Shortened Hours

Stock-trading volume has been setting new records with regularity in recent years, but nothing so overwhelming as the current surge of trading has ever before hit Wall Street. Caught in a growing backlog of paper work, most brokerage offices have been unable to process and deliver stock certificates as fast as they have been bought and sold. Last week the nation's leading securities markets decided to curtail their hours to enable clerical staffs to catch up, just as they did for nine market days last August.

Starting this week and continuing for an indefinite period, trading will end at 2 p.m., 90 minutes earlier than usual, at the New York Stock Exchange, the American Stock Exchange and in the over-the-counter market of unlisted issues. Most regional exchanges have adopted similarly shortened hours. The markets also decided to close for trading on Lincoln's Birthday, Feb. 12, to give back-office workers an extra day to whittle down the logjam.

Coping with the Crush. So far in 1968, Big Board trading has averaged nearly 13 million shares a day, almost double the 1965 rate and a 38% leap from the 1967 daily average. Though no figures are available for the scattered over-the-counter market, brokers estimate that volume has risen by 70% from a year ago. The American Stock Exchange shows the most stunning gain of all: average daily volume has jumped 182% in a year, from 2,826,495 shares to 7,949,003. Last week Amex volume swelled to four successive daily records, reaching a peak of 10,160,000 shares on Thursday, highest in the Exchange's 118-year history.

To cope with that crush, Manhattan brokerages have expanded their back-office force from 22,000 to 32,000 clerks over the past 18 months. Even so, says President William Fleming of Walston & Co., "there are just not enough trained employees to handle this heavy volume." Other brokers fault the stock exchanges for clinging to manpower-wasting procedures while their members reap a bonanza of commission profits.

Ignoring the Realities. So much of the feverish activity involves outright speculation that the American Exchange last week issued its sternest warning in years. Amex ordered 650 member firms to "discourage excessive speculation--particularly in volatile or low-priced stocks." It gave brokers until month's end to report what steps they have taken to tighten sales procedures and warn customers of the dangers. Added Amex President Ralph Saul: "As new generations are attracted to the marketplace, there is a tendency to ignore the realities of investing. Speculating soundly requires getting the facts, avoiding tips and rumors, recognizing the risks and undertaking only those risks that can be afforded."

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