Britain: Citadel of the Commonwealth

There was little in the look of the place last week to suggest that it had been through its most traumatic experience since World War II. Wedged between the Bloody Tower and Temple Bar, the one square mile of London known as the City is not only the financial center of Britain and the Commonwealth but a whole way of life— and that life has endured amid countless crises for more than 500 years. In the narrow streets with the wonderful names—Threadneedle, Cornhill, Cheapside, Poultry, Old Jewry—the rush-hour crowds of sober-suited, bowler-hatted men and chattering typists hurried on their way as usual, emerging from tube stations, buses and chauffeured limousines into the gloom of London's winter day. Brokers lunched rapidly on beer and sandwiches at the mahogany bars of fine old pubs, and the stockjobbers in their silk top hats strode through the streets like characters out of Galsworthy.

Nonetheless, the City had been shaken. It lives and feeds on sterling—and sterling had just had one of the closest squeaks in its history. Just how close it had been was summed up by a top City banker: "The pound was hardly 24 hours from devaluation." Everyone agreed that what had been put at grave risk was nothing less than the survival of London's City as a center of international finance. No wonder the hand that held the sherry glass trembled just a little.

The Old Lady. Devaluation, the most dreaded word in the City, was headed off by the $3 billion line of international credit that steadied the sagging pound. The danger was by no means over—Britain announced that its reserves had melted in November to a seven-year low of $2.3 billion—but at least the pound was growing stronger (see THE WORLD). Whether it continues to do so will depend in part upon the resilient men of London's City. Operating the world's most concentrated and versatile counting-house and the mightiest citadel of money east of Wall Street, they provide Britain with as much as $500 million a year in "invisible" earnings from overseas.

The City's brokers handle 80% of the world's gold marketing, 65% of its ship chartering and by far the largest amount of its international insurance coverage. To the City's major commodity markets, traders from all over the globe come to buy and sell grain, metals, tea, textiles, rubber, wool, peanuts, buttons and hides. Packed into the area of narrow, convoluted streets and lanes, some of which still cannot take wheeled traffic, are also most of Britain's investment brokers and the London Stock Exchange, which lists more issues (about 9,500) than any other exchange in the world.