Royal Legacy: How the royal family have made, spent and passed on their wealth

by McClure, David

  The only mystery surrounding his estate was the fate of his secret "love child". Shortly before he died in 1979, Dickie - now Lord Mountbatten of Burma having achieved his ambition of becoming First Lord of the Admiralty - decided to come clean about his father's affair with Lillie Langtry. There had long been whispers in high society about a possible illegitimate daughter. In his diary Sir Henry "Chips" Channon tells the story of how the socialite Lady Asquith mischievously broke the news to the twenty-year-old Jeanne Marie who her real father was. In the entry for 15 April 1941 he records a visit to the Gate Theatre to see "The Jersey Lily” by Basil Bartlett: "a pleasant trivial little play, interesting because it actually portrays King Edward VII on the stage; the theme is the love affair between Prince Louis of Battenberg and Mrs Langtry (the offspring of this romance is Lady - - who was only told who her father was, when she was 20, by the then Mrs Asquith").5

  In October 1978 Mountbatten resolved to fill in the blanks with a full disclosure. Speaking appropriately enough in Jersey at a star-studded charity gala which featured Morecambe and Wise, Rolf Harris and Larry Grayson, he acknowledged for the first time in public his father's affair and illegitimate child. She was, he explained, the result of a coup de foudre between two highly attractive individuals: "[Lillie] had charisma as well as beauty…My father was not a bad looking chap. The romance was pretty serious - it must have been since they had a baby daughter - Jeanette [sic]."6

  In front of more than three hundred guests (including Prince and Princess Michael of Kent), he made it clear that he felt no shame or embarrassment about the affair: "my father met her six years before his marriage. It was something to be hushed up then, but today we admit freely that these things go on". He went out of his way to deny that he was the main whistle blower: “My family never gave the secret away and nor did hers. But a wealthy man called Chips Channon did so in his diary."

  No one knows what prompted him to set the record straight there and then. It could have been the location - in that Jersey was Lillie's homeland - or perhaps it was to do with timing - he wanted to pre-empt some revelation that he thought imminent. At the time, a big budget ITV drama series "Lillie" with Francesca Anis in the title role had caught the public imagination - something he cleverly interweaved into his speech: "Are you watching the TV series about Lillie?…How they will portray my father's romance in the series I do not know." Laced with his usual charm and wit, his indiscreet speech managed to upstage many of the professional entertainers at the gala winning, according to one press report, the biggest applause of the evening.7

  This very public announcement motivated Jeanne Marie's daughter, the well known BBC television announcer Mary Malcolm, to write Mountbatten a letter of thanks. In November 1978, he replied with an invitation to stay at his Hampshire estate of Broadlands since, in his view, it was high time that the matter came into the open.8 By all accounts, the weekend went well and after Mary was asked to plant a tree in the grounds, she wrote again hoping it might be the start of a fruitful relationship. But within six months Mountbatten was dead - blown up by the IRA while on a boating trip in Ireland.

  In the final months of his life, there was one last twist to the tale. A distant relative of Mrs Langtry discovered in a Jersey attic a cache of intimate letters between Lillie and the man who accompanied her to Paris, Arthur Jones, indicating that they were lovers. Later when the full correspondence was combed through by Lillie’s biographer, Laura Beatty, and discussion of a possible abortion was discovered, it was suggested that Jones may even have been the father of the child. Lillie certainly gave him the impression that he was the father but of course she did the same to Prince Louis. It is perfectly plausible that the wily Lillie who in addition to two husbands had a legion of lovers and sugar daddies could have duped the credulous Jones into thinking he was the father so that he would support her during the loneliness of giving birth to an illegitimate child in a foreign land. In the absence of any DNA material, it is impossible to establish the matter conclusively one way or the other. But the balance of evidence suggests that Arthur may well have been the true father and if so, it is also possible that Lord Louis was told about this and so had nothing to fear from making his will available to public scrutiny.

  4.THE PRINCES AT WAR - 1936 -1945

  "The profession to which I was born has been losing ground for centuries. I have better cause than most to make provision for a rainy day. For me, as for Noah, it would mean a deluge"

  The Duke of Windsor

  The death of King George V at Sandringham at 11.55 pm on 20 January 1936 appeared a master class in succession planning. It was handled with the same meticulous timing and forethought that went into ensuring that all the clocks on the estate were set exactly thirty minutes ahead of Greenwich Mean Time. Earlier in the day his physician Lord Dawson gave advance warning of the death by arranging for the BBC to broadcast in its evening bulletin the message that "the King's life is moving peacefully to its close." The king lingered longer than expected and later that evening Dawson resolved to hasten the inevitable by injecting 0.75 grams of morphia and 1 gram of cocaine into his jugular vein. Much later still he explained that the timing of the death was designed to coincide with the print deadline of certain newspapers so that the announcement could be made in the respectable morning titles as opposed to the down-market evening ones. He even rang his wife to ask her to inform The Times, regarded at the time as the voice of the nation, that they should hold back the next edition as a final bulletin on the king’s deteriorating health was imminent.

  The Duchess of York, the future Queen Mother, was unable to attend the deathbed vigil as she was herself in bed having succumbed to a bout of influenza that turned into pneumonia, but the Prince of Wales, the future Edward VIII, was there along with the Duke of York, Queen Mary, the Princess Royal and the Duke and Duchess of Kent (the Duke of Gloucester was ill). Edward’s overt display of grief surprised many onlookers. According to the king’s private secretary, Lord Wigram, the Prince of Wales became “hysterical” and began crying out, while in the view of Helen Hardinge - a lady in waiting and wife of the future Edward VIII's private secretary - his "frantic and unreasonable" reaction went well beyond that of his three brothers, even though they had loved the king as much as he had.1

  The reason why the succession process did not go like clockwork is that, for the Prince of Wales at least, the king had died several months too early. By all accounts, the premature death had upset his plans to renounce the throne. Alan Lascelles, George V's assistant private secretary and a former private secretary to the Prince of Wales, believed that he planned to forsake the crown for a new life with Mrs. Wallis Simpson. He was now so besotted with the American divorcée whom he had first met in 1931 at the home of his then mistress, Lady Thelma Furness, that he was determined to marry her regardless of the constitutional improprieties. Lord Hardinge is also of the opinion that had George V lived for another six months, the Prince of Wales would have opted out of the line of succession. Much later in 1994-5 the Queen Mother revealed in a private taped conversation to Eric Anderson, the former Eton headmaster, that George V had even expressed serious doubts to her and her husband that the Prince of Wales would ever be king.2

  On the evening of January 24 the new king was in for another shock at Sandringham when his father's will was read out by the royal solicitor, Sir Bernard Halsey-Bircham. Also present were Queen Mary and Lord Wigram who left a detailed account of the scene in a personal memorandum. He records that King Edward became agitated when he learned that his father had left him a life interest in Sandringham and Balmoral but no money. His four siblings - the Dukes of York, Kent, Gloucester and the Princess Royal - each got a lump sum of three quarters of a million pounds. His response to the news was an anguished cry enquiring about his rightful share of the pot. Apparently, he was the last to know.

  Wigram and the solicitor tried to explain that the old king felt that during his twenty-five years as Prince of Wales he ought to h
ave built up a nest egg out of the revenue from the Duchy of Cornwell and as such there was little necessity to provide for him. For the same reason, Edward VII had never left his eldest son any money.

  When the new king protested that it was unfair that he had got nothing while his siblings had got large sums, Wigram tried to persuade him that he would not endure any financial hardship since he could save money from the Civil List and the Privy Purse as his father had done.3 In passing it should be noted that this was the first official confirmation of what had long been suspected – that, monarchs made a profit on the Civil List. In theory, this may have amounted to if not an abuse then certainly a bending of the rules concerning the use of public funds since certain designated classes of the Civil List payments were supposed to cover the wages, salaries and expenses incurred by members of the royal family in the performance of their official duties and were not to be used for capital accumulation. But in practice the Treasury turned a blind eye to any surplus being transferred to the monarch’s privy (i.e. private) purse as it could be justified as simply a way of putting money aside for their grandchildren. Using select committee statistics, one royal chronicler later calculated that during his twenty-five year reign George V made a total saving of £487,000. The value was further enhanced by the fact that since 1910 Civil List payments to the monarch were tax-free.4

  Wigram's invitation to raid the public purse did little to assuage the new king's worries. He stormed out of the room and strode down the corridor - according to the old king's private secretary, Alan Lascelles - with a face like thunder. He then shut himself in his room and telephoned Mrs. Simpson with the bad news.5

  Lascelles who knew Edward's true nature better than most having been his assistant private secretary for almost all of the 1920s believed that the reading of the will may have been a key moment in the abdication crisis. Up until that time the king's intention - in Lascelles's view - was to give up the throne almost immediately. He would inherit from his father the fortune he had promised Mrs. Simpson and he could take her away (perhaps to his ranch in Canada) where he could afford to keep her in the manner to which she was accustomed. The king in fact told Lascelles in the summer of 1936 that he did not want to be king, while Owen Morshead, another courtier, recorded a remark from George VI to the effect that Edward never wanted to take the job on but the sudden death of his father upset his plans to renounce the throne while he was still Prince of Wales.6 But having been disinherited by his father Edward was now determined under the urging of Wallis to stick it out and amass as much money as he could from the situation. This meant not just realising every asset but also cutting costs.7

  One of the earliest targets for the chop was the Sandringham estate - which he regarded as a “voracious white elephant” that ate up £50,000 a year in running costs. As a mark of the changing of the guard, his first act as king was to turn all the clocks back thirty minutes so that they ran to normal time. He decided to cut the raising of game on the estate and ordered the Duke of York to produce a blueprint to reduce costs further. He recommended that one hundred of the four hundred employees be made redundant. Through a combination of redundancies and pay cuts, the wages bill in 1936 was reduced by £6,150.8 The cost of food at Sandringham and the other royal residences was cut from £45,000 a year to £13,500. Edward also arranged for the sale of Anmer and Flitcham, two farms adjoining the estate.

  The new king kept his younger brother in the dark about his long term plans to sell the family home. Although separated by little more than a year in age, the two siblings could not have been more different in character. The dashing “David" was the epitome of urbanity: charming, fashionably dressed and obsessed with money; while the plodding "Bertie" with his love of the outdoors had more modest tastes, being content with a quiet family life having married his soul mate Elizabeth Bowes Lyon. In private David and Wallis referred to her as "Cookie" on account of her ample figure. The mutual dislike of the “Queen Wallis" and the Duchess helped drive a wedge between the two brothers. This social divide would become, as the abdication crisis deepened, a financial chasm.

  Balmoral did not escape the king's axe either. There the wage bill was cut by £1,330 and the remaining staff worked under the looming threat of further redundancies.9 The Duchess of York noticed a much less warm atmosphere at Balmoral than prevailed under George and Mary.10 During a visit in October 1936, legend has it that when Mrs. Simpson tried to act as hostess at one dinner, the duchess snubbed her saying that she had come to dine with the king and left early after the meal.

  The reverse side of Edward VIII’s ferocious economy drive was his unrestrained expenditure on Mrs. Simpson - or as one hostile conservative MP put it, "lavishing” jewellery on his mistress, while at the same time “getting rid of his father's servants."11 When she turned down the free use of the Duke of Westminster's yacht for a Mediterranean cruise, the king was obliged to charter Lady Yule's more luxurious 250-foot Nahlin for five weeks. It came complete with a swimming pool, gymnasium and dance floor.

  In the previous two years he had showered her with a fortune of jewellery, on several occasions withdrawing more than £10,000 from the Duchy of Cornwall accounts for the purchases. When Mrs. Simpson began to appear in society wearing familiar-looking rubies and emeralds, tongues soon wagged. Had Edward given her the royal jewellery he had inherited from Queen Alexandra? Much later - on December 3, 1936 at the height of the abdication crisis - her old friend and travelling companion Lord Brownlow recorded in his diary that she left London for the seclusion of the south of France with £100,000 worth of jewellery in her luggage. It was the talk of the town that the collection included Queen Alexandra's jewels.

  The Duchess of York, the future Queen and Queen Mother, was conveniently absent from the main drama in the abdication crisis. Throughout the first fortnight of December she was confined to bed at her London residence of 145 Piccadilly with one of her “traditional chills”, since at times of family crisis - whether Princess Margaret's separation from Peter Townsend or Prince Charles's divorce - she had a tendency to play ostrich.

  On the day Edward VIII signed the Instrument of Abdication, he also tried to change his father's will. Much of December 10 was taken up with heated negotiations about the financial settlement. The two bones of contention were: how the private residences of Balmoral and Sandringham were to be transferred from Edward VIII to George VI and how the former king was to be provided for after the abdication.

  The talks took place at Edward VIII's other residence, Fort Belvedere, the 18th century mock castle on the fringes of Windsor Great Park where at the swimming pool away from prying eyes he liked to entertain Mrs. Simpson and his circle of friends. It was his sanctuary and in the interwar period he spent thousands of pounds refurbishing the residence. Present on that chilly winter day in the octagonal drawing room along with Edward were two legal advisors, his solicitor George Allen and his legal éminence grise Walter Monckton, and two financial advisors, Ulick Alexander, the Keeper of the Privy Purse, and Sir Edward Peacock, a former chairman of the Bank of England and receiver general of the Duchy of Cornwall who took on the role of the king's personal consultant on finance. The Duke of York, the future king, was there for much of the day and helped by his solicitor Sir Bernard Halsey Bircham and Sir Clive Wigram, the former private secretary to George V who had been called out of retirement to advise the future king. The other presence in the room was Mrs. Simpson who although one thousand miles away in a villa in the south of France was able to voice her strong opinions to her future husband down a crackly telephone line. According to Peacock, the king’s obduracy derived from her repeated urging on the phone that he should “fight for his rights” and that he would prevail due to his popularity as king.12

  The December 10 meeting which in many respects echoed the reading of George V's will almost a year earlier began with an impassioned plea from Edward stating how badly off he would be and requesting that his father's will be changed so that he might fully be
nefit from it. He later insisted that the new king buy his life interest in Balmoral and Sandringham. In addition, according to Wigram, he clearly told his brother that he did not think he had £5,000 a year claiming only to have £90,000 as his total fortune.13 Wigram himself felt compelled to interrupt, angrily reminding Edward that he should respect his father’s testamentary wishes. He went on to point out that when the will was drawn up, there was no way abdication could have been contemplated or even provided for. Repeating what he had said the previous January he emphasised that the will had taken into account that Edward as Prince of Wales had been able to save money in a way that was not available to his brothers and sister.

  The new king later likened the occasion to a horrid lawyer interview. In a nod to family harmony, he generously offered not to change a thing in Fort Belvedere (apart from taking the American power mower from the garden) so that it could always be used as his brother's private residence.

  After much wrangling over the legal status of the private estates, it was left to Sir Edward Peacock to break the deadlock. Sensing that matters were getting overheated, he took the Duke of York and Sir Bernard aside for short private talks and tried to simplify some of the legal technicalities that were proving a sticking point. The final proposal he offered was that Edward would sell his life interest in Sandringham and Balmoral for an agreed sum in return for dropping any claim to the royal heirlooms. The agreed sale price would not be handed over as a lump sum but the new king would pay him £25,000 a year if parliament declined to grant the money. However, the king would not be liable to underwrite the agreement if the reason for parliament's refusal was due to his conduct from that date.14