February 9, 1977

NYS Appeals Ct orders NYC to begin paying some of holders of its $1‐billion in overdue notes within 30 days‐order meaning in effect that city will have to come up with several hundred million dollars by end of next mo; repayment schedule detailed; Appeals Ct designates Sup Ct Justice James Gibson to handle case; Rohatyn says he does not view ct decision as ‘crisis’; Mayor Beame holds decision gives city ‘breathing space’ (M)

Hustler editor and publisher Larry C Flynt on Feb 8 is found guilty in Cincinnati of engaging in organized crime and pandering to obscenity; is sentenced to 7‐25 yrs m prison and fined $10,000 on organized crime charge and 6 mos in jail and $1,000 on obscenity charge; Hustler is found guilty on both counts and is fined $10,000 for engaging in organized crime and $1,000 on obscenity charge; other defendants associated with magazine, Flynt's wife Althea Leasure Flynt, brother James Flynt and co vp Al Van Schaik, are found not guilty; trial is considered major test of application of community obscenity standards; Flynt's atty Herald Price Fahringer maintained that Simon Leis Jr, Hamilton County prosecutor, had no jurisdiction over editorial and production operations of magazine; asserts that Flynt's conviction would mean that in future no natl publication would be safe from obscenity charges brought by any local prosecutor; illus (M)

Pres Carter outlines proposals for arms pact with USSR, which includes mutual halt to development of mobile land‐based missiles and prior notice by both sides of missile test launches, news conf, Washington (S)

Pres Carter hints broadly in Feb 8 news conf that he will keep campaign promise to ask Cong to end Fed regulation of some natural‐gas prices and take steps to prevent gas producers from making ‘unwarranted profits’ (M)

Sen Foreign Relations Com opens hearings on nomination of Paul C Warnke as Carter's arms control chief; Warnke stresses he will seek accords fully consistent with US natl security interests; doubts on him are raised by Sens Robert P Griffin and John C Danforth, but overwhelming com majority seems to welcome nomination; Sens John Sparkman, com chmn, Frank Church and Jacob K Javits question or comment; much of this concerns Coalition for Dem Majority memo, which Warnke says does not correctly give his views; Warnke illus (M)