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We're standing on the visitor's balcony of the Midwest Stock Exchange. The sound you hear in the background are the voices of people who work here at the Midwest Stock Exchange. Today, Iran Chicago will do the story of the Stock Exchange, this great institution, in a great city. Our guide for today's tour of the exchange will be Mr. George Bergman, Assistant Vice President. George, before we start our tour of the Stock Exchange, suppose we start off with a general question. What's the purpose of the exchange? Well, Hugh, basically, the exchange is to provide an auction market for the purchase and sale of securities. Contrary to common impression, the Stock Exchange doesn't buy or sell any securities. It's a place where people, through members acting as agents, buy and sell shares of stock, representing the ownership of an American business. George, I think, perhaps before we start our first step in our tour, I might describe briefly what we can see from the visitor's balcony. We're looking down on the trading floor, and up to our

left is the catwalk and the great blackboard that you probably heard a great deal about. This is a room, 59 by 96, and it is two stories high. It has, as I said, a quotation blackboard, extending over the full length of the room, on the upper half of one side, which is just to our left. On this board are entered sales of stocks as printed on the ticker tape. A center section in yellow reflects sales on the New York Stock Exchange, and issues traded on both exchanges. Directly below the catwalk of the quotation board are three what they call Translux Projections of the Midwest, New York and American Stock Exchange ticker tapes. Now these ticker tapes are a record of the sales made on each exchange in the order of their occurrence. In the interest of speed and economy, symbols are used to designate the different stocks. CWE, for example, is the symbol for Commonwealth Edison

Company. On either side of the room are small, open telephone booths, rented from the exchange by member firms in Chicago. These booths are connected by private telephone lines with the member offices on the south street, and it is through these facilities that orders to buy and sell securities for customers are entered on the floor. Now, when an order is to be entered, a signal light flashes over the respective firms booth, calling the firm's clerk or broker to the phone, and every once in a while we can see the light light up, and one of the clerks rush over to the phone. At six locations on the floor are large U -shaped trading posts. Each side of the U is in itself a post at which certain designated stocks are traded. It is only in this small area that orders to buy and sell stocks assigned to that particular post can be traded, thus affording price and execution protection to all orders received on the floor. The personnel on the trading floor consists of members of the exchange, their employees, employees of the exchange, and the Western

Union ticker operator. And these individuals can be identified by the color of their codes. Members wearing white or business suit, member employees, light tan and exchange employees are wearing gray. The majority of floor members are commission brokers, and their function is to execute orders to buy or sell securities for member firms. Some firms are represented on the floor by their own partners. That is just a brief and general description of the activity taking place just below us and directly to our left. Now we're going to start with a typical transaction, George, and suppose you pick out the transaction. Well, I notice on the blackboard to your left that there was a transaction of 100 shares of Commonwealth Edison at $42 a share. Let's suppose, for example, that you were a person interested in becoming an owner of Commonwealth Edison stock. You would go into the offices of a member firm. You would enter your order

with a man known as a customer's man. It's his job to provide you with any type of information you might want regarding any security. Your order would be transmitted to the floor, a clerk, an employee of the particular firm you're dealing with, would answer the phone, receive the instructions in this case, to buy 100 shares of Commonwealth Edison at a limited price of $42 a share. He in turn would give it to a member of the exchange. The only man permitted to make a trade is a member, a man in a white coat or street clothes. And that member would go to the particular post at which Commonwealth Edison is traded. In this case, it happens to be post 3D right at this side of the room. Upon reaching the post, he would inquire of another member of the exchange, a man we call a specialist, as to the market in Commonwealth Edison. In other words, if I have a buy order, what's the cheapest I can buy stock? If I have a sell order, what's the most I can get for? And based on the

orders, which have been entered prior to yours, the specialist would call the market of, let's say, 41 and 70s to 42. Indicating that somewhere in the country, there was a present owner of Commonwealth Edison who was willing to sell his stock at $42 a share. And somewhere else, maybe at another part of the country, another individual has indicated the willingness to buy 100 shares at Commonwealth Edison if he can buy it at $41 .87. Now, these two individuals haven't agreed, so a transaction has not occurred up to this moment. Your broker, carrying an order for you to buy a hundred and forty -two fine stock available at the price, and he says, I'll take a hundred. Now, that's actually all that's happening on the floor. These orders, regardless of their point of origin, are coming in here to the floor and meet. It's an auction market. The best bid and the cheapest offering makes the market. If the broker happens to be carrying an order that fits either side of that market, we have a trade. Up to that

point, we have nothing. Well, George, suppose we start out with a purchase order and carry it on through. Where should we start first? Well, I think for purposes of explaining this thing thoroughly, it would be just as well if we went under the offices of a member of the exchange. Now we have an office up here in the building, and we can go up there, and I think we can actually trace a transaction right from its inception. All right, well, George, let's go. George, what happens in this particular room here? This is a room provided for servicing the orders of customers. As you notice, there are quite a number of employees here who, in many cases, are partners of the firm. Basically, they're all salesmen. They're here for the purpose of providing customers with any and all types of information. Regarding any security, they may be interested in. Now up here, George, we have another trans -lux machine. Is that similar to what we saw down on the trading floor?

Yes, that's exactly the same thing. Now come the Dow Jones noon stock averages. We've all heard about the Dow Jones averages, and I might read them off, 30 industrials, 479, 45, up to 52. Does that mean it's up to $2 .52? It doesn't mean dollars. The Dow Jones industrial average is nothing more than an index. It's a calculation based on 30 industrial stocks, but it does not reflect dollars. It's a barometer. Now, just briefly, George, on the left of that news machine, we see the ticker tape moving from right to left, giving quotations. Let's pick out just one. ME and L, among the upper board, and underneath that, it says BS6. What does that mean? Well, it's indicating a particular transaction in a stock. In that particular one that you happened to cite, it was a correction. Perhaps it would be best if I picked out one myself and gave you an explanation of exactly what it means. For example, JL, 47 .5. That means that 100

shares of Jones and Loughlin steel changed hands at 47 .5. I happen to notice that you mentioned quotations. Now, this does not reflect any markets on the floor. This is historical information in that it reflects a transaction having taken place at that particular price, I see. We noticed MGR, two followed by an S at 52 .5. That stock is McGraw Electric, and the significance of the two preceding the S is 200 shares at 52 .5 dollars a share. I understand. All right. Now, George, I think we better start with our actual transaction so we can get this sale explanation in complete order. How do we start that? All I happen to notice over here, that Bill Goodman, one of the salesmen, has just met a young lady at the door. It's quite possible that she might be interested in buying or selling the security, and maybe we can trace that transaction if Bill has no objection. I think we best listen it on the conversation if it's all right. I'm interested in

buying an investment stock. What would you suggest? Well, have you any preferences to stock, or do you have anything in mind? Well, I have in mind a utility stock. I was told about Northern Illinois gas. That's a very fine stock, if you'll just wait a second, I'll see what it's quoted today. So, I'll quote Northern Illinois gas. It'll take just a few seconds before Illinois gas is quoted back to Mr. Goodman, and we'll be listening in on the conversation once again between Mr. Goodman and the customer. 19 or an eighth, the eighth last. The market is 19 bed, 19 to an eighth last, and you could buy 100 shares at 19 or an eighth. Well, I'd like to buy 100 shares. Okay, if you just wait a second, I'll put the order in. I'll put the order in. Sal, here's an order. And buy a B -Y, buy 100 Northern Illinois gas at 19 and an eighth, buy it.

Now, George, the purchase has gone through. Now, what happens next? Well, this order has been transmitted to the floor, an employee on the floor of the exchange will receive the instructions, and he will, in turn, give it to a member of the exchange who will handle the actual execution of the order. How do we have to have an acknowledgement of that order, of that purchase from the floor, back to the customer here? Yes, we will be advised in a matter of minutes of the actual transaction having been completed. All right, then, if you don't mind, I'd like to go back and ask Mr. Goodman just a question or two about that transaction he just handled with Ms. Wise. There are one or two things in there that I don't quite understand. Mr. Goodman, while we're waiting for that purchase order to come through, I would like to go back just briefly and talk about that conversation you had with your customer. Now, when you were quoted the price, there were a few symbols which you were quoted from this gentleman back here. Could you explain those symbols the way he quoted them? Well, a market was quoted in 19, bid, 19 and one eighths. Yes, not just exactly what does that mean, 19, bid, 19 and one eighths. That

means that there's an order on the floor for stock at 19 to buy it. There's also an order to sell stock at 19 and one eighths. We have now become a buyer at 19 and one eighths so that the last sale will be that price. So when she okayed the purchase, why she meant that she would buy 100 shares of this stock and it would sell for 19 and an eighth that is $19 and an eighth of a dollar per share. That's correct. All right, thank you very much, Mr. Goodman. I think that transaction is just about ready to be concluded, isn't it? You brought 100 Northern Illinois gas at 19 and one eighths. Okay, Ms. Wise. We've now brought your stock for you at 19 and one eighths. We will have the stock issued in your name and send it to you. Thank you, Mr. Goodman. Could you tell me what the commission would be on that stock? A stock at 19 and one eighths, the commission will be $24 and 13 cents. Also, what is the dividend? The stock at the present time is paying 80 cents annually.

In order to get that dividend, will I have to wait for the dividend date or is that payable right now? No, the actual dividend is payable quarterly at the rate of 20 cents a share. So every three months you will receive a check for $20 from the company. The stock that I have purchased now, will I receive the dividend on it? Am I in time for that? I would have to look up to see one the next dividend as payable. You will get that one. Thank you very much, Mr. Goodman. Now, George, what happens next? While our next step is to go back to the trading floor, I think we'd best pick up the other side of this and that we will follow the transaction after its receipt of the order and the floor. We've come now to the floor of the stock exchange. The voices you hear around us are the

employees operating and working on the transactions that you heard just a moment ago. The transaction was completed on the sale of Northern Illinois gas, selling for $19 .08. We're going to pick up the other end of not that transaction because it's already been completed, but perhaps of another transaction. We're standing right next to the phones, the bank of phones now, which belong to the customers of the stock exchange. George, what are these lights that are lighting up? Well, these are used in place of telephone bells. The office has a wire connection to the floor. There's no operator in between. When the order clerk makes up a phone, one of these lights at the particular booth will flicker, indicating that there's an incoming call. I happen to know it's a lights flickering night right now. Maybe we can catch this particular trade that's coming in. Wall of the bill there. Wall of the bill there. Allied. Or 54 and three quarters of five on the Allied. All right.

500 Allied and 55 are better. Now the gentleman you just heard on the phone calling out those quotations was Mr. Saul Weiss, who is a clerk out here. Mr. Weiss, would you explain that transaction for us to just what you were doing? What are the customers upstairs want to the quotation on Allied laboratories? And I got it from the specialist on the floor here. The market was 54 and three quarters to five. Then I received a order from our office upstairs to buy 100 Allied laboratories at 55 or better. And I gave it to my broker. Now that's when you call that gentleman over and said buy it at that particular price. That's right. So much per share. 100 shares. I see. Well now George that takes care of this gentleman's operation here in this transaction. Now what's going to happen to that purchase order for Allied? Well this order is being handled now by a partner Mr. Meyerhoff as he ordered. He will go to post three at which point Allied lab is traded. And he will make inquiry of

the specialist as to the market at the time he reaches the post. He must repeat. What is the market on Allied lab because it may have changed during this interval of having received a quotation and the actual entering of an order. Well there was a time lapse and this is an auction market and markets change very rapidly. Now you suppose we can catch up with him at the post? I think so. Well let's walk over here and pick up Mr. Meyerhoff at the post that you just heard about. It's only about 25 or 30 feet away from where we were just standing. And it's right in the center of the stock exchange. Now we have reached the post in the center of the stock exchange. Mr. Meyerhoff is standing just to my left and the specialist just to my right. So we're going to listen in on this conversation to carry on this transaction. Oh what's the market on Allied laboratories? 40 orders of five. How much is offered? A couple hundred. I'll pay seven eights for a hundred. Five is the best. I'll take a hundred and five. So very good. I'd like to ask you Mr. Meyerhoff before you step away sir. If you've

just got a minute just exactly what happened there. Well this being an auction market I inquired what the bid mask was. The bid means the price that was someone is willing to pay the offer of what you could buy it at. And when I approached the post four and three quarters was bid was offered at five. Now I ask him how many shares were offered. If there was a great number of shares offered I would take a little more time and possibly try to buy it at 54 and seven eights. But being only two hundred shares offered in the general market being rather firm. That means moving up a little bit. I thought it best to go ahead and buy a hundred shares at fifty five. In other words your job Mr. Meyerhoff with this gentleman is to get the right price for your customer. Whether you're buying or selling. That's right. If we can possibly buy if he says to buy it at 55 and we can buy it at cheaper that is our function. Thank you very much sir. Very good explanation. George we talked to Mr. Meyerhoff

about his end of the transaction. But I think we ought to mention at least briefly what Mr. Bueller did. What was his activity after he took that order? Well now in this particular instance Mr. Bueller was acting as an agent for another firm. In that his sale of a hundred shares of Allied Lab at 55 was on the basis of instructions he had received. You'll notice that he has a book lying open on the post on the top of the post there on which he has a record of all of the open orders away from the market in the issue. In other words he is the market in Allied Lab and has full knowledge of all orders that have been entered here on the exchange to buy or sell this particular issue. And his transactions are on the basis taking recognition of the orders which are entered here. He may not compete at any time with an order of a customer. How we want to get back to Mr. Meyerhoff to find out about his side of the transaction. Would you tell us first of all what did you do

after you made the transaction with Mr. Bueller? Well I recorded an on the order slip that was given to me by the clerk. Armor is a seventeen to an eight. What happened there? You just answered somebody. I didn't hear any voice. We are also specialists in armor. I happen to be the specialist in armor along with my other duties. 35 and 38 -3 quarters. Let me explain what's going on here Mr. Meyerhoff. You and I are standing here having a conversation. Apparently somebody way off in the other corner of the room is yelling at you. How do you hear that voice? Distinguish it from all the other voices that are going on. Wow. You get that through years of training activity up here. You get to know different people's voices and the things that they are asking for. I mean it becomes almost second nature that you can decipher the things you want to hear from the noise that is apparently going on. It really isn't noise but it's it's mechanized activity that's taking place all the time. And you hear it even while you and I are

having a conversation. To the outsider it may appear a lot of jumble in noise but it's really activity that is taking place all the time that all of us understand because we've been doing it for so many years. Well now to get back to that original transaction and I hope we can get this explanation over before you have another somebody call you out. But anyway you actually bought a hundred shares of Allied at 55 from Mr. Bueller. Now how do you get that back to your customer? I recorded that on the slip or the order bank that the clerk gave me. Now that was really a verbal contract that I made. You never see the actual stock certificate on the floor of exchange. The details of the receipt or delivery of the stock is handled by the Midwest clearing corporation and then through the cashier department of my firm. They arranged for the receipt and the payment of the stock for the customer. Well then that verbal order is binding.

Yes binding as if it were done by in quarter with a half a dozen lawyers present in a 16 -page country. Very good Mr. Meyerhof. Now the transaction is completed and the customer knows that he bought a hundred shares at 55. That's right. Thank you very much sir for helping us out. Well now Georgia a few things that are left out while we've gone through this transaction and talked quite a bit about it. All around us is a flurry of activity. Now that one transaction is only one of many and it gets up on this moving board up here. Now why don't we talk about that for a minute. This apparently is a ticker tape moving across that trans luxe. How does this transaction bought a hundred shares at 55? Get up on that ticker tape. The exchange has employees stationed around the floor at various locations. Now when this transaction occurred I don't know whether you noticed it or not but there was a recorder. An employee of the exchange standing in attendance at the

post and he was aware of what was happening. So that as it happened without any instructions from anyone he wrote up a slip which indicated the symbol of the issue which in this case is ALD. The number of shares involved 100 and the price per share of 55. He would then deliver it over to the other side of the room where an employee of the Western Union telegraph company would put it out on the ticker. Why don't we go over there and take a look at that. As we walk over here it's only a few feet away. I might describe the fact that we're walking by that large setter post that we were talking to Mr. Meyerhoff at and also Mr. Bueller. Now the gentleman that took the slip right over here to about 20 feet away from where we were standing so he doesn't have much of a trip to make. On that slip he has recorded sold 100 shares of Allied at 55 and this gentleman over here is sitting here at this keyboard. Now George is this the gentleman that's going to type that out. Yes as you

noticed when the slip was brought over here it was again time stamp on this machine. Yes. Every individual handling of an order the completion of the transactions is all time stamp at every step. Now when he receives the slip as he's now doing he sends it out on a machine which is basically nothing more than a typewriter and it's automatically printing on the ticker. Let's listen to that George. You'll notice it's coming across the tape now ALD 100 shares at 55 dollars a share and up on the screen the trans select screen on the left hand side the Midwest screen. You'll notice it's now moving across the tape where all the members on the floor can see it ALD 100 at 55 and it's also appearing in the office at the same time. In other words the customer that bought that stock gets public notice of the fact that the transaction having been made on the floor of the exchange. This is all public information. This transaction also is on the same board

in other stock exchanges throughout the city is that right? Wherever there is a Midwest stock exchange ticker installation they are aware of this transaction having taken place. We can walk out here to the center of the stock exchange and look up above us over that catwalk at the big board the blackboard that we mentioned earlier in our broadcast. All of the quotations are listed up there. Why don't we start over there to the left and move on down George and you tell us what that blackboard does rather briefly. Well here let's follow our example this morning you remember we followed a transaction of 100 Northern Illinois gas at 1918. If you'll notice in the second panel about the 15 stock down we have the name slat Northern Illinois gas. Now all the indications to the right of that name are transactions that have occurred on the floor of the exchange today. As you'll notice there were trades at 1918 and at 19 dollars a share and then the last sale price was 300 shares at 1918. Now that 100 shares the young lady bought is included in that. This is a historical

record of sales that have occurred on the floor. Now the transaction in LA Lab is also up on the board as you'll notice. And it keeps the transactions for every stock then. That's right every issue traded on the exchange. All of the transactions occurring in the current day are posted to the right of the name of the stock. The previous sale on the day prior is to the left of the name. That's for the information of the men on the floor so they know what the stocks are doing. We are now in the office of Mr. James Day, president of the Midwest Stock Exchange. Mr. Day we have completed our tour of the exchange but before we leave we would appreciate a comment from you. Yes I would like to comment and most particularly to thank you Mr. Hill and your team for making a very thorough coverage of the operations of our stock exchange. We are hopeful that your explanation has been of interest to your listeners. To all of them we would like

to extend an invitation to visit the exchange. They would be most welcome during the hours of operation which run from Monday through Friday, starting at 9 a .m. and closing at 2 .30 p .m. Your program today in my judgment is very much in the public interest. For the very logical reason that the more knowledge everyone has about investments the better off they will be in planning for their future. As a matter of fact it has often occurred to me that we'd all be better off if majority of our people knew as much about investments as they do about the relative merits of the teams in the national league. We are going to try to help this idea along by conducting an open forum on the floor of the exchange sometime in May of this year. There will be a series of six lectures on investments in security markets open to the general public without charge.

To those in your audience who want to know more about stocks and bonds I would suggest that they get in touch with us around May 1. Thank you very much. Thank you very much. Thank you very much. Thank you. 10 state streets

on Chicago's Great Southside presents transcribed science snapshots focusing on the important and interesting science news stories of yesterday and today. Each fall folks who get a thrill out of masses of color revel in the rich pageantry of the woodlands in autumn. Autumn

begins when the sumac's turn magenta and crimson and when the smaller species of trees and the