(2 of 2)
The Difference: Automation. Big brokerage houses are far ahead of the Exchange in putting automation to work. The house that hopes to be first to consolidate all its accounting processes into one computer operation is the 69-year-old firm of Goodbody & Co.. which is now phasing in an RCA 501 computer. Says Managing Partner Harold P. Goodbody: "We can't give good service today unless we 'automate.' " Goodbody. who joined the firm as a securities clerk in 1927, still remembers how during the heavy trading in 1929 he had to work straight through every other night for months to keep up with the paper work. The new automated systems have changed all that; with only small amounts of overtime. Goodbody, like other automated houses, will keep up easily.
Improved communications also help brokerage houses handle the load and keep their customers happy as well. From any of Goodbody's 39 branches outside New York City a customer's order is teletyped over A.T. & T.'s Finac network to the home office, where an operator puts it into one of the variously colored grooves in a conveyor belt to route it to the right clerk. Within minutes the order is telephoned to one of Goodbody's brokers on the Exchange floor. On normal trading days a buyer in Palm Beach can have his order executed in New York and get notification within five minutes. At Goodbody's home office the details of the transaction are punched by hand on IBM cards that are then fed into a printer that turns out the customer's confirmation notice. When Goodbody gets its 501 computer into full use. the operation will be simpler yet; the 501 will handle the calculation of the transaction,and also automatically print the confirmation.
Many brokers, cashing in on Wall Street's big volume, have already earned nearly as much in commissions in less than three months this year as they earned in all of 1960. The good news for the houses is that the computers are holding down costs so that the increased income is not being eaten up by overtime and added staff.
* The other times: on Oct. 19, 1937, when the market bounced wildly during a business downturn, 7,290,000 shares were traded; on June 9, 1945, good war news and the founding of the U.N. sparked a 6,660,000-share volume in a relatively steady market; on Sept. 26, 1955, the day after President Eisenhower's heart attack, 7,717,000 shares were traded on a sharply breaking market.