December 17, 1991

The Republicans who control the New York State Senate set up today a major confrontation with Gov. Mario M. Cuomo over the state budget, even as his political aides let it be known that they had gathered the documents needed for him to enter the Presidential primary in New Hampshire before Friday's deadline. The Republicans said that if the Democratic Governor had not reached a budget agreement with them by Tuesday, which seemed unlikely, they would pass their own plan to close a nearly $5 billion gap in the state budget. That would deepen the fiscal stalemate, which Mr. Cuomo has said he needs to resolve before he can announce a Presidential candidacy.

After three months of negligible change, industrial output skidded four-tenths of 1 percent in November, suggesting that the economy may now be contracting, Federal Reserve figures showed today. Although the automotive sector was particularly weak, the decline was broadly based, and analysts said it made further cuts in interest rates increasingly likely when the Federal Reserve's Open Market Committee meets Tuesday for its last regularly scheduled session on monetary strategy this year.

The Economy A new pessimism on the economy is evident in Alan Greenspan's recent comments, suggesting that the chairman of the Federal Reserve now believes that new efforts to lower interest rates will not necessarily revive the economy, as they have in the past. So additional measures might have to be tried, like Federal spending or tax cuts. News Analysis. [ Page A1. ]

The Canadian Government announced today that it had agreed in effect to grant political domain over 770,000 square miles, an area equal to a fifth of Canada, to the 17,500 Eskimos who live there. Under the agreement, the Government accepted the creation of a new political subdivision in Canada to be known as Nunavut, an Eskimo term meaning "our land," and approved carving it out of the eastern reaches of what is now known as the Northwest Territories. The Eskimos hope that Nunavut will eventually become a province, but for the time being it is to have territorial status.

The Maxwell Communication Corporation, the publicly held corporate flagship of Robert Maxwell, tonight became the latest domino to fall in his crumbling publishing empire when it announced that it had filed for bankruptcy protection from creditors in New York. In a statement issued late tonight, the company, which owns several American businesses -- including Macmillan Inc., the big publishing house -- said an important reason its board had decided to seek protection in the United States was because "the bulk of its revenue and operating profit is generated by businesses located in the United States."