GENERAL ARTICLES

Modern Market

A camera’s-eye view of the new Toronto Stock Exchange

FREDERICK EDWARDS June 1 1937
GENERAL ARTICLES

Modern Market

A camera’s-eye view of the new Toronto Stock Exchange

FREDERICK EDWARDS June 1 1937

Modern Market

A camera’s-eye view of the new Toronto Stock Exchange

FREDERICK EDWARDS

OTHER CANADIAN cities enjoy saying snarky things about Toronto. People of Halifax and Saint John, of Winnipeg and Vancouver, of Hamilton and Montreal—oh, especially of Hamilton and Montreal—have for many years exercised their wits to point sharp arrows of satire designed to give Toronto citizens a pain in their necks. They accuse the Queen City of smugness and hypocrisy, of braggadocio and Toryism, of arrogance and self-seeking—none of them pretty attributes to pin on any community.

On the whole, this reporter, not a Torontonian but an entirely unprejudiced outside observer striving only for a sweet reasonableness in all things, believes these grave charges unjustifiable in fact. To me, Toronto appears very much like any other Canadian city trying to get along and doing the best it can for itself. Except for one thing.

I know of no other large community in the Dominion in which the spirit of civic pride is so intensively developed. It seems that every Toronto enterprise, from a string quartet to a twenty-story skyscraper, once it is announced,

becomes immediately a matter of feverish personal concern to every man, woman and child residing within the city limits, and even beyond them,in the surrounding counties.

It is not possible that such enthusiasms can always be completely satisfied. I think that Toronto achieves at least a good average of her imagined magnificences; and we are quite sure of this:

The new Toronto Stock Exchange, its design, its arrangement, its equipment, everything about it, fulfills every claim made for it during the last year and a half by Torontonians. For once, a final presentation lives up to its advance notices.

Magnificent Architecture

'"THE NEW Toronto Stock Exchange is new. It is all new. The New York Stock Exchange, larger than the Toronto structure, is a hodgepodge collection of buildings, varying in architectural design, put together over a period of years, much as a prosperous farmer will add a wing to the old homestead or raise an addition to his barn, as the need appears. The same is true of Montreal.

Until last March the industrial and mining sections of the Toronto Stock Exchange operated in separate buildings. This was a legacy of the amalgamation in 1934 of the Toronto Exchange with the old Standard Stock Exchange. The new building is the logical outcome of that merger. Its cost is stated as a bit over three quarters of a million dollars. The result is worth the money.

In one Toronto newspaper we discovered a headline, describing the new building as a “Stock Trading Temple.” After two days of wandering, open-eyed and pokey-nosed,

up, down and around its corridors, galleries, trading floor, offices and lounges, we are satisfied that the description is not extravagant. Any motion-picture press agent would scorn it as a feeble understatement.

The thing is magnificent in architectural beauty; especially in its interior, in the perfection of conveniences for the purpose for which it was designed, in the completeness of its equipment, in the compactness with which its incredibly intricate and efficient mechanisms have been installed and accommodated.

The building is located on the west side of Bay Street, just below King, not in the heart of Toronto’s financial district but on its edge, after the manner of a schoolteacher standing in a classroom but removed from the pupils. It faces due east. Five tall windows of opal glass break the flat front, and add height and distinction to the exterior. These windows, rising the entire length of the second floor trading room, supply outside light to the market sessions.

Above the ground-floor entrances, running across the front of the building at the trading-floor level, is a spectacular decoration in the form of a wide band of carved stone, illustrating in modern fashion a processional of industry. Charles Comfort designed this unusual frieze. The carving was done by Peter Schoen.

I f it amuses you to figure out the inner meaningsof mildly modernistic pictures, you can have a lot of fun with the Comfort-Schoen masterpiece, which has just about everything in it that could possibly be tied up with current industrial progress, from laborers with wheelbarrows to a banker in a top hat. There are salesmen carrying briefcases, a farmer with a sheaf of wheat under his arm, a couple of gas pumps and a pair of carrier pigeons, mixed in with chemists, a streamlined locomotive, miners, steel workers, surveyors, prospectors, loggers, an airplane and a 1937 model automobile. One of the sturdy chaps is reading a newspaper, and looking angry about it. Undoubtedly an editor.

Once inside, I could fill this issue of Maclean s Magazine with the details of the impressive architectural interior features. As things are, I can only mention such modern luxuries as stainless steel doors, cast glass newel posts on the staircases, the series of eight fine murals—Charles Comfort again—representing key Canadian industries, white leather and chrome steel furniture in the lounging rooms, cork tile floors, granite d’or marble walls, sound insulated ceilings to aid the acoustics, a restaurant, a members’ dining room and kitchens, and a complete and efficient air-conditioning plant in which four separate air-conditioning systems are incorporated.

But the lighting plan for the trading room mates beauty with practical utility to such an extent that it must have a couple of paragraphs of its own. Here is a hall of majestic dimensions—105 feet long, ninety feet wide and thirty feet high. Adequately to light such an area was a problem to tax any architect’s ingenuity, but it was done and done beautifully.

The five windows in the front wall are curved at the ceiling level and carried across the entire length. Two other bands of opal glass have been added, one on each side of the strips that continue the windows. The result is that, complementing the five daylight windows, are seven fourfoot-wide ribbons of opalescent glass. But you do not get light from dead glass, so, at the point where the windows join the ceiling strips, the installation of artificial light begins. Behind each strip are two rows of electric lamps. Indirect lights over each trading post and concealed lights over the members’ desks on each side complete the equipment. Decoratively the effect is of five broad ribbons of light in the front of the trading room, and seven similar bands in the ceiling. The result is that in every corner of the huge hall perfect lighting conditions are obtained during market hours.

That gives you a general idea of the luxurious splendor of Toronto’s new stock exchange. The more vital details are to follow; but before we get down in the basement and begin to look at the fascinating collection of miraculous gadgets which is the real heart of the whole business, it might be a good idea to find out what it is all about. What is a stock exchange, anyway?

How Trading is Done

A STOCK EXCHANGE is a market. In many respects it is a lot like the public market where the good wife shops for Sunday’s dinner. The main differences are that a stock exchange is not public. It couldn’t be; and stock exchange transactions are not made for cash, but on credit; they are not made directly between buyer and seller, but through their recognized agents.

The stockbroker is an agent. A stock exchange, then, is made up of a group of agents dealing in stock certificates on behalf of many thousands of different individuals. It makes no money on its own account. In a way, it is a dub. Its membership is limited—the Toronto limit is 113—and its members pay plenty for their privileges. Seats on the Toronto Exchange have sold as high as $100,000.

Suppose Joe Whoosis, the barber, decides to buy 100 shares of Whatzat Corporation. Joe instructs his broker to buy 100 Whatzat, at the market. “At the market” means

simply the recorded price at the time the transaction is made. In a few minutes the broker’s office will report back to Joe that he has bought 100 shares of Whatzat, and tell him what he paid for them.

So far as Joe is concerned that is that, and he spends a lot of time thereafter thumbing over the pages of his daily paper to find out if he has made a profit or if he is “in the doghouse.” He knows he has bought 100 shares of Whatzat and he knows what he paid for them; but as to how he bought them, he hasn’t the foggiest idea.

This is what happened: Somebody in his broker’s office telephoned over a private wire to the stock exchange. The phone clerk received the message and relayed to the floor member of Joe’s brokerage firm the news that 100 shares of Whatzat were to be bought at the market. The floor member found another floor member who had 100 shares of Whatzat to sell. Buyer met seller and the deal was made, right there.

In its simplest form, that is all a stock exchange transaction involves. Of course, it isn’t always so easy. A buyer may set a price below the market, or a seller may hold out for a figure above it. But in any event, the mechanism of the deal is the same.

One day’s average business on the Toronto Stock Exchange amounts to from 10,000 to 12,000 individual trades between members. There are 9,999 other Joe Whoosises demanding attention through ninety-four brokerage offices on any average day. Prices fluctuate according to a hundred outside circumstances and conditions in an hour, in a minute. Plainly there must be a lot of intricate mechanisms set up; exact, errorproof systems established. In this business time is money.

Ultramodern Equipment

J7QUIPMENT in the new Toronto Stock Exchange designed to facilitate rapid communication, is the finest in the world. They have tricks that even New York doesn’t know—yet.

The middle floor space in the trading room is filled with a series of nine trading posts, eight of them now operating, one held in reserve. Each post has six sides. They look very much like an information booth in a metropolitan railway terminal.

Approximately 460 stock issues are listed on the Toronto Exchange. They have been classified and divided among the eight trading posts. Each stock, of course, has a symbol of two or three letters.

Above each post, like a lighthouse, rises a six-sided quotation board of metal upon which colored figures are displayed, announcing the most recent quotations, bid and asked, for the stocks allotted the post. The metal figures are changed in an instant by electrical control.

Prices are set on the floor. Stock exchange prices are governed by the oldest and sternest economic law of them all—the law of supply and demand. If more people want to buy a stock than want to sell it, the price goes up. If more want to sell than to buy, the price goes down. If there is no demand, the price remains stationary.

So, if it chances that on the day when Joe Whoosis bought his 100 Whatzat, several hundred other citizens have the same idea, a demand for Whatzat is created, and the people who already own the stock are not willing to sell it at the market price. Suppose Whatzat opened at fifty. A rush of buying orders sends it to fifty-one. The moment the new price is set, it is registered on the quotation board.

At each post a quote boy is stationed—an Exchange employee whose job it is to keep track of the bids made by traders. He wears a telephone headset.

Down in the basement,tucked away in an air-conditioned room is the control board. A thousand miles of wire were required for the complicated mechanism. Four expert operators sit before four sloping keyboards, wearing telephone headsets. When a new price is made for a stock in a trade on the floor, the quote boy telephones to the control room. An operator’s nimble fingers manipulate the keys, adding-machine fashion, and the figures change instantly on the quotation board in the trading room. A monitor, like a huge blackboard, faces the operators. If they hit a wrong key—which they don’t—they can mark and correct the error at once. The whole operation is a split second affair to be timed with a stop watch.

On a raised platform behind the quotation board operators, sit the ticker operators. As changes appear on the monitor board, they are at once registered on the ticker. Exchange officials feel confident that, even during the most hectic sessions, the ticker system will be able to keep up with the market.

There are three systems whereby the telephone operator on the exchange floor can reach the floor member. Each member has a number. On the north and south walls are illuminated annunciator boards carrying the members’ numbers and a series of colored lights. The phone clerk receiving an order from the broker’s office throws a switch key. which flashes the number of the member on the annunciator board, together with a colored light signal.

An elaborate system of communication tubes through which written order slips may be sent to the trading post Continued from page 24—Starts on page 23

Continued on page 38

from the telephone desks is the second method, and just to make sure, the Exchange still maintains a staff of floor messengers who dash around as required.

Two communication tubes convey press reports right into the financial departments of the two evening newspapers.

One installation of which the Canadian National Telegraph engineers who developed it are especially proud is the dial ticker, unique with the Toronto Exchange. Discarding mysterious technicalities, it works out this way: A broker in his outside office wishes a quotation on a certain stock. He presses a button on the dial ticker in his office and dials the three-digit code

number of the stock he is interested in. At the Exchange the code number is received automatically and the bid and asked prices come along on the ticker tape in the broker’s office in a few seconds. Twentyfour brokers can dial the same code number simultaneously and receive instant replies. And any other brokers trying for the same number won’t have to wait longer than seven seconds. That’s something.

It seems there is only one thing lacking in this stock exchange. Even the Canadian National Telegraph engineers haven’t been able to work out a way to make sure that the stock you bought this morning will go up ten points before closing.