CITY DIARY
.CHRISTOPHER FILDES
The idea of making a cause celebre out of Mr Jocelyn Hambro was (if I may maintain my usual studied moderation) never one of the Government's best, and the idea which has suc- ceeded it—a general inquiry into the highest salaries, wherever they may be—at least is not the settlement of a personal score.
Once I have said that for it, other compli- ments are harder to find. For a start, I really do think it odd for Mrs Castle to invite the Prices and Incomes Board to tell her what her policy is. I quote: 'Paragraph 50 of Command 3590 makes it clear that the principles of incomes policy should apply to individual salaries . . . that are fixed outside the usual process of collective bargain- ing: The Government have, however, decided that there is a need for further guidance on the application of this general principle. They are therefore asking [the Board] to examine the application of this general principle to remu- neration at the highest levels. . . .' Can Mr Hambro, with his keen sense for the historical parallel, find a precedent for this one?
Mr Aubrey Jones, having declined to look at Mr Hambro's case on its own, now finds .a far bigger helping on his plate. Perhaps 1 can help him with a draft reply: 'Dear Mrs Castle, governments make policy and Par- liament makes law. Decide what you want to do and then see if Parliament will let you do it. Yours very truly, A. Jones.' But if he has to produce something more elaborate, I hope he will not neglect to hear evidence from Professor A. J. Merrett. The professor recently calcu- lated that the combined effect of surtax and the -depreciation of money values meant that a £10,000-a-year man would need annual pay rises of 11 per cent simply to stop the actual purchasing power of his income—in other words, his standard of living—from getting worse.
Meanwhile, from the newly appointed Post- master-General, Mr Stonehouse, comes what I suppose is an olive branch: he says that he's looking forward to making the Post Office 'progressive and businesslike.' You mean busi- nesslike like business?
Barclays, of all the Big Five banks, has kept the strongest links with the families—many of them East Anglian—whose businesses it in- herits. The Bland family is among the most senior of all: in the eighteenth century Thomas Bland was a partner in the Norwich bankers Gurney and Bland. Barclays took over that part of the Gurney empire which escaped the Corner House disaster of 1866; and Thomas Bland's great-great-great-grandson, also called Thomas, joined the bank in 1928, and was deputy chair- man from 1962 until his death last Sunday. He was chairman of Clive Discount, a past presi- dent of the Institute of Bankers, and chaired the inquiry into the City's invisible earnings, whose report, published last year, has so pro- foundly affected official attitudes to the useful- ness of the City and to the role of sterling.
His kindness and courtesy will be missed; and the City's habitual carnation-wearers, of whom I'm one, will particularly miss Sir Thomas for his astonishing buttonholes, which for size and splendour were matched only by those of Mr Fred Althaus. One of Sir Thomas's finest came out when he inaugurated Barclays' first money-in-the-slot machine: I remember it vividly—a superb yellow and purple bloom of about the displacement of a cabbage. And when he went to Rio last year for the International Monetary Fund meeting, he brought fourteen of his choicest carnations with him—a fresh one for each day—and made his hotel keep them in the ice-box.
Captain Threadneedle, who had a disastrous experience buying money on Sir Ivor in the Irish Derby, says that it has been left to Rothschilds to restore his faith in the form book, the class horse, and the odds-on favourite. From this cryptic communication (smuggled to me by an itinerant vendor of marked cards) I conclude that the Captain has cleaned up on Mr Rodney Leach's elevation to a partnership.
Some merchant banks like their boards to be enormous: clients prefer to deal with a director, and no doubt it helps with the signing of cheques. Rothschilds doesn't work like that: it is an unlimited partnership—the only one sur- viving among the accepting houses—of three corporate partners (family trusts), five Roths- childs, and only eight others. It says something for Mr Leach that the wise money has antici- pated his appointment for quite a while.
For myself, while I am often disturbed by what my college contemporaries are doing, to find one in the partners' room at New Court is peculiarly daunting. If only I, too, had built up a formidable expertise on the Eurodollar: its treatment in sickness, health, and pipelines. . . . But no. Horses for courses, as the Captain invariably says.
As the City sweltered in the sunshine this week, a chill wind blew from Cornhill. The National Discount Company passed its interim dividend. This is, to say the least, unusual for a banking company; even though the National's published results are more volatile than those of other discount houses—it is the only one in recent times to have reduced a final dividend. More alarming in its implications (though in a narrow sense reassuring for National's shareholders) was the board's explanation. Earnings for the first half-year were sufficient to maintain the normal 5 per cent interim. But 'in view of the marked and accelerating deterioration in the gilt-edged market in the last six weeks the directors have decided not to make any pay- ment.' Discount houses' fortunes are bound up with those of government stock. The National obviously fears that worse is to come and is keeping its powder dry.
For what can happen when a gilt-edged
market collapses, I refer you to the newly published memoirs (Money Talks) of Sir Frederick Leith-Ross, the government's chief economic adviser between the wars—and later, as it happens a director of National Discount. He was on the Reparation Commission which tried to deal with Germany. 'One of my cousins,' he writes, Shad lived in Freiburg-im- Breisgau when a child, and her father had in- vested £2,000 in the bonds of that city : she asked me to enquire what had happened to them and I was told that they had been redeemed in 1923 but the redemption money was not suffi- cient to cover the cost of posting an advice to the bondholders.' Absit omen. But the National Discount Company has made me wonder quite how far off the omen is.
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