Chicago Tribune from Chicago, Illinois • 63

(Chicago (Tribune Wednesday, September 1, 1976 Business Section 6 Pay hike rate slows Factory orders decline in July Farm price drop biggest in 2 years A NEW CONTRACT for Teamsters union member helnsd push pay rales 'or equipment worker by 4 cent in the period. Pay in this category had increased 1.2 psr cent in the previous quarter. Accelerated increases in pay were also reported for service and managerial occupations up 3.3 and 2.1 per cent, respectively. On an industry basis, pay rates for workers rose 1.5 per cent, marking the second consecutive quarterly decline in growth rates. Pay for employes in trades and services also advanced 1.5 per cent, the same as in the first quarter.

The biggest industry pay gains were reported in construction, which recorded an increase of 3.1 per cent, and transportation and utilities, up from a 2.8 per cent increase. tail sales, employment, and housing starts, all of which are interpreted by some economists as indicating the recovery has hit a plateau. However, Ford administration economists say they remain confident the recovery will soon pick up again. The Commerce department said the value of new orders in July was down $450 million to a total of $95,146 million. New orders for durable goods declined 2.1 per cent to an adjusted $48.86 billion.

These are goods with a life expectancy of longer than three years. On the positive side, the agency said new orders for nondefense capital goods, which are watched by economists for future trends in business investment, rose $1,563 million, or 13.2 per cent, to a total of $13,398 million in July. WASHINGTON UPI Average prices for raw farm products a rough indicator of consumer food prices to come lock their' sharpest drop in more than two years during the month ending Aug. 15, the Agricultural Department reported Tuesdya. The net decline of 4 per cent was paced by lower prices for commodities ranging from cattle and hogs to wheat, corn, and soybeams.

Only milk, eggs, fruit, and vegetables went up at the farm level. It was the biggest decrease for a single month since June, 1974, and left the average 4 per cent below the same period a year ago. Increases had been registered in April, May, and June of this year, with no change in July. The farm price average, which often fluctuates dramatically from month to month, gives reading on whether supermarket prices will rise or fall. The ef fect can be delayed or diluted for products that must be processed or fed to livestock.

ADMINISTRATION experts are predicting that retail food prices for 1976 will average 3 to 4 per cent above last year, less than half the 1975 advance, and cointinue up.vard at about that rate in the first half of 1977. Farmers' costs declined one-half of 1 per cent and were 6 per cent above a year earlier, officials said. But since farm prices dropped faster than costs, farm returns slumped to 71 per cent of the "fair" parity standard compared with 73 per cent in July and 78 per cent in August, 1975. An index of cattle and hog prices fell 6 per cent during the month, 8 per cent below a year ago. Beef cattle slumped from $33.50 per hundredweight in mid-June to $32.80 in mid-August, compared with $32.30 a year earlier.

Higher profits expected to bolster bank industry 1 its' "li -j Vr 1 I mfx hi 1 I Mii i 1 'ill I it -rmi I. '-n I t'" -rv': By William Gruber PROFITS FOR MOST of the nation's large bank-holding companies in the third quarter ending, Srpt. 30 should show the fixst-gains against a year earlier in more than a year, a Chicago banker predicted Tuesday. "That should help to improve confidence in the industry even though many banks will still be showing Substantial loan losses and making contributions to their loss reserves," said Donald C. Miller, vice chairman of Continental Illinois Corp.

Miller added that the firm's subsidiary, Continental Illinois Rational Bank Trust Company of Chicago, is expected to display "a strong earnings performance" in the third quarter. ITS EARNINGS FOR the full year should be at a new high, based on the results of the first three quarters, although the bank "might find it difficult" in the final quarter to match the sharp profit gain posted last year in the corresponding period, he said. The banking industry is continuing to experience a weak loan demand from businesses, Miller said, and "we don't see the prospects for much change in that situation for some But loan demand has been running stronger at Chicago banks than those in New York, he noted. Since the end of May, loan volume reported by New York banks has dropped 3.9 per cent while Continental's volume rose 6 per WASHINGTON API Government measures trends showed Tuesday that pay for workers across the nation rose 'fn the second quarter at a slower rate than it had during the first three months of the year. According to the Labor Department employment-cost index report, wages and salaries rose 1.7 per cent in the April-June period, compared with a 1.9 per cent increase during the January-March period.

The wage index, introduced in June, is being published quarterly. It is to be expanded next year to reflect the cost of fringe benefits and eventually is to be published monthly. The index showed that pay for professional and (technical workers rose 1.1 per cent during the second quarter, down from a rise of 1.4 per cent in the first quarter. Pay for clerical workers increased 1.3 per cent after a 2.2 per cent rate hike in the first quarter. for Bonwit's "valued customers and friends," will be Sept.

9. It is patterned after European fur fairs and is expected to attract more than 5,000 guests. Though the fair is Expocenter's inaugural event, the 140,000 square foot exhibition hall won't hold its grand opening until January. Besides the hall, the Apparel Center, developed by the family of the late Joseph P. Kennedy, will have about 1,000 showrooms leased by clothing manufacturers nationwide and a 547-room Holiday Inn.

TENANTS ARE expected to begin The purpose of the program is to enable federal officials to channel money into railroad mainlines with the best prospect for success and eliminate any funding of too many mainlines in a single area. The prime example of an area with too many competing railroads, according to federal officials, is the Chicago to Kansas City corridor served by eight roads Chicago, Milwaukee, St. Paul Pacific; Chicago North Western; Burlington Northern; Atchison, Topeka, and Santa Fe; Illinois Central Gulf; Norfolk Western; Chicago, Rock Island Pacific; and Chicago I Eastern Illinois-Missouri Pacific. Mileage on the eight routes varies between 450 and 551, and annual tonnage carried by the lines varies between 33 million North Western and 6 million ICG, the ICC report said. ALSO LISTED AS "corridors of ex- the fourth largest United States automakers, said at a press conference prior to the unveiling of the automaker's lineup that the firm did not promote its intermediate car the Matadorhard enough to take advantage of the rise in interest in larger cars.

"It's not right to say Pacer was our problem," he said. "We had a Continued en page 11 WASHINGTON AP Orders for manufactured goods, including orders for durable goods, declined five-tenths of one per cent in July, the Commerce Department said Tuesday, in another indication the recovery from recession may be faltering. A decline in orders can mean that manufacturers will be producing less and therefore employing fewer workers. The decline in orders for manufactured goods was the first since a 4.2 per cent drop last December. Orders for durable goods, which include items like cars, appliances, and machinery, fell 2.1 per cent, the biggest drop since a 4.8 per cent decline in Marcn of last year.

THE REPORT follows other recent disappointing economic statistics on re- Building contracts dip in July The value of new construction contracts fell in July from June but was up from July of a year ago, according to the F. W. Dodge division of McGraw-Hill, Inc. The seasonally adjusted July index was 184, down from 187 in June but up from 165 in July last year. On a dollar basis, contracts in July totaled $9.77 billion, up from $8.95 billion a year ago but down from $10.53 billion in June.

Although Dodge found apartment construction strengthened, figures by the Commerce Department and other construction economists found them weakening. "We believe that Dodge data support our conclusion," said George A. Christie, Dodge economist. "July's construction contracts fit the general pattern of a temporarily stalled recovery," Christie said. He said single family housing has begun to level off and nonresidential building hasn't yet developed momentum.

Jobless decline seen Chemical Bank of New York predicts that "unemployment figures for August will decline slightly to the range of 7.5 to 7.7 per cent from 7.8 per cent in July. The bank also predicted that wholesale prices for the month will show a continued advance within the narrow range of 0.3 to 0.6 per cent, which has prevailed over recent months. The bank commented that the government's index of leading indicators suggests "no weakening in the fundamental forces behind the economic advance." New auto train run Amtrak and Auto-Train Corp. will team up to offer combined daily service between Louisville and Sanford, starting about Oct. 31.

Amtrak's Chicago-Miami train will tow Auto-Train's rail cars for automobiles and passengers between Florida and Louisville. Auto-Train will pay a portion of Amtrak's costs. The plan is for an experimental six-month period. Auto-Train currently provides daily auto-carrying train service for travelers between the Washington, D.C., area and Florida. It had given service once a week between Louisville and Florida but suspended that operation last spring.

6.93 yield on notes The Treasury Department's sale of $2 billion in four-year notes brought investors an average yield of 6.93 per cent. The Treasury said it received $5.42 billion in tenders and accepted bids ranging from 6.90 to 6.94- per cent. Noncom- petitive tenders, for $534 million were accepted at the average yield. Trans Union gets Dell Trans Union Corp. has acquired Dell Fastener Pittsburgh.

Details were npt disclosed. Dell distributes fasteners and fastener products in the Northeast and will continue to' be operated by its present management, Trans Union said. McDonald's to buy McDonald's Corp. said it will purchase 23,000 of -its common shares on the open market. The company said 7,000 shares will be bought for a new employe stock-ownership plan and 16,000 will be bought and held for issue under a stock-option plan.

Economy waits The November presidential election will end a major business uncertainty and stimulate private investment, the Exchange National Bank of Chicago says in its "Economic Forecast" publication. "This, rather than any new economic policies, should provide a needed quick push for economic growth," writes Robert Ash Wallace, vice chairman. "The impact of any federal economic policy change would only occur after a time lag, perhaps a long one." He said President Ford's reelection would represent no basic change but even the election of Jimmy Carter would require time and long effort to change policies. Japan trade improves Japan had a balance of payments surplus of $721 million in July, up from $160 million in June and $57 million in July, 1975. Seasonally adjusted, the July surplus was $735 million, down from $1.1 billion.

Business iEEplJ Ticker Rodger Orzada and Ron Swallow (right), iron on an escalator at enjoy a break by watching Teri D'Ancona model Tuesday white lynx valued at Bonwit fur preview Models workmen share CBT ordered to stay broker's suspension IT WAS AN unlikely scene models pirouetting on a stage in $20,000 furs as workmen in the cavernous new building pounded away with hammers and unwound big rolls of new brown carpeting. It was the Tuesday press preview of next week's International Fur Fair, sponsored by the Bonwit Teller Fur Salon. The preview was held in Expocenter, an exhibition hall in the Apparel Mart, a. huge development nearing completion at Wolf Point, just west of the Merchandise Mart. THE FAIR, an invitation-only event cent and that of other Chicago banks gained an average 2.4 per cent.

"I SUSPECT THAT the New York figures should be taken with a grain of Miller said. He pointed out that New York City recently raised taxes on banks, and speculated that some institutions in that city may have shifted a portion of their loan volume to branches outside the United States as a result. Miller' said he expects business loan demand to increase gradually toward the end of the year as the general economy improves. Meanwhile, he predicted the banking industry's prime loan rate, now at 7 per cent, "could go down another notch" to 6 per cent before turning upward again to about Vk per cent by yearend. CITIBANK'S TNew Ynrkl fornula based on changes in other short-term rates could lead it to cut its prime this Friday, he said.

"But they may be on the horns 'of a' dilemma," Miller added, "feeling that the softening of rates won't persist for long." As a banker, Miller said he'd prefer to see some increase in loan business but isn't too unhappy with the present situation because of the large number of questionable loans still on the books. "If we were writing the script for the business recovery, we couldn't have done it better," he said. "The economy is performing well, but it's not running away. And we see little prospect of it backsliding." "Assuming, for the sake of argument, that my client was guilty, the exchange didn't follow the rules of evidence," Fortes said. "And the suspension and fine was a highly excessive penalty.

"It is a case of the exchange taking after the little guy." A CBT spokesman said the exchange is forbidden by law to comment-on disciplinary cases. Fortes said the case relates to alleged violations in 1969, on which the first charges were made Ll March, 1975. Five hearings were held, he said, the last one Aug. 17. "We were notified Aug.

18 of the suspension and fine," Fortes said. "I told the exchange counsel we intended to file an appeal and asked the CBT to voluntarily stay the action because of the short time available. He told me on Aug. 20 that the exchange directors had been pDlled and they refused to stay the order." Stock Market Aug. 31, 1976 Composite table Volume 18,484.750 Issues traded 1,852 Dow Jones Industrials 973.74 4 82 S.

P. 500 102.91 0.84 N.Y.S.E. Index 54.92 0.41 Based on trades Tribune Cha irent's announcement that new factory orders also declined in July, the figures provided investors with more evidence of a pause in the economy's recovery. In other economic news, the Agriculture Department said farm prices fell 4 per cent in the month ended Aug. 15.

The NYSE composite index rose 0.41 to 54.92. On the American Stock Exchange, the market value index was up 0.31 to 101.98. The most active stock was U.S. Natural Resources, up 50 cents at $5. 1.0Q3 I 1 Unchanged 450 By George Gunset DISCIPLINARY ACTION against a member by a commodities exchange has been halted for the first time by the Commodity Futures Trading Commission.

The CFTC Tuesday ordered the Chicago Board of Trade to stay its suspension and fine of Paul Siegal, a floor broker, until Sept. 15. The exchange had found Siegal in violation of margin and commission ruhs, fined him $5,000, and suspended him for 60 days. The suspension was to have begun Wednesday. The commission asked for a record of proceedings to review the case after Sie-gal's attorney, Harry H.

Fortes, filed a petition charging that the CBT failed to follow its own rules in the proceedings. FORTES SAID Siegal was given no opportunity to be present or to cross-examine i.na wUnsss at the taking of a deposition. Hearings set on U.S. Tribune Photo by Michael Budrvs the Apparel' Mart. Ten's coat is a $25,000.

Expo stage moving into the showrooms next month, and the developers say their annual sales will be $3 billion a year. The showroom portion of the complex is 91 per cent leased. About a fourth of the tenants are moving their offices from the Merchandise Mart to be under the same roof with other apparel manufacturers. The vacated mart space already has been reserved by furniture manufacturers, a spokesman said. The hotel, featuring a 10-story lobby atrium adorned with California 'cypress trees, is scheduled to open by year's end.

rail study cess -capacity" by the report are the Chicago to St. Louis route with five railroad mainlines; the Chicago to Minneapolis corridor with five; the Chicago to Detroit corridor with four; and the Chicago to Omaha corridor with five. On that corridor, the report lists the Burlington Northern Railroad as having the best facilities and capacity to handle traffic, -the Milwaukee, and Rock Island as "average," and the ICG as below average. However, traffic density studies shows the carries an average of 45 million tons to 35 million tons for the Burlington. The others are below 20 million tons.

BUT RAILROAD officials here complain that the U. S. Department of Transportation, which prepared the report, has designated almost the entire Midwest, including the entire Chicago area, as "excess capacity." "The report was done hastily," said one railroad executive. "It is a poor report." The report ignores the fact that the Midwest railroads, unlike the Eastern railroads on which the report was based, are heavy grain haulers serving vast agricultural regions, railroad executives here complain. "YOU MIGHT HAVE a line which dees not carry the 20 MGT million gross tons required by DOT, but it still has to be capable of handling heavy-unit trains carrying grain during the harvest seasons," said one executive.

"Farmers aren't going to be able to compete in the world grain markets if they have to pay 5 cents extra on each bushel to lug their grain 100 miles to a railroad because some bureaucrat in. Washington decides the local railroad is redundant," said who asked that his name hot be Stocks post 3d straight gain; Dow climbs 4.82 By David Young Transportation editor THE INTERSTATE Commerce Commission will begin hearings here Sept. 13 on a controversial federal report which railroad officials believe could have a major effect on Midwest rail lines. The hearings are scheduled for 9:30 a.m. in the Dirksen Federal Building on the ICC's recently released report sifying and designating rail lines, a report which has been criticized by Midwest railroad executives.

The designations will be used by federal officials as a guide to disburse an estimated $600 million in redeemable preference shares and $1 billion in loan guarantees to railroads seeking to upgrade their mainlines. THE MONEY WAS authorized by the 1975 Rail Reorganization Act signed early this year. NEW YORK fAP The stock market recorded its third consecutive moderate gain Tuesday during another quiet day on Wall Street. The Dow Jones industrial average, up more than 8 points in the last two sessions, rose 4.82 tq 973.74. Advancing stocks outnumbered declines better than 2 to 1 among issues traded on the New York Stock Exchange.

Volume rose from Monday's extremely slow pace but remained fairly light. NYSE sales totaled 15.48 million shares, up from 11.14 million during the previous session. THR DOW SURGED more than 7 points early in the session, spurred partly by postponements of price increases planned- by several major steel firms and by some of their customers, such as appliance manufacturers. But the advance faded in mid-afternoon when the government said new durable goods orders for July fell 2.1 per cent from June, the biggest monthly drap since March. The figures seemed to surprise Wall Street, since 11 days ago the government estimated the monthly decline would be only 0.5 per cent.

Along with the Commerce Depart- Intermediate Matador key to AMC rebound By James Mateja Chicago Tribune Press Service TORONTO American Motors Corp. faltered in the 1976 model year because it was recognized as a small car specialist at a time when small car sales fell flat, AMC's president said Tuesday. William V. Luneburg, president of.