Mellon vs. Churchill

Starred review from December 2, 2024
In this gripping debut history, Eicher, a former U.S. Treasury Department credit risk specialist, examines the heated debate over Allied war debt repayment that broke out between U.S. Treasury Secretary Andrew Mellon and British Chancellor of the Exchequer Winston Churchill after WWI. Mellon, one of the richest men in America, believed Allied countries should pay their war debt as agreed, arguing it would help reduce postwar inflation (though Eicher notes that Mellon’s bank in Pittsburgh was deeply involved in financing the war, and he personally had purchased $1 million in war bonds). Churchill, meanwhile, believed that collecting the debt was unethical and boded poorly for America’s future as a global power, and urged for it to be forgiven. Churchill’s party fell out of power and Mellon’s plan triumphed; however, most Allied nations defaulted on their war debts not long after Germany reneged on its reparations payments in 1933. Eicher suggests that the debts caused economic fallout contributing to WWII just as clearly as Germany’s reparations did, and also notes that FDR opted for a differently structured, and more successful, lending system ahead of WWII at Churchill’s behest. Providing an enticing blow-by-blow of the debate, which spilled out into public, Eicher shows how it mixed with discussions about the proposed League of Nations and global unity (“Is the world all one,” or is it possible “to separate the world into little compartments?” one British official mused). It’s a fascinating perspective on the interwar period.

January 1, 2025
When two political giants wrangled over the little matter of a few billion dollars. If an army marches on its stomach, a country at war marches on a mountain of money. As World War I ground on, Britain sought aid from America. When a British delegation arrived in "top hats and frock coats, looking every bit the way Americans pictured English diplomats," it returned to Britain with $3 billion, just some of the money the American government and private banks loaned out for the war effort. After the war, as first-time author Eicher chronicles, the job of collecting the debt went to Andrew Mellon, secretary of the treasury, while Winston Churchill, then finance minister, argued vehemently that the U.S. should write off the debt. The relations between the two men, Eicher writes, were chilly, and seldom did they come to terms on that or any other matter. Eicher's narrative winds into repetitive territory as Mellon dunned Churchill for years--and for years Churchill evaded the bill. Eicher does not adequately address the implications that alternate paths might have yielded: If Germany had not been saddled with an enormous war debt and reparations (which, to its credit, it tried valiantly to pay), would Hitler have been able to rise to power? In that light, Churchill's proposed alternate strategy might have changed world history: "We should declare publicly," he said, "that we are perfectly ready to wipe out every European debt owing to usif the United States will accord us a similar release." Instead, Mellon, though with some misgivings, continued to press for repayment, and Britain and other allies defaulted. Indeed, Eicher notes, to this day those debts "remain outstanding on the books of the U.S. Treasury." Of some interest to students of the historical interplay between geopolitics and international finance.

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February 1, 2025

Eicher's debut book shares the previously untold story of Winston Churchill and Andrew Mellon's five meetings to work out an ongoing dispute over World War I debts that the UK and Europe owed to the United States. Eicher, a former U.S. Treasury specialist in credit risk, focuses on 1924-29, when businessman Mellon was the U.S. Secretary of the Treasury, and Churchill was British Chancellor of the Exchequer. After the end of World War I, the U.S. advocated for no cancellation of debts of the Allies, whereas the Allied Forces called for the cancellation of debts. Great Britain was the United States' biggest debtor, so Churchill launched a campaign that urged the U.S. to act on moral principles and cancel the debts. Eicher narrates how Mellon and Churchill, two very different individuals in personality and background, clashed on this point and never came to an agreement or understanding. VERDICT This highly recommended, extensively researched work fills a gap in biographical information on Churchill and Mellon and presents a vivid account of interwar UK-U.S. relations.--Lucy Heckman

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