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Thompson began composing in his teens and in addition to hymns, wrote the popular songs "My Home on the Old Ohio" and "Gathering Shells from the Sea."
Both a lyricist and composer, Thompson ensured he would always remember words or melodies that came to him at odd times. He said, "No matter where I am, at home or hotel, at the store or traveling, if an idea or theme comes to me that I deem worthy of a song, I jot it down in verse. In this way I never lose it."
Thompson is best known as the writer and composer of the classic Christian hymn, "Softly and Tenderly, Jesus Is Calling." It is thought to have been translated into more languages than any other hymn. It has been featured in the films The Trip to Bountiful, Junebug, and A Prairie Home Companion (sung by Meryl Streep and Lily Tomlin), in the Anne Tyler novel The Accidental Tourist, and the television series True Blood.
Thompson was rebuffed in an early attempt to sell his songs to a commercial publisher, so he eventually opened the W. L. Thompson Music Company in East Liverpool. By the 1880s, it was one of the most prominent and successful such businesses in the United States. Thousands of music teachers and musicians ordered sheet music, instruments and other supplies from Thompson's store. Thompson later founded a music and publishing company in Chicago.
Thompson married Elizabeth Johnson. They had a son, William Leland Thompson (born 1895), who was known by his middle name. The Thompsons built a large hilltop mansion on Park Boulevard in East Liverpool. The house still stands and is known locally as "the Softly and Tenderly House."