I did not find the story of Winston Churchill and Andrew Mellon—it found me. As a visiting scholar at Stanford University’s Global Projects Center in the School of Engineering from 2014 to 2016, I researched examples of successful public-private partnerships to use as models for financing infrastructure projects.
Two in particular interested me. One was a grimy oil investment made by Winston Churchill on behalf of the British government in 1914, when he was the First Lord of the Admiralty. The other involved a gift of beautiful paintings from former Secretary of the Treasury Andrew Mellon to the American government in 1937. That neither of these distinguished men were recognized as aces in this specialized field of finance made the partnerships even more intriguing. Little did I know that they would soon become the central figures in a book written by me.
In the course of my research for Mellon vs. Churchill: The Untold Story of Treasury Titans at War, I came across a very short New York Times story reporting that Churchill had hosted a dinner for Mellon at the Ritz hotel in London in September 1926. Churchill was then Britain’s chancellor of the exchequer, and Mellon held the comparable position as the U.S. Treasury secretary. Efforts to learn more about the dinner from biographies and historical texts revealed nothing. Some more digging uncovered two brief mentions of it in other newspapers, but little more.
As Mellon and Churchill were the top officials in government finance for their respective countries, it seemed logical that they might get together as a matter of diplomatic courtesy. But I also learned that they had several interests in common. Were they, perhaps, friends?
It seemed possible, since one of those interests was petroleum. Churchill’s pre-war acquisition of a stake in the Anglo-Persian Oil Company for the British government had long been the envy of investors. Not only did the innovative investment provide an assured source of fuel oil for the Royal Navy, but its value had increased almost five-fold over 12 years. Just months before the dinner, a Mellon-controlled business, Gulf Oil, had acquired an interest in an Iraqi petroleum-exploration company managed by the Churchill-brokered partnership. The thought of Mellon and Churchill as business partners fascinated me.
Or, even more exciting, could it have been art that drew the pair to the same table?
Long before he gained fame as a British statesman, Churchill took up painting as a hobby and became increasingly accomplished with his brushes. At the same time, Mellon, a banker and trailblazing venture capitalist from Pittsburgh, grew more purposeful in his hobby of collecting old-master paintings.
Their shared passion for art was known to several of their mutual associates, as was Mellon’s rumored plan to establish a national gallery of art in Washington. One could almost imagine Mellon and Churchill in white ties and waistcoats, ensconced in one of the Ritz’s private dining rooms, having a spot of champagne and a chat about J. M. W. Turner, the English artist whose paintings they both admired.
As it turns out, I could not have been more wrong. The dinner had nothing to do with oil or art. And the notion of a Mellon-Churchill friendship proved to be wishful thinking. I eventually learned the real story. And what a story it was.
By piecing together accounts from newspaper articles, I learned the true story: that Mellon and Churchill had been locked for years in an epic and bitter battle of wills over the repayment of billions of dollars that Britain had borrowed from the United States to keep from being defeated in World War I. The war of words they waged between 1922 and 1928 made headlines on both sides of the Atlantic at the time—yet historians seemed to have overlooked it.
Churchill argued that the borrowed money had been used to fight German aggression in common cause. Mellon fired back that there was no mention of common cause when Britain signed the loan documents, promising to repay with interest. The cost of the war had also forced Britain to cede to the United States its role as banker to the world. An indignant Churchill led the Allies in a campaign aimed at shaming America into canceling the war debts—which angered an increasingly righteous Mellon, infuriated the usually cool President Coolidge, and failed to move an intransigent United States Congress.
The Mellon-Churchill quarrel had become so acrimonious by 1926 that a dinner at the Ritz was organized as a secret intervention to avoid a permanent rupture in Anglo-American relations. This seems to explain why their protracted dispute never came to light. (The attempt at conciliation succeeded only in moving the quarrel out of the court of public opinion and into the walled garden of velvet-gloved diplomacy.)
In revisiting the scrums and scuffles of these two great characters, the story proved to be more layered than I ever imagined—and an enthralling one to tell.
Jill Eicher is a Washington, D.C.–based writer and scholar
