A British Banker in the Arab World: The Memoirs of Clive R. Morgan, O.B.E., F.C.I.B., F.R.S.A.

By Clive R. Morgan

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• Language: English
• Publisher: AuthorHouse
• Release date: Nov 28, 2011
• ISBN: 9781467096652

Clive R. Morgan

Clive Morgan, who was educated at Torquay Boys Grammar School, joined the HongKong and Shanghai Banking Corporation (HSBC) in 1960 at the age of 24, after a two year period of National Service in the Royal Artillery. He spent the next three decades as an International Executive with HSBC’s wholly owned subsidiary, the British Bank of the Middle East (BBME). During his career as a banker he has lived and worked and travelled in most of the countries of the Arab World, as well as in India and HongKong, and he has witnessed the vast economic and social changes which were taking place in the Middle East. It is difficult for most people who visit the Middle East today, and who see the cities of Saudi Arabia and the Arabian Gulf, with their modern infrastructures, air conditioned airports and multi-storied buildings, sophisticated financial markets and communication systems, to imagine what life was like in the region 50 years ago. What are now large modern population centres were then, before the development of the region’s vast oil resources, little more than small villages, dependent on fishing, date cultivation and trade across the Gulf to and from Iran and India. The old Arab World which existed in 1960 has disappeared forever, and the author counts himself fortunate to have witnessed, during the course of his career, the transformation of this part of the Middle East into the modern economic powerhouse that it is today. This book attempts to describe the ‘conditions on the ground ‘ during this period of transition and to illustrate some of the challenges which the practicing banker had to meet and overcome, often on a daily basis, during the course of a demanding career.

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© 2011 by Clive R. Morgan. All rights reserved.

No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means without the written permission of the author.

First published by AuthorHouse 11/02/2011

ISBN: 978-1-4670-9662-1 (sc)

ISBN: 978-1-4670-9663-8 (hc)

ISBN: 978-1-4670-9665-2 (ebk)

Library of Congress Control Number: 2011919474

Printed in the United States of America

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Contents

The Beginning

1960

Bombay (Mumbai), India

1960-1961

Alkhobar, Saudi Arabia

1961-1963

Aden

1963-1964

Kuwait

1964-1966

Sharjah, Trucial States

1966-1969

Jeddah, Saudi Arabia

1970-1971

The Middle East Centre for Arab Studies (M.E.C.A.S.) Shemlan, Lebanon

1971-1972.

Beirut, Lebanon

1972-1975

Dammam and Alkhobar,

The Eastern Province of

Saudi Arabia

1975-1981

Hong Kong

1981-1983

Amman, Jordan

1983-1986.

Riyadh, Saudi Arabia.

Hong Kong

1986-1989

For:

LAURA, COLIN and ANNE

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There is a tide in the affairs of men,

Which, taken at the flood, leads on to fortune;

William Shakespeare; Julius Caesar

The Beginning

1960

‘If you decide to join us Morgan, we will assign you to the Bombay branch within the next six weeks. Do you agree?’

It was May 1960, and these words were spoken by Harold Musker, the General Manager of the British Bank of the Middle East, (BBME), at the conclusion of what was obviously a successful employment interview, representing my opportunity to escape from my present somewhat humdrum existence and to embark on a new, exciting and rewarding overseas career in the Middle East.

Educated at the Torquay Boys Grammar School, on leaving school at the age of 18, I had been immediately conscripted into the Army for my two years period of National Service, which I served in the Royal Artillery. After basic training, I had the good fortune to be posted overseas for the remainder of my National Service; eight months in Germany with B.A.O.R., and fourteen months in Hongkong. This latter posting gave me a taste for life in the East, and it became my ambition to pursue a career overseas. Following my National Service, I had no precise ideas as to how to achieve this aim, and after some false starts I eventually decided to enter the banking industry.

Prior to my successful interview with BBME, my work in the world of banking had been as a clerk with Lloyds Bank in the City of London and now at the age of 24, I considered that the best chance of realising my ambition, was to join a British overseas bank. I had accordingly applied to a number of such institutions and eventually was invited by the Hong Kong & Shanghai Banking Corporation (HSBC) to an interview with BBME, their newly purchased and wholly owned subsidiary bank. At the appointed hour, I duly arrived at the Head Office of BBME at 99 King William Street in the City, with considerable trepidation, expecting to be interrogated on the more technical aspects of banking, of which at that time my knowledge was somewhat limited.

Fortunately however, when dressing that morning, I had selected from my limited selection of neckties the regimental tie of the Royal Artillery. As soon as Musker saw my tie, his face lit up in recognition, and he exclaimed warmly ‘You’re a Gunner!’. It transpired that he had been an Artillery officer in the First World War, with a distinguished war record. From that point on, the interview was conducted mainly as a discussion on the finer points of artillery and ballistics, comparing the merits of the 18 pounder field gun of the First World War, which Musker had fired, and the 25 pounder and 5.5 inch artillery pieces with which I was familiar, and about which I was able to talk reasonably knowledgeably. I am convinced to this day that my choice of tie that morning was a major factor in my success at the interview.

The background history of BBME itself, is an interesting one, and connects to Britain’s imperial progress in the Middle East during the second half of the 19th Century and throughout much of the 20th.

The Bank was established in 1889 by Baron Julius de Reuter, founder of the world famous News Agency which bears his name, Reuters. Baron de Reuter’s original name was Israel Baer Josephat; he was a German Jew, who changed his name when he converted to Christianity and who also adopted British nationality. (In view of BBME’s subsequent locations throughout the Islamic world, it is perhaps ironic that the Bank was founded by a person who was originally of the Jewish faith)

Baron de Reuter was an enterprising individual; a successful entrepreneur who succeeded in obtaining from the then Shah of Persia a wide—ranging concession which conceded rights to virtually all natural resources in Persia; minerals, agriculture, and water, as well as the railways. When news of the concession reached the attention of the government of Persia and the general public, it aroused strenuous and widespread opposition, not only within Persia itself, but also from Russia. Throughout much of the 19th Century, Czarist Russia had followed an expansionist foreign policy in Central Asia, with the main objective of countering British interests, and ultimately in threatening Britain’s hold on its empire in India; hence its interest in, and opposition to, the Reuter concession, as part of the ongoing ‘Great Game’ between the two imperial powers.

Opposition to the concession was so intense that the Shah was forced to cancel it; however Baron de Reuter succeeded in obtaining as compensation, a less controversial concession permitting him to establish a Bank in Persia, and also to issue the country’s currency.

Thus in 1889 the Bank was established with the name, ‘The Imperial Bank of Persia’, operating a network of branches over the following years, throughout Persia.

In 1935, when Persia adopted its modern name of Iran, the name of the bank was changed to ‘The Imperial Bank of Iran’

Political events in the late 40’s and early 50’s made business increasingly difficult for foreign enterprises, and the Bank therefore expanded its interests outside Iran by opening branches in the neighbouring Arab countries, initially in Kuwait, Bahrain and Saudi Arabia, becoming ‘The Bank of Iran and the Middle East’.

The wisdom of this policy was proved in 1952 when, during the premiership of President Mossadeq, the Bank was evicted from Iran.

In 1955, it was decided that a name more descriptive of the Bank’s operations was required, and the name was changed yet again, this time to ‘The British Bank of the Middle East’

This was the Bank which was purchased by HSBC in 1960, shortly before I was recruited.

To paraphrase a modern advertising slogan, the Bank did exactly what it said on the side of the tin. It was a British Bank which operated in the Middle East

Bombay (Mumbai), India

1960-1961

The date 17 June 1960 remains fixed in my memory as the day when I alighted from a Swissair flight from Heathrow Airport in London on my arrival at Bombay in India. I recall that my first three days in India were bright and sunny, albeit humid, and I congratulated myself on having escaped the cloudy skies and rain of England. On the fourth day however, the heavens opened with the arrival of the annual monsoon rains, which poured down virtually every day for the next three months.

The flight itself, being my first experience of air travel, was interesting. To reach Heathrow, I first had to travel from my ‘digs’ in Notting Hill to the West London Air Terminal in Cromwell Road, where I checked in and boarded a coach which took the passengers to Heathrow Airport.

The aircraft on which I flew from Heathrow was one of the first jet airliners, the French manufactured ‘Caravelle’. A distinguishing feature of the aircraft’s design was that passengers embarked by a ramp at the rear underneath the tailplane. About 4 places ahead of me in the queue was a young girl, probably about 12/14 years of age, who was obviously terrified by the idea of flying and did not to wish to embark. She was screaming hysterically and clinging desperately on to both sides of the narrow entrance door, until her hands were eventually prised loose by the cabin staff and her parents, and she was practically carried into the cabin. As a ‘first time air traveller’ I watched this scene with somewhat mixed feelings!

The jet Caravelle only flew as far as Zurich, where the passengers were transferred back into the ‘propeller age’, courtesy of a 4 engined Douglas DC6, and on which I travelled for the remainder of my journey to Bombay, with stops at Geneva, Cairo, Abadan and Karachi. Compared with the smooth flight of the Caravelle, which had its two jet engines at the rear of the aircraft and was subsequently very quiet, the DC6 lumbered through the sky, and there was a much higher noise level in the passenger cabin, plus vibration from the propeller engines. It spite of this, the flight was very comfortable, with spacious seats, plenty of legroom and excellent service from the cabin crew. One feature of the journey which I recall, was that at every airport en route, the local Swissair station manager with his staff, all in uniform, lined up on the tarmac level with the flight deck, stood to attention and saluted as the aircraft began to taxi to the runway. I have never seen this practice repeated at any airports in the world since.

The flight duly arrived at Santa Cruz airport, Bombay in late afternoon. I was met by my namesake, David ‘Dai’ Morgan, sub-manager of the Bombay office who drove me to the Bank’s Bachelors’ Mess, located in ‘Ridgeway’, a modern high rise apartment building on Malabar Hill, which was,(and I understand still is) an extremely upmarket residential area of the city. There I was introduced to my new colleagues, Royston (Roy) Tookey, and Eamon O’Brien. A few weeks after my arrival, we were joined by another bachelor officer, Alan Whyte. It should be explained here that a condition of the contracts of new overseas executives, such as myself and my colleagues, was that we were not permitted to marry during the first three years of service ( i.e. the first overseas contract).

The day after my arrival was a Sunday, and in the morning I was invited by Roy Tookey to accompany him on a familiarisation tour of Bombay in his Rolls Royce car. India at this time was a ‘graveyard’ for elderly Rolls Royce’s, mostly the former property of the Maharajahs, latterly rulers of the princely states, many of whom could no longer afford to live at their previous levels of luxury. Roy was an avid collector of such cars, trading one for another, usually, I suspect, at a loss. In any event, his current Rolls Royce was an enormous battleship grey open tourer, half as long again as a more conventional vehicle, and I had a very enjoyable and elevated introduction to the city. I reported for work the following day at the Bombay branch to begin my career in overseas banking and was assigned initially as ‘Treasury Officer’ in charge of ‘Cash, Treasury and Cables’ Department, the job traditionally reserved for the newly arrived junior officer. In this position, I was responsible for the supervision of the Branch’s Cash and Cash in the Treasury (i.e. the vault), plus the bank’s and the customers’ securities stored in the vault. I also had responsibility for the ciphering, and deciphering of all telegrams to and from the Branch, work which entailed the use of the BBME private code and also the codes of the various correspondent banks held at the branch.

Whilst the local staff of Bombay office included members of each of the major religious sects of India; Hindu, Moslem, Christian and Parsee, the staff in the Cash department who numbered about ten cashiers, with a Chief Cashier at their head, were all Parsees. In fact, it would have been impossible for management to put members of other sects into the department, such action could have led to serious staff problems.

The Parsees are very much a minority sect in India. They are the followers of Zoroaster (Zarathustra) who fled to India from Persia during the 10th century A.D. to escape Moslem persecution. Mainly concentrated in Bombay, they number approximately 100,000 but enjoy a reputation for business acumen and trustworthiness out of all proportion to the size of their community and are generally regarded as very shrewd businessmen. Their religion teaches them benevolence as a first principle, and few people practise it more liberally.

The funeral ceremonies of the Parsees are unique and worthy of note, particularly to a resident of Malabar Hill, as I was. When a Parsee dies, the body is taken to the Dakhma or ‘Tower of Silence’ located at the top of Malabar Hill. The Tower of Silence stands in a large garden, surrounded by a high wall, and with many tall trees. Living in these trees are flocks of vultures, whose function is to strip the flesh from the body of the deceased, which has been placed on a metal grill at the top of the Tower. When the vultures have completed their work, the bones, which have fallen through the grill, are collected by the priests for a final religious ceremony. Not unexpectedly, many reports, probably apocryphal, circulated among the residents of Malabar Hill, of vultures having been seen in trees in their gardens eating pieces of a recently deceased Parsee. Happily, I have never witnessed such a sight.

The Bombay branch provided a relatively easy introduction into the complexities of international banking. The Indian local staff were all well educated, mostly to degree level and efficient at their work. Although there was a powerful bank employees trade union, there were no manifestations of aggressive union actions during my time in Bombay.

The branch was opened in 1953, in the former premises of a Dutch bank, National Handelsbank, which had decided to terminate its business in India. Most of the business of the Dutch bank’s two Indian branches, in Bombay and Calcutta, was concentrated on the finance of trade between India and Indonesia. After Indonesia achieved its independence in 1949, National Handelsbank’s business was reduced substantially, thus making the continued existence of the bank’s Indian operations non-viable.

The rationale for BBME establishing a branch in Bombay was that the Arabian Gulf states, apart from Saudi Arabia, were all using the Indian Rupee as their currencies. The bank’s Gulf branches had accumulated substantial Indian Rupee balances during the course of their business in an area of increasing prosperity resulting from the development of oil resources, and it was considered that these balances could be utilised more profitably and effectively if the Bank had a presence in India. (Previously, the surplus Indian Rupees were deposited with BBME’s correspondent banks in India.)

BBME had no wish to open a branch in Calcutta; however the Dutch bank insisted that the deal should include both its Bombay and Calcutta branches, or neither. The deal was concluded for the magnificent sum of £1—for the transfer to BBME of the business of both branches, apparently because under Indian legislation the Dutch Bank would have incurred substantial staff redundancy and other costs if it had actually closed its business. Thus, although there was a logical reason for BBME to open a branch in Bombay, the Calcutta branch, on the other hand, was a historical accident which soon came to be regretted when the branch became, some years later, the scene of one of BBME’s major bad debts, as a result of the branch management becoming involved in the financing of the jute trade, of which they had little previous experience. Consequently, the Calcutta branch was closed a few years after opening. (BBME was not the only bank to suffer large losses in Calcutta; another British Bank, the Eastern Bank, experienced very substantial losses on their loan book, principally resulting from fraud by some of their major customers, with their unfortunate branch manager committing suicide.)

In 1960, when I arrived on the scene, business was proceeding satisfactorily in Bombay. Although the branch faced stiff competition from local banks in deposit gathering, it had developed a substantial business financing trade between India and the Gulf. Shortly after my arrival I became directly involved in a minor role in the repatriation of Indian Rupee bank notes from the Gulf states