No More Champagne: Churchill and his Money
Picador 544pp £25
In January 1898, Winston Churchill returned to Bangalore to troubling news. His mother, Lady Randolph Churchill, had to restructure her finances owing to major debts and needed to take out a £17,000 loan (about £1,700,000 in today’s money). This required Winston’s consent as it meant he would have to leverage his and his younger brother’s inheritance from their late father’s trust to guarantee the loan. Winston reluctantly agreed and wrote his brother a despondent letter on February 16th, 1898 declaring that ‘The only thing that worries me in life is money’.
Winston Churchill’s precarious relationship with his finances remained a major cause of concern for most of his life. Though he created a significant income as a journalist (becoming the world’s highest paid war correspondent for his reporting during the Boer War) and by cobbling together his government payments and bits of inheritance, Churchill’s extravagant tastes, luxurious holidays and bibulous meals quickly depleted his earnings. Churchill adopted this irresponsible spendthrift mentality for most of his life. Whenever he was alerted to a problematic financial situation, his solution was almost always to increase production from his pen and only rarely to curtail his spending. In 1926 (while he was Chancellor of the Exchequer) Churchill was struggling to keep Chartwell, his main residence in Kent, in working order and had to take out emergency bank loans. He realised by that summer that his writing alone would not make the difference and so adopted a short-lived austerity regime during which he instructed Clementine that ‘No more champagne was to be bought’. For a lover of fine wines and crisp Pol Roger, this was an extreme measure in which desperation was only matched by brevity.
It is from this letter that the author borrows the title for his brilliant and compelling study on Churchill and his money. In short, David Lough has written an account of Churchill’s accounts and it is fantastic fun and informative. He has cleverly kept a running conversion formula to help the reader understand the amounts in modern monetary values. But beyond the spectacle of Churchill’s dizzyingly poor relationship with money, the book’s real value can be found in what it reveals about Churchill.
Informed by his background in finance, Lough exposes the reader to completely new elements in Churchill’s thinking, which have remained largely untouched by biographers and historians. Private financial matters can motivate people to do all sorts of things and Churchill was no exception. For instance, while biographers have traditionally ascribed Churchill’s ‘re-ratting’ to the Conservatives as a move of political ambition or his apprehension toward British social upheaval in wake of the First World War, Lough offers a new and compelling argument: ‘Churchill had recently inherited his great-grandmother’s Irish estate, transforming the erstwhile entrepreneur into a propertied landlord for the first time in his life.’
Lough’s approach reveals much about Churchill’s fiscal life, which opens interesting avenues of inquiry. For example, many historians have assumed that in his later life Churchill’s wealth was primarily derived from royalties relating to his writings, without considering the true engine of his financial success, his film rights. Another illuminating aspect of Churchill’s money troubles can be found in his dubious dealings while in office, which, by today’s standards, would be career-ending for any politician. He took cash and shares while he occupied various government offices and in 1922 he received fees for lobbying for oil companies. Though this behaviour may have been a product of the time, his relationship with the taxman was scandalous. As Chancellor of the Exchequer, Churchill exploited tax loopholes and he retired as an author on more than one occasion to avoid paying tax. In 1949 when the Inland Revenue Board considered taxing Churchill on his income as a painter, he insisted that he was only an amateur and never considered painting a profession. Surprisingly, this tactic worked in keeping the taxman at bay, perhaps because not even Inland Revenue could challenge Winston Churchill in 1949.
Arguably, the most important aspect that Lough’s study reveals about Churchill’s personality was his love for taking risks. Churchill’s career as a soldier, politician and war leader is littered with examples of his risk-taking: sometimes wisely, such as his switch to the Liberals in 1904, and sometimes poorly, such as Gallipoli in 1915. With Lough’s scholarship, we can now see that Churchill took numerous, needless risks with his own finances. On his expensive trips to Monte Carlo, he frequently gambled, losing an average of £40,000 a year, and often risked huge sums on the stock market, nearly being wiped out in 1929.
Just as historians have struggled to understand the importance of Churchill’s ‘black dog’ depression and the power of its bite on his motives, now they will have to consider the bite of the gambling bug as well.
A. Warren Dockter is a lecturer at Aberystwyth University and a Fllow of Clare Hall Cambridge. He is the author of Churchill and the Islamic World: Orientalism, Empire and Diplomacy in the Middle East (I.B. Tauris, 2015).