Standard & Unpoor

From a set of dingy offices in a factory district on Manhattan's lower West Side, an invitation goes out each month politely but firmly summoning the head of a major U.S. corporation to appear for a discussion of his business. Only the foolhardy ever refuse. As the headquarters of the 101-year-old Standard & Poor's Corp., the unpretentious offices on Hudson Street house one of the major power centers of the U.S. financial community.

Standard & Poor's business is collecting and publishing the vital financial statistics of U.S. businesses and passing judgment on each company's worth as an investment. Even to the biggest of U.S. corporate giants, a favorable Standard & Poor's rating is a matter of crucial importance. S. & P.'s professional opinions carry near-Biblical weight with untold thousands of investors--and particularly with the amateurs who have thronged into the market since World War II. So avidly do they seek S. & P. counsel that in the last dec ade annual sales of the company's services and newsletters have more than dou bled, hitting better than $13 million. Profits, jumping even more sensationally, have gone up 68% to $1,298,000 in the last four years.

Stomach Rumblings. Standard & Poor's got its start in 1860 when Henry Varnum Poor brought out the granddaddy of investment publications, The History of the Railroads and Canals of the U.S., got its present name after a 1941 merger with the 35-year-old Standard Statistics Bureau, another investment advisory firm. Getting the facts is so important to Standard & Poor's that even dignified President Frederick A. Stahl, 57, who in 34 years with S. & P. worked his way from statistician through almost every phase of the company to the presidency three years ago, spends most of his time working his top-level contacts in big business for inside tips. As a matter of routine, every one of S. & P.'s employees is expected to report any business rumor he hears. One employee's wife, a dietitian at a major aluminum fabricating plant, reported worker unrest over the quality of food served in the company cafeteria. By the time the stomach rumblings finally erupted into a 47-day strike, S. & P. subscribers were well warned.

Most of the time, S. & P.'s 30 security analysts do not have to rely on rumor. A steady stream of solid factual data flows into Hudson Street from the company's 50 hard-probing field men across the country who make regular calls on every company that sells its stock to the public. One such call turned up, four months in advance, the invaluable news that A. T. & T. was planning a stock split. Standard & Poor's man got his scoop by cannily giving A. T. & T. executives all the reasons he could muster against a split, thus luring them into replying "Yes, but . . ."

Seductive Secrets. In the days before the Securities & Exchange Commission law made it obligatory for a public company to disclose information about itself, S. & P.'s men were often unwelcome visi tors. Says Vice President Lewis Schell-bach: "We could tell how important the information a company was hiding probably was by how hard our man bounced when he was thrown out of the president's office." But today S. & P. has the upper hand. A favorable recommendation in the company's weekly publication, The Outlook (30,000 subscribers at $65 a year), can give a good stock just the endorsement it needs to take off. The Outlook's September choice as Stock of the Month --General Motors--this week rallied to 50 3/8, a new high for the year.

S. & P.'s most important credential for dragging information out of corporations is that over the years the company has set itself up as one of two unchallenged arbiters (the other: Moody's Investors Service) of the degree of risk involved in the purchase of bonds issued by any business or governmental body. Since anything less than S. & P.'s Double B rating makes it virtually impossible to sell a bond at a reasonable interest rate, most companies welcome the chance to trot their top officers into Hudson Street's noisy, unairconditioned offices to unveil the most seductive corporate secrets to S. & P.'s analysts.

The Human Touch. Many-faceted S. & P. overlooks no way of turning its vast information-gathering facilities into profits. Among its 42 services:

> A portfolio management service (for investors with at least $140,000 to play with) that now handles securities worth $3 billion. Minimum charge: $900 a year.

> Compilation of corporate statistics and daily business news developments.

-- Standard Research, a management consultant subsidiary that does everything from exploring merger possibilities for companies to studying the market potential for window screens in Europe.

As the number of companies clamoring to sell stock to the public constantly grows, S. & P., as self-appointed adviser to the small investor, is increasingly taxed to keep informed on all of them. It is turning more and more to computers to winnow the wheat from the chaff. Com puter analysis recently made it possible for S. & P. to cull from the 6,037 stocks that it now watches a list (to be revised each month) of 200 that the company considers good for immediate growth. But President Stahl stoutly denies that the computers will ever eliminate the need for S. & P.'s lynx-eyed human analysts. Says he: "We will always need human brains for the most important factor--the subjective judgment of just how good the men in a company's management are."

This file is automatically generated by a robot program, so reader's discretion is required.