August 31, 1991

The new heads of the K.G.B. and the Soviet defense forces announced plans today to reform their organizations, but each insisted on the need to keep them from fragmenting. Vadim V. Bakatin, the head of the K.G.B. said at a press conference that he would ban the use of secret informers, as part of a move to turn the once-fearsome watchdog of the Communist state into a traditional intelligence agency, operating within the strict limits of the law.

The demise of Communism that followed the failure of last week's coup is evident but hardly pronounced in this westernmost outpost of Soviet military power. This city and the surrounding area that make up Kaliningrad Oblast is an isolated region so dominated by the army and navy that it has all the air of a military reservation.

In a predawn raid that lasted just three minutes, Federal assault teams stormed a prison cellblock today, freed 9 hostages and took custody of the 121 inmates who rebelled 10 days ago in an effort to block their deportation to Cuba. The hostages, seven men and two women, barricaded themselves in a room with mattresses once the assault began and escaped injury, an Immigration and Naturalization Service official said. One of the Cuban detainees suffered minor injuries in the assault, on the Talladega Federal Correctional Institution. The operation was carried out without a shot being fired, officials said, although nonlethal percussion explosives were apparently used.

The crash that killed five passengers on a New York subway train this week raised a question asked repeatedly after transit disasters: Why does the Federal Government, which contributes hundreds of millions of dollars a year to local subway systems, do almost nothing to insure that they are operated safely? Even before the crash, there were calls for more aggressive supervision of transit safety. And at the very least, the accident on the Lexington Avenue line seems likely to add force to calls for Federal regulations on alcohol and drug tests for transit workers. The motorman is accused of driving the train while drunk, and evidence mounted yesterday that he has a history of alcohol abuse. [ Page 25. ]

After a week of confusing signals about the American economy, a pattern appears to be emerging, one that shows strength in manufacturing but weakness in important service sectors like retailing, real estate and financial services. The strength in manufacturing was clearly evident in yesterday's Commerce Department report that the Government's index of leading indicators had jumped 1.2 percent, the largest monthly increase in three years.