No More Champagne

by David Lough

  Turning aside from preparing a speech to the House of Commons during a debate on British air defences, Churchill asked his solicitors at Nicholl, Manisty to raise an emergency loan of at least £5,000, which he would back by taking out a new life insurance policy. Nicholl, Manisty pointed out that his insurance company borrowings alone would rise to £13,000, costing him £1,650 a year, but Churchill had nowhere else to turn.48

  The next day, as Hitler ordered his troops to cross into Austria, Churchill made what the diarist and politician Harold Nicolson described as ‘the speech of his life’ to the House of Commons. He warned that Britain would soon have to choose between resisting Hitler’s campaign of aggression or submitting to it.

  Meanwhile there was still no reply from Baruch. It was too late anyway. Although the Commercial Union provided Churchill with emergency funds of £5,000 on 18 March,49 a further fall in US share prices (which tumbled by a quarter in March)*5 caused Vickers da Costa to demand some immediate cash to plug the gap between the cost of Churchill’s shares and their current value. This gap stood at £12,000 on 21 March,50 but Churchill could only afford to write a cheque for £2,000. No buyer had come forward for Chartwell or Morpeth Mansions; he was already borrowing £35,000 from Lloyds Bank, from insurance companies and from his family trusts; and he had used up every scrap of security available. Churchill had simply come to the end of the road.51

  Above all he wanted to avoid bankruptcy and be free enough to concentrate on Europe’s worsening crisis. On the day that the cabinet’s foreign policy committee decided that Britain must accommodate Hitler rather than fight over Czechoslovakia, Churchill gave his friend Brendan Bracken a handful of his stock market accounts. He asked him to mount a discreet rescue that could keep him afloat for a little longer. Bracken went straight to his co-owner at The Economist, Sir Henry Strakosch, one of the small group of experts who had been feeding Churchill confidential information about Germany’s armaments expenditure.

  Sir Henry, who was unmarried and had made his wealth at the helm of South Africa’s Union Corporation, had been ill in Cannes just two months earlier when Bracken had asked Churchill to visit him on his sickbed, describing the sixty-eight-year-old as a ‘lonely old bird’.52 Sir Henry, for his part, regarded Churchill as the one politician in Europe with the vision, energy and courage required to resist the Nazi threat. He had no hesitation in agreeing to help out financially.

  That evening of 18 March 1938, Bracken met Churchill to sketch out a face-saving plan: Sir Henry would meet Vickers da Costa’s demand for cash, and for a period he would take over responsibility for any further gains or losses on Churchill’s shares; no one else need know. He asked Churchill to produce a letter that he could show Sir Henry the following day, with a note setting out the figures. Churchill dictated both the next morning:

  I was profoundly touched and relieved by what you told me last night of the kindness of our friend. If it were not for public affairs and my evident duty I shd be able to manage all right. But it is unsuitable as well as harassing to have to watch an account from day to day when one’s mind ought to be concentrated upon the great world issues now at stake. I shd indeed be grateful if I cd be liberated during those next few critical years from this particular worry, wh[ich] descended upon me so unexpectedly; to the chance of which I shall certainly never expose myself again. I cannot tell you what a relief it would be if I could put it out of my mind; and take the large decisions wh[ich] perhaps may be required of me without this distraction and anxiety. I send you a short note which explains the position; and perhaps you will show this to our friend.53

  Churchill’s note omits to mention his loans or tax liabilities and it puts an optimistic gloss on the liquidity of some of his assets:

  The following assets can, if desired, be immediately produced: Irish ground rents, not readily marketable, but valued at £7,500; Cash £2,500; Life policy for £6,000... In addition the present holder, apart from the regular literary contracts on which he lives, has a contract for a book*6 on which some progress has been made, deliverable on December 31, 1939 for £15,000. He could accomplish this task within the specified time by laying everything aside; but how is he to do this while events run at this pitch, still less if he should be required to devote his whole energies to public work.

  Churchill suggested that his rescuer should take over the shareholdings for the following three years ‘with full discretion to sell or vary holdings at any time, but on the basis that no risk of greater liability to the present holder arises, thus removing altogether the speculative element’.54 In the meantime, he expected to pay Sir Henry interest of £800 a year.

  For Bracken’s eyes only, he added an extra note: ‘My dear B Enclosed is a letter wh[ich] you can show our friend. This is only to tell you that as Hitler said to Mussolini, on a recent and less worthy occasion, “I shall never forget this inestimable service.”’

  To save Churchill the cost of interest, Sir Henry paid Vickers da Costa the full original cost of the shares, £18,000. He chose to remain silent on what he expected to happen three years later,55 although he added a legacy of £20,000 for Churchill to his will. Ironically, the shares almost doubled in value over the next seven months, cutting the ‘cost’ of Sir Henry’s intervention to £8,500.56

  Neither man ever spoke publicly about the rescue. Churchill kept knowledge of it to a very tight circle that did not include his bank or his lawyers. ‘Owing to various arrangements’, he told Nicholl, Manisty, he no longer needed all the recent Commercial Union loan money.57 Realizing that he had found a new source of funds, Nicholl, Manisty asked for payment of its outstanding old bills amounting to £331. Churchill sent £81.58

  On 1 April the Daily Express ran a headline: ‘WINSTON PUTS HIS MANSION UP FOR SALE’. Churchill took Chartwell off the market and the next day The Times carried a clarification: the Churchills simply planned to retire to a cottage in the grounds.59

  Sir Henry carried on providing Churchill with private briefing notes and within a week he was warning the House of Commons against a future crisis in Czechoslovakia, urging that a formal Anglo-French defence pact should be agreed. The following year, 1939, Churchill’s dining society The Other Club elected Sir Henry Strakosch as a member, signifying this first-generation immigrant’s reception into the bosom of the British establishment.60 There was no other reward.

  *1 Opera Mundi.

  *2 Churchill selected the Battle of Blenheim (1704), the Battle of the Nile (1798), the Battle of Rorke’s Drift (1879) and the Battle of Jutland (1916). He recognized the claims of the Battle of Waterloo (1815), but considered that the selection of both Blenheim and Waterloo would result in too much red, whereas Rorke’s Drift offered a contrast in black. 25 May, 24 Jun 1937, CHAR 8/547/40, 61.

  *3 The Dow Jones Industrial Average share index stood at 190 on 14 August 1937; by 10 September (the date of Churchill’s first letter to Baruch), it had fallen to 177; by 18 October (the date of Churchill’s second letter) it had fallen to 125. www.measuringworth.com.

  *4 A casino.

  *5 The Dow Jones Industrial Average share index stood at 130 on 1 March 1938; at 99 on 31 March. www.measuringworth.com

  *6A History of the English-Speaking Peoples.

  19

  ‘The future opens its jaws upon us’

  Struggling with History, 1938–9

  Exchange rate $4 = £1; francs 160 = £1

  Inflation multiples: US x 17; UK x 60

  THE INK HAD barely dried on Sir Henry Strakosch’s cheque, when on 24 March 1938 the Evening Standard abruptly terminated Churchill’s fortnightly column, a mainstay of his income and an important political platform. Ever since Anthony Eden had resigned as foreign secretary in February, Churchill’s columns had taken an increasingly anti-German, pro-Czechoslovakian viewpoint – and one not shared by the owner of the Evening Standard, Lord Beaverbrook.

  Percy Cudlipp had given way to a new editor, Reginald Thompson,*1 whom Beaverbrook left to deliver the coup de gr�
�ce. ‘As it is my duty to be completely frank,’ Thompson explained, ‘it has been evident your views on foreign affairs and the part which this country should play are entirely opposed to those held by us.’1

  Churchill’s secretary coldly informed Thompson that Churchill would write that week’s column, ‘after which he does not wish to write any further articles for the Evening Standard, and trusts that this will be convenient’.2 Churchill urgently contacted his Other Club dining companion Lord Camrose and explained that his Evening Standard contract had been crucial, because it gave him access to a long list of other newspapers around the world that carried his column:

  As you will see it is a very fine platform, though as Nazi power advances, as in Vienna, planks are pulled out of it... The Evening Standard have now terminated the series so far as they are concerned, on the grounds that my views are not in accordance with the policy of the paper, and I should like to know whether the Daily Telegraph would care to carry on the series, and if so on what terms.3

  Lord Camrose, who was personally closer to Chamberlain than to Churchill, would only commit to an experiment of six months, matching the Evening Standard’s fee. He did, however, agree to move quickly so that the column did not miss a beat, re-appearing on 14 April.4 ‘It may interest you to know that I could have placed the articles in three, if not four, different quarters at the same fee,’ Churchill enjoyed telling the Evening Standard’s editor.

  ‘Both the News Chronicle and the Sunday Pictorial were eager with offers,’ he explained to Imre Revesz at Cooperation Press Service, ‘but The Daily Telegraph is a far more powerful and suitable platform for me.’5 Revesz was not so sure, because The Daily Telegraph was readily available across much of Europe; however, seventeen newspapers took Churchill’s first Telegraph column and this rose to twenty-three, covering much of Europe and South America, by May when one article earned Churchill an extra £93.6

  The Telegraph had no syndication department of its own, so Revesz took responsibility for the British dominions, shortening the gap before Churchill’s columns could be published by transmitting them over the airwaves with the help of a Dutch radio company. ‘It is a radio-telegraphic method by Morse-signs captured only by special apparatus,’ he explained to a puzzled Churchill. ‘This would give to our articles an unusual value as it will be for Australian and South African papers a sensational achievement if they could publish the articles on the same day as the London papers.’7

  Churchill had finally completed the last volume of Marlborough, but there were obstacles to clear before he could turn his attention to his long-delayed A History of the English-Speaking Peoples. Another film, this time about Lord Kitchener of Khartoum, briefly beckoned. Although ‘rather stunned’ by Churchill’s demand for a fee of 1,000 guineas to act as their ‘official adviser’, the film’s backers had paid their first instalment of one quarter before the venture collapsed after failing to raise production funds.8

  Then another brush with gambling debts left Randolph in need of funds. Churchill suggested to George Harrap a compilation in book form of his recent foreign policy speeches, to be edited by Randolph.9 Politically sympathetic, Harrap offered an advance of £1,000 and even delayed the final Marlborough volume to make way for Arms and the Covenant. ‘I do not expect there will be much profit,’ Churchill told Randolph, ‘but you shall have half of whatever there is.’10

  Harrap was also Churchill’s first port of call when he returned from France with a synopsis for his next book after A History of the English-Speaking Peoples, which he was keen to parlay for a signing advance. It was to be called After Armageddon and it would tackle ‘Europe since the Russian Revolution’ over three volumes, to be completed in 1940, 1941 and 1942. By April 1938 Harrap had put together a publishing group and – with the help of George Newnes, which was to publish a ‘parts’ edition – he offered a lump sum of £14,000, to be paid in phases. Churchill talked them up to £15,500, securing an all-important cash advance on signing of £2,000.11

  The prospect of two books within three years, on top of almost weekly newspaper articles, a crowded political diary and increasingly frequent parliamentary speeches, each of which needed painstaking research, proved too much for Violet Pearman, Churchill’s senior personal secretary, who succumbed to exhaustion.12 Her assistant, Grace Hamblin, took over the Churchills’ personal affairs and accounts, while Kathleen Hill assumed the main responsibility for literary matters. Both were conscious that Churchill had reserved two months in his diary for an autumn lecture tour of America.

  Harold Peat had already booked most of the programme, which was to start in Chicago on 25 October and finish on 14 December in New York.13 After Louis Alber’s experience, Peat had insisted on strict cancellation penalties and Churchill had finally agreed a climbing scale that reached $3,000 on 1 August.14 With Europe in crisis and less than eighteen months left to write A History of the English-Speaking Peoples, Churchill decided during July that he could not afford the diversion of the lecture tour. After waiting until the day before the August deadline, he cabled his apologies. Peat reacted with fury:

  Cancellation is entirely out of the question. Not only will I be the loser by some $25,000... but my reputation would be ruined and, unfortunately, yours would be greatly impaired in this country and probably internationally... There is a distinct possibility that there will be fifteen to twenty law-suits on our hands from coast to coast. It is a very serious thing, sir.15

  Churchill double-checked his legal position before telling his new American lawyer Arthur Leve (whose colleague Louis Levy was under suspension at the time) to hold the line: ‘Peat must realize how extremely critical and dangerous the whole European situation is.’ Leve restricted Churchill’s penalty to $2,000.16

  Churchill finally turned his attention to A History of the English-Speaking Peoples. He dispatched a ‘first tentative and provisional instalment’ to the publisher in mid-August, but Cassell’s chairman Sir Newman Flower judged one chapter and a fragment of a second to be a slim payback for five years of advances.17 Nor did he take kindly to Churchill’s imperious request to be sent six sets of printed proofs by return. ‘I am afraid we are not prepared to put this into type until we have the whole of the MS [manuscript],’ Sir Newman wrote. ‘So far, you have only delivered 30,000 words out of 400,000, and we fail to see how you are going to complete the other 370,000 words by the 31st December 1939, on which date the agreement falls in.’18

  Puzzled, Churchill sent his other publisher Harrap a copy of the letter under ‘Very Private’ cover, asking for help with alternative printing arrangements and some advice on his next move with Sir Newman Flower. ‘These are very unsatisfactory relations for an author to have with his publisher,’ Churchill explained, ‘and it is an entirely new experience for me.’19 Harrap suggested asking Sir Newman’s young son Desmond to lunch at Chartwell, following which an uneasy truce was declared. His father had not intended to be ‘disagreeable’, Desmond explained.

  Churchill kept up a pace of 2,000 words a day, but had only reached the twelfth-century reign of Henry II early in September when he took over Randolph’s duties on the Evening Standard’s ‘Londoner’s Diary’ for a fortnight while he was on military training.

  The launch of the last volume of Marlborough was overshadowed by the sudden crisis in relations between Germany and Czechoslovakia against which Churchill had been warning.20 For some weeks Hitler had supported the claims for greater self-determination of the German-speaking residents of the Sudetenland region of Czechoslovakia. On 7 September a lead article in The Times suggested the Czech government should consider ceding this region to its neighbours, Germany, in order to make Czechoslovakia a more ‘homogenous’ state. Churchill was outraged. Taking time out from writing his History, he urged the foreign secretary Lord Halifax to warn Hitler that any aggression against Czech territory would result in war.

  On 13 September the Czech government declared martial law; two days later Prime Minister Neville Chamber
lain flew to meet Hitler for the first time at the German chancellor’s Berchtesgaden retreat. Churchill told a researcher: ‘It has been a comfort to me in these anxious days to put a thousand years between my thoughts and the twentieth century.’21 He abandoned his History again to travel to Paris to persuade friends in the French cabinet to stand by the Czech president, but without success. On his second visit to Germany within a week, Neville Chamberlain was confronted by a new demand from Hitler that those areas of the Sudetenland region where German-speaking residents were in the majority should be transferred to Germany without any need for a prior plebiscite.

  Chamberlain urged the cabinet to accept Hitler’s new terms on his return, but encountered some resistance, including for the first time from foreign secretary Lord Halifax. On the following day, 27 September, Chamberlain suggested to Hitler that the British, French, German and Italian leaders should hold a further meeting, while questioning during a radio broadcast whether Britain should fight over a quarrel ‘in a faraway country between people of whom we know nothing’.

  On the morning of 28 September Curtis Brown relayed to Churchill an American newspaper’s offer for him to write a war diary for a fee of $1,000 per entry.22 Churchill replied immediately that he did not expect war, a judgement that was vindicated by events in the House of Commons that afternoon. Chamberlain was speaking to a packed chamber when an aide passed him a note. Chamberlain absorbed it in silence before informing the House that Hitler had accepted his request for a third meeting in Germany. The rest of the House rose in acclaim – and the London Stock Exchange rallied sharply – but Churchill, Anthony Eden, Harold Macmillan and Leo Amery stayed in their seats.