New Business

What could be said to constitute the ‘traditional’ business of the discount houses would depend to a large extent upon the particular stage of the houses’ development at which the enquiry was directed. The bill brokers and later the discount houses first came into being in order to perform the ‘equalising function’ of the transfer of credit between areas of surplus and deficit funds. At the end of the nineteenth century it was the international ‘bill on London’ which had come to characterise the business of the discount houses. After the First World War the ‘traditional’ commercial bill business declined in favour of large-scale dealings in Treasury bills and later in short-term bonds. By the end of the 1950s Treasury bills and short-term bonds had become the staple diet with commercial bills making up only 10 per cent of the whole portfolio. On the eve of the Competition and Credit Control reforms in 1971, although British government Treasury bills were again the biggest single item, such changes had taken place in the composition of the assets portfolio that the Treasury bills, bonds and commercial bills of the 1950s could well be looked back upon as the ‘traditional’ business.