CITY DIARY
CHRISTOPHER FILDES
`The financial history of France is not such that any French government can pretend to a superior knowledge of the right policy for the world. . . . If the new French policy turns out in practice to be precipitating international finance into chaos, then the effort to get the French government to change its mind must be redoubled. Force cannot be applied. But it will be a bad day for the world when France is not amenable to reason.'
Well, the world has had so many bad days that it can probably tolerate another. France's tack may have changed—I was quoting from a SPECTATOR leader of twenty-one years ago, on
the third think) of France's seven postwar devaluations—but her course has not. She will act as her interests dictate, and if that throws the international monetary system into chaos, no doubt someone else will have an interest in putting it right.
Compare and contrast Britain's second post- war devaluation. Sir Archibald Forbes has-been discussing it in his statement to the share- holders of the Midland Bank. Ideally, he says, you should devalue sooner rather than later— `certainly without interval between announce- ment and action'—and by too much rather than by too little. But can we have the ideal? 'Nowa- days, an overriding necessity is to act so as to keep to a minimum international monetary dis- turbance and to make full use of prior consulta- tion and acceptability.' Since this had to happen. says Sir Archibald, 'secrecy was endangered.' 'Endangered' is choice. It has been suggested that the wicked French tipped off the Bourse to what was going to happen; but in fact London had 'the clearest view. As a merchant banker put it to me: 'We kept on saying they wouldn't devalue, untit it became obvious that they would; and then we said we didn't know.' On Friday 17 November alone, it is estimated that so much money left London, to come back at the new rate of exchange, that the net loss to the country—not just the depletion of the reserves,
bet the permanent, irrecoverable cost of the deal—was £40 million. How much more must we export to make up for that day's work?
Bankers naturally prefer arrangements that make life easier for them—fixed rates of ex- change, for example. But what is good for the foreign exchange department of the Midland Bank is not necessarily good for the country. By devaluing slowly, obviously, and at the last gasp, we gave away a fortune to anyone with an interest in sterling. How much better off should we be if we had devalued in March? Surely not less than £500 million? Do we really have to make these presents to the world, hoping to be admired for our good example, but earn- ing—as we see—only contempt? Our interests are not the same as those of the French: for instance, a high level of world trade, and there- fore an effective system of payments, matters far more to us than to them. But I wish we had their readiness to put first things first.
How well paid is a really well paid business- man—before tax, that is? Sir William Lyons, who built up Jaguar, was always supposed to take home a six-figure cheque: Mr Owen Aisher has £91,000 at Marley Tile; but the par figure seems to be 00,000. Four men are thought or known to be on this mark : Sir Paul Chambers at la, Sir Maurice Bridgman at BP, Mr John Davis at the Rank Organisation, and Sir George Harvie-Watt, who is to retire as chairman and chief executive of Consolidated Gold Fields.
Sir George is a card-carrying Scot—taking this to the point of playing the bagpipes—who cattle south to distinguish himself, at the English Bar, becoming, among other appointments, standing counsel to the Shipping Federation. He was also a Conservative MP and a Territorial Army Brigadier : in 1941 Churchill summoned him from the army to become his Parliamentary Private Secretary. Sir George likes to quote his instructions : 'When the flies get at the meat, the meat goes bad. I'm the meat. Your job is to keep the flies off me.' He must have been an efficient fly-whisk, for he remained PPS for the rest of Churchill's administration. After the war Sir George turned to the City.
At Gold Fields, his fourteen years as chief executive have seen the profits quadruple and the assets multiply by six (probably mori than that: devaluation helps). He found it very largely a South African company, and has spread its interests, most recently moving into the home market by taking over Greenwoods, the gravel firm. Just now, though, he is in South Africa; and on Monday he goes to Kloof to open the company's newest gold mine.
No one takes over a business out of admiration for the existing management; and between Soli- hull and Kenilworth some uneasy heads must be wondering how much longer they will wear their British Motor Corporation crowns. Not that Leyland has exactly taken over. But it is Sir Donald Stokes who has to recommend what the new management should lo6k like, and in that part of the world they well remember the carnage—six out of seven directors sacked— when Leyland moved in at Standard-Triumph.
The problems now seem to be different. Most people would fault British Motor for diffuse- ness. Standard-Triumph's trouble was some- thing more like extravagance—over 800 cars 'on the company,' a habit of taking the May Fair Hotel for Motor Show week, and so on. Sir Henry Spurrier, then Leyland's chairman, came down (so the story goes) from Preston to Coventry by train, to inspect his new dominion. He stumped around, seeing much and saying little. It was not until he was safely back in the train for Preston that he spoke his mind. he said. 'On-costs start south of Manchester.'
What I fear most for Martins Bank is that it will get the worst of all worlds—that it will lose its special place as an independent bank based out of London, and that its future will be decided over the shareholders' heads. There is one possible solution that would at least pre- serve the bank's character. Has anyone thought of the precedent set by the Yorkshire Bank? This sturdy institution, with its 167 branches and £138 million of deposits, keeps its indepen- dence of action by the principle of equipoise. It is jointly owned by seven of the clearing banks, and is therefore not controlled by any one of them. There is a board of seven directors, one from each shareholding bank, with Sir Eric Carpenter, a former chairman of Williams Deacon's Bank, presiding.
You may know it better as the Yorkshire Penny Bank, the unforbidding title which it bore for the first century of its life. I was sorry when, a few years ago, the board decided that infla- tion had made the 'Penny' outlive its usefulness.
Previous page
