LEAD: The nation's economy grew at a rate of 1.7 percent in the second quarter, while inflation worsened, the Commerce Department said today.

G.N.P. Rate Up by 1.7% For Quarter

LEAD: Lance H. Wilson, a close friend and former top aide to Housing Secretary Samuel R. Pierce Jr. in the early years of the Reagan Administration, used his experience and contacts in the Department of Housing and Urban Development to reap great profits after returning to private life.

Pierce Aide Profited Greatly After Leaving Post at H.U.D.

LEAD: When it comes to art and ''so-called works of art,'' Jesse Helms knows what he likes. At his home in Arlington, a Virginia suburb of Washington, the Senator has oil paintings of North Carolina scenes: a man sitting at a table with his hands folded in prayer over a Bible, a summer home he once owned on Lake Gaston and a snowy scene of a pier.

Unruffled Helms Basks in Eye of Arts Storm

LEAD: Congressional conferees settled their last differences ang gave final approval to the legislation to rescue the savings industry. Page D1.

Agreement on Bailout Bill

LEAD: The Congressional subcommittee investigating the Internal Revenue Service heard new accounts of misconduct today, while the panel's chairman accused agency officials of impeding the inquiry.

Chief of Panel Says I.R.S. Tried to Impede Its Inquiry

LEAD: THE Hudson River Valley, the home of 19 wineries within a two-and-a-half-hour drive from New York City, is the oldest wine-producing region in the United States. This year is especially significant because the Brotherhood Winery in Washingtonville, the nation's oldest active winery, is observing its 150th anniversary.

Exploring a Valley of Vineyards

LEAD: The Bristol-Myers Company and the Squibb Corporation said yesterday that they had agreed to merge in a deal that would create the second-largest pharmaceutical company in the world.

Article 241489 -- No Title

Business Digest

LEAD: When the tornado that spun across western Connecticut on July 10 racketed through Hamden like a malevolent freight train, some residents were able to pinpoint the exact time it hit: 5:38 P.M.

Our Towns; After Tornado, So Many Lives At a Standstill

LEAD: After more than two weeks of debate, House and Senate conferees settled their last differences and gave final approval tonight to the bailout legislation that will spend $166 billion over the next 10 years to shut, liquidate and sell hundreds of insolvent savings and loan associations.

Conferees Agree on Savings Bailout Bill

LEAD: A promising experimental drug for the treatment of AIDS has produced improvements in patients without causing toxic side effects, a new study has shown.

New Drug for AIDS Yields Improvements In Small First Studies

LEAD:  'Great Gulf' Between Races Despite Blacks' Gains  The largest study yet of postwar social and economic trends among blacks found that their gains still left them far behind whites. Page A6.  Conviction in Palme Killing  A 42-year-old Swedish drifter was convicted of the murder of Prime Minister Olof Palme.

INSIDE

LEAD: An era has ended and a door has opened. The 10,000-member New York Athletic Club, which for 121 years has been a symbol of masculine exclusivity, has bowed to the forces of change and feminine scorn and agreed to accept women as members.

121 Years Of Men Only Ends at Club

LEAD: Felix S. Bloch, the State Department official under investigation for espionage, told the Federal Bureau of Investigation in his one brief interview that he had been paid ''a lot of money'' by the Soviet Union, an official involved in the case said yesterday.

ESPIONAGE SUSPECT REPORTEDLY TOLD F.B.I. OF PAYMENT

LEAD: The Soviet legislature today endorsed the plan of two Baltic republics to embark next year on the most far-reaching economic experiments this country has seen since at least the 1920's.

SOVIET PARLIAMENT BACKS AUTONOMY FOR THE BALTICS

LEAD: As continental Europe's leading financial center, Frankfurt am Main already sported enough gleaming skyscapers to have been dubbed ''Mainhattan'' and ''Bankfurt'' by critics of its rapid growth. Now, however, a high-rise construction boom fed by the European Community's plans for a single borderless market by the end of 1992 is rapidly altering the city's skyline and igniting conflict among developers, realtors and city officials.

Frankfurt's High-Rise Debate

LEAD: FROM Lake Tear of the Clouds in the Adirondack Mountains, the Hudson River flows a little more than 300 miles to the Atlantic Ocean through some of the most beautiful scenery in the world, right in the backyard of metropolitan New York. A paradox, the river is clean enough in some places for a dozen cities to drink its water, but other cities dump their treated sewage into it.

The Sights and the Delights Of the Historic Hudson

WEEKENDER GUIDE

LEAD: The Ford Motor Company announced yesterday that it had reached an agreement to purchase the Associates First Capital Corporation, a financial services company, from Paramount Communications Inc. for $3.35 billion in cash.

Paramount Agrees to Sell Unit to Ford

LEAD: After spending millions of dollars of his own money to get his name on television, there was Ronald Lauder, a Republican candidate for mayor of New York, live on three network news programs the other day.

Vienna Service Shadows Lauder Campaign

LEAD: The Chrysler Corporation today announced sweeping cost reductions that it said would save $1 billion by the end of 1990, a move necessitated by its falling share of a declining auto market.

Chrysler to Cut $1 Billion in Costs

LEAD: The House of Representatives voted tonight to kill the Midgetman nuclear missile in a dramatic repudiation of a political compromise between the White House and Congressional leaders and a severe blow to President Bush's nuclear modernization program.

House, 176-90, Votes to Scrap The Midgetman

LEAD: In 1985, Bernard B. Brodsky recalls, he received a telephone call from the secretary of a high-ranking official in the New York office of the Department of Housing and Urban Development. It was a request, he said, from Alexander Naclerio's office that he buy a seat at a $1,000-a-person campaign fund-raising dinner for Senator Alfonse M.

H.U.D. and D'Amato: Hopes for Grants Prompted Gifts

LEAD: Mayor James L. Usry and 13 other political leaders and executives here were arrested today and charged with influence peddling, corruption and official misconduct.

Mayor Arrested In Atlantic City With 13 Others

LEAD: Workers at the Nissan car and truck assembly plant in Smyrna, Tenn., today overwhelmingly rejected representation by the United Auto Workers union. The U.A.W.'s defeat portends hard times for future union organizing efforts, as well as increasing competitive pressures between United States and Japanese automakers, labor experts said.

July 28, 1989

Headlines from July 28, 1989

G.N.P. Rate Up by 1.7% For Quarter

Pierce Aide Profited Greatly After Leaving Post at H.U.D.

Unruffled Helms Basks in Eye of Arts Storm

Agreement on Bailout Bill

Chief of Panel Says I.R.S. Tried to Impede Its Inquiry

Billboard 200

Batman (Soundtrack)

The Raw & The Cooked

Hangin' Tough

Don't Be Cruel

Girl You Know It's True

Historical Context for July 28, 1989