BANKERS TO THE WORLD

essaist once expressed something quite timeless about overseas trade. The spectator 19th of May 1711. Nature seems to have taken a particular care to disseminate her blessings among the different regions of the world with an eye to this mutual intercourse and traffic among mankind that the natives of the several parts of the globe might have a kind of dependence upon one another and be united together by their common interest. The roses are coming on very nicely. We just finished proving them. >> Oh dear. I think that with any bit of rain at sunshine now this finished mine about 2 weeks ago. So I can sit back and just watch them now. It was easy. >> Yes. >> Good morning John. John. >> Oh good. Oh this is fine. We've been waiting for this. I have Mr. Roberts coming in this morning. Julford, Willford, Gilford. foreign. >> Barbara, chance to use your fabulous English in >> They're asking about a firm in Sunswal Timber. Pomidori Billori. >> The world of those of us who go down to the sea in banks rather than ships. >> Morning, sir. >> Morning. I've spent years telling my domestic colleagues that they have it easy and that the overseas departments are really the only place to be. Certainly, we have the lion share of overseas trade, but we all have our uses. The view from the bank in the high street may be the factory or the garage opposite, but its real horizons lie very much further a field. Listing all the services of the bank is rather like listing what life can offer. Different things still happen to different people. What was in the mail this morning? Well, the amount obviously depends. A branch like this one at Guilford might not have all that much foreign mail. A few letters, the odd trade document in respect of the local firm. Most branches display this sign. In some areas, it's more opposite than others. A provincial overseas branch and all the banks have them will have been set up at a center for a particular industry cotton or iron and steel or in this case wool. Right at the top, we are back again at the chief foreign or overseas branch of the bank. And the head office of a foreign bank in Rome or Stockholm or wherever will be in much the same position as regards mail and traffic. Enormous volume and variety, but only confusing if you allow it to be. All of this is accomplishing three main tasks. One, extending further the classic purpose of the check, enabling payment to be made without the bother and risk of humping notes and coin from place to place. Two, providing a means by which the currency of one country can be exchanged for the currency of another. Three, financing the growth or production of goods and articles and their transport to the eventual consumer. I lean on the judgment of the great Walter Badget. The business of banking ought to be simple. If it is hard, it is wrong. An awful lot of the paperwork that floats about in commerce is simple debit and credit. The check retains its simplicity of purpose. An order from one party to a bank instructing it to pay a third party a certain sum of money. It grew up to save all of us having to walk about settling every transaction in cash. It was the same with much of the other documentation. Having paper float about is easier than carrying money. Rationalization continues. Sometimes paper, sometimes just figures and more and more expressed as electronic impulses. People and companies have accounts with banks. Banks with other banks and with the Bank of England. If there was a country that dealt in marbles and you traded with them, you could have an account in marbles. Some of the overseas checks may be a bit more colorful, but in essence, many foreign transactions are no different from writing a check for something bought in the high street. Foreign exchange can get complicated, but in this form, through the medium of the traveler's check, millions cope with it every holiday and on countless business trips. Simple in any language. Check validity of documents. Check the amount. Check the rate. Work it out and hand it over or set about handing it over. The traveler's checks will trace their way back to the bank of issue. And as for the money, >> is that ours now? All banks balance their books at the end of the day. Currency as well as sterling. Each will then start from scratch tomorrow morning. Except of course there'll be so many exchange transactions today between Lera and Sterling and Lera and Franks and Franks and Croner that it's anyone's guess who'll end up owing who what. It all helps to keep us amused after the doors close. In industry, thoughts of export and expansion don't suddenly dawn. They'll be permanently in the businessman's mind and a regular topic of conversation with his bank manager. Any English firm that produced something good and wasn't thinking of export would soon arise the interest of a foreigner who was thinking of import and who might soon be putting through a call to his own bank. One of the most basic services the banks can provide is simply passing on up-to-date information affecting introductions through their own branches and through their contacts which are the best sort other banks. Okay, that Englishman from the plastics firm is coming in at 11. >> Oh, Mr. Townent. >> That's right. I think he fancies you. >> Oh, nay. Cherro, District Bank, Guilford. I've heard from Sweden about that timber mill at Sunsfall. >> The network of banking is just as exciting in its way as military intelligence or the diplomatic pouch or the dispatches of a foreign correspondent reporting to a newspaper or a news agency. The heading on a letter, the name of the man who's going to read the reply, means something personal. The bankers who specialize in foreign matters don't only write letters. They travel regularly and on a planned basis, getting the atmosphere and the facts. and in the process passing through innumerable impressive entrance halls where you always seem to hear one uniform say to another. >> I mean it's Ron's turn in it. All that again. I know my colleague in Rome looks as though he's on a swan, but I bet he's working on something. Coffee is quite important in banking and not only in the 18th century when if you believe the books bankers and merchants were swilling it all day long. Even today coffee has quite an etiquette of its own. The coffee exploratory, the coffee validtory, the coffee utilitarian. The banks are very ready to send senior staff to other parts of Britain at the request of the local branch manager. The specialist from head office knows countries and continents, certain kinds of markets, special procedures in great detail. The branch manager knows his area, its products, and his customers. The manager of a bank at slow on the trading estate on his way to visit a customer who makes gaskets and oil seals for pretty well all makes of car, British and non-British. In one respect, banks are rather like God. They help those who help themselves. Those who, whatever their age, do their homework. >> Thank you. >> Hello, George. >> Good to see you. >> Taylor, have a chat. >> You sounded very mysterious on the phone. >> We're getting to the stage we reached with Italy and buying up a company. I remember. >> In this case, it's central Sweden. We've had a tip from a firm in an allied but non-competitive field about a factory just outside Obsala. This one. From there, we could cover the whole of Scandinavia. >> Can I borrow this? >> Why do you think Lillian typed it? >> Well, as a result, we'd free production for other markets. That should please someone. >> How long can you give me? >> 10 days. You want the same sort of information which we got you on the Italian firm. Room for expansion whether any redevelopment planned in the area. Labor costs. >> So that's the sort of thing that you can find out that we can't. >> Right. I'll get the overseas boys onto it. Fine. Come and have a walk around. I'd like to show you a bit of refan we do if this Swedish factory comes off. >> This is a very well-run firm. Every time the bank manager goes round, he gets more evidence from his own eyes. He needs to. The bank wants to be certain that any money lent is safe because it comes to them in the first instance from their depositors. What they were really talking about in the office was providing money finance. The branch manager knows fairly exactly what the firm can tackle on its existing capital. To buy the new factory, they'll need help from the bank, but also in applying to the Bank of England for permission to make the investment. When the overseas branch through a correspondent bank in Sweden check that factory in Absala, they judge it as a good business risk for the bank as well as for the firm. But nothing escapes the scrutiny of a bank manager of any nationality, either on a first look or a return visit. The caliber of the number two, that's if he's allowed to go round with the number two. And if not, what are they hiding? Is the place bursting at the seams? If so, is there room to expand? The state of the order book. Does the firm know where it's going? And is it going anywhere? In this particular case, he asks himself, why do they want to sell? >> Just on my way to the bank now. >> Okay, fine. >> To the bank for foreign currency. The first step on an autoutumninal trip around the wine growing areas of France, Germany, and Italy. There'll be some long faces if there's weather like this where he's going. In the autumn, he gets the first indication whether the current year's vintage is going to be a marvel or a disaster. In January, he'll be off on another trip, actually tasting Thank you. >> There we are, Mr. Asher. 20 in German marks. >> Thank you very much. >> 20 in French frames. >> Thank you. >> And 100 in travelers checks. >> Thank you. You want me to sign these? >> Yes. Down there, please. >> And we'll telegraph a further £50 each of the centers you ask for. >> Thank you. I'm sure I need it. >> Hello, Gerald. Are you off to Europe again? >> Hello. Nice to see you, Jeffrey. >> Where are you going this time? >> Down the R. At this stage, the bank's just handling his currency and travelers checks. But all the year round, their judgment is very much tied up with his judgment. >> It's finished now. I think >> it is. Is it? >> Well, would you like to come around to the office? >> Sure. There are several things I want to talk to you about actually. Oh, good. >> Uh, I expect while I'm away, they're going to have certain problems in the office. >> Tony going with you? >> No, it's not. >> This is our new fabric that we developed and we've made a good >> in this business. They're always well ahead. >> It's spring in London and they're discussing clothes for autumn. I can see very nice cloth. What's the weight for this one? >> 16 to 17 ounce. We've had a, you know, a great deal of success already with in the States and we hope that it's going to suit you in Sweden. >> That's admirable. I think we could use a 16 oz cloth very well. Can we see the range on as one or two of these? >> Well, I've got the girls to try them on. Pamela, can we see these things, please? Now we um you know have two jackets in this group of dresss and skirts and slacks obviously and we coordinate the knitwear in Lambs and in Shetland and picking out the high like colors. Of course you can have the shoes and handbags from our other division. >> I think they're fine Graeme. We have wonderful range here for the sports department. >> The slacks are lovely. >> Just the two colors in the sweaters. >> That's it. That's it. Very nice collection. >> Fine. >> See the back of this one? >> In foreign banking, you're always aware of that dependence one upon another. Worn clothes at some stage need wool. If the buyer buys the clothes, the English manufacturer will buy cloth and a wool spinner somewhere will buy wool or wool tops. and it won't be long before it finds its way north. If you work at a bank anywhere near Bradford, there are procedures you soon get to know about involving raw wool, wool tops, wool futures, and the rest of it. >> One bit. The work of the great commodity markets sustains us all. >> 31 34 32 >> 29 >> 29 >> Most of us are only aware of it when we happen to pass the door >> 3 >> or if the price goes up or we can't find what we're looking for. The banks very much aware from the biggest of bulk markets right down the channels of distribution where it gradually gets absorbed into domestic banking aware and in touch through a multiplicity of documents and meetings and phone calls. Some trade transactions involve all three of the basic functions. Payment, exchange between currencies, finance, and movement of goods. All the banker really has to go on is his judgment of people and information. In trade, he's backing up the judgment of people whose business it is to know or assess or take a chance in a particular trading area that they know backwards. An old banking adage says there's no debit without a credit. There's a kind of parallel with imports and exports. A country can't keep on selling to other countries, exporting without eventually buying something from one of them. Importing. And the other way round, if you want to import regularly, you must export in order to pay. Not exhortation, just fact. A country like ours has to import certain items because we haven't got the climate to grow them. Natural resources, temperament, knowhow to provide certain other goods or services. Our ships are laden with the harvest of every climate. Our tables are stored with spices and oils and wines. Our English merchant converts the tin of his own country into gold and exchanges his wool for rubies. Britain became a great trading nation almost by divine right. She now needs to remain one. Our influence in some spheres has declined. Some things we produce which used to sell well are no longer wanted in the same form. The market changes, so outlook and indeed premises have to change. Our skill in trading and banking still commands the respect of the world, which is fortunate because there's more movement and faster development in trade now than ever before. No island is an island any longer. bills of lading, air consignment notes, invoices, certificates of insurance. The documents have formal names and are meant to be taken seriously. Don't make the mistake of thinking that the documents are pretty pieces of paper describing the goods. The documents are the goods plus the bill of exchange addressed by one party to another party to pay to a third party a certain sum of money on a certain date. For it to be accepted, it has to be signed. For it to be understood takes ages. Under a documentary credit, a bank becomes responsible for paying. They pay on presentation of the relevant shipping documents. For that matter, the bank agrees to pay when it accepts a bill of exchange. They accept now and pay later. Either way, the bank is providing finance. The trader has the money. Trade can start or start again. If not, there'd be some very long waits between growing wool on a sheep and receiving money for clothes made from it, or between the farmer who harvests the wheat and the manufacturer of bread or cake. One of the great markets, acclaimed for its invisible exports, is housed under the bank's own roof, the foreign exchange market. Any moment now, they're expecting an announcement of bank rate. It may stay the same. It may go down. >> 72 7 and 12 bank rate. >> Have they got what less? Swiss bank two day notice. Yeah, I think we might do. What are they paying? Hello. Hello. >> Two day notice. Do >> you want a quarter? We want And now he wants some. >> Do you want immediate Roy? Take those spot. >> Take them at 29. How many? >> Quarter million. >> 3136. I got a couple of million I can spare at two and a quart sunny and that's all my girl Charlie Worth. Sorry, he's going to come back on a cable. >> Oh yeah, that's all right then. Don't mind any of him. >> Avon Swiss Charlie. >> Three time phrases hover permanently over the city. Shortterm, medium-term, long-term. Each one covers volumes of specialized experience. Foreign exchange can certainly get complicated if you wanted to. And there are the sophistications of the Euro dollar. A certain sum of dollars can start the day in someone's account in New York. New York comes on the line at about 2:00, but even before then, these dollars by purchase and sale can move about quite a bit between currencies and customers. At the end of the day, the dollars may be in someone else's account in New York, but by the use of them, an international company based in Holland and working through London and New York may have financed the building of a bridge in a township in Africa. For the born romantic, there's a lot to enth infuse about in foreign banking once you learn to read the reality behind the document. In this case, books from Italy wanted in leaves. As a result of which essays on Leia party this term in the University of Leeds will contain a little more meat and a little less waffle. The documents are certainly fascinating. the economic geography, the languages and the shades of meaning. >> But the point is the work, not the fascination. At a certain set time each day, the bank closes its doors to customers. Within 40 minutes, all the checks and bank drafts must be in the hands of other banks. Large sums depend on it. At this time of day, this chap's in the seat of the mighty. He knows what we owe and what other banks owe us in millions. And yet it often looks as routine as that. It has to. There has to be a certain amount of professional detachment. Sometimes it's needed. >> Hello, >> Danny. I've just had a cable saying that they decided not to sell. >> Not to sell? Why? Have they had a better offer or what? We're trying to find out. >> Call from Paris. Mr. Asher. >> Thank you. >> Hello, Gerald. >> I must be quick, but I want some help from you. The point is that we've been making quite a thing of shadow bartal, and unfortunately, this year's vintage is quite undrinkable. Now, the proprietor has still got a fair stock of last year's wine, but he knows as well as I do what the demand will be. and he said that if we take this from him, we've got to pay immediately. >> How much do you want? >> Well, I think I'm going to need about £10,000 right away. >> Oh, sounds all right. Well, the usual profit margins. >> Well, yes, it was a good vintage. >> Oh, jolly good. I see no problem with this. Um, I'll tell you what. I'll draw up the usual mail transfer and documentation, and when you come in to about the American trip, uh, I'll have it all ready and we can send it off then. Is that all right? >> Good. Thank you very much indeed. >> Not at all. Goodbye. Goodbye, Jeffrey. >> The month of May finds the wine shipper in Boston and in five other centers as part of a campaign to interest American buyers in French wines for the bank at East Jeep. When he returns, there'll be the banking and shipping arrangements between France and the United States since the wine will be going direct. Also involved will be a French government export organization and the head office of a French bank. More than enough to keep the bank busy on just one account. And the bank has more than one of every kind of account. But luckily there are the exhilarating moments when if you keep at it the way suddenly clears. >> Tomatoes. more separate source. International merchandising ensures that such carbohydrate delights shall be available to all who want them. >> Oh, Danny, I think it's going to be all right. >> The jubilation is justified. It couldn't happen to a nicer firm. But the basic attitude is still that's that one. Now what's the next on which good business and good banking depend. >> Mr. Jones, >> you'll often hear a bank manager say he's interested in the greater prosperity of his customers. His work is directed to that end. Those of us who act fulltime as bankers to the world tend to feel that the best interests of each country can only be served if the whole world is made prosperous. >> You push off when you finish these. >> Thanks. You go get a coke on your laugh. Nature seems to have taken a particular care to disseminate her blessings among the different regions of the world with an eye to this mutual intercourse and traffic among mankind. that the natives of the several parts of the globe might have a kind of dependence upon one another and be united together by their common interest. Heat. Heat.