business
; business briefs
Third quarter corporate profits rise
WASHINGTON, D.C. (AP) After-tax corporate profits rose 5.3
percent in the third quarter, their best performance since early last
year, the government reported yesterday.
The Commerce Department said businesses earned after-tax
profits at an annual rate of $144.7 billion in the third quarter after a
much smaller 0.3 percent gain in the second quarter.
It was the biggest increase since a 6.7 percent rise in the first
quarter of 1984. Since that time, profits actually fell for five straight
quarters as corporate America suffered a battering from stiff
foreign competition and the overall economic slowdown that began
in the middle of> last year.
Beryl Sprinkel, chairman of the President’s Council of Economic
Advisers, said the recent stock market rally was due in part to the
improved profit picture, not just to the belief that interest rates
were headed lower.
“We are seeing an acceleration (in economic activity) and a very
substantial increase in profits,” he said at a briefing for reporters.
The increase in the third quarter came primairly from gains
recorded by factories producing non-durable goods and businesses
engaged in retail trade.
Domestic profits of financial corporations actually went down in
the third quarter by $2OO million compared to a rise of $5.5 billion in
the second quarter.
Among the details of the profits report:
• Before-tax profits also rose 5.3 percent in the third quarter to
$232.8 billion following a 0.6 percent decline in the second quarter.
• Corporate profits, after adjusting for depreciation and for
inventories the companies had on hand, rose 7.6 percent in the third
quarter to $321.4 billion following a 2.1 percent increase in the
second quarter.
• Corporate cash flows, a new government measurement in
tended to show the funds corporations have available for invest
ment, rose 5.8 percent in the third quarter to a level of $406.5 billion.
Personal loans used to consolidate
WASHINGTON, D.C. (AP) The average size of a personal loan
from a finance company was just under $2,000 last year, with “loan
consolidation” the major reason given by borrowers for needing
the money, a trade organization reported yesterday.'
The American Financial Services Association, which represents
550 finance companies, said most unsecured loans made by U.S.
finance companies go to consumers in the 25-34 age bracket.
However, those most likely to take out a second mortgage on a
home are between 25 and 34, the report said. The average size of
second mortgages written by finance companies in 1984 was $16,-
606, it said.
The association, in its annual report, said 65 percent of all
personal loans were made to individuals with annual salaries over
$14,400 a year and that the average size of an unsecured personal
loan was $1,996.
The assocation said the most common reason borrowers give for
taking out a personal loan was to consolidate existing bills, followed
by travel, vacation and education expenses.
Govt, may limit check holding time
WASHINGTON, D.C. A bill to limit the number of days banks
can hold deposited checks before making the money available to
their customers was- approved by the House Banking Committee
yesterday.
The measure now goes to the full House, where passage is
expected, perhaps as early as next month.
“We are attempting to change the policies of the banks that play
the float game,” said Rep. John J. LaFalce, D-N.Y.
The Consumer Federation of America, Congress Watch and
Consumers Union issued a joint statement calling the committee
action, taken by voice vote, “a major victory for banking consum
ers.”
‘Banking industry representatives are opposed to the measure,
but deny their opposition is rooted in a desire to maximize interest
profits by holding customer funds a few days after the banks
themselves get credit for them.
Instead, they argue that reasonable check “holds” are necessary
to guard against the banks incurring losses if a deposited check is
subsequently dishonored a procedure even proponents of the bill
acknowledge takes several days.
Donald Ogilvie, executive vice president of the American Bank
ers Association, said the trade organization was disappointed that
the panel “reported a bill on funds availability which is needlessly
inflexible and could, ironically, be counter to the public’s conve
nience.”
Opponents of the bill have noted that banks are not required to
accept any deposit and have suggested that stringent check hold
laws could result in them simply refusing to accept some checks for
deposit if there is any question about whether they are “good.”
The bill requires the Federal Reserve to develop a system within
three years under which deposited checks would be available for
withdrawal on the next business day when drawn on a bank or other
financial institution in the same geographic area.
Owning a car:
Q What do The Beach Boys and Prince
and Bruce Springsteen and Deep Purple all
have in common?
(hint: Little Duece Coupe, Little Red
Corvette, Pink Cadillac and Highway Star)
A They all sing about an American
fixation automoblies.
In high school, while most of us who were
college-bound were scraping together mon
ey for college, our Vo-Tech counterparts
were scraping to finish souping-up their hot
rods.
By the time we are ready to leave college
and enter the real world of independence
from our parents, many of us will have
acquired a car, whether as a graduation
present or by a summer of sweating through
a job as a factory worker. That’s when we
The price of mobility rises along with the odometer of life
begin to realize the truth we delayed by
going to college that an automobile is an
addiction.
When we have access to a car, aren’t we
likely to drive three blocks, instead of
walking, in the interest of lazily saving
time?
We sneered at our Vo-Tech counterparts
in high school. We overheard them in study
halls talking about their 455 s with dual
quads and new L-60s for the back of their
Chevelle with a posi-rear and we could not
have cared less.
Maybe we had our own car (something we
paid as much for as we could with our
parents paying the balance) or maybe our
parents let us borrow their Mercury when
we had a date. Either way, we were never
fully exposed to the real cost of owning and
maintaining a car.
I borrowed $2,900 from my grandmother
in May to buy a car; I figured that since I’m
graduating in December, I’d probably have
some kind of full-time job (either in journa
lism or in a factory) at the end of the year to
start paying her back yes, with interest.
There’s expense number one.
Expense number two came before I could
even pick up the car (a 1978 VW Rabbit). I
had to pre-pay my car insurance premium
Organ transplants expensive,
but patients find financial help
By DEBBIE SKLAR
Collegian Business Writer
The costs of organ transplants are
staggering, leaving the patients won
dering how they will foot the bill for
costs not covered by insurance. How
ever, patients are usually not left in
the cold, thanks to financial help from
warm-hearted transplant centers.
John Vastyan, a spokesman at the
University’s Hershey Medical Cen
ter, said transplant centers are usual
ly willing to help transplant
recipients locate funding for their
operations.
A typical heart transplant opera
tion can cost as much as $75,000,
which the patient can pay through
private insurance, Medicare, the
Medical Assitance Exception (a
Pennsylvania state-funded pro
gram), personal funds and trust
funds set up by family and friends,
Vastyan said.
“Private insurance is the first
source for funding of heart trans
plants,” Vastyan said. “If the cost
cannot be covered entirely by the
patient’s insurance company, Medi
care is the next source.”
However, he said the establishment
of trust funds by family and friends is
a common source of additional funds.
The medical center’s policy re
quires patients to finance the entire
cost of the transplant before the oper
ation, but if insurance will not cover
Award given to PENNTAP
By JUDY FISHER
Collegian Business Writer
The Pennsylvania Technical Assis
tance Program at the University re
cently won a national award for its
work with an independent inventor
who designed a new method of aerial
photography.
The National Association of Man
agement and Technical Assistance
Centers recognized PENNTAP for
providing marketing and technical
assistance to Morris Ramsay,, of
Ramscale Inc., a Greensburg compa
ny he founded.
Ramsay began working with PEN
NTAP in 1976 after he patented a
method that converts an aerial sur
vey photograph to scale. Ramsay
said he wanted to make aerial photog
raphy less expensive and more useful
than it has been.
“They (PENNTAP) have been a
tremendous amount of help,” Ram
say said. “They gave an innovato
r / inventor a chance.”
He said that he answered an ad in
Time magazine, placed by the Penn
sylvania Department of Commerce,
which asked people with innovations
to respond. He was then referred to
PENNTAP and began working with
Edwin W. Biederman, a technical
specialist with PENNTAP.
Biederman said aerial photographs
are distorted around the edges be
cause of the camera lenses used. It is
difficult to place together square pic
tures when making ground maps of
an entire area, he said.
Ramsay’s process cures the distor
tion problems cheaper and faster
than other methods, Biederman said.
He is the one who suggested that
Ramsay talk to civil engineering pro
fessors at the University.
“The gentleman developed an idea
for the next six months. That was $256.1 just
mailed in my premium for the next six
months another $256. I’d be paying twice
that if I had it insured to drive at home. The
closer you live to a city, the more you pay
for insurance. My insurance company still
considers State College fairly rural, so I pay
less if I tell them I’m driving it here.
I had to buy new tires last month. That
was expense number three. Thank God for
pre-season sales. Two 13-inch tires cost me
$B6. Thank God for Master Card I can at
least hold off on paying for them until I’m
making some money somewhere.
Depending on the size of the wheel and
quality of the tire, tires can cost from $35 to
$135.
When I was in high school, I had a van
(but that’s an entirely irrelevant story). I
worked at the automotive center at thfe local
Sears store, so I was able to pull usable tires
out of the junk tire pile and put them on my
van at little or no charge. I would not have
been able to afford owning any vehicle in
high school if I had not worked in a garage
and been friends with the mechanics there.
Maintenance and repairs can run into
several hundred dollars, depending on the
severity of the repairs. Thus far, I’ve been
spared any real breakdowns. My clutch
all costs, either 20 percent of the cost
or $5,000 must be deposited, Vastyan
said.
He .said although the cost of a
typical heart transplant operation
may be as much as $75,000, a proce
dure such as temporarily implanting
the Penn State artificial heart will
cost another $20,000 to $25,000.
“We will do our best to recover the
cost of the procedure, but for various
reasons we may have to underwrite
some of those expenses,” Vastyan
said. “However it is not the plan of
the Hershey Medical Center to subsi
dize the cost of artificial heart trans
plantation, especially at this stage
when the operation is still considered
experimental.”
He said after the first year, the
typical heart transplant (artificial
implant excluded) will cost the recip
ient about $85,000, including post-op
eration expenses.
Vastyan said the greatest percent
age of the cost is for hospitalization
($60,000 - 80,000), pre-transplant eval
uation ($1,500 - $5,000) and medica
tion ($5,000 - 10,000); however,
surgery and the cost of finding a
donor’s heart can be as much as
$15,000.
Besides hearts, other organs with
high price tags are frequently trans
planted.
Mark Collins, public relations spe
cialist for the Pittsburgh Presbyteri
an Hospital, said the hospital’s organ
Edwin E. Biederman Jr., technical specialist with the University’s Pennsylvania
Technical Assistence Program, left, examines an aerial mapping survey with
Morris Ramsay, founder of Ramscale.
and needed someone to tell him he cal problems in a way that will en
was on the right track,” Biederman hance the firm’s ability to assume a
said. stronger competitive position, there-
PENNTAP is a service organiza
tion that offers technical, scientific
and engineering information to busi
ness, industry or government,
according to a PENNTAP brochure.
PENNTAP’s objective is to help
Pennsylvania firms solve technologi-
transplants range from $30,000 to
$lBO,OOO.
“A kidney transplant ranges from
$30;000 t 0540,000, a heart (transplant)
from $70,000 to $95,000, heart / lung
$115,000 to $150,000 and a liver from
$lOO,OOO to $180,000,” Collins said.
He said the wide range in prices of
organ transplants results from the
amount of time required in surgery,
recovery time and the amount of
post-operative care needed.
However, another cost incurred is
for the organ itself. Although organs
are donated, the costs of procurement
can be quite expensive.
“There are 110 regional procure
ment programs in the United States
whose sole job is to find organs for
recipients,” said Howard Nathan,
executive director of the Delaware
Valley Transplant Program in Phila
delphia.
Nathan said DVTP would like to
educate hospital physicians and nurs
es to look for possible donors. After
the hospital locates a potential organ
donor, they call DVTP (the procure
ment agency) which will then visit
the site to determine if the organ is
suitable for transplanting, he said.
After receiving consent from the
donor’s family, DVTP would then
immediately transport the donor or
gan to the transplant site, Nathan
said.
by improving local and state econom
ic development.
The National Association of Man
agement and Technical Assistance
Centers is an organization of more
than 60 technical assistance centers
including PENNTAP.
cable broke last month, but I was able to
replace that myself, paying $lO for a new
cable. But when I have a real job in the real
world, I probably won’t be able to take the
time to fix things myself. It would be more
cost efficient for me to let a professional
mechanic do the work; he could probably do
it in half the tirpe it would take me.
Another significant expense waiting
around the corner is gas. Right now, I drive
from zero to five miles per week. When I get
out of Happy Valley, I might be driving
anywhere from 20 to 100 miles per week just
to get to work. I’ve heard stories that,
outside of Happy Valley, things are not
within walking distance of each other.
Gas prices vary around the country.
When I visited my brother in Ohio in Sep
tember, I paid 99 cents per gallon for
regular gas. On the way to Ohio, I saw gas
prices up to $1.29 in some places. Here in
State College, I pay about $1.17 per gallon.
Depending on where you are and how far
you drive to get there, gas prices can add up
quickly.
And those of us who do not exactly drive
conservatively have another potential cost
to consider. On my way to Ohio in Septem
ber I met a very friendly Pennsylvania
state trooper on Interstate 80. Although he
The Daily Collegian
Thursday, Nov. 21, 1985
GNP jumps
a healthy
4.3 percent
WASHINGTON, D.C. (AP) - U.S.
economic growth spurted upward at a
surprisingly rapid 4.3 percent annual
rate from July through September,
the fastest pace in more than a year,
the government reported yesterday.
While the Reagan administration
hailed the increase as a “significant
acceleration” in economic activity,
private economists were not as im
pressed, contending that the added
growth during the summer may well
subtract from activity in coming
months.
The Commerce Department said
the gross national product the total
output of goods and services grew
at the fastest rate since a 7.1 percent
increase in the second quarter of 1984.
This new estimate was a full per
centage point above a 3.3 percent
government projection made last
month. While the gain was far above
what most analysts had expected,
they stressed use of caution in inter
preting the figure.
“No one should be fooled,” said
Allen Sinai, chief economist for
Shearson Lehman Brothers. “There
is little meaningful growth going on in
the economy at the present time and
little room for optimism that we have
a lasting rebound under way.”
Sinai said most of the strength
during the third quarter came from
strong consumer spending, partic
ularly on new car purchases. Spend
ing on durable goods, which includes
autos, increased at an astonishing
23.3 percent annual rate in the sum
mer.
Beryl Sprinkel, chairman of the
president’s Council of Economic Ad
visers, was much more upbeat, con
tending that the 4.3 percent growth
rate vindicated the administration’s
view that the economy is in the midst
of a substantial rebound following a
weak first half of 1985.
But private analysts noted that in
addition to consumer spending, much
of the third-quarter activity was con
centrated in growth in spending by
the federal government, up at a re
markable annual rate of 40.9 percent.
Total consumer spending grew at
an annual rate of 5.4 percent in the
third quarter. Housing construction
rose at a strong 11.5 percent annual
rate, but business investment fell at a
rate of 3.7 percent.
University Photo
The news on inflation remained
good. A GNP inflation gauge that
measures the same mix of goods and
services rose at an annual rate of 3.1
percent in the third quarter, com
pared with 3.9 percent in the second
quarter.
clocked me at about 73 mph, he only gave
me a warning since I had never been
stopped by the,police before (at least not for
speeding). He told me the fine I could have
received would have been $B6. I thought,
“Wow, that was close; I’m going to have to
be more careful.”
I lyas about five minutes from my broth
er’s house in Ohio when, from out of the
setting sun, I saw another car with pretty
flashing lights. He said I was going 68 mph
in a 45 zone. He was friendly too, but I still
had to donate $46 to the village of Orson.
This all goes to show, the more you drive,
the mdre you pay. In high school, we didn’t
need to ‘cruise’ around town on a Friday
night, it was just the thing to do. But five
years later, we need to ‘commute’ to work
to earn our living.
In another few years, when my Rabbit
dies, it will be time to look at new cars. With
financing charges, it could be anywhere
from $B,OOO to $16,000. So if I can’t find a job
in journalism when I graduate, maybe I can
get into used cars and make myself a good
deal.
Scott Alderfer is a senior majoring in
journalism and-a business writer for The
Daily Collegian who has a promising future
in used car sales.
Real GNp T \
/ to \
$1 .689 \
TrHfion l
!
i
'
4.3%
3rd Quarter
Source:
U.S. Commerce Dept.
Alcohol task force
to release advice
The University President’s Task
Force on Alcohol will release its
final recommendations and pre
sent its proposals to University
President Bryce Jordan this af
ternoon, a task force co-chairman
said.
M. Lee Upcraft, division direc
tor of counseling and health serv
ices, said he and Undergraduate
Student Government President
David Rosenblatt, also a task
force co-chairman, will explain
the recommendations and answer
Jordan’s questions on the propo
sals.
Jordan established the task
force last February to examine
alcohol abuse among University
students. It was assigned to deter
mine policies the University can
enact to counter abuses.
The task force formed recom
mendations on the need for alcohol
awareness and education pro
grams in addition to suggesting
ways to reduce alcohol abuse in
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residence halls and student orga
nizations, such as fraternities.
Task force members have been
reviewing the recommendations
since their completion Nov. 5.
“A lot of work has gone into this
report,” Rosenblatt said. “But it’s
not over yet.”
Jordan previously said he could
not predict when he will finally
decide on the recommendations,
but said he is hopeful he will
decide within a month.
“It’s important for students to
voice their opinion of these recom
mendations,” Rosenblatt said.
“People should speak up and I’m
encouraging it.”
He said students should contact
USG, the Association of Residence
Hall Students, the Panhellenic
Council, the Interfraternity Coun
cil, the Organization of Town Inde
pendent Students and the
University Student Executive
Council who will relay opinions to
Jordan. —by Alan Craver
*
offer expires 12/15/85
Potential grads are told
grades aren't everything
By MARIA KOKLANARIS
Collegian Staff Writer
Graduate admissions committees
look for student excellence in at least
one area in selecting potential stu
dents, a graduate student said recent
ly at at the second annual Graduate
Information Seminar for students in
the College of Human Development.
Speaking to about 15 undergrad
uates, Ann Gruber (graduate-individ
ual and family studies) said, “Grades
are important, but if your GPA isn’t
too high you’re usually given the
chance to point out your other
strengths.”
“For example, a high score on the
Graduate Admissions Test or proof of
experience in your intended field can
really help your case,” she said.
Anne Barnhart (senior-individual
and family studies), president of the
college’s student council which spon
sored the seminar, said the seminar
informed undergraduates of what lies
ahead should they decide to go to
graduate school.
John Prosseda (graduate-nutri
tion) said the most important crite-
information,
call the Office of Telecommunications at 5-1940
J
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rion for attending graduate school is
a desire to continue one’s education.
“Make sure you go for a reason,”
Prosseda said. “If you’re heart isn’t
in it, you’ll never make it through.”
Prosseda said most graduate stu
dents work about 20 hours a week as
part of an assistantship. Students
receive a stipend for the time they
work as well as reimbursement for
tuition.
Both Prosseda and Gruber stressed
the importance of time management
for graduate students.
“Graduate school isn’t such a grind
if you’re organized,” Prosseda said.
Gruber said, “once you get to grad
school you can’t pass the tests just by
cramming the night before.”
Chip Addis (senior-hotel, restau
rant and institutional management)
said he found the seminar a helpful
introduction to graduate school.
“I think an advanced degree would
help me in my field and this seminar
has strengthened my desire to pursue
one,” he said.
Lentha Wilt (junior-individual and
family studies) said he also found the
seminar helpful.
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