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

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Hard but Clear. In the highly competitive brokerage business, Merrill Lynch naturally plays hard. Most of its rivals agree that it plays clean. Attempting to set up a computerized operation for members of the Midwest Stock Exchange in Chicago, Midwest President James Day recently called upon Thomson for advice. "I think that computers are good for the industry as a whole," said Thomson. "We'll be glad to help you out." Says Day today, after receiving the benefits of Merrill Lynch advice: "We are entering an era in which the computers are going to do everything except make love. Jim Thomson is a man capable of understanding what these machines can—and cannot—do."

While he is computerized at work, Thomson leads a quietly unprogrammed life outside his office. He and Wife Dorothy, whom he married in 1927 after a courtship that began when a mutual friend introduced them on a commuter train, live in a shyly elegant ranch house in Westfield, N.J., an hour's trip by train and ferryboat from Wall Street. Thomson, in Merrill Lynch fashion, is an eager train-and evening-out bridge player; though he has a bent-armed swing, he plays golf in the low 80s, has certificates to prove that he has thrice scored holes in one. His two children, both grown and married, remain close to the marketing place. Son Donald, 34, an Amherst graduate, is a registered representative in a Merrill Lynch New York branch office. Daughter Joan, 30, is married to a Merrill Lynch junior executive, soon to be transferred to Detroit to the same job his father-in-law held some 30 years ago. Thomson has five grandchildren; and in preparation for visits from the older ones, he maintains in his Westfield home a slot machine of the sort classically known as a "one-armed bandit." He even furnishes the kids with dimes to try their luck at the monster. Explains he: "I want to teach them that no matter what they do, they're going to lose money when they gamble."

9% a Year. To Thomson, investing in the market is no gamble, and he has statistics to prove his point. Under Merrill Lynch encouragement—to the tune of $400,000—the University of Chicago's Center for Research in Security Prices recently studied all stock-price changes since 1926, carried out 56,558,000 computerized transactions. Result: a long-term profit that varied according to tax bracket: a tax-exempt institution would have earned 9% per year on its investment since 1926; an individual in the $10,000-a-year bracket, 8.2%; and one in the $50,000-a-year bracket, 6.8% .