CITY DIARY
CHRISTOPHER FILDES
City fingers remain locked in the crossed posi- tion, but hopes rise that the Government will not, after all, raid the private holdings of dollar investments. The idea, which is thought to have. been carefully examined, is specious: you ex- propriate the holders, pay them off in sterling, and use the dollars you gain to settle the coun- try's short-term borrowing. Thus you untie those strings which some observers were so sur- prised to find attached to our most recent loan. Overseas investments have been expropriated before now; but only in war-time, and with something like consent. To take them over now,. compulsorily, would in psychological terms do far more harm than good, and I hope that the Government has come- to accept this. .
A voluntary approach would stand po chance; as has been shown. I learn that last autumn the Treasury approached some of the Scottish investment trusts—which hold large amounts of dollar securities — and asked whether, in the national interest, they, would exchange some of their holdings for British government stock.
The eldest oyster looked at him And never a word he said: The eldest oyster winked his eye And shook his heavy head, Meaning to say, he did not choose To leave the oyster-bed.'
That, you will remember, is bow oysters avoid being eaten.
Progressive grandparents (having studied Mr Crosland's guide for the simple exporter, which I quoted last week) will want to see the latest statement of egg-sucking sub-policy : it can be found in a letter to the Wall Street Journal. There is nothing economically, commercially or morally wrong' (runs the text) `about increasing the sterling prices of many British exports. De- valuation certainly does not mean that the rest of the world should expect Britain to sell her goods for less than they are worth in fair com- petition with the goods of other nations. Indeed, if we were to do so, this would be contrary to acceptable commercial practice and might be a legitimate source of complaint.'
The oddest thing about this letter is the form of signature: `Yours faithfully, LORD BROWN Minister of State, Board of Trade.'
I dismiss the thought that this is a forgery— 'My cook has been sober, industrious and dis- creet. Yours truly, Mrs Smith.' Nor do I sup- pose that the Board of Trade takes the Wall Street Journal's readers for up-country hicks who need everything spelt out for them. So I can only conclude that his lordship has bon- rowed an idea from Bertrand Russell, who, when Asquith put him on the list of 300 Liberals who would be given peerages to swamp the upper house, said that he would take the title of Lord Snooks. Asquith asked why. Surely, said Russell, the object of policy was to make the House of Lords look ridiculous and he was doing his bit.
To be elected to the Court of the Bank of Eng- land would be distinction enough for most people. But a more refined distinction has come to Sir John Stevens. He was an executive direc- tor for seven years until 1964, when he was ap- pointed British Economic Minister in Washing- ton. Now he is back in the City—more precisely, in the partners' room at Morgan Grenfell—and rejoins the Court as an outside director on 1 March. Oddly enough, Sir George Bolton, whom Sir John succeeds on the Court, achieved the same double: he is a former executive director of the Bank, who left to take the chair of the Bank of London and South America and was then invited back on to the Court.
The twelve part-time directorships of the Bank are often thought of as the merchant banks' preserve. But the Court has changed so much. in the last few years that only one of its present members is a merchant banker: Mr Gordon Richardson, of Schroder Wagg. No Hambros, no Borings, no Kleinworts—to look. no further afield. From the clearing banks come Mr. Michael Babington Smith (Glyn, Mills) and Sir 'Ronald Thornton (Barclays). Sir John's appointment gives the merchants and clearers parity, and at the same time restores Morgan Grenfell's representation on the Court—broken in 1965 when Lord Bicester retired.
What is the most expensive share in the world? I am told by John Bull that Nestle is hard to beat. It is quoted on Zurich, so first you have to buy investment currency and pay the premium—now 213i per cent. Then you find that there are two kinds of Nestle share—bearer stock and registered stock. Only Swiss residents can buy registered stock : it now stands at 1740 fr. Since all the foreign demand is channelled into the bearer stock, it is at a premium—now 43 per cent—over the registered stock. Finally, the Swiss government imposes a withholding tax on dividends, of 30 per cent. So on the day John Bull buys Nestld we'll know that sterling is in real trouble.
An interesting move at Barings : they have decided, for the first time, to appoint a European representative. He is Mr John Duncan Miller, who now heads the European office of the Inter- national Bank for Reconstruction and Develop-
ment—an offshoot of the World Bank. He re- tires from this post in March. The new appoint- ment is conceived only in general terms, and the idea is that Mr Miller and the bank will tailor it to a suitable shape.
Mr Miller is one of those envied few who have made the transition (as Mrs Patrick Campbell so nearly said) from the burly-burly of journal- ism to the deep calm of the banker's parlour. Before his moo appointment he was Washing- ton correspondent of The Times. He is also a founder-member of the Costa Smeralda con- sortium which, led by the Aga Khan, has put tens of millions of dollars into developing the top right-hand corner of Sardinia. This must cheer up his visits to Italy. My Rome correspondent tells me that Mr Miller can be seen at meetings of the Food and Agriculture Organisation of the United Nations, looking bored and disgruntled —and, says my correspondent, rightly so.
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