Though the City is commonly referred to as “the one square mile’’ that is yet another case of British understatement: it actually is one square mile plus 37 acres.

By night it almost resembles the tiny walled village on the Thames that it was centuries ago. Its narrow streets and counting-house halls are-‘empty, and save for the 4,300 souls who actually live there, the only signs of life come from the unite scampering through the, stalls of the old Leadenhall market and the gent] MES A tae computers that line the marble walls of its. Spanking’néw Stock Exchange.

By day it all changes. Over London Bridge, from out of Liverpool Street Station and the “Bank’’ exit of the Waterloo and City line flows a steady stream of people nearly half a million strong — secretaries and clerks, junior executives in conservatively, modish, clothes and a uniformed phalanx of men, dressed in pin-stripé suits and _bowlers, -toting furled umbrellas and neatly folded copies of the Financial Times. And by 9, when the bells toll the hour in the towers of St Paul’s, the City of London has come alive with the international hustle-bustle of multi-million dollar dealing that is the spirit and the force of Great Britain’s dynamic one square mile of money.

Aloof from the rest of London, the invisible wall around the City’s hierarchy is most easily infiltrated by men from the right families and the right schools. “There are great advantages to the old boy net,’’ says Martin Gibbs of Phillips and Drew, market analysts and stockbrokers. “The speed of London business operations just could not be duplicated in New York or Frankfurt. Here you know the man you’re talking to, his family and his background. And you both know that when a deal’s made, there’s no backing out. The disadvantage is that it often protects the inefficient and makes it hard for the outsider, no matter how bright, to get in.’’

Partly as a result of the City’s snobbish exclusivity, a “new boy’’ net has sprung up among the graduates of Britain’s business colleges and provincial “Red Brick’’ universities. These bright young men may not have grown up with the rituals of Henley and Wimbledon and may still drop their H’s. But they have entered the City for the same reason as everyone else: to make money.

At the heart of the City’s merchant banking nexus are 17 members of the Accepting Houses Committee, the “corps d’elite’’ of merchant banking: This represents a financial power greater than some whole states and can determine the lives of millions. ,

The City, with its financial skills and connections through its merchant banks and other institutions, is rapidly extending its influence in the Common Market. Already in 1966 the Financial Times was saying: “It is seldom realised that incomes earned abroad by United Kingdom companies have now reached two-fifths of the profits earned at home.’’ British companies are busily engaged in investing in factories, real estate and offices in the Common Market and the City’s function as a centre for Eurobonds and Euro-dollars is rapidly extending.

It is nowadays a commonplace for Tories and right-wing Labour politicians to talk about the “problem’’ of sustaining the confidence of the City and investors. But as recent financial crises have shown the institutions of the City will switch their enormous reserves from sterling to dollars, from dollars to marks, from marks to francs as they judge the best interests of themselves and their rich clients. In the process they may threaten the jobs of millions, the economies of whole nations.