CITY AND SUBURBAN
Unhorsing Treasury knights and Bank grandees Nicholas Davenport, City radical
CHRISTOPHER FILDES
Nicholas Davenport liked to call him- self a City radical. The stress, Roy Jenkins explains, should fall equally upon both words. He began his weekly Spectator col- umn in the early 1950s — 'this gave me', he noted, 'a wonderful chance to criticise the Tory monetary policy which was giving me acute sociological pains'. Chronically impa- tient of all institutions, he never became one. He just carried on, as fresh as paint, into his 87th year, when he demanded more space for his next column but did not live to write it. This week we are celebrat- ing his centenary: 12 August, 1893 — 1993.
He was in fact a City man among radicals and a radical in the City, and that was his secret. From it derived his unique and per- vasive influence, most of all over a genera- tion of political radicals. He taught them not to override the markets but to liberate them from the repressive economic ortho- doxies which City grandees and Treasury mandarins might take for granted. 'Trea- sury knight', to Nicholas, was always a term of abuse.
Need had taken him to the City, but he made it his base, knew the markets through and through and interpreted their mes- sages. 'I like to imagine' (so he began his first article) 'that the readers of this page are divided into two groups: the inquisitive and acquisitive.' He would not give them tips — tut if I write generally about my subject I hope it will be in a practical man- ner'. Keynes, said Nicholas, was undoubt- edly a much better economist because he bet his own money on his ideas.
Keynes brought him into journalism, and Nicholas always liked to write as if he were talking to Keynes. Douglas Jay, who worked with him 60 years ago, calls him one of the best writers of his time — a nat- ural writer whose talents were not used except on financial subjects. They would all three have agreed with Walter Bagehot that there is nothing dull about money, but that dull people write about it in dull ways.
A young man who had come of age in 1914 was lucky to survive. Nicholas was called up to the Corps of Cost Accountants and cross-examined Haig, the commander- in-chief, about the waste of shells and lives. Offered an Oxford fellowship, he turned it down because the approach came from Keble, and he could not stand Holman Hunt's 'The Light of the World', that col- lege's principal ornament. Instead he wrote his first book, Parliament and Taxpayer, concluding: 'The way of controlling public expenditure is plain: the will of the politi- cian is uncertain. Nothing will be achieved until the House of Commons acquires a financial conscience.' Even with a £50 bil- lion deficit, there is no sign of that.
Nicholas came to a City under the auto- cratic rule of Montagu Norman, Governor of the Bank of England. He was not impressed: 'A poseur, I thought, and per- haps a little dotty, as indeed he turned out to be.' Norman to Nicholas came to stand for arbitrary power misapplied, and for the deflation and depression that followed from trying to keep sterling up to the gold standard. All-party agreement sustained this ruinous policy until the markets destroyed it. We have now lived through the action replay, with the European exchange rate mechanism. Nicholas really would have told us so — and would snort at the Prime Minister's transient fad for rebuilding the latter-day gold standard on a hard sovereign.
Depression and financial failure signalled to the Marxist left the long foretold col- lapse of capitalism. Nicholas thought that it needed new ideas and better management: 'We Keynesians did not want to destroy the capitalist system, but to make it more effi- cient and more humane and a more effi- cient instrument for the creation of wealth.' He conjured up the XYZ Club, where City reformers could meet Labour leaders. From the XYZ came blueprints for a National Investment Board and a publicly- owned and accountable Bank of England.
His friendship spread across the Left and across the years — Dalton, Cripps, Bevan, Crossman, Crosland, Jenkins, Callaghan, the Jays, all came to the remote manor house which had belonged to Mary de Bohun, mother of Henry V. She haunted it, Nicholas said, but she seemed happy there — 'and who could wish a happy ghost to go away?' Nicholas, too, was happy there and his mood was infectious. He was closest to Hugh Dalton, the ill-fated Chancellor: `Dear Hugh, if only you had understood the banking and money system before you set out to replace capitalism with socialism in half the economy!' Later, Dalton came to Nicholas with money troubles of his own: 'I haven't got much.' He had invested in the Government stock he had issued — still derisively nicknamed Daltons. Nicholas made him sell them and buy shares, which trebled.
Nicholas believed in shares and in owner- ship, but did not believe they were in the right hands. He worried about an economy with half its productive resources con- trolled by the faceless boards of nation- alised monoliths. In one of his last columns, he urged Margaret Thatcher's incoming government to sell them to the people.
The other half, he would say, was under the self-perpetuating control of a City clique: 'How many times have I heard the secretary at general meetings read out "Mr Bonehead and Mr Setface retire from the board and being eligible offer themselves for re-election"? The chairman grunts "Those in favour?" A forest of paid hands goes up. "Those against?" Not a sign! Once elected, a director could look forward to years of boardroom life, a deadening prospect, it is true' — and, nowadays, sit on other directors' remuneration committees.
Millions of ordinary people, Nicholas argued, were alienated from the system and felt that they had no stake in its success. A strong economy, so he believed, could not be built on the riven foundations of (his phrase) the Split Society. Later it came to obsess another City radical, Philip Chap- pell, who believed that ordinary people should have owners' right in their biggest financial assets, now hidden in their pen- sion funds. That idea has survived the obscurantism of the unions to be taken up as a cause of the Left — or rather, of radi- cals on either side. Nicholas (as I once said of him) would not have thanked you for calling him topical.
When I first worked for The Spectator, Nicholas took the editor's secretary, a girl of ravishing beauty half a century his junior, out to dinner. He leant across the table and offered her a word of advice (as he said) from an older man — not to have more than two or three admirers at any one time, or four at the most: 'It is so easy for a young girl in London to get talked about.' Dear Nicholas; who could wish a happy ghost to go away?
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