January 22, 1981

The economy was stronger than expected in the fourth quarter, and economists said that a decline in the first quarter decline was now unlikely. The Commerce Department reported that the economy grew at a 5 percent annual rate in the last quarter and that the G.N.P. was almost exactly the size it was a year earlier, after adjustment for inflation. The fourth quarter growth is expected to intensify the debate over the timing of a tax cut. (Page D1.) Taxes should not be cut as sharply as the 30 percent proposed by President Reagan, and any reduction should be stretched over a period exceeding three years, Arthur F. Burns told the Senate Budget Committee. Meanwhile, Mr. Reagan's budget director, David A. Stockman, said that an economic strategy ''based on temporizing and gradualism'' was ''a recipe for failure.'' He promised ''a fullthrottle, four-year plan'' that would jolt the economy. (D1.)

At a board meeting of the New York Life Insurance Company yesterday, Donald K. Ross, 55 years old, was elected chairman and chief executive officer, effective May 20. He will succeed R. Manning Brown, who will step down at the mandatory retirement age of 65 after 30 years with the big New York-based insurer. Mr. Ross will be succeeded as president and chief administrative officer by Jacob R. Underhill, 54. ''Our business is pretty good, and we had an excellent year in individual life sales last year,'' Mr. Ross said yesterday. ''Individual life is the biggest piece of what we do, but the prospects in the individual annuity and group pension areas are also very attractive. However, our net gains may not be as good as 1979 because the group business was not as good as in 1979.''

''We are not kidding, although I know it is hard to convince people in the depth of winter that there is a drought when you don't have cow bones bleaching on 42d Street in the noonday sun,'' said Francis X. McArdle, Commissioner of Environmental Protection. His agency is in charge of enforcing the drought emergency announced earlier this week by Mayor Koch. ''If we don't work together, then we will work alone - and the consequences of enforcement become greater when cooperation does not work,'' he added, poking the air for emphasis. One of the most difficult aspects of Mr. McArdle's job now is to convince the public that with the reservoirs at 31 percent of capacity instead of the normal 88 percent at this time of year, water conservation is imperative.

Transcript of Carter's remarks at Rhein-Main Air Base A8 Diplomats say marine guard's ac- tions enabled 5 to escape A9 Hostage to parents: 'Hello, is this Krakow Store?' A9 Transcript of Sgt. Sickmann's first call home to Missouri A9 Good grooming is a priority for freed Americans A10 New U.S. rules provide benefits for former hostages A11 Daughter of former hostage travels to Wiesbaden A11 Christopher leaves State Depart- ment on flamboyant note A13 Canadian tells how Americans' es- cape was planned A13 International Soviet dispels hopes it will halt whaling A3 Afghan rebels reported to obtain some advanced weapons A4 Around the World A5 Two Greek publishers persevere in their muckraking efforts A6 U.S. envoy in Salvador disputes report on killing of 4 A14 Peking's warnings to U.S. on Tai- wan seen as reflecting anxiety A16 In Canadian northwest, assimila- tion befalls the Dogrib tribe A18 Innovative fishermen in India try out new crafts: motorboats A19 Former Premier Ecevit of Turkey returning to journalism A20 Government/Politics Hundreds of ticket holders angry at being locked out of parties B7 At Reagan White House, Coolidge and Eisenhower are 'in' B8 General Direction of bullet is at issue in Tarnower murder trial B2 Around the Nation B6 Three girls in busing dispute en- roll in private school B6 The Home Section Home The rooms where writers write C1 A 90-ton sculpture over a can- yon? They'll call it home C10 New fashion style triumphs in capital C1 Insuring medical aid if parents are absent C1 Hers C2 Helpful Hardware C2 Home Beat C3 How to buy and use portable heat- ers C3 Home Improvement C4 Paper and clay in a sculpture show C5 Design Notebook C6 Water-saving tips during the drought C6 A Victorian auction for eclectic tastes C7 Mudd Club regulars celebrate inaugural C8 Calendar of Events C9 Gardening C11 Health/Science Cell cultures used in disease study derived from monkeys A23 Industry/Labor Il Progresso newspaper sold to group of Italian investors B4 Arts/Entertainment Leo Smit, pianist, pairs Mozart's letters and music C12 Indiana students will make music in New York C13 Christo Central Park art project provokes discussion C14 The Bard is lyricist for musical "Shakespeare's Cabaret" C15 Many authors switching from one publisher to another C15 Ezra Pound's writing on modern art is discussed C17 "The Time Falling Bodies Take to Light" is reviewed C18 Ice Capades open at Garden C20 Obituaries Ruth T. Costantino, president of art gallery B12 B2 Sports Dave Anderson on Raiders' bomb scare B14 Super Bowl Notebook B14 Virginia wins 15th in row B14 Nets defeat SuperSonics in over- time, 126-122 B15 Rift among the Eagles is detected B15 Ray Guy plays key role as Raider punter B15 Jets rout Rangers, 5-1 B15 St. John's beats Seton Hall, 73-62 B18 Bossy of Islanders is taking pres- sures in stride B20 Features/Notes Issue and Debate: Should U.S. share revenue with states? B8 Notes on People B11 Going Out Guide C16 Editorials/Letters/Op-Ed Editorials A26 From rage to reason on Iran The high price of hating Agee The editorial notebook Letters A26 William Safire: grading Reagan's inaugural address A27 Anthony Lewis: choices for the U.S. in Angola A27 Richard D. Godown: should the I.R.S. call the tune? A27 Kenneth Lieberthal: how the U.S. should deal with China A27

The Reagan Administration said today that it was reserving judgment on the agreements with Iran for release of the 52 American hostages that were negotiated in the last hours of the Carter Administration. Both White House and State Department spokesmen for the day-old Administration said that at least several days were needed to study the complex set of documents that led to the release of the hostages yesterday. William J. Dyess, the acting State Department spokesman, said that the Reagan Administration was ''not in a position to characterize'' the accords, which, he said, were ''long, detailed and have many financial and legal ramifications.'' ''The Reagan Administration does not want to commit itself to follow through without having had a chance of going over the agreement,'' Mr. Dyess said on instructions from Alexander M. Haig Jr.,who was confirmed today as Secretary of State.