SECURITY EXCHANGES 445
to 58 purchasers, whose purchases ranged from 10 to 10,125 shares
each. The demand was so great that- the shares were allotted on the
basis of 38 per cent of the amounts ordered. As indicated, these secondary
distributions are consummated outside the exchange and after exchange
hours.
Other block distributions, known as "special" sales, take place through
the usual exchange channels. Here the offering may continue over an
indefinite period of time, as fast as the market will absorb the ?tock
without unduly depressing prices. The broker who handle? the offrring
buys the stock either for himself or for his customers. He may receive a
special commission to accomplish the sale. Again the telephone and
telegraph may be used to find buyers. The commission reports for the
year ended June 30, 1945, 82 special offerings completed through security
exchanges. These involved 984.346 shares of stock valued at $30.504,000.
Of the 82 issues sold, 46 offerings terminated within 15 minutes, 32 the
day offered, and 4 at a subsequent time. During the same- year 11 issues
of 164,075 shares were offered, but only 130,855 were sold. One offering
was terminated on the day offered and 10 at a subsequent time. Since
there is a conflict between "specials" and "secondary1' distributions, because
one uses the facilities of the exchange and the other does not, secondary
distributions are usually handled only by dealers who are not members
of the exchange on which the stock to be sold is listed.
Among the blocks of stock disposed of through special sales and
secondary distributions during 1940 and 1941 were 200,000 shares of
Commonwealth Edison, 300,000 United Gas Improvement, 100,000 Eastern
Airlines, 100,000 Standard Oil of Indiana, 180,000 Consolidated Edison,
500,000 Standard Oil of New Jersey, 250,000 S. H. Kress, 260,000 Penn-
sylvania Railroad, 200,000 U.S. Steel, and 120,000 Socony-Vacuum. The
Wall Street Journal estimates that the number of shares distributed by
special sales and secondary distributions during the first 7% months of 1942
exceeded 2,000,000, or about 3 per cent of the total sales on the New York
Stock Exchange. Brokers who use these methods of disposing of listed
stocks find that they can create an interest in their purchase where none
existed before unusual sales methods were used.
The amounts of "special" sales by years from 1941 to 1945, according to
the Commercial and Financial Chronicle,*- were as follows:
Year Amount (Millions)
1941 $390
1942 131
1943 265
1944 279
1945 446
i January 28, 1946, p. 509.