In 1918 the Royal Air Force was created through the amalgamation of the army's Royal Flying Corps and the navy's Royal Naval Air Service. As preparations were made for this new venture, one of the details that had to be sorted out was how the new service's officers would be paid.
Officers of the Royal Flying Corps, by far the larger of the two founding bodies, were paid through the army agent Cox & Co, and the latter therefore assumed that it would perform the same role for the new RAF. Its smaller competitor Holt & Co - an RBS constituent - saw things differently. The RAF was, it reasoned, a wholly new service, and in November 1917 it applied to the Air Board for the privilege of managing at least a portion of its pay requirements.
Cox & Co was appalled. All the armed services - and the pay agents that supported them - had a shared respect for tradition. Poaching customers, as Cox's saw it, was not correct behaviour. For many weeks, terse letters flew between Cox's, Holt's and the Air Ministry. Finally, in February 1918, an agreement was reached. Cox & Co would handle pay for the flying officers and Holt & Co for the technical and administrative officers. The new arrangements started from 31 March 1918 and brought 4,000 new officers into Holt & Co’s pay agency.
Both agencies wrote to the officers they would now be paying, explaining the new arrangements. Cox & Co also wrote to the officers it was losing, discreetly mentioning that there was no need to move their bank accounts - they could ask Holt's to remit their pay to any bank, including Cox & Co. Both agents instructed staff not to tout for business, although it seems at least some ignored the instruction. A female clerk at Holt's reported that 'when her brother called at Cox’s recently and mentioned about transferring his account here, he was informed that he had better not transfer his account from them to us, as we were in an awful mess and he would not get any pay or attention if he brought his account here.' Holt's claimed its staff were above such conduct. One senior manager wrote 'I cannot imagine that any of our staff would tell an officer that he better transfer his account to us, as he would then get his pay quicker.' Nevertheless, the remark itself perhaps suggests that he could indeed imagine such a thing.
One of the officers Holt & Co took over was Major General Hugh Trenchard, Chief of Air Staff, who is often described as the Father of the Royal Air Force. Holt's would have been tremendously proud to count him among its customers, and must therefore have been disappointed in February 1918 to receive a letter from him, asking for his pay to be remitted to his account with Cox & Co. After 27 years as a Cox's customer, he explained, he wished to continue his long-standing banking relationship - 'I hope you will understand my reasons.'
There were some teething problems as information about officers and their pay was passed between the two agents. In many cases, officers serving in far-flung places couldn't be contacted in time to get firm instructions from them before the new arrangements began. Within a few months, however, the system had stabilised, and a new tradition had begun.