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

Interview No. 14 Angus Ashton. 

Interviewer: Bernard Attard

County NatWest, Drapers Gardens, EC2: 5th March 1990.

Tape 1, side 1

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

AA:  Yes, indeed, I'd be delighted to do that.  I was born on 15th February 1929. I was born in Surrey, and I was christened at Tandridge.  The village I was born in was Woldingham, Surrey.

BA:  And who were your parents?

AA:  My father was Angus Alexander Graham Ashton, and he was born in December 1890, that was 24 years before the First World War.  My mother was Audrey Mary Connors Ashton and she was born on 16th October 1892, so my parents were born in 1890 and 1892.

BA:  Did you have any brothers or sisters?

AA:  I had three brothers; my eldest brother died at the age of six months, and my second eldest brother, who had been my eldest brother all my life, is eight years older and was born in 1922. 

BA:  And what did your father do for a living.

AA:  My father did various occupations.  He was a highly intelligent and talented gentleman.  He came down from Cambridge University with an economics degree.  He was the generation which was effectively wiped out by the First World War, the 1914-18 war.  At the age of 22, he went out to Kenya and he was in Kenya when the war broke out, which effectively saved his life.  He would have returned immediately but he was advised that it couldn't possibly last longer than six months and therefore he didn't return to this country until April 1918.  He was a District Commissioner in Kenya.  He then volunteered, but by then the war was virtually over.  He did various jobs in the City.  All the members of his Peterhouse 8 were killed or murdered by November 1914, and therefore a great number of his generation were missing and it was relatively easy to get jobs and he got very good ones.  He became in fact a stock broker, which was extremely successful, only it wasn't a big stock broking firm.  Up to 1929 it was boom conditions, by 1931 he found that his income was about a fiftieth of what it had been.  He then joined the Royal Exchange Assurance Company as financial adviser, or financial secretary or financial manager, or whatever you care to call it, to My Lord Bicester and the Court of Directors of the Royal Exchange, where he worked from the age of 40 to 60.  After his retirement, he became more successful than he ever was in that he got a number of extremely interesting jobs which I won't bore you with but the most successful stage of his career was from age 60 to 80.

BA:  Did you ever know your grandparents?

AA:  Just, but only one.  On my mother's side they were both dead at my birth in 1929.  On my father's side, my grandmother had died and I just met my grandfather - my father's father.

BA:  Did they have any City connections?

AA:  No, my grandfather on my mother's side was a Bradford wool merchant, which was very much a trader organisation and I reckon that what little ability I got in this market would have developed from my grandfather.  He went to work at the age of 12 as a mill hand and was a mill manager by the age of 19 and an immensely successful entrepreneur, made substantial sums of money which were all lost in the end by his sons.  But that's clogs to clogs and another story.  On my father's father's side, my grandfather was a clergyman.  He was storing up treasures in heaven, but not on earth.

BA:  So your father was leaving the Stock Exchange or had just left the Stock Exchange when you were born, but did you ever learn anything about the Stock Exchange as a boy?

AA:  Absolutely, it was one area that I wouldn't have wished my children or myself to enter.  I looked upon it as a very second rate organisation, something which I didn't approve of considerably.  I liked the idea of owning stocks and shares but I looked upon stock brokers, and I underline brokers, as very third class people and I considered the real world of manufacturing and industry and banking was much more my idea of ... - and therefore I felt I would like to learn this aspect of it.  Although I must stress from a very early age I had been a trader, and I'll go into that later.  I was very interested in buying and selling.

BA:  What was the attitude to money in the family?

AA:  The attitude to money was rather larger than I think of the similar background, in that my father being the son of a clergyman virtually had no money at all; my mother being the daughter of a very successful wool merchant should have had a lot of money, but it was all lost and the Trust was mismanaged.  Therefore my parents, although they were very intelligent and lively and socially very acceptable were mixing with a milieu who were very much better off than themselves.  And therefore I was slightly aware that although I was extremely fortunate, and although my father had a substantial income, we were not, how shall I say, well endowed with capital goods. We didn't have a big estate, we didn't have houses in London and houses in the country.  We did have two houses, but we weren't a member of the very favoured few who were extremely well off before the War, although we mixed in that grouping.

BA:  Would you say any of your parents had a particular influence on you?

AA:  Yes, both my parents I consider had a very favourable influence.  I respected my father and his obvious ability and his intelligence.  He was highly intelligent and he was very careful with money, never having had any money, therefore we were fairly careful.  For instance if you came to our house, you would only find one bottle of sherry and one bottle of gin, not by current standards the usual mass of different alcoholic beverages which you get offered.  On my mother's side, I had a nurse and I had a Norland nannie, but she always looked after me, took infinite trouble with me, and therefore I regard my parents with the highest affection.

BA:  Where did they send you to school?

AA:  I was sent to a number of schools.  Not entirely their fault.  I started off at the Yardleigh Court Preparatory School at Tonbridge.  I was a sickly child and I didn't prosper particularly well, and after a year I was taken away and sent to the New Beacon at Sevenoaks, which was an excellent private, preparatory school.  I really enjoyed it.  It was run by delightful people and I liked the people in it.  I very shortly became a boarder again, and then by 1940, we were being heavily bombed.  We lived in a house in Kent.  My father had bought a farm in Suffolk.  He was a weekend farmer and at the outbreak of war we moved into a flat in London.  The farm in Suffolk became our home, near Woodbridge.  We were asked by the Agricultural Committee to take over the management of it.  My mother ran the farm during the war.  I was taken away from the New Beacon and went to Woodbridge Grammar School for two years, which was a very interesting exercise, because I was a day boy and Woodbridge Grammar School had ostensibly a high educational standard.  In actual fact all the masters had gone to war and the education was not very good and I only just managed to get into my Public School which was very fortunate.  I was sent to Eton, and I was extraordinarily lucky in my opinion to be sent there.  The intention was not to send me to Eton; I was going to Marlborough, but due to the War, so many prospective boys for Eton had been sent to America that they had various vacancies and my father saw a wonderful opportunity to send his youngest son to the school, and I benefited enormously from it.

BA:  How long were you at Eton?

AA:  Five years.

BA:  Thinking ahead to your future career as a jobber, would you say any of the masters had a particular influence on you, or perhaps an influence on your life generally.

AA:  The masters had a tremendous influence on one's life, because they were outstanding men in general.  My house tutor was very high quality and so were my classical tutors.  I was not a scholar, I was not academic by any stretch of the imagination and I was not a good games player, therefore by any rhyme or reason, I was not an outstanding member.  I succeeded in enjoying my time at all my schools enormously, against the odds.  Although I adored the holidays, the school time was not an agony to me, although I had a very  - what's the word? - I really don't know what the word is - just ordinary, just pedestrian career.  I happened to get a great deal out of school.  Did they influence me?  No, but it was during the War.  The War was a great leveller.  I didn't realise what enormous social and financial differences there were between myself and various other members and my tutors, we were all rationed.  I didn't realise the chap I was sharing rooms and eating tea with, owned half of Scotland, and I was of a very different ilk.  We were all very much on the same level.  It was an extraordinarily interesting situation to find oneself in and I would only say that the Stock Exchange was not a popular place or the City in general was not considered a very attractive area to go into.  I don't say that was necessarily at Eton or any other [school], it was just the social situation of the country.  We were fighting for our lives, we were after production, engineering, politics, the Foreign Office, everything, the direction of the country - and the Stock Exchange was very low down the list of priorities.

AA:  What were your plans as you came towards the end of your education.

AA:  The plan was that I should not go to University, as a certain amount of money had been spent on my education up to that date and I should immediately try and achieve a qualification.  The qualification my father chose for me was that I should become a chartered accountant, because he thought it was a very good general standing.  He did appreciate that I wasn't good at exams and I said that I doubted I could become an accountant, which I didn't achieve, but it was an extremely interesting five years, and it taught me one thing; and that was that I went over the country doing accounts and accountancy, and I learned that in the City of London we had a very attractive way of life in comparison to Preston, Birmingham, Glasgow or anywhere else, which was much more parochial and their standard of living was certainly not up to the London standard of living.  And also one saw very many more of one's friends and acquaintances in London than you did at Southport or Devizes or whatever the local organisation happened to be.

BA:  Where were you living while you were doing your accountancy?

AA:  I was living with my parents in our flat in London.

BA:  And so you didn't continue with the accounting?

AA:  At the end of the five years I then was liable for National Service and I spent two years in an armoured cavalry regiment called Queens Bays, Second Dragoon Guards, and that took place 1953 to 1955,  and I said to my father 'I'm getting on, I'm now 25 years old, and I've learned a lot about business and industry and I want to make some money'.  He said 'well that's very admirable, but how do you intend to do it?'  I said I had always been interested in dealing, buying and selling and I think, despite all I'd said in the past about the Stock Exchange, I think we ought to think about being a stock broker.  He said 'well you're partially right, but in actual fact you ought to become a stock Jobber.'  And I said 'What's the difference' and he said 'well you are the principal, you are the market maker, you are the person who carries the stock and makes the prices'. I said 'right'.

BA:  And that was the primary reason he directed you towards jobbing rather than broking.

AA:  Yes, also he didn't want me to become a broker.  Although all his City friends were brokers, he didn't want me to become a broker because he said you had to spend a great deal of your spare time being extremely pleasant to clients and as a jobber, you had a relatively limited number of clients, being the brokers, and you dealt with them during the day, and your great friends you obviously saw at weekends; but it wasn't quite the same salesman/client relationship as the broking fraternity suffered from.  He had been a broker himself.

BA:  So how did you go about becoming a jobber?

AA:  Various friends of mine at school came into this organisation [i.e. the Stock Exchange].  This is something which one didn't know at the time - my three immediate contemporaries ended up in the Stock Exchange and they achieved tremendous distinction.  One of them was Nigel Althaus who was a government broker; his father was a man called Frederick Althaus who was a very great friend of my father's, and I went to see him and he said 'I will find you a position in the jobbing fraternity.  I know they are looking out for keen young men who want to join them'.

BA:  And so you managed to get a contact with Francis & Praed?

AA:  I was introduced by Mr. Althaus to Francis & Praed who I was very pleased to join, until I joined them and found that I was the only young man of my age in the organisation; otherwise they were all twenty years older than myself, which says quite a lot for the organisation.

BA:  How would you describe the firm at the time you joined them?

AA:  Geriatric.

BA:  Could you expand on that a little bit?

AA:  I can say that I was very pleased in a way to find that I was the only pebble on the beach - i.e. aged 25, but I was equally unnerved by the fact that there was nobody of my own age group and there seemed to be no organisation of recruitment.  But I appreciated it was a situation where there had been a number of partners and they were all coming up to retirement in the next ten or fifteen years, and they had been too busy with the War and their own affairs after the War to recruit people.  But obviously there was a great gap in my opinion.

BA:  What kind of a firm was it?  Was it a family firm?

AA:  It was a medium-sized family firm.  

BA:  In which markets did they deal?

AA:  Solely in British Government Bonds, gilt-edged market.

BA:  Were they an old firm?

AA:  Yes, they'd been in existence about 50 years.

BA:  Could you describe any of the partners at the time?

AA:  Yes, I could describe them all well, but I wouldn't want to waste your time.  [The fact that] they were basically, all inter-related was, I think, the most important point.  They were married to the sisters of other partners.  They were all very much of the same age, and there was also a very healthy situation where two of them were the sons of a very successful member of the partnership, so it was a small family partnership.

BA:  What was your first job?

AA:  My first job was in the office, going through the office at a relatively high speed, prior to going down as a blue button on the floor of the market.

BA:  What were the offices like?

AA:  They were the third floor of Kent House, which we can see out of this window, and they were about, I think, 1,600 square feet.  They were basically four large rooms.  There was a partners' dealing room, where also the authorised clerks and the authorised dealers were allowed to sit; the partners had an inner sanctum.  There was the ledger room, there was the general office and there was the cash and the telephone, but that was basically all it was.

BA:  So you spent a short time in the office before moving into the House itself?

AA:  Six months in the office and then I went down to the House, as a blue button.

BA:  What did that involve?

AA:  That involved running for my masters and carrying out their every whim and request on the floor and booking bargains and balancing the books and making sure that each stock added up and was correct - the positions as held by the office after the day's deals had been recorded - running messages to brokers to ensure that they got our offers or bids as quickly, if not quicker than the opposition (so one wanted to be fairly fleet of foot) and generally carrying out one's masters [wishes] - perhaps going to the local bookmaker and putting on a side bet for the 3.30, or perhaps booking a table for his lunch, or perhaps even shopping for him, i.e. general office boy job on the floor of the Stock Exchange.

BA:  Can you remember any of your first impressions of going into the House?

AA:  Yes vividly.  I didn't think that I could possibly stand it, because the noise and the people, as a Guards officer at Dunkirk so wittily said, appalled me.  But within a week I discovered the people were delightful and the noise I didn't even notice.

BA:  How did the Gilts market contrast with other parts of the old House?  Was it noisier or was it simply the general hum of the Stock Exchange?

AA:  It was the general roar of the business, which was the factor that I noticed on entering my first Monday morning, and the fact that I stood most of the day, I found.  It was rather like being at a very noisy race meeting and in fact, when I was first asked what it was like, I said it was like being at a cocktail party without any drinks.  That was not necessarily a very adept or accurate description.  But the point was that there were a lot of people moving around talking to one another and there was a tremendous hubbub, general hubbub of noise.  It was the number of people and the noise which were the factors that I noticed.

BA:  How long were you a blue button?

AA:  A very short period of, I think, about six months.  Then I became an authorised dealer and a member within about a year.

BA: And what did those stages involve?

AA:  Those stages involved being allowed to deal.  Of course I held a book in my hand and booked bargains for the market makers as a blue button - that was part of my job.  As they said, pick up the book and book this bargain, I had to remember immediately what they'd been saying and what the price was, so one had to be alert and on one's toes.  If you were sleepy or had had a bad night, your days, even in that time in the fifties, were obviously very limited.  People were not of any great interest to the organisation if they weren't very much alert and very much on their toes.  Therefore the point was that you had to be wide awake, I would say was the answer.  As an authorised dealer you then were probably given your own part of the book, just a number of stocks, which you made prices in, and booked bargains.  But again there was probably a limit on it, i.e. that a broker would come up and say Angus 'what is the price of War Loan?'  (by then he'd be calling me by my Christian name)  and I would say, 'Seventy to a quarter, to a half,' (that's seventy and eight thirty-seconds, sixteen thirty-seconds) and he'd say 'I'm in quarter million.'  I would then turn immediately to my senior partner and say 'Sir, I've got Bloggs who wants to deal in quarter million War Loan', and he would have taken over from me.  But if he'd said 'I want to buy 10,000 or 50,000 I'd have booked the bargain.  I was a small dealer on a major book.

BA:  Where did you actually learn your dealing skills?

AA:  Well I do feel very strongly that dealing skills are very over-rated.  I have always, since a very early age, been a dealer, like everybody else.  I've been aware of the value of money, and I've been aware that if I was interested in a situation, whether it was buying or selling a motor cycle or a bicycle, or on the farm - having a farm background during the War, I kept rabbits - I was very interested in the price of rabbits, and sometimes it was a good time to sell rabbits to the market; if the ration had been put down on meat, well that was a good time to send off some more buck rabbits to see what they'd fetch.  In fact there was one ghastly time when my rabbits fetched more than my mother's pigs were fetching, because they'd not only cut the meat ration, but they'd also forbidden import of feeding stocks for pigs, and therefore they thought they'd take up less shipping to bring in the finished product rather than the food to feed them.  I've always been aware that in certain situations there's a market price, and I think most people are that.  You've got to be of relatively average intelligence and I think you've got to be numerate, which I was very fortunate, I've always been able to add and subtract at a relatively advantageous speed.

BA:  What was standing on the pitch like as a young dealer.  You said that you'd be referring back to a more senior partner.  Were you standing very close to each other?

AA:  Uncomfortably close I would describe it as.  One was generally pushed forward so as to meet the onslaught or the lack of business frontally.  It very much depended who you worked for.  If you worked for a man who you got on well with and you had a rapport with, it was a lovely life.  If you worked for what you might describe as an ace bastard, it wasn't a very pleasant life, no.

BA:  Again, do you have any early memories as a young dealer of particular experiences, either disasters or triumphs or ...

AA:  Oh, yes, I had a very generous and very clever, intellectually clever, boss.  He wasn't a particularly good jobber, but he was finally my senior partner.  He was a man called Humphrey Mackworth Praed, whom I regard with the highest affection and respect.  He should have been a don at Oxford.  He shouldn't have actually been a jobber at all.  But I was standing in front of him, and a little elderly gentleman came up - we were on the Corporation market - and said 'What are Herefordshire five and a halves?'  And I said, 'they are 83 and a quarter, three quarters, sir,'  And he said 'I'll sell you £475, all or nothing.'  And the word, all or nothing, I'd only been on the floor a few weeks, meant 'absolutely of no importance to me at all'.  And I said £475 and bought £475.  My bosses were standing beside me at the time and they said nothing, either.  Next morning on the checking, my £475 was shown as a purchase by Francis & Praed, but the vending broker showed it as a sale of £475,000.  My senior partner said 'Did you realise that you bought £475,000 and I said, 'no I didn't, I bought £475.  He said, 'But he said "all or nothing". I heard him say it.'  I said, 'Well I'm very sorry Humphrey, but that means nothing to me, Sir, what does it mean to you?'  He said, 'Well I'm not quite sure, Angus, but I think it means hundreds of thousands of pounds'.  So I said, 'Why the hell didn't the man say so?'  This had been something which before the 1939 War was a recognised adage that  'all or nothing' meant hundreds of thousands of pounds.  Humphrey had never actually had it to deal with and I certainly in my third week on the floor had never had it.  We did in actual fact buy the stock and we took a substantial profit on it, but that was beside the point.

BA:  Was that a particularly large transaction at that stage?

AA:  For that particular stock, in that particular market, it would have certainly involved a different price to the price I'd given him.  The fact was that the market was moving upwards and if he'd been open we would probably have taken another eight ticks, another quarter of a point, off - eight thirty-seconds - and we'd have dealt at the figure.  But as it was, we sold them for, I think, three quarters of a point profit.  It was very handsome, because the market was moving upwards fast.

BA:  Now you mentioned that you were pushed through - well you became a Member fairly soon after becoming a dealer.  What's the background to that?

AA:  The background was my age, which was 25, and therefore I was considered a responsible [person] - I'd been commissioned in the Army, I'd done five years chartered accountancy.  After they'd looked at me for six months in the office, and given me a good rating - and I obviously was considered alert, keen on the floor - after six months I became an authorised dealer and I was a member within a year.  Yes, it was a time when I didn't have to pass any exams, all I had to do was produce a sum of money, £1000 to buy my membership and that was all that was required at that stage.  I hadn't got £1,000 incidentally, but my father lent it to me.

BA:  Had any other younger people come into the firm?

AA:  No.

BA:  And were the partners thinking in terms of the future of the firm at this time?

AA:  No.  They weren't, they were thinking on a short-term, day-to-day basis, and this was the fundamental problem that Francis & Praed suffered from.

BA:  Could you perhaps elaborate on that a bit more?

AA:  Well, I joined them in 1955 and I did in actual fact hand in my notice in 1971, but the writing was clearly on the wall and by August 1972 the partnership was wound up.  So in a matter of 17 years it declined into a situation where it was no longer a viable organisation.

BA:  Did the partners at the time of your joining, or the early part of your career ever feel the need to expand the firm?

AA:  Yes, but they were capable of making substantial sums of money, which they did and it was just that, in all fairness to them, they did have the wrong attitude.  They were taking a short-term view and they were not taking a long-term view like our competitors Wedd Durlacher and Akroyd and Smithers, which were using the wealth they were generating in the Government Bond market to expand into the Equity market.  And although my partners had substantial equity holdings and had a great deal of interest in the Equity side, they never undertook the expansion into the Equity market they should have done.  This is jobbing backwards, but with the benefit of hindsight that's what should have been done.  Shortly after me new people were brought in.  I was the first person to be brought in of the younger generation. 

BA:  What was the next stage in your career after becoming a Member?

AA:  I became a partner in 1959, so after four years, three years after being an authorised dealer I became a partner in 1959.

BA:  And what did partnership involve for you?

AA:  Well it involved, obviously, responsibility because there was no salary, you didn't get paid anything, you were entirely on your own.  I had no money, so again I went to my father and borrowed money off him because I had to put £10,000 into the partnership, which I didn't possess.  I was allowed to draw out £2,000 a year of this money, which was capital in actual fact, and borrowed money.  I had no salary at all and I waited until the end of the first year to see whether we'd made any money to see whether my efforts and work had been worth while.

BA:  Where were you living at this point?

AA:  By then my father had retired and we no longer had a flat in London and I was sharing a flat with three other young men.

BA:  What was a typical day for you like, at this stage of your career?  The early years of being a partner in the firm?

AA:  I was immensely enthusiastic and very keen to succeed in my business.  I was ambitious to get on and to acquire a certain amount of money so that I could afford a house and a wife and a family.   So I was motivated, strongly motivated by the lack of capital, my own financial capital.  I was therefore meeting and mixing socially with a lot of amusing and exciting people, so I had a very relaxed and attractive social life in London, which I found most entertaining.  I equally had a not very stressful [job] and I didn't work particularly long hours, as you will see when you ask me that question.

BA:  Can we go through the various stages of your typical day, if you can remember?

AA:  Well, I've just been writing them down.  Blue button, authorised dealer, member, partner - a typical day 9.00 arrived in the office.  I was probably the first in the office at 9.00.

BA:  Was it a long journey to work?

AA:  No it was from South Audley Street.  I walked across Grosvenor Square to Bond Street and came down on the Central Line, so it was literally twelve minutes, or ten minutes on the underground and ten minutes walking, which was a good idea. It was about a twenty-five minute journey.

BA:  Did you read a paper on the way in?

AA:  Oh, most definitely.  Not only did I listen to the wireless while cooking my breakfast because, although you didn't have money programs and you didn't have anything like Dawn Traders on LBC that you do now have, it 

Tape 1 side 2

was vital to know not only the news as recorded on the radio, but also interpreted by the media and the press, so in the underground, a very short ten minutes, you read one paper.  As soon as you got into the office you grabbed another paper to try and see how it's being presented to the investing public, that's private and institutional investors.

BA:  Which papers were you reading?

AA:  Well I'd probably read the White Times in the underground and the Financial Times when I got into the office.

BA:  And so you'd arrive in the office and what next.

AA:  Well, by quarter past nine the other authorised dealers would arrive and the partners would appear too and then at half past nine we went from our office down onto the floor of the Stock Exchange, again led by the blue buttons, carrying the books or the equipment for the day's work.  The Gilt-Edged market didn't open until 10 o'clock, which was the official trading hours of the Bank of England.  So they were established by a quarter to ten, by which time the authorised dealers and the partners had arrived and they were ready for business at let's say ten or five to ten, when the kick off was.  There were no breaks of course.  People did go out for coffee breaks and lunches, but there was no break until half past three which was the official close of business, whereupon we shut up our suitcases and our books and marched up to our offices where we were given a cup of tea and added everything up and worked out what our profitability had been, or loss, as the case may be.  Then by half past four I'm sorry to say, members of the senior partners decided they were required elsewhere and the junior [partners] and authorised dealers and blue buttons would probably leave at five o'clock in the evening.  So I think it was a very relaxed day.  In fact, when I married, my wife was extremely worried that I seemed to have such relatively relaxed or laid-back office hours.

BA:  Would you stop for lunch at some stage.

AA:  Business never stopped but you organised your pattern of dealing [so] that on each book or department there would be two or three Members and one would be out and the other two would hold the book while he was out.  So the lunch hour very roughly ran from say half past eleven to half past two, allowing three people to each have one hour.

BA:  Did you ever trade after hours? 

AA:  Yes.  Often it was not very satisfactory because the people you were trading with could be, in certain circumstances, in receipt of certain information which hadn't percolated through to our office, and I must make the point here that the new conditions and the new methods of dealing are so much more satisfactory and that our information is readily available to everybody.

BA:  Now one episode does come to mind.  I don't know if it's too early in your career, but in 1957 when Bank Rate was raised 2% from 6-8%?

AA:  Or was it 5 - 7%.

BA:  It was 5 - 7% - and there were stories that some people had managed to obtain information early on and were able to take advantage of it.

AA:  I think the words my senior partner used to the press was 'inspired selling'.

BA:  Do you have any memories of this particular rise in the Bank Rate?

AA:  Only the substantial loss that it cost.  Yes, I do, I can remember that afternoon clearly, because normally afternoons are relatively quiet, and we bought stock at the close of business at 3.30 and we endeavoured to pass it on, either to the Bank of England or whoever might be interested in buying it, and nobody seemed the slightest bit interested in buying it, and we subsequently lowered our prices substantially, and bought more stock, which to us indicated that some people, certain people, knew something which we didn't know and we were left at the end of the day carrying several million pounds worth of stock, which we could ill-afford to do, and I believe, in fact, we were bailed out by the Bank of England.  Obviously not at a profit, but the loss was minimised in that the Bank decided in their infinite wisdom that something was going on and they had to raise the rate substantially and therefore - when they raised the rate, they then said, 'We understand that you are unhappy about your deals last night, and early this morning, we couldn't say anything to you, we didn't  know until 11 o'clock that we were going to have to raise Bank Rate.  But undoubtedly various people who may have been acting entirely on their own interpretation of events, caused a situation which was not resulting in a satisfactory market.  And therefore we will take your stock off you at', I think it was a point loss, but it wasn't a three or four point loss, which we were facing.  The Bank of England, who I have the highest respect for always maintain an orderly market. They will fine a firm; you will be fined if you make a nonsense, but you will not be ruined, i.e. if I in that situation had got caught with ten million pounds' worth of stock, they would fine me a point; the fact that the market was four points lower down, [they] would save me from being ruined.  They didn't want people to go to the wall due to something which was not in their control.  One of their businesses - they've got numerous businesses as you'll discover and know probably, much better than I do - but one of their businesses was effectively to maintain an orderly market.

BA:  You mentioned earlier on your wife, and I was wondering what kind of a lifestyle you were leading. When did you get married?

AA:  I married very late due to the fact that I wasn't in a position to marry earlier.  I was 35 years old when I married, and therefore I married in 1964, and I married a girl whom I'd known for 13 years. I'd gone into the Army and she'd gone to France, and we'd gone our separate ways, and we remet, and six months after we remet we married on 15th September 1964.

BA:  Did her family have any City connections?  

AA:  None whatsoever, they were a very clever and talented family who had made their fortune through ship repairing and ship building.  They were basically ship repairers on the south coast of Wales. 

BA:  How did your own career unfold, after you became a partner?

AA:  Well, I think it's fair to say, in my opinion, it wasn't very satisfactory, because I didn't consider the partnership was progressing in the way it should do.  But it was not necessarily the most popular thing as the most junior partner to go into a partnership meeting and tell everybody that they're not doing their job very properly.  So probably I made the mistake of sitting quiet and not saying a great deal, but pressing all the time for more people to be brought in, more vigour to be given to the general exercise and for us to look at other places to expand in.

BA:  What kind of response was there to these suggestions or ideas you were putting out?

AA:  Well in all fairness to my senior partners I think neutral would be my description.  They didn't dismiss it, they felt that it was more important that we became really effective in our own area before we started trying to organise other people.  We were desperately short of capital, due to the fact that they all withdrew their money and spent it on other things or bought equity shares, and they kept the very minimum requirement in the partnership to run it.  The partnership was wildly undercapitalised and therefore in no position to take over anybody else.

BA:  How would you have contrasted Francis & Praed during the 1960s with other jobbing firms and with your main competitors. 

AA:  I would have contrasted Francis & Praed in the 1960s with our main competitors [in] that, where they were going forward and moving upwards, we were sliding downwards.

BA:  What kind of market was the gilt market during the 60s.

AA:  A declining market because it was a time of considerable inflation and although we may have had Conservative Governments there was a very me-too socialistic situation, and this created inflation.  Equities were coming more and more into their own.  And whereas the Trustee Act insisted that 50% of all Trusts should be in Government Bonds, that was rescinded.  So you had the unwinding of the Trustee Act, and you had a weak market, not demoralised, but out of favour.

BA:  Was it a very competitive market?

AA:  No, I don't think it was particularly.  There had been 30 jobbers, it was down to about 6 or 8 jobbers. There were two main jobbers, Wedd Durlacher and Akroyd & Smithers, and there were about five minor ones, Francis & Praed, Wedd & Owen, Charlesworth, Giles & Cresswell, Wilson & Watford.

BA:  Did you have much contact with your opposition, either outside the House, or during the course of the day?

AA:  Yes, a great deal.  Although they may have been frightful competitors, the ability to meet and mix on an entirely friendly basis was a key feature of the Government Bond market, unlike the Equity market where there were some considerable enmities. 

BA:  Again do you have any particular memories of either successes or disasters in this part of your career, or particular episodes?

AA:  No, it was rather a grey area, I think.  I think the  lack of ability of Francis & Praed to make money was definitely an episode.  There had been a situation which involved a lot of trading in dividend, purchasing and selling of stocks cum and ex, which was subsequently forbidden called 'Bond washing' for which my firm was censured over at one stage; and this cut-down the volume of the business very substantially, because  there had been a great deal of trade in stocks as they came up to their dividend, so that business was under a cloud.  Francis & Praed were under a cloud and I would just describe it, to be kind, as rather a grey period.

BA:  What were your relations with brokers like?  Were there particular brokers who you did regular business with, or did you have all the gilts brokers coming up and dealing with you?

AA:  I think it's very fair to say that you were given a chance by most of your broking fraternity.  Naturally, brokers had their favourite jobbers and people were extremely generous and very helpful.  Often you had a broker who had a very substantial order who would like to have brought it to you but he knew that your capitalisation wasn't really capable of dealing with it, and he might indicate to you, that he'd have dealt; he probably wouldn't tell you what he'd dealt, but you'd probably be able to guess what he'd done, and that's without opening his business in any way.  But I would say it was a very friendly relationship.

BA:  At this time were you beginning to feel the impact of the institutions on the Stock market?

AA:  Very definitely in that there were some new highly motivated and very well run organisations moving up from small to medium-sized, who had large institutional business and you equally, at the same time, had the decline of old, well-established family firms which relied primarily on private business.  So you had a two-way movement and it was very noticeable indeed, and this similarly occurred in the jobbing system.

BA:  Again, can you elaborate a little bit.

AA:  Well, I think the very fact that the tax laws put so much money into the pension funds and the life assurance companies.  One only has to look at the stock holdings of private investors.  When I came into the market over 50 per cent of the stocks and shares were held by private individuals, I think was the figure.  I don't know what the last figure was, was it down to 16 per cent?  The last time I seriously looked at it it was 25 per cent.  Institutional holdings up to 80 per cent.  You now have a situation where 50 of your fund managers virtually control British industry.

BA:  Was this imposing a strain on Francis & Praed?

AA:  A very substantial strain because it meant that business was getting bigger, it was getting much more professional. I'd have much less idea of what was going on if the business was occurring because it would be probably in ten million and the people who I might have been dealing wouldn't even see this business, it was being dealt with by other people and it was going straight to the two major firms, Akroyd and Wedd and the Bank of England, or wherever it was being unravelled.

BA:  Was there any way of adapting to this situation, or did you try and adapt to this situation in any way?

AA:  Oh yes, I think so, one made it in larger amounts and you explained to your brokers that you were prepared to deal in these larger amounts and we brought in new capital, but it was only to a limited extent.  Yes, we moved towards it but we had slipped irretrievably below the level, the required level, in my opinion.

BA:  Were you ever involved in arrangements like price agreements in the jobbing system.

AA:  No, I don't think so, definitely not.  There were understandings that you wouldn't make a closer price than, say, in certain very undealable stocks, half a point or a point, but that was virtually unenforceable, because if one is making a point price, that is the understanding and you make 59½ - 60½ and I want to buy the stock, I'm going to make 60 to 1, and so effectively your broker has a half point price immediately.  And in fact generally, in any active market, there is always a choice price.  By choice I mean the same price for the bidder as [for] the offerer, because you've only got to go round the market, and this is the great joy of the market, that you can find the centre media price.

BA:  Were you particularly vulnerable as a firm to changes in Bank Rate or to devaluations, and I'm thinking for example, of the devaluation in 1967 when the pound was devalued from, I think it was $2.80 to $2.40?

AA:  Yes, we were, but again, we were part of the organisation - the Government Bond market - and again the Bank of England maintained an orderly market. I think, if I remember rightly, although we were caught a Bull of stock - holding stock, I think again - the Bank took us out of our stock at a favourable price.  So you must see all the way through the Big Brother Bank looked after the market, because it was in their interest.  There was no point in Francis & Praed being hammered, which is being declared defaulters, because they'd been caught with the wrong book.

BA:  Now, towards the end of the nineteen sixties the Stock Exchange was changing in the sense that the move from the old House to the new House was in the offing, and I think it was in 1972 the new House was opened.  Do you think this had any effect on the Stock Exchange.

AA:  Well, I see it through the eyes of Francis & Praed, which was in rapid decline by that stage.  It had got to the stage where I, who was a third senior partner, decided I couldn't really stay there any longer, and I wanted to take six people out of the organisation and join another organisation called Bisgood Bishop, who were Equity Jobbers.  When you get a senior partner of a firm finally deciding that he saw no future in it, it was not exactly helpful to the organisation, and I don't consider it's very much to my credit, but the decline of Francis & Praed had become acute by that stage.  Equally, the ascendancy of other firms was becoming more apparent.

BA:  And so you mentioned that you'd made arrangements to join Bisgood Bishop.  How did that actually come about?

AA:  They approached me.  We were going to, in the late sixties, merge, Francis & Praed with Bisgood Bishop. This was the idea of Bisgood Bishop's senior partner, a man called Ingram Capper, who was a very brilliant senior partner.  It was a relatively small firm, but he founded the success of Bisgood [because of] the fact that he considered it was vital to recruit young, able, articulate entrepreneurs.  He built an organisation of about a dozen really first-class dealers and traders.  He managed to create a situation where Bisgood who had been a much smaller, and weaker organisation, would eventually have virtually taken over Francis & Praed by about 1968-9.  We couldn't agree terms, my senior partners could not agree the terms.  They were hard terms, I agree, but they were realistic terms.  It would have meant that Bisgood would have held 70 per cent of the shares whereas we would have held about 30 per cent.  Whereas we considered that if it had been anything, it should have been 50-50 per cent, if not it should have been 60-40 per cent in our favour.  The partnership couldn't agree to this.   Bisgood's next move was to then come individually to people - in actual fact it was only myself involved - and say how did I see the situation, and I said I was very unhappy about it, obviously because they knew I was very much in favour of this merger.  So the next thing was [they said], 'well, if at any stage you feel you want to do anything about it, come and see us'.  I didn't in actual fact come and see them, but I was in constant contact with them.  In fact, we did, as an interim stage, merge the two firms in certain areas.  Then the situation got more acute at Francis & Praed in that I was put into Bisgood with a group of people and Bisgood put a group of people into our organisation, and the effect of that was that Bisgood said they didn't wish to continue with the situation any longer, that they were too involved with the Equity market and they felt they really hadn't got the resources or the ability to get involved in the Government Bond market.  Therefore we were on our own.  I was left with the alternative of either returning to Francis & Praed or joining Bisgood.  And I chose to join Bisgood, and sadly, a year later, Francis & Praed were wound up, so it was a tragedy.

BA:  Yes, what were the final reasons for Francis & Praed winding up?  Was it the retirement of partners?

AA:  It was the retirement of partners, but the final trend was that in 1972 we had a big Bear run, and they were caught as Bulls in a big Bear run and lost a substantial amount of money and really couldn't continue trading.  We could have done but it would have been irresponsible to have done so, and it meant that some of the partners weren't as well off as they should have been.

BA:  What happened to the other partners in the firm?

AA:  Well, I think it was a situation where you have a wind-up, there's always a tragedy.  Some of them retired, others got jobs, but their careers were virtually destroyed.  

BA: And what did you do, did you immediately move over to Bisgood?

AA:  I joined Bisgood.  They were extremely generous.  They made me a shareholder which was equivalent to partner and the intention was that we should open a Government Bond section, but by then the Equity market was flying and all our resources were used in the Equity side, and the only thing they had was a fixed interest department which was debentures, loans, unsecured loans and preference shares and they asked me to take over control of that.  So I ran their fixed interest department.

BA:  Before we explore that a little bit, I'd like to ask you what was the reaction in the City to Francis & Praed disappearing from the scene, because they were an old firm?

AA:  Dismay, I think would be my word.  Anguish that a firm of the standing and background [of Francis & Praed] couldn't organise themselves to run their affairs so as they could proceed and it had a bad effect on the Government Bond market for about two or three months afterwards, because not only did we withdraw but on our withdrawal several other people withdrew with us.  We triggered it off, which indicated that the whole market in certain areas, was not profitable.  The Bank of England was exercised by us and they had my senior partner [in], they offered us virtually everything they could.  They offered us loan facilities, they offered us all the help that we could [use].  But morale had disintegrated to such an extent that the senior partners decided they wanted to retire and the junior partners considered they weren't in a position to continue.

BA:  How did you find moving from a firm like Francis &  Praed, which were Gilts, to a primarily Equity jobber?  Did you find the ethos in Bisgood Bishop was very different?

AA:  Totally, totally different culture.  It was a sea change.  The background of the members of Bisgood was different.  There was a totally different attitude to work.  They were dedicated.  They worked extremely hard.  They spent a great deal of their private lives involved with their work.  It wasn't a hobby, it was absolute dedication to driving the firm onwards.

BA:  Did you find it a difficult transition?

AA:  Yes. I did.  Because whereas I'd been in a fairly authoritative position in Francis & Praed, I came as the new boy.  Slightly suspect too. I had to give a year's notice to Francis & Praed.  Three months before I joined them, Francis & Praed collapsed, so people wondered why they were taking on this animal.

BA:  What was the reaction in the Stock Exchange to someone moving from one firm to another, let alone a firm that was ailing to a firm that was a bit stronger.

AA:  I think it was unhappy, definitely.  You were conceived to have rocked the boat, definitely.  It was impossible for me when I joined Francis & Praed to have moved to Akroyd or Wedd, because there was an unwritten rule that one didn't poach people from each other.  However much I might have liked to have moved from Francis & Praed in the early days, I was forbidden by the rules of the game.  I could have gone into the equity market but I couldn't move to another position in the gilt-edged market. So it was a tied House, in actual fact.  I don't know if that's the right description, but I must stress, it was impossible for me to make a move in the Government Bond market.  I could move out of the Government Bond market.  Therefore I was entitled to move to Bisgood.  Whether other people moved with me was their affair.  The attitude to my move, especially with the collapse of Francis & Praed, I can only describe as unfavourable.  I must say that realistically.  Perhaps I feel it more than was actually the case, but I was aware that I wasn't doing what I was really happy to be doing.

BA: How did you feel about suddenly dealing in a different range of securities.  Was this difficult?

AA:  Yes, it was, because Government Bonds you could always offset one bond against another, i.e. the dates or the coupon, the rate of interest, are similar and therefore if you are short of one, you can't absolutely balance, but within a few thirty-seconds or a tick or two as we call it today, you could be covered.  If you were caught short of a large line of irredeemable, you could buy another irredeemable and it was a very good cover.  Now I entered into the fixed interest market and thought I could do exactly the same with that, that I could trade Allied Brewers against Guinness.  I discovered to my chagrin that that didn't exactly work.  It did work up to a point, but each stock had to be considered on its own merits.

BA:  How many of you were working on this particular book?

AA:  Five of us.

BA:  And where did you fit in the hierarchy?

AA:  I was put in at the top which was very attractive on paper.  In practice it isn't quite such a clever thing to do, because obviously people wonder why you've been put in on top of them.

BA:  Now this was also a time when fixed interest stocks were just beginning to go into a bit of a decline, particularly, we think of 1974 and the crash in values generally.  Again, do you have any particular memories of that time or that year?

AA:  Yes, being fairly cynical and fairly bearish by temperament, most market-makers are of a bearish stance for obvious reasons - not obvious to the outside world; but it is much more profitable for a market maker to be dealing in a Bear market than in a bull market because you were selling stock which you don't possess, which you borrow, so you're into the money and out of the stock.  But you can borrow the stock, and that generates a satisfactory money situation which means that instead of the stock costing you money to finance, you're actually taking money on the borrowing of the stock because you're holding the cash. So I went in fairly unhappy about having left Francis & Praed, convinced that I had to do this for my family and my children and my wife, and the gilt market was totally demoralised, and the fixed interest market reflected this.  I am a natural Bear anyway so I was busy selling stock.  The fact was I discovered I couldn't always buy it back. 

BA:  But you never at any point thought that you wouldn't be able to continue a viable career in the Stock Exchange?

AA:  Oh, often, when I was in Francis & Praed; in the sixties, particularly after my marriage, and particularly after we'd been censured for this bond-washing which I mentioned earlier.  The organisation was very sad; demoralised, I think would be the word and one did wonder what in fact was going to happen.  But then I think [to] anybody in the Stock market, which was very individualistic where you were using your own capital - we were jobbing with our own money, we weren't jobbing with a big corporation like Natwest's money - finance and credit was imperative, and you were very much aware that it was your capital which was being used.  Now that meant that if you had a series of bad years you had unlimited personal liability, and that meant that everything in my name could and would go and I'd literally be left standing up in my suit.  My car would have to be sold.  If I owned my house, in my wife's name, of course, it wouldn't be sold, but everything in my name would have to go.  It was unlimited personal liability.  And therefore if the partnership was not doing well one was acutely aware of this fact.  I don't say it hindered one's market-making but it didn't make market-making any easier.

BA:  Do you have any memories of the difficult conditions in 1974?

AA:  Yes, I do.  I remember feeling that it was fairly fortunate that we were short of stock and equities were doing extremely well, and it was unsatisfactory that I'd come into a new organisation, and I didn't seem to be able to produce the kinds of figures I'd like to be producing.  We always made money but we didn't make nearly as much money as I hoped we would.

BA:  Did you stay with this particular book for the rest of your jobbing career with Bisgood Bishop?

AA:  I was always fixed interest.  We did bring in a new section called convertibles, which is part fixed and part equity.  It has a higher coupon and the right to convert to an ordinary share at specified dates.  We opened the new book, so we had convertibles, debentures, unsecured loans and prefs.  We expanded it.  It was a minor book in a very aggressive expansionist organisation,

BA:  How did you go about running a book?  In the 1970s you had four people under you.  What role did you assume, and what was your relationship with the others?

AA:  I took a book myself.  I think you can only lead by example.  I would only consider that I would be respected or listened to if I could show that I could deal - no that is, sounds unattractive - if I could be as effective a dealer as possible.  And if you haven't got that ability, then you cannot tell other people how to run their books.  You wouldn't tell them, but you would indicate, you would never give an order.  You would say 'I think we should do so and so.' It was always the plural royal 'we'.  'I think it would be a good idea if we were short of stock'.  One floated ideas off.  But if you're known to be a profit-maker and profitable, people will listen to you.  If you are known not to be - the person I'd taken over from consistently lost money for the organisation.  He has now subsequently done extremely well in another area.  But I think you've got to be seen to able at whatever you're doing.

BA:  What would you do in cases where someone under you was losing a lot of money?

AA:  I'd stop it very quickly.  I'd tell him that he had the wrong book.

Tape 2 side 1

AA: Quickly I'd tell him he had the wrong book and I'd advise him to follow the party line, whatever that may be.  If he persisted in losing money I would then pass him back to my senior partner, or to the director involved, who would take it up.  He probably would be moved on to another book - he would be given another chance.  If he then continued to lose money or behave in an unsatisfactory or not in the way that the organisation wished him to promote himself or promote the organisation, he would be given a warning.  If he persisted, we would then either move him back to the back office or he would take himself off to greener pastures elsewhere.

BA:  Now, the industrial fixed interest market, I believe was one in which there were a greater than average number of put-throughs, particularly during the 1970s.  Do these figure in your experience?

AA:  Yes. I wouldn't have said that we were the major fixed interest dealers.  We certainly got our share.  They weren't very satisfactory.  Short term they were lovely in that it was money being put into one's pocket.  But if the deal had been allowed to be executed freely through the market, I consider often I could have done much better, i.e. if the broker hadn't matched the business and taken over the business of the jobber, and presented the jobber with this put-through business - which the jobber virtually was forced, by the rules, to accept - if it had been executed freely as buyer and seller on both sides, it might have been that the client would have dealt better.  Because you might have a situation in the market where somebody wanted to buy that stock, and equally somebody else in the market had a seller lined up, and it would have been to everybody's advantage for it to have been transacted freely through the market, except the broker who was giving you the put-through, who got the commission on both the sides.  Therefore it was very much in his interests to present put-throughs, but not necessarily to the market maker.

BA:  Could you describe, as a jobber, how these put-throughs worked, with reference, either to an example you can recall....?

AA:  Well without being arrogant there were innumerable examples, but the system would be that you'd come and ask me a price of the stock, and then probably say had I any particular axe to grind, i.e. was I particularly interested in buying or selling the stock, and I'd say 'Naturally, I want to do both', and I'd be told not to be stupid; but the question was 'was I short of a large amount of stock or was I holding a large amount', in which case I'd tell the broker not to interfere with my book, very politely.  And he'd say 'Well, Angus, if I had very substantial trade, what would your reaction be?'  And I'd say, 'Well, I'd like to see it'.  And he'd say, 'Yes, I know all about that but what do you really want to do?'  And I'd say, 'I want to transact this.'  He'd say, 'Have you got a buyer?' And I'd say 'Possibly'.  And he'd say 'Have you got a seller?'.  And I'd say, 'Yes, I think I probably have.'  He'd say 'Well, if I suggested to you that I wanted to trade around a half in...' and then he'd produce a very large amount of stock, 'would you be able to stop this business', i.e. 'Have you got a buyer who'll give more than my buying price, and have you got a seller who would sell cheaper than my selling price, because if you have, I can't do this business'.  Now it's unlikely, at that moment, that I could say, 'I have got a firm buying order, or a firm selling order in my book', because brokers just don't work that way.  They indicated that they might be interested in a bid, and they might be interested in a seller, but their clients are not going to leave firm orders lying around.  And therefore it was very difficult to stop this business.  It was definitely in my interest, and if I was on my toes, and realised that there was a possibility of business coming through in a stock, I might discretely try and find buyers and sellers, so try and make sure that I could execute this business.  But by and large, one was not taken by surprise, but generally this occurred at the end of business or early in the morning before the trading got going, and the business went through and one was unable to stop it, although one would very much like to have stopped it.  Having said that of course, everybody would say 'Oh yes, but he took several hundred pounds on that put-through,' but that isn't the point.  The point is that if I'd been allowed to execute that business, I might have made substantially larger sums of money - and the client might have dealt very much better, or the clients, because I might in actual fact have had people outside who would have preferred to have dealt on different prices.

BA:  How did these particular situations affect your relations with the brokers.

AA:  Well the brokers, I think, with all due respect to them, and they were great friends, do in these circumstances, get rather powerful.  I won't use the word arrogant, but they do become very sure of themselves, that they had this business and they wanted to do it, and they had it in very large amounts of money and they didn't want to be mucked around by the market.

BA:  Had your relations as jobbers with brokers changed in any way since the earlier days in your career.

AA:  I think the jobbers had got much closer to one another.  They were not so independent as they were.  Of course now we are very independent, again under the new dual capacity, but under single capacity, towards the end, we got very close to one another, because we considered we were being outgunned by the broking fraternity.

BA:  And how did you try and respond to the situation of being outgunned by the brokers.

AA:  Well I think we discussed our business between ourselves very informally and if there was a certain broker that we felt was abusing the system, we couldn't stop him, but we'd endeavour to make sure that, as far as possible, other people, if they had business, that it was exercised and these put-throughs were stopped.  But it was not popular with the broker involved, I can tell you.

BA:  Did this make jobbing any less competitive, because you were in much closer informal touch with each other?

AA:  No, I don't think it did.  I think jobbing is always, in the final count, how it affects oneself, and how it affects oneself vis-a-vis the market and one's brokers.  It isn't only how it affects myself - I've got to think of the future.  I've got to deal with you again, or Bloggs again.  Yes, I may, short-term, be very clever, but it won't be very clever on a long-term view.

BA:  Did you feel any pressure on single-capacity in other ways?

AA:  I probably have a very parochial view.  I'm obsessed by the fact that we were under-capitalised.  I'm now a member of NatWest, which is one of the major joint stock banks.  Risk, of course, is of prime importance, but credit is no longer of importance. I've virtually got - I wouldn't say unlimited [finance] - but if I require finance I can get it, whereas for the previous thirty years of my life I simply couldn't get it.

BA:  Were these issues you actually worried about, standing on the floor of the House, trading day-to-day?   Were they things you were conscious of?

AA:  No I'm afraid, probably it says a lot, or not, as the case may be, but at the end of the day I leave the office and I completely switch off, apart from the fact that I'm very much aware of [how] the news and the interpretation of the news by the media may be influencing people.  But my individual positions...  Once, very early in my career, very very early on, my senior partner was away and I got involved in a stock and it ruined a weekend for me, and from that moment on I swore that once I walked out of the office, I would not worry about my position.

BA:  Was capital something that you, as partners in Bisgood Bishop, talked about.  By this stage you had outside shareholders.

AA:  Yes.  It wasn't [talked about] to anything like the extent, because we had lines of credit and we were extremely viable.  Although we were the smallest of the five market-makers, we were the most profitable of the five and, I can say this because I wasn't a senior partner, we were very much respected and considered to be of considerable worth and if need be, money was available.  Of course it was very expensive money and therefore there were still constrictions, certainly on the fixed interest [book], because it was profitable, but it wasn't nearly as profitable as the equities side, money for money.

BA:  Now, at some point Bisgood Bishop and Smith Brothers were contemplating a merger.  Did you have any feelings about that?

AA:  Yes I felt  Smith Brothers was very largely controlled by a group of people who I didn't think would fit with Bisgood at all.  It didn't really affect me because I wasn't on the management committee of Bisgood and I wasn't controlling Bisgood, but of course I was asked and my reaction was 'on paper and in principle it sounds good, but in practice I think it could be a disaster'.  So I was very relieved that it didn't take place.

BA:  How did you feel when the Office of Fair Trading took on the Stock Exchange rule book and initiated the whole train of events that eventually led in 1986 to Big Bang.

AA:  I think I felt that it was an excellent idea.  I had no idea how it was going to work out.

BA:  And what about the demise of single capacity?

AA:  Well, I think it had to happen.  If you kept it as it was, - not you, I mustn't personalise - if we kept it as it was, it was extremely effective from the client point of view, because he had the agent and the principal,  and he was certain that if he had a good agent he would have a good deal.  I think it's very much harder for the small private individual to be well looked after today.  But against that you've got to balance [the fact] that the whole scenario has changed, that we are now on a 24-hour world-wide basis, that by good fortune London seems to be in the timescale of Europe and we are clinging on to our leadership in this area and therefore we have got to be on an international basis.  Now if you are playing on an international basis there is no way that single capacity and its capitalisation could cope with it - I'm sorry to keep on coming back to capital, but it is absolutely vital in my opinion - whereas today, downstairs we are dealing in millions, tens of millions, fifty millions of stock at this moment.

BA:  How did Bisgood Bishop begin to position itself in the run up to Big Bang?  For example when did you first become aware that the organisation, the firm wouldn't be able to continue as it had and simply stay as an independent firm trading in the Stock Exchange?

AA:  Well I think we'd already, before I joined that, seen this, in the fact that we brought in three outside partners, each holding 10 per cent of Bisgood's capital, of absolutely top quality firms, who were prepared to put their money into what was a relatively small jobbing [firm].  It was a tremendous affirmation of confidence, and in fact it was one of the influences, that I felt that if these people were prepared to put money into Bisgood - one can't see everything from the outside - it was probably a very satisfactory situation to find myself joining.

BA:  As we come up to the immediate years before Big Bang, how would you contrast the Stock Exchange of the early eighties with the Stock Exchange in mid-fifties you first came to know.

AA:  Oh, well the Stock Exchange in the mid-fifties was like a giant preparatory school, that's a school for young little boys, and it was very much run on - how shall I say - the fag-master and the fag, the senior and the junior; and there was an inner circle and an outer circle, and you had tremendous characters; and it was like an informal club, albeit a very effective and very profitable club - much more archaic and antiquated.  

BA:  Are there any particular examples of this archaic-ness.

AA:  Well I think the mobbing and the fooling, and the horseplay.  When you were getting married your trousers were taken off you and thrown round the Stock market, that kind of thing.  It was like a rugger club, it was all boys together.

BA:  When did that begin to disappear?

AA:  I think it began to disappear when we moved out of the old market.  The ragging and the fooling and the signs being stuck on peoples' backs and the practical jokes.  There were never ever any cruel ones, I promise you that, the really cruel ones were never perpetrated, but there were some incredible witticisms, and the humour was extraordinary.  It wasn't my style at all, in actual fact.  But one couldn't help killing oneself with laughter when some of these things happened.  And there were people who had the ability to throw paper darts and stick them in a fan 50 yards up to the ceiling.  It made one think that it wasn't a viable business and behind all this, and during all this, enormous business was being transacted; not by today's standards but by those standards, when money had considerably more value of course.  By that I mean that a deal in a million or ten million was a very large deal, whereas now there are deals in 50 and hundreds of millions.

BA:  Are there any particular characters that stand out in the memory.

AA: Well I thought you'd ask that one.  I did actually jot down.  One was the senior partner of Wedd Durlacher who was Dick Wilkins, who made Wedd Durlacher.  He had tremendous character.  He had terrific charisma. He was a bachelor and he was a bon viveur.  He was obviously an immensely able man.  He had tremendous charm.  As a junior in small opposition, he would go out of his way to be extremely pleasant to one.  I don't think he had many enemies in the Stock Market.  The other one I rang this morning was a broker called Marcus Colby, with W I Carr.  He's reached a remarkable age.  He was a terrific character.  Always had some incredible witty remark.  He could always, when you looked like death warmed up, due to the market having gone wrong, manage to make you feel that there were other things involved.  There were some remarkable people.  Tremendous humour.

BA:  Had jobbing changed?  Again if we contrast the eighties with the fifties?

AA:  Yes, I think it had.  It had become much more professional. I think there were a lot of people who were jobbers who really weren't qualified to be jobbers, honestly.  They may have been academic or they may have been through accident or the fact that they were the sons of senior partners.  In fact one of the most successful broking firms has a rule, as you probably know, that no partner's son was allowed to enter that firm.  And they rose, during my lifetime, or my period in the Stock Market - thirty-five years, whatever it's been - from small medium to one of the top two or three.  Just gives one an idea of the professionalism.  They would not countenance - however good the boy was, he was not allowed to come into the organisation, because it was felt that it had a restrictive view on the situation.

BA:  What would you say it took to be a successful jobber?

AA:  Well I thought you'd ask me that.  I'm sorry to say that again, but what did I say.  I said flexible, intelligent and a realistic view of events as presented to an investing public - that's the private and the institutional investor - by the media.  i.e. the newspapers, radio and television.  I think underline flexible and intelligent and realistic.

BA:  Again, could you refer those qualities to any concrete situations, concrete episodes?

AA:  You've got to be prepared, at any moment, to change.  But you mustn't be blown around by the wind, but if something does happen, you've got to change your view; well, if you've got to change, you've got to change it quickly. You can't just be sitting - I hesitate to say it - sitting here talking about the past.  You've actually got to be acting.  You can't just hope that it'll go away, because it won't.

BA:  Was jobbing a risky business in that case?

AA:  Yes, because your own capital is much more at risk.  Now your own personal job is at stake.  I mean your job is on the line; if you go and lose a lot of money you'll probably find yourself walking the streets looking for some other - or hopefully looking for somewhere else to be employed, but previously if you lost a lot of money and you were hammered and bankrupted, it could mean that you and your family were literally on the streets.

BA:  Were there cases of that happening, unsuccessful jobbers who did go out of the Stock Exchange?

AA:  I think like all life, people tend not to dwell on the unsatisfactory.  A lot of people have gone out of the market over my period, a lot of people, and what happens, Bernard, is you tend to disappear, I think is the answer.  You leave, you're censured, or you're hammered or whatever happens to you through your own fault or not your fault, you can't get a job in the Stock Market, you can't get a job in the Square Mile; you're not blacklisted, but it is not possible for you to be employed, due to being criminally charged, or something like that, so you say you'll go and run a pub.  Then it's generally the wives who are the sufferers.  We've got a series of scandals on our hands at this moment of time.  In the particular case that I'm thinking of ten people have been charged and are coming up before courts.  Well already one of their wives has died, and I must stress that it is the families who suffer.  Because the men are actually in control of the events, the wives cannot control them, they don't quite understand what's happening.  For children it must be a nightmare in school to know that your father has been charged with fraud or something, your father being the most honest and reputable person you could possibly imagine, and to his compatriots.  So I think decline and fall is one of these tragedies.  It's happening all the time.  You go down, you take another job and you disappear.  And of course if you're a great friend of mine, I'll keep up with you, but I'm not going to go shouting round the City what you're doing.  I'm not going to go telling everybody your wife's died and you've had to take your children away from school, and that you're running a pub, but unfortunately you've just lost the licence and you are now on National Assistance and living in a Council house.  Not really a very happy situation.

BA:  You mentioned families.  Now in the case of someone who's had a successful career, for example yourself, if your children came to you and said 'Father, what would you think if we were going to the City, or going to the Stock Exchange?'. Would you encourage them?

AA:  Oh, completely. But I would say that it's a tragedy you're not going into industry or commerce, because it is, how shall I say, [an] area [i.e. the City] which has been immensely popular.  When I entered forty years ago, it wasn't tremendously popular, in fact, as you probably heard on other interviews, over the portals of the Stock Exchange there was "Ye who enter here, abandon all hope".  I think, I said it slightly wrong, actually it was "Abandon hope all ye who enter here", was the actual so-called motto.  But I've had enormous fun.  I've enjoyed it enormously.  You politely say successful.  I would qualify that, I would say semi-successful, but I've enjoyed every minute of it.  I think I can say that - apart from those stagnant years towards the end of Francis & Praed which were unhappy. I would encourage anybody else to come in.  I think it's a fabulous way of life.  I just think it's a tragedy that the country makes it so attractive.  It's always been the case that one's been able to make considerably larger sums of money in the Square Mile than you could in industry, and I just feel that there should be more engineering graduates and people who are prepared to make widgets and things like that, than sit dealing in stocks and shares.  But as we do deal in stocks and shares, let us be the best, and let's make London the lead centre, next to Melbourne or Sydney or Perth or wherever it's going to be in the Far East.

BA:  Finally, what, again thinking about pre-Big Bang, what would you say had been the strengths of the jobbing system as you knew them?

AA:  I think the great strengths was the fact it gave the client an absolutely fair deal.  He knew, using an agent, that the agent would get him the best price. Now it's very difficult for him to get somebody who can give him a genuinely unbiased opinion and get a really close price for him, unless he goes to a small agency broker.  That's what I feel about it.  But I think there are so many pluses in the fact that we are now capable of dealing with the Nomuras and the Merrill Lynches of this world, that we have now got ourselves into a very strong position financially and let's hope we can capitalise on it, to the benefit, not only of the people in the Square Mile, but the whole country.

BA:  Well I think that's a good note on which we can finish.  Thank you very much.

AA:  Thank you, Bernard.