January 30, 1991

Federal and New York City prosecutors are investigating a Kentucky company that has obtained contracts worth at least $40 million to install water meters in New York and other cities, law-enforcement officials said last night. In New York City the inquiry is focusing on how the company, Vanguard Meter Service Inc., of Owensboro, Ky., came to dominate a program to install 630,000 meters in the city. So far, the company has won 22 of the 32 contracts that the city has awarded.

THE ECONOMY The Federal bank insurance program should borrow from the Treasury and pay taxpayers back later to head off insolvency, the director of the Congressional Budget Office proposed. [ Page D1. ] Orders to factories for durable goods climbed 4.4 percent in December, the Commerce Department reported. [ D1. ] Consumer confidence fell again in January, the Conference Board reported. [ D2. ] Among Bush's comments on the economy in his State of the Union address, he said interest rates should be lower and called for a commission to study a cut in the capital gains tax. [ A1. ] Real estate taxes in New York City could rise far more than is clear from what has been outlined. [ A1. ] The White House has waived the legal requirement that Federal projects be assessed for their environmental impact. [ A14. ] The U.S. has halted a big part of a grain reserve program started in the 1970's to help stabilize prices. [ A16. ] COMPANIES Honda said it would trim production at three assembly plants, including its Marysville, Ohio, factory. [ D1. ] Intel plans to spend as much as $1 billion on new plants and equipment this year, in a bold move to stay ahead of rivals. [ D1. ] The U.S. and its allies are relying heavily on civilian employees sent to the Persian Gulf by military contractors. [ D2. ] T.W.A. is pleading hardship to the Government, saying it needs the $445 million it would get selling its London routes. [ D2. ] Commodore reported more than a threefold gain in earnings. Unisys and Control Data reported losses. [ D4. ] USX said its earnings rose 9.4 percent, largely as a result of improved profitability at Marathon Oil. [ D5. ] RJR Nabisco increased the size of an exchange offer for its debt, citing strong interest. [ D7. ] Hilton Hotels said it planned to apply for a license to operate a hotel and casino in Atlantic City. [ D4. ] The publisher of The New York Times said talks had failed to resolve differences with a union about running a new plant. [ B3. ] Four prominent talent agents are leaving William Morris to join International Creative Management. [ C9. ] INTERNATIONAL The U.S., Mexico and Canada have reached agreement to include Canada in negotiations toward a continentwide North American free-trade zone, diplomats and trade officials said. [ D1. ] In Czechoslovakia, retail prices have almost doubled in the month since price controls were lifted on most goods. [ A5. ] BUSINESS TECHNOLOGY Equipment suppliers are diagnosing customer problems from service centers hundreds or thousands of miles away. [ D6. ] MARKETS Stock prices changed little in slow trading, with the Dow gaining 8.16, to 2,662.62. [ D8. ] Treasury securities prices rose. [ D7. ] Crude oil gained 89 cents, to $21.85, on a new wave of war jitters. [ D14. ] The dollar closed higher and gold prices fell. [ D14. ] TODAY'S COLUMNS Mutual fund investors flocked back to stock funds when war broke out, fund managers said. Floyd Norris: Market Place. [ D1. ] To Soviet citizens, the confiscation of 50- and 100-ruble notes may seem further proof that perestroika is just another word for nothing left to lose. Peter Passell: Economic Scene. [ D2. ] Travel advertisers have substantially cut back spending because of the war. Kim Foltz: Advertising. [ D15. ]

Pledging a year of keeping his promises to New Jersey, Gov. Jim Florio presented a $14.3 billion 1992 budget to the State Legislature today that he said would ease property taxes, shrink government, and assist education at a time of fiscal austerity. In his formal budget message, the Governor repeated his conviction that the $2.8 billion in higher taxes enacted last year would now bring benefits for residents and leave New Jersey healthier and stronger in years to come. He also repeated his promise not to raise taxes this year.

Two cancer patients yesterday became the first people to receive gene therapy in an attempt to defeat otherwise incurable tumors. In a simple procedure that lasted barely 20 minutes, the patients, a 29-year-old woman and a 42-year-old man, were each infused with about 100 million white blood cells. The cells enfolded a genetically engineered copy of a gene that makes a potent anti-cancer enzyme.

In New York, as the budget crisis deepens, officials are facing one of their least favorite questions: how much tax revenue should be squeezed from the state's citizens and companies? In New Jersey, Gov. Jim Florio told the State Legislature that he would balance the 1992 budget, even at a time of weak revenues. He promised not to raise taxes. Articles, pages B1 and B2.