It's pretty obviously the gadget that somehow sees through clothing to reveal the S insignia on Superboy's/Superman's costume. These gadgets are referred to in the stories as X-rays, although of course they do not work the way X-rays really do. A real X-ray actually goes entirely through the person until it hits the film which then reveals the internal organs and bones. There is no reason for the device to stop at one layer of clothing. Although Superman's costume is invulnerable, it is not impervious to X-rays, at least according to this cover:
The Superboy #60 story is the more interesting of the X-ray gadget stories. When Superboy learns that a quiz show is intentionally stacking the deck against a young Smallville inventor, he helps the boy create some devices, including, ironically, the X-ray device that reveals his secret identity. This appears to predate the public revelations about the quiz show scandals of the late 1950s. I talked four years ago about an even earlier Batman story that exposed shenanigans in the genre.
In the Superboy story, the young inventor is eventually able to keep $30,000 (the amount he had accumulated before the Boy of Steel's intervention). That would be a small fortune in those days, enough to purchase a house, car and a college education.
The Superman story is less interesting; it turns out that the bearded Clark Kent is actually from another dimension, where Superman was evil and had disposed of Clark. But then we learn that it's all a trick to trap Superman in the other dimension.
By the way, in both stories, Clark is able to convince people that the actual device being used on him was actually just a projector which put the S emblem on his chest.