Evening star., 1941-03-25
Merrill Lynch Shows
Position
In Dull Period
Unusual Report Lists
Steps Taken to Meet
New Conditions
BY the Associated Press.

| BY the Associated Press.
NEW YORK, March 25.-The in
side financial workings of a big
| stock exchange house, in period Of
the lowest trading volume in relation
to the amount of listed securities on
record was told last night by Merrill
Lynch, z. A. Pierce e. Cassett, which
has branch Offices in 40 cities in the
United States and Cuba.
Taking the unusual step of making
public a detailed financial report to
customers. this concern showed that
since it was formed April l by a
until January 3 last. it has an oper-
ating loss of S3659407 Adding TO
this certain recurring expenses
and a writedoWn of the value of
memberships in exchanges a total
net loss was shown Of S308,62l3l.
Nevertheless, the report showed
that the organization had been
steadily adapting itself to the new
loW-volume conditions and in the
last quarter of 1910 alone had a
net profit of $4,000. Also the re-
port explained that in an effort to
improve its services to customers the
firm had during the year voluntarily
reduced commission, interest and
service charges TO customers to the
extent of 100000 annually.
The balance sheet showed assets
of s40273 963, of which s3650,063
was in cash.
Merrill Heads Firm.
The Merrill Lynch, E. A. Pierce &
CaSSatt combination was taken in
hand by short, stocky. eray-haired,
smiling Charles E. Merrill as senior
partner year ago. Previously a
chain-store financier Merrill has
been working vigorously to apply to
customers the principles of efficient
service learned in merchandising
Although the stock exchange re-
quireS member firms to make f1nan-
Cial reports available to custom
ers, making public detailed an
nual report in the form used by in
dustrial corporations is an uncom-
mon procedure. but Merrill said:
we feel that customer Of ours
has Just as much right to be taken
into our confidence as the holder
of few shares in an industrial
corporation
Merrill disclosed that the firm is
handling transactions at a rate
which would mean an annual gross
value of 200000000 He believes
that initiative and efficiency should
permit an operation of that magni-
tude to pay its way. despite the al
most universal gloom in Wall Street
lately over the prospects for the
brokerage business.
Costs Illustrated.
The report, illustrated with charts
and graphs. showed that of each
dollar of expense the firm paid So
cents in salaries, 7 cents for private
wires, 8 cents for stationery and
supplies. 6 cents for rent. cents for
telephone and telegraph. 3 cents for
tickers, cents for statistical service,
3 cents for advertising and 9 cents
for insurance. taxes and miscel-
laneous. Of the gross income. COM
missions on stock and bond trans
actions came to SIT per cent, on
dealings in commodities. III per
cent. and off board" income ,mean-
ing off the exchanges. primarily in
vestment banking activities, 2l2
per cent.
"A program of advertising was de-
veloped,' says the report, which
ran throughout a good part of 1910
in newspapers and magazines. We
invested almost $4,000 in this pro-
gram, and believe the results Justify
enlarging the program in 1o41."