In the following newspaper articles from 27 June 1954, Churchill is quoted as saying “to jaw-jaw is always better than to war-war”: “Churchill urges Patience in Coping with Red Dangers” by W. H. Lawrence, New York Times, p. 1 and “‘Vigilance and Time’ Asked by Churchill by Walter Trohan, Chicago Daily Tribune, p. 1. —M.D., via email.
From my Definitive Wit of Winston Churchill, page 37:
“Meeting jaw to jaw is better than war.”
–1954 Commonly misquoted as ‘Jaw, jaw is better than war, war,’ an expression coined four years later by Prime Minister Harold Macmillan, on a visit to Australia.
I verified this from Sir Martin Gilbert who refers his official biography, Volume 8, “Never Despair,” London: Heinemann, 1988:page 1004: “Churchill then told the American legislators…that conferences of this kind were vitally important, that meeting jaw to jaw is better than war.”*
* footnote 1: “On 30 January 1958 Harold Macmillan, speaking in Canberra, echoed Churchill’s words with the phrase (frequently but wrongly attributed to Churchill himself), ‘Jaw, jaw is better than war, war.’” Also page 1005 footnote 1: “’Notes on remarks by the President and the Prime Minister at the Congressional Luncheon at the White House, Saturday afternoon, June 26, 1954’: Eisenhower papers.”
Several newspaper accounts appeared at the time, quoting Churchill as saying “jaw-jaw…” etc.. Clearly, the newspapers inaccurately quoted Churchill before Macmillan used the phrase “jaw, jaw” (which may explain where Macmillan picked it up).