by David Lough
Churchill was still in hospital when Lloyd George resigned and Bonar Law formed a minority Conservative government, before calling a general election. Churchill dictated his campaign manifesto from bed in a London nursing home. He sent Clementine north to Dundee with their six-week-old daughter to start campaigning until he was well enough to join her; meanwhile he tried to revise his funding plans for Chartwell.
The plan to borrow from the marriage settlement and to use book royalties was dropped. Instead, he would sell some investments and borrow a larger amount from his father’s trust, where he expected that Jack would prove a more compliant trustee than his cousin. ‘I propose to purchase it out of the Trust Fund under Lord Randolph Churchill’s Will, but up to the present I have not been, through illness and other preoccupations, [able] to make the arrangements I desired,’ he explained to Bernau, asking the bank for a smaller, bridging loan of £4,500.52
Churchill’s doctor allowed him to join Clementine for the last days of the general election campaign, but in disadvantaged Dundee the political ground had shifted to the left and they faced noisy crowds. A 15,000 majority evaporated in the face of co-operation between his Labour and Prohibitionist opponents, who defeated both Churchill and his fellow Liberal candidate in the two-member constituency – Churchill came fourth in the poll. Nationally, the Conservatives won a clear majority and the Labour Party increased its vote to four million. Churchill found himself with a new country home, but ‘without an office, without a seat, without a party and without an appendix’.53
*1 In the Churchills’ private correspondence, Clementine often took on the persona of a cat (Churchill of a pig).
*2 The estate to which Clementine referred was the Garron Tower. She included a drawing corresponding closely to the west wing that the Churchills would add to Chartwell, at great cost, when they finally bought it.
*3 Pelfre is an Old French word for money of questionable source.
*4 Formerly Sir Max Aitken.
*5 William Vestey, Joseph Robinson and John Drughorn, respectively. The honours tariff was supposed to stand at £10,000 for a knighthood, £30,000 for a baronetcy and from £50,000 upwards for a peerage. The Order of the British Empire was introduced to fill a gap below £5,000.
*6 The post-war treaty of Sèvres had reduced Turkey’s size and established a ‘Neutral Zone of the Straits’ on each side of the Dardanelles and Bosphorus straits and of the sea of Marmaris. The Allies dealt with a puppet government under the sultan in Constantinople; however, Mustafa Kemal, the hero of Gallipoli, set up a rival Turkish national government whose forces soon threatened the limited Allied forces policing the neutral zone.
11
‘What about the 50,000 quid Cassel gave you?’
Out of Office, 1923–4
Exchange rate $5 = £1; (1923) francs 80 = £1
Inflation multiples: US x 14; UK x 50
EXHAUSTED BY FIVE years in power, at the end of 1922 Churchill followed the advice given to him by one of his former advisers at the Colonial Office, Colonel T. E. Lawrence: ‘Rest a little – six months perhaps. There is that book of memoirs*1 to be made not merely worth £30,000, but of permanent value.’1 Making plans for a spell in the south of France with Clementine, he arranged an extra £2,000 of overdraft to pay their staff while they were away, let Sussex Square and rented a car and a villa near Cannes.2
To help fund the visit Churchill took out a large ‘bear’ position against the French franc, betting that it would weaken over the months they were there. Jack tried to explain the risks, but Churchill was confident of his analysis: in contrast to Britain’s much heavier use of taxation, France had financed its war effort almost entirely through borrowing, so was now saddled with a public debt almost twice the size of its gross national product. In addition, hopes were fading of substantial German reparation payments.
Churchill made three short visits home to deal with building works at Chartwell. Within a fortnight of buying the house (and disregarding more experienced candidates) he had appointed the thirty-four-year-old Philip Tilden as his architect, a decision made in haste and repented at leisure. Tilden belonged to a set of fashionable young artists and writers in London, but had spent the war on a Dartmoor farm, where he met the daughter of the wealthy art historian Sir Martin Conway. Sir Martin asked Tilden to oversee the restoration of his family seat,*2 before introducing him to Sir Louis Mallet, Britain’s wartime ambassador in Constantinople. Sir Louis taught Tilden the use of tempera paint for interior decoration and in turn introduced Sir Philip Sassoon, who gave Tilden the task of completing Port Lympne, the grandiose home on the Romney marshes that he had started before the war. Tilden installed a Moorish courtyard at Port Lympne, complete with green marble floor and white marble pillars, a domed octagonal library and a staircase flanked by columns of blue and mauve, all of which clearly appealed to Churchill, a frequent visitor, although an appalled Lady Honor Guinness described it as resembling a Spanish brothel.3
Tilden’s other notable credential was that he had just built a home for Lloyd George in Surrey, reputedly funded by Lloyd George’s and Churchill’s mutual friend, George Riddell, owner of the News of the World.4 Whatever the route to his appointment, Tilden relished the challenge of Chartwell, which he described in his memoirs as:
A dreary house perched on the edge of the hillside, very close to the road, but banked on its western side by a cascade of full-grown rhododendrons... So embowering were the giant trees, so encroaching was the verdure that the red bricks of the house were slimed with green... only the kernel of the old manor, floored and raftered with solid oak, had withstood the ravages of wet; the rest was weary of its own ugliness so that the walls ran with moisture, and creeping fungus tracked down the cracks and crevices.5
Tilden soon discovered that Churchill wanted to be much more closely involved in the project than Lloyd George had been. Accepting the normal architects’ fee scale,*3 Churchill explained that he and his wife wished to have larger bedrooms, new bathrooms and kitchen, a library, a large study and a room for entertaining. However, they had not agreed any detailed plan or estimate of costs before Tilden pressed for an early decision on the addition of a south-facing wing, which would not only provide the extra rooms but create the effect of turning the main frontage of the house away from the road towards its majestic views of the Kentish Weald below.6
Architect and client began to set a pattern of piecemeal arrangements without any master scheme: Tilden engaged brothers Alec and Harold Brown as principal builders, while Churchill engaged his own local joiner, William Wallace, whom he directed himself on smaller jobs in order to save money. Proper plans only arrived just before the Churchills left for France: the new wing was to be ready by the end of March 1923, the rest of the house by August. Tilden expected to exceed Churchill’s target cost of £8,000 by only £500.
In France Churchill concentrated on finishing the first two volumes of The World Crisis and on his investments by day, the casino by night. His publisher had become impatient at the manuscript’s delays. He had bid aggressively back in 1920, Thornton Butterworth explained, because he had been trying to win his publishing spurs at the time: ‘The éclat of publishing such a book as yours was then of such moment to me that I was willing to offer terms which could, in the most favourable circumstances, only cover my outlay, but short of this, would inevitably entail a loss.’7
Churchill, however, was more concerned by Curtis Brown’s failure to sell the American newspaper rights at all, let alone for the price he had forecast to his bankers: ‘We have been hoping to make two or three thousand from this source,’ he reported back to Clementine late in January from his temporary London base, The Ritz Hotel.8
Extracts from The World Crisis did start to appear in The Times in February 1923, but Churchill found himself forced on the defensive when they led to questions in Parliament and the Tory home secretary William Bridgeman referred in a speech to politicians enriching themselves using information gained t
hrough their public duties. In a long letter to the new prime minister Bonar Law, Churchill argued that many other politicians and soldiers had already published quotations from official documents, and it was unfair to expect a minister who held responsibility for such matters to be the only person prevented from doing so. He added in a postscript:
The contracts on which my book is based were made before a word of it was written and leave me entirely free as to what is published. There is no obligation on me to publish any official document, and I derive no financial advantage from doing so. Whether the book succeeds or fails and whatever its contents, I am equally secured.9
No longer a minister and freed from any concerns about conflicts of interest, Churchill relished his return to the daily excitement of the world’s stock markets. ‘I am wondering whether you have got rid of the London & Rhod[esian],’ he wrote to his brother Jack. ‘There seems to be a good many transactions in them at 5/10½. Do exactly what you think fit. 6/- is better than 5/10... Why has Rezende jumped so much? A whole pound in a month? What about Courtaulds. I thought perhaps you could have nipped out at 66/-.’ He pointed out that the French franc had weakened from 63 to 77 against sterling over the six weeks since he had laid his bet:
Here again I leave it entirely to you. If there is a steady gradual fall I should hold on. If there is a sudden drop of four or five points it might be well to get out and come back in again for the recovery... If there is a slow recovery, I should hope you could get at not worse than 68. I am strongly of the opinion that the Rühr business*4 will turn out ill for France.10
Success with speculation against the French franc made it tempting to try the Deutschmark: ‘What about selling a bear in marks?’ he asked Jack. ‘France has got them by the balls. Write me a proposition; or if it is urgent sell £2,000 for the end of April. Act as you think fit.’11 He spent time at Jack’s office on a visit at the end of January, ‘settling up a lot of business here and reconsidering most of my investments’, then returned to France, where he started giving the trading orders himself: ‘I should like you to sell the Coats and buy me another 1,000 City Lights. For this purpose you might take the balance from the February franc money wh[ich] perhaps you can discount for me, as Vickers suggested... Wd you advise my getting another 500 Mexican Eagles? If so sell enough of the Imps*5 (there is a good profit on them) to cover the purchase.’12
Days later he was disconcerted to read in The Times of Cox & Co.’s sudden collapse and rescue by Lloyds Bank. ‘It makes me shiver to think what we may have escaped,’ he wrote immediately to Jack. ‘Fancy if they had impounded or embezzled my overdraft! It is disconcerting to see how uncertain the ground is under one’s feet.’13 He might have been even more concerned had he known that a report commissioned by Lloyds revealed errors in almost a quarter of Cox & Co.’s investment accounts, including three of Churchill’s holdings.14
Weakened by its clients’ financial difficulties during the war, Cox & Co. had compounded its problem by expensively rebuilding its offices in Pall Mall and Gracechurch Street. When rumours of its difficulties surfaced during the summer of 1918, the bank had drawn on its strong political connections to ward off the Bank of England’s inquiries.15 The sale of its French arm in 1921 and a review of its Indian activities in 1922 signalled continuing problems. The end came suddenly in February 1923 when the Bank of England engineered an emergency rescue by Lloyds Bank, whose general manager insisted, for the record, that Lloyds acted only ‘through a sense of public duty, and with marked lack of enthusiasm’.16
Churchill sympathized with his bank manager, but William Bernau made light of the change: ‘As far as our customers are concerned, the only difference there will be is the further security of Lloyds’ enormous funds. The same men will attend to them and the same facilities will be given to them. You can always write to me and look to me to carry on exactly as in the past.’17
Churchill’s night-time activities in France centred on the Casino de Cannes and proved to be expensive. On 4 January he was up 25,000 francs, thanks to ‘playing quite low’, as he told Jack. The next day he still claimed to be ahead. Victor Cazalet recorded: ‘Winston has taken to gambling with great earnestness. He plays twice daily and is now 20,000 up after a month’s play. He does not play very high.’18 Churchill’s bank account records twenty-nine cash withdrawals at the casino during his stay, starting at 5,000 francs each, but mounting to 10,000 francs and finally to 20,000 francs by the time he left; in all, he withdrew 164,000 francs, the equivalent of £2,350.19 Churchill made only one withdrawal of £300 elsewhere,*6 so perhaps the casino was the most convenient place to draw cash for everyday expenses. However, his own records of his spending in Cannes show an average of £75 a week, implying approximately £1,000 for his stay of three months; this leaves his casino losses at more than £1,500.20
Churchill’s gambling was ‘a source of deep anxiety’ to Clementine. As their daughter Mary recalled: ‘To her it was a senseless, almost wicked waste of money, and yet it was her fate in life to be surrounded by those who were drawn to it: her mother, her brother, her sister and, now, her husband were all, to varying degrees, gamblers.’21
The Churchills returned to London in time for the launch of the first volume of The World Crisis. Beforehand, Butterworth tried to reduce the author’s advance, because the book had overrun in length. ‘Let me put it this way,’ he explained. ‘If you placed a contract for twelve 20” guns for a battleship and subsequently decided to have 25” guns, you would not expect the original contract to stand.’ Churchill batted away the suggestion and pointed to Butterworth’s own strong sales predictions: 30,000–40,000 in Britain and 15,000 in America.
Publisher and author were to be disappointed. After four months, British sales of The World Crisis barely topped 10,000 copies.22 Fortunately, Churchill had already persuaded his publishers to pay for a third volume, albeit on reduced terms.
Churchill had asked The Times for another £2,500 for the serialization rights, but the newspaper was not convinced. ‘You will forgive me... in being quite frank in expressing the view that the sum of £2,500 you mention seems rather high in the face of what we have already paid, considering that when the negotiations were opened we thought we were to get the whole of your War memoirs,’ came the reply, suggesting a reduced fee of £2,000.23 As usual, Churchill suggested they split the difference.
The extra £250 counted because the bills for building work at Chartwell had started to arrive. Alarm bells ought to have begun ringing when Tilden’s January account used a final cost of £12,000, not the £8,500 expected, to calculate his fee, but Churchill kept paying promptly until March, when the kitchen ceiling was found to be only nine feet high. ‘Some other plans will have to be made or the cook will be unable to carry on under such conditions,’ Churchill insisted in his first serious quarrel with the architect.24 By July he had already paid £8,000, but Tilden had still to produce an estimate for the new south wing on which work had not yet started. ‘I was hoping... that a sum of £1,500 would have completed the new wing, but my not very satisfactory interview with the builders yesterday... has disappointed me in this,’25 Tilden confessed in August. Churchill used a figure of £2,000 for the wing in hurried calculations on the back of Tilden’s letter to see whether he could afford to go ahead. Reluctantly he did so, calculating that the final cost had now risen to £11,700, excluding Tilden’s fees. A week later, when the solution to the problem of the kitchen ceiling turned out to be another extra wing, it had risen to almost £13,000.26
In July 1923 Churchill suffered the indignity of having his finances publicly aired in court. Lord Alfred Douglas, the notorious son of the marquess of Queensbury and erstwhile lover of Oscar Wilde, had brought a libel suit against The Morning Post, which had accused Douglas of ‘vile insults against the Jews’ in his anti-Semitic magazine Plain English. Douglas claimed that Churchill and a ‘clique of rich Jews’ had conspired to enrich themselves after the Battle of Jutland in 1916. He maintained that t
hese Jewish financiers (among them the late Sir Ernest Cassel, who had died in 1921) had bought shares heavily after sharp price falls in New York, when the press initially presented the battle as a serious British defeat. Douglas claimed that they had then sold these shares when prices rose sharply after Churchill, having been briefed by the Admiralty, drafted a public statement giving a more favourable outcome of the battle.
At the trial in July The Morning Post’s barrister put it to Douglas that he had written in relation to Churchill:
It is true that by most subtle means and by never allowing him more than a pony ahead, this ambitious and brilliant man, short of money and eager for power, was trapped by the Jews. After the Jutland business his house was furnished for him by Sir Ernest Cassel.
He asked whether Douglas had meant to imply that Churchill was financially indebted to the Jews?
‘Yes, certainly,’ Douglas replied.
‘Who were the Jews in whose clutches he was?’
‘Chiefly Cassel.’
Asked for his evidence, Douglas quoted a London surgeon Sir Alfred Fripp, who had told him that ‘Cassel had given Mr Churchill £40,000 in one cheque’. However, Sir Ernest Cassel’s former private secretary W. D. Geddes refuted the claim, testifying that Sir Ernest had neither bought nor sold any shares for months either side of the battle.27
The jury found that The Morning Post had technically committed a libel but awarded Douglas token damages of a farthing. After instructing a barrister to keep a watching brief on his behalf, Churchill was landed with a legal bill of £182.28