J. Peter Grace, the president's efficiency expert.

Looked at the numbahs, found $424 billion waste in gov'mint.

Wears two watches. Eastern time on the left wrist. Time where he happens to be, at the time, on the right.

Yale '36, born with a silver spoon and all that, talks with a tough-guy, gravelly voice. Machine-gun delivery.

See?

The fact is, Peter Grace, 71, is one of the fabulous characters of the American scene. A swashbuckling tycoon. Daddy Warbucks in the flesh. A man to match our mountains! For 40 years chief executive officer of W.R. Grace & Co., his grandpappy's South American guano business and shipping line built by Peter into a vast conglomerate with 80,000 employes, factories and stores the world over: chemicals, petroleum, Herman's sporting goods, 740 restaurants . . . Grace visits them in his "Flying Office," a Boeing 727 with desks, phones, Xerox machines, bustling aides. Works 17 hours a day. Keeps on hand a battery-powered lamp in case the one in the limousine fails.

Stories about this man are legion, and when, late one recent Washington night, his fleet of limos sweeps up to Swensen's Ice Cream Parlor on 19th Street and this paunchy little mogul, in need of a milkshake, steps out, he does not disappoint.

Walks briskly inside.

Aides scurrying.

"Hew minny are yew?" the teenish hostess squeaks.

With piercing blue eyes, the tycoon fixes her.

Squeaks in perfect mimicry: "Hew minny are yew?"

Her face falls, she tries again, he mimics again.

Finally, she catches on, and they chuckle together.

He has won.

After a lifetime on Wall Street, Grace, a Democrat, has shifted focus to the political stage in a campaign to rally the nation against what he sees as massive waste and inefficiency in government. It has been a year since the commission he chaired for President Reagan -- the Private Sector Survey on Cost Control, staffed by private industry at a donated cost of $75 million -- submitted its mind-boggling 2,478 recommendations, but Grace isn't leaving it at that. On his own time and with contributed money, he is fighting to implement the recommendations.

The campaign is having an impact. After Grace and columnist Jack Anderson recently started Citizens Against Waste, a private foundation, they say they received 300,000 letters of support in 14 days and collected 5 million signatures demanding action by Congress against "foolish projects . . . and inefficient operations."

For Grace, it is a Crusade, a life-and-death struggle against the deficit and possible economic collapse. While remaining at the helm of his firm, Grace is devoting 40 hours a week to speeches, interviews, radio and TV appearances. He gave 107 speeches last year and requests are coming in at the rate of four a day.

The federal debt "builds up like a stone rolling down a hill and picking up mud," he tells an ABC interviewer here just before going for his late-night milkshake on a recent Washington visit. "The interest this year is about $150 billion and is going to be one-and-a-half trillion, or 10 times that figure, in 15 years. You won't be able to afford to pay the interest."

What to do?

"We get the Congress to get . . . out of their efforts that they're making to add inefficiency to the government operations. Take Harry Walters who runs the Veterans Administration with 220,000 employes. He wants to change three of them, he has to ask Congress for permission. I mean that sort of thing is crazy . . . "

Grace is under intense criticism.

Most critics, including Congressional Budget Office analysts, say that savings projected by the Grace commission are overstated. Or vague.

Or that the recommendations really have to do with policy, not just efficiency.

The criticism can get heated. With a reporter on the phone, Ralph Nader calls Grace's analysis "wildly inaccurate," and of his corporate statistics virtually shouts, "It's lies, lies! Everything is lies!"

Through it all, Grace charges on, and his commission report continues to occupy a central place in the nation's political dialogue.

When the House Budget Committee held hearings in several cities this month -- an opening shot in the battle over proposed massive cuts in domestic programs -- Grace was on hand to testify, "There is plenty of dough to be saved."

When budget director David Stockman went before Congress Feb. 5 to attack high military pensions, he was choosing a target said by the Grace commission to be worth $28 billion in cuts.

The next night, when Reagan delivered his State of the Union address, he said, "We are moving ahead with Grace commission reforms . . ." Meeting earlier this week in the White House with Grace, Stockman, chief of staff Donald Regan and 75 business executives, the president told Grace to keep up the good work.

Grace is a dynamo: intense, obsessed, mixing business, politics and personal life.

"I have no social life, none at all," he explains over his milkshake. "I don't drink. I never watch TV, never go to the movies, and I never go to the theater. So if you add up all the time that people spend . . . -- and I eat very quickly, don't have any breakfast, eat lunch at my desk, 15 minutes -- so therefore I'll probably save 20 hours a week that people spend reading, watching TV, movies, going out to dinner, having people in for dinner . . ."

A cadence to it. A swelling drumbeat.

Grace was in Washington for a cocktail party to open a new Grace & Co. restaurant here, the Devon Bar & Grill. Just in from the Far East, Cape Town, Rio and Alaska aboard his "Flying Office," and from a quick Florida stop to deliver a speech, check a business and pick up his wife, Margaret, who was en route from their Florida home to their Long Island home.

The tycoon enters the crowded restaurant.

Examines the layout.

Chats with the chefs.

Banters with guests, including Edwin Meese III, whose nomination for attorney general had been approved earlier in the day by the Senate Judiciary Committee.

"Hi, Ed! . . . Would it be any help to you if I work for you?"

The answer is drowned in general hubbub.

Grace sits at a table for a WTOP radio interview:

"They got 332 incompatible accounting systems, 17,200 computers that are not interfaced, that are 6.8 years obsolete with $600 million a year being spent trying to repair them because the manufacturers no longer know how to repair them . . ."

Wham.

"The work in Washington has steamed him up," says Margaret Grace, Peter's wife of 43 years, mother of his nine children, grandmother of his 12 grandchildren, a woman who laughs easily and says her interests have been "children, family, home, church . . . The center of my life is the Lord, first, and Peter is a real gift from Him to me." Margaret Fennelly, one of seven children of a New York City motorman, met Grace when she went to work for the company as a secretary. Now two of their sons work at Grace & Co. -- the fourth generation to do so.

"He's a man of extremes," she says of her husband. "He's going very, very hard, even harder than even he has ever gone. But it's very, very important."

Back in the limo, Peter Grace is whisked to ABC.

In the interview there, he touches a favorite subject, "intergenerational rape . . . No kid being born today is going to have any future or any freedom if [the mounting deficit] is not turned around because by the time that kid who's born today is 15 years old [we'll be] running with an annual deficit of 2 trillion."

Liabilities now amount, he says, to "$50,000 on the back of every baby . . . born today!"

In the control room listening, his wife. His aides.

And a young ABC man, at the controls.

Who suddenly exclaims:

"When's he running for president? I'll vote for him! I've got a boy, 5 weeks old."

The interview at Swensen's.

The tycoon positions himself, taps out his pipe. The piercing eyes.

"I'm in your hands."

Actually, the eyes at close range have a soft warmth, create an engaging, intimate space.

Why, one wonders, is this man so driven?

"I was brought up in a very wealthy family. There were 62 servants in the place . . . and a yacht with 28 crew members . . . and all that, see? Anybody who's brought up that way is rather, you might say, undirected in terms of having a mission, because you're just spending all your time blup blup blup [he fingers his lips like an idiot]. I was not happy in that environment . . .

"So I met a priest . . . I was about 24, I was searching, I didn't know anything, I was playing polo . . . He had a tremendous influence on my life and he convinced me . . . that God creates you with certain talents . . . You're created for a purpose, see, and therefore you should use the talents God gave you . . . Now, my talents basically are, I'm very good at mathematics and figures, have a good mind for numbahs. I like numbahs, I like playin' with them . . . So therefore how should I use the talent? Well, one of the greatest uses of talent in people with numbahs is to get involved in the gov'mint, right?"

(No answer.)

"Right? Right?"

(No answer.)

" 'Cause there's so many numbahs it's mind-boggling, right?"

Right.

He continues: "And therefore, I've used the talent that God gave me to make the world a better place . . . Anybody who has no purpose is in trouble, because if you don't have a purpose, one of these days you might jump out a window, and you never know. I mean, if you don't have a purpose, you might. I'm not saying you would, but I mean, you might if you have no purpose: you might go out of a window, right?"

Right.

Grace is president of the Knights of Malta, among his many church activities. Much of his wife's church work has been ecumenical and Grace himself chairs the national board of advisers of the National Jewish Hospital in Denver.

"The Catholic church is always lookin' for money," he says. ". . . And therefore if you're a prominent Catholic, I mean, known to have money . . . you are being besieged, besieged, morning noon and night, and you have no peace."

Grace says he is "not a prayerful person."

But one priest who has known him 30 years, the Rev. Patrick Peyton, says, "That's his humility . . . the humility of a child." Peyton says Grace "lives the faith" and regularly leads his family in prayer.

The Rev. Bruce Ritter of Covenant House, which cares for 12,000 street children in New York, remembers how he met Grace when, a decade ago, the tycoon unexpectedly wheeled up in his limo about midnight. "We were having trouble dealing with our explosive growth. Peter put his staff at our disposal." The help has continued as Covenant House expanded nationwide.

Says Ritter: "He uses the accouterments of big business because it's part of a professional life style, but it doesn't seem to touch him personally . . . I'm very much in awe of Peter."

Margaret Grace smiles and says simply: "He was the loveliest man to have nine children for."

If Grace preaches efficiency, how is his own firm, No. 53 on the Fortune 500, doing?

Grace: "Not as well as it was two years ago 'cause we are heavily involved in two businesses that are flat on their ass. One is fertilizer -- you know all the trouble in the farm belt -- and the other is energy services: you know, oil wells and drilling . . . Those two businesses comprise about $1.5 billion of our capital, it's almost half our capital."

Isn't that inefficient?

Grace: "Let's put it this way. Because the energy business is flat on its ass . . . and because fertilizer and the farm community is flat on its ass does not mean that we're inefficient. It might mean that we were not smart enough to see that coming in 1980-82 and sell out [fingersnap] at the top, you see, and so from that viewpoint we're inefficient."

Sensing danger, aide Fred Bona virtually leaps between tycoon and reporter: "But you're also never satisfied! We just announced . . . record sales and earnings . . . but he's never satisfied!"

"Yeah," says Grace, "I'm never satisfied."

William Russell Grace fled the Irish potato famine in 1846, became a ship's chandler in Peru, and made it big in guano, used for fertilizer. Needed ships to move it, and the Grace Line was born. W.R. became the first Catholic mayor of New York. Later, Peter's father, Joseph P. Grace, developed the firm into a Latin American trading company centering on the fleet of ships.

In 1945, Peter, who had been born and raised in Manhasset, Long Island, became president and CEO when his father fell ill. He was 32, and the story of how he built W.R. Grace & Co. into a conglomerate with $6.7 billion in revenues is one of the great business sagas. "It's a big and successful company . . . a good company," says Harvey B. Storch, a senior analyst at Fahnestock & Co., who has watched Grace & Co. for 30 years.

But Storch wonders.

"Peter runs Grace to make a profit [but] you don't run the Department of Commerce to make a profit . . . You don't just go out and get the lowest bidder. You have to spread it around, you have to take into consideration minorities, etc. Businessmen don't really grasp this."

It is nearing midnight.

Legends notwithstanding, the tycoon seems tired.

Tells of meeting someone who agreed spending should be cut but worried that education aid cutbacks could keep her 10 siblings out of college because her family income is $1,000 over the cutoff.

Grace, clearly pained by the dilemma, talks on and on about it.

"I mean, she's just a top-flight person, so obviously it's a family that probably should be made an exception or something."

Speculates: If only education aid were disbursed according to a family income per child formula . . .

Frets: Congress wouldn't do anything so smart. Would, instead, raise the income cutoff rate for everyone.

Says finally: "You know, you really need a benevolent dictatorship here where you could look at these things and say, 'That one's okay but that one isn't.' "

Peter Grace talks numbers, but is really selling a dream. Not everyone buys it, of course, and some would like to see it consigned to the waste pile where other celebrated reports, such as the Kerner Commission's, seem to lie.

Says Rep. Charles E. Schumer (D-N.Y.), a member of the House Budget Committee: "Just like [with] Ronald Reagan, life just isn't that simple. Sure, you can point to some of the most egregious bits of waste . . . The problem is not in finding them, but gathering enough political support to [correct] them."

Grace himself says 70 percent of his recommendations require congressional approval.

Another budget committee member, Rep. Pat Williams (D-Mont.), says many Grace recommendations, like higher user fees in national parks, represent a 19th-century "toll-road mentality . . . In Montana, we have more miles of roads per person than almost any other state . . . If we have to pay the cost of our highways with no assistance . . . then our taxpayers would be endangered."

Critics say Grace ignored key targets.

"For all its moral outrage at government spending," writes James Packard Love of the Center for Study of Responsive Law, "the Grace commission . . . ignored the huge waste from spending on weapons systems that are poorly suited to our nation's strategic needs." (President Reagan ordered him, Grace says, " 'Don't touch the weapons systems because we need those weapons systems.' ")

Grace's numbers are under attack.

"Misleading," says James L. Blum of the Congressional Budget Office which, working with the General Accounting Office, found that Grace's recommended cuts would yield only a third of the savings projected.

Even The Public Interest, a neo-conservative journal, published an attack on the commission's "fantasy figures" by Steven Kelman of Harvard's Kennedy School of Government.

Still, the dream.

"It's beside the point to quibble over whether the Grace commission is right to the last penny," says Burton Pines, vice president of the Heritage Foundation, a conservative think tank. "By carrying out the changes, we'd eliminate an enormous amount of waste which slows down decision making."

Grace is simply following a gut instinct in going directly to the people. J.P. Bolduc, a Grace & Co. vice president detailed to head Citizens Against Waste, says the organization will present Congress with 50 million signatures demanding action.

Of Congress, Bolduc says: "We're gonna hit those bastards with more ammunition than they've ever seen."

Well, all the talk . . . Efficiency. Policy.

Sometimes, even for a tycoon, life is just a damn mess.

On Jan. 13, 1982, Grace was in his New York office having lunch with publisher Rupert Murdoch.

Reagan called. Would Grace chair a commission?

Sure, Mr. President.

Reagan said he'll send a couple of aides up to New York right away to discuss it.

Not necessary, Mr. President. Grace quickly finished lunch and flew to Washington.

"That was the day that the Air Florida plane hit that bridge," he recalls. "Terrible. We flew in that day, and we got stuck here. We couldn't get out. We had to go to a motel with no clothes, nothing. There was no heat in the motel.

"I caught a very bad cold."