Appeal to Main Street

Merrill Lynch, Pierce, Fenner & Beane is often mockingly called "The Bureau of Missing Persons." The joke has some point. The world's biggest brokerage house has 89 partners. Its downtown Manhattan office is so big that back-row customers' men use binoculars to read the tiny stock-price figures on the automatic electric board. The overhead on this and 99 other offices across the U.S. is so big, laments Managing Partner Winthrop Hiram Smith, that "it costs us $70,000 a day just to open the doors." Last week, Merrill Lynch reported that not enough business came through those doors in 1949. Profits dropped to $2.3 million, down 36% from 1948, and the partners got an average of only $14,364 apiece after taxes.

The trouble was that Merrill Lynch* was set up to do a big chain-store brokerage business, and that, for half the year, the stock market had been only as busy as a corner grocery. What was wrong, said Directing Partner Charles Edward Merrill, was that "Americans spent more than $9 billion last year for new automobiles, and yet were willing to invest only $580 million of new money for industry by the purchase of common stocks . . . People . . . did not invest because they did not know enough about [stocks], or because they thought the risk was too great."

Charlie Merrill and his partners had done their best to overcome both obstacles, and "Bring Wall Street to Main Street." Last year, Merrill Lynch explained stock-market operations to dirt farmers at state fairs (TIME, Sept. 5) and gave lectures on security management to 30,000 women in 65 cities. This year it plans to spend $420,000 on newspaper and magazine ads, almost as much as the New York Stock Exchange itself spends.

Charlie Merrill thought that stock buying could be made more attractive by eliminating such drawbacks as the double taxation of dividends. That was a campaign, he thought, which stockholders themselves should wage on Congress.

"There is no organized pressure group representing investors," he complained. "Yet there are more than six million investors who could make their voices heard from coast to coast." Speaking to the stockholder on Main Street, he said: "I urge you to be your own one-man lobby."

* With no comma between "Merrill" and "Lynch." Co-Founder Merrill says that when he and Lynch first printed their letterheads in 1914 they forgot to put in a comma, have left it out ever since.

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