European Stars And Stripes (Newspaper) - October 26, 1988, Darmstadt, Hesse                                Wednesday october 26, 19b8 the stars and stripes Page 9 business news Treasury report says Dollar s Rise will not hamper whittling of deficit Washington a the Treasury department said monday the Rise in he value of he Dollar this year Likely will not significantly alter prospects for continued Progress in reducing the nation s Trade deficit. In a report required by the Trade Bill passed by con Gress this summer the Reagan administration said that the drop in the Dollar following last october s Stock Market crash was a temporary Over reaction to a crisis and that the current value is lower than before the crash. Economists and members of Congress have expressed alarm at he 14 percent Rise in the value of the Dollar from lows of nine months ago. Saying it will hamper Progress on whittling the Trade deficit i. But the administration report said it seems unlikely that movements in the Dollar sofa this year will significantly alter the Outlook for sustained Trade.  the department said changes in Trade flows normally 5ag behind Exchange Rale fluctuations by. Two to three years. It cited improvements in the efficiency of . Business and added strengthened . Competitive Ness is much broader based than simple Exchange rate  the report strongly endorsed japanese efforts to stimulate its Economy in an Effort to increase import buying and it mildly praised West Germany s Effort. But it found that Taiwan and South Korea have manipulated Exchange rates to keep their currencies artificially Low when compared with the Dollar thus hurting the efforts of the United slates to reduce its Trade deficit with those countries. A senior Treasury official who spoke on condition of anonymity said negotiations with those two coun tries As required by the Trade Bill will begin soon. The administration is required to report on its Progress m six months. Overall the official predicted the . Trade deficit will shrink by 130 billion this year from a Peak in How Dow industrials Dollar react to the data of announce Nwart deficit totter worm than expected in billions of dollars Trade deficit -17 Tov. 1fc a mor september deficit -$14.1 oct 61.01 Points Dollar to.98 yen d.c.101 won. October deficit -$17.6 Dow -47.c6 Points Dollar -3.07 yen March 17 bettor january deficit -t12.4 Dow 21.72 Point of a. 12 b december deficit -$12.2 Dow ai.72pci6i Dollar 1.65 yen november deficit -13.2 Dow 39.06 Points Dollar 4 to yen Uril 14 Wen fib Bruiy deficit -$13.8 Dow -101.46 Pokitko Dollar -2.72 yen oct. 14 Wen August deficit -j15.7 Dow -65.46 Points Dollar -t.38 yen Congo Titan in uric by Tim Plum. 1987 of s160 billion As measured on a balance of pay mints basis. The official said the improvement should continue next year but declined to say by How much. Many private economists maintain the deficit will not shrink below $100 billion a year without a further drop in the Dollar. However the Treasury department s report said the United states has successfully moderated Domestic growth thus curbing the growth of imports and per mitting manufacturers to produce More for Export. It mid Japan which had the largest Trade surplus with the United slates last year has stimulated its Economy causing a rapid acceleration of its Domestic demand and a reduction of its Trade  said West Germany which had the second largest Trade surplus with the United states also has moved inthe right direction but pointed out that its performance is less  in another part of the report the administration said its policy of coordinating intervention in currency markets with other major Industrial nations has succeeded in stabilizing Sharp fluctuations in Exchange rates even though the interventions were Small restive to total currency  said the United states spent $8.5 billion to prop up the value of the Dollar As it was falling in 1987 an sold $1.4 billion in dollars to curb its appreciation this year. Makers of Hoover Maytag appliances to merge Des Moines Iowa a two of the Best known names in household appliances Maytag and Hoover will soon be under one roof following the $1 Bil lion merger of Maytag corp. And Chi Cago Pacific corp. Maytag announced monday it plans to use the european connections of Hoover to expand its own sales overseas. While investors initially drove Maytag s value Down at the news of the Deal several analysts praised the combination As a Long term plus for the company. Through Chicago Pacific s Hoover division we will become a Leader in the International major appliance Market said Maytag chairman Daniel j. Krumm. He said the acquisition is a Milestone for Maytag based in Newton Iowa be cause it provides increased opportunities for our share owners and helps us achieve our Long term strategy of becom ing a global Leader in the major appliance  Maytag said it will launch a Cash ten Der offer for up to 6.4 million shares or approximately 49 percent of the out standing shares of Chicago Pacific at $60 per share. The remaining Chicago Pacific shares will be converted into an equivalent amount of Maytag Stock. The companies said the tender offer and the merger together Are valued a about $1 billion and the combined sales of both companies will exceed $3 billion. The Board of director of Chicago Pacific including Chicago businessman Lester Crown whose family is the com Pany s largest shareholder with 15 per cent has approved the transaction a news release from the companies said. Crown intends to Exchange his family s Stock and convertible Bond holdings to Maytag Slock he release said. Investors were initially Cool to the move. Maytag shares fell s3 on the Newyork Stock Exchange from an opening of 126 but soon regained some of that ground to Trade us s2 3,87 it late in the afternoon. Chicago Pacific shares zoomed s13.37v to s56.75, in late nose Trad ing. Harvey Kapnick chairman and chief executive officer of Chicago Pacific called the transaction a Good manage of leading brands and there Are inter Esting opportunities for blending techno Logies markets manufacturing and re  Maying s prime appliance brands Are Admiral Hardwick Jenn air magic chef Nogic and Maytag. It also makes vending machines. In addition to Hoover Chicago Pacific has several lines of furniture including Kittinger Pennsylvania House Mcguire Brown Jordan and Gunlocke. Hoover has 13 production facilities in eight countries to manufacture and Dis tribute washers dryers refrigerators dishwashers and microwave ovens in addition to the floor care line. It does no Market the major appliances in the United states. About 65 percent of Hoover s revenues Are generated overseas. Chicago Pacific is the successor of the Rock Island Railroad when it emerged from bankruptcy proceedings in 1984. September sales of existing houses dip 2.2% _ _ to Jun. In 4u.a  to Ltd Chi Del Washington a sales of existing single family houses fell 2.2 percent in september after an unexpectedly Strong sales spurt earlier this year a real estate Trade group said tuesday the National association of realtors said sales of existing houses declined to a seasonally adjusted an Nual rate of 3.63 million units last month after a 2.2 percent increase in August and a 5 percent decline in july. Sales increased every month from february through june surprising economists who had predicted that gradually rising interest rates would Dampen House buying. However As it turned out Many buyers apparently bought Early in an attempt to beat rising Rales. Fixed rate mortgages hit a Low of 9.84 percent in february and Rose to 10.71 percent by Early August. Since then they be eased Back to 10.28 percent. John a. Tuccillo chief economist of the Ria estate group predicted that sales will continue to lag in the fourth Quarter and will total 3.47 million units by Yeai tend Down from 3.53 million in 1987. The median Price of a House fell from August to september by j2.900, to $88,500, meaning half sold for More and half for less. The decline was a Normal seasonal development As the summer House Selling season Drew to a close Tuccillo said. The Northeast remained the costliest Region of the country with a median sales Price of 5141,400, up 6.3 percent from a year ago. In the West the Media Price was 1124,300, up 7.1 percent from a year ear Lier. The median in the South was s82.400, up 3.6 percent from september 1987. In the Midwest the Price was 167,100, up 1.5 percent the National appreciation rate Over 12 months was 3.5 percent. The West was the Only Region of the country show ing an increase of sales last month. They Rose 6.0percent, to 710,000 units following a 3.1 percent increase in August sales fell 5.8 percent in the Northeast to 6,50,000 units the lowest level since january. They fell 3.2 percent in the Midwest to 900,000 units and were off 2.8 percent in the South to 1-38 million units. Tuccillo said the sales Market is particularly vigor Ous in California anal cml have attributed the in creased activity to fear that local government will impose development controls on building houses