The Daring & the Elite

"The big fish don't often pass," explained Britain's Viscount Bearsted, "and you grab them when you can." Last week Lord Bearsted hooked a notably big one--to become his own successor as chairman of Hill, Samuel & Co., Ltd., the largest of London's merchant banks in terms of capital, securities underwriting and profits. His prize catch was Baron Sherfield, 62, the former Sir Roger Makins, ex-barrister, able economist, gentleman-farmer, career diplomat and onetime (1953-56) Ambassador to the U.S.

Half the Ark. Lord Sherfield has a reputation for smoothing out arguments, whether between nations, companies, or factions within companies. That talent is exactly what Hill, Samuel seems to need. Despite its size and profitability, the company has been split by internal dissension. The trouble began almost as soon as Hill, Samuel was formed 16 months ago by the merger of two distinguished but disparate banking firms: blueblood M. Samuel & Co., and new-blood Philip Hill, Higginson, Erlangers.

The house of Samuel traced its wealth and station back to Viscount Bearsted's grandfather, the first Lord Bearsted, who founded the British half of Royal Dutch Shell. A conservative partnership, Samuel relied heavily on its money to make money, stuck to gilt-edged investments. Philip Hill, whose directors held their salaried jobs by right of talent alone, was brash, inventive and daring. With Philip Hill's top man, a rugged ex-lieutenant colonel of the Welsh Guards named Kenneth Alexander Keith, 49, as deputy chairman and chief executive of the com bine, the Hill team pushed ahead with deals that offended the traditional can ons of the Samuel group, and often did so without telling them. Managing a takeover of Selfridge's, the London department store, the Hill faction went so far as to raise its bid for shares with out consulting other underwriters.

"I regret to say that peace in any business is not news," said Keith last week, "and a bloody good row is." For a time in the row at Hill, Samuel, it even seemed possible that the hard-driving Keith might lose command. With Sherfield's appointment, Keith keeps his chief-executive title but loses some range. "He'll look after the outside of the ark," said Keith, "and I'll look after the inside." Bearsted, having found a neutral and popular successor, keeps a seat on the board.

Polish & Thrust. Though no stranger to finance, Sherfield will be the first nonbanker to preside over one of London's 16 elite merchant banks that, with Bank of England backing, "accept," or guarantee payment of, commercial debts. The lanky (6 ft. 4 1/2 in.) son of Boer War Hero Brigadier General Sir Ernest Makins, Sherfield since 1964 has been chairman of the Industrial & Commercial Finance Corp., a collective venture of English and Scottish banks that provides credit to small businessmen.

Despite its trouble, Hill, Samuel is busy with plans to become British banking's undisputed leader. For that, amid the country's current economic austerity, the firm will need all of Sherfield's polish as well as Keith's thrust.

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