The Jobbing System of the London Stock Exchange: An Oral History



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The Jobbing System of the London Stock Exchange: An Oral History

Ref.No.: 42 Playback No.:


Interviewee's surname: Birks Title: Mr

Interviewee's forenames: George T.

Date of birth: 13 September 1932 Sex: Male

Date(s) of recording: 18 October 1990

Location of interview: Institute of Historical Research

Name of interviewer: Bernard Attard

Type of recorder: Marantz CP 430

Total no. of tapes: 2 Speed:

Type of tape: TDK AR 60 Noise reduction: DBX

Mono or stereo: stereo Original or copy: Copy

Additional material: Copyright/Clearance: CMH; no restrictions

SUMMARY OF CONTENTS
Tape 1, Side 1
Birth in Walton-on-Thames in 1932; father a solicitor; education; no family connections with the City; obtains a job with De Zoete & Gordon; career with De Zoete; joins Phillips & Drew as a blue button in 1957; comparison of De Zoete and Phillips & Drew; description of Phillips & Drew; jobs as a blue button with De Zoete and Phillips & Drew; organisation of dealing staff at Phillips & Drew; Paul Bazalgette (who eventually becomes senior partner) joins Phillips & Drew as a dealer at the same time as George Birks; becomes assistant to Arthur Beard and is soon authorised; becomes senior gilt-edged dealer and a partner in 1963; advantages of being a relatively young senior dealer, and comparison with the ages of senior dealers in other firms; business friendships formed with Wedd, Akroyd and Wilson & Watford; relationship between Phillips & Drew and Wilson & Watford; Phillips & Drew does less business with Wedd because of a row between Arthur Beard and Dick Wilkins; dealers and firms who George Birks dealt with; description of Arthur Beard; a good dealer should not be hypnotised by a jobber's price; description of George Birks's dealing style; Phillips & Drew obtains a lot of business through undoing jobbers' positions; occasions when jobbers mislead George Birks about the amount of stock they had; Phillips & Drew able to undo jobbers' positions because many of its clients have active switching policies; comparison of Phillips & Drew's business with Mullens and Pember & Boyle; always a price for, and a supply of, every stock; individuals who tried to create artificial shortages of stock; comparison of gilt market with equity market; competitiveness of the market; Phillips & Drew always has a third firm to deal with in Wilson & Watford; in the gilt market a broker was less likely to be able to do his business if seen to be checking the price among several jobbers; role of the broker is to know the price without asking.

Tape 1, side 2
Importance of knowing the jobbers' likely positions in stocks; contrast between the dynamics of the gilt and equity markets; contrast between George Birks's dealing style and that of other brokers; role of Mullens as the jobber of last resort; organisation of dealing department at Phillips & Drew; George Birks becomes partner in charge of dealing and a member of the Stock Exchange Council; description of the early stages of a typical day; approach to dealing in hectic periods; the Phillips & Drew box; importance of being in the market to see what was happening; cycles of activity during the day; memories of the 1967 devaluation; impact of a Bank Rate change on the jobbers; impact on two stocks of a change in the way the British government levied capital gains tax; dealing on the telephone; concluding stages of a typical day; working life enjoyable; dislike of the temporary market because unable to see the pitch of Akroyd & Smithers; Smith Brothers' abortive entry into the gilt market; impact of the closure of Pike & Bryant and Francis & Praed; the 1974 recession; high turnover/eg, of client who was switching stock and jobber's fear that it would be sold back to the market; importance to brokers of matching orders and doing net bargains; gilt strikes.

Tape 2, side 1
The operation of the markets during gilt strikes and the role of the jobber; influence of jobbers on prices; eg. of Jimmy Priestley who would arbitrarily mark prices up and down; entry of Pinchin Denny into the gilt market; difficulty of new firms establishing themselves in the gilt market; the Battle of Watling Street; recollections of Norman Smithers; Hugh Merriman; Brian Peppiatt; Tim Nixon; Dick Wilkins; Herbert Wilson and Wilson & Watford; problems associated with commissions; desire of some broking firms to job stocks; jobbers' contacts with clients; competition from discount houses; strength of single capacity is that it prevents conflicts of interest; weakness is its cost structure; changes in atmosphere of Stock Exchange floor and decline in discipline.


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