by David Lough
*9 Harry McGowan (1874–1961), office boy, Nobel’s Explosives Co. 1889; instrumental in consolidation of the British explosives industry during First World War, dealing with Churchill as munitions minister; chairman Explosives Trades Ltd. 1918 (renamed Nobel Explosives Ltd. 1920); merged to form Imperial Chemical Industries (ICI) 1926; chairman ICI 1930–50; knighted 1928, baron 1937.
*10 James Richardson (1885–1939), employed by his father’s Wheat Export Company 1906–18; president, James Richardson & Sons, investment bankers 1919.
*11 William Crocker (1861–1937), president, Crocker National Bank, which was bought for him (as Woolworth National Bank) by his father Charles, a founder of the Central Pacific Railroad.
*12 Mrs Millicent Hearst and Marion Davies, Hearst’s mistress and a Hollywood actress.
*13 Sponsored by Reed Smoot, Republican senator from Utah, and Wills Hawley, Republican representative from Oregon, the bill was designed to raise import tariffs on more than 20,000 imported goods; a version of the bill was signed into law as The Tariff Act 1930 on 17 June 1930.
*14 Churchill sold the Simmons shares on 11 November for $73, an average loss of $37 per share.
*15 After a brief recovery on 30 October (when it regained its losses of the previous day), the market continued to fall until the middle of November.
14
‘He is writing all over the place’
A Strategy for Survival, 1930–1
Exchange rate: $5 = £1; francs 125 = £1
Inflation multiples: US x 15; UK x 60
CHURCHILL HAD TO explain his severe losses not only to Clementine but to his bank manager. He prepared for the encounter in November 1929 by listing the £16,500-worth of new writing commissions he had been awarded while in America. However, a sceptical William Bernau was more interested in the income that Churchill had promised would arrive in the autumn but failed to appear. As a result, he told Churchill, the bank was owed £13,700, but its security was barely worth £14,000.
Churchill was still drafting a request for increased short-term facilities when Bernau forwarded a letter from his head office, warning that the bank’s overdraft arrangement had only two days left to run and would have to be renewed at a lower, not a higher, figure.1 However, Bernau, an insurance specialist, then offered to work personally with Churchill’s lawyers to persuade an insurance company to lend more money to him, in place of Lloyds Bank. Bernau suggested that the future income flow from Churchill’s marriage settlement, which was yet not pledged elsewhere, could provide the necessary security.
A relieved Churchill deemed it wise not to tell Bernau that one of the fixtures of his income for the next few months now looked uncertain. George Blake, The Strand’s editor, had caught wind of Churchill’s American magazine deals and was threatening to cut his contract on the grounds that it would now be almost impossible to resell his own Churchill series on the other side of the Atlantic. Churchill invited the editor and his proprietor, Lord Riddell, to lunch at Chartwell, proposing that business talk should be saved until after the meal. He was confident that his relationship with Riddell would carry the day. Afterwards, however, Blake still halved the number of articles commissioned and also the magazine’s fee for each article, thereby slashing Churchill’s income from £6,000 to £1,500.2
Chartwell was ‘dust-sheeted’ for the winter. Only the study was left as it was so that Churchill could write there at weekends. Strapped for cash, he narrowly escaped the indignity of accepting an emergency loan from Lord Beaverbrook when Bernau coaxed a loan of £5,000 out of the Commercial Union. However, it came at a steep cost of more than 10 per cent a year.3
Churchill promised Bernau that part of the money, at least, would be used to reduce his overdraft, but then a message from Bernard Baruch in America made him rethink. It said, simply: ‘Financial storm definitely passed.’4 Churchill instructed that the whole £5,000 should be sent to Vickers da Costa, so that he could restart trading.5 By Christmas Churchill was buying Montgomery Ward again.6 In January and February he kept adding more Simmons shares to his list, despite the fact that its price fell to the point where Cecil Vickers, the senior partner, felt compelled to advise Churchill to stop dealing in what he called little more than a ‘gambling stock’.7 Vickers da Costa recorded Churchill’s activity in four different accounts, making it difficult to track the overall results, but by the middle of 1930 Churchill had lost an additional £7,000 on the stock market.8
No number of newspaper or magazine articles could replenish his losses. Instead Churchill tried to persuade his publishers to make cash advances for new books that he could quickly conjure up from past articles. At the same time he reassured George Harrap that Marlborough was still on course. He invited Harrap to lunch at Blenheim and gave him a tour of the archive. Still new to Churchill’s ways, Harrap may not have grasped the full meaning of the letter that followed: ‘This is a work which will gain by not being hurried,’ Churchill wrote, ‘and I do not propose in all probability to begin the actual writing until I am saturated with the subject and have formed all the large views of Marlborough’s personality and of the period.’9
In reality, he would not begin writing until several other books were complete. While writing an article for Collier’s magazine about the Battle of Tannenburg (26–30 August 1914), he realized that the story of the Eastern Front was almost unknown and worth a book in itself. He suggested it to Thornton Butterworth, dropping a broad hint that he might find time to fit it into his busy schedule if offered a generous enough advance. Keen to win back his author, Butterworth obliged with an advance of £2,500 for The Eastern Front, £1,500 of it payable on signature.10 The editor of The Times, however, was less enthusiastic and would offer only £500. ‘Churchill’s stock is not very high at the moment,’ he observed. ‘He is writing all over the place.’11
In America Charles Scribner agreed to come in on some deal, but he preferred his own idea of an abridged version of The World Crisis. His firm would edit it, he explained, therefore providing Churchill with ‘a financial return out of proportion to the time and labour that would be entailed’.12 Butterworth was sceptical, but in the end supported the idea. A third book was then conjured out of thin air when Churchill proposed adding 50,000 fresh words about his early life to the 50,000 he had already written in various articles, together making an autobiographical book worth a guinea. Butterworth and Scribner liked the idea and quickly signed up to My Early Life.13 Suddenly, Churchill’s cash flow looked rosier: stock exchange losses aside, he now expected to generate a surplus in 1930.14
However, Churchill was now obliged to do almost nothing but write, and his remorseless schedule took its toll, forcing him to restrict his political activity. He had committed himself to the completion of three books and and would write more than forty articles for newspapers and magazines, many of them American, before 1930 was finished.
The challenge of juggling so many commitments without the help of a researcher proved formidable. William Chenery wanted changes to both of Churchill’s first two articles for Collier’s; the Bell Syndicate threatened to cut short its series because, it alleged, Churchill kept recycling the same material in different columns; then the Saturday Evening Post cancelled his final four articles (worth $10,000) when it saw that Churchill was writing for Collier’s, although neither Churchill nor his agent had realized the two publications were rivals. Finally Collier’s rubbed salt into the wound by refusing to renew Churchill’s commission for 1931; as a result he was forced to accept a much lower fee from the only real alternative, Hearst Newspapers.
Only the arrival of proofs for My Early Life in April relieved the gloom. The publishers’ enthusiasm prompted its promotion from third to second in the order of publication, once Butterworth agreed that he would not reclaim Churchill’s signing advance for The Eastern Front as a result. By June it had jumped to the top of the list with publication in October. The abridged World Crisis would follow in February 1931, then The Eastern Front in Septe
mber. Whatever the order, it was clear that Marlborough: His Life and Times had been sidelined.
All of these extra book deals did not immediately improve Churchill’s dire finances after his investment losses. In March 1930 Cecil Vickers had asked for an extra £2,000 cash,15 but Churchill had only been able to find half of the money, so that Jack had to write a cheque for the balance until funds arrived from a New York royalty account.16 By mid-summer 1930 Churchill faced a series of what he called ‘inescapable payments’, together adding up to £4,300. His secretaries’ list of unpaid bills at Chartwell ran to two pages, interest was due to the bank at the end of June and large life insurance payments loomed in September.17
Churchill drafted a letter to Bernau setting out his difficulties, but in the end decided on a face-to-face meeting, using his draft as an aide-memoire. It lists more than £5,000-worth of fees due for articles already written, plus an additional £12,000 now contracted for ‘no fewer than three books’ over the coming months. Finally it reminds Bernau of a separate £14,000 due for Marlborough in 1932. His difficulties were therefore temporary, Churchill stressed, although he did need to borrow another £2,000 as a result of timing problems and would need to delay the reduction in his overdraft until the end of the year.18
Before Lloyds Bank would agree to come to his aid, Churchill had to promise to reduce his borrowings by £3,000 before the end of the year. His cousin Captain Guest also had to guarantee the temporary new loan of £2,000, while Sir Abe Bailey was asked to reconfirm his personal guarantee of the value of Churchill’s Sherwood Starr shareholding. Churchill’s lawyers found a puzzled Sir Abe in Harrogate, where he was on holiday. ‘I thought I paid you off £2,000,’ he told Churchill. ‘At any rate whatever you wish me to do I will gladly do for you.’19 Yet another crisis had been averted.
Throughout his summer holiday in France, Churchill’s writing commitments had to vie for attention with the world’s stock markets. He asked Cecil Vickers to send him a daily cable of prices, led by three American railway companies whose shares Churchill had sold short. He cut the first position too soon after losing his nerve, but managed to hold on and sell the other two at a profit, when Bernard Baruch cabled from America to forecast a turn for the better in the market.20 Even on holiday, Churchill’s journalistic instincts remained alert and he took advantage of Lloyd George’s illness and then of the crash of a British airship to win commissions for two special articles. A third followed when the Sunday Chronicle bashfully asked whether he would lead on a new series it was planning about biblical figures; it all came down to price, he told the paper.21 It was on this holiday, too, that Churchill first suggested to Butterworth that ‘the fifteen or twenty articles I have already written on eminent personages could be easily harnessed’ into a book, the idea that was to turn into Great Contemporaries.22
On Churchill’s return, extracts from My Early Life started appearing in the Daily News23 before the full edition was published in October. ‘I am hopeful that the book will do more than it was originally written to do, namely, to pay the Tax collector,’ Churchill told Stanley Baldwin. ‘There may even be a small surplus to nourish the author and his family.’24 It was not to be: the 9,000 copies sold in Britain left royalties still short of Churchill’s advance at the end of the year and the picture was similar in America.25 Churchill realized that writing alone would not be sufficient to pay off his debts.
Obligingly, Lord Inchcape was happy to resuscitate the plan for two of his private subsidiaries to appoint Churchill a director at a fee of £500 each. Churchill remained a director of both Mann George Depots and R. & J. H. Rea until 1939; neither turned out to hold many meetings of their directors, and, when they did, the meetings were often arranged at too short notice for Churchill to attend. The other plan that Churchill had considered and now put into action was a lecture tour of America. Possible promoters were asked to guarantee payment of $50,000 net of expenses and penalty-free cancellation if Churchill regained office or faced a general election. Louis Alber’s Affiliated Lecture & Concert Association accepted the terms and dispatched a contract, but Churchill had not yet signed it when he was distracted in December by a second call for extra cash from Cecil Vickers: Churchill’s investment account had suffered fresh losses and Vickers wanted him to inject £2,000 into it.26 Churchill was supposed to be reducing his bank loans, not increasing them, so he arranged to borrow the extra £2,000 from the Commercial Union, a more expensive source. The move took his combined loans from bank and insurance companies up to £22,000; he was also paying market rates of interest on loans of only a little less from his family trusts.27
Worse was to come in the following month, January 1931, when Churchill lost a further £3,000 trading in and out of Montgomery Ward’s shares.28 To cover the loss, he tried to borrow from his daughter Mary’s Settlement, only for the lawyers to rule that he could offer insufficient security; as a result, Churchill asked his friend Sir Howard Frank*1 to put Chartwell on the market. The estate agent was unconvinced about the price Churchill wanted: ‘I do not think anyone will ever give you £30,000, but, of course, if you are quite happy to continue living there on the chance of the right person coming along one day and giving you a fancy price, all well and good.’29
Churchill’s only other option in the short term was a second appeal to his brother. Jack could hardly refuse, given that he was a partner in the firm to which money was owed. Just before the stock exchange closed its fortnightly account on 14 January, Jack produced a cheque for £2,000,30 whereupon the senior partner Cecil Vickers suggested Churchill take a rest from the market. ‘I think your policy should be, at the present time, one of masterly inaction, waiting for the rise which will come,’ he advised.31
There was no New Year holiday on the French Riviera for Churchill at the start of 1931. He remained at home, making what he described to George Harrap as ‘good headway with Marlborough’, before he turned his attention back to The Eastern Front and his list of unwritten articles which he valued at £7,500.32
A decade earlier Churchill’s journalism had found easy targets in Lenin, Bolshevism and the trade unions: he enjoyed good support on each subject among both his political peers and press proprietors. Now, however, his strong opposition to Indian independence and his emerging concern at the rise in Germany of National Socialism (the Nazi Party led by Adolf Hitler had won six million votes in the country’s most recent election) proved more isolated pre-occupations. Indian self-government threatened the security of Britain’s eastern Empire, Churchill believed, but each of Britain’s main political parties had supported the call by Britain’s viceroy in India, Lord Irwin, for a conference to discuss the country’s possible dominion status. Isolated and short of time for all the writing required to keep his finances afloat, Churchill resigned from the Conservative Business Committee in the House of Commons (which would now be known as the shadow cabinet).
Little was going Churchill’s way in the early part of 1931: the Indian constitutional conference had endorsed the principle of self-government; the abridged World Crisis was selling very slowly;33 and for his annual article previewing the Budget, he reluctantly accepted a lower rate of £200, rather than his usual £500.34 Moreover his American lecture contract had raised numerous tax complications. Louis Alber had agreed to pay any US charges, but it was the possibility of being charged tax in Britain that worried Churchill. Unconvinced by the cautious assurances of experts that he should be safe,35 he resorted to his usual tactic of consulting directly the chairman of the Inland Revenue, P. J. Grigg, who had been Churchill’s private secretary at the Treasury. Agreeing to refer to his former minister only by the initials ‘A.B.’ throughout their correspondence, Grigg consulted his ‘alguazils’,*2 as Churchill called them, and then confirmed his fears: lecturing was too similar to his profession as an author for him to escape taxation: ‘[A.B.] is merely addressing hearers orally instead of delivering his message by means of the printed word.’ Churchill contested their conclusion:
The art of delivering a lecture is not literary but histrionic in its character. It is a physical and psychic exertion of which most literary men or journalists would be incapable, a certain standard of quality being essential... In the circumstances I think A.B. would be ill advised to undertake the lectures as... he would receive little more than two-fifths himself.36
Churchill left the contract for his lecture tour unsigned while he continued to search for projects that might generate immediate cash but did not require immediate work. He came back to an idea he had discussed with Charles Scribner at a Yale football match two years earlier: a book about the history of the relationship between Britain and America’s ‘English-speaking peoples’. Scribner heard no more until June 1931, when a cable suddenly arrived out of the blue from the London publisher Eyre & Spottiswoode, asking for best bids and claiming to hold exclusive ‘world rights’.37 Scribner was still waiting for the first chapter of Marlborough, for which he had paid a substantial advance, so he asked his London office to investigate. Marlborough being virtually finished, their report ran, Eyre & Spottiswoode was merely reacting to Churchill’s request for bids of at least £30,000 for a subsequent book.
Scribner wrote Churchill a long letter, reminding his author that he had forecast that the English-speaking peoples book would require at least ‘three or four years after the Marlborough’ when they first discussed it; his only possible conclusion therefore was that Churchill must be short of money, but Scribner would rather lend him cash than bid for another book.38 Churchill quietly put the project on ice.
Similar complications were inevitable as Churchill continued to pitch articles and book extracts to magazines and newspapers, usually dispensing with the services of an agent in order to save commission. In June 1931 The Strand sold to Liberty the American rights to one of Churchill’s articles, with Churchill’s blessing but without William Hearst’s permission, as was contractually required. To avoid litigation Churchill had to fall back on his personal relationship with Hearst. He won few friends at Hearst’s headquarters, however, and his attempts to renew his column for the following year went ignored. Then the sale to The Sunday Times of newspaper rights for The Eastern Front fell through, because Churchill could not get the newspaper to agree dates with the book publishers. To top it all, Curtis Brown had to cancel its European sale of the newspaper rights when Brendan Bracken announced out of the blue that he had sold the world rights to the London General Press Agency, a contract reached in haste and later to cause a lengthy lawsuit.39 Curtis Brown advised Churchill to let him take charge of everything to avoid similar problems in the future; he offered to do it for half the normal agency’s rate, but Churchill could not afford the luxury.
