U.S. Business: Wall Street: A Long Look Upward

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The Name's the Same. After Merrill's death in 1956, the firm name changed again. Since, because of death or departure, no more Beanes had an interest in the company, the title of Merrill Lynch, Pierce, Fenner & Beane became Merrill Lynch, Pierce, Fenner & Smith. This honored Winthrop H. Smith, who had risen from office boy to operating manager. Three years later, in 1959, the firm made an even more significant switch. Anxious to keep its capital stable even if partners died or retired, Merrill Lynch incorporated itself, with McCarthy as president. One of the key stockholders (690 in all) was James E. Thomson, who had been hired in 1924 as a Wall Street runner by Merrill himself.

Born in Southampton, Ont., of a Scottish father and a mother of English descent, Thomson was a bright but restless student. He left Canada at 18 without finishing high school, headed south of the Canadian border, turned up at the home of an uncle in the Queens borough of New York City. Interested in figures and bookkeeping, he went to Wall Street for a job, was hired by Merrill as a runner at $14 a week. "I remember the salary well," says Thomson, whose present annual income is over $100,000. "I couldn't live on it."

Thomson soon moved into the "backstage" offices. He clerked by day, by night took accounting courses at New York University. In 1930, after E. A. Pierce & Co. took over Merrill Lynch's business, Thomson moved west to work in Cleveland and Detroit; in the depth of the Depression, he and other employees were sometimes paid in scrip (which was good for food) instead of cash. After the 1940 reorganization, Thomson moved back to New York, where he worked under, and eventually succeeded, his longtime friend Mike McCarthy as head of operations, the paperwork part of the business.

Success & Savings. Under Thomson, Merrill Lynch's backstage today is the most highly automated and most economical operation on Wall Street. As a junior executive in the 1940s, he began fretting about all the time that it took to move paper back and forth between front office and back. He thereupon introduced a conveyor-belt system that cut paper shuffling (and costs). In 1956, the firm moved boldly into computers. Strange as it may seem, Wall Street, which certainly has pressing need of computers, was slow to get into the electronic act; the New York Stock Exchange itself is still in the midst of conversion from a hand-run system to a computerized operation.

In this area, Merrill Lynch leads the Wall Street field by miles. By day, its computers direct orders and confirmations to and from trading floors, provide up-to-the-second quotations on 490 over-the-counter stocks and computerized estimates on the value of 2,600 others. By pressing a few buttons on a desk console, a salesman anywhere in the U.S., within five minutes can get back a computerized analysis of the prospects of almost any stock. At night, while human employees rest, computers handle the firm's accounting, run off customer statements, prepare monthly reports, figure margins on individual accounts, reckon Merrill Lynch's daily cash position.