Ian Macgregor, Lazards, Pearsons, and Amax

Ian Macgregor, Lazards, Pearsons, and Amax

PART 1

See also Part 2 in Lobster 6

Summary

This article attempts to show that the present chairman of the National Coal Board, Ian MacGregor, is far more than the “right man for the job” imported from the U.S. by a Government set simply on technical efficiency. Macgregor’s appointment in this country epitomises the direction in which the ruling class is pushing the economy. Not only does MacGregor have longstanding connections in the mining industry and within an important banking group, he is also strongly tied up in the armaments industry. While MacGregor is our starting point, the article will range beyond him as an individual and will indicate the circles within which he moves, circles which overlap with, and are integrated into, the British State.

Introduction

When Thatcher was first elected to office in 1979, unemployment was already rising fast and the Labour Party leadership (Callaghan and Healey in particular) had, in practical terms, already been converted to ‘monetarism’. (1) It was not long before Ian MacGregor was appointed to run British Steel.(2) The ‘rescue plan’ which he was responsible for implementing was resisted by the steel workers but they were unable to prevent the implementation of closures and layoffs. This is no place to analyse the reasons for this defeat, but I am convinced that the I.S.T.C. leader, Bill Sirs, played a central role in undermining the strike.(3)

It was not long before it was rumoured that Ian MacGregor was to be moved to take up the chairmanship of the National Coal Board (NCB). From the start the National Union of Mineworkers (NUM) opposed the appointment.

It seems highly unlikely that the people who took the decision to cut coal production, something which had long been sought by the ruling class (4), were ignorant of what, or rather whom, they were taking on. Heath’s experience in 1974 should have been enough. But things are more desperate now and those who took the decision set their minds on the rewards which victory would give them, for this victory would open the way to a more total onslaught on the entire working class and the trade unions – the road would, therefore, be opened for a more authoritarian order, an order more suited to the depressed economic climate of the present with worse to come in the future.(5)

MacGregor’s butchering of the steel industry was done against a background of world market contraction, a situation which has given rise to increasing antagonism between US and European steel producers. (6) Under MacGregor, Britain has led the way in Europe in making adjustments in its steel production in compliance with American demands. But while the state sector of the steel industry has been forced to contract, the private sector has also been cutting back. In April 1983 a “rationalisation” scheme for the high alloy sector of the steel castings industry (which is privately owned) was agreed to.(7) The scheme is being run by the merchant bank Lazards Brothers and Co., which is based in London. But there are also Lazards in Paris and New York. Ian MacGregor is a partner in the New York Lazards.

Lazards

Lazards in Britain has had links with the steel industry in the past. For example, Lord Kindersley, now a vice chairman of Lazards, was a director of the Steel Company of Wales from 1959 to 1967, and Sir Campbell Adamson, who joined Lazards in 1977, held management positions in Richard Thomas Baldwins Ltd and the Steel Company of Wales Ltd from 1947-1969. Interlocking directorships linked Lazards with Lloyds Bank in the past and Lloyds has close past links with the steel industry.(8)

Although the three Lazards groups have common origins, it is said that they have for a long time drifted apart. Recently, however, they have begun to move together and this has been confirmed by the news that a new holding company is being set up in Delaware called Lazards Partners, which will bind the ownership of the three more closely together.(9)

The David-Weill family seem to dominate the Paris firm – the holding company, Eurafrance, is at the centre of their web. Interlocking directorships link Lazard Freres et Cie in France to some of the largest European concerns, including the electrical engineering and electronics firm Thomson-Brandt (also an armaments producer), the automobile firms Peugot-Citroen and Fiat, and the aluminium and chemicals giant Pechiney. Through Christian Valesi the French Lazards is well connected with the French State and he is also the director of a steel company.(10)

The David-Weill family also appear to exert an influence on the New York and British Lazards, though it seems likely that Lazard Freres and Co. NY, is close to, or part of, the Rockefeller empire.(11) Interlocking directorships link the New York firm with the following: Amerada Hess, General Dynamics, Allis-Fiat, American Motors, Pechiney (see above), Owens-Illinois, Pfizer, Minerals and Resources, Schlumberger, Engelhard Minerals and Chemicals, and many others. However, the New York Lazards is a private concern and it is difficult to find out much about its activities. It seems clear though, that it is close to extractive industries.(12)

As already mentioned, the David-Weill family appear to have some influence in the London Lazards. However, the driving force here appears to be the Pearson family and their allies. The control over Lazards in Britain by the Pearson family (of which Lord Cowdray is the head) is carried out in a complicated way. Through the Cowdray Trust and the Dickinson Trust the family owns about 36% of S. Pearson and Son, a holding company. This, in turn, owns and controls an array of other companies amongst which is the Whitehall Trust, which owns 80% of Lazard Bros. and Co. Ltd. (The remaining 20% is owned by the French Lazards.)

Among the array of Pearson-owned companies are: Pearson Longman (Financial Times, 50% of The Economist, Penguin and Ladybird Books); Goldcrest Films; a string of provincial newspapers; Doulton and Co.; Fairey Engineering (engineering with longstanding armaments business) (14); Madame Tussauds, Chessington Zoo, the London Planetarium, Warwick Castle, the Wookey Hole Caves; various land and farming interests and mineral extraction companies.

But the spread of interests does not end here. Lazards Bros. is seen by many to be the true hub of the Pearson empire. Again, the connections established by this firm are too vast to enumerate here in any detail but some of the more obvious ones will be mentioned. Two big engineering firms which rely heavily on armaments for their survival, Vickers and Rolls Royce, were merged in 1980 when Ian Fraser, the chairman of Lazards, was deputy chairman of Vickers and chairman of Rolls Royce.(15) Lazards has or has had financial links and interlocking directorships with GEC – again, with much of its business in armaments (16) – Babcock International (17), Davy Corporation (18), BOC International (19), Wilkinson Match (20), Dalgety (21). All of these are among the largest British industrial firms. Interlocking directorships also link Lazards with Phoenix Assurance (22), Guardian Royal Exchange Assurance (23) and Sun Alliance and London Insurance (24).

This does not mean that Lazards is the sole link which these companies have with the banking sector, though in a number of cases Lazards is the most important connection. Thus, Lazards in Britain has particularly close links with the British engineering industry, with armaments and with publishing and the mass media.

But the influence of the Pearson-Lazard group extends beyond the realm of industry, finance and the media and into the state itself.

During the 1940s Lord Brand was managing director of Lazards and simultaneously heading the British Food Mission and the British Supply Council in America. He was also a representative of the British Treasury in America at the time. Adam Marris, employed at Lazards from 1929-1939, spent a short time in the Ministry of Economic Warfare in London, joined the British Embassy in Washington in 1949 as 1st Secretary, and later became Counsellor. After the war he returned to Lazards until the 1970s, and was also a director of Barclays Bank, Australia and New Zealand Banking Group and Commercial Union Assurance.

Another board member, Lord Poole, was a Tory MP from 1945-1950 and chairman of the Conservative Party organisation from 1955-57. The 1st Viscount Blakenham married a daughter of the 2nd Viscount Cowdray and held several positions of state, as well as being chairman of the Conservative Party organisation from 1963-65. His son is now chairman of S. Pearson and Son.

Sir Campbell Adamson, as well as his former positions on State steel bodies and Director-General of the CBI from 1969-1976, was a deputy under-secretary at the Department of Economic Affairs from 1967-69; a member of the BBC advisory committee from.1964-67, and from then till 1975; on the Social Science Research Council from 1965-69; and on the National Economic Development Council from 1969-76.

A daughter of the 2nd Viscount Cowdray married the 9th Duke of Atholl (Duke is as high as you can go in the aristocratic hierarchy – there are only 26 of them). Their son, 10th Duke of Atholl, holds a number of directorships of Pearson companies including the Westminster Press and Pearson-Longman. Being a large Scottish landowner, he is a member of the Scottish Landowners Federation, and was convenor of that body from 1976-79. With this connection the Pearson-Lazard group joins the other ‘Royal’ merchant banking families – the Rothschilds, Barings et al.(25) Lord Cowdray has been described as the richest peer (26) and the largest donator of funds to the Tory party.(27)

It was noted soon after the Falklands War had ended that it had been a great boon to the armaments industry.(28) Amongst those which seem to have benefitted are Fairey and GEC, which, as we have seen, have links with the Pearson-Lazards group. It is also interesting that the former Foreign Secretary, Lord Carrington, who resigned at the start of the conflict, became chairman of GEC when he left the government, while John Nott (knighted for the bravery he displayed in running the war), became a director of Lazards when he left the Government. It should be mentioned here that GEC also has close links with the merchant bank Morgan Grenfell, which used to be directly controlled by the US Morgan group. The Pearsons have longstanding relations with the Morgans of America, going back to the time when the 1st Lord Cowdray, Weetman Pearson, made some millions out of the Mexican oil business in rivalry with the Rockefellers at the beginning of the century.(29). In 1957 Lord Kindersley (see above), then chairman of Lazards, stated that Morgans and Lazards were probably closer than any other two issuing houses.(30)

A more obscure link connects the Pearson-Lazard group into the orbit of Anglo-American politics. This is the so-called “Round Table Groups” which are said to have been set up on lines laid down by Cecil Rhodes in 1908-11. (31) Finance was contributed by the Morgan group and a group of international financiers based in London led by Lazards. At the head of the organisation, whose aim appears to have been to establish a world government centred on the two Anglo-Saxon heartlands, was Lord Milner, a powerful figure in Whitehall and the City of London.(32) Milner died in 1925. Later Robert (who became Lord) Brand, whom we have already met, took over. When he died in 1963, Adam Marris, whom we have also met, took charge.(33) It is not clear whether this organisation still operates or, if it does, how powerful it is. There are, however, plenty of traces of its former existence and plenty of indications that the Anglo-American collaboration which it strove for has had profound effects upon the British economy, polity and military.

E. H.

Part 2, MacGregor and Amax, MacGregor and Armaments will be in Lobster 6.

Notes to Part 1

1. See The Economics of Crisis and the Crisis of Economics, Gunder Frank in Critique No 9, 1978 .
2. MacGregor was appointed deputy chairman (part-time) in May-June 1980, before becoming chairman later in 1980. Sir Charles Villiers was chairman during the steel workers’ strike. Sir Charles was executive deputy chairman of Guinness Peat, a merchant bank, and a director of Banque Belge Ltd., Courtaulds and Sun Life Assurance.
3. Bill Sirs seems to have taken a consistently rightist position on nuclear weapons and was a signatory of a recent pro-Nato advertisement in which he reveals a connection with the Royal Institute for International Affairs, a body which has been linked with the Round Table Groups (which we meet later), and which is close to the Rockefeller-led Council on Foreign Relations in the US.
4. See Guardian 5th August 1983 – Power Industry Cuts Contract For Coal. In April 1975, Mary Goldring wrote in Investors’ Chronicle (18th April) that coal is the biggest offender by far and stated that “if British miners could average even half the output of the American – which would mean shutting the poorest mines – the £700 million annual wage bill would be halved.”
5. In a TV programme last Christmas on the future, John Eatwell, the economist, using sophisticated econometric models, showed Britain’s short-run future to be extremely gloomy, even on the most optimistic assumptions. See his book Whatever Happened To Britain? which was shown as a TV series in 1982. Also Bob Beckman, The Downwave (1982), for a pro-capitalist holocaustic view of the future. Note that neither of these authors introduces the problem of world war into the analysis.
6. This has been evident since at least 1982. The following articles from the Guardian show that it continues to be a serious problem: ‘US steel firm acts to cut import limits’ (18th November 1983); ‘Europe and US in steel clash’ (8th Feb.1984); ‘Transatlantic trade friction growing’ (27th Feb. 1984). The last article shows that the trade disputes are general and affect food, textiles and other goods.
7. Guardian 5th April 1983 ‘Lazard Bros steel cuts proposal is agreed’.
8. Who’s Who and Directory of Directors. Adamson was also director of Richard Thomas and Baldwins from 1959-’69 and held important positions on State steel bodies.
9. Guardian (19th May 1984) ‘Lazard Bros. together again’. Although it seems likely that the three groups co-operated throughout their existence, this greater pooling of finance suggests a closing of the ranks in the face of world economic collapse, a phenomenon we meet throughout this article.
10. Lazard Freres is “part of the French empire of the holding company Eurafrance, which controls insurance companies, property companies, television rentals, and other banks; but David-Weill now spends most of his time in New York, where the Lazard connection is even more wide-ranging.” Anthony Sampson The Money Lenders (1981) p240
11. See Charles Levinson’s Vodka-Cola (1978) “Meyer provided the link between the Rockefeller family and the French banks..Lazard Freres was the largest shareholder in the Banque de Paris et des Pays-Bas, which opened a branch in New York called Paris-bas Corporation. Directed by Robert Craft, vice-president of the Chase-Manhattan, it numbered Andre Meyer, David Rockefeller and John McCloy, former president of the World Bank, among its members.” Meyer was president of the New York Lazards and Chase-Manhattan is a Rockefeller vehicle. The magazine Lords of the Realm (now defunct) in the 2nd and final issue (1983) numbered Lazards in New York as one of the five major Rockefeller allies.
12. Details from Standard and Poor’s Register 1982
13. See Who Owns Whom and Extel
14. Fairey manufactures bridges and trackways. In 1934 the Union of Democratic Control published a booklet The Secret International which described Fairey as “the most important firm manufacturing military aeroplanes”, but the document named Vickers as the most important arms firm of the day. Fairey, as we shall see, is connected to the Lazards group, but Vickers is no longer the king pin. The defence industry must change with the times, and British Aerospace is now at the heart of Britain’s weapons programme. See War Lords – CIS Report on the UK Arms Industry (1982)
15. The 1979 report of Rolls Royce shows that Lazards’ chairman and Rolls chairman Ian Fraser, was the largest shareholder of Rolls’ shares of all the directors, by a long chalk. It should also be noted that the chairman and other directors of Vickers have wide-ranging interests and are not necessarily members of the Pearson-Lazards group. Their connections include Lloyds, RTZ, Toronto Dominion Bank, Hill Samuel and Shell. One of them, Sir Alistair Frame, also born in Scotland, chief executive and deputy chairman of RTZ, director of the electronics firm Plessey, Toronto Dominion Bank and Britoil, and a director of the UK Atomic Energy Authority from 1964-68 was actually tipped to become the next chairman of BSC after MacGregor (Guardian 18th February 1983), but the unknown Bob Haslam got the job instead. Compare Frame’s connections with those of MacGregor outlined in part 2 of this article.
16. The firms which combined to form GEC have strong Lazards connections. In 1931 Napiers was bought by Lazards and in 1937 Lord Brand of Lazards was a director of the company. In 1929 Lazards (then owned 50% by Pearson and 50% by David-Weill) gained 60% of English Electric’s shares and in 1942 took over Napiers. The Morgan group owned 46% of AEI’s shares and 34% of GEC’s in the 1920s and 30s but in 1935, 400,000 shares in GEC were sold by the Americans to a group headed by Lazards. AEI was merged with GEC in 1967 and English Electric joined the fold in 1968. Lord Kindersley of Lazards was a director of GEC from 1968-1970. See R. Jones and 0. Marriott Anatomy of a Merger (1970)
17. Lord Netherthorpe of Lazards is a director. Lazards arranged the finance for Babcock’s building of a power station in Zimbabwe in 1982. Babcock is deeply involved in building nuclear power stations in Britain and elsewhere.
18. lan Frazer, Lazards’ chairman, is a director of Davy. Lazards were lead managers in a $1 billion issue for the company in 1982. Davy is an engineering and contracting firm which builds plants for a variety of industrial processes. Both Davy and Babcock hint at the origins of the Pearson empire which was built by Weetman Pearson, the first Lord Cowdray, on the basis of large-scale contract engineering work throughout the world.
19. Ian Fraser is a director of BOC.
20. Kindersley (see above) is a director of Wilkinson, as is S. H. Wright of Lazards.
21. Lord Netherthorpe of Lazards is deputy chairman of Dalgety; Lt. Col. C.P. Dawney and J.A. Turner of Lazards are former directors. Dalgety is a conglomerate mainly involved in foodstuffs.
22. Dawney (see 21) is chairman, and E. W. Phillips of Lazards is a director of Phoenix, which owns 12.98% of Vickers preference stock at time of merger.
23. Kindersley is director and ex-chairman of Guardian Royal which owned 5.5% of preference stock and 5.12% of preference stock of Vickers at time of merger.
24. Kindersley is director of Sun Alliance. Sir Peter Matthews, chairman of Vickers is also a director of Sun Alliance.
25. Who’s Who and Carroll Quigley’s The Anglo-American Establishment (1981) p304
26. See D. Sutherland The Land Owners (1968)
27. Anthony Sampson Anatomy of Britain Today (1965)
28. Guardian (4th June 1982) “One important aerospace industry supplier, Fairey, admits that it has cleared the decks in some cases to meet urgent demands from the MOD.”
29. See Desmond Young, Member for Mexico (1966); R. O’Connor The Oil Barons (1972); P. Calvert The Mexican Revolution (1968)
30. See Sampson (note 27) p437. It seems to be commonly believed that the Morgan group which dominated American politics and economy from the end of the last century was pushed into second place by the Rockefellers in the 1930s and ’40s. According to the US Progressive Labor Party they did this by ‘placing their man Roosevelt in the White House and used government projects like the Tennessee Valley Authority to attack Morgan interests.’ From their pamphlet Who Rules Britain?
31. Carroll Quigley Tragedy and Hope(1966) pp950-951
32. ibid. Milner apparently refused to become a partner in Morgan Grenfell but did become a member of the London Joint Stock Bank, a precursor to the Midland Bank.
33. ibid. His father, Sir William, was apparently a founder member of the Round Table group.