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

Interview no. 1: C.J. (Jimmy) K. Bisgood

Interviewer: Bernard Attard

12 December 1989

The first half hour of this interview was erased.  Mr Bisgood's account of his early career and Bisgood Bishop during the 1930s is on tape 3, sides 1 and 2.  

n.b. Any substantial elaborations or clarifications by Mr Bisgood have been either indicated in the text by square brackets or added as footnotes. 

Tape 1, Side 1

[This part of the interview continues from Tape 2, side 2] JB: ...the brokers who had a position that they didn't want to either pay for the stock, take it up, or to deliver it wrote on a slip that they wanted to carry it over, and provided that one could very often match this up between different brokers, one [did and] charged a rate.  The reason probably that the people had bought the stock and didn't want to take it up was that they hoped that it would be going up in the next account and they didn't want to pay their money.  By giving them a rate, you know which was very small in those days, probably like 5 and a half per cent, they would be able to carry it over so that they wouldn't have to pay for it, they'd pay you on the money. And you had somebody who had sold the stock, didn't want to deliver it, because if they bought it back (in those days you could buy it back closing) ... and you would give them 4 and a half per cent for that, so that you just took  a little turn on it.  It was a lot of work I reckon for very little money and I don't know who first set the style for doing what then became 'cash and new', where the bargain was closed at the end of the account and opened again for new time and both the broker and the jobber made a good bit more out of it.

BA:  When did the contangos disappear?

JB: We certainly didn't do them after the war, so whether it was a war casualty or not I don't know but it provided a service, I suppose; but frankly, it was more I reckon of a nuisance than anything else. 

BA: Now did you feel as a [jobber] that you were used as a source of intelligence information on the different markets?  

JB: Yes. I think that certainly the jobbers did and should have had a fair idea of whether the stock was going up or down because basically that was their living.  In the old days when names were passing through the offices it was extremely valuable if stock had been bought by a broker you could see his tickets which he passed to you and in those days the name of the client and his address were very often on them, and if somebody was buying shares and he was the chairman of the company and he was buying his own shares the supposition was that you ought to jolly well have those shares. So that it could be quite useful.  As I say, you gathered that a broker could give you a friendly tip off.  I can remember a chap came up to me and asked my opinion as to whether he should sell a stock which I wanted to buy and I said to him, 'Well, you know frankly, do you have to sell these? Because I don't think you should. I can't say more than that'. So he sold them to me and a couple of days after they had a jump and he said, 'Oh, that's the first mistake I've ever made like that'. So I said, 'Well I'm sorry I did, you know, say I thought you oughtn't to sell them because they might be going up'. He said, 'Well all my life I've acted on the assumption that I would be right if I did exactly the opposite to what a jobber said.  If he said I oughtn't to sell them because they were going up it meant that he had too much stock on his book and didn't want to buy them, and equally the other way round'. So he said, 'Well, that's the first time I've made a mistake'. So obviously the analysts know far more than jobbers because jobbers were creatures of instinct and feel, logics didn't apply to them at all, so they could be very much out at times.  On the other hand an analyst says on this 'These shares are cheap, so therefore I will buy them', but there may be some reason which an analyst doesn't know, which a jobber may have felt and the jobber would be right and the analyst would be wrong. But I'm not decrying them.  They're highly paid people, and they do seem to make a market by saying 'buy these shares' and then later you read in the paper the same chap saying, 'I've down-graded my forecast' and so on and so forth. But I think probably the answer is, on occasions, they were definitely more clued up than the analysts and they could always give a picture from the shape of the buying, from the shape of the selling, the people who were doing it and they might know a bit about the company. Although there was one jobber who came back - as I say, the pitches were very close together in some of the small firms - and he had had an extremely good lunch and he sat down and a chap came up to ask the price of xyz and he found the book, saw xyz, opened it, made a price, dealt, put it down.  When his partner came back, rather when his dealer came back, and said, 'Oh done anything, sir?' He said, 'Oh yes, I've just dealt 5000 xyz'.  He said: 'Well we don't deal in them!'.  'What do you mean we don't deal in them you...' He picked up the book. 'There it is!'.  He [i.e. the dealer] said, 'But that's somebody else's jobbing book'. So they had to get the broker back and explain what had happened. You can't really see things like that, I'm afraid, happening now.

BA: No. This might actually lead me into a final area we might talk about: that is particular personalities you think about or recall. There might be even partners in your own firm when you started or people who were characters on the floor of the House back in those early days.

JB: Yes. I suppose  [of] my own firm, the person who sticks in my mind is Harold Strachan who was  a great cricketer and delightful character.  He'd been wounded in the war and he was a very good looking man, it made it even more so that he had a bullet that just missed his eye and passed there. When he went out for a noggin, which he did occasionally, he would come back and if there was a little throb there I knew I had to be very careful.  I think he was wonderful. He was very good to me... He helped me enormously and I think all the time I was his two i.c. we only had [one row]. He went for me, quite rightly. He bought a line of stock and I knew, or at least I felt that it was a bad one, and he knew I felt that way, and he went out to lunch and he didn't come back for some time and I had the chance of cutting this bargain.  And I thought very carefully, I thought well I'd better do it. I couldn't get hold of him because I didn't know where he'd gone, and so I cut it and he came back and of course he saw it and he really went for me, which was quite right I shouldn't have done it. I was a junior; the fact that  I saved a bit of money was immaterial to that. And I think while I'm on it, there was another character I remember who was the two i.c. of a rival jobber and they were completely different, Harold Strachan as I say was a KOSB and King's Own Scottish Borderers and so on, married a very handsome wife who was the daughter of one of the whisky barons and they had a large house down in Oxshott; and this other chap was completely different. He looked like a Levantine trader and he was, and he was also a very good jobber. And it was before Standards were going to bring out their small car and they [i.e. the shares] were running.  The market was going up and we were running a bull tack and the other chap was running on the bear tack and they'd both been out to a really stiff lunch and they didn't like one another, as I say,  they were complete opposites. In those days there was a challenging system, in other words you could go to challenge another jobber and he could either deal with you or not as he wished.  So they started challenging one another and they were really very very comfortably off from the lunch, and they met mid-way between the two pitches and I went with my chap and Hackford Jones went with his and we couldn't believe it.  They were dealing in thousands absolutely like two stags at bay. So finally, after they'd billed about half a dozen times, they retired all very flushed.  So Hackford Jones and I looked at one another and said, 'Well we can't book these bargains'. So we said we must book something, otherwise, you know, in the morning there would be hell.  So we halved all the bargains in size as a start and then we looked at one or two which the price looked most peculiar so we took those out so eventually we booked about four bargains which more or less was what they intended to [do] - in other words our chap had bought them, his chap had sold them.  And we got away with it.  The next morning, they didn't know anything about it, neither of them queried it. So you could imagine what that would be, happening in this day and age!  Brokers - I remember Kit Hoare who was a tremendous character, great bushy eyebrows, strike terror in everybody.  Very fine chap.  The dealers, I suppose Charles Purnell, everybody of that generation will remember.  He had enormous sort of beetling eyebrows and as I say he was Cazenove's dealer and so he used to do all the enormous business.  He was fair, but pretty tough and one had to swallow hard when you were going to take him on. And there was a Colonel Side of de Zoete who was the first chap I ever did one of these enormous put throughs off, the bargain basement, which they were doing to establish a tax loss. The first time I'd ever come across it.  I don't remember the stock, but the ordinary market was about  25,000, and he wanted to deal in something like 365,000. And on these deals to establish a tax loss, you had to deal more or less within the price and he wanted to deal in I think it was 360,000 shares and put them through for a sixteenth of a penny and quite a bit below what was obviously the normal market price. So I said 'Well bluntly can I do this?'  So he said, 'All right, what are you going to bid me for 360,000?'  So I saw his point, that would be the price that one would probably have made on 360,000 so he said: 'OK don't  worry about it we've taken legal advice on this and this is alright.  But if you would bid more then you've got to tell me', so I said I wouldn't have bid more so we did the 360,000 at the sixteenth.  That was the first time I had come across it in those days.  He was a very good man. Another chap I remember was Geoffrey Perkins of Grieveson Grant who we used to do a lot of business with. He was a very very shrewd cookie and pretty well as near the knuckle as you could do. When he retired, I had to make his farewell speech for him, make his presentation and so on, it was a mixture of brokers and jobbers and I remember saying that it was admirable for all young dealers to meet him early on in life because they would gain greatly by experience dealing with him, it was a sort of triumph of hope over experience.  So as he was retiring he took it in good part but (I suppose this is not really for the tape) I found out always when one had to be especially careful, you'd see him rubbing his finger and thumb.  Unfortunately after a couple of years somebody told him about it, which was a great pity. When I said he used to go near the knuckle I don't necessarily think it was him only but he would ask for a price and size in large amounts of stock and the first two or three times, I made it and he'd say, 'Can I take that out', I'd say 'yes' and then towards the end of the day, if he came back late in the afternoon, he'd say, 'Is there any change'.  Now if there had been a change you would have said so and that would have been that.

BA: Change?

JB: Change in the price or the size you had made it in. So if there wasn't, you said 'No', he'd deal with you in this chunk.  So you'd say, 'Right, OK now I know  so and so's interested (we were talking about making business) so I think this would attract these two brokers.' So you'd go and offer it to them and they'd offer it on, obviously below the market price because you'd bought it below the market price and you had to make it attractive. And one day both of them came back and said.'Oh, our client's seen this', which had meant that he'd already knew that this stock had been offered and turned it down. So what [had happened was]: they [i.e. Grieveson Grant] had got the jobbers' price, so that they could go to the client and say. 'Right we can sell it at say, 45 bob' (because the market price you had made was, shall we say, 46 bob to 6d.and you'd made them 45 to 47 bob in this chunk) 'but we think we can get you more'.  They would then go round and try and place it so that they would get the two commissions.  No luck, they'd come back and stuff you at 45 bob.  So as I say, nothing wrong, you did it; it was your fault as a jobber for doing it. So after that you became fairly cagey and after about quarter of an hour you'd nip over and say, 'Well, are you still taking my price?'  'Yes'.  You said: 'Well I'm going to have to cancel it if you don't deal in the next couple of minutes'. And they said again quite justifiably - because I had this out in a fairly friendly way afterwards, because we did get on, apart from these things, very well; we made the point: 'supposing your clients were told that the buyer was no longer interested, your client won't get 45 shillings so you're not doing your best for him' -  and he said, 'Oh no if that happened we as a firm would take the stock'.  So the client wouldn't lose anything... now, so...!  

BA: Just in conclusion a couple of things you mentioned you might explain.  You said you were a two i.c. to your partner?

JB: Yes, I was a dealer and he was a partner.

BA: So that's what two i.c. means?

JB: Yes, I'm sorry I was using army slang.  I was his dealer, sorry. [Literally second in charge or command].

BA: I see. Now you said that you had a first experience of a bargain basement. Oh no, someone was trying to establish a tax loss in a share.

JB: Yes.

BA: Can you explain that a bit more?  Who was trying to establish the tax loss?

JB: The client.  

BA: The client.

JB: He had a great holding of this and he wanted to do it in one piece and in those days you had to - if you were doing this - to comply with the Inland Revenue you had to take that stock and hold it whether you wanted it or not and then the next day the broker would come back and take or, if he didn't want to, he didn't have to and that was to comply. So you would only do such a deal, (a) in a stock that was reasonable. I mean if it was a dud stock he would say sorry no, no go, and [b] with somebody that you trusted, who said well this is what it is and you'd expect it.  Equally the jobber could have said, 'No, I bought these and you can whistle for them to get them back, I'm going to keep it'.  That was the first time I'd met it I remember.

BA: Let's conclude.

JB: Market officials?

BA: Yes the market officials, you want to mention that?

JB: I think this was a typical thing of the sensible system of poachers turned game keepers.  They were people who were still on the Stock Exchange and who had had a considerable dealing experience so that they were either senior dealing partners of jobbers or senior brokers. And the whole idea was that when a query happened, usually as I say between a broker and a jobber, the two sides would come to you.  You could hear them one by one to start with so that the broker said his side and then you'd think that over and note that and then you'd get the jobber in and hear his side and then you'd make a ruling as to who was right or wrong and what should be done.  We were working under one of the Stock Exchange Committees and we always made it quite clear that we had no jurisdiction, we couldn't lay this down.  We could say this is what you should do, but if you don't agree with it you can reject our ruling and go up to the committee.  And I think virtually only one that I can remember at the time that they didn't take it.  I mean we knew the rules backwards from both sides and we often found out that they were mistakes: somebody had said the thing wrong casually, then taken it up, and then felt they had to justify it, then it had gone up to the head partners.  In the old days you would then have the two tops of firms having a row. If it could be settled amicably between the two dealers at the time who might or might not be partners - they didn't have to be partners, sometimes it was a dealer who came in with his dealing partner - then they would accept that; and also it did mean that - well, I suppose also you could say that they learned something from their mistakes and it didn't involve the firms.  So it was a very good thing.  It went on right to the end, even after the Big Bang they still had them and they were...; usually it was two brokers and a jobber [or vice versa].

BA: How did one become a market official?

JB: You were asked if, well (a) you had to be assumed to know your stuff and (b) to be willing to do it, and then whoever was in charge of the committee at that time would ask if you would do it and you'd say, 'Yes, fine'.  You had eventually a little box of your own and then we established case history.  It was very interesting actually.  I felt it was a good way of ending one's career because so many of these times the actual argument was very minor but people had got entrenched so early and once they got entrenched, then their own people had to back them, and the thing would go out of all proportion. And also then if large put throughs were being done off the market basis, there were certain rules on how that should be carried out, so we would advise on that and tell them what they could do, what they couldn't and whether they would have to mark a bargain or whether there were extenuating circumstances in the book of rules where the bargain need not be marked, which we knew and which we then made sure that they understood it, eg. there was then no further business at that price, it was the end of the order and so on. So that was very interesting and one met some very interesting people also in that little box, Sir Nigel Mordaunt was there and James Capel's people.

BA: In what period were you a market official?

JB: This was just before I retired, sort of seeing me out because I wasn't running a book and I was only about ten yards away from my pitch where Bisgood Bishop were.

BA: Well, looking at the jobbing system from post Big Bang now, looking back at your career what, briefly, would you say were the main strengths of the jobbing system in the old days?

JB: I think it was certainly the strength of the people in it and that goes for all the firms really; that we were certainly providing the service which was needed at that time and as, I said earlier, the smaller clients began to fall by the wayside, that meant smaller brokers were; and the Stock Exchange was then evolving into bigger units and because it wasn't done with a wild rush like the Big Bang, the mergers took place and the system, I think worked well. And, thinking of some of the flaps that happened at the time, how quickly the jobbing system got a price going again which would have taken - New York would have had to have the 'pause' and so on and so forth - but probably within thirty seconds there was a price, it might be a wide price, it mightn't have been a large market amount to start with but there was a price on which business could start again, very very, quickly, thirty seconds perhaps. The jobbers used to take quite a bit of stick because they wouldn't take stock in a really flat market. Well, one worked out if the amount of shares that you dealt in: if you bought - I think it [...] worked out that - if you bought 200 shares in every stock you dealt in at the market price - apart from the fact that it was going down, so you would lose a lot of money on that - it would use up about ten times one's capital. So obviously if the market was going to drop, as I say, earlier on in life, if Hitler had marched into Sudetenland or whatever it was, or a socialist government had come in, or taxes had [risen] violently, you'd move the price to find where the market was. And one had good relations. I'm thinking particularly of Grieveson Grant. You didn't have to deal with your opposition market makers, therefore unless he was a buyer [you didn't deal]. If he was a seller it was no good coming to another jobber because [he wouldn't deal]. If he was a buyer he might come over and close part of his position.  So we held the prices fairly gently, we didn't knock them completely wildly and then the institutions would come in through their broker (I'm thinking particularly of Grieveson Grant) and they would put a limit below the price of a reasonable amount and so immediately you had a buyer so you could sell a bit of it or you could decide that this is the area and you got a business going straight away. Nowadays they'd get knocked down so fast that, with the best will in the world, the institutions just sort of watch until the thing stops and then they try and get in again and of course it goes back again, so I think in some ways that system served its purpose, but I agree now that its got so international and so large that this new system is one that's worked.  But people haven't made money out of it really,  which I think is a pity. And they have at least stopped... when the thing first started the market makers had to deal with one another on the price on the screen and that now I think has been cancelled so they don't have to.  So you can imagine the price on the screen was going down like that and looked an even worse blood bath. We used to mark them down in red on the board, so it was not quite so bad.

[This part of the interview was on the original Tape 1, side 1. At this point, Mr Bisgood is describing the markets in which Bisgood Bishop dealt during the 1930s. See Tape 3, sides 1 and 2 for his early career and Bisgood Bishop during the 1930s]

JB: [The bulk of our business continued to be based on the motor industry, its components, and engineering companies. We had a book also in lorry shares, and aircraft was another group. Perhaps it is of interest to know Rolls Royce was dealt in on the motor pitch. Among ancillary companies was the garage group. In those days there was also a market in motor cycle companies. To sum up: we were based on a segment of the industrial market in Britain. As time went on we added other stocks and expanded further. One of the Bisgoods was on the board of Brown Brothers, although he had retired before I came so I don't know how that would have affected our turnover in that stock. As the majority of the motor and component companies were based in Birmingham/Coventry area there existed quite sizeable local firms who would often try to undo their business in London as would London jobbers seek to deal with them. This business was normally carried out by "shunters", i.e. brokers who would deal between the two centres for a commission. We did incorporate a very pleasant character called Williams who dealt in a few stocks but without making a serious price. We had therefore either to give up a stock or else put it with one of our existing books and make a proper market in the share.]

 BA:  Can you talk a little bit about what you did as a dealer, say during the late 30s. Could you describe a typical day, for example? You say you were attached to a particular partner, you worked for a particular partner?

JB: Well, one, I think one of the attractions of jobbing, of course, was the fact that you could make a terrible mess of it on Tuesday and come back to the fight on Wednesday and start again; and so you would have, going to work, an idea of your positions, what you wanted to do, what you ought to do, how you would adjust the price. You would also be reading your papers...

Tape 1 Side 2

I think it was virtually essential to read, certainly, 'The Financial Times', because conditions might have changed: in pre-war you always had a suspicion Hitler might be walking into another country over the weekend when everybody else was paying no attention; you'd find company news in it; and you'd get a sort of an overall picture of the financial situation.  Then one would probably have a quick look at, funnily enough in those days I think one used to look more at 'The Mail' and 'The Express' rather than 'The Telegraph' to see whether anything had been tipped or there were any snippets of news. When you walked onto the floor of the old House it had a strange atmosphere, apart from the fact that the waiters used to water all over it to prevent the dust rising and so on, but it did have an atmosphere and you could very often feel how the market was going to develop.  As a blue button you brought the books into the House, as a dealer you expected the books to be there when you arrived -  you'd check through them, look at any limits that you ought to take action on in the light of your morning's thoughts on your journey in...

BA: Can you explain the 'limit'?  What do you mean by 'limit'?

JB: Sorry?

BA: What do you mean by 'limit'?

JB: Well, in those days, you had a jobbing book opened: the right hand side you would have the actual bargains done, bought and sold; on the left hand side you would have limits.  Now if the price was 13s. and 13.9d. in old money, you might have a limit that somebody wanted to buy them at 13s. 4 1/2d. So, you would have a picture of people who wanted to deal in stock. Or somebody had asked a price and size; you put his name in the middle: you didn't know what he wanted to do; but, during the course of the day if the price moved, you'd try and open him up and find out what he wanted to do in his business.  So, if you had a buyer at 13s. 4 1/2d. and you bought some stock over night at 13s. 3d. and the market looked a bit dicey, you might offer them at 13s.41/2d. and you'd alter your price - not only to yourself, because you might be out and somebody would pick up the book and make the wrong price - you altered the price in the jobbing book, 13s.11/2d., [13s]71/2d., shall we say.  So you went through that and then you might get a telephone call from a broker, otherwise brokers would come in [and approach the jobber with business or seeking information].

BA:  About what time of day would that be?

JB: This would be at 9.30 when the House opened. [Of course, approaches would be made earlier. Brokers'] blue buttons which were the same, they could come into the house, run messages and also they used to check prices for their [broker] and report them back to their office or to their dealers on the floor.  So you used to run through the prices with them, and then hopefully the days business would start with brokers coming up and asking the price. Sometimes they were obviously just asking the price and didn't have any business, other times you could feel that they had an order. So half the skill was then finding out that and getting them to be willing to deal - if the price didn't suit them you could change your price.  And that went on. If you were busy, the idea of going out for a cigarette, or a drink, or a coffee, in my view, was difficult, because you'd lose the thread. Very often you didn't know the price the other people were making - or probably didn't - and you'd make a price and you'd see, by the expression on the broker's face, that it was very different elsewhere and he'd be shooting off to deal with somebody, so you knew your price needed adjusting.  And, of course, the actual dealing was always interesting.  People whom you knew would try to spruce you; the people who you genuinely wanted to help, and you did business with them and - you'd help them because they'd help you the next day. Oddly enough only a few years ago, I'd gone up to the city, and I was stopped by a chap who was certainly more than middle aged and he said, 'Oh, nice to see you', and I looked slightly blank then I did recognize him.  He said, 'I'll never forget the first time I came to you, the first day I was a dealer, and I asked you a price and you said, "Well, I haven't seen you before, do you want to deal?" So I said, "Yes, yes",  and you said (we'll say 13s to [1]3-9 again) and you said, "Well if you want to buy them, I'll sell them to you at 13s. 3d., and if you want to sell them I'll give you 13s. 9d. for them so your first bargain, at least, will be a good one," you said.'  I'll always remember that because you can't imagine something like that happening nowadays, with all the working on the screens and so on.  People criticise the old boy net[work] a great deal, but it did have a lot to be said for it - there was a lot of give and take in those days.  There was one very interesting occasion, I'm sure it must have happened at other times. A very decent firm of brokers, respectable, honest, and so on had been very, very badly let in - for quite a sum of money for those days - by a client and they had enough sense to go to the Bank of England and say, 'Well, this has happened', and the Bank said, 'Alright; just carry on for the moment', and, I don't know whether the Bank approached them but it became known to the institutions, if they could channel some business through this firm for the next month or so, it would be appreciated.  No question, it was done.  I happen to know that because I had some running business with a broker and I went to see him to deal and he said, 'Well,  I haven't got the order'. So I said 'Oh.'  So he said: 'Well, I think if you go and see so and so, they may have some business.'  So it was done like that and there was a great deal of genuine goodwill provided you had a good reputation and you were known as clean, people would help you.  I think that's certainly so, too, with Esmond Durlacher, who, although he was a rival of our firm,  did a tremendous amount to help jobbers who got positions out of place and so on - so that there was that great goodwill which I fear has evaporated now. I suppose the Stock Exchange in those days you could say was typically English and they were run by gifted amateurs.  Now it's run by, possibly, gifted professionals but it's changed so much character.

BA: Let's go back to your typical day.  You paused at some point for lunch, did you?  

JB: If you had business running, I didn't worry about it.  If there was nothing happening or when I had a good two i. c. then I'd go out for lunch. Occasionally, you'd take somebody to lunch, but more often, I think in those days, one used to slip out for a drink rather than for lunch - if somebody had done you a good turn or somebody came to the House you hadn't seen for a long time, you'd [take him out] - but I liked to do my drinking at the end of the day, because I always felt, particularly as a jobber, you could miss something when things were running.  But if they weren't of course, then it was fair enough. 

BA: So you would continue dealing?

JB: So you would continue dealing then until, I think it was, half past four in those days.  You then sent your books - because you would reckon that you would be able to carry all your prices and limits in your memory, if you were any good - up to the office, with your blue button or junior dealer.  And then you dealt with phones or people who were still on the floor of the House wanting to deal and then you went back, checked over your positions. I think, too, that if you'd been busy, it was very good to go over your cast because if your writing wasn't very good and your figures weren't very good and your blue button or dealer had cast them up he might have made a mistake and you'd suddenly find that your position was very different to what you thought.  I mean, actually, in the ordinary way really, as you turned over the page you'd cast them all and so bargains up and get a rough total.  So you oughtn't to, but it did occasionally happen that somebody had taken a one for a seven or five for a six or something like that.  And then as far as the dealing side was concerned, that was it.  We had tear-out sheets for quite a time which you - jobbing books changed shape quite a lot in those days - and you just tore out the bottom sheet and, as in the sort of later days when we were getting more efficient, we had computers and so on, they used to go up to the office at various intervals so that the office was sort of keeping up to date: they weren't just getting it, as in the old days, in a rush. Because when I first went there, the checking clerks used to take the bargains, copy them out on to checking sheets which they took down to the House in the morning. And they used to copy them out from the jobbing book, and that, of course, meant that everything was sort of happening in a rush but it was much better when you sent them out every so often.  You just tore them out.  Also it was quite useful because... It was then that one would have partners meetings.  Usually you went round the office to talk to people in the office because I think jobbers were much more closely linked with their staff probably than brokers.  Brokers may not agree with that, I don't know, but certainly you knew how they were getting on and who might be useful in the House and so on. You'd have then partners meetings which, of course, would cover anything from promotion, demotion, outlook, which books ought to be changing their shape - when I say shape, going perhaps from a bull-tack to a bear-tack - whether more money should be allocated because there was larger business happening in one sector than another, and all those, so that you then did that in the afternoon, early evening.

BA:  But would it just be the partners at these meetings or would the dealers be present?

JB: [This would depend. A routine partners' meeting would be held at the end of each account to discuss the profit or loss shown. From this there could arise possible action which could affect individual dealers. As our system produced daily the profit and loss up to date as well the bull and bear positions of each individual stock any corrective measures needed would take place during the account and usually there would not be a need for the dealers to be involved. The exception would be where a dealer was in charge of a book. Such a dealer would normally be a member of the Stock Exchange. Probably once a quarter there would be a meeting to discuss the progress or otherwise of staff and to allocate bonuses. Those who received commission were told at the yearly meeting what their commission would be for the past year and notified of any change for the following year.

[If the firm was going to change policy, eg going from a bull tack to a bear tack; alloting more capital to a certain sector; changing personnel from one sector to another - then the House staff would be involved. Similarly, if changes in office proceedures or a move of premises was envisaged then everybody would be informed. We also had the occasional working dinner for staff where views could be brought forward and questions - intelligent ones - answered.

[In the days before we built up our cash reserves we were in a very good relationship with our bankers. Nevertheless, if one had bought a large chunk of stock it might be sensible to hedge by selling a similar stock or releasing money by selling stale bulls. Quite often this could lead to increased turnover. I can't remember a time when it was so urgent that it was necessary to alert all dealers but as we were all on one floor it could have been done in moments. This speedy transmission of news could of course be useful if an announcement was made of the government's decision to clamp down on hire purchase or increase tax on petrol and so on.

[Two particular stories which perhaps illustrate the free and easy attitudes of those days.

[Company A was not doing very well but was expected to receive a takeover bid. One day we were stuffed with quite a few shares. Shortly after the company announced that the deal was off and they would report a large loss. We were sufficiently annoyed to find out who was the seller and to follow the matter further. It transpired that the seller had a relationship with a member of the company and was tipped off to make a speedy sale. We took no further action, although we heard an amusing rumour. Pillow talk?

[Company B had a scheme to convert coal to petrol; a marvellous idea, but the company had no track record, few assets and of course was not paying a dividend. However, the share price rose and a group of potentially interested people were invited to visit the plant in an obscure location. I cannot vouch for the following account of the visit as I did not go. However, my informant assured me it was true. In the morning the party visited the plant. They saw a great boiler being fed with coal. There were pipes running from A to B, various temperature controls and at point B there was the outlet through which the resulting petrol would be drawn off. The guide said it would take some time for the process to work so they should now take lunch. After a long lunch they returned in a fairly happy mood. The tap was turned on. Out came the petrol. Apparently it transpired the petrol was from another pipe not connected with the system! I can vouch for the fact that the company duly went bust.]

BA:  So about when would your day end, at the end of the '30s?

JB:  I would have thought normally you should be clear about sixish.

BA: Would you have people coming round to the office before then? Brokers or journalists?

JB: In the ordinary course - way - no.  A broker might come round [for] something special, but in the ordinary way they'd do it over the telephone.  If there was something very urgent they might come round or ask you to go round and see them. [A representative of the Financial Times would call to collect closing prices].

BA: Did you ever deal after hours on the Floor?

JB: [Yes, but when the House "closed" brokers were not permitted to return to the trading floor. Perhaps for a special reason. Brokers already on the floor could finish their business. Jobbers would phone their offices if anything occured that resulted in a price change].

Oh, yes. There were times if you were really busy, I mean you continued to deal until nobody wanted you. So you might be dealing at 8 o'clock in the evening.  And of course the Americans - we used to deal in Ford of England - and then the Americans, of course, would come on, they would start their business I suppose about, probably about four o'clock I think. And then they would go on later, although I remember before the big Ford takeover, I was going out to play golf one Saturday morning and the 'phone rang and it was a broker who said, 'Are you going to be in', so I said 'Well, I'm just going out'. He said, 'Oh,  that's a pity because we're going to get some business in Ford's from America'. So I put down the golf clubs and sat there and did quite a bit of business Saturday morning.  One other Saturday morning - no it was Sunday morning, actually - on Monday morning there was a rights issue and a broker that I used to play squash with - and I was playing squash with him on that Sunday - and after that we were sort of sitting around and quite a few of the people in the club were clients of his.  So he got me making a market which was highly illegal, I think in those days, in the new shares of this company that was going to start on Monday morning.  So I said, 'Well, I can't deal but you know, I'll take those and if you get on on Monday morning at the official time we'll do it. So we did it. So at least I did have a fair idea of what the price was that Monday morning. I think it was a great deal more, obviously, much more free and easy. 

BA: Well, let's resume the piece that you've prepared.  I think just after the War.  What did you do during the War? Were you serving or were you...?

JB: Yes, I was a gunner at ack-ack.  That's why we were called up early. We went down in '38 to Thames Haven and the oil dumps.  We dug out the gun pits and so on.  Some of them we filled up when the flap was over in '38, some of them we had to fill in, and some of the other ones were left - the owner of the land wanted to keep them for a shooting box.  And of course we went down in '39 to the same spot and dug them out again!  Then I was commissioned later on, into a heavy ack-ack unit and went to Wales and then we went overseas to join the Eighth Army.  

BA: And at the end of the War you decided to return to the House?

JB: [With certain doubts. I was not pleased that I received no money during the war, nor had my mother. I had applied for a liason job with the Americans. This fell through and I was offered a job with A.M.B.O.T. Ugh! After a liquid lunch I found myself in the City meeting up with some old friends who were rejoining Bisgood Bishop & Strachan. A little gentle persuasion, and I did the same].

They were a very nice firm and I think really, with one or two exceptions, it was quite a happy ship which one obviously tried to build up on.  Then when Harry Bishop retired, the head partner became Howard Taylor.  He'd been a first class dealer before the War, but he was ill, he'd had malaria and so it was a bit of strain on him. When he retired, Ingram Capper took it over, and then I took it over just before we were allowed to become [a] company [in order] to get outside money. I've got a few notes on that.  

BA:  What effect did the War have on the House and on the firm? Was it able to continue relatively normally?

JB: Well as I say, I wasn't there but basically it was very sticky to start with.  I think that the main thing was that all the bargains had to be done for cash, and settled, so that it cut down the gambling and the risks and so on. But by the latter part they were making money again because the competition was not very great: I suppose not long after the war started there must have been an enormous departure from non-territorials and so on into various services so that it became really, I would have thought, very much negotiated business - if you negotiated business you really took a small reasonable turn whereas if you bought or sold stock on your own, you made as much as you could out of it.  I remember when we went up before the Office of Fair Trading. They were having an investigation about [a] possible [merger]. This was some years back, and Smith Brothers made an approach to us and we were both investigated. It was quite unbelievable that their knowledge of the Stock Exchange - the jobbing system - was absolutely non-existent and they thought that the quoted price, which might be 56- 61 - that 56 was the price we bought stock at, 61 was the price we sold them at - and they couldn't believe that probably the broker going for a quote between three jobbers to get the best price would have ended up with about 58-[5]9. They thought that obviously we were just coining the money.

BA: Now we can resume. Just the period after the war and you've returned...

JB:  We were then fortunate. We were recruiting some new, young and first class dealers and in fact I was very fortunate when I became Chairman. I think we must have had one of the best dealing teams: there was Ed Puxley, who had been in the submarines, and took to the Stock Exchange like a duck to water, first class organiser, he was managing director and then he took over from me; Brian Winterflood of Winterflood Securities, Connor, Potashnick, who ran the shipping book, and Bob Wade who came from Phillips & Drew, I would have thought one of the fairly rare people who came from a broker to a jobber and then made a tremendous success of it.  So we really had, when we were taken over, later on after I had gone, by the County Bank we gave them a first class money-making team.  

BA:  And about what time did these people join the firm - late 40s, early 50s?

JB:  They were joining in, I suppose, from the 60s.  They didn't all come as a batch they came up through - Winterflood came from a broking firm, Greener Dreyfus, and I think Connor came straight to us; [Mark] Potashnick I think came straight to us, so the recruiting was.... And then we were very fortunate and they survived the Big Bang but not the team that County had bought, they seemed to get rid of them in the extraordinary way that they did. I think the capital point is something of interest in the partnership and should we do that? 

BA: Yes.

JB: Does that come into your questionnaire, later? Shall we do that later?

BA: Well let's continue working through the material that you've prepared.

JB: Well that's really... that gives a sort of picture, slightly toned down, of the in-fighting  that could go on in a partnership, and I think that really gives a general picture, I hope, of the sort of life.

BA: How did your work change when you became a partner?

JB:  Well, you became, I suppose, more of a teacher and an organiser than merely working, trying, to make money on the floor of the House. Then OK it was off your shoulders when you went home and that was that.  As a partner, although I think, that probably very sensibly most jobbers didn't take their worries home with them for good or bad. If you were elated you went back happy but if you were depressed as I said earlier you shook it off.  The next day was a new battle and everything might fit into place which was one of the exhilarating parts of life.  Certainly, it was not the form of life that a lot of people would have liked.  In your questionnaire we've got some of the things that makes a jobber and I would emphasise the fact really that the connections were not important although obviously they didn't impede anybody. [Those were] people like Dick Wilkins of Wedd - and then later Wedd Durlachers - all tremendous characters [...] Esmond Durlacher, as I said, also a very powerful figure, who did a great deal for the reputation of the jobbing system in one of its periodic bad patches.

BA:  Did the way you actually went about dealing change terribly much in the post-War period or in that respect was it very similar to the pre-War Stock Exchange?  

JB:  It was getting more professionalised then, but in a smaller way.  I think that, whereas originally it had been geared much more to servicing clients, family trusts, with a certain amount of institutional business, you were finding that the individuals were tending to certainly liquidate and either go into trusts or they needed the money or they were operating less, but the actual style of jobbing and broking was not really different.  Your sums, of course, became large and they became larger with decimalisation which was I suppose one of the things that saved the jobbers when they were going through a fairly difficult period; because the prices that we quoted and dealt at were far too close, on the whole, such was the competition, to be really commmercially  viable, and the decimalisation made it easier. Eg. if you were quoting a tuppenny price in old money.... (and I thought well no wonder everybody wants to tell you to forget the change from the old, just think in the new), you realised, of course, that a tuppeny price in the new money was 5 pence.  And you couldn't really quote much closer than a penny or tuppenny price in the senior stocks so your margins were automatical that much more realistic.  You could still deal inside, sort of half point inside and so on, but it was a great help at that time.

BA:  And as a partner did you try and pursue particular policies for the firm after the War?

JB:  I think that when - after the War we went into partnership - we were still junior partners. I took over at an unfortunate time when the market was very bad and I took over the outgoing partner's liability. When I bought my partnership I bought also with it the taxation attached to it so that although I was a partner I was deeper into debt, as it were, than before. So that took a bit of time to pay off. But after that and the markets became better and one did get the odd reasonable year. There was no change of policy. The object of the juniors was to build up their funds.

Tape 2, side 1

JB: No, I think really the point was that we required to expand more which we [did]. As I say we got these young and excellent dealers coming in which made it much easier and by then capital was being built up.  And on capital, before I go into it in any more detail, I'm sure that all jobbers would pay a mark of appreciation for the help that they received from the banks.  If you had a good reputation as such and you suddenly had a particularly big deal on and you went to the bank and said, 'Right, this is a one-off deal'. (I don't know whether you know, one borrowed from the banks by taking up stock in their name so that they had the security and they would check the valuation and so on.)  If you went up and you said: 'Well, this is a one-off one, we're not sort of, immediately doubling the size of our markets or anything but we bought this chunk of stock which we want to finance until we sell it which hopefully will be the next account', or something, they were always very helpful and very understanding. And we banked from the very early days with the old National Bank, which was an Irish Bank and changed to various shapes and sizes, until it ended up as the Royal Bank of Scotland.  And, I would say they were absolutely first class.

BA: And banks were your main source of finance when you required it?

JB: Yes. In those days, because the idea of stock-borrowing didn't exist then. Later that became a tremendous advantage to the system and not only to the jobbers, the thing being that if you were a bear of stock, there was nothing you could do about it - you'd sold it - but if you could borrow it you could then deliver it on and get the money and the firm lending the stock of course got a rate of interest. So it was really, very beneficial to the system really and made it more liquid, of course.

BA: Did the firm itself expand during the post-War period, or were you still more or less the same size?

JB: In the First War... I would have thought during the war it would have been, well, it was a much smaller firm, and I would have thought it was fairly similar to the last war because a number of the people in it certainly went to the '14-18 War, and as I say, Harry Bishop was in that one and in the second one. It began to pick up from then.  As I say, I went there in 1933. Well, 1931, which I think was [when] the last uncle had left,  we dealt in a lot more stocks but I remember taking them over, they were almost standing at nothing in those [days], quite good companies in that Slump so it must have been fairly terrifying then.  But '33 onwards, of course, it began to pick up until, I suppose, running up towards the War period. There was an increasing turnover and the country as such was emerging from the Slump.  Then there was, oddly enough, the car companies which benefitted from the start of rearmament because they were brought in to make either engines or spare parts and bits and pieces so that helped them.  

BA: So in the post-War period did you try to expand as business expanded?

JB: [When after the second war all our dealing staff had returned, at least nine of us, the firm was roughly the same size as pre-war. The expansion started some ten years later, the old guard having retired and the former junior partners having built up some capital in the firm. The main expansion started in the sixties and continued from then on].

Yes, well we began to expand in size of business and, as I say we took on a shipping book and of course there was quite a lot of new issues coming. And later on, this is jumping right ahead to the '80s, Brian Winterflood made a specialist market in the USMs which he'd handled brilliantly and which was a very useful profit-maker. [Rightly or wrongly we concentrated on profitability rather than turnover].

BA: USMs being Unlisted Securities Markets.

JB: Unlisted Securities Market which was then in its infancy. So we expanded quite a bit and we did take on more stocks as they came along.  It was always a great difficulty going into new markets.  We did go into the brewery market which had been very tightly knit between two big jobbers in the past and that was a very small part, but it was one that could have been developed later. There was a certain amount, more than a certain amount, there was quite a lot of competition and objection for jobbers going outside their previous stocks, or previous sectors - and if you just took up a stock in a sector because it was profitable then that was, I think correctly, frowned on.  If, on the other hand, you wanted to take up a sector, stores or something like that, well, OK, the jobbers didn't want you to do it, the brokers might; but very often if they got you to take up a single stock, it was merely because they'd had a row with some other jobber and you got a lot of stick from the other jobbers and not very much benefit yourself so normally one didn't.  Where you had a stock in your market which took over a stock in another market or vice-versa it was quite acceptable that you - acceptable's not the word - accepted, that it was accepted that you should deal in both until such time as the deal had either failed or been completed. Then if yours was the stock taken over usually you didn't take up the bidder, whereas, if yours was the bidder you continued to deal and the other chap didn't take up that stock.  But there were, you know, always marginal cases and jobbers storming up saying, 'I hear you're dealing in so and so, buying one of my stocks, well, I'm going to deal in', he'd look at the board and say, 'that and that of yours'.

BA: Were you generally on amicable terms with other jobbing firms?

JB: I think so.  I think I would describe it best as really, if you think in terms of the Opposition in the House of Commons.  They put up the most appalling attacks on one another there and suggestions as to faults and so on and so forth.  Outside they're really quite amicable and I think it is very much the same with the jobbing system.  On the whole, I think because the system was 
[so important that bad blood rarely broke out among the top people. Where it could happen was between go-ahead dealers competing with their rivals in other firms. This could get out of hand. Then at the partnership level the problem would get sorted out before it soured relationships. Later when the office of market officials came into being most disagreements between individuals dealers were settled before they started to escalate].

BA: And so how could you contrast your relations with jobbers with your relations with brokers?

JB:  Well, obviously you wanted to get on with brokers, to be friendly and help them and for them to help you.  [As] jobbers you [were] regarded, I think, as a necessary evil.  If you only had one jobber in a stock, brokers didn't like it very much to the degree that they felt that they were always at his mercy.  And although, I think, on the whole, if you happened to be the one chap in the stock you didn't try and rip people off because you knew if you did rip them off they'd go along to another jobber and say, 'Look you know I do a lot of business in this [stock] and I've only got so and so dealing. Would you like to start up and you know we can put some business your way'.  So if you were the one jobber you were fairly careful. Later on when the jobbing system was being looked at again we began to go through stocks and if there was a one-jobber stock somebody else would take it on, which became quite acceptable.  So I think you regarded them as necessary evils. There was a certain amount of good will between them but not always.

BA: As we go through now the '60s, '70s, right up to the point when you retire,  was the firm steadily increasing in size?

JB: [Yes, it was increasing in people, number of stocks dealt in, size of bargains and percentage of bargains done in our sector. That said, there was certainly more and bigger business to be done. Also, our capital base increased and, as I said, banking facilities were always available. I think it is relevant that in pertnerships, interest on partners capital was classified as earned income. On the other hand, nearing retirement it would be less of a worry to withdraw capital rather than leave others to use it. The Stock Exchange Council deserve great credit for recognising the problem and amending the rules so that firms could change from partnerships to become a "Limited Corporate Member". Then a percentage ofthe share capital could be sold to acceptable institutions. The newly-formed company was naturally required to abide by the rules, regulations and usages of the Stock Exchange. One of the great advantages of this was that the fluctuating profits of a partnership, which in a five year cycle differed greatly, could be ironed out.

[On average in a five-year span, you would have two good years, one poor, two adequate. Costs continued to rise via salaries, rent, Stock Exchange charges etc. Harking back to partners' meetings, one of the more interesting ones would take place at the beginning of the financial year. Expenses would be forecast with some accuracy, as outgoings would be largely predictable. Income was a very different matter. Each book would have a target set for the year based on past results, economic outlook, marketability of stocks on the book, opposition. Perhaps it could be called an "educated guess". I believe it was Montgomery who defined that as: a guess based on facts and using an intelligent interpretation of them!

[Staff performances were monitored throughout the year and at least once a year house and office staff would be interviewed. Profit sharing was organised by commission rates for seniors, both for office and House staff, and bonuses for the others].

BA:  Were you involved in any merger activity - were you taking over firms?

JB: [Not to any great extent. We took over a small firm, Philpott Jupe which had a strategically sited pitch; and Ian Cowper, a fine amateur golfer, joined us bringing with him a book in the shipping sector. We had acquired enough stocks to set up a leader book using one of our best jobbing partners, Terry Connor, to take charge. This was done through our internal resources.

[With regard to a takeover/merger that would have put Bisgood Bishop into the big league - by 1973 the number of jobbers had contracted so much that there was already official worry over the situation. This is not to say that the Stock Exchange or the Government authorities would have prevented further contraction were a good case to have been presented. Expansion would have involved the takeover of a gilt dealing firm, since we had no experience of such a specialised market. It had already been shown that however good you were jobbing in equities, it was virtually impossible - in a reasonable period - to translate those skills to being successful in the gilt market. In a merger, of course, there was always the difficulty of getting the pecking order correct among the up and coming partners and money makers vis-a-vis their opposite numbers in the other firm.

[A minor factor was that when I became chairman I was already fifty-seven years old. Therefore, however much I might, or might not, have favoured an expansion policy (and I certainly would have worked flat out for its success), I was not prepared to create a situation which if it later turned sour after I had retired, would leave others to sort out the problems].

BA: Now at this time the number of jobbing firms was contracting.

JB: It was contracting considerably.

BA: How was this, was this affecting your work on the floor? Was jobbing changing?

JB: Well, would you like to start taking that from the questionnaire?  Contraction of number of firms...  Right, I think we'll start with the reason for the large number of firms.  In the old days when there were this lot of jobbing firms, they required very little capital to the degree that they were small, they were not competitive to the big jobbers and at the end of the account they would level off their positions unless they had a very strong feeling that they wanted to be a bull or a bear.  So they would cut their liabilities at the end of the account, perhaps make a few pounds here and there and you know, enough to live on.  Now, a lot of people thought that they were sort of excrescences as it were.  I always had quite a feeling that they produced a use: certainly in the gilt market, where sizeable bargains are the name of the game and you could see that to get cluttered with a lot of small bargains every day was a nuisance to these people. I mean, in terms of turnover and profit these sort of a 1,000 War Loan and so on and so forth, were the minimum.  And so the gilt-edged jobbers, the small chaps took this business on, made a bit of profit on it and then, as I say, closed their positions at the end of the day, or at the end of a few days, because the gilts of course is cash dealing and the equities were account dealing: so the small equity chaps would close at the end of the account, so they knew exactly what they had done.  And also in those days there were a lot of small broking firms who didn't have adequate staff to cover the market and so say their head partner had got an order in we'll say the gold market, where also there were a lot of small jobbers.  Well if he went on to talk to one of the big people, he wouldn't have a clue what was going on - whether he was dealing the right price or anything.  Whereby going to one of these little jobbers who were actually in it, that jobber knew the 'touch' (which is the closest price you can get by knowing all the jobbers) and he, the broker, would then, shall we say, sell him the stock at 5 5s. and he would go on and sell it at 5 6s, or something to a big jobber and although, he would say he was giving away a bit of the client's money, he might well have been saving him money because if the broker himself had gone in to do it he might have been completely lost.  And so, I think, on the whole they were tolerated and they were usually also quite pleasant and decent people.  There was one small firm of jobbers who [that] certainly wouldn't apply to, and, of course, they went fairly shortly, out of business. But they had this sort of business and the head partner then thought he'd start to get a bit larger and he then began to actually impinge on the market, which was fair enough, if he was any good; but also at the end of the account he expected to be treated as a small chap and just to close on your price [...] As you probably know, jobbers were able to take up stock  at the end of the account on the ten bob stamp.  It became 50p later on in life.  And so when brokers wanted to do 'cash and new' you bought the stock from them.  It only cost you the interest because you were taking it up on your 50p stamp and you sold it on at a price that you regarded that you could get away with and what the broker regarded as reasonable to do and he carried it over to the next account. In the old days, we can come back to Contangos which we used to do, but anyway, this chap then started taking up - doing this - on tighter terms, getting always inside what one of the market makers would say he'd do it.  So you'd have said, 'OK, well it will cost you 4 1/2d.', or something. He would say, 'What ever they tell you, I'll do it inside', you see.  So he'd do it for 4d. or 3d 3 farthings and I'm not sure that he wasn't also borrowing the money on rather strange terms, but that's immaterial, but anyway the jobbers got fed up so they said, 'OK you're either a jobber or you're not', so in due course he pulled out.  But by and large, I would say that they did perform a function in those days and in fact the whole thing - the Stock Exchange - kept evolving because as I say there were a lot gifted amateurs and, likewise Council, would take a lot of stick, as everybody does who has to make decisions which people don't like! But they were not, I don't think, the obstructive people they were supposed to be and, when things became necessary to move, they were prepared to accept the moves and move with it.  And so over a period of time these people dropped out or they got taken over or they joined something else or if they were a one man band they'd probably made enough to retire and go out altogether.

BA: Would there be people to take their place or do you mean they would slowly disappear.

JB: No, they slowly disappeared; some of them got taken over if ... I would've said that the small ones disappeared, went out when they'd enough to retire on; some of the small-medium ones packed up, and perhaps one or two of the junior partners or dealers would be placed somewhere else with a jobbing firm and would be entitled to take their stocks with them and either they would run them or and if the firm that took them over thought well 'Yes, this is a market', they could build up on it and if they thought it wasn't worth it they'd throw their stocks out, but put the chap on to existing books so he had a job.

BA: About when would all these people have disappeared?

JB: I suppose by the [late] '50s we were coming down to [retrenchment]  The smaller to mediums were still there and they were then starting to get absorbed into the bigger ones.  The really small ones like I've explained, and they were just sort of almost doing the broker's business, or if a broker had a put through, and if he was friendly with one of these little chaps, he'd give him the put through and nobody minded very much if it was 500 shares. Of course, you know if it was 120,000 then the  market maker would object because the price used was obviously on what he was making not what the little fella was. So I think probably by the end in the equities there were probably 5 medium to large firms of which we would be at the smaller end of the five. 

BA: And Bisgood Bishop was never in that category of a small jobber?

JB: No.

BA: It had always acted as a market maker?

JB: Well, it was a market maker, as I say, particularly in the days when it started with the..., I suppose it was a bit small then but, it was small but it was a market-maker.  Although we did a lot of the business, as I say, undoing it with Birmingham where there was an existing market in the [motors], because that's where the motor industry was based, and components. And one thinks of sort of the present days with all these extraordinary regulations and so on and so forth, supposedly to protect the small person, which, of course one can have views on: but, I was told, my uncle - who as I say, although when they'd gone, they kept the name still Bisgood Bishop because it was a good one - but the brokers would go to my uncle and say, particularly the second one, Bertram, 'Here is a list of the orders I've got. Would you do them for me' and knowing quite well that he'd do them. If necessary he'd say, 'Well, I've done this, I've had to deal very tight on this and I've taken a bit more on that', but they knew that he would do it, just take them on fairly. Then, of course, they began to build it up and after the war - 1919 - Harry Bishop became a partner, who was a very strong if not to say aggressive character and then Strachan who came from Hadow and Turner, which was a medium sized firm in those days, one of the iron and steel people, [joined the firm].  They began market making and then Coventry and Birmingham began to come to us instead of the other way round.

BA: So by the '50s as you say, most of the smaller firms had disapeared.

JB: Yes, [by the late fifties many of the smaller firms had departed].

BA: So that left you with a group of...

JB: A group of medium-size and, you know, the larger firms [with a few small firms remaining].

BA: And was there a process of thinning out among that group or did they all go on?

JB: Yes, it went on thinning and merging until, as I say, in the end there were the five larger firms and then some specialist firms.

BA: What distinquished the firms that survived from the firms that didn't?

JB: Fate and the senior partners, I suppose.  As I say, [in] our time, when the Bishops had a great chunk of the money, which was why they ran the thing as they wanted to, and [when we became senior partners] we were just fortunate enough to be getting back into cash ourselves, which we left in the firm, you know sort of for this time, because we intended to go on.  We certainly didn't want to be taken over, in those days and disappear.  Possibly we had always been slightly bloody-minded in some ways.  Other people said, 'Well, we've done jolly well,' - the top people - 'We can get out now with our money and do whatever we want to do.'  Some of them had a great sense of responsibility and wouldn't do it till they'd placed their people. Others - there was one firm - a chap came back from holiday and went to his pitch - jobbers always had their permanent place where they could be found - and sat down and waited for his jobbing books to come and somebody went up and said 'what on earth?', and sort of went by, and [he] said, 'Well, that's very odd'. Somebody else said, 'Well, what are you waiting for?' He said,' well I don't know, I'm waiting for my jobbing book'.  He said, 'Its no good the firm packed up last week!'

BA: Now at some point Bisgood Bishop ceased to be a partnership and became a company.

JB: Yes.

BA: Can you say a little bit about that?

JB: Yes.

BA: Reasons for that? When did it actually happen?

JB: '71 [an unlimited company]. Then we made a placing with the three institutions [having reregistered in] '72.  Perhaps  I could come onto this bit about the capital here.  I'm reading now because I think this is more clearly written than I would do it.  'The major problems were encounted with the necessity to trade as a partnership under old Stock Exchange rules.  All profits earned, whether drawn by partners or retained in the business were subject to income tax, surtax, etc at very high rates. So the building up of capital for the expansion of the business and paying out capital belonging to retiring partners, often of a substantial part of the money, was exceptionally difficult.  This position was recognised by the Stock Exchange and so the firms were allowed to reconstitute as unlimited partners which gave them corporate status for these purposes, but maintaining unlimited personal liability as directors'. So instead of partners we became directors.  And then it moved forward to the limited liability companies and outside ownership so we formed a company, created the shares in it, and then found a man, first class, Mr Sclater - I don't know whether you've come across him.  He was with Williams and Glyns as they were by that time and we'd approached him with this [offer]. He was one of the trustees of the Grosvenor Estate and so on and I think he's the chairman of various companies now.  And so they brought in the Legal and General and British and Commonwealth and they took a ten per cent stake each.  So that's how we set it up.  We had thought at one time that possibly there would be more interchange of ideas between shareholders and the company, as such, with the dealings.  But I think, from their point of view this was a new thing and they wanted to keep it completely separate.  It was an investment and as they might have bought Rio Tinto or BP, they bought [a stake] and didn't really want to go beyond that. I think possibly we would have run into some complications if we'd been doing their dealing for them.  One might have caused a lot of chaos so [ruffled feathers would be more apt].

Tape 2 Side 2

JB: So as well as coming to lunch they came to the Annual General Meeting and we could always go and talk to them, particularly Mr Sclater, but we were almost virtually at arms length.  [We kept them well-informed.  In return they always gave support and encouragement.]

BA:  They were able to provide you with necessary capital when required?

JB: We didn't approach them for cash, but I should think really that they weren't there for that object. They were taking that as a sighting shot for the eventual 'big bang' and so on and it was a miniscule amount of money that they had [invested] then, but obviously with that backing, the banks would have been happier to lend money if we needed it.  We always kept fairly strictly within our limits and if we said we would be closing a loan at any time we always did so.  So, as I've said, at the beginning virtually we had complete support all the times that I can remember and going back to Mr Archer's days, the famous National Bank manager, [they gave us] first class help and they trusted us and we didn't let them down and it worked the other way round so it was very satisfactory. And that's why, I think that the capital problems were not as great as people always assumed in the jobbing system.  If you had unlimited access to capital, I think it would have been very dangerous because you'd have people possibly wanting to win their spurs and dealing in larger amounts than made sense [at the price]. I've always had the feeling that any fool could be the market if he made the wrong price long enough and large enough. And one didn't want [that]. One [was] wanting to encourage people to take on sizeable business obviously and always be prepared to deal in size but not to make it so ridiculous that just for the sake of prestige they were going to lose money on it.  

BA: Now at some point you became Chairman.  Were you the first Chairman of Bisgood Bishop?

JB: Yes.

BA: And then towards the end of the 1970s were you thinking about retiring?

JB:  Yes, I think by then, I was closing 65... so that I was of a different generation.  We had a first class team in existence, all raring to go and I felt that the thing would be to nurse it till the change happened.  Then it would be more sensible that I could go then knowing that it would go very well and they would be much more competent to deal in the new world than I would be. So my object rather was to keep it in play until that happened.  I've seen people who have stayed on too long. I hope I didn't. In many ways they became a nuisance and were tolerated which was not a thing that I would have liked to have been and I thought well right this is my time to go now and its all set up to run, that's fine.

BA: Reviewing your career as a partner after the War how did the Stock Exchange change?  Did the character of the Stock Exchange change?

JB: It changed slowly to the degree that it became less personal, and the fun was beginning to go out of it.  There was much more the drive for the institutional businesses and what one found particularly that the brokers of one's own generation were so busy in their offices that they very rarely came onto the floor of the house so that one lost contact with them, unless either you saw them socially or perhaps wanted to go and talk to them about business or to sort out some problem.  This gave rise to the importance of the senior dealer, who very often didn't get partnership status in the brokers until very late but he was, as regards the floor of the house and the jobbing of course far more important by then than the partners. There were two there: there was Charles Purnell of Cazenove and Perkins of Grieveson Grant the two that stand to mind; Colonel Side of De Zoete [also and others]. Charles Purnell [...] was doing enormous business which Cazenove had in very, very large size, and I think it was a jobber who mentioned to one of the Cazenove partners: 'Well really, you ought to make him a partner [...].  He is doing this business and it would be better'. So he became a partner.  I don't know whether it's true but I think it was. I had it on good authority.

BA: Right up to the end you were dealing, yourself, on the Floor?

JB: I was dealing until fairly late on, and then occasionally if somebody was away I'd stand in, but I'd seen the disasters which a senior partner could do by going on dealing too long. The one I can remember: there were two new issues on the same day and one of the partners decided he would do it and he was dealing with Cazenove and I kept trying to interrupt.  They were closetted on the seat and I was running my book sort of a yard away, and eventually I said, 'Well, you're dealing in the wrong stock'.  So my head partner nearly blasted me off the face of the earth and we checked it and he was dealing in the wrong stock so that had to be undone. And there were one or two other cases because old Charles Purnell was a contemporary of our head partner and he would very often have large business and he would go up to him and say: 'Ah, Harry I waited until your chaps had gone to lunch,  far sooner deal with you for old times.'  And when you came back you could see.... 'God what's happened now'; pick up the book and something absolutely terrible had happened. He'd sort of completely undone everything I'd been trying to do.  So I thought well, Brian Winterflood had been working with me and he'd built up - we used to deal in garages, which was a fairly small part, and when he was with me he specialised in that and built it up into a great money spinner as he did later on with USM - so I thought it was more sensible to drop out gracefully and not suddenly interfere and wreck the thing.  
 
BA: Let's now cover some of those additional points on which  you've prepared a few notes?

JB: One of your topics was the type of people who became jobbers.  I think really the answer is anyone. Any type if they could make money.  You had, for instance, jobbers like Sir Nigel Mordaunt, who was a baronet, [the] Durlachers, Dick Wilkins and so on, and were all in their way successful because there were many ways in which one can succeed as a jobber. It's not a stereo type - the jobber. We picked up a chap who had been a petrol pump attendant and one of our directors was so impressed with his speed, I think it was just at the time of change to decimalisation or litres but he said, 'Well, you know, you've really got the brain, would you like to come on the Stock Exchange', and he did extremely well.  So there were people, you know, from every type and  - classes I never believed in - but from very different backgrounds and if they could make the money, that was fair enough.  The qualities: I think you had to have a reputation for honesty, was one of the most important and for discretion, because if a broker felt his business was being blabbed about then he wouldn't come back again, quite obviously, so I think that was important. Then on oneself as a jobber, you had to have to be able to make up your mind very quickly, far faster than a computer - if a takeover suddenly got announced on the screen, you had to feed into your brain your position, the position of your opposition, money involved and spin out a price within seconds, because you would have perhaps twenty or thirty people shouting round you, most of them just wanted the price but one or two of them might have known what they wanted to do and so you had to get, you probably made a slightly wider price, and then narrowed it as you got the feel that the price was right.  I think also you had to have bottle, because if you had a bad position, it was no good crying over it; it was no good cutting it straight away. If it was a bad one, Ok you had to cut it and start again. If you thought it was right you had the bottle to stick with it and nurse it along, and bide the time. The only trouble was occasionally that if it was too big then you had to free your cash position because we, (and I think probably most firms did) you had a very rough idea of how much money would be allocated to each sector and if they over ran it for a time, OK you make arrangements, if on the other hand it was permanently and obviously something going wrong then you had to as a partner say, 'Right OK you could take some action on that and cut this position back whether they liked it or not'.  Usually they didn't but it was too bad.  

BA: How would you go about doing that?

JB: Well, I think it was the same.  I was quite sure the Ford deal was going to be taken over - the British Ford. My information was very good.  I had a bull position, I'd taken money for the call which I'd covered in full, and I'd taken some double money which I'd also covered that.  So I had much too much exposure to this takeover of Ford.  And the head partner at the time, decided it was too big anyway, so I then had to cut the position. He just said, 'Cut it', and if the head partner said 'cut it' - I've had to do it myself in my time - you just had to cut it.  It was a great pity, I didn't lose any money on it but it was a coup which didn't happen.

BA:  Did you mark your price down?

JB: I didn't mark it down but I found people who wanted to buy.  There were two firms in England, I think they were probably buying some for the Americans. And so I offered them stock and told them, you know, I could sell a bit and if they wanted to buy, come and see me.  So it didn't take very long, actually, I suppose it was two or three days, we got the [position] down to what was then accepted as being OK.

BA: So you were actually able to go out and find buyers.  You had buyers in mind?

JB: Yes, well yes.  I knew who were buying, because one of them was well-connected.

BA: So jobbing .... simply wasn't a case of waiting for them to come to you?

JB: There was a two-way stretch. If you wanted to make business, which would usually mean that you were going to change the price - the market price - because you would then go and find - see - a broker that you thought might be interested and you could say, 'They're 6, 6 and a half to three quarters, well I've got a seller, I might be able to sell at middle price,' which would be 6 and 5/8ths, and the chap [might have] said, 'No, I'll give you 6. 12s.'  So thus you would be making business or he would come along to you. If he had business he would approach the market.  But you could make business by going to see and by making different propositions.  Which is what I had to do.

BA:  You said that your information on Ford was good.  What were your sources of information?  Just generally.

JB: The chap who was buying them said, 'I think my chap knows what he's doing'.  This was also a thing that happened in those days, I suppose everybody now would be up before the beaks for insider trading but in the old days, of course, markets were made in certain stocks very often by the directors dealing.  In fact they might buy or sell shares, not necessarily taking advantage of the market, but sometimes they knew something was going to happen, and the broker - you would deal with him - he would buy a couple of thousand shares and as he was walking off the pitch and [He'd say:] 'Do you know anything about these?  That's not a good bargain you've done', and you said, 'Right, thanks very much.' And you'd say, right I'll cut a couple hundred, 250, 500 on this, go on the other tack, if you knew the chap was genuine and trying to help you.  And equally, of course, where directors had quite a large stake in the business which I suppose they'd built up; it was very useful if you had a buyer or a seller, you could go along to what was known as the 'shop' broker and say, 'Well look I've got some business in this; can you interest anybody on the board?' And he would go along and say, 'Right there's a price at such and such but there's a big buyer and if you'd like to offer some stock, I'll see what I can get'. And I suppose, if a director had a 100,000 shares and was thinking of buying a new car, he'd say, 'Well, OK I'll sell 10,000 at such and such a price'.  So you immediately had a limit on which you could build the business, or you might say. 'Right, well, thanks very much I'll take those', and then when the price went down a month later you'd remember at the back of your mind, this chap had sold at, what shall we say, 76s. and they were now 69 bob offered. You'd go to the broker and say, 'Well look, you sold them at 76 bob, they're 69 bob offered and I'll offer you 10,000. I'd like to approach him'.  So he would go off; [it] worked very well - the director had made some money, the broker had made some commission and you were turning your business over - but of course that, I fear, is no longer the case, in fact I'm no sure they accept limits now.

BA: They being the....

JB: Well, market makers. But in the old days limits on your book were very useful, firm limits especially, because you knew they were there and you could deal on them; indicated limits, at least it gave you some idea if the market went better where you might find shares or went down, where you might find somebody who wanted to buy them.

BA: And this all helped to keep the market liquid?  

JB: All kept the market liquid. 

BA; Were there any other now points which you...[had prepared some notes on]?

JB: As I was saying, virtually all our partners really from 1931 had all made their way through the ranks, I think without any influence but merely because they were able to make money.  

BA: So again looking back over your career, how would you describe the character of the different markets in the Stock Exchange?

JB: Well, I think they all had a character of their own.  If you think of the gilt market, where obviously it was very much top-hatted, certainly in the old days, involving the government and the government broker, discount houses; and it was a, shall we say, a more restrained and gentlemanly market. Whereas if you take the gold market and the transatlantic market - Americans - there would be tremendous amount of excitment in the dealing, partly it was generated to make the business, partly because the movements could be very violent, much more violent than they would be in the gilts.  There was also a smaller sector of the market; I'm thinking in particular, of leisure where the 'shop' operated a lot. in other words stock such as Butlins, and in the early days, Ladbroke's and these sort of people.  The business was very much on their way up done by the people connected with the company so that that had it's own type of market and the 'shop' was often quite active in it.  The oil market, you had the mixed bag because you had a lot of English investment, good institutions interested - and world leaders like, what became BP,the old Anglo-Iranian, Shell, Ultramar - and also there were continental interests in that and, again, transatlantic. So you had a general interest, a real international market was there.  In the industrials you had a very mixed bag because it covered such a wide range. You had small companies, every type of company and of course the very large ones. Imperial Chemical, I suppose, were always the share that everybody knew about on the Stock Exchange. And in those days if they moved more than tuppence or thrupence in a day it felt the world had come to an end, it was just so steady in those markets.  You had the brewery market, which was again, I suppose, one of the ones that was very lucrative. There were two big jobbers in it. And the build-up, first of all build-up for the takeovers; and then there were companies, Whitbread particularly, [which] were regarded as what I think they call White Knights nowadays. [The operation was called the Whitbread umbrella. They bought stakes in companies that might be vulnerable to a bid. Thus it would be more difficult for a predator to succeed in a hostile takeover. Bad luck, perhaps, for the shareholders. When bids arrived for the companies a tremendous turnover was created. 

[In general, jobbers dealing in size would keep, as far as possible, their business under wraps. This would prevent their opposition from spoiling their position. A jobber did not have to deal with another jobber on a price he was quoting to brokers. The old principle was that only the client, the broker and the jobber who dealt should know the price and size of the bargain. This system worked fairly well. In my view it prevented some of the more violent price fluctuations that occur since the new system evolved.

[I don't remember that there was much of an "open outcry market"; perhaps in the mining market and in foreign stocks. Occasionally when Dunlop declared its dividend] - there was one jobber who always used to go into the middle and shout loudly what he thought would be the right price for a minute or two before retiring.  I think it was not really so much with the intention of dealing particularly as keeping the tradition going and saying he was the market in the shares. I think one should perhaps make the comment that as broking firms got larger, employing more people, they tended to have a dealer, who was well versed in these markets.  Smaller firms: there were one or two characters who, quite incredible to my mind, that they knew the 'touch' price and could go and deal in any market. They could go and deal in the gilt market and again go into the gold market which was something completely different - altogether wider prices and very funny prices and so on, trying to catch out the clients - and in the end it bacame very necessary for brokers of any size to have experts in the various markets.

BA: Have we covered most of the markets?

JB: Those are the ones that I think stand out. There was an Australian market, which frankly I don't know anything about, and I never came into contact with it; but I would have said it had much the sort of characteristics of the South African mining market but in a much smaller way and except when you had Poseidon! Over Christmas when it was moving at this incredible rate people went out and sort of had their first drink of Christmas Eve, came back, found the price had risen so much, they decided to get back and have a second, by the time they had come back from that  they found it had dropped so they had to go back and have a third to drown their sorrows. I suppose there were a few shares like that but I think that covers the markets.  As I say with the people in them, they did tend to make the type of market.

BA:  Now there was something you wanted to say about relations with brokers.

JB: Yes. Obviously you had to be able to get on with brokers otherwise [you didn't get business]. They were your source of business and I think, although it could be fairly said that they did deal on the best terms for the client, equally if they had the choice of dealing and they disliked you intensely, and they could do as well elsewhere, or even if they couldn't on the price quoted, they'd open to the other jobber and say, 'Well, Joe Bloggs is bidding a penny ha'penny more than you do, do you want to compete with him?'  (They weren't suppose to open jobbers books but from time to time they did.)  Then the jobber would say, 'Oh yes, of course, I will'.  I think in a few cases, I think, brokers and jobbers got perhaps a bit too close but that was the rub of the green.  Funnily enough, I don't think that the Catholics tended to deal with the Catholics any more than anyone else, whether that's because they were good dealers or not....

BA: What were the problems with brokers becoming too close to jobbers?

JB: Jobbers are fairly sensitive in the way of reacting violently to anything they feel or think - not necessarily true, but actually what they think might be true - that they would be very hurt if they felt one broker was deliberately feeding all his business to somebody else and they weren't getting a sniff of it.  They could [create] ructions. If, on the other hand, that broker was doing the best for the client, there was nothing the jobber could do, so it comes back to the thing that you had to be fairly friendly with the brokers because, after all, they were where your business was coming from. You couldn't as a jobber, certainly officially, you couldn't go outside to an operator who was a member of the public or an institution and set up a deal, so you rather had to wait for it to come via the broker. And I think that also was sensible... I always tried to make people welcome as you would, coming onto your pitch, same as they come into your house; you try and help them.  There were certain brokers that you knew were going to fleece you if they could.  Well, that was fair enough and if you were fool enough to fall for it that was your fault.  I remember learning that very early in my career as a dealer. [There was a very unmarketable stock in which I dealt. I had no shares on the book and knew of no sellers. There was a very keen buyer and I finally did his order, selling him - I think - 1500 shares a penny or so above the price quoted in a couple of hundred. He gave me his word he would not press for delivery and we dealt N.T.P. - not to press - which meant that the broker should tell the client that the jobber did not have the stock and would therefore be unable to deliver on account day. N.B.I - no buying in - was a much surer protection. It prevented the broker using the Stock Exchange machinery whereby an official would bid for the stock - and it would be supplied for immediate delivery eg. by a broker or rival jobber; the bargain would be closed, if necessary well above the market price and the jobber took the loss between the closing price and the price at which he had originally sold it. If my memory 
serves back those years, the stock was Austin 20 per cent preferred]. At the end of the account I was rather shaken when my office rang up and said: 'Oh so and so is pressing for the delivery of these Austin twenties'.  So I said, 'Oh, bloody nonsense, he told me he wouldn't do it, I told him I didn't have them'.  So I sent for him and he came up and said, 'Oh yes, my client wants these shares'. So I said, 'Well, you gave me your word you wouldn't [press]'.  He said, 'My boy, you never trust my word. It'll save you a lot of money!' So I eventually cut 3 shillings a share on the 1500 and I learnt my lesson, so I reckon that over the years it was cheap at the price.

BA: How did you get out of that situation?

JB: Well, I found somebody who had the stock, they were I think 28 shillings, and he said, 'Well, I'll sell 1500 at 31 shillings' and [they were cum], so I bought the 1500 and said 'Thanks very much' and cut my throat.

BA: It might be good at this point to explain contangos.

JB: Oh yes.  In the old days at the end of the account.... In fact I'm not sure if there was 'cash and new', but I remember the contangos because we used to have to come up on the Saturday, on the last day of the account when we were open on Saturday, every fortnight, and...

[Interview continues on first part of Tape 1, side 1]

Part Two of interview (Jimmy Bisgood): 15 January 1990

Tape 3, side 1

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

JB: Yes. I was born on 2 January 1916, [in] Roehampton in Surrey, rather late arrival after I had three elder sisters.

BA: And who were your parents?

JB: My father was J.K. Bisgood, who had his own insurance agency, and my mother was Miss O'Connor and as a matter of interest her sister married E.F. Bisgood, who was the first Bisgood to be on the Stock Exchange.

BA: Where did they send you to school?

JB: Two Catholic schools - I went to St. Augustine's in Ramsgate - 1925-29 - and then I went on, I'd rather wanted to go to Ampleforth because my friends were going there, but I went to Downside because the family had associations with Somerset and I was there 1929 to 1933.

BA: What happened when you finished school?

JB: Well, that was the time to start looking for a job as I was then seventeen.  It wasn't a particularly promising time to be looking for jobs - the country was just getting out of the Slump - and when I was at school I had been promised an interview to Willis Faber, which through a somewhat serious disagreement between the headmaster and myself, he didn't give me the interview.  I didn't expect him necessarily to recommend me - that was his affair - but he had promised the interview and I didn't have it so I was without a [job and needed] the line to look for.  Two other things I'd thought of doing was to become a doctor or become a solicitor but both of these things would have required money to see me through and I thought I really needed to get something which would bring an income; and it was suggested that I looked at the idea of going on the Stock Exchange, which I hadn't thought of.  I bought a book (which in those days was fairly cheap, I suppose about 6d.) on the Stock Exchange and went up to the Roehampton Cricket Ground and sat in the sun and read that the Stock Exchange was a place where people bought what they didn't want and sold what they didn't have. Anyway, despite that I thought I'd better go for an interview, which I did.  I suppose with the conceit of youth I thought that they were reasonably lucky to have me: I'd taken higher certificates for two years, I was in the Cricket XI for two years, 2nd XV in rugger, boxing colours and so on. I saw Mr Bishop and he said, 'Well, I suppose I'll consider employing you but you realise that you're very little use to yourself and probably no use at all to us.  Come up on Monday'.  I'd only just started my Summer holidays so I thought that was a fair introduction to business life.

BA: Had you seen much of your uncles who were in the firm, in the course of your life at home or...?

JB: Not really, I didn't know them very well and I think that they possibly looked upon me as the black sheep of the family in those days.

BA: Bisgood was the firm you naturally thought about applying for a job to?

JB: That's right because my father had, it was a large family, the boys had always helped one another and my father had been of some help at times to the Bisgoods on the Stock Exchange when they were first beginning - I think that's probably how it started.  But they had all retired before I went up there.

BA: What can you tell me about the actual history of the firm, before you joined it?

JB: Before I joined it will obviously be fairly sketchy and not guaranteed accurate, but the first Bisgood to go on the Stock Exchange was E.F. Bisgood who was a broker. He'd been a chartered accountant and he'd been in South Africa.  When he came back he went to do the books of a stockbroker and he was not at all impressed by the intelligence of the stockbroker and when he realised the profit that the stockbroker had made he thought, 'Well, I'm in the wrong business.  If he can make that sort of money I can and more'.  So he set up his own business and it was quite successful; and then he suggested [to...] one of his brothers, Eustace, that there was scope for jobbers to start up on the Stock Exchange. There were, of course, other jobbers but he thought that the Stock Exchange was a growth industry and Eustace set up his jobbing business and after the end of the War - the First World War - he brought in one of his brothers who'd trained as a solicitor and (that was Bertram Bisgood) and it became Bisgood Brothers. And then they brought into partnership H.G. Bishop who had been in the firm before who was a very forceful character.  Then, later on, they brought in Harold Strachan who had been with a firm called Hadow & Turner and when I went there there were: Henry Bishop, Harold Strachan, Frank Bishop, Simmonds who was a very good jobber, Louis Bishop; and then before the War - before the Second World War obviously - they brought into partnership, Howard Taylor, who I think his first claim to fame was he'd bowled Sutcliffe with his first ball in County Cricket, and then just before the War they brought Capper into partnership.

BA: What markets had your uncles been dealing in?

JB: We were mainly English industrials based on the motor car industry - famous old names which sadly have disappeared - and Dunlop, of course, Dunlop was to them in those days what Morris became to us in 1936.

BA: Was there anything distinctive about Bisgood Bishop as a jobbing firm when you joined it or was it fairly typical of the jobbing firms of the period?

JB: I think it was fairly typical of the small and medium ones.  Although they were small to medium, they very often had a niche [in] which they were very much the market - and the markets were more centralised in those days, whereas as the years passed, particularly through mergers and takeovers, people started dealing in many different markets, but in those days the markets were more clearly defined. 

BA: And about how big was the actual office itself (you've mentioned the partners)?  About how many people were employed?

JB: We must have had, I should think, a short thirty.

BA: Can you remember the offices at the time?

JB: Yes.  I went to.... Pinners Hall, was the first one.  They were a nice set of offices and we used to guess what our bonus might be as to whether we had gone up two floors or down two floors, depending on how we were doing.  They were very good offices.  Then we went later on to Gresham House which we got at a very reasonable rent because it was about to be pulled down, but the planning permission was held up  so that was very satisfactory, and we ended up in Wood Street in a nice set of offices there.

BA: What were the reasons why you moved from one office to the other?

JB: Usually, on the question of the lease, the price had been going up violently, or sometimes another firm in the building would want to expand and you were offered reasonable compensation for moving.  There were very few firms that really had freeholds in those days.

BA: About how many rooms were you occupying?

JB: The one I went to, when I first went there, there was a main office - open plan - and then a short corridor, there was a head partner's room and then a dealing room, but everything was really in the general office which was fairly good because it meant the office manager could oversee everything that was happening.

BA: What actually went on in the dealing room?

JB: The dealing room was one of the things, I suppose, which had always been an expensive habit which was an essential one to the degree that nearly all the dealing was done on the floor of the house. So they went down at nine o'clock and came back at 3.30 or whatever hour after the house had closed.  It was, therefore, used if: supposing there had been a big issue, a new issue, which were alotment letters - which would mean that you would get almost suitcases of stuff coming in - so the office staff dealing with alotment letters would take over the dealing room while the dealers were down in the house, so it was very useful for that.  Then, after the house closed, the dealers came back and dealt as long as anybody wanted their services.  

BA: They did that over the telephone?

JB: They did that over the telephone.  Occasionally, very, very occasionally, if it was a big deal or a particularly tricky one, a broker might come up to the office or for that matter he might ring up and say, 'I'd like to speak to so and so and I'd like him to come over to my office'.  So you thought, 'well, probably obviously something cooking there - he's not asking me to test a new type of tea', and so if he specified the chap would go along.  That, oddly enough, is how the main bust up with Bishop and Strachan happened.  Harry Bishop was in the war and Strachan was [acting] head partner - he was a man of ability and great charm - and brokers who obviously he had been dealing with during the war tended to regard him as the person to approach. And after the War Harry Bishop was determined to make himself again quite clearly the boss. And when a broker asked Harold Strachan again to see him about a new issue, Harry Bishop said it was quite wrong, that he was the head partner and he would go and I think the broker said he wanted to see Strachan and he didn't want to see anybody else.  So that finished the situation.  I think Strachan to his credit wasn't prepared to really test it out and the two most influential partners then, Howard Taylor and Capper, were prepared to side with Harry Bishop (although Capper was Strachan's cousin) and Strachan thought,  'Well, I won't go down to the other dealers', I suppose myself, [and] Len King - we'd been the two senior dealers before the War and we'd just been made partners in '46 - no we were members in '46 and he then retired gracefully, which I was very sad [about] in many ways.

BA: Were there other cases of tensions occurring between partners who had gone off to the War and came back to their firms and those who'd stayed behind?  It seems like a very natural thing that would happen.

JB: I think probably not so much the partners who'd done it, I think [more] probably the dealers who'd been a fairly minor cog in peace time. Discipline and respect in offices, I think, was fairly good providing the leadership was good and certainly, whatever his faults, Harry Bishop was a distinct leader.  After you'd [...] travelled round various parts of the world and shot and been shot at, you came back with a rather greater feeling of worth which probably wasn't reciprocated by the senior people because they still looked upon you as the junior people that you had been in 1939,  and one came back in 1944 with rather different ideas.  I think on the whole, I think most firms sorted themselves out.  Obviously [there were] the odd dust ups and people did move around a bit, but eventually, [firms sorted themselves out] because it had been... I think it was very civilised, although people said it was a jungle. I think there were very civilised people in the jungle.

BA: Well let's go back to 1933, when you joined the firm.  What was your first job?

JB: My first job was to make the tea and I've always felt that they've never had better tea than when I was there. I was then promoted to addressing envelopes and then I started to move round to give a hand in the various departments which were split up, which was good because a number of the people who were heads of those departments eventually became partners in the firm and one [was] also doing that and working on alotment letters [and] transfers - I never mastered the comptometer I must admit, being the forerunner of the computer, which I never attempted to master - but at least you knew how the office worked and later on if you knew what you wanted you could always see that it was done. Until the computers came in when it did change, it was very useful to know.

BA: Can you explain what the comptometer was, if not exactly how it worked?

JB: Yes, it was..., I had been brought up on fractions - vulgar fractions, I think they were called in those days - and the comptometer was the thing that worked on decimals which I didn't understand.  And the chap running it explained to me how much easier it was using the decimal system - basically it was working out the valuation for a number of shares and the price which had been done.  I mean obviously a hundred shares at œ1 was fairly simple but 797 shares at 32s. 8 1/4d. on the comptometer was [done in] a split second as it were, tapped out, whereas with the best will in the world it would take quite a few minutes to do it through the brain unless you were a genius.  

BA: Was this a standard piece of office equipment in all jobbing firms?

JB: I would have thought so and I would have thought broking firms too.  

BA: And what did you progress to after moving round the different departments in the office?

JB: And then I was lucky.  There was a vacancy in the house when Howard Taylor was made up to a partner. Capper, I think, had been doing the checking at that time and so he went in as a blue button (which I'll explain when we come to that) and so I went as the junior checking clerk.  This was again marvellous experience.  You went into the basement;  the jobbers sat with their book of bargains open - if you were sitting near another jobber, not too open in case he was looking over your shoulder to see what you'd been doing - and the brokers came up and checked the bargains that they had done.  You had your book and importantly you didn't tick it you initialed it so that if there was [a] mistake, that you'd checked it wrongly, you couldn't put it off [by saying] 'Well it wasn't my tick', there was your signature on it.  And also you made friends there who you would meet later on because when they went into the House... you went into the House and you progressed on like that.  Then there was a chance for another blue button - Capper was made a dealer - and as I was expert probably in nothing of the various departments where the bosses of these various departments had been for some years, I got the chance of going into the house and that marvellous feel the first day you went in. It was emphasized very stongly that you were nothing, members could push you out of the way, kick you if you got in their way, if it was your fault you could be reported to the committee.  There was a chap who was a classic.  I regret to say that he was a jobber - I think he must have been very short-sighted - but he was really very rude and unpleasant to blue buttons, but I suppose the blue buttons of brokers were more sedate.  Blue buttons of jobbers were rushing at speed to be first with a bid or offer of stock and he would suddenly grab them, hold them up and ask the name and firm and complain and so on - I think his bark was always worse than his bite but it certainly was very off-putting.  I then looked round - by now I had decided that the Stock Exchange was going to be my life and I had to make a success of it - at the various books. The partners had books which were their specialised markets and to my mind, Strachan, who had the motor book was the obvious chap to attach myself to:  a) because I liked and admired him very much; and b) I felt I could be more useful there than with some of the others.  [With] some of the others you could see the market had changed - I'm not saying immediately, but while I was still a blue button - you could see that the market had changed and supposing they had a selling limit and you felt they really ought to go and bid it because the market was looking good; it would be about five minutes after everybody else they would decide perhaps they ought to do something about it and you knew it was a waste of time. Obviously you had to go but you didn't wait for an answer.  [When] Strachan sent you on something, I always tried to get an answer - an intelligent answer - back and so I became more and more involved in that side: I virtually ran the errands as well as I could for anybody else but tried to bring back the gen for the motor book.  

I think as a matter of interest, here one might say a word about the waiters.  There were various stands where brokers could be called on the floor of the Stock Exchange and most of the bigger firms would certainly have people available there, and unless you knew the person you wanted ... was in the office, in which case you could probably do it by telephone you'd go off, to the stand which was in charge of a waiter and he would have his top hat and his blue suit and red cuffs and badge of office and so on.  [If] you got on well with them, they were extremely valuable.  They would then call out the name of the broker that you wanted. Some people tended rather to look down on them, not realising that the one on our stand was a JP and various others of them were in charge of banquets and so on ... and if you got on well and treated them nicely they were extremely good.  I won't say that if you were second or third in the queue for a broker and you waited a few seconds and then if he hadn't come you wrote out a slip what you wanted to do, that if you got on with them they would give your slip and say 'First' to the brokers so you were the first man in; equally they'd say 'Oh he's just out, you want so and so, yes, he's just gone over to Slater's for a drink.'  So you nipped across the road into Slater's, saw the chap you wanted, got your message or received your information and came back.  As a blue button, of course you couldn't deal, so that when you went to bid for stock the chap would say, 'Yes, I am a seller of that and I will come over and confirm it with the dealer', and after a time they began to accept that they wouldn't have to go over to confirm it because you'd obviously got it right.  I [once] had an embarassing experience.  As I say, Strachan occasionally used to go out or be having a conversation, and [if someone came up to deal] the correct etiquette [was] to say [the] price... my partner was quoting - because you could say what your partner was quoting but you couldn't quote it because you weren't entitled to deal.  And so you'd say, He's quoting 36 bob to 6d. or whatever the thing might be and then if the dealer wanted to deal you then had to get hold of your dealer and say, 'I suggested 36 bob to 6d. is that alright', and the dealer would say 'Yes' or 'Give him  1 1/2d. more', or whatever it was.  And if the broker said, 'Well I want to sell 500 at 36 bob', fine, and shot off it was a bit difficult and I regret to say that I used to occasionally book these bargains without having had it confirmed.  Somebody complained about this and one day to my [horror] I think a member of the committee and the chap who had made the complaint [were watching] and there was a friend of mine who was a dealer. He wanted to deal and my boss was busy with somebody else and he said, 'Well come on and book the bloody thing', and I said, 'I can't there's a committee member watching.  He'll have me sacked!' So he then sort of went off and all was well.  So I was warned about that and, fortunately, I hadn't done this until very nearly the time that I was due to be authorised. I hoped to be authorised when I was twenty one but I think that my birthday was the 2nd of January and that happened to be a Sunday so I was 21 on one day and then all was well.  

BA: So can you tell me what happened - what was involved in becoming authorised? What did that mean?

JB: Well then, when you were authorised it meant that you could deal and the firm was responsible for your dealing; so that if you did a dud the firm was lumbered with it and normally, obviously, you worked with your boss, whether you agreed or disagreed with him, he was responsible ultimately. So if he said we should do this or you should do that you did it.  I think the whole time that I dealt with Strachan there was only one case where he shouted me out and he was absolutely right to do it.  We had a divergence of opinion and he bought some stock and I was sure he was wrong and when he was out I had the chance of taking a small loss on it, which I did; and by the time he'd come back, fortunately for my skin, the price had dropped a bit.  So I told him what I'd done and - he'd had a bullet  in the First World War which had come just through his temple which [meant] he had a scar there and you always had to watch that - if it started to throb you knew there was trouble coming...  I saw this starting to throb and he really tore me off a strip, as I say, absolutely correctly.  I shouldn't have done it - the fact that I was right in this case was immaterial.  Having said that he then took me out for a drink!

BA: What were your feelings when you first became an authorised clerk and were able to make bargains and deal on your own?

JB: I think, enjoyment.  I'm sure that it would have been very difficult to have been a jobber unless you actually enjoyed it - you could be a broker and, I think, not particularly enjoy it if the money was right and so on.  But [as] a jobber you were so involved with it that if you hadn't liked it - you liked the people as well - and things were going wrong, it would have been very unfunny to be doing that and I think that's why some people didn't last the course and left or cracked up.  Then one began to feel that right, you know, one's got a sort of career here and then of course boomp came the war.  There were two of us, by then [who were] senior dealers - a chap called Len King and myself - and we were on the princely salary of œ250 a year, which is better because I think I started off at 28s. 10d. a week, but as I lived at home that was [adequate], and your lunch allowance was 11d. for roast beef and all the trimmings, 3d. for a cup of coffee, 2d. for tiffin, in the summer a sort of dashing strawberry flan for 4d. and still had enough to have a pint of beer.

BA: Were there any other perks? Did you get bonuses?

JB: There were bonuses, yes.  Profit-sharing was, of course, only among the partners. So in '39 I went off to Thameshaven where the City of London yeomanry had some very inadequate guns guarding the fuel dumps.  

BA: You describe that in the interview we've already done.  If we can go back again and review the history of the firm during the 1930s. Did it continue to stay more or less typical of most jobbing firms? Was it involved in any big deals?

JB: From the '30s, the big deal was the Morris one.

BA: Could we talk about that a little bit?

JB: Like all things a certain amount of good fortune attending ability. We were quite large in the motor market and Nuffield - Morris - had for a long time resisted a lot of influential.....

Tape 3, side 2

JB: ... had resisted considerable influence to bring his shares to the public.  There were two small brokers, one who [was] Pring and one Kitching Tabraham and they - one of their partners in each firm - knew him personally and they had never made any effort to suggest that he should use them if he was coming to the market or [make] any approach like that - one of them was on holiday [and] I think met him on a boat and so on - and he appreciated this very much and when the time came he put the business to them. They were not geared up really for such an issue and fortunately the office manager we then had was absolutely first class, a fellow called Vic Pagram, who knew almost everything there was to know about new issues, management and such and with Harry Bishop set up to arrange how this should be done. And we certainly got the lion's share of that.  It was quite a dramatic day: we had the core of shares from Lord Nuffield to prevent the shares from going too high:he wanted to keep the price within bounds so that people could take shares in his company at a reasonable price rather than him making a lot more money.  I suppose the queue round the... we had half the pillar - half the pillar we stood by was occupied with the dealers standing on the benches, and I suppose, there must have been [people], oh six or seven deep perhaps pressing forward to be able to deal. There was one chap who got hold of the brass rail, which was above the seat with his arms, and then with his legs trailing over part of the queue, he worked his way through by the strength of his arms buying shares from each of the dealers and then jumped off at the other end, having probably completed his business which was one of the things which I remember seeing.

BA: What were you doing on this day?

JB: That day we were running the ordinary motor book and two of the engineering books as well. But, I mean, virtually the whole of the Stock Exchange interest was on that deal.  And I think it is true that there were people who were able to buy shares from us and nip across the floor to one of the other jobbers in it and sell them at a profit.  So there was a continuing market.  

BA: Were there any complaints that the business had been done in this particular way?

JB: How formal the complaints were I don't know.  There was certainly a lot of jealousy and criticism perhaps was raised but after all they were his shares and he was entitled to dispose of them as he wished in those days. There were not the regulations for better or for worse which makes the handling of business a great deal more expensive.  I don't think the complaints ever really got far because no recognised rules had been breached and indeed it could have been said that the shares had been available to the public - or certainly to their brokers, and therefore to the public - at a lower price than would have [been] done if they had been issued in another way.  I don't think it was ever really seriously taken up.

BA: Did this episode feature as an important episode in the development of Bisgood Bishop?

JB: Yes. I would say it did. It had possibly not got in the papers as such but certainly in the Stock Exchange we did get a lot of kudos for it because the settlement went very well, we'd made a good chunk of money out of it, and I think it was agreed that on the dealing side, on the floor of the House, that Harry Bishop had organized it very well and that Vic Pagram in the office had organized the settlement very well.  So I think it gave us a definite mark up that we could handle such deals.

BA: The newspapers which report the episode at the time don't actually refer to any of jobbers concerned. Can you think of why that might be the case?

JB: I didn't realise that until you'd mentioned it but I think in those days it was always, well certainly as regards the rules of the Stock Exchange, no advertising was allowed and I think the papers also accepted that, [...] they were very chary about mentioning firms that had done something rather well or possibly even, for that matter, done it badly because that was rather breaching the etiquette and if not directly - the rules of the Stock Exchange, of course, wouldn't have applied to them - but the etiquette I think was still fairly strong.

BA: Now you've already described Bisgood Bishop as being a fairly typical firm during the 1930s.  How would you describe the jobbing system generally at that time?

JB: I think I would tend to defend the jobbing system, not only because I was in it.  It was very adaptable and I think that nearly all the times through its history, it succeeded in adapting itself to what was wanted. For instance, in those days there was much more private client business and - which was very suitable, capital in those days was small, the turnover was smaller - the institutions were starting to build up and when they were taking over from the private clients as the years passed so the jobbing firms became larger either through spreading themselves or big mergers and when the big mergers came, one that obviously leaps to mind is Wedd Durlacher, that was a very significant development because it linked the large gilt jobber with a large industrial jobber so it was beginning to cover the spectrum so it was always adapting itself and that's why I think that - I wouldn't like to criticise the operators in the Big Bang because it was something so out of the ordinary - but I think one of the snags was that it was imposed rather than developing at its own speed, and I think that's why it hit many snags.  The jobbing system, I think, was open to criticism but there certainly wasn't I don't think a better one.  You could have the open outcry system, but again very often it destroyed a market more than making it.  The jobbing system in those days was based on what seemed quite a good rule that the only people entitled to know the price and size of a deal that had been done was the client, the broker and the jobber; so that it was much more difficult to spoil a market. If it becomes known that somebody has bought 1/2 a million shares and has only sold 1/4 million the obvious tendency of everybody is [to say]: 'Well, there's a quarter million unsold shares so [let's] knock the price away.'.  Jobbers even went to the lengths of not checking bargains in the checking rooms as I mentioned previously, where you might be near another jobber, or another broker might have overheard, but checked by letter - just send the letter round to the office managers so that it didn't appear in the checking room at all.   And I think that a lot of business was done like that quite reasonably in those days. Times have changed and obviously the markets have changed with it but in those days it was acceptable and it worked, I suppose we can say. 

BA: Were there any big firms during the 1930s that dominated their markets?

JB: There were big firms certainly dominating the markets - in gilts and in industrials - and there were smaller firms which had a niche in more specialised markets where - one that I would mention, I'm sure he wouldn't mind, was Jenkins. Which was a smallish firm, who dealt in entertainment shares, and they had a very strong niche in that because the head partner knew a lot of the directors or chairmen of the companies [in] which he dealt and he was quite able to hold his own with one of the bigger firms competing against him. There was Murton & Adams, I think I'm right in saying, in the paper market although they were not a large firm they were very strong in that. But as the time came, of course, the smaller firms had begun to perhaps realise the beginning of the future, that it was better to go in with a larger firm and bring their books and their people with them under some terms and that spread obviously considerably, I think. I mean I can give you a very rough idea that in, say 1965/6, there were approximately 60 jobbing firms [of which I would have said 24 were large to medium. The smallest of the remainder might have had just two partners. Some of the firms were specialists and would have had good business in their own niches. Coming to 1973-74 (when we were a company), there were 26 jobbing firms, including six country jobbers. Of the others, eight perhaps would be classifed as large to medium, and the others medium to small - a drop of over 50 per cent in about seven years]. 

BA: Going back to the '30s which was politically a very unsettled period, did the political climate impinge on the Stock Exchange in your recollection?

JB: Yes, very much. I think one of the factors which had a very large effect on the market was certainly the rise of Hitler in Germany.  Everything would be going quite smoothly and then suddenly he would announce that once more his patience was exhausted and he was going to gobble somebody up. One was never quite sure at what stage of the proceedings the governments were going to take any action other than protesting and using the League of Nations,  which was completely useless, so that there was a lot of disquiet as to what might happen.  Then it became peace, or [not] peace but it became a situation where war wasn't going to break out then.  Then it resumed again.  But it certainly was an undercurrent of this [period]. One of the particular factors that I remember because we were involved in it was the start of the rearmament. Now a lot of this were motor car companies funnily enough.  [They]  were involved in this because, I suppose, at that time they had spare capacity and they were making various bits and pieces for the airforce rearmament which certainly gave them quite a fillip because, unfortunately, so many of the motor car companies and for that matter motor bike companies, which we used to deal in, disappeared.  Some were taken over but others had fallen by the wayside.  One I remember, when I was a blue button. I asked my boss why - it was the Riley company which produced a jolly good car - they were œ1 shares standing at 65 bob paying 20 per cent dividend - they looked very cheap.  And he said, 'Well, I wouldn't touch them with a barge pole.'  When I was a dealer, within two years, they had gone bankrupt and I was making quite a good profit dealing them on the basis of a farthing to a ha'penny.  So there were a lot of sad things, companies disappearing like that.

BA: Do you remember the effects of an actual crisis on the Stock Exchange, for example the Czechoslovakian crisis?

JB: Yes. In those days, I think the basic fact was that jobbers didn't have to deal with one another.  The system if you wanted to deal with another jobber [was that] you challenged him and then it was up to him whether he dealt with you or not.  Therefore, if there was a big crisis all the jobbers would be sellers, therefore there was no point in going to knock the price down by going to another jobber because it would only make it [drop] further.  So you would then make a price in a smaller amount than you would normally quote: a bit wider and a bit lower.  And then there would be brokers who would have [orders in a company of which they had been buyers. You would approach them and say the price of xyz is 34s to 34s 6d in a small way, but I reckon if you can get a buying order at 33s 6d we could do some business. With luck he would return and say 'you are an optimist but we well give you 33s for 10,000'. So you now had a buyer. You might have stock on your book and be glad to cut it or you might think that the price would drop further; in either case you would deal. If no potential sellers had appeared you might make a counter offer at 33s 3d; another alternative, you could try to persuade him to 'do half and leave half', i.e. he could buy 5,000 at 33s and leave the balance of the order firm. This would be most favourable to the jobber. He would probably be the market for the moment. He would have the chance to bid potential sellers in size or see if he could find buyers at a price higher than 33s. So you had a more orderly retreat, especially if you did not cover your price board with masses of red pencil. On your specific question of the Czech crisis, a number of investors and institutions took the view: 'Let's face it, if there's going to be a real war then everything is up the spout. If there isn't and it's going to be settled as it usually is, these shares are attractive, their business won't be affected and they are two shillings cheaper than they were last week'. And that was, as I say, one of the ways the system worked quite well. One knew the brokers who would be interested and they might even come in and say if the market is really flat I'll give such and such a price].

BA: Would a crisis depress turnover - would people want to sell or would they simply hang on and wait and see?

JB: A real crisis would probably increase turnover - once you  got a basis on which people were prepared to deal then it might get quite active, particularly if it was a leading stock where there was going to be a price.  In the old days, I suppose, if ICI moved 2d. or 3d. it was a world shattering event. So that you could then get a good turnover again on a new base. But I think that it would have stopped perhaps at the investment side, to the degree that people would have been rather worried about recommending shares if they were going to drop the next day. 

BA: Well, I'd now like to leap forward in time. In the earlier interview that we recorded you talked about your career following the war and the development of Bisgood Bishop and the jobbing system generally.  What I'd like now is to ask you some more specific questions about aspects of the jobbing system towards the end, as we come up to the 1970s and Big Bang, and also some of your other contributions to the work of the Stock Exchange.  The Wilson Committee, in the late '70s, spoke about the problems the jobbing firms were encountering and described some of the ways in which they were dealing with these problems.  One of the ways it referred to was the operation of joint books by particular firms.  Can you describe what a joint book was and whether Bisgood was involved in running joint books with other firms?

JB: Yes.  [The] Joint Books system arose normally when there were two jobbers in the stock which had become very unmarketable, and rather than keep an inferior market going, the two jobbers would get together and form a joint book.  This had to obtain the Council's agreement and it could only be for a [certain] time, in other words it couldn't be a permanent arrangement.  Sometimes it would be for a particular situation, other times it would be just because the market was so bad that without that joint book neither jobber was going to make much effort to make a market in the stock.  The joint book then operated [so] that you would decide on what price you were both going to make.  This was always one of the slightly amusing things, because when the joint book failed to keep in touch with one another and they were still quoting a different price, I always felt that the broker was perfectly [entitled to deal at the best price], provided he didn't know and in other words he'd only gone to one of them and dealt but that was the fault of the jobbers. We can touch on that later.  But if he obviously checked with both and knew that they were a joint book and knew there was a difference, then he should have put them right.  This [joint book arrangement] consisted [in] that any bargain done was split between the two of them: so that if A bought 5,000 shares he'd book the bargain 5,000 from the broker, which he was then responsible for, and he sold at the same price as he bought them 2,500 to jobber B.  It worked on the whole quite well. I think the Council were right that they didn't particularly like it but, as I say, they accepted it at least [as] a method of keeping the market going in that stock, and on the whole it worked quite well.  We certainly had a few, but I don't think it was a very large number of shares - or companies I should say - a large number of companies that were involved in this [...].  Then when [the joint book...] split it[self] when things got back to normal, then they went their own way, they settled up the existing position between them and then resumed [... as] normal.  But it did work quite well and I think it did prevent the unnecessary cut-throat business which could go on in a difficult stock. After all, whether one likes it or not, as a jobber you can say well we provide a service and we hope to make money out of it, but I think one's got to be honest you tend to make money out of it by providing the service.  Therefore, if you weren't making any money in the stock was it worth going on dealing?  If the two jobbers said, 'Well this is hopeless and we're not going to make any more,' then the public and the company itself and so on, would be far worse off than having a joint book.  That is its justification; it was not justified where there was a proper market going and then the Council could, if  they saw a large number of marks coming up, could've said, 'Well there is a market so you'd better stop it [the joint book].'  

BA: Did it help demand for the stock in any way? Did it make it more marketable? Or was it's prime function to hold the price up?

JB: The prime function was so that brokers could deal in more reasonable size. Because if you knew what the other chap was doing and you were working it together you weren't going to try knock him out and he wasn't going to try and knock you out; so it made a much more stable market. [It did not help demand and the price was irrelevant].

BA: What were the characteristics of an unmarketable stock?

JB: I would have thought that the main thing that was unmarketable would be if there was one particular operator, buyer or seller, and no other interest in it, so that if you had a seller, or sellers in the plural, with no interest in it, no buyers, you would make a small price to try and keep something going: you could make a nominal you could make a basis. Those were other ways which a jobber would not actually make a dealing price but he could indicate a basis or he could say there was a nominal and then say I've got a buyer or a seller and so on.  I think that was really the thing and also Hawker Siddley were [for example],  until they split, always a difficult market although there was quite a lot of interest in it.  It was a high price share and very volatile and swung violently, as did Rolls Royce in the old days.  But I wouldn't say they were unmarketable because there was a market and you could deal but it was a difficult market.  The unmarketable ones were where you  literally haven't got a buyer or seller, you haven't got the faintest idea what the right price is so you've got to make one in your head.  In the old days, when the board of directors or families had an interest in the share, it was very helpful, and maybe insider trading or not, but you could go to the company's secretary or chairman or director if you knew him, or the broker if you didn't know him, and say, 'Well look, I've got a seller of these shares would you see whether anybody on the board is interested in making a bid.' And they would normally in those days make a bid and then after a time, the price would get better and you'd suddenly remember, yes I sold them those shares and you'd go and say 'Well look, you know, you've got a profit on these now, would you like to sell them?' so that did help. And there were companies who - chairmen or people on the board - did try and keep it going, and they would buy it on a very flat day, like we were saying, one of these crisis days when Hitler was on the move and then when everything was love and cooing again and the price went back they'd turn them out and that suited everybody: they made a profit, the jobber made a profit and the buyers and the sellers could deal.  

BA: When did the shops stop operating?

JB: Well the shop, I suppose didn't really stop operating until the markets became much larger so I suppose it's much more recently.  And I think I would say it's not an easy question to answer directly, but I would say the shops stopped when the outside holders and operators were so much larger than the actual shop itself - which might only be perhaps the chairman and his wife or something like that but they would have an interest and, you know, it was always worth approaching the shop. [Brokers could create a shop from their clients by close research of a stock].

BA: Were they ever open to abuse?

JB: It was open to abuse but do you mean... if they were being approached, I could never see there could be any abuse.  They might buy the shares because they thought they were dirt cheap, they might sell them because they thought they were far to high and they were going to cut the dividend but if the approach had been made to them to do it it seemed to me perfectly OK.  It was only as, which happened from time to time, I'm thinking of sellers mostly... There was one company [for example], very unmarketable,  we'd bought some stock, and the next day they passed the dividend and made a loss. And we followed it up and found the seller had been quite an attractive secretary of one of the directors. So I don't know whether that's where 'pillow talk' comes from but we didn't do anything about it in the end.  In those days it was much easier to follow because, of course, names were passing through the offices.

BA: So if there was any abuse it came from the person taking advantage of the fact that they had...

JB: That they had the inside information and acted on it, rather than they were approached and said the shares too low or the shares too high, we'll deal.

BA: One other aspect of the jobbing system that the Wilson Committee referred to were minimum spread agreements between jobbers.  I'll ask you the same question, did Bisood Bishop have any experience of these?

JB: Yes. Yes. I think we'll start at the beginning.  Costs had increased really considerably both in salaries, rents and so on. Whereas perhaps in the old days a penny price was quite reasonable, the profit made on dealing on a penny price was OK, enabled firms to operate at a profit, it was becoming unprofitable when all your costs had gone up.  If there was a very large turnover it didn't matter very much, if there wasn't all that [much] turnover and you had perhaps four jobbers competing in one stock, each trying to cut the price to get what business there was, it became unprofitable. I'm trying to think whether we actually [had to inform the Council].  Yes, I think the Council was informed but they neither gave it their blessing nor said you can't do it unless it became a scandal.  So you would say, 'Right it's a fourpenny price,' everybody quotes [a] fourpenny price but, of course, you've got to realise that one chap might be quoting....

Tape 4, side 1

JB: One jobber might be quoting 38 42 and another one might be quoting 41 45, so although there was a fourpenny spread there was actually a penny dealing price and it also it didn't prevent the broker from saying, 'Well, I want to deal inside. I'll give you a penny less, or give me a penny more and I'll sell them to you'. And also there was, I think perhaps, the odd jobber who might bend his quote if he saw he wasn't getting the business on his price and sort of say 'Well I might be able to change the price' you see (it was at 38 42) 'Well would it help if I made you 39 43,' if he thought the chap was a seller so he be cutting a fourpenny price. That would obviously be slightly bending the rules. I think the other point that was of enormous assistance to the jobbing system at a time when [...] certainly the turnover and its profitability was difficult, was decimalisation.  I don't know whether that's been mentioned before but if you were making in the old days a penny price - well we'll say a tuppeny price because it would be more normal - in old money, you see you were making a five penny price if you making in the new pence, so that you already got a much wider quote anyway and I think that the public and the brokers and the public were rather prepared to accept this.  On your other one of the quotes of limited width, there was also [agreement] that in some cases [...] one didn't deal in quarters - in other words if you made a price of 4 5 you didn't make 4 and a quarter,  5 and a quarter, you could make 4 5 or 3 1/2, 4 1/2 or 4 1/2 5 1/2 so that did slightly do it. And the other restrictive practise which, again - I think it came [about] because the brokers began to screw the jobbers unmercifully at times in put-throughs: if it was an absolutely straight put-through, they handed it on a plate,  one was prepared to accept a very small return for your services, after all you were taking the risk if you bought the shares, even though you sold them on you were, if you bought them, responsible for that bargain.  And the brokers were [screwing the jobbers].  Some I think did it with pleasure, others did it rather shame-facedly but their clients, the institutions were flexing their muscles and were becoming very important in the market.  And then there came a restrictive practise as such that you wouldn't, shall we say, do a put-through for an eighth p. It varied according to what the stock was and the price and so on. And that again got busted a bit but I think it was a warning that one could push the jobbers too far, although jobbers always tended to be rather disunited and competitive. But I think decimalisation was a great saving factor.

BA: Looking at joint books and minimum spread agreements, I would have thought that implied some degree of co-operation amongst jobbers.

JB: For that period of time, yes.[See appendix in paper files at the CMH]

BA: Were relations generally good between the firms right up to the end of single capacity?

JB: On the whole, I should say, yes - the firms. Individuals in firms against individuals in other firms could be quite tricky but up at the top it was reasonably accepted that there had to be some general agreement and some standards.  I think that jobbers were always great individualists and they regarded poaching on their market in the early days with great displeasure.  I mean, I remember on one occasion one jobber A had taken up the stock that jobber B dealt in and jobber B's head partner came over with his hands in his pockets and stared at jobber A's board and said, 'Right I'm going to deal in that and that and that,' and walked off.  So you did sort of three for one but it balanced itself out.  I think very much it was like the House of Commons, the battle was fairly on and fought in the House but outside relations were very good and certainly at times jobbers - again I'm thinking more at the top end of it where people had made their names or reputations and so on - were helpful.  If somebody had come unstuck, whereas the lower echelon might want to kick him in the teeth, the [senior] chap would say, 'It's no good,' you know, 'if this chap got wrecked on some particular bargain, we'd only have somebody else coming in to deal in that stock so we might as well help the devil we know'.  I think this was more prevalent probably in the gilt market than in the equities although I do know one or two cases where one of the smaller jobbers got into deep water - when I say speculating [I mean] dealing larger than he should - and one of the big jobbers sort of took a chunk of it off him.  Actually in the end he didn't lose out on it.  But [you] felt the worth of keeping them - the opposition - because there wasn't that desire really to drive anybody to the wall by the end of the time.  Because so many had already gone.  I know when I started, there must have been most probably 130 odd jobbers.

BA: Does that mean that as senior partners or by that stage directors, you felt a duty to keep the jobbing system going?

JB: Yes, very much.  I certainly would like to say this here of Esmond Durlacher, whom I didn't always agree with, but I should think he took a very wide range [view] of the responsibility of the jobbing system and he was a leading factor I think in its survival and showing that it was a responsible community, you know we weren't just sort of brigands;I think the early descriptions of jobbers in the coffee house days were fairly rude.

BA: How were you getting on with the brokers towards the end of the jobbing system.  What did they feel about, for example, minimum spread agreements?

JB: If there was a genuine case for it, and as I say mostly it was genuine, and it wasn't abused, they accepted it because, as I say, it meant that there was still a market going and also as I say they could open inside - there was nothing [to prevent them]. If the quote was fourpenny they could say, 'Well, do you want to give me any more or do you want to take a bit less,' but it meant that they had to open if everybody was playing correctly but it didn't mean therefore that they couldn't deal inside that quote. And as I say the Office of Fair Trading couldn't believe that jobbers weren't taking the profit on the difference between the [quoted] price they were prepared to buy and the price they were prepared to sell. We would all have been retired after ten years if that had been true. I think relations in general were really fairly good because we could see the line up coming [and] what was going to be happening, and also let's be honest too the jobbers also took an appreciation of the difficulties of brokers being pushed by very large clients. They didn't want to offend the, you know, the Prudential - Prudential I wouldn't say it because they worked very correctly all the times I've come across them - but some of the other ones who were rather more [aggressive] were leaning on the broker to do something against the jobber.  So one realised that they had their problems the same as we had ours.  So I think [...] towards the last five or six years of the old Stock Exchange, we began to appreciate one anothers problems.

BA: How did the brokers feel about single capacity? Did they feel the same sense of wanting to keep it going that the jobbers felt?

JB: Well, this I would only be able to guess at because I had retired a good bit before that.  I think there was some of the older people felt there was a system that they had grown up with that they understood, that they could exploit to their benefit, to their client's benefit and so on, others felt that there was a brave new world there they were going to jump into and the money offered them at the start of it was so enormous that it would certainly weigh - outweighed - any judgement I would have thought. I think the older ones, particularly, would have felt the loss of the personal touch; the face-to-face dealing; the leg pull; the 'I want help on this one, because of the past', and [...] no doubt because of the future as well; the jobber [who] would say, 'Ok I'll do that for you,' even if it was a wrong 'un - that was obviously going by the board. So a lot of the old days, the way of life, had gone and whether the money made up for it, I suppose, I suppose if you hadn't been in the, you know, in the old days it would certainly have been attractive.

BA: Did you feel, though, for example, towards the end of the 1970s when you'd become now chairman of Bisgood Bishop that there was any pressure on single capacity?

JB: Yes.  The pressure was beginning to build up more on overseas stocks where the borderline was beginning to get a bit frayed.  I think the BP new issue threw it up: the divergence between a jobber and a broker; and they both blamed the other for treading just outside the guidelines.  So it was obviously beginning to become important and, of course, the whole time the institutions were becoming more powerful and as they became more powerful they became more international. You might be able to control to a very mild degree the English, but you weren't going to be able to control the Americans or the Japanese or - I don't remember the Germans or French really coming into our market very much but certainly the Americans and the Japanese later.  There was going to have to be a new system and the brokers, I think, very rightly said well if you were setting up a market you were going to have to deal with these people, then, you know, it's not fair that we should be tied to dealing with you in other circumstances. Because the basis in the old days was, of course, that, except under exceptional circumstances the business had to go through the Stock Exchange so therefore, through the jobbers, so they felt that they would be giving everything away.  I think once it had got that big it had to go.  But it was an efficient system in its day and as I say it was always very adaptable to the needs [of the time].  It wasn't hide-bound and [hadn't] died because of its lack of desire to branch out, try new things.

BA: You've already described in general terms what you did as a market official when you were appointed as a market official.  I wonder if you could, without necessarily mentioning names of individuals or firms, describe the kinds of problems that would come up and that you would have to deal with.

BA: Yes. I think they came really under two headings: disputes and interpretations of the rules of the Stock Exchange.  Disputes could come from anything really.  Mostly they would be a disagreement between a broker and a jobber.  It might have been something to do with a firm limit and really any situation arising from dealing.  Now, by coming on to the market officials early, the dispute was limited to the broker and jobber who were directly involved.  In the old days, it could have got out of hand before that - the head partner of the broker being called in, the head partner of the jobber being called in, then they were locked in, it would really become then a very, very serious problem and obviously both the broker was likely to back his dealer and the jobber his dealer so it made a lot of bad blood.  Now if you could stop it early and you just sat them down; we told them straightaway that we could only advise and guide and [they] began to cool off. And then they realised that, I suppose it is true to say that there's never, except [in] a very few cases, really somebody [who] was 100 per cent wrong and somebody 100 per cent right and if there was you could guess that one or the other had been trying to get away with something.  So then you could, you know sort of push the boot a bit more, but otherwise you said, 'Right listen to it both sides' I think the first lot [of market officials] were Rantzen [who] was head partner of Smith and Paul Bazalgette who was a great friend of mine and in those days head partner of Phillips and Drew.  When I went there there was Sir Nigel Mordaunt, and James Capel's senior dealer and myself, so over the years we had been around and seen most things, good and bad. And people were then prepared to accept this that they weren't being told [what to do] by some official up in the Stock Exchange who hadn't been on the floor of the house. We usually ended by saying. 'Well, look, don't forget this is one dispute and you don't expect to be leaving next year, do you?', 'No' and 'No'.  'So you might be [here] ten years? Well you're going to know one another for ten years - it's not really worth bringing this to the boil and we think you should do this but you don't have to. If you want to appeal up to the Council, certainly, but this is what we think.'  And in nine times out of ten they went off and had a drink.  And I think this was very good because it did stop it very early.  The next thing were really the rules and (a) I suppose that some of us were poachers turned gamekeepers so we knew the rules and we knew possibly how they could be avoided in certain circumstances. So this we were able to interpret and this was much easier because you know the rule involved was 'this and this', and we had the rule book there and if we wanted to refresh our memories about it we could look it up. And this, again, stopped things early. In other words, instead of somebody doing something wrong, then having a dust up, then the general flare-up and possibly cancellation of a bargain or debiting somebody's something, they'd come along and say 'This is what I want to do, is it OK?' and we'd say 'Yes that's fine' or 'No, you mustn't, you've left it until 2 o'clock and the fact [is] that the price has changed at one o'clock, you've got to go to him first and say "Look this is the situation and I must complete my bargain"'.  The other thing which we did a fair amount to [were] the rules on put throughs and marking.  In the ordinary way, put throughs had to be marked but there were certain circumstances in which it needn't be marked and this had always been a somewhat grey area and I think we were useful in doing this. There were two sorts.  We'll do the simple one first. [These] were redemption of debentures early.  If the basis of the market was - [the] ordinary thing was - 90 to 2, and a company wanted to redeem a chunk or had to redeem a chunk and had found a seller at 95, and wanted to do it and wanted to deal 95 and 1/8 and give that - so the business could go through at 5 to 1/8, although the actual ordinary dealing price was 90 to 2; if that was the end of the purchase for that year then we could say, 'OK it needn't be marked'.  The other ones were usually more tricky in the equities.  But if it was a large amount of stock, off the market basis, [if] it meant the completion of the order then again we could say, 'Yes, that's OK', if it wasn't the completion of the order - the seller was selling them below the market price, and would want to do more - then you might have to say, 'No this can't be done,' [...] it must be marked because it's altering the true price.  The other [case], the put through of the debenture, wasn't altering the tru price, it was just a special deal.  So we used to do a certain amount of that. Then there were odd personal things too; we came across odd disputes - the rule as to whether it was a 50-50 mistake, some mistake gone wrong, or 60-40 [was used] ... I think by 80-20 it was obvious that somebody was really wrong, so there weren't many of those; but 60-40 was about the average, slightly more mistake on one side than the other.

BA: I take it you would be available continuously while dealing was taking place.

JB: Yes, we had a little box on the floor of the house, one of us would always be there.  If it was a fairly tricky one, probably, if it had to be done in a hurry then one of you would do it but normally we tried to do two, a broker or a jobber, or two jobbers, it didn't matter.  At that stage we were doing it really as the Stock Exchange, we had taken off our jobbing hats or our broking hats as the case might be. So there was always somebody there, if not there was the telephone where we could be got at and my firm's pitch was where the fire place is [i.e. about six metres away] so I could poke my head round the corner or I could be on the pitch and go into the thing within seconds, enter the box.  

BA: When did the Stock Exchange start appointing market officials.

B: Must have been the late '70s, I should think, because I think Rantzen and Bazalgette were the first two.

BA: Was this in response to problems that had been building up?

BA: It was an intelligent idea, I think, from the Council.  They had a disciplinary commission and some of the people on that mightn't be market makers - in other words they hadn't worked on the floor of the house - and also it involved them in quite a lot of wasted time and by the time it had got to the Council, as I say there was usually a head partner and a witness and a dealer and vice-versa, and they thought well surely we can stop some of this before it comes, but if the market officials are not accepted they must have the right to appeal to the Council and I think I'm right in saying we only had one - Peter Stevens was the chairman of that committee, who was a very good man I may tell you, and he backed us up.  We were in the right but this chap was really behaving very stupid[ly] and I think he knew he wrong and that made him more bloody-minded and he thought he'd go to the Council.  I think that was one out of, oh, umpteen [rulings] which we had [accepted].

BA: Now, finally, you told me that you were a member of the Stock Exchange examination board.  

JB: Yes.  That was another of my....

BA: What did that involve?

JB: This is quite interesting.  Again it was very much the idea which the Stock Exchange had of using amateurs with some knowledge to do the work.  There was a professional examiner and then there was a chairman and usually four or five of us.  I think it was in two parts. We met to decide on the questions; this covered a pretty broad spectrum so that the chap would really know something about the Stock Exchange other than purely what he would pick up as a broker or as a jobber.  That meant the rule books, which would cover stuff as I say like put throughs, firm limits, cum and ex dividends.  That was another question that came up particularly from the tax point of view on the honorary market officials was when they [i.e. clients] could deal cum and ex dividend and special. That I think came from the Inland Revenue [which] wanted the Stock Exchange to investigate the switches between gross funds and those who were paying tax and so on.  Then there was the etiquette, and then it could go to such things as council: name three of the committees and what they were responsible for. Then I tried to get them to have a question, an essay, to show the chap could (a) write and (b) was thinking, in other words not just mugging up something by heart, so we occasionally did that.  The other guideline we had to follow was, of course, that jobbers and brokers were both sitting the same exam. So although it was useful that the brokers should know something of the jobbers, [...] he wouldn't be expected to answer [a question about] it easily;  I mean, that he would have had to have learnt. And similarly the other way around.  So we had to offer something that was virtually an alternative [question] to broker and jobber and put a few more questions than they had to answer so you could pick and choose a bit.  These were then set and then when the results were out [you became a member]. One occasion I can remember, it was over Christmas I think. Either the examiner was ill or there had been a lot of people applying that particular time, we had to mark the papers as well, which was very interesting actually. Normally the examiner did the marking and did it better because he knew what his answer [should be] or the answer he was looking for. So he was marking exactly the same, whereas if you had six people looking for something different it made it a bit more tricky.  Then we had to decide the pass marks, that is below which people would obviously fail - either [they had] done no work or didn't care or were ignorant - and then there was the main body who would pass and obviously had done something and knew most of it, and then there were people with a distinction who really knew the thing. It still didn't mean that they would be good dealers but at least they knew about the Stock Exchange.

BA: How long were you a member of the Examination Board.

JB: About three years.

BA: Was that towards the end of your...

JB: Yes, that was when I was no longer running a book.

BA: Well, finally, when you were describing how you decided to apply for a job in Bisgood Bishop you'd said that you'd went out with a little book that you'd had describing the work of the Stock Exchange and you'd originally thought that the Stock Exchange was about buying and selling what you didn't have?

JB: Ah yes, buying what you didn't want and selling what you hadn't got.  This was in the book.  Fortunately when I went up for my interview and I was thinking of quoting that and I took one look at the granite face opposite me and decided I'd better hold my tongue.  

BA: But in retrospect you never thought that had any grain of truth?

JB: Oh it did! Oh very often I bought stock I didn't want, I couldn't get out of, or I sold something I didn't have and didn't know when I was going to get it.  There was quite a lot of truth in it but it was obviously a chap coining a phrase to sell the book but there was more in it than it sounds.

BA: I think we'll finish there.

JB: Good.

BA: Thank you very much.

   

See appendix.

* i.e. about six metres away.