Named a Best Biography of the Year by The Wall Street Journal and The Times of London
The fascinating story of Winston Churchill's lifetime of tangled personal finances
Meticulously researched by a senior private banker now turned historian, No More Champagne reveals for the first time the full extent of the iconic British war leader's private struggle to maintain a way of life instilled by his upbringing and expected of his public position.
Lough uses Churchill's own most private records, many never researched before, to chronicle his family's chronic shortage of money, his own extravagance, and his recurring losses from gambling or trading in shares and currencies. Churchill tried to keep himself afloat by borrowing to the hilt, putting off bills, and writing "all over the place"; when all else failed, he had to ask family or friends to come to the rescue. Yet within five years of the war, he had taken advantage of his worldwide celebrity to transform his private fortunes with the same ruthlessness as he waged war, reaching 1945 with today's equivalent of £3 million in the bank. His lucrative war memoirs were still to come.
Throughout the story, Lough highlights the threads of risk, energy, persuasion, and sheer willpower to survive that link Churchill's private and public lives. He shows how constant money pressures often tempted him to short-circuit the ethical standards expected of public figures in his day before usually pulling back to put duty first-except where the taxman was involved.
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About the Author
David Lough studied history at Oxford under Richard Cobb and Theodore Zeldin. After a career in financial markets, he founded a business that advises families on looking after their investments, tax affairs and estates. No More Champagne is his first book.
Read an Excerpt
No More Champagne
Churchill and His Money
By David Lough
PicadorCopyright © 2015 David Lough
All rights reserved.
'Very little money on either side'
The Churchills and Jeromes
Exchange rate: $5 = £1 Inflation multiples (1850): US x 30; UK x 100
It was in August 1873, at an afternoon ball on board the HMS Ariadne, then at anchor off the Isle of Wight for Cowes Week, that two families from very different worlds collided. Lord Randolph Churchill, the younger son of the 7th duke of Marlborough, had been a natural choice on the guest list of the prince and princess of Wales to meet Grand Duke Cesarevitch of Russia and his duchess. More surprising was the inclusion of Mrs Clara Jerome, the American wife of a colourful Wall Street entrepreneur. It was true that she had featured at the Parisian court of Napoleon III, until the self-styled emperor had been driven from the capital three years earlier, but Mrs Jerome's place on the royal guest list probably owed more to a shortage of suitable young females. Staying with her for the season in a rented house at Cowes were her three daughters Clarita, Jeannette and Leonie, the first two over eighteen and therefore eligible to attend.
It was Jeannette, better known as Jennie, who caught the eye of Lord Randolph Churchill across the ship's wardroom that afternoon. She was slim and dark, hinting at her mother's Indian background; he was slight and narrow-shouldered with the pale, almost translucent skin of a typical Churchill male. After one dance together they spent the rest of the afternoon deep in conversation, which came easily to Jennie, who had been educated in New York and Paris, but which startled Lord Randolph, whose six sisters' education had been limited to the attentions of a governess inside the confines of the ducal home at Blenheim Palace, although he himself had read history and law at Oxford.
Over the next few days Jennie persuaded her mother to invite Lord Randolph to dinner twice and they managed two more unsupervised conversations. Before he left Cowes the duke's son proposed marriage and the equally impulsive daughter of Wall Street accepted.
'Mr Jerome is a gentleman who is obliged to live in New York to look after his business. I do not know what it is,' Lord Randolph hastily explained in a letter to his father, on whom he remained wholly reliant for the income he would need in order to marry. 'He is reputed to be very well-off and his daughters, I believe, have very good fortunes, but I do not know anything for certain.' In fact, both families had seen better days. 'Very little money on either side' was the more accurate verdict, some sixty years later, of the couple's first son, Winston Churchill.
Timothy Jerome had set sail for America from the Isle of Wight back in 1710, settling on arrival in Connecticut, before the family later moved up the east coast to the state of New York. Jennie's father Leonard was born in 1818, the fifth of eight sons and one daughter to Isaac Jerome, a doctor and descendant of Timothy's. His elder brothers attended the expensive College of New Jersey in Princeton, but Leonard, whose reputation was as a high-spirited nuisance, had to complete his studies elsewhere after family financial support melted away. He emerged, nevertheless, with high enough marks to join his brother Lawrence on the legal staff of his uncle, Judge Hiram K. Jerome, and each was to marry one of the two Hall sisters, whose parents had died early and left them comfortably off.
Clara's reserve contrasted with Leonard's charm and extroversion, while her family money helped the brothers buy a local newspaper, the Rochester Daily American, which they sold five years later after trebling its circulation. Leonard moved on to a telegraph company in New York, where he shared a home in Brooklyn with another brother, Addison, who persuaded him to change career and join him buying and selling shares on Wall Street. New York still boasted only nineteen millionaires at the time, but the number was clearly set to grow as the American population increased.
After the birth of their first daughter, Leonard put his business career briefly on hold to answer a call from President Fillmore, whom the brothers had supported as a state politician, to take up a consulship to a European city. Trieste, on the Adriatic coast, attracted the European aristocracy at play during the summer and, although Leonard stayed only eighteen months before he insisted on returning to sort out his affairs in New York, it proved long enough to leave Clara with a lifelong fascination for court life.
Their second daughter,* known as 'Jennie', was born in 1854, just before a fall in the share price of the Cleveland and Toledo Railroad Company, of which Leonard was a large shareholder. It was the first real check to his career. Unabashed, the brothers combined with a Maryland financier to start a new stockbroking business, Travers Jerome, exploiting their strong newspaper contacts by entertaining editors to excellent lunches where they planted share tips for publication, having first positioned their own portfolios appropriately. By the late 1850s Leonard was reputed to be worth $10 million on paper, but progress was uneven and after one less successful episode he deemed it wise to retreat with the family for a few months to Paris, where they rented an apartment on the Champs-Elysées and found themselves, as wealthy Americans, fêted at the Imperial Court.
When they returned to New York in 1859 it was to a city that stretched no further north than 23rd Streetand remained the social domain of the 400 descendants of the Dutch settlers who could fit into the ballroom of the former Caroline Schermerhorn, now Mrs William Astor. Excluded from the chosen few, Leonard bought land next to their stronghold on the corner of Madison Avenue and 23rd Street, where he built a French-style mansion in red brick and white marble at a cost of $55,000. Its ballroom may have held a mere 300, but alongside it stood a theatre for 600 in which liveried servants led guests to their seats as Leonard hosted the city's leading musical talent, much of it female.
Leonard Jerome's fortune was to reach its peak during the American Civil War (1861–5), in the course of which he offered strong support to Abraham Lincoln and the North's anti-slavery cause through the pages of The New York Times, where he and the family had built up the largest shareholding of almost 20 per cent. Just as the American business magnate Cornelius Vanderbilt used his position as the government's shipping agent to expand his fortune during the war, Leonard took advantage of coded information passed from the battlefields by his own telegraph company to deal audaciously on the stock market. He had settled enough money on Clara to make her secure, but contemporaries spoke of an almost blind risk-taking, combined with a complete confidence in his own destiny: 'He used to paralyse his friends by the magnitude of his transactions,' wrote his biographer Anita Leslie. 'Clara said she did not think he himself knew how many millions he had made or lost. Too many other interests held his attention.'
By the late 1860s, tiring of her husband's adventures and extra-marital affairs, Clara used her financial independence to remove her daughters from Miss Lucy Green's boarding school on Fifth Avenue, where they had been taught French, and take them back to Paris, this time without their father. Jennie attended a lycée and studied piano to concert standard under a friend of Chopin's, while her mother established her own salon at their home on the Boulevard Malesherbes and reinserted herself at the court of Emperor Napoleon III and the Empress Eugénie.
Soon afterwards her husband's fortunes began to falter in New York, where he suffered a serious theft of valuable bearer bonds from his office, followed by the failure of a new share issue that he had underwritten for the Pacific Mail Steamship Company in which he was the largest shareholder. His losses were said to have halved his fortune. More widespread falls in share prices during 1869 reduced his wealth to little more than the value of his Madison Square mansion, which he let for $25,000 a year to the Union League Club, before leaving to join the family in Paris. He reached the French capital in January 1870, only to be greeted by rioters in the streets protesting against the excesses of the imperial regime. Leonard led his family to temporary sanctuary in Nice, but they were back in Paris – and he in New York – by the summer, when a desperate Napoleon III tried to shore up his crumbling support by declaring war on Prussia. It was a serious miscalculation: within weeks Otto von Bismarck's forces threatened the French capital, forcing Clara and her daughters to catch the last train to Deauville so that they could cross to safety in England.
Leonard arranged a suite of rooms for them all at Brown's Hotel off Piccadilly, but after Paris the family found London damp and polluted. Leonard crossed the Atlantic and took them for the summer of 1871 to enjoy the sea air of the Isle of Wight, where he knew the annual Cowes yachting festival would attract the English and European aristocracy that Clara missed. The expedition was such a success that it was repeated each summer, even after the women had returned to Paris. Leonard joined them in 1872, but a slide in share prices prevented him from leaving New York the following year. A telegram bringing news of the first falls had reached Leonard while he was dining with friends. He waited until the end of the meal before announcing its contents: 'Gentlemen, it is a message in which you are all interested. The bottom has fallen out of stocks and I am a ruined man. But your dinner is paid for and I did not want to disturb you while you were eating it.' Clara and their daughters therefore arrived in Cowes on their own for the season of 1873.
Like the Jeromes', the Churchills' fortune had also been built within a generation, although it took longer to dissipate. Born in 1650, its chief creator John Churchill had grown up in the shadow of deprivation after his father Winston was fined three times the annual income from his small estate, all because as a young captain in the king's army he had fought on the losing side during the English Civil War (1642–51). The experience shaped what his biographer and direct descendant Winston Churchill described as an 'iron parsimony and personal frugality, never relaxed in the blaze of fortune and abundance'.
Following the Restoration in 1660, the sixteen-year-old John Churchill's elder sister managed to secure him an appointment as a page at the court of Charles II's younger brother James, duke of York, a Catholic. Within a year John had shrewdly learned to combine twin incomes from simultaneous court and military service by gaining a commission in the King's Own Company of the First Guards (later the Grenadier Guards). A third stream of earnings (some claim as the most lucrative) came from services provided in the bedroom of the king's former mistress Barbara Villiers; however, these ceased on his marriage to the sixteen-year-old Sarah Jennings, an attendant to the duke's younger daughter Princess Anne. Sarah came without dowry or family connections, but with an astuteness and independence of mind that never left her.
By the time their patron had succeeded his brother on the throne in 1685 as James II and Princess Anne had formed her own court on marriage, the newly ennobled Lord Churchill and his wife employed seven liveried servants at homes in London and the countryside. The smooth progress of their twin careers met its first serious challenge when Prince William of Orange, who was married to the king's elder daughter Mary, raised the standard of Protestant revolt against his Catholic father-in-law, presenting Churchill with a difficult choice. A committed Protestant himself, yet one of the king's most senior military officers, he waited to see which way the wind was blowing before switching allegiance on the battlefield, a manoeuvre that required his wife to escort Princess Anne from London at the same moment, for their safety.
After the Glorious Revolution (1688–9) pragmatism dictated that the victorious new joint monarchs William III and Mary II should offer Churchill an earldom, which he took in the name of Marlborough. They also awarded him the lucrative task of reviewing his fellow officers' fitness to retain their commissions. However, William and Mary never entirely trusted Marlborough, who kept lines open to the former king's exiled supporters in France, and Mary engineered his dismissal from all court and military appointments in 1692.
Marlborough's rehabilitation began after her death two years later, but it was not complete until Princess Anne came to the throne in 1702, when she showered the earl and countess of Marlborough with appointments. The countess earned £6,000 a year from combined positions as groom of the stole, mistress of the robes and keeper of the privy purse, while Marlborough became responsible for equipping and supplying Queen Anne's army as master of the ordnance, a post that no predecessor had left without becoming a great deal richer.
Their joint income, already estimated at £64,000 a year, rose still further when Marlborough was given command of the combined armies of Britain, Holland and some German principalities that were to fight France in the long War of the Spanish Succession (1701–14). Marlborough not only earned a salary of £10,000 a year, but received a commission of 2½ per cent of the payroll of his combined armies; in theory this was intended to fund his headquarters and intelligence staff, but no detailed accounting was required.
Early military success, during which Marlborough outmanoeuvred the French Marshal Boufflers to capture Liège in the Low Countries, brought an offer from the queen of elevation from earl to duke. The countess advised against it, on account of the expense of a ducal lifestyle, but Marlborough accepted, after negotiating a lifetime pension of £5,000 a year from Post Office revenues. Parliament had refused Queen Anne's initial request that the pension should be extended in perpetuity to Churchill's heirs, but changed its mind after a clear military victory against Franco-Bavarian forces at the Battle of Blenheim (13 August 1704) in Bavaria.
The queen marked this success by a grant of land at Woodstock, near Oxford, where Marlborough could build a commemorative palace at public expense. Marlborough continued his series of victories over French commanders at the battles of Ramillies (23 May 1706), Oudenarde (11 July 1708) and Malplaquet (11 September 1709), each of which expanded the list of his spoils from grateful European princes, but none was decisive enough to bring the campaign to an end. Eventually the political tide at home began to turn against proponents of the costly war, with the result that the duke and duchess of Marlborough found themselves mercilessly lampooned by Jonathan Swift and other satirists for 'profiteering' at the public expense.
The queen put a stop to the payment of bills at Blenheim, where construction had already cost £130,000, and parliament went further in 1712 by calling for Marlborough to reimburse more than £400,000 to the public purse. Taking refuge in Europe, where he was widely fêted, the duke carefully cultivated the support of the House of Hanover, to whom the British throne would pass on Queen Anne's death because none of her children had survived childhood. Although his health was too poor for a return to public life, Marlborough returned to London on the day after Anne died, as work resumed on his palace at Blenheim. He finally moved into part of the building three years before his death in 1722.
The dowager duchess had always considered the building a wasteful extravagance, but dutifully used the £50,000 set aside in her husband's will to complete it in his memory. Justifiably nervous that it would prove an expensive liability in the long term, she set about building up the surrounding land to strengthen the finances of the estate while she still remained its trustee and tenant for her remaining years.
Excerpted from No More Champagne by David Lough. Copyright © 2015 David Lough. Excerpted by permission of Picador.
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Table of Contents
Notes to the Reader,
1 'Very little money on either side': The Churchills and Jeromes,
2 'How I long for you to be back with sacks of gold': Spendthrift Parents, 1875–94,
3 'We are damned poor': Distant Army Duty, 1895–9,
4 'Fine sentiments and empty stomachs do not accord': The World's Highest-Paid War Correspondent, 1899–1900,
5 'Needlessly extravagant': Bachelor, Author, MP, 1900–5,
6 No 'rich heiress': Junior Minister and Marriage, 1906–8,
7 'The Pug is décassé': The HMS Enchantress Years, 1909–14,
8 'The clouds are blacker and blacker': The Legacy of War, 1914–18,
9 'It is like floating in a bath of cream': A Timely Train Crash, 1918–21,
10 'Our castle in the air': A Country Seat at Last, 1921–2,
11 'What about the 50,000 quid Cassel gave you?': Out of Office, 1923–4,
12 'No more champagne is to be bought': Chancellor under Pressure, 1925–8,
13 'Friends and former millionaires': Making – and Losing – a New World Fortune, 1928–9,
14 'He is writing all over the place': A Strategy for Survival, 1930–1,
15 'Poor Marlborough has been shunted': Trading Futures, 1932–3,
16 'The work piles up ahead': Summoning More Ghosts, 1934–5,
17 'We can carry on for a year or two more': Films, Columns and Debts, 1935–7,
18 'I shall never forget': Bracken and Partner to the Rescue, 1937–8,
19 'The future opens its jaws upon us': Struggling with History, 1938–9,
20 'All my arrangements depend on this payment': Early Burdens of War, 1939–41,
21 'Taxed to the utmost': Film Turns the Tide, 1942–5,
22 'A most profitable purdah': Minting the Memoirs, 1945–6,
23 'Agreeably impressed': Selling the Memoirs, 1946–8,
24 'The unfolding of time, life and fortune': Racing to the Finish, 1948–50,
25 'An insatiable need for money': Post-war Prime Minister, 1951–5,
26 'I shall lay an egg a year': A Third and Final Retirement, 1955–7,
27 'Good business': Sunset, 1958–65,
About the Author,
Sources and Bibliography,