In 1940, when Winston Churchill was up to his neck in Nazis, his residence’s spending on alcohol soared to double the amount the government had approved. The solution: List booze outlays under “entertainment expenses.” For Britain’s new prime minister, who took over the very day Hitler invaded Holland, Belgium and France, this was a good deal.
But alcohol prices weren’t Churchill’s biggest problem. In the new book “No More Champagne: Churchill and his Money,” British banker and financier David Lough recounts Churchill’s fascinating financial history that ranged from dire straits to great wealth. He mines writings of Churchill and people close to him that had never been revealed. He also crunches the financial data that were a burden for – or unavailable to – previous biographers.
Interestingly, the British legend is an object of veneration for Prime Minister Benjamin Netanyahu, who himself has stoked a few controversies regarding personal finances. In Netanyahu's office, a portrait of Churchill accompanies one of Theodor Herzl. Netanyahu has even compared himself to Churchill.
In any case, Lough’s book won’t boost anyone’s admiration for the British leader. The man who warned about the Nazis well in advance also accumulated vast debts and got millionaires to cover them.
Churchill gambled heavily at casinos, lost a bundle in the stock market and did everything he could to avoid paying taxes – even when he was chancellor of the exchequer, the head of His Majesty’s Treasury.
Though Churchill was compulsively tardy in paying his debts, he never thought about living a more frugal life. He always knew there would be someone to save the day.
Lough shows how Churchill continued to buy expensive cigars and fine wines even when he couldn’t pay for them. He couldn’t cover his household expenses out of his own pocket and was stung by his huge overdraft.
Churchill liked the company and money of Jewish millionaires, too. One of them, Austrian-born Sir Henry Strakosch, rescued him from two major crises. On June 18, 1940, just one day after 4,000 British soldiers, sailors and civilians were killed when the Germans sank the RMS Lancastria, Strakosch wrote a check for 5,000 pounds. In today’s terms, that’s 250,000 pounds, or 1.25 million shekels ($332,000).
The generous donor didn’t ask for anything in return and kept it a secret. To cover his tracks, Strakosch made out the check to one of Churchill’s close advisers, who in turn signed it over to the big guy. The new prime minister was thus able to pay off the watchmakers, wine merchants and tailors who waited patiently for their due.
Did someone call him schnorrer?
That wasn’t the first time Strakosch had opened his wallet to Churchill; that happened around the time the Germans entered Austria two years earlier. For this he received a thank-you note from Churchill: “This is only to tell you that as Hitler said to Mussolini, on a recent and less worthy occasion, ‘I shall never forget this inestimable service.’”
Churchill actually was a schnorrer from his early days in politics. In 1906, when he was undersecretary of state for the colonies, he was late in paying his private debts. In Lough’s book he's quoted as saying of people waiting to be paid: “They may as well wait a little longer, having already waited so long. I do not want to pay them now unless I am forced, in wh[ich] case I can find the money.”
This was the case regarding his debt to tobacconist J. Grunebaum & Sons, which provided him a dozen cigars a day over five years and never saw a penny. It was also the case regarding the pearl and diamond earrings he gave his wife Clementine on Christmas Eve 1909. Churchill paid fashionably late, three years later. For other items, though, such as champagne (Perrier-Jouet), vermouth and brandy, he made sure to pay on time.
Lough insists Churchill wasn’t an alcoholic, but in the book he quotes an expense report for April-May 1949, during which more than 1,000 bottles of alcohol were ordered for Churchill’s residence including sherry, whiskey and brandy. To Churchill’s credit, remember that by this time he was no longer prime minister, only opposition leader.
A second Jewish millionaire who often came to Churchill’s aid was Sir Ernest Cassel, an old friend of the family. With the help of various money “gifts,” he supported the young Winston.
At the outset of Winston’s public career, Cassel paid for the library in his new home. After World War I, the merchant banker sent him a check to cover housing costs. “My dear Winston: I enclose my cheque for £2,300 in payment for the lease of 2, Hyde Park Street, secured by you on my behalf,” states one of the archival documents cited in the book.
The author comments that “it is unclear whether Churchill repaid Sir Ernest Cassel’s loan of £2,300: no correspondence on the subject with either Sir Ernest or his executors (after his death in 1921) survives.”
The evidence of donations from wealthy Jews could serve as fodder for hatemongers, who often claim that the Jews controlled the British leader. Lough is aware of this and stresses that Churchill never gave wealthy Jews anything in return for their money. He found no connection between Jewish money and Churchill’s efforts against Nazi Germany before the war.
Courtesy Life magazine
Lough is careful not to criticize Churchill, but in interviews in the British media he has said Winston wouldn’t have survived amid today’s demands for full transparency.
Not only private businessmen paid for Churchill’s hedonism; newspapers and magazines took part in the fun. This came in the form of author’s fees for pieces the politician, minister or prime minister wrote, having found time to pen them even at the most historic moments.
The list includes The Daily Telegraph and Life magazine, which went even further and subsidized vacations in exotic spots around the world so Churchill could concentrate on writing.
Later, Life editor Daniel Longwell wrote: “However, and this we must keep private, they were very lavish trips. Always some of the family went along to get their holiday. He had his cronies with him; he sent for various people from England. He had the best in food and hotels. We paid for his sort of state dinner to noteworthy folk, and the expedition to Marrakech presented an expense account I wouldn’t want anyone to peer into too far. I think it was a good investment.”
Churchill’s fame and glory helped him extricate himself from large debts after the war as well. This was the case regarding an evening on a luxury night train in France in 1949. When he asked for the bill, according to Lough, “Unthinkable said the proprietress. It was the greatest honor they had ever had. Perhaps Monsieur Churchill would sign his name in the book. Monsieur Churchill would; and did.”
Churchill entered World War II nearly bankrupt and came out a rich man. Somehow, not only did he lead the war effort, he wrote memoirs and negotiated the sale of the rights. The fact that to write his books he used government-archive documents didn’t faze him at all.
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