FIFTY YEARS IN THE CITY.
BY SIR FELIX SCHUSTER, BART.
F11-rir years seems a long and almost interminable period to look forward to. When you look back, half a century does not seem nearly so long. The impressions of one's younger days. are more, vivid and stand out more clearly in one's memory than more recent events. Thus I remember clearly the misty, half-sunny October day in 1873 when I first assumed active work in the City of London, and, looking back, my first thought is how little the City has changed. It is true new buildings have been erected, streets have been widened and improved, but the general character has been retained, and if banks have become = sky-scrapers, it is 'only_ in a metaphorical sense. Their buildings, though vastly more luxurious than in those days, still retain their modest dimensions as regards height when you compare them with those occupied by their rivals in the United States. I first visited New York in 1876, and the change that has since taken place in the business quarter of that City seems to have absolutely revolutionized it ; but with the Mansion House, the Royal Exchange, and I was going to say the Bank of England, in the centre of the. City, we did seem safe from revolutionary change. Let us hope that the Bank of England will not introduce any when their building scheme is carried into execution.
While outwardly the, character of the City seems to me to be very little altered, the same may be said—and I intend to say a little about it later on—of the business character of the City and of those who carry on the old traditions ; the old names, as I knew them fifty years ago, are nearly all still there in full vigour and carrying on. Banks have altered in size, some in name, yet the old banks are there still, the old traditions have been preserved, and methods, I honestly believe, im- prcived. Yet how different were some of the conditions under which the work of the City was carried on. It seems almost impossible to recall the days when there were no tubes, when the Underground Railway had its terminuses at Moorgate Street and the Mansion House, when the journey of the West-Ender to the City was generally accomplished by a ten-minute service from Charing Cross to Cannon Street over two bridges with a stop at Waterloo Junction, and the speed attained by i London's gondola, the hansom cab, was the highest obtainable on the road,. when offices were lit by; gas (imagine the atmosphere after a month of fog, and fogs seemed to be more dense and penetrating in those days), and when, as if to compensate for this very serious drawback, there was no telephone to disturb and worry us. I think office hours were longer in those days—employees have an easier time now all round— but in the absence of typewriters the art of handwriting was still respected, and ..that distinct mark of character had not lost its value. The War has made such a break in all our lives that pre-War conditions seem quite different and 1eparate from those ;prevailing now, and we are apt to think how easy those times must have been, and to overlook the troubles that we had to go through, troubles appearing light as compared with recent events, yet tjuite sufficient to be taken into account in the conduct -of business. Wars and rumours of wars have been with us almost all the time. It has been my lot to ' have been brought up in surroundings in which a good deal of notice was .always taken of the great political events'of the day, and some of my earliest recollections are connected with the Crimean Was, the Mutiny, the War on' the Continent in 1859, when Milan Vas restored' to Italy, and the short war in 1864, when Prussia and Austria despoiled Denmark of two of her provinces; to be _followed two years later by the rupture between those two . allies and the six weeks' hostilities when Austria was ousted from her leading part in Germany and Prussia _ assumed the predominance, Italy recover- ing Venice. Wars they were called, and now they seem slight skirmishes. Then came the Franco- Prussian War in '70 and '71, and the creation of the German Empire, all events .which had a pro- found -influence on the business life of this country. We were free from Continental wars, but had plenty of troubles of our own. In '72 a Videroy of India was murdered ; in '73 and '74 there was an Ashantee War and a famine in India, civil war in Spain, troubles in France, followed by interminable quarrels in the Balkans, wars between Russia, Turkey, and the smaller States. Who having lived in those times does not remember how our fleet sailed into Besika Bay, the Treaty of San Stefano, and the Treaty of Berlin, peace with honour," and Queen Victoria becoming Empress of India ; Afghanistan, Egypt, the bombardment of Alexandria, Majuba, Penjdeh, Khartoum, Matabeleland, the Chinese- Japanese War and subsequent Russian-Japanese War and all that followed ; the troubles with France over Nigeria and Fashoda ; then the Boer War and the gradual development of the European situation, which ended in such dusters ? All these make one think that, after all, we did not have quite such an easy time as our fathers had. But the City went on and prospered, not without financial troubles of its own. A cursory examination has recalled the fact that between the years 1872 and 1914 there were no fewer than forty bank failures in the United Kingdom. The most prominent were the City of Glasgow Bank and the Oriental Bank. Added to these were, of course, banking troubles abroad, so there was plenty to think about. The event that created the greatest impression was perhaps the Baring Crisis in 1890. Then I had for the firsttime the oppor- tunity of seeing from inside how efficiently, how rapidly, a great crisis can be dealt with, how strong the bonds of co-operation are when there is a real call to bring them into activity. Of course, such steps could not have been taken had not intrinsic conditions been sound, but it required courage and decision to take them ; the situation had been saved before the majority of the public knew of the danger. That spirit of unselfish co-operation prevailed at the outbreak of the War, and perhaps some day an authentic account will be given of the development of the various measures that were then devised rapidly, with courage and complete success. Again, it was only the intrinsic soundness of trade in the City which made it possible to adopt these measures and see them justified by their complete success, and that is what made me say that the character of the 'City had not been changed. I have often repeated, and I do so now, that I believe the City of London to be the most honest spot on the face of the earth, in spite of the sneers that one hears occas- ionally expressed. Here a man's word is as good as his bond, and I know no trading centre where transactions are carried through More rapidly, more surely, and with fewer subsequent disputes. The exceptions are few. When you recall -some, or nearly all, of the really bad cases of fraud and deception that have occurred, I do not think you will find (with a solitary recent exception) any of the old City names concerned or tarnished. The serious cases have been importations from outside. , The Cduring the War was a revelation, and one is tempted to say that anyone who not seen the City du g the War . does not really understand it ; during the. worst days of disaster it showed ,at its best. Here, there ,wa.s. no 'faltering, no lack of, resolution. It had to be seen through. Air raids were • not pleasant experiences arnidit our, daily work. The missiles came pretty near: and _did _a goad bit of damage. ,Never' did I see a sign of panic or _even fear, and the behaviour of the ladies whO come' to take up the work_of the men who had gone 'out to'_the- War was as splendid as that of the rest.. These ,are, unforgettable days. And whoviould have .thoUght that the men whO had spent their lives at the esuntera 'of banks and offices would become the splendid soldiers they _did in so short a time and practically without training ? I find that the staffs of the .Big Five banks 'won, over a thousand distinctions; not including " Mentions_ in Despatches," and other banks no ' doubt in similar proportion. Now theY have returned to their work, Modestly carrying out their modest dritiei, but nearly all more efficient than they were before. : • Of the life of the City itself and the various types of the dwellers therein it is alinCit impossible to speak ; to do justice to it. would require many years spent not in Work but eXploratiori, for its aspects are so diffefent and its activities so varied. '1 haVe heard the City described as the greatest inanufactUring Centre- in the kingdom, in addition to its commercial and financial activities, and some years' experience as an additional Commissioner of Ineome Tak has opened my eye's to the existence of tradei, of names of streets which I had "never been aware. of, and I believe the- real strength of the City lies`in the enormous number of small traders rather than in the existence of the largerfirms whose names are so• well known:" A: short electioneering experience again revealed another aspect and a life of activity in-Various outlying parfs which are unknown to most of us. The attempt was unsuccessful, 'arid if I was not afraid of straying into politics I might go into the immediate cause of its lack of success and the reason which made me think that, but for one event during a time when elections were spread over a period at, _weeks instead of taking' Place on one day, the result might have been different. Be that as it may, the experience was most interesting and valuable, and I am glad to Say my relations 'with' my opponents were, and have remained, of the friendliest' character.
Ten years on the Council of India gave me . another' , and enabled experience, and enabled me to look at "the City and, its representatives from an entirely new angle. This gave me most valuable insight into the way in: which the work of our public offices is carried on, as it involved' negotiations not only. in, the City, but with most of the other great Departments of State, and I can only say. most emphatically that the public does not sufficiently , knOw or adequately appreciate the able,- cOnscientious.. and devoted manner in which the high officials in Our public offices carry out their duties. " And if kith experience is valuable to one whose chief. work lies in a different direction, I can only wish that politicians and others could get a little more inside knowledge as to the way business is done in'the City and the work that has to be performed ; and I would say this more especially to those who talk so glibly about the work of the banks being so easy and of their nationalization. If any one of them could have twelve months' experience in a big bank, to watch its organization and the immense care required to carry out its operations successfully, the scrutiny to which every advance has to be sub- mitted, and the necessity of this being done, I think he might change his mind and not propose to transfer these difficult and delicate responsibilities to men whoie ; lives have not been devoted to acqUiring the necessary experience. This 'question of nationalizatiOn of banks is not such a new idea as some seem to suppose. It ' was in the year 1861, 'probably as the result of serious bank failures, that public opinion in the' State of ' Venie became favourable to the establishMent of a State ' Bank to supersede private banks, but the idea was not accepted' by the GOverrunent, which confined itself to prescribing new safeguards and restrictions, as, for example, the prohibition to fuse banking and merchant businesses (how wise they were !), and remained firm to the principle of the freedom and plurality of banks. Again, in 1584, a speech is on record of a certain' Tomaso Contarini, delivered in the Venetian Senate, in which he successfully opposed a State Bank and defended private banking. It may also be of interest to record that there is in existence an order of the Major Council, dated 1274, referring to the fact that the Venetian Mint was then coining money described as " sterling " for foreign merchants ; but I must not be tempted to pursue this interesting subject further. It has been my good fortune to know, on more or less intimate terms, all the Chancellors of the Exchequer from the time of Mr. Goschen, and any recollections of the financial incidents of the last fifty years cannot be com- plete without some reference to his conversion operation. Great as my regard and admiration for him have been in many other ways, I cannot help feeling, as I did then, that that measure was premature and not justified by the circumstances of the time, and I cannot think that its effects have been beneficial ; it disturbed the holding of Consols and led the public into speculative investment. Of the many Budget speeches I have heard those of Sir Michael Hicks-Beach remain in my memory as examples of lucidity and happiness of expression. Lord Salisbury, when Prime Minister, once honoured the bankers with his presence at their annual dinner ; a most impressive personality he was, but he frightened tis badly, for after keeping dinner waiting for nearly an hour, he delivered a distinctly gloomy speech (there was trouble with France at the time), which certainly led one of the banks, not the one I know most about, to sell half a million of Consols the following day. The danger he feared did not materialize, but Consols went on falling all the same.
The amalgamation and growth of the big banks during recent times would require a long article by itself to be adequately dealt with. This movement can only be considered as the complement of business developments in other directions, and if sentiment makes one perhaps regret the elimination of smaller institutions, I still think that the crisis of 1914 could not have been faced so efficiently and successfully had banking conditions not been developed in proportion to the growth of our trade. Competition remains as strong as ever, and the balance of advantage is certainly on the side of the public ; but in the internal organization of the banks there is great improvement too, and the conditions of life and emoluments of_the, bank employees have become much more attractive ; encouragement is given to every kind of recreation outside banking hours. A certain bank owns a sports ground covering twenty-three acres, which can be described, without fear of contradiction, as by far the best within the neighbourhood of London - and who in years gone by would have thought of a bank officer spending his spire hours training and conducting an orchestra and chorus composed of members of the staff of that bank, and winning his laurels in the conductor's chair at two annual concerts at the Queen's Hall ? His regular work is none the worse for that ; such work gives ample scope for real capacity. There is now an opening in the banks for men of high training and education, and no one need be afraid.of the conditions .of life offered to them. In fact, one of the many difficulties of the big banks must be to find the necessary material to fill the various posts • of great responsibility but of interesting work and high opportunity also.
Another remarkable change occurring gradually during the last fifty years may, I think, be perceived in the financial Press, and I mean not only the journals especially devoted to finance, but practically all the leading papers who in their money articles give far wider scope to their editors and enable them to treat of the serious questions , that arise from day to day with greater freedom and insight than used to be the case. Their influence has become great, and they may be said to take an important part in' the elucidation of the grave questions that the present generation has to deal with. Not that these questions are entirely new. We have had them with us in varying form for a good many years. The bi-metallic agitation was only another mode of attempt at inflation, which the City resisted successfully, although a leading Cabinet Minister seemed rather infatuated with it. Even the question of the Channel tunnel, like the poor, seems always to have been with us, and much as I should welcome, as a pretty constant Continental traveller in the past and I hope in the future, the increased comfort it would provide, I am bound to say I feel more than gratified at the recent decision of the Cabinet.
What about the next fifty years ? Can we doubt that, with such a record behind it, the City will continue to hold its own. ? We are too close to recent events, too much alive to such mistakes as, may have been made and to the difficulty of the questions before us, to enable us, perhaps, to form a right judgment of what has been accomplished and what we may expect. The questions are no graver than those that faced the City a hundred years ago, and some of them, such as the restoration of the gold standard, gave rise to discussions similar to thoie -which are now taking place, though the schemes suggested as possible 'remedies could hardly have come up to the ingenuity of some of the most recent proposals. I believe the City and the commercial community will adhere to the sound principles which, laid down a century ago, have enabled the country to attain her position in the commerce and finance of the world, and will not be led astray by fantastic schemes, however attractive they may appear on paper. If the outlook for trade, owing largely to the unsettled condition of Europe, looks unpromising now, let -us remember that a hundred years ago the forebodings were no less gloomy. New inventions, steam, electricity, and so forth, then developed the trade and the prosperity of the country to a degree no one could have dreamt of, and to those who appear to. despair of the future of our position I would say • Has the day of new inventions come to an end ? Does not every year produce them to such an astonishing extent that our minds can scarcely grasp them ? The nation which shows greatest adaptability to turn them to their proper use will lead the way to progress greater, probably, than any shown in the nineteenth century. Only one word more about the City of London. It stands not for itself alone but for the whole commercial community of the country and the Empire. If the trade of the country is not prosperous the City cannot prosper. There is no separate banking or financial interest.- These depend on the welfare of the country at large and of all its classes to whose success it is their chief end and aim to contribute.
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