Wall Street in Europe

Encouraged by their success in raising the number of U.S. stockholders from 7 million to 17 million in a decade, U.S. businessmen and brokers are looking to Europe for the next big boom in American stocks. Brokerage houses are rapidly expanding their networks on the Continent and providing new and faster quotation services. More and more American companies are seeking listings on foreign exchanges as a way of attracting European investors. Last week Litton Industries, California's fast-growing electronics complex, began trading on the Zurich Exchange, bringing to more than 250 the number of New York Stock Exchange securities now officially quoted on Europe's bourses.

Until recently, mindful of war and the threat of nationalization, Europe's middle classes have generally preferred to sock away their savings in banks, bonds and real estate. But Europe's continually rising economic prosperity --and its inflation--is changing long-held aversions to stock investments. Having already adopted supermarkets, trading stamps and cotton candy, Europeans are naturally turning to American stocks. Current favorites: IBM, General Motors, A.T. & T.

To take advantage of this new interest, U.S. brokerage houses are scrambling to reach Europeans. Merrill Lynch since 1960 has opened a network of offices in seven European cities, is now pushing a big selling campaign in West Germany, which is considered the best hunting ground for potential customers. Bache & Co. is wooing its customers in Geneva with a new machine that can provide split-second quotes on 4,000 U.S. stocks, and this month Western Union will install a stock-ticker service in 15 U.S. brokerage houses in Switzerland. Altogether, close to 50 New York Stock Exchange members have moved into Europe.

While battling each other, U.S. brokers also have to tangle with a few foreign legal problems. France and Italy have exchange controls that force buyers to place security orders through a bank instead of a brokerage house. Swiss investors are bound by similar customs. Result: the European customer often pays two commissions instead of one. In Germany, where banks handle securities by tradition rather than by law, Merrill Lynch is risking the banks' wrath by urging customers to deal directly with its offices. It may take a while, but U.S. companies are betting on a steady surge in European demand for U.S. stocks that will eventually force down such barriers.

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