monster A capitalist crisis brings to the fore those capit. alists most capable of an entirely ruthless and single-minded pursuit of profits. The meager between Hill Samuel and Slater Walker Securit ies (announeed in April and now going ahead with goveenment and Bank of Englund approval) is an incarnation of that kind of ruthlessnesa. The new compeny, in the words of the Economist, 'is one of the largest merchent banks in the world and Intends to become a world merchant bank, It will have net assets (assets minus liabilities) of £158 million, which last year produced profits of about S18 million But this does't reveal Its real power: the gross assets controlled directly by the group will be 81,500 million equal to those of the fourth largest British Industrial company.
Both companies are conglomerates with numerous subsidiaries: 208, mostly financial but some industrial like plastics, in the Slater Walk er group; and 165, nearly all financial in Hill Samuel. Many of these are in overseas countries including the EEC, Spain, Portugal, Switzerland, Greece, Malaysia, Brazil, Argentina, USA, Nigerla, Rhodesia, and South Africa (where Slater Walker has a number of subsidLaries including the sadistic-sounding Natal Tanning Extract Property Company) It presumably has nothing to do with tanning that in finalising the merger the two companies are engaged in what is known as 'undressing" -revealing to each other the real size of their assets and profits which financial corporations are normally allowed to conceal behind the fig leaf of a public balance sheet. After this naked embrace the group is said to have plans for further seductions — of a large insurance company (Eagle Star?), a major commercial bank (the Midland?) as well as large property companies.
It is a less refined procodure than undressing which prompted the Financiai Times recently to comment that in the City 'there never has been anything quite so big, so successful and so singular as the growth of Slater Walker Securit ies. Founded in 1964 with $25,000 by Peter Walker, now Minister of Trade and Industry, and Jim Slater, once Lord Stokes deputy at Leyland, the company's success has been large ly based on the notorious practice of 'assetstripping. This involves the purchase of ailing companies at bargain prices and their brutal rationalisation to restore profits, throwing mer out of work in the process Hil Samuel, though relatively more traditional has become the second largest merchant bank in the country only through a series of aggress.
Ive mergers. It is headed by Sir Kenneth Keith sometime assistant to the Director General of Political Intelligence in the Foreign Office former member of the National Economic Des elopment Council, and now a Director of BEA, The Times, Beechams and the Engle Star Insurance Co. Keith is known in the City as a tough banker' anxious to get his hands more directly on wider sources of finance.
The merger illustrates a lot about how the structure of British capital is changing in re sponse to the need to compete in Europe wit the unprecedented concentration of financia and Industrial power which has now been goin on for six years. Second, it illustrates the com ing together of financial and industrial capital which was also a feature of the 1930's. Both companies are kinds of banks, but neither is purely financial. Both have increasingly acquired industrial and commercial interests, and the joint group plans much closer involve ment with industry. Third, the merger is a re sponse of the need to compute in Europe with the vast investment banks of Germany and France.
It might have been more appropriate if the ne giant had taken as ite name not Hill Samuel b the name of a Slater Walker subsidiary - the Frankenstein Group Ltd. For undoubtedly merger equips the capitalist class with a powe ful and aggressive new monster.
Michael Price