Dropping the Inc.

Morgan Stanley & Co. Inc., most influential of all U.S. investment bankers, last week decided to enter the brokerage business as well. First step will be to drop the "Inc.," set up a partnership before year's end. Then it plans to join the New York Stock Exchange (barred to corporations), open retailing departments, hire customers' men, fit out a big board room.

Morgan Stanley drops its Inc. less than two years after its foster parent J. P. Morgan & Co. added one (TIME, Feb. 26, 1940). J. P. Morgan incorporated to conserve the partners' funds against estate taxes, etc., and to enter the profitable trust-company field. Morgan Stanley enters a field that can barely sustain those already in it. But Morgan Stanley has a tax reason too: partnerships avoid the 31% corporation income tax.

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