Each December, employees of U.S. News & World Report (hereafter: USNWR) leave their desks and troop down to the entrance hall, where they pick up free Smithfield hams or free turkeys -- Christmas presents from the company. They load this paternalistic bounty into the trunks of their cars, kept in the free parking lot, and then return to work in tiny offices overlooking Rock Creek Park.

Some refer to their employer jocularly as "the plantation." Also "Snooze." It's one of the most unusual, and successful, journalistic enterprises in a city full of them. USNWR is worker-owned but not worker-run . No communism down among the pea-green partitions, please!

The typical reader of USNWR is not a Republican dentist in the Midwest, but a married business manager or professional person who attended college, earns $35,000 a year, owns his own home and survived his mid-life crisis.

Of the 21 magazines with circulations of 2 million or more, USNWR's mostly 40ish subscribers are first in individual and household income and in ownership of homes worth more than $100,000. Eleven percent of those subscribers are presidents or directors of corporations. They read the hard news, according to the folks who put it out, solely for information .

"We're not cutesy," says the editor, Marvin Stone, of his product, his feet propped on the coffee table in his fifth floor corner office. Stone has a blunt, assertive nose and intelligent eyes. He drives a blue-and-gray Seville and scrawls devastating comments in the margins of stories that cross his desk, along with the power monogram, MLS. "A lot of journalists in Washington still think of us as the old, tired conservative U.S. News of 10 years ago. They say that because we're serious we have to be conservative. Well, we go right down the middle."

Right down the middle! Now that's news! USNWR's more than 2 million subscribers and 7 million "pass-alongs" -- those who read it secondhand in doctors' offices and board rooms -- may not have got the message. "Whenever I talk to subscribers outside Washington about the magazine," says one USNWR writer, "I get the feeling they're talking about another publication."

The number of readers has steadily increased, despite a tripling of subscription rates in eight years. "We finally decided we couldn't walk and chew gum at the same time," says Samuel Keker, the new chairman of the board, meaning that the magazine couldn't increase circulation and continue to have big subscription rate increases.

The increase in subscriptions has stabilized at about 2.5 percent a year. That devoted, up-scale readership buys a lot of cars, cigarettes, booze and life insurance, top advertising categories at USNWR. Forty percent of the ads are for corporate promotion. USNWR's $250 million real estate development project, a book publishing enterprise, newsletters and high-tech investments have all made the magazine such a good investment that Dewitt Wallace, founder of Readers's Digest, Joe Allbritton, banker and publisher, and the Gannett newspaper chain have all expressed an interest in buying it.

USNWR is third among newsweeklies in circulation. "I haven't really looked at it," says the editor of the Columbia Journalism Review, "but I know it exists." Chris Welles, director of the Bagehot Fellowship Program at Columbia University's Graduate School of Journalism, who writes about the business press, says USNWR "tackles controversial subjects, but the analysis is sometimes thin . . . You can pick up data that you don't see elsewhere. Time and Newsweek will be lock-stepping ahead, while U.S. News will sometimes surprise you."

Its position in the print media power nexus is more solid than many people realize. "Among those I travel with, it's the most respected news magazine," says Adm. Robert Garrick (ret.), former deputy counselor to President Reagan, who runs a public relations business in southern California; he travels with corporate heavies in their sixties.

The magazine, he adds, "is well received by the administration."

Peter Hannaford, another former Reagan associate who now swings like a bicoastal Weissmuller through the arboreal heights of politics and public relations, says, "To appear in U.S. News is to be referred to and quoted in political, business and professional circles. It has the same kind of impact, in a much narrower sense, as appearing on the cover of Time."

Both the success and the personality of the magazine are linked to the founder, David Lawrence, himself a reporter with only one good eye ("It must have been the right one," says a USNWR correspondent). Lawrence was obsessed with news. He kept his jacket pockets crammed with tape from news ticker machines installed in his office and his four homes; all he ever talked about was news. It was news that took him, the son of an immigrant tailor, from Buffalo to Princeton, where he worked as the Associated Press correspondent while a student. Woodrow Wilson, the university president, authorized a loan to Lawrence, who beheld the meaning of life not in the words of future presidents of the United States, nor in the works of Aristotle, nor in Renaissance paintings, but in . . . The Congressional Record!

"He was entranced by all the news in it," says John Sweet, former chairman of the board of USNWR and an associate of Lawrence's for more than 30 years. When Lawrence started The United States Daily in Washington in 1926, it was as an abbreviated version of The Congressional Record. But first, says Sweet, Lawrence put a question to the hinterland that was to inform all his journalistic enterprises: "What can help you, Mr. Businessman, in Des Moines?"

In Washington, Lawrence pioneered the newspaper column, and became celebrated as an interpreter of Wilson and succeeding presidents. He wrote about government for the utilitarian benefit of Des Moiners everywhere, using his talent and money to expand that coverage. According to Joe Fromm, USNWR foreign editor, Lawrence "stumbled into being a genius" of the nascent information industry.

Lawrence viwed humanity as one enormous, news-absorbing dichotomy. "He divided the world into people who got their information with their eyes," says Sweet, "and those who get it through the ear."

He founded the Bureau of National Affairs to push specialized publications of interest to businessmen. The BNA is now a money-machine next door to USNWR. Lawrence sold it to its employees because he didn't want to be distracted from his duties at the United States Weekly, which he started in 1933.

Lawrence often took the train to New York to raise money to meet the payroll, praying on the way up and returning with bags of cash, some of it donated by John D. Rockefeller Jr. In 1946 he founded World Report, and merged the two magazines a year later.

The memo system grew out of Lawrence's contentiousness. Everyone was known by initials, and DL reigned over the magazine's enduring bureaucracy. "If you went into his office and suggested something, he'd immediately get into an argument with you," says Sweet. "But if you wrote a memo, you'd get a response within 15 minutes." Today the memos that flow through the interoffice mail look like they have been hit by cans of exploding alphabet soup because they go to so many editors.

Lawrence seems to have been indifferent to money, except as a vehicle for news. His absolute loyalty to staff prevented him from firing incompetents, and made millionaires of some people given early stock in the magazine. He and his wife wanted to donate land on their Fairfx County farm to employees so they could build their homes there and all hunker down together for Smithfield ham on the weekends. "U.S. News was like a mother and father to us," says Sybil Graves, who joined the staff in 1946, now retired.

Lawrence sold the magazine to the employees in 1962, another act of paternalism and a curious blend of utopian sentiment with free enterprise that was characterisically DL. About 85 percent of the stock is now in the profit-sharing plan, but control of the company rests with the eight-member board of directors that Lawrence planned to dominate forever .

"DL thought he was immortal," says Sweet, "and that everyone around him was immortal. The idea of death was foreign to him . . . After his first heart attack, he asked for a ticker. Here's a man under an oxygen tent, and he wants a news ticker in his hospital room." He got one.

By the late 1960s, confusing headlines striped the cover. "How South Hopes to Keep Negroes," "South Africa's Side of the Story," "Riot Outlook." Inside, small type and antiquated layout threatened even the wakefulness of zealots in Des Moines. The "Washington Whispers" section, put together by executive editor Owen Scott, Lawrence's ideological Siamese twin and a "gallus-snapping midwestern primitive," according to deputy editor George Jones, was known at the magazine as "Scotty's editorial page."

In Vietnam, U.S. troops were seen as constantly turning the corner. USNWR's correspondent, Bud Merick, had a telex machine for transmitting stories in his hotel room, a source of envy to other Saigon correspondents and the basis of allegations that Merick was affiliated with the Central Intelligence Agency. He didn't get his telex from the CIA -- he says -- but from . . . RCA! Merick says he made sure food and drink were delivered to RCA's Saigon office while it was under siege, and was rewarded when a shipment of machines arrived.

Not that USNWR was averse to hiring former CIA employees before Stone's time. Marshall Hoffman, an economic analyst for the CIA, joined the magazine in 1968, although he had no news experience. "I couldn't show them anything I had written because it was all confidential." That didn't seen to bother anyone at USNWR. "You're our kind of guy," he was told by the editor who hired him. "I was treated like a prima donna," Hoffman says. "Anytime I had an idea, it was acted upon. I had a real estate business, and I got to write a lot of real estate stories and meet big developers. It helped me with my real estate expertise."

Younger writers and editors had no direct dealings with Lawrence, but with his amanuenses. One dutifully told a young writer: "At U.S. News, we dare to be dull."

Lawrence was "the ghost of Sarasota" -- he lived in Florida -- who occasionally drifted through the barracks-like halls. He had lost touch with the culture that produced the news he loved. Jones recalls an editorial conference in the early 1970s attended by a sociologist who spoke on alcoholism. "He used the expression 'to get laid,' and Lawrence didn't know what it meant." According to Sweet, when Lawrence died in 1973 it was immediately after discussing the choice of a cover with his son, a consultant to USNWR.

"Lawrence's death allowed the magazine to float to the surface," says Jack McWethy, hired from Congressional Quarterly and part of the first batch of youngsters brought into the magazine. "If Lawrence had lived much longer, the magazine might not have." McWethy was told by one 55-year-old editor, "Don't feel bad. They called me 'boy' until I was 40." For three years McWethy couldn't understand why USNWR didn't cover the news. "We would write three graphs about an event, and the rest about the impact." Then the scales fell: USNWR was interpretive journalism. "I learned a new way to look at a story."

Dare to be dull! The young Turks, as they were called, wanted more attractive layout and a haw on the old editorial mule. After a transition period, they came up against the bearer of the Des Moines mantle and the physical embodiment of change at USNWR -- the irrepressible general editor, Marvin Lawrence (Lawrence!) Stone. MLS listened to the young Turks over long lunches at the Cosmos Club, where he was presented with a black notebook full of critical memos. Quotes from Sartre and demands for fewer cliches hovered over the fruit plates in the arthritic splendor of that exclusive male bastion.

According to Pat Oster, one of the young Turks, Stone said, "People understand cliches." And what about those interviews, he was asked -- that USNWR staple that allows interviewees to edit themselves? Stone said the Q-and-A process -- a USNWR journalistic outpost -- brought important people to the magazine who might otherwise remain mute. He was so reasonable! So respectful! "He put up with an incredible amount of bull----," says McWethy.

And he made changes: fewer headlines, full-color photographs, "takeouts" dealing with more contemporary topics and areas that had been sacrosanct because of the association with business, such as energy conservation or the environment. Magazine designers were hired, the typeface changed. Stone even stretched the venerable, heretofore untouchable "blue chip" in the upper left-hand corner of the cover clear across the page. He allowed writers he trusted greater freedom.

Then he reportedly told colleagues, "The Revolution is over," although Stone doesn't remember using the expression. "There was no revolution to begin with. It was an evolutionary process . . . I can't be held responsible for the interpretation of what I say except by my top lieutenants who know my thought processes."

What the young Turks had lived through was an Evolution ! Oster left and went to the Chicago Sun-Times because "I felt I was too young to retire." McWethy went to ABC News. USNWR was a monolith, with MLS at the top, and the idea of an arduous 20-year ascent through the gerontocracy did not appeal to the younger staffers.

Those who stayed objected to the tear sheets from old issues sent around to show a writer how a story should be handled. The same way it had been handled 10 years before . They joked about the DL method of journalism: "Simple writing for the simple-minded." "Encyclopedic writing for the sixth grader." They didn't think the Evolution was over! One of them, David Pike, legal affairs writer who came to USNWR from The Washington Star, found himself overwhelmed by THE SILENCE: "You weren't supposed to stand around in the hall and talk. It was very isolating."

Pike, science writer John Boslough and economic affairs writer Harry Lenhart had neighboring offices on the second floor, known as "the corner of hate." Unrepentant, they had T-shirts made. But a stern paternalism replaced Stone's early avuncularity. At a now-famous lunch at Blackie's, Stone told a young writer going through a divorce to remarry and quickly have children; he told Boslough, who enjoyed reading theoretical science, and whose journalistic output was considered low, "John, there's a time when you have to stop reading and start writing."

In the magazine's oral history it became the "write and rut luncheon," an unofficial declaration of priorities at USNWR. Was the Evolution really over? "People had given up on change," says Boslough. "There was a tremendous amount of tension between the younger and older staff members." Boslough is now a free-lance writer living in Arlington; Pike edits news for a paper in St. Thomas -- to the beat of calypso.

Lenhart, final member of The Corner of Hate, was criticized by Stone in the Monday morning editorial meeting for a cliche in the lead on Lenhart's story.It was the wrong cliche. "Is that what they taught you at Columbia?" asked Stone, also a graduate of Columbia Journalism School. In fact, the offending cliche had been inserted by another editor. Some say it was Stone's cliche.

"I don't like cliches," Stone insists. "We try to avoid cliches. I do talk about the use of imagery as a shortcut in relaying complicated problems, followed by analysis."

So Lenhart used the wrong image. He complained of the treatment in the genre of USNWR, the memo. About a week later, the sound of hammers disturbed THE SILENCE. Without warning, carpenters removed his wall, exposing him to the water cooler traffic. When the wall was returned, Lenhart's office had shrunk! "I guess I should have read more into that than I did," says Lenhart . . . now in Oregon.

"It was 'The Pit and the Pendulum' all over again," says an editor at USNWR. "Now whenever I go into somebody's office, I look for scratch marks on the ceiling."

There are other ways to tell if you are a candidate for the Old Wing, the Siberia of Snooze. One is lack of work when the sun starts to go down over Georgetown; another is averted eyes in the halls and editors elusive among the partitions. A 20-year veteran of the wire services hired by USNWR found that he had to waylay his editor on his way to the men's room if he wanted to ask a question. "I never had a sense of what was expected of me." His middle initial was changed to "X" because somebody else already had his initials! He was told that, in his department, if he left his window unlocked, it would be bolted shut . He had trouble emulating the magazine's style and, shortly before he left, sat before his video editing terminal until 5 a.m. trying to write a story about Rhodesia. "It was a nightmare."

Whoa! says the editors. What about the other side of the story ? Most of us under 50 like the place! "People here are treated as adults," says senior editor William Chaze, only 40. They like being able to edit their own stories right down to the wire. They like the merit raises and the stock bonuses every five years and the profit-sharing when they retire. They like the lack of flash and fancy punctuation . They don't like detailed anecdotal drivel they say fills the pages of their competitors. Who needs movie reviews and personalities, anyway? Who needs adjectives ?

"We have to slow down a new writer's metabolism," says Stone. "We're not everybody's cup of tea."

Stone's name appears on the editorials at the back of the book, which are not always calculated to please Des Moiners. The editorials have taken the Reagan administration to the woodshed for its proposed deficits and military spending. An earlier editorial that backed the Panama Canal treaty caused a large-scale cancellation of subscriptions. The editorials are rarely written by Stone. Some are written by other editors with special knowledge of a particular subject, but most come from the typewriter of . . . a retired news editor named Turner Rose, who sits in an office adjacent to Stone's. "There's nothing on that page that doesn't represent my views," says Stone. "Turner and I sometimes have disagreements, and I'll say, 'I'll do this one.'"

Story ideas feed up through supervisors to senior editors and then to Les Tanzer, the managing editor who has the office directly below Stone's. A metal grate on Tanzer's omnipresent pipe protects his three-piece suits from flying sparks, but not from the occasional ire of MLS. (The squawk box in Tanzer's office has been known to transmit Stone's expletives while Tanzer is conferring with other editors.) Hanging on Tanzer's wall are photographs of Scott, interim editor Howard Flieger, the Anthony Eden of power transfer at USNWR, and Stone. (Photo-fealty, a common rite at USNWR, allows past and present newsworthies to look over their colleagues' shoulders.)

Tanzer speaks like a conversational Uzi. "We're in the pure information business we think the message is the message, to paraphrase McLuhan . . . We're not as obsessed as newspapers with exposing corruption we break new ground in spotting trends, now also trends in culture."

The message is the message! And the message at USNWR is trends! Staffers say jocularly that if they proposed a story to be run in the "Currents" section about the second coming of Christ, Tanzer would ask, "But is it a trend?"

Tanzer also edits the "Whispers" page. "Personalities make the best 'Whispers' but not all good 'Whispers' are people 'Whispers' most people 'Whispers' aren't nasty 'Whispers' last week we had fewer people 'Whispers' than other 'Whispers.'" He gets them from correspondents and other writers, and then hands them to three editors to be graded .

"Whispers" aren't subject to the rigorous "sourcing" procedures at the magazine, where all background material must be handed in with a story, because most of them have only one source and can't really be checked. Those that receive high marks rise to the fifth floor for final grading by MLS, who enjoys the occasional complaints of inaccuracy by presidents and lesser lights. "It's nice to know you're being read."

Adds Tanzer, "The 'Whispers' page lets us get some humor into the magazine we always put the humor in the last 'Whisper.'" For instance, former president Ford used the services of a free dentist at the White House during a recent Washington visit!

Tanzer's counterpart on the foreign desk, Joe Fromm, has maps instead of photographs on his wall. He also has a squawk box, but insiders say directives from Stone are most cordial. Who wants to mess with a Gurkha? "I was too small to join the American Army in World War II -- I weighed 102 pounds," says Fromm, "so I became a Gurkha in the British Indian Army. It's the only time I've ever been the tallest man in the room."

"Joe Fromm is the eminence grise," says a colleague who respects Fromm's ferocious energy, experience and ability to talk almost as fast as Tanzer. As a young correspondent, Fromm covered the Chinese civil war and then rode the tide of revolt westward through Indochina, Burma, India, Afghanistan, Syria, Lebanon and Israel, clear to Algeria. DL hired him even though Fromm was a New Deal Democrat. He served as USNWR's chief foreign correspondent in London for 18 years, where he cofounded the Institute for Strategic Studies and joined the Garrick Club, before returning to 23rd and N streets NW.

"Fifteen years ago, U.S. News was ideological" he says, hugging an unopened menu to his chest in . . . where else? . . . the Cosmos Club, and talking for an hour before ordering. "But America is more sophisticated today, and so is the magazine . . . In every piece we've done on recent foreign policy, foreign affairs and the military, we've said that the world's more complicated than Reagan thinks. You can't blame everything on Soviet mischief . . .

"In this business it's easy to suck up to the military. I feel better when they don't like me." From ferrets out connections . "Once we know that a nuclear bomb falling on the Cosmos Club will incinerate Washington, I want to know something new. For instance, why is there suddenly a nuclear anit-war movement? . . . Weinberger is too much of a Cold Warrior. He's not learning fast enough; he could damage America's credibility."

The Richelieu of the West End! Fromm was behind USNWR's call to implement SALT II. Every week, he, Stone, Tanzer, deputy editors John Gibson and Don Reeder and maybe an assistant managing editor or two cross the street to Le Jardin for THE THURSDAY NIGHT DINNER in a secluded back room. Such a cachet surrounds THE THURSDAY NIGHT DINNER that no outsider and very few insiders have ever attended. "If you're one of the favored editors, you could join them," says one, "but nobody ever tries ."

There the next week's issue is planned. Stories are never "angled" at USNWR writers, meaning no attempt is made by the editors to influence the writer's point of view, but editorial discretion is exercised in story selection . The message is the message! Stories about bureaucratic waste, for instance, are a staple, whereas stories about corporate shenanigans are rarer than unclaimed Smithfield hams.

A correspondent for another news magazine who has watched his competitor in action says, "Some of U.S. News' stories are done well -- how much it costs to finance former presidents, for instance -- but they're not on the cutting edge of news."

The editors at USNWR say they are on the interpretive edge, their focus is government, not business, and their stance is rigorously non-partisan. "I have as many strong sources among Democrats as Republicans," says John Mashek, USNWR's political correspondent. "We don't deserve the conservative tag. It comes from people who don't read the magazine."

Covers are also part of the message . Many are straight-forwardly photogenic, but a drawing of Uncle Sam often shows up there, a determined ole gentleman staring down a bunch of foreigners ("THIRD WORLD, Uncle Sam's Tough New Stand") or shuffling along to work with his lunch bucket ("How to Bring Back Prosperity"). Of the 19 covers on Tanzer's office wall one week this spring, four dealt with communism -- including "Marxism in U.S. Classrooms" -- and one asked, "Where Are America's Allies?" (Also, the ultimate non-ideological cover: "Is Mother Nature Going Berserk?")

Stone points to more social trend, medicine, science and service stories as proof of change at USNWR. Much of the best writing is done by staffers in their early thirties and forties who have been hired during the last few years from newspapers and the wire services. Some say they would welcome a stronger pulse. Even more stylish writing! Maybe even a quantum jump into regular . . . features! Profiles!! Book reviews!!!

These stars, these closet Maoists, these youthful sundowners, include . . . Come on out here, ladies and gentlemen, and say hello! . . . What? . . . You don't want to be mentioned in print ? Why not?

"It's kind of an unofficial policy around here to keep your mouth shut," says a photographer.

It's difficult to imagine any of the younger editors playing "I'm Looking Over a Four-Leaf Clover" on a kazoo. They grow inexorably older and consequently closer to the top. Between them and the fifth floor fulcrum lies a power vacuum that causes some anxiety. Apparently no one would like to see Stone replaced, for they have no idea of what lies beyond.

"Very few editors make the sort of imprint on a magazine that Marvin Stone has made on U.S. News," says a senior editor, John Lang. "Look at what the magazine was when Stone started, and what it is today, and you have to admire him."

The Evolution lives!