The News Journal from Wilmington, Delaware • Page 1

MMHG JOURNAL A GANNETT NEWSPAPER DELAWARE THURSDAY, OCTOBER 18, 1979 VOLUME 47, NUMBER 205 20 CENTS Wilmington Trust Anticipates a $7 Million Securities Loss share. Last year, earnings dropped 14.5 percent for the year, to $5.50 per share. The bank paid $3.20 in dividends. Taylor said the bank would take the proceeds of securities sales and invest them in a pool of money market assets, thus taking advantage of short-term high interest rates, for greater investment flexibility in the See LOSS Page 2, Col. 6 securities it plans to sell by year's end.

Those securities, mostly fixed-income bonds, have dropped steadily in value as interest rates have risen. By selling them, the bank will free funds to invest in higher-yielding assets such as commercial loans. Unlike most banks, which depend on commercial loans for their bread-and-butter earnings, Wilmington Trust has heavily invested in bonds. Under accounting rules, it losses backwards over periods when the bank reported taxable income, will reduce the net loss from those sales to $2.8 million, or $1.40 a share, he said. In the third-quarter results reported today, net income per share after securities transactions was 94 cents, a 28 percent decline over the year-ago period, For the nine-month period, earnings declined about 28 percent over the same period last year, to $2 94 per By MICHELLE OSBORN Wilmington Trust Delaware's largest bank, will take a plunge into the red this quarter and will forego its year-end extra dividend of 40 cents per share of common stock, according to Bernard J.

Taylor II, the bank's new president. The fourth-quarter loss is projected in a plan Taylor announced today. The plan calls for the bank to sell large amounts of low-yielding Raucous Revelry in Pirate Housing Is Up But Industry Fears a Crash hasn't had to recognize the losses on those bonds on its income statement until the bonds are sold. The market value of securities held on Sept. 30 this year was about 8.4 percent less than the book value.

A year ago, the difference was approximately 4.7 percent. So far in the fourth quarter, the bank has already sold $53 million in securities in its portfolio-restructuring plan, Taylor said. Tax-loss carrybacks, a way of applying land Ap Wirepholo Orioles. than 100 people celebrations were considerably Page 2.1. Open The school was then given 60 days to comply with state requirements in order to stay open.

Kenneth M. Mazik, the school's executive director, said he would comply, and in August gave the state information he felt would earn the school its license. But after studying the information, the state announced on Oct. 3 that it would hold firm in its decision to deny Au Clair a license. Maizk's lawyer.

L. Vincent See PARENTS Page 3, Col. I V' Itasi'hiill fans in Pittsburgh i-elchratr their team's orld Series victory lust night over the Italliniore vtere arrested early today, most on eh urges of disorderly conduct, but authorities in Pittsburgh said the lamer than those that followed the Pirates4 last championship eight years ngo. World Series stories on Parents Try to Keep Au Clair debt securities and restructure its asset holdings to take advantage of higher interest rates, he said. Taylor said the bank expects to finish with a profit for the year, but it is "too early in the game" to forecast 1979 earnings.

The bank also released third-quarter earnings reporting a decline of 27.6 percent in net income for the period ending Sept. 30. Taylor said the bank will record a loss of about $7 million on the children," he said. Greenman said the group has no definite plans, but will do whatever can to persuade the state to keep the school open and "hopefully lead the termination of what we feel is ridiculous situation." Several parents mentioned that they may consider taking legal action against the state for what they considered unnecessary interference in their children's welfare. The group was organized Sunday when 25 parents made a routine visit to the school, Greenman said.

iMark Them Tardy Delaware state agencies are behind schedule in naming the affirmative action officers ordered by Gov. du Pont. Page 14. i Gas Rationing The House is scheduled to vote on a Senate-approved bill that would give the president power to ration gas if a 20 percent shortage developed. Page 4.

Royal Storm Princess Margaret's reference to Irish "pigs" or "jigs" there's a difference of opinion just which she mentioned in a Chicago conversation has spread rapidly through the newspapers of the world. Page 72. Death of a Wit S. J. Perelman, the man who gave the Marx Brothers some of their funniest lines and made millions of others laugh with his New Yorker essays, is dead.

Page 42. Metric Show The U.S. Metric Board is holding hearings in Michigan to promote conversion of miles to kilometers and quarts to liters before an apathetic public. Page 16. Lawyer Lobby Delaware's trial lawyers are forming a political action group to take aim at the insurance industry.

Page 9. 4 I Au Clair, located near St. Georges, is home for 31 autistic children from Maryland, New Jersey, New York and Massachusetts. It became well known as the home of Silk Stockings, a record-breaking harness race horse whose earnings supposedly helped keep the school operating. In June, after a seven-month investigation of the school by the attorney general's office, and the Division of Social Services, Delaware denied the school a new license.

By EILEEN ALT POWELL WASHINGTON (AP) The construction of new houses and the sale of existing homes have remained strong into the fall, but housing experts see a precipitous drop on the horizon. What will soon turn things around, analysts said yesterday, are mortgage interest rates soaring to 14 percent or more and a severe shortage of loan money. The predictions came as the government and private industry announced surprisingly strong housing figures for September: The Commerce Department said new housing construction rose 4.2 percent last month to an annual rate of 1.88 million units. Much of the strength was attributed to a 25 percent jump in starts on new apartment units, many of them federally subsidized. And Jack Carlson, chief economist for the National Association of Realtors, said sales of existing homes rose nearly 3 percent in September to an annual rate of 3.95 million units.

"This could be our second best sales year ever, second only to 1978," Carlson said. Meantime, Federal Reserve Board Chairman Paul A. Volcker warned that Americans will have to accept a lower standard of living if inflation is to be controlled. Volcker told the congressional Joint Economic Committee that if people "try to catch up with the existing standard of living or try to increase their standard of living, up goes the price level some more." The September housing figures came as a surprise to many analysts. Housing experts had expected both starts and sales to fall off sharply by now because of the economic downturn that began in the year's second quarter.

But demand has remained strong despite record high mortgage rates, now in excess of 1 1 percent nationwide. Carlson attributed the continued Kit if V' J' AP Wirephofo housing demand to the maturing of the "baby boom" generation, which is in the age range for many first-home purchases, and to inflation, which has driven people to buy real estate as a tax shelter. What could dampen the demand is the Federal Reserve's Oct. 6 announcement that it was raising a key interest rate and changing the way it controls monetary growth. The board's policy change comes as savings and loan associations are reporting a decline in deposits and.

thus, a loss of money they could lend as mortgages. The National Association of Home Builders is so concerned about the Federal Reserve's action that it announced yesterday it is calling a "summit conference." probably next month, to discuss the situation. "This policy could lead to a deeper and more prolonged national recession," the industry group said in a statement. It also predicted "a catastrophic drop in new home construction, as much as 1 million units lower than 1978." New construction last year totaled 2 million units, slightly below the level experts say is needed to meet demand and replace worn-out housing. Treasury Secretary G.

William 'Miller, who testified with Volcker, said "housing is nervous" because of uncertainty in the money markets resulting from the Federal Reserve credit-tightening policies. But he added that if the policy works to dampen inflation expectations rapidly, "then housing does not have to go into a tailspin." He added, "But it's a worry." Experts including Carlson and Richard Marcis, deputy director for economic research at the Federal Home Loan Bank Board, predict housing starts will fall to a range of 1.5 million to 1.6 million next year. Marcis said the bank board, which oversees savings and loan opera-See HOUSING Page 4, Col. 3 2 Diamond Officials Get Year in Jail By LARRY NAGENGAST The owner of the Diamond Chemical Supply Co. and his former partner were each sentenced today to one year in jail for crimes uncovered during a major state Department of Justice investigation into the purchasing practices of the defunct Wilmington Board of Education.

Superior Court Judge Andrew D. Christie also fined the janitorial supply company $10,000 and sentenced two former school maintenance supervisors to 90-day prison terms for taking company bribes. Diamond was a major supplier to the old city school board. The state charged that Diamond, and its officers bribed school officials to recommend the purchase of Diamond products and that merchandise delivered to the schools was returned to Diamond's warehouse. The investigators also found that Diamond tried to cover up its dealings by falsifying business records and tax returns.

Richard L. Ventresca. 40, of the 1500 block Woodsdale Road, Belle-vue Mpnor, pleaded guilty last April to three misdemeanors falsifying business records, making a false tax return and filing a false tax return. Christie gave Ventresca a six-month prison term and a $500 fine for falsifying business records and the same sentence for filing a false tax return. For completing the false tax return, Christie gave Ventresca two years' probation.

Ventresca is now the sole owner of Diamond Chemical, which Christie fined $5,000 on each of two brib- See DIAMOND Page 2, Col. 3 By MARGARET KIRK Parents of autistic students at the Au Clair School have formed a committee to stop the state from closing the institution. "Our feeling as a group is unanimous in support of this school and what it tries to do," said Thomas P. Greenman of Mendham, N.J chairman of the parents' steering committee and the father of a 23-year-old Au Clair student. "We are going to do what we can do to correct the impressions that this school is not beneficial for these NEWS INSIDE Oil Protest A retired GM worker from Delaware, Lewis Eastburn, joined other protesters in Washington, DC, yesterday, holding aloft a sign that read: "Stop the high price of oil." Page 3.

Ratlarless Ben Green's homemade concrete boat is seaworthy, but someone who helped him launch it Monday stole the $7,000 worth of coins that would have financed a radar set. Page 12. Landfill Hearing Protests from Odessa residents have prompted the Delaware Solid Waste Authority to schedule a public hearing on the site chosen for a New Castle County landfill. Page 5. INDEX 54-58 34 Bridge 59 Health 11 22 People 39 59 Record.

20,40 Datebook. 13 25-33 Deaths 50 Television. 48 38 61 WEATHER TONIGHT: Mostly fair, low in the upper 40s to mid 50s. TOMORROW: Sunny and mild, high in the upper 60s to mid 70s. Details on Page 61.

it to a News correspndents in foreground watch three landing craft maneuver during yesterday's practice landing by Marines at the U.S. Naval Base on Cuantanamo Bay, Cuba. Story on Page It)..