July 28, 1992

In the five years since Mary Beth Whitehead-Gould attracted national attention by refusing to relinquish custody of the child she had borne as a surrogate mother, efforts to curb the baby-bearing industry have been gaining momentum across the nation. Last month, New York became the 18th state to sharply restrict the practice, as legislators who call it baby selling outvoted those who see it as a legitimate last hope. In many ways, the debate in New York was more emotional than most, because the surrogacy business has been more active here than in any other place in the country.

BASKETBALL BLOWOUT Croatia, considered the strongest challenger to the U.S., couldn't keep up with the American pros and lost, 103-70. REVERSAL IN VOLLEYBALL The American victory over Japan on Sunday was overturned and awarded to Japan because of an officiating mistake. SportsTuesday, page B9.

Seven months after the New York City Council expanded to 51 members, there are signs that the legislative body once derided as a rubber stamp is becoming more democratic and more powerful. Both critics and supporters of the Council say it is taking significant steps toward being the counterweight to the Mayor, virtually an equal branch of government. They say the Council was a major force in shaping the last two budgets and in setting tax policy.

It dominates its industry worldwide. Its management is highly regarded, its costs are under control and its balance sheet is extremely strong. So why is Wall Street so down on the Boeing Company? Boeing's shares, after hitting a 52-week peak of $54 in late January, have been sliding steadily. The stock closed yesterday at $39.25 on the New York Stock Exchange, down 50 cents, after the company reported flat earnings for the second quarter. Boeing said it earned $453 million, or $1.33 a share, compared with $454 million, or $1.32 a share, in last year's second quarter, when there were more shares outstanding. Revenues rose very slightly, to $7.82 billion from $7.81 billion.

The Economy The Manhattan District Attorney will seek an indictment this week against Clark Clifford, a top adviser to several Presidents, and his junior law partner, law enforcement officials say. The charges relate to allegations that the lawyers played a role in the multibillion-dollar fraud involving B.C.C.I. [ Page A1. ] Companies Goodyear Tire and Rubber's second-quarter net soared fivefold to $109.7 million, a four-year high, as a result of cost-cutting, intense marketing of new products and asset sales. [ D1. ] Dow Corning earnings tumbled 84.4 percent because of a $45 million charge related to silicone gel breast implants. [ D2. ] Mobil's net income plunged 42.7 percent as domestic refining and marketing operations lost money; Chevron reported an 8.9 percent drop. But with crude oil and natural gas prices up, ARCO's net rose 25.6 percent, and Phillips had a sixfold increase. [ D4 ] The chairman of Lloyd's of London nominated as his successor the author of a report on reforming the shaken market. [ D5. ] Wellcome Trust sold 270 million shares of Wellcome P.L.C., maker of the AIDS drug AZT, at $:8 each, raising about $4.14 billion, in the biggest private stock sale in history. [ D4. ] Honda of America plans to trim production at its two Ohio assembly plants, rather than offer cash rebates to entice buyers. [ D7. ] Canada's two troubled airlines will begin merger discussions. The carriers, Air Canada and Canadian Airlines International Ltd., have been feuding for months. [ D5. ] American Express earnings rose 21 percent to $310 million, or 63 cents a share, but pretax operating earnings dropped more than 30 percent as struggles continued in the charge card business. [ D4. ] A Litton Industries unit illegally overcharged the Government for computer services in the mid-1980's and now faces $400 million in fines, Federal District Judge Mariana Pfaelzer ruled. [ D2. ] Dime Savings Bank was told by a Massachusetts court that eviction of tenants it has acquired because of mortgage defaults would require a time-consuming procedure. [ D19. ] International In the first Democratic attack on the free-trade agreement proposed with Mexico and Canada, the House majority leader, Richard A. Gephardt, said the pact did not include adequate safeguards for workers, the environment and public health. [ D7. ] Japan's stock market fell to a six-year low, despite the Government's administration of potent medicine to reinvigorate it. [ D6. ] The head of Thai Airways is to be ousted by Thailand's new civilian Government. [ D6. ] Markets Stocks closed mixed. The Dow Jones industrial average gave up 3.51 points at 3,282.20, but in the broad market winning shares outnumbered losers 928 to 804. [ D8. ] Prices of most Treasury securities moved higher, with buying beginning in Tokyo. [ D15. ] Coffee futures prices fell sharply as mild Brazilian weather led to speculative selling. [ D16. ] The dollar settled lower. [ D16. ] Today's Columns Boeing shares have been sliding because Wall Street fears the aircraft maker will catch the airlines' maladies, even though it dominates its industry and wins high marks for its management, cost control and strong balance sheet. Market Place. [ D1. ] Russia is caught in an economic bind: how to force its giant state-owned enterprises into a market economy without bankrupting them, and President Boris N. Yeltsin's approach is to compromise. Louis Uchitelle: Economic Scene. [ D2. ] Children's rights ads are being created pro bono for the Children's Defense Fund by Fallon McElligott and Hill, Holliday, Connors, Cosmopulos. Stuart Elliott: Advertising. [ D19. ]

Coming Soon, a Space Rope Astronauts aboard the space shuttle plan to deploy a half-ton satellite tethered to the craft by a 12-mile-long wire. Science Times, page C1. The States: Down and Out States are in worse financial shape now than after any previous recession, and a new survey shows the 1993 fiscal year looks bleak. Page B6.

Like most station wagons, the mini-van is more about utility than about fantasy. Forget romance, power and style; these autos exist for grocery shopping, soccer games and weekend gardening projects. But the Nissan Motor Company, in trying for the third time to sell mini-vans in the United States, is striving to balance the two worlds to tap the apparent discontent of one category of customers. Its research detected a latent but smoldering resentment among baby boomers against driving a sluggish, boxy conveyance to fulfill family responsibilities.

Eight years after he was edged out for a gold medal in Los Angeles, four years after he failed to make the United States swimming team for Seoul, Pablo Morales finally reached the end of an Olympic pool first. His victory over Rafal Szukala of Poland today in the 100-meter butterfly was so close, decided by three-hundredths of a second, that Morales held on to the side of the pool nervously for a few seconds before turning to face the scoreboard.

The driver of a chartered bus that crashed in New Jersey on Sunday, killing six people from Brooklyn, attributed the accident to brake failure yesterday as state and Federal officials began an intense investigation into the causes. Questions arose about the safety of the steep country road where the bus rammed into two cars and burst into flames and also about the qualifications of the driver, 60-year-old Robert Campbell of Brooklyn, who officials say never underwent the medical, on-the-road and written tests required of charter bus drivers in New York.

DRIVER SAYS BRAKES FAILED The driver of a chartered bus that crashed in New Jersey on Sunday has attributed the accident to brake failure. And as state and Federal officials begin an intense investigation into the causes of the crash, questions have already arisen about the safety of the steep country road where the bus rammed into two cars and burst into flames and also about the qualifications of the driver, 60-year-old Robert Campbell of Brooklyn, who officials say never underwent all the tests required of charter bus drivers in New York. A1. LOOKING FOR RELIEF FROM THE HEAT The trip was meant to be a part of summer itself, a break from the pressing heat and the needling uncertainties too familiar in the Brooklyn neighborhood of Williamsburg. B4. Before the crash, passengers yelled: "Stop!" B4. NEW YORK CITY LAWYER SAYS HE HID MONEY FROM WIFE Harvey Myerson, a swashbuckling corporate lawyer charged with a tax-fraud conspiracy, told a jury that he had merely concealed some of his income to hide the money from his former wife. Acting as his own lawyer in his tax-fraud trial in Federal District Court in Brooklyn, Mr. Myerson told the jury that "it never entered my mind" to defraud the Internal Revenue Service of income taxes. B3. LUKEWARM STATEN ISLAND WELCOME Mayor Dinkins took the ferry across the bay to Staten Island yesterday, in an effort to learn more about both the borough and its president. But before he even got a chance to meet the people, he ran into a frosty reception from their leader. Mr. Dinkins and many of his top aides are spending the week on Staten Island, the latest stop of his campaign to convince the voters that he is the Mayor of all the people, not just the people in Manhattan. B3. REGION CUOMO REJECTS NASSAU PLAN Governor Cuomo is seeking to slam the door on a last-minute bid by Nassau County officials to change the terms of a fiscal rescue for the county that he and legislative leaders agreed to last week. The Governor insisted that he saw no reason why the accord should be revised. Nassau's bid, essentially an effort by County Executive Thomas S. Gulotta to gain more emergency spending authority in the event that he and the county Board of Supervisors cannot agree on a budget, added a note of discord to the special session of the Legislature that begins today. It was supposed to be a collegial flurry of bill passing that would help redeem lawmakers for the angry, unproductive close of session earlier this month. B5. AFTER 52 YEARS, A LAW IS USED Questions about the purchase of four automobile tires have made news in Madison and apparently made history in Connecticut. An investigation that started with the tires led to the dismissal of the police chief, apparently the first chief to be dismissed in the 52 years since a state law, permitting towns to do so for "just cause," took effect. B5. Arrest in fatal stabbing in theater. B5. Our Towns by George Judson B5

Campaigning on the West Coast, Gov. Bill Clinton preached a message of self-sufficiency and fiscal conservatism that he said should appeal to traditional Democratic constituencies as well. He called Republican efforts to characterize the Democratic ticket as liberal a "load of bull." Article, page A11.

As the deadline for filing candidate petitions drew New York's Congressional races into sharper focus yesterday, City Councilwoman Susan D. Alter became the latest white aspirant in a district drawn with minorities in mind. She is preparing a Democratic primary challenge to the black incumbent, Edolphus Towns, in a Brooklyn district that stretches from East Flatbush to East New York. All around New York State, the petition deadline forced candidates to tip their hands in a range of races, from the hot fight to fill a new seat in a largely Hispanic Brooklyn neighborhood to the effort of an old Bronx lion, former Representative Mario Biaggi, to roar again.