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Morgan Witter and the White Shoes

Don't forget that upper-crust banker Milburn Drysdale had an awfully tough time figuring out the ways of Jed Clampett, even if he was a millionaire.

What does the old television program

The Beverly Hillbillies

have to do with anything? Well, the constant struggle between country gentleman Clampett and money-hungry Drysdale offers a classic lesson in culture clashes. It's one the folks at

Morgan Stanley

(MS:NYSE) and

Dean Witter, Discover

(DWD:NYSE) might want to consider.

The two companies are vastly different. Morgan is a blue-blood investment bank, one specializing in serving premier corporate clients and crafting ornate mergers and acquisitions. It sprung from

J.P. Morgan & Co.

(JPM:NYSE), the bank of the great industrialist.

Dean Witter sprung from

Sears Roebuck

(S:NYSE), the home of those great Craftsman tools and DieHard batteries. Did you hear the one about the new requirement at Morgan? All its bankers must buy their suits at Sears.

The main thrust of Dean Witter, which no longer is affiliated with Sears, is selling stocks and bonds to individual investors, such as the owner of the convenience store across the street. One of Dean Witter's biggest assets is its Discover credit card. That's right, the one that gives you cash back.

Will Morgan offer cash back on its transaction fees?

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Philip Purcell, Dean Witter's chief executive, told


that he saw no way for cultural issues to become a problem. His counterpart at Morgan, John J. Mack, promised in the same interview that "we're not going to take these two entities and smash them together."

Wall Street agrees. The stocks of both companies ran up Wednesday. Morgan jumped 7 7/8 to 65 1/4, while Dean Witter climbed 2 to 40 5/8. "Apparently they've been doing this dance together for three years, so they know each other pretty well," says Steven Eisman, a brokerage industry analyst with



Maybe. But dancing, even dirty dancing, doesn't necessarily make a solid marriage.

One sign of potential friction is the simple fact that the two couldn't compromise on the name of the new firm by letting go of any of their current monikers. Hence the new firm will be called

Morgan Stanley, Dean Witter, Discover.

Pity the switchboard operators.

For a more striking picture of the difference between the two firms, just take a look at their equity research reports, in this case ones that offer their views on growth and value stocks.

"Morgan Stanley's Equity Analytics Research Group has developed a value/growth forecasting model that has shown some predictive value in the past. ¿ The model is favoring value thanks to stronger levels of economic activity -- higher industrial production and higher smoothed short-term interest rates -- and a gradual narrowing of the government-to-corporate bond spread, which indicates general confidence in the economy and the market."

Here's Dean Witter's take: "Value stocks are more attractive than growth stocks."

So what does this mean for investors? Watch for any signs of infighting, which could hamper all those wonderful synergies executives like to talk about. After all, how eager will brokers with bonus envy be to help out the filthy-rich investment bankers upstairs?

By Erle Norton