No More Champagne

by David Lough

  He lunched at the Savoy Grill before he joined the first meeting of the war cabinet. Shortly after France’s declaration of war at 5 p.m., Churchill returned to the Admiralty – to the same desk in the same room that he had used a quarter of a century earlier. Behind the wooden panelling of his room hung the same charts on which he had then followed the tracks of the fleet.

  The Churchills moved back into Admiralty House. They surrendered their Morpeth Mansions lease and closed Chartwell for the duration of the war. One cottage was kept open for family visits, but all of the staff had to leave, except for Kathleen Hill and Grace Hamblin, who moved to London to handle the Churchills’ personal correspondence.*1

  On his first morning in office for ten years Churchill warned the Daily Mirror and Imre Revesz not to expect any more newspaper columns; within a week he had dropped his American broadcasts and News of the World column. It was not as if the First Lord’s salary (still £5,000 a year, as it had been in 1912) meant that he could afford to stop writing, but Churchill remembered the tax advantages of retiring completely as an author, since any fees as yet unpaid would escape the Inland Revenue’s grasp.

  He knew, however, that he would have to find a way to boost his ministerial salary, since two-thirds of it would be swallowed up by tax and the interest on his loans, which still stood at £27,000. Fortunately, Churchill’s ‘retirement’ did not prevent newspapers from paying him to rerun his old articles and books. The Sunday Chronicle offered £50 a week for extracts from The World Crisis,1 to be topped shortly afterwards by Lord Rothermere’s Sunday Dispatch, which bid 60 guineas each for excerpts from My Early Life; together, Churchill calculated, they would bring him in £6,000 a year, more than doubling his salary.

  But if he was to make any headway on reducing his debts, Churchill still needed the £15,000 due on completion of A History of the English-Speaking Peoples. Unfortunately, the manuscript was less finished than he had so recently claimed to Sir Newman Flower. Re-examining it, he came to the conclusion that only a little over half – up to the death of Queen Anne in 1714 – passed muster. The rest needed varying degrees of surgery. The task of carrying this out while officially ‘retired’ as an author and simultaneously serving as First Lord of the Admiralty at a time of war, would challenge even Churchill’s ingenuity.

  He interrupted a flow of memos to fellow ministers and admirals to brief George Young to use ‘the fullest freedom of correction and improvement’2 in reworking the more recent passages of his History. He also asked Bill Deakin, now attached to a Yeomanry regiment, to deal in his spare time with the early nineteenth century. Eddie Marsh was put on standby to proofread the results. Churchill would examine their collective efforts from time to time, before convening a plenary session during November. ‘The matter is so important and the stress here is very great,’ he impressed on Deakin.3

  Shortly afterwards Desmond Flower, Newman’s son, reminded Churchill of a promise he had made in 1937 to produce a special 20,000-word introduction for the parts edition of the History, the first version due to be published. Churchill summoned Young back to the Admiralty to add this extra piece to his brief. ‘Apart from the introduction which I [in reality, G. M. Young] am doing and which will, I trust, soon be accomplished, and a few lacunae which require a paragraph or a page, the book is now finished,’ he reassured his publisher.4

  The last ‘piecing together’ of the History took place at the Admiralty over a weekend in November 1939.5 While his team pored over the final draft, Churchill kept leaving the room to press forward plans to mine the Rhine river or to divert British trawlers to coastal mine-sweeping duties. Marsh finished proofreading in the middle of December, when Churchill paused in his drafting of a paper to the war cabinet (urging the interdiction of Norway’s iron ore supply to Germany), so that he could attach a note to the final manuscript for the publisher: ‘It has been a work of great interest but also of great labour to me to accomplish this task. I regard the delivery of this copy in full readiness for press as the fulfilment of my contract with you.’6

  Flower graciously acknowledged receipt, but when he read the text over Christmas he was dismayed to find it incomplete. The History ended in ‘an abrupt manner’ at President Lincoln’s assassination in 1865, he protested, rather than at the 1930s, as expected.7 Before setting off to France for naval discussions, Churchill promised Flower a 10,000-word epilogue in compensation. Nevertheless, he failed to extract from Flower the all-important cheque for £7,500, on which he had been depending. He needed it to extinguish the overdraft on his bank account, which was now above £7,600.8

  A letter from Flower soon confirmed that the non-arrival of the cheque was no oversight. ‘We cannot regard the contract as having been filled and mature consideration convinces us that such fulfilment could not be brought about by the suggested epilogue,’ he explained.9

  Still in France, Churchill challenged Brendan Bracken to change Flower’s mind. The telephone conversation that followed between Churchill’s fixer and the younger Flower was described by Kathleen Hill as ‘very frank’. Flower finally promised the cheque for the following morning, but only after Bracken had guaranteed that Churchill would ‘round off the history’ with extra words, although ‘no new material could be expected of [him] until June 30, 1940’.10

  Bracken tried to repair relations with Flower after the cheque had arrived: ‘Forgive all my pertinacious telephone calls. You will, I think, understand that as I am Mr Churchill’s honorary man of business, I am anxious to receive the cheque for £7,500, as all my arrangements depend on this payment.’11 Churchill used the money to pay his literary team and meet £2,000 of overdue taxes; nevertheless, by the time he had paid some of his wine merchants’ bills, his overdraft was back above £5,000.12

  Bracken found a young historian, Alan Bullock, to draft the missing chapters and the team reassembled at the Admiralty to examine his work during another late-night session early in April. Bill Deakin recalled the occasion thirty years later:

  Naval signals awaited attention, Admirals tapped impatiently on the door of the First Lord’s room, while on one occasion talk inside ranged round the spreading shadows of the Norman invasion and the figure of Edward the Confessor, who, as Churchill wrote, ‘comes down to us faint, misty, frail’. I can still see the map on the wall, with the dispositions of the British fleet off Norway, and hear the voice of the First Lord as he grappled with his usual insight the strategic position in 1066.13

  War had been declared, but life went on. London’s fashionable restaurants remained open; weekends still brought an exodus to the countryside; and the Financial News’s 30-share index stood higher than it had at the outbreak of war.14 Everything changed on 9 April, when Germany invaded Denmark and British warships entered the Norwegian fjords. There could be no more work on the extra chapters, Churchill told Flower. He left his publisher to sort out the contractual consequences with Bracken,15 while he turned to the debacle of Britain’s Norwegian campaign, with its fateful echoes of the failed Dardanelles campaign in 1915.

  Once again recriminations swirled around Westminster, but this time Churchill emerged unscathed. There was, however, growing dissatisfaction with Chamberlain’s leadership. Encouraged by younger Tories, the opposition Labour Party tabled a motion of censure on the government in the Commons, at the end of which Chamberlain’s majority fell to less than half its normal size.

  Chamberlain knew that a National Coalition government was needed. Not expecting Labour MPs to agree to serve under him, Chamberlain met the most senior of his potential successors, the foreign secretary Lord Halifax, on the morning of Thursday 9 May to offer to serve in a broad-based government of which Halifax would be prime minister.

  According to Halifax’s diary, he expressed all the possible arguments against his appointment, including the difficulty of his leading the country from the House of Lords. His reticence may have reflected an instinct that Churchill was the more suitable wartime prime minister; and that Halifax could ac
t as a more effective restraint against Churchill’s impulsiveness if he was subordinate to Churchill, rather than nominally in control.

  At a quarter past four in the afternoon, Chamberlain met both Halifax and Churchill, accompanied by the Conservative chief whip David Margesson. Chamberlain recapitulated his position, adding that he had made up his mind to resign because he expected the Labour leader and his deputy, Clement Attlee and Arthur Greenwood, to refuse to join a National Coalition which Chamberlain led. He therefore expected to recommend to George VI either Halifax or Churchill as his successor.

  There are a number of differing accounts of what followed: Churchill’s version tells of ‘a talk about the situation in general’, without any firm decisions made.16 He places the meeting that sealed his succession as taking place on the morning of Friday 10 May, but his account was written seven years after the event. Those accounts which were committed to paper nearer the time all agree that the question of Chamberlain’s successor was decided by the meeting on the afternoon of Thursday 9 May. Among them is a note written by Lord Camrose, the owner of The Daily Telegraph, whom Chamberlain briefed at six o’clock that evening. Ever a journalist, Camrose made a contemporaneous note of the outcome:

  [Halifax] had said he would prefer not to be sent for as he felt the position would be too difficult and troublesome for him. He (Neville) would therefore advise the King to send for Winston. The latter [Churchill] had made it a condition that he [Chamberlain] should remain in the Cabinet and be the Leader of the House. Winston would be the Prime Minister and also Minister of Defence.17

  On the following morning, 10 May 1940, Hitler launched a sudden armoured attack through Belgium and Holland towards northern France. Chamberlain hesitated over whether he should still resign but cabinet colleagues made it clear that there could be no turning back. By evening the king had asked Churchill to form a government. Over the following two days Churchill constructed a coalition ministry in which each of the major politicial parties – Conservative, Labour and Liberal – was represented.

  ‘Seldom can a Prime Minister have taken office with the Establishment... so dubious of the choice and so prepared to find its doubts so justified,’ wrote one of Downing Street’s private secretaries, Jock Colville.18

  Within a week, the French prime minister Paul Reynaud had told Churchill that France’s battle against Hitler was lost. German forces had successfully advanced into northern France, cutting off large numbers of French and British troops, who were left stranded on the French coast. The race was now on to evacuate them.

  During this critical period, all that could be done by others for Churchill was, according to a young military aide, Ian Jacob: ‘The whole of his energies were concentrated on this fight. Little or no effort had to be diverted to handling private business or to the machinery of living.’19 Kathleen Hill proved herself capable of handling most of Churchill’s literary negotiations, keeping him closely informed as he requested. If he or she thought that additional weight was needed, they brought in Brendan Bracken, who was now Churchill’s parliamentary private secretary, to assist.

  A large part of Britain’s professional army was successfully evacuated from the beaches of Dunkirk in early June. However, Churchill was deeply immersed by the fate of France when Brendan Bracken had to ask for his personal intervention in the difficulties caused by the postponement of A History of the English-Speaking Peoples.

  Cassell & Co. had agreed in principle to pay most of Churchill’s outstanding advance, holding only £1,000 back against the book’s completion after the war. The quid pro quo conceded by Bracken had been Cassell’s right to publish immediately a compilation of Churchill’s wartime speeches, a prize now made much more valuable by his elevation to the premiership. Sir Newman Flower wanted a watertight legal agreement which left no room for later argument about Churchill’s royalties. Distracted by events across the Channel, Churchill agreed to forego his customary fixed advance. In exchange Cassell was to transfer immediately £2,500 of the remaining History payments to Churchill’s bank.20

  Churchill’s salary as prime minister might have doubled to £10,000, but nine-tenths of it disappeared in tax payments; the remainder did not even meet the interest payments on his loans. Churchill knew that he faced large tax payments and interest bills at the end of June, but he had no means of paying them.

  He came to the conclusion that his finances would never add up now that he could no longer supplement his salary by writing. Shuttling back and forth across the Channel in a last-bid attempt to encourage the French government to fight on, he asked for a special statement of his current account from Lloyds Bank, which showed an overdraft of £5,602 on 18 June.21 Churchill had twelve days to find the money to pay his interest bill. He gave the statement to Brendan Bracken and asked him to arrange yet another private rescue.

  Bracken called again on his business partner, Sir Henry Strakosch, who had responded to Churchill so generously two years earlier without demanding anything in return. Once again Sir Henry wrote out a cheque for £5,000, this time to Bracken himself in order to help disguise the identity of its true beneficiary. Bracken duly endorsed the cheque to Churchill, whose bank account it reached on 21 June, the day on which the Battle of France ended and the French government made it known that they wished to negotiate an armistice with Germany. Cassell’s cheque arrived at Lloyds Bank on the same day, making it possible for the prime minister to indulge in a flurry of bill-paying to wine merchants, shirt-makers and watch-repairers.

  Churchill concentrated on marshalling defences against the invasion of Britain that was widely expected, but one cloud still hung over his finances. Since January he had left unpaid a bill for almost £1,000 from Harrap’s printers. The firm had been pressed into printing History’s many sets of corrected author’s proofs after Cassell had refused to indulge Churchill’s expensive method of writing. He had expected Cassell to relent and pay the bill on the book’s publication. Now that the book had been postponed until after the war, this was clearly not going to happen.

  By July, as battle was joined with the Luftwaffe over England’s skies, the bill had found its way into Brendan Bracken’s in-tray. Misunderstandings abounded during the autumn between Bracken and George Harrap, representing the printers, until Harrap left a meeting at Downing Street in November convinced that the prime minister was at last about to pay the full amount outstanding. He was mistaken: it was a smaller cheque that Bracken instructed Kathleen Hill to put in front of Churchill to sign. ‘You break a man’s heart,’ Walter Harrap told Bracken. ‘We have just been blitzed out of our home so have mercy, my lord.’22 There was none, a fact that the Harraps would not forget when the prime minister tried to cancel their contract for his next book before the war was out.

  As the Battle of Britain raged in the skies early in September, Geoffrey Mason of Lloyds Banks alerted Mrs Hill to an important court case for authors and their tax:*2 it confirmed that an outright sale of a copyright for a lump sum, rather than royalties, could be treated as a ‘capital’ transaction, thereby escaping all taxation. Mason did not wish to disturb the prime minister at this time, but he wondered whether any of Churchill’s newspaper contracts since the outbreak of war might qualify.

  Despite the pressures of war, Churchill always had time for news about reducing his tax bill. He asked to meet Mason as soon as possible and focussed on his deal with the Sunday Dispatch: although the newspaper was paying him a fee for each extract used (normally the classic sign of a royalty) there was one factor which might help. ‘I gathered from him that the matter was arranged verbally or possibly by letter and that no formal contract was entered into,’ Mason confided to Mrs Hill. He began to assemble a case to put to the Inland Revenue.23

  By then, a different literary problem was exercising Churchill: on 6 September Thornton Butterworth’s publishing business collapsed. It owed Churchill almost £1,000 and six of his early copyrights (including My Early Life and The World Crisis) fell into the hands of
a receiver.*3 Churchill’s former secretary Violet Pearman returned from sick leave to document the missing royalties. She worked until the first half of October in Downing Street while the German Luftwaffe began its nighttime bomb attacks on London, known as the Blitz. On 14 October, the day that she finished, a bomb blew out the windows of 10 Downing Street, scattering papers inside.

  Meanwhile Bracken looked for a friendly publisher who might buy the copyrights from the receiver, since Churchill had made it clear that he did not see why he should part with cash to do so. Bracken approached Lord Southwood, the owner of Odhams Press, as well as his own old firm, Eyre & Spottiswoode. Southwood was one of a growing number of publishers who had already expressed an interest in any future prime ministerial war memoirs, the groundwork for which Churchill had laid by instructing his private office to amass bundles of his official directives each month, carefully labelling them as ‘Personal Minutes’ in order to establish a claim to their ownership.*4

  Butterworth, Flower and Emery Reves*5 had each lodged approaches for the memoirs before Lord Southwood offered £40,000 on behalf of a syndicate, that included America’s Houghton Mifflin, and he appeared to hint that more money might be available.24 Bracken hoped that Southwood might divert some of his funds towards purchasing the old copyrights. However, he failed to do so before two bids for Butterworth’s business landed on the receiver’s desk during January 1941. The first was friendly, from Bracken’s old firm of Eyre & Spottiswoode, and excluded Churchill’s copyrights; the second was (from Churchill’s viewpoint) a less welcome attempt by Butterworth to repurchase his business with the help of a friend, complete with Churchill’s old copyrights.