The Los Angeles Times from Los Angeles, California • 97

Soviets Fighting Trade War by Bartering Oil for West Machinery ti ft il I a A It SECTION I SUNDAY, SEPTEMBER 30, 1962 Business Finance Travel Automotive Complete Lists of Week's Stock Trading MtuL. -f 1 il i 1 1 ii i 1 i 1 II I 0 HA Em HI SB BH HA A Vv i -L'i'a JFU v. Past Week's Market Skid Reminiscent of Pre-May 28 BY ARELO SEDERBERG, Times Business St Finance News Staff 13 RED RIVER New pipelines such os this one in Cor-porhion mountains ore carrying millions of tons of Soviet crude oil from vast fields inside Russia to refineries on the threshold of European markets as part of Communist international trade offensive. WD Wlrtpho sr. f.fc .1 tv liSV Vi I II another respected indicator of economic health rose 5 in August and reached a level 15 above that of a year earlier.

But the market, which some economists maintain is the best indicator of all because it is the collection of all investment opinions, interpreted the net result of economic news with small enthusiasm. The fall last week put stocks quite close to their 1962 low. Standard Poor 500-stock average has 3.85 points to drop before the low again is touched; the popular Dow Jones industrial average has to drop 43.32 points before it tells us the market is again at a '62 low. The Dow Jones rail average, however, passed through its 1962 low, falling 2.11 points. Last week information from Detroit said some plants are running overtime to meet demands for 1963 cars, but auto stocks showed no particular zest.

All the major companies, however, appeared in the most active list for the week. Chrysler, fourth most active, was down IVi to 54; GM was 53, unchanged; Ford, 41, down Vi American Motors, 165b, down. Steels were acting again last week as they've acted all year: Weak. Jones Laughlin dropped lVa as its president predicted higher 1962 sales but lower earnings. also predicted a "gradual improvement" for the industry in the first quarter of 1963, but this was bal- anced by a trimmed forecast by Iieslie B.

Worthington, president of U.S. ln-July he had said 1962 steel production would amount to 105 million tons; three weeks ago, he cut it to 100-102 million: last week, he cut it again, to 98-100 million. Drugs dropped sharply. Bristol-Myers (whose chairman died Sept. 22) lost 33i; Johnson Johnson, Sterling, 334.

A spark was Friden, California maker of office machinery: It boomed up 5 on Friday, to 283i. Reason: Merger rumors, possibly with Singer Manufacturing the sewing machine maker. Singer, however, said a report it, had offered- $40 a share for Friden stock was "utterly; 1t During the week. 1,448 issue were traded. Of these, 1,071 declined and 242 advanced.

DESPITE A SLIGHT RECOVERY on Friday, a feeble stock market last week continued to decline in a manner somewhat reminiscent of the days preceding the "Black Monday" plunge of May 28. The high-priced "glamour" issues again suffered the worst. They were active and sharply lower. Polaroid, which has had a yearly high of 221, lost 10 points and ended the week at 116. It also was the week's most active stock, with 39,300 shares traded.

Litton Industries, second most active, fell 4Vi to 56, compared with a 1962 high of 641. Xerox slipped to down 1212. Us 1962 high: 166V4. IBM lost 2VA, dropping to 3534, vs. a yearly high of 5781a.

Of the 20 most active stocks, only two rose McCrory the discount chain, up Vr, U.S. Steel, up V. One, General Motors, wag unchanged. Those of a statistical turn of mind looking at last week's stock market could do some minor computations and see a similarity to the weeks preceding May 28, when stock prices plunged in a manner sensational enough to cause recall of disastrous 1929. In the 10 trading days from May 14 to May 25, the market dropped 5.4, as measured by Standard Poor's average of 500 stocks.

In the 10 days Sept. 17 to Sept. 28, the market dropped 4.8, measured by the same device. Of course, a conclusion that history repeats in the stock market may be questionable logic, if logic at all. Besides, this notion wouldn't be any fun, since investors would be fairly sure what was going to happen.

The business news backgrounding the stock market in the past two weeks was neither good nor bad In fact, it could be described as somewhat confusing. H. Ladd Plumley, in Los Angeles, warned that the U.S. gold outflow problem was still that a problem but several top- international money men" at various conferences stated without hesitation that the U.S. dollar was sound.

August durable goods orders fell 3, the government4 reported; The government also reported that housing starts St POUND A -JtXVa mTT --S Volgograd CrECHOSlOVAKIAViO- -NJIJ' OIL OUTLETS Map shows route of Soviet pipeline which wtll move crude from Kuibyshev to point near Brody in Ukraine where it wijl divide, one bronch running into Poland and East Germany and another into Czechoslovakia and Hungary. In photo at right, lP) Wirtphsfo nwo pier in giant Black-Rocks development snakes 60 miles into Caspian Sea from Baku, a major Russian oil center. Producing 3.5 million barrels daily, Soviets intend to use rich reserves key weapon in striking foreign trade agreements at expense of West. North Atwlcm Ntwi Allitne ptwto USSR Exporting 64G000 1 Barrels a Day BY CHRISTIAN HERTER JR. materials as the main Soviet method of payment.

The much advertised progress of Russian industry has still left the Soviets far short of the standards of of the most advanced Western industrial nations. But now, by exchanging oil for Western technology, they are on their way to catching up without having to divert their research efforts from military programs to industrial technology. Their highly selective purchases also provide them with models for imitation. And, to the extent that Soviet rulers are concerned with consumer requirements, the purchases help overcome domestic shortages. The Soviet bloc is well endowed with vast Past 2 WeeksThose Prior to May 28 Compared STANDARD POOR'S MAY 14.25 TIIK RACE FOR SPACE tends to overshad-ow the Kremlin's use of international trade to win the cold war.

While Soviet cosmonauts are whirling around the globe, Russian officials are busy closing trade deals with many of the great industrial nations of the free world. If the Soviets have abandoned the hope that they can dominate the world by war, the real struggle for supremacy may be taking place in the crucial area of international trade. There is reason to believe that the Soviets may hope to win the cold war by their maneuvers in international trade. While less dramatic than a double header space shot, the intensity of their trade efforts reveals the seriousness Ihey attach to this endeavor. What are the Soviets buying? Everything from complete chemical plants to coffee.

But they devote their most serious efforts to what they want most the heavy machinery and equipment that incorporate the latest technological advances. What are the Soviets selling? Crude oil is rapidly replacing lumber and other bulk raw oil reserves, and the Russians know how to get oil out of the ground quickly and efficiently. They also know that oil is readily marketable around the world, if offered at cut-rate prices or in barter for surplus commodities, or both. Soviet oil is now being thrown into the cold war in earnest. By penetrating world oil markets, Kremlin leaders are taking a big step toward their avowed objective of world domination without a shot being fired.

The Soviets strive for maximum oil sales in hard-currency markets, such as Western Europe and Japan, where they also can obtain the critical machinery and advanced technology they need. Along, with penetration of industrial markets, the Soviets resort to barter deals with the less-developed countries. The strategy here is to swap Red oil for whatever food, fiber, or raw materials the particular country has to offer. The Soviet bloc now has at least 70 trade agreements involving oil with 36 nations. Two-thirds of Red oil exports are to industrialized countries.

Western Europe in 1961 imported about 360,000 barrels a day of So- Flease Turn to Pgr 3, Col. 1 May 14 66.55 0.56 63.100.45 May 21 fiS.89 0.26 63.59 Mav 15 67.75 1.20 64.29 1.19 May 22 65.51 1.38 62.341.25 Mav 17 67.27-0.39 63.93 0.34 May 24 63.07 0.51 60.62 0.49 Mav'18 67.150.12 63.82 0.11 May 25 62.581.12 59.471.15 May 16 67.66 0.09 64.27 0.02 May 23 64.211.30 61.111.23 425 500 Stocks 425 Ind. 500 Stocks SEPTEMBER 17-28 Sept. 17 61.90 0.22 59.08 0.19 Sept. 24 59.161.16 56.631.01 Sept.

18 61.82 59.03 0.05 Sept. 25 59.54 0.38 59.96 0.33 Sept 19 61.720.10 58.95 0.08 Sept. 26 58.62 0.92 56.15-0.81 Sept. 20 61.260.46 58.54 Sept. 27 58.22 55.770.38 Sept.

21 60.32 0.94 57.690.84 Sept. 28 58.800.58 56.27 0.50 425 Ind. 500 Stocks 425 Ind. 500 Stocks ABOUT THE WRITER MR. HERTER, son of the former Secretary of State, has been manager of Socony Mobil's government relations department since 1961 and as such is a close student of the Soviet oil offensive.

Prior to that, he was general counsel of the Foreign Operations Administration, a member of the State Department's policy planning staff and an administrative assistant to former Vice President Richard Nixon, The 1962 high for the Standard Poor's 425 industrial stock average was 75.22; the low, 54.80, High for the 500 stocks average was 71.13; the low, 52.32, iY. jimi i mi mmmmmmmmmmmmmmmmmmmmmmmnmmmmm mwintm THE WORLD OF MARKETING -'-Tiff New TV BY MARTIN ROSSMAN, Times Business Finance News Staff ST1, jf vivv' 1 'A I JT IS. I 111 v1 over the years by catering to ethnic groups, bringing the elderly a breath of their homeland and'the young a hint of their forebears. Chances are you won't be able to see the 30-minute inaugural show on KMEX-TV and hear the comments of community leaders and show business personalities. Unlike Los Ange-" les seven long-established VHF (very high frequency) television stations, KMEX-TV is a UHF (ultra high frequency) station.

It will broadcast on Channel 34. You won't find it unless you've installed a special converter (prices range between $10 and $25) or unless you have one of the few. very new all-channel sets. I' Spanish. International Broadcasting which owns KMEX-TV, apparently has torn a page from the book of Newton Minow, chairman of the Federal Communications Commission, in jumping into the UHF pool.

"It is unthinkable," Minow told the National Association of Broadcasters in Chicago last April, "that the United States, now adding enough new population each year to fill a city as large as Chicago, should be satisfied to live with the restrictions of the 12-channel VHF system. Why should the country be content with 12 channels when there are 70 more' channels (UHF) of unexplored creativity and unmixed excitement ready and waiting to be used?" While this will be the lone UHF station in AT PRECISELY 3 p.m. today, a well-modulated Latin voice wuT. say: "Muy buenas tar-des, senoras senores. KMEX Television, Canal 34, inicia en estos momentos sus trans-misiones Thus will begin broadcasting for KMEX-TV, first Spanish-language' television station headquartered in Los Angeles.

Thus will begin an attempt to tap a hitherto virtually ignored buying public reckoned by some as roughly equivalent to the population of San Francisco. Market researchers estimate that the Spanish -speaking population of Southern California Within the sweep of the 192-ft. tower atop Mt. Wilson approximates 800,000. A "bonus" audience of students studying Spanish plus other bi-lingual adults could add as high as 200,000 more, researchers for a round and impressive total of 1 million.

More and more, advertisers and marketing men are eying the ethnic groups, trying to ascertain just how fertile a soil they represent. Radio stations for years have broadcast in foreign languages, and some in the East are alternating several languages by the hour. In recent years, magazines have" tended to zero in special groups, be they Spanish-speaking, Negro, jazz buff or hot-rodder. Foreign language newspapers have flourished in every metropolis in the land. Forelgn-languag theaters havt flourished the Ios Angeles area, there are two operating at Bakersfield, three in Fresno and one in San Bernardino.

Rene Anselmo, a vice president of Spanish International Broadcasting, has this to say about a station aimed specifically at what he calls "the largest Mexican community outside Mexico "Today; more and both radio and television are moving toward special-audience consideration in terms of income, interests or ethnic groups Reaching a special audience may not he as easy as going after the so-called mass, but it's infinitely more effective for the advertiser who dares to "KMEX TV programming is tailored to their culture, their background, their country of origin, We frankly aim at specific appeals. This is why there is such a heavy prepon- derence of musical shows in our schedules-some 16 hours of musical and variety shows a week. "In contrast, bullfights a source of some controversy among certain groups account for, no more than two hours weekly We also will schedule many dramatic snows, all of them reflecting, both emotionally and psychologically, the Mexican cultural background." Julian Kaufman, another SIB vice pretl fleas Turn to Ff 6, Coll mmmJ tilBllt I III CHECKOUT TIME Juan A. Alarcon, right, construction engineer on loan to KMEX-TV from Telesistema, Mexico City's huge TV production complex, ond Guillermo Gamboa check out relays and monitors prior to start of broadcasting today by ali-Spanish-languaga TV It' will broadcast on Channel 34. i it.