Good Time Charlie : Part 4

What Goes Up: The Uncensored History of Modern Wall Street as Told by the Bankers, Brokers, CEOs, and Scoundrels Who Made It Happen
by Eric J. Weiner

(Page 4 of 5)

WILLIAM SCHREYER:

I remember the first time I saw that ad. I was taking the subway down to work in the morning - first thing I used to do with my paycheck was get two weeks' worth of dimes so I could get back and forth to the office from my apartment uptown - and I opened up the paper and there that ad was. I was jammed in there, holding on, and having no luck in trying to read the thing. I thought, "Jeez, this is way too long for anyone to pay any attention to. I wonder why they did that." Turns out I was wrong.

WINTHROP SMITH JR.:

I think this was the first time you really saw anything like that on Wall Street. A firm was reaching out to explain to normal investors how the business worked because it wanted their business. A lot of folks at the time really thought it was gauche for Wall Street firms to do things like advertise.

ROBERT BALDWIN:

The other firms, without exception, were brokerage firms. They'd give the guys a phone, have them follow the tape, and pitch ideas to clients.

WINTHROP SMITH JR.:

My father and Charlie Merrill started Wall Street's first training program in the 1940s. It's another thing that just wasn't done on Wall Street at the time, and another reason some firms snickered at us back then. But today it's a given that you have to train your employees. Out of those training classes we've gotten some of our most important leaders, including Don Regan, who was in our first training class.

DONALD REGAN:

December 1945 - I interviewed with somebody in the personnel department of the main office, which was then at 70 Pine Street. I was living in Washington, D.C., where I was married and where my first two children were born. After an extensive interview going over my background - a modest upbringing in Cambridge, Harvard undergraduate on a scholarship, an unfinished stint at Harvard Law School, five and a half years in the Marine Corps during World War II where I served as a major - this guy asked me, "What else can you bring to this firm?"

I said, "I don't understand the question. I've already told you my background." So he said, "Do you have any other specialties, something that might appeal to the firm?"

I thought about that for a minute. Then I said, "I only have one specialty now. I kill people. If you want people killed I've been doing that for five and a half years and I've gotten pretty good at it. Otherwise I could use some training." He was surprised. "Mr. Regan, I'm not sure that we need that particular ability here at Merrill Lynch."

In February they offered me a position in the new training school, which was starting in March 1946. At that time nobody else on Wall Street had a training program. Everyone used the old apprentice system, in which someone known to a partner in the firm by blood relationship or by being a relative of a client or something of that nature was taken on as an apprentice and brought up through the firm. It was not a formal training program. Merrill's was the first of the formal training programs where you were specifically trained in financial principles. They basically sent you to school for a quick degree in economics and finance. And then after you finished your courses you did not stay in New York. Instead, you migrated to a branch office to start building a business. Often you went back to the branch office that sent you in, because the branch office managers were encouraged to take men from their communities and send them on to the training school. Then they'd get them back as account executives, or what today they call financial consultants, FCs.

I think everybody in my training class was an ex-GI except for one guy who had been deferred for health reasons. And it was mostly officers. This was deliberate on the part of Charlie Merrill and Win Smith. They realized there was this cadre of people coming out of the service who needed jobs. They would be young, ambitious, and trained by colleges and the military. They thought this was just the pool from which they should operate in order to train people to be financial advisers. Merrill knew this because he had been in the military himself. He was in World War I as an artillery captain.

JOE NOCERA:

Don Regan was a sterling example of the culture Merrill developed. For many years if you were Irish and a former marine you had a leg up at Merrill Lynch. It was like being a German Jew at Goldman Sachs or Skull and Bones at Morgan Stanley. But Merrill's culture was much more of a hustling culture than the rest of Wall Street. You were a salesman and you had to make your numbers; if not, there would be trouble. This wasn't cushy "white shoe" investment banking. The Wall Street establishment looked at Merrill Lynch as a lower form of life. But all Merrill cared about was building an army of brokers to preach the gospel of the stock market to the common man.

DONALD REGAN:

The military mentality works on Wall Street because if you put the order and discipline of the military into the world of finance it takes away a bit of the chaos that is normal in finance. You take the New York Stock Exchange or a trading room. You can have absolute chaos there if somebody is not guiding it and making certain that things are organized and controlled. I think the military learns that by necessity. In the heat of combat you've got to have control or you'll have utter chaos. You'll lose what you're there for, which is victory. If you lose control of the New York Stock Exchange or a trading room you will lose a lot of what finance is all about, the safety of money. Although a person who's too rigid doesn't succeed in finance either. You also have to be creative. That's what they tried to teach you as you progressed at Merrill Lynch.

BERNARD HEROLD (fifty-year Wall Street veteran and founder of Bernard Herold and Company):

If you ever want to get a job on Wall Street here are the magic words: if you give me a chance, I can make you money. It's not, I can make money - it's I can make you money. That's what's always been most important in this business.

Copyright © 2005 by Eric J. Weiner

About the Author

Eric J. Weiner is a financial journalist and former Wall Street reporter for the Dow Jones News Service. His stories have appeared in countless publications, from the Wall Street Journal to the Village Voice. He lives in Brooklyn, NY, with his wife, Paige.