Chicago Tribune from Chicago, Illinois • 90

Chicago Qtibiincr Saturday, October, 1970' tit Section 2 'sSajgr Business fcil Ticker 1 Inflation economy rate slows to 7 growth moderate Li v. WASHINGTON AP The annual inflation rate slowed to 7 per cent during the summer and the economy grew at a steady, moderate rate, the Commerce Department said Friday. The third-quarter inflation rate was the smallest of the year and followed a rate of 11 per cent in the spring. However, other economic indicators have pointed to a new surge in price increases, and President Carter is preparing to announce new, tougher anti-inflation measures in a broadcast address to the nation Tuesday night. The Commerce Department said the economy grew at an annual rate of 3.4 per cent in the June-September quarter.

That is about average for the year and is encouraging to some government economists. THAT GROWTH RATE would mean the economy is strong enough to keep most people employed but would not aggravate inflation, they say. The 3.4 per cent third-quarter increase in the gross national product, the total retail value of the goods and services produced by the nation, followed a jump summer and that the economy would slow down. But more people got jobs and others built Up their debts as demand for both consumer and business products confined. So instead of a slump, the problem facing the administration is higher prices.

President Carter plans to announce his new anti-inflation program to the country Tuesday night. ADMINISTRATION officials have been describing the program to business and labor leaders, telling them it will include voluntary guidelines of 5.75 per cent for annual price increases and 7 per cent on wages. However, White House officials have cautioned that Carter has not made a final decision on it. Administration sources said Carter met for more than two hours Thursday with economic advisers concerning his upcoming speech. Carter and his advisers are planning to expand the staff of the Council on Wage and Price Stability to support the program, sources have said.

Tribune Photo by Roy Hall Yousif. al Hamdan, Saudi Arabian deputy minister of commerce, is heading that country's first trade delegation in the U.S. The 9-member delegation's 12-day tour includes Chicago and five other major cities. Delegation here Saudi Arabia seeks to ease trade problems of 8.7 per cent in the second quarter and a decrease of 0.1 per cent in the first quarter. However, the department said the first two quarters were disrupted by the coal strike and exceptionally cold, wet weather.

Some of the rebound continued in the third quarter. "If the strike and weather effects are set aside, real GNP probably would have increased in the range of 3 to 4 per cent in each of the quarters," the department said. THE GNP FIGURES are adjusted to account for seasonal variations and inflation. Before this adjustment to calculate "real" GNP, the GNP stood at an annual rate of $2,141 trillion in the third quarter, the department said. The economy is "basically sound and healthy, well situated for a continuation of moderate but steady economic growth," Courtenay Slater, a Commerce Department economist, said in a recent speech.

Some economists were worried that consumers would stop buying as many cars, houses and other products last ported that the slide in stock prices was feeding on itself by touching off margin calls. Rules covering trading on margin-that is, using money borrowed from brokers to buy stocks require margin calls when the value of securities used as collateral on those loans declines beyond a certain point. If a trader cannot or does not wish to put up additional collateral, then his broker must sell enough of his stock to bring his account within-requirements again. FRIDAY'S BIG BOARD volume reached 43.67 million shares, up from 31.81 million Thursday and the heaviest total since a 45.27 million day on Aug. 17.

Nationwide turnover came to 49.3 million. On the Chicago Board Options Exchange, 559 call options fell, 98 rose, and Dow plunge is record ernment officials," he said. "So we thought that if we arranged a delegation to come here, we would have nothing to do but to meet with American businessmen. We could give them immediate availability." Al Hamdan, who received a master's in business administration from the University of Texas in 1966, described the group's mission as one of establishing general contacts and ironing out business problems and misconceptions between the two countries. "FIRST WE USE the shotgun to aim at our target, then we put on the telescopic sight to zero in on specific areas," said Sari Ibrahim Islam, who heads the Jeddah-based Islam Commercial Enterprises.

The group of mostly American-educated officials had a two-day Chicago stopover sponsored by the Mid-America Arab Chamber of Commerce, which hosted a luncheon Thursday at the Marriott Hotel. According to Department of Commerce figures, U.S. exports to Saudi Arabia are estimated to hit $4 billion in 1978, up from $3.6 billion in 1977. By Janet Key THE SAUDI ARABIAN government "wiD probably" send another trade delegation to tie United States within a year that will concentrate on agricultural and food processing companies, said Yousif al Hamdan, deputy minister of commerce and head of the nine-member trade mission to the U.S. The current delegation, in Chicago as part of a 12-day trip that also included Washington, Atlanta, Houston, San Francisco, and New York, is the first the Saudi Government has sent to this country.

"We want to explain to American businessmen the commercial opportunities in Saudi Arabia because we want them to be involved," said al Hamdan in an interview Friday. "We also want, to see if they have any problems dealing with us." SINCE 1977, al Hamdan said the U.S. has sent more than 20 trade dele- gations to Saudi Arabia to drum up business contacts. "But sometimes they have difficulty in establishing contacts, in finding the proper gov Uptown Federal cuts CD rate to 8 per cent Quota plait for copper rejected President Carter has flatly rejected a proposed quota, on refined copper Ia August, the International Trade Commission' found that the U.S. copper industry had been seriously harmed by.

3 recent. flood of copper imports and recommended the quota to the President. Robert Strauss, international trade negotiator, said Friday the President cited his concern about the inflationary impact" if import restrictions were to be imposed in such a basic Copper is a critical material in electrical wire and cables, as well as irt construction, plumbing, transportation, appliances, and other sectors. The, U.S. copper industry, the world's has been depressed since 1974.

Pay-TV for CJiicago Oak Industries, said it will develop over-the-air subscription' television markets in Chicago, Phoenix, Miami, Philadelphia, Minneapolis, and Dallas. They would be independent its pay-television venture with Chartwell Communications Group in Los Angeles which; now has 88,000 subscribers. Chartwell will develop markets in six other More Oxy data needed The Ohio division of securities won't allow the proposed offer of. Occidental Petroleum Corp. for Mead Corp.

to. proceed until the plan is amended to provide "fair and full disclosure" to Mead shareholders of "all information, rhateri-. al" needed to make! a decision on accepting or rejecting the Coffer, The divi-, sion said Oxy provided inadequate data on environmental problems at a chemical plant and also failed, to Highlight risks of the three! major businesses it operates. Oxy has offered about $1 bU- lion in preferred stock for Mead, an offer rejected by Mead directors. Probing steel dumping The Treasury is beginning its first steel antidumping investigation based on information collected, through its trigger price The ease involves three steel companies from Spain, Poland, and Taiwan; The Treasury said they are selling "significant quantities of carbon steel plate" at less than trigger prices.

Some sales were as ftiuch as 48.5 per cent below the trigger Iprices, the Treasury said, but it wouldn't dis-' close tonnage or dollar amounts- The agency would only disclose that the im-'. ports below trigger prices accounted for roughly 25 per cent of total imports of 1 carbon steel plate from the three coun- tries in the May-through-August period. Mortgage rates Ho rise Chicago-area mortgage interest rates probably will be higher by next spring, according to Home Federal Savings Loan Association of Chicago. James H. Dvorak, president, isaid that while hous- ing sales continue strong, growing certainties in the money market and sluggish savings flows are causing most to trim forward loan commit-: ments.

He said factors pointing; to high-, er mortgage rates include Strength of the economy, a worsening of inflation, i continued growth of the money supply despite nign interest rates, the accelerating cost of savings capital to bome-lending institutions, Names in the news The Northside Bankers Association, composed of 46. banks, elected Herbert A. Dolowy as president for. 1978-79. Do- lowy is president of Lincoln National Bank.

Robert S. Seiler was elected a senior vice president of Allstate Life Insurance Co. He also is general counsel and secretary. Danly Machine Corp. elected James C.

Danly chairman and chief Succeeding him as president is Donald Danly, formerly a vice president. New Talnian service Talman Federal Savings Loan Asso? ciation has opened a personal financial 1 planning center at its home office, 5501 S. Kedzie Av. Services include personal financial counseling, financial i shops, a financial, reference library, and a pamphlet service. JtA i Paul Tippett elected AMC president UPTOWN FEDERAL Savings of Chicago has reduced to 8 per cent the interest it will pay on new six-month certificates of deposit.

Thomas Peter, Uptown Federal senior vice president, said Friday that his association is enthusiastic about the concept of the CDs but noted that the rate for them is approaching the 9 per cent interest rate being charged for mortgage Federal authorities authorized the new CDs beginning June 1, allowing to offer savers one-fourth of one per cent more in interest than the federal government's weekly Treasury bill auction yield. Associations currently can pay 8.811 per cent interest for the certificates, as much as 9.343 when compounded. Uptown Federal is believed to be the first major local to cut back the rate on the CD, though executives of other savings and loans say they too are disturbed by the high rates. Interest on the CDs has gone up steadily. In early August, the rate was 7.422.

DESPITE disenchantment with the CDs by some executives, Roland Barstow, president of Bell Federal Savings, said he remains bullish on the AMERICAN MOTORS Corp. gave further evidence it intends to continue building cars and that it will do so with a foreign concern as a teammate when it announced Friday the election of Paul Tippett Jr. as AMC president. Tippett, 45, formerly executive vice president of Singer Co. and president of its sewing products group, takes over the duties of Gerald Meyers, 49, who mpves up to chairman of AMC.

Riy Chapin, who only a few weeks ago said he was stepping down from active management after serving as chairman for 11 years, will stay on as a consultant. While Tippett's post at Singer harily suggests an appropriate background work, with an auto company, Tippett at one time had been director of sales an marketing for Ford of Europe, a post took after leaving Proctor Gamble Co. in 1958. In 1975 he became president of STP Corp. and the next year joined Singer.

MEYERS, at a press conference, described Tippett's hiring as the "pivotal" move in a series of management changes intended to invigorate the smallest automaker. Meyers said Tippett's international marketing experience at Ford and at for week Stock Market Oct.20, 1978 Composite table Volume 49,361,520 Issues traded 1,934 Unchanged Based on N.Y.S.E. trades Trlbunt Chart 117 were unchanged. In put trading, 26 contracts rose, 7 declined, and 14 were even. "We're taking in a lot of money under these new notes," he declared.

"Since July 1, we've taken- in $177 million. A lot of that was transferred from existing accounts, but we netted $76.5 million in brand new money. If we did not have this instrument available, all our maturing CDs would be going into Treasury bills. Then we would be absolutely out of the mortgage market unless we borrowed from the Federal Home Loan Bank at lOVi per cent interest for one year. What would mortgage rates be if we had to do that?" From Oct.

1 through Oct. 20, Bell has attracted $26.5 million in net new savings, eclipsing its full month record for inflows of $20 million set last July. THOUGH THE spread between the cost of funds and the 9 per cent mortgage rate has been reduced, "we don't need as much spread because we have a bigger volume" of lending, Barstow said. "We're delighted with the inflow. It's holding mortgage interest rates down even though the cost of capital is up.

I'll take in all the money I can." Despite cutting the rate of the six-month CDs, Peter said, Uptown Federal has not experienced a big drop-off in savings inflows. James Parsons found him in contempt of the grand jury and ordered him jailed until he agreed to testify. On Oct. 4, the U.S. Court of Appeals in Chicago upheld Parson's ruling.

PERLIN'S ATTORNEY, William J. Martin, said Perlin, 35, is willing to stay in jail "as long as necessary," to get a complete court review of the case. "He is a man of principle," Martin said. Perlin has challenged the integrity of the grand jury and the right of prosecutors to confer immunity on him without any review by a judse to determine whether the immunity grant is "in the public interest." In an interview, Martin declined to say why Perlin does not want to receive immunity from prosecution. Martin charged that the grand jury is tainted because the prosecutor leading the investigation is Michael Koblenz, an attorney with the Commodity Futures Trading Commission, which Martin contends began the investigation and referred it to the U.S.

attorney for prosecution. "WHAT YOU HAVE is a case in which the attorney presenting the evidence to the grand jury has determined beforehand that he wants an indictment," Martin charged. Federal prosecutors countered that this case did not begin with the CFTC and noted that Parsons had held a full hearing on the issue and found no evidence of grand jury abuse. 229 wm- 145 1 Dow Jones Industnals gSiSI 838.01 ptaaetiji 500 SfiJSt 97.95 N.Y.S.E. Index SiJ 54.76 -0J95 rEHS.

NEW YORK AP The stock market capped off a week of record-setting losses with another extremely broad decline in heavy trading Friday. Analysts said bad news in the latest statistics on the money supply helped to aggravate the recent flareup of concern over inflation and rising interest rates. The Dow Jones industrial average, which was above 900 a little more than a week ago, dropped 8.40 to 838.01. That brought its decline for the week to 59.08 points surpassing the previous weekly record drop of 51.78 points in the period ended Nov. 2 1973, at the start of the Arab oil embargo.

Declines once again outstripped advances by an extraordinarily wide margin, with 1,560 stocks falling and only 145 rising on the New York Stock Exchange. THE FED ISSUED data late Thursday showing a $3.8 billion jump in the basic measure of the money supply in a week. The figures reinforced the belief among many analysts that the steady rise of interest rates hasn't achieved its objective of slowing monetary growth. As the day passed Friday brokers re industry, but his international experience with Ford firms AMC's committment to continue to build autos, "AMC had to determine if it would stay in cars or go just with Jeeps," Jouppi said. "By going with a former car man and an international man, they are saying they are going the car route and now have management in place at the summit level to be a car company with international operations." It is believed one of Tippett's chief duties will be in working with Renault in establishing markets for AMC Jeeps abroad while AMC builds and markets Renault cars here.

That affiliation, however, still hasn't been finalized. THE APPOINTMENT of Tippett was one of several management changes at AMC in recent months. Wilson Sick joined AMC from Bell Howell as group vice president-finance, and James Tolley left as director of public relations for Chevrolet to take on the post of vice president-public relations for AMC. Sick took over the job held by Iain Anderson, who left to join Volkswagen last spring only two days before AMC and Renault announced their intention to affiliate. 'success' things," Lang said.

"They are very conservative. What we told our people now is to follow up on the meetings with the Japanese. We invited officials from each of the companies we met with to come to the U.S., and we are talking about going back to Japan in March to show them we have a continuing interest." Lang said that by securing contracts with the Japanese to supply them with parts and components for the replacement market here, the U.S. companies also will be getting a foot in the door when the Japnese eventually start building cars in the U.S. Honda, for example, is talking about assembling cars here in 1981.

"BUT WE DON'T see Japanese assemblies being made here for two or three years at least," Lang said. "The Japanese are very deliberate people. They are looking very closely at what's happening with Volkswagen which opened a U.S. assemlby plant here this year, "Te Japanese are very uncomfortable with any interruption of production VW recently underwent a wildcat walkout. There's been no major labor strike in Japan in 25 years.

With plants there offering lifetime employment that's a real concern to them." Companies on the mission to Japan included Borg-Warner, Stewart-Warner, Maremont, Tenneco, Motorola, Rockwell International, General Motors, Echlin Manufacturing, Sheller Globe, J. P. Stevens, and Uniroyal. Trader who won't talk grand jurors is jailed uto parts mission a Paul Tippett Jr. Formerly Ford of Europe marketing chief.

Singer, which gets nearly half of its sales overseas, was a key reason he was hired. Tippett was found by an executive head-hunting firm, Meyers said. Tippett's international experience "should compliment Renault's skills and strengths," Meyers said of the French automaker with which AMC is now trying to work out details of an affiliation. Tippett said his exposure to the European market and even his marketing of sewing machines will help him in his new job, which is to sell products. ARVID JOUPPI, Industry ani'yst with Colin, Hochstin Co.

of New York said Tippett is not well known in the auto cause delays that tie up customer's cars for as long as weeks. Lang said the U.S. companies emphasized this to the officials of Japan's seven top vehicle manufacturers. "OUR OWN studies have shown most owners of Japanese cars have service work done at a dealership because the parts aren't as readily available at independent outlets. We told the Japanese it makes good sense to produce those components here to save on transportation charges, lower overall cost of the parts because of the yen-dollar relationship, and head off U.

S. protectionism legislation. "Only slightly less than 5 per cent of, the cars on the road are Japanese, but since 12 per cent of all new cars are Japanese, there's going to be pressure on the parts after-market for those cars in the next few years," he said. Lang said the Japanese auto officials were told that "if your service collapses you won't maintain your rate of new car sales." THE JAPANESE were told what happened to Renault in the early 1960s when the French automaker sold a large number of subcompact Dauphines and overtook Volkswagen as the country's top importer. It didn't have the dealer network to supply parts or service the cars, and Renault has worked more than a decade to recover from that episode.

"But the Japanese don't jump into 'r' i. By James Mateja NO NEW BUSINESS was taken on. No contracts were signed. Yet the recent United States export development mission to Japan was a success for the nearly; 25 representatives of automotive parts manufacturers on a two-week goodwill tour. So says' James Lang, director of marketing services for the Motor Equipment Manufacturers Association which represents about 750 producers of original auto equipment and replacement parts.

''Basically what we wanted to do was three- he said in an interview. "We wanted to penetrate the market for original equipment for cars made in Japan and the after-market for replacement parts for cars sold in Japan. "BUT OUR GREATEST hope was for the replacement after-market in the 1 U.s; for Japanese cars sold through dealerships' here. That's an enormous market, more than $1 billion in sales at the consumer level in replacement Lang said. Nearly 70 per cent of, all imported cars sold, in the U.S.

are Japanese makes. Toyota, Datsun, and Honda each sell more cars here than American Motors Corp. does. And even Subaru nears the 100,000 car sales level annually. iBut for some time the complaint has been that it is far easier to buy a Japa- nese car than to have it serviced; that 1 replacement parts coming by boat can By Terry Atlas and Jay Branegan PAUL PERLIN, a commodity trader, went to jail Friday for his refusal to testify under immunity from prosecution before a federal grand jury investigating silver trading at the Chicago Board of Trade.

Perlin, son of Illinois Appellate Court Justice Maurice Perlin, reported to the federal marshal's office in the Dirksen Federal Building shortly before noon. He was to be sent to the Metropolitan Correction Center, 71 W. Van Buren St. Under law, he can be released as soon as he agrees to testify before the grand jury. If not, he could remain in prison for the remaining life of the grand jury, which could be as much as 17 months.

The grand jury is investigating the use of tax straddles by wealthy investors to cheat the government of millions of dollars in taxes. Using silver futures, for example, an investor can manufacturer a huge trading loss one year and a sure profit of the same size the next, to minimize tax rates. ACCORDING TO court documents, Perlin was granted immunity from prosecution June 14 after he pleaded the 5th Amendment before the grand jury. Perlin, a member of the Chicago Board of Trade, fought the immunity grant and continued to refuse to testify. On Sept.

8, after several days of hearings, Chief U.S. District Court Judge "Mr. Warburton', the applicants for' the new assistant's here and I believe that at least one is a college' graduate,".