Jill Eicher‘s book Mellon vs. Churchill: The Untold Story of Treasury Titans At War tells the post-World War I battles between the United States and its allies – primarily the United Kingdom – on repayment of loans made by the US during the war, both before and after the US entered the war. These loans saved Britain from bankruptcy and Andrew Mellon, Secretary of the Treasury maintained the loans be repaid as if a regular business transaction; Britain, not surprisingly, felt the morally-correct action would be for the US to forgive the loans. The US did not capitulate and in 1923 Britain signed a repayment plan that would see the war loans repaid by 1984. [Teaser: the Great Depression and World War II meant the loans never repaid.]
The book focuses on the global politics and fiscal mechanics of the time: Britain pushing for loan forgiveness as the morally-correct course of action; the US refusing to tie repayment to either Britain receiving German war reparations or repayment of British loans to other allies; Mellon’s ability to work with Congress on equitable repayment; Britain pushing for lower interest rates than the allies. Many interesting insights into interwar global politics and global finance with the beginnings of US isolationism that kept the US out of World War II until Pearl Harbor.
That said, the whole Mellon vs. Churchill angle is complete misleading: Mellon and Churchill met only a couple of times and without opportunity to truly discuss the issues. It’s more that Churchill is a celebrity hound, ready to publish his opinions of an issue regardless of appropriateness. He first pronounced opinions was as Secretary of State for the Colonies, not really relevant but likely seen as a pseudo-official government position paper. In fact, Britain signed the repayment plan before Churchill ascended to Chancellor of the Exchequer, so any public pronouncements were only politicized complaints that kept his name front-and-center in the British press.
The Great Depression makes this all moot: in 1931 President Hoover temporarily suspended war-debt repayments and most countries stopped paying entirely. Congress refused to cancel the debts, therefore Britain and most countries defaulted. And then World War II came about. Oh joy.
The book itself is quite interesting, but the title is totally misleading. Worth a read, but don’t expect any knock-down/drag-out between the supposed adversaries.
