WALL STREET: Every Man a Capitalist

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Banker Weinberg, who had recommended Funston for two of the boards, proposed him for the Stock Exchange presidency, when ailing Emil Schram was ready to resign. The selection committee hired Funston because, as one member put it, he "represented everything forthright, was a man of such character as to immediately impress the public that the exchange was thinking more in terms of the public welfare than the securities business."

Tickers & Seats. Forthright President Funston's exchange is the world's biggest and most complex marketplace, auctioning off the securities of 1,090 U.S. companies. In a normal day's trading, nearly 2,600,000 shares of stock change hands at the rate of 100 transactions every minute. The exchange has 1,100 employees and officials, 400 of them on the trading floor itself; it has 500,000 miles of telephone and telegraph wires connecting it with 4,810 member and nonmember firms around the U.S. At trading posts, a platoon of 18 "quote clerks" give instant prices on the most active stocks to brokers phoning in over private wires; upstairs, another corps of 70 telephone operators keep track of 1,271 less active stocks. To send the news out to the world, a battery of new high-speed ticker-tape machines prints every transaction at the rate of 500 characters per minute on 800 miles of tape daily. In September's cardiac break, the tape was rarely more than two minutes late.

With the marvels of the electronic age, buying or selling from cities around the U.S. can be carried out instantaneously by the brokers of the exchange who hold seats (current price: $86,000). Only members can buy and sell stock on the exchange floor. Merrill Lynch, with eleven exchange seats and 4,600 employees in the U.S., can take an order in Los Angeles for an active stock such as U.S. Steel, wire it to one of its brokers on the floor of 'the exchange, buy the stock and report-back to the investor in Los Angeles the price he paid—all in an average time of two minutes.

The Chance-Takers. Most of the actual trading is done by some 650 brokers, but the key men on the exchange floor are the comparatively small crew of 350 "specialists." They rank among the last great chance-takers of free enterprise, are probably in the only business where a man can lose a fortune in a few hours. "They're the guys," says Funston, "who insure your always being able to find someone who wants to do exactly the opposite from what you want to do, and at a price very close to the last one quoted."

Acting both as middlemen for other brokers and traders in their own right, the specialists are responsible for maintaining an orderly, liquid market in the stocks they handle. To keep stocks from going up or down too fast, specialists must buy when no one wants to buy, sell when everyone else wants to buy. To do the job right takes millions. Top specialists can lose as much as $200,000 or $300,000 in the space of a few hours—and can make that much. During the cardiac break, the specialists gambled $80 million to put a floor under their stocks. Luckily, the market soon went up again.