Yale undergraduates who last fall were toying with the idea of installing an honor system for their exams took a setback this week so severe that the examination system came close to replacing Derby Day as a major topic of conversation among the Elis.

The trouble, according to one theory, started when one section man in Economics 10, a basic Economics Course, gave his group advance information on an examination scheduled for last Thursday. Students in that section redistributed the information to a substantial number of friends.

Word of the "leak" reached the Yale Daily News, which published the story early this week, suggesting editorially that a re-examination was warranted. The exposure caused Deans to deplore the cheating, a problem which they regard as particularly severe at Yale, while several students charged that the obscure nature of the exam was responsible for the cheating.