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Category: Winston S. Churchill

Churchill and his Taxes: “Genius has many outlets”

Churchill and his Taxes: “Genius has many outlets”

Taxes and the Man

On the mat­ter of Churchill’s tax­es, a friend quotes a very good his­to­ri­an we both respect. “…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.”

My friend writes: “Sure­ly what Churchill did was just on the bor­der­line of tax-opti­miza­tion? It would only be scan­dalous if it was tax eva­sion. But it was in fact legal.”

I am not an expert on Churchill’s tax­es. I accept that he took what­ev­er mea­sures that were open and legal to min­i­mize the bite. It is true that he “retired” as a writer for tax pur­pos­es from time to time. Read­ers should refer to David Lough’s com­pre­hen­sive No More Cham­pagne: Churchill and His Mon­ey. With regard to his World War II mem­oirs, see also David Reynolds, In Com­mand of His­to­ry: Churchill Fight­ing and Writ­ing the Sec­ond World War.

Paintings not Articles

taxesOf inter­est is a note by Wal­ter Graeb­n­er, Churchill’s edi­tor for Life magazine’s seri­al­iza­tion of his war mem­oirs. In his delight­ful 1965 mem­oir, My Dear Mis­ter Churchill, Graeb­n­er recalls a vis­it to WSC in August 1945. Hav­ing left Down­ing Street fol­low­ing the July gen­er­al elec­tion, the Churchills were stay­ing at Clar­idges, before acquir­ing and mov­ing into 28 Hyde Park Gate.

Five dol­lars a word! That’s what Life offered for his arti­cles. This is $67 a word in today’s money—a fig­ure that makes the heads of us writ­ers swim. Graebner’s com­ments also bear on the tax issue, and Churchill’s tac­tic of “retir­ing” from writ­ing dur­ing peri­ods of high tax vul­ner­a­bil­i­ty:

***

Miss Hill [WSC’s sec­re­tary] opened the door and asked me to take a seat in the draw­ing-room to the left, adding, “Mr. Churchill will be here in a moment.” I looked for a chair, but none was emp­ty. Every chair and sofa in the room had a paint­ing on it, so there was noth­ing for me to do but wan­der around and exam­ine the col­lec­tion.​ ​Here was show­man­ship at its best. Churchill had care­ful­ly set up a pri­vate exhi­bi­tion, and I was his audi­ence.

Just as I had fin­ished inspect­ing the last of about a dozen pic­tures, Churchill walked in wear­ing his blue zip suit, his face pink and pow­dery after a shave, his pale blue eyes smil­ing. “I’ve been on hol­i­day in Italy and the South of France as you may know,” he began, “and while there I made these paint­ings which you see—er—in this gallery—on pri­vate view. You wrote to me a short time ago about writ­ing some arti­cles….”

March­ing up and down the room he con­tin­ued: “That was a very good offer you made me—very flat­ter­ing. I wish I could have accept­ed it. It’s the best offer I’ve ever had. Five dol­lars a word I think it works out at. That’s very good. But I am not in a posi­tion to write any­thing now—perhaps later—but not now. I have gone into the whole thing very care­ful­ly with my advis­ers and they tell, me that if I come out of retirement—you see I’ve been in retire­ment ever since the elec­tion when the peo­ple turned me out—and write any­thing now, I would have to pay tax­es of nine­teen and six in the pound, so what’s the use?”

“Genius has many outlets”

The pound was then worth $4; 19 shillings six­pence or $3.90 rep­re­sents 97.5% of it. Churchill’s remark is a stun­ning illus­tra­tion of the long-run­ning claim of “sup­ply siders” that high tax­es actu­al­ly dimin­ish gov­ern­ment rev­enue by dis­cour­ag­ing the pro­duc­tive from work­ing hard­er. But I digress. Graeb­n­er con­tin­ues:

Then, ges­tur­ing towards the paint­ings, he con­clud­ed: “But these are some­thing else again. Do you think your peo­ple might like to pub­lish them—that is, to take them in place of one of the arti­cles? I would like such an arrange­ment bet­ter for the time being, as the income, I am advised, would be con­sid­ered as a cap­i­tal gain and there­fore non-tax­able.”

The point was clear. Churchill was offer­ing for $25,000 the repro­duc­tion rights to the paint­ings he had made on hol­i­day. It was agreed that I would com­mu­ni­cate with my edi­tors. Before leav­ing I con­grat­u­lat­ed him on the excel­lence of his pic­tures, express­ing sur­prise that he could find the time to take up paint­ing on top of all his oth­er work. Behind an enor­mous grin he mur­mured: “Genius has many out­lets.”

Evi­dent­ly they hadn’t thought of tax­ing cap­i­tal gains in Britain then. And for the record, $25,000 in 1945 is equal to $338,000 in today’s mon­ey.

Do not take Churchill’s wise­crack out of con­text as the expres­sion of a brag­gart. Many such quips are in Graebner’s book. He smiled when he said those things. Win­ston Churchill was not a brag­gart. But he could not resist his lit­tle joke.

Churchill on the Optimist and the Pessimist

Churchill on the Optimist and the Pessimist

Opti­mist and Pes­simist: Fif­teen min­utes of fame! David Davis MP, Sec­re­tary of State for Brex­it, boots one in his recent speech and I’m final­ly in The Guardian. Prob­a­bly the first and last time, giv­en my opin­ions. **

Ques­tion: Refer­ring to your posts of quotations Churchill nev­er said, do you know who actu­al­ly did say “A pes­simist sees the dif­fi­culty in every oppor­tu­nity; an opti­mist sees the oppor­tu­nity in every dif­fi­cul­ty”? I find no attri­bu­tion oth­er than to Churchill.

Pessimist: Not Churchill’s Quip

Answer: Sor­ry. I can’t track it; nor can my col­league Ralph Keyes, edi­tor of The Quote Ver­i­fi­er.

Like many “red her­rings,” the optimist/pessimist quote is all over the web ascribed to Churchill–and not one of those appear­ances offers a source (speech, book or what­ev­er). If he said it, no one has pro­duced the source.

Churchill did say some amus­ing and thought­ful things about opti­mists and pes­simists:

We remem­ber the sar­don­ic war-time joke about the opti­mist and the pes­simist. The opti­mist was the man who did not mind what hap­pened so long as it did not hap­pen to him. The pes­simist was the man who lived with the opti­mist. (1 Decem­ber, 1938, “How Stand Britain and France Since Munich?” Dai­ly Tele­graph; reprint­ed in Step by Step, first edi­tion, page 293.)

For myself I am an optimist—it does not seem to be much use being any­thing else…. (9 Novem­ber 1954, Lord Mayor’s Ban­quet, Guild­hall, Lon­don; The Unwrit­ten Alliance, page 195.)

** Optimist: Nice lines about Europe?

In report­ing this mis­quote in The Guardian, 19 June 2017, Mr. David Hen­ley kind­ly links to this post, while adding:

The great man did, how­ev­er, come up with a few nice lines about Europe. The “sov­er­eign rem­e­dy” to the tragedy of post­war Europe, he said in 1946, was to “re-cre­ate the Euro­pean fam­i­ly … and pro­vide it with a struc­ture under which it can dwell in peace, in safe­ty and in free­dom. We must build a kind of Unit­ed States of Europe.” (Zurich Uni­ver­si­ty, 19 Sep­tem­ber 1946)

A lit­tle more dig­ging would pro­duce a cou­ple of oth­er Churchill lines, from a time when Europe had begun indeed to unite:

It is only when plans for unit­ing Europe take a fed­er­al form that we our­selves can­not take part, because we can­not sub­or­di­nate our­selves or the con­trol of British pol­i­cy to fed­er­al author­i­ties. (House of Com­mons, 29 Novem­ber 1951)

We are not mem­bers of the Euro­pean Defence Com­mu­ni­ty, nor do we intend to be merged in a fed­er­al Euro­pean sys­tem. We feel we have a spe­cial rela­tion­ship to both. (House of Com­mons, 11 May, 1953)

What Churchill real­ly thought about Euro­pean union is devel­oped here­in. See “Zurich +70” and “Bri­tan­nia Waives the Rules.” Not like­ly to make The Guardian, I fear.

Quotations are from…

Churchill By Him­self (USA) and Churchill in His Own Words (new edi­tion, UK).

Why the Turks Like Churchill

Why the Turks Like Churchill

How great was Atatürk? The ques­tion came up exam­in­ing Turk­ish atti­tudes to Churchill, which one might expect would be hos­tile. In 1914, Churchill’s Admi­ral­ty denied Turkey two bat­tle­ships being built in Britain as World War I erupt­ed. In 1915, Churchill pushed hard (though did not con­ceive of) the attacks on the Dar­d­anelles and Gal­lipoli. (See also “com­ments” on this post from thought­ful Turks.)

Atatürk

One his­to­ri­an spec­u­lat­ed that Churchill mir­rored the courage and resource­ful­ness of  Mustafa Kemal (Atatürk). Anoth­er said there “might be a lin­ger­ing impres­sion that Churchill had helped save Turkey from the red men­ace by his resis­tance to Russ­ian demands on the Dar­d­anelles Straits—of course it was Har­ry Tru­man who did the heavy lift­ing there [through the Tru­man Doc­trine]”

Atatürk
Churchill and Inonu, 1943 (Esc­fo­rums, Istan­bul)

The Turks have abun­dant rea­sons to feel pos­i­tive toward Churchill, aside from his per­son­al courage, and his post-1945 resis­tance to Sovi­et designs on the Dar­d­anelles (when he was out of office and pow­er­less). Churchill’s lik­ing for Turkey dat­ed back to 1910, when he toured Anatolia—partly on a loco­mo­tive cow-catcher!—and “met many of the brave men who laid the foun­da­tions of mod­ern Turkey” (as he wrote to Turk­ish Pres­i­dent Ismet İnönü in 1943).

Churchill’s Admiration

Churchill under­took sev­er­al risky trips in World War II. His vis­it to İnönü was one of them. He went to Istan­bul after Casablan­ca, in a peri­od when he was away from home four weeks. Nor was the meet­ing entire­ly in vain, as he told Par­lia­ment in May 1944. Despite “an exag­ger­at­ed atti­tude of cau­tion,” İnönü inter­vened to halt chrome exports to Ger­many. This was more impor­tant then than it may seem now.

Atatürk
Atatürk erect­ed this noble mon­u­ment on the bat­tle­field of Gal­lipoli. His sen­ti­ments are both Lin­col­nesque and Churchillian.

Churchill had pro­found admi­ra­tion for Atatürk. He wrote in 1938: “The tears which men and women of all class­es shed upon his bier were a fit­ting trib­ute to the life work of a man at once the hero, the cham­pi­on, and the father of mod­ern Turkey. Dur­ing his long dic­ta­tor­ship a pol­i­cy of admirable restraint and good­will cre­at­ed, for the first time in his­to­ry, most friend­ly rela­tions with Greece.” (Churchill by Him­self, 321).

Chanak

Sir Mar­tin Gilbert’s Churchill: A Life (and his bio­graph­ic vol­ume IV in more detail) record Churchill’s per­for­mance in the 1922 Chanak cri­sis.  This added to his Turk­ish cred­its. Churchill per­sis­tent­ly argued, in telegrams, let­ters and Cab­i­net meet­ings, for a firm stance by Britain and the Domin­ions. But he restrained a bel­li­cose, pro-Greece Lloyd George from act­ing rash­ly when the Turks marched near British-occu­pied Chanak. Even­tu­al­ly there was a nego­ti­at­ed set­tle­ment. With that, the Con­ser­v­a­tives bolt­ed the Lloyd George Coali­tion. This cost Lloyd George his pre­mier­ship and Churchill his seat in Par­lia­ment. Mar­tin Gilbert con­cludes (Churchill: A Life, 454):

Churchill saw the Chanak cri­sis as a suc­cess­ful exam­ple of how to halt aggres­sion, and then embark on suc­cess­ful nego­ti­a­tions, by remain­ing firm. But “Chanak” had become the pre­text not only for the fall of the Gov­ern­ment but for one more, unjus­ti­fied, charge of his own impetu­os­i­ty.

Meeting İnönü

Gilbert’s Churchill: A Pho­to­graph­ic Por­trait records WSC’s 1943 let­ter above, which he hand­ed İnönü when they met. After remem­ber­ing “the brave men,” Churchill explained:

There is a long sto­ry of the friend­ly rela­tions between Great Britain and Turkey. Across it is a ter­ri­ble slash of the last war, when Ger­man intrigues and British and Turk­ish mis­takes led to our being on oppo­site sides. We fought as brave and hon­ourable oppo­nents. But those days are done, and we and our Amer­i­can Allies are pre­pared to make vig­or­ous exer­tions in order that we shall all be together…to move for­ward into a world arrange­ment in which peace­ful peo­ples will have a right to be let alone and in which all peo­ples will have a chance to help one anoth­er.

Not bad for the hoary old impe­ri­al­ist. This rep­re­sents rather an improve­ment on some more recent west­ern over­tures to Turkey. I sus­pect many Turks still feel pret­ty good about Churchill. The Adana, Turkey sid­ing where the İnönü meet­ing occurred has been turned into a park ded­i­cat­ed to peace.