Stevens Point Journal from Stevens Point, Wisconsin • 1

mint Thursday 25C July 26, 1984 Stevens Point, Wl 54481 USPS 143520 2 Sections 20 Pages inois bank rescue 'or III set at $4.5 billion WASHINGTON (AP) In the largest bank rescue ever, the government announced today a $4.5 billion aid package for giant Continental Illinois National Bank Trust a once-aggressive lender now burdened with a huge portfolio of bad loans. The agreement calls for the Federal Deposit Insurance Corp. to buy $4-5 billion worth of bad loans from Continental, one of the nation's 10 largest banks, at a discounted rate of $3.5 billion and to pump in an additional $1 billion in capital. er" but said it will be "immeasurably stronger and positioned to profitably serve the full range of banking needs of its customers." Under the government assistance plan, the holding company's assets will fall to $30 billion a drop of one-fourth the assets it had last spring. The arrangement caps a two-month search for a way to handle the 127-year-old bank's problems, which began to surface in 1982 when the Penn Square Bank failed in Oklahoma.

Continental, which had pursued a strategy of aggressive lending to its industrial customers, had bought $1 billion in energy-related loans from Penn Square in the late 1970s. Last spring, Continental's troubles reached the critical point. Rumors circulated in the financial markets of its potential problems, sparking a loss of billions of dollars in deposits. The federal regulators joined with 28 commercial banks in May to put up $7.5 billion to keep the bank afloat. Today's announcement puts a more permanent arrangement into place, assuming it is approved by the bank's -shareholders.

The announcement warned that failure to approve the deal could result in the bank being declared insolvent. Under the deal: The FDIC will take on right away $3 billion worth of loans, written down to $2 billion, and get an additional $1.5 billion over three years. The purchase will virtually free the bank of bad loans. To buy the loans, the FDIC will assume responsibility for repayment on $3.5 billion in loans the Federal Reserve Bank of Chicago had granted to the bank. The FDIC will inject $1 billion in capital to the bank through its purchase of two series of preferred stock.

In return, the agency will get an 80 percent stake in the bank. Some industry analysts have described the government action as nationalization, which would be the first of a major. U.S. bank. But federal re- gulators maintain the move falls short of that because they will not own all (See bank rescue page 2) A I vS- I ZZZZ, Afa 11 In announcing the agreement, the agency said John E.

Swearingen, retired chairman of the board of Standard Oil Co. of Indiana, would be the new chairman of Continental Illinois the bank's parent. He will succeed David G. Taylor, who will resign Aug. 13 as part of the deal.

The bank holding company had assets of $41 billion at the end of March, making it the eighth largest in the country. Today's statement conceded that "the resulting institution will be small- Postal Service's salary reduction decision riles union WASHINGTON (AP) A union spokesman says a Postal Service decision to pay new employees 23 percent less than the current work force "certainly increases the chances" that workers will become angry enough to stage illegal job actions. Spokesman Alan Madison, of the American Postal Workers Union, said delegates to the organization's convention, in August will decide their next step along with members simultaneously attending the convention of the National Association of Letter Carriers. Madison's remarks, and a charge by APWU President Moe Biller of "union busting, pure and simple," came after the Postal Service announced Wednesday it would begin paying the lower pay scales Aug. 4 without awaiting an arbitrator's decision.

The salary reduction will put into effect the mail service's last wage offer, made to postal unions before collective bargaining talks broke down and contracts expired at 12:01 a.m. on July 21. The mail service and four unions currently are at an impasse, triggering a law that provides for fact-finding and binding arbitration that will determine terms of new contracts. The process will end Dec. 10, the Postal Service said.

The announcement means the mail service management decided not to wait for completion of the process. The action will create dual pay scales in which new workers will receive less than counterparts doing the same job. Unless the system is changed, the disparity would remain throughout their careers. The Postal Service also proposed in the bargaining a three-year wage freeze for its 600,000 existing union-covered workers. It simply continued their current pay during the impasse.

The average salary paid to these workers is $23,238 and the benefit package raises the figure to $27,893, the Postal Service said. "This action certainly increases the chances that workers will undertake some sort of action" after the two major postal unions hold their conventions the week of Aug. 19, Madison said. Strikes against the Postal Service are illegal. Another part of the plan will reduce sick leave and annual leave for new employees.

Ed Gein is shown in this 1968 photo as he was transferred from Waupun State Hospital to Waushara County jail. The police officer is not identified. (AP photo) Ed Gein story ends with his death at 77 SEASON OF CHANGE Summer 1984 will be remembered in Stevens Point as the season when the city's face changed. Construction, much of it related to downtown revitalization, is everywhere in the downtown area. Here, a crane lowers another section of building into place at First Financial Savings Loan on Main Street.

The firm is making a major addition to its headquarters here, expanding both up and out, and growing from 20,000 square feet to more than 100,000. (Staff photo by Doug Wojcik) County Home project supported of 93 patients needing that care, he said, with the capacity to house only two more. 1 There is no question about need, he said, because the home never has a vacancy for more than 48 hours unless the hospital asks for a longer period for a patient who may soon be released to the home. A depreciation account has already accumulated $120,000 for the purpose of building a new wing to reduce the amount of the loan, he said. Samardich also apologized to the committee for failing to keep its members more informed about the project since a report on Jan.

9 when the committee supported going ahead with a construction project. Committee Chairman Glenn Johnson cast the dissenting vote on sending a recommendation, to the Finance Committee, and he said he felt Samardich had gone a step further than author-(See home page 2) The Portage County Space and Properties Committee endorsed a construction project at the County Home Wednesday night. By a 4-1 vote, the committee recommended that the proposal for replacement of the 44-bed east wing be sent to the Finance Committee for its consideration. George Samardich, County Home administrator, told the Space and Properties Committee the wing presently does not meet all state codes and replacing the wing would cost home residents less than if it were torn down and not replaced. Without replacement, residents' costs would increase by $3.24 per day, he said, while constructing a new wing would increase the daily rate $1.98 the first year and then 10 cents less each year during the 10-year life of the construction loan.

He said he based his daily rate costs on a $600,000 construction cost for a wing, plus about $50,000 for demolition of the existing wing. Early estimates put the cost of a new wing at $1 million, he said, but he revised those after contacting the state about the costs per square foot for similar projects and found them to be about $45 per square foot. While the county would be asked to borrow the money, Samardich said the construction would not affect the property tax levy because the loan would repaid through patient fees and state reimbursements. The county has been granted waivers over the years to continue to operate the wing, but Samardich pointed out the county has received those with the understanding that the wing will either be remodeled or replaced. Because of the condition of the wing, he said the county can't house patients who need skilled care in the section.

Presently the home has a population swer. He looked into a lean-to at the side of the house and saw Mrs. Wor-. den's body hanging by the heels, decapitated and "dressed out like a deer." Gein was found in town. He was declared unfit to stand trial and was sent to Central State.

Gein's farmhouse was all cluttered except for one room that had been boarded off. It was Gein's mother's room. She died in 1945, and he kept the room just as she left it. He began robbing fresh graves -of women who, like his mother, were middle aged. The women he was accused or suspected of killing were also believed to resemble mother, in his view.

In 1968, he was tried in the death of Worden. It was ruled that he was insane at the time of the crime and he was returned to the hospital. In 1974, Gein sought a sanity hearing and asked for his freedom. 'But Circuit Judge Robert GoUmar sent Gein back to Central State. Authorities testified at the time that Gein was never a problem in prison, although he reacted rather poorly to other inmates.

He worked as a carpenter, mason and hospital attendant while at Central State. He supposedly was saving his money for a dreamed-of trip around the world. Gollmar wrote a book in 1981 suggesting that Gein was responsible for the unexplained disappearances of several men and women, including at least one from Portage County. Authorities linked Gein to the Dec. 8, 1954, disappearance of Mary Hogan, 55, a town of Pine Grove tavemkeeper.

A skull found on Gein's property allegedly matched Mrs. Hogan's dental charts. Some reports said Gein confessed to killing her, but he had never been formally charged with her death. The county district attorney's office and state Crime Laboratory maintained an open file on the case. The Gein property was sold in 1968 to pay debts, but the house was mysteriously burned a week before an auction was to be held.

By The Associated Press and Journal Staff Ed Gein, the grisly killer who 27 years ago drew national attention to the tiny Waushara County town of Plainfield, died this morning at the Mendota Mental Institute. He was 77. Authorities who arrested Gein in November 1957 found such grisly items as preserved human heads and lampshades and chair seats made out of human skin at his farmhouse. It's a horror story that may never be forgotten by Central Wisconsin residents. But it's also a story that few involved care to remember.

The Journal contacted the then-Portage County sheriff and two deputies, who were involved with investigating reports of murders linked to Gein. Current Plainfield village officials were also called, but all declined to ment on the case this morning. "What can you say good about him? I better say no comment," said former Sheriff Herbert Wanserski. Even Gasperic Funeral Home, Plain-field, which is handling arrangements, had no obituary information this morning. The funeral home's answering service said details would not be released until after services were held.

Gein had been at the Mendota institute in Madison since May 1978. He was transferred there after, having been almost continually at Central State Hospital at Waupun since his arrest. His story later served as the model for Alfred Hitchcock's "Psycho." The author of the novel on which the movie was based, Robert Bloch, lived about 50 miles from Gein's farmhouse. The story began to unfold on Nov. 16, 1957, when relatives of Be mice Wor-den, a 58-year-old widow who ran a hardware store at Plainfield, realized she was missing.

Gein's battered pickup truck had been seen near the store twice that day, and a Waushara County deputy drove to Gein's farm to ask if he had noticed anything. No one was home. He returned later and still got no an $22 million Boston arson ring cracked is not the termination of the investigation," he They weren't helping firefighters they were endangering firefighters' lives." The indictment said the fires were set mostly to force the city to rehire police and firefighters laid off after the state's Proposition Vh, a wide-ranging tax cut aimed at reducing the public payroll, went into effect in July 1981. Weld said some fires were set for profit or revenge, and some of the suspects worked for companies that stood to gain insurance money. Weld said the fires, set between Feb.

19, 1982, and April 27, 1983, caused $22 million worth of damage and injured 282 people, including 65 firefighters. Four people suffered permanent injuries, he said. The most costly fire was a $13 million blaze at the Spero Toy Co. in south Boston on June 3, 1982, that injured 31 firefighters. Stephen E.

Higgins, director of the U.S. attorney's Arson Task Force, said more arrests are expected. "People are on the streets still, and this BOSTON (AP) Seven men charged with setting 163 fires, in part to halt fire and police department layoffs following a tax cut, caused $22 million in damage and 282 injuries in "the largest arson case in history," authorities said. An 83-count federal indictment issued Wednesday alleges that the seven, including two firefighters and two housing policemen, began setting fires in trash cans to frighten residents, but later targeted commercial and residential buildings when the smaller blazes failed to attract enough attention. By the summer of 1982, suspicious fires were so frequent in Boston and surrounding towns that the city became known as the "arson capital of the world," said UJS.

Attorney William Weld. Firefighters said they were stunned by the indictments. "These guys were sick puppies," said Boston Fire Capt Matthew Corbett "Trying to understand their reason for doing this is impossible. said. The arrests Wednesday culminated a two-year investigation by state, federal and local authorities.

The charges include conspiracy, arson of interstate facilities, arson of federal buildings, manufacture and possession of unregistered incendiary devices, obstruction of justice, mailing threatening communicatons and perjury. Weld identified those arrested as: Sgt Gregg M. Bemis, 23, and Lt. Wayne S. Sanden, 28, both of the Boston Housing Authority police; Airman 1st Class Leonard A.

Kendall 22, of Acton, a fireman with the U.S. Air Force who was seized in Valdosta, and Ray J. Norton 44, a Boston firefighter. Also arrested were Joseph Gorman, 27, a ngger at a General Dynamics Co. plant in Quincy; Christopher R.

Damon, 27, an employee of Industrial Health of Hamilton, Ohio; and Donald F. Stackpole, 28, a partner in Metro Security Patrol, a South Boston security company. Clearing skies tonight Lows in the 50s Partly to mostly sunny Friday Highs in the upper 70s.