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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.

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.

Churchill as Anti-Semite: Rubbish

Churchill as Anti-Semite: Rubbish

A life­long sup­port­er of Zion­ism and the Jews, Win­ston Churchill is some­times labeled an anti-Semi­te. The prof­fered evi­dence, an alleged arti­cle of his, has made the oblig­a­tory rounds of the Inter­net.

A 1937 arti­cle draft in the Churchill Archives sup­pos­ed­ly proves that Churchill’s off-expressed sym­pa­thy for the Jews was hypocrisy. Churchill was, if this arti­cle is to be believed, a clos­et anti-Semi­te.

Origins of a Slur

The alle­ga­tions began with a 2007 arti­cle in Britain’s The Inde­pen­dent: “Uncov­ered: Churchill’s Warn­ings About the ‘Hebrew Blood­suck­ers.’”

The 1937 draft, “How the Jews Can Com­bat Per­se­cu­tion,” had “appar­ent­ly lain unno­ticed in the Churchill Archives at Cam­bridge since the ear­ly months of the Sec­ond World War,” stat­ed The Inde­pen­dent:

Churchill crit­i­cised the “aloof­ness” of Jew­ish peo­ple from wider soci­ety and urged them to make the effort to inte­grate themselves….Churchill says: “The cen­tral fact which dom­i­nates the rela­tions of Jew and non-Jew is that the Jew is ‘dif­fer­ent.’ He looks dif­fer­ent. He thinks dif­fer­ent­ly. He has a dif­fer­ent tra­di­tion and back­ground.” He then goes on to crit­i­cise Jew­ish money­len­ders: “Every Jew­ish money­len­der recalls Shy­lock and the idea of the Jews as usurers. And you can­not rea­son­ably expect a strug­gling clerk or shop­keep­er, pay­ing 40 or 50 per­cent inter­est on bor­rowed mon­ey to a ‘Hebrew Blood­suck­er,’ to reflect that almost every oth­er way of life was closed to the Jew­ish peo­ple.”

Some of this could be the words of an anti-Semi­te. But Churchill did not write them. Nor did he pub­lish them. Nor did he approve of them.

Anti-Semite Marshall Diston

“How the Jews Can Com­bat Per­se­cu­tion” had not “lain unno­ticed since the Sec­ond World War.” It was “unearthed” over three decades ago by the Churchill biog­ra­ph­er Sir Mar­tin Gilbert. It is among the mil­lion doc­u­ments in the Churchill Archives Cen­tre. Gilbert pub­lished it in 1982 in Win­ston S. Churchill, Com­pan­ion Vol­ume V, Part 3, The Com­ing of War: Doc­u­ments 1936-1939. Today it is in The Churchill Doc­u­ments, Vol­ume 13 (Hills­dale Col­lege Press, 2009), page 670.

Gilbert reveals that the arti­cle was writ­ten entire­ly by a British jour­nal­ist, Adam Mar­shall Dis­ton (1893-1956)—a jour­nal­ist, a fol­low­er of Sir Oswald Mosley’s New Par­ty before it became fas­cist, and a would-be Labour can­di­date for Par­lia­ment in 1935. Dis­ton was also an anti-Semi­te. Churchill, Gilbert notes, was then writ­ing on aver­age an arti­cle a week—so he hired Dis­ton to draft cer­tain arti­cles. Churchill amend­ed most Dis­ton drafts before pub­li­ca­tion; he pub­lished una­mend­ed.

It is impor­tant to keep Diston’s role in per­spec­tive. Drafts for Churchill’s weighty his­to­ries, such as Marl­bor­ough and A His­to­ry of the Eng­lish Speak­ing Peo­pleswere pre­pared by dis­tin­guished his­to­ri­ans such as Bill Deakin and Kei­th Feil­ing. Dis­ton draft­ed some of what Churchill called “potboilers”—articles writ­ten to help main­tain his expan­sive staff and lux­u­ri­ous lifestyle. (“We loved pot-boil­ers,” his for­mer sec­re­tary Grace Ham­blin told me. Churned out raid­fire, they went straight to mag­a­zine edi­tors. They had none of the fas­tid­i­ous revi­sion Churchill afford­ed his books.)

Not Churchill’s Work

“How the Jews Can Com­bat Per­se­cu­tion,” con­tin­ued Sir Mar­tin, “was the only seri­ous sub­ject Dis­ton was asked to tack­le. [And] he went over the top in the use of his lan­guage.”

When con­vey­ing the draft to Churchill, Dis­ton rec­og­nized his excess­es: “Mrs. Pear­man [Churchill’s sec­re­tary] did not tell me for what paper it was want­ed,” he wrote Churchill. “If it is for a Jew­ish jour­nal, it may in places be rather out­spo­ken. Even then, how­ev­er, I do not know that that is alto­geth­er a bad thing. There are quite a num­ber of Jews who might, with advan­tage, reflect on the epi­gram: ‘How odd, Of God, To choose, The Jews.’” It is impos­si­ble to describe those words as oth­er than those of an anti-Semi­te.

Sub­se­quent cor­re­spon­dence in the Churchill Archives, from March 1940, has Charles Eade, then Churchill’s edi­tor for his war speech­es, sug­gest­ing that Diston’s “rather provoca­tive” arti­cle be pub­lished in the Sun­day Dis­patch. Kath­leen Hill, for­ward­ed Eade’s pro­pos­al to Churchill with a note:

I can­not trace that this arti­cle on the Jews has ever been pub­lished. You orig­i­nal­ly wrote it for the Amer­i­can Mag­a­zine Lib­er­ty about June 1937….However, the arti­cle was not pub­lished as Col­liers object­ed to any of your arti­cles appear­ing in a rival mag­a­zine. (Churchill Archives, CHAR 8/660/32.)

Churchill him­self would not have him­self sought to pub­lish the arti­cle, Mar­tin Gilbert explained: “His pri­vate office did that, and was always most effi­cient.” It is not clear that Churchill even read either the orig­i­nal or the retyped Dis­ton arti­cle. His usu­al­ly copi­ious red-ink cor­rec­tions are not there.

Excuses and Prevarications

Were Col­liers’ objec­tions the prob­lem? Col­liers was Churchill’s pri­ma­ry Amer­i­can arti­cle out­let. But that opin­ion was Mrs. Hill’s, not Churchill’s. While she might have remem­bered Col­liers’ objec­tions, Churchill had oth­er out­lets. And he was nev­er one to fail to place a good sto­ry. Yet, after read­ing Mrs. Hill’s memo, Churchill him­self wrote across the bot­tom: “bet­ter not.” Mrs. Hill duly informed Charles Eade: “Mr. Churchill thinks it would be inad­vis­able to pub­lish the arti­cle.” (Churchill Archives, CHAR 8/660/31.)

Notwith­stand­ing that it was Dis­ton not Churchill who wrote of “Shy­lock” and “Hebrew Blood­suck­ers,” we may be sure The Independent’s sto­ry or por­tions of the Dis­ton draft will con­tin­ue to sur­face as proof of Churchill’s anti-Semi­tism. There is an ele­ment today that seeks always to decon­struct time-proven insti­tu­tions, soci­eties and lead­ers. No mat­ter how pos­i­tive their record, their least pec­ca­dil­loes prove they are no bet­ter than the vil­lains of his­to­ry: that “we” are no bet­ter than “they.” Call it the Feet of Clay School.

Leave aside Churchill’s life­long sup­port of Zion­ism. For­get his legion of Jew­ish friends, from Sir Ernest Cas­sel to Hen­ry Strakosch to Bernard Baruch, who stuck by him when it took courage to do so, often bail­ing him out of finan­cial mis­for­tune. Omit the fact that his offi­cial biog­ra­ph­er was also a lead­ing Holo­caust and Jew­ish his­to­ri­an. Churchill cham­pi­oned the Jews. He deplored their per­se­cu­tion. “How can any man be dis­crim­i­nat­ed against,” he once asked, “pure­ly because of how he was born?”

Second and Third Thoughts

But Churchill was not an uncrit­i­cal friend. Out­raged by the 1944 killing of his friend Lord Moyne, Min­is­ter Res­i­dent in Cairo, by mem­bers of the ter­ror­ist Stern Gang, Churchill said: “If our dreams for Zion­ism are to end in the smoke of assas­sins’ pis­tols and our labours for its future to pro­duce only a new set of gang­sters wor­thy of Nazi Ger­many, many like myself will have to recon­sid­er the posi­tion we have main­tained so con­sis­tent­ly and so long in the past.” Despite his out­rage, he refused to agree to a Colo­nial Office pro­pos­al after Moyne’s death to curb Jew­ish immi­gra­tion to Pales­tine, and refused to appoint as Moyne’s suc­ces­sor two senior Con­ser­v­a­tives whom he knew were opposed to Zion­ism.

Churchill “always had sec­ond and third thoughts, and they usu­al­ly improved as he went along,” wrote William Man­ches­ter. Along with his sec­ond thoughts go Churchill’s integri­ty. He pays no heed to “pub­lic opin­ion.” He would not rec­og­nize what we call today Polit­i­cal Cor­rect­ness.

Reflect­ing on his four decades as offi­cial biog­ra­ph­er many years ago, Sir Mar­tin Gilbert said a thing about Churchill we should nev­er for­get: “I nev­er felt that he was going to spring an unpleas­ant sur­prise on me. I might find that he was adopt­ing views with which I dis­agreed. But I always knew that there would be noth­ing to cause me to think: ‘How shock­ing, how appalling.’”

No. Not once.