Catching Lightning in a Bottle: How Merrill Lynch Revolutionized the Financial World

ADVANCE PRAISE FOR CATCHING LIGHTNING IN A BOTTLE “ Win Smith, son of a founder of Merrill Lynch , has written an accurate story of the rise and fall of America’s preeminent brokerage firm. No novel could be as captivating, no characters as rich and fascinating as those who fill the pages of this remarkable book. Merrill, one of the few financial institutions with a soul, thrived and flourished because of strong and principled management. The firm’s demise, according to Smith (who holds back nothing), resulted from flawed management. A great study of the dark side of economic Darwinism.” —ARTHUR LEVITT, Former Chairman, U.S. Securities and Exchange Commission “ Catching Lightning in a Bottle is a timely history combined with intrigue and passion. It provides an accurate view of how our firm, Merrill Lynch, grew to prominence through a total commitment to clients and how losing sight of these principles led to the wounding of one of the world???s greatest global franchises. This is a must–read for every executive in order to avoid these mistakes in the future. Now that our time–honored, principled approach to serving our customers has been restored, we are all thrilled to be part of BOA/MER.” —DANIEL P. TULLY, Chairman Emeritus, Merrill Lynch & Co., Inc. “ This is a powerful and important story of what made a great institution and what brought it down, including some untold intrigue about the final years of Merrill Lynch. It is written by a man who knew it well and stood by his Principles.” —JOSH WESTON, Honorary Chairman, Automatic Data Processing, Inc.

Author’s Note  1 Prologue 5 Part One chapter one Little Doc (1885–1907) 13 chapter two The Odd Couple (1907–1915) 29 chapter three Mr. Smith Goes to Wall Street (1915–1929) 61 chapter four The Grocer (1929–1940) 101 Part Two chapter five Wall Street to Main Street (1940–1942)  137 chapter six Investigate Before You Invest (1942–1957)  171 chapter seven Good–bye, Beane—Hello, Smith (1957–1970)  227 chapter eight Bullish on America (1970–1980) 271 chapter nine Mr. Integrity (1980–1985) 337 chapter ten The Eternal Optimist (1985–1993)  355 chapter eleven Cementing the Principles (1993–1997)  415 Part Three chapter twelve It Should Have Been a Solid Legacy (1997–2001)  457 chapter thirteen The Day My Father Wept (2001)  497 chapter fourteen The Death of Mother Merrill (2002–2007)  511 chapter fifteen Catching Lightning in a Bottle (2008)  549 Epilogue  565 Index  578

WINTHROP H. SMITH, J R . is the son and name–sake of a founder of Merrill Lynch. He had his own illustrious twenty–eight–year career with the storied Wall Street firm, serving as an executive vice president, a member of the Executive Management Committee, and Chairman of Merrill Lynch International. Win is one of very few people to have known personally all twelve of the company’s CEOs. He resigned abruptly in 2001 because he believed that the firm’s culture and valued principles established by his father and Charles E. Merrill were about to change. He now owns and operates Sugarbush Resort in Warren, Vermont.