by David Lough
While ‘not rich for a Duke’ (as Benjamin Disraeli drily observed to Queen Victoria),19 the 7th duke made a determined effort to match expenditure to income. Eventually, however, he had to resort to more asset sales. First to go, in 1862, were peripheral estates in Wiltshire and Shropshire; next, in 1870, more books; early in 1873 it was the turn of the gemstones collected by his great-grandfather, which fetched 35,000 guineas.20 By the time his younger son Lord Randolph announced his unexpected plans to marry an American, the duke was planning the sale of more land in Buckinghamshire, which Baron Ferdinand de Rothschild bought for £220,000. The Blenheim estate was reduced to 23,000 acres in Oxfordshire, well below the 30,000 acres that marked out Britain’s top 250 landowning families.21
American heiresses had become increasingly attractive to the straitened aristocracy,*2 but in this case neither the duke nor the duchess approved of their son’s match. After making early enquiries in London about the background of Jennie Jerome’s family, the duke was not encouraging: ‘From what you have told me & what I have heard,’ he wrote to Randolph, ‘this Mr J seems to be a sporting, and I should think, vulgar kind of man. It is evident he is of the class of speculators; he has been bankrupt once; and may be so again.’22 Leonard Jerome, by contrast, initially approved, telling his wife to agree an allowance of £2,000 a year for their daughter, but changed his tune abruptly on hearing that the duke had extended the investigation of his family to America, using the help of the British Embassy in Washington.
Undeterred, Lord Randolph returned to Cowes where he managed to secure the approval of the prince of Wales for his choice of bride. It was a signal for his parents to concede that the match should proceed if both parties wished it to do so after waiting for a full year. His father had always earmarked him for a career in politics and Lord Randolph managed to reduce the waiting time by half by agreeing to stand for what amounted to the family seat in Parliament at Woodstock, near Blenheim, when an unexpected election was called before the end of the year. His victory duly achieved, the duke and duchess agreed to visit Jennie in Paris, where her prowess in playing Beethoven sonatas on the piano and in discussing British politics led them to approve the start of formal negotiations between the two families for a marriage settlement, a form of legal agreement used in England at the time to set out each family’s financial contributions to a marriage and to determine their distribution among future generations.
The duke’s lawyers opened the bidding by suggesting that he would contribute an income of £1,000 a year, secured by a £20,000 charge against the Blenheim estate.23 Leonard Jerome’s team talked of contributing an income twice as high, $10,000 a year, backed by $200,000 of capital.24 His enthusiasm for the match had been rekindled, as he told his daughter: ‘Between you and I and the post – and your mother etc I am delighted more than I can tell. It is magnificent. The greatest match any American has made since the Duchess of Leeds.’25
When the duke’s advisers held out for a capital sum of $250,000 – to be secured on Leonard’s New York racetrack and remaining railroad shares, as well as his Manhattan mansion – the negotiations became more difficult. It was partly a matter of distance and partly of each family’s fanciful ideas of the other’s wealth. There was an added complication when Leonard made it clear that he expected to pay his allowance to his daughter and not to her husband. The Churchill solicitor warned Lord Randolph of the consequences: ‘Miss Jerome is made quite independent of you in a pecuniary sort of way, which in my experience is most unusual.’26
The impasse continued until a week before the wedding, when Leonard suggested a compromise under which half his contribution went to each side, but he told the duke that he thought ‘your English custom of making the wife so utterly dependent upon the husband most unwise’.27 The duke responded by agreeing to clear his son’s debts and promising to provide £10,000 towards the couple’s purchase of a London house.28
The settlement documents reached Paris for signing on the eve of the wedding at the chapel of the British Embassy on 15 April 1874. ‘I am quite decided that Jennie will have to manage the money,’ Lord Randolph told his father afterwards, ‘and I am quite sure that she will keep everything straight, for she is clever, and like all Americans, has a sacred, and I should almost say, insane horror of buying anything she cannot pay for.’29 It was a monumental misjudgement, a hint of which lay in the twenty-five gowns from leading Parisian couturiers that made up Jennie’s trousseau.
*1 A third, Camille, followed in 1855, but died in 1863; a fourth, Leonie, was born in 1859.
*2 By 1907 more than 500 ‘dollar princesses’ are said to have married titled Europeans, taking some $220 million with them to their adopted continent. This trend led to the launch of a quarterly magazine, Titled Americans: A List of American Ladies Who Have Married Foreigners of Rank, which was published in America.
2
‘How I long for you to be back with sacks of gold’
Spendthrift Parents, 1875-94
Exchange rate: $5 = £1
Inflation multiples: US x 25; UK x 100
BY THE END of their honeymoon (or earlier) the Churchills were expecting their first child. Before its arrival, they used the money given to them by the duke of Marlborough to buy a four-storey London home in Charles Street, near Berkeley Square, where they settled down to live off their joint income of more than £3,000 a year. This should have proved sufficient in mid-Victorian Britain, at a time when average earnings barely exceeded £50 a year, but difficulties soon emerged. Lord Randolph could not throw off the Churchill penchant for gambling, whether at cards, on the horses or in casinos around the coast of France.
Still less could his wife wean herself off Parisian couturiers when preparing her wardrobe for a summer season at London’s dinner parties and country house weekends. To make certain they could entertain in the style expected of an ambitious politician, the Churchills employed a butler, French cook, footman, valet, lady’s maid and a housemaid.
Once the season was over, Jennie withdrew to Blenheim where she gave birth to her first child unexpectedly early at the end of November 1874. He was christened Winston Leonard. Writing his father’s biography some thirty years later, Churchill described how his parents soon resumed their life in London ‘on a somewhat more generous scale than their income warranted’.1 The problem was compounded by the fact that Leonard Jerome’s allowance from New York sometimes arrived late or not at all. In 1876 they had to borrow £2,400 from Standard Insurance; early the following year, the Charles Street house was put on the market and Lady Randolph moved to Paris as an ‘economy’ measure, while her husband negotiated a further loan in London. ‘I shall get 5000£,’ he wrote to her. ‘There is also a balance of 682£ out of the valuation & house money. This latter I shall bring with me to Paris to pay your bills and keep us until March.’2
The next blow was social rather than financial. Lord Randolph had rashly backed his elder brother in a dispute with the prince of Wales over a married woman and in retaliation the prince refused to visit any London home that still welcomed the Churchills. Prudently, they removed themselves to New York, where they stayed with a demoralized Leonard Jerome. The situation appeared to be intractable, until the duke of Marlborough agreed to the prime minister’s suggestion that it would be best for all concerned if he became Queen Victoria’s viceroy in Ireland and took Lord Randolph to Dublin as his private secretary. Officially Lord Randolph remained unpaid by the crown, so he could retain his seat as an MP at Westminster, but £800 a year of his father’s £21,000 a year viceregal expense allowance found its way to his bank account.3
The family remained in Ireland for almost three years until William Gladstone and his Liberal colleagues replaced Disraeli’s Tory administration in April 1880. It was long enough for Jennie to produce a second son, christened John (but always known as Jack), and for the couple to require a third loan. Lord Randolph warned her it was ‘positively the last we shall be able to make’.4 Having witnessed Iri
sh poverty and famine, Lord Randolph’s politics carried a keen edge that turned him into a leading advocate for ‘Tory Democracy’, a more progressive policy that encouraged Conservatives to adopt reforms popular with newly enfranchised voters instead of allowing the Liberal Party to pose as their sole champions. At the same time, however, a shortage of funds continued to restrain the couple’s social life. ‘I haven’t been to many balls, as I simply cannot afford to get dresses and one can’t wear always the same thing,’ Lady Randolph reported to her mother. ‘Money is such a hateful subject to me just now don’t let us talk about it.’5
For all his growing political success, Lord Randolph was troubled by mounting health problems*1 which forced a leave of absence from Westminster. The Churchills returned to New York. Leonard Jerome could still not pay their allowance regularly, but after remortgaging his Manhattan mansion he handed over a capital sum which allowed them to buy a new London home on the northern, less fashionable side of Hyde Park.
Another change in Lord Randolph’s fortunes arrived in July 1883 when the duke of Marlborough died suddenly of a heart attack. His eldest son George automatically became the 8th duke, inheriting Blenheim and its immediate estate, but the 7th duke’s will awarded his personal estate, valued at £146,000, to his second son Lord Randolph after the dowager duchess’s eventual death and after it had paid dowries of £10,000 on the marriage of each surviving daughter.6 His inheritance prospects thus clarified, Lord Randolph was able to repay the loans he had accumulated from unofficial moneylenders and to borrow £31,000 in their place from Scottish Widows Insurance Company, at a lower rate.
He was powerless, however, to prevent his elder brother from raising much larger sums by selling off more of Blenheim’s treasures. Lord Randolph’s father the 7th duke had persuaded his political friends that the only way to save Blenheim was to amend the protective Act of Parliament and allow the sale of the 1st duke’s possessions. The 7th duke had limited himself to selling off one of Europe’s greatest private libraries for £57,000,7 but the 8th duke now consigned Blenheim’s collection of Old Masters paintings – including works by Raphael, Titian, Rubens, Van Dyck, Stubbs and Gainsborough8 – to the National Gallery or auction rooms, where they fetched more than £400,000.*2
Lord Randolph consoled himself by escaping to winter sunshine in India, a visit that paved the way for his appointment as secretary of state for the colony when the Conservative Party displaced Gladstone’s Liberal government in the middle of 1885. The post brought a welcome ministerial salary of £5,000, the standard reward at the time for a secretary of state (and considerably higher in real terms than their salary today). However it lasted just six months because Gladstone temporarily recaptured power early in 1886. Within another six months the Liberals had been driven out of power again by a decisive Conservative campaign against home rule for Ireland, masterminded by Lord Randolph.
The new Tory prime minister Lord Salisbury rewarded the thirty-six-year-old Lord Randolph with the twin posts of chancellor of the exchequer and leader of the House of Commons. This time the salary would have lasted longer had Lord Randolph not overestimated the strength of his political capital: he tried to force cuts in military expenditure on colleagues who already resented his forays into their ministerial territory. The situation worsened and the prime minister calmly accepted Lord Randolph’s impulsive letter of resignation.
This sudden loss of both position and salary came as a shock to Lord Randolph, but neither he nor Jennie made any serious attempt to curb their spending. Their marriage was under strain, and an increasingly ill Lord Randolph spent long periods abroad each winter, while for three successive summers they economized by renting out their London home and spending the season in a house rented by the dowager duchess near Newmarket racecourse. Here their young sons Winston and Jack would sell hens’ eggs to supplement their pocket money, which was always in short supply.9
Racing produced one of Lord Randolph’s rare financial successes: his mare L’Abbesse de Jouarre cost only £300 but during her career won prize money of more than £6,000.10 More often, however, the Churchills’ finances remained chaotic. ‘I regained at baccarat all I lost at racing,’ Lord Randolph told his wife in 1890. ‘I am sorry your money affairs are in such confusion & have told Hemmerde [of the London and Westminister Bank] to put £500 in your account. In June you had £400 & £1500, but you only account for £1,477 leaving £400 + £300 overdrawn unaccounted for... You had better send me Rouff’s [a French publisher] bills.’11
That autumn Lord Randolph turned down a salary of £2,000 a year to chair an American mining company; he was confident that he could find better-paid work in the City of London if he needed to. Since his schooldays he had remained a close friend of Nathaniel Rothschild, now Lord Rothschild and the head of a family that had led the City’s move into funding the trade of luxury goods and precious metals.12 Through The Exploration Company13 the Rothschilds provided logistical and financial support to expeditions designed to expand gold-mining in southern Africa, a new frontier; the region accounted for only 1 per cent of the world’s gold production in 1890, but would reach 15 per cent just two years later.14 Alfred Beit, a mining expert close to the Rothschilds, was convinced they could mine down to deeper levels and he had already bought several properties in the Central Rand area to back his hunch.*3
Leading such an expedition presented one of the few socially acceptable ways for the younger son of a duke to replenish the family coffers and by the spring of 1891 Lord Randolph had decided that this had become necessary.15 He agreed to lead a party to explore further north in Mashonaland (a region which later became Rhodesia and is now in Zimbabwe), guided by a mining engineer and logistics expert found by the Rothschilds. Lord Randolph’s bank lent him £1,000 of the £5,000 that he was to put into his syndicate; the remainder, which arrived late, came from a mysterious Mr Saunders. It was Lord Randolph, rather than the Rothschilds, who raised another £11,000 for the syndicate from ‘family and friends’,16 while he secured a personal fee of £2,000 from his friends, the Borthwicks, to report on progress for their newspaper The Morning Post.17
By the time Lord Randolph had paid the Rothschilds’ experts, £10,000 remained to meet the party’s costs in Africa. Unfortunately, local supplies turned out to be twice as expensive as he had expected. ‘The business affairs of my amalgamated syndicates out here are not altogether satisfactory,’ Lord Randolph reported home. ‘Very much more money has been spent than I or the people in London had any idea of and if their claims already acquired are not very valuable I shall have made a poor bargain.’18
After merging with two other expeditions to save money, the enlarged party made its way to Kimberley’s diamond mines, its wagons pulled by ninety oxen, twelve mules, twelve donkeys and eight horses.19 From there, they moved on to the recently discovered gold deposits near Johannesburg, where Lord Randolph asked his friend Oliver Borthwick to buy some ‘Transvaal Silvers’ and ‘Nigels’ shares in London,20 while he invested the syndicate’s temporarily surplus funds on the local stock exchange.21
The expedition’s supplies for the six-week trek to Fort Salisbury became the talk of the town: ‘The wonderful thing was that they could never buy enough,’ wrote the experienced African traveller Percy Fitzpatrick. ‘They put in some supplementaries at Cape Town, and some “after-thoughts” at Kimberley, and etceteras at Johannesburg, and extras at Pretoria, and replenishments at Pietersburg, till they looked like the commissariat of a continental army.’22
On reaching Mashonaland, £5,000 remained for buying mining concessions, but the engineers found only one shaft that showed any promise. They bought it for £2,000.23 After two weeks of excavation Lord Randolph wrote to tell Jennie that ‘The Matchless’, as they called it, looked good enough to be worth ‘from quarter to half a million’. It then filled with water and had to be abandoned.24
Back at home, money remained an acute problem. Jennie had sold the Hyde Park home in order to economize, taking refuge w
ith the children at the dowager duchess of Marlborough’s house in Grosvenor Square.25 ‘How I long for you to be back with sacks of gold,’ she wrote,26 but her husband confessed that the expedition’s only real success had been a £1,000 profit on the shares he had bought in Johannesburg; when final accounts were compiled, investors found they had lost their entire capital. (The Rothschilds debited the final shortfall of £370 to Lord Randolph’s estate.)
‘I shall cut politics & try to make a little money for the boys and ourselves,’ Lord Randolph told Jennie as he set off for home, but he had, as it turned out, already taken the first vital steps to doing so.27 The expedition had provided him with valuable intelligence about the gold fields of the Transvaal’s Witwatersrand district, to which he had diverted his mining experts on their return journey. It was their favourable report that convinced him to spend £1,250 of his own money to take up an offer from Alfred Beit of 5,000 shares in his new private mining company Deep Levels, at five shillings per share, before he floated it publicly on a stock exchange. The rapidly rising value of these shares was to fund Lord Randolph’s family for the remainder of his life and to form the cornerstone of his legacy.28
Winston Churchill made his first plea for more cash on his first day at school, when he lost his pocket money. The requests soon became more frequent. ‘You do get through it in the most rapid manner,’29 his mother told him.
It was the one subject on which he fell out with his nanny Mrs Everest, who once complained that Winston had asked for a second loan before even acknowledging the first: ‘I am extremely sorry my dear Boy I cannot oblige you this time it is utterly impossible unless you wish me to starve,’ she wrote. ‘I do think you are awfully extravagant to have spent 15/- in a week. Some familys [sic] of 6 or 7 people have to live upon 12/- a week. You squander it away & the more you have the more you want to spend.’30
