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With 40 years of tradition behind it, Loyola University`s annual awards dinner for the Stritch School of Medicine still has plenty of pomp and circumstance to spare.

Friday night`s benefit at the Chicago Hilton and Towers saw a procession, featuring Cardinal Joseph Bernardin among others, in which hundreds lined up to shake hands.

Guards dressed in old Spanish-type military uniforms stood on either side of a sword and medal representing the humanitarian Sword of Loyola, and the Stritch Medal, which honors an alumnus or faculty member.

Almost 30 tailor-made banners of past Sword of Loyola award winners hung in a ring around a ballroom, with such names as Danny Thomas, Helen Hayes, George Halas and Cardinal John Cody.

”This is a very joyful event,” said Bernardin, who also had a banner hanging in his name. ”This is a long tradition . . . the medical school is a wonderful institution, not only for Chicago but for the country as well.”

Close to 2,500 people helped raise $725,000 for the medical school, said awards dinner general chairman James C. Dowdle, president and chief executive officer of Tribune Broadcasting Co.

Sister Rosemary Connelly, executive director of Chicago`s Misericordia Heart of Mercy, had her Sword of Loyola banner hung alongside other winners Friday night.

”It`s a nice honor,” Connelly said. ”It`s saying that all of our

(mentally and physically handicapped) children and adults are important.”

Winning the Stritch Medal ”puts me in a group of people that I admire very much,” said Dr. Roland Cross, who retired a few months ago from Loyola`s admissions committee after 23 years. ”(The award) says the school recognizes that I`ve done a good job.”

Both winners ”really want young people to succeed,” said Rev. Raymond Baumhart, Loyola University`s president. ”And they`re both caring people.”