The MacNeil/Lehrer NewsHour

MR. MacNeil: Good evening. Leading the news this Friday, the United States broke diplomatic relations with Panama. Archbishop Desmond Tutu was arrested but later released in demonstrations against apartheid. Baseball Commissioner A. Bartlett Giamatti died of a heart attack. We'll have details in our News Summary in a moment. Judy Woodruff is in Washington tonight. Judy.

MS. WOODRUFF: After the News Summary, we make our major focus tonight the deterioration in U.S. relations with Panama. We begin with a News Maker Interview [News Maker] with Deputy Secretary of State Lawrence Eagleburger, who's been the point man for the Bush administration on Panama, then [Focus - What Now?] hear from two critics of the Bush policy, New York Sen. Alfonse D'Amato and Peter Hakim of the Inter-American Dialogue. Next a report [Focus - RX Safe Sleep?] on the side effects of a popular sleeping pill, then [Focus - Back in the U.S.A.] a new twist on the made in the U.S.A. label, and we end tonight [Essay - Evil Unleashed] with a Roger Rosenblatt essay on World War II's great lesson.NEWS SUMMARY

MR. MacNeil: The United States cut all ties to Panama's government, calling it an outlaw regime today. Pres. Bush said in a written statement, "The United States will not recognize any government installed by Gen. Noriega. Our Ambassador will not return and we will not have any diplomatic contact with the Noriega regime." The President issued the statement as Francisco Rodriguez was sworn in as provisional president in Panama City, assuring continued control by Gen. Noriega. The United States has been trying to oust Noriega since he was indicted on drug trafficking charges 18 months ago. We'll have more on the U.S. and Panama just after the News Summary. Judy.

MS. WOODRUFF: In South Africa, Desmond Tutu and his wife were among a group of activists taken into custody by police for several hours after a protest in Cape Town. We have a report from Kevin Dunn of Independent Television News.

KEVIN DUNN, ITN: It was the police beating of these young demonstrators who had attempted to march through Cape Town which prompted Archbishop Tutu's anger. Many bore the marks of the police action, action the Archbishop condemned arriving at his cathedral.

MOST REV. DESMOND TUTU, Archbishop of Cape Town: This is disgraceful and scandalous behavior of the authorities.

REPORTER: What actions do you hope now to take, Archbishop?

REV. TUTU: Just wait. How can they deal with people who are protesting peacefully in the type of way that they do?

MR. DUNN: The same marchers then continued their protest against the recent crackdown on anti-apartheid activists, the Archbishop, himself, linking arms to lead the march. But only a hundred yards from the cathedral, police barred their way. After a short confrontation, the Archbishop and other clerics were arrested. Police said later they'd contravened a law banning marches near Parliament.

MS. WOODRUFF: Bishop Tutu and the others were released from custody later in the day. Also today thousands of black union workers joined the so-called defiance campaign by staging work stoppages at their factories. The campaign is aimed at protesting next week's national elections.

MR. MacNeil: Pres. Bush welcomed Japan's new prime minister, Toshiki Kaifu, to the White House today. Interrupting his Maine vacation, the President greeted Kaifu for lunch and talks on what Kaifu called economic frictions between the two countries. Washington wants to reduce the trade deficit between Japanese markets to U.S. goods. Japanese officials said Kaifu sees the need for structural reforms in the system that keeps foreign goods off Japanese shelves.

MS. WOODRUFF: The State Department announced today that Secretary of State James Baker will meet with Soviet Foreign Minister Eduard Shevardnadze at Baker's ranch in Wyoming later this month. A spokeswoman said the purpose of the meeting on September 22nd and 23rd is to lay the ground work for a summit between Pres. Bush and Soviet Pres. Mikhail Gorbachev.

MR. MacNeil: There was fresh evidence today that the U.S. economy may be headed back towards modest growth. Unemployment held steady at 5.2 percent in August, the same as July, while the economy generated 200,000 new jobs, and the Commerce Department said the government's main forecasting tool, the Index of Leading Economic Indicators, rose .2 percent in July after falling sharply in May and not rising in June.

MS. WOODRUFF: From Colombia, the news today is not drugs but a volcano. The Nevado del Ruiz Volcano, which killed 25,000 people when it erupted in 1985, today erupted again. And authorities began ordering nearby residents to leave their homes. The volcano is located 80 miles West of Bogota, and ash from its eruptions was drifting hundreds of miles North. Officials are worried that five nearby rivers could be flooded by melting ice from glaciers on a volcano, and that violent explosions and mud flows could also occur.

MR. MacNeil: World War II began 50 years ago today with Germany's invasion of Poland. In Bonn, Chancellor Helmut Kohl told a special session of Parliament that Germany must keep alive the memory of the war's horror. He apologized for what he called the untold suffering inflicted by Germans, but he also paid tribute to German soldiers who fought in World War II, saying most of them were honestly convinced they were serving their country loyally. Poland's leaders marked the anniversary with a wreath laying ceremony at the city where the war's first shots were fired, Gdansk, known at the time at Dansik. In a rare show of unity, Solidarity leaders Lech Walesa and the new prime minister, Tadeusz Mazowiecki, joined Communist Party Leader Wocziek Jaruzelski at the ceremony.

MS. WOODRUFF: Finally, Baseball Commissioner A. Bartlett Giamatti has died. The 51 year old Giamatti apparently suffered a heart attack at his weekend home on Martha's Vineyard Island in Massachusetts. Eight days ago, Giamatti made national headlines when he barred Cincinnati Reds Manager Pete Rose from baseball for allegedly betting on the game. That's it for our News Summary. Ahead on the Newshour, the U.S. again lashes out at Panama, a controversial prescription sleeping pill, an industry returns home, and a Roger Rosenblatt look at the horrors of World War II. NEWS MAKER

MS. WOODRUFF: Our lead story the continued failure of the U.S. Government to bring down the Regime of the Panamanian Strong Man Manuel Antonio Noriega. The campaign began two years ago with the extraordinary drug trafficking indictment against Noriega by the U.S. Economic sanctions were imposed they came close to crippling the dollar dependent Panama economy but they did not dislodge Noriega. This Spring Noriega permited elections to be held but after he lost them by all accounts he had them nullified. Two days later the opposition candidates were beaten up in the street's of Panama City by pro Noriega Thugs. The Bush Administration responded by bolstering the American Military in Panama. It also tried to persuade other Latin American Nations to press for Noriega's departure but so far without results. Yesterday Noriega installed a new puppet President in Panama and today President Bush responded by Announcing the U.S. would cut diplomatic relations and seek new sanctions against the Noriegan Government. We begin our discussion with a State Department Official who has been carrying the case against Noreiga at recent meetings of the Organizations of American States, Deputy Secretary of State, Lawrence Eagleburger. Mr. Secretary thank you for being with us.

LAWRENCE EAGLEBERGER, Deputy Secretary of State: Thank you.

MS. WOODRUFF: What exactly is involved when we say we are breaking diplomatic relations with Panama?

SECRETARY EAGLEBURGER: Well I don't think we've quite said breaking diplomatic relations but the point is there is no Government in Panama. We do not recognize what Noriega has put together so there is no Government to recognize because there is no Government to recognize. We are not sending out Ambassador back. We will have no relationship with this new Regime of Noriega's.

MS. WOODRUFF: How is that different from the way that it was last week?

SECRETARY EAGLEBURGER: What has changed is that there was a Government the Devaja Government which we recognized as the legitimate Government of Panama it was basically resident here because Mr. Noriega had booted the President out of Panama some time ago but in our view it was the legitimate government of Panama. They were here in Washington and we recognized them. Now there is no Government in Panama as far as we are concerned.

MS. WOODRUFF: But we have sent our Ambassador previously and now we are saying he is not going to be there again?

SECRETARY EAGLEBURGER: The Ambassador was still resident in Panama until sometime shortly after Noriega stole the May 7th election. We called him home and he has not been sent back since and he will not go back.

MS. WOODRUFF: So what we are saying things really haven't changed since the way they were since the elections were held?

SECRETARY EAGLEBURGER: Basically they haven't really changed except Noriega has now taken one more step again to appoint another illegal Government but basically we continue with no relationships.

MS. WOODRUFF: What is the practical effect of that, what does that mean?

SECRETARY EAGLEBURGER: Which the --

MS. WOODRUFF: The fact that we are saying we don't have any relationship with the Government?

SECRETARY EAGLEBURGER: First of all what it means is a continuation of the Bush Administrations view that this man is not to be dealt with. It is I think an increasing pressure on Noriega in the sense that some of Government's as well are not sending back their Ambassadors. He is an outlaw Regime and we simply won't have anything to do with it.

MS. WOODRUFF: What does this accomplish do you think, I mean, you are saying it is putting pressure in him? How does it put pressure, I mean, why should the fact that the United States hasn't sent its Ambassador back why should that make a difference?

SECRETARY EAGLEBURGER: Well it is just not having sent back an Ambassador. I think what you have to look at is what the Bush Administration has done over the last few months including the OAS. All of it I think has had the impact of isolating the Regime even more than it was before. I am not saying to you that any of these actions tomorrow morning are going to force Noriega to leave Panama. I am saying, however, that I think what the Bush Administration has accomplished over the last months is to increase Noriega's isolation to make it clear to any number of Governments particularly the democracies in Latin America thatthis man does not deserve to be dealt with and its made him more a pyuria with in the community of nations.

MS. WOODRUFF: Why is the Administration doing this? Why make such a big deal out of Panama? Why does Panama matter so much?

SECRETARY EAGLEBURGER: Well in the first place he clearly stole an election on May 7th and did it brutally and it is our conviction that democracies in this Hemisphere need to be supported and we were hopeful up to the time of that election that in fact finally this dictator would leave. he didn't he stole the election. He has been hand and glove with the drug cartels in Colombia. He has been deeply involved in the drug traffic himself and we want nothing to do with him and indeed we want to see him leave.

MS. WOODRUFF: But why make such a public statement about it why not just quietly continue to work through the OAS is what some observers say the Administration ought to be doing?

SECRETARY EAGLEBURGER: Well the Administration has used the OAS for the last several months. We will continue to use it but I don't think we can remain silent in the face of steeling an election and the fact that this gangster has involved in the drug traffic for some years now. I don't see how we can remain quiet in the face of that.

MS. WOODRUFF: As you know there are critics on both sides. On the right side they are saying you ought to do more on the left saying you are not doing enough or you are not doing the right thing but the bottom line of what they are saying is that what you've done has just not been effective. You've imposed sanctions, you've expressed displeasure in no uncertain terms and this man is still sitting there?

SECRETARY EAGLEBURGER: If what you are saying is that what we've done so far has not forced him to leave I can not deny that he is still there. I think to argue that this has had no success is not correct. We have had as a result of having used the OAS I think far greater realization within the Hemisphere that this man is simply not some one who should be dealt with and that he must leave. I think that we have isolated him further. I think the pressures have increased on him. I have said earlier I can not guarantee that he will leave as a consequence of any of the things that we are doing. What I can guarantee you is that the United States will have no dealings with that Regime in Panama or have any relationships with Panama until Noreiga leaves. Now he may be there for some time. he may not. My own judgement is that he is on the wrong side of history and sooner or later he will have to go. How soon or how late I can not at this point say.

MS. WOODRUFF: I guess I come back to the question I was asking a minute ago. Why make such a point out of Noreiga, I mean, we are a big Country, there are many other countries in the World we have to deal with. Why are we singling out Panama?

SECRETARY EAGLEBURGER: I wouldn't argue out that we don't make our positions clear on any number of other Governments certainly but the Noriega case is such a glaring example of a man who cares not all about the process of democracy and is up to his neck in the drug traffic and again I do not see how this country can ignore that gangster. We have to make it clear to him, to the rest of the people in the hemisphere and indeed to the people of Panama that he simply should not be tolerated.

MS. WOODRUFF: You said a moment ago that our work through the OAS was having some success but in fact after, what is it, weeks of talks there was no agreement between the United States and the OAS to do what the United States wanted. Why is it? Why are we having such a difficult time with the OAS?

SECRETARY EAGLEBURGER: Well to understand the OAS process you have to start out by understanding a 150 years of history in which a lot of the Latin American countries are very concerned about the concept of intervention and have a real reaction about inteviening about intervening in the internal affairs of another state. With all of that said I would remind you that the first call for an OAS involvement was, in fact, by Venezuela not by the United States. We came together. We had four meetings in which the issue of Noriega has been debated. They have had a Commission that has been going back and forth trying to get Noreiga to leave. The problem is not the OAS or the Commission the fact of the matter is that the problem is Noriega he has refused to leave. I can't argue that the OAS process has forced Noriega to leave. I would argue fairly strenuously that it has again increased Noriega's isolation, has increased the understanding through the Hemisphere that he really is one monumental crook and needs to be done away with at some point. So I wouldn't say we have succeeded in getting him out but the OAS I think has increased the pressures.

MS. WOODRUFF: What do you say to those critics who say well here the United States goes again huffing and puffing and just reinforcing the image of the bad gringos up North the big bad guys who love the wield the stock and so forth, I mean don't they have a point?

SECRETARY EAGLEBURGER: Well I don't think so. I am about to say for the seventh time that when man is that deeply involved in international drug traffic and has intervened in our internal affairs and those of Colombia and in any number of other states through that drug traffic. Even if he hadn't stolen the election on May 7th that alone deserves condemnation. Huffing and puffing I don't think it is that. I think that it is a clear demonstration of America's moral repugnance to what this man is and what he is doing.

MS. WOODRUFF: What else can the Administration do at this point other than saying we will not recognize you?

SECRETARY EAGLEBURGER: Well I think that it is clear from the President's statement that we are looking at the question of whether some of the economic measures that have been aimed at trying to keep money flowing into Noriega's coffers might not be tightened. I think that is under investigation and examination. There are some other steps that we can take that you know trying to build up the pressures. Again I would not argue for a moment that they will succeed in removing the man tomorrow or in the next week or necessarily in the next year but there are some pressures that can be increased.

MS. WOODRUFF: Further economic?

SECRETARY EAGLEBURGER: Particularly on the economic side.

MS. WOODRUFF: But what we have already imposed has already reaked enormous havoc with the Panamanian economy. What more could we do that could make it worse?

SECRETARY EAGLEBURGER: Well there are a number of steps. I would remind you that there are still a number of businesses that are permited to operate. There are a number of steps that can be taken to tighten the sanctions. Whether the President would decide that he wants to take those steps yet remains to be seen or how far he wants to go but there is still a great deal open to the United States, as a matter of fact, on the economic side if we were to decide to proceed to tighten the rope a little bit further.

MS. WOODRUFF: And what is the time table for that decision?

SECRETARY EAGLEBURGER: I think that President will be looking at it over the next few days probably make some announcements before very long.

MS. WOODRUFF: Mr. Secretary once again we thank you for being with us. Robin. FOCUS - WHAT NOW?

MR. MacNeil: We get two more perspectives on the American response to Noriega they come from Senator Alphonse D'Amato Republican from New York and Co Chairman of the Senate Caucus on International Drug Control and from Peter Hakin, Staff Director of the Inter American Dialogue a group of political business leaders working to improve relations between the Americas. Senator what do you think of the move of severing relations or refusing to recognize this new Regime.

SENATOR ALPHONSE D'AMATO, Republican New York: At this point we have not other alternative then to refuse to recognize this new puppet Government. I think that what we have to do is go back to what we did 18 months ago with a terrible failure of getting this underway with no final solution and no ending plan but certainly President Bush was absolutely correct. I would have gone a step further. I would have called for the recognition of the man who the people voted for on May 7th who were elected by all reasonable accounts by 3 to 1 and even if they had to seek sanctuary in the Canal Zone or some other area recognizing them and attempt to build on that the kind of credible opposition and propaganda and use the Voice of America and the Army Band down there to communicate to the people that we are with them in their thirst and their quest for democracy.

MR. MacNeil: What do you think the present step will accomplish?

SEN. D'AMATO: The Secretary is right as it relates to the isolation and there is an isolation and Noriega desperately craves the recognition of other Governments so the effect of this will depend up on how many Government recognize him. I am concerned that we will begin to find many in Central and South America giving recognition to this drug dictators hand chosen puppet.

MR. MacNeil: Mr. Hakim what do you think this limiting relations will accomplish?

PETER HAKIM, Inter American Dialogue: Well let me say to start with that up to now at least I felt that the Bush Administration had rather deftly managed the problem with Panama. We tempered the unilateral impulses of the Reagan Administration. We've got virtually every Government in the Hemisphere to condemn this dictator. We have gotten the OAS actively involved. Now frankly I am a bit concerned are we moving again toward some unilateral actions. The OAS initiative has broken down. There is obviously a certain logic to our current breaking of diplomatic relations. After all we haven't been dealing with the Noriega Government for more than a year. We've been pushing other Governments of the Hemisphere to remove their Ambassadors so there is some logic to it at this stage. On the other hand we really have to recognize that as a symbolic act. It is not based on any really long term strategy. We don't have an effective strategy either for getting ride of Noriega or for living with him.

MR. MacNeil: Do you are with that there is no effective strategy?

SEN. D'AMATO: Right Now I have not seen the kind of effective strategy necessary to deal with Noriega. I might make comment that the OAS process has broken down I agree but that did not take place by the way of the U.S. or its failure to act or over acting. It took place because the OAS simply lacks the capacity and is rather impotent in the face of Noriega's refusal to move down and we have to understand that. So here is the culprit we should not condemn the OAS they lack kind of political force necessary and I think that unless they are willing to undertake some more concerted actions in joining the boycott in calling off any kind of diplomatic relations Noriega is going to stay there ensconced with his drugs.

MR. MacNeil: Okay you both said no strategy at the moment what you can see. What do you could be a strategy Mr. Hakim? What could the Administration do?

MR. HAKIM: Well first I would like to go back just a bit to the OAS. That in fact we turned to the OAS only three months ago and negotiations can not be conducted according to some arbitrary time table that they are going to reach a conclusion according to some arbitrary deadline. Negotiations take time and the United States was really was not willing to persist with them, did not have the patients to persist with them or the time.

MR. MacNeil: has the U.S. broken off the negotiations or has said that it doesn't want to participate any more?

MR. HAKIM: Well basically the negotiations were set to end on September 1. There hasn't been a strong U.S. effort to sustain those negotiations. It took eights years to negotiate an agreement in Southern Africa, four or five years to negotiate the withdrawal of Soviet Troops from Afghanistan. In three months no matter how strong, how skilled the negotiators were that was a virtually impossible time table.

MR. MacNeil: Okay so what could be a viable strategy now from where we stand tonight?

MR. HAKIM: Well let me start, I think, we should stop dealing with this as a crisis. It is really not a crisis for U.S. policy. When the Soviets moved missiles in to Cuba that was a real crisis. Right now we don't have any strong national interests at stake in Panama. We certainly are concerned about the Panama Canal but Noreiga was never a threat to the Panama Canal. We certainly have an interest in dealing with drug trafficking in Panama but our drug problem isn't going to be solved because Noriega is there or not there. Indeed there are many other people in Panama that are involved in the drug trade as well. I think the first thing to do is stop dealing with this as a crisis. Secondly is to try again to work with the OAS not to see the OAS as another instrument of U.S. policy. Economic sanctions didn't work, military threats didn't work, bilateral negotiations didn't work so we came to the OAS as another instrument. We ought to be sitting down with the OAS with the negotiators and trying to think of a longer term strategy to work with the countries in this hemisphere. After all not only do I think that is the most effective way but it is the right way. These problems of drugs, democracy in Panama the Panama Canal are all concerns of the entire Hemisphere.

MR. MacNeil: Okay let's go to the Senator. What if there isn't a strategy what could be a strategy?

SEN. D'AMATO: Well If I might I didn't hear a strategy. I heard more of the same and more of the same is what has been taking place 18 months.

MR. MacNeil: So what would you do?

SEN. D'AMATO: Well I think we have to see to it that we really do have sanctions and not let half the businesses escape the payments of taxes and give to Noriega hundreds of millions of dollars that he is not supposed to be getting.

MR. MacNeil: American businesses are still doing that?

SEN. D'AMATO: Oh yes that is correct. They get waivers and they are paying tens of millions of dollars to him right now. For example the registration of Panamanian Ships raises him a huge sum of money about a quarter of a billion dollars. So if we were not to recognize that those shipping companies would go to Nigeria. They now cover up some very big money. If we were to say that we are not going to recognize bank transfers. We then place a very real road block and we indicate dramatically that we are going to continue this. You don't do it one day that we are going to escalate this pressure. We let our allies know and the OAS know that we are seeking their cooperation because we want democracy. We are not talking about meddling in the internal affairs of a country. We are talking about standing up for those people who seek democracy. Now let me conclude with one other thing. Once we let Noriega know. You see we never used the Military Card we told him right from the beginning that we wouldn't intervene by then we took away a very important thing that Noriega understands. This is a dictator, a this is a brutal guy, this a person who assassinates people and he fears power and you've got to let him that option is real and indeed the United States might pull a strike by which we would seek a real opportunity to take him out and bring him back to this country to be tried for the crimes that he has committed against the American people in being part of that international drug cartel.

MR. MacNeil: Mr. Hakim what do you think of the Senators strategy?

MR. HAKIM: I don't think that it is much of a strategy either. Economic sanctions if it accomplishes the squeeze further the Panamanian people who have seen their jobs being lost, industries being bankrupt, U.S. Businesses are also being bankrupt in Panama. This would just make life harder for the Panamanian people and in fact the Military options isn't very much of an option at all. No matter how targeted and carefully drawn this military intervention would be there would be bloodshed American as well as Panamanian. There is 50,000 Americans living in Panama they would be put in danger. Our major interest in Panama keeping the Panama Canal open would be endangered. That is not a strategy that is a series of tactics and bluffs and Noriega probably knows it.

MR. MacNeil: Tactics and bluffs. No strategy Senator?

SEN. D'AMATO: Here to fore that is all we've had. We've had talking from the windbags of the OAS who haven't done anything. We have procrastinated. We can't even cut off diplomatic relations and we can't wait four or five or six years. The Canal by the way of treaty has a series of obligations would you suggest that we go through and have Noriega then appoint somebody who is going to Administer that Canal. That is what is called for this year. And I would suggest that our own National security and our efforts against the International Drug Cartel are going to call for us to do more than setting our hair on fire and trying to put it out with a hammer because that is what we've done to date. I would begin to draw back those dependents. There is no reason for 50,000 Americans to be stationed there and as long as they are there we are sending a signal to Noriega that we are not series. Start the draw down, start to get tough. start really to tell them that we've got cards to play that are not military intervention but will bring the Panamanian people to their feet and out in the streets pushing for Noriega's removal. That is what we need.

MR. MacNeil: Okay well thank you both for your Views. Senator D'Amato . Mr. Hakim. Judy.

MS. WOODRUFF: Still ahead on the News Hour problems with a sleeping pill and a new twist on the made in the USA label and an Essay on World War II. FOCUS - RX SAFE SLEEP?

MS. WOODRUFF: Next tonight a report on a popular and controversial sleeping pill called Halcion. The Food & Drug Administration approved it six years ago as a safe, fast acting sleeping pill, but recent monitoring shows that for some Halcion users the sleeping pill causes severe side effects. A number of lawsuits have been filed against the pharmaceuticals manufacturer. Spencer Michels of public station KQED in San Francisco has this report.

SPENCER MICHELS: Two years ago Cindy Ehrlich was going through a rough time in her life. She was worried about putting her mother in a retirement home. Her two year old daughter was waking her up constantly during the night and she was up against a deadline for her first novel. It added up to insomnia, so her doctor prescribed the sleeping pill Halcion.

CINDY EHRLICH: I would not ordinarily have taken sleeping pills. I felt assured that this was really mild and harmless and safe.

MR. MICHELS: Within a few days, Ehrlich said she was buzzing with anxiety and emotionally oversensitive.

CINDY EHRLICH, Former Halcion User: I constantly thought about people dying and myself dying and had fears that things were happening to people and to the world and every paranoid thought that you can have, I had it.

MR. MICHELS: Cindy Ehrlich claims she lived a life of madness for six months. She even contemplated suicide. Her doctor prescribed a tranquillizer, an anti-depressant and an anti-psychotic medication to be taken along with the Halcion. One day after breastfeeding her daughter, Lucy, Ehrlich noticed the baby was wobbling. She knew then she had to get off the medication.

MS. EHRLICH: I didn't know what would happen without it but I remembered this thing about that I had started taking the Halcion first. So I stopped the Halcion first and it was just, the difference was immediate.

MR. MICHELS: Although she didn't sleep for eight nights, normal sleep finally returned. Convinced that she wasn't alone in reacting to Halcion, Ehrlich began investigating its strange side effects and how the drug to approved by the Food & Drug Administration. Her award winning cover story in California Magazine sparked letters from several hundred readers.

PADDY GRAHAM, Former Halcion User: I went to a podiatrist and saw it on the coffee table on his lobby, and the cover loomed at me. It just said Halcion across the -- and then I went out and bought it, went out to Cliff House and read the magazine with my friend with whom I walk, came home that night, threw the Halcion pills in the garbage and that was it.

MR. MICHELS: Patty Graham had been under stress at work and not sleeping well. Her doctor gave her Halcion. three weeks later she fell and fractured her shoulder. After surgery, she took a stronger dose and became so paranoid, she wouldn't leave her house.

MS. GRAHAM: I knew that there was something very wrong with me, like I was detached and scared and paranoid. I don't know. It was a bizarre experience, and I couldn't get to it, I couldn't figure out what it was, until after about a month. Then I decided it was the sleeping pill.

DR. PAUL LEBER, Food & Drug Administration: There are so many things other than the drug that may cause various events that we have to be very careful in leaping to the easiest conclusion, which is almost like the one in the mystery story, the butler did it.

MR. MICHELS: Dr. Paul Leber is the Director of the Neuro Pharmacological Division at the U.S. Food & Drug Administration. He played a key role in approving Halcion. He says it's dangerous to generalize from individual cases.

DR. PAUL LEBER: Unless we were doing with a controlled trial what you can't do in an individual, I'd say all bets are off. It's not that Cindy Ehrlich is necessarily wrong. It's that no one can really tell if she's right.

MR. MICHELS: Cindy Ehrlich's article and the onslaught of media attention that followed has stirred up a worldwide debate on Halcion, a debate that first started 10 years ago. In 1979, Dutch TV broadcast dramatic interviews about the effects of Halcion. A Dutch physician had noted anxiety and paranoia in his patients. After reporting his findings to its U.S. maker, Upjohn, he says he got little response so he went public.

DR. C. VAN DER KROEF, Dutch Physician: [Speaking through Interpreter] I am so convinced of the seriousness of the symptoms that there is no doubt in my mind that this drug will immediately have to be outlawed.

MR. MICHELS: Hundreds of patients and doctors responded to the TV program, allowing Dr. Van Der Kroef to study more than 1,000 cases. Bob Purpura, Director of Psychopharmacology at Upjohn, criticizes the Dutch findings as unscientific.

DR. ROBERT PURPURA, Upjohn Company: These are anecdotal reports by one psychiatrist, primarily, who was dealing with patients who already had mental disorders, who were on a number of drugs, many of which were psycho active drugs, and which had received Halcion in extremely high doses, so while we don't discount those events, it certainly is not appropriate use of the drug.

MR. MICHELS: The Dutch government banned Halcion after the broadcast requiring that Upjohn relabel the product and list the serious side effects. Upjohn refused, stating there was insufficient evidence linking those symptoms to Halcion. Eventually, 60 countries approved Halcion for sale, including the U.S. in 1982.

DR. PAUL LEBER, Food & Drug Administration: So overall, at that time, risk benefit considerations put together and examined, this looks like a very good drug. It still looks like a pretty good drug.

MR. MICHELS: Upjohn's hot new sleeping pill caught on quickly here, where today nearly 10 million subscriptions are filled yearly. Halcion is part of the Benzodiaspone class of drugs. Some are labeled hypnotics or sleeping pills like Dalmane and Restoril. Others are called tranquilizers, like Valium, Xanax, and Librium. Their actions are similar as are some of their side effects, but Halcion is unique. Unlike other sleeping pills that stay in the body longer, Halcion is processed in just two to five hours. This advantage ads to daytime alertness, but its fast action causes withdrawal symptoms in some patients.

MS. EHRLICH: Immediately when I started taking it, I had to take one the next night because I was so hyper and I didn't connect, I didn't realize that I was hyper because I had taken one the night before.

MR. MICHELS: Most medical experts hail Halcion as a safe, effective sleeping pill with no hangover effects the next day. When you fill a prescription for Halcion, you can ask the pharmacist for this professional insert guide, which is actually for doctors. The guide warns of possible side effects, including amnesia, anxiety, depersonalization and hallucinations. The flier says that those side effects are rare, but those growing symptoms of psychosis may be more prevalent than indicated. That evidence is cited by medical researchers at Penn State University in a series of studies over 10 years. Some other cases received widespread publicity. This Utah woman, Ilo Grundberg, claims the Halcion she had been taking for 14 months caused her to kill her mother. In June of 1988, she took Halcion. Butinstead of going to bed, she loaded a gun, went into her mother's bedroom, and shot her mother eight times. Early this year, the state dropped murder charges against her. Grundberg's defense involuntary intoxication by Halcion. An expert witness for the state testified at the time of the shooting Grundberg was unable to determine the wrongfulness of her act and that Halcion played a key role in incapacitating her judgment. In another case, a Kalamazoo, Michigan, police officer took Halcion only once, but he took a double dose. He stabbed his wife. He won acquittal with a defense of intoxication by Halcion. In both cases, Upjohn claims that Halcion was not used properly and that no evidence exists to link the pill to this violent behavior.

DR. ROBERT PURPURA, Upjohn Company: To my knowledge, there is no clinical, medical, or scientific evidence which has ever causally related the injection of a benzodiosaphine to a violent act. The drugs must be used appropriately.

MR. MICHELS: But an expert on sleep disorders, Dr. Martin Scharf, who was a witness in both cases, says Halcion can cause paradoxical or opposite reactions that aren't seen as frequently with other sleeping pills.

DR. MARTIN SCHARF, Sleep Researcher: They normally would cause you to relax. They have tranquilizing effects, but in some instances, rare, they can cause violent reactions.

MR. MICHELS: Dr. Scharf is also concerned that Halcion has a lower margin of safety than other sleeping pills.

DR. SCHARF: We know, for example, that four times the clinical dose of Halcion, according to the package insert, can cause coma, and this isn't true for any of the other benzodiosaphines.

MR. MICHELS: Dr. Scharf's own studies on memory also showed a high rate of amnesia with Halcion users like San Francisco psychiatrist Wesley Clark. He flew to an East Coast drug conference and took Halcion to overcome jet lag.

DR. CLARK: I was asking people about a particular subject and they said we already had this subject and it was covered this morning and I had no recollection of it being covered, so what I did was I looked at my notes. I obviously was there. That was my handwriting; those were my notes.

MR. MICHELS: Dr. Clark couldn't remember anything about the house or the street he had left that morning. He dismissed his memory gap as strange.

DR. WESLEY CLARK, Psychiatrist: But when I could not get back home, that wasn't strange, that was frightening. There's a difference.

MR. MICHELS: Upjohn says amnesia and other side effects may be dose related. The .5 milligram dose of Halcion was banned in France, Italy, and West Germany, because of adverse side effects. Last year, Upjohn stopped making the .5 milligram tablet and now recommends a dosage half that amount.

SPOKESMAN: But what they didn't do was tell the physician why they were doing this; they have not let the public know why they felt it was important to lower the dosage that they were marketing.

MS. EHRLICH: I think my doctor bears a certain amount of responsibility for not figuring it out, but I don't think she had adequate information from the manufacturer. Doctors do not seem to be aware that there are problems with the drug, and why not? FDA's aware of them.

MR. MICHELS: This computerized printout details some 2500 adverse reactions reported to the FDA by doctors.

MS. EHRLICH: I find it surprising how many of these referred to overdoses of the sleeping pill.

MR. MICHELS: The FDA reports which are tabulated at the headquarters in Maryland, are filled with episodes of amnesia, depression, and psychotic agitation. Upjohn claims conclusions drawn from anecdotal reporting rather than from controlled studies may not be valid.

UPJOHN SPOKESMAN: When the FDA sends this information out, they specifically state that this is raw data, that it doesn't imply any cause and effect relationship, that it cannot be used to calculate incidence of side effects, nor can it be used to compare the side effects of one drug versus that of another drug.

MR. MICHELS: But an independent study at Penn State University did compare three popular sleeping pills from those FDA reports. The analysis shows amnesia is seen 50 times more frequently in Halcion than in Dalmane or Restoril. Psychotic disorders occurred 10 times more frequently with Halcion, but Upjohn and the FDA discount these figures as statistically insignificant. Dr. Leber says the actual occurrences are so few they are not cause for alarm.

DR. LEBER: The actual rate of those events, say one in a hundred thousand, you're not going to worry about it. It's only if it's very common.

MS. WOODRUFF: Since that report, the Food & Drug Administration has scheduled a public hearing later this month to discuss clinical data relevant to labeling Halcion. The FDA's Dr. Leber said today in a telephone interview with KQED producer Char Woods that there was nothing unusual with Halcion's present labeling, but he said the FDA needed to "discuss how to interpret the higher reporting ratio of adverse effects with Halcion". FOCUS - BACK IN THE U.S.A.

MR. MacNeil: Next, East meets West in Amana, Iowa. Clothing manufacturers based in the Far East are following the lead of automobile and electronics companies in setting up U.S. manufacturing plants. Fred De Sam Lazaro of public station KTCA- Minneapolis-St. Paul reports on the American garment industry's revival in Iowa.

MR. LAZARO: Like the Amish with whom they sometimes are confused, the people of Amana came to this country fleeing religious persecution in Germany. They first settled the Buffalo, New York, area in the 1850s, but soon came to Iowa, this time fleeing the industrial revolution. Here they continued their tradition of an agricultural, communal and isolationist lifestyle, but history detoured the Amana colonies into the American mainstream in the early 1930s.

MR. SHOUP: At that point in time, two highways, Highway 6 and 149, were built through the Amana community.

MR. LAZARO: Donald Shoup is a church elder in the Amana society.

DONALD SHOUP, Amana Society Elder: And our people saw, the younger people especially, saw these new cars and the gaudy clothes and the fancy hairdos that these people had when they came into the Amana area and some of the younger people wanted some of that.

MR. LAZARO: If the kids wanted to buy things from the outside world, their elders decided to sell things to it. Traditional farming and craftsmanship skills were turned into thriving businesses. Furniture and food products bearing the Amana name became well known in the upper Midwest. The Amana society also displayed a sense of adventure in business, diversifying into what became the colonies' national claim to fame, the Amana refrigerator. The company was later sold to the Raytheon Corporation. Today the Amana Colonies have marketed their tradition to become Iowa's top tourist attraction. Thousands of passers-by on Interstate 80 stop in for homestyle cooking served with a thick German accent. What few tourists see, however, is the colonies, newest business venture, one with a very different accent. Jeffrey Fields, a Philadelphia native, was recently hired to run a new garment factory in Amana. It was set up entirely with the expertise of the KY So Company of Hong Kong, which also chipped in a third of the $5 million cost. Today about 50 employees, almost all female, work at a furious pace with sophisticated Japanese sewing machines. On this day they are filling an order for 18,000 pairs of biking shorts. They'll be sold nationwide under the Gitano label. To business analysts, this is the sound of a renaissance in the American garment industry, an industry that crumbled under the competitive onslaught of overseas producers, especially from Pacific Rim nations. Today such household American names as Sears Roebuck or Calvin Klein are just as likely to be on Korean, Chinese or Malaysian garments.

MR. FIELDS: The reason why everything went abroad originally was the cost factor.

MR. LAZARO: Field says there's still a sizable gap between what workers in the Orient earn and the wage paid workers here, but he says domestic producers are slowly gaining increased advantage with a factor the industry calls QR.

JEFFREY FIELDS, Plant Manager: Which is quick response. The department stores, the major retailers today, they don't want to keep a large inventory with the interest rates the way they are, and we can usually turn a garment around, a purchase order around, in two to three weeks. As opposed to offshore, it usually takes anywhere from four to six weeks, if not longer. [Made in the U.S.A. Commercials]

MR. LAZARO: In addition to selling the QR, quick response idea, to retailers, the American garment industry has also gone after retail shoppers for PR or patriotic response. Susan Fiorito, a home economics professor at the University of Iowa, says consumers now pay attention to more than just the washing instructions on clothing labels.

SUSAN FIORITO, University of Iowa: Studies have been done saying, you know, did you buy very many imported garments, and consumers would say no and yet you would look at their wardrobes and they would be, 85 percent of their garments would be imported, they didn't read them, but now people are conscience of it.

MR. LAZARO: The result has been a revival in traditional garment making regions in the East and South and new plants like the one in Amana, and the made in the U.S.A. advantage hasn't been lost on foreign garment makers who are investing more and more in the United States. University of Iowa Business Professor Tom Pogue says it's the same rational that in other sectors has spawned American cars called Honda and American TV's called Mitsubishi.

TOM POGUE, University of Iowa: Businesses are saying, let's hedge our bets, let's have some of our production operations here in the U.S., because that protects us when the dollar depreciates, that protects us against protectionist movements which may become stronger, and we can't expect to be a player in the U.S. market and continually service that market from production in other countries.

MR. LAZARO: As for the Amana colonies, the garment factory has brought about 75 new jobs, a substantial number for a rural economy that's still smarting from agriculture's recession. Most workers here live on and derive their living off farms. These jobs provide supplementary income that more and more farm families must rely on to make ends meet. The wages, averaging between 4 and 5 dollars an hour, may seem low, but many workers here say the alternatives are even less attractive.

WORKER: I was bartending.

WORKER: Basically I was just a cook. I worked at the Amana Broad House.

YOUNG WORKER: I worked at Holiday Inn. I was a maid.

MR. LAZARO: How long do you figure you'll do this?

WORKER: I don't know. As long as the pay is still good.

WORKER: It averages out to where they make a pretty good wage. I think most of the girls here are making money at it. They all make over $4.10.

YOUNG WORKER: I wanted to get a job that was 40 hours a week and you know, paid above minimum wage, and you know, something I could be proud of.

MR. LAZARO: Are you proud of what you do now?

YOUNG WORKER: Oh, yeah.

MR. LAZARO: For his part, Plant Manager Fields has glowing testimonial for workers. He's a third generation garment industry executive who'd never heard of the Amana Colonies and hardly knew where Iowa was until he applied for this job. Several months into the job, his honeymoon apparently continues.

MR. FIELDS: They're very cooperative. When there's rush orders that have to go out, they always give 110 percent.

MR. LAZARO: Meanwhile, Don Shoup says he's proud the Amana Colonies are helping bring back the made in the U.S.A. label. He admits though that doing so with a foreign partner was a bit difficult.

MR. SHOUP: We had to learn how to work with a person from a different culture. These people were the ones that had the knowledge that we were seeking, which is I think a switch from what has occurred in the past nationally, but the Amana people have been used to making compromises in order to continue to survive and exist as they did in 1932, so we're not as inflexible as we seem.

MR. LAZARO: That flexibility has helped continue a tradition that began in the Amana Colonies in the early '30s, one of business success. The garment factory, now 18 months old, is already turning a profit, several months earlier than most experts and its owners predicted. ESSAY - EVIL UNLEASHED

MS. WOODRUFF: Finally tonight Essayist Roger Rosenblatt looks back 50 years to the start of World War II. He recalls with some pictures that are difficult to look at the horrors that became the trademark of that war.

ROGER ROSENBLATT: If the Second World War did any good at all, it was to clarify in the most terrible terms possible where race hatred could lead. The war was Adolf Hitler's war, his to start as he did with the trumped up invasion of Poland fifty years ago tonight, his to wage through six long years and fifty million dead. The war truly covered the world. It touched six to seven continents involving the Burmese, Brazilians, Lebanese, and Greeks, as well as Americans, British, French, Germans, and Russians. Finally it was Hitler's war to lose, but not before 6 million Jews had their lives snatched from them. This was Hitler's war within the war. In terms of what was left of European Jewry in 1945, the extermination of the Jews was as close as it came to total victory. To Hitler, everything was clear. He believed in clear symbols, brown shirts, swastikas, jack boots, zig heil. He believed in clear, unambiguous speech. His words, said an associate, go like an arrow to their target. He believed in clear writing. In Mein Kampf he put it was there any shoddy undertaking, any form of foulness in which at least one Jew did not participate? He believed in clear hatred. It was clear that Jews were but that was not enough. They were to be driven from their shops, quite clear, deprived of work and possessions, clear again. They were to wear the Star of David on their clothing, excellently clear. Yet, still, one further point of clarity, if you really hated them, truly believed them unworthy of existing, be clear through and through. Eliminate Jews from theearth. So clear, in fact, was Hitler's purpose with the Jews that one must remember it was not singular, only excessive. In seeking to get rid of the Jews, Hitler represented the extreme, but it was not unique in his time. It was said of him "He touched each private wound on the raw, liberating the unconscious, exposing its innermost aspirations, telling it what it most wanted to hear." Jews were frequently hated and isolated in America at the time of World War II. So were Catholics, so were blacks. The blacks who enlisted in the country's wa against Hitler were segregated in separate divisions of the army. The navy did not accept them at all. At the start of the war, there were many in England and America who did not mind hearing of Hitler's racial obsession, a bit brassy, a trifle overblown, but basically the man was right, liberating the unconscious, exposing its innermost aspirations, telling it what it most wanted to hear. What Hitler did with bigoted thinking was to bring it to its logical and brutal consequence. What is more, he brought efficiency to the enterprise. [Documentary]

MR. ROSENBLATT: In 1939, eliminations of the Jews was a matter of passion, but then it became a matter of pure business, a series of bureaucratic problems, how to get so many people packed into the cars of a railroad train, how to move the train from a city to a death camp, how to cram thousands of human beings into a finite space where poison gas could hit them all, how many camps, how many guards and so forth. Clarity begot clarity. Once it was clear that the Jews were to be eliminated, clarity then had to be applied to the means. At the end of the war, when death camps were liberated, the world saw with its own eyes what Hitler's clear vision had provided. It was a vile and terrible sight. It was the worst sight one could encounter. It was hell, pitiless, fathomless sorrow, but the evidence of the camps was also instructive. Soon after the war in America, the movie "Gentlemen's Agreement" came out, staring anti-semitism in its bloodshot eye. A decade after the war, America's blacks decided that life was no longer to be segregated for them, and whites joined their cause, eventually affecting law. No one made the connection with Hitler's war exactly, but the connection was there. Hitler was the world's deepest nightmare, not because he was supernatural, but because he was human, one of us, who demonstrated that the unreasoned, unreasonable hatred of race, religion, cast, height, size, color of eyes, skin, hair, any of that, draws a clear line to murder, that the bigoted mind is a death camp dreaming of inmates. In this dreadful clarity, Hitler gave a lesson to the world which after an advance of 50 years it still struggles to learn. RECAP

MR. MacNeil: Again the main stories this Friday, the United States cut diplomatic ties to Panama to protest the installation of a new President by Gen. Manuel Noriega, Pres. Bush called it an outlaw regime. In South Africa, Archbishop Desmond Tutu and his wife were among those arrested by police in anti-apartheid demonstrations. They were later released. And Baseball Commissioner A. Bartlett Giamatti died today from a heart attack. He was 51. Good night, Judy.

MS. WOODRUFF: Good night, Robin. That's our Newshour for tonight. We'll be back Monday night. I'm Judy Woodruff. Thank you and have a safe Labor Day Weekend.