WALL STREET: Every Man a Capitalist

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This is only one important change in the New York Stock Exchange and the men who run it. No longer is the exchange a private club, run by its president for the benefit of insiders. The modern Stock Exchange has turned itself into a quasi-public institution, well aware of its responsibility to investors. The changes did not come without protest and bitter fighting. During the 1933 congressional investigation of the market, Exchange President Richard Whitney rumbled: "The exchange is a perfect institution." He was hopelessly out of date. Congress rammed through the Securities Act of 1933 and Securities Exchange Act of 1934; the reforms were put through with the help of Broker William McChesney Martin Jr., now chairman of the FRB. By 1938, Old Guardsman Whitney was in Sing Sing, guilty of embezzling his customers' funds. In came the Young Turks, with Martin as president, to help the exchange police itself. In 1941 Emil Schram, onetime head of the Reconstruction Finance Corp., assumed the presidency and laid the groundwork for the new policy, which was summed up by a top broker: "If capitalism is to be maintained, the Stock Exchange has to be accepted by the public, a place where we can raise the capital we need. We have to get people out of the idea that the exchange is just a big gambling den."

Barefoot Boy. In pursuit of this policy, Funston took over as president in 1951 at $100,000 a year. A business-trained educator whose most important job had been president of Trinity College in Hartford, Conn, (student pop. 900), he seemed like a kind of barefoot boy in Wall Street. He knew little about the intricacies of speculative finance, still shocks brokers by gaps in his financial knowledge. But he did have a lot of ideas on how the Stock Exchange could better sell itself to the public, and he went right to work.

Among his first moves was a long-range, nationwide investment campaign: "Own your share of American business." He has doubled the exchange's advertising budget to $1,100,000 a year, still thinks it is "only a drop in the bucket, but we hope ripples will go out from it." He has set up a dozen displays around the nation, plugging share ownership, pepped up the organization's monthly magazine to a net paid circulation of 100,000, made three movies including a color film entitled What Makes Us Tick to be shown to schoolchildren, clubwomen and anyone else interested.

Out from the exchange offices have gone 12 million pamphlets, explaining how the exchange works and how to buy stocks. They caution that stock buying entails a risk, that shares can go down as well as up, that stock should be bought only after an investor has insurance, ready cash for emergencies. But again and again, the point is emphasized that a sound investment is a stake in the U.S. future. Shares should be bought for the long term, and buyers should not be scared out at a drop in the market. One result: interest in the exchange has increased so much that it is one of New York City's big tourist attractions, with more than 300,000 visitors touring it annually.