PROFILE LORD CROMER—GOVERNOR OF THE BANK OF ENGLAND

Press, Volume CIII, Issue 30630, 22 December 1964, Page 16

PROFILE LORD CROMER—GOVERNOR OF THE BANK OF ENGLAND

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SIMON KAVANAUGH)

James Bond and his chief “M” were dining with filmland’s version of the Governor of the Bank of England. The setting was antiquely sumptuous, mahogany furnishings reflected in the patina of fine old silver, deep drape curtains and old crusted port—though (107 had some reservations about that excellent wine.

The subject they international currency c plot of the film centred < a nuclear device among A

discussed was gold. Their aim—to prevent an risis, with Britain as the main sufferer. And the on Fort Knox where Goldlinger planned to deposit jnerica’s gold reserves.

The setting in which the non-fiction Governor of the Bank of England. 46-year-old Old Etonian Lord Cromer, works is every bit as impressive as the camera-eye view, fine old furnishings, a huge Adam table instead of a desk, a 1795 pedestal clock and an inkstand made in 1733 for Sir Robert Walpole, Britain’s first Prime Minister.

And in the last weeks, this member of the Baring banking family has been the central figure in a real-life Goldfinger exercise during which he raided the world’s banks of 3000 million dollars to arrest a sterling crisis. A third of that plunder came directly or indirectly from the radio-active-free vaults of Fort Knox. A Young Governor What kind of man is the third Earl of Cromer —the man to whom the Socialist Prime Minister. Mr Wilson, turned when his economic measures failed to restore international confidence in the British economy. When Cromer was made Governor of the Bank of England four years ago by the Conservative Prime Minister, Mr Macmillan, there was a certain amount of sneering. George Rowland Stanley Baring was socially sound —with an inherited peerage and with membership of the right clubs, Brooks and the Beefsteak —but he was little known outside private banking circles. He was also the youngest Governor to be appointed since Samuel Beachcroft in 1775. Cromer was 42 years of age and had hardly had time to make his mark in the City. “The Barings are strong, sensible, self-reliant men, with a profound belief in themselves, their family, and their country,” wrote Lord d’Abernon in the 1930’5. “They are not subtle or mentally agile, but endowed with that curious combination of character which lends authority even to doubtful decisions.” (More topical perhaps is to quote lan Fleming’s Bond, who, when asked the names of the richest man in England, included Baring in the handful of really wealthy ones.) When Cromer was born in 1918, the son of a former Lord Chamberlain, King George V stood as his sponsor. As Viscount Errington he was educated at Eton and later Trinity College, Cambridge before joining the family bank. For a time he was private secretary to the Marquis of Willingdon, whom he accompanied on official visits to South America, Australia and New Zealand. A Guardsman When war broke out he became an officer in the Grenadier Guards and in 1942 married the Hon. Esme Harms-

[ worth, the beautiful daughter !of newspaper magnate Viscount Rothermere. (They have two sons and a daughter, live on a farm in Kent and have a summer villa in the South of France next door to Lord Astor of Hever, who is Lord Cromer’s uncle.) He ended the war as a Lieu-tenant-Colonel and then went back on to the board of the family bank. Within two years he was made its managing director after a spell of banking and stockbroking on Wall Stret. With his father’s death in 1953, Lord Cromer succeeded to the title. He was 35. The first indication that he was heading for higher position came when he was made chief of the Treasury delegation and British Economic Minister in Washington for two years. Whitehall received his economic dispatches with increasing respect. “Hardworking and undogmatic” was Washington's verdict. The Baring charm worked wonders.

But the City was frankly surprised when young “Roly” Cromer was made Governor, although delighted that Macmillan had resumed the tradition of appointing a merchant banker. The previous governor, Lord Cobbold, had always been a career central banker, concerned with national finance rather than commercial finance. A merchant banker in theory is a good choice of appointment because he is also on intimate terms with wealthy individuals and non-State corporations. Poorly-paid Job The duties of the Governor of the Bank of England (at £2OOO a year the highest, but o- e of the worst paid jobs in banking, although his fellow directors can vote him more) is to keep before the Government the views of major city interests—merchant bankers, foreign exchange dealers and the money market. He must be one of the world’s best informed men on international monetary affairs. Indeed, Lord Cromer has more than measured up to these qualifications. At meetings with the so-called “faceless bankers of Zurich”, his upper-crust “Establishment” background and the Baring reputation has gone down extremely well and he is on cosy first name terms with them all. When the Labour Government of 1945 nationalised the Bank of England, diminishing its power to that of an “East End Branch of the Treasury,” the Bank’s right to a say in the nation’s affairs was drastically reduced. So when Lord Cromer reduced the Bank rate of 7 per cent to 6) per cent just a couple of months after taking office in 1961, it was regarded as a major victory for the Bank because Treasury officials had wanted to hold out longer. Said Lord Cromer at that time: “One of Britain’s troubles is a national tendency to revere the past to an excessive extent.” He accused industrial-

ists of not exporting all they might because they made more profit selling at home. Management and unions also came under his hammer for “outdated customs and practices.” Rescue Operation Undoubtedly Cromers greatest triumph has been his ability to avert one of the worst financial crises in Britain's history. The world now knows the breathtaking story of how close the proud came to catastrophy. The dreaded word “devaluation” seemed only hours away and with it all the repercussions of a fall in the value of the world's No. 2 reserve currency.

Cromer had privately advised, then pleaded with the new Labour government to raise the bank rate two weeks before they eventually conceded the need to do so. But 24 hours after it rose to 7 per cent foreign speculators made it clear that even that emergency measure was not enough to restore their confidence in sterling. Hourly, millions poured out of London and the Government asked Cromer and his team to try to save them.

It was a near impossible task. But the Old Lady of Threadneedle street rose as magnificently and as strongly as its stone walls. Every minute counted as Cromer contemplated the four mulberry trees shedding their leaves outside his ground floor office.

Then began a titanic telephone offensive that lasted for 22 hours and resulted in the mightiest support operation in financial history. The Government sighed with relief and amazement as Lord Cromer announced he had won an 11-nation loan of £1,000,000,000. Through one of the most powerful “old boy” networks in the world, Cromer had convinced the Basle Club that Britain was a good risk. The loan is for six months. Britain's problems cannot be solved completely in that time but at least she has a breathing space. In future the Prime Minister may pay more attention to men like Lord Cromer.