Dimensions of a new age; Economics in the space age

This is did mention New Age. From radio and television in the university. We are all of us newly arrived in the age of space and we have come so quickly swirling about us are powerful influences likely to have upon our lives the most prodigiously impact known to mankind in the last 500 years. Yet we can barely grasp the magnitude of these social forces. We can only guess at their meaning. What does it signify for us to live in a world of such suddenly extended proportions. Toward the ends or radio television the University of Texas has prepared this recorded radio series produced under a grant from the National Educational Television and Radio Center in cooperation with the National Association of educational

broadcasters. We present dimensions of the new age. And now here is our moderator Roderick Meyer on our program today a jet propulsion engineer and a specialist in space age investments will give us some facts and figures on economics in the space age. These may prefer ising for a while our eyes are on the skies. The missiles jets and satellites marking new paths through outer space are also tracing some unusual economic trends right here on earth to tell you about some of these developments here is Dr. Martin Summerfield professor of jet propulsion at Princeton University a director of the American rocket society and consultant to several missile firms. And I thought of what remarks I might bring to you this evening. Naturally I thought of some title. And so I think the title. Doesn't sound very startling but it would be this how an engineer looks at the rapidly

approaching space age. Now what I have in mind is to generally offer some of valuations on the basis of my experience observations of some powerful trends which exist today in general technology in engineering training in ballistic missiles and space exploration. All of these tied together I say from my experience let me tell you a little of what I have seen. I've been connected with rocketry as a researcher and as one in the business of producing rocket engines and as a teacher for I guess about 20 years now since I got out of school and when I began that was the beginning of modern rocketry in this country. That perhaps is the most impressive thing that I might say to you today is that it's all happening very fast in other professions

other lines of work. It's not often that you can say that in your short lifetime that's when it began. But in this one it is possible for people to say I remember when it began. And that means that it is likely that tremendous achievements will be obtained in several in a similarly short time in the future. In other words we have here the picture of a rapidly advancing feel. There is of course the great work of Dr. Robert H Goddard. Some of you I'm sure many of you know of him. Recently he was honored by the dedication of a museum in Roswell New Mexico where he did a lot of his pioneering experimentation. That's one phase of the beginning of rocketry. Not only the United States by the way but also in the world of experimental rocketry. But that was just one thread. It kind of almost died out because as a nation we were not yet ready to receive this new branch of science. Then after about 20 years of that work on the part of Dr.

Robert Goddard much of which was not appreciated in his lifetime and is only now being appreciated fully then I saw that there was a second beginning. I will date that around one thousand thirty nine. So now we put the history as being only 20 years. That was when under the stimulus of the approaching World War Two in the United States we decided we better take a look at new weapons of war that we might need for our own defense. And the idea of the rocket was lying around and so we picked up and then began a young rocket program a very small hesitant searching program looking for applications what can we do with it and so forth. This was in 1909 of course remember by this time the Germans had had a beginning a strong beginning and by 1939 they were from flying rather serious vehicles. But in the United States this was our beginning of modern rocketry. Well now mentioning the Germans reminds me that they would be really a third beginning to our history much as much as we did achieve during the

war during World War Two in modern rocketry. We receive a terrific impetus from the influx of information that we got from Germany in 1045 46 47 when our teams of scientists entering Germany found what they achieved. I'm learning to digest that brought it back to us here and adapted for American purposes. So our history as you wish to call it could be either 40 years 20 years or 15 years. But no any case it's probably on. Let's take a look at some aspects of this new science and technology. As I said it could be the work of an engineer on a rapidly advancing field I think the first thing you might say is something startling is happening on the industrial scene as this field of rocketry develops and let me outline just a few things that you would see if you stood back and took a perspective look over the past. Well say 20 years

when there was a lot of new companies have emerged. Companies that have a tremendous business and business and products that you didn't hear about 20 years ago or even 10 years ago many of these companies were started by young people. My contemporaries we grew up in school together. We did our experimentation together. Some of these boys were ingenious and made small inventions. They had no money and yet they became the founders of tremendous Giants today. The Atlantic Research Corporation was started by a young fellow who got his Ph.D. at MIT in 1947. He started it on the basis of knowledge that he thought was applicable to this rapidly advancing field of rocketry Jet Propulsion guided missile command center rock company started by a young man who worked for a salary at the Jet Propulsion Laboratory Cal Tech decided that he would try on his own. And now it has been acquired by Tennessee gas transmission company and food machinery company and represents a business of the order of 15 20 million dollars.

Arijit general company started by an academic group center the Cal Tech and is now a 200 million dollar a year business. Other well-established companies of the size of the ends of the field by starting new divisions. This is an interesting pattern that new divisions often are required to get into this rather different feel. It isn't something that can be readily absorbed into an existing pattern of business. For example you know the Aircraft Corporation the biggest component of which is the private New York Kraft company make of makers of turbo jet engines flying on most of the airplanes they military and civilians as the side of the end of the field and of the new subsidiary called United Research Corporation center than our Alto California the Arma corporation later acquired by the Bosch interests and become American Bosch arma. I'm a corporation originally a small company making fire control for any aircraft

weapons and for guns on ship fire control the trains the weather turns the gun on a moving target as out of the field of guidance and is now very important producer of guidance systems for ballistic missiles and space exploration vehicles the fire call a chemical company. Only a few short years ago made a small chemical and an important chemical that very few people heard about it was used as a as a sealant for integral aircraft tanks. It had a few other minor uses but hardly what you would call a major industrial factor. It was suddenly discovered that that chemical could be used ideally as a solid propellant fuel. And the company that began with I don't know five million dollars a year 10 million dollars a year business small really small company is now over a hundred million dollars a year and growing rapidly. And so it goes new companies on the scene. What else do you see when an engineer looks at the field. New materials new chemicals new products have a have emerged have zoomed to major importance. Let me illustrate this with a few examples. I wonder how

many people have ever thought that the field of perchlorate chemicals some of you have had chemistry of your the field of perchlorate chemicals might ever assume industrial importance ammonium perchlorate for example. Yet today most of the rocket propelled solid rocket propellant in the country and this is a business of several hundred million dollars a year is made from the movie into Korea. It was discovered not many years ago in a very accidental fashion. I mean its utility was discovered in an accidental fashion by an amateur chemist seeking a way to make an a rocket propellant that would be superior to the then available rocket propellant and so on his kitchen stove and I remember seeing it. He was mixing ground ammonium perchlorate with some fuels and don't any of you youngsters try it because he ran into many accidents but nevertheless he tried it this way and the discovery was made. And so from this developed an industry which is today in the solid rocket field over several hundred million dollars at least

two companies together account for 200 million dollars a year. Synthetic solid fuels are emerging based on fluoride rather novel field away of course of many of the growth of Flora chemicals Teflon and other things fluorinated greases and and hydraulic fluids and so on these are important in the aviation field and a special field of chemical engineering. But suddenly there have emerged a very important use of fluid chemicals and we may find that a good many of these can be used as fuel mines in the field of high energy rocket propellant and a number of companies that have acquired experience in the development of four of the hydrocarbons for greases and so forth will now become major factors in this fuel field. There are new metals that have emerged to become important titanium not many years ago titanium just one of the elements in the periodic table. You looked it up in the handbook when you want to find out about its properties. Today you can buy it in bars and sheets and rods and shapes and so forth. It

costs like like like anything but it can be used and it has remarkable properties for the vehicles intended to go at very high speeds. And so at high surface temperatures. We should also mention sophisticated lightweight electronic components computers the whole field of semiconductors has emerged under the stimulation of the need for working components at flight speeds and with lightweight the field of chemistry is rich with possibilities of rocket fuel. For example the X-15 burns a fuel that some of you probably would never think of as a fuel. The X-15 is the high speed airplane intended to be launched into the fringes of the atmosphere for short flights to test the ability of man to guide an airplane in the fringes of outer space. This X-15 will be rocket propelled with 50000 pounds thrust a rocket and this will burn as a fuel. Look at the money or rather interesting development. We're not necessarily confined to what might be called the picture of

the petrochemicals of the hydrocarbon fuels that come from oil and petroleum. We're going to look at the whole field of chemistry. And this is a phenomenon in the engineering stage. I should also mention that under the stimulus of the needs of the space age there have been developed new approaches to design and manufacture. I want to illustrate this or explain this in the following way first of all the designers are they is more scientists and less a traditional designer. He doesn't merely put lines on paper he doesn't merely design the way he thinks it ought to look. He is a well trained scientist he has to be to be competitive. This competition in the sharpest sense developed by the demands of high speed lightweight vehicles has spilled over into well-established industries and in fact it's not surprising to find that for example in well-established industries they employ people called Operations analysts who

mathematically survey the whole operation of a company to determine the optimum use of the men and materials and financial resources for the production of products that the company might sell. Can you imagine only a few years ago perhaps a present of a company hiring a group of mathematicians to study how he should do his business. Pure mathematicians. Well this is what's happening when the operation analysts come on the scene. Computers are entering the field. Automatic computers electronic computers are entering the scene of of the non aviation non space industry. For example refineries are being subjected to the analysis of electronic computers and in fact. The Thompson Ramo Motors Corporation for example today sells computers that will be locked into the operations of a refinery and the answers will not be given to a human being who will then target the answer given right back to the plant. So the plant adjust its own operating pressures and temperatures and so forth as required by the turn out of the computer automation in its direct sense. These are some of the spillover effects of this new space age.

Dr. Martin Summerfield professor of jet propulsion it Princeton University has traced for us the dizzying spiral of space age industry. Now we look at this contemporary industrial complex with the trained eyes of an investment counselor Mr. William S. Palmer executive vice president of the investment counseling firm of Templeton Dubrow and Vance of Englewood New Jersey. And Oksana field has brought you up to the present. And I'm going to get a. Short span of time to indicate to you our pity with which industry is developing as a result of our entry into the space age. I want to talk. Take you back a little further to emphasize a point and I want to emphasize this point because it merely tends to show the difficulty that is inherent in the selection of the securities of various companies and gauged in this be for investment with any reasonable assurance that they may be profitable

investments. What I want to do. Is quite frankly to illustrate to you the shrinkage in the time element about technological developments. I'm old enough. At this time to reminisce somewhat but I'm not too old still to dream. And I say that because I want to reminisce for a moment or two about. Various factors that have taken PE place in industry that have made significant changes in not only our own economy here but in the economy of the world. Man. Hates a vacuum in his knowledge. He is constantly seeking to fill that vacuum. The knowledge that he acquires no matter how it is it may be merely the formulation of a theory based on experience or experimentation may have no immediate application. But it is that knowledge which someday may become the basis of and a very important technological development that could have economic significance and that

development may have come generations after the theory has first been formulated. Going back. To man's effort to conquer the difficulty of communication over great distances doesn't take us too far back. Into the past. It was only a hundred two years ago today. But they started to lay in the first Atlantic Telegraph paper. I go back a hundred and two years to point up. The fact that at that time it was very difficult to communicate over long distances. Today it is commonplace for us to have perfect transmission of voice around the world. We can transmit pictures. We can do all kinds of things in the transmission of messages and so on. As Dr. Somerville pointed out 10 years ago we didn't have the

vaguest idea of of an industry that was based on space. Now today we not only have an industry which is largely backed by government money for its research and development and which is growing apace so that the obsolescence rate is extremely difficult to cope with particularly when it comes to selecting securities friend Best Buy. But that industry itself the space industry itself is throwing off other industries at an amazing right. And these are a byproduct industries. Let's take the electronics phase as one phase. It's become essential. In the production of missiles to micro miniaturize commonplace all fairly commonplace pieces of electrical equipment. My mother has been deaf for approximately 50 years. She used the hearing aid most of the time.

Twenty five years ago she had the latest hearing aid made by the Western Electric Company which of course is the manufacturing division of Bell Telephone. This hearing aid was then the latest improvement in hearing aids that had been developed by the Bell Telephone laboratories. It had a microphone three inches in diameter. The power necessary to transplant the current from the microphone to the ear piece was a 45 won't be bad right. The way to have a PA. It took two large flashlight batteries in addition so she had to carry a pouch on a belt in order to provide the power to work this thing. Along comes World War 2 and with World War Two can win especially for smaller and better electrical and electronic equipment. They develop what's known as the peanut too. In other words they made a very small radio too. They then took three of these radio

tubes and they put them into a hearing aid. Now you have a hearing aid. I got down to the size of a pack of cigarettes and it still needed an earpiece. The next development of course was the transistor the transistor made it possible for a man to have a hearing aid literally in a tie clip with just an ear piece. The next development beyond that of course has been to put them in the side pieces of spectacle frames. And I predict that it is not too far in the future that we will get into a micromanager isolation where it will be entirely possible to make an electronic. Hearing aid. There probably can be inserted in the ear completely nappies and all and probably will be just as powerful if not more powerful than the one my mother wore only 25 years ago. Now that should give you some indication of the rapidity of development that's going on all the time in these fields. Now the question Thomas.

If these bills are developing will that run with that rapidity and if. Scientists in keeping up with this missile program are making all these developments these new chemical discoveries these new discoveries in metallurgy. It is quite obvious that not one new industry is being built but many new industries are being built and that as a result of this research and development is going on. It is not only the end product that is going to be the part that is manufacturing but it is going to be the side products that come off that research and where that leads remains to be seen. So that is my role. In the investment field. I try to pick investments which in the future will prove profitable. It becomes a state exceedingly difficult and requires a great deal of imagination and foresight. We don't know what is going to happen in the future but bloody careful analysis of statistics by the application of logic to the

results. It is sometimes possible with reasonable accuracy to project what might happen under a given set of circumstances in the future. That is relatively easy with companies. That are in an established industry but don't try and do it in an industry where the obsolescence rate is not only rapid but becoming more rapid from day to day is the product of company that is making today going to be a product that is of considerable prominence or his company be producing a product that is going to make companies and his product obsolete tomorrow. It's a risk that must be faced. You have the formative years of the company when its having its struggles for existence and when it is beginning to show some growth and an indication that it is probably going to succeed and be a permanent company at that point it generally is able to get some additional capital and then its growth rate especially rapid. And that growth rate may last for a period of 10 years. Maybe longer. At the end of that period the

company over to us and its growth rate begins to slow down although it still has a growth factor. So that obviously if you buy into a mature company you will get capital appreciation over a long term of years but it will not be at anywhere near the rate of the capital appreciation that you will get if you can buy stock in a company that has gone through its formative stages and is in the first phases of its growth trend. So that is the time when we want to find these companies. But it is as you can see difficult to determine whether a company is just simply starting on this growth trend and with this rapid rate of obsolescence obsolescence is it going to be able to continue that growth trend. This is the time and to a certain extent by the quality and degree of the research and development program that the company follows. Now the reason I mentioned that is because we have seen a stock market today that has

been rising at a very steep rate and its been rising at a steep rate for a long time. And some of the star performers in the market have been some of these stocks that are very closely affiliated or directly in the so-called missile program. They have grown up rapidly because in many instances they have caught the fancy of the investing public. Who want to invest in this future age and who have a right to invest in this future age and surely because this economy that is ahead of us is a far far more flourishing economy than we have seen in the past. And if anybody thinks that we are in a downtrend and that we can no longer make a buck because Uncle Sam takes it away from us. And if free enterprise is dead then the time has come for you really to start searching our souls and getting rid of those ideas because the economy of ahead of is ahead of us is so dynamic and is going to develop so fast that it will literally I think.

Amazing when you're able to look back on it a few years from now. But getting into those and investing into the in those companies is not. A field in which one should rush blindly. So therefore while they may not be available to you certain of the elements that are available to us which enable us to form a logical opinion as to whether an investment should or should not be made there is available to all of you. If you want to take the time to dig it out if you want to take the time to discuss it with people who are in a position to advise that is if there is a means for you to inform yourselves as fully as possible concerning the possibilities of the company which you intend to invest. And when you have satisfied yourself that it is a reasonable investment then invest in it and you will deserve the profits that come to you. Of course you can

go and buy stock because it's going up. You may continue to go up if it does you're going to make a profit. You're very fortunate you're fortunate but you're not necessarily astute. So just with that warning. Believe me the investments the future is going to be great investments made in the future undoubtedly will make a great deal of money for a great many people. But unless that investing is done wisely and done carefully it can cause loss to people also. And with that word of caution I'm going to wish you success in investing in the space age because it's going to be one of the greatest ages we have us all from Mr. William as Palmer executive vice president of Templeton Dubrow and Vance investment counseling firm of Englewood New Jersey. His remarks you have just heard and from Dr. Martin Summerfield professor of jet propulsion at Princeton University. We have today learned something of the amazing economic developments in the space age.

This is the ninth in a series of programs designed to bring you a variety of information about this age of space. Do you sketch for you the dimensions of a new age for new advances in space research. We invite you to listen at the same time next week to Dr. Verner von Brown technical director of the Ballistic Missile Agency National Aeronautics and Space Administration Major General John B Madame former chief of the United States Army Ordnance Missile Command and a panel of research specialist from the University of Texas moderated by the director of the university's Ballard Coney's Research Center. Mr. J. Thompson. These programs were produced and directed by Roderick Dee Wright who serves as moderator coordinator and writer Mary Dee Benjamin. The series was under the supervision of Robert F. shaken. Jim Maher I speak.

Imagines of a new age was produced and recorded by radio television the University of Texas under a grant from the National Educational Television and Radio Center in cooperation with the National Association of educational broadcast. This is the end of Radio Network.