Failing to Adjust, 1960-1969
The status quo had not been an option in the 1950s but the Stock Exchange had chosen it without disastrous consequences. It was even less of an option in the 1960s and there was no guarantee that, if it was chosen, the Stock Exchange would have a particularly promising future by the end of the decade. Membership continued to decline with the very heart of the market, in the shape of the jobbers, facing a difficult and uncertain future, as talent and capital drained away through retirement. Even brokers, with a more certain income from fixed commissions, found it difficult to recruit new staff and potential partners, while restrictions on size and capital left them vulnerable to outside competition. The Stock Exchange itself was increasingly in need of modernization as no major reconstruction had been undertaken since the end of the war. There was always the possibility of a change of government, reviving fears of nationalization and intervention. The structure of commission charges had to be adjusted in such a way that the institutions would continue to use the members of the Stock Exchange. Conflicts of interest between brokers and jobbers and between large and small firms had to be resolved without so alienating either party that they ceased to value membership and left.
During the 1960s the government rather than the market continued to be the major influence over the way London Stock Exchange developed. This was both in terms of general economic policy, which affected the environment within which the Stock Exchange operated, and of monetary and fiscal policies which had direct bearing on the activities of investors and borrowers as well as the membership itself. As in the past the Stock Exchange appeared largely unsuccessful in getting the government to take note of its particular requirements in an increasingly competitive world. The 2 per cent stamp duty on transactions, for example, was a long-standing annoyance to the Stock Exchange, convinced as they were that it cost them business, especially in competition with foreign stock exchanges where such a tax was either lower or non-existent. Consequently, almost on an annual basis, they lobbied the Chancellor of the Exchequer for a reduction, pointing out the damage it was causing. However as the government's own giltedged securities were exempt from stamp duty the Chancellor was little