No More Champagne

by David Lough

  Prompted by a review Churchill had written of one of its books, the publisher Thornton Butterworth*5 offered to publish any book that Churchill might care to write.30 Curtis Brown immediately obtained a guaranteed advance of £5,000 for the British Empire rights, with £2,000 paid in cash on signature.31 Newspaper serial rights seemed to sell just as easily.32 The Times offered another £5,000, but before accepting Churchill wanted a commitment from H. Wickham Steed, the editor, that there would be no damaging Dardanelles editorial. ‘I think you are entitled to assume that consideration for our own consistency, quite apart from the ingrained admiration we have always felt and have sometimes expressed for you, will be a guarantee that we shall not wilfully foul your and our nest,’ Wickham Steed replied carefully.

  Churchill wanted an absolute assurance and Wickham Steed had to write again: ‘You may regard my letter as an undertaking that we shall not criticize you for having written the book... this without prejudice to our freedom of criticism in regard to the political aspects of any policies or political or military enterprises for which you may have been responsible.’ Churchill filed away this second letter, marking it ‘Keep secret’. He signed a contract with The Times four days later.33

  When he met Cox & Co. for a promised ‘end of year’ review, Churchill first flourished his new contracts with Butterworth and The Times, then went on to mention more: ‘American agents $50,000 (probably) for whole rights, South Asia and Continental rights about £2000,’ Bernau noted afterwards.34 The $50,000 figure came from a conversational aside by Butterworth rather than a forecast by Curtis Brown, who had always been more cautious about Churchill’s prospects across the Atlantic.

  When no offers had arrived by December, Butterworth approached Charles Scribner’s Sons, the firm that had turned down Lord Randolph Churchill fifteen years earlier. The Scribners’ London representative remained sceptical of Churchill, warning head office that he was ‘frankly out for all the traffic will bear’.35 However, before joining the family firm Charles Scribner II’s son had fought on the Western Front and he was keen. ‘Unlike Lloyd George, Churchill has the power – and the very great power of writing,’ Butterworth urged. ‘Do please, and here I place the greatest stress, make your royalty as high as you can’.36

  The Scribners held their fire until the last minute, waiting while Curtis Brown recommended offers of $17,500 from a monthly magazine Metropolitan for the serial rights and $10,000 for the book from Duran & Co.; then they cabled Butterworth at the end of January: ‘Offer for Churchill 20 per cent royalty, tax free, with $16,000 dollars advance.’37 ‘No better or more dignified publisher could have been found for the work in America,’ enthused Curtis Brown.38 (These generous sums were dwarfed by the £90,000 announced the following year for Lloyd George’s memoirs, although that deal caused such controversy that the prime minister first declared he would give the money to charity and then had to abandon the project.)39 Churchill went on to earn £25,000 from The World Crisis, but he avoided any public censure for profiting personally from his public position because his earnings expanded gradually as the book grew from first one to two, and eventually three volumes.40

  Throughout 1920 relations between the prime minister and his secretary of state for war had been strained by policy differences over Russia. While they were both in the south of France in January 1921 for a New Year holiday, Lloyd George suggested that Churchill be transferred to the Colonial Office. The new post would keep Churchill clear of Russia or Eastern Europe, but it had just added responsibility for Britain’s two post-war Middle Eastern mandates, Iraq and Palestine, to the rest of the empire.41

  In the absence of formal government guidance on conflicts of interest for ministers, Churchill took it upon himself to ask Austen Chamberlain, the new chancellor of the exchequer, whether he should keep his mining shares, now that so much of Africa, including the south, was part of his new ministerial bailiwick. ‘I chose this South African theatre for my investments as it seemed one of the very few into which Admiralty, Munitions or War Office business was unlikely to enter,’ he claimed, with an element of hindsight.

  Now that I have undertaken to go to the Colonial Office, I must disclose my interest, and I should be glad to have your opinion as to whether I am bound to sell the Securities at their present low value. I do not myself think so, but no man is a good judge in his own case and you, as Chancellor of the Exchequer, seem to be in a special position to pronounce on such questions of Ministerial propriety.’42

  Chamberlain consulted the prime minister before replying:

  It is not easy for a man in public life, even with the most scrupulous care, so to invest his money that no one of his investments shall ever be affected or be capable of being affected by action of the British Government. There is, as far as I can see, no probability, or even possibility, that the holding of these investments in a Self-Governing Dominion can in any way conflict with your duty as a Minister of the Crown or embarrass you in the discharge of it.

  Chamberlain added a rider that Churchill had not expected, but had to accept: ‘I think that apart from any unforeseen change in political conditions or any over-riding private necessity, we ought to leave the investment unaltered during our tenure of Office.’43

  ‘We must try to live within our income’, Churchill urged Clementine on 27 January 1921, although he offered no advice on how to do this.44 His usual strategy was to increase his income rather than to cut spending. True to form, he told her that he had accepted an invitation from The Strand Magazine to write two articles on his new hobby of painting for a fee of £1,000.45

  Churchill sat down to write, unaware that his fortunes were about to change. On 26 January 1921 two trains collided on a length of single track between Welshpool and Newtown in Wales.46 Among the victims was a fifty-one-year-old railway company director, Lord Herbert Vane-Tempest, Churchill’s Londonderry cousin and the current beneficiary of the Garron Tower estate. Since Lord Herbert was unmarried and without an heir, his grandmother’s will ordained that the whole estate should jump across to the eldest surviving Churchill male.

  Winston had been next in line for more than a decade, but only occasionally concerned himself with the estate’s affairs. In 1909 his solicitors had told him that its income amounted to £3,700 a year. In 1919 its capital value had stood at almost £90,000, the majority safely invested in Irish government bonds and stocks, following the trustees’ sale of most of the estate’s houses and the fire-damaged Garron Tower Hotel. The only remaining property was the local Carnlough Lime Works, its harbour and nearby tenements, whose rent hardly matched the costs of their collection.47

  On the day after the accident Lord Herbert’s lawyer visited Churchill’s solicitor to notify him. He mentioned a likely annual income from the estate of £4,200 a year, but could not say how much estate duty would be owed. Whatever its level, the remainder would be sufficient to transform Churchill’s finances.48

  Churchill’s first step on hearing the news was to arrange an immediate meeting to soothe the fears of his bank manager William Bernau, with whom a crisis had been brewing since his loans and overdraft had now reached almost £28,000.49 Clementine’s priority was to attack their pile of unpaid bills. ‘What would you really wish done about the Bills?’ she asked her husband. ‘In the first flush of the rosy news, you suggested paying them off & you said I was to send them all to you to have dealt with – it would be heavenly if this could be done, but I don’t know if you really mean it.’50

  The following day she was still absorbing the news. ‘I can’t describe the blessed feeling of relief that we need never never be worried about money again (except thro’ our own fault of course!),’ she told Churchill. ‘It is like floating in a bath of cream.’51 In her excitement, Clementine wrote daily for four days. ‘We will have to pay our bills more regularly now that we are substantial people, shan’t we?’ she mused, before asking for an infusion of funds. ‘Please may I have a little money now that you are what the French call
a “rentier”?’*6 As regards his articles on painting for The Strand Magazine, she wondered if he could now afford to drop them as she felt they were bad for his image.

  I have a sort of feeling that the ‘All Highest’ [George Curzon, then foreign secretary] rejoices every time you write an Article & thinks it brings him nearer the Premiership, tho’ I think that a man who has had to bolster himself up with two rich wives*7 to keep himself going is not so likely to keep the Empire going as you, who for 12 years have been a Cabinet Minister & have besides kept a fortuneless Cat and four hungry kittens.52

  Clementine’s only regret was that the jewels were no longer part of the Garron Tower estate. Sensing her disappointment, Churchill briefly considered an effort to recover them, but he told the marquess of Londonderry that he accepted their earlier arrangement. ‘I am sorry you regret the jewels but I am not sure you need to do that,’ his cousin responded, dispatching his butler to Sussex Square with what could be found of his great-grandmother’s silver. ‘The emeralds are nice, but now no one likes anything but the Cartier setting.’53

  Churchill and Bernau hoped that most of the estate’s investments could be transferred to Cox & Co. before the colonial secretary left for Cairo, where he was to chair an imperial conference on the Middle East. They had decided that Churchill should repay the £4,000 of his bank loans that his cousin had guaranteed, but keep the rest until the final size of his inheritance was known. ‘I had a blow yesterday when I found that the Estate is about £7,000 less than I thought,’ Churchill told Clementine. ‘It now seems likely to work out at about £57,000 after duty. This would have been £85,000 pre-war. It will produce nearly 4000 a year from its present trustee securities: & I am being carefully advised as to rather more fruitful investments.’54 Clementine was philosophical:

  I am so sorry my Dearest that you have had a deception as to the amount of the inheritance. It is certainly very disappointing after you had worked it out so carefully & thought about how to lay it out to the best advantage; but don’t let a ‘crumpled rose leaf’ like this spoil the really glorious fact which rushed on us so suddenly a little time ago – that haunting care had vanished for ever from our lives... It’s so delicious to be easy – I hope I shall never take it for granted but always feel like a cork bobbing on a sunny sea.

  Could he not, she asked, ‘take me in your waistcoat pocket to Egypt’?55 Churchill said she could come, prompting a further question as to whether Bessie, Clementine’s lady’s maid, could travel too? Bessie made the journey – the Churchills’ spending had moved up another step.*8

  *1 Britain’s debt stood at 130 per cent of its pre-war gross national product, below its level at the end of the Napoleonic Wars, but far above the level in the United States (30 per cent), which took over Britain’s mantle as the world’s leading financial power.

  *2 These were 500 Cassel Coal Collieries shares worth £872 at the end of February 1919.

  *3 Alexander Kolchak (1874–1920), Russian naval commander, Black Sea fleet 1916; ordered to leave Russia following 1917 Revolution; returned to establish Siberian Regional Government 1918; after initial success in 1919, captured and shot February 1920.

  *4 Albert Curtis Brown (1866–1945), born in United States; joined Buffalo Express 1884–94; New York Press Sunday editor 1894–8, London correspondent 1898–1910; founder and managing director International Publishing Bureau 1900–16; founder and managing director Curtis Brown Ltd. 1916–45.

  *5 Thornton Butterworth publisher (of G. K. Chesterton and Margot Asquith among others); his business went into receivership in September 1940.

  *6 A person living on a financial return from property or investments.

  *7 Curzon’s two wives were Mary Leiter, daughter of Levi Leiter, co-founder of the Chicago department store Field & Leiter (later Marshall Field), whom he married in 1895. She died in 1906. After a long affair with the novelist Elinor Glyn, Curzon next married Grace Hands, a wealthy American widow, in 1917.

  *8 ‘With such elaborate clothes a lady’s maid was really a necessity. Skirts that trailed on the floor needed constant cleaning and mending. Zips were still in the distant future and bodices had intricate fastenings.’ Loelia, duchess of Westminster, Grace and Favour, pp. 40–1.

  10

  ‘Our castle in the air’

  A Country Seat at Last, 1921–2

  Exchange rate $5 = £1

  Inflation multiples: US x 14; UK x 45

  THE CHURCHILLS JOURNEYED in style for six weeks – breaching ministerial travel guidelines by booking a luxury cabin for the sea journey – before returning in the spring of 1921 to find that the transfer of the Garron Tower estate had made little progress during their absence. The estate’s value had turned out to be £64,000, reduced by estate duty to £56,000,1 which was lower than hoped. Nevertheless, Churchill increased Clementine’s monthly housekeeping allowance by a third. Proudly handing his bank manager a two-page list of investments he had inherited, Churchill invited William Bernau to select those he wished to use as security for a new consolidated loan of £30,000, which Churchill would use to replace all his old borrowing facilities.2 He was going to use the windfall to enlarge his investment portfolio, rather than reduce his borrowings.

  The reorganization of Churchill’s finances was interrupted by two family tragedies in quick succession. First, Clementine’s thirty-three-year-old brother Bill committed suicide in a French hotel room, unable to overcome his addiction to gambling. Just two months earlier Churchill had used £750 of his new funds to clear Bill Hozier’s debts, and his brother-in-law had made a written undertaking ‘not to engage in any form of gambling at cards, racing or game of chance’.3

  Weeks later, Churchill’s mother fell down some stairs and broke her ankle. Jennie had divorced George Cornwallis-West in 1914 and had married for the third time in 1918, once again a man younger than her son. Montagu Porch, a member of the British civil service in Nigeria, had not been dissuaded from marrying her by Churchill’s warnings of murky financial trouble ahead4 or by Jennie’s refusal to move to Nigeria. The couple enjoyed a honeymoon in Europe that lasted for almost a year, until their money ran out and Porch returned to Nigeria.

  Jennie then achieved the one real financial coup of her life. She borrowed money from Porch’s family trusts to buy a property in Berkeley Square, London; she modernized it and sold it early in 1921 for a clear profit of £15,000.5 After paying off five of her most insistent moneylenders, Jennie made a celebratory shopping trip to Florence, Rome and Naples, spending £1,000 on Italian antiques.6 ‘We ransacked all the curiosity shops and Jennie bought profusely,’ recalled her companion Vittoria Colonna, duchess of Sermoneta. ‘Her zest in spending money was one of her charms.’7

  Now, however, Jennie’s broken ankle had badly infected her leg, which had to be amputated above the knee. Churchill cabled reassuring messages to Porch in Nigeria, insisting that she was out of danger, but Jennie died of a sudden haemorrhage on 29 June 1921. She was sixty-seven and technically intestate, having failed to remake a will after remarrying. It made little difference: after several of society’s most fashionable moneylenders had lodged their claims, Jennie’s debts easily outstripped her assets.8

  Churchill mourned his mother’s loss, but her death completed the transformation of his finances. His half share of both his parents’ trusts could be added to the money that he had recently inherited from his great-grandmother. Extracting the lump sum of $250,000 due from his grandfather Leonard Jerome’s ‘American settlement’ proved difficult: New York’s Manhattan Club had taken over the liability to make the payment after buying the Jerome mansion in 1913, but it did not have the funds available. Churchill was anxious to receive payment while the dollar’s exchange rate to sterling remained strong, but the club took time to find a lender, who then insisted on seeing a copy of Jerome’s original 1874 deed, which had gone missing.

  The Churchill brothers hired an American lawyer to force the pace, but almost inevitably the sterling value o
f the dollar fell by 10 per cent during the time it all took.9 When the dust had settled, Churchill’s own share of all his parents’ trusts produced another £54,000 of capital,10 but its one big disadvantage compared to the Garron Tower inheritance was that it remained tied up in trusts to protect the next generation. He would earn investment income each year from the trusts, but could only touch their capital if the transaction was treated as a loan and he paid the trustees a market rate of interest.

  The family tragedies made it difficult for Churchill to complete the reordering of his finances on which he had embarked during the spring. To complicate matters, his relationship with Lloyd George had reached a new low. The prime minister had appointed the less-experienced Robert Horne to replace Austen Chamberlain as chancellor of the exchequer, a position in which Churchill aspired to follow his father. Three days after his mother’s funeral, amid press reports that he was plotting to unseat the prime minister, Churchill met Sir Reginald Cox, the senior partner of Cox & Co., to promise that he would produce a more detailed blueprint of his future financial arrangements once Parliament rose for its summer recess.11

  ‘Dealing in round figures,’ he wrote confidently to Sir Reginald in August, ‘I owe the bank £15,000 on promissory notes, £7,000 on 4% loan against a life policy of £10,000, £11,000 overdraft on current account, & £2,000 overpaid on the Investment a/c, total £35,000.’12

  In place of all these different facilities he suggested a single loan of £35,000 to be repaid slowly over eleven years. Sir Reginald baulked at this. ‘Told him that an annual repayment, as it implies renewal from year to year, is not acceptable,’ Bernau noted after a second meeting, held on the same day that the cabinet met to discuss Churchill’s proposals for Britain’s administration of its new mandates in Iraq and Palestine. Churchill’s loan was restricted to £30,000, to be reduced ‘substantially’ in 1922, plus an overdraft of £3,000.13