Catto, Thomas Sivewright, first Baron Catto 1879-1959, governor of the Bank of England, was the fifth son and seventh child of William Catto, shipwright, of Peterhead, and his wife, Isabella, daughter of William Yule, sea captain. He was born 15 March 1879 at Newcastle upon Tyne, whither his father had moved with his young family in search of more steady employment; but within a year his father died, and the family returned to Peterhead. Catto went to Peterhead Academy, but after a move back to Newcastle he won a scholarship to Heaton School (Rutherford College), and at the age of fifteen entered the office of the Gordon Steam Shipping Co. In the evenings he taught himself shorthand; and when the office acquired a typewriter, he learned to pick the lock on it and practised when others had gone home.
Although by 1898 his wages had risen from 4s. to 10s. a week, Catto sought wider opportunities; through a newspaper advertisement he obtained the post of secretary to W. H. Stuart, managing partner of F. A. Mattievich & Co. of Batoum, at a salary of £8 a month. He sailed from Cardiff, barely nineteen, with a small trunk, a bicycle, £3 in cash, and the full support of his mother, to whom he owed so much. For six years he worked in Batoum and Baku, learned to speak Russian, and on his twenty-first birthday was made office manager. While working for Stuart he met Vivian Hugh Smith, the banker, who later became Lord Bicester [qv.], a connection of the utmost importance in later years.
Among other friends made in Baku was David Forbes, junior, a Scottish merchant, whose business was soon to be absorbed in MacAndrews & Forbes, Russian and Near-Eastern merchants with headquarters in the United States. In 1904 Catto was offered the management of their new European selling agency and, with Stuart's goodwill, found himself at the age of twenty-four organizing an office in London. He became a member of the Baltic Exchange and learnt London ways of merchanting and the chartering of ships; but after two years he returned to the Near East as second-in-command to Forbes in Smyrna, a post entailing much travel in the Near and Middle East. In 1909 he was transferred to the New York office, becoming a vice-president. America was to be his home for the next eleven years.
When war broke out in August 1914, Catto happened to be in England. His lack of inches prevented military service, and on the introduction of Vivian Smith he was soon employed in the organization of transporting supplies to Russia. From 1915 to 1917 he was British Admiralty representative on the Russian commission to the United States. When Russia collapsed he transferred to the British food mission in the United States, and in 1918 he became chairman of the allied provisions commission and head of the British Ministry of Food in the U.S.A. and Canada. In 1918 he was appointed C.B.E.; in 1919 a commander of the Order of Leopold of Belgium; and in 1921 a baronet for public services particularly in connection with the transport of food and munitions from the United States to Great Britain and allied countries.
Catto never returned, as he had intended, to MacAndrews & Forbes. In 1917 Vivian Smith's firm, Morgan, Grenfell & Co., had acquired a predominating share in Andrew Yule & Co., of Calcutta, and its associated business, George Yule & Co., of London, the great Indian commercial empire built by Sir David Yule whom Catto was invited to succeed. He had married in 1910 and with a young family he had no mind to take up residence in India; but what decided him was that his mother's name was Yule, although no relationship was ever established. The position of head of Andrew Yule & Co. which he assumed in 1919 gave Catto abundant opportunities for playing an active part in financial and economic affairs in India, although he did not seek formal appointments such as the presidency of the Bengal Chamber of Commerce. He served as a member of the Indian Government (Inchcape) retrenchment committee in 1922-3, and of the United Kingdom committee on coal-selling in 1926. In 1928 he became a partner in Morgan, Grenfell & Co. and retired from India, although retaining a keen interest in its problems. He remained chairman of Andrew Yule & Co. and of the London business, which became Yule, Catto & Co., until 1940.
Established in London, Catto became a director of the Royal Exchange Assurance Corporation, the Mercantile Bank of India, and other companies; one of his important tasks was to act with Sir Ernest Harvey in reordering the affairs of the Royal Mail and Elder Dempster shipping companies, an unpaid post to which he was drafted by Montagu (later Lord) Norman [qv.], the governor of the Bank of England. In 1936 he was created a baron, taking his territorial title from Cairncatto, a farm which he had purchased in Buchan whence his forebears had come.
In April 1940 Catto was elected a director of the Bank of England, but a fortnight later succeeded Lord Woolton as director-general of equipment and stores at the Ministry of Supply. In the following July he moved to the newly created post of financial adviser to the Treasury, full-time and unpaid, and resigned his directorship of the Bank. The title had no precise significance. The expert team of civil servants at the Treasury was being augmented by a wealth of outside talent, economists and others, among whom the outstanding personality was J. M. (later Lord) Keynes [qv.]. In this galaxy Catto represented commercial and banking experience; he and Keynes, hitherto strangers, saw things from a very different standpoint, made great friends, and became the Catto and Doggo of the popular press.
By the close of 1943 it was evident that illness had ended Montagu Norman's long reign at the Bank of England; in April 1944 Catto was elected to succeed him and released from his position at the Treasury. Although he was singularly well equipped by his merchant banking knowledge and by his recent experience in Whitehall to occupy the middle position which the Bank holds between Government and City, this was a considerable burden to assume at the age of sixty-five. Moreover the job was not at all defined: his predecessor had been in office for twenty-four years, during which he had transformed the organization and outlook of the Bank; so that even in normal times to succeed him would have been difficult enough.
Catto relied on the team which he inherited and did not seek to make substantial changes. He occupied himself with the main questions likely to arise in the post-war period, notably in the field of industrial finance, where he was much concerned with the establishment of the Finance Corporation for Industry and the Industrial and Commercial Finance Corporation. But he had been in office little more than a year when a Labour Government was returned, pledged to an early nationalization of the Bank of England and ready to introduce new measures of control over the banking system as a whole; and it is with the working out of these ideas that his name, as governor, will be principally associated. He accepted that the Bank had already been converted de facto into a public institution, aligning its monetary policy with the general economic policy of the government of the day and no longer seeking to provide for its private stockholders more than a constant dividend. Accordingly there was nothing in the proposal for public ownership which need diminish the utility or standing of the Bank provided its independence in thought and work was fully safeguarded. Similarly, he did not oppose the provision of a new measure of control over the banking system, provided that it was general in character and operated on the initiative of the Bank.
He judged correctly the strength of his position if he did not come out in active opposition to the general policy. As a result the Bank was taken into public ownership with the minimum public controversy and the maximum retention of operational independence. Catto came under criticism at the time, but his judgement was later vindicated. He accepted appointment as the first governor under the new regime in March 1946, and served until February 1949 on the eve of his seventieth birthday. He received the honorary degree of Doctor of Law from Manchester in 1945 and was sworn of the Privy Council in 1947.
In retirement Catto served as chairman in 1950-52 of a committee to report on the practicability of determining the financial and economic relations between Scotland and the rest of the United Kingdom. Scottish matters indeed, and particularly those of the county of Aberdeen, were a lifelong concern. In addition to the farm of Cairncatto he bought the House of Schivas not far away; and after his return from India devoted much care to restoring its ancient fabric and filling it with beautiful things. No honour pleased him more than to become in August 1957 the first freeman of Peterhead.
In appearance Catto was very short of stature, with a fresh complexion and clear blue eyes. His open countenance and quiet manner perhaps tended to conceal his shrewdness and skill as a negotiator, so well displayed while he was governor of the Bank of England. He not only took his opportunities as they offered but prepared himself in advance for what might present itself. If there was occasion for controversy he avoided a head-on collision and used his nimble mind and good judgement of personality to carry his objective without sacrificing any point of importance. As the head of a large organization he imposed his will with courtesy and with a considerable feeling for the welfare of those under him.
By the course of his career Catto formed a unique bridge between the pre-1914 world in which British merchants were responsible for the commerce of strange parts of the world and the post-1945 world of international economic and financial problems of the utmost complexity. He was in the neighbourhood when the Baghdad railway was projected and when oil was discovered in Persia; he was still actively interested in economic development, although from a very different viewpoint, when the International Bank for Reconstruction and Development was getting under way. He was also a leading example of the Scottish boy of comparatively humble origin who rose to the top rank in the City of London through a combination of innate qualities and of grasping opportunities whenever they offered.
Catto married in 1910, at Smyrna, Gladys Forbes, daughter of Stephen Gordon, a partner in MacAndrews & Forbes there and a native of Elgin in Morayshire. They had one son, Stephen Gordon (born 1923), a partner in Morgan, Grenfell & Co., who succeeded to the title; and three daughters, the eldest of whom, Isabel, was elected in 1955 president of the World Y.W.C.A. Catto died at his house in Holmbury St. Mary, Surrey, 23 August 1959.
A portrait by David Alison, painted during Catto's governorship, is at the Bank of England; another, painted in 1952 by (Sir) James Gunn, is with Morgan, Grenfell & Co. Portraits by each of these artists and also by Arthur Pan are in the possession of the family.
Contributor: H. C. B. Mynors.