January 31, 1981

Notices of fines totaling $4.2 million have been mailed in recent days to thousands of homes and industries in northern New Jersey in the first concerted campaign by water companies to stop violations of a four-month-old water rationing plan covering six counties. The Hackensack Water Company sent out notices of the largest amount of penalties among the four major suppliers involved - $2.2 million to nearly 7,800 homes and businesses. Newark's Water Department follows with $1.3 million. The payments will go to the state, which has yet to decide how to use them.

After 13 hours of talks, the Government and leaders of the Solidarity trade union movement reported agreement early this morning on two of the three major issues that had caused strikes throughout the country. At a news conference at 4 A.M., exhausted spokesmen for the two sides said they had agreed on a formula for a shortened workweek. While accepting the principle of a 40-hour workweek, the Government would make three out of every four Saturdays nonworking days this year - or one more a month than the Government wanted and one less than the union organization demanded. The exact allocation of the Saturdays to be taken off would be left to the discretion of individual enterprises.

With a rare fervor for a city accustomed to spectacle, New York lionized the freed American hostages yesterday in a torrent of ticker tape, cheers and patriotism. Hundreds of thousands of people lined the confined streets of lower Manhattan as 21 of the 52 Americans who were released from Iran 11 days ago moved up a wind-stung stretch of Broadway in a slow procession of open limousines. By the thousands, people craned from windows and stood perilously on the parapets of buildings that form the canyons of the city's financial district. And as they went from the Battery to City Hall, the former hostages rode a sea of yellow ribbons and vinyl American flags while tape and paper fluttered down upon them.

The Reagan Administration, eager to turn public attention back to the the President's economic program, is unenthusiastic about prolonged investigations of the Iranian hostage crisis, a senior White House official said today. Moreover, Mr. Reagan is determined not to spend political capital winning public approval for the agreement that the Carter Administration negotiated to win the release of the Americans held hostage in Iran for more than 14 months, the official said in an interview. The Administration's position on the hostage issue reflects growing debate in Congress and legal circles over the release agreement. The White House position has been that the Government will meet the main obligations incurred by the Carter Administration, but Mr. Reagan and his spokesmen have carefully avoided any promise that the United States will live up to every detail.

The index of leading economic indicators fell 0.8 percent in December after rising for six straight months, the Commerce Department reported. Most economists regarded the single-month decline in the index, which is designed to forecast future economic trends, as inconclusive. Also, the Labor Department said that productivity - output per worker - fell at a sharp 1.9 percent annual rate in the fourth quarter. (Page 29.) The prime lending rate was cut to 19 1/2 percent from 20 percent by Citibank and United California Bank. The Federal Reserve announced that the nation's basic money supply declined a modest $500 million, adding fuel to predictions that interest rates would continue to decline gradually. (29.)