Odd Lots - What Looking Inside a Bank Archive Can Tell Us About Modern Finance

Episode Date: August 21, 2017

Royal Bank of Scotland has been around, in one form or another, for hundreds of years. The company keeps artifacts from its lengthy history in an archive that features everything from a customer ledger kept during the Great Plague and Great Fire of London in the 1600s, to a notice sent to branches in 1914 to shut down ahead of the start of World War I.On this week's episode of the Odd Lots podcast, we speak with Ruth Reed, Head of Archives and Art at RBS, about what it's like to be the archivist for a bank. We find out about her favorite objects in the bank's archive and discuss what they can tell us about modern finance and markets.See omnystudio.com/listener for privacy information.

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Listen on Bloomberg Radio, stream the show live on the Bloomberg business app, or listen to the podcast. That's Bloomberg this weekend. Saturdays and Sundays starting at 7 a.m. Eastern. Make us part of your weekend routine on Bloomberg Television, radio. and wherever you get your podcasts. Hello and welcome to another edition of the Odd Lots podcast. I'm Tracy Alloway.

And I'm Joe Weisenthal. Joe, do you know the one thing that I love more than finance and markets? Um, uh, uh, I'm curious what you'll say. I'm just going to say if I'm just going to say no. Okay, that's the safe answer. All right. So I really like history. Ah.

One of the things that I like about this particular podcast, other than the fact that I get the chance to talk with you for 20 minutes every week, is the fact that we can go back in time and every once in a while kind of delve into the history of finance and markets. I love the history of finance and markets. I find, you know, it's kind of like with language, how etymology helps us understand certain aspects of the present better by seeing how these words evolve. I think there's a very clear analogy with the history of finance and economics. Seeing out some various institutions evolved can help us understand their structures better today. Yeah, I think that's absolutely right. So what if I told you that on today's podcast, we are going to have an almost perfect synthesis of history and finance and markets? I would tell you I am very excited for this conversation. Okay.

All right. So am I. So today, we are actually going to talk with a woman who is an archivist for the Royal Bank of Scotland. And I don't know about you, but I was kind of surprised to hear that RBS, as the bank is known, actually has an archive at all. I would not have guessed that at all. I mean, it sort of doesn't surprise me maybe that banks have libraries and that there's some history stored at them. But the idea of a historian or an archivist at the bank sort of whose job it is to, you know, collect the bank's history is not something I would have guessed existed. Yeah, and I have to say if you go on RBS's website and take a look at some of the items that they have in their archive, and we're going to talk about this later in the show.

But they have some really fascinating, fascinating things, you know, things like customer ledgers that were kept during the Great Plague or things. to create fire of London, old sort of filing systems that the bank used hundreds of years ago. And I have to say this is one of Britain's oldest banks. So it's going to be really, really interesting to hear from her. Well, I can't wait. So let's get started. All right. So our guest for today is Ruth Reed. She is the head of archives and art for the Royal Bank of Scotland. Ruth, thank you so much for joining us.

I'm very pleased to. Thank you. So maybe just to begin, could you describe for us exactly, what RBS's archive is, what it looks like, where it's kept, and what your role in terms of being an archivist actually is, because I can't imagine there are many people out there who have that job. Yes, so to start with physically what it looks like and where it is, we're in a pretty anonymous-looking warehouse on the western edges of Edinburgh. From outside, you never really guessed that it was a historical archive. And what we're keeping inside, is the historical records of the Royal Bank of Scotland group.

So that includes quite a lot of present-day banks. There's the Royal Bank of Scotland itself, but also Nat West, which is a major name. We've got some private banks, all sorts of different businesses, and actually more than 200 historic banks that have come together over the centuries to make up those present-day names. These are not operational records that the bank needs to keep to do business now. These are the very few records that we've decided to keep forever because they tell us who we've been and therefore who we are. My job in the archives could probably be summarized as capturing, protecting, and using the history of the bank and the historical records that umpin that.

So are these items in the archives things that the bank had held for a long time and then at some point said, oh, we should formalize this in an archives? or did the banks say we should have like sort of an archive of history or banking history and then go about finding the items that would make up that archive? There's a big change that happened probably in mid-late 20th century. So the things that have survived from the 18th, 19th century, yes, you're absolutely right. Those are things that pretty much either survived by accident or survived because it was so very obvious that they were important to the business. And it's really only in the past 40 to 50 years that companies have become more self-conscious about needing to choose the right things and keep the right things.

And that's become really important as we get into the present age because now that records are digital, things don't survive by accident, you have to be deliberate about it. So is it unusual for a bank to kind of keep its own historic archive in this manner? Like if we went over to Goldman Sachs or to Deutsche Bank or HSBC, would they have a similar thing in place? Or is this unique to RBS? No, I don't know about all of them. You would certainly find a very good and impressive archive at HSBC. And certainly all of the major British banks have got archives. And actually a lot of companies in general, supermarkets, drinks companies, all sorts of businesses do have archives.

In light of that, let's talk about some of the things that exist in the RBS archives and why they've been kept and what they tell us. So one of the things that you have is a ledger that was kept from the Great Fire of London in the 1600s. What is that? From the 1660s, what does it tell us? What does a bank ledger from about 400 years ago even tell us? That's a really nice document to have because that goes. all the way back to the very earliest history of a company called Child and Company, which still exists as one of our banks today and is said to be the oldest name in British banking that's still trading.

So it's really lovely to have some of those early customer records. And if we're looking at the Great Fire of London period, it's wonderful to see quite how business was managing in unbelievably difficult circumstances. is, you know, London had, in 1665, it had suffered from this plague, and then you get to 1666, and there's this terrible fire, which literally stopped just before getting to the business premises of this bank. And you see that business surviving and coping through all those difficulties. And, of course, what it's telling us is what was going on for all of the customers of that bank at that time. So I've spent an inordinate amount of time browsing the items that you have in your collection.

So rather than ask you about some of the ones that strike my interest the most, I wonder, do you have some favorites that you could maybe point us to? I have hundreds of favorites. And if you're all my favorites, I'll tell you something different every week. But I guess one that I love very much is we have some field service postcards that were written by one of our members of staff who was away on military service during the First World War. So these were written between 1916 and 1918. And at that time, because soldiers' letters were very heavily censored, they couldn't write anything they liked. So they'd have these postcards, and they could just tick a box that said,

I'm fine. And it was a way of letting people back home know that everything was all right, and they were, you know, safe. And we have several of these in the archives that were sent by a man called Samuel McKnight, who'd worked at the Royal Bank of Scotland's head office. And it's wonderful to have them, but what I love most about them is the story about how. they were found, they were found by one of my predecessors in the 1990s in the head office building,

wrapped up in a little piece of paper that said something like, these cards were placed here by John Smith's messenger in the hope that perhaps long after this dreadful war, the name of one may again be honoured, who was loved by all. And he did that just after the First World War. He obviously had these cards, and he wanted future generations to remember. and I, for me, that summarizes what's so great about archives because because of what he did, I remember Samuel McNight's name, and now because there's an archive here, you know his name as well. That is really cool that you have that stuff. You know, I mentioned in the intro that I thought that looking at the history of banking

and the sort of artifacts of historical banking might help us understand the present tense. And of course, I think probably a lot of people, when they think about a bank, they imagine maybe a vault or something like that where their money is and then they go to the bank and then their share of the money is taken out. But as many of us know, that's really not how banks work or banks work at all. And that essentially banks are mostly digital and most of our money exists on a spreadsheet. And so it just sells numbers in a cell. And so looking back at some of the documents on your website, and people should check it out at heritagearchives.RBS.com. A lot of that is basically the same story that the fundamental aspect of the bank is not the money that is kept there, but the written down records of what people are entitled to. I think that's right.

It's certainly the essence of what banking is that business of putting things that you value somewhere safe and keeping them safe and being able to trust. You know, there's an awful lot of trust, which is necessary for banking to run. So that's what I love about archives and business archives, is you see these footprints of people all through time using different technology. They used what they had available at the time, but they're doing the same thing. So in terms of the lessons that we can glean from those records, you know, things that show who owes which person what, what are some of the applications of the archive? And has the archive ever contributed to any interesting research or interesting historical conclusions to your knowledge?

Well, we're open to members of the public. So academic researchers come in very frequently to work on projects. And they are often about financial history, about the history of lending structures, for example, and how they have evolved over time. But also, there might be garden historians or furniture historians can come in and use the records to find that footprint of something there researching. It's quite nice about business records that those are quite solid, factual-based records compared to somebody's diary, which is always you've got to think about what that person's agenda was in a different way from when it's simple accounting records. But also ways that we use the archive are a lot more intangible.

So they might be something about building colleague engagement, helping our colleagues to see proud of our business, helping them to feel the importance of doing a good job for our customers, by having that weight of history and understanding how many generations there are behind us, who's been doing this job all this time. I wanted to pick up on that sort of heritage point, because I did notice that one of the items listed in the archive is a letter from someone who was employed at the bank in the early 1900s, or actually for most of the items listed in the archive, or actually for most of the century,

who was an Olympic runner, and he actually ran in the Olympics that were made famous by the Chariots of Fire movie. And it's interesting, if you read the letter from him, he's responding to congratulations from his employer at the bank

where they recognize his running achievement. But the Olympic aspect of it is almost... It's almost... What's the word? subordinate to the fact that he works at the bank. The fact that he works at the bank is something to be proud of. Do you think the role of banks and bankers in society has changed over the past 100 years or so, given the events of 2008 and things like that? Of course it changes the time. And of course, we're at a point at the moment where

banker's reputation isn't particularly high and there are very good reasons for that. and that's actually something that, again, I think the archive brings value because it hasn't always been easy to work for a bank in the last few years. You know, we see the things that people say about us, and we know that there's a lot of justification in it. And having that 300-year-long history or longer, which talks about good things bankers have done, it gives people a context that I hope and think, helps people get out of bed in the morning and come to work. can do a good job as a banker. Yeah, I'm looking at another thing that Tracy had discovered on the website. This letter from Florence Nightingale talking about a way for soldiers to send money home more effectively, you know, a classic example of financial institutions, the role that they play in society.

But what is, you know, we sort of take it for granted this idea that if I want to send money to Tracy, right now, you know, it would be a little bit of a pain, but I could probably do it without too much issues. But it's sort of mind-boggling to think how people would have sent money cross-borders 200 years ago. What are some of the interesting technologies that we discover when you look back at the archives about sort of solving these really difficult problems? You see it changing all the time, and you can see banks trying to use the new technologies that are merging and bring them in. One example I think of that's relatively recent is from the 1980s when our bank, Nat West, was wanting to bring in a telephone banking service for the first time.

So you could phone up and you could press buttons on your phone to choose whether you wanted a balance or to make a payment or all of those things. But this being the 1980s, certainly a lot of people in Britain still have the type of phone that you had to turn a dial on to get the numbers. I remember those. Of course, yeah. So they didn't work with this kind of button pressing technology. So the bank introduced this little thing that was like a small calculator that had the buttons on,

and you could hold it up to the mouthpiece of your phone, and then press those buttons, and it would make the right beats to go down the line to make the phone banking work. And I really like that insight into a moment where a good technology was nearly there, but not quite. So the bank had to find some intermediary method of making it work. I remember that technology only because my grandfather was a criminal defense lawyer, and he only had rotary phones. And when he would need to place calls to his clients who were in jail, he had to go through a tone operating system. And so he had one of those handheld devices that mimicked the tone of the one through zero keypad. So yeah, quite a breakthrough.

You must be one of the first people I've spoken to who hasn't thought about that in a long time. Well, I think Joe brings up a really good point. There has been so much technological advancement in the fields of banking and finance. You know, 100 years from now, assuming that RBS is still running an archive, what is it going to look like? Because, you know, it's easy to gather, well, it's not easy, but the idea of gathering old historical documents into one place. is a common one. How do you start to tell the story of digital finance? Well, for one thing, you can take in digital documents. Most of what we take in now is actually taken in electronically rather than as physical documents. So that is certainly no impediment. And actually the same

things that we want to document are still done. People still have to meet together and talk to each other and say, are we going to do this? How are we going to do it? And, and they have to prepare for it. So in practice, we're not keeping transactional records. We're not interested in the kind of it happening. We're interested in why and how and how they make it happen. And all of that stuff will happen the same. It might be that it's an electronic file rather than a paper file,

but that's not intellectually different from our point of view. You know, something that I'm interested in in terms of history of finance technology is tallie sticks. And you mentioned that there was the fire in London, or we talked about that in the 1600. But is it true, like in the 1800s that a big fire was caused in Parliament by the burning of a bunch of these sticks that were used hundreds of years earlier to keep track of credit? Am I making that up? I feel like I heard something about that one. No, you're absolutely right. The tally sticks were used for keeping track of debts when somebody borrowed money.

There would be a tally stick, and they would split it down the middle, and the borrower and the lender would get a half each. so that you could reunite them. It was a way that you could track debts in a world where lots of people weren't literate, apart from anything else. So there were thousands and thousands of these stored in the houses of Parliament in London, and I think they stopped using them

in the early 19th century, and somebody, I assume you could possibly say he was an archivist in that he was responsible for looking after them, decided to clear out some space by burning them, and the fire got out of control and did indeed burn down the House of Parliament. That's why the House of the Parliament we have now are a Victorian building, because that's the replacement.

A good lesson to all subsequent archivists not to just burn their stuff for space, for storage reasons. Ruth, I want to ask you one more question. When you go over the entirety of RBS's archive, is there one particular item that to you is kind of most important when it comes to the history? of the bank or the history of banking overall, something that kind of hints that may be an important transformation that took place in either the company or the industry? I think it would be really hard for me not to choose the founding charter of the Royal Bank of Scotland from 1727. So that's the company's birth certificate. That's where it all starts, as far as the Royal Bank of Scotland goes. And I think why I would really pick that out is not so much

for the document itself, but my experience is showing it to colleagues when they come to visit the archive. And I show them this document. And by far, the most common question they ask me is, can I touch it? Because they want to make that connection with the past. Are they allowed to touch it? They are allowed to touch it at the edge, as long as they don't touch the ink. Because I want those people to go away with a feeling of having touched the past and having been inspired by that. So I think if a document can do that job for them, then I'm really glad to see it still working 300 years after it was drawn up. That's very cool. I like the idea of people touching the document as a direct link to history.

Ruth Reed, the Archivist at the Royal Bank of Scotland. Really cool discussion. Your website is awesome. And hopefully one day me and Tracy can come visit and we could do a long thing and go through all of what you have. But really appreciate you joining us on the Odd Lodge podcast. Great. Thank you. Joe, I love that conversation.

And I have to confess, I'm still looking at the RBS archive website. And right now, I'm looking at a picture of a bank manager's hat from the 1950s. And all I can think is this is what George Banks would have worn in Mary Poppins. You remember that? I'm looking, I'm on the website, too. I'm looking at the, and this is another one that you found earlier, the spike file. Oh, yeah, that one's great. Like this gigantic iron spike that they used to put papers over just essentially a glorified or a sort of a primitive filing cabinet.

But, no, I really like that conversation as well. And I do think everyone should check out their website, heritagearchives. rbs.com because it's a great example of how banking is wildly different and also exactly the same. That essentially, you know, as we were saying, a bank is a spreadsheet or mostly something digital and a bank used to be pieces of paper on an old iron spike. But though it really matters to the bank is not necessarily what they have in a vault or anything, but what they, the history that they have recorded. Yeah, I agree with that. I just. just wonder though, you know, as things become more electronic and as they become more digital,

and we did just discuss this with Ruth, but I wonder if some of that, that tangibility kind of gets lost and if finance becomes more and more abstract and kind of more unwieldy as a result. And I also wonder, like, because I like history and I like antiques, I think there's something about human nature where we actually want to go out. And as Ruth was saying about the original bank charter, you kind of want to go out and connect with the past. And the easiest way of doing that is seeing or touching or interacting with something that's actually old. And I just wonder if, you know, seeing a digital ledger is going to have that same effect. No, that's a really good point. So it's like, even though we know that money is kind of this imaginary thing, there is still some value in a thing,

even if it's just a book or a piece of paper or a filing cabinet that we can see. And so it's really going to be like this weird thing when that really just doesn't exist in any form at all. And it's purely like, yep, this thing on the web or this thing on a spreadsheet is really all there is. And it's not a representation of anything. Joe, I can see you're about to turn this into another What is Money podcast. I can feel it coming. Yeah, well, of course. We'll have to, let's revisit this one in 10 years, and we can ask Ruth what she's saved from the year 2017.

Oh, that's a good idea. All right. All right. I'm marking my calendar. Sarah, our producer, I'm reminding her right now to schedule that one for 2027. But in the meantime, this has been another episode of the Odd Lots podcast. I'm Joe Wisenthal. You can follow me on Twitter at the stalwart.

And I'm Tracy Alloway. I'm on Twitter at Tracy Aller. away. And you can follow Sarah on Twitter at Sarah Pat with two T's. Thanks for listening.