Charles E. Merrill was born in 1885 in a small hamlet outside Jacksonville, Florida. As a young man, while Henry Ford was making the Model T automobile as a consumer product for the masses, Merrill was becoming convinced that stocks and bonds could be marketed as consumer products as well.
Merrill won his first big account in 1912, working for Burr & Company when he helped Kresge sell $2 million in preferred stock. It was in doing so that he discovered a new retailing phenomenon in the process. Chain stores were just beginning to proliferate. He recognized that this new retailing idea would change the way Americans would shop.
With his early success and a burning desire to be his own boss, Merrill in partnership with Edmund Lynch, opened his own brokerage house in 1914 at 7 Wall Street. While most Wall Street executives disdained chain stores as a passing fad, Merrill recognized them as the future of American shopping. In the decades that followed World War I, Merrill amassed a fortune specializing in the public sales of grocery stores, department chain stores, and other retailers.
In the late 1920s, the clouds of impending disaster were beginning to loom large on the financial horizon, and Merrill sensed it. He advised all his clients to “take advantage of the present high prices and put your own financial house in order.” Although his dire predictions alienated him from much of the financial community, his prophecies were vindicated in October of 1929. While the crash bankrupted many brokerage firms, Merrill-Lynch remained solvent.
It took years for the country’s economy to recover following the Depression, but Merrill was still preaching the gospel of marketing stocks and bonds to the average American. As Merrill put it: “We must bring Wall Street to Main Street, and we must use the efficient, mass merchandising methods of the chain store to do it.”
Merrill believed that the key was public trust and education. He began to build his business on the conviction that educated consumers would be more willing to invest. He plowed substantial amounts of money into advertising and easy-to-read information pamphlets, and it paid off handsomely.
In the 1950s the growth of the stock market encouraged small investors to invest as an act of patriotism. Soon the public was buying stock on installment, and they were doing so through the dozens of small branch offices Merrill had placed throughout America. The New York Stock Exchange census estimated that over half a million people were becoming new stockholders each year.
As more and more Americans began to move their assets out of low-interest savings accounts and into the stock and bond markets, the number of individual shareholders grew to 8.6 million by 1956. Merrill died that year in his eighties, a Wall Street legend.