September 9, 1991

Momentum is building rapidly in Congress and among Federal regulators to repudiate and rewrite many laws and economic regulations that were pillars of the New Deal of the 1930's. The changes, advanced by the Bush Administration and moving quickly through Congress, which returns from its summer recess on Tuesday, represent a fundamental shift in the philosophy of regulation. Earlier in this century, rules were formulated to restrict the growth of financial powerhouses; the new view holds that conglomeration is better for the economy and helps the nation to compete internationally.

The Justice Department has expanded its investigation of the Treasury securities scandal that has shaken Salomon Brothers Inc., and prosecutors are now conducting parallel civil and criminal inquiries in Washington and New York, people involved in the case said over the weekend. A handful of criminal subpoenas have been issued, most of them directed at individual traders, and prosecutors have asked a number of Salomon executives or their lawyers for interviews, these sources said. The Federal Bureau of Investigation has also joined the inquiry, and its agents have met with representatives of the firm.

The Economy Momentum is building in Congress and among regulators to repudiate and rewrite laws and economic regulations that were pillars of the New Deal in the 1930's. The changes, advanced by the Bush Administration and moving quickly through Congress, represent a fundamental shift in the philosophy of regulation. [ Page D1. ]

Joshua and Stephen Muss may not be the closest of cousins, but they do have several things in common. Each is part of a legacy of builders in the New York area, and each feels frustration over separate construction projects planned for Brooklyn. Joshua, the head of the Muss Development Company, is trying to build a 31-story office building and hotel complex in downtown Brooklyn, while Stephen, the head of Alexander Muss & Sons, has plans for a five-building, 1,600-apartment complex in Brighton Beach.

When Wilfredo Caraballo was a young man plying the rough turf of the South Bronx, he, like many other Hispanic men, had a lot of trouble with the police, he said. "In 1973, a cop put a gun in my face and said: 'I know that face! I know that face!' "