Churchill and His Money

That is the subtitle, the proper title of David Lough’s new book is No More Champagne.  I had not known the extent of the story here, namely that Churchill had appalling standards for money management and exercised extremely poor judgment over most of his adult life.  Here is one bit from the opening:

…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 — a rentier, as his wife Clementine put it.

To her intense disappointment, Churchill consumed the entire inheritance within a decade — by underestimating the cost of converting his new country home at Chartwell, by gambling more than he ever let on and by losing heavily in the Wall Street Crash of 1929…

In fact Churchill resigned from the Conservative front bench in the 1930s so he could earn more money as a writer and to some extent make up for these losses; that was one reason why he developed such a vivid writing style.  He ended up borrowing about $3.75 million in current dollars.  And there is this:

…during the decade, he gambled heavily enough on his holidays to lose an average of £40,000 each year in today’s money.

I enjoyed this sentence from the book:

Churchill was conscious that as chancellor of the exchequer his financial habits would have to change.

And this:

After the war, when taxes on income reached an eye-watering 97.5 per cent, Churchill rarely considered any business proposition unless his advisers assured him that he could present it to the Inland Revenue as a capital receipt, which would escape tax, rather than as income.

During the war, Churchill in fact challenged tax rulings from Inland Revenue on his various filings, and typically the rulings were in his favor.  Over time, Inland Revenue stopped bothering his claims and assessments.  Churchill had ongoing skirmishes with the tax collectors for over forty years and, believe it or not, he won most of them.

Recommended, an interesting book.  The topic of politicians with money problems could indeed use more study.


Winston Churchill inherited the aristocratic tastes of his ancestor John Churchill, but not his opportunities for graft. The first Duke of Marlborough was allowed to skim 2.5% of his soldier's pay during the War of the Spanish Succession, which more or less paid for Blenheim Palace.

Winston Churchill tried to maintain his 19-bedroom house, Chartwell, and his much put-upon staff of 25 upon his journalistic earnings. In 1938, Churchill put Chartwell up for sale to meet his debts, but Sir Henry Strakosch secretly gave him the value of the house.

My impression of the inside of Blenheim Palace was, "Wow, this would be a lot of stuff to have to dust."

But the outside ... well, I wouldn't turn down the four square miles of Romantic landscaping by Capability Brown.

So, Churchill was inept when it comes to money management, but had rich friends to bail him out? That's another piece of evidence that Marco Rubio is indeed, as per Ross Douthat, today's Churchill! (

Not entirely.
The publishing deals he negotiated for his History of the Second World War made him a fortune (tens of millions in today's money) and ensured financial security for his family.

Never paid his tailor, though (a regrettable habit of the upper classes):

Churchill was an amazingly vivid and readable journalist. I recently reread his book "Great Contemporaries," a collection of his highly paid 1930s newspaper articles on famous people he'd known (and he knew everybody). It's hard to think of anybody in recent years that well-connected with that quality of prose style. He really earned all that money he made off his writing in the 1930s, in contrast to today's politicians who generally give the impression that their memoirs are being published as part of a genteel payoff.

Of course, Churchill spent even more than he could earn off journalism.

According to Thomas Piketty, the rich automatically get richer because, you see, r is greater than g. So inevitably we’ll be back to the world of Jane Austen, where poor Elizabeth Bennett can only get rich by marrying Mr. Darcy.

For example, Winston Churchill was born in 1874 in Blenheim Palace, the 300,000-square-foot monument that John and Sarah Churchill, the first Duke and Duchess of Marlborough, erected to themselves in Oxfordshire in the early 1700s.

Now, that’s inequality.

Extravagances like the stately homes of England made economic sense before the 19th century because the relative wages of servants and construction workers mostly fell from 1500 to 1800 as the supply of English workers slowly recovered in size from the Black Death of the 1340s.

But, outside of economic theory, the rich have often tended to get poorer, especially when they spend more than they make. It’s a common theme in English literature (Evelyn Waugh’s A Handful of Dust) and television (Downton Abbey). For instance, by the time of Winston Churchill’s birth in 1874, the English ultra-rich weren’t getting richer.

One way to get a sense of inequality in different eras is to look at lists of luxury artifacts by date created. For example, giant country houses in England required low construction wages to build and low servant wages to keep up. There are numerous long lists of the stately homes of England, but here’s a short one of the ten that make up the Treasure Houses marketing consortium, including Blenheim, Castle Howard (a.k.a. Brideshead), Chatsworth, and Leeds Castle.

The latest date I can find for any of them for a major expansion is 1823. Most seem to go back to the Whig grandee era of the late 17th and early 18th centuries. That fits with research showing that English inequality in standard of living stopped increasing after about 1820.

The long agricultural depression of 1873-1896 meant the great houses of England began falling apart. Wings had to be shut as servants found higher paying jobs in factories. Repairs could not be paid for.

The usual solutions were to first auction off the art collection, then marry American heiresses, as in Downton Abbey, where Countess Cora, played by Elizabeth McGovern, is from the Chicago Levinsons. Winston’s mother Jenny was from the Jeromes of Wall Street.

The most famous English-American union of the era was the loveless marriage of 1895, between Churchill’s cousin, the 9th Duke of Marlborough, and the beautiful Consuelo Vanderbilt, the New York railroad heiress, whose suffragette mother was ravenous for a title for her obedient daughter. The Duke received $2.5 million from his new American father-in-law, which sufficed to refurbish Blenheim.

Did The Winston ever release his tax returns? There's a bombshell in there, I tell ya.

It'll be fun seeing Trump refuse to do this if he gets nominated.

Niall Furguson in his excellent book "The Cash Nexus" has a chapter on conflicts of interest with politicians...let me search my HD...OK, found it, "The Silverbridge Symptom", sub-chapter "The Political Economy of Sleaze", has this:

"But is modern politics especially venal? Suppose it was revealed that the British prime minister had taken a decision which had caused shares of a par­ ticular company to rise by 25 per cent. Such things are far from unknown. But then suppose it turned out that the prime minister personally owned shares in that firm with a market value before the decision of £17 million. As a direct result of his action, his shares had increased in value by £7.5 mil­ lion. It is hard to believe that even the popular Mr Blair would survive such a scandal. It was in fact William Ewart Gladstone who in late 1875 acquired £45,000 (nominal) of the Ottoman Egyptian Tribute loan of 1871 at a price of just 38 per cent of par (£17,100). As the editor of his diaries revealed, he had added a further £5,000 (nominal) by 1878 (the year of the Congress of Berlin); and in 1879 bought a further £15,000 of the 1854 Ottoman loan, which was also secured on the Egyptian Tribute. By 1882, these bonds accounted for no less than 37 per cent of his entire portfolio (£51,500 nom­ inal). Even before the British military occupation of Egypt in 1882—which he himself ordered—these proved a good investment: the price of the 1871 bonds rose from 38 to 57 in the summer of that year. The British takeover brought the prime minister still greater profits, however: by December, the price of 1871 bonds had risen to 82—a total overall capital gain of nearly £20,000 on his initial investment in 1875. 1 5 2 Assuming a 25 per cent rise in the value of his total holdings of Egyptian-Ottoman bonds in the second half of 1882, Gladstone personally made £12,785 from the decision to occupy Egypt. In today's prices, that amounts to at least half a million pounds. Allowing for growth as well as inflation, the present-day equivalent of Glad­ stone's gain from the invasion would indeed be £7.5 million. The belief that modern-day politicians are more corrupt than in the past is almost universal. The 1997 British election campaign was dominated, and in some respects won, by allegations of "sleaze" directed against the Con­ servatives by all the opposition parties. By Victorian standards, however, British politicians are remarkably scrupulous in separating their public role and their private interests. "

Thread Hijack: chess is a weird game. Here is a variation of a draw I just played, where supposedly White is much better; the PC claims a pawn better! But it's not at all clear why White is much better (the isolated pawn on e6 is not that weak). Any chess aficionados care to comment? I promise I won't turn into E. Harding and do this often.

Computer vs Ray

1. d4 d5 2. c4 e6 3. Nc3 Nf6 4. Bg5 Be7 5. e3 h6 6. Bxf6 Bxf6 7. Nh3 c6 8. Nf4
O-O 9. Be2 dxc4 10. Bxc4 e5 11. dxe5 Qxd1+ 12. Rxd1 Bxe5 13. Ng6 Bxc3+ 14. bxc3 Re8 15. Ne5 Be6 16. Bxe6 fxe6 17. Rb1 Re7 18. Ke2 Na6 19. Rhd1 Rc8 {And Fritz claims White is better by at least a pawn despite material equality. Unreal.}

So very lonely.

So very bitter.

Cheney's Haliburton shares seemed to have been swept under the rug pretty quickly. I wonder how much his options increased in value as a result of all the contracts they were handed for Iraq reconstruction, etc. He covered himself effectively enough by promising that all additional value would go to charity (, but it's hard to see it as being very clean when the move amounted to massive profits for basically everyone in his network. Favours tending to get repaid and all...

As per your comment on Blair not being able to get away with such activities, I highly doubt the British would ever have tolerated such a thing.

I agree that it's better than it was 100 or 200 years ago, but I'm doubtful that it's better than it was 10 or 20 years ago.

'Cheney’s Haliburton shares seemed to have been swept under the rug pretty quickly.'

Along with this - 'Sept. 14, 2003: On NBC's Meet the Press, Cheney said, "And since I left Halliburton to become George Bush's vice president, I've severed all my ties with the company [Halliburton], gotten rid of all my financial interest. I have no financial interest in Halliburton of any kind and haven't had, now, for over three years." But the vice president conveniently forgot to mention that he continues to receive from the company deferred salary of over $150,000 per year while maintaining 433,333 shares of unexercised stock options.'

The man was truly what one would expect from someone who started his White House associations in Nixon's administration.

Though I'm sure that in a GMU faculty that included a law professor which continued to press the case that insider trading was no crime, it would be possible to find someone to explain the difference between what used to be quaintly called bribery, and what in our times is simply called deferred salary (salary sounding a bit more respectable than compensation, obviously).

How many other corporations had the capability of doing what Halliburton was tasked to do?

How many companies could have not done what should not have been done?

If you actually want to rebuild a country with a view to its ability to stand on its feet, you take the long view and hire local contractors. Presumably if the Iraqis built it once, they could have built it again.

Filling the country with foreign contractors was always a pretty good sign that Bush, Cheney and friends had less than altruistic intentions.

Maybe Halliburton paid Saddam to agitate enough to get a war started and then managed to step into the feed trough with both front feet. It is a fact that if there wasn't money to be made there wouldn't be any wars, including the American Revolution, so it's probably correct to blame Halliburton for the whole mess. But they have allies, Boeing, Lockheed-Martin, Honeywell, Raytheon, BAE, etc., and the military establishment itself. Halliburton is a good poster boy but it's just one player in the game.

"As per your comment on Blair not being able to get away with such activities": if only. Blair got away with having assets in a "blind trust" while he and his wife instructed the trustees what they were to invest in. Blind, my arse. (N.B. Note that both Blair and his moll were lawyers.) I had assumed that the nadir of British PMs would be Heath-and-Wilson, and then up popped Blair to prove me a starry-eyed optimist.

During the war, Churchill in fact challenged tax rulings from Inland Revenue on his various filings, and typically the rulings were in his favor. Over time, Inland Revenue stopped bothering his claims and assessments. Churchill had ongoing skirmishes with the tax collectors for over forty years and, believe it or not, he won most of them.

I can believe it. He probably just wore them down over time with the litigation and complaints, to the point where they'd be spending more money trying to get him into proper compliance than they'd be getting back in tax revenue.

It's surprising, at all, that the tax authorities would give up on going after a politician and instead go after someone with less influence.


Ex high ranking politician uses friends, influence, and intimidation to extract rents, film at 11!

20th Century British politicians tended to quite honest by both global and British historical standards.

Tony Blair has taken a lot of criticism (e.g., from his former friend thriller writer Robert Harris in "The Ghostwriter") for moving in the American direction of post-hoc payoffs.

The British system up past the 18th century was that top servants of the crown were expected to vastly enrich themselves: it was seen as encouraging initiative. It was considered quite strange when Burke in about the 1780s turned down the traditional graft that came with a position. Burke's attempt in 1788 to impeach Warren Hastings of the British East India Company for doing what came naturally in India was fairly novel. It took maybe another century for this idea to become standard practice.

A word that comes to mind when reflecting upon the long history of Her Majesty's Government is "piratical." British statesmen were expected to be daring, and, if successful, were rewarded lavishly.

The process was summarised thus: "Get on, get honest, get honors"

It's largely been shoved down the memory hole that Churchill was bailed out between the wars by financiers of significantly Jewish descent such as Sir Ernest Cassel and Sir Henry Strakosch. That was a trope of Nazi propaganda during WWII that happened to be true:

I truly doubt that his Jewish donors had much influence on Churchill's views, but saving him from financial ruin certainly helped his credibility, so that was a very wise investment.

In The Atlantic, Deborah Cohen writes in her review of this book:

"The most controversial of Churchill’s associations, both at the time and since, was with bankers and businessmen of Jewish origin, among them Sir Ernest Cassel and Sir Henry Strakosch. Early in Churchill’s career, Cassel paid to furnish the library in Churchill’s new house; after the First World War, he engaged in subterfuge to take a costly real-estate blunder off Churchill’s hands, claiming falsely that Churchill had acquired the property on his behalf. It was the Austrian-born Strakosch who kept Churchill from bankruptcy in 1938 and again in 1940, when the shirtmaker demanded his fee. The Nazis liked to claim that Churchill was in the pocket of Jewish financiers, a charge that the Holocaust denier David Irving has since contemptibly repeated. Lough, a banker himself, who doggedly pursues the ins and outs of Churchill’s finances in No More Champagne, argues that Strakosch sought nothing in return for his payments—and received nothing, save an invitation to membership in the dining society to which Churchill belonged. “There was no other reward.” ... Nor did Churchill give special favors to Cassel, though as contemporary money-grubbing politicians discover, the appearance of impropriety can prove damaging on its own. During Churchill’s 1923 campaign for reelection to Parliament, socialists hectored him: “What about the 50,000 quid Cassel gave you?”

"Positions can be bought or influenced, of course, but as in the case of Churchill, big money can also flow to a political figure simply because he or she is already backing the cause the donor supports. Strakosch was willing to help Churchill not because he saw a personal gain in the arrangement but because he thought him the only politician in Europe capable of standing up to Hitler."

I imagine Haim Saban feels the same way about his donations to the Clintons and Paul Singer and Norman Branfman about their donations to Marco Rubio: they are carrying on the tradition that helped Churchill beat Hitler.

Right, but Churchill's profligate father had a similar relationship with wealthy Jews, so its still possibly that some of Churchill's positions were just a sort of cynical keeping up the family business.

Randolph Churchill was a protege of Disraeli, who used his Rothschild's connections for one of the most spectacular and controversial coups of his career:

"Disraeli had passed near Suez in his tour of the Middle East in his youth, and on taking office, recognising the British interest in the canal as a gateway to India, he sent the Liberal MP Nathan Rothschild to Paris to enquire about buying de Lesseps's shares.[185] On 14 November 1875, the editor of the Pall Mall Gazette, Frederick Greenwood, learned from London banker Henry Oppenheim that the Khedive was seeking to sell his shares in the Suez Canal Company to a French firm. Greenwood quickly told Lord Derby, the Foreign Secretary, who notified Disraeli. The Prime Minister moved immediately to secure the shares. On 23 November, the Khedive offered to sell the shares for 100,000,000 francs.[188] Rather than seek the aid of the Bank of England, Disraeli asked Lionel de Rothschild to loan funds. Rothschild did so and controversially took a commission on the deal. The banker's capital was at risk as Parliament could have refused to ratify the transaction.[189] The contract for purchase was signed at Cairo on 25 November and the shares deposited at the British consulate the following day.[188]"

In general, the influence of Jewish wealth on history (e.g., the Rothschilds or the South African diamond and gold tycoons) is a topic that 21st Century people feel very uncomfortable thinking about. The plain facts sound too much like a conspiracy theory.

A few neocon-aligned historians like Niall Ferguson and, to a lesser extent, Paul Johnson have the confidence and connections to pull it off. A few Jewish journalists, such as Edward Jay Epstein, who wrote a spectacular book on DeBeers, love a good story enough to follow it up. And the Jewish ethnic press (e.g., The Forward) is fascinated by this history.

But most gentiles have largely forgotten anything they might once have known. It's safer that way. You can't get in trouble for knowing what you don't know.

Somehow it's practically a banned topic, or some would wish to have it so, to discuss any matter of Jewish influence anywhere. Given what a tight bunch Jews tend to be, both for purposes of marriage and business networking, and often with regard to uncritical and unwavering support for the modern Zionist project, the reality that Jews are over-represented in finance and banking relative to their share of the population cannot be without effect.

And in so saying, many of these very same individuals would label me an anti-semite. Are we not allowed to speak of the reality of influence? I mean, OBVIOUSLY they do not pull all strings, but OBVIOUSLY they DO have some strings to pull, outsized relative to their share in the population. If not, then how could it be that one can be labelled a racist for the mere act of relating such an observation?

Here's where the anti-semitism comes in...what exactly does 'strings to pull' mean here? What nefarious schemes are those filthy vermin concocting? Yes it's obvious that there's certain professions Jews often work in: finance, entertainment, law. What of it? Nearly every motel in the US is owned by someone named Patel. A lot of cops and bartenders are Irish. Are the Jewish bankers meeting up to figure out how to screw over gentiles? Jews do that stuff because they grow up with role models in their families who do that stuff, and maybe get a foot in the door that way. Same as any other family helping out their kind. Noticing some professions have some groups over represented isn't objectionable....implying sinister dealings is.

I truly doubt that his Jewish donors had much influence on Churchill’s views

Watched "Winston Churchill: Walking with Destiny". The documentary began by stating it was funded by the Simon Wiesenthal Center. That's strange, I thought. Why would they fund something like that? It turns out that Churchill's father had several Jewish friends. When his father died, those Jews became Churchill's mentors, and helped Churchill get elected to his first office in Manchester. During WWII President Roosevelt wanted Churchill to sign the Atlantic Charter, which guaranteed a nation's inhabitants the right to choose their form of government. Churchill balked because it would allow the Arabs of Palestine to expel the Jews or prevent their immigration. He said "I am strongly wedded to the Zionist policy."

Churchill was a frontman for jewish-zionist interests, he pushed for War with Germany when the real enemy was the Soviet Union but many jews saw Communism as their project.

Yes, Churchill was such a tool of the Zionists that his government actively tried to restrict Jewish emigration to British Palestine during the war. Occam's Razor says British policy was formed by British national interests: Churchill opposed the Nazis because they had the air and sea power to not just challenge the empire but pose an existential threat to the country and he opposed Jewish emigration to Palestine to appease the Arab population and preserve its influence and authority there.

Yes, Churchill was such a tool of the Zionists that his government actively tried to restrict Jewish emigration to British Palestine during the war.

That may be the case but the documentary “Winston Churchill: Walking with Destiny”, funded by the Simon Wiesenthal Center, thinks that Winston Churchill was directly responsible for the (re)-creation of the state of Israel. The documentary states it over and over.

This puts in new context that famous aphorism 'Gentlemen, we have run out of money, now we have to think.'

"The topic of politicians with money problems could indeed use more study."

The topic of countries with money problems could indeed use more study.

“The topic of politicians with money problems could indeed use more study.”

So is Tyler trolling Trump or Rubio with this one? I think MR essentially endorsed Obama over McCain, who was a much more mainstream candidate than Trump/Rubio/Cruz. Sure, Sarah Palin was crazier than Cruz and Rubio, probably, but since it looks like the nominee is Trump, are we going to see another Democrat endorsement from MR in 2016? What if Bernie is the Dem nominee? Will establishment Republicans put all of their efforts into drafting and pushing Bloomberg? If Bloomberg doesn't run in such a scenario or looks hopeless, what is a moderate to do, maximize gridlock by voting Bernie president and Repub everything else? That's probably my plan.

I think the odds of a GOP House are pretty high. I got no problem with 4 years of Sanders/gridlock.

"Churchill resigned from the Conservative front bench in the 1930s so he could earn more money as a writer..."

Wow, he really was bad with money.

Churchill was someone who never grew up, all his positives come from this and all his negatives. That he was a spoiled and willful child pretty much explains every policy choice the he ever made.

My favorite Churchill story:

Churchill is at a urinal in the men's washroom when Attlee comes in and he rushes to zip up. Attlee asks him what that was about. And Churchill replies he thought Attlee would see it and want to nationalize it.

The Churchill side of this exchange is completely believable. It is both funny and at the level of a 13 year old boy.

Every time you see something big you want to nationalize it.

Are you suggesting that Marco Rubio might be another Churchill on account of his financial ineptitude?

Rubio is inept with his finances, but he really is a guy who never made much money at all until he got a big advance for his book a few years ago. For example, Rubio's $80,000 "yacht" is just a saltwater fishing boat like countless others in Florida. Ocean-going fishing boats are inherently expensive -- there is little in the way of economies of scale in the industry. It's not like automobiles where $80,000 buys you genuine luxury because the automobile industry is extremely efficient

In comparison to, say, Gov. Scott Walker, who appears to be a genuine tightwad, Rubio would like to live large in the Miami manner. But political work doesn't pay that well, at least not until you get out of it and get paid off (which perhaps is behind Rubio's up or out strategy of not running for re-election to the Senate).

Rubio is another Dave Ramsey by comparison to Bernie Sanders, who was a bum living on welfare handouts until his 40's. Even after thirty years of government employment and marriage to a woman with a six figure income, Bernie carries $65,000 in revolving credit card debt. To me, that is the single most damning thing I ever heard about the old fool.

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