State of the Market

If you bundle 1.000 healthy men who have no particular fondness for reading into one huge hall with nothing much else to do, they will probably sing, sleep or wax playful. Precisely that has occurred on the floor of the New York Stock Exchange almost every trading day for the past two months. Astonished visitors saw sights and heard sounds that would shake the faith of the blackest capitalist. Specialists dozed through raucous japery and ear-splitting versions of such old Floor favorites as "Wait Till the Sun Shines, Nellie" or "The Wearing of the Green." Oldsters yawned over backgammon, clerks wrestled and punched each other.

Dollar volume of transactions on the Chicago Board of Trade as late as last year used to run less than one-half the total on the Stock Exchange. By last June the Board of Trade was handling nearly three times the dollar volume of the Big Board. Foreign brokers are planning to garner a good slice of whatever trading is driven from Manhattan by Federal regulation. Toronto Stock Exchange tickers in Manhattan Board rooms are multiplying. A few Canadian brokers have even established Manhattan branches. Talk of any large-scale diversion to foreign exchanges is not taken very seriously, but as a defensive measure the Street last week quietly debated the possibilities of running Big Board pools from beyond U. S. frontiers. Few if any brokers can break even when a day's business averages 500 shares a member, yet some people are still willing to pay $96,000 for a seat on the New York Stock Exchange.

And on the assumption that trading was not doomed to extinction, the Securities & Exchange Commission continued to round out its organization. John J. Burns, onetime Harvard Law School professor and the youngest judge (30) ever to be elevated to the Massachusetts Superior bench, was made general counsel. Closer to Wall Street was the appointment of David Saperstein as head of the Commission's trading division, which under the gleaming eye of Commissioner Ferdinand Pecora will henceforth police U. S. stock-market trading.

Thirtyfour, Jewish and a lawyer, David Saperstein is one New Dealer who did not receive his inspiration from Felix Frankfurter and the Harvard Law School. From Columbia he returned across the Hudson to his home town of Union City, N. J., where he soon entered the firm of Platoff, Saperstein & Platoff. The Platoffs and the Sapersteins were old neighbors in suburban Weehawken. Mr. Pecora took him to Washington as his chief assistant in the Senate Banking & Currency Committee investigation. David Saperstein used to play semi-pro baseball, now loves poker and the writing of unpublished plays.

Market as Barometer. If the stock-market as a business was open to question in the past few weeks, the stockmarket as a barometer was not. Its flounderings, which last week left prices just where they were last May, speak shrilly of the confusion over the business outlook. But just as chart-watchers were about to abandon hope of ever seeing a decisive move in either direction, the market suddenly broadened one day last week with volume exceeding 1,000,000 shares for the first time in a month and a half, and prices shot downward. Year ago the day saw the end of the first roaring New Deal market when, touched off by a collapse in alcohol shares, the whole speculative structure tumbled in a swirling 9,000,000-share day.

Entering this week volume climbed to 2,000,000 shares and prices wilted. It was clear that the summer slump was running to slightly more than seasonal proportions, and more dour observers were pushing an autumn pick-up as far ahead as November. Yet retail trade and a few other lines were amazingly vital. Leon Henderson of NRA's Research & Planning division advised his superiors to ''gamble" on a substantial autumn rise, basing his opinion in no small part on such "homely indicators" as increased living room rug orders, fewer bachelors, fewer doubled-up families. More thoughtful, the Annalist pointed out that in terms of the gold dollar stock prices were hovering around Depression lows, and observed: "The outlook for the security markets over the next five or six years is a distinctly favorable one. that for the next ten to twenty months is uncertain. The forces which make for great prosperity sometime between now and 1940. although powerful, are slow-moving."

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