THE JOBBING SYSTEM ON THE LONDON STOCK EXCHANGE: AN ORAL HISTORY

Interview No. 10: Colin Knock

Interviewer: Bernard Attard

Institute of Historical Research: 12 February 1990

Tape 1, side 1

BA: Well, could you first tell me, Mr Colin Knock, where and when you were born?

CK: I was born in London on 30th September, 1931.  

BA: What did your parents do?

CK: My father was in transport, my mother was a housewife.  

BA: Where did they send you to school?

CK: After primary school, I went to Cranbrook College in Ilford, which was a private school.  And I was there until I left at fifteen.

BA: Did you have any plans when you left school?

CK: None what so ever.  No, I started in an accounts office of a large company locally in Essex and then after about a year, I moved to the City where I found I had lots of friends.

BA: What were you doing in the City?

CK: I started as an office boy, in the firm of Prior & Williams, a stock jobber, and progressed through there to a blue button.

BA: How did you get that job with Prior & Williams?

CK: Actually, I met a couple of guys in the street - Throgmorton Street - which I knew, had been evacuated with and knew from school.  And I said I was looking for a job with a stockjobbers or brokers.  And they said that they knew that Prior & Williams wanted one and also Castle, a broking firm.  And I preferred the idea of jobbing - I don't know why, I knew nothing about it.  So I approached the firm of Prior & Williams, a small company, and the manager said, 'Yes, we like the look of you, but you'll have to see one of the partners.'  So I had to wait until the house closed at 3 o'clock or 3.15 in those days, I think it was - 3 o'clock, I believe - and saw one of the partners. And he interviewed me and said, 'I think you've got the job, we'll write to you very shortly.'  And that's what they did.

BA: Why had you been thinking about getting a job in the City?

CK: The main reason was one of my old friends from school - we were going to a dance - I suppose he was 16, 17, 16 - he collected me on a motorbike, brand new motorbike.  And I said, 'How the hell can you afford this?'  He said, 'I've just had a bonus.'  And I said in my ignorance, 'What is a bonus?'  He said, 'Well, I'm with a stockbroker, and the stockbroking firms and jobbers give bonuses.'  So I thought well I won't save that money in two years, what I was earning, so I thought I'd try the City.

BA: So you got the job with Prior & Williams, any idea why they employed you?

CK: I suppose they liked the cut of my gib.  The only thing was I was wearing a - if I can recall it correctly - a navy chalk-striped suit, a white shirt and a red tie, as indeed I am now - it's burgundy, which isn't me.  And the partner who interviewed me said, 'Does that have any political implications?'  Again, I didn't know what he was talking about, I really didn't.  And he explained it and I said, 'No, none whatsoever.'  And he said, 'I think we're going to choose you for the job, and you'll know in two or three days.'  And they chose me.

BA: And what was your first job?

CK: Office boy.  

BA: What did that involve?

CK: A little bit of book work, but basically, we were delivering bonds because we dealt in foreign bonds.  So, as opposed to certificates, they are actual bonds.  There was a lot of delivering and to-ing and fro-ing and then I was moved onto the Australian gilts department which they had because I was the only one in the whole firm that could type.  They'd never seen a typewriter, they literally didn't have a typewriter.  And receiving letters from banks etc, dealing with Australia - the ANZ bank - I happened to mention to my boss that I thought it looked a bit funny writing in hand.  And he said, 'Well, we've got no-one that can type.'  And I said, 'Well, I can type.'  So I started typing letters which quite amazed the partners when they had to sign them.  They couldn't believe it - 'Where did these come from?'  And then I suppose I had that job for about a year and then... I wanted to go into the market very much and had several friends in there and I was told of a job that was for a blue button, which is like the first step in there, at a brokers called Hedderwick.  And I went for the interview, and they'd had, I think, about 18 people - it wasn't easy to get into the market then - and as I left two of them shook hands with me and they said, 'Well, we think you've got the job.'  I got back to my office and the buzzer went to go into the partners' room, which I answered.  And they jumped on me straight away and said, 'We understand you've been for a job with Hedderwick, and that we lot stick together and we inform,' which wasn't always the case, 'do you really want to go?'  I said, 'Well, I really want to go into the market.'  'Well, you should have told us.'  I said, 'Well, you're fairly unapproachable - I can only get as far as the manager and he's not interested.'  So they said, 'Well, if you'd like to hold on, I'll talk over the weekend with my brother and my father and we'll let you know next week.'  I said 'OK, I'm prepared to do that sir.'  And on the Monday they called me in and said, 'We'll bring you in in three months time,' or whatever it was, so I stayed with the company.  

BA: Could you describe Prior & Williams at the time that you joined it?  How big a firm was it?

CK: In the foreign market, there were about 10 or 12 firms still when I went in.  It had been, I think it had been the largest market in the Stock Exchange before the War.  There must have been 10 or 12 jobbing firms.  There was Prior & Williams, which was the oldest, who I was with.  They had 1, 2, 3, - 5 partners, a member dealer - 2 member dealers - and an authorised clerk and there were 2 blue buttons.  It was Dickensian to say the least.  When I arrived there at 16 1/2 years old, whatever I was, 17, they were the old-fashioned desks, like that shape, you know, with ink-wells, and scratchers for scratching out a mistake with ink - very old-fashioned sort of knife.  High stools - highback stools.  It was Dickensian.  Coke fire, couple of telephones and that was it.  

BA: How old were the partners?

CK: They were the Hue-Williams. There was the old man - Eric Hue-Williams, who must have been 60 odd.  There was his sons Anthony Hue-Williams, and Roger Hue-Williams who must have been - I was sixteen - in their 40s, I suppose.  And then there were two other partners who were not full partners but what we used to call half-commission men.  They were partners but they only shared on the profit that they made on their books - they didn't share on the profit that we made on the foreign books - they did Australians and South Africans.  And I suppose about 12 office staff.  But it was the largest, or second largest of all the foreign bond market then.  

BA: And they were dealing in all the foreign bonds?  

CK: Yes, we dealt in Chinese, Russians, Romanians, Bulgarians, Chilean Bonds, all the Brazilian Bonds, Antofagasta, Chile-Bolivia Railway, everything foreign, the city of Santa Fay, Romanians - all foreign bonds - Austrians, Belgians - all the old foreign bond market.  

BA: How healthy was that market towards the end of the forties?

CK: Say about 1950 it was very, very quiet and then it started brightening up because round about '53 - it must have been about 1953 - we had the Japanese settlement which was extremely good. They paid off in full and then a couple of years after that there were things called Potash - which were German orientated, they paid off. And then the German government came in in '53/4 and paid off a vast percentage of their debt which was quite big - not as good as the Jap settlement but very big.  And then Romania came in with a payment, Greece came in with a payment, Czechoslovakia, Poland.  They all in turn made compensation - not in full, but some of them were quite good.  So that wiped a lot of the market out but then it still continued, we still dealt in Brazilian bonds and all the states - Santos, Pernum Buko, Palotus, Paraguay - all those stocks.

BA: So at the time when you joined the firm it was still possible to make a reasonable living out of the foreign bond market?

CK: Yes, they made a reasonable living, but there was a lot of competition because there were about, well there were three main firms - there was Prior & Williams, Medwin & Lowy, and Paul E Shaw.  Then about six, seven lesser firms.  Paul E Shaw went broke I'm afraid - must have been about the Suez Crisis I would imagine.  They were the first big one to fold up.  

BA: Was it connected with the Suez Crisis?

CK: I'm not too sure when the Suez Crisis was, are we talking about '56, isn't it?

BA: 1956.

CK: They certainly finished before 1960 - that might have hit them badly, yes, might have hit them very badly.

BA: Do you have memories of the partners at roughly the time when you joined.  How would you describe them?

CK: Yes.  Well, old man Hue-Williams, they once pinned a notice on his back 'Horrible Murder' because he always looked so miserable. But he was a dear old man, he was a lovely old guy - he'd suffered quite a lot in the First World War. Although he was most severe to look at, when you got to know him he was quite a charmer.  The other two partners were - they're all dead now - Tony was quite feared by most people, could be very severe.  He was the senior partner - the eldest son.  And Roger who was much milder was easier to get on with I suppose, but I actually was picked to work under the senior partner and we got to know each other and we got on quite well together.

BA: Were the Hue-Williams a wealthy family?

CK: Oh, yes, yes.

BA: And had they started the firm?

CK: Well, one of the Williams had certainly - it was Prior & Williams.  In fact, to go back before I came because the firm was well over a hundred years old then, you couldn't be almost employed unless you played cricket, because one of the Grace brothers was a partner in the company, and his photo used to hang in the partners' room - it wasn't WG but it was his brother, I think.

BA: Are there any other stories about the firm before you joined it that you'd heard, or did you learn anything about the firm before you joined?

CK: Not really, no, no.  I just knew there was a job on offer there and I asked someone what the difference between jobbing and broking was and they didn't know.  Then I asked the other guy and he didn't know either.  

BA: The people you asked, they weren't connected with the Stock Exchange?

CK: They were with brokers, oh yes.  We were only 17 years old, they didn't have a clue.  And I just fancied the idea.  I said, 'Well I liked to see what this is'.  And of course I was told it was more or less the wholesale side and I was very keen.

BA: So after three months they did give you your blue button?

CK: Yes. What they did, I think the financial year for membership starts for blue buttons in March you see.  So this was about December.  So I had to wait from November three or four months because they didn't want to pay the fees twice, which were about...!

BA: Not much.

CK: No, not for a blue button, no.

BA: So about when was it that you went onto the floor? Was it 1948?

CK: '50. Yes, 1950.

BA: And you say you chose to work with the senior partner?

CK: I didn't at first.  I have the feeling the senior partner didn't really want me in there because they'd got one blue button and they were quite small.  But the other ones must have said to him, 'If you don't he's going to go'.  So they put me with the Australian side, which was just two partners, didn't have a blue button or a dealer.  And I worked there for about six months and we had an elderly man with us, been in the First World War, Mr Bevis.  And he was a member in his own right.  But they'd taken him on from another firm that had closed down and they never let him deal.  Although they said they would they wouldn't give him a book - in other words, I don't think he was up to it - he was quite elderly.  So they decided that it would be a good swap to put him over with the Australians as a blue button, although he was a member and bring me over with them. So I joined the main team and within the year, I suppose, I was authorised.

BA: What were your impressions when you first went onto the floor of the House?

CK: A bit frightened.  I mean it was so full. You were always told not to run, as they do now and did a few years back, but there was no room to run - it was absolutely packed, packed solid.  I mean you could almost lose yourself going through there.  But I loved it, I actually, you know immediately I got in there I was fascinated by it.  

BA: What fascinated you?

CK: The whole idea of competition, the way they did the markets, no telephones were used, there were no boards, you wrote it up in pencil and crossed it out on a list that you used each day.  And then all of a sudden, you would have one of your opposition in the markets, scream out, '98 bid KK, 98 bid KK.' And I didn't know what he was talking about then of course.  He said, '99 bid 25 KK.'  And when I was authorised of course I knew.  My partner would say to me, 'Wait till he bids 99 or wait till he bids, and go and stuff him' and that meant you walk in and say 'I'll sell you 25'.  And it was done like that and he might open his mouth and bid again or he probably wouldn't but sometimes he did, he'd got it right.  But the atmosphere was grand, it really was grand.  

BA: What was the Australian market like?

CK: Very quiet, very quiet.  In fact the first bargain I ever did was in Mitchell Cots which was a South African, and my second one was in I think it was Oil Search which was Australian.  That's when I was over there.  That's when I shouldn't have been dealing because it wasn't authorised but they'd [ie. the partners] gone away - one was ill, one was away - and fortunately the partner in the other pitch came over and confirmed the bargains.  But I hadn't even been told that I shouldn't trade.

BA: Was this fairly early on?

CK: Oh, yes. Blue button, yes.  

BA: And were you by yourself on the pitch all day?

CK: Yes, absolutely, yes.

BA: And booking bargains?

CK: Yes, yes.

BA: And did anyone come up to you and tell you that you shouldn't be doing it?

CK: No, I'd been in there not six weeks I shouldn't think, and one was on holiday and one was ill.  And I was there for about three days on my own and it must have been about one o'clock and the senior partner walked over to me.  We didn't get on well because he didn't want me at the time, he wanted me away, and he said, 'Is anything going on?'  I said, 'No, sir it's very quiet' - 'Nothing at all?' I said, 'Well I've dealt half a dozen times'.  He said, 'You've done what!' So I said, 'I've dealt half a dozen times', and he said 'You're not allowed to deal!'  I said, 'Well, I didn't know. People asked me prices and I made them.'  He said, 'You mustn't deal. Who have you dealt with?' So I showed him what I had done and he said, 'Right, write them all out for me, I'll go round and confirm them' - which was the correct thing to do.  No, I had literally not been told.

BA: But you were quite confident about making a price?

CK: Yes, yes I was quite confident.  I was over keen.  So he went round and confirmed it and it wasn't long after that they said, 'Well you come over with us and we'll put old Mr Bevis over there.'  

BA: Was this something that other blue buttons got up to occasionally?

CK: Must have happened, must have happened.  I mean, the rules were nothing like as strict but he got it right because he immediately went round and confirmed the bargains.  

BA: And soon after, you say, you went up to the main pitch?

CK: Which was only opposite and that was the foreign market which was 90 per cent of the business - at least 90 per cent of the business.

BA: And what was that like?  How many of you were actually standing on the pitch?

CK: Old father Hue-Williams, Tony and Roger, that's three, myself and Douglas Tribe - five of us, five.  We did a good trade - a lot of business, a lot of business.

BA: Was there a particular group of brokers who dealt in foreign bonds?

CK: Yes, - no, not in those days, correction, not in those days - because there was so much going on in them that any firm could have traded in them.  But going on years after that there were probably about ten firms that specialised in foreign bonds.  But even so you still get quite small London firm that didn't have anything to do with foreign connections.  We still had English clients that had bought stock before the war - or their fathers or indeed their grandfathers had - and they'd still come in with orders to deal - firms you wouldn't expect.  But there were actually firms that did specialize in foreign bond market where they had connections with France, Germany, places like that, yes.

BA: Was there anything particularly distinctive about the foreign bond market, comparing it with other markets for example, at this time?

CK: You had to know what you were doing!

BA: Could you elaborate a bit?

CK: Well a lot of the stocks had sinking funds operating which you probably know what I mean.  Every now and again they would come in to purchase stock at the market price.  

BA: This would be a particular broker working for the government? 

CK: It could be three brokers, I mean the case of Chilean Bonds - there was lots of Chilean issues, about thirty - the Chilean government used three brokers.  They used Cazenove, they used R Leyton, and I can't think who the other one was, it wasn't anything to do with us.  We dealt with Cazenove, someone dealt with Leyton, I can't think who the other company was.  Then sometimes of course these countries got into difficulties and they didn't always fulfil their function for a sinking fund, then the market would drop.  So it was a bit of a tricky market, yes.  It was a bit of a tricky market.

BA: And what were prices like?  Were they fairly depressed before the governments started to pay them off?

CK: Yes.

BA: Can you give me a rough idea?  Can you think of any particular example?

CK: I can remember Chinese bonds for instance being two per cent and in the boom about four years ago, which was on not only debt settlement hopes, which were pathetic when they came out, but also on collectors of Chinese bonds - Scripophily - they went to over a hundred.  And I never expected the Chinese government to pay a hundred.  I thought they might pay fifty or sixty - in point of fact they've paid about ten at the moment and it will be about ten again I should think.  They were three, two or three per cent.  The Russian bonds were three-quarters of one per cent, in other words less than a pound for a hundred pound bond, and in point of fact their settlement we had a few years ago, they paid 40 per cent and they're going to pay a good bit more.

BA: What was the market like for these bonds at the time.  Would it have been only a specialised investor who would want to buy a bond at that kind of price?

CK: No, I think you probably mainly got sellers.  And they were people that held stock for years - or their fathers had.  Or deceased estates - you got a lot of that but you did get the buyers, you made buyers because you said that sooner or later one day, they are going to pay.  And indeed they have.  

BA: How did you go about making buyers in those kind of circumstances?

CK: Well the market was very busy and you'd know people that had been interested.  There were certain companies outside the Stock Exchange, that one knew was interested in certain stocks and you talked to the broker that dealt for them, because you weren't allowed to deal with them, you talked to the broker, and sometimes get an order.  And then there'd been a little bit in a newspaper come out saying 'Trade with Romania', for instance, and everybody would think, 'Oh, they're going to pay off the Romanians'. And then you'd get an influx of people come in saying 'What do you think the hope is for paying off Romanians'.  And you would say 'Yes, Ok it's got to happen one day, because if it doesn't they'll never be lent any more money.'  And as it started off with..., I think the Japanese were the first - they paid a very good settlement.  People made a hell of a lot of money on Japanese bonds. I mean they were standing at 15-20 percent and they got paid off well over a hundred, so they said, 'Well, what's the next one?', so we said 'Well probably Germany', and it was.  And when they'd made their money on the Germans, what's next?, 'Well there's Greece, there's Hungary, there's Romania, there's China', and in turn I mean I think Czech bonds were very low and Poland - there was only a couple of issues and they paid off at I think, I think Poland paid off at 40 per cent, Czechoslovakia at 60, the Baltic states - Latvia, Lithuiania and Estonia - they then came into it - 'Will these ever pay?' 'Yes, of course they will pay', and they did.  I think that was in the 40s.

BA: When the prices were very low, was it difficult for you to make a reasonably good turn on these bonds?

CK: Yes, it could all be one way as a jobber - I mean you could just keep buying and buying and buying, I mean I've known a case where I've had 3 million of them on the book of the low price ones and there wasn't a buyer in the world.  So you just had to sit tight with it, lower your price a bit, try not to buy too much more and sort of hold your water.

BA: Was that balanced by markets or bonds that were a bit more profitable?

CK: Yes, it differed.  We used to deal in a stock which was a very good turnover stock which is now redeemed, Uruguay 3 1/2s.  Now that was a big market.  Spanish 4 per cent was a large market.  You could do a lot of trade in those.  And quite a turnover in the Chilean bonds.  South Americans... where the Brazilians and the Brazilian states, they could be tricky but basically one made money on them, unless they went into default occasionally which they did.  You made money on those too.

BA: What happened when a default did occur?

CK: Well you just sit and wait.  They just wouldn't pay the payment and you just had to hold the bonds and wait. You'd mark them down, take a loss on your book position and hope they're going to come up in the next six months with some money, which they normally did.

BA: So would you find yourself hanging onto stock for very long periods?

CK: Oh Lord, yes.  I've bought stock in out of the way..., let's say South Americans..., say Chile.  I had this phone call when I was up in the office having a sandwich and a quick drink.  I was on my own because we were very busy, we were going up one at a time.  And my partner phoned from the pitch saying a certain broker wanted to see me, he had a large order.  So I said, 'Send him up.' And up he came and he'd got this huge string of Chilean Government stocks he wanted to sell.  There were about 15 stocks, I suppose, different stocks out of the 20 odd that existed in Chile.  But a couple of them were municipals which were very out of the way.  So I immediately said to him, 'Well you can sell this 25,000 at the market price,' - I think they were about 70 odd at the time, 80 - 'you can sell this ten, you can sell that five,' going down through the list.  One was very large and I said, 'No, you can't do much with that, I'll do 10,000'.  Then we came to a couple of odd stocks and I said, 'Well, you're never going to sell that one and you're never going to sell that one', so he said' Well can you explain to me why?' I said 'Yes, because they have a sinking fund that does operate sometimes but it's so small they don't do anything at all.'  So he said, 'Right, I'll deal with you, I'll leave the rest of the orders with you and if I'm not here it's my partner in the office that's dealing with it' - he wasn't a partner - and I knew the partner very well from way back, very well indeed, although he never came into the market and he didn't deal in those stocks, he dealt in Americans but I knew the man very well, we were the same age.  Within two or three days, I'd phoned up or seen the dealer on the floor and taken some more stock and he mentioned these two out of the way ones and I said, 'No, there's not a hope in hell, but I'll try and place one of them,  which I spoke to a broker [about]', and I said, 'Look you're going to have a wait a long time for your money, but there's a good turn on this one if you are prepared to wait.'  So he took it, so I did another one, then the nasty one outstanding, the dealer was away and I phoned up his partner, I won't mention his name, spoke to him and said, 'What are you going to bid me for those then?'  So I told him.  He said, 'I'll come back to you,' I said 'OK, fine'. And he came back within about half an hour and he said, 'Colin, do you take me for an idiot?  They're worth a lot more than that.' So I said, 'Really?' So he said, 'Yes'.  I said, 'Well, I've done all the other business', I said, 'this is the tricky one' (or I'd done most of the business).  He said, 'No, no,' he said, 'I'll bid you' -  more than I'd bid him.  So I said, 'You've got them.'  'No, no, I don't want them'. I said, 'No, but you're saying I'm bidding you the wrong price.' 'Yes, I am'. I said, 'I see, what do you think should the bid price be?'  He told me.  I said 'Oh, fine,' I said, 'you go and sell them then.'  And he came back half an hour later, and he said, 'What do I do? Buy your lunch, eat my hat or what?'  Because they were that bid but for something like £1500 stock and he had about £16,000.  So I'd got to hold on to those for something like seven years in order to shell them out at six monthly intervals.  

BA: So he didn't appreciate the actual intricacies of making a price. 

CK: No, what he did, he was a very clever guy, a very nice man, but he thought he'd better check his price, so he went to where he thought I would have gone through someone to go to.  Found out what the bid was but he never asked the size of the market, so the amount he could sell was minimal, and that's why I'd knock the bid down proportionately because I'd got to hold the things for six or seven years.  Of course, he dealt with me.

BA: Well can we go back to the foreign bond pitch when you first joined as a blue button.  What was the next stage from that?

CK: Well, I got authorised fairly quickly, I think it was about two years.  

BA: What was involved in being authorised?

CK: It meant that from a blue button you were an authorised clerk, which meant that you were allowed to deal to make prices and trade, but you had to have a partner on the pitch, which wasn't adhered to too strongly.  What it meant was you couldn't have an authorised clerk standing there dealing day after day after day without a partner.  But if the partner was with you and then one day he'd gone out for an hour, that didn't matter.  There was a partner in charge of the pitch.  So then one started making prices and if you got it wrong you got a nasty rocket from the partners and if you got it right they'd just say, 'Well, done' or something like that.

BA: Did they give you your own stocks to deal in or were you dealing in the same stocks the partners were?

CK: No, I was understudy to the senior partner and my partner, Doug Tribe - we weren't partners then - he understudied his brother, so he did his stocks with him, or when he wasn't there and I did exactly similar.  

BA: And how did the relationship work with the partner if you were both there together at the same time?

CK: The partner and I?

BA: Yes.

CK: Dreadful.  You weren't allowed to make a price because he wanted to do it.  We weren't too busy in those days but still busy enough.  But he wanted to do the whole thing and after about a couple of years I'd got a lot of friends (because when I was a blue button, they were busy in the office at a certain stage and to save a body from the office, they put me down checking the bargains, so I got to know an awful lot of people, because I was the only checking man for Prior & Williams - most of them had a couple - and I was down there virtually the whole day long.  So I knew a lot of young guys my age and a lot of us were put back up into the market you see). So they all came over and shook hands and he knew I knew a lot of people, and I did ask if I could do a book on my own.  We both did - Douglas Tribe and I - and we were both told no, we were understudies. And then I would come back from lunch, after a couple of years I had been dealing, two or three years; I would come back from lunch and my colleague, Douglas Tribe, would say, 'So and so's waiting to deal with you there, there's so and so waiting to deal with you,' and they wouldn't have approached the partner because they were waiting to deal [with me].

Tape 1, side 2

BA: If the partner you were dealing with insisted on doing all the dealing himself would you simply stand there and watch what was going on?

CK: Yes, yes, you would, but it used to get very frustrating.  As I say one had quite a lot of friends by then who were a similar age, they were pretty terrified of the partner and they didn't want to approach him and they wanted to deal with me anyway, which was good for me, because it brought business to the firm. Whereas if I hadn't been there, he could be at times a bit unapproachable - they were frightened of him, so they'd have gone and dealt with the opposition.  

BA: Did you feel you lost a lot of business that way?

CK: I feel I gained a lot of business by dealing with the younger generation that came to me and I think that was appreciated in the end.  It was realised that I was bringing business.  

BA: Did you ever have to refer back to the partner?

CK: Oh, yes, oh yes.  I mean if it was a big one, if it was a big order, I mean supposing I made a price and the market's in 10,000 and they said, 'Well it's a 100',     oh no, I wouldn't deal - not with him standing there - that would have been wrong.  I might stick my neck out and say, 'Well, I'll make it to you in 25', but if they said they were bigger than that, I'd say, 'Well, I'd better ask the governor,' and I would do so, after all it was his money I was gambling with.  Oh yes, definitely that.

BA: And what was the next stage after being authorised?

CK: I was made a member.  That was quite strange how I was made a member because I didn't have the money for membership - you had to have two sureties to put up money as well.  And talking to colleagues over coffee and that they said, 'Well, there is a list that you put your name on and you might have to wait ten years, but after that period every now and again, every year, if there's not too many members coming and paying the full fees, if one's done - which I suppose one could call an apprenticeship - they pick so many out to become a member without paying the full fee.' And after about... 1959 in fact it was, this came up. My name was on the list of about six people who could become a member without paying; you had to pay your fees but without the surety business, without the full full thing.  You didn't have to have a nomination - that's what it was - you didn't have to buy a nomination which was then about £1200 so it was quite a lot of money.  You still paid the full fees and you had sureties.  And I didn't even know my name was up there and a senior partner of a broking firm we did a lot with came over to the pitch.  He knew my two partners very well, he was older than them.  And he said, 'Oh, I see Colin Knock's name's up for membership.  I shall be very cross with you and I shall never deal with you again if I'm not to be his main surety.'  And he stormed off so of course they were shocked.  And they said 'What's this?' I told them.  I said 'I've had my name on there for several years and it's come up and Mr Heath has offered to be my surety,' and they said, 'Well, how much will it cost us?' And I said, 'Well, I don't know fully, it's full membership but I don't have to have a nomination.' So they said 'We'll think about it.'  And about three days later they said, 'OK, we'll do it.' And I was made a member.  

BA: And this was in 1959?

CK: Yes.

BA: What did that involve for you in terms of your work?

CK: Enormously, enormously.  In fact after that when we had our own firm and we continued the firm - continuation - as soon as we had a good year, if we had a couple of guys that were youngsters, who were eligible and they were any good, I'd insist on making them members, because it's prestige for the firm and it's a great prestige for them.  Not so much today, not the last five or ten years but it was an enormous prestige to be a member as opposed to an authorised clerk.  

BA: What kind of place was the Stock Exchange at this time during the 1950s?  

CK: It was the old building - still had the old teak floor which was about three inches thick.  The waiters used to come round with the watering cans twice a day and water the floor to keep the dust down.  It was lovely, absolutely lovely.  

BA: And what about as a group of people?  Did you feel that they were forward looking or were there a lot of traditions?  

CK: Awful lot of traditions, awful lot of tomfoolery.  Some very severe characters - one of my partners was one of them.  Very severe people.  Certain people if you trod on their toes, you'd be upstairs before the Council; I mean, really picked on you, you know.  

BA: Did that every happen to you?

CK: In point of fact it did.  When I was a member of about four weeks standing, I was going down to the main members' toilet which was like a privilege to go to, which was a lot better than the others.  And I bumped into this gentleman with his wing collar coming up the stairs the wrong way.  He was a good deal bigger than I was and bumped into me very hardly and I didn't apologise because it was totally his fault.  And he didn't apologise in fact he said, 'Who the hell are you with, boy?'  But being a member, which I wouldn't have dared done before as an authorised clerk, I said, 'I'm with Prior & Williams, would you like to come and talk with them?'  He never said another word because he'd have met his match.  

BA: And can you remember any of the traditions?

CK: Such as....

BA: Well you said that there were lots of tricks...

CK: Tricks they played?  Oh, my God yes.  There was an old boy who used to sit on the pitch between Prior & Williams and Goldsmit Brothers, who were a funny old couple of lads.  One was a bit off his rocker; nice old boy but a bit off his rocker.  And this old boy used to sit there everyday between the two of us and I think he was with a company called Spooner.  He was a one man firm so they were disallowed about a year or so later because you had to have two partners in a firm.  And for some unknown reason, totally unknown to me, he was about 70 odd then, he was known as 'Bum' and 'Bum' used to sit there after his lunch and he was one of these chaps that we call spoon fed.  He didn't make prices.  A broker would come up to him and say, 'I want to buy 2,000 ICI,' and he would go round and buy them and then charge the bloke a penny and make twenty quid.  He was spoon-fed.  And everyday without fail, about half-past two, he'd open the Times to read it and it would be set alight without fail, everyday.  He would doze off behind it and someone would light it and that never failed.  And there was the old guy that used to... I think it was Seymour - he was terrified of trading and he had an elder brother who was quite good at it.  If anyone approached him he'd shake like a leaf and say, 'Wait till my brother comes down.'  He wouldn't trade at all.  The old boy that was with us - Bevis - who'd been in the First World War, used to point out people to me when I was a blue button indeed - 'Who do you think he was?', and he'd tell me what he did during the war.  'Who'd do you think that was?' I said 'I've no idea'.  'Who do you think this is?'  And one day a little guy came in with his mac turned up like that, hands in his pockets, creeping through the market.  He said, 'What do you think he was?' I said, 'A spy'.  He said, 'How did you know?'  And I think the fellow's name was Blennerhassett and he was the first British spy to be dropped by parachute.  There's all sorts of characters.  He said to me, 'You know that firm, Frisby Brothers?' I said, 'No.' Because there were so many jobbing firms, so many, and outside your market you didn't know them. I mean you knew the gilt edge market was over there but you didn't know a soul in the firms. He said, 'This is Frisby Brothers.' So I said, 'Oh yes?' He said, 'That one's the coward', so I said 'The Coward?' He said, 'Well they were both in the War when I was' - the 14-18 War - So I said, 'That's a bit unkind. Why's he called the Coward?'  He said, 'He only got the military cross, his brother got the VC.' That's true, absolutely true.  So many characters like that, it's unbelievable.  

BA: You became a member in 1959.

CK: '59, yes.

BA: And you continued to work on the foreign bond pitch?

CK: Stayed on the foreign bond pitch the whole time. 

BA: And what was the next step?

CK: Next step, I suppose, about '63, '62, '63 Douglas Tribe and I who were both members - he was two years senior to me in age - we both had offers from other companies and it gradually got round. They saw us talking; only five of you standing together it became pretty obvious, and we'd go up to talk to people.  And the partners obviously got wind of it and one afternoon we'd both been out to lunch with people, we didn't have long lunches in those days at all but we had a couple.  And the senior partner then called both of us to him and he said, 'It's quite on the cards that in the foreseeable future one of you, or both of you will be made partners.'  And that was his way of saying, 'Don't go', presumably.  And about six months after that they said they were making us both partners.  

BA: Why were you looking for other firms?

CK: Money basically.  Money basically.  We were low paid.  We were low salaried for what the salaries were for what we were doing as member dealers.  

BA: Did you get a lot of to-ing and fro-ing between firms?

CK: Not so much with a jobbing firm, no.  With brokers, yes.  But not as much with jobbers no, not as much.  But we weren't going to an opposition firm - it wasn't done, I mean it wouldn't even have been allowed in those days for us to go to Medwin or Paul Shaw or something like that - it wouldn't have happened.  It would have been very nasty had you done that.  But there were other offers.  I had an offer in the option market which was just starting and a couple of other offers, one with a broker.  My colleague had two offers - one with a jobber but it wasn't in our market so that would have been acceptable - and as I say after a few months they made us both partners.  

BA: And what did partnership involve? 

CK: Not a lot.  The first thing we said - we were both married with houses and young families - the first thing we said, 'What are our salaries?' 'What are you getting now?' - they didn't even know.  We told them and they gave us a drawing power of up to double that.  But then you didn't know whether you had a bonus to come or not.  You could have ended up owing money I think and it wasn't too lucrative at all.  And that lasted for about two years.  Business had dropped off quite a bit.  They were still making money and they both decided, well they told us they were thinking of packing it up.  So we had the option of carrying on the firm, which we didn't have any money [to do], or joining another company.

BA: Why were they thinking about packing up the firm?

CK: Well, I think they tried to expand it and they couldn't get anyone comparable to go with, or anyone wanted them comparably.  They couldn't get a match.  They tried.  I know the firms they tried and it didn't cotton on.  So they both decided with the knowledge they had and a lot of friends to go broking.  

BA: When you say 'they', are these the brothers?

CK: The two brothers, the father was then dead.  So they went to a large broking firm where relations were quite good, I dealt with them quite a bit after that.  Douglas Tribe and I had the option of staying on with Prior & Williams.  We had two other partners but they weren't on the foreign book.  They were older men doing the Australians.  They thought that as one of them was nearing sixty and the other one was in his late fifties that it would be their capital that would be at risk and they didn't know us all that well because we were kept separate from them. And they said, 'We're not doubting your abilities but you can't make anything as much as those two have'.  And we said, 'Well we think we'll make more'.  'Why?'  I said, 'Well, because we've got a lot more friends.'  Certain business wouldn't come to us but a lot that didn't come to them would come to us.  Anyway we tossed it over for a few weeks.  And they said, 'We think it would be best if we joined someone else, because if we pull out in a few years and leave you to it you'll have no capital.'  So we joined the firm of White & Cheeseman.  

BA: And what sort of firm were they?

CK: They dealt purely in banks and insurances, nothing else.  So we were totally alien to them.  They had about five partners, and we took four, making nine.  We all shared a nice big room together with all the modern equipment as it was at the time. It didn't work out because the market they'd had was an easy market. The banks had all been giving rights issues and they were offered a block of shares so they made money all the time, they couldn't lose. But as soon as that stopped and the competition they had was Wedd and other big firms,  they kept losing money. And they kept losing money to the extent that after about two years, Douglas Tribe and I had a debit on our partnership account, through no fault of our own - we hadn't drawn the money, it was just our share of the losses. And we spoke to the two that had come from Prior & Williams with us - Grant Coleridge and Ken Lee and we said, 'We just can't afford [it], we've never owed a penny in our lives, we've got mortgages, we've got families, we just cannot go on.  We're making a lot of money, and all they do is lose it.  We just don't like this debt.'  

BA: How is it that you'd come to join them in the first place?

CK: Well because we needed capital and the four of us together could have stayed as Prior & Williams, we'd have made, with hindsight a lot of money and stayed as Prior & Williams, but as they were nearing then their 50s they didn't want to risk their capital not knowing what we were going to turn out like being on our own.  So we joined them to get more capital which didn't work at all.

BA: Had they been looking for someone to merge with?

CK: Oh, yes, people were doing that all the time. 

BA: And you discussed things informally, would you? How would you make contact in the first place?

CK: Through a broker originally, it's normally done like that through a broker because we didn't know the firm of White & Cheeseman, or the partners indeed and they were a very nice crowd, very nice people. But as I say after two years, or maybe three years, it was banging your head against a brick wall and there was no sign of them making any more money.  I mean the market they'd known was so easy.  It wasn't easy any more.  So we decided to separate and we said we would have to give them notice and go and they said well they're not doing very well; in the end they said, 'Look we'll leave you the firm, we'll go.'

BA: Had you brought your foreign bond book with you?

CK: Oh, yes.

BA: So you had stuck to that?

CK: Stuck to that.  No-one else touched it. No, Douglas Tribe and I did all the foreign bonds, no-one else touched it.  So we reverted back, although the name was then White & Cheeseman, it really was still Prior & Williams, because we gave up the banks and insurances and just kept with the foreign bonds and stocks and the Australian shares.  

BA: What did the old partners from White & Cheeseman do?  Where did they go off to?

CK: One retired, the second senior came with us, he put some additional capital in to the bit we had and the other two partners had.  He came with us and stayed with us until he died.  He was a lovely man - Jim Hamilton.  And one went into insurance and the other one took a pub.

BA: Was it a very different firm to Prior & Williams?  Did they have a differeent style?

CK: Yes, they were, apart from the senior, well even from the senior, they were younger, they were a very friendly crowd.  But it had just gone against them.  It wasn't their fault.  The market that they had known which was so easy, as I say, with new issues all the time where you made threepence a share whatever you did, had gone.  So there was no way they were going to make money, and they knew that, they couldn't do it.

BA: So you carried on White & Cheeseman.

CK: Correct.

BA: About when did this happen?

CK: I think about 1966.  Yes, about '66. And we had quite a few good years, continued like that; we had one or two bad years, pulled ourselves out of that; and then we did quite well for several years.  Made another couple of partners up.  And then one went and then we made another two partners up - youngsters who were with us from school.  And we were White & Cheeseman when we were taken over by Guinness Mahon.  

BA: Which was?

CK: Part of the Guinness Peake Group.

BA: Yes.  And when did that take place?

CK: Three years ago I suppose.  They put a director with us who'd worked for us years ago before. He went to Australia and then came back, and there wasn't a job for him and he'd gone into banking.  He was with us for about a year down there, less than that actually.  And then he decided to move on and we were then taken over to go into Guinness Mahon's office, we came off the floor which we all, or at least I hated doing.  The youngsters thought it would be a good idea and they regreted it but it was inevitable.  And then Tony Jenkins' firm, they were looking to be taken over and had several approaches and in the end they were taken over by the same group as us, so we sat in an office together, although did our own books. And then a couple of years ago my young director I worked with decided he would like to make a move and he and his assistant were going to join Jenkins which were quite happy to have them, because he wasn't doing much on the book he'd been on and I thought I would be happier, as I sort of bought him up from a boy to go with him as well.  So I saw John Jenkins and said 'Two are moving to you, what about me moving.'  He said, 'Lovely'.  So I moved over as well.

BA: And again roughly when was that?

CK: About two years ago.

BA: Well, we'll go back in time again now to the late 60s, how did you actually run the firm?  Was it a big firm to start with?

CK: What when we joined White & Cheeseman?

BA: Well, the point when the old White & Cheeseman partners had gone.

CK: When they went out?  No, it wasn't [big] because we had offices in Pinners' Hall at the time we had to get rid of about four staff, that left us with about ten I think, ten staff.  There were one, two, three, five partners, two blue buttons and a dealer.  So that was the extent of the firm and we warned them that there wouldn't be a rise for a year and there probably wouldn't be any bonuses for a year.  In point of fact after about six months we were doing very well and they got a good bonus.  Then the next year we did extremely well and we treated the staff very well, 100 per cent bonus, and the next year they got a 100 per cent bonus.  We had thoughts of expanding and we thought well this is damned silly.  Doug Tribe and I had done the book we'd been doing since we were 17, 18, we knew exactly what we were doing, why go into another market?  Of course the jobbing system was never over flushed with capital - never over flushed, it could always use more capital.  And by then we'd got enough to job along quite nicely.  We had one or two set backs - there was a setback in 1970, setback in '74, but we overrode those and then a lot of the jobbing firms that had been in the foreign market had disappeared entirely.  In fact there was only Medwin & Lowy and ourselves left.  Paul Shaw had gone, Aubrey Spurling, Wissman, Black & Boyd, they'd all disappeared, Woolf Christey and Lemon Bristowe - there were loads of them.  And Medwin and ourselves, which as Prior & Williams had been the biggest two, we were still going strong, they dealt in exactly the same stocks as we did.  Every foreign bond we dealt in and then where we had an Australian side - Australian industrials - they had Americans and Canadians, so they were very comparable;  similar size - they were slightly larger in numbers. When this boom came in the foreign bonds, which was mainly brought about from the Scripophily market when they leapt to extremely high prices which they never saw again;  whether it was that entirely or whether their Canadian market it might have been, and American, but they got into trouble. They had been quite a rich firm. But mind you they had lost senior partners and as senior partners go out a big chunk of the money was going and they had lost one two three four seniors.  I still think they had been as financially viable as we were but they obviously took a bigger tumble either on the foreign bonds or the Americans.  I don't truthfully know.  I think it was the foreign bonds, but they came out of it very badly and must have been in a mess and went to Wedd and asked them to help them out.  So Wedd took them over, which is a very small thing to Wedd to take over a company that size.  And they kept them on for a couple of years and then they gradually packed up the foreign markets, so we were the only ones left. So we got all the business. 

BA: So for much of the time before this firm went out there was only one jobbing firm you were competing against.  

CK: For a long while, yes.  For quite some years.

BA: How did that work in practice actually on the Floor of the Stock Exchange during the normal course of dealing?

CK:  They had their friends, we had ours.  You get other people that just wanted to deal at the best possible price and would go all round the market, back and forth, however many jobbers there were whether there were two or ten.  But basically our friends we dealt with for years always came and dealt with us and their friends dealt with them.  Really it's as simple as that.  It's a case of personalities but we got on quite well with them.  Going back about seven or eight years I suppose, John Thurlow, who was a senior partner retired, and I got on very well with him.  We had a mutual respect - we weren't friends - we both had a mutual respect for each other's knowledge and what we did and to an extent whereas you hadn't done this years before you talked a bit - you could talk to each other more.  

BA: What would you talk about?

CK: A situation whereas before you wouldn't approach people many years ago, I would go over to him and say, 'John, I think you're making entirely the wrong price in that stock,' whereas before you didn't do it, you were pig-headed about it you just didn't talk to your opposition.   And he would say, 'Why', I said, 'Well, I think you're dead wrong, I'm willing to buy stock from you at that price or sell stock to you at that price'. And then he'd say, 'Oh, maybe I am a bit out', or 'No, I'm not wrong.'  But you'd talk.

BA: When you say you had your friends, do you mean you had brokers who only came and dealt with you?

CK: Oh, yes - not the majority, not the majority. The majority of brokers, especially if they didn't know the market, would check their price with however many market makers there were. 

BA: Even when there were just two of you?

CK: Yes, but you would get friends that would only deal with you anyway.  And I mean the last thing you would do would [be to] give them the wrong price, because if they found out that you had given them 93 and they were 95 bid elsewhere they'd never deal with you again.  So you just didn't do it, it was a mutual trust. It's the same as having, you're making a price on the pitch and you make 72/3 to someone and the next chap (he [i.e. the first person] doesn't deal, he hasn't traded so you haven't changed your price, 72/3) and [to] the next chap, well I say '70 to 5'.  'But you just made him 2/3?' I said, 'Well that was him.'  Now that's happened about six times in my life of 40 odd years.  And the chap would say, 'Why is the price so wide to me?' I said 'Well don't you know?'  Because he was a crook, he was a wrong 'un.  And he would pick you up as soon as look at you.  You don't do that more than once or twice.  And then they get stamped.  And he'd say, 'I don't know what I've done wrong.'  I said, 'Well, you go away and you think about it'.  And then he'd either come back and say, 'I apologise, let's start again,' or else you'd never see him again.  But I would imagine that's happened to me six times in 40 odd years, so that's not a bad average.  

BA: Was the foreign bond market affected by the same kind of factors that affected the gilt market, for example a change in bank rate or a devaluation?

CK: No, not at all.  You'd look at one or two stocks, you  might look at a couple of fixed interest stocks like Spanish 4s, Japs 6s may be, and alter them a shade, but only a shade.  But it wasn't affected by Wall Street, that sort of thing.  Obviously when you had the Suez crisis, yes, of course, it knocked the bottom out of it and then again we had the other crisis after that - Cuba - that hit the market for six because everyone was selling.

BA: Do you have any particular memories of dealing during those periods, during Suez or Cuba?

CK: Yes, every time you opened your mouth and made a price you got more stock, so you had to keep dropping it. So then you not only widen out on your price or lowered your price you cut down the size of your market, where you make it in 25,000 of something you say it's in ten and if you bought another ten and another ten then you drop it again you might have to say it's in five.  Oh, yes, you had to do that because the capital wasn't there to keep supporting to buy and buy and buy stock.  We had big positions, for a small firm we used to have some very big positions; but it was always covered, but you had to make sure it was covered.  

BA: Were you affected by periods of falling prices in the Stock Exchange generally.  For example, in 1974, when prices collapsed?

CK: Yes, very much so.  

BA: Do you have any memories of that time?

CK: Well, the main reason was really that people would look at their portfolios and see that their industrials had dropped so much and they'd look at the foreign bond market - if they had foreign bonds, which a lot of people did have - and think, 'Well these haven't dropped all that much.  Alright [I] doubled up on my position two years ago when they were low and I've got a profit', and they'd sell those to retrieve money to pay the other off, you see.  So yes, the market dropped.  

BA: Were there any particular boom periods that you recall going through?

CK: Oh, loads of them.  The first boom period would be the Japanese boom when everyone was buying Japanese bonds all of a sudden and they made a settlement and that was extremely busy.  I mean we were there till 8 o'clock in the office, every night, five nights a week until 8 o'clock.  That was very busy. And then when that was settled it switched to the German settlement which was very busy and very, very heavy trading.  It would flit about.  There was nothing consistent about the stock market at all - you could be as busy as hell one week and then nothing during the next week.  But those periods then were quite long.  Extremely busy times, yes.  Very busy.  And then Australian boom again. Because when that got very busy - the Australian market - I was seconded over to that and we were in a different part of the market then.  It was the old Post Office which the Stock Exchange owned and we went over there and I went on the book there for six months or so because they were so busy and we were quiet on the foreign book.  

BA: And how did that actually work in practice?  It was just simply more people wanted to deal on Australian Government bonds?

CK: Yes, you had the Poseidon affair and things like that and Tasman X and all these other companies that were going and there was a boom all of a sudden in the oils - Woodside, Oilsearch all this sort of stuff.  And it was at Christmas - I don't know what the year was now, gosh.  It was a very, very busy one and then after that came the huge slump.  '74 I suppose, that would have been it, I think.  And then you couldn't cope with the bargains, you were doing so many bargains a day it was all you could do to book them.

BA: How did you find that yourself being a dealer on the floor of the House - was it physically tiring?

CK: No, it's lovely, you're only tired when you are not busy.  No, I loved it, I mean the old adrenalin starts to flow, the tiring bit is when you stand there all day and you are not doing any business.

BA: How would you cope if there would be three or four people wanting to deal at the same time?

CK: Well, you just have to.  They have to wait because don't forget there were four to five jobbers then in the Aussie market, really.  By the time they had left you because they couldn't wait and pushed their way through the crowd to get to the next guy they would have to wait again.  So the simplest thing to do when it was that busy was to deal, otherwise you would never get your orders done by the brokers or us.  So they mostly just dealt.

BA: And were there any other booms that you recall, after that.  You mention the Scripophily?

CK: Scripophily, yes, that was a boom, yes.

Tape 2, side 1 

CK: Yes, they took in a member from the Stock Exchange who had been a jobber, and a broker I believe.  And he had always been interested in the bonds, privately, and they started doing a lot of trade.  He was trading direct with the public from Stanley Gibbons.  And they would buy blocks of stuff from ourselves, through a broker obviously, and the prices just took off and then they eased a bit and then they just rocketed. And I can remember selling one Chinese bond that had been around 20 per cent and they had gone up 30, 40, 50, 60 and I said, 'Well they're never going to settle at that rate, they never pay more than fifty or sixty'.  The debt was about 60 million in total par and I actually sold a lot of stock, booked it to loads of people. But one particular broker I have in mind I sold him stock for about four different clients - a lot of stock. And he discovered when it had this huge rise - he'd sold some of it to take big profits - and he discovered that he had sold one stock twice, in other words he was short which he couldn't be.  He had to buy this stock back to cover his position and he came to me - it was Canton-Kowloon railway - he came to me and I said, 'I haven't got any stock at all.' So he went to my opposition to try and buy it - they didn't have any stock at all.  So he said, 'Well, I've got to buy it.' And I said 'Well, hopefully in the next few weeks I'll come across some' - I didn't. And in the end I had to sell him stock at 110 per cent which I didn't have and I didn't want to do it. And I said, 'They'll never be worth this price, but, you know, I can't sell you stock I haven't got unless I give myself a margin.'  And he actually paid 110 - I think they went back to 20 per cent.

BA: Where did you get the stock from?

CK: I didn't.  I was still short, that's why I charged him that price - I couldn't afford to sell it at I think they were 100 at the time. I said, 'I just don't want to sell them,' and he said 'Well, I've got to close the position.'  So I said, 'Well, obviously I don't suit you, go and try the other bloke.' He couldn't buy them from him either.  And I sold him stock at 110.  He bought for his client at about 30 and 40 and sold at about 80 so they'd made a damn good profit on that, but it was just a case of I didn't want to sell them, we didn't have any stock on the book, everything was going.  We had stocks that still haven't been settled, which will be the only two German stocks unsettled, the East German stocks Dresden & Saxony.  They've been up to 120 percent.  When I left the company, I was a bull at 10 percent.  Which I had written down from about 80 over the years, so I left them with a good position because I think they'll make money on that one, on those two, or four stocks actually - there's two types of Dresden and two of Saxony. But they were over 120 per cent and there was no stock about.  So now I think with unification they will settle those, at what rate I don't know.  If it's as good as the West German government did, there'll be an awful lot of money to be made and I won't participate any more!

BA: What kind of capital did you need to run your books? You say that there wasn't a lot of capital about.  

CK: Well it depends what time you mention.  I mean when we started off, when the White & Cheeseman people went out we retained ourselves as White & Cheeseman, we probably had a capital of about - this is what, '68 something like that - we probably had a capital of about £120,000. But of course all the stocks then were much lower price, even the Australians were miles lower price than they are now.  But the foreign bonds were mostly much lower and they gradually went up over the years and of course the capital has increased, thank heavens.  But it was quite small when we started off.  It was a bit of a shoestring job.  But it worked out. 

BA: And so how much would you have to use to run the book, say getting on during the 1970s?

CK: Half a million.  About half a million.

BA: Did you find you had to rely on the banks terribly much?

CK: Not a lot.  It would happen at times.  We had the facilities there but no, not a lot.  In fact at certain times when periods were quiet we in point of fact were lending money which helped.  But the reason is really, we got into a mess more over the Australian stocks because if you were trading 10,000 shares and make threepence a share, you know your profit.  But it isn't a profit because by the time that stock's delivered and you get your money it could be six months.    Australians are extremely bad for that sort of thing.  Industrials were the same. Whereas with a foreign bond there was a fortnightly account and you settle then and the bonds are physically delivered, and if they are not after a couple of weeks one presses and says, 'Where are they?' or 'Why haven't you delivered them?' or 'Why haven't you paid us.'  So you got quicker settlement.  Also quite a bit of our business from the sixties to well into the eighties, '65 to '85, we dealt in the Irish gilt edge market - Eire.  So when one dealt there it's cash the next day, so your money wasn't tied up.  All the tied up money was in Australia - 'on the water' as we used to say.  But the foreign bonds basically, no they were settled.  Every account, fortnight or three week whatever, basically fortnightly.  Irish gilt edge was settled within one or two days so you received your profit and had it there in the bank.  It was the Australians that let us down.  

BA: Did you ever have any direct contact with the governments in whose bonds you were dealing?

CK: No, never, no. 

BA: What about their brokers?

CK: The brokers dealt with us.  The government didn't deal with the brokers.  The government dealt with a merchant bank, normally.  They deal with Barings, Rothschilds - people like that - Hambros, Schroeder, and they would in turn not deal with us direct, they would deal through the brokers that they selected.  As I said to you earlier in the case of the Chilean stocks, they used three different brokers.  

BA: Did you ever have any contacts with these brokers outside of the House?  Did you ever do any business outside of the House?  

CK: No, not outside, because you wouldn't remember all your positions.  I mean you would speak outside, oh yes.  You would have lunch occasionally and speak with them, certainly.

BA: What would be the kinds of things that you'd talk about?  Would they want to get in touch with you about particular issues or particular questions?  

CK: No, because basically they'd been doing it for a while.  It might happen if a chap left a broking firm and they put someone in charge of it again who didn't know the market. Then he'd come to you. It happened a - case in mind - where the chap that used to do all the foreign business of a big broking firm was away, his number two was ill and they sent in a chap who was a very efficient dealer but he didn't know our market at all.  And he just said, 'I'm in your hands, what the hell do I do?'  Because it was tricky.  I mean, certain Greek stocks, certain Romanian stocks were not a round amount in pounds.  I mean if you dealt in Spanish fours you couldn't have a hundred pound stock it was 99.68 because of the currency which had changed, you see.  And 79.72 was an amount and you could deal in an amount and the chap would say, 'I want to sell 10,000' and I'd say, 'There isn't 10,000.'  'Well there must be'.  I said, 'No, there isn't 10,000 it's 998. - and they had to have that right to pay their client out for when he sold the stock.  So you had to know these things.  I mean there were different denominations, it's not a round 20 pounds it was... In the Russians, again, a lot of the stocks were 100 pounders and 20 pounders but you couldn't have a 100 in others it was 99.25 or £99.50. All sorts of complications that you could only know on the foreign book.   I mean I could go to lunch and come back and a chap would say - one of my dealers - 'I bought so and so.' I'd say, 'You can't have that.' 'Yes you can.' I said, 'No you can't have it - there's no £50 bonds.'  He'd bought 750.  I said, 'There's no 750 - they're 100s, 20s and £20 bonds, so it's 740 or 760.' Now if you don't know that and you let that build up you can be in a hell of a mess, and the broker is and the client is.  So really it was a lot to do with training - which I had - very, very good training and experience.  

BA: Did you feel all along that you were dealing in a highly specialised market that was in many respects quite different from the main equity and main gilts?

CK: Yes, because we did a few equities, very few, and it was different, there were different people dealing in who you didn't know, the other market makers.  But with the foreign bonds, I always felt at home having done it for so long.  When the German settlement came out which was highly complicated - and I'm not brilliant at anything like that - I was just given this pamphlet and said, 'Well go home, study it and tell me what it means.'  

BA: What did you feel the rest of the market's attitude was to you as a jobber in the foreign bond market?

CK: Experts. Experts I would say.

BA: Did you know the other jobbers in other markets, socially, or even professionally?

CK: Oh, later, later but in the early years, no.  You never went near them.  You didn't know who they were, what they traded in.  You knew their names. But as I say I think it probably came in. Let me think.... About 1955, '54/5 I was dealing.  The first cocktail party I ever got invited to was the firm of Messel which no longer exists it's Shearson Lehman I think.  And they always used to have a cocktail party in their office at 31 Throgmorton Street, which was a cold buffet which was beautiful and everyone went, used to pack in, but it was by invitation.  Then Tony and I got an invite to Rogers and Milbourn, a small broker, and they had a small box up there where they would have a crate of champagne and ask about ten people up and that was the first cocktail party we ever went to.  I mean starting 15, 20 years ago, you went to dozens, you couldn't go to them there were so many.  It seemed to be the in-thing.  And of course if you're queueing up at Laing & Cruickshanks or whatever, helping yourself to some food, and you happen to be standing next to a chap you don't know, you got talking - or you knew him by sight - and that's how - the other jobbers - you got to know each other.

BA: Did you feel that jobbers were a different type of person to the brokers?

CK: Oh, yes definitely.

BA: In what ways?

CK: Different animal entirely. You got some brokers who would go jobbing and would be quite good at it, but I always reckon it was best to be brought up from the very beginning as a jobber.

BA: What were the qualities that you needed to be a good jobber?

CK: Well, I suppose you've got to have a few brains.  You could have a bit of nerve, you could have a little bit of nerve there; a bit of foresight.

BA: Can you think of any occasions when you needed nerve as a jobber?

CK: Yes, yes.  I can think of occasions when I've taken on a position that especially in the early days when - it was bad enough when I was a director myself - but when I wasn't I've taken positions where I've been terrified to tell the governor when he came back in case he said it was wrong.  

BA: Can you think of any particular examples?

CK: I can think of one occasion which I planned, where a small jobbing firm, a very small jobbing firm, Aubrey Spurling - no, Black & Boyd - I beg your pardon.  This old man who was on his own, I think, had one blue button, came over to me one day and he said, 'What are German Young?' - which are German 5 1/2 government loan.  They were quite a high price - in the 90s - and I made him a price and he said, 'I've got a big one here' and he was shaking like a leaf because he only dealt very small.  He was an old man, nice old man - Nixon his name was - and he said, 'Well I want to sell 45,000 or whatever, can you take them?'  So I said, 'Yes, I'll take them.' And I took them and the two partners were out having a drink and I said to my chum Doug, 'Hold on don't deal for a minute.' I dashed out to someone's box to offer the stock and I had to offer it at a higher level than they were bidding before but I knew they were keen buyers and he took it, so I got rid of them.  And as I came back on the two partners arrived and one of them said to me, 'Where have you been?'  So I said, 'Well, I've just been out.'  'Have you done anything?' and before I could say, 'What have you done?'  So I said, 'I've bought this'.  'You've done what!'  He said, 'You've been in here two years, you know nothing and you think you can deal with a man that's been in here forty odd years?'  And I said, 'Well, he's not a big....'  'It doesn't matter he's got the experience you haven't. What do you think we can do with those?' Because all he saw was a purchase.  I'd just arrived back.  I said, 'Well, I've already just sold them!' 'Oh.'  Nothing more was said.  But I was very nervous when I went out there to try and sell them, yes.

BA: What other qualities apart from nerve and brains?

CK: I think, they always used to say to me when I first went in, it's not what you know, it's who you know.  That is not true.  In a specialist market, if you don't know what you're dealing in you can easily come unstuck; if you buy as I said the wrong amount of stock, if you miss a sinking fund, if you buy stock after the sinking fund's  been completed and you've got to hold it for six months and finance it; the foreign bond market was different.  But even so, 'who you know' was very important.  And I can remember an occasion I had a lot of friends and it was helped because I had done checking for 18 months and a lot of those guys, I should think 40 per cent of them made it to the market, 30 per cent, so they always came to people they knew.  Did a lot of people favours which didn't hurt, it always paid back.  Generally getting on with people I suppose, really, it was getting on with people.

BA: While we are on the subject of people are there any individuals or personalities that linger in the memory?  

CK: Oh, God loads of them.  There are so many.  In more recent years I suppose he left about ten years ago, a character named 'Bonnie' who used to do all the card tricks, who everyone knew, I never knew his name, but everyone knew him as 'Bonnie'.

BA: He was a member?

CK: Yes, he was a member?

BA: When did he do his card tricks?

CK: On the floor - when it was quiet he would come around and say 'Anyone want to pick a card' and he'd get on with it and he was very, very good at it.  There were all sorts of characters in there.  Almost too numerous, I mean going way back 1948 something like that, the Stock Exchange had its own Army Cadet force. There was an old guy called Major Karo who had been in the First World War; he was a major of the Cadet force and had been for some years. And several of us joined that and we had a great deal of fun.  Again we made a lot of friends, we used to go away for weekend camps and we had guards' training it.  It had been the Coldstream, then it was the Welsh Guards so we would go to Wellington Barracks and Osterley and Pirbright.  He was a real character. The first day of summer he would come in with a straw boater on and he did it specifically every time.  In more recent years there's a chap called Ginger Baker, generally know as Nutty Ginger, whose only about 60 I should think and he used to dress up quite regularly and come in and do the cowboy act.  One of my partners gave him a pair of gurkha shorts, which came down [to the knees] and he would dress up in that.  Oh, yes, many, many, many characters, many. 

BA: Thinking of the Stock Exchange in the early '70s and comparing it with the Stock Exchange when you joined, was it different? 

CK: Oh, yes.

BA: In what ways was it different?

CK: In the '70s you were still on the old floor, you still had that part, but the atmosphere had changed a lot.  I'd say in the early times when I joined, you wouldn't wear a blue shirt, I mean it would be forbidden.  It had to be a white shirt and stiff collar. So dress changed an awful lot. And I think relaxation - it was very much a part in the '60s; although you had friends - of course you did - and you went to lunch together, a member was a member, he was definitely different to an authorised clerk, and a partner or a director whether you were a company or a firm was different to a member.  That dropped out. In the last ten years - people would call you by your Christian name if they didn't even know you hardly and shorten it as well.  The discipline had relaxed enormously.

BA: And what about jobbing itself, the actual technique of doing it on the floor of the House.  Had that changed in any way?

CK: No, no, not to us.  Except that as I say you did know - and it wasn't applicable to us because Medwin went out, Wedd ceased to trade in those stocks - but yes, jobbers spoke much more to each other.  Yes, they would, a jobber would speak much more to each other than they had done before. Other than that I don't think it changed a lot.

BA: How did you keep yourself competitive when you were the only firm dealing in foreign stocks, foreign bonds?

CK: Well we didn't have any competition.

BA: So did you feel you had to be competitive?

CK: We made roughly the same price we made before - the same width prices - and unless things got very difficult, but it was easy.  I mean, supposing you had a lot of market makers in ICI and there's a thruppenny difference in the price between one and t'other, you could deal like that probably but they would say it was a bit odd because it's almost choice price, you did a choice.  But with the foreign market it's totally different.  I could have a position where I'm doing nothing, very quiet, doing a little bit of business and someone comes up and says to me, 'What are China 98 English?' I'd say, 'They're 20 to 3.' 'Oh, that's no good.' 'Can I help you?' 'No, that's no good.'  Now if he was a friend he would immediately say what he wanted to do but if he's a bit of a stranger or doesn't know you or he's not used to the market, I'd say, 'Well I made you 20 to 3, any help?' and he said 'No, it's no good at all.' 'Well why?'  And he didn't want to open.  Now if they don't open they are never going to get anywhere because he's already said he can't trade.  He might say, 'No I can't give 23, I'm a buyer, I can only give 21', 'How many?' 'Ten', 'Sell you ten,' and they can't believe it but I've got them on the book and I've got a nice profit on it. I might have bought 100,000 at 16 three months ago, I'm quite happy they've gone up.  Although they've gone up I'm quite happy, I want 23 and I'm willing to give 22 but I might be quite suited to sell them at 21 because I need a profit and I'm doing nothing.  And certain people would never do business because they would never open their mouths.  You know, they are just nervous or coy or I don't know what but they didn't do their business and that could happen in that market where it would be far rarer to happen in the industrial market.

BA: If you had the choice of starting your career in the Stock Exchange again, would you have done it any differently, would you have gone into a different market?

CK: No, no, I'm very happy with what I did.  As I say because it was a specialist market and I enjoyed it.  There were so many characters and different people in there that were most of them great fun to deal with, some of them very difficult to deal with.  Some very frightening, some frightened of you so you helped them out.  No, it was a grand life.  I wouldn't have changed it.

BA: Good.  I think we can finish there.  Thank you very much.