Fight for Business

Wall Streeters watched tensely last week as the biggest internal fight in many a year got hotter & hotter. The battlers: the New York Stock Exchange v. a powerful phalanx of nonmember investment bankers. The battle: Should large blocks of listed stock be sold on or off the floor of the exchange?

The scrap started when the exchange jolted its members, bluntly told them not to help nonmember firm Dillon, Read & Co. sell 50,000 shares of Standard Oil of Indiana in the over-the-counter market. Everybody saw red. Exchange members were sore because they were cut out of a few badly needed dollars they had hoped to make on the deal; Dillon, Read and other non-members were griped because they lost the expert help of exchange members, had to do the job all by themselves. For starting this rumpus the exchange had plenty reason: it wants to keep all sales on the floor of the exchange.

Trouble is, the regular market has often been too slow and too thin to handle large blocks of stock. But five months ago the exchange got a bright idea, set up "special offerings" (i.e., carefully prepared sales) to dispose of large blocks. So far most of these specials have gone over big. Lured by extra-fat commissions, exchange members sold 28,700 shares of General Electric in four minutes; last week they sold 10,000 National Distillers and 5,000 Hercules Powder in less than one minute each.

This week the fight still raged--the exchange appointed a special committee to probe the whole idea; non-members merely wanted the exchange to lay off. But one thing seemed certain: if the Big Board keeps up the good work on "special offerings" and revises its rules to permit corporation membership, many a nonmember firm may toss in the towel, apply for a seat.

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