gatherings of companies and so forth that you've managed to put together but i wonder if you could just at the outset perhaps tracing your own historical development within the business and the development of the company but the function of the securities industry  both broad general terms and we could talk a little bit about some of these developments that we're going to look ahead but the brokerage houses in the merrill lynch and the other companies that are involved in that the british general function the form what their role is in terms of the broader operation of the economy and then perhaps you could weave that in with a little bit of your own historical development and could that we think that the main function of the securities industry or the brokerage business is to make aware to users of the financial products the various opportunities that they can have with their savings and give them enough diversification in what they can buy when they're the interest bearing the securities or are stocks for growth investments in real estate or insurance or in their woodies or any other kinds of products so that we can basically offer the financial consumer a choice of what he should be doing he or she should be doing based on what his or her  or their on the national security as well as working with corporate america and helping them raise money so that they can increase their productivity and the development of their products so that they you and the people on the staff of the researchers and so forth understand very well the overall workings of the economy what's developing what the good investment didn't you know these are which companies and various technologies are having a good a good chance to make a good record as w look ahead it will be very important we have a good feel for the poles of the economy over as we as we begin to look ahead i think that's you know a more for a lot of people in the company than myself being in this industry and like to think that i'm sort issues that you'd be interested in that would affect broadly the structure of the economy and that's correct the potential for a country which our company is very much tied up with there has been a process in the last few months of  f a gathering together with a number of companies it's been a process of a number of companies coming together with the term trying to reach for the hundred years or mergers and so forth has been going there were more companies are becoming fewer and fewer and i wonder why do you feel that that perhaps is happening what the why that process is going on now there's been a number of brokers how's this seem to be narrowing down to fewer and fewer larger courthouses i'm not sure entirely sure that's true but i'm just wondering why if that is true you think that might be happening this particular time the american economy i think that what you're talking about which has been a version from merger movement within the securities industry is something that has taken place over the last ten or fifteen years or rather than just the last year and i think that that's happened as our industry has come of age and had demands put on it where it's had to provide other services to the financial consumer which required better managed companies that are capitalized companies and companies that had the ability to attract the personnel resources so that they could provide that kind of product what's happened in the securities industry in the decade of the seventies when it went through a traumatic change was probably no different than what happened to the automobile industry in its early stages where there were many companies that made cars in th news that will be able to provide the financial consumer with the product that he deserves but we really don't have that many fewer companies in this industry that we had then we've had in the past and our industry has always attracted the entrepreneurial type person and as we go into hopefully better equity markets in the future i think you'll see many new companies growing up again that will be managed by your from the people that will find  to have to be able to realize the best into activity through but also for us to realize the economies of scale of the efficiencies of operation that a larger operation often do provide whether it's in automobiles or in security and i think you're absolutely  know i think that a company that can survive in free society is the kind of company that we really want in this country and you know that's what made this country strong and that's what should continue it should continue and not into the future if we could have that combination of both mentioned economies go at the pool of the economy is to apply in the financial securities industry where you have a larger overview a more a systems approach to being able to understand the broad operation of the economy that gives increasing advantage to people like o s or people that are in positions of responsibility for understanding the relationship between parts of the overall this which you can see the economy in more broadly conceived terms of a greater sense of responsibility and move in that direction and one that i should think would be  favorably seen by people in positions of greasers ones with like yourself by you know that's part of the answer were you talking about being able to attract the kinds of people that can do the research and come up with the analyses that are required to make various kinds of investment decisions and i think it's also important to have the resources where you can spend money in developing new kinds of computer software programs that will  your operation more efficient and make it less labor intensive i think it's important to be able to get the financial information out closer to the consumer which can be done through the computer these days and  of computer capability it's hard to imagine the operation of this business or the economy of the whole almost without the computer that was something they had to be taught and learn hands on he had to have an understanding of the information processing information in those trees as it were the use of information it's stepping up the whole metabolism of the economy i wonder if you things are moving more efficiently more rapidly in allowing for again the systems understanding of events more comprehensively you know it's absolutely right i started in this in this in the twenty five years ago and the average volume was about in the hatchers of the new york stock exchange and everything was done by hand the average volume today is somewhere in excess of forty million shares that could never be done and we have not had the computers we wouldn't have that have the kind of market ability that we've been in the u s markets which i think is really the best in the world so the computer really has revolutionized not only what we do today but what we're going to have to do in the future and we can use the computer to do more and more things and creating a great amount of ability for the product that we sell sure absolutely that's something that i don't i have a study one scene where something on the order of forty eight percent of gross national product information would seem almost in a certain information storage retrieval and various related systems relate to information services and that's a very high percentage of gross national product that's in fact the case we're in growing area and it's certainly a major segment in you know what is part of the gross national product in this country today and that in the whole service industries have been the fastest growing part of the american really needs to increase you know productivity and get the system moving again is basically still listening to the people from the capital intensive industries which used to represent a major segment of  in this country and both political parties are talking about tax cuts and whether it's before the election or after the election i think that's really consequential and probably in the final analysis it's going to be a tax begins to recognize the importance of savings and encourages savings and investment rather than a policy that's just designed to speed up the depreciation which is basically i think that when you come to a point in this country where people are paying upwards of seventy percent of the money that they receive in interest on their savings account or on their bond they hold the over seventy percent of what they receive the securities are going to the government is really a disincentive for that person to say and what they do is look around you know various tax you all to hear ways to get around that kind of investment because it doesn't make sense any more than the individual and i think that's a big mistake and i think that this whole concept of honor and income which is the income supposedly that people make on the money that they  of private property is a legitimate way of relating individuals or institutions to the productive ross the need somehow that the only way you would earn go because if you had something labor relationship to do that were truly the case then that could lead to a little too much consumption and i think that's when we've had too many dollars chasing too few products without the consent of it's created in the corporate side to produce those products more efficiently th have chronically for a long period of time and you think they're going to be continue a problem is going to continue to play the economy to think we may have some way of getting the other long term solution to the to the to the problems from the top of formation problems in front of the economy within a the level of inflation to wages and everything else like brazil and other countries that got into big problems the inflation that we have in our system today is something that's been built into it over a long period of time based on a system based on some of the tax laws in the direction of the tax codes and other incentives or disincentive that have been created over the past ten fifteen years i think that we started to make some progress t and hopefully that will be the policy that will be followed yeah and that in the long term if you look at the long term sent the the ability to encourage capital formation or savings so that the investment capability is there for the technologically in the knowledge base capable of doing is being hampered by the fact that there is a through through policy through government policy or from whatever purpose being hampered by that capital formation capability that  all our society and i wonder over the next five ten years out as you look out do you see a large capital formation shortfall problems in terms of allowing the technological system the only real lot of the productivity which would ultimately then would you know we're down to the to the policies that the government has created the right to capital formation and i think that we certainly have the ability to generate the capital in this country and it's a question of where it's going to be directed directed toward consumption or is it going to be directed toward investment and i think that if we were to change back some of the incentives that we took away in the investment process i think that we'd have the capital to finance development the quiet in this country i think there's a good chance in the political sense we're going to be able to find a way through to those you know those policy decisions in that order i wonder if there's some specific something that's much more conservative that they say that the floss the spending more than you take and whether it's the government or anybody else that make any sense and i think that we're thinking about that and more and more people are talking to the legislators in washington about cutting back and the government process and i have a feeling that there is  feeling that there should be pressure but on the register that is to cut back on the government process and we create the incentive for people to work hard in the senate and i'm hopeful that that's going to happen to be able to increase the strength  private sector and allow the technology to really come on line and for further progress tensional and i think the real shame in this is when you compare securities values in the united states with those in germany or japan or some other countries a nd certainly we've had many more years of history in the free enterprise system than i have and germany or japan which basically is restarted up since world war two and investors are paying twice the price for comparable securities of japanese companies or german companies and they are the u s companies because the tax laws are more favorable to investment in those countries and they are in the united states i think we should be able to see our problems and i think if we go back to where we were in this country when the country was growing and was being more productive you would see the security values here begin to approach and should suppress those of where they are now the countries and u s companies would again be able to raise capital that they need to finance the growth and development of buying madden machinery and equipment to be more effective and efficient yet to get the rate of productivity you know the best way to judge how the company is doing as well as its return on equity that's what in return the shareholders are getting yeah and we for the last five years and then number one in the industry and return stockholders equity think that's go the chairman and chief executive officer of the investment skills talking simply about the problems of the specific industry and with a look at some of the broader policy questions that are confronting the overall economy toward achieving a more healthy