Churchill's Iceman

by Henry Hemming

  The lack of structure and discipline at Malting House was not without problems. Though the children there were brighter than most – the average IQ in 1926 was 131 – a surprising number showed signs of psychological imbalance. Susie Isaacs later described their initial intake as ‘the ten most difficult children in Cambridge’. Her account of 31 October 1924, is typical: ‘B., as on one or two previous occasions, hit me in anger. I tried passive resistance, but he went further, and hit me several times, hard, stinging blows with the open palm, and was gleeful when he thought he had really hurt me and “made me cry”.’ She concluded with studied detachment: ‘The method of remaining passive did not appear the answer.’

  ‘I must say I can’t make out the point of it,’ wrote James Strachey, one of Freud’s first translators, who had married Pyke’s friend Alix Sargant Florence and had a niece and nephew at the school. ‘All that appears to happen is that they’re “allowed to do whatever they like”. But as what they like doing is killing one another, Mrs Isaacs is obliged from time to time to intervene in a sweetly reasonable voice: “Timmy, please do not insert that stick in Stanley’s eye.” There’s one particular boy (age 5) who domineers, and bullies the whole set. His chief enjoyment is spitting. He spat one morning onto Mrs Isaacs’s face. So she said: “I shall not play with you, Philip,” – for Philip is typically his name [Philip was also the name of Strachey’s brother-in-law] – “until you have wiped my face.” As Philip didn’t want Mrs Isaacs to play with him, that lady was obliged to go about the whole morning with the crachat upon her.’ Though Strachey never visited the school, and loathed Susie Isaacs for her sometimes serious manner, his account was not too wide of the mark.

  As well as spitting a great deal, the children would often gang up on one of their classmates and shout ‘funny face’ at them before locking him or her in the henhouse or shutting them out of the school altogether. The victim might change from day to day, but the urge to do this was constant. As well as upsetting the child who had been singled out, this was becoming expensive. The children who were locked out tended to break a window on their way back in. Others had developed a taste for smashing plates when things did not go their way. The school’s Freudian approach ensured that adults could not censure a child if they did this, or indeed if they took too much interest in another’s turds or genitals. The Malting House was rapidly becoming known around Cambridge as a ‘pre-genital brothel’. Pyke and Susie had hoped that if this behaviour was simply ignored it would lose its appeal. They were wrong.

  Towards the end of the first term Pyke’s educational experiment had reached a critical point. Over the past seven weeks valuable insights had been gained into what happens when you give a pack of two-to-four-year-olds almost total freedom. The number of stories and imaginative games they invented shot up. The children had also begun to show the kind of scientific curiosity that Pyke and Susie had predicted. But by now they were in open rebellion against the adults. It was becoming the law of the jungle and for the first time in the short history of Malting House it seemed as though this bold venture had run its course.

  Pyke saw things differently. After all, it was no more than a case of identifying and reformulating the problems they faced: solutions were bound to follow.

  How to Tame a Group of Wild Children

  Pyke began with the question of how to prevent the children from ganging up on each other without explicitly forbidding it, for this would do little to curb the original desire. Rather than ban it, he turned it into more of a game. How? By volunteering himself to be ‘funny face’.

  Over the days that followed Pyke spent many hours locked in the Malting House henhouse as one of the children’s prisoners – a strange echo of his solitary confinement in Berlin.

  It worked. The game lost its sting and when he suggested that those children who had shut him up should take a turn in the henhouse they rapidly lost interest.

  There was also the problem of ‘spitting or excremental talk’. Again it contradicted the school’s principles to punish the children for this, so instead he instructed the staff to withdraw their help as soon as it began, and in some cases they ‘explicitly requested that there be no more such talk, and only one child in the lavatory at a time’. If a game became violent, rather than stand idly by, the adults would immediately start a different game. Pyke also introduced a handful of guidelines: children must be punctual; material had to be put away after use; nobody was to endanger themselves or others.

  These sound like tiny adjustments, none of them commensurate with the crisis at Malting House, but together they worked. Susie noted with approval that ‘the individual aggressiveness of the children has grown much less’ and, several weeks later, that there was a new ‘pleasure in co-operative occupation’.

  Something else changed at Malting House towards the end of that first term. Whether or not any of the children noticed, there was a different chemistry between two of the adults. Just as the school was a testing ground for experimental attitudes and ideas, these two individuals had long believed that marriage was not an expression of exclusive physical ownership and that ‘the sexual act’, to quote one of their Cambridge friends, was really ‘like a kiss’ and ‘merely a demonstration of affection, more violent, more pleasurable but essentially of the same nature’. But neither had yet put this attitude to the test.

  That summer, in Vienna, Frank Ramsey had lost his virginity to ‘a charming and good-natured prostitute’ and had been psychoanalysed by one of Freud’s disciples, Theodor Reik, in the hope of ending his obsession with Margaret Pyke. As Lytton Strachey gossiped to his brother James, Ramsey had left Vienna thinking he was ‘cured of such wishes. On returning and meeting her, however, he was more bowled over than ever, but asked her to go to bed with him – which she declined.’

  Ramsey’s infatuation was now common knowledge around King’s College. Pyke even joked about it with Ramsey’s mother – which Ramsey resented terribly. Maynard Keynes warned Ramsey around this time that the rumours about him and Margaret Pyke could damage his chances of being offered a fellowship at King’s, advice which might have helped drive him into the arms of the undergraduate Lettice Baker.

  Rather amazingly, Baker was then sleeping with Pyke’s brother Richard, still one of Ramsey’s close friends. It seems that this Cambridge prodigy made a habit of falling for women who were sleeping with one of the Pyke brothers. Margaret was at last off the hook, but this gave way to a new complication in her life: her husband and Susie Isaacs had begun to have an affair.

  Pyke had become overwhelmed by the fantasy of having found in Susie the complete modern woman, similar to Margaret but more combative and one who understood the pain of losing a parent at a young age. They were drawn together by the music of their conversation. The psychoanalyst John Rickman described Pyke and Susie in full flight as like ‘watching a fine exhibition of ballroom dancing, the movement of their minds was in such close touch that it seemed as if a single figure moved in the intellectual scene, she skilled in philosophical method followed his sterner logic, he yielded to her more subtle psychological intuition’. The longer this dance went on the closer they became, until their intimacy in conversation felt like an open infidelity. ‘Geoffrey turned more and more to Susie as a confidante,’ Nathan later wrote, ‘as to one who was more important to him than anyone else, as to the woman he had been looking for and hoping for all these years. Susie wasn’t less drawn to him, let us say.’

  They slept together for the first time in late 1924, and while Susie admitted later that ‘she didn’t feel any overpowering longing for intercourse, she was quite ready for it’. By March 1925 the Director and the Principal of Malting House were ‘in full and open love with one another’, with Susie describing her ‘very real love’ for Pyke. Rather than wink at this infidelity, Margaret gave it her ‘blessing and active encouragement’. Nathan, however, remained in the dark for now.

  Sexually it was a disappointment. Pyke later conceded that ‘he had
not been a very satisfactory physical lover’, and if his brother’s novel is anything to go by, we may have some idea why. In The Lives and Deaths of Roland Greer, Richard Pyke described his fictional self being unable to ‘rise to the occasion’ and having ‘secret difficulties’ in ‘sexual matters’. He added that his elder brother ‘understood too well’ these difficulties ‘because they were his own too, though he overleapt them by a tour de force – a method which cannot be imparted’. Either this tour de force could not always be relied upon or he and Susie naturally grew apart: after a year of the affair she ‘decided to go no further’ and by the start of 1926 their relationship was no longer physical.

  Even then, as Nathan, the unlikely chronicler of the affair, recalled, ‘the draw they were exercising on one another was more powerful than ever’. To most observers it seemed as though their liaison had ended amicably and that the school would not suffer, but there was a storm on its way. It would test not only the fragile nature of their relationship but the very existence of the school they had made together.

  By early 1926 the Malting House experiment was in full bloom. Having overcome those initial difficulties it was now winning international plaudits from leading educationalists of the day such as Jean Piaget, who would soon pay an approving visit, as well as Melanie Klein, the psychoanalyst and expert in child psychology. Klein even performed at Malting House one of the first psychoanalyses of a British child on David Pyke, then aged four. Yet they were at cross purposes throughout. David had recently been given an old bus conductor’s tray and was determined to sell Klein a ticket for his bus. She was only interested in finding out whether he had seen his parents having sex, which he might have done, only not with each other.

  As the prestige of Malting House grew, so did Pyke’s stock within Cambridge. The physicist and engineer Lancelot Law Whyte later described him as one of the leading lights of 1920s Cambridge, alongside Sir Ernest Rutherford, Peter Kapitza and E. M. Forster. He was a playful conversationalist, an entertaining bauble on the tree of academic life who ‘looked like an Assyrian king’ and was, if nothing else, a doer in a city full of thinkers. ‘Philosophers have only interpreted the world,’ wrote Marx, ‘the point is to change it.’ Pyke did not just talk over tea on the High Street about the possibility of making a fortune on the stock market – because it looked so easy – or the need to revolutionise education by applying the lessons of Freud. This thirty-three-year-old did these things – and they worked. None of it seemed to be a fluke. His success was the result of his small inheritance, dazzling self-confidence and a capacity for laborious research.

  Pyke taking a break during one of his many Swiss holidays

  By now his Cambridge social circle had expanded beyond undergraduate friends such as Philip Sargant Florence, then on his way to becoming a renowned economic theorist and whose children were at Malting House, or his editor at the Cambridge Magazine, C. K. Ogden. Newer Cambridge friends included the film-maker Ivor Montagu and the couple at the end of the Malting House garden, Phyllis and Maurice Dobb, he a young economist at Trinity College. There was also crystallographer J. D. ‘Sage’ Bernal and his wife Eileen, who had recently become involved in Pyke’s financial operation, as well as J. B. S. Haldane, the legendary biologist who had joined the Malting House board, and his wife Charlotte, well known for her literary salons.

  It is interesting that at least five of these new friends either joined the Communist Party, worked for Soviet intelligence or did both. A decade later there would be nothing remarkable about having so many Cambridge friends who subscribed to dialectical materialism and saw the USSR as a beacon of radiant utopian possibility. But during the mid-1920s it was unusual – in the General Strike of May 1926, in which the Moscow National Bank aided some of the striking miners, almost half of the city’s undergraduates were thought to have been involved in efforts to break the strike.

  Although he had a number of Marxist friends there is no evidence that by 1926 Pyke shared their political views. Since his political epiphany in Berlin he had remained close to the Fabianism of Sidney and Beatrice Webb and Shaw, and had corresponded with all three, but he did not give himself the time to take any of this further. If nothing else, he was ‘intensely distracted’ both by the school and the newfound complexity of those financial dealings on which Malting House depended.

  In the early days Pyke had been making straightforward directional bets on whether the price of a certain metal would rise or fall, guided by his hypothesis about the relationship between copper and tin. As with comedy, the key to this was timing. Generally he got it right but occasionally he lost money. To reduce the scope for error Pyke had concocted a new trading system. He was now making what traders today will call ‘relative value arbitrage trades’ using ‘advance-dated double options’. Even by modern standards this is an exotic trade. At the time it was pioneering. Rather than bet on whether the prices of copper and tin were going up or down, he now predicted the deviation between the two. As he later explained in court, ‘it no longer made any difference whether prices went up or down as long as they did not separate or separate in one direction.’ Compared with his earlier dealings this was ‘immensely less speculative’. He increased his margins accordingly and used some of the new profits to employ a team of researchers in offices off Chancery Lane. This was all going well until he realised that he would soon be facing an enormous bill for income tax.

  Having poured his profits into either the school or increasing his holdings in the metals market, he was unable to pay. He sought the advice of a barrister: D. N. ‘Johnny’ Pritt KC, later described by a Soviet defector as ‘one of the chief recruiting agents for Soviet underground organisations in the UK’. Pritt assured Pyke, in answer to his question, that it was perfectly legal to alter his operation so that he was no longer trading as an individual but through a series of companies. This would turn his taxable income into a capital gain, meaning that there would be less tax to pay. But there was more to this plan. If he set off these gains against losses incurred by buying options on the companies’ shares from the shareholders then he could reduce the money he owed to almost nothing.

  Pyke duly set up two companies, Orcus and Siona (a misspelling of ‘ciona’, a stationary sea creature which sits on the bottom of the ocean and feeds off passing plankton), and began to buy options from his shareholders at exorbitant prices. Whether or not Pritt knew that each of the shareholders was an acquaintance of Pyke by one remove, or an employee, is unclear. The new system worked. Pyke no longer faced a crippling tax bill, while his sway in the metals market continued to grow. Had he settled up with just one of his three brokers on Christmas Day 1926, when he was said to hold a quarter of all tin reserves in Britain, he would have walked away with a trading profit of over £20,000. But he saw no reason to do this.

  Though he never visited the trading ring of the London Metal Exchange he was by now so well known there that he had a nickname, ‘Candlesticks’, after cabling in a trade from the Swiss town of Kandersteg. Even the editor of Metal Bulletin had heard of ‘Candlesticks’ and was ‘certainly impressed by his market activities’. Less impressed, however, was a group of heavyweight American copper producers.

  In October 1926 there was a historic meeting of the world’s most powerful copper magnates. Between them they controlled up to 90 per cent of the global copper supply with mines in Africa, South America and across the United States, yet they did not control the price of copper and, as they resolved at this meeting, that needed to change.

  The United States was entering a period of frenzied financial speculation. With the largest bubble in American finance beginning to form, these copper producers wanted to take steps to protect themselves against price shocks, which were usually caused by the activities of lone speculators. Using the Webb-Pomerene Trade Export Act of 1918, originally designed to boost the American war effort by granting immunity to certain export companies from standard anti-trust regulation, they formed a cartel of historic pr
oportions. Copper Exporters Incorporated (CEI) was later described as ‘the most formal cartel in the twentieth century in American industry’. It was powerful and coordinated and had been formed with the sole aim of stabilising the copper price. The best way to do this was by flushing out speculators like ‘Candlesticks’ in London. First the CEI needed greater control of the market, which would take a little time. Having started out with ambitions to do nothing more than pay for his son’s enlightened education, the scale of Pyke’s success had turned him into a target.

  Just before this copper cartel came into being, Pyke reached a momentous decision. David was now approaching his sixth birthday and in a year or so would need to go to a new school, unless, that was, Malting House could be adapted to accommodate him and other children of his age. Pyke decided to turn the school into an international institute for educational research which could care for children all the way through to university. It had always been in his nature to take ideas to an extreme, and now he would do the same to his groundbreaking school. So he began to spend.

  Pyke appointed Nathan Isaacs as the school’s researcher-at-large on £500 a year, telling him to ‘run away and read and write’ on questions like ‘Why do children ask “why”?’ At enormous expense, he hired stenographers to record every word the children spoke. He also lavished more than £1,000 on advertisements for the school’s first scientific appointee, and arranged for a selection committee made up of Sir Ernest Rutherford, J. B. S. Haldane and Sir Percy Nunn. When the Daily Express heard that a science teacher had been employed by a kindergarten they sent their Crimes Reporter to investigate. This type of prurient interest in the school persuaded Pyke of the need to publicise his work in a sympathetic light.