January 5, 1993

The North American Free Trade Agreement has not even taken effect yet, but already there is one winner: a little-known trucking company based here that has taken a different route to profitability from the rest of the industry. Most trucking companies still follow the east-west routes pioneered by the nation's railroads in the 19th century, which, for the most part, are more competitive and therefore less profitable than those crossing the north-south borders. Contract Freighters Inc. of Joplin has emerged as a renegade, one of the first truly North American trucking companies.

THE proper study of mankind is man, but molecular biologists have always assumed this goal had to be approached by studying simpler organisms first, like bacteria, worms, fruit flies and mice. To their surprise and delight, they are now learning that nature has provided a few striking short cuts in the form of mechanisms that are almost identical across the living kingdom from worms to humans. One mechanism whose universalism has only recently become clear is a vital signaling system in which cells respond to messages controlling their fate. The system works essentially the same way in determining the development of certain biological functions in worms, mice and humans. And in each case, the molecules that respond to the signals are also molecules known to cause cancer when they go awry.

Spending on health care accounted for more than 14 percent of the nation's total economic output last year, up from 13.2 percent in 1991, the Commerce Department says in a new report. The rise continues a trend that is increasingly seen as a threat to the country's economic health. The department now estimates the health-care bill for last year at $838.5 billion while it says health spending will total $939.9 billion this year. That would be an increase of 12 percent from last year's total, and the department said that medical spending would continue to go up 12 percent to 15 percent a year over the next five years "unless significant changes in the health-care system occur." By contrast the population growth for last year has been estimated at about 1.2 percent by the Census Bureau. Adding to Business Costs The latest projections are higher than those offered by the Commerce Department in December 1991, when it said health spending would rise 12 percent to 13 percent a year in the coming five years. If the new projections are accurate, health spending will easily exceed $1 trillion in 1994.

Salomon Brothers announced yesterday that it had settled multimillion-dollar compensation claims with two executives who resigned in the wake of the Treasury market bidding scandal in 1991. But the firm said it had been unable to reach agreement with two other former executives, John H. Gutfreund, the former chairman and chief executive, and Donald Feuerstein, the former general counsel.

NEW YORK CITY DINKINS CITES HIS ACCOMPLISHMENTS In a 43-minute State of the City address, Mayor Dinkins declared that New York City was a safer, more just and more fiscally secure place than when he took office -- despite a severe recession that has hampered his government. In a speech that served to lay the groundwork for his re-election campaign, the Mayor defended his record, saying he had delivered on his 1989 campaign promises to be tough on crime and to be a sound fiscal steward. A1. THE LIMITS OF COMPASSION The scale of the initiatives proposed by Mayor Dinkins in his State of the City address demonstrates the large gap between what he would like to do for many poor and working-class New Yorkers and what the constraints of the city's fiscal circumstances will allow him to do. News Analysis, B2. NOMINEE FOR SCHOOL CONSTRUCTION JOB A former New York City construction, housing and planning official is the leading candidate to head the city's School Construction Authority, officials say. Barry Light would head an authority created in 1988 to cut red tape that for years had delayed construction of new schools. B3. 11-year-old girl is shot and wounded in Bronx housing project. B3. New York City organization helps promote family planning throughout the world. B3. Strike by building maintenance workers is on hold, for now. B3. REGION SHOWING MERCY TO DYING INMATES With AIDS now the single greatest cause of death in the New York State prison system, a new state medical parole program may lead to the annual release of about 25 terminally ill prisoners who have the disease. But critics say the early release program is being set at a cruel trickle rather than some larger, more merciful flow needed to deal with the prisons' appalling rise in AIDS fatalities. A1. ALTERNATIVE TO CUOMO'S MEDICAID PLAN More than a year after Governor Cuomo proposed a state takeover of local Medicaid costs, Senate Republican leaders are poised to offer an alternative plan that would force deep cuts in Medicaid by tying growth in the program to the rise in health-care costs. Unlike Mr. Cuomo's plan, the Republican proposal would not require local governments to cede a share of local tax revenues to the state. B5. SENATE AIDE RESIGNS BEFORE BUDGET TALKS Just as the New York State Legislature is preparing for a difficult session of budget negotiations, the top aide to the Senate majority leader has announced that he had resigned to work for a New York City hospital and medical school. Paul F. Macielak, co-counsel to Senator Ralph J. Marino and a top health-care negotiator for the Republicans who control the Senate, says he will join New York Hospital-Cornell Medical Center as a vice president and vice provost later this month. B5. FOCUS ON GLEN RIDGE CASE WITNESS The Glen Ridge sex assault trial has resumed after an 11-day recess with a defense lawyer attempting to discredit a prosecution psychiatrist by dwelling on his fees as an expert witness in the case. B5. Neediest Cases B3 Chronicle B4 Our Towns by Evelyn Nieves B5