Grass-Roots Broker

Though brokers moaned that expenses were so high they could hardly earn their carfare, the nation's biggest brokerage house last week turned in a rosy annual report. Merrill Lynch, Pierce, Fenner & Beane (variously known to gagsters as "We, the People," "The Thundering Herd," "All This and Fenner, Too") did 9.4% of the round lot (blocks of 100 shares) trading on the New York Stock Exchange in 1948, and 12.9% of the odd-lot (less than 100 shares) business. It made a net profit of $1,704,513. This was nearly three times as much as it made in 1947. For Merrill Lynch's 84 partners it meant an average profit of $20,291.

Merrill Lynch boosted its business by going after the small investor in its 98 offices throughout the country. Just how well it did its job was shown by the geographical breakdown on its business. The Eastern states (New York, Pennsylvania, New Jersey and New England) contributed 22.7% of the total security and commodity business; the Southeastern states, 22.1%; the Middle West, 20.5%; the South Central, 17%, and the Western states, 17.7%.

Said Charles E. Merrill, the directing partner who runs the firm: "The financial industry has its roots deep in every part of the nation. America's industrial machine is owned at the grass roots* where it should be owned and not in some mythical 'Wall Street.' "

* Not all of these grass-roots owners are aware of their ownership. Last year, an aged woman walked into Merrill Lynch's Pittsburgh office with a package of yellowed stock certificates she had found in an old bureau drawer. She thought they were worthless, but had borrowed 30-c- carfare to go to the office to make sure. The stock was worth $60,000.

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