Southampton, L.I., Sunday, Oct. 7--Charles Edward Merrill, a directing partner of Merrill Lynch, Pierce, Fenner & Beane, investment banking and brokerage firm, died at his home on Dune Road early last night. His age was 70. In 1914 Mr. Merrill founded the firm that grew into Merrill Lynch, Pierce, Fenner & Beane. His death was attributed to complications from a heart condition of log duration. Mr. Merrill, who had been in semi-retirement since he first suffered a heart attack in 1944, became critically ill a week ago. He is survived by a daughter, Mrs. Robert A. Magowan of Oakland, Calif.; two sons, Charles E. Jr. of St. Louis and James I. of New York, and ten grandchildren. Funeral services will be held in New York at the Protestant Episcopal Church of the Ascension, Fifth Avenue and Tenth Street. No date has been set yet. Burial will be in Palm Beach, Fla. Mr. Merrill was one of the first New York stockbrokers to realize the importance of selling stocks and bonds to small investors by furnishing for them simple, conservative and sound financial advice. A mine of provocative ideas about how to interest the little and often Wall Street-shy man in acquiring a stake in his country's economy, Mr. Merrill was a frequent and firm spokesman for the importance of a free capital market in this nation of free enterprise. If Mr. Merrill had been addicted to the I-told-you-so attitude, he could have pointed to a moment in the country's financial history when he was painfully right. In 1928, Mr. Merrill and Roger Babson were almost alone in the financial community in sensing possible disaster in the stock market. Although Mr. Merrill was less widely known at the time and, unlike Mr. Babson, did not carry enough weight with his customers to depress the market, he was no less forceful in counseling caution. He was convinced that the dizzy joy ride then under way would not last and his firm mailed out a market letter in which he said: "Now is the time to get out of debt. We think you should know that with a few exceptions all the larger companies financed by us today have no funded debt. This is not the result of luck but of carefully considered plans on the part of their managements and ourselves to place these companies in an impregnable position. The advice that we have given important corporations can be followed to advantage by all classes of investors. We do not urge you to sell securities indiscriminately, but we advise you in no uncertain terms that you take advantage of present high prices and put your own financial house in order. We recommend that you sell enough securities to lighten your obligations, or better yet, pay them entirely." Many years later, when he was asked how he had come to the conclusion that caution was in order, Mr. Merrill said: "The lesson that I had learned--when stocks are too high they come down--stood me in good stead in 1928-29." It was estimated at the time of the stock market crash that Mr. Merrill's foresight had saved over $6,000,000 for his customers. Mr. Merrill's concern for the small investor caught in the 1928 crash was so great that he begged President Calvin Coolidge to align himself with the more conservative Wall Street forces. He even offered to make Mr. Coolidge a partner in his firm. Mr. Merrill's words of caution were lost in the thunderous stock market crash of October, 1929, but he had placed his firm, then E. A. Pierce & Co., in the best possible position. It never had to borrow a dollar for its own account. Charles Edward Merrill was born in Green Cove Springs, Fla., on Oct. 19, 1885. He was a son of Dr. Charles Morton Merrill, country physician and drug-store proprietor. His mother was the former Octavia Wilson. Young Charles did odd jobs about the drug store and had a newspaper route. After studying at the secondary school of Florida's Stetson University and at Worcester Academy, he attended Amherst College. He lived in the smallest room in the Chi Psi fraternity house and waited on table to defray part of his expenses. During one year at Amherst he made $1,300 in commissions selling men's clothes for Renison & Coe of Springfield, Mass. Leaving Amherst after his sophomore year, Mr. Merrill edited a small newspaper in West Palm Beach, Fla., and played a bit of semi-professional baseball. After a brief period in the New York offices maintained by a group of textile manufacturers, Mr. Merrill entered upon the career in which he was to establish himself as one of the nation's leaders. He joined the firm of George H. Burr & Co., a commercial paper house, and in a short time was head of the company's new bond department. His salary in this new job was $25 a week, but he shared in the profits and did very well. Young Mr. Merrill's hustle and his straightforward approach to his job gained him a higher paying position with Eastman Dillon. However, he had long had the idea of owning his own firm, and on Jan. 3, 1914, potential customers received notices of the establishment of the firm of Charles E. Merrill & Co. The firm's offices consisted of one room sublet from the Eastman Dillon firm. It was on the seventh floor of 7 Wall Street. By the middle of the year Mr. Merrill and a partner or two began to expand the firm of Charles E. Merrill & Co. into the brokerage firm with a name so resounding that Wall Street jokesters said that it sounded like a beer barrel being rolled downstairs. Years later, it unrolled itself as Merrill Lynch, Pierce, Fenner & Beane. In the early days Mr. Merrill and his associates--the first one was a young bond salesman named Edmund C. Lynch--faced the struggle for survival that is the lot of most new Wall Street enterprises. There was time out from Wall Street for Mr. Merrill during World War I. He enlisted in the United States Army and served as a first lieutenant in the signal Corp's fledgling air force. After his military service Mr. Merrill returned to Wall Street and found the firm in good condition, thanks largely to a timely loan approved by Gates W. McGarragh, then president of the Mechanics and Metals Bank. The ingenuity of Mr. Merrill and his partner was tested when they won their first big selling victory. They underwrote the McCrory Stores, a real coup for a firm with no capital. The prestige of the McCrory deal enabled them to underwrite Kresge, Spicer, Superior Steel, Marland Oil, Safeway Stores, Grand Union, Dana and other similar concerns. There were some reverses; not all the organizations they underwrote were successful. There was a debacle with Saxon Motors. Mr. Merrill recalled that Saxon stock had always been offered frankly as a speculative venture. During World War I the Merrill firm added to its composition Winthrop H. Smith, a young Amherst man with extraordinary sales and executive ability. In 1928, Mr. Smith became a Merrill Lynch partner and was finally the firm's sales manager. By the early Twenties, Mr. Merrill and Mr. Lynch were long past the stage of conducting business meetings in the Public Library. They had many successful underwritings to their credit and they had come to be regarded as experts in selling common stock on commission and in personal investments. Persons associated with Mr. Merrill long regarded his creation of Safeway Stores as one of his greatest successes. By 1953, Safeway Stores was the nation's second largest food chain. As a sideline--one that was extraordinarily successful--Mr. Merrill and his associates began "Family Circle," a mass circulation magazine that was one of the first for distribution in chain stores. By the Thirties, Merrill Lynch & Co. operated a taut shop and came through in the face of many trials. Mr. Lynch died in 1938. In 1940, Mr. Merrill's firm became Merrill, E. A. Pierce & Cassett and it was not long until Fenner & Beane, a widely-known firm, had been drawn into a merger. In 1941, the Merrill firm became the firm that continued to expand in the middle Fifties. Mr. Merrill's great capacity for hard work took its toll in 1944 when he developed a heart condition. He was forced to curtail his activities for some time. Mr. Merrill amassed great wealth and was widely interested in aiding many of the nation's educational and religious institutions. On April 12, 1912, Mr. Merrill married Eliza Church. They had two children, Charles Edward and Doris, who married Robert A. Magowan, chairman of the board of Safeway Stores, Inc. After the termination of this marriage by divorce, Mr. Merrill married Hellen Ingram on Feb. 19, 1925. One son, James Ingram Merrill, was born to this marriage, which also ended in divorce.