Wednesday, 26 October 2011

Why did political giants of the past often end up in debt?

Thomas Jefferson - skint!
Reading Bill Bryson’s excellent At Home: a short history of private life recently,   I was surprised to learn that the American president Thomas Jefferson died    heavily in debt, having spent lavishly on luxuries all his life, including fancy French wines and an enormous (for its time) library of books (which he had to  sell to Congress).

Most of his money went on building an enormous country house, Monticello, which was never finished. When he died, his goods had to be sold at public auction to satisfy his creditors.

This reminded me of the fact that William Pitt the Younger ran up debts of £40,000 (obviously an enormous sum in the 18th Century), which had to be paid off by parliament. In the same era, the greatest Conservative political thinker in history, Edmund Burke, owed £30,000 when he left parliament at the age of 65: his income was £500 per annum. Oops.

Disraeli ran up enormous debts as a young man by speculating rashly in South American mining shares and a disastrous involvement in the launch of a newspaper, The Representative. Those debts followed him well into middle age, but he married money.

Ulysses S. Grant went bust after leaving office. 

Obviously a large number of businessmen, sportsmen and celebrities have found themselves financially embarrassed, including Oscar Wilde, Mark Twain, Henry Ford, Larry King (twice), Donald Trump (his casino business) and Burt Reynolds. But you sort of expect that – businessmen take risks, and writers and actors have fluctuating careers (and often aren't the most practical of people). 

But there’s something shocking about the people who managed their respective nation’s finances (or, in Burke’s case, gave advice on handling them) not being able to manage their own affairs. It's somehow unsettling.

Pitt is the most puzzling, given that he balanced Britain's disastrously depleted budget (for a time) while spending heavily on rebuilding the navy – a policy which probably saved these islands from invasion by Napoleon. As Pitt spent two decades in office and drank heavily, he may just not have had time to go through his cheque stubs.

As for Burke, how odd that someone who identified the political principles of the classic liberal, free market democracy - which would make Great Britain and America in turn very rich countries - couldn’t make money on his own behalf, or keep his spending in check. (Burke was another victim of the contemporary mania for owning large country houses.)

I suppose what puzzles me about these impecunious political giants  is how they were able to concentrate on the task at hand – i.e. running the country  – while drowning in personal debt. Maybe it was because, as David Cecil maintained in Young Melbourne, the style of the time was set by the Whig aristocracy, who thought nothing of losing everything they possessed during a night's gambling in London. Perhaps worrying about one's debts was seen as cowardly and middle-class.

Fortunately, Tony Blair – whose mismanagement of the country led us to our current dire state – hasn’t found making money a problem. Perhaps having a horribly greedy wife helps.


  1. Absolutely fascinating subject.

    1. John Major. After 1997, put in six years with the Carlyle Group. Recommended by George Bush Snr. Presumably earned a fair bit of money. Reputed to get £25,000 a shot for after-dinner speeches.

    2. John Adams, 2nd President of the US. Before that, he was vice president to Washington and according to Gore Vidal in Inventing a Nation p.70:

    It has not been recorded whether Adams wept when he was told that Congress had not only not voted a salary for the vice president but had made no financial allowance of any kind for him.

    Washington, Adams and Jefferson all suffered from the fact that they weren't paid much but were expected to entertain lavishly all the time.

  2. Surely you would have to be certificably insane to pay £2.50 to listen to an after-dinner speech by John Major!!!

    Apparently, Jefferson was really annoyed when Congress showed no eagerness to buy his library , and then offered about half of what he thought they were worth.

    But, to be fair, nobody actually made Jefferson pour huge amounts of money into building himself a state-of-the-art mansion - nior did they insist he stock it with vast amounts of expensive European furniture. It does sound like obsessive behaviour.

  3. You have left out Sir Winston Churchill and Earl Attlee. Throughout his illustrious career WSC was often on his uppers and relied heavily on journalism to make ends meet. At one stage a group of wealthy friends got together and bought off his debts. In spite of serving as Chancellor of the Exchequer for 5-years he hadn't the foggiest idea about controlling his personal finances. Clement Attlee, a selfless public servant and cricket lover, left £7,200 in his will. I think it was "Grocer" Heath who first started to make large sums of money out of the premiership. The Welsh goat used to flog off peerages, but I don't know if he profited personally from this practice? The Kinnocks certainly bought a lot of duty-free while they held their respective EU sinecures. I cannot bear to mention Tony Blair - as Mr Popescu says in "The Third Man" : "It makes me acid!"

  4. Funnily enough, I was also wondering whether the little Welsh sex maniac had pocketed a few quid out of the peerage sales - but I suspect not. Yes, Ted Heath: in James Delingpole's "How To Be Right" he gives Heath a one-word entry. It's a four letter word, and it begins with "c". It would be just as apposite if applied to the Kinnocks. Their son Stephen's wife has just become Denmark's first female Prime Minister. I expect her parents-in-law feel their life-long struggle against privilege has been successful.

  5. ".....and writers and actors have fluctuating careers (and often aren't the most practical of people)."

    W.C.Fields had a hatred for the Internal Revenue Service. On his many successful vaudeville tours he insisted on being paid in cash [see Chuck Berry] and rushed off to bank the money under an alias after the shows. He then retired to refresh himself and consistently forgot to note down any of the banking details. At various times in his life he was on his uppers, knew that he had thousands stashed away but had no idea where. An early disciple of the Sir Fred Godwin school of banking practice? As with RBS, I don't think any of this money was ever recovered.