The Boston Globe from Boston, Massachusetts • 16

Economic barometer continues to rise ''v Ma -1 prices, which continued their robust rally; and a measure of the money supply, which the Federal Reserve System lately 0.8 percent for the month, an improvement over the disappointingly small increase of 0.3 percent in October, and the seventh rise in eight months. Baldrige himself, however, offered the important caveat to put this in perspective. "The leading index has shown a net increase of 5.3 percent since March," he said. "This is below the average postwar gain of 10.7 percent ovef comparable periods before recoveries from recessions, and probably indicates that the business By Thomas Oliphant Globe Staff WASHINGTON Commerce Secretary Malcolm Baldrige, who speaks softly and with care, described the picture this way yesterday "an economy moving toward recovery." On that note of optimistic ambiguity, his agency released its monthly batch (covering November) of statistics designed to foreshadow the economy's performance a few months hence. The index of leading indicators was up upturn will be moderate in the early stages." Behind the overall number, it was possible to see another reason why actual recovery has not occurred despite the index's consistent tilt since last spring: it is being driven primarily by improvement in financial conditions, not in measurements of actual economic growth.

In the report for November, seven of the 10 available components of the index registered positive, but nearly all the gain was accounted for by two Indicators: stock Ml EDWARD MOSCOVITCH Both sides of Ed King It's tempting to think we've actually had two governors these last four years. On the one hand, we've had the governor of accomplishment in business development, transportation and environmental protection. On the other hand, we've had the governor of falsified resumes, resistance to investigations of apparent fraud, and questionable maneuvers to fill a few more judgeships. The Dr. Jekyll of the corner office compiled an impressive record.

His personal commitment to economic development turned around the perception that Massachusetts is "antibusiness." Gov. Edward J. King has sought tough legislation to control hazardous waste disposal and enforced it. He followed up with a creative approach to siting hazardous waste disposal facilities, giving cities and towns leverage to negotiate with potential developers but avoiding an arbitrary veto by the Legislature or by local WELL BALANCED Construction worker guides a beam at University place development on Mt. Auburn street, Cambridge.

GLOBE PHOTO 6Y JOHN BIANDING. Cuts give autos 1st profit in 3 years has been increasing above its target levels as part of an effort to stimulate a recovery. The only other signficant contributor was a drop in average weekly claims by the newly unemployed for jobless insurance benefits during the month. Despite that decline, however, the number is still much too high to indicate ECONOMY, Page 19 Columbia Gas is ordered to make refunds Associated Press WASHINGTON In a decision which could reduce natural gas bills nationwide, an administrative law judge ruled yesterday that consumers in eight eastern states i are uue reiunus uecause oi improper pur- Luaouig a.iik..a uy a uiajui i-uui pany. Michel Levant, an administrative law judge for the Federal Energy Regulatory Commission, ruled that the Columbia Gas Transmission Corp.

had acted improperly by taking excessive amounts of high-cost gas, under "take-or-pay" agreements with 5 gas producers, while cutting back on supplies of cheaper gas. Levant's ruling, which must be re viewed by the tull commission, orders Columbia to make refunds to its Cnnsiimpr (frnnns. who have hcen con tending for months that improper pur chases by the nation pipelines were driving bills to unreasonable heights, called Levant's ruling a major victory. "We won on all the major points," said Ha KOinscniiu, a spokesman wi uic ri- zen-Labor Energy Coalition, one of the groups which had challenged $481 million in rate increases requested by Columbia in March and September of 1 98 1 Levant's order did not specify how much money should be refunded, leaving 1 luai 10 DC wui K.CU uui in a laici yi utccuuig if AAmmiccjAn hie finHinrf Unmunir caiH th rpfiinH rnnlrl amount to $1 00 million, which would be an average of almost $24 a customer. Columbia, one of the country largest 11 r.

"71 1 HllClaLdlc piptunca, oupuvo ga.i iu i a iu cal distribution companies serving 4.2 million customers in New York, Fennsyl-, vania, Maryianu, Virginia, west viigima, Kentucky, Ohio, New Jersey and the Dis- LI 11.1 Ul UIUNIUIU. The Columbia case has been watched with rinse Interest because it is the lead case in a round of challenges filed with the commission over pipeline purchasing practices. It was not immediately known how far the effect of the ruling might spread. Al- most all major interstate pipelines buy gas under take-or-pay agreements some a 1n nntna lift Consumer groups have contended that customers' bills are increasing, because of those agreements, by as much as 40 percent annually at a time of record gas surpluses caused by falling demand under price deregulation and lowered industrial use because of the recession. Monev funds lose 86.54b United Press International NEW YORK Money market mutual fund assets tumbled $6.54 billion in the uroolr cnrloH FVr 9Q makintf a virtual flood of $20 billion that has fled the funds in the past three weeks since banks began VV 1 X- u.

TVo oiiworfo ma ti iritv rf tnnrlc nnrrTo- i r- net os aiso narrowea 10 oo aavs iruni oo uays me previous wee. "This narrowing of maturities reflects the funds moving toward a liquid position and is not an indication of interest rate direction," said William E. Donoghue. puunsner oi uoiiutiiue iviuucy runu re II. 1 r- 1 Tl port of Holliston, Mass.

i hiiirA nntf ntv has hppn arenmn isherl smoothly. Fund managers were aware oi the possibility that bank money market accounts would attract money and had Fund managers stagger maturities in- their portfolios so that a portion of he in-. "Not one shareholder has lost one cent In a money market fund," Donoghue said. rie wasmiiuiuii-uancu iiivcaiiiiciu Company Institute said all categories of funds had an outflow. General purpose funds were down $2.2 billion; broker-deal-, er funds fell $3.1 billion: institution only funds were down $1.3 billion.

Donoghue noted that the greatest out flow still Is in stockbroker funds, which'' have been marketing bank certificates. He free funds last week because of yields being offered by banks. financing on 1982 and 1983 cars, duty trucks and most vans that are delivered to buyers through March 31, a car dealer said yesterday. The program, through GM's finance arm General Motors Acceptance will kick in after a current 10.9 percent interest on 1982 models expires today, said Bill Studebaker, vice president at Buff Whelan Chevrolet Inc. in Sterling Heights, Mich.

In 1982, General Motors Corp. and Chrysler Corp. will be in the black while Ford Motor Co. and American Motors Corp. will be in red, analysts said.

"They (US automakers) have cut their breakeven points drastically," said John Hammond, analyst at Data Resources Inc. in Lexington, Mass. "They have done more than any other industry because they have had the problems (of a sluggish economy) longer." David Healy, analyst at Drexel Burn-ham Lambert Inc. in New York, said this year's results are "significant." He added, "Next year will bring a large improvement in profits and sales" for the King's administration carried out management rights legislation at the MBTA, taking a strike to win the right to assign part-time bus drivers and to contract out maintenance work that MBTA employees could not perform efficiently. The hospital cost containment bill enacted last fall is a national landmark that gives hospital administrators clear and unmistakable incentives to limit the rise in hospital costs.

And then there's Mr. Hyde. This is the governor whose appointees claimed educational degrees they'd never earned, or had conflicts of interest with industries they might regulate, or went to jail for petty corruption. He's the governor who resisted funding for the Ward Commission and ignored its recommendations in preparing capital budgets. He's the man whose choice for a Revenue Department job had left the Internal Revenue Service in disgrace.

At times. King has been careless in implementing policies. His hospital reform Is endangered by reluctance of his administration to put limits on hospital building, for example. Are these two men really one governor? How to explain the dichotomy? King entered office with four major personal priorities to improve the state's business climate, to raise the drinking age, to restore capital punishment, and to eliminate state-funded abortions. Certainly the last two of these are controversial, and the death penalty is hardly central to the street crime and house breaks which so frighten our citizens.

But King accomplished his four priorities. Beyond this, however. King had no set agenda. The key to understanding his record, in my view, is his loyalty. Where he appointed good people, he backed them up and achieved good results.

But loyalty to his electoral backers often meant poor appointees, whom he failed to monitor close-ly. Consider, for example, transportation. From King's days at Massport, we know that he was a strong proponent of a third harbor tunnel. But his first transportation secretary, Barry Locke, made little progress in this area and replacement James Carlin's 'recently completed plans may come too late. King was elected strong support from the Carmen's union, and during Locke's tenure King undercut MBTA management by dealing directly with the unions himself.

With Carlin, he behaved differently. Reversing his earlier blanket support of the union. King backed Carlin's management reforms. I don't mean to take away from the King-Carlin record a governor deserves credit for his good appointees but it's hard to escape the conclusion that it was Carlin's agenda and not King's that carried the day. The same pattern emerges in Administration and Finance.

King's original appointee was his old Massport friend Edward Hanley, whose first budget after the passage of Proposition 2'2 had a normal increase in state spending and almost no new funds for local aid. That budget was laughed off Beacon Hill. Hanley was replaced by David Bartley, and King's performance turned around completely. Bartley and the legislative leadership agreed on a generous increase in local aid. ajid did so in advance of town and city budget decisions.

Under Bartley, the state took major steps toward management reform. He persuaded the Legislature to adopt a plan setting comnetitive salaries for state managers and giving the governor needed flexibility in setting management staffing. The point is, more often than not King's Cabinet set his agenda for him. In contrast. Michael S.

Dukakis will set his own priorities and appoint a cabinet that will carry out his agenda. Edward Moscovltch is vice president Jor regional economics at Data Resources Inc. New post for The Globe's Phelps automakers because of a slight but growing upturn in sales and the efficiencies and payroll cuts that are in place. So far in 1982, the major automakers have profits of $510.8 million. Analysts said they expect GM, with profits of $817.7 million for the first nine months of 1982, to end the year with a profit of near $1 billion.

GM would earn at least $110 million and possibly more than $150 million for the fourth quarter, they said. GM earned just $333 million in 1981 compared with $2.89 billion in 1979. Results for 1982 will be helped by record earnings for its finance and insurance subsidiary, General Motors Acceptance and income tax credits. Ford, the most troubled automaker this year in earnings, will be in the red for both the last quarter and the year, analysts agreed. Ford, which lost $422.5 million in the first nine months of 1982, could lose at least $150 million in the fourth quarter, according to Merrill Lynch, Pierce, Fenner Smith Inc.

in New York. Healy put the loss at about $180 million. ROBERT JH. PHELPS Affiliated vice president In the months to come, ViewtronNew England, headed by Phelps, will give demonstrations of the videotex system in its Newton Corner offices to advertisers, advertising agencies; educational, medical and cultural groups. Phelps, named assistant to the publisher last April, had been executive editor of The Globe since February 1979.

He had previously served as managing editor of the morning Globe for three years. He came to The Globe as assistant managing editor in 1974 from The New York Times, where he had worked for nearly 20 years. He was editor of. that paper's Washington bureau from 1965 to 1974. He and his wife, live In J.IIMIJJJ.M''IMU...

I I. IIHII1II. IIJIH 1 7 si Associated Press DETROIT For the first time in three years, the domestic auto industry today will close the books on a profitable year, with 1982's results expected to top $500 million, auto industry analysts said yesterday. However, the profits don't come from booming sales of cars and truck in the United States. They come from payroll slashing, including more than 269,000 US autoworkers on indefinite layoff, income tax credits, healthy subsidiaries and streamlined factory practices at the four major US automakers.

US car sales in 1982 were an estimated 5.7 million, off about 8 percent from the already dismal level of 6.2 million in 1981. The last time the US auto industry had a profitable year, in 1979 when the four major companies earned $3.03 billion, US car sales totaled 8.3 million. Sales have been on a downward slide ever since, and the automakers lost $5.5 billion from 1980 through 1981. Meanwhile, beginning tomorrow, General Motors Corp. will offer 11.9 percent Judge OICs A Boston federal judge yesterday approved a reorganization plan for the Boston and Maine moving the railroad a step closer to being acquired by Timothy Mellon, the Connecticut man who is rebuilding New England's railroads.

US District Judge Frank J. Murray gave the railroad's creditors until Feb. 14 to accept or reject the plan, which already has the endorsement of the Interstate Commerce Commission. The plan calls for the creditors to get $45 million from the railroad and another $24.25 million from Mellon's Guilford Transportation Industries Inc. Guilford is to become the sole owner of Boston and Maine's stock.

Mellon owns the Maine Central Railroad and is negotiating to buy the Delaware and Hudson Railroad. Hay Stale gets Conrail lines In another step toward rail service for Cape Cod, the Commonwealth yesterday acquired Conrail railroad lines in Southeastern Massachusetts, thus completing the acquisition of railroad rights-of-way in that part of the state. Conrail tendered the deed to the railroad lines extending from Attleboro to Middleborough and Campcllo' and small branch lines in Randolph, Taunton. Braintree and North Abington for $1.2 million. Conrail will continue to provide freight service to Southeastern Massachusetts in conjunction with the Bay Colony Railroad, a short-line railroad selected by the state to continue service to shippers located along lines abandoned by Conrail in 1981 Robert H.

Phelps, Boston Globe assistant to the publisher and associate editor, will become vice president of Affiliated Publications Inc. effective tomorrow. Phelps' new management role was announced by William O. Taylor, Boston Globe publisher and board chairman of Affiliated, The Globe's parent corporation. Phelps, 63, will continue to serve as associate editor of The Globe, according to Thomas Winship, editor.

In his new role Phelps will continue to head up Affiliated's team studying the feasibility of developing a videotex system of transmitting information electronically to horne television sets throughout New England. The project, which Is named Viewtron-New England, has opened offices at One Gateway Center, Newton Corner. The Affiliated team headed by Phelps is working in conjunction with Knight-Ridder Newspapers to determine the feasibility of such a system in this area. Videotex is a technology that enables an individual to call up a wide variety of computer-stored information on a conventional home television screen. Information can range from all manner of news stories to encyclopedia articles, educational courses and video games.

Videotex Is, in addition, a "two-way" system, permitting users to ask questions of the computer, perform banking and bill-paying transactions, place orders through retail catalog sales operations, make travel and restaurant reservatiohs and many other such functions. Knight-Ridder plans to begin commercial operation of Its Viewtron system in Florida late next summer. It will be the first commercial videotex system offered to the general public in the United States. 4.