by David Lough
In Britain a growing number of bankers had realized that the nation’s war-damaged economy could no longer support a pre-war exchange rate of $4 to the pound. The storm broke in September 1949, when the chancellor, Sir Stafford Cripps, devalued Britain’s currency by almost a third against the United States dollar.55 Each pound became worth only $2.80. The public perception grew that the Labour government’s stewardship of Britain’s post-war economy was failing.
From this point onwards, Churchill’s publishers exerted greater pressure on him to finish The Second World War before a general election, which might see him returned to office. Still recovering at home from his stroke, Churchill responded to Longwell in a reflective mood. Their joint enterprise faced ‘astonishing uncertainties’ in ‘these gloomy and baffling years’, he wrote. If ‘the Socialists’ won the election that he expected in early 1950, he would probably retire and complete the book, but the consequences of a Conservative victory were left unspoken. ‘We can but await the unfolding of time, life and fortune!’ he concluded.56
By the time Parliament re-assembled in October, Churchill had recovered physically and rekindled his appetite for Westminster politics. He managed only brief bouts of work on the fourth volume of The Second World War in the autumn, while he still revised its predecessor, The Grand Alliance. Another writing holiday was planned at Christmas, but in November Churchill began to doubt again whether he could really complete the task.57 ‘Keep adequate staff together. Somebody would have to be found to write it and also do what is necessary to polish vol. 4,’ he noted after re-examining his contract and discussing with Lord Camrose whether Duff Cooper was a possible replacement.58
Meanwhile, the devaluation of the pound was causing Lord Camrose a different dilemma. The Daily Telegraph’s remaining payments from Churchill’s American publishers would now be worth an extra third in pounds, but nothing in any of the contracts contemplated devaluation, let alone suggested that the newspaper should hand over the extra pounds to Churchill or his trustees. Privately, Lord Camrose indicated that he was willing to pay, but he needed his hand forced by Churchill if The Daily Telegraph was to be allowed to claim tax relief. Charles Graham-Dixon KC was called on to act as a formal arbitrator in the supposed dispute and duly awarded the extra amounts to Churchill and his trustees.59
Devaluation also brought interest from America in the commercial use of Churchill’s paintings, which he had so far only licensed to the Soho Gallery in London. The Hall brothers of Kansas, Joyce and Raymond, relayed an offer of $5,000 a year to use five Churchill pictures annually for five years on the face of their Christmas cards.60 Anthony Moir explained to the Halls the inequities of the British income tax system, as seen by Churchill, and they changed their offer to a single capital sum of $25,000, to last for three years. Moir thought that they might increase to $30,000,61 but Churchill was less sure, cabling from France: ‘Authorize you to try for thirty but do not lose contract. Pray act accordingly.’62 Eventually the Halls raised their bid to $37,500,63 earning Joyce Hall and his family a visit to Chartwell the following July. Moir warned Churchill that Hall was an ‘unusual type for an American, very quiet and you will probably find very shy’,64 but they became good friends until Churchill’s death.
To settle the tax treatment of the Hall Brothers’ payment, Moir arranged a quick meeting with Boarland the tax inspector, whom he knew was on the point of retiring. Boarland agreed that the Hall payment should be treated as a capital receipt, thereby earning himself a visit to Chartwell. He found the Hall Brothers’ Christmas cards hanging in the house. ‘I hear they have had a terrific success, selling over two million,’ Churchill told the accompanying Moir. ‘It is most important to me that this contract should be maintained.’65
By Christmas 1949 the Literary Trust had collected £173,500 in its bank. It was due to receive two more payments for the later volumes of The Second World War in May 1950 and 1951, but Moir had advised the trustees to keep a large reserve for death duties in case Churchill died before 31 July 1951, the fifth anniversary of his gift.
Churchill felt that the trustees’ first decision to distribute only £35,000 to his children was much too cautious. They could expect £380,000 in their coffers by May 1951, so they should be investing much more – or buying his Chartwell farms.66 Moir politely pointed out that the trustees might not find it an attractive prospect to invest in farmland which was still producing losses of almost £9,000 a year.67 Nevertheless Clementine was careful to consult her husband before the next meeting, at which the trustees promised Randolph an income of £1,500 a year, and Sarah a lump sum of £10,000 to buy a London house with a studio for her new photographer husband.68
Meanwhile, Churchill’s surplus in his own bank account had disappeared during 1949. The £60,000 with which he had started the year had turned into an overdraft by its end, largely because he had spent a net £50,000 buying shares.69 Fortunately he ‘earned’ £80,000 in the 1949/50 tax year and had managed to shield all but £5,000 of it from tax. (He claimed almost half as capital receipts and deducted legitimate expenses incurred as an author or MP from the rest.)70
It was equally fortunate that LIFE and The New York Times continued to pay for Churchill’s twice-yearly holidays. For the New Year of 1950 he chose the island of Madeira, at which he had briefly stopped fifty-one years earlier while travelling to and from the Boer War. Aided by Bill Deakin and Sir Henry Pownall, Churchill completed seventeen chapters of the fourth volume of The Second World War, to be called The Hinge of Fate, before news reached Madeira on 11 January that Clement Attlee had called a general election to be held on 23 February. The Second World War had to be put on hold again while Churchill returned to Britain by flying boat to join the campaign trail as leader of the Conservative opposition.
A month later the Conservative Party narrowly failed to dislodge Attlee’s Labour government, which won 315 seats, compared to the opposition parties’ combined tally of 307 (the Conservatives won 298 seats, the Liberals 9). It was a close enough result for talk of Churchill’s retirement to be stilled and for his publishers to conclude that his time in which to finish The Second World War would be limited.
Nevertheless Churchill was confident The Hinge of Fate would be in good enough shape to meet the publishers’ May 1950 deadline and to justify their payment. He was barely able to work on it before Parliament rose for Easter and, after a fortnight of furious writing during the holiday, he confessed to Clementine he was left feeling ‘weighed down’.71 The US publishers were equally unhappy because Daniel Longwell calculated only a quarter of its text was original writing.72 Reves echoed their concerns and called Churchill’s attention to a sharp fall-off in American sales, as much as 40 per cent down between the first volume and the third.73 ‘All your publishers are unanimous in pointing out the one and only cause of this reaction,’ he wrote candidly. ‘An overdose of documents, and too many details of military operations.’74
Churchill promised to make amendments when he had time, but a postscript to his reply, dictated but not sent, betrayed his deeper feelings: ‘What is a miracle is what I have managed to produce in all the circumstances, and I am very glad that everyone has done so well out of it.’75
Churchill planned to return to The Hinge of Fate in September, during another holiday to be funded by TIME-LIFE in Biarritz. However, the Americans were starting to call the tune, as in the latter stages of the war itself. Laughlin at Houghton Mifflin decided that the only way to reverse the slide in sales was to launch the fourth volume in time for America’s Christmas market. He lobbied the Book of the Month Club for a December selection, which would require his own firm to publish in November, the newspapers early in October and therefore Churchill to complete his manuscript by the end of August. Desmond Flower, now in day-to-day charge at Cassell, was appalled at the rush. ‘I consider... the sweeping aside of all considerations of accuracy and the author’s wishes for the sake of a Book Club are to be deplored,’ he told Churchill,76 but Laughlin wou
ld extend his deadline only to 11 September.
The timetable became an even greater challenge when North Korean forces invaded South Korea late in June. Parliament’s summer recess was delayed to debate Britain’s response and Churchill was forced to cancel his writing holiday. ‘I have had to give up my holiday and cannot even squeeze a tube,’ Churchill told his cousin Oswald Frewen on return. ‘Volume IV is a worse tyrant than Attlee [who had kept Parliament in session].’77
In addition to the outbreak of the Korean War, British printers went on strike and a vital manuscript for the American edition of The Hinge of Fate disappeared in the transatlantic post. Reves complained that he had had to employ a staff of twenty, cutting and pasting stencilled sheets around the clock for three days, to make more than a thousand corrections to a version delivered three weeks earlier.78
The US State Department demanded last-minute deletions on security grounds, but extracts from The Hinge of Fate began running as planned on 10 October. On that day General MacArthur launched an amphibious landing behind North Korean lines. The coincidence gave the fourth volume of The Second World War a special resonance. The New York Times described the new conflict as a continuation of ‘the same old fight for freedom and the democratic way of life that Churchill led’.79
25
‘An insatiable need for money’
Post-war Prime Minister, 1951–5
Exchange rates: $2.80 = £1; francs 1,000 = £1
Inflation multiples: US x 9; UK x 25
THROUGHOUT NOVEMBER 1950 the pressure on Churchill’s diary remained heavy. He briefed Prime Minister Attlee on the secret wartime accords reached with the Americans on use of the atom bomb; he led the Opposition attack in the House of Commons on the government’s housing and foreign policy records; and he dealt with a stream of visitors and invitations from around the world.
Meanwhile, the question of a sixth volume of The Second World War remained unresolved. Emery Reves told Churchill that his Scandinavian publishers ‘categorically’ refused to pay anything extra for a sixth volume. But Churchill dismissed as ‘quite impossible’1 the suggestion that the fifth volume should end with Germany’s surrender, and then he could write a separate book about the war’s aftermath. Instead, Churchill dictated a synopsis for the sixth volume, before flying off for another Christmas writing holiday in Marrakech, again at the expense of LIFE and The New York Times.
When not painting, he worked at first on ‘stringing together’ documents and adding ‘introductions and tail pieces’ for this sixth volume, as he described the process to Clementine. ‘Volume VI, though not yet a “literary masterpiece” at which we must always aim, is nevertheless an important commercial property,’ he told her on Christmas Day.2 He turned his attention back to the still incomplete volume five, Closing the Ring, only when Bill Deakin arrived to help: time was limited now and syndicate members no longer prepared research for the ‘Master’ to turn into his own prose; they drafted whole passages in the Churchillian style.
The writing party stayed in Marrakech until Parliament resumed on 23 January 1951. LIFE’s Walter Graebner expressed his relief to Daniel Longwell that the $8,000 hotel bill had come to ‘less than I expected’, but there was the usual sting in the tail: Churchill had chartered a plane to and from Marrakech at a cost of £2,000. ‘Because of the political and military situation he thought he had to have a plane standing to rush him back to London in an emergency,’ Graebner explained, asking Longwell to sanction payment. The wording of his request bore all the hallmarks of Churchill’s own dictation: ‘While he would like to have us pay the bill, and would be most grateful if we did, he does not want us to assume that this is a charge automatically to be borne by us.’3
This time, Longwell had reached his limit. ‘I do think that this plane charge is excessive,’ he told The New York Times, suggesting that they pay only the cost of a normal commercial flight. General Adler must have agreed, because Churchill’s bank account records that a month later he paid just over half the cost himself.4
By Easter 1951 there were clear signs that the days of the Labour government were numbered. Its majority of votes in the House of Commons was only eight; two of its most senior figures, Sir Stafford Cripps and Ernest Bevin, had been forced by ill health to retire; and Prime Minister Attlee himself spent Easter in hospital as a result of illness.
Churchill was so close to becoming a peacetime prime minister that he worried at the risk of political embarrassment from the way the Literary Trust invested its surplus funds. Brendan Bracken had searched for assets that would escape high rates of death duty if Churchill died before the fifth anniversary of the trust’s formation and had agreed a price of under £20,000 for the trust to buy 5,000 acres of the Biel estate in East Lothian, Scotland.
The value of the land was depressed by the number of sitting tenants, but would rise as these tenants died. So far as he could, Bracken was careful to hide the identity of Churchill’s trust as the buyer. However, when the Biel estate’s agent disclosed Churchill’s name to reassure anxious tenants, The Scotsman carried a paragraph on the story. Having laid low for a fortnight, the trustees were about to sign on 6 April when the Evening Standard picked up the story in London. ‘Every effort I made to persuade him [Churchill] that he was magnifying a small and transient matter was answered by peerless invective,’ Bracken lamented to the newspaper’s owner, Lord Beaverbrook. ‘The reply was worse. “Do you want to drag my [sic] down in my last year?”’ Bracken had ‘sighed as a Trustee but obeyed as a friend’.5
Over Parliament’s Easter recess in April 1951 Churchill and Deakin turned back to the fifth volume of The Second World War to meet the usual May deadline for a payment on its delivery. Neither LIFE nor The New York Times was legally bound to make its payment until the sixth volume was ready, but Churchill asked for at least a part-payment on delivery of the fifth volume, ‘for personal reasons which include fact that he needs the money to run his huge establishment’, Graebner explained.6 His message persuaded Daniel Longwell and General Adler to make a long-delayed trip to Britain to explain their position: there would be no payment at all until the last book was ready, although both agreed that they would add up to $25,000 each to that payment as a gesture of goodwill.7
Churchill invited the two men to Chartwell, postponing any business talk until after a typically generous Sunday lunch. He then wrong-footed his visitors by producing ‘almost finished’ proofs, not just for the fifth but the sixth volume as well. Adler made notes of the conversation the following morning:
He then stated emphatically that, since the sixth volume was well along, we had nothing to worry about and that in the event of his death it could be easily completed. Therefore he would expect full payment less withholding of a ‘token’ amount at the time of the delivery of Volume V, which would occur no later than this present week. The token amount... he felt should be in the neighbourhood of one fifth of the total amount still due.
There was more to come from the master of negotiation, as Adler noted:
Most adroitly Mr Churchill then reverted to the possibility of an additional payment to be made only after the publication of Volume VI. He reiterated that we owed him nothing for Volume VI and that his association with Americans generally and with ourselves specifically, had confirmed a lifelong impression over our sense of fair-play. If, therefore, we felt disposed to pay him if still alive an additional honorarium of whatever amount we choose, it would be appreciated. If he were not alive, he was confident that such an honorarium into the Trust, or to Mrs Churchill, as a testimonial on our part to himself and his memoirs, would be equally appreciated.
Churchill brushed aside the Americans’ offer of an extra $50,000 to fund more holidays, because it would be taxed. ‘In concluding the conference,’ Adler recorded, ‘he explained most patiently, though I thought I could detect a twinkle in his eye, that he had no right to make any arrangements because he was working for Lord Camrose and any final decision on the matters we
had been discussing would have to be concluded by “Bill”.’8
Lord Camrose, it turned out, had received no warning of Churchill’s proposal. Two days later, after reading the draft, the two men offered an immediate payment of $150,000, with only $80,000 held back until delivery of the sixth volume, expected on 31 July.9 Longwell was left to explain their capitulation to a sceptical TIME-LIFE president in New York:
As you know, I came over here determined not to pay anything until we had V and VI in hand. Adler, however, wishes to be a little more generous; and since we have always dictated terms to the Times, I thought it tactful to go along with him... The Old Man refuses any further expenses – although I estimate there will probably be one more trip before VI is finished.10
Three months later the Literary Trust reached its fifth anniversary and thereby became exempt from death duty on Churchill’s death: the duty could have been as high as 80 per cent.11 ‘Camrose came the other night to celebrate the five years consummation of our Literary Trust gift,’ Churchill told Clementine. ‘Randolph and Christopher were there too and all passed off jubilantly... This of course is the most important thing that could happen to our affairs, and relieves me of much anxiety on your account.’12
All the trust’s funds could now be given either to his children and grandchildren or invested. According to Mary, her mother became ‘ever ready to recommend to her fellow trustees that a child should be helped with some basic domestic improvement such as a new kitchen floor, or a service lift, or a modern boiler, or perhaps just a wonderful windfall towards furnishing, curtaining and carpeting our home-sweet-homes’.13