Stott's Scheme

The New York Stock Exchange tried out a new scheme to get more business last week, and it worked. The scheme: "special offerings," by which big blocks of listed stocks, ordinarily sold off the exchange floor, can be lured back to the ticker.

Off-the-floor sales became a problem after Britain began selling her $950,000,000 worth of U.S. stocks in 1940. Because the regular market looked too weak to handle these huge selling orders, British agents went to syndicate groups, set a style. Last year, known off-the-board sales of listed stocks were 8,420,577 shares-one month's business for the entire exchange.

But young Robert L. Stott, exchange board of governors chairman, thought all listed stocks should be sold on the floor, or what was a stock exchange for? So he cooked up the "special offerings" plan, spent ten months getting the SEC and exchange members to O.K. it. The commission on a "special offering" is six to twelve times that on regular sales, is ample incentive for any customer's man to get out and hustle. But it is less than a syndicate would charge for selling off the floor.

First test of this scheme was 2,958 shares of Bon Ami Co. B stock, an inactive issue. Last week, just 103 minutes trading time after the first ticker-tape notice flashed in U.S. brokerage offices, the last share was sold. To Stott, this was full proof that the Big Board can handle almost any stock-selling job. To the seller, it meant a big saving in commissions. Off-the-board commissions would have been around $6,000; commissions under the special offerings plan were $3,163-only 2.86% of the $110,555 deal. Thus, in effect, Mr. Stott's new plan was a price cut.

Pan American-Grace Airways inaugurated its fifth weekly South American airmail schedule. In one year Panagra (jointly owned by Pan American Airways and W. R. Grace & Co.) has increased its services between Panama and the Argentine 140%, now flies 88,952 miles weekly.

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