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

Interview No. 26: Archie Jessep

Interviewer: Bernard Attard

Home: 30th May 1990

Tape 1, side 1

BA:  Could you first tell me, Mr. Jessep, where and when you were born?

AJ:  I was born in West Ham in 1913.

BA:  Which date in 1913.

AJ:  6th July 1913.

BA:  And who were your parents?

AJ:  Mr and Mrs. Jessep.  I was the only child.

[Mrs J: Mabel and Arch]

BA: And what did your parents do for a living?

AJ:  My father was on the Baltic Exchange, as a dealer on the Baltic Exchange.  In those days, the wages weren't very high. By the time I was 21 I was earning two or three times what he was earning.

BA:  Was the Baltic Exchange regarded as being a less lucrative place than the Stock Exchange?

AJ:  Very much so.

BA:  Had your grandparents any connections in the City.

AJ:  No, no connections at all.

BA:  What had they done?

AJ:  Shipping, in a shipping line; Cardiff, they came from Cardiff originally.

BA: And where did your parents send you to school?

AJ:  I went to an elementary school called New City in West Ham. I went there from the age of about 5 until I was 14. That was the date you had to leave then, 14. I then went on to a comprehensive school for one year, when my uncle, who dealt through Smith Brothers said they were looking for a young office boy. I went up and had the interview with Mr. Charlie Smith and I took the job on the following week afterwards.

BA:  When was that?

AJ:  1928.

BA: What did your uncle do?  Was he a broker or was he simply an investor?

AJ:  No, my uncle was in the hat trade in the Midlands and he used to deal on the Stock Exchange and through that knew Mr. Smith.

BA:  When you were a boy did you have much idea of what your father did for a living?

AJ:  Not really.  I did go up to his office two or three times and he really wanted me to go with him, but I didn't fancy it. I didn't see any opportunity there.

BA:  Did you have any idea what you'd like to do as a career when you were at school?

AJ:  No, until my uncle said, 'There's an opportunity going at Smith Brothers'.  I thought, well, sounds good and I went up and met Mr. Smith who was very charming to me.  He said, 'Can you start in a week's time?' I said 'yes'.  So I just left the comprehensive school and started in Smith Brothers as the office boy.

BA:  Did you have much idea of what the Stock Exchange was, or what a jobber was?

AJ:  Nothing at all, no.

BA: What attracted you to the job?

AJ:  The thrill of it and the money, the money side of it.  It looked to me as if there would be some very good opportunities to make money there, if I worked hard.  And I did work hard. Sometimes I was there till midnight. From 6 o'clock to midnight I got a shilling an hour extra, so it was a big opportunity.  Sometimes on top of my 12/6 a week I was taking home about another £1 a week.  So that was big money in those days, in 1927/28.

BA:  Would you say your parents had had much influence on you in any way?

AJ:  No, no.

BA:  Well how would you describe the firm when you first joined it?

AJ: They were down on the floor of the House all the time.  We only saw them in the evening when the Stock Exchange closed at four o'clock. They used to come upstairs and we used to take the bargains they'd done during the day, the contracts, and put them in the jobbing books; then work the prices out ourselves in what they called jobbers' ledgers.  I'd only been there six months and they thought that I could be adapted a little bit higher on the books, from the office boy.  So Sidney Davis turned up for an interview, from Brighton College, and he was adopted and I had to explain the whole routine to him, and he took over that. Then six months after that he did the same thing to Henry Marks, who came from Westcliffe in Essex.  And he took over the office job and Davis took my job and I took a farther job up still, on the jobbers' [ledgers].

BA:  About how many partners did the firm have at the time?

AJ:  There was Mr. Charlie Smith, Mr. Kyle, Mr. Wood, - because at that time Maurice Smith hadn't joined the firm. He was with Berger & Gosschalk - so there was only the three partners.

BA:  Do you have any recollection of the partners?

AJ:  Oh yes.

BA:  Could you describe them?

AJ:  Charlie Smith was a very grand man.  You could talk to him like a father, and if he saw that you were making sense, he'd help you on your way.  Kyle, we called him Dr. Kyle because he had these pince-nez glasses and lived at Romford in Essex, and he was another kind man; very kind man, but not as good a jobber as Smith. Smith was the man with the brains.  Wood, no, he was only what they called a half-book man in those days. What he made on his book, he took half and the firm took the other half.  He was a partner, but he wasn't what I would call a full-time partner.

BA:  And do you have any recollection of what the offices were like when you first started?

AJ:  Yes,  we were in 2, Angel Court.  It was three floors, we occupied two floors of it.  It was like a rat trap.  It really was.  A terrible office. I think it was something like £2 or £3 a week - very tiny.

BA:  Did you have much in the way of office equipment?  Did you have typewriters and things like that?

AJ: We had a typewriter there. We had a girl who used to do the typing - what typing there was to do - not very much. Other equipment no, nothing.

BA:  Which markets were you trading in?

AJ:  We dealt at that time only in the industrial market. We weren't in the mining market, because Maurice Smith hadn't joined the firm.  He was with Berger & Gosschalk.  And we were only in the industrial market dealing in all the leading industrials, Courtaulds, Chemical, Boots, Dunlops.

BA:  Was there anything distinctive about the firm or was it very similar to most other jobbers dealing in those markets?

AJ:  No, there was nothing distinctive about it at all. We were just one of a clan.  

BA:  Was the firm what I've heard some other people describe as a spoon-fed jobber, in the sense it was undoing a lot of business for brokers.

AJ:  We did a lot of business with the country.  The country brokers, Beckhuson and Blount in those days, and Marshall.  Mr. Smith took small profits and made large money.  But he was what I call a small jobber making small profits, getting into larger ones on the way up.

BA:  Can you describe in a bit more detail what the business with the country brokers involved?

AJ:  Well the country brokers in London - there were three big ones as I told you, Beckhuson, Marshall and Blount, were the three biggest, and they always came to Charlie Smith because he gave the competitive prices.  They dealt with the country brokers; they undid their business with the London Exchange.

BA:  And how did you own career with the firm progress as a young man?

AJ:  Well my own career progressed first of all, as I told you, I did the jobbers' ledgers for a time and when I was about 16 you were allowed to get a red button, which meant each morning you'd go downstairs in the Stock Exchange and check the previous day's bargains, which was something in those days, and you met the other people in the other firms.  And then when I was 18, I was made a blue button.  Now a blue button was the next step to a dealer.  As a blue button you could go into the Stock Exchange, keep your mouth closed and stand by your senior partner and write down his bargains in his book for him.  But that was as far as you could go until you were 21 when you could become an authorised dealer; lose the blue button and become an authorised dealer, which, as I told you, when I was 21 he made me that 21st birthday present to become his dealer.  Because he recognized that, I think he recognized at the time, I would be a money-maker.  I'm not trying to put myself forward!

BA:  What qualities do you think he recognized in you?

AJ:  Well I think he thought that I adapted myself well in the fact that I got on well with brokers, and I was competitive, and my idea was to make money. And that was the biggest thing in the Stock Exchange, to make money.

BA:  After you'd been with the firm for a few years, how did you feel about having joined a jobbing firm?  Did you ever consider, for example, going somewhere else for a career?

AJ:  No, I was very happy.  There was a good will, good spirit, and I was fortunate enough to make money and I didn't want to go anywhere else.  I had certain firms say, 'Are you interested in moving?' but I never was and fortunately I never did.

BA: Do you have any early impressions about going into the Stock Exchange, when you were a blue button?

AJ:  No, I never looked back. That was my one thought that I was going to be a Stock Exchange dealer, hopefully a partner.  In those days they weren't directors, they were partners.  But I just had that one feeling I was going to make it.

BA: What kind of impression did the Stock Exchange as a building make on you?

AJ:  It was the old building in the old days. It was very old, wooden floors, no smoking; but there was a good will there all the time - if you kept your face clean.  There were people there that sometimes did things which they shouldn't do.  They always got found out. The thing was to keep the good will going and you'd make it.

BA:  Were there many jobbers dealing in the markets in which Smiths was trading?

AJ:  Yes, I should say, competitively in our market, the industrial market there were 25 jobbers.  ten larger than ourselves and the other fifteen just about the same.

BA: What distinguished the larger firms from you?

AJ: They had more stocks.  They dealt in more stocks, and I would say that they had more money than  we did.

BA:  Did they deal in larger size?

AJ:  Yes. We had to keep it down to our money, what we had in the firm at the time.  The banks would help you. You'd get your loans and if you were a good payer they'd repeat the loans to keep the continuity going.  But we always dealt with one bank the whole of our life - Barclays Bank.  You've probably heard that have you?  We only dealt with them, because they knew what loans we took on, they knew our business, they knew the money we made every year and with one bank knowing all what have you,  the goodwill was there.

BA:  Now, about this time when you started as a blue button, the Depression was still taking its effect.

AJ:  Yes, in 1929 we had the Hatry crash. That was terrible.  A lot of firms went broke.  But we kept our head above water because we weren't very big.

BA:  Was the firm affected in any way by the crash? 

AJ:  Slightly, but nothing to uncover anything bad.  We dealt in several of their shares like Foto, Fotomaton and Fotome and lots of stock like that which Clarence Hatry had introduced into the market with no capital behind him and no goodwill and he was found out.  And they called it the Hatry crash at the time.  That was in 1929, I think it was.

BA:  And how did the firm fare generally during the Depression?  Was it a difficult time for the firm or you don't have any particular memories.

AJ:  No, we came through well. No trouble.  We were never in trouble, never had to borrow more than we had to.

BA:  Now, you mentioned that you became a dealer when you were aged 21, so I assume that was sometime around 1934.  Where did you learn how to become a dealer?  Where did you learn your jobbing skills?

AJ: Well I learned it through watching my senior partner, Smith. I stood by his side all day long from when we opened at 10 o'clock in the morning until 4 in the afternoon.  And I just learned how he did it and I followed through.

BA:  Do you remember any particular qualities in him as a jobber that influenced?

AJ:  His competitiveness. His prices were always seen to be closer than the rest of the jobbers.  Where he would deal... Say, if he bought 1,000 shares and sold 1,000 he was content to take three farthings on it which was £3/2/6.  Where other people wouldn't look at it.  You might put it down as the Jewish spirit.  But he would take small profits and make large money.

BA:  Did you think there was anything distinctive about the firm's attitude to jobbing compared to other firms? You've mentioned for example, he was prepared to take a turn and keep turnover.

AJ: The turnover, it was the turnover, with small profits, which built the firm up into a big firm, gradually over the years.

BA: And who did you regard as your main competition at the time?

AJ:  Well, there was Sambourne, Samuelson; mostly the Jewish firms.  Of course the biggest one was Durlacher. They were the biggest, but we were very friendly with them.  We could always undo business with each other, because there was good will built up through talking to each other.

BA:  Did you have much contact with the smaller jobbers?

AJ:  They used to come and undo their business with us.  There were about ten small jobbers there that had hardly any capital, but they had their friends who dealt with them. But they would come to us eventually and undo their business, and that's how that was built up.

BA: Now you mentioned that Smiths was a Jewish firm.  Were there many firms which you would describe as Jewish firms on the Stock Exchange?

AJ:  Durlacher were Jewish.  E S Samuelson were Jewish. Sambourn weren't.  There was Donnison who weren't Jewish. There was Bisgood who weren't Jewish.  I would say the lesser were Jewish. Where there were say six or seven Jewish firms, the rest of them, twenty or thirty, were gentiles.

BA:  Did Jewish broking firms tend to deal with Jewish jobbers?

AJ:  Yes.

BA:  And did you find the reverse of that, the gentile firms tended to take their business to...

AJ:  No, they would deal for their clients on a competitive style.  There was no way they would deal with a Jewish firm because he was making a wider price. Very few.

BA:  Did you feel there was any anti-semitism in the Stock Exchange?

AJ: A little.  A little.

BA:  How did that show itself?

AJ:  Through  dealing. They would deal with their Jewish friends; but that was to the detriment of the clients really; because as I said before the Jewish firms always made the closest prices; the Jewish attitude, small profits, larger business.

BA: Were there many foreigners in the Stock Exchange, either Jews from Europe or Europeans in firms in the Stock Exchange.

AJ:  No, not in those days, no.  None at all.

BA:  Now, you started as a dealer in 1921 [sic], do you have any earlier memories of your dealing experiences, either particular failures or particular successes?

AJ:  Well I was very nervous to start with because I knew that I had to do good.  I was very nervous to start with and I probably could have made more money by being more precarious, but I was very careful because I thought to myself, 'If I don't do good I shall be out.  So I've got to do the best I can'. Until I got a certain amount of capital behind me. When I got the capital behind me I certainly forged ahead.  Until the days when the War started I took on [more stock].  You could see there was going to be a War in 1939.  There was going to be a war, so I took up all the Richard Thomas, Campbell Laird, Vickers, John Browns and all those stocks. And there was a big turnover because they were forging ahead and making a lot of money.  But as I say, in 1940 I was taken into the Army and I didn't come out till 1945.

BA:  Was it fairly ....

AJ:  And I never had any money given to me during the War.  My wife had to go back to work.

BA:  So did the firm not pay you any wage?

AJ:  The firm was left with Charlie Smith and Kyle. They were the only two left, and they weren't making very much money and they couldn't afford to pay. Davis went in the Army; Marks went into the Army.  So we all went into the Army and the firm was left high and dry.  But when I came out of the Army, straight - two weeks out of the Army I was back in the Stock Exchange.

[Mrs J:  He couldn't get his heels in quick enough.]

AJ:  The continuity was still there for all of us, which was fortunate, although none of the three of us got any money during the war, couldn't afford it.  So all I got was my army pay, and my wife went back to F C Simon the broker.

BA: When did you meet your wife?

AJ:  Let's think. 

[Mrs J:  I was sixteen.]  

AJ:  1933.

BA:  And did you meet her through the Stock Exchange in any way?

AJ:  No, through playing cricket in Wanstead, I was playing cricket and she was watching me and we went out to dinners after that and lunches.

[Mrs J:  A cup of coffee or nothing.]  

AJ: And we got married. We had our fiftieth wedding anniversary last year.  We got married in 1939 the year war broke out, shall we say.

BA:  You mentioned that you'd taken up stocks that you could see were being helped by re-armament or whatever.  Was it fairly straightforward for a jobber to take up new stocks in those days?

AJ: It was, because there hadn't been any business in [them] before.  They were called dead stocks, but with war armaments starting up and all that business, everybody was getting into that kind of business. The stocks became prominent and the other jobbers took them up.   There was quite a big flow of business and they went from strength to strength.  They probably trebled their prices.

BA: Do you have much memory of the effect of the political crises of the period on trading in the Stock Exchange?

AJ:  Which year do you mean?

BA:  Well, either say the Abyssinian crisis in '35/'36 or Czechoslovakia in '38?

AJ:  Yes, well all those crises abroad always led to falls on the Stock Exchange.  They always led to a fall because the uncertainty was there.  Uncertainty on the Stock Exchange was bad because uncertainty always stopped people dealing and forced the market to close up a bit. Yes there was always uncertainty. A big influence on the markets in those days.  Wall Street was one of the biggest influences on our market in those days as  well.  I used to watch the Wall Street every morning, how they'd come over overnight.

BA: Could you elaborate on that a little bit?  Were you dealing in stocks that Wall Street was also trading in?

AJ:  I was only dealing in British stocks which Wall Street dealt in.  My biggest one was EMI, Electrical and Musical Industries, which I think is now Thorn.  You see Wall Street was open at night and they used to ring us up at home where I lived in Surrey every night.  I used to deal ten times or twelve times in the evening with Wall Street people.

BA:  And who would you be dealing with in Wall Street?  Would they be particular brokers?

AJ:  I can't remember the names now.  They dealt mostly - the Wall Street brokers - they dealt with the British brokers in London, undid their business, and the British brokers came on to me - that was the main thing.

BA:  So were they professional arbitrageurs?

AJ:  Yes I can't remember the names now, although I went over and sat in their offices.  I went to Wall Street, on the floor there.

BA:  When did you first visit Wall Street?

AJ:  1960.  Every year after that till 1972, I visited Wall Street. I'd spend a week over there with the brokers, had lunches over there and from there we used to go to the West Indies - Barbados.

BA:  Was dealing with the arbitrage brokers an important part of Smith's business?

AJ:  [It was] tough, tough.  Yes, it was [an important part].  Like the mining market. They dealt with Jo'burg and Davis and Marks used to go to Jo'burg every year and visit the people they deal with. You get to know each other better and you get an affinity.  So they used to go to Jo'burg; I used to go to Wall Street.

BA: When you say it was tough, what do you mean?

AJ:  Hard. They wanted the last penny out of the business.  They didn't throw business at you for not making any money. It was tough going, and you took many chances on their business because next day Wall Street would be up 20 or 30 points, down the next morning, so it was pretty hard going.  You had to gauge how you thought the market was going to open the next morning, which was very difficult, because they were very volatile.

BA:  Did you have much contact with shunters, people dealing with the country stock exchanges?

AJ:  Oh yes a lot.

BA: Were they a distinctive breed of broker?

AJ:  Yes.  They were shunters, as you call them.  They used to shunt the stuff from Birmingham, Manchester and Liverpool down to London and we'd undo it for them, because they weren't big enough up there to undo it themselves.

BA: In what ways were they different from the local brokers?

AJ: Well, they only did specialised stocks.  They didn't do a wide varied stock like we did. They did certain stocks, mostly textiles.

BA: Did they tend to be better informed about the different jobbers' prices than the other brokers?

AJ: Well, one firm Blount; Mr. Blount stood by Charlie Smith all day long and his runner used to come in from the box outside, give him the slips and deal with Charlie Smith because he knew straight away that he could deal with Smith because he made the closest prices; so he knew he could deal, in a very advantageous position, you see.  He didn't want to bother to go to the smaller jobbers.  Once he opened they knew he'd been to Smith. He stood by Smith all day.  Blount and Smith had a great following together. 

BA:  Do you have a following with other firms in that way?  Were there particular brokers who had a relationship with Smiths?

AJ:  No, we always dealt on a competitive price.  A lot of people knew that you made a competitive price and they'd come to you naturally. But other brokers would go around and check their prices and if you were the best market maker they'd come back to you.

BA: Did you feel there were brokers whose business you never saw - I mean thinking about the earlier period?

AJ:  Yes, there were certain brokers who you never saw their business.  They also had an affinity with another jobber. And it's a built-in degree. They found it best to deal with the man they knew they could get on with, not because they disliked the other jobber, but they had an affinity with them.

BA:  Was the firm involved in option dealing in any way?

AJ:  No way.  We never did options.  We do now I believe, but never then.

BA: Were there jobbers who specialised in options?

AJ:  There were two or three jobbers who specialised in options, yes.

BA:  Can you remember which ones they were?

AJ:  I think Durlacher was one, and I think Donnison was the other one. They did it.

BA:  Was option dealing as a jobber very different to the normal trading?

AJ:  Yes, it was a very specialised business.  An option was taking a longer view of the business, stocks going up or down; they'd take a view over a week or two weeks, which we didn't. We were a day to day jobber, a minute-to-minute jobber if I may say so.

BA: Did you every find yourself taking positions from one account to another?

AJ:  We used to have in those days what we call a contango.  Have you heard of that word?

BA:  Yes, could you explain what a contango was?

AJ:  A contango was that if a broker didn't want to pay for the stock, the jobber would hold the stock over to the next account and charge them a commission.  So the broker, or his client, didn't have to put up the money. So the jobber took the stock, put the money up and charged the broker a small commission.  That was a contango.  And that was big business, very big business.  We used to make quite a lot of money on that.  By involving our money and charging commission over the bank rate.

BA: Did the firm therefore need quite a bit of capital?

AJ:  Oh yes, we couldn't do that until we had a certain amount of capital.  But as I say, Barclays were very good and a loan was always forthcoming because they knew there was no other bank involved and they knew our business.  And as the years went by the better it got.  The larger it got.  And as far as I know they still deal with Barclays only.  And we let them know that.

BA: Did you feel that the brokers used you as a source of information on the stocks that you traded in?

AJ:  Oh yes, they always came and asked the opinion, what we thought. I dealt in ICI. That was the largest stock, and they always came and asked the opinion. And you had to know what the trading profits were, what the dividends were. You had to keep in your head all these figures.  Sometimes you had a book to put the figures in and all that business.  Yes, they did.  All right, they sometimes took your advice. Sometimes they'd come back and say, 'Well you weren't very clever on that one'.  You can't be right all the time, but I would say 75% we were very good.

BA: Did you ever feel that the brokers knew more about a stock than you did?

AJ:  Sometimes.  They'd weasle it out of you what you knew, whether you knew more than they did.  They never tell you.  Every year, ICI invited the three leading jobbers in ICI: Hadow & Turner, Sambourne (that was Tom Leveson-Gower) and Durlacher; [we] were invited to ICI, Millbank, and saw the directors of ICI up there and explained everything that was going on.  We told them things and they told us things and that was a yearly event.

BA: Was that even happening before the War?

AJ:  No, it wasn't.  It was after the War. Greenwell were the brokers.

BA:  Did the jobbers have much contact with the companies in whose stocks they traded. Again, thinking about the period before the War?

AJ:  No. No.  There was no get together.  ICI was the only one I ever went to.  Well, we used to go to company meetings occasionally, if we thought we could glean anything. But no, other than ICI, no.

BA:  And when did Smiths start dealing in gold stocks?

AJ:  1936.

BA:  And how did that come about?

AJ:  Well Maurice Smith ...

Tape 1 side 2

AJ:  [Smith Brothers was originally] called Smith & Cutler.  Lindsay Cutler's father was W S Cutler, the brokers, Gresham House.  And Cutler's father died and Lindsay Cutler told Charlie Smith that he would like to take over his father's firm and leave with goodwill. And Maurice Smith was with Berger & Gosschalk, and Charlie  said, 'what about it?' And he said, 'yes' and came to Smith Brothers. Maurice Smith was the gold-mining dealer.  I think it was 1936 and they started up then, and that's when Davis went over and became his boy, as I told you.  And then Marks followed.  Michael Marks you know, at the moment, that's Henry's nephew.  He came in the firm when he was just a kid as well.

BA:  So how would you describe the firm just before the War started? Was it still very similar to the firm that you'd joined?

AJ:  Yes, very similar.  Didn't change the style at all.

BA:  And were you still an authorised dealer?

AJ:  Yes, I was an authorised dealer. I told you I became an authorised dealer in 1934.  I was 24 [sic], wasn't I?

BA:  And you always stood with Charlie Smith?

AJ:  Never anybody else.

BA:  How did the relationship work? Were there other people working on that book with you?

AJ:  Not at the time. Kyle, he ran a small book on his own. He wasn't a very good jobber, and he eventually went out and there was just Charlie and I.

BA:  Did you have a blue button with you?

AJ:  After I gave it up, yes.  We had a blue button with us.

BA: And were you dealing in the same stocks Charlie Smith was dealing in, or did you have your own separate stocks?

AJ:  He dealt in Courtaulds and British Celanese, all the textile stocks.  I did Dunlop, Chemical and Boots. Then I elaborated out into the ironmongery things.  And after the War finished, Rantzen and I came back and we had a head to head to say what we were going to deal in. Because most of the old stocks we dealt in had either gone or weren't worth dealing in.  So he took up the leisure groups: Billy Butlins, Warners, Pontins, Mecca; all the leisure groups, where pent-up money during the war was coming out. I took up all the dog shares: GRA, Wembley, Hackney, Southend, Clapton, Walthamstow; all the dog shares, and I had queues forming to buy and sell stocks.  Every morning there were queues at my pitch when I got there at half past nine; there were at least 20 or 30 brokers.  And when I started in GRA they were a shilling a share, and they went from 1/- to 25/- a share.  And I made a small fortune out of it, jobbing competitively. You couldn't believe it.  They didn't want to know anything about ICI and Dunlop.  It was all leisure; pent-up money during the War, coming out.  And fortunes were made in these leisures and dog shares.  Until in the end they evaporated about two or three years after that. They still dealt in them, but you know, most of them merged.  I used to go to lunches with Billy Butlin and Pontins. There was a firm called Jenkins. Have you heard of them?  Sid Jenkins was a great pal of mine. He died recently and he and I used to go with Fred and Billy Butlin to the Connaught Rooms at Liverpool Street every  year for luncheon up there, and we used to market all their stocks.

BA:  And was the idea to keep friendly relations with the jobbers and make sure they knew enough about the firms they were trading in?

AJ:  Yes, we knew our... They used to tell you what have you, and helped, and everything like that.  Again we had an affinity, that we'd market their shares and they helped us with their knowledge.

BA: Do you think jobbers generally had much contact with the companies in whose stocks they traded?

AJ:  No, no - only in certain specialised things like I've mentioned.

BA:  Were those relationships important for particular stocks?

AJ:  Yes, very helpful, because you could pass - I wouldn't say you passed all the information on - but you passed a certain amount of information onto other people; brokers, to their clients, letting them know how the business was getting on. As I say after the war they were very specialised stocks, because they were pent-up stocks with money going into leisure, where for six years people had been without leisure, and couldn't spend their money or do anything about it.

BA:  What had you done during the war?  Had you been with the forces?

AJ:  Well I joined up. I was called up. I volunteered for the HAC. They had a waiting list.  We all did, in the Stock Exchange volunteer force. You couldn't get in.  So I was called up with the Royal Engineers at Andover in 1940. Did my training there - very hard training as well, tough.  They weren't ready for us. They hadn't got any guns. They hadn't got anything.  Slept on a mattress of straw. It was coming out of the good life into the bad life.  You didn't know what hit you. Anyway I did the training, and being in the engineers. D-Day was coming up. I spent a year in Scotland, training in the Moray Firth where we trained to land on the beaches there, timing what time it took to convey the ships from the liners onto the beaches.  We spent a year doing that. Then they brought us down south to Cosham where we formed up as a unit. And we got on the boats at Cosham - Gosport, pardon, Gosport - on the afternoon, and we laid off the Ryde Pier that night to go to Normandy. And the weather forecast came over, it was bad. So for that night we spent on board, and the next evening we set sail, and the next morning, about 8 o'clock in the morning, we landed on the beaches of Normandy, on Sword beach.  We lost a third of our company on the first day. Mines. I was a lucky one, and we were supposed to take Caen the first day which we didn't. The infantry couldn't get in. We were backing them, they couldn't get in, we were thrown back on the beaches and I thought we were going to be thrown back to England. But we weren't.  We muddled our way through.  It was a muddle!  We had hardly any rations - compo rations!  We were being shelled right, left and from everywhere, because they brought up a couple of panzer groups. Anyway to cut a long story short, Eisenhower got us and the American troops through what they called the Falaise Gap. We went through the Falaise gap round the back of Jerry, round the back of Caen and two days after that we crossed the river Seine, under fire again at Rouen.  Then we steadily made our way through Belgium, Holland and Belgium.  It took a long while, because the ... Before we went abroad, we did our Bailey bridging, which we became very expert in, up on the river Irving at Kilmarnock in Scotland; and the Bailey bridging consisted of pushing the pontoons out and building the bridges as you went out on the pontoons across the rivers.  Very clever, he got a knighthood, Mr. Bailey.  He lived in west Byfleet. We knew him, didn't we?  

Then I got stranded when they came through the Ardennes. We got stranded up in the north of Holland for quite a while over one Christmas when it snowed.  Then eventually we crossed the Rhine under fire again on pontoons and Bailey bridges, at Ouistreham - no, Wasel. Then I went through the Ruhr. Right through to Luneberg, where the armistice was formed, and I was stuck in Hannover. I wasn't demobbed because I was nine months occupation troops, looking after the German hospitals and keeping the Poles from fighting the Germans.  I got demobbed in group 26 at Olympia in 1945.  

BA: And did you always assume you'd be returning to the Stock Exchange after the war?

AJ:  Yes, I knew the job was open.

BA:  And how had the firm managed during the  war?

AJ:  Bad.  Hardly made any money at all. As I  say, directly we came back we flourished.  We went from strength to strength.

BA:  When you did return, did you make any plans for the firm and how you wanted it to develop?

AJ: Well I came back as I think I told you, I had a pow-wow with Mr. Rantzen, who was a partner at the time, and he said, 'Archie, the money's going to be in leisure'.  And he was right.  He was a very clever man.  He said, 'I'm going to do leisure camps, holiday camps and what have you', and he said, 'What about the dog shares?'  I knew nothing about them at all, so I said, 'yes, good idea'.  I put my head down, got the figures all out, and started from there.

BA: Do you have any memories of what the Stock Exchange was like after the war?  Were there a lot of people returning? Were there a lot of old members about?

AJ:  Yes, I think I would say 90% of the people who left, came back. Certain people were killed. I would say 80-90% of people who had a continuity came back, mostly in their same firms. 

BA:  Was there much business going on?

AJ:  Yes, it developed very quickly. There was a big turnover.

BA:  And how did you find settling back in after being on active service for some time?

AJ:  Loved it. Once you were making money you loved it.  I'm not being rude, but it was there.  Having had five years on practically no money at all, to get back to making money was a great thrill.

BA:  Where were you living at the time?

AJ:  Ilford, Essex.  Renting a house 27/6 a week, three bedroomed house which I eventually bought for £1,900.  And then I sold that and bought a house in West Byfleet for £5,500, which I thought was a fortune, which I sold for £35,000 and it now goes about £250,000.  That's money.

BA: Did you become a member of the Stock Exchange about this time?

AJ:  1946 to 1973.

BA: And did that involve anything particular? Did it improve your status?

AJ:  Oh yes, to become a member of the Stock Exchange you had to have a couple of guarantees, sureties they called them, and yes, that did.  It puts your status up, until you become a partner.

BA:  And when roughly was partnership?

AJ:  I became a partner in 1950, that's right.

BA: And what did partnership involve?  Did you have more responsibility in the firm?

AJ:  Oh yes.  Well you had to have a meeting every week to resolve matters and business and money, and to look after the office staff as well. We were carrying a bigger staff after the war. And we got bigger and bigger. I became a partner, Sidney Davis became a partner, then Henry Marks became a partner. I was the first of the three.  There was only the three of us in [that] age group.  And we're very good friends; wives and a lot of get-togethers.  Very good affinity. The whole firm was built  up on good-will.

BA:  Did you stay in the same markets that you'd originally been trading in?

AJ:  Yes, never moved, never moved until I retired, always in the industrial market.

BA:  Was there anything distinctive about the industrial market compared with the other markets in which the firm was trading? Were they similar markets or were they very different?

AJ: They were very similar markets, dealt on the same basis of price-making, buy and sell, all the time.  The same principles, the whole thing, except they were different shares and different names.  The industrial market was about five times as big as the mining market.  The industrial market was considered... There was the gilt market, very specialised again.  There were a lot of jobber there. There must have been 15 - 20 jobbers in the gilt market at one time. Five big jobbers and 15 small jobbers. But that was very specialised and you never found an industrial jobber going into the gilt market.  They were built through the years, you know.

BA: And were there still many jobbers dealing in the industrial market through the fifties and sixties?

AJ:  Oh yes, in the industrial market it could have been about 50 - 60 jobbing firms.  50 or 60.  

BA:  Did you feel you were directly competing with each other, or again, did you only regard a smaller group of firms...

AJ:  No the competition was fierce.  Among the bigger jobbers the competition was fierce.  The smaller jobbers mostly undid their business with the bigger jobbers.  If they couldn't do it themselves, if they couldn't finance it themselves, they'd come to the bigger jobbers and undid it with them.  And they were allowed to do it. But you couldn't go to a small jobber and undo your business.  He wouldn't take you on because he thought you knew more than he did.

BA: Were you still being used as a source of information about the stocks?

AJ:  Yes.

BA:  Did that continue right through?

AJ: Right through.

BA:  Even up to the early seventies.

AJ:  Oh yes, yes.

BA:  And did you still have much contact with the brokers who were dealing with the country jobbers?

AJ:  Yes, that did go down.  The country business went down quite a lot.  Because I think they could more or less, with bigger money around, they could do the business up there instead of shunting it downstairs to London.  So the shunting business fell.  The Beckhuson, Blount and Marshall business, that depreciated.

BA:  And did the actual firm have any plans to expand, because you think about the fifties as a time when firms like Akroyds and Durlachers began and Pinchin began to combine with other firms.

AJ:  Yes, through me again we took on a rubber firm, Dickinson & Duncum who found that they couldn't cope with the business because they hadn't got the capital. So we took them in. We took over their business and became rubber dealers and we're still in the rubber market.  Eventually we took over Sambourne, which was a fairly big; not as big as we were, but a fairly big jobbing firm, we took them over.  The senior partner wanted to retire. The rest of the firm couldn't keep the continuity going because they hadn't got the capital.  So they became involved with us. Two of their partners joined the firm. One of them is still a partner now.

BA:  Were they fairly easy mergers to organise? Did the people fit in fairly well with each other?

AJ:  Oh yes, no trouble.  Easy.  It just meant them closing up their offices and coming in with us.

BA: Were you as a firm also expanding, increasing in size?

AJ:  No we were only expanding in our own rights, except for those two firms we never expanded anywhere else.  We took those two firms in because we thought they we were going to make money out of them, which we did.  But other than that, no. We only expanded in partnership, taking extra partners in our own firm.  We became a big firm with 15-20 partners.

BA:  I wonder if you could describe what a typical day would have been like for you, sometime in the fifties or sixties?

AJ: I got into the office in the morning about nine o'clock.

BA: Would you be reading the newspaper into work?

AJ: Reading the newspaper, having a conflab with the rest of the partners or dealers and get their opinions of what they thought the market was going to be.  We'd generally conclude with certain things; some of us didn't agree with each other, and some thought the market would be better or easier. But we used to go downstairs and you'd soon find out which way the market was going because the brokers would be coming round trying to execute their orders and you could soon find out whether there was a larger proportion of buyers or sellers.  And from there the day went on normally, all day, jobbing. And the Stock Exchange in the old days used to close at 3 o'clock and we'd go to the office and stay up there till about 5 or half past 5 in the evening, dealing on the phone.

BA:  How would you know what prices to quote and how would you decide to vary your prices?

AJ: On the buying and selling.  If there's a lot of sellers about you'd lower your price until you found a market, where the buyers would take it off you; or the other way round, if you reached a higher price where you'd get sellers coming in, you'd execute the business that way. It depended on the buyers and sellers during the day.  The numbers.

BA:  Did you feel that you were seeing most of the business that was about in the particular stocks that you were trading in?

AJ  I would say, being Smith Brothers, we would see at least 60 or 70% of the business knocking about during the day. We were one of the biggest and we'd take on anybody.  Alright if you lost money on certain things you didn't moan about it, they'd come back and help you next day probably.  We took on nearly everything.

BA: And did you take on whatever size?

AJ:  Within reason.  If it was an amount which wasn't normal, like 100,000 shares, which in those days was quite a lot, you would go round the rest of your firm and say, 'Look I'm taking on a big deal'. You'd tell the partners, so you weren't all doing the same thing. You'd tell the other partners you were taking on a big deal. Until you undid it or executed the business, 'just keep your powder dry'.  Otherwise if you were all doing the same thing, you'd be in the dirt.  So you had to be careful on your big orders to let the rest of the firm know what was happening.

BA:  Was capital ever a problem?

AJ:  No, no it wasn't.  As I say Barclays were very good to us. Never a problem, not unless... We used to let Barclays know every night how we stood.  So there was no way we were doing the wrong to Barclays and no way that they didn't know what was going on in our firm. Our manager used to let him know every night our position.

BA:  What kind of capital did you think you needed to run your book?  Again, approximately?

AJ:  To run the firm or to run the book?

BA:  To run the particular book in which you were involved.

AJ:  To run my book of a night, I used to start with say £10,000 which was a lot of money to start with, which eventually went to £20, £30 £40, £50,000.  The more money we made the more money we allowed to use on the capital, because capital was going around all the time.  The Kaffir market used quite a lot of money. But other than that, no, we were only in the industrial market.

BA:  Did you find that the institutions were beginning to make an impact on your business in the sense that the size of the bargains that the brokers were asking you to do?

AJ:  Yes the number of shares they were dealing in used to creep up  every year.  In the old days I'd make a price in 5,000 shares without hesitation.  But eventually it became 10,000 shares then 20,000 shares, but to take on 50,000 you were going beyond your means.  But up to 20,000 shares you could always make a market.

BA:  Did that ever create difficulties for you?  Did you begin to be conscious of that as a problem, or as a phenomenon?

AJ:  It wasn't a problem, but it was something you had to fulfil.  You had to knuckle down and say, 'I'll take a chance'. And some of it was what you'd call chancing your arm, because 20,000 shares in a stock like Chemicals which stood at £2 or £3 was £60,000 of money.  So you were taking a bit of a chance on that.

BA:  Do you remember any particular occasions when you felt that you were taking a chance, or had overdone it?

AJ: Yes, yes, and take a loss as well.  So if you saw it was going wrong the first jobber's principle was cut a loss, don't sit and look at it, cut a loss, because you were wrong.

BA:  Could you describe any of those occasions?

AJ:  Not untoward, as what I've told you, no. The jobber had a 'smell'. A smell of the market, what it was doing, whether it was going better or easier. It is an uncanny expression to say, but you realised sometimes you'd put your foot in it and you'd taken something which you had to get rid of.  So if you could you'd cut your loss.  It was what they call a jobber's 'smell'.  Funny expression to say but you could feel you were wrong, or right.

BA: Did you find yourself beginning to take larger positions than you would carry over?

AJ: Oh yes.

BA: Was this something that you worried about or was it part of the business?

AJ: There were times I used to go home at night and worry, have a few sleepless nights and I'd taken on probably more than I could chew. But sometimes it came out right, and sometimes it didn't. You could never tell over one day really, it was an overlap of a day or two days before you could undo the business.  Sometimes you'd have to sit on it and just hope for the best, hope that somebody out of the blue would come and  take your shares or sell you the shares you want.  Quite often I sold shares which I hadn't got. You had to if you're making a price.  A broker would buy the shares and the next broker would buy more and you were really up against it, so you had to up your price to get the shares back.  So sometimes you upped your price, cutting the shares you'd already sold.  That was the jobber's perogative.

BA: Do you remember any of those occasions, when you'd sold yourself very short?

AJ: Oh yes I often remember I'd sold say 20 or 30,000 ICI and the next morning two or three other brokers came in - probably the same order you'd had the night before on somebody else's back; so they wouldn't go back to the same broker, because they knew he wouldn't be able to do it. So they'd go to another broker, which was quite rightly done, but round the corner kind of business....

BA:  You mean the same client would use different brokers?

AJ: Same client would go to another broker. Because he knew if he went back to the first broker who you'd dealt with, he wouldn't do his business.  So he went back to another broker or two brokers. They may even come back to you, or they may have gone to another jobber.  I wasn't the only dealer in ICI, or those big leaders.  There were other jobbers.  So we were all looking at each other; all  trying to find the shares to place against the order which was placed before us.

BA:  Is that something that happened relatively frequently, a client would send several brokers into the market?

AJ:  No, it wasn't looked upon as very nice.  If he was found out he was in trouble. Not in trouble.  Alright, he could do his business, but he was in trouble the next time he wanted to do anything like that.  It was a thing you couldn't execute or bring off two or three times in a week or something like that.  You might do it once a month.

BA: Did you ever find cases where you found you had to go joint book with another jobbing firm to handle an order?

AJ:  Oh yes.

BA:  Could you describe what would happen in those circumstances?  What would cause it to come about? 

AJ:  If you had an affinity with somebody like I did with Sambourne (I knew Tom Leveson-Gower very well), sometimes I would get an order, say of 10 or 20 thousand Chemical, and he dealt in the same stock, and I'd go and say, 'Tom, I've got an order here'.  I'd open up to him, knowing full well that if he didn't take me on he wouldn't have let on. And quite often he'd say, 'Yes, we'll go joint'.  We used to go what we called a joint account.  Either he or I would finish the business off, but if he could help by selling me 10,000 or 5,000 every now and again he would do. And in the end, after a day or two, you'd add up what you'd made or lost and say, 'Look Tom I credit you £25 or £50 joint of what we'd made'.

BA:  Would you ever go a joint book before the War?

AJ:  Yes.

BA:  Was it a fairly common - well, not common, was it something that jobbers always did?

AJ:  Common on a smaller scale, but after the war it got bigger, very much bigger. But in the last five or ten years, no, it fell through.  Because I think every jobber now had his corn and didn't need the money to. He could stand his own corn and he didn't need to go joint.

BA: Did you ever find yourself involved in takeover situations, where a stock in which you were trading was being taken over, or a broker came to you because he wanted to accumulate a stake?

AJ: Before the war there were very few takeovers. It all happened after the war, long after the war.  Takeovers didn't come on hand until about 1960, when firms then started taking over each other, not Stock Exchange firms, but firms outside, like Courtaulds took over British Celanese and all that stuff.  It was those kind of firms took over. But takeovers weren't apparent in those days, not until about 1960, '70s.

BA:  How would - what would the jobber's role be in a takeover situation?  Was it an opportunity for the jobber to turn over a lot of stock, and if he had his book right, to make a lot of money, or were the jobbers not generally the beneficiaries?

AJ:  No, the jobbers never heard about it until it was taken over.  Very seldom.  It was kept very quiet.  There was a leak here and there occasionally, but not very often, so the jobbers didn't know until they saw it in the papers. 

BA:  So did you often find that your book was wrong?

AJ:  Yes, you could be quite wrong.

BA:  What would you do then when you found yourself in this kind of position?

AJ:  Well you had to undo it.  You had to undo the business as best you can, to the best of your ability.  Because you couldn't go to the companies and say, through your takeover I've lost money.  Nothing to do with him.

BA:  Was switching from one stock to another something you were doing fairly often as part of your business?

AJ:  Switching in - I'm not quite certain....

BA:  Well, for example, selling one stock against purchases of another.

AJ:  Oh yes, you'd do that if it was an engineering stock or something like that you'd buy one and sell the other one, as a gamble that they'd both go together.  Yes, it would help your book occasionally to be short of one and long of the other.

BA:  Was there any particular skill or technique involved in that?

AJ: Your own ability, just your own ability, or your own way of thinking that it could be right to have one and lose the other one.

BA:  Did price agreements ever come into your jobbing experience?

AJ:  No, we wouldn't agree on it.  There were times when jobbers said, look we'd like to make a closer price or a wider price and we said no.

BA: What were the reasons for that?

AJ: The reason was that we didn't agree that there should be a fixed price because it wasn't fair to clients, wasn't fair to brokers or clients to have a fixed agreement.  Oh, we were asked several times, but wouldn't do any.

BA:  Did that - how did that affect Smiths' popularity with other firms?  Did they tend to accept it.

AJ:  They accepted it.  There could be one or two people turn up with a bit of a black face, a bit of a grievance, but we were bigger than most firms and if Durlacher and ourselves didn't agree on it, you might as well say that it was finished, fait accompli.

BA:  Going back to this typical day I asked you about earlier.  Did you stop for lunch at some stage during trading?

AJ:  Well yes, generally we had our fixed lunches.  If I went out I left the book with my younger junior, or vice versa.  But I always took it at about one o'clock because that's when the market in the suburbs are closed, and most people went for lunch at one o'clock.  I generally went from one to two.  

BA: What did you do for lunch?  Did you go back to the office?

AJ:  No, I'd go and have a sandwich over at Slaters or Birch's in those days.  You probably don't know those places do you? Slaters and Birch's. All the jobbers went over there and had coffees together, or a drink, Scotch or a beer.  The Long Room.  Yes.

BA: Did you have much contact with other jobbers outside your firm?

AJ:  Oh, yes. I think it was a good affinity.  We were very nice to each other.  As I say, the smaller jobbers, they always came to me and undid a lot of business.  I dealt with Wedd sometimes if it suited me.  I knew the partners well.  We had lunches together.  There was goodwill built up - no animosity at all.

Tape 2, side 1 

BA:  Were you conscious as time passed in the fifties and sixties of the number of jobbing firms becoming fewer and fewer.  

AJ: Yes, it became apparent because some of the jobbers when the senior partners either retired or died, the money to keep the business turning over wasn't there.  So the younger ones either had to, not leave, but go into other firms to keep their business going and their contacts going.

BA:  Why do you think that didn't happen in the case of Smiths?

AJ:  Well I think there was more help coming from the senior partners of the Smith firm than there was in other firms.  The money the other firms had they didn't seem to want to push it out, didn't want to develop into a larger status.  So Smiths kept on pushing, getting extra staff in to make the business more expansive.

BA:  What happened to the more senior partners in Smiths, the Smith brothers? Had they retired at some stage?

AJ:  They retired. Maurice Morton-Smith went back to South Africa because his family was there, and retired; and Charlie Smith, when he got to about 65 or 70, coming up to seventy, he wasn't with it any longer and didn't want to know.  And it didn't cost us anything for us to buy him out.  He was a good man in that way in that the continuity of the business carried on when he left.

BA:  Now what kind of attitude did you as partners take to running the firm?  You said that some partners would retire, take their capital out or merge, but Smith's had a different attitude.

AJ:  They had a different attitude. They didn't want to be bought out. They just were happy to let the firm continue.  One went to South Africa. We didn't have to pay him anything, although eventually we did do some contributions for him when things got harder for him.  But the other Smith, just happy to know the firm was going and the continuity was going and they were making money

BA: Did you as senior partners now have particular policies for running the firm?  Did you want to expand the firm?  

AJ: Oh yes, we were all for bringing what we call reasonable good people who would be contributors to the Smith way of thinking. They went through their process of being a blue button, to an authorised clerk to being a partner.  They all came through the ranks as you might say.

BA:  Do you have any recollection of particular events in the history of the City or the Stock Exchange affecting Smiths business?  For example the first 7% bank rate in 1957, or the  devaluation in 1967, or, the crash of Rolls Royce, or the Bear markets?

AJ:  Well all these things came through the channels and they had to be adapted to.  Some you didn't agree upon, but it was a way of thinking in those days. As the years progressed, so time seems to go quicker, and some events which you wouldn't have thought would happen, did happen.  It's a process of elimination, shall we say.

BA: And how would you characterise your relations with the brokers who you dealt with?   Were they fairly friendly or would you regard them as in some ways your opposition and you had to be fairly sharp with them?

AJ:  Well, there was what we called the  good brokers and the bad brokers. You knew the good ones and you knew the bad ones.  Very often the bad ones you never dealt with because they didn't come near you and you didn't ask them for their business.  So it was a process, again, of elimination of the ones you knew, [who] you had a steady business with, and the others who didn't come to you unless they were really pressed and couldn't do it elsewhere.  Then they'd have used you as a last channel.

BA:  What was the difference between a good broker and a bad broker?

AJ: Well, a good broker would come to you and you'd make him a reasonable price and he'd deal on it. The other broker would come to you and he'd start to fiddle around, 'Can you give me a bit more? Can you sell them to me a bit cheaper?'  You knew what he was going to say, directly he opened his mouth, that he wasn't happy.  We made a two-way price, which was fundamentally a good price, an aggressive price, and it wasn't take it or leave it. Sometimes a broker was limited because his client would say, 'I want to buy at so and so', the middle price.  And sometimes you had a good will. You'd put the price down and say, 'Alright, you owe me a turn next time'.  Just like that.

BA:  Were put-throughs beginning to be a part of one's business?

AJ:  Yes, a broker had a buying order and a selling order. He had to put it through the market, so he'd come to you and you'd agree upon a price inside the buying and the selling price.  It would either be the middle price the seller would get; the buyer would give a little bit more for it.  That was often done that was.  But he had to put it through the market.

BA:  How did you feel about put-throughs?  Did you feel it was in some ways unfair to the jobber because it was taking business out of your hands?

AJ:  It was taking business out of the jobbers' hands, but if it was a good broker and you knew he wasn't on the fiddle or anything like that, you did it for him.  It was often done.  When I say often done, it was a once a day effort, you know, it wasn't over done. 

BA:  Did you try and expand your market share, as against other firms dealing in equities like Durlacher, or Akroyds?

AJ:  No, very rarely did we expand in any other shares than what we were already dealing in. The only time it happened: if a new issue came out, a new flotation of shares, the broker would say to us, 'Are you prepared to deal in these shares?' and we would say 'yes' or 'no'.  And if we thought it was worth dealing in them, we'd say, 'Yes, ok, and we'll take them'.

BA:  So you're referring to underwriting?

AJ:  Yes.

BA:  And what was your attitude to underwriting?  Do you regard it as being a service, or was it a profitable part of....?

AJ:  Oh yes, it was a service because anyone who underwrites a stock is taking on a liability; so yes, I agree on that, underwriting, yes. If they want to take the liability.  The shares needn't all be taken up and they could be left with the underwriting in the shares. That's their gamble, so it's fair. Fair enough.

BA:  Did you find, as time passed, particularly coming up to the change from the old House to the new House,  that the Stock Exchange as an institution was changing to the Stock Exchange that you'd known as a younger man in the nineteen thirties, either purely in terms of dress standards and the way people behaved?

AJ: Well, we were, the older partners, were probably old-fashioned, but again we had to recognize it was progress, and progress, alright you don't agree with everything.  For instance the white stiff collar I wore for twenty or thirty year went out.  I don't say jeans came back in the market, but it got down to a pretty low level. By the time it finished it was at a much lower standard than we were used  to when we were younger.  I was ashamed, a bit, because it lowered the prestige of the Stock Exchange.  We always regarded ourselves as gentlemen of the City, stiff collars and what-have-you.  Even in the end I was wearing a soft collar so that you could tell.  It did depreciate a bit, yes. But, progress goes on and you had to adopt it.  Sad.

BA:  One other thing I wanted to ask you about was that one thing occasionally people I've interviewed referred to is people trading on PA, personal account. Was that a sort of uncommon occurrence?

AJ:  It was an unwritten occurrence yes. In my firm everybody had to sign a form saying they would not deal for their personal account, PA, unless they referred it to the senior partner, or a partner.  So there wouldn't be any jiggery-pokery.

BA:  What was your impression about that in the Stock Exchange generally?  Was it different to your younger days? Would people have been a lot more free and easy? Was it a common occurrence or was it uncommon?

AJ:  In the older days it was a common occurrence for people to deal PA, and that's where you had the fraudulent crop up here and there.  It often became a committee, Stock Exchange Committee, Council ruling. There wasn't a laid down ruling that you couldn't deal PA, but it was held in very low regard that unless the firms were notified, there could be trouble.  I think it was adhered to in the end.  Most firms had this thing that the senior partner should know what was going on.

BA:  If someone wanted to trade on PA, how would they go about doing it?

AJ:  Well they wouldn't do it through their own firm. They'd put it through a broker.  They'd ask a broker, saying 'I want to buy 500 ICI for my own account. Would you do it for me?', and some brokers would adopt it and charge commission and do it.  Oh yes, it could be done; it was often done.

BA:  So did you have cases of jobbers and brokers becoming too close in the sense that they were more interested in doing their own private business between them rather than...?

AJ:  No, no, I don't think so. It was only on a small percentage, very small percentage.

BA:  And  what about what we now think of, or what we now call, insider trading?  Was that an occurrence....?

AJ:  That was a small occurrence. Not so  big as it used to be. In our day it was a very small petty thing, which was recognized and nobody did much about it. But the inside business now, that is rather horrific, terrible.  If they're caught they're in trouble as you know.  But I don't think many firms do it.  It got out of hand a bit, but I don't think they do it much now, because they're up before the beaks and the juries and there's trouble.

BA:  When you say it got out of hand a bit, was that within recent times?

AJ:  No, I'm talking about ten years ago.  It got out of hand. It was in the papers, inside people gossip and what-have-you.

BA: Just changing the focus a little bit.  Was the shop brokers an important part of one's business in the sense that it was important to stay in touch with the shop broker?  Or was it more important for the shop broker to stay in touch with you as the jobber?

AJ:  Well as a jobber really you couldn't ask the shop what his business was. It wasn't thought in very high regard  to ask the shop broker what his firm were doing with the companies they'd adopted.  No you couldn't do that. 

BA:  Did you have much contact with the broker dealing for the company?

AJ: Oh yes.  Supposing you had a buyer from a broker, and you couldn't deal in the market, you'd go to the shop and say 'Look, I've got a buyer of 50,000 ICI, can you help?' And often he'd say, 'yes', at a certain price, and if the price suited you, you'd adopt it.  That would be the last straw; other than going to the market and trying to deal, or trying to deal through other brokers, you'd go to the shop.

BA:  How would you have compared the South African market with the industrial market in that sense?  Were the markets controlled in very different ways; not controlled, but influenced by different factors?

AJ:  Well they were a very different category, because if you were dealing with the British industrials it was easy, but if you were dealing in the gold mining shares, South African shares, it was very hard.  First of all you couldn't contact them or anything, only by telegram in those days, or telegraph, or anything like that. So really I mean it was a bit vague, they were out of your hand; much more difficult to deal in the gold mining shares than the industrial shares.

BA:  Did you find they were almost in a sense two firms within Smith Brothers? One that was oriented towards the gold markets ....?

AJ:  Oh yes.  If the gold market was good, you wouldn't say that the British market has got to be good.  It could be quite the opposite.  No quite different, and the South African market was much more volatile than the British industrials.  First of all there wasn't the number of shares available, and secondly they were wider prices than industrial prices. The industrial prices were very, what I call close, very close spread of buying and selling, whereas the South African shares were much wider.  But you could make more money in the gold mines, because you had a wide range of prices, quickly, if you were on the right tack, bull or bear.

BA:  You mentioned that at some point you started to attend the Annual General Meetings of firms like ICI.  Did the firm have similar contacts with the South African companies?

AJ:  No. They used to have to go out there. They had no contacts in London.  They had their offices in London but they were only subsidiary companies. They weren't the main people.  If they wanted to know or get closer relations, they had to go to Jo'burg and meet them out there.

BA:  And what was the benefit to the firm of having contact with the companies?

AJ:  Well, not a lot of benefit in respect really, just to know what they were doing in their shares and what they thought of their shares, which they probably couldn't tell them on the telephone.  Mouth to mouth is much better than long-distance call.

BA:  Did you still feel that you tended to know a bit more about the company than the brokers did, or did you find as time passed that the brokers developed a lot more expertise in the shares.

AJ:  Over a period the brokers did get more expertise, but on the face of it, on the front. Beforehand, if you dealt in a range of companies, you got to know the companies through experience and their moves and volumes of shares and their placing of shares, and bringing on new issues, so you got to know companies much better like that.

BA:  And was that still something that the brokers looked to you for?

AJ:  The brokers always came to the jobbers really, and they reckoned that the jobbers knew as much as they could and could help them. Because we used to keep statistics and ups and down, lower and higher prices for the year.  We used to keep them on our books so we had a good reckoning of what was going to happen.  Some shares hardly moved during the whole year.  Other shares were top and bottom, you know.  Really moved smartly. Especially some of these speculative stocks that came out.

BA: Can you remember any of those?

AJ:  Well I told you one; GRA, went from a 1/- to 25/- bull in one year, which was fantastic.  Before the war they went 1/- to 1/6 and that was the whole year.  They went from 1/- to 25/- in a year, and the queues!  Buying thousands and thousands.  It was amazing, a one-off.

BA:  Did you notice much difference in broking firms between the Cazenoves and the Hoare & Cos and Panmure Gordons, and the smaller broking firms? Were they a different animal?

AJ:  Very big difference.  The major ten I would say - you mentioned six then, but the major ten companies were  a far higher quality, like you might say Harrods to Marks & Spencers, in a small kind of way.  The quality of the business was good.  They had the cream of the business.  They had the bigger orders. If Cazenove came to you, you reckoned he was 25 - 50,000. If a small man came to you you reckoned it was between 1 to 5,000.

BA:  Did you make different prices to different brokers?

AJ:  No, no, the only price you made differently was on the amount of the shares.  You made the same price.  Whether it was Cazenove or A.J. Becher or someone like that, you made them the same price on the share, unless it was 10,000 to 50,000.  When the broker came to you, he would always say to you, 'What's the price on ICI?', and you used to say, '39/4 halfpenny, 7d halfpenny', something like that.  And he'd say, 'What sort of market are you making it in?'  And you used to say, 'The regular price, 5,000-10,000, if it's your lot'.  If he said, 'Oh no, I'm bigger than that', you'd say, 'What sort of number?'  If he says, '50,000', you'd make him a price.  If he didn't deal on the price, he'd say, 'Well, I'll buy 5 or 10,000 from you and go on and chance my arm with the other jobbers'.  But he'd have to tell the other jobbers he'd been elsewhere.

BA:  What would you do if a broker came and told you that he'd been elsewhere?

AJ:  I'd treat him the same as the other jobber dealt elsewhere.  If it suited me I'd say, 'Alright, well I'll sell you 5,000'. If it suited me I'd probably finish his order, depending on the accumulation of stock I'd got  on my book, or I hadn't got on my book, or the chance I wanted to take. But a broker had to be fair and say, 'look I've been elsewhere. I've dealt in 5,000. What are you prepared to do?'  And you could say 'the lot', or you could say, 'I'm sorry bugger off' - or 'sorry, go!'  Well that's the expression "on your way, feller".  You had a liberty.  You  could say what you wanted to, once he'd opened up and told you.  As he was so fair, you often helped him on his way, either by finishing him off or helping him a certain amount.

BA:  Were you able to have some idea what the other jobbers were making to the brokers?

AJ:  No.

BA:  What I'm getting at is did you have any idea what your competition was?

AJ:  You generally knew you were in the range.  You guessed that from the way people dealt with you.  Most brokers, although they favoured dealing with you, they would sometimes check their prices elsewhere.  Well most often for their clients' sake, they would check their prices elsewhere, and if they came to you and you were making the same price and they liked you they'd deal with you.  There was a slight preference for some brokers to deal with certain jobbers, but only if it suited their client.  

BA: Did you find - some people have referred to the different techniques of jobbing, like, for example, lip-reading, or the way you'd manipulate the prices on your board to try and fox the other jobbers. Did that play much part in your jobbing?

AJ:  No, that was too apparent, I mean if anybody saw you lip-reading or a chap putting your price on your board and they looked at your board and you weren't making that price, they'd soon know that you weren't playing the game. And the old adage, "My word is my bond" and that business, you had to stick to it.  No there were certain principles you had to stick to.  It didn't behove you to try and cheat the broker. Because once you started cheating the broker, you wouldn't see him any more, you'd lose your business.

BA: Just again to change the subject a little bit. Did the introduction of the capital gains tax make much difference to business in the Stock exchange - that's the early mid-sixties.  Did people tend to turn over their investments a little bit less?

AJ:  Yes, if they'd reach the limitation of their  capital gains tax and it wasn't going on, you'd find they didn't bother any more.  If they made a couple of good profits and it reached the 5,000 mark or the price that the capital gains tax was at the time, they didn't bother, they didn't go on. No point, they were only giving it back to the tax man. 

BA: Did you notice any effect on liquidity?

AJ:  Slightly, not a lot.  It wasn't a major factor.

BA:  Were there fewer jobbers trading in the stocks in which you were jobbing?

AJ:  Yes, I suppose the top ten jobbers, they didn't deal in all the stocks each other had, but I would say 50 or 60 percent  of the stocks they all joined in and dealt in.  Where there was a big issue, a big capitalised stock and there were plenty of shares to deal in, yes, you had a wider range of jobbers.  Because they could make money on a bigger market.  But the small companies, no, there were probably only two or three jobbers dealing in the smaller companies.

BA:  Did you ever find that liquidity in a stock completely dried up?

AJ:  Not very often, not very often.

BA:  Well switching the focus to you again, you've described your career up to the point that you became a partner.  How did your career unfold until you retired?  Did you rise up in seniority, did you acquire any particular responsibilities in the firm, did you have an influence in the way the firm developed?

AJ:  Well we had a partners' meeting once a week when we all put our little problems together and tried to smooth them out and find out what was happening.  We generally had the manager in once a week,  to find out what his problems were in the office, to find out whether he wanted more staff, whether he was carrying on alright, whether he had anything to blunt his temper on.  There were four of us, senior director, Davis, Marks, myself and Rantzen. We were the four seniors.  Nobody had more stake than another, four equal partners, or directors we became afterwards.  Four equal partners and we had a very good mutual agreement and if the majority wanted this and that we went along with it. 

BA:  Now when did you decide to become a company as opposed to a private partnership?

AJ:  1972 I think it was.

BA:  What was the background to that?

AJ: The background was that we wanted the shares, the capitalisation of our money.  We had the money in the firm, earning interest, but nothing to what our shares would be.  By getting the shares in our names and the partners below us, they had their share as well, so it meant, not like a golden handshake, but it was really.  It was a way and means of getting money into your hands, by having shares.  We had a mutual agreement we wouldn't plonk the shares out and sell them until we retired.  Which we didn't.  I didn't sell shares till I retired. 

BA: And when did you start thinking about retiring?

AJ: I was 58 and I was thinking then, I wasn't being over-pressurised - quite frankly, I was in good health - and I thought to myself, 'what am I going on for? I've got enough money now.' (I mean now, I'm saying now. I mean then.) The money I had then is nothing now compared with the way money's accelerated. The money I had then and what I've got now is nothing to what probably the Ledermans have got.  They've probably got much more than I have now, because they stuck it out and their shares have appreciated.  If you look at the balance sheet, you'd see Geoff Lederman's got about 150,000 - no Gerald has - and Geoff's got about 70,000, and I think Tony Lewis has got about 54,000.   You've only got to look at the balance sheet and you see that on there.  So that that's the way of earning money, quicker than getting the interest and paying tax on it. Because you don't have to sell the shares in one lump, otherwise you'll be paying capital gains tax. But if you sell them in small parcels, you're free of capital gains tax.  But as you asked me, I was 58, and at 59, I said to the other three, 'I'm packing in at 60', and they laughed at me and thought I was stupid.  Well I said, 'I'm going to live down at Bournemouth. I'm going to enjoy the rest of my life. Hopefully live another five years longer than I would have done.  Pressure's off me.  I'm happy, I've no grudge against any of you.'  And within three years the other three got out one by one.

BA:  How did you find leaving the Stock exchange?

AJ:  Very sad, I had several big parties.  I gave a party to all the brokers.  They gave me a party in the Dorchester.  But the comradeship I missed badly.  Not going up every morning, speaking to everybody and saying how are you, what's new?  It's the friendliness of your friends you've made over the last thirty or forty years. No longer were you there to say hello, goodbye. That was the hardest part of it.  I reckon it took me five years to get over that. [phone rings] That'll be my son, he rings me every afternoon to tell me how the market is.

BA: Well, I'll ask you a few concluding questions.  What did you think it took to be a successful jobber?

AJ: First of all not to let things get the better of you, secondly to keep your head and thirdly to be nice to everybody without being spiteful.  If you wanted to create a good business you've got to be amicable, and alright sometimes it didn't suit you to help anybody, but given the good spirit of the person you're dealing with you'd help them and you'd do your best to help them. And sometimes it didn't suit you, but you knew they'd come back and in some way they'd recompense you in the way that you've recompensed them.  I think the thing was to keep friendly and be nice to everybody and build up a comradeship.

BA: Can you think of any cases where you have had to keep your head in jobbing?

AJ:  It's a difficult question to answer.  There were often cases where you took on an order and it started to go well and suddenly it either collapsed on you or what-have-you, and you either had to make up your mind quickly whether you were going to stick with what you thought was right, or cut it.  And that was the hardest thing in the world, to cut a bargain if you think it's right.  But sometimes it paid to cut it because they used to say in the Stock Exchange, the first cut is the  cheapest.  So you went along and cut and started again.

BA: What do you think were the qualities of an unsuccessful jobber? Did you know of unsuccessful jobbers in your career?

AJ:  Well as I said to you before, a jobber could only maintain and keep his business if he kept a good relationship with the brokers. Supposing a broker came and dealt with me or any other jobber and the broker did the order and the poor old jobber lost a lot of money on it, and the jobber who shouldn't, would call the broker over and told him what he thought of him, that broker would never go back to him again. So you had to take it or leave and keep a straight face and say alright, next time I may win.  But it's no use going what I call belly-aching to the broker and saying, 'You did me a bad turn there', because the broker would say, 'Alright, I won't come to you again'.

BA: Did you think the jobbers were a different breed to the brokers?  Would you, for example, have ever considered going over to become a broker rather than a jobber?

AJ: No, I wouldn't.  I would never - when I say I would never, if I was forced to.  You've got to built a good clientele up to become a broker.  It's no good having two or three people because those two or three people may only deal once every month or two months.  You can't live on that.  So I admired the broker because he's got to build a good clientele; not only build the clientele but make the clients money, which is also very hard to do.  You can't get on to a client and say, 'I think you should buy this' and it's wrong.  That client won't come back to you any more.  So he's got to be nine times out of ten right that in his advisory capacity, telling the client that he's going to be right and he's going to make money out of it.  So no, I think ....

Tape 2, side 2

AJ:  [The jobber was] shot at all day.  You make a price, not knowing which way the broker's going to deal. The broker may deal and put the jobber on the spot by selling him stock he's already got.  So the jobber has to lower his price straight away to sell the stock he's got.  So it wouldn't suit every broker to do that, I don't think he could stand the pressure.

BA:  Did you think the brokers came from a different background to the jobbers?

AJ:  Yes, I think I did mention before the brokers mostly came from Universities, where the others were more or less elementary schools.  I think the brokers had the advantage of knowing higher clients, pricier clients than the generation from the elementary schools.  They knew the right people who were dealing in stocks and shares and could afford to buy or lose or sell.

BA:  Did they ever look down on the jobbers because of that?

AJ:  Oh no, there was a good feeling between brokers and jobbers.  A lot of the jobbers, some of the high class jobbers with Durlacher and what not, they came from Universities.  

BA:  What would you say were the strengths of the jobbing system, say comparing the world after 1986 with the world before 1986 in which you'd worked?

AJ:  I think the jobbers earned their salt much more than the jobbers do today.  First of all, there wasn't so much money about.  There weren't so many people dealing on the Stock Exchange. It's only broadened out through the strength of papers really. And I would say it's easier now for a broker to make money or get a clientele going.  Because a pound in the old days was a pound. Now £10,000 is nothing.  It's the accumulation of money, or the way money has appreciated.  In the old days it was very depreciated.

BA: And what do you think was the distinctive quality that the jobbing system gave to the London stock Exchange?

AJ:  The quality?

BA:  What difference do you think it made?

AJ: Well again, as I said before "My word is my bond". There was honesty, fair play, nobody tried to outdo anybody else unfairly, because they knew that it would come back on them in the end, and you had to be on your mettle. But on the other hand you had to be give a pound and take a pound, do you know what I mean?

BA:  Did you think there were any weaknesses in the jobbing system?

AJ: Yes.  Most jobbers carried for a time, passengers. And the passengers only became apparent over the years when they looked back and saw there what they made one year, and made the next year and found they weren't doing any good, and they were quietly told, 'We don't think you're up to the job and we think you should look around,  probably go to a broker'.

BA: Why did that happen? I mean how was it that  firms would end up with passengers, as you said?

AJ: Well a bad jobber sometimes made a good broker.  He didn't have to use his head so much by making prices and watching the market go up and down and he couldn't stand the pressure. Whereas a broker he could say to the client, well the client would come on to him, and he'd say, 'I want to buy and sell'. He didn't have to think about it.  He just did the business.  Or the senior partner in the firm would say to the boy, 'Go and buy so and so for Mr. Smith. Buy 5,000 of those.' He could go into the market and just deal, so there was no pressure on him at all; pressure.

BA:  Would you say jobbing was a risky business.

AJ:  Oh I would, very risky.

BA:  Could you elaborate on that a little bit?

AJ:  Well every time you'd deal in any share, whatever it is, it's a certain amount of risk you're taking on, because nobody - the cleverest person in the world - can never say whether that share is going up or down, and if you've got about 10, 15 or 20 jobbers doing the same stock, you don't know what their thoughts are.  So you're in the lap of the gods.  Oh no, it's a very risky business.

BA: Now, how would you contrast the Stock Exchange at the time you'd retired with the Stock Exchange when you first joined? Had it changed?

AJ: Well again as I said before it's changed because of the money appreciation.  When I was dealing in 100s, 500s, 1,000 shares that was my lot - a good day's business. But then when the money went higher, I was dealing in 5, 10 and 20,000.  Now they're dealing in quarter of a million, half a million.  It's the appreciation of money and the appreciation of shares and the more capitalised shares were, the more stocks to deal in.  Where some companies would capitalise £20 or £30,000, or £50,000, a quarter of a million, half a million, 10 million, 20 million, capitalisation, there's more shares around.  It's a freer market.

BA:  How would you contrast Smith Brothers at the time you retired to the firm when you joined in 1928?

AJ:  Oh dear, very very much bigger.  Progressing along the line again.  And the appreciation of money, I mean all the people who were dealing in the early days with Smith brothers gradually matured and their incomes went up and their capital went up.  The market got from 1945 onwards, the market got freer and freer every year, because there was more money, more shares, more to deal in, more capitalisation. Not the firms getting much larger, or not more firms becoming jobbers or brokers;  roughly the same amount of jobbers and brokers, in fact, if anything, less.  Because amalgamations of brokers, and one or two of amalgamations of jobbers, more so in the broking line, lessened the people dealing. So it wasn't through that, it was just the money and the share capital, and takeovers that put the values up.

BA:  How had you felt about a career as a jobber? Did you feel it had been a good career to have pursued?

AJ: Yes, I couldn't have done better anywhere else.  I could have done any job. I'd have got a steady wage, which would appreciate, but nothing on the scale the Stock Exchange did.  No  way.  But you had to be a success to do that.  If you were a failure, then you were out, no problem.

BA: What do you think were the qualities that you had that meant that you were a success?

AJ:  Hard work, just hard work and knuckle down.  Good times with the bad times.  As I said before with a bit of help from your 'guvnors', in the bad times and that helped a lot, home and dry.  It was knuckling down and sticking to it through thick and thin. 

[Mrs J:  And good wives!]

BA:  I think we'll finish on that note.