As part of the LBMA’s Voices Project, Michele interviews Stewart Pixley, about his experiences of working in the family bullion brokerage business that was originally set up in 1852 by his great-grandfather in partnership with Henry Haggard.

During my time spent with the LBMA recording past and present members of the London bullion market for the Voices project, I visited many of the archives located around the City of London, unearthing papers connected to and revealing changes that have taken place in the market. You can imagine my delight, when on gaining special access to the surviving paper records of Sharps Pixley, which now form part of the Kleinwort Benson collection, I came across a 19- page transcription of an oral history interview with the late Stewart Pixley of Sharps Pixley, which took place sometime during the early 1980s, almost a decade after his retirement.

Sadly, I have still to locate the original taped recording, but luckily the transcription contains a wealth of information and is packed full of events and stories throughout Stewart’s 34-year career in the London market. With the kind permission of Commerzbank, the custodians of the collection, I can share some of the highlights, offering a rare insight into Stewart’s role within the company, the motivation and decision process leading to the sale of Sharps Pixley to Kleinwort Benson, and the subsequent transition and period of adjustment under the new banner.

Opening his interview with a potted family history, Stewart proudly tells of the firm’s heritage. Begun in 1852 by his great- grandfather, Stewart Pixley, a senior partner in the Cashier’s office of the Bank of England, in partnership with Henry Haggard, the son of the principal of the bullion office also of the Bank of England, traded as Haggard& Pixley, of 8 Copthall Court. According to Stewart’s own father, his grandfather saw the opportunity for an “honest bullion broker in London”. The firm of brokers put producers and consumers together and charged a small brokerage. Over the years, various partners came and went, and the business trundled on before Stewart, following seven years serving in the Army, joined in 1947, at which time, the London gold market was closed and had been since the outbreak of war in 1939.

Mr I M L D Forde, Director of Kleinwort, Benson, Lonsdale Ltd. (seated left) and Mr S E Pixley, Director of Sharps, Pixley & Company, sign the agreement whereby Kleinwort, Benson, Lonsdale purchased the whole of the Issued Share Capital of Sharps, Pixley. Standing behind them are the three other present Directors of Sharps, Pixley, Mr HW Mermagen, Mr S RV Pixley and MrV AWerner. Circa 1966. Photo reproduced here with the kind permission of Commerzbank.

The accompanying timeline (see right) shows the names of family members and others associated with the firm. We are able to fill in some of the gaps not covered by the interview from documents held within the collection.

When in 1954, the gold market reopened, the big four brokers were still in existence. Montagu, Mocatta, Pixley and Sharps, plus Johnson Matthey and Rothschild were either banks or very large firms in their own right. Gradually, some of the firms joined together. Stewart explained how the composition of the market changed and why Pixley & Abell and Sharps & Wilkins joined forces to form Sharps Pixley in 1957:

“To be a bullion broker, you had to be able to borrow a lot of money and if you didn’t have a large friendly parent company with all the money in the world available, you were at a disadvantage. From our experience, we used to go around to all our friendly merchant banks and say ‘lend us thirty thousand, or fifty thousand or something’, and we used to do it against a certificate saying that we were holding allocated silver at their disposal– which was all honest, but living hand to mouth rather.”

Ahead of the merger of Pixley & Abell and Sharps & Wilkins, Johnson Matthey had already approached both firms with a view to a takeover and amalgamation to become the bullion broker side of the operation. Stewart shared that it was his father who turned the offer down:

“He wasn’t keen on that, and it wasn’t very long after that that Mocatta & Goldsmid were bought by Hambros Bank and my father’s remark was, ‘Huh, if I’d known that was going to happen, I might have thought again’. He thought it would be too much of an upset in the Market to be linked with Sharps and with Johnson Matthey, which I suspect the Bank of England would not have been too keen on because it would have reduced the number of firms in the Market from four in the silver down to three. Pixley & Abell wasn’t in the silver market. It would reduce the number of firms in the gold market from six down to four.”

“Ahead of the merger of Pixley & Abell and Sharps &Wilkins, Johnson Matthey had already approached both firms with a view to a takeover and amalgamation to become the bullion broker side of the operation.”

Back Row : A J Duncan, A Lambert,VJeffers, G McMillan, J Clark, C Holes,W LombardMiddle Row: P F G Barnes, Mrs F Horsburgh, Mrs IYoung, Miss Patricia Haines, Miss I D Pampel, Mrs C Adkins, Mrs J Shoring, MrsV DucksburyFront row: HW Mermagen, D N Saunders, R A Henderson, G F M PThompson (Chairman) S RV Pixley, M J Hawkes, E S M Bennett. Photo reproduced here with the kind permission of Commerzbank.

When the Bank of England was approached ahead of the Pixley & Abell and Sharps & Wilkins merger, it was explained by Stewart senior, “Look, all our competitors in the market are so much more powerful than we are,” and the Bank said, “We know, we would be delighted if you would join up.” Sharps Wilkins had four partners and seven staff, including three bullion porters down in the vault and four office staff. When it joined Pixley & Abell, only Louis Balfour, the senior partner, Bertie Milner, the chief clerk, another clerk who died quite soon after and the resident bullion porter who lived over the vault came across. They joined the three partners at Pixley – Stewart, his father Stewart E Pixley and Percy Hawkins – and Sharps, Pixley & Company was formed.

The next major change for Sharps Pixley came in 1966 when it was acquired by the Kleinwort Benson Group. Stewart recalled that there had been “some reluctance to look for a parent company to ease the credit flow”. Sharps Pixley received a number of approaches from banks, merchant banks and others, but it wasn’t until the approach came from Kleinworts, which was a valued, well- established old customer, that the partners seriously deliberated a buyout. Stewart explained that the big problem for Sharps Pixley during the negotiations was that:

“When you had a firm, when we were entirely independent, that made £25,000 gross in a year, we thought we did well, and you can’t persuade a merchant bank to pay you a large sum of money for a firm that can show them nothing. They want to see the last ten years’ results and then they pitch a price at you. But in fact, with Kleinworts, we invented a system that there was an agreed price. They paid us a modest part of it to start with and the balance was to come if our performance in the following three years was what they reckoned was sensible to allow them. Merchant banks were pretty hard-headed. This was the only way of getting the price we wanted.”

During the negotiations, two directors of Kleinworts asked Stewart: “How can you justify this amount?” He responded: “Well I can’t, except I am sure in my own mind that we, with your financial assistance, I think we should be able to take off and make some money.”

A price was agreed, and the deal was done, but unfortunately 1967 proved to be a “very sticky” year. All three members of the London silver market – Sharps Pixley, Mocatta & Goldsmid, and Samuel Montagu – were caught short when the American Treasury, without warning, turned round and stopped selling silver. It did it in such a deliberate way to try to catch out the speculator; instead, it caught out the London brokers. Coming on the heels of the recent takeover, it wasn’t a good start for Sharps Pixley, which reported a £600,000 loss. Stewart described the events that followed:

“When you had a firm, when we were entirely independent, that made £25,000 gross in a year, we thought we did well, and you can’t persuade a merchant bank to pay you a large sum of money for a firm that can show them nothing. They want to see the last ten years’ results and then they pitch a price at you.”

Sharps PixleyVault, circa 1969 Photo reproduced here with the kind permission of Commerzbank.

“There were a number of those sort of board meetings, Sharps Pixley board meetings with Kleinwort boys there, and all sort of breathing heavily and saying, ‘What a loss’, and I said, ‘The only thing we can do now is to work like beavers and get it all back somehow’, and there wasn’t an awful lot else one could do, and I don’t think I slept for weeks, until I got a written note from Cyril Kleinwort, the chairman, in his own handwriting saying, ‘I know you are doing your very best, jolly good luck to you’. It was the nicest thing he could have done. It did us a power of good. Our morale was pretty low for quite a few months. Our bacon was saved by the Labour government who devalued the pound in September, and we made such an enormous profit out of that that we covered our losses with a reasonable profit.”

What actually happened was that the department was selling a lot of gold and had an enormous outstanding position in dollars that they were lending to Kleinworts and an equally valuable position with sterling, and of course when the pound was devalued by nearly 14%, they made a profit of 14%.

Stewart was asked into Cyril’s office and had another difficult conversation with him. When Stewart reported that the bullion department had $11,500,000 on the books, Cherrill, the head of the Foreign Exchange department, almost fell off his chair on hearing the total amount. He said: “You can’t do that, what’s your limit with the Bank of England?”

Stewart explained:

“We don’t have one! Never having been a bank, we never had a limit, we had a limit on gold.” From that moment onwards, it all went pretty well. There were ups and downs, but certainly since Sharps Pixley made some enormous amounts of money for Kleinwort Benson. The first year after the hiccup occurred, the next year we made them over a million pounds.”

“A price was agreed, and the deal was done, but unfortunately 1967 proved to be a “very sticky” year.”

Following a period of illness in 1970, which Stewart put down to “too many big City lunches, too many cigarettes, not enough sleep and so on”, he felt the time was right in 1972 to retire. One of the first things he did was go out and buy a motorboat, and motor down to the Mediterranean. He kept it for a few years before trading it in for a motor sail boat, which was much more economical. Stewart maintained his link to the market. He was a Liveryman of the Goldsmith’s Company and Freeman of the City of London. When in 2011 he died aged 90, tributes to him appeared in The Alchemist. Ed Hoffstatter, who Stewart asked to establish Sharps Pixley Inc. in New York in 1970, recalled:

“Stewart defined for me the meaning of being a true English gentleman.” While John Coley believes “Stewart’s legacy of the family firm atmosphere is why, to this day, Sharps Pixley people have such an unmistakable identity and camaraderie”. Stewart was the last individual representing a line of family names associated with the market for over a century, his contemporary being Jock Mocatta. As noted in The Alchemist, the era he came from was “a gentler time in the market; of bowler- hatted attendees at the Gold Fixing, of silver pinned at $1.29 per ounce until 1967 and gold at $35.00 until 1968”.

Dr Michele Blagg (BA, MA, PhD) is a visiting Research Associate at the Institute of Contemporary British History (ICBH) at King’s College London. Until recently Michele was Research Consultant for the LBMA, engaged on the oral history project ‘Voices of the London Bullion Market’. As part of a collaborative doctoral award granted by the Arts and Humanities Research Council, she was based at the Rothschild Archive. Her doctoral research focused on the Royal Mint Refinery, operated by N M Rothschild & Sons between 1852 and 1968, and how it adapted to the changed London gold market.

Her areas of interest are in financial and business history with special regard for the actors and networks located in the London market.

She teaches on the MA in Contemporary British History and assists with the Witness Seminar Programme. She sits on the Business Archives Council Executive and is involved in the annual ‘Meet the Archivists’ workshop held in the City that aims to explore ways in which research students can identify and use business records in a variety of different research fields.