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

Interview No. 40: Les Turtle

Interviewer: Bernard Attard

Institute of Historical Research: 10 October 1990

Tape 1, side 1

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

LT: Yes, I was born in Stratford in 1927.  My parents moved to Romford when I was six months old and I lived there until I was 30.  I married and moved to Billericay, and after several years, we moved down to Kelvedon. We've been there until now, which is 27 years.

BA: What date in 1927, was it?

LT: Oh, 15th of January, 1927.

BA: What were the names of your parents?

LT: William Howard Turtle and Alice Maud Lillian - Wade was her maiden name.

BA: And what was your father's occupation?

LT: He was an engineer, a refrigeration engineer in charge of a big cold stores in the docks; in actual fact, in Wapping.  We used to go there as children, a great thrill.

BA: Did you have brothers and sisters?

LT: Yes, I have three brothers.  

BA: And what did they do as careers?

LT: Well, initially my older brother was on the Stock Exchange as well.  He joined a firm called Dunkley Bedwell & Marshall, who are still around but been taken over.  He wasn't there very long. I think he was there until the War; then he went into the army.  And after he came out he went into agriculture himself.  He ended up in Pest Control which became Fisons.  He was on the chemical side advising, and then on the insurance side of it in the end.  He's now retired and living in Spain.  My next brother down did various jobs.  He ended up as a messenger in the Bank of England in actual fact; my brother below that - I have three brothers, one older and two younger, as you will appreciate - worked for a Lloyds' firm for a while.  I can't remember why he stopped that, but he stopped that and he eventually went up to live in the Midlands and he works for Rolls Royce now. 

BA: So at some point, all of you had City jobs, of some form?

LT: Yes.  Well I think if you lived in Romford, London was quite near to go to at that time, and you looked to London to go to work, really.

BA: Where did your parents send you to school?

LT: Oh, I went to a normal local school; didn't do very well at school, I'm afraid.  Part of that was probably attributed to the War, but I was one of those people who was expected to pass the 11-plus, but didn't.  I went on to senior school, and of course at that stage the War had started and we had a lot of interruption with our schooling.  We used to sit down air raid shelters and that sort of thing.  In fact, at one time the schools were closed for some months; we used to just go out once a week to collect work and bring it home.  After that school settled down again but we spent quite a lot of time in air raid shelters.  But I left school in 1941 at age 14 and by chance, I suppose, went to the City.  I went to the local employment exchange.  There's nothing startling about my start in life.  Yes, I had gone to them,  but my headmaster - a chappie named Skinner, a very nice man - had a friend called Newman, who actually worked for a member firm and, I think partly because of the War and the fact that you went to work at 14 or 15 and you went off to the armed forces at 18, there was a continuous through-put of people in order to replace them.  And they were looking for a young man and I went up for an interview. My mother accompanied me and I made her stay downstairs and went up to the interview on my own; had an interview and they took me on.  I started work with a firm of a stockbroker's, not a stock jobber, a stockbroker called Fenn & Crosthwaite.  They are now part of Henderson Crosthwaite.  

BA: Did you have any idea of what the Stock Exchange was about?

LT: No, none whatsoever, no. 

BA: And what kind of job was it that they'd employed you for?

LT: Initially, I think virtually most young men were started in those days as a messenger and post boy, really.  You've got to remember that in those days, you hadn't got centralised systems: you actually delivered individually your stock to each individual firm, went round and collected your cheques from those firms.  So you literally walked all round the City - and ran on occasions as well.  And it was many years later before we had what they called Central Stock Payment.  So the main job during the day would be, as I say initially ... well if one goes back and looks at it, our offices as I've described in those notes, were very Dickensian.  We had a large mahogany counter when you went in the door, there were two gas fires in the office, the office itself was high desks with brass stands in the middle of the high desk which were back to back, with pull down lights that came down.  You had high stools which we'd either sit on or stand at your desk.  The manager and the assistant manager had low desks, but the rest had high desks.  I'm talking about a firm that was probably 40 strong in absolute total including all the partners, everybody.  So that was the sort of office one worked in.  And, as I say, initially one would be a messenger.  You'd be responsible for getting the books out in the morning for the men from the safes, putting them away at night, running as I say and delivering your stock, taking names, collecting dividends, that sort of thing, paying in obviously at 3 0'clock, 3.30 - 3 o'clock I think it was - and after that you'd be doing the post.  And when you'd finished that you could go home, which would probably be about 6 o'clock.  

BA: Was there much business in the Stock Exchange during the War?

LT: We were always reasonably busy, yes.  My memory nor my interest of those times would allow me to say the business levels were x because I just wouldn't know.  As a firm I think we were doing 40, 50 bargains a day, which was quite reasonable.  It kept us busy enough, and obviously the firm made a profit on it.

BA: And how long did you stay with the firm?

LT: Well, I was with them until I went into the army.  What actually happened after a while I then became a blue button - an unauthorised clerk - with them.  One's duties at that stage ... I should recap a little, I suppose, and say that up till that stage I'd done all the jobs in the office.  One got rapid promotion in those days because there weren't the people and you therefore had to quickly learn jobs and do them. I'd done all the jobs in the office.  I became an unauthorised clerk, one's responsibilities there were checking, and after that working in the actual Stock Exchange, collecting what they called the 'Offer Lists' from the jobbers.

BA: Roughly when was that?

LT: I would guess 1944.  Settling jobbers' ledgers differences in the room, and obviously going round getting prices.  You got a list of prices - you went round at certain times, as well as getting prices when somebody wanted a particular price.  Interestingly enough, a couple of anecdotes going back to that time, if you're interested: you can appreciate that when one first started work you had to buy a suit because we had clothing coupons in those days and it was a case of one suit - I don't even remember whether clothing coupons encompassed one suit or whether one had to have some of one's parent's clothing coupons - anyway it was one suit.  I actually wore it out and my mother said 'Leave it at home tomorrow whilst I repair it and you'll have to go to work in your sports jacket.'  I said, 'No, you can't do that, not in the Stock Exchange.'  She said, 'You will.'  So I went in my sports jacket and flannels, quite respectable but not the thing for the City.  Obviously they were much more tolerant then than what they would have been today because although I was cheered around the place that was all.  But the then Chairman of the Stock Exchange, Sir Urling Clark, [of] Ferguson Clark which became part of Pinchin Denny in actual fact (he was the Chairman of the Stock Exchange); he came up to me about 3 o'clock and said, 'You really shouldn't have come into the Stock Exchange dressed like that.'  I tried to explain to him, 'very sorry but I had no option'.  I don't think he understood.  It's probably true to say people like him have a number of suits.  The other interesting thing: we had two dealing partners who were on the floor all day, did all the dealing - a Mr Dunston and a Mr Cloquet; interesting Christian names, John Sharp Neil Ghurka Cloquet, quite fascinating; Ghurka spelt as in the Ghurkas - and he used to call me his pocket battleship.  I was very small.  I'm small now.  But I was about 5 foot then and I used to move around the floor quite quickly and I was known as his pocket battleship.  But anyway, I went into the army in 1945, I was still in the House at that stage when I left to go in the army.  And I came back from the army after just over three years in the army in 1948.  Before I went in I was on £4 10s a week, when I came back I was on £4 10s a week!  I stayed with the firm.  I went back down the house, I was a blue button again.  Unfortunately I contracted rheumatoid arthritis about a year after being back in the City, which meant I was off work some months.  I must say the firm were very fair.  Eventually I went back to work after about nine months off work, but I could no longer walk properly.  I had an ankle iron and a very bad limp at that stage.  I went back into the office and I stayed in the office.  I did very many, many of the different jobs in the office.  I actually went to the City of London College and took Stock Exchange exams round about that stage and passed the exams and got a prize from the Stock Exchange Council - I can remember going up and having it presented - anyway it was a very long time ago.  I was with Fenn & Crosthwaite until 1954.  In that year I had had three rises.  I actually asked for a rise because I think I was on £7 10s a week by then and they weren't prepared to give me any more money.  One of the chappies in the office who I was very friendly with, a much older man, who was very good on the Stock Exchange, he really knew his business...  I can remember I was at Fenn & Crosswaite when for the very first time as far as I can recall, bank rate was changed from 2 per cent to whatever - 3 per cent, 4 per cent.  Nobody seemed to understand what it meant at that time but he did and explained it.  But anyway, he had a number of clients himself - he was a very astute individual, although he was only the dividend man in the actual office - and he went for an interview at what was then Durlacher Deacon Godson.  And he decided not to go to them because if he went to them he could no longer deal for clients and the income he got from that wasn't worth losing relative to the salary he would have got from Durlacher.  And he suggested I went round for an interview. I went round for an interview, and they offered me a job.  I decided to take it and I went there in 1954. One thing I suppose one should say about the City before we leave that episode of one's life, people talk about drink and this sort of thing in the City today, but it's nothing like it was then.  There was a lot more drunk in those days.  We had several people in our office, one could almost only really describe them as drunkards; they were out at 11 o'clock, they were out at 2 o'clock, they'd go out from the office in the evening and go into the pub again.

BA: Were they partners or staff?

LT: Staff.  On the whole the partners weren't like that, but these two particular men in our firm used to cause a lot of problems in actual fact.  The manager was very old and probably a relatively weak man, couldn't control it.

BA: How widespread was that?  Was that something in other firms too?

LT: A lot more drink drunk in the City I think in those days to what there is today, although there's quite a lot of social drinking now - it's more after hours now.

BA: Was there any particular reason for that?

LT: Whether it was a hangover from the Great War, I just don't know.

BA: Just going back a little bit to your days as a blue button, do you have any early memories of what it was like going into the Stock Exchange?

LT: Well, it was the old building which was a lovely old building, very large compared with today's Stock Exchange; big pillars and people used to sit around the pillars; the mining market was down the other end of the market from where the war memorial was;  I suppose the extreme difference is the number of jobbing firms - very large number, hundreds probably, 5 or 6 [ie. several] hundred - and each jobbing firm specialised in one particular market.  So you actually had markets then in those days within the Exchange.  Where the Exchange is now known as a market, in those days it was a market overall but you had markets within the Exchange - you had an insurance market, a shipping market, a railway market, a mining market, oil market; they were individual markets and the firms that jobbed in those markets would sit in that part of the market.  So you'd go round to that individual firm; if you wanted a price in an oil stock you'd go into that part of the market.

BA: Were there particular firms that Fenn & Crosthwaite often went to?  Say as a blue button did you find yourself going to...?

LT: As a blue button I think you went to the people who would look after you best in terms of giving you prices.  There was a firm called Frisby & Co. The senior partner of Frisby was a VC actually from the Great War. He was an absolutely marvellous man - he always had time to talk to you, you know. Another little anecdote.  I had a new suit on one day and - I can't remember the name of the gentleman now - but anyway I went up to him for some prices and he said, 'Oh, you look very smart', and he actually pulled out a silk hankerchief and put it in my top pocket to go with the suit.  People wore cravats then as well.  There were a number of single person firms in those days - they brought out rules later which stopped the single person firms - and that one person would do his own books as well, of course; he'd go down and do his own checking and this sort of thing.  I suppose in some ways it was much more clubby than what you know ... well, today, it's no longer a club.  But even prior to Big Bang it had changed a lot. I think you had gentlemen sitting down there probably in their 70s and 80s in those days and it was a way of life.

BA: Did it ever strike you at that stage that jobbers and brokers came from different backgrounds?  This is the thing that's sometimes said.

LT: Backgrounds, in the context of?

BA: Came from different social backgrounds?

LT: I was never aware of it, put it that way.  If it was so it's not something I was aware of.

BA: Was Durlacher a firm that you ever dealt with when you were with Fenn & Crosthwaite?  

LT: Oh, yes, F & N Durlacher.

BA: Where did they figure in the market?  We think of it now as being the big jobbing firm.

LT: Well, they were one of the jobbing firms, certainly not outstanding.  They were a jobbing firm in the brewery market.  The firm then I suppose was probably Ferguson & Clark.  Because they were in several of the markets and as I say the senior partner at that stage was the Chairman of the Stock Exchange.  In broking terms, probably firms like Foster & Braithwaite were the firms at that stage.

BA: Now what was the job that Durlacher employed you on?  What was the job that you'd been interviewed for?

LT: Well I was interviewed for various things - dividends, names and everything - they expected me to do a number of different things.  When I went there I actually worked on their, what they call, 'list books' which is a term that's vanished today, really.  It was related to passing of tickets or passing of names as we called them in those days.  You were actually responsible for taking out a list of all the bargains, all the individual stocks.  And at the end of the account the buying firm would pass a ticket or a name, call it what you will, to the selling firm, [in this case] the jobbing firm, and he would in turn pass that to the firm that sold to him, enter it through his ledgers (so that the actual difference between the bargains - the difference in value between the bargains - was collected via the jobber's ledgers) and the seller would deliver to the buyer the stock on that ticket and be paid direct, of course, from buyer to seller - the ultimate buyer to ultimate seller.  That's the way settlement took place then.  It was important, in terms of jobbing, to actually run a name list accurately because you could get into a mess obviously. We were a completely manual firm at that stage, to look at the firm.  In some ways, again, if you want to go back on history, when I went to the City, a stock transfer had to have the seller's name and the buyer's name on it, the seller and the buyer had to sign it; very often you had numbered shareholdings and those numbers had to be written onto the individual deeds.  If a deed need altering in theory it went back to the person:  for instance, you had a sold deed which you're going to deliver to the market and a mistake was made on it, in theory it had to go back to the seller to actually initial.  So the settlement procedure was really quite cumbersome.  The tickets that you passed had the buyer's name written on them.  You had to write that onto the deed before you delivered it.  The Stock Transfer Act of 1963 changed that of course because you no longer had to have a buyer's name on the ticket: the seller signed it and the buyer didn't.  And the other thing at that time [pre Stock Transfer Act, 1963], if a person [ie. broker] sold let's say 1000 shares and due to the way in which the tickets were passed he got five different tickets, what we call shapes, which added up to that 1000, then the selling client would have to sign five deeds so he couldn't actually sign anything until [his broker received] the names, could make out the deeds and send them to the client to be signed.  So it all delayed settlement, all made it very pedantic and very difficult.  And then you'd deliver those deeds to the buyers of course and they would pay you.  The Stock Transfer [Act] in 1963 changed that quite dramatically in that the seller had to sign the deed, and the buyer's name did not have to be on the ticket.  You could sub-split that deed to marry it with these five different tickets, for instance, as I was just mentioning, by certifying at the Stock Exchange without having to go back to the client, so you could actually send a transfer to the client well before settlement, so it sped up settlement. So this sort of change took place.

BA: Did that mean that some firms would fall very far behind in their settlement?

LT: Well, yes.  Settlement, it's one of these animals in a sense that there's a level of activity which you can cope with comfortably, below that you're bored and above that you're stretched.  And whenever you got really busy, you can think of the booms of '68 and '72  - I can't go back before that at the moment, I can't think when the booms were but it doesn't matter - yes, you got severely stretched; you'd be working very long hours and you'd get well behind.  The interesting thing about those days was that when the boom passed people actually sorted out the problems that had come from that period of activity.  Firms would follow them up and sort them all out.  We would run a suspense account until we had sorted them all out.  It might be six months before we sorted them out.  The last booms we were seeing people turned their backs on the problems and they were never sorted out.  The ethos changed completely, really.

BA: Is this post 1982/83?

LT: I'm stuck for a thought of the time now but the last time we were busy before Big Bang it was very difficult to get the problem sorted out, very difficult indeed.  But certainly, as I said, going back, all the books were kept manually, now moving to Durlacher - it was Durlacher Deacon Godson when I went there, they had just had their first merger - all the books were kept totally manually.  Theoretically a name clerk not only entered the bargain into his list books but he then proved that his list book agreed back to what we called a rough sheet, which was a daily balance of our dealing positions by market.  And that in turn was agreed to our journal - our journal being the book in which the prime entry was made of the actual bargains in which we recorded our profit and loss.  So we had these three elements which had to be reconciled.  And always on the first night after the end of the account - the Monday - we would actually be very late, 9, 10 11 o'clock at night, trying to reconcile these three sets of books.  The rough sheets, in theory, were very important because these were actually kept daily.  They were your actual jobbing positions in theory.  In practise they were often quite wrong.  And of course the other problem was that by the time you'd actually valued them out and cast up the individual sheets to actually get to whatever the dealing position [was], it would be about midday before the dealer knew his dealing position of the day before. So the elements of control weren't what they are today in terms of dealing risk. But then dealing risk wasn't anywhere near as great as it has become.  In theory, the most important thing in jobbing is controlling your dealing risk, obviously, and therefore knowing your book position.  Moving on, the real change in the scene of jobbing in the context of the diminishing number of firms and increase in size to my mind couldn't have taken place without mechanised accounting systems.  It's a little chicken and egg in a way in that firms were beginning to grow but at the same time - this is my clear view as a person heavily involved in the management of settlement and in later years management of settlement in the context of things like Talisman - they went hand in hand; the growth of the jobbing firms went hand in hand with the ability to control one's records, one's books.  

BA: Can you describe how it developed with Durlacher?

LT: Yes.  What actually happened, it was 1957, 58, I think, this firm Hollorith Punch Card Accounting -  they were British Tabulating and then became Hollorith and then became ICL; ICL eventually, well it's inside STC now - them and IBM and Power Samas all did punch card accounting systems, and Hollorith developed a punch card accounting system for jobbing firms.  The first firm to have it was Ferguson & Clark; and then we had one put into our firm.  Myself, one other person who was my deputy manager later on - Victor Blake - and a person called Tom Sherville who was the assistant manager of the office at that time, became involved in putting this system in and learning how to run it, to manage it; we went away for training in order to use the machine.  I don't know if you know anything about these punch card accounting systems.  You had a card, an 80 column card into which was punched a record.  You could actually punch alpha.  You could punch numeric.  The card in a sense had numeric lines this way [ie. horizontally] and columns that way [vertically], and the columns were known as fields, and the fields were related to things like quantity of the bargain, price of the bargain - this sort of thing -  the firm you dealt with.  Every firm was coded.  The stocks were coded.  We had all our own codes at that stage, both stock codes and broking codes.  It was well before the Stock Exchange started to think about coding firms.  And the way in which you actually ran the systems is you had girls who punched and verified these cards.  You had machines to do it. So you put your bargains into these cards, and you had what they called sorting machines and another machine called a collator which would merge cards together in a given order.  And the sorting machines of course were for sorting the cards into given orders.  So in effect what you did you had a days business which you sorted into a given order and the next day you'd sort your business, you'd merge the two together on a collator.  At the end of a period you had an actual accounting machine which you put it through, which was called a tabulator, and the cards would be read by this machine and then you'd actually print your list books or your jobber's ledgers and it would actually cast up the total for you.  And you'd run a control to prove the machine did the job properly and if it didn't - which they didn't quite often - you would then have to find out where you had gone wrong in order to balance your actual accounting books.  But it totally revolutionised jobbing in that you could control your books.  At Durlacher at that time it was a fact that we just never balanced - I suppose you realise what I mean by saying balanced - our trial balance we couldn't balance, it was always wrong.  And it was imperative in theory in terms of double entry book keeping that you can actually balance your books.  So punch card accounting brought two things really: 1) the fact that you could actually balance your books, and you could much more quickly get your dealing position down. That was one of the first tasks.  You got your list books out on time ready for your actual ticket passing and they were accurate.  In other words you had a balanced set of records really - debits equalled credits - which was rather marvellous.  The other thing they did was they enabled us to have a concept of what were called 'Position Agreements', which was to prove our jobbing position at the close of the account with the action we took in settlement at the close of that settlement period, to prove that the theoretical stock position equalled the theoretical dealing position.  And that was really quite a new concept.  It was a stock control system basically, by another name, a new concept which became very important in many ways - the backbone of the control of the stock side of the business.  So in a sense as a jobbing firm you've got two elements which really matter: one is your accounting control and the other is your stock control.  Because you can well appreciate in a jobbing firm if you think you've got £500 of a particular stock on your book but you can't actually ascertain where that physical stock is related to that, then you've got to do one or two things: find the stock or write your position off.  We actually used to do both in the early days, but it got control of that situation.  Anyway, 1957, 58 we put a punch card accounting system in. They worked very well. We had them for many years right through to 1968 I think before ours went out eventually.  We ended up with 5 tabulators, I think, and two sorters and three collators; and at that stage we were doing quite a lot of business.  Again I can't really remember the business levels but we were onto the sort of business levels that we've seen in recent times - 5 or 6,000 bargains a day, peaking at 10,000, and keeping control.  We became involved in the very early stages of computers in 1959.  Esmond Durlacher met Anthony Salmon who was the head of Leo Computers at the time.  It was a cocktail party I believe.  As a result of them talking, Esmond Durlacher felt that he was interested in the concept of using computers in the firm, particularly from the view point of controlling our jobbing risk.  By then I had become solely in charge of our punch card accounting system and I had changed it quite a lot from what originally was installed; because when it was installed  - and again I'm going back a little, you'll find this is going to be rather rambling when you listen to this...

BA: No, it's all very interesting.

LT:  When we originally installed it, as a jobbing firm we jobbed in a number of different markets - Brewery market - can't think of another market offhand but let's say the insurance market, bank market; and each of the sets of dealers would have their own books obviously and we had to reconcile back to those books.  And the only way we could do it when we put our punch card accounting system in was to actually have a set of stock codes of which the first figure of the stock code was related to that particular market.  So it really meant that as a firm in settlement you ran a number of alphabetical sub-sections, which meant it was very difficult to actually manage your business, because the first thing you had to know if you got a ticket in from the market on ticket day was it a brewery stock, was it a textile stock, was it a wool stock?  If you didn't know that you couldn't give it to the right person.  And as we grew as a firm that changed from a minor problem to a major problem.  One of the things I did when I was put in charge of our punch card accounting system was that I changed the whole system to actually get the whole thing in a straight alphabetical order but have a relationship back to the dealing book via a dealing section number, if you like, which we allocated to each dealing section.  So we then ended up with a much more sophisticated system which allowed us to suit the office in the context of having an alphabetical system, which was only broken down between equity shares and fixed charges - because again they were rather different, in the whole way in which you operate them - but still reconcile back to the jobbing books in the various pitches.  So that was our first major change away from the initial system we put in.  I was in charge of that system at that stage.  And it was decided to look at computing.  I was asked to become involved with Leo Computers and I went on various courses with them. And then we designed a system which was related to our bargains being sent to them after we had punched them and used them in our own system, they had them - it might have been the other way round, it doesn't really matter, too many years ago now - this is about [1960].

Tape 1, side 2

LT: 1960.  We then decided to build an accounting system on the computer because it had a number of advantages to do so.  And I think we also felt it was the coming thing.  Remember these were the early days of computers; Leo II was the machine at that time, built by Leo Computers.  Leo Computers was part of J. Lyons in actual fact.  One of the first machines developed in this country [was] Leo I.  Leo II was a - sidetracking a little - vast valve machine with mercury delay tubes used to store data; it took up an area probably 10,000 square feet - it was a very large room anyway - and it was a very unreliable machine, because of the valves, probably, so we had a lot of trouble with it.  Anyway, we developed an accounting system to go onto that machine to take the place of our punch card system.  And most of it was ready by about 1963.  I think it was 1965 when we actually went 'live' on it, against my recommendation because the one thing that it proved to be was totally unreliable and our debits invariably wouldn't equal credits because somewhere along the line the way the machine worked it would drop binary bits which changed values.  So we ended up going 'live'; the manager of the firm in those days made the decision to go live and we scrapped our punch card system, which was getting old by then.  And we never balanced again for another two years - well we balanced sometimes with a great struggle but it was very difficult.  We were a much larger firm by then of course.  Meanwhile, Leo III had been developed in 1960 as a machine, 1960/61, and that was a much better machine, much faster; it was a multi programming machine - I can't think of the right terms now but you could run more than one program on the machine at once.  And we decided in something like 1965, about the time we went 'live', we would actually reprogram the whole lot to go onto this other machine.  And eventually we formed a bureau in the City with Leo Computers, in Austral House which we moved to in 1960, and we had a Leo III installed in our firm which we bought which they operated on our behalf and operated on their own behalf as well. Because you'll appreciate with the sort of work we did our work had to be done over night between the close of dealing and before the next morning and there was a lot of spare time on that machine, plus the fact that you could concurrently run different programs on it.  It meant you could actually do a lot of work - quite a powerful machine.  We then had a very successful system which we developed further.  We enlarged the scope of the system to take in all our transfer work  - ticket accounting - to give us a real stock control system, position agreements which took account of our actual physical boxes, to make all our returns to the Inland Revenue related to Stamp Duty under section 42 liabilities.  Remember in those days section 42 - Stamp Duty - was 2 per cent.  Jobbers had a jobbers' stamp concession.  I don't know whether this has been talked about already.  You could stamp on 50p and if you hadn't taken that stock out of your name in two months you paid the balance.  So one of the elements of control, which was quite important, was to try and turn your stock over so as to avoid paying the other 1 1/2 per cent stamp duty.  So we actually could computerise this whole thing.  We ran a computerised diary essentially and allocated an identity to the stock that was delivered in and then allocated the stock going out against it, and ran the whole thing.  So we tried to avoid the stamp duty as much as possible and gave dealers the lists of stock that would become liable for stamp on the theoretical basis that they could actually sell it discounted slightly and still be worthwhile.  Most of them never seemed to understand that.  Reluctantly, I don't know what your impression of dealers are, but an awful lot of them are not very intelligent people; competent people, yes, but not clever and not logical necessarily.  My view of a dealer is a barrow boy complex is a very good one for the majority of equity dealers.  They have to be quick of mind, have to be fairly narrow in their view and be able to react quickly, but it doesn't necessarily mean they are actually very logical or intelligent people.  They might find that insulting.  Some of them would, I'm sure and some wouldn't.  One of the best dealers we ever had was a chappie named Tommy Anderson and he was a typical East Ender...

BA: I've actually interviewed him.

LT: Have you.  He's a smashing chap actually.  I don't know if he came from the East End but he was a typical EastEnder if you know what I mean.  Typical sort - selling apples and pears.  But he was a very, very competent dealer, very competent indeed.  Obviously they had to have incredibly good memories and be very aware of what the book positions were, who had sold them what, who was interested in what.  Anyway, it's a different sort of approach to life in the final analysis.  To organise and run a office you have to be logical, businesslike.  You have to think; you have to think broadly.  But anyway, I'm digressing again.  I've lost my train now.

BA: Leo III.

LT: Yes, well Leo III, as I say we had put this system in.  We ran into problems with the firm in the boom of 1972, because the system we had actually wasn't fast enough to cope with the business volume.  Our business volume went up to more than 10,000 bargains a day at that stage.  I can't remember what our peak was. I have a vague memory that our peak was 15,000 bargains.  Again one little aside, in those days prior to Stock Exchange systems coming in, we checked manually. Checking was the callover of bargains between the seller and the buyer, the jobber and the broker.  And we had a measurement which we found worked through thick and thin which was one checking man would check 500 bargains a day. So one of my problems as manager - I became manager in '65, '68 [ie. 1965], I can't remember which, terrible isn't it - manager of the firm, one of my problems every day was to estimate the number of bargains the night before in order to ensure we had enough people to check the bargains the next day, and you can well imagine finding 30 people to go checking as opposed to ten people to go checking. It meant that checking was our first priority in the context of settlement in terms of having enough people to manage your checking.  Because until you had checked your bargains you were at risk obviously on your dealing side.  Actually if that bargain was not in existence in as far as you could find no-one to adopt that bargain because you had identified the wrong firm and no-one came forward, then you had to take it out of your book and change your dealing position.  So one of the important things was checking, obviously.  Anyway, as I was saying, we ran out of capacity in the context of the machine and we actually had to go onto a different Leo machine [Leo 3/26].  We went on to one of the Post Office machines.  They had some very big Leo machines which were much, much faster, they could actually eat our work.  That got us through that problem. 

BA: How did you organise that?  Did you have to come up with some arrangement with the Post Office?

LT: Yes, we had an arrangement.  Well, Leo did it for us with the Post Office.  If my memory serves, they weren't using one of their machines.  They had what they call 326s.  They were much more capable machines.  We hadn't got disk drives in those days.  We had tapes only.  Their tapes were very much faster than the tapes we had.  I think we had 28K and they had 80K so it made a hell of difference when you were sorting; and the machine's cycle time was much faster.  But if I remember rightly, we actually took some parts of our machine to put on their's because they hadn't been using it and our operators operated it.  Anyway, it got us through a very difficult period.  And of course by then it was ICL.  I'm talking about the computing side, but of course in many ways the computing side was of absolute prime importance to the firm.  In those days in 1972, the interesting thing about the computing in the context of the firm was, because, in my view, we had actually done it successfully, the partnership had very little knowledge of the office, very little concern about the office, except if it didn't function properly.  In 1972, because of the problem we had with the capacity of the machine, we didn't function properly.  When we went to this bureau - it was the Post Office (no, they did actually run a bureau); when we went onto this Post Office machine, for a while we had problems of getting the work done overnight.  So it would mean we didn't have checking the following morning available to us to check our bargains, which meant of course the brokers were up in arms and they would go into the Stock Exchange itself to see our dealing partners; which in turn made them aware of the fact that they had got an office and it had to function properly.  And I suppose (in a way rather a jaundiced comment) if an office functions properly they forget all about it, but if it doesn't function properly it becomes very important.  So when you are very busy as a firm they get worried about settlement and it becomes quite important to them and when you're slack then they get worried about the number of people you've got.  And whilst at Durlacher, to be fair, they never pressed one to get rid of people, we always practised running down our staff and running it up again, in a sense.  One thing I was always aware of as a manager is you never had the right staff numbers.  It was always too few or too many, understandably again, because it was quite a considerable cost obviously and they didn't like to see people sitting around doing nothing, which could happen when you were slack of course.  But my particular concern was that as one of the jobbing firms - Wedd and Akroyd were the two jobbing firms really - it was important for us to do our job properly which meant we needed expertise.  And in my view it was very important to maintain the level of expertise we needed, which we did.  The firm was supportive in that sense.  In computing terms, Clive Richards was the managing partner.  God, there's so much in terms of this history of jobbing and Wedd.  I'm just trying to think when Wedd and Durlacher merged...

BA: It was in 1968.

LT: 1968, yes.  Well, prior to that Durlachers got larger and larger, but it had always been equity jobbing firms - in various markets but equity jobbing firms.  By then, of course, you no longer had the separate markets.  Obviously the Stock Exchange had changed before that and we had the new Floor and this sort of thing.  But come the Durlacher and Wedd merger, we were bringing together a gilt jobber and an equity jobber, primarily. Wedd did job in some equities  - ex-Hadow & Turner - but not that many.  I expect the background has been explained to you before about Dick Wilkins and Sir Nigel Mordaunt. We merged together as two firms and at that time actually Wedd were still on a punch card accounting system and they also had some great difficulties in terms of their stock control side.  And I was asked to actually put in a system for them, which we actually did before the merger took place. Interestingly enough, Dick Wilkins actually gave me a shotgun as a present, as a recognition of what I had done for their firm!

BA: Why a shotgun?

LT: Well, I was interested in shooting, and I think he knew that and I had a Holland & Holland shotgun from them, which was rather nice of them to say the least, rather a nice gesture. So we actually designed a system for them and put it in all within six months which was quite a thing to do, quite a feat.  We had to work many hours to do that.  And they came round and moved into our building, again before the merger.  So we had two firms operating on the same floor using two systems, both on our machine in actual fact, with two sets of management and then we merged together.  For the first period of the merger we had a joint management situation and then I became the overall manager and could shake some of the problems out.  And that was '68.

BA: Had merging the two firms created problems in the back office?

LT: Every merger creates some problems. Because one of the things is, with the best will in the world, people actually look backwards to what their firm was and what they did in that firm.  In a sense my comment on mergers would be the people that merged into the firm would always identify themselves as a group.  The partners would identify to their staff, the staff would identify together, as opposed to the people who were in the Durlacher firm and joined Durlacher as an employee.  They were just part of the firm in a sense.  Yes, there were always problems.  There were problems of assimilating, of building them into our work practices, assimilating the people, attitudes.  It's inevitable when you had mergers, really.  Having said that the firm always settled down over a period.  But years later you could see a partner come up into the office and he would walk over towards the people he knew from his old firm.  Again, understandable in the sense that as the firm grew much larger of course they would no longer know people.  When you get to four or five hundred strong, I'm afraid the business of knowing everybody like they knew in their own firms of thirty, forty, fifty people went out of the window.  So it was understandable why they identified back.  Sometimes it was embarrassing in actual fact.  

BA: You've already said that Wedd was a gilt firm, did that create different settlement problems?

LT: Oh, yes, very much so.  The real problems from a management view point was the gilt settlement process started at about 10 o'clock and finished about 3 o'clock.  It's a slight exaggeration but it was absolutely done by about 4 o'clock, once you had actually sorted out all your stock and moved it out to the money brokers it was finished.  And they had a very intensive period: as I say, it started at 10 and then you had call over and then you had settlement - stock movement basically - and then you had money movement and then you had securing of your loans, in actual fact.  I've left something out but it doesn't matter, borrowing of stock.  And at that stage we hadn't got gilt CGO.  These are all relatively recent things.  So it was all manual and you always settled your gilts on the run.  You were never normally banking then until well after 3 o'clock in the afternoon; despite the banks closing at three, you were often banking at twenty past, half past three.  I'm talking about banking millions.  So the gilt settlement was short and intensive.  And they wouldn't get out to lunch.  Equity settlement, even when you were frantically busy wasn't intensive in the same way.  It was much more of a plod, especially in their eyes, and on the ticket passing days you would work until - in the booms - ten and eleven at night.  The only way we could contain the level of business we had in 1972, for instance, was the whole of the office, every single person in the office - and I'm talking about 200 people - were turned over to the movement of tickets through the firm, once they had finished their normal work.  So the gilt people would be working very hard in part of the day and then they'd be expected to work doing ticket passing from 5 o'clock until 9, 10 o'clock at night.  It created friction, obviously, and the gilt people thought the equity people weren't working that hard and the equity people looked at the gilt people and thought they're not working that hard either.  It's something you could never totally persuade them of.  I moved people deliberately from gilts to equities and equities to gilts to try and help to break it, but you could never break it completely, because you can never move the hard core anyway because of the skills.  So yes, we'd have problems; yes, we lived with them.  They're no longer there today in the same way because gilt does really just do gilt settlement. There is CGO which has changed the gilt settlement.  Bargain accounting, then Talisman, has changed equity settlement dramatically.  So you've got rid of the significant peaks we used to have in those days.

BA: Was Talisman the next important innovation as far as settlement was concerned?

LT: Going right back you had ticket passing, then you had clearing, then you had bargain accounting, then you had Talisman.  That's the progression, and obviously the Stock Transfer Act, and central stock payment which came before bargain accounting.  So progressively you've had the centralisation of settlement and the movement from totally manual into ... Clearing, for instance, the centre did on punch card accounting machines; and then you had bargain accounting which was done on computers which was a forerunner to Talisman; then Talisman which was done on computers.  Bargain accounting didn't do away with tickets but it centralised the calculation of what we called the 'trace', in other words who the buyer's ticket went to and he knew who it went to and records were sent and passed to the buyer, and it also produced the ledger accounts and the ledger differences which were settled with the centre.  So it was really the first big and significant step in the context of centralised accounting systems.  In actual fact, I was involved with the decision to go to bargain accounting before Talisman because I've been very involved with the Stock Exchange in the context of centralisation of systems.  I was on a committee in the sixties which was related to clearing and looking into developing clearing; and then I was on the committee related to bargain accounting; I was the Chairman of the Talisman Review Panel, through from the development of it to going live and I was on various other committees; Rules Committee related to Talisman and this sort of thing - very busy chap in those days.  And it was my view that you couldn't actually jump from manual systems, which a lot of firms still had, into a centralised system like Talisman without something part way through.  I don't suppose you've heard of them but a person called Michael Josephs and Michael Jenkins and Michael Bennett were the three that were involved in the centre in those days.  Michael Joseph and I felt that you couldn't expect firms to make the leap from, as I say, the manual system and then the clearing, which was essentially manual, semi-manual, through to Talisman.  And we actually worked out the bargain accounting system as a step which was recognisable from the past but was moving people into a central accounting system.  And that was very successful in actual fact.  We had great trouble with the development of Talisman - over run of time and money.  Of course we got to the stage where firms weren't making much money.  So money became very important in terms of spending.  So the Stock Exchange had a difficult time with Talisman, and [in] a lot of firms bargain-accounting in their eyes was so successful they didn't want Talisman any more.  I can remember a dinner we had with the managers' association of which I was a member of the committee (I never wished to be Chairman, although they wanted me on occasions; I was too busy with my own firm).  We had dinner with Bob Fell who was Chief Executive of the Stock Exchange.  Again I can't tell you the year now.  These sort of things go out of one's mind.  But it was during the development period of Talisman - and every single member of the committee apart from myself said 'stay with bargain-accounting, don't develop Talisman'.  At which I severely rounded on them and told them they were totally wrong.  I was fairly unpopular at that time.  I was also Chairman of the Talisman Committee. I had to believe in it.  I didn't believe it because I had to, but I did believe in it, I suppose in many ways because I had been so heavily involved in computing at Wedd. I'd really been almost a one-man computing band for many years in the sense that - I didn't do the programming - I did the analysis of what we needed and made sure the specifications that were produced by the analysts were exactly what I wanted, and then ensured those systems went in and went live properly.  I used to control the testing of those systems, approving the system and going live with the system, and reorganise the office to use the system to the best capability.  Frankly a lot of computer systems fail because the management aren't involved enough and don't ensure that a) the system meets the needs properly; and b) you actually use that system to it's main capability because you've understood how to manage your business properly using a new way of doing things, which often is capable with computing.  You're not capable of doing certain things without computers.  Anyway, that's an aside really. Lost my train again.

BA: Were you in a position to have some idea about what other jobbing firms were doing in terms of office technology and computerisation?  For example, how did Durlacher and then Wedd compare with what other firms were doing?

LT: We'd all gone much the same way.  Again, I think one has to remember that once you start along a route and you are growing as an organisation - your business level of 'x' - you can't fundamentally change anymore; whatever system you move to has to be a progression on top of what you've got; because you've actually got to prove a new system works properly against an old system, and therefore it's got to be compatible enough to actually reconcile one to the other.  So once you had a punched card accounting system a lot of the jobbing firms that went onto computers, their computing system virtually emulated their punch card systems.  Ours did initially, but then we gradually moved it on from there and built on it from there.  Akroyd, yes they developed their own system; they had their own in-house systems and programmers.  At the end, I suppose, before Big Bang, they were probably a bit ahead of us because they'd gone onto some real time systems when we were just actually in process of going onto real time systems.  Pinchin Denny, yes I knew the managers well. I knew the computer managing people, Pinchin Denny's computer manager very well indeed.  Bisgood, no not so well aware. Smith Brothers always pretty well a mess, I think.

BA: In terms of their back office?

LT: Yes, in terms of their office, never quite in control in my view.  They probably wouldn't like me saying that.  So certainly Akroyd because we were very close to Akroyd; certainly Pinchin because I was quite close to them.  We were all moving much the same way.  We, as a firm actually, went in a slightly different direction in the sense that, I think I mentioned Clive Richards earlier on, who was the managing director of Durlacher at the merger of Wedd and Durlacher (and eventually he left and Gerald Dennis became managing partner of Wedd Durlacher); we had at that time brought in our own systems people.  We had only a very small team - three or four people - and the chappie in charge of the systems who was responsible to me was very good indeed, brilliant man, Michael Brooks. And eventually Clive decided, certainly it was against my recommendation, to sell off our computing interests, form another company Datasolve, and in a sense we ended up employing a bureau to do all of our work, both our development and our actual operational work.  And Datasolve redeveloped our system.  We had three analysts at Datasolve responsible for the development of the system with me and Wedd controlling it and dictating what was to be done.  I suppose they would actually call it dictating as well.  That system, again I can't remember the year it went live, I suppose it was in the '70s.  Eventually (gosh my memory's incredible, all these dates and times all going out of my mind now) we brought the whole thing back in-house.  We had a lot of trouble really getting all the work run to time.  Because Datasolve as a successful bureau, our work became a smaller part of the bureau. The people that knew our work became less.  We started running into problems of not getting our work back over night at the right time, this sort of thing.  In other words, it deteriorated.  My own view is quite clear, if you want to run and have decent systems you actually do it in-house and control it in-house.  And eventually we brought it all back in-house, bought our own machines.  We had an ICL machine and brought our systems people back in house from Datasolve.  Three of the people came across to us and they formed the core of the system team at Wedd, and then we built on that.  And we then built a foreign system, that was the last system we built actually prior to Big Bang.  We were in the process of building a real time dealing system.  We'd got a long way down the design route and we ran into great troubles, political troubles to my mind, with Barclays, the Barclays merchant bank.  And in the end the project was cancelled.  They put another system in which in my view was totally inferior but anyway it's beside the point really.  It worked in the final analysis, eventually after a lot of trouble, that's what mattered; didn't do any foreign currency and didn't do a lot of things but it worked in terms of the main part of the equity dealing which is what mattered I suppose.  

BA: Can I sort of shift the focus a little bit?

LT: Yes, please do.

BA: Going right back to '54 when you joined the firm, how would you describe the firm at that time?  Was it a big jobbing firm, did the back office figure?

LT: No, it wasn't a big jobbing firm.  It was just beginning to grow.  It had had its first merger.  It was a small firm and like most other firms. [But it] had an ambitious boss in the form of Esmond Durlacher who knew where he wanted to go.  In many ways it was a scrappy little firm, I suppose in retrospect, in the sense that it had very poor offices.  We were in the basement of 20 Copthall Avenue; old furniture; not very well organised and run; the manager at that time was responsible for everything apart from the dealing really, whether you're talking about rent or anything else; nobody really cared too much about what hours you worked and this sort of thing.  As a brewery jobber, to give you a feel of the place, we had sandwiches delivered every night into the firm; we had crates of beer stacked in the corner which got delivered by one of the breweries; anybody that came in and saw us had a bottle of beer to drink - that sort of organisation!

BA: So there was a little bit of contact with the firms in whose stocks a jobbing firm traded?

LT: I think there was, yes.  

BA: And what else did the back office consist of apart from crates of beer..?

LT: In terms of the number of people?

BA: In terms of people and organisation?

LT: We had names clerks, jobbers' ledgers clerks, dividend clerks, transfer clerks, checking clerks - which was probably about 20 people at that stage - and some comptometer operators, a couple of typists, manager, deputy manager - certainly hadn't got section managers - we just had a manager and a deputy manager.  And we had some people who were responsible for balancing, did it full time.  I think we ended up with five people.  Percy Forsyth who was a dealing partner came back into the office to control the balancing team, so I think we ended up with five people and we still never balanced.  That was the firm, I suppose, apart from the dealers and blue buttons.

BA: And how did things develop as far as the firm was concerned?  Did the merger with Bone Oldham, for example, have a big impact on the firm?  That was [in] about 1960?

LT: Yes, I think the first thing was that we were outgrowing the premises and the decision was made to merge the two firms together and have new premises to put the merged firm in; that's when we moved to Austral House in 1960 and the firms came together.  I think Bone, actually, was a better run firm than Durlacher at that stage.  I think their management was better.  I suppose at that stage  - I can't remember how many floors we had at Austral House, two I think - and the place was half empty in actual fact.  And it carried on growing. I think really Bone were a manual firm; that's right, they were completely manual books when we merged.  They went on to our punch card accounting system.  But as a firm they managed themselves well.  They were a smaller knit firm and well managed by their management at the time.  I can't remember who became manager at that stage.   Another firm merged into the firm prior to that, A.L. Goodday. Sidney Greenwood was manager of Goodday.

Tape 2, side 1

BA: You were saying that the manager came from Goodday.

LT: Yes, he was the manager of Goodday. I think he was a partner in the firm actually.  He became the manager of Durlacher Oldham Mordaunt Godson & Co.   I think, prior to that he'd started to take over the management.  There was quite a lot of friction at that stage when we were in 20 Copthall Avenue with him becoming involved in management and the manager of the firm as it was then, a chappie named Appleby who swore a lot.

BA: That was with Durlacher manager?

LT: Yes, he wasn't terribly competent, or terribly interested.  He was one of these managers: the one thing about him, everybody used to say, 'Goodnight boys'.  At 5 o'clock 'Goodnight boys' he was gone no matter what hour we were working to.  The chap that actually ran the place was Tom Sherville who was his assistant.  Greenwood became manager, I think, just before the merger if I remember rightly and he was a good manager.  He was a good thinker and progressive and I worked well with him at that stage.  As I say, I was in charge of all the computerisation and developing the systems.  He could understand what one was doing and why one was doing it.  And it became a much better managed and well organised firm.  It was growing. It was growing much bigger then and it had to become managed properly.  We still hadn't got things like personnel.  Graham [Ferguson] wasn't involved in management at all then.  We hadn't got an admin department at all.  It was still the manager's office that managed the firm in the context of property, all this sort of thing.  It was some years later, and I couldn't tell you when, we ended up with an admin department as such, and we had two people at that stage that did all the balancing for instance, just two.  Because again we were on a computing system then that worked and two people managed balancing easily.  They were the cashiers in actual fact.  It was a spare-time job for them.  To my mind, the measure of a firm in many ways in this sort of organisation is can you actually balance your books?  Can you balance your stock and keep control?  Because if you can you're OK, it's working; if you can't you've got a problem.  

BA: Now you became manager, you said, in 1968, and looking at the old Stock Exchange Lists of Members you became a member of the Stock Exchange about that time.

LT: I think it was '65 I became manager.  I cannot really remember at this stage.  Mr Greenwood actually was very unfortunate.  He became ill with emphysema and he was dying.  And I was actually made a potential manager, I can't think of the term, for some time which was a fairly difficult period, and then I became manager.

BA: How would you have defined the office manager's job?  What were your responsibilities?

LT: Well, essentially in a few words 'to manage  settlement' which meant managing people, managing resources, managing the system, managing anything to do with the building, salaries.  I didn't manage the dealing side, that wasn't managed by me at all.  Managing the employment of people, in other words employing, hiring and firing; ensuring we had staff enough to feed the dealing side that was growing.  The dealing side was always in a sense the prime side.  The office would lose people to the dealing side whether the office wanted to lose them or not; if they wanted them they tended to go.  Of course, as a manager you found it incredibly difficult to stand in the way of somebody, no matter how good he was in the office, and stop him going to the House.  Because the speed of progression as a dealer was much greater than in the office, because the learning curve was much shorter.  It's all ironic really in way.  On the dealing side you've got a learning curve which to my mind in the context of just dealing, is very, very short.  In the context of controlling risk properly and experience, it's quite long, a very different thing altogether.  They're two different animals to my mind.  And our dealers could go down there as a blue button, could be a dealer within two years and earning a lot more money than somebody in the office, or they would have been if they'd been in the office. And a fair number of those dealing partners in Wedd Durlacher at the end were people that had been in the office for some years, and they would have been in the office still and probably at the level of [being] in charge of departments and no more.  And therefore, one could not stand in the way of people going on to the floor of the House, no matter how much one wanted to really.  It was against one's conscience to do so essentially.  You knew you were actually impacting a person's complete life in the context of their capacity to earn money.  

BA: Did you find this created problems that you weren't able to keep the better staff?

LT: Oh, yes, because everybody that came into the firm after a short time in the firm knew where they wanted to go - on to the floor.  Yes, definitely.  Always a problem. 

BA: So you would have said that there was some kind of tension in the sense that the House staff being regarded as the glamorous side of the firm?

LT: Tension, a small amount; some resentment as well, I suppose, to a degree.  Again, one of the things the mergers did for us was that they brought in experienced settlement staff from other firms, who were too old to go into the Stock Exchange. And I suppose, looking back the saving grace in terms of settlement was the people that came in from the other firms, because all the boys we employed virtually every one of them used to go into the House after a period in the office.  In theory we had training schemes. I designed a training scheme which said a boy would come into the firm, he would go round the office and go onto the checking side and the stats, research side, last two steps before they went into the House.  It would take two years to do it and they'd spend this long in this department, that long in that one, depending on the cycle time of that department - by that I mean the functionality of that department was such that every day they did the same thing, it was repetitive, and therefore once you had done it one day, you'd do the same the next day; where on other departments, once a fortnight, and therefore the learning curve was much longer.  Therefore, in the sense of designing a training scheme, my initial training schemes, it really was a case of how much was there to learn and how repetitive was the cycle and how long therefore did you stay on in the department.  And we designed a training system which took them round the firm in two years and got them ready to go down to the House.  The moment the firm was busy that was just broken.  You would be hand to mouth in the sense of managing people, managing resources depending whether you were slack or busy.  If you were slack they didn't want them, if you were busy they wanted them.  Part of it obviously was that the firm was expanding, the firm was successful.  There was a very long period of successful expansion.  The firm was growing in size and status and growing in capital, becoming what it was really, a very important element of the Stock Exchange.  

BA: Was it ever possible to try and redress the balance in terms of remuneration? Was that something that was looked at?

LT: That was one of the aims I gave myself when I first became manager.  I don't know whether I've got it at home, but I sat down and wrote myself a set of aims as manager, when I became manager.  Certainly one of them was to try to ensure that we had an office career and we paid them the right sort of money and that we had a salary structure.  Because one of the things we hadn't got when I became manager: we hadn't got a salary structure at all.  So it was a case of who the manager liked got paid well; who he didn't like, didn't.  That might not have been so, but it appeared so from where one sat and where other people sat.  And we had bonuses paid but again in very much a grace and favour situation.  Again, this is probably from my viewpoint, in the sense that we hadn't got a bonus system which said x per cent of the profits would be paid to the staff.  It was really a case of how much profit have we made and have the staff been busy - that's the feeling I had.  Certainly three of my aims really were to employ competent people, to train people properly, to have a proper salary structure, to have a proper fixed bonus scheme.  Another one of my aims was to actually off-load my responsibilities in the context of computing so I could actually manage the firm properly.  That I never actually completely succeeded in doing, probably didn't want to completely either in retrospect.  So I suppose they're the things that come to mind as my aims.  And on the whole we succeeded.  We had a salary committee and the chairman of that salary committee was a person called David Oldham, who was very good.  And we actually developed a proper salary system.  I actually produced the first set of scales for the salary committee, which was basically based on age and capability.  So we had in a sense an age structure that way and a capability structure that way with the acceleration of pay increases slowing down. So in a sense when you joined the firm it was yearly, and into the twenties then it became bi-annual, then it became 5-yearly.  It was 5-yearly from forty onwards, on the logical argument that the skills you assimilate, and therefore the value to firm, in a sense, slowed down, so your progression in terms of salary slowed down.  And we ended up with properly structured departments, department head and deputy.  They were the sort of things I aimed at and succeeded in doing.  

BA: What were the numbers like in the back office?  How did they develop?

LT: Well, 200 strong was about our peak.

BA: When was that?  Would that have been before Big Bang?

LT: '72, that was our peak, 1972; that was the peak market conditions we had really.  And we actually had dealers, in '72, coming off the floor to help in the evenings, and ultimately had dealers coming off the floor to work in the office all day, because we got to the stage where we couldn't cope with the volume of business they were doing.  We thought by taking them off the floor we would slow down the volume - we didn't want the business basically and they just did more and more.  It just proves that when they really get going they can really go.  It's incredible the capacity of a person to deal, actually.  

BA: What happened a couple of years later when there was the savage recession in '74.  Did you find then that you had a lot of surplus staff?

LT: I can't quite remember when bargain accounting came in, because again I was involved heavily with bargain accounting and Talisman; as I said earlier, I knew what was coming.  And in '72 I took a view that I had to run my staff down so I never replaced anybody as they left.  We had a reasonable turnover of staff from the House side as well.  We didn't actually have a big turnover in the office, but we had people leave for various reasons and so we actually in a sense went through a period of attrition where we just didn't replace anybody and ran the staff down that way.  When we got to bargain accounting it had a big impact on the office in theory.  In practice I think we deliberately made (I use the term 'deliberately' to define the fact we didn't have to) some people redundant.  It was only about four people.  Frankly, you must remember again, the environment in the context of employment was such that it was very difficult to sack people, where we could make them redundant and we deliberately chose to get rid of a few people who were difficult people.  And we followed the same path right through to Talisman where we deliberately didn't replace people and ran the office down until it was about the right level.  So we peaked in '72 and ran off from there and Talisman came in in '79 I think if I remember rightly, and bargain accounting in - I can't remember - '74 I think it was, '75.

BA: How much contact did you have with the partners in the course of managing the firm?

LT: Oh, quite a lot.  I suppose one way of describing the firm in the sense you had the partnership; you had a pyramid - a double-pyramid almost.  Gerald and I were the fulcrum in the middle, in the sense, I would have said: the partnership, Gerald, myself, the office.  So I was responsible to Gerald for running the office; I would go to him.  At the same time one had a lot to do with the partners as individuals; for instance if they had a problem in the context of the dealing side, they would ring you up and talk to you about it; if they wanted to know about an interpretation of a rule (because I was recognised as an expert on the rules, for instance) then you'd talk to them about it; you'd see them daily, basically, one, some, any number.  The other thing, of course that happened in the '70s that changed the flavour of the relationship between the office and the dealing side - quite important, looking back - is 1971/2 we not only had a tremendous boom, we had a takeover boom; that's when the takeovers really started.  We had the period when Slater Walker took over a lot of companies and that brought the control of settlement and the control of dealing together much more.  Because in terms of a takeover, it's very important to control your physical stock to be able to assent to an offer.  Again it's become much easier with Talisman now.  But at that time it was the most important job because if as a firm you were jobbing and you didn't job in the right way relative to the date for assenting to a takeover - so you couldn't actually move your physical stock and you couldn't get the sellers to do certain things,  to assent stock on your behalf, this sort of thing - you could end up with a dealer theoretically saying, I'm a bull of x which becomes y when it's been taken over, and in practical terms you couldn't turn his dealing position into y because you hadn't got control of the stock or you missed the assenting dates and the offer was closed.  In particular, the type of offer that closed was a cash offer.  They were closed on the day and if you didn't assent by that day and have your physical stock to register with the company for that close down then you missed the cash offer.  And very often, if it was an offer where it closed, that was it and there was a stock offer, the stock offer would be worth much less than the cash offer, or there would be no other offer.  So you could end up with a dealing position where theoretically not only did it become x, it meant x profit and if you actually didn't achieve that stock position, you didn't achieve that profit level.  So the control of dealing moved in some ways much more into the people in the office telling the dealers what to do in the context 'you must deal for this date for cash, or you must deal for assented or nonassented to this offer.'  And they became much more closely involved.  That helped a lot in terms of the attitudes of the dealing partners towards the office because they came to realise that there was a lot of expertise and they badly needed it.  It was the same with new issues.  Control had been there all the time but again when new issues became very active, the control of a dealing position and the last day for paying a call, the last day for registration, becomes important.  If you don't get it right physically in control then, again, you haven't got that dealing position. A particular example of that is: one jobbing technique was to make a dealer a bear of a security on a new issue [at call date] if you felt the market was going to fall.  And you could do that via the office end via the control of the physical stock; so again it was a case of a dealer and the settlement people, myself for instance, liaising with the dealers to find out what they wanted to do and ensure that we actually succeeded in doing it between us.  

BA: How did that work in practice?  Would you be speaking with them on the floor of the House?

LT: No, I very rarely went down to the floor of the House, waste of time - to walk to the floor and walk back was wasting time.  I was too busy for that.  No, in the afternoons when they came up from the floor basically.  In fact they were in the office from a quarter to four and we'd talk to them then normally or before they went down, but mainly in the afternoon, or talking to them on the telephone.

BA: And how did you find them to deal with on that basis?  You said earlier that some of them weren't the brightest.

LT: Well, you'd find somebody on that pitch that was bright enough to understand what you were talking about!

BA: And did things generally work out the way you wanted or were there cases where you wouldn't be able to assent to an offer because you didn't have the stock?

LT: I think in the early part of the period then, yes, there were problems and as I say that made them realise that you had to have this interaction which then meant on the whole, yes, it all worked.

BA: Do you recall any particular examples?

LT: I suppose our biggest problem was Slater Walker, the fact that Slater Walker took over a large number of different companies and issued stock every time. In the context of a stock control, you're dealing in a stock; when you've finished that dealing period, you end up with a dealing position of x and you want to prove that your settlement position equals x; if that company takes over another company and that company's stock becomes the other company's stock, but it doesn't become it automatically, you've actually got to turn it into that other company's stock, that can take months, literally.  And you've got to prove all the way along that stock A plus stock B equals, if you like not stock C but stock B1.  That's the sort of thing you had to do.  Certainly in terms of Slater Walker, which I suppose at the end of the boom had taken over more than a dozen other companies, it was something we took many months to actually sort out in the end.  Yes there were occasions when we had to write off stock, on or off the book,  because we couldn't in any way reconcile our physical stock to the jobbing position and couldn't find out where.  It happened very rarely because as far as I was concerned that was a significant mistake if that happened.

BA: Did you find you had to be a fairly strong character to deal with the partners?  This is something Don Bailey mentioned to me.

LT: I think the answer is, yes.  And I was recognised as a rather tough cookie, I suppose.  You must have an opinion.  I suppose you haven't asked that sort of  question to them.

BA: I haven't actually.  Why did you find that because they would regard themselves as the partners?

LT: Some of them were very offhand - they know the dealing and don't want to know anything else.  Some are very professional; some are very unprofessional;  you had different people, different ways.  Some were monied people that were doing it more for fun, probably not quite true for fun.  Their attitude was different.  Some of them were different anyway.  So different people, different ways of tackling the problems I suppose.  Yes, you had to be fairly strong in character to manage the business, to force change onto the firm and onto the Stock Exchange floor.  It made one hard actually, it made one single-minded.  When I retired, six months later when people saw me they used to say, 'We've never seen you looking so relaxed' and that was perfectly true: one wasn't relaxed when one was working, one was highly stressed.  There's no other word for it I don't think.

BA: Did underwriting figure on your side of responsibilities?

LT: The act of underwriting would be done by the dealers of course.  The actual settlement of the underwriting, confirmation of settlement, would be done by the office.  

BA:  And did any of the early privatisations like British Aerospace and Cable and Wireless, do you remember them as having an impact on the level of work in the back office?

LT: Well, the biggest impact with any of those things is really just the volume of business traded and the control of the settlement of those stocks, the physical allotment letters being moved through the firm. I seem to remember BP was the worst one we had, piles everywhere literally in the office, ran out of room in our safes and had to keep it [in draws] over night.  It's the physical pieces of paper because you must remember that you were actually handling physical allotment letters and the biggest problem was keeping control of this; if you lost one, you lost it and you sorted it out in the end or you changed your stock position.  This is a prime example [of what] I referred to earlier on: you have a stock issued, you deal in it, you have a call (you might have more than one call), you have a last day for registration, and at each call you would have to reconcile that.  Your physical stock plus/minus open bargains equalled the jobbing position.  It's slightly more complicated than that because you'd got the jobbing position the night before plus the amendments related to checking and the stock being moved on that day, obviously, and then the stock you'd register and you've got to pull the lot together and say, 'equals zero' if you like: stock position minus jobbing position equals zero.  And you had to get it right.  If you didn't get it right then obviously your stock position went wrong on a call and moving on into the last day for registration.  You'd be owed stock by the market, you'd owe stock to the market, you'd have stock in office and the sum of those three things again had to equal the jobbing position, that they switched from the allotment letter stock to the registered stock.  And you'd issue free names; free names were passed from the buyer to the seller and the stock would be delivered through.  Again, if you couldn't actually balance your outstanding position then you had to try and find out why not.  You used a combination of your physical records of what we called our list books plus your accounting records, your actual script ledgers, to sort our why you had problems and try and find out why you were long or short of stock - you could be long, you could be short.  And we have, in the end, on occasion, written stock on to the book and stock off the book, after many, many months when we could no longer sort the problem out any further.  It didn't happen too often luckily.

BA: Was the firm itself carrying big positions?

LT: Need a definition of 'big' positions, I think.  On occasions, yes.  Positions are related to risk and risk is related to capital, and it wasn't always lack of capital that stopped you from running positions it was risk.  It was my view that very often the papers would be talking about under capitalised jobbers and yet, really, I think the problem was that, again you've got to look back historically, when you had a large number of jobbers, they existed because risk was very low because you had large numbers of the public trading in securities; you hadn't got one-way markets.  As you progressively moved away from the public holding stock into institutions holding stock, you moved more and more into one-way markets.  And the more you move into one-way markets the more risk you have, the more difficulties to the job, the more capital you need to run that risk.  You've got today incredibly volatile markets to my mind because you have got to the stage where the majority of stock is held in, let's use the term institutional to say other than private hands, and they expect to trade very large, sell a very large portfolio, buy a very large portfolio.  And, in the final analysis you can't actually risk that sort of thing.  We've got an example today, haven't we, with Kleinworts and this Premier Oil; and frankly in some ways I deplore the level of publicity being given to this sort of thing, because the one thing against anybody running a big position is everybody knowing about it.  One of the things we were very careful at Wedd, we would end up with possibly three people in the firm knowing we were running a position, given it were a very big and a very special position.  Gerald would know, I would know, one settlement clerk would know, or perhaps even he wouldn't know; my assistant manager might know because he looked after the settlement side and the dealing partner knew; because we wanted it to be kept secret because of the risk involved in that position.  And now, after a relatively short period, it's a declared position; everybody seems to know.  Who's going to buy it in those circumstances?  So Kleinworts is left high and dry until the market turns and somebody does want to buy it, despite the fact they are going to pay more than what Kleinworts paid for it.  

BA: So in general terms with Wedd Durlacher they were mainly turning over the stock rather than making a position...?

LT: No, we always ran positions.  Inevitably, every jobbing firm ran positions.  Most of the time we were running a bull.  We very rarely ran a net bear position. It was nearly always a net bull position.  The positions could become quite large.  But as I say, it is really related to risk and control of risk.  Frankly, it is my view that no matter what market you talk about today, the weight of the dealing into that market outstrips the market's capacity whether you're talking about currency ... Currency markets are the most prime example, where they are controlled in the final analysis by governments, Treasuries if you like, on behalf of governments, and yet they have become extremely volatile which demonstrates the fact that on the whole now the weight of trading into those markets is beyond the capacity of any market to cope with it and the only protection is price volatility, and that's why you see these markets swinging around like they do today.  And I frankly, don't know the answer.  I don't think anybody does.

BA: Was this a problem that you could see emerging pre Big Bang?

LT: Oh, yes, it's been growing over very many years, becoming progressively worse. 

BA: And was it something that you would discuss amongst yourselves?

LT: Yes.  It was a very worrying trend because it was making jobbing less and less successful financially, definitely.

BA: Could you say roughly when it began to emerge as a problem?

LT: Back in the '60s I would say, definitely.  And I would say, probably, '72 was an example of a) the extreme bull market then the extreme bear market; and everybody wanted to buy and then everybody then wanted to sell.  And no matter how you marked your prices up in the bull tack, or marked them down on the bear tack they still dealt.  Interestingly enough you have these influences on the market.  Like when we had short term capital gains - they had an influence on the market.  We had Poseidon as a stock then that went to an incredible price per share, because of the problem of short term capital gains. Nobody wanted to sell.  They were locked in.  Because the short term gains were taxed at their - I can't remember now - the highest rate, I think.  The highest rate then may have been 98%, but I can't remember, might have been 95%.  They all wanted to stay in for a year because then it moved down to their standard.  So you had Poseidon which went from a pound or something up to over £100 a share.  I'm quite sure the aberration was because of the short term capital gains situation.

BA: Was this a problem that Wedd Durlacher was experiencing, that they found that they would end up with positions, that the market had suddenly moved and they were running positions in stock that they couldn't sell profitably?

LT: I think the short answer is yes, otherwise you would make very good profits.  Progressively the markets became more difficult because they became more one-way markets and therefore you were forced more and more into taking a view of the market, rather than be able to job your way out.  Obviously you still jobbed your way but, to my mind, it was more and more important to actually have a view of the market.  As I said before, jobbing in the old days was literally jobbing, just buying and selling and taking a small turn and making a living out of that.

BA: Can we switch the focus again?  Did you have many people from outside the firm coming into the office.  For example, would you have people from the press, from the financial papers coming in?

LT: Not into the office.  They would certainly come in to talk to the dealers, yes, and obviously meet the dealers for lunch and this sort of thing.  

BA: Was that ever an office management problem again, thinking of things like secrecy and so on?

LT: Not the press, no.  I never seemed to be troubled by confidentiality in the context of the office people, very good indeed.  

BA: Would you see many brokers coming into the office?

LT: Well, you have to appreciate that, for instance, in gilt settlement the stock was delivered to the office.  They don't actually come right into the office.  You'd have a counter which they delivered to.  But at the same time we had certain firms' messengers, like the money brokers, who would actually come right into the office.  They'd come to the desk and the person they were working with really.

Tape 2, side 2

LT: I suppose what I'm saying is, if you went back to the '50s and '60s, yes people would come into the office and come behind the counter and chat with you and deliver tickets and this sort of thing. And progressively over the years that happened less and less, you became more formal as an organisation, you had a proper counter, you had swing doors and people weren't allowed beyond that really apart from the odd one or two that were going in and out every day.  Or somebody would come to the counter and then you'd say, 'Come in' because you were sorting out a problem and this sort of thing.  Jobbers ledgers was an exception in the sense, that whilst you were doing jobbers'ledgers, yes, you had a jobbers ledgers clerk come round the firm and he would sit down at a desk with your clerk and he would actually check out your accounts one with the other.  So, yes, in that sense but that was one part of the office.  All of that's vanished, of course.

BA: Did you have much contact with other jobbing firms?  You've already referred to your involvement in various Stock Exchange committees, office managers' committees.  

LT: Yes, we did really.  Stock Exchange Managers' Association.  I can't remember when I actually joined that.  It was after I became manager in '65.  And it was an organisation which was quite useful.  Prior to that organisation coming into being, which came into being in the early '60s, I think each individual firm had very little to do with one another.  The Managers' Association certainly drew people together socially, and then as the Stock Exchange became involved in settlement systems, technically.  So you came to know the other managers of the major firms much more.  So yes, I knew a lot of managers of various firms and you would go to lunch with them and they'd come to lunch with you and this sort of thing, because we had our luncheon rooms and one used those once a month, that sort of thing.  And obviously when I was a partner, then one could lunch somebody any time one could book a room or into the main room if we wished.  So yes, you did have quite a lot to do with other firms.  The very fact you were competing with them in the sense of dealing, and in some ways you were competing with them in terms of your capability to settle, at the same time it wasn't competitive in the sense you didn't talk to one another about your problems.    I suppose Akroyd and ourselves were the prime leaders in the context of our Stock Exchange rules.  And you must remember with things like takeovers and cash offers, convertible stocks, and with the coming of bargain accounting and Talisman, a lot of rules had to be changed quite significantly.  In the earlier days one would very much use one's influence and talk to other managers and talk to Stock Exchange officials to get the rules changed.  In latter days one was very much a part of the committee that changed the rules and therefore it was easier than just trying to influence.  So yes, you'd talk to other firms about problems you had; stamp duty for instance and the stamp office and their attitudes.  Yes, you would talk to other firm's managers, co-operate together and try to get change which was very necessary.

BA: When was it that you actually became a partner? 

LT: 1974.  

BA: And what were the circumstances?  As I said earlier, I saw that you'd become a member in 1968, why did the firm feel it was important that the office manager should be a member?

LT: I think it was a trend - status, essentially I think.  It certainly wasn't in terms of necessity relative to the doing of one's job; although I think in later years it was important to have that status in the context of the Stock Exchange committees and their view of people.  It was still a place where status mattered to a reasonable degree in the context of influence and I think more and more firms - the senior firms I'm talking about - made their managers members.  And then a few of the firms made their managers partners, but not many, not many certainly.  

BA: Did you feel this helped you generally in terms of running the firm?

LT: Oh, yes, very much so; you had more influence definitely - more influence both internally and externally.

BA: One of the ways of beginning to conclude: do you think you could describe what a typical working day would have been like for you sometime in the late '70s during the period after you'd become a partner?  For example, what time would you find yourself leaving home?

LT: Leaving home, round about twenty to eight, quarter to eight.  I was never one to arrive terribly, terribly early at my desk - not late - but not early.  I would have been normally in by about nine, or ten to nine, nine o'clock, unless there was something particularly happening and I wanted to be in early for it, something pressing.  Conversely, leaving to go home, six, seven, eight, nine even, depending on how busy we were really, even later.  In fact in the '72 boom we were staying up in London on certain days, on the ticket passing days, keeping a lot of the staff in London in hotels because we were working so late.  Typical day, very hard to describe, frankly.  I think the problem of a manager's day - you've probably heard this saying: 'A manager knows less and less about more and more and an expert knows more and more about less and less'.  Certainly it's true in a sense. One of the big problems for Wedd and I suppose part of my management task, not necessarily describing a day, was the management of the change that took place.  For instance, we were initially an equity jobbing firm, then equity and gilts, then equity and Australian and then we decided to trade in European stocks and we went gradually into different countries in Europe; then we took over Medwin and it was bearer stocks in Canada and America.  All the time it was changing.  These were all different, and still are to a fair degree, different settlement practices.  You were dealing for a different period, you have depositories, you're using banks to settle your stock, you've got problems of securing your loans, you've got problems of risk in currency as well as the problem of reconciling your currency positions and your stock positions, problems of designing computer systems to actually encompass efficiently your settlement of foreign stocks and what we call... it doesn't matter what we call them - bargains dealt in a currency which was different to the stock currency.  For instance, as a jobbing firm, these are some of the decisions one had to make, to rationalise the whole question if you were dealing in other countries' stocks, what currency did you deal in that stock?  If you dealt in that currency and wanted to do a bargain in a different currency, then how did you cover that risk, how did you connect the two together, how did you manage your currency book, how did you get the information between these people?  All of these sorts of things came within my compass.  So quite often a lot of the day would be looking after that sort of thing, controlling change really, making decisions about things that people brought to you that they felt it was beyond their scope to make a decision.  Or, conversely, my going to Gerald with something I felt was beyond my scope to make the decision.  Fighting off this court case in America, for instance, took up quite a lot of time.  A lot of my time in latter years, it was very much the Stock Exchange.  The '70s, very much the Stock Exchange.   I could be involved with the Stock Exchange probably two or three days a week.  I chaired the Talisman Review Panel and that didn't stop at just chairing it.  I was obviously involved in the thinking about the papers before the meeting and thinking about the minutes and making sure they were correct.  It's very technical stuff.  The Rules Committee I was on; I was on the CGO Committee.  I developed the initial ideas for the original CGO - not the CGO system as it is today which is computerised - but prior to that we evolved a Stock Exchange system for gilt settlement which changed it from chaos to a reasonably good system.  Then we moved to CGO after that.  I was heavily involved in that and Gerald and I spent quite a lot of time on this and on the Stock Exchange Gilt Committee to bring about the changes in gilt settlement.  So I suppose it's probably true to say 50 per cent of one's time in that era was really managing change both in the context of the firm and in the context of the Stock Exchange.  And the rest of the time was, I suppose, I'll say 50/50 (it's not, it varied from day to day), just managing the firm day to day, whether you're talking about salaries or talking about people leaving or employing people, although, to be fair, as the firm grew we ended up with an administration department. Graham [Ferguson] then came back from the House and became responsible for managing the salary committee and salaries.  It shifted weights off of one and one needed those weights to be shifted and one was very grateful. And the whole of the balancing of the firm's books and all the administrative side of that, VAT, everything else, all secretarial work, all that sort of thing moved away.  And it moved away whilst I was manager, essentially, to a large degree, so it left one more free to manage the business and manage the running of settlement and organisation of people.  In the earlier days one of the core things I used to do was to manage the resources in the sense of having the people where we needed them on a day to day basis.  The cycle shifted the work load.  In the days of ticket passing you had a very distinctive work load that shifted round the various departments in the sense that as I said, you had checking and the managing of resources for checking and the number of people you needed on a day to day basis; then on ticket week you needed to manage the resources to pass tickets; the following week you had to have the resources available to handle the stock, to move the stock fast enough because the stock obviously mattered in the context of interest costs and getting the stock to the bank in terms of collateral against your loans, so you had to have the resources for that.  In a sense, certainly the days before Talisman and to a degree before bargain accounting, you were managing your resources on literally a day to day basis.  Inevitably, people who are in a department are reluctant to move and help in another department, and, although every week and every day it tended to happen, you actually had to manage it and make sure it happened.  So part of your day was always assessing your work loads and where they were.  It became fairly second nature but it still had to be done.  I always believed in managing actively in the sense of walking round the firm.  I always had my office at the end of the main office. I had to walk through it.  I deliberately used to do that on the basis that if you had it at the beginning of an office, then when you walked through that office it was unusual, whereas if you had your office at the very end of the office - we had open plan offices which again I believed in personally; I believe they're right.  So I had it at the end and I would walk right through the office to my desk and right out again, quite frequently.  And every time I walked through I would be looking round to see what was happening.  Because as manager, knowing the business, you could actually sense it and you'd look at it and see what was happening, whether people needed help or not, this sort of thing.

BA: When did you actually decide to retire?

LT: Put it another way, decide not to continue...

BA: I think you'd better elaborate on that.

LT: Well let me put it this way: in the run up to Big Bang I was asked if I would stay on for two years beyond my retirement date.  You'd appreciate the firm, Wedd, retired their partners at 60, on their 60th Birthday or the Friday after, I can't remember now - Friday after I think it was with Wedd, where the Bank retired them on their 60th Birthday or the day before their 60th Birthday - and I was asked if I would be prepared to stay on, prior to Big Bang when all the negotiations were going on.  And I thought about it very deeply and initially I said 'No, I was not', but I was prepared to be a consultant. And eventually I decided that that wasn't really a runner either.  By then we'd seen enough of the bank, what was to become BZW and the senior management.  Their approach to life, in my view, was rather different to mine, and I frankly did believe that my style of management and way of doing things was different to the style of management and way of doing things of the bank.  I was running up to 60 and I decided that it would be far better if I did retire at 60 rather than stay on and actually retire and not even become a consultant.  Because they had enough competence there.  And I also believe frankly that if you are in senior management role whoever follows after you wants to manage it their way and do it their way.

BA: How had you felt when the Stock Exchange decided to do away with single capacity?

LT: That's a very difficult question. I hadn't thought about that.

BA: Or what was the feeling in the firm?  

LT: I think there was a feeling of inevitability about the problems of the Stock Exchange, the problems of the jobbing system; coming back to what I was saying earlier about the problems of the markets moving more and more one way, and jobbers collectively becoming less and less profitable because of the size of risk involved and the money you did or did not make on your dealing positions.  So I think there was a feeling that change had to come.  And you have to remember that of course we were in a situation where the Monopolies Commission was looking at the Stock Exchange in the context of commissions, etc.  Of course, in theory, if you go back to before Big Bang when the decisions were made, they weren't made on the basis of doing away with single capacity.  I think you'll find the actual original papers issued by the government actually didn't talk about that at all.  They actually expected it to continue.  It was the market itself that believed it could not continue and what you believe in tends to become true whether it's inevitable or not.  It's almost self fulfilling.  I think as a firm we were worried that given single capacity would go, that the firm would get pulled apart by demand from other firms for dealing experience.  Because, if you actually looked at the total dealing experience or jobbing experience on the Exchange, it couldn't add up to many hundreds of people, compared with the very large numbers of broking firms and brokers.  And if a large number of those broking firms wanted to actually set up dealing capability then they would look to the jobbers to pull staff from those jobbers.  And of course that's what happened to a fair degree.  We had a very difficult time in the run up to Big Bang with firms wanting to set up dealing teams and of course if you want the King Pin in the sense of your team then you can afford to pay virtually anything to get that one person as a nucleus to your new dealing organisation.  That was what was tending to happen to us as a firm.  We were tending to lose people no matter what, in my view, we did in terms of increasing salaries, which is actually what we did.  You couldn't hold people because somebody would always overbid no matter what you did.  That was the tendency, and that was the reason primarily why we made a large number of people partners in the run up to Big Bang to actually hold them.  I haven't really answered your question, which was what was my attitude to the change.  I think my attitude was it was an inevitable situation, that jobbing was dying on its feet essentially.  I couldn't see any solution, conceptually, to the way in which the markets were becoming one-way markets and the size of the risks involved.  It wasn't a change in dealing systems; it wasn't necessarily just capital; although most people thought it was, it wasn't.  You can afford to run a position but if you then lose, you take that position and you lose significant amounts of money, Ok that's capital but it's still profit and loss in the end.  You can't carry on doing that for too long, otherwise you have no capital left.  And anyway, people are very risk averse in many ways.  Some people delight in large positions and running those positions and some don't.  But as a firm on the whole you tend to be aware of the risk positions you are comfortable with and above which you become uncomfortable in terms of the risk of not being able to get rid of those positions.  

BA: Let me just switch the focus again to some of the firms senior partners and how you would describe them and what your salient memories of them are.  You mentioned earlier Esmond Durlacher in the early days being someone who was ambitious for the firm.

LT: He knew jobbing.  He knew a lot of people in the City and outside the City.  He was an intelligent man.  He knew where he wanted to go and he was a very nice man to talk to as well.  

BA: What about Sir Nigel Mordaunt?

LT: A very good jobber.  A very charming man, successful senior partner in the sense of holding the firm together, managing the change that took place in terms of Wedd and Durlacher.  I don't think he could have done what Esmond Durlacher did.  I don't think he had that sort of approach to life, that sort of mind.

BA: In what sense, in the sense that Esmond Durlacher had a vision of where he wanted the firm to go?

LT: Whether it was a vision or whether it was more a case of opportunism in a sense that he realised that you could no longer job in one market because that market could be dead and therefore you were dead as a firm for a year until the market starts again, and you had to go into more markets, and therefore the easiest way to do it was to buy up jobbing firms, and anyway they were being unsuccessful commercially and therefore it was easy to buy them up fairly cheaply.  So I would never know whether it was vision or opportunism.  I suspect it was both in actual fact in terms of Esmond.  

BA: Was it his nature to be like that?

LT: I wasn't close enough to really comment, I don't think, really.  I suppose the answer probably is 'yes' in the sense that he met Anthony Salmon at a cocktail party, talked about computers and decided yes, we ought to look at it.  So probably yes.

BA: And what about Dick Wilkins, how would you contrast him someone like Esmond Durlacher or Nigel Mordaunt?

LT: This is jolly difficult to answer.  A very strong willed man who wanted to do what he wanted to do, I think.  Very much the boss, very respected by everybody.  I would describe him as very much a man's man. He was great fun, he always talked to everybody, he never talked down to people, very popular with everybody. I liked him immensely.  But not a thoughtful man because he wasn't that sort of man at all.  He was given to spontaneous decisions really I think.  Probably not given to listening to advice too much either.  And yet I think he made a success of being a senior partner.  They all made a success of being a senior partner in their own way.  I think they did in their own ways and they were probably men of that particular period.  Dick Wilkins was senior partner in a period when the gilt market was very difficult and that was the area he knew best anyway so he  on the whole seemed to manage that very well, managed the dealing partners in that area very well, which was more difficult when he retired, no doubt about that.  I suppose there wasn't a lot of fundamental change when Dick was in charge really; again there wasn't any real, in a sense, need for it. I think I've said enough about him.  

BA: Would you say a jobbing firm had provided you with a very different career to that you might have had with a broking firm or other City firms?  Was there anything distinctive about working for a jobbing firm, even in terms of management?  

LT: I can see two or three things in the context of my career path: first and foremost changing from broking to jobbing.  It was a decision made really more on the basis of I'd gone as far as I could in that firm. I couldn't become a dealer because I could no longer walk properly.  In the context of Fenn & Crosthwaite, I couldn't see them paying me any more money.  These were the collection of reasons why I went into jobbing.  In the context of jobbing, I think, again, the very fact that I couldn't stand on my feet all day meant I couldn't go down to the Stock Exchange, where everybody else - all the people that joined the firm in the period I did at my age and younger went to the Stock Exchange as dealers.  I can well remember the manager of the firm, Appleby, at one time saying, 'Well if you can't go down the House you'll be manager one day.'  I think in some ways, without boasting, they were lucky that I never went down the House because, again, although I didn't do well at school, I had the logical and intellectual capability to actually realise and understand systems of book keeping and how to computerise them and used computers to the advantage of the firm.  Again, I would maintain, as I said earlier, the growth of the firm was directly related to and connected to the growth and the ability of the firm to actually manage themselves and keep in control, especially in the more stringent environments we have gradually moved [into] in terms of control of risk and this sort of thing, report to the Stock Exchange.  The question of reporting to the Stock Exchange your firm's accounts and this sort of thing all became much more stringent over the years, because again the problems of risk in terms of firms going bust and being hammered.  The Stock Exchange got more tough over the years.  But, yes, I'm quite sure if I had stayed in broking and stayed with that firm, I might have got to be manager, the manager of a medium size firm - reasonably big now, I suppose.  But that's all I would ever have been.  So in the context of jobbing, the fact that I went into jobbing when it was starting to grow ... I grew with it, no doubt about that, met the challenge, and I've become a relatively wealthy man because I was successful in a very successful firm. So yes, it certainly changed.  I'm quite sure that changes in jobbing was something that helped me immensely in terms of life - a very stressful experience but at the same time very enjoyable experience. Marvellous people to work with actually.  One might curse them on occasions but Wedd Durlacher was a marvellous firm and BZW will never be anything like it, I don't think.  Because its roots were a family firm and the thinking, despite the fact we got up to 500 people, was still basically the same.  They were interested in their staff, they looked after them.  It wasn't a welfare state but in a way it was a firm that were interested in people.  They weren't just employees. Enjoyed it immensely.

BA: Good, I think we'll finish on that note. Thank you very much.