Ross Perot, Bob Bishop, John Fitzgerald, and others had anticipated big savings from the merger. They turned out to be right. Thirty days after the merger, duPont Walston trumpeted its financial strength in full page advertisements in the Wall Street Journal and the Times:1
"We've organized and financed ourselves to reduce risk. The New York Stock Exchange requires that a firm's indebtedness not exceed 15 times its capital. Our current indebtness is about a tenth of that requirement. The exact ratio of our service affiliate, duPont Glore Forgan Incorporated, was higher: 8.77 to 1 as of July 1, but duPont Glore Forgan is a clearing firm -- is not subject to many of the risks common in the investment industry such as underwriting securities and making markets in securities."
Just as he had at F. I. duPont, Glore Forgan, as soon as he got control, Ross Perot became personally involved in managing duPont Walston. And despite what Dan>Cullen, Bill Fleming, George Thomson, Walter Auch, and other executives had expected, Mort Meyerson became his all-powerful viceroy.2
Unfortunately, Ross Perot and Mort Meyerson had not learned that the management style that had made a success of Electronic Data Systems, Inc. could not be successfully applied to the investment business. An investment firm is no better than the people who work for it.
Carl and Jack Walston were summarily fired, which was, perhaps inevitable. But in Carl they lost an able marketing executive who was admired by many other executives in the firm.
Tom Hofstetter, another widely admired executive who increased the firm's revenues by getting The New York Stock Exchange to allow stock-