, assistant secretary for program development at HUD. "The residents of public housing share the same aspirations and goals as the rest of the American people. Home ownership allows them to move up, build equity and gain a share of the American dream," Burne said. Snyder, 59, lives with his wife, his daughter, Ruth, 32, and his grandson, Tony, 9. He is a maintenance mechanic for the McKeesport Housing Authority and the family's combined gross annual income is $20,900. As a basic requirement of the program, a family must have enough income to afford the costs of the mortgage, taxes, insurance, utilities and maintenance without public subsidy. HUD repairs the houses before they are sold. The Snyder residence was purchased by HUD three years ago for $9,000 and refurbished. The Snyder family and all new owners get instruction in basic home repair, including how to fix a leaky faucet. "We just don't put them in a boat and push them off and say goodbye," said Michael Zerega, special assistant at the HUD office in Pittsburgh.
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