Thursday, 15 September 2011

William Pitt's finances

William Pitt the younger became British Prime Minister in 1783 at the age of only 24 and remained in office with just one break of three years through to his death in 1806. During this time he acted as his own Chancellor of the Exchequer, and until the coming of war with revolutionary France in 1792 he must be reckoned as one of the most effective directors of the national finances there has ever been. He achieved what most Chancellors can only dream of: he balanced the budget, put funds aside to pay off the National Debt, reduced customs and excise duties, saved money by letting unnecessary government jobs lapse, and presided over a boom in trade and manufacturing. But, though he was rigorous in his control of the nation's money, his personal finances were in a terrible mess. Despite earning a very high salary of around ten thousand pounds a year (well over half a million pounds in today's money: massively more than the present prime minister is paid), William Pitt was always heavily in debt. It is not at all clear why this should be: he was a batchelor with no family to support, he owned only a very modest country house, he did not gamble or collect art treasures, and his only known vice was heavy drinking. Yet we find him borrowing enormous sums from Coutts Bank and other sources, and then having to take out even larger loans to cover the interest due on these: a certain formula for disaster. By the time of his death, his indebtedness amounted to the equivalent of hundreds of thousands of pounds. Where had the money gone?
John Ehrman, examining Pitt's household bills, finds some extraordinary figures, which must be remembered in the context that most families in his day were surviving on less than £30 a year. In three years, Pitt paid almost £38,000 for stabling horses: a sum amounting to over a million in today's money; and yet he owned only two carriages and never had the least interest in horse-racing. Equally extraordinary were his food bills, including one from the butcher for £96 for two months in 1785, which was equivalent to the cost of one and three-quarter tons of meat! How could this be possible? Was he being swindled by his tradesmen, or robbed blind by his servants? How could a man who was so meticulous with the national finances be so careless with his own?
I sometimes wonder whether Pitt was being blackmailed; but if so, for what? Since he was a batchelor with little interest in women, there were naturally rumours that he might be homosexual, but the best researches of his opponents completely failed to turn up anything scandalous or incriminating against him, and modern historians have been no more successful. The matter is likely to remain a mystery.
Pitt dies in January 1806 at the age of 46, of exhaustion complicated by liver failure brought on by excessive drinking, having spent almost all his adult life as Prime Minister. The previous year had seen Nelson's victory at Trafalgar secure Britain against foreign invasion, but then Napoleon crushed the Russian and Austrian armies at Austerlitz, making it clear that the war would continue for many years yet. Thanks to Pitt's stewardship of the national finances, his successors were able to find the enormous sums needed to win the war; and when the parlous state of his personal finances became known, Parliament voted to pay off his debts by public subscription, as a mark of respect to his memory.

(Source: John Ehrman: "The Younger Pitt; the Years of Acclaim")

1 comment:

  1. Always good to see Pitt being blogged about. Great post, thanks!