You don't. Local Folders is a special account and its distinguishing feature is that it doesn't have its own email address, nor any of the settings for configuring the connection to an email server. It is not an appropriate place for a "real" email account.

One you have added a new account, try View|Folders|Unified and see if that view suits you better.

Thanks for replying but hat didn't help at all.

All my other email accounts fold into one common inbox, sent etc. This last email I just added has it's own.

I would like it merged in with the others.

The norm is for each account to have a separate identity each with its own folders.

POP-connected accounts can indeed share a common Inbox, but their Sent, Deleted, Trash etc are by default all separate, though you can choose to manually define which folders are used for these, and so of course you could force them to share common folders under Local Folders.

If your new account uses POP, you need to look for "Advanced" in its account settings and tell it to use the Global Inbox.

If it's IMAP, you'll probably be happier using POP instead. Delete the account, set it up again, then before accepting the account, if it doesn't offer POP, change the proffered IMAP settings to whatever you need to use POP.