by David Lough
Luce was not impressed: ‘This business of supporting world figures gets a little beyond me,’ he told his staff. ‘I leave it to you.’8
Longwell at LIFE made another appeal for Houghton Mifflin’s help in paying, but gave up as soon as he heard that Reves would have to be involved in the decision; he was still hesitating about LIFE’s contribution when he heard from Lord Camrose that The New York Times was considering picking up the whole bill itself. The two publications decided to share the cost in their normal syndicate proportions, as they did for each subsequent vacation.
‘Tell our author both Times and ourselves would be delighted if he would have a good holiday in August,’ Longwell cabled Graebner. ‘I would like to keep budget around 8 or 9 thousand dollars if possible.’9
Clementine booked the Hôtel René-Roy in Aix-en-Provence, which quoted 400 francs a day for standard board or 680 francs for ‘the more luxurious menu’. She checked with her husband: ‘One table at the higher rate,’ he decided.10
Before Churchill left for his holiday, Vickers da Costa provided him with a valuation of his investments. Economic controls imposed in the aftermath of war were gradually falling away as the Marshall Plan swung into action to stimulate recovery in Europe. Nevertheless, Churchill had managed to lose £7,000 buying and selling twenty-eight different shares during the first half of 1948. He responded by shaving £25,000 from the size of his shareholdings; his bank balance remained healthy, however, thanks to two more payments from Sir Alexander Korda for the film rights to Savrola and My African Journey.11
The Churchill party travelled to the south of France in a special carriage on Le Train Bleu, the luxury night express train. In Aix-en-Provence, Churchill’s former parliamentary aide Robert Boothby joined them for lunch, as he recalled in his memoirs:
Langoustine mayonnaise, soufflé, a couple of bottles of Champagne on ice, and a bottle of Volnay, topped up with brandy. The bill was then demanded. Unthinkable said the proprietress. It was the greatest honour they had ever had. Perhaps Monsieur Churchill would sign his name in the book. Monsieur Churchill would; and did.12
While the Churchills were in France the last remnant of the Garron Tower inheritance – the lime works and harbour at Carnlough – were sold to the earl of Antrim for £8,000.13 However, Winston and Clementine were more pre-occupied by the changes to their wills made necessary by the sale of Chartwell.
During the war, Churchill’s solicitor Charles Nicholl had persuaded him to sign a new version of his will that confirmed the gift of his papers to Clementine; earmarked the final fifth of his father’s will trust to Mary; and settled Chartwell on Randolph; all his other personal assets going into a trust, from which Clementine would draw the income until she died, when it would be divided among their children.14
Now the main house at Chartwell had gone to the National Trust and Clementine was horrified at her husband’s plan to compensate Randolph by leaving him the farmhouse of Chartwell Farm – Randolph’s ‘propinquity’ to the National Trust, she felt, was bound to become a source of embarrassment. Instead she suggested that Churchill Literary Trust should buy Randolph a small country house elsewhere and that the farms eventually should become Mary’s property, as the Soameses were now living in the farmhouse and Mary was the only one of their children who really appreciated the countryside.
Churchill agreed that Clementine could take Randolph house-hunting well away from Chartwell, but the farms, he insisted, should go to young Winston, rather than Mary. The rest of Churchill’s assets would now go to Clementine in her own right, rather than on a life interest, so that she could take the difficult decisions about how to divide them between their children.15
On their departure from France, the Hôtel René-Roy’s final bill came to 2.2 million francs, but Churchill asked LIFE to transfer 3 million to his account.16 He had lost some money on the way home in Monte Carlo, as explained in a passage of Walter Graebner’s memoir:
Churchill adored gambling and it was Mrs Churchill’s constant worry that he would squander more money at the gaming tables than the family finances could stand. On his return one year from a visit to France... he asked me to come and see him immediately as there was something on his mind. ‘I have a confession to make,’ he said, ‘and I don’t know what I can do about the situation that has been created... I went to the Casino one or two nights, and ended up a little behind. I did very well at first, but then my luck changed. What am I to do about it?’17
LIFE paid up, but later that year Graebner had to kill a reference to the incident that was being planned in TIME magazine: ‘Churchill did not repeat not go to casino and I know from previous discussions that he would be unhappy if casino were mentioned,’ he cabled to New York.18
Bill Deakin had helped in France with the second volume of the The Second World War, a ‘starred final’ version of which reached the printers shortly after the holiday ended. However, so many changes were needed that Graebner found Churchill at a low ebb again during November. He suggested another holiday in the sunshine to Daniel Longwell:
[Churchill] said several times ‘I am not depressed about anything in particular – just depressed.’ He then said he was a ‘little fed up with our book’. I think that what troubles him is that he thinks Cassells, Houghton Mifflin and Reves are making much more on the deal than he is though he ‘is doing most of the work’. Cassell, he calculated, had made about £100,000 from the first edition and he netted only £8,000 from that. He thinks Houghton got a fantastic bargain.19
Henry Luce authorized the expense. ‘Okay Monte Carlo for $5,000,’20 Longwell told Graebner, approving a booking at the Hôtel de Paris, which also housed the city’s casino. Churchill set off with his bank balance comfortably above £60,000, fortified by more compensation payments for his Argentinian railway shares.21 Only his losses at the Chartwell farms, to which he had already transferred £11,750 in cash that year,22 were causing any immediate financial concern.
Meanwhile the Inland Revenue was on the point of deciding whether or not Churchill’s complicated tax scheme to shelter the majority of the income earned by The Second World War was sound. On their decision rested a much greater sum of money than Churchill had lost through the farms. The local tax inspector, a Mr Boarland, had asked to see a copy of Churchill’s contract with The Daily Telegraph and any other ‘relevant’ document, which Anthony Moir took to mean the parallel agreement between the newspaper and Churchill’s Literary Trust. After consulting Churchill Moir decided against volunteering any extra documents, but instead he disclosed to Boarland:
In July 1946, Mr Churchill created a Settlement of cash, a large number of personal records and memoranda covering his life both public and private during the period of approximately 1906 to 1945, papers formerly belonging to Lord Randolph Churchill and a casket containing letters from the First Duke of Marlborough, which are of considerable value and were given to him by the Queen of the Netherlands at the close of the War. Under this Settlement no benefit, whether pecuniary or otherwise was reserved to Mr Churchill and this document is not in his possession or under his control.
Churchill had sold his early copyrights after the war while ‘retired’ as an author, Moir added, but since resuming his writing career on 1 September 1946 Churchill had received twelve payments. Most of them, he contended, were ‘capital moneys’ for the Secret Session Speeches. However, Moir ended his carefully worded letter by offering the tax inspector one small morsel: Odhams Press had paid £500 to reproduce sixteen of Churchill’s paintings in a new version of Painting as a Pastime, which he admitted could possibly be construed as a royalty and therefore subject to tax. ‘If the point is pressed Mr Churchill will submit, without prejudice, to an assessment in respect of this sum,’ he offered.23
There followed a ‘very friendly’ meeting at the tax inspector’s office, during which Moir insisted that Churchill’s prime motive for setting up the trust had naturally been to safeguard these ‘vitally important documents’.24 For mo
re than a month the most senior minds at the Inland Revenue, including the chief inspector of claims (Intelligence Section), pored over Moir’s letter and the documents, but they could find no ‘catch’.25
Churchill’s solicitor was confident of the final outcome and in February all five members of the Inland Revenue Board signed a piece of paper that allowed Boarland to confirm that ‘no liability to Income tax arises under the present law in respect of the £375,000 payable by The Daily Telegraph to the Trustees – either on Mr Churchill or on the trustees.’26
Churchill’s team had won, but the Inland Revenue had not quite finished. ‘I should not imagine in view of the favourable decision on the main contention that their claim to exclude sundry small “pre-commencement” literary earnings is likely to be pressed but, if it is, kindly re-submit,’ ran the Board’s instructions to Boarland.27 They had underestimated Churchill’s aversion to paying tax. Within a month, Boarland forwarded to his head office what its chief inspector described to a technical colleague as ‘this latest attempt to minimize liability’.28
Churchill had accepted a speaking invitation at the Massachusetts Institute of Technology (‘MIT’) in March 1949, shortly after Their Finest Hour, the second volume of his memoirs, began to be serialized in newspapers all over the world. MIT offered to cover his travel costs to Boston, but it blanched on hearing the price of the first-class cabins that Churchill expected on the Queen Elizabeth. At just the right time, the American Automobile Association provided a solution: it offered to sponsor an extra Churchill speech on the trip at a fee of $25,000.29 Churchill felt the sum should be treated as an honorarium and escape tax. Before accepting the invitation, he asked his advisers to confirm his interpretation with the Inland Revenue, but they took a less lofty view of the honorarium and the speech was quietly dropped. Henry Luce stepped in to meet the shortfall. He was still keen to keep TIME-LIFE’s brand associated in the American mind with Churchill, so he authorized Longwell to send a message to Graebner: ‘You may tell [Churchill] that we will take care of the difference somehow.’30
The Inland Revenue became even less co-operative when Painting as a Pastime sold so many copies that Churchill’s initial payment of £500, which Moir had conceded might possibly be construed as taxable, increased by a factor of ten to £5,000.31 Boarland refused to rule out taxing Churchill’s earnings as the professional income of an artist, prompting him to dictate a letter for his solicitor to send to the inspector: ‘Painting has never been considered one of [Churchill’s] professions and he has not sold any pictures in the last twenty-five years. On the other hand his expenses in making the pictures now reproduced in Painting as a Pastime have been very heavy.’32
Boarland beat a retreat on the paintings, but he made a more determined assault on Churchill’s earnings of £3,000 from the publication of Secret Session Speeches: he regarded the sum as taxable and threatened to ‘carry the matter into public litigation’ if Churchill appealed against his ruling and won.33 Deciding not to risk such a public airing of his tax affairs, Churchill again dictated the reply which he wanted Moir to send: ‘Mr Churchill regrets the view taken by the Board of the Inland Revenue which is of course contrary to the professional advice he has received. In particular Mr Churchill regrets the contention of the Board that, when he wrote the Secret Session Speeches, he had the idea “at the back of his mind” that they would “subsequently be published for profit”.’34
By the time he left for Boston in mid-March, Churchill was aware that the third volume of The Second World War would not be ready at the beginning of May, the deadline he had to meet to qualify for his next payment. He warned Michael Berry, then deputizing at The Daily Telegraph for his father, Lord Camrose. He would produce a manuscript by May, Churchill explained, but several months of ‘polishing and improving’ would be needed to bring it up to publication standard. Nevertheless, he wanted an assurance that he would still be paid on time: ‘I am put to great expense by the staff I use, by the printing, and various other charges, and I need the instalment.’35 The assurance was given.
Churchill used the time it took to cross the Atlantic to sketch out the case for a sixth volume of The Second World War. The fourth would reach only the Axis forces’ surrender at Tunis in May 1943; it would be impossible to do justice to the remaining two years of the war in a single volume after that. Certain that his plan would be welcomed, Churchill asked Lord Camrose to find out what terms the syndicate would offer and suggested meeting the local members while in America. Lord Camrose thought it a good plan, but Churchill found a different reaction in New York.
Henry Luce welcomed Churchill by praising him at a dinner for 200 guests given by TIME-LIFE as ‘the greatest war correspondent since Julius Caesar’.36 However Daniel Longwell made it clear privately that LIFE would stick to the letter of its contract: the fifth payment would be for the final volume. He warned that LIFE’s partners would take the same line: ‘They will say quite unanimously there should not be a sixth volume, that five is the limit the public will take, and the final volume should be the grand climax of the entire publishing scheme.’37
At first Laughlin at Houghton Mifflin supported LIFE’s line, but he changed his mind when Churchill visited him in Boston. Houghton Mifflin would pay the same price for a sixth book as for the first five, he told Longwell afterwards: ‘We know of no other author we would rather go to with an advance payment of that size to secure a book for our list the following year.’38 Reves then promised an extra £10,000 for the foreign language rights. ‘It is my strongest conviction that you should write your War memoirs exactly as you think they should be written,’ he told Churchill. Reves was convinced that Cassell would pay, too, producing an extra £50,000 for Churchill, even if LIFE and The New York Times stayed away.39
Churchill’s bank balance still stood at £47,000, thanks to the payment for the third volume,40 so there seemed little need for the extra money. Certainly, the champagne continued to flow at Chartwell: during April and May 1949, Churchill’s staff recorded the consumption of 454 bottles, plus 311 bottles of wine, 58 bottles of brandy, 56 bottles of Black Label whisky, 58 bottles of sherry and 69 bottles of port.41
In the middle of 1949 Churchill decided to follow his father into the world of racing. The family expert, Christopher Soames, warned that a single filly would cost at least £1,000 to buy and £600 a year to train, taking into account the cost of vets, blacksmiths, race entries and jockey’s fees. If he was lucky, Churchill would find himself with a solid investment ‘which should bring you in a small tax-free income, and will always hold its value as a brood-mare’; if he was unlucky, he would ‘lose about £800 on the original investment of £1,000, plus whatever expenses you might have incurred while it is being trained’.42
Clementine’s ‘horror’ at this development was shared by Jo Sturdee, one of Churchill’s secretaries, who warned him in writing against the risk of damage to his ‘great reputation’.43 Within two months, however, Churchill had re-registered his father’s racing colours (pink with chocolate sleeves and cap) and assembled a stable of seven fully-fledged racehorses.
His first win arrived as early as August 1949. It came from Colonist II, a grey which a racing vet Major Anthony Carey Foster had spotted finishing second at a race in France while unfit. Carey Foster had mentioned the horse to the trainer Walter Nightingall, who in turn recommended him to Christopher Soames, who persuaded Churchill to buy him for £1,500 from the exotically named Monsieur Theodore Cozzika.44
Colonist II won two more races in 1949 and six in 1950, a run during which Churchill’s betting stakes on a single race grew from £325 in July to £675 in October.45 By that time Colonist II had won £9,000 of prize money46 and Churchill was telling Clementine: ‘So far all this shows a quite substantial profit and the whole outfit could be sold for two or three times more than we gave for it.’47 One of the sport’s attractions to Churchill was that both prize money and bets escaped taxation: ‘Don’t forget, a thousand pounds made out
of horses is equivalent to twenty thousand in normal business enterprise at today’s rate of taxation,’ he reminded Graebner.48
At the end of the 1950 season Colonist II was valued at up to £20,000 if he retired to stand at stud. Churchill decided to risk a drop in the horse’s value to less than a half by keeping him in training for more demanding races in 1951.49 Colonist II started with two early wins, but faded after coming second in Royal Ascot’s top class Gold Cup field in June; he retired at the end of the season, after thirteen wins. Lord Derby’s racing manager suggested a price tag of £20,000, but Colonist II failed to sell privately before falling under the auctioneer’s hammer for 7,000 guineas at December’s Newmarket sales.50 Despite the disappointment, Churchill commissioned a special portrait of Colonist II to hang alongside his father’s famous winner L’Abbesse de Jouarre.51
LIFE may not have offered any money for a sixth volume of The Second World War, but it was happy to fund another holiday in the summer of 1950. Churchill chose to spend it on the edge of Lake Garda in Italy.52 He had planned to concentrate on the fourth volume, but strong criticism of his draft for the third volume, The Grand Alliance, forced a change of heart. In the eyes of Churchill’s American publishers, the story was lingering for too long on Britain’s Mediterranean battlefields; they were openly impatient for him to reach America’s entry into the war.
Reves sympathized with the American publishers, but put the case more tactfully. He urged Churchill to concentrate on the major political and strategic issues of the conflict and to leave minor events to others. ‘In view of the fact that Roosevelt is dead and Stalin will never publish his documents,’ he told Churchill, ‘you are the only man who can reveal the decisive issues of the war.’53 Now nearly seventy-five years old, Churchill was still absorbing this advice when he suffered a mild stroke at Max Beaverbrook’s villa on the south coast of France and had to be flown home privately.54