Obituaries Australia

Dorothy Blanchard Hammerstein, a former New York interior designer and the widow of the lyricist and librettist Oscar Hammerstein 2d, died in her sleep yesterday at her home in Manhattan. She was 87 years old.

A woman of commanding presence, Mrs. Hammerstein was considered a great beauty throughout her life. Of medium height, with bright blue eyes and, in her later years, snowy white hair, she was known for her flawless carriage and ready wit.

In the early 1930's, Mrs. Hammerstein founded an interior design business, Dorothy Hammerstein Inc., and quickly established herself as one of the most sought-after decorators on both coasts. She retired in the mid-1950's.

In 1949, with her husband and the novelist Pearl Buck, she was a founder of Welcome House (now Welcome House Adoption Sevices) in Doylestown, Pa., an organization that arranges for the adoption of children of American and Asian parents.

She was also actively involved with the Dance Theater of Harlem Inc., both as a board member and as a member of its national advisory board, from its inception in 1969 until her death.

Born in Australia Born in Tasmania, Australia, Mrs. Hammerstein was one of five daughters of Henry James Blanchard, a master mariner, and his wife, the former Marion Parmentier. At the age of 23, Dorothy Blanchard left Melbourne for London, seeking a movie career. Meeting with little success, she decided to return to Australia by way of New York.

In Manhattan, she joined the cast of ''Charlot's Revue,'' an English musical starring Beatrice Lillie. When the show closed in New York, she toured the United States and Canada for a year as Miss Lillie's understudy.

In 1925 she married Henry Jacobson, a New York businessman, with whom she had two children. The marriage ended in divorce. In 1929 she married Mr. Hammerstein. The marriage lasted until his death in 1960.

Mrs. Hammerstein is survived by a sister, Eleanor Biow of Santa Barbara, Calif.; two sons, Henry Jacobson of Santa Barbara and James Blanchard Hammerstein of Manhattan and London; a daughter, Susan Blanchard of Manhattan; two stepchildren, William Hammerstein of Kent, Conn., and Alice Mathias of Harrison, N.Y.; 10 grandchildren, and five great-grandchildren.